Biocon Agrochemicals (Nigeria) Ltd. & Ors V. Kudu Holding (Pty) Ltd. And Anor (2000)

LAWGLOBAL HUB Lead Judgment Report

EJIWUNMI, J.S.C

The main question raised in this appeal is whether the court below was right to have refused to grant the prayers made to that court by the appellants. For ease of reference, the reliefs sought from the court below be set out hereunder :-

“1 An order granting extension of time within which the applicants and the applicant intervener may apply for leave to appeal against the ruling of Honourable Justice Dolapo Akinsanya delivered in this suit on the 2nd December, 1994.

2. An order granting leave to the applicant and applicants/intervener to appeal against the said ruling in terms of the proposed notice and grounds of appeal attached to this application as “Exhibit RA2″
3. An order enlarging the time within which the applicants and applicants/intervener may appeal against the said ruling.
4. An order staying further proceedings whatsoever and howsoever in this suit at the court of trial pending the hearing and final determination of the appeal herein sought to be entered save power to adjourn the same from time to time in the court of trial unto time until the conclusion of the appeal.
5. Leave to the applicants and applicant/intervener to depart from the rules of court by personally compiling the records of proceedings in the court of trial for the purpose of the appeal herein sought to be entered.
6. An order deeming the records of proceedings already compiled duly certified and filed along with this application as Exhibit RA3 as the proper and sufficient records for the purpose of the appeal”

At the hearing of application before the court below, the learned counsel for the appellants withdrew the first prayer, and it was accordingly struck out. The court below also ordered that prayers 4, 5 and 6 be stood over to await the determination of prayers 2 and 3.

After hearing arguments by learned counsel appearing for the parties, their Lordships of the court below who heard the appeal unanimously refused the said prayers 2 &3 sought for by the applicants. In the course of the lead ruling delivered by Ayoola JCA, as he then was, his Lordship, with regard to the proposed grounds of appeal the appellants, observed thus, and I quote:-

“The grounds of appeal proposed by the defendants and intervener show clearly that they have misunderstood what the claim was about and the nature of payment by letter of credit and rights accruing therefrom. Akinsanya J., had a proper understanding of the issues when she stated thus”

” … whatever right accrues to this applicant (i.e. the intervener) from the plaintiffs, it must await its turn as a separate contract and not be interposed over and above the contract between the plaintiffs and the defendants”.

His Lordship Ayoola, JCA therefore continued thus:

” … it is not necessary to enter into a discourse of the legal points concerning letters of credit which counsel on behalf of the defendants and intervener dwelt on at length in his oral address. It suffices to say that they have no decisive bearing on the question whether or not the intervener has a right to intervene in a claim for unpaid balance of debt. There should be no misconception of the scope of 0.13 & 19 of the High Court of Lagos State (Civil Procedure) Rules, which only permit jointer of persons as defendants, who ought to have been joined or whose presence before the court is necessary to enable the court effectively and completely to adjudicate upon and settle all the questions involved in the cause or matter”.

As the applicants were not satisfied with the ruling of the court below, they have appealed to this court. Pursuant thereto, they filed two grounds of appeal.

Having regard to what I may have to say in this judgment with regard to the complaints made by the respondents in respect of the issues identified for the determination of this appeal in the appellant’s brief, I deem it necessary to set down the appellant’s grounds of appeal. They read thus:-

“1. The learned Justices erred on the facts when they unanimously held. Per Ayoola JCA thus:-

“The plaintiff’s action being for the balance remaining unpaid after payment effected by the letter of credit has been taken into account in favour of the 1st defendant raises only issues concerning the unpaid balance in which the intervener has not claimed any interest” and thus dismissed the application for leave to appeal.

Particulars of error of fact

i) The holding is contrary to facts on the record placed before the court per exhibits C (page 37-38) of the record motion for joinder before the court of trial and attached exhibits PI & P2 at pages (42-47) of the record exhibited before the Court of Appeal.

ii) It was a common ground between the plaintiffs, the defendants and the intervener at the court of trial that plaintiffs are claiming the unpaid balance of letter of credit even though plaintiffs -had assigned it to the intervener/appellants.

iii) The total value of the letter of credit ACB/93/0020/Broad/002 is US$664,500 out of which US $332,250 has been paid leaving 50% US $332,250 unpaid by the defendants.

iv) The unpaid balance is the subject of assignment to the intervener, the recovery of which it is seeking by intervening in this action because plaintiffs also claim the said unpaid balance in addition to other reliefs in this suit.

2. The learned Justices of the Court of Appeal misdirected themselves in law in failing to apply and or correctly apply the relevant principles for granting leave or extension of time to appeal thus dismissing the applicant’s applications for same in its entirety and other reliefs herein contained.

Particulars of Misdirection

i) Grounds B, C, D, E, F and G of the proposed notice of appeal are grounds of error and misdirection in law with sufficient particulars requiring no leave of court under S. 220(i) (b) of the Constitution of the Federal Republic of Nigeria 1979 if ground 1 of this appeal succeeds.

ii) The Court of Appeal resolved the issues raised in the proposed grounds of appeal against the appellants by adopting the contrary opinion of the learned trial Judge sought to be appealed against thus determining the substantive appeal for which leave had not been granted and was therefore not yet before them.

iii) The ruling of the trial Judge sought to be appealed centered on the rights of an assignee of a letter of credit which is a subject that has not been judicially considered by the appellate courts in Nigeria. The intervener/appellant claims to be such an assignee.

iv) The proposed notice appeal dismissed by the appellate court raised relevant, competent, arguable recondite grounds of appeal in view of particulars (i), (ii) and (iii) (supra).

v) The learned Justices of the Court of Appeal in dismissing the entire application only considered the arguments for leave to appeal and ignored all other prayers in their ruling.”

Before the consideration of the issues raised in this appeal, it is my respectful view needful to give some background facts that led to the instant appeal. From the record of proceedings, with particular reference to the pleadings, it is evident that the respondents and the 1st and 2nd appellants entered primarily into an agreement for the sale of Horse Mackerel fish to the said appellants. The 1st respondent being a private limited liability company incorporated under the Laws of Namibia with its registered office at Sanlan Centre, 154 Independence Avenue, Windhoek, Namibia. The 2nd respondent is similarly, a private limited liability company and also incorporated in Namibia. Both of them are fish merchants, and acted together to enter into this agreement with the 1st – 3rd appellants. The 1st appellant is a private limited liability company registration under the Laws of Nigeria, and it carries on its business at KM 17Lagos – Badagry Expressway, Ojo, Lagos. The 2nd appellant is the Chairman and Chief Executive of the 1st appellant company. The 3rd appellant, the African Continental Bank, a duly licensed Bank in Nigeria and carrying on business with its headquarters at Broad Street, Lagos acted as Banker and Guarantor to the 1st and 2nd appellants in the transaction forming the subject-matter of this action. The 1st consignment of 1,5000 metric tones packaged in 20kg and 30kg cartons for the sales price of US $664,500,00. The 2nd consignment of 1,826.02 metric tones was also to be packaged in 20kg cartons for the sales price of US $803,926.86.

With regard to the further agreement reached with regard to the payments for the products, I think it is better to quote paragraphs 10, 11, 12 of the respondent’s pleadings.

“Para. 10: It was agreed that payment for the first consignment of 1,500 metric (sic) amounting in total value to US $664,500 was to be made under a letter of credit for 50% (US $332,250.00) of the total order, while the balance of 50% (US $332,250.00) was to be made under a local bank guarantee from African Continental Bank Plc (the 3rd defendant) for the Naira equivalent amounting to N8,385,957.77 at the time of the transaction.”

“Para. 11: It was also agreed that payment for the 2nd consignment of 1,826.02 metric tonnes would be made by payment of 50% of the value within ten days of the arrival of the Ship in Lagos and the balance of 50% forty-five days after the bill of lading.”

“Para. 12: It was a condition of the sales agreement that payment for the second consignment of the fish were ceded to Kudu Holdings”

Pursuant to these agreements, the 3rd appellant caused to be issued an irrevocable letter of credit N. ACB/93/0020/Broad/002 in favour of the 2nd respondent (Ark Fishing Industries (PTY) Limited) for US $ 332,250 representing 50% invoice value of the 1,500 metric tonnes of fish, and a Bank Guarantee dated 24th March 1993 in favour of Kudu Holdings (PTY) Ltd. for the sum of

N8,385,956.77 being the 50% balance cost of 1,500 metric tonnes ordered. It is part of the case of the respondents that the appellants duly took delivery of the total amount of 3,326.02 metric tonnes of Horse Mackerel packed in 20Kg and 30kg cartons. But it is claimed that the respondents have failed to pay the balance 50% of the 1,5000 metric tonnes despite repeated requests and demands made on them. Similarly, it is alleged that the appellants have not also paid for the second consignment of 1,826.02 metric tonnes of Horse Mackerel that they duly received. The appellants by their pleading denied for the most part, the claims of the respondents against them. And it is further the claim of the appellants per paragraphs 13 and 14 of their pleadings.

“Para. 13: That the respondents lacked the financial capacity or technical facilities to discharge the obligations they had assumed under their contract with the 1st defendant. The plaintiffs were mere commission agents/intermediary who had no direct access to procure or catch fish”.

“Para. 14: Following the above, the plaintiffs in July, 1993 has to approach Messrs. Interatlanctic A.B. (a Swedish fishing Company) who then had a consignment on board M. V. Mathias Thesen already in the West African Coast to assign the same to the 1st defendant.”

The appellants as part of this defence also pleaded losses which they suffered as a result of their transactions with the respondents and for which they laid claims against the respondents. It is also part of their defence, per paragraph 28 of their pleadings which reads:

“The 1st defendant in further answer to paragraphs 16 to 30 of the statement of claim avers that immediately after delivery of the 1st and 2nd consignment which commenced on or about the 3rd of August, 1993 and concluded about 3 weeks thereafter Messrs. Interatlantic approached the 1st defendant to register their interest in the proceed of sale on the 1st consignment. Defendants shall rely on the letter dated 14th July, 1993, issued to Interatlantic by Standard Bank of Namibia on the instructions of plaintiffs assigning proceeds of the letter of credit to Interatlantic.”

It would appear then that the appellants, having regard to their perception of the state of the pleadings, decided to take out a summons for further directions pursuant to Order 26 rule 6 High Court of Lagos State (Civil Procedure) Rules, 1972 and under the inherent jurisdiction of the court. The purpose of this application are as follows:

“1. An order that the applicant/Intervener through its attorney African Continental Bank Plc of 106/108 Broad Street, Lagos he added as a defendant in this action and that the writ of summons and counter-claim in this suit be amended accordingly by adding its name as a defendant.

2. An order in addition to being joined allowing the Applicant/Intervener to file and serve a counterclaim in this suit against the plaintiffs/respondents.
3. An order deeming as properly filed and served along with this application.

As I have previously stated, the learned trial Judge who heard the application refused the prayers and made the following pertinent observation in the course of her ruling. It reads:

“As I have mentioned earlier, Exh. P2 expressly stated where the proceed of the letter of credit assigned to the applicant is to be paid. It is payable outside this country. The plaintiffs have come to Nigeria because the defendants are resident in Nigeria. Parties are bound by their contract. A counter-claim is another suit, the plaintiffs are not consenting to be tried in Nigeria, and the court cannot assume jurisdiction where it does not possess one. It all revolves round the fact that whatever right accrues to the applicant from the plaintiffs, it must await its turn as a separate contract and not be interposed over and above the contract between the plaintiffs and the defendants.”

Thereafter, the learned trial Judge dismissed the applications of the Intervener accordingly. The defence and counter-claim of the applicant/intervener as the 4th defendant dated 20th October, 1994 was also struck out.

Being dissatisfied with that ruling, the appellants then brought the application to the court below which I have referred to earlier in this judgment. That application was refused. It is for this reason that the appellants have further appealed to this court.

Pursuant thereto, the parties have filed and exchanged their briefs of argument; the appellants also filed and served a reply brief. As learned counsel for the respondents was absent, the brief prepared on their behalf was deemed to have been duly argued. See order 6 Rule 6 of the Supreme Court Rules 1985.

The appellants in their brief raised the following issues for the determination of the appeal:

(i) Whether the unpaid balance of US $332,250 under letter of credit No. ACB/93/0020/Broad/002 sought to be claimed by the 4th appellant/Intervener in this suit is also being claimed by the respondents.

(ii) Whether the Court of Appeal rightly refused appellant’s prayer for leave to appeal and extension of time to appeal in respect of ANY of ALL of the proposed grounds of appeal in Exhibit “RA2”.

(iii) Whether the order dismissing prayers which had not been argued in an application before the Court of Appeal is a nullity.

(iv) If issue No. (iii) is answered “yes” – whether the Supreme Court should grant those prayers in this appeal”

In the brief filed on behalf of the respondents by their learned counsel A. Simon-Hart, Esq., took the view that the 1st and 2nd issues formulated in appellants’ brief were not properly formulated. He therefore formulated the following as the proper issues for the determination of the appeal. They read:

First Issue

1. Whether the learned Justices of the Court of Appeal erred in fact in finding that the intervener had not claimed any interest in the unpaid balance claimed by the plaintiffs in the action after payment effected by the letter of credit has been taken into account, and whether the said finding constituted the ratio decidendi upon which the appeal court dismissed the appellants application for leave to appeal.

Second Issue

2. Whether the appellants had in their proposed grounds of appeal (at pages 53 – 57 of the record) and in their arguments canvassed in support of their application for leave to appeal, disclosed a prima facie cause why the appeal should be heard.”

While this effort is commenced in that regard, this appeal will, nevertheless, be considered in accordance with the issues raised in the appellant’s brief.

On issues (iii) & (iv), it is however contended for the respondents that these issue are incompetent in that they do not arise from nor do they relate to any of the grounds of appeal filed by the appellants. In support of that contention, he cited the case of Ogoyi v. Umagba & anor. (1995) 9 NWLR (Pt.419) 283. In the reply brief filed on behalf of the appellants, their learned counsel contended that this court has approved issue formulated upon both the grounds of appeal and the relief sought in the appeal. For the proposition, reference was made to Globe Fishing Industries v. Coker (1990) 7 NWLR (Pt.162) 265 at 282. Before going any further, I must immediately state that I have read and re-read the passage of that judgment and I cannot find how learned counsel could have sought to prop up his argument for the sustenance of the 3rd and 4th issues on that authority. This is because what Karibi- Whyte JSC, said in that passage of his judgment, at page 282 reads thus:

“Here again, this court is faced with the formulation of issues which are not in the least relevant to the determination of the appeal before it. This court has on numerous occasions, advised counsel to formulate the issues for determination within the parameters of the grounds of appeal filed and the judgment appeal against.”

If there be any need for further authority, the settled view of this court is that issues for the determination of an appeal must be formulated upon the grounds of appeal filed against the judgment on appeal, may I refer to the following cases:- A.-G., Bendel State v.Aideyan (1989) 4 NWLR (Pt.118) 646; Buraimoh v. Bamgbose (1989) 3 NWLR (Pt.109) 352; Nzekwu v. Nzekwu (1989) 2 NWLR (Pt.104)373; Oniah v. Onyia (1989) 1 NWLR (Pt.99) 514″.

In all these cases and others not mentioned here, it is manifest from their careful study that for an issue for the determination of an appeal to be sustained, it must satisfy two conditions. These are:-

1. It must be formulated within the parameters of a ground, and
2. The ground of appeal must be against the judgment of the court against which the appeal is lodged. These two conditions must be satisfied otherwise, the issue would be struck out as incompetent. With the above principles in mind, I now turn to the instant appeal where the complaint is that the 3rd and 4th issues identified by the appellant as part of the issue for the determination are incompetent. As I have earlier on in this judgment set down the appellant’s grounds of appeal and all the issues identified for appeal by the appellants. After a careful study of the two grounds of appeal filed pursuant to the appeal, I am clear of the view that issues (iii) and (iv) are incompetent for they do not comply with the conditions identified above for the sustenance of issues for the determination of an appeal. The two issues, namely issues (iii) and (iv) as identified by the appellants in their brief of argument, are hereby struck out.

Having disposed of issues (iii) and (iv) as above, issues (i) and (ii) will now be considered. The appellants in respect of issue (i) are asking whether the unpaid balance of US $332,250 under letter of credit No. ACB/93/0020/BROAD/002 sought to be claimed by the 4th appellant/intervener in this suit is also being claimed by the respondents. Learned counsel for the appellants then contended that the court below was not right when it held that:-

“the plaintiff’s action being for the balance remaining unpaid after payment effected by the letter of credit has been taken into account in favour of the first defendant raises only issues concerning the unpaid balance in which the intervener had not claimed any interest.”

Learned counsel for the appellant then proceeded to submit at page 14 of the appellant’s brief of argument to state in paragraph 5.05 thereafter that:

“What the 4th appellant/intervener seeks to claim in this action by way of counter-c1aim 4th appellant/intervener seeks to join as a co-defendant in this action to enable her claim for herself the sum of US $332,250.00 claimed by respondents as a special damage in their statement of claim reproduced above.”

Beyond the reference to the 4th appellant as an intervener and who is seeking to be joined as defendant “in the substantive action,” I cannot for my part see the justification for the view of the appellants’ counsel that the court below was wrong in its understanding of the facts disclosed by the pleadings. Be that as it may, it is my respectful view that the learned counsel for the appellants would appear to have been unmindful of the fact that we are here concerned with an interlocutory action. With that in mind, this court cannot be invited to make pronouncements about this issue that will prejudice the trial that is still pending. It is therefore my view that issue (i) cannot be determined at this stage. See Globe Fishing v. Coker (Supra).

With regard to issue (ii), it is manifest that the appellants are there challenging the exercise of the discretionary powers of the court below. By the exercise of that power the court below had refused the appellants’ prayers for leave to appeal and extension of time to appeal to that court. It would appear from the argument advanced in the appellant’s brief that the premises upon which the appeal is predicated one two fold. The first premise being whether the Intervener, who is regarded as the 4th appellant, is entitle to obtain leave to appeal as an interested party. The second premise is whether all the other appellants have not made out a case to entitle them for leave and extension of time to appeal. For the first premise the contention for the appellant/intervener, is that by virtue of the provisions of section 220(i)(b) of the Constitution of the Federal Republic of Nigeria, 1979, the intervener required no leave to appeal where the ground of appeal involves a question of law. He thereafter repeated in his brief the elaborate grounds of appeal upon which he proposed to found his appeal. In a nutshell, therefore, it is the submission of learned counsel for the appellants that the intervener ought to have been granted his prayer by the court below. In support of his submission, reference was made to:- Adeyemi v. Y,R.S. Ike Oluwa & Sons Ltd. (1993) 8 NWLR (Pt.309) 27. And arguing in the alternative, he urged that if the grounds of appeal were not ground of law, and leave was required, the appellant/intervener had fulfilled the conditions required by Order 3 rule 4(1) and (2) of the Court of Appeal Rules, 1981, (as amended) and S.221(1) of 1979 Constitution, to be granted leave to appeal against the decision of the High Court. He cited the case of Obikoya v. Wema Bank Ltd. (1989) 1 NWLR (Pt.96) 157 at 178 in support of his argument. He also referred to section 222( a) of the Constitution of the Federal Republic of Nigeria, 1979, and Kalu v. Odili (1992) 5 NWLR (Pt.240) 130 at 194.

He therefore has argued that as the court below fell into palpable error in refusing the prayers of the appellant/intervener, this court is urged to reverse the decision of the court below. Similarly, the learned counsel for the appellants also argued that the decision of the court below as it affected the other appellants should also be reversed.

For the respondent, their learned counsel, Simon-Hart, Esq., has argued in the respondents’ brief, that there is no merit in the appeal and that it should be dismissed.

Now, in the determination of this appeal it must be remembered that this court is being invited to overturn the exercise of the discretionary power that is unquestionable vested in the court below. In order therefore to overturn such decisions of the court, it is now settled law that an appellate court will not generally interfere with the exercise of discretion by a lower court unless it is shown that there has been a wrongful exercise of the discretion. Where the lower court acted under misconception of law or under a misapprehension of fact in that it either gave weight to irrelevant or unproved matter or it omitted to take into account matters that are relevant or where it exercised or failed to exercise the discretion on wrong or inadequate materials and in all other cases where it is in the interest of justice to interfere. See Enekebev. Enekebe(1964) 1All NLR 102 and Saffiedine v. C.O.P (1965) 1 All NLR 54; Demuren v.Asuni (1977) 3 SC 91; Ntukidem v. Oko (1986) 5 NWLR (Pt.45) 909; Oyeyemi v. lrewole Local Govt. (1993) 1 NWLR (Pt.270) 462; Odusote v. Odusote (1971) 1 All NLR 219; University of Lagos v. Aigoro (1985) 1NWLR (Pt.1) 143; C.C.B. (Nig.) Ltd. v. Ogwuru (1993) 3NWLR (Pt.284) 630.

After a careful consideration of the argument of learned counsel for the appellants, it is my humble view that he has not advanced any cogent reasons to lead me to overturn the ruling of the court below. The appeal is therefore dismissed with costs to the respondents in the sum of N10,000.00.

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SC.110/95