Why a ₦187 Million Claim Collapsed Twice Over: Binez Hotels Limited v. Bureau of Public Enterprises & Anor

Paid for the Shares, Never Got the Paperwork: Why a ₦187 Million Claim Collapsed Twice Over

Case: Binez Hotels Limited v. Bureau of Public Enterprises & Anor. [2026] 11 NWLR 209 (SC) Court: Supreme Court of Nigeria

Some cases fail on the facts. Others never even get to the facts, because something in the paperwork was wrong from the very beginning. This case managed both — a company chasing ₦187 million over a botched privatization deal lost on a procedural technicality so fundamental it never needed to reach the substance, and then lost on the substance anyway. It's a genuinely useful two-for-one lesson: one on how easily an appeal can collapse before it's even heard, and one on exactly what it takes to actually own shares in Nigeria.

A Privatization Deal That Never Quite Closed

Back in the early 2000s, Binez Hotels agreed to buy 13 million shares — a 10% stake — that the Federal Government held in Nigercem Plc, a cement company in Ebonyi State, for just over ₦7 million. The deal was arranged through an agent, Futureview Securities, and the sale had the blessing of the National Council on Privatization. Binez issued a cheque for the purchase price, and the Bureau of Public Enterprises (the government body handling the sale) confirmed the Council's approval.

But the actual paperwork that would have completed the transaction — the share transfer forms — never got executed. The National Council on Privatization, acting under its own governing law, cancelled the ongoing negotiations altogether. With the sale off, the Bureau eventually sold the same shares to the Ebonyi State Government instead, and returned Binez's cheque, uncashed, through its agent.

Binez wasn't willing to let it go. It sued at the Federal High Court, asking the court to declare that it was entitled to beneficial ownership of the shares — and, since they'd since been resold, to the full proceeds of that resale, which by the time of trial had ballooned to a claimed ₦187 million with interest.

Binez named three defendants in that original suit: the Bureau, the Nigerian Stock Exchange, and Futureview Securities (its own agent, oddly enough, but the shares were listed on the Exchange, so it was joined too). The Federal High Court wasn't persuaded by any of it and dismissed the claim outright. Binez appealed to the Court of Appeal, lost again, and pushed on to the Supreme Court.

A Problem Nobody Noticed Until It Was Almost Too Late

Here's where the case takes its first real turn. When Binez filed its notice of appeal at the Court of Appeal — and again when it appealed further to the Supreme Court — it quietly dropped the Nigerian Stock Exchange from the list of parties. No explanation was given. No formal application was made to the court to remove the Exchange as a party. It simply wasn't named anymore.

The Bureau of Public Enterprises picked up on this and raised a preliminary objection at the Supreme Court, arguing that this unilateral change made the entire appeal incompetent — and if the appeal to the Court of Appeal was incompetent from the start, then everything built on top of it, including the further appeal to the Supreme Court, was equally hollow.

The Court's Reasoning

Why a Preliminary Objection Has to Be Dealt With First

Before getting anywhere near the substance, the Court explained why a preliminary objection like this one takes priority over everything else. Its whole function is to act as a gatekeeper — resolving, up front, whether the court even has the legal footing to hear the case at all. Where a serious challenge is raised to whether an appeal is properly before the court, that question has to be settled before a single word is spent on the merits. If the objection succeeds, the appeal simply doesn't proceed — there's nothing left to decide, and pushing forward regardless would just waste everyone's time and the court's limited resources.

You Can't Quietly Drop a Party from an Appeal

This is the heart of the ruling, and the Court was unambiguous about it: whoever is suing and being sued has to be the same cast of characters from the moment a case starts at trial through to wherever it ends up on appeal. That doesn't mean it can never change — a party can be added or removed — but only with the court's permission, sought and granted through a proper application. What a litigant absolutely cannot do is simply decide, on their own initiative, that a party is no longer needed and leave them off the next filing.

The Court went further to explain why this rule has real teeth, not just formal ones. Once someone is properly made a party at trial, they remain a party through every stage that follows, whether or not they actively participated, until a court formally says otherwise. Their lack of participation at trial doesn't erase their standing — they were served, they had the opportunity to engage, and that status doesn't just evaporate because one side later decides it's inconvenient. Deciding who's actually necessary for an appeal is the court's call to make, not something a litigant gets to determine unilaterally on their own assessment of convenience.

Because Binez had done exactly that — quietly excising the Stock Exchange from its notice of appeal at the Court of Appeal without ever seeking leave — its notice of appeal there was fatally defective. And since a defective notice of appeal deprives the receiving court of jurisdiction from the outset, everything built on top of it fails too. A court that never had proper jurisdiction over an appeal can't pass that jurisdiction on to whichever court hears the next stage. The defect doesn't heal itself further up the chain — it just travels with the case.

A Failed Oral Application Doesn't Fix This Either

Binez had a fallback argument: it claimed it had actually asked the trial court, orally, to strike out the Exchange as a party, at the point when the parties were adopting their written addresses. The problem was evidentiary — nothing in the actual record of proceedings, the very documents Binez itself relied on to prosecute its appeal, showed any trace of that oral application ever being made. The Court was clear that removing a party isn't a casual, in-passing request — it's significant enough that it needs to be done formally, by a proper motion on notice, backed by an affidavit and a written address. An unrecorded, undocumented oral mention doesn't meet that bar, and without proof it happened at all, the argument went nowhere.

One Judge's View: The Notice of Appeal Is the Foundation of Everything

One of the concurring justices put the underlying point memorably: a notice of appeal isn't just a formality — it's the foundational document an entire appeal is built on, and a defect in it spreads through everything that follows. Once that foundational document is compromised, there's no salvaging what's built on top of it, no matter how strong the underlying arguments might otherwise have been.

Why the Court Still Looked at the Merits Anyway

Having already resolved the case on the preliminary objection alone — which technically meant there was nothing left to decide — the Court did something a little unusual: it went ahead and briefly addressed the substance anyway. Its reasoning was pragmatic rather than strictly legal. The case had been sitting in the system since 2003, through three levels of courts, and the Court felt that giving the parties a final, complete answer served the broader interest of justice more than leaving the substantive dispute technically unresolved. This wasn't a departure from the jurisdictional ruling — the appeal was still struck out — but a bonus for the parties' peace of mind.

There Was a Valid Contract — Just Not Completed Ownership

On the substance, the Court agreed the basic elements of a valid contract were present: an offer, acceptance, consideration, an intention to create legal relations, and no vitiating factors. The parties were genuinely of one mind on the sale itself. But having a valid contract to buy shares and actually owning those shares turned out to be two very different things.

Buying Shares in Nigeria Has a Specific, Non-Negotiable Process

This is the part of the ruling with the broadest everyday relevance. Under Nigeria's Companies and Allied Matters Act, share ownership doesn't transfer just because a valid sale agreement exists. The law lays out a specific sequence: an instrument of transfer has to be executed, and only once the transferee's name is actually entered into the company's register of members does legal ownership shift. Until that happens, the seller remains the legal owner of the shares — full stop, regardless of what any underlying contract says.

Binez never got that far. The share transfer forms were never executed, the Bureau never received or cashed the purchase cheque, and the shares' legal ownership never left the Federal Government's hands before they were resold to Ebonyi State. However genuine and valid the original agreement was, Binez's interest in the shares died the moment the Bureau failed to follow through on completing the transfer.

Why There Was No Constructive Trust Here

Binez's fallback argument was that a constructive trust had arisen the moment the contract was made — meaning the Bureau effectively became a trustee holding the shares' benefit for Binez, obligating it to hand over the resale proceeds once it sold to Ebonyi State instead.

The Court explained what constructive trusts actually are: a fix courts reach for, not because two parties agreed to it, but because leaving someone holding onto a benefit they have no honest claim to would be worse than intervening — a tool against unjust enrichment, not a reward for following an intended arrangement. It doesn't arise automatically from every unconsummated sale — it depends on the specific circumstances.

Here, the circumstances didn't support it. The cheque Binez issued was never cashed; it was returned. The Court drew a pointed distinction: had the Bureau actually cashed that cheque and then still failed to execute the transfer forms, that might well have been a different story — potentially exactly the kind of situation where a constructive trust would be appropriate. But holding onto money you were paid while failing to deliver is a very different wrong from simply failing to complete a transaction and giving the money back. Since Binez got its money back and the transaction was never completed on either side, there was nothing left for equity to intervene and correct.

Reading a Statute for What It Actually Says

Tucked into the judgment is a broader point about statutory interpretation: where a law's words are plain and unambiguous, courts give them their natural, ordinary meaning, and won't strain that meaning unless doing so would produce an absurd result. The share-transfer provision at issue here was clear enough that there was no real room to interpret it more loosely in Binez's favour.

Final Verdict

The Supreme Court unanimously upheld the preliminary objection and struck out the appeal for incompetence. Even setting that aside and looking at the substance, the appeal would have failed anyway — the concurrent findings of the two lower courts that Binez never acquired legal ownership of the shares were sound and undisturbed.

Key Takeaways

• Never remove a party from an appeal without the court's leave. Even a party who never actively participated at trial remains a party until a court formally says otherwise — quietly dropping them is often fatal to the whole appeal.
• A defective notice of appeal poisons everything built on top of it. If a lower appellate court never had proper jurisdiction, a further appeal to a higher court doesn't inherit jurisdiction the first court never had.
• An unrecorded oral application is effectively no application at all. If you want a party removed, do it formally — a motion on notice, an affidavit, a written address — and make sure it actually appears in the record.
• A valid contract to buy shares isn't the same as owning them. Under Nigerian company law, legal ownership only transfers once an instrument of transfer is executed and the buyer's name is entered in the register of members.
• A constructive trust isn't automatic just because a deal fell through. It typically requires the other side to have actually kept a benefit they're not entitled to — getting your money back when a transaction unwinds is a very different scenario from someone holding onto both your money and the property.

Test

1. Did the supreme court consider the merits of the appeal despite declaring it incompetent due to a preliminary objection ?
2. What was the supreme court's conclusion regarding the merits of the appeal ?
3. Why was the appeal declared incompetent by the supreme court?