First Amalgamated Building Society Ltd. & Anor. V. Ibiyeye (2007)
LawGlobal-Hub Lead Judgment Report
JUMMAI HANNATU SANKEY, J.C.A.
This is an appeal against the decision of the Kwara State High Court sitting at Offa delivered by Kawu, J. on the 25th day of July, 2006. The Respondent herein, who was the Plaintiff at the trial Court, had claimed from the Defendants, now Appellants, as follows:
a) “The sum of N7,899,122.00 being sum due and payable to the Plaintiff on the principal sum advanced by the Plaintiff as moneylender to the 1st Defendant and personally guaranteed by the 2nd Defendant and interest thereon as at 14/10/2004.
b) Interest on the said sum of N7,899,122.00 at the rate of 10% per month from 15/10/2004 to the date of judgment and thereafter at the rate of 10% per annum until the judgment debt is fully liquidated.”
This suit was initially commenced at the lower court on the ‘Undefended List’. Upon being served the processes of Court, the Defendants filed a Notice of Intention to defend the suit supported by an affidavit attached to which were several exhibits. When the matter came up for hearing before the court, the Plaintiff’s Counsel conceded upfront that this was a matter that should proceed to full trial where evidence would be adduced, and so, the court transferred the matter to the ‘General Cause List’ for hearing. On the date set down for hearing, whereas the Plaintiff’s Counsel informed the Court that the parties had been unable to achieve an out of Court settlement, the Defendants’ Counsel, in the spirit of settlement, offered to pay the Plaintiff part of the claim to the tune of N2.1 million. On hearing this, the Plaintiff’s Counsel promptly applied for judgment to be entered for the Plaintiff on the sum admitted. At this stage, the Defendants’ Counsel vehemently opposed the application for judgment based on the fact that he had made the offer in the spirit of amicable settlement between the parties, and also in light of the defences raised in paragraph 21 of the Statement of Defence. He contended that entering judgment at this stage of the proceedings would amount to a denial of their right to a fair hearing in respect of those issues. Nevertheless, the learned trial judge went ahead to enter judgment thus:
“COURT/RULING: – I think this is an appropriate case where the court can exercise its power under Order 27 Rules 14(3) of the 2005 Rules of Court to give judgment in favour of the plaintiff as per an admission by the defendants.
Accordingly I give judgment to the Plaintiff in the sum of two million one hundred Thousand Naira (2.1 million) only, admitted by the defendant.
Case adjourned to 10/10/2006 for the balance of the Plaintiff’s claim.”
It is against this decision that the Defendants, being aggrieved, have now appealed. By their Notice of Appeal dated 28th July, 2006 and filed on the same date, the Appellants complain thus:
“GROUNDS APPEAL:-
(1) The learned trial judge erred in law when he assumed jurisdiction to entertain and actually granted the oral application of the Plaintiff’s Counsel for judgment in the sum of N2.1 million while acting under Order 27 Rule 14 (3) of the Kwara State High Court (Civil Procedure) Rules 2005. This error has occasioned a grave miscarriage of justice.
Particulars:
i. The learned trial judge acted under Order 27 Rule 14(3) of the Kwara State High Court (Civil Procedure) Rules, 2005.
ii. There was no motion on notice before the Court asking for judgment.
iii. Order 27 Rules 14 (4) of the Kwara State High Court (Civil Procedure) Rules, 2005 makes the filing of a motion on notice mandatory in the circumstance.
iv. The learned trial judge only considered the oral application of Plaintiff’s counsel.
v. There was no proper application before the court upon which the court could exercise its powers under Order 27 Rule 14 (3) of the 2005 Rules of court.
vi. The application upon which the court exercised its power was not initiated by due process of law and a condition precedent was not fulfilled.
(2) The learned trial Judge erred to have entered judgment against the Defendants when one of the defences of the Defendants is the illegality of the transaction between them and the Plaintiff and this error has occasioned a grave miscarriage of justice.
Particulars:
(i) The fulcrum and/or basis of the Plaintiff’s claim is that of money lending transaction.
(ii) The Defendants copiously raised the issue of illegality of the money lending transactions involved in the case particularly vide paragraph 21 of their Statement of Defence and which defence affects the totality of the Plaintiff’s claim.
(iii) Illegality of a transaction renders same unenforceable.
(iv) The Defendants have been denied a hearing, a fortiori, fair hearing on this important issue.
(3) The learned trial Judge erred by giving judgment to the Plaintiff in the sum of two million one hundred thousand naira while denying the Defendants a hearing, a fortiori, fair hearing as per their defences contained in their Statement of Defence.
Particulars: –
(i) There is no admission whatsoever in the Defendants’ Statement of Defence.
(ii) All the paragraphs of the Defendants’ Statement of Defence ought to be read and considered as a whole for purposes of determining whether there was any admission warranting any judgment at the particular stage in question.
(iii) The Defendants have not been given any hearing let alone fair hearing in respect of the issues and/or defences contained in their Statement of Defence.
(iv) The Plaintiff’s claims had earlier been wholly transferred from the undefended list for hearing on the Ordinary Cause list.
(4) The learned trial Judge erred by entering judgment against the Defendants based on what he termed to be admission while in the process of enjoining parties to settle amicably and this error has occasioned a grave miscarriage of justice.
Particulars:-
(i) Defendants’ Counsel raised serious objection to the court entering judgment based on any purported admission.
(ii) There could not have been any admission considering the totality of the defences of the Defendants as contained in their Statement of Defence.
(iii) It was the learned trial judge that was trying to enjoin parties to settle amicably.
(iv) It was in the process of trying to see if parties could settle amicably that the learned trial judge entered judgment against the Defendants in spite of vehement opposition.
(5) The learned trial Judge erred in law by giving judgment to the Plaintiff at the stage in question when no pre-trial conference was ever held in the suit and this error has occasioned a grave miscarriage of justice.
Particulars:-
(i) Pleadings had closed in the case before 25/7/2005 when the judgment herein was given to the Plaintiff.
(ii) No pre-trial conference whatsoever was held in the case as mandatorily provided for by Order 33 of the Kwara State High Court (Civil Procedure) Rules, 2005.
(iii) In fact, the plaintiff made no efforts whatsoever in furtherance of facilitating any pre-trial conference.”
On the 25th September, 2007, when the appeal came up for hearing, Mr. jimoh, learned Counsel for the Appellants, adopted the Appellants’ Brief of Argument dated 14th February, 2007 and deemed filed on 12th March, 2007, as well as the Appellants’ Reply Brief dated 17th May, 2007 and filed on 18th May, 2007, as the Appellants’ arguments in this appeal. He asked the Court to allow the appeal.
On his own part, Mr. Oladipo, learned Counsel for the Respondent, drew the Court’s attention to the Respondent’s Brief of Argument dated 25th April, 2007. He adopted same as the Respondent’s arguments in this appeal. He further submitted orally in Court that, in respect of paragraph 5.12 at page 4 of the Respondent’s Brief, the Appellants are seeking to use the Rules of Court to subvert the judgment of the court. He submitted that the Rules of Court are described as the handmaids of justice and are not to be used by a clever Appellant to subvert the course of justice. He relied on an additional authority in this regard, namely: Montubi V. S.C.C. Ltd (1986) 2 NWLR (Part 21) 158 at page 164 per Wali, JSC. He urged the Court to dismiss the appeal.
The Appellant, in his Brief of Argument, formulated three issues for the determination of this Court thus:
1. Whether the trial Court has jurisdiction to have entered judgment under Order 27 Rule 14(3) of the Kwara State High Court (Civil Procedure) Rules, 2005 when there was no proper application before it – Ground 1.
2. Whether the Appellants were not denied a hearing, a fortiori, fair hearing in respect of their defences to the Respondent’s suit which defences affect the totality of the Respondent’s claims – Grounds 2 and 3.
3. Whether considering the whole circumstances of the case, there could have been and/or there was any admission upon which the trial Court could enter judgment at the stage in question particularly when no pre-trial conference was held as provided for in the Kwara State High Court (Civil Procedure) Rules, 2005 – Grounds 4 and 5.”
On his own part, the Respondent formulated four issues to be resolved by the Court as follows.
1. Whether the lower court exceeded his jurisdiction by granting the Respondent’s oral application for judgment on the admitted sum.
2. Whether the lower court ought to have considered the pleaded defence of illegality before ruling on the Respondent’s oral application for judgment.
3. Whether the lower court failed to give the Appellants a fair hearing before giving judgment the sum which they admitted.
4. Whether the lower court was wrong to have entered judgment for the admitted sum during the process of amicable settlement or before the pre-trial conference.
It is my view that the issues formulated by the Appellant succinctly capture the issues raised in this appeal. I therefore adopt same as the issues to be resolved.
Issue One.
Whether the trial Court has jurisdiction to have entered judgment under Order 27 Rule 14(3) of the Kwara State High Court (Civil Procedure) Rules, 2005 when there was no proper application before it – Ground 1.
On this issue, the Appellant contended that by Order 27 Rule 14(4) of the Kwara State High Court (Civil Procedure) Rules, 2005, an application for judgment based on an admission of a party shall be by way of a motion on notice. In this case, no motion on notice for judgment was filed or argued. The trial Court only acted on the oral application of the Respondent’s Counsel. Relying on the cases of Ogidi V State (2005) 1 SC (Part 1) 98 at 126-127 per Ejiwunmi, JSC. and Olowokere V African Newspapers (1993) 5 NWLR (Part 295) 583 at 600, learned counsel submitted that the use of the word “shall” in Order 27 Rule 14(4), makes this Rule mandatory and compulsory for the purpose of invoking the powers given by Order 27 Rule 14(3) of the Rules. He contended that the filing of a motion on notice preceding judgment is a condition precedent to the exercise of jurisdiction by the trial Court under Order 27 Rule 14(3). Learned Counsel relied on the decisions in Madukolu V Nkemdilim (1962) 2 SCNLR 341 at 348, Olowokere V African Newspapers (Supra) at 599, and Johnson V Osaye (Supra) at 1209-1210. Since the application acted upon by the learned trial court was not initiated by due process of law, he contended that this robbed the court of the necessary jurisdiction in giving the judgment under consideration. He therefore submitted that the trial Court lacked the jurisdiction to have entered judgment upon an oral application pursuant to Order 27 Rule 14(3) of the Rules of that court.
On his part, learned Counsel for the Respondent has submitted on this issue that the word “shall” in Order 27 Rule 14(4) should be interpreted as merely permissive as it is not in all cases that the word is held to be mandatory. While admitting that the Rule deals with admissions in pleadings, he submitted that Order 56 Rule 11 of the Kwara State High Court Rules acts to save any such non-compliance. He contended that when a party admits a part or the whole of a claim against him, it would be pedantic and an unnecessary attachment to technicality for the court to await the filing of a motion on notice before entering judgment. Citing Salami V Bunginimi (1998) 9 NWLR (Pt. 565) 235 at 243 he submits that the days of technicality are over. In the alternative, learned counsel urged the court to consider the non-filing of a motion on notice an irregularity which is incapable of invalidating the proceedings under Order 4 of the High Court Rules. Aermacchi V A.I.A LTD (1986) 2 NWLR (Pt. 23) 443 at 451.
It is not in issue that the Appellants’ Counsel orally and in open court admitted the claim to the tune of N2.1 million, just as it is not in issue that, by their pleadings, the Appellants deny the claim wholly and set up certain legal defences. The bone of contention here is whether, by virtue of Order 27 Rule 14(4) of the Rules, (as set out above), the learned trial Judge possessed the requisite jurisdiction to have acted on the oral admission as he did. In other words, what is called up for determination under this issue is, whether the word “shall” as used in the said Rule of court should be given a mandatory interpretation, as against a permissive or directory interpretation, given the circumstances of the case.
Rules 14(3) and (4) are quite stark in stating that any application for judgment based on an admission contained in pleadings or otherwise “shall be by motion on notice”. The word “shall” in its ordinary meaning is obligatory. It admits of no discretion. Whenever a statute declares that a thing shall be done, the natural and proper meaning is that a peremptory mandate is enjoined. Nevertheless, this may not always be the case. The word has sometimes been held to be directory depending on the circumstances of the case, especially where to do otherwise would lead to some absurd or inconvenient consequence. Consequently, there is no hard and fast rule for the interpretation of the word as can be seen from a host of decided cases.
In the English case of Liverpool Borough Bank V Turner (1961) 30 L. J. ch. 379 at 380, Lord Campbell L. C. held thus:
“No universal rule can be laid down for construction of statutes as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience. It is the duty of Courts of Justice to try and get at the real intention of the Legislature by carefully attending to the whole scope of the statute to be construed.”
In the case of Katto V C.B.N. (1991) 9 NWLR (Pt. 214) 126 at 147, the Supreme Court per Akpata, JSC had this to say on the subject of the interpretation of the word “shall” in both Statutes and Rules of court:
“Generally the term “shall” is a word of command and denotes obligation and gives no room to discretion. It imposes a duty. The term is however sometimes construed as merely permissive or directory to carry out the legislative intention, particularly in cases where its being construed in a mandatory sense will bestow no right or benefit to anyone.”
He went further to say:
“As mandatory Rules of Court are not as sacrosanct as mandatory statutory provisions, Courts of Justice are more inclined to regard as directory or permissive any provisions in Rules of Court which appear mandatory, If it is implicit in the provision in question or if a combination of other provisions with the provision in question so dictates or if the ends of justice so demands that it be so construed.”
In the case of Okpala V D.G N.C for M.M (1996) 4 NWLR (Pt. 444) 585 at 594, Pats-Acholonu, JCA (as he then was), (of blessed memory), captured the position of the law on the interpretation of words in statutes and Rules of Court when he stated thus:
“The use of the word “shall” in Order 10 Rule 2 of the Lagos High Court Rules would ex facie appear to import imperativeness in its tone and intendment. Various judicial authorities have given varied constructions to the word “shall” in an effort to discover the true intention of a statute or any subsidiary legislation like the rules of the court. Statutes and subsidiary legislations ought generally to be construed to give life and meaning to them. In case of Rules of Court they are made to aid courts to discover truth and ensure abidance of a regulated procedure that would facilitate administration of justice, When to construe the word “shall” … in an abstract manner might lead to judgment that may appear obtuse or become destructive or pernicious of the ends of justice the courts should of necessity avoid such construction and be bold enough to invoke judicial activism. It therefore goes without saying that where the construction of a word, phrase or sentence meant to quicken dispensation of justice might (sic) to stultifying or asphyxiating it then it ought not to be so construed. We should avoid the circumstances where the courts would become slaves to rules. Motor cars and telephones are essential for ease of transport and communication as they are meant to serve us and not vice versa. If the worst comes to the worst, we can do without them.”
A concerted reading of the authorities on the subject of the interpretation of the word “shall” shows that it is important that the intention of the legislature in so framing the Rules must be discovered and the entire circumstances of the case be taken into consideration. This is in order that a meaning should not be ascribed to the word that is outside the intention of the framers of the Rules. In the instant case, prior to the coming into operation of these Rules in 2005, the Kwara State High Court (Civil Procedure) Rules, 1989 was in force. It contained a similar provision in Order 30 Rule 3(2) with a slight modification thus:
“An application for an order under this rule may be made by motion or summons.”
The obvious difference between the immediate past Rules and the present Rules of Court applicable is that whereas under the 1989 Rules, the filing of a motion or summons for judgment following an admission is made permissive by the use of the word “may”, the 2005 Rules seems to make it mandatory by the insertion of the word “shall”. The question we should ask ourselves is: what accounts for the change in the use of words by the makers of the Rules? Is it just a matter of semantics or could there be a specific intention behind the change? Methinks that the use of the word “shall” in the new Rules was quite deliberate and intentional, possibly in order to deal with some mischief or to meet some challenges that arose as a result of the 1989 Rules. One therefore needs to look at Order 27 Rule 14 of the Rules holistically and together in con in order to discover the true intention of the legislature. See Liverpool Borough Bank V Turner (Supra) and Okpala V D.G.N.C. for M.M. (supra)at page 594.
It is pertinent at this stage to set out the provision of Order 27 Rule 14 of the Rules of the Kwara State High Court which deals with admissions made in the pleadings of the parties. It provides as follows:
“(1) Any party may give notice by his pleading that he admits the truth of the whole or any part of the case of any other party.
(6) The defence shall admit such material allegations in the statement of claim as the defendant knows to be true, or desires to be taken as established without proof thereof.
(7) Where admissions of fact are made by a party either by his pleadings or otherwise, any other party may apply to the court for such judgment or order as upon those admissions he may be entitled to without waiting for the determination of any other question between the parties, and the court may give such judgment, or make such order, as it thinks just.
(8) An application under sub-rule (3) shall be by motion on notice. ”
A close examination of sub-rule (3) reveals that where a party makes admissions of fact either by his pleadings or otherwise, the other party has discretion to apply for judgment on the admission. In the same vein, in the event of such an application, the court also has a discretion either to enter judgment based on the admission, (without waiting for the determination of any other question between the parties), or not to. This exercise of discretion has been permitted by the repeated use of the word “may” therein. Sub-rule (4) goes on to give the condition under which the court may proceed to give judgment on an application following such an admission. This time, instead of using the word “may” as it did in the preceding sub-rule (3) and as it did in the previous Rules of Court, 1989, it deliberately used the word “shall”. By so doing, the framers of the Rules demonstrated their intention to depart from the previous two situations wherein an exercise of discretion was allowed. They now clearly reflected their intention to make it mandatory that if the other party exercised its option under Order 27 Rule 14(3) to apply for judgment on the party’s admission, then before the court can act on same such an application must necessarily come before it by way of a motion on notice. Any other interpretation would do violence to the Rules and lead to the very mischief which the makers of the Rules sought to deal with, as has now happened in this case. It is clear that the filing of a motion on notice in the instant case would have obviated the need to examine the admission with a view to determining whether it is a qualified or unqualified admission which the court could act on without reservation in regard to other questions for determination between the parties.
Therefore, taking the entire circumstances of this case into consideration, it becomes clear that the use of the word “shall” ought to be given its mandatory meaning. This is because at the time the application for judgment was made by the Respondent’s Counsel, both the Statement of Claim, Statement of Defence as well as the Reply to the Statement of Defence were already before the court. Being fully appraised and aware of the full import of the claim of the Plaintiff/Respondent, as well as the Defendants/Appellants defences to the claim, the Appellants’ counsel, at page 69 of the Record, surprisingly but voluntarily, admitted the claim to the tune of N2.1 million. Taking the erroneous view that the word “shall” in the Rule of Court be given its permissive interpretation, the Court exercised its discretion and entered Judgment on the Respondent’s oral application. He did not insist that the application be made on notice as Rule 14(4) clearly mandated. In choosing the latter path, the learned trial Court was on very slippery ground given the interpretation of the said Rule in its mandatory sense. This was clearly a wrong exercise of judicial discretion in the application of Order 27 Rule 14(3), given the mandatory provision of Rule 14(4) of the Rules of Court. I agree with learned Counsel for the Appellants that the learned trial Judge, in so doing, acted without jurisdiction given that a condition precedent to the exercise of jurisdiction had not been met, i.e. the filing of a motion on notice. See Madukolu V Nkemdilim (1962) 2 SCNLR 341 AT 348; Olowokere V African Newspapers (1993) 5 NWLR (Pt. 295) 583 at 600; Johnson V Osaye (2001) FWLR(Pt. 68) 1197 at 1216. Indeed, the oral application for judgment acted upon by the learned trial Judge was not initiated by due process of law. This, therefore, robbed the court of the necessary jurisdiction to give the judgment now under challenge. The issue of whether he should have acted circumspectly in view of the legal defences raised in the Appellants’ pleadings is again another matter which will be addressed anon. Issue One is therefore answered in the negative. The learned trial Court did not have jurisdiction under Order 27 Rule 14(3) of the Kwara State High Court (Civil Procedure) Rules to enter judgment without the filing of a motion on notice under Order 27 Rule 14(4) of the said Rules and I do so find. Ground 1 is resolved in favour of the Appellants.
Issue Two.
Whether the Appellants were not denied a hearing, a fortiori, fair hearing in respect of their defences to the Respondent’s suit which defences affect the totality of the Respondent’s claims – Grounds 2 and 3.
Under this issue, learned Counsel for the Appellants referred to the Defendants’ Statement of Defence at pages 41-45 of the Records as well as the Statement on oath of the 2nd Appellant as a witness at pages 54-57 thereof, wherein the defences of undue influence, illegality of transactions and lack of jurisdiction are raised. Consequent upon these defences, the Appellants, on their pleadings, denied the claim of the Respondent in its entirety. In respect of the defence of illegality, learned counsel submitted that the Appellants in their Statement of defence contend that the Respondent, as a Moneylender, contravened the provisions of the Moneylenders Law Cap 103 Laws of Kwara State, 1994 by charging an interest rate higher than that authorized by Sections 13(1)(a) of the Moneylenders Law, demand for and payment of interest in advance as well as charging monthly compound interest – Section 15 of the Law, and non-keeping of record book in respect of the transactions – Section 19(2) (3) & (4) of the Law. On the authorities of Alao V. ACB (1998) 2 SCN) 17; @ 46; Onamade V ACB (1997) 1 SCNJ 65 @ 86; FRN V Ifegwu (2003) 5 SC 252 @ 298-299 and Menakaya V Menakaya (2001) 9 SCNJ 1 @ 33, 39-40, learned counsel submitted that the issue of illegality is so serious that no admission and/or estoppel can be raised to defeat it.
Concerning the defence of undue influence raised, learned counsel submitted that where undue influence is proved to have affected a transaction, such transaction is voidable at the instance of the person affected. He relied on Bua V Dauda (2003) 6 SC ((Pt. II) 120 @ 132-133.
With regard to the defence of lack of jurisdiction raised in the defence, he submitted on the authority of Madukolu V Nkemdilim (1962) 2 SCNLR 341 that one of the essential conditions that vests jurisdiction in a court is that the case comes before the court by due process of law and upon fulfillment of any condition precedent to the exercise of jurisdiction, any defect in competence being fatal to the proceedings no matter how well conducted and decided. He submitted it is raised in the defence to the claim that the Respondent failed to fulfil two conditions precedent, i.e. non-production of the mandatory statements of account in respect of the loan transactions, and non-service of a letter of demand on the 2nd Appellant prior to the institution of the action. Learned counsel submits that, by entering judgment as he did, the learned trial judge did not afford the Appellants the opportunity of being heard in respect of these defences which has therefore derogated from his right to a fair hearing under Section 36(1) of the 1999 Constitution of the Federal Republic of Nigeria. He contended that the consequence of an infringement of the right to a hearing, a fortiori, fair hearing, is that the trial is a nullity. He called in aid the decisions in the following cases: Adeyemi V Ike-Oluwa (1993) 9 SCNL (Pt. 11) 293 @ 300 & 316; Adigun V. AG Oyo State (1987) 3 SCNJ 118 @ 191-192; Olumesan V Ogundepo (1996) 2 SCNJ 172 @ 184 and Salu V Egeibon (1994) 6 SCNJ (Pt. II) 223 @ 239. Learned Counsel therefore urged the Court to decide this issue also in favour of the Appellants.
In his response to this issue, learned Counsel for the Respondent has submitted that since the Appellants’ counsel admitted the sum of N2.1 million, what is admitted needs no further proof. That no hearing could have been granted the Appellants further than the opportunity to respond to the oral application for judgment before judgment was given on the admitted sum. It was his contention that it would be standing common sense on its head for the court to have adjourned its ruling on the oral application to another date in order to allow the Appellants an opportunity to contest the same amount of N2.1 million which they admitted through their counsel. He asked the court to hold that the issue of fair hearing on the defences raised in the Statement of Defence does not arise. The Appellants’ counsel was afforded an opportunity of responding to the oral application for judgment and in fact did respond, based on which judgment was entered.
By paragraphs 10, 11, 12, 13, 19, 20, 21 and 24 of the Joint Statement of Defence at pages 41 – 44 of the Record, the Appellants explicitly and extensively raise the defences of undue influence, illegality and the jurisdiction of the court over the claim before the court. This is buttressed by the statement of the 2nd Appellant on oath as contained at pages 54 – 57 of the Record. It is pursuant to these defences that the Appellants went on, in paragraphs 25 – 26 thereof, to wholly deny the Plaintiff’s claim. Having joined issues on the claim, it goes without saying that where any or all of these legal defences succeed, the case will come to a precipitate and unceremonious end.
Halsbury’s Laws of England (3rd Edition vol. 8 page 126 paragraph 218 defines an illegal contract thus:
“A contract is illegal where the subject matter of the promise is illegal or where the consideration or any part of it is illegal.”
Contracts which are prohibited by Statute or at Common Law, coupled with provisions for sanction in the event of its contravention, are said to be illegal. If the provisions of the law require certain formalities to be performed as conditions precedent for the validity of the transaction, without however imposing any penalty for non-compliance, the result of failure to comply with the formalities renders the transaction void. Where in addition a penalty is imposed, the transaction is both void and illegal, unless the circumstances are such that the provisions of the statute stipulate otherwise. Pan Bisbilder Ltd V. First Bank of Nigeria (2000) FWLR (Pt. 2) 177; C.B.N. V. Eluma (2001) FWLR (Pt. 40) 1615; Solanke V. Abed & Anor (1962) NRNLR 92. Generally, the consequence of illegality in relation to the parties’ contract is that the court will not come to the assistance of any party to an illegal contract who wishes to enforce it. This position of the law is founded on the principle of public policy and is expressed in the maxim ex turpi causa non oritur actio, meaning that an action does not arise from a base cause. Ogwuegbu. JSC stated the principle of the unenforceability of illegal contracts quite concisely in the case of Pan Bisbilder Ltd V. First Bank Ltd (supra) at 192 thus:
“The general principle which is founded on public policy is that any transaction that is tainted by illegality in which both parties are equally involved is beyond the face of the law as no person can claim any right or remedy whatsoever under an illegal transaction in which he has participated. No court will lend its aid to a man who founds his cause of action upon an immoral or illegal act.”
Furthermore, a party to an illegal contract who is a victim of undue influence or fraud can recover money or property transferred under such circumstances. Finally, the Appellants have also raised the issue of jurisdiction in their pleadings. They contend that certain conditions precedent to the institution of the action in court, having not been met, there is a defect in the competence of the suit which is fatal to the action.
This is the law as set out in a long line of authorities starting from the locus classicus in Madukolu V Nkemdilim (1962) 2 SCNLR 341.
I therefore completely agree with the submissions of the Appellants that, having raised such weighty issues in their Statement of Defence which directly challenge the competence of the suit before the court, and therefore the jurisdiction of the court to entertain same, the court was obliged to have first given the Defendants a hearing on those issues before doing anything else in order to come to a decision one way or another on the question of the competence of the suit and jurisdiction of the court. For the law is trite that any defect in competence is fatal and proceedings conducted without jurisdiction are a nullity no matter how well conducted and decided. Madukolu V Nkemdilim (supra). To have gone on to give part-judgment based on an oral admission in court in the face of these challenges to the jurisdiction of the court, the competence of the suit in Court and the vehement objection to same by learned counsel for the Appellants, amounted to wrong exercise of discretion under Order 27 Rule 14(3) of the Rules. The peculiar facts of this case should have alerted the learned trial Judge that the parties should have first been heard on the issue of jurisdiction before any proceedings are taken towards the trial. In giving part-judgment on the claim, the learned trial Judge acted hastily by putting the cart before the horse. In addition to this he closed the door on the Appellants from being heard on their defences in respect of the sum awarded the Respondent in judgment. The law is trite that parties cannot by consent confer jurisdiction on the court.
Where the Court finds that there is no jurisdiction to entertain the suit, then the admission of the Appellants is of no moment. Jurisdiction is fundamental and crucial for where there is a want of jurisdiction, the proceedings thereafter would be affected by a fundamental vice and would become a nullity however well conducted they might otherwise be. Consequently, the fact that the Appellants’ counsel made an oral admission to a part of the claim does not alter the fact that the jurisdiction of the Court was under challenge. Submitting to the jurisdiction of the court is certainly no answer to want of jurisdiction, for a total want of jurisdiction cannot be cured by the assent of parties. If the court does not possess an initial jurisdiction over the subject matter, it is not possible that the consent of the parties can confer such jurisdiction. In like manner, the issue of illegality is so grave that no admission/estoppel can be raised to defeat it. Alao V. A.CB. (1998) 2 SCNJ 17: Onamade V. ACB (1997) 1 SCNJ 65 at 86: FRN V. Ifegwu (2003) 5 SC 252 at 298-299. In failing to afford the Appellants a hearing, a fortiori a fair hearing, on these very fundamental and preliminary issues raised in their pleadings, (which issues should have been dealt with in limine), the trial Court infringed on the Appellants’ right to a fair hearing guaranteed under Section 36 of the Constitution of the Federal Republic of Nigeria, 1999. The trial so far conducted is on all counts a nullity. Salu V. Egeigon (7994) 6 SCNJ (Pt. 11) 223 at 229; Adeyemi V. Ike-Oluwa (1993) 9 SCNJ (PT.11) 293300 & 316-317: Olumesan V. Ogundepo (1996) 2 SCNJ 172 at 184. In the case of Western Steel Works Ltd & Anor V. Iron and Steel Workers Union of Nigeria & Anor (1986) 6 SC 3S at 44-45, Obaseki, JSC held as follows:
“Whenever the question of jurisdiction of any court is raised, it is a question that touches the competence of the court that is raised. It does not raise any issue touching the rights of the parties in the subject matter of the litigation or dispute. Indeed, in our jurisprudence, only a court of competent jurisdiction can adjudicate on issues touching the rights of the parties. A court that has no jurisdiction to entertain the matter before it cannot exercise judicial powers in respect of that matter. Any such exercise is a nullity and the proceedings and judgment as a result of that exercise are null and void. It is therefore of paramount importance that a court in our judicature must satisfy itself that it has jurisdiction before embarking on the exercise of judicial power on the matter in dispute before it.”
Consequently, I answer this issue in the affirmative. Grounds 2 and 3 therefore succeed.
Issue Three.
Whether, considering the whole circumstances of the case, there could have been and/or there was any admission upon which the trial Court could enter judgment at the stage in question particularly when no pretrial conference was held as provided for in the Kwara State High Court (Civil Procedure) Rules, 2005 – Grounds 4 and 5.”
On this issue, learned Counsel for the Appellants adopted the submissions made in respect of Issue two, and in addition, posed the question: whether there was any admission that could have warranted the trial Court to give judgment at the stage in question considering the circumstances of the case. He submitted that any such admission will still not remove the sting of illegality of the transactions, as the parties cannot by consent confer jurisdiction on the court. Learned counsel referred to page 69 of the Record to contend that the purported admission was merely an offer made by the Appellants’ counsel in the spirit of amicable settlement, which offer was not accepted by the Respondent. Therefore, the Appellants insisted on being heard in respect of their defences to the Respondent’s claim. He submitted that the learned trial Court was wrong to have entered judgment for the Respondent at that stage based on what it termed to be an admission. He relied on the case of National Bank of Nigeria Ltd V Guthrie (1993) 4 SCNJ 1 to further submit that there was no specific and categorical admission to have warranted the court to enter judgment as it did.
In addition to this, learned counsel submitted that by Order 33 of the Kwara State High Court (Civil Procedure) Rules, pre-trial conferences are required to be held for the purposes, inter alia, of promoting amicable settlement, or for the adoption of alternative dispute resolution. This was not done. Therefore, the necessary avenues for resolving disputes between parties were not exploited by the trial Court in this case. Instead the trial Court entered judgment on the purported admission without considering the merit of the case of the Appellants, thereby occasioning a gross miscarriage of justice. He again urged this court to resolve this issue also in favour of the Appellants and to allow the appeal.
In response to the above submissions, learned Counsel for the Respondent submitted that since at the stage the admission was made by the Appellants no evidence had been adduced in proof of these defences, they remained mere averments that do not qualify as evidence. He submitted further that under Order 27 Rule 14(3) of the Rules of the court, where admissions of fact are made by a party either by his pleadings or otherwise and the other party applies for judgment upon the admission, the court is entitled to, without waiting for the determination of any other question between the parties, give such judgment as it thinks just. Learned counsel submitted that since the rule of pleadings is that what is admitted needs no further proof, once the Appellants’ counsel admitted N2.1 million in open court, he could not turn summersault and plead any defence. On the issue of entering judgment during the process of amicable settlement or before the holding of a pretrial conference, learned counsel submitted that there is no law or rule of court which prescribes that an admission cannot be made until a pre-trial conference notice has been issued. Besides, that at the time this case was filed, it was the 1989 Rules which were in force and no provision was made therein for pre-trial conferences. In addition, pleadings closed on 6th June, 2005 and the matter was adjourned for hearing before the new Rules of Court came into force. He urged the court to hold that the court was right to have entered judgment on the admitted sum in spite of the fact that the parties tried to settle and failed and that a pre-trial conference notice was not issued. He urged the court to dismiss the appeal.
Ordinarily, where a claim for a definite sum allegedly owed by a defendant is made and a defendant admits to owing part of the claim, no difficulty should arise in the court entering judgment for the sum admitted, leaving the balance to be contested. It has long been a principle of our jurisprudence that admissions made do not require to be proved as no better proof is required than that which an adversary wholly and voluntarily owns up to, Ojukwu V Onwudiwe (1984) 2 SC 15 at 88. However, each case must be taken on its merit and in its own peculiar circumstances. In the instant appeal, much as there is no dispute as to the fact that an admission to a specified sum was made orally in court by Counsel to the Appellants, (then Defendants), this admission was not unqualified and unequivocal. This is evident from the fact that as soon as the Respondent’s counsel applied for judgment on the said admission and before the Court acted thereon, learned Counsel for the Defendants promptly drew the Court’s attention to paragraph 21 of the Statement of Defence wherein the legal defences of undue influence, illegality of the transaction and lack of jurisdiction were raised. Even though parties had not been heard on these challenges to the Court’s jurisdiction, the Court, (rather hastily in my view), brushed same aside and entered judgment for the Respondent. This was patently wrong. As has extensively been held under issue 2 above, the learned trial Judge should have afforded the parties a hearing on this all important issue of the challenge to the competence of the suit and the jurisdiction of the Court to entertain same, before proceeding to act on the Defendants’ admission. The resultant effect is that there was no unequivocal admission of liability given the circumstances of the case. The application for judgment, as well as the subsequent judgment given, was “inchoate, ill-timed and therefore premature”. Uwais, JSC, (as he then was), in the case of National Bank of Nigeria Ltd V Guthrie (supra) at page 15. I adopt my findings in respect of issue 2 on this issue also.
In respect of the matter of the failure to hold the pre-trial conference before the judgment was given, the complaint that the suit had been set down for hearing before the Kwara State High Court (Civil Procedure) Rules, 2005, came into effect carries no weight in the face of Order 1 Rule 4(1) thereof. The Rule provides thus:
‘These Rules shall apply to all proceedings including all part-heard causes or matters in respect of steps to be further taken in such causes or matters’:
In consequence, this has become a non-issue. Events had not overtaken the issue of pre-trial conference. If the learned trial Judge had only trod the path of caution, it was at the point of the Appellants’ Counsel’s objection to the entry of judgment that parties should have been ordered to initiate the pre-trial proceedings in compliance with the Rules. As it is, this was not done, and what has resulted is this raging controversy which could easily have been taken care of at the pre-trial conference stage of proceedings. Courts of justice should always bear in mind that it is not expedient to sacrifice justice on the altar of speed. For justice rushed is justice crushed. A healthy balance must be maintained. In the event, I answer this issue in the negative. Grounds 4 and 5 therefore also necessarily succeed.
In the result, this appeal is meritorious. It is allowed. The Ruling of the trial Court entering judgment on the Appellants’ admission is hereby set aside. Since the matter is still pending before the lower Court for hearing in respect of the balance of the claim, the matter is reverted back to that Court for full trial in respect of the entire claim.
The Respondent is ordered to pay the Appellants costs in the sum of N10,000.00 only.
Other Citations: (2007)LCN/2522(CA)
