Olalomi Industries Ltd. V. Nigerian Industrial Development Bank Ltd (2009)

LAWGLOBAL HUB Lead Judgment Report

A. FABIYI, J.S.C 

This is an appeal against two decisions of the Court of Appeal, Ilorin Division (court below) delivered on 19th November, 2001 and 10th December, 2001 respectively. In the first appeal, the respondent herein appealed against part of the judgment of A.O. Belgore, J. (as he then was) wherein a part of its counter-claim was granted. In the second appeal, the appellant herein appealed out of time, with the leave of the court below, against the judgment of the trial court which dismissed its own claim.

The facts that are germane for the determination of this appeal require to be set out at a reasonable length. They are amply captured in the respondent’s brief of argument. The appellant is a private limited liability company whose object was carpet production at Offa in Kwara State. The respondent is an industrial bank incorporated as a private company by the Federal Government of Nigeria.

The appellant needed fund for importation of its factory machines and equipments and approached the respondent for assistance. Two loans were granted to the appellant by the respondent. The first was a term loan. The collateral for same was the property of the appellant at Offa over which a Deed of Mortgage to wit: Exhibit 1 was executed by the parties. The second loan was a working capital loan which was secured with floating assets of the appellant over which a Deed of Debenture to wit: Exhibit 30 was also executed by the parties.

The appellant applied to the Government of Kwara State for approval of the mortgage in Exhibit 1 in line with the Land Use Act 1978. An approval that was communicated to him is incorporated into Exhibit 1 at its last page. The respondent tendered the letter of offer-Exhibit 28, containing the terms and conditions for the working capital loan accepted by the appellant which proceeded to execute Exhibit 30 in favour of the respondent. .

The appellant failed to comply with the terms and conditions for the two loans as to repayment. The respondent called for meetings to resolve the appellants’ production problems. Both parties resolved to second a staff of the respondent to the appellant as Project Manager in April, 1989 in line with the terms contained in Exhibits 28 and 30. The PW who is the Chairman and Managing Director of the appellant initially cooperated with the Project Manager. However, he later protested against the conduct of the Project Manager who was eventually recalled by the respondent. Before the departure of the Project Manager, production of carpets commenced. Before then, the appellant sought for further loan from the respondent to procure raw materials and take care of staff salary, outstanding NEPA bills and water rate. The respondent granted a sum of =N=200,000 in the two equal instalments. The Project Manager was recalled in September 1990. He left a handing over note to wit: Exhibit 8. Shortly after the Project Manager left, a sum of =N=150,000 was paid by the appellant from proceeds of sale left in the appellant’s account by the Project Manager. Apart from the sum of =N=150,000 paid by the appellant, the two loans and interests on both remained unpaid by the appellant.

The appellant filed a Writ of Summons in an earlier suit which was struck out. The appellant later filed the suit against the respondent which led to the appeals to the court below and subsequently, the appeal before this court. In the stated suit, the appellant claimed from the respondent the total sum of N521,413,740.00 as at April 1992 plus 10% interest per annum until payment of the judgment debt for loss of production based on full capacity during the tenure of the Project Manager. Allegations galore were made by the appellant against the Project Manager. The respondent joined issues with the appellant on all material allegations in the statement of claim. The respondent consequently counter -claimed as follows:-

“i. A sum of N290,931,823.08 being the total sum outstanding against the plaintiff and payable to the defendant on Term Loan and Working Capital loan granted to the plaintiff by the defendant as at the close of business on 31/3/96.

ii. Interest on the sum of =N=290,931,82.08 at the rate of 14% per annum from 1-4-96 to the date of judgment and thereafter at the rate of 10% per annum until the whole judgment debt is fully liquidated.

iii. Declaration that the defendant is entitled to exercise her power under the Deed of Loan and Mortgage dated 31/12/83 on the asset of the plaintiff to realize the judgment debt.”

The learned trial Judge garnered evidence adduced by one witness called by each of the parties. He was thereafter addressed by learned counsel on both sides of the divide. In the reserved judgment handed out on 31st May, 2000, the trial judge at page 141 of the record pronounced as follows:-

“In sum, the Plaintiffs’ claim for =N=521,413,740.00 being an estimated profit fails and the same is accordingly dismissed. The counter-claim was filed on the 25th day of June, 1997 and the same succeeds to the extent of the Plaintiff’s admission from that date, The defendant shall have judgment for the sum of =N=1,500,000.00 and =N=510,000.00 plus interest at the rate of 10% per annum in respect of the =N=1, 500,000.00 and 14% per annum m respect of the sum of =N=510,000.00. The interest in the two cases shall run from the 25th day of June, 1997 until the judgment debt is fully liquidated. The defendant also claims a declaration. In view of my pronouncement regarding Exhibits 1 and 30 on which the declaration is anchored, the defendant has failed to prove its entitlement to same. The declaration is hereby dismissed.”

As stated earlier on in this judgment both sides felt unhappy with the judgment of the learned trial judge. The respondent herein was the first in time to file its appeal against part of the judgment of the trial court. The appellant, later in time, with the leave of the court below, appealed out of time against ‘the part concerning damages and reliefs of the appellant.’ The appellant did not seek the leave of the court below to cross-appeal and that was not the order granted. The two appeals at the Court below bore the same Appeal No. CA/IL/6/2001. The court below heard the two appeals in one fell swoop on 25-9-01 and reserved judgments; which were eventuality delivered on 19/11/01 and 10/12/01 respectively in respect of the 1st and 2nd appeals.

In the first appeal, the parties seriously contested the rates of interests in respect of the two loans and the times they are supposed to run. In respect of the term loan, the court below found as follows at page 241 of the record:-