The Court of Appeal, Lagos Division, has overturned a 2013 judgment of the Federal High Court, which allowed Guaranty Trust Bank Plc to foreclose on a N30bn 44-room mansion in Ikoyi, Lagos, belonging to Alhaji Agboola Abiola, son of the late business mogul and politician, Chief M.K.O. Abiola.
A Certified True Copy of the ruling in Appeal No. CA/L/888/2014, obtained by The PUNCH showed that the appellate court found significant discrepancies in the execution of the tripartite legal mortgage that GTBank relied on to secure the loan.
The unanimous judgment, delivered by Justice Paul Aimee Bassi, with Justices Polycarp Kwahar and Abdulaziz Anka concurring, held that the trial court erred in failing to properly evaluate serious allegations of forgery and fraud raised by the appellants.
The appeal stemmed from a June 20, 2014, decision by the Federal High Court in Lagos, which granted reliefs sought by GTBank in a motion filed on April 8, 2014.
Dissatisfied with the ruling, the appellants, represented by Dr Charles Adeogun-Phillips (SAN), filed a four-ground notice of appeal.
The main issues before the court included whether GTBank had the right to regularise its affidavit after the matter had been adjourned for judgment, whether the trial court rightly granted the bank’s reliefs, and whether a valid legal mortgage existed to justify the bank’s appointment of a receiver over the Ikoyi property.
In his lead judgment, Justice Bassi ruled that the mortgage instrument relied on by the bank was fundamentally flawed and incapable of conferring any right of foreclosure.
Dissatisfied with the ruling, the appellants, represented by Dr Charles Adeogun-Phillips (SAN), filed a four-ground notice of appeal.
The main issues before the court included whether GTBank had the right to regularise its affidavit after the matter had been adjourned for judgment, whether the trial court rightly granted the bank’s reliefs, and whether a valid legal mortgage existed to justify the bank’s appointment of a receiver over the Ikoyi property.
In his lead judgment, Justice Bassi ruled that the mortgage instrument relied on by the bank was fundamentally flawed and incapable of conferring any right of foreclosure.
They alleged that after liquidating the shares pledged as collateral under the N508m loan, the bank improperly attempted to use the same execution page to enforce the N1 bn loan.
Meanwhile, police investigations that were conducted yielded inconclusive results.
In one of the reports, arbitration was recommended between the parties, while another dismissed the forgery allegations.
Nevertheless, the appellate court held that such reports could not resolve the lingering doubts surrounding the authenticity of the document in question.
Justice Bassi noted several irregularities in the pagination of the deed.
The main pages were numbered from “2 of 9” to “9 of 9,” while the execution page carried the notation “11 of 17,” indicating that it was likely sourced from an entirely different document.
He criticised the trial court for overlooking these anomalies and focusing solely on the interpretation of Clause 6 of the mortgage deed.
According to the appellate court, a document whose authenticity is in dispute cannot form the basis for adjudicating parties’ rights and obligations.
Justice Bassi held: “The lower court erred by ruling on a document whose authenticity was seriously in question. This appeal succeeds.
“The judgment of the lower court dated June 20, 2014, is hereby set aside. Parties shall bear their respective costs.” DL//Punch
