MR. LARRY UMECHE v. CITIBANK NIGERIA LIMITED & ANOR
(2013)LCN/6163(CA)
In The Court of Appeal of Nigeria
On Tuesday, the 7th day of May, 2013
CA/L/452/05
RATIO
“I have the liberty to equally adopt the far-reaching reasoning and conclusion reached in the said sister appeal (No. CA/L/97/06) just delivered. In the said sister appeal, I deemed it most appropriate to once again refer to the case of FMG VS. SANI (supra), wherein Wali, JSC @ 709 paragraphs F – G authoritatively laid down the veritable principle thus: Furthermore, in showing cause why a Defendant should be allowed to defend the action, a complete defence need not (have) been shown. The defence set up need only show that there is a trial issue or question or that for some other reason there ought to be a trial. Leave to defend ought to be given unless there is clearly no defence in law and no possibility of a well defence on the question of fact.” Per SAULAWA, J.C.A.
PRACTICE AND PROCEDURE: SUMMARY JUDGMENT: THE ESSENCE OF PROCEEDINGS FOR SUMMARY JUDGMENT UNDER ORDER 11 OF THE HIGH COURT OF LAGOS STATE (CIVIL PROCEDURE) RULES, 2004
“I wish to add that the essence of proceedings for summary judgment under Order 11 (former Order 10) of the High Court of Lagos State (Civil Procedure) Rules, 2004, is to give judgment for admitted claims or claims that are not met with a viable or arguable defence. See Sanusi Brothers (Nigeria) Limited v. Cotia Commercio Exportacao E Importacao S. a. (2000) 6 S.C. (Pt.111) 43.” Per IKYEGH, J.C.A.
“Once a contentious issue such as an allegation of fraud is distinctly alleged by particularization of the incidents of the fraud by a defendant against the claim of a plaintiff or claimant, as happened in this case, the case must go on full blown trial. I think the court below should not have entered summary judgment for the 1st respondent in the circumstance. The case ought to have been heard on the merit as a contested action.” Per IKYEGH, J.C.A.
JUSTICES
IBRAHIM MOHAMMED MUSA SAULAWA Justice of The Court of Appeal of Nigeria
JOSEPH SHAGBAOR IKYEGH Justice of The Court of Appeal of Nigeria
RITA NOSAKHARE PEMU Justice of The Court of Appeal of Nigeria
Between
MR. LARRY UMECHE – Appellant(s)
AND
1. CITIBANK NIGERIA LIMITED
2. MR. LAWRENCE MADUNEME – Respondent(s)
IBRAHIM MOHAMMED MUSA SAULAWA, J.C.A. (Delivering the Leading Judgment): The present appeal is against the judgment of the High Court of Lagos State, Lagos Judicial Division, which was delivered on June 8, 2005, in Suit No. LD/875/2003. By the said decision, the lower court, coram the Hon. Justice O. A. Ipaye granted a summary judgment in favour of the 1st & 2nd Respondents, respectively. Dissatisfied with the decision in question, the Appellant filed the notice of appeal thereof in the lower court on June 13, 2005.
BACKGROUND FACTS:
The 1st Respondent is an incorporated and duly licensed banking company, having the registered place of business thereof situate at 1, Idowu Taylor Street, Victoria Island, Lagos. It equally has some branches in other states of the Federation. On the other hand, the Appellant and the 2nd Respondent were the directors of Elfa Limited (the original 1st Defendant in the suit and Appellant in the sister appeal No. CA/L/97/06).
The case of 1st Respondent (Plaintiff) was that the said Elfa Limited applied for a sum of N98,750,000.00 (US$1,000,000) by way of Discounting Banker Acceptance Import Credit Facilities for a maximum of 120 days. The import finance facility was guaranteed by the Appellant and 2nd Respondent. The loan was to enable the said Elfa Ltd to open a letter of credit (L/C) for the importation of some non-perishable merchandise.
However, dispite repeated demands, Elfa Limited failed to liquidate the outstanding finance facility granted thereto by the 1st Respondent. Consequent whereupon, the 1st Respondent instituted the suit in question at the lower court against Elfa Ltd, the Appellant and 2nd Respondent, jointly and severally. By paragraph 22 of the Statement of Claim thereof (pages 1 – 4 of the Record), the 1st Respondent sought against Elfa Ltd, the Appellant and 2nd Respondent, the following reliefs:
22. WHEREOF the Claimant claim against the Defendants jointly and severally or in the alternative the sum of N49,050,163.67 being the over draft and import finance facilities granted by the Claimant to the Defendants and which repayment the Defendants have failed neglected and omitted to make despite repeated demand.
The Claimant also claim interest on the said N49,050,163.37 at the rate of 22.6% from 1st day of February, 2003 until judgment and thereafter until the judgment debt is fully and finally liquidated.
The Plaintiff also claim the cost of the suit from the Defendants.
Not unexpectedly, the Appellant filed a defence to the claim against him to the effect, inter alia, thus:
20. In the foregoing circumstances, the 2nd Defendant contends that without prejudice and in addition to his other defences, the Plaintiff is estopped from bringing and prosecuting the suit against him.
WHEREFORE the suit is deserving of dismissal with substantial costs being speculative, baseless and an abuse of process.
He equally incorporated a counter claim in the statement of defence thereof, thereby seeking the following reliefs:
8. WHEREOF the 2nd Defendant counter claims against the 3rd Defendant as follows-
(a) The said sum of N4,000,000.00 (Four Million Naira) which sum the 3rd Defendant has failed refused and / or neglected to pay to 2nd Defendant/Counter-Claimant despite repeated demands.
(b) Cost of this action as may be assessed.
On 02/12/04, the 1st Respondent filed an application for a summary (final) judgment regarding the claim in question on his part, the Appellant filed a preliminary objection to the application in summary judgment. Both the application for summary judgment and the preliminary objection thereto were heard together by the lower court, and reserved for delivery of ruling thereon.
The ruling was indeed delivered by the lower court on June 8, 2005. And by the ruling in question, the lower court came to the following conclusion –
I find and I hold that on the totality of the material placed before the court by each Defendant, no material issue of fact has arisen to justify further investigation at, a plenary trial. I am satisfied that the Claimant bank has established its claims by its affidavit statement of oath of its witness and same has been substantiated by over-whelming documentary evidence placed before the court.
In the final analysis therefore leave to defend the claims is hereby refused to each Defendant and final judgment is hereby entered for the Claimant against the three Defendants jointly and severally in the sum of N49,050,163.67 being balance due on the overdraft and import finance facilities granted by the bank to the Defendant Company and guaranteed by the 2nd and 3rd Defendant which the Defendants have neglected and failed to repay in spite of repeated demands. Interest on the said sum shall be at the contractually agreed rate of 22.6% per annum from 1/02/03 until final liquidation of same.
This is the judgment of the court.
On June 13, 2005 the Appellant filed the notice of appeal thereof, which is predicated upon four grounds. The record of appeal was transmitted to this court on 08/09/05, but deemed properly compiled and transmitted on 21/9/05.
The Appellant filed two separate notices of appeal on 10/10/06 and 13/3/08, respectively. The brief earlier filed on 10/10/06 was indicated to have been struck out. The second brief filed on 13/3/08 was evidently filed within the statutory time limit, provided under the Old Court of Appeal Rules, 2007.
At pages 3 – 4 of the brief thereof the following issues have been formulated for determination, viz:
(ii) was it not wrong of the Lower Court to refuse striking out the application for summary judgment for absence of the necessary supportive affidavit when the 1st Respondent’s affidavit failed to express a positive belief that the Appellant had no defence to the suit as required by O.11 R.1 of High Court of Lagos State Civil Procedure Rules 2004 and at any rate the deponent who could not have been directly privy to the facts of the case failed to disclose the sources of his information and other particulars which are mandatory requirements of the Evidence Act?
(iii) can it be properly said that the Appellant does not deserve to be head on his defence on a plenary trial considering his weighty contentions that:
(a) the renewal of his guarantee was procured through misrepresentations of a named officer of the 1st Respondent who was later discovered to be amongst others who were in league with the 2nd Respondent to perpetrate fraud on the loan account to the Appellant’s detriment and that of the said Elfa Ltd;
(b) not only were terms of the loan transaction changed without his knowledge in fraudulent circumstances including diversion of funds for repayment of the loan, the sabotage by 1st Respondent’s agent of his efforts at making the 2nd Respondent to repay had created an estoppels in his favour?
On the part thereof, the 1st Respondent has raised two issues for determination at pages 1 & 2 the brief thereof, to wit –
1. Whether from the fact placed before the trial court the 1st Respondent has not made sufficient disclosure to entitle trial court to procede to judgment in absence of facts to the contrary?
2. Whether the court is enjoined to pursue technical justice instead of conforming to doing substantial justice between the parties?
The 2nd Respondent, however deemed it expedient to formulate only one issue at page 1 of the brief thereof, viz:
(1) Whether the lower court was not wrong to have given summary judgment in this suit against the contradicting facts and allegations of fraudulent connivance made out by the parties in their pleadings before the court?
The Appellant’s argument on issue No. 1 is contained at pages 4 – 10 of the said brief thereof. The issue is distilled from Ground one of the notice of appeal. As submitted by the Appellant, the first issue falls within the narrow compass of the sufficiency or otherwise of the affidavit in support of the 1st Respondent’s motion for summary judgment.
It was contended, in the main, that it’s self evident from the provisions of order 11 Rule 1 of the Lagos State High Court (Civil Procedure) Rules, 2004 that the requirement for a belief that there is no defence to the claim, and the grounds for so believing, are mandatory for the affidavit in support of the application for summary judgment, such as in the present case. Paragraphs 9 & 12 of the 1st Respondent’s affidavit in support of the motion for summary judgment in question are offensive to the provisions of sections 87 & 88 of the Evidence Act.
Allegedly, the whole affidavit is embarrassingly bereft of factual statements explaining how the deponent arrived at the conclusion that the Appellant has no defence to the claim.
Further submitted, that once paragraphs 9 & 12 of the 1st Respondents’ affidavit are struck out, the motion for summary judgment would be left without any supporting affidavit, therefore fatally defective. See FMG VS. SANI (1990) 4 NWLR (Pt. 147) 688 @ 713 para. E; BENDEL FEED & FLOUR MILL LTD VS. NIMB LTD (2005) 5 NWLR (Pt. 655) 29.
The argument on issue No. 2 is contained at pages 10 – 14 of the Appellant’s brief. It’s distilled from grounds 2 & 4 of the notice of appeal.
In a nutshell, it was submitted, inter alia, that the Appellant has disclosed ample materials in his statement of defence and counter claim to entitle him to defend the suit on the merits in a plenary trial. That, the purpose of summary judgment procedure is not to shut out a defendant, who probably has a defence to the action. See FMG VS. SANI (supra) @ 713 paragraph C.
Reference was made to the Appellant’s statement of defence, most especially paragraphs 3, 4, 5, 6, 7, 8, 9, 10, 11, regarding the allegation of procurement of the guarantee (for the loan) from the Appellant by trickery and fraudulent circumstances; fundamentally altering transaction without the Appellant’s consent; breaching binding trade customs; fraudulent and negligent practices perpetrated by the 1st Respondent against the Appellant; providing names and particulars of 1st Respondent’s officers involved, the circumstances and roles played by each of those officers.
It was further submitted by the Appellant that –
The ‘new’ facts upon which the 1st Respondent woefully failed to join issue include very serious charges of fraud and gross negligence on its part and that of its identified several senior officers. See FMG VS. SANI (supra) @ 722 per Wali, JSC.
Conclusively, the court is urged to allow the appeal, set aside the order entering summary judgment, allow the Appellant to defend the suit on the merits.
On the other hand, the argument of the 1st Respondent on issue No. 1 is contained at pages 2 – of the brief thereof. Reference was made to the various processes frontloaded by the 1st Respondent at the lower court, pursuant to order 3 Rule 2 (1) of the Lagos State High Court (Civil Procedure) Rules, 2004 (supra). Order 11 Rules 1, 5 & (2) of the said Rules were equally alluded to regarding the procedure for summary judgment.
It was submitted, that the 1st Respondent has complied with the requirement of order 11 Rule 1 (supra) to entitle the lower court to proceed to judgment in the absence of evidence to the contrary. See OWUNARI LONG JOHN VS. BLACK (1998) 5 SC 103; et al.
Further submitted, that upon uncontroverted evidence before it, the lower court was right to proceed to judgment in favour of the 1st Respondent against the present Appellant Elfa Ltd (the Appellant in the sister appeal No. CA/L/97/06) and the 2nd Respondent, respectively. See PLANWELL WATER SHED LTD VS. OGALA (2003) 12 SC (Pt. 17) 41; A.A. MACAULAY VS. NAL MERCHANT BANK LTD (1990) 6 SCNJ 117; THOR LTD VS. FCMB (2000) 2 NWLR (Pt. 652) 274; VASWANI VS. JOHNSON (2001) 11 NWLR (Pt. 679) 582.
The court is urged to dismiss the appeal for lacking in merits, with costs.
The issue No. 2 has been argued at pages 6 – 8 of the 1st Respondent’s brief. In a nutshell, it was submitted that the Appellant’s argument regarding the affidavit (of Dele Babalola) is a gross misconception of legal requirement and its interpretation, thus should be discountenanced.
Further submitted, that the Appellants’ argument on this issue is found on form and not substance of affidavit in question. Nothing was said to be offensive of sections 84 & 86 of the Evidence Act. Thus, contended that the wheel of justice could no longer be allowed to be clogged with technicalities. See JOSEPH AFOLABI VS. JOHN ADEKUNLE (1993) 2 SCNLR 141; SHUAIBU VS. NACB LTD (1998) 4 SC 170 @ 181, et al.
That, the deponent, Dele Babalola, gave his name and source of information, and that he has the consent and authority of his employer and 1st Respondent to make the statement on oath / affidavit. See BARKLEY’S BANK OF NIG. LTD VS. CBN (1976) 6 SC 175.
The court has been urged to dismiss the appeal with substantial cost for its lacking in merits, academic in nature, exercise to deprive the 1st Respondent the fruit of its judgment.
On the part thereof, the 2nd Respondent formulated a sole issue at contained at pages 1 – 3 of the brief thereof. In a nutshell, it was submitted, inter alia, that the issues of connivance between the 2nd Respondent and the officers of the 1st Respondent was a common decimal. That, this allegation on it’s own, against the background that we operate an inquisitional legal system, is enough reason for the lower court to have ordered for a plenary trial to enable the allegations of fraudulent connivance to be proved beyond reasonable (doubt), as same is a crime under the law. See NSIRIM VS. OMUWA CONSTRUCTION COMPANY LTD (1994) 1 NWLR (Pt. 318) 1 @ 23.
Equally submitted, that the lower court ignored the particularized allegations of collusion/ connivance to perpetrate fraud, professed by the Appellant, and in its stead hurriedly gave judgment to the 1st Respondent vide the application in summary judgment. That, this offends the positive decision of Supreme Court in FMG VS. SANI (1990) 4 NWLR (Pt. 147) 688 @ 722.
Conclusively, the 2nd Respondent urged upon this court to –
“Reverse the decision of the lower court dated 8/6/2005 and remit the suit to the lower court for a full trial before another judge of that court for a just determination of the suit in the interest of justice, equity and fairness in this matter.”
In response to the 1st Respondents brief, the Appellant has filed a reply brief spanning three pages, thereby reiterating that the 1st Respondent has abysmally failed to show why the vexed judgment should not be sustained.
I have accorded an ample consideration upon the nature and circumstances surrounding the instant appeal, the submissions of the learned counsel, contained in their respective briefs of argument vis – a – vis the record of appeal, as a whole.
At this crucial point in time, I have deemed it expedient to allude to the fact that the instant appeal is a sister to appeal NO. CA/L/97/06: ELFA LIMITED VS. CITIBANK NIGERIA & MR. LAWRENCE MADUNEME, in which judgment has just been delivered, resulting in allowing the appeal, setting aside the judgment of the lower court, and remitting the suit (No. LD/875/2003) to the High court Lagos State for reassignment by the Chief Judge to another Judge for trial on the merits.
Undoubtedly, both the instant appeal and the sister appeal (No. CA/L/97/06) were a fall-out of the same judgment (decision) of the lower court in the same suit (No. LD/875/2003), pertaining to the same parties. Thus, having due regard to the fact that the two issues raised in the said sister appeal (No. CA/L/97/06) have been extensively determined in the said judgment just delivered by me, it would amount to a sheer wasteful academic exercise for me to proceed to accord an extensive determination of the two issues raised in the instant appeal.
In the circumstances of this appeal, I think there is every justification for me to adopt the far-reaching reasoning and conclusion reached regarding both issues in the said sister appeal (NO. CA/L/97/06) anon.
ISSUE NO. 1:
Having amply considered the submissions of the learned counsel contained in their respective briefs vis – a – vis the record of appeal, I am of the paramount view that, it’s rather obvious that some officers of the 1st Respondent were alleged (paragraphs 9, 10 & of the Appellants affidavit) to have connived with the 2nd Respondent to defraud Elfa Limited of which he’s a director. Therefore, such weighty and incriminating allegations leveled by the Appellant against the 1st Respondent were so crucial to the determination of the case. There is no doubt, that the allegations of fraudulent connivance levied by the Appellant against the 1st Respondent’s officers have constituted special circumstances that ought to have been investigated at a full plenary trial. Thus, necessitating the lower court to allow the Appellant leave to defend the action. As aptly, and rather authoritatively, held by the Supreme Court.
Even where the Defendants cannot point to a specific issue which ought to be tried but nevertheless satisfy the court that there are circumstances that ought to be investigated, the court should allow the Defendants leave to defend the action. Both issues of fraud and forgery pleaded by the Defendants are difficult points of law. See FMG VS. SANI (1990) 4 NWLR (Pt. 147) 688 @ 722 per Wali, JSc,
In the circumstance, issue No. 1 is answered in the negative, and same is accordingly resolved in favour of the Appellant.
ISSUE NO. 2:
Regarding this second issue, I have the liberty to equally adopt the far-reaching reasoning and conclusion reached in the said sister appeal (No. CA/L/97/06) just delivered.
In the said sister appeal, I deemed it most appropriate to once again refer to the case of FMG VS. SANI (supra), wherein Wali, JSC @ 709 paragraphs F – G authoritatively laid down the veritable principle thus:
Furthermore, in showing cause why a Defendant should be allowed to defend the action, a complete defence need not (have) been shown.
The defence set up need only show that there is a trial issue or question or that for some other reason there ought to be a trial. Leave to defend ought to be given unless there is clearly no defence in law and no possibility of a well defence on the question of fact.
Thus, in the light of the foregoing postulations, there is every cogent reason for me to answer issue No. 2 in the negative, and accordingly resolve same in favour of the Appellant. And I so hold.
Hence, in the circumstances of the instant appeal, just as was aptly determined in the said sister appeal (No. CA/L/97/06) a moment ago, there is no gainsaying the fact, that the appeal is meritorious. The appeal is accordingly hereby allowed by me. The judgment delivered by the lower court, coram O. A. Ipaye, J; in suit No. LD/875/05 is hereby set aside.
Consequently, I hereby abide by the earlier consequential order made in the sister appeal (NO. CA/L/97/06) in question remitting the suit NO. LD/ 875/03 to the High Court of Lagos State for reassignment by the Chief Judge to another for trial on the merits.
The present Appellant shall equally be entitled to costs of N50,000.00 against the 1st Respondent.
JOSEPH SHAGBAOR IKYEGH, J.C.A.: I had the advantage of reading in advance the judgment pronounced by my learned brother, Saulawa, J.C.A., in which I concur. I wish to add that the essence of proceedings for summary judgment under Order 11 (former Order 10) of the High Court of Lagos State (Civil Procedure) Rules, 2004, is to give judgment for admitted claims or claims that are not met with a viable or arguable defence. See Sanusi Brothers (Nigeria) Limited v. Cotia Commercio Exportacao E Importacao S. a. (2000) 6 S.C. (Pt.111) 43.
Once a contentious issue such as an allegation of fraud is distinctly alleged by particularization of the incidents of the fraud by a defendant against the claim of a plaintiff or claimant, as happened in this case, the case must go on full blown trial. I think the court below should not have entered summary judgment for the 1st respondent in the circumstance. The case ought to have been heard on the merit as a contested action.
There is merit in the appeal. I would allow it and abide by the consequential orders contained in the lucid judgment of my learned brother, Saulawa, JCA.
RITA NOSAKHARE PEMU, J.C.A.: I had the advantage of reading draft, the judgment just delivered by my brother IBRAHIM MOHAMMED MUSA SAULAWA, J.C.A.
I agree with his opinion and conclusion in its entirety. I also abide by the consequential order made that the matter be reassigned by the Chief Judge to another judge for trial, as well as the consequential order as to costs.
Appearances
FCA Okoli with Ayodeji FaleyeFor Appellant
AND
O. O. Irankoye – for the 1st Respondent
A. Nwachukwu with S. Eze – For the 2nd RespondentsFor Respondent
