Access Bank Plc V. Vicapek International Limited & Anor (2016)
LawGlobal-Hub Lead Judgment Report
JAMES SHEHU ABIRIYI, J.C.A.
This is an appeal against the judgment delivered on the 9th March, 2012 in the High Court of Osun State holden at Osogbo wherein the Respondents were the Plaintiffs while the Appellant was the Defendant/Counterclaimant.
The claim of the Respondents against the Appellant was for the following:
(i) A declaration that by the terms and condition of the Forth (sic) Three Million Naira (N43,000,000.00k) Bankers Acceptance Facility agreement entered between the Claimant and the Defendant which agreement was executed by the Claimant at Osogbo on 21st December, 2007, the Claimant is not in any way, form or manner indebted to the Defendant.
(ii) A declaration that by terms of the written agreement between the Claimant and the Defendant the collateral securities for the said facility are the Claimant’s shares at Zenith Bank Plc, Professional shares purchased by the Defendant’s subsidiary Intercontinental Securities Limited and no more.
(iii) An order directing the Defendant to give a true and accurate account of the value of the Claimant’s shares in its
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custody at the expiration of the tenure of the said facility and to pay the balance (if any) into the account of the Claimant.
(iv) An order of perpetual injunction restraining the Defendant, by itself, its solicitors (especially Wilson Atirene of the law firm of WILSON ATIRENE & CO) agents, representatives or privies and the Law Enforcement Agents from further harassing embarrassing and arresting the Claimant, its agents representatives or privies as a result of the facilities which is the subject matter of this suit or any matter relating thereto.
(v) The sum of Five Hundred Million Naira Only (N500,000,000.00) being general and special damages for the arrest, assault, defamation, deprivation and tribulation of the 2nd Claimant as a result of the her (sic) arrest detention and humiliation suffered consequent upon her travails on 9th of September, 2009 in the premises of the Eagles Squad of the Osun State Police Command, Osogbo.
(vi) Another sum of N20,000,000.00 being special damage in consequence of the defendants failure or default to sell the shares at the expiration of the tenor of the facility which sum of money would have accrued as
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profit on the said date to the 1st Claimant.
PARTICULARS OF SPECIAL DAMAGES
1. Medical bills, drugs and other expenses as (sic) different hospitals N5,000,000.00k
2. Expected profit to the 1st Claimant from Sales of shares within N20,000,000.00k
GENERAL DAMAGES N495,000,000.00k
TOTAL N520,000,000.00k
The Appellant’s counterclaim against the Respondents was for the following:
a. The Sum N83,931,930.10 (Eighty Three Million Nine Hundred and Thirty One Thousand Nine hundred and Thirty Kobo) as at 31st day of July, 2010.
b. Claim of 17% on the sum of N83,931,930.10 (Eighty Three Million Nine Hundred and Thirty One Thousand Nine hundred and Thirty Kobo) from the 31st day of July 2010 until judgment of the Court is pronounced.
c. Claim of 10% per annum on the adjudged sum until the judgment sum is finally liquidated.
d. DECLARATION that in the event that the value of the Zenith shares over which defendant exercise a lien does not completely pay off the adjudged sum, the defendant shall be entitled to sell whatever asset of 1st claimant available.
The case of the Respondents through their lone witness was that
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the 1st Respondent was and still is a customer of the Appellant. By an agreement between the parties the Appellant advanced the sum of N43 million which was to be transferred to Intercontinental Securities Limited for the purchase of shares. The 1st Respondent was asked to submit an irrevocable letter authorizing the Appellant to sell the existing shares and remit the proceeds to its account and it complied. The Respondents also executed a document authorizing the Appellant to sell the pledged shares.
The tenor of the facility was six months and it therefore lapsed on 1st June 2008 which was the point at which the lien became enforceable.
Instead of the Appellant enforcing the lien, it held on to the shares purchased by its subsidiary Intercontinental Securities Limited until the stock exchange market started crashing on or about the 25th July 2008.
Repayment was conditioned upon the following factors;
(a) The exercise of power of sale of the shares by the Appellant immediately the value of the shares fell by 15% or
(b) The sale of the shares by the Appellant at the expiration of the six months tenor.
That if the Appellant had
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complied with the terms of the agreement by selling off the shares 25 days from the end of the transaction or at the expiration of the tenor on 1st June 2008, the whole facility would have been paid up and the Respondents would have got not less than N20million as profit and the Respondents are not indebted to the Appellant.
Notwithstanding this, the Appellant through its agents have subjected the Respondents to a regime of harassment claiming that the Respondents were owing the sum of over N58,297,111.
That on 9th September, 2009 policemen from Police Eagle Squad Osogbo picked the 2nd Respondent upon the complaint of the Appellant and she was detained for nine hours consequent upon which she was admitted in the hospital and she spent N5million on medical treatment.
The defence of the Appellant and evidence in proof of the counterclaim through a sole witness was that sometimes in 2007; Elder M. A. Ojo approached the Appellant to enquire how his company could benefit from the I – margin facility of the Appellant. Elder M. A. Ojo is the promoter the 1st Respondent.
The 1st Respondent later sent in a letter to the appellant requesting for
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N43million loan to purchase Zenith Bank Plc Shares. The Respondents promised in the letter to repay the loan within 6months subsequently the parties entered into an agreement dated 21st December, 2007 by which the Appellant advanced a loan of M3million to the Respondents at 17% interest per annum.
That it was never an undertaking between the parties that the repayment of the loan was conditioned on the sale of the Zenith Bank shares and no more. That the word collateral was never used in the agreement.
That the Appellant was never negligent or liable in damages to the Respondents for failure to sell the shares when share prices started dropping.
That it was not possible to sell the shares without the shares’ certificate. That after the shares’ certificate was out Elder M. A. Ojo stealthily collected it from Zenith Bank Plc through his brother working at Zenith Bank. This deprived the Appellant of the opportunity of selling the shares.
The Appellant had to apply again to Zenith Securities for re-issue of another certificate.
That the 1st Respondent was indebted to the Appellant in the sum of N85,931,930.10 as at 31st October 2010 which
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it has failed to pay despite entreaties necessitating the appointment of a recovery agent.
That the purported harassment of the 2nd Respondent was not approved by the Appellant.
After considering evidence led by both parties and addresses of their counsel the lower Court entered judgment in favour of the Respondents and dismissed the counterclaim of the Appellant.
Dissatisfied with the decision of the lower Court, the Appellant approached this Court by an initial notice of appeal dated and filed 14th May 2012. With leave if this Court granted on 3rd June 2015, the Appellant filed an amended notice of appeal dated and filed 4th June, 2015. The amended notice of appeal contains ten grounds of appeal from which the appellant presented the following four issues for determination:
i. Can the learned trial judge be justified in law for making use of and heavily relying on, the PW1’s Statement on Oath when PW1 admitted under cross-examination that she signed the said Statement on Oath in her office?
ii. Was the trial judge correct in law to have held the Appellant liable for the tortuous acts of Wilson Atirene, Esq. of counsel and, on the
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basis of that holding, to have awarded N20,000,000.00 (Twenty Million Naira) general damages against the Appellant?
iii. Whether the learned trial judge came to a right and correct decision in awarding any of the reliefs claimed by Plaintiffs/Respondents.
iv. Whether the learned trial judge reached a right and correct decision when he dismissed the Counter-Claim of the Appellant.
The Respondents on the other hand formulated the following issues for determination :
(1) Whether the learned trial judge was wrong in holding that the Appellant has breached the condition of the contract between her and the Respondents.
(2) Whether the learned trial judge was wrong in holding the Appellant liable for the acts of her agent which has occasioned injury on the 2nd Respondent.
(3) Whether the learned trial judge was wrong in making use of the evidence of PW1, a victim of the wrongful act of the Appellant’s recovery Agent in the determination of this case.
(4) Whether the learned trial judge was wrong in dismissing the counter-claim of the Appellant.
The appeal was thus argued on the following briefs:
1. Appellant’s Brief of
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Argument dated and filed on 4th June 2015 settled by Solomon S. Wada Esq.
2. Respondents’ Brief dated and filed on 25th February 2016 settled by S. O. Popoola Esq.
Arguing the appeal learned counsel for the Appellant referred the Court to evidence of the Pw1 under cross-examination to the effect that she signed her written statement on oath in her office. The office of the Pw1, it was submitted is not the Registry of the lower Court. The implication of the admission of Pw1 that she signed the written statement on oath in her office, it was contended, is that it is inadmissible because it was made contrary to Section 117 (4) of the Evidence Act 2011.
On issue 2, it was submitted that the holding by the lower Court that the Appellant was liable in damages in the sum of N20million in favour of the Respondents is erroneous in law on the following grounds:
Firstly, the Appellant denied in the pleadings any responsibility for the action of Barrister Wilson Atirene against the Respondent. The burden of proof was then cast on the Respondents to aver to facts and produce evidence of the complaint lodged with the police vide a certified true copy of
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the complaint made to the police or subpoena the appropriate police officer to give evidence.]
The 2nd Respondent, it was submitted did not prove that she was detained by the police for nine hours in view of the Appellant’s defence in the pleading that “Barrister Wilson Atirene was engaged not to use illegal means nor police services in the recovery of the loan but to apply his professional skill…… to recovery the debt.”
The Appellant, it was submitted, could not be held responsible for the acts of Barrister Wilson Atirene. We were referred to Labode v. Oyubu & Anor (2001) 3 SC 15 at 41.
It was further submitted that although Exhibits D and D4 were tendered by the parties, the effect they were intended to have in the case of the Respondents were never pleaded nor canvassed and tested in oral evidence. That Exhibit E was not even pleaded and should be discountenanced. We were referred to N.N.P.C. v. A.I.C. (2001) 49 WRN 140 at 158.
The Respondents, it was submitted, impliedly abandoned the issue of police harassment, arrest and detention as it was not made an issue in the address at the lower Court.
Exhibit D7, it was submitted,
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was pleaded by the Appellant to show that Wilson Atirene was employed to recover the debt by means of his professional skill as a solicitor and not by unlawful means.
On issue 3, learned counsel for the Appellant relied on his arguments on issues 1 and 2 and submitted further that the Respondents ought but failed to plead facts and give evidence of the value of the shares in the capital market as at 1st of June 2008 which the Respondents averred should have been the time for the sale of the shares. They also ought but failed, to plead and give evidence of what would have been the value of the shares as at 1st of June, 2008. It was submitted that it is the difference in the value of the shares at the point of sale and at the point of purchase that will enable a reasonable Tribunal come to a sound decision that the value of the shares as at 1st June, 2008 was enough to pay off the loan of 43million plus the interest element of 17% per annum and that the 1st Respondent is not in anyway, form or manner” indebted to the Appellant. It was submitted that the declaration by the lower Court that the 1st Respondent is no more indebted to the Appellant is faulty
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having regard to paucity of pleaded facts and evidence.
It was submitted that if the first declaration granted by the lower Court is set aside, the 6th relief on special damages should also be set aside.
It was submitted that it was erroneous for the lower Court to have granted the 6th relief for special damages which was for not less than twenty million Naira as profit from the transaction. Special damages, it was submitted do not lend themselves to speculative figures but are with scientific exactitude. We were referred to Joachin E. Oseyomon & Anor v. S. O. Ojo (1997) 7 SCNJ 365 at 386.
It was submitted that there was neither pleading nor evidence from the respondent on (a) the total unit shares the Appellant bought for the 1st Respondent, (b) the price of each unit share; (c) the prevailing market price per unit share at the time the Appellant ought to have sold the shares; (d) the profit on each share and (e) the profit unit share multiplied by total shares to give the figure of special damages.
It was submitted that in the absence of these figures in evidence, the lower Court was in error in awarding N20million damages. The Court
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was referred to Sinyeofori A. Umoetuk v. Union Bank of Nigeria Plc (2002) 3 WRN 62 at 79.
The lower Court, it was submitted, granted special and aggravated damages even though the Respondent did not ask for aggravated damages.
It was submitted that to give a right meaning to the intention of the parties in Exhibit C, the lien on the shares is a security and not a collateral security. The collateral security is the three channels of repayment mentioned in Exhibit C.
The Court was urged to set aside the second declaration granted to the Respondents.
It was submitted that the lower Court had granted relief three by making an order that Appellant give a true and accurate account of the value of the respondents’ shares in the custody of the Appellant at the expiration of the tenure of the said facility and to pay the balance (if any) into the account of the Respondents.
It was submitted that on the face of Exhibit D7 it was inequitable for the Respondents to have gone to Court at all and it was erroneous for the lower Court to have ordered the Appellant to give account of the property both parties had by their own hands surrendered in
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writing to a third party.
On issue 4, it was submitted that the accuracy and correctness as well as the exactness of the sum of N83,931,930.10 contained in Exhibit D3 were not rebutted neither by the evidence of Pw1 nor controverted under cross-examination of DW1 who gave evidence that he was aware that the 1st Respondent was indebted to the Appellant in the sum of N83,931,930.10 as at 31st June 2010 and that the 1st Respondent refused to pay of the huge indebtedness despite several entreaties. The lower Court, it was submitted, ought to have received this piece of evidence.
It was submitted that no evidence was proffered on the averments in the Respondents’ Reply to statement of Defence and Defence to counterclaim. The Reply to the statement of defence and defence to counterclaim was therefore abandoned.
It was submitted that the evidence of DW1 was cogent and credible enough to support the Appellant’s claim for N83,931,930.10.
It was submitted that from the evidence of DW1 under cross examination, after the expiry of the tenure the loan was not cleared up and Exhibit D3 was generated for the period Exhibit D3 covered. It was the Appellant
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who needed Exhibit D3 for proving the counterclaim it was argued.
The Respondents, it was submitted, did not make any issue in their pleadings on the statement of account.
Exhibit D7, it was submitted, was a joint memorandum for a lien to be placed on the shares. From 9th September 2009 the shares had been moved into a CSCS reserve lien account and had been removed from the custody of the Appellant. We were referred to the evidence of DW1 at page 327 lines 4-6 of the record.
The lower Court, it was further contended, erred in dismissing the counterclaim because the Appellant did not observe the terms of the contract. This is so because the DW1 at page 125 of the record stated that it was not possible to sell the shares as the certificate with which to sell the shares was not issued until after six months of the purchase and the prices had started dropping then. That Elder M.A. Ojo the alter ego of the 1st Respondent through a proxy stealthily collected the certificate and hindered the Appellant from selling the shares. That the Appellant had again to apply for another certificate.
The above piece of evidence, it was submitted, was not
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controverted. Therefore the lower Court was wrong to have concluded that the Appellant did not observe the terms of the contract. We were referred to Asafa Foods Factory Limited v. Alraine Nig. Limited & Anor (2002) 52 WRN I at 17.
It was finally submitted that from the pleadings and oral evidence the Appellant proved the counterclaim.
Respondents’ issue 3 is the response to Appellant’s issue 1, issue 2 of the Respondents is the response to Appellant’s issue 2, Respondents’ issue 1 is the response to Appellant’s issue 3 while Respondents’ issue 4 is the response to Appellant’s issue 4.
On issue 3 formulated by Respondents, learned counsel for the Respondents submitted that once the Commissioner for Oaths signs an affidavit as sworn before him, there is a presumption of regularity until the contrary is proved.
It was submitted that a written statement on oath is different from other categories of affidavit which are concluded with the signature of the Commissioner for Oaths and the stamp of the Court. That a written statement on oath is filed along with the case while the deponent still has to enter the witness box and swear before the
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Court, the deponent will adopt statement on oath inside the witness box and will be cross-examined by the opposing counsel. The provision of Section 117 (4) of the Evidence Act, it was submitted, does not validate a written statement on oath until the witness adopts same in evidence and is subjected to cross-examination by the opposing counsel. The written statement on oath, it was contended, remains a mere piece of paper where the witness is not available to give evidence on oath and all the facts therein are deemed abandoned when no evidence is given by the deponent despite the compliance with Section 117 (4) of the Evidence Act. The provision of Section 117(4) of the Evidence Act, it was submitted, is not strictly applicable to a written statement on oath since the witness must of necessity take another oath before the Court before the adoption of his or her written statement on oath.
The Pw1 in this case, it was contended, swore on the Bible in the open Court and adopted her written statement on oath and this procedure has ruled out the possibility of the Pw1 not being the maker of the statement on oath or not being the deponent therein. Therefore the
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lower Court was right in making use of the written statement on oath of the Pw1 and relying on same in the determination of this case.
It was contended that the fact that the Pw1 said under cross-examination that she signed the written statement on oath in her office is not conclusive evidence that she did not sign her signature before the Commissioner for Oaths. That Appellant’s counsel did not ask the Pw1 how the signature of the Commissioner for Oaths appeared on her written statement on oath.
On issue 2, learned counsel for the Respondents asked whether the Appellant was right to appoint a debt recovery agent in respect of the alleged debt of the Respondents. In other words whether the Respondents were actually indebted to the Appellant at the time the Appellant appointed a debt recovery solicitor for the recovery the alleged debt of the Respondent.
It was submitted that the appointment of a debt recovery solicitor in respect of the Respondents’ alleged debt was wrong ab initio as there was no debt for the solicitor to recover from the Respondents on behalf of the Appellant instead it is the Appellant that should give an account of her
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management of the Respondents’ shares in her custody subject to the contractual agreement between them. Appellant it was contended cannot recover any debt from the Respondents until it renders account of the N43million shares of Zenith Bank Plc purchased under Bankers Acceptance Facility which is a product of the Appellant.
Since the appointment of a Debt Recovery Solicitor by the Appellant to recover the alleged debt from the Respondents under the Bankers Acceptance Facility was wrong ab initio, it was contended, it was unwarranted and constituted further breach of the contractual agreement under the Bankers Acceptance Facility which was governing the relationship between the parties. It was further contended that none of the steps taken by the Appellant’s Recovery Solicitor can be right because of the wrong foundation upon which his appointment stood. That there is little wonder that the solicitor acted in a manner that occasioned injury on the Respondents especially the 2nd Respondent.
The action of the Debt Recovery Solicitor, it was argue, was not unconnected with the nature of the appointment and the instruction which he received from the
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Appellant. That the letter of appointment speaks volumes. The letter of appointment of the Debt Recovery Solicitor to the Respondent was direct reaction to the letter of appointment which gave the solicitor an extremely limited time for the recovery of the debt. That the solicitor was bound to act the way he acted in order to satisfy the Appellant as the Appellant did not give the solicitor any space of time to take a civil action for the recovery of the Respondents’ debt.
On issue 3 which is Respondents’ issue 1, it was submitted that the agreement between the Appellant and the Respondents is governed by a written contract Exhibit C.
It was submitted that the maximum time for the determination of the contract was 180 days or six months as provided by Exhibit C. However, the period for the determination of the contract may be shorter as there was a provision in the contract which gave the appellant absolute power to sell off the 1st Respondents shares whenever the price dropped by 15%.
The N43million loan, it was submitted, was in the custody of the Appellant and was never handed over to the Respondents. Also the purchase of 1,000,000
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shares of Zenith Bank Plc with the said loan was also the obligation of the Appellant to perform.
It was submitted that the failure of the Appellant to sell the Respondents’ shares at the expiration of 180 days provided by the contract is a breach of a fundamental condition of the contract and the lower Court was right to hold that the Appellant breached the condition of the contract between her and the Respondents. We were referred to Oceanic Bank v. Chitex Ind. Ltd (2000) FWLR (Pt 4) 678 at 693 and 695, Ndinwa v. Igbinedion (2000) FWLR (Pt 30) 2673 at 2687.
The plea of frustration, it was submitted, is not available to the Appellant as the contract between the Appellant and the Respondents was never prematurely determined and there was no intervening event or circumstance that affected the contract.
It was submitted that the lower Court rightly observed that the name of the proxy who stealthily collected the certificate would have been mentioned in the appellant’s pleading and evidence hence there is no evidence in support of the allegation and what is more the Appellant is still keeping the shares over seven years after the expiration of the
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contract.
The Appellant, it was submitted, was negligent in the fulfillment of her obligation under the contract and had breached a fundamental term of the contract by not selling the Respondents’ shares at the end of the tenure of the contract until the price of the shares crashed at the stock market
The Respondents, it was submitted, are entitled to damages for breach of contract and the lower Court was right to award damages.
On issue 4, learned counsel for the Respondents submitted that the arguments of the Appellant in favour of the counterclaims are misconceived. That the arguments are only relevant to conventional loans being given by the bank and handed over to the debtor to be used according to the debtor’s wishes. That the Bankers Acceptance Facility was never handed over to the debtor. The Appellant bought and managed the shares bought for and on behalf of the Respondents under an agreement called the Bankers Acceptance Facility which gave the Appellant the management and control of the collateral security of the loan which are the Zenith Bank Shares bought by the Appellant with the loan. The Appellant, it was submitted, had the duty
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of observing strictly the terms of the agreement in her own interest and also in the interest of the Respondents. That there is no doubt that the Appellant breached the terms of agreement between her and the Respondents by holding on to the Respondents’ shares beyond the time provided by the agreement.
It was submitted that assuming but without conceding that the plea of frustration of the contract put up by the Appellants succeeds, it is the law that where there is frustration the question of breach will not arise as none of the parties can be held responsible for what happens.
In any case it had earlier been argued that plea of frustration is not available to the Appellant in this case as there was nothing outside the contemplation of the parties that happened between the initiation of the agreement and the expiration of the tenure provided by the agreement.
Learned counsel for the Appellant argued forcefully that the lower Court erred when it relied on the written statement on oath of the only witness for the Respondents when the witness said under cross-examination that she signed the written statement on oath in her office. But the written
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statement on oath of the witness is shown to have been signed before the Commissioner for Oaths in the High Court of Osun State. It is the law that when any judicial or official act is shown to have been done in a manner substantially regular it is presumed that formal requisites for its validity were complied with. See S.150 (1) of the Evidence Act now S.168 (1) of the Evidence Act 2011. There is a legal presumption that judicial and official acts have been done rightly and regularly until the contrary is proved. See Amala v. State (2004) LPELR – 453 (SC) and (2004) 12 NWLR (Pt 888) 520.
As the written statement on oath in this case is shown to have been deposed to before the Commissioner for Oaths, High Court of Osun State I am afraid I cannot accept the argument of learned counsel for the Appellant that the said written statement on oath should have been discountenanced by the lower Court.
On the presumption of regularity enjoyed by the written statement on oath of the Pw1, the lower Court did not need to look for evidence outside the Court to rely on it. If the lower Court looked for evidence outside the Court to confirm the regularity of the
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statement on oath as learned counsel for the Appellant argued that was wrong. However this did not affect the decision of the lower Court to rely on the written statement on oath.
Issue 1 is therefore resolved in favour of the Respondents.
Turning to issue 2, the Pw1 in her written statement on oath deposed as follows in Paragraphs 28 and 29:
28) That on 9th September 2009, Policemen from the Police Eagle Squad, Osogbo picked me up on the complaint of the Defendant/Respondent and I was detained at the custody of the Police for about 9 hours.
29) That upon my release at about 11.30pm on that day, I ran into a coma and was rushed down to Government House Clinic, Osogbo where I was put on admission for three days.”
On this evidence, the lower Court in its judgment at page 365 of the record of appeal stated in part as follows:
“There is no evidence too that the Defendant ever made any formal request for the repayment of the loan from the 1st Plaintiff before the 9th September 2009 when the police invaded the office of the Plaintiff and took the 2nd Plaintiff into their custody on account of the alleged indebtedness of the
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1st Plaintiff. The action of the police was provoked by Messrs Wilson Atirene & Co. whom the Defendant employed as debt recovery solicitor. The Defendant has claimed as part of its defence that the instructions given to Messrs Wilson Atirene & Co did not include the use of force.”
From the pleadings and Paragraphs 28 and 29 of the written statement on oath of the Pw1 reproduced above, there was no basis for the finding of the lower Court that the police invaded the office of the plaintiff. It was not pleaded and Pw1 never suggested in the written statement on oath that she was picked from the office. Secondly although, it was pleaded in the amended statement of claim and the Pw1 reiterated in the written statement on oath Paragraph 28 reproduced above that she was picked upon the complaint of Appellant and detained in police custody for about 9 hours, the lower Court found that the action of the police was provoked by Messrs Wilson Atirene & Co whom the Appellant employed as debt recovery solicitor. Again there was no basis for the above finding.
There was no evidence before the Court to show that the Appellant made a complaint
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to the police, as the Respondents’ witness claimed. No police extract was tendered in proof of this fact. As I pointed out earlier, the Pw1 did not say that she was picked from the office. She did not say where she was picked from. Although she claimed to have been released at 11.30pm; she did not say when she was arrested to arrive at the 9 hours she purportedly spent in custody and what type of custody. Was she detained behind the counter or in a police cell?
On the pleadings and evidence led by the Respondents it did matter who the Respondents say instigated the purported arrest of the Pw1 between Appellant and Messrs Wilson Atirene & Co since no evidence was led to show that she was ever arrested.
Furthermore, even if there was evidence that Barrister Wilson Atinere caused the arrest of the 2nd Respondent, that certainly was outside the brief given by the Appellant which was to recover what it considered was its debt.
Also Barrister Wilson Atirene or Wilson Atirene & Co who are supposed to know that the police is not a debt recovery agent, was not made a party to the case by the Respondents.
In my view issue 2 should be resolved
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in favour of the Appellant.
I therefore resolve it in favour of the Appellant.
On issue 3, it appears to me that the lower Court erred when it granted the first relief which was for a declaration that the Respondents were not in anyway indebted to the Appellant when the value of the shares in the capital market as at 1st June, 2008 was not established on the pleadings and evidence led by the Respondents. The Respondents failed to lead evidence to establish the value of the shares in the capital market as at 1st June 2008 when they said the tenure of the agreement ended. They also failed to plead or lead evidence to show the difference in the value of the shares as at 1st June 2008 and the sum of N43million which was the value of the shares at the time of purchase.
It is the difference in the value of the shares at the point of sale, that is, 1st June, 2008 and at the time of purchase, that is when Exhibit C was executed that would enable the Court arrive at a sound decision as to whether the value of the shares as at 1st June, 2008 was enough to pay off the loan of N43million plus the interest of 17% per annum and that the Respondents were not in
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anyway, form or manner indebted to the Appellant.
As there was no basis for the grant of the first relief, relief 6 would not stand since it depended on the success of relief 1.
Furthermore, the lower Court ought not have granted relief six which was for special damages, It is trite law that special damages must be pleaded with particularity and must be strictly proved. See Okunzua v. Amosu & Anor (1992) LPELR – 2531 (SC); 1992 NWLR (Pt 248) 416.
Relief VI of the amended statement of claim reproduced again immediately hereunder reads as follows:
“Another sum of N20,000.000.00 being special damages in consequence of the Defendant’s failure or default to sell the shares at the expiration of the tenor of the facility which sum of money would have accrued as profit on the said date to the 1st Claimant.”
In Paragraph 23 of the amended statement of claim the Respondents pleaded thus:
“Claimant avers that if the Defendant had (as provided for under the operating agreement) executed the lien and perfected the agreement it would have received not less than N20,000,000.00 as profit from the transaction.”
It is clear from the
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pleadings of the Respondents particularly of the Respondents’ Paragraph 23 of the amended statement of claim reproduced above that relief 6 was not pleaded with particularity. As shown elsewhere in the judgment it was not strictly proved. It was not even proved. A claim for special damages does not lend itself to speculative figure as in this case.
It was not pleaded and no evidence led to establish:
a) The total unit shares the Appellant bought for the Respondent;
b) The price of each unit share;
c) The prevailing market price per unit share at the time the Appellant ought to have sold the shares;
d) The profit on each share; and
e) The profit per unit share multiplied by the total shares to give the figure of special damages claimed.
In the absence of these figures in evidence, the lower Court erred in awarding the sum of N20million special damages.
In addition, the 6th relief which is a claim for exactly N20million special damages contradicted the averment in Paragraph 23 of the amended statement of claim reproduced above which put the profit as not less than twenty million.
There is also another problem with relief 6
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granted by the lower Court. While the Respondents asked for N20million as special damages, the lower Court granted the said sum as special and aggravated damages. A Court may grant less but not more than is asked for by a party. There was no basis for the award being granted for aggravated damages as well when the Respondent only asked for the amount as special damages.
The same virus has inflicted relief 2. The 2nd relief ended with the words no more. The lower Court amended the relief by adding the following:
“….. except the case flow and other sources of income of the 1st Claimant/Plaintiff. However since the valued of the shares would have been sufficient to repay the loan as at 1st June, 2008 if the Defendant had complied with the terms of the contract the claimant/plaintiff is no longer indebted to the Defendant.”
The above amendment to relief 2 helped the case of the Respondents to the extent that the lower Court held that the value of the shares as at 1st June 2008 were held to be sufficient to repay the loan and that the Respondents were no longer indebted to the Appellant.
Furthermore, relief 2 in the language it was granted
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failed to consider Exhibit C which stated that repayment of the loan shall be from:
i) Cash flow from the 1st Respondent;
ii) Proceeds of sale of the shares; and
iii) Other sources of 1st Respondents’ income.
For the foregoing reasons relief 2 granted should be set aside.
However, I see nothing wrong with relief 3 granted by the lower Court to the Respondents. The shares were bought for the 1st Respondent by the Appellant and were to be sold by the Appellant within six months of purchase or when the value went down by 15%. The lower Court rightly found that the shares have still not been sold. Relief 3 was appropriate in the circumstances. I do not see how Exhibit D7 could be a bar to the grant of relief 3.
Issue 3 is resolved partly in favour of the Appellant and partly in favour of the Respondents.
On issue 4, it is clear from the terms of the facility that what the Appellant granted to the 1st Respondent was not a conventional loan wherein money was given to the 1st Respondent by the bank to use as the debtor wished. Under the facility the Appellant bought and managed the shares for the 1st Respondent. The shares were to
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be sold by the Appellant for the 1st Respondent within six months or when the value of the shares went down by 15%. The shares were not sold as agreed.
I am in agreement with learned counsel for the Respondents that Appellant could not determine whether the 1st Respondent was owing the Appellant any money until the 1st Respondent’s shares which the Appellant bought for the 1st Respondent were sold.
In my view the counterclaim was rightly dismissed by the lower Court.
Issue 4 is resolved in favour of the Respondents.
The appeal succeeds in Part.
The judgment of the lower Court dismissing the counterclaim of the Appellant is affirmed.
The order of the lower Court granting relief 3 of the Respondents’ claim is affirmed.
Reliefs 1, 2, 4, 5 and 6 granted by the lower Court to the Respondents are hereby dismissed.
Parties to bear their respective costs.
Other Citations: (2016)LCN/8951(CA)
