FIRST BANK OF NIGERIA, PLC v. I.A.S. CARGO AIRLINES NIGERIA LTD
(2011)LCN/4654(CA)
In The Court of Appeal of Nigeria
On Monday, the 27th day of June, 2011
RATIO
SET OFF: WHAT THE TERM “SET-OFF” DENOTES
The term ‘set-off’ denotes a countermand by a defendant against the plaintiff in a suit, arising out of a transaction quite independent of the plaintiff’s claim.It also denotes a debtor’s right to reduce the amount of a debt by any sum the creditor owes the debtor; the counterbalancing sum owed by the creditor. It is also termed compensation stoppage.See BLACKS LAW DICTIONARY, 9th Edition 2009, at 1496, thus: Set-off is defined as a counter demand, generally of a liquidated debt growing out of an independent transaction for which an action might be maintained by the defendant against the plaintiff. See EUGENE A. JONES MANUAL OF EQUITY PLEADING AND PRACTICE 65 n.42 (1916). In essence, set-off is a cross-claim for a sum of money often raised as a defence in an action.Thus, it can only be pleaded if the claimant’s claim is for a sum of money.Inarguably, set-off cannot be made in any claim other than monetary.The plea of set-off serves as a shield, and not as a sword. See STOOKE VS. TAYLOR (1880) 5 QBD569 at 5.76. PER I.M.M. SAULAWA, J.C.A.
SET OFF: FUNDAMENTAL EFFECT OF A SUCCESSFUL SET-OFF
Ordinarily, the fundamental effect of a successful set-off is to reduce the plaintiff’s claim by the cross-claim.Judgment is therefore entered for the plaintiff for the amount by which his claim exceeds the set-off.A set-off cannot result in judgment for the defendant or the difference between the set-off and the claim where the former overtops the latter. In that case, the defendant’s only viable option is to file a cross-action or a counter-claim. PER I.M.M. SAULAWA, J.C.A.
ISSUES FOR DETERMINATION: NATURE OF THE ISSUES FOR DETERMINATION RAISED IN A BRIEF OF ARGUMENT
It is indeed a well settled principle, that issues for determination raised in a brief of argument must be precise and devoid of verbosity, irrelevant complexity and ambiguity. This is with a view to easing comprehension of the matters to be adjudicated upon in the appeal. As such, what counsel are normally required to argue are the issues raised in the briefs thereof. Grounds of appeal are not expressly argued in brief. Nonetheless, such issues raised in the brief must relate to the grounds of appeal, otherwise they are deemed at large, thus liable to be struck out, for being incompetent. See OCEANIC BANK INTERNATIONAL LTD VS. CHITEX IND. LTD (2001) FWLR (pt. 4678; DADA VS. DOSUNMU (2006) 18 NWLR (pt. 1010) 134; IDOKA VS. ERISI (1988) 2 NWLR (pt. 78) 563; ANIMASHAUN VS. UCH (1996) 10 NWLR (pt. 176) 65; ANPP VS. REC AKWA IBOM STATE (2008) 8 NWLR (pt. 1090) 453 at 511 paras . B – D; 527 paras. E – G. PER I.M.M. SAULAWA, J.C.A.
ISSUES FOR DETERMINATION: FUNDAMENTAL OBJECTIVE OF FORMULATING ISSUES FOR DETERMINATION BASED GROUNDS OF APPEAL
It is a trite principle, that the most fundamental objective of formulating issues vis-à-vis grounds of appeal, is to essentially to notify the adverse party of the nature of the case he would encounter in the appellate court. Thus, once what the appellant is appealing is somehow discernible from the brief thereof, it may not be necessary or even desirable to strike out the grounds of appeal or the issue, as doing so may tantamount to breaching the appellant’s fundamental right to fair hearing, duly enshrined in section 36 of the constitution of the Federal Republic of Nigeria, 1999. cherishingly, the current trend in the Nigerian temples of justice (courts) has been to ensuring that substantial justice, as against the outdated and archaic technical justice, is meted out to the parties at all times. See OGBORU VS. IBORI (2006) 17 NWLR (pt. 1069) 542; OGUNBI VS. KOSOKO (1991) 8 NWLR (pt. 210) 511; EKANEM VS. AKPAN (1991) 8 NWLR (pt. 211) 616; EZEGBU VS. FATB (1992) 1 NWLR (pt. 220) 669; PANACHE COMMUNICATIONS LTD VS. AIKHOMUC (1994) 2 NWLR (pt. 3257) 420; ANPP VS. REC AKWA IBOM STATE (supra) at 510, C – F; 537 – 538 H – B, respectively. PER I.M.M. SAULAWA, J.C.A.
AWARD OF INTEREST: DIFFERENCES BETWEEN ‘PRE-JUDGMENT INTEREST’ AND ‘POST-JUDGMENT INTEREST’ AWARDED BY COURTS OF LAW ; CIRCUMSTANCE UNDER WHICH A COURT IS PRECLUDED FROM AWARDING INTEREST
Instructively, there are two types of interest that are usually awarded by courts of law in the course of adjudication: namely, ‘pre-judgment interest’ and ‘post-judgment interest’. Invariably, the term pre-judgment interest denotes a statutorily prescribed interest which accrues either from the date of the loss, or from the date on which the complaint is instituted in court up to the time the final judgment is entered. It is usually calculated exclusively for liquidated sums. Also, termed ‘moratory interest’; or ‘interest as of right’. See BLACK’S LAW DICTIONARY, 9th Edition, 2009; IDAKULA VS. RICHARDS (2001) FWLR (pt. 14) 2439 at 2452 para 4. On the other hand, a post-judgment interest (discretionary interest) is that which a court is allowed by the Rules of courts to award a successful party or litigant at the conclusion of a trial. See HAUSA VS. FIRST BANK OF NIGERIA, a Court of Appeal judgment in Appeal No. CA/J/295/98 dated 12/04/2000 (unreported); IDAKULA VS. RICHARDS (supra) at 2452 – 2453 paragraphs H – D, per Akpabio, JCA (of blessed memory). It is a well settled principle, that a pre-judgment interest must be claimed by the plaintiff in his pleadings, and evidence duly adduced thereby proving same. Otherwise, the court is precluded from awarding interest. See IDAKULA VS. RICHARDS (supra) at 2450 paragraph D. Most instructively, the award of pre-judgment interest as a matter of principle, is usually predicated on the agreement of the parties themselves vis-‘a-vis the custom or practice governing the trade concerned. Thus, a court of law will readily award a pre-judgment interest where the plaintiff is a commercial bank and the rate of interest filed at the inception of the loan or over draft transaction. However, where the plaintiff happens to be as private person, or the loan is stated to be a “friendly loan”, and no interest charge is fixed at the time of entering into the loan agreement, the court is precluded from awarding interest in such circumstances. See UBN VS. SAX (NIG) LTD (1994) 8 NWLR (pt. 361) 150; UBN VS. OZIGI (1994) 3 NWLR (pt. 363)385; HAUSA VS. FIRST BANK OF NIG PLC (supra); UBN VS. SALAMI (1998) 3 NWLR (pt. 538); IDAKULA VS. RICHARDS (supra) at 2450 paragraphs D – F. PER I.M.M. SAULAWA, J.C.A.
I.M.M. SAULAWA, J.C.A. (Delivering the Leading Judgment): The notice of appeal for the instant appeal was filed on October 26, 2005 in the registry of the Lagos State High Court, Lagos Judicial Division. The appeal is a fall-out of the ruling of the court below, which was delivered by the Hon. Justice A.A. Phillips on the date in question in Suit No. ID/953/04.By the said ruling, the court below entered a judgment, in limine, against the Appellant in the sum of N7,581,213.94 at 21% interest per annum from 13/12/02 to 26/10/05, and 6% until the judgment is fully liquidated.
FACTS AND CIRCUMSTANCES LEADING TO THE APPEAL:
It’s discernible from the record of appeal, that on April 28, 2004 the Respondent filed in the court below both a writ of summons and a 24 paragraphed statement of claim seeking, against the Appellant, the following reliefs:
1. The sum of N8,435,363.88 representing the outstanding balance due to the Plaintiff vide courier services rendered for the period September to October 2002 respectively.Pursuant to the Courier Service contract of 1st of February, 1991 with interest at the rate of 21% per annum form the 13 December, 2002 until Judgment and thereafter in the rate of 6% per annum until the judgment sum is paid.
2. The sum of N2 Million representing general for breach of contract vide non-payment of the outstanding sum of N8,435,363.88 Pursuant to the Courier Service Contract.
3. An order compelling the defendant in full and unconditional compliance with clause 6 (II) of the Courier Service Contract to pay and or remit to the Plaintiff the outstanding balance of N8,435,363.88 due under the Courier Service Contract forthwith.
4. Cost of this Action.
The Appellant entered an appearance and filed processes, including the statement of defence thereof, in defence of the suit.By virtue of paragraphs 3 & 18 of the said statement of defence, the Appellant admitted the Respondent’s claim of N7, 581,213.94.He also pleaded a set-off for N24,162,543.76 against the Respondent.
On September 13, 2004, the Respondent filed a motion on notice thereby seeking the following orders:
1. An order entering final judgment against the Defendant/Respondent as per the Claimant/Applicant’s claims in this Suit.
ALTERNATIVELY
2. An order entering judgment for, the sum of N7,581,213.94 against the Defendant/Respondent vide admission contained in paragraph 3 and 18 of the Defendant/Respondent’s statement of Defence.
3. And for such other orders etc.
In reaction to the said motion, the Appellant filed a counter affidavit on 12/9/05, deposed to by one Ugo Uzoukwu Esq; a legal practitioner and staff of the Appellant, to the effect, inter alia, that the Respondent had no cause of action against the Appellant. Most particularly, it was deposed to in paragraph 13 of the said counter affidavit thus:
13. That the claimant having not refunded the Defendant’s N24,162,543.67 defrauded the Defendant, the Defendant decided to set off claimant’s N7,581,213.94 being sum owed claimant for courier services rendered to the Defendant for the period of September and October, 2002 in partial defrayal of the N24,162,543.67 loss sustained by the Defendant following the suppression of Lagos International Trade Fair Branch, clearing cheque No.03889 dated 13th March, 2001 forged by claimant’s staff in connivance and collusion with some fraudsters.
The motion in question eventually proceeded to trial. At the conclusion of which, the court below delivered the vexed ruling on October 26, 2005, to the following effect –
In conclusion therefore, I think it is appropriate to grant the alternate prayer of the claims before the court and judgment is accordingly entered in this suit against the Defendant in the sum of N7,581,213.94 (Seven Million, Five Hundred and Eighty One Thousand, Two Hundred and Thirteen Naira and Ninety Four Kobo) interest on the said sum shall be 21% per annum form 13/12/02 until today and hereafter at the rate of 6% per annum until the said judgment debt is fully liquidated.
As alluded to above, the Appellant was dissatisfied with the ruling of the court below in question.Thus, resulting in filing the instant appeal.The record of appeal was deemed to have been compiled and transmitted to this court on 22/02/10.That was the very day on which the Appellant’s application filed on 08/4/09, for an extension of time to compile and transmit the record, was duly granted.
On the said 22/02/10, the Appellant was equally granted leave to amend the original notice of appeal thereof. The Appellant’s amended ground of appeal was filed on 03/3/10. Both counsel filed and served their respective briefs of argument. The Appellant’s brief was filed on 25/3/10, within the 45 days accorded thereto by order 17 Rule 2 of the defunct Court of Appeal Rules, 2007 (which is in pari materia with order 18 Rule 2 of the Court of Appeal Rules, 2011). On the other hand, the Respondent filed the brief thereof on 13/4/10 in compliance with order 17 Rule 4 (1) of the Court of Appeal Rules, 2007 (which is in pari materia with order 18 Rules 4(1) of the Court of Appeal Rules, 2011).
On 18/4/2011, when the appeal last came up for hearing, both learned counsel adopted the submissions contained in their respective briefs of argument. Thus, resulting in reserving the appeal for delivery of judgment.
SUBMISSIONS OF LEARNED COUNSEL:
The Appellant’s learned counsel, Salubi Ebojoh Esq. has formulated three issues in the brief thereof, to wit –
3.1. Whether the appellant’s admission of debt subject to a set-off in its statement of defence amounts to an admission against interest which discharged the burden of proof on the respondent.
3.2. Whether the appellant’s set-off in it’s statement of defence as well as the documents relied upon by both parties to the suit did not raise triable issues that ought to have been resolved at a plenary trial of the suit.
3.3. Whether the lower court had the power to award pre-judgment on the judgment sum when the agreement between the parties did not contemplate interest, and entitlement to interest was not pleaded by the respondent.
The argument regarding the three issues is contained at pages 4 to 16 of the Appellant’s brief.
On issue No. 1, the findings of the court below at pages 153 – 154 of the record were copiously alluded to. It was submitted by the learned counsel, that the conclusion reached by the court below at the pages of the record in question is erroneous. It was alleged that paragraph 3 of the statement of defence formed the basis of the lower court’s decision.However, the court failed to consider paragraphs 4-10, 12, 13, 15 – 21 and 23 of the statement of defence.
It was contended, that paragraphs 3 & 18 (supra) considered by the lower court do not qualify as clear and unambiguous admission, having been made on a set-off. Reference was made to the cases of ORJI VS. DORJI ILE MILLS LTD (2009) 12 SC (pt. 111) 78 at 105 & ODUTOLA & ANR VS. PAPER SACK NIG. LTD (2006) 11 – 12 SC 60 at 75, in support of the argument that the Appellant’s submission in the statement of defence thereof, which was premised on a set-off, did not vindicate or reflect the legal provision of an admission in law. That, at best, the Respondent’s pleading “could be tantamount [to] approbating and reprobating at the same time, which itself would not have amounted to an admission in law.”Thus, the court has been urged upon to resolve this first issue in favour of the Appellant.
Issue No. 2 questions the finding of the lower court at pages 151 – 152 of the record. It was submitted that the lower court was in error. That, the court was under a duty to determine the parties’ rights under the agreement without reference to the Federal High Court’s case.
According to the learned counsel, the trial court’s reasoning that the Respondent’s liability under the Courier Service Agreement (which formed the bedrock of both parties’ claim ought to be determined by the Federal High Court) has no legal basis. It was contended, that the Appellant did all that was required, by providing necessary evidence in support of its defence of set-off, to defend the suit.See MACAULAY VS. NAL MERCHANT BANK LTD (1990) 4 NWLR (pt. 144) 283 at 312 paras. E – G.ADEBISI MACGREGOR ASSOCIATES LTD VS. NIG. MERCHANT BANK LTD (1996) 2 NWLR (pt. 431) 378 at 389; Order 10 (order 11) of the High Court of Lagos State (Civil Procedure) Rules.
Thus, having allegedly failed to consider all ramifications of the Appellant’s defence, the decision reached by the lower court was in error. The court has been urged to so hold, and accordingly resolve the second issue in favour of the Appellant.
The issue No. 3 relates to the interest awarded on the judgment sum, which the learned counsel argued was without any legal basis.It was postulated, that for a claim of interest to properly exist before a court, it must be specifically endorsed in the writ of summons and statement of claim. See HIMMA MERCHANTS LTD VS. ALIY (1994) 5 NWLR (pt. 347) 667 at 676 – 677; STEEL ROLLING COY LTD VS. BERNESTIELLI (NIG) LTD (1995) 8 NWLR (pt. 412) 701; BERLIET (NIG) LTD VS. KACHALLA (1995) 9 NWLR (pt. 420) 478; M & B ELECTRICAL CO. LTD VS. THE GOVT. OF CROSS RIVER STATE & ORS (2005) 6 NWLR (pt. 922) 471 at 486 paras. C – D; FBN LTD VS. MOBA FARMS LTD & ORS (2005) 8 NWLR (pt. 928) 492; ORDER 35, RULE 4 HIGH COURT OF LAGOS STATE (CIVIL PROCEDURE) RULES, 2004.
The court has been urged to hold that the awarding of pre-judgment interest by the trial court was without a legal basis, and resolve the 3rd issue in the Appellant’s favour.
In conclusion, the Appellant has prayed the court to uphold the appeal, and accordingly set aside the judgment of the court below in question.
On the other hand, the Respondent’s learned counsel, Emeka Okwaosa Esq. of Chancery Associates chambers, equally raised three issues at page 5 of the brief thereof.They are as follows:
3.1. ISSUE 1
Whether the Respondent is entitled to final judgment based on the appellants admissions in her pleadings.
3.2. ISSUES 2
Whether the “principle of set-off” will avail the appellant in respect of the admitted sum in her pleadings.
3.3. ISSUE 3
Whether the Respondent is entitled to interest claimed in respect of the Appellants admitted sum in her pleadings.
On the first issue, it was submitted, inter alia, that the respondent is entitled under the law to bring an application for a summary judgment, if it appears that the defence of Appellant discloses facts which make the application just, proper and right.See MACAULAY VS. MERCHANT BANK LTD (1999) NWLR (pt. 184) 283 at 305 – 368; UTC (NIG) LTD VS. PAMOTEI (1989) 2 NWLR (pt. 103) 244; HABIB (NIG) BANK LTD VS. EMMANUEL O.A. OYEBANJI (1998) 13 NWLR (pt. 580) 71 at 78.
Reference was made to section 75 of the Evidence Act, Cap 112 Laws of the Federation 1999; order 19 Rule 4 of the High Court of Lagos State (Civil Procedure) Rules, 2004; ANASON FARMS LTD VS. NAL MERCHANT LTD (1994) 3 NWLR (pt. 331) 241 at 251 – 253; T.A. Akinola: Law And practice Relating to Evidence in Nigeria, 2nd Edition at page 199 paragraph 11.21, respectively, to the effect that the lower court has the ample power to enter judgment based on Appellants’ admission, without waiting for determination of any question between the parties at the plenary.See also ORJU VS. DORJU MILLS LTD (2009) 12 SC (pt. 111) 78 at 105.
It was contended, that equity will not allow any body to approbate and reprobate at the same time.Thus, the Appellant having admitted some averments in the Respondent’s statement of claim, he would not be allowed to abandon such an admission. See AG LAGOS VS. PURIFICATION TECH. NIG LTD (2003) 16 NWLR (pt. 845) 1.
The court has been urged to uphold the decision of the lower court.
On issue No. 2, Fidelis Nwadialo’s Book, civil procedure in Nigeria, 2nd Edition chapter 20, at pages 390 – 392, was copiously referred to in the Respondent’s brief.The fact that the Appellant did not file a counter claim in the court below was also alluded to. It was, inter alia, submitted that the Appellant’s defence of set-off was not properly before the lower court. That, a set-off in law is neither a qualified admission, nor a bar to the consequences of an admission. And that the Appellant’s suit at the Federal High Court is a deliberate, surreptitious and tactical ploy to delay and avoid meeting the financial commitment to the Respondent. The Respondent is thus entitled to enjoy the fruit of the said judgment. The court has been urged to hold that the plea of set-off will not avail the Appellant, and accordingly resolve the 2nd issue in the Respondent favour.
On the 3rd issue, it was submitted, that the Respondent’s claim for interest was properly pleaded and endorsed in the writ of summons and statement of claim. See BABATUNDE AJAYI VS. TEXACO NIG. LTD & ORS (1987) 11 SC 127; OKAGBUE VS. ROMHINE (1982) 5 SC 133 at 153; EKWUNIFE VS. WAYNE (WA) LTD (1989) 5 NWLR 422 at 445; INTERNATIONAL OFFSHORE CONST. LTD VS. SIN LTD (2003) 16 NWLR (pt. 845) 157 (ration 5).
It was equally contended, that the Appellant had a duty to join issues, specifically traverse, and challenge the interest claimed by the Respondent in their pleadings and/or counter affidavit to the motion for summary judgment. See AG FED. VS. AG ABIA STATE (NO. 2) (2002) 6 NWLR (pt. 764) 542 at 677 – 678 paragraphs H – A; NWOKORO VS. ONUMA (1999) 2 NWLR (pt. 631) 342 at 358 – 359 paras. H – B; ANASON FARMS LTD VS. NAL MERCHANT BANK LTD (1994) 3 NWLR (pt. 331) 241.
It was further contended, that the lower court has the power to award post judgment interest. See order 35 Rule 4 of the High Court of Lagos State (Civil Procedure) Rules, 2004; FBN LTD VS. MOBA FARMS LTD & ORS (2005) 8 NWLR (pt. 928) 492.
On the whole, the court has been urged to hold that the award of interest by the court below was in order, and accordingly resolve the 3rd issue in favour of the Respondent.
I have amply considered the nature and circumstances surrounding the appeal, the submissions of the learned counsel, contained in the respective briefs of argument thereof vis-‘E0-vis the record of appeal, as a whole. I am of the paramount view, that the three issues formulated in the respective briefs of the parties are not at all mutually exclusive. The three issues raised in the Appellant’s brief were indicated to have been distilled from the three grounds of appeal.
It is indeed a well settled principle, that issues for determination raised in a brief of argument must be precise and devoid of verbosity, irrelevant complexity and ambiguity.This is with a view to easing comprehension of the matters to be adjudicated upon in the appeal.As such, what counsel are normally required to argue are the issues raised in the briefs thereof.Grounds of appeal are not expressly argued in brief. Nonetheless, such issues raised in the brief must relate to the grounds of appeal, otherwise they are deemed at large, thus liable to be struck out, for being incompetent. See OCEANIC BANK INTERNATIONAL LTD VS. CHITEX IND. LTD (2001) FWLR (pt. 4678; DADA VS. DOSUNMU (2006) 18 NWLR (pt. 1010) 134; IDOKA VS. ERISI (1988) 2 NWLR (pt. 78) 563; ANIMASHAUN VS. UCH (1996) 10 NWLR (pt. 176) 65; ANPP VS. REC AKWA IBOM STATE (2008) 8 NWLR (pt. 1090) 453 at 511 paras. B – D; 527 paras. E – G.
In the instant case, the original notice of appeal, dated 26/10/05, is contained at pages 144 – 147 of the Record. As alluded to above, that original notice of appeal was amended, with the leave of court duly granted on 22/02/10. The amended notice of appeal was filed on 03/3/10. Both grounds 3.2 and 3.3 of the original grounds of appeal were devoid of particulars. Not surprisingly, their being substituted with the new grounds 3 .1 and 3.2, respectively.
A critical, albeit dispassionate, appraisal of the new grounds 3.1 & 3.2 and the original ground 3.3. of the grounds of appeal have made me to appreciate that the three issues relate to the three grounds of appeal in question, seriatim. That’s to say, the new ground 3.1 relates to issue No. 1; 3.2 to issue No. 2; and the original ground 3.3 relates to issue No. 3 of the Appellant, respectively.
It is a trite principle, that the most fundamental objective of formulating issues vis-‘E0-vis grounds of appeal, is to essentially to notify the adverse party of the nature of the case he would encounter in the appellate court.Thus, once what the appellant is appealing is somehow discernible from the brief thereof, it may not be necessary or even desirable to strike out the grounds of appeal or the issue, as doing so may tantamount to breaching the appellant’s fundamental right to fair hearing, duly enshrined in section 36 of the constitution of the Federal Republic of Nigeria, 1999. cherishingly, the current trend in the Nigerian temples of justice (courts) has been to ensuring that substantial justice, as against the outdated and archaic technical justice, is meted out to the parties at all times. See OGBORU VS. IBORI (2006) 17 NWLR (pt. 1069) 542; OGUNBI VS. KOSOKO (1991) 8 NWLR (pt. 210) 511; EKANEM VS. AKPAN (1991) 8 NWLR (pt. 211) 616; EZEGBU VS. FATB (1992) 1 NWLR (pt. 220) 669; PANACHE COMMUNICATIONS LTD VS. AIKHOMUC (1994) 2 NWLR (pt. 3257) 420; ANPP VS. REC AKWA IBOM STATE (supra) at 510, C – F; 537 – 538 H – B, respectively.
In the light of the above postulations, I have deemed it expedient to adopt the three issues raised in the Appellant’s brief for the determination of this appeal.
ISSUES 1 & 2:
I have deemed it expedient to deal with both issues 1 & 2 together.
The first issue raises the vexed question of whether or not the Appellant’s admission of debt, subject to a set-off in the statement of defence thereof, amounts to an admission against interest which discharged the burden of proof on the Respondent.The issue, as explained above, relates to ground 1 of the grounds of appeal. The second issue, on the other hand, raises the question of whether the Appellant’s set-off has not raised triable issues that ought to have been resolved at a plenary trial of the suit. The issue relates to ground 2 of the grounds of appeal.
It’s not at all in doubt, that parties are ad idem that the gravamen of both the first and second issues is predicated on the finding of the trial court at pages 153 – 154 of the record of appeal. At the said pages, the court below copiously alluded to paragraphs 3 & 18 of the statement of defence, and thereby came to the conclusion thus:
“In both these paragraphs therefore the defendant had admitted owing the claimant the sum of N7,581,213.94 as opposed to the sum of N8,435,363.88 which the claimant is claiming against it in this suit.”
Both paragraphs 3 & 18 of the said statement of defence are to the following effect:
3.Subject to the set-off hereinafter pleaded, the Defendant admits paragraphs 7, 8, 9, 10, 12, 13, 15, 16, 17, 18, 19, 21 and 23 of the statement of claim only to the extent that the sum due to the Plaintiff for courier service provided is the cumulative sum of N7,581,213.94 and not the sum of N8,435,363.88 claimed by the plaintiff.
. . .
18. The Defendant will seek to set off the said sum of N7,581,213.94 in satisfaction or extinction of the plaintiff’s claim herein which sum is only a part of the sum N24,162,543.76 due to the Defendant from the plaintiff.
The view of the Appellant’s learned counsel is that the conclusion reached by the lower court is erroneous. That, the qualified admission by the Appellant in the statement of defence in question is allegedly not sufficient in law to discharge the burden of proof on the Respondent to establish the claim thereof in a plenary trial of the suit.
By virtue of the provision of order 17, Rule 6 of the High Court of Lagos State (Civil Procedure) Rules, 2004, where any defendant seeks to rely upon any ground as supporting a right of set-off or counter claim, he shall state in his [statement of] defence specifically that he does so by way of either set-off or counter claim.
The term ‘set-off’ denotes a countermand by a defendant against the plaintiff in a suit, arising out of a transaction quite independent of the plaintiff’s claim.It also denotes a debtor’s right to reduce the amount of a debt by any sum the creditor owes the debtor; the counterbalancing sum owed by the creditor. It is also termed compensation stoppage.See BLACKS LAW DICTIONARY, 9th Edition 2009, at 1496, thus:
Set-off is defined as a counter demand, generally of a liquidated debt growing out of an independent transaction for which an action might be maintained by the defendant against the plaintiff. See EUGENE A. JONES MANUAL OF EQUITY PLEADING AND PRACTICE 65 n.42 (1916).
In essence, set-off is a cross-claim for a sum of money often raised as a defence in an action.Thus, it can only be pleaded if the claimant’s claim is for a sum of money.Inarguably, set-off cannot be made in any claim other than monetary.The plea of set-off serves as a shield, and not as a sword. See STOOKE VS. TAYLOR (1880) 5 QBD569 at 5.76.
Ordinarily, the fundamental effect of a successful set-off is to reduce the plaintiff’s claim by the cross-claim.Judgment is therefore entered for the plaintiff for the amount by which his claim exceeds the set-off.A set-off cannot result in judgment for the defendant or the difference between the set-off and the claim where the former overtops the latter. In that case, the defendant’s only viable option is to file a cross-action or a counter-claim.
In contradistinction to a set-off, a counter-claim is substantially a cross-action, and not merely a defence to the plaintiff’s claim.See ORAGBADE VS. ONITIJU (1962) 1 ALL NLR 33 at 36 per Bairamian, JSC; IGE VS. FARINDE (1994) 98 SCNJ (pt. 2) 284 at 305. It is indeed a well settled principle, that a counter claim is to all intents and purposes a distinct action by itself. However, the defendant, for speedy and convenient trial and disposal of the action, usually chooses to incorporate the counter claim in the [statement of] defence thereof.See OYEGBOLA VS. ESSO W.A. INCORPORATED (1966) 1 ALL NLR 170 at 171 per Bairamian, JSC; OGBONNA VS. AG IMO STATE (1992) 1 NWLR 647 at 675; ODUNSI VS. BAMGBALA (1995) 5 SCNJ 276 at 286; DABUP VS. KOLO (1993) 12 SCNJ1; UNCON OF SOVIET REPUBLICS VS. BELAIEW (1925) ALL ER 369.
In the case of ORAGBADE VS. ONITIJU (supra) in particular, Bairamian, FJ; was reported to have alluded to the provision of Order 20, Rule 3 of the Western Nigerian High Court (Civil Procedure) Rules, which were to the following effect:
A defendant in an action may set off, or set up by way of counter claim, against the claims of the plaintiff, any right or claim whether such set-off or counter claim sound in damages or not, and such set-off or counter claim shall leave the same effect as a statement of claim in a cross-action, so as to enable the court to pronounce a final judgment in the same action both on the original and on the original cross-claim. But the court may, if in the opinion of the court such set-off or counter claim cannot be conveniently disposed of in the pending, or ought not to be allowed, refuse permission to the defendant to avail himself thereof.
In ORAGBADE’S case (supra), the plaintiff filed the case in the High Court (WN) on his own behalf and on behalf of the Ifetedo community claiming an area of land as communal property.The Defendant filed a counter claim seeking a declaration of title to the land in dispute. The plaintiff entered a defence to the counter claim. He did not however obtain the leave of court to defend the action in a representative capacity. The evidence adduced at the trial established that the plaintiff and others claimed to have each an individual farm of his own within the land in dispute.
The trial High Court disposed the plaintiff’s claim and granted the counter claim.The plaintiff appealed against the High court’s decision to the Federal Supreme Court. In dismissing the appeal, the Federal Supreme Court held, inter alia, thus:
In substance, a counter claim is a cross-action. The plaintiff in the present case the defendant in the counter claim; but there was no order authorizing him to defend the counter claim on behalf of the Ifetedo community.That is the flaw in the case of Chief Onitiju and the declaration in his favour. Per Bairamian, F.J; at 36 lines 36 – 40.
In the instant case, it’s not in doubt that the Appellant has, vide the statement of defence thereof, admitted having been indebted to the Respondent.See paragraph 3 of the statement of defence.Appellant admits paragraphs 7, 8, 9, 10, 12, 13, 15, 16, 17, 18, 19, 20, 21 & 23 of the statement of claim thus:
3. Subject to the set-off hereinafter pleaded, the Defendant admits paragraphs 7, 8, 9, 12, 13, 18, 19, 20, 21 and 23 of the statement of claim only to the extent that the sum due to the Plaintiff for counter service provided is the cumulative sum of N7,581,243.94 and not the sum of N8,435,363.88 claimed by the plaintiff.
I think, it’s pertinent to stress that paragraphs 4 – 17 of the Appellant’s statement of defence are to the effect that the Respondent had connived with some of the staff thereof to defraud the Appellant of the sum of N24,162,543.67. The said allegations are undoubtedly criminal in nature. See section 138(1) of the Evidence Act, CAP. E14, Laws of the Federation of Nigeria, 2004. By virtue of the provisions of section 138(1) of the Evidence Act (supra), if the commission of a crime by a party to any proceeding is directly in issue, in any proceeding either Criminal or Civil, it must be proved by the complainant beyond reasonable doubt.
As averred in paragraph 17 of the statement of Defence –
3 . . . the matter in respect of this fraud was in fact reported to the police whereby the police in their investigation report indicted and held the plaintiff and/or her staff Hilary Ojiah responsible.The Defendant will found and rely on the police investigation report at the trial of this suit.
That is not the end of the matter, however. In paragraph 14 of the said statement of defence, the Appellant has averred thus:
14. The Defendant on 16/4/2004 instituted an action (suit No. FHC/L/CS/343/04) at the Federal High Court, Lagos against the plaintiff, Diamond Bank Limited, Zenith International Bank Limited, Mr. Yusuf Usman, Amina Yusuf (Mrs.), Abubakar Sadiq (All Trading under the name and style Abumaita Commercial Enterprises) and Chief Okey Aneke jointly and/severally for the recovery of the sum of N24,162,543.76 defrauded the Defendant through the said/or counter cheque.
As alluded to above, the Respondent’s suit LD/953/2004, the subject matter of the instant appeal, was filed in the court below on April 28, 2004.It was filed exactly twelve (12) days after the Appellant’s Suit No. FHC/L/CS/343/04 was filed in the Federal High Court, Lagos Judicial Division against the Respondent.The Respondent did not deem it expedient to controvert the Appellant’s averments regarding paragraphs 3 – 18 of the statement of defence. Instead the Respondent deemed it fit to file the motion on notice (LD/953/2004) seeking an order entering final judgment against the Appellant as per the claim or in the alternative the sum of N7,581,213.94 vide the admission in paragraphs 3-18 of the statement of defence.
As alluded to above, the effect of a successful set-off is to reduce the plaintiff’s claim by the cross-claim.Thus, judgment shall be entered for the plaintiff regarding the amount his claim exceeds the set-off. By implication, therefore, the amount claimed by a defendant in a set-off should not exceed the plaintiff’s claim.That, I believe is the intendment of the provision of Order 17 Rule 12 of the High Court of Lagos State (Civil procedure) Rules, 2004 (supra), which is to the effect that –
12.Where in an action, a set-off or counter claim is established as a defence against the claimant’s claim; the judge may, if the balance is in favour of the defendant, give judgment for the defendant for such balance, or may otherwise adjudge to the defendant such relief as he may be entitled to upon the merits of the case.
Indeed, it’s trite, that a set-off may liquidate, wipe out or extinguish the plaintiff’s claim.However, the exception is that a set-off cannot result in judgment for the defendant or the difference between the set-off and the plaintiff’s claim, especially where the set-off exceeds the claim. As postulated above, in such a case, it’s more appropriate for the defendant to file a cross-action e.g. a counter claim.Most unfortunately for the Appellant, however, the amount set-off in the statement of defence (N24,162,543.76) is four times more than the amount claimed by the
Respondent in the writ of summons and statement of claim thereof (N8,435,363.88).
In the circumstance, in view of the fact that the other case (FHC/L/CS/343/04) instituted by the Appellant against the Respondent and others was still pending in the Federal High Court, the admission in paragraph 3 of the statement of defence has amounted to an admission against the Appellant, thereby discharging the burden of proof upon the Respondent.And I so hold The answer to both issues 1 & 2 should be in the affirmative, and they are accordingly resolved in favour of the Respondent.
ISSUE NO. 3
The 3rd issue raises the vexed question of whether the lower court had the power to award pre-judgment interest on the judgment sum when the judgment between the parties did not contemplate interest, as same was not pleaded by the Respondent.Having accorded an ample regard upon the submission of the learned counsel in the respective briefs thereof, my answer to that issue is, without much ado, in the affirmative.
Instructively, there are two types of interest that are usually awarded by courts of law in the course of adjudication: namely, ‘pre-judgment interest’ and ‘post-judgment interest’.Invariably, the term pre-judgment interest denotes a statutorily prescribed interest which accrues either from the date of the loss, or from the date on which the complaint is instituted in court up to the time the final judgment is entered.It is usually calculated exclusively for liquidated sums.Also, termed ‘moratory interest’; or ‘interest as of right’.See BLACK’S LAW DICTIONARY, 9th Edition, 2009; IDAKULA VS. RICHARDS (2001) FWLR (pt. 14) 2439 at 2452 para 4.
On the other hand, a post-judgment interest (discretionary interest) is that which a court is allowed by the Rules of courts to award a successful party or litigant at the conclusion of a trial.See HAUSA VS. FIRST BANK OF NIGERIA, a Court of Appeal judgment in Appeal No. CA/J/295/98 dated 12/04/2000 (unreported); IDAKULA VS. RICHARDS (supra) at 2452 – 2453 paragraphs H – D, per Akpabio, JCA (of blessed memory).
It is a well settled principle, that a pre-judgment interest must be claimed by the plaintiff in his pleadings, and evidence duly adduced thereby proving same.Otherwise, the court is precluded from awarding interest.See IDAKULA VS. RICHARDS (supra) at 2450 paragraph D.
Most instructively, the award of pre-judgment interest as a matter of principle, is usually predicated on the agreement of the parties themselves vis-‘a-vis the custom or practice governing the trade concerned.Thus, a court of law will readily award a pre-judgment interest where the plaintiff is a commercial bank and the rate of interest filed at the inception of the loan or over draft transaction.However, where the plaintiff happens to be as private person, or the loan is stated to be a “friendly loan”, and no interest charge is fixed at the time of entering into the loan agreement, the court is precluded from awarding interest in such circumstances.See UBN VS. SAX (NIG) LTD (1994) 8 NWLR (pt. 361) 150; UBN VS. OZIGI (1994) 3 NWLR (pt. 363)385; HAUSA VS. FIRST BANK OF NIG PLC (supra); UBN VS. SALAMI (1998) 3 NWLR (pt. 538); IDAKULA VS. RICHARDS (supra) at 2450 paragraphs D – F.
In the instant case, it’s rather obvious that the Respondent has in both the writ of summons and statement of claim thereof claimed –
“Interest at the rate of 21% per annum from the 13 December, 2002 until judgment and thereafter at the rate of 60% per annum until the judgment sum is paid.”
In awarding the vexed interest, the court below was recorded, at page 156 of the Record, to have ordered thus:
“Interest on the said sum shall be 21% per annum from 13/12/02 until today and hereafter at the rate of 61% per annum until the said judgment is fully liquidated”.
Hence, the claim of the Respondent having been admitted by the Appellant in paragraphs 3 & 24 of the statement of defence thereof, the court was right in awarding the pre-judgment interest in question.I am satisfied that both parties were ad idem on the interest, and the rate thereof to be paid by the Appellant.And I so hold.
It is a trite principle, that facts admitted by a party need no proof. See section 75 of the Evidence Act (supra).
By virtue of the provision of section 75 of the Evidence Act (supra), no fact need be proved in any civil proceedings which the parties thereto or their agents agree to admit at the hearing, or which, before the hearing, they agree to admit by any writing under their hands, or which by any rule or pleading in force at the time they are deemed to have admitted by their pleadings.Of course, the court may, in its discretion, require the facts so admitted to be proved otherwise than by such admissions. In the instant case, there is no gainsaying the fact, that the court below was right in choosing not to exercise the discretionary power thereof in requiring that the facts admitted in paragraph 3 of the statement of defence be proved otherwise than by the admission therein.
Undoubtedly, the answer to the 3rd issue is in the affirmative and same is hereby resolved in favour of the Respondent, as well.
In the light of the above postulations, having resolved all the three issues against the Appellant, I have no hesitation whatsoever in coming to the most inevitable conclusion that this appeal is devoid of merits. And it’s hereby dismissed by me.The ruling of the court below, delivered on October 28, 2005, is hereby up held.
There shall be an order of costs of N50,000.00 in favour of the Respondent, against the Appellant.
OLUKAYODE ARIWOOLA, J.C.A.: I had the privilege of reading the draft of the lead judgment of my learned brother, SAULAWA, J.C.A. In my view the three issue raised were exhaustively examined and resolved against the Appellant. I am in agreement with the reasoning therein and the conclusion arrived thereat.
I abide by the consequential orders including the order on costs.
ADAMU JAURO, J.C.A.: I have been afforded an opportunity of reading in advance the lead judgment of my learned brother, I. M. M. Saulawa, JCA. I am in agreement with the reasoning and conclusion expressed in the judgment, which I also adopt as mine.
For the reasons adumbrated in the lead judgment, I also hold that the appeal is lacking in merit. I join my brother in dismissing the appeal. The ruling of the court below delivered on 28th October, 2005 is hereby affirmed.
I also abide by the consequential orders made in the lead judgment, including that of costs.
Appearances
Abah Onah Esq.For Appellant
AND
Emeka Okwuosa Esq.For Respondent
