DANSTARCHER TURNKEY CONTRACTORS LTD v. UNION BANK OF NIGERIA PLC
(2015)LCN/8072(CA)
In The Court of Appeal of Nigeria
On Monday, the 27th day of April, 2015
CA/L/88/12
RATIO
PRACTICE AND PROCEDURE: SUMMARY JUDGEMENT; THE PURPOSE OF THE PROCEDURE FOR SUMMARY JUDGEMENT
The Supreme Court had admonished that, the procedure for summary judgment which is to enable claimant obtain judgment without trial, must be the case which is perfectly clear and unassailable. See OKAMBA v. SULE (1990) 1 SCNJ 1. per. SIDI DAUDA BAGE, J.C.A.
PRACTICE AND PROCEDURE: COUNTER CLAIM; WHETHER A COUNTERCLAIM WILL HAVE TO BE PROVE SEPARATELY FROM THE MAIN CLAIM AND WHETHER A COUNTER CLAIM MUST EMANATE FROM THE MAIN CLAIM
The trial court stated the law correctly that, a counter claim, is a separate claim from the main claim, and will have to be proved separately.
Yes, this is the law. However, for summary judgment where the Defendant is not heard in defence, the counter claim which by law must emanate from the main claim will not have a leg to stand upon. By law, a counter claim is a weapon of offence which enables a Defendant to enforce a claim against the Plaintiff as effectually as in an independent action. The counter claim must be directly related to the principal claim but not outside of and independent of the subject matter of the claim. See BEPCO LTD v. NASCO MGT. SERVICE LTD (1993) 7 NWLR (Pt. 305) 369 at 381; ANDREW OKONKWO v. CO-OPERATIVE AND COMMERCE BANK (NIG) PLC & TWO ORS (1997) 6 NWLR (Pt. 507) 48; U.I.C. LTD v. T.A. HAMMOND (NIG.) LTD (1998) 9 NWLR (Pt. 565) 340 at 365; EMAPHIL LTD v. ODILI (1987) 4 NWLR (Pt. 67) 915 at 920; BALOGUN v. OLIGBEDE (1991) 8 NWLR (Pt. 208) 223 at 235; OGBONNA v. ATTORNEY-GENERAL OF IMO STATE (1992) 1 NWLR (Pt. 220) 647 at 692. That silent cord which binds the main claim and the counter claim, makes it imperative that the Appellant be heard in defence of the main claim. If there is no defence to the main claim, it will be a mirage to see what the court said in its judgment. per. SIDI DAUDA BAGE, J.C.A.
Before Their Lordships
SIDI DAUDA BAGEJustice of The Court of Appeal of Nigeria
CHINWE EUGENIA IYIZOBAJustice of The Court of Appeal of Nigeria
JAMILU YAMMAMA TUKURJustice of The Court of Appeal of Nigeria
Between
DANSTARCHER TURNKEY CONTRACTORS LTDAppellant(s)
AND
UNION BANK OF NIGERIA PLCRespondent(s)
SIDI DAUDA BAGE, J.C.A. (Delivering the Leading Judgment): This appeal is against the judgment of the High Court of Lagos State, sitting at Lagos delivered by Honourable Justice A. A. Philips on the 20th of May, 2011 wherein the lower court entered judgment in favour of the Claimant (now Respondent) for the sum of N117,101,122.11k (One Hundred and Seventeen Million, One Hundred and One Thousand, One Hundred and Twenty-Two Naira, Eleven Kobo) at the interest rate of 21% per annum against Defendant (now Appellant).
According to a writ of summons dated and filed on 21st December, 2009, the Respondent (Plaintiff) sought the following reliefs against the Appellant (then Defendant) as follows:
“a. A refund of the unutilized rent paid to the Defendant in the sum of N117,101,122.11k (One Hundred and Seventeen Million, One Hundred and One Thousand, One Hundred and Twenty-Two Naira, Eleven Kobo) for the sublease of their Falomo Branch.
b. Interest on the said sum of N117,101,122.11k (One Hundred and Seventeen Million, One Hundred and One Thousand, One Hundred and Twenty-Two Naira, Eleven Kobo) at the rate of 22% per annum until the judgment sum is finally liquidated.
c. Solicitors fees of N11,710,122.00 (Eleven Million, Seven Hundred and Ten Thousand, One Hundred and Twelve Naira) being 10% of the unutilized rent of N117,101,122,11k (One Hundred and Seventeen Million, One Hundred and One Thousand, One Hundred and Twenty-Two Naira, Eleven Kobo).”
The Respondent also filed alongside the writ of summons and all other originating processes, an application dated 21st December, 2009 brought pursuant Order 11 Rule 1, Order 35 Rule 4 and Order 49 Rule 1 of the High Court of Lagos State Civil Procedure Rules wherein it prayed the court for the following orders:
“a. An Order of this Honourable Court entering final judgment in this suit in favour of the Claimant/Applicant herein as per his statement of claim filed in this suit.
b. And for such further order as this Honourable Court may deem fit to make in the circumstances.”
The Respondent had on or about the 26th day of February, 2008 paid the Appellant the sum of N135,116,667.67k (One Hundred and Thirty Five Million, One Hundred and Sixteen Thousand, Six Hundred and Sixty-Seven Naira, Sixty-Seven Kobo) being rent for a (10) ten year period pursuant to a lease agreement that subsisted between both parties, only for the Respondent’s branch to be evicted from the property on the 21st day of March, 2009 by an arm of the Lagos State Government which caused the Respondent and its customers untold hardship.
By virtue of a development agreement dated the 1st day of September, 1987 and a sublease agreement dated the 9th day of November, 1988, the Lagos State Development and Property Corporation (LSDPC) created a sublease of a landed property situate between Awolowo Road, Ikoyi and Raymond Njoku Street, Ikoyi, Lagos in favour of the Appellant for a term of 40 years, which ought to have expired on 30th day of August, 2028. The said sublease agreement conferred on the Appellant a right to underlet, sublet or assign its interests under the sublease to any responsible, respectable person, firm or company on the condition and stipulated term within the stipulated period of the Appellant’s lease, which was exercised in favour of the Respondent.
Vide a sublease agreement which commenced on the 1st day of April, 1993, part of the premises was sublet to the Respondent for a period of 25 years with the Respondent paying the sum of N10,705,500.00 (Ten Million, Seven Hundred and Five Thousand, Five Hundred Naira only) representing the rent for an initial period of 15 years, with an agreement that the remaining 10th years would be subject to a rent review every five years. However upon negotiations, the Appellant requested that the full residue for ten (10) years be paid in full.
Sometime in 2007, the Appellant commenced moves towards the rent review and after a series of meetings, it was agreed that the rent be fixed at the sum of N13,511,666.67 (Thirteen Million, Five Hundred and Eleven Thousand, Six Hundred and Sixty-Six Naira, Sixty Seven Kobo) per annum gross and on or about the 26th day of February, 2008, the Respondent paid the sum of N135,116,667.67 (One Hundred and Thirty-Five Million, One Hundred and Sixteen Thousand, Six Hundred and Sixty-Seven Naira, Sixty-Seven Kobo) being rent for a ten year period.
Shortly after the payment was made by the Respondent, the Appellant executed an indemnity in favour of the Respondent. However, barely a year into the 10 (ten) year lease, the Respondent and its customers were denied entry into the premises which housed a branch of the Bank on 21st day of March, 2009 when agents of the Lagos State Government sealed the premises owing to some breaches committed by the Appellant in respect of the premises.
Consequently, the Respondent instituted an action for the refund of the unutilized rent against the Appellant at the High Court of Lagos State and judgment was delivered in favour of the Respondent. The Respondents case as contained in the statement of claim, witness depositions and affidavit in support of the motion for summary judgment was that the Appellant was indebted to the Respondent in the sum of N117,101,122.11k (One Hundred and Seventeen Million, One Hundred and One Thousand, One Hundred and Twenty-Two Naira, Eleven Kobo) and other claims contained in the statement of claim, being unutilized rent paid in respect of a net floor area of approximately 7930 square feet located within Falomo Shopping Centre, Ikoyi Lagos.
In response to the Respondent’s application before the lower court, the Appellant filed a statement of defence, counter claim and also filed a counter affidavit in opposition to the Respondent’s application for summary judgment. Subsequently, the Appellant also got compensation with respect to the unutilized portion of its lease vide a consent judgment that was entered in favour of the Appellant in an action it had instituted against the Lagos State Development and Property Corporation in the High Court with suit No. LD/1915/04 on 3rd December, 2012.
Unfortunately, till date, the Appellant has fail to indemnity the Respondent with respect to its unutilized rent.
After considering the facts contained in the pleadings of both parties, the depositions in the affidavit in support of the application for summary judgment, the count affidavit filed in response by the Appellant and the written address of both parties, the lower court found in favour of the Respondent in respect of the first two claims being claim (A) and (B) in the writ of summons and entered judgment against the Appellant in the sum of N117,101,122.11k (One Hundred and Seventeen Million, One Hundred and One Thousand, One Hundred and Twenty Two Naira, Eleven Kobo) being a refund of unutilized rend paid by the Respondent to the Appellant for the sublease of the Falomo Shopping Complex, and fixed interest payable on the said sum at 21st per annum from 22nd March, 2009 until today and thereafter at 10% per annum until the judgment debt is full liquidated.
Being dissatisfied with the aforesaid judgment of the lower court, the Appellant appealed to this court by filing a notice of Appeal containing 4 (four) grounds at pages 302-303 of the record of appeal.
From the four (4) grounds of appeal contained in the notice of appeal, the Appellant formulated the following four (4) issues for determination viz:
i. Whether the learned trial judge should have summarily awarded special damages in the sum of N117,101,122.11 (One Hundred and Seventeen Million, One Hundred and One Thousand, One Hundred and Twenty-Two Naira, Eleven Kobo) when Respondent had not strictly proved such damages.
ii. Whether the learned trial judge was right to have entered summary judgment against the Appellant under Order 11 of the High Court of Lagos State Civil Procedure Rules in the face of conflicting affidavit evidence which necessitated calling oral evidence or a full trial to resolve.
iii. Whether the learned trial judge should have summarily awarded interest on the sum of N117,101,122.11 (One Hundred and Seventeen Million, One Hundred and One Thousand, One Hundred and Twenty-Two Naira, Eleven Kobo) at the rate of 21% per annum when there was no evidence led by the Respondent showing that the parties had agreed to such rate of interest or that charging such a rate of interest was a mercantile custom in the circumstances.
iv. Whether the learned trial judge was right to have entered summary judgment against the Appellant under Order 11 of the High Court of Lagos State Civil Procedure Rules in all the circumstances of the case.”
On the other hand, the Respondent formulated the following two (2) issues for the determination of the appeal viz:
1) Whether from the circumstances of the case, the learned trial judge was right to have entered summary judgment against the Appellant under Order 11 of the High Court of Lagos State Civil Procedure Rules 2004.
2) Whether from the circumstances of this case, the learned trial judge was right to have awarded interest in favour of the Respondent.
Having examined the two sets of issues, the Appellant’s issues 1, 2 and 3 are aptly captured in the Respondent’s issue 1. Also the Appellant’s issue 4 is the same with the Respondent s issue 2. That being the case, I adopt the two (2) issues propose by the Respondent in the determination of this appeal.
ISSUE ONE (1)
Whether from the circumstances of the present case, the learned trial judge was right to have entered summary judgment against the Appellant under Order 11 of the High Court of Lagos State Civil Procedure Rules 2004. (Appellant’s issues 1, 2 and 3)
In proffering its arguments, learned counsel to the Appellant submitted that, it is not the duty of the court to assist the Respondent to compute the special damages allegedly suffered but the Respondent to show by clear and credible evidence how damages were arrived at. It is also instructive that the Appellant expressly denied the quantum of loss allegedly suffered by the Respondent vide paragraph 24 of the Appellant’s counter-affidavit to the motion for summary judgment (appeared at page 162 of the record] and further stated that the computation did not take into account the 90 days during which the Respondent was let back into the premises in question. Further, the amount claimed contradicts the evidence given by the Respondent in paragraph 13 of its affidavit at page 50 of the Record. In that paragraph, the yearly rent was stated to be N13,511,666.67. The Respondent further stated that the premises in question were sealed within less than one year of occupation (in paragraph 27 of the affidavit in support of its motion for judgment. The amount claimed does not tally with the annual rental of the property as pleaded and alleged. In such circumstance, the Respondent should not have been granted summary judgment see ADIM v. NIGERIAN BOTTLING COMPANY LTD & ANOR (2010) 2 CLRN; SAINT MACHIAVELLI COLLEGE v. OGUNSANYA (2010) 2 CLRN.
Learned counsel submitted further that a close examination of the affidavits in support and in opposition to the Respondent’s motion for summary judgment on pages 48-50 and 159-198 of the record reveal several conflicts of facts. In such circumstance, the learned trial judge should have called for oral evidence and not proceed to render judgment summarily see FALOBI v. FALOBI (1976) 10 N.S.C.C. 576 at 581-582 (1976) 9-10 SC; PETERS v. JACKSON (2001) 49 WRN 118 at 155; MOMAH v. V. A.B. PETROLEUM INC. (2000) 2 S.C. 142 at 149; (2000) 12 NWLR (Pt. 680) 99 at 110; (2000) 4 NWLR (Pt. 654) 534 at 547.
Learned counsel further submitted that interest on an amount claimed can only be granted by agreement of the parties or pursuant to a merchantile custom or where the party at fault was in a fiduciary relationships. No evidence was put before the court that the rate of interest for lending commercial banks was 22% or any other sum to warrant the granting of 21% interest by the court. Also where a party claims interest as of right short of any agreement, he must claim entitlement in the statement of claim where it claimed that the Appellant signed an indemnity. It did not plead that the indemnity contained any provision for the application of a particular percentage of interest; neither did it plead facts disclosing or justifying the entitlement to percentage of interest claimed. See MONUMENT BANK PLC v. BARRISTER DOLLY AKANIMO (2007) 12 CLRN 29 AT 40; EKITI LOCAL GOVERNMENT AREA v. AJE PRINTING (NIG) LTD (2009) NCLR 171 AT 187; ALFOTRIN LTD v. ATTORNEY-GENERAL OF FEDERATION (1996) 9 NWLR (Pt. 475) 634 at 663.
In reply to the submissions above, learned counsels to the Respondent submitted that, after a due consideration of the provisions of Order 11 of the High Court of Lagos State Civil Procedure Rules 2004, vis-Ã -vis the processes and documents filed at the trial court by the Respondent, the learned trial judge was right to have entered summary judgment at pages 295-300 of the records against the Appellant. See THOR v. FCMB (2005) 14 NWLR (Pt. 946) 710 para H-A.
Learned counsel submitted further that, the parties complied with the provisions of Order 11 Rules 1, 5(1) of the High court of Lagos (Civil Procedure) Rules 2004. From the wordings of those provisions, it is clear that the grant of leave to defend the claim is not the exclusive preserve of the Defendant but subject to the discretion of the court. Such a discretion may be exercised only in the event that there is a good defence and not a sham defence. See MACAULAY v. NAL MERCHANT BANK (1990) 4 NWLR (Pt. 144) 283.
Learned counsel submitted further that the case of the Respondent at the lower court was based on the indemnity executed by the Appellant in the favour of the Respondent (see pages 26-27 of the records). This indemnity between the Appellant and the Respondent was in respect of the sum of N117,101,122.11k (One Hundred and Seventeen Million, One Hundred and One Thousand, One Hundred and Twenty-Two Naira, Eleven Kobo) being a refund of unutilized rent paid by the claimant and remains binding on the Respondent since the validity of same is not in question. The Appellant became liable to the Respondent in respect of the rent paid for the property the moment the Respondent was prematurely evicted from the property by the Lagos State Government. The learned trial judge was left with no option but to exercise his discretion in favour of the Respondent. The sum of N117,101,122.11k (One Hundred and Seventeen Million, One Hundred and One Thousand, One Hundred and Twenty-Two Naira, Eleven Kobo) represents damages awarded by the learned trial judge which is in strict compliance with decided cases. See NIGERIAN COMMUNICATIONS COMMISSION v. MOTOPHONE LTD & ANOR (2007) LPELR CA/A/189/05.
Learned counsel submitted further that the Appellant had erroneously calculated based on the annual rental value of the premises without taking into cognizance that fact that the Respondent was ejected from the premises 10 days to the end of the first year of the lease hence the total amount of the unutilized rent was supposed to be for the period of 9 years and 10 days which is assessed at N121,975,182,643 (One Hundred and Twenty-One Million, Nine Hundred and Seventy-Five Thousand, One Hundred and Eighty-Two Naira, Six Hundred and Forty-Three Kobo for above the amount claimed by the Respondent at the lower court.
Learned counsel submitted further that, the mere denial of the content of an affidavit is not enough to prevent the court from entering judgment in a summary judgment application. See U.B.A. PLC v. JARGABA (2007) 11 NWLR (Pt. 1045) 247. Also there was no irreconcilable conflict in the affidavit in support of the Respondent’s motion for summary judgment and the counter affidavit in opposition thereto as regards the validity or otherwise of the indemnity question to warrant calling oral evidence see Section 116 of the Evidence Act 2011. Also the issue of the extra 90 days which the Respondent occupied the premises in paragraph 24 of its counter affidavit was at the instance of the Lagos State Government and not the Appellant, so it did not emanate from the lease agreement, but granted by the Lagos State Government as grace period to enable the Respondent wind up its operations at that branch, the lease agreement had been frustrated.
Learned counsel submitted further that the conflict as alleged by the Appellant between paragraph 30 of the affidavit in support of the application for summary judgment and paragraph 27 of the counter affidavit is that while paragraph 30 of the affidavit states that the interest rate for commercial banks is 22% which should be applied to the transaction between the parties, paragraph 27 of the counter affidavit denies this and states that parties had not agreed that such 22% interest rate would apply to the unutilized portion of the rent. This argument of the Appellant did not in any way materially controvert the fact that the commercial lending rate interest rate at the time was 22%, the argument as to whether the interest is payable or not contained in paragraph 27 of the counter affidavit does not constitute any irreconcilable difference between the parties.
Learned counsel further submitted that, the Appellant’s issue No. 4 in its brief of argument did not emanate from any grounds of the appeal contained in the notice of the appeal filed by Appellant, and thus it should be dismissed see OGUNYADE v. OSHUNKEYE (2007) 15 NWLR (Pt. 1057) 240 para. D-E; MOMODU v. MOMOH (1991) 1 NWLR (Pt. 169) 608.
Learned counsel to the Respondent submitted further that, the deposition contained in the counter affidavit are not in opposition to the contract of indemnity but in support of the counter claim which is a completely different process from that upon which the learned trial judge delivered summary judgment.
Learned counsel submitted further that, the provision of Order 11 Rule 5 (2) High court of Lagos State Civil Procedure Rules 2004 provides where it appears to the judge that the Defendant has no good defence, he may there upon enter judgment for a claimant. This is based on exercise of discretion by the judge see HON. JUSTICE KALU ANYA v. AFRICAN NEWSPAPERS OF NIG. LTD (1992) 6 NWLR (Pt. 247) 332 para B-D at 334 para D-E.
In his reply in points of law contained in its reply brief, Appellant submitted that the argument in the Respondent’s brief that, the grant of leave to defend the claim is subject to the discretion of the court is a misconception of the principle of the law relating to summary judgment under Order 11 of the Lagos State High Court (Civil Procedure) Rules 2004. From the processes filed at the lower court the Appellant had filed a defence on the merit to the claim, and also filed a counter claim and counter affidavit which processes raised triable issues of law and fact to warrant the Appellant being allowed to defend the suit. Also the Respondent’s arguments in parags 4.2 to 4.2.7 pages 4 – 6 in its brief of argument laid it bare that there are conflicts in the affidavit evidence before the court which ought to be resolved by oral testimonies before the trial court. The trial court has no discretion to exercise in the face of the triable issues raised by the statement of defence and counter claim and the conflicts in affidavit evidence before the court. Also the Respondent to a claim under contract of indemnity like any other form of contract is at a liberty to raise any defence to the claim given the peculiar circumstances of each case.
On the parts of this court the submissions above are carefully examined. The Applicant now Respondent in this court headed to the lower court with this action in summary, moved the court to enter in its favour a summary judgment under the rules of that court on certain premise i.e. as shown in Exhibit ‘D’ tendered and admitted that the Appellant willingly indemnified the Respondent of the rent paid for the property. Also the Respondent as Applicant then presented a scenario of no irreconcilable differences in the affidavit in support of its application for summary judgment, and the Appellant’s counter affidavit in respect of the said application did not warrant a full trial of the matter.
On the side of the Appellant who was Defendant at the lower court, filed a defence and counter affidavit to the motion for summary judgment, raises the defence of frustration of the contract by a third party (the Lagos State Development and Property Corporation, (“LSDPC”) it also raised the defence of set of which was also made in the counter claim for the cost of replacement and repair of the damage caused by the Respondent to the demised premises.
The above two scenario, represents the arsenal, which the parties presented at the lower court. Tossed between these two situations inter alia stated, was it right or proper for the lower court, within the limits of its discretion and jurisdiction to have entered a summary judgment against the Appellant in accordance with Order 11 of the High Court of Lagos State (Civil Procedure) Rules 2004.
Let us pause here to consider the provision of Order 11 of the High Court of Lagos State (Civil Procedure) Rules 2004. The relevant provisions to the present discourse will be Order 11 Rules 1, 4 and 5.
ORDER 11 RULE 1
“Where a claimant believes that there is no defence to his claim, he shall file with his originating process the statement of claim, the exhibits, the depositions of his witnesses and an application for summary judgment which application shall be supported by an affidavit stating the grounds for his belief and a written brief in respect thereof.”
ORDER 11 RULE 4:
“Where a party served with the processes and documents referred to in Rule 1 of this Order intends to defend the suit he shall not later than the time prescribed for defence file:
a) His statement of defence
b) Disposition of his witnesses
c) The exhibits to be used in his defence
d) A written brief in reply to the application for summary judgment.
ORDER 11 RULE 5
1) “Where it appears to a judge that a Defendant has a good defence and ought to be permitted to defend the claim he may be granted leave to defend.
2) Where it appears to the judge that the Defendant has no good defence, the judge may there upon enter judgment for a claim.
3) Where it appears to a judge that the Defendant has a good defence to part of the claim but no defence to other parts of the claim, the judge may there upon enter judgment for that part of the claim to which there is no defence and grant leave to defend that part to which there is a defence.”
Before delving into those provisions, and juxtaposing same with the circumstances of the present appeal, it may be refreshing to consider that, the cardinal rule of interpretation of statutory provisions such as the one under consideration. It is settled law, that, the rule of interpretation of statutory provisions should always be construed as a whole and should be given an interpretation consistent with the object of the entire statute. See BAKARE v. NRC (2007) NWLR (Pt. 1064) 606 at 639; ODUTOLA HOLDINGS LTD v. LADETOBI (2006) 12 NWLR (Pt. 994) 321 at 358; UNI PETROL v. E.S.B.I.R. (2006) 8 NWLR (Pt. 624) 641; RIVERS STATE GOVERNMENT v. SPECIALIST KONSULT (2005) 7 NWLR (Pt. 923) 145 at 179.
Looking at Order 11 of the Rules of the trial court, the circumstances under which application for summary judgment can be brought is “where a Claimant believes there is no defence to his claim”. It appears therefore, that there is no limitation to any kind of claim or subject matter of which application for summary judgment can be brought. The only requirement is that, the claimant believes there is no defence to his claim. Therefore, the procedure for summary judgment as provided for above is to enable claimant to obtain judgment without trial where the case is perfectly clear and unassailable. The affidavit of the claimant must disclose explicitly grounds for his belief and mere blanket deposition will not suffice the Respondent from the letters of the rules is not required to file a counter affidavit, but he can do that ex abundante cautela. Also under the general law, the effect of absence of counter affidavit will be that the facts in the affidavit in support are admitted.
In support of this position see NWOSU v. IMO STATE ENVIRONMENTAL SANITATION AUTHORITY (1992) NWLR (Pt. 135) 688 at 721; AJOMOLE v. YADUAT (No. 2) (1991) 5 NWLR (Pt. 191) 266. Finally, on where it appears to a judge whether or not a Defendant has a good defence the judge may not be expected to consider whether the defence has been established, what is required is to see or not upon examination of the processes whether it reveals a prima facie defence or not.
Juxtaposing the requirements of the Rules and the central issues in this appeal, it would be seen that those hangers the Appellant held to in support of his appeal are that the Respondent has not strictly proved its entitlement to the sum awarded by the court. Also that judgment was entered in the face of conflicting affidavits. Again the trial court awarded interest at the rate of 21% per annum even though parties had not agreed that interest would be paid on the transaction. Again, the Appellant had raised triable issues.
On the side of the Respondent the Appellant demonstrated commitment by willingly indemnifying the Respondent of the rent paid for the property as seem in Exhibit ‘D’. Also there were no irreconcilable differences in the affidavit in support of the Respondent application for summary judgment and the Appellant’s counter affidavit in respect of the said application to warrant a full trial.
On the part of the trial court, after its examination of the positions of parties above, on page 299 of the records, the 2nd paragraph stated as follows:
“I have examined all the processes filed by both parties to this action and even though it is clear that the Claimant did pay a substantial amount of money to the Defendant for the lease of the property, I observe also that, the Defendant has executed an indemnity in favour of the Claimant in respect of the sum paid to it as rent for the demised premises. The fact that, the Defendant now has a counter claim for alleged costs of repairing the premises vacated cannot release it from the said indemnity and so it is bound by its provisions therein.
In the said indemnity, the Defendant has agreed to indemnify the Claimant against all actions or proceedings for which it may be incurred or made against it by third parties etc. the sealing of the premises by the Lagos State Government who is a third party falls clearly under the situation envisaged by this indemnity so the Defendant has no hiding palace. It is therefore bound to refund the unutilized part of the rent to the Claimant and I so hold. I do not that the Defendant has a counter claim against the Claimant herein which is a separate claim and will have to be proved. If it is successful, the Claimant will be liable to pay the Defendant the amount awarded by the court. For now however, I find that the Defendant is bound to refund the unutilized rent paid up front by the Claimant as claimed in paragraph 32 (a) of the statement of claim.
The claim in (b) however is refused, as 1st is a claim in special damages which has to be proved and I see no document to substantiate the prayer for the said solicitors fees in the list of documents to be relied upon in this matter by the Claimant. This claim is therefore refused and it is dismissed.”
The above was the position taken by the learned trial judge by entering a summary judgment in favour of the claimant now respondent in this court. From the above, can it be said that the position of the learned trial judge is in consonance or in line with the guide provided for by the Supreme Court in summary judgment procedure. The Supreme Court had admonished that, the procedure for summary judgment which is to enable claimant obtain judgment without trial, must be the case which is perfectly clear and unassailable. See OKAMBA v. SULE (1990) 1 SCNJ 1. Has the circumstance of the present appeal met with that standard to warrant judgment entered summarily. Let me state here, and now, that, the issue of indemnity Exhibit ‘D, and its existence from the entire record before this court is not disputed.
Nothing is before this court to suggest otherwise. The issue here is, whether the existence of Exhibit ‘D’ the indemnity, has totally precluded the trial court as stated in the judgment from examining all the processes especially those filed by the Appellant before it, to ascertain whether or not a defence on the merit had been laid out and to warrant the Appellant heard on the defence.
The trial court in its judgment acknowledged that the contract of indemnity was frustrated by a third parry, the Lagos State Government and not of the making of the Appellant. Although, the trial court was quick to state that such frustration was what the indemnity signed and agreed was to give cover to the Respondent for money paid of front. But that in itself is a reason why the Appellant should be heard in defence. The Appellant itself did not frustrate the contract. Another aspect of the judgment is the counter claim of the Appellant. The trial court stated the law correctly that, a counter claim, is a separate claim from the main claim, and will have to be proved separately.
Yes, this is the law. However, for summary judgment where the Defendant is not heard in defence, the counter claim which by law must emanate from the main claim will not have a leg to stand upon. By law, a counter claim is a weapon of offence which enables a Defendant to enforce a claim against the Plaintiff as effectually as in an independent action. The counter claim must be directly related to the principal claim but not outside of and independent of the subject matter of the claim. See BEPCO LTD v. NASCO MGT. SERVICE LTD (1993) 7 NWLR (Pt. 305) 369 at 381; ANDREW OKONKWO v. CO-OPERATIVE AND COMMERCE BANK (NIG) PLC & TWO ORS (1997) 6 NWLR (Pt. 507) 48; U.I.C. LTD v. T.A. HAMMOND (NIG.) LTD (1998) 9 NWLR (Pt. 565) 340 at 365; EMAPHIL LTD v. ODILI (1987) 4 NWLR (Pt. 67) 915 at 920; BALOGUN v. OLIGBEDE (1991) 8 NWLR (Pt. 208) 223 at 235; OGBONNA v. ATTORNEY-GENERAL OF IMO STATE (1992) 1 NWLR (Pt. 220) 647 at 692. That silent cord which binds the main claim and the counter claim, makes it imperative that the Appellant be heard in defence of the main claim. If there is no defence to the main claim, it will be a mirage to see what the court said in its judgment.
If proved, and the counter claim is successful, the Claimant will be liable to pay the Defendant the amount awarded by the court.”
The issue of the counter-claim, thus, is another reason why, summary judgment was inappropriate in the circumstance of the dispute between the parties at the lower court.
Also there was the issue of conflict in the affidavits of the parties at the trial court. The Respondent who was claimant at lower court at page 14 of its brief of argument paragraphs 0.57, 0.58 and 0.59 stated as follows:
“The conflict as alleged by the Appellant between paragraph 30 of the affidavit in support of the application for summary judgment and paragraph 27 of the counter affidavit is that, while paragraph 30 of the affidavit in support stated that the interest rate for commercial lending banks is 22% which should be applied to the transaction between the parties, paragraph 27 of the counter affidavit denies this and states that the parties had not agreed that such 22% interest rate would apply to the unutilized portion of the rent. Our contention to the submission of the Appellant as contained above is that, the Appellant did not in any way materially controverted the fact that the commercial lending rate/interest rate at the time was 22% the contention of the Appellant was as regards whether the interest is payable or not, we therefore submit that the deposition contained in paragraph 27 of the counter affidavit does not constitute any irreconcilable difference as alleged by the Appellant we submit further that, assuming without conceding that any conflict exists between the said counter affidavit and the affidavit in support of the application for summary judgment, the said conflict are immaterial and inconsequential. The affidavits do not materially or substantially differ to warrant calling oral evidence.”
From the record before this court, the Respondent (then Claimant) was awarded by the trial court, all his claims in the application for summary judgment. The issue of the interest rate charged on the unutilized rent money was disputed. In fact, the Appellant denies that the parties had not agreed that such interest rate would apply to the unutilized portion of the rent. This no doubt, amounts to material conflict in the affidavits of the parties, as what is being challenged is an issue said not to be part of the contract between the parties, as found in Exhibit ‘D’. The learned trial judge ought to have given consideration to this material conflict in the affidavits of the parties, and to warn himself not to proceed and enter summary judgment in the face of these clear conflicts.
On the whole therefore, from the circumstances of the present case, the learned trial judge was wrong to have entered summary judgment against the Appellant under Order 11 of the High Court of Lagos State Civil Procedure Rules 2004. The Appellant should and or ought to have been heard in defence. The issue No. 1 is resolved against the Respondent and in favour of the Appellant.
On issue No. 2 to wit:
“Whether from the circumstances of this case, the learned trial judge was right to have awarded interest in favour of the Respondent.”
The resolution by this court to issue No. 1 has affected the very foundation or the entire substratum of this appeal. This court, having resolved that, the summary judgment procedure, under Order 11 of the High Court of Lagos State (Civil Procedure) Rules 2004 was not appropriate to have been adopted by the trial court in its resolution of the dispute to the present parties in this appeal. Any other action, connected to, or related to, the claim, awarded to the Respondent, under the summary judgment procedure will go to no issue. This, will include any kind of interest whether pre judgment or post judgment. In view of that therefore, issue No. 2 remains only an academic question.
Having resolved issue No. 1 in favour of the Appellant, and issue No. 2 found to constitute an academic question, the appeal is meritorious, and it is hereby allowed. The judgment of Honourable Justice A. A. Philips J, in Suit No. LD/2185/09 of the High Court of Lagos State, Lagos Judicial Division delivered on the 20th day of May, 2011 is hereby set aside by this court.
Further, this court has ordered that this case be remitted back to the Honourable Chief Judge of Lagos State to be assigned to another judge for parties to be heard on the merit.
Parties to bear their own costs.
CHINWE EUGENIA IYIZOBA, J.C.A.: I read before now the judgment just delivered by my learned brother, SIDI DAUDA BAGE, JCA. I am in full agreement with the reasons given and the conclusions reached in the appeal. I agree that the appeal has merit. I also allow it and I abide by the consequential orders of my learned brother in the lead judgment.
JAMILU YAMMAMA TUKUR, J.C.A.: I had the advantage of reading before today the lead judgment just delivered by my lord Sidi Dauda Bage, JCA, and I agree that the appeal is meritorious and I also allow it.
I abide by the consequential orders made in the judgment.
Appearances
L. William, S.A.N. with Chike Ikpeme Esq.For Appellant
AND
M. J. Onigbanjo S.A.N. with Iniye Merry Ogbe (Miss)For Respondent
