G. M. O. NWORAH & SONS CO. LTD V AFAM AKPUTA ESQ
(2010) LCN/4018(SC)
In the Supreme Court of Nigeria
Friday, March 5, 2010
Case Number:SC. 153/2006
RATIO
“Undefended list proceeding is meant to shorten the hearing of a suit where the claim is for a liquidated sum. It is designed to avoid the intricacies of pleadings in a normal hearing in our trial courts.” Per FABIYI J.S.C
FACTORS DETERMINING LIQUIDATED SUM
“The factors for determining a liquidated sum are as follows:- (a) The sum must be arithmetically ascertainable without further investigation. (b) If it is in reference to a contract, the parties to the contract must have mutually and unequivocally agreed on a fixed amount payable on breach. (c) The agreed and fixed amount must be known prior to the breach.” Per FABIYI J.S.C
JUSTICES:
NIKI TOBI, JUSTICE, SUPREME COURT
IKECHI FRANCIS OGBUAGU, JUSTICE, SUPREME COURT
JAMES OGENYI OGEBE , JUSTICE, SUPREME COURT
JOHN AFOLABI FABIYI , JUSTICE, SUPREME COURT
OLUFUNLOLA OYELOLA ADEKEYE, JUSTICE, SUPREME COURT
APPELLANTS
G. M. O. NWORAH & SONS CO. LTD
RESPONDENTS
AFAM AKPUTA ESQ
J.A. FABIYI, J.S.C.(Delivering the Judgment by the Court):
This is an appeal against the judgment delivered by the Court of Appeal, Enugu Division (court below for short) on 19th June, 2006 in respect of an appeal and cross appeal by the parties against the judgment of Ozoemena, J. of the High Court of Justice, Enugu delivered on 19th April, 2004. The case at the trial court was a suit filed in the undefended list by the respondent as plaintiff thereat. He claimed the sum of N7, 555,000:00 against the appellant as professional fees for services allegedly rendered for the benefit of the defendant – appellant herein. Upon being served with the writ of summons, the defendant filed a notice of preliminary objection challenging the locus standi of the plaintiff to institute and maintain the action. The trial judge was addressed by counsel on the preliminary objection and application for judgment under the undefended list. In his judgment handed out on 19th April, 2004, he dismissed the preliminary objection. As a follow up, he granted in part the plaintiffs application under the undefended list by awarding him N800,000:00 with 2% interest out of the N7,555,000:00 as he felt that the fees to be paid must be reasonable in the circumstances .
Both parties felt unhappy with the stance posed by the trial judge. The defendant appealed and the plaintiff, as well, cross–appealed to the court below. On 19th June, 2006, the court below dismissed the appellants appeal and allowed the respondents cross-appeal. The court below awarded the respondent the sum of N6,750.000:00 with 3% interest being the remainder or part of the cross-appellants claim at the trial court which was not granted thereat. The appellant felt irked with the decision of the court below and has appealed to this court. He sought the leave of this court to raise new issues and filed four (4) additional grounds of appeal in respect of same. On 7th December, 2009 when this appeal was heard, briefs of argument were adopted by both sides of the divide. The three (3) issues couched for determination of the appeal by the appellant read as follows:-
‘ISSUE NO.1 Whether the respondent has the locus standi to institute the action at the High Court of Enugu State so as to confer the court with the jurisdiction to hear and determine the claim.
ISSUE NO. 2 Whether, in all the circumstances of this case the suit filed by the respondent at the trial court satisfied necessary conditions of a suit that can be placed and determined under the undefended list.
ISSUE NO. 3 Whether the court below was right in an undefended list claim for N7,555,000:00 to set aside the award of N800,000:00 with 2% interest granted respondent by the trial court and substitute same with an award of N6,750,000:00 with 3% interest as remainder of the sum not granted by the trial court.’
The respondent also distilled three issues for determination of the appeal. They read as follows: ‘1. Must respondent comply with Order 34 Rule 5 of the High Court of Anambra State (Civil Procedure) Rule 1988, applicable in Enugu State in Order to establish the requisite locus standi necessary to sustain the claim herein?
2. Whether the claim at the trial court satisfied the necessary conditions for a suit that ought to be placed and determined under the undefended list.
3. Whether the court below was right to have awarded N6,750,000:00 (Six Million Seven Hundred and Fifty Thousand Naira) with 3% interest to the respondent.’
At this point, it is apt to start with the consideration of issue 2 as decoded by both parties. They both agree that this issue is whether the claim at the trial court satisfied the necessary conditions for a suit that ought to be placed under the undefended list. On behalf of the appellant, learned counsel submitted that if the respondent has the requisite locus standi to initiate the suit at the trial court, the suit, as constituted, ought not to have been heard and determined under the undefended list. Learned counsel contended that the respondents claim as contained in Exhibit F, i his Bill of charge was not for liquidated debt, money demand or damages.
He cited the case of U.T.C. (Nig.) Limited v. Pamotei (1989) 2 NWLR (Pt. 103) 244 at 299. The respondent felt that since he worked for the appellant, the sum claimed by him was for a debt and such liability need not be arithmetically ascertained. He maintained that he was entitled to apply to the court for recovery of the debt under the undefended list procedure. He cited the case of Akinnuli v. Odugbesan (1992) 8 NWLR (PI. 258) 172 at 188.
Let me say it here pointedly that the undefended list proceeding is meant to shorten the hearing of a suit where the claim is for a liquidated sum. It is designed to avoid the intricacies of pleadings in a normal hearing in our trial courts. In recent times, its employment has been subject of abuse. Such should not be the case.
What then is a liquidated sum or damages. Blacks Law Dictionary (6th Edition) at page 391 says that damages is said to be liquidated when a specific sum of money has been expressly stipulated by the parties to a bond or other contract as the amount of damages to be recovered by either party for a breach of the agreement by the other side. Stein v. Bruce 366 S.W. 2d 732, 735. The term is applicable when the amount of the damages has been ascertained by the judgment in the action. In Maja v. Samouris (2002) 7 NWLR (Pt. 765) at page 102, this court by Iguh, JSC pronounced thus:-
“A liquidated demand is a debt or specific sum of money usually due or payable and its amount must be already ascertained or capable of being ascertained as a matter of arithmetic without any other or further investigation. Whenever therefore the amount to which plaintiff is entitled can be ascertained by calculation or fixed by any scale of charges or other positive data, it is said to be liquidated or made clear. Again, where the parties to a contract as part of the agreement between them fix the amount payable on the default of one of them or in the event of breach by way of damages such sum is classified as liquidated damages where it is the nature of genuine pre–estimate of the damage which would arise from breach of the contract so long as the agreement is not obnoxious as to constitute a penalty and it is payable by the party in default.’
Earlier on, in the case of Eko Odume v. Ume Nnachi (1964) 1 All NLR 324 at page 328, this court per Idigbe, JSC pronounced thus:-
‘Whenever the amount to which the plaintiff is entitled can be ascertained by calculation or fixed by any scale or other positive data it is said to be liquidated or made clear. But when the amount to be recovered depends on all the circumstances of the case and on the conduct of the parties and is fixed by opinion or by an estimate the damages are said to be unliquidated.’
It is clear and beyond tenable argument that the factors for determining a liquidated sum are as follows:-
(a) The sum must be arithmetically ascertainable without further investigation.
(b) If it is in reference to a contract, the parties to the contract must have mutually and unequivocally agreed on a fixed amount payable on breach.
(c) The agreed and fixed amount must be known prior to the breach. I have taken a careful look at the affidavit in support of the respondents claim under the undefended list. I cannot see any averment therein which shows that there was an agreement, written or otherwise between him and the appellant, at any material point in time pointing to the direction that the appellant would pay the respondent the sum of N7,555,000:00 contained in the writ of summons or any other particular sum of money for that matter. To say the least, the various heads of amount in Exhibit F, the Bill of Charges relied upon by the respondent, were estimates arrived at by the unilateral opinion of the respondent which were not based on any mutually agreed ascertainable standard. There was no fixed amount known to the parties prior to the alleged breach of the oral agreement which the respondent said he had with the appellant. The claim of the respondent, in the circumstance can only be categorised as unliquidated damages. It ought not to have been placed and determined under the undefended list in the first instance. Further, learned counsel for the appellant submitted that the case was not qualified to be placed and determined under the undefended list because the respondents suit, as formulated and presented before the trial court, was not only contentious but also raised a number of triable issues.
What then amounts to a triable issue in the context of an undefended list proceeding? If a defendants affidavit in support of the notice of intention to defend, where one is filed, or an affidavit to prop a preliminary objection as in this case raises an issue where the plaintiff will be required to explain certain matters with regard to his claim or where the affidavit throws a doubt on the plaintiff s claim, such brings the parties within the concept of joining issues as explained in Graham v. Esumai (1984) 15 NSCC 733, 743 and Ehimare v. Emhonyon (1985) 1 NWLR (Pt. 2) 177; (1985) 16 NSCC (Pt. 1) 163, 169. In such a situation, a triable issue comes into existence. Whenever a bona tide issue or a triable issue comes into existence, the case ought to be entered in the general cause list. The court has a duty to ensure fair hearing even in cases under the undefended list procedure. Let me point it out that although the procedure under the undefended list has the advantage of speedy and quick dispensation of justice, it has its limitation in that it is not an appropriate procedure in complex cases with controversial triable issues. It is the duty of a trial court to first certify that the case is a proper one to be placed on the undefended list. For guidance on the procedure for summary judgment on the undefended list action, see: UAC (Tech) Ltd. v. Anglo Canadian Cement Ltd. (1966) NWLR 349; Olubusola Stores v. Standard Bank Nig Ltd. (1975) 4 SC 51 at 55-56; Okambah Ltd. v. Sule (1990) 7 NWLR (Pt. 160) 1; (1990) 11 SCNJ 1; Adebisi Macgregor Associates Ltd. v. Nigerian Merchant Bank Ltd. (1996) 2 NWLR (pt. 431) 378; (1996) 2 SCNJ 72.
I note that the appellant herein, as defendant at the trial court, filed a preliminary objection challenging the locus standi of the respondent as plaintiff instead of the usual notice of intention to defend as dictated by the Rules of the trial court. There appears to be no big deal in this point. The action could validly be challenged other than by filing a notice of intention to defend and an affidavit disclosing a defence on the merit. See: the case of Sodipo v. Lemminkainen OY (1986) 1 NWLR (Pt. 15) 220 at 231; Nishizawa Limited v. Jethwani (1984) 12 sc 234 at 257; UTC Nig. Ltd v. Pamotei (supra) at page 284.
In short, the trial court and the court below had a duty to consider the preliminary objection and the affidavit in support of same. The respondent maintained that he had an oral agreement to work for the appellant. On the other hand, the appellant said it had no contract, oral or written with the respondent. The appellant said it had dealings with one Joe Akputa and attached an agreement between them marked Exhibit A to its affidavit. It is the said Joe Akputa that the respondent said introduced him to the appellant. There is no doubt in my mind that a triable issue has arisen in respect of the standing of the respondent. The two courts below appeared to have brushed the issue aside. But it has refused to be swept under the carpet. It requires to be cleared in a full blown trial. Again, to justify the sum of =N=2,000,000:00 in Exhibit F as the fee for representing the appellant at the Supreme Court, the respondent averred in paragraph 4 of the affidavit in support of his application under the undefended list that he filed a brief of argument on behalf of the appellant at the Supreme Court. But in paragraph 15, the respondent averred that he drafted the brief of argument and when he asked the appellant for money to file same, the appellant debriefed him by directing him to hand over the brief of argument to one Chief Ifeanyichukwu Okonkwo. There is nothing to show that a Notice of Appeal was filed at the Supreme Court as contained in the paragraph 14 of his affidavit. As well, there is no evidence that the respondent filed a brief of argument on behalf of the appellant; at least for now. To my mind, there exists a material conflict or contradiction in the affidavit of the respondent which requires explanation. In this regard, the respondent himself on page 11 of his brief of argument states as follows:-
“In the unlikely event of your lordships agreeing with the appellant that there exists a material conflict or contradiction in the affidavit evidence of the respondents as contended in the appellant’s brief argument, I must however point out that the effect thereof will only be restricted to the sum of N2 million claimed in regard to the Suprme Court proceedings and thus only that aspect of the claim may be affected, whilst the reminder thereof should be upheld by this Honourable Court.’ From the above, the respondent appears to have thrown in the towel in respect of the N2 million claimed for work done for the appellant in respect of the alleged Supreme Court proceedings. Howbeit, for now, I take it that a serious triable issue has been raised and same should be investigated at a full blown trial of this matter at the High Court. At this point, the provision of Order 24 Rule 9 (5) of the trial courts Rules to wit: Anambra State High Court (Civil Procedure) Rules, 1988, as applicable to Enugu State, is of moment. It provides as follows:- ‘R.9 (5). Nothing herein shall preclude the court from making an order, should it so think fit at any stage of the proceedings for the suit to be transferred to the general list on the ground that the suit is not suitable for placement in the undefended list.’
I am of the considered view that this is a case that ought not to be placed in undefended list in the first instance. It does not relate to a claim for liquidated sum agreed to at the material time by the parties. There are contentious issues that should be investigated through viva voce evidence. Since an order transferring the matter to the trial court for hearing in the general cause list is warranted, I wish to keep my peace in respect of other issues. The appeal is hereby allowed. The judgment of the court below is hereby set aside. The case is remitted to the trial court to be heard on the general cause list by another Judge other than Ozoemena, J. Pleadings shall be ordered accordingly. No costs awarded.
J.O. OGEBE, JSC:
I read in advance the lead judgment of my learned brother Fabiyi , JSC just delivered and I agree with his reasoning and conclusion. Both the trial court and the Court of Appeal wrongly treated the claim as liquidated damages. The claim was highly contentious and should never have been placed on the undefended list. Accordingly, I allow the appeal, set aside the judgments of the two lower courts and remit the case to High Court for retrial on pleadings before another judge. I make no order as to costs.
NIKI TOBI JSC:
I have read in draft the judgment of my learned brother, Fabiyi JSC and I agree with him. Matter on the undefended list do not routinely find themselves there. They find themselves there when the adjectival law says so. PAGE| 11 As rightly pointed out by my learned brother, the undefended procedure is invoked where the claim is for liquidated damage. My learned brother has adequately explained which constitutes liquidated damages in law and I will not bother myself. Like my learned brother, I have examined the affidavit and I do not agree that it deposes to liquidated damages warranting the undefended list procedures. I think I can stop here. 1 order that the matter should be heard by the learned trial Judge on the general cause list. I also make no order as to costs.
A. M. MUKHTAR, JSC:
The respondent in this appeal, as plaintiff the High Court of Enugu State instituted an action against the appellant and/or the undefended list making the following claim. ‘Wherefore, the plaintiff claims from the defendant the sum of N7,555,000.00 (Seven million five hundred and fifty five thousand) as full professional fees for handling the afore stated matter from the High Court to the Supreme Court with interest at the rate of 5% from judgment until paid.’ In support of the claim are the following salient depositions in the affidavit sworn to by the plaintiff:-
‘(17) That on the 1st of April, 2003 I drew up a bill of charges in the Grand total sum of N7,555,000.00(Seven million five hundred and fifty five thousand naira) covering our representing the defendant in the aforesaid claim against the African International Bank from High Court to the Supreme Court. Annexed herewith as Exhibit F is the Bill of charges.
(18) That aforesaid grand total sum of N7,555,000.00 (Seven million five hundred and fifty five thousand naira) in our bill of charges is broken down as stated hereunder:-
(a) Total fee charged for High Court proceedings – N3,045,000 (three million and forty five thousand naira).
(b) Total fee charged for post judgment proceedings (One hundred and ten thousand naira) -110,000.00.
(c) Total fee charged for Supreme Court proceedings (Two million naira) -N2m.
(19) That I sent the above stated bill of charges to the defendant on 4/4/03. Annexed herewith as Exhibit G is the E.M.S. speed Receipt issued to us upon registering the bill of charges for onward transmission to the defendant.
(20) That the defendant received the aforesaid bill of charges on 4/4/03. Annexed herewith as Exhibit H is the E. M. S. speed post receipt showing the defendant received the bill of charges.
(21) That ever since receipt of the bill of charges the defendant has not in any way denied the liability contained therein.
(22) That the defendant has failed and/or neglected to pay the above stated professional fees.
(23) That the defendant has no defence whatsoever to this suit.’
Rather than file a notice of intention to defend, the defendant filed and moved a motion for an order striking out this suit as same is incompetent, the grounds for the application being:-
(1) The there is no contractual relationship between the defendant (G.M. Onworah & Sons co. Ltd.) and the purported plaintiff to this suit and the plaintiff lacks the locus standi to institute this suit, having failed to state or establish his capacity to institute this suit.
(2) The Honourable court lacks the jurisdiction to entertain this suit.
(3) This suit is an abuse of court process.’ In support of the objection are the following depositions in the affidavit:-
‘5. To my knowledge, there exists no contractual relationship between the so called plaintiff and the Defendant/Applicant.
6. That about the year 1993, the Defendant entered into a written contract with one Mr. Joe to help it with sorting out its problem with African International Bank. A photocopy of the written agreement is hereto annexed as Exhibit A.
7. That the Defendant is not indebted to Afam Akputa Esq.
8. That the plaintiff instituted this suit to embarrass the Defendant and gain from a contract that never existed between him and the Defendant.’
When one reads the above depositions side by side the supporting depositions to the claim, what emerges are conflicting facts, which the learned trial judge should have viewed seriously enough to resort to certain procedure. He however entered judgment for the plaintiff. Aggrieved by this decision, the parties appealed to the Court of Appeal, Enugu Division. The appeal by the defendant was dismissed, but the cross-appeal was allowed. Again the defendant was dissatisfied with the judgment of the appeal court, and so appealed to this court.
Briefs of argument were exchanged by both parties, and. adopted at the hearing of the appeal. Three issues for determination were raised in the appellants brief of argument. The issues are:-
‘1. Whether the respondent has the locus standi to institute the action at the High Court of Enugu State so as to confer the court with the jurisdiction to hear and determine the claim?
2. Whether in all circumstances of this case the suit filed by the respondent at the trial court satisfied the necessary conditions of a suit that can be placed and determined under the undefended list?
3. Whether the court below was right, in an undefended list claim for N7,555,000.00 to set aside the award of N800,000.00 with 2% interest granted respondent by the trial court and substitute same with an award of N6,750,000.00 with 3% interest as remainder of the sum not granted by the trial court?’ The issues raised in the respondents brief of argument are virtually the same as the above issues. Issues (2) above is the issue I will highlight in this judgment.
It is on record that the plaintiff’s claim under the undefended list was predicated on Exhibit F, the bill of charges exhibited to the affidavit in support of the claim. The bill of charges, which is exhibit F contains a table of various fees and moneys expended on certain actions taken. The suit was brought under the undefended list pursuant to Order 24 Rule 9 of the Anambra State High Court Civil Procedure Rules, 1988. A claim under the undefended list comes in the form of the recovery of debt or liquidated sum of money demanded, and that is the position of the law. See U.T.C. (Nig) Ltd. v. Pamotei 1989 2 NWLR part 103 page 244, relied upon by learned counsel for the appellant. The pertinent question here is does Exhibit F contain a debt or liquidated sum? I think not, because the various amounts in Exhibit F are disputable. They are subject to scrutiny and acceptance to determine whether the claim qualifies to be under the undefended list i.e whether it is a debt or a demand for liquidated sum. See Bank of the North v. lntrabank S.A. 1969 1 All N.L.R. 91 and Maja v. Samouris 2002 7 NWLR part 765 page 78. As I have stated earlier on, the step taken by the defendant was to file a motion raising objections on the claim, and I have reproduced the grounds and the salient facts disclosed in the supporting affidavit. I believe this action could be saved by the provision of Order 24 Rule 9 (5) of the Anambra Civil Procedure Rules supra, which reads thus:-
‘(5) Nothing herein shall preclude the court from making an order, should it so think fit at any stage of the proceedings, for the suit to be transferred to the general list on the ground that the suit is not suitable for placement in the undefended list.’ In the event that the defendant raised the objection at the stage it did, and disclosed facts that challenged the facts disclosed in the affidavit in support of the claim under the undefended list, the case becomes contestable. In fact the very subject matter the claim was predicated on was disputed and by so doing issues were joined and by implication evidence was necessary for the just determination of the case. See Jipreze v. Okonkwo 1987 2 NWLR part 62, page 737, and Atilade v . Atilade 1968 1 All NLR 27. In this light I do not subscribe to the following pronouncement of the lower court, as per Bada JCA:-
‘In the instant case, a perusal of the entire affidavit in support of the claim under the undefended list procedure as well as Exhibits A to H annexed hereto showed in detail the case of the plaintiff and how he arrived at his claim whereas the affidavit in support of the motion and exhibit A annexed thereto filed by the appellant did not controvert any fact contained in the affidavit in support of the claim under the Undefended List Procedure filed by the Defendant/Respondent/Cross Appellant’
The Court of first instant should to my mind have transferred the case to the general cause list. Having dealt with this issue and come to the conclusion I reached in respect of the argument thereof, I am of the view that I need not go further with the treatment of the appeal. This is more so, as the lead judgment has thoroughly treated the other issues for determination. I have read in advance the lead judgment delivered by my learned brother Fabiyi JSC. I entirely agree with the reasoning and conclusion reached that the appeal has merit, and should succeed. I also allow the appeal, and agree with the consequential orders made in the lead judgment.
I. F. OGBUAGU, JSC
This is an appeal against the decision of the Court of Appeal, Enugu Division (hereinafter called the court below’) delivered on 19th June, 2006, dismissing the appeal of the Appellant to it and allowing the Cross-Appeal of the Respondent. I note however, that while the trial court awarded the sum of N800,000.00 (Eight Hundred Thousand Naira) and two per cent (2%) interest on the judgment debt in favour of the Respondent. With no order as to costs, the court below awarded in favour of the Respondent, the sum of N6,750.000.00 (Six Million, Seven Hundred and Fifty Thousand Naira) with three per cent (3%) interest on the Judgment sum ‘being the remainder or part of the Cross Appellants claim at the trial court which was not granted”. It also awarded in favour of the Respondent and against the Appellant, costs of N7, 500.00 (Seven Thousand Five Hundred Naira). Dissatisfied with the said decision, the Appellant has appealed to this Court on Six(6) grounds of appeal as appear in his Amended Notice of Appeal. It has formulated three (3) issues for determination, namely,
ISSUE NO.1 ‘Whether the respondent has the locus standi to institute the action at the High Court of Enugu State so as to confer the court with the jurisdiction to hear and determine the claims?
ISSUE NO.2 Whether, in all the circumstances of this case the suit filed by the respondent at the trial court satisfied the necessary conditions of a suit that can be placed and determined under the undefended list.
ISSUE NO.3 On his part, the Respondent, has also formulated Whether the court below was right, in an undefended list claim for N7,555. 000.00 to set aside the award of N800, 000.00 with 2% interest granted respondent by the trial court: and substitute same with an award of N6,750,000.00 with 3% interest as remainder of the sum not granted by the trial court?’. three (3) issues for determination which read as follows:
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COUNSELS
