Union Homes Savings & Loans Limited V. Cpl Industries Limited (2009)
LawGlobal-Hub Lead Judgment Report
R.C. AGBO, J.C.A.
The respondent was indebted to the appellant. The appellant, aggrieved at the reluctance of the respondent to pay the sums owing, approached the Federal High Court in a winding up proceeding to wind up the respondent. The appellant and respondent negotiated a settlement which was reduced into writing and by consent of both parties made the judgment of the trial court. The terms of this settlement bear reproduction hereunder:
“TERMS OF SETTLEMENT
The parties hereby agree to settle this suit as follows:
1. The parties agree that the sum due and owing to the Petitioner from the respondent is N40,000,000.00 (Forty Million Naira).
2. The respondent shall pay the said sum of N40,000,000.00 (forty million naira) in the manner hereinafter appearing.
(i) N15,000,000.00 (Fifteen Million Naira) shall be paid on the execution of these presents.
(ii) The balance sum of N25,000,000.00 (Twenty-five Million Naira) shall be paid in six equal monthly installments of N4,166,666.66 with effect from 30th December 2000 terminating on 31st May 2001.
3. In the event that the respondent defaults in the payment of any installment the whole amount then outstanding shall immediately become due and payable.
4. On the payment of the total amount the petitioner would unconditionally and no costs to the respondent execute a Deed of Release in respect of the Deed of Mortgage over the Respondent’s property.
5. These terms shall be made judgment of court.”
The respondent could not keep to the terms of repayment. It negotiated with the appellant and agreed to pay interest on the sum owing for the forbearance of the appellant from recovering the total sum owing at once. The respondent continued to have difficulties in paying the judgment debt. The judgment debt was supposed to have been paid up by 31st May 2001. On 30th October 2002 the appellant caused a writ of fifa to issue. On 9/1/03 a writ of attachment was executed against the respondent’s movable property. The property were however not sold but remained in the custody of the Sherriff of the Federal High Court. On 21-6-03 the respondent completed paying N40 million. On 1-9-03 the appellant, purporting to act on compassionate grounds, applied to the Federal High Court to release to the respondents its movable property in the custody of the court. The court obliged and released the goods. The respondents approached the appellant claiming to have discharged the judgment debt and demanding the release by the appellant in consonance with the terms of the consent judgment the respondent’s title documents and execute a deed of release in respect of respondent’s mortgaged property. The appellant balked and demanded payment of the agreed interest before it could prepare a deed of release of the mortgaged property. The respondent then by a summons for release of title documents filed on 16/12/2004 sought the help of the Federal High Court to force the appellant to prepare a deed of release of the respondent’s mortgaged property. Affidavit evidence was placed before the trial court by both parties. Both parties presented written addresses to the court which in a considered ruling adjudged the application as follows:
“I have considered the facts of this case. I have also considered the submissions of learned counsel. Equally considered are the authorities referred to by them. What happened in this case was there was a consent judgment delivered by my learned brother GUMEL J. on 11th December 2000 wherein the parties agreed that the sum due and owing to the petitioner from the respondent is N40,000,000.00 perhaps out of an oversight the judgment did not make any mention of interest. The judgment debtor/applicant had paid this sum of N40,000,000.00 as evidenced by Exhibits BB and CC-CC7. Upon completion of the payment of the N40,000,000,00 the judgment debtor was expecting by the plaintiff/judgment creditor to release the Title Documents to its property and also to execute a Deed of Release in respect of the Deed of Mortgage over the property. As I said earlier the judgment of Gumel J. of 11th December 2000 did not say anything about interest and since it is a consent judgment the only inference is that the issue of interest is waived. It is therefore my opinion that the defendant/judgment debtor have complied with the judgment of 11th December 2000 by paying the N40,000,000.00 there is no justification on the part of the plaintiff to continue withholding its Title Documents relating to its property the subject of the legal Mortgage. It is absolutely unfair. The case had been decided and so the parties have no alternative than to comply with the order of the court. The judgment debtor having paid the sum of N40,000,000.00 the plaintiff is bound to release the Title Documents to them as ordered by the court as per paragraph 5 of the judgment. In view of the foregoing I hold that the applicant herein is entitled to the relief sought in this application. The application is therefore granted as prayed.”
Not being satisfied with this ruling the appellant has filed this appeal. Briefs of argument were filed and exchanged. From the four grounds of appeal the appellant formulated the following three issues for determination:
“(a) Whether it was legally right for the trial court to hold that the appellant has waived its right to interest on the judgment sum without considering latter agreement of the parties. (Tied to ground 1)
(b) Whether the judgment of the trial court had been compromised by virtue of Exhibit A, Band C attached to the appellant’s counter affidavit to the motion dated 6th December 2004. (Tied to grounds 2 & 3).
(c) Whether the trial court can assume jurisdiction on the terms of its judgment in view of latter agreement of the parties. (Tied to ground 6).
The respondent in its brief of argument formulated 2 issues for determination to wit:
“3.1. Whether the lower court was right in holding that the respondent having fully paid the total judgment sum of N40million is entitled to the release of its Title of Documents and execution of a Deed of Release in its favour as contained in the judgment of 11th of December 2000.
3.2. Whether Exhibit A, B, & C attached to the appellant’s counter affidavit to the motion dated 6th December 2004 amounts to a compromise of the judgment of 11th December 2000 or amounts to a separate contract.”
Parties to a dispute in court are entitled to determine the dispute on agreed terms. Such agreed terms may on their demand be entered by the trial court as its judgment. It is such a judgment that is referred to as “a consent judgment.” A consent judgment is therefore a contractual agreement between parties to a dispute inter se determining the rights and claims in dispute and given the final authority and force of the judgment of a court of law. See RASC Ltd v. Akib (2006) 13 NWRL (PT. 997) 33. A judgment simpliciter is the final determination by a court of the rights and obligations of parties upon matters submitted to it in an action or proceedings. See Black’s Law Dictionary, Abridged 5th Ed. P. 436. A judgment remains valid and binding on all parties for all times until set aside by an appellate court.
See RASC Ltd v. Akib Supra. But a person in whom a right ennures does have the right to compromise such a right. It is irrelevant that the foundation of such a right is located in a judgment unless the judgment has been executed. See Abey v. Alex (1999) 14 NWLR (PT637) 148.
At p.161 Uwaifo, JSC had this to say –
“It must therefore be clear beyond dispute that it was open to the successful party to the Kalabari Native Court judgment to enter into terms of settlement of the said judgment in any way it considered fit. This is in no measure unlawful or against public policy”.
It is even more so in the circumstance as in the instant case where the judgment in effect is a contract between the parties. The parties are certainly at liberty if they so desire to relocate their rights and obligations by voluntarily re-negotiating the terms of the contract. This contention is given fillip by the fact that a consent judgment can be set aside by a court of competent jurisdiction on the ground for which a contractual agreement could be avoided or rescinded. See RASC Ltd v. Akib supra p 361. The re-negotiated terms in effect constitute a fresh contract and supersede the consent judgment. The trial court gave no consideration whatsoever to the re-negotiation of the terms of the contract agreement by the parties before the purported execution disclosed in the affidavits exchanged by the parties and its effect if any on the order sought by the respondent in the application. The appellant particularly called the attention of the trial court to the content of the letters exhibits “A”, “B” and “C” annexed to the appellant’s counter affidavit and located at pages 65 to 69 of the record of proceedings.
The content of these letters are quite illuminating and they bear reproduction –
“EXH “A”
1st June 2001
The Managing Director/CEO
Union Homes Savings & Loans
153 Ikorodu Road,
Onipanu
Lagos.
ATTN: MR. O. N. CHIONUMA
Dear Sir
RE: OUR OUTSTANDING ACCOUNT WITH THE UNION HOMES SAVINGS & LOANS LIMITED
We refer to our letter dated 3rd May 2001 and your response of 8th May 2001 on the above subject matter.
We are pleased to enclose herewith our Ilupeju Union Bank Certified Bank Cheque No: 001397688 dated 30th May 2001 in the sum of N8,400,000.00 (Eight Million, four hundred thousand naira only) as further part payment on our outstanding account with you.
Much as it has been our desire and genuine intention to speedily repay all outstanding due to you, it has not been possible because of our inability to effect sales of all the properties set aside to liquidate the total outstanding. Please be assured that we are making serious effects to effect the sale of the remaining properties for this purpose and as soon as the properties are sold, the remaining outstanding will liquidated once and for all.
In view of this unanticipated delay, we confirm our agreement to pay interest from the month when payment is due until when payment is achieved. Please bear with us and we shall keep you regularly updated from time to time on progress being made towards the sale of the properties.
In the meantime, it is our pleasure to inform you that the Memorandum of Understanding (M.O.U) we referred to in our letter of 3rd May 2001 between the Lagos State Government and our Principal, Vamed Engineering GmbH & Co Kg Vienna Austria in which we are also a party has now been executed.
The M.O.U. is for the development and improvement of various Health Care facilities for the Lagos State Government. The estimated cost of the project is N13 billion. It is our desire to nominate your Bank through which our Principal and the Government will channel funds for the execution of the project.
Enclosed herewith is a copy of the M.O.U.
We are considering a financing proposal to the Lagos State Government whereby your Bank will be nominated to provide the fund for the local content of this Hospital project and we shall let you know in the shortest possible time the outcome of our discussion with the State top Government officials.
Confirmation of your interest in this proposal will be highly appreciated.
We look forward to your favourable response while thanking you for your continued cooperation.
Yours faithfully
CPL INDUSTRIES LIMITED
SGD
PRINCE ALBERTA AWOFISAYO
Encs.
EXH. “B”.
March 28, 2002
The Managing Direct/CEO
Union Homes Saving & Loans limited
153, Ikorodu Road
Onipanu, Lagos.
ATTENTION: EMEKA NWAOBIALA
Dear Sir,
We refer to your letter dated February 18, 2002 and the various visit of your officials to our office on the above subject matter.
We are pleased to inform you that both the Lagos State and Federal Government has now passed their year 2002 appropriation bill/budget. Both budgets (Lagos/Federal) have budgetary provisions for our project. We now expect conclusion of the contract with the government and the take off of project execution not later than 30th June 2002. Based on this expectation which to all intent is realistic, we have prepared our post-dated cheques accordingly.
In accordance with our discussion with your Mr. Emeka Nwaobiala during his visit to our office accompanied by another official of your bank, we enclosed herewith our post-dated cheques in the sum of N11.9million covering the outstanding principal due on the facility in accordance with the out of court settlement in suit No. FHC/L/SC/1307/99. In accordance with our mutual agreement as contained in our letter of 1st June 2001 confirming our agreement to pay interest on the outstanding N12.4 million balance on the principal until payment is made, you are hereby requested to calculate the interest due on the N12.4 million out of which we have paid N500,000.00 on February 12, 2002 leaving a balance of N11.9 million and advise us of the amount of interest due as stated above to enable us forward our cheques for the amount.
In the meantime we request that you freeze interest on the outstanding from 1st April 2002 to assist us. While looking forward to hearing from you, we thank you in anticipation of your co-operation.
Please acknowledge the receipt of this letter together with the enclosed post-dated cheques for N11.9 million on the duplicate copy of this letter.
Yours faithfully,
For: CPL INDUSTRIES LTD.
SGD
PRINCE ALBERT A. AWOFISAYO
CHAIRMAN/CEO
EXB. “C”
1st April 2002
The Managing Director
CPL Industries Limited
383, Agege Motor Road
Ilupeju Bye-Pass
Lagos
Dear Sir,
RE: YOUR OUTSTANDING INDEBTEDNESSTO UNION HOMES SAVINGS AND LOANS LIMITED
We acknowledge receipt of your letter dated 28th March 2002.
Please be informed that your request that interest be frozen on your outstanding indebtedness has been refused, hence interest runs until completion of payment of your indebtedness.
We thank you for your anticipated co-operation.
Yours faithfully,
SGD
A.A. DANIEL
COMPANY SECRETARY, LEGAL ADVISER.”
It is clear from these exhibits that the respondent was not able to meet the 2nd term of settlement comprising the consent judgment. In order to cause the appellant to forbear the 3rd term of the terms of settlement, the respondent agreed to pay interest on the sum owing.
In fact from exhibit “B” as at the time it was written some of the interest was already due and payable. It is clear from these exhibits that the 2nd and 3rd terms of the terms of settlement were renegotiated by the parties. This they had the competence to do. Any dispute arising from the execution of the terms of settlement as renegotiated creates fresh cause of action See Abey v. Alex supra, Mcallum v. Country Residences ltd. (1965) 1 WRL 657 at 660. It cannot be enforced as a proceeding in the consent judgment.
Importing the doctrine of waiver into the transaction and holding that the appellant, having not included interest on the sum owing as a term of the consent judgment had waived his right to interest, was misconceived. The appellant in re-negotiating the terms of settlement was entitled to ask for and be given consideration for his forbearance of his right to recover all the sums owing at once. The re-negotiated terms now imported payment of interests into the terms of settlement and there are no steps taken by the appellant thereafter suggesting that it had waived the new term of settlement. The rights and obligation of the parties are now determined, not by the terms of the consent judgment, but by the terms of the renegotiated terms of settlement. Any dispute arising therefrom may be subject to fresh determination by a court of competent jurisdiction.
Appellants issues a, b and c are determined in its favour. The respondent’s issues 1 and 2 do not avail it. This appeal succeeds. The ruling of the trial court dated 5th October 2005 is hereby set aside and the application founding it dismissed. N50,000.00 costs in favour of the appellant.
Other Citations: (2009)LCN/3431(CA)
