A.A Macaulay V. Nal Merchant Bank Ltd (1990)

LawGlobal-Hub Lead Judgment Report

A.O. AGBAJE, J.S.C.

The plaintiff bank, NAL Merchant Bank Ltd., sued the defendant, Mr. A. A. Macaulay in a Lagos High Court claiming against him as follows:

The plaintiff’s claim against the defendant is for the sum of N93,490.95 (Ninety three thousand, four hundred and ninety naira, ninety-five kobo) being the amount due and payable by the defendant to the plaintiff as at 30th September, 1984 for money lent in form of a term loan to the defendant at the defendant’s request in the normal course of plaintiff’s business as a banker together with interest and the usual bank charges thereon, which sum defendant has refused and neglected to pay A in spite of repeated demands.

And the plaintiff also claims interest on the said sum of N93 ,490.95 at the rate of 91/2% per annum from 1st October, 1984 until judgment and thereafter at the rate of 91/2% per annum until final liquidation of the whole debt together with costs.

The writ of summons containing the claim, dated 21/11/84 and a statement of claim dated 21/11/84 were filed together in the Lagos High Court registry on this same day. Both were served upon the defendant.

Upon the failure of the defendant, within the time prescribed by law, to enter an appearance to the writ of summons or file a statement of defence to the plaintiff’s statement of claim, the plaintiff by motion on notice under order 9 rule 3 and order 24 rule 2 of the High Court of Lagos State Rules of Court and the court’s inherent jurisdiction, applied to court for the following relief:- An order entering final judgment for the plaintiff in the amount claimed in the plaintiff writ of summons and statement of claim together with interest as claimed upon default of appearance and or defence.

The application came up for hearing before Adeniji. J.. on 25/4/85. On that day, counsel for defendant sought and was granted an adjournment for him to regularise the defendant’s position. Nothing significant happened in the case until 1/7/85 when the following occurred in court before Adeniji, J:-

PARTIES.

Absent.

Bayo Adeniji – Fashola for plaintiff/applicant.

Mr. Joseph for defendant.

Case Adjourned. 8/7/85 to

enable defendant file statement of

defence before them with N200

costs to plaintiff/applicant.

Costs to be paid on or before 8/7/85.

Pursuant to the above order of Adeniji. J. 1/7/85.

the defendant filed a statement of defence dated

4/7/85 to the plaintiff’s statement of claim.

It appears therefore quite clear that the

statement of defence was filed regularly. For reasons hereinafter

appearing I have to reproduce

the whole of the statement of defence:-

STATEMENT OF DEFENCE

SAVE AND EXCEPT as herein specifically admitted, the defendant denies each and every allegation of facts contained in the plaintiff’s statement of claim as if each were set out seriatim and specifically traversed the same.

1. The defendant admits paragraphs 1,2,3,4 and 7 of the plaintiff’s statement of claim.
2. The defendant denies paragraph 5, 6, 8. 9 and l0 of the plaintiff’s statement of claim.
3. The defendant shall at the trial of this action rely on the agreement between the parties herein as contained in the letter dated 25th April, 1980 and hereby gives the plaintiff notice to produce same.
4. The defendant avers that pursuant to the aforesaid letter/agreement, the defendant appointed Messrs. Mcgregor and Ojutalayo, chartered surveyors and valuers as his agents.
5. Furthermore by a letter dated 6th May, 1980 the defendant’s aforesaid agents with the defendant’s full knowledge and consent duly noticed the plaintiff of their position and the defendant hereby gives notice to the plaintiff to produce the said letter.
6. The defendant denies the receipt of any debit or revision letter whatsoever from the plaintiff and or its solicitors.
7. The defendant shall at the trial of this action contend that the plaintiff action herein is premature.

WHEREOF defendant denies the plaintiff’s claim of N93,490.95k or at all as same is not due to the plaintiff.

It was after this regular statement of defence had been filed by the defendant that the plaintiff/bank by summons on notice applied to the court under order 10 rules 1 & 2 of the Lagos State High Court Rules for the following relief:

Entering judgment against the defendant for the sum of N93,490.95 (Ninety-three Thousand, Four Hundred and Ninety Naira, Ninety-five kobo) together with interest at the rate of 91/2 per annum from 1st October, 1984 until judgment and thereafter at the rate of 91/2 per annum until final liquidation of the whole debt together with costs.

Order 10 rules 1 & 2 provide as follows:-

1.(a) Where the defendant appears to a writ of summons specially indorsed with or accompanied by a statement of claim under order 3 rule 4, the plaintiff may on affidavit made by himself or by any other person who can swear positively to the facts, verifying the cause of action and the amount claimed (if any liquidated sum is claimed), and stating that in his belief there is no defence to the action except as to the amount of damages claimed, if any, apply to a Judge in chambers for liberty to enter judgment for such remedy or relief as upon the statement of claim the plaintiff may be entitled to. The Judge thereupon, unless the defendant shall satisfy him that he has a good defence to the action on the merits or shall disclose such facts as may be deemed sufficient to entitle him to defend the action generally, may make an order empowering the plaintiff to enter such judgment as may be just, having regard to the nature of the remedy or relief claimed.

(b) If on the hearing of any application under this rule it shall appear that any claim which could not have been specially indorsed under order 3 rule 4, has been included in the indorsement on the writ, the Judge may, if he shall think fit, forthwith amend the indorsement by striking out such a claim, or may deal with the claim specially indorsed as if no other claim had been included in the indorsement, and allow the action to proceed as respects the residue of the claim.

(c) Where the plaintiff’s claim is for the delivery up of a specific chattel (with or without a claim for the hire thereof or for damages for its detention) the Judge may make an order for the delivery up of the chattel without giving the defendant any option of retaining the same upon paying the assessed value thereof, and such order if not obeyed may be endorsed by a writ of attachment or a writ of delivery.

2. The application by the plaintiff for leave to enter final judgment under rule 1 of this order shall be made by summons returnable in chambers not less than four clear days after service. accompanied by a copy of the affidavit and exhibits referred to therein.

The affidavit in support of the summons read thus:

AFFIDAVIT IN SUPPORT OF SUMMONS

I, Kolade Ajayi, Nigerian Bank Officer, now residing at Block 7, House 14 Satellite town, Lagos hereby make oath and say as follows:

1. That I am an officer in the credit department of the plaintiff company.
2. That I am familiar with the facts of this case and I have the prior authority and consent of the plaintiff to swear to this affidavit.
3. That the plaintiff’s cause of action in this suit is as indorsed in the writ of summons and statement of claim herewith attached and marked exhibit ‘P1’
4. That sometime in April, 1980 the plaintiff granted to the defendant at the defendant’s request a term loan of N70,000.00 (Seventy Thousand Naira) under certain terms and conditions as communicated to the defendant vide plaintiff’s letter JAO/BEE/NAL of 25/4/80, which terms were accepted by the defendant.

5.That the document now shown to me and marked exhibit ‘P2’ is a photocopy of the aforesaid letter showing the said terms and conditions and which copy I confirm as correct having compared it with the original in plaintiff’s custody.

6.That under the terms and conditions governing the loan and accepted by the defendant the defendant was required by paragraph 5 of the same to repay the loan in full within four (4) years from either a.rental income on the bungalows estimated at N12,000.00 (Twelve Thousand Naira) per annum on i.e. N24,000.00 (Twenty-four Thousand Naira) per annum or/and

b. any other sources.

7.That the defendant made full use of the loan granted as aforesaid and as at 30/8/84, his loan account with the plaintiff reflected a debit in the sum of N93,490.95 (Ninety- three Thousand, Four Hundred & Ninety Naira Ninety-five Kobo).

8.The defendant has not in spite of repeated demands paid back the said sum upon which interest at the rate of 91/2% continues to accrue.

9.That the attached and marked Exhibit ‘P3’ are some of the plaintiff’s several letters of demand to the defendant which were never responded to.

10.That I am informed by Mr. Kola Awodein who is the counsel conducting this suit on plaintiff’s behalf and I verily believe him that the defendant duly entered an appearance to this suit through his solicitors Messrs Akin O. Sikuade & Co. and also filed a statement of defence on 8/7/85.

11.That the document now shown to me and marked exhibit ‘P4’ is a copy of the defendant’s statement of defence.

12.That I am informed by Mr. Kola Awodein of counsel and I verily believe him that the statement of defence discloses no defence whatsoever to the plaintiff’s claim.

13. That the document now shown to me and marked exhibit ‘P5’ is a photocopy of the letter referred to in paragraphs of the Statement of Defence and which copy I confirm as correct having examined it with the original in the custody of the plaintiff.

14.That the document now shown to me and marked exhibit ‘P6’ is a copy of the statement of account of the defendant with the plaintiff/applicant which statement has been duly certified by me after examining same with the original entries in the book in the custody of the plaintiff/applicant and having found the same to be true and correct.

15. That the books are those kept by the plaintiff/applicant in the ordinary course of its business and that the entries thereon are those made in the ordinary course of plaintiff’s business.
16. That the defendant has no defence whatsoever to this claim.
17. That I swear to this affidavit in good faith.

The defendant then filed an affidavit showing cause why he should be let in to defend the action. The affidavit read thus:-

1. That I am the above named defendant.
2. That I have been shown a copy of the affidavit of Kolade Ajayi deposed to on the 18th day of October, 1985.
3. That paragraphs 4 and 5 of the said affidavits are true.
4. That I intend to reply on the letter dated 25th April, 1980 referred to in paragraph 5 of the said affidavit.
5. That it was mutually agreed between the plaintiff and myself that time is not the essence of the agreement.
6. That in furtherance of the agreement my sole letting agents caused exhibit ‘P5’ referred to in paragraph 13 to be written to the plaintiff.
7. That I am made to understand by the plaintiff before agreeing with same that the sum of N70,000 is to be repaid to the plaintiff within 4 years of completing the bungalows and tenanting.
8. That it was the averments in paragraph contained in paragraphs 4, 5, 6 and 7 above that lured me on to accepting the loan.
9. That I have repeatedly informed the plaintiff of the state of the bungalows same being uncompleted yet.

10.That the sum of 70,000 or at all is not due to the plaintiff.

11.That the plaintiff’s claim and application before this court is an abuse of the process of this court.

12. That I at no time received any advice or notification from the plaintiff.
13. That I intend to defend the plaintiff’s claim upon the foregoing depositions.
14. That I swear to this affidavit conscientiously.

Adeniji, J. heard the arguments on the application for summary judgment. Giving his ruling on it on 29/11/85 he held as follows:-

….Since the facts and particulars here show that this is a fair dispute as to the meaning of the loan terms and questions of facts may arise I think it is right in the circumstances to grant the defendant leave to defend this suit.

And he accordingly ordered as follows:-

Leave is hereby granted to the defendant to defend the action, and the statement of defence already filed deemed to have been properly filed in the circumstances. The parties are accordingly directed to take out summons for directions.

The plaintiff bank appealed against this ruling to the Court of Appeal, Lagos Division, which in its judgment in the appeal as per the lead judgment of Uthman Mohammed, J.C.A., in which Nnaemeka-Agu, J.C.A., as he then was, and Kutigi, J.C.A. concurred delivered on 21/7/86 held as follows:-

First: In April, 1980, the appellant, on an application by the respondent granted the latter a loan of N70,000.00 with interest at 6 1/2 percent. The respondent accepted and signed the agreement on the terms and conditions specified therein. By the end of four years, after signing the agreement, the loan account of the respondent had gone up to N93,490.95. One of the conditions of offering the loan was that it would be repaid, with interest, within four years of the signature of the agreement.

Second: it is without any doubt that the respondent has not raised any defence in both the statement of defence and the affidavit filed by him in this appeal and I am in agreement with the submission of Mr. Awodein that the appellant is entitled to summary judgment on the claim filed before the High Court.

The appeal therefore succeeds and it is allowed.

The ruling of Adeniji, J., delivered on 29th November, 1985, is set aside. In its place, as applied for in the writ of summons, judgment is hereby entered in favour of the appellant and against the respondent, in the sum of N93,490.95 The respondent shall also pay all the accumulated interests at the rate of 91/2 percent per annum, from the 1st October, 1984 to date. In addition the judgment debt shall yield interest at the rate of 41/2% until the final liquidation of the total debt. I assess costs in favour of the appellant at N50.00 in this court and N150.00 at the court below.

It is against this judgment that the defendant has now appealed to this court briefs of argument were filed and served on both sides. According to the defendant/appellant the issues arising for determination in this appeal are as follows:

1. Whether or not from the state of the pleadings the main issue joined between the parties turns on the construction of the terms and conditions of the agreement between the parties.
2. Whether or not the finding of the learned trial Judge that the appellant made out a prima facie case which

ought to be tried being a finding of fact based on the totality of the evidence before the court ought to have been disturbed by the Court of Appeal.

3. Whether or not order 10 rules 1 and 2 procedure is appropriate in the circumstance of this case particularly in

construing and NOT inspecting document to wit the terms and conditions of the agreement without the assistance

of the arguments of both counsel and purely on affidavit evidence.

4. Whether or not the parties from the materials before the court agreed that the loan would be repaid, with interest, within four years of the signature of the agreement”, and if so whose signature

The main thrust of the submissions of counsel for the defendant/appellant Mr. C.O. Joseph on all the issues said to arise in this case is that the resolution of the dispute between the parties to this case turns on the construction of the loan agreement. And, this being so counsel submits this case is not a proper subject matter for the proceedings for summary judgment under order 10 rule 1 of the Lagos State High Court Civil Procedure Rules. For this proposition counsel relies on the following authorities:

Bowes v. Caustic Soda and Chlorine Syndicated (1982-93) 9 T. 328; Jacobs v. Booth’s Distillery Company 85 L.T. 212 H.L. The Law Vol. LXXXV Page 262. Saw v. Khakim Lindsay V. Martin (1888-89) 5 T. L. R. 323 The Electric and General Contract Corporation V. Thomson – Houston Electric Company (1893-94) T.L.R. 103 Ford V. Harvey and other (1892-93) 9 T.L.R. 328.

Counsel for the defendant further makes the point that the Court of Appeal erred when it held:

“One of the conditions of offering the loan was that it would be repaid, with interest, within four years of the signature of the agreement.”

According to the brief of arguments of the plaintiff’s respondent the issues arising for determination in this appeal are as follows:

(a) Whether the Court of Appeal was right in holding that the appellant had no arguable defence to the claim and in entering judgment for the respondent accordingly.

(b) Whether the Court of Appeal was right in examining and construing the relevant documents in evidence in its determination of the case.

(c) Whether a proper application of the relevant provisions of the said order 10 precludes in all events an examination and construction of relevant documents produced in evidence.

These issues are, in my view, vitiations of the issues said by the defendant to arise for determination in this appeal which together boil down to the point whether or not the defendant should be let in to defend the action. And the submission in this regard of counsel for the plaintiff, Mr. Kola Awodein, is that on the whole of the material in this case there is no issue or question in which it ought rightly to be allowed to go to actual trial. In effect, counsel has submitted that the defendant has not raised either in his statement of defence or in the affidavit showing cause against the application any triable issue. He places reliance on the following cases:

1. Verrall v. Great Yarmouth BC (1980) 1 All E.R. 839 at 843,.
2. European Assian Bank v. Punjab and Sind Bank (1983) 2 All E.R. 508 at 516;
3. Nishizawa Ltd. v. S.N. Jethwani (1984) 12 S.C. 234 at 276-7; and
4. Van Lynn Developments Ltd. v. Pelias Construction Co. Ltd. (1968)3 All E.R. 824 at 825.

The provisions of order 10 rules (1) and (2) were considered in depth in the case of Nishizawa Ltd. v. S.N. Jethwani (1984)12 S.C. 234 by this court. It will be a work of supbrogation if I were to undertake to examine the provisions afresh and construe them. I think it is enough for me if I apply the decisions in the case to the case in hand or state my reasons why a particular decision in the case will not apply here.

It is to be noted as I have said earlier on in this judgment the defendant’s statement of defence to the plaintiff’s statement of claim was filed regularly. So an important feature of this case is that there was a regular statement of defence in existence before the plaintiff applied for summary judgment under order 10 rule 1. In Nishizawa Ltd. V. Jethwani Ltd. (supra) this court was confronted with a situation where a statement of defence was filed after an application for summary judgment was made but before leave to defend the action was given to the defendant by court. It was in this con that the relevance of the statement of defence filed was pronounced upon in the consideration of the point whether or not the defendant in the case should have been let in to defend.

In Nishizawa Ltd. V. Jethwani, (supra) it was remarked as per the lead judgment of Obaseki, J.S.C., that the English case of Mclardy V. Slateum (1890) 24 Q.B.D. 504 is no authority for the statement that “the fact that he has delivered a defence may be sufficient to enable a defendant to get leave to defend” but only an authority for the proposition that “the plaintiff’s application for judgment may be made even after the delivery of a statement of a defence.

I consider the decision in the case of Mclardy V. Slateum (supra) very much relevant to the case in hand. So it behoves me to set down the decision in the case at page 506 of the report by Pollock, B.:-

This is an appeal from an order of Field, J., at chambers, setting aside an order of a master, who, upon an application under order XIV., had given the defendant leave to defend upon paying the amount of the claim into court.

The order of Field, J., proceeded upon his view of the proper construction of order XIV r.1, namely, that the plaintiff was bound to make his application for summary judgment before the defendant had put in any statement of defence. We took time to consider our judgment, principally because we were desirous of ascertaining what was the practice followed by other Judges, and by the masters, in consequence of being informed by counsel that Field, J., had long ago decided, in an unreported case, that the application must be refused if made after delivery of a statement of defence. We have made those inquiries, and learnt that the view of Field, J., still is that the intention of order XIV was that the plaintiff must make his application before delivery of a statement of defence; but that in peculiar circumstances it may be made after, as where the defendant has delivered his defence before the expiration of the usual time, for the very purpose of defeating such an application. The view taken by other Judges, and by the masters, is that the intention of order XIV r.1, was that the plaintiff should apply within a reasonable time after the appearance of the defendant, but that it very often happens that a defence, which has been delivered, itself discloses facts which make an application under order XIV right and proper. We think that this is the proper construction of the rule. (Italics mine)

As I have said earlier on in this judgment the statement of defence in the instant case was filed regularly. It appears from the decision in Mclardy v. Slateum (supra) that before that case the view was that upon a proper construction of order XI rule 21 (U.K. Rules of Court) which as I have said is in pari materia with order 10 rule 1 of the Lagos High Court Civil Procedure Rules the plaintiff was bound to make his application for summary judgment before the defendant had put in any statement of defence. My understanding of the decision in Mclardy v. Slateum is that that case has not swept away that view. What it has done, in my view, is that it recognises an exception to that view, namely, when it happens that a defence, which has been delivered, itself discloses facts which make an application for summary judgment right and proper. It appears to me that when an application for summary judgment is made under these circumstances, one must perforce have recourse in the first instant to the statement of defence delivered in the consideration of the point whether or not to grant the application. If the statement of defence in fact shows a triable issue, then the application will be refused. If it does not, then recourse will be had to the affidavit of the defendant showing cause to the application with a view to finding out if the defendant, in the language of order 10 rule 1(a) of the High Court of Lagos State Rules has satisfied the Judge that he has a good defence to the action on the merits or that he, the defendant, has disclosed such facts as may be declared sufficient to entitle him to defend the action generally.

On all the matters which the trial Judge has to consider before coming to his decision as to whether or not to make an order empowering the plaintiff to enter summary judgment against the defendant, the trial Judge is not without guidance. In Nishizawa Ltd. v. Jethwani (supra) at page 260 this court quoted with approval Notes 14/3 – 4/4 to order 014 r.3 of the English Rules on summary judgment in the Supreme Court Practice 1976 as guidance to a court dealing with a matter of this nature:-

The defendant’s affidavit must “condescend upon particulars”, and should, as far as possible, deal specifically with the plaintiff’s claim and affidavit, and state clearly and concisely what the defence is, and what facts are relied on as supporting it. It should also state whether the defence goes to the whole or part of the claim, and in the latter case it should specify the part.

A mere general denial that the defendant is indebted will not suffice (Wallingford V. Mutual Society (1880) 5 App. Cas., per Lord Blackburn, at p.704; Re General Rail Syndicate, Whiteley’s Case, (1900) 1 Ch., per Lindley, M.R., at p.369 Anon., (1875) WN 249, per Quain, J., at p.250) unless the grounds on which the defendant relies as showing that he is not indebted are stated (ibid.). If the affidavit commences, as it may, with a statement that the defendant is not indebted to the plaintiff in the amount claimed, or any part thereof, it should proceed to state why the defendant is not so indebted, and to state the real nature of the defence relied on (Re General Rail, Syndicate, supra).

Again, it is not enough for the defendant to show a case of hardship but creating no enforceable right, e.g., past promise by plaintiff unsupported by valuable consideration (Woolston V. Baines, (1876) W.R. 74), nor a mere inability to pay (Besant V. Townsend, 22 L.R. Ir. 389), nor an allegation that the plaintiff has given time for payment which, of course, constitutes no defence unless there be consideration (Hookham V. Nayer (1905), 22 T.L.R. 241).

If the defence relied on is fraud the affidavit should state the particulars of the fraud (Wallingford V. Mutual Society (1880) 5 App. Cas. 685). A mere vague general allegation of fraud is useless (ibid).

Similarly, if a legal objection is raised, the facts and the point of law arising thereon must be clearly stated.

Indeed, in all cases, sufficient facts and particulars must be given to show that there is a bona fide defence (Wallingford V. Mutual Society (1880), 5 App. Cas. 685, see judgment of Lord Blackburn at p.704; Harrison v. Bottenheim, 26W. R. 362; Ray V. Barker, 4 Ex. D. 283; Shurmur V. Young (1889), 5 T.L.R. 155). Matter of hearsay is admissible in the defendant’s affidavit (Harrison V. Bottenheim (1878), 26 W.R. 362, C.A.), provided that the sources and grounds of information or belief are disclosed see rule 4(2), supra, and Re Young Manufacturing Co., (1900)2 Ch. 753, C.A.; and cf. 0.41 r.5. The defendant’s affidavit is not conclusive and does not preclude him from relying on defences not raised in it (Ray V. Newton, (1913) 1 K.B., per Hamilton, L.J. at p.258).

The case of Jacob’s v. Booth’s Distillery Company (1901-2) volume 85 N.S. The Law Times Report 262 is authority for the proposition that judgment should only be ordered under order XIV (U.K. Rules) dealing with summary judgment where assuming all the facts in favour of the defendant, they do not amount to a defence in law.

The same case also decides it that where there is a triable issue, though it may appear that the defence is not likely to succeed the defendant should not be struck out from laying defence before the court either by having judgment against him or by being put under terror to pay money into court as a condition of obtaining leave to defend. The case of the Electric and General Contract Corporation V. The Thomson – Houston Electric Company 1893 – 94 Vol. X The Times Law Report 103 is authority for the proposition that order XIV (U.K. Rules) providing for summary judgment does not apply to cases raising what may turn out to be difficult question of law. The case of Ford V. Harvey & anor. 1892-95 9 T.L.R. 328 is authority for the proposition that order XIV (U.K. Rules) which allows summary judgment to be entered is not intended to apply to cases in which there is a fair dispute as to the meaning of a document.

In the dealing with an application for summary judgment under the relevant rule of court the following passage in the speech of the Lord Chancellor (Halsburys) in Jacobs V. Booth’s Distillery Company (supra) is worthy of note:-

The Lord Chancellor said “People do not seem to understand that the effect of order XIV is, that, upon the allegation of the one side or the other a man is not to be permitted to defend himself in a court; that his right are not to be litigated at all. There are some things too plain for argument; and where there were pleas put in simply for the purpose of delay, which only added to the expense, and where it was not in aid of justice that such things should continue, order XIV was intended to put an end to that state of things, and to prevent sham defences from defeating the right of parties by delay and at the same time causing great loss to plaintiffs who were endeavouring to enforce their rights.”

I can now go on to the consideration of the arguments from both counsel in this court. I have set down earlier on in this judgment the statement of defence of the defendant and his affidavit showing cause against the application for summary judgment. I have set down the statement of claim of the plaintiff/bank.

By paragraph 1 of the statement of defence, the defendant admits paragraphs 1, 2, 3, 4 and 7 of the statement of claim. In effect, the defendant admits the following averments in the plaintiff’s statement of claim:

3. Sometime in April 1980, the plaintiff at the specific request of the defendant granted to the defendant term loan of N70,000 (Seventy Thousand Naira) under certain terms and conditions which terms and conditions were accepted by the defendant. The plaintiff will rely on its letter dated 25/4/80 by which the loan was granted and the defendant’s signature thereon signifying his acceptance of the terms and conditions stated therein.
4. The plaintiff avers that the defendant made full use of the loan granted as aforesaid and that as at 30th September, 1984, the defendant’s loan account reflected a huge outstanding sum of (N93,490.95) Ninety-three Thousand, Four Hundred and Ninety Naira, Ninety-five kobo).

On the authority of Seldon v. Davidson (1968) 2 All E.R. 755 it is clear that once the defendant admits the receipt of the loan the burden of proof as to repayment or as to the reasons for non repayment is on the defendant. The only thing in respect of the latter is paragraph 7 of the statement of defence which says:

7.The defendant shall at the trial of this action contend that the plaintiff action herein is premature.

Paragraph 7 of the statement of defence contains no facts and particulars indicating that the plaintiff’s action is premature. So on such authorities as Wallingford V. Mutual Society (supra) Harmson V. Buthenliejin (supra) Ray V. Baker (supra) and Sharmier V. Young (supra) such a defence will not be discountenanced in an application for summary judgment. So in my judgment the plaintiff was in order on the authorities in applying for summary judgment after the defence has been filed. For the defence shows facts which made such an application necessary and proper. And in my judgment the defence does not raise a triable issue.

This is not the end of the matter. I have said that the defendant in addition to his statement of defence has filed pursuant to order 10 rule 3 an affidavit showing cause against the application for summary judgment. It therefore behoves me to see if the lower court, guided by the relevant authorities ought to have been satisfied as the trial court was, that the defendant has a good defence to the action on the merits or that the defendant has disclosed such facts as may be deemed sufficient to entitle him to defend the action generally.

I have set down earlier on in this judgment the affidavit of the defendant. By paragraph 3 of the affidavit he admits paragraphs 4 and 5 of the affidavit in support of the application for summary judgment which say:-

” 4. That sometime in April 1980, the plaintiff granted to the defendant at the defendant’s request a term loan of N70, 000.00 (Seventy Thousand Naira) under certain terms and conditions as communicated to the defendant vide plaintiff’s letter JAO/BEE.NAL of 25/4/80, which terms were accepted by the defendant.

5. That the document now shown to me and marked exhibit ‘P2’ is a photocopy of the aforesaid letter showing the said terms and conditions and which copy I confirm as correct having compared it with the original in plaintiff’s custody.”

The effect of this admission is that both parties to this case are agreed that the terms and conditions of the loan which the plaintiff undoubtedly granted the defendant are contained in the plaintiff’s letter to the defendant reference No.JAO/BEE.NAL of 25/4/80 a copy of which is exh.P2 exhibited in this application.

Exhibit P2 reads thus:-

“Dear Sir,

TERM LOAN FACILITY

With reference to your applications of 9th April

and 7th May, 1979, and further to our

subsequent discussions, we are pleased

to offer you a term loan of N70,000.00

(Seventy Thousand Naira) subject

to the following terms and conditions:-

1. AMOUNT: The maximum amount that may

be drawn under this facility is

N70,000.00 (Seventy Thousand Naira Only).

2. PURPOSE: To provide you with part of

the finance required for the completion of

your two bungalows under construction

at Ogba residential estate costing N113,000.00.

3. PERIOD: This facility is available for a

maximum period of four years in accordance

with the repayment programme as

contained in paragraph (5) below.

4. AVAILABILlTY: This loan will be made a

vailable to you immediately upon

your acceptance of and compliance

with its terms and conditions.

Disbursements will however take the

form of direct payment to your contractors

against the certificate of an approved architect/quantity surveyor.

5. REPAYMENT: Repayment is to be

effected in full within four years from either.

(a) rental income on the two bungalow

estimated at N24,000.00 per annum or/and

(b) any other sources.

In the case of (a), we are to be given an

irrevocable letter of undertaking by

your letting agents domiciling

all the rental income on the property to us.

6-9 not relevant.”

The other paragraphs in the defendant’s affidavit on which he can possibly rely as containing his defences or facts which should be deemed sufficient to entitle the defendant to defend the action generally are as follows:-

4. That I intend to rely on the letter dated 25th April, 1980 referred to in paragraph 5 of the said affidavit.
5. That it was mutually agreed between the plaintiff and myself that time is not the essence of the agreement.
6. That in furtherance of the agreement my sole letting agents caused Exhibit ‘P5’ referred to in paragraph 13 to be written to the plaintiff.
7. That I am made to understand by the plaintiff before agreeing with same that the sum of N70,000.00 is to be repaid to the plaintiff within 4 years of completing the bungalows and tenanting.
8. That it was the averments in paragraph contained in paragraphs 4, 5, 6, and above that lured me on to accepting the loan.
9. That I have repeatedly informed the plaintiff of the state of the bungalows and same being uncompleted yet.
10. That the sum of N70,000 or at all is not due to the plaintiff.

At this stage I will refer to notes 14/3-4/3 to order 14 (U.K.) in the Supreme Court Practice 1976 dealing with defendant showing cause against an application for summary judgment: –

The defendant may show cause against the plaintiff’s application.

(1) by a preliminary or technical objection, e.g that the case is not within this order or that the statement of claim or affidavit in support is defective, such as no due verification of the claim. No affidavit is required in support of such objection. CF. Bradley V. Chamberlyn (1893) 1 Q.B.439. If the objection is fatal, the master will then dismiss the application under rule 7 or give unconditional leave to defend; if the defect is capable of amendment, the master may give leave to amend and proceed on the application as amended, subject to the questions of adjournment and costs;

(2) on the merits, e.g., that he has a good defence to the claim on the merits, or that a difficult point of law is involved, or a dispute as to the facts which ought to be tried, or a real dispute as to the amount due which requires the taking of an account to determine, or any other circumstances showing reasonable grounds of a bona fide defence.

Then I must remind myself of the provisions of section 131 of the Evidence Act which says:

(1) When any judgment of any court or any other judicial or official proceedings, or any contract, or any grant or other disposition of property has been reduced to the form of a document or series of documents, no evidence may be given of such judgment or proceedings, or of the terms of such contract, grant or disposition of property except the document itself, or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions hereinbefore contained; nor may the contents of any such document be contradicted, altered, added to or varied by oral evidence: The provisos (a) – (e) not relevant.(Italics mine).

As I have said above the defendant has himself admitted in his affidavit that the terms and conditions of the loan agreement between him and the plaintiff have been reduced into writing. In the circumstances and having regard to the provisions of section 131(1) of the Evidence Act, can the defendant be heard to say that besides these written terms and conditions there is other evidence of the terms of the loan agreement I have no difficulty at all in answering the question in the negative. So in my judgment it is only the written conditions and terms of the loan agreement that are evidence of the loan’s terms and conditions. So paragraphs 5 and 7 of the defendant’s affidavit to wit:-

“5. That it was mutually agreed between the plaintiff and myself that time is not the essence of the agreement.

7. That I am made to understand by the plaintiff before agreeing with same that the sum of N70,000.00 to be repaid to the plaintiff within 4 years of completing the bungalow and tenanting.”cannot in my judgment be relied upon as raising

(1) a good defence on the merits, or

(2) a difficult point of law to be resolved or

(3) a dispute as to facts to be tried or

(4) any other circumstances showing reasonable grounds of a bona fide defence.

The upshot of what I have just said is that the resolution of the question whether or not the application for summary judgment under order 10 rule 1 of the Lagos High Court Rules should be granted revolves squarely around the written conditions and terms of the loan agreement as contained in exh. “P2”.

The learned trial Judge granted the defendant leave to defendant because according to him, there is a fair dispute as to the meaning of the terms and conditions of the loan. He relied on the case of Ford V. Harvey (1893) Q.B.D. 228.

The lower court overturned, as I have said above, this decision of the trial court. That court treated exh. “P2” containing the terms and conditions of the loan as of paramount consideration in this case. Mohammed, J.C.A., in his lead judgment held that one of the conditions of offering the loan was that it would be repaid with interest within 4 years of the execution of the loan agreement. In effect the learned Justice of appeal has construed exhibit “P2”.

Counsel for the plaintiff Mr. Joseph has submitted to us that it was wrong of the learned Justice of the Court of Appeal to have embarked at all on the construction of the exhibit in an application for summary judgment. It was submitted that he should have limited himself to finding out if there was a fair dispute as to its meaning as the trial court had done. It was further submitted that in any case the construction which the learned Justice put on it was wrong. It was at this stage that counsel was asked by us, that since paragraph 7 of the statement of defence which pleads that the plaintiff’s action is premature what construction of exh.P would he be contending for as to the time when the four year period for the repayment of the loan would begin to run. Try as we could we were unable to get a clear cut reply from him. Again when we asked him to disclose to us the reasons why the defendant was saying that the plaintiff’s action was premature, there was nothing specific from him. All I can gather from the replies of counsel is that time is not of the essence of the contract sued upon, a contention already raised by paragraph 5 of the defendant’s affidavit showing cause and which I have already considered and rejected.

For the plaintiff it was contended by his counsel Mr. Awodein that since the only issue in this case is the construction of exhibit “P2″. and the point does not involve any difficult point of construction the issue can be resolved in an application of this nature and final judgment entered for the plaintiff or the defendant as the case may be. He relied on the case of Van Lynn Development Ltd. v. Pelicas Construction Co. Ltd. (1968) 3 All L.R. 824 at 825 and the other cases he cited to us which I have noted earlier on in this judgment.

I cannot say that the Court of Appeal was wrong in embarking on the construction of exh.P2 at all. If it could not how would it know whether or not there is a fair dispute as to the meaning of the terms and conditions of the loan agreement

It is said in Jacobs v. Booth’s Distillery Company (supra) that judgment should only be ordered in application for summary judgment where assuming all the facts in favour of the defendant, they do not amount to a defence in law. By the same token where in an application for summary judgement and the only point involved is the construction of a document which document is capable of more than one meaning, then one tries and fathoms all the meanings capable of being given to the document, and if any of them gives the defendant a defence in law to the action, then there is a fair dispute as to the meaning of the document which will entitle the defendant to defend the action. If, on the other hand, none of the meanings which the document is capable of bearing can give a defendant a defence to the action then there can be no fair dispute as to the meaning of the document. In which case the defendant has not shown that the case raises a triable issue and summary judgment will be entered against him.

I can now go and examine exh.P2 containing the terms and the conditions of the loan. It is common ground that the defendant has taken the loan. What has to be ascertained from exh.P2 are the terms for the repayment of the loan. The relevant provisions in exh.P2 in this regard are clauses 3 and 5 thereof which say:-

3. PERIOD:This facility is available for a maximum period of four years in accordance with the payment programme as contained in paragraph (5) below.
4. REPAYMENT: Repayment is to be effected in full within four years from either

(a) rental income on the two bungalows estimated at N12,000.00 per annum i.e.N24,000.00 per annum or/and

(b) any other sources.

It is clear beyond a peradventure that the period within which the loan granted to the defendant is to be repaid is a maximum one of 4 years. And equally clear is the fact that there is nothing in exh.P2 by reference to which one can possibly jettison the clear provision as to the period for the repayment of the loan. The statement in exh.P2 as to where the money for the repayment of the loan would come from, namely,

(a) rental income on the two bungalows estimated at N12,000.00 per annum i.e. N24,000.00 per annum or/and

(b) any other sources; and

In the case of (a) the plaintiff/bank is to be given an irrevocable letter of undertaking by the defendant’s letting agents committing all the rental income on the property to the plaintiff.” are clear and unambiguous and cannot at all be stretched in its meaning to constitute a gloss on the period for the repayment of the loan. So, in the final analysis, the only issue arising from the examination of exh.P2, on which there can be any worthwhile differences of opinion is as to the point in time when the maximum period of 4 years for the repayment of the loan will begin to run.

This takes me to clause 4 of exh.P2 which says:

4. AVAILABILITY:This loan will be made available to you immediately upon your acceptance of and compliance with its terms and conditions. Disbursements will however take the form of direct payment to your contractors against the certificate of an approved architect/quantity survevor.

Perhaps it is clause 4 which informed the Court of Appeal in its decision which is criticized before us that one of the conditions governing the loan agreement is that the loan would be repaid with interest within four years of the date of the execution of the agreement. However, clause 4 says the defendant cannot avail himself of loan facility until after the agreement for the loan has been entered into. It then goes on to say that the disbursements of the loan will be made by the bank. So, exh.P2 envisages a situation where full utilisation of the loan will not occur until after the loan agreement itself has been executed. So, an alternative view to that of the Court of Appeal is that time for the repayment of the loan will not begin to run until the loan have been fully disbursed by the bank, that is to say, until the defendant has fully utilised the loan. The defendant is entitled to have this view as to when the time for the repayment of the loan will begin to run considered in the application for summary judgment. And if on that view point the defendant will have a defence in law to the action then the application for summary judgment must fail.

It now remains for me to see if this view point of exh.P2 can possibly give the defendant a defence in law to the plaintiff.

It is an admitted fact in the case now before us that, as at 31st October, 1980, the defendant has fully utilised the loan facility which the plaintiff bank granted him. The plaintiff brought this action for the recovery of the loan on 21st November, 1984, that is to say, more than a period of 4 years after the defendant has in fact taken it. Evidently in these circumstances, even on this view point of exh. P2, the defendant has not shown a defence in law to the plaintiff’s action. So, in my judgment on all the possible constructions which can be put on exh. P2 it cannot be said that the defendant has a defence in law to the plaintiff’s action. In effect it cannot be said, in my judgment, that there is a fair dispute as to the meaning of the terms and conditions of the loan agreement, whereby, on the authorities the defendant is entitled to be let in to defend the plaintiff’s action.

Before I conclude this judgment, I should refer to the case of Van Lynn Developments Ltd. V. Pelias Construction Co. Ltd. (supra) at 825 cited to us by counsel for the plaintiff, Mr. Awodein. The defendants in the case had a bank overdraft which was paid off by the plaintiffs in consideration for an assignment of the debt to themselves. The assignment was dated June 26, and on June 27 the plaintiffs called on the defendants for payment. In the letter of June 27, it was stated (incorrectly) that notice of the assignment had previously been given to the defendants. On the question whether the letter of June 27 constituted a valid notice of assignment, and as to the propriety of the procedure for summary judgment in that circumstance Lord Denning, M.R. said:-

There was one sentence in that letter which was inaccurate. It is the sentence, “Notice of this assignment has already been given to you.” That was wrong. No notice of assignment had been given. But the question is whether, in spite of that wrong statement, the letter itself is a notice of assignment such as to satisfy the statute. That is a pure question of law. It is a point which we can decide today. It is an arguable point, no doubt, but I do not think we should give leave to defend simply to have it argued again. This court is in as good a position as it ever will be to decide the matter. So I think we should decide it, even under R.S.C. Ord. 14.

Lord Denning having considered all the relevant law then held:-

“The assignment is properly sued on here. I do not see that there is any defence of any substance in the case whatsoever. Something was said about the new wording of R.S.C., Ord. 14 r.3. I do not think it makes any alteration from the previous wording. It only states in simple words the principles on which we have acted for many years under R.S.C., Ord. 14. The Judge gave leave to defend conditional on the full amount being paid into court. The defence was so shadowy that the condition was rightly imposed.”

On that authority if I had held that there is a fair dispute as to when the time for the repayment of the loan would begin to run, I would have resolved that issue here and now. Although it would be then an arguable point which might entitle to the defendant leave to defend the action, yet because

(1) no difficult question of construction is involved and

(2) no other point is involved, I would not have remitted the case to the trial court for a decision in it.

I have held that the lower court was wrong in its decision that time for the repayment of the loan began to run from the time the contract agreement was signed. I would have held that time for the repayment of the loan would begin to run from the time the defendant fully utilised the loan. The fate of the plaintiff’s claim would then depend on whether or not it instituted its action after 4 years of the admitted date when the defendant utilised the loan, which will mean judgment for the plaintiff.

In sum, I dismiss the defendant’s appeal. I affirm the decision of the lower court entering summary judgment in favour of the plaintiff as follows:-

Judgment is hereby entered in favour of the appellant and against the respondent, in the sum of N93,490.95. The respondent shall also pay all the accumulated interests at the rate of 9 percent per annum, from the 1st October, 1984 to date. In addition the judgment debt shall yield interest at the rate of 4% until the final liquidation of the total debt. I assess costs in favour of the appellant at N250.00 in this court and N150.00 at the court below.

I award the plaintiff/respondent the costs of this appeal against the defendant/appellant in the sum which I assess at N500.00.

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SC.186/1986