In The Court of Appeal of Nigeria

On Thursday, the 13th day of June, 2002




GEORGE ADESOLA OGUNTADE Justice of The Court of Appeal of Nigeria

SULEIMAN GALADIMA Justice of The Court of Appeal of Nigeria

PIUS OLAYIWOLA ADEREMI Justice of The Court of Appeal of Nigeria






GALADIMA, J.C.A. (Delivering the Leading Judgment): This is an appeal by the defendant against the ruling of Sahid (J.) of the Lagos State High Court in which judgment was given in favour of the plaintiff (now the respondent) on 11/2/1998. The learned trial Judge had upon the application by way of a specially endorsed writ, entered judgment in the sum of N346,096.87 with interest on the ground that the appellant had no triable defence to the action commenced as a specially endorsed writ.
The claim of the respondent against the appellant was in the following terms:-
The plaintiff’s claim against the defendant is for the sum of N346,096.87 (Three hundred and forty-six thousand and ninety-six naira, eighty-seven kobo) being the principal sum and accumulated interest combined in respect of the defendant’s current account No. 020200254 which was overdrawn to the tune of N109,000.00, in November, 1989 when the plaintiff remitted total sum of $64,000.00 (sixty-four thousand US dollars) in two instalments at the defendant’s instructions to Coxiam Trading Company Limited, Taipei Taiwan under a bill for collection.
The defendant has since failed, refused and/or neglected to repay this outstanding amount to the plaintiff despite repeated demands.

The plaintiff further claims interest on the above sum at the rate of 21% per annum with effect from the 1st day of March, 1994 till date of judgment and thereafter at the rate of 6% till the amount is fully liquidated.
The writ of summons was accompanied by a statement of claim in which the respondent amplified the facts upon which the claims against the appellant were sought. The appellant having been served entered an unconditional appearance on 12/5/94 but did not file any statement of defence. Consequently upon the entry of appearance, the respondent, pursuant to the provisions of Order 10 rule 1(a) of the High Court of Lagos State (Civil Procedure) Rules of 1973 (then applicable) brought a summons on notice with a number of exhibits seeking for:
An order entering judgment in this action against the defendant/respondent in the sum of N346,096.87 (Three hundred and forty-six thousand and ninety-six naira, eighty-seven kobo) with interest as claimed in the writ of summons and statement of claim.
The appellant in response to the application for judgment then filed a counter-affidavit with some exhibits and a further counter affidavit.
The application was argued by counsel to both sides. The learned trial Judge in a considered ruling entered judgment in favour of the respondent as per its writ of summons and statement of claim.
Dissatisfied with the decision, the appellant appealed against it filing notice of appeal of three grounds and distilled a sole issue for determination thus:
Whether on the facts deposed to in the counter-affidavit and further counter-affidavit together with the exhibits attached thereto, the learned trial Judge was right in holding that the defendant/appellant has no defence to the plaintiff’s claim to entitle it to defend the action?.

The respondent on its part also formulated one issue for determination simply thus:
Whether the learned trial Judge was right from the totality of evidence available, in entering judgment in favour of the plaintiff/respondent under the provisions of Order 10 (now Order 11) rule 1(a) of the High Court of Lagos State (Civil Procedure) Rules, 1973.
The plaintiff/respondent’s case as clearly stated in its statement of claim is that the appellant at all material times was a customer of the respondent and it maintained a current account with the respondent’s branch at Balogun Street, Lagos. On 4/7/1989, it applied for an allocation of foreign exchange in the sum of US$64,765 for the settlement of its bills for collection against a Taiwanese Company Styled Coxiam Trading Company Limited.
This application letter which will be referred to in the course of this judgment was exhibited at the trial as exhibit ‘B’ and it was followed with the filing of Form ‘FX 10’, another application Form titled purchase order for foreign exchange on The ‘FEM’. This was exhibit C in which the appellant inter alia accepted that in consideration of the bank’s offer of foreign exchange that may be available as a result of the bid at the price fixing session of FEM that is “Foreign Exchange Market”, it undertook to buy the available foreign exchange at the rate of N7.25 to US$1.00. Other relevant documents which the lower court considered in its decision are exhibit ‘D’, Form M (exhibit E), in exhibits ‘F’ and ‘N’.
It was consequent upon these developments that the respondent wrote to the appellant asking it to regularise its account by paying the difference. Other correspondences were exchanged between parties. The learned trial Judge considered all these averments and documents and decided in favour of the respondent. Hence, the reason for this appeal by the appellant.
The single issues raised by the respondent flows from all the grounds, particularly the first ground of appeal. This issue is apt and will suffice for the proper determination of this appeal. I will therefore be guided by it. The question is what are the provisions of Order 10 rule 1(a) of the Lagos State High Court (Civil Procedure) Rules, 1973 under which the learned trial Judge entered judgment in favour of the respondent? That rule provides as follows:

1(a) Where the defendant appears to a writ of summons specially endorsed with or accompanied by a statement of claim under Order 3 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 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.
The main object of this rule has been stated in several appeals brought before this court and the Supreme Court. In Macaulay v. NAL Merchant Bank Ltd. (1990) 4 NWLR (Pt. 144) 283 the Supreme Court per Karibi-Whyte, JSC at p. 324 stated the object thus:
The object of the Order 10 procedure is to enable plaintiffs whose claim is unarguable in law and where the facts are undisputed, and it is inexpedient to allow a defendant to defend for mere purposes of delay to enter judgment in respect of the amount claimed – See Jones v. Stone (1894) AC 122. The maxim interest rei publicae ut sit finis litium is the mother of this procedure as in all forms of action which seek to reduce the volume of litigation. His Lordship on p. 325 of this case referred to the case of Nishizawa v. S. M. Jethwani Ltd. (1984) 12 SC 234 where Aniagolu, JSC in line with older decided cases stated further the principles governing the determination of the grant of leave to the defendant to defend actions under Order 10 procedure thus:
1. That a defendant who has no real defence to the action should not be allowed to dribble and frustrate the plaintiff and cheat him out of the judgment he is legitimately entitled to by delay tactics aimed, not at offering any real defence to the action but at gaining time within which he may continue to postpone meeting his obligation and indebtedness; and
2. That, on the other hand a plaintiff should not be permitted to shut out real (not a sham) defence to an action by his clinging on the assertion that once the defendant has failed to show cause against such plaintiff’s application by affidavit as required by Order 10 rule 3 of Lagos High Court Rules, he is out of court and must have a judgment signed against him no matter how genuine a defence he has disclosed by means other than by affidavit under the rule of the order.If I may go further, I would also refer to the case of NBN Ltd. v. Savol W.A. Ltd. (1994) 3 NWLR (Pt. 333) 435 at p. 452 where Uwaifo, J.C.A. (as he then was) captured quite clearly what should be the purpose of the procedure under the then Order 10. The passage reads:
I think the authorities are agreed on the salutary purpose and effect of the summary judgment under Order 10. A plaintiff comes to court with a claim stating facts and circumstances entitling him to some rights. He knows or believes that the defendant has no good defence to the claim. He issues a statement of claim to accompany his writ of summons and then applies in a summons for judgment supported by verifying affidavit evidence and other clear facts of his claim that he be given judgment without the action to trial. The defendant ought not to be allowed to stop him in those circumstances from obtaining judgment the way he seeks unless he shows by affidavit evidence that he has a real defence, not a sham defence, to the action. He will not be allowed by the court to use delaying tactics to fool anyone and frustrate the plaintiff who ought legitimately to walk away with judgment for his right without much delay and with less expense if this can easily be resolved at that stage upon the facts or on issues of law. The purpose of the procedure therefore under Order 10 is not to drive the defendant who shows he has a triable issue from the judgment seat. It is to come in the interest of justice to the aid of the plaintiff whose claim is patently unassailable and where all the facts relied on by the defendant, assuming then to be in his, favour, do not amount to a defence in law.
These authorities have not left me in doubt, that the courts will only consider a real defence and not a sham intended to delay and frustrate. That is why the rule provides only for good defence on the merits of such facts as may be deemed to entitle to the defendant to defend the action generally. It therefore remains to be seen whether the lower court rightly entered judgment in favour of the respondent against the appellant. In other words was the learned trial Judge right in his decision?
First and foremost, it is common ground that the appellant applied to the respondent for the allocation of foreign exchange in the sum of US$64,765 to be remitted to its foreign suppliers in Taiwan. The appellant’s application letter exhibit B is carefully reproduced below:

Chiefield Nigeria Limited
Office Address:
12 Wole Madariola Street
Aguda Surulere, Lagos
Telex No. 20117/TDS Box 013
Postal Address
P. O. Box 6108
Tel. 847447
Date: 4th July, 1989

Your Ref Our Ref CNL/601/89

The Manager,
Orient Bank of Nigeria Limited
23/25 Balogun Street

Dear Sir,


Please allocate the sum of US$64,765.00 for the settlement of our bills at bank’s rate. We have received the goods and would appreciate your approval of the allocation at your earliest convenience.
Enclosed and find all the necessary documents required
(1) Bill of lading No. N. O. Rear – 2001
(2) Shipment invoice
(3) Clean report of finding No. 20/05/0504
(4) Parking list
(5) Import duty report
(6) Insurance certificate
(7) Bill of entry
(8) Delivery note
(9) Duty payment receipt
Please allocate urgently since our suppliers are anxious to be settled as soon as possible. We accept settlement piecemeal but as quickly as availability of foreign exchange permits.
Thanks for your usual co-operation.

Your faithfully,
D. C. Ifiegbu
President NB. Our account No. is 020200254.”

It is noted that this application was accompanied with nine shipping documents namely; bill of lading, shipment invoice, clean report of finding, parking list, import duty report, insurance certificate, bill of entry, delivery note and duty payment receipt.
The significant use of these documents is that without them remittance could not be effected to the foreign suppliers.
Secondly, the respondent has shown that the appellant completed a purchase order form for allocation of foreign exchange from the Foreign Exchange Market, FEM, exhibit ‘C’. This document contains an indemnity clause to the effect that, among other things, the appellant accepted that in consideration of the bank’s offer of foreign exchange that may be available as a result of the bid at the price fixing session of FEM it undertook to buy the available foreign exchange at the rate of N7.25 to US$1.00. The appellant, as a practice, further undertook to make good any differential between the deposit of N290,000 it lodged at the time of the application and the actual calculation after the price fixing session. The appellant further undertook to Indemnify the bank against any loss arising from its having made the offer of foreign exchange or in relation to any irregularity in the supporting documents. Thirdly, it is not in dispute that the appellant completed and executed Form M (exhibit E) for purchase of foreign currency and duly forwarded by the respondent to the Central Bank of Nigeria.
This Form M contains the following particulars:
(i) the name of the applicant, here the appellant
(ii) the name of the issuing bank, here, that is the respondent;
(iii) the name of the beneficiary of the foreign exchange being purchased, that is Coxiam Trading Co. Limited of Taiwan; the description and quantity of goods being paid for; FOB value of goods, that is US$64,295; the freight charges i.e. US$2,750; the signature of the representative of the importer that is the defendant;
(viii) the signature and stamp duty of the local bank, that is the respondent.
Thus these three important documents exhibits ‘B’, ‘C’ and ‘E’ and to some extent exhibit ‘L’ enabled the respondent to bid for the foreign exchange and remitted same to the foreign suppliers. But a word about exhibit N. In its brief of argument, the appellant had raised some questions trying to cast doubt as to whether that exhibit was issued by the appellant as authority for the remittance or at all in response to exhibit CNL1. It is contended by the appellant that exhibits CNL1 and CNL2 were contradictory to exhibit ‘N’ . I agree with the learned counsel for the respondent that there is no such condition among the exhibits. It would appear that at the time exhibits CNL1 and CNL2 were written, the remittance, upon the combined effect of exhibits B, C, E and L, had already been effected by the international division of the respondent bank.
These exhibits were written by the branch manager requesting the appellant to provide the naira cover for the remittance. It was explained by the respondent that the request for a written instruction on disbursement was meant to pressurise the appellant to provide the requisite cash cover for its remittance. It was explained that when the appellant did not provide the naira cover as demanded, the threat to purchase the allocation could not be made good and that the money was transferred and the appellant’s account was accordingly debited. I am of the opinion that the respondent did not require exhibit ‘N’ to remit money to the appellant’s suppliers.
Exhibits ‘B’, ‘C’, ‘E’ and ‘L’ were enough authorisation to effect transfer. I do not think it was the contention of the appellant that exhibit ‘N’ was forged. In the further counter affidavit No.2, the appellant merely stated that:
5. That the plaintiff/appellant’s exhibit ‘N’ did not emanate from the defendant/respondent.
This deposition is quite vague. It is not clear. The rules of pleading requires that where criminality is alleged for example forgery, all the particulars must be supplied. It is in the case of NBN Ltd. v. Savol (supra) that this court per Uwaifo, JCA (as he then was) emphasised on what an affidavit showing cause should contain in an answer to an application for summary judgment under Order 11 (supra). At pages 452 – 453, His Lordship stated:
As to the type of affidavit of the defendant that would suffice a mere sweeping statement or general denial is clearly insufficient. The affidavit must contain particulars upon which the substance of the facts deposed to or of the defence can be viewed. In other words, sufficient facts and particulars must be given to show that there is a bona fide defence. It seems undeniable that in summary judgment procedure the affidavit (i.e. counter-affidavit) of the defendant does not need less particularization than what may be required in pleadings. This is obvious defence denying indebtedness or of fraud or illegality. Although it is said that matter of hearsay is inadmissible in the defendant’s affidavit, it is with a proviso that the sources and grounds of information or belief are disclosed.
These admonitory dicta are very apposite to the issues in the instant case. The appellant did not show in their counter affidavit and further affidavit some particulars to support the allegation of extortion (a criminal offence) made against bank officials or lack of authority in the remittance of the foreign exchange. I must reiterate that by the combined effect of exhibits ‘B’, C’,’D’, ‘E’ and ‘L’ it can be said that there was a sufficient authority for the respondent to remit the foreign exchange applied for by the appellant to its foreign suppliers. Also exhibits ‘F’ and ‘N’ in which the appellant sought to re’97affirm its earlier instructions in exhibits ‘B’, ‘C’ and ‘E’ are merely superfluous documents without which the remittance could and still have been effected by the bank.
On the whole, I am quite satisfied that the appellant has no defence to the respondent’s claim. It is not shown in their counter affidavit and further-affidavit and the accompanying exhibits that they have a fair case which is bona fide and that there is substantial issue which ought to be tried. The judgment of the lower court entering judgment for the respondent in that court is hereby affirmed.
Accordingly, this appeal fails and it is dismissed. Appellant shall pay to the respondent the costs of this appeal assessed as N5,000.00.

OGUNTADE, J.C.A.: I read before now a copy of the lead judgment by my learned brother, Galadima, J.C.A. I agree with his reasoning and conclusion.
I would also dismiss the appeal with N5,000.00 costs.

ADEREMI, J.C.A.: I have had the privilege of a preview of the judgment just delivered by my learned brother, Galadima, JCA. A thorough review of the facts of the case has been carried out by my learned brother in his lead judgment; I need not go over that. Suffice it to say that I agree with his reasoning and conclusion that the appeal is unmeritorious .
I wish to add a few words of my own on the points of law involved in this case. The relevant rule of court relating to an undefended case requires that a defendant who does not admit the claim of the plaintiff and who proposes to defend the action must do so by a notice manifesting that intention together with an affidavit which discloses a defence on the merit. Having clearly shown that intention, unless the affidavit evidence of the defendant does not qualify as a defence which merits a trial at full hearing, the undefended list procedure cannot be justifiably pursued thereafter.
The nature of the merit looked for in such an affidavit is one which casts doubt on the case of the plaintiff. See Jipreze v. Okonkwo (1987) 3 NWLR (Pt. 62) 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 on the undefended list procedure.
See John Holt & Co. (Liverpool) Ltd. v. Fajemirokun (1961) 1 All NLR 492. Perhaps I should add that a defence will be said to be on the merit when it is premised on 01 legal defence properly founded by the defendant against the substance of the plaintiff’s claim as opposed to where matters of procedure practice or form. See Paul Cardoso v. John Bankole Daniel & Ors. (1986) 2 NWLR (Pt. 20) 1 and Adebisi Macgregor Associates Ltd. v. Nigeria Merchant Bank Ltd. (1996) 2 NWLR (Pt. 431) 378.
For this little contribution but most especially for the detailed reasons given in the lead judgment I would also dismiss the appeal while I abide by the order as to cost contained in the said lead judgment.

Appeal dismissed.



Zik Chuka Obi, Esq. For Appellant



Emeka Ngige, Esq. For Respondent


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