United Bank for Africa Plc V. Alims Nigeria Limited (2007)

LawGlobal-Hub Lead Judgment Report

SAKA ADEYEMI IBIYEYE, J.C.A.

In the High Court of Justice of Edo State sitting in the Auchi Judicial Division presided over by Okunega, J., in Suit No. HAU/72/95 the plaintiff who is at present the respondent in this appeal in paragraph 18 of its Statement of Claim sought the following reliefs:

“1. A declaration that the Deed of Floating Debenture executed between the plaintiff and the defendant dated 27th day of March, 1987 and Legal Mortgage dated the 25th day of November, 1986 and registered as Instrument No, 25 at page 25 in Volume 714 of the Lands Registry in the office at Benin City do not allow the defendant to unilaterally alter the status of the debt from loan to overdraft thus attracting higher interest.

2, A declaration that the defendant’s computation of interest on the facilities granted to the plaintiff is arbitrary and without any legal basis.

3. Injunction restraining the defendant, its servants and/or agents from carrying out its threat to enforce its rights in the deed of floating debenture and legal mortgage.”

The defendant who is now the appellant filed a Statement of Defence and Counter Claim to the claims of the plaintiff/respondent. Paragraphs 10, 11, 20 and 21 of the defendant’s pleadings appear to be salient to the plaintiffs pleadings. They read thus:

“10. In answer to paragraphs 14, 15 and 16 of the Statement of Claim, the defendant avers as follows:

(a) The plaintiff knows what it actually owes to the defendant and the negotiations referred to were aimed at assisting the plaintiff to pay off its indebtedness to the defendant by a generous reduction of the debt through waiver of part of the accrued interest.

(b) The sum of N,650,000.00 paid to the defendant was part payment of the debt the plaintiff owes.

(c) The plaintiff abandoned its accounts long before it entered into negotiations with the defendant.

(d) In accordance with the banking practice, the accounts were classified resulting in the merging of the overdraft and loan accounts.

(e) The alleged interest of 7.5%on the loan was a typographical error which was corrected in a letter dated 19/12/96 to the plaintiff.

(f) The plaintiff knows the interest rates; statements of account sent to the plaintiff by the defendant from time to time disclosed this fact and the plaintiff had never protested… (not legible).

11. The defendant will contend at the trial of this action that the plaintiff s claims are frivolous, vexatious, an abuse of Court process and the same ought to be dismissed with substantial costs.

COUNTERCLAIM:

12. The defendant claims from the plaintiff by way of counterclaim as follows:

(a) The sum of N13,370,187.75 (Thirteen million, three hundred and seventy thousand, one hundred and eighty seven Naira seventy five kobo) being the sum of money owing by the plaintiff to the defendant over a period of years as at 31/7/98 as a result of loan and overdraft facilities extended to the plaintiff by the defendant over a period of years in Benin City within the jurisdiction of this Honourable Court.