Chief Victor Edema Vowa V. First Bank of Nigeria Plc (2016) LLJR-CA
LawGlobal-Hub Lead Judgment Report
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.
This is an appeal against the judgment of O. A. TAIWO J. of Lagos State High Court delivered on 31st August, 2010 wherein Appellant as Claimant at the Lower Court claimed for the following reliefs:
(a) The Sum of N2.5 Million (Two Million and Five Hundred Thousand Naira) Only being actual and anticipated loss attributable to the failure and to neglect of the defendant acting through its Sapele branch in remitting the sum of N80,000.00 (Eighty Thousand Naira) payable to Chartered Bank PLC (now merged to IBTC Chartered Bank Plc) in December, 2001 to purchase shares in the Public offer issued for the then Chattered Bank Plc now STANBIC – IBTC Bank Plc.
(b) Interest calculated at the statutory rate of not less than 10% per annum the date of the Writ until the whole judgment sum is fully paid.
(c) Cost of the action.
Briefly, the facts of the case culminating in this appeal according to the Appellant are that Chartered Bank Plc invited the public to subscribe for its shares by way of public offers. The Appellant paid the sum of N80, 000.00 (Eighty Thousand Naira) only to the Respondent as one
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of the stock brokers /banks/receiving agent named to receive application for subscription of the shares of the said Chartered Bank Plc at the Respondent’s branch in Sapele. The voucher was marked A.
Appellant did not get any indication that his application had been processed and approved to make him a shareholder of Chartered Bank Plc and went to make an inquiry with the Respondent as well as wrote a letter which was referred to at the Lower Court as Exhibit “B” requesting to know his status as a shareholder of the bank.
The Respondent directed the Appellant to direct his inquiry to the Registrar of Chartered Bank Plc which the Appellant did. Exhibit “B”, “C’ and “D” are relevant to the inquiry. When there was no positive response with the Respondent barely denying liability without showing positively how the money that was paid to the Respondent by the Appellant payable to Chartered Bank Plc or its registrar or how the money was remitted, the Appellant initiated an action at the Lower Court. At the close of trial, the Lower Court dismissed the Appellant’s claim with N25,000.00 (Twenty Five Thousand Naira) costs awarded to the Respondent. Naturally
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aggrieved, the Appellant filed a Notice Appeal dated 25th October, 2010 on eight (8) grounds, appealing against the whole decision of the Lower Court.
Subsequently, in compliance with the Rules of Court, Appellant filed a brief dated 2nd August, 2011 and filed 3rd August, 2011 and settled by Ademola Olowoyeye of Ademola Olowoyeye & Co. Four issues were formulated in the brief thus:
(a) Whether having regard to the pleadings and the state of the law, this is a matter in which a principal/agency and third party relationship of such that makes the principal liable for the act of the agent applicable.
(b) Whether the learned, trial judge having regard to the state of the pleadings and the burden of proof was right to have relied on Exhibit ?M? as enough discharge of the burden on the Respondent to discharge the obligation of having transmitted the payment made by the Appellant to the Registrar of Chartered Bank Plc.
(c) Whether having regard to the state of pleadings, the matter could not be dealt with effectively, effectually and completely in the absence of any other party-Chartered Bank, NAL Merchant Bank or any other person.
?(d) Whether the learned
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trial judge acted judicially and judiciously in the circumstances of this case and especially whether on the weight of evidence, the trial judge gave a just decision.
The Respondent filed its brief dated 12th June, 2012 but deemed 6th November, 2014. Same was settled by E. A. Adesina of E. A. Adesina & Co wherein counsel formulated the two issues for determination thus:
(i) Whether having regard to the state of pleadings and evidence of the parties in this case, the Lower Court was wrong in holding that the Respondent, as a receiving agent in the public offer by Chartered Bank Plc, is not personally liable to the Appellant in regard to the subscription for the shares of Chartered Bank Plc which were not issued in favour of the Appellant.
(ii) Whether the Lower Court was right when it held that the Appellant did not discharge the onus of proof regarding the issue of remittance of the amount paid by the Appellant to NAL Merchant Bank, the Registrar of Chartered Bank Plc in respect of the public offer.
I have carefully considered the issues formulated for the determination of the appeal and I believe that they can best be resolved together as they are interwoven.
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However, the argument of counsel on the respective issues formulated shall be addressed accordingly.
On Appellant’s issue one, Olowoyeye Esq. referred to ANYANWU v UZOWUAKA [2009] 13 NWLR (PT 1159) 445 AT 476 on the position of the law that what is admitted need no proof. It is the submission of counsel that the Statement of defence admitted the averments contained in Paragraphs 3 to 15 and 24 to 26 of the Statement of Claim as well as the depositions made thereon. He?summarized the effect of such admissions before referring to the judgment of the Lower Court, upon which he submitted that the learned trial judge seems to have relied on Paragraphs 14 and 15 of the Statement of Defence as well as Paragraph 11 of the witness statement on oath of Bangbopa Samuel?Akinola at pages 56 and 58 of the records to reach the conclusion that the Appellant, did not prove that the Defendant did not fulfill its obligation. He contended that the averments and the deposition relate to the assumption that the respondent has discharged its responsibility as it admitted to be the transactional dynamics by Paragraphs 18 of the Statement of Defence. He further submitted that the Lower
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Court ought to have made a finding that the Defendant complied with the transactional dymamic set out in Paragraph 18 of the Statement of Defence and must have seen a record showing a list of applicants and completed application forms attached and sent by the special courier to the Registrar of the offer. Counsel submitted that the Lower Court acted in error when she held that the onus of shifting responsibility or liability to the principal – Chartered Bank or NAL Merchant Bank Plc had arisen.
He submitted that the type of agency the Respondent has in the circumstance as a special one imposed by the Securities and Exchange Commission. He referred to U.B.A Plc v. OGUNDOKUN [2009] 6 NWLR [PT. 1138] 450.
On issue two, Appellant’s counsel submitted vide page 99 of the records that Exhibit “M” was admitted by the Lower Court on the ground of relevancy after the Court ruled on the objection of counsel against its admissibility. Submitting further, counsel contended that the relevance of the exhibit is doubtful having regard to the admission by the Respondent’s witness that Exhibit ?M? is a statement of internal account. He stated that the transactional
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dynamics for receiving subscription for shares is that an account will be opened for that purpose and not account showing other transactions the purpose of which may or may not be relevant or related to the subscription of shares. Counsel argued that with the obvious lapse of not having a suspense account, the Court does not have before it a list of all the applicants and the forms completed by them before it and that the Court does not have a record of payment to a courier company to convey the documents to the registrar of the offer and yet required that it is the Appellant’s responsibility to bring in NAL Merchant Bank or chartered Bank Plc.
He submitted that Exhibit M was never made available and it was a mere subterfuge to mislead the Court. He referred to Exhibit L which is the Respondent’s letter to the Appellant’s Solicitor.Counsel argued that it was the Respondent’s duty to remit the money paid through it by the Appellant to Chartered Bank Plc the basis of complaint and that without a transparent display of its obligation in respect thereof, the Respondent cannot urge the Appellant to make further inquiries
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from Chartered Bank Plc or its registrars when the discharge of that obligation had already been denied by Chartered Bank Plc Registrars. It is also the submission of counsel that the Respondent ought to feel more responsible to the discharge of its obligation and the Court should not have permitted it to go on with and that Court ought to have asked the Respondent the questions as to: (1) How did you send the document? (2) who received it? And; (3) what was the content of what was set to the registrars?; that failure on the part of the Court led to miscarriage of justice. He referred to AKAYEPE v AKAYEPE [2009] 11 NWLR (PT. 1152] 217 SC on the definition of miscarriage of justice; NWADIKE v A.S.L.G [2008] 16 NWLR (PT. 1112] 203 at 221-222.
On Appellant’s issue three, counsel referred to Paragraphs 27 of the Statement of Claim to contend that the allegations of the Appellant against the Respondent include the failure and or neglect to remit N80,000.00 (Eighty Thousand Naira) to Chartered Bank Plc – a precursor of Stanbic IBTC Bank Plc for the purpose of buying shares as well as the said failure and neglect of the Respondent resulted in damages both actual and
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or anticipated. He submitted vide Section 6(6) of the 1999 Constitution that what the Appellant approached the Lower Court for is the determination of a right or the existence or otherwise of same in the Appellant against the Respondent in the circumstance where the Respondent failed and/or neglected to remit N80, 000.00 (Eighty Thousand Naira Only) to Chartered Bank Plc for the purchase of shares. It is the further submission the issue herein is whether NAL Merchant Bank Plc or Chartered Bank Plc were necessary parties to an action which sought relief against the Respondent essentially for damages for the Respondent’s failure or neglect to remit money paid through the Respondent to Chartered Bank Plc for the purpose of the purchase of its shares. He referred to Nwadialo: Civil Procedure in Nigeria 2nd Edition page 159; ODUOLA & ORS. v GBADEBO COKER (1981) 5 SC 120; LAJUMOKE v. DOHERTY (1969) 1 NMLR 281; OKONTA v PHILLIPS (2010)12 SCNJ 343.
?He submitted that the question of whether the Respondent failed and or neglected to remit the money to then Chartered Bank for the Appellant to buy Chartered Bank Plc shares can be resolved completely and effectively
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without involving Chartered Bank Plc or NAL Merchant Bank Plc.
On his fourth issue, the Appellant complained that the Lower Court did not act judicially and judiciously in the circumstances of the case. He stated that the primary duty of a judge is to ensure that justice is done to parties before it. He referred to MOGAJI v ODOFIN (1978) 4 SC 91 at 93; ANYANWU v UZOWUAKA (SUPRA); GILBERT ONWUKA v MICHEAL EDIALA [1989] 1 NWLR(PT.96) 182 at 208; EFET v INEC [2011] 7 NWLR (PT.1247) 423 at 427; OMOREGBE v LAWANI (1980) 3-4 SC 70 at 118; AKINBOYE v ADEKO [2011] 6 NWLR (PT 1244) 415 at 448 before submitting further that by Section 16 of the Court of Appeal Act, the Court should draw inference on the evidence, albeit printed, the trial Court having lost the opportunity to do so. Responding vide its issue one, Counsel for the Respondent submitted that the issue has been settled by pleadings of the parties and that it goes beyond the point that Respondent acted as a receiving agent for the subscription to the shares of Chartered Bank Plc.
He referred to Paragraphs 2, 3 and 5 of the Statement of claim and Paragraphs 3, 5,6,10,11,13,15 and 19 of the Statement of Defence that
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Respondent was merely a receiving agent for the public offer and no more.
He referred to Section 20 Evidence Act 2011, that the Respondent is an agent of a disclosed principal is an admitted fact from the pleadings and evidences, he relied on ONYENGE v EBERE [2004] 13 NWLR (PT. 889) 20 AT 3 PARAS F – G; JIBRIL v MILITARY ADMINISTRATOR OF KWARA STATE [2007] 3 NWLR (PT.1021) 357 AT 382 PARAS A – D; CARLEN (NIG) LTD v UNIVERSITY OF JOS [1994] 1 NWLR (PT.323) 631 at 659 PARAS F-G; ESSANG v AUREOL PLASTICS LTD. (2002)17 NWLR (PT. 795) l55 at 181 -182 PARAS E – H; LEVENTIS TECH ENT v PETROJESSICA ENT. LTD [992] 2 NWLR (PT 244) 459 at 468 PARAS A-B; OSIGWE v PSPLS MANAGEMENT CONSORTIUM LTD. [2009] 3 NWLR (PT 1128) 378.
He submitted that the case UBA PLC v OGUNDOKUN [2009] 6 NWLR (Pt. 1138) 450 cited and relied upon by the Appellant is not helpful to the cause of the Appellant for reasons highlighted. He thereafter urged that the decision of the Lower Court should not be interfered with.
On its issue two, counsel for the Respondent referred to Section 131 and 132 of the Evidence Act, 2011 with respect to the law on burden of proof and that the burden in the instant case
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lies on the Appellant. He referred to BUHARI v OBASANJO [2005-3] 13 NWLR (PT 850) 587 and Paragraphs 14, 16, and 17 of the Statement ofClaim at pages 26 of the record as well as the response in Paragraphs 9, 10 and 11 of the Statement of Defence at page 56 of the record before submitting that from the state of pleadings, the burden of proving that the remittance of the subscription amount was not made by the Respondent to NAL Merchant Bank Plc rests squarely on the Appellant. He referred to ADIGHIJIE v NWAOGU [2010] 12 NWLR (PT 1209) 419 at 460; IBRAHIM v OJOMO [2004] 4 NWLR (PT 862) 89 at ll0 – 111. He also referred to evidence of CW1 at page 97 of the record that there is no such duty on a defendant to prove a negative assertion. He relied on AIYETORO COMM. TRAD. CO. LTD. v N.A.C.B [2003] 12 NWLR (PT.834) 346 at 348, paras G – H; VULCAN GASES LTD v G.F. IND. A.G. [2001] 9 NWLR (PT 719) 610 at 662, paras D – E; ALHAJI OTARU & SONS LTD. v IDRIS [1999] 6 NWLR (PT 606l) 330 at 342, paras B-D.
He submitted that Exhibit “D” is unreliable as it is unsigned and undated. He referred to PRIMATE OJO v ADEJOBI (1978) 3 SC 65; AUMAN NIG. LTD v LEVENTIS MOTORS NIG LTD
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[1990] 5 NWLR (PT 151) 458; SAMSON UMANYI NWANCHO v HON. FRANCIS NWIGBOJI ELEM & ORS. [2004] ALL FWLR (PT 225) 93; AMIZU v NZERIBE [1989] 4 NWLR (PT 118) 775 at 770; OGBAHON v REG. TRUSTEES, CCC [2002] 1 NWLR (PT.749) 675 at 704. He finally submitted that on the preponderance of evidence, the Respondent’s defence vide evidence led in support was uncontroverted by the Appellant. He urged the Court to resolve the issue against the Appellant.
RESOLUTION
The issue at stake centers on the question as to whether from the state of pleadings before the Lower Court, a principal/agency relationship existed and as such has been made out to make the principal liable for the act of the agent; whether this action cannot be effectively and completely determined and completely in the absence of any other party as well as whether the learned trial judge was right in relying on ‘Exhibit M’ in reaching his conclusion at the end of the trial?
The law remains settled beyond cited authorities that parties are bound by their pleadings and under, obligation to establish by evidence their claim or defence before the Court. See IKEANYI v A.C.B LTD [1997] 2 NWLR (PT 489) 509; OJIOGU v
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OJIOGU & ANOR [2010] 9 NWLR (PT 1198] 1; ODONIGI v OYELEKE [2001] 6 NWLR (PT 708] 12.
The Appellant/Claimant averred as per the relevant paragraphs of the Statement of Claim dated 21st July, 2008 at page 3 to 5 of the record of appeal thus:
2. “Sometimes in the year 2001 Chartered Bank Plc which was then a public Liability Company carrying on Banking Business invited members of the public to subscribe to its shares through a Public offer.
3. Of the numerous stock brokers/banks/receiving agents is the Defendant who had responsibility to receive application for shares in the Chartered Bank shares offer, and collect money from applicants.
5. In response to the offer of Chartered Bank Plc, the Claimant paid a sum of N80, 000.00 (Eighty Thousand Naira Only); on the 12th December, 2001 to the Defendant as a Bank/receiving agent to the said Chartered Bank Plc. The copy of the paying in teller will be founded upon at the trial.
8. The Claimant wrote to the Registrar Department of Chartered Bank Plc ?Corporate Diamond Security and Investments Limited a letter dated 19th of January, 2004 informing it of the purchase of Chartered Bank Plc shares in 2001 and
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requesting for the update of his account and update of his account and sending of his bonus certificate/dividend warrant. The letter will be relied upon at the trial.
9. The endorsement made on a copy of the letter to the Registrar referred to in Paragraph 8 above was that the Claimant’s name was not on the Register of members of Chartered Bank Plc and was directed to check with the Banker/stockbrokers where the shares were bought. The endorsement will be relied upon at the trial.
27. WHEREOF the Claimant claims from the Defendant the sum of N2.5M (Two Million and Five Thousand Naira Only) being actual and anticipated loss attributable to the failure and or neglect of the Defendant acting through its Sapele Branch in remitting the sum of N80, 000.00 payable to Chartered Bank Plc (now merged to IBTC Chartered Bank Plc) in December, 2001 to purchase shares in thepublic offer issued by the then Chartered Bank Plc. now STANBIC IBTC Bank Plc.Interest calculated at the rate of 15% per annum from the date of the writ until whole judgment sum is fully paid.
It is obvious from the above that the fulcrum of the Appellant’s case at the Lower Court is that the
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Respondent failed to discharge its duty as ‘receiving agent’ with respect to the attempt by the Appellant towards subscribing for the shares of a third party company – Chartered Bank Plc. This is even much more evident from the reliefs sought by the Claimant whose averments are inter alia that the failure by the Respondent in remitting the sum of N80, 000.00 (Eighty Thousand Naira) only payable to Chartered Bank Plc. resulted in the losses enumerated in Paragraphs 27 of the Statement of Claim. In proof of his claim, the Appellant/Claimant as sole witness deposed to a Witness statement on oath where he stated as follows:
2. ” Sometimes in the year 2001 Chartered Bank Plc which was then a Public Liability Company carrying on banking business invited members of the public to subscribe to its shares through a public offer.
3. Of the numerous stock brokers/banks/receiving agents is the defendant who had responsibility to receive applications for shares in the Chartered Bank shares offer, and collect money from applicants.
5. In response to the offer of Chartered Bank Plc. I paid a sum of N80, 000.00 (Eighty Thousand Naira Only) on the 12th December, 2001 to the
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defendant as a Bank/receiving agent to the said Chartered Bank. The copy of the paying in teller is herewith attached as Exhibit 1.
6. On or about 8th December, 2003 I wrote to the Manager of the Defendant at its Sapele branch complaining that I had received no notification of being a share holder of Chartered Bank as no shares certificate was issued and forwarded to me and thereby urged the said Branch Manager to the Defendant to look into the matter with a view to ensuring my status as a shareholder.The letter dated 8th December, 2003 is herewith attached and marked as Exhibit 2.
7. By a letter dated the 12th of December, 2003 the Defendant?s Branch Manager in Sapele wrote to me to still make an inquiry from the Registrar of Chartered, Bank. The letter is herewith attached and marked as Exhibit 3.
?8. I wrote to the Registrar Department of Chartered Bank Plc. – Corporate Diamond Security and Investments Limited a letter dated the 19th of January, 2004 informing it of the purchase of Chartered Bank Plc.’s shares in 2001 and requesting for the update of my account and sending of my bonus certificate/dividends warrants. The copy of the letter I wrote is
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attached as Exhibit 4.
9. The endorsement made on a copy of the letter to the Registrar referred to in Paragraph (8) above Exhibit 4 was that my name was not on the Register of Members of the Chartered Bank Plc. and was directed to check with the Bankers/Stockbrokers where the shares were brought.
10. I wrote another letter dated the 20th of April, 2004 to the defendants Sapele Branch Manager intimating it of the efforts made to confirm my membership as a share holder of Chartered Bank Plc. and observed that the defendant acting through its Sapele Branch did not conclude the transaction the Claimant initiated with Chartered Bank Plc.The copy of the letter is herewith attached and marked as Exhibit 5.?
In its own defence against the claim of the Appellant/Claimant, Respondent/Defendant vide its Statement of Defence found at pages 55 – 57 of the record averred:
2. “The Defendant admits that the Claimant subscribed to the public offer of the defunct Chartered Bank Plc on 12th December, 2001.
3. The Defendant admits that through her Sapele Main Branch it collected money for the offer from the claimant as a receiving agent to the said Chartered Bank Plc.
?5. The
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Defendant admits receipt of the letters of 19th January, 2014 and 20th April 2004 but deny vehemently the assertion in Paragraph 10 of the Statement of Claim that it did not conclude the transaction initiated by the Claimant with Chartered Bank Plc as the Defendant concluded her own part of the transaction by remitting to the Registrar the offer subscribed to by the Claimant.
8. The Defendant admits Paragraph 13 of the Statement of Claim and states further that the Defendant upon payment for subscribed shares remitted all the monies to the Registrar of Chartered Bank Ltd as is the practice in the industry.
11. The Defendant in response to Paragraph 17 of the Statement of Claim avers that remittance does not go to the Bank in offer, but to the Registrar – NAL Merchant Bank to whom Defendant had made appropriate and adequate remittance of all subscribed monies including the Claimant?s herein.
15. The Defendant in further answer to Paragraph 23 of the Statement of Claim averthat it is completely absolved from any loss or inconvenience that the Claimant may have had, having satisfied and discharged her contractual and statutory obligation as a collecting
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agent/bank.
18. The Defendant avers further that the procedure for acting in a public offer is as follows:
i. The customer walks into the bank and fills the shares application form.
ii. Upon completion, entries are raised for the payment which could either be in Cash or cheque
iii. A suspense account is then credited for the payment.
iv. The completed form is kept until the closing date of the offer.
v. On the closing date of the offer, a bank draft is raised for the total amount purchased by debiting the suspense account and a draft issued in favour of the Registrar of the company whose share is on sale.
vi. A list of all the applicants is made and the completed application forms attached and sent by special courier to the Registrar of the offer.
19. The Defendant avers that it has followed all the steps mentioned above and is not in any way liable to the claim of the Claimants as contained in Paragraph 27 of the statement of claim.?
In the witness statement on oath of Dw1 dated 5th November, 2008 at pages 58 to 59, the witness stated:
?6. ?That the Claimant through the Defendant Branch in Warri subscribed to the Public Offer defunct of the Chartered Bank
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Plc. On 12th December, 2001.
7. That through the Sapele Branch the defendant acted as collecting agent for the offer.
8. That the Defendant upon completion of the form and payment by the claimant raised a bank draft in favour of the Registrar of the bank – Chartered Bank Limited along with the list of all the applicants including the claimant and sent by special courier to the Registrar NAL Merchant Bank.
9. That the defendant as a receiving agent was not negligent in any way as all necessary steps were taken to ensure that it discharged all contractual and statutory duties by making due remittance of Chartered Bank at the close of the initial Public Offer.
10. That our work as a receiving agent ends with remittance and list of all the applicant being sent to the Registrar NAL Merchant Bank.
11. That we are not responsible for all the loss being claimed by the claimant.
12. That to the best of our ability as Receiving agent we have discharged our contractual obligations duties towards the claimant without any negligence.
13. That the Claimant has not been able to establish any wrong against the Defendant either by way of commission or omission.?
?Indeed, the
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role in the transaction between the parties to this appeal is undisputed. The Appellant’s evidence that the Respondent acted as receiving agent with respect to the sale of shares of Chartered Bank Plc was expressly admitted by the Respondent.Therefore, I need not belabor that issue. The point of dispute arising under the instant issue is whether, from the facts and circumstances of the instant case, the Respondent failed to discharge its duty as a receiving agent?
From the above reproduced pleadings and testimonies before the Lower Court, while the Appellant gave evidence that he had made several efforts towards ascertaining his status as a shareholder of Chartered Bank Plc, the basis of which he made payment to the Respondent as receiving agent of the Bank’s public offer of shares.The Appellant showed that he did not receive any acknowledgment from the Chartered Bank/or Registrar as to this transaction done vide the Respondent. It was on this basis that he began an enquiry from the place where the payment for the subscription of the shares was made, that is, First Bank, Sapele Branch. This led to exchange of correspondence between the Appellant and the Manager
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of the Sapele Branch of the Respondent’s Branch who directed him to the Registrar – Corporate Diamond Security Investment Limited. By a letter dated 20th April, 2004, the Appellant wrote back to the Manager of the Respondent, Sapele Branch intimating him of the enquiry done from Corporate Diamond Security Investment Limited.In its defence, the Respondent admitted to receiving the sum of N80, 000.00 (Eighty Thousand Naira) Only from the Appellant as receiving agent of the sale of shares of Chartered Bank Plc. The Respondent stated that it performed its duty under the arrangement by remitting the shares to NAL Merchant Bank, the Registrar to Chartered Bank Plc at the time of the offer.
Now, I must say that it is not the business of this Court, as an Appellate Court, to interfere with the findings of fact or to substitute its view of the evidence for that of the learned trial judge unless such finding is perverse or does not accord with the evidence led by the parties. This principle has been emphasized by the Apex Court in several decisions. See: OLABANJI v. OMOKEWU (1992) LPELR -2541 SC; MBACHU v ANAMBRA-IMO RIVER BASIN DEVELOPMENT AUTHORITY, OWERRI [2006] 14
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NWLR (PT 1000) 691; AMADI v OSAKWE & ORS [2005] 7 NWLR (PT 924) 385.
At page 132 to 133 of the record of appeal, the learned trial judge held:
“I have read the Statement of Defence of the Defendant and it is my observation that the Defendant raised the issue of agency in Paragraph 3 when it stated, that it collected money for the offer from the Claimant as a receiving agent to the to the said Chartered Bank Plc. Also in Paragraph 14 and 15 (ii) the Defendant pleaded that the Defendant is unaware of the mathematical claim by the Claimant having discharged her statutory and contractual duty as a collecting agent/bank.
Thus the Defendant from inception as raised the defense that it was only a receiving agent of Chartered Bank and cannot be held responsible for any loss orinconvenience that the Claimant may have suffered. In the light of the foregoing it is my humble view that the onus is on the Claimant that the Defendant did not fulfill its obligations as a receiving agent and that not the principal Chartered Bank Plc is liable for any loss he suffered.
By virtue of Section 135 and Section 136 of the Evidence Act, in civil cases the ultimate burden of
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establishing a case is a disclosed in the pleadings. The person who would lose the case if on completion of pleadings and no evidence is led has the general burden of proof. Therefore it is my humble view that in this case the burden is on the Claimant, it cannot shift to the Defendant.
It is also my view that the Claimant having read the pleadings of Defendant ought to have joined Chartered Bank Plc and its Registrars NAL Merchant Bank.The Defendant by Exhibit M had indicated that it deposited N92, 000.00 in the account of NAL Merchant Bank which included the N80, 000.00 deposited by the Claimant Bank…”
Can it be said that the learned trial judge was correct in his finding of fact having regard to the fact and circumstances of the case and the evidence before it. I believe that a careful perusal of the defence put forward by the Respondent reveals that there are several riddles that remained unsolved with respect to the money the Appellant paid to the Respondent as per the purchase of shares in Chartered Bank Plc. As it has been noted earlier, there is no dispute that the Respondent received the sum alleged from the Appellant. The Respondent gave evidence
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vide ?Exhibit M? relied upon by the trial Court that it indeed paid the money over to NAL Merchant Bank, the Registrar of Chartered Bank Plc. at the relevant time.
I am conscious of the provision of Section 131 of the Evidence Act, 2011 that the burden of proof is on the person who desires that judgment be given in his favour by the Court as to the existent of facts which he asserts. This in essence means, that the burden of proving that the Respondent did not indeed remit the money paid to it by the Appellant to the appropriate company rests on the Appellant as Plaintiff at the Lower Court. The Appellant indeed tendered in evidence the teller with respect to the payment he made, the receipt of payment by the Respondent and other correspondence between it and the Respondent as well as the Registrar of Chartered Bank Plc. Of great relevance is Exhibit D, which is Appellant’s Letter of 19th January, 2004, addressed to Corporate Diamond Security and Investment Limited, the Registrar to Chartered Bank Plc which was received by the latter on the 4th February, 2004 wherein certain words were inscribed thereon thus:”Name not in Register of Members. please
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check in Banker/Stockbroker where u (sic) brought it from. Also, in evidence is the Appellant’s letter of 20th April, 2004. The last paragraph of the letter at page 15 of the record is instructive in this regard. It states:
from the Registrar’s reply in (iv) above that my name is not their Register and directing me back to your Bank, I am forced, to conclude that your Bank did not conclude the transaction between me and Chartered Bank. I strongly urge you to speedily take all the necessary action to ensure I get all the reliefs sought in my letter of 8th December, 2003 to you please.
Section 133(2) of the Evidence Act provides:
“if the party referred to in Sub-Section (l) of this section adduces evidence which ought reasonably to satisfy the Court that the fact sought to be proved is established, the burden lies on the party against whom judgment would be given if no more evidence were adduced, and so on successively until all the issues in the pleadings have been dealt with.
Section 134 states:
The burden of proof shall be discharged, on the balance of probabilities in civil proceedings.”
Section 136 is to the effect:
“The
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burden of proof as to any particular fact lies on that person who wishes the Court, to believe in its existence unless it is provided by any law that the proof of that fact shall lie on any particular person, but the burden may in the cause of a case be shifted from one side to the other.
From the foregoing, I believe the Appellant has put forward material facts as to the non-remittance of the money he paid to the Respondent to Chartered Bank Plc as per the purchase of the latter’s shares. This therefore warranted a rebuttal from the Respondent as the burden shifted on it.
The Respondent has testified through its sole witness that it was licensed and authorized to receive application for subscription by Securities and Exchange Commission. It must therefore be shown that indeed the Respondent discharged its obligation required of it under the license given to it as a receiving agent. The Learned Author, Prof. J. O Abugu, Companies Securities: Law and Practice , 2nd Edition, Lagos: MIJ Professional Publishers Limited,2014, 183 noted thus:
“Various banks are appointed to distribute and receive applications of subscribers to the equity. The Registrar
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distributes the application forms to the receiving banks.They are usually chosen, for their wide network of branches to ensure that different parts of the country are given the opportunity to participate in the issue exercise. They collate the received applications forms and transfer the monies received from subscribers to the issuing house. These banks do not generally take responsibility for any part of the offer other than their roles as receiving agents. In that capacity, they have a duty to receive applications and monies and ensure that these are promptly and properly transmitted to the issuing house.? (Underlining mine).
While I acknowledge that it is not the duty of the Respondent as receiving agent to ensure that the Appellant is made a member of the company with respect to which he paid for the shares, I must however be quick to reiterate that, the reliefs sought by the Appellant relates strictly within the bounden duty of the Respondent as receiving agent. As the learned author rightly noted, it is the duty of the Respondent, as receiving agent herein, to ‘ensure that the payment made to it are promptly and properly transmitted to the Issuing
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House’. A fortiori, the Respondent had indeed expressly processes involved in transactions relating to sale of public shares. These are outlined in Paragraph 18 of the Statement of Defence filed by the Respondent. It states thus:
i. The customer walks into the bank and fills the shares application form.
ii. Upon completion, entries are raised for the payment which could either be in Cash or cheque.
iii. A suspense account is then credited for the payment.
iv. The completed form is kept until the closing date of the offer.
v. On the closing date of the offer, a bank draft is raised for the total amount purchased by debiting the suspense account and a draft issued in favour of the Registrar of the company whose share is on sale.
vi. A list of all the applicants is made and the completed application forms attached and sent by special courier to the Registrar of the offer.
The question then is whether, the Respondent was able to establish by evidence that it indeed complied with the above processes in ensuring that the money paid to it by the Appellant gets to its final destination. A careful perusal of the evidence on record led at the Lower Court reveals that (iii) to
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(iv) above was not fulfilled. The Learned trial judge relied on ‘Exhibit M’ to hold that the Respondent had discharged the burden placed on him. I am inclined to agree to the contrary. Firstly, the entry being referred to in Exhibit M shows that the sum of N92, 000.00 was deposited by the Respondent on 20 / 12 /2001 into the account of NAL Merchant Bank as against the sum of N80, 000.00 paid by the Appellant. Although the Respondent explained that the sum represent the money paid by the Appellant and one other subscriber, there is virtually no other evidence on record showing that the money paid to NAL Merchant Bank included the Appellant’s money. The Appellant’s name was not indicated on the said ‘Exhibit M’ which is a statement of internal account of Respondent. During the cross examination of DWl, the Respondent’s sole witness stated at pages 99 to 100 thus:
“The list of all the applicants for Chartered Bank shares is not here. Exhibit ?M? is the statement of our internal account. The entry of 20th December, 2001 of the statement is what I want the Court to consider…The names of the two subscribers were written at the back of the draft and a
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letter was written to accompany the draft to NAL Merchant Bank. We cannot have a customer’s name on Exhibit ?M? because it concerns sums issued by a payee. The Claimant is not the beneficiary. Chief Vowa’s name and the other subscribers name were written on the back of the draft. Chief Vowa’s name is not on any of the documents presented here. In the matter we acted as banker and receiving agent…We collect and remit. Our responsibility ends there….”
Apparently, the Respondent was unable to show ipso facto the money paid to it by the Appellant was transmitted to the Registrar of the company offering the shares for sale. Indeed, as the Respondent’s witness admitted the name of the Appellant is not indicated on any of the documents presented before the Court. I am therefore of the firm view that the learned trial judge erred when he held that the Respondent discharged its obligation under the transaction with respect to the sale of the shares of Chartered Bank Plc, particularly as it affects the Appellant.
Notwithstanding the foregoing, it is argued before this Court by the Respondent that the Lower Court was right to have held that Chartered Bank Plc
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and NAL Merchant Bank ought to have been joined as a party to the suit as they are necessary to effectively determine the matter before the Lower Court.
It is instructive to note that the essence of making a person natural or artificial, a party to a suit or action is to make him to be bound by the decision of the Court. The determining factor is whether the Appellant sought any reliefs against those he failed to join as parties. The Appellant could not therefore be forced to join a party or Parties whose presence was not necessary for the effectual determination of the reliefs sought and the issues in dispute. See OBIGWE v PSPLS [2009] 2 NWLR (PT 1128) 378 SC; P.C.H.S.C. LTD v MIGFO (NIG) LTD [2009] 11 NWLR (PT 11531) 611 CA.
A fortiori, it is trite law that a Plaintiffs action cannot be defeated merely on the basis of non-joinder of party. Order 13 Rule 16(1) of the High Court of Lagos State (Civil Procedure Rules), 2004 states:
“No proceedings shall be defeated by reason of misjoinder or non joinder of parties, and a Judge may deal with the matter in controversy so far as regards the right and interest of the party actually before him.”
See F.B.N PLC v OZOKWERE
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[2014] 3 NWLR (PT 1395] 439; F.G.N v SHOBU (NIG) LTD [2014] 4 NWLR (PT 1396) 45.
Meanwhile, the Respondent conceded that he was licensed and authorized by the Securities and Exchange Commission to act as the Banker/Receiving Agent with respect to the sale of public shares. The circumstance of this case as per the role of the Respondent inter alia involves the collection of application forms, register, and in the end, transmits the list of applicants to the Issuing house. The Respondent in this respect is licensed to act as an intermediary in a loose arrangement that does not involve any supervision from the Issuing Company Chartered Bank Plc. Perhaps, the status of the Respondent as receiving agent is sui generis and transcends beyond the relationship of that of an ordinary agent and a disclosed principal. I believe the case of UBA Plc v OGUNDOKUN (supra) is apt in this regard, where ADEKEYE, JCA relying on ASAFA FOODS FACTORY v ALRAINE NIG. LTD [2002] 12 NWLR (PT 781) 353 noted:
It is not the law that, if a principal is liable, his agent cannot be. The true principle of the law is that a person is liable for his engagements (as for his torts) even though
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he is acting for another, unless he can show that by the law of agency, he is to be held to have expressly or impliedly negatived his personal liability.”
Therefore, I cannot agree that the Respondent acted on behalf of the Chartered Bank Plc. From its own evidence before the Lower Court, it acted more as an independent contractor. See ISC SERVICES LTD v GENAK CONTINENTAL LTD & ANOR [2006] 6 NWLR (PT. 977] 481; NA’ALLAH v GOMBE (2014) LPELR – 23452.
The Respondent has not denied receipt of the payment made to it by the Appellant, though it stated that it had remitted same appropriately. This is what it has to show and has tailed as such.Therefore, I do not see the necessity of joining any other parties in this case as the Appellant’s case is solely on failure of the Respondent to remit the money he had paid to it to the appropriate body. The principal relief is clear, it does not relates to breach of allotment of shares but for non-remittance of payment made for subscription of shares.
The issue here is not the delivery of shares but whether what was sent to the Registrars contained details of the Appellant and the amount of his subscription. This was not
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proved. Therefore, the Lower Court jumped the gun in the absence of this evidence. I believe both Chartered Bank Plc and NAL Merchant Bank are not necessary parties to effectively and completely determine the case. In BABAYEJU & ANOR v ASHAMU & ANOR [1998] 9 NWLR (PT.567) 546, the Court held:
…the only reason which makes it necessary to make a person a party to an action is that he should be bound by the result of the action, and the question to be settled therefore must be a question in the action which cannot be effectually and completely settled unless he is a party.
In the present circumstance, I disagree that the banks are necessary parties; the relief is clearly against the Respondent for non-remittance and no more.In the light of the above, I resolve all the issues in favour of the Appellant.
On the whole, this appeal has merit and is hereby allowed. The judgment of the Lower Court, Coram TAIWO J. of the Lagos State High Court, is hereby set aside. In its stead, the Appellant is awarded the sum of N2 Million (Two Million Naira) only being actual and anticipated loss attributable to the failure and/or neglect of the Respondent in
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remitting, the money paid to it by the Appellant to Chartered Bank Plc. Interest assessed at 15% per annum from the date of the judgment was entered at these Lower Court until the whole judgment sum is fully paid. Cost of N50,000.00 is awarded to the Appellant.
Other Citations: (2016)LCN/8652(CA)
