NOSPECTO OIL & GAS LIMITED v. MARCAULEY OLAYIWOLA KENNEY & ORS (2014)

NOSPECTO OIL & GAS LIMITED v. MARCAULEY OLAYIWOLA KENNEY & ORS

(2014)LCN/7420(CA)

In The Court of Appeal of Nigeria

On Wednesday, the 16th day of July, 2014

CA/K/229/2010

RATIO

APPEAL: ISSUES FOR DETERMINATION; WHETHER ISSUES FOR DETERMINATION MUST ARISE FROM THE GROUNDS OF THE APPEAL

It is the law that an issue distilled for determination must arise from, or be tied, or relate to the grounds of the appeal to make same competent. Where the issue has no nexus with the grounds of appeal, the issue would be incompetent and liable to be struck out for the court has no business to entertain any issue not connected to or arising from the grounds of appeal. Ejiogu vs. Hon. Irom & Ors. (supra), Akpata vs. Ugo (2007) All FWLR (Pt. 349) 1203, 1209 C – D.

To resolve this preliminary objection, it is apt to reproduce the grounds of appeal with their particulars and compare same with the sole issue raised in order to determine whether the issue relate to, emanates or is derived from the grounds. per. AMINA AUDI WAMBAI, J.C.A.

PRACTICE AND PROCEDURE: SUMMARY JUDGMENT; THE PROCEDURE FOR SUMMARY JUDGMENT
It is trite that the procedure for summary judgment which may be likened to that of the undefended list procedure is aimed at disposing with dispatch cases, which are virtually uncontested or where there can be no doubt that the plaintiff is entitled to judgment and it would therefore be inexpedient to allow the defendant to defend for the mere purpose of delaying the suit. Where the claim of the plaintiff is clear, certain and is one that is uncontested by the defendant or which the defendant does not have any good defence to, the defendant would not be allowed to apply delaying tactics to deny the plaintiff his claim. This special and peculiar procedure is designed as a vehicle for quick delivery of justice where the defendant does not have a defence or cannot meaningfully defend the claim. UBA vs. Alh. Babangida (2007). See also S.P.D.C. Ltd vs. Artho Joe Nig Ltd (2006) All FWLR (Pt.331) 1330 at 1345 C – E, Auberguine Collections Ltd vs. Habib Bank Ltd (2002) FWLR (Pt. 128) 1276 at 186 B – D.
However, there is an inbuilt mechanism in the procedure as provided by order 11 Rule 5(i) as already reproduced, to ensure that defendants who have real defence to the plaintiffs’ claim are allowed to defend the suit, since the procedure is not meant to shut out a defendant who shows the he has a defence to the claim. See EGBE VS. ADEFARASIN (1985) 1 NWLR (PT 3) 549, JIPRESE VS. OKONKWO (1987) 3 NWLR (Pt 62) 732, Hon. Justice S. Denton West vs. Chief Chuks Muoma, SAN (2009) LPELR-837 (CA).
However, the defendant must disclose by the processes placed before the court that he really has a defence and not mere sham or an attempt to delay the case. See Sanusi Brothers (Nig) Ltd vs. Cotia Commercial Exportacao Importacao S.A. (2000) 11 NWLR (Pt.679) 566, Per Uwaifo JSC.
As in the undefended list procedure, it would suffice as a good defence where the defendant discloses triable issues or raises a genuine issue even if by creating a doubt as to the facts which would require an explanation by evidence and sufficient to prelude the trial Judge from entering a summary judgment. See Victor Amede vs. UBA (2008) 8 NWLR (Pt. 1090) 623 at 666. per. AMINA AUDI WAMBAI, J.C.A.

PRACTICE AND PROCEDURE: PLEADINGS; WHETHER A FACT WHICH IS ADMITTED AT PLEADINGS REQUIRES NO FURTHER EVIDENCE

However, where such a fact is admitted, no further proof of it will be necessary. This is because the law is trite that a fact which is admitted at pleadings requires no further evidence. See Muhammed Sani Abacha vs. The State (2002) 9 MJSC 1(2) A.G. Fed. Vs. A.G. Abia State (2002) NSCQR 163. per. AMINA AUDI WAMBAI, J.C.A.

CONTRACT: FRUSTRATION OF CONTRACT; WHEN DOES FRUSTRATION IN CONTRACT OCCURS AND THE DEFINITION OF FRUSTRATION

Frustration in contract comes about when an event occurs without the fault of any of the parties and which hinders or prevents the performance of the duty under the contract and which fundamentally changes the circumstance and striking at the root of the agreement. UBA Plc vs. Omniproducts (Nig) Ltd (2006) 15 NWLR (Pt. 1003) 660.
While referring to Mazin vs. Tower Aluminium, frustration was defined as the premature determination of an agreement between parties, lawfully entered into and in the course of operation, at the time of its premature determination, owing to the occurrence of an intervening event or change of circumstance, so fundamental as to be regarded by law both as striking at the root of the agreement, and as entirely beyond what was contemplated by the parties when they entered into the agreement. See also Araka vs. Monier Const Co. Nig.(1978) 6 – 7 SC 7. per. AMINA AUDI WAMBAI, J.C.A.

JUSTICES

ISAIAH OLUFEMI AKEJU Justice of The Court of Appeal of Nigeria

OLUDOTUN ADEBOLA ADEFOPE-OKOJIE Justice of The Court of Appeal of Nigeria

AMINA AUDI WAMBAI Justice of The Court of Appeal of Nigeria

Between

NOSPECTO OIL & GAS LIMITED Appellant(s)

AND

1. MARCAULEY OLAYIWOLA KENNEY
2. ILORI AKINYELE
3. AKAMO AJIBIKE
4. ABIODUN OLUSOLA
5. MAKU JAMES OLUTOYIN
6. ODUWAIYE OLABISI
7. AYODEJI OLAFEMI HANNAH
8. ADEBUSI OWOLABI SAMUEL
9. SALAMI OLUWAYOYINSOLA
10. FAGBULU OLUSOLA OMOYENI Respondent(s)

AMINA AUDI WAMBAI, J.C.A. (Delivering the Leading Judgment): The appeal herein emanated from the decision of the Kaduna State High Court in suit No. KDH/KAD/88/2009 delivered on the 7th April, 2009 by Hon. Justice H.A.L. Balogun wherein summary judgment was entered in favour of the plaintiffs against the defendants therein.

The plaintiffs at the lower court (now the respondents) by a writ of summons dated 9/2/09 commenced civil proceedings against the appellant (as defendant) and by a motion on notice, applied for summary judgment claiming against the appellant as follows:

“Whereof the plaintiffs jointly claim the total sum of N14,400,000,00 (N4.4M) only made up of diverse sums of money had and received by the defendant from the plaintiffs which the defendant had failed and refused to refund till date.”

The appellant, a limited liability company licensed to carry on business as an independent marketer of petroleum products and engaged in such commercial transaction, approached the 1st, 3rd, 4th and 8th – 10th respondents through its agents and requested them to take up investment slots with the appellant which upon maturity, a period ranging from 4 to 7 week, would be returned to the respondents with the accrued profits. The appellant undertook to refund the money and the accrued profits not later than 7 weeks whether demanded or not.

The respondents subsequently paid and the appellant received the said sums of money for which the appellant issued its official receipts to the respondents.

“i. 1st plaintiff paid to and defendant received the sum of N450,000.00 (Four Hundred and Fifty Thousand Naira) only.
ii. 2nd plaintiff paid to and the defendant received the sum of N6,300,000 (Six Million, Three Hundred Thousand Naha) only
iii. 3rd plaintiff paid to and the defendant received the sum of N900,000.00 (Nine Hundred Thousand Naira) only.
iv. 4th plaintiff paid to and the defendant received the sum of N1,350,000.00 (One Million, Three Hundred and Fifty Thousand Naira) only.
v. 5th plaintiff paid to and the defendant received the sum of N1,800,000.00 (One Million, Eight Hundred Thousand Naira) only.
vi. 6th plaintiff paid to and the defendant received the sum of N450,000.00 (Four Hundred and Fifty Thousand Naira) only.
vii. 7th plaintiff paid to and defendant received the sum of N675,000.00 (Six Hundred and Seventy Thousand Naira) only.
viii. 8th plaintiff paid to and the defendant received the sum of N900,000.00 (Nine Hundred Thousand Naira) only.
ix. 9th plaintiff paid to and the defendant received the sum of N900,000.00 (Nine Hundred Thousand Naira) only.
x. 10th plaintiff paid to and the defendant received the sum of N675,000.00 (Six Hundred and Seventy Five Thousand Naira) only.”

The appellant refused, failed or ignored to pay back the principal money received as well as the accrued profits despite repeated demand long after the 5 – 7 weeks had elapsed. This led the respondents collectively to brief their counsel who wrote a demand letter to the appellant. The failure of appellant to pay to the respondents their money paid and received by the appellant led to the institution of the suit.

The appellant upon being served with the respondents processes filed a 22 paragraphed counter-affidavit and a written address opposing the application for summary judgment and a 22 paragraphed statement of defence urging the court to dismiss the respondent’s claim. The appellant contended that the contract was frustrated by an uncontemplated intervening action by the investigation conducted by central Bank of Nigeria (CBN), Economic and Financial Crime Commission (EFCC) and Securities and Exchange Commission into the sources of funding of the appellant, which led to the freezing of the appellant’s account and the seizure of its licence which prevented it from transacting in its business.

Thus, appellant deposed that it did not fail, refuse or ignore to refund the respondents investment, but was only unable to do so because of the frustration.

The learned trial Judge considered the respondents’ claim including the affidavit, the exhibits in support of the motion for summary judgment as well as the appellant’s counter-affidavit and processes and also the addresses of both counsel and came to the conclusion that the appellant failed to show a bona fide defence on the merits. It accordingly entered judgment for the respondents as per the statement of claim.

Aggrieved by the said decision, the appellant through his counsel Mas’ud Mobolaji Alabelewe Esq., filed a notice of appeal on 14th April, 2009 challenging the decision on two grounds of appeal.

Briefs of argument were exchanged in compliance with the Rules of this Court.

The appellant’s brief of argument filed on the 4/4/13 and the reply brief filed on 20/5/2013 were settled by Mas’ud M. Alabelewe Esq. The respondents’ brief of argument filed on the 18/04/2013 was settled by Ikechukwu Anyalewechi Esq.

In his brief of argument, the appellant raised, a sole issue for determination. This issue is:

“Whether having regards to the facts and documentary evidence placed before the trial court, the appellant have not shown a sufficient and bonafide defence on the merits to entitle it to defend the suit”

The learned respondents counsel however, by a notice of preliminary objection filed on 06/06/2013 challenged the said issue on two grounds.
I shall therefore consider the preliminary objection first.

PRELIMINARY OBJECTION

At the hearing of the appeal on 4/6/14, learned counsel abandoned the first ground of his objection argued at paragraphs 3.02 – 3.08 of his brief of argument leaving only the 2nd ground. This fact is also deposed in the affidavit in support of the preliminary objection. The arguments in support of the 1st ground withdrawn and struck out, are hereby discountenanced. The 2nd ground is that the sole issue raised does not emanate from any of the grounds of appeal contained in the appellant’s notice and grounds of appeal.

In support of his preliminary objection learned respondents’ counsel submitted at paragraphs 3.09 -3.12 of his brief that the sole issue formulated by the appellant did not flow from the complaint or particulars of the complaints in the 3 (sic) grounds of appeal filed by the appellant. Citing Yusuf Ahmed Badau & 1 Or Vs. INEC & 2 Ors (2008) All FWLR (Pt 435) 1795 at 1815 para A and Ejiogu vs. Hon. Irom & Ors. (2008) All FWLR (Pt 442) 1066, 1085 – 1086 paras G – A, counsel contended that the said issue not shown to have been distilled from the grounds of appeal is incompetent and liable to be struck out and being the sole issue raised, the entire appeal is to be dismissed.

In reply, the learned appellant’s counsel in his brief reply submitted that while grounds 1 and 2 of their notice of appeal complain of the trial Judges lack of appreciation of the appellant’s defence of joint venture and the sharing of profits as well as the improper construction given to the documents exhibited before the court, ground 3 complains of the manner in which the trial Judge resolved the defence of frustration put forward by the appellant.

It was therefore contended for the appellant that the issue relates to the grounds of appeal in that they relate to the adequacy or otherwise of the facts placed before the court to amount to a defence on merit upon which the issue distilled was based.

GROUNDS OF APPEAL

1. The learned trial Judge erred in law when he held “The defendant however attempted to put up a defence that there was a joint venture agreement between the (sic)”.
2. The learned trial Judge erred in law when he held “Thus even if the defence were to be considered, it would not avail the defendants as the frustrating event(s) came well after the time parties agreed the monies would become due.”

PARTICULARS

1. “There is no evidence before the court showing that the parties agreed that the monies will be due at a specified period or date.
2. The learned trial Judge came to a wrong conclusion that the monies became due before the frustrating event hence the defence of frustration did not avail the appellant.”

It is clear that the Appellant in the first ground is challenging the holding by the learned trial Judge that the appellant attempted to put up the defence of joint venture agreement between the parties.

By the said holding, the learned trial Judge discountenanced that defence.

In the 2nd ground the appellant is challenging the finding of the lower court that even if the defence were considered it would not avail the Defendant/Appellant.

The issue raised in this appeal by the appellant is that having regards to the facts and the evidence placed before the trial court whether the appellant has not shown sufficient and bonafide defence on merits. This issue without an iota of doubt flows from the 2nd ground complaining that the trial Judge erred when he held that the defence even if considered, would not avail the appellant.

The said issue formulated by the appellant is asking this Court to consider whether considering the facts and the documents placed before the lower court, it (the appellant) did not show sufficient and bonafide defence as to entitle it to defend the suit contrary to the finding by the trial Judge that the defence put up by the appellant did not avail it, which is the complaint encapsulated in ground 2.

Surely, the appellant’s sole issue arises from and is related to the grounds of appeal. I therefore find no merit in the preliminary objection. Same is entitled to be and is hereby dismissed.

I now proceed to consider the sole issue raised in this appeal, which is:

ISSUE ONE

Whether having regards to the facts and documentary evidence placed before the trial court, the appellant has not shown a sufficient and bonafide defence on the merits to entitle it to defend the suit.

In support of this sole issue for determination it was canvassed for the appellant that in compliance with order 11 Rule 4, the appellant filed all the necessary processes, the statement of defence, witness deposition, written address of counsel, a counter-affidavit and several exhibits including the Order of the Investment and Security Tribunal, the Advertorial of the Inter-Agency Committee on illegal Managers/Wonder Banks, Newspaper Publication, the Comminique, Originating summons from Federal High Court Lagos, and the Notice of Appeal, Court of Appeal Abuja Division, among others.

It is also averred in the statement of defence and counter-affidavit that the appellant had been fulfilling its obligation to its investors since 1992 up till January, 2007 when its business became frustrated by the suspension of its business by the Central Bank of Nigeria, Investment and Security Commission, Corporate Affairs Commission, EFCC, who as an Inter Governmental Agency commenced an investigation into its business, which resulted in the seizure of the appellant’s licence to transact business, thus, rendering it incapable to fulfil its obligations to refund its investors including the respondents.

It was contended that although the respondents attached the receipts of payment made to the appellant, they did not attach any documentary evidence to show the modalities of payment or the due date of payment.

All these documents and materials it was contended if the learned trial Judge whose sacred duty is to evaluate the evidence on both sides and weigh the two had done so, he would have, upon proper evaluation arrived at a decision that the appellant had a good and bonafide defence on merits to the respondent’s claim, sufficient to have restrained him from entering summary judgment on the 7/4/2009 for the respondent. Mogaji & Ors vs. Madam Rabiatu Odofin & Ors (1978) 4 SC 65, Basil vs. Chief Lasisi FR Jebe (2001) (Pt 11) 119 at 125 among others were cited.

It was contended citing several authorities including Chandler vs. Webster (1904) 1 K.B. 493, U.B.A. Plc vs. BTL Indust. Ltd (2006) 19 NWLR (Pt 1013) 61 at 118 D – E that the uncontemplated intervening act of the Inter-Governmental Agency which suspended the appellant’s transaction as a result of which the appellant was unable to meet up with its obligation to the respondents constitutes frustration in contract for which the appellant would temporarily be excused from performing its obligation under the contract for any part of the contract that became due after the frustrating event.

Learned counsel contended that if the learned trial Judge had applied the age long cardinal principle of interpretation of clear and unambiguous provisions to Order 11 Rule 5(i) of the Rules of the lower court, he would have refrained from entering summary judgment for the respondents. Nwanezie vs. Idris (1993) NWLR (Pt. 279) 1 at 14, Ifezue vs. Madugha (1984) 5 SC 79 at 100 were referred to.

We were urged to allow the appeal, set aside the decision of the lower court and transfer the respondents’ claims to the general cause list for trial on merits.

For the respondents, it was contended that the opportunity given to a defendant to defend the suit under the summary judgment procedure Order 11 Rule 4 is not automatic but the trial Judge has the discretion by order 11 Rule 5(2) to proceed to enter summary judgment if it appears to him that the defendant has no good defence to the claim. University of Benin vs. Kraw Thompson Organization & 1 Or (2007) All FWLR (Pt 1910) 1927, S & D Const. Co. Ltd vs. Chief B. Ayoku (2011) All FWLR (Pt 604) 1 at 21 were referred to.

It was contended that the respondents having not in their statement of defence and the counter-affidavit denied paragraphs 5 and 6 of the statement of claim, it has essentially admitted that the respondents paid the various sums of money and the appellant received same.

Learned counsel also contended that the general traverse to paragraphs 3, 4, 8 of the statement of claim wherein it was pleaded that the respondents were entitled to a refund within 5 – 7 weeks without demand, which also were deposed to by the respondents’ witness at paragraphs 6, 10 and 11, also amounts to an admission, C.C./S.A. vs. Sanusi Bros (2000) FWLR (Pt. 12) 2046, 2061 was referred to.

Learned counsel further contended that the appellant did not deny that fact but only pleaded its inability to pay, which reason, by Order 19 Rule 4 (1) is not a defence to the respondents’ claim.

It was further contended that the appellant’s contention of frustration in the contract though not conceded, would also not avail it because same would only affect the profit on the money paid and received or the continuation of the contract during the period of frustration but does not affect money had and received which is their claim. Reliance was placed on UBA vs. BTL Indust. (2007) All FWLR (Pt. 352) 1615.

Learned counsel urged upon us to resolve the issue in their favour, hold that the trial Judge was right and not disturb the decision of the lower court.

The main issue in this appeal (as encapsulated in this sole issue for determination) as shown by the processes before the court and the argument of both counsel can be narrowed down as to what amounts to good and bonafide defence envisaged in order 11 Rule 5(i) and whether the learned trial Judge evaluated the evidence placed before him in exercising his discretion to enter summary judgment for the respondents.

For proper appreciation of argument, I shall reproduce the provisions of Order 11 of the Kaduna State High Court (Civil Procedure) Rules, 2007 under consideration. Order 11 Rule 1 provides:-
“Where a plaintiff believes that there is no defence to the claim, the plaintiff shall file with the originating process the statement of claim, the exhibits, the depositions of the plaintiff’s witnesses and an application for summary judgment which application shall be supported by an affidavit stating the grounds for the plaintiffs belief and a written address in respect thereof.”
Order 11 Rule 4 provides:
Where any defendant served with the processes and documents referred to in Rule 1 of this Order intends to defend the suit, such defendant shall, not later than the time prescribed by these Rules for filing a defence, file:
(a) A statement of defence;
(b) Deposition of witness;
(c) The exhibits to be used in the defence; and
(d) A written address in reply to the application for summary judgment
Order 11 Rule 5(2) provides:
“Where any defendant fails or neglects to comply with the provisions of Rule 4 or this rule or it appears to the Judge that the defendant has no good defence to the claim, the Judge may enter judgment for the plaintiff.”
The appellant pursuant to order 11 Rule 4 filed a 22 paragraphed statement of defence, deposition of a witness, exhibited documents and also a 21 paragraphed counter-affidavit deposing to the fact that it has a good and bonafide defence to the respondents’ claim.
It is trite that the procedure for summary judgment which may be likened to that of the undefended list procedure is aimed at disposing with dispatch cases, which are virtually uncontested or where there can be no doubt that the plaintiff is entitled to judgment and it would therefore be inexpedient to allow the defendant to defend for the mere purpose of delaying the suit. Where the claim of the plaintiff is clear, certain and is one that is uncontested by the defendant or which the defendant does not have any good defence to, the defendant would not be allowed to apply delaying tactics to deny the plaintiff his claim. This special and peculiar procedure is designed as a vehicle for quick delivery of justice where the defendant does not have a defence or cannot meaningfully defend the claim. UBA vs. Alh. Babangida (2007). See also S.P.D.C. Ltd vs. Artho Joe Nig Ltd (2006) All FWLR (Pt.331) 1330 at 1345 C – E, Auberguine Collections Ltd vs. Habib Bank Ltd (2002) FWLR (Pt. 128) 1276 at 186 B – D.
However, there is an inbuilt mechanism in the procedure as provided by order 11 Rule 5(i) as already reproduced, to ensure that defendants who have real defence to the plaintiffs’ claim are allowed to defend the suit, since the procedure is not meant to shut out a defendant who shows the he has a defence to the claim. See EGBE VS. ADEFARASIN (1985) 1 NWLR (PT 3) 549, JIPRESE VS. OKONKWO (1987) 3 NWLR (Pt 62) 732, Hon. Justice S. Denton West vs. Chief Chuks Muoma, SAN (2009) LPELR-837 (CA).
However, the defendant must disclose by the processes placed before the court that he really has a defence and not mere sham or an attempt to delay the case. See Sanusi Brothers (Nig) Ltd vs. Cotia Commercial Exportacao Importacao S.A. (2000) 11 NWLR (Pt.679) 566, Per Uwaifo JSC.
As in the undefended list procedure, it would suffice as a good defence where the defendant discloses triable issues or raises a genuine issue even if by creating a doubt as to the facts which would require an explanation by evidence and sufficient to prelude the trial Judge from entering a summary judgment. See Victor Amede vs. UBA (2008) 8 NWLR (Pt. 1090) 623 at 666.

The appellant in the instant appeal placed before the lower court a statement of defence a counter-affidavit and some documents as earlier stated, wherein he put up a defence that it was fulfilling its obligation of paying its investors up to January, 2007 before the frustrating event took place, and further contended that the respondents only attached the receipts of payment but not any documentary evidence to show the modalities of the refund of the money under the Joint Venture Agreement (JVA) or to show when the payments became due.

It is a fact as pleaded by the respondents that the various sums of money were paid by the respondents at different times and not at the same time. It thus means that their maturity period would not be the same. It is also to be borne in mind that the appellant pleaded that it started the Joint Venture Agreement since 1992 as a means of raising funds to inject into its business and had been paying its investors up to January 2007.

It is therefore important to determine when the various investments made by the respondents became due for refund. It is important to first determine this fact to be able to arrive at a conclusion whether the payments (refund) were due before the frustrating event took place or not.

Admittedly as canvassed by the appellant’s counsel, the respondent did not exhibit any document to evince the modalities for the refund of payment or when same became due. The absence of such evidence ordinarily, should suffice to transfer the case to general cause list for evidence to be adduced on same.

“The plaintiffs pleads that it was the undertaking of the defendant that once they receive money from the plaintiffs and not later than a maximum period of 7 weeks, whether demanded or not the plaintiffs would be refunded their money with the accrued profits.”

The appellant response to these averments are at paragraphs 4 and 20 as follows:

“Para 4. The defendants denies paragraphs 3, 4, 7,8, 9, 10 and 11 of the statement claim and puts the plaintiff to the strictest proof of the averments contained therein.
Para 20. Contrary to the averments in paragraphs 7, 8 and 9 of the statement of claims the defendant states that it did not fail, ignore or otherwise refuse to refund the plaintiff’s investments; rather it is willing but unable to do so due to the facts pleaded above.”

The appellant did not, apart from the general traverse in paragraph 4 of the statement of defence which does not constitute a proper denial (see Okoli vs. Duru & Ors (2000) LPELR 12601 (CA) deny the respondents averments in paragraphs 7 and 8 that the maximum period for refunds was 7 weeks which had elapsed.
By the elementary law of pleadings the appellant must be deemed to have admitted those facts thereby relieving the respondents of the duty of proving same. A.G. Fed. Vs. A.G. Abia (supra). The said facts pleaded in paragraphs 7 and 8 of the respondents statement of claim having been deemed admitted by the appellant, the appellant cannot be heard in argument that the respondents did not exhibit such proof of the modalities of payment or that same was due.

The appellant also averred at paragraph 13 of the statement of defence and paragraph 14 of the counter-affidavit that as its joint venture partners, the plaintiffs were entitled to a proportionate share of profit and liable to share in its looses in proportion to their investments arising or emanating from the business. Nothing however, was placed before the lower court in support of this averment that the appellant and respondents were to share in the profits and the loss. Had the appellant supported that averment and deposition with some documentary evidence, evidencing that agreement, it would have weighed in favour of the appellant to warrant transferring the suit to the general cause list. But none was offered.

The appellant leaned very heavily on the defence of frustration of contract by which he claimed that it was excused from performing its obligations towards the respondents, at least temporarily until the frustrating intervening event was sorted out and its (appellant) resumes transacting its business. He cited in support the case of Chandler vs. Webster (supra).

Appellant contends and rightly too, that the events that occurred by the action of Inter-Governmental Agency leading to the seizure of its licence, the freezing of its accounts etc, amounts to an intervening occurrence which was not within the contemplation of both parties at the time of the agreement and which made the appellant incapable of meeting its obligation to its investors, including the respondents.

The pertinent question is whether the frustration doctrine avails the appellant. It can only be of assistance to the appellant if the frustration occurred before its obligation under the contract became due.
In the instant appeal as borne out by the pleadings and depositions, the frustrating event occurred on 4/12/2007 when the appellant’s accounts were frozen by Investment and Securities Tribunal vide a motion ex parte.
By the appellant’s deemed admission, the respondents refunds became due before December 2007. In such a situation as decided in the case of Chandler vs. Webster (supra) relied upon by the appellant, in so far as the contract obligation has fallen due before the frustrating event, each party must fulfil its obligation under the contract. Thus, all legal rights already accrued or money already paid, which has become payable before the frustrating events occurred remains intact, while obligations falling due for performance after the event are discharged.
The defence of frustration as rightly found by the trial Judge in the circumstance, does not avail the appellant as the respondents money had become due long before the frustrating event took place.

It was further canvassed for the respondent that a mere denial of debt under the Rules does not amount to a defence. Order 19 Rule 4 of the Rules of the lower court was referred to.
The said Rule 4(1) provides:
“In an action for debt or liquidated demand in money, a mere demand of the debt shall not be sufficient defence.”
Rule 4(2) provides:
“In an action for money had and received, a defence in denial must deny the receipt of the money or the existence of those facts which are alleged to make such receipt by the defendant a receipt to that use of the plaintiff.”
In the instant appeal, the Appellant admitted that the Respondents paid and it (appellant) received the said sums of money but relies on the misfortune that befell it as the reason for not refunding the money. Unfortunately, that is not a recognized defence under the Rules of the Court to waive the payment. Unfortunately, also, is the non availability of the defence of frustration to the appellant in the circumstance.
The trial Judge considered the defence of frustration and found that:
“When the dates the amounts were paid to the defendant is compared with the date the amount of the defendant was frozen it December 2007, or even when the defendant was ordered to refund the period exceeds the 5-7 weeks refund period.”
The Court then concluded that:
“Even if the joint venture defence were to be considered, it would not avail the defendant as the frustrating event(s) came well after the time parties agreed the monies would become due.”
The trial Judge also held that by order 19 Rule 4 (2), the mere denial did not constitute a defence.
By order 11:5(2), where as in this case, it appears to the Judge that the defendant has no good defence to the claim, the Judge may enter Judgment for the plaintiff. This is of course notwithstanding that the defendant complied with O. 11.4 by filing a defence.
There is no doubt that the discretion donated to the Judge by O. 11.5(2) as a Judicial discretion must be exercised judiciously and judicially upon the facts at his disposal and guided by the applicable principles of Law. In the instant case, the trial Judge did demonstrate how the discretion was exercised by comparing the Respondent’s claim with the Appellant’s defence and made the finding that by pleadings, the Appellant admitted the respondent’s claim, that the defence of frustration did not avail the appellant because frustrating events accrued well after the refund of the respondents’ money became due, and that a mere traverse as done by the appellant does not constitute a denial of the type of claim against the respondents.
After evaluating the evidence and also considering the legal principles applicable, the lower court arrived at the said findings, the effect of which was that the defence filed and put up by the appellant did not amount to good or bonafide defence. The learned trial Judge then disregarded the defence and proceeded under Order 11 Rule 5(2).
I can neither fault the findings by the learned Judge trial upon what was before the court, nor can I in the face of all these agree with the appellant that the trial Judge did not properly evaluate the evidence or did not interpret Order 11 Rule 4 or Rule 5(1) and (2) correctly.
The trial Judge having exercised his discretion based upon the facts before the court, I have not been shown any reason to interfere with the due exercise of the discretion by the trial Judge.
The law is settled that an appeal court can only interfere with how a lower court has exercised a discretion if the Appeal Court is satisfied that the discretion was not exercised judicially or judiciously. In other words, if and only if it is satisfied that the discretion had been exercised in an arbitrary or illegal manner without due regard for all necessary considerations or with regard to unnecessary factors or mala fide then would this Court have a duty to intervene. See Ahwedo Efetiroroje & Ors. vs. His Highness Onome Olepalefe 11 (1991) 5 NWLR (Pt 193) 517.
In the instant case, the discretion exercised vide Order 11 Rule 5(2) by the learned trial Judge has not been shown to have been exercised arbitrarily or without regard to all the consideration or factors before him. Rather, the discretion was exercised judiciously and judicially. There is therefore no reason to intervene.

On the whole, this appeal is devoid of merit and is accordingly dismissed. The decision of the lower court is affirmed. There shall be no order to cost.

ISAIAH OLUFEMI AKEJU, J.C.A.: My learned brother, Amina Audi Wambai JCA, gave me the opportunity of reading in draft form, the judgment just delivered, I am one with my learned brother in the conclusion that the appeal is unmeritorious based on the meticulous consideration of the issue therein. I dismiss the appeal with no order as to costs.

OLUDOTUN ADEBOLA ADEFOPE-OKOJIE, J.C.A.: Having had the privilege of reading the judgment of my learned brother Amina Audi Wambai, JCA, I am in agreement that this appeal lacks merit and should be dismissed. I affirm the judgment of the lower Court.

Appearances

Mas’ud AlabeleweFor Appellant

AND

E.U. AmalarFor Respondent