CHIEF EUGENE ONYECHI ERIOBU & ANOR v. FIRST CITY FINANCE COMPANY LTD
In The Court of Appeal of Nigeria
On Thursday, the 4th day of July, 2002
GEORGE ADESOLA OGUNTADE Justice of The Court of Appeal of Nigeria
PIUS OLAYIWOLA ADEREMI Justice of The Court of Appeal of Nigeria
CHRISTOPHER MITCHELL CHUKWUMAH-ENEH Justice of The Court of Appeal of Nigeria
- CHIEF EUGENE ONYECHI ERIOBU
2. EUGENE AND SONS MOTORS LTD Appellant(s)
- O. Aderemi, J.C.A (Delivering the Leading Judgment): The appeal here is against the decision contained in the ruling of High Court of Lagos State holden at Lagos (Coram Marsh J) delivered on 9th February 1999. Before that court, the respondent claimed against the appellants as defendants jointly and severally in the court below the sum of N766,663.88 being the debt owed to the plaintiff/respondent as at 21st October 1996 arising from loan facilities granted to the defendants/appellants for the purpose of importation of assorted spare parts of Volvo Motor Vehicles in accordance with Contract Finance Agreement No. CF/406/91 of 15th August 1991 entered into by the plaintiff/respondent and the defendants/appellants and subsequently amended at the instance of the defendants/appellants by extending the tenor of the facility reducing the rate of interest applied to the facility and increasing the rate of fixed term deposit of the 1st defendant. The claim was engrossed in a specially indorsed writ of summons with a statement of claim sailed to have been filed by the plaintiff/respondent while the defendants/appellants admitted the service of the specially indorsed writ of summons on them, they denied the service of the statement of claim on them. The defendants/appellants thereupon entered a conditional appearance and filed a counter-affidavit challenging the competence of the proceedings and together with the exhibits attached thereto, they claimed to have raised a defence on the merit. The plaintiff/respondent had on 10/3/98 filed summons for judgment. The defendants/appellants entered a conditional Memorandum of Appearance dated 30th March, 1998 and filed the counter-affidavit afore-mentioned on the 9th of April 1998. The plaintiff/respondent in reaction to the process filed by the defendants/appellants filed a further affidavit dated 17th April 1998 and a second further affidavit dated 8th May, 1998. The learned trial judge in a considered ruling delivered on the 9th of February 1999 entered judgment in favour of the plaintiff/respondent against the defendants/appellants jointly and severally in the sum of N566,663.88 plus interest at the rate of 26% per annum till the whole judgment debt is liquidated.
Being dissatisfied with the said decision the defendants/appellants, as I have earlier said, appealed therefrom to this court upon a Notice of Appeal that carries three grounds. Distilled from these grounds of appeal are two issues which as set out in the appellants’ brief of argument are in the following terms:-
(1) Whether the learned trial judge was entitled to proceed with the hearing of the summons for judgment in the face of the obvious irregularities in the procedure adopted by the plaintiff/respondent, in particular, the writ of summons was endorsed with “particulars of claim” instead of with a statement of claim and that the defendants have not entered appearance when the summons was filed.
(2) Whether or not the appellants have by their counter-affidavit disclosed a prima facie, defence to the plaintiffs’ claim or disclose such facts as may be deemed sufficient to entitle them to leave to defend the action.
The respondents also identified two issues for determination which as contained in their brief of argument, are as follows:-
(1) Whether specially indorsed Writ of Summons (i.e. the Writ of Summons specially indorsed with the statement of claim) requires the filing of an accompanying statement of claim to the specially indorsed Writ of Summons.
(2) Whether respondents’ summons for judgment in the court below under Order 11 proceedings renders the proceedings in the court below leading to the ruling dated 9th February, 1999 (i.e. the final decision appealed against herein) a nullity having regard to:
(i) Conditional Memorandum of Appearance filed by the appellants in the court below without filing an application to set aside Respondent’s Writ of Summons (or service thereof) or summons for judgment aforesaid
(ii) Counter-affidavit dated 9th April 1998 filed by the appellants in the court below against respondent’s summons for judgment
(iii) Ensuring that substantial justice was done in the matter than allowing technicality to prevent deciding the matter on merit.
(iv) Overwhelming documentary evidence in support of respondent’s summons for judgment in the court below, not challenged, not controverted and not disputed.
When this matter came before us on the 17th of April, 2002, Mr. Ibegbu, learned counsel for the appellant adopted the appellants’ brief filed on the 20th of September 2000 and urged that the appeal be allowed. Chief Tagbo learned counsel for the respondent for his part, adopted his client’s brief filed on 8th of February 2002 and urged that the appeal be dismissed.
In my approach to this appeal, I intend to take issue No. 1 on each of the briefs of the appellants and the respondent together,.
Thereafter I shall take issue No 2 on each of the said briefs together.
On issue No 1, the appellants, in their brief of argument, had submitted that on the proper application of Order 11 Rule 1 of the Lagos High Court (Civil Procedure) Rules 1994, a plaintiff can apply for summary judgment only upon the fulfillment of the following conditions:
(1) That he has specially indorsed his writ of summons which must be accompanied by a statement of claim.
(2) That the defendant has unconditionally entered appearance to the action: and
(3) That the statement of claim must have been served on the defendant
reliance was placed on the decision in U.T.C. (NIG.) LTD vs PAMOTEI (1989)2 NWLR (pt.103)244. A breach of any of the requirements of Order 11 Rule 1 is a fundamental defect which goes to the competence and jurisdiction of the court to hear arguments on the summons for judgment and determine same, he further submitted while citing in support of this submission the decision in MADUKOLU VS NKEMDILIM (1962) 2 SCNLR 341 and SKENCONSULT NIG. LTD VS UKEY (1981) Vol. 12 N.S.C.C. 1. The service of a statement of claim, it was submitted, is a condition precedent to the validity of an application by the plaintiff under Order 11. So also, it was contended, that the entering of an unconditional appearance by the defendant is a sine qua non to the filing of an application for summary judgment. Having filed a conditional appearance, they further argued, the defendant reserves the right to have the judgment set aside.
In arguing issue No 1 on the respondent’s brief which issue is in pari materia with issue No 1 on the appellants’ brief, the respondent through its brief, submitted that the statement of claim endorsed on the plaintiff’s Writ of Summons is one that is valid, in law: reliance was placed on the decision in CHIEF HAROLD SODIPO VS LEMNINKAINEN OY (1986) 1 NWLR (pt 15) 220.
I shall start the consideration of this common issue by first reproducing the provisions of Order 11 Rule 11 of the High Court of Lagos State (Civil Procedure) Rules 1994, which provides:
(a) Where the defendant appears to a writ of summons specially indorsed with or accompanied by a statement of claim under Order 4 Rule 4, the plaintiff may on affidavit made by himself or by, any other person who can swear positively to the facts, verifying the cause of action and the amount claimed (if any liquidated sum, is claimed) and stating that in his belief there is no defence to the action except as to the amount of damages claimed, if any, apply to a Judge in Chambers for liberty to enter judgment for such remedy or relief as upon the statement of claim the plaintiff may be entitled to. The Judge, thereupon unless the defendant shall satisfy him that he has a good defence to the action on the merits or shall disclose such facts as may be deemed sufficient to entitle him to defend the action generally, may make an order empowering the plaintiff to enter such judgment as may be just, having regard to the nature of the remedy or relief claimed.
When the above provision is read along with Order 4 Rule 4, a plaintiff who is asking the judge to enter judgment in his favour on a Writ specially indorsed to be entitled, must fulfil the following conditions:
(1) He must specially insert on the writ of summons, before it is served, such indorsement that will show in a concise form the ground of his complaint and a statement of his claim, relief or remedy to which he may consider himself to be entitled.
(2) He shall also, either personally or through another person, swear to an affidavit verifying the cause of action and the amount claimed and stating that, in his belief, these is no defence to the action except as to the amount of damages claimed.
(3) If the court is satisfied that the claim is for a specified debt or liquidated demand and there are good grounds for believing that there is no defence to the claim, the court shall enter the suit for hearing on the undefended list and the Writ is accordingly marked.
A defendant, served with the above process (specially indorsed writ of summons) who does not admit the claim of the plaintiff and proposes to defend it shall manifest that intention by:
(1) filing an affidavit which discloses a good defence on the merits.
(2) of course the pre-condition by any defendant served with a writ of summons, or originating summons or specially indorsed writ, who intends to be properly in the case must be fulfiled by such a defendant – that is filing of an appearance or a conditional appearance as may be deemed proper.
I have read very carefully the provision set out above dealing with actions on the Undefended List, the filling of a “statement of claim” in the real meaning of that term and the service of same is not a condition-precedent to the defendant reacting to a specially indorsed writ of summons served on him. All the rule enjoins is that such an action should be commenced by a writ which is accompanied by an affidavit; the writ bearing in a concise form the ground of his complaint and a statement of his claim as opposed to technical process statement of claim, while the affidavit must contain depositions verifying the cause of action and the amount claimed; of course, a deposition that there is no defence to the action is essential. I derive support from the decision of the Supreme Court in OLUBUSOLA STORES VS STANDARD BANK (1975)1 ALL N.L.R. (pt.1)125 where G.B.A. Coker J.S.C. in interpreting the provisions of Order 3 Rule 9 of the Old Rules of the Supreme Court (Cap 211 in the 1948 Edition of the Laws of Nigeria, then applicable in the High Court of Lagos State and which are in pari material with order 11 Rule 1 observered at page 128 and I quote:
“We point out that the relevant rules dealing with actions on the Undefended List are very often employed but as well equally so often misapplied.
The Rule prescribes clearly that an action which is meant to be on the Undefended List should be commenced by a Writ but such writ should be accompanied by an affidavit setting out the facts of the case and other matters described in that Rule which would satisfy the court to enter the suit for hearing in what shall be called the Undefended List. After the writ has been so marked, the usual copy for service would be delivered to the defendant.”
In AZUMI VS PAN-AFRICAN BANK LTD (1996) 8 NWLR (pt 467)462, this court (Kaduna Division) put it beyond any doubt that under the Undefended List Procedure, where liquidated sum and interest are claimed a plaintiff must state either on the writ of summons or the supporting affidavit the concise facts. upon which the claim rests.
Our attention has been drawn to the Supreme Court Practice (White Book) 1998 for guidance on the application of our own Rules relating to the Undefended List. I think that approach does not find support in our judicial decisions. In BANK OF THE NORTH LTD VS INTRA BANK S.A. (1969)1 ALL N.L.R. 91, the Supreme Court per ADEMOLA – C.J.N. observed at page 97:
“Thus, we have come to the conclusion that the rules governing the practice known as Undefended List must be considered in their own isolation and English practice and rules must not be brought in.”
From the authorities I have reviewed above, I do not have any doubt in my mind that all the rule enjoins a plaintiff who has brought his action under the Undefended List to do is to serve on the defendant a specially indorsed writ which contains a concise statement of his claim plus an affidavit containing facts which will convince the court to enter the suit for hearing: not a statement of claim in the technical sense of that term. If I may refer to the practice in England by way of comparison not as a guide for our own rules are specially designed for us, it is settled there that a statement of claim so indorsed on the writ meant for the Undefended List, is the statement of claim in the action and no further statement of claim can be served except by way of amendment see ANLABY VS PRAETORIUS (1888)20 Q.B.D. 764.
Following all I have been saying, in answering Issue No 1 on the appellant’s brief I first say that there are no irregularities in the procedure adopted by the plaintiff/respondent and consequently answer that issue in the affirmative. As a corollary, I answer issue No 1 in the respondent’s brief in the negative.
I now move on to issue No 2 on each of the briefs.
Before I embark on this exercise,
I wish to observe that a careful study of the provisions dealing with action on the Undefended List leaves me in no doubt that they are technical in nature and they are so created in that way in order to ensure that by demanding from the plaintiff strict compliance with their provisions injustice will be avoided to a defendant whose right to defend the action is some what circumscribed. If those provisions are complied with, the defendant need not suffer any prejudice in his defence if he himself and on his part has complied with the part of the provisions that affects him. As I have said above strict compliance with the afore-mentioned provisions by both the plaintiff and the defendant is what the justice of proceedings under the Undefended List commands.A defendant upon whom is served the specially indorsed writ and who does not admit the plaintiff’s claim shall through an affidavit, manifest a good defence on the merits. Having shown that intention to defend, unless the affidavit evidence filed by him does not disclose a defence which merits a trial at full hearing, the undefended list procedure cannot be justifiable pursued thereafter. However, the nature of the merit looked-for in such an affidavit is one which casts doubt on the case of the plaintiff see (1) JIPREZE VS OKONKWO (1987) 3 NWLR (pt 62) (2) U.B.A. PLC VS MODE (NIG) LTD (2001) 13 NWLR (pt 730) 335 – 737. A general statement in the affidavit of merit that the defendant has a good defence to the action” will not satisfy the requirement of the law.
I need to add that pleadings are never ordered in proceedings under the Undefended List. An affidavit showing a defence on the merit is the only thing that can entitle a defendant, faced with the procedure, to be opportuned to defend the case. In S.C.D.C.O LTD VS KATONECREST LTD (1986) 5 NWLR (pt 44)791 it was held that where a defendant files a statement of defence together with a verifying affidavit all showing a defence on the merit, the defendant will be regarded as having complied with the provisions and the case will be removed off the Undefended List. I must not fail to say that a defence will be said to be on the merit when it is predicated on a legal defence properly founded by the defendant against the substance of the plaintiff’s claim as opposed to mere matters of procedure practice or forum see (1) ADEBISI MACGREGOR ASSOCIATES LTD VS NIGERIA MERCHANT BANK LTD (1996)2 NWLR (pt 431)378 and (2) PAUL CARDOSO VS JOHN BANKOLE DANIEL & ORS (1986) 2 NWLR (pt 20)1.
Having reviewed the legal principles, I shall now proceed to examine the counter-affidavit evidence to see whether the defendants/appellants have put up a defence on the merit. The relevant paragraphs of the counter affidavit are 9, 13, 14, 15, 16, 17, 18 and 19 which I here under reproduce.
That I admit that in August 1991 the plaintiff lent to me the sum of N350,000.00 only and deny that the plaintiff lent me further sum of N500,000.00 as alleged.
That the plaintiff wrongfully procured and induced the defendants to enter into fixed deposit scheme which infact was adverse to the defendants’ interest.
That the defendants have repaid to the plaintiff the said loan of N350,000.00 together with interest thereon and there is no sum due or owing by the defendants.
That between the years 1991 and 1997 the defendants have paid to the plaintiff by way of repayment of the said loan and interest the total sum of N894,394.00. Attached and marked Exhibit D is a copy of the schedule of payments made by the defendants.
That the rates of interest charged in the said transactions after the first year were harsh, unconscionable, exceeded the contractual rate and were in excess of the maximum interest rate of 219% per annum prescribed by the Central Bank of Nigeria from 1st January, 1994.
That the alleged admission made by me to the plaintiff in Exhibit “17” attached to the supporting affidavit do not take into account all the repayments made in 1995, 1996 and 1997 and therefore the alleged admission has been overtaken by the subsequent payments made.
That the amount claimed against the defendants does not take into account the repayments referred to in Exhibit D of paragraph 15 above.
That the amount fairly due from the defendants in respect of the principal loan and interest under the amended agreement is far below the amount already paid by the defendant to the plaintiff. Attached and marked Exhibit E is a copy of the true Statement of Account of the transactions according to the amended agreement.
I have had a close study of the affidavit, further affidavit and second further affidavit and related same to the counter-affidavit it is my view that paragraphs 17, 18 and 19 of the counter-affidavit raise some dust over the geniuness of the claim of the plaintiff/respondent.
Indeed, there has arisen conflict between the printed evidence of the plaintiff/respondent and of the defendants/appellants which defies any resolution without evidence being led by both sides.
I cannot therefore resist saying that the defendants’/appellants’ counter-affidavit raises triable issues. Faced with the conflict, the trial judge, with respect, was in error to have held that the defence put up is a sham calculated to delay and frustrate the plaintiff/respondent. On the contrary, I hold the view that triable issues have arisen by the depositions of the defendants/appellants. I therefore resolve issue No 2 on the appellants’ brief in their favour while I resolve issue No 2 on the respondent’s brief against them.
In sum, I find merit in the appeal which is hereby allowed. The judgment of the court below given on the 9th of February, 1999 is consequently, set aside.
G. A. OGUNTADE, J.C.A.: I read before now a copy of the lead judgment by my learned brother Aderemi J.C.A. I agree with his reasoning and conclusion. I am also of the view that the counter-affidavit filed by the appellants in reaction to the Respondents claim under the summary judgment procedure contained sufficient material to enable the lower court grant the appellants the leave to defend the suit, I would also allow this appeal with N5,000.00 costs in favour of the appellants.
CHRISTOPHER MITCHELL CHUKWUMA-ENEH, J.C.A.: I have before now perused through the judgment of my learned brother Aderemi, JCA just delivered and I agree that the appeal being meritorious the judgment of the court below of 9/2/99 be set aside in its entirely.
I endorse all the consequential orders contained in the judgment.
Mr. J. M. Ibegbu with him Mr. E. E. EzeigboFor Appellant
Chief A. C. Tagbo with him Mr. Donatius ObioraFor Respondent