United Bank For Africa V. Hon. Iboro Ekanem (Md Paragon Ent. Ltd.) & Anor (2009)
LawGlobal-Hub Lead Judgment Report
KUMAI BAYANG AKAAHS, J.C.A.
The 1st Respondent herein was the Plaintiff in Suit No. HU/UND.28S/200Sagainst Mkpat Enin Local Government where he obtained judgment against the Defendant and was awarded N5, 000,000.00 as damages with costs assessed at N5, 000.00. The plaintiff later applied for Garnishee proceedings against the United Bank for Africa Plc, the bankers to the judgment debtor. The Garnishee proceedings were given Suit No. HU/MISC.442/2005 wherein Mkpat Enin Local Government, the judgment debtor was joined as the 2nd respondent. An Order Nisi was granted on 19/10/2005 which was served on the UBA to appear before the High Court to show cause why the Order Nisi should not be made absolute. The garnishee did not file an Inter pleader summons so the Order Nisi was made Absolute and served on the Bank. This led to the immediate attachment of the Bank’s properties which compelled the Bank to issue a draft in the judgment sum of N5, 000,000.00 in favour of the judgment creditor. N500.00 was also paid, to the bailiffs. On the same day the judgment debtor served the Bank a Notice of Appeal and motion for stay of execution of the judgment.
Seeing the processes filed by the judgment debtor, the Bank now Garnishee/Judgment debtor filed an application on 12/12/2005 praying the lower court that value should not be given to the draft of N5 million it issued to the bailiffs pending the determination of the appeal filed by the Mkpat Enin Local Government. This prompted the 1st Respondent/Judgment Creditor to file an application on 19/12/2005 seeking the following reliefs:-
“1. That the adjudged sum of N5, 000,000.00 (Five Million Naira) property of the Judgment Creditor/Applicant still being unlawfully retained by the Garnishee/Judgment Debtor/Respondent be so kept at 10% monthly interest with effect from 8th December, 2005 when Order Absolute was made till the whole sum is fully paid.
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2. That the Garnishee/Judgment Debtor/Respondent shall pay to the Judgment Creditor/Applicant N1, 000,000.00 (One Million Naira) cost of this suit, general, special and exemplary damages of N1,000,000.00 for unlawfully reaping the fruit of the Judgment Creditor’s (sic) success and for loss of Immediate use of the money.”
On 31st May, 2006, the lower court delivered its Ruling and ordered that the money be kept with the Bank and attract interest at 10% per annum; payment of legal fees of N500, 000.00; N100,000.00 general damages to the Judgment Creditor and costs assessed at N50,000.00. Being dissatisfied with the Ruling, the Bank filed a Notice and three grounds of appeal pursuant to order of this court granted on 27/3/2007 from which the appellant formulated two issues for determination. The issues are:
1. Whether the claims/reliefs herein are such that can be commenced by Motion on Notice instead of writ of Summons.
2. Whether the Appellant can be penalized for wishing to maintain the status quo while applications were pending including two for stay of execution in pursuit of a constitutional right of appeal.
The Respondent also formulated two issues in his brief as follows:-
1. Whether the trial court was right in entertaining claims/reliefs commenced pursuance (sic) to the provisions of Civil Procedure rules.
2. Whether having regards to the provisions of the law and equity the appellant was right to retain judgment sum of which execution was completed without cost and or Interest.
Mkpat Enin Local Government neither filed a brief nor was it represented in the appeal so this appeal is between the Bank as appellant and the Judgment Creditor who is the Respondent. The Appellant filed a Reply Brief after the receipt of the Respondent’s brief.
The two issues formulated in the Appellant’s brief were argued together. Learned counsel for the appellant read Order 1 Rules 1, 2 and 3 of the Akwa Ibom State High Court (Civil Procedure) Rules and submitted that the suit/action herein cannot be commenced by Motion on Notice but by a Writ of Summons. He referred to Order 40 Rule 7, Order 53 Rules 3 and 7 and Order 47 Rule 1 and contended that those orders are not applicable in Garnishee proceedings but rather it is the Sheriff and Civil Process Act and the Judgment Enforcement Rules that apply to this type of proceedings. It is the contention of learned counsel that disobedience of court order can be remedied by contempt proceedings and Section 28 of the Sheriffs and Civil Process Act provides the penalty for obstructing the execution of judgment and this does not include filing a motion for interest and judgment which can only be asked for by filing a Writ of Summons. He maintained that there is a right of appeal against a Garnishee Order Absolute as decided in SOKOTO STATE GOVERNMENT v. KAMDAX NIG. LTD. (2004) 9 NWLR (Pt. 878) 345. He was of the view that a vital part of the Garnishee proceedings is the oral examination of the judgment debtor before or after the Order Nisi as required by Section 83 (i) of the Sheriffs and Civil Process Act. He also argued that the N5 million judgment debts was not being unlawfully retained because if a right of appeal enures to the Appellant against the Order Absolute, there is a concurrent right to apply for a stay of execution of the judgment/order. Learned counsel then chronicled the events that took place after the Order Absolute was made as follows:
“The Order Absolute was on 8/12/2005, with the service of the Order on the garnishee and execution, effected on 9/12/2005, a Friday. Motion for stay of Execution was also filed and served on applicant on 9/12/2005.
The very next working day being 12/12/2005, a Monday, the Garnishee filed an application that value be not given to the cheque/draft It Issued on Friday, 9/12/2005……………
The applications filed 9/12/2005 and 12/12/2005 whether rightly or wrongly remained undetermined. On 12/4/2006, the application filed 12/12/2005 was adjourned for Ruling on 25/4/2006, while the one herein filed on a later date was adjourned for Ruling on 16/3/2006, till 29/3/2006. These dates have been referred to because the court showed eagerness to hear the application for monthly interests and damages In a garnishee proceedings ignoring all other pending applications filed in good faith for direction of the court.”
He contended that the direction which the court gave included dismissing the application, ordering payment of the money into court but certainly not for damages for payment of solicitor’s fees. He relied for this submission on ACHEBE v. MBANEFO (2007) 10 NWLR (Pt. 1043) 490. Learned counsel then urged this court to set aside the Ruling of the lower court of 31/5/2006 and order the immediate refund of the sum of N660, 000.00 extracted from the appellant since the lower court did not exercise its discretion judicially and judiciously.
Learned counsel for the Respondent citing Order 40 Rule 7 of the Akwa Ibom State High Court (Civil Procedure) Rules submitted that an application for post judgment interest is an interlocutory application that can only or competently be commenced-by Motion on Notice as in this case. Furthermore Order 2 Rule 32 of the Judgments (Enforcement) Rules Cap. 407 Laws of the Federation of Nigeria 1990 permits the Judgment Creditor to levy cost of execution and also any interest on the judgment which the court may have ordered. Learned counsel maintained that prayer 2 in the motion paper asking for cost and damages were properly and competently commenced by motion on Notice pursuant to Order 53 Rules3 and 7.
He posited that there is no law which prohibits application for interest, cost and damages after completion of proceedings by motion or notice. The only application for damages which may not be commenced by motion are damages for breach of duty or damages in respect of death arising from personal injuries or in respect of damages to any property as entrenched in Order 1 Rule 2(i) (c) and this is why damages may not be awarded in Fundamental Human Rights proceedings by way of motion on notice as provided in the enforcement rules. He argued that it is a misconception of the law for the appellant to feel that the suit which gave rise to this appeal should have been brought by way of contempt proceedings because the Order Absolute was obeyed with the issuance of bank draft which could as well be cash. He said the Respondent was not interested in the value of the draft but value cash represented by the draft and the sufferings of the Respondent as successful party at the court below. Learned counsel furthered that the commencement of the Respondent’s application by motion on notice under Order 47 Rule 1 of Akwa Ibom State (Civil Procedure) Rules was proper because justice demands that if a successful party must be deprived of the fruit of his success due to pendency of motion of stay of execution pending appeal the adjudged sum may be ordered to be deposited in court or in an interest yielding account in any reputable financial institution.
Turning to Issue 2, learned counsel submitted that an unsuccessful party in a suit whose conduct brought about the suit may rightly be ordered to pay to the successful party cost, losses and injuries suffered by the latter in a suit subsequent to the substantive suit by way of interlocutory application in the manner of the suit now on appeal and so a competent order of court for interest on a retained judgment sum and order for cost of expenses in the said suit do not amount to penalizing the unsuccessful party.. He said the court is bound to rely on and act upon uncontruverted paragraphs of an affidavit in support of an application as in the instant case where the supporting affidavit in pages 3 – 5 of the records were not controverted by the appellant and so were impliedly admitted by the appellant. He argued that even if a motion for stay was filed but there is no indication that notice of the application has not been served on the respondent, the judgment sought to be stayed may still be executed as decided in EZEGBU v. FATS(1992) 7 NWLR (pt. 251) B. Learned counsel conceded to the fact that any party in a garnishee proceedings can appeal against an order absolute and also file a motion for stay of execution, but submitted that the appellant was wrong to arrogate to itself the power to enforce the stay based on the purported processes filed. He submitted on the authority of GOVERNOR OF OYO STATE v. AKINYEMI (2002) FWLR (pt. 120) 1761; (2003) 1 NWLR (pt. BOO) 1 that a garnishee order remains valid and enforceable until set aside. He urged this court to dismiss the appeal with substantial cost and not set a bad precedent of encouraging the judgment debtor to delay the realization of the judgment debt and interest accruing to the detriment of the successful party.
In his reply, learned counsel for the appellant Urged on this court to disregard paragraph 1 at page 2 of the Respondent’s brief as introducing fresh issues which are speculative and unestablished allegations especially the allegation that the appellant intended to defraud the respondent by hiding under the cover of motion for stay of execution to delay the money in its hands. On Issue 1, learned counsel repeated his submissions that Order 40 Rule 7 Akwa Ibom State High Court Rules is inapplicable to Garnishee Proceedings.
Since the lower court was not the court that heard the case and delivered judgment, it had no jurisdiction to amend the original judgment of the trial court simply because it is handling garnishee proceedings for the attachment of the judgment sum. He contended that the reliance on Order 1 Rule 2(3) of the High Court Rules under reference is misleading. Having argued that the application was an interlocutory one, learned counsel for the respondent could not turn somersault to assert that the application was begun by Originating Summons. He said that Order 2 Rule 32 of the Judgment (Enforcement) Rules Cap 407 Laws of the Federation of Nigeria (now Judgment Enforcement) Rules Cap. S. 6 – 59 of the Laws of the Federation of Nigeria 2004 refers to the trial court and not the court handling Garnishee Proceedings and does not say that the sum attached can be varied or have interest added other than the trial court. He further drew attention to the fact that the reliance which the Respondent’s counsel placed on Order 1 Rule 3 and Order 53 Rules 3 and 7 of the Akwa Ibom State High Court (Civil Procedure) Rules is misleading contending that the last paragraph of the record of proceedings shows that the trial court apart from delivering judgment in the sum of N5 million also awarded costs of N5, 000.00 against the judgment debtor and the appellant herein was not a party in that case and so cannot be subject of the award of costs.
Consequently the Garnishee court cannot also vary this cost.
The main questions that call for determination in this appeal are:
(1) Was it right for the Garnishee/Judgment Debtor/Appellant to have countermanded the draft it Issued to the Judgment Creditor/Respondent on 12/12/2005;
(2) Did the Judgment Creditor adopt the right procedure when it became apparent that the Garnishee/Judgment Debtor had frustrated the execution of the judgment debt? and
(3) Was the Lower Court right in hearing the application of the Judgment Creditor/Respondent of 19/12/2005 and Ruling in the Respondent’s favour on 31/5/2006?
The appellant tried to justify its action in countermanding the draft by arguing that since the 2nd respondent had a right of appeal there was a concurrent right to apply for stay of execution of the order/judgment. It is not within the competence of the appellant to argue for the 2nd respondent; neither has it power or responsibility to protect a right that enures to the 2nd respondent so that a future appeal lodged by the 2nd respondent will not be frustrated if the judgment obtained against it is executed. Furthermore, without a formal complaint alleging that the records are incomplete the appellant does not have the latitude to cast aspersion on the Registrar of the lower court pertaining to the incompleteness of the records. Since judgment had already been entered against the 2nd respondent there was no feat that the 2nd respondent would make an adverse claim against the appellant for the money standing to its credit in the appellant’s Bank which had been garnished by the Judgment Creditor. See: paragraph 30. 05 of the Practice and Procedure of the Supreme Court, Court of Appeal and High Courts of Nigeria by T. Akinola Aguda at page 382. See also Section 91 of the Sheriffs and Civil Process Act which provides as follows:
“91. Payment made by or execution levied upon a garnishee under any such proceedings shall be a valid discharge to him against the debtor liable under the judgment or order, to the amount paid or levied, even though such proceeding may be set aside or the judgment or order reversed.”
Notwithstanding the, fact that, the procedure laid down in Section 83 of the Sheriffs and Civil Process Act was not followed by the Respondent in applying for the Garnishee proceedings against the appellant Bank which led to the attachment of its properties and which action prompted the issuance of the draft cheque for N5 million naira, if the appellant had proceeded to pay the N5 million, it will not be liable to refund the sum to the judgment debtor in the event that an appeal by the judgment debtor succeeded and the judgment reversed. The argument of the Appellant that it was because the judgment debtor appealed against the judgment and filed a motion for stay of execution of that judgment debt that led it to countermand the draft cheque is untenable.” The action of the appellant in countermanding the draft cheque issued in execution of the judgment delivered by the lower court on 10/10/2005 was self serving and it amounted to self help which was condemned in strong terms by the Supreme Court in the case of MILITARY GOVERNOR OF LAGOS STATE v. OJUKWU (1986) 1 NWLR (pt. 18) 621.
Learned counsel for the Respondent in his submissions justifying the procedure adopted by the High Court relied on Order 40 Rule 7 of the Akwa Ibom State High Court (Civil Procedure) Rules contending that an application for interest on a judgment sum after the said judgment can properly be commenced by motion on notice supported by affidavit and such application for post judgment interest is an Interlocutory application which can only be competently commenced by Motion on Notice.
The appellant however contends otherwise arguing that Order 40 Rule 7 is inapplicable since this is a garnishee proceedings and the lower court did not deliver the substantive judgment. He said that Garnishee proceedings are governed by the Sheriffs and Civil Process Act and the Judgment (Enforcement) Rules.
Order 40 of the Akwa Ibom State High Court (Civil Procedure) Rules 1989 deals with delivery of judgments and orders. Rule 7 specifically provides thus:
“The Court may at the time of making any judgment or order, or at anytime afterwards, may direct the time within which the payment or other act is to be made or done, reckoned from the date of the judgment or order, or from some other point of time, as the court thinks fit and may order interest at a rate not exceeding ten naira per centum per annum to be paid upon any judgment commencing from the date thereof or afterwards, as the case may be.”
Commenting on this provision, the learned author T. Akinola Aguda in: PRACTICE AND PROCEDURE OF THE SUPREME COURT, COURT OF APPEAL AND HIGH COURTS OF NIGERIA” states in paragraph 44.28 page 534 as follows:
“The Court cannot under this Rule, order the payment of Interest on-a judgment debt, except when It directs die time within which the judgment is to be paid: BARCLAYS BANK D.C.O. v. YESUFU ALABI ADIGUN (1961) ALL NLR 536”.
In the judgment delivered by Okon J. on 10/1J/2005 which was the subject of the Garnishee order absolute, he stated thus:
“Consequently, I hold that the plaintiff, Hon. Iboro Ekanem, has proved his case against the Defendant and he is entitled to judgment. I enter judgment in sum of N5, 000,000.00 (Five Million Naira) in favour of the Plaintiff. I assess costs also in his favour at N5, 000.00.”
Here nothing was said about the rate of interest accruing on the judgment sum either before or after the delivery of the judgment.
But when the Garnishee/Appellant countermanded the draft it had issued, the Judgment Creditor/Applicant filed the motion and in his prayer I asked that:
“1. That the adjudged sum of N5, 000,000.00 (Five Million Naira) property of the judgment creditor/appellant still being unlawfully retained by the Garnishee/Judgment Debtor/Respondent be so kept at 10% monthly interest with effect from 8th December 2005 when Order Absolute was made till the whole sum is fully paid to the creditor”
It can be clearly seen that this application could not be entertained under Order 40 .Rule 7 of the Akwa Ibom State High Court (Civil Procedure) Rules. Learned counsel for the respondent when faced with this dilemma quickly switched his argument to place reliance on Order 53 Rules 3 and 7 and going further to submit that there is no law which prohibits application for interest, cost and damages after completion of proceedings by motion on notice.
If damages are being claimed in an action, there must be evidence in proof of such damages whether special or general to entitle the claimant to the award being made. Since the garnishee order had been made absolute, the appellant was bound to pay the judgment debt to the judgment creditor. See: GOVERNOR OF OYO STATE v. CHIEFAKIN AKINYEMI (2003) 1 NWLR (pt.800)1. The Garnishee/Judgment Debtor had disobeyed the Garnishee Order Absolute by countermanding the draft. Learned counsel for the Respondent/Judgment Creditor says the lower court followed the correct procedure in taking the motion on Notice and awarding to the Judgment Creditor N500, 000.00 being 10% legal fees; general damages of N100, 000.00 and costs assessed at N50, 000.00 in addition to granting interest of 10% per annum on the .adjudged sum of N5 million.
I find the submissions of learned counsel for the appellant on the options opened to the Judgment Creditor/Respondent quite appropriate. The officer of the Bank who countermanded the cheque could have been committed for contempt for disobeying the Garnishee Order Absolute. In addition the Judgment Creditor had a right to institute an action against the Garnishee/Judgment Debtor claiming damages for the dishonoured cheque.
The learned trial Judge ignored the Motion dated 10/12/05 which the Garnishee filed on 12/12/05 praying that value be not given to the Bank draft in the sum of N5 million pending the determination of the application for stay of execution of the main judgment and also for stay of the order absolute. (See page 63 of supplementary records of appeal). If he had done that perhaps he would have granted a conditional stay and ordered that the N5 million judgment debts be paid into an interest yielding account and this would have obviated the anxiety of the judgment Creditor/Respondent about the Garnishee/Judgment Debtor keeping the money and trading with it. The learned trial Judge was not even handed in the treatment of the applications which were pending before him.
I find that the appeal partially succeeds and I hereby allow it. I set aside the orders made by Archibong J. in his Ruling delivered on 31/5/2006 in Suit No. HU/MISC 535/2005 except the N5 million judgment debt and if the, damages plus costs totaling N650, 000.00 have been paid, they should be deducted from the N5, 000,000.00 payable to the Judgment Creditor/Respondent. I make no order on costs.
Other Citations: (2009)LCN/3297(CA)
