Legalpedia Citation: (2023-04) Legalpedia 50366 (CA)

In the Court of Appeal

LAGOS JUDICIAL DIVISION

Mon Apr 3, 2023

Suit Number: CA/L/35/2018

CORAM

MOORE ASEIMO ABRAHAM ADUMEIN JCA

JAMES GAMBO ABUNDAGA JCA

MUHAMMAD IBRAHIM SIRAJO JCA

PARTIES

1. JAMES ONYEMENAM

APPELLANTS

IMPERIAL HOMES MORTGAGE BANK LTD

RESPONDENTS

AREA(S) OF LAW

APPEAL, BANKING LAW, CONTRACT, EVIDENCE, INSURANCE, PRACTICE AND PROCEDURE, PROPERTY LAW AND CONVEYANCE

SUMMARY OF FACTS

The Respondent as Claimant claimed that by a letter of offer dated June 24th, 2010, it availed Mr. James Onyemenam, (the Appellant), a Forty Million Naira (N40,000,000.00) facility to finance the purchase of a 4-Bedroom Townhouse in Lekki Phase I valued at N60,000,000.00. The facility was secured by a Deed of Legal Mortgage over the financed property created by the Defendant in favour of the Claimant. Bridgeways DPG Limited, in which the Appellant is the CEO, gave both a corporate guarantee and corporate undertaking by which it accepted liability in the event of the Appellant’s default. The Appellant made an equity contribution of N20,000,000.00. The Appellant and the Guarantor, Bridgeways DPG Limited, failed to pay and/or satisfy the Appellant’s obligations under the facility and the mortgage deed, despite repeated demands by the Respondent.

The Appellant’ claim on the other hand, is that contrary to the Respondent’s claim, the Appellant’s title and Deed of Legal Mortgage over the property was not duly perfected due to the Respondent’s negligence and delay. He contended that at the time he applied to the Respondent for the facility, Respondent conducted a search on the property and came up with a report that the property was not under any encumbrance. That it was on the strength of the Respondent’s representation that he invested N20,000.000 (Twenty Million Naira) as counterpart funding to purchase the property and fulfilled all the conditions precedent to the drawdown of the facility as stated in the facility contract, by making all the required upfront payments to the Respondent. It was the further case of the Appellant that consequent upon the failure to perfect his title to the property and the legal mortgage, due to the negligence of the Respondent and its Agents, the Respondent has no legal title to pass to the Appellant when he concludes the repayment of the facility because of the encumbrance on the property, thereby defeating the whole essence of the transaction.

The lower Court entered judgment for the Respondent in the principal sum and interest claimed. The Court dismissed the Respondent’s claim for N5,000,000.00 cost, as well as the entire Counter Claim of the Appellant.

This appellant dissatisfied challenges the judgment hence the instant appeal.

HELD

Appeal dismissed

ISSUES

Ø Whether the trial Court misdirected itself when it found that the parties perfected Title to the Property and the Legal Mortgage and thereby fulfilled their obligations under the Contract?

Ø Whether the trial Court misdirected itself when it held that the Claimant/Respondent is entitled to the sum of N18,099,413.66 being the sum amounting to the difference on the Claimant/Respondent’s Claim of N47,451,661.97 on the premise that the Defendant/Appellant failed to prove his contention that a total sum of N8,714,911.26 was overcharged on the Defendant/Appellant’s overdraft and loan accounts?

Ø Whether the trial Court erred in law when it found that the Claimant/Respondent was not negligent in the handling of the transaction, subject matter of this Appeal?

Ø Whether the trial Court erred in law when it held that the Defendant/Appellant did not prove his counterclaim by credible evidence?

RATIONES DECIDENDI

PROLIFERATION OF ISSUES – MEANING OF PROLIFERATION OF ISSUES AND THE CONDUCT OF THE COURTS

…on the face of the four issues formulated by the Appellant, it is glaringly clear that issues 2 & 3 constitute what the law refers to as proliferation of issues. It is a proliferation of issues to raise more than one issue for determination from a ground of appeal.

… The law is trite that an issue may be formulated from one or several grounds of appeal but two issues cannot be formulated from a single or the same ground of appeal. That is to say, while an issue for determination may arise from one or a combination of grounds of appeal, one ground of appeal cannot birth or procreate more than one issue. No party shall be allowed to proliferate issues. See Musa Ibrahim vs. The State (2017) LPELR-42261 (SC); Nwankwo vs. Yar’adua (2010) LPELR-2109 (SC); Yisi Nigeria Ltd vs. Trade Bank Plc (2013) LPELR-20087 (SC); Oko & Ors vs. A.G. Ebonyi State (2021) LPELR-54988 (SC); Nduul vs. Wayo (2018) LPELR-45151 (SC); Yusuf Musa vs. The State (2022) LPELR-58849 (SC); Akin Oladipupo vs. FRN (2021) LPELR-58371 (SC); Ikuforiji vs. FRN (2018) LPELR-43884 (SC); National Unity Party (NUP) vs. INEC (2021) LPELR-58407 (SC).

Having distilled issue 1 from grounds 1, 3 and 6, those three grounds of appeal are no longer available to the Appellant to formulate any other issue therefrom. It will tantamount to dereliction of judicial duty for this Court to shut its eyes to this brazen disregard to the settled principle of law by the Appellant. Having found the Appellant guilty of involvement in the undesirable and at times unpardonable practice of proliferation of issues, what then is the consequence? Some authorities, such as Nwankwo vs. Yar’adua (supra), per Adekeye, JSC @ 75; Roe Ltd vs. University of Nigeria (2018) LPELR-43855 (SC), per Galinje, JSC @ 6-7; NUP vs. INEC (supra), Jauro, JSC @ 8-9, are of the view that the proliferated issues should be discountenanced because they are incompetent and liable to be struck out. Other authorities, like Ikuforiji vs. FRN (supra), per Eko, JSC., and Akin Oladipupo vs. FRN (supra), per Aboki, JSC, expressed the view that the Court can streamline and reframe the proliferated issues in the interest of justice. The latest of all the cases I came across on what the appellate Court should do when issues for determination are proliferated is Ila Enterprises Ltd and Anor vs. Umar Ali & Co. Nig. Ltd (2022) LPELR-58067 (SC), where Saulawa, JSC, held:

“Undoubtedly, the Court is cloaked with an unfettered power to suo motu reformulate an issue nominated by the parties for determination. Where for instance, the issues formulated by the parties evidently border on proliferation or clumsiness, the Court may reformulate such an issue or issues in the best interest of accuracy, clarity and brevity.” – Per M. I. Sirajo, JCA

CONTRACT – DUTY OF A COURT WHEN PARTIES HAVE REDUCED THE TERMS OF THE CONTRACT IN WRITING

The duty of a Court where the parties have reduced the terms of the contract between them in writing is to give effect and life to the terms as agreed by parties. The Court does this by giving a literal interpretation to the words used in drafting the contract. Neither the Court nor the parties can legally read into the contract terms that are not expressly incorporated into therein by the parties. The parties are bound by the terms and conditions contained in their contract; Race Auto Supply Company Ltd & Ors vs. Akib (2006) LPELR-2937 (SC); African International Bank Ltd vs. Integrated Dimensional Systems Ltd & Ors (2012) LPELR- 9710 (SC); A.B.C. Transport Co. Ltd vs. Omotoye (2019) LPELR-47829 (SC); Fidelity Bank vs. Marcity Chemical Industries Ltd & Ors (2022) LPELR-56866 (SC). The law is also trite that where the terms of a contract are clearly expressed in a written document or documents, the Court cannot go outside those terms to ascertain the intention of the parties; Access Bank Plc vs. NSITF (2022) LPELR-57817; Mekwunye vs. Imoukhuede (2019) LPELR-48996 (SC). – Per M. I. Sirajo, JCA

PERFECTION OF MORTGAGE – ON DUTY TO PERFECT A MORTGAGE

In the circumstance, the finding of the lower Court that the parties have perfected title to the property, when in fact the title has not been perfected, is of no consequence on the rights and obligations of the parties under the contract. That wrong finding has no utilitarian value to either of the parties because, as shown above, there is no duty under the contract for the Respondent to perfect the mortgage and the title. But assuming there is such a duty on the Respondent, the cart cannot be put before the horse. The Deed of sublease, upon which the mortgage and the Appellant’s title to the property are predicated, has also not been perfected. The perfection of the sublease takes precedence over the legal mortgage, and unless it is perfected, there is no way the legal mortgage and the title can be perfected. – Per M. I. Sirajo, JCA

ADMISSION – WHAT IS ADMITTED NEED NO PROOF

By that Exhibit and his response under cross-examination, DW2 said after meeting with the Respondent the Appellant admitted owing the Respondent the sum of N29,352,248.31. The lower Court entered judgment for the Respondent in the admitted sum. The law is trite that what is admitted require no proof. See Jegede & Anor vs. INEC & Ors (2021) LPELR-55481 (SC); O.A.N. Overseas Agency (Nig) Ltd vs. Bronwen Energy Trading Ltd (2022) LPELR-57306.

The Judgment of the lower Court in respect of the admitted sum is therefore unassailable in law. – Per M. I. Sirajo, JCA

 

EVIDENCE – WHEN EVIDENCE OF WHICH JUDICIAL NOTICE HAS NOT BEEN TAKEN IS NOT PRESENTED BEFORE THE COURT

The CBN Monetary Policies, Circulars, Guidelines, and/or Regulations allegedly breached by the Respondent, which led to the alleged overcharge of the Appellant’s account and upon which reliance was placed by the Appellant to prove the alleged overcharge, not being subsidiary legislations upon which judicial notice can be taken, ought to be, but were not put in evidence by the Appellant to avail the lower Court the benefit of reading and applying them. In the circumstance, the lower Court was right in invoking the presumption of withholding evidence against the Appellant and discountenancing the evidence of DW2 who claimed that the Appellant’s account was overcharged, for want of evidence. – Per M. I. Sirajo, JCA

NEGLIGENCE – THE INGREDIENTS OF THE TORT OF NEGLIGENCE

For there to exist the tort of negligence in the relationship between parties, the first ingredient to establish is the existence of duty care. Where such duty is not shown to exist, there can be no negligence. The ingredients of the tort of negligence are (a) a legal duty owed to a party by the other to exercise care within the scope of his duty; (b) the breach of the said duty; and (c) the consequential damage or injury caused to the party complaining. For a party to succeed in a claim founded on negligence, these three ingredients must be proved on the preponderance of evidence. The most important of the ingredients is the proof of duty of care, which can be created by contract or trust or exist in tort. See NEPA vs. Auwal (2022) LPELR-59473 (SC); I.M.N.L. vs. Nwachukwu (2004) LPELR-1526 (SC). – Per M. I. Sirajo, JCA

 

COUNTERCLAIM – DUTY OF PARTY TO PROVE COUNTERCLAIM

A Counterclaim is a distinct claim which must be separately proved by the Counterclaimant. In determining this issue, one needs to go back to the Counterclaim and the pleading before considering the evidence led in proof. – Per M. I. Sirajo, JCA

SPECIAL DAMAGES – SPECIAL DAMAGES MUST BE SPECIFICALLY PROOVED

The law on claim for special damages is that it must be specifically pleaded and strictly proved. Where it is not so, recovery of the same will not be granted. Every item contained in the claim for special damages must be specially proved, and such proof must be characterized by testimony that ties each item with the evidence led. See Ajigbotosho vs. Reynolds Construction Company Ltd (2018) LPELR-44774 (SC). – Per M. I. Sirajo, JCA

 

 

 

COUNTERCLAIM – NATURE OF COUNTERCLAIM

It is trite law that a counterclaim is considered as a distinct and independent action and not part of the original action, though for convenience the two are tried together. See Gowon vs. Ike-Okongwu & Ors (2003) LPELR-1336 (SC). On the nature of a counterclaim, the Supreme Court has held in the case of Effiom vs. Iron Bar (2000) 1 NWLR (Pt.678) 341, that:

“A counterclaim is an independent action and it needs not relate to or be in any way connected with the plaintiff’s claim or raise out of the same transaction. It is not even analogous to the plaintiff’s claim. It need not be an action of the same nature as the original claim. A counterclaim is to be treated for all purposes for which justice requires it to be treated as an independent action.”

Again, in Okonkwo vs. C.C.B. (2003) FWLR (Pt.154) 457 @ 508, it was held as follows:

“Counter claim though related to the principal action is a separate and independent action and our adjectival law requires that it must be filed separately. The separate and independent nature of a counter claim is borne out from the fact that it allows the defendant to maintain an action against the plaintiff as profitably as in a separate suit. It is a weapon of defence which enables the defendant to enforce a claim against the plaintiff as effectually as an independent action. As a matter of law, a counterclaim is a cross-action with its separate pleadings, judgments and costs.”– Per M. I. Sirajo, JCA

 

COUNTERCLAIM – WHO MAY FILE A COUNTERCLAIM

The procedures for commencing all classes of actions before the Lagos State High Court are provided for in the Rules of the Court. The Rules applicable at the time of filing the action now on appeal was the Lagos State High Court (Civil Procedure) Rules, 2012. That Rule and the current one, are emphatic as to who can file a Counterclaim in an action commenced by Writ of Summons, such as the action that led to this appeal. Order 15 Rules 2 and 3 provides as follows:

2) A Defendant shall file his statement of Defence, Set-off or Counter-Claim if any, not later than 42 days after service on him of the Claimant’s Originating Process and accompanying documents. A Counter-Claim shall have the same effect as a cross action, so as to enable the Court pronounce a final judgment in the same proceedings. A set-off must be specifically pleaded.

(3) A Claimant shall within 14 days of service of the Statement of Defence and Counter-Claim, file his reply, if any, to such Defence or Counter-Claim.

Provided that where a Defendant sets up a Counter-Claim, if a Claimant or any other person named as party to such Counter-Claim contends that the claim thereby raised ought not to be disposed of by way of Counter-Claim, but in an independent proceedings, a Judge may at any time order that such Counterclaim be excluded.

By these Rules, only a Defendant can file a Counterclaim. By the same token, the only processes a Claimant may file after being served with a Statement of Defence and Counterclaim are; (1) Reply to Statement of Defence and;

(2) Defence to Counterclaim. No provision has been made for a Claimant to file a Counterclaim to a Defendant’s Counterclaim. In the result, I agree with the submission of the Cross Respondents’ counsel that the Cross Appellant’s Counterclaim before the lower Court is incompetent. The lower Court therefore commits no error in ignoring the said Counterclaim, as the Court lacks the jurisdictional vires to entertain it, having not been commenced in compliance with due process of law. – Per M. I. Sirajo, JCA

 

COUNTERCLAIM – WHEN COUNTERCLAIM IS FILED AGAINST KNOWN RULES OF PRACTICE

Let me observe that, the joinder of the 2nd Cross Respondent as Defendant to the Cross Appellant’s purported Counterclaim was done without the leave of the lower Court. The practice of our Courts has always been that where a necessary party was inadvertently not joined in a suit, the Claimant or Defendant, on becoming aware of the lapse, will file an application for leave to join such a necessary party either as co-Defendant or Co-claimant. The Cross-Appellant failed to utilize that procedure in the instant case.

Furthermore, besides being incompetent, I also agree with the Cross Respondents that the Cross Appellant’s Counterclaim, to the extent that it was filed against all known rules of practice of the Courts, constitute an abuse of the process of Court and deserves the penalty of dismissal. – Per M. I. Sirajo, JCA

 

CONTRACTS – PARTIES TO A CONTRACT ARE BOUND BY THE TERMS THEREOF

The law is very well settled that Courts do not make contracts for parties. See for example, the cases of African Reinsurance Corporation v. Fantaye (1986) 1 NWLR (Pt. 14) 113 and Omega Bank (Nigeria) Plc. V. O. B. C. Ltd. (2005) 6 NWLR (Pt.928) 547.

In the case of Adiele Ihunwo v. Johnson Ihunwo & Ors. (2013) 8 NWLR (Pt. 1357) 550 at 583, the Supreme Court, per Aka’ahs, OSC; held that:

“Above all, it is not the function of a Court of law to make agreements for parties or to change their agreements as made”. And the law is also trite that parties to a contract are bound by the Conditions or terms thereof and the duty of the Court is to only interprete and/or enforce agreements entered into by the parties. See the cases of Augustine Ibama v. Shell Petroleum Development Company of Nigeria Ltd. (2005) 17 NWLR (Pt. 954) 364; Nika Fishing Co. Ltd. v. Lavina Corporation (2008) 16 NWLR (Pt. 1114) 509 and Aminu Ishola Investment Ltd. V. Afribank Nigeria Plc. (2013) 9 NWLR (Pt. 1359) 380. – Per M. A. A. Adumein, JCA

 

COURTS – ABUSE OF COURT PROCESS

I find it pertinent to echo my voice in holding that, I find it strange that a claimant would choose the platform of filing a defence to counter-claim and reply to statement of defence to introduce a further party and claim in the action under the guise of a counter-claim to the counter-claim. It is my view that this is the worst form of abuse of Court/judicial process. – Per J. G. Abundaga, JCA

CASES CITED

STATUTES REFERRED TO

1. Court of Appeal Rules, 2021
2. Evidence Act, 2011
3. CBN Circulars or Guidelines on interests and Bank charges
4. Court of Appeal Act
5. High Court of Lagos State (Civil Procedure) Rules, 2012

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