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Applicability of the Consent Requirement of the Nigerian Land Use Act to the Asset Management Corporation of Nigeria Act
Published online by Cambridge University Press: 04 March 2016
Abstract
The Nigerian Land Use Act (LUA), which governs contemporary Nigerian land law, provides that any disposition of land must have the prior consent of the appropriate authority under the LUA. However, the Assets Management Corporation of Nigeria Act, which regulates the disposition of eligible bank assets, contains provisions that imply that the requisite consent under the LUA is not required for the disposition of an eligible bank asset consisting of land. This article interrogates the propriety of the provisions of the Assets Management Corporation of Nigeria Act in this regard and argues that, in view of the fact that the LUA is a statute with constitutional flavour by virtue of its entrenchment in the Nigerian Constitution, the LUA's provisions supersede the provisions of any conflicting law.
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- Copyright © SOAS, University of London 2016
References
1 There are 36 states in the Federal Republic of Nigeria.
2 See sec 1 of the Land Use Act, cap L5, Laws of the Federation of Nigeria 2004 (LUA).
3 For instance, there are questions as to whether or not the LUA nationalizes land. See Omotola, JA “Does the Land Use Act expropriate?” (1985) 3 Journal of Private and Property Law 1Google Scholar; RW James Nigerian Land Use Act: Policy and Principles (1987, University of Ife Press) at 33; Umezulike, IA “Does the Land Use Act expropriate? Another view” (1986) 5 Journal of Private and Property Law 61Google Scholar; Fekumo, F “Does the Land Use Act expropriate? A rejoinder” (1988/89) 10–11 Journal of Private and Property Law 5Google Scholar; IO Smith Practical Approach to Law of Real Property in Nigeria (2nd ed, 2007, Ecowatch Publications Ltd) at 475. As to whether the LUA is superior to the constitution, see Adeoye, FO “The Land Use Act 1978 and the 1979 Constitution: The question of supremacy” (1988/89) 10–11 Journal of Private and Property Law 33Google Scholar; A Kalu “The Land Use Act and 1979 Constitution” in JA Omotola (ed) Essays in Honour of Judge TO Elias (1987, University of Lagos Press) 106; Osipitan, T “The Land Use Act and the 1979 Constitution: Conflicts and resolutions” (1991) 2/3Justice 59Google Scholar; Nwatu, SI “Resolving the conflicts between the Land Use Act and the constitution: The role of legislative history” (1998–99) 7 The Nigerian Juridical Review 173Google Scholar. On the potency of the certificate of occupancy, see JA Omotola Essays on the Land Use Act 1978 (1984, Lagos University Press) 42; IO Smith “The certificate of occupancy: Nature and value” in IO Smith (ed) The Land Use Act: Twenty Five Years After (2003, Faculty of Law, University of Lagos) 170. On the nature of the right of occupancy, see FO Adeoye “The nature of right of occupancy under the Land Use Act, 1978” in JA Omotola (ed) Issues in Nigerian Law (1999, University of Lagos Press) 105; Umezulike, IA “Leases and sub-leases under the Land Use Act: Existing or extinguished” (1993) 3/4Justice 29Google Scholar. On the extent of the governor's power to give consent to alienations of rights of occupancy or to revoke a right of occupancy, see AB Kasunmu “The question of consent to alienation: Effect on development” in JA Omotola (ed) The Land Use Act: Report of a National Workshop (1982, Lagos University Press) 93; Sholanke, OO “When a revocation is not a revocation under the Nigerian Land Use Act” (1990) 1/8Justice 75Google Scholar; Umezulike, IA “When a revocation is not a revocation under the Land Use Act: A rejoinder” (1991) 2/9Justice 63Google Scholar.
4 Before the commencement of the LUA, an owner of land in the southern part of Nigeria could alienate land without requiring government consent. The southern part of Nigeria refers to the states of Abia, Akwa Ibom, Anambra, Bayelsa, Cross River, Delta, Ebonyi, Edo, Ekiti, Enugu, Imo, Lagos, Ogun, Ondo, Osun, Oyo and Rivers. The only instance where consent was required was in the case of alienation to an alien. See, for instance, sec 4 of the Acquisition of Land by Aliens Law, cap 2, Laws of Eastern Nigeria, 1963.
5 The Asset Management Corporation of Nigeria Act, No 4 of 2010 was signed into law on 19 July 2010. It has now been amended by the Asset Management Corporation of Nigeria (Amendment) Act, No 4 of 2015, which was signed into law on 26 May 2015.
6 See the long title and secs 1–4 of the AMCON Act.
7 See LUA, secs 5 and 6 respectively.
8 There are 774 local government authorities in Nigeria.
9 See LUA, sec 3.
10 Id, secs 34(2) and 36(2).
11 For ease of reference the three sections are reproduced here: “21. It shall not be lawful for any customary right of occupancy or any part thereof to be alienated by assignment, mortgage, transfer of possession, sublease or otherwise howsoever - (a) without the consent of the Governor in cases where the property is to be sold by or under the order of any court under the provisions of the applicable Sheriffs and Civil Process Law; or (b) in other cases without the approval of the appropriate Local Government.” “22. It shall not be lawful for the holder of a statutory right of occupancy granted by the Governor to alienate his right of occupancy or any part thereof by assignment, mortgage, transfer of possession, sublease or otherwise howsoever without the consent of the Governor first had and obtained: (1) Provided that the consent of the Governor - (a) shall not be required to the creation of a legal mortgage over a statutory right of occupancy in favour of a person in whose favour an equitable mortgage over the right of occupancy has already been created with the consent of the Governor: (b) shall not be required to the reconveyance or release by a mortgage [sic] to a holder or occupier of a statutory right of occupancy which that holder or occupier has mortgaged and that mortgage with the consent of the Governor: (c) to the renewal of a sub-lease shall not be presumed by reason only of his having consented to the grant of a sub-lease containing an option to renew the same. (2) The Governor when giving his consent to an assignment mortgage or sub-lease may require the holder of a statutory right of occupancy to submit an instrument executed in evidence of the assignment, mortgage or sub-lease and the holder shall when so required deliver the said instrument to the Governor in order that the consent given by the Governor under subsection (1) may be signified by endorsement thereon.” “23. (1) A sub-lease of a statutory right of occupancy may with the prior consent of the Governor and with the approval of the holder of the statutory right of occupancy, demise by way of sub-underlease to another person the land comprised in the sub-lease held by him or any portion of the land. (2) The provisions of subsection (2) of section 22 shall apply mutatis mutandis to any transaction effected under subsection (1) of this section as if it were a sub-lease granted under section 22.”
12 See LUA, sec 22(1)(a) and (b).
13 See Okuneye v First Bank of Nigeria Plc [1996] 6 NWLR (pt 475). Compare with Ezejiofor, G “The consent requirement of the Nigerian Land Use Act” (1998) 40/1Journal of African Law 101Google Scholar at 109.
14 IA Umezulike ABC of Contemporary Land Law in Nigeria (2013, Snaap Press Nigeria Ltd) at 188.
15 See Savannah Bank Ltd and Another v Ammel Ajilo [1989] 1 NWLR (pt 97) 305. It was earlier touted that deemed grant holders of a right of occupancy are exempted from the consent provisions. See BO Nwabueze “The Land Use Decree and bank securities” (paper delivered at a workshop organized by the Nigerian Institute of Bankers in Lagos, Nigeria, 23 June 1978); see also Omotola Essays on the Land Use Act, above at note 3 at 27–28.
16 See International Textile Industries (Nigeria) Ltd v Aderemi [1999] 8 NWLR (pt 614) 268 and Awojugbagbe Light Industries Ltd v Chinukwe [1995] 4 NWLR (pt 390) 379.
17 [2008] 6 NWLR (pt 1083) 362. This view had earlier been seriously canvassed in Umezulike, IA “The heady question of execution of mortgage deed before consent: Awojugbagbe Light Industries Ltd v PN Chinukwe, evaluated” (1993) 4/3Justice 69Google Scholar.
18 Omotola, JA “Effects of the governor's consent subsequent to execution of mortgage” (1992–93) 16–18 Journal of Private and Property Law 73Google Scholar at 77.
19 See Nwatu, SI “The right to a fair hearing under the Land Use Act, 1978” (2000–01) 8 The Nigerian Juridical Review 196Google Scholar at 209.
20 See ADH Ltd v Minister for Federal Capital Territory [2013] 8 NWLR (pt 1357) 493.
21 LUA, sec 26.
22 Id, sec 28(2).
23 The banks that survived the consolidation exercise are Access Bank, Afribank, Diamond Bank, EcoBank, Equitorial Trust Bank, Fidelity Bank, First Bank Plc, First City Monument Bank, First Inland Bank, Guaranty Trust Bank, IBTC-Chartered Bank, Intercontinental Bank, Nigeria International Bank, Oceanic Bank, Platinum Bank, Skye Bank, Spring Bank, Stanbic Bank, Standard Chartered Bank, Sterling Bank, Union Bank, United Bank of Africa, Unity Bank, Wema Bank and Zenith Bank Plc.
24 L Sanusi “Growth prospects for the Nigerian economy” (26 November 2010), available at: <http://www.bis.org/review/r101210e.pdf> (last accessed 17 January 2016).
25 The nine banks are Afribank Plc, Bank PHB Plc, Finbank PLC, Intercontinental Bank Plc, Oceanic Bank Plc, Union Bank Plc, Spring Bank Plc, Wema Bank Plc and Equitorial Trust Bank Ltd (a privately owned bank).
26 The establishment of an asset management corporation was part of the reform agenda of the former CBN governor, Charles Soludo, on whose watch the consolidation exercise in the banking sector was consummated, but for apparently inexplicable reasons was not pursued. Two possible explanations are that the CBN leadership was still basking in the euphoria of a successful consolidation exercise and, more importantly, the ominous signs of the strains and stresses in the financial sector were thought to be more apparent than real.
27 Indeed, during a week long (22–26 March 2010) study tour of Malaysian financial institutions by the CBN board of directors, the CBN and Bank Negara (the Malaysian central bank) signed a memorandum of understanding to share expertise and exchange relevant information in the discharge of their core mandates. A CBN statement noted: “The study tour enabled the team to understudy the success of the Malaysian regulator in the area of financial crisis management which has direct contextual relevance to the Nigerian situation.” The statement further noted that “Malaysia is a developing country that has achieved widely acknowledged economic success and the Bank Negara has had an effective financial stability framework since the Asian financial crisis in the 1990s. The banking and financial reforms the country undertook successfully, provide a benchmark for the current banking reforms of the CBN.” See “CBN signs strategic partnership memorandum of understanding with Malaysian Central Bank” (31 March 2010) Economic Confidential, available at: <http://economicconfidential.com.ng/2010/03/cbn-signs-strategic-partnership-with-malaysian-central-bank/> (last accessed 18 January 2016).
28 AMCON Act, sec 4. For a vivid discussion of AMCON's objects, see Nwosu, E and Shekwogaza, A “A legal interpretation of the Asset Management Corporation of Nigeria” (2014) 29/4Journal of International Banking Law and Regulation 239Google Scholar.
29 Id, sec 5.
30 Id, sec 24.
31 Id, sec 25(1).
32 Id, sec 25(2).
33 Id, sec 30.
34 Id, sec 32.
35 The entrenchment of the LUA and other statutes enumerated in sec 274(5) of the 1979 Constitution (now sec 315(5) of the 1999 Constitution) is one of the major reasons which has impelled the protagonists of constitutional autochthony to deny that constitution the garb of an autochthonous constitution. They argue inter alia that, because the subsection was neither adumbrated nor inserted by the Constituent Assembly or the Constitution Drafting Committee that debated and drafted the constitution, respectively, the military government's unilateral and arbitrary insertion of the subsection deprived the constitution of the character which would qualify it as an act of the people of Nigeria. See A Ojo Constitutional Law and Military Rule in Nigeria (1987, Evans Brothers Publishers) at 77–78. For discussions on the constitutional autochthony debate, see BO Nwabueze The Presidential Constitution of Nigeria (1982, C Hurst and Co) at 2–7; and KM Mowoe Constitutional Law in Nigeria (2008, Malthouse Publishers Ltd) at 11–12.
36 Emphasis added.
37 The 1999 Constitution is essentially a rigid constitution. Sec 9(2) provides that a proposal for a constitutional amendment must be supported by two-thirds of all the members of each house of the National Assembly (ie the Senate and the House of Representatives) and approved by a resolution of both houses by no fewer than two-thirds of the 36 states of the Federation of Nigeria. For a discussion of the procedure for amending the 1999 Constitution, see DIO Ewelukwa “The amending process under the 1999 Constitution” in IA Ayua, DA Guobadia et al (eds) Nigeria: Issues in the 1999 Constitution (2000, Institute of Advanced Legal Studies) 324.
38 Sec 47 provides: “(1) This Act shall have effect notwithstanding any thing to the contrary in any law or rule of law including the Constitution of the Federation or of a State and, without prejudice to the generality of the foregoing, no court shall have jurisdiction to inquire into: (a) any question concerning or pertaining to the vesting of all land in the Governor in accordance with the provisions of this Act; or (b) any question concerning or pertaining to the right of the Governor to grant a statutory right of occupancy in accordance with the provisions of this Act; or (c) any question concerning or pertaining to the right of a Local Government to grant a customary right of occupancy under this Act. (2) No court shall have jurisdiction to inquire into any question concerning or pertaining to the amount or adequacy of any compensation paid or to be paid under this Act.”
39 Nwatu “Resolving the conflicts”, above at note 3 at 188.
40 The LUA overturned pre-existing landholding structures and scuttled their feudal inclinations. Naturally, such a revolutionary piece of land reform legislation was resented by the land owning class. This explains the hostilities which greeted the enactment of the act and deafening calls for its repeal. The military regime that enacted the LUA less than 18 months before handing over the reins of power speculated that, because of the revolutionary nature of the act, it would be repealed once a democratic regime was in place. In order to ensure the survival of the revolutionary but embattled legislation, the military regime in its wisdom incorporated the LUA into the constitution so as to make its amendment or repeal difficult.
41 (1984) 1 SCNLR 634.
42 The LUA was enacted in 1978 by a military regime as the Land Use Decree but, with the return to constitutional democracy on 1 October 1979, it became an issue whether civilian governors could exercise powers reserved for military governors under the decree.
43 The decision in Nkwocha has been followed in Kanada v Governor of Kaduna State [1986] 4 NWLR (pt 35) 377 and Lemboye v Ogunsiji [1990] 6 NWLR (pt 155) 210.
44 See Smith Practical Approach, above at note 3 at 473; AO Bello “Constitutional entrenchment of the Land Use Act: An argument for excision” in Smith (ed) The Land Use Act, above at note 3, 1; CO Adekoya “Land Use Act and constitutional matters arising” in Smith (ed), id, 19. This view also holds that, since the LUA is not an integral part of the constitution, where any provision of the LUA is inconsistent with the provisions of the constitution, such provisions of the LUA shall be null and void to the extent of the inconsistency. However, Osipitan argues that, where the constitution recognizes the validity of an existing law, the existing law cannot be declared void if its provisions conflict with those of the constitution. He insists “that the provisions of section 274(5) of the [Act] [sic] Constitution, to the effect that ‘nothing in this Constitution shall invalidate’ the Act, has the added advantage of preserving the validity of the provisions of the Act, even where they conflict with the constitutional provisions”. See T Osipitan “Public law and the Land Use Act 1978” in Omotola (ed) Issues in Nigerian Law, above at note 3, 84 at 90.
45 Nkwocha, above at note 41 at 652. The case was decided under the 1979 Constitution. Sec 274(5) of the 1979 Constitution is the same as sec 315(5) of the 1999 Constitution.
46 Ezejiofor, G and Okafor, I “Jurisdiction to entertain judicial proceedings under the Land Use Act” (1994–97) 6 The Nigerian Juridical Review 21Google Scholar at 30.
47 Ibid.
48 This view was ventilated by Oluwa J in Attorney General of Lagos State v National Electric Power Authority, suit no LD/372/81, judgment delivered on 5 July 1982, High Court of Lagos.
49 BO Nwabueze Federalism in Nigeria under the Presidential Constitution (1983, Sweet and Maxwell) at 156.
50 Id at 179 (emphasis original).
51 LUA, secs 21 and 22 (emphasis added).
52 AMCON Act, sec 25.
53 Id, sec 34(1).
54 Ibid.
55 Where the phrase “subject to” is used in a statute, it subordinates the provisions of the subject section to the section or statute empowered by reference thereto and that is not intended to be diminished by the subject section. See Nigerian Deposit Insurance Corporation v Okem Enterprises Ltd [2004] 10 NWLR (pt 880) 107; Balonwu v Governor of Anambra State [2009] 18 NWLR (pt 1172) 13.
56 However, there is authority to the effect that an irrevocable power of attorney which is framed with wide powers to the donee as if it were a conveyance amounts to an attempt to circumvent the consent requirement, so requiring the consent of the appropriate authority for its validity. See Ejukorlem & Co Ltd v Chief Inspector of Mines (1957) NRNLR 200; Dickson v Solicitor General of Benue Plateau State (1974) 1 ANLR (pt 1) 276.
57 Applications for consent have been known to be delayed for up to two years or more.
58 Generally, most states assess consent fees ad valorem.
59 A power of attorney is not a document of title but only an instrument of an agency relationship.
60 For instance, on 18 February 2009, the Yar’ Adua administration sent a bill to be cited as the Land Use (Amendment) Act, 2009 or the Constitution (First Amendment) Act, 2009 to the National Assembly. The bill was specifically intended to extricate mortgage transactions and subleases from the consent provisions of the LUA. As at the time of writing, nothing has been heard about the bill. It seems that enthusiasm waned with the death of President Yar’ Adua.