ASUQUO v. ACCESS BANK
(2022)LCN/16283(CA)
In the Court of Appeal
(CALABAR JUDICIAL DIVISION)
On Friday, July 01, 2022
CA/C/390/2018
Before Our Lordships:
Raphael Chikwe Agbo Justice of the Court of Appeal
Muhammed Lawal Shuaibu Justice of the Court of Appeal
Balkisu Bello Aliyu Justice of the Court of Appeal
Between
MR. UDEME ANIEFIOK ASUQUO APPELANT(S)
And
ACCESS BANK PLC RESPONDENT(S)
RATIO:
THE POSITION OF LAW ON ALLOTMENT OF SHARES
By the combined effect of Sections 125 and 126 of the Companies and Allied Matters Act, Cap. C20 Law 2004, a person wishing to purchase shares of a company shall submit a written application indicating the number of shares required and upon receipt of an application, a company shall where it accepts the application, make an allotment to the applicant within 42 days after allotment and notify the applicant the number of shares allotted to him. Thus, an allotment of shares made and notified to an applicant shall be acceptable by the company of the offer by the applicant to purchase its shares and the contract takes effect on the date on which the allotment is made by the company.
The provisions of Section 91 (1) of the Investment and Securities Act, Cap. 124 of the LFN, 2004 on the other hand deals with application of monies paid prior to allotment of shares. And Section 96 (1) – (3) thereof relates to return of surplus monies to subscribers. PER SHUAIBU, J.CA.
THE JURISDICTION OF THE FEDERAL HIGH COURT ON DISPUTES BETWEEN PARTIES OVER THE OPERATION OF THE COMPANIES AND ALLIED MATTERS ACT
The law is settled that any dispute between parties over the operation of the Companies and Applied Matters Act aforesaid, comes within the exclusive jurisdiction of the Federal High Court by virtue of Section 251 (1) (e) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended).
Furthermore, matters pertaining to investment and capital market operations fall within the jurisdictional ambit of the Investment and Securities Tribunal in accordance with Section 274 of the Investment and Securities Act. PER SHUAIBU, J.CA.
WHETHER OR NOT IT IS THE CLAIM OF A PLAINTIFF THAT DETERMINES THE JURISDICTION OF THE TRIAL COURT
The law is also settled that it is the claim of the plaintiff that determines the jurisdiction of the trial Court. In other words, it is the claim of the plaintiff that would be looked into or examined to determine jurisdiction. See ADEYEMI V OPEYORI (1976) 9-10 SC 31 at 49 and AKINTOLARIN V AKINOLA (1994)3 NWLR (prt. 335) 659 at 674. PER SHUAIBU, J.CA.
THE POSITION OF LAW FOR A CONTRACT OR AGREEMENT TO EXIST
The next germane question is whether the relationship between the appellant and the respondent translates into a binding contract. For a contract or an agreement to exist, there must be an offer made by one party to another and an acceptance of the offer by the party to whom the offer is made. In other words, for a contract to come into existence, there must be a clear and precise offer made by an offeror and unconditional acceptance of the terms of the offer by the offeree. See SAPARA V UNIVERSITY COLLEGE HOSPITAL BOARD OF MANAGEMENT (1988) 4 NWLR (prt.86) 58; TSOKWA MOTORS NIGERIA LTD V UNION BANK NIGERIA (1996) 9 NWLR (prt.471) 129 and NATIONAL REVENUE MOBILIZATION ALLOCATION AND FISCAL COMMISSION V JOHNSON (2009) 2 NWLR (prt.1656) 247. PER SHUAIBU, J.CA.
THE POSITION OF LAW ON A CLAIM FOR PRE-JUDGEMENT INTEREST
A claim for pre-judgment interest is one which is calculated on a principal sum in a judgment at the pre-judgment interest rate from the date the cause of action accrued to the judgment date. The pre-judgment interest claimed by the plaintiff must therefore be pleaded and strictly proved. In other words, pre-judgment interest is awarded where there is an agreement for payment of interest or under merchantile Custom or under a Principle of equity, such as breach of fiduciary duty. See FOUANI (NIG) LTD V IDOKO (2020) 2 NWLR (prt.1709) 401. In U.B.N. PLC V AWMAR PROPERTIES LTD (2018) 10 NWLR (prt. 1626) 14 at 84, the Supreme Court has held that if in a case of a commercial nature, money should have been paid sometimes ago, but was not paid, it ought to carry interest. Thus, the person deprived of money must be compensated. The basis of the award of interest is that the defendant has kept the plaintiff out of his money and the defendant has had the use of it to himself.
The apex Court has also held in the recent case of SKYMIT MOTORS LTD V U.B.N. PLC (2021)5 NWLR (prt. 1768) 123, at 144 that pre-judgment interest is successfully claimed by a plaintiff who pleads it, and support it with facts which show that he is entitled to it, either by statute, contract between the parties, or breach of fiduciary relationship. Furthermore, the plaintiff is expected to lead evidence at the trial in proof of the facts pleaded. Thus, where there is no evidence in proof of the facts, the pleadings are considered abandoned. PER SHUAIBU, J.CA.
MUHAMMED LAWAL SHUAIBU, J.C.A. (Delivering the Leading Judgment): This appeal is against the judgment of the High Court of Cross River State sitting at Calabar, delivered by Hon. Justice Ayade Emmanuel Ayade on 26th day of April, 2018 entering judgment partly in favour of the appellant.
The appellant as claimant at the lower Court took out a writ of summons and statement of claim respectively filed on 30/8/2016 and claimed against the defendant, now respondent as follows:-
1. An Order directing the defendant to refund to the claimant forthwith the sum of N149,000.00 (One Hundred and Forty-Nine Thousand Naira only) being the sum paid to and received by the defendant over 9 (Nine) years ago for shares which were not issued to him.
2. An Order directing the defendant to pay to the claimant 10% monthly interest on the invested sum of N149,000.00 from 11th September, 2007 till judgment is delivered in this suit, and thereafter till the judgment is liquidated.
3. Award of special damages of N300,000.00 (Three Hundred Thousand Naira only) being solicitors’ professional/filing fees paid by the claimant to facilitate the institution and prosecution of this suit.
4. Award of N10,000,000.00 (Ten Million Naira only) general damages against the defendant for unlawfully withholding on to the claimant’s money.
Upon consideration of the cases of the parties, the trial Court, in its judgment delivered on 26th April, 2018, found that the consideration for which the sum of N149,000.00 was paid by the claimant has completely failed and that he was entitled to claim the money back from the defendant. Nonetheless, the Court found that the claimant was not entitled to interest accruing from the invested sum because there was no full compliance with the terms of the agreement by the parties. Finally, the Court declined to entertain the claim for solicitors’ fees being claimed.
The appellant irked by the judgment of the lower Court and has taken this appeal through a notice of appeal filed on 13/6/2018 containing three grounds of appeal, located on pages 142–144 of the record of appeal.
At the hearing of the appeal on 2/6/22, learned counsel for the appellant, Paul O. Ebiala, Esq. adopted and relied on the appellant’s brief of argument filed on 9/11/2018 but deemed as properly filed on 5/3/2019 in urging the Court to allow the appeal. In it, counsel formulated three issues for the determination of the appeal as follows:
1. Whether in the circumstances of this case, there was a valid contract between the appellant and the respondent?
2. Whether the appellant is not entitled to interest on the money placed on deposit with the respondent for the purchase of shares, which were not allotted to him for the period the money was held over by the respondent?
3. Whether the legal fees paid by the appellant to his solicitors to prosecute this action of him at the lower Court do not fall under the category of special damages to be claimed from the respondent by the appellant?
Learned respondent’s counsel, Barth A. Izato Esq. adopted and relied on the respondent’s brief of argument filed on 8/5/2019 and deemed as properly filed on 9/5/2019 wherein he adopts the three issues formulated by the appellant.
Before delving into the arguments of counsel in respect of the above formulations, it is pertinent to restate the facts of the case albeit, briefly. On 11/9/2007, appellant applied for 10,000 shares in the respondent’s 2007 Public Officer and paid the sum of N149,000.00 for the shares. When the shares were not allotted, appellant applied for the return of his money, which request the respondent refused to honour. After several fruitless visits to the respondent’s branch in Calabar in 2008 and 2009, appellant was constrained to retain the services of a solicitor and paid the sum of N300,000.00 being solicitors’ fees to recover his money with accrued interest.
In arguing issue one, learned counsel for the appellant referred copiously to the provisions of Sections 125 and 126 of the Company and Allied Matters Act, Cap C20, Laws of the Federation of Nigeria, 2004 to contend that since the appellant’s offer to purchase the respondent’s shares was not accepted by the latter by way of allotment of shares to him, there was therefore no valid, enforceable contract between the appellant and the respondent. He submitted that the contract for the sale and purchase of shares of a company is concluded and validly entered when the company accepts an application and allots the shares to the applicant. He referred to TRANSNATIONAL CORPORATION OF NIGERIA PLC V. MR. & MRS EGBE & ANOR (2017) LPELR-42243(CA) in urging this Court to hold that the trial Court erred in holding that a formal contract has crystallized between the parties herein.
In his reaction to the above, learned counsel for the respondent submitted that there was a contract between the appellant and the respondent because by the nature of the appellant’s reliefs before the lower Court, same was rooted on money had and received which is an integral part of the law of contract.
Counsel submitted further that actions by investors to Capital Market Operators founded on the infraction of the provisions of the Investment and Securities Act, 2007 as it applies to the public offer and sale of securities and Invitation to the public for acquisition and/or allotment of shares or Securities are enforceable only in the Investment and Securities Tribunal established under Section 274 of the Investments and Securities Act, 2007 and not the State High Court. He relied on Sections 91 (1) and 96 (1) – (3) of the Investment and Securities Act to contend that the appellant’s action was not founded on the infractions of the provisions of the Companies and Allied Matters Act.
I have already set out the reliefs of the appellant at the lower Court and the central issue arising for consideration on issue one above is whether the transaction between the parties crystallized into a valid and subsisting contract. Before fishing out for this answer, it is pertinent to first of all ascertain the nature of the relationship with a view of knowing the applicable law regulating relationship. While the appellant argued that the transaction between the parties at the lower was regulated by the Companies and Allied Matters Act, the respondent contend otherwise, insisting that the said transaction was within the purview of the Investment and Securities Act.
By the combined effect of Sections 125 and 126 of the Companies and Allied Matters Act, Cap. C20 Law 2004, a person wishing to purchase shares of a company shall submit a written application indicating the number of shares required and upon receipt of an application, a company shall where it accepts the application, make an allotment to the applicant within 42 days after allotment and notify the applicant the number of shares allotted to him. Thus, an allotment of shares made and notified to an applicant shall be acceptable by the company of the offer by the applicant to purchase its shares and the contract takes effect on the date on which the allotment is made by the company.
The provisions of Section 91 (1) of the Investment and Securities Act, Cap. 124 of the LFN, 2004 on the other hand deals with application of monies paid prior to allotment of shares. And Section 96 (1) – (3) thereof relates to return of surplus monies to subscribers.
The law is settled that any dispute between parties over the operation of the Companies and Applied Matters Act aforesaid, comes within the exclusive jurisdiction of the Federal High Court by virtue of Section 251 (1) (e) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended).
Furthermore, matters pertaining to investment and capital market operations fall within the jurisdictional ambit of the Investment and Securities Tribunal in accordance with Section 274 of the Investment and Securities Act.
The law is also settled that it is the claim of the plaintiff that determines the jurisdiction of the trial Court. In other words, it is the claim of the plaintiff that would be looked into or examined to determine jurisdiction. See ADEYEMI V OPEYORI (1976) 9-10 SC 31 at 49 and AKINTOLARIN V AKINOLA (1994)3 NWLR (prt. 335) 659 at 674.
In paragraphs 5-11 of the statement of claim on pages 3-4 of the record, appellant averred as follows:-
5. The claimant states that in response to the public offer, he applied for 10,000 Shares and paid the sum of N149,000.00 (One Hundred and Forty-Nine Thousand Naira only) into the account provided by the defendant on the 17th day of September, 2007. The Application Form and Deposit Slip are hereby pleaded and shall be relied upon at the trial.
6. The claimant states further that he complied with all conditions stated on the application form.
7. The claimant avers that 8 (Eight) years and seven months after, he has neither been issued with a share certificate indicating that he has been offered the number of shares he applied for or smaller units nor has the defendant refunded the amount invested to him.
8. The claimant avers further that when he did not hear from the defendant within a reasonable period after he made the application, he paid several visits to the defendant’s Calabar Branch where he made the payment demanding to know the status of his application but all to no avail.
9. The claimant state that frustrated, he consulted the Law Firm of Paul Ebiala & Associates to communicate with the defendant on the matter, and in line with his instructions, a letter dated the 28th day of May, 2012 was sent to the defendant but there was no response from the defendant. The said solicitor’s letter to the defendant is hereby pleaded.
10. The claimant avers that he made that investment with the defendant with a view to making profit, but after depleting his business capital to make the purchase he has neither received the expected profit nor recover his business capital from the defendant.
11. The claimant avers further that he had no other choice than to instruct his solicitors to file this suit against the defendant for which he paid the solicitors their professional fees. Receipt issued by the Law Firm of PAUL EBIALA & ASSOCIATES for the said payment is hereby pleaded.
From the above and also in view of the reliefs claimed, the appellant’s claims were neither founded on the operation of the Companies and Allied Matters Act nor on the acquisition and/or allotment of shares itself. Rather, the principal claim was simply for the refund of the sum of N149,000.00 paid to the respondent with 10% accrued interest. Thus, the appellant’s action was properly before the lower Court and also been regulated by the relevant Rules of Court.
The next germane question is whether the relationship between the appellant and the respondent translates into a binding contract. For a contract or an agreement to exist, there must be an offer made by one party to another and an acceptance of the offer by the party to whom the offer is made. In other words, for a contract to come into existence, there must be a clear and precise offer made by an offeror and unconditional acceptance of the terms of the offer by the offeree. See SAPARA V UNIVERSITY COLLEGE HOSPITAL BOARD OF MANAGEMENT (1988) 4 NWLR (prt.86) 58; TSOKWA MOTORS NIGERIA LTD V UNION BANK NIGERIA (1996) 9 NWLR (prt.471) 129 and NATIONAL REVENUE MOBILIZATION ALLOCATION AND FISCAL COMMISSION V JOHNSON (2009) 2 NWLR (prt.1656) 247.
The appellant having conceded on page 109 of the record that he has not complied with the instruction of applying for the shares either by paying by a bank draft or cheque, cannot claim to have consummated a binding contract with the respondent. Likewise the respondent not allotting any shares to the appellant, there was no consensus idem with regards to the essential terms and conditions of the allotment of the shares being applied for. An offer must be clearly accepted in order to crystallize into a contract. In the instant case, the respondent being the offerer did not accept the appellant’s offer either by conduct, words or by document. Therefore, the relationship between the parties did not crystallize into any binding contract. And by merely proving deposit of N149,000.00 with the respondent by the appellant same in my respectful view is not sufficient to create a binding legal relationship. I therefore resolved issue one in favour of the appellant.
On issue two, learned appellant’s counsel submitted that the appellant, whose money was held over but was not allotted the shares he subscribed for, was entitled to interest on the money deposited. He referred to the cases of EKWUNIFE V WAYNE (1989) 5 NWLR (prt. 122) 445 and GARBA V SHEBA INTERNATIONAL (NIG) LTD (2002)1 NWLR (prt.748) 377 to contend that even where the interest is not specifically claimed, the Court can award interest as a consequential order.
On his part, counsel for the respondent submitted that pre-judgment interest is not awarded as a matter of course. Thus, the appellant as claimant must proffer credible evidence to sustain his claim for the pre-judgment interest sought.
It was also submitted by the respondent that the duty to custody application monies and the regulation of the return of monies to subscribers and interest payable thereon is the business of the Investment and Securities Commission and not the Court, also relying on Sections 91 and 96 of the Investment and Securities Act. And the appellant not being a subscriber, cannot hide under the cover of the extant Investments and Securities Act.
Counsel submitted further that the appellant having failed to challenge the lower Court’s reasons for refusing to award interest, the decision on the issue of interest remains sacrosanct.
The main contention here is whether the appellant is entitled to the 10% interest on the sum of N149,000.00 deposited for 10,000.00 shares with the respondent. A claim for pre-judgment interest is one which is calculated on a principal sum in a judgment at the pre-judgment interest rate from the date the cause of action accrued to the judgment date. The pre-judgment interest claimed by the plaintiff must therefore be pleaded and strictly proved. In other words, pre-judgment interest is awarded where there is an agreement for payment of interest or under merchantile Custom or under a Principle of equity, such as breach of fiduciary duty. See FOUANI (NIG) LTD V IDOKO (2020) 2 NWLR (prt.1709) 401. In U.B.N. PLC V AWMAR PROPERTIES LTD (2018) 10 NWLR (prt. 1626) 14 at 84, the Supreme Court has held that if in a case of a commercial nature, money should have been paid sometimes ago, but was not paid, it ought to carry interest. Thus, the person deprived of money must be compensated. The basis of the award of interest is that the defendant has kept the plaintiff out of his money and the defendant has had the use of it to himself.
The apex Court has also held in the recent case of SKYMIT MOTORS LTD V U.B.N. PLC (2021)5 NWLR (prt. 1768) 123, at 144 that pre-judgment interest is successfully claimed by a plaintiff who pleads it, and support it with facts which show that he is entitled to it, either by statute, contract between the parties, or breach of fiduciary relationship. Furthermore, the plaintiff is expected to lead evidence at the trial in proof of the facts pleaded. Thus, where there is no evidence in proof of the facts, the pleadings are considered abandoned.
Arising from the above, the question is, did the appellant place sufficient materials before the trial Court in proof of 10% pre-judgment interest claimed? The appellant no doubt claimed the said pre-judgment interest but he neither pleaded nor led evidence in support of same. In the case of U.B.N. PLC V AWMAR PROPERTIES LTD (Supra), there was undisputable evidence that the sum of N300 Million the respondent obtained from the bank attracts interest. Furthermore, the transaction between the parties is of a commercial nature. The appellant has also kept the respondent out of money while the appellant a bank, has had the use of the money for itself. The same cannot be said as regards the facts in the present case. The appellant herein has admitted not complying with the requirements of procuring the public offer and the lower Court found as a fact that the failure on the part of the appellant to completely comply with the requirement needed of him in the procurement of the public offer was the result of not allotting the shares. Therefore, the appellant can only be entitled to interest accruing from the invested sum where he is in full compliance with the term of the agreement. In the case of GARBA V SHEBA INTL. LTD (Supra) being relied upon by both parties, it was held that where there is no agreement between the parties as to the amount of interest that an investment would attract, it is not possible to regard the respondent’s claim of interest as proved. In his concurring judgment Salami, JCA (as he then was) on page 397 said:-
“The parallel sought to be drawn between the circumstances of the instant appeal and the money placed on deposit for purchase of shares does not avail the respondent.
…Money placed on deposit for purchase of shares is not yet an investment. It is only transformed to an investment after it is converted to shares on the purchase. It is, therefore, alright for money placed on deposit for purchase of shares to attract interest until it is invested. But an investment can only attract profit or dividend if the investment makes profit and not interest because it is being used to trade.”
A corollary to the above, the appellant in the Court below has failed to completely comply with the requirements of the allotment of the respondent’s shares and therefore cannot be described as a subscriber within the meaning of Section 96 of the Investment and Securities Act. Thus, appellant has not pleaded and strictly proved his entitlement to the pre-judgment interest claimed. Issue two is resolved against the appellant.
In respect of issue three, counsel for the appellant submitted that having pleaded the fact that he engaged the services of solicitors to maintain this action, for which he paid them professional fees and obtain receipt, appellant is eminently entitled to claim the cost of litigation relying on the authority in the case of JALBAIT VENTURES (NIG) LTD & ANOR V UNITY BANK PLC (2016) LPELR 41625 (CA).
The respondent’s counsel on the other hand submitted that appellant’s claim for the award of special damages of N300,000.00 being solicitors’ fees paid to facilitate the institution and prosecution of this suit is not sustainable. He referred to NWANJI V COASTAL SERVICES (NIG) LTD (2004)11 NWLR (prt. 885) 552 at 569-570, IHEKWOABA V A.C.B. LTD (1998) 10 NWLR (prt.571) 590 at 610-611 and SUFFOLK PETROLEUM SERVICES LTD V ADNAN MANSOOR NIGERIA LTD & ANOR (2019)2 NWLR (prt.1655)1 at 33 to the effect that it is unethical and affront to public policy to pass the burden of solicitors’ fees to the other party.
The appellant has unarguably pleaded the fact that he engaged the service of Paul Ebiala & Associates and paid them N300,000.00 being solicitors’ fees to maintain and prosecute this action. The main contention is on the sustainability of the said claim. In IHEKWOABA V A.C.B. LTD (supra), this Court per Uwaifo, JCA at pages 610-611, paras H-A said:-
“The issue of damages as an aspect of solicitors’ fee is not one that lends itself to support in this country. There is no system of costs, taxation to get realistic figure. Costs are awarded arbitrarily and certainly usually minimally. I do not therefore see why the appellants will be entitled to general or any damages against the auctioneer or against the mortgagee who engaged him, in the present case, on the ground of solicitors’ costs and by them.”
The above reasoning was subsequently adopted by this Court in the cases of S.P.D.C.N. LTD V OKEH (2018)17 NWLR (prt. 1649) 420 and SUFFOLK PET SERVICES LTD V ADNAN MANSOOR (NIG) LTD (supra) to arrive at the same conclusion that it is an unusual claim and difficult to accept in Nigeria. The uncertainty of solicitor’s fees notwithstanding, same in my view falls within the category of out-of-pocket expenses and loss of earning incurred up to the date of trial. Thus, a recipe of special damages based on estimation by the plaintiff. It is for the same reason that I am more inclined and persuaded with the position of my learned brother, Wambai, JCA in the case of JALBAIT VENTURES NIG LTD & ANOR V UNITY BANK PLC (Supra), that solicitors’ fees should appropriately be claimed as special damages. And being a claim in the nature of special damages, it must be specifically pleaded in a manner that is clear enough to enable the defendant know its origin or nature. Solicitors’ fees must also be proved strictly as the Court is not entitled to make its own estimate on such a claim.
In the instant case, the appellant’s main claim as stated earlier, was for the refund of N149,000.00 wherein he purportedly paid N300,000.00 as solicitors’ fees. Aside from being outrageous, same was clearly based on mere estimates, not supported by proper billing. It was a guess work, which clearly is the antithesis of precise calculation. The learned trial Judge was therefore right to have rejected the appellant’s claim for solicitors’ fees. I also resolve issue three against the appellant.
In the final analysis, this appeal succeeds in part to the extent that there was no binding contract between the parties. However, having resolved the critical issues two and three against the appellant. I hereby dismiss the appeal.
Parties to bear their respective costs.
RAPHAEL CHIKWE AGBO, J.C.A.: I have read in advance, the judgment delivered by my learned brother Shuaibu, JCA and I agree with both the reasoning and conclusion that the appeal be dismissed. I abide by consequential orders contained in the lead judgment.
BALKISU BELLO ALIYU, J.C.A.: I read before today, in draft form the judgment just delivered by my learned brother. M. Shuaibu. JCA. I am in total agreement with him that since the two critical issues to this appeal failed, the appeal lacks merit and should be dismissed. I too dismiss this appeal. I affirm the judgment of the High Court of Cross River State sitting at Calabar that was delivered by Ayande Emmanuel Ayande. J., on the 26th April, 2018 in suit No. HC/387/2018. Parties to bear their costs of the prosecution of this appeal.
Appearances:
N. J. Etok Esq. For Appellant(s)
B. A. Izato Esq. For Respondent(s)
