Shemar Nig. Ltd V. Mokt Industries Ltd. (2009)
LawGlobal-Hub Lead Judgment Report
AMINA ADAMU AUGIE, J.C.A.
The Appellant contracted the Respondent to supply it with certain equipments worth 1.1 Million Naira. Upon the failure of the Appellant to pay up a balance of N200,000.00, the Respondent sought leave of the Kaduna State High Court, which was granted, to file an action against the Appellant under the undefended list.
The Appellant, however, filed a Notice of Intention to Defend, wherein it averred as follows in paragraphs 2 (b)-(g) of its Affidavit-
(b) That the Plaintiff was given 6 units of safety wears (shoes) which were manufacturers sample to show interested persons and companies.
(c) That the Plaintiff sold those samples with the mechanical drawings and converted the money to its own use.
(d) That the Plaintiff’s Managing Director has made several promise to pay back the money, a total sum of N6 Million Naira only which up till date the Plaintiff refused to pay.
(e) That when the transaction in issue came up, the Plaintiff through its managing Director promised he will pay part of the sum in issue, but pleaded with the M.D of the Defendant to exercise patience or he will return part of the safety wears.
(f) That the Defendant issued a postdated cheque Exhibit 3 on the understanding that the Plaintiff will bring back part of the safety wears (shoe) before the maturity date in the cheque which it refused and the Defendant instructed the Bank not to pay the Plaintiff.
(g) The Defendant shall counter-claim for the price of the safety wears (shoes) in the sum of N6, 000, 000 (six Million Naira) only and shall ask the Court to deduct the sum of N200,000.00 only from the amount counter-claimed.
In his Ruling delivered on the 12th of July 2005, the learned trial Judge, T. Zailani, J., held that the Appellant had admitted the debt of N200,000, and that it would not be in the interest of justice to deny the Respondent Judgment on the sole basis that the Appellant has a counter-claim against the Respondent. Thus, he entered Judgment for the Respondent against the Appellant.
Dissatisfied, the Appellant appealed to this Court with a notice of Appeal containing two Grounds of Appeal, which complain that –
- The learned trial Judge erred in law when he held that the Defendant has not put a defence to the Plaintiff’s case.
- The learned trial Judge erred in law when he held that the issue of counter-claim is not before him and there was no assurance that the Defendant would prosecute same.
In its brief of argument prepared by S. A. Akanni, Esq., the Appellant formulated only one Issue for Determination, as follows-
“Whether the learned trial Judge was right in granting the relief of the Respondent?”
The Respondent submitted in its brief settled by G. O. Akpovwa, Esq., that although it is appropriate practice to formulate an issue from one or more Grounds of Appeal, such an issue must relate or encompass or be derived from the Grounds of Appeal, citing Magit v. University of Agriculture, Makurdi (2006) ALL FWLR (Pt. 298) 1313 @1329, that the Issue formulated by the Appellant does not address or encompass the complaint of the counter claim not being before the lower Court or the assurance of its prosecution as raised therein; and that where no Issue is formulated on a Ground of Appeal, such ground of appeal is deemed abandoned and is to be struck out, citing Emespo J. Continental Ltd. v. Gorona (2006) 5 SCNJ 17. It further submitted that the Issue for determination is –
“Whether in the circumstances of this matter, the Appellant’s Affidavit in support of its notice of intention to defend discloses a defence on the merits as prescribed by Order 22 rule 3 of the Kaduna State (High Court Civil Procedure) Rules, 1987, to warrant or justify transferring the suit to the General Cause List for trial by the lower Court”.
I must say that the Respondent’s Issue actually hits the nail on the head as regards the Appellant’s complaint against the Judgment of the lower Court, but that is not to say that the issue formulated by the Appellant does not encompass the complaint raised in its second Ground of Appeal. After all, the lower Court granted the Respondent’s relief because it was of the view that the said counter claim does not constitute a defence on the merit.
However, I will adopt the Respondent’s issue in dealing with this appeal because, as I said, it strikes at the heart of the matter.
The Appellant’s complaint against the Judgment is hinged on the lower Court’s observation at pages 49 of the record, as follows-
“The question is must we give the Defendant an opportunity to present his counter-claim? It may be good to do that – – to discourage multiplicity of litigation so that all issues between the parties may be determined once and for all when we do that, certain issues will be obvious – – The Defendant could have sued the Plaintiff – – long before now. The Defendant decided not to do that. What assurance do we have that it will prosecute the counter-claim properly now?”
The Appellant referred us to Goronyo v. UBA (2000) FWLR (Pt.22) 1102 and Ezuma v. Nkwo Market Community Bank Ltd. (2000) FWLR (Pt. 28) 2243, on the definition of “defence on the merit”, and argued that the lower Court was approbating and reprobating when it speculated as to whether it would prosecute its case, which was not for it to do at that stage; and that it analyzed the defence and deemed it unsustainable, which is contrary to all the judicial authorities on the defence called a “defence on the merit”, citing Fadlallah v. NAMB Ltd. (2007) All FWLR (PI. 385) 530.
It was further submitted that the Counter-claim would have exonerated it from liability had the lower Court acceded to it; and that the said counter-claim relates to the Respondent’s claim and they could have been dealt with together, citing Asoumugha v. Mandillas Enterprises Ltd. (1985) NWLR (Pt. 12) 325
The Respondent also referred us to Falcom Bentil v. Manulu (2002) FWLR (PI. 95) 392, Nwankwo v. E. D. C. S. (2007) 2 SCNJ 89, Okoli v. Morecab Finance Nig. Ltd. (2007) 5 SCNJ 25, on what would amount to or qualify as a “defence on the merit”, and argued that the Appellant did not deny, answer or respond to any of the facts constituting it’s case; that paragraphs 2 (f) & (g) of the Appellant’s Affidavit amounts to an admission so the lower Court was perfectly justified in entering Judgment in the circumstances; and that it is settled law that a counter claim is no more that a separate and distinct cause of action, citing Anwoyi v. Shodeke (2006) SCNJ 1, Haido & 1 or v. Usman (2004) ALL FWLR 1765.
It was further submitted that although adequately and duly considered by the lower Court, the counter-claim was yet to be properly filed before any Court at that stage of the proceedings, and the lower Court was accordingly in order to make its finding as to the status of the proposed counter claim, citing Ibator & ors v. Barakuro & ors (2007) 4 SCNJ 27. It was conceded that the defence need not be proved at that stage of the proceedings, however, it was argued that in view of the decision in Haido & 1 or V. Usman (supra), which discountenances counter-claims as a defence to an undefended list action, the lower Court was right to refuse the Appellant’s defence because it would not avail them.
Now, the undefended list procedure is meant to provide a quick channel for recovery of debts or claims for liquidated demand, and for the action filed to be transferred to the general cause list, there must a defence on the merit with all the details and particulars set out. It must not be a half-hearted defence, thus “it must be a real defence on the merit and not a caricature if it” – see USA Plc v. Jargaba (2007) 11 NWLR (Pt. 1045) 247.
The authorities cited by both parties clarify what a “defence on the merit” is all about. In Ezuma v. Nkwo Market Community Bank Ltd. (supra), cited by the Appellant, this Court observed as follows –
“In determining whether a Defendant has a good defence to the action brought against him, or has disclosed such facts as may be deemed sufficient to defend the action. It is not necessary for the trial Judge to consider at that stage whether the defence has been proved. What is required is simply to look at the facts deposed to in the Counter-Affidavit or indeed the facts averred in the Statement of Defence – – and see if they can prima-facie afford a defence to the action. It will suffice if the defence set up shows that there is a triable issue or question or that for some other reason there ought to be a trial”.
The Respondent, enumerated the applicable principles, as follows-
(1) It must be a defence that would avail the Defendant ordinarily – Falcom Sentil v. Manulu (supra).
(2) The defence must condescend upon particulars and as far as possible deal specifically with the Plaintiff’s claim and state concisely what the defence is and the facts relied upon to support it – Falcom Sentil v. Manulu (supra).
(3) The Defendant must not only set out a good defence with its particulars, the defence must be such that, if proved, it would constitute such a defence – NWANKWO v. E.D.C.S. (supra).
(4) The defence must touch or relate to the substance of the Plaintiffs claim and not irrelevant issues otherwise the Court is to enter Judgment – Ezekiel Okoli v. Morecab Finance Nig. Ltd. (supra).
The main thing is that the grounds of any defence in proceedings of this nature must satisfy the Court that there is a triable issue, and a “triable issue or defence on the merit” is such that the Plaintiff will be required to explain certain matters or where the Defendant’s Affidavit throws some doubt on the Plaintiff’s claim.
The Court is simply required to look at the facts deposed to and see if they can prima facie afford a defence to the action. Thus, a complete defence need not be shown; it is enough if the defence shows that there is a triable issue or question or that for some other reason there ought to be a trial – see F.M.G. v. Sani (1990) 4
NWLR (Pt. 147) 688 se, Bawa v. Phenias (2007) 4 NWLR (Pt.1024) 251, Dala Air Services v. Sudan Airways (2005) 3 NWLR (pt. 912) 394 & Ebong v. Ikpe (2002) 17 NWLR (pt. 797) 504.
In this case, the Respondent averred in paragraph 4 (i) of its Affidavit in support of its Application for leave to have its Writ of Summons entered for hearing under the Undefended list, that –
“- – The Defendant vide a Local Purchase Order No. 010 and a contract agreement of that date, contracted the Plaintiff to supply certain equipment to wit: Ringset Butterfly Valves and Check Valves Spares”
Copies of the contract agreement and LPO were attached thereto as Exhibits 1 and 2 respectively. The Appellant, however, averred in paragraphs 2 (b) and (c) of its Affidavit in support of its Notice of Intention to Defend the action filed by the Respondent that the Respondent was given “6 units of safety wears” to show interested persons and companies, and the Respondent “sold those samples with the mechanical drawings and converted the money to its use”.
It further averred in paragraphs 2 (g) to (k), 3, & 5 of the Affidavit –
(g) The Defendant shall counter-claim for the price of the safety wears (shoes) in the sum of N6,000,000 only and shall ask the Court to deduct the sum of N200,000.00 only from the amount counter-claimed.
(h) That it is only the Defendant that is the representative of the manufacturer of the safety wears in Nigeria.
(i) That the Defendant has done several transactions over the safety wears, some of the L.P.O includes L.P.O. No. 03511 from NNPC in the sum of N3,649, 298.44, which is annexed as Exhibit A. L.P.O. No.10412 of Sept. 2000 in the sum of N2,000.000.00, which is hereby annexed as Exhibit B. L.P.O. No. 10882 issued to Reach Resources Ltd. but executed by the Defendant in the sum of N4,981,800.00 annexed as Exhibit C. L.P.O No. 10738/SA issued to MAHDI MUHAMED & SONS but executed by the Defendant in the sum of N1, 692, 000 annexed as Exhibit E.
j) That the Defendant also executed the following L.P.O. No. 09171 issued to MIS Ding-Yandi in the sum of N2, 400,000.00 annexed as Exhibit F. Also executed by the Defendant is L.P.O. No. 811/H1 issued to Ding-Yandi Trading Co. in the sum of N1,593, 900.00 annexed as Exhibit G and L.P.O. No. 8108/H1 issued to Zumscope Ltd. but executed by the Defendant in the sum of N2,772, 000 annexed as Exhibit H.
- That it will be in the interest of justice to allow the Defendant defends this action as the Plaintiff has caused it an irreparable damage.
- That the safety wears the Plaintiff took away cannot be found anywhere not even with the manufacturers, since the Defendant bought it over from the manufacturers.
- That the Defendant has a good defence to this action and a complete trial will avail all the parties the opportunity to present its case.
The lower Court observed as follows at page 49 of the Record-
“It is important to note the nature of the transaction as per the Plaintiff is that it was in respect of specific items evidenced in the LPO and agreement exhibited as 1 and 2 respectively – – The Defendant, however, speaks of different transactions. The bottom line, however, is the money owed. The money in issue here is strictly the N200, 000 as per the Plaintiff’s claim”.
It proceeded to hold as follows at page 50 of the Record –
“The averments relating to the counter-claim as they stand now cannot in any way whatsoever affect the Plaintiff’s claim of N200,000. The Defendant is not hindered to file a different suit to claim whatever sum, if any against the Plaintiff. – – The justice of this case is to enter Judgment for the Plaintiff – – and advise the Defendant to file, if any, the claim it has against the Plaintiff in an appropriate Court – – “.
I will say without hesitation that the lower Court’s reasoning and conclusion cannot be faulted. To start with, a cause of action is a situation or state of facts that would entitle a party to sustain an action and give him a right to seek judicial remedy or redress.
Such facts or combination of facts, which give rise to a right to sue, consists of the wrongful act of the Defendant that gives the Plaintiff his cause of action and the consequential damage – see A.-G. Fed. v. Abubakar (2007) 10 NWLR (Pt. 1041) 1 SC, Chevron (Nig.) Ltd. v. L.D. (Nig.) Ltd. (2007) 16 NWLR (Pt. 1059) 168 SC, Abubakar v. B.D. & A.P. Ltd. (2007) 18 NWLR (Pt. 1066) 319 SC.
In this case, the Respondent’s cause of action arose from the Appellant’s failure to pay the balance of N200, 000.00 for “Ringset Butterfly Valves and Check Valves Spares”; it supplied “vide a Local Purchase Order No. 010”. There is no reference to L.P.O. No. 010 and the supply of “Ringset Butterfly Valves and Check Valves Spares”, in the L.P.O.’s and transactions listed by the Appellant in paragraphs (i) and (j) of its Affidavit, and it is evident from the said Affidavit that the Appellant’s proposed counter-claim relates to a different transaction altogether, and that it admitted the Respondent’s claim of N200,000.00, which it wanted the lower Court to deduct from its own counter-claim over “safety wears”.
Each case must be decided on its own merit and this is illustrated with the distinction of this case from that of Dyeris V. Mobil Oil Nig. Plc (Unreported) Appeal No. CA/K/277/02, wherein I concluded as follows in our Judgment delivered on the 14th of May 2009 –
“A counter-claim is a procedure in law that allows the Defendant to maintain an action against the Plaintiff, provided the counter-claim is directly related to the principal claim – see Nsefik v. Muna (2007) 10 NWLR (Pt. 1043) 502. In other words, where common questions determinative of a claim and counter-claim arise in a case, the Court is not expected to consider the same questions separately in relation to the counter-claim – see A.G. Kwara State V. Ojulari (2007) 1 NWLR (Pt.1016) 551 at 581. In this case, the Defendants’ counter-claim amounts to a defence that says – “I may owe you but you also owe me because we both agreed that I should renovate and refurbish the building I rented from you”. Obviously, the question of whether the counterclaim is justified or not is a triable issue because it added another dimension to the Respondent’s claim and disclosed facts that would certainly require the Respondent to explain certain matters. The Appellant did not have to file a separate action – – the said counterclaim was so inter-twined and in direct relation to the Respondent’s claim that the only option was to move the action from the undefended list to the general cause list. At that stage of the proceedings, it was not for the lower Court to consider whether the counter – claim will ultimately succeed or not. Its duty was to determine whether the Affidavit in support of the Notice of Intention to Defend disclosed a defence on the merit, and nothing more. It is well settled that it is the duty of a trial Court to maintain an even balance in the consideration of the Affidavits filed by the parties respectively, in order to arrive at a just decision – see Abdullahi v. Buhari (supra). In this case, the lower Court did not really look at the facts deposed to and came to a wrong conclusion. I therefore agree with the Appellant that the lower Court erred in law when it held that the supporting Affidavit to their Notice of Intention to Defend disclosed no defence on the merits to warrant the Respondent’s action being transferred to the general cause list”.
No doubt, I will not arrive at the same conclusion in this Appeal.
The distinguishing factor is that the Counter-Claim in Dyeris v. Mobil Oil Nig. Plc (supra) was “so inter-twined and in direct relation to the Respondent’s claim that the only option was to move the action from the undefended list to the general cause list”, while in this case, the proposed Counter-Claim relates to the transaction over “safety wears”, and has nothing whatsoever to with the transaction that culminated in the action filed by the Respondent.
The Appellant itself noted at page 6 of its brief under its “Summary of Argument” that an allegation of a Counter-Claim related to the case of the Respondent is sufficiently a defence on the merit”, but the allegation in its proposed Counter-Claim is not at all related to the case of the Respondent, and I agree with the Respondent that the Appellant did not also deny, answer or respond to any of the facts constituting its claim; rather it admitted the claim of N200,000.00 in its Affidavit in support of its Notice of Intention to defend.
The law is clear that it is his Affidavit that discharges the burden on a Defendant to show that the grounds for asking to be heard in his defence are not frivolous, vague or craftily designed to filibuster the proceedings. He must show that there is a dispute between the parties – see A.C.B. Ltd. v. Gwagwada (1994) 4 S.C.N.J. (pt.11) 268. In this case, the Appellant did not disclose a real defence on the merit in its Affidavit in support of its Notice of Intention to defend and the lower Court is justified and was right to refuse to transfer the case from the undefended list to the general cause list.
The end result of the foregoing is that the Appeal lacks merit and it is therefore dismissed. The decision of the lower Court in its Ruling delivered on the 12th day of July 2005 is hereby affirmed.
The Respondent is awarded costs assessed at N30,000.00.
Other Citations: (2009)LCN/3360(CA)
