ECOBANK v. UPRIGHT INCON LTD
(2020)LCN/14048CA)
In The Court Of Appeal
(ABUJA JUDICIAL DIVISION)
On Thursday, March 19, 2020
CA/A/290/2013
Before Our Lordships:
Abdu Aboki Justice of the Court of Appeal
Peter Olabisi Ige Justice of the Court of Appeal
Emmanuel Akomaye Agim Justice of the Court of Appeal
Between
ECOBANK NIGERIA LIMITED APPELANT(S)
And
UPRIGHT INCON LIMITED RESPONDENT(S)
RATIO
WHETHER OR NOT AN ISSUE RAISED FOR DETERMINATION IN AN APPEAL MUST BE RAISED FROM THE GROUND OF APPEAL
It is settled law that an issue raised for determination in an appeal, to be valid and competent for determination, must derive from a ground of the appeal and that any issue that is not distilled from any of the grounds of the appeal is not competent and valid for determination in the appeal and must be struck out. See Ngilari V Mothercat Ltd (1999) 12 SC (Pt. ii) 1. PER AGIM, J.C.A.
EMMANUEL AKOMAYE AGIM, J.C.A. (Delivering the Leading Judgment): This appeal No. CA/A/290/2013 was commenced on 22-4-2013 when the appellant herein filed a notice of appeal against the judgment of the High Court of Federal Capital Territory delivered on 22-3-2013 in suit No. FCT/HC/CV/2252/2009 by D.Z. Senchi J. The notice of appeal contains four grounds for the appeal. The notice was amended with leave of Court on 9-6-2016. The amended notice of appeal contains five grounds of appeal.
The parties herein have filed their respective briefs as follows- appellant’s brief, respondent’s brief and appellant’s reply brief.
The appellant’s brief raised the following issues for determination-
1. Whether the finding of the Trial Court that the Appellant breached Exhibit 1 (the overdraft facility) and the consequential award of damages against the Appellant in the sum of N10,000,000.00 is sustainable in the light of the evidence before the Trial Court? (Distilled from Grounds 1 and 5 of the amended Notice of Appeal
2. Whether the award of general damages against the Appellant in the sum of N10,000,000.00 is justifiable in
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fact and in law? (Distilled from Grounds 2 and 3 of the amended Notice of Appeal)
3. Whether from the findings of the Trial Court, the Appellant is entitled to the grant of relief (II) in the Appellant’s counter-claim wherein the Appellant claimed against the Respondent interest rate of 17% per annum from 2nd June 2006 until full liquidation thereof? (Distilled from Ground 4 of the amended Notice of Appeal)
The respondent’s brief raised the following issues for determination-
1. Was the learned trial judge right to have found the Appellant/Defendant liable for breach of the terms of offer (Exhibit 1) between the Appellant/Defendant and the Respondent/Plaintiff (arising from ground 1).
2. Can a Court award General Damages to a litigant after dismissing the litigants claim for Special Damages. (arising from ground 2)
3. By the evidence before the Court, is the award of N10,000,000.00 (Ten Million Naira) Damages in favour of the Respondent excessive. (arising from ground 3).
4. Was the learned trial judge right to have rejected the evidence of DW1, having found the evidence contradictory. (arising from ground 4)
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I will determine this appeal on the basis of the issues raised for determination in the appellant’s brief.
Let me start with issue No. 3 which asks “Whether from the findings of the trial Court, the Appellant is entitled to the grant of relief (II) in the Appellant’s counter-claim wherein the Appellant claimed against the Respondent interest rate of 17% per annum from 2nd June 2006 until full liquidation thereof?“
The appellant’s brief indicates that issue No. 3 is derived from ground 4 of the amended notice of appeal. A careful reading of the main body of that ground show that there is no relationship between the ground and issue No. 3 that purports to derive from it. The main body of ground 4 reads thusly-
“The Trial Court erred when His Lordship held inter alia that –
“In this wise therefore, I find it difficult to believe the evidence of DW1 at paragraph 21 of his witness statement on oath and the documentary evidence on Exhibit 7 as to which one to pick and believe and which one to reject and disbelieve. Thus, I am of the view that both evidence be rejected. Accordingly, the evidence of DW1 at
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paragraph 21 of his sworn statement and Exhibit 7 are hereby rejected.”
The ground complains against the Trial Court’s decision that the evidence of DW1 in paragraph 21 of his sworn statement contradicts with Exhibit 7 and the Trial Court’s rejection of both pieces of evidence for being contradictory. Issue No. 3 complains against the failure of the trial Court to grant relief (II) of the appellant’s counter-claim. This is not the complain in ground 4 of the amended notice of appeal. It is the particulars of the error complained about in the ground that stated the failure to grant relief (II) of the counter-claim as a result of the Trial Court’s rejection of the above mentioned two pieces of evidence. Since it describes itself as the particulars of the error complained of in the main ground, the particulars must contain only details of that error and not highlight an error different from the one complained against. Order 7 Rule 2(2) provides that where a ground of appeal alleges misdirection or error in law, the particulars and the nature of the misdirection or error shall be clearly stated. Particulars X and XI of ground 4
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raise a complain different from the one complained about in ground 4. The said particulars read thusly-
“x) The failure of the Trial Court to grant the said relief (ii) of the Appellant’s counterclaim has occasioned grave miscarriage of justice to the Appellant especially in view of the fact that the said relief was eminently supported by the weight of evidence before the Trial Court
xi) Indeed, the grant of relief (i) in the Appellant’s counterclaim against the Respondent should ordinarily necessitate the grant of relief (ii) which directly flows from relief (i).“
The particulars complain about the failure of the trial Court to grant relief (II) of the counter-claim. That is not the error complained about in ground 4. The complain in particulars X and XI cannot be countenanced as the complain in ground 4 of this appeal. The particulars of an error complained of in a ground cannot raise a complain different from the one in the main ground. The particulars of the misdirection or error alleged in the ground must be about the subject matter of the ground and cannot competently and validly raise a complain different from
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that in the ground of appeal. Where the particulars in support of a ground are not related to the subject of the ground, the ground is incompetent. See Hambe V Hueze(2001) 2 SC 26, Aderounmu V Olowu(2000) 2 SCNJ and Access Bank Plc V Sijuwade(2016) LPELR- 40188(CA).
Since the subject matter of issue No. 3 is different from the subject matter of ground 4 of the amended notice of appeal, the statement of the appellant that the issue is distilled from the said ground 4 is wrong.
As it is, issue No. 3 is not derived from any of the grounds of this appeal. It is therefore incompetent and liable to be struck out. It is settled law that an issue raised for determination in an appeal, to be valid and competent for determination, must derive from a ground of the appeal and that any issue that is not distilled from any of the grounds of the appeal is not competent and valid for determination in the appeal and must be struck out. See Ngilari V Mothercat Ltd (1999) 12 SC (Pt. ii) 1.
The amended notice of appeal clearly states the part of the judgment of the Trial Court that is complained against in this appeal in keeping with Order 7 Rule 2(1) which
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provides thusly-
2-(1) “All appeals shall be by way of rehearing and shall be brought by notice (hereinafter called “the notice of appeal”) to be filed in the registry of the Court below which shall set forth the grounds of appeal, stating whether the whole or part only of the decision of the Court below is complained of (in the latter case specifying such part) and shall state also the exact nature of the relief sought and the names and addresses of all parties directly affected by the appeal, which shall be accompanied by a sufficient number of copies for on such parties.”
Concerning the part of the decision complained against, it states thusly- “Arising from the foregoing, the Defendant did not place before the Court evidence of breach of the overdraft facility, Exhibit 1 granted to the Plaintiff. Accordingly, I hold the view that the stoppage of draw down by the Defendant after the first drawdown of N14,400,000.00 is contrary to the terms and conditions of exhibit 1. There is no evidence that the Plaintiff actually breached the terms of Exhibit 1 and I so hold … The Plaintiff is therefore entitled to general damages
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for breach of contract.
Accordingly, the sum of N10,000,000.00 is hereby awarded to the Plaintiff against the Defendant for breach of contract…
In this wise therefore, I find it difficult to believe the evidence of DW1 at paragraph 21 of his witness statement on oath and the documentary evidence on Exhibit 7 as to which one to pick and believe and which one to reject and disbelieve. Thus, I am of the view that both evidence be rejected. Accordingly, the evidence of DW1 at paragraph 21 of his sworn statement and Exhibit 7 are hereby rejected.”
The part of the judgment that granted relief 1 of the counter claim and failed to grant relief (II) of the counter-claim is not part of the judgment the notice of appeal indicated this appeal is complaining against. By indicating the specific parts of the judgment the appeal complains against, the appellant gave notice that it is not complaining against the whole judgment and that it accepts as correct, conclusive and binding the parts of the judgment outside the parts the appeal complains against. Therefore, any ground of appeal or issue for determination that complains against any part of
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the judgment of the trial Court outside the part listed in the notice of appeal as the part complained against by the appeal is incompetent.
For all of the above reasons, issue No. 3 of this appeal and the arguments thereunder are hereby struck out.
Let me now consider together issues Nos. 1 and 2 which ask-
1. Whether the finding of the Trial Court that the Appellant breached Exhibit 1 (the overdraft facility) and the consequential award of damages against the Appellant in the sum of N10,000,000.00 is sustainable in the light of the evidence before the Trial Court?
2. Whether the award of general damages against the Appellant in the sum of N10,000,000.00 is justifiable in fact and in law?
The appellant had granted the application of the respondent to the appellant for the grant of an overdraft facility to finance the purchase of trading stock (cement) from Dangote Industries Limited. The letter of grant of the overdraft facility of 25 Million naira to finance the purchase of trading stock (cement) from Dangote Industries Limited, Lagos for a tenor of one year which contains the terms and conditions for the overdraft is Exhibit 1 and
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is dated 7-9-2005. The respondent accepted all the terms and conditions therein. The appellant allowed the respondent to draw down the sum of 14,400,000.00 naira under the overdraft facility. The appellant refused to allow the respondent draw down any further sum under the facility. This is the crux of the dispute between them.
The respondent contends that it paid back the N14,400,000, that the appellant had an obligation under the contract to allow him continue to draw down the overdraft within the tenor of one year and that since he did not default in repaying the N14,400,000 overdraft, the appellant breached the contract by refusing to allow him further draw down of the overdraft facility. The appellant on the other hand contends that the respondent failed to repay the said sum of N14,400,000 given to him, that by this default the respondent breached the terms of the overdraft facility and this breach entitled the appellant to recall the overdraft facility and stop further draw down on it.
The respondent averred in paragraphs 7 to 11 of his further amended statement of claim thusly –
“7. The plaintiff avers that he was allowed
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by the defendant to draw down the sum of N14,400,000.00 (Fourteen Million, Four Hundred Thousand Naira) on the overdraft.
8. The Plaintiff sold the first consignment of cement from Dangote Cement and paid back the sum of N14,400,000.00 (Fourteen Million, Four Hundred Thousand Naira).
9. The Plaintiff requested for further draw down on the account to the time granted in the overdraft but the defendant refused.
10. The plaintiff avers that as at 2nd June, 2006 the debit balance in the plaintiff said account was N4,979,689.36 (Four Million, Nine Hundred and Seventy-Nine Thousand, Six Hundred and Eighty Nine Naira, Thirty-Six Kobo). The plaintiff avers that the said indebtedness of N4,979,689.36 (Four Million, Nine Hundred And Seventy Nine Thousand, Six Hundred and Eighty Nine Naira, Thirty Six Kobo) had originated before the overdraft facility granted to the plaintiff by the defendant and that it was expected to be off-set with the proceed of sale of Dangote Cement over which the overdraft facility was granted to the Plaintiff.
11. In spite of persistent demands, the defendant refused to allow the plaintiff draw down on its account in
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accordance with the agreement in the overdraft facility.”
The appellant in paragraphs 3 to 5 of its further amended statement of defence averred replicando thusly-
“3. The Defendant denies paragraph 8 of the amended statement of claim and puts the Plaintiff to the strictest proof thereof. Further to this, the Defendant avers that since the grant of the overdraft facilities to the Plaintiff the Plaintiff has consistently and willfully defaulted in repaying same. The Defendant shall at the trial rely on the statement of account of the Plaintiff with the Defendant and its letter to the Plaintiff of 30-5-2007.
5. The Defendant admits paragraphs 9 and 11 of the amended statement of claim only to the extent that it refused the Plaintiff further drawdown based on the credit facility granted to it but avers further it refused further drawdown to the Plaintiff because:
(a) the Plaintiff defaulted on several occasions to repay the portion of the credit facility granted to it as and when due;
(b) the customers of the Defendant who were granted similar facilities like the plaintiff’s were in default in repaying the loan granted
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to them thereby affecting adversely the cash flow situation and liquidity base of the Defendant;
(c) the terms and conditions of the credit facility between the parties to this suit permits the Defendant to stop further drawdown even before the expiration of the tenor.
5. The Defendant admits paragraph 10 of the amended statement of claim but states further that that was due to the indebtedness of the Plaintiff to the Defendant.
It is clear that the issues of whether the respondent failed to repay the N14,400,000.00 overdraft it took from the appellant and how the outstanding debt of N4,979,689.36 arose, were settled on the above reproduced pleadings by paragraph 5 of the appellant’s further statement of defence admitting paragraph 10 of the respondent’s further statement of claim which averred that the outstanding indebtedness of N4,979,689.36 originated before the overdraft facility to trade in cement. The appellant in paragraph 9 of the further amended counter-claim relied to the respondent’s averment in paragraph 10 of the further amended statement of claim which claimed for the said sum of N4,979,689.36 as the balance of
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the debt that arose before the overdraft and also claimed for the N14,400,000 it gave the respondent under the overdraft facility on the ground that it has remained unpaid by the respondent. The appellant’s admission that as at 2-6-2006, the debit balance in the respondent’s account with it was N4,979,689.36 and that this amount was part of an initial debt that arose before the overdraft facility defeats the appellant’s claim that the respondent had not refunded the N14,400,000.00 overdraft it took and that it is the debit balance outstanding from the N14,400,000 the respondent received from the appellant. In paragraph 14 of the further amended counter claim, the appellant claimed for it thusly-
“(i) The sum of N4,979,689.36 being admitted debit balance outstanding from a loan of N14.4 million received from the Counter-claimant and due/payable by the Plaintiff in favour of the said Counterclaimant as at 2nd June, 2006.”
By this averment, the appellant admitted that the respondent had repaid the N14,400,000 it received as overdraft remaining a debit balance of N4,979,689.36.
But in paragraph 5 of its further amended
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statement of defence, it admitted the averment in paragraph 10 of the further amended statement of claim that the said N4,979,689.36 is part of a debt that arose before the grant of the overdraft facility and is therefore not a debit balance of the overdraft received by the respondent. Since the counter claim is for only the N4,979,689.36, which amount is admitted to be part of a debt that arose before the overdraft, the appellant is therefore not counter claiming for the N14,400,000.00 it gave the respondent. This is a clear acknowledgment by the appellant that the N14,400,000.00 has been fully repaid by the respondent. The issue was clearly settled on the pleadings and therefore did not arise for trial.
The respondent averred in paragraph 10 of its further amended statement of claim that the said initial debt of N4,979,689.36 “was expected to be set-off with the proceed of sale of Dangote cement over which the overdraft facility was granted to the plaintiff”. There is nothing in the respondent’s pleading and evidence that show that he took steps to meet this expectation when he traded in cement with the N14,400,000.00 beyond repaying
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the overdraft facility. The respondent’s failure to liquidate the said debt of N4,979,689.36 entitled the appellant to terminate the facility by virtue of the terms of the overdraft contract as follows-
“The facility shall terminate and all sums due to Oceanic Bank Int’l Plc there under shall become immediately payable if:
a. The company commits any breach or default under the terms of the facility or of any other credit facilities granted the company by the Bank or any other creditor.
In the event of a default in the repayment of this facility and/or other interest accrued thereon, the Bank shall dispose of the pledge assets on which it has a right of lien with or without recourse to the borrower. Any excess or shortfall arising thereon shall be for the account of the borrower.”
The respondent did not deny paragraph 4(b) of the appellant’s further amended statement of defence in support of its counter-claim. The respondent in its defence to the counter-claim did not specifically deny the averments in the said paragraph of the statement of defence. In support of the said averment, the DW1 testified in
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examination in chief in paragraphs 10 and 11 of his witness statement on oath thusly-
“10. The Defendant indeed stopped granting credit facilities to most of its customers because most of them were not faithfully fulfilling their obligations under their respective terms to the Defendant and this ugly situation affected the cash flow situation and liquidity base of the Defendant.
11. Whenever the situation stated in paragraph 10 above occurs, the Defendant in exercise of its right under the terms of any credit facility can withhold the further release of fund to any borrower.”
This evidence of DW1 was not challenged in cross examination. The respondent did not elicit any evidence to deny or contradict the above assertions of DW1. Since the testimony was not challenged or contradicted, it must be treated as having been admitted by the respondent who had notice of it and had the opportunity to deny it. See Okoebor V Police Council (2003) 5 SC 11 and Fagbenro V Arobadi & Ors (2006) 2-3 SC 18.
So, the pleadings and evidence establish that the appellant’s cash flow and liquidity was adversely affected by the default of
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many of its debtors in repaying their debts to it. It is a term of the overdraft contract that “the facility is subject to all normal banking rights and availability”. By virtue of this term, the appellant was entitled to withhold the further release of fund under the overdraft facility. The overdraft contract states that the facility would be “available at the option of the Bank.” By virtue of this clause, the appellant is not under a mandatory duty to give the respondent funds under the facility.
In the light of the foregoing, I hold that the Trial Court was wrong to have held that the appellant breached the overdraft contract with the respondent when it refused it further drawdown of funds under the overdraft facility. The appellant acted in accordance with the terms of the overdraft contract in Exhibit 1 when it refused the respondent’s demand for a further drawdown of funds under the overdraft facility.
Having held that the appellant acted within its rights under the overdraft contract in Exhibit 1 when it refused to give more funds to the respondent under the contract, the trial Court’s award of
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N10,000,000.00 general damages to the respondent against the appellant for breach of the overdraft contract cannot stand. It is hereby set aside.
Issues Nos. 1 and 2 are hereby resolved in favour of the appellant.
On the whole this appeal succeeds as it has merit. It is hereby allowed. The part of the judgment of the High Court of Federal Capital Territory delivered on 22-3-2013 in suit No. FCT/HC/CV/2252/2009, by D.Z. Senchi J, that awarded the sum of N10,000,000.00 general damages to the respondent against the appellant for breach of the overdraft contract in Exhibit 1 is hereby set aside.
The respondent shall pay costs of N400,000.00 to the appellant.
ABDU ABOKI, J.C.A.: My learned brother, EMMANUEL AKOMAYE AGIM, JCA obliged me with a copy of the judgment just delivered. His Lordship has exhaustively considered and ably resolved the issues in contention in this appeal. I agree with the reasoning and conclusion that this is meritorious, and ought to be allowed.
I will just add in reiteration that it is a well-established principle of law that an issue for determination must be formulated from the grounds of appeal. They must
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be based on, related to, or derived from the grounds of appeal challenging the judgment appealed against; otherwise such an issue is incompetent and must be discountenanced together with the argument canvassed thereunder.
In IDIKA & ORS. V. ERISI & ORS (1988) 2 NWLR (PT. 78) 563, the Supreme Court held that issues or questions for determination are formulated from the grounds of appeal properly filed before the Court. Issues formulated by a party for determination in an appeal which do not arise out of the grounds of appeal will be deemed irrelevant and will not be countenanced in the determination of the appeal.
In the instant appeal, I also find that Issue 3 formulated by the Appellant herein is not derived from any of the grounds of this appeal. It is therefore Incompetent and liable to be struck out. Same is struck out by me.
For this, and the more eloquently articulated lead judgment of my Learned Brother EMMANUEL AKOMAYE AGIM JCA, I also adjudge this appeal to be meritorious. It is allowed by me.
I also abide by the orders made in the lead judgment.
PETER OLABISI IGE, J.C.A.: I agree.
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Appearances:
B.B. Lawal, Esq., with him G.O Ivhador, Esq. and E.B. Aigbe, Esq., For Appellant(s)
Nnodu Okeke, Esq., For Respondent(s)
