Keystone Bank Limited -VS- Mr. Offor Emmanuel

IN THE NATIONAL INDUSTRIAL COURT OF NIGERIA

IN THE LAGOS JUDICIAL DIVISION

HOLDEN AT LAGOS

BEFORE HIS LORDSHIP, HON. JUSTICE IKECHI GERALD NWENEKA

Date: 29th January 2020 SUIT NO. NICN/LA/351/2016

BETWEEN

KEYSTONE BANK LTD. … CLAIMANT

AND

OFFOR EMMANUEL … DEFENDANT

JUDGMENT

The Claimant commenced this suit by complaint and accompanying processes dated 24th May 2016 and by its amended statement of facts dated and filed on 20th February 2019 claimed against the Defendant as follows:

The sum of N4, 038,232.10 [four million, thirty-eight thousand, two hundred and thirty-two naira, ten kobo] only being the total sum due and payable to the Claimant by the Defendant as at 31st March 2016 as a result of the various loan facilities [sic] which the Claimant granted to the Defendant when the Defendant was in the employment of the Claimant but which the Defendant have [sic] refused, failed and/or neglected to pay back for the said various loan facilities till date despite having utilized same.

Interest on the amount claimed in [1] above i.e. N4, 038,232.10 at the rate of 19% per annum from 1st April 2016 until judgment and thereafter at the same rate until final liquidation of the entire debt.

Cost of prosecuting this action to be borne by the Defendant.

The originating processes were served on the Defendant in accordance with the Rules of this Court on 23rd June 2016. The Defendant did not enter appearance or file any defence process and did not take part in the proceedings in spite of evidence of service of hearing notices on him as prescribed by the Rules of the Court. The Claimant opened its case on 6th November 2019; and its sole witness, Mr. Habib Shittu of the Asset Remedial Management Department, adopted his statement on oath dated 25th March 2019 as his evidence in the suit and tendered 7 documents, which were marked as exhibits 1 to 7. On application by learned counsel for the Claimant, Chief Okonkwo, the Defendant was foreclosed from cross-examining the Claimant’s witness pursuant to Order 38 rule 2[1] of National Industrial Court of Nigeria [Civil Procedure] Rules, 2017 and the case was adjourned to 20th November 2019 for defence or adoption of final written addresses and subsequently to 16th December 2019. The Defendant was absent on 16th December 2019 and, on application by learned counsel for the Claimant, was foreclosed from presenting his defence. The case was thereafter adjourned to 28th January 2020 for adoption of Claimant’s final written address dated 18th November 2019. Learned counsel for the Claimant adopted the Claimant’s final written address and urged the Court to enter judgment in its favour.

In his final written address, learned counsel for the Claimant, Chief Okonkwo, formulated one issue for determination to wit:

“Whether the Claimant has proved its case to be entitled to the reliefs sought before this Honourable Court?”

Arguing the lone issue Chief Okonkwo submitted that the Claimant has proved its claim against the Defendant and urged the Court to grant the reliefs claimed. Counsel argued the issue for determination under 4 sub-heads, viz:

Did the Claimant grant a loan facility to the Defendant?

Has the loan or debt been paid back?

What is the total outstanding indebtedness of the Defendant to the Claimant?

Are Banks not entitled to charge interest on loans they give out to their customers?

Learned counsel answered sub-issue one in the affirmative and referred to page 7 of exhibit 1 and paragraphs 8 and 9 of the Claimant’s witness’ statement on oath which show that on 12th July 2007, the Defendant’s Current Account no. 001103000237 was credited with a ‘loan advance’ of N2, 200,000. He submitted that this evidence was not challenged in any way by the Defendant and urged the Court to accept it in proof of the grant of the facility to the Defendant on the authority of Folorunsho v. Shaloub [1994] 3 NWLR [pt.333] 413.

On sub-issue two he argued that there is no evidence before the Court, oral or documentary, that the facility has been repaid and urged the Court to so hold. On the third sub-issue, he referred to the last page of exhibit 1 and explained that the Defendant’s indebtedness was N4, 038,232.10 as at 31st March 2016. He argued that exhibit 1 was not challenged nor denied in any way by the Defendant and on the authority of Nacenn Nigeria Limited v. Bewac Automative Producers Limited [2011] All FWLR [pt. 585] 280 at 292 urged the Court to accept the evidence as true and act on it. It was further explained that the Defendant did not enter appearance or file a defence in spite of being served with the originating process and hearing notices. He, therefore, urged the Court to hold that the Defendant’s indebtedness was N4, 038,232.10 as at 31st March 2016.

On whether Banks are entitled to charge interest on loans, he submitted that the Claimant is a commercial bank and the law allows commercial banks to charge interest on loans granted to customers or staff even where there is no express agreement to that effect. He referred to the cases of Union Bank of Nigeria Ltd. v. Mr. James Olusola Ayoola [1998] 11 NWLR [pt.573] 338 at 344 and Paul Aforka v. African Continental Bank Nig. Ltd. [1994] 3 NWLR [pt.331] 217 at 225. Learned counsel contended that the Defendant did not controvert the evidence of Claimant’s witness as contained in exhibit 1 which contains interest and charges; and that the law is well settled on the effect of unchallenged statement of account bearing interest. He relied on the case of Paul Aforka v. African Continental Bank Nig. Ltd. [supra] and urged the Court to enter judgment in favour of the Claimant.

I will adopt the issue for determination formulated by learned counsel for the Claimant which is “whether the Claimant has proved its case to be entitled to the reliefs sought before this Honourable Court?” It is elementary law that requires no citation of authority that he who asserts must prove. See section 131[1] of the Evidence Act, 2011 and the case of Nduul v. Wayo & Ors. [2018] 7 SC [pt.111] 164 at 212. Thus, the onus is on the Claimant to establish through its pleading and evidence its entitlement to judgment on the claims.

While it is true that the failure of the Defendant to adduce evidence makes the Claimant’s evidence unchallenged and liable to be accepted and acted upon by the Court; yet that does not automatically entitle the Claimant to judgment. See the case of Elewa & Ors. v. Guffanti Nigeria Plc [2017] 2 NWLR [pt.1549] 233 at 248. The evidence presented by the Claimant must, on its own, justify the grant of the reliefs sought. Where it is incapable of sustaining the claims, then the Claimant has not discharged the burden of proof and the claim is bound to fail notwithstanding the absence of defence. See Erinfolami v. Oso [2011] LPELR-15357[CA] 18.

This case is for recovery of facility granted to Claimant’s former employee. In proof thereof, the Claimant’s witness testified that by virtue of a purchase and assumption agreement dated 5th August 2011, the Claimant acquired the assets and liabilities of the defunct Platinum Habib Bank Plc, which transaction was covered by Nigeria Deposit Insurance Corporation letter of that date. He stated that the Defendant was an employee of the Claimant having been employed on 23rd August 2006 and resigned his appointment on 29th June 2009. As an employee of the Claimant, the Defendant maintained a current account no. 001103000237 which was subsequently changed under the CBN NUBAN policy to 1000178261; and was granted a facility on 12th July 2007 for the sum of N2, 200,000. He stated that the Defendant fully enjoyed the facility but refused, failed and/or neglected to fully liquidate it in spite of several demands by the Claimant and its Solicitors; and when the account was classified, the Defendant was found to be indebted to the Claimant in the sum of N4, 038,232.10 as at 31st March 2016. By reason of which the Claimant claims as per its amended statement of facts. The Defendant’s statement of account, certificate pursuant to section 84[1] of the Evidence Act, 2011, demand letters by the Claimant and its Solicitors, letters of employment and resignation and NDIC letter dated 5th August 2011 were admitted in evidence and marked as exhibits 1, 2, 3, 4, 5, 6 and 7 respectively.

I have carefully perused exhibit 1 and I find as a fact that the sum of N2, 200,000 were credited to the Defendant’s account on 12th July 2007 as ‘loan advance’. I also find as a fact that a monthly debit of N78, 436 was posted to the Defendant’s account as ‘automatic loan payment’ from 23rd July 2007 to 23rd October 2008. From 21st November 2008 various debit entries were posted to the account as interest and principal repayments but the rate of interest was not stated. The Defendant continued to service the facility until August 2010 when the account went into debit and as at 28th August 2015 the closing debit balance was N3, 297,527.93. A scrutiny of exhibits 1, 3 and 4 shows that the account was classified in August 2015 resulting in the demand by the Claimant’s Solicitors on 11th December 2015 for the sum of N3, 297,527.93, exhibit 4. By a subsequent demand made by the Claimant on 14th January 2016, exhibit 3, the Claimant demanded for payment of the sum of N3, 297,527.93. Paragraph 3 of exhibit 3 reads, inter alia:

“These accounts have since been classified as non-performing.”

To this extent, it is not correct, as stated by the Claimant’s witness in paragraph 12 of his statement on oath that:

“12. That when the Defendant [‘s] Account with the Claimant was classified, the Defendant was found to be indebted to the Claimant in the sum of N4, 038,232.10 as at 31st March 2016.”

The law is that where a creditor writes a demand letter to the debtor who fails to react, his silence is presumed to be admission of the content of the letter and no more. See In-Time Connection Limited v. Mrs. Janet Ichie [2009] LPELR-8772[CA] 20. There is nothing before me to show that the Defendant was informed that his debit balance had increased from N3, 297,527.93 to N4, 038,232.10 prior to the institution of this action. If a cause of action only arises after a demand for payment is made and the debtor refuses to pay – see Standard Manufacturing Co. Limited & Anor. v. Sterling Bank Plc [2015] LPELR-24741[CA] 30 – then, it is my respectful view and I so hold, that the debtor’s liability crystallises upon the demand and for the sum so demanded.

Consequently, while I agree with Chief Okonkwo on sub-issues 1 and 2 that the evidence of the Claimant’s witness on grant of the facility and that it remains unliquidated has not been challenged in any way and that this Court is bound to accept it as correct – See Inspector James Abah & Ors. v. Jabusco [Nigeria] Ltd. [2007] LPELR-4325[CA] at pages 43-44 and Godfrey Ifediora & Ors. v. Eugene Okafor & Ors. [2019] 16 NWLR [pt. 1698] 322 at 336 – I hold the view that the amount proved as owed by the Defendant from a careful reading of exhibits 1, 3 and 4 as at 31st August 2015 is the sum of N3, 297,527.93 which is also the sum communicated to him in exhibits 3 and 4. It should be noted that while the Court is bound to accept and act on evidence which is not challenged by the other party, such evidence must ordinarily be credible. It has been held that credible evidence means evidence worthy of belief and for evidence to be worthy of belief it should be natural, reasonable and probable in view of the entire circumstances of the case. See In-Time Connection Limited v. Mrs. Janet Ichie [supra] at page 16.

This leads me to a consideration of the Claimant’s reliefs. Relief one is for the sum of N4, 038,232.10 [four million, thirty-eight thousand, two hundred and thirty-two naira, ten kobo] only being the total sum due and payable to the Claimant by the Defendant as at 31st March 2016 as a result of the various loan facilities [sic] which the Claimant granted to the Defendant when the Defendant was in the employment of the Claimant but which the Defendant have [sic] refused, failed and/or neglected to pay back for the said various loan facilities till date despite having utilized same. I found earlier in this judgment that the amount proved as owed by the Defendant is N3, 297,527.93 notwithstanding that the evidence of the Claimant’s witness is unchallenged. In the words of Okoro, J.S.C. in Godfrey Ifediora & Ors. v. Eugene Okafor & Ors. [supra], the unchallenged evidence must be believed by the Court before it can act upon it. Speaking in the same vein, Yakubu, J.C.A. in Sankey v. Onayifeke [2013] LPELR-21997[CA] at page 48 posited that:

“An unchallenged or uncontradicted piece of evidence given by a witness, must still be evaluated for its cogency and/or credibility by the trial judge before he attaches any weight to it and accept it to prove a claim. Thus, the court does not just accept any evidence hook, line and sinker merely because it was not challenged nor contradicted by the other side – opposing party.”

See also Iyere v. Bendel Feed and Flour Mill Ltd. [2008] LPELR-1578[SC] at page 45. I am satisfied from the documentary evidence before this Court that the sum of N3, 297,527.93 is due and owing by the Defendant. It is the duty of every court of law to render to everyone according to his proven claim. It cannot give to a party a relief which it has not proved. See In-Time Connection Limited v. Mrs. Janet Ichie [supra] 24. Accordingly, relief one succeeds in part.

Relief two is for interest on the sum of N4, 038,232.10 at the rate of 19% per annum from 1st April 2016 until judgment and thereafter at the same rate until final liquidation of the entire debt. I have carefully perused exhibit 1, and although various sums were posted into the account as interest repayments, the rate of interest applied to this facility is not evident on exhibit 1 and the Claimant did not lead any evidence on the agreed rate of interest. While it is true that the Claimant is a commercial bank and as such entitled to charge interest on facilities granted to its customers, the claim before this Court is not strictly one of banker and customer; but a claim for recovery of ex-staff loans. The law on award of pre-judgment interest is well settled and for emphasis interest may be awarded in two distinct circumstances, namely: as of right and where there is a power conferred by statute to do so in the exercise of the court’s discretion. Interest may be claimed as of right where it is contemplated by the agreement between the parties, under a mercantile custom, or under a principle of equity such as breach of a fiduciary relationship. Where interest is claimed as a matter of right, the proper practice is to claim entitlement to it in the originating process and plead facts which show such entitlement. See Interdrill Nigeria Ltd. & Anor. v. United Bank for Africa Plc [2017] 13 NWLR [pt.1581] 52 at 72-73. Although interest was claimed in the complaint and amended statement of facts, there are no facts in support of the claim for interest in the amended statement of facts and the statement on oath of the Claimant’s witness. Consequently, the submission of Chief Okonkwo in paragraphs 5.1.4.1 to 5.1.4.3 of the Claimant’s final written address is not supported by evidence and goes to no issue. It is trite law that address of counsel is supposed to deal only with the evidence before the Court. See Onwuchekwa & Anor. v. Onwuegbu & Ors. [2013] LPELR-20653[CA] 30. The custom or practice which entitles banks to interest on ex-staff loans was neither pleaded nor proved and it is not the practice of the Court to speculate on the applicable rate of interest. In the words of Owoade, J.C.A., in Iwayemi & Anor. v. Akinbo [2016] LPELR-40136[CA] 22-23,

“… law is not a game of wizardry. It is not and has never been the function of a Court of law by its own ingenuity or exercise to imagine, speculate on or to supply evidence to work out the mathematics of arriving at an answer in a case which only evidence tested under cross examination can supply.”

Also, there is no evidence that the statement of account was forwarded to the Defendant prior to institution of this suit. Eko, J.C.A. [as he then was] in In-Time Connection Limited v. Mrs. Janet Ichie [supra] at page 24 observed that the Defendant’s obligation to pay interest on a debt must be strictly proved by evidence before the Claimant can be entitled to it. In the light of the above, I find and hold that the Claimant has not proved the claim for pre-judgment interest at 19% per annum. However, this Court is empowered by Order 47 rule 7, National Industrial Court of Nigeria [Civil Procedure] Rules, 2017, to award post-judgment interest at a rate not less than 10% per annum, which the Claimant will get.

Relief 3 is a claim for cost of the action. Generally, cost follows events and a successful party is entitled to his cost. By Order 55 rule 1 of the Rules of this Court, award of costs is subject to the discretion of the Court, which discretion, in all circumstances, must be exercised judicially and judiciously. Costs are not meant to be a bonus to the successful party or serve as punishment against the losing party. It cannot also cure all the financial losses sustained in litigation and the winning party has a duty to mitigate his losses. The main aim of cost is to indemnify the successful party for his out of pocket expenses and be compensated for the true and fair expenses of the litigation taking the facts of each case into consideration. See Citibank Nigeria Limited v. Mr. Martins Ikediashi [2014] LPELR-22447[CA] 43.

Some of the factors to consider in awarding cost are filing fees paid, duration of the case, number of witnesses called by the party in victory, the vexatious nature of the action, cost of legal representation, monetary value at the time of incurring the expenses et cetera. See Master Holding [Nig.] Limited & Anor. v. Emeka Okefiena [2010] LPELR-8637[CA] 34-35. From the Court’s record, the sum of N9, 700 was spent as filing fees, learned counsel for the Claimant appeared before me about 5 times. In the circumstance, cost of N50, 000 is awarded in favour of the Claimant against the Defendant.

On the whole, this case succeeds in part. Judgment is entered in favour of the Claimant against the Defendant as follows:

The sum of N3, 297,527.93 being the Defendant’s indebtedness to the Claimant on the facility granted to him on 12th July 2007. This sum shall bear interest at the rate of 10% per annum from the date of this judgment until it is fully liquidated.