GREAT NIGERIA INSURANCE PLC v. KODE INVESTMENT LIMITED & ANOR
(2017)LCN/10231(CA)
In The Court of Appeal of Nigeria
On Tuesday, the 11th day of July, 2017
CA/I/317/2012
RATIO
SUMMARY JUDGMENT PROCEDURE: THE PURPOSE OR OBJECT OF THE SUMMARY JUDGMENT PROCEDURE
The parties herein are in agreement as to the object or purpose of a summary judgment procedure. The Appellant in his brief referred to a number of authorities on the point which are quite apt. The authorities in this area of our law are galore. First, those cited by learned counsel in his brief. In THOR LIMITED V. FCMB (2005) 8 SCM 144, the Supreme Court in respect of Order 10 Rule 1 of the Lagos State High Court (Civil Procedure) Rules which is impari materia with Order 11 Oyo State High Court (Civil Procedure) Rules 2010 observed:
“The object of Order 10 Rule 1 of the Lagos High Court (Civil Procedure) Rules is to enable the Claimant obtain quick judgment when there is no defence to the actions. … The Summary Judgment procedure, is designed to enable a party obtain judgment especially in liquidated demand case, without the need for a full trial where the other party cannot satisfy the Court that it should be allowed to defend the action.”
In the case of UNITED BANK FOR AFRICA PLC & ANOR V. ALHAJI BABANGIDA JARGABA (2007) 5 SCNJ 127, the Supreme Court held that a Summary Judgment “is a procedure for disposing with dispatch, cases which are virtually uncontested”. The Court observed:
“Summary Judgment are devises available for prompt and expeditious disposal of controversy without trial when there is no dispute as to either material facts or inferences to be drawn from undisputed facts or if only question of law is involved”.
Again the appellant rightly stated the law that even though Order 11 of the Oyo State High Court (Civil Procedure) Rules 2010 and similar legislation are designed to enable a Claimant obtain quick judgment; it was never intended to shut out a defendant who has through his affidavit shown that he has a case which ought to be tried. SeeFEDERAL MILITARY GOVERNMENT V. SANI (1990) 7 SC (PT II) 89 where the Supreme Court held:
“Although the procedure under Order 10 Rules 1-3 is designed to enable the Plaintiff to obtain Summary Judgment without trial in those cases where the Plaintiffs case is unassailable. Cow V. Casey (1949) 1 KB 481 and the defendant cannot show a defence which will lead to a trial of the case on its merits… it is not at the same time intended by that same procedure to shut out a Defendant who has shown on the affidavit or the statement of defence filed that he has raised an issue against the claim which ought to be tried”. PER CHINWE EUGENIA IYIZOBA, J.C.A.
UNDEFENDED LIST PROCEDURE: THE DUTY OF THE COURT WHERE SERIOUS DISPUTES AROSE IN THE AFFIDAVITS ON POINTS OF LAW RELATING TO THE CLAIMS
In the recent Supreme Court judgment of MASSKEN (NIG) LTD & ORS V AMAKA & ANOR (2017) LPELR-SC.266/2009, it was held per Onnoghen JSC (as he then was):
“It is settled law that Undefended List Procedure is designed and adopted for speedy trial for the recovery of any debt or liquidated money demand. Particularly, where it is clear to the Court that the defendant has no defence on the merit for the claim of the plaintiff. …………………….. Where however serious disputes arose in the affidavits on points of law relating to the claim(s), the trial judge ought to exercise caution in entering judgment under the Undefended List Procedure and should transfer the matter from the Undefended List to the General Cause List to be dealt with by pleadings etc.”
See also the contribution of Nweze JSC in the recent case of AKAHALL & SONS LTD V NDIC (2017) LPELR-SC.302/2016 where reference was made to many decided authorities where the Undefended List Procedure was appropriately utilized. See generally the following cases of NKWO MARKET COMMUNITY BANK LTD V. OBI (2010) 14 NWLR (PT. 1213) 169; I. H. LTD V. SONEB ENT. LTD (2010) 4 NWLR (PT. 1185) 561. PER CHINWE EUGENIA IYIZOBA, J.C.A.
JUSTICES
CHINWE EUGENIA IYIZOBA Justice of The Court of Appeal of Nigeria
HARUNA SIMON TSAMMANI Justice of The Court of Appeal of Nigeria
NONYEREM OKORONKWO Justice of The Court of Appeal of Nigeria
Between
GREAT NIGERIA INSURANCE PLC Appellant(s)
AND
1. KODE INVESTMENT LTD
2. ALHAJI MUKAILA OLANIHUN ALLI
(Trading under the name and style Alhaji Mukaila Olanihun Enterprises) Respondent(s)
CHINWE EUGENIA IYIZOBA, J.C.A. (Delivering the Leading Judgment): This is an appeal against the judgment of the High Court of Oyo State, Ibadan Division in Suit No. I/1096/2010 delivered by Oyelaran J on the 14th day of June 2012 wherein summary judgment was entered against the Appellant and the 2nd Respondent jointly and severally as per the 1st Respondents Writ of Summons and Statement of Claim.
THE FACTS:
As set out in the 1st Respondent?s brief, a contract was entered into between the 1st and 2nd Respondents for the supply of 100 metric tons of Garri to the 1st Respondent by the 2nd Respondent at a total contract sum of N6, 100,000.00 subject to the terms and conditions of the offer. It was a term and condition of the offer letter that the 2nd Respondent will provide the 1st Respondent with a Performance Bond from a reputable Insurance Company for the due performance of the contract. Pursuant to the conditions stated in the offer letter, the 2nd Respondent submitted to the 1st Respondent an Advance Payment Bond Policy No. FG (APB)/2004227/09/IB executed by the Appellant wherein the Appellant undertook to be bound to
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pay to the 1st Respondent the sum of N6,100,000.00 or any such part thereof that remains outstanding in the event of a failure by the 2nd Respondent to perform the contract to supply the 1st Respondent the 100 metric tons of Garri. By a letter dated the 17th day of March 2009 the 1st Respondent wrote to the Appellant to confirm issuing the Advance Payment Bond Policy No. FG (APB)/2004227/09/IB, which the Appellant confirmed by its letter to the 1st Respondent dated the 31st of March 2009. The 1st Respondent in pursuance of the agreement on the 3rd of April 2009 paid the 2nd Respondent the contract sum of N6,100,000.00 for the supply of 100 metric tons of Garri. The 2nd Respondent duly acknowledged receipt of the said sum on the same 3rd of April 2009. In breach of the agreement, the 2nd Respondent only supplied 3 metric tons of Garri valued at N200,000.00 out of the 100 metric tons of Garri leaving 97 metric tons of Garri valued at N5,900,000.00 outstanding. Despite requests made by the 1st Respondent, the 2nd Respondent failed or refused to supply the remaining 97 metric tons of Garri to the 1st Respondent. The 1st Respondent then demanded for a refund of
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the sum of N5,900,000.00 being the value of the unsupplied 97 metric tons of Garri from the 2nd Respondent but the 2nd Respondent failed to refund same. By a letter dated the 30th day of August 2010, the 1st Respondent called on the Appellant to satisfy and discharge its obligation under the said Advance Payment Bond Policy by paying the sum of N5, 900,000.00 being the value of the outstanding 97 metric tons of Garri which the 2nd Respondent has refused to refund. By a letter dated 30th of August 2010, the 1st Respondent’s Solicitor Messrs Ayodele Akintunde & Co. served on the 2nd Respondent a demand letter to pay the sum of N5, 900,000.00 being the value of the outstanding 97 metric tons of Garri which the 2nd Respondent has refused to supply. By a letter dated the 15th of September 2010, the 1st Respondent’s Solicitor Messrs Ayodele Akintunde & Co., called on the Appellant to satisfy and discharge its obligations under the said advance Payment Bond Policy by repaying the sum of N5,900,000.00 being the value of the outstanding 97 metric tons of Garri which the 2nd Respondent has refused to refund but the Appellant refused to do so. By a letter dated
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the 22nd of September 2010, the 2nd Respondent through his lawyers Messrs Bolarinwa Lawal & Co., wrote to the 1st Respondent’s Solicitors admitting that the outstanding 97 tons of Garri was not supplied to the 1st Respondent as agreed but instead to a third party and that the 2nd Respondent was willing and ready to refund the 1st Respondent the said sum of N5, 900,000.00 being the value of the outstanding 97 metric tons of Garri once he receives payment from the third party. Despite repeated demands the 2nd Respondent and the Appellant herein failed or refused to pay the said sum of N5, 900,000.00 on any part thereof. The 1st Respondent consequently issued a Writ of Summons dated 13th October 2010 against the 2nd Respondent and the Appellant jointly and severally claiming as follows:
i. The sum of N5,900,000.00 being the value of the outstanding 97 metric tons of Garri which the 1st Defendant has failed to supply to the Claimant despite repeated demands and which the 2nd Defendant has failed to pay to the Claimant as per its Advance Payment Bond Policy No. FG (APB) 2004227/09/IB; and
ii. Interest on the said sum of N5, 900,000.00 at the rate 21%
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per annum from the 30th of August 2010 to the date of judgment and thereafter at the same rate until the whole judgment debt is fully liquidated.
Following the coming into force of the High Court (Civil Procedure) Rules of Oyo State (2010) the 1st Respondent in compliance with the new Rules filed the Statement of Claim in these proceedings, dated the 3rd of February, 2011 as well as the List of Witnesses that the 1st Respondent proposed to call at the trial. It also filed the Written Statement on Oath of the (1st Respondent’s) witness. The 1st Respondent also filed an application for an order of the trial Court entering Summary Judgment against the Appellant and 2nd Respondent as per the Claimant’s Writ of Summons and Statement of Claim, alleging that the Appellant and 2nd Respondent have no real defence to the action.
The Appellant on being served with the Claimant?s processes, promptly filed (a) A Statement of Defence with all the accompanying processes against the Statement of Claim and also; (b) A Counter-Affidavit dated 8th March, 2011.
?The Appellant claimed that its defence was so robust that the 1st Respondent had to file a
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further Affidavit which it called a reply and also another process that it referred to as further affidavit to reply to 2nd Defendant’s counter Affidavit of 8th day of March, 2011.
?
The 2nd Respondent (as 1st Defendant) filed (a) A Statement of Defence and (b) A Counter-Affidavit against the application for Summary Judgment. The Appellant filed an application dated 8th of March, 2011 seeking for an Order of Court striking out her name from the suit or dismissing the proceedings against her. The 1st Respondent upon being served with the application filed a counter affidavit dated 11th day of May 2011. On the 21st day of December, 2011 the 1st Respondent moved the application for Summary Judgment and the Appellant moved her application to strike out her name from the suit. Both applications were vehemently opposed. Ruling on the two applications was delivered on the 14th day of June, 2012. The Court refused the Appellant?s application seeking for an order striking out her name from the suit or dismissing the proceedings and entered judgment in favour of the 1st Respondent against the Appellant and 2nd Respondent with N40, 000.00 costs in favour of the
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1st Respondent.
Dissatisfied with the decision, the Appellant filed two Notices of Appeal the first, on 26th day of June 2012 and the second Notice of Appeal on the 11th day of September 2012. From the latter Notice of Appeal the Appellant distilled three issues for Determination as follows:
i. Whether the grant of the 1st Respondent’s application for Summary Judgment and entry of judgment thereby in favour of the 1st Respondent is proper or justified in the light of the pleadings, affidavit and counter affidavit that were filed and exchanged by the parties in this suit?
ii. Whether the trial Judge was justified in granting 21% as interest on the sum of N5,900,000.00 claimed as from August 2010 to the date of Judgment and thereafter at the same rate until the whole Judgment is fully liquidate.
iii. Whether the Trial Judge should not have granted the Appellant’s application for an order striking out its (Appellant’s) name as a party from this suit?
The Respondent on his part formulated two issues for determination as follows:
1. Whether the learned trial judge was right when she held that the Appellant had no good defence to
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the action (Suit No. I/1096/10) and accordingly entered judgment for the 1st Respondent; and:
2. Whether the learned trial judge was right when she held that the Appellant is a necessary party in Suit No. I/1096/10.
Having perused the Record of Appeal and the briefs of argument of the parties, I am satisfied that the two issues formulated by the Respondent are adequate to dispose of this appeal. The two issues will be taken together.
APPELLANT?S ARGUMENTS:
Mr. Bamgbose for the Appellant in his brief on issue 1 examined in great detail with authorities the instances when summary judgment is allowed. He opined that the Summary Judgment procedure, is designed to enable a party obtain judgment especially in liquidated demand case, without the need for a full trial where the other party cannot satisfy the Court that it should be allowed to defend the action. Learned counsel submitted relying on the case of FEDERAL MILITARY GOVERNMENT V. SANI (1990) 7 SC (Pt 11) 89 that in determining whether a Defendant has a good defence to the action brought against him, it is not necessary for the trial judge to consider at that stage whether the
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defence has been proved. What is required is to look at the facts deposed to in the affidavit or the facts averred in the statement of defence to see if they can prima facie afford a defence to the action. Counsel submitted that the Appellant and 2nd Respondent have shown that there are triable issues in the case and that the case ought to have gone for full trial. Counsel submitted that the many affidavits, counter affidavits, further affidavits and replies filed in the case show that there are substantial issues to be tried. Counsel cited in support the case of GLOBE FISHING INDUSTRIES LTD. V. COKER (1990) 7 NWLR (PT. 162) 265. Learned counsel submitted that in its counter affidavit against summary judgment and in its Statement of Defence, it was averred that the 1st and 2nd Respondents changed the nature of the contract that it (Appellant) guaranteed without consulting her or without her consent and that in view of this, it is absolved from any liability under the guarantee.
Counsel submitted that the 2nd Respondent (as 1st Defendant) in his Statement of Defence and the Counter-Affidavit also confirmed these facts about the change in the nature of the
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contract that was guaranteed. What the 2nd Respondent was innocently trying to do was to express a justification for a plea for more time to pay for the Garri (not even to supply Garri again, but to pay) but this meant something totally different to the 1st Respondent who preferred only to see that the 2nd Respondent was admitting a debt. Learned counsel reproduced the relevant paragraphs of the 2nd Respondent?s Statement of Defence, Statement on Oath of his witnesses and Counter Affidavit. He further submitted that one of the defences of the Appellant is that when she issued the Advance Payment Bond, it was with the understanding that the 1st Respondent was going to advance money to the 2nd Respondent for the purpose of the 2nd Respondent supplying the 1st Respondent alone with Garri, but interestingly, after the alleged payment of money to the 2nd Respondent by the 1st Respondent, there was an agreement between the said parties (whether properly or improperly) that the Garri should be supplied by the 2nd Respondent to a third party who is unknown to the Appellant. Counsel argued that this new arrangement was not envisaged and has absolved and
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discharged from liability under the Bond. He submitted that the 1st Respondent had argued in its address that the Respondents had not varied the term of the contract (which is that Garri should be supplied only to the 1st Respondent and not a third party) because there is no written document to show that and therefore there is no variation. Counsel submitted that the argument is misconceived as that is actually the gravamen of the Appellant?s complaint, which is that the Respondent went on to agree between themselves to a re-routing of supply of Garri, contrary to what they had agreed to in writing and which was the basis for the Appellant?s agreeing to issue her bond. He opined that a violation is a violation, whether done in writing or subtly, or by overt or covert action. A violation of a contract is in fact a move that is anti or contrary to what parties actually are supposed to do. It is this anti-move that is usually seen as the basis for complaining that a contract has been violated or breached.
?
Counsel submitted that the decision and compromise of the Respondents to depart from the situation that the Appellant had guaranteed has been
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categorically made clear in the letter of the 2nd Respondent’s lawyer dated 22nd September, 2010 which is reproduced here below for ease of reference.
“We are solicitors to Alhaji Mukaila Olanihun Alli hereinafter referred to as our Client on whose instruction we write to reply your letter dated August 30, 2010 on the above subject.
The fact of our brief is that your client secured contract for the supply of Garri. Our Client was briefed to supply the Garri to your Client in the course of delivery, your client told our client to look for another person to supply and he supplied the remaining metric tons of Garri to another contractor on credit who supplied to the Nigeria Prison Service.
The above transaction was to the knowledge of your client, and our client has been mounting pressure to get paid for the supply so that he can refund your Client.
Consequently, our client is willing and ready to refund your client as soon as he received payment from the third party.”
Learned counsel submitted that that she is discharged from any liability to the 1st Respondent because of this arrangement by the Respondents, which the 2nd Respondent
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innocently, but honourably acknowledged. Counsel referred to the circumstances when a surety may be discharged from liability as stated in Chitty on Contract (Volume II) 1037 paragraph 4840. He submitted that the fact of variation alone is a formidable defence to the Claimant’s claim against the 2nd Defendant, which should have moved the Court to go into a full trial between the parties. Counsel submitted that apart from the above defence premised on variation of terms of Contract (and which is sufficient on its own alone), the 2nd Defendant had also, by her statement of defence and counterclaim, raised another major defence which is that the Claimant is precluded in law from instituting or continuing these proceedings against the 2nd Defendant, in that the Advance Payment Bond and guarantee allegedly created are stale, spent and of no effect. Counsel referred once more to FEDERAL MILITARY GOVERNMENT V. SANI (SUPRA) where it was held:
?It is not necessary for the trial judge to consider at that stage whether the defence has been proved. What is required is to look at the facts deposed to in the Court or affidavit or the facts averred in the
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statement of defence and see if they can prima facie afford a defence to the action.?
Counsel urged us to resolve this issue in favour of the Appellant and to set aside the grant of the main claim for the sum of N5,900,000.00 (Five Million, Nine Hundred Thousand Naira only).
On issue 2, whether the learned trial judge was right when she held that the Appellant is a necessary party in Suit No. I/1096/10; Mr. Bamgbose submitted that the trial Court ought to have granted the Appellant’s application for an order striking out the Appellant as a party in the suit. Counsel referred to Order 13 Rules 4 and 17 of the High Court (Civil Procedure) Rules of Oyo State 2010 and submitted that no relief existed against the Appellant as there is no cause of action against her; and so no useful purpose will be served by her retention as a party in the proceedings. He called in aid the cases of LAWANI ADESOKAN & 3 ORS V. PRINCE MICHAEL OYETUNJI O. ADEGOROLU & 3 ORS (1997) 3 SCNJ 1 AND CAPITAL BANCORP LIMITED V. SHELTER SAVINGS AND LOANS LIMITED & ANOR (2007) 1 SCNJ. Counsel referred to the averments in the affidavit in support of the application and
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argued that the trial Court erred in failing to strike her name out of the proceedings. He submitted that the Advance Payment Bond stated that any proceedings against the Appellant to recover any claim under the Bond must be instituted within thirty (30) days after the expiration of the guarantee which according to the Appellant was the 2nd of April, 2010. Counsel submitted that the 1st Respondent advanced the 2nd Respondent the sum of money for the supply of Garri on the 3rd of April, 2009; and that the guarantee of 12 months was invoked after the advance payment on 3/4/09. Counsel argued that the demand of repayment from the guarantor cannot be the condition for invoking the guarantee because if there was no guarantee in place, there will not be any obligation for or under which any demand could be made. Counsel submitted that by the wordings of the Advance Payment Bond, the Appellant was not capable of being sued under the Bond at the time of the filing of the action. He urged us to resolve the issue in the Appellant?s favour.
1ST RESPONDENT?S ARGUMENTS:
Ayodele Akintunde SAN on issue 1 whether the learned trial judge was right when
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he held that the Appellant had no good defence submitted that a defendant must show a bonafide or good defence on the merits under the summary judgment procedure to be allowed to defend the suit. Learned senior counsel relying on SANUSI BROS. (NIG.) V. COTIA C.E.I.S.A. (2000) 11 NWLR PT. 679 P566 AT 580 (UWAIFO T.S.C.) AND MACAULAY V. NAL MERCHANT BANK (1990) 4 NWLR PT. 144 AT 283 submitted that the defendant is required to condescend upon the particulars in the Statement of Claim and that the defence must not be seen as ?frivolous and practically moonshine.?
The learned silk submitted that the facts of the case of FEDERAL MILITARY GOVERNMENT V. SANI (1990) 7 SC (PT.II) P. 89 are distinguishable from the instant appeal and was therefore inapplicable. Learned silk referred to the two ?major defences? the Appellant claimed to have raised (1) That the 1st and the 2nd Respondents allegedly varied the terms of the agreement between them by supplying the Garri to a third party and (2) That the Advance Payment Bond and Guarantee was stale, spent and of no effect; and submitted thus:
?The Alleged Variation of Supply Contract as
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a Defence
We submit that there was never any agreement between the 1st Respondent and the 2nd Respondent that the 2nd Respondent should supply the Garri to a 3rd party as argued by the Appellant’s counsel in paragraphs 4.20 to 4.38 of his Brief. Apart from the wide allegations which have been captured in the paragraphs of the processes reproduced by the Appellant’s counsel in its Brief of Argument, there is not one scintilla of evidence or any single document whatsoever to support the alleged claim of a variation of the supply contract between the 1st Respondent and 2nd Respondent which was in writing.
It is trite law that where a contract is in writing, any agreement which seeks to vary the original agreement, must itself, be in writing. See Bijou (Nig.) Ltd V. Osidarohwo (1992) 6 NWLR (Pt 249) pg 643 at 649 para. B, Central Bank of Nigeria & Anor. V. Mrs. Agnes M. Igwillo (2007) 4-5 S.C 158 at 190-192, Section 128 of the Evidence Act 2011 (As Amended).
In Union Bank of Nigeria V. Albert Ojo Ozigi (1994) 3 NWLR (Pt 333) pg389 per Adio JSC held as follows;
?The general rule is that where the parties have embodied the terms of
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their contract in a written document, extrinsic evidence is not admissible to add, to vary, subtract from or contradict the terms of the written instrument. This is also provided for in Section 131(1) of the Evidence Act…?
We submit and urge this Honourable Court to hold that there is no agreement in writing between the 1st Respondent and the 2nd Respondent varying the agreement for the supply of Garri and the letter by the 2nd Respondent’s solicitor giving excuses why the 2nd Respondent had not paid the debt does not constitute an agreement to vary the terms of the agreement.
We submit and urge this Honourable Court to hold that there was no variation of the supply contract as alleged which thereby discharged the Appellant from its obligations under the Advance Payment Bond and Guarantee. We submit and urge this Honourable Court that the alleged variation of the supply contract does not amount to a triable issue since it is settled law that the written supply contract between the 1st Respondent and the 2nd Respondent can only be varied or altered by writing and there was no writing evidencing the alleged variation.
On this score, the
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learned trial judge was right to have rejected this alleged line of defence as a good defence.
The Advance Payment Bond and Guarantee was stale, spent and of no effect.
The Appellant has argued in paragraphs 4.39 to 4.42 of its Brief that the Advance Payment Bond and guarantee (See pages 14-15 of the records) allegedly created thereby is stale spent and of no effect hence it ought to have been granted leave to defend the action.
One of the cardinal rules in the interpretation of agreement is that the Court must interprete the terms of the agreement on its clear wordings. In Nimanteks Associates v. Marco Construction Co. Ltd. (1991) 2 NWLR Ft 174 p 411 at 429 Niki Tobi J.C.A (as he then was) on the Court’s duty in interpreting contracts, observed that;
?The duty of Court is strictly to interpret the terms of the agreement on its clear wordings. There is no room for decorative interpretations. There is no room for embelishments. After all parties themselves should know what they meant by the words they used better than a stranger to the contract that the Court is.?
See also: Niger Dams V Lajide (1973) 5 S.C. 207 and
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National Salt Co. of Nigeria Ltd. V. Palmer (1992) 1 NWLR Pt. 218 p422.
We further submit that in construing all written instruments the grammatical and ordinary sense of the word is to be adhered to, unless that would lead to some absurdity or some repugnance or inconsistency with the rest of the instrument.
The relevant portion of the Bond open for interpretation states thus:
?Any Demand by the Employer or by me Main Contractor constitutes in itself prima facie proof that the amount thereof is due by the Guarantor provided the Employer has paid the advance payment to the Sub-Contractor. The Guarantee shall become valid with effect from said date and shall remain in force for period of 12 months after which liabilities thereunder shall cease and the instrument shall be automatically cancelled regardless of whether it is returned to us for cancellation.?
We submit that where a document is clear, the operative words in it should be given their simple and ordinary grammatical meaning. See Union Bank of Nigeria V. Albert Ojo Ozigi (supra).
We submit that the import of the relevant portion of the Bond as
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reproduced in paragraph 4.17 above is that where the 2nd Respondent fails to fulfil the term of the contract, the guarantee of repayment of the 2nd Respondent’s indebtedness to the 1st Respondent takes effect from the date when the 1st Respondent makes demand of the repayment from the Guarantor (the Appellant) and the said guarantee shall become valid with effect from the date of demand and shall remain in force for a period of 12 months after which the Appellant’s liabilities thereunder shall cease.
It is further submitted that the right of any legal action against the Guarantor (the Appellant) subsist for 30 days from the end of the 12 months period of the guarantee. As provided in the second part of the Bond thus;
?Any proceedings against the surety to recover any claim hereunder must be instituted within thirty days after the expiration of this guarantee?
We submit that the time as per the period of the guarantee started to run from the 30th of August 2010 when the Appellant was called upon to discharge the indebtedness of the 2nd Respondent. Therefore, the 1st Respondent is well within time, when it instituted
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legal proceedings against the 2nd Respondent and the Appellant herein on the 27th of September 2010 to perform their obligation to the 1st Respondent as per the Bond.
We submit that “FROM 3rd MARCH 2009 to 2nd SEPTEMBER 2009”
as reflected in the Bond does not make any meaning or have relevance in the interpretation of the expiry of the Bond as the dates are just inserted without any indication of what they stand for.
The learned trial judge agreed with the above submission in respect of the interpretation of the expiry date of the Bond and consequently held that the Appellant cannot avoid its obligation to the 1st Respondent. We urge this Honourable Court to uphold the trial Court finding and accordingly affirm that the Appellant does not have a good defence to the 1st Respondent’s Summary Judgment application.?
On issue 2, the learned silk submitted that it has been settled in a long line of cases by the Supreme Court that to determine whether a claimant has disclosed a reasonable cause of action recourse must be made to the Claimant’s Statement of Claim. THOMAS V. OLUFOSOYE (1986) 1 NWLR PT. 18 P. 669; SHELL B.P. LTD & ORS V.
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ONASANYA (1976) N.S.C.C. 334. Counsel submitted that a careful examination of the 1st Respondent’s Statement of Claim clearly shows how the 1st Respondent’s cause of action arose against the 2nd Respondent and the Appellant and the consequent damage. Learned counsel submitted that the interpretation of the Appellant as to the time of expiration of the guarantee is absurd taking into consideration the terms of the Advance Payment Bond. He referred to the relevant portion of the bond agreement and submitted that the effective date of the Advance Payment Bond is the date the 1st Respondent makes a demand on the Appellant. He urged us to hold that the 1st Respondent disclosed reasonable cause of action against the Appellant and that the trial Court was right when it held that the Appellant was a necessary party to the suit.
RESOLUTION:
The parties herein are in agreement as to the object or purpose of a summary judgment procedure. The Appellant in his brief referred to a number of authorities on the point which are quite apt. The authorities in this area of our law are galore. First, those cited by learned counsel in his brief. In THOR LIMITED V. FCMB
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(2005) 8 SCM 144, the Supreme Court in respect of Order 10 Rule 1 of the Lagos State High Court (Civil Procedure) Rules which is impari materia with Order 11 Oyo State High Court (Civil Procedure) Rules 2010 observed:
“The object of Order 10 Rule 1 of the Lagos High Court (Civil Procedure) Rules is to enable the Claimant obtain quick judgment when there is no defence to the actions. … The Summary Judgment procedure, is designed to enable a party obtain judgment especially in liquidated demand case, without the need for a full trial where the other party cannot satisfy the Court that it should be allowed to defend the action.”
In the case of UNITED BANK FOR AFRICA PLC & ANOR V. ALHAJI BABANGIDA JARGABA (2007) 5 SCNJ 127, the Supreme Court held that a Summary Judgment “is a procedure for disposing with dispatch, cases which are virtually uncontested”. The Court observed:
“Summary Judgment are devises available for prompt and expeditious disposal of controversy without trial when there is no dispute as to either material facts or inferences to be drawn from undisputed facts or if only question of law is involved”.
Again the appellant
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rightly stated the law that even though Order 11 of the Oyo State High Court (Civil Procedure) Rules 2010 and similar legislation are designed to enable a Claimant obtain quick judgment; it was never intended to shut out a defendant who has through his affidavit shown that he has a case which ought to be tried. SeeFEDERAL MILITARY GOVERNMENT V. SANI (1990) 7 SC (PT II) 89 where the Supreme Court held:
“Although the procedure under Order 10 Rules 1-3 is designed to enable the Plaintiff to obtain Summary Judgment without trial in those cases where the Plaintiffs case is unassailable. Cow V. Casey (1949) 1 KB 481 and the defendant cannot show a defence which will lead to a trial of the case on its merits… it is not at the same time intended by that same procedure to shut out a Defendant who has shown on the affidavit or the statement of defence filed that he has raised an issue against the claim which ought to be tried”.
Other relevant quotations from the above case as cited by learned counsel for the Appellant.
“The Summary Jurisdiction conferred by this Order must be used with great care. A Defendant ought not to be shut out from defending
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unless it is very clear indeed that he has no case in the action under discussion.?
“Furthermore, in showing cause why a defendant should be allowed to defend the action, a complete defence need not be shown. The defence set up need only show that there is a triable issue or question or that for some other reason, there ought to be a trial. Leave to defend ought to be given unless there is clearly no defence in law and no possibility of a real defence on the question of fact.?
It is also the law as stated in FEDERAL MILITARY GOVERNMENT V. SANI (SUPRA), that in determining whether a Defendant has a good defence to the action brought against him, it is not necessary for the trial judge to consider at that stage whether the defence has been proved. What is required is to look at the facts deposed to in the affidavit or the facts averred in the statement of defence and see if they can prima facie afford a defence to the action.
In the recent Supreme Court judgment of MASSKEN (NIG) LTD & ORS V AMAKA & ANOR (2017) LPELR-SC.266/2009, it was held per Onnoghen JSC (as he then was):
It is settled law that Undefended List
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Procedure is designed and adopted for speedy trial for the recovery of any debt or liquidated money demand. Particularly, where it is clear to the Court that the defendant has no defence on the merit for the claim of the plaintiff. …………………….. Where however serious disputes arose in the affidavits on points of law relating to the claim(s), the trial judge ought to exercise caution in entering judgment under the Undefended List Procedure and should transfer the matter from the Undefended List to the General Cause List to be dealt with by pleadings etc.?
See also the contribution of Nweze JSC in the recent case of AKAHALL & SONS LTD V NDIC (2017) LPELR-SC.302/2016 where reference was made to many decided authorities where the Undefended List Procedure was appropriately utilized. See generally the following cases of NKWO MARKET COMMUNITY BANK LTD V. OBI (2010) 14 NWLR (PT. 1213) 169; I. H. LTD V. SONEB ENT. LTD (2010) 4 NWLR (PT. 1185) 561.
Now to the appeal before us. Did the Appellant in his affidavits and statement of Defence raise any issue that justified the transfer of the case to the general cause list? The Appellant
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in his defence raised two issues which he considered major:
(1) That the 1st and 2nd Respondents changed the nature of the contract that it (Appellant) guaranteed without consulting her or without her consent and that in view of this, she is absolved from any liability under the guarantee.
(2) That the 1st Respondent is precluded in law from instituting or continuing these proceedings against the Appellant because the Advance Payment Bond and guarantee allegedly created thereby, were stale, spent and of no effect.
?The above two defences were copiously and with clear and detailed particulars pleaded both in the affidavits and statement of defence of the Appellant. They were not in my view sham defences or moon shine. They were real. On going through the processes I had no doubt in my mind that the issues raised were serious and could not just be waived aside as sham defences. Learned senior counsel for the 1st Respondent in his brief. The Appellant had raised prima facie issues for determination which could not be settled by affidavit evidence. There was need to call oral evidence. I set out verbatim the arguments of the learned silk for the
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1st Respondent to show how serious the issues raised by the Appellant were; and his effort to more or less resolve the contentious issues without oral hearing. Take for example, the contention of the 1st Respondent that there was no agreement between the 1st Respondent and the 2nd Respondent that the 2nd Respondent should supply the Garri to a 3rd party. The issue has been raised and it is a reason to transfer the matter to the general cause list to be heard on the merits. The Appellant must be given the chance to produce evidence or document to support the alleged claim of a variation of the supply contract between the 1st Respondent and 2nd Respondent. It is true that the original contract was in writing; the argument that any variation must also be in writing is not an argument that can be made at that stage. It is not impossible that despite the fact that the original agreement was in writing, the parties could have gone ahead wrongly to vary it orally. It is a matter for oral evidence. This is clear evidence that the Appellant raised a prima facie case. The same applies to the issue of whether the 1st Respondent is precluded in law from instituting or
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continuing these proceedings against the Appellant because the Advance Payment Bond and guarantee allegedly created thereby, were stale, spent and of no effect. There is need to resolve the conflict between the parties as to the correct interpretation of the relevant clause in the agreement. This cannot be done by affidavit evidence. It was not necessary for the trial judge to consider at that stage whether the defences had been proved. What is required is to look at the facts deposed to in the affidavit or the facts averred in the statement of defence and see if they can prima facie afford a defence to the action. The learned trial judge was wrong in his view that the Claimant was able to show that the defences of the Defendants lacked substance. This was certainly not the stage for such decision. All the Appellant was required to do was raise a prima facie case justifying the transfer of the suit to the general cause list. This, he was able to do. His lordship jumped the gun. He should have looked more closely at the defences put up by the Appellant. As submitted by learned counsel for the Appellant the myriads of affidavits filed by the parties showed that
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the case was indeed contentious and not one for summary judgment. I am of the firm view that the case at least as against the Appellant was not one for summary judgment procedure. Issue 1 is resolved in favour of the Appellant.
On issue 2, I agree with the learned senior advocate that it is the Statement of Claim that the Court must look at to determine whether there is a cause of action against the Defendant, not the Statement of Defence or counter affidavit. Once the claim discloses a cause of action, any other issue arising from the Statement of Defence must be thrashed out at the hearing. Striking out the name of the Appellant at that early stage is almost akin to entering judgment summarily for the Claimant when the Defendant has made out a prima facie case for hearing on the merit. The Claimant must be allowed to have his day in Court. Issue 2 is resolved against the Appellant and in favour of the Respondent.
?
There is no need to consider the rest of the issues raised in this appeal as I am constrained to remit the case back for trial on the merits. No need for any comments that may jeopardise the hearing de novo. Suffice it to advise that
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sometimes it pays not to be in too much of a hurry. Pleadings had been concluded. A little more patience to allow hearing on the merits would have saved the parties and the Courts precious time. This case may now travel all the way to the Supreme Court and probably return to the trial Court for a fresh start. This appeal succeeds in part and is hereby allowed in part. The part of the Ruling of the lower Court dismissing the Appellant?s application to strike out its name from the suit is affirmed. Subject to this, the rest of the judgment including interest and costs are set aside. The application for summary judgment is dismissed. The case is remitted back to the Chief Judge of Oyo State for re-assignment to another judge within jurisdiction for the case to be transferred to the general cause list for trial on the merit. Parties to bear their respective costs.
HARUNA SIMON TSAMMANI, J.C.A.: I read in advance the judgment delivered by my learned brother, C. E. Iyizoba, JCA.
The purpose of Order 11 Rule(1) of the Oyo State High Court (Civil Procedure) Rules, 2010 is not to shut out a Defendant from being heard in
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his defence. It is aimed at a quick dispensation of justice when it is clear that a Defendant has no defence to the claim. It is not intended at this stage, and by that Rule of Order 11 (supra) that the Court should decide on the merit of the defence, which must come later. I therefore agree with the finding of my learned brother, Iyizoba, JCA that the learned trial Judge “jumped the gun” when he foreclosed the defence of the Appellant on the ground that “it lacked substance”, when the Appellant had not been heard on it.
I therefore agree with my learned brother that the decision of the Court below be set aside, and the matter remitted to the Court below for hearing under the general cause list.
NONYEREM OKORONKWO, J.C.A.: Entry of judgment under the summary judgment procedure or under the undefended list method are the civil procedure machinery for ensuring speedy dispensation of justice mainly in liquidated money demand where it is obvious or patent that, either there is no defence to the claim or where the defendant is either lethargic in filing a defence or where what is filed does not disclose any defence to
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the claim and the facts in support.
In cases where a defence is disclosed either in the defence or affidavit, and a defence refers to prima facie defence not proven defence, the matter would proceed to trial rather to a hasty judgment according to the conjecture of a trial Court. Patience not hastiness is called for.
It is in this regard that I agree with the lead judgment of my learned brother Chinwe Eugenia Iyizoba JCA who wrote the lead judgment that “A little more patience to allow hearing on the merit would have saved the parties and the Court precious time” and obviate the need for a transitory issue to run the whole course of the judicial hierarchy only to begin again.
?I agree with my lords order as made in the lead judgment.
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Appearances:
Y. S.Ogunremi, Esq.For Appellant(s)
Ayodele Akintunde, SAN with him, Onibalusi, Esq. and Alfred Akinjo, Esq for the 1st Respondent.
2nd Respondent not represented
For Respondent(s)
Appearances
Y. S.Ogunremi, Esq.For Appellant
AND
Ayodele Akintunde, SAN with him, Onibalusi, Esq. and Alfred Akinjo, Esq for the 1st Respondent.
2nd Respondent not representedFor Respondent
