Aloysius Akpaji V. Francis Udemba (2000)

LawGlobal-Hub Lead Judgment Report

UBAEZONU, J.C.A. 

This is an appeal from the High Court of Abakaliki Judicial Division of Ebonyi State presided over by Ngwuta, J. It may rightly be said that this appeal, indeed the suit, arose from lack of honesty on the part of one of the parties who were erstwhile friends. The transaction which landed the two friends in court arose out of an alleged friendly loan of N1,484,535 made by the plaintiff/appellant to the defendant/respondent. While the case of the appellant is that the sum of N411,730 was still outstanding, the case of the respondent was, and perhaps still is , that he had not only paid the entire loan but that the appellant was owing him the sum of N138,270. The appellant in consequence sued the respondent for N411 ,730. The respondent on the other hand counter-claimed for N138,270. The action was originally filed in the undefended list cause. The defendant/respondent filed a notice of intention to defend. The learned trial Judge very rightly transferred the suit to the general cause list, unlike most Judges these days who would opt for a short-cut procedure and proceed under the undefended list despite the facts contained in the affidavit in support of the notice of intention to defend. Pleadings were accordingly filed. The matter went into full scale trial at the end of which the trial Judge dismissed the claim and found for the counter-claim. Dissatisfied with the said judgment, the plaintiff/appellant has appealed to this court.

The appellant in his brief of argument formulated three issues for trial. They are as follows:-

1. Whether the trial court has jurisdiction to hear and enter judgment on a counterclaim when the condition precedent to the filing of a valid claim being payment of prescribed fees was wanting.
2. Whether the trial Judge having admitted exhibit A the loan agreement without any objection of defence as well (sic) exhibits Band C the receipted payment thereunder, was right to refuse the claim of the plaintiff/appellant especially where there is no other evidence or document evidencing any further payment by the defendant.
3. Whether upon a proper direction on the evidence, the lower court was right to have held that the defendant proved his case and counterclaim (albeit a nullity) and was entitled to judgment.

Arguing his first issue, learned counsel contends that the lower court had no jurisdiction to entertain the counter-claim in view of the fact that the necessary fee for the counter-claim was not paid.

He concedes that the issue was not raised in the trial court but submits that being an issue as to jurisdiction of the court, it can be raised at any time including on the appellate level. He refers to Galadima v. Tambai (2000) 11 NWLR (Pt. 677) 1 at 17-18; A.-G., Oyo State v. Fairlakes Hotels Ltd. (1988) 5 NWLR (Pt. 92) 1. He further submits that the payment of the filing fee is a condition precedent to the exercise of jurisdiction. He relies on Onwugbufor v. Okoye (1996) 1 NWLR (Pt. 424) 252 at 291-292. It is submitted that the issue of non-payment of fee for the counter-claim was first raised in the argument of counsel at the hearing of the motion for stay of execution but was not acceded to by the learned trial Judge.

On issue No. 2 learned counsel argues that once exhibits A, B and C were admitted, the appellant shall be entitled to judgment on the balance of the loan. He submits that in his statement of claim the appellant pleaded payment of the sums of N472,805 and N600,000 as per exhs. Band C leaving a balance of N411,730 which is claimed in the suit. The case of the respondent however is that the appellant tendered a sum of N550,00 but that the respondent asked him to deduct the balance of N411,730 from the said sum and pay him the balance of N138,270.

Issue No.3 deals with proper evaluation of the evidence before the court. Counsel argues that irrelevant matters were introduced by the learned trial Judge into his judgment while obvious contradictions between the evidence of the respondent and his pleadings were glossed over. Furthermore, contradiction in the evidence of the respondent and his witnesses in chief and under cross-examination were not considered. Counsel referred to and relied on Emegokwue v. Okadigbo (1973) 4 SC 113; George v. Dominion Flour Mills Ltd. (1963) 1 All NLR 71 at 77, (1973) 2 SCNLR 117; Mogaji v. Odofin (1978) 4 SC 91 at 93; Ozibe v. Chief Aigbe (1977)7 SC 1; Chief Okpiri v. Chief Jonah (1961) All NLR 112, (1961) I SCNLR 174.

The respondent also filed a brief of argument and therein formulated 3 issues for determination thus:-

1. Whether the anormally in the assessment of court fee inadvertently created by the registrar of court below could apply to the prejudice of the respondent’s case.
2. Whether paragraph 6 (Arbitration Clause) of exhibit “A” is mandatory and condition precedent to institution of proceeding in court, non-compliance to which is fatal.
3. Whether it is safe for court to hold that the respondent employed the appellant to manage his (respondent’s) two motor vehicles, having regard to documentary and oral evidence of parties and witnesses.

Arguing his issue No. 1 learned counsel for respondent submits that the non-assessment of the fee to be paid on the counterclaim is not a default on the part of the respondent. The respondent cannot therefore be penalised for it. There was no injury caused to the other party. He refers to Federation Board of Internal Revenue v. Babaoye (1974) I FRCR 4; Jeric (Nig.) Ltd. v. U.B.N Plc. (2000) 82 LRCN 3259 at 3264, (2000) 15 NWLR (Pt. 691) 447. Counsel submits that Onwugbufor v. Okoye (supra) does not apply and is distinguishable from the present case.

On issue No.2, it is submitted that exhibit A, the loan agreement, contains an arbitration clause. Such a clause is mandatory in any agreement. Non-compliance with it is fatal to the hearing of the case- see Yahaya Rabo v. Leadway Assurance Co. Ltd. (1975) NNLR146.

Arguing the issue No.3, it is submitted that the issue concerns the question of proof of the claim and/or the counter-claim and the proper construction of exhibits A, Band C. counsel submits that the exhibits are ambiguous. He points out what he considers as ambiguities in the exhibits.

It is contended by the respondent that the appellant did not file a reply to the counter-claim. It must therefore be taken that the appellant admits the counter-claim. Counsel relies on Order 11 rules 13 and 14 of High Court Rules of Anambra State 1988; Seepc Nigeria Ltd. v. Pan Bisbilder (Nig) Ltd. (1992) 7 NWLR (Pt. 252) 2; Jeric (Nig.) Ltd. v. U.BN Plc. (supra)

At the hearing of the appeal both counsel adopted their respective briefs and urged the court to allow or dismiss the appeal as the case may be.

Before I go into the merits of this appeal, let me say that the facts of this case are unfortunate. It shows betrayal of the trust between two long standing friends. One of the parties to this appeal must be a shameless liar. Whatever may be the result of this appeal, the pangs of conscience of the liar must continue to prick him. I say no more.

Let me deal firstly with the issue of non-payment of court fee in respect of the counter-claim as postulated in issue No. 1 in both briefs. It is a correct statement of the rule of law that no court process on which a fee is payable shall be issued unless and until the appropriate fee payable on the process has been paid. Order 6 rule 5 of the High Court Rules of Anambra State, 1988 applicable to Ebonyi State provides:

“No process on which any fee is payable shall, except by special order of the court, be issued until:-

(a) all fees payable thereon shall have been paid; and

(b) an account thereof initialled as received, shall have been set forth by the officer issuing the process both in the margin and in the counterfoil thereof.”

(Italicise mine for emphasis)

In the case under consideration in this appeal, apparently because the respondent wrapped his counter-claim in his statement of defence, the registrar’s attention was not drawn to it. He therefore did not assess the fee payable on the counter-claim. Consequently no fee was paid. It would have been a different matter if the counter-claim was assessed but the respondent defaulted in paying for it.

The above quoted rule of court provides for an exception. A process on which no fee has been paid may however issue by a “special order of the court”. It is my view that the circumstance of this case is such that if the attention of the lower court were drawn to the fact that no fees were paid on the counter-claim, the court could have exercised its powers under the exception clause provided by the rule and order that the fee be paid after the process has been issued or relieve the respondent with the payment of the fee. The failure to pay the fee was a mistake on the part of the respondent. Rule 8 of the same Order of the High Court Rules provides:

“No document in respect whereof a fee is payable shall be used in any legal proceeding, unless it shall have been initialled as aforesaid by the Registrar or other officer or unless the court shall be otherwise satisfied that the proper fees in respect thereof have been paid.”

The first part of the rule is another function of the court Registrar.

From the record of appeal, there is nothing to show that the Registrar initialled or did not initial the process. The lower court proceeded with the case on the presumption that everything was regular until this issue was raised in this court for the first time. The record shows that the fees as assessed by the Registrar were paid fully. If the Registrar failed to collect the full or appropriate fee, it is not a matter for which a party should be punished. In Onwugbufor v. Okoye (supra) at page 291 the defaulting party flouted a positive order of the court ordered as follows:-

” …. Application for amendment allowed. Plaintiff to file within 7 days and also pay the appropriate court

fees for forfeiture claimed on paragraph 14(d)” (Italicising mine for emphasis)

Despite the above order, the appellant failed to pay the appropriate court fee for forfeiture he claimed.

In the present case, the position is different. The respondent failed to pay the necessary fee for the counter-claim through no fault of his. It is my view that this is a proper case where the exception prescribed by rule 5 of Order 6 should be invoked if the process has already been issued. The appropriate order to validate it should be made. In exercise of my powers under section 16 of the Court of Appeal Act I hereby order that the appropriate fee for the counter-claim be paid by the respondent in the court registry of the court below. This may, of course, depend on the final result of this appeal.

I shall now deal with the next issue in the appeal. The respondent in his brief raises the issue of the arbitration clause in exh. A.

The appellant did not file a reply brief to answer to the issue of the arbitration clause. Exhibit A contains an arbitration clause. It provides that any dispute arising from the loan agreement shall be referred to a panel of arbitrators consisting of four men two of whom shall be nominated by each party.

The evidence on arbitration is inconclusive. According to the appellant, there was an arbitration but it gave no decision. The appellant stated that he duly nominated two arbitrators but the respondent nominated only one vis his wife contrary to the provision of exh. A which required 4 men. The respondent’s wife cannot be a man nor can she be 2 men whom the respondent ought to nominate. The arbitration sat but arrived at no decision. The respondent on the other hand maintained that he did not nominate any person, and that no arbitration sat. The lower court held that the appellant duly nominated two men in accordance with exh. A but that it was the respondent who frustrated the work of the arbitrators by either failing to nominate any person or by nominating only his wife. The lower court therefore held, rightly in my view, that the respondent cannot rely on his default to frustrate the hearing of the appellant’s claim.

More importantly however, where a defendant fails to raise the issue of arbitration clause and rely on same at the early stage of the proceeding but rather takes positive step in the action he would be deemed to have waived his right under the arbitration clause – see Carlen (Nig.) Ltd. v. University of Jos & Anor. (1994) 1 NWLR (Pt. 323) 631 at 664 per Ogundare, J.S.C. see also Ariori v. Elemo (1983) 1 SCNLR 1. In the case in the instant appeal, having regard to the facts of the case, the respondent is deemed to have waived his right under the arbitration clause.

Issue Nos. 2 and 3 of the appellant and No.3 of the respondent substantially raise the question of evaluation of evidence by the trial court. They deal largely on issue of facts. There are exhibits A, B and C which are admitted by both sides. Exhibits A is the loan agreement for the sum of N1,484,535 said to have been a friendly loan made by the appellant to the respondent. A rather strange figure for a friendly loan; be that as it may, the said loan would seem to be admitted by both parties. Exhibits B and C are receipts for a refund of part of the loan vis N472,805 and N600,000.00 respectively. Whether these payments were by rendering an account of the respondent’s vehicles being managed by the appellant or by paying the amounts without reference to any account would seem to be immaterial. It is however a settled fact that after the payment of the money contained in exhibits Band C the balance due to the appellant was N411,730.

The trouble between the parties however started when in October, 1997 the appellant rendered his usual account in respect of the remaining vehicle of the respondent being managed by him. The amount was N555,000. From this amount, the appellant should deduct his remaining N411,730 and pay over the balance to the respondent.

The appellant refused to do this. The quarrel that ensued landed the parties in court.

The amount of the alleged loan is not in dispute. I call it an alleged loan because it was not a loan in the ordinary sense of the word. I had remarked earlier that the nature of the amount involved in the loan makes one wonder whether it was a simple loan transaction in the ordinary sense of the word. The truth is that it was an amount to be used in amortising the amount spent in repairing the two Mercedes Benz lorries of the respondent for which the appellant was appointed a manager to ensure that his money was duly refunded to him. Be that as it may, under the loan agreement (exhibit A) the respondent acknowledged his indebtedness to the appellant in the sum of N1,484,535. As per exhibits Band C the respondent had refunded a total of N1,072,805 leaving a balance of N411,730. The appellant rendered a 3rd account of N550,000 which completely amortised the loan leaving a balance of N138,270 in favour of the respondent. It was this last account that sparked off the controversy between these two age-old friends. From the arrangement which the parties had observed, the appellant ought to deduct his balance of N411,730 from the N550,000 and pay over to the respondent the excess of N138,270. This, the appellant refused to do but instead sued the respondent to court for the N411,730. The respondent counter-claimed for N138,270. At the close of the pleadings, the position was that the appellant filed no defence or reply to the counter-claim. It is quite possible that the failure to file a defence to the counter-claim was due to mistake or negligence on the part of counselor because there was no defence to the counter-claim. Whichever it was, the law is clear on the matter. Where a plaintiff fails or neglects to file a defence or a reply to a counterclaim, he is deemed to admit the counter-claim. He is in the same position as a defendant who fails or neglects to file a defence to a claim. See Seepc (Nig.) Ltd. v. P.N.B Ltd. (1992) 7 NWLR (Pt. 252) 231 at 237.

Now, the learned trial Judge of the lower court made a painstaking review of the evidence led before him and made in-depth findings of fact which findings are unimpeachable. I cannot fault the findings. I am of the view that the findings of fact made by the Judge are in accordance with the evidence before him which he believed.

The conduct of the appellant in this case must be deprecated.

There is no merit in this appeal which must be dismissed. I dismiss the appeal. I order the respondent to pay to the lower court the necessary fee for filing a counter-claim. I affirm the orders made by the lower court. I asses and fix the costs of this appeal at N4,000.00 which shall be paid by the appellant to the respondent.

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Other Citations: (2000)LCN/0770(CA)