Applicability of the Money Laundering Act to Legal Practitioners in the Court of Appeal of Nigeria

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In the Lagos Judicial Division Holden at Lagos On Friday, the 14th day of May, 2021

Before Their Lordships
Chidi Nwaoma Uwa
Tunde O. Awotoye
James Gambo Abundaga
Justices, Court of Appeal
CA/L/174/2019

Between

Federal Republic of Nigeria Appellant

And

Chief Mike Ozekhome (SAN) Respondent

(Lead Judgement delivered by Honourable Chidi Nwaoma Uwa, JCA)

Facts

The Appellant approached the Federal High Court, Lagos, seeking an ex-parte order of interim attachment and to freeze for a period of 120 days, an account belonging to and operated by the Respondent’s law firm domiciled with Guaranty Trust Bank Plc. By the said application and lone evidence of the Appellant, the court made an interim order freezing the Respondent’s account. Thereafter, the Respondent filed an application before the court to discharge the interim order made.

The grounds for the application to discharge the order were stated as – (i) suppression of facts; and (ii) non-compliance with the rules of court and judicial authorities regulating the grant of ex-parte applications by the Applicant. The Appellant opposed the application by way of counter-affidavit, further affidavit and written address, while the Respondent reacted by filing a further affidavit and written address. The court heard arguments of parties on the application, and delivered its ruling, setting aside the interim order freezing the account belonging to and operated by the Respondent’s law firm.

Dissatisfied with the ruling of court, the Appellant appealed the decision to the Court of Appeal. Though the Respondent argued a Preliminary Objection/Preliminary Point along with his argument on the issues for determination, the Court of Appeal did not countenance the submissions in respect of thereof and deemed the objection as abandoned for failure to comply with the rules of court on filing of Preliminary Objection.

Issues for Determination

The issues for determination for resolution of the appeal were:

1. Whether having regard to the facts and circumstances of this case, the court below has the requisite jurisdiction to set aside its own order of interim attachment before the expiration of 120 days granted to the Appellant to conclude its investigation.

2. Whether having regard to the facts and circumstances of this case, the learned trial Judge was not in error when, in setting aside its own order, relied on the evidence that the sum of N75 million received by the Respondent was for services rendered but failed to rely on the evidence of the Appellant showing that the said sum were proceeds of the unlawful activities of the Respondent’s clients and his cronies.

3. Whether the lower court was not in error when it held that Legal Practitioners are excluded from the definition of Designated Non-Financial Institution contained in Section 25 of the Money Laundering Act, 2011 (as amended), and not under obligation to comply with the provision of Section 10 of the said Act.

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Arguments

Arguing the first issue raised, the Appellant submitted that the jurisdiction of the court to set aside its own order or an order of a court of co-ordinate jurisdiction is rare and special. Relying on the authority of EFCC v FAYOSE (2018) LPELR-44131(CA) 67-69, the Appellant argued that the lower court was wrong to have set aside its own order which it made with requisite jurisdiction, without evidence, misrepresentation or suppression of facts before it. Responding to the argument on this issue, the Respondent submitted that a court of law has the inherent power to set aside its decision or that of a court of co-ordinate jurisdiction on the ground of misrepresentation, suppression of material facts, or where irregularly granted – AGHA v COMMISSIONER FOR LOCAL GOVERNMENT (2016) LPELR-40544(CA). Counsel argued that the Appellant failed to show how the ruling of the lower court amounted to denial of fair hearing, and occasioned miscarriage of justice. He posited that the decision of the lower court on the ex-parte application was given without jurisdiction ab initio, and ought to have been set aside even without an application by the Respondent; more so, an ex-parte application does not operate in perpetuity.

On the second issue, counsel submitted on behalf of the Appellant, that the lower court was in error when it ignored the evidence presented by the Appellant, which established the unlawful source of the sum of money transferred by the then Governor of Ekiti State to the Respondent, but relied on the evidence of the Respondent that, as at the time the money was transferred to the Respondent, the account of the erstwhile Governor was unfrozen. Counsel posited that the fact that the account which housed the proceeds of the alleged unlawful act was not frozen, cannot be a ground for the Respondent to receive, retain, use and/or take possession of funds which he ought to have known was proceed of unlawful activities, relying on Section 15 of the Money laundering Prohibition Act, 2011 (as amended). Opposing the Appellant’s submission on the issue, the Respondent argued that the decision of the Federal High Court, Ado-Ekiti, which was the extant decision at the time the account was unfrozen, was to the effect that the sum of N75 million paid to the Respondent was for his professional fees for services rendered. He argued that it is not the law that a legal practitioner should enquire about the source of the money from which his professional fee is paid, especially from a State Governor. More so, a legal practitioner is entitled to his fees – GUARANTY TRUST BANK PLC & ANOR v UDOKA ANYANWU ESQ. (2011) LPELR-4220(CA).

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Regarding the third issue, the Appellant argued that the lower court was wrong when it held that legal practitioners are excluded from the statutory list of Designated Non-Financial Institutions, contrary to the provisions of Section 25 of the Money Laundering Prohibition Act, 2011 (as amended). Counsel submitted that the role of the court is to interpret the law, and not to amend it. Counsel urged the court to interpret Sections 10 and 25 of the Act in line with the intention of the law makers. Responding to this submission, the Respondent argued that the provisions of Section 25 of the Money Laundering Act does not apply to legal practitioners. Counsel relied on the decision in FHC/CS/CS/173/2015 REGISTERED TRUSTEES OF THE NIGERIAN BAR ASSOCIATION v A-G FEDERATION & CBN, where the provisions of Section 192 of the Evidence Act was relied on, in holding that the said Section 25 of the Money Laundering Act does not relate to legal practitioners and same was declared null and void.

Court’s Judgement and Rationale

Deciding the first issue, the court held that a court has the inherent power to set aside its decision or that of a court of co-ordinate jurisdiction, under special circumstances. Where a court makes a decision without jurisdiction or where the decision is afflicted by another virus capable of rendering the decision ineffective, null and void, the court can invoke its inherent jurisdiction or power to set same aside – UBA PLC v MAGAMA NIGERIA LIMITED & ANOR. (2013) LPELR-20685(CA). A court of law can set aside, vary or discharge its ex-parte order under the circumstances provided for in decided authorities. In this case, the evidence before the court showed that the money was paid into the account of the Respondent from an unencumbered account of the Governor; thus, the lower court found that the Respondent did not commit any infraction to warrant his account being blocked and frozen by the Appellant. The application by the Respondent for an order setting aside the earlier order of court freezing the Respondent’s account showed that there was misrepresentation of facts, non-disclosure and suppression of material facts by the Appellant, in securing the interim order to freeze the account operated by the Respondent’s law firm. The Appellant failed to disclose to the lower court, that at the time of the ex-parte application, there was an order of court in place which unfroze the account of the then Governor of Ekiti State before the sum of money was transferred to the Respondent’s law firm. It follows that the interim order of attachment or forfeiture to freeze the account of the Respondent’s law firm was made without jurisdiction, and rightly set aside by the court. The application to set aside the order was also in line with the rules of court, which allows a party to apply to have the issuing court set aside its ex-parte order within seven days. The court held further that the allegation of lack of fair hearing by the Appellant, was unsubstantiated.

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Resolving issue two, the appellate court held that the decision of the Federal High Court, Ado-Ekiti which unfroze the account of Mr. Ayodele Fayose, from which the professional fee was paid to the Respondent, was a subsisting and binding decision at the time the ex-parte order was made. Though the Appellant alleged that the decision was perverse, it was not set aside. By implication, it remains the law, valid and binding, vacating an earlier order of court on the subject on the basis that the court acted without jurisdiction. Further, the court held that a legal practitioner is entitled to his professional fees for services rendered, and such fee cannot rightly be labelled as proceeds of crime. It is not the law that a legal practitioner will go into enquiry, before receiving fee from his client. There was nothing on record to show that the funds received by the Respondent’s law firm was pursuant to an order of court, or Proceeds from unlawful activities.

Deciding the third issue, the court relied on the decision of REGISTERED TRUSTEES OF THE NIGERIAN BAR ASSCOCIATION v A-G. FEDERATION & ORS – FHC/CS/173/2015. The court held that legal practitioners are excluded from the definition of designated non-financial institutions as contained in the Money Laundering Prohibition Act (which the court held was inconsistent with Section 192 of the Act). This decision defines the law until same is set aside – AKINTOGUN v LPDC (2014) LPELR-22941.

Appeal Dismissed; Ruling of the lower court Affirmed.

Representation
U.U. Buhari Esq. for the Appellant.

Ejike Onuoha Esq. for the Respondent.

Reported by Optimum Publishers Limited, Publishers of the Nigerian Monthly Law Report (NMLR)(An affiliate of Babalakin & Co.)

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