AIICO INSURANCE PLC v. ADDAX PETROLEUM DEVELOPMENT COMPANY LIMITED (2014)

AIICO INSURANCE PLC v. ADDAX PETROLEUM DEVELOPMENT COMPANY LIMITED

(2014)LCN/7423(CA)

In The Court of Appeal of Nigeria

On Friday, the 18th day of July, 2014

CA/L/524/11

RATIO

EVIDENCE: STANDARD OF PROOF; THE STANDARD OF PROOF IN CIVIL CASES

Generally, proof in a civil case is on the preponderance of evidence and on the balance of probability. F.I.P.D.C. (Nig.) Ltd. Vs. E.A.S. Ltd. (supra). In Balogun v. Labiran (1998) 3 NWLR Pt. 80 Pg. 66 where the Supreme Court per Oputa JSC (of blessed memory)
“Proof by preponderance of evidence simply means that the evidence adduced by the Plaintiff should be put on one side of the imaginary side of justice mentioned in Odofin 4 Ors. v. Mogaji 4 Ors. (1978) 1 LRN and the evidence adduced by the Defendant put on the other side of that scale and weighed together to see which side preponderates.” per. UZO I. NDUKWE-ANYANWU, J.C.A.

CONTRACT: FRUSTRATION OF CONTRACT; THE DEFINITION OF FRUSTRATION

See UBN vs. OMNI Products (Nig) Ltd (2006) 15 NWLR Pt. 1005 pg 660 where the Court defines frustration as follows:
“Frustration is the premature determination of an agreement between parties lawfully entered into and in cause of operation at the time of its premature determination, owing to the occurrence of an intervening event or change of circumstance so fundamental as to be regarded by law both as striking at the roof of the agreement, and as entirely beyond what was contemplated by the parties when they entered into the agreement”.
See: Mazim Engineering Ltd vs. Tower Aluminum (Nig.) Ltd. (1993) 5 NWLR pt. 295 pg. 526. per. UZO I. NDUKWE-ANYANWU, J.C.A.

CONTRACT: FRUSTRATION OF CONTRACT; WHEN DOES THE FRUSTRATION OF CONTRACT OCCURS

The Appellant was under an obligation to finish the repayment of the amount still left unpaid. The Appellant in its brief claimed, that the contract for repayment had been frustrated, due to the coming into force of the Pension Reform Act. It is true that the National Pension Commission had directed the Appellant to transfer the management of all pension accounts in its custody to the approved fund custodian. As at 29th of November, 2006 and 8th November, 2006 when these letters Exhibits D3 and D4 were written, there was no pension contract still existing between the parties. Since there was no pension contract existing between the parties, they couldn’t have been any frustration of a non-existing contract.

“Frustration occurs wherever the law recognizes that without default of either party, a contractual obligation has become uncapable of being performed because the circumstances in which performance is called for would render if radically difference from what was undertaken by the contract.” Akanmu vs. Olugbode (2001) 13 WRN Pg.132, N.B.C.I. vs. Standard (Nig.) Eng. Co., Ltd (2002) 8 NWLR Pt.768 Pg.104. per. UZO I. NDUKWE-ANYANWU, J.C.A.

COURT: FRUSTRATION OF CONTRACT; WHETHER THE COURT HAS THE POWER TO DETERMINE THE EXISTENCE OF FRUSTRATION

JUSTICES

UZO I. NDUKWE-ANYANWU Justice of The Court of Appeal of Nigeria

SAMUEL CHUKWUDUMEBI OSEJI Justice of The Court of Appeal of Nigeria

JAMILU YAMMAMA TUKUR Justice of The Court of Appeal of Nigeria

Between

AIICO INSURANCE PLC. Appellant(s)

AND

ADDAX PETROLEUM DEV. CO. LIMITED 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 14th of December, 2010. The Respondent as claimant filed a writ of summons and Statement of claim against the Appellant as Defendant. The Respondent as claimant claimed against the Appellant as follows: –

(a) The sum of N300, 143,098.92 (Three Hundred Million, One Hundred and Forty Three Thousand, Ninety Eight Naira, Ninety Two Kobo) being outstanding indebtedness due and owing to the claimant as of the 1st day of April, 2006 from Pension Fund Policy No:7079 and accrued interest there from.
(b) Interest at the rate of 21% per month on the outstanding sum due and owing from the 1st April, 2006 till judgment is delivered.
(c) Interest on the adjudged sum at the rate of 10% per annum from the date of judgment till the judgment debt is satisfied.

The Appellant as Defendant filed its memorandum of appearance and filed its statement of defence. After a full trial, the learned trial Judge delivered its considered judgment and found for the claimant now Respondent.

The facts of this suit in a nutshell is as captured by the Respondent.

1.1 The Respondent on or about the 1st day of January, 1991, entered (through its predecessor in title, Ashland Oil Nigeria Company) into a pure pension policy agreement with the Appellant to manage its investment funds under the conditions stipulated in the Pure Pension Policy No: 7079 and the Private Placement Memorandum for the AIICO Managed Investment Fund (AMIF). See Exhibits C1 to C3 at pages 62 to 74 of the Record of Appeal.

Pursuant to the provisions of Pure Pension Policy, the Respondent was expected to pay annual premiums to the Appellant as at when due. This the Respondent consistently and diligently did from 1991-2004, and was issued receipts by the Appellant as expressed in receipts of Premium payment, i.e. Exhibits C4 (a-g) at pages 75 to 82 of the Record of Appeal.

However, on or about the 16th day of June, 2004, the Respondent was no longer interested in the appellant insuring and managing its pension fund. Consequently, the Respondent through its letter of 16th June, 2004 terminated the policy with the Appellant and demanded a bulk surrender of its total pension fund plus accrued interest in accordance with the AMIF placement memorandum.

Sequel to the termination of the Policy, the Appellant vide letter of 15th July, 2004 informed the Respondent of the performance of the investment Fund as at the 1st day of July, 2004. Pursuant to this, series of meetings were held between the Respondent and the Appellant, wherein the Appellant made a repayment proposal of the Respondents investment as expressed in Repayment Proposal which was accepted by the Respondent. The parties also resolved the issue concerning the termination of the contract and same was laid to rest.
By repayment Proposal, the Appellant was to make eleven quarterly payments of various sums totaling N532, 451,991.82k (Five Hundred and Thirty Two Million, Four Hundred and Fifty Thousand, Nine Hundred and Ninety-Nine Naira, Fifty-Two Kobo) to the Respondent beginning from the 1st day of January, 2005 and to terminate on the 1st day of July, 2007.

Notwithstanding the agreement by parties that the Appellant must adhere strictly by the repayment mode, the Appellant defaulted severally in the timing of the installments paid. However by the Appellant’s letter of 2nd November, 2006 with attachment showing fund performance and unpaid outstanding the Appellant admitted unequivocally that the total amount due and outstanding to the Respondent as at the 1st day of April, 2006 is N300,143,098.92 (Three Hundred Million, One Hundred and Forty-Three Thousand, Ninety-Eight Naira, Ninety Two Kobo).

The Appellant refused, failed and neglected to transfer the above sum to the Respondent, but instead fraudulently made use of same by hiding under a purported directive from the National Pension Commission.

The Claimant/Respondent thereafter sued the Defendant/Appellant in the court below. After a full trial, the trial Judge gave judgment in favour of the Claimant/Respondent.

The Defendant/Appellant was dissatisfied with the judgment delivered by the trial Judge hence this appeal. The Appellant filed his notice and eleven (11) grounds of appeal. The Appellant filed his brief on 12th of August, 2011 but deemed properly filed and served on 20th of January, 2014. Also filed is the Appellant’s reply brief on 4th of February, 2014 but deemed properly filed and served on 5th of June, 2014. The Appellant in its brief articulated three (3) issues for determination. They are namely thus: –

1. Whether or not the Appellant as Defendant at the lower court satisfactorily discharged the burden of disproving the Respondents as Claimant’s claim at the lower court.
(Issue is raised from grounds 5, 6 and 7 of the Notice of Appeal).
2. Whether or not the terms of the repayment of the terminated policy was frustrated by the operation of the Pension Reform Act and the letter dated 29th September, 2006 written by the National Pension Commission to the Appellant.
(Issue is raised from grounds 4, 8 and 10 of the Notice of Appeal).
3. Whether or not the finding of the learned trial Judge is against the weight of evidence adduced by the Appellants in defence of the Respondent’s claimant at the lower court.
(Issue is raised from grounds 1, 2, 3 and 11 of the Notice of Appeal).

The Respondent filed its brief on 4th of October, 2011 but deemed properly filed and served on 20th January, 2014. In its Respondent’s brief, it articulated two (2) issues for determination namely thus: –

1. Whether from the facts and circumstances of this case the Lower Court was right to enter judgment in favour of the Respondent.
2. Whether the relationship between the Appellant and the Respondent were still in force as at the commencement of the Pensions Reform Act 2004 and the directive of the National Pension Commission.

Issues 1 and 2 of the Appellant are captured by issue 2 of the Respondent, whilst Appellant’s issue 3 is captured by the Respondent’s issue 1.

I will therefore determine Appellant’s issues 1 and 2 together and issue 3 alone

ISSUE 1

Learned counsel for the Appellant submitted that the burden of proving the existence of any fact in a civil claim is on a party that asserts the existence of those facts. The party that asserts, needs to satisfy the court that it was entitled to judgment in his favour, if it is the claimant, or to be discharged from the claim of the claimant if it is the Defendant. See S. 136 and S.137 Evidence Act.
Section 136 of Evidence Act provides as follows: –
“The burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side.”
Section 137 Evidence Act also provides that:
(1) In civil cases the burden of first proving the existence or non existence of a fact is on the party against whom the judgment of the court would be given if no evidence were produced on either side regard being had to any presumption that may arise on the pleadings.”
See Nwavu v. Okoye (2008) 18 NWLR Pt. 1118 Pg. 29;
Citizens International Bank v. SCOA (Nig.) Ltd (2006) Pt 1011 Pg. 332 where the court held as follows: –
“by virtue of Section 137 of the Evidence Act, the burden of first proving the existence or non existence of a fact in civil cases lies on the party against whom the judgment of court would be given if no evidence were produced on either side, regard being had to any presumption that may arise on the pleadings.
If such a party adduces evidence which ought reasonably to satisfy a jury that the fact sought to be proved is established, the burden lies on the party against whom judgment would be given if no more evidence were adduced and so on successively until all the issue in the pleading has been dealt with.”
F.I.P.D.C (Nig.) Ltd. V. E.A.S. Ltd. (2006) 6 NWLR Pt. 975 Pg. 1.

Counsel also contended that the essence of a Statement of defence is to present facts that would exonerate the Defendant from the Plaintiff’s claim. Aso Metal Kaduna Ltd v. Deyemo (2006) 7 NWLR Pt. 978 Pg. 87. The onus is also on the Defendant to specifically plead in the Statement of defence that there exists a failure or a condition precedent to found the Plaintiff’s claim. See: Shell PDC (Nig.) Ltd vs. Burutu L.G.D.C. (1998) 9 NWLR Pt. 565 Pg. 318. Counsel referred the court to facts pleaded in paragraph 4-13 of the Statement of defence that would show that the Respondent’s claim is not competent before the court. They are as follows:-

“(4) The Defendant avers that the scheme which is a pure pension scheme regulated by a private place memorandum took effect from 1st January, 1995.
(6) The Defendant avers that upon the receipt of the claimant’s letter dated 16th June, 2004 purporting to terminate the policy it responded accordingly advising that the private placement memorandum provided for a notice period of six (6) months.
(7) The Defendant avers that the claimant in its letter dated 22nd November, 2004 eventually agreed that the six (6) months notice provided by the private placement memorandum is a binding obligation.
(8) The Defendant avers that several meetings and discussion were held to resolve the issue of termination and to fashion out the procedure for the repayment of the accumulated funds.
(9) The Defendant avers that it was at a meeting held on the 25th February, 2005 that an agreement was reached on the termination and disbursement of funds which then stood at N488,786,065.95 (Four Hundred and Eighty Eight Million, Seven Hundred and Eighty Six Thousand, Sixty Five Naira, Ninety Five Kobo) only.
(10) The Defendant avers that because of the absence of any precise and concise guidelines and/or directives from the National Pension Commission on the implementation of the Pension Reform Act, 2004 a repayment term was unadvisedly negotiated.
(11) The Defendant aver that under the then prevailing uncertainties the 1st, 2nd, 3rd, 4th and 5th installments were paid to the Claimant.
(12) The Defendant avers that the remaining installing have remained outstanding having been overtaken by the directives of the National Pension Commission which is the statutory body charged with the responsibility to regulate, supervise and ensure the effective administration of pension in Nigeria.
(13) The Defendant avers that in the National Pension Commission’s letter addressed to the Defendant dated 29th, September, 2006 it directed that all repayments in respect of all staff retirement benefit schemes hitherto managed by the Defendant be suspended until the transfer of such funds to designated pension fund administrator and pension funds custodian.”

Counsel argued further that the Appellant was not indebted to the Respondent in the sum of N300, 143,098.92 (Three Hundred Million, One Hundred and Forty Three Thousand, Ninety-Eight Naira, Ninety Two Kobo). Appellant tendered Exhibit D3 and D4 which are copies of the letter dated 29th of September, 2006 and 8th November, 2006 which issued a directive by the National Pension Commission that the Appellant should transfer the management of all pension funds and accounts in its custody to the approved Pension Funds Custodian, which is First Pension Custodian.

Counsel submitted that the terms of repayment agreement between the parties is unenforceable due to the letter dated 29th September, 2006 from the National Pension Commission. The position of the Law is that a contract is illegal if the consideration of the promise involves doing something illegal or contrary to public policy. See: Chief A.N. Onyiuke III vs. G.F. Okeke (1976) 3 SC (Reprint Editions) pg 1.

Counsel contended that Exhibit D3 and D4 have caught up with the agreement of the parties for the Appellant to repay the Respondent. The burden now lies on the Respondent to prove that it was not operating a Pension Policy with the Appellant. See Elias v. Omo-base (1982) 5 SC Pg. 25.

Counsel submitted that the only existing agreement between the parties is the terms of Repayment of the terminated Addax Petroleum Development (Nig.) Co. Policy No 7079. The Pure Pension Policy NO 7079 was duly terminated by the Respondent’s letter dated 16th June, 2004 Exhibit C5. The only agreement between the parties is the repayment agreement which is shown in Exhibit C7 and C9.
Both parties had agreed on the terms of repayment. See Neka B.B.B Manufacturing Co Ltd vs. ACB Ltd (2004) 2 NWLR pt. 858 P9 521 where the court held as follows:
“indeed there must be a mutuality of purpose and intension, the two contracting parties must agree. In other words, there must be an offer and acceptance”.

Counsel contended that having agreed to the terms of a new contract, the respondent is excluded from making claims under the old contract. See Unilorin v. Oduleye (2007) ALL FWLR pt. 371 Pg 1651.

Counsel submitted that the old contract and the new repayment contract are still under funds managed by the Appellant as a pension Fund/Policy.

Counsel further submitted that the Appellant had adhered to the repayment agreement until sometime in October, 2006 when the directive from the National Pension Commission stripped it of the powers to manage and control any pension funds whatsoever in their custody. This is what the Appellant submitted:

“We submit that by virtue of Section 44 of the Pension Reform Act, 2004 and exhibit D3 the Appellant lacked the Powers to continue with any obligations to repay the Respondent as per the terms of the repayment agreement because the contract was frustrated by the operation of the Pension Reform Act, and the directive of the National Pension Commission dated 29th September, 2006, which is exhibit D3”.

Counsel conceded that the burden is on the Appellant alleging frustration of the contract to place facts before the Court that would satisfy the Court that the contract was indeed frustrated.

“Frustration occurs whenever the law recognizes that, without default of either party, a contractual obligation has become incapable of being performed because the circumstance in which performance is called for would render it radically different from what was undertaken by the contract.”
The situation or events that would constitute a frustration of contracts are:
“(i) Subsequent legal changes;
(ii) Outbreak of war;
(iii) Destruction of the subject matter of the contract;
(iv) Government requisition of the subject matter of the contract; and
(v) Cancellation of an expected event.”
See: OBAYUWANA vs. THE GOVERNOR OF BENDEL STATE (1992) Selected Judgment of Supreme Court pg 167.

Counsel submitted that the agreement for repayment was frustrated by subsequent change in Legislation. Any attempt to continue payment would amount to an act of perpetrating illegality. Counsel Stated that the Court will consider the issue of illegality in a contract in the following circumstances.

“i. where a contract is ex facie illegal, the court will not enforce it whether illegality is pleaded or not;
ii. where the contract is not ex facie illegal, evidence of extraneous circumstance tending to show that it has illegal objects should not be admitted unless the circumstances relied on are pleaded;
iii. where pleaded facts which, taken by themselves, show illegal objects have been put in evidence, the court should not act on them.”
See: Okpara v. Gusau (2009) 1 NWLR Pt. 1151 Pg 1 where a contract is frustrated, further performance of the contract is excused only if;
“(a) the frustration occurs before the breach of the contract;
(b) the frustration is without the fault of either party, and
(c) the frustration is due to a fundamental change of the circumstance beyond the control and original completion of the parties.”
See Mazim Eng. Ltd vs. Tower Aluminum (Supra)

The Appellant has also contended that it is no longer in custody of the Respondent’s money. AIICO Pension Ltd and First Pensions Custodian have further released the sum of N100, 000.000.00 (One Hundred Million Naira) only to the respondent. The Appellant further Stated that: –

“Also by the doctrine of novation of contract, the Appellant had AIICO Pensions Manager’s Ltd and First Pension Custodian, by virtue of the letter dated 8th November, 2006 which exhibit D4 have taken the place and or position of the Appellant in respect of the contract for repayment of the outstanding sum under the terminated terms of the Pure Pension Policy N. 7072.”
See: PHILLIPS vs. AIICO LTD (1971) 7 NSCC pg 304 at 309. Counsel finally submitted as follows:

“We therefore submit that the repayment agreement of the Pure Pension Policy 7079 have been frustrated and the Appellant is no longer bound under the terms of the contract as it was not within its capacity to pay or make further disbursement as agreed by the parties under exhibit C7, therefore the terms of Exhibit C7 or repayment agreement is not binding on the Appellant.”

Counsel therefore urged the Court to resolve this issue in favour of the Appellant.

In response, the Respondent’s counsel submitted, that, where documents form part of a long drawn transaction, in order to fully appreciate their legal purport and impact, they should be interpreted not in isolation but in the con of the totality of the transaction. See: Royal Exchange Assurance Ltd v Aswani iles Industries Ltd (1991) 2 NWLR (Pt 175) Pg 639; Mobil Producing (Nig.) Unlimited v. Umenweke (2002) 9 NWLR (Pt 773) pg 543; Leyland Nig. v Dizengoff (1990) 2 NWLR (Pt 134) Pg 610.

Section 2 (2) (c) of the Pension Reform Act 2004 seeks to establish a uniform set of Rules that every person who worked in either the public service or the private sector shall be bound by.
The parties entered into a contract of investment fund management on 1st January, 1991, wherein, they agreed to be bound by the terms set out in Exhibits C1 and C3. Unlike, the Pension Reform Act 2004, the Respondent had a right of withdrawals and Bulk Surrender. The Respondent utilized this option when it wrote the Appellant, vide the letter dated 16th June, 2004 (Exhibit C5), terminating the policy with the Appellant. The Appellant demanded a bulk surrender of its total pension funds plus accrued interest in accordance with Exhibit C3. By virtue of Exhibits C1 and C3 the contract between the parties did not transcend into a pension arrangement as envisaged by the Pension Reform Act 2004.

The Respondent effectively terminated the contract between the parties as at 16th June, 2004. The termination was followed by a repayment arrangement agreed to by both parties.
The Appellant paid part but later failed to fulfill its own part of the repayment schedule vide Exhibit C7.

Counsel urged the court to hold that, the Appellant was bound to keep its own part of the bargain and pay up the remaining debt owed, as the National Pension Commission letter, does not avail the Appellant.

Both parties had entered a contract on 1st January, 1999 whereby the Respondent was making deposits to the Appellant’s Company for its workers vide Exhibits C1 & C3. By a letter dated 16th June, 2004, the Respondent terminated its contract with the Appellant and demanded a bulk payment of its contributions. The Appellant couldn’t pay in bulk and the parties thereafter agreed on an installmental repayment.

The Appellant paid haphazardly and later refused to continue to pay, claiming that the repayment contract had been frustrated by a letter from the National Pension Commission Exhibit D3 date 29th September, 2006.

The learned counsel to the Appellant conceeded that, the burden of proof in civil cases lies on the party who asserts the existence of these facts See: Longe vs. FBN Plc (2006) 3 NWLR (Pt 967) pg.228; Daodu vs. NNPC (1998) 2 NWLR (Pt.538) Pg.355; Kala vs. Potiskum (1998) 3 NWLR (Pt 540) Pg 1; Braimah vs. Abasi (1998) 13 NWLR Pt 581 Pg.167, Alhaji Otaru v. Idris (1999) 6 NWLR (Pt.606) Pg.330.

The Respondent as claimant in the court below proved that it had a contract with the Respondent whereby the Appellant kept funds for the Respondent for the pension of its workers.

The Respondent proved that this contract was terminated on 16th June, 2004. The Respondent also proved that the parties thereafter reached a repayment schedule whereby the Appellant will be paying money quarterly to the Respondent. The Appellant was not regular with this repayment and after a time stopped totally.

The Appellant claimed that the National Pension Commission wrote a letter to them on 29th September, 2006 Exhibit D3 directing that all pension funds must be deposited with designated institutions.

The question to be answered is whether there was any contract for pension still existing between the parties? As at 16th June, 2004, the Respondent had terminated the contract for pensions between them.

As at the time Exhibits D3 and D4 were made, there was no contract for pension still existing between the parties. What was left between the parties was a contract of repayment by the parties. In furtherance, of this a schedule of repayment agreed by both parties was drawn up. See Exhibit C7.

“Frustration occurs wherever the law recognizes that without default of either party, a contractual obligation has become uncapable of being performed because the circumstances in which performance is called for would render if radically difference from what was undertaken by the contract.”
Akanmu vs. Olugbode (2001) 13 WRN Pg.132, N.B.C.I. vs. Standard (Nig.) Eng. Co., Ltd (2002) 8 NWLR Pt.768 Pg.104.

It is true that change in legislation has been held by courts to constitute frustration Obayuwana vs. The Governor of Bendel State (1982) Selected judgment of the Supreme Court Pg.167. It is settled that it is not for the parties, but for the court to state, whether and when frustration of a contract has occurred. The court has the power to determine the existence of frustration even where the parties have shown otherwise.There was indeed an intervening legislation, but, it only affected Pension Funds. As at the time of the new legislation, there was no pension fund contract still existing between the parties. The contract of repaying the debt owed by the Appellant was what is in existence and was not frustrated at all. The Appellant is reneging on repaying the amount owed the Respondent. Even after the judgment was entered, a further payment towards reducing the amount owed was paid by the new AIICO Pensions Limited. The Appellant was granted licence to operate as AIICO Pensions Limited. This invariably means that the new company was to inherit all the assets and liabilities of the Appellant. It would be fraudulent for the Appellant to refuse to continue paying its indebtedness to the Respondent.

Exhibit D3 authorised the payment of old debts but with a rider to report and document such payments to the Commission. The Commission also appreciated that such situations will occur with such takeovers. It even authorized that information about the outstanding debt and the mode of proposed repayment was to be communicated to it. With this letter, Exhibit D3, the Appellant was under an obligation to repay, its debts. The Appellant’s issues 1 and 2 are both resolved against it.

ISSUE 2

Learned counsel to the Appellant submitted that when an Appellant complains that judgment is against the weight of evidence, all it means is that when the evidence adduced by the Appellant is balanced against that adduced by the Respondent, the judgment given in favour of the Respondent is against the weight which has been given to the totality of the evidence before the learned trial judge.

See: FBN vs. Oniyangi (2000) 6 NWLR Pt. 661 Pg.497, Atanda vs. Ajani (1989) 3 NWLR Pt.111 Pg. 525, Anyaoku vs. Adi (1986) 3 NWLR Pt.31 Pg.731. The learned counsel to the Appellant challenged the finding of the learned trial judge in the following grounds:

i. the trial court did not make correct assessment of the evidence;
ii. there has been an erroneous appraisal of facts leading to erroneous conclusion in the case:
iii. there has been an erroneous appraisal of facts leading to erroneous conclusions in the case;

Counsel argued that the trial judge did not make a correct assessment of Exhibit C7, the schedule of repayment and Exhibit D3, the letter dated 29th September, 2006 issued on the Appellant by the National Pension Commission.

The learned trial judge held at page 27 of the judgment as follows:

“I hold the view that the Claimant is not caught by the directive of the National Pension Commission which only took effect from 2nd October, 2006, I find from the evidence of CW1 that as at the time of the directive five installmental Payments have been made in line with exhibit C7 which shows the repayment schedule of balance and interest due to the Claimant on a quarterly basis from 1st January, 2005 – 1st July, 2007”.

Counsel argued that Exhibit C7 which is the repayment schedule is a contract rooted in Exhibit C1 (Pure Pension Policy No. 7079, C2 (Policy Endorsement and C3 (memorandum of AIICO Managed fund. The finding of the learned trial judge, that, the Respondent did not authorize the appellant to transfer its funds to a First Pension Custodian is improper. Counsel submitted that the trial judge did not consider this valuable evidence which led it to hold that Exhibit D3 did not frustrate the repayment.

Counsel referred the court to the holding of the trial judge where it held as follows;

“in this instance it is the Defendant who has the burden to discharge as to whether their inability to pay the Claimant the outstanding sum of N300,143,098. 29 (Three Hundred Million, One Hundred and Forty Three Thousand, Ninety Eight Naira, Twenty Nine kobo) was due to their compliance with the directive of the National Pension Commission”

Counsel argued that it is an inaccurate position of the Law, because cases are decided on balance of probabilities. See: Lipede & Son vs. Sonekan & Anon (1999) 1 NWLR Pt.374 Pg.668.

Also that the learned trial judge did not attach any weight to Exhibit D3 which was a directive of the National Pension Commission when she held as follows:

“I find that it is also clear from the evidence under cross examination that the DW1 admitted that there was not specific authorization from the Claimant to the Defendant to transfer its funds to any pension fund manager. I hold that the Claimant is not caught by the directive of the National Pension Commission the agreement between parties having been terminated”.

Counsel drew the courts attention to Exhibit C5, the Pure Pension Policy No. 7079 termination letter and Exhibit C7, the repayment. The trial judge would have reached the conclusion that it was a contract which is sui generis and that the Appellant no longer had power or control over the remaining money.

Learned counsel therefore urged the Court to evaluate the evidence placed before the trial Court. See Nnorodim vs. Ezeani (2001) 5 NWLR Pt.706 Pg.203. Registered Trustees of Apostolic Faith Mission vs. James (1987) 3 NWLR Pt. 61 Pg.556 where Kazeem JSC (as he then was) held.
“for the court of appeal will be in a proper position to evaluate as the trial court, the evidence which has been given in the case, for in such cases the matter in dispute has been completely narrowed down to reference that could be drawn from proved facts without going through the rigours of credibility of witnesses. When we have this type of cases the Court of Appeal should not shrink from the task of such evaluation or be inhibited therefrom just because it is a Court of Appeal.”

Counsel therefore urged the Court to re-evaluate the evidence and hold that the judgment of the trial judge was perverse and ought to be reversed by this Court.

In response, the learned counsel to the Respondent submitted, that, the relationship between the parties is regulated by Exhibits C1 & C3 (Pure Pension Police No: 7079 and the Private Placement Memorandum for the AIICO Managed Investment Fund (AMIF). At the trial court, the Respondent led evidence and was never contradicted that, the Respondent on or about the 1st day of January, 1991 entered (through its predecessor in title, Ashland Oil Nig. Company) into a Pure Pension Policy agreement with the Appellant to manage its investment funds under the conditions stipulated in the Pure Pension Policy No: 7079 and the Private Placement Memorandum for the AIICO managed Invest Fund AMIF.

In pursuance of these, the Respondent paid all the required premium to the Appellant as stipulated from 1991 – 2004. However by a letter of 16th June, 2004, Exhibit C5 the Respondent terminated the Policy and demanded a bulk surrender of all the monies paid so far. After a series of meetings, the Appellant agreed to a repayment schedule Exhibit C7. The repayment was for eleven quarterly payments to the Respondent. Inspite of this agreement, the Appellant failed to pay the quarterly installments as and when due. A total of N300, 143,098.92 was outstanding at the time the Respondent took out this action.

The repayment schedule was binding on parties and the Appellant will not be allowed to renege on it. See: Ifeta vs. SPDC (Nig.) Ltd (2006) 8 NWLR Pt.983 Pg.585.

The Appellant stopped paying because of the purported directives from National Pension Commission Exhibit D3. However after the judgment, the Appellant brought a motion to vary the order of court as to the sum remaining. The Appellant had paid the sum of N101, 249,781 92 to the Respondent. Also the AIICO Pensions Ltd had paid another N100, 000,000.00 after the judgment was delivered.

The Appellant also argued in its brief that the repayment schedule was frustrated because of Exhibit D3. Counsel argued that the repayment schedule couldn’t have been frustrated by Exhibit D3 since the relationship under Exhibits C1 and C3 had been terminated in 2004. There was therefore no Pension Scheme existing at the time of the directive in Exhibit D3.

Counsel therefore urged the court to discountenance the arguments of the Appellant and hold that the lower court was right in entering judgment for the Respondent.
The Appellant had submitted that the trial judge did not evaluate the evidence properly and that the trial judge did not assess Exhibits C7 and D3 properly.

Exhibit C7 is the repayment schedule mutually reached by the parties. The Appellant had paid about five (5) quarterly installments to the Respondent. The trial judge held as follows.

“I hold the view that the Claimant is not caught by the directive of the National Pension Commission which only took effect from 2nd October, 2006, I find from the evidence of CW1 that as at the time of the directive five installment payments have been made in line with exhibit C7 which shows the repayment schedule of balance and interest due to the Claimant on a quarterly basis from 1st January, 2005 – 1st July, 2007”.

Exhibit D3 was a letter written by the National Pension Commission on 29th September, 2006. I will recap the letter for ease of Reference.

29th September, 2008

The Managing Director
AIICO Insurance Plc
AII.CO Plaza
Plot Pc12, Afribank Street
Victoria Island
P.O Box 2577
Logos

Dear Sir,

TRANSFER OF PENSION ASSETS TO A PENSION FUND CUSTODIAN

You will recall that one of the conditions for issuing AIICO Pensions Limited a pension fund administrator licence was that all pension assets managed by your company would be transferred to a pension fund custodian.

As you are aware, the Commission has now approved a pension fund custodian (PFC) appointed by AIICO Pensions Limited and therefore requires that you take urgent steps to transfer all pension assets in your possession to the appointed PFC. To this end, you are required, with effect from 2nd October, 2006 to suspend all forms of repayment in respect of the staff retirement benefit schemes hitherto managed by your company until the transfer is effected. Subsequent payments in respect of the schemes would be made in favour of the beneficiaries through AIICO Pensions Limited and the PFC.

Kindly forward to the Commission, details of all payments made so far, detailing the organization, total amount paid and date of payment, attaching photocopies of the payment instruments. Also, kindly disclose any future repayment arrangements made with any of your clients in this regard. Your submission should reach the Commission not later than one week from the date of this letter.

Thank you.

Yours sincerely,
SIGNED

G.E. USORO (MRS)
HEAD, POLICY & REGULATION DEPARTMENT

A glossary look at this letter will show the salient aspects of this letter which is;

“To this end, you are required, with effect from 2nd October, 2006 to suspend all forms of repayment in respect of the staff retirement benefit schemes hitherto managed by your company until the transfer is effected. Subsequent payments in respect of the schemes would be made in favour of the beneficiaries through AIICO Pensions Limited and the PFC.

There was no longer any staff retirement benefit schemes between the parties as of 2nd October, 2006. However, the National Pensions Commission recognized that, the Appellant might have other transaction not covered by Pension Schemes. The Commission authorized the Appellant to give details of all payments made so far. This category is where the Respondent would have fallen in. The Appellant should have given details of what it had paid to the Respondent and stated what is remaining.

The Appellant metamorphosed into AIICO Pensions Ltd and was issued license for that.

The contract of repayment of the debt cannot be frustrated. AIICO was given license to continue with Repayments still owed only with an order that the amounts paid will be disclosed. The amount still outstanding should also be communicated to the Commission. This is to ensure that depositors would not lose their funds. The same thing the Commission was trying to forestall is the same thing the Appellant wanted to perpetrate, i.e. misappropriation of pension funds.

The Appellant is owing, it must pay its indebtedness. Assuming the Appellant goes into receivership, the Company must take care of the Appellants debts.

In this case, the Appellant metamorphosed into AIICO Pensions Ltd. How can it say that the contract was frustrated by legislation. The legislation took care of this type of situation.

The Appellant did not show to the court where it wrote about the debt owed to the Respondent. The new company AIICO Pensions Ltd is willing to pay its indebtedness as they had paid N100, 000,000.00 after judgment had been delivered.

The contract of Repayment is not frustrated as there is a body licensed to take over the management of pension schemes and funds in their custody as the legislation came into force. The Commission had given AIICO Pensions Ltd and First Pension Custodian, the power to pay all outstanding debts to owners of such policies and funds. The Commission only placed a caveat that all payments made must be documented and sent to it. So also with the indebtedness still left outstanding and how the Appellant intended to repay the outstanding.

The Commission never intended that the Appellant would not pay its debts under the guise of frustration. The contract for repayment was therefore not frustrated. The Respondent is entitled to be repaid the amount still outstanding to it.

The learned trial Judge properly appraised the evidence placed before her. She assessed Exhibits C1 and C3 the Pension Policy between the parties. The learned trial Judge also recognized that C5 terminated the contract between the parties. Exhibit C7 the repayment schedule of the parties was also appreciated. Exhibit D3 and D4 were assessed and the learned trial Judge found as a fact that though the National Pension Commission had stopped payments, but recognized the existence of institutions like the Respondent i.e. institutions with funds in the custody of the Appellant. The Commission recognized that the transactions existed before the legislation and gave the terms of repayment clearly in their letters Exhibits D3 and D4.

I therefore hold that the trial Judge properly evaluated the evidence placed before her. The primary duty of a trial Judge is to evaluate evidence and ascribe probative value to it. Where a trial Judge has done this, the Appellate court has no business in substituting its views for its own. I do not intend to upturn the evaluation of the trial Judge. I hold that the evaluation of the evidence by the trial Judge is correct.

This issue is also resolved against the Appellant. The three issues articulated by the Appellant have all been resolved against it.

This appeal is unmeritorious and therefore dismissed. I affirm the judgment of the trial court and all the orders contained therein.

The cost of this appeal is assessed at N50,000.00 against the Appellant in favour of the Respondent.

SAMUEL CHUKWUDUMEBI OSEJI, J.C.A.: My Lord Ndukwe-Anyanwu JCA has afforded me the opportunity of reading before now, the draft of the lead judgment just delivered.
I am in complete agreement with the reasoning and conclusion contained therein and for the same cogent reasons articulated in the lead judgment which I adopt as mine, I also hold that this appeal lacks merit and it is hereby dismissed.

The judgment of the High court of Lagos State delivered on 14th December, 2010 is hereby affirmed.

I abide by the consequential orders made in the lead judgment including that of costs.

JAMILU YAMMAMA TUKUR, J.C.A.: I have read a draft of the lead judgment delivered by my learned brother, Ndukwe-Anyanwu JCA before today.

I agree that the appeal is unmeritorious and it is also dismissed by me. I abide by the consequential orders in the lead judgment including the order as to costs.

Appearances

O. Oladele with O. Osinowo and K. Padonu (Miss)For Appellant

AND

Chief J.A. Akinola with N. Isimoya (Miss)For Respondent