In a major legal reversal, the Court of Appeal in Lagos has overturned a 2013 ruling by the Federal High Court that had authorized Guaranty Trust Bank Plc (GTBank) to foreclose on a N30 billion, 44-room mansion in Ikoyi, Lagos, owned by Alhaji Agboola Abiola, son of the late business icon and politician, Chief M.K.O. Abiola.
A Certified True Copy of the judgment in Appeal No. CA/L/888/2014, obtained by The PUNCH, revealed that the appellate court found significant legal deficiencies in the tripartite mortgage agreement upon which GTBank had relied to secure the loan.
The judgment, delivered unanimously by Justice Paul Aimee Bassi, with Justices Polycarp Kwahar and Abdulaziz Anka concurring, held that the Federal High Court had failed to adequately consider substantial allegations of forgery and fraud presented by the appellants.
The case arose from a June 20, 2014 decision in favor of GTBank, following a motion filed on April 8, 2014. The appellants, represented by Senior Advocate of Nigeria Dr. Charles Adeogun-Phillips, contested the ruling on four grounds in their notice of appeal.
Central to the appeal was whether GTBank was legally entitled to amend its affidavit after the matter had been adjourned for judgment, whether the reliefs granted by the trial court were justifiable, and whether a valid mortgage existed to support the bank’s appointment of a receiver over the Ikoyi property.
Justice Bassi ruled that the mortgage instrument cited by GTBank was “fundamentally defective” and could not form the legal basis for foreclosure.
While the first appellant, RCN Networks Ltd, admitted to executing the deed, Agboola Abiola, the second appellant, denied ever signing the mortgage document. He alleged that the signature page bearing his name had been fraudulently extracted from an entirely different document and inserted into the mortgage agreement.
The appellants also accused GTBank of unlawfully consolidating two distinct loan agreements—one for N508 million and another for N1 billion—without proper consent. They further claimed that, after the pledged shares under the N508 million loan were liquidated, GTBank attempted to use the same execution page to enforce the separate N1 billion loan.
Though police investigations into the matter were inconclusive—one report recommending arbitration and another dismissing the forgery claims—the appellate court emphasized that these reports failed to resolve the serious doubts raised over the document’s authenticity.
Justice Bassi highlighted discrepancies in the pagination of the documents presented. While the core pages of the deed were numbered “2 of 9” to “9 of 9,” the execution page was labeled “11 of 17,” strongly suggesting that it originated from a different document altogether.
He faulted the lower court for disregarding these anomalies and concentrating solely on the interpretation of Clause 6 of the deed. The Court of Appeal maintained that a document of disputed authenticity cannot be relied upon to adjudicate legal rights and obligations.
“The lower court erred by ruling on a document whose authenticity was seriously in question. This appeal succeeds.
The judgment of the lower court dated June 20, 2014, is hereby set aside. Parties shall bear their respective costs.”
The ruling marks a significant victory for the Abiola family and a notable legal setback for GTBank in its high-profile foreclosure efforts.
