Lagos State Development & Property Corporation V. Citymark (West Africa) Limited (1988)

LAWGLOBAL HUB Lead Judgment Report

IGUH, J.S.C.

On the 20th day of April, 1998. I dismissed this appeal and then indicated that I would give my reasons for so doing today. I now proceed to do so.

In suit No. LD/2123/87, the plaintiff on the 9th day of November. 1989, obtained judgment against the defendant in the Lagos Judicial Division of the High Court of Lagos State in the sum of N7,787,500.00 with N2000.00 costs. The defendant having appealed against the said decision moved the trial High Court for a stay of execution of the judgment pending the determination of the appeal. This application was on the 6th day of March, 1990 granted on the following terms-

“1. The amount of N7,787,500.00 (Seven Million. Seven Hundred and Eighty-Seven Thousand, Five Hundred Naira) be deposited by the applicant in an account to be opened with the Bank of Credit and Commerce International (Nigeria) Limited, Lagos in the joint names of the applicant and respondent on or before 6th day of April, 1990; the condition being that whoever wins on appeal, shall be entitled to the amount deposited.

2. That upon compliance with Condition (1) above, the plaintiff/respondent shall lodge with the Chief Registrar, High Court, Lagos on or before the 6th day of April, 1990, a Bank Guarantee from the Bank of Credit and Commerce International (Nigeria) Limited, Lagos in the sum of N7,787,500.00(Seven Million, Seven Hundred and Eighty-Seven Thousand, Five Hundred Naira) to repay to the applicant/defendant herein the sum of N7,787,500.00 should the appeal lodged succeed.
3. That the respondent’s solicitor – namely – N. A, Dabiri & Co., be paid the sum of N2,000.00 awarded as costs, and the same to enter into undertaking on or before the 6th day of April, 1990 to refund the sum of N2,000.00 if the appeal succeeds.
4. That upon fulfillment of conditions 1 and 2 above, execution as to damages be stayed: and on fulfillment of condition 3 above, execution as to costs be stayed or both stay of execution as the case may be, pending the determination of the appeal against the aforesaid judgment.”

Being dissatisfied with the aforesaid terms, the defendant subsequently moved the Court of Appeal for better conditions for the grant of Its prayer for Stay of execution. In its application, the defendant urged the Court of Appeal to grant the stay on the following conditions and or terms –

“1. That half the judgment debt be paid to the plaintiff against a guarantee to be given by the plaintiff to return same with interest at the Central Bank’s (CBN’s) ruling rate as may be fixed from time to time in the event of this court deciding the appeal in favour of the Defendant.

2. That the defendant do give bank guarantee in respect of the other half of the judgment debt to pay the sum due under that guarantee with interest thereon at C.B.N’s interest rate as may be fixed from time to time to the plaintiff in the event of the appeal being determined in favour of the plaintiff.”

In the affidavit in support of its application, the defendant deposed inter alia as follows –

“7. That the applicant being dissatisfied with the ruling of 6th March, 1990 in respect of the stay is now seeking a variation of the said order to the effect that the applicant gives a bank guarantee to cover the judgment debt in lieu of depositing the said sum in a joint account as directed by the lower court.

8. That the applicant will be hard put to put down physical cash for the amount of the judgment debt.
9. That I am further informed by the said general manager and I verily believe that the applicant’s company operates mainly in the provision of social amenities and residential accommodation at very low cost to the masses and that the payment of cash to the magnitude of the judgment debt will cripple it’s activities in this field.
10. That I am informed by the said general manager of the applicant and I verily believe that the order of lower court in the terms made is unfair to the applicant, it was made in a manner that will enable the plaintiff/respondent utilize the amount ordered to be paid in by the defendant/applicant as a source of the instrument of guarantee from bank for credit commerce and industry.
11. That the appeal has a good chance of succeeding.
12. That the respondent will not be prejudiced if this application is granted.
13. That it will be in the interest of justice if this application is granted.

The plaintiff, in its counter-affidavit, deposed inter alia as follows-

“2. That as stated in paragraph 8 of the Judgment debtor’s affidavit before the lower court, the only ground on which it requested a stay of execution was its allegation or mere speculation of poverty on the part of the judgment creditor who, the judgment debtor stated, will find it difficult if not impossible to refund the Judgment sum should the Judgment debtor win on appeal.

3. That it was in response to the said speculation by the judgment debtor that the judgment creditor had to procure a bank guarantee from its bankers, bank of Credit and Commerce International (Nigeria) Limited at a cost of 1% of the judgment sum (i.e N77,870.00 Seventy-Seven Thousand, Eight Hundred and Seventy Naira only)apart from other collaterals which the judgment creditor had to provide at enormous costs in terms of legal expenses and corporate time, the said debit advice of the bank being herewith annexed as Exhibit “A”.

4.(a) That the business of judgment creditor had been adversely affected since 1984 when the breach of a N29.5 million contract by the judgment debtor led inter alia to the temporary withdrawal of the Foreign Technical Partners of the judgment creditor from Nigeria upon their losing confidence due to the acts of the judgment debtor and some State Governments over contracts.

(b) That the amount of US$570,000 owed by the judgment creditor to its Foreign Technical Partners which was initially equivalent to N570,000 approx. before 1985 rose to N1,890,519 in 11986 and had metamorphosed due to the continuous depreciation of the Naira and the passing of time to N4, 232, 649 in 1989 in annual leaps as follows:

Year Naira Loss Due to Depreciation

Equivalent Of the Naira Exchange Rate