Nigeria Produce Marketing Company Limited V. Companie Noga D’importation Et D’exportation Societe Anonyme (1971)

LawGlobal-Hub Lead Judgment Report

LEWIS, J.S.C. 

In Suit No. LD/98/68 in the Lagos High Court the plaintiffs’ writ read:

“The plaintiffs’ claim against the defendants is for the sum of 61,209pounds.13s.10d being amount due from the defendants to the plaintiffs as at January 31st, 1968 for breach of contract arising from the fact that the defendants used (Nigerian pounds) as money of account in calculating what was due and payable to them for the price of produce bought by the plaintiffs when, by the contract binding between the parties, sterling (English pounds) should have been used as money of account.”

The return date fixed by Adebiyi, Ag. J. (as he then was) was March 18th, 1968.

On that date before Adebiyi, Ag. J. the court record reads:

“Chief F.A.A Williams for the Plaintiffs. Mr. King for Mr. Lardner for the defendants. Chief Williams: Pleadings; 30 days for statement of claim.

Court: Pleadings ordered, the plaintiffs to file statement of claim within 30 days and the defendants to file statement of defence within 30 days of service of the statement of claim. Return date May 27th, 1968.”

The plaintiffs duly filed their statement of claim on April 17th, 1968, but on May 16th, 1968, the defendants filed a motion asking –

”for an order staying all further proceedings in this suit pending a reference and determination by arbitration of the claims herein of the plaintiffs as provided by the conditions of sale of the Seed, Oil, Cake and General Produce Association.”

This motion came on for hearing before Adedipe, J. who in June 17th, 1968 gave his ruling in which he dismissed the motion, as he held that the defendants had taken a step in the proceedings and so were debarred from asking for a stay in order to refer the matter to arbitrationn by virtue of s.5 of the Arbitration Act (cap. 13). The learned trial Judge also ordered the defendants to file a statement of defence within 30 days of the ruling. Against that decision the defendants have appealed to this court.

The appeal raises an issue within a very narrow compass but it is of considerable procedural importance, and it is whether in the circumstances of this case a step has been taken by the defendants in the proceedings so as to debar them from applying for a stay of the proceedings inorder to refer the matter to arbitration within the meaning of s.5 of the Arbitration Act, which reads:

“If any party to a submission, or any person claiming through or under him, commences any legal proceedings in any court against any other party to the submission, or any other person claiming through or under him, in respect of any matter agreed to be referred, any party to such legal proceedings may at any time after appearance, and before delivering any pleadings or taking any other steps in the proceedings, apply to that court to stay the proceedings, and that court if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the submission, and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, may make an order staying the proceedings.”

The section is in all material particulars identical with s.4 of the English Arbitration Act, 1889 (which replaced s.11 of the Common Law Procedure Act, 1854) and about which there have been a series of English decisions, to some of which we shall refer later in this judgment.

Mr. Lardner for the appellants submitted that all that happened according to the record on March 18th, 1968 was that the defendants, through their counsel Mr. King (holding Mr. Lardner’s brief), entered an appearance to the writ so as to avoid judgment being given against them. Chief Williams, counsel for the plaintiffs, then asked for pleadings and for 30 days within which to file the statement of claim. Whereupon the learned trial Judge, without calling upon counsel for the defendants, ordered the plaintiffs to file the statement of claim within 30 days and ordered the defendants to file their statement of defence within 30 days of being served with the plaintiffs’ statement of claim. It was accordingly Mr. Lardner’s submission that counsel for the defendants took no action whatsoever on March 18th 1968, and that therefore the defendants had taken no step in the proceedings. Mr. Lardner conceded that, on the authorities, if the defendants had through their counsel asked for time within which to file the statement of defence then they would have taken a step in the proceedings, but as they did not so ask and the court acted suo motu they were not so bound. He relied on O. XXXII, r. 1 of the former Supreme Court (Civil Procedure) Rules (Laws of Nigeria, 1948, cap. 211) applicable in the High Court of Lagos State, which reads:

“In all suits written pleadings shall be ordered by the court unless the court considers in any particular suit that written pleadings are unnecessary” and submitted that the effect was for the court to act suo motu. He also relied on Ives & Barker v. Williams, and in particular on the words of Lindley, L.J. when he said ([1894] 2 Ch. at 484; 70 L.T. at 676-677):

”The authorities show that a step in the proceedings means something in the nature of an application to the Court, and not mere talk between solicitors or solicitors’ clerks, nor the writing of letters, but the taking of some step, such as taking out a summons or something of that kind, which is, in the technical sense, a step in the proceedings”

and as showing that for a defendant to apply for a statement of claim to be delivered so that he might more clearly know the claim he had to meet was held by the Court of Appeal not to be a step in the proceedings. He further referred us to Pitchers Ltd. v. Plaza (Queensbury) Ltd. (1940) 1 AE.R. 151; (1939) 162 L.T. 213 where a defendant opposed a summons for leave to sign final judgment by filing an affidavit, as showing, in his submission, that it was only when such an active step was taken that a defendant was precluded from asking for a stay of proceedings and a reference to arbitration, having taken a step in the proceedings.

Chief Williams, for the respondents, for his part submitted that whilst it was clear that Mr. Lardner rightly conceded that a step would have been taken if the defendants had applied for time within which to file a statement of defence, as that was taking an affirmative step, nonetheless the defendants could also be said to have taken a step in the proceedings by acquiescence, because accepting the record as it stood the defendants by their counsel did not object to the order of the Judge that they deliver a statement of defence within 30 days of service on them of the statement of claim. He further submitted that in fact it was the practice in the Lagos High Court for each counsel to apply to the court for time for his own pleadings, but in any case even if the court did act suo motu, the defendants’ counsel should have at once raised objection, as by so doing he could have had the order altered. He referred us to a decision in the Lagos High Court, Hastings v. Nigerian Railway Corp. (1964) Lag. LR. 135 and to County Theatres & Hotels Ltd. v. Knowles (1902) 1 K.B. 480; (1902) 71 L.J-KB. 351.

We agree with both counsels that it is clear that if the defendants had asked for time within which to file a statement of defence they would undoubtedly have been taking a step in the proceedings: see Smith & Co. v. British Marine Mut. Ins. Assn. (1883) W.N. 176; Bitt. Rep. in Ch. 215 and Steven v. Buncle (1902) W.N. 44.

Equally it seems to us that Lane v, Herman (1939) 3 AE.R. 353; (1939) 161 L.T. 106 shows that it must be a step in court to debar the defendant, as their letters from the defendant’s solicitor to the plaintiff’s solicitor asking whether they would extend time for delivering a defence were held not to be a step in the proceedings (per Luxmoore, L.J. and Humphreys, J. [1939] 3 All E.R. at 355,356; 161 L.T. at 107).

The basis for a step was further indicated by Ridley, J. in Austin & Whiteley Ltd. v. S. Bowley & Son when he said [(1913) 108 L.T. at 921):

“In my opinion what is intended by a step in the proceedings is some step which indicates an intention on the part of a party to the proceedings that he desires that the action should proceed and has no desire that the matter should be referred to arbitration. I cannot see how in common sense the words of section 4 can apply to something which a defendant has to do in order to save himself from having execution levied upon his goods. That is all the defendants desired to do here when they gave notice to defend.”

We are not prepared to go into what is or is not the practice in the High Court, especially as this may well differ from one Judge to another, as clearly O. XXXII, r.1 of the Supreme Court (Civil Procedure) Rules applicable in the Lagos High Court contemplates the court giving directions. More important is the fact that on an appeal we act upon the record before us and, no reason having been advanced why we should do otherwise, we are not prepared to go behind what is recorded as having taken place. This we have already set out and there is nothing in that passage of the record to show that counsel for the defendants in fact said anything.

The issue must therefore be whether the appearance of counsel and his silence in the circumstances can be taken to be a step in the proceedings. County Theatres & Hotels Ltd. v. Knowles (1902) 1 K.B. 480; (1902) 71 L.J.K.B. 351 shows that acquiescence by the defendant in the making of an order to which he might have objected can be said to be a step in the proceedings as Collins, M.R. said [1902] 1 K.B. at 481-482; 71 L.J.K.B. at 352: 15

“…..This case is clear upon principle. That which Order XXX has done is to enable the parties to obtain on one summons an order, with respect to all interlocutory proceedings to be taken in the action, which they might, before this rule took effect, have obtained on several distinct summonses. The parties appear before the master with, as it were, a blank sheet on which he may make this inclusive order. When he does so, with the acquiescence of both parties, there is just as much a step in the proceedings by each of the parties as if an order had been made on his separate application. The defendant might have objected to the making of the order on the ground of the agreement to refer differences; but he did not do so, and is not in a position to ask for a stay under s. 4 of the Arbitration Act. The appeal must be dismissed.”

This was followed in Richardson v. Le Maitre, where Swinfen Eady, J. said ([1903] 2 Ch. at 224-225; 72 L.J. Ch. at 780-781):

“What has taken place The defendant entered an appearance, the plaintiff took out the usual summons for directions. The defendant’s solicitor attended the summons before the master. There is some dispute about what took place but the account of the defendant’s own solicitor is: ‘I attended, on behalf of the defendant, the summons for directions in this action before the master. The master simply gave the usual direction on the Chancery side upon such summons, viz., for delivery of pleadings, fixing the place of trial and the time for delivery of such pleadings On behalf of the defendant I did not press for delivery of pleadings, or any other matter arising on the summons for directions; knowing the practice to be as aforesaid, I simply left the master to deal with same.’ And the account of the defendant’s solicitor, leaving out all he says about the point which is in dispute, is: ‘The master, with the assent of both parties, gave the usual directions for delivery of pleadings, and for the action to be tried in Middlesex.’

It is contended that the defendant has taken no step in the proceedings; but in my opinion the case is covered by the decision of the Court of Appeal in County Theatres and Hotels, Limited v. Knowles ([1902] 1 K.B. 480.) …..

The only distinction counsel attempted to draw between that case and the present one was that an order was made for mutual discovery. Here an order was made that the defendant should have fourteen days for putting in his defence, thus giving him four days beyond the time fixed by Order XXI, r. 6. In my opinion, the details of the order made on a summons for directions do not make any difference. I should be frittering away the decision of the Court of Appeal if I held that it applied only to orders exactly similar to the one before them. Their decision is based on wider grounds. Attending this general summons for directions without objection, and without asking for an adjournment, in order to make an application to stay the action, is taking a step 5 in the proceedings within the meaning of s. 4 of the Arbitration Act, 1889. The defendant’s motion must be refused with costs.”

We think Taylor, C.J. was quite right when in Hastings v. Nigerian Railway Corp. he said {1964 Lag. L.A. at 137}:

“Parties have the right to object to pleadings being ordered, if they feel that it is not a case for pleadings or if they feel that they have a preliminary objection such as the one the subject matter of the motion before me.”

It follows that in our view the defendants’ counsel was not solely appearing here in answer to the writ filed but could here have raised immediately, when the Judge ordered that the defendants do file a statement of defence within 30 days of receiving the statement of claim, objection to being so ordered as he wished to file an application to stay the proceedings in order that they be referred to arbitration.

As he did not do so, but tacitly acquiesced, in the order, we think Adedipe, J. came to the right conclusion, though for other reasons, that the defendants had taken a step in the proceedings and so were debarred from asking for the stay of proceedings that they sought in their motion.

The appeal is accordingly dismissed.

SC.36/1969