ELIZADE NIGERIA LIMITED V. TABEK & COMPANY LIMITED (2013)

ELIZADE NIGERIA LIMITED V. TABEK & COMPANY LIMITED

(2013)LCN/6709(CA)

In The Court of Appeal of Nigeria

On Friday, the 8th day of February, 2013

CA/PH/325/2007

RATIO

ESSENCE OF THE UNDEFENDED LIST

Before Their Lordships

MAHAMMED LADAN TSAMIYAJustice of The Court of Appeal of Nigeria

CHIOMA EGONDU NWOSU-IHEMEJustice of The Court of Appeal of Nigeria

UCHECHUKWU ONYEMENAMJustice of The Court of Appeal of Nigeria

Between

ELIZADE NIGERIA LIMITEDAppellant(s)

AND

TABEK & COMPANY LIMITEDRespondent(s)

UCHECHUKWU ONYEMENAM, J.C.A. (Delivering the Leading Judgment): This is an appeal against the Judgment and orders of the Rivers State High Court Port Harcourt, contained in the Judgment of Justice ICHE N. NDU the Chief Judge of Rivers State, delivered on the 7th day of November, 2006.
The Respondent as Claimant by writ of summons (pages 1-2 of the record) filed on the 4th of July 2006 commenced this action under the undefended list procedure against the Appellant (Defendant) claiming as follows:-
(a) A sum of N8,600,000.00 (Eight Million, Six Hundred Thousand Naira) only, being the outstanding debt the Defendant is owing the plaintiff
(b) Interest on the outstanding sum of N8,600,000.00 (Eight Million, six Hundred Thousand Naira) at the rate of 21% per annum until Judgment is given and 4% per annum until same is fully paid.
(c) The Respondent followed this up with a motion ex-parte also filed on the 4/7/06 asking the court to place the matter under the undefended list (pages 3-19 of the records). The court on the 24th day of July 2006 made an order placing the matter on the undefended list and adjourned the matter to the 18 the October 2006 for hearing.
The case of the Respondent as shown in the writ of summons, motion ex-parte and affidavit in support of the claim for liquidated money demand under the undefended list procedure is to the effect that the Appellant (Defendant) was supplied with 2 units of Toyota Prado GX A/T on the 31st day of July 2003 valued at N11,800,000.00 (Eleven Million, Eight Hundred Thousand Naira) only. The Appellant made a cash deposit to the tune of N2,200,000,00 (Two Million, Two Hundred Thousand Naira) only. On a later date, another Toyota Prado Jeep valued at N5,700,000.00 (Five Million, Seven Hundred Thousand Naira) only was also supplied to the Appellant. The Appellant did not pay for either of the Toyota Jeeps valued at N17,550,000.00 (Seventeen Million, Five Hundred and Fifty Thousand Naira) only, save the N2,200,000.00 (Two Million, Two Hundred Thousand Naira) it made as a deposit for the 1st two Toyota Prado GX A/T Vehicles.
After several attempts to recover the money, the Respondent caused the arrest of the Appellant’s Managing Director Mr. Joe Robinson Jnr and recovered one of the Toyota Prado GX A/T from him. The recovered vehicle was later sold by the Respondent for the sum of N6,750,000.00 (Six Million, Seven Hundred and Fifty Thousand Naira) only. As a result of the above, the Respondent claimed that the Appellant is indebted to her to the tune of N8,600,000.00 (Eight Million, Six Hundred Thousand Naira) only, being the cost of (one 1 Toyota Prado GX M/T vehicle less the initial deposit of N2,200,000.00 (Two Million, Two Hundred Thousand Naira) only. The Respondent (Claimant) stated that the Defendant (Appellant has no defence to the action.
Upon receipt of the summons, the order putting the matter in the undefended list and the affidavit in support, the Appellant filed his Notice of intention to defend and affidavit in support. See pages 21-25 of the records. The contention of the Appellant being that he was not indebted to the Respondent to the tune of N8,600,000.00 (Eight Million, Six Hundred Thousand Naira) as the amount to be paid by the Appellant was not yet ascertained.
It was the case of the Appellant from her affidavit disclosing a defence on the merit that there was a disagreement over the exact amount of money to be paid for the vehicle wherein the parties went into negotiations. During the course of negotiations, the Prado Jeeps supplied were found not to be in good condition.
Due to these problems the parties, based on the long standing relationship between them, went into further negotiations. At a meeting amongst the Respondent’s Chairman and the General Manager Operations, Chief M. Ade Ojo and Mike Onyia respectively and the Appellant’s Managing Director, concessions were made by the Respondent to the Appellant. It was also the Appellant’s case that he had made other cash payment/deposits apart from the N2,200,000,00 (Two Million, Two Hundred Thousand Naira) only. During the course of this dispute and negotiation the Respondent arrested the Appellant’s Managing Director, repossessed one of the Prado Jeeps and sold it for an amount not known to the Appellant. He stated that the Appellant had a very good defence to the action.
On the 18th of October 2006 when the matter came up for hearing the Respondent’s counsel wrote a letter asking for adjournment, the matter was subsequently adjourned to the 7th of November 2006 for hearing. On the 7th of November 2006 when the matter came up for hearing, the learned trial judge proceeded to enter Judgment for the Respondent after dismissing the notice of intention to defend.
Dissatisfied with the said Judgment, the Appellant filed an Appeal on the 17th of November 2006 (pages 48-51 of the records).
The appeal which is against the whole Judgment has 4 grounds. Having regard to the appeal, parties duly filed and served their respective briefs consequent upon which the appeal was heard on 28th November, 2012. Respective counsel identified, adopted and relied on their briefs.
In the Appellant’s brief settled by Nonye Nzewi Esq. two issues were submitted from the grounds of Appeal for the determination of the appeal. The two issues are as follows:-
“(1) Whether the trial Judge was right in entering Judgment for the Claimant (Respondent), in disregard of the Defendant’s (Appellant’s) Notice of intention to defend, in the circumstances of this matter and in the light of the admission made by the Claimant’s counsel.
(2) Whether the learned trial Judge was right in making an order for interest of 21% on the Judgment sum of N7.6M (Seven Million, Six Hundred Thousand Naira) from January, 2003 till Judgment. When there was nothing before him justifying the grant of same”.
On their own the Respondent in its brief also formulated these two issues for the determination of the appeal:-
“(1) Having regard to the circumstances and facts of this case whether or not the lower court was right when it dismissed the notice of intention to defend, refuse the application to transfer the case to the general cause list and entered judgment for the Respondent herein.
(2) Whether the learned trial Judge was right in making an order for interest of 21% on judgment sum of N7,600,000,00 (Seven Million, Six Hundred Thousand Naira) from January till judgment considering the facts and circumstances of this case.
The issues formulated by both parties are for all intents and purpose same except for terminology. I shall simply adopt the two issues as formulated by the Appellant for the determination of this appeal.
On issue 1, the learned counsel for the Appellant’s submission in a nutshell is that based on the Notice of intention to defend and an affidavit disclosing a defence on the merit, coupled with the admission by the claimant’s counsel, the trial court ought to have held that the claim of the claimant was contentious and accordingly transfer the case to the general cause list in other to enable the Defendant call evidence. He referred to Agro Millers Ltd v. C.M.B. (1997) 10 NWLR (Pt.525) 469. He urged the court to set aside the decision of the lower court.
In response, the learned counsel for the Respondent submitted that the decision to place a case on the undefended list of the court is based on an exercise of judicial discretion which must be done judicially and judiciously. He further submitted that the learned trial Judge based on the exercise of his discretion on the documentary evidence before it pointing out that the Appellant did not attack the findings of facts made by the lower court. He therefore urged the court not to disturb the findings of the trial court same not being perverse. See Nwamuo v. Okoro (2006) 11 NWLR (Pt. 990) 40.
While the law and the rules of court have not been designed to shut out a defendant who can show in his own affidavit that there are triable issues in the action; it is however, in the spirit of law and rules of court that under the undefended list procedure, a defendant who has no real defence to an action is forbidden and foreclosed from dribbling or frustrating a plaintiff by a calculated delay tactics targeted; not at the presentation of a real defence to the action but at buying time within which he may continue to post pone up setting his indebtedness. See Agro Millers Ltd v. Continental Merchant Bank (Nigeria) Plc (1997) 10 NWLR (pt.525) 469; Nishizawa v. Jethwani (1984) 12 SC 234.

By Order II Rule 8 of the High Court of Rivers State (Civil Procedure) Rules 2006 where a claim is for a liquidated money and is not in contention and it can be shown that the defendant has no defence, the court shall enter the suit under the undefended list for hearing. That the defendant files a Notice of intention to defend with an affidavit in support is not a prima facie reason for the court to transfer a matter from an undefended list to the general cause list.

The primary purpose of the undefended list is fashioned to assist a plaintiff obtain prompt summary Judgment in the absence of a defendant showing real defence which will lead to a trial of the case on its merits. So a claim of a plaintiff for a liquidated money or debt which has been placed in an undefended list can only be transferred to the general cause list if the defendant’s affidavit in support of his intention to defend discloses a defence on the merit. See Jos North Local Government v. Daniyan (200) 10 NWLR (Pt.675) 281, Okoli v. Morecab Finance (Nig.) Ltd (2007) all FWLR (Pt. 369) 1164 at 1189.
The transactions leading to the instant appeal were essentially documentary. There was sufficient documentary evidence before the trial court that the subject matter of the suit before it was procured by the Appellant. See pages 7, 9-13 of the record. On 31st July, 2003 when two units of Toyota GX A/T were delivered, the Appellant who made an initial deposit of N2,200,000,00 (Two Million, Two Hundred Thousand Naira) which brought the amount due to the Respondent to N9,600,000.00 (Nine Million, six Hundred Thousand Naira) only. Another unit of Toyota Prado GX M/T was delivered to the Chairman of the Appellant’s company on 13th August, 2003 which was valued at N5,750,000.00 (Five Million, seven Hundred and Fifty Thousand Naira), bringing the amount due to the Respondent to N15,350,000.00, The Appellant made no further payments to the Respondent in respect of the amount due inspite of repeated demands made by the Respondent. One of the Toyota Prado GX A/T vehicles was recovered from the Chairman of the Appellant when arrested by the police and was sold at N6, 750,000.00 (Six Million, Seven Hundred and Fifty Thousand Naira), while the amount due to the Respondent from the Appellant stood at N8,600,000.00 and the Appellant has failed, refused and neglected to pay the Respondent.
The Appellant who was the defendant did not deny these documentary evidence outside the general statement that the money was not certain which led to a further negotiation with the Respondent to determine actual amount owed. That it was on the cause of the negotiation that the Appellant discovered that the Prado Jeeps supplied to her were not in good condition. The Appellant also alleged that outside the N2,200,000.00 (Two Million, Two Hundred Thousand Naira) only, deposed to by the Claimant, she also made other cash payment deposits. See paragraphs 8 – 13 of the Appellant’s affidavit in support of her intention to defend. I will observe that as opposed to the Respondent who had documents to support her claim and position in her contractual relationship with the Appellant, the Appellant did not rely on any document in her deposition at least to show that outside the N2,200,000.00 (Two Million, Two Hundred Thousand Naira) she made more payments to the Respondent. The Appellant did not state that she wrote to the Respondent to complain of the Prado Jeeps in bad condition nor sought to return let alone return them. The Appellant merely stated that she observed that the Prado Jeeps were in bad condition and nothing more. As I said earlier, it is not enough that a defendant alleges he has a defence to move a trial court to transfer a matter in an undefended list to the general cause list, I am unable to appreciate any real defence put forth by the Appellant on the merit of the claim of the Respondent. I therefore agree with the learned trial Judge that no good defence emerged in favour of the defendant for the simple reason that the Appellant was certain of the money owed. Also I agree with his decision that the fact that the Appellant alleged defect in the vehicles without more does not constitute a real defence in the circumstances of this case. See page 45 of the record.
Accordingly, I uphold as right the decision of the learned trial Judge in refusing to transfer the case to the general cause list on this point.
As to the effect of the Respondent’s counsel’s admission as to the concession given to the Appellant, it is not correct that the said admission negatively affected the claim of the Respondent to obtain judgment under the undefended list procedure. Rather, it is my view that the learned trial Judge was right in his consideration of this point and in his holding that; “Though the claim is the total sum of N8,600,000.00 against the defendant, Mr. Ochai in his submissions (which binds the claimant) gave a run down which includes a One Million Naira discount in favour of the defendant. I therefore order as follows:-
(1) The Defendant should pay to the Claimant the sum of N8,600,000.00, less the said discount of N1,000,000.00, which therefore mean that the Defendant should pay to the claimant the sum of N7,600,000.00 being the outstanding debt the Defendant is owing the Claimant for the vehicles supplied to the Defendant”.
Finally on this issue, I hold that the learned trial Judge exercised his discretion judicially and judiciously having rightly considered the documentary evidence before his decision refusing to transfer the case to the general cause list. Issue 1 is accordingly resolved in favour of the Respondent.
ISSUE 2
The learned counsel for the Appellant reiterated that the claim of the Claimant was for an outstanding sum of N8,600,000.00. The Appellant admitted that the Respondent in her writ of summons claimed for interest of 21% on the judgment sum till Judgment. However, it was their contention that the Respondent in her affidavit in support of her claim did not depose to any fact upon which the computation of 21% interest per annum is based, neither did she show in her depositions the mutual consent between the parties on the issue of interest to be paid. Learned counsel for the Appellant therefore submitted that the Respondent did not fulfill the conditions precedent as established by law for the award of interest. He relied on SPDC Nig Ltd v. Alla Puta (2005) 9 NWLR (Pt. 931) 475 at 487; R.C.C. (Nig) Ltd v. R.P.C. Ltd (2005) 10 NWLR (pt. 934) 615 at 621; Afribank (Nig) plc v. Akwara (2006) 5 NWLR (Pt.974) 619 at 625.
The Appellant also contended that although the Claimant in his writ of summons claimed interest, yet, she did not state the date of commencement of the interest. Referring to paragraph 10 of the supporting affidavit of the Appellant, the learned counsel argued that as at January, 2003 the parties had not entered into the contract that led to the action at the lower court and as such the issue of interest could not have arisen as at January, 2003, Relying on Afribank (Nig) Plc v. Akwara (Supra), it was submitted for the Appellant that the learned trial Judge erred in law when he made order granting a pre-Judgment interest. He urged the court to allow the appeal and to set aside the Judgment of the trial court.
In reply, it was contended for the Respondent that it is implied that if the Appellant who acknowledged the delivery of the goods to it refused to pay in accordance with the agreement with the Respondent, late payment should attract some interest.
The learned counsel for the Respondent submitted that this falls within the exceptions to the general principle in respect of award of pre-judgment interest. He cited: Himmar Merchants Ltd v. Aliyu (1994) 5 NWLR (Pt. 347) 667 at 676. It was learned counsel’s further submission that it is a mercantile custom that a mercantile agent like the Respondent would be entitled to claim interest in respect of unpaid sums for supply of goods. He argued that the payment of interest is clearly an implied term which on the facts of this case must have been within the contemplation of the parties.
The Respondent’s counsel conceded to the principle as laid down in Afribank (Nig) Plc v. Akwara (2006) 5 NWLR (Pt.974) 619; R.C.C. (Nig) Ltd v. R.P.C. Ltd (2005) 10 NWLR (Pt. 934) 615 relied upon by the Appellant as the position of the law. However, he argued that from the English Common Law, from which we adopted this principle, the principle has been better explained and reduced in its perceived rigidity in later cases- owing to statutory intervention, He referred to Trans Trust SPRL v. Danubian Trading Co. Ltd (1952) 1 ALL ER 970; President of India v. LA Pintada CIA Mavegacion SA (1984) 2 AII ER 773.
The learned counsel in any case observed that there has been no statutory intervention on the issue of interest in Nigeria as there has been in England; he called for a review of the application of this common law rule in Nigeria.
On pre Judgment interest, it was submitted for the Respondent that there is no provision in the High Court of Rivers State civil Procedure Rules, 2006 on award of interest on debts or other claims before Judgment or on Judgment debt. However, he relied on section 2 of Rivers State Laws No. 01 2006; to submit that the lower court rightly adopted the procedure of awarding prejudgment interest in other to do substantial Judgment.
The learned counsel urged the court to uphold the Judgment of the court below on the issue of interest.
In resolving the issue, I will start with the consensus of the parties that the common law principle enunciated in London Chatham and Dover Ply Co. v. South Eastern Ply Co. (1893) AC 429; to the effect that in the absence of any agreement or statutory provisions for the payment of interest, a court has no power to award interest, simple or compound, by way of damages for the detention (i.e. late payment) of a debt.
This principle has been followed by our appellate courts in Nigeria. See Afribank (Nig) Plc v. Akwara (2006) 5 NWLR (Pt. 974) 619 at 625; R.C.C. (Nig) Ltd v. R.P.C. Ltd (2005) 10 NWLR (Pt.934) 615 at 621; TB Plc v. KHC Ltd (2006) 3 NWLR (Pt. 968) 443 at 447.
This position was succinctly put by the Supreme Court, when it was stated, per Ejiwunmi, J.S.C.:
“It is important to note that interest may be awarded in a case in two distinct circumstances, namely: (i) As of right; and (ii) where there is a power conferred by statute to do so, in exercise of the court’s discretion … where interest is being claimed as a matter of right, the proper practice is to claim entitlement to it on the writ and plead fact which shows such an entitlement in the statement of claim…, if even it was not claimed on the writ but facts are pleaded in the statement of claim and evidence given which show entitlement thereto, the court may, if satisfied with the evidence, award interest. Adjudication on the plaintiff’s right to interest in such a case is, like any other issue in the case, based on the evidence placed before the court. The evidence called at the trial in such a case will also establish the proper rate of interest and the date from which it should begin to run-whether from the accrual of the cause of action or otherwise”. See Texaco Overseas (Nig) Unltd v. Pedmar (2002)13 NWLR (Pt. 785) 526; Himma Merchants Ltd v. Aliyu (1994) 5 NWLR (Pt.347) 667 at 667 at 676.
It is correct that the Respondent in her writ of summons filed on 4th July, 2006 claimed for interest on the outstanding sum of N8,600,000.00 (Eight Million, six Hundred Thousand Naira) at the rate of 21% per annum until Judgment is given. The Respondent in her affidavit evidence in support of her claim did not depose to any fact upon which the computation of 21% per annum is based nor did she show in her depositions the contemplated agreement between the parties. The learned counsel for the Respondent argued that payment of interest was clearly implied owing to mercantile custom but unfortunately there is no affidavit evidence that the claim of interest is founded upon mercantile custom or trade usuage known to the parties.
The claim of interest for 21% per annum which pre-dates the Judgment of the trial court has no foundation in law and ought to have been disallowed, See Himma Merchants Ltd v. Aliyu (Supra); Afribank (Nig) Plc v. Akwara (2006) 5 NWLR (Pt. 974) 619.
Also owing to the long standing principle of law that a court cannot award to a claimant what he did not claim and or prove, Owena Bank v. Nigerian Stock Exchange (1997) 3 NWLR (pt.515); the Respondent who claimed interest of 21% per annum in his writ of summons on a sum of money had the duty to depose to credible evidence in his affidavit in support. This is supported by the Supreme Court decision that decision on a claimant’s right to interest is like any other issue in a case, based on the evidence placed before the court. See Texaco Overseas (Nig) UnLted v. Pedmar (Supra). As I had stated earlier, the Respondent who had no claim or evidence in her affidavit on the interest which he merely claimed in her writ without more had no claim or evidence before the court upon which the court could base a favourable decision for her. The learned trial Judge having failed to abide by the above principle of law was wrong when he granted the Respondent the 21% interest per annum which he neither claimed nor proved through her affidavit evidence.
Finally, from the affidavit of the Respondent in support of her claim under the undefended writ and the various exhibits attached, it can be deduced that the transaction between the parties which led to the suit in the trial court commenced on 31st July, 2003. See pages 4 -13 of the record, paragraph 10 of the affidavit in support. From the foregoing, the issue of interest could not have therefore arisen as at January, 2003. Accordingly the learned trial Judge was wrong in entering Judgment that the Appellant should pay to the Respondent 21% simple interest per annum on the N7,600,000.00 from 1st January, 2003.
In all I hold that the learned trial Judge erred when he awarded 21% pre-judgment interest on the Judgment sum from January, 2003. Issue 2 is therefore resolved in favour of the Appellant.
From the fowhich includes a One Million regoing, Appeal therefore succeeds in part and is to that extent allowed, I hereby set aside the judgment of the trial court in suit No. PHC/821/2006 to the extent that:
“The Defendant should pay to the Claimant 21% simple interest per annum on the said sum of N7,600,000.00 from 1/01/2003 to today 7/11/2006”.
I uphold the rest of the decision of the trial court as found at pages 46 – 47 of the record.
I make no order as to costs.

M. L. TSAMIYA, J.C.A.: I have read in advance the lead judgment of my learned brother Onyemenam J.C.A. just delivered and I agree with the reasoning and conclusion. The appeal partially succeeds and allowed.
No costs ordered.

CHIOMA NWOSU-IHEME (Ph.D) J.C.A.: I have had the advantage of reading in draft the lead judgment of my learned brother U. Onyemenam, JCA.
I agree with the reasoning and the conclusion reached therein that the appeal succeeds in part.
The portion of the judgment of the trial court in suit No PHC/821/2006 to the extent that:-
“The defendant should pay to the claimant 21% simple interest per annum on the said sum of N7.600,000.00 from 1/1/2003 up to today 7/11/2006.”
I also uphold the rest of the judgment of the trial court as found at pages 46-47 of the record of appeal. I make no order as to costs.

Appearances

M. E. Essien (Mrs), SAN with Aham Eke Ejelam,
R.I. Omufuma (Miss) and O. U. UlasiFor Appellant

AND

Dr. Adewale OlawoyinFor Respondent