Chief Peter Amadi Nwankwo & Anor V. Ecumenical Development Co-operative Society (Edcs) U.A (2007)

LAWGLOBAL HUB Lead Judgment Report

M. MUKHTAR, J.S.C

The respondent who was the plaintiff in the High Court of Enugu State applied for issuance of a writ of summons under the undefended list, and the particulars of its claims against the defendants jointly and severally were as follows:-

“(a) The sum of $500,000.00 (Five hundred thousand US Dollars) being the principal sum of the loan due from the first and second/defendants to the plaintiff under a personal guarantee executed by the defendants to secure a loan granted by the plaintiff to Amike Ezzangbo Community Farms Limited under a loan granted by the plaintiff to Amike Ezzangbo Community Farms Limited under a loan agreement dated 18th January, 1990 payment of which sum the first and second defendants have failed, refused and/or neglected to pay despite repeated demands.

(b) Interest on the principal sum of $500,000.00 (Five Hundred Thousand US Dollars) at the agreed rate of 9% (nine percent) per annum from January 22, 1991 till date of judgment.

(c) Interest thereafter at the rate of 6% (six percent) per annum from the date of judgment until the entire judgment sum is finally liquidated.”

A twenty-five paragraphed affidavit in support of the application was sworn to by one Eze-Ozims Made for, and quite a number of documents were exhibited thereto. The pertinent paragraphs of the affidavit are:-

“3. That under and by virtue of a Loan Agreement dated 18th January, 1990 executed between the plaintiff! applicant and the Amike Ezzangbo Community Farms Limited (hereinafter referred to as “the company”), the plaintiff agrees to make available to the company a loan in the sum of $500,000.00 (Five Hundred Thousand US Dollars) for the purpose of financing the purchase of equipment, vehicle and working capital requirements for the development of the company’s agricultural project at Amike Ezzangbo, Ishielu, Enugu State. The loan agreement dated 18th January, 1990 is herewith attached and marked exhibit A.

10. That consequent upon the above, the plaintiff on the 22nd January, 1991 disbursed the loan to the Company through its Domiciliary Account No. 192/05 with First Bank of Nigeria Plc, Isolo Branch, Mushin, Lagos State, Nigeria through their Head Office No. 29/30 King Street, London EC2 V8 8EH
11. That the Company since utilized the said loan for the purchase of capital equipment and its working capital requirement in accordance with the terms and tenor of the Loan Agreement.
12. That rather than pay the installment due on the principal sum as agreed by the plaintiff and the company, the company on the 12th of October, 1992 and 1st November,1993 apply to the plaintiff for a Maintenance and Stabilization Fund Loan and Authority to borrow more fund from other sources which application was never granted by the plaintiff. The Company’s letters of October, 1992 and 1st November, 1993 are attached herewith and marked exhibit D1 & D2 respectively.
13. That on the failure of the Company to discharge its obligation under the Loan Agreement and Legal Mortgage regarding the repayment of the outstanding principal sum and interest in compliance with the terms and tenor of the Loan Agreement, the firm of Bentley Edu & Co. on the instruction of the plaintiff on 19th April, 1995 caused a letter of demand to be written to the company demanding a remittance of the outstanding principal sum and interest on the loan facility. The plaintiffs said former solicitor’s letter of 19th April, 1996 is herewith attached and marked exhibit E.
14. That rather than discharge the several installments of the principal sum and accrued interest that have fallen due, the company vide its letter of 12th May, 1995 applied to the plaintiff for a rescheduling of the loan and for further funding. The company’s letter of 12th May, 1995 is herewith attached and marked exhibit F.
15. That on the default of the company to repay the loan and the accrued interest, the plaintiff solicitors, Messrs George Ikoli & Okagbue by letters dated 29th July, 1996 demanded from the first and second defendants an immediate redemption of their obligation under the executed guarantee by paying the principal sum and the accrued interest on the loan granted to the company, payment of which sum they guaranteed. The plaintiff’s Solicitors Letters of 29th July, 1996 are herewith attached and marked exhibits 1(a) & 1(b).” The defendants filed a notice of intention to defend the suit under Order 24 rule 9(2) of the High Court (Civil Procedure) Rules of Anambra State (applicable to Enugu State), disclosing their grounds of defence in the supporting affidavit. The plaintiff filed a counter affidavit against the defendants’ notice of intention to defend.

The salient depositions in the affidavit in support of the notice of intention to defend the suit are as follows:-

“2. That the loan agreement was not executed on 18th January, 1990.

3. That a copy of the letter showing that the loan agreement was not executed even in 1991 is herein shown as exhibit EC01.
4. That by a letter dated 10th August, 1990 addressed to S. A. Edu Esq. Counsel for the plaintiff – a copy of which is shown herein as exhibit EC02 the Amike Ezzangbo Community farms withdrew from the project since the loan was not released.
5. That by letter dated 6th July, 1990 a copy of which is herein shown as exhibit EC03 counsel for the plaintiff refused to give approval for the loan.
6. That there are other documents which the defendants will use at the trial to show that there was no contract between the plaintiff and the defendants.
7. That the defendants/respondents have good defence against the claim.
8. That even if there was a valid contract the defendants will raise issue of expiration of time within which the plaintiff may take out this suit”.

On the other hand, the salient depositions in the counter-affidavit are as follows:-

“7. That I deny paragraph 2 of the affidavit in support and state that the loan agreement was indeed executed on 18th January, 1990. That attached and marked exhibit EDCS 1 is the loan agreement showing that it was duly executed by the parties.

8. That contrary to the averments in paragraph 3 of the affidavit in SUPPORT, the letter dated 22/1/92 is a letter from the plaintiff to its former solicitors thanking them for sending the loan agreement and legal mortgage which have been executed by both parties.
9. That contrary to the impression sought to be created by paragraph 4 of the affidavit in support, the Amike Ezzangbo Community Farms Limited did not by its solicitors letter of dated August, 1990 withdraw from the project but merely complained about the delay in advising the plaintiff to release the loan to the Amike Ezzangbo Community Farms Limited when all necessary securities have been put in place.
10. That I deny paragraph 5 of the affidavit in support and state that exhibit EC03 referred to in the said paragraph 5 and attached to the affidavit is a letter dated 6th July, Amike Ezzangbo Community farms limited complaining about the inefficiency of the securities put in place by the company to facilitate the disbursement of the loan by the plaintiff to the company.
11. That indeed regardless of the plaintiff’s former solicitors position in exhibit ECO3 attached to the affidavit in support of the defendants notice of intention to defend the suit, plaintiff actually disbursed the loan to Amike Ezzangbo Community Farms Limited.
12. That Amike Ezzangbo Community Farms Limited had by letter dated 12th May, 1995 admitted that it borrowed from the plaintiff, a total sum of US S500,000.00 and that it had regrettably defaulted in paying the installments of principal sum due and accrued interest. Attached and marked exhibit EDC83 is Amike Ezzangbo community farms limited letter dated 12th may, 1995.
13. That I deny paragraph 6 of the affidavit in support and aver that three was indeed a contract between the plaintiff and the defendants as evidenced by the guarantee duly executed by the defendants in favour of the plaintiff to secure the loan agreement entered into between the plaintiff and Amike Ezzangbo Community Farms Limited.
14. That in answer to paragraph 7 of the affidavit on support I say that the defendant have no defence against the claim as they actually guaranteed the payment of the loan of US $ 500,00.00 given by the plaintiff and Amike Ezzangbo Community Farms with interest and which the company have defaulted in paying in spite of repeated demands by the plaintiff.
15. That the first defendant executed the personal guarantee which was incorporated in the said loan agreement (page 16- 21) Exhibits EDCS 1 hereof on 19th October, 1989, while the second defendant executed same on 16th October, 1996.

18 That the defendants ate directors of the said Amike Ezzangbo Community Farms Limited, the borrower and the loan agreement was signed by the first defendant in his capacity as director of the borrower.

19. That contrary to the impression sought to be created in paragraph 8 of the affidavit in support of the notice of intention to defend, the action was instituted well within the time allowed by law”.

The learned trial Judge after a careful consideration of the processes and documents before him refused the defendants’ application to transfer the suit to the general cause list, describing their defence as a sham. Unhappy about the decision, the defendants appealed to the Court of Appeal. The Court of Appeal dismissed the appeal, and the defendants again appealed to this court. Learned counsel for the parties exchanged briefs of argument. The appellants formulated issues for determination which were adopted at the heating of the appeal. The issues for determination in the appellants’ brief of argument are as follows:-

“1. Whether the Court of Appeal applied moral persuasion instead of legal rules in determining the appeal before it

2. Whether the appellants in this case in the High Court were denied fair hearing which resulting (sic)in perverse justice”

The respondent in his brief of argument raised by way of preliminary objection, the competence of ground one (1) of the appellants’ ground of appeal together with their particulars. The learned counsel for the respondent has contended that they are incompetent and ought to be struck out, and so is issue (1) in the appellants’ brief of argument, which I have already reproduced above.

The grounds of objection set out by learned counsel are as follows:-

“(a) The said ground of appeal is vague, general in terms and does not disclose a reasonable ground of appeal.

(b) The particulars furnished in support of the ground of appeal, specifically (iii) and (iv) are unrelated to the ground and are therefore incompetent.

(c) The issue of morality or otherwise does not arise from the decisions of the Court of Appeal being appealed against.

(d) The statement quoted in paragraph (i) of the particulars given in support of ground 1 in the grounds of appeal did not constitute a decision of the Court of Appeal but was only an obiter dictum (a passing remark) made by the court and the same is not appealable.

(e) The particulars furnished by the appellant numbered (iii) and (iv) in the ‘particulars of error in support of ground I contain fresh points on which no arguments were canvassed at either the court of trial or the court below.

(f) The appellants require leave of this Honourable court to raise such an issue.

(g) The requisite leave to raise these points for the first time was neither sought nor obtained.”

For a clearer understanding of this objection on ground (1) of appeal, it is pertinent that I reproduce the said ground of appeal and its particulars at this juncture. The ground of appeal reads thus:-

“The Court of Appeal erred in law by using moral persuasion instead of legal justice in determining the success or failure of the appeal.

Particulars of Error

(i) The following question from the judgment was the expressed position of the court below:-

“It is not for me to fathom the inscrutable working of providence. But I can guess as a mortal. It appears to me that the appellants thought that they created an equidistant triangle with their pet ideas as stated above such standing at angle 60 degrees.”

(ii) The issue before the court at all material times was not a moral issue but legal issues.

(iii) The court below erred in law when it failed to examine and interpret the agreement between the parties before confirming the judgment of the High Court.

(iv) The clauses in the agreement from (sic) part of the proceedings.”

Having set out his grounds of objection on ground (1) of appeal in his brief of argument, learned counsel for the respondent went on to formulate issues in respect of the objection, which I consider to be absolutely unnecessary. The exercise of trying to convince this court of the incompetence of the said ground of appeal became a tedious one, for the argument on this complaint took learned counsel on a voyage that spanned over 5 years (which translated into seven pages of the brief), when it could have taken only a few hours. All for what That one single ground. It looks to me that learned counsel simply wants to make a mountain out of molehill. I will consider the attacked ground of appeal to determine its efficacy and its validity. Grounds of appeal are meant to attack findings of a court that have bearing on the case put up by a litigant. In other words, it should be related to a decision of the court and contain complaints an appellant rely on to succeed in setting aside a decision, the ratio decidendi of a judgment, not just observations and passing remarks of a Judge in the course of writing a judgment. See Akibu v. Oduntan (2000) 13 NWLR (Pt.685) page 446, lloabachie v. lloabachie (2000) 5 NWLR (Pt.656) 178, and Erivo v. Obi (1993) 9 NWLR (Pt.315) 60. In the course of writing a judgment, a Judge analyses sequence of events as they recur and in the process makes some observations and comments. After all he is a human being who is bound by feelings and to express such feelings is not forbidden, as long as he is careful as not to be swayed by it. In other words, a Judge cannot be put in a straight jacket and expected to be so restricted without the liberty to put his thoughts into writing. That the learned trial Judge in this case used the expression attacked in the above ground of appeal does not mean that he used moral issue as parameter for deciding the case. There are plethora of authorities on the purport of a ground of appeal, but this reproduced ground (1) of appeal does not certainly fall into the category of a competent ground of appeal.

See the cases of Metal Construction (WA.) Ltd. v. Migliore (1990) 1 NWLR (Pt.126) 299, and Osolu v. Osolu (1998) 1 NWLR (Pt.535) 532 relied upon by learned counsel for the respondent. See Saude v. Abdullahi (1989) 4 NWLR (Pt.l16)387, Abisi v. Ekwealor (1993) 6 NWLR (Pt.302) 643.

For the foregoing, I uphold the objection raised and strike out ground (1) of the appeal supra as it is incompetent.

Consequently, issue (1) supra married to the said ground of appeal now has no ground of appeal related to it, and so it has no place in law. The settled law is that an issue formulated for determination must be distilled from a ground of appeal, and where it has no ground of appeal to relate to, then it has no part to play in the determination of the appeal, and so the appellate court has no option than to disregard the said issue. Issue (1) in the appellant’s brief of argument also becomes incompetent and it is discountenanced. See Nfor v. Ashaka Cement Co. Ltd. (1994) 1 NWLR (Pt.319) 222, and Akpan v. State (1994) 9 NWLR (Pt.368)347.

That leaves us with only issue (2) in the appellant’s brief of argument. The respondent in its brief of argument formulated two issues for determination, in the event that their notice of preliminary objection is overruled. The first issue is related to the ground of appeal that has been struck out above, and so it must also go. The second issue for determination is “whether in an undefended suit matter, the dismissal of a defendant’s notice of intention to defend the action against him and the subsequent entry of judgment for the plaintiff (without more) amounts to an infraction of that defendant’s rights to a fair hearing guaranteed under the Constitution”

This issue is virtually the same as the appellant’s issue (2). In arguing the said issue (2) the learned counsel for the appellant submitted that if the trial Judge had called on the appellants’ counsel to address the court on the law and facts before judgment, the trial court would have not come to the conclusion giving judgment for the plaintiff in the sum of five hundred thousand US Dollars etc.

Learned counsel further argued that because there should be no legal argument in an affidavit, the duty of the trial Judge was to call on the appellants to address him on the issue of limitation, and if he did not want to do that he would have considered the exhibits before him on his own to come to a just decision. This I suppose would have constituted fair hearing. Learned counsel placed reliance on the cases of Ariori v. Elemo (1983) 1 SCNLR 1, Okafor v. A.-G.,Anambra State (1991) 6 NWLR (Pt.200)659, and Military Governor of Imo State v. Nwauwa (1997) 2 NWLR (Pt.490)675. Learned counsel also argued that as much as it is the obligation of a plaintiff

in a civil suit to prosecute his matter diligently and establish his case against the defendant, the duty of the defendant who denies the claim made against him is to call evidence before the court to disprove the plaintiff’s case. He referred to the cases of Okpala v. D.G. of National Commission for Museums and Monuments and Ors. (1996) 4 NWLR (Pt.444) 585; Opara v. Chinda (1996) 2 NWLR (Pt.432) 527. On the other hand, learned counsel for the respondent has argued that the defendant in an undefended list suit can be let in to defend the action only if he delivers a notice of his intention to defend the suit and accompanies suit and accomplishes the same with the affidavit which discloses a defence on the merit. In that case, the court may allow him to defend the suit. He referred to Order 24 rules 9(2) and (4) of the High Court Rules of Anambra State, 1988, applicable to Enugu State, wherein the suit was initiated. I will reproduce the rules hereunder. They read:-

“24(9)(2). If the party served with the writ of summons and affidavit delivers to the Registrar, not less than five days before the day fixed for hearing, a notice in writing that he intends to defend the suit, together with an affidavit setting out the grounds of his defence, and the court is satisfied that there is a triable issue, then and in such case the suit shall be entered in the general list and pleadings shall be filed.

……….

(4) or where he delivered the notice and affidavit but the court is not satisfied there from that there is raised any bona fide issue for trial between the plaintiff and the said defendant, then and in such a case, the suit shall be heard as an undefended suit, and then judgment given thereon, without calling upon the plaintiff to summon witnesses before the court to prove his case formally” Indeed, the learned trial Judge examined the defendants’ notice of intention to defend, (and most carefully too) as is reflected in the following excerpt of his ruling:-

“The plaintiff’s affidavit in support of the application to place the suit on the undefended list was served on the defendants. In the said affidavit the plaintiff exhibited exhibits ‘D2’ and ‘F’. These documents were made on behalf of the Amike Ezzangbo Community Farms Nigeria Limited by the 1st defendant as its Chief Executive. The 1st defendant did not in his affidavit expressly deny making the said documents. In exhibit D2, the defendant writing on behalf of the said company expressly admitted that the company received from the plaintiff the loan of $500,000.00 dollars in two batches of $250,000.00 dollars each and proceeded to ask for a further loan of $734,018 US dollars. The very first sentence in exhibit ‘F’ is most explicit. It reads:-

‘We acknowledge the fact that the Amike Ezzangbo Community Farm (Nig.) Limited borrowed from EDCS a total sum of U.S.$500,000.00 and that the company regrettably had defaulted in paying the installments of principal due and accrued interest’.

It is therefore amazing that the defendants are now attempting to deny the disbursement of the loan sum”.

The depositions in the Supporting affidavit of intention to defend and the annexures are so clearly not cogent enough to warrant the calling for counsel’s address on law and facts before judgment, as submitted by learned counsel for the appellants (not even on the issue of limitation). A careful perusal of the Supporting affidavit shows that it does not disclose that there are triable issues. Indeed, some of the documents exhibited support and lend credence to the case of the plaintiff. It is trite that unless a defendant in its Supporting affidavit of intention to defend a suit on the undefended list states a good defence and the particulars of such defence are adequately set out, and they are such that if proved would constitute such a defence, the court will not transfer the suit to the general cause list, and allow the defendant to defend the suit. See Jipreze v. Okonkwo (1987) 3 NWLR (Pt.62)737, Nishizawa Ltd. v. Jethwani (1984) 12 Sc. 234, and John Wallingford v. The Directors, & C. of the Mutual Society, and the Official Liquidator (1880) 5 App.Cas page 685 at page 704. In fact the documents exhibited by the appellants virtually nailed their coffins, so to speak. I fail to see that the appellants were denied fair hearing. With the above reproduced excerpt of the ruling of the High Court, one can see that the so called defence was adequately considered; and the decisions of the two lower courts were clearly borne out of law and facts placed before the courts, not morality or sentiments. The Court of Appeal was clearly in support of the trial court’s treatment of the purported defence put up by the defendants/ appellants, in its judgment, as is illustrated in a passage of which reads the following:-

“By the provisions of rule 9(4) of Order 24, a plaintiff is not required to call witnesses to prove its case once the defendant fails to show a triable issue or make a prima facie defence on the merit. The trial court rightly heard and determined the case based on affidavit of evidence of the parties and addresses of counsel thereon. Since no triable issue or defence on the merit was shown, there was no need to transfer the suit to the general cause list where pleadings and oral evidence would be warranted. I see no material conflicts on real points in issue in the affidavit of parties before the trial Court”.

The court below was quite right in its above stance, and I cannot see that there was any error in it. In the light of the above reasoning, the answer to this issue (2) supra is in the negative, and ground (2) of the appeal to which it is married fails. The end result is that this appeal fails in its entirety and it is hereby dismissed. The judgments of the lower courts are affirmed. The costs of N10,000.00 are awarded to the respondent against the appellants.

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SC.33/2002