Royal Exchange Assurance Nigeria Ltd & Ors. V. Aswani Ile Industries Ltd (1992)

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G. KARIBI-WHYTE, J.S.C. 

On Monday the 6th January, 1992, I dismissed the application of the applicants seeking more favourable terms than was imposed for repayment of the judgment by the Court below. I however in the interest of substantial justice varied the terms somewhat, and indicated that fuller reasons for so doing will be given today. This I now proceed to do below.

The ruling is sequel to the Motion on Notice of the Applicants seeking a stay of execution of the judgment of the Court of Appeal, Lagos delivered on the 11th day of February 1991 on more favourable terms pending the hearing and determination of the appeal against the said judgment. Applicant also prayed for such further and/or other orders as this Honourable Court may deem fit to make in the circumstances

The facts of this case are not in dispute. They are that the Respondents, a ile manufacturing company, insured its assets for twelve months with a consortium of nine insurance companies, led by the Applicant. On the 6th March, 1982 i.e. 25 days to the renewal of the insurance on the 31st March, 1982, the Respondents insured properties suffered a fire incident, and-were considerably damaged or completely destroyed by fire. The fire incident was reported to a member of the Consortium, the New India Insurance Company Ltd, on the same day. Notice of claims for loss was given to, all the members of the Consortium, Loss Adjusters were appointed. Respondent made a claim for 31 Million Naira. The Adjusters came out with a claim for N25,091,253.

Negotiations for settlement commenced. A committee of three members of the Consortium was appointed and duly opened negotiation. Settlement was reached on the amount found by the Loss Adjusters. The New India Insurance Company Ltd. one of the members of the settlement Committee wrote to the Respondent offering N25,091,253 in settlement – Exh A. Respondent accepted the offer in Exh.5. However, some members of the Consortium disclaimed liability of the agreed sum of N25,091,253. Respondent therefore brought an action in the High Court, Lagos, “claiming the agreed amount of N25,091,253, with interest at 14% per annum from the 21st October, 1982 up to date.’

The suit was tried on pleadings. The learned Judge awarded the amount claimed in favour of the Respondent. Applicants appeal to the Court below was dismissed on the 11th February 1991. Applicant appealed to this Court and applied to the Court of Appeal for a stay of execution pending the determination of the appeal to this Court. The Court of Appeal on the 14th May, 1991 granted the application on the following conditions –

“1. Applicants shall within thirty days from today, pay over to the Respondents, the judgment debt plus interest.

2. Upon payment Respondent shall, within 14 days procure a Bank Guarantee from the Continental Merchant Bank Nigeria Limited of Marble House, I Kingsway Road, Ikoyi, Lagos, for the refund of the total amount plus interest on same at the prevailing Bank rate between now and the date of the judgment of the Supreme Court should the appeal be successful.

The application before us is for more favourable terms than the above.

In his argument before us, Kehinde Sofola SAN’s idea of more favourable terms is the grant of stay of execution without conditions. He submitted that if the money was paid, Respondent would have benefited even if they could refund in the event of a successful appeal. Applicant can pay with interest if the appeal fails and does not require any Bank Guarantee for the purpose.

Chief Williams in reply pointed out that the only issues between the parties are the terms. Respondents are not now concerned with the stay of execution, or whether there is an arguable appeal. The question is, on what terms should the stay of execution be granted Learned Counsel referred to the Bank Guarantee on the part of the Respondent. This has been negotiated and provided. The Guarantee covers the case. Chief Williams refers to the interest of 14% referred to in the judgment and urged us to take judicial notice of inflation. It was finally submitted that the real issue is whether there should be any interference with the ruling.

The principle is well settled and invariably applied that a judgment creditor is entitled to enjoy the fruits of the judgment- See Abina & Ors. v. Tika Tore Press Ltd. (1968) 1 All NLR.210. A debtor who seeks to vary the application of this principle is required to give valid reasons why the enjoyment of the fruits of the judgment by the judgment creditor should be delayed. – See lntercontractors Nig. Ltd. v. VAC. of Nigeria Ltd. (1988) 2 NWLR. (Pt.76) 303 at 325. However, this principle is not, in this case being subjected to a direct attack. The applicant has appealed against the judgment. He is not contending that he is incapable of paying the judgment debt with interest. He is also not saying that the judgment creditor will be unable to refund in the event of a successful appeal. His contention, which is curious reasoning, is that the judgment creditor is likely to benefit if the money was paid, should the appeal eventually succeed. Mr. Sofola would seem to have ignored the fact that the amount involved is a judgment debt, due in law to the Respondent. The interest of justice requires that if there should be any benefit arising therefore it should enure to the benefit of the Respondent. Yet Applicant is still keeping the money and is seeking a stay of execution.

It seems to me strange for learned Counsel to the Applicant to seek unconditional stay of execution when he is capable of repaying the judgment debt with interest in the event of his appeal being unsuccessful. Mr. Sofola was not contending that Respondent is unable to refund the judgment debt in the event of a successful appeal.

In the circumstances of this case where there is parity in the ability of the parties to make payment or refund; and where the law, and the balance of the equities is in favour of the Respondent who is the judgment creditor, it is in the interest of justice not to disturb the exercise of discretion by the Court below. Applicant who has declared his ability to pay the judgment debt cannot seriously contend that the conditions imposed are onerous or unreasonable. It is also not disputed that Respondents are not in a position to refund in the event of a successful appeal. – See Balogun v. Balogun (1969) 1 All NLR.349. On the arguments in this application, I find that the conditions are not only reasonable but also favourable to the Applicant.

I am of opinion that the Court of Appeal was right in the exercise of its discretion to impose the condition of entering into a Bank Guarantee. The application is therefore accordingly dismissed.