Adebest Telecommunications (Nig) Ltd & Anor. V. Union Bank of Nigeria Plc (2009)
LawGlobal-Hub Lead Judgment Report
SOTONYE DENTON WEST, J.C.A
On the 29th day of June 2008, the Honourable Justice S.D. Kawu of the Kwara State High Court of Justice, delivered a judgment which was in favour of the Respondent and being dissatisfied with this judgment, the Appellants appealed to this court to set aside the judgment of the lower court and allow the appeal.
When the appeal came up for hearing on 6th April 2009, the Appellants and their counsel, I.A Adeniyi Esq., were conspicuously absent from the Court without permission. They have also been duly served and are aware of this date. They were present in court when the appeal was fixed for hearing on the last adjourned date.
The Respondent’s counsel J.O Ashaolu Esq., urged the court to proceed with the appeal as it is not fair for the Appellants’ counsel not to appear again in court considering that the Respondent had to file a motion before they proceeded to file their brief of argument. He therefore urged that the appeal be heard on its merits.
In the interest of peace, the court obliged that the appeal should proceed to hearing on the merit since the Appellants have not excused their absence from the court.
At the hearing, Ashaolu Esq., referred the court to the respondent’s brief of argument dated 20th day of January, 2009 and was filed on 13th February 2009, praying this court to dismiss the appeal for lacking in merit. The respondent similarly filed a preliminary objection dated 13th February 2009.
The appellant’s brief of argument dated 30th day of June 2008 and was deemed filed on 12th day of February 2009. The brief was filed by I.A. ADEYI Esq of counsel to the appellants who was not present in court on the day this appeal came up for hearing.
After a lot of arguments pertaining to the absence of the appellants and their counsel it was resolved that this court shall proceed with the hearing of the appeal without the appellants and the appellants’ brief dated the 30th day of June 2008, and deemed properly filed on the 12th day of December 2008, is hereby deemed duly argued before this court pursuant to the provision of Order 17 Rule 9 sub 4 of the Court of Appeal Rules 2007.
The appellants did not file any reply to the preliminary objection.
Thus the preliminary objection will be treated on the merit.
The notice of preliminary objection was brought pursuant to Order 3 Rule 15(1) of court of appeal rules, to the extent that:-
i. issues 3 and 4 as formulated by the Appellants does not relate to grounds 4 and 5 of the grounds of appeal.
ii. the grounds of appeal numbered ground 5 as contained in the notice of appeal dated 12th day of July, 2006 and filed the same day is incompetent and fortiori should be struck out in limine on four grounds to wit:
(i) Issues 3 and 4 as formulated by the Appellant does not relate and run parallel to grounds 4 and 5 of the grounds of appeal.
(ii) Particulars (i)-(v) stated under ground 5 to the grounds of appeal are not related and cannot support same.
(iii) That ground 5 of the grounds of appeal without particulars cannot stand on its own having no particulars embedded in it.
(iv) Particulars (i)-(v) have no bearing with ground 5 whatsoever.
The Respondent has objection to issues 3 and 4 raised by the Appellants, and argued both issues together since they are similar and interwoven,
The Respondent submitted that issues 3 and 4 as formulated do not relate to grounds 4 and 5 of the grounds of appeal from which they were couched. The Respondent opined that issues sought to be argued on appeal must emanate from the grounds of appeal and any issue that does not so arise is incompetent. The Respondent cited the dictum of KARIBI-WHYTE, J.S.C in OLOWOSAGO V ADEBANJO (1988) 4 NWLR (PT 88) 275 @ 2283.
The Respondent argued that ground 4 of the grounds of appeal attacked the findings of the learned trial judge as to how he arrived at N4,807,036,54k as the indebtedness of the Appellants and issue 3 raises the question whether Exhibits P25 on which the learned trial judge based his decision to award the sum he awarded was admissible in law.
The Respondent submitted that ground 4 which issue 3 was supposed to emanate from did not complain of inadmissibility of Exhibit P25 at all.
On ground 5 of the grounds of appeal, the Respondent is of the view that, issue 4 raised by the Appellants does not correlate with the said ground 5 of the grounds of appeal as its complaint borders on whether based on the inadmissibility of Exhibit P25 it was proper for the learned trial judge to order the Respondent to exercise her right of sale over the 2nd Appellant’s property.
The Respondent submitted that grounds 4 and 5 never complain of admissibility or inadmissibility of Exhibit P25 and it is therefore wrong for the Appellants to make an issue of it in their brief of argument. The Respondent submitted further that issues 3 and 4 as framed do not flow from grounds 4 and 5 of the grounds of appeal, and as a matter of form, a brief must contain the issue or issues for determination on an appeal and they must take their root from the grounds of appeal filed as they transcend a mere matter of form.
The Respondent humbly prays this court to discountenance all the arguments in support of issues 3 and 4 which do not arise from grounds 4 and 5 of the grounds of appeal. The Respondent cited the cases of AFEGBAI V A.G. EDO STATE (2001) FWLR (PT 69) 135; A.S.E.S.A. V EKWENEM (2001) (PT 51) 2034 @ 2057 and also the dictum of MOHAMMED J.S.C in WEST AFRICAN EXAMINATION COUNCIL V ADEYANJU (2008) ALL FWLR (PT 428) 206 @ 221.
The Respondent further prayed this honourable court to hold that issues 3 and 4 raised by the appellants are irrelevant and of no effect whatsoever.
The Respondent submitted further that Ground 5 of the appeal is not only vague but failed to highlight the complaint against the judgment on appeal. Particulars of error alleged under ground 5 are too general and independent of the complaint in the ground of appeal. The Respondent submitted that it offends Order 3 Rules 2(2) of the Court of Appeal Rules. The Respondent cited the dictum of per KARIBI-WHYTE JSC IN UBA LTD V. ACHORU (1990) 6 NWLR (PT 156) 254 @ 283 AND HONIKA SAWMILL V. HOFF (1994) 2 SCNJ @ 93.
The Respondent submitted that since those particulars are not related to the grounds of appeal, they ought to be struck out. Finally, the Respondent prays this honourable court to strike out ground 5 of the grounds of appeal having failed to satisfy the requirement of the rules of this honourable court.
The appellant did not file any reply but for ease of reference, grounds 4 and 5 of the Notice of Appeal dated 12th July, 2006 will be reproduced.
GROUND FOUR
The learned trial judge erred in law when he held at page 11 of his judgment that “in support of the averment contained in paragraph 19 of the statement of claim, PW1 testified that as at 31st December 2001 the indebtedness of the 1st Defendant to the plaintiff stood at N4,807,036.54k. Line 12 of exhibit P25 also confirm this averment. I believe and accept this piece of evidence.
Accordingly on issues 1 and 2 above, I hold that the plaintiff was entitled to charge and change the rate of interest on the overdraft granted to the 1st Defendant and that by 31st December, 2001, the total indebtedness of the 1st defendant to the plaintiff stood at N4,407,036.54k I award that amount at 30% interest per annum from 1st January, 2002, till today and thereafter at 10% interest per annum till the whole judgment sum is fully paid”.
PARTICULARS OF ERROR OF LAW
(i) The defendants in paragraph B of their statement of defence ask the plaintiff to state how it arrived at the sum of N4,807,036.54k.
(ii) The plaintiff never dispute this assertion but refused to answer the request of the defendants.
(iii) The defendants disputed the state of their indebtedness to the plaintiff.
(iv) It is wrong for the learned trial judge to have arrived at this conclusion notwithstanding the defendants protest on their state of indebtedness which the plaintiff failed to disclose.
(v) The learned trial judge awarded more than what was claimed by the plaintiff.
GROUND FIVE
The learned trial judge erred in law when he held at page 12 of his judgment that “since there is no dispute between the parties that the 2nd defendant executed a deed of legal mortgage on his property covered by certificate of occupancy number KW 12021 and registered as No. 142 volume 40 at the Kwara State Land Registry, Ilorin, as security for the overdraft facility granted to the 1st defendant which stood at N4,807,306.54k as at 31st December, 2001 and which remained unsettled, I hold that the plaintiff is entitled to exercise her right of sale over the land property and I hereby so declare”.
PARTICULARS OF ERROR OF LAW
“(i) The defendants in paragraph 8 of their statement of defence asked the plaintiff to state how it arrived at the sum of N4,807,036.54k
(ii) The plaintiff never dispute this assertion but she refused to answer the request.
(iii) The defendants disputed the state of their indebtedness to the plaintiff.
(iv) It is wrong for the learned judge to have arrived at this conclusion notwithstanding the defendants protest on their state of indebtedness, which the plaintiff failed to disclose.
(v) The learned trial judge awarded more than what was claimed by the plaintiff.
And issues 3 and 4 as formulated by the Appellants are as follows:
Issue 3, whether Exhibit P 25 upon which the learned trial judge arrived at the defendant’s indebtedness is admissible in law (ground four).
Issue 4, whether based on the admissibility of exhibit P 25 it was proper for the learned trial judge to have hold that the plaintiff is entitled to exercise her right of sale over the property mortgaged by the 2nd defendant (ground five).
This is a clear case of banker/ customer relationship which shun of all other embellishment should be devoid of technical jargon pertaining to formulation of issues or indeed issues arising from Ground of Appeal thus the position of the law as stated by Karibi-Whyte (JSC) (as he then was) in the case of OLOWOSOGO V ADEBAYO (1988) 4 NWLR (PT. 88) 275 @ 282 that “it is necessary to emphasize in formulating issue for determination in brief. Like pleadings to litigation between the parties, the issues formulated are intended to accentuate the real issues for determination before the court … Hence the issues for determination cannot and should not be at large, but must fall within the purview of the ground of appeal filed” see Eze v Federal Republic of Nigeria (1987) 1 NWLR (PT 51) 506 @ 521- 522 is correct and it is applicable to this appeal. Ground 4 clearly attacked the findings of the learned trial judge on the way and mode the N4,807,036.54 was arrived at as indebtedness of the appellant while issue 3 raised the point of admissibility of Exhibit P. 25 in law. Thus, ground 4 which issue 3 emanated from did not complain of inadmissibility of Exhibit P. 25 in any form or way.
Similarly issue 4 does not correlate with the ground 5 of the appellants’ ground of appeal. This same issue also touches on admissibility of Exhibit P. 25, in the same vein, grounds 4 and 5 never complain of admissibility of inadmissibility of Exhibit 7 P.25. It has been decided in numerous cases that issues raised in brief of argument must take its root from the ground of appeal filed, if not such grounds are deemed abandoned and liable to be struck out or ignored by an appellate court. See EKONG V OJIDE (2005) 9 NWLR (PT 299) 102 AND OBIEGBU V UNIABUJA (2005) 9 NWLR (PT. 930) 310 @ 322 – 323 where I.T. MOHAMMED JSC held inter alia that;
“…grounds of appeal are life wire of an appeal as they may be contained in a notice of appeal…An issue so formulated must relate to a ground or grounds of appeal. An issue that is not so related is incompetent and should be struck out by the court. See NZEKWU V NZEWU (1989) 2 NWLR (PT. 104) 373 @ 422, MOMODU V MOMOH (1991) 1 NWLR (PT. 169) 608 @ 621, ONIFADE V OLAYIWOLA (1990) 7 NWLR (PT.161) 130 @ 157, UAC V GLOBAL TRANSPORT (1996) 5 NWLR (PT. 448) 291 AND YUSUF V KODE (2002) 6 NWLR (PT. 762) 231”
Where a ground of appeal is not related to a specific issue, it will be taken as abandoned and same would be struck out. See KANO JUSTICE PLC V G.H. LTD (2002) 2 NWLR (PT 751) 420, ABARSHI V COP (2005) 5 NWLR (PT 917) 36 AND AFRICAN PETROLEUM LTD V OWODUNNI (1991) 8 NWLR (PT. 210) 391.
The settled law is that an issue formulated for determination must be distilled from a ground of appeal, and where it has no ground of appeal to relate to then it has no part to play in the determination of the appeal, and so the court has no option than to disregard the said issue in the appellants and respondents brief of argument and it also becomes incompetent and it is discontinued. See NFOR V CEMENT (1994) 1 NWLR (PT 319) 222 and AKPAN V STATE (1994) 9 NWLR (PT 368) 347.
In all I hold that issues 3 and 4 which are predicated on grounds 4 and 5 of the Notice of Appeal of the appellants no doubt shows no nexus between the grounds and issues and such renders the grounds of appeal as abandoned and struck out and the issues which has no root with all its arguments are discountenanced by this court. In essence issues 3 and 4 of the appellant’s brief of argument are hereby discountenanced and struck out.
We are now left with the appellants and respondent surviving issues, which are issues 1, 2 and 5 for determination of this appeal. For ease of reference the remaining issues of the appellants and respondent are set out below.
Issue 1: “Whether the Defendants acquiesced to rate of interest charged and changed by the plaintiff as held by learned trial Judge (Ground one and three).
Issue 2: Whether there is any evidence before the learned trial judge to show that the defendants ever received any statement of account from the plaintiff (Ground two) and
Issue 5: Whether the judgment of the learned trial judge is not against the weight of evidence.”
Since the two issues are similar, I will adopt that of the appellants to determine this appeal. I will treat the surviving issues in this format, 2, 5 and then 1 starting with issue two.
ISSUE 2
Issue 2 is whether there is any evidence before the learned trial judge to show that the defendant ever received any statement of account from the plaintiff (ground two). This issue is the same as issue two of the respondent.
The appellants’ counsel, I. A Adeyi Esq. in his brief argued that during trial at the lower court, the respondent did not state the mode of sending the statement of account to the appellants and at a time they even requested for it to no avail. They further contended that the respondent never showed in their evidence in court that the appellants ever received the statement of account, therefore the learned trial judge was wrong to have held that the statement of account were regularly dispatched to the appellants and that they kept mute.
They submitted that the finding of the trial court on this issue is based on speculation and the court should not have arrived at findings since there are no evidence of such before him. He cited the case of AKPABIO V THE STATE (1994) 7 NWLR (PT 359) 635 @ 669 – 670 to buttress their position.
They therefore urge this Honourable Court to hold that the finding of the trial court is not based on the evidence before it but on speculation and that issue 2 be resolved against the respondent.
Joseph O. Ashaolu Esq., learned counsel to the respondent argued on issue two that the respondent avers that they never made available their statement of account on monthly basis but that this averment was similarly disputed by the appellants in their pleadings before the trial court. He argued that their witness gave evidence that all the statement of account was sent to the appellant’s address which they similarly sent other letters which the appellants admitted they received,
He further contended that the respondent tendered Exhibit P8, P8A, P8B which is a letter written by the appellants to the Chief of Staff, Presidential Villa, Aso Rock, Abuja dated 9/9/1998 and that the denied statement of account were annexed and marked annexure 1, 2, 3 and 4,
He finally submitted on this issue that the learned trial judge was more than fully justified to hold that the appellants received the statement of account through their postal address. He therefore urged this court to resolve this issue against the appellants.
On this issue, the appellants raised the issue that the trial judge arrived at his judgment on speculation it is trite law that a party who prays the court for any relief must prove it. See section 137(1) of the Evidence Act and ARE V ADISA (1967) NWLR 304. A party who asserts the truth or existence of a fact must prove it. A mere speculative observation cannot be a substitute to prove the fact asserted see GEORGE V UBA (1972) 8 – 9 SC 264, OGUNYE V THE STATE (1999) 68 LRCN 99 and OKONJU V NJOKANMA (1999) 73 LRCN 3632.
A court of law will not rely on duly speculative item or document to be the base of his judgment because anything found on it will not stand on appeal see OLALOMI V NDIC (2002) FWLR (PT 131) 1984, ARCHIBERY V ITA (2004) 17 NSCQR, 273 @ 320 and OFFOBOCHE V OGOJA L.G (2001) 7 NSQR, 82 @ 102.
The question is that what is the position in this case. The respondent gave evidence that they send periodic statement of account to the appellants at their designated address NO.1, Otunola Adebayo Street, Off Taiwo Road, Owoniboys Building Ilorin, Kwara State, but the appellants denied ever receiving any of the statement of account but it is amazing and laughable that the same appellants who denied ever receiving any of the bank statements posted by the respondent had same statements attached to a letter addressed to Chief of General Staff, Federal Republic of Nigeria, State House, Aso Rock, villa, Abuja marked Exhibit P8, P8A and P8B and the statement of account annexed as annexure 1, 2, 3 and 4.
There are triable and live evidence before the trial court which assist her to reach some of the conclusion reached in this case. The appellant’s assertion that the findings were based on speculation are unfounded and erroneous. The poser any reasonable person will ask is, what are the source of the balance quoted by the appellants, on what are the appellants begging for waiver of interest, we should be more sincere with ourselves, the trial court rightly acted on the evidence before her and she could not have acted on any speculation. In essence, issue 2 of the appellants failed and same is resolved against them in favour of the respondent.
Issues 3 and 4 have been struck out for not having its root in the grounds of appeal filed by the appellants. This brings us to issue 5, respondent, because inter-alia they the respondent’s charged arbitrary interest rates on the loan.
iv. The appellants met with the respondent for waiver of some of the interest and the respondent partially consented.
v. The appellants still failed to pay back the loan, demanding for a total waiver.
vi. The appellants thereafter wrote a letter to the Chief of Staff, Aso Rock Villa to assist to fast track the payment of money owed him by some debtors.
vii. The appellants have not paid back their facilities.
The trial court accepted the plaintiff’s evidence and that of his witness. It was not open to this court to disparage settled issues of facts based on the evidence accepted by the trial court. The ascription of probative value to the evidence called by parties is the exclusive function of the trial court and the appellate court has no business interfering with and dismantling the solemn findings of facts made by the trial court. See FATOYINBO V WILLIAMS (1956) 1 FSC 87, AKINLAYE V EYIOLA (1968) NMLR 92 AND OKWEJIMINOR V GBAKEJI (2008) 1 SC (PT III) 263.
Onnoghen JSC in OKWEJIMINAR V GBAKEJI (SUPRA) held inter-alia that:-
“It is settled law that the evaluation of evidence and ascription of probative value thereto is the domain of the trial court and that an appellate court is always reluctant to interfere with the findings of fact by the trial court except when the same was made without regard to the evidence adduced or is perverse or not supported by the evidence or contrary to substantive law, or that of procedure etc. it is therefore clear that in appeals against the finding of facts of the issue of credibility of the witness who testified at the trial court be taken before the appellate court”.
In all, issue five is resolved against the appellants in favour of the respondent.
And now to issue one.
Issue 1: whether the defendants acquiesced to the rate of interest charged and changed by the plaintiff as was held by learned trial judge. This same issue is same as issue 1 of the respondent as stated in their brief of argument.
The appellants counsel, I.A. Adeyi Esq. argued that, the defendants now appellants denied in their paragraphs 4 & 5 of the statement of defence that they never agreed with the respondent on any rate of interest chargeable on the over draft facility. He submitted that the paragraphs were never denied by the respondent and that means the respondent admitted their claims, thus, what is admitted need no further proof. They further contended that they never agreed with the plaintiff now respondent on any percentage of interest to be charged on the over draft facility and that the respondent cannot unilaterally vary its interest without informing the appellants.
They further submitted that the agreement between the two parties being contractual, imposes duty of disclosure and more so when there is no evidence before the lower court which indicate the variation of interest by the Central Bank as claimed by the respondents. (underling mine for emphasis).
That what is expected of the respondent at the trial court was to put the directive from the Central Bank of Nigeria the different indiscriminate variation of interest and this cannot be done vica voce or impsi dixit. And that the none tendering of such CBN directive before the trial court means the respondent withheld material evidence contrary to Section 149(d) of the Evidence Act.
The Respondent’s counsel, Joseph Ashaolu submitted that paragraphs 5 and 17 of the statement of claim duly elicit the facts that the appellants were duly notified and consented through letter of offer dated 24th February, 1997 marked Exhibit P1 and P2 to the extent that the respondent reserved the right to vary interest rate at anytime at the banks option.
That though the appellants denied these averments in paragraphs 2, 4 and 5 of their statement of defence, that means the two parties have joined issues on whether the bank has the right to vary interest rates. Thus, the respondent need not file a reply to the statement of defence, he referred the court to the case of SPASCO VEHICLE & PLANT HIRE CO. LTD V ALARAING LTD (1995) 9 SCNJ 288 to buttress their position, they further argued that, the respondent at the  lower court called PW1 who tendered Exhibits P1 & P2 without objection from the appellants. The respondent further contended that the 2nd respondent signed Exhibit P2, they cited STD LTD V INTERDRIE LTD (2007) ALL FWLR (PT 366) 756 @ 77 to the extent that the appellants can not claim the plea of non est factum and both parties are bound by the contractual agreement, he referred this court to the cases of HILARY FORMS LTD V MN MATHRA (2001) ALL FWLR (PT 390) 1417 @ 1438 AND FAGBENRO V AROBADI (2006) ALL FWLR (PT 370) 1 575 @ 1597 – 1598.
That PW1 also establish that periodic statement of account was sent to the appellants known address and non of the statement was returned as not collected. They also argued that the decision of the lower court was buttressed by the cases of BANK NORTH LTD V IDIRISO (2003) 3 NWLR (PT. 649) 370 @. 378 UBN LTD V OSIGI (1994) 3 NWLR (PT. 333) 385, UNION BANK V. SAX (NIG) LTD. (1994) 8 NWLR (PT. 361) 150 AND BANK OF THE NORTH LTD V. SALEH (1999) 9 NWLR (PT 618) 338 to the extent that a bank can unilaterally adjust rate of interest charge on loan once the charge is in the Deed of Mortgage.
Respondent also contended that Exhibit P2 tendered by the Respondent which was admitted without objection is same as Exhibit D1 tendered by the Appellants and that the Exhibit should not be disturbed. He cited the case of UDO V. CRSN (2002) FWLR (PT104) 665 @ 707. They finally prayed this court to affirm the judgment of the lower court on this issue.
To appreciate this issue, I will reproduce the plaintiff now the respondent’s claim at the trial court:
“WHEREOF the plaintiffs’ claim from the defendants jointly and severally.
i. The sum of four million eight hundred and seven thousand thirty six naira fifty four kobo (N4,807.036.54k) which represented the total sum .advanced and accumulated interests charged and other incidental expenses in respect of which the 2nd defendant mortgaged his landed property covered by Certificate of Occupancy No. KW 12021.
ii. Interest at the rate of 30% per annum from 1st of January 2002 till the date of judgment.
iii. Declaration that the plaintiff has the right to offer for sale by auction the property covered by Certificate of Occupancy No. KW12021 which the 2nd defendant mortgaged to the plaintiff to secure the loan/overdraft advanced to the 1st defendant and of which loan/overdraft the 1st defendant has refused and or neglected to settle despite repeated demands.
iv. Interest at the rate of 10% from the date of judgment till the same is settled.
On the contention of the appellants in this case that the respondent ought to file a reply to their position in their statement of defence. The appellants are correct only to the extent that a reply will be filed if the other party want to deny the averments as contained in the defendant’s statement of claim or defense, if not there is no reason why a party should file a reply to a statement of defence at best the two parties will join issue as done in this case. I have painstakingly perused the paragraphs in the statement of claim and defence and come to the conclusion that the respondent need not file a reply to the appellant’s statement of defence at the lower court. See SPASCO VEHICLE & PLANT HIRE CO. LTD VS ALARAINE LTD (1995) 9 SCNJ 288 @ 301.
However, the respondent’s failure of not responding to the Appellants’ raised questions in their pleadings relating to the unilateral fixtures or adjustments of rates of interest by the respondent bank on the loan taken by the appellants is not inconsonance with the dictate of fairness and justice. It is indeed against the principle of contractual undertaking and runs very counter to the very fabric of audi alteram partem. The parties should agree before new rates of interest becomes applicable to the loan that metamorphosed into a Deed of Mortgage.
Now to the main issue, Exhibit P2, this contain terms and conditions of the loan granted the 1st defendant/appellant at the 2nd appellant, request which is contained in Exhibit P1, 2nd defendant/appellant stood as guarantor for the loan taken by the 1st appellant. Exhibit P2 which was duly signed by the 2nd appellant is binding on all the parties more so when there was no claim of non-est-factum. See STB LTD VS INTENORIC LTD (2007) ALL FWLR (PT 366) 756 @ 773..
The agreement between the appellants and respondent is contractual in nature and the two parties are bound by it see KOIKI V MAGONSSON (1999) 5 SCNJ 296 @ 320, EVIBUOMANAD V ELEMA (1994) 7 – 8 SCNJ (PT 11) 243, HILARY FARMS LTD V MV MATHRA (2007) ALL FWLR (PT. 390) 1417 @ 1338 AND FAGBENRO V AROBAM (2006) ALL FWLR (PT 310) 1575 @ 1597 – 1598.
The contention of the appellants in the lower court and in this court is that they have been subjected to undue arbitrary interest variation which is not brought to their notice timely because of the fact that they are not sent regularly statements of their account with the respondent. Therefore the real question in controversy between the appellants and the respondents in this appeal is the arbitrariness of escalating interest rates mounted on their loan, which interest rates were allegedly applied on their loan without their being given adequate opportunity to react.
However, by the 7th day of November 2000, the loaned amount of #1,500,000.00 stood due in the sum of #3,788,018.04k. When confronted with this outstanding sum of #3,788,018.04k, the 1st appellant expressed surprise and argued that arbitrary interest rate had been applied to the loan account and asked for a waiver of interest which was in consequence reduced to #2,552,944.00 by the respondents which is to be paid by the appellants within a grace period of three months.
However this offer by the respondent did not even seem attractive to the appellants. In fact what the appellants demanded as regards this loan is best reflected in their statement of defence which inter-alia state as follows:-
“8 The defendant aver that the major area of difference between the plaintiff and 1st defendant is the fact that the 1st defendant has written several letters to the plaintiff to show how the sum of #4,807,036.54k was arrived at. The request of the 1st defendant for the plaintiff to state how the interest charge on the facility was arrived at and how much was charged has not been answered by the plaintiff to date……………………….
- The 1st defendant had made known her predicament for not paying the facility granted, not only that, the 1st defendant had asked for total waiver of interest which was not granted. Rather the plaintiff offered a waiver which was ridiculous in view of the illegal charge put on the liability.
- The 1st defendant had proposed payment of #250,000 per month vide letter of 30th day of August 2000, Written to the plaintiff by 1st defendant’s Lawyer.
- The defendant aver that the 1st defendant is witting to pay the capital sum but without understanding the basis of interest charged, the defendants cannot admit the liability being claimed by the plaintiff.
- The defendants are praying for debt forgiveness whatever the liability may be, just as Nigeria and other African Countries are begging the super power for debt forgiveness. After all do to other as you would others do to you”.
Even though there was this controversy of arbitrary interest rates and same was not resolved by the parties, by the 31st day of December 2001, when the action was filed by the respondent, the loan facility had risen to #4,807,036.54k at the disputed rates of interest which is not agreed to by the appellant.
The respondent had not responded to the appellant inquiry on why it is subjected to indiscriminate and arbitrary rates of interest as could be gleaned in their letter of enquiry to the respondent. From the very Judgment which seemed to nail the appellant’s to settle the respondent in the sum of #4,807,036.54k, the trial Judge had this to say inter alia “The next issue for determination is whether the plaintiff did vary the rate of interest on the overdraft in exercise of the right of option contained in the contract documents between the parties, and if the defendants are bound by such variations.
PW1 in his evidence in chief testified inter-alia, as follows:-
“The interest rate when the facility was granted was 21%, it later went to 30% and came down to 28% then to 22% and is presently at 19%. We sent periodic statement of account to the registered office of the 1st defendant indicating these variations …”
The 2nd appellant it seems could not reconcile himself to these variation of interest rate that fluctuate constantly without end from 21% to 30%, to 28% to 22% and 19% without notice as he alleged non receipt of the statements of account. A scenario where the statement of account are duly received, and it is still bewildering to find that a loan agreement contracted with an interest rate of 21% may not necessarily be static but all the same may be within the contemplation of the parties, hence the mortgaged property’s value would as much as is reasonable be within the scope of the amount loaned, or foreseeable interest. The fact that the respondent bank had at a point waived these interest partially and fixed the amount payable by the appellants as #2,552,944, must be retained as same was effectively communicated to the appellants. The appellants in my view are liable to the bank for this amount on which his demand was partially met. In my view this appeal partially succeed, although it is not totally lacking in merit in view of the contention on the interest rate which I find totally appalling, because the respondent cannot give peanuts on one hand and take away apple with the other
Therefore, I find that this unpredictable constant variation of unbelievable interest rate do not augur well with ascertained contractual obligations as herein, Nevertheless the very essence of this appeal is the contention on the rates of interest applicable in this case. The appellants have not objected during trial to any of the evidence tendered by the plaintiff/respondent’s sole witness except to the fact that they are contending that shun of all embellishments they ought not to pay the unexplained interest rates. Judicial notice is taken of the fact that banks of recent have indulged in excessive charges of interest in the bid of making profit, hence the recent clarion call by the Professor Charles Soludo administration within Central Bank of Nigeria system virtually ordering banks to peg their interest rates. The question is, do customers enjoy this pegged rates? Yes, it is good to make profit but it is not fair for banks to exploit to their customers. How do we expect our industries to strive if sources of capital is made very exploitative, it is usual and indeed a pity that many banks would place heavy interest rates on their customers account and expect them to pay and they are forced to pay, because the system is not protective towards them. Banks are therefore, like every arm of our business sector called upon to refrain from unnecessary exorbitant interest rates charged. Globally, banks do not come up with ridiculous interest rates as had been seen to exist in Nigeria.
In the same vein, Bank Customers should endeavour to honour their obligation under their loan/contractual agreements so as not to be subjected to arbitrary interest rates.
In view of the foregoing, this Appeal is not totally devoid of merit and therefore attracts only partial success.
Therefore, I shall by virtue of the power conferred on this court by the provision of Section 16 of the Court of Appeal, Acts 2004 make the following orders; in order to effect substantial Justice and not Justice based on arbitrary interest rates and that since the respondent has given some concession, same amount shall be payable by the appellants which amount is #2,552,944.00 at the interest rate of 21% as agreed upon by the parties in their agreement from the 30th day of June 2006 , the date of the judgment of the lower court till when the appellants pay. The appellants shall within three month of the date of this Judgment pay the calculated amount to the respondent but where the appellants fail to do so, at the expiration of three months from today, the respondent is entitled to exercise her right of sale over the landed property KW12021 and Registered as NUMBER 142 Volume 40 at the Kwara State lands registry, Ilorin as security for the overdraft facility granted to the 1st appellant in the sum of #1,500,000.00 on 24th day of February 1997.
There is no order as to cost.
Other Citations: (2009)LCN/3351(CA)
