UNION BANK OF (NIG.) PLC v. GEOMARTIME SERVICES LTD (2022)

UNION BANK OF (NIG.) PLC v. GEOMARTIME SERVICES LTD

(2022)LCN/16586(CA)

In The Court Of Appeal

(PORT HARCOURT JUDICIAL DIVISION)

On Friday, March 04, 2022

CA/PH/634/2019

Before Our Lordships:

Joseph Shagbaor Ikyegh Justice of the Court of Appeal

Gabriel Omoniyi Kolawole Justice of the Court of Appeal

Mohammed Lawal Abubakar Justice of the Court of Appeal

Between

UNION BANK OF NIGERIA PLC APPELANT(S)

And

GEOMARTIME SERVICES LIMITED RESPONDENT(S)

RATIO

THE POSITION OF LAW ON THE ISSUE OF COST BEING A MATTER OF DISCRETION

The issue of costs being a matter of discretion, the sufficiency of the grounds in awarding the costs and refusal to set it aside or vary it cannot be disturbed by an appellate Court, as the lower Court was within the province of the principles upon which costs are awarded or refused vide the case of Rewane v Okotie-Eboh (1960) 5 F.S.C. 200 at 206 citing with approval the old English case of Harold v Smith, 157 E.R., 1229, at 1231 where Baron Bramwell held inter alia that-
“Costs as between party and party are given by the law as an indemnity to the person entitled to them; they are not imposed as a punishment on the party who pays them nor given as a bonus to the party who receives them. Therefore, if the extent of the damnification can be found out, the extent to which costs ought to be allowed is ascertained…. As a general rule costs are an indemnity, and the principle is this-find out the damnification and then you find out the costs which should be allowed.”
The costs in question were therefore awarded on the ordinary principle of genuine and reasonable out-of-pocket expenses and normal counsel’s costs usually awarded to counsel, in favour of a successful party in an action who is entitled to costs as of right unless he misconducts himself vide the cases of Ojiegbe v Ubani (1961) 1 ALL NLR 277, Kukoyi v Odufale (1965) 1 ALL NLR 300, Adenaiya v Governor(1962) 1 ALL N.L.R 300, E.F.S & Co. v B.S.N.P. (1972) 3 S.C.12, Obayagbona v Obazee (1972) 5 S.C. 247.
See also Order 49 Rule (1) (1) of the rules of the lower Court. PER IKYEGH, J.C.A.

JOSEPH SHAGBAOR IKYEGH, J.C.A. (Delivering the Leading Judgment): The appeal is from a decision of the High Court of Justice of Rivers State (the lower Court) whereby it awarded N5million general damages against the appellant in favour of the respondent due to the negative credit report made by the appellant to the then Enterprise Bank Plc, now known as Heritage Bank Plc, which had caused the latter not to issue credit facilities to the respondent as finance lease for the purchase of two(2) 35m offshore multipurpose patrol vessel which led the respondent to suffer business losses, harassment, loss of credit and goodwill. The lower Court dismissed the counter-claim of the appellant that the respondent was not indebted to it as counter-claimed because there was no evidence in proof of the alleged indebtedness. The lower Court had earlier awarded costs of N40,000 and N60,000 respectively, against the appellant in favour of the respondent on 06.05.2019 and 22.05.19, respectively. The facts further disclose that whilst the costs of N100,000 awarded in the judgment delivered on 19.11.19 was not appealed against, the appellant challenged the refusal of its application by the lower Court to vary the award of costs earlier made in the course of the proceedings on 06.05.19 and 22.05.19, respectively.

The appellant expressed its dissatisfaction with the decision of the lower Court in a notice of appeal with four (4) grounds contained in pages 596-598 of the record of appeal (the record).

The appellant contended in the brief of argument filed on 07.09.2021 that the respondent had failed to discharge the onus of proof of its claim as required by law in that the evidence upon which the respondent sought to establish the case was based on the hearsay of the sole witness (CW1) called by the respondent as claimant at the lower Court, so the respondent’s case should have been dismissed citing in support Sections 37 and 38 of the Evidence Act 2011 (Evidence Act) and the cases of Archibong v Ita (2004) 2 NWLR (Pt.858) 590 at 619, Agbana v Owa (2004) 13 NWLR (Pt.889) 1 at 17, Ifegwu v Union Bank of Nigeria PLC (2011) 16 NWLR (Pt.1274) 555 at 588, Ojo v Gharoro & Ors. (2006) 10 NWLR (Pt.987) 173 at 198-199, Impact Solutions Ltd. v International Breweries Ltd. (2018) 16 NWLR (Pt.1645) 377 at 400 read with Black’s Law Dictionary, 8th Edition 739.

The appellant contended that it had established the counter-claim on bank charges based on Exhibits C7, D8 and D9 which the lower Court mistook for claim on the principal loan to erroneously refuse the counter-claim which should be set aside and the counter-claim granted citing in support the cases of Odofin & Ors V Mogaji & Ors (1978) 4 S.C.91, Sterling Bank Plc v Falola (2015) ALL FWLR (Pt. 774) 1 CA. at 25 paras B-F and page 67 paras G-A; Ikekwem v Commissioner of Police, Delta State (2005) ALL FWLR (Pt.247) 1433 Ratio 4, Maersk V Winline (Nig.) Ltd (2015) ALL FWLR (Pt.808) 672 C.A. at 686 paras B-C, see also Akad Industries Ltd v Olubode (2004) 4 NWLR (Pt.862) 1.

The appellant contended in the brief that having regard to the refusal of its motion to vary or discharge the award of costs of N40,000 and N60,000, respectively made on 06.05.2019 and 22.05.2019, respectively in its ruling on 22.10.2019 which was not based on equitable exercise of discretion by the lower Court as the costs awarded were oppressive, the Court should interfere with the exercise of discretion by the lower Court citing in support the cases of Jev VS Iyortyom (2015) NWLR (Pt.1483) 484 and Mobil Producing Nigeria Limited vs Monokpo (2002) 3 NWLR (Pt.753) page 48 at 95 and Section 6(6) (a) of the Constitution of the Federal Republic of Nigeria, 1999, as amended and Order 49 Rule 1(1) of the Rivers State High Court (Civil Procedure) Rules, 2010 (the rules of the lower Court); upon which the appellant urged that the appeal be allowed and the decision of the lower Court set aside and the respondent’s claim be dismissed and the counter-claim granted.

The respondent argued in the brief filed on 11.11.2021, that there was no overdraft facility granted to the respondent but a bank draft transaction as shown by the evidence in the record, so there was no valid contract for a loan to enforce and that based on the above the lower Court was right to enter judgment in favour of the respondent that it was not indebted to the appellant citing in support the cases of N.N.B. Ltd v Odiase (1993) 8 NWLR (Pt.310) 235, Diamond Bank Ltd. v Partnership Investment Co. Ltd and Anor. (2009) LPELR-939 (SC), A-G., Gombe State v Gadzama (2014) LPELR-23423 (CA), Obidigwe v kay Construction Ltd (2014) LPELR-24561 (CA), Suleiko Communication Ltd. v Access Bank PLC (2016) LPELR-41321 (CA) read with Black’s Law Dictionary (Seventh Edition) on the meaning of the phrase ‘overdraft’.

The respondent argued that the failure to inform it of the service charge in respect of the transaction after ten(10) years amounted to negligence and waiver on the part of the appellant and that the falls debit entries made on the bank account by the appellant as well as the negative report the appellant made to Enterprise Bank PLC now Heritage Bank PLC caused the respondent loss of reputation, credit and goodwill and that by Exhibits C1 and C2, in particular, the respondent suffered loss as a result of the appellant’s negligence in handling the bank draft transaction of 18.02.04 citing in support of the cases of Obidigwe v Kay Construction Ltd (2014) LPELR-24561(CA), Suleiko Communications Ltd v Access Bank Plc (2016) LPELR-41321(CA), Diamond Bank v. Mocok Onu (Nig.) Ltd (2019) LPELR-46440(CA), N.N.B. LTD V Odiase (1993) 8 NWLR (Pt.310) 235, First Bank of Nigeria Ltd v African Petroleum Ltd (1996) 4 NWLR (Pt.443) 438 U.B.A V Folarin (2003) 7 NWLR (Pt.666) 534 and Linton Industries Trading Co. (Nig.) Ltd v C.B.N. (2015) 4 NWLR (Pt.1447) 94, S.G.B.N. Ltd v Eleganza Industries Ltd (2004) 8 N.W.L.R (Pt.875) 432 Ratio 1, F.B.N. Plc v Banjo (2015) 5 NWLR, (Pt.1452) 253. ‘Per Shuaibu, J.C.A (Pp.23-24, paras. F-B),

The respondent argued that the entries in the statement of account Exhibits D5 and D6, without independent evidence or admission in support were not enough to establish the indebtedness of the respondent and that it is not the duty of the Court to embark on a voyage of discovery to ascertain how the amount claimed by the appellant added up citing in support the cases of Ishola v Societe General Bank (Nig.) Ltd (1997) 2 NWLR (Pt488) 405, First Bank of Nig. Plc v Mamman Nig. Ltd (2001) FWLR (Pt.31) 2990, H.N.B. Ltd v Gifts Unique (Nig.) Ltd (2004) 15 NWLR (Pt896) 408 AT 427, Veepee Industries Ltd v Cocoa Industries Ltd (2008) 4 SCNJ 482, Bendel Feed & Flour Mill Ltd v NIMB (2000) 5 NWLR 29 AT 47, In H.N.B. Ltd v Gifts Unique (Nig.) Ltd (supra) AT p. 423, Diamond Bank v Partnership Investment Co. Ltd & Anor. (2009) 12 SC (Pt.11) 159 and Section 38 of the Evidence Act as well as Encyclopedia of Evidence Law and Practice 1st Edition paragraph 740 at page 403.

The respondent argued that as the appellant refused to obey the order on costs; that the appellant was wrong to apply to the lower Court to set aside the order of costs as if the lower Court was to sit on appeal over its own order and that the award of costs was reasonable as it was based on the appellant’s failure to file written address within the time prescribed by the rules of the lower Court and that costs follow the event citing in support the cases of Elbarakat Global Resources Ltd v Governor, Sokoto State & Ors (2020) LPELR-50916 (CA), RMM Global Co. Ltd & Anor. V Stanbic IBTC Bank Plc (2019) LPELR-48092 (CA), Access Bank v Petro-AL (Nig.) Ltd (2017) LPELR-45198(CA), upon which the respondent urged that the appeal be dismissed with N1million costs against the appellant.

There appears to be no evidence of contract of overdraft in the record. An overdraft facility is usually granted on request by the customer with documentation by the parties concerned – banker and customer. If not done by express contract, an overdraft may be raised by the customer overdrawing his account without protest or objection by the bank in which case the bank debits the customer’s account for the overdrawn sum. None of the instances (supra) occurred in the present case. There was therefore no express or implied existence of overdraft facility and admission of indebtedness by the respondent in the circumstances.
The statements of account, Exhibits D5 and D6, standing alone were not enough to charge the respondent with liability vide the cases (supra) and Section 38 of the Evidence Act (supra) cited by the respondent. It would have been a different issue if the statement of account with the entries on the alleged indebtedness was served on the respondent before trial without protest from the respondent. Such was not the case here.
I think the underlying thrust behind the requirement that the customer accepts or agrees with the debit entries made by the banker in his account has to do with the fear and suspicion that as the banker’s books, where the entries are made and kept by the banker, the temptation due to greed to make profit may overcome the person making the entries to inflate or distort it in favour of the banker to the detriment of the customer. Consequently, whatever indebtedness the appellant alleged against the respondent was not established, as rightly held by the lower Court.
The bank charges were not shown to have been agreed upon by the respondent, nor did the appellant serve the respondent with periodic bank statements on the bank charges, so the lower Court was right to refuse to enter judgment on the leg of counter-claim of bank charges vide the cases (supra) cited on the issue by the respondent read with the case of Rickett v B.W.A. Ltd. (1960) 5 F.S.S.C. 113 at 118-119 where the then Federal Supreme Court held inter alia that-
“I come now to the question of the interest on the overdraft… Compound interest on an overdraft is chargeable only where the customer has agreed to it or where he is shown or must be taken to have acquiesced in the account being kept on that basis (2 Hals. 3rd ed., 229). The learned Judge said:
“There is no evidence of an express agreement between the parties that interest should be charged at this rate with monthly rests; nor is there evidence from which I can infer that the defendant acquiesced in interest being charged in this way”.
The learned Judge was clearly right as to an express agreement, and, in my view, he was right also in the second finding. The appellant himself was never cross-examined as to the receipt of monthly statements, which, over a period of three and half years would, I think, have been some evidence of acquiescence, and all that the bank’s manager, Mr. Musgrove, said, was, at one place:
“Interest on overdrafts is calculated monthly and entered in the account, and shown in the monthly statement” and at another place, in reference to certain cheques signed “J.C. Ticehurst Estate of F.J. Wilson” which the bank had cashed on the written authority of the appellant: “Statements have been sent out. No queries have been received on these cheques”.
In my view, such evidence is quite insufficient to establish acquiescence.”

The relief in paragraph 22(2) of the statement of claim contained in page 8 of the record is worded thus-
“2. A declaration that the false debit report on the account of the Claimant maintained with the Defendant purportedly due to an overdraft facility Purchased by the claimant has caused the Claimant severe losses, damages, loss of reputation, loss of credit, loss of goodwill and recent application to other banks by the claimant turned down based on the false debit report on the Claimants account which was without any reasonable excuse and an act of recklessness, and gross negligence on the part of the Defendant.”

Certainly, this is a declaratory relief. The lower Court held that it was established by admission in the statement of defence. But as restated by the Supreme Court in the case of Motunwase v Sorungbe (1988) 5 NWLR (Pt.92) 90 to the effect that in an action for declaratory relief or title the onus is clearly on the claimant to lead strong and positive evidence to establish his case for such a declaration; that an evasive averment in the statement of defence does not remove the burden on the claimant; because where the Court is called upon to make a declaration of right, it is incumbent on the claimant to satisfy the Court by evidence and not by admission in the pleadings of the defendant that he is entitled; and that the necessity for this arises from the fact that the Court has a discretion to grant or refuse the declaration and the success of a claimant in such an action depends on the strength of his own case not on the weakness of the defence placing reliance on the Supreme Court case of Bello v Eweka (1981) 1 S.C. 101.

The respondent’s sole witness, CW1, had answered under cross-examination in pages 556, 557 and 558 of the record in respect of the relief sought in paragraph 22(2) of the statement of claim thus-
“Q- You commenced this action against the Defendant because they wrote a negative report that is adverse to the interest of the Claimant to Enterprise bank
A- Yes.
Q- That report from Union Bank to Enterprise Bank was communicated to Enterprise bank in writing.
A- I do not know
Q- You do not have any written document from Union Bank to Enterprise indicating the negative report against the Claimant.
A- I do not know how they did the search. I am not a banker
Q- In paragraph 6 of your Statement on Oath you said you included Union Bank as one of your bankers for purposes of checking who are the other bankers
A- I did not indicate any other bank. They asked me which bank I have an account with I told them the Heritage bank then they went for the search.
Q- The negative report you are alleging is dependent on what you were told by the staff of Enterprise Bank that conducted the search.
A- Yes based on the search they said I am owing.”

The above pieces of evidence proved that the respondent’s case for the declaratory relief in paragraph 22(2) of the statement of claim (supra) was based on hearsay which is lacking in probative value and should not have influenced the lower Court in entering judgment in the sum of N5million general damages against the appellant in favour of the respondent in respect of the relief sought in paragraph 22(2) of the statement of claim (supra) vide the cases (supra) cited by the appellant on hearsay evidence.

Further, since the respondent’s case on the relief contained in paragraph 22(2) of the statement of claim (supra) was discredited under cross-examination (supra), the lower Court should not have entered judgment for the respondent with respect to the said leg of claim vide the cases of Ogundairo v Okanlawon (1963) NSCC 285 at 287, Awomuti v Salami (1978) 3 SC 105 at 113.

The issue of costs being a matter of discretion, the sufficiency of the grounds in awarding the costs and refusal to set it aside or vary it cannot be disturbed by an appellate Court, as the lower Court was within the province of the principles upon which costs are awarded or refused vide the case of Rewane v Okotie-Eboh (1960) 5 F.S.C. 200 at 206 citing with approval the old English case of Harold v Smith, 157 E.R., 1229, at 1231 where Baron Bramwell held inter alia that-
“Costs as between party and party are given by the law as an indemnity to the person entitled to them; they are not imposed as a punishment on the party who pays them nor given as a bonus to the party who receives them. Therefore, if the extent of the damnification can be found out, the extent to which costs ought to be allowed is ascertained…. As a general rule costs are an indemnity, and the principle is this-find out the damnification and then you find out the costs which should be allowed.”
The costs in question were therefore awarded on the ordinary principle of genuine and reasonable out-of-pocket expenses and normal counsel’s costs usually awarded to counsel, in favour of a successful party in an action who is entitled to costs as of right unless he misconducts himself vide the cases of Ojiegbe v Ubani (1961) 1 ALL NLR 277, Kukoyi v Odufale (1965) 1 ALL NLR 300, Adenaiya v Governor(1962) 1 ALL N.L.R 300, E.F.S & Co. v B.S.N.P. (1972) 3 S.C.12, Obayagbona v Obazee (1972) 5 S.C. 247.
See also Order 49 Rule (1) (1) of the rules of the lower Court.
The costs awarded on the two occasions in the course of interlocutory proceedings in the case as borne out by the record having followed the event and were a product of judicious and judicial discretion, the lower Court was therefore right to refuse to vacate, vary or set aside the costs in question.

In the result, I allow the appeal in part on the award of N5million general damages with respect to the relief sought in paragraph 22(2) of the statement of claim(supra) for being meritorious and hereby set aside that aspect of the decision of the lower Court and would dismiss the appeal with respect to the relief contained in paragraph 22(1) of the statement of claim to the effect that the respondent is not indebted to the appellant, and, would also dismiss the appeal with respect to the appeal on the dismissal of the counter-claim by the lower Court for being unmeritorious. Parties are to bear their costs.

GABRIEL OMONIYI KOLAWOLE, J.C.A.: I had the privilege to read in draft, the lead judgment just delivered by my learned brother, J S. Ikyegh, the Presiding Justice, Court of Appeal, Port Harcourt Division in which the appeal was allowed on the issue of N5 Million awarded by the lower Court as general damages against the appellant, and also dismiss the appeal on the decision that the respondent was not indebted to the appellant and the appeal on the Counter-Claim filed by the appellant against the respondent, but upheld the decision of the lower Court refuse to set aside the decision on the issue of costs awarded by the lower Court against the Appellant as it was adjudged as a “product of judicious and judicial discretion.”

I found the said judgment so comprehensively and lucidly structured that I don’t have the urge to make any additions to the lead judgment as prepared and delivered

The appeal partly succeeds as adjudged in the leading judgment just delivered, and I abide with the consequential order made that both “parties are to bear their costs”.

MOHAMMED LAWAL ABUBAKAR, J.C.A.: I have read the lead judgment of my learned brother Joseph Shagbaor Ikyegh JCA. I agree with the analysis and resolution of issues canvassed.