Trade Bank Plc V. Spring Finance Ltd (2009)
LawGlobal-Hub Lead Judgment Report
JOHN INYANG OKORO, J.C.A.
The Respondent, as customer of the Appellant bank sometime in 1994 paid the sum of N7,000,000.00 (Seven Million Naira) vide Habib Nigeria Bank Ltd cheque No 005/80/001/080/94 into its current account No 105 – 372022401 -28 with the Appellant. The Appellant accepted the cheque though it bore the inscription A/C RIMS FINANCE LTD instead of A/C SPRINGE FINANCE LTD. The said cheque was cleared and the money deposited in the Respondent’s account. Thereafter, the Respondent made efforts to withdraw from the account but the Appellant failed to pay. This refusal to honour its cheques made the Respondent which was the plaintiff in the lower court to commence proceedings under the undefended list against the Appellant to recover the sum of N6,397,306.46 being the credit balance in its account as at July, 1994 after deducting their debit balance of N602,693.54.
The Appellant which was the defendant filed notice of intention to defend “under protest” supported by a six paragraph Affidavit, wherein it averred in paragraph 4 (c) – (o) as follows:-
“(c) That the 2nd plaintiff not being the customer connected with this transaction cannot sue the bank thereon
(d) That the 1st plaintiff is a liquidated finance company whose license has long been withdrawn by the Central Bank of Nigeria Limited.
(e) That as a result of the averments in sub paragraph (d) above, the 1st Plaintiff too cannot file this action
(f) That it is not correct that the 1st Plaintiff is entitled to the cash on Habib Nigeria Bank Ltd’s draft No 005/80/001/080/94.
(g) That the said draft Exhibit B to Plaintiff’s affidavit is not in favour of the plaintiff.
(h) That the N7million paid by the 1st Plaintiff into its account with the Defendant’s Kaduna branch sometime in 1994 was by a United Bank for Africa Plc draft which was cleared and the funds released to the 1st Plaintiff.
(i) That a firm of solicitors Ado Ibrahim, Oyewumi and Company wrote to the defendant on this same issue on which this suit is filed in September, 1994. A copy of the letter is attached herewith as Exhibit A.
(j) That the Defendant instructed its Solicitors, Lanke Odogiyou chambers, who reacted to said letter giving detail explanations of the transactions. Attached herewith as Exhibit B is a photocopy of the said letter.
(k) That settled the matter since 1994.
(l) That suddenly recently the Plaintiff resumed its request for the money.
(m) That he was not the Kaduna Manager in 1994 but the Plaintiff s file with the Defendant’s Kaduna Branch bears out the above facts.
(n) That the Defendant’s head office’s reaction and further briefing are being expected from the head office in Ilorin, and would be communicated to the Court when received
(o) That the Defendant is not owing the Plaintiff W7 million or any sum whatsoever instead it is the 1st Plaintiff that is owing the Defendant as shown by the Plaintiffs, Exhibit E which has since not been regularized.”
After considering the above depositions, the learned trial judge delivered his judgment and held that the affidavit has not disclosed any defence on the merit and entered judgment for the Respondent.
Being dissatisfied with the decision of the Court below, the Appellant filed notice of appeal containing three Grounds of Appeal out of which the learned counsel for the appellant distilled two issues for the determination of this appeal. The issues are:-
- Whether the trial judge was right in the circumstances of this case to hold that the Appellant has failed to prove that the Respondent has no locus standi to institute the action, not having exhibited any gazette showing the liquidation nor document evidencing the withdrawal of its licence.
- Whether from the facts and circumstance of this case, the trial Judge was right to Hold that the Appellant has failed to Establish a defence on the merit.
The learned counsel for the Respondent however formulated only one issue for consideration and determination of this appeal as follows:-
“Whether from the facts and evidence available to the court, the Applicant (sic) Appellant disclosed a defence on the merit to warrant transfer of the matter to the general cause list.”
It is my well considered opinion that having regard to the facts of this case and the decision of the learned trial judge, this appeal can effectively be determined on the lone issue distilled by the Respondent which is in tandem with the second issue of the Appellant’s brief. So, I shall determine this appeal on that issue only.
It was the contention of the learned counsel for the Appellant that the issues raised in paragraphs (f) – (o) in the affidavit in support of Notice of intention to defend were such that required further investigation by the trial Court. For example, who was Rims Finance Ltd in whose favour the cheque was drawn?, and has the money been paid to the said Rims Finance Ltd or any other person and these questions were raised by the learned trial judge in his judgment. That the Respondent needed further explanation as to how it got in possession of a cheque made out in favour of Rims Finance Ltd, another Limited Liability Company and why the proceeds of the cheque must be paid to it. Moreso, that it would have been necessary to cross examine the Respondent and/or Sherwood Consult on Exhibit B being the company that purportedly deposited the N7 million with the Respondent. Finally that the averment that the Respondent is a liquidated Finance House whose licence has been withdrawn by the Central Bank also constitutes a disclosure of a defence on the merit. He cited the following cases in support of his submission:-
Federal Military Government of Nigeria & Ors v. Sani (1990) 4 N.W.L.R. (Pt. 147) 688, Okambah Ltd v. Sule (1990) 7 N.W.L.R. (Pt. 160) I, Yahaya v. Waje Community Bank Ltd (2001) F.W.L.R. (Pt. 46) 804.
In his reply the learned counsel for the Respondent submitted that the Appellant did not aver enough facts in her affidavit to warrant the case being transferred to the general cause list. That the appellant merely stated in her affidavit that the cheque bears Rims Finance Ltd without stating who or what is Rims Finance Ltd. Does it have an account with the appellant? What is its account number?
Was the money paid to it? How and when? That the Appellant failed to provide answers to these questions in her affidavit. That the learned trial judge was right in refusing to transfer the case to the general cause list. That having accepted the cheque and paid into the Respondent’s account, the Appellant cannot say that the money did not belong to the Respondent. On the issue that the licence of the Respondent had been withdrawn by the Central Bank and that it is liquidated, learned counsel submitted that the appellant failed to make enough facts available in her affidavit to enable the trial Court to believe that the Respondent’s licence has in fact been withdrawn. He relies on the case of Pan Atlantic Shipping and Transport Agencies Ltd v. Rhein Mass U.N.D. SEE SCHIFFARTS KONTOR G.M.B.H. (1997) S.C.N.J. 88. He urged this Court to resolve this issue against the appellant.
Under Order 22 Rule 1 of the High Court (Civil Procedure) Rules 1987 of Kaduna State, whenever application is made to a Court for the issue of a writ of Summons in respect of a claim to recover a debt or liquidated money demand and such application is supported by an affidavit setting forth the grounds upon which the claim is based, and stating that in the deponent’s belief there is no defence thereto, 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 the “Undefended List,” and mark the writ of summons accordingly, and enter thereon a date for hearing suitable to the circumstance of the particular case. Under Order 22 Rule 3 of the same Rules, to succeed in getting a matter under the undefended list transferred to the general cause list for full blown trial necessitating the settlement of pleadings and calling witnesses, the affidavit in support of the notice of intention to defend must disclose a defence on the merit.
The Undefended list procedure as provided in Order 22 aforementioned is to enable a plaintiff to obtain Summary judgment without going into a lengthy trial if he can prove his claim clearly and also if the defendant is not able to set up a bona fide defence or raise an issue against the claim which ought to lead to the case being tried on its merit. See Federal Military Government v. Sani (1990) 4 N.W.L.R. (Pt. 147) 688, Sodipo v. Lemninkainen O.Y. & Anor (1989) 1 N.W.L.R. (Pt. 15) 220, UTC v. Pamotei (1989) 2 N.W.L.R. (Pt. 103) 244.
It is not the intention of the procedure to shut out the defendant. Rather, it gives him the opportunity to show by his affidavit that it has a defence to the suit which ought to be considered by the trial Court. It is the duty of the trial Judge to examine the averments of the defendant in his affidavit in support of the Notice of intention to defend in order to ascertain whether the defence set up therein is meritorious as there is no room for frivolities. In doing this, it is not necessary for the trial judge to consider at that stage whether the defence has been proved. He is simply to look at the facts deposed in the defendant’s affidavit and sees if these facts can, prima facie afford a defence to the claim. At that stage, a complete and comprehensive defence need not be shown. It is enough that the defendant is able to show that there is a triable issue or question raised in the affidavit. Before judgment can be entered for the plaintiff, the trial Judge must satisfy himself that all the facts contained in the defendant’s affidavit do not amount to a defence in law.
In the instant case, certain facts contained in the defendant’s (now Appellant) affidavits tend to show that it has a triable issue which ought to be given a chance.
Exhibit A and B attached to the Appellant’s affidavit in support of its intention to defend are documents which the learned trial judge ought to have considered before arriving at his conclusion. Exhibit A is dated 12th September, 1994 and captioned: – “RE: YOUR REFUSAL TO RELEASE THE SUM OF SEVEN MILLION NAIRA ONLY (N7,000,000.00) TO SPRING FINANCE LIMITED” in which the Respondent through its Counsel wrote to the Appellant demanding the payment of the said sum. The Appellant, in response to that demand, wrote exhibit B through its Counsel, Lanke Odogiyon Esq on 19th September, 1994.
Part of the letter reads:-
“1. It is not correct that your client, Spring Finance Limited lodged a Habib Nigeria Bank Limited draft in the sum of Seven Million Naira in her account with our clients’ Kaduna Branch Office. The lodgment of Seven Million Naira made by your client was actually sometime in January, 1994. It was a United Bank for Africa Plc draft. Same was cleared and the funds were duly released to your client.”
Paragraph two of the said letter puts the matter beyond doubt. It states:-
“2. The Habib Nigeria Bank Limited draft No 005180/00/080/9A of 4th July, 1994 in the sum of Seven Million Naira referred to by your client is erroneous.
It was not meant for your client as claimed. It was a draft in favour of Rims Finance Limited hence the refusals to allow your client withdraw the money.
The erroneous entry has therefore been corrected (italics mine for emphases)
The Apex Court has in UBA PLC v. Jargaba (2007) 11 N.W.L.R. (Pt. 1045) 247 by Tobi JSC held that-
“A case is not transferred to the general cause list as a matter of course or routine but on proper scrutiny of the averments in the Affidavit in support of the notice to defend. For this purpose, no flimsy, fanciful or frivolous defence adduced to prolong the case or play for time will suffice. It must be a real defence on the merit and not a caricature of it.”
The defense set up by the Appellant in the instant case was made since 1994 and the Respondent was aware of it.
It did nothing until 1999 when this matter was filed and the Appellant states unequivocally that the cheque did not belong to the Respondent but in favour of Rims Finance Limited which fact the Respondent admits. The Appellant also states that the error has since been rectified or corrected. For me, this is a strong trial issue and a good reason for the lower Court to have transferred the case to the regular cause list. As it is, there is something to investigate further. I do not think this defense is frivolous.
There is real dispute between the parties which ought to be resolved by evidence. See ACB Limited v. Gwagwada (1994) S.C.N.J. (Pt. 11) 268. As I stated earlier, the Court at this stage does not need to consider whether the defence will succeed or not or whether all the documents needed to prove the defence are attached although it may be desirable to do so. It is now a well established principle that when a Court is proceeding under the undefined list proceeding, it is desirable that the Court must call to play a measure of liberality when viewing the affidavit of the Defendant in order to determine whether or not a defence on the merit is disclosed. See Ebong v. Ikpe (2002) 17 N.W.L.R. (Pt. 797) 504. Bawa v. Phemas (2007) 4 N.W.L.R. (Pt. 1024) 251.
Even apart from the issue contained in Exhibit B considered above, the Appellant had raised the issue that the Respondent is no more in existence, its license having been withdrawn by the Central Bank. Also, that the 2nd Plaintiff then was not privy to the contract between the Appellant and the Respondent. These were good defences which the Appellant raised. But the Learned trial judge took upon himself to try those issues and resolve them in an undefended list procedure. This, in my opinion ought not to have taken place. If the defence was worthless, why then did the Court below consider them and took a decision?
On the whole, I agree with the Learned Counsel for the Appellant that the Court below was in error when it held that the Affidavit in support of the Notice of intention to defend did not disclose a defence on the merit to warrant the suit being transferred to the general cause list.
In sum, this appeal is meritorious and hereby succeeds. It is allowed by me. The judgment entered by the Learned trial Judge in favour of the Respondent on the 7th of July, 1999 is hereby set aside and in its place, I do hereby order that the Respondent’s action filed at the lower Court be removed from the undefended list and transferred to the general cause list for trial before another judge. The Appellant is entitled to costs and is assessed at N30,000.00 to be paid by the Respondent.
Other Citations: (2009)LCN/3282(CA)
