Sparkling Breweries Ltd. & Anor V. Bank of Credit & Commerce International (Nigeria.) Ltd. (2002)

LawGlobal-Hub Lead Judgment Report

AKAAHS, J.C.A.

This appeal deals with the propriety of entering default judgment, when the case has been adjourned for report of settlement, and while a motion seeking extension of time to file the statement of defence is pending.

The facts of this case may be stated briefly as follows:-

Bank of Credit & Commerce International (Nig.) Limited was the plaintiff in suit No. UHC/43/86. The bank took out a writ of summons in the Ughelli Judicial Division, claiming against the defendants now appellants, the following reliefs which were amended in paragraph 9 of the statement of claim:-

“9. Whereof the plaintiff claims against the defendants jointly and severally:

(a) Balance of the debt as at 30/6/87, N378,571.96

(b) Interest thereon at the rate of 15% per annum until judgment.

(c) In the alternative, an order enjoining the defendants to execute a Deed of Legal Mortgage and to execute all necessary documents, mortgaging the property covered by Certificate of Occupancy No. BDSR 2429, the original of which was deposited with the plaintiff by way of Equitable Mortgage.”

The statement of claim, which is dated 27/7/87, was filed on 28/7/87. On 2/10/87, the plaintiff brought a motion under Order 2 rule 12(b) of the Sheriffs and Civil Process Rules, Cap. 151, Laws of Bendel State, 1976, and Order 19, rule 7(1), (2) & (3) of the Rules of the Supreme Court, 1985, praying the court:

“To enter judgment for the plaintiff/applicant against the defendants/respondents in default of statement of defence.”

The defendants filed a motion on 20/4/88, asking for extension of time within which, to file the statement of defence without annexing the proposed statement of defence. In paragraphs 4, 5, 6, 7, 8 and 9, of the affidavit in support of the motion for extension to file the statement of defence, the defendants stated:-

“4. That on receipt of the plaintiff/respondent’s statement of claim, the defendants/applicants intimated the plaintiff/respondent, that they want the case to be settled out of court.

5. That the defendants/applicants have been going to the plaintiff/respondent in order that the case be settled out of court.
6. That this Honourable court adjourned the case for report of settlement.
7. That settlement has broken down.
8. That the defendants/applicants are very willing and ready to defend this case.
9. That the defendants/applicants have good defence to this action.”

On 20/4/88, plaintiff’s counsel moved his application for judgment, even though the defendants were absent but were said to have been served and the court entered judgment for the entire sum with 12% interest from May, 1983 to 20/7/88. The defendants thereafter, brought a motion to set aside the default judgment. This application which was opposed was heard and dismissed on 21/10/88. The appeal is against the refusal to set aside the judgment. The notice of appeal dated 26/10/88, contains five grounds of appeal.

Later the appellants sought leave to file an additional ground of appeal which was granted on 5/5/97. The original grounds of appeal as contained on pages 22-23 of the record of appeal read:-

1. That learned trial Judge erred in law and thereby, came to a wrong decision occasioning serious miscarriage of justice, when he ignored the averment and submission of the appellants that the respondent does not send them statement of accounts (which the respondent never denied) but rather came to the conclusion that, the appellants knew they were owing the respondent and that their case was manifestly unsupportable without proof of same as required by law.
2. That the learned trial Judge erred in law, by not calling oral evidence to resolve the conflicting affidavit before the court, but ruled in favour of the respondent.
3. That the learned trial Judge erred in law and on the facts by ruling that the appellant’s conduct was not deserving of any sympathetic consideration, when in law, the appellants had satisfied all the conditions necessary for setting aside the judgment in default of defence.
4. The learned trial Judge erred in law, when he awarded cost in favour of the respondent, without hearing the parties on the issue of cost.
5. The decision is against the weight of evidence.

The additional ground of appeal which was deemed filed on 5/5/97 is as follows:-

“The learned trial Judge erred in law, when he dismissed the defendants/appellants application to set aside the judgment of the honourable court, when the said judgment delivered on 20/4/88, was entered without due process of adjudication and thereby occasioned a miscarriage of justice.”

Particulars of Error

1. On the 20/4/88, two motions were pending before the Honourable Court viz; one by the plaintiff for entering final judgment in default of defence, and another by the defendants for extension of time within which to file a defence.
2. The learned trial Judge proceeded to entertain the motion for judgment without first adjudicating on the motion for extension of time by the defendants.
3. The learned trial Judge positively acknowledged the existence and pendency of the defendants/appellants’ motion for extension of time to file a defence, alongside with the plaintiff/respondent’s motion for judgment in his ruling dismissing the defendants/appellants’ application to set aside the judgment.”

Two issues were identified in the appellants’ brief filed on 27/10/98. They are;

(i) Whether the trial court was right in resolving the apparently and patently conflicting affidavit evidence in support of and in opposition to the application by the appellants, to set aside the judgment of the trial court, without calling oral evidence.

(ii) Whether the learned trial Judge acted judicially and judiciously, when he exercised his discretion against the appellants in refusing the application to set aside the judgment entered in favour of the respondents in default of the appellants filing a statement of defence.

The respondent also identified two issues for determination, but stated that the issues formulated by the appellants do not arise from grounds 4, 5 and 6, of the grounds of appeal which are deemed abandoned. The issues raised by the respondent are:-

(1) Whether in the circumstance of this case, there was material conflict in the affidavit that needed resolution by oral evidence.

(2) Whether the learned trial Judge was wrong in the exercise of discretion in dismissing the defendants application, to set aside the judgment entered in favour of the plaintiff on 20/4/88.

The issues formulated by both parties are the same even though they are worded differently. The appellants’ issues are distilled from grounds 2 and 6 of the amended grounds of appeal respectively.

The said amended grounds are a reproduction of original ground 2 and the additional ground of appeal. I deem it appropriate to consider only the second issue in this appeal.

It is settled law that, if the appellants as defendants had filed their statement of defence before the application to enter judgment in default was taken, it would be wrong for the trial Judge to have ignored it, even if it was filed out of time. See: United Bank for Africa v. Dike Nwora (1978) 2 LRN 149; (1978) 11-12 SC 1.

Furthermore, the motion for extension of time to file the statement of defence, ought to have been taken first before the motion for judgment, since the latter motion would have saved the case and allowed it to be heard on the merits. See: Ojikutu v. Odeh (1954) 14 WACA 640. It is also the law that if a matter is adjourned for mention, it cannot be heard on the adjourned date. See: Kano v. Bauchi Meat Products Company Ltd. (1978) 9 – 10 SC 51, where the Supreme Court per Eso, JSC applied the decision in Olubusola Stores v. Standard Bank (Nig.) Ltd. (1975) 4 SC 51, where it was held at page 56 thus:

“…Besides this however, is the fact that the order made on the ex-parte application on the 11th day of June, 1973, had fixed the case only for mention on the 9th day of July, 1973. If, as indeed it was the case, the suit was only to be mentioned on that day, the learned trial Judge clearly wrongly treated that date, as a date fixed for the hearing of the action and erred in law as the entry of judgment on that day was in breach of the provisions of rule 13…”

At pages 41 – 42 of the record, the case was adjourned several times for report of settlement. On 23/4/87 the case was adjourned to 10/6/87. The proceedings of 10/6/87 to 15/1/88, were not available as the record book (vol. 29) containing the said proceedings, was said to have been burnt when the High Court building was set ablaze during the anti-SAP riots on 4th July, 1989. It is difficult to say when the motion for judgment dated 2/10/87 was adjourned for definite hearing, since there had been earlier adjournments for report of settlement. As the records indicate the appellants’ counsel was late in going to court on the date judgment was given in default of the statement of defence and it would appear that the court did not do anything about the motion for extension of time to file the statement of defence. The proper procedure was for the court to strike out the motion for extension to file statement of defence (which should be reflected in the records) before proceeding to hear the application for judgment. There is therefore ,a fundamental flaw in the procedure adopted for judgment. In the circumstances, I find that there is merit in the appeal and I therefore, allow it. It is not necessary to consider the first issue raised on whether it was necessary for the trial Judge to have asked the parties to adduce oral evidence to resolve any controversy in the affidavits. I therefore, set aside the default judgment entered in favour of the plaintiff on 20/4/88 and order an accelerated hearing of the case before the High Court, Ughelli. I make no order as to costs.

Other Citations: 2002)LCN/1177(CA)