Thompson V. Essien (2021)

LAWGLOBAL HUB Lead Judgment Report

AMES SHEHU ABIRIYI, J.C.A.

This appeal is against the judgment delivered on 27th June, 2018 in the High Court of Akwa Ibom State holden at Mkpat Enin.

In the High Court (the Court below), the Appellant was the Plaintiff. The Respondent was the defendant.

The Appellant claimed against the Respondent for a declaration that the Respondent was indebted to the Appellant in the sum of N860,000.00 (Eight Hundred and Sixty Thousand Naira), interest and costs of the action.

The Appellant stated that sometime in early 2014, on two occasions at his residence he lent N500,000.00 and N360,000.00 respectively to the Respondent which the Respondent has not repaid despite repeated demands. As security for the loan, the Respondent issued two post dated cheques to him dated 10/08/14 and 10/10/14.

​The Respondent denied borrowing any amount of money from the Appellant. He stated that he issued the post-dated cheques to the Appellant when he engaged the services of the latter for drilling of boreholes. That he forgot to collect the cheques from the Appellant after he had paid N1,800,000.00 into Appellant’s account and the Appellant never bothered to return the cheques.

The Court below dismissed the claim of the Appellant. The Appellant immediately approached this Court by an initial notice of appeal containing only the omnibus ground of appeal. On the 2nd March, 2021 when the appeal was heard, the Appellant was granted leave to file additional grounds of appeal. The amended notice of appeal already filed on 7th March, 2019 was deemed duly filed and served. The amended notice of appeal contains four grounds of appeal. From the four grounds of appeal, the Appellant submitted the following four issues for determination:

(a) Whether the judgment of the Lower Court was against the weight of evidence (Ground 1).

(b) Whether the issuance of Exhibits A and A1 by the Defendant (Respondent) to the Plaintiff (Appellant) amounted to the Defendant’s(Respondent) acknowledgement of indebtedness to the Plaintiff (Appellant) in the sum of N560,000.00 (Ground 2).

(c) Whether the principle of law in Ila Ent. Ltd v. Umar Ali & Co. Ltd (2013) 15 NWLR (pt. 1376)191 at 203 that the issuance of a cheque by a party to liquidate its indebtedness to another is an admission of the latter’s claim is applicable in the instant case? (Ground 3).

(d) Whether the Appellant denied or controverted the facts contained in paragraphs 5(a)-h of the amended statement of defence and the evidence of the Respondent in paragraphs 7(a)-(h) of the Defendant’s written statement on Oath (Ground 4).

The Respondent presented a single issue for determination. It is reproduced immediately hereunder:

“Whether the Appellant proved his case by credible evidence to be entitled to the relief sought.”

Appellant’s counsel argued issue 4 first. On this issue, learned counsel for the Appellant submitted that in construing pleadings, the totality of the averments have to be read together. He referred the Court toAgi v. P.D.P. (2017)17 NWLR (pt. 1595)386 and paragraphs 5(a) – (h) of the amended statement of defence as well as paragraphs 1(a) (b) (n) and (o) of the Appellant’s reply to the amended statement of defence.

To constitute a traverse, it was submitted it is not necessary that every paragraph of statement of claim should be specifically denied but that what is essential is that the case put up by the defendant conflicts in material particulars with that put forward by the plaintiff. The Court was referred to Ajao v. Alao (1986)5 NWLR (pt. 45) 802.

A cursory look at paragraphs 5a-h of the amended statement of defence vis-à-vis paragraphs 1(a) (b) (n) and (o) of the reply to the statement of defence and the accompanying processes, it was contended, shows that the Appellant did deny the facts stated in paragraphs 5(a) – (h) of the amended statement of defence and the evidence of the Respondent in paragraphs 7(a) – (h) of the written statement on oath. It was immaterial, it was further argued, that the Appellant did not specifically mention paragraphs 5(a) – (h).

Issues 2 and 3 were argued together. On these issues the Court was referred to the case of Ila Ent. Ltd v. Uma Ali & Co. (Nig) Ltd (2013)15 NWLR (pt. 1376)191. Learned counsel for the Appellant submitted that the principle of law applicable in the case of Ila Ent. Ltd is applicable to this case, therefore the Court below was wrong to hold that it was inapplicable.

​On issue 1, it was contended that the claim that Exhibits A and A1 were issued to the Appellant to enable him source for money was untenable, absurd and unreasonable. It was further contended that the fact that they were still with the Appellant at the time the Appellant instituted the action shows that the Respondent did not liquidate his indebtedness.

It was submitted that the judgment is against the weight of evidence at the trial.

Learned counsel for the Respondent submitted that as far as the evidence adduced by the parties in this case is concerned, the trial Court rightly arrived at the conclusion that the Appellant did not prove his case by credible evidence to warrant the grant of the reliefs sought. It was submitted that it was the duty of the Appellant at the trial Court to prove that there was an existing loan contract agreement between him and the Respondent different from the financial transaction they had in respect of the drilling of boreholes. This, it was contended, the Appellant did not do.

​It was contended that the fact that Respondent’s cheques exhibits A and A1 were in the possession of the Appellant is not enough to draw the conclusion that the Respondent was indebted to Appellant considering the fact that the Appellant did not deny receiving monies from the Respondent while the cheques were still in his possession. The Appellant, it was further argued, had a duty in the circumstances to plead and lead evidence on the circumstances that led to the receipt of the monies from the Respondent to enable him rebut the presumption that the payments subsequently made after the issuance of the cheques were not in respect of the values of the cheques.

Learned counsel for the Respondent contended that it was curious that Appellant presented the cheques issued in August and October, 2014 in January, 2015 and when the cheques were returned unpaid, he did not draw the attention of the Respondent to this fact until 22nd July, 2016 when he wrote to the Respondent. It was contended that the reaction of the Appellant to the return of the cheques does not follow the natural course of events of return of cheques when the drawers attention is required. Under the natural cause of events, the Appellant would have reached out to the Respondent immediately. It is not enough, it was argued, for Appellant to say that he made several demands for the money without stating how and or making reference to the returned cheques.

It was contended that the Respondent on 15th June, 2016 sent exhibit C to the Appellant demanding for the return of exhibits A and A1 after settling the values of the two exhibits in the financial transaction contained in exhibit 7. The contents of exhibit C, it was submitted, are very clear and leave no one in doubt as to why exhibits A and A1 were issued to the Appellant.

There is nothing on the face of exhibits A and A1, it was submitted, to show that they relate to, or have anything to do with any loan transaction.

It was submitted that two loan agreements exhibit G and H were not binding on the Respondent because he was not a party to them.

​It was submitted that the main relief sought by the Appellant is declaratory. Therefore, he had a duty to plead relevant facts and lead evidence to prove his case before he can be granted the declaratory relief. A declaratory relief is not granted on lack of defence or default in pleadings, it was submitted. A party seeking declaratory reliefs, it was submitted, has the burden of establishing his entitlement to such reliefs. He must succeed on the strength of his own case and not on the weakness of the defence, if any. The Court was referred toBulet Int’l (Nig) Ltd v. Olaniyi (2018) All FWLR (pt. 948) 500 at 530.

It was submitted that loan transactions are contractual relationships and any party relying on a contract is bound to plead and prove the terms of the contract. In the instant case, it was argued, the Appellant did not plead the terms of the loan, neither did he tender any document of such contract. Exhibits A and A1 are not sufficient evidence of such a loan agreement, it was submitted. That the Appellant merely stated that he lent money to the Respondent without more. He did not state the purpose for which the loan was meant. The question is, is the Appellant an automatic teller machine that the Respondent just walked into his house and demanded for money and the Appellant paid? It was contended that for anybody to say that he gave out a loan, the natural course of any event is that the loan was meant for a particular thing and not just collection of money.

​It was submitted that on the state of the scanty evidence of the existence of any loan agreement the Appellant cannot succeed on the evidence he placed before the Court. The Court was referred to Akande v. Adisa (2012) 15 NWLR (pt. 1324) 538 at 575.

It was contended that the Appellant did not present the cheques until January, 2015 because the value of the cheques had been paid to the Appellant. In that case, the Court below rightly held that the Appellant did not prove his case by credible evidence.

It was further contended that the Appellant had not led evidence to show how a cheque of a business name or company conveyed liability on the Respondent. It was contended that the Appellant pleaded that the cheques of the Respondent’s company were issued but has not made any claims against the said company. The effect of this pleading, it was contended, is that the loan contract was between the company and the Appellant. It was submitted that the Respondent cannot bear the liability of any company personally.

It was submitted that from the pleadings of the Appellant and the nature of exhibits A and A1 the case of Ila Ltd v. Umar Ali & Co. (Nig) Ltd (supra) relied upon by the Appellant is inapplicable to this case. On the claim for interest, it was submitted that it must flow from the terms of the contract. It was contended that PW1 nowhere stated that it was part of the contract agreement to pay interest or costs. It was submitted that interest will however be payable where there is express agreement to that effect and such agreement may be inferred from a course of dealing between the parties. The Court was referred toDHL International Nigeria Limited v. Oyeyemi (2017) All FWLR (pt. 671) 1298, Sterling Bank Plc. v. Falola (2015) ALL FWLR (pt. 774)1 and Ekwunife v. Wayne West African Limited (1989) 5 NWLR (pt. 122)422.

The Akwa Ibom State High Court (Civil Procedure) Rules, it was submitted, have made provision for post judgment interest, and it is to be not more than 10% per annum.

It was also submitted that a party cannot claim professional fees paid to his counsel from the other party. The Court was referred to Guinness (Nig) Plc. v. Nwoke (2000) 15 NWLR (pt. 689) 135.

In his reply brief, the Appellant submitted that the issue of Exhibits A and A1 being in the name of a company was not raised and argued in the Court below.

Therefore, the Respondent cannot raise the issue without first obtaining leave of the Court. The Court was referred toThe Sun Publishing Ltd. v. Aladinma Medicare Ltd (2016)9 NWLR (pt. 1518) 577 at 592.

In any case, it was the submission of Appellant’s counsel that from the pleadings, the Respondent borrowed the money in his personal capacity. He did not borrow it as a representative of his company. That the Respondent only issued exhibits A and A1 as security for the loans. That there is no law which prohibited the Respondent, being the Managing Director of his company, from issuing exhibits A and A1 to the Appellant as security for the loans. Therefore, the Appellant was right to have sued the Respondent personally.

I have discountenanced the other submissions of the Appellant’s counsel in the reply brief as they are re-arguments of the appeal.

The only issue for determination is; whether the Appellant proved that he lent N860,000.00 in two installments of N500,000.00 and N360,000.00 to the Respondent to be entitled to the declaration sought.

​It is the law that declaratory reliefs are only granted when credible evidence has been led by the person seeking the declaratory relief. The person seeking the declaratory relief must plead and prove his claim for declaratory relief without relying on the evidence called by the defendant. A declaratory relief will not be granted even on admission by the defendant. See Anyaru v. Mandilas Ltd (2007)4 SCNJ 288 and Matanmi & Ors v. Dada & Anor (2013) LPELR 19929. From the pleadings and evidence led by the Appellant, there are several unanswered questions to enable any Court lend credence to the claim of the Appellant. He pleaded and testified to the fact he lent the money to the Respondent on two different occasions. When was the first occasion? He did not tell the Court. He said that he first lent N500,000 to the Respondent. The question is what did the Respondent tell him he wanted the N500,000 for? The Appellant did not tell the Court. If the N500,000 was to be repaid, when was it supposed to be repaid? The Appellant did not tell the Court. When the Respondent came for the N360,000 what did he say he wanted the N360,000 for and when was that? It is not enough to say as the Appellant pleaded and stated that the two occasions were sometimes in early 2014. Appellant ought to have been specific as to when in early 2014 the Respondent went to borrow the N500,000 and when in early 2014 he returned for the N360,000. Again, why did the Respondent ask for N360,000 again when he had not yet repaid N500,000 lent to him? When was the N360,000 to be repaid?

The Appellant led no iota of evidence to show that he lent N860,000 in two installments to the Respondent. He merely dangled Exhibits A and A1 as the evidence that the Respondent borrowed money from him. The Respondent pleaded and led evidence to show that exhibits A and A1 were issued in respect of the contract between the parties for the digging of boreholes. The Appellant did not controvert the pleadings and evidence of the Respondent on the issue. This is because he did not himself plead and testify as to how he financed the project contracted to him by the Respondent.

​Learned counsel for the Appellant has a misconception of what constitutes a traverse in pleadings. It does not mean merely throwing a spanner in the wheel of an opposite party’s case. Merely saying that Exhibits A and A1 were issued before the contract to dig the boreholes was entered into is not enough traverse. The Appellant ought to have shown how he financed the subcontract differently from how the Respondent pleaded and led evidence to show the role the issuance of Exhibits A and A1 played in the transaction. He did not. The Court below rightly found in its judgment at page 191 to 192 thus:

“Having not specifically denied the said averred facts in paragraphs 5, a-h of the Amended Statement of Defence, they are deemed as admitted and would need no further evidence to prove them as unchallenged and uncontroverted facts need no further proof. Based on the above, this Court holds the view that the evidence of the defendant that he issued the Zenith Bank postdated cheques in Exhibit A and A1 in the sum of N500,000.00 and N360,000.00 to the plaintiff in the course of the execution of the contract for which he awarded, to him is more credible than the evidence of the plaintiff that the two (2) postdated cheques were issued to him by the defendant as security for the loan which he gave to him. Moreover, it is evident that the sum of N1,800,000.00 was paid to the plaintiff on the 11th August, 2014 by the defendant as the sum of N500,000.00 in Exhibit A was due and payable on the 10th August, 2014 and he also admitted that the defendant also paid N200,000 to him on the 24th December, 2014 as part payment of the sum of N360,000.00 he had authorized him to source for and issued Exhibit A1 to enable him do so. That explains why the plaintiff did not present Exhibit A and A1 to the bank for payment until 12th January, 2015. The plaintiff ought to have returned the two postdated cheques to the defendant as he had made payments to him to redeem the values on them without a demand for their return. The plaintiff failed to show how he disbursed the said loan to the defendant in two installments or where it was receipted for by the defendant as required by law since the defendant had denied borrowing the said sums from him.”

I agree with the above findings of the Court below.

In the circumstances, the only issue for determination is hereby resolved against the Appellant and in favour of the Respondent.

​The appeal is therefore dismissed for lacking in merit.

Respondent is awarded N100,000.00 costs to be paid by the Appellant.

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Others: CA/C/12/2019