|
In The Supreme Court of Nigeria On Friday, the 29th day of June 1990
Before
Their Lordships
SC 186/1986
Between
And
Judgement
of the Court Delivered by Agbaje. J.S.C.
The plaintiff's Bank, NAL Merchant Bank Ltd., sued the defendant, Mr. A. A. Macaulay in a Lagos High Court claiming against him as follows: The
plaintiff's claim against the defendant is for the sum of N3,490.95 (Ninety
three thousand, four hundred and ninety naira, ninety-five kobo) being the
amount due and payable by the defendant to the plaintiff as at 30th September,
1984 for money lent in form of a term loan to the defendant at the defendant's
request in the normal course of plaintiff's business as a banker together with
interest and the usual bank charges thereon,
which sum defendant has refused and neglected to pay A in spite of repeated
demands. AND
THE PLAINTIFF ALSO claims interest on the said sum of N3 ,490.95 at the rate of 91/2%
per annum from 1St October, 1984 until judgment and thereafter at the
rate of 91/2% per annum until final liquidation of the whole debt together with
costs. The
writ of summons containing the claim, dated 21/11/84 and a statement of claim
dated 21/11/84 were filed together in the Lagos High Court Registry on this same
day. Both were served upon the defendant. Upon
the failure of the defendant, within the time prescribed by law, to enter an
appearance to the writ of summons or file a statement of defence to the
plaintiff's statement of claim, the plaintiff by motion on notice under
Order 9 Rule 3 and Order 24 Rule 2 of the High Court of Lagos State Rules of
Court and the Court's Inherent Jurisdiction, applied to court for the following
relief:- An
order entering final judgment for the plaintiff in the amount claimed in the
plaintiff writ of summons and Statement of Claim together with interest as
claimed upon default of appearance and or defence. The
application came on for hearing before Adeniji. J.. on 25/4/85. on that day,
counsel for defendant sought and was granted an adjournment for him to
regularise the defendant's position. Nothing significant happened in the case
until l/7/85 when the following occurred in court before Adeniji, J:- PARTIES. Absent. Bayo
Adeniji - Fashola for Plaintiff/Applicant. Mr.
Joseph for Defendant. Case
Adjourned. 8/7/85 to enable defendant file Statement of
Defence
before then, with N200 costs to plaintiff/applicant. Costs
to be paid on or before 8/7/85. Pursuant
to the above order of Adeniji. J. 1/7/85. the defendant filed a statement of
defence dated 4/7/85 to the plaintiff's statement of claim. It appears
therefore quite clear that the statement of defence was filed regularly. For
reasons hereinafter appearing I have to reproduce the whole of the statement of
defence:- STATEMENT OF DEFENCE SAVE AND EXCEPT as herein specifically admitted, the defendant denies each and every allegation of facts contained in the plaintiff's Statement of Claim if each were set out seriatim and specifically traversed the same. 1.
The defendant admits paragraphs 1,2.3,4 and 7 of the plaintiff's Statement of
Claim.
2.
The defendant denies paragraph 5, 6, 8. u and lo ~ the H plaintiff's Statement
of Claim.
3.
The defendant shall at the trial of this action rely on the agreement between
the parties herein as contained in the Letter dated 25th April, 1980 and
hereby gives the plaintiff notice to produce same.
4.
The defendant avers that pursuant to the aforesaid letter/agreement, the
defendant appointed Messrs. Mcgregor and Ojutalayo, Chartered Surveyors and
Valuers as his agents.
5.
Furthermore by a letter dated 6th May, 1980 the defendant's aforesaid agents
with the defendant's full knowledge and consent duly noticed the plaintiff of
their position and the defendant hereby gives notice to the plaintiff to produce
the said letter.
6.
The defendant denies the receipt of any debit or revision letter whatsoever from
the plaintiff and or its solicitors.
7.
The defendant shall at the trial of this action contend that the plaintiff
action herein is premature. WHEREOF
of defendant denies the plaintiff's claim of N93,490.95k or at all as same is
not due to the plaintiff. It
was after this regular statement of defence had been filed by the defendant
that the plaintiff/bank by summons on notice applied to the court under
order 10 Rules 1 & 2 of the Lagos State High Court Rules for the following
relief: Entering judgment against the defendant for the sum of N93,490.95 (Ninety-three thousand, four hundred and ninety naira, ninety five kobo) together with interest at the rate of 91/2 per annum from 1st October, 1984 until judgment and thereafter at the rate of 91/2 per annum until final liquidation of the whole debt together with costs. Order
10 rules 1 & 2 provide as follows:-
1.
(a) Where the defendant appears to a writ of summons specially indorsed with
or accompanied by a statement of claim under Order 3, rule 4, the plaintiff may
on affidavit made by himself or by any other person who can swear positively to
the facts, verifying the cause of action and the amount (b)
If
on the hearing of any application under this rule it shall appear that any claim
which could not have been specially indorsed under Order 3, rule 4, has been
included in the indorsement on the writ, the Judge may, if he shall think fit,
forthwith amend the indorsement by striking out such A claim, or may deal with
the claim specially indorsed as if no other claim had been included in the
indorsement, and allow the action to proceed as respects the residue of the
claim. (c)
Where
the plaintiff's claim is for the delivery up of a specific chattel (with or
without a claim for the hire thereof or for damages for its detention) the
Judge may make an order for the delivery up of the chattel without giving the
defendant any option of retaining the same upon paying the assessed value
thereof, and such order if not obeyed may be endorsed by a writ of attachment
or a writ of delivery. 2. The application by the plaintiff for leave to enter final judgment under rule 1, of this Order shall be made by summons returnable in Chambers not less than four clear days after service. accompanied by a copy of the affidavit and exhibits referred to therein. The
affidavit in support of the summons read thus:
AFFIDAVIT IN SUPPORT OF SUMMONS
I,
Kolade Ajayi, Nigerian Bank Officer, now residing at Block7, House 14 Satellite
town, Lagos hereby make oath and say as follows: 1.
That
I am an officer in the Credit Department of the Plaintiff Company.
2.
That
I am familiar with the facts of this case and I have the E
prior authority and consent of
the plaintiff to swear to this affidavit. 3.
That
the plaintiff's cause of action in this suit is as indorsed in the writ of
Summons and Statement of Claim herewith attached and marked Exhibit 'P1' 4.
That
sometime in April, 1980 the plaintiff granted to the F
defendant at the defendant's
request a term loan of ~7(),000.00 (Seventy thousand naira) under certain terms
and conditions as communicated to the defendant vide plaintiff's letter JAO/BEE/NAL
of 25/4/80, which terms were accepted by the defendant. 5.
That
the document now shown to me and marked Exhibit 'P2' is a photocopy of the
aforesaid letter showing the said G terms and conditions and which copy I
confirm as correct having compared it with the original in plaintiff's custody. 6.
That
under the terms and conditions governing the loan and accepted by the defendant
the defendant was required by paragraph 5 of the same to repay the loan in full
within H four (4) years from either
a.
rental
income on the bungalows estimated at N12,000.00 (twelve thousand naira) per
annum on i.e. N24,000.00 (twenty-four thousand naira) per annum or/and
b.
any
other sources. 7.
That
the defendant made full use of the loan granted as aforesaid and as at 30/8/84,
his loan account with the reflected a debit in the sum of N93,490.95 (Ninety- three thousand, four hundred & ninety
naira ninety-five kobo). 8.
The
defendant has not in spite of repeated demands paid back the said sum upon which
interest at the rate of 91/2% continues to accrue. 9.
That
the attached and marked Exhibit 'P3' are some of the plaintiff's several letters
of demand to the defendant which were never responded to. 10.
That
I am informed by Mr. Kola Awodein who is the counsel conducting this suit on
plaintiff's behalf and I verily believe him that the defendant duly entered an
appearance to this suit through his solicitors Messrs Akin 0. Sikuade & Co.,
and also filed a Statement of Defence on 8/7/85. 11.
That
the document now shown to me and marked Exhibit 'P4' is a copy of the
defendant's Statement of Defence. 12.
That
I am informed by Mr. Kola Awodein of counsel and I
verily believe him that the Statement of Defence discloses no defence
whatsoever to the plaintiff's claim. 13.
That
the document now shown to me and marked Exhibit 'P5' is a photocopy of the
letter referred to in paragraphs of the Statement of Defence and which copy I
confirm as correct having examined it with the original in the custody of the
plaintiff. 14.
That
the document now shown to me and marked Exhibit 'P6' is a copy of the Statement
of Account of the defendant with the plaintiff/applicant which statement has
been duly certified by me after examining same with the original entries in
the book in the custody of the plaintiff/applicant and having found the same to
be true and correct. 15.
That
the books are those kept by the plaintiff/applicant in the ordinary course of
its business and that the entries thereon are those made in the ordinary course
of plaintiff's business. 16.
That
the defendant has no defence whatsoever to this claim. 17. That I swear to this affidavit in good faith. The
defendant then filed an affidavit showing cause why he should be let in to
defend the action. The affidavit read thus:- 1.
That
I am the above named defendant. 2.
That
I have been shown a copy of the affidavit of Kolade Ajayi deposed to on the 18th
day of October, 1985. 3.
That
paragraphs 4 and 5 of the said affidavits are true. 4.
That
I intend to reply on the letter dated 25th April, 1980 referred to in
paragraph 5 of the said affidavit. 5.
That
it was mutually agreed between the plaintiff and myself that time is not the
essence of the agreement.
6.
That
in furtherance of the agreement my sole letting agents caused Exhibit ‘P5'
referred to in paragraph 13 to be written to the plaintiff. 7.
That I am made to understand by the plaintiff before agreeing with same that the
sum ofN70,000 is to be repaid to the plaintiff within 4 years of completing the
bungalows and tenanting. 8.
That
it was the averments in paragraph contained in paragraphs 4, 5, 6 and 7 above
that lured me on to accepting the loan. 9.
That
I have repeatedly informed the plaintiff of the state of the bungalows same
being uncompleted yet. 10.
That
the sum of 70,()0O or at all is not due to the plaintiff. 11.
That
the plaintiff's claim and application before this court is an abuse of the
process of this court. 12.
That
I at no time received any advice or notification from the plaintiff. 13.
That
I intend to defend the plaintiff's claim upon the foregoing depositions. 14. That I swear to this affidavit conscientiously. Adeniji,
J. heard the arguments on the application for summary judgment. Giving his
ruling on it on 29/11/85 he held
as follows:- ....Since the facts and particulars here show that this is a fair dispute as to the meaning of the loan terms and questions of facts may arise I think it is right in the circumstances to grant the defendant leave to defend this suit. And
he accordingly ordered as follows:- Leave is hereby granted to the defendant to defend the action, and the Statement of Defence already filed deemed to have been properly filed in the circumstances. The parties are accordingly directed to take out summons for directions. The
plaintiff bank appealed against this ruling to the Court of Appeal, Lagos
Division, which in its judgment in the appeal as per the lead judgment F
of Uthman Mohammed, J.C.A., in
which Nnaemeka-Agu, J.C.A., as he then was, and Kutigi, J.C.A. concurred
delivered on 21/7/86 held as follows:- first: In April, 1980, the appellant, on an application by the respondent granted the latter a loan of N70,000.00 with interest at 61/2 percent. The respondent accepted and signed the agreement on the terms and conditions specified therein. By the end of four years, after signing the agreement, the Loan Account of the respondent had gone up to N93,490.95. One of the conditions of offering the lo~n was that it would be repaid, with interest, within four years of the signature of the agreement. Second: lt is without any doubt that the respondent has not raised any defence in both the statement of defence and the affidavit filed by him in this appeal………………and I am in agreement with the submission of Mr. Awodein that the appellant is entitled to summary judgment on the claim filed before the High Court…………………........................................................................ The
appeal therefore succeeds and it is allowed. The ruling of Adeniji, J., delivered on 29th November, 1985, is set aside. In its place, as applied for in the writ of summons, judgment is hereby entered in favour of the appellant and against the respondent, in the sum of N93,490.95 The respondent shall also pay all the accumulated interests at the rate of 91/2 percent per annum, from the 1st October, 1984 to date. In addition the judgment debt shall yield interest at the rate of 41/2% until the final liquidation of the total debt. I assess costs in favour of the appellant at N50.00 in this court and Nl50.00 at the court below. It
is against this judgment that the defendant has now appealed to this Briefs of
argument were filed and served on both sides. According to the
defendant/appellant the issues arising for determination in this appeal are
as follows: 1.
Whether
or not from the State of the pleadings the main issue joined between the parties
turns on the construction of the terms and conditions of the agreement between
the parties. 2.
Whether
or not the finding of the learned trial Judge that the appellant made out a
prima facie case which ought to be tried being a finding of fact based on the
totality of the evidence before the court ought to have been disturbed by the
Court of Appeal. 3.
Whether
or not Order 10 Rules 1 and 2 procedure is appropriate in the circumstance of
this case particularly in construing and NOT inspecting document to wit the
terms and conditions of the agreement without the assistance of the arguments of
both counsel and purely on affidavit evidence. 4.
Whether
or not the parties from the materials before the court agreed “That the loan
would be repaid, with interest, within four years of the signature of the
agreement", and if so whose signature? The
main thrust of the submissions of counsel for the defendant/appellant Mr. C.O.
Joseph on all the issues said to arise in this case is that the resolution of
the dispute between the parties to this case turns on the construction of the
loan agreement. And, this being so counsel submits this case is not a proper
subject-matter for the proceedings for summary judgment under Order 10 rule 1 of
the Lagos State High Court Civil Procedure Rules. For this proposition counsel
relies on the following authorities: Bowes v. Caustic Soda and Chlorine Syndicated (1982-93) 9 T. 328; Jacobs v. Booth's Distillery Company 85 L.T. 212 H.L. The Law Vol. LXXXV Page 262. Saw v. Khakim Lindsay V. Martin (1888-89) 5 T. L. R. 323 The Electric and General Contract Corporation V. Thomson - Houston Electric Company (1893-94) T.L.R. 103 Ford V. Harvey and other (1892-93) 9 T.L.R. 328. Counsel
for the defendant further makes the point that the Court of Appeal erred when
it held:
One of the conditions of offering the loan was that it would be repaid, with interest, within four years of the signature of the agreement. According
to the brief of arguments of the plaintiff's respondent the issues arising for
determination in this appeal are as follows: (a)
Whether
the Court of Appeal was right in holding that the appellant had no arguable
defence to the claim and in entering judgment for the respondent accordingly. (b)
Whether
the Court of Appeal was right in examining and construing the relevant
documents in evidence in its determination of the case. (c)
Whether
a proper application of the relevant provisions of the said Order 10 precludes
in all events an examination and construction of relevant documents produced in
evidence. These
issues are, in my view, vitiations of the issues said by the defendant to p
arise for determination in this
appeal which together boil down to the point whether or not the defendant should
be let in to defend the action. And the submission in this regard of counsel for
the plaintiff, Mr. Kola Awodein, is that on the whole of the material in this
case there is no issue or question in which it ought rightly to be allowed to go
to actual trial. In effect, counsel has submitted that the defendant has not
raised either in his statement of de- F fence or in the affidavit showing cause
against the application any triable issue. He places reliance on the following
cases: 1.
Verrall v. Great Yarmouth BC
(1980)1 All E.R. 839 at 843,. 2.
European
Assian Bank V Punjab and Sind Bank (1983)
2 All E.R. 508 at 516; 3.
Nishizawa
Ltd. V. S.N. Jethwani
(1984)12 S.C. 234 at 276-7; and 4.
VanLynn
Developments Ltd. V Pelias Construction Co. Ltd.
(1968)3 All E.R. 824 at 825. The
provisions of Order 10 rules (1) and (2) were considered in depth in the case of
Nishizawa Ltd. v. S.N. Jethwani
(1984)12 S.C. 234 by this court. It will be a work of super-ero-gation if
I were to undertake to examine the provisions afresh and construe them. I think
it is enough for me if I apply the decisions in the case to the case in hand or
state my reasons why a particular decision in the case will not apply here. It
is to be noted as I have said earlier on in this judgment the defendant's
statement of defence to the plaintiff's statement of claim was filed regularly.
So an important feature of this case is that there was a regular statement of
defence in existence before the plaintiff applied for summary judgment under
Order 10 rule 1. In Nishizawa Ltd. V.
Jethwani Ltd. (supra) this
court H was confronted with a situation where a statement of defence was filed
after an application for summary judgment was made but before leave to defend
the action was given to the defendant by court. It was in this context that the
relevance of the statement of defence filed was pronounced upon in the consideration
of the point whether or not the defendant in the case should have been let in to
defend. In
Nishizawa Ltd. V. Jethwani,
(supra) it was remarked as per the lead judgment of Obaseki, J.S.C., that
the English case of Mclardy V. Slateum (1890)
24 Q.B.D. 504 is: ….no authority for the statement that "the fact that he has delivered a defence may be sufficient to enable a defendant to get leave to defend" but only an authority for the proposition that "the plaintiff's application for judgment may be made even after the delivery of a statement of a defence. I
consider the decision in the case of Mclardy V. Slateum (supra)
very much relevant to the case in hand. So it behoves me to set down the
decision in the case at page 506 of
the report by Pollock, B.:- This
is an appeal from an order of Field, J., at chambers, setting aside an order of
a master, who, upon an application under Order XIV., had given the defendant
leave to defend upon paying the amount of the claim into court. The
order of Field, J., proceeded upon his view of the proper construction of Order
XIV. , r.1, namely, that the plaintiff was bound to make his application for
summary judgment before the defendant had put in any statement of defence. We
took time to consider our judgment, principally because we were desirous of
ascertaining what was the practice followed by other Judges, and by the masters,
in consequence of being informed by counsel that Field, J., had long ago
decided, in an unreported case, that the
application must be refused if made after delivery of a statement of defence. We
have made those inquiries, and learnt that the view of Field, J., still is that
the intention of Order XIV was that the plaintiff must make his application
before delivery of a statement of defence; but that in peculiar circumstances it
may be made after, as where the defendant has delivered his defence before the
expiration of the usual time, for the very purpose of defeating such an
application. The view taken by other Judges, and by the masters, is that the
intention of Order XIV., r.1, was that the plaintiff should apply within a
reasonable time after the appearance of the defendant, but that it very often
happens that a defence, which has been delivered, itself discloses facts which
make an application under Order XIV right and proper. We think that this is the
proper construction of the rule. (Italics mine)
As
I have said earlier on in this judgment the statement of defence in the instant
case was filed regularly. It appears from the decision in Mclardy
v. Slateum (supra) that before that case the view was that upon a proper
constructionoforderXl Rule 21 (U.K. Rules of Court) which as I have said is
in pari
materia with Order 10 rule 1
of the Lagos High Court Civil Procedure Rules the plaintiff was bound to make
his application for summary judgment before the defendant had put in any
statement of defence. My understanding of the decision in Mclardy v. Slateum is
that that case has not swept away that view. What it has done, in my view, is
that it recognises an exception to that view, namely, when it happens that a
defence, which has been delivered, itself discloses facts which make an
application for summary judgment right and proper. It appears to me that when
an application for summary judgment is made under these circumstances, one must
perforce have recourse in the first instant to the statement of defence
delivered in the consideration of the point whether or not to grant the
application. If the statement of defence in fact shows a triable issue, then the
application will be refused. If it does not, then recourse will be had to the
affidavit of the defendant showing cause to the application with a view to
finding out if the defendant, in the language of Order 10 rule 1(a) of the
High Court of Lagos State Rules has satisfied the Judge that he has a good
defence to the action on the merits or that he, the defendant, has disclosed
such facts as may be declared sufficient to entitle him to defend the action
generally. On
all the matters which the trial Judge has to consider before coming to his
decision as to whether or not to make an order empowering the plaintiff to
enter summary judgment against the defendant, the trial Judge is not without
guidance. In Nishizawa Ltd. v. Jethwani
(supra) at page 260 this court quoted with approval Notes 14/3 - 4/4 to
Order 014 r.3 of the English Rules on Summary Judgment in the Supreme Court
Practice 1976 as guidance to a court dealing with a matter of this nature:- The
defendant's affidavit must "condescend upon particulars", and should, as far
as possible, deal specifically with the plaintiff’s claim and affidavit, and
state clearly and concisely what the defence is, and what facts are relied on
as supporting it. It should also state whether the defence goes to the whole or
part of the
claim, and in the latter case it
should specify the part. A
mere general denial that the defendant is indebted will not suffice (Wallingford
V. Mutual Society (1880) 5
App. Cas., per Lord Blackburn, at p.704; Re General Rail Syndicate, Whiteley's
Case, (1900)1 Ch., per Lindley, M.R., at p.369 Anon., (1875) WN 249, per Quain,
J., at p.250) unless the grounds on which the defendant relies as showing that
he is not indebted are stated (ibid.). If the affidavit commences, as it may,
with a statement that the defendant is not indebted to the plaintiff in the
amount claimed, or any part thereof, it should proceed to state why the
defendant is not so indebted, and to state the real nature of the defence relied
on (Re General Rail, Syndicate, G supra). Again,
it is not enough for the defendant to show a case of hardship but creating no
enforceable right, e.g., past promise by plaintiff unsupported by valuable
consideration (Woolston
V. Baines, (1876) W.R. 74),
nor a mere inability to pay (Besant V.
Townsend, 22 L.R. Ir. 389),
nor an allegation that the plaintiff H has given time for payment which, of
course, constitutes no defence unless there be consideration (Hookham V.
Nayer
(1905), 22 T.L.R. 241). If
the defence relied on is fraud the affidavit should state the particulars of the
fraud (Wallingford
V. Mutual Society (1880) 5
App. Cas. 685). A mere vague
general allegation of fraud is useless (ibid). Similarly,
if a legal objection is raised, the facts and the point of law arising thereon
must be clearly stated. Indeed,
in all cases, suffident facts and particulars must be given to show that there
is a bona fide defence (Wallingford V. Mutual Society (1880), 5 App. Cas.
685, see judgment of Lord Blackburn at p.704; Harrison v. Bottenheim, 26W. R. 362; Ray V.
Barker, 4 Ex. D. 283; Shurmur V. Young (1889), 5 T.L.R. 155). Matter
of hearsay is admissible in the defendant's affidavit (Harrison V.
Bottenheim (1878), 26 W.R. 362, C.A.), provided that The defendant's affidavit is not conclusive and does not preclude him from relying on defences not raised in it (Ray V. Newton, (1913)1 K.B., per Hamilton, L.J. at p.258). The
case of Jacob's v. Booth's Distillery
Company (1901-2) Volume 85
N.S. The Law Times Report 262 is authority for the proposition that judgment
should only be ordered under Order XIV (U.K. Rules) dealing with summary
judgment where assuming all the facts in favour of the defendant they do not
amount to a defence in law. The same case also decides it that where there is a
triable issue, though it may appear that the defence is not The
case of the Electric and General Contract
Corporation V. The Thomson - Houston Electric Company
1893 - 94 Vol. X The Time Law Report 103 is authority for the proposition
that Order XIV (U.K. Rules) providing for summary judgment does not apply to
cases raising what may turn out to be difficult question of law. The case of Ford
V. Harvey & anor. 1892-95
9 T.L.R. 328 is authority for the proposition that Order XIV (U.K. Rules) which
allows summary judgment to be entered is not intended to apply to cases in which
there is a fair dispute as to the meaning of a document. In
the dealing with an application for summary judgment under the relevant rule
of court the following passage in the speech of the Lord Chancellor (Halsburys)
in Jacobs V. Booth's Distillery Company
(supra) is worthy of note:- The
Lord Chancellor said 'People do not seem to understand that the effect of order
XIV is, that, upon the allegation of the one side or the other a man is not to
be permitted to defend himself in a court; that his right are not to be
litigated at all. There are some things too plain for argument; and where there
were pleas put in simply for the purpose of delay, which only added to the
expense, and where it was not in aid of justice that such things should
continue, Order XIV was intended to put an end to that
state of things, and to prevent sham defences from defeating the right of
parties by delay and at the same time causing great loss to plaintiffs who were
endeavouring to enforce their rights. I
can now go on to the consideration of the arguments from both counsel in this
court. I have set down earlier on in this judgment the Statement of Defence of
the defendant and his affidavit showing cause against the application for
summary judgment. I have set down the statement of claim of the plaintiff/bank. By
paragraph 1 of the statement of defence, the defendant admits paragraphs 1, 2,
3, 4 and 7 of the statement of claim. In effect, the defendant admits the
following averments in the plaintiff's statement of claim: 3.
Sometime
in April, 1980, the plaintiff at the specific request of the defendant granted
to the Defendant term loan of N70,000 (Seventy Thousand Naira) under certain
terms and conditions which terms and conditions were accepted by the Defendant.
The Plaintiff will rely on its letter dated 25/4/80
by which the loan was granted and the Defendant's signature thereon
signifying his acceptance of the terms and conditions stated therein.
4. The Plaintiff avers that the Defendant made full use of the loan granted as aforesaid and that as at 30th September, 1984, the Defendant's loan Account reflected a huge outstanding sum of (N93,490.95) Ninety-three thousand, four hundred and ninety naira, ninety-five kobo). On
the authority of Seldon v. Davidson
(1968) 2 All E.R. 755 it is clear that
once the defendant admits the receipt of the loan the burden of proof as to
repayment or as to the reasons for non repayment is on the defendant. The only
thing in respect of the latter is paragraph 7 of the statement of defence
which says: 7. The defendant shall at the trial of this action contend that the plaintiff action herein is premature. Paragraph
7 of the statement of defence contains no facts and particulars indicating
that the plaintiff's action is premature. So on such authorities as Willingford
V. Mutual Society (supra) Harmson V. Buthenliejin (supra)
Ray V. Baker
(supra) and Sharmier
V. Young (supra) such a defence will not De countenanced in an
application for summary judgment. So in my judgment the plaintiff was in order
on the authorities in applying for summary judgment after the defence has been
filed. For the defence shows facts which made such an application necessary and
proper. And in my judgment the defence does not raise a triable issue. This
is not the end of the matter. I have said that the defendant in addition to
his statement of defence has filed pursuant to Order 10 rule 3 an affidavit
showing cause against the application for summary judgment. It therefore behoves
me to see if the lower court, guided by the relevant authorities ought to have
been satisfied as the trial court was, that the defendant has a good defence
to the action on the merits or that the defendant has disclosed such facts as
may be deemed sufficient to entitle him to defend the action generally. I
have set down earlier on in this judgment the affidavit of the defendant. By
paragraph 3 of the affidavit he admits paragraphs 4 and 5 of the affidavit in
support of the application for summary judgment which say:- 4.
That
sometime in April, 1980 the Plaintiff granted to the Defendant at the
Defendant's request a term loan of N70,000.00 (Se
venty thousand naira) under certain terms and conditions as communicated
to the Defendant vide Plaintiffs letter JAO/BEE.NAL of 25/4/80, which terms were
accepted by the Defendant. 5. That the document now shown to me and marked Exhibit 'P2' is a photocopy of the aforesaid letter showing the said terms and conditions and which copy I confirm as correct having compared it with the original in plaintiff's custody. The
effect of this admission is that both parties to this case are agreed that the
terms and conditions of the loan which the plaintiff undoubtedly granted the
defendant are contained in the plaintiffs letter to the defendant reference
No.JAO/BEE.NAL of 25/4/80 a copy
of which is Exh.P2 exhibited in this application. Exhibit
P2 reads thus:-
Dear
Sir, TERM
LOAN FACILITY With
reference to your applications of 9th April and 7th May, 1979, and further to
our subsequent discussions, we are pleased to offer you a term loan of
N70,000.00 (Seventy thousand Naira) subject to the following terms and
conditions:- 1.
AMOUNT:
The maximum amount that may be drawn under this facility is
N70,000.00 (Seventy thousand Naira only). 2.
PURPOSE:
To provide you with part of the finance required for the completion
of your two bungalows under construction at Ogba Residential estate costing
N113,000.00. 3.
PERIOD:
This facility is available for a maximum period of four years in
accordance with the repayment programme as contained in paragraph (5) below. 4.
AVAILABILlTY: This
loan will be made available to you immediately upon your acceptance of and
compliance with its terms and conditions.
5.
REPAYMENT: Repayment
is to be effected in full within four years from either. (a)
rental
income on the two bungalow estimated at N24;000.00 per annum or/and (b)
any
other sources. In
the case of (a), we are to be given an irrevocable letter of undertaking by
your Letting Agents domiciling all the rental income on the property to us.
6-9 not relevant. The
other paragraphs in the defendant's affidavit on which he can possibly rely as
containing his defences or facts which should be deemed sufficient to entitle
the defendant to defend the action generally are as follows:-
4.
That
I intend to rely on the letter dated 25th April, 1980 referred to in paragraph 5
of the said affidavit. 5.
That
it was mutually agreed between the plaintiff and myself that time is not the
essence of the agreement. 6.
That
in furtherance of the agreement my sole letting agents caused Exhibit 'P5'
referred to in paragraph 13 to be written to the plaintiff. 7.
That
I am made to understand by the plaintiff before agreeing with same that the sum
of N70,000.00 is to be repaid to the plaintiff within 4 years of completing
the bungalows and tenanting. 8.
That
it was the averments in paragraph contained in paragraphs 4, 5, 6, and 9.
That
I have repeatedly informed the plaintiff of the state of the bungalows and same
being uncompleted yet. 10. That the sum of N70,000 or at all is not due to the plaintiff. At
this stage I will refer to notes 14/3-4/3 to Order 14 (U.K.) in the Supreme
Court Practice 1976 dealing with Defendant showing cause against an application
for summary judgment: - The
defendant may show cause against the plaintiff's application. (1)
by
a preliminary or technical objection, e.g., that the case is not within this
Order or that the statement of claim or affidavit in support is defective,
such as no due verification of the claim. No affidavit is required in support of
such objection. Cf. Bradley V. Chamberlyn
(1893)1 Q.B.439. If the objection is fatal, the Master will then dismiss
the application under Rule 7 or give unconditional leave to defend; if the
defect is capable of amendment, the Master may give leave to amend and proceed
on the application as amended, subject to the questions of adjournment and
costs; (2)
on
the merits, e.g., that he has a good defence to the claim on the merits, or that
a difficult point of law is involved, or a dispute as to the facts which ought
to be tried, or a real dispute as to the amount due which requires the taking
of an account to determine, or any other circumstances showing Then
I must remind myself of the provisions of section 131 of the Evidence Act which
says: (1)
When
any judgment of any court or any other judicial or official As
I have said above the defendant has himself admitted in his affidavit that the
terms and conditions of the loan agreement between him and the plaintiff have
been reduced into writing. In the circumstances and having regard to the
provisions of Section 131(1) of the Evidence Act, can the defendant be heard
to say that besides these written terms and conditions there is other evidence
of the terms of the loan agreement? I have no difficulty at all in answering the
question in the negative. So in my judgment it is only the written conditions
and terms of the loan agreement that are evidence of the loan's terms and
conditions. So paragraphs 5 and 7 of the defendant's affidavit to wit:- 5.
That
it was mutually agreed between the plaintiff and myself that time is not the
essence of the agreement. 7. That I am made to understand by the plaintiff before agreeing with same that the sum of N70,000.00 to be repaid to the plaintiff within 4 years of completing the bungalow and tenanting. cannot
in my judgment be relied upon as raising (1) a good defence on the F merits, or
(2) a difficult point of law to be resolved or (3) a dispute as to facts The
upshot of what I have just said is that the resolution of the question whether
or not the application for summary judgment under Order 10 rule 1 of the Lagos
High Court Rules should be granted revolves squarely around the written
conditions and terms of the loan agreement as c6ntained in Exh. The
learned trial Judge granted the defendant leave to defendant because according
to him, there is a fair dispute as to the meaning of the terms The
lower court overturned, as I have said above, this decision of the trial court.
That court treated Exh. P2 containing the terms and conditions of the loan as of
paramount consideration in this case. Mohammed, J.C.A., in his lead judgment
held that one of the conditions of offering the loan was that it would be repaid
with interest within 4 years of the execution of the loan agreement. In effect
the learned Justice of appeal has construed exhibit Counsel
for the plaintiff Mr. Joseph has submitted to us that it was wrong of the
learned Justice of the Court of Appeal to have embarked at all on the
construction of the exhibit in an application for summary judgment. It was
submitted that he should have limited himself to finding out if there was a fair
dispute as to its meaning as the trial court had done. It was further submitted
that in any case the construction which the learned Justice put on it was
wrong. It was at this stage that counsel was asked by us, that since paragraph
7 of the statement of defence which pleads that the plaintiff’s action is
premature what construction of Exh.P would he be contending for as to the time
when the four year period for the repayment of the loan would
begin to run. Try as we could we
were unable to get a clear cut reply from him. Again when we asked him to
disclose to us the reasons why the defendant was saying that the plaintiff’s
action was premature, there was nothing specific from him. All I can gather from
the replies of counsel is that time is not of the essence of the contract sued
upon, a contention already raised by paragraph 5 of the defendant's affidavit
showing cause and which I have already considered and rejected. For
the plaintiff it was contended by his counsel Mr. Awodein that since the only
issue in this case is the construction of Exhibit P2. and the point does not
involve any difficult point of construction the issue can be resolved in an
application of this nature and final judgment entered for the plaintiff or the
defendant as the case may be. He relied on the case of Van
Lynn Development Ltd. v. Pelicas Construction Co. Ltd.
(1968) 3 All L.R. 824 at 825 and the other cases he cited to us which I
have noted earlier on in this judgment. I
cannot say that the Court of Appeal was wrong in embarking on the construction
of Fxh.P2 at all. If it could not how would it know whether or not there is a
fair dispute as to the meaning of the terms and conditions of the loan
agreement? It
is said in Jacobs v. Booth's Distillery
Company (supra) that
judgment should only be ordered in application for summary judgment where
assuming all the facts in favour of the defendant, they do not amount to a
defence in law. By the same token where in an application for summary judgement
and the only point involved is the construction of a document which document
is capable of more than one meaning, then one tries and fathoms all the meanings
capable of being given to the document, and if any of them gives the defendant a
defence in law to the action, then there is a fair dispute as to the meaning of
the document which will entitle the defendant to defend the
action. If, on the other hand, none of the meanings which the document is
capable of bearing can give a defendant a defence to the action then there can
be no fair dispute as to the meaning of the document. In which case the
defendant has not shown that the case raises a triable issue and summary
judgment will be entered against him. I
can now go and examine Exh.P2 containing the terms and the conditions of the
loan. It is common ground that the defendant has taken the loan. What has to be
ascertained from Exh.P2 are the terms for the repayment of the loan. The
relevant provisions in Exh.P2 in this regard are clauses 3 and 5 thereof which
say:- 3.
PERIOD:
This
facility is available for a maxim urn period of four years in accordance with
the payment programme as contained in paragraph (5) below. 5.
REPAYMENT:
Repayment is to be effected in full within four years from either (a)
rental
income on the two bungalows estimated at N12,000.00
per annum i.e.N24,000.00 per annum or/and (b) any other sources. It
is clear beyond a peradventure that the period within which the loan granted to
the defendant is to be repaid i~ a maximum one of 4 years. And equally clear is
the fact that there is nothing in Exh.P2 by reference to which (a)
rental
income on the two bungalows estimated at N12,000.00 per annum i.e. N24,000.00
per annum or/and (b)
any
other sources; In the case of (a) the plaintiff/bank is to be given an irrevocable letter of undertaking by the defendant's Letting Agents committing a/i the rental income on the property to the plaintiff. are
clear and unambiguous and cannot at all be stretched in its meaning to
constitute a gloss on the period for the repayment of the loan.
So,
in the final analysis, the only is sue arising from the examination of This
takes me to clause 4 of Exh.P2 which says:
4.
AVAILABILITY:
This
loan will be' made available to you immediately upon your acceptance of and
compliance with its terms and conditions. Perhaps
it is clause 4 which informed the Court of Appeal in its decision
which is criticized before us
that one of the conditions governing the loan agreement is that the loan would
be repaid with interest within four years of the date of the execution of the
agreement. However, clause 4 says the defendant cannot avail himself of loan
facility until after the agreement for the loan has been entered into. It then
goes on to say that the disbursements of the loan will be made by the bank. So,
Exh.P2 envisages a situation where full
utilisation of the loan will not occur until after the loan agreement itself It
now remains for me to see if this viewpoint of Exh.P2 can possibly give the
defendant a defence in law to the plaintiff. It
is an admitted fact in the case now before us that, as at 31st October, 1980,
the defendant has fully utilised the loan facility which the plaintiff!
bank granted him. The plaintiff brought this action for the recovery of the loan
on 21st November, 1984, that is to say, more than a period of 4 years after the
defendant has in fact taken it. Evidently in these circumstances, even on this
view point of Exh. P2, the defendant has not shown a defence in law to the
plaintiff's action. So, in my judgment on all the possible constructions which
can be put on Exh. P2 it cannot be said that the defendant has a defence in law
to the plaintiff's action. In effect it cannot be said, in my judgment, that
there is a fair dispute as to the meaning of the terms and conditions of the
loan agreement, whereby, on the authorities the defendant is entitled to be let
in to defend the plaintiff's action. Before
I conclude this judgment, I should refer to the case of Van
Lynn Developments Ltd. V. Pelias Construction Co. Ltd.
(supra) at 825
cited to us by counsel for the
plaintiff, Mr. Awodein. The defendants in the case had a bank overdraft which
was paid off by the plaintiffs in consideration for an assignment of the debt
to themselves. The assignment was dated June 26, and on June 27 the plaintiffs
called on the defendants for payment. In the letter of June 27, it was stated
(incorrectly) that notice of the assignment had previously been given to the
defendants. On the question whether the letter of June 27 constituted a valid
notice of assignment, and as to the propriety of D
the procedure for summary
judgment in that circumstance Lord Denning, M.R.
said:- There was one sentence in that letter which was inaccurate. It is the sentence, "Notice of this Assignment has already been given to you." That was wrong. No notice of assignment had been given. But the question is whether, in spite of that wrong statement, the letter itself is a notice of assignment such as to satisfy the statute. That is a pure question of law. It is a point which we can decide today. It is an arguable point, no doubt, but I do not think we should give leave to defend simply to have it argued again. This court is in as good a position as it ever will be to decide the matter. So I think we should decide it, even under R.S.C. Ord. 14. Lord
Denning having considered all the relevant law then held:- The
assignment is properly sued on here. I do not see that there is any defence of
any substance in the case whatsoever. Some-thing was said about the new wording
of R.S.C., Ord. 14 r.3. I do not think it makes any alteration from the previous
wording. It only states in simple words the principles on which we have acted CI
for many years under R.S.C., Ord. 14. The Judge gave leave to defend conditional on the full amount being paid into court. The defence was so shadowy that the condition was rightly imposed. On
that authority if I had held that there is a fair dispute as to when the time
for the repayment of the loan would begin to run, I would have resolved that
issue here and now. Although it would be then an arguable point which might
entitle the defendant to leave to defend the action, yet because (1) no
difficult question of construction is involved and (2) no other point is
involved,
I would not have remitted the case to the trial court for a decision in it. I
have held that the lower court was wrong in its decision that time for the
repayment of the loan began to run from the time the contract agreement was
signed. I would have held that time for the repayment of the loan would begin to
run from the time the defendant fully utilised the loan. The fate of the
plaintiff's claim would then depend on whether or not it instituted its action
after 4 years of the admitted date when the defendant utilised the loan In
sum, I dismiss the defendant's appeal. I affirm the decision of the lower court
entering summary judgment in favour of the plaintiff as follows:- Judgment is hereby entered in favour of the Appellant and against the Respondent, in the sum of N93,490.95. The Respondent shall also pay all the accumulated interests at the rate of 9½ percent per annum, from the 1st October, 1984 to date. In addition the judgment debt shall yield interest at the rate of 4½ % until the final liquidation of the total debt. I assess costs in favour of the appellant at N250.00 in this court and N150.00 at the court below. I
award the plaintiff/respondent the costs of this appeal against the
defendant/appellant which I assess at N500.00.
Judgment
delivered by Nnamani, J.S.C. I
had a preview of the judgment just delivered by my learned brother, Agbaje,
J.S.C., and I entirely agree with his reasoning and conclusions. My learned
brother has so exhaustively dealt with all the issues raised before us that my
comments here are only by way of emphasis. The
whole question of the principles governing the application of Order The
only matters on which I wish to comment are firstly, whether as submitted to us
the Court of Appeal was wrong to have construed the relevant document in this
case in its attempt to see if there was a fair dispute between the parties,
and secondly, whether the case ought to have been remitted to
a lower court to determine. On
the first issue, I would wish to emphasise that by its very nature the Order 10
procedure means that a judgment is given without taking the defence of
defendant. It does seem to me that in deciding whether there is a fair dispute
to justify letting in the defence, one ought to be fully satisfied that there
is no defence, or that there is only sham defence that would result in delay
before refusing leave. I gratefully
adopt the comments of Lord Halsbury, Lord Chancellor in Jacob's
V. A Booth's Distillery Company (1901-2)
Vol.85 Law Times Report 212 R.L. There the learned L9rd Chancellor said:- There
are some things too plain for argument; and where there were pleas put in simply
for the purpose of delay....... and where it was not in aid of justice that such
things should continue, Order XIV was intended to put an end to that state of
things…… It
would seem to me that the emphasis is that the defence is merely putting up
something just for purposes of argument. See Aniagolu, J.S.C.,
in Nishizawa's
case. In
the instant case, I see nothing in the statement of defence or the affidavit
filed by the defendant to indicate that there is any real defence to the claim.
Paragraph 7 of the statement of defence merely stated The
defendant shall at the trial of this action contend that the plaintiff's action
herein is premature. No
further details followed. In the affidavit to show cause filed by defendant,
there is nothing definite on which one can focus a defence. As my learned
brother rightly stated, some of the admissions of the paragraphs of the
affidavit of the plaintiff knock the bottom out of such a defence. Besides, some
of the defendant's assertions cannot be entertained such as to vary the written
document agreed by both parties. It
is perhaps only to determine why the defendant says the action is premature, and
also to see the basis on which
Adeniji, J., granted leave to defend, that one
looks at the agreement of loan between the parties. Exhibit P2 has been set down
by my learned brother and I therefore need not put down all the contents. I
shall only refer to paragraphs 3 and 4 thereof. These read
as follows: 3.
Period:
This
facility is available for a maximum period of 4 years in accordance with the
repayment programme as contained in paragraph 5 below. 4. Availability: This loan will be made available to you immediately upon your acceptance of and compliance with its terms and conditions. Disbursements will however take the form of direct payment to your contractors against the certificate of an approved Architect/Quantity Surveyor.
From
the terms of Exhibit P2, there is no doubt in my mind that the loan was Equally
in the case in hand it is very relevant to look into the documents attached to
the affidavit of the applicant to see if the Respondent
has any defence to the action. Also
while stating the facts of the case the learned Justice said that – One of the conditions of offering the loan was that it would be repaid, with interest, within four years of the signature of the agreement. Learned
counsel to the appellant complained that the Court of Appeal ought not to have
construed the documents. Infact I have not seen where the Court of Appeal
engaged in any construction of the terms of the document, Exhibit P2. The
portion I set down above was not as a result of any construction exercise. It
came, albeit erroneously, while the learned Justice was setting down the facts
of the case. In any case I do not see how the Court of Appeal could find out if
there is a fair dispute without looking at the document In the first place there is the issue of when the four years is to be calculated - from the date of the agreement or from the date the grant of N70,000 to the applicant was completely made. In
his own remarks Coker, J.S.C. said, The
question is when was repayment of the loan to commence? The two parties have
advanced different construction of the loan agreement. The two versions appear
plausible. I
am of the view that if that had been the situation now that the question of
leave to defend is being considered, it would have been possible to hold that
there is a fair dispute and that leave to defend ought to be granted. That is
not the situation now. As stated earlier, the only dispute can only be as to
when the 4 years is to commence. The Court of Appeal mentioned date of signature
of the agreement. I think this, with respect, is wrong. From paragraph 4 of
Exhibit P2, it can only be from the date when the loan was fully utilised. In
effect, therefore, even if one conceded this as the time of commencement of
the 4 years, there would still be nothing for the defendant to defend. This is
because the loan facility was fully utilised on 30/7/80 while the present action
was instituted on 21/11/84 - well over 4 years. As
regards the second issue I mentioned above, there would be no need to remit the
matter to a lower court even if it was a matter in which leave to defend was to
be granted. As mentioned in Nishizawa, by virtue of Section 22 of the Supreme
Court Act, 1960, this court can make an order which the lower court would have
made.
In
all the circumstances, I also dismiss this appeal and endorse all the orders
made by my learned brother including the order for costs. Judgment
delivered by Karibi-Whyte, J.S.C.` The
issue for determination in this appeal is u
~ frequent in our Courts. It
calls for determination of the grounds under which the trial Judge, in an
application by a Plaintiff under Order X rr. 1 and 3 of the High Court of Lagos
(Civil Procedure) Rules for summary judgment can refuse the application, and
allow the Defendant to defend the action. The
facts of this case which are fairly simple and to a very large extent Bot in
dispute, are as follows – Respondent,
a Merchant Bank; was the appellant in the court below; and A the plaintiff in
the court of trial. The present appellant was the defendant to the action.
Sometime in April, 1980, at his own request made to the respondent, appellant
was granted a loan of N70,000.00 for the purpose of completing two bungalows
then under construction at Ogba Residential Estate costing N113,000.00. The sum
of N70,000 .00 was the maximum amount respondent could grant appellant under
this arrangement. The parties agreed that the conditions of repayment was to be
as stipulated in paragraph 5 of their agreement which reads as follows – 5.
REPAYMENT: Repayment
is to be effected in full within
four years from either (a)
rental
income on the two bungalows estimated at N12,000.00 per annum i.e. N24,000.00
per annum or/and (b)
any
other sources In
the case of (a) we are to be given an irrevocable letter of undertaking by your
Letting Agents domiciling all
the rental income on the
property to us.
The
agreement provided for when and how the agreed loan would be made available
to the appellant, on his "immediately....
acceptance of and compliance with its terms and conditions."
It also provided that
disbursement would be made by direct payment to appellant's contractors against
the certificate of an approved Architect/Quantity Surveyor. There are other
terms which are not material to the issue in this appeal. The agreement was
signed and the terms accepted by the Appellant in a Memorandum of acceptance
dated the 29th April, 1980. On
the 21st November, 1984, respondent as plaintiff issued a writ of summons
endorsed and claiming from the appellant/defendant, the sum of N93,490.95k being
the amount due and payable by the defendant to plaintiff as at 30th September,
1984 for money lent in form of a loan to defendant The
writ of summons was accompanied with a statement of claim which averred in
paragraph 4, thereof that appellant made full use of the loan and that as at
30th September, 1984, appellant's loan account stood at 6 N3,490.95k. It was
also averred at paragraphs that defendant had refused to pay the outstanding sum
with interest despite repeated demands. Paragraphs 6,7,8 and 9 averred
reliance on the statement of account, and letters of demand by the respondent to
the appellant. Appellant
as defendant, entered appearance to the action, and in the statement of defence
dated 4/7/89 admitted paragraphs 1,2,3,4 and 7 of the H plaintiff's/respondent's
statement of claim. He denied paragraphs 5,6,8,9 and 10 of the statement of
claim. Thus defendant/appellant is admitting that respondent granted to him a
loan of N70,000.00 under the conditions stated therein. It is also admitted
that as at 30/9/84 he had made full use of the loan On
receipt of the statement of defence, counsel to the plaintiff issued a summons
under Order 10 rules 1 & 2, entering summary judgment for the 5.
That
it was mutually agreed between the plaintiff and myself that time is not of the
essence of the agreement. x
x
x x 7.
That
I am made to understand by the plaintiff before agreeing The
summons came before Adeniji J. for trial. In his ruling, he relied on the letter
dated 25th April, 1980, to hold that there is a fair dispute as to the meaning
of the terms of agreement between the parties, 'and that questions might
arise from which the defendant
may wish to submit to the Court." After setting out the contents of the
letter and observing that as a consequence of the ambiguity a firm of
chartered surveyors and valuers were appointed as Sole Managing Agents, the
learned judge held, Since the facts and particulars here show that this is a fair dispute as to the meaning of the loan terms and questions of facts may arise, I think it is right in the circumstances to grant the defendant leave to defend this suit.
He
relied on Ford
V. Harvey & Ors.
(1893) QBD.328. Plaintiff appealed
against the judgment. The Court of Appeal allowed the appeal and set aside the
judgment of the learned trial Judge giving unconditional leave 6 to defendants
to defend the action. The
Court of Appeal referred to Order 10 r.3 and to the affidavit of the defendant
seeking leave to defend the action. The court also referred to the tern's and
conditions of the agreement relating to repayment particularly clause 5 thereof. It
was observed that the issue between the parties in this case is whether in
view of the terms of clause 5 repayment of the loan is to be effected in full The
court relying on Nishizawa
Ltd. V. Jethwani
(1984)12 S.C. 234 rejected
the submission of counsel to the defendant/respondent that under A Order 10
procedure the court cannot construe documents. The court observed and pointed
out that in that case the Supreme Court referred to a number of documents
attached to the affidavit in support of the application in determining whether
the defendant had raised a defence to the action. In
their construction of the provisions of clause 5, the court of Appeal held, at
p.92 In
clause 5, it is agreed that repayment is to be effected in full within four
years from either (a) rental income or (h) any other sources. In other words, if
the repayment could not be effected through rental income the respondent must
offset the loan through any other sources, but within four years. On
this construction of clause 5 of the agreement the court of Appeal held that the
defendant has not raised any defence to the claim both in the statement of
defence and in the affidavit filed in support
of a defence. It was accordingly
held that there is no defence to the action for failure to repay the loan with
interest within four years as he undertook to do when accepted the loan. The
statement of defence and affidavit having not raised a triable Defendant/respondent
appealed against the decision of the court of Appeal. It is this appeal that is
now before us. There are three grounds of appeal. The grounds of appeal
summarily stated are as follows: I.
The
court erred in law in holding that the parties agreed that the repayment of the
loan was to be in full within four years of the signature of the agreement. 2.
That
the court of Appeal erred in law by deciding the issue in dispute solely on
affidavit evidence, when the issue was whether the defendant had made a prima
facie case to entitle him to defend the action. 3.
Judgment
is against the weight of evidence. Counsel
to the parties filed briefs of argument. They relied on their briefs and
elaborated on arguments therein in their oral argument before us. 1.
Whether
or not from the state of the pleadings the main issue joined between the parties
turns on the construction of the terms and conditions of the agreement between
the parties. 2.
Whether
or not the finding of the learned trial Judge that the appellant made out a prima
facie case which ought to be tried being a finding of fact based on the
totality of the evidence before the court ought to have been disturbed by the
court of Appeal. 3.
Whether
or not Order lo rules I and 2 procedure is appropriate in the circumstance of
this case particularly in construing and NOT inspecting documents to wit the
terms and conditions of the agreement without the assistance of the arguments of
both counsel and purely on affidavit evidence. 4.
Whether
or not the parties from the materials before the court agreed
"That the loan would be repaid, with interests, within four years
of the signature of the agreement," and if so whose signature. The
formulation of issues 1, 3, and 4 are based on the question of construction
and whether the subject matter of the action was appropriate under Order X rr. 1
and 2. Only issue 2 seems to me different. I think the three issues formulated
by counsel to the respondent more appropriately cover the issues involved in
this appeal. The respondent's formulation of the issues are (a)
Whether
the Court of Appeal was right in holding that appellant had no arguable defence
to the claim and in entering judgment for the respondent accordingly. (b)
Whether
the Court of Appeal was right in examining and construing the relevant
documents in evidence in its determination of the case. (c) Whether a proper application of the relevant provisions of the said Order 10 precludes in all events examination and construction of relevant documents produced in evidence. I
think these issues cover all the grounds of appeal filed. Counsel to the
appellants after formulating issues for determination, abandoned the issues so
formulated and in his argument in his brief relied on his grounds of appeal.
This is a wrong approach. This court has advised counsel arguing appeals to
rely on the issues formulated rather than the grounds of appeal. This is because
it is on the basis of the issues that the parties found their contention.
Although erroneous, the first ground of appeal filed would seem to me to be
covered by the first issue for determination. I consider it convenient to start
with this issue because it is capable of determining the central issue in this
cause; and that is, whether the court of Appeal was right in holding that appellant
did not in his statement of defence and affidavit disclose an arguable defence
against the claim. The
relevant provision of Order to rule 1. provides as follows - (a) Where the defendant appears to a writ of summons specially endorsed with or accompanied by a statement of claim under Order 3 Rule 4, the plaintiff may on affidavit made by himself or by any other person who can swear positively to the facts verifying the cause of action and the amount claimed, (if any Liquidated sum is claimed), and stating that in his belief there is no defence to the action except as to the amount of damages claimed, if any, apply to a Judge in Chambers for liberty to enter judgment for such remedy or relief as upon the statement of claim the plaintiff may be entitled to. The Judge thereupon, unless the defendant shall satisfy him that he has a good defence to the action on merits or shall disclose such facts as may lie deemed sufficient to entitle him to defend the action generally, may make an order empowering the plaintiff to enter such judgment as may be just, having regard to the nature of the remedy or relief claimed.. This
is the provision relied upon by both parties. It has not been disputed at any
stage that plaintiff has brought his action within the provisions of the (a)
a
claim for libel, slander, malicious prosecution, false imprisonment, seduction
and breach of promise of marriage; and, (b)
a
claim based on allegation of fraud. Thus
every other action where liquidated damages have been claimed, or even
unliquidated damages may be recovered under this rule if there is no real
defence to the action. - See Dummer
V. Broom
(1953)1 QB.710.
The
procedure is such
that once the writ of summons is specially indorsed or served with the
statement of claim, and is supported with the statement of claim, and is
supported with an affidavit which has sworn positively as to the facts
establishing the cause of action and is proof of the amount claimed, and that in
his opinion there is no defence to the action, he is
entitled to judgment as
claimed. However, the defendant can be allowed to defend where he is able to
satisfy the Judge by his statement of defence or affidavit that
(1)
he has a good defence on the merits of the case or (2)
he
can disclose such facts as may be deemed sufficient to entitle him to defend the
action generally, (3) the claim does not come within the purview of Order 3 rule 4. Causes involving
interpretation of documents are not one of those named in Order 3 rule 4 as
those excluded from the procedure under Order 10 rule 1. It is therefore a clear
misunderstanding of the scope of order 10 rule 1
to contend as was done before us
by Counsel to the appellants that the provisions of Order 10 rule 1 cannot be
invoked to determine issues involving construction of documents. This disposes
of the third issue. I
now turn to the determination of the remaining two issues whether the Court of
Appeal was right in holding that defendant had no arguable defend to the claim
against him; and whether it is right in examining and construing the documents
subject-matter of the action. It
is appropriate for the determination of the issue whether there is a defence
to the claim to determine whether the Court of Appeal was right in construing
the document in evidence. It is common
ground between the parties that the terms for the repayment of the loan are as
stipulated in paragraph 5 of the Agreement. Counsel
to the appellant submitted to us that the finding of the Court of Appeal that
"One of the conditions of offering the loan was that it could be repaid
with interest, within four years of the signature of the
agreement"
is a reading into the agreement
a term not made by the parties. He argued that the view of the Court of Appeal
resulting in their taking a completely erroneous view
of the real issue before it, which was whether on the totality of the evidence
before the High Court, the appellant had made out a prima
facie case. Counsel then submitted that the High Court was right in its
finding based on the totality of the evidence that appellant has a defence to
the action. - See Holman Bros. (Nig.)
Ltd. V. Kigo (1980) 8-11
S.C. 43. It was contended relying on Woluchem
V. Gudi (1981) 5 S.C. 291
that being a finding fact, the Court of Appeal ought not to interfere by making
a fresh appraisal of the same evidence and thereby arriving at a different
conclusion from the Court of trial. Counsel
to the respondent in supporting the decision of the Court of Appeal has argued
that the Court below was justified in appraising the evidence before the trial
Judge because he had failed in relation to the claim to do so.I agree entirely
with this submission. It is well settled, that primarily it is the duty of the
trial Judge to appraise evidence before it. But this duty is only inviolable
where the evidence is one of hearing and seeing the witnesses where the
impression of credibility and veracity is formed from oral testimony. In such
cases it is inadvisable and indeed unwise for the appellate court to interfere
with the impressions formed of such evidence by the trial The
affidavit evidence before the trial Judge related to undisputed facts as to the
existence of the Agreement for the loan, its amount, the fact that the loan had
been utilised, and that the purpose for which it was granted had been
accomplished. There was also no dispute that the loan was to be repaid within a
period of four years, as stipulated in the Agreement. The only area of apparent
dispute was whether time is of the essence of the agreement, in In
his consideration of the evidence before him the learned trial Judge had the
letter of offer to the appellant dated 25th April, 1980 containing the terms and
conditions for repayment. This offer was accepted by the appellant on the 29th
April, 1980. In the absence of any other date stipulated by the parties for its
taking effect, the contract became operative on the 29th Mr.
Joseph, counsel to the appellant has maintained in his argument be-fore us that
time was not of the essence of the contract and that a construction of clause
5 of the agreement does not suggest that it is. Mr. Kola Awodein, for the
respondent maintains his argument in the court below that time was of the
essence. He submitted in support of the judgment of the court below that the
loan was repayable within four years of the operative date of the contract. It
is immaterial whether payment was made from rental of the bungalows or from any
other sources. I
have myself read the agreement and clause 5 in issue and find no ambiguity in
its terms. It provides for the repayment in full within four years. either from
(a) rental income (b) any other sources. I
think the Court of Appeal was justified in its construction of the clause to
mean. if the repayment could not be affected through rental income the respondent must off-set the loan through any sources, but within four years. It
is clear that the governing and controlling consideration is the repayment of
the loan within four years. This could be made through rentals from the
bungalows the purpose of the loan, or by any other means available to the appellant. The
operative date of the contract for the loan was on the 29th April. F
1980. The action for the recovery
of the loan with interest was instituted on the 21st November, 1984 a period of
more than four years. There is no averment in appellant's affidavit that he
has repaid the loan or any part of it with interest either within the period or
outside the period of four years stipulated by the parties. This
now takes me to the main consideration in this appeal whether in view of the
foregoing, the trial Judge was wrong to hold that the appellant was entitled to
be allowed to defend the action as was held by the Court below. Under
the Order 10 procedure under which this action was brought, a defendant can only
be allowed by the trial Judge to defend the action where (a)
that
the defendant has a good defence to the action on the merits, or (b)
that
the defendant has disclosed such facts as may be deemed sufficient to entitle
him to defend the action generally. The
object of the Order 10 procedure is to enable plaintiffs whose claim is
unarguable in law and where the facts are undisputed, and it is inexpedient to
allow a defendant to defend for mere purposes of delay to enter judgment in
respect of the amount claimed - See Jones
V. Stone (1894) A.C. 122 The
maxim interest rei publicae Ut
sit finis litium
is the mother of this procedure
as in all forms of action which seek to reduce the volume of litigation. In
Nishizawa
V. S. M. Jethwani Ltd.
supra Aniagolu, J.S.C., in line with older decided cases stated the principles
governing the determination of the granqt of leave to defendant to defend
actions under Order 10 procedure. 1.
That
a defendant who has no real defence to the action should not be allowed to
dribble and frustrate the plaintiff and cheat him out of the judgment he is
legitimately entitled to by delay tactics aimed, not at offering any real
defence to the action but at gaining time within which he may continue to
postpone meeting his obligation and indebtedness; and 2.
that,
on the other hand a plaintiff should not be permitted to shut out real (not a
sharm) defence to an action by his clinging to the assertion that once the
defendant has failed to “show cause against such plaintiff’s application by
affidavit” as required by Order 10 ritle3, of
Lagos High Court Rules, he is out of Court and must have a judgment
signed against him no matter how genuine a defence he has disclosed by means
other than by affidavit under that rule of the Order It
is clear from the above only a real defence and not a sham intended to delay and
frustrate will be allowed. In fact the rule speaks of a good defence Thus
to allow a defendant a right to defend where plaintiff has shown his claim is prima
facie
unassailable, he must show that
he has a fair case which is bona
fide
and that there is a substantial
issue which ought to be tried. I
do not think it is the difficulty in the point of law involved or construction
of a question that should be considered. In my opinion once it is understood
that the point of law if construed is unanswerable, the plaintiff is entitled
to summary judgment - See Cow v. Casey
(1949)1 K.B. 474 at p.481. In
such a circumstance it is inconceivable that a defendant can establish a defence
on the merits. The defendant ought to show that either on grounds of law or of
some disputed facts which ought to be resolved he is entitled to defend the
action. It is immaterial that he may ultimately lose the action - but there is a
substantial question of law or fact which ought to be tried. I
have read both the statement of defence and the affidavit filed by the
appellant, and I agree entirely with the Court of Appeal that "there is fair There
is therefore no defence to the respondent's claim for failure to repay the loan
with interest within four years as he agreed to do when he took the loan. All
the grounds of appeal therefore fail and are dismissed. The appeal is
accordingly dismissed. The judgment of the Court of Appeal entering judgment for
the appellant in that Court and respondent in this Court is hereby affirmed. I
have read the judgment of my learned brother, Agbaje, J.S.C.; I agree with his
reasoning and conclusion that this appeal he dismissed. Appellant
shall pay to the respondent the costs of this appeal assessed as N500 in this
Court, and N300 in the Court below.
Judgment
delivered by Belgore, J.S.C. I
have read in advance the
judgment of my learned brother,
Agbaje, J.S.C., and
I am in complete agreement with him that this appeal has no substance. I also
for the reasons contained in the said judgment, which I adopt as mine, dismiss
this appeal and make the same consequential orders as made therein. Judgment
delivered by Wali, J.S.C. I
have had a preview of the lead
judgment of my learned brother, Agbaje, J.S.C., and I
entirely agree with it. For the
same reasons contained in the judgment, I too hereby dismiss the appeal and
adopt the consequential orders made therein, including that of costs. Counsel
|