University of Nigeria V. Orazulike Trading Company Limited (1989)
LawGlobal-Hub Lead Judgment Report
UWAIFO, J.C.A.
At the Enugu High Court, the plaintiff company (now respondents) brought a claim for the sum of N28,000.00 plus 10% interest against the defendants (now appellants) for goods ordered and delivered. By an ex-parte application under Order III rule 9 of the High Court Rules (Cap. 61) Laws of Eastern Nigeria 1963 then applicable in Anambra State the action was transferred to the undefended list by order made by Onyechi, J., on September 1, 1982. The appellants on 14 October, 1982 raised objection to the corporate name in which they were sued, which was “University of Nigeria Nsukka”, whereas the law establishing the University simply states the name as “University of Nigeria. “The objection was overruled. Counsel for the appellants was allowed an adjournment in order for him to file notice of intention to defend. This he accordingly did.
The trial Judge heard the notice to defend, and on 19 November, 1982 held that certain documents exhibited for consideration showed prima facie that the appellants not only agreed to pay to the respondents the amount claimed but proceeded to prepare voucher to this end. He concluded that:
After considering the submission of Mr. Ezeani for the defendants and Mr. Obegolu for the plaintiffs in the light of the above prima facie findings, I hold that the defendants have not only failed to show defence on merits but that the defences they raised in respect of their application under Order III rule 11 of the High Court Rules are not genuine….I hold that the defendants have not shown sufficient cause in order to be let in to defend this suit. I therefore recourse to Order III rule 13 and enter judgment for the plaintiffs against the defendants on terms of the undefended list writ of summons.”
The appellants have appealed against that decision. There are other aspects of the decision touching upon (1) the notice of intention to defend in the corporate name in which the appellants were sued (upon which a ruling had earlier been given by the trial court), (2) the jurisdiction of the court at Enugu to hear the case instead of Nsukka, and (3) the lack of privity of contract between the appellants and the respondents. All these issues are reflected in the five grounds of appeal upon which the appellants now complain.
In pursuance of those grounds of appeal which I consider unnecessary to set out, six questions for determination have been raised by the appellants. They sufficiently encompass the complaints formulated in the grounds of appeal and read as follows:
“(1) Had the learned Judge jurisdiction to entertain action arising from contract made at Nsukka to be performed at Nsukka and defendant residing at Nsukka in Nsukka judicial division?
(2) Does defendant/appellant reside at Nsukka where its principal organs are situate and reside; and having Enugu as branch or place of carrying on business?
(3) Is the ‘University of Nigeria Nsukka’ a corporate legal entity to sue and be sued in that name or is it a non-juristic person?
(4) Was the learned trial Judge right in holding as he did that a notice of intention to defend brought under Order 3 rule 11 required such notice to disclose a defence on merit?
(5) Does the refusal by the learned trial Judge to admit the defendant/appellant to defend the action constitute a breach of the rule of audi alteram partem and a breach of the appellant’s Constitutional right of a fair hearing pursuant to section 33 of tile Constitution of the Federal Republic of Nigeria 1979?
(6) Does lack of jurisdiction on the part of the trial Judge render his proceedings and judgment a nullity?”
The respondents stated three issues for determination, namely:
(a) Whether the learned trial Judge was right in assuming jurisdiction to entertain the action.
(b) Whether there was privity of contract between the plaintiffs/respondents and defendants/appellants.
(c) Whether a defendant will necessarily be allowed to defend an action properly placed on the undefended list once notice of intention to defendant is filed under Order 3 rule 11.
I will first deal briefly with the issue of venue. The appellants argue that the contract ought to have been performed at Nsukka and that the appellants reside there. That being so, they say, the action could properly be heard only at Nsukka Judicial Division, not Enugu. The respondents on the other hand argue that there is one High Court within each State of the Federation as provided by Section 234(1) of the 1979 Constitution and that the rule as to venue provided in Order 7 of the High Court Rules is for convenience.There is no doubt that each State of the Federation has only one High Court that preserves a uniform jurisdiction of the High Court throughout a particular State.
But Judicial Divisions have been carved out in every State and rules made as to the venue of instituting and hearing particular matters.
It will, in my view, discredit the rules made to govern venue, undermine the political and social importance of creating Judicial Divisions and neutralise an aspect of the measures taken by the Authorities to ensure even and speedy dispensation of justice in any particular State if parties were simply free to file actions in any Judicial Division they chose just because section 234(1) of the Constitution provides that there is only one High Court of a State. It may lead to the concentration of cases in one Judicial Division, particularly the State capital. That will cause unnecessary chaos.
I think the provision of section 234(1) of the Constitution is to emphasise that there are no grades of the High Court of a State. This goes to jurisdiction in that the High Court in anyone Judicial Division of a State has the same powers and exercises the same authority as the High Court in any other Judicial Division of that State. That is why any High Court Judge of a State can adjudicate over any matter brought in the High Court in any Judicial Division he is assigned to serve or any matter that may be specially assigned to him from any other Judicial Division. The rules as to venue must as much as possible be observed. In this regard Order 7 rules 3, 5 and 6 are relevant for the purposes of this case. Rule 3 provides:
“All suits for the specific performance, or upon the breach of any contract, may be commenced and determined in the Judicial Division in which such contract ought to have been performed or in which the defendant resides.”
The question here is where do the appellants reside? The trial Judge felt that as they have two campuses, either would serve the residence requirement. But as there was no where the respondents stated that the University is residing at Enugu nor did they give the address as Enugu, there was really nothing upon which the Court could hold that the appellants reside at Enugu. In Re Bowie ex parte Breull (1880) 16 Ch. D. 484, Cotton, L.J., said that the word ‘residence’ was an ambiguous word and may receive a different meaning according to the position in which it was found. It is known that there could be two residences at the same time. It all depends on the facts. In the case of R v The Mayor of Exeter, Wescomb’s case (1868) 4 L.R. Q.B. 110 at 113, Blackburn, J., said:
“There is no strict or definite rule for ascertaining what is inhabitance or residence. The words have nearly the same meaning … It is always, if the inhabiting is bona fide, a question of more or less. The question is whether there has been such a degree of inhabitance as to be, in substance and in common sense, a residence. When a person has a country and a town house, it is a mere question of fact whether he has two, or only one residence…It is a pure question of fact.”
Since the University is a corporate body, it is perhaps necessary to determine its residence from the test applied to corporations. It has been held that the residence of a company is the place of its central management and control. This is normally the place where the board of directors functions or the place of business of the managing director or that of the parent company: see Unit Construction Co. Ltd. v. Bullock (1960) A.C. 351 H. L. The issue as to where the place of control is, is one of fact: see Union Corporation v. I. R. C. (1952) 1 All E.R. 646 at 657 C.A. It does appear reasonable to say that what could determine the residence of a University may be the place of its central management and control. This is likely to be where the office of the Vice-Chancellor or the main campus (in case of more than one campus) is to be found.
The learned authors of Palmer’s Company Law Vol. 1, 22nd edition, page 75, paragraph 8-08 quote SCHMTITHOLF as saying:
“It is obvious that a corporation can no more have a domicile or residence than it can marry or have children. On the other hand, effect must be given to the legal prescript, which is clearly intended to cover the case of the artificial person as well as that of the natural person. Here the task of the courts is to interpret the (issue) in question in relation to the artificial person.”
Later at page 76 paragraph 8-09, they conclude inter alia: “…a company – like an individual- may have several residences at the same time…” Whatever way in which the matter is considered, the decision as to the residence or residences of a person, natural or artificial, must be reached as a question of fact.
There was simply no fact upon which to resolve the issue that Enugu is the residence or one of the residences of the appellants. The learned Judge was therefore in error to have decided that the appellants reside in Enugu for the purposes of this action. He appeared to have taken it upon himself to make out a case on the point for the respondents which they made no attempt themselves to support. What the trial Judge did was to substitute his own views for the matters concerning Enugu being the residence of the University of Nigeria in the absence of evidence. It was wrong for him to do that: see Owe v. Oshinbajo (1965) 1 All N.L.R. 72 at 75 S.C.; Bornu Holding Co. o Ltd. v. Alhaji Hassan Bogoco (1971) 1 All N.L.R. 324 at 333 S.C.
Order 7 rule 5 says that when any suit shall be commenced in any other Judicial Division than that in which it ought to have been commenced, it may be tried in the Judicial Division in which it shall have been commenced, unless the Court shall otherwise direct, or the defendant shall plead specially in objection to the jurisdiction before or at the time when he is required to state his answer or to plead in such cause. The appellants specially pleaded in objection to the jurisdiction but the respondents did not contest it in any way. It was the learned Judge who took it upon himself to provide an argument on behalf of the respondents and to resolve the matter in their favour. In view of the facts available and the objection raised by the appellants at the earliest opportunity, the trial Judge had no alternative but to transfer the case to Nsukka Judicial Division under rule 5. Grounds 1 and 3 therefore succeed. There is the complaint that the name “University of Nigeria Nsukka” is not that of a juristic person which can be used in an action in court. I wish to remark that after the trial Judge ruled on the preliminary objection raised on that issue, counsel for the appellants was not justified in raising that same issue before that court again as he did. That was an abuse of process of the court. The trial Judge, in my view, properly-resolved the preliminary objection. The name “University of Nigeria Nsukka” does not in any way mislead. It simply shows that the University can be found at Nsukka. Even if it could be said that the word “Nsukka” need not be added, that would at worst have been a mere misnomer: see Mitchell v. Harris Engineering Co. (1967) 2 Q.B. 703; Whittam v. W. J. Daniel & Co. Ltd. (1962) 1 Q.B. 271. I do not consider any amendment to the name necessary. Ground 2 fails.
I now deal with the notice of intention to defend filed by the appellants. It is desirable to state briefly what transpired on this score. In their affidavit in support of the motion to place the cause on the undefended list, the respondents referred to a letter dated 16 March, 1978 addressed to the Manager, Henry Hudson (W.A.) Ltd. by the Purchasing Officer of the University. It was attached to the said affidavit as exhibit A. The letter is in respect of two L.P.O.’s of N18,000.00 and N28,800.00 respectively, amounting to N46,800.00. The letter as at that date complained that no supplies had been made by Henry Hudson (W.A.) Ltd. Paragraph 2 says: “Please indicate in writing when you intend to supply the goods, and your proposed deliveries schedule. “There does not appear to be any reply to that letter. The articles ordered were 1,200 dust bins and 2,500 cartons of special Fay Toilet Rolls.
The respondents allege that Henry Hudson (W. A.) Ltd. were unable to supply and so assigned the orders to them. Curiously, in a letter dated 16 January, 1978 which the respondents made exhibit B, the said Henry Hudson purported to write to the acting Bursar of the University authority that payment of N46,000.00 “being money on L.P.O. No. 27388 of 8th November, 1977 and L.P.O. No. 27384 of 7th November, 1977” be made to the respondents. There must be an issue as to why payment should be authorized to be made to the respondents on 16 January, 1978 when on 16 March, 1978 the Purchasing Officer complained that the goods had not been supplied Again, on 2 February, 1978, the Acting Bursar wrote (as per exhibit C) to the respondents committing the appellants that the value of the said L.P.Os would be paid to them as instructed by Henry Hudson. It should again be remembered that as at that date, the goods had not been supplied.
If therefore there had to be assurance given to the respondents for such payment, it ought to be made conditional upon their supplying those goods. Now, the appellants in the affidavit in support of their notice of intention to defend have alleged a tripartite conspiracy between the Acting Bursar at that time, one Mr. Philip Ihuoma, the respondents and Henry Hudson (W.A.) Limited to defraud the University. In this regard reference will be made paragraphs 9, 10, 11, 12, 13, 14and 15 which read:
“9. That the L.P.O. and supplies were issued in the name of Henry Hudson (W.A.) Ltd. for which the said Henry Hudson (W.A.) was paid the sum of N28,800.00 on its own request photo copies of the said L.P.O. in the name of Henry Hudson (W.A.) Ltd. are hereby annexed as Exhibit A-A6.
- That the plaintiff, and Henry Hudson and Mr. Philip Ihuoma had been in conspiracy and collusion of defrauding University of Nigeria huge sums of money by dubious means.
- That after Henry Hudson had been paid the sum of N28,800.00 to the knowledge of the plaintiff, the plaintiff started again to claim the same amount to be paid to him, which amount would have been paid out to the plaintiff to the detriment of the University, if their colleague in crime, Mr. Philip Ihuoma former dismissed Ag. Bursar, had remained on seat.
- That the said plaintiff and Henry Hudson (W.A.) Ltd. and Philip Ihuoma had duped the University of Nigeria of the sum of N50,000.00 over alleged supply of Renock Wax Polish, which Henry Hudson and the plaintiff did not supply even one tin, but Philip Ihuoma the then Ag. Bursar paid out Cheques to Henry Hudson (W.A.) Ltd. and Orazulike Trading Company Ltd. whereof one Basil Okonkwo the alleged Managing Director of Henry Hudson signed for and collected all the cheques issued in the name of Henry Hudson (W.A.) Ltd. and Orazulike Trading
Company Ltd.
- That both the plaintiff and Henry Hudson (W.A.) Ltd. are in a ring with Philip Ihuoma, former Ag. Bursar to be duping and embezzling the University money and that is borne out from Exh. C. attached to the plaintiffs affidavit.
- That while Henry Hudson on 16/1/78 vide Exh. B of the plaintiffs affidavit required the Ag. Bursar, their partner in crime, to pay to the plaintiff the sum of N46,000.00 covering L.P.O. Nos. 27388 and 27384 on 25th May, 1978, the same Henry Hudson (W.A.) Ltd. wrote to their (sic) Ag. Bursar, demanding payment to it of N28,800.00 being cost for supply of Fay Toilet Rolls.
- That by 1978 May, the then Ag. Bursar Mr. Ihuoma who was in active fraud ring with the plaintiff and Henry Hudson (W.A.) Ltd. had been interdicted following the criminal charge of conspiracy and stealing of N50,000.00 property of the University of Nigeria along with B.A. Okonkwo of Henry Hudson as averred in paragraph 12 supra.”
I think some issues fit to be tried have been raised. The law is that where the defendant raises any substantial question of fact which ought to be tried, leave should be given to him to defend an action which had been placed on the undefended list: see Saw v. Hakim (1889) 5 T.L.R. 72. Leave will also be given where there had been an alleged misrepresentation by the plaintiff: see Wing v. Thurlaw (1893) 10 T.L.R. 151 C.A.; or where the alleged facts are of such a nature as to entitle the defendant to interrogate the plaintiff: see Harrison v Bottenheim (1878) 26 W.R. 362 at 363 per Bramwell, L.J.; or to cross-examine his witness on the affidavit he filed to support the action being placed on the undefended list: see Carta Pava Co. v Fastnedge (1882) 30 W.R. 880 C.A.; or where fraud is alleged in the transaction see Fuller v. Alexander (1883) 52 L.J. Q.B. 103.
It is at this stage pertinent to refer to the old English Rules upon which these cases were decided. They are Order III rule 6 and Order XIV rule 1a of the Judicature Act, 1875. It may be sufficient to state only Order XIV rule 1a which reads as follows:
“When the Defendant appears to a writ of summons specially indorsed under Order III, rule 6, the plaintiff may, on affidavit made by himself, or by any other person who can swear positively to the debtor cause of action, verifying the cause of action, and stating that in his belief there is no defence to the action, call on the Defendant to show cause before the Court or a Judge why the plaintiff should not be at liberty to sign final judgment for the amount so indorsed, together with interest, if any, and costs. A copy of the affidavit shall accompany the summons or notice of motion. The Court or a Judge may thereupon, unless the defendant by affidavit or otherwise satisfy the Court or a Judge that he has a good defence to the action on the merits, or disclose such facts as may be deemed sufficient to entitle him to defend, make an order empowering the plaintiff to sign judgment accordingly’”
(Emphasis mine).
The House of Lords considered this rule in John Wallingford v. The Directors of the Mutual Society (1880) 5 App Cas 685, where, in a claim for payment of sums of money, the defence set up was that of a denial and contradiction of the accounts on which the claim was founded. But the trial court refused the defendant the liberty to defend, except upon condition that he paid a definite sum into court. Lord Selhorne, L. C., at page 683 observed:
“Well, my Lords… the first point, upon which I wish to make a few observations, is that which alone is of really great public importance; namely, the principle upon which Order XIV ought to be applied. It is a very valuable and important part of the new procedure introduced under the Judicature Act, that the means should exist of coming by a short road to a final judgment, when there is no real bona fide defence to an action. But it is of at least equal importance, that parties should not in any such way, by a summary proceeding in Chambers, be shut out from their defence, when they ought to be admitted to defend. And I cannot but think that the facts of this case shew, (though I have not the least doubt that the Respondents’ advisers acted in perfect good faith,) that they made an application for a summary judgment under the 14th Order, in a case in which such an application was not proper, and ought not to have been made.”
Notwithstanding the wording of the said Order 14, it has been held by the House of Lords that it is not for the Court to go into the merits of the case when the defendant’s affidavit in support of his intention to defend is being considered. Lord Halsbury, i.e., said so in Jacobs v. Booth’s Distillery Company (1901) 85 L.T. 262. On his part Lord James of Hereford said in that same case at pages 262-263:
“The view which I think ought to be taken of Order XIV is that the tribunal to which the application is made should simply determine, ‘Is there a triable issue to go before a jury or a court?’ It is not for the tribunal to enter into the merits of the case at all.
We are not expressing any opinion whatever upon the merits of the case. It appears to me that there is a fair issue to be tried. On which side the chances of success are it is not for this House to determine.
See also Runnacles v. Mesquita (1876) 1 Q.B.D. 416. Now, turning to the applicable rule in the present case, I need to examine whether the trial Judge was right to have denied the appellants the opportunity to defend. Rules 9 to 13 of Order III of the High Court Rules deal with matters placed on the “undefended List.” I shall deal specifically with rules 11 and 12. Rule 11 reads:
“If the party served with the writ of summons and affidavit delivers to the Registrar, not less than five days before the day fixed for hearing, a notice in writing that he intends to defend the suit, together with the affidavit setting out the grounds of his defence, then and in such case the suit shall be entered in the general list for hearing.”
It seems quite clear from this rule that once the defendant sets out the grounds of his defence in an affidavit which prima facie show a triable issue requiring a full contest of the action, he is entitled to have the suit entered in the general list: see Jipreze v. Okonkwo (1987) 3 N.W.L.R. (Pt.62) 737 C.A. This rule gives far less stringent conditions for putting a cause in the general list than the old Order XIV rule 1a of the Judicature Act 1875 under which the defendant was required to satisfy the Court or a Judge of a “good defence to the action on the merits, or disclose such facts as may be deemed sufficient to entitle him to defend.” In spite of the requirements under that rule, it has been seen how the House of Lords took the view that it was not for the court to go into the merits of such a defence when considering an application to have the suit defended.
I think the trial Judge was in grave error to have considered the defence on the merits or to have reached a conclusion that the defence was not genuine under rule 11 when serious facts were disclosed by the appellants which called for evidence on both sides. To have said the defence was not genuine upon those facts amounted to having examined those facts as they are and decided the case on the merits at that stage, whereas what is required is that there should be a prima facie defence. I have earlier in this judgment set out what he held. Perhaps I should do so again here. He said:
“After considering the submissions of Mr. Ezeani for the defendants and Mr. Obegolu for the plaintiffs in the light of the above prima facie findings, I hold that the defendants have not only failed to show defence on merits but that the defences they raised in respect of their application under Order III rule 11 of the High Court Rules are not genuine.”
He seems to have imported the conditions under rule 12 to decide the application under rule 11. I think the learned Judge should have interpreted rule 11 as it stands and given it a fairly liberal meaning as compared with rule 12. Rule 12 reads:
“Where any defendant neglects to deliver the notice of defence and affidavit, as described in the last proceeding rule, within the time fixed by the said rule, the court may at anytime before judgment is entered, on an affidavit disclosing a defence on the merits and satisfactorily explaining his neglect, let in the defendant to defend upon such terms as the court may think just.”
This rule is modelled along certain Court Rules which require fairly strict conditions to be fulfilled before a party who is out of time may be given a hearing in his substantive matter or cause. That is to say, arguable grounds of appeal and satisfactory reasons for delay, in case of leave to appeal out of time: see Ibodo v. Enarofia (1980) 5-7 S.C. 42 at 51; University of Lagos v. Olaniyan (1985) 1 N.W.L.R. (Pt.1) 156 S.C.; Kiyawa v. Madawaki (1986) 2 N.W.L.R. (Pt.20) 113 C.A.; Obikoya v. Wema Bank Ltd. (1989) 1 N.W.L.R. (Pt.96) 157 S.C. Similar conditions are sometimes required when it is desired to set aside a default judgment in order to allow the defendant to defend: See Evans v. Bartlam (1937) 2 All E.R. 646 H. L.; Banque Generoise de Commence et de Credit v. Spetsai (1962) 1 All N.L.R. 496 F.S.C.
I venture to say that even under rule 12, the trial court will not have to go into the merits of the case on such affidavit and decide the case thereby. It is sufficient if the defence appears to show merit. What he has to determine at that stage is whether there is a triable issue to go before a court, that is to say, a fair issue to be tried, and a satisfactory reason for not complying with rule 11 in time. It would be quite irregular to decide the real merit of the case on affidavit evidence in those circumstances: see Jacobs v. Booth’s Distillery Co. (supra).
I am satisfied that this appeal has merit. It is accordingly allowed. The decision of the lower court together with the order as to costs is set aside. It is ordered that the appellants be granted leave to defend the action in order for the Court to hear and determine the same on the merits. It is further ordered that the action be transferred to Nsukka Judicial Division and heard by another Judge. I assess costs at N600.00 in favour of the appellants.
Other Citations: (1989) LCN/0065(CA)
