Himma Merchants Ltd. Vs Alhaji Inuwa Aliyu (1994)
LAWGLOBAL HUB Lead Judgment Report
ONU, J.S.C.
This appeal emanates from the Court of Appeal sitting in Jos, which on 2nd March, 1992 dismissed the Defendant/Appellant’s, appeal from the decision of the High Court of Bauchi State holden in Bauchi where the Respondent as plaintiff had taken out a Writ on the Undefended List against them (Appellants) as follows:-
“The plaintiff is the owner of a fuel filling station at Misau Town within the jurisdiction of this Honourable Court while the defendant is an independent petroleum marketer. On or about the 3rd day of March, 1988 the defendant took on lease the plaintiff’s filling station together with all the appurtenances there unto belonging for an annual sum of N7,000.00 with 5 years rent (i.e. N35,000.00) payable in advance.
The defendant paid N18,000.00 secured the necessary approvals and commenced operation at the plaintiff’s filing station but have since failed and neglected to pay the balance of N16,500.00 despite repeated demands.
WHEREOF the plaintiff claims the sum of N16,500 together with 20% interest per month from July 1988 till final payment from the o defendant.”
The writ which was dated 3rd January, 1989 was supported by an affidavit of five paragraphs of the same date. The appellants in response, filed a Notice of intention to defend on 5th April, 1989, equally supporting it with an affidavit of the same date. The 15th of June, 1989 being the return date, learned counsel for the respondent asked for judgment as per their writ of summons pursuant to Order 23 rules 3 and 4 of the Bauchi State High Court (Civil Procedure) Rules in the absence of the Appellant who even though it had filed a Notice of intention to defend, had no counsel representing it. The learned trial Judge in acceding to learned counsel for the respondent’s request, entered judgment in his favour against the appellants in the following terms.
“Since the defendant has not been given leave to defend by the court, this suit shall be heard on the undefended suit. I will therefore enter judgment for the plaintiff for N16,500.00 being balance of the cost of lease of the plaintiff’s Filling Station together with 18% interest per month from July 1988 till the final payment from the defendant.”
Learned counsel for the appellants after judgment initiated action to set it aside and even though learned counsel for the respondent did not oppose the motion filed for the purpose, curiously enough, the printed record of proceedings is bereft of the court’s order. Albeit, one is left to conjecture as to whether the judgment was set aside or not. However, on 3rd October, 1989, the date when full notes began to be taken by the learned trial Judge, learned counsel for the appellant moved the court on the notice of intention to defend, urging him to stay proceedings to allow for the enforcement of an arbitration contained in paragraph 18 of the agreement exhibited by both parties in their affidavits sequel to the suit herein.
The learned trial Judge on 27th October, 1989 in a considered reserved ruling, found for the respondent once more when with an air of unmistakable finality, he said inter alia:
“I hold that there is no valid notice of intention to defend and notice of preliminary objection filed before me, and the supporting affidavit does not disclose fence (sic) on the merit. Judgment is hereby entered for the sum of N 16,500.00 being the balance of money the defendant failed or neglected to pay together with 20% interest per month from July 1988 till final payment from the defendant.”
As pointed out herein before the appellant’s appeal to the court below was dismissed in a considered judgment, the high water mark of which at page 58 of the Record, runs thus:
“As can be seen above the learned trial Judge did not deviate from the claim. Order 40 Rule 7 of the Bauchi State Rules supra relied upon by counsel in his argument is wide and gives the court discretion on interest payable in any judgment entered. I fail to see how the awarded interest by the learned trial Judge can be faulted.”
The judgment of the court below alluded to above is dated 2nd March, 1992. The appellant thereafter filed in that court, a Notice of Appeal dated 10th March, 1992.
However, on the 14th of May, 1992, appellant applied for leave to file and argue four grounds of appeal contained in the Notice of Appeal to the Supreme Court.
The court below granted same and it was thereafter filed on 28th May, 1992.
Two questions arise for the determination of this court distilled from the four grounds. They are:-
- Whether there was enough affidavit evidence setting forth the grounds upon which the respondent’s claim for 20k interest on the claim of N16.500.00 from July, 1988 until the entire debt is liquidated is based.
- Whether the provisions of Order 40 Rule 7 of the Bauchi State High Court (Civil Procedure) Rules is wide enough to support the enforcement of 20% interest per month on a judgment debt from a date which antedates the judgment of the court until the entire sum of money owed is liquidated.
Appellant’s solicitors, Ayodele, Gafar & Co. filed an appellant’s brief in accordance with the Rules of Court on 26th June 1992. No brief of argument was filed on Respondent’s behalf. Thus, when the appeal finally came up for hearing on 14th March, 1994, and no brief was filed on his behalf by a legal practitioner representing him, only learned Senior Advocate, A. Ayodele Esq for the appellant, proferred oral argument pursuant to Order 6 Rule 8(1) of the Rules of this court to emphasize and amplify the arguments contained in their brief filed on 26th June, 1992. Learned counsel argued that their main complaint centred on the rate of interest. After referring us to page I of the Record, learned Senior Advocate drew our attention to pages 2 and 3, more particularly, to the affidavit in support and the exhibits attached thereto at pages 4-9. He thereupon submitted that nowhere did respondent claim 20% interest. He next referred us to page 33 of the Record where the trial court entered judgment for the respondent in the sum claimed. The effect of that judgment learned Senior Advocate contended, can be seen at page 35 of the Record where in paragraph 2(d) of the affidavit in support, he (respondent) had claimed that the judgment debt and costs amounted to N69,530.00. He thereafter argued that it was for this that the appellant appealed to the court below, where his main grouse is at page 55 in ground 5 and the finding of that court after giving due consideration to its complaint, is at page 58 of the Record.
Learned Senior Advocate after referring to Order 40 Rule 7 of the Bauchi State High Court Rules thereafter submitted that the court below erred when it held that the trial court followed the above Rules of court. He thereupon argued that the learned trial Judge breached the Rules in two main particulars. Firstly, he contended, it stated that the interest rate was from July, 1988, a date which antedates the date of the judgment. Secondly, he argued, it awarded 20% per month i.e. 240% per annum interest, a power it does not have. Learned Senior Advocate contended that the lower court therefore erred in law in saying that the rate of interest was correct. He referred us to the case of Reuben Ekwunife v. Wayne (W.A.) Ltd. (1989) 5 NWLR (Pt.122) 422 at 453, adding that the only reason for awarding interest, is as contained in Order 40 Rule 7 of the Bauchi State High Court Rules.
He finally urged us to allow the appeal and set aside the decision of the court below.
It is pertinent in commencing the consideration of issue one which is distilled from grounds 1 and 3 of the appeal grounds, to point out that the Respondent in the trial court, stated his claim endorsed upon his Writ of summons placed on the undefended List, as being the sum of N 16,500.00 together with 20% interest per month from July, 1988 till final payment. Nowhere in the affidavit attached to the said claim did the respondent state the basis of his claim for interest at the rate of 20% from July, 1988 until final payment. Further, not even the agreement between the parties called “Lease and Management Agreement” (Exhibit’ A’), which forms the basis of the respondent’s claim contains any clause on the question of interest.
Neither does the correspondence exchanged between the parties for which, see Exhibits B. C and D, say anything about interest. Indeed, for the 20% interestper month from July, 1988 until final payment to be justified, either the Writ of summons or the affidavit in support thereof, ought to state the premises upon which the claim for interest at the latter rate is based. In Akangbe v. W.A.P.I Co. Ltd. (1975) 1 NMLR 215 at 218, the Western State Court of Appeal held as follows:
“The last question for consideration is that relating to the award of interest from the date of the writ. It is interesting that learned counsel on both sides relied on Order 29 Rule 7 of the High Court Civil Procedure Rules. That Rule provides as follows:
“The court at the time of making any judgment or order …. may order interest at a rate not exceeding five pounds per centum per annum to be upon any judgment commencing from the date thereof or afterwards. We think that this Rule is clear the interest upon any judgment shall commence from the date of judgment or afterwards. There is no provision for (payment of interest) before the date of judgment. Now, Mr. Somolu submitted that interest was claimed on the writ. This is true but all that was claimed was “the sum of 837 Pounds 18 cent, plus interest at 4 per cent. There is no indication that interest was being claimed or was in fact claimable from the date of the writ, under Ex. B the policy relied upon as a basis for the action itself. There was no evidence led in support of such a claim if that was indeed the claim. We therefore think that the learned Judge erred in awarding interest on the award from the date of the writ instead of from the date of judgment.” (Parenthesis supplied by me).
As the case giving rise to the appeal herein was brought on the Undefended List, the provisions of Order 23 Rule 1 of the Bauchi State High Court (Civil Procedure) Rules come into play. Rule 1 relevantly states:
“Whenever application is made to a court for the issue of a Writ of Summons in respect of a claim to recover a debt or liquidated money demand and such application is supported by an affidavit setting forth the grounds upon which the claim is based and stating that in the deponent’s belief there is no defence thereto, the court shall if satisfied that there are good grounds for believing that there is no defence thereto, enter the suit for hearing in what shall he called “Undefended List” and mark the Writ of summons accordingly, and enter thereon a date for hearing suitable to the circumstance of the particular case”. (Italics mine for emphasis) As the instant case was for the recovery of a debt or liquidated money demand, it is only right that the claimant, that is the respondent herein, should set “forth the grounds upon which the claim is based” in an affidavit. Such good grounds, as herein stated, must of necessity include that on which the claim of interest is based.
Hence the court below was clearly in error when it observed in its judgment as follows:
“In the Writ of Summons can be found the following claim whereof the plaintiff claims the sum of N16,500 together with 20% interest per month from July 1988 till final payment from the defendant.” As prayed above, the learned trial Judge entered judgment “for the sum of N 16.500.00 being the balance of money the defendant failed or neglected to pay together with 20% interest per month from July, 1988 till final payment from the defendant.” As can be seen above the learned trial Judge did not deviate from the claim.
True it is that as stated by the court below the learned trial Judge did not deviate. However, the crux of the matter is whether or not there are grounds showing that the claim for 20% interest from July, 1988 is justified either in the claim or in the affidavit evidence. The best method of satisfying a court about the existence of any matter is by adducing credible, sufficient and satisfactory evidence about it. In the case in hand, there is no evidence whatsoever about the rate of interest agreed upon by the parties and the basis upon which it is computed.
It is for the absence of any rate of interest agreed as between the parties that the trial court and the court below fell into error when they awarded and affirmed the claim of the respondent respectively for 20% interest on N16,500, which is the sum claimed with effect from July, 1988 – the date when the debt accrued, until liquidation of same by the appellant. Indeed, there are legally two ways by which a claim for interest on a sum of money claimed as a debt can arise. Firstly, as of right and secondly, where there is a power conferred by statute to do so, in the exercise of the court’s discretion. Where therefore there is no evidence whatsoever as in the instant case, that the claim of interest is founded upon any rationale, e.g. merchantile custom or trade usage known to the parties the claim of interest for 20% per month from July, 1988, which ante dates the judgment passed on 27th October, 1989 by the trial court, is without foundation and ought to have been disallowed by the court below. In Reuhen Ekwunife v. Wayne (West Africa) Limited. (1989) 5 NWLR (Pt.122)422 at 445 Nnaemeka-Agu, J.S.C, stated the law on this matter as follows:-
“Interest may be claimed as a right where it is contemplated by agreement between the parties, or under a merchantile custom or under a principle of equity such as breach of a fiduciary relationship – See London. Chatham and Dover Railway v. S.E. Railway (1893) A.C. 429 at page 434. Where interest is being claimed as a matter of right, the proper practice is to claim entitlement to it on the Writ and plead facts which show such an entitlement in the statement of claim. In Nigeria. as the law is that a statement of claim supersedes the writ (for which see Udechukwu v. Okwuka (1956) 1 FSC 70 at page 71: (1956) SCNLR 189: Ekpana & Anor v. Uyo (1986) 3 NWLR (Pt.26) 63, if even it was not claimed on the writ but facts are pleaded in the statement of claim and evidence given which show entitlement thereto, the court may, if satisfied with the evidence, award interest. Adjudication on the plaintiff’s right to interest in such a case is like on any other issue in the case based on the evidence placed before the court. The evidence called at the trial in such a case will also establish the proper rate of interest and the date from which it should begin to run, whether from the accrual of the cause of action or otherwise.” (Italics is mine)
Agbaje, J.S.C. for his part, said the following at pages 453 to 454 of the Report:-
“So in my judgment for a claim for interest to property (sic) exist for determination the High Court of Plateau State, it must be stated in the endorsement of the claims to the Writ of Summons or in the statement of claim whether the claim for interest is based on contract or statute and the grounds upon which the claim is based.
A defect in this regard in the endorsement to the writ can be cured in the statement of claim since the latter supercedes the writ.
I have copied above paragraph 7 of the plaintiff’s statement of claim, where there is only a bare statement as to claim for interest in the sum of N 16,000 claimed by the plaintiff.
It is not stated whether the claim for interest is based on contract or statute. Nor are the grounds of the claim for interest shown on the statement of claim. Because of what I have just said my conclusion would be that the plaintiff has not properly raised his claim for interest in this case. at least, up to the date of judgment. So, the trial court in my judgment was wrong to have awarded interest at all on the amount claimed by the plaintiff up to the date of judgment”.
(Italics mine)
In the instant case. apart from what is borne out on the Writ of Summons and the affidavit in support in the application placed on the “Undefended List.” Which cannot be elevated to the pedestal of pleadings by the respondent, he as it were, has not properly raised his claim for interest save for his bare assertion and in his averments. The burden that lay on him as a party who asserts to prove same, has not, in my view, been fully discharged. It is for these reasons that the facts in Ekwunife’s case (supra) although not too dissimilar to the case in hand, are distinguishable in the sense that pleadings were filed in that case from the onset.
My answer to Issue One is accordingly in the negative.
In answering Issue 2 which bears relation to grounds 2 and 4 of the grounds of appeal and so emanates therefrom, it is pertinent firstly, to set out Order 40 Rule 7 of the Bauchi State High Court (Civil Procedure) Rules 1987 before I examine its scope. It provides:-
Order 40:-
(7) The Court at the time of making any judgment or Order or at any time afterwards, may direct the time within which the payment or other act is to be made or done, reckoned from the date of the judgment or order, or from other point of time, as court thinks fit, and may order interest at a rate not exceeding ten naira percent per annum to be paid upon any judgment, commencing from the date thereof or afterwards, as the case may be.”
(Italics supplied by me for emphasis).
Secondly, would a High Court seized of a case involving the award of interest sitting in Bauchi State, in the light of the above Rule, be invested with the power to make an award other than as provided by the Rule In the view of the court below, which was affirming the decision of the trial court, its answer is
“As can be seen above the learned trial Judge did not deviate from the claim. Order 40 Rule 7 of Bauchi State Rules supra relied upon by counsel in his argument is wide and gives the court discretion on interest payable in any judgment entered. I fail to see how the awarded interest by the learned trial Judge can be faulted.”
(Italics is also mine for comments).
The question which naturally arises from the Italised words above is, whether Rule 7 is as wide and at large as attributable to it and whether counsel relying on it is entitled thereby to invoke the unfettered judicial as well as the judicious exercise by a trial court of its discretion, to award such interest The answer would seem to me clear (a) that while Order 40 Rule 7 is wide and gives the court uninhibited discretion on interest payable yet, such broad powers and discretion are circumscribed by the Rule itself which stipulates” ten Naira per centum per annum” and (b) that the interest rate would have application or commence from the date of the judgment to wit: 27/10/89 in the case in hand or afterwards and not an award antedating the judgment i.e. from July, 1988 or for 20% per month, which is 24% per annum instead of 10% per annum. In the instant case, by the order made by the trial court and affirmed by the court below, the rate of interest in effect was to have been running for a period of about 15 montns before the date judgment was entered.
This is clearly wrong.
I am therefore of the view that the interest claimed and awarded by the trial court is not in accordance with the provisions of Order 40 Rule 7; nor is it within the discretionary powers granted by the Rule to the trial court. The court below was similarly in error to have confirmed the decision of the trial court.
This court in Ekwunife’s case (supra) placed in a similar situation, interpreted Order 27 Rule 8 of the Plateau State (Civil Procedure) Rules which is in Pari material with Order 40 Rule 7 of the Bauchi State High Court (Civil Procedure) Rules.
Because of the similarity of both Rules, the opinion expressed on the Plateau State Rules (ibid) by Nnaemeka-Agu, J.S.C. at page 447 of the Report, is in my view, relevant and apposite. He said:-
“Clearly this rule, like the judgment Act of 1838, and unlike the Act of 1934, deals with payment of “out-standing judgment debts.” It has nothing to do with a claim of interest as a right either under a contract or merchantile custom or a principle of equity. Like the Plateau State (Civil Procedure) Rules, 1976, is a statutory authority for a court to award interest at 10% per annum on the outstanding judgment debt. I do not therefore agree with the learned justices of the Court of Appeal that it is an authority for the court to award interest from a date antedating the judgment for the simple reason that there cannot be a judgment debt as at that date.”
In his own contribution Agbaje, J.S.C. elaborated on the matter at page 454 of the Report thus:-
“In other words, Order 27 Rule 8 provides for statutory interest on judgment debt. The said provisions are mandatory. It follows inevitably in my judgment, that the statutory interest will only begin to run from the date of the judgment. This statutory interest on judgment debt is distinct and separate from the interest which a plaintiff must include in the statement of his claim to the Writ as being based on contract or on statute as the case may be, before he can hope to recover it.
As I have just said, the statutory interest can only run from the date of judgment. In my judgment therefore, there is no jurisdiction in the High Court of Plateau State to award interest on a judgment debt under Order 27 Rule 8.”
I cannot agree more.
From the foregoing, it is clear that in the same way, there is no jurisdiction in the Bauchi State High Court to award interest on a judgment debt from a date antedating the judgment of the court under Order 40 Rule 7 of the Bauchi State High Court, (Civil Procedure) Rules 1987. The court below therefore was in error to have stated as it did, that the provisions of Order 40 Rule 7 was wide enough to provide for interest antedating the judgment at the rate of 20% per month i.e. 240% per annum – a rate of interest not provided for by the Rules of Court. The award of the rate of interest being arbitrary, unsupported by evidence and not being in accordance with the rules of court, issue 2 is accordingly resolved against the Respondent.
The result of all I have been saying is that this appeal succeeds and it is accordingly allowed. There shall be judgment for the respondent in the sum of N 16,500.00 with interest at the rate of 10 per cent per annum commencing from 27th October, 1989, the date of the judgment hereof and that shall be the judgment of the court below. Costs to the respondent are assessed at N 1,000.00 only.
Other Citation: (1994) LCN/2631(SC)
