Bendel Insurance Company Plc V. B.c.m. Finance & Securities (Nigeria) Ltd (1997)

LawGlobal-Hub Lead Judgment Report

MOHAMMED, J.C.A. 

The respondent in this appeal as the plaintiff took out a writ of summons and claimed against three defendants jointly and severally including the appellant in the Kaduna State High Court the following reliefs:

1. “(a) Money which became due and payable on or about 1-9-91 by the 1st, 2nd and 3rd defendants jointly and severally to the plaintiff being money N550,000.00 lent by the plaintiff to the 1st defendant on or about 13-6-91 and interest there on secured by the credit Bond No NBCB 12469 of 6-6-91 executed by 2nd defendant as surety, obligor or guarantor of the Loan in favour of the plaintiff N720,000.00k.

(b) Default interest at 5% of the principal sum (N550,000.00) per week (i.e. N27,000.00 per week) from 11-9-91 to 5-11-91… N220,000.00.

2. Default interest at 5% of the principal sum (N550,000.00) per week (i.e. N27,000.00 per week) from 6-11-91 until the date of judgment.
3. Interest at the rate of 10% of the judgment sum per annum from the date of judgment “until the final and full payment of the judgment sum.”

The other defendants in the action at the lower court along with the appellant are Allied Holdings (Nigeria) Ltd as 1st defendant and Prince Tunde S. Adebo as the 3rd defendant.

Pleadings were duly filed and exchanged between the parties. In reaction to the plaintiff’s statement of claim, the 1st and 3rd defendants filed a joint statement of defence while the 2nd defendant filed a separate statement of defence. The plaintiff also filed a reply to the statement of defence filed by the 2nd defendant. At the conclusion of pleadings, the case went to trial before Yahaya J. of the Kaduna High Court where the plaintiff called only one witness who testified on its behalf in the course of whose evidence 25 documents were tendered and received in evidence in support of the plaintiff’s claims. The 1st and 3rd defendants though filed a joint statement of defence did not call any evidence in their defence but chose to rest their case on the case made out by the plaintiff. The 2nd defendant however called one witness who testified on its behalf and tendered 5 documents which were received in evidence in support of its defence. In the course of the trial, the 2nd defendant attempted to amend its statement of defence but the application was refused by the learned trial Judge.

At the end of the trial, the learned trial Judge after reviewing the oral and documentary evidence before him in a well considered judgment delivered on 29-4-1994 granted all the plaintiff’s claim against all the 3 defendants in 3 separate findings of distinct liability against each of the defendants. The 1st defendant which virtually did not contest the plaintiff’s claims against it was found liable to the plaintiff on the evidence led by the plaintiff. The 3rd defendant who sought to escape liability by putting up a defence that he was not personally liable to the plaintiff for the repayment of the loan granted to his company the 1st defendant, was also found liable to the plaintiff for having personally signed and received the loan on behalf of the 1st defendant by the application of the provisions of section 290 of the Companies and Allied Matters Act, 1990. The 2nd defendant which strongly contested the plaintiff’s claims on the main ground that it did not issue the bond which guaranteed the loan granted to the 1st defendant was also found liable to the plaintiff having regard to the evidence before the learned trial Judge. Part of the judgment against the 2nd defendant at pages 97-98 of the record of trial court reads –

“In view of the above therefore, I hold that the 2nd defendant is liable to the plaintiff as per the agreement in Exhibit 20 which also recognizes the issue of interest and charges on the principal sum. I therefore enter judgment for the plaintiff against the 2nd defendant also in the like term as follows:-

(a) The sum of N720,000 being principal and interest.

(b) The sum of N220,000.00 being default interest at 5% per week (N27,000.00 per week) from the 11-9-91 to the 5-11-91

(c) Default interest at 5% of the principal sum, per week (27,000.00 per week) from the 6-11-91 until today the 29-4-94 being the judgment date.

(d) 10% interest per annum of the judgment sum from the 30-44-94 until the whole judgment sum is totally liquidated.”

It is apparent that the 1st and 3rd defendants against whom judgment was also entered for the plaintiff have no complaint against the judgment. However, the 2nd defendant was not happy with the decision of the trial court and had decided to appeal not only against the judgment of 29-4-1994 but also against the refusal of the learned trial judge to grant its application to amend its statement of defence in the ruling of the lower court of 22-4-1993. This appeal therefore is essentially between the 2nd defendant which is the appellant and the plaintiff now the respondent. The appellant’s Notice of Appeal dated 17-5-94 contains two original grounds of appeal while the 3rd additional ground of appeal was filed by the appellant with the leave of this court. The 3 grounds of appeal without the particular are as follows:-

“1. The judgment is unreasonable, unwarranted, and cannot be supported having regard to the weight of the evidence adduced.

2. The learned trial Judge erred in law, in refusing the appellant, leave to amend the pleading statement of defence in this suit.
3. That the learned trial Judge erred in law in awarding 5% interest per week on a principal sum of N550,000 from 13/6/91 – 10/9/91.”

Briefs of argument were fully filed and served in accordance with the rules of this court. The appellant’s brief of argument initially contains 5 issues for determination distilled from the 3 grounds of appeal. However at the hearing of the appeal on 28-10-1996, the learned counsel to the appellant was forced to abandon the 5th issue for determination which was not linked to any of the 3 grounds of appeal. The 5th issue was accordingly struck out. The remaining 4 issues identified in the appellant’s brief of argument are:

1. Whether the lower court judgment can be supported in law having regard to the evidence adduced and the totality of the circumstances of this case.
2. Whether there was enough evidence setting forth the grounds upon which the respondent’s claim of 5% interest a week on the principal sum of N550.000 from 13-6-91 to 10-9-91 and thereafter 5% default interest per week on the same principal till the date of judgment could be sustained.
3. Whether the lower court was right in law to refuse the appellant’s amendment to its pleadings in the circumstances it did.
4. As a consequence of 3 above, what is the effect of such refusal to amend pleadings where substantial miscarriage of justice is occasioned.

In the respondent’s brief of argument on the other hand the following 3 issues were identified.

1. Whether the judgment of the lower court is perverse having regard to the weight of the evidence adduced before it.
2. Whether the learned trial Judge acted judiciously and judicially in refusing the amendment of appellant’s pleadings and whether the said refusal occasioned a denial of fair hearing and miscarriage of justice.
3. Whether the appellant can set up a case different from their pleadings in the trial court or put in another way what was the case between the parties at the lower court.

At the hearing of this appeal, the learned counsel to the appellant in his oral argument, related appellant’s issue No.4 to ground 2 of the original grounds of appeal. However, there is no complaint in ground 2 that the conduct of the trial judge in refusing the appellant’s application to amend its pleading occasioned a miscarriage of justice. Therefore since none of the remaining 2 grounds of appeal filed by the appellant complained against any miscarriage of justice in the conduct of the trial at the lower court, issue No 4 as identified in the appellant’s brief of argument has no ground of appeal to support it. It is trite law that an appeal court will refuse to consider and pronounce on any issue formulated for determination which does not arise from the grounds of appeal filed. See Aja v. Okoro (1991) 7 NWLR (Pt.203) 260. The 4th issue for determination in the appellant’s brief of argument not having arisen from any of the grounds of appeal filed is accordingly struck out. I shall therefore proceed to determine this appeal on the 3 remaining issues for determination in the appellant’s brief.

However, before proceeding with the resolution of the issues for determination it is relevant to state although briefly the facts of the case constituting the nature of the dispute between the parties at the lower court. The respondent as a Finance Company based in Kaduna was approached by Allied Holding (Nigeria) Limited also a company based in Kaduna and owned by one Prince Tunde Adebo for the provision of short term loan facility with which to execute a contract awarded to Allied holdings by the Kano State Ministry of Education. Allied Holdings and its owner Prince Tunde Adebo were the 1st and 3rd defendants respectively at the lower court. As a security for the loan, Bendel Insurance Company the appellant in this appeal executed a credit guarantee Bond Policy No. NBCB 12469 by which the appellant bound itself to pay to the respondent the sum of N760,000.00 and all interests and other charges arising from or chargeable upon the short term loan, facility sought by Allied Holdings from the respondent in the event of Allied Holdings the beneficiary of the loan facility failing to repay the loan and the interests and charges thereon as and when due. The loan facility was accordingly granted to Allied Holdings by the respondent upon the appellant guaranteeing the payment of the same in case there was default of payment. Therefore when the loan and interests thereon became due and the respondent demanded for payment and both the beneficiary of the loan and the guarantor failed to pay, the respondent went to the Kaduna State High Court and instituted this action in order to secure the repayment of the loan. It is the judgment of the trial court in that action that is now on appeal.

The first issue for determination is whether the judgment of the lower court can be supported in law having regard to the evidence adduced at the trial by the plaintiff. The appellant’s issue No.2 which also deals with proof of the plaintiff’s case at the lower court is clearly covered by this issue No.1. The very fact that the two issues could not be separated even by the appellant’s counsel who had to argue them together shows that issue No.2 without being raised separately can be conveniently argued within issue No 1. It was argued for the appellant on this issue that the decision of the lower court had failed to fully consider and appreciate the evidence led particularly on the claim for interest. Learned counsel to the appellant pointed out that the incidence and liability of the appellant on the issue of interest has not been satisfactorily proved on the balance of probabilities. That the evidence adduced at pages 53 and 55 of the record did not prove the claim of the respondent on interest as only the sum of N522,500.00 of the principal sum of N550,000.00 was actually released to the beneficiary of the loan and on different dates between 13-6-91 and 16-8-91. Learned counsel concluded by submitting that since there was no evidence to show the various interest calculations on the various instalments within the various payment intervals, the award of the lower court on interest must be set aside. The case of Himma Merchants Ltd. v. Alhaji Inuwa Aliyu (1994) 6 SCNJ (Pt.1) 87 at 94-95; (1994) 5 NWLR (Pt.347) 667 was cited and relied upon.

For the respondent, it was submitted that the issue of default interest rate was not in dispute between the appellant and the respondent at the trial court. That since parties are bound by their pleadings, learned counsel to the respondent urged this court to hold that the appellant is not competent or is estopped from raising an issue of fact outside his pleading by way of a ground of appeal. This is because, according to the learned counsel to the respondent, that issue of N550,000.00 was an issue between the respondent and 1st and 3rd defendants who admitted the issue in their pleadings thereby relieving the respondent the burden of proving it by virtue of section 74 of the Evidence Act. Counsel further observed that it is not true that only N522,500.00 of the loan granted was actually disbursed as the 1st and 3rd defendants who received the loan were specifically informed that the sum of N27,500.00 of the loan was retained by the respondent as commitment fee, that the time the default charge started to run being 10-9-91 was not at all in dispute as it was specifically agreed as part of the terms of the loan granted by the respondent. Referring to the case of Udemah v. Nigeria Coal Corporation (1991) 3 NWLR (Pt. 180) 477 at 490, learned counsel urged this court to hold that the issue of interest on the loan had indeed been proved.

The issue of whether the judgment of the lower court can be supported in law having regard to the evidence adduced at the trial by the plaintiff arose primarily from the omnibus ground of appeal. Although the issue also related to the additional ground of appeal complaining on the assessment of evidence on the issue of interest. However, the arguments of the appellant in its brief of argument on this issue argued as issues (a) and (b) together by the appellant’s counsel, did not advance any argument on why the judgment of the lower court could not be supported having regard to the evidence apart from the aspect of the judgment on the award of default interest of 5% of the principal sum. This of course means that the appellant is not complaining against the finding and judgment of the lower court that the appellant was liable to the respondent on the amount of the loan due from the 1st and 3rd defendants as the result of the Bond No. NBCB 12469 executed by he appellant guaranteeing the short term loan. Indeed there is overwhelming evidence on record in support of the judgment of the lower court in that respect. Inspite of the denial of the appellant that it did not issue the bond in dispute no. NBCB 12469 and of even having any previous dealings with the respondent, the oral and documentary evidence before the learned trial Judge proved conclusively that not only did the appellant in fact had previous dealings with the respondent, but that the appellant also issued bond No. NBCB 12469 guaranteeing the loan granted to the 1st and 3rd defendants which the 1st and 3rd defendants failed to repay on demand after 90 days in accordance with the terms of the agreement.

The only question for determination now is whether the judgment of the lower court in relation to the default interest of 5% per week on the principal sum of N550,000.00 as claimed by the respondent is supportable in law having regard to the ,evidence adduced by the plaintiff now respondent. It is quite clear from the arguments advanced by the appellant on this issue that the arguments were merely confined to the oral evidence of the only witness called by the plaintiff/respondent at the lower court. The learned counsel to the appellant failed to realise that apart from the oral evidence, quite a number of documents as many as 25 were also tendered and received in evidence in support of the plaintiff’s claim including the Credit Guarantee Bond No. NBCB 12469 of 6-6-1991 Exhibit 20 by which the appellant guaranteed the payment of the sum of N760,000.00 to the respondent. It is also quite clear from the respondent’s letter of 16-8-1991 to the 1st defendant beneficiary of the loan that although only the sum of N522,500.00 was actually disbursed to the 1st defendant, the balance of N27,500.00 was being retained by the respondent as a commitment fee and this term was duly accepted by the 1st defendant. Part of the terms of the short term loan also accepted by the 1st defendant was the fact that the principal sum granted and the accrued interest thereon due was payable within 90 days from 13-6-1991 and that if the amount due was not paid within that period it would attract a default interest at the rate of 5% per week on the principal sum. These terms which were duly accepted by the 1st defendant are clearly contained in the respondent’s letters of 13-6-1991 and 16-8-1991 respectively which were in evidence as Exhibits 9 and 14 respectively. In fact the appellant, as the guarantor of the loan was duly notified by the respondent by its letter exhibit 15 that the 5% default interest was to start running with effect from 11-9-1991. There was therefore ample evidence before the learned trial Judge to support his judgment on the award of interest as claimed by the respondent. In any case this, issue on interest was not even raised by the appellant or the beneficiary of the loan at the trial court.

Therefore from the totality of the evidence adduced at the lower court and the findings of the learned trial Judge thereon, it cannot be said for whatever reason and under any guise that he did not weigh the evidence adduced by the respondent and the appellant before he arrived at the conclusion he did. It is pre-eminently the duty of the trial court or tribunal to see, hear and assess each witness as to whether he should be believed or not, and where the trial court has discharged that responsibility, the Court of Appeal will not interfere with such findings of the trial court unless they are shown to be perverse or unsupported by evidence. See Ogbechie v. Onochie (1988) 1 NWLR (Pt.70) 370; Omoregbe v. Edo (1971) 1 All NLR 282; Kalio v. Woluchem (1985) 1 NWLR (Pt.4) 610; Mogaji v. Odofin (1978) 4 S.C. 91; Obiaso v. Okoye (1989) 5 NWLR (Pt.119) 80 and Oro v. Falaade (1995) 5 NWLR (Pt.396) 385 at 416. In the instant case, I am of the firm view that since the findings of the learned trial Judge are neither perverse nor unsupported by evidence and that the learned trial Judge having fully considered, reviewed and evaluated the evidence adduced before arriving at his decision, there is no reason whatsoever to disturb that judgment.

The remaining issue for determination is whether the lower court was right in law to refuse the appellant’s amendment to its pleadings in the circumstances it did. Learned counsel to the appellant agreed that it was within the discretion of the learned trial Judge to grant or refuse the appellant’s application for amendment of its pleading but submitted that the law required the learned trial Judge to exercise such discretion judicially and judiciously. The cases of Ntukidem & Ors. v. Oko & Ors (1986) 12 S.C. 126; (1986) 5 NWLR (Pt.43) 909 and Ojah & Ors. v. Ogboni & Ors. (1976) 4 S.C. 69 were cited and relied upon by the appellant’s counsel who contended that in the present case the learned trial Judge did not exercise his discretion judicially and judiciously when he refused to grant the appellant’s application. That since order 25 rule 2 of the Kaduna State High Court (Civil Procedure) Rules 1987 allowed the appellant to amend its pleadings at any stage of the proceedings, the learned trial Judge was in error when he refused the appellant’s application simply because it was not notified in time having regard to the decision of the Supreme Court in Ojah v. Ogboni (supra), concluded the learned counsel who urged this court to allow the appeal on this issue and order a retrial.

For the respondent however, it was argued that the affidavit of the appellant in support of its application did not give any cogent and convincing reason to persuade the learned trial Judge to grant it. That as indicated in the ruling of the trial Judge, he refused to grant the application because there was no sufficient materials to support its grant. That the refusal to grant the application therefore contended the learned counsel to the respondent, was a proper exercise of the discretion of the learned trial Judge which this court is urged not to interfere with having regard to the principles of law laid down in a number of cases including Adejumo v. Ayantegbe (1989) 3 NWLR (Pt.110) 417 and Kotoye v. Central Bank of Nigeria (1989) 1 NWLR (Pt.98) 419.

There is no doubt whatsoever that order 25 rule 2 of the Kaduna State High Court (Civil Procedure) Rules 1987 allows the appellant as one of the defendants at the trial court to amend its statement of defence at any stage of the proceedings provided such amendment is necessary for the purpose of determining the real question in controversy between the parties. In other words, in order to obviate ambiguity or to aver some facts, a party may amend his pleadings under this rule at any stage of the proceedings before the end of hearing or judgment and some times even on appeal. Oguma v. International Bank for West Africa (1986) 2 NWLR (Pt.20) 124; Salami v. Oke (1987) 4 NWLR (Pt.63) II and Union Bank of Nigeria v. Ogboh (1995) 2 NWLR (Pt.380) 647. However, the decision to grant or refuse such application for amendment is a matter at the discretion of the court which must be exercised judicially and judiciously. In this regard several authorities including University of Lagos v. Aigoro (1985) 1 S.C. 265 also reported as (1985) 1 NWLR (Pt.1) 143 and Adejumo v. Ayantegbe (1989) 3 NWLR (Pt.110) 417, have long settled the guiding principles.

In the present case it is indeed not correct as argued by the appellant in its brief of argument that its application for amendment was refused by the lower court mainly for the reason that it was not filed in time and that no reason was given for the delay. While it is true that one of the reasons given by the lower court for refusing the application was the absence of any reason for the delay in filing it to enable the learned trial Judge decide on the exercise of his discretion which must be based on reasons, it is quite clear from the ruling of the lower court that the application was refused mainly for the failure of the applicant to state the nature of the amendment sought in the body of its motion paper or the affidavit in support of the application. The relevant part of the ruling of the learned trial Judge in this respect at pages 67-68 of the record reads:-

“I cannot act arbitrarily especially as the plaintiff has opposed the application. Also the nature of the amendment has not been set out either in the body of the motion paper or in the affidavit, for this court to have a concise and clear idea as to the amendment sought, so that it can determine, whether the defendant had altered in toto (sic) his defence. It is not readily discernible, to ascertain the nature of the amendment from the proposed amended statement of defence. Infact the name of the 3rd defendant is not on Ex. A and paragraph 6 thereof has been mutilated with red biro, thus, giving me a definite impression, that the applicant was not ready and did not bother to do all that (sic) he was required reasonably to do.”

I have no reason whatsoever to disagree with the learned trial Judge on the above reasons for his refusal to exercise his discretion in favour of the applicant now appellant. It is well settled that where the matter is a question of the exercise of discretion, this court in exercise of its appellate jurisdiction will very rarely, if at all, interfere with the decision of the trial court because this court is not entitled to substitute its own discretion for that of the trial court. In other words this court may only interfere with the exercise of such discretion by a trial court where the appellant succeeds in showing that the discretion was not exercised judicially and judiciously. In the present case, having regard to the affidavit of the appellant in support of its application, the arguments advanced by its learned counsel at the trial court in support of the application and the reasons given by the learned trial judge in refusing the appellant’s application, I cannot say that the appellant had succeeded in establishing before this court that the learned trial Judge did not exercise his discretion judicially and judiciously.

In the result this appeal fails and it is accordingly hereby dismissed. The judgment of the lower court delivered on 29-4-1994 is hereby affirmed. The respondent shall have one Thousand Five Hundred Naira (N1,500.00) costs.

Other Citations: (1997)LCN/0340(CA)