Victor Amede V. United Bank for Africa (2007)

LawGlobal-Hub Lead Judgment Report

UWANI MUSA ABBA AJI, J.C.A,

By a writ of summons and an affidavit in support of claim dated 15/01/2003, the Respondent herein as the plaintiff at the High Court, instituted an action in the Edo State High Court, Benin City against the Appellant as the Defendant herein claiming as follows:-

“(a) An order for the payment of the sum of N2,189,654:00 (Two Million, One Hundred and Eighty Nine Thousand, Six Hundred and Fifty Four Naira) being the amount standing to the debit on Account No. 601091242 as at 31/3/2002 due to Plaintiff from the Defendant by virtue of contract of Guarantee entered into between the parties on 3rd April 1989 at the request of the defendant in respect of the said account operated by Chief S.E. Okonofua, trading as Stesok Enterprises to secure overdraft facilities from the Plaintiff and which facilities the said Chief Okonofua and the defendant have failed, neglected and or refused to pay despite repeated demands by the Plaintiff within the jurisdiction of this Honourable Court.

(b) An order for the defendant to pay interest on the said sum of N2,189,654:00 (Two Million, One Hundred and Eighty Nine Thousand, Six Hundred and Fifty Four Naira) at the rate of 21% per annum with effect from 1st April, 2002 till judgment and at the rate of 10% thereafter till payment is realized.”

By a motion Exparte dated 15/01/2003, the Respondent applied to the trial court to set the matter down for hearing under the undefended list and to mark the writ of summons accordingly. These prayers were granted by the Honourable court on the 25/3/2003. By a memorandum of appearance together with a Notice of Intention to Defend, both dated 24/10/2003, the Appellants challenged the Respondent’s suit.

Arguments were canvassed by the parties on the 17/3/2004 and on the 29/7/2004, judgment was delivered wherein the Respondent’s claims were granted.

Being dissatisfied with the said judgment, the Appellant, filed an appeal to this court vide a notice and Grounds of Appeal dated 5th August, 2004 upon four (4) grounds of appeal. The Grounds of Appeal are hereby reproduced without their particulars:-

“(1) The learned trial Judge erred in law when he gave judgment in favour of the Plaintiff, based on an action that is clearly statute barred.

(2) The learned trial Judge erred in law when he ignored the provision of S.24(5) of the Limitation Law Cap. 89 Laws of Bendel State 1976 (as applicable in Edo State), which made an acknowledgment of any debt or other liquidated Pecuniary claim to bind only the acknowledgor and his successors but not any other person and also made an acknowledgment made after the expiration of the limitation period not to bind any successor on whom the liability devolves.

(3) In the alternative, the learned trial Judge erred in law when he entered judgment against the Defendant under the undefended list procedure, although the affidavit in support of notice of intention to defend the action clearly disclosed a bona fide defence on the merit.

(4) The decision is against the weight of evidence.”

In compliance with the Rules and Practice of this court, parties filed and exchanged briefs of argument. In the Appellant’s brief settled by S.O. Eimiuhi, Esq, learned counsel formulated two issues for determination of the appeal. The issues are:-

“(1) Whether the learned trial Judge was right when he held that the Respondent’s claim was revived by Exhibit ‘D’ and therefore not statute barred.

(2) If the answer to issue (1) above is in the affirmative, whether the learned trial Judge was right to have given judgment against the Appellant under the undefended list procedure despite the affidavit in support of notice of intention to defend, which prima facie disclosed a defence on the merit.”

In the Respondent’s brief settled by O. Eghobamien Esq, learned counsel also formulated two issues for determination, namely:-

“(a) Whether the learned trial Judge was right when he held that the plaintiffs/Respondent’s claim was not statute barred.

(b) Whether on the strength of the affidavit evidence in support of the Defendant’s/Appellant’s Notice of Intention to defend, the Defendant/Appellant has disclosed a defence on the merit to warrant a transference of the suit to the general cause list.”

When the appeal came up for hearing on the 14th May, 2007, S.O. Eimiuhi Esq, for the Appellant adopted and relied on the Appellant’s brief of argument dated and filed on the 11th/10/2005.

He expatiated on issue 1, that the action is statute barred and submitted that the action is based on Exhibit B, the contract agreement between the parties and that on t he face of Exhibit B, the Respondent has the right to demand for their payment against the Appellant immediately the overdraft was granted in 1989. He urged the court to dismiss the Respondent’s claim against the Appellant or remit the case for trial before another judge.

A.O. Eghobamien, Esq, also adopted and relied on the Respondent’s brief of argument dated 16/1/2006 and deemed properly filed on the 25/10/2006. Expatiated on issue (1) as to when a cause of action arise, learned counsel referred the court to page 37 of the record and urged the court to hold that the cause of action arose in 1998. That unless there is a demand the liability of the grantor does not arise. He submitted that the cause of action was within time. He also urged the court to discountenance the provision of Section 24(5) of the Limitation Law of Bendel State, that the Section is inapplicable, as it was not raised at the lower court. He referred to the case of I.D.S. Ltd vs. A.I.B. Ltd (2002) 4 NWLR (Pt. 758) 660 at 685, and submitted that the issue of interest raised by the Appellant does not arise at all in this appeal and therefore goes to no issue. He stated that there was no alternative relief in the grounds of appeal for sending the case back for retrial. We were urged to dismiss the appeal.

I have carefully looked at the issues raised in this appeal and it appears to me that they are pointing or leading to the same thing in a different tune, as Appellant’s issue 1 is identical with Respondent’s issue No.1, also the Appellant’s issue 2 is also the same in con with the Respondent’s issue 2. I will therefore adopt the issues as formulated by the Respondent in determining this appeal.

The facts of this case as can be gleaned from the affidavit evidence of the parties before the court was that, one Chief S.E. Okonofua trading as Stesok Enterprises was the owner of Account No. 601091242 with the Respondent Bank. The said Chief S.E. Okonofua in order to secure facilities at various times from the Respondent introduced the Appellant as guarantor to his said account and who is to pay the amount standing at the debit on his account in the event of default on his part. At the request of the Appellant, the Respondent entered into a contract of guarantee on the said account on the 3rd April, 1989 and the sum of N30,000:00 (Thirty Thousand Naira) was advanced to the said Chief S.E. Okonofua as overdraft facility on his account No.601091242. The said Chief S.E. Okonofua made use of the overdraft facilities by which he became indebted to the Respondent. When the bank discovered that the said Chief S.E. Okonofua was not servicing his account properly, which account had become inactive, when effort to reach the said Chief S.E. Okonofua failed, the Appellant was called upon by the Respondent to make good his guarantee by settling the debt, which the Appellant failed or neglected to pay hence this action.

The Appellant on the other hand denied the Respondent’s claim. He stated that he was not aware of any account No. 601091242 allegedly operated by Chief S.E. Okonofua and that he did not guarantee overdraft facility for Chief S.E. Okonofua let alone agree on an interest rate of 32% per annum. That he was not even aware that the Respondent approved an overdraft of N30,000:00 (Thirty Thousand Naira) for the said Chief S.E. Okonofua and that he was not informed by the Respondent. It is also stated that the Respondent was aware of the whereabout of the said Chief S.E. Okonofua.

Issue 1 for determination is whether the learned trial Judge was right when he held that the Respondent’s claim was not statute barred.

Arguing this issue, S.O. Eimiuhi Esq submitted that the Respondent’s claim is founded on a contract of guarantee Exhibit B which the Respondent sought to enforce and that the cause of action in the suit arose on the 3rd April, 1989, when the Appellant guaranteed repayment of the overdraft facility of N30,000:00 granted to one Chief S.O. Okonofua by the Respondent in respect of Account No. 601091242. It is submitted that by Section 4(1) (a) of the Limitation Law Cap 89 Laws of Bendel State ,1976 (as applicable in Edo State), the Respondent had six years from 3rd April, 1989, the date the cause of action accrued to bring an action to recover the alleged debt by Chief S.E. Okonofua and guaranteed by the Appellant. On the principles relating to the accrual of right of action of the creditor against the guarantor in matters of guarantee, it is submitted that two situations arise, firstly, that where the guarantor may not primarily undertake to discharge the liability but only if the principal debtor failed in his obligation. That the principal debtor has to default before the liability of the guarantor would arise. Secondly, it is submitted that where a person by his undertaking makes himself the real debtor, then the principal debtor simply drops out so that the guarantor becomes solely liable. In support of this submission learned counsel cited and relied on the case of Fortune International Bank Plc vs. Pegasns Trading Office (GmbH) & Ors (2004) 11 WRN 93 at 107, (2004) 4 NWLR (pt. 863) 369. It is the view of the learned counsel that the present case falls under the second category, that Exhibit B clearly gave the Respondent the unfettered right to demand or sue the Appellant for immediate payment or reimbursement of its money any time from the date the agreement was executed. It is further submitted that the right of the creditor to immediately sue the grantor for its money upon execution of the guarantee contract is no longer made conditional upon the default of the principal debtor, unless there is an express term in the contract to that effect, citing Fortune International Bank Plc. vs. Pegasns Trading Office (GmbH) (supra) at page 107; Africa Insurance Development Corporation vs. Nigeria Liquified Natural Gas Ltd (2000) 4 NWLR (Pt. 653) 494. It is also submitted that since there is no express term in Exhibit B which specifically made the right of the Respondent to demand or sue the Appellant for N30,000.00 debt conditional upon default by the principal debtor Chief S.E. Okonofua, the Respondent’s right to proceed against the Appellant accrued on the 3rd April, 1989. The following cases were also cited in support; Union Bank of Nigeria Plc. vs. Romanus Umeoduagu (2004) 121 LRCN 4972 at 4979 and 4983; Egbe vs. Adefarasin (1987) 1 NWLR (Pt. 47) 1 and Afolayan vs. Ogunride (1990) 1 NWLR (pt. 127) 369 at 384. It is submitted that unfortunately, the Respondents in the instant appeal went to sleep and its right which accrued on 3rd April 1989 terminated after six years by virtue of Section 4(1)(a) of the Limitation Law Cap. 89 Laws of Bendel State 1976 as applicable to Edo State. The following cases were also relied upon:- Chief E.W.J. Woherem JP vs. Joel Emereuwa (2004) 120 LRCN 4752 at 4765; Eboigbe vs. N.N.P.C. (1994) 18A LRCN 54; (1994) 5 NWLR (Pt. 347) 649 at 663.

It is further submitted that this suit was filed on 15/1/2003 about thirteen (13) years and nine months after the cause of action accrued. That it is therefore statute barred. It is thus submitted that the learned trial Judge erroneously held that Exhibit D written on 21st/1/1999 by Chief S.E. Okonofua written after the limitation time had expired revived the debt. S.O. Eimiuhi, Esq also referred to Section 24(5) of the Limitation Law (supra) and submitted that the Section made an acknowledgment of any debt or other liquidated pecuniary claim to bind only the acknowledgor and his successors but not any other person and also made an acknowledgment made after the expiration of the limitation period not binding on any successor on whom the liability devolves. It is submitted that the Appellant did not acknowledge the debt in issue and that the Appellant is also not a successor to the said Chief S.E. Okonofua, the acknowledgor. It is therefore submitted that by the combined effect of Sections 4(1)(a) and 24(5) and (8) of the Limitation Law (supra), Exhibit D did not revive the Respondent’s claim as wrongly held by the learned trial Judge and we were urged to resolve this issue in favour of the Appellant and to dismiss the Respondent’s claim.

Issue 2 is whether on the strength of the affidavit evidence in support of the Defendant’s notice of intention to defend, the Defendant/Appellant has disclosed a defence on the merit to warrant transference of the suit to the general cause list.

Arguing this issue, S.O. Eimiuhi, Esq, submitted that the learned trial Judge erroneously gave judgment against the Appellant under the undefended list procedure in view of the fact that the Appellant’s affidavit in support of notice of intention to defend prima facie disclosed a bona fide defence on the merit. Learned counsel referred to the notice of intention to defend the suit filed by them and the supporting affidavit and submitted that averments therein contained are a complete defence on the merit to the Respondent’s claim and the learned trial Judge ought to have ordered a trial in line with Order 23 Rule 3 (2) of the High Court Rules. That by the denials contained in paragraphs 2, 3, 4,5, 8, 9, 10 & 11, the Appellant fully controverted the Respondent’s claim and raised serious issues for the lower court to try. It is submitted that once a defendant put forward some facts which cast doubt on the claim of the plaintiff or lay the foundation for the existence of a triable issue or issues as was done by the Appellant in the instant case, the learned trial judge is duty bound to remove the case from the undefended list and enter same in the general cause list for hearing on pleadings. The following cases were relied upon; Ataguba Vs Guru Nig Ltd (2005) 18 WRN 1 at 20; Job Charles (Nig) Ltd & Ors VS. Dr. J.E.N. Okonkwo (2002) 20 WRN 25 at 42; F.M.G & Ors vs Sanni (1990) 4 NWLR (PT. 147) 688 at 699. It is also the view of learned counsel that Exhibit D that was heavily relied upon by the learned trial Judge to hold that the Respondent’s action was revived is prima- facie fraught with serious doubts that required further explanations that Exhibit D is in respect of a loan not an overdraft facility the subject matter of the suit. That Exhibit A was for an overdraft in Account No. 201068128. It is also the view of learned counsel that Exhibit D that was made long after the limitation period had expired had no binding effect on the Appellant and could not therefore revive the Respondent’s claim citing Ataguba vs. Guru Nig Ltd (supra) at page 30.

It is further submitted for the Appellant that Exhibit A, the application for the overdraft facility was in respect of Account No. 201008128 which is entirely different from Account No. 601091242. It is submitted that the Respondent did not explain the relationship or nexus between Account No. 201068128 on which Chief S.O. Okonofua made his application for overdraft facility and Account No. 601091242 on which the Respondent allegedly granted Chief S.B. Okonofua an overdraft facility. It is also submitted that the Respondent’s failure to exhibit some vital documents like the application for the facility relating to Account No. 601091242 in view of the Appellant’s strong denial to the Respondent’s claim is fatal to their case, citing Section 149(d) of the Evidence Act thereof. The Appellant also denied executing Exhibit B the contract of guarantee. It is also submitted that by proviso to clause 1(e) of Exhibit B at page 6B of the record, the liability of the guarantor was limited to N30,000:00 only and that the rate of interest charges was not indicated or stated. That there was no agreement or undertaking as to the rate of interest in Exhibit B and that the court cannot speculate on this. It is further submitted that there was no explanation as to how interest rate was calculated on the N30,000:00 overdraft from 3rd April, 1989 to arrive at a whooping sum of N2,189,654:00 on 31st March, 2002. It is also submitted that in view of the various numerous loopholes in the case of the Respondent, the learned trial Judge ought to have removed this case from the undefended list for trial in the ordinary cause list or for pleadings in line with Order 23 Rule 3(2) of the High Court (Civil Procedure) Rules 1988 as applicable in Edo State and the decision of the Supreme Court in Okamba Ltd vs. Sule (1990) 7 NWLR (Pt. 160) 1 at 13. The following cases were also relied upon; UTC (Nig) Ltd vs. Pamotei (1989) 2 NWLR (Pt. 103) 244 at 299 and Olubusola Stores vs. Standard Bank of Nigeria Ltd (1995) 4 SC 41. We were urged to resolve this issue in favour of the Appellant and to allow the appeal.

Replying, O. Eghobamien learned counsel for the Respondent submitted on issue 1 that Limitation legislation sets out limitation periods for different classes of case and that in order to determine if a party’s action is statute barred, the court is enjoined to look at the plaintiffs claim and no more. It is also submitted that if the writ was issued beyond the time allowed by the applicable Limitation Law, then the action can be said to be statute barred. The following cases were referred to; Sanni vs. Okene L.G. (2005) 14 NWLR (PT. 944) 60; Adaji vs. Amodu (1992) 8 NWLR. (Pt. 260) 472 at 479; UBA vs. Oki (1999) 8 NWLR (Pt. 614) 244 at 256; Emiator vs. Nigeria Army (1999) 12 NWLR (Pt. 631) 370 at 371. It is submitted that in the instant appeal, the writ of summons, the particulars of claim and the verifying affidavit revealed that the Respondent’s claim which was the refusal and or failure of Chief S.E Okonofua trading under the name and style of Stesok Enterprises to liquidate its indebtedness to the Respondent and the Respondent sued the Appellant to recover a simple debt being the guarantor of the debt following the default of Chief S.E. Okonofua to defray his indebtedness to the Respondent. It is submitted that by virtue of S.4(1)(a) of the Limitation Law (supra) the Respondent had six years within which to commence a recovery action against the said Chief S.E. Okonofua from the date on which the cause of action accrued. The following cases were referred to:- Savannah Bank of Nigeria Ltd vs. Pan Atlantic (1987) 1 NWLR (Pt. 49) 212; Edosomwan vs. A.C.B. Ltd (1995) 7 NWLR (Pt. 408) 472; Amata vs. Omofuma (1997) 2 NWLR (Pt. 485) 93 at 116. On the meaning of a cause of action and when it is said to accrue, the following cases were also referred to:- Egbe vs. Adefarasin (1987) 1 NWLR (Pt. 47) 1 at 20; Yusuf vs. Co-operative Bank Ltd (1994) 7 NWLR (PT. 359) 676 at 692; L.U.T.H & M.B. vs. Adewole (1998) 5 NWLR (Pt. 550) 406; Alao vs. N.I.D.B (1999) 9 NWLR (Pt. 617) 103; and Humbe vs. A.G. Benue State (2000) 3 NWLR (Pt. 649) 419 at 432. It is the view of learned counsel that in order for a cause of action to accrue in the case of simple debt, there must be both a demand and a refusal, just as in any case of detinue, and the cause of action accrues when the act of the defendant gives the plaintiff a cause of complaint. The following cases were also relied upon; Edosomwan vs. ACB Ltd (supra); Anigboro vs. Sea Trucks (Nig) Ltd (1995) 6 NWLR (Pt. 399) 35; Omosowan vs. Chiedozie (1998) 9 NWLR (PT. 566) 477 at 485; Adimora vs. Ajufor (1988) 3 NWLR (Pt. 80) 1; Kolo vs. First Bank Plc (2003) FWLR (Pt. 179) 130 at 1315; U.B.N. Ltd vs. Oki (supra) 244 at 252. It is submitted that in an action to recover debt, the cause of action accrues when the repayment of the credit/loan and overdraft facilities granted customer becomes due and a demand made in respect of same.

It is further submitted that it is an implied term of relationship between a banker and his customer that there should be no right of action for the recovery of an overdraft or loan until a demand or notice is given. The following cases were also relied upon; Kolo vs. First Bank Plc. (supra); Ishola vs. S.G.B. (Nig) Ltd (1997) 2 NWLR (Pt. 488) 405 at 422-423; Angyu vs. Malami (1992) 9 NWLR (Pt. 264) 242 at 252.

It is the view of learned counsel that upon the acknowledgment of the debt by Chief S.E. Okonofua vide Exhibit D a letter dated 21/01/1999; the Respondent’s cause of action has accrued thereon. The following cases were relied upon; Thadant vs. National Bank of Nigeria Limted (1972) 1 SC 105; Olaogun Enterprises Limited vs. S.J. & M (1992) 4 NWLR (Pt. 235) 361 at 382-388; and Mercantile Bank (Nig) Limited vs. Feteco (Nig) Limited (1998) 3 NWLR (Pt.540) 143. It is submitted that the cause of action could not have accrued on the 3/4/1989, the date the contract agreement was entered into by the parties as opined by the learned counsel for the Appellant. That the Respondent could not have brought an action against the Appellant, the cause of action having not yet arose. It is his view that the Respondent’s cause of action arose when Exhibit C was sent to Chief S.E. Okonofua and his acknowledgment vide Exhibit D, a letter dated 21/01/1999. That the Respondent issued its writ of summons on 15/01/03, a period of less than six years after the accrual of the cause of action citing the cases of FBN Ltd vs. Karusta-Akporido (1996) 8 NWLR (Pt. 469) 755 at 764; and Anogboro vs. Sea Trucks (Nig) Ltd (supra). It is his view that Section 24 (5) of the Limitation Law (supra) is not relevant and same should be discountenanced.

Learned counsel for the Respondent made an alternative submission should his submission on simple debt above is overruled. It is submitted that the current action against the Appellant is not statute barred. It is his view that a situation may arise where the creditors claim against the principal is barred by the provisions of the Limitation Law but not so barred against the surety, thus, the surety will remain liable on the guarantee. He relied on the case of Carter vs. White (1883) 25 ChD 666, that this is so because the mere omission to sue does not discharge the surety because the surety can himself set the law in operation against the debtor. The case of Wolmershausen vs. Gullick (1893) 2 Ch 514 was relied upon. On what the term guarantee means, learned counsel referred to the following cases; Trade Bank Plc. vs. Chami (2003) 13 NWLR (Pt. 836) 158 at 210; Royal Exchange Assurance (Nig) Ltd vs. Aswani ile Ind. (1992) 3 NWLR (Pt. 227) 1 at 13; Hydro Quest (MG) Ltd vs. B.O.N. Ltd (1996) 1 NWLR (Pt. 318) 41 at 43. It is submitted that a guarantor is technically a debtor because where the principal debtor fails to repay a debt, the guarantor will be called upon to pay the loan so guaranteed. The following cases were also referred to; Trade Bank Plc vs. Chami (supra); and Salawal Motor House Ltd vs. Lawal (1999) 9 NWLR (Pt. 620) 692 at 706.

It is further submitted that unless otherwise agreed in the contract of guarantee, the liability of the guarantor to the creditor arises on the principal debtors default, so that time begins to run in favour of both of them at that moment. The following cases were referred to; I.D.S. Ltd vs. A.I.B. Ltd (2002) 4 NWLR (Pt. 758) 660 at 685; Re-Brown’s Estate (1893) 2 Ch. 300; Bradford Old Bank vs. Sutcliffe (1918) 2 Kb 833; Parrs Banking Co. vs. Yates (1898) 2 QB 460; Esso Petroleum Co. vs. Alstonbridge properties Ltd (1975) 1 WLR 1474; Rickaby vs. Lewis (1905) 22 TLR 130; and London Guarantee Co. vs. Fearnley (1880) 5 AC 911.

It is submitted that by virtue of Exhibit B dated 3/4/89, the Appellant undertakes to pay on demand to the Bank ….. That Exhibit B by expressly providing for a demand to be made on the Appellant, the Respondent’s cause of action accrues against the Appellant when Exhibit F dated 24/5/99 was made on him and not complied with. Paragraph 13 of the verifying affidavit in support of the claim at page 5 of the record was referred to. We were therefore urged to hold that the action against the Appellant arose on 24/5/99 and not 3/4/89 when Exhibit B was made. The case of Auto Import Export vs. Adebayo & Ors (2005) 19 NWLR (pt. 959) 44 at 127 was referred to.

It is further submitted that parties are bound by their agreement and where the document is clear and unambiguous, a court of law must give strength to the plain and bare words without any hesitation or quibble. The following cases were also relied upon: – Africa Reinsurance Corporation vs. Fantaye (1986) 1 NWLR (Pt. 14) 113; Anason Farms Ltd vs. Nal Merchant Bank Ltd (1994) 3 NWLR (pt, 331) 241 at 253; Union Bank of Nigeria Ltd vs. Prof. A.O. Ozigi (1994) 3 NWLR (Pt. 333) 385 at 404; Nwangwu vs. Nzekwe & Anor (1957) 2 FSC 36; Solicitor General, Western Nigeria vs. Dr. Adebonojo & Ors (1971) 1 All NLR 178 at 191. Section 32(1) of the Evidence Act (1990) was referred to. We were urged to hold that the Respondent’s action was duly commenced on the 15/1/2003, the cause of action having arisen on 24/5/99 and was therefore proper and not statute barred.

Learned counsel submitted that the case of F.I.B. Plc vs. Pegasus Trading Office (GmbH) & 0rs (2004) 4 NWLR (pt. 863) cited and relied upon by the learned counsel for the Appellant is more relevant to the Respondent case in this appeal on the premise that there is an express term in the contract Exhibit B that the Respondent can only proceed against the Appellant upon the default of Chief S.E. Okonofua and on demand being made by the Respondent in respect of same. It is submitted that where an agreement or a document is plain, clear and unambiguous, extrinsic evidence shall not be allowed to vary or contradict same as enjoined by Section 32(1) of the Evidence Act. We were urged to give Exhibit B its natural meaning as same is clear and unambiguous and discountenance the arguments of the Appellant on same. We were therefore urged to resolve this issue in favour of the Respondent.

Replying on issue 2, O. Eghobamien, Esq referred to the following cases on the principles governing the Undefended List Procedure, Haido vs. Usman (2004) 3 NWLR (Pt.859) 65 at 79 – 80; Scofin Consultants Services vs. Asumah (2002) FWLR (Pt.130) 1729 at 1747, and Nortex (Nig.) Ltd. vs. Frame Tools (1997) 4 NWLR (Pt.501) 603. He submitted that where the defendant gives a notice of intention to defend together with the affidavit but the court is not satisfied that there is a bonafide issue for trial between the plaintiff and the defendant, then and only in a such a case the suit shall be heard as an undefended suit without calling upon the plaintiff to summons witnesses before the court to prove his case formally. The following cases were referred to:-Nobike vs. Nwigwe (2000) 1 NWLR (Pt.642) 620 at 638; C.C.B. (Nig.) Plc. vs. Samed Investment Co. Ltd. (2000) 4 NWLR (Pt.651) 19 at 30; Nya vs. Edem (2000) 8 NWLR (Pt.669) 349 at 357; Grand Cereals & Oil Mills Ltd. vs. As-Abel Interl Mart & Property Ltd. (2000) 4 NWLR (Pt.632) 301 at 321 – 322; and Knightsbridge Ltd. vs. Atamako (2000) 2 NWLR (Pt.645) 382 at 39. It is further submitted that the defendant must in his affidavit delivered with the notice of intention to defend depose to facts which if proved will amount to his defence or constitute a defence. To be allowed to defend, the defendant must satisfy the court with the following:-

(a) The defendant affidavit must condescend upon particulars and as far as possible deal specifically with the plaintiff’s claim and affidavit and should state clearly and concisely what the defence is,

(b) A mere denial by the defendant of the plaintiff’s indebtedness is not enough.

(c) That only defence on the merit are allowed.

(d) The defendant must provide sufficient particulars to show that there is a bonafide defence.

(e) That where the defendant raises legal objection, the fact and the point of law arising therefrom must be clearly and adequately stated.

In support of this, learned counsel referred to the cases of:- Nigeria Oil Mills Ltd vs. Allied International Limited (2003) FWLR (Pt. 154) 545 at 558 and Sanusi Bros (Nig) Ltd vs. Cortia C.E.I.S.A (2000) 11 NWLR (Pt.679) 566. It is thus submitted that the Appellant had failed to sufficiently demonstrate that he has a bonafide defence to the Respondent’s claim. That the Appellant in paragraph 2 of affidavit in support of notice of intention to defend made a general denial without establishing sufficient particulars to show that there is a bonafide defence. It is submitted that it is not sufficient for the affidavit to allege generally that the Defendant has a good defence to the action if such general averment is unsupported by particulars which if proved would constitute such a defence. The cases of: Peter Tiwell (Nig) Ltd vs. Inland Bank (Nig) Ltd (1997) 3 NWLR (Pt. 494) 408 at 419; John Holt & Co. (LiverPool) Ltd vs. Fajemirokun (1961) All NLR 492; Eastern Nigeria Development Corporation vs. Durunna (1966-67) 10 ENLR 201 and Agwuneme vs Eze (1990) 3 NWLR (PT. 137) 242 at 254. It is further submitted that whether a defendant has a defence on the merit must be answered from the affidavit in support of the notice of intention to defend and no more. The following cases were also relied upon:- Jos North Local Govt. vs. Daniyan (2000) 10 NWLR (Pt. 675) 281 at 290; Bature vs. Savannah Bank of Nigeria Ltd (1998) 4 NWLR (Pt. 546) 438; Akinyemi vs. Gov. Oyo State (2003) FWLR (Pt. 140) 1821 at 1831; Bauchi LGC vs. Abdul-Salami (2003) FWLR (Pt. 151) 1861 at 1883; Nigeria Oil Mills Ltd vs. Allied Ind. Ltd (2003) FWLR (Pt. 154) 545 at 553-554. It is submitted that, if the court forms an opinion that the affidavit does not disclose a defence on the merit or a triable issue, the court is to proceed with the hearing of the suit as an undefended suit and enter judgment accordingly without calling on the defendant, even if present in court, to answer or to be heard, relying on the cases of A.C.B. Ltd vs. Gwagwada (1994) 5 NWLR (Pt. 342) 25 and Haido vs. Usman (2004) 3 NWLR (Pt. 859) 65 at 83 per Umoren, JCA.

It is further submitted that the Appellant has not denied the execution of Exhibit B nor show that he is not the maker of the said Exhibit. It is thus submitted that where a person of full age executes a formal deed with full knowledge of the nature of the document it will not avail him to seek to nullify the contract by complaining that he did not know the contents of the deed. The following cases were also relied upon:- Igbinosa vs. Cole Aiyobagbiegbe (1969) 1 All NLR 99; Vincent O. Awosile vs. Chief F.O.D. Sotubo (1992) 5 NWLR (Pt. 243) 514 at 526-527; Sylvester D.E. Egbease vs.Augustine O. Oriareghan (1985) 10 SC 80 at 91 – 92.

It is also submitted that Exhibit B contrary to the submission of the Appellant need not be executed by the Respondent before it becomes valid in that the relevant ingredients of contract of guarantee are present in the said Exhibit and even where it is defective the Appellant cannot be allowed to wriggle out of his commitment relying on the following cases:- N.I.M.B vs. Narindex Trust Ltd (1998) 13 NWLR (Pt. 581) 404 at 418; U.T.S.U vs. Oko (2001) 33 WRN 131 at 141; F.I.B. Plc vs. Pegasus Trading Office (GmbH) & Ors (supra).

In response to paragraphs 5 and 8 of the Appellant’s affidavit of notice of intention to defend, it is submitted that the Respondent is generally under no duty to disclose material facts to the surety, that a contract of guarantee unlike contract of insurance, is not to be treated as a contract uberrimae fidei – of the utmost good faith. The following cases were also referred to: – North British Insurance co. vs. Lloyd (1854) 10 Ex ch 523; London General Omnibus co. vs. Holloway (1912) 2 KB; United African Co. Ltd vs. Jazzar (1990) 6 WACA 208; and Seaton vs. Heath (1899) 1 QB 782 per Romer, LJ, at pages 792 – 793; Whythes vs. Labouchere (1859) 3 De G & J 593 at 609 and London General Omnibus Co. vs. Holloway (supra). That in the instant case it was not stated in the Appellant’s affidavit that he actually makes specific inquiries on the overdraft facility from the respondent. It is thus submitted that the only point of law raised was the statutory limitation, which can be determined without necessarily taking evidence from witnesses. The following cases were also referred to:- Amata vs. Omofuma (supra); Egbe vs. Adefarasin (supra); Grains production Agency vs. Ezegbulem (1999) 1 NWLR (Pt. 587) 399 at 408 and FBN Ltd vs. Chief Jubilee Karusta-Akporido (supra).

It is also further submitted that the disclosure of a good defence in Defendant’s affidavit entitles the Defendant to an order giving him leave to defend and in the instant case, the learned trial Judge was satisfied that the Defendant’s affidavit did not disclose a good defence to entitle him leave to defend. The following cases were referred to:- Kenfrank (Nig) Ltd vs. U.B.N. Plc (2002) 8 NWLR (Pt. 789) 46 at 70, per Ikongbeh, JCA (of blessed memory) at page 71; Nishizawa Ltd vs. Jeshwani (1984) 12 SC 234 at 246.

On the issue of interest, it is submitted that by virtue of Order 40 Rule 7 of the High Court Rules, the court can grant a 10% maximum interest citing the case of Nwankwo vs. Ecumical (2002) 3 NWLR (Pt. 749) 513 at 519. It is further submitted that where the surety guarantees all the obligations of the principal, as in the instant case, he will be liable for interest as one of the obligations guaranteed even though not expressly provided for, citing the following cases:- Ackerman vs. Ehrensperger (1846) 16 M & W 99; Dawson vs. Raynes (1826) 2 Russ 466; Re Dixon, Heynes vs. Dixon (1902) 2 CH 561. In conclusion learned counsel referred to the following cases:- Macaulay vs. Nal Merchant Bank Ltd (1990) 4 NWLR (Pt. 144) 283; Federal Military Govt. vs. Sanni (1990) 4 NWLR (Pt. 147) 688 and Ben Thomas Hotels Ltd vs. Sebi Furniture Co. Ltd (1989) 5 NWLR (Pt. 123) 523. We were urged to resolve issue 2 in favour of the Respondent and to dismiss the appeal.

The Respondent’s claim before the trial court was by virtue of contract of guarantee entered into between the parties on 3rd April, 1989 at the request of the Appellant in respect of account No. 601091242 operated by Chief S.E. Okonofua, trading as Stesok Enterprises to secure over draft facilities from the Respondent and which facilities the said Chief S.E. Okonofua and the Appellant have failed, neglected and or refused to pay despite repeated demands by the Respondent.

The argument canvassed for the Appellant was that the action was statute barred having commenced on the 15th January 2003 thirteen years and nine months after the date the cause of action in the case accrued being 3rd April, 1989 when the Appellant guaranteed repayment of an overdraft facility of N30,000:00 (Thirty Thousand Naira) granted to one Chief S.E Okonofua by the Respondent. That the action is statute barred by virtue of the provision of Section 4(1)(a) of the Limitation Law Cap 89 Laws of Bendel State (as applicable in Edo State). It is contended that by virtue of the provisions of the Limitation Law, the Respondent had six years from 3rd April, 1989, the date the guarantee contract was entered into to bring an action to recover the debt owed by Chief S.E. Okonofua. Section 4(1)(a) of the Limitation Law (supra) provides:-

4(1) The following actions shall not be brought after the expiration of six years from the date on which the cause of action accrued that is to say:-

(a) actions founded on simple contract or on tort.”

The Appellant relying on the case of Fortune International Bank Plc vs. Pegasus Trading Office (GmbH) (supra) on the principles relating to the accrual of a right of action of the creditor against the guarantor in matters of guarantee of this nature, submitted that the Law recognizes the right of the creditor to proceed against the guarantor without or independent of the incident of the default of the principal debtor. That Exhibit ‘B’ the guarantee agreement in the instant appeal gave the Respondent the unfettered right to demand or sue the Appellant for immediate payment of or reimbursement of its money any time from the date the agreement was executed.

The main purpose of the Limitation period is to protect a defendant from injustice of having to face a stale claim. It is now trite that in order to determine if a parties action is statute barred, the court is only enjoined to look at the plaintiff s claim. The period of Limitation is determined in a case by looking at the writ of summons and the statement of claim which alleges when the wrong suffered by the plaintiff was committed and placing it side by side with the date on which the writ was issued. If the writ was issued beyond the time allowed by the applicable Limitation Law, then the action can be said to be statute barred. See Sanni vs. Okene LG (supra); Adeji vs. Amodu; U.B.N vs. Oki; Emiafor vs. Nigeria Army (supra).

In the instant appeal, a careful look at the writ of summon, the particulars of claim and the verifying affidavit reveals that the complaint in the Respondent’s claim is the refusal or failure of Chief S.E. Okonofua to liquidate its indebtedness to the Respondent. The purport of the Respondent’s claim therefore was to recover a simple debt from the Appellant, being the guarantor of the debt following the default of Chief S.E. Okonofua to repay his indebtedness to the Respondent. The question that arises is, what is a cause of action and when does a cause of action said to accrue or arise for the recovery of a simple debt? In Egbe vs. Adefarasin (1987) 1 NWLR (Pt. 47) 1 at 20 Oputa JSC defined ’cause of action’

“as the facts which establishes or give rise to a right of action. It is the factual situation which gives a person a right to a judicial relief.”

See also Yusuf vs. Cooperative Bank Ltd (1994) 7 NWLR (Pt. 359) 676; Alao vs. N.I.D.B (1999) 9 NWLR (Pt. 617) 103 and Humbe vs. A.G. Benue State (2000) 3 NWLR (Pt.649) 419 and L.U.T.H & M.B. vs. Adewale (1998) 5 NWLR (Pt. 550) 406. The cumulative effect of these cases shows that the test of determining when a cause of action begins to run is when it can be said or there exist in the person who can sue on all the facts that have happened which are natural to prove that the plaintiff is entitled to judgment. That notwithstanding, a cause of action has to be looked at from the peculiar circumstances of any given case. Thus, when a cause of action is said to have arisen varies from one case to another and it is always the function of the facts of the case which gives rise to a right of action thus entitling the person to a judicial relief. Thus time in relation to cause of action begins to run when there is in existence a person who can sue and another who can be sued and all facts have happened which are material to be proved to entitle the plaintiff to succeed.When dealing with statute of Limitation as in this case, it is necessary to determine the precise date upon which the cause of action arose because time will begin to run when the cause of action arose. A cause of action for the recovery of simple debt, just as in the case of detinue accrues only if a person in possession of money or goods has refused to surrender the money or goods after demand has been made for its payment or delivery. What this simply means is that generally a debt is repayable either on demand or on notice given or upon any other condition agreed upon by the parties. See Omosowan vs. Chiedozie (1998) 9 NWLR (Pt. 566) 477 and Ishola vs. S.G.B. (Nig) Ltd (1997) 2 NWLR (Pt. 488) 405 and Edosomwan vs, A.C.B Ltd (1995) 7 NWLR (Pt. 408) 472.

In the instant case, Chief S.E. Okonofua trading under the name and style of Stesok Enterprises applied vide Exhibit A for an overdraft facility of N30,000:00 and same was guaranteed by the Appellant vide Exhibit B dated 3rd April, 1989. Paragraph 2 of Exhibit B at page 6B lines 10-11 of the record of appeal provides as follows:-

“Mr. Victor Amede of No. 1 Amede Avenue, G.R.A, Benin City (hereinafter called the Guarantor (s) HEREBY GUARANTEE payment to the Bank on demand… The underlining is for emphasis.

It is therefore clear that the guarantee agreement provide for a demand before repayment can be effected. This being so, it is my view that the cause of action in this case arose when a demand letter, Exhibit C was written to Chief S.E. Okonofua by the Respondent on the 24th September, 1998. The moment a demand was made for the repayment of the loan, time begins to run as that was the moment that the cause of action arises and there is a person who can sue and another who can be sued and when all facts have happened which are material to be proved to entitled a plaintiff to succeed. See. Edosomwan vs. A.C.B Ltd (supra) Anigboro vs. Sea Trucks (Nig) Ltd (1995) 6 NWLR (Pt. 399) 35; Omosowan vs. Chiedozie (supra); Adimora vs. Ajufor (1988) 3 NWLR (Pt.8)) 1; Kolo vs. First Bank Plc (2003) FWLR (Pt. 179) 1303 and U.B.N. Ltd vs. Oki (1999) 8 NWLR (Pt. 614) 244.

The argument put forward by the learned counsel for the Appellant that Respondent’s cause of action accrued on 3rd April, 1989 the date the contract of guarantee was entered into by the parties is not tenable as at that date the Respondent could not have brought an action against the Appellant, the guarantor, the cause of action having not yet accrued. While it is true that the right of the creditor to immediately sue the guarantor for its money upon execution of the guarantee contract is no longer made conditional upon the default of the principal debtor, this is so only where there is an express term in the contract agreement to that effect.

In the instant case, not only that there is an express term in the contract agreement that provided for a demand and it is also settled that the liability of the grantor becomes due and mature, immediately the debtor becomes unable to pay his outstanding debt. The guarantor’s liability is then said to have crystallized. See Royal Exchange Assurance (Nig) Ltd vs. Aswani iles Ltd (1992) 3 NWLR (Pt. 227) 1; Ebano Finance and Securities Ltd vs. Wole-Ojo Technical Services Ltd & Ors (1996) 7 NWLR (Pt. 461) 464 and Salawal Motor House Ltd & Anor Vs. Lawal & Anor (1999) 9 NWLR (Pt. 620) 692. See also Fortune International Bank Plc vs. Pegasus Trading Office (GmbH) (supra) and Auto Import Export vs. Adebayo (2005) 19 NWLR (Pt. 959) 44

Therefore, the cause of action in this case accrued when Chief S.E. Okonofua wrote the acknowledgment letter Exhibit D on the 21st January, 1999. The Respondent issued its writ of summons on the 15th January, 2003, a period of less than six years after the accrual of the cause of action, the action is therefore not statute barred. See First Bank of Nigeria Ltd vs. Karusta-Akparido (1996) 8 NWLR (Pt. 469) 755. To accept the submission of learned counsel for the Appellant that the accrual date of the cause of action was 3rd April, 1989 when the contract of guarantee was entered into is like, as the Respondent’s counsel submitted would be putting the cart before the horse, as without the cause of action having arisen, it is impossible to say that a given action was statute barred or not as it will be premature to so hold. Also, where an overdraft is granted by a bank, the cause of action should not be deemed to have arisen until there has been a demand made or notice given. This is so because it is an implied term in a relationship between a banker and his customer that there should be no right of action for the payment of an overdraft until there has been a demand made or notice given. The cause of action does not arise until the demand is made or notice given. Where therefore, there is no specific date agreed upon for the repayment of the overdraft, as in the present case, a demand should be made or notice given. In short, it is only logical to say that a demand was to be made before the cause of action arises. See Angyu vs. Malami (1992) 9 NWLR (Pt. 264) 242; and Ishola vs. S.G.B. (Nig) Ltd (supra).

In the circumstances therefore the finding by the learned trial Judge, that Chief S.E. Okonofua resurrected and or revived the debt by Exhibit D written on 21/1/1999 is not to say the least proper in the circumstance because if the suit is statute barred so it shall be and cannot be revived or resurrected from death. It cannot be brought back to life if it is dead and buried. The effect of Exhibit D is that the cause of action matures or arises upon Chief S.E. Okonofua’s acknowledgment of the debt vide Exhibit D. What this means is that the cause of action accrued thereon. The debtor has recognise the existence of the debt or the existence of a right of recourse against himself and time will start to run for the purpose of Limitation Law from when the cause of action arose, thus the necessity to determine the precise date the cause of action arose. Once a banker makes a formal demand for payment and the customer refuses to pay within a stated deadline or a reasonable period, the banker’s cause of action would accrue. See Thadant vs. National Bank of Nigeria Ltd (1972) 1 SC 105; First Bank of Nigeria vs. Karusta-Akporido (1996) 8 NWLR (Pt. 469) 755. In the instant appeal the facts as revealed by the affidavit evidence before the lower court, was that Chief S.E Okonofua took an overdraft guaranteed by the Appellant and the said Chief S.E. Okonofua failed to pay back the loan when repayment was demanded.

The term guarantee means a written undertaken made by one person to another to be responsible to that other if a 3rd person fails to perform a certain duty, for example payment of a debt. The liability of the guarantor becomes crystallized immediately the 3rd party was unable to pay its outstanding debt. Thus, a guarantor is technically a debtor because where the principal debtor fails to repay a debt the guarantor will be called upon to pay the loan so guaranteed. The guarantor can, however be absolved from liability if he can show that the principal debtor has paid the loan, such has not been established by the Appellant. See Trade Bank Plc vs. Chani (2003) 13 NWLR (Pt. 836) 158 and Salawal Motor House Ltd VS. Lawal (1999) 9 NWLR (Pt. 620) 692. Unless otherwise agreed, in a contract of guarantee, the liability of the surety to the creditor arises on the principal debtor’s default, so that time begins to run in favour of both of them from that moment. If the surety undertakes to pay on demand, the creditors cause of action accrues when a demand is made and not complied with. See I.D.S Ltd vs. A.C.B. Ltd (2002) 4 NWLR (Pt. 758) 660; Auto Import Export vs. Adebayo (2005) 19 NWLR (Pt. 959) 44.

In the instant appeal having expressly stated in Exhibit B that the liability of the Appellant can only arise upon default of Chief S.E. Okonofua to pay or discharge his indebtedness to the Respondent and upon a demand being made on the Appellant in respect of. same, by providing expressly for a demand to be made on the Appellant, the Respondent’s cause of action accrues against the Appellant when Exhibit ‘F’ dated 24th May, 1999 was made on him and not complied. It is trite that parties are bound by their agreement and where the document is clear and unambiguous a court of law must give strength to the plain and bare words without any hesitation or quibble. In such a situation, it is not the function of the court to search for interpretation and assign meaning that is convenient or comfortable to one of the parties or to the court itself. That is never the function of the court, as the court has no jurisdiction to rewrite an agreement for the parties. See African Reinsurance Corporation vs. Fantaye (1986) 1 NWLR (Pt. 14) 113; Anason Farms Ltd vs. Nat Merchant Bank Ltd (1994) 3 NWLR (Pt. 331) 241 and U.B.N. Ltd vs. Prof. A.O. Ozigi (1994) 3 NWLR (Pt. 333) 385.

Based on the foregoing, it is my candid view that this action is not statute barred within the meaning of the provisions of Section 4(1)(a) of the Limitation Law Cap 89 Laws of Bendel State 1976 as applicable in Edo State. This also goes to show that Section 24 (5) and (8) of the said Law is irrelevant to the present suit. Consequently, this issue is hereby resolved in favour of the Respondent and against the Appellant.

I now move to issue 2, which is, whether on the strength of the affidavit evidence in support of the Defendants/Appellant’s Notice of Intention to Defend, the Defendant/Appellant has disclosed a defence on the merit to warrant a transference of the suit to the general cause list.

The argument canvassed for the Appellant on this issue was that the learned trial Judge erred in law when he gave judgment against the Appellant under the Undefended List Procedure in view of the fact that the Appellant’s affidavit in support of Notice of Intention to Defend prima facie disclosed a defence on the merit. It is also submitted that the Appellant complied with Order 23 Rules 3(1) of the High Court (Civil Procedure) rules 1988 as applicable in Edo State. Order 23 of the High Court (Civil Procedure) Rules (supra) provides:-

“1. Whenever application is made to a court for the issue of a writ of summons in respect of a claim to recover a debt, liquidated money demand or any other claim and the application is supported by an affidavit setting forth the grounds upon which the claim is based and stating that in the deponent’s belief there is no defence thereto, the Court shall, if satisfied that there are good grounds for believing that there is no defence thereto, enter the suit for hearing in what shall be called the “Undefended List”, and mark the writ of summons accordingly, and enter thereon a date for hearing suitable to the circumstance of the particular case;

2. ……………………………………………………. …………………………………………………….

3. (1) If the party served with the writ of summons and affidavit delivers to the Registrar, not less than five days, before the date fixed for hearing a notice in writing that he intends to defend the suit, together with an affidavit disclosing a defence on the merit, the Court may give him leave to defend upon such terms as the court may think just.

(2) Where leave to defend is given under this rule, the action shall be removed from the Undefended List and placed on the Ordinary Cause List; and the Court may order pleadings, or proceed to hearing without further pleadings.

(4) Where any defendant neglects to deliver the notice of defence and affidavit prescribed by rule 3(1) or is not given leave to defend by the Court, the suit shall be heard as an undefended suit, and judgment given thereon, without calling upon the plaintiff to summon witnesses before the court to prove his case formally.

(5) Nothing herein shall preclude the Court from hearing or requiring oral evidence, should it so think fit, at any stage of the proceedings under rule 4.”

The provisions of the Rules are clear. It deals with principles governing the determination of suit brought under the Undefended List. Where a writ of summons is placed before a court in respect of a claim to recover debt or liquidate money demand accompanied by another process setting forth the grounds upon which the claim is based and stating that in his (plaintiff) opinion there is no defence thereto, the trial Judge is under a duty in law to examine those processes presented very carefully to ensure firstly that the plaintiff complied with the provisions of the rules under which the summons was founded. This is to ensure safeguards, which must of necessity be available to the defendant. If satisfied with the compliance and the grounds upon which the claim was founded, the trial Judge must then by force of law, enter the suit on the “Undefended List” and cause the writ to be so marked. A Defendant who upon service on him of the process placed on the Undefended List who wants to be heard on the matter, must deliver to the Registrar of the court a notice in writing that he intends to defend the suit together with an affidavit disclosing a defence on the merit. Let me say here that a general statement or deposition in the affidavit that the Defendant has a good defence to the action will not satisfy the requirement of the law. Until the court is satisfied that the Defendant is invited to plead by filing a notice of intention to defend disclosed a prima facie case, the point cannot be reached where the burden of proof can, in 1aw be deemed to have shifted to the Defendant. Two conditions must co-exist before the plaintiff can be entitled to judgment under this rule. When it is said that a Defendant who intends to defend the action must disclose that he has triable issues or a bona fide issue or a defence on the merit, it means no more than that he must raise a genuine issue which will preclude the trial Judge from entering a summary judgment even for reason of creating the slightest doubt as to facts. See Olubusola Stores vs. Standard Bank of Nigeria Ltd (1975) 4 SC 51; Obi vs. Nkwo Market Community Bank Ltd (2001) 2 NWLR (Pt. 696) 113; Odu vs. Agbor-Memeso (No.2) (2003) 2 NWLR (Pt. 804) 355; and Jipreze vs. Okonkwo (1987) 2 NWLR (Pt. 62) 373.

It must always be remembered that in an action on the Undefended List, once a Judge is satisfied that the plaintiff had fully complied with the provisions of the applicable rules and the defendant is clearly seen as not having defence on the merit to the claim, the trial Judge has no discretion in the matter any more than to enter judgment in favour of the plaintiff in accordance with the reliefs sought by him. Thus, before a defendant could be allowed to defend under the Undefended List procedure, he must satisfy the court of the following:-

“(1) The defendant’s affidavit must condescend upon particulars and as far as possible deal specifically with the plaintiff’s claim and affidavit and should also clearly and concisely state what the defence is.

(2) A mere denial by the defendant of the plaintiff’s indebtedness is not enough. The affidavit should state why the defendant is not indebted in full or in part and state the true position.

(3) Only defences on the merit are allowed. The defendant cannot rely on a sham defence.

(4) In all cases, the defendant must provide sufficient particulars to show that there is a bona fide defence.

(5) Where the defendant raises legal objection, the fact and merit of law arising therefrom must be clearly and adequately stated.”

See Nigeria Oil Mills Ltd vs. Allied International Ltd (2003) FWLR (Pt. 154) 545 at 558 and Sanusi Bros (Nig) Ltd vs. Cortia C.E.I.S.A. (2000) 11 NWLR (Pt. 679) 566.

In the instant case, the Appellant filed a notice of intention to defend together with an affidavit wherein he claimed to disclosed triable issues and would have warranted transfer of the suit to the General Cause List. Paragraphs 2 – 11 of the affidavit are hereby reproduced:-

“2. That paragraphs 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16 and 17 of affidavit in support are false.

3. That I am not aware of Account No. 601091242 allegedly operated by Chief S.E. Okonofua and I did not guarantee any overdraft facility for the said Chief S.E. Okonofua on the said Account.

4. That I did not also agree on an interest rate of 32% per annum or any interest on the alleged overdraft.

5. That I am not aware that the plaintiff approved an overdraft facility of N30,000:00 (Thirty Thousand Naira) for the said Chief S.O. Okonofua as I was not informed by the plaintiff.

6. That the plaintiff is aware of the whereabout of Chief S.E. Okonofua whom it sued on 14th August 1999 in suit No.B/548/99. The said Chief S.E. Okonofua resides at No.6 Omorogieva Street Upper Mission Road, Benin City.

7. That the said suit No. B/548/99 was struck out on the 22nd October, 2001 with N1,000.00 (One Thousand Naira) cost against the plaintiff for lack of diligent prosecution.

8. That I am not aware of Exhibits ‘C’, ‘D’, ‘E’, ‘F’, and ‘G’ referred to in the affidavit in support of claim. The plaintiff did not notify me of same.

9. That my solicitor S.O. Eimiuhi Esq informs me and I verily believe him that this action is statute barred as the cause of action in this suit arose in 1989.

10. That the plaintiff has no cause of action against me

11. That I have a good defence to this action.

12. ……………….

The learned trial Judge in coming to the conclusion that the Appellant had no defence to the claim of the Respondent held at page 37 lines 21 – 30 of the record of appeal thus:-

“The affidavit in support of the Notice of Intention to defend did not specifically deny that Exhibits’ A’, ‘B’ and ‘D’ of the affidavit in support of the plaintiffs claim were made by Chief S.E. Okonofua and that Exhibit ‘G’ was the account of the said Chief S.E. Okonofua. The general denial of paragraph 2 of the affidavit in support of Notice of Intention is not enough denial. The defendant is deemed to have admitted the said Exhibits ‘A’, ‘B’, ‘D’ and ‘G’. On the whole, I am of the view that the Defendant has no defence to the claim of the plaintiff.”

The learned trial Judge entered judgment for the Respondent under the Undefended List after he considered the bare denial of the Appellant to the Respondent’s claim without any particulars which if proved would afford the Appellant a defence as not sufficient to transfer the matter to the General Cause List and refused the Appellant leave to defend the action and consequently entered judgment for the Respondent. The learned trial Judge was right and cannot be faulted. The Appellant had failed to sufficiently demonstrate that he has a bona fide defence to the Respondent’s suit. In paragraph 2 of the affidavit in support of the notice of intention to defend the Appellant made a general denial without establishing sufficient particulars to show that there is a bona fide defence. It is not sufficient for the affidavit to allege generally that the Defendant has a good defence to the action if such a general averment is unsupported by particulars which if proved would constitute such a defence: See Peter Tiwell (Nig) Ltd vs. Inland Bank (Nig) Ltd (1997) 3 NWLR (Pt. 494) 408 at 419; John Holt & Co. (Liverpool) Ltd vs. Fajemirokun (1961) All NLR 492.

It is trite that, the question whether a defendant has a defence on the merit must be answered from the affidavit in support of the notice of intention to defend and no more. It cannot be answered from the counsel’s address or from brief of argument filed in the Court of Appeal. See Jos North Local Govt. vs. Daniyan (2000) 10 NWLR (Pt. 675) 281 at 290; Bature vs. Savannah Bank of Nigeria Ltd (1998) 4 NWLR (Pt. 546) 438; Akinyemi vs. Gov. Oyo State (2003) FWLR (Pt. 140 1821 at 1831; Bauchi L.G.C vs. Abdul- Salami (2003) FWLR (Pt. 151) 1863 at 1883; and Nigeria Oil Mills Ltd vs. Allied Ind. Ltd (2003) FWLR (Pt. 154) 545 at 553-554.

It is contended for the Appellant that the appellant in his affidavit in support of the notice of intention to defend denied knowledge of account No. 601091242 operated by Chief S.E. Okonofua and denied the approval of N30,000:00 overdraft facility with 32% interest for the said Chief S.E.Okonofua and submitted that by these specific denials, the Appellant fully controverted the Respondent’s claim and raised serious issues for the lower court to try which he raised by way of questions. The provisions of the Rules require the trial court to consider only the evidence contained in the affidavit filed by the defendant in support of notice of intention to defend the suit in determining whether or not the affidavit disclosed a defence on the merit or a triable issue to the action filed by the plaintiff under the Undefended List. In the instant case, the Appellant delivered his notice of intention to defend which he failed to raise any triable issue at least as found by the learned trial Judge. It was therefore within the competence of the trial court to enter judgment for the Respondent.

The notice of intention to defend under the Undefended List Procedure is not a defence on the merit. Put in another way, the notice itself does not per say constitute a defence to be considered. It has to disclose a triable defence to warrant the action being transferred to the general cause list. Mere denial of a claim as in the instant case, without given particulars which is proved will afford the defendant a defence or prima facie create doubt in the mind of the court is not sufficient, to warrant the transfer of the matter from the Undefended List to the general cause list. The materials before the court has to show that the case be heard on the merit. It must portray a strong defence which should not just be given a wave of the back hand. A close examination of the Appellant’s affidavit, particularly paragraph 2 of the affidavit in support of the notice of intention to defend is a bare denial of all the Respondent’s claim and paragraphs 3, 4, 5, 8 are total denials of these claim including all Exhibits attached. By virtue of Exhibits ‘A’ – ‘G’ the Appellant was aware of the indebtedness to the Respondent. In Exhibit ‘B’ which the Appellant duly executed, the Appellant agreed to guarantee the payment of the sum of N30,000:00 together with interest upon the default of Chief S.E. Okonofua. The Appellant cannot therefore claim any ignorance of account No. 601091242 allegedly operated by the said Chief S.E. Okonofua in respect of which the Appellant guaranteed to pay.

A triable issue or defence on the merit under the Undefended List Procedure is disclosed where a defendant’s affidavit in support of notice of intention to defend is such that the plaintiff will be expected to explain certain matters with regard to his claim or where the affidavit throws a doubt on the plaintif’ s claim. It is the law under the Undefended List Procedure that, a defendant who has no real defence to the action should not be allowed to dribble and frustrate the plaintiff and cheat him out of the judgment he is legitimately entitled to by the delay tactics aimed, not at offering any real defence to the action but at gaining time within which he may continue to postpone meeting his obligation and indebtedness. See Ivan vs. Bilante Int. Ltd (1998) 5 NWLR (Pt. 550) 396 at 402; Mat Holdings Ltd vs. U.B.A Plc (2003) 2 NWLR (Pt. 803) 71 at 90 and Agro millers Ltd vs. C.M.B. Plc (1997) 10 NWLR (Pt. 525) 469 at 477.

In the instant case, the Appellant has not in any way denied the execution of Exhibit B, as he has not shown that he is not the maker of the said Exhibit. It is trite that where a person of full age and discretion executes a formal deed with full knowledge of the nature of the document it will not avail him to seek to nullify the contract by complaining that he did not know the contents of the deed. See Igbinosa vs. Cole Aiyobagbeigbe (1961) All NLR (Pt. 99) Vincent O. Awosike vs. Chief F.O.D Sotubo (1992) 5 NWLR (Pt. 243) 574 and Sylvester D.E. Egbase vs. Augustine O. Oriareghan (1985) 10 SC 80

All the necessary ingredients necessary to make Exhibit B a valid document are present, that is, the document is in writing and the three parties, i.e the creditor, principal and the guarantor who actually guaranteed the debt. The Appellant cannot therefore be allowed to wriggle out of his commitments. See N.I.M.B vs. Narindex Trust Ltd (1998) 13 NWLR (Pt. 581) 404; V.T.S.V. vs. Oko (2001) 33 WRN 131 at 141 and F.I.B Plc vs. Pegasus Trading Office (GmbH) (supra).

The denial by the Appellant that the Respondent did not inform him of the approval of the N30,000.00 overdraft facility and that the Respondent also failed to bring to his notice Exhibits ‘C’, ‘D’, ‘E’, ‘F’, & ‘G’ are sham defences. It is trite that a court should not allow a defendant who has no real defence in an action in the Undefended List to dribble and frustrate the plaintiff and cheat him out of the judgment he is legitimately entitled to.

Based on the foregoing, it is my considered view that, the Appellant has failed in his affidavit in support of his notice of intention to defend to disclose a good defence on the merit. The learned trial Judge was therefore right to have disallowed the suit from being transferred to the general cause list and entered judgment for the Respondent. This issue is also resolved in favour of the Respondent and against the Appellant. On the whole, this appeal fails and it is hereby dismissed.

Each party is to bear its own costs.

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Other Citations: (2007)LCN/2448(CA)