NITEL TRUSTEES LIMITED & ANOR v. SYNDICATED INVESTMENT HOLDINGS LIMITED
(2014)LCN/7224(CA)
In The Court of Appeal of Nigeria
On Friday, the 23rd day of May, 2014
CA/L/349A/2013
RATIO
WHETHER A CLAIM ON INTEREST IS TO BE ENDORSED IN A WRIT OF SUMMONS AND PLEADED IN A STATEMENT OF CLAIM
On grounds of equity, the appellant is liable to pay interest for that period. But the law is that where interest is being claimed, the practice is to endorse the claim on the writ of summons and plead facts which support such entitlement in the statement of claim. Even if it is not endorsed on the writ of summons, but the facts are pleaded in the statement of claim and requisite fees paid, the court may, if proved on the preponderance of evidence, grant the award of interest Henkel Chem Ltd v. A.G. Ferrero & Co. [2003] 4 NWLR (Pt.810) 306; Petgas Res. Ltd v. Mbanefo [2007] 6 NWLR (Pt.1031) 545 @ 558-559 H – B. In the case of Jambo v Governor of Rivers State (2007) 17 NWLR (Pt.1062) 198 @ 217 D-E it was held that adjudication on a plaintiff’s right to pre-judgment interest is like any other issue in the case, based on the evidence placed before the court. It is only when evidence is called at the trial that the interest claimed, the proper rate thereof and the accrual date will be established. per CHINWE EUGENIA IYIZOBA, J.C.A.
JUSTICES
JOSEPH SHAGBAOR IKYEGH Justice of The Court of Appeal of Nigeria
CHINWE EUGENIA IYIZOBA Justice of The Court of Appeal of Nigeria
SAMUEL CHUKWUDUMEBI OSEJI Justice of The Court of Appeal of Nigeria
Between
1. NITEL TRUSTEES LTD (IN LIQUIDATION)
2. OTUNBA OLUSOLA ADEKANOLA
(LIQUIDATOR OF NITEL TRUSTEES LTD) Appellant(s)
AND
SYNDICATED INVESTMENT HOLDINGS LIMITED Respondent(s)
CHINWE EUGENIA IYIZOBA, J.C.A. (Delivering The Leading Judgment): This is a sister appeal to CA/L/349/2007 just now delivered. The Appellants who were the defendants in the lower court and in whose favour judgment was delivered aside from the interest awarded the Respondent has appealed against that part of the decision of Dada J awarding the Respondent 21% interest on the 10% deposit held by the Appellants for over 10 months.
The 2nd Appellant is the Court appointed liquidator of the 1st Appellant and on behalf of the 1st Appellant placed an advert in This Day Newspaper of Wednesday, May 2nd, 2007 for the sale of the 1st Appellant’s non-core properties all over Nigeria including the subject matter of this suit No 44 Gerald Road, Ikoyi, Lagos (hereinafter referred to as the property).
The Respondent herein bided for the property and paid the sum of N36.1 Million being 10% of the total bid sum of N361,000,000.00 (Three Hundred and Sixty One Million Naira). A letter of offer dated 20th June, 2007 was issued to it by the Defendants. The Respondent accepted the offer. The Appellant claiming that the Respondent failed to fulfil the conditions stipulated in the advertisement and letter of offer dated 20th June, 2007 sold the property to another company even before the time allowed the Respondent to pay the balance had expired.
The said 10% deposit was refunded to the Respondent vide a Sterling Bank Cheque dated 19th May, 2008 and same was received by the Respondent’s representative.
The Lower Court in its judgment held that there was no binding contract between the parties as the Respondent failed to comply with the terms of offer and failed to pay the balance of the purchase price. It awarded 21% per annum pre judgment interest from 6 July, 2007 to 19 May, 2008 on the N36.1 Million and 10% post judgment interest from 22 November, 2012 until the judgment debt is paid.
The Respondent dissatisfied with the judgment filed a Notice of Appeal dated 18 February, 2013 (Appeal No: CA/L/349/2013) against the decision of the lower court rejecting its claim for damages for breach of contract to sell and transfer the property to the Respondent. (Judgment already delivered in favour of the Respondent.) The Appellant also by a notice of appeal dated 18/2/13 filed this appeal on 19th of February, 2013 against the award of 21% pre judgment interest. Out of the two grounds of appeal in the notice, the appellant in their brief of argument formulated a sole issue for determination viz:
Whether the learned trial judge was right in awarding 21% interest to the respondent.
The Respondent’s counsel on 17/2/14 filed a notice of preliminary objection which was argued in his brief as issue 1 and he adopted the appellant’s sole issue as his issue 2.
PRELIMINARY OBJECTION:
The contention of learned senior counsel for the Respondent in the preliminary objection is that the Appellants’ appeal is incompetent and constitutes a flagrant abuse of the process of this court. He argued that instead of filing a cross appeal, the Appellants filed a second appeal against the lower court’s decision on 19th February, 2013, when as at that date the Respondent’s appeal (Appeal No: CA/L/349/2013) was already pending. He further submitted that it is settled law that where a Respondent to a pending appeal seeks an order setting aside a part of the decision of the lower court which does not favour him, he should do so by way of a cross appeal because it is on those findings that any decision in the appeal one way or another can correctly be made. Learned senior counsel cited the cases of Eliochim (Nig) Ltd v. Mbadiwe (1986) 1 NWLR (Pt.14) 47 at 72F; Smithkline Beecham Plc v Farmex Ltd (2010) 1 NWLR (Pt.1175) 285 at 304G.
It was further submitted that a cross-appeal presupposes that there is an error in the judgment given in favour of a Respondent which prevents him from fully enjoying the benefit of the victory and in order properly to challenge the aspect of the decision that he is unhappy with, the Respondent must file a cross-appeal: Obasanjo v Buhari [2003] 17 NWLR (Pt 850) 510 at 554 E-F.
The learned SAN argued that there can be no “second Appeal” by a party in whose favour a judgment was given in the lower court. Where the supposed cross-appellant (i.e. the Appellants in this appeal) fails to file a cross-appeal, he would be precluded from playing the role of an appellant in another appeal as the Appellants have done in this appeal or to raise any issue outside of the notice of appeal filed by the Respondent (as Appellant in Appeal No: CA/L/349/2013): Shodeinde v Lawal [2012] 9 NWLR (Pt.1304) 38 at 43F; Obasanjo v Buhari [supra] 554G.
It was submitted that the Appellants’ omission to file a cross-appeal against the part of the Judgment of 22 November, 2012 invariably makes the present appeal incompetent and an abuse of process. Learned senior counsel submitted that the term “abuse of court process” is one which is generally applied to a proceeding which is wanting in bona fide and arises whenever a party uses the court process mala fide: CBN v Ahmed (2001) 11 NWLR (Pt 724) 369 at 408A-B. Learned senior counsel argued that it is also a term generally applied to proceedings which are frivolous, vexatious or oppressive: He cited Christian Outreach Ministries Incorporated v Cobham [2006] 15 NWLR (Pt.1002) 283 at 304G-H, 305A-8. He further contended that the categories of situations and conditions that constitute abuse of process are not closed; that where abuse of process is found, the proper order is to dismiss the proceedings. He urged the court for these reasons to resolve Issue 1 in its favour.
Learned senior counsel for the Appellant in their reply brief responded to the preliminary objection or as the Respondent termed it, Respondent’s issue 1. He submitted that the underlying fact omitted by the Respondent in canvassing their preliminary objection is that the Respondent’s Notice of Appeal which was filed on the 18th of February, 2013 was only served on the Appellants on the 19th of February, 2013 immediately after the Appellants’ Notice of Appeal was served on her in the Respondent’s Solicitor’s office. Senior counsel submitted that the Appellants in the instant appeal were not aware and could not have been aware that the Respondent filed an appeal on the 18th of February, 2013 because the Respondent did not serve same on the Appellants on the 18th of February, 2013 but on the 19th of February, 2013 after the Appellants had served their own Notice of Appeal on the Respondent’s Counsel. He submitted that there is an affidavit of service before this court deposed to by Chukwuebuka W. Udeh one of the Counsel working in the Law firm of Appellants’ Solicitors to the effect that he served the Appellants’ Notice of Appeal dated 18th February, 2013 but filed on the 19th of February, 2013 on the Respondent’s Solicitors at their office; that it was after he served same on them that the Respondent’s Counsel served the Respondent’s Notice of Appeal in Appeal No: CA/L/349/2013 on him. Learned senior counsel relying on the case of Okoye V. C.P.M.B. Ltd (2008) 15 NWLR (Pt.1110) 335 at 352 submitted that an affidavit of service is prima facie proof of the matters stated therein. Learned counsel submitted that all the cases relied on by the Respondent are inapposite and urged us to discountenance the preliminary objection.
I am of the view, from the arguments of both counsel that this is just a case of a storm in a teacup. It is obvious that the appellant herein was unaware that the Respondent had already filed an appeal on 18/2/13. He was not served until 19/2/13. The appellant’s first Notice of Appeal as endorsed on the Notice was filed on 19/2/13 at 9.40am. From the affidavits of service, it is undisputed that the Appellant herein was served the Respondent’s Notice of Appeal on 19/2/13. There is no doubt that it would have been more convenient for the parties and the court and saved us all time if the Appellant knew ahead of time of the appeal by the Respondent and he had filed a cross-appeal instead of an appeal. But as was submitted by Appellants’ counsel, several appeals can be filed in one case. Sometimes for convenience they are consolidated or just heard together. In the case of Igwe v Kalu (2002) 7 SC (Part 11) 236, Ogwuegbu JSC delivering the judgment of the court observed:
“…A cross-appeal arises where two parties to a judgment are dissatisfied with it and each accordingly appeals. The appeal of each is called a cross-appeal in relation to that of the other. Each appeal is an independent and separate complaint by the parties even though both appeals are heard together…”
The above case is authority for the view that it is not unusual for several appeals to be filed in one case. It is a common occurrence. It is for the parties after the separate appeals have been filed to raise the issue before the court to decide how to proceed either by way of consolidation or as separate appeals heard together. It is just not a big deal.
The appellant is right that the cases referred to by the Respondent are inapposite. There is no abuse of court process involved. The preliminary objection lacks merit.
It is hereby dismissed.
MAIN ISSUE:
Whether the learned trial judge was right in awarding 21% interest to the respondent.
Learned senior counsel for the Appellants in his brief relying on Section 135 of the Evidence Act 2011 and the case of EDET v. CHAGOON (2008) 2 NWLR (PT 1070) CA 85 submitted that the Respondent failed to prove her claim for interest at the lower court and yet the learned trial Judge went ahead to grant same. Senior counsel submitted that from the Respondent’s Statement of Claim, and Witness Statement on Oath, there is nowhere she led credible evidence in proof of her claim for interest, it barely just stated there “interest”. Referring to the case of M. H. Nig. Ltd. v. Okefiena (2011) 6 NWLR (Pt.1244) C.A. 514, he submitted that a court cannot award a claimant what he did not claim or prove and that a party who claims interest on a sum of money has an obligation to support his claim. Balogun V. E.O.C (Nig) Ltd. (2007) 5 NWLR (Pt.1028) 584.
It was argued that the bidding and acceptance forms which were the only documents in the transaction between the parties never stipulated or fixed any form of interest whatsoever; and that it was established in C.B.N v. BECKITI (2011) 5 NWLR (Pt 1240) 203 that a claim of an interest rate has to be proved by cogent admissible evidence except where a concrete agreement reached by parties is owned up by them or where there is positive and unequivocal admission by a party. In the case, the claim for 21% interest was not proved by the Respondent and it was consequently set aside by the Court of Appeal. The Respondent herein also failed to prove the interest she claimed in her writ and should not have been awarded the interest. Senior counsel also referred to VEEPEE IND LTD v. COCOA IND. LTD (2008) 13 NWLR (pt.1105) and further submitted that no interest rate was pleaded by the Respondents; there was no evidence led in that regard to warrant the award. Citing the case of UBN Plc v. Ifeoluwa (Nig) Ent. Ltd (2007) 7 NWLR (Pt.1032), he urged us to determine the appeal in their favour.
Learned senior counsel for the Respondent on the issue submitted that the court awarded the Respondent pre judgment interest at the rate of 21% per annum from 6 July, 2007 to 19 May, 2008 on the sum of N36.1 Million, being the period the Appellants wrongfully deprived the Respondent the money. Learned senior counsel submitted that contrary to the contention of the Appellants that the 21% interest awarded by the lower court was not pleaded or proved by the Respondent, that the interest was adequately pleaded. Senior counsel further contended that even if the Respondent failed to claim interest in its writ or statement of claim at the lower court, it will not preclude it from being awarded interest after judgment has been entered. He submitted that the court has awarded interest, though not claimed in the writ, under the following circumstances:
a. Monetary judgment attracts appropriate interest even when none is claimed: Ibama v Shell Petroleum Development Co Nig. Ltd [1998] 3 NWLR (Pt.542) 493 at 500C.
b. In appropriate cases, an award of interest which was not claimed in the writ or statement of claim is in form of a consequential order which the court is entitled to make. Nigerian General Superintendence Co Ltd v Nigerian Ports Authority [1990] 1 NWLR (Pt 129) 741 at 748 B-F; A G Feffero & Co Ltd v Henkel Chemicals (Nig) Ltd [2011] 13 NWLR (Pt.1265) 592 at 606A-F where the court distinguished between cases pertaining to normal commercial transaction without reference to any particular agreement for interest and cases where parties had contractual-agreement in relation to payment of interest should there be a breach.
c. The court may in certain cases, wade its equitable jurisdiction to award interest as ancillary relief in respect of equitable remedies such as specific performance, rescission or taking of an account. Under this jurisdiction, interest may be ordered to be paid whether money has been obtained by fraud or withheld for no just reason. The court in such a situation has an inherent power to order the payment of interest at whatever rate is equitable in the circumstances and may direct that such interest be compounded at appropriate intervals: DPMS Ltd v Larmie (supra) at 156 B-C.
Learned senior counsel submitted that in commercial cases, the court will more often than not order that a party who has unlawfully kept the other party out of his money (as in this case) should compensate him for such deprivation: Adeyemi v Lan & Baker (Nig) Ltd (2000) 7 NWLR (Pt.663) 33 at 48; Master Holdings (Nig.) Ltd. v. Okefiena [2011] 6 NWLR (Pt.1244) 514 at 533C – D; Ekwunife v. Wayne (WA) Ltd [1989] 5 NWLR (Pt.122) 422 at 445 B – D. He argued that if the Respondent had invested the money in a commonly used investment vehicle, the Respondent would certainly have earned compound interest on that sum for the relevant duration. Counsel further submitted that the Respondent’s claim for pre-judgment interest arises from the self-evident nature of unjust enrichment received by the Appellants for having the use of the Respondent’s money for which restitution must be made. The Appellants’ unjust enrichment is measured by what they would have had to pay in the commercial market to borrow the sum of N36.1 Million for more than 10 months. Counsel cited Sempra Metals Ltd v Commissioners of Inland Revenue [2008] 1 AC 561 @ 117. Learned senior counsel submitted that the learned Judge’s 21% per annum interest award was calculated in substance to provide a commercially realistic restitution as if the payment had been made promptly, enabling further investment or other productive use as and when received. He urged us to resolve Issue 2 in its favour.
I have read the Appellant’s reply to the above submissions. The issue here basically is two dimensional. One, whether the Respondent is entitled to interest on the N36.1 Million held over by the appellant even after the property was sold to another company on the 19th of August, 2007; and secondly whether the learned trial Judge was right in awarding 21% interest when there was no pleading or evidence as to rate of interest or accrual period. I think the law is quite settled by a long line of authorities on these matters. On the first limb; that is whether the Respondent is entitled to interest, the general principle is that interest is not recoverable at common law on ordinary debt in the absence of express or implied contract or some mercantile usage or by provision of statute. In equity however, where there is a breach of contract in circumstances in which deposits ought to be returned, and the deposit is not returned timeously, and the debtor kept the creditor out of his money while enjoying the benefit of it, it is equitable that the money be returned with interest. See Kaduna State Transport Authority v. Ofodile (1999) 10 NWLR (Pt.622) 259; Afribank (Nig.) Plc v. A. I. Investment Ltd (2002) 7 NWLR (Pt.765) 40; Ekwunife v. Wayne (West Africa) Ltd (1989) 5 NWLR (Pt.122)422; Alfortrin Ltd. v. A.G. Federation (1996) 9 NWLR (Pt.475) 634; Enahoro v. IBWA Ltd (1971) 1 NCLR 180; Jos Steel Rolling Co Ltd v. Bernestieli (Nig) Ltd. (1995) 8 NWLR (Pt.412) 201.
In the instant appeal, by clause 4 of Exhibit C2, if the buyer opted out of the arrangement, the appellant undertook to refund the 10% bid price “as it is practicable”. I do not know exactly what the appellant meant by ‘as it is practicable’. Howe ever, the Appellant on the pre that the Respondent was in breach of the contract sold the property to another company on 19/8/07. If the appellant had promptly then returned the N36.1 Million to the Respondent, then it might be arguable whether or not they are liable to pay interest. But the money was not returned until 19/5/08, nine months later. On grounds of equity, the appellant is liable to pay interest for that period. But the law is that where interest is being claimed, the practice is to endorse the claim on the writ of summons and plead facts which support such entitlement in the statement of claim. Even if it is not endorsed on the writ of summons, but the facts are pleaded in the statement of claim and requisite fees paid, the court may, if proved on the preponderance of evidence, grant the award of interest Henkel Chem Ltd v. A.G. Ferrero & Co. [2003] 4 NWLR (Pt.810) 306; Petgas Res. Ltd v. Mbanefo [2007] 6 NWLR (Pt.1031) 545 @ 558-559 H – B. In the case of Jambo v Governor of Rivers State (2007) 17 NWLR (Pt.1062) 198 @ 217 D-E it was held that adjudication on a plaintiff’s right to pre-judgment interest is like any other issue in the case, based on the evidence placed before the court. It is only when evidence is called at the trial that the interest claimed, the proper rate thereof and the accrual date will be established.
These authorities and the many others cited by the Appellant have said it all. I have carefully examined the writ of summons and the statement of claim of the Respondent at pages 1-5 of the Record of appeal. In the writ of summons, the Respondent mentioned ‘interest’ as item 4. That was all. In the statement of claim in paragraph 15, the Respondent averred ‘the Plaintiff is entitled to and claims interest including compound interest’. That was all. The Respondent did not plead the rate of interest claimed or the accrual period. In the judgment at page 247 of the Record, the learned trial judge said:
“Furthermore there is proof before the court that the Defendants already by 19th September, 2007 sealed a fresh contract with Oystelcom. Therefore it became irresponsible for the Defendants to have failed to refund the Claimant’s N36.1 M immediately after 19th September, 2007 but rather kept it for another 8 months which is actionable for special damages in interest on the deposit. The claim for interest in the Claimant’s relief 4 hereby succeeds. Interest therefore on the sum of N36.1 M (Thirty Six Million, One Hundred Thousand Naira) is hereby granted at the rate of 21% p.a. from 6th July, 2007 to 19th May, 2008 and at 10% post judgment interest from today until the judgment debt is fully liquidated.”
The question then is how did the learned trial judge come by the interest rate of 21%? How did he come by the accrual period of 6th July, 2007 to 19th May, 2008? The Respondent did not plead or lead evidence on any of those issues. The cases cited by learned senior counsel for the Appellant are relevant here and I am in total agreement with the views expressed in the cases:
M.H. Nig. Ltd. V. Okefiena (2011) 6 NWLR (Pt 1244) 574 @ 529 F Per Aboki J.C.A.
“thus it is a trite law that a court cannot award to a claimant what he did not claim or prove, Party who claims interest on a sum of money has an obligation to support his claim”‘
Balogun V. E.O.C (Nig) Ltd. (2007) 5 NWLR (pt.1028) 584 @ 603 C per Okoro J.C.A:
“A party who claims interest on a sum of money has the duty to plead and proffer credible evidence in proof thereof”
Balogun V. E.O.C B (Nig) Limited (Supra):
“A court cannot award to a claimant what he did not claim and or prove”
VEEPEE IND LTD V. COCOA IND. LTD (2008) 13 NWLR (pt.1105) per Muhammed J.S.C:
“…The deponent did not aver anywhere in the affidavit that the prevailing bank rate was 35% per annum’ there was therefore no proof of the rate of interest before the trial court to support its award of 35%, In other words, the Interest awarded was not based on any evidence of the rate of interest claimable as at the time of the suit”
UBN. Plc. V. IFEOLUWA (NIG) ENT. LTD (2007) 7 NWLR (PT.1032) 83 – 84 H – C, F) per Agbo J.C.A.
“Where interest is claimed as of right in an action, it ought ordinary, like any other primary prayer be set out on the Writ of Summons.
Where however, it is not set out on the writ but pleaded in the statement of Claim, the plea would be competent statement as the Statement of Claim supercedes the Writ, The facts so pleaded must disclose the entitlement to the interest, the rate and the date of accrual, The Claimant shall thereafter lead evidence to establish the pleaded facts. Once these fact are proved, the court shall award the interest so claimed. In the instant case, although the respondent established its entitlement to interest and the accrual date, it was unable to establish the rate of interest, Therefore, the interest pleadings was not proved to entitle the Respondent to the interest”
With all due respect to the learned trial Judge, His Lordship erred in granting 21% interest to the Respondent and calculating by himself the accrual period when the Respondent neither pleaded nor led evidence of same. This appeal succeeds. It is hereby allowed. Having already set aside certain aspects of the judgment in appeal No.CA/L/349/07, I now also set aside the aspect of the judgment granting the Respondent interest of 21%. The implication is that the entire judgment is now set aside. Costs assessed at N50, 000.00 in favour of the Appellants.
JOSEPH SHAGBAOR IKYEGH, J.C.A.: I was privileged to read before now the well prepared judgment of my learned brother, Chinwe Eugenia Iyizoba, J.C.A., in which I concur in toto and adopt as my judgment in the appeal.
SAMUEL CHUKWUDUMEBI OSEJI, J.C.A.: I have had a preview of the lead judgment just delivered by my Learned brother, C. E. Iyizoba JCA. I am in complete agreement with the reasoning and conclusion contained therein.
For the same good reasons articulated in the lead judgment which I adopt as mine, the appeal succeeds and I accordingly allow same.
I also abide by the consequential orders made in the lead judgment including the order as to cost.
Appearances
Rowland Otaru SAN with C. W. Udeh Esq. and M. T. Abiola (Miss)For Appellant
AND
Fidelis Oditah SAN with Kelly AgbonzeFor Respondent
