SOJECON ENGINEERING LIMITED V. STANBIC BANK NIGERIA LIMITED
(2011)LCN/4342(CA)
In The Court of Appeal of Nigeria
On Monday, the 28th day of February, 2011
CA/PH/295/2004
RATIO
UNDEFENDED LIST PROCEDURE: OBJECT OF THE UNDEFENDED LIST PROCEDURE
The object in the undefended list procedure is to prevent unnecessary delay in cases where the claim of the plaintiff from the affidavit is unassailable. See OKAMBAR LTD. V. ALHAJI SOLE (1990) 11 SCNJ 1. The procedure is not to be adopted in proceedings where the facts are contentious. See IMONIYAME HOLDINGS LTD. V. SONEB ENTP. LTD. (2010) 16 WRN 1 at 14. The case is not tried on an affidavit evidence. The purpose of the filing of the affidavits by parties is not to take the place of pleadings but to enable the court to decide whether or not the defendant had any defence to the action of the plaintiff. Se INONIYAME HOLDINGS LTD. V. SONEP (supra) The undefended list procedure does not relieve burden to prove its case as he who asserts must prove. See section 137 of the Evidence Act. The undefended list procedure is made in respect of a claim to recover a debt or a liquidated money demand. See Order 11 Rule of Rivers State High Court Rules 2006. See also IMONIYAME HOLDINGS LTD. V. SONEP ENTP. LTD. (supra). PER T.O. AWOTOYE, J.C.A.
LIQUIDATED MONEY DEMAND: MEANING OF “LIQUIDATED MONEY DEMAND”
In EKO ODUME V. UME NNACHI (1964) 1 ALL NLR 329 Idigbe JSC explained the meaning of liquidated money demand thus:- “Whether the amount to which the plaintiff is entitled can be ascertained by calculations or fixed by any scale or other positive data it is said to be liquidated or made clear.” Iguh JSC later in MAJA V. SAMOURIS (2002) 2 SCNJ 39 explained further- “A liquidated demand is a debt or specific sum of money usually due or payable and its amount must be already ascertained capable of being ascertained as a mater of authentic without any other or further investigation.” It is therefore incumbent on the Plaintiff in his affidavit in support of the motion in an undefended fist procedure to explain in details what he is claiming particularly in a case where the claim includes debt and interest. In other words they should not be lumped together in order to satisfy the requirement of section 137 of the Evidence Act, in case, the defendant, as in this case, denies the interest claimed. PER T.O. AWOTOYE, J.C.A.
ISSUES OF INTEREST: WHAT MUST BE SHOWN WHEN ISSUES OF INTEREST ARE BEING CONTESTED
When issues of interest are being contested, it is not by documents alone but by open and graphic demonstration that the interest calculated are shown to be accurate. PER T.O. AWOTOYE, J.C.A.
UNDEFENDED LIST PROCEDURE: WHETHER WHEN THERE IS A DEFENCE WHICH CALLS FOR INVESTIGATION THE SUIT UNDER THE UNDEFENDED LIST PROCEDURE SHOULD AND OUGHT TO BE TRANSFERRED TO THE GENERAL CAUSE LIST FOR HEARING
Where there is a defence which calls for investigation the suit should and ought to be transferred to the general cause list for hearing. The court has a duty to ensure fair hearing even in cases under the undefended list. See CALVEN PLY LTD & 2 ORS V. PEKAB INTERNATIONAL LTD. (2001) 16 WRN 84, THOR LTD V. FCMB (2006) 1 WRN 1. The undefended list is not designed to shut out a defendant who can show that there is a triable issue to be tired. See NWORAH & SONS LTD. V. AKPUTA (supra). PER T.O. AWOTOYE, J.C.A.
UNDEFENDED LIST PROCEDURE: WHETHER ASSESSMENT OF INTEREST IS ALIEN UNDER THE UNDEFENDED LIST PROCEDURE
Assessment of interest is alien to undefended list procedure. See ALHAII GOMBE V.PW (NIG.), LTD. & ORS. (1995) 6 NWLR (PT. 402) 402. See also EKERETE V. UBA PLC (2005) 9 NWLR (PT. 930) page 401 at 414. PER T.O. AWOTOYE, J.C.A.
JUSTICES
MUSA DATTIJO MUHAMMAD Justice of The Court of Appeal of Nigeria
EJEMBI EKO Justice of The Court of Appeal of Nigeria
TUNDE OYEBANJI AWOTOYE Justice of The Court of Appeal of Nigeria
Between
SOJECON ENGINEERING LIMITED Appellant(s)
AND
STANBIC BANK NIGERIA LIMITED Respondent(s)
T.O. AWOTOYE, J.C.A. (Delivering the Leading Judgment): This is the judgment in the appeal against the judgment of JUMBO J. at the Rivers State High Court Port Harcourt delivered on 22/01/2004.
The plaintiff in the lower court took out the writ of summons against the defendant claiming as follows:
“1. The sum of N7,104,626.63 (Seven Million, One Hundred and Four Thousand, Six Hundred and Twenty Six Naira, Sixty Three Kobo only) being monies due and outstanding from the defendants in favour of the Plaintiff for the Contract Finance Facility granted the defendant.
2. Interest on the said sum of N7,104,626.63 (Seven Million, One Hundred and Four Thousand, Six Hundred and Twenty Six Naira, Sixty Three Kobo only) at the rate of 38% per annum from the date this matter is instituted until judgment.
It further sought and obtained leave of order of court to enter the suit under the undefended list. The motion exparte on this prayer was supported by a 25 paragraphs of affidavit.
As required by the Rules of Court the defendant in response filed notice of intention to defend the suit under ORDER 23 RULE 3 of the RIVERS STATE HIGH COURT RULES 2006. The said notice was supported by 13 paragraphs affidavit. In paragraph 3 of the affidavit supporting the NOTICE the defendant admitted paragraphs 1- 13 of the affidavit of the plaintiff.
The learned trial judge considered the various processes filed concluded that “the defendant’s affidavit in support of his notice of intention to defend is destitute of any material fact that could defeat the plaintiff’s claim. The affidavit discloses no defence on the merit. “The trial court therefore entered judgment in favour of the plaintiff in terms of his writ of summons,
The defendant being dissatisfied with the judgment of the lower court filed Notice of Appeal with 4 Grounds of Appeal.
The appellant wants the court to allow this appeal set aside the judgment of the trial court entered on 22/1/2004 and order this suit to be transferred from the undefended to the ordinary cause list for trial on the merits before another judge of the High Court of Rivers State of Nigeria.
Parties to this appeal filed and exchanged briefs of argument.
In the appellant’s brief, the appellant formulated one issue for determination to wit.
WHETHER OR NOT THE LEARNED TRIAL JUDGE EXERCISED HIS DISCRETION JUDICIOUSLY AND JUDICIALLY WHEN HE DECLINED TO TRANSFER THIS SUIT FROM THE UNDEFENDED LIST TO THE GENERAL CAUSE LIST.
The issue formulated by the Respondent is essentially the same as that formulated by the appellant. I shall therefore adopt the issue as formulated by the appellant for the purpose of this appeal.
In the brief of argument learned counsel for the appellant submitted that it was the duty of the defendant to show all or any of the following in his affidavit in support of notice of intention to defend.
(i) a prima facie case which if proven would constitute a defence to the claim.
(ii) a triable issue which ought to go on trial.
(iii) a substantial question of fact or law.
He cited SNIG (NIG.) LTD v. ED OF NIGERIA LTD (2003) FWLR (PT. 171) 1006 at 1620.
Learned counsel submitted further that the appellant raised triable issues and substantial question of law facts on the basis of which the trial court ought to have moved the suit to the General cause list for full trial.
He added that the lower court ought to have considered the issue of pendency of suit No. PHC/629/2003 brought to the notice of the trial judge and moved the suit to the General cause List. He urged the court to interfere with the decision of the lower court. He cited ENGINEER EMMA OSOLU V. ENGR. OSOLU & 6 ORS. (2004) FWLR (PT.172) 1777 at 1798.
He further contended that the trial judge even that it was an important issue of law/fact that was raised on the interest rate claimed yet he did not transfer the matter to the general cause list. He cited FEDERAL MILITARY GOVERNMENT OF NIGERIA & 3 ORS. V. ABACHE MALAM SANI (1990) 4 NWLR (PT.147) 688. Learned counsel stated further that the appellant raised the triable issue of non-compliance with section 15 of the Banking Act. He argued that the trial court wrongly embarked on the evaluation of evidence at a wrong stage and consequently held that the appellant did not adduce evidence thereby denying the defendant/appellant the right to fair hearing.
He finally urged this court to set aside the judgment and order made by the trial court and order that the matter be transferred to the General cause List for trial before another judge of the High Court of Rivers State.
As aforestated the Respondent filed his Respondent’s brief wherein he formulated one issue for determination.
Learned counsel in his argument raised the following questions.
(i) Were there triable issues in the Appellants affidavit at the trial court?
(ii) Did the Respondent charge bloated interest rates contrary to Central Bank of Nigeria guideline or the contract finance facility?
(iii) Did the existence of suit No. PHC/629/2003 constitute a defence on the merit in the Appellant’s favour?
(iv) Should the trial court’s discretion be interfered with by this court?
Learned counsel for the Respondent submitted that the affidavit of the defendant in the lower court did not condescend on particulars. He cited MACAULAY v. NAL MERCHANT BANK LTD (1990) 4 NWLR (PT.144) 283 at 306 – 307; UDEMBA V. MORECAB FINANCE NIGERIA LTD (2002) FWLR (PT.85) page 326. He submitted further that the defendant ought to have given sufficient facts and particulars to show that there was a bonafide defence. This learned counsel submitted, the defendant failed to do. He added that vital documents to buttress the defence of the defendant ought to have been exhibited. He referred to AGRO-MILLERS LTD. V. CMB (1997) 10 NWLR (PT.525) 469.
Learned counsel further contended that the argument of the appellant on non-compliance with section 15 of the Banking Act did not draw strength from any of the grounds of appeal and so should be discountenanced.
On the pendency of Suit No. PHC/629/2003 learned counsel submitted that this suit was different from PHC/629/2003 and should not constitute sufficient basis for the transfer of this matter to the ordinary cause list.
Learned counsel for the Respondent finally urged the court to dismiss the appeal stressing that the lower court properly evaluated the evidence before it.
I have carefully considered the submissions of learned counsel on both sides as well as the contents of the record of appeal as transmitted.
The object in the undefended list procedure is to prevent unnecessary delay in cases where the claim of the plaintiff from the affidavit is unassailable. See OKAMBAR LTD. V. ALHAJI SOLE (1990) 11 SCNJ 1. The procedure is not to be adopted in proceedings where the facts are contentious. See IMONIYAME HOLDINGS LTD. V. SONEB ENTP. LTD. (2010) 16 WRN 1 at 14. The case is not tried on an affidavit evidence. The purpose of the filing of the affidavits by parties is not to take the place of pleadings but to enable the court to decide whether or not the defendant had any defence to the action of the plaintiff. Se INONIYAME HOLDINGS LTD. V. SONEP (supra)
The undefended list procedure does not relieve burden to prove its case as he who asserts must prove. See section 137 of the Evidence Act.
The undefended list procedure is made in respect of a claim to recover a debt or a liquidated money demand. See Order 11 Rule of Rivers State High Court Rules 2006. See also IMONIYAME HOLDINGS LTD. V. SONEP ENTP. LTD. (supra).
In EKO ODUME V. UME NNACHI (1964) 1 ALL NLR 329 Idigbe JSC explained the meaning of liquidated money demand thus:-
“Whether the amount to which the plaintiff is entitled can be ascertained by calculations or fixed by any scale or other positive data it is said to be liquidated or made clear.”
Iguh JSC later in MAJA V. SAMOURIS (2002) 2 SCNJ 39 explained further-
“A liquidated demand is a debt or specific sum of money usually due or payable and its amount must be already ascertained capable of being ascertained as a mater of authentic without any other or further investigation.”
It is therefore incumbent on the Plaintiff in his affidavit in support of the motion in an undefended fist procedure to explain in details what he is claiming particularly in a case where the claim includes debt and interest. In other words they should not be lumped together in order to satisfy the requirement of section 137 of the Evidence Act, in case, the defendant, as in this case, denies the interest claimed.
In this case paragraphs 1- 13 of the plaintiffs affidavit were admitted by the defendant but other paragraphs, were denied. Paragraphs 2 – 3 of the affidavit in support of notice of intention to defend suit reads: –
“2. That I am very conversant with the facts of this case and I have carefully read through the affidavit in support of plaintiff’s writ of summons and, in answer thereto, defendant admits paragraphs 1-13 of plaintiff’s said supporting affidavit.
3. The Defendant denies paragraphs 14 – 25 of plaintiff’s affidavit and in answer thereto Defendant avers as follows:
(i) Plaintiff used bloated banking charges and interests that are above the Central Bank of Nigeria guide lines regulating bank charges and interest, thereby contravening Central Bank of Nigeria guideline on interest on bank lending and paragraph 8(iii) of plaintiff’s exhibit C.
(ii) Plaintiff’s EXHIBIT ‘G’ cannot therefore be correct except same is subject to scrutiny by chartered accountants/auditors which exercise cannot be done without hearing this matter on the general cause list where defendant can call expert witnesses to challenge and cross examine the plaintiff on all the calculations or computations in EXHIBIT ‘G’.”
The defendant’s defence was that the banking charges and interest used were bloated charges in contravention of Central Bank of Nigeria guideline on interest on bank lending and paragraph 8(iii) of plaintiff’s Exhibit C.
This conflicts violently with paragraphs 14 – 21 of the Plaintiffs affidavit which read thus:
“14 The Plaintiff shall contend that the last withdrawal made on the facility by the plaintiff was on the 25th July, 2001. By that date the actual total withdrawals amounted to N4,398,331.08 (Four Million, Three Hundred and Ninety Eight Thousand, Three Hundred and Thirty One Thousand and Eight Kobo). Furthermore, the various bank charges and interest on the facility had amounted to N2,706,295.55 (Two Million, Seven Hundred and Six Thousand, Two Hundred, Ninety Five Naira, Five Kobo).
15. The defendant also made some domiciliation and of lodgments of the contract proceeds into its account with the plaintiff. The plaintiff shall contend that in furtherance to the terms of the agreement the defendant had initially domiciled a total of N6,650,000.00 (Six Million, Six Hundred and Fifty Thousand Naira only) of contract proceeds by the 11th September, 2001, in three installments namely;
N4,750,000.00 – 6th July, 2001
N1,400,000.00 – 18th July, 2001
N5000,000.00 – 11th September, 2001.
16. However, on the said 6th July, 2001, and in furtherance of the availability of the facility the defendant withdrew N4,000,000.00(Four Million) from the N4,750,000.00 domiciled earlier on that date. By the said withdrawal, the defendant left a net effect of N750,000.00 (Seven Hundred and Fifty Thousand Naira) of the contract proceeds in its account with the plaintiff.
17. By ordinary mathematical calculation, the defendant had by the 11th September, 2001 made a total net lodgment of N2,650,000 (Two Million, Six Hundred and Fifty Thousand Naira only) into the account. This is the result of adding the total sum of N750,000.00 and the lodgments made on the 18th July and 11th September, 2001 earlier stated above.
18. By the terms of the contract finance facility agreement, the defendant was aware that the plaintiff reserved the right to review the interest rate of the executed contract in line with market conditions. In furtherance thereto the plaintiff had at various times formally informed the defendant of the review on the interest rate on the facility.
Now shown to me and marked Exhibit E is a copy of a letter dated 8th March, 2002 informing the defendant of a review in the interest rate charged on the facility.
19. The plaintiff shall contend that owing to the neglect and or refusal of the defendant to make further lodgments in its account aside from the N2.650,000 which was far below the credit facility given to it, interest and charges continues to accrue on the said amount to the extent that there was a net outstanding principle loan of N3,375,994.17 as at 31st August, 2001.
20. The amount continued to accrue interest and charges (inclusive of legal fees for perfection of pledges, security and insurance premium on some properties) so much so that by the 9th December, 2002 the outstanding debit plus interest had accrued to N5,833,127.95 (Five Million, Eight Hundred and Thirty Three Thousand, One Hundred and Twenty Seven Naira, Ninety Five Kobo) only.
Now shown to me and marked Exhibit F is the plaintiffs letter to the defendant dated 9th December, 2002.
27. As at the 30th June, 2003 that debit balance had accrued to N7,104,626.23 (Seven Million, One Hundred and Four Thousand, Six Hundred and Twenty Six Naira, Twenty Three Kobo) only.
What else was the defendant to do for it to be heard? He needed to adduce evidence to prove the “bloated charges.” The plaintiff needed to give oral evidence to proves its case by proving compliance with the terms of the agreement. The object of the affidavit filed is to show a dispute between the parties which needed to be heard. See IMONIYAME HOLDINGS LTD. V. SONEB ENTP. LTD. (supra).
When issues of interest are being contested, it is not by documents alone but by open and graphic demonstration that the interest calculated are shown to be accurate. I do agree that a defendant must condescend in particulars but how else could the defendant have done this? Where there is a defence which calls for investigation the suit should and ought to be transferred to the general cause list for hearing. The court has a duty to ensure fair hearing even in cases under the undefended list. See CALVEN PLY LTD & 2 ORS V. PEKAB INTERNATIONAL LTD. (2001) 16 WRN 84, THOR LTD V. FCMB (2006) 1 WRN 1.
The undefended list is not designed to shut out a defendant who can show that there is a triable issue to be tired. See NWORAH & SONS LTD. V. AKPUTA (supra). I have carefully gone through the processes filed by the parties in the lower court and the judgment of the lower court I respectfully disagree with the reasoning of the trial judge on the issue of interest and bank charges. Was the accuracy of the interest and bank charges proved by the plaintiff? Would it not have been in the interest of justice to allow the parties to prove by oral evidence the accuracy of the interest and bank charges charged in the face of the contention of the defendant? What were the market conditions that necessitated the variations in interest rate? What type of interest were charged compound or simple? What was 5% flat payable up front monthly on management fee? The court would not speculate on all these. It is the plaintiff that has to prove then in the face of the challenge by the defendant. Assessment of interest is alien to undefended list procedure. See ALHAII GOMBE V.PW (NIG.), LTD. & ORS. (1995) 6 NWLR (PT. 402) 402. See also EKERETE V. UBA PLC (2005) 9 NWLR (PT. 930) page 401 at 414.
I am of the respectful view that the door of justice had been shut against the defendant and its right to fair hearing had been infringed by the entry of judgment on the UNDEFENDED LIST in favour of the plaintiff/respondent instead of transferring the suit to the ORDINARY CAUSE LIST.
This appeal succeeds. It is hereby allowed. The judgment of the trial court entered on 22/1/2000 is hereby set aside. In its place I order that the suit be transferred from the undefended list to the ordinary cause list for trial on merits before another judge of the High Court of Rivers State. The Respondent is to pay N50,000.00 as cost in favour of the Appellant.
M. DATTIJO MUHAMMAD, OFR J.C.A.: I have read before now the lead judgment of my learned brother Awotoye JCA. I agree with him that where the undefended list procedure is employed to determine a contentious claim the end result, as has been in the instant matter, would be to deny the defendant the real opportunity of being heard. Once a triable issue persists, Plaintiff’s resort to the undefended list procedure must abort and the suit transferred to the court’s general cause list to be determined after a full trial. See Okambar Ltd v. Alhaji Sole (1990) 11 SCNJ and Federal Military Government of Nigeria & 3 Ors. v. Abacha Malam Sani (1990) 4 NWLR (Pt. 147) 688. For the foregoing and the fuller reasons contained in the lead judgment also find merit in the appeal, allow it and abide by the consequential orders made by my learned brother.
EJEMBI EKO, J.C.A.: HON. Justice Alex, W. Jumbo of the Rivers State High Court had on 22nd January, 2003 entered judgment against the Defendant (the Appellant) in favour of the Plaintiff (the Respondent) on the undefended list procedure in the suit in which the Respondent, as the Plaintiff, claimed –
1. The sum of N7,104,626.63 being monies due and outstanding from the Defendants in favour of the Plaintiff for contract Finance Facility granted the Defendant.
2. Interest on the said sum of N7,104,626.63 – at the rate of 38% per annum from the date this matter is instituted until judgment.
The Plaintiff/Respondent’s claims were verified by a supporting affidavit. The averments in the support affidavit were vehemently disputed by the Defendant/Appellant, who further averred in the affidavit in support of his notice of intention to defend, in paragraph 3 thereof, that –
i. The Plaintiff used bloated banking charges and interests that are above the Central Bank of Nigeria Guidelines regulating bank charges and interest, thereby contravening Central Bank of Nigeria Guidelines on bank lending and paragraph 8(iii) of Plaintiff’s Exhibit ‘C’.
ii. Plaintiff’s Exhibit ‘G’ can not therefore be correct except same is subjected to scrutiny by chartered accountants/auditors which exercise can not be done without hearing this matter on the general cause list where the defendant can call expert witnesses to challenge and cross examine the Plaintiff on all the calculations or computations in Exhibit ‘G’.
Exhibit ‘G’ is the basis of the Plaintiff’s claim on the undefended list procedure. The learned trial Judge found, rightly, that the Defendant “Challenged the validity of Exhibit ‘G’.” He however erred when he held that the Defendant *did not give his own details of what the account is, rather he wants Exhibit ‘G’ to be scrutinized by chartered accountants and auditors.” The defence disclosed by paragraph 3 (i) and (ii), of the Defendant’s affidavit, above reproduced, is that the sum claimed by the Plaintiff is made up of, or mixed up with, illegal charges and interests contrary to the Plaintiff’s own document, Exhibit ‘C’, and in contravention of Central Bank of Nigeria Guidelines on banking charges and interests. And that Exhibit ‘G’, relied on by the Plaintiff, is contaminated or muddled up by the said illegal charges/interests. It is on that basis that the Defendant pleads that this issue can not be resolved on affidavit evidence, and that he would need to call accounting experts to examine and unravel the basis of the plaintiff’s calculations and computations in Exhibit ‘G’.
The purpose of the Defendant, sued on the undefended list, filing affidavit in support of his notice of intention to defend, is to enable the trial Judge decide whether or not the Defendant has any defence to the action of the Plaintiff. In otherwords, it is to enable the trial Judge see if the facts, relied upon by the Plaintiff for bringing the claim on the undefended list, are, or are not, contentious. If the facts are contentious then the undefended list procedure is not the best in the circumstance. The disputed facts, accordingly, must be proved as required by sections 135 – 137 of the Evidence Act. Each party shall therefore prove or establish his assertions in order to succeed against the other.
I agree with my learned brother, T.O. AWOTOYE, JCA, in the lead judgment just delivered that the Defendant had joined issues with the plaintiff on the claims made by the latter, and that triable issues had been disclosed to warrant the suit being transferred to the general cause list. I also allow the appeal and order that the suit be heard on the general cause list by another Judge of the High Court of Rivers State.
Appearances
U. B. Obaika Esq.;For Appellant
AND
T.J. Krukrubo;
M. E. Ugbeta;For Respondent
