Keystone Bank Limited -VS- Mrs. Nwokocha Victoria

IN THE NATIONAL INDUSTRIAL COURT OF NIGERIA

IN THE LAGOS JUDICIAL DIVISION

HOLDEN AT LAGOS

BEFORE HIS LORDSHIP, HON. JUSTICE IKECHI GERALD NWENEKA

Date: 16th December 2019 SUIT NO. NICN/LA/347/2016

BETWEEN

KEYSTONE BANK LTD. CLAIMANT

AND

MRS. NWOKOCHA VICTORIA DEFENDANT

JUDGMENT

The Claimant commenced this suit by complaint and accompanying processes dated 24th May 2016 and by its amended statement of facts dated 20th November 2018 but filed on 20th February 2019 claimed against the Defendant as follows:

The sum of N2, 664,493.73 [two million, six hundred and sixty four thousand, four hundred and ninety three naira, seventy three kobo] only being the total sum due and payable to the Claimant by the Defendant as at 31st March 2016 as a result of the various loan facilities which the Claimant granted to the Defendant when the Defendant was in the employment of the Claimant but which the Defendant have [sic] refused, failed and/or neglected to pay back for the said various loan facilities till date despite having utilized same.

Interest on the amount claimed in [1] above i.e. N2, 664,493.73 at the rate of 19% per annum from 1st April 2016 until judgment and thereafter at the same rate until final liquidation of the entire debt.

Cost of prosecuting this action to be borne by the Defendant.

The originating processes were served on the Defendant in accordance with the Rules of this Court on 24th May 2016. The Defendant did not file any statement of defence and did not take part in the trial in spite of service of hearing notices on her. Trial commenced on 6th November 2019. The Claimant’s witness, Mr. Habib Shittu of the Asset Remedial Management Department, adopted his statement on oath dated 25th March 2019 as his evidence in the suit and tendered 7 documents, which were marked as exhibits 1 to 7. On application by learned counsel for the Claimant, Chief Okonkwo, the Defendant was foreclosed from cross-examining the Claimant’s witness pursuant to Order 38 rule 2[1] of National Industrial Court of Nigeria [Civil Procedure] Rules, 2017 and the case was adjourned to 21st November 2019 for defence or adoption of final written addresses. The Defendant was absent on 21st November 2019 and, on application by learned counsel for the Claimant, was foreclosed from presenting her defence. The Claimant was thereafter granted leave to adopt its final written address dated 19th November 2019. The matter was consequently set down for judgment.

In his final written address, learned counsel for the Claimant, Chief Okonkwo, formulated one issue for determination to wit:

“Whether the Claimant has proved its case to be entitled to the reliefs sought before this Honourable Court?”

Chief Okonkwo returned an affirmative answer and explained that the sole issue for determination would be addressed under 4 sub-heads, viz:

Did the Claimant grant a loan facility to the Defendant?

Has the loan or debt been paid back?

What is the total outstanding indebtedness of the Defendant to the Claimant?

Are Banks not entitled to charge interest on loans they give out to their customers?

On the first sub-issue learned counsel referred to pages 1 and 4 of exhibit 1 and paragraphs 8 and 9 of the Claimant’s witness’ statement on oath and explained that the Defendant was granted facilities in the sum of N490, 202.50 and N470, 000 on 4th March 2008 and 11th August 2008 respectively. He submitted that this evidence was not challenged in any way by the Defendant and the law is trite that where evidence is unchallenged the Court ought to accept it in proof of the issue in contest. He referred to the case of Folorunsho v. Shaloub [1994] 3 NWLR [pt.333] 413 and urged the Court to so hold.

He answered the second sub-issue in the negative and urged the Court to so hold. On the third sub-issue, he submitted that from the last page of exhibit 1 the Defendant’s outstanding indebtedness was N2, 664, 493.73 only as at 31st March 2016 which evidence has not been challenged or denied in any way and urged the Court, on the authority of Nacenn Nigeria Limited v. Bewac Automative Producers Limited [2011] All FWLR [pt.585] 280 at 292, to so hold. On whether Banks are entitled to charge interest on loans they grant to their customers, he submitted that the Claimant is a commercial bank and the law allows commercial banks to charge interest on loans to customers or staff. He referred to a plethora of cases including the case of Union Bank of Nigeria Ltd. v. Mr. James Olusola Ayoola [1998] 11 NWLR [pt.573] 338 at 344 and submitted that banks are allowed to charge interest even where there is no express agreement to that effect and urged the Court to so hold. Learned counsel argued that the Defendant did not controvert the evidence of Claimant’s witness as contained in exhibit 1 which contains interest and charges; and that the law is well settled on the effect of unchallenged statement of account bearing interest. He referred to the case of Paul Aforka v. African Continental Bank Nig. Ltd. [1994] 3 NWLR [pt.331] 217 at 225 and urged the Court to enter judgment in favour of the Claimant.

I will adopt the issue for determination formulated by learned counsel for the Claimant which is “whether the Claimant has proved its case to be entitled to the reliefs sought before this Honourable Court?” It is settled law that he who asserts must prove. See section 131 of the Evidence Act, 2011 and the case of Nduul v. Wayo & Ors. [2018] 7 SC [pt.111] 164 at 212. Thus, the onus is on the Claimant to establish through its pleading and evidence its entitlement to judgment on the claims.

While it is true that the failure of the Defendant to file a defence and adduce evidence makes the Claimant’s evidence unchallenged and liable to be accepted and acted upon by the Court; however, this does not automatically entitle the Claimant to judgment. See the case of Elewa & Ors. v. Guffanti Nigeria Plc [2017] 2 NWLR [pt.1549] 233 at 248 para. C. The evidence presented by the Claimant must be credible and on its own justify the grant of the reliefs sought. See Sankey v. Onayifeke [2013] LPELR-21997[CA] at page 48 where Yakubu, J.C.A., held:

“An unchallenged or uncontradicted piece of evidence given by a witness, must still be evaluated for its cogency and/or credibility by the trial judge before he attaches any weight to it and accept it to prove a claim. Thus, the court does not just accept any evidence hook, line and sinker merely because it was not challenged nor contradicted by the other side – opposing party.”

On what a credible evidence is, the Court of Appeal in In-Time Connection Limited v. Mrs. Janet Ichie [2009] LPELR-8772[CA] at page 16, posited that credible evidence means evidence worthy of belief and for evidence to be credible it should be natural, reasonable and probable in view of the entire circumstance of the case. Thus, where the evidence presented by the Claimant is not credible it is bound to fail notwithstanding the absence of defence. See Erinfolami v. Oso [2011] LPELR-15357[CA] at page 18.

This case is for recovery of ex-staff loans. In proof thereof, the Claimant’s witness testified in his evidence in chief that the Defendant was an employee of Platinum Habib Bank Plc which assets and liabilities were acquired by the Claimant on 5th August 2011 which transaction is covered by Nigeria Deposit Insurance Corporation letter of that date. The letter was admitted in evidence and marked as exhibit 7. He stated that the Defendant was a former staff of the Claimant having been employed on 4th June 2007 and has since left the services of the Claimant. The letter of employment and internal memo dated 10th December 2008 were received in evidence and marked as exhibits 5 and 6 respectively. He also stated that while in the employment of the Claimant, the Defendant maintained a current account no. 001103001316 which was subsequently changed under the CBN NUBAN policy to 1000182761; and obtained two facilities, one on 4th March 2008 and the other on 11th August 2008 in the sums of N490, 202.50 and N470, 000 respectively. He averred that the Defendant fully enjoyed these facilities but has refused, failed and/or neglected to fully liquidate it in spite of several demands by the Claimant and its Solicitors. The Defendant’s statement of account, certificate pursuant to section 84[1] of the Evidence Act, 2011 and demand letters by the Claimant and its Solicitors were admitted in evidence and marked exhibits 1, 2, 3 and 4 respectively. The witness further stated that when the Defendant’s account was classified, he was found to be indebted to the Claimant in the sum of N2, 664, 493.73 as at 31st March 2016 wherefore the Claimant claims as per its amended statement of facts dated 20th February 2019.

In proof of the loans, the Claimant relied on entries at pages 1 and 4 of exhibit 1 which showed a credit of the sums of N490, 202.50 and N470, 000 on 4th March 2008 and 11th August 2008 respectively into the Defendant’s account as ‘loan advance’. I have carefully perused exhibit 1 and I find as a fact that the sums of N490, 202.50 and N470, 000 were credited to the Defendant’s account on 4th March 2008 and 11th August 2008 respectively as loans. I also find as a fact that various debit entries were posted to the account in repayment of the principal and interest up to 23rd January 2009. There is nothing in exhibit 1 to show that the Defendant made any further payments in liquidation of the facilities thereafter and the closing debit balance on 31st August 2015 was N2, 176,257.04. A scrutiny of exhibit 1 shows that the account was classified on 31st August 2015. This was aptly captured in the Claimant’s Solicitors’ demand letter of 11th December 2015, exhibit 4. Paragraphs 2 and 4 of exhibit 4 states, inter alia:

“Our client informed us that as a former staff you applied and was subsequently granted several staff loans. Consequently your indebtedness to our client – Keystone Bank Ltd in respect to [sic] the various outstanding loan facilities stood at N2, 176,257.04 debit as at 31st August 2015.… The account has been classified as non-performing….”

By a subsequent demand made by the Claimant on 14th January 2016, exhibit 3, the Claimant demanded for payment of the sum of N2, 176,257.04. Paragraph 3 of exhibit 3 reads, inter alia:

“These accounts have since been classified as non-performing.”

To this extent the Claimant’s witness’ evidence in paragraph 12 of his statement on oath that:

“12. That when the Defendant[‘s] Account with the Claimant was classified, the Defendant was found to be indebted to the Claimant in the sum of N2, 664,493.73 as at 31st March 2016.”

is incorrect. The law is that where a creditor writes a demand letter to the debtor who fails to react, his silence is presumed to be admission of the content of the letter and no more. See In-Time Connection Limited v. Mrs. Janet Ichie [supra] at page 20. There is nothing before me to show that the Defendant was informed that her debit balance had increased from N2, 176,257.04 to N2, 664,493.73 or that exhibit 1 was forwarded to the Defendant prior to institution of this action. If a cause of action only arises after a demand for payment is made and the debtor refuses to pay, see Standard Manufacturing Co. Limited & Anor. v. Sterling Bank Plc [2015] LPELR-24741[CA] at page 30, then, it is my respectful view and I so hold that the debtor’s liability crystallises upon the demand and for the sum so demanded. For this reason, I agree with the submissions of Chief Okonkwo on sub-issues 1 and 2 and hold that the evidence of the Claimant’s witness on the grant of the loan and that it has not been fully repaid is credible and has not been challenged in any way. This Court is therefore bound to accept it as correct. See the case of Godfrey Ifediora & Ors. v. Eugene Okafor & Ors. [2019] 16 NWLR [pt. 1698] 322 at 336.

However, with respect to sub-issue 3, I hold the view that the amount proved as owed by the Defendant is the sum of N2, 176,257.04 which was communicated to her in exhibits 3 and 4. It should be noted that while the Court is bound to accept and act on evidence which was neither challenged nor cross-examined by the other party, such evidence must ordinarily be credible. I have found earlier in this judgment that the facilities were classified on 31st August 2015 and the two letters written to the Defendant made specific demand for repayment of the sum of N2, 176,257.04.

This leads me to a consideration of the Claimant’s reliefs. Relief one is for the sum of N2, 664,493.73 [two million, six hundred and sixty four thousand, four hundred and ninety three naira, seventy three kobo] only being the total sum due and payable to the Claimant by the Defendant as at 31st March 2016 as a result of the various loan facilities which the Claimant granted to the Defendant when the Defendant was in the employment of the Claimant but which the Defendant have [sic] refused, failed and/or neglected to pay back for the said various loan facilities till date despite having utilized same. I have found earlier in this judgment that the amount proved as owed by the Defendant is N2, 176,257.04 notwithstanding that the evidence of the Claimant’s witness is unchallenged. In the words of Okoro, J.S.C. in Godfrey Ifediora & Ors. v. Eugene Okafor & Ors. [supra], the unchallenged evidence must be believed by the Court before it can act upon it. Speaking in the same vein, Yakubu, J.C.A. in Sankey v. Onayifeke [supra] at page 48 posited that:

See also Iyere v. Bendel Feed and Flour Mill Ltd. [2008] LPELR-1578[SC] at page 45. I am satisfied from the documentary evidence before this Court that the sum of N2, 176,257.04 is due and owing by the Defendant to the Claimant. It is the duty of every court of law to render to everyone according to his proven claim. It cannot give to a party a relief which it has not proved. See In-Time Connection Limited v. Mrs. Janet Ichie [supra] at page 24. Accordingly, relief one succeeds in part.

Relief two is for interest on the sum of N2, 664,493.73 at the rate of 19% per annum from 1st April 2016 until judgment and thereafter at the same rate until final liquidation of the entire debt. I have carefully perused exhibit 1, and although various sums were posted into the account as interest repayment, the applicable rate of interest on these facilities is not manifest on exhibit 1 and there is no evidence on the agreed rate of interest. While it is true that the Claimant is a commercial bank and as such entitled to charge interest on facilities granted to its customers, the claim before this Court is not strictly one of banker and customer; but a claim for recovery of ex-staff loans. The law on award of pre-judgment interest is well settled and for emphasis interest may be awarded in two distinct circumstances, namely: as of right and where there is a power conferred by statute to do so in the exercise of the Court’s discretion. Interest may be claimed as of right where it is contemplated by the agreement between the parties, under a mercantile custom, or under a principle of equity such as breach of a fiduciary relationship. Where interest is claimed as a matter of right, the proper practice is to claim entitlement to it in the originating process and plead facts which show such entitlement. See Interdrill Nigeria Ltd. & Anor. v. United Bank for Africa Plc [2017] 13 NWLR [pt.1581] 52 at 72-73. Although interest was claimed in the originating processes, there are no facts in support of the claim for interest in the amended statement of facts. There is equally no evidence on agreed rate of interest on the facilities. Consequently, the submission of Chief Okonkwo in paragraphs 5.1.4.1 to 5.1.4.3 of the Claimant’s final written address is not supported by evidence and goes to no issue. It is trite law that address of counsel is supposed to deal only with the evidence before the Court. See Onwuchekwa & Anor. v. Onwuegbu & Ors. [2013] LPELR-20653[CA] at page 30. The custom or practice which entitles banks to charge interest on ex-staff loans was neither pleaded nor proved and it is not the practice of the Court to speculate on the applicable rate of interest. In the words of Owoade, J.C.A., in Iwayemi & Anor. v. Akinbo [2016] LPELR-40136[CA] at pages 22-23

“… law is not a game of wizardry. It is not and has never been the function of a Court of law by its own ingenuity or exercise to imagine, speculate on or to supply evidence to work out the mathematics of arriving at an answer in a case which only evidence tested under cross examination can supply.”

Eko, J.C.A. [as he then was] in In-Time Connection Limited v. Mrs. Janet Ichie [supra] at page 24 posited that the Defendant’s obligation to pay interest on a debt must be strictly proved by evidence before the Claimant can be entitled to it. This was not done in this case. In the circumstance, I find and hold that the Claimant has not proved the claim for pre-judgment interest at 19% per annum. However, this Court is empowered by Order 47 rule 7, National Industrial Court of Nigeria [Civil Procedure] Rules, 2017, to award post-judgment interest at a rate not less than 10% per annum.

Relief 3 is a claim for cost of the action. Generally, cost follows events and a successful party is entitled to his cost. By Order 55 rule 1 of the Rules of this Court, award of costs is subject to the discretion of the Court, which discretion, in all circumstances, must be exercised judicially and judiciously. Costs are not meant to be a bonus to the successful party or serve as punishment against the losing party. It cannot also cure all the financial losses sustained in litigation and the winning party has a duty to mitigate his losses. The main aim of cost is to indemnify the successful party for his out of pocket expenses and be compensated for the true and fair expenses of the litigation taking the facts of each case into consideration. See Citibank Nigeria Limited v. Mr. Martins Ikediashi [2014] LPELR-22447[CA] at page 43.

Some of the factors to consider in awarding cost are filing fees paid, duration of the case, number of witnesses called by the party in victory, the vexatious nature of the action, cost of legal representation, monetary value at the time of incurring the expenses et cetera. See Master Holding [Nig.] Limited & Anor. v. Emeka Okefiena [2010] LPELR-8637[CA] at pages 34-35. From the Court’s record, the sum of N9, 700 was spent as filing fees, learned counsel for the Claimant appeared before me about 5 times. In the circumstance, cost of N50, 000 is awarded in favour of the Claimant against the Defendant.

On the whole, this case succeeds in part. Judgment is entered in favour of the Claimant against the Defendant as follows:

The sum of N2, 176,257.04 being the Defendant’s indebtedness to the Claimant on the facilities granted to her on 4th March 2008 and 11th August 2008 respectively. This sum shall bear interest at the rate of 10% per annum from the date of this judgment until it is fully liquidated.