African Continental Bank Plc. V. Cyprian Ezenwa (2003)

LawGlobal-Hub Lead Judgment Report

DAVID ADEDOYIN ADENIJI, J.C.A.

This is an appeal against the decision of Ekuma-Akama, J of the Abia State High Court, sitting at Aba, delivered on 21st October, 1996, giving judgment to the plaintiff/ respondent as claimed on the undefended list. The defendant/appellant being dissatisfied with the said judgment appealed against same filing 4 grounds of appeal in the process.

The claim of the plaintiff in the court of trial was for:
“(1) The sum of N572,585.08 (five hundred and seventy two thousand, five hundred and eighty five Naira, eight kobo) being pension and outstanding gratuity due to the plaintiff from the defendant.
(2) Interest on the said sum at the rate of 13% per annum from January, 1994, until judgment.
(3) Interest on the judgment debt at the rate of 10% per annum from the date of judgment, until fully paid.”

The facts of the case are that the plaintiff/respondent an erstwhile employee of the appellant/bank was retired from the service of the bank in 1994. The bank was said to have paid to the respondent the sum of N92,649.20 (Ninety-two thousand, six hundred and forty-nine Naira, twenty kobo) according to the respondent as part payment of the entire benefit of N667,234.28 (Six hundred and sixty-seven thousand, two hundred and thirty-four Naira, twenty, eight kobo) leaving a balance of N572,585.08 (Five hundred and seventy-two thousand, five hundred and eighty-five Naira, eight kobo), which the appellant was alleged to have refused to pay even in spite of demands by the respondent. When nothing was further forthcoming, the respondent filed the above claim in court with several documents attached in proof of his claim.

The appellant reacted by filing a notice of intention to defend the action with a request at the hearing that the matter be placed on the general cause list. The respondent opposed the move and urged the court to decide if there was any serious issue in dispute. The court after reviewing the facts before it concluded that the appellant had not shown that it had a defence to the claim and therefore gave judgment to the respondent per his claim with N2,000.00 costs in favour of the respondent as against the appellant. See page 32 lines 21-26.

The appellant’s counsel at the hearing of the appeal adopted his brief of argument. The respondent’s brief was taken as argued as the counsel was not present in court.

On his part, the appellant’s counsel distilled two issues from the 4 grounds of appeal filed thus;
(a) Whether the learned trial Judge was right in refusing to transfer the suit to the general cause list, when on a calm view of all the issues together with the procedure, there was need for him to have done so.
(b) Whether the learned trial Judge was right in entering judgment for the plaintiff on the ground that no defence on the merit was disclosed in the affidavit in support of the notice of intention to defend?

The respondent’s counsel on his part felt that the two issues boil down to one point, but the matter of procedure brought into issue No.1 should be discountenanced, as there was no ground filed for it.
To my mind, the respondent’s counsel observation was valid in that the two issues can always be rolled into one issue, more so when any finding on issue one would substantially determine issue 2.

The separation of the issues does not however, occasion any miscarriage of justice and even without the use of the word procedure the issue formulated can still stand and be understood.

On issue No.1 the appellant’s counsel stated that the issue dealt with grounds 1, 3, and 4 of the appeal. He argued that the trial Judge failed to follow the laid down procedure in Order 23 rules 1-4 of the Imo State High Court (Civil Procedure) Rules, 1988, while entering judgment for the respondent on the undefended list when there was no application ex parte to do so by the respondent, hence, there was no application for that method of disposing cases and there was no court order to place the suit on the undefended list. Counsel believed that the exercise was for that reason a nullity.

Counsel went on to say that failure to observe the procedure leading to such exercise was a fundamental error hence, the judgment ought to be set aside and the suit struck out. Counsel in this regard cited the cases of Cash Affairs Finance Ltd. & Anor. v. Inland Bank Plc. (2000) 5 NWLR (Pt. 658) page 568 and the case of Maley v. Habibullah Isah (2000) 5 NWLR (Pt. 658) page 651 at page 665.

In the alternative, counsel urged the court to hold, if it did not feel like striking out the suit and setting aside the judgment, that by the affidavit of the appellant, the case ought to be transferred to the general cause list. He pointed out that the pivot of the respondent’s case was exhibit ‘D’, which the appellant described as forgery and that exhibit ‘E’ was illegal. Fraud he said, required proof beyond reasonable doubt and this could be done only by oral evidence not by affidavit evidence. Counsel stressed that the facts contained in the appellant’s affidavit were such that called for resolution by the court, of the conflicting versions and this could be done only by evidence.

Counsel went on to say that paragraph 14 of appellant’s affidavit showed that the August, 1992, policy limited computation of gratuity to basic salary and leave allowance only, as against the respondent’s paragraph 16 which spoke of computation of his gratuity based on total emoluments namely basic salary, housing allowance, transport allowance and lunch subsidy and the respondent’s claim in his paragraphs 14 and 15 was that the sum of N92,649.20 (Nine-two thousand, six hundred and forty-nine Naira, twenty kobo) paid to him was only part payment to him while the appellant insisted that that was the total due to the respondent. These, counsel maintained, were serious issues requiring resolution by the court after taking evidence. He relied for this on Jipreze v. Okonkwo (1987) 3 NWLR (Pt. 62) page 737; Falobi v. Falobi (1976) 9-10 SC page 5.

When two affidavits are in such conflict genuinely, it is the duty of the court to grant leave to defend the suit as a defendant would by then have shown that it has a defence on the merit or sufficient facts to entitle him to defend an action generally. Counsel cited SCOA Ltd. v. Bourdex Ltd. (1990) 3 NWLR (Pt. 138) page 380 at 388 and 389.

Counsel went on to show what defence meant as pronounced by Karibi-Whyte, JSC in Macaulay v. NAL Merchant Bank Ltd. (1990) 4 NWLR (Pt. 144) page 283 at page 324-325. He also relied on Okambah Ltd. v. Alhaji Ganiyu A. Sule (1990) 7 NWLR (Pt. 160) p. 1 at p. 11 where Kawu, JSC, explained the same point and stressed that the undefended list procedure was not designed to shut the defendant who has raised triable issues and Uwais, JSC, had said in Federal Military Government v. Sani (1990) 4 NWLR (Pt. 147) p. 688 at 699, that what was needed was whether the defendant can prima facie afford a defence to the action, while the Supreme Court he went on made it clear in that case, that what was required of the defendant was to show the existence of a fair probability of defence or triable issue or question.

Counsel rounded up by submitting that the defendant/appellant in this case had raised issues weighty enough to warrant the placement of the case on the general cause list. He urged the court to set aside the judgment.

On issue 2, counsel argued that the defendant/appellant had in its affidavit raised serious issues amounting to a defence on the merit and therefore deserved to be heard on the general cause list. Counsel pointed out that the appellant had mentioned several names in paragraph 12 of his affidavit, who had received their benefits from the appellant but the respondent denied this. Same with exhibit ‘D’, which the appellant maintained, did not emanate from the bank, but which respondent insisted it so emanated and these counsel said, were triable issues. He then urged the court to set aside the judgment and remit the case to the High Court for hearing on the merits.

The respondent’s counsel in his brief, handled the two issues separately, but complained that the major plank of the 1st issue was that the respondent never obtained leave via motion ex parte, before the suit was placed on the undefended list. That issue he said was a fresh one raised in the court of Appeal, but without leave, hence, it should be discountenanced as being incompetent. Counsel in support referred to the case of China Geo Engineering Co. v. Simon Nambativ (2001) 2 NWLR (Pt. 698) p. 529 at 540 and the case of Honika Saw Mill (Nig.) Ltd. v. Hoff (1994) 2 NWLR (Pt. 326) p. 252. This was more so, when the matter raised was not covered by any of the grounds of appeal filed.

Counsel relied for this on Public Finance Securities Ltd. v. Jefia (1998) 3 NWLR (Pt. 543) p.602 at 611 and Oje v. Babalola (1991) 4 NWLR (Pt. 185) p.267 at 280. He also referred to Hauwa Salami v. Bala Mohammed & Anor. (2000) 9 NWLR (Pt.673) p. 469 on the same point.

Counsel later argued that the court rules were duly complied with in this case. He set out the order and stressed that what was required was an affidavit in support of the suit not one in support of an ex parte application for leave. Separate ex parte application he submitted was therefore not required by the rules. He stated that not every application is a motion though every motion is an application.

He concluded that the cases of Inland Bank and Habibu supra cited by appellant’s counsel, did not apply and it was too late for the appellant to complain at this stage, having stomached that complaint throughout the proceedings in the trial court. He pointed out that in Jefia’s case (1998) 3 NWLR (Pt. 543) p. 602 at 616, it was decided that what mattered was substantial justice not technicalities that could lead to injustice.

On issue No.2, counsel submitted that the two issues are infact, one and the same thing, hence, he decided to argue them together. He submitted that the undefended list procedure was designed to facilitate early hearing in cases of liquidated demands where there was palpably no defence disclosed to the action and it is intended to obviate unnecessary waste of time, where the justice of the case clearly demonstrates defendant’s liability to the plaintiffs claim that is, where the defendant has no defence to the claim on merit.

A matter is therefore, never transferred to the general cause list as a matter of cause, but on a proper scrutiny of averments in the affidavit. It is not enough to assert that the defendant has a defence on the merit and the notice to defend must set out clearly the grounds of defence, supported with particulars. In this particular case, he argued, the respondent’s case was clear and was supported by vital documents in proof, that is, exhibits C, D, K, L, M, N, O, and P. In the face of all that the appellant counsel he said, made halfhearted allegations of fraud and relied on general denials of the facts averred to, without any document in rebuttal of respondent’s claim.

Allegations of fraud in a case on undefended list, counsel pointed out must state particulars of such fraud and the appellant did not do so. Counsel was of the view that the issue of fraud was raised in bad faith and was a flimsy strategy to prolong the case. In his opinion, there was nothing to resolve, hence, such evidence was unnecessary. He relied on Winlyn Ltd. v. NACB Consultancy Finance Co. Ltd. (2000) 8 NWLR (Pt. 670) P.594 at 600, where it was held that where the court had enough documentary evidence at its disposal, it could suo moto resolve conflicting evidence without recourse to oral evidence. Counsel also referred to the case of Ezegbu v. First African Trust Bank Ltd. (1992) 1 NWLR (Pt. 220) p. 699.

Since the appellant did not file an affidavit disclosing a defence on the merit, the trial Judge was right in entering judgment for the respondent on the undefended list. Counsel went on to submit that it is not automatic to transfer a matter to the general cause list. He relied on Grand Cereals and Oil Mills Ltd. v. As Ahel Int. Marketing and Procurement Ltd. (2000) 4 NWLR (Pt. 652) p. 310. The defence of the defendant in such a case he said must be real defence on the merits. He also referred to Zainikom International v. Ofoma supra, which also spoke of defence on the merits and not merely a defence that is fishing. In Nambativ case supra (2001) 2 NWLR (Pt. 698) at p. 529, he pointed out, the emphasis was on real defence and triable issues.

In the case of Jos North Local Government v. Daniyan (2000) 10 NWLR (Pt.657) 281 at 290, counsel submitted, the court held the view that whether a defendant has defence on the merits should be gathered from the affidavit in support of a notice to defend and never from counsel’s address and in the case of Peter Tiwell (Nig.) Ltd. v. Inland Bank (Nig.) Ltd. (1997) 3 NWLR (Pt. 494) p.408, counsel submitted, the affidavit, the court held, must deal sufficiently with the plaintiff’s claim and a mere general denial would not suffice.

Finally, counsel commended the following cases on the same principles of law: Abdullahi v. Waje Community Bank (2000) 7 NWLR (Pt. 663) p. 9; Public Finance Securities Ltd. v. Jefia (1998) 3 NWLR (Pt.543) p. 602; Franchal (Nig.) Ltd. v. Nigeria Arab Bank Ltd. (1995) 8 NWLR (Pt. 412) 176.
Learned Counsel for the respondent concluded his submission by urging the court to dismiss the appeal.

It is necessary to deal first with the matter of incompetence of the suit decided on the undefended suit procedure, the complaint against which the respondent’s counsel says was not properly raised at the Court of Appeal level, same not having been raised at the lower court. To my mind, that point is well taken, but having regard to the manner, the matter was handled in the trial court one could not see how the point could have been raised in view of the short cut court process adopted.

Apart from that, transfer to the general cause list is never automatic as submitted by respondent’s counsel. The court has to be addressed or moved to do so. That is the procedure to make the court to so act, but where the court fails, or refuses, to do so properly, then the issue of procedure is implied and that is the purport of grounds one, two and three of the appeal. The issues canvassed to my mind can always be distilled from those grounds. I have however, decided not to consider that point in this appeal, but to consider the case on its merits.

One other point raised by the respondent with which I wholly agree, is that touching on the issues formulated. I agree with respondent’s counsel that they both amount to the same thing, that is whether or not the trial court was right in determining the case in respondent’s favour at the stage of the proceedings. The resolution of issue No.1 as already indicated will definitely dispose of issue No.2 for both are based on the same facts. The matter was heard as one on the undefended list.

The provision of Order 23 rules 1-4 of the Imo State High Court (Civil Procedure) Rules applicable to Abia State reads:
“1. Wherever application is made to a court for the issue of writ of summons in respect of a claim to recover a debt or liquidated money demand and such application is supported by an affidavit setting forth the grounds upon which the claim is based and stating that, in the deponent’s belief, there is no defence thereto, the court shall, if satisfied that there are good grounds for believing that there is no defence thereto, enter the suit for hearing in what shall be called the undefended list, and mark the writ of summons accordingly, and enter thereon a date for hearing suitable to the circumstances of the particular case.

2….

3(1) if the party served with the writ of summons and affidavit delivers to the Registrar a notice in writing that he intends to defend the suit, together with an affidavit disclosing a defence on the merit, the court may give him leave to defend upon such terms as the court may think just.

(2) Where leave to defend is given under this rule, the action shall be removed from the undefended list and placed on the ordinary cause list; and the court may order pleadings, or proceed to hearing without further pleadings.

4. Where any defendant neglects to deliver the notice of defence and affidavit prescribed by rule 3(1) or is not given leave to defend by the court, the suit shall be heard as an undefended suit, and judgment given thereon, without calling upon the plaintiff to summon witnesses before the court to prove his case formally.”

In a case where a defendant has filed a notice to defend and his averments show that he has a defence on the merits, the law provides that the suit shall be transferred to the ordinary (general) cause list. Much therefore depends on the averments in the defendant’s affidavit, whether or not it discloses a defence on the merits.

In this particular appeal, the sum claimed is a liquidated demand as shown supra. The appellant however, raised several points of defence including, fraud, forgery change in the bank’s policy and illegality. To counter these allegations, the respondent filed a further affidavit in support of his writ of summons as shown on page 16 of the respondent’s averment in paragraphs 3, 4, 5, 6, 8, 9, 10 and 11 in particular go to show that certain issues have been raised which would need in-depth scrutiny.

I state the paragraphs for ease of reference:
“3. That exhibit A is one of the normal headed papers of the defendant and emanated from the defendant, and the deponent of the defendant’s affidavit failed to show what the signature of the then Managing Director is. I annex herewith another letter from the said Managing Director as exhibit G.

4. That exhibit D is also from the defendant and having worked in the bank for more than 28 years, I am in a position to know the defendant’s official letter heading and stationeries.

5. That internal letters and memos to staff of the bank need not at all times be on any particularly, designed headed paper.

6. That the deponent of the said false affidavit, Mr. Lambert Onwuachuba worked under me as a supervisor, while I was at the Milverton Branch of the bank, and he knows the falsity of his averments and it is surprising, he swore to such affidavit.

7. That while I was at Aba, I was attending court with the present defendant’s counsel to represent the bank in their court matters.

8. That I made personal trips to the Lagos Head Office of the defendant, where I personally met and discussed with the Chief Accountant Mrs. S. Amiabenomo, who signed and handed over to exhibit ‘D’ and I wrote and handed over to her exhibit ‘E’.

9. That all the documents, I annexed are authentic, and the defendant cannot by mere unsubstantiated averments change their character.

10. That the defendant is merely trying to raise spurious excuses in a weak attempt to prevent this matter from being tried under the undefended list, and they have no defence on the merit whatsoever.

11. That it will work injustice if the defendant is allowed to rely on such vague averments to deny me of justice as I have been out of job, since December, 1993 and after giving all my working life to the defendant, they are trying to deny me unjustly of my entitlements.”

One would see at a glance even from the respondent’s own showing that all the averments pertain to serious issues in dispute between the two parties and in particular the issues of fraud and forgery are such that require proof beyond reasonable doubt. That they were spuriously raised, is a matter that can be determined after hearing evidence. Same goes for all other points in contention in the further affidavit as reproduced supra. The question of forgery of signature in particular is not one that can be easily determined by affidavit evidence for it involves a measure of expertise in getting at the root of the matter. The court normally has the advantage of comparing similar signatures, but that is better done at the trial proper, after the issues would have been subjected to rigorous cross-examination.

The point is clear that in matters such as this, a defendant is not expected to make a complete defence. The words ‘on the merit’ used in the rule, does not necessarily mean a watertight irrebuttable defence, but a prima facie defence that can show that a defendant has such facts deemed enough to enable the defendant defend the action generally. See Federal Military Government v. Sani’s case supra cited by the appellant’s counsel. Karibi-Whyte, JCA, further said on p. 710 para. F thus:
“However, wherever the defendant has raised a defence bona fide, which creates, doubts in the mind of the Judge whether in the interest of justice the defence raised ought to be considered, the defendant ought not be shut out from raising the defence. See also Sao v. Hakim T.L.A 72. In all cases, the Order 10 procedure should only be applied and leave to defend, refused in very clear cases, where the defendant has not on the affidavit or statement of defence disclosed a defence on the merits.”

Same applies in this case, where the issues of illegality, fraud, change in the bank’s policy, forgery and even the respondent’s reply to the appellant’s counter affidavit create that agitation of the mind, as to whether or not, the matter should go to full trial and the facts subjected to the rigours of stringent cross-examination. Either of the two versions, that is that of the appellant or that of the respondent might under such acid test crumble and enable the truth to surface. See also the view of Supreme Court in Okambah Ltd. v. Alhaji Sule supra, where the court held at p. 11 paras. A-B thus:
“Now the purpose of the procedure under this order is to enable the plaintiff to obtain summary judgment without trial, where his case is patently clear and unreasonable. See Cow v. Casey (1949) 1 K.B. 474 and Sodipo v. Lemminkainen OY and Ors. (1986) NWLR (Pt.15) 220. It is not designed to shut out a defendant, who can show that there is a triable issue -see Nishizawa Ltd. v. Jethwani (1984) 12 S.C. 234.

In determining whether a defendant has good defence to the action or has disclosed such facts as may be deemed sufficient to entitle him to defend, it is not necessary for the trial Judge to decide at that stage whether the defence has been established. What is required is simply to look at the facts deposed to in the counter affidavit or indeed the facts averred in the statement of defence, where applicable, and see if they can prima facie afford a defence to the action” per Uwais, JSC, in FMG v. Sani (1990) 4 NWLR (Pt. 14) 688; (1990) 7 SCNJ 161 at p. 164.” (Italics mine)
Olatawura, JSC added this at p. 12 para. D
“I wish to add that the purpose of Order 10 rule 1 of the High Court of Lagos State (Civil Procedure) Rules, Cap. 52, will be defeated if the court of trial does not examine carefully and judiciously the affidavit sworn in opposition to this application for summary judgment. The Order is not designed to cloak shady transaction or business, but to ensure that the delay which is brought about by full trial is avoided when from the affidavit in opposition and the proposed defence, there are no triable issues.” (Italics mine)

Uwais, JSC had summed it up succinctly in FMG v. Sani supra when he held:
“What is required is simply to look at the facts deposed to in the counter-affidavit or indeed, the facts averred in the statement of defence, where applicable, and see if they can prima facie afford a defence to the action. In that regard, a complete defence need not be shown. It will suffice, if the defence set up shows that there is a triable issue or question or that for some other reason there ought to be a trial. Therefore, the issue that whether the defence is proved or not, can only a rise where the trial Judge has given the defendant the leave to defend, so that the proof is an issue for determination after the hearing of evidence and at the time of evaluating the totality of the evidence adduced by the defendant. It is clear, therefore that, the learned trial Judge misdirected himself at the stage, he considered the applicability of section 137 of the Evidence Act on whether the defendants had proved the defence, they had intended to set up. It was not a question of proof, but that of whether the defendants had raised a substantial question of fact or defence which prima facie ought to be tried- Saw v. Makim (1889) T.L.R.” (Italics mine)

I believe the above, says it all. What is required is a prima facie defence to warrant the transfer of a case to the ordinary (general cause list). The respondent’s counsel however, referred to two decided cases of note Winlyn Ltd. v. NACB and Ezegbu v. First African Trust Bank supra. In the case of Winlyn Ltd. v. NACB supra, the court held at page 600 and I quote:

“I equally, agree with the learned Counsel for the appellant that, by virtue of the conflicting affidavit as to the rate of interest applicable between the respondent and appellants issue has been joined as to the rate of interest which cannot be resolved without oral evidence or further inquiry. See Agwuneme v. Eze (1990) 3 NWLR (Pt.137) 242, 254 cited in the appellants’ brief. It is trite law that generally, a court of law or tribunal is not competent to resolve conflicting affidavit evidence without calling oral evidence, which in this case, would mean going into the merit of the suit. However, in Ezegbu F.A.T.B. Ltd. (1992) 1 NWLR (Pt. 220) 699, 711, it was held that, to the general rule, there is this exception, that where the court has enough documentary evidence at its disposal, it can suo motu resolve conflicting affidavit evidence, without recourse to oral evidence. See also Pharmacist Board v. Adebeshin (1978) 5 SC 43; Uku v. Okumagba (1974) 3 SC 35 and B. V. Magnusson v. K. Koiki & Others (1991) 4 NWLR (Pt. 183) 119.”

In that case, the court recognized the need to resolve conflicting affidavit evidence, through trial proper, but in that particular case, the court was said to possess sufficient material to resolve the conflicting affidavits deposed to by the parties. That is not the situation in this case, where the further affidavit filed by the respondent itself, raised issues calling for oral evidence to resolve them.

The decision in Ezegbu v. F.A.T.B. Ltd. (1992) 1 NWLR (Pt.220) page 699, referred to by learned Counsel for the respondent is in totality to the same effect.

The court held thus, on page 720 paragraphs A-B:
“It is the law that a court of law is not competent to resolve conflicting affidavit evidence without calling oral evidence. See generally, Pharmacist Board v. Adebesin (1978) 5 SC 43; Falobi v. Falobi (1976) 9- 10 SC 1; Eboh v. Oki (1974) 1 SC 179; Uku v. Okumagba (1974) 3 SC 35; Magnusson v. Koiki & Ors. (1991) 4 NWLR (Pt. 183) p. 119. The above remains the general position of the law. There are certain exceptions. I can only take the relevant one here. And it is that, where the court has enough documentary evidence at its disposal, it can suo motu resolve conflicting affidavit evidence by resorting to the documentary evidence.”

Going by the above, can one say that, the documents provided by the respondent are self sufficient without raising other side issues, needing further clearance and resolution via full trial on the general cause list? The answer is no. They in fact raise more serious issues than the ones originally contemplated.

In the final analysis, I answer the two issues formulated by the appellants in the negative. The trial court was wrong in refusing to transfer the suit to the general cause list and in going ahead to enter judgment for the plaintiff/ respondent, on the ground that no defence on the merit was disclosed in the defendant/appellants’ affidavit in support of the notice of intention to defend the suit.
In the result, the appeal is allowed. The decision of Ekuma-Nkama, J. given on 21st October, 1996, together with the costs awarded are hereby, set aside. The suit is remitted to the Abia State High Court, to be tried by another Judge in the same jurisdiction.

There shall be N5,000.00 costs in favour of the defendant/appellant, as against the plaintiff/respondent.

---

Other Citations: (2003)LCN/1390(CA)