OLATUNBOSUN SUNDAY TUNDE v. AJEWOLE MICROFINANCE BANK
(2019)LCN/13571(CA)
In The Court of Appeal of Nigeria
On Tuesday, the 25th day of June, 2019
CA/IB/73/2016
JUSTICES
NONYEREM OKORONKWO Justice of The Court of Appeal of Nigeria
ABUBAKAR MAHMUD TALBA Justice of The Court of Appeal of Nigeria
FOLASADE AYODEJI OJO Justice of The Court of Appeal of Nigeria
Between
OLATUNBOSUN SUNDAY TUNDE Appellant(s)
AND
AJEWOLE MICROFINANCE BANK Respondent(s)
RATIO
WHETHER OR NOT A COURT HAS JURISDICTION TO ENTERTAIN AN ACTION THAT IS STATUTE-BARRED
It is also the law that a Court has no jurisdiction to entertain an action that is statute barred by a Limitation Law. See EGBE VS. ADEFARASIN (1987) 1 NWLR (PT. 47) PAGE 1 and N.P.A. PLC. VS. LOTUS PLASTIC LTD. 2005 19 NWLR (PT. 959) PG. 158 AT 181 PARAGRAPHS D ? G. It is trite that the essence of a Limitation Law is to ensure that all claims are diligently and timeously prosecuted before the Court while the supporting evidence is still readily and freshly available.
In ATTORNEY GENERAL ADAMAWA STATE VS. ATTORNEY GENERAL OF THE FEDERATION (2014) 14 NWLR (PT. 1428) 515 AT 567 PARAGRAPHS D ? E, the Supreme Court held thus:
?The law is already settled that where a party?s action is caught by Statute of Limitation and become statute barred, the following consequences will result:
a. The party would lose his right of action;
b. The party would lose the right of enforcement;
c. The party would also irretrievably lose the right to judicial relief;
d. The party will have an empty cause of action which no Court will assist him to enforce.? PER OJO, J.C.A.
WHETHER OR NOT THE PERIOD OF LIMITATION BEGINS OR CEASES TO RUN WHEN PARTES ENGAGE IN NEGOTIATION
The general position of the law is that when in respect of cause of action, the period of limitation begins to run, it is not broken and it does not cease to run merely because the parties engaged in negotiation. See EBOIGBE VS. NNPC (1994) 5 NWLR (PT. 347) PAGE 649 and EKEOCHA VS. C. I. & P. S. B. (2007) ALL FWLR (PT. 392) PAGE 1976. This general position however admits an exception where there is acknowledgment of the debt. The right to recover by action is revived. In other words where there is admission of liability during negotiation and all that remains is fulfillment of the agreement, the limitation time begins to run from the date of acknowledgment of the debt. The cause of action is thus revived. See KOKOORIN VS. PATIGI LOCAL GOVERNMENT (2009) 15 NWLR (PT. 1164) PAGE 205 and N.S.I.T.F.M.B. VS. KLIFCO NIG. LTD. (2010) 13 NWLR (PT. 1211) PG. 307. PER OJO, J.C.A.
WHAT AMOUNTS TO ACKNOWLEDGMENT OF DEBT
What would then amount to an acknowledgement of debt for the purpose of revival of cause of action? The acknowledgment of the debt must be unconditional and unequivocal. The determination of what constitutes an acknowledgment is a question of fact. It would depend on the contents of such letter.
In N.S.I.T.F.M.B. VS. KLIFCO NIG. LTD. (2010) 13 NWLR (PT. 1211) PG. 307, the Supreme Court per CHUKWUMAH ENEH JSC held thus:
?By a long line of decided cases, acknowledgement of debt owed to a creditor has to be unconditional and unequivocal. The words used by the debtor to recognize the existence of the instant debt are ?that our computation of our indebtedness differs from yours… PER OJO, J.C.A.
FOLASADE AYODEJI OJO, J.C.A. (Delivering the Leading Judgment): This is an appeal against the Judgment of the Oyo State High Court in Suit No: HOG/11/2015 between AJEWOLE MICRO FINANCE BANK VS. OLATUNBOSUN SUNDAY TUNDE delivered on the 2nd day of December, 2015. The Appellant who was the Defendant at the lower Court is dissatisfied with the Judgment and has appealed to this Court. He filed two Notices of Appeal dated 22nd January, 2016 and 25th of January, 2016 respectively. See pages 84 ? 96 of the record. At the hearing of the appeal the Appellant relied on the Notice of Appeal filed on the 9th of February, 2016 contained at pages 89 ? 96 of the Record.
Briefly, the facts of the case are that the Respondent as Plaintiff instituted an action under the Summary Judgment Procedure of the Oyo State High Court vide a Writ of Summons, Statement of Claim and Motion on Notice for Summary Judgment, all filed on the 17th of August, 2015. Upon being served with these processes, the Appellant filed a Memorandum of Appearance on the 9th of November, 2015. The matter came up before the lower Court on the 10th November, 2015 but was
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adjourned to 2nd of December, 2015 for hearing of the Respondent?s Motion for Summary Judgment. On 2nd of December, 2015 when the matter came up again, the Applicant?s Counsel sought an adjournment which the trial Court refused. Judgment was thereafter delivered in favour of the Respondent under the Summary Judgment Procedure.
The reliefs sought by the Respondent at the lower Court as reflected in paragraphs 14(a) ? (d) of the Statement of Claim contained at pages 6 ? 7 of the record are as follows:
?14. The Claimant’s Claim is for:
a. The immediate payment of the outstanding liquidated sum of One Million, One Hundred and One Thousand, Nine Hundred and Fifty Eight Hundred and Ninety Five Kobo Only (N1,101,958.95k) being the outstanding debt due to the Claimant from the Defendant arising from the Loan Service advanced/ rendered to the Defendant by the Claimant and which remains unpaid and for the recovery of the said sum which the Defendant has since failed, refused and neglected to liquidate/pay despite repeated demands by the Claimant.
b. Interest at 3% (or any prevailing interest rate) on the said One
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Million, One Hundred and One Thousand, Nine Hundred and Fifty Eight Hundred, Ninety Five Kobo Only (N1,101,958.95k) till the judgment is delivered in the suit and 20% per annum from the date of judgment until the judgment debt is fully liquidated.
c. General damages in the sum of N500,000.00 (Five Hundred Thousand Naira) only against the Defendant for pains, agony, trauma and business stagnation inflicted on the Claimant on account of the whimsical, capricious and wicked act of the Defendant that are designed to permanently deny the Claimant of opportunity to promote its business.
d. Cost of instituting this Suit.?
The Grounds of Appeal shorn of the particulars are as follows:
Ground 1
The learned trial Court erred in law and misdirected itself when it held that:
?”Having carefully listened to the submission of the Claimant’s/Applicant’s Counsel …. And the opposing submission of Defendant Respondent’s Counsel which to me is not tenable in law and does not even hold water nor does it avail the Defendant/Respondent as no statement of Defence nor accompanying documents as stipulated in Order 4 (a-d) HCCPR 2010 has been
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complied with, hence the submission of the Defendant’s/Respondent?s Counsel is hereby discountenanced by me”.
GROUND 2
The learned trial Court erred in law and also misdirected itself when it held that:
“I hold that the Defendant/Respondent has been given fair hearing in this case but he failed to utilize it, thus he cannot complain of breach of fair hearing more so when one considers the conduct of the Defendant who has just for once been present in Court and he is absent today”.
GROUND 3
The learned trial Court erred in law by considering only the processes filed by the Respondent and failed to consider the Appellant’s defence which was before it.
GROUND 4
The learned trial Court erred in law and also misdirected itself when it held that:
?”Judgment is hereby entered in favour of the Claimant/Applicant as per his writ of summons dated 17th August, 2015 and the statement of claim dated 4th August, 2015 but filed on 17th August, 2015 to the tune of One Million, One Hundred and One Thousand, Nine Hundred and Fifty Eight Naira, Ninety Five Kobo (N1,101,958.95k) only being the outstanding debt due to the Claimant from
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the Defendant by the Claimant which remain unpaid.
Secondly, interest at the rate of 3% on the said One Million, One Hundred and One Thousand, Nine Hundred and Fifty Eight Naira, Ninety Five Kobo (N1, 101,958.95k) only till today i.e. 2nd December, 2015 when the judgment is delivered in this suit and 10% per annum from the date of judgment until the judgment debt is finally liquidated as per Order 35 Rule 4 HCCPR 2010. Having read the Claimant’s/Applicant’s writ of summon, statement of claim, the deposition of witnesses, exhibits attached especially the Defendant?s/Respondent?s application for loan facility dated 3rd March, 2008 & 28th January, 2008, letter of demand by the Claimant personally and the Claimant’s solicitors, the Defendants Solicitors reply and more especially the Defendant’s letter of undertaking to repay the loan dated 31st May, 2010 of which he has defaulted several times. I am fully persuaded and convinced from the foregoing to grant N200,000 (Two Hundred Thousand Naira) damages in favour of the Claimant but against the Defendant for the pains, agony, trauma business stagnation inflicted on the claimant.
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GROUND 5
The learned trial Court erred in law by considering the claims of the Respondent, when same is statute bared.
?
The reliefs sought by the Appellant in this appeal are as follows:
i. To allow the appeal and set aside the trial Court?s summary judgment delivered on 2nd December, 2015.
ii. To Order a re-trial of the matter on merit.
ALTERNATIVELY
iii. To dismiss the claims of the Respondent.
In line with the rules of this Court the Appellant?s Counsel filed an Appellant Brief of Argument settled by R. B. Gold Esq. on the 4th of April, 2016. A Respondent?s Brief of Argument was filed on behalf of the Respondent by Yakubu Dauda Esq. on the 3rd of May, 2016. The Appellant?s Reply Brief of Argument was deemed as properly filed and served on the 18th of September, 2018.
Learned Counsel to the Appellant in the Appellant?s Brief of Argument formulated the following issues for determination:
?1. Whether having regards to the extant provision of the Limitation Law of Oyo State, the trial Court acted competently in determining the suit before it when same is Statute Barred.
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2. Whether the learned trial judge was not in error in placing total reliance on Order 4(a) ? (d) of High Court Civil Procedure Rule of Oyo State as basis for discountenancing the defence of the Appellant and in arriving at his decision.
3. Considering the circumstance of the case before the trial judge, whether the Appellant?s right to fair hearing was not breached by the failure of the trial judge to consider the processes of the Appellant filed before the lower Court.
4. Whether the trial Judge was right to have awarded judgment sum of N1,101,958.95k, a pre-judgment interest of 3% of the judgment and general damages of N200,000 when the claims before the Court was not proved.?
Learned Counsel to the Respondent formulated the following issues for determination in the Respondent?s Brief of Argument:
?1. Whether considering the facts and peculiar nature of this case, coupled with the acknowledgement of indebtedness of the Appellant vide his letters of 31st of May, 2010 and tacit denial of his indebtedness vide his solicitors letter dated 11th September, 2014 the Respondent?s cause of action has not been revived especially
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going by the tenor of the Appellant?s solicitor?s letter of 11th September, 2014.
2. Whether the Appellant could be said to have been denied fair hearing considering the attitude of the Appellant, facts and circumstances of the proceedings of the trial Court of 2nd December, 2015.
3. Whether the trial Court was wrong in granting the reliefs of the Respondent as prayed for vide it?s application dated 4th August, 2015 but filed on the 17th of August, 2015 considering the peculiar nature of the said application and the facts that the Appellant did not have any opposition to the grant of same as at 2nd of December, 2015 when the said application was moved and granted by the trial Court.?
?Upon a consideration of the issues formulated by counsel, the arguments thereon and indeed the entire Record of Appeal, I am of the view that the following issues would suffice:
?1. Whether the Respondent?s suit at the lower Court was statute barred.
2. Whether the Appellant?s right to fair hearing was breached by the lower Court.
?3. Whether the trial judge was right to have awarded judgment sum of
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N1,101,958.95k, a pre judgment interest of 3% of the judgment and general damages of N200,000.00 in favour of the Respondent and against the Appellant.
ISSUE NO. 1
Relying on the provision of Section 18 of the Limitation Law of Oyo State, learned counsel to the Appellant submitted that no action founded on contract/recovery of debt in Oyo State shall be brought after the expiration of five years from the date of accrual of the cause of action. He submitted further that the contractual obligation of the Appellant with the Respondent Bank was devoid of an agreed date for repayment which prompted the Respondent to demand for repayment from the Appellant by its letter dated 8th September, 2009. He contended that this being so the cause of action in respect of the contractual agreement between her and the Appellant accrued on the 8th of September, 2009. He craved in aid of his submission the cases of CHIEF A. AFOLAYAN VS. OBA JOSHUA OGUNRINDE (1990) 1 NWLR (PT. 127) PAGE 369 and ODUA VS. FSB (2001) ALL FWLR (PT. 112) 487 AT 501. He went on to say that the instant action instituted at the lower Court on the 17th of August, 2015 was done outside the 5
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years stipulated under Section 18 of the Limitation Law of Oyo State and therefore statute barred. He concluded by submitting that where an action is statute barred, it affects the legal competence of the jurisdiction of the Court.
The Respondent?s Counsel conceded that where a cause of action arises in debt recovery in Oyo State, a suit arising therefrom must be filed within five years of the accrual of the cause of action. His contention however is that the Law of Limitation in respect of an action of recovery of debt admits of some exception which include fraud, mistake or acknowledgment of indebtedness by a debtor. He further contended that admission of indebtedness which requires fulfillment of payment while negotiation is ongoing is also an exception to the Statute of Limitation where recovery of debts is considered. He relied on the case of NWADIALO VS. SHELL DEVELOPMENT COMPANY LTD. (1990) 5 NWLR 322 AT 338 ? 339. He referred to a letter dated 31st of May, 2010 which is at page 20 of the record to submit that the Appellant admitted and acknowledged his indebtedness to the Respondent and went on to make an undertaking that his
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indebtedness will be paid.
He therefore urged us to hold that in view of this acknowledgment of debt, the right of the Respondent to approach the Court for recovery of the debt owed it by the Appellant cannot be said to have been barred by Section 18 of the Limitation Law of Oyo State.
Learned Counsel to the Appellant in his Reply Brief submitted that before a letter could be regarded as an acknowledgment of debt, it must be unequivocal. He urged us to hold that the acknowledgment in the Appellant?s letter of 31st May, 2010 is not an acknowledgment of debt as contended by the Respondent?s Counsel and that even where it is found to be so, this suit will still be statute barred.
Parties are ad idem that the nature of the present action being recovery of debt is contractual. They are also agreed that by virtue of Section 18 of the Limitation Law of Oyo State, such action cannot be brought after the expiration of five years from the date the cause of action accrued. It is trite that time begins to run for the purposes of a Statute of Limitation from the date on which the cause of action arose. It is also the law that a Court has no
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jurisdiction to entertain an action that is statute barred by a Limitation Law. See EGBE VS. ADEFARASIN (1987) 1 NWLR (PT. 47) PAGE 1 and N.P.A. PLC. VS. LOTUS PLASTIC LTD. 2005 19 NWLR (PT. 959) PG. 158 AT 181 PARAGRAPHS D ? G. It is trite that the essence of a Limitation Law is to ensure that all claims are diligently and timeously prosecuted before the Court while the supporting evidence is still readily and freshly available.
In ATTORNEY GENERAL ADAMAWA STATE VS. ATTORNEY GENERAL OF THE FEDERATION (2014) 14 NWLR (PT. 1428) 515 AT 567 PARAGRAPHS D ? E, the Supreme Court held thus:
?The law is already settled that where a party?s action is caught by Statute of Limitation and become statute barred, the following consequences will result:
a. The party would lose his right of action;
b. The party would lose the right of enforcement;
c. The party would also irretrievably lose the right to judicial relief;
d. The party will have an empty cause of action which no Court will assist him to enforce.?
The Court went on further to hold as follows:
?There was no indication that the Defendant ever
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responded to any of the letters said to have been written by the Plaintiffs. In any event even where there were exchange of correspondences and negotiation was going on, the time shall not stop running from the date the defendant acknowledge indebtedness in July, 1983. Negotiation by parties does not prevent or stop time from running.?
The question that needs to be asked at this point is whether the action at the lower Court was statute barred thereby robbing the Court of the Jurisdiction to entertain and determine the Respondent?s claim.
In taking a decision on whether an action to enforce a legal right is statute barred or not, the Court shall confine itself to the averments in the Writ of Summons and the Statement of Claim which allege the factual situation that gave rise to the cause of action. See MULIMA VS. USMAN (2014) 16 NWLR (PT. 1432) 160 AT 199 PARAGRAPHS C ? D.
?The Writ of Summons and the accompanying processes in this suit were filed on the 17th of August, 2015. In the present circumstance, a determination of when the cause of action arose will be helpful in calculating the timeline in order to arrive at a conclusion
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as to whether or not the five year period lapsed before the suit was filed at the lower Court.
From the Statement of Claim filed at the lower Court it is clear that the Respondent granted a loan to the Plaintiff between January and March, 2008.
?Paragraph 4 of the Statement of Claim which is contained at page 4 of the record read thus:
?The Claimant avers that having advanced the said loan of One Million Naira only to the Defendant, the Defendant was expected to service the said loan for the period of twelve months (from January ? December 2008) at the interest rate of 3% with the repayment being a monthly constant installment payment and a clause of any default was also agreed to attract additional charges plus the normal rate 3% on the outstanding balance by the parties.?
In paragraph 5 of the Statement of Claim the Respondent averred that the Appellant has failed, refused and neglected to service the loan repayment schedules for more than two years including the time the matter was filed.
?From the averments in the Statement of Claim, it is clear that the Respondent?s case at the lower Court is that the loan
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was to be serviced by the Appellant for the entire year (2008) but that the Appellant defaulted and has so defaulted for more than two years including the time the matter was filed.
It can thus be inferred from the averments in the Statement of Claim that the loan was to be repaid within the year of 2008. The Appellant defaulted. The cause of action of the Respondent therefore accrued at the end of 2008. This suit was filed on the 17th of August, 2015. It follows therefore that the action was filed outside the period of limitation.
The matter does not however end there. Learned Counsel to the Respondent alluded to a letter dated 31st of May, 2010 written by the Appellant to the Respondent where he acknowledged his indebtedness. It is his contention that time began to run anew from that date and as such the action was not statute barred.
The general position of the law is that when in respect of cause of action, the period of limitation begins to run, it is not broken and it does not cease to run merely because the parties engaged in negotiation. See EBOIGBE VS. NNPC (1994) 5 NWLR (PT. 347) PAGE 649 and EKEOCHA VS. C. I. & P. S. B. (2007) ALL FWLR (PT. 392) PAGE 1976.
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This general position however admits an exception where there is acknowledgment of the debt. The right to recover by action is revived. In other words where there is admission of liability during negotiation and all that remains is fulfillment of the agreement, the limitation time begins to run from the date of acknowledgment of the debt. The cause of action is thus revived. See KOKOORIN VS. PATIGI LOCAL GOVERNMENT (2009) 15 NWLR (PT. 1164) PAGE 205 and N.S.I.T.F.M.B. VS. KLIFCO NIG. LTD. (2010) 13 NWLR (PT. 1211) PG. 307.
What would then amount to an acknowledgement of debt for the purpose of revival of cause of action? The acknowledgment of the debt must be unconditional and unequivocal. The determination of what constitutes an acknowledgment is a question of fact. It would depend on the contents of such letter.
In N.S.I.T.F.M.B. VS. KLIFCO NIG. LTD. (2010) 13 NWLR (PT. 1211) PG. 307, the Supreme Court per CHUKWUMAH ENEH JSC held thus:
?By a long line of decided cases, acknowledgement of debt owed to a creditor has to be unconditional and unequivocal. The words used by the debtor to recognize the existence
16
of the instant debt are ?that our computation of our indebtedness differs from yours…?
These words having been construed in the con of the letter couldn?t be more absolute and unconditional as to the acknowledgement of indebtedness of the defendant to the plaintiff. Nothing could be more positive than the said phrase i. e. under lined words in acknowledging of the said debt. There is no doubt of their being absolutely and unconditionally unequivocal on the indebtedness. It is not required as espoused in many cases that the precise amount i.e. figures of the debt must be stated, in this case in Exhibit L and as I said above the amount here is ascertainable without any difficulty and without further evidence ?
Having carefully considered this case, there is no doubt in my mind that Exhibit J having satisfied the requirements I have adumbrated above is an absolute and unconditional acknowledgement of indebtedness by the defendant to the plaintiff as per the claim and that in consequence thereof has taken in the instant suit, out of the Limitation Act?.
?The letter dated 31st May 2010 written by
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the Appellant to the Respondent relied upon by the Respondent?s Counsel is at Page 29 of the record.
The letter reads in part as follows:
?LETTER OF UNDERTAKING
Reference to your letter dated 19th May 2010 received and well understood.
I am using this privilege to write an undertaking that the said debts will be settled in June 2010. In case of any default to this understanding, the Bank should take those steps as stated in the previous letter which was received by me; i.e. the use of Law Enforcement Agencies ?EFCC?, write a letter of Demand to the Service Commission and the State Universal Basic Education Board, Ibadan.
Thanks for your consideration.
Yours faithfully?.
The above letter was written to the Respondent after a demand for payment of the debt had been made by the Appellant. By that letter, the Respondent gave an undertaking to settle the debt owed to the Respondent by June 2010. The letter is an unconditional and unequivocal acknowledgement of the debt owed the Respondent by the Appellant and I so hold.
?The Appellant in the letter promised to pay the debt by June 2010. The period
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of Limitation therefore began to run anew from June 2010 and I so hold. Five years from June 2010 is June 2015. The Respondent filed this suit for recovery of the debt owed her by the Appellant on the 17th of August 2015. This is apparently outside the five years limitation period. The cause of action of the Respondent had been extinguished by operation of law. It is statute barred. The lower Court therefore had no jurisdiction to entertain same and I so hold.
The law is settled that proceedings conducted without jurisdiction no matter how brilliantly conducted is a nullity. No valid order can be made without jurisdiction. There is nothing more useless as conducting a trial flawless only to find out the Court had no jurisdiction to hear the matter.
In this suit currently on appeal, the lower Court had no jurisdiction to entertain the suit ab initio same having been statute barred by virtue of the Limitation Law of Oyo State. This being so, the proceedings of the lower Court was conducted without jurisdiction. It is trite that jurisdiction is the bedrock of any judicial proceedings and its absence renders any proceedings a nullity. See
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MADUKOLU VS. NKEMDILIM 1962 ALL NLR 587.
The judgment of the lower Court delivered in SUIT NO: HOG/11/2015 was given without jurisdiction.
This issue is therefore resolved in favour of the Appellant.
Having found that the lower Court had no jurisdiction to entertain the suit for want of jurisdiction, the entire proceedings and the judgment are a nullity. This single issue of want of jurisdiction to entertain the action is sufficient to dispose of this appeal. I would therefore not bother to address all other issues raised in this appeal. The suit filed by the Appellant at the lower Court is liable to be dismissed for being statute barred.
In conclusion I find this appeal meritorious and it is accordingly allowed. Suit No: HOG/11/2015 filed at the lower Court on the 17th of August 2015 is hereby dismissed for being statute barred. Parties are to bear their own costs.
NONYEREM OKORONKWO, J.C.A.: I have had the privilege of reading n draft the judgment in this appeal by my brother Folasade Ayodeji Ojo, JCA whereby the appeal was allowed because the suit that engendered it was statute barred.
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I agree with the lead judgment and in addition state that the right of action has been extinguished by statute ? Section 18 of the Limitation Law of Oyo State.
ABUBAKAR MAHMUD TALBA J.C.A.: I have had the privilege of reading in advance the Judgment Just delivered by my learned brother, Folasade Ayodeji Ojo JCA. My learned brother has adequately considered the fundamental issue of jurisdiction as it affects the trial Court in view of Section 18 of the Limitation Law of Oyo State. From June 2010 when the limitation period began to run, the Respondent had up to June 2015 to file an action. But the Respondent filed the suit to recover the debt owed her by the Appellant on the 17 of August, 2015.
This is clearly outside the five (5) years limitation period. The cause of action of the Respondent had been extinguished by operation of law. The suit has become statute barred thereby robbing the trial Court of its competence to entertain the suit.
The appeal is meritorious and t is allowed. I abide by the consequential Order made in the lead Judgment.
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Appearances:
R. O. Bakare, Esq.For Appellant(s)
N. N. Adegboye, Esq.For Respondent(s)
Appearances
R. O. Bakare, Esq.For Appellant
AND
N. N. Adegboye, Esq.For Respondent