Assad Sabbagh & Naman Sabbagh (Trading As Sabbagh Bros.) V Bank Of West Africa Ltd (1966) LLJR-SC

Assad Sabbagh & Naman Sabbagh (Trading As Sabbagh Bros.) V Bank Of West Africa Ltd (1966)

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In the Lagos High Court Suit No. 301/62 the Bank obtained judgment for (a) £3,932-11s-3d as the sum due on the defendants’ overdraft account (b) interest at 10 per cent from 30th May, 1962 to 26th March, 1963 (the date of the judgment) and (c) interest at 5 per cent from 27th March, 1963 until the judgment debt is satisfied. In their appeal the defendants objected to Items (a) and (c) only: on (a) they submit that certain transfers from their account were made by the Bank without authority, and on (c) that interest could not have been allowed in law.

Apart from permutations which may arise, there are three simple cases of interest on the judgment debt: First, where the High Court gives judgment for a sum and does not grant time for payment, with the result that the sum is a present debt; Second, where the High Court, when giving judgment or afterwards, grants time for payment; and Third, where the High Court, when giving judgment or afterwards, orders payment by instalments.

For the court’s power to allow interest in the second case and the third reference was made to rules 7 and 8 in Order 46 of the Supreme Court (Civil Procedure) Rules of 1945 (at p.75 in vol. 10 of the 1948 Laws of Nigeria). In these two cases the judgment debt ceases to be payable as a present debt when the judgment is given; we are concerned with the first case.

In Barclays Bank D.C.O. v. Adigun, 1962 N.N.L.R. 40, the Bank claimed a sum as due on the overdraft and-

“Interest thereon at 5 per cent from the date of judgment pursuant to 0.46, r.7 of our Civil Procedure Rules.”

Smith, S.P.J. decided that the above local rule 7 applied only where the court granted time for payment, and that view was not disputed before us. Counsel for the Bank there also prayed in aid the English rule 16 in Order 42 of the Supreme Court Rules, which provides as follows:-

“16. Every writ of execution for the recovery of money shall be indorsed with a direction to the sheriff, or other officer or person to whom the writ is directed, to levy the money really due and payable and sought to be recovered under the judgment or order, stating the amount, and also to levy interest thereon, if sought to be recovered, at the rate of £4 per cent per annum from the time when the judgment or order was entered or made, provided that in cases where there is an agreement between the parties that more than £4 per cent interest shall be secured by the judgment or order, then the indorsement may be accordingly to levy the amount of interest so agreed. (Rule 17,

The notes in the White Book below rule 16 state that-

“Every judgment debt bears interest at 4 per cent from the date of judgment if pronounced in court; otherwise from the date of entry (Re Claget. infra; the judgments Act, 1838, s.17)” etc. Section 17 of this Act (as printed in Halsbury’s Statutes, vol. 13 p. 369) provides that-

“Every judgment debt shall carry interest at the rate of four pounds per centum per annum from the time of entering up the judgment until the same shall be satisfied and such interest may be levied under a writ of execution, on such judgment.”

Smith, S.P.J. was of opinion that, as there was no local provision similar to the above English rule 16, the Bank could not recover interest on the judgment debt as a present debt payable upon judgment being given.

Assuming for the moment that a judgment debt which is payable forthwith carries interest, we are inclined to think that it would be wrong to deprive the judgment creditor of interest merely on the ground that there was no local rule similar to the above English rule: the maxim ubi jus ibi re medium might be invoked to entertain an application for interest. But in a Lagos case that point does not arise, for section 12 of the High Court of Lagos Act provides that-

“12. The jurisdiction vested in the High Court shall, so far as practice and procedure are concerned, be exercised in the manner provided by this or any other Ordinance, or by such rules and orders of court as may be made pursuant to this or any other Ordinance, and in the absence of any such provisions in substantial conformity with the practice and procedure for the time being of Her Majesty’s High Court of Justice in England.”

Thus the absence of a local rule does not matter, and the question of substance is whether the Judgments Act, 1838 applies as being a statute of general application in accordance with section 45 of our Interpretation Act (cap. 89 in the 1958 Laws of the Federation of Nigeria and Lagos) which provides in subsections (1) and (2) as follows:-

“45. (l) Subject to the provisions of this section and except in so far as other provision is made by any Federal law, the common law of England and the doctrines of equity, together with the statutes of general application that were in force in England on the 1st day of January, 1900, shall be in force in Lagos and, in so far as they relate to any matter within the exclusive legislative competence of the Federal Legislature, shall be in force elsewhere in the Federation.

(2) Such Imperial laws shall be in force so far only as the limits of the local jurisdiction and local circumstances shall permit and subject to any Federal law.”

Mr Lardner (the learned counsel for the defendants) conceded that the Judgments Act, 1838 applied if there was no local provision to the contrary; he did not point to any contrary provision but argued that, as we had a comprehensive Sheriffs and Enforcement of Judgments and Orders Ordinance (as entitled in cap. 205 of the 1948 Laws) that English Act was excluded. For this argument he cited Ogbuagu v. Police, 20 N.L.R. 139 at 141, where the judge observed that-

“we have in Nigeria a Criminal Code which is meant to be complete and exhaustive”-

and gave it as his opinion obiter that section 7 of the Libel Act, 1843 did not apply in Nigeria in a case of seditious libel brought under section 51 of the Criminal Code. The judge pointed out that the Code provided certain general defences, e.g. insanity or intoxication; that it defined the offences and in regard to some provided special defences, but whilst a provision similar to section 7 of the Libel Act, 1843 was provided in regard to a charge of defamatory libel by section 380(2) of the Code, there was no similar provision in regard to seditious libel and it was to be presumed that the legislature did not wish to make that defence available in a charge of seditious libel.

We do not think that there is a truly analogous situation in the case of the Sheriffs and Civil Process Ordinance (as entitled in cap. 189 of the 1958 Laws of the Federation etc.). This Ordinance or Act does not relate to the judgments which the courts have power to give or to interest as an incident in law on a judgment debt: the Ordinance is concerned with the recovery of the money payable under the judgment and provides modes of execution and enforcement of judgments, and we cannot see why the silence of the Ordinance on interest should affect the judgment creditor’s right to interest by virtue of section 17 of the Judgments Act, 1838. In the case of In re Claget: ex parte Lewis (Weekly Notes for May 5, 1888, p.100) the Court of Appeal said as follows:

“The effect of section 17 was to impose on a judgment debtor a statutory duty to pay interest on the judgment debt, and the interest became a debt due from him. It could be recovered by execution on the judgment, but it could also be recovered by any other legal process. The interest was a debt necessarily attached to the judgment debt” etc.

The English rule 16 in Order 42 provides machinery for recovery by execution of what in law is due and payable under the judgment, and some such machinery ought to have been provided in the local legislation on execution; but we cannot agree that the omission to provide this machinery can have the effect of depriving the judgment creditor of a right he has in law as the fruit of his judgment: we cannot agree that such an omission can have the effect of absolving the judgment debtor from paying interest which, in the words of the Court of Appeal, is “a debt due from him.” It having been conceded by Mr Lardner that the Judgments Act, 1838 applies, nothing in the local legislation has been referred to for not applying section 17 to a judgment debt that is payable forthwith; but the High Court could not have ordered interest at five per cent, and the judgment under appeal will he varied to make it four per cent.

The defendants’ other objection is to the amount of £3,932-1 is-3d, as being the amount they owed on 29th May, 1962. They alleged that the Bank since May, 1957, without their consent or authority, transferred monthly sums of £150 from their account to another account, and they counterclaimed for these unlawful debits the repayment of which they demanded but were refused. All that had no substance. The Bank produced a letter of 28th May, 1957 as the authority to transfer to the account of their deceased father, Sado Sabbagh, and a letter of 26th August, 1959 of apology from the 1st defendant that he had not been able to do more. Shortly, the story is as follows:-

The deceased owed the Bank when he died in March 1956 over £19,000; his overdraft was secured by mortgage; and the 1st defendant was one of the administrators of his estate. The defendants were given overdraft facilities in June 1956 and traded in that way.

Their debit was over £5,000 in April 1957 and often soared to and hovered at that height. The Bank wanted the deceased’s account to be cleared. The 1st defendant’s evidence is that he agreed to pay “temporarily” £150 monthly into that account and signed the letter of 28th May, 1957 at the manager’s request. The Bank produced a statement of the transfers made; they were shown in the statements of account sent periodically by the Bank to the defendants, who never demurred; and here, anticipating a matter to which we shall advert shortly, we refer to the Bank’s letter of 25th August, 1959 reminding the lst defendant that on the 21st July he had undertaken to make substantial deposits to the estate account, and giving him details of outstanding balances- Sabbagh Bros. Dr £5,250-7s-0d; S. Sabbagh (deceased) Dr. £21,405-7s-7d; Estate of S. Sabbagh (deceased) Dr. £2,543-Os-5d. The 1st defendant answered on 26th August, 1959, apologising that he had not kept his promise in regard to the estate account, and promising afresh to do what the Bank wanted about it and also gradually to reduce the Sabbagh Brothers’ account.

The matter we have to advert to is the letter of 28th May, 1957-the authority to transfer £150 monthly to the estate account. There was a halfhearted argument that the Bank ought not to make transfers when the Sabbagh Brothers account was in debit more than half the overdraft ceiling; say £2,500. Having regard to the evidence, we think there is no substance in it. The more serious argument revolved on the fact that there is on that letter a bold stamp impression “CANCELLED 29 Nov. 1957.” The evidence of Mr Coulter was on what Mr Smith, the previous manager, told him. Mr Ibekwe (the learned counsel for the Bank) pointed out that the Defence did not plead that they had given an authority in May 1957 which was cancelled by agreement in November 1957; the defence was that the transfers were made without consent or authority.

The 1st defendant gave evidence of how Mr Smith stamped those words in his presence; the trial judge did of believe it, and right so having regard to the fact that the letter had a note that instructions to cancel or vary the payment must be in writing but there were no such instructions, and to the fact that the Bank continued to make transfers after November 1957 to the defendants’ knowledge, is already stated, and without any demur on their part but with an apology from them in August 1959.

It remains to add, with regard to costs, that in the court below the defendants did not raise any objection that interest on the judgment debt was wrong in law, and that on appeal their objection was not that the rate should be four per cent, but that no interest could in law have been allowed. The Court orders as follows:-

The decision of 26th March, 1963 given by the High Court of Lagos in Suit No. 301/62 shall be varied to read “interest at four per cent per annum from 27th March, 1963 until the judgment debt is satisfied,” but otherwise shall stand; and the defendants shall also pay thirty-three guineas as costs of appeal.

Other Citation: (1966) LCN/1307(SC)

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