ECOBANK NIGERIA LIMITED v. KEY PRODUCTS LIMITED
(2019)LCN/13588(CA)
In The Court of Appeal of Nigeria
On Friday, the 28th day of June, 2019
CA/OW/382/2018
RATIO
CONDITION PRECEDENT: DEFINITION
Decidedly a condition precedent is defined as:-
One which delays the vesting of a right until the happening of an event?
-TSOKWA OIL MARKETING COMPANY LIMITED v. BON LIMITED (2002) 11 NWLR (PT. 777) 163, (2002) 5 S.C. PT. 2 at 9. PER RITA NOSAKHARE PEMU, J.C.A.
EFFECT OF A CONDITION PRECEDENT IN A CONTRACT
Where there is a condition precedent to the formation of a contract, it becomes a CONDITIONAL CONTRACT. In other words, the condition precedent must happen before either party becomes bound by the contract.
Any breach of a condition precedent makes the contract liable to be repudiated. PER RITA NOSAKHARE PEMU, J.C.A.
WHAT CAUSES THE FAILURE OF A COUNTER CLAIM
Decidedly contrary to the holding of the Court below, a counter claim does not fail merely because the main claim by the adverse party has succeeded. This is because a counter claim being a separate action, failure to file a defence thereto is akin to failure of a Defendant in a normal action commenced by Writ of Summons.BALOGUN V. YUSUFF (2010) 9. NWLR (PT. 1200) 575; JERIC NIGERIA LTD v. UBN PLC (2000) 15 NWLR (PT. 691) 447; KALIO v. BRAID (1926) 6 LNR. 126. The Court below was wrong to have in the circumstances of this case dismissed the Appellants counter claim, when there was no reply thereto.PER RITA NOSAKHARE PEMU, J.C.A.
A COURT CANNOT ACT ON EVIDENCE OR DOCUMENT NOT TENDERED BEFORE IT
It is trite, and indeed an elementary principle of law, that a Court is not allowed to act on any document not tendered or admitted in evidence before it ? IKECHUKWU IKPA v. THE STATE (2017) LPELR. 42590 (S.C).PER RITA NOSAKHARE PEMU, J.C.A.
Before Their Lordships
RAPHAEL CHIKWE AGBOJustice of The Court of Appeal of Nigeria
RITA NOSAKHARE PEMUJustice of The Court of Appeal of Nigeria
IBRAHIM ALI ANDENYANGTSOJustice of The Court of Appeal of Nigeria
Between
ECOBANK NIGERIA LIMITEDAppellant(s)
AND
KEY PRODUCTS LIMITEDRespondent(s)
RITA NOSAKHARE PEMU, J.C.A. (Delivering the Leading Judgment): This Appeal is against the judgment of the Federal High Court, Owerri Division, Imo State, delivered on the 20th day of March, 2018 in suit No FHC/OW/CS/06/2007.
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FACTS RELEVANT TO THE APPEAL
The Respondent Key Products Limited, was a customer of former Hallmark Bank Plc which was acquired by the Appellant Ecobank Nigeria Plc. This was under the Purchase and Assumption Transaction adopted by the Central Bank of Nigeria (CBN), and the Nigerian Deposit Insurance Corporation (NDIC) for the liquidation of Banks.
The Appellant, Ecobank Nigeria Plc, did not assume all the assets and liabilities of former Hallmark Bank Plc. It allegedly merely assumed selected Private Sector deposits and the branch properties of Hallmark Bank. The Appellant also acquired rights to some of the debts owned Hallmark Bank including those of the Respondent Key Products Limited.
?The Respondent Key Products Limited obtained a loan of N10,500,000.00 (Ten Million Five Hundred Thousand Naira) from Hallmark Bank in the year 1997. The loan was restructured in 2000 for the sum of
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N23,662,000.00 (Twenty Three Million Six Hundred and Sixty Two Thousand Naira).
Hallmark Bank had made a provisional offer at the request of the Respondent on the 26th of July, 2004 for the sum of N20,482,385.00 (Twenty Million, Four Hundred and Eighty Two Thousand Three Hundred and Eighty Five Naira). This represents 5% shares holding under the Central Bank of Nigeria small and medium Industries Equity Investment Scheme (SMIEIS); the conditions precedent to a binding contract was not fulfilled by the Respondent before the liquidation and Revocation of Banking License of Hallmark Bank Plc.
The Court below struck out the names of Nigeria Deposit Insurance Corporation (NDIC) by Court order on the application of counsel to NDIC in 2016.
The Respondent Key Products Limited never paid the loan/overdraft granted it by Hallmark Bank Plc. It relied rather on the failed and inconclusive 51% equity/shares swap between the Respondent and former Hallmark Bank Plc.
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At the end of the trial, the Court below gave judgment in favour of the Plaintiff (Respondent) granting all the reliefs sought and dismissing the counter claim of the Defendant?s (now
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Appellant).
Dissatisfied, the Appellant (Defendant in the Court below) filed a Notice of Appeal encapsulating three (3) Grounds of Appeal. It was filed on the 5th of June 2018.
The Appellant?s brief of argument was filed on the 23rd of November, 2018. It is settled by M. R. UDOM ESQ.
The Respondent filed his brief of argument on the 7th of December 2018. It is settled by EMEKA O. NWAGWU ESQ.
The Appellant filed a Reply brief on the 18th of January 2019, but same was deemed filed on the 20th of February 2019.
The Appellant distilled three (3) issues for determination from the Grounds of Appeal:
1. ?WHETHER THE CONTRACT FOR PURCHASE OF 51% EQUITY/SHARES BETWEEN THE RESPONDENT AND HALLMARK BANK PLC WAS CONCLUSIVE AND BINDING ON THE PARTIES.
2. WHETHER THE TRIAL JUDGE WAS RIGHT IN DISMISSING THE COUNTER CLAIM OF THE APPELLANT.
3. WHETHER THERE WAS A MISDIRECTION BY THE TRIAL JUDGE WHEN HE RELIED ON FORM CAC 7 IN HIS JUDGMENT HAVING REJECTED SAME AS INADMISSIBLE EVIDENCE TO DISBELIEVE THE EVIDENCE OF THE APPELLANT AND BELIEVE THE EVIDENCE OF THE RESPONDENT.”
On his part, the Respondent distilled three
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(3) issues for determination. They are:-
1. ?WHETHER THE CONTRACT FOR PURCHASE OF 51% EQUITY/SHARES i.e. DEBT EQUITY SWAP BETWEEN THE RESPONDENT AND HALLMARK BANK PLC WAS CONCLUSIVE AND BINDING ON THE PARTIES
2. WHETHER THE TRIAL JUDGE WAS RIGHT IN DISMISSING THE COUNTER CLAIM OF THE APPELLANT.
3. WHETHER THERE WAS A MISDIRECTION BY THE TRIAL JUDGE WHEN HE RELIED ON ADMISSIBLE MADE BY THE APPELLANT?S IN ITS PLEADINGS ADMITTING FORM CAC 7 WAS COMPLETED AND GIVEN TO HALLMARK BANK PLC TO REGISTER.”
On the 7th day of May, 2019, the parties adopted their respective briefs of argument.
It is apparent that the issues for determination proffered by the Respondent is an adoption of the Appellant?s issues for determination. I shall consider this Appeal based on the Appellant?s issues for determination.
The Respondent has however raised a Preliminary Objection in a Notice in the motion filed on the 7th of December, 2018, which Notice of Preliminary Objection is reflected at Pages 3 ? 4 of his brief of argument, specifically in Paragraphs 3.01 to 3.05.
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The Grounds of objection are as follows:-
1. GROUND III of the Notice and Grounds of Appeal alleged MISDIRECTION IN LAW, whereas the GROUND III does not disclose any misdirection in any form.
2. When a GROUND OF APPEAL, which at best is a ground of law is raised as MISDIRECTION, it becomes an incompetent ground of appeal incapable of activating the jurisdiction of this Honourable Court.
Arguing the Preliminary Objection, the Respondent submits that a judge can be said to misdirect itself when he misconceives the issues, whether of fact or of law, or summarizes the evidence inadequately or incorrectly. That he may commit a misdirection either by a positive act, or by non direction. But when his error relates to his finding, it cannot be properly called a misdirection, but an error in law, citing NWADIKE v. IBEKWE (1987) 4 NWLR (PT. 67) 718 @ 744 paras e ? f.
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He submits that GROUND III of the Notice and Grounds of Appeal, alleging misdirection and direction that occasioned miscarriage of justice to the appellant, is
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one as to finding of fact of the trial judge, on admission of evidence not requiring proof as not a misdirection.
Submits that the Defendant/Appellant in Paragraphs 7 ? 10 of the Amended Statement of Defence, admitted Paragraphs 6 ? 8 and 10 of the Plaintiff/Respondent?s amended statement of claim, therefore proof that there was a debt to equity swap between the Plaintiff and Hallmark Bank Plc now in liquidation.
Urges Court to strike out Ground III of the Notice and Grounds of Appeal.
In his reply to the Preliminary Objection, the Appellant submits that Ground III is clearly a misdirection in law.
Submits that the Court below summarized the evidence incorrectly, when he held that he alluded to the fact of the Plaintiff completing and sending the FORM CAC 7 to the Defendant, because the Defendant did not deny this assertion in the Statement of Defence, when in fact the Defendant deemed the said assertion in Paragraph II of the Statement of Defence and Counter Claim. Submits that Ground III of the Grounds of Appeal is therefore a misdirection.
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He further submits that the Court below summarized the evidence incorrectly
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which resulted in a misdirection, because there is no evidence to justify the findings of admission by the Defendant.
CONSIDERATION OF THE PRELIMINARY OBJECTION
Decidedly a Preliminary Objection is an appeal challenging the competence of the appeal, and therefore the jurisdiction of the Court to entertain same. It becomes a peripheral matter, which has to be determined one way or the other, before proceeding any further in the consideration of the merit of the issues calling for the determination of the appeal, if need be,UTOO v. APC (2018) 13 NWLR Part 1634, 507 @ 522 paras f-g.
In the above cited case, it was held that where any of the grounds of appeal reveal a misunderstanding of the law by the lower Court or a misapplication of the laws to the facts already proved or admitted, it would be a ground of law. However where the ground questions the evaluation of facts by the lower Court before the application of the law, it would be a question of mixed law and fact. UTOO v. APC (Supra) at Page 530 para A.
When the facts disputed as between the parties, the conclusion which follows from the application of the law to such disputed facts are
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characterized as those of mix law and facts. Grounds of Appeal challenging such conclusion are Grounds of mixed law and fact. ? AJAYI v. OMOROGBE (1993) 6 NWLR (Part 301) 512; A. C. B. PLC v. OBMIAMI BRICK AND STONE (NIG) LTD. (NO 2) (1993) 5 NWLR (PT 294) 399.
Pertinent to note that the mere fact that an Appellant describes a Ground of Appeal as a Ground of law does not necessarily make same so. The Court must of necessity examine carefully the Grounds along with their particulars, to determine whether the Ground or Grounds are in fact Grounds of law or of mixed law and facts: OGBECHIE v. ONOCHIE (NO 1) (1986) 2 NWLR (PT. 23) 484; EJIWUNMI v. COSTAIN (W. A.) PLC. (1998) 12 NWLR (PT. 576) 149; B. A. S. F. (NIG) LTD v. FAITH ENT. LTD. (2010) 4 NWLR (PT. 1183) 104.
In WAHID CHIDIAK v. A. K. J. LAGUDA (1964) 1. NWLR 123 at 125, the Apex Court had this to say, inter alia:-
(1) ?a misdirection occurs when the issues of fact, the case for the Plaintiff or for the defence, or law applicable to the issues raised were not fairly stated for the consideration of the jury.
(2) Where, however the judge sits without a jury, he misdirected
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himself if he misconceives the issues, or summarizes the evidence inadequately or incorrectly or makes a mistake of law.
(3) Provided there is some evidence to justify a finding, it cannot properly be described as a misdirection.”
It is the Respondent?s submission in his Preliminary Objection that Ground III (Misdirection In Law) is incompetent and ought to be struck out.
?Let me reproduce Ground III in the Notice and Grounds of Appeal verbatim.
?GROUND THREE Misdirection of Law:
The learned trial Judge misdirected himself in law when he held in Paragraph 7.10 of the judgment thus,
In paragraph 12 of the Plaintiff?s written deposition on oath the Plaintiff claim to have completed the Form CAC 7 and sent to the Defendants and gave notice to produce. The Defendant failed to produce their copy though the Plaintiffs? copy produced before the Court was rejected yet the fact remain that the Plaintiff completed Form CAC 7 following their resolution in Exhibit G and sent to the Defendant. I altitude to this fact because the Defendant did not deny this assertion in the amended statement of defence. That fact is
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therefore deemed admitted and that which is admitted needs no further proof.”
The misdirection occasioned a miscarriage of justice to the Appellant.
PARTICULARS OF MISDIRECTION
(a) ?The learned trial Judge rejected Form CAC 7 and it was marked Rejected.
(b) There is no evidence before the Court to show that EXHIBIT G which is the Board Resolution of Key Products Limited has communicated or sent to the Appellants as required by Exhibit A which is the share Transfer Agreement between Hallmark Bank Plc and Key Products Limited.
(c) The Appellants copiously denied receiving Form CAC 7 in Paragraph 11 of the further amended statement of defence and counter claim and the further statement on oath of the Appellants? witness Mr. Collins Chukwuma? ? Pages 120 ? 121 of the Record of Appeal?
?A Court sitting without a jury misdirects itself if it:-
“(a) misconceives the issues or
(b) Summarizes the evidence inadequately or incorrectly for one side or the other or
(c) Makes a mistake in the law applicable to the issues in the case.”
However, if there is some evidence to
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support a finding, it cannot be described as misdirection. It will also amount to misdirection, if a Court ignores or fails to advert to the issues raised by the parties for the determination of their facts. In fact misdirection may consist of NON-DIRECTION COOPER v. SWADLING (1930) 1 KB. 403.
In the case at hand, can it be said that the Court below based its finding on some evidence before it. This is because, if there are some evidence to justify a finding, it cannot properly be described as a misdirection.
Is Ground III one that is limited to admitted or proved and accepted facts. It so, then it becomes a Ground of law.
It is evident that the Court below?s reason is based on the fact that the Defendant did not deny the assertion referred to, in the amended statement of defence. The Court further held that that fact is therefore deemed admitted and that which is admitted needs no further proof.
But it is necessary to look at the pleadings to see if there was indeed a denial by the Appellant that he received FORM CAC 7.
In Paragraphs 11 and 12 of the Plaintiff amended statement of claim it states thus:-
PARAGRAPH 11
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? ?In August 2005, the share purchase Agreement and Corporate Affairs Form CAC 7 was provided to the Plaintiff for execution after its Board of Direction had been dissolved by Hallmark Bank Plc. The share Purchase Agreement/Transfer Agreement and CAC 7 were duly executed and given back to Hallmark Bank Plc for filing at Corporate Affairs Commission. The Defendant is hereby given notice to produce share Purchase Agreement/Transfer Agreement failing which the Plaintiff shall rely on its own copy at the trial. New Directors were also appointed for the Claimant?s company in fulfillment of this transfer agreement.
PARAGRAPH 12 ? The Plaintiff at this point transferred 57% of its shareholding to Hallmark Bank Plc (Guardians Newspaper of July 5, 2005) in proof of advertisement and requirement of new agreement.?
In Paragraph II of the further amended statement of defence and counter claim filed on the 22nd of November, 2016 the Defendant states thus:-
?The Defendant vehemently denies Paragraph 11 of the amended statement of claim and states that the share purchase agreement and Form CAC 7 (particular of
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direction) were never forwarded to the former Hallmark Bank let alone being sent for filling at the Corporate Affairs Commission Abuja Page 51 of the Record of Appeal
In Paragraph 12 of the Claimant?s sworn statement, he reiterated his pleading in Paragraph 11 of the amended statement of claim.
This assertion was however denied in the Defendants? pleading.
The Court below cannot allude to the fact that the assertion of the Claimant was admitted by the Defendant when the Defendant clearly denied the fact in Paragraph 11 of the amended statement of claim in its Paragraph 11 of the further amended statement of defence and counter claim.
For the Court below to hold that there was an admission of the facts in Paragraph 11 of the further Amended Statement of Defence was an error, as it is clear that it did not conceive the facts properly. The Court below misconceived the issues regarding the fact. It clearly summarized the evidence inadequately.
?When the Court below stated thus:-
?I allude to this fact because the Defendant did not deny this assertion in the amended statement of defence. That fact is
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therefore deemed admitted and that which is admitted needs no further proof.”
This clearly in my view amounts to a misdirection in law. This is because the Court below summarized the evidence incorrectly, and this resulted in a misdirection as there is no evidence to justify its conclusion.
The Preliminary Objection is therefore accordingly misconceived and same is hereby overruled. There is no reason to strike out Ground III of the Grounds of Appeal.
Having overruled the Preliminary Objection, I shall now consider the main appeal based on the Appellants issues for determination.
ISSUE NO 1
The Appellant submits that the contract for 57% Equity/Shares transfer was not conclusive before the liquidation and revocation of Banking license of Hallmark Bank.
He submits that the contract between the parties was predicated on the following:-
“(1) Provisional offer of Equity Finance to Key Products Limited dated 26th July 2004 ? Exhibits A and R.
(2) Share Transfer Agreement between Key Products Limited and Hallmark Bank Plc which is Exhibits A and S.
(3) Memorandum of understanding between Hallmark Bank
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Plc and Key Products Limited which is Exhibits C and T.”
But that these exhibits contain conditions precedent to the formation of the contract and indeed the duties and obligations of the parties to the contract for instance Exhibit ?E?. Submits that Exhibit ?E? states the conditions precedent. And Exhibit A which is the Shares Transfer Agreement. Exhibit A is the Shares Transfer Agreement which contains duties and obligation under title.
Submits that the conditions precedent to the formation of a binding contract were not fulfilled by the Respondent before the winding up and Revocation of the Banking license of Hallmark Bank. That Exhibit Q is the order of the Federal High Court Lagos, winding up Hallmark Bank and Exhibit ?U? ? official Gazette of the Federal Government of Nigeria, revoking the Banking license of Hallmark Bank.
Submits that a condition precedent is a stipulation in a contract which must be fulfilled before the obligation exists or becomes operative.
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Submits that there is no evidence before the trial Court that Forms CAC 2 and CAC 7 were duly registered by
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the Respondent, whose obligation it is as a condition Precedent to the formation of the contract, as clearly provided for in Exhibits A, S, E, R, and C.
That there are conditions precedent in the contract between Hallmark Bank and the Respondent, which must be fulfilled by the Respondent, to effect a conclusive binding contract which the Respondent failed to fulfill, before the winding up and Revocation of Banking license of Hallmark Bank.
Submits that the Provisions of Sections 126, 146, 147, 151, 152, 153 and 115 to 116 of the Companies and Allied Matters Act (CAMA) deal with only duly constituted and binding contracts, as well as duly registered shares and particulars of Directors of a company. The Provisions do not apply to situations of inconclusive contracts, or where conditions precedent have not been fulfilled.
ISSUE NO 2
Submits that the Court below was wrong to have dismissed the Appellants counter claim, as he did, when there is no defence to Counter Claim by the Respondent as required by the provisions of Order 13 Rule 36 (1) and (2) of the Federal High Court (Civil Procedure) Rules 2009.
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He submits that the
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Respondent?s Counsel had filed a motion for leave to file reply to the Appellant?s statement of Defence and Counter Claim, and filed same without leave of the Court first sought and obtained. He argues that there is therefore no defence or reply to the Appellant?s Counter Claim.
That a Counter Claim is a separate action, which must be proved at the hearing of the case, citing OGBONNA v. A ? G IMO STATE (1992) 1 NWLR (PT 2) PAGE 647; ALI v. SALIHU (2011) 2 NWLR (pt. 1231) Page 337.
That failure to file a defence to counter claim is the same as failure of a Defendant in a normal action to file a statement of Defence. That where a statement of Defence has been filed and no evidence is led on it, the Defendant is deemed in law to have abandoned his defence, and admitted as true the averments in the statement of claim. The onus then placed on the Plaintiff to prove his case becomes minimal ? citing AKANBI v. ALAO (1989) 3 NWLR (PT. 108) 118.
Submits that the Respondent failed to obtain the leave of Court before filing its reply to the Appellants? counter claim.
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That indeed the reply to the counter claim
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filed by the Respondent is incompetent because no leave of Court was granted. Citing JOSEPH IRO & 3 ORS v. CHRISTOPHER ECHEWENDU & 3 ORS (1996); AWHINAWHI v. OTERI (1984) 5 S. C. Page 38.
ISSUE NO 3
Submits that the trial Judge rejected FORM CAC 7 (particulars of Directors) of the Respondent as can be seen at Page 86 of the Record of Appeal.
That having rejected same, it was wrong for the Court below to rely on the inadmissible evidence, and the rejected Form CAC 7 to believe the totality of the evidence of the Respondent as to whether or not Form CAC 7 was completed and sent to Hallmark Bank by the Respondent, thereby occasioning miscarriage of justice to the Appellant.
Submits that the exercise of a Courts discretion does not extend to it acting on inadmissible evidence, in arriving at its conclusion .
That inadmissible evidence cannot be acted upon even with the consent of the parties citing SUNDAY OGUNSINA & ORS v. SUNMONU MATANMI & ORS (2001) 4. S. C. (PT 1) 84 @ 90.
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Submits further that the trial Judge misdirected himself when he held that the Defendant did not deny receiving FORM CAC 7 in their pleading, when
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as a matter of fact, he copiously denied that fact in Paragraph 11 of the further amended statement of defence and Counter Claim.
Submits that the Respondent could not establish that there was a binding and conclusive contract for 51% Equity/Shares Swap between it and Hallmark Bank ? as can be gleaned from the evidence before Court.
RESOLUTION OF ISSUES
ISSUE NO 1
A painstaking perusal of the agreements entered into, show that a contract for the transfer of shares was between the Hallmark Bank Plc and Key Products Limited. Indeed there was a provisional offer of shares which offer is subject to contract.
The agreement is subject to conditions precedent as can be seen at Page 13 of the Record of Appeal.
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These conditions precedent was not compiled with.
In Paragraph 11 of the further amended statement of Defence and counter claim, the Defendant had denied that the board of Directors of the Plaintiff company had earlier been dissolved, and new directors appointed. Denied that any shares purchase agreement was executed. That the conditions precedent to the contract for debt ? Equity Swap were not fulfilled by the
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Plaintiff prior to the liquidation of former Hallmark Bank, and revocation of its Banking licence.
There is evidence that former Hallmark Bank issued at the Federal High Court Lagos on the 31st of July 2006, and the Memorandum of understanding between the Plaintiff and former Hallmark Bank.
The conditions precedent as contained in the provisional offer is hereby reproduced verbatim.
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The proposed investment is conditional upon inter alia:-
a. Satisfactory agreement on financial projections and valuation of the company and the proposed business.
b. Conclusion of satisfactory legal documentation to govern the rights and responsibility of the parties.
c. The reorganization of the authorized shares capital of the company to accommodate proposed investment and reflect different classes of shares to protect the rights of the Bank and guarantees periodic returns on the Bank?s investments.
d. Satisfactory completion of legal, technical, financial and other due diligence as may be considered necessary by the bank.
e. Approval of the said investment by the Company?s Board of Directors and the company at an Extra-ordinary
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general meeting specifically convene for the purpose.
f. Appointment of statutory auditors and company secretary by the company on the recommendation of the Bank.
g. Appointment of management team for the company by the bank with the consent of the existing Board of Directors of the company.
h. Execution of an employment contract between any person to be appointed as Managing Director/Chief Executive Officer and the Bank.
i. All banking transaction of the company to be handed by the bank.
j. Insurance of the company?s assets shall be through the bank.
k. Obtaining all required regulatory consent?
Reply to statement of Defence and Counter Claim of the 2nd Defendant (Ecobank Nig. Plc) was filed on the 27th of January 2019.
Remarkably the Plaintiff in his reply did not deny Paragraph 11 of the further amended statement of Defence and Counter Claim. It is therefore safe to say that those facts are deemed admitted. In other words the Plaintiff admits that there were conditions precedent which must be complied with.
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Exhibit ?A? ? The Shares Transfer Agreement contains duties and obligations
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under TITLE. It states thus:-
?On or at anytime pre or post the completion date, the vendor shall execute, deliver and do all such documents, acts and things as the Purchaser reasonably requires in order to perfect the right, title and interest of the purchaser or such person as it directs to and in the shares and to procure The registration of the Purchase or such person as it directs as the registered holder of them?
The MEMORANDUM OF UNDERSTANDING between the Respondent and Hallmark Bank ? Exhibits ?C? and ?T? were specific on the need to comply with the conditions precedent to the formation of the contract ? Pages 94 ? 95 of the Additional Record of Appeal.
Decidedly a condition precedent is defined as:-
?One which delays the vesting of a right until the happening of an event?
-TSOKWA OIL MARKETING COMPANY LIMITED v. BON LIMITED (2002) 11 NWLR (PT. 777) 163, (2002) 5 S.C. PT. 2 at 9.
?Where there is a condition precedent to the formation of a contract, it becomes a CONDITIONAL CONTRACT. In other words, the condition precedent must happen before either party
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becomes bound by the contract.
Any breach of a condition precedent makes the contract liable to be repudiated.
I am of the view that there is nothing to indicate that the conditions precedent as reflected in exhibits E, R, A, C, S and T were fulfilled before the winding up and revocation of Banking license of Hallmark Bank Plc, as contained in Exhibits P, Q and U respectively.
Indeed, there is no evidence that FORMS CAC 2 and CAC 7 were duly registered by the Respondent. It was his responsibility and obligation to so do, as a condition precedent to the formation of the contract as provided for in Exhibit A, S, E, R, C and T respectively.
The Court below cited the case of MTN (NIG) COMMUNCATION LTD v. CORPORATE LTD (2015) 7 NWLR (HART 1459) 437.
?With respect, that case has to be distinguished from the present case.
While it is apparent that the contract between Hallmark Bank and the Respondent requires some conditions precedent to be complied with, to enable a conclusive binding contract which must be fulfilled before the winding up and revocation of Banking license of Hallmark Bank, the provisions of Section 126, 146, 147, 151,
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152, 153 and 115 to 116 of Companies and Allied Matters Act (CAMA) applies to duly constituted and binding contracts and also duly registered Shares and particulars of Directors of a company. It is inapplicable to a situation of inconclusive contract or non fulfillment of conditions precedent to formation of a binding and conclusive contract.
This issue is resolved in favour of the Appellant and against the Respondent.
ISSUE NO 2.
At Page 116, Paragraph 9.03 of the Record of Appeal the Court below observed thus:-
?However where he fails in his claim, and he had filed no defence to the counter claim the Defendants? claim in his counter claim remains uncontroverted?
Indeed the Court below agreed that the Respondent may have filed their reply to the counter claim out of time.
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From records, the Respondent filed a motion for extension of time to file a reply to the statement of Defence and counter claim of the Appellant on the 27th of January 2015. The Appellant on the 27th of January 2015, filed a counter affidavit and written address in opposition to the Respondents? motion on the 6th of
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February 2015. ? Pages 1 ? 13 of the Record of Appeal.
From records, the motion was never moved i.e. The motion for leave to file reply to the Appellants statement of defence and counter claim. He therefore filed same without leave of the Court first sought and obtained.
It is therefore deemed that there was no defence or reply to the Appellant?s counter claim.
Decidedly contrary to the holding of the Court below, a counter claim does not fail merely because the main claim by the adverse party has succeeded. This is because a counter claim being a separate action, failure to file a defence thereto is akin to failure of a Defendant in a normal action commenced by Writ of Summons.BALOGUN V. YUSUFF (2010) 9. NWLR (PT. 1200) 575; JERIC NIGERIA LTD v. UBN PLC (2000) 15 NWLR (PT. 691) 447; KALIO v. BRAID (1926) 6 LNR. 126. The Court below was wrong to have in the circumstances of this case dismissed the Appellants? counter claim, when there was no reply thereto.
This issue is resolved in favour of the Appellant, and against the Respondent.
ISSUE NO 3.
On what basis did the Court below base his finding that the
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Plaintiff completed Form CAC 7 following their resolution (Exhibit G) when there is evidence that Form CAC 7 was marked rejected as inadmissible? ? (Page 86 of the Record of Appeal) ? Paragraph 7.10 of the judgment at Page 112.
It is trite, and indeed an elementary principle of law, that a Court is not allowed to act on any document not tendered or admitted in evidence before it ? IKECHUKWU IKPA v. THE STATE (2017) LPELR. 42590 (S.C).
The Respondent had argued extensively that the purported rejection of the photocopy of the FORM CAC 7 did not change the pleadings of the parties and evidence before the Court below. This is because parties are bound by their pleadings.
That the evidence and admission in Paragraphs 7 ? 10 of the Amended Statement of Defence which admitted paragraphs 6 ? 8 and 10 of the Amended Statement of Claim, requires no proof as they establish the debt/equity swap between the Respondent and Hallmark Bank Plc, now in liquidation.
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In treating the Preliminary Objection earlier on in this judgment, I had observed that while the Plaintiff had averred that he forwarded FORM CAC 7 to the former
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Hallmark Bank, the Defendant (Counter Claimant) denied this fact.
Form CAC 7 therefore becomes a relevant document in the course of the proceedings in the Court below. The lower Court, having rejected the admission of Form CAC 7 cannot now rely on the same document to arrive at its conclusion.
This issue is resolved in favour of the Appellant, and against the Respondent.
The Appeal succeeds and same is hereby allowed.
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The judgment of the Federal High Court, Owerri Division, delivered on the 20th of March 2018 in suit No. FHC/OW/CS/06/2017 is hereby set aside.
N100,000 costs in favour of the Appellant.
RAPHAEL CHIKWE AGBO, J.C.A.: I agree.
IBRAHIM ALI ANDENYANGTSO, J.C.A.: I agree.
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Appearances:
M. R. UDOM, ESQ.For Appellant(s)
EMEKA O. NWAGWU, ESQ.For Respondent(s)
Appearances
M. R. UDOM, ESQ.For Appellant
AND
EMEKA O. NWAGWU, ESQ.For Respondent
