Nkwo Market Community Bank (Nig) Ltd V Paul Ejikeme Uwabuchi Obi (2010)

LAWGLOBAL HUB Lead Judgment Report

M. S. MUNTAKA-COOMASSIE JSC

The Appellant, who was the plaintiff at the trial court at Nnewi High Court, brought this action under the undefended list procedure, wherein he claimed against the Respondent in a writ of summons dated 21st day of July, 1997 as follows.-

‘(1) N930, 162.00 being debt owed the plairitiff by the defendant;

(2) 15% per month interest of the above sum till judgment 18 delivered.

(3) Thereafter 5% percent interest of the judgment debt till same is liquidated’.

On the 25/9/97, the trial courtrgranted an order for substituted service by pasting the writ of summons and other court processes on the defendant at his house at No. 1 Josephat Street, Onitsha Road, Nnewi, and the case was adjourned to 13/10/97 for hearing. The order for substituted service was effected on 7/10/97 while the defendant filed his Notice of Intention to defend on the 10th day of October, 1997. On the 13/10/97 when the case came up for hearing it was further adjourned to 23/10/97 for hearing. The facts of this case, I think, are straight forward. The Respondent operates two accounts with the Appellant with numbers 5130 and 5176. On the application of the Respondent he was granted Loan Facilities in the sum of N1,200,000.00 and 600,000.00 on Account Nos 5131 and 5176 respectively.

The interest chargeable on the facilities is contained in the letter of offer titled- offer of Banking Facility as follows:- ‘DISCOUNT RATE: 21% P.A interest 15% processing fee, 1 % legal and 5% consultancy fee shall be debited to the company account’. In paragraphs 4 and 5 under the subheading ‘CONDITIONS PRECEDENT TO UTILISATION’ it was stated as follows:

‘4. Debt of your discount-current account with Nkwo market community Bank with the sum being, payment for the upfront interest at the rate of 5%consultancy, 1 % legal and 1.5% processing fee.

‘5. Failure to balance at month end shall be liable to 3% to penalty on 1st day of the new month 4% from 2nd to 15th and additional 30/0 after 15 of the month’.

There is no dispute as to the fact that the principal sums have been paid, what is in dispute is the amount being claimed as the interest which the plaintiff appellant put at the sum of N930, 162.00 which was calculated on the basis of 15% per month interest. The Respondents defence is to the effect that the 15% per month which formed the basis of the Appellants claim was not supported by the terms of the agreement between the parties. As a result, he had earlier challenged the interest rate being charged by the Appellant at the High Court of Justice Nnewi in suit No. HN/95/95, the writ of summons and the statement of claim were attached to the Notice of intention to defend. In his ruling Ononiba J. granted the plaintiffs claim and ordered as follows:

‘In the final result, I have come to the conclusion that the defendant has not disclosed any triable issue or any defence on the merits but that is not the end of the matter plaintiffs claim is 7.5% interest per month. I do not know how the plaintiff came by that figure. The offer of banking facility-Exhibit B shows clearly that the discount rate is 21 % per annum and not 7.5% per month. It is trite law that court can award less than the amount claimed by the plaintiff but not more. I therefore enter judgment for the plaintiff in the sum of N930,162.00 as claimed. Plaintiff is also awarded 21% interest on this sum from 21/7/97 to 17/12/97. Plaintiff is also awarded 5% simple interest on the judgment debt from 18/12/97 until the whole amount is liquidated ‘see pages 66 – 67 of the Record of Proceedings.

Dissatisfied with the above judgment, the defendant successfully appealed to the Court of Appeal hereinafter called the court below, which set aside the decision of the trial court and ordered that the matter be transferred to the general cause list. The court below in its judgment found as follows:

On the facts of this case it is common ground that the respondents claims are for accrued interest charged on the overdraft granted to the appellant by the respondent on two separate accounts. Nos 5130 and 5176. In paragraph 6 of the affidavit supporting the respondents writ of summons it was deposed that the facilities granted to the appellant are based on the terms of two documents signed by the appellant, Exhibits B and B1. But only an unmarked document on page 22 down to the half of page 23 of the record is exhibited with the affidavit. The first part of the document headed offer of banking facility shows that it is in respect of N 1,200,000 overdraft. It is dated 30/11/96 and contained various interest rates to be debited to the companys account but the document is not signed in the signature column over which three numerical question marks are run. The second part of the same document is headed conditions precedent to utilization items 4 and 5 of which contained what is described as upfront interest and penalty: at the bottom of the column are typed on the left side Sgd: Nwano Agom (CDO) and Sgd: Law E. Agbo (Manager) on the right side. In the writ of summons the respondent as the plaintiff is claiming 75% interest per month on the overdraft on each account. Applying the principle on the duty of a plaintiff initiating an action under the undefended list procedure who must show prima facie ground that would incline the court to the conclusion that the defendant has no defence to the action the respondents claims leave a yawning gap. The writ of surnmona with the supporting affidavit suffers internal conflicts that a complete case cannot be said to have been formulated by the respondent as the plaintiff with which the Notice of Intention to defend filed by the appellant as the defendant can be matched up. For one thing the respondent who based her claims on agreed rates of interest contained in 2 documents signed by the appellant did not exhibit the document signed by the appellant in respect of overdraft granted on account No. 5176 for N600,000 and the document produced in respect of account No. 5130 is not signed. For another, the interest of 75% per month claim in the writ of summons on the Nl,200,000 overdraft cannot be reconciled with the 21% interest per annum appearing in the first part of the document headed offer of banking facility or the numerous interests in items 4 and 5 of the second part headed conditions precedent to utilization.

Being dis-satisfied with the judgment of the court below, the plaintiff appealed to this court and filed a Notice of appeal containing three grounds of appeal, both parties filed and exchanged their respective briefs of argument. The Appellant in his brief formulated two issues for determination as follows:-