The Court of Appeal in Lagos has nullified a 2013 ruling by the Federal High Court that permitted Guaranty Trust Bank (GT bank) Plc to foreclose on a 44-room mansion in Ikoyi, Lagos, reportedly worth ₦30 billion and belonging to Alhaji Agboola Abiola, son of the late business tycoon 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 fundamental flaws in the tripartite legal mortgage used by GTBank to back the loan.
Delivering the unanimous verdict, Justice Paul Aimee Bassi, joined by Justices Polycarp Kwahar and Abdulaziz Anka, ruled that the trial court failed to adequately examine the serious allegations of forgery and fraud raised by the appellants.
The appeal was filed in response to a June 20, 2014 judgment by the Federal High Court, which granted reliefs in a motion GTBank filed on April 8, 2014. Dissatisfied, the appellants, through their counsel Dr. Charles Adeogun-Phillips (SAN), filed a four-ground notice of appeal.
Key issues raised included:
1. Whether GTBank was permitted to amend its affidavit after the matter had been adjourned for judgment.
2. Whether the Federal High Court correctly granted GTBank’s reliefs.
3. Whether a valid mortgage existed to justify the appointment of a receiver over the disputed Ikoyi mansion.
In the lead judgment, Justice Bassi held that the mortgage document GTBank relied upon was “fundamentally flawed” and therefore incapable of supporting any foreclosure action.
While the first appellant, RCN Networks Ltd, admitted to executing the mortgage deed, the second appellant, Agboola Abiola, denied signing the document.
He alleged that the execution page bearing his signature was fraudulently taken from a different document and inserted into the mortgage deed.
The appellants also accused GTBank of consolidating two separate loans—₦508 million and ₦1 billion—without their consent.
They claimed the bank liquidated shares pledged as collateral for the ₦508 million loan, then tried to use the same execution page to enforce the second, ₦1 billion loan.
Although police investigations into the forgery allegations were inconclusive, with one report recommending arbitration and another dismissing the allegations, the appellate court held that the inconsistencies raised serious concerns that could not be brushed aside.
Justice Bassi specifically noted irregularities in the pagination of the mortgage deed, pointing out that while the main body was numbered from “2 of 9” to “9 of 9,” the execution page bore the mark “11 of 17,” suggesting it may have originated from a completely different document.
Criticising the Federal High Court’s handling of the case, he said it erred by ignoring these inconsistencies and focusing solely on interpreting Clause 6 of the deed.
“The lower court erred by ruling on a document whose authenticity was seriously in question. This appeal succeeds,” Justice Bassi declared.
He concluded by setting aside the lower court’s judgment: “The judgment of the lower court dated June 20, 2014, is hereby set aside. Parties shall bear their respective costs.”
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