INTERMARKETS NIGERIA LIMITED & ANOR V. UNITY BANK PLC
(2010)LCN/3841(CA)
In The Court of Appeal of Nigeria
On Wednesday, the 2nd day of June, 2010
CA/K/6/2004
RATIO
PROCEDURE: ESSENCE OF THE PROVISIONS OF THE SHERIFFS AND CIVIL PROCESS ACT AS IN RELATION TO SERVICE OF COURT PROCESSES OUTSIDE THE TERRITORIAL JURISDICTION OF A STATE HIGH COURT
It has been stated that the essence of the provision of the Sheriffs and Civil Process Act as they relate to service of court processes outside the territorial jurisdiction of a State High Court, is to give to the party on the other side, i.e, the Defendant, ample opportunity to study the Claims filed against him and then make an arrangement for entering an appearance in the suit. Even if the Defendant did not get the 30 days period prescribed for him by the Act, but, nevertheless entered an appearance within the few days less the 30 days left for him, from the date of service of the Writ on him, he would not avail himself of section 99 of Sheriffs and Civil Process Act.
Uwaifo, J.S.C, in the case of Uchendu vs Ogboni (1999) 5 NWLR Part 603 Page 337 at 357 stated thus:
The whole purpose of section 99 is, for obvious reasons, to afford a defendant outside the jurisdiction sufficient time (which the law makers in their wisdom considered to be 30 days) to arrange to answer to the writ before the Court from the date it was served on him as a matter of mere convenience so that no order may be behind his back within that period. If for any cause (mistake or oversight of the provision of section 99, maybe) less than thirty days is endorsed on the writ, but the defendant duly appeared and participated in the proceedings, the proceedings cannot be regarded as a nullity simply because the defendant had less than thirty days to answer to the writ. The mere non -compliance with section 99 does not create a jinx on the proceedings that follow.”
It is clear from the above that the provisions of section 99 will, however, have no effect if the defendant enters appearance before 30 days and participate in the proceedings. PER BABA ALKALI BA’ABA, J.C.A
PROCEDURE: HOW SHOULD ISSUES RELATING TO DISCREPANCY BETWEEN THE AMOUNT CLAIMED AND THE FIGURE ASCERTAINED FROM THE AFFIDAVIT BE RESOLVED
It is, therefore, the law that a discrepancy between the amount claimed and the figure that can be ascertained from the verifying affidavit raises a contentious issue that can be resolved only by being tried. Thus, where the actual indebtedness of the defendant available without resort to other extrinsic accounting source that would operate as a defence, it is good enough to justify the transfer of the action to the general cause list to enable it to be tried on the merits regardless of the fact that the Defendant did not file notice of intention to defend. See Brifina Ltd vs. Intercontinental Bank Ltd (2003) 5 NWLR Part 814 Page 540. PER BABA ALKALI BA’ABA, J.C.A
PROCEDURE: WHAT SHOULD CONSTITUTE AN ACTION COMMENCED UNDER THE UNDEFENDED LIST
It is an established principle that an action commenced under the undefended list must be for a liquidated sum or a liquidated claim, which is an amount of which has been agreed on by the parties to the action or is fixed by operation of law. It is also a claim which can be determined with exactness from parties agreement or by arithmetical process or application of definite rules of law, without reliance on opinion or discretion. PER THERESA NGOLIKA ORJI-ABADUA, J.C.A.
JUSTICES
BABA ALKALI BAABA Justice of The Court of Appeal of Nigeria
JOHN IYANG OKORO Justice of The Court of Appeal of Nigeria
THERESA NGOLIKA ORJI-ABADUA Justice of The Court of Appeal of Nigeria
Between
1. INTERMARKETS NIGERIA LIMITED
2. ALEX J. COZMA Appellant(s)
AND
UNITY BANK PLC Respondent(s)
BABA ALKALI BA’ABA, J.C.A (Delivering the Leading Judgment): This is an appeal against the ruling and Judgment of the Kano State High Court Holden at Kano State Judicial Division delivered on 25/6/2003 and 24/7/2003 respectively in Suit No. k/556/2002, filed by the appellants who were the defendants at the trial court.
The respondent was the plaintiff before the trial court where it commenced an action against the appellants by an endorsed concurrent writ dated the 26th day of September, 2002 brought under the undefended list procedure pursuant to order 23 of the Kano State High Court (Civil Procedure Rules 1988). The respondent’s claim is contained at pages 10-11 of the printed record, it reads:
“1. The plaintiff’s case against the Defendant is for the sum of N35,445,071.89k being the outstanding balance together with the interest and other Banking Charges which accrued as at 31/6/2002 on overdraft and warehousing loan granted to the Defendants. The Defendants have refused to and/or neglected to settle their indebtedness despite repeated demand.
2. Compound interest on the said sum of N35,445,071.89k at the rate of 21% per annum from 31/6/2002 until judgment and thereafter interest rate of 10% until the entire judgment debt is liquidated.
3. Cost of this action.
WHEREOF the plaintiff claims the said sum of N35,445,071.89k with interest and cost of the action.”
The respondent as the plaintiff filed a motion ex-parte dated the 25th day of September, 2002 praying the court for the following orders:-
“(a) Leave of the Court to issue a concurrent writ of summons.
(b) Leave of this court to serve this concurrent writ of summons on the 1st Defendant who resides at No.33B Bourdillon Road Ikoyi, Lagos or at Otta Efun, Old Ikirun Road Osogbo, Osun State which is outside the jurisdiction of this Court.
(c) Leave to enter the suit under the undefended list AND for such order or further order (s) as this Honourable court may deem fit to make in the circumstance.
DATED THIS 25TH DAY OF SEPTEMBER 2002.”
The application was supported by a fourteen paragraph affidavit.
The defendant now appellants filed a notice of intention to defend supported by a forty paragraph affidavit contained at pages 89-94 of the printed record.
The trial court first heard and determined the three filed by the defendants/appellants and in its ruling at pages 29-34 of the printed record, dismissed all three motions and held that all the three motions were not brought in good faith as they lack merit. The trial court at pages 42-43 of the record inter alia further held:-
“The defendants having failed to disclose any defence on the merit, the court has no alternative but to refuse the transfer of the matter into the general cause list enter judgment for the plaintiff.
Judgment is accordingly entered for the plaintiff against the defendant in the sum of N35,445,071.89k being the outstanding balance together with interest as at 30.6.02 on overdraft and warehousing loan grant to the Defendants, which they refused or neglected to pay despite repeated demands.
The defendant shall also pay the plaintiff sum of N30,024.00k being the cost of filing this action.”
Dissatisfied with the judgment of the trial court the appellants by the leave of this court granted on the 14th day of March, 2005, filed a notice of appeal containing fifteen grounds of appeal in respect of both the ruling and the judgment.
At the hearing of the appeal which came up on the 22nd day of March 2010 counsel to the parties adopted and relied on their respective briefs of argument.
In the appellants brief dated the 10th day of December, 2004 deemed filed on the 14th day of March, 2005 by this court, the appellants’ counsel formulated four issues for determination in this appeal as follows:
“(1) Whether the lower court had jurisdiction to handle the trial and enter judgment considering the facts that the Writ of Summons was issued outside the jurisdiction of the court without leave of court and that the return date after service of the said Writ on the 1st defendant/appellant was only 23 days and not the minimum 30 days period contrary to the provisions of Order 5 rule 14 of the Kano High Court Civil Procedure Rules 1988 and Section 96 to 98 of the Sheriffs and Civil Process Act respectively.
(2) Whether the lower court was right to have relied upon the contents of further affidavits filed without leave of court in support of the Writ of Summons in a matter on the undefended list after the writ had been ordered to be placed on the Undefended list upon a motion ex-parte moved to that effect.
(3) Whether the lower court was right to have entered judgment on the undefended list without calling upon the plaintiff to prove its case by giving oral evidence and tendering necessary document in evidence.
(4) Whether the lower court was right to have entertained the case when the alleged transaction was tainted with fraud and illegality.”
The respondent on the other hand in the respondent’s brief of argument dated and filed on the 23rd day of July, 2009, the respondent’s adopted the issues formulated by the learned counsel for the appellants for the determination of this appeal.
The appellants also field a Reply brief dated 2/9/2009 and deemed filed on 6/10/09.
In resolving issue No.1, reference must be made to pages 20 and 178 of the record of this appeal. It is apparent at page 20 of the record, that on 18/10/02, one A. Y. Gumel Esq; learned counsel for the plaintiff at the trial court, moved a motion ex-parte seeking the leave of the trial court for issuance and service of the Concurrent Writ marked “Undefended” on the 1st Defendant outside the territorial jurisdiction of the Kano State High Court. The same was granted by the trial court on the same date, after which, the said suit placed on the undefended list was adjourned to 20/11/02 for mention. The enrolled order of the trial court in this respect, is, also, shown at page 178 of the record. This scenario, I must admit, is contrary to the assertions of the Appellants’ Counsel that no leave of the trial court was obtained for the issuance and service of the Concurrent Writ on the 1st Defendant outside the jurisdiction of the Kano State High Court. Consequently, the argument of learned counsel for the Appellants in this regard is not only preposterous but futile.
Considering the second limb of the first issue bordering on the Appellants being given only 23 days from the date of service of the concurrent writ on the 1st Defendant instead of the mandatory 30 days stipulated in the Sheriffs and Civil Process Act, it is interesting to observe that after filing their memorandum of appearance under protest via their counsel, and, about three different motions on notice articulating their objections therein, the Appellants, however, further participated in the proceedings before the trial Court after the trial Court’s ruling on 25/ 6 /03. On the same 25/6/03, they, via their said Counsel, Charles Okike Esq., informed the trial Court of the Notice of Intention to Defend dated 16/5/03 filed by them which was supported by an affidavit of 40 paragraphs and two Exhibits. After the Counsel’s submissions, he urged the trial Court to transfer the said suit the general cause list.
It has been stated that the essence of the provision of the Sheriffs and Civil Process Act as they relate to service of court processes outside the territorial jurisdiction of a State High Court, is to give to the party on the other side, i.e, the Defendant, ample opportunity to study the Claims filed against him and then make an arrangement for entering an appearance in the suit. Even if the Defendant did not get the 30 days period prescribed for him by the Act, but, nevertheless entered an appearance within the few days less the 30 days left for him, from the date of service of the Writ on him, he would not avail himself of section 99 of Sheriffs and Civil Process Act.
Uwaifo, J.S.C, in the case of Uchendu vs Ogboni (1999) 5 NWLR Part 603 Page 337 at 357 stated thus:
The whole purpose of section 99 is, for obvious reasons, to afford a defendant outside the jurisdiction sufficient time (which the law makers in their wisdom considered to be 30 days) to arrange to answer to the writ before the Court from the date it was served on him as a matter of mere convenience so that no order may be behind his back within that period. If for any cause (mistake or oversight of the provision of section 99, maybe) less than thirty days is endorsed on the writ, but the defendant duly appeared and participated in the proceedings, the proceedings cannot be regarded as a nullity simply because the defendant had less than thirty days to answer to the writ. The mere non -compliance with section 99 does not create a jinx on the proceedings that follow.”
It is clear from the above that the provisions of section 99 will, however, have no effect if the defendant enters appearance before 30 days and participate in the proceedings.
It is, therefore, my humble view that in the of the above, issue No.1 will be and is hereby resolved against the Appellants.
Regarding issue No.2, it must be state the undefended list special procedure not admit of filing of further and better affidavit because, in placing the suit on the undefended list for hearing, it is only the averments in the affidavit filed in support of the claim stating the grounds upon which the claim is based that the trial court has to examine. By Order 23 Rule 1 of the Kano State High Court Rules, it is only when the Court is satisfied that there are good grounds set out in the Plaintiffs affidavit supporting the Claim, that it can enter the suit on the undefended list for hearing.
Furthermore, Order 23 Rule 3 (1) provides that after service of the Writ of Summons marked undefended and the affidavit supporting the claim on the Defendant, and he wishes to defend the suit, the Defendant shall file a Notice of Intention to defend together with an affidavit disclosing his defence thereto. If the Court is satisfied that he has shown some good reasons why the suit shall not be heard on the undefended list and the need to have it transferred to the general cause list so as to afford both parties the opportunity to adduce further evidence and call witnesses if need be to resolve the conflicting issues raised in their affidavit evidence, the suit would then be transferred to the general cause list.
Order 23 did not suggest in any form that the Plaintiff has a right to file a further and better affidavit after the Defendant had filed his Notice of Intention to Defend together with an affidavit disclosing his defence. This is because the affidavit in support of the claim is the one to disclose the grounds upon which the claim is based, and, it is incumbent on the Plaintiff to set forth the grounds of his claim.
In Enye vs. Ogbu (2003) 10 NWLR Part 828 page 403, it was held that in an action on the undefended list where the decision whether to place the action on the undefended list is based on the Claim as crystallized when the application for a Writ of Summons was made, no additional document can be filed in addition to those that accompanied the application and on which decision about placement was made. The evidence that would be required to establish a case to be heard on the undefended list, must be filed with the application for issuance of a Writ a Summons and entering the same on the undefended list for hearing. It is clear from the foregoing that issue No. 2 ought to be answered in the negative, and I so hold.
A careful study of Issues Nos, 3 and 4 reveals that they are intertwined as such, should be considered together.
Firstly, I would like to reproduce hereunder the depositions at paragraphs 21-37 of the affidavit filed by the Appellants in support of their Notice of Intention to Defend at pages 92-93 of the record thus:
“21. That the Plaintiff bank is indebted to the 1st defendant in respect of a contract supply of 3 million biros which the defendants directly negotiated with the Managing Director of the Plaintiff bank.
22. That the Plaintiff bank initially ordered 1 million biros leaving a balance of 2 million biros worth over 50 million Naira unpaid for. A copy of the 1st defendant’s letter dated 22/1/01 and Plaintiff bank’s stores receipt voucher 31/5/01 are attached to this affidavit and marked exhibit A1 and A2.
23. That the 1st defendant operates only account No.513496 with the plaintiff bank and same has no outstanding debit balance.
24. That Exhibit A-A2 attached to the further affidavit of the plaintiff dated 14/2/03 has never been seen by the defendants and refers to account Nos. LX40084502 and CO 40084501 which are not the account of the 1st defendant company or known to the defendants.
25. That the said accounts were prepared on 19/1/03, whilst this suit was pending and by unnamed and unknown persons and have not and could not have been sent to the defendants.
26. That the 1st and 2nd defendants have not seen the said account before now and same are fraudulently prepared to support this suit filed in bad faith.
27. That the 1st defendant has never issued any Cheque or been informed of or participated in any transaction alleged to have been covered in the said accounts.
28. That the accounts are prepared in the name of Intermarket Nig. Ltd. which is not the name of the 1st defendant company, which is Intermarkets Nig. Ltd.
29. That the writ of summons in this suit is also filed in the name of Intermarket Nig. Ltd. which is not the name of the 1st defendant company.
30. That the letter dated 18th June 2002 attached to the further affidavit was not signed by the 2nd defendant or any person known to the 1st and 2nd defendants and is fraudulently designed to implicate and intimidate the defendants.
31. That the 1st defendant company has no chairman.
32. That the said letter and the said accounts have been unlawfully and fraudulently prepared in order to deceive this Honourable court into believing the defendants are owing the plaintiff bank.
33. That none of the papers filed by the plaintiffs various counsels refers to any specific bank officials as having authorized this suit or having given the solicitors or their clerk any information concerning the alleged facts of this suit.
34. That the defendants are not owning the plaintiff bank the sum of N35,445,071.89 or any other sum whatsoever pursuant to the document the plaintiffs are relying on and have never admitted owing same or any other sum.
35. That the plaintiff bank through some of its officials have fabricated an untrue case against the defendant for any improper motive and are using all means possible to stampede and pressurize this Honourable court into giving judgment on the undefended list against the defendants.
36. That the plaintiff bank is not in possession of any tangible security, whether legal, or equitable belonging to either the 1st or 2nd defendant in respect of any alleged or non-existent facility or other transaction with the plaintiff bank whatsoever.
37. That the plaintiff bank wants to cover up certain operational lapses and abuses carried out by its management in their dealings with the 1st defendant and make it difficult for it to claim over N50 million from them for their wrongful refusal to take delivery of and pay for 2 million biros produced by the 1st defendant company and compound that failure and breach by ordering 2 million biros of inferior quality from another company at inflated prices.”
I must say without equivocation that the aforestated averments at paragraphs 21-37 of the Appellants’ affidavit in support of their Notice of Intention to Defend clearly showed that the issues between the parties were highly contentious and as such the suit ought to have been transferred to the general cause list for trial. Also very obscure is the exact amount allegedly owed by the Appellants to the Respondent.
In the Writ of Summons marked “Undefended”, the Respondent sued for the sum of N35,445,071.89k. All the correspondence exchanged between the parties over the said loan of N12 million and an overdraft facility of N8 million were all done in the year 2000, but, the copy of the Statement of Account shown as Exhibit A-A2 at pages 103-105 of the record did not manifest when the said respective sums were credited to the account of the Appellants. Also it was not shown where and when the said sum of N35,445,071.89k had crystallized as debt owned by the Appellants.
The last figure depicted at record is N26, 929, 784 38k, and not the sum N35,445,071. 89k being claimed.
It is, therefore, the law that a discrepancy between the amount claimed and the figure that can be ascertained from the verifying affidavit raises a contentious issue that can be resolved only by being tried. Thus, where the actual indebtedness of the defendant available without resort to other extrinsic accounting source that would operate as a defence, it is good enough to justify the transfer of the action to the general cause list to enable it to be tried on the merits regardless of the fact that the Defendant did not file notice of intention to defend. See Brifina Ltd vs. Intercontinental Bank Ltd (2003) 5 NWLR Part 814 Page 540. Needless over stretching this point, there are overwhelming reasons as shown on the record of this appeal why the suit ought to have been transferred to the general cause list by the trial Court. Accordingly issues No. 3 and 4 are resolved in Appellant’s. There is need to give the opportunity to adduce oral evidence in proof of their conflicting assertions in their affidavit evidence before the trial Court.
Consequently, and for the reasons I have given above this appeal is hereby allowed by me. The judgment of the trial Court on 25/7/03 is hereby set aside. The said suit No.K/556/02 is hereby remitted back to the Kano State High Court to be heard and determined on the merits before another Judge. There will be no order as costs.
JOHN INYANG OKORO, J.C.A.: I was obliged a copy of the judgment just delivered by my learned brother, Ba’aba, JCA and I agree with him that there is merit in this appeal and ought to be allowed. Under the undefended list procedure, where there is a discrepancy between the amount claimed and the figure that can be ascertained from the affidavit in support, this raises a contentious issue which can only be resolved by calling oral evidence, moreso, the defendant has challenged those figures in his affidavit in support of notice of intention to defend.
In the instant case, there was no justification in ignoring the weighty defence set up by the Appellant and this suit ought to have been transferred to the general cause list for hearing on the merit. Accordingly, the judgment of the trial court is hereby set aside and suit No.K/550/02 remitted back to the Kano State High Court to be heard on the merit before another judge of the High Court. I also make no order as to costs.
THERESA NGOLIKA ORJI-ABADUA, J.C.A.: I had the privilege of reading before now, the leading judgment of my learned brother, Baba Alkali Ba’aba, J.C.A.
The facts in this appeal had been meticulously and explicitly, marshaled in the lead judgment and need no repetition herein.
It is a glaring fact in this appeal that the trial Court failed in its obligation to consider whether the plaintiff made out his claim in affidavit evidence in support of his Writ of Summons marked ‘undefended’, and in particular the facts deposed to in the Appellants’ affidavit filed together with their Notice of Intention to Defend.
It is an established principle that an action commenced under the undefended list must be for a liquidated sum or a liquidated claim, which is an amount of which has been agreed on by the parties to the action or is fixed by operation of law. It is also a claim which can be determined with exactness from parties agreement or by arithmetical process or application of definite rules of law, without reliance on opinion or discretion.
Paragraphs 21-37- of the Appellants’ affidavit stating their defence to the claim undoubtedly showed that there were several disagreements between the parties on the sum being claimed thereby casting doubt on the stance of the Respondent that the claim was for a liquidated debt or is a liquidated demand. By Exhibits A-A2, it is not possible to discern the exact amount claimed by the Respondent to have been owed to it, by the Appellants. The undefended list procedure requires that the sum to be recovered should be a clear cut debt for which there is an incontestable proof against the defendant which the defendant must have no defence.
I must state that in the case at hand, the Respondent’s writ as well as the affidavit in support failed to show grounds upon which it made a claim for N35,445,071.89k thereof, and by so doing, the Respondent failed to conform with provisions. It is clear in the affidavit filed by the Appellants herein, that it raised a bona fide issue for trial between the parties.
Accordingly, this appeal is hereby allowed by me and, I abide by all the orders made in the lead judgment of this Court.
Appearances
S. E. ELEMA, ESQFor Appellant
AND
FELIX JONES OSIMERHA, ESQ.,For Respondent
