Befareen Pharmacy Limited V. African International Bank Limited (2005)
LawGlobal-Hub Lead Judgment Report
ADEKEYE, J.C.A.
This is an appeal against the judgment of the Anambra State, High Court of Justice, Onitsha Judicial Division, delivered on the 30/4/99, in suit No.0/42/99.
The claim of the plaintiff – The African International Bank Ltd are as follows:
(a) The sum of N21,076,931.87 (Twenty-one million, Seventy Six Thousand, Nine hundred and Thirty-one Naira Eighty-Seven Kobo) being the outstanding balance of the overdraft and import loan facilities granted to the defendant by the plaintiff.
(b) Interest on the said sum of N21,076,93 1.87 at the rate of 21% per annum with monthly rests from the 1st day of November, 1998, until the date of judgment.
(c) Interest at the rate of 5% per annum on the judgment debt from the date of judgment until the entire sum is finally liquidated.
The plaintiff filed an affidavit in support of the foregoing particulars to which were annexed eleven documents marked as exhs. A, B, B1, C, D1, D2, D3, E and F respectively. The plaintiff gave the indication that the defendant – Befareen Pharmacy Ltd. had no defence to the plaintiff’s claim; the suit was placed under the undefended list. The defendant filed a notice of intention to defend the suit supported with an affidavit to which were annexed six documents marked as exhibits A, B, C, C2, D and E. The appellant filed a motion on notice for extension of time to regularize the notice of intention to defend which was filed out of time.
The court granted the appellants application and reserved the case for ruling under the provisions of order 24 rule 9(2) of the High Court (Civil Procedure Rules) of Anambra State, 1988. The learned trial Judge considered the particulars of the claim and the Supporting affidavit, the notice of intention to defend of the defendant and the supporting affidavit, and in his considered ruling concluded that the appellant has not placed before the court any bonafide issue for trial, and consequently proceeded to enter judgment for the plaintiff as claimed. Being dissatisfied with the ruling the defendant, henceforthm to be referred to as the appellant appealed to this court. Parties exchanged briefs and at the time of hearing of this appeal, the appellant relied on the brief filed on 30/11/99, and the respondent on the brief deemed filed on the 9/10/02.
The appellant distilled four issues for determination from his four grounds of appeal as follows: –
(1) Whether the learned trial Judge was not in error, in holding that the defendant company did not disclose a triable issue in its notice of intention to defend.
(2) Whether the learned trial Judge was not in error, in holding that Order 24 rules 9(1) (2) and (4) of the High Court (Civil Procedure) Rules do not permit counsel on both sides to address the court after filing their papers.
(3) Whether there was breach of the principle of fair hearing and undue interference by the Judge which occasioned a grave miscarriage of justice.
(4) Whether the ruling or decision was against the weight of evidence having regard to the affidavit of the defendant and the exhibits attached.
The respondent in his brief distilled three issues for determination as follows:-
(a) Did the affidavit in support of the appellant’s notice of intention to defend, disclose any bonafide issue for trial between the parties so as to necessitate the transfer of the suit from the undefended list to the general cause list?
(b) Whether the provision of Order 24 rule 9 of the High Court Rules of Anambra State, 1988, requires the court to take addresses from counsel before determining whether or not the defence has raised any triable issue.
(c) Whether the procedure whereby the trial court heard and determined the matter under the undefended list without taking argument from counsel resulted to a denial of fair hearing.
Since the issues settled by the parties are similar, I shall adopt the issues of the appellants for the purpose of this appeal.
Issue one is, whether the learned trial Judge was not in error, in holding that the defendant’s company did not disclose a triable issue in its notice of intention to defend. The arguments and submission of the appellant was that the learned trial Judge concluded that it has not raised any bonafide issue for trial in the suit going by the facts disclosed in the notice of his intention to defend, page 37 lines 15-20 of the record. The respondent bank granted to the appellant’s company two facilities –
(a) Two million Naira overdraft facility approved by the respondent’s bank Onitsha branch vide approval letter of 11/8/97.
(b) A 5 million Naira import support loan approved by the respondent’s Head office Lagos letter, dated 12/8/97.
The two letters stipulated the terms and conditions of the facilities. The respondent wrongfully lumped these accounts together and was charging interest together without regard to the terms of both facilities. The bone of contention of the appellant is how a facility of seven million naira could rise to N21,076,937.87 in a period of fourteen months at the agreed rate of 21% interest per annum? The respondent did not answer this question before the learned trial Judge came to the conclusion that there was no triable issue. The only statement of account exhibited cover a period of three months, from 6/8/98 to 31/10/98. The respondent did not satisfy the requirement of the law in matters for the undefended list that full particulars of a debtor’s statement of accounts must be attached to the application. The appellant had on two occasions rejected the unauthorized debits in the statement of accounts sent to it, pages 25-27 of the record. The appellant submitted further to satisfy the court that there is a triable issue on balance of probabilities and not beyond reasonable doubt. This explanation of the respondent as to how the sum loaned rose astronomically shows that this is a triable issue, and the matter must be removed to the General Cause list. The appellant cited the cases of General Securities and Finance Co. Ltd. v. Obiekezie (1997) 10 NWLR (Pt.526) 577; Osy Jipreze v. Ifeanyi Okonkwo & Anor. (1987) 3 NWLR (Pt.62) 737.
The respondent replied on this issue that the condition precedent for transferring a suit from the undefended suit to the General Cause List is whether, the appellant disclosed any triable issue in its affidavit in support of the notice of intention to defend. The appellant has failed to meet the required standard. The respondent explained the facilities granted to the appellant, going by exhs. B and B1, the statement of accounts as exhs. C and C1 and demand letters exhs. D, D1. D2, and D3 from the respondent to the appellant, demanding the repayment of the loans.
The respondent exhibited a letter marked as exh. E from the appellant to the respondent, where the appellant unequivocally acknowledged the debt and accepted liability to liquidate same. The respondent did make out a case against the appellant for the hearing and determination of the suit under the undefended list. In order to establish a triable issue, denial of the plaintiff’s claim is not enough, particularly where the appellant’s affidavit of the notice of intention to defend constitutes more general denial, and vague complaint relating to excessive interest charges. The defence of the appellant failed to show how much is admitted and how much is contested. He must particularize the interest elements and go further to substantiate them. The letter exh. E from the appellant to the respondent constitutes a written acknowledgement by the appellant of its indebtedness to the respondent which negative the existence of any triable issue by notice of intention to defend the action. The defence put up by the appellant is aimed at delaying the trial. The discretion to hold that there is a triable issue is that of the court, which the learned trial Judge had exercised judicially and judiciously. The respondents cited the cases of Aikabeli v. African Petroleum Plc. (2001) 6 NWLR (Pt.708) 93 at 101; Franchal Nigeria Ltd. & Anor. v. Nigeria Arab Bank Limited (1995) 8 NWLR (PtAI2) 176 at 188; Zahkem International v. Ndu C. Ofoma (2000) 11 NWLR (Pt.679) 609; Alhaji Akuhu Abdullahi v. Waje Community Bank (2000) 7 NWLR (Pt.663) 9 at 25; Peter Amadi Nwankwo v. Ecumenical Development Co-operative Society (2002) 1 NWLR (Pt.749) 513 at 542; Emmanuel Iloegbu v. Commissioner of Police (1992) 7 NWLR (Pt.459) at 254.
Issue two is whether the learned trial Judge was in error, in holding that Order 24 rule 9(1)(2)(3) and (4) High court rules 1988 of Anambra State does not permit counsel on both sides to address the court after filing their papers. The appellant submitted that the learned trial Judge prevented counsel from addressing the court and relied heavily upon the authority of General Securities: & Finance Co. Ltd. v. Obiekezie (1997) 10 NWLR (Pt.526) 577. The appellant distinguished their case from the case in hand. The provision of Order 24 rule 9 (1), (2), (3), (4) and (5) of the High Court Rules, Anambra State, 1988, does not expressly or impliedly prevent parties or counsel from being heard after they have filed their claim or notice of intention to defend. The interpretation given to it by the learned trial Judge violates the principle of fair hearing. The provision refers to the “hearing of a suit” and “Not less than five days before the date fixed for hearing”, which presupposes that there must be a hearing of the case where parties will address the court. The appellant cited the cases General Securities & Finance Co. Ltd. v. Lawrence Obiekezie (1997) 10 NWLR (Pt.526) 577; Fasogbon v. Layade (1999) 11 NWLR (Pt. 628) 543; Peoples Democratic Party v. INEC & 4 Ors. (1999) 11 NWLR (Pt. 626) 200. The respondent replied that what the rules require is that the court shall consider the affidavit in order to come to a determination as to whether or not there is a triable issue. The court is not expected to take addresses of counsel for this purpose. The words of the provision of Order 24 rule 9 of the High Court (Civil Procedure) Rules of Anambra State shall be given its plain and ordinary meaning. The court is expected to look into the claim and the accompanying affidavit, and the notice of intention to defend with the accompanying affidavit for the purpose of determining whether a matter shall remain on the undefended List. The respondent cited the cases of 7-Up Bottling Company Ltd. v. Abiola and Sons Nigeria Ltd. (1995) 3 NWLR (Pt.383) 257 at 276; Oladokun v. Military Governor, Oyo State (1996) 8 NWLR (Pt.467) 387; Ibrahim v. Barde (1996) 9 NWLR (Pt. 474) 513; Maley v. Isah (2000) 5 NWLR (Pt.658) 651 at 666; Chrisdon Industrial Co. Ltd v. African International Bank Ltd. (2002) 8 NWLR (Pt.768) 152 at 183.
The appellant argued grounds three and four together, which are whether there was lack of fair hearing and undue interference with the trial occasioning miscarriage of justice and whether the ruling or decision was against the weight of evidence. The appellants submitted that where an application is supported by affidavit, it is the duty of the party or his counsel to pinpoint the relevant paragraphs of the affidavit which form the main plank of his case. It may be necessary to file further affidavit to bring in new facts. The appellant had protested to the respondent and rejected the lumping of its two accounts, the import support loan and the over draft facility account, the false and arbitrary interest charged on his account, the balance on his account and demand for the statement of his account to enable it to know the true position. The appellant alleged that he was denied the opportunity of filing a statement of account relevant to his case which amounts to a denial of fair hearing in the circumstance of this case. The appellant submitted that in refusing hearing to brother counsel the learned trial Judge placed himself in a position where it would try to make out a case for the parties on their affidavit. The learned trial Judge proceeded to deliver judgment without presentation of the case of both parties which resulted to a grave miscarriage of justice. The appellant submitted that the judgment is against the weight of evidence, as there is no way a facility of N7 million at an agreed interest rate of 21% per annum, will yield 14 million at an agreed period of fourteen months. The learned trial Judge observed the ruinous excess charges, but expected the appellant to take a suit challenging same. He ought to have called upon the parties to prove their case by calling evidence.
In his reply, the respondent submitted that the procedure whereby the trial court heard and determined the suit under the undefended list without taking arguments from counsel did not result in any denial of fair hearing, but was in strict compliance with the Anambra State Rules of the High Court, 1988.
I have given a careful consideration to the arguments and submissions of the parties. The sum total of the issue for determination brings into focus the role of the court in matters placed in the undefended list and on transfer to general cause list, under the Anambra State High Court Rules 1988. The relevant provisions of this enabling statute are: – Order 5 rule 14 relating to commencement of suits, which stipulates as follows:-
Rule 14
“Whenever application is made for the issue of a writ of summons in respect of a claim to recover a debt or liquidated money demand and such application is supported by an affidavit setting forth the grounds upon which the claim is based and stating that in the deponents belief there is no defence thereto, the Registrar shall enter the suit in what shall be called the “Undefended List”.
Order 24 rule 9 states how a matter under the undefended list shall be disposed of.
Worthy of note and relevant to the issue between the appellant and respondent is Order 24 rule 9(2) which stipulates that: –
Rule 9(2)
“If the party served with the writ of summons and affidavit delivers to the Registrar, not less than five days before the date fixed for hearing, a notice in writing that he intends to defend the suit, together with an affidavit setting out the grounds of his defence and the court is satisfied that there is a triable issue, then in such case the suit shall be entered in the general cause list and pleadings shall be filed.”
“(5) Nothing herein shall preclude the court from making an order, should it so think fit, at any stage of the proceedings for the suit to be transferred to the general list on the ground that the suit is not suitable for placement in the undefended list.”
It is apparent from the foregoing that, an action under the undefended list is for liquidated claim which is defined as a claim for an amount previously agreed by the parties or that can be precisely determined by operation of law or by the terms of the parties. A suit brought under the undefended list presupposes that the defendant has no defence or real defence to the plaintiff’s action. The fact is required to be specifically declared in the affidavit in support of the application for the issue of the writ under the undefended list. The summary judgment procedure adopted in the undefended list, is designed to enable a litigant obtain a summary judgment without proceeding to trial. Brifina Ltd. v. Intercontinental Bank Ltd. (2003) 5 NWLR (Pt. 814) 540; Kaduna State Transport Authority v. Ofodile (1999) 10 NWLR (Pt.622) 259; Nasr. v. Elegbede (1980) 1-3 CCHCJ 336;
Barclays Bank of Nigeria Ltd. v. Nwizugbo (1980) 4-6 CCRCJ 75; Ogbe v. NNPC (1986) 4-6 CCHCJ 93.
The decision to place or enter a case on the undefended list or to remove same and place it in the ordinary or general cause list, and hear it on merits by ordering parties to file their respective pleadings is within the discretion of the trial Judge before whom the suit is filed. This discretion is conferred on the trial court by the rules of court governing the undefended list procedure. It is however, the duty of the trial court in the exercise of the discretion on whether to hear the case as an undefended one or to transfer it to the general cause list to maintain an even balance in the consideration of the affidavits filed by the parties respectively in order to arrive at a just decision. Kabiru v. Ibrahim (2004) 2 NWLR (Pt. 857) 326; Eastern Plastics Ltd. v. Syncho (W/A.) Ltd. (1999) 1 NWLR (Pt.587) 456; Brifina Ltd. v. Intercontinental Bank Ltd. (supra).
I shall now consider issue one – which is whether the learned trial Judge was not in error in holding that the defendant company did not disclose a triable issue in its notice of intention to defend. The decision whether the plaintiff’s action is appropriate for a summary trial or otherwise is entirely within the discretion of the trial court which must strictly scrutinize the plaintiff’s claim brought before it under the undefended list and the affidavit of the defendant in the notice of intention to defend the suit. This is a condition precedent to the validity of any trial conducted under the undefended list. What is required is for the trial court to reach a definite decision on whether or not the defence put forward by the defendant has raised a triable issue – Eastern Plastic Ltd. v. Synco (W.A.) Ltd. (supra); Nishizawa Ltd. v. Jethwani (1984) 12 SC 234; Jipreze v. Okonkwo (1987) 3 NWLR (Pt.62) 737. In this appeal, the appellant filed notice of intention to defend with affidavit in support of motion. Preceding this, the plaintiff/respondent filed an action placed on the undefended list with particulars of claim and affidavit in support of the particulars. The respondent made out a case on the undefended list as follows:-
(a) For the recovery of a debt of N21,076,931.87 (Twenty-one million, Seventy-Six Thousand, Nine Hundred and Thirty One Naira, Eighty-seven Kobo), which arose out of an overdraft facility and an import loan facility granted to the appellant by the respondent.
(b) The respondent claimed interest at the rate of 21% per annum from the 1/11/98.
Documents attached as exhibits C and C1 were the statements of accounts showing the balances in the appellant’s accounts, four letters of demand to the appellant as exhs. D, D1, D2 and D3, and exh. E, where the appellant acknowledged the debt and accepted liability to liquidate same. In the affidavit in support of his intention to defend, the appellant complained as follows:-
Paragraph 4-
‘That there is no way on earth how a total loan and over draft of N7 million for which the draw-down commenced on 1/9/97 could shoot up to N21,076,931.87 million Naira by the 31/10/98, a period of only 14 months on the interest rate of 21 % per annum, as agreed between the parties.”
Paragraph 7 –
“That the two facilities are separate transactions which are governed by different terms and conditions”
Paragraph 8 –
“That the plaintiff’s bank has wrongfully lumped both facilities together and charged both transactions as if both transactions are loans without averting its mind to the fact that interest is paid on an overdraft facility only when the money is drawn from the facility”.
Paragraph 16-
“That in receipt of exh. B – the defendant’s company instantly petitioned the plaintiff about the wrongful lumping of both facilities, the undue wrong and arbitrary charges on the account vide exhs. C – C2.”
In short, the appellant complained about arbitrary charges of interest rates on his account whereupon the facility of N7 million rose to a sum of N21,076,931.87 within a period of 14 months at 21% interest rate.
What the learned trial Judge was expected to decide is whether or not, the foregoing defence put forward by the defendant has raised a triable issue. The chance of success of the said defence or its merit is immaterial. It does not even matter whether the defence is shallow provided a triable issue is raised in the notice to defend – Kabiru v. Ibrahim (2004) 2 NWLR (Pt.857) 326; Eastern Plastics Ltd. v. Synhco (WA.) Ltd. (supra); Jipreze v. Okonkwo (supra); Egbe v. Adefarasin (1985) 1 NWLR (Pt.3) 549; Ndukwe v. Domsey International Sales Corporation (1991) 7 NWLR (Pt.206) 680; Macaulay v. NAL Merchant Bank Ltd. (1990) 4 NWLR (Pt.144) 283.
The complaint of the appellant was against the arbitrary charges of interest on his account, and unauthorized debits. The learned trial Judge appeared to have agreed with the appellant, but expected the company to file an action in court rather than writing letters of protest vide page 36 lines 30-35 of the record of appeal. Obviously, any entries into the appellant’s account for which there was no agreement between the parties makes a case a contentious one rather than a simple case that can be decided under the undefended list procedure. Where interest paid is compound interest which is paid on both the principal sum and the previously accumulated interest, requires calculation of a technical nature sometimes calling for introduction of evidence extrinsic to the verifying affidavit, to show the contentious nature of the claim. Kaduna State Transport Authority v. Ofodile (1999) 10 NWLR (Pt.622) 259; Brifina Ltd. v. Intercontinental Bank Ltd. (2003) 5 NWLR (pt.814) 540.
The nature of the complaint of the appellant cannot be resolved on affidavit evidence, the court must allow the case to go for trial.The question raised by this issue is answered in the affirmative. Issue one is resolved in favour of the appellant.
Issue two is whether the learned trial Judge was not in error, in holding that Order 24 rule 9(1) (2) (3) and (4) High Court Rules, 1988, does not permit counsel on both sides to address the court after filing their papers. The decision that the plaintiff’s claim shall be heard on the undefended list is that of the trial court based on the plaintiff’s claim brought before it, under the undefended list, as well as the affidavit of the defendant filed in support of the notice of intention to defend the suit. Brifina Ltd. v. Intercontinental Bank Ltd. (2003) 5 NWLR (Pt.814) 540; Eastern Plastics Ltd. v. Syncho W.A Ltd. (1999) 1 NWLR (Pt. 587) 456.
The procedure under the Rules of Court, Order 5 rule 14 of the Anambra State High Court Rules, 1988, there can be no judicial assessment of whether the action is one that can properly be placed on the undefended list, until the action comes up for hearing. A trial Judge which has to make a decision on whether to hear a case on the undefended list or transfer it to the general cause list must have to begin with the scrutiny of the plaintiff’s claim and be satisfied that the action is non-contentious and one that should be placed on the undefended list. Upon service of the writ on the defendant, he will file notice of intention to defend, such shall be filed at the Registry of Court not less than 5 days before the date fixed for hearing and the court will hear the parties on that day. On that day, if the court after hearing the parties is satisfied that the notice and grounds disclose a defence on the merit, it would transfer the matter to the ordinary or general cause list. What the court is expected to do is to decide whether the defence put forward by the defendant has disclosed a triable issue.
Where there is a conflict in the respective affidavits filed by the parties there should be a full trial to resolve the issue. The issue to be determined on which there is a conflict can only be determined by the evidence of the parties themselves rather than by the opinion of the court. The trial court should not begin to fish through conflicting affidavits in order to hear a matter as undefended list, or allow the defendant to frustrate the plaintiff through delaying tactics. The court should allow parties to be heard when there is conflicting affidavit evidence. Kabiru v. Ibrahim (2004) 2 NWLR (Pt.857) 326; Isyaku v. Master (2003) 5 NWLR (Pt.814) 443; Akinduro v. Iwakun (1994) 3 NWLR (Pt.330) 106. Order 24 rules 9(2) and (4) Anambra State High Court Rules.
Issue No.2 is resolved in favour of the appellant.
Issues No.3 and 4 were argued together. Where a trial court failed to consider the grounds disclosed in the affidavit in support of a defendant’s notice of intention to defend, the defendant would have been denied his right to fair hearing or fair trial, and Court of Appeal will be justified in interfering with the judgment of the trial court given in such circumstance, having offended against the provisions of Section 36(1) and (3) of the Constitution of the Federal Republic of Nigeria. Also, that the judgment is against the weight of evidence, the ordinary rules of Evidence is applicable as in ordinary civil proceedings. The facts revealed in the affidavit evidence adduced by both parties. Onus of proof is on the plaintiff to establish a prima facie case before the defendant can be called upon to defend the case. The complaint of the appellant was against the mode of running his account by the bank, as regards the two facilities granted to him. This resulted into the galloping amount in his account within a period of fourteen months.
In the overall evidence, a discrepancy between the amount claimed and the figure that can be ascertained from the verifying affidavit raises a contentious issue that can be resolved only by being tried. Where the actual indebtedness cannot be ascertained from the evidence available without a resort to other extrinsic accounting source that would operate as a defence which is good enough to justify the transfer of the action to the general cause list to enable it to be tried on the merits. The statement of account reflecting the entire period covered by the facilities is not before the court as at the time the learned Judge delivered its ruling in the case based on the undefended suit. In my view, the learned trial Judge failed to examine the primary issue, of whether the action can be placed on undefended list properly. He should have called for trial on the conflicting affidavit evidence. The appeal is allowed, ruling and order of the lower court is reversed. The suit is to be set down for trial under the general cause list. N10,000 costs awarded in favour of the appellant.
Other Citations: (2005)LCN/1719(CA)
