Rhor and Lue Nigeria Ltd. & Anor V. Bank of the North Limited (2007)
LawGlobal-Hub Lead Judgment Report
MARY U. PETER-ODILI, J.C.A.
The Appellants as defendants were sued by the Respondent who was plaintiff before the Abuja High Court of justice for a liquidated money demand under the undefended list on the 24th September 2002. Judgment was entered on the 16th June 2005 in favour of the Respondent, after striking out the name of the 2nd Defendant before the lower court. The Appellants not satisfied with the judgment of the Court have appealed to the Court of Appeal.
The Respondent through a motion on notice seeking leave cross-appealed.
FACTS BRIEFLY STATE
The Appellants on the 4th day of July, 2001 applied for a loan of N19 million from the Respondent sequel to the discussion they had with the Abuja Branch Manager of the Respondent. As a result of the discussion, Exhibit AEE2 attached to the Respondent’s affidavit in support of the writ of summons was written after the expiration of the said facility, the Respondent instituted this action under the undefended list. The Appellants filed their respective notices of intention to defend and affidavits in support. The Respondent filed a counter-affidavit to the Appellant’s notice of intention to defend. Both parties addressed the court based on their respective affidavits and written addresses filed. The trial court gave its considered ruling on the 16th day of June 2005 by refusing the appellant leave to defend the matter on the merit, thereafter judgment was entered in favour of the Respondent as per their claim.
The Appellants not satisfied with the ruling and judgment of the trial court, have appealed to this court by filing four grounds of appeal.
Learned counsel for the Appellants on their behalf filed on 18/1/06 an Appellants’ Brief and raised three questions which are:-
- Whether the Appellants’ disclosed a defence on the merits that car warrant the matter be transferred to the general cause list or to be heard on the merits (Grounds 1, 2 and 3of the Notice of Appeal).
- Whether the Respondent is right in charging interest after the exPir1tion of the tenure of the facility (Ground 4)
- Whether the Honourable Court has the jurisdiction to entertain and assess the claim on interest in an undefended Suit (Ground 4).
The Respondent by a Brief titled RESPONDENT’S BRIEF AND CROSS APPELLANTS BRIEF OF ARGUMENT which was filed on 4/4/06, formulated three issues which are the following:-
(a) Whether the Appellants, have raised triable issues to warrant the transfer of this case to the general cause list.
(b) Whether the trial court was right in awarding judgment in favour of the Respondent despite the letter of domiciliation Exhibit CA1.
(c) Whether the trial court was right in awarding judgment to the Respondent under the undefended list despite the Respondents charging of interest after the tenure of loan.
The Respondent however had raised a Preliminary Objection to Issue 3 of the Appellant’s Brief which deals with the issue of the lower court assessing interest.
Learned counsel for the Respondent said from the grounds of appeal filed by the Appellants the issue of the lower court assessing interest never arose. That Issue 3 of the Appellants therefore did not emanate from the Grounds of Appeal and so go to no issue. He cited Kokoro-Owo & Ors vs. Lagos State Government & Ors (2001) 6 NSCQR 615 at 617; Ogunjumo vs. Ademola (1995) 4 NWLR (Pt. 389) 254.
Learned counsel for the Respondent stated on that Issue No 3 of the appellants’ Brief of argument should be struck out. He stated further that in the case they are overruled that it is submitted that the lower court did not assess interest in this case. That in determining this issue, it is important to note the following:
(a) That both parties agreed that undefended list procedure is used for liquidated money demand.
(b) The Appellants are not contesting the fact that the Respondent pleaded and claimed interest in the lower court.
(c) The Appellants in the notice of intention to defend never challenged interest charged beyond the fact that interest should terminate after the 30 days tenure of the loan.
Learned counsel for the Respondent went on to say that since the said interest was claimer and the Appellants did not challenge the correctness of the interest Claimed nor are they challenging the fact that interest was claimed, the awarding of the interest claimed. That awarding interest is different from assessing interest. He cited the case of Balogun vs. Oshunkoya (1992) 3 NWLR (Pt. 230) 827 to the effect that parties are bound by their pleadings and evidence led which is not pleaded go to no issue.
Learned counsel further contended that Respondent attached to his claim for interest Exhibit AEE2 (page 8 of the records) which show inter alia that interest was at the rate of 26% per annum. That the Respondent equally attached to his claim Exhibit AEE5 (page 5 of the records) to the effect that the Appellant wrote to AG Leventis Motors admitting the fact that interest was charged at the rate of 32% per annum. That the Appellant never challenged the interest beyond his claim that interest should terminate after 30 days.
I would recant Ground four of the grounds of appeal in answer to this preliminary objection and its is:
The trial Judge erred in law and misdirected himself when he awarded the plaintiff’s claim with the contested cumulative interest.
PARTICULARS
(a) Interests are not charged on a facility after the expiration of the facility.
(b) The amount on the Plaintiff’s principal claim includes the loaned sum and interest charged after the expiration.
(c) The facility granted to the appellant expired after thirty (30) days and as such interest can only be charged for that thirty (30) days tenure and not more.
On this point concerning interests on which this preliminary objection is hinged it is necessary to restate the principle that banks are bound to charge interest rates fixed from time to time by the Central Bank of Nigeria and in that the banks have no discretion. I rely on Kenfrant Nigeria Limited vs.UBN Plc (2002) 8 NWLR (Pt. 789) 46; Union Bank of Nigeria Limited vs. Ozigi (1994) 3 NWLR (Pt. 333) 385,
The issue above needed to be made clear in respect to the position of banks in matters concerning the fixing of interest rates. However with regard to courts when the issue of what interest to fix during the adjudication of matters where interests would be considered, a different scenario emerges.
In determining the rate of interest to a successful party, the court must, in the absence of a statutory rate or maxima, take into consideration the prevailing economic situation vis-a-vis the facts of the case while current banking rates, particularly those fixed by the Central Bank are useful guide, they remain only guides. They cannot be barriers. One can step over guides without causing any harm.
Therefore the basic guiding principles should be the prevailing economic situation in relation to the peculiar facts of the case.
Per Tabi JCA (as he then was) in R.E.A.N. vs. Aswani iles Ltd (1991) 2 NWLR (pt. 176) k39 at 671 paras A-B.
A court has a discretionary power to award interest in deserving cases as it thinks fit, that power like in all other discretionary exercises of power must be exercised judicially and judiciously. See Business Computers Ltd vs.. Anglo African Leasing Ltd (1977) 1 WLR (Pt. 578); Tende v. Attorney -General of the Federation (1989) 1 NWLR (pt. 71) 506; U.B.A vs. G.M.B.H (1989) 3 NWLR (pt 110) 374.
The whole idea of interest is to compensate the successful party who has been kept out of funds to which he legitimately owns. See Cromer vs. General Carriers (1974) 1 WLR 341.
Bearing the principles above in mind and the relevant ground of appeal which I have stated above, the particulars of the ground four inclusive, it is without court that this preliminary objection which is a fanciful luxury cannot be sustained. The preliminary objection is I therefore dismissed for lacking in merit.
For ease of reference II shall make use of the Issues as captured by the Appellants’ Brief.
ISSUE NO 1
Learned counsel for the Appellants, Mr. Zibiri stated that the undefended list procedure is a special procedure meant for recovery of debt or liquidated money demand. That it is brought by a Plaintiff with a belief that the Defendant does not have a defence to the action. That it is meant for a quicker dispensation of justice. He stated on that for the matter to be transferred to the general cause list, the Defendant must disclose a defence on the merit or that there are disputable or contestable issues which need further explanation from the plaintiff.
Learned counsel said that when in the instant case the Appellants filed their Notice of intention to defend and affidavit in support before the lower court, the Respondent filed a counter affidavit to the affidavit in support of the notice of intention to defend. That mere filing of the counter affidavit by the Respondent, it shows that there are triable issues to be determined by the court after hearing the parties. He stated on that no single paragraph of the supporting affidavit in support of the writ was used by the trial court, I rather it was the counter-affidavit filed by the Respondent that the trial court used in arriving at its judgment.
It was further submitted that the provisions of order 23 of the Federal High Court Rules did not give room for filing of further and better affidavit nor counter affidavit to the affidavit in support of the notice of intention to defend. Therefore that the filing of the counter affidavit by the Respondent in the instant case before the lower court is not known under the Order 23 of the Rules of Court.
Learned counsel for the Appellant said even if the court were to compare the affidavits and counter-affidavit it would come to the decision that there are triable issues from the said affidavits. That the need for clarification demanded that oral evidence was a necessity in answer to the dispute over what the intention of the parties were in the course of the transaction subject of the suit. He cited the case of Savannah Bank (Nig.) Limited v. Salami (1996) NWLR (Pt. 465) 131 at 139.
Learned counsel for the Appellants further submitted that in determining whether an affidavit disclosed a defence on the merit, the court is only concern with the averments contained in the affidavit in support of the notice of intention to defend. He cited the case of SCOA Nigeria Plc vs. Danbatta (2003) FWLR (Pt. 179) 1287 G – H.
Mr. Zibiri of counsel said that it is clear that this is a proper case that should have been transferred to the general cause list, since the affidavit evidence disclosed a defence on the merit. He cited Haido v. Usman (2003) FWLR (Pt.166) 640 at 657 A – E.
Learned counsel for the Appellants said that by filing of the counter-affidavit to counter the affidavit in support of the notice of intention to defend, the trial court should have transferred the case to the general cause list for it to be heard on the merit. He referred to Yahaya v. Waje Community Bank Ltd (2001) FWLR (pt. 46) 804 at 814; Mat Holdings Ltd v. UBA Plc (2003) 2 NWLR (pt. 803) 71.
In response learned counsel for the Respondent submitted that the mere filing of counter or further and better affidavit is not enough to warrant a transfer of this case to the General cause List. That the court below was duty bound to look at the counter affidavit and to decide whether or not the counter affidavit introduced any new issue.
That all the issues raised in the counter affidavit could have conveniently come in the Respondent’s written address in the lower court but for purposes of clarity and for the avoidance of doubt the Respondent’s counsel decided to file a counter affidavit. Also that the counter affidavit was merely intended to avoid a situation where the Respondent will be deemed to have admitted the averments. He stated that Order 21(3) of the Rules of the Federal High Court was the umbrella under which the further affidavit or counter affidavit can take shelter. He cited Ibuluya v. Nnajiofor cited in page 297 of “The Law of Affidavit Evidence by Andrew Chukwuemerie.
Learned counsel said what the court is to look out for is not the number of affidavits filed. The court is not even to look out for any conflict in affidavit, rather the conflict must be on material issues. He cited Jos North Local Government vs. Daniyan (2002) FWLR (pt. 21), 872 at 876.
Learned counsel for the Respondent said assuming without conceding that it was wrong to file a counter affidavit it must be remembered that technicalities must not be allowed to defeat the course of justice. He referred to Nishizawa Ltd. vs. Strichand N. Jethwani (2001) WRN 153 at 157.
The supporting affidavit of the claim was deposed to by Mr. Sunday Odeh, Litigation Secretary in the chambers of the counsel to Plaintiff/Respondent and he averred inter alia in paragraph 3
(b) The first defendant is a customer to the Plaintiff and has an account with her Garki Branch.
(c) That the 2nd defendant is the managing Director and Chief Executive of the 1st Defendant and he single handled operates the 1st Defendant’s account
(d) That on the 4th July, 2001 the defendants applied for a loan of Nineteen million (N19,000,000.00) to enable them supply two NOS. MB 1418 Tippers to F.C.T. Abuja. A copy of the letter of application dated 4th July, 2001 is hereby attached and marked Exhibit AEE1.
(e) That the said facility was granted to the Defendants for a period of 30 days. A copy of the letter of grant dated 19th July, 2001 is hereby attached and marked Exhibit AEE2.
In the Affidavit in support of the Notice of Intention to defend the defendant averred in paragraph 4:
(a) That it is true that sometime in July, 2001 the first defendant collected a facility on its Account No. CC50344901 with the Plaintiff.
(b) That it was an agreement between the plaintiff and the first Defendant that the facility was to be used for the supply of Two (2) NOS: MB 1418 Tippers to the Federal Capital Territory Abuja.
(c) That consequent upon paragraph (b) above, it was further agreed that payment of the loan was to be made from the payment from Abuja Environment Protection Board at whose instance the contract was executed.
(d) That in furtherance to the above understanding the first Defendant was asked by the plaintiff to provide letter of domiciliation from the Abuja Environment Protection Board which was obliged. Attached and marked Exhibit CA 1 is the said letter of Domiciliation.
(e) That he has never collected any facility from the plaintiff in his private and or personal capacity neither does he operate an Account in his private rapacity.
(f) That the facility granted to the first Defendant has expired since August 2001.
(g) That despite the fact that the date of repayment has expired, the plaintiff has continued to charge interest on the said Account.
(h) That the Plaintiff is not entitled to charge any interest on the said Account after the period for the payment has elapsed.
(i) That they are not indebted to the Plaintiff to the tune of the amount being claimed.
(j) That he was never served the court processes personally.
(k) That the plaintiff has agreed that the payment of the loan sum and or facility will depend on the payment of the contract sum hence the domiciliation of payment.
(l) That the contract has been executed but payment has not been effected and this is to the knowledge of the Plaintiff.
(m) That the first defendant has a good defence on the merit.
In the determination of whether an affidavit in support of the notice of intention to depend disclosed a defence on the merit, the court is only concerned with the averments contained in the affidavit in support of the notice of intention to defend and no more. See Bature v. Savannah Bank of Nigeria Ltd (1998) 4 NWLR (Pt. 546) 438.
A defendant’s affidavit in support of the notice of intention to defend raises a triable issue or a defence on the merits where the affidavit is such that the plaintiff will be expected to explain certain matters with regard to his claim, or where the affidavit throws a doubt on the plaintiff’s claim. See Haido v. Usman (2003) FWLR 640 at 653; SCOA Nigeria Plc v. Danbatta (2003) FWLR 1277.
The two situations where matters filed on the undefended list should be transferred to the ordinary or general cause list for determination are as follows: –
(a) If there are disputed issues of facts disclosed from a comparison of the plaintiff’s and defendant’s affidavits, then the court must transfer the suit to the general cause list for determination on the merits; or
(b) If a decision on whether or not a defence on the merit is disclosed on the defendant’s affidavit turns on a consideration of intricate or difficult areas of law or aspects of law requiring full address by counsel and a research by the court, then it is important that the defendant be allowed to contest the suit in a trial. See Sanitary Co. Ltd vs. Elabed (1998) 12 NWLR (pt. 579) 544; Jipreze vs Okonkwo (1987) 3 NWLR (pt 62) 737; Jos North Local Government vs Daniyan (2000) FWLR 871.
In Kenfrant (Nig.) Ltd. v. UBN Plc. (2002) 8 NWLR (pt. 789) 46 at 70 per Ikongbeh JCA it was held:-
In the determination of whether a defendant’s notice of intention to defend an action filed under the undefended list procedure discloses a triable defence; a court of first instance should not be fastidious and begin to comb through the conflicting affidavits for reasons to stop the case at that stage in favour of the plaintiff. However, where no issues have been joined or where the opposing affidavits cannot be truly said to be conflicting, the court is bound to accept the fact on which no issue is joined or with which no other fact on which no issue is joined or with which no other fact stood in conflict Such approach cannot amount to combing through affidavits In search of reason to stop the case In favour of any party.
A defendant who has no real defence to an action should not be allowed to dribble and frustrate the plaintiff and cheat him out of the judgment he is legitimately entitled to by delay tactics, a aimed not at offering any real defence to the action, but at gaining time within which he may continue to postpone meeting his obligations and indebtedness. See Kenfrant (Nig.) Ltd v. UBN Plc (2002) 8 NWLR (pt. 789) 46 at 71; Macaulay v. NAL Merchant Bank Ltd (1990) 4 NWLR (pt 144) 283; Federal Military Government v. Sanni (1990) 4 NWLR (pt. 147) 688; Ben Thomas Hotels Ltd v. Sebi Furniture Co. Ltd (1989) 5 NWLR (pt 123) 523.
Having explored the judicial authorities and the attendant principles therein and correlating them with the affidavit in support of the undefended list procedure and the affidavit in support of the intention to defend, it is evident and clearly so that the matter between the parties was contentious and a full contest necessitated. That contest could not be handled with a counter affidavit as proffered by the Plaintiff/Respondent rather what is called for is a trial on the merits. Anything else would not suffice. In that situation the trial court’s use of the counter-affidavit of the Plaintiff/Respondent to award judgment was defective and an exercise that led to nowhere. This is because there was only one option and that is a trial of the suit after sending the matter down to the general cause list. I rely on SCOA Nigeria Plc v. Danbatta (2003) FWLR 1277.
Therefore I am satisfied that the dispute between the parties was not such as could be handled under the undefended list procedure. It is only right that the appeal be granted and I hereby allow the appeal. I set aside the judgment of the court below alongside its orders. Furthermore since the settlement of Issue No 1 has taken place in this way there is nothing useful that can be obtained in going into issues 2 and 3 which have been correctly overtaken by events.
Finally on this issue the suit is remitted back to the High Court of the Federal Capital Territory to be tried under the general cause list by another Judge other than justice Saba Yusuf.
CROSS – APPEAL
The Respondent cross-appealed challenging the lower court’s decision striking out the name of the 2nd Appellant from the proceedings.
In the Cross-Appellant’s Brief, the Cross-Appellant stated that the Appellants did not either in their notice of intention to defend or address raise the issue of the 2nd Appellant being agent of a disclosed principal or apply that the 2nd Defendant’s name be struck out. That the trial court barred in law to have introduced that issue that was not before it and used it as a basis for striking out the name of the 2nd Appellant.
The cross- Appellant raised the single issue of:-
Whether the lower court can suo motu strike out the name of the 2nd Appellant on the grounds of being an agent of a disclosed principal without calling on the parties to address it on the issue.
The Cross-Respondent in their Brief filed on 30/10/06 raised two issues:-
- Whether the issue of the 2nd appellant being an agent of a disclosed principal and subsequently striking out of the name was an issue raised suo motu by the Appellant or was at the Appellant’s instance respectively.
- Whether the issue of the 2nd Respondent being an agent of a disclosed principal was an issue which the judgment of the lower court substantially rests at to lead to a miscarriage of justice.
The single issue of the Cross-Appellant being straightforward and to the point I shall utilize it.
In this issue raised in the cross – appeal the cross – appellant contended that having a look at the affidavit attached to the Notice of Intention to defend and the various written addresses of the Appellants, the 2nd Appellant being an agent of a disclosed principal was never in issue neither did the Appellants pray for the striking out of the name of the 2nd Appellant. That it is trite law that a court can only grant the reliefs sought by the parties as a court has no power to grant a relief not sought by a claimant because the court is not a charitable organization. He cited the cases of Chugbo Chemists Ltd v. Chugbo (1996) 5 NWLR (Pt 447) at 247; Obulor v. Oboro (2001) 6 NSCQR 18; Fasikun II v. Oluronke (1999) 2 NWLR (Pt. 589) 6.
Learned counsel for the cross-Appellant said bringing the issue of agency into the judgment without giving the Respondent the opportunity to address the court on the issue is an infringement on the Respondent’s right to fair hearing which is a fundamental principle in the administration of justice and this deprived the court the jurisdiction to decide on the issue. He referred to Kotoye v. CBN (1989) 1 NWLR (Pt 98) 419 at 448.
Learned counsel concluded by asking the court to set aside the order striking out the name by the trial court of the 2nd Appellant on 16th June 2005 and restoring the name in the proceedings.
In reply learned counsel for the cross-respondent stated that the trial court in delivering its judgment was mindful of the position of the law that an agent acting on behalf of a known and disclosed principal incurs no liability. That from the affidavit evidence the trial Judge took the best posture within what was in issue as shown in the affidavit. That the matter of whether the 2nd cross – respondent was an agent of a disclosed principal was never an issue upon which the judgment of the lower court rested. He said for there to be a miscarriage of justice the issue complained to have been raised suo motu must be an issue which the court substantially rested its judgment and only then can it vitiate the judgment. He cited Oyekanmi v. NEPA (2000) 15 NWLR (Pt 690) 414 at 423 – 425.
Learned counsel further contended that an issue cannot be said to have been raised suo motu if the issue did not go outside the specific issue formulated by the parties as in this case. He cited Okonji v. Njokanma (1999) 14 NWLR (pt. 638) 250 at 268; Balogun vs. Oshunkoya (1992) 3 NWLR (pt 232) 827.
Parties are bound by their pleadings and evidence led which is not pleaded goes to no issue and the trial court can ignore or strike out such evidence in his judgment. See Ambrosini v. Tinko (1929) 9 NLR 8 at 12.
Any decision based on issues not raised by the parties in either their pleading or grounds of appeal will not be allowed to stand. See Idika v. Erisi (1988) 2 NWLR (Pt. 78) 563.
Whether the claim of the plaintiff as disclosed in the writ of summons and statement of claim is not supported by the evidence at the trial, the action is bound to fail. See Olowosago v. Adebanjo (1988) 4 NWLR (Pt. 88) 275; Ogiamen v. Ogiamen (1967) NMLR 245.
In the light of what transpired in the main appeal and considering that the matter of striking out the name of the 2nd defendant by the trial court was done suo motu without a hearing from the parties, that striking out cannot stand as it is of a substantial nature and has the potency of a miscarriage of justice. I have therefore favourably considered this cross- appeal which I allow and set aside the striking out of the name of the 2nd defendant from the suit. The second defendant is hereby restored as a party to fully participate at the trial on the merits.
I make no order as to costs either in the main appeal or the cross-appeal.
Other Citations: (2007)LCN/2303(CA)
