Guaranty Trust Bank PLC V. Toyed Nigeria Limited & Anor (2016)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

UZO I. NDUKWE-ANYANWU, J.C.A. (Delivering the Leading Judgment)

This is an appeal against the decision of the High Court of Lagos State delivered on the 3rd of June, 2013 by Hon. Justice O. O. Oke.

By a further amended Writ of Summons together with a Statement of Claim, the Claimant now Appellant claimed against the 1st and 2nd Defendants now 1st and 2nd Respondents as follows:

“1.2.1. From the 1st and 2nd Defendants jointly and severally the sum of N5,044,636.03 (Five Million and Forty Four Thousand, Six Hundred and Thirty Six Naira, and Three Kobo) being the principal and accrued interest as at 28/2/07 and compound interest on the said sum at the rate of 29% per annum from 28/2/07, until judgment is delivered and the final liquidation of the judgment debt.

1.2.2. Against the 2nd Defendant only, a declaration that the claimant upon 1st Defendant’s default of the repayment of the loan facility and accrued interest is entitled to sell the property situate at Plot 3, Adisa Ogunwemimo Street, Idimu Road Agege, comprised in a Deed dated 6/11/75 and presently registered as No. 79 at page 79 in Volume 1531, of the

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Land Registry, Lagos, now at Alausa and also comprised in a Deed registered as 05/95/1363 at the Land Registry, Alausa and

1.2.3. Against the 1st and 2nd Defendants, legal fees and cost of this recovery action in the sum of N500,000”

It was the case of the Appellant that the 1st Respondent is a customer of the Appellant bank and had by a resolution of its Board of Directors dated 2nd April, 1997 applied for two loan facilities from the Appellant as follows:

1. Bankers Acceptance facility in the sum of N2,000,000.00 and
2. Over draft facility in the sum of N1,000,000.00

In response, the Appellant issued a Letter of Offer dated 20th August, 1997 (Exhibit B) approving the two loans subject to the fulfillment of the following conditions for drawdown by the Respondent:

1. Acceptance of loan offer;
2. Board resolution of the 1st Respondent accepting the loan facility;
3. Deposit of title documents of the 2nd Respondent’s property situated at Plot 3, Adisa Ogunwemimo Street, Idimu Road, Agege supported by a duly executed memorandum of deposit and Power of Attorney;
4. Execution of a deed of personal guarantee of the

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loan facilities by the 2nd Respondent;

5. Deposit of original share certificates for various quoted Companies duly verified and supported by a duly executed memorandum of deposit consent to sell and the blank share transfer forms;
6. Re-imbursement of legal cost and fees of recovering the loan facilities.

The offer was accepted by the Respondents and the necessary conditions for drawdown were fulfilled by the Respondent including the execution of an overdraft facility agreement dated 20th August, 1997 (Exhibit R). The 1st Respondent however defaulted in the repayment of the loan facility. The Appellant then facilitated a stock broking house to sell the shares of the 2nd Respondent in its custody but the proceeds of the shares was insufficient to liquidate the loan facility with interest and the Appellant called the Respondents to pay the outstanding balance which was refused by the Respondents. Hence the Appellant commenced this action at the lower Court.

In response, the Respondents filed a further amended Statement of Defence and Counter claimed wherein the claimed as follows: