B.O. Okafor V. African Continental Bank Ltd & Anor. (1975)

LawGlobal-Hub Lead Judgment Report

FATAYI-WILLIAMS, J.S.C.

 In an action commenced as an undefended suit in the High Court, Lagos, on 22nd August, 1972, the African Continental Bank Ltd., as plaintiffs, claimed from Widi Jallo (who carries on business as Widi Jallo & Sons) as defendant the sum of 46, 413.3.6d. (N92,826.36K) being money lent by the plaintiffs as bankers to the defendant at the defendant’s request, and the interest due from the defendant to the plaintiffs in respect of the said loan.  The plaintiffs also claimed additional interest on the said amount at the rate of 9 per centum per annum compound interest from the 31st day of July, 1972 until judgment and thereafter at the rate of 5 per centum per annum until payment of the said judgment debt.

The defendant was not served with the writ until some time in April, 1973. On 19th April, 1973, he gave notice to the court of his intention to defend the claim. On 7th June, 1973, the defendant filed a Third Party Notice in Court and applied for it to be served on one B.O. Okafor (now the Third Party).  In the Notice, the defendant set out the particulars of the claim of the plaintiffs against the defendant and stated further as follows:-

“The defendant claims against you contribution to the extent of one half of the plaintiff’s claim on the grounds stated in the affidavit annexed to this notice.”

Paragraphs 4, 5, 6, 22, 23 and 31 of the affidavit filed in support and sworn to by the defendant’s clerk read:-

“(4) That the transaction relating to this overdraft was as a result of a business transaction including the defendant/applicant and the Chief Accountant of the African Continental Bank Ltd., Mr. B. Obiora Okafor.

(5) That the said Mr. B.O. Okafor sometime in 1971 approached the defendant for both of them to establish a company together with a Mr. Ibrahim Mikawi, an Egyptian National.

(6) That as a result of meetings held between the three of them a limited liability company named Ekhnatone Ltd was incorporated on the 8th of December, 1971, with the defendant/applicant and Mr. B.O. Okafor as Directors.
…
(22) That the whole money for the business was utilised by Ekhnatone Limited.
…
(23) That as a result of mismanagement and unnecessary interference by Mr. Okafor, the cement business flopped.

(31) That in pursuance of this cement transaction for which this money was utilised, the company Ekhnatone Ltd. entered into a contract agreement which speaks for itself with Messrs. Misr (Nigeria) Ltd. A photocopy of the said contract is exhibited and marked Ex. ‘Q’- “Q2” (The underlining is ours).

The agreement referred to in paragraph 31 of the affidavit was for the sale of 50,000 tons of Egyptian portland cement and is between Misr (Nig.) Ltd. as the seller and Ekhnatone Ltd. as the buyer. It is to be noted that this agreement was executed on behalf of the buyers by the defendant as follows:-

“(Sgd.) W.U. Jallo
Buyer’s signature
Alhaji Widi Usman Jallo,
Chairman – for and on behalf of
Ekhnatone Ltd.,
58, Ikorodu Road, Yaba,
Lagos, Nigeria.”

Pursuant to the service of this Third party Notice, B.O. Okafor, now the Third Party, entered “conditional appearance,” and pleadings were ordered by the court as between the plaintiffs and the defendant on one hand and also as between the defendant and the Third Party on the other on 11th June, 1973.  In his statement of defence filed in reply to the plaintiffs statement of claim, the defendant admitted the plaintiffs’ claim but stated further in paragraphs 2 – 4 thereof as follows:-

“2.The defendant……states and maintains that in so far as the said liability is concerned its incurement is the joint liability of the defendant and the Third Party/defendant, Mr. B.O. Okafor.

3.The defendant will, therefore, rely on his statement of claim against the Third Party/defendant (Mr. B.O. Okafor) and all the records, books, documents, transactions and correspondence so cited in the said statement of claim of the defendant against the said Third Party/defendant (Mr. B.O. Okafor) to show and establish the liability of the said Third Party/defendant to the plaintiff Bank.”