Faith Enterprises Ltd. V. B.A.S.F Nigeria Limited (2010)

LAWGLOBAL HUB Lead Judgment Report

S. MUNTAKA-COOMASSIE, JSC.

The Respondent herein which was the plaintiff at the trial court claimed against the Appellant, the defendant at the High Court Lagos State in its amended statement of claim as follows:

“Whereof the plaintiff claims against the defendant the said sum of Dm 140,000.00 or its Naira equivalent based on the prevailing rate of exchange of the day the judgment as price of goods sold and delivered to the defendant, been N11,668.41 already paid with interest thereon at the rate of 10% from the 15th of May, 1979 to the date of judgment and thereafter of 5% until the whole debt is liquidated”.

The Appellants filed its statement of defence after the closure of pleadings, the Respondent filed an application dated 15/9/1992, wherein it prayed the trial court for the following:-

“AN ORDER to enter judgment for the Plaintiff/Applicant as per the further amended writ of summons and statement of claim upon admission by the Defendant/Respondent”.

The application was based on Exhibit B, wherein the defendant was alleged to have admitted the claim of the Respondent. The Appellant filed a counter-Affidavit dated 23/8/92 and in paragraphs 7, it was averred as follows:

“7. That the purported admission by the defendant company was made in fraud of the defendant company and the defendant has consistently stated this in the statement of defence.”

Both parties were heard on the application by the trial Judge. On the 3/3/95, the trial Judge Segun J delivered his ruling and granted the Respondents application. On page 166 of the Record he held:-

“As at 3rd August, 1979 the defendant/respondent mandated Mr. Lachmandas to operate its accounts at the Union Bank of Nigeria Ilupeju Branch, Lagos. They now make allegation of fraud against Lachmandas who was the alter ego of the defendant/company. The acts of Lachmandas were therefore not of the agent of the company but that of the company itself. (Sections 65 and 70 company and Allied Matters Act). Unless the defendants (sic) can show that the plaintiffs (sic) colluded with the Managing Director and General Manager of the Defendant Company, against whom allegations of fraud were made, the defendants albeit, without particulars to perpetrate a fraud against the defendants would still be liable to pay its debt to the Plaintiff/Applicant……..

It seems to me that the defendants have no defence to this action. It is most in expedient to allow a defendant who has no real defence to the action to defend for mere purpose of delay.

This court would not encourage that.”

The defendant was dissatisfied with this ruling and an appeal was therefore lodged by him before the Court of Appeal Lagos Division, hereinafter called the lower court. After hearing the Appellants appeal, the lower court in its unanimous judgment dismissed the appeal. In the lead judgment of P.A. Aderemi JCA (as he then was), it was held as follows:-

“The attack offered to the assertion of admission is that it was made in fraud of the defendant. That is a general allegation. And it is now well settled, in law that general allegations however strong was (sic) in sufficient to amount to an averment of fraud of which account of law can take notice see:- UHUNMWAANGHO vs. OKOJIE & ORS. (1982) 9 SC 101. It need be said that fraud is a serous crime and in civil matters the particulars must be pleaded and proved strictly. See FABUNMI Vs EGBE (1985) 3 SC. 28. Beyond the bare assertion of fraud the processes filed by the Defendant/Appellant are devoid of any particulars let alone proof of same. The author of Exhibit B-Lachmandas was at the material time, the Managing Director of the defendant/company. In law the state of mind of Lachmandas, his acts are all regarded as those of the defendant/company, a legal fiction that only exists in the eye of the law…” See pp. 233 at p. 234 of the Record of proceedings”.

The Appellant was again dissatisfied with the decision of the court below had appealed to this court on the following grounds – I reproduce them hereunder with their particular for the sake of clarity.

GROUNDS 1:-

The Learned Judges of the Court of Appeal misdirected themselves, on the facts and thereupon arrived at a wrong conclusion in law when they held as follows:-

“……The author of Exhibit “B” Mr. Lachmandas was at the material time the Managing Director of the Defendant Company’.

“….At the close of the pleadings, it seems to me that only inference that can be drawn is that the defendant appellant directing in writing the payment of the debt as averred in the further amended statement of claim is directly admitted or deemed to have been admitted. I answer in the affirmative issue 1 in the respondent’s brief saying that exhibit B is a clear admission of the debt and the Defendant/Appellant had no defence to the suit”.. When the Appellant denied all material averments in the Amended Statement of claims.

PARTICULARS OF MISDIRECTION

1. At the material time Mr. S. E. Idemudia was the Chairman/Managing Director of the Defendant Company.
2. At the material time Mr. Lachmandas was only a middleman between Kewalram private Limited of Singapore and Faith Enterprises Limited the Appellant Company. He was a guarantor to Faith Enterprises Limited. In that capacity he was to guarantee payment by Faith Limited to Kewalram Private Limited of Singapore for the Industrial mechanics and one consignment of raw materials which Mr. Lachmandas ordered for the Appellant Company.
3. The function of Mr. Lachmandas in the Appellant company are clearly elaborated upon in page 161 of the records, Appellant’s further Amended Statement of Defence and Counter-claim dated and filed on 16/2/95.
4. In its further Amended Statement of Defence filed on 16/2/95 the Appellant denied all the material averments in the amended statement of claim.
5. There is no evidence that the Appellant authorized Exhibit “B”, the mandate by the Appellant to Lachmandas was limited to payment for the foods imported by him on behalf of the Appellant from Kewalrams Private Limited of Singapore.

GROUND II

The Learned Appellate Judges of the Court of Appeal erred in law when they held as follows:-

“…I answer issue 1 & 2 in the Appellant’s brief in the affirmative. I answer in the affirmative issue 1 in the Respondent’s brief saying that Exhibit “B” is a clear admission of the debt and the Defendant/Appellant had no defence to the suit. And I also answer issue 2 in the Respondent’s brief in the negative-it was not denied fair hearing.

When the Appellant filed a further Amended Statement of Defence on 16/2/95 but the issue of the counter-claim was never considered at the trial. The whole trial was never concluded.

PARTICULARS OF ERROR

1. The Appellant filed its further Amended Statement of Defence on 16th February, 1995
2. The said Further Amended Statement of Defence was before the trial Judge and the Judges of the Court of Appeal at all material times.
3. In the Appeal before the Appeal Court, Lagos, the judgment of the High Court dated the 3rd day of March 1995 has been held to be final judgment.
4. The Lagos High Court did not consider the Appellant’s counter-claim but stuck it out on 9/7/96.
5. The decision of the High Court Lagos appealed against by the Appellant was made on 3rd day of March 1995. The Appellant filed its appeal on the 3/4/95.
6. The Court of Appeal in effect held that the Appellant was given a fair hearing.

GROUND III

The Learned Judges of the Court of Appeal erred in law when they held as follows:

“…I answer issue 1 & 2 in the Appellant’s Brief in the affirmative. I answer in the affirmative issue 1 in the Respondent’s. Brief saying that Exhibit “B” is a clear admission of the debt that the Defendant/Appellant had no defence to the suit, “it seems to me that the Defendants have no defence to this action, it is most inexpedient to allow a defendant who has no real defence to the action to defend for mere purpose of delay”.

When the Appellant filed a Further Amended Statement of Defence on 16/2/95 but issues of its counter claim was never considered throughout the trial.

PARTICULARS OF ERROR

1. The Appellant filed its further Amended Statement of defence and Counter claim on 16th day of February, 1995.
2. The said Further Amended Statement of Defence and Counter claim was before the High Court of Lagos State from 16/2/95.
3. The decision of the High Court of Lagos appealed against by the Appellant was made on 3rd day of March, 1995.
4. The decision was a final decision.
5. The Appellant appealed against the said decision of High Court of Lagos State on 3rd day of April, 1995.
6. The High Court of Lagos was of the view that the Appellant had no “real defence to the action”. In effect the Learned Judges of the Court of Appeal upheld that view.
7. The Defence of the Appellant filed on 16/2/95 was not considered by the Lagos High Court and consequently the Lagos High Court did not give the Appellant fair hearing of its defence. Erroneously the Court of Appeal upheld the decision of the High Court Lagos.

In accordance with the rules of this court both parties filed and exchanged their Briefs of arguments. The appellant in its brief of argument dated 2/1/02 formulated two issues for determination. The Respondent in its brief of argument dated 19/2/07 equally formulated two issues. There is no pressing need for me to reproduce the issues.

Before proceeding to consider the submissions of the learned counsel to the parties on the substantive matter as contained in their respective briefs of argument, it is pertinent in my view to consider an important issue of jurisdiction raised by the respondent herein. This is so because the issue of jurisdiction is so fundamental, and being a threshold issue it is imperative to have it determined first before proceeding to the substantive matter since lack of it would deprive this court the power to pronounce on the main issue.

The Respondent filed a Notice of preliminary objection dated 19/01/07, where he contends that the appeal is incompetent and urged this court to strike it out. The grounds of this application are stated thus:-

“(i) None of the grounds of appeal involves question of law alone and no leave was obtained to file them.

(ii) The particulars of misdirection given under ground 1 of the grounds of appeal were not facts before or properly before the lower court nor were they part of the case of the Appellant at the trial court.

(iii) Ground II of the grounds of appeal is clumsy, vague and does not attack the ratio decidendi.

(iv) Ground III of the grounds of appeal is a repetition of ground II with addition of a quotation taken not from the High Court decision.

(v) The reliefs sought are incompetent”.

The respondent argued this issue in its Brief of argument. It was the submission of the learned counsel in the Respondent that subject to the provisions of Section 233(2) of the 1999 Constitution of the Federal Republic of Nigeria, this court can entertain an appeal involving questions of fact or mixed law and fact only with leave of the Court of Appeal or the Supreme Court obtained pursuant to Section 233(3) of the Constitution. Learned Counsel submitted that Ground 1 of the ground of appeal involves questions of fact while Grounds II and III involve questions of mixed law and facts and the Appellant having failed to obtain the leave of either the lower court or this court, the appeal therefore becomes incompetent, the case of AKWIWU MOTORS LTD V. SANGONUGA (1984) 5 SC 184 at 186; and ERISI V. DIKA (1987) 3 NWLR (Pt.66) 503 at 510 were cited.

The learned counsel referred to the particulars under the “particulars of misdirection”, and submitted that they are not borne out of the record, and thus submit that they were not properly before the court, and cannot therefore form the basis of misdirection. Thus leaving the allegation of misdirection without any particulars contrary to Order 8 Rule 2 renders same liable to be struck out. The case of NSIRIM V. NSIRIM (1990) 3 NWLR (Pt.138) 285 at 297 was cited in support.

On GROUND II, the learned counsel submitted that it is clumsy and vague and fails to attack the ratio decidendi but merely quotes the conclusion reached by the lower court and the particulars of error given and those which do not have any bearing on the passage quoted. The learned counsel for the Respondent therefore urged this court to hold that grounds of appeal are incompetent and consequently urged this court to strike them out.

Surprisingly, the Appellant kept mum and did not file any reply to this Notice of Preliminary Objection. In my view the issue is deemed to have been admitted. Nonetheless I shall proceed to determine the matter on its own merit.

I have closely and carefully gone through the record of proceeding and it not in doubt that no leave of court, either of the lower court or this court was obtained before this appeal was filed. For this court to have jurisdiction to hear and determine an appeal before it, no leave is required where the grounds of appeal involves question of law alone and simpliciter. Where the questions involve facts or mixed law and fact, the leave of court must be first sought and obtained. In the latter circumstance where the required leave is not obtained, the grounds of appeal would be incompetent and liable to be struck out. This court in Alhaji Tahir Maihoro vs. Alhaji Jibrin Garba (1999) 7 SCNJ 270 at 279 had clearly stated the Law. The Statement of Ejiwunmi JSC of blessed memory says:

“It is therefore clear that the court has no jurisdiction to entertain an appeal on a ground of fact or mixed law and fact unless of course, leave has been obtained. This point has been emphasized in a number of recent decision; it is enough to refer to only the following:-

Ohiwele v. Lagos State Development Property Corporation (1983) 5 SC 1; Olojuon v. Ozima (1985) 2 NWLR (Pt.6) 167 at pages 176 – 188; and J. B. Ogbechie & Ors v. Gabriel Onoche (1986) 2 NWLR 484. One of the obvious result of the state of the law is that where an appellant’s grounds of appeal are only of facts or mixed law and fact, the grounds, and hence the appeal must be struck out and unless leave had been obtained.” On the other hand, where no leave had been obtained and some of the grounds are of law and others are either facts or mixed law and facts, only those which are grounds of law are competent. All grounds of fact or mixed law and facts must be struck out”.

(Italics mine for emphasis)

As I had earlier pointed out, no leave was obtained before this appeal was filed, the question to be answered now is whether the three grounds of appeal in this case are grounds of law, or facts, and or of mixed law and facts The court is required to examine thoroughly the grounds of appeal together with their particulars in order to see whether any of the grounds reveal a misunderstanding of the law by the lower court or a misapplication of the law to the facts already proved or admitted in which case it would be a question of law. Where, however, the ground is such that would require questioning the evaluation of facts by the lower court before the application of the law, that would amount to question of mixed law and fact. Ground of appeal which raises facts which needed to the determined, either way, is a ground of fact”. See this court’s decision in the following cases:-

1. Onifade v. Olayiwole (1990) 7 NWLR (Pt.161) 130
2. Olanrewaju v. Ogunleye (1997) 2 NWLR (Pt.485) 12
3. Shanu v. Afribank (Nig.) Plc 2 WRN 1 at 4.
4. Obatoyin v. Ejedike (1996) 4 SCNJ 249.

The point must also be stressed here that the mere fact that an appellant describes a ground of appeal as of fact as a ground of law would not necessarily render it to be so, the court would still inquire whether ground of appeal described as ground of law is actually (or in fact) a ground of law or of a mixed law and fact, and/or is of facts alone. See Ejiwunmi v. Costain (W.A) Plc (1998) 12 NWLR (Pt.576) 149

Applying these principles to the instant case, Ground 1 of the grounds of appeal is indisputably a ground of facts alone. The Ground as framed started thus:-

“The learned judges of the Court of Appeal misdirected themselves on the facts and thereupon arrived at a wrong conclusion…” It relates to the conclusion or findings of fact of the lower court on the disputed Exhibit B.

While grounds II and III though numbered separately, are the same in words and contents, challenged also the finding of the lower court on the disputed Exhibit B, it involves the consideration of facts as to whether exhibit B amounts to an admission of the claims of the Respondent, and the facts of the duties and obligations of Mr. Lachmandas. To my mind, these grounds of appeal are of mixed law and facts.

My Lords, having found that the three grounds of appeal in this case are of facts and of mixed law and facts,it is my considered view that the Appellant having failed to obtain the leave of either the lower court or the Supreme Court before filing this appeal have ran foul of section 233(3) of the 1999 Constitution. Hence, the grounds of appeal are incompetent, consequently all the issues for determination distilled from the incompetent grounds of appeal and the arguments based on them are incompetent and they are therefore struck out. The legal consequence of the above is that there is nothing before this court as the whole appeal is incompetent and is liable to be struck out. The appeal is struck out by me. I award costs of N50,000.00 in favour of the Respondent.

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SC.22/2002