African Development Insurance Company Limited V. Zumax Nigeria Limited (2008)
LawGlobal-Hub Lead Judgment Report
HUSSEIN MUKHTAR J.C.A.
This is an interlocutory appeal against the ruling of the Federal High Court, Lagos Division (Coram Dan Abutu, J) delivered on the 9th August 1999, wherein the learned trial Judge refused the appellant’s application to amend its statement of defence in line with paragraphs 6 and 7 of the 4th amended statement of defence (a copy or the 4th amended statement of defence is on page 67 of the records.)
The plaintiffs claim against the defendant is for the sum of (US$ 2,170,951.41) two million, one hundred and seventy thousand, nine hundred and fifty one dollars and forty one cents and (N=4,806,055.64) four million, eight hundred and six thousand, fifty five naira and sixty four kobo as special and general damages for breach of insurance contract of indemnity in respect of the plaintiff’s self elevating work boats “MV RUTH” and “‘MV STELLA.”
The plaintiff also claims interest in the sum of (US$451,451.41) four hundred and fifty one thousand, four hundred and fifty one dollars, forty one cents and on the sum of (N=3,S06,055.644) Three million, eight hundred and six thousand, fifty five naira and sixty four kobo.
Pleadings were filed including the statement of claim (page 2 of the record of appeal), the 3rd amended statement of defence (page 26 of the record), the plaintiff’s reply to the 3rd amended statement of defence (page 32 of the record of appeal)
The plaintiff opened its case on 26th November 1997 mid-way into the trial, the defendant filed its 3rd amended statement of defence with leave of court. The plaintiff closed its case on 10th March 1999.
The defendant, then opened its defence on 16th June 1999 after the conclusion of evidence of the 1st defence witness (DW1) on 6th of July 1999, the defendant brought an application dated 19th July 1999 to further amend its statement of defence.
The lower court heard arguments from both sides in respect of that application on 22nd July 1999. In a considered ruling delivered on the 9th August 1999, the learned trial Judge allowed an amendment in terms of paragraph 4 of the 4th amended statement of defence and refused to allow the amendment sought in paragraphs 5, 6 and 7 thereof.
On 24th November 1999; the appellant filed a notice of appeal against the ruling delivered on 9th August 1999, wherein he raised four grounds which are reproduced hereunder omitting the particulars thereof:
- “The learned trial Judge erred in law in refusing to amend paragraphs 6 and 7 of the 4th amended statement of defence on the ground that it introduced new facts.
- The learned trial Judge erred in law in refusing leave to amend paragraphs 6 and 7 of the 4th amended statement of defence on the grounds that it was intended to overreach.
- The learned trial Judge erred in law in refusing to allow the amendment sought for in paragraph 7 of the proposed 4th amendment state of defence having granted leave in respect of paragraph 4.
- The learned trial Judge erred in law in refusing to allow the amendment sought for in paragraph 6 of the proposed 4th amended statement of defence having granted leave in respect of paragraph 4.
The appellant’s brief which was filed out of time on 14th May, 2002 about three months after the record of appeal was entered by an order directing departure from the rules of the court on 25th February, 2002, was regularized by an order granting extension of time granted on the 27th May, 2002 and same was deemed as properly filed and served on that day. The respondent however, was not as vigilant as the appellant. The respondent’s brief was purportedly filed on 27th September, 2002 that was four months after deeming the appellant’s brief as duly filed and served. However, the respondent did not apply for and obtained any order extending the time for filing of it’s brief. By order 6 rule 4(1) of the Court of Appeal Rules 2002, (then inforce) the respondent had forty five days to file it’s brief. Regrettably the two motions for extension of time filed by the respondent on 27th September 2002 and 20th June 2003 were both struck out on 26th May 2003 and 27th March 2007 respectively, the last of which was struck out following its withdrawal by the respondent’s counsel. The last motion filed by the respondent on 30th May 2007 seeking to arrest the judgment of this court was dismissed on 7th June 2007 for lacking in merit. With these developments the respondent was left with no competent brief to be countenanced. The appeal was accordingly heard on the appellant’s brief.
The appellant raised a single issue for determination in this appeal from the four similar grounds of appeal as follows:
“Whether the learned trial Judge was right in refusing to grant an amendment of paragraphs 6 and 7 of the 4th amended statement of defence.”
The fourth amended statement of defence exhibited to the application seeking leave to amend the statement of defence dated 19th July, 1999 contains inter alia, the following averments:
- “In response to paragraph 5 of the statement of claim, the defendant avers that the plaintiff operated a group account wherein paid premiums were paid in into the account periodically and not specifically for each of the policy in respect of the various insurance contracts entered into by he plaintiff company.
- In response to paragraphs 4-8 of the plaintiffs statement of claim, the defendant avers that it was understood by the plaintiff and defendant that any contracts of insurance entered into between the plaintiff and defendant in respect of any of the plaintiff’s equipment would only take effect from the date of payment by the plaintiff of the relevant premium under and in respect of each such insurance contract to the defendant. The defendant will at the trial of this action rely on a letter dated 1st March 1993 written to the plaintiff through its agents in proof of this averment and the plaintiff is hereby given notice to produce the original.
- “In response to paragraph 7 and 8 of the statement of claim the defendant avers that the premiums payable on the policy of the MN “STELLA” and the MIV “RUTI-r” were communicated to the plaintiff by two separate debit notes both dated 1st September, 1992 and numbered 6190 and 6191 respectively. The plaintiff will at the trial of this action rely on the counterpart copies of the said debit notes in proof of this averment.”
- In further response to paragraphs 7 and 8 of the statement of claim, the defendant avers that although Policy Certificate were issued in favour of the plaintiff, the premiums payable on those policies were not paid at the time of issuance, and was in fact not paid in respect of the MIV “RUTH” before the accident forming the subject of this action occurred on the vessel on 7th July, 1993. The defendants will rely on the audited statement of the group account of the various insurance policies held by the plaintiff with the defendant company at the trial of this action in proof of this averment. (See page 67-68 of the record of appeal).”
The learned trial Judge allowed the amendment in respect of paragraph 4 and refused to grant leave in respect of paragraphs 5, 6 and 7. The appeal is against the refusal to grant leave to amend the statement of defence in line with paragraphs 6 and 7. The learned trial Judge in his ruling observed thus:
“The amendments sought in paragraphs 5, 6 and 7 of the exhibit ‘LA1’ annexed to the affidavit in support, that is, the proposed 4th amended statement of defence are essentially intended to introduce new facts particularly the ‘agency element. To allow the amendment will lead to a breach of one of the two fundamental principles of adjudication; to wit, audi alteram partem. It is my respectful view that the amendment is intended to overreach. The amendment cannot therefore be allowed see UNION BANK OF NIGERIA LTD VS OGBOH (1995) 2 NWLR (pt.380) 647.”
The learned counsel to the appellant argued that the provision of order 27 rule 2 of the Federal High Court (Civil Procedure) Rules 2002 enjoins the court to allow either party to make such amendments to their pleadings, at any stage of the proceedings before judgment, as may be necessary for the purpose of determining the real questions in controversy between the parties. The Supreme Court in OJAH VS OGBONI (1976) All N.L.R. 277 at 281 commenting on the principles for amendment of pleadings held thus:
“It is settled law that an amendment of pleadings should be allowed unless:
- It will entail injustice to the respondent:
- The applicant is acting mala fide; (see TILDESLEY VS HARPER (1878) 10 Ch. 0 393;
- By his blunder, the applicant has done some injury to the respondent which cannot be compensated by costs or otherwise.” Where a proposed amendment raises issues in controversy, which are already in evidence, the court must allow it.
The law is trite that pleadings may be amended at any stage of the proceedings before judgment if it is expedient to do so for purposes of determining real issues in controversy. Either party is ordinarily given leave to make such amendment as is reasonably necessary for the due presentation of his case, provided that the amendment does not introduce a new cause of action and is not calculated to unduly over reach the opposite party. The Supreme Court in the case of OJAH VS OGBONI (supra) at page 283 observed thus:
“We cannot agree to allow the amendments sought in the present case would be unjust to the defendant. Indeed the proposed amendments raise points which appear to us to he vital to the case, and unless they are adjudicated upon, the real issues between the parties will be left undecided. We are satisfied that the defendants were not misled or embarrassed. Evidence germane to the amendments sought had been led by the plaintiffs without any objection. In our view, the learned Judge proceeded on wrong principle in refusing the amendments sought. We are therefore in no doubt that to allow the ruling of the lower court to stand would involve a real injustice to the plaintiffs/appellants.”
In AROJOYE VS DBA (1986) 2 NWLR (pt. 20) 101, Wali, JCA (as he then was) at p. 109 expressed the following views:
“In considering whether or not to grant an amendment to pleadings, the court must always be guided by the materiality of the amendment sought, the rules of audi alteram partem and the genuiness of the amendment.”
The same learned Jurist Wali, JSC at the Supreme Court in SHELL PETROLEUM DEV. CO. VS AMBAH (1999) 3 NWLR (pt 593) 1 at p. 10 observed thus:
“The principles of law relating to amendment of pleadings is that it can be granted at any stage of the proceedings provided it does not introduce a new cause of action or will over-reach or is prejudicial to the other party.”
The learned counsel to the appellant submitted that the amendment sought by paragraph 6 of the 4th amended statement of defence was intended to bring in to evidence the debit notes referred to by the D.W.1 in his evidence in Chief (page 57 of the record). Paragraph 7 referred to the audited statement of the group account of the various policies held by the respondent and the amendment will allow the relevant documentary evidence to be tendered. The appellant’s counsel further contended that the issue whether premiums were paid in respect of the various insurance policies was raised in paragraphs 4-8 of the statement of claim (see pp 2-3 of the record), paragraphs 4-9 of the 3rd amended statement of defence (pp. 26 – 27 of the record) and paragraph 1 of the reply to the 3rd amended statement of defence (p. 32 of the record). The issue is also critical to the appellant’s defence.
It was further pointed out by counsel that the plaintiff had tendered a letter from the appellant company to the effect that payments were made in respect of the premiums on the 6th July 1999 while cross examining D.W.1 The learned trial Judge himself while admitting the letter in evidence noted that the issue of payment of premium was raised in the various pleadings.
Amendment aimed at exposing real issues in controversy between the parties must be allowed except if it is designed to over reach the opposing party.
The reason given by the learned trial Judge for refusing to grant leave to the appellants in respect of paragraphs 6 and 7 is that a new issue of agency was introduced. It seems that the learned trial Judge was only short sited in respect of the issue raised in paragraph 5 which he blindly extended to paragraphs 6 and 7 of the proposed amendment that are not affected by the same virus. This appeal being against the refusal of the court below in respect of paragraphs 6 and 7, leaves the reason for refusal in respect of those paragraphs nakedly invalid. One can see clearly from the face of the rejected paragraphs 6 and 7 that no new issue has been raised therein. In fact, the averments in those two paragraphs are focused on very vital, critical and controversial issues that to disallow the amendment will not only be prejudicial to the appellants but will also leave real issues in controversy between the parties undecided. I cannot see the respondents being over reached in anyway by the amendments proposed in paragraphs 6 and 7. The learned trial Judge was in error by refusing the amendments sought in those two paragraphs. Where a decision of the trial court is perverse, as in this case, an appellate court has a duty to interfere by setting it aside.
The issue for determination is resolved in favour of the appellant and the appeal succeeds per force. The ruling of the lower court delivered on 9th August, 1999 is hereby set aside. It is further ordered pursuant to section 15 of the Court of Appeal Act, Cap. C36 LFN 2004 that leave be and is hereby granted to the appellants to amend their statement of defence in line with paragraphs 6 and 7 of the proposed 4th amended statement of defence in addition to paragraph 4 earlier granted. The 4th amended statement of defence incorporating paragraphs 4, 6 and 7 shall be filed in the registry of the lower court and served on the plaintiff/respondent within two weeks from today.
i award cost of N=30,000.00 to the appellants against the respondents.
Other Citations: (2008)LCN/2628(CA)
