Court set aside sale of Lagos property by AMCON

Ogunsakin Mustapha
7 Min Read

A Federal High Court in Lagos has reversed the sale of a highbrow property in Victoria Island, Lagos sold by the Asset Management Corporation of Nigeria (AMCON) over a contested indebtedness of its deceased owner, late Col. Ekudayo Charlton Olajide and his company, Harod Expansion Industries (Nig.) Limited.

Justice Lewis-Allagoa on October 7, 2024 gave the order setting aside the sale of the property located at Plot 324A, Akin Ogunlewe Street, Victoria Island, Lagos State sequel to a counterclaim filed by Harod Expansion Industries (Nig.) Ltd against AMCON’s (the Plaintiff) purported claim of indebtedness of the defendants to the defunct Bank PhB(now Keystone Bank) to the tune of N617 million. Already, the second defendant, Col Olajide is deceased leaving only one defendant, Harod Expansion Industries (Nig.) Ltd.

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In the company’s defence and counterclaim filed by its lawyer, Benjamin Olayiwola Sadibo of George Ikoli & Okagbue law firm, the company contested the indebtedness claim of the Plaintiff, saying the alleged debt arose from frivolous charges. Besides, the lawyer argued that the sale is against a subsisting order of court which did not give AMCON power of sale but “possession and control” of the property pending the determination of the suit.

On August 9, 2018, AMCON had sought an order of court presided over by Justice Ibrahim Buba to take possession and control of the property for preservation pending the determination of the substantive suit. Justice Ibrahim Buba also made an order restraining the defendants from disposing of, or transferring the property pending the determination of the substantive suit.

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According to the amended statement of claim filed by the plaintiff’s lawyer, Olasubomi Adegbemisoye, the defendants took a N129 million loan facility from Bank PhB on September 2, 2009 at an interest rate of 22% per annum with 72 months tenure in addition to the earlier loans of N20 million obtained in January 2008, N60 million obtained in May 2008, and another N30 million obtained in August 2008. The loan was secured with the property in question. The loan was, however, subsequently sold to AMCON together with the property.

Upon takeover, AMCON by its statutory powers appointed a receiver to manage the property. AMCON stated that it took steps to reduce the indebtedness upon the institution of the suit and had consequently sold the property for N220 million and used the money to offset part of the indebtedness. The corporation however claimed that despite the sale, it is still indebted to the tune of N616.1m.

In their defence and counterclaim, the defendants’ lawyer stated that “contrary to the plaintiff’s averments, the sum of N129 million contained in the offer dated September 2, 2009 was the product of the consolidation and restructuring of what the bank computed to be outstanding on the facilities availed in January, May, and August of 2008, the repayment of which the bank had been deducting from the inception – from the first loan in January 2008”. According to the Defendants, “The bank was making regular deductions from the deceased’s account and that of the Defendant company even after the assignment of the alleged outstanding indebtedness to the plaintiff”.

The defendants’ lawyer averred further: ‘The offer letters used in conveying the loans stipulated that the facilities would be secured by a legal mortgage over the property. The Deed of Legal Mortgage over the property was however stamped to cover the sum of N2 million which has since been liquidated, and same was not unstamped”.

The defendant therefore denied owing the plaintiff saying “neither the deceased borrower, nor the defendant remained or remains indebted to the plaintiff in the stated sum or any sum whatsoever. The deceased borrower was no longer indebted to the bank or the plaintiff before his death and the defendant is not indebted to the plaintiff. The bank and the plaintiff imposed extraneous charges, entries and unagreed interest rates on the deceased borrower’s loan account which ended keeping the account in the negative”.

In the processes filed before the court, the Defendants’ lawyer expressed shock and sadness that the Plaintiff went ahead to sell the property despite a subsisting order given by the Court on August 9, 2018 granting only possession and control of the property to the Plaintiff pending the determination of the main suit. “The deceased borrower and members of his family were forcefully ejected from the property on January 21, 2020 during the pendency of the suit”, the lawyer stated. The lawyer further argued that the court’s order which is still subsisting did not grant the plaintiff the power to sell the property but to preserve same.

The lawyers urged the court to set aside the sale of the property; and a  prayer that Justice Lewis -Allagoa granted by setting aside the sale of the property by AMCON; and subsequently adjourned the substantive matter for further hearing.

AMCON lawyers filed an application urging the court to set aside the order by filling a notice of appeal against the ruling of court. The trial judge however overrule the application, saying that the appeal cannot act as stay of the court’s order. Justice Lewis -Allagoa thereafter adjourned the case till April 8, 2025 for judgement.

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