HADEJIA JAMA’ARE RIVER BASIN DEVELOPMENT AUTHORITY v. CHIMANDE NIGERIA LIMITED
(2016)LCN/8113(CA)
In The Court of Appeal of Nigeria
On Thursday, the 21st day of January, 2016
CA/K/433/2013
RATIO
PRACTICE AND PROCEDURE: THE OBJECTIVE OF AWARDING COST
The objective of awarding costs is not to punish an unsuccessful litigant but it is to serve as an indemnity to compensate a successful party for the expenses to which he has been put by having to come to Court, such as expenses incurred for filing the action, attending Court for the prosecution of the matter, etc – Ladega Vs Akinyuli (1975) 2 SC 91, Olasipe Vs National Bank of Nigeria Ltd (1935) 3 NWLR (Pt 1i) 147, Mbanugo Vs Nzefili (1998) 2 NWLR (Pt.537). per. HABEEB ADEWALE OLUMUYIWA ABIRU, J.C.A.
PRACTICE AND PROCEDURE: HOW COST CAN BE CLAIMED
Now, cost can be claimed in either of two ways – (i) as a specific relief on the writ of summons; or (ii) orally in open Court, as a consequential relief, after the conclusion of the case and entry of judgment. Where cost is claimed as a specific relief on the writ of summons and in a particular sum, it is in the nature of specific damages that must be specifically pleaded and proved – Divine Ideas Ltd Vs Umoru (2007) All FWLR (Pt.380) 1468, Fortune International Bank Plc Vs City Express Bank Ltd (2012) 14 NWLR (Pt.1319) 86. Where it is claimed orally in open Court as a consequential relief, at the conclusion of a matter, its award is entirely at the discretion of the Court. per. HABEEB ADEWALE OLUMUYIWA ABIRU, J.C.A.
COURT: COURT’S DISCRETION; THE EXERCISE OF THE DISCRETION OF THE TRIAL COURT
Going forward and assuming that the specific claim of the Respondent fell within the embrace of the discretion of the lower Court to grant, it is a discretion, like any other discretion, that must be exercised judicially and judiciously based on the correct principles of law and where the exercise of the discretion is not judicial or judicious, and is based on no cause or on flimsy, capricious and unfounded grounds, an appellate Court will interfere – Wurno Vs UAC Ltd (1956) SCNLR 99, Ogundulu Vs Phillips (1973) NMLR 267, Shell BP Petroleum Development Company Nigeria Ltd Vs Cole (1978) 3 SC 183. per. HABEEB ADEWALE OLUMUYIWA ABIRU, J.C.A.
COURT: THE AWARD OF COURT: WHAT THE COURT IS ENTITLED TO CONSIDER IN AWARDING COST
In awarding costs, a Court is entitled to consider among other factors, the following (a) the summons fee; (b) the duration of the case; (c) legal representation; (d) expenses incurred by the successful party in the ordinary course of prosecuting the case; (e) the value or purchasing power of the Naira at the time of the award – Onabanjo Vs Ewetuga (1993) 4 NWLR (Pt.288) 443 and Delta Steel Co Ltd Vs American Computer Tech Ltd (1999) 4 NWLR (Pt.597) 53. And the party making the request for costs must itemize his realistic or necessary expenses arising from the suit in its request for costs and the Court will assess the appropriate quantum to award as costs based on the itemized expenses – Akinbobola Vs Plisson Fisco Nigeria Ltd (1991) 1 NWLR (Pt.167) 270, Layinka Vs Makinde (2002) 5-6 SCNJ 77. Now, since costs should not be punitive, arbitrary and unreasonable, it follows that where a trial Court decides to award cost which is on the high side or which appear punitive, it must state the reason for doing so African Continental Bank Plc Vs Ndoma-Egba supra. A Court must give correct and convincing reasons for its award of costs Nigerian National Petroleum Corporation Vs Klifco Nigeria Ltd (2011) 10 NWLR (Pt.1255) 209, Citibank Nigeria Ltd Vs Ikediashi (2014) LPELR-CA/L/556/2008. per. HABEEB ADEWALE OLUMUYIWA ABIRU, J.C.A.
JUSTICES
UWANI MUSA ABBA-AJI Justice of The Court of Appeal of Nigeria
HABEEB ADEWALE OLUMUYIWA ABIRU Justice of The Court of Appeal of Nigeria
AMINA AUDI WAMBAI Justice of The Court of Appeal of Nigeria
Between
HADEJIA JAMA’ARE RIVER BASIN DEVELOPMENT AUTHORITY Appellant(s)
AND
CHIMANDE NIGERIA LIMITED Respondent(s)
HABEEB ADEWALE OLUMUYIWA ABIRU, J.C.A.(Delivering the Leading Judgment): The Respondent, as plaintiff, commenced the action in the lower Court against the Appellant, as defendant, and its claims were for:
i. The sum of N7,952,589.27 being the exact amount which the Appellant admitted owing the Respondent as per Exhibits MIE and MIH attached to the affidavit in support of the writ of summons.
ii. Interest on the said sum at bank rate of 23% from the 1st of May 2008 to the date of judgment and thereafter at the Court rate of 10% until final liquidation of the whole amount.
iii. The cost of instituting and prosecuting this suit the its logical conclusion, which is N200,000.00.
The suit was placed under the Undefended List by an order of Court made on the 18th of April, 2012 by Honorable Justice Abdullahi Mahmoud Bayero and it was listed as Suit No K/141/2012 and the matter was listed for hearing on the 15th of May, 2012.
The records show that the Appellant filed a notice of intention to defend dated the 7th of May, 2012 and this was accompanied by an affidavit of facts. The lower Court took arguments on the
matter and in a considered judgment delivered on the 18th of June, 2012, it found in favour of the Respondent and it entered judgment in the following term:
i. The Appellant is hereby ordered to pay to the Respondent the sum of N7,952,589.27 being the amount owed by the Appellant from the contract of drilling One No motorized borehole at Unguwar Gari, Kibiya Local Government, Kano State which amount remains unpaid till date despite repeated demands.
ii. Interest at 23% bank rate is here imposed on the judgment sum of N7,952,589.27 from 1st of May, 2008 till today 18th?of June, 2012 and thereafter at 10%?Court rate until final liquidation of the whole judgment sum.
iii. The Appellant shall pay to the Respondent N200,000.00 as cost of instituting and prosecuting this suit.
The Appellant was dissatisfied with the judgment and it caused its Counsel to file a notice of appeal dated the 28th of August, 2012 and the notice of appeal contained two grounds of appeal. In arguing the appeal before this Court, Counsel to the Appellant filed a brief of arguments dated the 21st of October, 2013 on the 1st of November, 2013 while the brief of
arguments of the Respondent dated the 5th of May, 2015 was filed on the 27th of May, 2015 and the brief of arguments was deemed properly filed by this Court on the 1st of June, 2015. At the hearing of the appeal, Counsel to the parties relied on and adopted the arguments contained in their respective brief of arguments.
Counsel to the Appellant formulated two issues for determination in this appeal and these were:
i. Whether or not the learned trial Judge rightly entered judgment on the undefended list which included claims for interest at bank rate in favour of the Respondent and against the Appellant.
ii. Whether or not the learned trial Judge rightly awarded the sum of N200,000.00 as cost in favour of the Respondent.
Counsel to the Respondent agreed that there were indeed two issues for determination in the appeal, but he reformulated the issues thus:
i. Whether the lower Court was right in entering judgment under the Undefended List Procedure.
ii. Whether the lower Court was right in awarding interest and cost as claimed by the Respondent.
Now, it is elementary in an appeal that issues for determination must be
distilled from, related to and be founded on the grounds of appeal contained in the notice of appeal and must deal with matters which are direct challenge to the decision of the lower Court. Any issue for determination formulated outside the grounds of appeal and which does not deal with matters directly challenging the decision of the lower Court is of no use in an appeal and it will irrelevant and be struck out – Shipcare Nigeria Limited, Owners of the “M/T African Hyacinth” Vs The Owners of the “M/V Fortunato” (2011) 7 NWLR (Pt.1246) 205, Ebute Vs Union Bank of Nigeria Plc (2012) 2 NWLR (Pt.1284) 254, Odusote Vs Odusote (2012) 3 NWLR (Pt.1288) 478, and Okechukwu Vs Independent National Electoral Commission (2014) 17 NWLR (Pt.1436) 255. A read through the two grounds of appeal contained in the Appellant’s notice of appeal shows that they were not directed at the entire judgment of the lower Court, but at the part of the judgment. They complained against the award of interest on the sum of N7,952,589.27 at bank rate of 23% from the 1st of May 2008 to the date of judgment and also against the award of the sum of N200,000.00 as cost for the institution and
prosecution of the suit. The two grounds of appeal did not question the judgment entered in favour of the Respondent in the sum of N7,952,589.27 and neither did they contest the award of interest of 10% on the sum from date of judgment until final liquidation.
Thus, the two issues for determination in this appeal are:
i. Whether the lower Court was correct when it granted the claim of the Respondent for interest on the sum of N7,952,589.27 at bank rate of 23% from the 1st of May 2008 to the date of judgment.
ii. Whether the lower Court was correct when it granted the claim of the Respondent for the sum of N200,000.00 as cost for instituting and prosecuting the action.
This appeal will be resolved on these two issues for determination and the two issues will be considered together.
In arguing the first issue for determination, Counsel to the Appellant referred to the provisions of Sections 137 of the Evidence Act on burden of proof and stated that the Respondent had the burden of first proving his case by credible evidence before the burden would shift to the Appellant and that the same principle applies in a case under the undefended
list and he referred to the cases of Odu Vs Agbor-Hemesor (2004) FWLR (Pt.188) 935 and Chrisdon Industrial Ltd Vs AIB Ltd (2002) FWLR (Pt 128) 1355. Counsel stated that for a claim of interest to properly exist for determination in a Court of law, the grounds upon which the claim is based must be clearly stated and the claimant must plead facts which show that he is entitled to such interest and the affidavit, in a case under the undefended list, must disclose proof of entitlement to interest and he referred to the cases of International Trust Bank Plc Vs Kantal Hairu Co Ltd (2006) All NWLR (Pt.292) 116 and NSC Ltd Vs Mojec International Ltd (2005) AII FWLR (Pt.262) 476. Counsel stated that the Appellant did not aver any fact entitling it to the claim of interest at 23% bank rate on the contract sum and did not prove any such entitlement by way of affidavit or documentary evidence and the lower Court was thus in error when it awarded the interest as claimed. Counsel reproduced the claims of the Appellant and reiterated that no single paragraph in the affidavit in support of the claims talked about a claim for interest and that none of the exhibits provided
the right to such claim of interest and he stated that the case was on all fours with the case of Himma Merchants Ltd Vs Aliyu (1994) 6 SCNC 87 and he quoted extensively from the case and referred to several other cases. Counsel stated that the lower Court ought not to have entered judgment on the claim for interest under the undefended list and he urged this Court to resolve the issue for determination in favour of the Appellant.
On the second issue for determination, Counsel stated that the Respondent did not plead or prove any fact entitling it to the claim for N200,000.00 as cost of the action and that nowhere in the affidavit in support of the claim did the Respondent make any averment or adduce any evidence in support of the claim and that a claim for costs is in the nature of special damages that must specifically pleaded and strictly proved and he referred to the case of Divine Ideas Ltd Vs Umoru (2007) All FWLR (Pt 380) 1468. Counsel stated that if we were to follow the path that says that a Court of law always has an unfettered discretion to award cost to a successful party, it is a discretion that must be exercised judicially and judiciously
and cost follows event and is not awarded as a punitive measure against the losing party nor as a bonus for the
successful party and he referred to the case of Nigerian Bank for Commerce and Industry Vs Alfijir (Mining) Nigeria Ltd (1999) 11-12 SCNJ 294. Counsel stated that it is on record that the entire cost expended by the Respondent in commencing the action was N5,074.00 and that no other evidence was placed before the lower Court on the expenses incurred, and that though an appellate Court does not interfere with the way a trial Court exercised its discretion, where it is shown, as in the instant case, that the discretion was wrongly exercised, the appellate Court will not hesitate to interfere in such exercise of discretion and he referred to the case of NNPC Vs Clifco Nig Ltd (2011) All FWLR (Pt.583) 1875. Counsel urged this Court to also resolve this issue in favour of the Appellant.
In his response, Counsel to the Respondent stated that the claims for interest and costs were as a result of the attitude of the Appellant in holding the Respondent’s money without justification and that in one of the correspondences exchanged between the
parties, Exhibit MIF, the Respondent complained to the Appellant that it took a bank loan and indicated that it was going to Court to claim the contract sum together with interest and it put the amount due as N14,309,644.00 and that the letter was neither replied nor its contents challenged and that documents attached to an affidavit form part of the affidavit and he referred to the case of Gbehe vs Ali-One (2000) 11 NWLR (Pt.578) 294. Counsel stated that in the affidavit in support of the notice of intention to defend, the Appellant did not contest the paragraph of the affidavit in support of the claim wherein Exhibit MIF was referred to and that this meant that Appellant admitted that the Respondent was going to claim interest. Counsel stated that it was incumbent on a defendant in an action under the undefended list procedure to file in affidavit condescending upon particulars contesting the claim of a plaintiff and that a mere general denial of a plaintiff?s claim was not sufficient and he referred to the case of Aso Motel Ltd Vs Deyemo (2006) 4 JNSC (Pt.13) 218. Counsel stated that the circumstances entitling the Respondent to the award of interest
were explicitly narrated in paragraph 4, 5 and 6 of the affidavit in support of the claims and he referred to the cases of Petgas Resources Ltd Vs Mbanefo (2006) All FWLR (Pt.337) 471 and GFK Investments (Nig) Ltd vs. Nigeria Telecommunications Plc (2009) 45 STRN 36 on the instances that a claim for interest can be made as of right and stated that there was a contract between the parties and there was a mercantile usage on the contractual project and that the Appellant kept the Respondent out of its money for long and had the use of it to itself and so the Respondent ought to be compensated by damages. Counsel stated that the lower Court was right with the award of interest and that the issue should be resolved in favour of the Respondent.
?
On the second issue for determination, Counsel stated that, by our law, cost follows events and that a successful party is entitled to costs and that the award of costs is at the discretion of the Court and the exercise of which discretion is based on settled principles. Counsel stated that in the instant case the Appellant breached the terms of the express contract between the parties when it refused to pay the
Respondent the agreed contract sum and that, in instances of such breach of contract, a trial Court has a duty to restore the injured party, as far as monetarily possible, to the position he would have been put but for the breach. Counsel stated that a successful party should not be denied costs unless for good reasons and that in awarding costs, a trial Court should look at the verdict and the conduct of the parties to see if either of them had in any way involved the other unnecessarily in?the expense of litigation and that in the instant case, the Appellant refused to pay the Respondent the contract sum until after compelling it to embark on an unnecessary litigation. Counsel referred to the provisions of Order 53 Rules 3, 6 and 7 of the Kano State High Court Rules on costs and stated that part of the facts that the Court will look at in awarding costs is the cost of hiring a legal practitioner and having failed to do equity by paying the Respondent the contractual sum as and when due, the Appellant’s hands were not clean and it cannot thus enjoy the exercise of the equitable discretion in its favour. Counsel urged this Court to resolve the second issue for
determination also in favour of the Respondent.
This action was listed under the Undefended List Procedure. The provisions of the High Court of Kano State Rules relating to the Undefended List provide a summary judgment procedure. The whole purpose of a summary judgment procedure is to ensure justice to a plaintiff and minimize delay where there is obviously no defence to his claim and thus prevent the grave injustice that might occur through a protracted and immensely frivolous litigation. It is to prevent sham defence from defeating the right of a plaintiff by delay and thus causing great loss to a plaintiff. In other words, the summary judgment rules are specially made to help the Court achieve their primary objective, i.e. to do justice to the parties by hearing their cases on the merit with utmost dispatch and prevent the frequent outcry that justice delayed is justice denied – United Bank for Africa Plc Vs Jargaba (2007) 11 NWLR (Pt 1045) 247, University of Benin Vs Kraus Thompson Organisation Ltd (2007) 14 NWLR (Pt.1055) 441, Wem a Securities and Finance Plc Vs Nigerian Agricultural Insurance Corporation (2015) 16 NWLR (Pt.1484)
93.
?Speaking on the essence of the Undefended List procedure, this Court in its unreported judgment in Appeal No.CA/K/131/2010 – Samabey International Communications Ltd Vs Celtel Nigeria Ltd (Trading as Zain) delivered on the 26th of April, 2013 stated thus:
“It is pertinent to state that the provisions on undefended list in the High Court of Kano State (Civil Procedure) Rules are adjunct to the course of justice. They are rules of Court touching on the administration of justice and the procedure is simply designed to ensure speedier attainment of justice with ease, certainty and dispatch, when it is abundantly clear that the defendant has absolutely no defence to the plaintiffs case. The undefended list procedure is a specie of summary judgment evolved by the rules of Court for the speedy disposal of otherwise uncontested cases and where there is no reasonable doubt as to the efficacy of the plaintiffs claims and it would be most unconscionable to oblige an otherwise liable defendant the opportunity to employ mere subterfuge to dribble his opponent and the Court just for the purpose of stalling proceedings and cheating the plaintiff out of reliefs to
which he ordinarily would have been entitled – Imoniyame Holdings Ltd Vs Soneb Enterprises Ltd (2010) 4 NWLR (Pt 1185) 561, G. M. O. Nworah &Sons Co Ltd Vs Afam Akputa Esq (2010) 9 NWLR (Pt 1200) 443, Babale Vs Eze (2011) 11 NWLR (Pt.1257) 48, David Vs Jolayemi (2011) 11 NWLR (Pt.1258) 320.”
Also in Okoli Vs Morecab Finance (Nig) Ltd (2007) 14 NWLR (Pt 1057) 37 at page 70 paragraph C, the Supreme Court stated:
“?the rules as regards matters placed under the undefended list is designed to enable a plaintiff to obtain summary judgment without trial in those cases where the plaintiffs case is unassailable (as in the instant case) see Cow Vs Casey (1949) 1 KB 474 and the defendant cannot show a defence which will lead to a trial on its merits.”
?
These mean that there are two steps to the applicability of the Undefended List procedure and these are (i) there must be no reasonable doubt as to the efficacy of the claims of a plaintiff; and (ii) the defendant must not have a plausible defence to the claim of the plaintiff. The first step must be present before the second step can be inquired into and where either of them is not present, then
the undefended list procedure cannot be used. In other words, before the defendant can be called upon to depose to an affidavit which must condescend upon particulars and deal specifically with the plaintiffs claim, the plaintiff has a concomitant duty to first of all satisfy the Court with an affidavit disclosing credible and reliable facts backed up with authentic and credible documents which would warrant the Court to give him judgment where the defendant’s affidavit does not disclose facts which would at least throw some doubt on the plaintiffs case. This is in keeping with the principle of burden of proof that says that in civil suits, a plaintiff ought to succeed on the strength of his case and not on the weakness of the defendant’s case – Aubergine Collections Ltd Vs Habib Nigeria Bank Ltd (2002) 4 NWLR (Pt.757), S.P.D (Nig) Ltd Vs Arho-Joe (Nig) Ltd (2006) 3 NWLR (Pt.966) 173 and David Vs Jolayemi (2011) 11 NWLR (Pt.1258) 320. Where the case of a plaintiff under the undefended list is not unassailable, the question of whether or not the defendant disclosed a defence on the merits does not arise – Alhaji Muktari Uba & Sons Ltd Vs Lion Bank of
Nigeria Plc (2006) 2 NWLR (Pt.964) 288, Nigedan Postal Services Vs Insight Engineering Company Ltd (2006) 8 NWLR (Pt.983) 435, Intercontinental Bank Ltd Vs Brifina Ltd (2012) 13 NWLR (Pt.1316) 1.
The question begging for answer in this appeal is whether the claims of the Respondent for interest at bank rate of 23% on the contract sum of N7,952,589.27 from 1st of May, 2008 till 18th of June, 2012, date of judgment and for the sum of N200,000.00 as cost of instituting and prosecuting this suit were unassailable, in the circumstances of this case, as to entitle the Respondent to them under the undefended list procedure.
The interest at bank rate of 23% on the contract sum of N7,952,589.27 from 1st of May, 2008 till date of judgment was pre judgment interest and the general rule at common law is that pre judgment interest is not payable on a debt or loan in the absence of express agreement or some course of dealing or custom to that effect. Thus, pre judgment interest will, be payable where there is an express agreement to that effect and such agreement may be inferred from a course of dealing between the parties or where an obligation to pay interest
arises from the common practice or usage of a particular trade or business or under a principle of equity such as breach of a fiduciary duty – Alfontrin Ltd Vs Attorney General, Federation (1996) 9 NWLR (Pt 475) 634, Veepee Industries Ltd Vs Cocoa Industries Ltd (2008) NWLR (Pt.1105) 486, Diamond Bank Ltd Vs Partnership Investment Co Ltd (2009) 18 NWLR (Pt.1172) 67. Consequentially, a plaintiff, in order to succeed in a claim for pre judgment interest, must show how the entitlement to such interest arose, that is whether by law, by contract or agreement or he must plead facts showing that the claim is part of the loss or special damages which the defendant’s wrong imposed on him. It is not enough to merely say that the plaintiff is claiming interest. The basis of the claim of interest must be made manifest on the pleadings – Ekwunife Vs Wayne (W.A.) Ltd (1989) 2 NWLR (Pt.122) 422, Himma Merchants Ltd Vs Aliyu (1994) 5 NWLR (Pt.347) 667, Sani Abacha Foundation for Peace & Unity Vs United Bank for Africa Plc (2010) 17 NWLR (Pt.1221) 192, Wema Securities and Finance Plc Vs Nigerian Agricultural Insurance Corporation (2015) 16 NWLR (Pt.1484) 93.
Additionally, where a particular rate of interest is claimed, the law is that the rate of interest is dependent on the agreement between the parties or established by custom or consent of the parties and it is the duty of the person claiming a particular rate of interest to prove it – Ishola Vs Societe Generale Bank of Nigeria Ltd (1997) 2 NWLR (Pt.488) 405, Suberu Vs Atiba Iyalamu Savings and Loans Ltd (2007) 10 NWLR (Pt.1043). In other words, a claim for a particular rate of interest cannot be treated with levity of uncertainty and speculation will not help in establishing that rate of interest. Any claim on a rate of interest, except where concrete agreement between the parties is owned up by them or where there is positive and unequivocal admission by a party, that rate of interest has to be proved by admissible evidence ? Veepee Industries Ltd Vs Cocoa Industries Ltd supra. Thus, the Courts treat a claim for a particular rate of interest as being in the realm of special damages that must be specifically pleaded and strictly proved – Union Bank of Nigeria Plc Vs Sepok Nigeria Ltd (1998) NWLR (Pt 578) 439, African Continental Bank Plc Vs Ndoma-Egba
(2000) 8 NWLR (Pt 669) 389, First City Monument Bank Plc Vs. Akanimo (2007) LPELR-CA/L/440/2004. It is for these reasons that some Courts maintain that a claim for pre-judgment interest should not be entertained under the Undefended List Procedure – Ekerete Vs United Bank for Africa Plc (2005) 9 NWLR (Pt.930) 401, Adejo Vs Ubesie (2012) LPELR-CA/J/288/2007.
In the instant case, reading through the entire affidavit of facts filed by the Respondent in support of its claims and the counter affidavit it filed in response to the Appellant’s notice of intention to defend, nowhere therein was any fact deposed to on entitlement of the Respondent to pre judgment interest on the contract sum and neither did the Respondent aver any fact as the basis for its claim for 23% banker rate, not being a bank, as the applicable rate of interest. There was no basis in the case made out by the Respondents before the lower Court justifying the award of interest at bank rate of 23% on the contract sum of N7,952,589.27 from 1st of May, 2008 till date of judgment. The award is baseless and it is liable to be set aside. This is similar to what happened in the case of Wema
Securities and Finance Plc Vs Nigerian Agricultural Insurance Corporation (2015) 16 NWLR (Pt.1484) 93. The first issue for determination is resolved in favour of the Appellant.
On the award of N200,000.00 as cost of instituting and prosecuting the suit, the general position of the law is that a successful party in an action, unless he misconducts himself, is entitled to costs as of right – Haco Ltd Vs Brown (1973) 4 SC (Reprint) 103, Chijioke Vs Soetan (2006) 10 NWLR (Pt.990) 179.
The objective of awarding costs is not to punish an unsuccessful litigant but it is to serve as an indemnity to compensate a successful party for the expenses to which he has been put by having to come to Court, such as expenses incurred for filing the action, attending Court for the prosecution of the matter, etc – Ladega Vs Akinyuli (1975) 2 SC 91, Olasipe Vs National Bank of Nigeria Ltd (1935) 3 NWLR (Pt 1i) 147, Mbanugo Vs Nzefili (1998) 2 NWLR (Pt.537).
?Now, cost can be claimed in either of two ways – (i) as a specific relief on the writ of summons; or (ii) orally in open Court, as a consequential relief, after the conclusion of the case and entry of judgment. Where cost is
claimed as a specific relief on the writ of summons and in a particular sum, it is in the nature of specific damages that must be specifically pleaded and proved – Divine Ideas Ltd Vs Umoru (2007) All FWLR (Pt.380) 1468, Fortune International Bank Plc Vs City Express Bank Ltd (2012) 14 NWLR (Pt.1319) 86. Where it is claimed orally in open Court as a consequential relief, at the conclusion of a matter, its award is entirely at the discretion of the Court.
In the instant case, the Respondent claimed cost in the specific sum of N200,000.00 as an item of claim on the writ of summons and its claim was thus in the nature of special damages. The Respondent did not state any fact in either its affidavit of facts filed in support of its claims or in its counter affidavit filed in response to the Appellant’s notice of intention to defend upon which the claim was predicated.
Going forward and assuming that the specific claim of the Respondent fell within the embrace of the discretion of the lower Court to grant, it is a discretion, like any other discretion, that must be exercised judicially and judiciously based on the correct principles of law and where the
exercise of the discretion is not judicial or judicious, and is based on no cause or on flimsy, capricious and unfounded grounds, an appellate Court will interfere – Wurno Vs UAC Ltd (1956) SCNLR 99, Ogundulu Vs Phillips (1973) NMLR 267, Shell BP Petroleum Development Company Nigeria Ltd Vs Cole (1978) 3 SC 183.
?In awarding costs, a Court is entitled to consider among other factors, the following (a) the summons fee; (b) the duration of the case; (c) legal representation; (d) expenses incurred by the successful party in the ordinary course of prosecuting the case; (e) the value or purchasing power of the Naira at the time of the award – Onabanjo Vs Ewetuga (1993) 4 NWLR (Pt.288) 443 and Delta Steel Co Ltd Vs American Computer Tech Ltd (1999) 4 NWLR (Pt.597) 53.
And the party making the request for costs must itemize his realistic or necessary expenses arising from the suit in its request for costs and the Court will assess the appropriate quantum to award as costs based on the itemized expenses – Akinbobola Vs Plisson Fisco Nigeria Ltd (1991) 1 NWLR (Pt.167) 270, Layinka Vs Makinde (2002) 5-6 SCNJ 77.
?Now, since costs should not be punitive, arbitrary and
unreasonable, it follows that where a trial Court decides to award cost which is on the high side or which appear punitive, it must state the reason for doing so African Continental Bank Plc Vs Ndoma-Egba supra. A Court must give correct and convincing reasons for its award of costs Nigerian National Petroleum Corporation Vs Klifco Nigeria Ltd (2011) 10 NWLR (Pt.1255) 209, Citibank Nigeria Ltd Vs Ikediashi (2014) LPELR-CA/L/556/2008.
In the instant case, apart from the fact that neither in its affidavit of facts nor in its counter affidavit filed in response to the Appellant’s notice of intention to defend did the Respondent depose to any fact in support of his claim for costs, the records also show that at no time did the Counsel to the Respondent itemize the expenses incurred in instituting and prosecuting the suit. The Respondent did not thus provide any basis for the lower Court to assess the quantum of costs to be awarded. The records show that the lower Court did not state the basis for the award of N200,000.00 as costs and neither did it give any reason for awarding that sum as costs. The records show that the summons fee paid by the
Respondent was N5,074.00 and that the duration of the matter was barely two months spanning over three adjournments. Thus, there was nothing on the records justifying the award of N200,000.00 as costs. The award of the sum of N200,000.00 was outrageously excessive in the circumstances of this case and the law is that this Court is enjoined to set aside such an award of costs and order in its place that which is reasonable – Macaulay Vs NAL Merchant Bank Ltd (1990) 4 NWLR (Pt.144) 283, Chijioke Vs Soetan supra. The award of N200,000.00 as cost of instituting and prosecuting the suit will thus be set aside. In its place, this Court, taking into consideration the summons fee and the duration of the matter, will award the sum of N10,000.00 as costs to the Respondent. The second issue for determination is resolved in favour of the Appellant.
In conclusion, this Court finds merits in this appeal and it hereby succeeds. The awards of interest at 23% bank rate on the judgment sum of N7,952,589.27 from 1st of May, 2008 till 18th of June, 2012 and of the sum of N200,000.00 as cost of instituting and prosecuting the suit made by the High Court of Kano State in favour
of the Respondent in its judgment in Suit No K/141/2012 delivered by Honorable Justice Abdullahi Mahmoud Bayero on the 18th of June, 2012 are hereby set aside. The Respondent is, instead, awarded the sum of N10,000.00 as its cost for instituting and prosecuting the suit in the lower Court. These shall be the orders of this Court and the parties shall bear their respective costs of this appeal.
UWANI MUSA ABBA AJI, J.C.A.: I have had the privilege of reading in draft the leading judgment of my learned brother, H. A. O. Abiru, JCA, just delivered.
I agree with the reasoning and conclusion of my learned brother that the appeal has merit and it is hereby allowed. Accordingly, the judgment of the lower Court delivered on the 18/6/2012 is hereby set aside. I abide by the consequential order as to costs.
AMINA AUDI WAMBAI, J.C.A.: I have had the privilege of reading in draft the judgment just delivered by my learned brother Habeeb Adewale Olumuyiwa Abiru, JCA, I agree with the reasoning and conclusion reached that the appeal succeeds and is to be allowed. I also abide by the cost
awarded in the leading Judgment.
Appearances
Abdullahi A Duro with him, Sani IdrisFor Appellant
AND
Lawan Yaro Mohammed with him, S. A. AbubakarFor Respondent
