Ben E. Chidoka & Anor V. First City Finance Company Limited (2000)
LawGlobal-Hub Lead Judgment Report
GALADIMA, J.C.A.
These two consolidated appeals were brought against the judgment of Silva J., sitting at the Lagos Division of the High Court of Lagos State delivered on 12th July, 1991, in suit No.LD/1669/91 and against his ruling of same date refusing to amend the defendants now appellants, statement of defence to raise a legal defence in the suit.
The appellants are couple. They jointly and severally applied in 1986 to the respondent for loan facilities to enable them execute the business of exporting shrimps to London, United Kingdom. Consequent upon two set of agreement in writing executed by the parties the respondent advanced the loan facilities in the sum of:
(a) N150,000 repayable on or before 20th January, 1987 in the sum of N195,200.
(b) N50,000 repayable on or before 20th January, 1987 in the sum of N61,000.
It would appear that the respondent’s claim leading to the appeal for certain sums of money due from the appellants as at 1/8/89 inclusive of normal and compound interest charges was N486,780. The particulars of claim explain this figure as resulting from charging interest on the sum disbursed and further 3% interest on the sum, apart from flat interest rate of 22%.
The judgment was entered in favour of the respondent against the appellants jointly and severally for the said sum of N480,780.
Dissatisfied the appellants appealed against the ruling and judgment of the lower court.
The solitary ground of appeal of the appellants against the ruling of 12/7/91 with the particular is as follows:
GROUND OF APPEAL
The learned trial Judge did not exercise his discretion judicially and judiciously in refusing the defendant’s application to amend their statement of defence to include the issue of illegality of the transactions on which plaintiffs claims were based, thus, holding that the application was made too late in the day in bad faith and meant to overreach the plaintiff and proceeding to deliver judgment:
PARTICULARS…
(i) The amendment sought did not raise new issues of fact but simply a defence in law which was ex-facie apparent on the plaintiff’s claims in and their evidence on the record.
(ii) The court did not give proper consideration to the obvious circumstance placed before the court by affidavit evidence which necessitated the amendment, i.e. change of counsel due to withdrawal of earlier counsel without leave of court.
(iii) The defendant’s newly engaged counsel immediately intimated the court that they were going to apply for amendment of pleadings they inherited, but could not do so timorously because their instructions were not perfected as promised by the defendants.
(iv) The learned trial Judge had fettered his discretion to consider the application for amendment judicially and judiciously when as at the time of delivering the ruling he had written his judgment and made up his mind hence his failure to give direction allowing defence to address when the case was only fixed for ruling on the said date and not for judgment.
(v) The reasons given for refusing the amendment would justify a refusal to hear the application on the merit.
The four grounds of appeal of the appellants against the judgment of lower court delivered on 12/7/91, stripped of their particulars, are as follows:
GROUNDS OF APPEAL
(a) The learned trial Judge erred in law when he gave judgment in favour of the plaintiff when the transactions the subject-matter of the suit are ex-facie illegal and unenforceable.
(b) The learned trial Judge misdirected himself in law and thereby deprived the defendants of their right to fair hearing when he proceeded to deliver judgment at the close of plaintiffs case and after delivering the ruling by which the court refused the defendant’s application for an amendment.
(c) The learned trial Judge erred in law in giving judgment to the plaintiff when the writ of summons and the statement of claim ex facie are clearly incompetent.
(d) The learned trial Judge erred in law in awarding the sum of N486, 780.00 as loan and interest accruing in favour of the plaintiff thereby disregarding the provision of section 17 of the Money Lenders Law aforesaid.”
It is obvious now that we have two appeals before this court. We have consolidated both for hearing. In the appellant’s brief the issues identified for determination were stated to be the following:
”301.Whether the defendant’s application to amend their statement of defence to raise illegality of the plaintiff’s claim under Money Lender’s Law Cap. 85 Laws of Lagos State was rightly refused by the lower court.
- Whether the plaintiffs claim was exfacie illegal and liable to be dismissed.
- Whether the defendants were denied fair hearing in the conduct of the proceedings leading to judgment by the trial court.
The respondent on the other hand, filed 3 issues that arise for determination in this appeal as follows:
(a) Whether having regard to all the relevant facts of this case the learned trial Judge was right in refusing appellant’s application for leave to amend their statement of defence in the High Court.
(b) Whether respondent’s claim in the High court was ex-facie illegal and liable to be dismissed having regard to the state of pleadings and evidence led at the material time before the learned trial Judge.
(c) Whether the appellants were denied their constitutional right to fair hearing during trial of the substantive suit in the High Court.
I am of the view that the respondent’s issues are adequately covered by those of the appellants. I shall therefore be guided in this judgment by the issues of the appellants. I shall take all the issues raised by the appellants seriatim.
The appellant’s issue No.1 arises from the sole ground of the notice of appeal filed with the leave of this court against the ruling of the lower court dismissing the appellant’s application to amend their statement of defence to raise illegality of the respondent’s claim under Money Lenders Law Cap. 85, Laws of Lagos State, 1973. It is whether the lower court was right to have refused the defendants the leave to further amend their amended statement of defence.
Order 25 rule 1 of the Lagos High Court Rules, 1972 which was applicable to the defendant’s application to amend provides as follows:-
“1. The court or a Judge in chambers may, at any stage of the proceedings, allow either party to alter, or amend his indorsement or pleadings, in such manner and on such terms as may be just and all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties”.
Before considering whether or not the lower court was right in refusing to grant the leave sought to further amend the amended statement of defence, it is helpful to examine the circumstances leading to the bringing of the application.
Following the dismissal of the summons for judgment brought by the plaintiff, the defendants filed an amended statement of defence. In the amended statement of defence, the defendants in paragraph 6 thereof raised a defence couched in these words:
“6. The defendants deny paragraph 12 of the statement of claim and further aver that the subject-matter of the alleged agreement that is transaction in foreign exchange being illegal, null and void, the plaintiff could not hold them liable they not being authorized dealers under Exchange Control Act, 1962, Foreign Currency (Domiciliary Accounts) Decree No.18, 1998 and Second Tier Foreign Exchange Market Decree No. 23 of 1986. The defendants shall rely on all relevant laws promulgated on Foreign Exchange transactions in Nigeria”.
In the above paragraph, the defendants sought to show that the transaction in respect of which the plaintiff brought its suit was illegal being one in contravention of the Foreign Exchange Laws and Regulations in Nigeria. The suit was fixed for hearing on 6th and 7th December, 1990. The trial opened on that date. The plaintiff called one witness in support of its case and closed the case. The defence counsel Dr. Oloyede who should have immediately opened the defence case asked for an adjournment on the excuse that his witnesses were not in court. Counsel further urged the court to hear an application he had filed. Following the remarks made by Chief Tagbo for the plaintiff that the suit was then part- heard, Dr. Oloyede applied to withdraw a motion he had filed on 30/1/90. The motion was then struck out and the suit adjourned to 12/12/90 for defence. On 12/12/90, there was an indication of a move towards settlement. The court then adjourned in no mistakable terms thus:
“Court: – with the agreement of both counsels, the suit is adjourned to 22nd February, 1991 for report of settlement or continuation of proceedings if settlement is not reached”.
On 22/2/91, Dr. Oloyede rather than appear to put the defence sent a letter to the court withdrawing further appearance from the suit. The 2nd defendant who was in court sought for an adjournment. Despite the stiff opposition from Chief Tagbo for the plaintiff, the trial Judge adjourned the matter to 4/4/91 to enable the defendants instruct another counsel.
On 4/4/91, a counsel Mr. Alao Aka- Bashorun appeared for the defendants. He explained he had just been briefed and sought for an adjournment to file a further amended statement of defence. The lower court again adjourned to 30/4/91 for defence.
On 30/4/91, a new counsel Mr. T. Ajayi held the brief of the Alao Aka-Bashorun. He asked for another adjournment. Meanwhile, no further amended statement of defence had been filed as Mr. Alao Aka-Bashorun has indicated on 4/4/91.
The trial Judge then called on Mr. Ajayi to put the case for the 2nd defendant who was in court. Mr. Ajayi declined to do so. The court then said:
“Court:- I shall therefore at this stage take it that the 2nd defendant does not wish to call any evidence. It is pertinent to recall here that the plaintiff closed its case on 6th December, 1990. I regard the cases on both sides closed and I shall now listen to final address.
The address opened when Chief Tagbo for the plaintiff addressed the court. Mr. Ajayi was recorded as saying: “I shall convey to my Senior in chambers details of to day’s proceedings. I am not seised of the matter. I respectfully ask for adjournment”.
The case was adjourned to 24/5/91 for judgment. In the meantime, the defendants had on 20/5/91 filed an application to further amend the statement of defence. The motion was filed some 20 days after the suit had been adjourned to 24/5/91 for judgment. The motion was argued on 27/5/91 and ruling thereon delivered on 12/7/99.
The amendment sought at the lower court was to add a paragraph to the appellant’s amended statement of defence thus:
“8. The defendants would further contend at the trial of this suit that the plaintiff lacks competence to institute this action in that the two agreements entered into by the parties to this suit on 20th November, 1986 and 19th December, 1986 are null, void and illegal in that the plaintiff/company; being neither a bank nor a money lender respectively within the laws of Nigeria and Lagos State; lacks legal capacity to either charge any interests whatsoever as the loans granted to the defendants or charge interest which are not provided for under the law”.
Appellant’s counsel has in his brief argued that the lower court was wrong not to have granted the amendment. Counsel relied on Beluonwu v. O. K. Isokariari & Sons (Nig) Ltd. (1994) 7 NWLR (Pt.358) 587 at 605 – 606; Imonikhe v. A.-G., Bendel State (1992) 6 NWLR (Pt.248) 396 at 414; Aina v. Jinadu (1992) 4 NWLR (Pt.233) 91 at 105.
The general principle is that an amendment may be granted at any stage before judgment. See Okafor v. Ikeanyi (1979) 3-4 SC 99, and Chief Ojah v. Chief Eyo Ogboni (1976) 4 SC 69, 1 NMLR 95. However, if granting an amendment would unduly delay the hearing of the suit or unfairly prejudice either party to the suit, then an amendment may not be granted. See Dominion Flour Mills Ltd. v. Abimbola George (1960) LLR 53.
In the instant case the trial Judge refusing the leave to amend said:-
“An amendment will be refused if it will cause injustice or surprise or embarrassment to the other party. An amendment asked for in bad faith will not be granted. An amendment will also not be granted where the applicant has caused some injury to the respondent which cannot be adequately compensated by costs or otherwise: See Oguntimeyin v. Gubere (1964) 1 All NLR 176 at 179; Metal Const. v. Migliore (1979) 6-9 SC 163 at 179, 199-200; Adetutu v. Aderohunmu (1984) 1 SCNLR 515. It is in the courts discretion to grant leave to amend pleadings, but the court’s discretion ought to be exercised so as to do what justice and fair play may require in the particular case. See J.BJ & Brothers (Nig.) Ltd. v. Daewoo Industries Company Ltd. (1986) 1 NWLR (Pt.16) 352 at 359.
It is my view that this amendment has come too late even though it superficially appears to be one that would bring an alleged illegality to the notice of the court. Apart from the fact that it has not been brought in good faith, to grant it would cause further unnecessary delay in the determination of this case. I think it is a useless amendment that is intended to overreach the plaintiff’s case”.
I have observed earlier on, that the plaintiff closed its case and the case had been fixed for judgment at the time when the defendants sought the leave of court to amend their statement of defence to plead a fresh issue of illegality. They had pleaded an illegality arising from an alleged infraction of Foreign Exchange Regulations in their amended statement of defence. They however, did not call evidence in support of the averment. This amendment proposed, having been brought after the respondent had addressed the court and the case was adjourned for judgment is intended to overreach, embarrass or surprise the respondent who would now not have opportunity to react to the amendment sought to be made. Having regard to the facts and circumstances of this case, the learned trial Judge was right in refusing appellant’s application to further amend their statement of defence. It was brought mala fide intended to overreach the appellants. It is not shown that the exercise of his discretion is manifestly wrong, arbitrary, reckless or injurious. I cannot interfere with it: See University of Lagos v. C.I.O. Olaniyan (1985) 1 NWLR (Pt.1) 156.
Issue No.2 is whether the plaintiffs claim was ex-facie illegal and liable to be dismissed.
This issue may appear to be a repetition of first issue. It is not quite so. The distinction is well explained in the appellant’s brief that assuming no application for amendment of pleading was made by the appellants, the claim of the respondent if found to be ex-facie illegal it still ought to have been found unenforceable. In other words, even if issue No. 1 is resolved against the appellants (as it has been done), they are still entitled to canvass before this court that the claim being ex-facie illegal was wrongly allowed by the trial court.
The recorded evidence of respondent’s only witness at p.30 of the record is that:-
“In November, and December, 1986 two advances of N160,000 and N50,000 were given to the defendant who agreed to pay interest on the two sums. With respect to the first agreement No. CF/214 dated November, 1986, the defendants agreed to pay a total sum of N195,200. They agreed to pay N61,999 in respect of the second agreement No.CF/214A. Both loans were to be repaid in or before 20th January, 1987…”
“The learned trial Judge accepted this evidence when he held:
The defendant gave no evidence. An application to further amend the statement of defence was refused a short while before this judgment. There is therefore no evidence before me either in support of averments in the statement of defence or in contradiction of the evidence of PW1. I am bound to accept the uncontradicted evidence and act upon them”.
I have carefully examined the writ of summons, and various pleadings of the parties upon which they contested the suit. The trial of the suit leading to this appeal revolved around those issues, viz:-
(a) Respondent as a Finance Company at the request of the appellants entered into written contract to finance the export of shrimps to London, U.K. by the appellant by advancing a total sum of N210,000 to them.
(b) Appellants in consideration of the respondent financing their export business, issued two post-dated cheques for a total sum of N256,000.00 in favour of the respondent for repayment or the loan.
(c) When repayment date was due respondent presented the cheques and they were dishonoured as the appellants refused and/or neglected to repay respondent’s money.
(d) Respondent instituted action to recover its funds. The appellants denied liability on the grounds that the contract was illegal because provision was made for repayment in pounds sterling.
I have already referred to the evidence of respondent’s only witness. He was cross-examined by appellant’s counsel concerning the clause for repayment in pounds sterling. The issue of the application of Money Lenders Law Cap. 58 of Lagos State was neither raised nor contested between the parties. There is nothing on record to suggest that the claim of the respondent in the trial court was ex-facie illegal. There is neither pleading nor evidence on record on extraneous issue of the application of Money Lenders Law now sought to be pressed before this court without proper leave to do so.
The major plank of appellant’s argument under the issue No.2 is that respondent’s action in the court below ought to have been dismissed suo motu by the trial Judge as it was unenforceable because of the provision of Money Lenders Laws of Lagos State.
Even if the issue of illegality was raised suo motu by the trial court, nothing precluded it from looking into relevant statutory provisions and case law that deal with the issue. It would seem to me that by the provision of section 2(c) of the Money Lenders Laws Cap. 58 the respondent is entitled to enter into the kind of contract it entered with the appellants.
Appellants having duly taken benefit from the transaction leading to the suit herein cannot be heard to say that the transaction is illegal because they are now being asked to fulfill their obligation under the contract: See Eboni Finance and Securities Ltd. v. Wale Ojo Technical Services Ltd. (1996) 7 NWLR (Pt.461) 464. See also an earlier decision Veritas Insurance v. Citi Trust Invest. Ltd. (1993) 3 NWLR (pt.281) 349; A. Ibrahim v. F. Osim (1988) 3 NWLR (Pt.82) 257-279.
I therefore hold that the respondent’s claim before the learned trial Judge, cannot be regarded as being ex-facie illegal considering the state of pleadings, and issues contested by the parties.
In issue No.3 it is essentially the appellant’s complaint that they were denied fair hearing in the conduct of the proceedings leading to judgment by the trial court. Fair hearing or lack of it lies on the procedure followed in the determination of a case. Plethora of decisions of the Supreme Court and this court have firmly established that the legal consequences of where there is denial of fair hearing in any judicial proceeding, that proceeding will be declared a nullity.
In the instant case, I have carefully analysed the facts as they relate to the conduct of the appellants and counsel. Various opportunities were given to the appellants to put up their defence in the trial court. This is apparent on the face of the record before this court. The trial court would appear to have over-indulged the appellants given them ample opportunity to be heard. My observation is clearly borne out by the evidence on record. Right from on set the appellant did not find it easy to effect personal service of the writ and statement of claim on appellants who avoided service until the respondent was compelled to resort to substituted service on 27/11/89. Next, the record shows that the appellants filed their memorandum of appearance on 20/11/89 and their statement of defence on 7/2/90. This was well after the period allowed in the High Court (Civil Procedure) Rules. It would appear from the record also that while no application to regularise the statement of defence was filed, the appellants went ahead to file a different statement of defence again without leave on 22/6/90/. (See pp. 9-10 of the record of appeal).
The learned trial Judge drew the attention of the appellants counsel to these anomalies herein before stated on 9/7/90. On 16/7/90, the appellants finally regularised their position and trial of the suit was adjourned to 6th and 7th December, 1990. On 6/12/90, the day set down for trial appellants counsel then applied for adjournment because he had wanted the court to hear a motion to dismiss respondent’s claim. This motion was not found in court’s file and for which hearing date of 21/1/91 had been assigned by the Registry.
Other forms of delay tactics employed by the appellants intended to frustrate the trial of the case were given in detail in paragraphs, 3.1, 3.2, and 5 of the respondent’s brief of argument and my earlier account above.
It is trite law that where a counsel deliberately fails to avail himself of the opportunity of delivering his address or where the argument is unanswerable, the fact that counsel did not address the court cannot be denial of fair hearing which could vitiate the judgment.
In N. Ekara v. J. Takim (1995) 5 NWLR (Pt.394) 242; Akintan, JCA. condemning the delay tactics of a counsel, in a situation similar to the instant case has this to say:
“In the instant case, the various application made by the counsel were aimed only as ignoble and reprehensive ploys to delay indefinitely the speedy completion and determination of the appeal. Parties should not therefore be allowed by the court to use dilatory tactics to stall the wheel of justice”.
Where counsel refused to open his defence in spite of several invitations of the court, the appellants and the counsel cannot be heard to complain that the appellant’s constitutional right to fair hearing as enshrined in section 36(1) of the Constitution of the Federal Republic of Nigeria, 1999 was denied them. See Lawal Tunbi v. Isreal Opawole (2000) 2 NWLR (Pt.644) 275; Ecoconsult Ltd. v. Pancho Villa Ltd (2000) 3 NWLR (Pt.647) 141; Ajidahun v. Ajidahun (2000) 4 NWLR (Pt.654) 605.
Circumstances could call for the trial court to tolerate delay which is excusable, not that which is to deny justice. The ploys and tactics employed by the appellants in this appeal was to ‘stall the wheel of justice’ which must not be allowed.
On the whole, I am satisfied that this appeal lacks merit and it is hereby dismissed.
I hereby affirm the ruling of trial court refusing the appellants to further amend their statement of defence. The judgment is equally affirmed.
The respondent is entitled to costs which I assess and fix at N5,000.
Other Citations: (2000)LCN/0784(CA)