GENERAL TYRES W.A. LTD & Ors v. SPRING BANK PLC. (2010)

GENERAL TYRES W.A. LTD & Ors v. SPRING BANK PLC.

(2010)LCN/3987(CA)

In The Court of Appeal of Nigeria

On Friday, the 16th day of July, 2010

CA/L/389/2004

RATIO

FAIR HEARING: WHAT THE PRINCIPLE OF FAIR HEARING AS ENTRENCHED IN THE CONSTITUTION ENTAILS

It must be stated from the onset that the principles of fair hearing are entrenched constitutional provisions. Where therefore a party takes another to court, the audi alteram patem principle must be seen to have been upheld in the determination of the dispute. That is why S. 241(2) of the 1999 Constitution entrenched the right of a defendant to defend a suit brought against him. It provides as follows: “(2) Nothing in this section shall confer any right of appeal (a) from a decision of the Federal High Court or any High Court granting unconditional leave to defend an action” This provision entrenches S. 36(1, 2 & 3) of the 1999 Constitution that provide as follows: 36(1) In the determination of his civil rights and obligations, including any question or determination by or against any government or authority, a person shall be entitled to a fair hearing within a reasonable time by a court or other tribunal established by law and constituted in such manner as to secure its independence and impartiality. 36(2) With out prejudice to the foregoing provisions of this section, a law shall not be invalidated by reason only that it confers on any government or authority power to determine questions arising in the administration of a law that affects or may affect the civil rights and obligations of any person if such law: (a) provides for an opportunity for the person whose rights and obligations may be affected to make representations to the administering authority before that authority makes the decision affecting that person; and (b) contains no provision making to determination of the administering authority final and conclusive. 36(3) The proceedings of a court or the proceedings of any tribunal relating to the matters mentioned in subsection (1) of this section (including the announcement of the decisions of the court or tribunal shall be held in public. PER R.C. AGBO, J.C.A.

SUMMARY JUDGMENT: WHETHER THE SUMMARY JUDGMENT PROCEDURE IS A SPECIAL PROCEDURE MEANT TO PROVIDE A FAST PROCESS TO RECOVER A DEBT OR LIQUIDATED MONEY DEMAND

Order 11 Rule 1 of 1994 High Court Civil Procedure Rules which provide for the summary judgment in the Lagos State High Court. These provisions, to the extent that they bar a defendant from defending a suit brought against him, are intrinsically unconstitutional. This procedure is a special procedure meant to provide a fast process to recover a debt or liquidated money demand which debt is virtually uncontested. To the extent that the rules provide an opportunity for fair hearing and the doing of substantial justice, it can be said to come within the ambit of S. 36 of the 1999 constitution. PER R.C. AGBO, J.C.A.

SUMMARY JUDGMENT: WHAT THE DEFENDANT MUST DISCLOSE TO SUCCEED IN AVOIDING A SUMMARY JUDGMENT

SET OFF AND COUNTER-CLAIM: EFFECT OF SET OFF AND COUNTER-CLAIM IN A CIVIL PROCEEDING

Set off and counter-claim are recognized defences that avail a defendant in a civil proceeding and no party should be precluded from taking advantage of these defences in their cases which may go for trial on the merits. PER R.C. AGBO, J.C.A.

JUSTICES

RAHPAEL CHIKWE AGBO Justice of The Court of Appeal of Nigeria

ADZIRA GANA MSHELIA Justice of The Court of Appeal of Nigeria

ADAMU JAURO Justice of The Court of Appeal of Nigeria

Between

1. GENERAL TYRES W.A. LTD
2. ALHAJI BODE ABDULLAHI
3. CHIEF R.O. JINADU Appellant(s)

AND

SPRING BANK PLC. Respondent(s)

R.C. AGBO, J.C.A. (Delivering the Leading Judgment) This is an appeal against the judgment of the High Court of Lagos State in Suit No. LD/439/2003, a judgment obtained under the summary judgment procedure of the High Court of Lagos State. The claimant in its writ of summons had claimed of the appellants as follows:
“1. The plaintiff claims against the defendants jointly and severally the sum of N73,534,488.00 (Seventy Three Million, Five Hundred and Thirty Four Thousand, Four Hundred and Eighty-Eight Naira) being the indebtedness of the 1st defendant guaranteed by the 2nd and 3rd defendants as at 21st January, 2003 on the Back to Back Letter of Credit and Warehousing finance facility per its offer letter of 20th February, 2001.
2. The plaintiff claims interest on the above amount at the rate of 21% per annum until the total debt is fully liquidated.”
This was the claim as at 28th February, 2003 when the suit was filed. On 17th March, 2003 the plaintiff filed a summons for judgment before the trial court in the following terms:-
“(1) Leave to enter final judgment for plaintiff/applicant against the defendants/respondents jointly and severally for the sum of N65,058,142.06k (Sixty Five Million, Fifty Eight Thousand, One Hundred and Forty-Two Naira Six Kobo) being indebtedness of 1st defendant guaranteed by 2nd and 3rd defendants as at 7th March, 2003 on the Back to Back Letters of Credit and Warehousing facility granted by the plaintiff/applicant to the 1st defendant as per letter of offer dated 20th February, 2001.
(2) Interest on the debt of N65,058,142.06 at 21% per annum from 7th March, 2003 until the date of judgment and thereafter at 7.5% until debt is fully liquidated.”
This application was supported by a 37 paragraph affidavit which is reproduced hereunder-
“I, AJIBOLA ODU, Male, Nigerian citizen, Christian, Legal Officer of Omega Bank Plc of PCI, Engineering Close, Victoria Island, Lagos do hereby make oath and say as follows:
1. That I am the Legal Officer at the plaintiff/applicant’s Apapa Branch where the 1st defendant operates Account No. 0021004122717.
2. That by virtue of my position, I am conversant with the facts of this case and I have the consent and authority of the applicant to depose to this affidavit.
3. That the 2nd and 3rd defendants are Directors and Guarantors of the credit facility granted to the 1st defendant by the plaintiff/applicant.
4. That the 1st defendant deals with importation and exportation of tyres.
5. That sometimes in the year 2001, the 1st defendant applied to the plaintiff for credit facility to import tyres from overseas.
6. That the plaintiff by its offer letter dated 20th February, 2001 granted to the 1st defendant Back to Back Letter of Credit for the sum of N100 Million and Warehousing facility for N50 Million. Copy of the offer letter is attached as Exhibit DM1.
7. That the facility was to be used for opening Letters of Credit in favour of the 1st defendant’s overseas suppliers.
8. That the facility was to enable the 1st defendant import tyres.
9. That the 1st defendant accepted the terms and conditions of the plaintiff’s offer letter.
10. That one of the conditions of the offer is execution of personal guarantee in favour of the plaintiff by the 2nd and 3rd defendants.
11. That the 2nd and 3rd defendants executed personal guarantee to the tune of N150 Million for the facility granted to the 1st defendant by the plaintiff. Copies of personal guarantee marked exhibit DM2A and DM2B.
12. That the plaintiff by its letter of 13th March, 2001 reduced the C.O.T. and percentage (%) of commission payable on the Letters of Credit opened on behalf of the 1st defendant with its overseas suppliers. Copy of the letter marked Exhibit DM3.
13. That the facility granted to the 1st defendant and guaranteed by the 2nd and 3rd defendant was to expire by 28th February, 2002.
14. That the plaintiff established the following Letters of Credit in favour of Continental Tyres S.A. Limited on behalf of the 1st defendant.
LC NO.     USD VALUE     NAIRA EQUIVALENT
1. 145/01     45,138.00        5,064,483.00
2. 146/01     31,800.00        3,567,960.00
3. 149/01     24,399.50        2,737,623.90
4. 153/01     83,065.00        9,319,893.00
5. 154/01     85,200.00        9,559,440.00
6. 155/01     24,900.00        2,793,780.00
7. 156/01     40,194.00        4,509,766.80
8. 157/01     22,022.00        2,470,868.40
9. 158/01     98,070.00        11,003,454.00
10. 159/01     31,800.00        3,567,960.00
11. 129/01     32,886.75        3,693,182.03
15. That the plaintiff established LC No. 152/01 for the 1st defendant in favour of VPS for the sum of USD 29,916.25 Naira equivalent being N3,356,603.25k.
16. That the plaintiff established LC Nos. 160/01 and 168/01 for the 1st defendant in favour of Continental A.G. and Watico CC for the sum of USD 251,635.00 and USD 11,550.00 naira equivalent being N28,233,477.00 and N1,294,755.00 respectively.
17. That the total value of LCs opened on behalf of the 1st defendant is USD 812,576.00 and naira equivalent being N91,173,246.38.
18. That other LCs were established for the 1st defendant which were cancelled due to expiration total value of which was N51,481,831.80k.
19. That the cancelled LCs were repurchased from Central Bank of Nigeria at a value of N51,481,831.80k which sum was credited into the 1st defendant’s account. Copy of the advice from the Central Bank of Nigeria is marked Exhibit DM4.
20. That the 1st defendant failed to contribute its 20% equity contribution contained in the offer letter.
21. That the plaintiff paid import duty and other clearing charges on behalf of the 1st defendant.
22. That all payments made on behalf of the 1st defendant are reflected in the 1st defendant’s statement of account. Copy of the 1st defendant’s statement prepared in the normal course of banking transaction is attached as Exhibit DM5 in the computer printout.
23. That the 1st defendant also withdrew sum in excess of N4,400,000.00 from an account meant for opening Letters of Credit. This is reflected on the bank statement attached.
24. That the plaintiff paid N.P.A. dues, Nafdac levies and Warehousing charges on behalf of the 1st defendant.
25. That tripartite warehousing agreement was executed between 1st defendant, plaintiff and Alliaz Maritime for purpose of warehousing the imported goods.
26. That the plaintiff paid the warehousing charges.
27. That the debt owed the plaintiff by the 1st defendant has become due and payable.
28. That the plaintiff has demanded for repayment from all the defendants. Copies of letters of demand marked Exhibits DM5A – DM5C.
29. That the defendants have failed to repay the debt despite demand by the plaintiff.
30. That the debt owed the plaintiff by the defendants is a liquidated amount.
31. That the defendants have entered appearance to the action. Copy of memorandum of appearance marked exhibit DM6.
32. That defendants have no defence to this action and claims therein.
33. That the plaintiffs claim is for the sum of N65,058,142.06k (Sixty Five Million, Fifty Eight Thousand, One Hundred and Forty-Two Naira, Six Kobo) being outstanding indebtedness of the 1st defendant guaranteed by the 2nd and 3rd defendants on the Back to Back Letter of Credit facility of N100 Million and Warehousing facility of N50 Million as per offer letter of 20th February, 2001.
34. That the outstanding debt includes cost of amendment of LCs, cash withdrawals by 1st defendant, interest on the facility, C.O.T, VAT on COT, F.G.N import duty, Nafdac levy, warehousing charges and other charges as shown in the bank statement.
35. That the plaintiff’s claim against the defendants jointly and severally in the sum of N65,058,142.06k as at 7th March, 2003 interest at 21% from 7th March, 2003 to date of judgment and thereafter at 7.5% until debt is fully liquidated.
36. That it is in the interest of justice to enter final judgment for the plaintiff against the defendants.
37. That the contents of this affidavit are true and correct and I swear to this affidavit bonafide.”
In answer to this application, the appellants filed an affidavit to show cause located at pages 86 to 96 of the record of appeal and reproduced hereunder-
“I, MR. OLA OLALERE, Male, Clerk, Nigerian citizens of No. 45, Igbosere Road, Lagos do hereby make oath and say as follows:
1. That I am a Litigation Clerk in the chambers of R.O. Dawodu & Co. counsel to the defendants in this matter and by nature of my duties and assignments I am familiar with the facts of this case.
2. That I depose to this affidavit to show cause against summons for judgment with the consent and authority of the defendants and my employer, R.O. Dawodu Esq. of counsel.
3. That I am informed by (i) General Tyres W.A. Ltd (ii) Alhaji Bode Abdullahi and (iii) Chief R.O. Jinadu, the defendants herein and I verily believe them as follows:
(i) That the 1st defendant was granted a total credit facility of N150 Million Naira by the plaintiff, whereby the 2nd and 3rd defendants who are the Directors of the Company guaranteed same by executing personal guarantees.
(ii) That the amount utilized by the defendants for the issuance of letters of credit by the plaintiff was N89,692,000.10 as itemized hereunder.
S/NO L/C NO USD VALUE RATE NAIRA EQUIVALENT
1.129/2001   32,886.75  111.35   3,661,939.60
2.145/2001   45,138.00  112.00   5,055,456.00
3.146/2001   31,800.00  112.00    3,561,600.00
4.149/2001   24,399.50  112.00    2,732,744.00
5.152/2001   19,916.25  112.00    2,230,620.00
6.153/2001   83,065.00  112.00    9,303,280.00
7.154/2001   85,200.00  112.00    9,542,400.00
8.155/2001   24,900.00  112.00    2,788,800.00
9.156/2001   40,194.00  112.00    4,501,728.00
10.157/2001  22,020.00  112.00   2,466,240.00
11.158/2001  98,070.00  112.00   10,983,840.00
12.159/2001  31,800.00  112.00   3,561,600.00
13.160/2001  250,140.00  112.00  28,014,680.00
14.168/2001  11,550.00   111.50  1,286,092.50
TOTAL     89,692,000.10
(iii) That several other payments have been made by the defendants; but the repayment made to the plaintiff up to 4th September, 2002 is as per the under-mentioned payment schedule.
PAYMENT SCHEDULE
S/NO DATES      MODE OF PAYMENT     AMOUNT
1.13th Dec.2001 Cheque No.00003730 1,000,000.00
of FBN
2. 3rd Feb. 2002 Dollars transfer
as per statement of A/C                 51, 481, 831.80
3. 2nd May, 2002         Cash             300,000.00
4. 30th May, 2002        Cash             320,000.00
5. 3rd June, 2002         Cash             384,000.00
6. 5th June, 2002        Cash              2,020,000.00
7. 5th June, 2002        Cash              14,720.00
8. 6th June, 2002       Cash               210,000.00
9. 10th June, 2002     Cash                640,000.00
10. 17th June, 2002   Cash                320,000.00
11. 9th July, 2002      Cash                417,000.00
12. 9th July, 2002      Cash                1,750,000.00
13. 10th July, 2002     Cash                320,000.00
14. 15th July, 2002     Cheque           4,853,750.00
15. 24th July, 2002      Cash             465,120.00
16. 7th August, 2002   Cash               210,000.00
17. 29th August, 2002  Cash               465,120.00
18. 4th September, 2002  Cash           48,850.00
TOTAL        67,240,393.00
(iv) That there is a Tripartite warehousing agreement between the plaintiff, the 1st defendant and Allianz Maritime Ltd, for warehousing the imported tyres and the 1st defendant’s tyres still in possession and control of the plaintiff and Allianz Maritime Ltd is worth more than N70 Million. (v) That as per the plaintiffs amended letter of 13th March, 2001, the facility is no more back-to-back and was for June 2001 to June 2002.
(vi) That the 20% equity contribution by the 1st defendant was reversed and the money used by the plaintiff was part of the 1st defendant’s balance of 250,000.00 U.S. Dollars.
(vii) That the purported statement of account of the 1st defendant was adversely manipulated against the interest of the 1st defendant and is unreliable and contradicts the amount in the statement of claim, summons for judgment and the plaintiffs solicitor’s letter of 21st January, 2003 and 23rd January, 2003 respectively.
(viii) That with the 1st defendant goods of over N70 Million still in the plaintiff/Allianz Maritime Ltd warehouse, there was no debt due or payable by the defendants to the plaintiff.
(ix) That the 1st defendant has a right to counter-claim against the plaintiff for (1) An account (2) for N70 Million for the goods (tyres) in their warehouse and control and (3) for damages.
(x) That when the 1st defendant called on the plaintiff, the plaintiff refused, and as a cover lodged a complaint at AIG Zone 2, Nigeria Police, Onikan, Lagos that the 1st defendant defrauded the Bank. Similar complaint was made to Inspector General of Police at Abuja.
(xi) That after investigations the Police Authority advised both the plaintiff and the 1st defendant to sit down and reconcile the account; this was not disclosed by the plaintiff.
(xii) That it was a result of the 1st defendant’s threat to institute action for account that made the plaintiff to commence this suit.
(xiii) That the 1st defendant expects a profit of over N60 Million profit from this transaction, which has been frustrated by the plaintiff.
(xiv) That the above are some of the facts joining issues with the plaintiff and showing with the defendants’ defence to this action.
4. That shown to me and herewith attached and marked as:
Exhibit A is 1st defendant’s letter of 27th September, 2001;
Exhibit B is 1st defendant’s letter of 15th July, 2002;
Exhibit C is 1st defendant’s letter of 24th September, 2002;
Exhibit D is 1st defendant’s letter of 30th October, 2002.
5. That the 2nd defendant further informed me and I verily believe him that the issue involved in this transaction led to the commencement of action before justice Alogba in Suit No. M/788/02 – Alhaji Bode Abdullahi vs. Omega Bank Plc & others. This was not disclosed by the plaintiff in this action.
6. That I am informed by Mr. R.O. Dawodu of counsel and I verily believe him that it is necessary to take this process by way of showing cause against the plaintiff summons for plaintiff judgment.
7. That I verily believe that the defendants have good defence against the plaintiff’s action and the defendants should be allowed to defend same so as to determine the case on its merit.
8. That I depose to this affidavit in good faith.”
27/09/2001
Our Ref: GTW/099/010/02
Omega Bank Plc,
Victoria Island,
Lagos,
Nigeria.
ATT: REV. SEGUN AGBETUYI – CHIEF EXECUTIVE OFFICER
Dear Sir,
RE: SALE OF GOODS IMPORTED ON OUR BEHALF
We discovered that your Apapa Branch had sold part of the goods (Tyres and Rex Brake Fluids) to the amount of about =N=30,000,000.00 (Thirty Million Naira) without our knowledge and consent.
This is a breach of tripartite agreement among the parties concerned – Omega Bank Plc, Apapa Branch, Allianze Maritime Limited and General Tyre (W.A) Ltd. Despite the fact that we got loan from you, we are servicing our loan, and our account is not dormant.
We are surprised to discover that your Apapa Branch had started selling the goods without our consent.
You are the lender and you have now assumed the role of the borrower and the distributor of the goods.
Many a times, your Apapa Branch refused to sell to customers that came through us but if they went to the Apapa Branch directly, by-passing us, your said Branch are selling to these customers directly without our knowledge.
We are now aware of the plot and design to ooze us out of business, which you think the best way to treat your customer.
Having resorted to the sales of our goods without our knowledge and consent, we are backing out of this agreement, then you and Allianz Maritime can continue with the sales of the goods.
As far as we are concerned, we had paid for all the goods – Tires, Engine oil and Rex Brake Fluid collected from the warehouse.
By this letter, since you had started selling the goods without our knowledge and consent, we are informing you that the Apapa Branch had breached the agreement and the consequences will be borne by your said Branch.
This is also to be noted that we do not know the stock of the goods in the warehouse-Allianz Maritime told us at the bank asked them not to give us any information regarding the stock of goods.
Trusted to have informed you of our position satisfactorily.
Yours faithfully
For: General Tire (W.A) Ltd.
signed
ALHAJI BODE ABDULLAHI
Chairman/CEO
15/07/2002
Our Ref: GTWA/050/07/02
Rev. Segun Agbetuyi,
Chief Executive Officer,
Omega Bank Plc,
Victoria Island,
Lagos.
Dear Sir,
RE: GENERAL TYRE (W.A.) LTD – SALES OF CONTINENTAL TYRES. ETC.
We have to bring to your attention the delay of your staff and officers at Apapa Branch in handling the sales of the tyres. For days after payment by our customers, we always find it difficult to get the customers loaded. The excuses are either the signatories are not available or the release order to Allianze Maritime is not ready.
The undersigned and his staff are making all efforts to get sales so that the tyres are cleared out of the warehouse and your payment is liquidated.
From the unfavourable attitude of your officials at the bank, we are inclined to hand off from the sales of the tyres, let the bank go ahead with the sales, afterwards, the tyres is in care of the bank.
As much as we do not want this transaction to result in litigation, it appears we will have no alternative from the way and manner your Apapa Branch is handling our matter.
We repeat, if the bank wants to sell the tyres, we are backing out from the sales of the tyres.
Kindly look into this matter and call your men to order, as delay is dangerous.
Yours faithfully,
For: GENERAL TYRE (W.A.) LTD
Signed
ALHAJI BODE ABDULLAHI
CEO
24/09/2002
Our Ref: GTW/093/09/02
AIG Zone 2,
Nigeria Police,
Onikan-Lagos.
Dear Sir,
RE: OMEGA BANK PLC v. GENERAL TYRE (W.A.) LTD UNDER INVESTIGATION AT
ZONE 2, C.I.D.
COMPLAINT OF FRAUD AGAINST:
1. OMEGA BANK APAPA BRANCH
MR. DAN IGBOKWE – BUSINESS DEVELOPMENT EXECUTIVE
MR. SAM AKINRINDE – BUSINESS DEVELOPMENT OFFICER
2. ALLIANZ MARITIME LIMITED
MR. KEHINDE IDOWU C.E.O.
Our complaint is in respect of sales of various sizes of Continental Tyres value about =N=30,000,000.00 (Thirty Million Naira) and an unauthorized amount of =N=300,000.00 (Three Hundred Thousand Naira) paid.
Omega Bank granted my company General Tyre (W.A) Limited a loan for importation of tyres and other commodities. There is a tripartite agreement among Omega Bank, General Tyre (W.A) Ltd and Allianz Maritime Limited. The goods in the custody of the Bank are kept in Allianz Maritime Ltd warehouse and General Tyre (W.A) is to carry out the sales of the good.
The agreement is that the three parties must be aware of the sales and delivery of the goods.
It was also agreed that General Tyres (W.A) Ltd who is responsible for the repayment of the loan charges and interest must be informed and agreed before any payment is made as well as all payments are to be backed by authentic receipts.
To my amazement and utter surprise, the bank unilaterally sold various sizes of Continental and Cheng Shin Tyres 385/65 R 22.5 valued =N=30,000,000 (Thirty Million Naira Only) and the amount had up till date, not been credited to General Tyre (W.A) account.
RE: 4 X 40 FEET CONTAINER:
Having paid all official necessary dues prescribed by the Federal Government (FG) to the Nigeria Ports Plc, we are at a loss to receive letter from Allianz Maritime Limited through Omega Bank Plc debiting our company with =N=300,000 (Three Hundred Thousand Naira) plus interest settlement of NPA Official.
We therefore crave your indulgence to investigate the frauds perpetrated on our company by Omega Bank Plc and Allianz Maritime for the recovery of the amount and interest charged.
Thanks for your kind and usual co-operation.
Yours faithfully,
For: GENERAL TYRE (W.A.) LTD
Signed
ALHAJI BODE ABDULLAHI
Chief Executive Officer
30/10/2002
Our Ref: GTW/108/10/02
Omega Bank Plc,
54, Warehouse Road,
Apapa-Lagos.
ATTN: MR. DAN IGBOKWE
Dear Sir,
JULIUS BERGER (NIG) PLC
LPO NO. 64527 DATED 3/10/2002
Further to our various discussions regarding the above subject matter. We are surprised that you refused to honour the LPO because it did not include Omega Bank Plc. You asked us to come with cash to purchase the tyres.
Your bank’s habit of selling the tyres etc imported by us, without our consent is illegal.
You mentioned last week to the undersigned that you have sold up to =N=100,000,000 (One Hundred Million Naira) worth of our goods. Despite our earlier objections in writing regarding your unilateral act you continue to sell. Since you have assumed the position of a seller, our company has no choice than to wish you well.
We wish to inform you however, that you should be prepared for the consequences of your act.
Best regards.
Signed
CHIEF R.O.JINADU
The parties thereafter addressed the court and in a considered judgment the trial judge adjudged as follows:
“I am persuaded in summation that the defendant has not met the minimum standard required of him on his affidavit. No triable issues worthy of the grant of a full scale trial have been raised, furthermore, the mere intention to file a counter-claim in the suit cannot be justifiable to the plaintiff’s claims. I am persuaded that the defendants have not been able to cast any doubt on the plaintiffs claims, to justify leave of court and I so hold.”
Dissatisfied with this judgment the appellants filed this appeal and set out four grounds of appeal in the amended notice of appeal to wit:
“A. The learned trial judge exercised her discretion wrongly and or failed to exercise the same judicially by refusing to transfer the matter to the general cause list for trial on the merit.
B. The learned trial judge erred in law in granting judgment to the respondent against the appellants.
c. The learned trial judge erred in law when she held as follows:
“I’m persuaded in summation that the defendant has not met the minimum standard required of him of his affidavit. No triable issues worthy of the grant of a full scale trial has been raised, furthermore, the mere intention to file a counter claim in the suit cannot be a justifiable defence to the plaintiff’s claims”.
D. The learned trial judge erred in law when she held that the appellants were indebted to the plaintiff/respondent bank in the sum of N65,058,142.06 claimed in the respondents action for which judgment was accordingly entered against the appellants.”
From these four grounds of appeal the appellants in their brief of argument distilled three issues for determination to wit:-
1. Whether the learned trial judge was not in error in holding that the appellants/defendants had not disclosed a good or triable defence to warrant their being let in the defend suit. This issue is distilled from ground 1.
2. Whether the learned trial judge denied the appellants/defendants fair hearing when she proceeded to make findings on material issues against the appellant based on the affidavit evidence of the parties particularly where these affidavits showed irreconcilable conflicts in material respects. This issue is distilled from ground 3.
3. Whether the trial court was not in grave error in relying on the respondent’s exhibit DM5, in entering judgment against the appellants. (See pages 35-61 of the Record of Appeal). This issue is distilled from grounds 2 and 3.
From the same amended notice of appeal the respondent distilled four issues for determination in its brief of argument to wit:
(a) Whether the learned trial Judge properly excised her discretion by entering final judgment in favour of the plaintiff/respondents against the defendants/appellants?
(b) Whether the learned trial Judge ought to have joined Allianz Maritime Limited suo motu?
(c) Whether the defendants/appellants showed good cause before the trial court upon which the judge can grant them leave to defend the suit?
(d) Whether Exhibit DM5 the computerized statement of account of the 1st appellant is admissible in proof of the debt under the Evidence Act?
It must be stated from the onset that the principles of fair hearing are entrenched constitutional provisions. Where therefore a party takes another to court, the audi alteram patem principle must be seen to have been upheld in the determination of the dispute. That is why S. 241(2) of the 1999 Constitution entrenched the right of a defendant to defend a suit brought against him. It provides as follows:
“(2) Nothing in this section shall confer any right of appeal
(a) from a decision of the Federal High Court or any High Court granting unconditional leave to defend an action”
This provision entrenches S. 36(1, 2 & 3) of the 1999 Constitution that provide as follows:
36(1) In the determination of his civil rights and obligations, including any question or determination by or against any government or authority, a person shall be entitled to a fair hearing within a reasonable time by a court or other tribunal established by law and constituted in such manner as to secure its independence and impartiality.
36(2) With out prejudice to the foregoing provisions of this section, a law shall not be invalidated by reason only that it confers on any government or authority power to determine questions arising in the administration of a law that affects or may affect the civil rights and obligations of any person if such law:
(a) provides for an opportunity for the person whose rights and obligations may be affected to make representations to the administering authority before that authority makes the decision affecting that person; and
(b) contains no provision making to determination of the administering authority final and conclusive.
36(3) The proceedings of a court or the proceedings of any tribunal relating to the matters mentioned in subsection
(1) of this section (including the announcement of the decisions of the court or tribunal shall be held in public.The courts have discovered that in giving effect to these provisions in suits relating to liquidated money demand, access to the courts have been serially abused. This had each of the High Courts to make provisions in its rules for circumstances where infact the defendant has no real defence to the suit brought against him. To counter this, our courts have evolved summary judgment and undefended list procedures in our different rules of court. In Lagos State-the Rule relevant to this appeal is Order 11 Rule 1 of 1994 High Court Civil Procedure Rules which provide for the summary judgment in the Lagos State High Court. These provisions, to the extent that they bar a defendant from defending a suit brought against him, are intrinsically unconstitutional. This procedure is a special procedure meant to provide a fast process to recover a debt or liquidated money demand which debt is virtually uncontested. To the extent that the rules provide an opportunity for fair hearing and the doing of substantial justice, it can be said to come within the ambit of S. 36 of the 1999 constitution.

In a summary judgment procedure which includes the undefended list procedure, the defendant to succeed in avoiding summary judgment must disclose in an affidavit a triable issue. A triable issue is a material allegation requiring further investigation and must ex facie disclose a strong defence. See Udemba vs. Morecab Finance Nigeria Ltd (2003) 1 NWLR (Pt. 800) 96, Muoboke vs. Nwigwe (2000) 1 NWLR (Pt. 642) 620. The affidavit must set out a defence on the merit and not a sham defence intended to delay and frustrate justice. See Udemba vs. Morecab Finance Nigeria Ltd (supra), Macaulay vs. NAL Merchant Bank Ltd (1990) 4 NWLR (Pt 144) 283, Ago Millers Ltd vs. C.M.B. Nigeria ltd (1997) 10 NWLR (Pt. 525) 469. It is the defendant’s affidavit that discharges the burden on the defendant to show that the grounds for asking to be heard in defence are not frivolous, vague or craftily designed to filibuster the proceedings.
The defendant must show that there is a real dispute between the parties. All these must be gleaned from the defendant’s affidavit showing cause. See Dyeris vs. Mobil Oil (Nig) Plc (2010) 1 NWLR (Pt. 1175) 309. To determine these issues the trial court must critically look at and consider the averments from defendant’s affidavits. Could that be said to have been done in the instant case? A critical look at the judgment of the trial court shows that the court made no reference whatsoever to the four letters exhibited by the appellants in their affidavit showing cause. The four letters clearly disclose a dispute between the parties.
The appellants had questioned the right of the respondent to break into the warehouse and sell their warehoused goods to the public without reference to them. How much was realized from these sales? How has the respondent accounted for these sales? Was the money realized from the sales paid into the disputed account? What is the role of the warehouse operator hired for N50,000,000.00 in these transactions? Questions, questions, questions. These questions can only be answered if the dispute between the parties is subjected to full trial. The trial court was certainly not even handed in determining the dispute in the summary judgment proceedings. Set off and counter-claim are recognized defences that avail a defendant in a civil proceeding and no party should be precluded from taking advantage of these defences in their cases which may go for trial on the merits.
I shall decline from dealing with the issues relating to evidence as they will surely arise in the hearing of the case on the merit. This appeal is allowed. The judgment of the trial court on 10th February, 2004 is hereby avoided. Suit No: LD/439/2003 is hereby placed on the general list at the High Court of Lagos State.
Costs to the appellants against the respondent is assessed at N30,000.00.

ADZIRA GANA MSHELIA, J.C.A.: I read before now the judgment of my learned brother Agbo, J.C.A. just delivered. I am in agreement with the reasoning and conclusion contained therein, which I also adopt as mine. The appeal is meritorious, it succeeds and is hereby allowed. The judgment of the trial court on 10th February, 2004 is hereby set aside. Suit No. LD/439/2003 is hereby placed on the general list at the High Court Lagos State. There shall be costs of N30,000 assessed in favour of the respondent against the appellants.

ADAMU JAURO, J.C.A.: I have had the advantage of reading in draft the lead judgment of my learned brother, Agbo JCA, just delivered. I agree with his reasoning and conclusion that the appeal has merit and should be allowed.
In the circumstance I too allow the appeal and abide by consequential orders contained in the lead judgment, including the order as to costs.

Appearances

Kemi Balogun with him J. Inyang-Disi (Mrs.)For Appellant

AND

A.M. Makinde with him N. ObasiFor Respondent