Pan Atlantic Shipping & Transport Agencies Ltd. V. Rhein Mass Und See Schif Farts Kontor Gmbh (1997)

LAWGLOBAL HUB Lead Judgment Report

O. ADIO, J.S.C.

The respondent was a shipping company which was registered in West Germany. It sued the appellant in the High Court, Lagos, for Deutsche Marks (DM) 2, 799,754.83 allegedly due on account of monies had and received by the appellant to the respondent’s use.

On the 8th February, 1988, the appellant brought an application asking that the suit be dismissed on the ground that the respondent wanted payment of a debt in a foreign currency without compliance with exchange control regulations. The application was refused. There was a statement of defence filed by the appellant in anticipation of an unfavourable ruling by the learned trial Judge.

Consequently, the respondent subsequently brought a motion praying the court to strike out the appellant’s statement of defence on the ground that it did not disclose a reasonable answer to the respondent’s claim and that judgment should be summarily entered for the respondent. The appellant filed an application for leave to appeal against the ruling on the application to dismiss the suit. The application by the respondent to strike out the statement of defence for not disclosing a reasonable answer and enter summary judgment for the respondent was heard on the same day with the appellant’s application for leave to appeal. The application for leave to appeal was refused and the application of the respondent for summary judgment was granted.

Dissatisfied with the judgment of the learned trial Judge, the appellant lodged an appeal against it to the Court of Appeal. In dismissing the appellant’s appeal, the court below held that the only defence raised in the appellant’s statement of defence was on the question of illegality which had earlier been determined as a preliminary objection by the learned trial Judge. The court also held that the word “disintegrated” used by the appellant in its statement of defence did not put the existence of the respondent in issue. The appellant was dissatisfied with the judgment of the court below and has lodged a further appeal to this court.

In accordance with the rules of this court, the parties filed and exchanged briefs. The one and only main issue canvassed in the briefs filed by the parties was as follows:-

“Whether the Court of Appeal was right to affirm the judgment of the learned Judge entering summary judgment under Order 22 rule 4 ofthe High Court of Lagos (Civil Procedure) Rules, 1972 in favour of the respondent.”

It is possible under the procedure set out in Order 22 of the High Court of Lagos (Civil Procedure) Rules, 1972, for a plaintiff to obtain summary judgment without the necessity for a full hearing in court, as it is generally or ordinarily always the case. A plaintiff, pursuant to the procedure, applies that judgment be entered summarily in his favour and, for that purpose, he supports his application with a verifying affidavit, stating his belief, that though the defendant has filed a statement of defence, the statement of defence discloses no reasonable answer to the plaintiff’s claim. The crucial issue in the circumstances of this case, was whether the statement of defence filed by the appellant disclosed a reasonable answer to the respondent’s claim. The court below gave due consideration to that aspect of the matter and came to the conclusion that after the issue of illegality raised by the appellant as a preliminary objection, in respect of which there was a ruling against the appellant, there was nothing in the pleading of the appellant which could be regarded as an answer to the respondent’s claim. The court below stated, inter alia, as follows:-

“The real crux of the matter in this case is whether there is anything left in the pleading of the defendant after the issue of illegality had been disposed of, that could be regarded as an answer to the plaintiff’s claim. Where the defendant’s statement of defence amounts to an admission or does not contain a denial or any averment that can be accepted as a denial of the plaintiff’s claim, it may seem illogical to proceed to inquire whether what is an admission and is by that reason no answer at all, is a reasonable answer ………………………………In short, the defendant’s contention in paragraph 6 is that it was not indebted to the plaintiff because of the illegality of the transaction. As has been said, that issue had already been taken as preliminary point at the instance of the defendant and had been resolved against it. If the defendant had wanted to deny specifically that it was indebted to the plaintiff that ought to have been so stated and the illegality of the transaction pleaded in the alternative and not as a reason for a general denial of illegality.”

The submission made for the appellant was that the statement of defence filed for the appellant disclosed an answer to the respondent’s claim. The contention of the respondent was that the court below was right in holding that the statement of defence did not contain a reasonable answer to the respondent’s claim.

In paragraph 2 of page 5 of the appellant’s brief is the following statement:-

“For their part, the appellant denied that the respondent was entitled as claimed because:

(a) Rhein Mass Und See Schiffarts Kontor Gmbh (the respondent) had “disintegrated” and was no longer in existence.

(b) It was not indebted to the respondent in the sum claimed or any sum at all.