AMCON v. ASCON (TARABA STATE CHAPTER) (2020)

AMCON v. ASCON (TARABA STATE CHAPTER)

(2020)LCN/14090(CA)

In The Court Of Appeal

(YOLA JUDICIAL DIVISION)

On Monday, March 30, 2020

CA/YL/100/2019

Before Our Lordships:

Chidi Nwaoma Uwa Justice of the Court of Appeal

James Shehu Abiriyi Justice of the Court of Appeal

Abdullahi Mahmud Bayero Justice of the Court of Appeal

Between

ASSET MANAGEMENT CORPORATION OF NIG. (AMCON) APPELANT(S)

And

ASSOCIATION OF SENIOR CIVIL SERVANT OF NIG (TARABA STATE CHAPTER) RESPONDENT(S)

RATIO

WHETHER OR NOT ORIGINATING SUMMONS SHOULD BE USED WHERE THE PROCEEDINGS ARE HOSTILE

Where the proceedings are hostile, originating summons should not be used. Where there is a dispute as to facts a writ of summons must be taken out or issued. See Jev & Anor Vs. Iyortyom & Ors (2014) LPELR – 23000 and Zakirai Vs. Muhammad & Ors (2017)LPELR – 42349 SC. PER ABIRIYI, J.C.A.

THE IMPORTANCE OF PLEADINGS

Pleadings would enable both parties ventilate their side of the story and all oral evidence in areas it is required to clear the air. It would fully settle the controversy between the parties who are not agreed on the facts as reflected in their respective affidavits. Originating Summons ought not to have been used in the case that gave rise to this appeal where the facts are in dispute. See, DOHERTY & ANOR Vs. DOHERTY (1967) 25506 (SC), P.10, PARAGRAPHS A-B, OLOMODA VS MUSTAPHA & ORS (2019) LPELR – 46438 (SC), P.16, PARAGRAPHS A-E, OSUAGWU VS. EMEZI (1998) 12 NWLR (PT. 579) 640; DIRECTOR SSS & ANOR VS. AGBAKOBA (1999) 3 NWLR (PT. 595) 425, (1999) SCNJ 1 and ALFA VS. ATTAI & ORS (2017) LPELR – 42579 (SC) P. 39 PARAGRAPH A-C. PER UWA, J.C.A.

JAMES SHEHU ABIRIYI, J.C.A.(Delivering the Leading Judgment): This appeal is against the judgment delivered on 22nd June, 2017 in the Federal High Court, Jalingo Judicial Division holden at Jalingo. The Appellant was the Defendant in the Federal High Court (the Court below) while the Respondent was the Plaintiff.

The Respondent approached the Court below by an originating summons for the determination of the following questions:
i. WHETHER the undertaking dated the 16th day of October, 2008, the letter from the Plaintiff dated the 4th day of September, 2009 and the reply thereto by the defunct Intercontinental Bank Plc. hereinafter referred to as “the defunct Bank” dated the 8th day of September, 2009, crystallized into a contract of novation?
ii. In the event of issue one supra being resolved in the affirmative, WHETHER the prior/former contract was not rendered otiose and the liability of the Plaintiff therein discharged?
iii. WHETHER the Defendant upon the acquisition of the eligible bank asset of the Financial Institution can lawfully resile from the latter contract?

Upon the determination of the above questions in

favour of the Respondent, it prayed the Court below for the following:
1. A DECLARATION that the Plaintiff is not liable to the Defendant having been discharged from all liabilities.
2. A DECLARATION that the claim of the Defendant against the Plaintiff as encapsulated in their letters of demand are baseless and unwarranted.
3. Cost of litigation.
4. General damages of two Million Naira only (N2,000,000.00).
5. AND for such Order or further Orders as this Honourable Court may deem fit and necessary tro make in the circumstances of this case.

The originating summons was supported by an affidavit of twenty eight paragraphs to which was annexed a mass of documents marked Exhibits ASCN 1 – ASCN 9.

The Appellant responded by filing a counter affidavit of twenty six paragraphs. The appellant further filed a notice of preliminary objection to the originating summons on the ground that the action was wrongly brought under the originating summons procedure.

The notice of preliminary objection was supported by an affidavit of twenty paragraphs to which one document was annexed and marked AMCON I.

Both the originating summons and the counter affidavit of the Appellant as well as the affidavit in support of the preliminary objection to the procedure adopted by the Respondent were argued by the learned Counsel for the parties. But the Court below considered only the substantive action and was dumb to the preliminary objection of the Appellant.

The Appellant has proceeded to this Court by a notice of appeal dated 6th March, 2019, and filed on 14th March, 2019. The notice of appeal contains two grounds of appeal. From the two grounds of appeal the Appellant presented the following two issues for determination:
(i) WHETHER it was right and proper for the Learned trial Judge to have entertained this matter by way of Originating Summons, regard being had to the contentious nature of the dispute between the parties”. (Distilled from ground one)
(ii) “WHETHER the content of EXHIBIT ASCON 5 can rightly and properly be relied upon to construe a Novation contract in law” (Distilled from grounds 2).

The Respondent also submitted the following two issues for determination:
(i) WHETHER taking into cognizance the nature of the case, its commencement

by way of originating summons was legally improper or inappropriate?(Distilled from ground 1 of the Notice of Appeal)
(ii) “WHETHER the content of EXHIBIT ASCON 5 can rightly and properly be relied upon to construe a novation contract in law” (Distilled from grounds 2).

Although the Appellant is simply challenging the procedure by which the action was commenced and prosecuted, both parties have argued the appeal on the merit. These arguments on the findings of the Court below are not borne out of the two grounds of appeal. I think the complaint of appellant can be determined on the following lone issue:
(1) Whether the action was properly commenced by the originating summons procedure.

In the light of the above surgical operation, I will proceed to summarise arguments of counsel for both parties that are relevant to the resolution of the lone issue formulated by the Court.

Arguing the appeal, the learned Counsel for the appellant submitted that the originating summons procedure is available to a party where the sole or principal question in issue is the construction of a written law or any instrument made under any written

law or of a dead, will, contract or other document or other question of law or there is unlikely to be any substantial dispute of facts. We were referred to Order 3, Rule 6 of the Federal High Court (Civil Procedure) Rules 2009.

It was submitted that where the matter is contentious the originating summons procedure is not available to a Plaintiff. The Court was referred to Doherty Vs. Doherty (1968) NWLR 241 and Director of S.S.S. Vs. Agbakoba (1999) 3 NWLR (Pt. 595) 425. It was submitted that where there are disputed facts as in this case, the proper mode of commencement of an action shall be by a writ of summons. The Court was referred to B. A. Elegbe, Speaker Bendel House of Assembly Vs. M. O. Ologo (1983) 7 SC 85, 215 – 216 and Nelson Moore & Anor Vs. Medicine Plus Limited & Anor (2014) LPELR – 24089 CA.

It was submitted that whenever there is a challenge to the commencement of action by originating summons and where substantial facts are likely to be in dispute, the procedure of originating summons cannot be used. The Court was referred to Pam V. Mohammed (2008) 16 NWLR (Pt. 1112) 1.

It was pointed out that the Appellant

challenged the mode in which the Respondent approached the Court in an action that bothers on a debt but the Court below did not look at the objection and proceeded to grant the reliefs sought by the Respondent and proceeded to discharge the latter of responsibility.

The argument of the Respondent is that the action was for the interpretation of some documents and was rightly brought by originating summons.

In a reply brief the Appellant pointed out, that the Respondent randomly strayed into an argument that did not form part of the case in the lower Court without any leave to raise fresh issues on appeal.
The learned Counsel for the Appellant, then proceeded to re-argue the appeal contrary to Order 19 Rule 5 (1) of the Court of Appeal Rules 2016 which allows him to reply only on new points arising from the Respondent’s brief. I will therefore discountenance the re-arguments.

LPELR – 42349 SC. In determining whether or not there is a dispute as to the facts, I will reproduce the affidavit in support of the originating summons extensively immediately hereunder:
3. That I know as a fact that sometime last year, the Defendant caused to be served on the Plaintiff a letter dated the 28th day of April, 2016 tiled “RE OUTSTANDING INDEBTEDNESS OF ASSOCIATION OF SENIOR CIVIL SERVANTS JALINGO, TARABA STATE. The said letter is hereto attached and marked EXHIBIT ‘ASCN 1’.
4. That in the said letter, the Defendant claimed that the Plaintiff was owing the Defendant the sum of N235,021,642.59 as at the time the letter was written and vide a threat clause therein threatened taking recovery measures against the Plaintiff if the money was not paid within 14 days of the receipt of the letter.
5. That the Plaintiff upon being served the said letter caused a response to be written and served on the Defendant wherein the claim of the Defendant was that the Plaintiff is not indebted to the Defendant at all. The said reply is hereto attached and marked EXHIBIT “ASCN 2”.
6. That I know as a fact that

sometime in 2008, ALH. UMAR M. USMAN, now deceased who took delivery of some of the motorcycles supplied by the defunct Intercontinental Bank made personal undertaking with the consent of the Plaintiff, the defunct Intercontinental Bank and ALH. Umar M. Usman to pay the sum of N61,450,000.00 directly to the Bank having been the beneficiary of the motorcycles and who ought to have paid through the Plaintiff with a clause to be personally liable and the Bank accepted and acted on it consequent upon which he commenced remittances without any recourse to the Plaintiff. The said undertaking dated 16/10/08 is hereto attached and marked EXHIBIT ASCN 3.
7. That I know as a fact that right from then the Bank discharged the Plaintiff and the debtor being ALH. UMAR M. USMAN continued to deal directly with the Bank as the Bank’s Debtor and the Bank so dealt with him without any further recourse to the Plaintiff, a fact the Plaintiff believed and acted upon. We refer this Court to the letter dated 8/9/09.
8. That from the discharge of the Plaintiff and inception of the direct dealing with the said ALH. UMAR M. USMAN, the Plaintiff ceased to be notified of the

transaction between her and the said Debtor including the service of updates on the transaction save when the Plaintiff demanded vide a letter dated 4/9/09 to know the status of the transaction. The letter of the Plaintiff and the response of the defunct Intercontinental Bank dated 8/9/09 are hereto attached and marked EXHIBITS ASCN 4 & 5.
9. That I know as a fact that apart from the status of the transaction between the Bank and her Debtor as disclosed in EXHIBIT ASCN 5, the Debtor ever since then was never notified of any other thing including the remittance made and the state of the matter with the Economic and Financial Crime Commission and the Plaintiff never also bothered to interfere with their transactions.
12. That upon the service of EXHIBIT ASCN 2 above stated on the Defendant, she caused another letter to be written and served on the Plaintiff through her Chairman, therein dismissing the defence of the Plaintiff and again issuing another threat to the Plaintiff this time stating that the recovery measures would include but not limited to media publicity, recall of personal Guarantee, Asset Takeover, liquidation and force closure without

further recourse to the Plaintiff. The said letter is hereto attached and marked EXHIBIT “ASCN 6”.
14. That I know as a fact that at the instance of the Defendant, a meeting was held between the Plaintiff and the Defendant in the office of our counsel on 10/10/2016 wherein the Plaintiff maintained their position.
15. That I know as a fact that the position of the Plaintiff is and remains that she is not indebted to the Defendant as clearly stated in her letters to the Defendant.
17. That from the facts surrounding the entire transaction, I know as a fact that the Defendant is acting outside the right of the Bank transferred to them as it affects the Plaintiff.
19. That I know as a fact that the recovery measures if at all should only be taken by the Defendant against the person indebted to the defunct Intercontinental Bank.
21. That I know as a fact that the powers of the Defendant are limited to the power the Bank would have lawfully exercised against her Debtors only.
22. That I know that the action of the Defendant amounts to resiling from the later agreement and this has subjected the Plaintiff and her officers to

psychological and mental agony and trauma greatly affecting her business and the officers are now living in fear.

It is clear from the affidavit in support of the originating summons and Exhibits ASCN 1 – ASCN 9, particularly paragraphs 5, 6, 7, 17, 19, 21 and 22 reproduced above that the proceedings are hostile and facts are in dispute. If the action was only for the interpretation of three of the several documents annexed to the affidavit in support of the originating summons, there was no use annexing several other documents. As the Court below did not order pleadings, the Appellant could not unleash his weapons against the Respondent’s claim. The submission of learned Counsel for the Respondent that the Court was only called upon to interpret Exhibits ASCN 3, ASCN 4 and ASCN 5 was only a smokescreen. Whether or not the Respondent is indebted to the Appellant is not a matter of interpretation of Exhibits ASCN 3, ASCN 4 and ASCN 5.

It is clear from the foregoing that the Court below should have ordered both parties to exchange pleadings. Instead it proceeded roughshod to determine the action without saying a word on the objection of the

Appellant to the procedure adopted in approaching the Court. The failure to rule on the preliminary objection raised and hotly contested was a failure to do justice and a dereliction of judicial responsibility. This must be deprecated.

The only issue formulated by the Court is hereby resolved in favour of the Appellant and against the Respondent and the appeal allowed.

The judgment and order of the Court below in Suit No. FHC/JAL/CS/2/2017 between the Respondent and the Appellant Asset Management Corporation of Nigeria (AMCON) and Association of Senior Civil Servants of Nigeria (Taraba State Chapter) delivered on 22nd June, 2017 are hereby set aside.

Parties are hereby ordered to file and exchange pleadings and the matter to be heard by a Judge of the Federal High Court other than Pam J.
Appellant is awarded costs of N50,000.00 to be paid by the Respondent.

CHIDI NWAOMA UWA, J.C.A.: I read before now the draft copy of the judgment of my learned brother JAMES SHEHU ABIRIYI, JCA. I agree with his reasoning and conclusion arrived at in allowing the appeal, the order that the parties should exchange pleadings and that the matter be heard

by another judge other than Pam, J. Since there is a dispute as to whether the Respondent is indebted to the Appellant or not, which is not limited to the interpretation of documents. Originating Summon was not appropriate for the trial Court to arrive at a just decision.
Pleadings would enable both parties ventilate their side of the story and all oral evidence in areas it is required to clear the air. It would fully settle the controversy between the parties who are not agreed on the facts as reflected in their respective affidavits. Originating Summons ought not to have been used in the case that gave rise to this appeal where the facts are in dispute. See, DOHERTY & ANOR Vs. DOHERTY (1967) 25506 (SC), P.10, PARAGRAPHS A-B, OLOMODA VS MUSTAPHA & ORS (2019) LPELR – 46438 (SC), P.16, PARAGRAPHS A-E, OSUAGWU VS. EMEZI (1998) 12 NWLR (PT. 579) 640; DIRECTOR SSS & ANOR VS. AGBAKOBA (1999) 3 NWLR (PT. 595) 425, (1999) SCNJ 1 and ALFA VS. ATTAI & ORS (2017) LPELR – 42579 (SC) P. 39 PARAGRAPH A-C.

For the fuller reasons given in the leading judgment, I also allow the appeal and abide by the order therein made as to costs.

ABDULLAHI MAHMUD BAYERO, J.C.A.: I agree.

Appearances:

A. Jalo with him, H. A El-Tasso and E. P. Offiong For Appellant(s)

A. Ibrahim Effiong with him E. B. Wariyaki For Respondent(s)