Legalpedia Citation: (2015) Legalpedia (CA) 13711

In the Court of Appeal

Wed Nov 25, 2015

Suit Number: CA/L/31/2014

CORAM

UZO .I. NDUKWE-ANYANWU     JUSTICE, COURT OF APPEAL

PARTIES

1. TAK TRACTORS LIMITED2. TAK CONTINENTAL LIMITED3. MR. THOMAS ETUHAPPELLANTS

UNITED BANK FOR AFRICA PLC (Formerly Intercontinental Bank Plc) RESPONDENTS

AREA(S) OF LAW

CIVIL PROCEDURE, JURISDICTION, VENUE, UNDEFENDED LIST, BANKING LAW, LOAN RECOVERY, TERRITORIAL JURISDICTION, PRACTICE AND PROCEDURE

SUMMARY OF FACTS

The appeal arose from a decision of the Federal High Court of Justice sitting in Lagos where judgment was entered in favor of the Respondent bank in the sum of N294,338,819.38 with interest at the rate of 17% before judgment and 2% post-judgment until fully liquidated, plus costs of N100,000 against the Appellants.

The Respondent bank’s claim arose from a contract that was entered into and performed by the parties in Kaduna, Kaduna State. The head office of the 1st Appellant (Tak Tractors Limited) was situated in Kaduna, and the 3rd Appellant (Mr. Thomas Etuh) was residing in Kaduna. However, the 2nd Appellant (Tak Continental Limited), a sister company of the 1st Appellant, had its office in Lagos.

The Respondent bank had obtained leave of the court below to place the suit on the undefended list and to serve the Appellants in Kaduna State, outside the territorial jurisdiction of the Lagos Federal High Court. Upon service, the Appellants filed a preliminary objection challenging the territorial jurisdiction of the Lagos Federal High Court, arguing that the appropriate venue should be Kaduna where the contract was entered into and executed, and where the 1st Appellant had its head office.

The Appellants also entered a memorandum of conditional appearance and a notice of intention to defend the action, supported by an affidavit with five exhibits. The Respondent bank filed a further affidavit challenging the Appellants’ counter-affidavit.

The court below heard the preliminary objection together with the suit, overruled the objection, and entered judgment for the Respondent bank on the undefended list. Dissatisfied, the Appellants filed an appeal with five grounds.

HELD

The Court of Appeal held that:

1. The court below was right to assume territorial jurisdiction over the matter since the 2nd and 3rd Appellants were resident in Lagos and carried on business there. Based on Order 2 rules 1(4) and 4 of the Federal High Court (Civil Procedure) Rules 2009, the Lagos Federal High Court had jurisdiction to entertain the suit.
2. Even if the court below had wrongly assumed jurisdiction, the appropriate order would have been to transfer the case to the appropriate Judicial Division, not to strike it out.
3. The Appellants’ affidavit in support of their notice of intention to defend showed that they were disputing the balance of the alleged indebtedness and asserting over-repayment of the loan facility. The affidavit evidence indicated prima facie that there was a dispute or a triable issue and/or a defense on the merits against the suit.
4. The fact that the Respondent bank filed a further affidavit in refutation of the Appellants’ affidavit supported the fact that there was a real contest or dispute of the claim which required the suit to be transferred to the general cause list.
5. The undefended list procedure should only be resorted to in plain, straightforward, uncontested, and incontestable claims for recovery of debt or liquidated money demands, which was not the case here.
6. The appeal had merit on the second issue, and the judgment of the court below was set aside with an order directing the suit to be heard on the general cause list by another judge to be designated by the Chief Judge of the Federal High Court.

ISSUES

1. Whether the learned trial lower court judge was right in overruling the preliminary objection and where the answer is in the negative whether the subsequent proceedings conducted thereafter are not a nullity ab-initio in that regard?
2. Whether the appellants’ affidavit in support of their notice of intention to defend raised cogent defences as to convince the court below to transfer the suit to the general cause list?

RATIONES DECIDENDI

TERRITORIAL JURISDICTION – DETERMINATION OF PROPER VENUE FOR TRIAL

The official letter-head of the 2nd appellant which contains the extract of minutes of the board of directors of the 2nd appellant with respect to the loan facility which is in page 31 of the record has only Plot No. 983A, Saka Jojo Street, Victoria Island, Lagos as the place the 2nd appellant has office address where it carries on business… The information (supra) established that at all material times the 2nd and 3rd appellants as defendants at the court below were not only resident in Lagos State but were also at all material times carrying on business in Lagos State. The court below was, accordingly, right to act on its own motion to assume territorial jurisdiction in the matter vide Order 2 rules 1(4) and 4 of the Rules of the Court below (supra) on venue of trial of civil actions by the Federal High Court. – Per JOSEPH SHAGBAOR IKYEGH, JCA

IMPROPER VENUE – TRANSFER RATHER THAN STRIKING OUT

Assuming without agreeing that the court below wrongly assumed jurisdiction in the case, the appropriate or proper order would have been, upon objection to its territorial jurisdiction by the appellants as defendants at the court below, the transfer of the case to appropriate the Judicial Division for determination, not the striking out of the case as advocated by the appellants vide Order 2 rule 3 of the Rules of the court below read with section 22(1) of the Federal High Court Act. – Per JOSEPH SHAGBAOR IKYEGH, JCA

TRIABLE ISSUES – TEST FOR DETERMINING WHEN CASE SHOULD BE TRANSFERRED TO GENERAL CAUSE LIST

The said paragraphs of the affidavit in support of the notice of intention to defend the action (supra) read together indicate that the appellants as defendants at the court below are disputing the balance of the alleged indebtedness whereby the appellants are asserting over-repayment of the loan facility upon which the appellants are also doubting the entries in the statement of account relied upon by the Respondent bank to support her case vis-à-vis their own statement of account exhibited in their affidavit. The situation presented by the affidavit evidence (supra) of the appellants shows prima facie that there is a dispute or a triable issue and/or a defence on the merit against the suit…– Per JOSEPH SHAGBAOR IKYEGH, JCA

DEFENSE TO UNDEFENDED LIST – STANDARD FOR EVALUATING SUFFICIENCY OF DEFENSE

In other words, once the defence is not a sham, or is not a gimmick, as in the case of hand, the defendant(s) should be let in to defend the action and the suit transferred to the general cause list vide Yahaya v. Waje Community Bank (supra) at 814 per the lead judgment of Mohammad, J.C.A., (as he was) following the cases of F.M.G. v. Sani (1990) 4 NWLR (pt.147) 688, Okamba v. Sule (1990) 7 NWLR (pt.160) 1, U.N.N. v. Orazulike Trading Co. Ltd. (1989) 5 NWLR (pt.119) 19, Macaulay v. NAL Merchant Bank Ltd. (1986) 5 NWLR (pt.40) 216. – Per JOSEPH SHAGBAOR IKYEGH, JCA

FILING OF FURTHER AFFIDAVIT – EFFECT ON UNDEFENDED LIST PROCEDURE

Also, having regard to the position that the affidavit in support of the notice of intention to defend the suit prompted the Respondent bank to file a further affidavit in pages 179 – 197 of the record in refutation of the affidavit in support of the notice of intention to defend the suit, the filing of the said further affidavit supported the fact that there is a real contest or dispute of the claim by the appellants which required the suit to be transferred to the general cause list.. – Per JOSEPH SHAGBAOR IKYEGH, JCA

PURPOSE OF FURTHER AFFIDAVITS – NOT FOR FINAL DETERMINATION OF ISSUES

The purpose of receiving more affidavit evidence is not to determine the issue there and then. The receipt of further contestable evidence by the court shows the need to go to trial….. the purpose of receiving more than one affidavit for and against the claim is not to determine the case on affidavit evidence, the need for better or further affidavit shows the need to go to trial… – Per OMAGE, JCA (quoted by JOSEPH SHAGBAOR IKYEGH, JCA)

APPROPRIATE USE OF UNDEFENDED LIST PROCEDURE – LIMITED TO STRAIGHTFORWARD CLAIMS

As further stated in the case of Yahaya v. Waje Community Bank Ltd. (supra) at page 814, per Muhammad, J.C.A., (as he was) the undefended list procedure should only be resorted to in plain, straightforward, uncontested and incontestable claim for recovery of debt or liquidated money demand which appears not to be the case here. – Per JOSEPH SHAGBAOR IKYEGH, JCA

NATURE OF UNDEFENDED LIST PROCEDURE – NOT TRIAL BY AFFIDAVIT

The undefended list procedure is not designed as one for trial by affidavit in which a plaintiff files his writ and affidavit and the defendant files a counter-affidavit to which the plaintiff replies by filing another affidavit and so on. It is not a procedure designed for the instalmental presentation by the plaintiff of his case depending on the defence raised by the defendant…… That would debase that useful procedure to a trial by exchange of affidavit. – Per OGUNTADE,JCA (quoted by JOSEPH SHAGBAOR IKYEGH, JCA)

FILING OUT OF TIME – EFFECT OF REPLY BRIEF FILED OUT OF TIME

The Respondent bank’s learned senior counsel stated orally at the hearing of the appeal that the reply brief was field out of time without an order of the court to sustain it. The learned counsel for the appellants did not reply to the statement. Silence means consent or an acceptance of what the other side had said. Time cannot be extended suo motu by the Court to validate a court process filed out of time vide N.B.N. v. The Are Brothers (1977) NSCC 382 at 387… – Per JOSEPH SHAGBAOR IKYEGH, JCA

JURISDICTION OF FEDERAL HIGH COURT – TERRITORIAL EXTENT AND DIVISIONS

The Federal High Court is a superior court of record created by section 249(1) of the Constitution of the Federal Republic of Nigeria 1999, as amended (1999 Constitution). The National Assembly is empowered by section 252 of the 1999 Constitution to make law conferring additional jurisdiction on the Federal High Court. By section 19(1) of the Federal High Court Act (Cap.F12) Laws of the Federation, 2004, (the Federal High Court Act) the Federal High Court is empowered to exercise jurisdiction throughout the Federal Republic of Nigeria… – Per JOSEPH SHAGBAOR IKYEGH, JCA

VENUE FOR BREACH OF CONTRACT SUITS – STATUTORY REQUIREMENTS

There is also Order 2 rule 1(4) of the Federal High Court (Civil Procedure) Rules 2009 (the Rules of the court below) which provides – ‘All suits for specific performance, or upon the breach of any contract shall be commenced and determined in the Judicial Division of the Court in which the contract is supposed to have been performed or in which the defendant resides or carries on substantial part of his business’.– Per JOSEPH SHAGBAOR IKYEGH, JCA

MULTIPLE DEFENDANTS IN DIFFERENT JURISDICTIONS – RULES FOR DETERMINING VENUE

Rule 2 thereof stipulates that – ‘If there are more defendants than one resident in different Judicial Divisions, the suit may be commenced in any one of those Judicial Divisions, subject, however, to any order which the Court may, upon the application of any of the parties, or on its own motion, think fit to make with a view to the most convenient arrangement for the trial of the suit’. – Per JOSEPH SHAGBAOR IKYEGH, JCA

DISPUTING INDEBTEDNESS – SUFFICIENT TO MAKE CASE DEFENDABLE

The said paragraphs of the affidavit in support of the notice of intention to defend the action (supra) read together indicate that the appellants as defendants at the court below are disputing the balance of the alleged indebtedness whereby the appellants are asserting over-repayment of the loan facility upon which the appellants are also doubting the entries in the statement of account relied upon by the Respondent bank to support her case vis-à-vis their own statement of account exhibited in their affidavit. – Per JOSEPH SHAGBAOR IKYEGH, JCA

CASES CITED

STATUTES REFERRED TO

1. Constitution of the Federal Republic of Nigeria 1999 (as amended), Sections 249(1) and 252
2. Federal High Court Act (Cap.F12) Laws of the Federation, 2004, Sections 19(1), 19(2) and 22(1)
3. Federal High Court (Civil Procedure) Rules 2009, Order 2 rules 1(4), 2, 3, and 4
4. Evidence Act, 2011.

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