HAJIS PROPERTIES LTD & ANOR v. ASO SAVINGS AND LOANS PLC & ANOR
(2022)LCN/16771(CA)
In The Court Of Appeal
(ABUJA JUDICIAL DIVISION)
On Friday, November 18, 2022
CA/A/39M/2016
Before Our Lordships:
Peter Olabisi Ige Justice of the Court of Appeal
Hamma Akawu Barka Justice of the Court of Appeal
Danlami Zama Senchi Justice of the Court of Appeal
Between
1. HAJIS PROPERTIES LIMITED 2. NANMWA CHETO (As Substitute For Late ENGR. ZINTIM JIMMY CHETO – Deceased) APPELANT(S)
And
1. ASO SAVINGS AND LOANS PLC 2. OBIAJULU CHIGBO RESPONDENT(S)
RATIO
THE POSITION OF THE LAW ON AN APPLICATION FILED UNDER THE UNDEFENDED LIST PROCEDURE
The trite position of the law is that an action brought pursuant to Order 21 (3) of the rules governing the lower Court, placed a duty on the defendant to mandatorily file a statement of his intention to defend, stating circumstances showing a viable defense. This is because a plaintiff who claims under the undefended list procedure entitles the claimant to judgment where no notice to defend is supported by an affidavit showing that he has a defense to the action. This state of the law has been succinctly placed as follows by the apex Court thus:
“I will only reiterate the point that he made regarding the special nature of an undefended list action, wherein it is presumed that the defendant has no defense to the plaintiff’s suit. If the defendant intends to defend the suit, he must file a notice in writing together with an affidavit disclosing a defense on the merit and the affidavit should contain enough facts and particulars to satisfy the Court to remove the case from the undefended list to the general cause list. Where the affidavit discloses no defense, then the case would not go on the general cause list. See, Kwara State Government & Ors vs. Guthrie Nig. Ltd (2022) LPELR – 57678 (SC), per Augie, JSC. PER BARKA, J.C.A
THE ESSENCE OF THE UNDEFENDED LIST PROCEDURE
The law is certain in that the undefended list procedure is a special form of procedure designed to allow for quick dispensation of justice and to avoid unnecessarily clogging the legal system with proceedings which could otherwise have been easily and quickly disposed of. That being the case, the procedure should not be allowed to be frustrated or thwarted by fanciful or general defenses directed at frustrating the plaintiff of the judgment he richly deserves. Accordingly, a case should not be transferred to the general cause list merely on the whims and caprices of the defendant. See Uwaechina vs. Okeke (2015) 14 NWLR (pt. 1478) 108. PER BARKA, J.C.A.
THE POSITION OF THE COURT WHERE A DEFENDANT INTENDS TO DEFEND IN AN ACTION FILED ON THE UNDEFENDED LIST
It is also an established legal principle that in an action filed on the undefended list, and the defendant intends to defend, what the Court considers is whether the defendant had disclosed a defense on the merit to warrant the suit transferred to the general cause list. This he does by showing a triable issue, which term is amply defined by the cases of Gorkeens Ltd and Anor vs. Zenith Bank (supra), Muobike vs. Nwigwe (supra), all graciously submitted by the Appellants. PER BARKA, J.C.A.
HAMMA AKAWU BARKA, J.C.A. (Delivering the Leading Judgment): The instant appeal is against the judgment of the High Court of the Federal Capital Territory Abuja, coram Hon. Justice M.M. Kolo, in suit with No: FCT/HC/CV/1075/2014, delivered on the 8th of December, 2014. By the said judgment the lower Court held that:
“The entire affidavit of the defendants was rather vague and evasive which would under no circumstance be said to have amounted to a defense on the merit to warrant the transfer of this suit to the general cause list for trial. In line with prudent and good banking practice, all the steps taken by the plaintiff bank were supported with documents. Without much ado therefore, I would be constrained to, and I hereby enter judgment in favor of the plaintiff against the defendants under Order 21 Rule 4 of the Rules of this Court as claimed”.
The record shows that Respondent as Plaintiff before the lower Court instituted the matter under the undefended list procedure against the Appellants claiming as follows: –
a. An order of Court mandating the Defendants to pay the sum of N288,285,339. 22K (Two hundred and Eighty-Eight Million, Two Hundred and Eighty-Five Thousand Three Hundred and Thirty-Nine Naira Twenty-Two Kobo) being the outstanding balance of the facility granted to the defendants.
b. 24% interest per annum as agreed by the parties in the offer letter.
c. 1% interest default rate as agreed by the parties in the offer letter.
d. Interest at the rate of 10% per annum from the date of judgment until full payment is made.
The claim was supported by an affidavit of 22 paragraphs deposed to by one Eziokwu Nwafor Orizu, the relations Manager of the Respondent, Aso Savings and Loans Plc. Also filed along with the writ is a document titled pre-action counseling certificate, and a host of documents relating to the action before the Court. The trial Court having placed the suit under the undefended list, Appellants filed a notice of intention to defend on the 2nd of July, 2014, supported by an affidavit of 44 paragraphs deposed to by one Martins Obidigbo, one of the Project Engineers and Managers of the 1st and 2nd defendants/appellants during the construction of the Dolman Estate Gaduwa and other sundry documents. Holding that the entire affidavit of the Appellants was rather vague and evasive, and thereby lacking of any defense on the merit, the lower Court without much ado entered judgment for the Plaintiff/Respondent.
The Appellants who assert that they are the owners of a project for the construction of 12 terrace duplexes at Gaduwa District in Abuja applied for a loan of N250 Million Naira loan from the Respondent, with the intention of finishing the project and selling the entire houses to prospective buyers. Appellants state also that each of the 12 prospective buyers, opened accounts with the Respondents bank as per their agreement, and a total of N564,005,000.00 was received by the 1st Respondent as evidenced by exhibit L. It is the statement of the Appellant that Respondent not only recouped the principal sum owed, and interest, but ought to account for the sums of N302.5 million in excess of the money received. The 1st Respondent on the other hand while corroborating the project finance agreement entered between them, stated that Appellants were in default in spite of the 60 days extension granted to the Appellants amounting to N288,285,339.22k as at the 21st of August, 2013.
Dissatisfied with the judgment of the lower Court, wherein it was held that the affidavit filed by the Appellants failed to disclose any defense on the merit, Appellants filed a notice of appeal on the 6th of March, 2015 predicated on 10 grounds of appeal. The extant notice of appeal is the further amended notice of appeal filed on the 10th of March, 2022 with the leave of Court now predicated on twelve grounds of appeal. The appeal having been entered on the 26th of January, 2016 though deemed entered on the 16th March, 2017, Appellants filed an amended brief of argument on the 10th of March, 2022. Having received the 1st Respondent’s brief filed on the 22nd of April, 2022, Appellants filed a reply brief on the 29th of April, 2022. On the 17th of October, 2022 when the appeal eventually came up for hearing, both counsels identified the processes, adopted the same and urged the Court to grant their respective prayers. Whereas it is the prayer of the Appellants that the appeal be allowed, the decision of the lower Court set aside and he be allowed to be heard on the merit, the 1st Respondent prayed that the appeal be dismissed and the decision of the lower Court upheld.
In the brief settled by K.C. Muoemeka, the learned counsel representing the Appellants, the following issues were raised for resolution.
I. Whether from the totality of the 44 paragraph affidavit in support of notice of intention to defend, triable issue(s) have been raised to warrant a further investigation and if in the affirmative, whether the Court below was right to have entered judgment for the 1st respondent under the undefended list procedure without giving the Appellants leave to defend the suit.
II. Whether from a combined consideration of exhibit D1 (also called exhibit C by the 1st respondent) and exhibit L in juxtaposition with averments in the affidavit in support of notice of intention to defend (particularly where the appellants stated that the 1st respondents collected over ₦552.5 Million from subscribers for sale of forms and houses), it is safe to conclude that the said sum of ₦552.5 Million was actually received by the 1st respondent and if in the affirmative, whether the Court below was right in not granting leave to the appellants to defend the case.
On his part and in the brief settled for the 1st Respondent by Austine Dimonye, a lone issue was proposed for the determination of the appeal:
Whether the trial Court was right in entering judgment in favor of the 1st respondent in the absence of triable issues in the appellant’s affidavit in support of notice of intention to defend.
A calm consideration of the issues proposed reveals that the live question raised by this appeal is the denial by the lower Court, allowing the Appellant to defend the case on the merit. That being the case, I see the issue which must be resolved as being whether from the affidavit evidence led by the Appellant, the lower Court was right to have concluded that it had no defense on the merit. This is the issue raised by the Appellants in the two issues framed as well as the lone issue distilled by the 1st Respondent.
Now Order 21 Rule 3(1) (2) of the High Court of the Federal Capital Territory provided as follows:
Order 21 Rule 3(1):
“Where a party served with the writ delivers to a registrar within five days to the day fixed for hearing, a notice in writing that he intends to defend the suit, together with an affidavit disclosing a defense on the merit, the Court may give him leave to defend upon such terms as the Court may think just.”
Order 21 Rule 3(2):-
Where leave to defend is given under this rule, an action shall be removed from the undefended list and placed on the ordinary cause list; and the Court may order pleadings, or proceed to hearing without further pleadings.
Indeed the above reproduced rules of Court are clear and unambiguous. What is required as posited in the case of Muhammed vs. Viva Kwell Nigeria Ltd & Anor (2016) LPELR – 41162 (CA), that an affidavit in support of a notice of intention to defend needs no more than to explain certain matters with regards to the claim, or to throw a doubt such as joining issues, or to put forward such evidence that would cause in the mind of the Court a desire to investigate the matter further. Numerous decisions of the Apex Court and this Court are all agreed that where a triable issue, a material allegation calling for further investigation is established, the Court should transfer the case to the general cause list. See Skye Bank vs. Giwa (2017) LPELR – 43358 (CA).
The Appellant now complains that by his paragraphs 1 – 12 of the affidavit in support of the notice to defend raised the need for further investigation. He argued also that by paragraphs 7, 9, 9 – 15, 18, 19, 21, 22, 27 – 31, 30, 31, 39 – 41 put up a defense on the merit to the plaintiff’s claim.
In particular, the learned counsel for the Appellants submitted that by paragraphs 7, 9-12 of the affidavit in support, Appellants had made it clear that vide exhibit D1, all proceeds for the sale of forms and houses at the rate of N50 million naira each for 11 persons was domiciled with the bank, and thereby a total of N550 million lodged in the 1st Respondent’s bank. He argued that where the claim of the 1st Respondent for the sums of N288 million is deducted therefrom, it will be seen that a surplus would accrue to the Appellants. Alluding to paragraphs 27, 39, 40 and 41, counsel submits that Appellants indicated the wish to counterclaim and thereby faulted the holding of the lower Court that Appellants did not attack the affidavit of the 1st Respondent. He submitted that the Court failed to consider exhibits D4 and exhibit L, and further relying on the decision of Gorkeens Ltd & Anor vs. Zenith Bank (2017) LPELR – 43170 (CA) per Bdliya, JCA, to the effect that where a defendant in his affidavit shows that he has a defense on the merit, or that a serious conflict is shown or raises a triable issue, the defendant ought not be shut out from contesting the suit.
On whether the affidavit in support of the notice of intention to defend filed by the Appellants raised or casted any doubt on the claims of the claimant before the lower Court, learned counsel referred to exhibits D1, D2, D3 and D4 contending that the lower Court failed to appraise exhibit D4, thus occasioning a miscarriage of justice.
On conflicts in the affidavit of the parties and the duty of the Court thereto, it was submitted that the affidavit of the Appellants are manifestly in conflict with that of the 1st Respondent. Learned counsel alluded to instances created by the affidavits filed and argued that the contents thereof contradicted each other and relying on Mary & Ors vs. Adekoya (2017) LPELR – 43157 (CA) argued that a transfer to the general cause list was inevitable considering the deposition from paragraphs 11 – 41 of the affidavit in support of the intention to defend. In conclusion; learned counsel submits that reliefs a, b and c is subject to proof, and not having been proved, it cannot be granted.
Responding, the learned counsel for the Respondents relying on Eco Intl. Bank Ltd vs. NULGE Jalingo LGC & Anor (2014) LPELR-24171 (CA). affirmed the legal principle to the effect that where a defendant wants to defend an action under the undefended list, he must disclose that he has a verifiable defense; otherwise judgment would be entered against him. He narrated how the present suit came about stating that the Appellants approached the bank for a loan which was granted and assessed.
He urged the Court to hold that the lower Court was right in concluding that Appellant had no defense to the action, and further submitted that exhibits D – D4 are irrelevant to the case, and that exhibit L relied upon by the Appellant showed that sums were deposited and equally withdrawn by the Appellant. He argued that all the assertions made by the Appellant were not proved.
The Appellants’ reply on points of law to my humble view is a further argument or effort at re-arguing the appeal. That offends the accepted legal principle of what a reply brief is expected to contain and in the circumstance of no moment.
The trite position of the law is that an action brought pursuant to Order 21 (3) of the rules governing the lower Court, placed a duty on the defendant to mandatorily file a statement of his intention to defend, stating circumstances showing a viable defense. This is because a plaintiff who claims under the undefended list procedure entitles the claimant to judgment where no notice to defend is supported by an affidavit showing that he has a defense to the action. This state of the law has been succinctly placed as follows by the apex Court thus:
“I will only reiterate the point that he made regarding the special nature of an undefended list action, wherein it is presumed that the defendant has no defense to the plaintiff’s suit. If the defendant intends to defend the suit, he must file a notice in writing together with an affidavit disclosing a defense on the merit and the affidavit should contain enough facts and particulars to satisfy the Court to remove the case from the undefended list to the general cause list. Where the affidavit discloses no defense, then the case would not go on the general cause list. See, Kwara State Government & Ors vs. Guthrie Nig. Ltd (2022) LPELR – 57678 (SC), per Augie, JSC.
Turning to the case at hand, and for resolution is whether the lower Court was right to have refused transferring the case to the general cause list. In other words, whether the Appellant as defendant before the lower Court, deposed to facts which in the estimation of the lower Court were enough to weigh in allowing the defendant defend the case. It is clear from the judgment of the lower Court that the Court considered the entire affidavit evidence in support of the notice of intention to defend as rather vague, evasive and not amounting to a defense on the merit, and thereby refused to transfer the suit to the general cause list.
I have in the circumstance meticulously studied the affidavit in support of the notice of intention to defend, bearing in mind the claim of the claimant. As stated earlier, there appears to be no contention on the fact that Appellants applied for and assessed a loan totaling N250 Million Naira, and even though the Appellant at the initial stage denied being granted the loan in question, later agreed to circumstances showing that the loan agreement was perfected, and the loan sum assessed. The lower Court from pages 164 – 167 of the record, perfectly appraised the facts germane to the case before him and found materially, that while the loan agreement between the parties was executed and the loan sum assessed under the terms expressed in the contract agreement, Appellants as at the 21st day of August 2013 failed to discharge their obligation standing at N288,285,339.22k thus sparking the litigation.
The learned counsel for the Appellants made reference to portions of the affidavit in support of the notice of intention to defend, opining that the paragraphs raise the need for further investigation. He argued that by exhibit D1, all proceeds for the sale of forms and houses was domiciled with the 1st Respondent’s bank, and to that end, a total of N552.5 Million Naira was realized therefrom. He argued that where the sums of N288.285,339.22 is subtracted therefrom, the sums of N264,214,601 would still be remaining. The argument on the point to my mind stands in conflict with Appellants’ earlier deposition to the effect that the loan sum was not assessed by them. Further to that, Appellants argued that the lower Court failed to avail him the opportunity of proving his counterclaim. The question to my mind begging for answer is, whether the lower Court was right in arriving at the conclusion that the Appellants failed to place before the Court any defense worthy of consideration by way of further investigation, thereby transferring the case to the general cause list. It is not in doubt that an account was opened in the 1st Respondent’s bank enabling subscribers to deposit funds meant for buying the houses, though amounting to the sums of N554 million, which was similarly withdrawn by the Appellants. The question posed by the learned counsel for the Appellants as to what the 1st Respondent did with the sums collected, and that he had in that regard counterclaimed for the balance due to the Appellants from the sums collected in view of the uncontroverted documentary evidence proffered by exhibit L, on the mere assertion that the exhibit was full of mistakes without more cannot avail the appellant.
I have examined exhibit D2, D3 and D4 and do agree with the lower Court that for reasons stated by the Court below, the listed exhibits have no bearing to the instant action.
It does appear, and I am convinced that the documentary evidence exhibited by the Respondents in support of the claim under the undefended list, fully supports the findings of the lower Court with respect to the agreement to enter into the loan transaction and that an account was specifically created for the Appellants in tune with exhibit D. A careful examination of exhibit L goes further to show that whereas the stated sums were indeed collected from subscribers, such sums were also utilized by the Appellants, and thereby failed to liquidate the loan granted to them.
The law is certain in that the undefended list procedure is a special form of procedure designed to allow for quick dispensation of justice and to avoid unnecessarily clogging the legal system with proceedings which could otherwise have been easily and quickly disposed of. That being the case, the procedure should not be allowed to be frustrated or thwarted by fanciful or general defenses directed at frustrating the plaintiff of the judgment he richly deserves. Accordingly, a case should not be transferred to the general cause list merely on the whims and caprices of the defendant. See Uwaechina vs. Okeke (2015) 14 NWLR (pt. 1478) 108.
Curiously, the Appellants by paragraph 9 of the affidavit in support, admitted applying for a loan from the 1st Respondent, and referred to exhibit D1 in that regard. That 1st Respondent’s staff frustrated the grant of the loan by insisting on kickbacks, and that exhibit L, the statement of account is replete with illegal bank charges.
Pages 12 – 16 of the record bearing exhibit C, shows the letter of domiciliation duly executed between the Appellant and the 1st Respondent. Exhibit E, a letter of the 22nd day of December, 2009 is the acceptance letter executed by the Appellants, duly guaranteed by exhibit F, a certificate of occupancy and a power of attorney over the said property in favor of the 1st Respondent. Exhibit H, I and J are further guarantees made in favor of the 1st Respondent with regards to the loan agreement.
By exhibit N, Appellants sought for the extension of the outstanding payment of the loan granted to them in the following manner:
…
We humbly write to request for an extension of payment of outstanding loan granted to Hajis Properties Limited to the tune of N250 Million (Two hundred and fifty million naira) only provided for the construction of Dolman Estate Gaduwa District Abuja.
ii. We regret any inconveniences this request may course (sic) you and assure you of our desire to conclude this project within the shortest possible time frame. However, we request that the period of payment of the outstanding of the loan be extended to a minimum of 90 days but not exceeding 180 days.
By exhibit Q, Appellants yet again on the 7th of August, 2012 did write as follows:
…
I write to express HPL’s regrets for her inability to exit the N250m facility we took from your bank for the construction of above estate and to also further suggest ways the loan can be exited to our mutual benefit….
Did the Appellant pay the debt owed? The apex Court in the case of Okoli vs. Morecab Finance Nig. Ltd (2007) LPELR – 2463 (SC) per Musdapher held that:
“In an action placed in the undefended list where the plaintiffs claim repayment of loan, the only defense open to the defendant are only two, one that the defendant had refunded the entire loan by the production of receipts, bank tellers or any document showing that the debt was totally repaid or secondly that he never borrowed the money in the 1st place, he never applied for the loan or debt, he never obtained any money and that any purported application of the loan or receipt for the loan issued by him is a forgery”.
It is also an established legal principle that in an action filed on the undefended list, and the defendant intends to defend, what the Court considers is whether the defendant had disclosed a defense on the merit to warrant the suit transferred to the general cause list. This he does by showing a triable issue, which term is amply defined by the cases of Gorkeens Ltd and Anor vs. Zenith Bank (supra), Muobike vs. Nwigwe (supra), all graciously submitted by the Appellants. To that end, I have perused the entirety of the Appellants’ affidavit in support as well as the documents exhibited, and I am of the opinion that the lower Court’s holding to the effect that Appellants’ affidavit in support of the notice of intention to defend failed to disclose any defense on the merit warranting the transfer of the suit to the general cause list is sound and supportable. I fail to see any iota of merit in the instant appeal, and my duty in the circumstance is to dismiss same which I now do.
I award costs of N200,000.00 in favor of the 1st Respondent.
APPEAL DISMISSED.
PETER OLABISI IGE, J.C.A.: I have read before now, the draft of the leading judgment just delivered by my learned brother, BARKA, JCA.
I agree with his reasoning and conclusion that the appeal lacks merit and it is also dismissed by me.
The judgment of the lower Court Coram: M. M. KOLO., J. in Suit No. FCT/HC/1075/2014 delivered on the 8th day of December, 2014, is hereby affirmed.
I abide by the consequential order contained in the leading judgment of my learned brother, BARKA, JCA.
DANLAMI ZAMA SENCHI, J.C.A.: I have had the privilege of reading in draft before now, the lead judgment of my learned brother, HAMMA AKAWU BARKA, JCA just delivered and I agree with the finding and conclusion reached therein that this appeal lacks merit and it is dismissed by me as well.
The judgment of the High Court of the Federal Capital Territory, Abuja in suit No. FCT/HC/CV/1075/2014 delivered on 8th day of December, 2014 by M.M. KOLO, J is hereby affirmed.
I abide by the order as to costs in the lead judgment and I adopt same as mine.
Appearances:
K.C. Muoemeka For Appellant(s)
Austine Dimonye – for 1st Respondent. For Respondent(s)
