Bank Of Ireland V. Union Bank Of Nigeria Ltd. & Anor (1998)

LAWGLOBAL HUB Lead Judgment Report

KUTIGI, J.S.C.

Sometime in 1981, the plaintiff company entered into a contract with another company Kingscourt Construction Group (Export) Limited, Ireland for the supply of some products at an agreed price. The plaintiff was required to make an advance payment in the sum of $566,250.00 (US. dollars). In line with the prevailing rules of the Central Bank of Nigeria, the plaintiff was required to obtain a guarantee from a reputable bank abroad before the advance payment could be made. The plaintiff approached the defendant (Union Bank) its bankers, which then obtained the necessary guarantee from the Bank of Ireland, the 3rd party herein. The foreign currency was thereafter remitted by the defendant through the 3rd party to be paid over to the ultimate beneficiary, the Kingscourt Ltd., which had since failed in breach of its contract to supply any goods to the plaintiff. It had also failed to refund the money paid. Accordingly, the plaintiff issued a writ of summons against the defendant in the Benin High Court seeking for a declaratory order and an order directing the defendant to pay the current value of the aforesaid sum together with interest to the plaintiff. The plaintiff averred that the defendant bank had been negligent in the handling of their contract with them. The defendant denied that. The defendant is holding the 3rd party to its guarantee under which it undertakes to repay the money herein. It is doubtless therefore that the 3rd party featured prominently in the pleadings of both the plaintiff and the defendant. The defendant consequently applied ex parte to the High Court to have both the 3rd party and Kingscourt Ltd. joined as third parties to the action. The ex-parte motion was heard on l6th May, 1991 and in a considered ruling, the learned trial Judge granted the application thus:-

“Accordingly, the application is granted as prayed. The proposed third party notices are to issue for service outside jurisdiction within 7 days from today and the defendant thereafter shall effect service of same together with copies of the writ of summons, statement of claim and statement of defence and other relevant processes, within 14days of the issue of the said notices. And upon due service, the third parties shall enter an appearance within 30 days of the date of service. Case adjourned to 16th and 17th July, 1991 for hearing.”

Upon being served with the third party notices, the Bank of Ireland (third party) by its learned counsel, Mbanefo, SAN., entered full appearance. He then filed a motion dated 4th November, 1991. wherein he sought to strike out the 3rd party from the suit or alternatively granting 3rd party leave to withdraw its appearance in the suit. This motion was later withdrawn and struck out with costs by the court upon the application made to that effect by its counsel, Mbanefo, on 9th March, 1992.

Before that day, learned counsel had filed another motion on notice wherein the third party sought for reliefs similar to those earlier withdrawn and struck out. It reads:-

“TAKE NOTICE that this honourable court will be moved on Friday the 7th day of February, 1992 at the hour of 9 o’clock in the forenoon or so soon thereafter as counsel may be heard on behalf of the third party/applicant for an order striking out the name of the third party/applicant from the suit and/or setting aside the third party notice and/or writ served on the third party/applicant or alternatively granting the third party/applicant leave to withdraw its appearance in this suit on the following grounds:

1. That the third party notice/writ served on the third party/applicant is null and void for non-compliance with the rules of this honourable court as well as the Sheriffs and Civil Process Act concerning service out of the jurisdiction.
2. That the alleged cause of action did not arise within the jurisdiction of this honourable court.
3. That this honourable court has no jurisdiction over the third party/applicant who is neither resident nor carrying on business within the jurisdiction whether through an agent or otherwise.
4. That the proper place for the defendant to sue the third party/ applicant is in the courts of the Republic of Ireland since any order made or judgment given by this honourable court will be nugatory and unenforceable.
5. That the action against the third party/applicant cannot conveniently be tried with the action filed by the plaintiff/respondent in this suit.

AND for such further or other orders as this honourable court may deem fit to make.”

Counter- affidavits were filed and arguments were received. In a reserved ruling the learned trial Judge dismissed the application with costs against the 3rd party. The ruling concluded thus:-

“As stated above, the applicants were brought in by an order of this court pursuant to an application for the purposes. After the applicants were served, they formally filed a memorandum of appearance and took the steps set out in paragraphs 4, 5 and 6 0f the further and better counter- affidavit set out above in this ruling. In Katto v. CBN (1991) 9 NWLR (Pt.214) 126 the SCN held inter alia as follows:

’15. Where there is a breach of the rules of court and which breach may amount to an irregularity … the complain must be deemed to have waived the said irregularity since he took steps in that court … (Italics is mine for emphasis)

In view of the provisions of Order 10 rule 4 and the recent decision of the SCN in Katto v. CBN (supra) it cannot be said that the ruling of this court delivered herein on 16/5/91 and attached to the motion papers as Exh. 002 is a nullity.

Arising from all the above, therefore, this application must fail and it is hereby dismissed with N100.00 costs against the applicant in favour of defendant/respondent.”

The 3rd party not satisfied with the ruling of the High Court, then appealed to the Court of Appeal, holden at Benin. In a unanimous judgment, the Court of Appeal dismissed the appeal and confirmed the ruling of the trial High Court.

Still dissatisfied with the judgment of the Court of Appeal, the 3rd party has further appealed to this court. In compliance with the rules of court, the parties filed and exchanged their briefs of argument. These were adopted and relied upon by counsel at the hearing of the appeal. Additional oral submissions were also made at the time.