Joe Golday Co. Limited & Ors V Co-operative Development Bank Plc (2003)

LAWGLOBAL HUB Lead Judgment Report

O. UWAIFO, JSC

The plaintiff’s statement of claim in this case is by any standard prolix. There are ostensibly 35 paragraphs but in effect there are in all 115 paragraphs. This is because paragraph 11 has 60 sub-paragraphs which are nearly as wordy as the main paragraphs; and paragraph 12 which deals with particulars of “false, fraudulent or excessive charges/debts on 2nd plaintiff’s account” has 23 sub-paragraphs equally copious in statement. The statement of defence together with counterclaim contains 48 paragraphs and the reply to it covers 15 paragraphs. Without a doubt, enormous efforts were expended on both sides. But from my appreciation, of the available facts and circumstances, it seems to me that the litigation is founded on a charade of grievances which the 6th plaintiff made the cause of his lost fortune. In my view, the litigation by the plaintiffs was not worth the trouble at all.

The defendant is a commercial bank. It has branches in Lagos at Broad Street; in Uyo at Oron Road; and in Calabar at Calabar Road. The 1st to 4th plaintiffs are companies incorporated in Nigeria of which the 6th plaintiff is the Chairman/Chief Executive. The 1st plaintiff maintained current accounts with the defendant bank at the Calabar, the Broad Street Lagos and the Oron Road Uyo branches. The 2nd plaintiff maintained a current account at the defendant’s Broad Street Lagos branch, the 3rd plaintiff at the Idumota Street branch and the 4th plaintiff also at the Idumota Street Lagos branch. The 5th plaintiff is the wife of the 6th plaintiff although she appears to bear her maiden name in this case. She is a director in the 1st and 2nd plaintiff companies. At all times material to this case, the 6th plaintiff was a director in the defendant bank and a shareholder of the bank having 4, 468, 318 shares. His wife is or was a shareholder of the bank having 3, 489, 743 shares. The

6th plaintiff, apart from being a director in the defendant bank, was the Chairman of the Finance Committee of the Board of Directors of the defendant bank.

In the statement of defence, the responsibilities of the Committee were stated as-

(a) to screen and approve all credit proposals within its approval limit with the appropriate advice of the Board of Directors;

(b) the regular review of both performing and non-performing loans in the defendant bank;

(c) to determine the rate of interest, commission, and penalties paid on loans/advance.

In the reply to the statement of defence, the plaintiff’s admitted (a) and (b) above. There was a further averment in the statement of defence (para.5) that “this Committee is the most important and powerful in the bank.” This was not specifically denied but no reference was made to the paragraph in the reply. It is by rules of pleadings taken to have been admitted: see Olale V. Ekwelendu (1989) 4 NWLR (pt. 115) 326; Adeleke V. Aserifa (1990) 3 NWLR (pt. 136) 94.

It was in these circumstances the 1st to 4th plaintiffs became indebted to the tune of N64,043,389.88 as at 31 December, 1995 arising from (a) the overdrawn cheques at the Calabar branch; (b) the value of foreign exchange bids by the plaintiffs and their associated companies in Lagos branches totaling N41,457,176.21 which was untilised by the plaintiffs without matching funds in their accounts- the allegation being that the 6th plaintiff facilitated this by manoeuvering the movement of the defendant bank’s funds to cover his companies’ fundlessness and the resulting indebtedness; (c) other miscellaneous loans which the 1st plaintiff enjoyed by mortgage security up to a limit of N5,000,000.00.

It was part of the aspect of the movement of the defendant’s funds, as alleged by the defendant, that the total sum of N127,623,809.69 was systematically credited and correspondingly debited into the 1st plaintiff’s account at the Broad Street Lagos branch as follows:

Credit (a) 2/5/95 – N17,732,084.28

(b) 31/5/95 -MN16,407,930.83

(c) 30/6/95 – N14,974,222.18