UNITED BANK FOR AFRICA PLC v. UNISALES INTERNATIONAL (NIGERIA) LTD (2014)

UNITED BANK FOR AFRICA PLC v. UNISALES INTERNATIONAL (NIGERIA) LTD

(2014)LCN/7558(CA)

In The Court of Appeal of Nigeria

On Friday, the 21st day of November, 2014

CA/PH/241/2008

RATIO

CONSTITUTIONAL LAW: FUNDAMENTAL RIGHT TO FAIR HEARING; FAIR HEARING ACCORDING TO THE CONSTITUTION

In setting the stage for court’s analysis in this issue, it may be appropriate, if only in a nut-shell to begin by re-enacting the classical position as far as the issue of fair hearing is concerned. At common law, the rules of natural justice usually expressed in the Latin maxims; ‘Audi Alteram Partem’ and ‘Nemo judex in causa sua’ are procedural safeguards especially in the trial process. These rules have since found expression and have been incorporated in successive Nigerian constitutions since 1960. In the 1999 Constitution the rules are captured in section 36(1). Therein all courts and tribunals are required, in the determination of the civil rights and obligations of parties to accord them a fair hearing. Of course the substance of section 36 of the Constitution of 1999 (as amended) is in pari materia with the Universal Declaration of Human Rights adopted by the General Assembly of the United Nations in 1948, Article 10 of which reads thus;

“Everyone is entitled in full equality to a fair and public hearing by an independent and impartial tribunal in the determination of his rights and obligations…”

Where therefore, a trial court fails or neglects to observe the strict tenets of fair hearing, a breach in the rights of the parties concerned is said to have occurred. See the case of ODIGWE vs. JSC. DELTA STATE (2011) 10 NWLR (PT.1255); BAMGBOYE vs. UNILORIN (1999) 10 NWLR (PT.622) 290; USANI vs. DUKE (2004) 7 NWLR (PT.871) 116 and legion of other decided cases on the subject. But the pertinent question to be addressed at this stage is; where the court has done all it possibly could to afford a party a fair hearing in a matter before it and the party simply refuses and/or neglects to fall in line as required, and the court subsequently goes ahead to hear and to decide the matter, would the court be said to have breached the fair hearing provisions of the 1999 Constitution? In putting this question, perhaps, differently; where a party to a suit is accorded a reasonable opportunity of being heard and in a manner prescribed by law and for no reasons whatsoever fails or neglects to take advantage of the court’s magnanimity, would the court be said to have breached the fair hearing provisions of the 1999 Constitution? It is trite law that a party who had ample opportunity of being heard but failed to utilize such opportunity, cannot be heard to complain that his right to fair hearing was breached. See the case of KADUNA ILE LTD. vs. UMAR (1995) 1 NWLR (Pt.31) 143 at 159; See also GOVERNOR OF LAGOS STATE vs. ADEYINKA (2012) ALL FWLR (PT.616) 361 and a host of other decisions of court in that light. per. FREDERICK O. OHO, J.C.A.

EQUITY RELIEF: MORTGAGE; THE EXERCISE OF THE MORTGAGEE’S POWER OF SALE

In exercising the power of sale, all that the law requires of the mortgagee is to act in good faith and in the absence of fraud and unfair dealing with the mortgaged property or collusion with the purchaser resulting in gross undervalue, the sale cannot be regarded as questionable even where the sale is disadvantageous to the Mortgagor. In W.A.B. LTD. vs. SAVANNAH VENTURES LTD (2002) 10 NWLR (Pt.775) S.C. 401 the Supreme Court held that the Mortgagee or Receiver engaged in selling a mortgaged property has a duty to act bona fide. In other words, the only obligation incumbent on a mortgagee selling under and in pursuance of a power of sale in a mortgage transaction is to act in good faith.

This court in TEMCO ENG. & CO. LTD. vs. S. B. N. LTD, (1995) 5 NWLR (Pt.397) CA 607 @ 628, paras. G – H; also added that the law is clear that the Mortgagee in exercising his power of sale under a mortgage has a duty to take reasonable care to obtain the true market value, not necessarily the best value, of the property in order to realize his security by turning it into money when he likes, as he has a right to do, and has no obligation to wait for a favourable moment in the property market. See also A.C.B. LTD. vs. IHEKWABA (2003) 16 NWLR (Pt.846) S.C 249. per. FREDERICK O. OHO, J.C.A.

JUSTICES

IGNATIUS IGWE AGUBE Justice of The Court of Appeal of Nigeria

ITA GEORGE MBABA Justice of The Court of Appeal of Nigeria

FREDERICK O. OHO Justice of The Court of Appeal of Nigeria

Between

UNITED BANK FOR AFRICA PLC – Appellant(s)

AND

UNISALES INTERNATIONAL (NIGERIA) LIMITED – Respondent(s)

FREDERICK O. OHO, J.C.A. (Delivering the Leading Judgment): This is a relatively short case in respect of which only the PW1 testified, tendered a number of documentary Exhibits and was hardly Cross-Examined before the Defendant was foreclosed by the Lower Court and yet has raised a number of important issues in this Appeal. The main of these issues is the question of Fair-Hearing and the propriety of issuing Hearing Notices to parties alerting them of the cases pending against them before orders and judgments are delivered. There is also the issue of the Mortgagee’s power of sale; whether same can be vitiated if tainted by fraud or collusion. The issues of award of damages by the Lower Court, when fraud is alleged to have been proved in a Mortgage transaction also featured in this Appeal.

The Plaintiff, a limited liability company and customer of the Defendant at its Ikot-Ekpene Road Branch, Aba, Abia State in 1983 was a beneficiary of an overdraft facility to the tune of N200,000.00 vide a letter dated 24-2-1983, with which to augment its importation business. In securing the facility, the Plaintiff mortgaged two of its properties situate at 146, Ehi Road, and 194, Jubilee Road, both in Aba, Abia State of Nigeria. According to the Plaintiff, the Goods to be imported were duly shipped from Rotterdam to Port-Harcourt but were stolen by unknown persons, The Defendant, as a result of the plaintiff’s indebtedness to her and after several demands to no avail, instructed an Auctioneer’ one Mr. G. Ekwekwuo to sell by Public Auction the plaintiff’s two properties by which the overdraft facility was secured. The Plaintiff, on its part alleged fraud and collusion between the Defendant and its agent, the Auctioneer in the process of selling the mortgaged properties, by not issuing adequate notices of the scheduled Auction. The Plaintiff also alleged that the sales by Auction of the properties were carried out in violation of Section 19 of the Auctioneer’s Law, Cap. 12 Laws of Eastern Nigeria applicable in Abia State.

At the Lower Court, the Defendant’s own story was completely different. The sum of Two-Hundred and Fifty-Thousand (N250,000.00) Naira and not Two Hundred Thousand (N200,000.000) as claimed by plaintiff, was the amount said to be given to the Plaintiff as monies to augment its working capital and not meant for any importation of goods. And as a result, Defendant claimed not to have any knowledge of whether goods were imported or not as importation transactions are usually done through loans in the form of letters of credit and not through overdrafts facilities in customers’ account. Defendant also denied any under hand dealings in the Auction sale of the mortgaged properties as the amount realized was the forced sale value of the properties to the highest bidder. The Defendant further claimed that the sales were done based on the Valuation Reports of Messrs. CHUKWU UDE & PARTNERS of No.130 Ehi Road, Estate Surveyors and Valuers on the two mortgaged properties at the instance of Mr. LEKWAUWA, the Managing Director of the plaintiff’s company.

All of these notwithstanding, in order to redress the perceived anomalies in the alleged shoddy handling of the Auction sales, the Plaintiff took out a writ of summons accompanied by a statement of claim on the 27-9-1994 wherein at paragraph 28 the Plaintiff claimed against the Defendant as follows:

“WHEREFORE the Plaintiff has been damnified and claims as follows:

1. A Declaration that the Plaintiff’s properties situate at 194, Jubilee Road, Aba and 146 Ehi Road, Aba were irregularly and fraudulently sold by the Defendant.

2. N10,000,000.00 damages for the irregular sale.

3. The sum of N1,500,000.00 being money due from the Defendant to the plaintiff less the sum of N472,612.96K owed to the Defendant by the plaintiff as at 11th September, 1989.

4. Interest on the above sum at the rate of 22% per annum from 12th September, 1999 until judgment.

5. Interest at the rate of 10% per annum on the judgment debt until liquidated,

6. A Declaration that the Plaintiff is not indebted to the Defendant.

7. The cost of this Action.”

In his evidence before the trial court, the PW1, one L. M. Lekwauwa told court that he is Managing Director of the Plaintiff and went on to give evidence in line with the statement of claim, tendering in the course of doing so, a number of documentary Exhibits. At the conclusion of the evidence-in-chief of the said PW1, the court adjourned the matter for cross-examination of the PW1 by learned counsel for the Defendant. It was at this stage that the Defendant’s counsel resorted to writing letters after letters, one each for every adjourned date with the result that Defendant ended up foreclosed by the Lower Court and the Plaintiffs sole witness, the PW1 ended up not cross-examined. The trial court thereafter adjourned the matter for Defense. No hearing Notices were issued on the Defendant. When the Defendant did not turn up at the next date of case, Plaintiff’s counsel addressed court and judgment was delivered in the matter on the 20th day of December, 2004.

The learned trial Judge, in his judgment said:

“I am satisfied that the plaintiff has proved his case based on his unchallenged evidence. He is entitled to judgment against the Defendant. Prayer 1 of paragraph 28 succeeds. With regards to prayer 2, court award damages of Three Million Naira (N3,000,000.00) to the plaintiff for the irregular sale. Prayer 3 has been proved and Plaintiff is entitled to N1,500,000.00 being money due from Defendant to plaintiff. With regards prayer 4 to court does not see how the interest of 22% was arrived at. No evidence to support same. With regards to prayer 5, plaintiff is entitled to interest of 10% per annum on the judgment debt from date of judgment until judgment debt is fully liquidated. Prayer 6 is also proved, There is no evidence that plaintiff is indebted to Defendant, the plaintiff is entitled to cost of action as in prayer 7 assessed at N10,000.00 as against Defendant.”

Dissatisfied with this decision, the Defendant filed a Notice of Appeal with six (6) grounds, which without their particulars are reproduced as follows:

GROUNDS OF APPEAL:

1. The learned trial Judge erred in law when he started to hear the evidence of the plaintiff that is the 1st Plaintiff’s witness after which he foreclosed the Defendant/Appellant and later gave judgment against her without issuing hearing Notice to the Defendant/Appellant.

2. That the learned trial Judge erred in Law when he held that the amount realized by the Defendant/Appellant Auctioneer was inadequate.

3. The award of Three Million (N3,000,000.000) Naira made against the Defendant/Appellant for fraud was made under a wrong principle of law.

4. The trial court erred in law when he awarded damages against the Defendant/Appellant for fraud when in evidence there was no proof of fraud by the Plaintiff/Respondent.

5. The trial Judge erred in law when he questioned the right of the Defendant/Appellant to sell the two (2) respective (sic) property when it was clear in evidence that these two (2) property (sic) were subject of a legal Mortgage and the Defendant/Appellant as the Mortgagee has the right to sell the property even without recourse to an Auctioneer!!

6. The trial Judge erred in law when properties were he held that the sold without publication or insufficient publication.

In compliance with the rules of this court, parties filed and exchanged briefs of argument. The Appellant’s brief of argument settled by D. O. Uruakpa, Esq., identified five (5) issues for the determination of this Appeal to wit:

ISSUES:

(1) Was the trial court right to hear the Evidence of the Plaintiff, foreclose the Defendant, hear the Address of the plaintiff counsel and delivered Judgment without issuing any hearing Notice to the Defendant who is a party to the matter thereby denying the Defendant fair hearing which is her constitutional right.

(2) Was the trial court right to find that the Amount realized by the Defendant from the Auction sale was inadequate.

(3) Was the award of Three Million Naira (N3,000,000.00) made against the Defendant for irregular sale by the trial court not made under a wrong principle of Law? (4) was the trial court right to make a Declaration or find that the sale of the plaintiff two (2) Houses were done by fraud by the Defendant when particulars of fraud were not specifically pleaded and proved in Evidence by the plaintiff?

(5) was the trial court right to declare the sale of the Plaintiff’s two(2) property (sic) irregular when the said two property (sic) were subject of a legal mortgage which entitles the Defendant even to sale (sic) same without recourse to an Auctioneer?

The Respondent’s brief of argument settled by Ogbonna C. Ajuzie, Esq., on his part identified four (4) issues for the court’s determination to wit:

ISSUES:

(1) Whether from the circumstances of this case, there was a breach of the Appellant right to fair hearing.

(2) Whether there was fraud or irregularity in the sale of the Respondent’s properties known as and called No.194 Jubilee Road and No.146 Ehi Road respectively.

(3) Whether the trial court was right to have awarded N3,000,000.00 damaged against the Appellant.

(4) Whether the trial court was right to find that the amount realized by the Defendant/Appellant from the Auction sale was inadequate.

At the hearing of the Appeal on the 23-10-2014, learned counsel for the Appellant, D. O. Uruokpa, Esq. adopted and relied on the Appellant’s brief of argument dated 29-1-2009 and filed 2-2-2009 and the Appellant’s Reply brief dated 18-11-2013 and filed 26-11-2013 but deemed duly filed and served on the 23-10-2014 and urged the court to allow the Appeal and set aside the decision of the Lower Court.

The Respondent’s counsel, Ogbonna C. Ajuzie, Esq., adopted and relied on the Respondent’s brief of argument dated the 30-11-2012 and filed 17-12-2012, and urged the court to dismiss the Appeal. I have taken a very calm and close look at the issues formulated by learned counsel for the determination of this Appeal and have every cause to observe that although the issues appear to be the same in some aspects, I will nevertheless, settle for a re-formulation of the issues nominated by counsel for purposes of doing justice to all concerned in this Appeal. It is trite law that a court of law can rightly adopt, modify or re-frame issues already formulated for determination by the parties. The overriding consideration is that the issues formulated must lead to a proper determination of the dispute or grievance between the parties. see the case of FABIYI vs. ADENIYI (2000) 4 NWLR (PT.1055) 551. See also SHA vs. KWAM (2000) 8 NWLR (PT.670) 685 on account of this position.

Arising from the foregoing, the following issues are identified for the determination of this Appeal:

(1) Whether, given the facts and circumstances of this case, there was a breach of the Appellant’s rights to fair – hearing when Hearing Notices were not issued on Appellant.

(2) Whether there are any legal consequences where there is an irregular or improper exercise of the mortgaged power of sale of mortgaged properties.

(3) Whether there are fundamental rules of pleading and proving fraud?

ISSUE ONE:

“Whether, given the facts and circumstances of this case, there was a breach of the Appellant’s rights to fair – hearing when Hearing Notices were not issued on Appellant”.

The Defendant (who now becomes “the Appellant”) contends that by hearing the matter, foreclosing the Appellant and delivering its judgment without issuing Hearing Notices on the Appellant, amounts to denying the Appellant its constitutional right of fair-hearing thereby breaching Section 36 (1) of the Constitution of Nigeria 1999 (as amended). On the issue of fair hearing and the need to serve Hearing Notices on parties, learned Appellant’s counsel referred to the case of N.A.C.B. LTD. vs. OBADIAH (2004) 4 NWLR (PT.863) 326 at 340. Learned Appellant’s counsel referred court to pages 121 to 127 of the Records of Appeal and contended that at no time did the learned trial court mention that Hearing Notices were issued on the Appellant before commencement of trial and the court’s subsequent conclusion of hearing and proceeding to give judgment. This, according to counsel occasioned a miscarriage of justice. Learned counsel referred for support to the cases of AGENA vs. KATSEEN (1998) 3 NWLR (Pt.543) 560; SCOTT EMUAKPOR vs. UKARBT (1975) 12 SC. P.41.

On the part of the Plaintiff (who now becomes “the Respondent’), learned counsel contended that there is no denial of fair-hearing to a party who was accorded ample opportunity to defend his case and he abused such opportunities. Counsel said in addition, that the Appellant was accorded more than enough of such opportunities before the Lower Court and it refused to take advantage of it. Counsel further contended that a party cannot take advantage of his own wrong as the Appellant is trying to do in this case. Counsel referred to the case of MADAN MEMINOTU IBRAHIM vs. DR. LASIS OSUNDE (2009) 6 NWLR (PT.1130) 404 and the observation of ADEREMI, JSC in the case.

According to counsel, during the hearing of this matter, the Appellant’s counsel resorted to writing letters of adjournment. Counsel drew attention of this court to pages 25, 30-40 and 80-90 of the printed records. Counsel told court that the Appellant’s last letter in the matter was written on 22-6-2004 wherein he suggested and was obliged with the 27-7-2004 (See page 96 of the Records). But that after suggesting the said date, both the Appellant’s Representative and counsel, refused and/or neglected to appear without any word or explanations to the court. (see pages 53, 54 and 55 of the Records of Appeal).

With this at the background, learned Respondent’s counsel queried whether a person could be heard to complain of denial of fair-hearing when he has misused or squandered every opportunity accorded him to have a fair hearing? Learned counsel, not only answered this in the negative but also buttressed his arguments by citing the case of ATTN. GEN. RIVER STATE vs. GREGORY OBI UDE & 12 ORS and also the case of RE: CLEMENT NWARA (2006) 7 SCNJ P.628 in support.

It was learned counsel’s further contention that the Appellant and her counsel knew of the next adjourned date of the case, when it was their request for that date that prompted the court’s adjournment to the said 27-7-2004. The refusal to be present in court, learned counsel said was made deliberately to dare the Lower Court to do its worst. Counsel referred court to the case of EASTERN BREWERIES Plc. & ORS. vs. HENRY NWOKORO (2012) 14 NWLR (PT.1321) 488 AT 510-512 in support.

Counsel also contended that the Audi alteram partem Rule does not apply to this case as the rule applies only in situations where a party is denied the opportunity of being heard. But counsel quickly added that a person cannot be heard to complain of a denial of fair-hearing, who sets out to set a trap in the litigation process against the court. Counsel urged the court to resolve this issue in favour of Respondent.

“Everyone is entitled in full equality to a fair and public hearing by an independent and impartial tribunal in the determination of his rights and obligations…”

The strong point of learned Respondent’s counsel opposition to this appeal is that Appellant cannot and should not be heard to complain about denial of fair hearing when Appellant squandered every opportunity afforded it by the trial court to be heard in the case before judgment was delivered.

Perhaps, the facts of this aspect of the case as related to court in learned Respondent’s counsel brief of argument may be instructive on the issue. He said at paragraph 4.5 of the said brief of 17-12-2012 as follows;

“…During the hearing of this matter at the trial court, the Appellant counsel indulged in writing letters for adjournment which the court always obliged them see pages 2, 30 – 40 and 80 – 90 of the record. During such periods of writing letters for adjournment, the Appellant’s representative ensured that she went to court arid got the date the matter was adjourned to, as a result of their adjournment letter. Consequently, the Appellant counsel wrote last on the June 22, 2004 wherein he suggested dates and the court was magnanimous enough to adjourn the matter to 27-7-04 being one of the dates suggested by the defense counsel see page 96 of the records. On the said 27-7-04 being one of the dates suggested by the defense counsel, both the counsel and Appellant’s representative refused and or neglected to appear without any explanations to the court. See pages 53, 54 and 55 of the record…”

It is correct to observe from the foregoing, that as from the 4th day of April, 2004 to 22nd day of June, 2004 Appellant’s counsel wrote a few letters to the trial court asking for adjournments and all of which the trial court graciously granted. I have had to carefully read some of these letters and have discovered that the dominant reason given by counsel was to enable him appear before the Local Government Elections Tribunal sitting at the time. The last adjournment granted by the Lower Court was on the 22-6-2004 at the instance of the Appellant’s counsel and the matter was next adjourned to the 27-7-2004, which happens to be one of the many dates suggested by Appellant’s counsel in his letter dated 22-6-2004.

By the Respondent’s own showing going by the disclosures made in the brief resume of the facts made available to court by Respondent’s counsel, neither the Appellant’s representative nor its counsel were in court that fateful 27-7-2004 which only naturally suggests that they probably got no wind of the matter having been adjourned to the 27-7-2004 out of a number of dates suggested by them. The probable result of this is that from the said 27-7-2004 and every other subsequent date the case came up and Hearing continued and until judgment, the Appellant and his counsel could not be said to have known that Hearing continued and to what extent the matter proceeded before the Lower Court. Here is a matter in which the Appellant as Defendant before the Lower Court filed its Statement of Defense and had also partly cross-examined the PW1, before counsel got engaged in Election Petition matters and began to indulge in the ‘bad’ habit of writing letters for adjournment. What this court would have expected the Lower Court to have taken judicial Notice of is the fact that Election Petition Tribunals are usually given time limits to conclude hearings in the matters before them and thus, operate on tight schedules. That, of course is not to suggest here that this court is making excuses for some of the condemnable attitudes of counsel who handle matters in court, but had the trial court been a little bit careful, the situation we have on our hands in this Appeal could altogether have been avoided. Two wrongs, they say do not make a right! That, however, is neither here nor there.

Where I, perhaps, still find it particularly convenient to boldly disagree with Respondent’s contention was when he said that the Appellant had ample opportunity to defend its case before the Lower Court but squandered it. What this court expected of the trial court was for it to have adverted its minds to the fact that the Appellant and its counsel, not being in court at the last date, may not have been aware of the next date the matter was adjourned after the 22-6-2004 since there were several dates suggested by Appellant’s counsel in his letter dated the 22-6-2004 and out of which the trial court picked one. It is usually at this stage and for precisely in times like this that the court is expected to have ordered the issuance of Hearing Notices. The typical scenario that most certainly would have played itself out in this case is that Appellant’s counsel would probably have made a suggestion of several dates, and the court goes ahead to pick the one that was convenient to it. In the absence of the issuance of Hearing Notices on the Appellant and his counsel, there is no way Appellant and counsel would have been in a position to know which, out of the dates suggested by him that the court picked as the next adjourned date of the case. See of the case of S & D CONSTRUCTION LIMITED VS. CHIEF BAYO AYOKU (2011) LPELR- 2965, where the Supreme Court said per ADEKEYE JSC. (as he then was) as follows;

“…it is trite law that Hearing Notice will not be issued or served on parties who already know or is reasonably presumed to have known of the date a matter is slated for hearing…”

It is for this reason that I am in agreement with learned counsel for the Appellant that a Hearing Notice ought to have been issued on the Appellant under the circumstances. So long as the Appellant and his counsel, on the said 27-7-2004 did not attend court, nothing prevented the Lower Court from making an order under the circumstances to bring to their attention, the next date of adjournment. It is clear that between the 27-7-2004 and all other subsequent dates of adjournment and until judgment was delivered on the 20-12-2004, the Appellant was not only shut out from the proceedings but was also literally kept in the dark as far as the proceedings were concerned. In the case of UTOBIVWI vs. OMAMO (2007) LPELR-8289, this court had cause to observe per IBIYEYE JCA, that;

“…it is trite that a court must be willing to go the extra mile to satisfy itself that a party to a case his Notice of the hearing date, See SAIDU vs. MAHMOOD (1998) 2 NWLR (PT.536) 130 AT 138/139; COMMISSIONER OF POLICE VS. IHEABE (1998) 11 NWLR (PT.575) 666 AT 679; MOHAMMED vs. HUSSENI (1999) 14 NWLR (PT.584) 136″…

The trial court cannot in all honesty feign ignorance of the fact that by choosing in the absence of Appellant and his counsel, one of the dates suggested by him, the Appellant and his counsel would not be in a position to know the date chosen, where a Hearing Notice is not issued to that effect. It is for this reason amongst a host of others that the device of the Hearing Notice was introduced in the trial processes of matters in court. For it would have been the only effective way, to ensure that the date it had chosen was brought to the attention of Appellant and his counsel and especially in the circumstances of this case. That way, the Lower Court would have richly acquitted itself of its responsibilities to the Appellant and ensure that its resolve to do justice between the parties is exonerated from all manners of blames and also seen and transparently so, to have played its part as fairly as possible between the parties. In the said case of UTOBIVWI VS. OMAMO (2007) (supra), this court further had cause to observe as follows;

“Justice is ensured vis-a-vis Hearing Notices when they are served on absenting parties as a condition precedent to notify them, inter alia, of the next adjourned date before jurisdiction is conferred on the court…”

By therefore, not bringing to the attention of the Appellant the next date to which the trial court had adjourned the matter between the parties, I am unable to be persuaded into agreeing that the rights of the Appellant to a fair hearing had not been violated in this case, thus occasioning grave miscarriage of justice. In addition to all of these and most importantly for that matter, when the Lower Court foreclosed Appellant in its absence from further cross-examining the Plaintiffs sole witness, due to unexplained absence of Appellant and its counsel, what this court would have considered a most appropriate and prudent thing to do was to have ordered the issuance of Hearing Notices after the matter was rightly adjourned for Defense. But this, the Lower Court failed and/or neglected to do. At page 160 of the printed records, this was what the Lower Court simply said:

“…At the end of the plaintiff’s case neither defendant nor his counsel appeared. The court thereafter foreclosed them on the 22nd day of June, 2004 after they were not in court to cross-examine PW1. After that plaintiff closed his case and court adjourned for defense. The defendant did not turn up for defense and case was adjourned for address. The learned SAN for plaintiff addressed court.”

The action of the Lower Court foreclosing the Appellant at the time was the right thing to have been done in the circumstance but adjourning the matter for defense without issuance of Hearing Notices informing the Appellant that it was time to defend itself is unacceptable to this court. The failure to do that is clear indication of a denial of the opportunity to conduct its defense and consequently a denial of fair hearing in this case. See the case of AKINRIMISI vs. MAERSK NIG. (2013) 3 SCNJ P.263 AT 272 where the Supreme Court held that it is a breach of the Defendant’s Fundamental Right to fair hearing against whom an order was made without being put on Notice. In this connection I resolve the issue one in favour of Appellant.

ISSUE TWO:

“Whether there are any legal consequences where there is an irregular or improper exercise of the mortgagee’s power of sale of mortgaged properties”.

This issue deals with all such issues that are raised in the briefs of argument of the parties touching on the issue of the mortgage transaction and the attendant allegations of undervalue of prices, irregularities, fraud and so on. In this connection, learned Appellant’s counsel drew court’s attention to paragraph 21 of the Respondent’s Statement of Claim, where Respondent had alleged that the ridiculously low prices of N93,000.00 and N95,000.00 respectively for which the Respondent’s two (2) houses were sold, was sufficient evidence of fraud. Disagreeing with this, counsel contended that the decision to undervalue was not enough to vitiate a mortgagee’s power of sale and referred to the locus classicus, EKA-ETEH vs. NIGERIA HOUSING DEV. SOCIETY LTD & ANOR (1973) N.S.C.C. VOL. 9 p.373 AT 380. As far as Appellant’s counsel is concerned, where a mortgagee exercises his power of sale bona fide for purposes of realizing his debt without collusion with the purchaser, the court will not interfere, unless the price is so ridiculously low itself to be evidence of fraud. It is against this background that counsel submitted that the award of N3,000,000.00 damages against Appellant at the Lower Court, was unjustified.

In responding, Respondent referred to paragraph 15 of the Respondent’s Statement of Claim where the Respondent’s allegation of collusion between Appellant and Appellant’s Agent was made, and how the Appellant never bothered to deny this in the Statement of Defense. By this failure, learned Respondent’s counsel contended that the allegation required no proof, where it was not specifically traversed by Appellant. It was the submission of counsel that this amounted to admission on the part of Appellant. He referred court to the case of OSENI LADOTUN vs. LASISI OYEWUNI (2008) 35 NWLR on the issue.

In justifying the trial court’s award of N3,000,000.00 damages against the Appellant for fraud and collusion, learned Respondent’s counsel referred court to the case of EKA-ETEH vs. NIGERIA HOUSING DEV. SOCIETY LTD. & ANOR (Supra) and posited that the establishment of fraud or collusion in a mortgage transaction amounts to an irregularity for which the mortgagor can claim damages. Learned counsel further cited the authority of ANDREW NWEKE OKONKWO vs. CO.OPERATIVE & COMMERCE BANK & 2 ORS (2003) 8 NWLR (PT.388) 389 on the Issue dealing with the question of improper sale by mortgagee which attracts a remedy in damages. Counsel debunked assertion of Appellant’s counsel who contended that the learned trial court in making an award of N3,000,000.00 acted on a wrong principle of law. Counsel cited the cases of: EZEKWE vs. OJOMEWO (1938) WNLR p.61 and also the case of L.C.C. vs. OGUNBIYI (1961) 1 ALL NLR 297. Learned Respondent’s counsel urged the court to resolve this issue in favour of Respondent.

The learned trial judge in his judgment found that in its exercise of its power of sale, the Appellant sold the mortgage at ridiculously low prices and for that reason took it as sufficient proof of the commission of an irregular or fraudulent transaction on the part of the Appellant. In the locus classicus, EKAETEH vs. NIGERIA HOUSING DEV. SOCIETY LTD & ANOR (Supra) the learned trial Judge did the exact same thing to the 1st Defendant who cross-appealed against the finding. Allowing the Appeal, the Supreme Court referred with approval, to the English Appeal Court’s pronouncement on the issue in FARRAR vs. FARRAR LTD. 40 Ch. D 395 and KENNEDY vs. DE TRAFFORD (1897) AC. 180 and said at page 198 as follows;

“We think it is now beyond controversy that undervalue alone is not enough to vitiate the exercise of a mortgagee’s power of sale. It must be shown that the sale was made at a fraudulent or gross undervalue. Indeed it is well established that if a mortgagee exercises his power of sale bona fide for purpose of realizing his debt and without collusion with the purchaser the court will not interfere even though the sale is very disadvantageous unless the price is so low as in itself to be evidence of fraud”.

In his evidence before the Lower Court the PW1 as contained in the Judgment of the learned trial Judge at page 158 of the printed records, said;

“…Defendant engaged the auctioneers to sell the properties. The auctioneer is G. Ekwekwuo. PW1 did not see any document from the auctioneer. The defendant gave the auctioneer a reserved price to sell the properties. The reserved good (sic) for No.146 Ehi Road, Aba was N95,000 at that time. The 194 Jubilee Roa4 was N90,000. In 1983, the state of currency in Nigeria was one Dollar 30 cents for one Naira but in 1989, it was twelve Naira to one dollar. The condition of living in 1989 was so high compared to what it was in 1983. The value of the properties i. e., 194 Jubilee Road, Aba was N300,000 and No.146 Ehi Road Aba was N150,000. The auctioneer advertised on a Sunday in 1989 against the sale on Monday by 7.00 am in the morning. PW1 said he mw the advertisement in the Champion Newspaper on 10th September, 1989 and he PW1 purchased a copy of the newspaper. He identified the auction notice contained in the newspape7 the auction for sale of 146 Ehi Road contained in the Champion newspaper of 10/9/89 was tendered, admitted and marked Exhibit ‘E’, There was no publication for No. 194 Jubilee Road Aba. After the publication, the two buildings were sold on 11/9/89. No 146 Ehi Road, Aba was sold for N96,000 while 194 Jubilee Road was sold for N93,000,00. it was not possible for people who were far or did not read the newspaper on Sunday to participate in the auction sales and that will make it impossible to realize the value of the property…the actual value of these buildings as evaluated by Chukwu Ude and Partners Estate valuers instructed to value the house by PW1 were for 146 Ehi Road, Aba N670,000.00 and for 194 Jubilee Road, Aba for one Million three Hundred and seventy thousand Naira (N1,370,000.00)…the valuation reports were tendered admitted and marked Exhibit ‘H’ for Ehi Road, Aba while the report for 194 Jubilee Road Aba was tendered, admitted and marked Exhibit ‘H1’. The defendant did not inform PWI of the result of the auction sale. They did not credit plaintiff’s account with any sum of money”..

To begin with, the issue two herein is distilled from the Grounds 2, 3, and 4, dealing with Respondent’s allegations of under-value, fraud/collusion and the sum of N3,000,000.00 awarded as damages by the Lower Court respectively. I shall now go ahead and deal with these issues in that order.

On the issue of under-value it appears as if the Lower Court had relied on the expert opinion or evidence of Messrs Chukwu Ude and Partners who gave the going prices of N670,000.00 and N1,370,000.00 for the 146 Ehi Road Aba and 194 Jubilee Road Aba respectively in their Valuation Reports admitted as Exhibits ‘H’ and ‘H1’. While it would be proper to observe that there is a very wide gap between the figures suggested by the Valuation Reports and the prices for which the properties were actually sold, it may be necessary to say here that even though the Lower Court was not bound to accept the opinion of an expert and act upon it, the court would appear not to have any choice than to do so as long as the expert evidence is unchallenged and un-contradicted as has been the situation in this case. See the case of SEISMOGRAPH SERVICES LTD vs. OSENI (1976) 1 NMLR 290. See also ADELAKUN vs. ORUKU (2006) ALL FWLR (PT.308) 1360 AT 1373 and a host of other decisions of court on the subject. Besides this and in strenuously, though reluctantly reasoning with the Lower Court’s assessment of the situation, landed properties usually appreciates in value over a period of time but prices of properties are also known to fluctuate according to the prevailing conditions in the property market usually dictated by the prevailing economic forces obtainable at the given point in time. The year under consideration was in 1989. Perhaps, the question that should be asked here is; what was the economic situation in Nigeria at the time given the state of the Nation’s badly managed economy and political instability under military dictatorships of the era? What was the purchasing power of the regular or average Nigerian at the time? These would have provided vital pieces of evidence which would have greatly assisted the Lower Court in trying to determine whether there was a fall in property prices at the time or not, rather than accepting hook, line and sinker the one sided Valuation Report provided by Messrs. Chukwu Ude and Partners (Estate Valuers) hired by the Respondent, who should naturally have the tendency to over exaggerate since the properties that went under the hammer were formerly his own.

The Appellant not only denied selling the properties at undervalued prices but also insisted that it was more concerned in realizing it debts for which the Respondent had defaulted over time to liquidate despite several demands to no avail. This court is not unaware of the passage in COOTE on Mortgages, volume 2, 9th Edition at page 972; approved by the Supreme Court in the case of EKA-ETEH vs. NIGERIA HOUSING DEV. SOCIETY LTD. & ANOR (Supra) which reads as follows;

“…the only obligation incumbent on a mortgagee selling under a power of sale in his mortgage is that he should act in good faith. Whether selling under an express or statutory power, he may generally conduct the sale in such manner as he may think most conducive to his own benefit, unless the deed contains any restrictions as to the mode of exercising the power, provided he acts bonafide and observes reasonable precautions to obtain not the best price but the proper price”…

In the present case, apart from the one sided Valuation Report of Messrs. Chukwu Ude and Partners and by which I have refused to be persuaded, no other evidence had been paraded before this or the Lower Court which tends to suggest that the properties were sold far below the market value at that time. The purported none denial of the Respondent’s paragraph 15 of its Statement of Claim where the allegation of collusion between Appellant and Appellant’s Agent was made does not hold any water as the Appellant as Defendant is deemed to have abandoned its pleadings in the Lower Court and same struck out when it did not show up to defend the matter. This issue is once again resolved in favour of the Appellant.

On the issue of the Appellant’s alleged involvement in fraud and collusion the Lower Court recorded the Respondent’s PW1 as having raised issues concerning the date of Notice of sale vis-a-vis the closeness of the actual date of sale and the fact that not enough of such notice was given thereby resulting in very low price of sale of the properties as possible indication of the perfection of some fraudulent or irregular conduct on the part of the Appellant. Apart from this, there was no evidence given before the Lower Court on record which tends to establish any acts of fraudulent activities or collusion between the Appellant and the end purchasers or even the Auctioneer. Appellant had maintained that there was neither fraud nor collusion on its part and that had there been any iota of collusion in the entire transaction, that the Respondent would have joined the end purchasers as parties to the action at the Lower Court. Besides, Appellant contended that for the sale of properties by Public Auction that took place on the 11-9-1989, to be taken before court by the Respondent more than five (5) years afterwards on grounds of fraud and collusion on 28-9-1994 in contravention of the time frame of 21 days allowed the Respondent in case there were misgivings in the transaction, is enough proof that the Respondent’s action is nothing but a mere afterthought.

Counsel referred to the case of F. B. N. vs. FASHAR (2000) 6 NWLR (PT. 573) 584 in this regard and counsel urged court to allow this Appeal.

The expression; ‘Fraud and Unfair Dealing’ in matters of this nature was defined in the Judgment of LORD SELBORNE, L. C. in EARL OF AYLESFORD vs. MORRIS (1873) 1 Ch, App.484 at pages 490 – 491 as follows;

“…Fraud and unfair dealing does not mean deceit or circumvention; it means an un-conscientious use of the power arising out of the circumstances and conditions; and when the relative position of the parties is such as prima facie to raise this presumption, the transaction cannot stand unless the person claiming the benefit of it is able to repel the presumption by contrary evidence, proving it to have been, in point of fact, fair, just and reasonable…”

In the case of VIATONU vs. ODUTAYO (1950) 19 NLR 119, it has also been held that in the event of a suspicion, the onus shifts on the mortgagee to uphold the sale as having been made bona fide. From the circumstances of this case and taking the evidence on it as a whole, I find it very difficult to agree with the Respondent that there was fraud and collusion or that the sale was not fair and conducted bona fide by the Appellant. Here is a matter, by Respondent’s own showing which took him over five (5) years to seek redress on account of a mortgage transaction in which Respondent has made strong allegations of fraud and under hand dealings against the Appellant. Appellant has dubbed this move an after-thought on the part of the Respondent and one that is aimed at stalling efforts of the Appellants from realizing the balance of her money after the auction sale and I simply cannot disagree with the Appellant on this point. The issue two is once again resolved in favour of the Appellant. Consequently the order of the Lower Court awarding the sum of three million (N3,000,000.00) Naira as damages for fraud and collusion against Appellant is hereby set aside.

ISSUE THREE (3):

“Whether there are fundamental rules of pleading and proving fraud?”

Learned Appellant’s counsel contended in connection with this issue that the Respondent failed to comply with Order 25 Rule 5 (1) of the High court (Civil Procedure) Rules, 2001 of Abia State by not pleading the particulars of fraud as prescribed therein. Learned counsel referred court to the case of FEDERAL MORTGAGE FINANCE LTD vs. RIVERS STATE POLYTECHNIC, BORI (2005) 9 NWLR (PT.930) 257 at 269 in support and as well as the case of W. A. BREWERIES vs. SAVANNAH VENTURES (2002) 5 SCNJ 269 AT 290 and urged the court to declare null and void the Lower Court’s decision on the issue.

In Response, learned Respondent’s counsel disagreed and contended that the Respondent in paragraphs 15, 16, 17,18, 19, 21, 22, 23, 24, and 25 of the Statement of Claim specifically pleaded and went ahead to prove the particulars of fraud alleged. Learned counsel further contended that there is no law that states that particulars of fraud must be set out in a tabular format and that in the paragraphs of the Respondent’s pleadings aforesaid the Respondent not only pleaded fraud but also particularized it as required. Learned counsel urged the court to resolve the issue three in favour of the Respondent dismiss this appeal and affirm the decision of the learned trial court.

By Order 25 Rule 5(1) of the High Court (Civil Procedure) Rules of Abia State 2001 in all cases in which a party pleading relies on any misrepresentation, fraud, breach of trust, willful default or undue influence and in all other cases in which particulars may be necessary, particulars with dates and items if necessary shall be stated in the pleadings. See the case of OLUFUNMISE vs. FALANA (1990) 3 NWLR (PT.136) 1, Apart from this, it is elementary rules of pleadings that fraud, being such a very serious allegation has to be specifically pleaded against an opponent otherwise no evidence can be led on such allegation and the allegation cannot be sustained by the court. See the old case of TEMAKLOE vs. BASSET TRADING CO. LTD (1940) 6 WACA 231. In short, in the case of ONAFOWOKAN vs. IDOWU & BROS. & ANOR (1969) 1 NWLR 77, it was held that “such an allegation must be pleaded with utmost particularity and distinctly proved”. The question that should be addressed here is; when in making its allegations of fraud against Appellant, whether the Respondent in this action did plead with utmost particularity as required and also proved distinctly its allegations of fraud against the Appellant? The Respondent’s Statement of Claim of 28 paragraphs is contained at pages 3 to 6 of the records of Appeal. Allegations of fraud have no doubt been made against the Appellant, but no such particulars have been pleaded as required. As it relates to the question of proof, the evidence of the Respondent’s PW1 and only witness in this case had been reproduced in the cause of this judgment. It is always one thing to make allegations and exactly another to prove these allegations. No such proof has been provided in this case.

The imputation of fraud in a civil proceeding is an allegation of the commission of a criminal offence and under section 138 of the Evidence Act 2011, proof of any such allegations shall be beyond a reasonable doubt. Same as the standard required for proof of criminal allegations in a criminal court. In the final analysis this Appeal succeeds and the judgment of the Lower Court delivered on the 20th day of December, 2004 is set aside cost assessed at N20,000.00. against Respondent.

IGNATIUS IGWE AGUBE, J.C.A.: I have had the privilege of reading the Judgment of my learned brother F. O. Oho, JCA in advance and I agree completely with his reasoning and conclusion that the Learned Trial Judge on the settled authorities of this Court and the apex Court breached the Defendant/Appellant’s right to fair hearing when he proceeded to adjourn the matter for Defence without issuance of Hearing Notices informing the Appellant of the time to defend itself. The decisions in Akinrimisi v. Maersk Nig. (2013) 3 SCNJ 269 at 273; is very instructive.

Having found out that the Appellant was not given a fair hearing before judgment was entered against it, all other issues are merely academic although those other Issues were also resolved in favour of the Appellant. I therefore also hold that the Appeal hereby succeeds and the judgment of the Lower Court set aside. I abide the order as to costs of N20,000.00 awarded against the Respondent and in favour of the Appellant.

ITA G. MBABA, J.C.A.: I have had the privilege of reading, in draft, the lead judgment by my learned brother, F. O. OHO JCA, and I agree with his reasoning and conclusions.

On the issue of breach of right of fair hearing, we have stated, severally, that where a Court has cause to foreclose a party (for failure to take due steps in a case) and adjourns the case to another date, it has a duty to issue hearing notice to the party that was not in the Court on the date of the adjournment, to intimate that party of the new date fixed for the hearing of the case. Failure to put the said party on notice and give him opportunity to know of further development in the case, for his possible participation in the case is a fundamental breach at the root of fair trial of the suit. See the case of Chamption Breweries Plc vs. Speciality Link Ltd and Anor (2014) LPELR – 29621 CA, where it was held:

“Even if it was very material for the Court to waive the requirement of proper service of the Appellant with the notice of hearing on 9/6/03 (and there was no reason to do so) ..,. And thereby discharge the FW2 … to punish the Defendants for their dereliction, there was no imminent reason to close the case of the Defendants at the same time and proceed to take address from the Plaintiff. The case should have been adjourned for the Defendants to open their defence and hearing notice should have been served on them to come to Court for that purpose. Appellant had a right to be heard”.

See also Ceecky Traders Ltd. vs General Motors Co. Ltd. (1992) 2 NWLR (Pt.222) 132 at 148, where the supreme court said:

“… It is only right and proper that before a party’s claim in Court is dismissed, the party should be given opportunity of being heard”.

In the case of Chevron Nig, Ltd vs. Osigwe (2014) LPELR – 23534 CA, was held:

“Even in a normal situation, where the defence has been served with the hearing notice and they failed to honour it, and the Court is compelled to hear the case of the plaintiff, the ideal thing to do (after the hearing) is to adjourn the case and issue hearing notice on the (difference to come and/or defend the suit the Plaintiff had called the last witness), The Court cannot jump the procedure and adjourn the case for adoption of address by the plaintiff, excluding the defence, as if it had no case. In Law, proper service of process and notice of hearing of a course is what vests jurisdiction on a Court to hear and determine a matter for or against the parties in contention. See the case of UBA Plc Vs Effiong (2011) 1 LPELR – 8934 (CA); Mark Vs Eke (2004) 5 NWLR (pt.865) 54 and Mohahunsi Vs Kwara Investment & Property Dev. Co. Ltd (2011) LPELR – 9105 (CA); SPDC Nig. Ltd. Vs Esowe (2007) LPELR – 8670 CA; (2008) 4 NWLR (Pt.1076) 72”.

Within this and other reasons in the lead judgment, I too allow the appeal and abide by the consequential orders in the lead judgment.

Appearances

D. O. Uruakpa Esq.For Appellant

AND

Ogbonna C. Ajuzie Esq.For Respondent