Unity Bank Plc V. Denclag Limited & Anor (2012)

LAWGLOBAL HUB Lead Judgment Report

MARY UKAEGO PETER-ODILI, J.S.C.

This appeal is against the judgment of the court of Appeal, Jos Division delivered on the 13th day of April, 2004 in a leading judgment delivered by Amiru Sanusi JCA, the appeal was dismissed except for the amendment of the award of 616,019.36 pounds with an option to pay a sum of N80,082,516 being the Naira equivalent as claimed.

Being dissatisfied with the judgment aforesaid, the defendant herein Appellant appealed to the Supreme Court on eleven grounds. The plaintiff herein Respondent also cross-appealed on two grounds. On the 30/11/2004 Appellant filed a Motion on Notice to amend the Notice and Grounds of Appeal containing 19 grounds.

The facts relevant backgrounds to this appeal are stated hereunder:-

STATEMENT OF MATERIAL FACTS:

The Government of Bauchi State was desirous of equipping and refurbishing her two general hospitals at Kumo and Alkaleri. On the 16/9/87 a contract for the supply of hospital equipment was signed between the Bauchi State Ministry of Health and the 1st Respondent Denclag Limited. The agreement Exhibit ‘1’ was executed on behalf of the 1st Respondent by the 2nd Respondent I. Audu being the Chairman and Chief Executive Officer. See para 5 of the Amended Statement of claim at page 68 of the record. See also page 102 lines 21 to 34; page 108 lines 5 to 10 of the record. On execution of the contract, the 1st plaintiff’s witness Alhaji Yahaya Bappah said:

“The 2nd plaintiff was the principal negotiator on behalf of the plaintiff. The 2nd plaintiff did everything on behalf of the 1st plaintiff. The plaintiffs executed the contract 100%. The agreement was signed by the 2nd plaintiff for the 1st plaintiff.”

The contract sum was 1,476,777.94 pounds. The initial loan in Naira was N9,500,000.00 with additional sum of N8,094,581.00. See Exhibit 4 and paragraphs 5 and 30 of the Amended Statement of Claim at pages 68 and 71, of the record.

To finance the contract with the 1st Respondent, the Bauchi State Government secured a loan of N9,500,000.00 and N8,094,581.00 from the Appellant. See paras 10 and 30 of the Amended Statement of Claim at pages 69 and 71 of the Record, A separate loan agreement was entered into between the Appellant and Bauchi State Government for financing the contract. That agreement is not in evidence.

The only parties to the contract agreement Exhibit 1 were the Bauchi state Ministry of Health and the 1st Respondent. On cross examination by counsel to the appellant the PW1 Alhaji Yahaya Bappah said:

“The Defendant is not a party to Exhibit ‘1’…. The role of the defendant to open letters of credit in favour of the 1st plaintiff is not stated in Exhibit ‘1’.”

PW2 Garba Daugauda was the Commissioner for Health Bauchi State. He signed the contract agreement. He said on examination-in chief.

“This is the contract (Exhibit ‘1’ identified) I signed it. Bauchi State Government and the 1st plaintiff were the parties to the agreement p.14 (a) (e) of Exhibit ‘1’ made reference to the defendant who was to finance the contract. The defendant was to make all payments to the ‘1’ plaintiff”

see page 108 lines 10 to 15 of the record. Indeed clause 14(d) of Exhibit ‘1’ provided: