ETHELBERT UZODINMA NWOSU v. FIRST BANK OF NIGERIA
(2016)LCN/8357(CA)
In The Court of Appeal of Nigeria
On Tuesday, the 22nd day of March, 2016
CA/L/582/2011
RATIO
PRACTICE AND PRACTICE: WHAT THE COURT MUST CONSIDER IN DETERMINIG WHETHER A DEFENDANT HAS A GOOD DEFENCE
In determining whether a Defendant has a good defence to the action or has disclosed such facts as may be deemed sufficient to entitle him to defence, recourse must be had to the counter affidavit and the statement of defence.
It is not necessary for the trial Judge to decide at this stage whether the defence has been established.
“What is required simply is to look at the facts deposed to in the affidavit or indeed the facts averred in the statement of defence, where applicable and see if they can prima facie afford a defence to the action” per Kawu JSC in Okambah Ltd. vs. Alhaji Ganiyu A Sule (1990) LPELR 2422. Kawu JSC continued: “Now the purpose of the procedure under this order is to, enable the Petitioner to obtain summary judgment without trial where his case is patently clear and unreasonable. It is not designed to shut out a defender who can show that there is a triable issue” PER. UZO I. NDUKWE-ANYANWU, J.C.A.
JUSTICES
UZO I. NDUKWE-ANYANWU Justice of The Court of Appeal of Nigeria
JOSEPH SHAGBAOR IKYEGH Justice of The Court of Appeal of Nigeria
CHINWE EUGENIA IYIZOBA Justice of The Court of Appeal of Nigeria
Between
ETHELBERT UZODINMA NWOSU Appellant(s)
AND
FIRST BANK OF NIGERIA Respondent(s)
UZO I. NDUKWE-ANYANWU, J.C.A. (Delivering the Leading Judgment): This is an appeal against the judgment of the High Court of Lagos State delivered on the 5th day of March, 2011 by Hon. Justice L.B. Lawal-Akapo.
The facts briefly stated are as follows;
By a letter dated October 11, 2007, the Respondent as Claimant at the Lower Court advanced a share purchase loan to the Appellant as Defendant in the sum of N8,000,000.00 [Eight Million Naira only] herein known as Facility 1 which tenure was for 12 months. Also, by a letter dated November 9, 2007, the Respondent advanced another share purchase loan to the Appellant in the sum of N16,000,000.00 (Sixteen Million Naira only) herein known as Facility 2 which tenure was also for 12 months. Pursuant to the loan advancement, the Respondent and Appellant entered into a two share purchase loan agreements dated October 15, 2007 and November 14, 2007 covering both facility 1 and facility 2 respectively herein referred to as the Loan Agreements.
It is the case of the Respondent that by the terms of the Agreements, the Appellant agreed to repay the sum advanced under Facility 1 and
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Facility 2 by 12 equal monthly installments which was to fall due on the 28th day of each month commencing from November 28, 2007. He referred to the Appellant’s undated letter to the Respondent wherein the Appellant undertook to issue postdated cheques throughout the tenor of both Facility 1 and Facility 2. Also that the Appellant agreed to pay interest on both Facility 1 and Facility 2 at prevailing commercial rates as from the date of the loan facilities. It is the case of the Respondent that as at October 28, 2008 (the due date), the Appellant had failed to liquidate her indebtedness to the Respondent. Consequently, the Respondent sent demand letters dated August 28, 2008; and March 25, 2009. But the Appellant failed to make payment and did not respond to the demand. Hence the Respondent instituted this suit at the Lower Court, by a Writ of Summon and Statement of Claim wherein, the Respondent claimed against the Appellant as follows:
‘(a) The sum of N34,501,211,06 (Thirty Four Million, Five Hundred and One Thousand, Two Hundred and Eleven Naira Six Kobo) being the outstanding balance on the various credit facilities granted to the Defendant by the
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Claimant in the course of its banking business and which sum the Defendant has failed to pay despite repeated demands.
(b) Interest on the said sum of N34,501,211.06 (Thirty Four Million, Five Hundred and One Thousand, Two Hundred and Eleven Naira Six Kobo) at the rate of 21% per annum from April 29, 2010 until the date of entry of final judgment in the action;
(c) Interest on the said sum of N34,501,211.06 (Thirty Four Million Five Hundred and One Thousand Two Hundred and Eleven Naira Six Kobo) at the rate of 10% per annum from the date of entry of final judgment in this action until the final liquidation of the judgment debt; and
(d) Cost of this action”
In addition to the originating processes, the Respondent filed an application for summary judgment pursuant to Order 11 of the High Court of Lagos State [Civil Procedure) Rules, 2004.
In response, the Appellant as Defendant filed a Counter-affidavit along with its Statement of Defence and Counter-claim wherein she claimed as follows:
(a) A declaration that Premium Securities Limited (PSL) was Claimant’s agent in the share purchase loan transaction between Claimant and Defendant;
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(b) A declaration that PSL was negligent at handling Claimant’s investment portfolio
(c) Refund of N6,000,000,00 to Defendant being the sum invested in the said transaction,
(d) Interest on the said N6,000,000.00 at the rate of 22% per annum from 11th October 2007 until date of judgment.
(e) N2,000,000.00 as damages for unlawful detention at Claimant’s instigation;
(f) N5,000,000.00 for defamation of character by Claimant;
(g) N1,500,000.00 being the cost of litigation in this matter; and
(h) Interest on the judgment sums at the rate of 10% per annum from date of judgment until the sum is fully liquidated”
It is the case of the Appellant that the interest on the 1st loan facility was paid while the balance for the 2nd facility was to be paid in 6 months. She also alleged that based on the terms of the agreement, only the Respondent’s affiliated Stock Broker, Premium Securities Limited (Respondent’s agent), was to retain and manage the shares to be purchased with the facility and the shares to be purchased were limited only to those approved by the Respondent. She contended that as at March 18, 2008, her credit balance on
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her account was N11,870,296.52 (Eleven Million, Eight Hundred and Seventy Thousand, Two Hundred and Ninety-six Naira Fifty-Two kobo only). That she requested the Respondent’s agent to purchase more stocks with the credit balance but instead the Respondent’s agent over purchased stocks in her favour in the tune of N23,933,483.47 (Twenty Three Million, Nine Hundred and Thirty-three Thousand, Four Hundred and Eight-three Naira Forty-seven Kobo only) which led to the suspension of her account by Auditors from April 7, 2008 to June 9, 2009 during which period no transaction was done in the said account. She further contended that the inactivity in her account frustrated all efforts at paying the balance of interest on the facility. Thus her inability to liquidate her indebtedness to the Respondent was due to the Respondent’s agent negligence and that of the Respondent whose refusal to sell the stock when it fell below 30% as provided in the contract occasioned loss of money to the Appellant.
The motion for summary judgment was heard. In delivering its judgment, the trial judge granted the summary judgment in respect of all the claims of the Respondent and
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dismissed the Counter-claim of the Appellant.
Dissatisfied with the said judgment, the Appellant filed a Notice of Appeal on 19th day of April, 2009 consisting of 1 ground of appeal. In accordance with the Rules of Court, parties have filed their respective brief of arguments. They are as follows:
1. The Appellant’s brief of argument was filed on the 1st day of August 2011
2. The Respondent’s brief was filed on 12th day of August, 2012.
3. The Appellant’s Reply brief was filed on the 6th day of October, 2011.
The Appellant in its brief of argument formulated a sole issue for determination viz:-
“Whether the Lower Court was right in holding that the provisions of Order 11 of the High Court of Lagos State (Civil Procedure) Rules, 2004 applied to the matter,”
The Respondent on the other hand also formulated a sole issue for determination viz:
“Was the Lower Court right when it held that the Respondent’s claim comes within the summary judgment procedure under Order 11 of the High Court of Lagos State (Civil Procedure) Rules, 2004 and entered judgment against the Appellant in favour of the Respondent thereon?”
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ARGUMENT
Learned Counsel for the Appellant submitted that the trial judge was wrong in entering summary judgment in favour of the Respondent. Counsel submitted that, the Appellant having put forward a triable defence is entitled to defend this suit on the merit and summary judgment ought not to have been entered against her. Counsel also contended that the Respondent having failed to challenge the facts in its Counter-affidavit, those facts are therefore deemed to be admitted. Thus the trial judge ought to have relied on those facts to dismiss the Motion for Summary judgment. He also contended that the amount involved, arose out of the over purchased stocks by Respondent’s agent which was not denied, yet the trial judge entered judgment in the sum claimed notwithstanding that the Respondent failed to deny the assertion made by the Appellant in her Counter-affidavit. Counsel submitted that by entering summary judgment, the trial judge only succeeded in helping the Respondent to benefit from his wrongdoing.
Furthermore, Counsel submitted that the failure of the trial judge to consider the defence put forward by the Appellant and its refusal to give
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the Appellant an opportunity to defend herself is an encroachment of the Appellant’s constitutional right to fair hearing. He referred to Section 36 of the 1999 Constitution ; JEMIDE V NWANNE (2008) ALL FWLR (PT.430) 752; OBIENU V OKEKE (2006) ALL FWLR (PT.340) 1166.
Counsel thus urged this Court to set aside the decision of the Lower Court and remit the matter before another judge for trial.
On the other hand, learned counsel for the Respondent submitted that the Lower Court’s was right when it held that the Respondent’s claim comes within the summary judgment procedure because the Appellant did not disclose a defence to the Respondent’s claims. He referred to the case of UBA V JARGABA (2007) 11 NWLR (PT.1045) 247.
On the issue that the Lower Court’s judgment under the summary judgment procedure ( Order 11 of the High Court of Lagos State (Civil Procedure) Rules ) was in breach of the Appellant’s right to fair hearing, Counsel submitted that it is trite that the summary judgment procedure [ Order 11 ] does not offend the rule of fair hearing. He relied on the case of CPL LTD V SCANBETH (FRANK-BACH) DENMARK (2003) 13 NWLR (PT.785) 439.
He also
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contended that the Appellant’s argument as to fair hearing does not arise as it does not form part of the issue formulated by the Appellant or in its grounds of appeal. He further contended that even if the argument on fair hearing did form part of the issue formulated, the Respondent contended that the Appellant was afforded fair hearing, as the trial Court considered the Appellant’s processes before delivering its judgment.
On the issue that the Respondent did not file a further or reply affidavit to the Appellant’s Counter-affidavit, counsel submitted that where the deposition in the counter-affidavit is patently unbelievable or misguided there is no need to file a reply affidavit. Also counsel submitted that by provision of Order 11 of the High Court of Lagos State [Civil Procedure] Rules 2004, the Appellant required to show that she has a good defence and ought to be permitted to defend the claim, which she failed to do.
Finally, counsel submitted that under the provision of Order 11 of the High Court of Lagos State [Civil Procedure) Rules 2004, a reply affidavit is not necessary in determining whether or not the Respondent was entitled to
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summary judgment. He thus urged this court to dismiss the appeal, as the same is without merit.
In his reply, learned counsel for the Appellant submitted that allegation against Premium Securities Ltd who was the Respondent’s disclosed agent is an allegation against the Respondent hence the action was against the Respondent. He relied on the case of UBA PLC v OGUNDOKUN (2010) ALL FWLR (PT.504) 1521.
0n the issue that the violation of fair hearing was not founded in either the grounds of appeal or issue for determination, Counsel submitted that the issue forms part of the Notice of Appeal. He referred to the second particulars of error of law. On the issue that the Appellant’s defence is invalid, Counsel further submitted in a summary judgment procedure, all the Appellant need to show in his defence was that there is a triable issue or question, which the Appellant has clearly shown in her counter-affidavit filed at the Lower Court.
As regard the non-filing of a reply affidavit, counsel submitted that it is trite that it is incumbent on a party to deny clearly and specifically in its affidavit positive statement of fact made by its adversary in
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an affidavit otherwise those assertions will be deemed admitted. He referred to LADOKE v OLOBAYO (1992) 1 NWLR 602. He therefore submitted that the failure of the Respondent to file a reply affidavit to contradict the positive triable issues and defence raised by the Appellant in her counter-affidavit means that those facts were therefore deemed admitted by the Respondent and in the circumstance the Lower Court ought not to have entered judgment as it did in the matter.
He thus urged this Court to grant the Appellant’s prayers as contained in the Appellant’s brief.
It is true that the parties went into a loan agreement in two trenches totaling N30Million. The Appellant was made to pay 20% of the loan which amounted to N6Million. When the Repayment failed, the Respondent brought a claim to recover the sum of over N34 Million. The Respondent also filed a motion under Order 11 of the High Court of Lagos State [Civil Procedure] Rules 2004. The claimant filled a counter affidavit disclosing his defence.
The trial Judge held that he had no defence hence a summary judgment was delivered against the Appellant.
See the Appellant’s counter affidavit
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in pages 75 – 82 of the Record of Appeal. The Appellant in his deposition stated that the authorized stock broker of the Respondent Premium Securities Ltd (PSL), who authorized to purchase the shares for which the loan facilities was taken. The Respondents in a letter dated June 29, 2009 acknowledged that the PSL erroneously purchased more shares into the account of the Appellant vide pg. 81 of the Record of Appeal.
The Appellant made a report to Nigeria Police Force alleging fraudulent activities in his account which the Nigeria Police Force requested the Respondent to investigate her staff on account of the report.
The Appellant did not deny entering a loan agreement with the Respondent. However, the Appellant alleged that it was as a result of the negligence of the Respondent’s agent, PSL that he incurred losses.
He also alleged that the Respondent had an option to sell when the shares plummeted or the Appellant was no longer in a position to service the loans.
In determining whether a Defendant has a good defence to the action or has disclosed such facts as may be deemed sufficient to entitle him to defence, recourse must be had to the
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counter affidavit and the statement of defence.
It is not necessary for the trial Judge to decide at this stage whether the defence has been established.
“What is required simply is to look at the facts deposed to in the affidavit or indeed the facts averred in the statement of defence, where applicable and see if they can prima facie afford a defence to the action” per Kawu JSC in Okambah Ltd. vs. Alhaji Ganiyu A Sule (1990) LPELR 2422.
Kawu JSC continued:
“Now the purpose of the procedure under this order is to, enable the Petitioner to obtain summary judgment without trial where his case is patently clear and unreasonable. It is not designed to shut out a defender who can show that there is a triable issue”
The Appellant had catalogued some issues which I recapped earlier in this judgment which are vexed issues. These issues need to be ventilated to really ascertain the truth of the matter.
As can be gleaned, shutting the Appellant out would be denying him of his inalienable right of fair hearing. The Appellant has deposed to facts in his affidavit and stated facts in his statement of defence that the trial Judge should have
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been moved to refuse the application for summary trial.
This appeal is meritorious and should be allowed. It is allowed.
The judgment of the Lower Court is hereby set aside. This suit is to be remitted to the Chief Judge Lagos State to be tried by another judge in the general cause list.
I make no orders as to costs.
JOSEPH SHAGBAOR IKYEGH, J.C.A.: I am in agreement with the judgment prepared by my learned brother, Uzo I. Ndukwe-Anyanwu, J.C.A., which I had the honour of reading in print. Indeed the counter affidavit of the appellant disclosed a triable case. The appellant should not have been shut out from ventilating his case at the hearing on the merit.
I too would allow the appeal and abide by the consequential order(s) contained in the lead judgment.
CHINWE EUGENIA IYIZOBA, J.C.A.: I read in advance the lead judgment just delivered by my learned brother, UZO I. NDUKWE-ANYANWU JCA. In Federal Military Government v. Sani (1990) 4 NWLP (Pt.147) 688 @ 709 D-F, 710 D-E the SC in considering an application for summary judgment
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under Order 10, High Court of Lagos State (Civil Procedure) Rules, 1972 identical to Order 11 High Court of Lagos State (Civil Procedure) Rules 2004 observed:
“The procedure under Order 10 is not intended to shut out a defendant who can show on the affidavit or the statement of defence filed that there is a triable issue, which is applicable to the plaintiff’s claim as a whole, from making his defence before the trial Court, unless it is very clear indeed that he has no case in the action under discussion.
(Nishizawa v. Jethwani (1984) 12 SC 234)”
I agree with my learned brother that the appellant deposed to facts in his affidavit and statement of defence that ought to have moved the Lower Court to refuse the application for summary trial. I too allow the appeal and abide by the consequential orders in the lead judgment of my learned brother Ndukwe-Anyanwu JCA.
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Appearances
B. UsmanFor Appellant
AND
For Respondent
