Court gives Wema bank 60 days ultimatum to render account of receivership on hotel

Ogunsakin Mustapha
7 Min Read

A Federal High Court in Lagos has given Wema Bank 60 days to render an account of the receivership of the assets, and equipment of Mariana Suits and Hotels located at 40c, Mariana Close, Alexander Street, Abule-Egba, Lagos, eight years after the bank took control of the hotel.

Justice Akintayo Aluko gave the order in a ruling he delivered on February 7, 2023, sequel to an application brought before the court by the hotel and its Managing Director, Otunba Olugbenga Akadiri seeking the following reliefs from the court:

  • An order declaring that the order of the Honourable court dated May 19, 2015 no longer subsists consequent upon the order of the court dated March 13,2019.
  • An order mandating the plaintiff and the receiver/manager appointed by the plaintiff to render account of his receivership of the asset and equipment of the Defendants/Applicants located and situated at No 40c Mariana Close, off Alexandra Street, Abule Egba, Lagos which has been in their exclusive possession and management from May 19,2015 till date;
  • An order directing the audit of the book of accounts of Andy Akporugo the receiver/manager of the plaintiff/respondent in respect of all property of the defendants placed under his management and receivership by virtue of the order of the honourable court dated May 19, 2015;
  • An order of the honourable court mandating the plaintiff and the receiver/manager appointed by the plaintiff to immediately deliver up unrestricted possession and management of all the assets of the defendants hitherto in the custody/possession, and management of the plaintiff and the receiver/manager appointed by the plaintiff pending the determination of the substantive writ of summons filed by the plaintiff in this suit

In a four paragraph affidavit sworn to by Hakeem Agbalaya, the litigation officer in the chambers of Ishola Agboola, lawyer to the defendants, they narrated how by virtue of an order of court dated June 12, 2014, the bank appointed a lawyer, Mr Andy Akporugo jnr to act as receiver/manager over Mariana Hotels. 

According to the application, since Mr Akporugo had held forth, the hotel had not been in operation for eight years, creating a massive loss of revenue and severe devaluation of the properties and assets of the defendants. “The assets of the defendants in the property were defaced, damaged  and stolen under mismanagement of the plaintiff. It got to a point that some vandals were caught stealing parts of the assets and were charged before an Ogba Chief Magistrate Court”.

The defendants  believed that the systematic  destruction and stealing of the properties is a deliberate ploy by Wema bank to reduce the value of the defendants. 

Prior to the takeover, the management of the hotel through their auditors had prepared their audited accounts and cash flow statement covering 2013-2015  in a bid to show the bank the earnings of the hotel. “From the book of accounts, it showed that the hotel was earning an income of one million monthly”, the defendants averred. They therefore urged the court to order the plaintiff to give account of its eight years management of the hotel and also order the bank to hand over back to the original owner.

The plaintiff’s lawyer, Jude Uwahalam made his submissions on points of law that the fact that a matter is struck out  does not terminate the life of the case.

Justice Aluko agreed with him that the matter was still on. “Contrary to the contention of the defendants that the court by its order of March 13, 2019 struck out the originating summons for lacking in competence, the correct position is that the court did not strike out the said originating summons. Rather, it converted the same into a statement of claim where parties were ordered to file their pleadings which both parties have complied with by filing their statement of claim and statement of defence respectively “, Justice Aluko said.

The trial judge however at the same time held the bank accountable for all the properties and assets of the defendants that are in the care of the receiver/manager it appointed.

The court noted the allegations in the affidavit in support of the defendants that the receiver/manager locked up the property, assets  and hotel business of the defendants since 2015 thereby causing massive loss of revenue and devaluation of the assets and properties in order to reduce their value, and failure of the receiver/ manager to render accounts or permitted their books to be audited. The court also noted that the plaintiff neither denied nor controverted ” those weighty and specific allegations of fact”.

Justice Aluko then said: “It is explicit by statutory stipulations that a receiver/manager stands in a fiduciary relationship to the company and shall observe the utmost good faith towards it in any transaction with the company or on its behalf. His duties  as a receiver/manager  include acting in the best interest of the company so as to preserve its assets, further its business and promote the purpose for which it was formed and in such a manner as a faithfully, careful, and ordinarily skillful manager would act in the circumstances”.

He thereafter ordered the bank render the accounts of its receivership “within two months from the date of the order and the abstract of such accounts of receipts, and payments, accounts and verifying affidavits shall be delivered to the commission and laid before the court not later than 14 days of such compliance”, he concluded.

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