O. Kanu, Sons & Company Limited V. First Bank of Nigeria Plc (2001)

LawGlobal-Hub Lead Judgment Report

OGEBE, J.C.A. 

The appellant sued the respondent in the High Court, Aba claiming the following reliefs in paragraph 28 of its statement of claim:

“(a) An order of this honourable court compelling the defendant to waive or absolve or write off the sum of N10,805,000.00 (Ten million, eight hundred and five thousand naira) being the cost of 2900 bales of stockfish destroyed by the Health Authorities as a result of the defendant’s negligence or alternatively.

(b) N30,000,000.00 (thirty million naira) as special and general damages for negligence.”

Pleadings were filed and exchanged by the parties and the respondent in its amended statement of defence included a counter-claim against the appellant in paragraph 32 thereof as follows:

“Whereof the defendant Counter-claims from the plaintiff as follows:-

(i) The said total sum of N38, 352,908.63 due on the plaintiff’s Account Nos. 004/021765/5 and 001020/017655.

(ii) An order directing the plaintiff to liquidate the said outstanding total sums within 3(three) months from the date of the judgment or as the honourable court may seem fit.

(iii) Interest on the said total capital sum or any balance thereon at the rate of N10.00 (ten naira) per centum per annum, commencing from the date of the judgment.”

The case of the appellant from the pleadings and evidence was that sometime between the months of August and September, 1989, the appellant was granted an increase on the loan and overdraft facility with interest rate fixed at 361/2% per annum by the respondent for the importation of stockfish upon the fulfillment of terms and conditions contained in exhibits B and M. The appellant accepted the facility by exhibit C and submitted a cash flow projection as required by the respondent as shown in exhibit C1 which demonstrated the appellant’s ability to import the said stockfish, sell same and pay back all money owed the respondent by 31st December, 1989. The respondent failed to forward the necessary documents relevant for the transaction especially in respect of letters of credit and thereby caused a delay of 23 days and as a result the stockfish which should have arrived before Christmas of 1989 did not arrive until the 12th January, 1990. Consequently, the stockfish could not be sold as a result of glut in the market. The stockfish was kept in the warehouse but continued to deteriorate and was eventually condemned by Health Authorities in April 1991 and a total of 2,900 bales of stockfish were destroyed causing the appellant considerable loss.

The respondent denied the claim and counter-claimed for the payment of the principal, loan and overdraft facilities plus interest in the sum of N38,352,968.63.

The trial court dismissed the appellant’s claim and gave judgment to the respondent in respect of its counter-claim against the appellant.

Aggrieved by that decision the appellant has appealed to this court and filed a brief of argument in which the learned counsel for the appellant formulated 4 issues for determination as follows:

“(1) Whether upon proper construction of section 15 of the Banking Act, Cap. 28, LFN, 1990 and exhibit V, the trial Judge was right in entering judgment in favour of the defendant/respondent on the amount claimed in the counter-claim.