PETGAS RESOURCES LTD. V. LOUIS N. MBANEFO (2016)

PETGAS RESOURCES LTD. V. LOUIS N. MBANEFO

(2016)LCN/8255(CA)

In The Court of Appeal of Nigeria

On Wednesday, the 3rd day of May, 2006

CA/L/285/2000

RATIO

PRACTICE AND PROCEDURE: PRE-JUDGEMENT INTEREST; WHETHER A CLAIM FOR PRE-JUDGEMENT INTEREST MUST BE PLEADED
This court has persistently held, that a claim for pre-judgment interest must be pleaded; set out in the writ of summons and statement of claim and filing fees calculated and paid on same and evidence must be led to substantiate the claim in the pleadings before the claim may succeed. The cases of HENKEL CHEM. LTD. V. A.G. FERRERO & CO. (2003) 4 NWLR (Pt.810) p.306 and F.B.N. PLC. V. EXCEL PLAST. IND. LTD. (2003) 13 NWLR (Pt.837) AT 412. are succinct on the subject of pre-judgment interest. per. SOTONYE DENTON WEST, J.C.A.

PRACTICE AND PROCEDURE: AWARD OF INTEREST; THE PRINCIPLES GUIDING THE AWARD OF INTEREST

COURT: THE EXERCISE OF THE COURT’S DISCRETION;THE DUTY OF THE APPELLATE COURT ONCE THE ISSUE OF DISCRETION HAS BEEN INVOKED BY A TRIAL COURT

The exercise of discretion is the greatest weapon that any court has in the administration of justice. Once this issue of exercise of discretion has been invoked by a trial court, an appellate court ought to tread with caution in dismantling a decision of the lower court based on discretion. In the case of ANYAWU vs. MBARA; (1992) 5 NWLR (Pt. 242) PAGE 386 at PAGE 404 NNAEMEKA-AGU, J.S.C. delivering the lead judgment has this to say “On the feeble complaint about the handling of the important duty of evaluation of evidence by the courts below, I have not been persuaded that the courts misused their powers in this respect in any way. Rather after a view of the whole case, I entirely agree with the Court of Appeal, per Olatawura, J.C.A. (as he then was) when he stated:
“The ascription of probative value to evidence is primarily that of the lower court and the interference by an appeal court on findings of fact is limited to a very narrow dimension. There is no special circumstances or justification on the printed records to interfere with the finding of fact made in the court below. An appeal court must attach the greatest weight to the opinion of the trial Judge who has the duty to see and indeed has seen and heard the witnesses. The Appeal Court must not disturb the findings of fact made by the trial Judge except where such findings are unsound – Omoregie v. Idugiemwanye (1985) 2 NWLR (Pt.5) 41 at p.42.” per. SOTONYE DENTON WEST, J.C.A.

JUSTICE

DALHATU ADAMUJustice of The Court of Appeal of Nigeria

MUHAMMED LAWAL GARBAJustice of The Court of Appeal of Nigeria

SOTONYE DENTON-WESTJustice of The Court of Appeal of Nigeria

Between

PETGAS RESOURCES LTD.Appellant(s)

AND

LOUIS N. MBANEFORespondent(s)

SOTONYE DENTON WEST, J.C.A. (Delivering the Leading Judgment): The Plaintiff sued the Defendant in the High Court of Lagos State by a Writ of Summons and Statement of Claim filed on May 28th, 1999 wherein it claimed against the defendant mesne profit of one million five hundred thousand naira (N1,500,000:00k) with interest of 21% per annum for the period between October 13th, 1995 and July 28th, 1998 which was calculated as; two million, nine hundred thousand, two hundred naira (N2,900,200.00k).
The plaintiff also filed an application with the same prayers in the writ of summons and statement of claim by a summons on notice brought pursuant to Order 11 rules 1 and 2 of the High Court of Lagos State (Civil procedure) Rules 1994 on August 23rd, 1999. The defendant filed an affidavit showing cause and subsequently filed an amended statement of defence.
Trial commenced on December 15th, 1999 and the learned trial Judge entered final judgment summarily on the strength of the summons on notice, affidavit and exhibits M1-M9. In his Judgment Rhodes Vivour, J. of the High Court of Lagos State as he then was held:
“Accordingly, judgment is entered for the plaintiff against the defendant in the sum of N1,375,000.00k plus interest at 21% from 13/10/95 until judgment and thereafter at 5% until the judgment is paid.”
The Defendant being dissatisfied with the judgment of the High Court filed an appeal against the judgment of the trial Court. In its notice of appeal the appellant canvassed two grounds of appeal;
(a) That the defendant/appellant ought to have been allowed to defend the action on the merit in view of the genuine conflict in the affidavits of the parties before the court.
(b) That there was no evidence before the court to sustain the interest awarded by the court on the sum claim at the rate of 21% per annum from 30th October, 1995 to the date of the judgment being 23rd December, 1999.
Notwithstanding the first ground of appeal canvassed by the appellant, only one issue was raised in its brief of argument filed on July 1st 2002;
“Whether the learned trial Judge was right to award interest on the sum claimed by the plaintiff at the rate of 21% per annum from 30th October, 1995 till the date of judgment being 23rd December 1999.”
I therefore affirm the submission of learned counsel for the respondent in paragraph 3.2 of his brief of argument, that the appellant has abandoned its first Ground of Appeal.
The respondent in his brief of argument filed on 11/11/02 did not raise any issue for determination. The single issue for determination in the present appeal is raised in paragraph 4 of the appellant’s brief.
In the very comprehensive judgment of the learned judgment of the trial court, two kinds of interest was awarded; pre-judgment and post judgment interest. A pre-judgment interest of 21% per annum on the amount claimed being one million five hundred thousand naira (N1,500,000.00k) and a post judgment interest of 5% per annum of the judgment debt.
In this appeal the post-judgment interest awarded by the learned trial judge is not challenged by the appellant. I refer to paragraph 5.10 of the appellant’s brief of argument where the appellant confirmed that the post-judgment interest awarded is pursuant to Order 38 Rule 7 of the High Court of Lagos of Lagos (Civil Procedure) Rules 1994.
I will therefore pay little attention to the superfluous argument of both counsels for the appellant and respondent in their briefs on the issue of post-judgment interest since it falls outside the issue of this appeal, which is pre-judgment interest.
In his brief of argument, learned counsel for the respondent analyzed the sole issue for determination formulated by the appellant between paragraphs 3.3 and 4.6 of his brief. He submitted that since the legal entitlement of the trial judge to award the interest now challenged is not in issue in this appeal and the appellant having not expressly said that the interest awarded is unreasonable, the appellant can only be deemed to challenge the quantum of the interest being 21% per annum.
Respondent argued further, that the appellant’s failure to ask for a particular reduction in its brief is fatal to its appeal. The respondent submitted with respect that an appellate court is usually reluctant to substitute the discretion of the lower court with its own discretion unless a wrong principle had been applied. He relied on; D.P.M.S. LTD. v. LARMIE (2000) 5 NWLR.(Pt.655) AT 138 and UNIVERSITY OF LAGOS AND ANOR. v. AIGORO (1985) 1 SC 265; (1985) 1 NWLR (Pt.1) 143.
Learned counsel for the respondent submitted finally in the above respect, that but for the abundance of caution, the argument above disposes of the present appeal.
I do entirely agree with the brilliant argument of the respondent counsel summarized above in that the only issue raised by the appellant herein should be deemed to concern the quantum of the pre-judgment interest only.
In the interest of justice I will analyze the issue formulated by the appellant in paragraph 4 of its brief, by contrasting same with the prayer in its brief at paragraph 3 of its conclusion which is the last paragraph in the respondent’s brief.
“4. ISSUE FOR DETERMINATION IN THE APPEAL
Whether the learned trial judge was right to award interest on the sum claimed by the Plaintiff at the rate of 21% per annum from 30th October, 1995 till date of judgment being 23rd December, 1999.”
“3. CONCLUSION
The appellant submit, that for the above reasons, among others, this appeal should be allowed and the interest of 21% per annum awarded on the adjudged sum of N1,350,000.00k (one million three hundred and fifty thousand naira) for the period 30th October, 1995 to 23rd December, 1999 be set aside.” (the Italics mine).
The appellant challenged the proprietary of the pre-judgment interest at the rate of 21% per annum awarded by the learned trial judge and prayed this court to set it aside. While I agree with the respondent that the quantum of the pre-judgment interest is being challenged, the prayer of the appellant quoted above strongly suggests to me that the appellant also challenges the entitlement of the respondent to the interest in dispute.
The appellant in it’s brief submitted that interest may rightly be awarded in two distinct circumstances;
(a) Where it is claimed as of right; such as contemplated by the agreement between the parties or under mercantile custom or under a principle of equity, such as breach of fiduciary relationship. He relied on EKWUNIFE V. WAYNE (W/A) LTD. (1989) 5 NWLR (Pt. 122) p. 422 AT 445.
(b) Where there is a power conferred by statute to do so in exercise of the court’s discretion.
I agree with the submission of the appellant in this regard but, I will overlook the second circumstance since it concerns only post-judgment interest which is not the issue in this present appeal. See F.B.N. PLC. V. EXCEL PLAST. IND. LTD. (2003) 13 NWLR (PT.837) AT 412. The issue here is pre-judgment interest.
The respondent in his brief of argument succeeded to distinguish the features of pre-judgment interest from post-judgment interest, damages from interest, and money lender’s action from actions of other mercantile transactions. The respondent cited several authorities concerning these diverse aspects of our law in support of his case.
For instance, when learned counsel for the respondent cited the case of METAL CONSTRUCTION (W/A) LTD v. ABODERIN (1998) 8 NWLR (Pt.563) p.538, which is a land case, he sought to substitute the concept of damages with the concept of interest. I am of the view that this case is relevant to the present appeal.
The respondent counsel also tried to persuade the court with the decision in ALHAJI HAUSA V. F.B.N. PLC. (2000) 9 NWLR (Pt.671) p.64 wherein the transaction from which the suit arose involved a loan lent by the respondent who is a licensed commercial bank to the appellant. The pre-judgment interest awarded was guided stricto senso by the Central Bank of Nigeria guidelines on credit and also the express agreement of the parties.
The facts of the above precedents among others cited by the respondent is in consonance with the present appeal. The approach of the respondent is therefore preferable, since it sets the facts of this case against the position of the law as it relates thereto.
This court has persistently held, that a claim for pre-judgment interest must be pleaded; set out in the writ of summons and statement of claim and filing fees calculated and paid on same and evidence must be led to substantiate the claim in the pleadings before the claim may succeed. The cases of HENKEL CHEM. LTD. V. A.G. FERRERO & CO. (2003) 4 NWLR (Pt.810) p.306 and F.B.N. PLC. V. EXCEL PLAST. IND. LTD. (2003) 13 NWLR (Pt.837) AT 412. are succinct on the subject of pre-judgment interest.
The respondent has stated and led evidence on its plea of pre-judgment interest and so the learned trial judge had no option but grant the claim. The respondent have also submitted that the appellants failed to challenge the claim for interest in the lower court which in my view should not be allowed to be raised now before this court.
On this preponderance, the question that logically occurs to me is whether the learned trial judge in his well considered ruling had the discretion to award pre-judgment interest to the plaintiff under the circumstance. In proceedings in any court for recovery of debt damages or even mense profit, the court has the power to award interest on the debt, damages or mense profit between the date on which the cause of action arose and the date of the judgment.

In HENKEL CHEM. LTD. V. AG FERRERO & CO. (Supra) it was held;
On principles guiding the award of interest:
“the mere fact that a sum of money is substantial is not enough to justify award of interest on debt. The general principle is that interest is not payable or recoverable at common law on ordinary debt in the absence of the following situations;
(a) contract, express or implied; or
(b) some mercantile usage; or
(c) provision by statute.”
In the present appeal pre-judgment interest is a term of contract express or implied between the parties, as revealed in the various exhibits and the lease-hold agreement between the appellant and the respondent. There was some mercantile usage between the respondent and the appellant. The learned trial judge was therefore correct when he held that the basis of an award of interest existed, in that the defendant has kept the plaintiff out of his money and the defendant has had the use of it to himself, so he ought to compensate the plaintiff accordingly. Therefore the lower court duly exercised his discretion in favour of the respondent, when he observed in his judgment thus “affidavit evidence in support of the summons reveals that the defendant at the expiry of the lease on 13/10/95 remained in possession of the premises until 28/7/98 when it vacated same. The plaintiff claims mesne profit for that period. Now, at the end of the tenancy the tenant is duty bound to yield up possession. If he fails he becomes a trespasser. This is so because his continued possession is a wrongful act. Being a trespasser he is liable to pay damages for trespass. It is that damages that is called Mense profit. See Debs v Cenico Ltd (1986) 3 NWLR (Pt. 32); 846. Exhibit M5 is the Deed of sublease. It shows clearly the defendant to be the tenant of the plaintiff in the subject matter. Exhibit M6 is a letter written by the defendant to the plaintiff. It is dated 2/9/92. The operative part reads:-
“The rent as you are aware is N500,000 per annum and paid 3 years in advance as you demanded which is N1,500,000.” It is clear from exhibits M5 and M6 that there was in existence a landlord tenant relationship between the plaintiff and the defendant. The property was No.7A, Idejo Street, Victoria Island, Lagos and the rent for the period 1992 to 1995 was N500,000 per year. The tenancy expired on 13/10/95 and the tenant remained in possession until 28/7/98.” (Italics mine)
See pages 33-44 of the Record of Appeal. There was no corresponding defence to this observation by the appellant in his counter-affidavit. OMO, J.S.C IN OBMIAMI BRICK & STONE (NIG.) LTD. V. ACB LTD (1992) 3 NWLR (Pt.229) PAGE 260 AT PAGE 310 said
“As to its issue (iii), it is trite law that a Court of Appeal will not lightly interfere with the findings of fact of a court of trial. To justify such departure it must be able to hold that such findings were not based on the evidence before the court or were the results of wrong inferences on evidence led, and therefore did not arise from a proper exercise of its opportunity of seeing and hearing the witnesses which appeared before it vide Obi v. Owolabi (1990) 5 NWLR (Pt.153) 702; Chukwu v. Nneji (1990) 6 NWLR (Pt.156) 363.”
However I believe that the exercise of this discretion must be judicial and judicious and contemporaneous with the economy of this jurisdiction. It is to the glory and excellence of our legal system that in order to prevent any injustice, a party though bound by the first judgment still has a right to reduce his grieve by resort to another court for relieve in exercising his right of appeal to a higher court. In this Court it seems the appellant even though bound by the decision of the lower Court, is seeking a relief in respect of the pre-judgment interest. The Court of Appeal even in it’s equitable jurisdiction will not intervene as regards the quantum of pre-judgment interest, since the lower court has evaluated the affidavit evidence before it of the respondent’s and appellant case and came to the conclusion that the respondent is entitled to interest of 21% per annum on the judgment sum. The exercise of discretion is the greatest weapon that any court has in the administration of justice. Once this issue of exercise of discretion has been invoked by a trial court, an appellate court ought to tread with caution in dismantling a decision of the lower court based on discretion. In the case of ANYAWU vs. MBARA; (1992) 5 NWLR (Pt. 242) PAGE 386 at PAGE 404 NNAEMEKA-AGU, J.S.C. delivering the lead judgment has this to say “On the feeble complaint about the handling of the important duty of evaluation of evidence by the courts below, I have not been persuaded that the courts misused their powers in this respect in any way. Rather after a view of the whole case, I entirely agree with the Court of Appeal, per Olatawura, J.C.A. (as he then was) when he stated:
“The ascription of probative value to evidence is primarily that of the lower court and the interference by an appeal court on findings of fact is limited to a very narrow dimension. There is no special circumstances or justification on the printed records to interfere with the finding of fact made in the court below. An appeal court must attach the greatest weight to the opinion of the trial Judge who has the duty to see and indeed has seen and heard the witnesses. The Appeal Court must not disturb the findings of fact made by the trial Judge except where such findings are unsound – Omoregie v. Idugiemwanye (1985) 2 NWLR (Pt.5) 41 at p.42.”
I have not been persuaded that there was anything wrong with the concurrent findings in favour of the respondents by the two lower courts.”
See:- ODOGWU V. ODOGWU (1992) 2 NWLR (Pt.225) 539 S.C; CEEKAY TRADERS LTD v. GENERAL MOTORS CO. LTD (1992) 2 NWLR (Pt.222) 132 S.C; R.E.A.N V. ASWANI ILE IND. LTD. (1992) 3 NWLR (Pt.227) 1 S.C; ONYESOH Vs. NNEBEDUN (1992) 3 NWLR (Pt.229) 315 S.C.
In the final analysis, I am constrained to dismiss this appeal as lacking in merit.
I award N5,000.00 costs to the respondent against the appellant.

DALHATU ADAMU, J.C.A.: I have read before now the draft of the lead judgment just delivered by my learned brother Denton-West J.C.A. I entirely agree with the reasons I given and the conclusion reached in the said judgment. The only issue presented to us in this appeal is on the grant by the learned trial judge of the pre-judgment interest of 21% claimed by the respondent. The transaction that led to the respondent claim is a lease hold agreement whereby after the expiry of advance payment of rent by the appellant it stayed over for another period (of 3 years) without the usual advance payment of the agreed rent (of N500,000.00 pa). The respondent therefore claimed mesne profit on the 3 year period of overstay by the appellant and both pre judgment and post judgment interests. The appellant has no complain against the post judgment interest granted by the learned trial judge. Although the appellant filed a notice of appeal containing two grounds of appeal one of which is challenging the trial court refusal to grant it leave to defend the action which had been placed on an undefended list, he did not frame any issue on that ground which by the rules of practice is deemed abandoned. Thus, in the determination of its sole issue on the quantum of interest, the only evidence in support thereof is the application of the respondent for judgment at the lower court and its supporting affidavit in which the claim of interest and its rate are contained. There was nothing before the trial court to challenge the interest or it rate since the application to defend the action had been refused. So the grant of pre-judgment interest was not done arbitrarily by the learned trial judge but was based on the available evidence (i.e. the affidavit and other documentary evidence or exhibit) before him.
Pre-judgment interests as in the present case are claimed as of right based on agreement between the parties or merchantile custom or equity. I agree with the respondent submission that since his claim for mesne profit was successful at the lower court, the sum of money involved which the appellant had withheld or prevented him from it use, for a certain period should attract some interest. In some cases the court can grant a pre-judgment interest on a monetary or liquidated sum awarded to a successful party even where such a party did not plead or adduce evidence to prove it. Like damages, such interest naturally accrue from the defendant failure to pay the sum involved over or period of time thereby depriving the plaintiff from the use and enjoyment of the sum involved.
For my above reason and the fuller reasons given in the lead judgment, I too find the appeal as lacking in merit and hereby dismiss it with cost as assessed in the lead judgment.

MOHAMMED LAWAL GARBA, J.C.A.: The lone and narrow issue formulated by the learned counsel for the appellant in the appellant’s brief of arguments from the two (2) grounds contained in the Notice of Appeal has been adequately considered in the lead judgment written by learned brother Denton-West JCA. Though learned counsel did not relate and state in his brief from which of the two (2) grounds of appeal he distilled the said issue for determination, the issue can and has correctly been said by the learned counsel for the respondent in the respondent’s brief of arguments to have enured from ground No.2. As a result, no issue was formulated by the learned counsel for the appellant from ground No. 1 which by established principle of law, and so I agree, is deemed abandoned by the appellant See: DIELI V. IWUNO (1996) 4 NWLR (Pt. 445) 622; AKINSIPE V ADETOROYE (1999) 9 NWLR (Pt. 617) 162 and OGUN V ASEMAH (2002) 4 NWLR (Pt 756) 208.
Clearly, the appellant is not challenging the power of the court below to award interest on the judgment sum in the said issue.
The only complaint is as to the rate at which the interest was awarded i.e. 21% per annum. The ground of the complaint is that there is no evidence to support the award at 21% per annum. In this regard I would like to point out that sight should not be lost of the fact that the award was made if as a judgment procedure which is entirely based on the affidavit filed in support of a motion therefore under Order 11 of the Rules of court. The prayer on the face of the respondent’s motion for judgment which is at page 6 of the record of appeal was in the following terms:
“An order entering final judgment against the defendants/respondent for the sum of N2,900,000.00 (Two million nine thousand two hundred naira) being mesne profits and interest for the period 13/10/95 to 28/7/98, at the rate of N5000,000.00 per annum, during which the defendant’s property at No.7, Dejo Street Victoria Island, Lagos without paying any rents.” (sic).
Then in paragraph 11 of the 15 paragraphs affidavit in support of the above prayer, the respondent repeated the relief and claimed interest thereon at the rate of 21% per annum. Now since the appellant was not granted leave to defend the action against it because the lower court found that the affidavit in support of the notice to show cause did not disclose a defence on the merits, the only evidence before that court on the issue or rate of the interest prayed for on the motion paper, was as set out in paragraph 11 of the respondent’s affidavit in support of the motion for judgment. That rate was 21% per annum which remained unchallenged and the lower court was entitled to and right in the circumstance to accept and rely on in its summary judgment GLOBE FISHING V. COKER (1990) 11 SCNJ 56; OLORI MOTORS & Co. LTD. V. U.B.N. (1998) 6 NWLR (Pt. 554) 493 at 506-7 and LAWSON-JACK V S.P.D.C. (Nig.) Ltd. (2002) L.R.C.N. (Pt.102) 2021 at 2034; (2002) 13 NWLR (Pt.783) 180.
The procedure under Order 11 should not be confused with a full trial where oral evidence was required to establish pleadings on claims for pre-trial interests in recovery of money cases.
I resolve this issue against the appellant and agree that this appeal lacks merits for the above and fuller reasons given in the lead judgment. The appeal is dismissed and the decision of the lower court affirmed by me too. I abide by the order on costs made in the lead judgment.
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Appearances

Afolabi Seriki, Esq.For Appellant

AND

Emeka Okoli, Esq.For Respondent