Alh Dauda Haliru V. Unity Bank Plc (2016) LLJR-CA
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OLUDOTUN ADEBOLA ADEFOPE-OKOJIE, J.C.A.
The Respondent, as Plaintiff before the lower Court, filed along with his Writ of Summons and Statement of Claim, an application for Summary Judgment before the High Court of Kaduna State. Kabiru Daboh J entered judgment as prayed. Dissatisfied with this Judgment, the Appellant has appealed to this Court by Notice of Appeal, dated 12/2/14 and filed on the same date.
Briefs of Argument were filed and adopted in Court by Counsel to the parties. The Appellant’s Brief of Arguments, settled by Abubakar Ashat Esq, raised 3 issues for determination, namely:
1. Whether the Respondents claim which involved compound interest was one that can be brought under the summary judgment procedure.
2. Whether the Respondents claim which cannot be ascertained lrom the Affidavit evidence without resort to extrinsic accounting sources was one that can be brought under the summary judgment procedure and judgment entered without oral evidence.
3. Whether the refusal of the lower Court to hear the Appellants counter claim was not a breach of the Appellant’s right to fair hearing
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M.I. Abubakar Esq, in the Respondent’s Brief, formulated 2 issues for determination, as follow:
1. Whether the lower Court was right in entering judgment for the Respondent under the summary judgment procedure.
2. Whether the failure of the lower Court to make a specific pronouncement on the Appellant?s counter claim amounted to a denial of fair hearing to the Appellant.
I shall adopt, as the sole issue for determination, that of the Respondent, as it encapsulates the issues in contention in this case
The issue for determination, accordingly is:
Whether the lower Court was right in entering judgment for the Respondent under the Summary Judgment procedure?
The Appellant argues that the Respondent was not entitled to bring his claim under this procedure as its claim was not a liquidated money demand but one that requires explanation or proof as to how the sum and interest were arrived at. Even though compound interest can be charged, the claim for same cannot be brought under this procedure. Where the actual indebtedness cannot be ascertained without resort to extrinsic accounting knowledge, the
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Summary Judgment procedure should not be used. The case should thus have been transferred to the general cause list. He cited Intercontinental Bonk Ltd v Brifina Ltd (2012) All FWLR part 639 Page 7792; Barclays Bank of Nig Ltd v Abubakar (1977) NSCC 415.
In response, M.I. Abubakar Esq, citing Order 11 of the Kaduna State High Court (Civil Procedure) Rules 2007 submitted that these rules are not restricted to a claim for a debt or liquidated demand. By Order 11 Rule 1, the procedure is applicable in any situation where a Plaintiff believes that there is no defence to the action and having filed the requested processes. He decried the application of the authorities cited ‘willy-nilly’ to all cases involving summary judgment procedure. Giving the definition of “liquidated money demand”, he submitted that the present case fell within that definition. He cited the cases of Nortex (Nig) Ltd v Franc Tools Co. Ltd (1997) 4 NWLR Part 501 Page 603 at 609 and Micro international Agency Ltd (2012) 2 NWLR Part 7285 Page 564; Thor Ltd v FCMB (2005) 14 NWLR Part 946 Page 696.
?The facts of this case, as contained in the Respondent’s Statement of Claim, and in the
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affidavit in support of its application for Summary Judgment, are that, following a request by the Appellant, by letter dated 17th September 2010 for a temporary overdraft facility of N2.5 Million to enable him pay his drivers allowance and to purchase spare parts, the Respondent granted the same for a period of 30 days, subject to the terms thereon stated. Due to the default of the Appellant in repayment of the overdraft as agreed, the Respondent, following an abortive demand to the Appellant by its Solicitor, instituted the present action before the lower Court, claiming by its pleadings and in the Motion for Summary Judgment, the following:
1. AN ORDER entering summary judgment for the Plaintiff/ Applicant against the Defendant/Respondent in terms of the reliefs set out in the Plaintiff/ Applicant?s Statement of Claim viz:
a. The sum of N5,076,874.72 (five million, sixteen thousand, eight hundred and fourteen noira, twelve kobo) being the debit balance outstanding against the Defendant in the Defendant’s individual Current Account with the Plaintiff as at 30th September, 2013 made up of unpaid temporary overdraft principal, interest and
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usual bank charges.
b. Interest on the said sum N5,076,874,72 (five million, sixteen thousand, eight hundred and fourteen naira, twelve kobo) at the rate of 26% per annum compoundable every month commencing from 1st October, 2013 until the date of judgment and thereafter Court interest at the rate of 10% per annum until the judgment sum is fully liquidated.
c. The Costs of the action as may be assessed by this Honorable Court.
2. SUCH FURTHER OR OTHER ORDER (S) as this Honorable Court may deem lit to make in this circumstance.
Exhibited to the affidavit in support of the Motion is an application by the Appellant for a temporary overdraft of N2.5M. Also exhibited is a “Temporary Facility Acceptance Form” signed by the Appellant in the said amount and agreeing to the following terms:
“Pricing
Interest rate -26%
Fee(s) – 2%
COT – N5/Mille
Late Payment Penalty Fee – N/A”
?As collateral is a Legal Mortgage over the Appellant’s landed property. Exhibited, in addition, are demand letters and also the Appellant’s Statement of Account showing a debit balance, as at 30/9/13, of N5,016,814.12 (Five Million and Sixteen
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Thousand Eight Hundred and Fourteen Naira Twelve Kobo).
The Appellant, in his Statement of Defence, without denying the transaction, stated that the facility was a “Lease Finance Facility” of N2.5 M to run for a period of 6 months inclusive of 3 months moratorium and that the expiry period of the loan was December 1st 2013. He averred that he did not agree with the upfront payment of 0.25% processing fee and 0.75% and that these charges were against banking rules and regulations. Also, that before the said sum was granted, the credit balance on his account was N19,940,039.91. He alleged that it was against banking rules and regulations for the Respondent to treat a restructured facility as a fresh loan and also against banking regulations for them to charge compound interest.
He counterclaimed for the following:
a. A declaration that the Compound interest charged by the Plaintiff is against banking rules and regulations and therefore illegal and null and void,
b. A declaration that the Compound interest charged by the Plaintiff is not in accordance with agreement between the Plaintiff and the Defendant and therefore illegal and null and void.
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c. A declaration that the COT and the Management fees charged by the Plaintiff is against banking rules and regulations and therefore illegal and null and void.
d. A declaration that the commission on turnover COT charged by the Plaintiff without any banking transaction is null and void and same not binding on the Defendant,
e. The Defendant also claim (sic) the cost of filing his Statement of Defence and this Counterclaim.
The principles that apply in cases where summary judgment is sought, are trite. It was held in the case of United Bank for Africa Plc v Jargaba (2007) 11 NWLR part 1045 247 at 270 Para 6-H per I.T Muhammad JSC, as follows:
“A summary judgment (sic) is a procedure for disposing with dispatch, cases which are virtually uncontested. It also applies to cases where there can be no reasonable doubt that a plaintiff is entitled to judgment and where it is inexpedient to allow a defendant to defend for mere purpose of delay. It is for the plain and straight forward, not for the devious and craft”
In Thor Ltd v FCMB Ltd [2005] 74 NWLR part 946 Page 696 at 770-777 Para H-A per Edozie JSC reading the leading judgment held that:
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“The summary judgment procedure which is similar to the undefended list procedure, is designed to enable a party obtain judgment especially in liquidated demand cases, without the need for a full trial where the other party cannot satisfy the Court that it should be allowed to defend the action: see Nishizawa Ltd. v, Jethwoni (1984) 12 SC 234, Macaulay v. NAL Merchant Bank (1990) 4 N.W.L.R. (Pt. 144) 283, 374, Pan Atlantic Shipping and Transport Agencies Ltd. v. Rhein Mass G.M.B.H. (1997) 3 N,W.L.R. (Pt.493) 248.
See also Wema Securities And Finance Plc V. Nigeria Agricultural Insurance Corp (2015) 76 NWLR Part 7484 Page 93 at 140-147 Para B-C per Nweze JSC.
On when a Defendant should be let in to defend, it was held by the Supreme Court, in the case of UBA v Jargaba Supra by I. T. Mohammed JSC at Page 270-277 Para 8-A that:
“Although the general approach of the Courts is that some liberality should be brought to bear by trial Courts while considering whether to grant leave to a defendant to defend an action filed against him, there has to be revealed, on the other hand, by the defendant in his affidavit in support of his notice
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of intention to defend, facts which will disclose the existence of triable issues. All that is required is that there should be some doubt in the mind of the trial Court. See: Peat Marwick Ani, Ogunde & Co. v, Okike (1995) 7 NWLR (Pt.369) 71; Macaulay v. NAL Merchant Bank Ltd, (7990) 4 NWLR (Pt.144) 283; Jipreze v. Okonkwo (1987) 3 NWLR (Pt. 62) 737; Nishizawo Ltd. v. tethwani (1984) 72 SC 234.
…Order 22 Rule 3(1) of the Kaduna State High Court (Civil Procedure) Rules, is designed to relieve the Courts of the rigour of pleadings and burden of hearing tedious evidence on sham defences mounted by defendants who have no defence and are just determined to dribble and cheat plaintiffs out of reliefs they are normally entitled to. See: Planwell Ltd v. Ogalo (2003) 18 NWLR (Pt.852) 478, (2003) 72 SCNJ 58 at Page 68.”
…On the issue of whether bare denial of liability amounts to a reasonable defence, a plethora of decided cases shows that a bare denial of liability or indebtedness to the plaintiff or vague allegation of fraud against him without more does not suffice for that purpose.”
See also Wema Securities And Finance Plc V. Nigeria
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Agricultural Insurance Corp (2015) 76 NWLR part 7484 Page 93 at 740-747 Para B-C per Nweze JSC
It is clear that the Appellant is not denying that he took a facility of N2.5 Million from the Respondent, whether he chooses to call it a “Lease Finance Facility”, or whether it be termed “Overdraft facility” as alleged by the Respondent.
Although he denied liability for payment of the fees stated in the agreement, the trial Judge rightly rejected his denial, holding that Exhibit B, signed by him, put the lie to this denial and that he is accordingly estopped from denying the terms and conditions of the overdraft. He cannot also set up, the Judge held, a defence in conflict with his document. In this, the trial Judge cannot be faulted.
Indeed the law is that it is morally despicable for a party who has benefited and utilized a loan, to turn around to allege its illegality. See Enekwe v IMB (Nig) Ltd (2007) All FWLR part 349 Page 1053 at 1087 Para C-D per Ogbuagu JSC; Awojugbagbe Light Industries Ltd v Chinukwe (1995) 4 NWLR Part 390 Page 409 at 426 Para A.C per Onu JSC; Adetunji v Agbojo (1997) 1 NWLR Part 484 Page 705 at 718 Para B per Ige JCA(of blessed memory).
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The Appellant cannot thus be heard to deny the charges contracted under the agreement, having accepted these charges as conditional to the acceptance of the facility.
With regard to compound interest, I note that initially, in his Statement of Defence, he denied liability for this payment. His Counsel, in his Brief of Arguments, however, later conceded to liability for the payment. His contention, was that the same cannot be computed without evidence being taken.
The trial Judge, in his judgment, rightly noted that the Court is not, at this stage, expected to decide whether the defence has been established, merely to look at the facts and determine whether a prima facie defence has been disclosed. He acknowledged that it is trite that the Appellant, in his Statement of Defence, must condescend upon particulars and deal comprehensively with the Respondent’s claim, setting out his defence and the facts relied upon. He distinguished the case of Briffino cited and held that the amount stated in the Statement of Claim is determinate, ascertainable and requires no explanation. In addition, there is nothing in the Statement of
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Defence that rebuts or contradicts the figures. He thereupon entered judgment in the principal sum loaned, together with the charges and interest claimed
While I agree with the lower Court that the Appellant having taken the loan and having accepted liability for repayment of the loan, is bound to repay the same, there must be some caution on the manner of arrival at the interest charged.
The Appellant complains that these charges cannot be ascertained without resort to extrinsic accounting knowledge. The Courts have had occasion to pronounce on the question of sufficiency of a Statement of Account as conclusive proof of the amount owed by a customer.
It was held by the Supreme Court in the case of Bilante International Ltd v Nigerian Deposit insurance Corporation (2012) 15 NWLR Part 1270 Page 407 at Page 428-429 Para E-H per Fabiyi JSC that in order for a claim of a debt outstanding in a customer’s account with its banker to succeed, the banker has to prove how the debit balance claimed from the customer was arrived at. The claim, the Court held, is not proved by just tendering the statement of account, without adducing evidence to put the
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exhibit in proper perspective so as to establish the claim.
It was also held in the case of Biezan Exclusive Guest House Ltd v Union Homes Savings and Loans Ltd (2011) 7 NWLR Part 1246 Page 246 at 286 Paras E-H per Awotoye JCA that a statement of account is not sufficient explanation of debts and lodgments. Evidence needs to be adduced of its contents. There should be a breakdown of how much of the debt is interest to enable the Court appreciate what is before it, without having to do private calculation.
In addition, damages are said to be liquidated when a specific sum of money has been expressly stipulated by the parties to a bond or other contract as the amount of damages to be recovered by either party for a breach of the agreement by the other side.
The factors for determining a liquidated sum are as follow:-
(a) The sum must be arithmetically ascertainable without further investigation.
(b) If it is in reference to a contract, the parties to same must have mutually and unequivocally agreed on a fixed amount payable on breach.
(c) The agreed and fixed amount must be known prior to the breach. See the case of
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Wema Securities And Finance Plc V. Nigeria Agricultural Insurance Corp (2015) 16 NWLR part 1484 Page 93 at 144-145 Para G-B per Fabiyi JSC.
In the instant case, the depositions in the affidavit in support of the Motion for Summary Judgment, with respect to the manner of charges are as follow:
?11. In line with the terms of the facility and usual banking practice, the Plaintiff has been charging interest on the Account at the rate of 26% per annum compoundable every month, COT and other usual bank charges which are duly reflected in the Defendant’s Statement of Account.
12. By 29th October, 2010 by which time the 30 days tenure of the facility had expired, the debit balance in the Defendants Account stood, N2,560,266.76 made up of the overdraft principal, interest, COT and other usual bank charges,
13. Upon the expiration of the overdraft facility the Defendant foiled or neglected to repay the overdraft principal, accrued interest and usual bank charges consequent upon which the Plaintiff wrote a letter of demand to the Defendant including the letter dated on 6th June, 2011. A copy of the said letter is hereto attached and marked Exhibit C.
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16. At the close of business on 30th September, 2013 the debit balance outstanding against the Defendant in the Defendant’s Account with the Plaintiff Bank stood at N5,076,874.72 (five million, sixteen thousand, eight hundred and fourteen naira, twelve kobo) and the said balance will continue to deteriorate on account of monthly capitalization of interest and other usual bank charges. A copy of the Statement of the Account in respect of the Account made up to the said date is hereto attached and marked Exhibit F.
18. I have personally examined the said Statement of Account with the original entries in the Plaintiff Bank and I certify or confirm that:
(a) The statement is a print out from the Plaintiffs Computer in which the Plaintiff stores information relating to transactions in its customers Account including credit and debit entries;
(b) The said Computer and the information stored therein constitute part of the ordinary records or books of the Plaintiff Bank;
(c)The entries in the Computer were made in the usual and ordinary course of business and the computer is under the custody and control of the Plaintiffs Bank
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at its Yakubu Gowon Way Branch Kaduna;
(d) All transactions in respect of the Defendant’s Account relevant to the claim herein were recorded and stored in the Computer over the period of the transactions including all credit and debit entries into the Account; and
(e) I have examined the said Statement of Account with the original entries in the Bank’s Computer and found same to be correct.”
These paragraphs, do not, unfortunately, give the breakdown of the various charges.
While I must not be heard to be saying that oral evidence must be given by the Bank to prove charges in an application for Summary Judgment, it is however incumbent on the claimant seeking for payment of these charges to give a breakdown of the various charges as appear in the Statement of Account, to lend itself readily to ascertainment of what sum represents which charge. Failure to do this may invite the type of sanction given in the case of Adebest Telecommunications (Nig) Ltd v Union Bank of Nigeria Plc (2010) 1 NWLR (Pt. 1175) Page 360 at 385- 386 paras H-A per Denton-West JCA where Banks were warned to refrain from “unnecessary exorbitant interest rates
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charged” as has been seen to exist in Nigeria.
It is important that Banks are transparent, at all times, in the manner of bank charges, as, more often than not, a default by the customer may be due to dwindling economic resources, without the added burden of being visited with onerous interest charges.
In the instant case, the various charges were simply inbuilt into the Statement of Account, without a breakdown of same, with an inability by the Court or the Appellant, to ascertain the manner of calculation. I must, accordingly, resolve the 1st issue for determination partly in favour of the Appellant and partly in favour of the Respondent. While the judgment of the lower Court on the principal sum owed by the Appellant is inviolate with its attendant interest, the manner of calculation of the other charges shall have go to trial.
In consequence, this appeal succeeds in part. While I set aside the judgment of the lower Court in the sum of N5,016,814.12 (Five Million Sixteen Thousand Eight Hundred and Fourteen Naira Twelve Kobo), I enter judgment in the Respondent’s favour for the principal sum of N2.5 Million (Two Million Five Hundred Thousand
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Naira), with interest of 26% per annum on the said sum, as agreed by the parties and as adjudged by the lower Court, to take effect from 4/11/13 (the date of filing) till 11/2/14 (the date of judgment at the trial Court), and thereafter at the rate of 10% per annum until payment.
The balance of N2,516,814.12 (Two Million Five Hundred and Sixteen Thousand Eight Hundred and Fourteen Naira Twelve Kobo), allegedly representing the various charges as per the agreement between the parties and other bank charges, shall go to trial but before another Judge of the Kaduna State High Court.
Each party shall bear its own costs.
Other Citations: (2016)LCN/8601(CA)
