BANK OF AGRICULTURE LTD. V. ALHAJI TAJUDEEN ODUOLA & ORS
April 19, 2025GEORGE TOZHEWO & ORS V. WINNING CLAUSE LIMITED & ANOR
April 19, 2025Legalpedia Citation: (2025-02) Legalpedia 38521 (CA)
In the Court of Appeal
IBADAN
Mon Feb 17, 2025
Suit Number: CA/IB/233/2020
CORAM
Gabriel Omoniyi kolawole Justice Court of Appeal
Binta Fatima zubairu Justice Court of Appeal
Uwabunkeonye Onwosi Justice Court of Appeal
PARTIES
1. AYLIU QUARRY ASPHALT LIMITED
2. MR. ROBERT ABIMBOLA AYODELE ADIGUN
3. MR. QIN LIU
4. XINGDA TECHNICAL PLASTIC COMPANY LTD.
5. ARCH. GBADEGESIN AYANDARE AKANJI
APPELLANTS
ASSET MANAGEMENT CORPORATION OF NIGERIA
RESPONDENTS
AREA(S) OF LAW
BANKING LAW, DEBT RECOVERY, CONTRACT LAW, MORTGAGE LAW, CORPORATE LAW, ADMINISTRATIVE LAW, CONSTITUTIONAL LAW, PRACTICE AND PROCEDURE
SUMMARY OF FACTS
This case revolves around a loan facility granted to the 1st Appellant (Ayliu Quarry Asphalt Limited) by Ecobank Plc. On January 29, 2008, the 1st Appellant obtained a loan of N153,767,413.17 from Ecobank, secured by the 2nd Appellant’s property located at Plot 7, Block VIII, Orita Bashorun Estate, Ibadan, along with the 4th Appellant’s stock including plants, machinery, raw materials, fittings, electronic gadgets, and finished products located at TCTC yard Eleyele, Ibadan.
In 2010, the 1st Appellant obtained another loan through the Bank of Industry (BOI) into its Ecobank account, totaling N291,001,813.12, which was compounded with the earlier loan. Both loans remained unpaid by the Appellants. The debts were subsequently taken over by the Respondent (Asset Management Corporation of Nigeria – AMCON) from Ecobank through a loan purchase agreement dated April 6, 2011.
After AMCON took over the loans, Ecobank informed the 1st Appellant of its indebtedness to AMCON and demanded repayment. The Appellants made a partial payment of N78,000,000 to AMCON but failed to pay the outstanding balance. As a result, AMCON filed a suit against the Appellants, claiming the sum of N508,566,789.94 (including accrued interest at 15% per annum) as of March 31, 2018, along with various orders for foreclosure and sale of the mortgaged properties.
The Federal High Court granted all the reliefs sought by AMCON. Dissatisfied with this judgment, the Appellants filed this appeal, arguing among other things that they only owed N27,811,628.34 as of May 10, 2011, when AMCON took over the debt, and not the much larger sum claimed by AMCON.
HELD
1. The appeal was dismissed as lacking in merit.
2. The judgment of the Federal High Court, Ibadan delivered by Hon. Justice J.O. Abdulmalik on June 10, 2020, was affirmed.
3. The Court of Appeal adjusted the post-judgment interest from 15% to 10%, striking out the excess 5%.
4. No costs were awarded.
ISSUES
1. Whether the trial Court was right in rejecting the amount of N27,811,628.34 agreed upon by both parties as the debt owed to Ecobank by the 1st Appellant?
2. Whether the lower Court was right in giving judgment to the Respondent based on an indebtedness to Bank of Industry which was neither pleaded nor proved in evidence?
3. Whether the fault found in the Defendants’ case by the lower Court ipso facto entitled the Plaintiff to judgment without the Court accepting evidence which supports the Plaintiff’s case?
4. Whether the Plaintiff provided sufficient pleading and evidence in proof of its case as required by the AMCON Act?
5. Whether it was a misdirection for the lower Court to uphold the Respondent’s claim based on a take-over of toxic debt when the account had been credited and closed?
6. Whether it was lawful and proper for the lower Court to award pre-judgment interest without evidence and post-judgment interest above 10%?
7. Whether the trial judge erred in dismissing the Appellant’s counterclaim for N78,800,000?
8. Whether the trial judge erred by granting additional relief for foreclosure and sale of properties after awarding the debt amount plus interest?
RATIONES DECIDENDI
STATUTORY POWERS OF AMCON — AUTHORITY TO TAKE OVER NON-PERFORMING LOANS
“The Respondent is an establishment of the National Assembly of Federal Republic of Nigeria in the year 2010 with the responsibility of efficiently resolving the non-performing loan assets of banks in Nigeria. The Respondent’s functions are clearly stated in Section 5 (a) to (g) in particular Section (5) (a) –(c) is relevant and l hereby reproduced same: ‘5 the functions of the corporation shall be to: (a) Acquire eligible bank assets from eligible financial institution in accordance with the provision of this Act. (b) Purchase or otherwise invest in eligible equities on such terms and conditions as the corporation, with the approval of the Board of the Central Bank of Nigeria may deem fit. (c) Hold, manage realize and dispose of eligible Bank assets (including the collection of interest, principal and capital due and the taking over of collateral securing such assets) in accordance with the provision of this Act.'” – Per BINTA FATIMA ZUBAIRU, J.C.A.
POWERS OF AMCON TO CHARGE INTEREST — INTERPRETATION OF SECTION 5(C) OF THE AMCON ACT
“Since it was the agreement between the parties that the eligible bank (Eco Bank) was to charge interest on the loan, it is therefore lawful for the Respondent to continue to charge interest as it was agreed by the parties.” – Per BINTA FATIMA ZUBAIRU, J.C.A.
BURDEN OF PROOF IN DEBT RECOVERY — PARTY DISPUTING AMOUNT OF DEBT BEARS THE BURDEN
“Having admitted owing the Respondent an amount, the Respondent had no duty proving the fact of debt any longer. Counsel submitted further that since it was the Appellants who disputed the amount claimed by the Respondent as Plaintiff at the lower Court, it was the Appellants’ duty to establish the amount they had claimed for the law is that the duty of proof rests on the party whose claim will fail if there was no evidence on either side.” – Per BINTA FATIMA ZUBAIRU, J.C.A.
INTEREST ON LOANS — ENFORCEABILITY OF AGREED INTEREST RATES
“In the instant case, the agreement between the parties, 1st Appellant and Eco Bank as evidence by Exhibits B, C, D and DD1, the parties have agreed on payment of interest at various rates of 25% per annum subject to review from time to time by the Bank in line with prevailing money market condition. See Exhibit C dated 4th March 2009. Also an interest of 18% per annum subject to renew from time to time by the Bank in line with the prevailing money market condition. See Exhibit D at page 2 dated 1st December, 2010. Since the parties have agreed on terms of pre judgment interest, the trial judge was right to have awarded same.” – Per BINTA FATIMA ZUBAIRU, J.C.A.
PARTIES BOUND BY CONTRACTUAL TERMS — COURT’S NON-INTERFERENCE WITH CONTRACTUAL INTEREST RATES
“More so, it is an established principle of law that parties are bound by their agreement. Since parties have expressly agreed on terms of interest, it is not the business of the Court to interfere vary, reduce or increase the terms of agreement between the parties as parties are bound by their terms of agreement.” – Per BINTA FATIMA ZUBAIRU, J.C.A.
FORECLOSURE ORDERS — CONDITIONS FOR GRANTING FORECLOSURE OF MORTGAGED PROPERTIES
“It is the trite law that parties are bound by their pleadings and no party is allowed to make a case different from what it set out in its pleadings.” – Per BINTA FATIMA ZUBAIRU, J.C.A.
JUDICIAL NOTICE OF STATUTES — RECOGNITION OF AMCON’S STATUTORY POWERS
“Therefore, all the submissions, proffered by the learned Appellant’s counsel with all due respect is a misconception of the law. The law enjoins the Court to take Judicial notice of laws passed by the National or state Assembly. l refer to Section 122 (1) 2(a) (b) of the Evidence Act, 2011: ‘122 (1) No fact of which the Court shall take judicial notice under this section needs to be proved (2) The Court shall take Judicial Notice of:- (a) ……. (b) all public Acts or laws passed or to be passed by the National Assembly or a state House of Assembly as the case may be, and all subsidiary legislation made under them and all local and personal Acts or laws directed by the National Assembly or a state House of Assembly to be Judicially noticed.'” – Per BINTA FATIMA ZUBAIRU, J.C.A.
BURDEN OF PROOF IN CIVIL CASES — STANDARD OF PROOF ON BALANCE OF PROBABILITIES
“It was the contention of the counsel that the law is trite and firmly established that in civil cases, the standard of proof required to establish a claim by a party is on the balance of probabilities and not beyond reasonable doubt.” – Per BINTA FATIMA ZUBAIRU, J.C.A.
ARTIES BOUND BY PLEADINGS — PROHIBITION AGAINST DEPARTING FROM PLEADED CASE
“It is the trite law that parties are bound by their pleadings and no party is allowed to make a case different from what it set out in its pleadings.” – Per BINTA FATIMA ZUBAIRU, J.C.A.
POST-JUDGMENT INTEREST — DISCRETIONARY NATURE OF AWARD
“On the issue of award of post-judgment interest which Appellant’s counsel described as unlawful, I refer to the authorities cited above where it was held that the award of post judgment interest is guided by law and is discretionary. The Appellants have cited the statutory provisions guiding an award of post judgment interest. Nonetheless, since the award is discretionary which both the trial Court and Court of appeal can award even without claiming, I will in the interest of justice award a post–judgment interest of 10%. The excess of 5% is hereby struck out.” – Per BINTA FATIMA ZUBAIRU, J.C.A.
ALTERNATIVE CLAIMS — GRANTING MAIN CLAIM PRECLUDES CONSIDERATION OF ALTERNATIVES
“It is trite law that where the claim of party succeeds there will be no need by the Court to consider any alternative claim.” – Per BINTA FATIMA ZUBAIRU, J.C.A.
COUNTERCLAIM AS AN INDEPENDENT ACTION — BURDEN OF PROOF
“It a cardinal principle of law is that a counter-claim is a distinct, separate and independent claim and the claimant bears the burden of proving his claim on the strength of his own case.” – Per BINTA FATIMA ZUBAIRU, J.C.A.
LIABILITY OF GUARANTORS — DISTINCT NATURE OF GUARANTOR’S CONTRACT
“It is the position of law that a guarantor is bound by his own contract. See CHAMI VS UBA PLC (2010) 6 NWLR (PT.1191) 474, where the Supreme Court stated: ‘it is settled law that where a person personally guarantees the liability of a third party by entering into a contract of guarantee or surety-ship, a distinct and separate contract from the principal debtor’s is thereby created between the guarantor and the creditor. The contract of guarantee so created can be enforced against the guarantor directly or indirectly or independently without the necessity of joining the principal debtor in the proceedings to enforce same.'” – “It is the position of law that a guarantor is bound by his own contract. See CHAMI VS UBA PLC (2010) 6 NWLR (PT.1191) 474, where the Supreme Court stated: ‘it is settled law that where a person personally guarantees the liability of a third party by entering into a contract of guarantee or surety-ship, a distinct and separate contract from the principal debtor’s is thereby created between the guarantor and the creditor. The contract of guarantee so created can be enforced against the guarantor directly or indirectly or independently without the necessity of joining the principal debtor in the proceedings to enforce same.'” – Per BINTA FATIMA ZUBAIRU, J.C.A.
CASES CITED
STATUTES REFERRED TO
• Asset Management Corporation of Nigeria (AMCON) Act, 2010
• Banking and Other Financial Institutions Act (BOFIA)
• Constitution of the Federal Republic of Nigeria, 1999 (as amended)
• Rules of the Federal High Court
• Companies and Allied Matters Act (CAMA)
