First Bank Nigeria Plc V. Faiko Nig. Limited (2007)

LawGlobal-Hub Lead Judgment Report

STANLEY SHENKO ALAGOA (J.C.A)

This is an appeal against part of the judgment of J. O. Falodun. J of the High Court of Justice Akure Ondo State delivered on the 31st May 1999 in Suit No. AK/11/94 FAIKO NIG. LTD V. FIRST BANK OF NIG PLC in which the learned trial Judge in dismissing the Respondent’s claim also dismissed the Appellant’s counter claim with these words “The defendant also counter claimed for N2,298,705.08. The rule is that the particulars of a counter claim must be pleaded and that evidence must be adduced to support the facts pleaded. In this case there is no evidence in support of the amount claimed. The defendant’s counter claim fails.” It is this part of the judgment dismissing the Appellant’s counterclaim that this appeal is all about.

The facts of this case are that the Respondent as plaintiff had commenced this suit by a writ of summons dated the 11th March 1994 seeking the following reliefs which are also contained in its statement of claim also dated the 11th March 1994. The writ of summons is for –

1. A declaration that the defendant is only entitled to charged on any loan, overdraft or banking facility granted to the plaintiff banking interest prevailing as at the time the plaintiff was granted the said loan, overdraft and or banking facility.
2. A declaration that the defendant cannot unilaterally and or arbitrarily increase the interest rate payable on the loan, overdraft or banking facility granted to the plaintiff without the knowledge and consent of the plaintiff.
3. A declaration that the plaintiff cannot be owing the defendant a staggering sum of N1.5 Million (One million, five hundred thousand Naira only) or anything in the neighbourhood of that amount having paid about N710,000.00K (Seven Hundred and Ten thousand Naira only) to the defendant.
4. An order of injunction restraining the defendant, its agents privies, nominees whatsoever from selling, alienating or advertising for sale or doing anything inconsistent with the plaintiffs title in respect of the landed property situate, lying and being at Block A, Faleso Family Industrial Layout, Ondo Road, Akure held under a Lease Agreement dated 15th March, 1983 and Registered as No. 10 at page 10 in Volume 219 at the Lands Registry in the Office at Akure.
5. An order of injunction restraining to the defendant, its agents, privies, nominees whatsoever from selling alienating of advertising for sale or doing anything inconsistent with the plaintiffs title in respect of all the assets in a deed of debenture created in favour of the defendant on the 7th of July, 1986 and registered with the Registrar of Companies on the 10th of July, 1986.
6. The sum of N15 Million as damages resulting from the management of the plaintiffs account by the defendant.

The defendant (now Appellant) in response to the Statement of Claim filed a fourteen paragraph statement of defence and claim dated 4th July 1994 and filed on the 5th September 1994 in which it counter claimed in paragraphs 13 and 14 against the Respondent as follows: –

COUNTER CLAIM

13. The defendant counter claims the total sum of Two Million, two hundred and ninety eight thousand, seven hundred and five naira eight kobo as at date.
14. The defendant also claims the current bank’s rate of interest on the said sum in paragraph 13 above from 30th June 1994 and until the case is disposed of and thereafter 20% interest until liquidation of the entire debt.

In answer to the Appellant’s counterclaim the Respondent filed a Reply and Defence to counterclaim dated the 30th September 1994 and filed on the 3rd October 1994 wherein the Respondent stated as follows:-

This plaintiff joins’ issues with the defendant in its defence and counterclaim save in so far as same consists of admissions:-

1. The Plaintiff repeats all the averments contained in the statement of claim.
2. The Plaintiff does not owe the defendant the sum of N2,298,750.80K (Two Million, two hundred and ninety eight thousand seven hundred and fifty naira eight kobo) only as counter claimed or at all.

Whereof the Plaintiff avers that the defendant is not entitled to any of the reliefs claimed and state that the claims are frivolous, vexations and an abuse of court process and should be dismissed with substantial cost to the plaintiff.

At the close of pleadings trial commenced on the 2151 October 1997. The Respondent as Plaintiff called two witnesses while the Appellant called one witness who testified as DW1. After addresses of counsel on both sides, the learned trial Judge in a reserved judgment an the 31st May 1999 dismissed the Plaintiffs claim as well as the defendant’s counterclaim.

Aggrieved by the decision of the learned trial Judge in dismissing the counterclaim, the defendant filed a Notice of Appeal dated 11th December 2001 which is to be found an pages 93 and 94 of the Record of Appeal and is reproduced hereunder-

NOTICE OF APPEAL

TAKE NOTICE that the Defendant/Appellant being dissatisfied with the Decision of the Honourable Justice J.O. Falodun of the High Court Akure, Ondo State delivered on the 31st day of May, 1999 (more particularly described in paragraph 2 below) both hereby appeal to the Court of Appeal upon the grounds stated in paragraph 3 below and will at the hearing of this appeal seek the relief set out in paragraph 4 below.

AND the Appellant further states that the Names and Addresses of those directly affected by the Appeal are as stated in paragraph 5 below.

2. PART OF THE DECISION COMPLAINED OF: The Decision dismissing the appellants counter claim.
3. GROUNDS OF APPEAL:
4. The learned trial Judge erred in law in dismissing the defendant’s counter claim simply because no evidence was led in support of the claim.

PARTICULARS:

A) There was no pleading or evidence in support of the defendant’s counter claim,

B) In the absence of any pleading or evidence in support of the counter claim, the proper order to be made is that of striking out and not dismissal.

2. The learned trial Judge lacked the jurisdiction to dismiss the defendant’s counter claim.

PARTICULAR:

A) The defendant’s counter claim was not heard on the merit.

3. The learned trial Judge deprived the appellant the right of a fair hearing when he dismissed the appellant’s counter claim.

PARTICULARS

A) The respondent did not dispute their indebtedness to the appellant.

B) The learned trial Judge found as a fact that the respondent was indebted to the appellant but proceeded to dismiss the respondent’s counter claim.

4. RELIEFS SOUGHT FROM THE COURT OF APPEAL:

To set aside the decision of the High Court dismissing the appellant’s counter claim, and in it’s place, make an order of striking out of the said counter claim.

5. PERSONS DIRECTLY AFFECTED BY THE APPEAL

1) FIRST BANK OF NIGERIA PLC.

2) FAIKO NIGERIA LIMITED.

DATED AT BENIN CITY 11TH DAY OF DEC. 2001.

SGD

K. E. ENEHIKHARE ESQ,

FOR: O.A. OMONUWA & CO.

APPELLANT’S SOLICITOR,

34, URUBI STREET,

BENIN CITY.

SERVICE

RESPONDENT

FAIKO NIGERIA LIMITED

ONDOROAD

AKURE

APPELLANT

C/O ITS SOLICITOR

O.A. OMONUW A & CO.

34 URUBI STREET,

BENIN CITY.

When this matter came up for hearing on the 17th April 2007 the Respondent was not in court but records of this court showed that the Respondent’s counsel was in court on the 28th February 2007 when this matter last came up and was adjourned to the 17th April 2007 and so further service of the hearing notice on him was not essential. K.E. Enehikhare counsel for the Appellant urged this court in the prevailing circumstances to invoke the provisions of order 6 Rule 9 (5) of the Court of Appeal Rules 2002 and treat the Respondent’s brief of argument dated 7th November 2006 and filed on the 9th November 2006 as having been duly argued. He adopted and relied on the Appellant’s brief of argument deemed filed on the 27th April 2006 and urged this court to allow the appeal. Arising from the three grounds’ of appeal contained in the Notice and Grounds of appeal, the Appellant distilled the following two issues for the determination of this court –

ISSUE ONE – Whether having regard to the pleadings and the totality of evidence led by the parties at the trial and the findings of fact by the trial court, it was correct to hold that there was no evidence in support of the defendant’s counter claim.

ISSUE TWO – Whether in the circumstances of the case, the proper order to make was that of dismissal of the Appellant’s counter claim.

A look at the Respondent’s brief of argument shows that the Respondent while adopting issue 2 of the Appellant stated above formulated the following as issue 1 on page 3 of the said Respondent’s Brief of argument – Whether the trial court was right in dismissing the counter claim of the Appellant on the ground that there was no pleading and evidence in support of the claim.

I find no substantial difference between issue 1 as formulated by the Appellant and issue 1 as formulated by the Respondent, and I shall proceed relying on the issues formulated in the Appellant’s Brief of Argument.

With respect to issue 1 the Appellant has submitted that the learned trial Judge erred in law when he held as follows: “In this case there is no evidence in support of the amount claimed. The defendant’s counterclaim fails”. The Appellant went on to state that the state of pleadings and finding of facts by the trial court on this issue does not support this decision, and that while conceding that a counter claim is an independent action separate from the main suit, the trial court cannot discountenance facts elicited or supported by both parties in the main case particularly if such facts touch on the substance of the counterclaim and a defendant who has filed a counterclaim and enters into defence to rebut the plaintiffs claim can also prove his counter claim in the process. Reliance was placed on ‘FAYEMI V. OLORUNFEMI (1998) 1 NWLR (PART 534) page 230. Appellant further submitted that in the course of proceedings, it succeeded under cross examination of the Respondent’s witnesses to elicit vital facts that supported the counterclaim and it also led uncontroverted evidence in proof of the counterclaim which are as follows:

(i) PW1 admitted while testifying in his evidence in chief that the plaintiff was only owing the Defendant (Appellant) the sum of N538,804.55 as at 4th July, 1994.

(ii) PW2 (Plaintiff/Respondent) admitted that he was owing the defendant N538,804 as at 1st July 1994 instead of N2,298.8 claimed by the defendant in their counter claim.

(iii) PW2 while under cross examination admitted that he was aware that in the agreement i.e. exhibit Q he signed the interest rate was not going to be stable.

Appellant then submitted that with these admissions by the Respondent, the trial Judge could not be correct to have ruled that there was no evidence in proof of the Appellant’s counterclaim and that while it conceded that there may not have been evidence in proof of the actual amount of N2,298,705 claimed by the Appellant there was abundant evidence that the Respondent was owing the sum of N538,804.55 plus its accrued interest and that it is trite law that facts admitted need not be proved. DW1 it was further contended by the Appellant had testified that as at 1989, the Respondent’s debit balance stood at about N1 Million, a piece of unchallenged evidence which ought to have been believed by the trial Judge as facts not controverted are deemed admitted. Reliance was placed on ODULAJA v. HADDAL (1973) 11 S.C. 357. OBEMBE V. WEMA BOARD ESTATE (1977) 5 SC 115; MODUPE V. THE STATE (1988) 4 NWLR PART 87 page 130; WALTER V. SKYLL (2001) 3 NWLR (PART 701) 438 at 448.

Appellant went further to submit that the learned trial Judge in his judgment made specific findings of fact which bordered on the proof of the appellant’s counterclaim viz

(1) The trial Judge ruled that the Appellant could vary the interest rate beyond 18% for the loan account and 19.5% for the overdraft account.

(2) The trial court ruled positively in favour of the Appellant on the probative value of exhibit Q which empowered the appellant to vary its interest rates and on which basis DW1 testified positively as to the extent of the Respondent’s indebtedness. According to the Appellant, the learned trial Judge having made these findings of fact in favour of the Appellant cannot now say that there was no evidence in proof of the Appellant’s counterclaim.

The Respondent has submitted with respect to issue I that a counterclaim is a separate, independent and distinct action by itself and that going by the averments in the two paragraphs constituting the counterclaim of the appellant, the averments in the statement of defence were not in any way incorporated by reference into the counterclaim and that the only averments in support of the counterclaim remain the two paragraphs and that even if the averments in the statement of defence were to be so incorporated they do not warrant the description of a full fledged statement of defence in that the statement of defence fails to deal with or confine itself to the allegations made in the statement of claim as it does not set up any veritable answers to the claim. and contains bare denials which do not go into any specific allegations in the statement of claim. Consequently whatever evidence given in support of the statement of defence since the defence was not incorporated into the counterclaim it goes to no issue and the evidence of DW1 cannot be supportive of the counterclaim. Respondent further submitted that it is not enough to prove the indebtedness of the Respondent to the Appellant and that a counterclaim is like an action instituted on its own and cannot proceed if no pleadings or evidence is given. Therefore a counter claimant who made no pleadings on his counter claim cannot expect any award on the counter claim. Reliance was placed’ on OPADARE V. ODEBUNMI (2003)16 NWLR (PART 845) 46 at 58. The Respondent went on to state that taking a cursory look at the averments in support of the counter claim, they are not only bare but contain insufficient particulars to sustain the claim. Nowhere in the evidence at the trial was the claim of N2,298,705.08 or any part thereof proved by the witnesses as even the statement that PW1 and PW2 admitted in their testimony that the Respondent was owing the sum of N538,804.55 does not constitute an admission in the sense that in order to found admission on oral testimony the evidence must be clear and unambiguous. Reliance was placed on CAPPA D’ ALBERTO LTD V. AKINTILO (2003) 9 NWLR (PART 824) 49 at 69. Respondent went on to submit that the evidence of PW1 and PW2 on this issue is not only unclear, uncertain and contradictory but is also ambiguous in that while PW1 said that, “the maximum amount claimable as at 4/7/94 would be N538,804.55” PW2 said “the Plaintiff was not owing N1.5 million but N538,805 as at 1/7/94”. It was further submitted for the Respondent that the Appellant as counter claimant who has the burden of proving the exact amount owed at the exact date by the Respondent abdicated its duty and failed to adduce any evidence in support of its counter claim for the sum of N2,298,705.08 or at any sum at all. Respondent urged this court to dismiss the appeal as the Appellant has failed to provide sufficient particulars and evidence in proof of its counter claim.

Perhaps the first point that should be made with respect to this issue is that a counter claim is a separate, independent and distinct action by itself and does not lean on the statement of defence for support or sustenance even though it is filed along with the statement of defence. It is equal to and not subservient to the main suit and as such must comply fully with the law with regard to pleadings. The implication of this is that material facts which are by law expected to be pleaded in a statement of claim of statement of defence as the case may be or relevant particulars which ought by law to be supplied in a normal pleading if I may be permitted to refer to a statement of claim or statement of defence in that regard, must of necessity be pleaded in a counter claim before evidence can be led on those facts. All too often it is observable that a statement of defence consists of quite a good number of paragraphs that are carefully couched and tailored to meet all the requirements of pleadings while a counter claim filed along with it consists of only a few paragraphs that are lacking in depth in the quite erroneous belief that the statement of defence is there to provide for any short fall in the counter-claim. Even though it is the law as in FAYEMI V. OLORUNFEMI (Supra) that a defendant who has filed a counter claim and enters into defence to rebut the plaintiffs claim can also prove his counter claim in the process, all material facts and particulars relied upon in such proof must also be stated in the counter claim otherwise they go to no issue in proof of the counter claim. In the present case the counter claim consists of only two paragraphs that are bereft of particulars. The burden of proof that the Respondent owes the Appellant the sum of N2,298,705 ,08 as contained in the counter claim falls squarely on the shoulders of the Appellant and such proof should be positive and unequivocal. This has not been done. Instead the Appellant has raked up bits and pieces of evidence to show that the Respondent is indebted to the Appellant to the tune of N535,804.50. Does this amount to proof by the Appellant of indebtedness to it by the Respondent of the sum of N2,298,705.08 contained in the counter claim? I think not. The Appellant stated on page 8 of the Appellant’s Brief of Argument as follows,

“While we concede that there may not have been evidence in proof of the actual amount of N2,298,705.00K (Two million, two hundred and ninety eight thousand seven hundred and five kobo) claimed by the Appellant…”

By this the Appellant has unwittingly shot itself in the leg by admitting that it has failed to discharge the burden placed on it to prove the indebtedness to it of the stated amount by the Respondent. Need I say more? Issue No I therefore must be and is accordingly resolved in favour of the Respondent.

Issue 2 is as to whether in the circumstances of the case, the proper order to make was that of dismissal of the Appellant’s counter claim. The Appellant has submitted that in the event that the court finds that there was no pleading nor evidence in support of the Appellant’s counter claim the proper order to made in the circumstance ought to be that of striking out of the counter claim and not dismissal. Reliance was placed on LAWSON V. AFANI CONST. CO LTD (2002) NWLR (PART 752) 585; OBAWOLE v. WILLIAMS (1996) 10 NWLR (PART 477) 146; OSEYEMON V. OJO (1977) 1 SCNJ 365. The alternative order open to the learned trial Judge to make would have been to non Suit the Appellant in respect of the counter claim, Appellant further submitted. Reliance was placed on the following cases – OKOEBOR v. POLICE COUNCIL (1998) 9 NWLR (PART 566) page 534; EDOKPOLOR V. ASEMOTA (1994) 7 NWLR (PART 356) 314 at 320; EGWU V. MODUNKWU (1997) 4 NWLR (PART 501) 574 at 585; BANK OF THE NORTH v. A DEHI (2002) WRN 84, pages 103-104.

In Reply the Respondent in its Brief of argument submitted that the learned trial judge made the proper order of dismissal of the Appellant’s counter claim after hearing to conclusion both the main case of the Respondent and the counter claim of the Appellant on their merits. Reliance was placed on TINUBU V. KHAHL & DIBBO TRANS LTD (2000) 1 NWLR (PART 677) respondent submitted further that LAWSON V. AFANI COST CO LTD (Supra) relied upon by the Appellant is irrelevant and distinguished from the present case in the sense that in the LAWSON case an order of non suit by the court on the counter claim was made because the counter claim was filed but not followed while in this case the Appellant not only filed but followed its counter claim to its conclusion. Further more the Appellant’s counsel addressed the trial court on the counter claim and urged the trial court to allow the counter claim. From the foregoing therefore, the Respondent submitted that the Appellant as counter claimant could not be rightly said not to have followed the counter claim. The Respondent further submitted that an order of non suit is inappropriate and improper in the circumstances of this case in that the Appellant failed to lead appropriate evidence required to prove its claim of the respondent’s indebtedness to it and the failure to prove this case was not due to any technical hitch and the Appellant did not allege any. Reliance was placed on JAIYEOLA V. ABIOTE (2003) 2 NWLR (PART 810) 397 AT 420; ADELUSOLA V. AKINDE (2004) 12 NWLR (PART 887) 295 317. Respondent finally submitted that the order of dismissal of the counter claim of the Appellant is proper and urged this court to uphold it.

What is the position in the present case now before us on appeal? There is no doubt that at the lower court the case was heard to conclusion. That is to say evidence was led not only on the main case but also on the counter claim although much of the evidence led on or touching the counter claim goes to no issue sufficient particulars not having been provided and the rules on pleadings having been jettisoned on the counter claim. In AKINGBEHIN TINUBU V. KHAHL DIBBO TRANSPORT LTD (2000) 11 NWLR PART 677 page 171, the Supreme Court held that it is unusual to strike out a Civil Case which has been heard to conclusion by a trial court. See generally the following cases – OKOYE V. NIGERIAN CONS. & FURNITURE CO LTD (1991) 6 NWLR (PART 199) 501 ESUKU V. LEKO (1994) 4 NWLR (PART 340) 625; GOMBE V. P.W. (NIG) LTD (1995) 6 NWLR (PART 402) 402.; GLORIODE V. OYEBI (1984) NSCC (VOL 15) 286; (1984) 1 SCNLR 390. The learned trial Judge was therefore right in dismissing the counter claim of the Appellant. Issue No. 2 must therefore be and is hereby resolved in favour of the Respondent. The Appeal lacks merit and is hereby accordingly dismissed. The judgment of Falodun. J of the High Court of Justice Ondo State delivered on the 31st May 1999 in Suit No. AK/11/94 dismissing the counter claim of the defendant (now Appellant) is hereby affirmed. There shall be N5,000.00 costs in favour of the Respondent against the Appellant.

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Other Citations: (2007)LCN/2503(CA)