LEGALITY OR OTHERWISE OF ORDER, FREEZING BANK ACOUNT ON EXPARTE APPLICATION FOR 90 DAYS

1.Introduction: On the 4th of November, 2020 CBN obtained a bank Court order to freeze the accounts of 19 individuals and Gatefield, a public affairs company linked to #EndSARS protests for 90 days and adjourned the case to 4th February, 2020.[1]

According to the copy of the Court order in the public domain, all the accounts belonging to the defendants are to be frozen forthwith for a period of 90 days pending the outcome of investigation and inquiry currently being conducted by the Central Bank of Nigeria (CBN). Copies of the motion exparte and the affidavit relied on by the CBN are not in circulation as at the time of this write up, hence, we cannot confirm what exceptional situation or the offence being investigated nor enabling law presented before the Court to warrant the order being granted for 90 days without hearing the defendants.

Before the Court order of 4th November, the apex bank reportedly instructed banks to place a “Post No Debit” restriction on the accounts of protesters. One of such is Bassey Israel, a pharmacist, who was in charge of the #EndSARS medical team in Port Harcourt and who reportedly said his account with Access Bank marked 003397XXXX has been frozen since October 15.[2]

There has been an uproar as to the legality of the order and questions have arisen as to whether the fundamental right of the defendants have been breached. This article will explain what an exparte application is, the power of court to make an order exparte, how long can the order last and remedy available to the defendants.

2. What is an exparte application:

Exparte application is an application, also called motion, brought before the Court without notice to the people who will be affected by the grant of the application. “The latin expression "exparte" means on one side only; by or for one party; done for, on behalf of, or on the application of one party only. In an "exparte"application or application exparte, only the applicant is heard. An "exparte " application has no respondent. Even if the defendant in the matter is present in court, he cannot be heard to respond unless with the permission of the court. In most cases the court does not grant such permission.”[3] 

3. Court power to grant order exparte freezing account.

Generally, trial courts are admonished to be reluctant to make interim orders exparte unless the circumstances are exceptional and the opposing party cannot be put on notice. Exparte orders are not generally made in contentious matters and if made, are followed by an immediate order for service on the adverse party to respond at the earliest opportunity. This is so because exparte order arising from exparte application has the capacity of breaching the fair hearing provision of Section 36 of the 1999 Constitution of the Federal Republic of Nigeria,(As amended) and the natural justice rule of audi alteram partem. Courts are thus reluctant in making such orders.

However, Courts are conferred with power to adjudicate on matters by either the Constitution or statute with regard to some subject matters. There are many statutes that empowers different authorities to approach the Court to freeze accounts and asset of individuals to preserve the res, pending investigations, among other reason. For instance section 29, and 34 Economic and Financial Crimes Commission (Establishment, Etc) Act, 2004.( EFCC Act) allows the EFCC to approach the Court for an interim order of forfeiture and freezing order on banks or other financial institutions and such order may only be discharged where the defendant is discharged and acquitted. Section 50 of AMCON Act, As Amended, 2019 allows AMCON to obtain an order exparte to freeze the debtor or debtor company’s account and such order may subsist till judgment or a final determination of the action, unless expressly discharged by the court. Also, Section 8 of the Recovery of Public Property (Special Provisions) Act allows Court to make an interim attachment in a pending trial where prima facie case has been made out against the person whose property is the subject of the attachment or freezing order.

In like manner, the CBN is empowered by Section 60B of the Banks and Other Financial Institutions (Amendment) Act, 2002 empowers the Court to freeze the account of company and individual exparte, where the governor believe that transactions undertaken in any bank are such as may involve the commission of any criminal offence under any Law. The Act further provides that

 “ (3)Where an account has been frozen pursuant to this section the Governor shall refer the matter to the Nigeria Police Force, the National Drug Law Enforcement Agency or any other appropriate regulatory authority .

(4) Where it is not possible for Nigeria Police Force, National Drug Law Enforcement Agency or any appropriate authority to conclude its investigations within the period stipulated in the Court order, the Governor shall apply to the Federal High Court for an order for the continued freezing of the account concerned.”

It can therefore be concluded that the Court is empowered to make the order as he did on the 4th of November, 2020 against the #Endsars protesters.

It may be argued that the order is not properly given for noncompliance with the Rules of Court. Order 26 Rule 6 of the Federal High Court Civil Procedure Rules, 2019 provides that all motion is to be on notice except in emergency. However, the Court is empowered to (if satisfied that to delay the motion till after notice is given to any party affected would entail irreparable damage or serious mischief to the party making the application) make an order exparte upon such terms as to costs or otherwise and upon such undertaking, as the justice of the case demands. Even where there is an exceptional situation that warrants hearing motion exparte, the applicant shall not make an application for an injunction exparte unless he files with it a motion on notice in respect of the application.[4] On the face of the order freezing the account of #EndSars Protesters, there is nothing to show that a motion on notice was filed along with the motion exparte neither is there anything mentioned as to cost, and undertaking as to damages if it is shown that the application was made in bad faith.

Unfortunately, the enabling Act, made no provision for putting the defendant on notice or provision for damages, hence this argument may not avail the defendants. The provision of a statute overrides the provision of rules of court. In other words, provisions of statutes always have overriding effect over rules of court and are therefore superior in force.[5] 

4. Whether the laws empowering the Court to make order exparte are constitutional

Another troubling question is the constitutionality of the statute allowing the court to freeze account of his subject without hearing them. As awkward as it may sound, freezing order made exparte pursuant to the provision of Statutes is not unconstitutional. In the case of Dangabar v. FRN (2014) 12 NWLR (Part 1422), 589, the Court of appeal in resolving a question on whether the ex parte order of the trial court freezing the account of the defendant made pursuant to the provision of the EFCC Act was unconstitutional, the Court resolved that such order is consistent with the intendment of section 44(2)(k) of the Constitution of the Federal Republic of Nigeria, 1999, (as amended) which permits the temporary taking of possession of property for the purpose of any examination, investigation or inquiry.

5. For how long can the order stand

By Order 26 Rule 10(1) of the Federal High Court Rules, an Order made on motion exparte may not, unless the Court otherwise directs in the interest of justice, last for—

(a) more than 14 days after the party or person affected by the Order has applied for the Order to be varied or discharged; or

(b) another 14 days after application to vary or discharge it has been argued.

(2) An application to vary or discharge an order made exparte may be made by the party or person affected within 14 days after service and shall not last for more than 14 days after the application has been argued unless the Court otherwise directs.

(3) Where a motion to vary or discharge an exparte order is not taken within 14 days of its being filed, the exparte order shall lapse unless the court otherwise directs in the interest of justice.

By combined reading of Rule 10 of order 26, the life span of an order made exparte is 14 days. However, based on BOFIA the order will last till the time the Court had given or such an extended time, until the conclusion of the investigation.

6. Is it proper for the CBN to freeze account before approaching the court

 Accordingly to a certain Bassey an #EndSAR protester in Port Harcourt, River State, Nigeria, he alleged that the CBN directed his Bank Access Bank to freeze his account since 15th of November, 2020 before filing the application in Court. If this allegation is true, such act is not proper. In G.T.B. Plc v. Adedamola (2019)5 NWLR (PT 1664) 30, where EFCC directed GTB to Freeze the account of the Appellant without first obtaining the Court order, the Court held that ‘before freezing customer’s account or placing any form of restrain on any Bank account, a bank must be satisfied that there is an order of court. By the provisions of section 34(1)of the Economic and Financial Crimes Commission Act,2004 the Economic and Financial Crimes Commission has no power to give direct instructions to Banks to freeze the account of a customer without an order of court, so doing constitutes a flagrant disregard and violation of the rights of a customer.

Provision of the EFCC Act is similar to Section 60B of BOFIA and thus, if the CBN had frozen any account before approaching the Court on the 20th October, 2020, such act is a violation of right of the customer. It is the duty of a learned counsel as minister in the temple of justice to always be on the side of the law and sound logic, and under a duty not to mislead the court, and not to defend the indefensible.[6] Also, “The judiciary has the onerous duty of preserving and protecting the rule of law, the principles of rule of law are that, both the governor and the governed are subject to rule of law, no one is above the law. Whenever there is brazen violation of the rights of a citizen the courts in the discharge of their responsibility to the society must rise to the occasion, speak, frown, and condemn arrogant display of power by an arm of government. It is in the interest of both government and citizens that laws are respected, as respect for the rule of law promotes order, peace and decency in all societies, we are not an exception. Whenever there is a specific provision regulating the procedure of doing a particular act, that procedure must be followed”.[7]

7. What remedy is available to the defendants.

When there is wrong, there is remedy, consequently, the affected parties are allowed by the rules of court to apply to Court to discharge the order freezing their account within 14 days of the making of the order experte. The defendant may also apply to the court to hear their application earlier than 4th February, 2021 as same is likely to cause exceptional hardship which may not be assuage by grant of damages.

On the application of the Defendants, the Court may either discharge the order or make the same absolute, adjourn or permit further evidence to be produce in support of or against the order, and may modify the terms of the order so as to meet the merits of the case.[8] The Court may in any cause and matter make any order which it considers necessary for doing justice, whether the order has been expressly asked for by the person entitled to the benefit of the order or not.[9]

For those whose accounts were frozen before obtaining Court order to freeze their account, may apply to enforce their fundamental right just as was seen in the case of G.T.B. Plc v. Adedamola (2019)5 NWLR (PT 1664) 30.

8. Conclusion:

In conclusion, the usual practice, where the exigency of the situation demands, is to grant an exparte interim injunction until a certain day or until the next motion day when the other party can be put on notice to defend the application. Anything to the contrary is a travesty of the most elementary and fundamental rule of natural justice audi alteram partem.[10] However, the fundamental right of an individual is not absolute and the Court is empowered by Statute to grant the order of the CBN till the conclusion of the police or NDLA investigation. 

In the court of public opinion, the application of CBN is oppressive, tyrannical, despotic and capricious as it appears to have been made to scare the youth from airing their view and further to the #LekkiMassacre. In fact the #LekkiMassaccre and the CBN application freezing accounts of protesters was activated on the same 20th October, 2020.  However, in the law Court, the CBN application exparte is constitutional. The Courts do not act on sentiments and speculations but rather on law and facts presented before it. Although, it is often said that the constitution guarantees the right of the citizens, Section 45 (1(a) (b) of the Constitution allows the law maker to stripe off that right.

In my view, our freedom is like a bird in a cage. Until we have servant-leaders, and independent institutions, our right remains a mirage.

Written by Eunice Olatunji

@hephzibah_lp

[1] 1] https://saharareporters.com/2020/11/08/ex-nigerian-attorney-general-aondoakaa-lies-about-being-contracted-cbn-secure-court-order visited on 8th November, 2020

[2] https://www.thecable.ng/report-fg-freezes-bank-accounts-of-endsars-promoters visited on 9th November, 2020

[3] N.A.A. v. Orjiakor [1998] 6 NWLR (Part 553) pg 265 @P. 281, paras. B-C.

[4] Order 26 Rule 6 (i) (2)of the Federal High Court Civil Procedure Rules, 2019

[5] UTA French Airlines v. Williams [2000] 14 NWLR (Part 687) page 271

[6] Mbaba,J.C.A. in Ayoadev.SpringBankPlc (2014) 4 NWLR (Pt. 1396) 93

[7] MEGAWEALTH LTD VS SEC [2017]13NWLR (PART 1583), Per ABUBAKAR, J.C.A. at page 43, paras. F-H:

[8] Order 26 Rule 14 of the Federal High Court Civil Procedure Rules, 2019

[9] Order 56 of the Federal High Court Civil Procedure Rules, 2019

[10] SUNDAY EGUAMWENSE V. JAMES I. AMAGHIZEMWEN [1986] 5 NWLR (PT 41) PAGE 283

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