CORAM

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ONYEKACHI AJA OTISI JCA

ABUBAKAR SADIQ UMAR JCA

ABDULLAHI MAHMUD BAYERO JCA

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PARTIES

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1. GENESYS INTERNATIONAL LTD

2. ENGR. YUSUF A. ADEDIGBA

APPELLANTS 

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NIGERIA DEPOSIT INSURANCE CORPORATION

RESPONDENTS 

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AREA(S) OF LAW

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APPEAL, BANKING, CONTRACT, EVIDENCE, JUDGMENT, PRACTICE AND PROCEDURE

 

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SUMMARY OF FACTS

Trade Bank Plc., as the Claimant, commenced this suit on February 20th, 2003, praying against the Defendants/Appellants jointly and severally for judgment in the sum of N27,334,245.89 and 30% interest thereon. This amount represented the outstanding debit balance payable as of November 25th, 2002, to the Claimant on account of a finance facility granted to the 1st Defendant/Appellant and guaranteed by the 2nd Defendant/Appellant, as well as recovery expenses and fees totaling N2,850,000. Following the liquidation of Trade Bank Plc., the present Respondent, as the liquidator, was substituted for Trade Bank Plc. as the Claimant in the suit by an order of the lower court on December 4th, 2006.

Judgment was delivered on January 24th, 2008, wherein the trial court granted all the Respondent’s claims.

The Appellants, by their motion on notice dated April 18th, 2008, prayed the lower court for sundry reliefs, principally for an order setting aside the judgment delivered on January 24th, 2008. The Respondent, via their counter-affidavit deposed on October 3rd, 2008, opposed the application. In a considered ruling delivered on May 22nd, 2009, the lower court dismissed the application.

Dissatisfied with the ruling, the Appellants filed this appeal.

 

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HELD

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Appeal dismissed

 

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ISSUES

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1. Whether having regards to the originating notice of appeal dated the 24th April,2009, filed by the Appellants and subsequent amendment thereto, this appeal is an incompetent appeal and liable to be struck out (Preliminary Objection)?

2. Whether the trial court was right or otherwise justified in law in refusing the Appellant’s application to set aside its judgment, entered against the Appellant on the 24 th January, 2008?

 

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RATIONES DECIDENDI

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PRELIMINARY OBJECTION – CONDUCT OF COURTS IN RELATION TO PRELIMINARY OBJECTIONS

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The law is firmly settled that preliminary objection in an appeal must first be disposed of before the substantive appeal so that the court will not labour in vain if at the end of the day the appeal is found to be incompetent. See ONYEMA & ORS vs. EGBUCHULAM (1996) 5 NWLR (PT. 448) 224; ACHONU vs. OKUWOBI (2017) LPELR-42102(SC) (PP. 4-5 PARAS. E). – Per A. S. Umar, JCA

 

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REPLY BRIEF – WHERE A REPLY BRIEF IS NOT FILED IN RESPONSE TO A PRELIMINARY OBJECTION

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Although the Appellants’ did not file any Reply Brief in response to this preliminary issue of competence raised against the Appeal, this however does not translate to automatic success of the preliminary objection as the preliminary objection will still be considered on its competence and merit. – Per A. S. Umar, JCA

 

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PRELIMINARY OBJECTION – HOW A PRELIMINARY OBJECTION CAN BE RAISED IN AN APPEAL

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The law has outlined the procedure for raising a preliminary objection in an appeal. A preliminary objection, as the name suggests, deals with issues before the actual trial or considering the appeal on its merit. The main goal of a Respondent raising a preliminary objection is to terminate the appeal at an early stage.

Order 10 Rule 1 of the Court of Appeal Rules 2021 provides guidance on how to raise a preliminary objection in the Court of Appeal. This section stipulates:

“A Respondent intending to rely upon a preliminary objection to the hearing of the appeal shall give the Appellant three clear days’ notice thereof before the hearing, setting out the grounds of objection, and shall file such notice together with ten hard/physical copies and an electronic copy thereof with the Registry within the same time. The preliminary objection shall be argued in the respondent’s brief of argument.”

To comply with this rule, the Respondent may file a separate formal notice of preliminary objection. They can raise the objection in the brief of argument or choose to adopt both options. However, it is essential to seek the court’s permission to move the objection before the hearing of the appeal; otherwise, the objection is considered abandoned. This requirement is highlighted in the case law, such as Tiza & Anor vs. Begha (2005) 15 NWLR (949) 616; (2005) 5 SC (Pt. II) 1 at 7. In summary, while notice of preliminary objection can be included in the Respondent’s brief, the party filing it must request the Court’s leave to move the objection at the oral hearing of the appeal before proceeding with the main appeal.– Per A. S. Umar, JCA

 

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ISSUES – WHEN ISSUES DO NOT ARISE FROM GROUNDS OF APPEAL

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The law dictates that an issue not stemming from a ground of appeal is incompetent, as established in Lalapu vs. C.O.P (2019) LPELR-47814 (SC). The customary practice is for a preliminary objection in a Brief to be raised conspicuously, with a title in the name and style of “preliminary objection.” Subsequently, the grounds and arguments for the objection are presented and argued in the Brief. However, during the hearing of the appeal, counsel failed to notify the Court of a preliminary objection to be argued before the appeal hearing. The deficiency in the preliminary objection is significant and cannot be overlooked. This principle is supported by various cases, including MBAKWE vs. OBAKUNLE & ANOR (2022) LPELR 57257 CA (PP. 7-8 PARAS. A-A), NWAMBA vs. AJOBIEWE (2020) LPELR 50431 CA (Pp. 11-16 paras. A), AKANO vs. FBN PLC & ANOR (2003) LPELR-7289(CA) (PP. 9-11 PARAS F), NSIRIM vs. NSIRIM (1990) 3 NWLR (PT. 138) 285, OKOLO vs. UNION BANK OF NIGERIA (1988) 2 NWLR (PT. 539) 618, AREWA TEXTILES PLC. vs. ABDULLAHI & BROTHERS OWSAWA LTD (1998) 6 NWLR (PT. 554) 508, AJIDE vs. KELANI (1985) 3 NWLR (PT. 12) 248.– Per A. S. Umar, JCA

 

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JUDGMENT – DISTINCTION BETWEEN DEFAULT JUDGMENT AND JUDGMENT ON THE MERIT – MEANING OF DEFAULT JUDGMENT AND JUDGMENT ON THE MERIT

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In MOHAMMED vs. HUSSEINI (1998) LPELR-1896(SC) (PP. 55 PARAS. A), the Apex Court delineated between a judgment on the merits and a default judgment: “A judgment on the merits is one grounded on legal rights, distinct from mere matters of procedure or jurisdiction. It stems from a decision rendered based on the evidence presented by the parties to establish or refute the issues in dispute between them. Generally, a judgment solely stemming from procedural errors isn’t deemed a judgment on the merits. A judgment on the merits is thus one reached after scrutinizing the essential issues of the case—substantive rights raised by the action—versus mere procedural matters.”

RHODES-VIVOUR, J.C.A (As he then was) in NIGERIAN UNIVERSAL BANK LTD & ORS vs. SAMBA PETROLEUM CO. LTD (2006) LPELR-5974(CA) (PP. 25-26 PARAS. C) affirmed: “A judgment following a standard trial, i.e., after evidence and arguments are presented on factual and legal issues arising from the evidence, constitutes a judgment on the merits. Conversely, default judgments may stem from non-appearance or defense defaults. Such judgments don’t address the merits since they’re obtained due to the defendant’s failure to adhere to procedural rules.” See also UTC (NIG) LTD vs. PAMOTEI (1989) 2 NWLR (PT 103) 244 @ PP. 282-283; MACWAN PAULS LTD vs. LABAYCO VENTURES LTD & ORS (2021) LPELR-52951(CA) (PP. 19-21 PARAS. F); EVBUEGBON vs. AIWERIOBA & ANOR (PP. 23-26 PARAS. F); NYAMATAI ENTERPRISES LTD vs. NDIC (2006) All FWLR (Pt. 293) Pg. 356. – Per A. S. Umar, JCA

 

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JUDGMENT – WHAT CONSTITUTES JUDGMENT ON THE MERIT

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The position of the law is that when a party is properly served with the processes and notified of the hearing date, and the opposing party proceeds to present evidence in support of its case, any resulting judgment is considered a judgment on the merits, regardless of whether the other party participates in the trial or not.

This scenario contrasts with cases where no evidence is presented, and judgment is rendered in favor of the claimant due to the defendant’s failure to file a defense. – Per A. S. Umar, JCA

 

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JUDGMENT – JUDGMENT ON THE MERIT IRRESPECTIVE OF COUNSEL’S INDOLENCE

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In my considered view, the principle of law that a litigant should not suffer for the ‘sin’ of their counsel should not serve as an impenetrable shield for protecting an inactive litigant.

In STEMCO LTD vs. INYANG (2018) LPELR-44303(CA) (PP. 6-11 PARAS. B), a case with circumstances akin to the present one, the Appellant’s former counsel failed to file a statement of defense or participate in the court proceedings. Consequently, judgment was handed down on March 24, 2016, in a case filed in 2014, without any representation for the Appellant. Despite inquiries, the counsel assured the Appellant that everything was legally sound. The Appellant only learned of the judgment when its bank, First Bank Plc, informed it during the execution of the judgment through Garnishee Proceedings. This court deemed the judgment in that case to be on the merits. – Per A. S. Umar, JCA

 

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FAIR HEARING – WHAT CONSTITUTES FAIR HEARING

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“Breach of fair-hearing is the mantra of all sinking litigants. It is like a life jacket which they readily put on in the vain hope that it will keep them afloat at all times, forgetting that fair-hearing is fair-hearing to all parties.”

“The Supreme Court, in DARMA vs. ECOBANK NIG. LTD (2017) 2 S.C (Pt. 1) Pg. 51 at 74, per M.D Mohammed JSC, had this to say:

“The Constitution and the law only require that an opportunity be given to a party to present their case before a decision is taken against them. It does not allow the party the luxury of holding their adversary and the Court to ransom, to willy-nilly wait for that party to come to Court when they please to make out their case. Per A. S. Umar, JCA

 

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DEFAULT JUDGMENT – FACTORS TO BE CONSIDERED IN SETTING ASIDE A DEFAULT JUDGMENT

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“The Apex Court in WILLIAMS & ORS vs. HOPE RISING VOLUNTARY FUNDS SOCIETY (1982) LPELR-3484(SC) (PP. 10-11 PARAS. B-B) laid down the factors that a court considering an application to set aside a default judgment should take into account when IDIGBE, J.S.C said thus:

‘When, however, the application before the Court is for it to set aside its own judgment given in the absence of one of the parties before it, in order to give the other party opportunity of being heard different considerations apply. These were fully set out by me in Idam Ugwu and Others vs. Nwaji Aba and Others [1961] All NLR 438 [see also Adebayo Doherty vs. Ade Doherty [1964] NMLR 144 at 145]. Among other things, the Court must consider (1) the reasons for the applicants’ failure to appear at the hearing or trial of the case in which judgment was given in his absence, (2) whether there has been undue delay in making the application to set aside the judgment so as to prejudice the party in whose favour the judgment subsists, (3) whether the latter party (i.e. in whose favour the judgment subsists) would be prejudiced or embarrassed upon an order for rehearing of the suit being made, so as to render such a course inequitable, and (4) whether the applicants’ case is manifestly unsupportable; and I respectfully, agree with the views expressed by my learned brother, my lord, Bello S.P.J. (as he then was) in Momoh vs. Gulf Insurance Corporation [1975] 1 NNLR 184 at 186 that in addition to the foregoing factors the Court being asked to exercise its discretion to set aside its own judgment must also be satisfied that the applicants’ conduct throughout the proceedings i.e. ‘from the service of the writ upon him to the date of judgment’ has been such as to make his application worthy of a sympathetic consideration.’

From the foregoing dictum of the law lord, it is abundantly clear that a consideration of an application to set aside a default judgment is a call on the court to exercise its discretion in the Applicant’s favour. When it comes to the exercise of discretion, no case is an authority for the other as each case will be treated on its peculiar facts. It is trite law that when a matter involves the exercise of discretion of the trial court, the appellate court will not interfere simply because it would have exercised the discretion differently.

The appellate court will only interfere with the exercise of discretion by a trial court if it is shown that:

(i) The discretion has been wrongly exercised;

(ii) The exercise of discretion was tainted with some illegality or substantial irregularity;

(iii) It is in the interest of justice. See HAYATUDEEN vs. GAMBO & ORS (2015) LPELR-40741(CA) (PP.15-18 PARAS. E), NIGERIAN LABORATORY CORPORATIONS vs. PACIFIC MERCHANT BANK LTD (2012) 15 NWLR (PT. 1324) 505, ANACHEBE vs. LJEOMA (2014) 14 NWLR (PT 1426) 168.’ – Per A. S. Umar, JCA”

 

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FAIR HEARING – MEANING OF FAIR HEARING

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“I think it is important to emphasize that, fundamentally, fair hearing implies that the parties in the litigation have been given equal opportunity to be heard before a decision is reached by the Court on the matter being adjudicated before it. Where parties have been given an opportunity to be heard, they cannot be heard to complain of breach of fair hearing. This principle has been affirmed in various cases, including:

INEC v. Musa (2003) LPELR-24927 (SC) Agbabiaka v. First Bank (2019) LPELR-48125 (SC) Carnation Registrars Ltd v. President of the NICN & Anor (2023) LPELR-60102 (SC) – Per O. A. Otisi, JCA”

 

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CASES CITED

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NIL

 

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STATUTES REFERRED TO

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1. Lagos State (Civil Procedure) Rules 2004

 

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