Veepee Industries Limited V. Cocoa Industries Limited (2008)

LAWGLOBAL HUB Lead Judgment Report

T. MUHAMMAD, J.S.C.

The claim of the appellant herein, who was the plaintiff at the Lagos State High Court of Justice, holden at Ikeja (trial court), as per the specially indorsed writ is for:

“the sum of N553,316.08 (five hundred and fifty-three thousand, three hundred and sixteen naira eighty kobo) with interest at the rate of 35% per annum from the 24th of February, 1992 till judgment in this case and thereafter at the same rate of interest until the total debt is finally and fully settled.”

Paragraph 13 of the plaintiff’s statement of claim repeated the above claim. In its statement of defence the defendant pleaded not liable to the sum claimed as same had been paid and not liable also to any interest whatsoever. In its judgment in default of defence by the defendant, the trial court entered judgment in the said sum including the 35% interest as claimed by the plaintiff. Dissatisfied with that decision, the defendant/respondent appealed to the court below. The court below found merit in the appeal and allowed the appeal. It set aside the award of 35% interest made by the trial court and in its place dismissed the plaintiff’s claim as regards pre-judgment interest.

Dissatisfied again, the plaintiff is now on appeal before this court. Learned counsel for the parties filed and exchanged their respective briefs of argument. Learned counsel for the appellant formulated two issues for determination. They are as follows:

“[i] Whether the appellant proved the rate of interest awarded by the trial court, by evidence.

[ii] Whether pre-judgment interest could not have been awarded (even if the 35% award was not proved or claimed).”

Learned counsel for the appellant made submissions in respect of the two issues above. On issue 1, learned counsel submitted that the rate of interest claimed by the appellant was specifically pleaded especially in paragraphs 10, 11 and 12 of the statement of claim. The appellant also claimed categorically in paragraph 13 of the statement of claim the sum of N551,316.08 with interest at the rate of 35% from 24th of February, 1992 to the date of judgment in this case and thereafter at the same rate of interest until the total debt is finally and fully liquidated. The learned counsel argued further, after referring to paragraphs 2 and of the respondent’s statement of defence, that although the respondent generally denied the categorical averment that bank interest rate fluctuated around 35% between 1992 and 16th August, 1993 (when the statement of claim was dated) it did not contrary state what bank interest rate was but agreed inter alia that there was a fluctuation in the bank rate.

It was appellant’s argument that the case did not go to full trial by oral evidence but upon an application for summary judgment based upon documentary admission and under the then order 10 procedure of the High Court of Lagos State (Civil Procedure) Rules, 1972. The appellant, it was submitted, caused an affidavit to be deposed to in support of the application wherein evidence was proffered in support of the appellant’s pleadings. Learned counsel cited the provision of paragraph 17 of the said affidavit. Learned counsel stated that the attention of the lower court was drawn to the said affidavit in support, yet concluded that there was no proof to justify the claim of 35% rate of interest, by the appellant.

The learned counsel for the appellant made reference to the deposition in paragraph 5 of the counter affidavit of the defendant and submitted that in a situation where the appellant’s case or pleading was supported by categoric affidavit evidence that the prevailing bank rate was about 35% but the fact asserted by the appellant could neither be admitted nor denied the court of appeal should have upheld the judgment of the High Court which awarded 35% interest claimed and proved by the appellant. In other words, it was further argued, the court of appeal should have held that the fact of 35% interest rate pleaded and claimed was established by balance of probability or preponderance of evidence. The cases of Odofin and Others V. Mogaji and others (1978) NSCC. 275;(1978) 4 SC 91; Olujinle v. Adeagbo (1988) 1 NSSC 625, 636;(1988) 2 NWLR (Pt. 75) 238, were cited and relied upon. Learned counsel argued further that the one sided evidence given by the appellant on bank interest rate was worthy of belief as not only was the fact notorious at that time, the pleading to the effect was not contradicted by the respondent suggesting another prevailing bank interest. And that by the provision of section 155(1) of the Evidence Act, all persons except those exempted by the court are competent to testify, including a court clerk especially when he was not an under age nor of unsound mind. Learned counsel urged us to hold that nowadays it is not only bankers who could know about bank interest rate, others, including court clerks, could and that we should hold that the appellant proved that 35% bank rate of interest.

In his submissions, learned counsel for the respondent argued on issue (1) that recourse must be had to what the plaintiff claimed in its writ and statement of claim vis-a-vis the evidence adduced in proving them as to be entitled to judgment on the claim. It was submitted further that the proceedings at the court of first instance was heard under Order 10 of the High court of Lagos state (Civil procedure) Rules of 1972 and rule 1(a) of that order stipulates how the plaintiff must prove its claim so as to be entitled to judgment without having to go through the rigours of trial. The plaintiff was obliged to place before the court a verifying affidavit which must positively set out the facts founding and proving the claim. The plaintiff placed before the court an affidavit deposed to by one Mr. Emmanuel Edokpolor in his capacity as a clerk in the office of the solicitors to the plaintiff as intended proof of the averments in paragraphs 3 and 12 of the statement of claim relating to the claim for interest. He challenged the judgment of the court of first instance that it did not adduce any reason. He added that the decision of the court awarding separate rates of interests for the period from judgment until payment is however, indicative that the award of 35% as pre-judgment interest was as specified damages. Further that an averment in a pleading is not proved in a summary judgment by merely repeating it without more. A law clerk must disclose how he came about the information founding his evidence on the bank interest rate as per sections 86, 88 and 89 of the evidence act. Evidence must be direct, cogent and not speculative. Emmanuel Edokpolor’s depositing to the effect that the applicable bank interest rate was about 35%, was vague, uncertain and speculative. He ought to have stated precisely what the interest rate was and whether it was daily, weekly, monthly or annually. The learned trial judge did not at all, appraise the affidavit evidence placed before him vis-a-vis the claim for interest at the rate of 35% per annum.

Further, no evidence was placed before him to explain 35% rate claimed but went ahead to award prejudgment interest of the claimed rate as if it was a matter of course. And, that on the authority of Ekwunife v. Whyne (1989) 5 NWLR (pt122) 422; Isola v. Societe General Bank Nig. Ltd. (1997) 2 NWLR (pt 488) 405, the Court of Appeal rightly set aside the decision of the court of first instance on the ground that it was evidentially unfounded. Learned counsel urged us to resolve issue no 1 in favour of the respondent.

In his arguments on issue no.2, the learned counsel for the appellant submitted that not only the Court of Appeal found that ante-judgment interest was claimed but it held that payment of the same (at bank rate) was agreed even though it also held (though not conceded by learned counsel) that the 35% rate awarded was not proved. He argued further that in the circumstance, having regard to the demand of justice (the fact that the respondent had unjustly withheld the appellant’s money and benefited therefrom to the fact that the naira had notoriously drastically declined in value) the Court of Appeal should have applied its inherent or discretionary power to substitute the rate of interest even if lower than 35% claimed but not lower than 21% which the respondent had conceded on record. It was naked injustice for the Court of Appeal, says learned counsel for the appellant, for the Court of Appeal not to award interest at all. He argued this court to award substantial interest even if the 35% rate claimed was not proved.

Still under issue no.2, learned counsel for the appellant acknowledges the decision of this court in the case of Ekwunife V. Wayne (West Africa) Ltd. (1989) 3 NSCC, 352 at 339, which was followed by the Court of Appeal in arriving at its decision. Learned counsel invited this court to reverse or depart from its decision in Ekwunife’s case (supra). Learned counsel acknowledged as well the existing law in Nigeria on the award of pre-judgment interest in that the courts will not award such interest on a debt or damages unless it is claimed and proved as of right or it is permitted by statute. Learned counsel, referred, analyzed and contrasted some of the cases decided on interest by the court. They include Ekwunife v. Wayne (supra); Jalico Ltd. v. Owoniboyi Ltd. (1995) SCNJ. 25;(1995) 4 NWLR (Pt. 391) 534. Learned counsel stated his reasons why this court should overrule itself or reverse its previous decision. He summarised the reasons as follows: