Mobil Oil (Nigeria) Plc V. Ial 36 Inc. (2000)

LAWGLOBAL HUB Lead Judgment Report

AYOOLA, J.S.C.

There are before us an appeal by the 1st defendant in an action [suit no. FHC/L/123/92) (“the suit”)] commenced at the Federal High Court and across-appeal by the plaintiff in the said suit. The appeal and the cross-appeal are from the decision of the Court of Appeal (Oguntade. Pats-Acholonu and Aderemi. JJ.C.A.) on an appeal brought before them from the decision or the Federal High Court. For convenience, in this judgment the appellant is referred to as the 1st defendant and the respondent is referred to as the plaintiff.

In the Federal High Court the plaintiff’s claim was initially for cost of repairs of plaintiff’s aircraft which was leased to a company, called Barnax Airline Ltd, and which was damaged when the fuel truck owned by Mobil Oil (Nigeria) Plc, the 1st defendant, drove into it. By a subsequent amendment the plaintiff’s claim was for damages against the 1st defendant and another, jointly and severally, for the damage done to its aircraft by the 1st defendant’s fuel truck at the Port Harcourt International Airport. As contained in the plaintiff’s 2nd amended particulars of claim and 2nd amended statement of claim the particulars of the plaintiff’s claim were as follows:

“(i) Net amount indemnified by insurers

to Insured -IAL 361 INC.$1,441.678.84

(ii) Survey and Legal fees $200,000.00

(iii)General damages $100.000.00

$ 1, 741.678.84”

The plaintiff amended its particulars of claim and statement of claim twice; first, on 14th August, 1992 and, second, on 14th June 1994. The defendants filed their statement of defence to the first amended statement of claim on 8th October, 1992. They have not filed an amended statement of defence in response to the second amended statement of claim when by a motion on notice filed on 15th September, 1994, they applied pursuant to Order 27 rules I and 3 of the Federal High Court (Civil Procedure) Rules (“the Rules”) and the inherent jurisdiction of the court that the plaintiff’s claim against the defendants be dismissed “for want of a reasonable cause of action against the defendants and for non-compliance with S, 58 of the Insurance Decree No. 58 of 1991,” Several grounds were given for the application, but since most of them are irrelevant to the issues in this appeal, there is no need to set them out. The plaintiff raised an objection to the application on the ground that it was incompetent as the defendants had already filed their statement of defence.

Ukeje, J. before whom the application came, overruled the plaintiff’s objection. She held that the action against the 2nd defendant, an insurance company was bad for non-compliance with the mandatory provisions of section 58 of the Insurance Act since the requisite one month’s notice was not served on it prior to the action and that the action against the 1st defendant was incompetent because the plaintiff lacked “locus to institute the action.” In the event, the learned judge struck out the plaintiff from the suit, and dismissed the suit on the ground, as she put it, of “the plaintiffs lack or locus to institute or prosecute the action”.

The plaintiff appealed to the Court of Appeal contending, first that the trial judge was wrong in entertaining the demurrer application after the close of pleadings by the parties, secondly. that she was in error in relying on “evidence (or other than) the statement of claim” in determining that the plaintiff did not have a reasonable cause of action, and. thirdly, that the statement of claim disclosed a cause of action. There was no appeal from the order striking out the 2nd defendant from the suit.

Pats-Acholonu, J.C.A. who delivered the leading judgment of the Court of Appeal with which Oguntade and Aderemi. JJ.C.A., agreed. disposed of these contentions as follows. As to the first. he regarded it as indulging in mere technicalities to hold that the demurrer application was incompetent. While acknowledging that “the Supreme Court in its judgments in this sort (sic: of) procedure have held tenaciously to the view that once the statement of defence has been filed parties must lead evidence,a court may be constrained against its better judgment to blindly follow suit.”, he nevertheless went on to say that: “a party can take a point of law at any early stage it does not matter whether such recourse to wind up the case at that stage is made after the statement of claim before the defence or even after the parties close their pleadings.” Being of the further view that Order 27 of the Rules is not exhaustive, he concluded that it was not wrong for the defendant to question the competence of the plaintiff’s pleadings and that the course taken by the defendant was proper.

In regard to the second issue, the learned justice held that the plaintiff having failed to specify in what regard the trial judge had made use of facts outside the statement of claim,there was no way the court could pronounce on the plaintiffs complaint. On the third issue, he held that the action against the defendant subsisted. It is not quite clear what his pronouncement on the material question, whether there was want of reasonable cause of action, was. All he said was this: “The cause of action in the suit is the damage caused to the aeroplane but one would have to have a holistic approach to all the averments to determine whether the respondents(sic) (i.e. the plaintiff) are remotely connected with the matter and whether suit was premature.” However, the parties in this-appeal seemed to have proceeded on the footing that the court below had held that the statement of claim disclosed a reasonable cause of action.

It is clear that the threshold question that must be dealt with in this matter is that raised by the cross-appeal which is whether the defendant’s application was competent. The provisions of Order 27 of the Federal High Court (Civil Procedure) Rules are as follows.

“27(1) Where a defendant conceives that he has a good legal or equitable defence to the suit, so that even if the allegations of the plaintiff were admitted or established yet the plaintiff would not be entitled to any decree against the defendant, he may raise the defence by a motion that the suit be dismissed without any answer upon questions of fact being required by him.

(2) For the purpose of such application, the defendant shall be taken as admitting the truth of the plaintiff’s allegations, and no evidence respecting matters of fact, and no discussion of questions of fact, shall be allowed.

(3) The Court, on hearing the application, shall either dismiss the suit or order the defendant to answer the plaintiff’s allegations of fact, and shall make such order as to costs as the Court seems just.”

Order 27 of the Rules enables a defendant to make a demurrer. Demurrer has now been abolished in several jurisdictions in this country, but they have been retained by the Federal High Court at all times material to the defendant’s application. Demurrer is a longstanding procedure known to the common law for determining suits on points of law only. Plucknet explained in his Concise History of the Common Law (4th edn.) at Pp. 389 – 390 that:

“The object of pleadings is to explore the law and the facts of a case by means of the assertions and denials of the parties until an issue has been reached. If it is an issue of fact, then the parties will have ascertained a material fact which one asserts and the other denies in terms so precise that a jury will have no difficulty in hearing evidence on the matter and finding the truth of it. If it is an issue of law, the parties will have admitted the relevant facts, leaving it to the court to decide whether the law applicable to them is as the plaintiff or as the defendant maintained. This is called a “demurrer” because one of the parties has pleaded that he is entitled to succeed on the facts admitted by the other, and is willing to rest (demourer) at that point. If his opponent does the same, then demurer is joined, the pleadings are at an end, and the court hears the argument on the point of law and decides it”

None will now suggest that a demurrer in terms of Order 27 rules (1) – (3) now brings the pleadings to an end. Demurrer in terms of the Rules, is raised by motion and it is if the plea fails that the defendant is called upon to plead to the facts. The assumption that underlies the provisions of 0.27 r.3 that upon failure of a demurrer, the court shall “order the defendant to answer the plaintiff’s allegation of fact”, is that the defendant had not already done so by filing a statement of defence. It was from this assumption and the nature of demurrer as a threshold plea that the courts are reinforced in establishing the principle that after the defendant had already answered the allegations or fact by delivering a defence, he could no more revert to a threshold plea and raise a demurrer. In this jurisdiction that has been a longstanding interpretation of the relevant provisions of the Rules.

In The Gold Coast and Ashanti Electric Power Development Corporation v. The Attorney General of the Gold Coast (1937) 3 WACA 215, after the pleadings have been closed. by the filing or the statement of claim by the plaintiff and a defence by the defendant and a reply by the plaintiff, the defendant made an application by way of demurrer. The West African Court of Appeal held that the application was too late. In Aina v. Trustees Nigeria Railway Corporation Pensions Fund [1970] (vol. 6) NSCC 225, it was held that the time to take a demurrer is before the defendant pleads, Lewis, J.S.C, delivering the judgment of this Court in that case said (at P. 228):

“Once a person has pleaded however the time for demurrer is passed and he cannot then, in our view, under the rules of court seek to raise by way of a preliminary objection what he should have done earlier under the rules of court by demurrer.”

In the recent case of Ege Shipping & Trading Industries v. Tigris International Corporation [1999] 14NWLR (Part 637) 70, this court held (per Ogundare J.S.C, following Odive v. Obor (1974) SC 23, 1974 NSCC 103) that an application to dismiss under Order 27 of the Rules must be made before issue is joined.

Undaunted by the weight of authority against the position he takes, Counsel for the defendants pressed on us the argument that the provisions of Order 27 are permissive and not mandatory. That contention may be correct only to the extent that there is nothing in Order 27 which makes it mandatory for a defendant to proceed by demurrer in all cases in which he conceives that there is a point of law which, raised as a defence, may dispose of the case even if all allegations of fact are admitted or deemed admitted. Order 31 rule 19 of the Rules which enables a party to apply to the court to strike out any pleading on the ground, inter alia, that it discloses no cause of action, to some extent, offers an alternative to demurrer and gives the defendant a somewhat wider latitude as to the time in the proceedings when he could make the application. The defendant has an option to make a demurrer in appropriate cases. He does not have the option, as the law stands at present, if he chooses to come by way of demurrer, to do so after issues have been joined by delivery of defence. Both in the judgment of the court below and in the defendant’s counsel’s brief before us, there has been a failure to distinguish between cases decided on rules of court in which proceedings in lieu of demurrer have been substituted for demurrer which has been abolished where those rules apply. Cases such as Onibudo v. Akibu (1982) NSCC (vol. 13) 199, and Fadare v. Attorney General of Oyo State (1982) 4 SC 1 are to be read with this distinction in mind. A party who chooses to proceed by way of demurrer cannot superimpose on it a procedure, of his own making, and insist on making his application after issues have already been joined.

However, counsel for the 1st defendant has argued that since the defendant has not filed an amended defence to the 2nd amended statement or claim, he could make a demurrer, before delivery of an amended statement of defence, since no issue would have been joined on the amended statement of claim in such circumstances. It is an argument which cannot be brushed aside without some consideration.

It does appear to me that to deprive a party of the opportunity of having the case disposed of on a demurrer after the plaintiff had, by amendment, substituted a statement or claim which does not disclose a reasonable cause of action for one which does and to which the defendant could not reasonably raise a demurrer, cannot be supported either by principle or, by reason or, even, by common fairness. An amended pleading speaks from the date or the original pleading: Rotimi v. Macgregor (1974) SC 133; Government of the Mid-west v. Mid-motors (1977) 11 SC 43, Upon an amendment of the statement of claim, the defendant is at liberty to amend his statement of defence, without leave of the court in so far only as is necessary to meet the facts introduced by the amendment. This, I venture to think, translates to a right in the defendant to plead afresh to the case made on the amended pleading of the plaintiff. Where, of Course the defendant fails to amend his defence and his original defence thereby stands as the defence to the amended statement of claim, the parties are brought to an issue on the amended statement of claim. Flowing from these principles of pleadings one may be permitted to make certain propositions that would throw some light on the defendant’s counsel’s submissions. Where the time limited for delivering an amended statement of defence in response to the amendments in the statement of claim had elapsed and no consequential amendment has been made to the statement of defence, issues are deemed joined and it would be too late to raise a demurrer. Where such time has not elapsed, it should be competent for the defendant to raise demurrer in the normal way based on the inadequacy of the amended Statement of claim.In the present case although the 2nd statement of claim was filed on 14th June. 1994, the application by the defendant was not brought until 15th September, 1994. In these circumstances it is not far-fetched to deem that issues have already been joined on the pleadings as they stood. In this wise, it was too late for the defendant to raise a demurrer. It is difficult to resist the lurking impression that counsel for the defendant may have pursued the latter part of his argument as an after-thought having regard to the manner in which the prayer in the application was couched and the facts deposed to in the affidavit in support of the application which all suggested that the defendant was not contemplating any order in terms of Order27 rule 3 should the application fail.

Be that as it may. I come to the conclusion that the application for demurrer in this case is incompetent. The court below should have so held and struck it out. In the result, since the cross-appeal has succeeded, it is unnecessary to determine the other issues raised in the cross-appeal and in the main appeal. The defendants being at liberty if so advised, to raise those points they had set out to canvass by their demurrer as points of law by their pleading, if so amended, it is inexpedient to pronounce on those points. It suffices for the purposes of these appeal and cross-appeal to order as follows: I allow the cross-appeal and set aside (i) the ruling of the High Court, and (ii) the judgment of the Court of Appeal. The 1st defendant’s appeal, being from a ruling in proceedings which are incompetent, is struck out. I order that N 10.000 costs be paid by the defendants to the plaintiff.

SC.106/1999