I.B.W.A. Ltd (Now Afribank Plc) V. Hotel Metropole International Ltd & Anor (2010)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

MOHAMMED. L. TSAMIYA, J.C.A. (Delivering the Leading Judgment)

This is an appeal against the judgment of Enugu State High Court, delivered on 24/9/2003 in the consolidated suit Nos. E/348/88 and E/249/88 in which all the reliefs sought for, except relief No.5 were granted.

In the Enugu State High Court (herein referred to as “the trial Court”) the plaintiffs, claimed against the defendant the following:

1. An order for the immediate release/surrender of the plaintiffs’ documents of title held by the defendant as security, to the plaintiff.
2. N6,633,772.00 (Six million, Six hundred and thirty-three Thousand, Seven hundred and seventy-two Naira only) as special damages for breach of contract occasioned by the acts of the defendant against the plaintiffs, or

IN THE ALTERNATIVE,

N10,000,000.00 (Ten Million Naira) general damages as compensation for all the losses so inflicted on the plaintiffs by the acts of the defendant.

3. N56,329.46 (Fifty-six thousand, Three hundred and twenty-nine Naira, fourty six naira) and interest at 18% from the date of wrong debiting until judgment delivered.
4. N100,000.00 (One hundred thousand Naira only) as general damages for breach of contract.
5. An order that the interest calculated and debited against the plaintiffs in respect of the sum of N56,329.46 was wrongly done and was not a proper charge on the account of the plaintiffs.
6. Release of the property (sic) of the plaintiffs deposited with the defendant as security for loan.

The defendant also filed action against the plaintiffs for payment of the over-draft facilities relating to the same transaction. Thus the two suits were consolidated.

The plaintiffs filed their Statement of Claim and reply to the Statement of defence filed by the defendant. The defendant therefore joined issues with the plaintiffs by filing the statement of defence to the action.

Thereafter, the action went on for trial. The plaintiffs, through their Managing Director, gave evidence and called one other witness, while the defendant called one witness who abandoned, in part his evidence, ship mid stream and the court did not conclude his testimony in-chief not to talk of cross-examination. And this led the defendant to apply to the trial court, to arrest the judgment and allow him to call another witness for their case. The trial Court refused.

The summary of the facts giving rise to this appeal is that, both plaintiffs maintained and operated… separate and distinct Bank Accounts with the appellant Bank Between 1978-1979, the 2nd respondent Company was in the process of executing 6 valuable contracts for various other concerns (see details at page 76 L. 21 – page 77 L. 1-8 of the Amended Record filed on 10/3/06), with the secured financial backing of the United Bank for Africa (U.B.A) Ltd. Then the appellant induced the Managing Director (M.D.) of the respondents (PW1 at the trial) to move their Accounts to the Appellant Bank, with the promise to avail the respondents with over draft facilities to the tune of N800,000.00 (Eight Hundred Thousand Naira), shared in one ratio of N300,000.00 and N500,000.00 between the 1st and 2nd respondents respectively. As at the time of these negotiations the UBA Ltd which had been the 2nd respondent’s financiers in its projects was holding its title documents as collateral for such advances from the Bank and it was agreed that on the formalization of the arrangement with the appellant Bank, the respondents will close their separate accounts with the UBA Ltd, and withdraw the said collaterals accordingly and then pass them on to the appellant Bank as part of the backing for the over-draft of N800,000.00 agreed upon.

Towards this arrangement, the appellant Bank paid off the outstanding debt of the 2nd respondent with UBA Ltd to the tune of N56, 329. 46k (in two installments of N11,000.00 and 45,329.46k) and also advanced the sum of N20,000.00 to the 1st respondent towards the first stage of its Hotel facilities expansion.

In return for these advances, the two respondents’ Companies gave in various title documents alongside those collected by the appellant from UBA Ltd, as security by way of a Legal Mortgage in favour of the appellant’s Bank. Soon after the appellant Bank received and took in the aforesaid title documents of developed Properties in Enugu, the Appellant Bank reneged on its obligation for the balance of the overdraft facilities, and, further, went on to debit the accounts of the respondent companies consistently with a Compound interest over the years, notwithstanding the Bank’s breach in the transaction had in effect demobilized and destroyed the business operations of the respondents concerns, both of whom were cash strapped and left with no other collaterals to seek any alternative funding loan.

On the persistence of the appellant Bank to redeem this actions, despite several requests orally and in writing, the respondents instituted suit No. E/348/88 in reaction to which the appellant Bank filed suit No. E/349/88 both of which were subsequently consolidated for hearing and determination.

Hearing on the 1st suit were repeatedly frustrated by the Appellant Bank action. The hearing was to start on 21/2/2001 but did not start until 11/10/2001. The hearing of plaintiffs case ran through 18/10/2001, 28/11/2001 12/12/2001 and 23/1/2002 at the end of which counsel for the defence asked for adjournment for cross-examination of the witness (PW1). The cross-examination commenced on 30/1/2002 and on the adjourned date of 2/5/2002, defence Counsel was absent. An adjournment then made to 16/5/2002 when the PW1 completed his evidence with his Re-examination. PW2 stepped in on 28/5/2002, after which PW1 again re-testified on the 2nd consolidated suit No. E/349/88 on 17/6/2002, and was cross-examined on 28/6/2002, bring in the plaintiffs case to a close.

The defence took an adjournment to open its case on 17/7/2002 but was again unable to proceed. Then hearing was adjourned to 18/7/2002, 25/7/2002 and 31/7/2002 for defence and address as follows: On 18/7/2002 counsel for the defence came up with another excuse for adjournment, for which the case was adjourned to 25/7/2002 when the said counsel apologised for the absence of the defendant from the Court, and gave some excuses. The hearing then was further adjourned to 31/7/2002 when the Defence opened its case with DW1. Midway in his evidence in-chief, further hearing was adjourned to 5/11/2002, on which date the counsel for Defence wrote for a stand down till 11.00 am but when the case was called later, after that time, the said counsel was nowhere to be seen and the matter was adjourned to 6/11/2002 when the defence evidence continued, and at a point, the Defendant counsel asked for adjournment to enable the DW1 bring the documents pleaded but which he did not come to court with, because the Manager in whose custody these documents were kept travelled before the witness could come back from the previous day sitting. The case was again adjourned to 28/11/2002 on which date the same counsel after amending parts of their defence pleadings brought back DW1 to continue his evidence and at the end of that day’s hearing, the matter was adjourned and later resumed on 25/3/2003 with the defence coming up with another application for adjournment. The application was granted and the case was adjourned and on 12/5/2003 the matter was resumed at which the defence openly confessed her frustration and asked for one more adjournment to conclude the defence case. The request was granted but on 17/6/2003 to which the hearing was adjourned, yet another defence application was presented to the court to enable the defence to get at the DW1 to conclude the case failing which the defence will definitely close its case and renders its address.