A 2013 Federal High Court ruling that permitted Guaranty Trust Bank Plc to foreclose on a N30 billion, 44-room house in Ikoyi, Lagos, owned by Alhaji Agboola Abiola, son of the late business magnate and politician Chief M.K.O. Abiola, has been overruled by the Court of Appeal, Lagos Division.
The appeal court discovered serious irregularities in the execution of the tripartite legal mortgage that GTBank used to get the loan, according to a Certified True Copy of the decision in Appeal No. CA/L/888/2014 that The PUNCH was able to obtain.
The trial court erred in neglecting to adequately consider the substantial claims of fraud and forgery made by the appellants, according to the majority ruling, which was given by Justice Paul Aimee Bassi with concurring opinions from Justices Polycarp Kwahar and Abdulaziz Anka.
The appeal was based on a June 20, 2014, ruling by the Lagos Federal High Court that granted GTBank the reliefs it had requested in an April 8, 2014, motion.
The appellants, who were represented by Dr. Charles Adeogun-Phillips (SAN), filed a notice of appeal on four grounds because they were unhappy with the decision.
The court’s primary concerns were whether GTBank was entitled to regularize its affidavit following the adjournment of the case for judgment, whether the trial court properly granted the bank’s reliefs, and whether the bank’s appointment of a receiver over the Ikoyi property was supported by a valid legal mortgage.
Justice Bassi concluded in his lead opinion that the mortgage instrument the bank was relying on was essentially defective and unable to grant any foreclosure rights.
Agboola Abiola, the second appellant, denied signing the document, but RCN Networks Ltd., the first appellant, admitted to executing it.
He asserted that the execution sheet on which he signed had been forged and put into the mortgage deed from another document.
Additionally, the appellants accused GTBank of combining two different loans—one for N508 million and the other for N1 billion—without their permission.
They claimed that the bank had wrongly tried to enforce the N1 billion loan using the same execution page after liquidating the shares pledged as security under the N508 million loan.
In the meantime, police investigations produced conflicting findings.
One study rejected the claims of fabrication, while another suggested arbitration between the parties.
However, the appellate court ruled that these reports were insufficient to dispel any remaining skepticism regarding the document’s legitimacy.
Justice Bassi pointed up a number of errors in the deed’s pagination.
The execution page has the notation “11 of 17,” suggesting that it was most likely taken from a completely other document, while the major pages were numbered from “2 of 9” to “9 of 9.”
He attacked the trial court for ignoring these irregularities and concentrating only on how to interpret Clause 6 of the mortgage deed.
The appeal court holds that a document whose veracity is contested cannot serve as the foundation for determining the rights and responsibilities of parties.
“The lower court erred by ruling on a document whose authenticity was seriously in doubt,” Justice Bassi ruled. This appeal is successful.
The lower court’s June 20, 2014, ruling is hereby overturned. Each party is responsible for paying their own expenses.
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