Zakhem Oil Serve Limited V. Art-in-science Ltd (2009)
LawGlobal-Hub Lead Judgment Report
KUDIRAT MOTONMORI OLATOKUNBO KEKERE-EKUN, JCA
This is an appeal against the judgment of the High Court of Rivers State, holden at Port Harcourt, delivered on 10th December 2007 entering judgment in favour of the respondent herein. By a writ of summons dated 10/9/07, the respondent herein, as claimant, sought the following reliefs against the appellant, as defendant:
1. The sum of N6, 562, 500.00 (Six Million Five Hundred and Sixty-Two Thousand Five Hundred Naira) being the cost of pipes supplied to the defendant under a contract and which cost has not been liquidated by the Claimant.
2. Interest thereon at the rate of 10% per month from the 12th of May 2007 until judgment is given and thereafter, interest at the rate of 10% until total liquidation of the debt.
The writ was supported by an affidavit with exhibits attached thereto.
The respondent sought and obtained leave to issue the writ and enter it under the undefended list. Upon being served with the writ, the appellant entered a conditional appearance to the suit and filed a notice of intention to defend with a supporting affidavit. The appellant also filed a motion on notice challenging the jurisdiction of the court to entertain the suit but withdrew it on 10/12/07 when the matter came up for hearing. On the same day, learned counsel for the respondent withdrew the claim for VAT as reflected in Exhibit C attached to the supporting affidavit, which the appellant had objected to in its affidavit in support of its notice of intention to defend, and urged the court to enter judgment in the respondent’s favour. After considering the affidavit evidence before him and the submissions of learned counsel, the learned trial Judge entered judgment in favour of the respondent as follows at pages 37 – 38 of the record:
“Now that the claimant has discontinued with the claim to VAT, I find that what shall remain in Exhibit C is only the contract sum of N6,250,000.00 for which the claimant asked the court to enter judgment in its favour. In the circumstance I hold that the issue of VAT no longer constitutes a triable issue for which this suit may be transferred to the general cause list for trial. … In the circumstance, pursuant to Order 11 Rule 11, I merely enter judgment in this suit in favour of the claimant in the sum of N6,250,000.00 being the amount of pipes the claimant supplied to the defendant which sum the defendant has failed or neglected to pay. I refuse the 10% per annum post-judgment (sic) interest on the said sum as claimed because there is no express or implied custom or trade which enjoins the defendant to pay such interest in respect of the contract between the parties. I grant the payment of interest of 10% per annum on the judgment debt from the date of this judgment until the liquidation of the judgment debt in accordance with the Rules of this court. I therefore order accordingly.”
(Underlining mine)
The appellant was dissatisfied with this decision and filed a notice of appeal containing three grounds of appeal.
The parties, in compliance with the rules of this court duly filed and exchanged briefs of argument. In the appellant’s brief filed on 25/2/08, two issues were formulated for the determination of the appeal thus:
1. Whether the learned trial Judge has jurisdiction to place the suit under the undefended list and deliver judgment thereafter. (Ground 1 of the notice of appeal)
2. Whether the learned trial Judge was right when he delivered judgment under the undefended list without transferring the suit to the general cause list (Grounds 2 & 3 of the notice of appeal) The respondent, in its brief of argument filed on 24/4/08 adopted the two issues formulated by the appellant At the hearing of the appeal on 17th February 2008, the appellant, although duly served with hearing notice against that date, was absent and unrepresented by counsel. However, having filed a brief of argument, it was deemed to have argued the appeal pursuant to Order 17 Rule g (4) of the Court of Appeal Rules 2007. V.I. Oguafor Esq., learned counsel for the respondent adopted the respondent’s brief and urged us to dismiss the appeal and affirm the judgment of the trial court.
I have critically examined the grounds of appeal and the issues formulated therefrom. The law is settled that a ground of appeal must relate to the decision appealed against and must be a challenge to the validity of the ratio of that decision. See: Egbe v. Alhaji & Ors. (1990) 1 NSCC (Vol. 21) (Part 1) 306 @ 332 lines 39 – 44: Dalek Nig. Ltd. v. Ompadec (2007) All FWLR (364) 204 @ 226 F- H. A ground of appeal that does not arise from the judgment appealed against and any issue formulated thereon is incompetent and liable to be struck out
Ground 1 of the notice of appeal at pages 40 – 41 of the record reads thus:
GROUND ONE: ERROR OF LAW AND FACTS
The learned trial Judge at the Court below with due respect erred in law and facts when he assumed jurisdiction, proceeded, placed the suit under the undefended list and delivered judgment without considering the fact that claimant’s claim as indorsed on the writ of summons and affidavit in support is incompetent.
PARTICULARS
a. The claimant’s relief of 10% interest from the month of May 2007 till judgment is delivered is pre-judgment interest claim which requires hearing evidence by the learned trial Judge.
b. That once there is a relief claiming pre-judgment interest in the writ of summons, the claim is no longer a liquidated sum, which can be heard under the undefended list procedure.
c. That claimant’s affidavit in support of his claim does not disclose any monetary claim against the defendant.
In its motion on notice dated 4/12/07 and filed on 6/12/07 at pages 25 – 26 of the record the appellant/applicant sought the following reliefs:
1. That this suit be struck out on the grounds that this court lacks jurisdiction to hear and determine this suit.
OR IN THE ALTERNATIVE
2. That this suit was wrongfully, with due respect, placed under undefended list by this Honourable Court.
PARTICULARS
a. That the claimant’s affidavit in support of his claim does not disclose any claim or reliefs against the defendant.
b. That the claimant’s writ of summons discloses a pre-judgment interest-claim against the defendant, thus the claimant’s claim is not a claim based on liquidated sum.
A careful examination of the supporting affidavit shows that the main complaint of the appellant was that the ex-parte application for leave to place the suit under the undefended list ought not to have been granted. The question that arises is whether the decision to place a suit on the undefended list is an issue of jurisdiction or a complaint against the exercise of discretion. When an application for leave to issue a writ and enter a suit on the undefended list comes before the court, the court would critically examine the writ of summons, supporting affidavit and exhibits attached thereto and decide whether prima facie facts have been disclosed to warrant the order being made. Whether the suit would eventually be determined on the undefended list, is not a consideration at that stage. It was held in: Kabiru v. Ibrahim (2004) 2 NWLR (857) 326 @ 345 – 346 H – C that the decision as to whether the plaintiffs action is appropriate for summary trial is within the discretion of the trial court. A wrong exercise of such discretion would not affect the jurisdiction of the court to entertain the suit. It is pertinent to note that at the hearing of the suit, the appellant withdrew its motion and elected to proceed with the hearing on the basis that the notice of intention to defend disclosed a defence on the merit. At page 7 paragraphs 4.12 and 4.13 of the appellant’s brief it is contended that notwithstanding the fact that learned counsel withdrew the motion, the competence of the Suit being an issue of jurisdiction could be raised at any stage of the proceedings and even on appeal to the Supreme Court. It is my respectful view that the issue raised in the appellant’s motion was not an issue of jurisdiction that could therefore be raised at any stage of the proceedings, with or without leave. Having withdrawn the said application and elected to proceed on the basis that the appellant had disclosed a defence on the merit, it cannot be said that ground 1 of the notice’ of appeal arises from the judgment appealed against. The learned trial Judge did not make any finding on the issues canvassed in ground 1 of the notice of appeal. Indeed in the course of the judgment the learned trial Judge rejected the claim for pre-judgment interest. It is therefore not a live issue for consideration in this appeal. I therefore hold that ground 1 of the notice of appeal and issue 1 formulated therefrom are incompetent and accordingly struck out.
In light of my finding above, the only issue for determination in this appeal is the appellant’s second issue, to wit:
Whether the learned trial Judge was right when he delivered judgment under the undefended list without transferring the suit to the general cause list.
In support of the sale issue for determination, learned counsel for the appellant referred to the proceedings of 10/12/07 when learned counsel for the respondent urged the court to enter judgment in the respondent’s favour less the sum of N312, 500.00 claimed as VAT. He argued that learned counsel for the respondent, not being the deponent to the affidavit in which the amount was claimed, was not competent to amend the said affidavit orally. He referred to Section 85 of the Evidence Act Cap E14 Laws of the Federation of Nigeria (LFN) 2004 and the case of C & C Ltd. v. Altimate Inv. Ltd. (2004) 2 NWLR (857) 274 @ 294 A – C. He submitted that by permitting the respondent’s counsel to withdraw the claim for VAT the learned trial Judge shut the door to a possible defence available to the appellant and thereby breached the rules of natural justice. He submitted that the payment of VAT was one of the terms of the contract between the parties as contained in Exhibit C.
He submitted that parties are bound by the terms of their contract. He relied on: Oilsery Ltd. v. L.A.I. & Co. Nig. Ltd. (2008) 2 NWLR (1070) 191 @ 204 F-H.
Learned counsel submitted that the appellant had challenged the payment of VAT in paragraphs 6, 13 & 14 of the affidavit in support of the notice of intention to defend. He observed that Exhibit C attached to the respondent’s affidavit containing the claim for VAT was signed by officers of the respondent and that learned counsel could therefore not seek to amend it orally. He argued further that the payment of VAT is a statutory obligation. He submitted that Sections 5 (1). (a), 1.5 (1), 16 (1),18 & 19 of the Value Added. Tax Act Cap V1 LFN 2004 is applicable to the respondent. He contended that the sum of N312, 500.00 claimed as VAT is accruable to the Federal Inland Revenue Services (FIRS) and therefore neither the respondent nor the court could withdraw or permit the withdrawal of the said VAT.
He submitted that paragraphs 3 – 6 and 8 – 11 of the affidavit in support of the notice of intention to defend disclosed triable issues that warranted the suit being transferred to the general cause list. On what amounts to a triable issue or a defence on the merit he relied on:
Sanyaolu v. Adekunle (2006) 7 NWLR (980) 551 @ 565 – 566 G – A; Ataguba & Co, v. Gura Nig, Ltd, (2005) 8 NWLR (927) 429 @ 456 – 457 H – C, He urged us to resolve this issue in the appellant’s favour.
In response to the submissions of learned counsel for the appellant, learned counsel for the respondent submitted that the issue of VAT was not a term of tile contract between the parties. He referred to the L.P.O, Exhibit A He also submitted that the only triable issue disclosed in the defendant’s affidavit was the claim for VAT. That having withdrawn it there was no other triable issue before the court, as the appellant did not deny the claim for N6, 250, 000,00, He submitted that a defendant who has no real defence to an action should not be allowed to dribble and frustrate a claimant out of the judgment he is legitimately entitled to by employing delay tactics in order to gain time and postpone his obligations and indebtedness, He referred to: Jipreze v. Okonkwo (1987) 3 NWLR (62) 734 @ 744, He referred to paragraphs 7 – 14 of the appellant’s affidavit and submitted that the averments therein are an afterthought He submitted that the appellant did not produce any evidence, in face of the clear facts stated in Exhibit A, to substantiate the appellant’s contention that execution of the contract and payment therefore was contingent upon the appellant retailing the Bonny Tank Rehabilitation Contract On the authority of Obi Vs H,M, Commercial Bank Ltd, (2001) 2 NWLR (696) 114 @ 116, he submitted that the learned trial Judge properly entered judgment in favour of the respondent under the undefended list He urged us to resolve this issue against the appellant.
Order 11 Rules 8 (1) & (2), 10(1) and 11 of the Rivers State High Court (Civil Procedure) Rules 2006 provide:
8 (1) “Where a claimant in respect of a claim to recover a debt or liquidated money demand believes that there is no defence to his claim, he shall make an application to a court for the issue of a writ of summons in respect of the claim to recover such debt or liquidated money demand and shall support the application by an affidavit setting forth the grounds upon which the claim is based and stating that in his belief there was no defence thereto.
(2) The Court shall, if satisfied that there are good grounds for believing that there is no defence thereto, enter the suit for hearing in what shall be called “Undefended List”, and mark the writ of summons accordingly, and enter thereon a date for hearing suitable to the circumstances of the particular case.
10) (1) 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 disclosing at defence on the merit, the Court may give him leave to defend upon such terms as the Court may think just.
(11) Where any defendant neglects to deliver the notice of defence and affidavit prescribed by Rule 10(1) or is not given leave to defend by the Court, the suit shall be heard as an undefended suit, and judgment given thereon, without calling upon the claimant to prove his case formally”
The undefended list procedure, as held by the Supreme Court in: U.B.A. Plc. v. Jargaba (2007) 11 NWLR (1045) 247 @ 270 F – G, is designed to relieve the courts of the rigour of pleadings and the burden of hearing tedious evidence on sham defences mounted by defendants who have no defence and are just determined to dribble and cheat claimants out of reliefs they are normally entitled to, See also: Planwell Watershed Ltd. v. Ogala (2003) 18 NWLR (852) 478. Specifically the procedure is to facilitate the speedy dispatch of certain types of cases involving debts or liquidated money demands where there is no genuine defence on the merits to the, plaintiffs claim. See: Agwuneme v. Eze, (1990) 3 NWLR (137) 242: I.B.W.A. Ltd. v. Unakalamba (1998) 9 NWLR (565) 245; Co-Operative & Commerce International Bank (Nig.) Plc. v. Samuelln v. Co. Ltd. (2000) 4 NWLR (651) 19.
Bearing the above principles in mind, the first issue to consider is whether a party is entitled to withdraw any part of his claim at the hearing of a suit under the undefended list. In paragraphs 3 – 6, 13 & 14 of the affidavit in support of the notice of intention to defend, particularly paragraph 6 thereof, the appellant challenged the claim for VAT on the ground that the respondent is not entitled to claim the amount, as it was not registered with the Federal Inland Revenue Service (FIRS) and also that it had not obtained a certificate from the FIRS to collect VAT. It is also averred that any VAT due is payable to the FIRS and not to the respondent. Exhibit C attached to the respondent’s affidavit in support of the writ of summons is an invoice for a specification of metal pipes at the rate of N1, 250, 000,00 each at a total cost of N6, 250, 000,00, The invoice is predicated on Exhibit B, LPG no 06312, Also included in Exhibit C is a VAT charge of 5% amounting to N312, 000.00 bringing the grand total to N6, 562, 500.00. The principal amount claimed on the writ is N6, 250, 000.00 representing the actual cost of the pipes supplied to the appellant. Exhibit B is the delivery note confirming delivery of the pipes to the appellant.
In paragraphs 3 – 6 of the affidavit in support of the notice of intention to defend, what is being contended is that the respondent is not entitled to claim VAT from the appellant, as any VAT payable is due to the FIRS.
There is no doubt that had the respondent insisted on pursuing the claim for VAT, the propriety of the claim against the appellant and whether the legal preconditions for such a claim had been satisfied, would have constituted triable issues to warrant the transfer of the suit for trial on the general cause list. However, in the course of addressing the court, learned counsel for the respondent, perhaps conceding the merit of the appellant’s position, exercised his discretion to withdraw that aspect of the claim. The Supreme Court, in Vulcan Gases v. Gesellschaft Fur Industries Gasverwertung A.G. (G.I.V.) (2001) 5 SCNJ 55 @ 84, held that the general principle of law is that at the trial of an action, the authority of counsel extends, when it is not expressly limited, to the whole of the court action and all matters incidental to it and to the conduct of the trial. In the absence of any evidence of limitation of the counsel’s authority, which in any event would come from the respondent and not the appellant, I am of the view that the learned trial Judge was correct when he permitted the withdrawal of the claim for VAT. Placing the suit on the undefended list for the sake of allowing a challenge to the claim for VAT, which the respondent had indicated it no longer intended to pursue, would have been the antithesis of principles underlying the undefended list procedure.
In paragraphs 7 – 12 of the appellant’s affidavit it is averred that the appellant issued the LPG, Exhibit A on the understanding that it was contingent upon the appellant’s retention of the Bonny Tank Rehabilitation project at Bonny. That when the Shell Petroleum Development Company (SPDC) did not renew the contract, it (appellant) informed the respondent of the situation and cancelled Exhibit A. That pursuant to meetings held between the parties the respondent agreed to take back the pipes already delivered and to bear the cost of transportation and other miscellaneous expenses that might be incurred with respect thereto. It was averred that as SPDC did not renew the contract, the appellant’s management did not confirm Exhibit A for payment. After giving careful consideration to the aforesaid averments the learned trial Judge held at page 38 of the record:
“The defendant also deposed in paragraph 2 of the affidavit that the LPO it issued the claimant for the supply of the pipes was subject ‘to confirmation and acceptance.
However, I discovered from Exhibit B that the pipes for which the claimants claimed were duly delivered and received by one Chukwudi, O. on behalf of the defendants who duly signed the Delivery Note (Exhibit B). There being evidence prima facie of the delivery and acceptance of the goods, I do not consider the issue of confirmation of the LPO as a triable issue in the absence of any contrary evidence disclosed in the affidavit. If the defendants have taken delivery of the pipes unconditionally they are bound to pay for them. The facts disclosed in paragraphs 7 – 10 of the affidavit that the defendant cancelled the LPO for the reason given and that the claimant agreed to take back the pipes already supplied and sought for buyers as the defendant no longer needs those pipes is in my ‘opinion’ not sufficient I to deprive the claimant of the cost of purchase of the pipes in the absence of any concrete evidence that it took back the said pipes from the claimant.
In fact the deposition in paragraph 19 that the defendant was to assist the claimant financially by offsetting some of the minor expenses that the claimant shall incur in having back the said pipes is supportive of the fact that the defendants actually took delivery of the pipes. In sum I am satisfied that the entire depositions in the affidavit of the defendant raises no triable issue for which this court may grant leave to it to defend the action.”
(Underlining mine)
Under the undefended list procedure the defendant’s affidavit must “condescend upon particulars”, It must disclose facts, which would at least throw some doubt on the claimant’s case or require some explanation from him. See: U.S.A. v. Jargaba (supra) @ 270 C _ D & 273 F – G; U.S.A. Plc. v. Mode Nigeria Ltd. (2001) 13 NWLR (730) 335; Jipreze v. Okonkwo (supra). Having considered all the averments in the appellant’s affidavit in support of its notice of intention to defend, I am of the view that the reasoning and conclusion of the learned trial Judge reproduced above cannot be faulted. The appellant contended that there was a precondition to the contract. There is nothing in Exhibit A to suggest that the contract was contingent upon any condition. It clearly states that payment shall be made 45 days after confirmation and delivery. Exhibit B is evidence of acceptance and delivery. The appellant did not dispute the cost of the pipes as stated in Exhibit C, There was no exhibit attached to the affidavit to substantiate any of the assertions regarding the alleged agreement for the return of the pipes. In other words the defence put up by the appellant was a sham In light of all that I have said, the sole issue for determination in this appeal must be and is hereby resolved against the appellant.
In conclusion I find no merit in this appeal. It is hereby dismissed.
The judgment of the High Court of Rivers State holden at Port Harcourt in Suit No. PHC/1403/2007 delivered on 10th December 2007 is hereby affirmed. Costs are assessed at N40, 000.00 in favour of the respondent.
Other Citations: (2009)LCN/3216(CA)
