Corporate entities and Statute of Limitation law during COVID-19

By Opatola Victor Esq. 

Introduction:

The world is currently battling with widespread incidence of Covid-19. Nigeria has also not been spared from being affected by the pandemic. In the case of C.B.N. V. HARRIS (2017) 11 NWLR (PT. 1575) 54 AT 78-79 PARAS H-A, the court held thus: “Limitation Act or Law removes the right of action of a plaintiff, his right  of judicial enforcement and right of judicial relief leaving the plaintiff with a bare and empty cause of action which he cannot enforce if such a cause of action is found to be statute barred.”

Statute of limitation provides stipulated time to bring an action. Statutes are laws whereas, limitation is stipulated time. This simply means bringing actions within a stipulated time provided by law. The implication is that it prevents the court from exercising jurisdiction in an action with statute of limitation, on the basis that a person’s claim is statute barred.

Legal analysis

The continued escalation of Corvid-19 pandemic has necessitated the need to analyse the effect on the right of corporate entities and individuals to sue or enforce their legal right; bearing in mind that the Chief Justice of Nigeria directed that all courts in Nigeria be shut down commencing from 25th of March of 2020. A further directive was issued from the office of the Chief Justice of Nigeria stating as follows:

“Further to my earlier circular Ref. No. NJC/CIR/HOC/II/629 dated 20th March 2020, on the above subject matter. In view of the reality of the COVID-19 in the country and in order to take further preventive steps, all heads of courts are, from tomorrow, the 24th day of March 2020, directed to suspend court sittings for an initial period of two weeks at the first instance, except in matters that are urgent, essential or time bound according to our extant laws.”

As preventive and containment measures, the Federal Government and some state governments have issued various lockdown directives pursuant to extant laws.

All these, have in effect, led to the paralysis of the court system to operate effectively. This paralysis has considerable effect on the legal right of individuals and corporate bodies to sue, especially as it affects the limitation laws and the powers of individuals to sue within the period stipulated by law.

Where a statute prescribes a time-bar for the commencement of an action, and an aggrieved person exhibits tardiness by suing outside the statutorily allowed time-bracket, his action is usually declared as statute-barred. Thus, an action is statute-barred when no proceedings can be brought to court because the period laid down by the limitation law has expired by passage of time. A limitation law is a shield or defence that operates at the instance of the defendant.

In the case of ADETULA V. AKINYOSOYE (2017) 16 NWLR (PT. 1592) 492 AT 520 PARAS G-H, the court held thus: “An action challenged on the ground of Limitation Law is to effect a challenge to jurisdiction and this may be raised without leave even though it is a new issue of law that may not have been raised and determined at the trial court.” Limitation law removes the right of action of the plaintiff, although, the plaintiff may still have a cause of action. The moment the period of limitation for the commencement of an action expires, the right to employ or use the judicial process of a court of law for the enforcement of a right of action, automatically lapses by operation of the relevant Limitation Law. In that circumstance, no court has the jurisdiction to entertain the action. In the case of C.B.N. V. HARRIS (2017) 11 NWLR (PT. 1575) 54 AT 78-79 PARAS H-A, the Court held thus: “Limitation Act or Law removes the right of action of a plaintiff, his right  of judicial enforcement and right of judicial relief leaving the plaintiff with a bare and empty cause of action which he cannot enforce if such a cause of action is found to be statute barred.”

In the case of OKAFOR V. B.D.U., JOS BRANCH (2017) 5 NWLR (PT 1559) 385 AT 417 PARAS F-G, the Supreme Court held thus; “in calculating the limitation period, time begins to run when there is in  existence a person who can sue and another who can be sued, and when  all the facts have happened which are material to be proved to entitle the  plaintiff to succeed.” Also, the orthodox judicial formula of measuring Limitation Laws is simple. A court of law is enjoined to examine the filed writ of summons and the statement of claim of which will showcase when the cause of action arose with the period stipulated in the limitation statute within which to sue. Limitation laws are procedural and strict liability laws that when the period of limitation begins to run in respect of a cause of action, it cannot generally be broken and it does not cease to run merely because the parties are engaged in negotiation. Although, the law does not prohibit parties to a dispute from engaging in negotiation for the purpose of settling their disputes, however, such negotiation by parties cannot prevent or stop the period of limitation stipulated by statute from running. Therefore, the best course for a person to whom a right of action has accrued is to institute an action against the other party so as to protect his interest or right, in case negotiation fails.

Is Pandemic an equitable ground against the application of Statute of Limitaion?

The laws of Statute of Limitation are strict and straight forward, so much that where the limitation of time is imposed by statute, the courts are estopped from extending the time unless that same law makes provision for extension of time.

Notwithstanding the strict application of limitation laws, the Law of Limitation of action recognizes exceptions. The exceptions to limitation of actions are:

1. Where there has been a continuance of damages, a fresh cause of action arises from time to time, as often as damage is caused.

2. Where a person is charged before a court over a matter touching on Limitation Law, the period is not calculated until the court delivers its decisions.

3. For Public Officers, as soon as a public officer goes outside the scope of authority in the performance of his official duties, an action brought against him in that regard will not be determined by Statute of Limitation

4. Disabilities such as mental incapacity, infancy, confinement or incarceration

5. Where a party stays abroad.

6. Where the wrongful act of the defendant is fraudulently concealed.

7. Cases involving personal injury or death.

8. Where an action is struck out by the court and re-listed.

9. Where there is acknowledgment and part-payment of debts

None of these exceptions covers instance of a Pandemic as it is obtainable today.

Powers of the National Assembly:

In tandem with the powers of the National Assembly under Section 4 of the 1999 Constitution, the Legislature can make laws suspending the application of Statute of Limitation in this period of widespread pandemic. This is in strong consideration of rights and obligations of individuals and corporate bodies; as it can affect millions and billions of Naira and investors’ confidence in Nigeria.

Summary

This legal analysis is designed as a wake-up call on the Nigeria National Assembly and other State Houses of Assembly to rise to the Covid-19 challenge to the law and enact into law the suspension of the application of the law on Statute of Limitation. This is due to the fact that interpretation of Statute of Limitation is strict that, even at equity, the ground of Covid-19 pandemic is not a ground to aid a litigant who ought to sue to enforce his rights but couldn’t due to shut down of the judicial arm of government and various lockdown laws imposed by various state governments.

Conclusion

We vehemently call on our various legislators at both state and national levels to consider the effect of inability of individuals and corporate entities to approach the court in this time of widespread pandemic and the burden that is, therefore, imposed by the statute of limitation under the present state of pandemic.