Mobil Oil Nigeria Limited Vs Nabsons Limited (1995)
LAWGLOBAL HUB Lead Judgment Report
MOHAMMED, J.S.C.
In these proceedings which commenced in the High Court of Cross River State holden at Calabar, the respondent as plaintiff, brought an action against the appellant, as defendant, with the following particulars:
“The plaintiff at all times materiallyin this case is a peddler of the defendant’s products. From this business relationship, the plaintiff maintains both product and deposit accounts with the defendant. The plaintiff apart from being entitled to make withdrawals from his deposit account was to be reimbursed on incidental expenses incurred by the plaintiff within and in the course of the business of the defendant.
Whereof the plaintiff after repeated demands for these entitlements and persistent failure and or neglect by the defendant to meet these demands now claims a total sum of N71,636.00 as follows:-
1.(a) N16,300.00 Deposit Account
(b) 1,200.00 Claim on vehicle maintenance of the defendant
(c) 4,136.00 Freight expenses
N50,000.00 General damages”
In paragraph three of the statement of claim the respondent averred that “the plaintiff at all material times is a dealer or peddler of products of the defendant, among other things” and in paragraph four the plaintiff company explained that “as a peddler and in line with the business practice of the defendant, the plaintiff maintains both product and deposit accounts with the defendant” and in paragraph five of the statement of claim the respondent explained some business transaction between the two parties in the following averment:
“In accordance with the business practice between the parties, the plaintiff is entitled to make withdrawals from the said deposit account and to be reimbursed on incidental expenses incurred by him within and in the course of the business of the defendant. At the trial the plaintiff will rely on the defendant’s letter No. EB 134 dated August 13, 1983 being a reply to the plaintiff’s letter requesting for the sum of N30,000.00 from the defendant to enable the plaintiff put a vehicle on the road in furtherance of its business commitments to the defendant.”
The appellant, in its Statement of Defence, denied knowing the respondent or ever having any contractual or other business relationship with the company as their dealer or peddler of petroleum products. The appellant further explained that it had a business relationship with one N.A. Bassey and that by an agreement dated 24/1/78 made between the appellant and the said N.A. Bassey the latter was appointed a peddler of the appellant’s kerosine product on terms and conditions set out in the said agreement. In paragraph 7 of the Statement of Defence the appellant disclosed one of the conditions of its agreement with N.A. Bassey, which reads:
“By paragraph 2(q) of the said agreement the said N.A. Bassey undertook and bound himself not to assign, change or in any way encumber the benefit of the agreement or part thereof.”
After pleadings were delivered and exchanged the trial opened on 11th February, 1986, before Udofia, J. Mr. Nsa Asuquo Bassey was the first witness for the plaintiff. During his testimony Mr. Bassey explained to the court how he transacted his business as a dealer and peddler in petroleum products with the appellant. It is pertinent to pause here and refer to paragraph 11 of the Statement of Defence. In that paragraph, the appellant pleaded that since the respondent was not a party to the kerosine peddling contract between the appellant and Mr. N.A. Bassey, Nabsons Limited (the respondent) had no locus standi to sue under the said agreement. The implication of paragraph 11 of the Statement of Claim became quite clear when Mr. N.A. Bassey said in his evidence before the court, thus:
“When I became a member of the Cross River State House of Assembly, I wrote a letter to the defendant telling the defendant that I have transferred all my assets to Nabsons Limited which I had incorporated. ”
It was at this stage that learned counsel for the respondent sought for an adjournment of the hearing. When the court resumed, learned counsel for the respondent moved a motion seeking for an order to join Mr. N.A. Bassey as co-plaintiff in the action and for an order to amend the plaintiff’s statement of claim. The application was opposed by learned counsel for the defendant/appellant. In his ruling the learned trial Judge said:
“It is trite law that a company has a personality different from those of its shareholders. Hence even though the applicant has sworn that he was a sole Proprietor of the Business before incorporation, once the company was incorporated it became a separate entity different from that of the applicant. Hence since the applicant has sworn in his affidavit that he had transferred all his assets and liabilities to the plaintiff, Nabsons Ltd., I hold that he does not have any more interest nor ground for instituting this suit which is different from Nabsons Limited. It does not matter whether or not he has all the shares in Nabsons Limited. It is Nabsons Limited as a legal personality which is entitled to institute the suit and the plaintiff can, if Nabsons Limited succeeds in the suit, take all the interests and benefits if he is the sole shareholder as he claims. The application by Mr. N.A. Bassey to be joined as a co-plaintiff therefore fails and I refuse it.”
After this ruling a new counsel. Mr. Nta, appeared for the respondent and requested for a short adjournment to prepare and be fully briefed by the respondent, particularly in view of the court’s ruling. The learned trial Judge refused to adjourn the case and ordered for the case to continue on that day. Mr Nta thereafter told the court that his client was unable to continue with the hearing of the case. The learned trial Judge struck out the case.
Dissatisfied with the court’s refusal to order for the joinder of Mr. N.A. Bassey as co-plaintiff, to amend the statement of claim, to adjourn the case and for striking out the suit, the respondent appealed to the Court of Appeal, Enugu Division. In a well considered judgment the Court of Appeal allowed the appeal, set aside the decision of the trial court and ordered that Mr. Bassey be joined as co-plaintiff in the suit. It also ordered for the amendment of the statement of claim which the respondent applied for before the trial court.
It is against the judgment of the Court of Appeal that the appellant registered this appeal and filed seven grounds of appeal in order to prosecute the appeal. On the day this court fixed this appeal for hearing only the appellant’s brief was before us. There was a sworn affidavit of service of the record of proceedings and the brief of the appellant on the respondent but the respondent had failed to file a respondent’s brief. Following the provision of this Court’s Rules, under Order 6 rule 8(7) we permitted the appeal to be argued on the appellant’s brief only.
Five issues were formulated by the appellant’s counsel, in the appellant’s brief, for determination of this appeal. They are as follows:
“(1) Whether having regard to all the circumstances of this case the Court of Appeal was right in reversing the decision of the learned trial Judge to the effect that he had no jurisdiction under the applicable Order 4 rules 2 and 5(1) of the Eastern Nigeria High Court Rules, 1955, to grant the application for the Managing Director of the plaintiff company, N.A. Bassey to be joined as a co-plaintiff in the action.
(2) Whether the Court of Appeal was right in substantially basing its decision to join the Managing Director of the plaintiff company (N.A. Bassey) as a co-plaintiff in this case on the judgment of the Federal Supreme Court in Laibru Ltd. v. Building and Civil Engineering Contractors (1962) 1 All NLR (Pt.3) 387; (1962) 2 SCNLR 118 when the facts and circumstances of that case are very different.
(3) Whether in the circumstances of this case the Court of Appeal was right in holding that an amendment of pleading is a question of right and whether that court was right in granting the amendment sought even when the learned trial Judge held that no case had been made out under O.34 of the Eastern Nigeria High Court Rules, 1955, for such amendment to be granted.
(4) Whether the Court of Appeal was right in interfering with the trial Judge’s discretion and deliberate judgment in refusing adjournment and striking out the case when the plaintiff refused to go on.
(5) Whether the Court of Appeal was right in disregarding the objection taken before it as to the validity of the then appellant’s brief and the right of the said appellant’s counsel to be heard in oral argument thereof having regard to the fact that the brief did not comply with the rule that argument must be of the issues raised for determination in the appeal and not the grounds of appeal simpliciter.”
In his submission on the first issue learned counsel for the appellant argued that the Court of Appeal did not consider or adequately consider the peculiar facts as placed before the learned trial Judge by the applicant in order to determine whether those facts bring the applicant within the applicable rules so as to enable the court exercise the jurisdiction vested in it by those rules to order or not to order joinder according to the judicious exercise of its discretion. It is pertinent to refer to the Rules, Cap. 51 of the Laws of Cross River State, 1981, on joinder of parties.
Learned counsel for the appellant reproduced Order 4 rule 2 and 5(1) in his brief which provides as follows:
“2 Where a person has jointly with other persons a ground for instituting a suit, all those other persons ought ordinarily to be made parties to the suit.” and
“5(1) If it shall appear to the Court, at or before the hearing of a suit, that all the persons who may be entitled to or who claim some share or interest in the subject matter of the suit, or who may be likely to be affected by the result, have not been made parties, the court may adjourn the hearing of the suit to a future day, to be fixed by the court, and direct that such persons shall be made either plaintiffs or defendants in the suit, as the case may be”
The Court of Appeal in its judgment considered the general practice established by a large number of authorities on the joinder of parties. If one reads the High Court Rules of Cross River State, reproduced above, it is obvious that what it entails is what Ibekwe, J.S.C., said in the case of Oterail Odadhe v. Otowodo Okujeni & Ors. (1973) 11 SC 343, that joinder of parties, if it is found to be necessary, may be made at any time during trial with a view to adjudicate upon and settle all questions involved in the cause. The interest of justice demands that, as far as possible, the issues between the parties should be determined once and for all, so as to avoid multiplicity of proceedings. This court in the case of Chief A.O. Uku & 4 Ors v. D.E Okumagba & 4 Ors (1974) 3 SC 35 applied with approval the opinion of Willmer J., on the issue of joinder of parties, in the case of Miguel Sanchez and Campania S.L. v. The Result (Owners) Nello Simoni Ltd; Third Party (1958) Probate 174 where the learned Justice said:
“The rule providing for the joinder of additional parties is R.S.C. Ord., 16, r. 11. It is not, I think, disputed that the third parties are entitled to the order sought only if they can bring themselves within the terms of that rule. Having regard to the terms of the rule, It appears to me that the questions to be determined on this summons are these. First, is the cause or matter liable to be defeated by the non-joinder of the third parties as defendants This, I think, means in effect: is it possible for the court to adjudicate upon the cause of action set up by the plaintiffs, unless the third parties be added as defendants Secondly, are the third parties persons who ought to have been joined as defendants in the first instance Thirdly, and alternatively, are the third parties persons whose presence before the court as defendants will be necessary in order “to enable the court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter”
The learned justice of the Court of Appeal, who wrote the lead judgment, Uwaifo, J.C.A., considered the relevance of joining Mr. N.A. Bassey as co-plaintiff to the present action. The learned Justice pointed out, quite correctly, in my view, that what appears to have taken place between Mr. N.A. Bassey and Nabsons Limited, the respondent, in respect of the business transactions with the appellant was an assignment. The appellant said that Mr. Bassey did that in contravention of the business agreement between them.
It is clear from the facts of this case that Mr. N.A. Bassey got Nabsons Limited incorporated with a view to transferring his business of dealership in petroleum products with the appellant. In paragraphs 5, 6 and 7 of the proposed Amended Statement of Claim the respondent averred as follows:
“5. By letter dated 17th April, 1980 the 2nd plaintiff informed the defendant of the transfer of his business to the 1st plaintiff, By letter dated 20th June, 1980 the defendant acknowledged 2nd plaintiff’s letter dated 17/4/80 and requested him to forward the defendant’s legal department, copies of 1st plaintiff’s Memorandum and Articles of Association as well as Certificate of Incorporation. 2nd Plaintiff’s letter dated 17/4/80, defendant’s letter dated 20/6/80, Memorandum and Article of Association, Certificate of Incorporation herein referred are hereby pleaded.
- The 2nd plaintiff under cover of letter dated 1/7/80 forwarded the aforesaid documents to the defendant. The defendant by its letter Of 3/4/80 copied the 2nd plaintiff sent the said document to one A.C. Osokolo, an officer of the defendant. The letters herein referred are hereby pleaded.
- The defendant thereupon resumed the dealership business of the 2nd plaintiff with the 1st plaintiff and sent its invoices and addressed several letters to the 1st plaintiff.”
From the above, it is plain that without joining Mr. N.A. Bassey as a co-plaintiff to this suit, the real question in controversy between the appellant and the respondent cannot effectively and completely be adjudicated upon and all questions involved in the cause or matter settled. In the case of Laibru Ltd. v. Building and Civil Engineering Contractors (1962) 1 All NLR 387; (1962) 2 SCNLR 118 this court considered similar situation and ordered for joinder of a third party as a co-plaintiff. The Court of Appeal reported the facts of Laibru case and as the facts of that case are very similar to the facts of the case in hand I shall reproduce them as well. The facts have been reported as follows:
“An action was brought for goods sold and delivered by the appellant company as plaintiffs against the respondents as defendants. At the hearing of the action, the evidence adduced on behalf of the plaintiff company showed that early in 1959 one Michael Ibru, an individual trading under the name of “Laibru” sold goods in question to the defendants for which the defendants failed to pay. It further showed that, later in the same year, Michael Ibru and others formed the plaintiff company for the purpose of taking over and running the business formerly run by him personally and that he assigned all his assets in the business to the plaintiff company, including the debt owing to him by the defendants for goods sold by him to them earlier in the year. Notice of the said assignment was not given by Michael Ibru to the defendants. On those facts it was held that the said plaintiff company could only sue by joining the assignor, Michael Ibru, as a co-plaintiff’”
In the result, I have to resolve the first issue in favour of the respondent and affirm the lower court’s decision that the learned trial Judge had erred in refusing to order for the joinder of Mr. N.A. Bassey as a co-plaintiff and that the error could lead to the defeat of the plaintiff’s case.
The next issue is the question of refusal of the trial court to grant the order for an amendment to the statement of claim. The Court of Appeal referred to the amendment proposed and found that, contrary to what the appellant had said, the proposed amendment was to show that the appellant dealt with Nabsons Limited as a peddler of its products in place of and at the instance of Mr. Bassey.
Learned counsel for the appellant referred to Order 34 of the High Court Rules of Eastern Nigeria 1955 (applicable to the Cross River State) and submitted that amendment of proceedings are at the discretion of the court. When a party applies for an amendment it must place before the court materials upon which it is to exercise its discretion. I think it is now well settled and without citation of authorities that the correct principle for the guidance of a court in the exercise of its discretion is that an amendment of pleadings for the purpose of determining the real questions in controversy between the parties ought to be allowed unless such amendment will entail injustice or surprise or embarrassment to the other party or the applicant is acting mala fide, or cause injury to the respondent which cannot be compensated by costs or otherwise. See Chief S.O.N. Okafor v. D.O. lkeanyi & Ors. (1979) 3-4 S.C. 99 at 106 where BeIlo, J.S.C. (as he then was) referred to an earlier decision of this court in Chief Ojah & Ors. v. Chief Eyo Ogboni & Ors. (1976) 4 SC 69. It is well established principle that the object of courts is to decide the rights of the parties, and not to punish them for mistakes which they make in the conduct of their rights.
The request for an amendment of the Statement of Claim in the present case was submitted when PW1 had just started to give evidence. It would amount to gross injustice to refuse the request for the amendment of the statement of claim at that stage particularly as the bone of contention is the assignment of the dealership and peddling agreement which Mr. N.A. Bassey did to the respondent. The Court below is quite right to order for the amendment which would undoubtedly lead to determination of the real question in controversy between the parties in this action.
Turning to the issue of the trial court’s refusal to grant the prayer for adjourment: should be explained that the power of a court to grant adjournment is a typical exercise of purely discretionary power which must at all time be exercised not only judicially but also judiciously: – See Ilona & Ors. v. Dei & Ors. (1971) 1 All NLR 8. Where there is a change of counsel, during trial, and the new counsel applies for a short adjourment to enable him prepare and be fully briefed by his client it will amount to a judicious exercise of discretion if the courts grants the application. Refusal to adjourn, in such a situation may amount to taking away the right of a party to have a counsel of his choice. The trial High Court was definitely in error to refuse the application of Mr. Nta, the new counsel for the respondent for a short adjournment after he had taken over the case and appeared for the first time for the respondent. The Court of Appeal is quite right to declare that the refusal to adjourn was erroneous.
The refusal of the learned counsel for the respondent, Mr. Nta, to go ahead with the proceedings on that day was based on good reason. The counsel had been brought into the case after two vital applications of his client, to join an important party as co-plaintiff and to amend the Statement of Claim had been refused. His prayer for an adjournment to consider the next step in the proceedings was also refused. In the circumstances, the counsel had no alternative but to explain to the court of his inability to proceed with the case.
The striking out of the action at that stage was wrong and the Court of Appeal was right to review and reverse such unfair ruling:- See Maxwell v. Keun (1928) 1 K.B. 645. This appeal is devoid of any merit and it is dismissed. The judgment and order of the Court of Appeal are hereby affirmed. Since the respondent has not written any brief and did not put up appearance there will be no order as to costs.
Other Citation: (1995) LCN/2369(SC)
