Appeal Court dismisses EFCC’s plea to freeze Ozekhome’s account over professional fees paid by Fayose

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The Court of Appeal, Lagos Judicial Division has dismissed the interim ex-parte order granted to the Economic and Financial Crimes Commission (EFCC) to freeze Mike Ozekhome’s account over alleged N75m transferred to the account by the former Governor of Ekiti State, Mr Ayodele Fayose.

The EFCC had obtained the interim ex-parte order of forfeiture to freeze the money for 120 days, arguing that the N75m transferred to the account proceeded of unlawful activity because it was paid to Ozekhome by the then sitting Governor of Ekiti State, Mr Ayodele Fayose, whom it said it was investigating.

The Court of Appeal in dismissing the appeal brought by the EFCC ( FRN), held that the EFCC had wrongfully obtained the ex parte order to freeze the account as the lower court lacked the jurisdiction to grant same and as the defendant could not have committed any infraction to warrant his account being blocked and frozen.

The court after hearing arguments from U. U. Buhari for the Appellant (FRN) and Ejieke Onuoha (for Ozekhome), held that there was uncontradicted evidence shown in invoices and receipts issued by Ozekhome to Fayose that the said sum represented part payment of his professional fees in the handling of various cases for Fayose across Nigeria.

It would be recalled that sometime in 2016, the EFCC had, through Justice I.B.M Idris, then of the Federal High Court, Lagos, frozen Governor Fayose ‘s accounts, accusing him of allegedly keeping proceed of unlawful activity.

Fayose immediately engaged Ozekhome’s legal services and he approached the Federal High Court, Ado Ekiti, presided over by Justice Taiwo Taiwo, and challenged the ex parte freezing order granted by Justice Idris.

In a judgement delivered by Hon Justice Taiwo Taiwo, the Judge had found that the freezing order had been improperly granted and without jurisdiction in the first place, and upon suppression of material facts.

Fayose after the judgement went to his bank and withdrew N5 million from his defrozen account for himself, while transferring 75m to Ozekhome, as part of the payment of his professional fees.

The EFCC, though appealed this judgement, still went ahead and froze Ozekhome’s account, contending that the 75m paid to his chambers by Fayose as professional fees for legal services rendered proceeded of unlawful activity.

Ozekhome filed a motion before the Federal High Court, Lagos, urging it to set aside its earlier order freezing his chambers’ account. He alleged misrepresentation, non-disclosure, suppression of material facts and non-compliance with the rules of the lower court and judicial authorities regulating the grant of ex parte applications by the Appellant.

Justice Anka after hearing arguments from Ozekhome and Mr Rotimi Oyedepo for the EFCC vacated the ex-parte order and defreezed his account with GTBank. It was this judgement that the EFCC appealed to the Court of Appeal.

In a unanimous judgement delivered by the presiding Judge, Hon Justice Chidi Nwaoma Uwa, with Justices Tunde Awotoye and James Abundaga, JJCA, (the other two members of the Panel), concurring, the Court of Appeal dismissed the appeal and found as of the fact that the bank account from which Fayose paid the fees was unencumbered as at the time he did having been defrozen by Justice Taiwo of the Federal High Court, Ado Ekiti.

The court found and held that the said order of Justice Taiwo which had vacated the order of Justice Idris (a court of equal and coordinate jurisdiction (as permitted by the Supreme Court under certain conditions), remained the extant law as it was still valid, subsisting and binding, having not been set aside by an appellate court or by the trial court itself.

The Court of Appeal also agreed with the lower court and held that from available evidence on record, the disputed amount having already been dissipated by the Respondent as at the time it was frozen by the lower court at the instance of the EFCC, the lower court did not have the requisite jurisdiction to have granted such freezing order in the first case.

The court also held that the said sum of 75m was lawful to proceed for legal services duly rendered to Fayose by Ozekhome, and not proceed of unlawful activity.

The Court of Appeal also agreed with the lower court, relying on the case of REGISTERED TRUSTEES OF THE NIGERIAN BAR ASSOCIATION V AG, FEDERATION & CBN (Suit No. FHC/CS/173/2015), decided in 2015, by the Hon Justice Gabriel Kolawaole (then of the Federal High Court, Abuja), and later upheld by the same Court of Appeal in appeal No. CA/A/202/2015 (CBN V REGISTERED TRUSTEES OF THE NBA), that Legal Practitioners are excluded and exempted from the definition of “DESIGNATED NON-FINANCIAL INSTITUTIONS”, as contained in section 25 of the MONEY LAUNDERING (PROHIBITION) ACT, 2011. The section had been declared invalid, null and void, being inconsistent with the overriding section 192 of the Evidence Act. The Court of Appeal held this remains the extant law.

The court also agreed with the finding of the lower court and held that the failure of the EFCC to give security or undertaking to pay damages as one of the conditions precedent to the grant of an interim injunction, as held by the Supreme Court in KOTOYE V CBN was fatal to its case. The court dismissed the Federal Government’s contention that it was not afforded a fair hearing before the lower court vacated its freezing order.

The Court of Appeal held that it was rather the Respondent (Ozekhome) that was denied a fair hearing before the order affecting him was made ex parte. Consequently, the Respondent was perfectly entitled to have the order reviewed by the trial court before the expiration of its life span of 120 days, by putting forward his uncontradicted facts and exhibits, as he did.

The court further held that an ex parte order is expected to be short as an interim measure and that the lower court was right to have discharged the order it earlier made before its lifespan of 120 days, having found that it had been misled in granting the same, based on suppression of material facts by the EFCC.

On whether a legal practitioner is legally obliged to begin to ask a client for the very source of his money from which the client desired to pay lawyer, the court said there was no such requirement known to law.

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