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Chief Harold Sodipo V. Lemninkainen Oy & Anor (1986) LLJR-SC

Chief Harold Sodipo V. Lemninkainen Oy & Anor (1986)

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It is necessary, for a fair understanding of the background to this appeal to set out some of the facts. The plaintiffs in the High Court of Justice, Lagos, who are now the Respondents in this Court, filed a writ of summons. I will set out the writ therein








To Chief Harold Sodipo of 1, Harold Sodipo Crescent, G.R.A., Ikeja in the Lagos State of Nigeria.

You are hereby commanded that within eight days after the service of this writ on you, inclusive of the day of such service, you do cause an appearance to be entered for you in an action at the suit of Plaintiffs and take notice that in default of your so doing the plaintiff may proceed therein, and judgment may be given in your absence.

Dated this 18th day of December, 1979.

By Order of the Court.

(Sgd .) Opako

Higher Registrar.

N.B.-This Writ is to be served within twelve calendar months from the date of the last renewal, including the day of such date, and not afterwards. The defendant may enter appearance personally or by Legal Practitioner by handing in the appropriate forms, duly completed; at the Registry of the Judicial Division in which the action is brought, or by handing them to the Registry by registered post.

If the defendant enters an appearance he must also deliver a defence to the solicitor for the plaintiff within fourteen days from the last day of the time limited for appearance, unless such time is extended by the Court or a Judge, otherwise judgment may be entered against him without notice; unless he has in the meantime been served with a summons for judgment.”


The plaintiff’s claim against the defendant is for the sum of $1,169,817.41 and $17,000 or their equivalent, N760, 556.91 being money payable by the Defendant to the Plaintiffs for money lent by the Plaintiffs to the Defendant as per particulars below:


5/7/76 S385,360.96 N241,454.24

2/8/76 415,536.47 260,361.20

2/8/76 39,900.00 25,000.00

15/10/76 $17,000.00


20/5/77 39,998.70

20/5/77 49,998.53

20/5/77 124,320.11

TOTAL ……………………………………………

S1,169,817.41 $17,000.00 N760,556.91


In the alternative, the Plaintiffs claim the said $1,169,817.41 and 17,000.00 Pounds or their equivalent, N760,556.91 being money payable by the Defendant to the Plaintiffs for money had and received by the Defendant for the use of the Plaintiffs. The Plaintiffs also claim interest on the said sum at the rate of 9% until payment of judgment.

(Sgd.) Kehinde Sofola

pp. Kehinde Sofola & Co.

One should observe at this stage that the claim as disclosed by the Statement of Claim, endorsed on the writ, is for recovery of money which the Plaintiffs allegedly lent, in foreign currency, that is, U. S. dollars and U.K. Sterling, to the defendant, Chief Harold Sodipo, or, in the alternative, the same amount in the same currency, had and received by the Defendant for the use of the Plaintiffs. Form 2 of the forms for civil claims under the High Court of Lagos (Civil Procedure) Rules was used in bringing the claim and Order 3, Rules 4 and 5 of the Rules are applicable.”

On 24th December, 1979, the Defendant duly entered appearance to the writ under Order 8, Rule 1 of the High Court of Lagos (Civil Procedure) Rules. The defendant, having thus entered appearance, filed; on 10th January 1980, a motion seeking for an order of the Court to dismiss the claim for want of prosecution or, in the alternative, for an order of the Court for security for costs. Counsel to the defendant had sworn to an affidavit, attached to the motion, maintaining that the writ which the Plaintiffs have filed, and which I have already reproduced above was not, in law, a specially endorsed writ.

Before the High Court, (Johnson, J. as he then was) ruled on the motion, the learned Judge expressed the following view: “The defendant filed a counter affidavit on the facts deposed to by one Adesuyi Olateru-Olagbeggi…Even though the affidavit showed in paragraph 5 that the respondent verily believes that the defendant has no defence to this action, no attempt whatsoever was made in all the paragraphs of the counter affidavit to put forward any defence to the action….”He then went on-

“The procedure adopted here no doubt is typical of one required in cases of summary judgment similar to the procedure laid down in Order 14 of the Rules of the Supreme Court 1965…..”

Then the learned Judge, and this he did suo motu, addressed his mind to the nature of the action, as it contains issues of foreign currency. He said- “I am aware that exchange of currency whether on friendly loan or business basis ought not to be made except with the approval of the Central Bank or by an authorised dealer. It appears clear here that the loan had been made on to the defendant in foreign currency and it is not apparent in the statement of claim endorsed on the writ or in the affidavit in support that such payments were made with the requisite approval. ”

He then referred to the authorities, and held-

“The court believes that the justice of this matter requires that the Exchange Control aspect of it be fully explained and would call on counsel for the parties to address it on that issue before a final decision is taken in the motion”

On 24th April, 1980, learned counsel addressed the trial Judge on those issues which he had raised suo moto, and on 13th May, 1980, he delivered his ruling. He made some interesting and pertinent pronouncements. He said, on the issue of his raising the matter of Illegality suo moto:

“I however disagree with him (learned counsel for the defendant) that the court has no duty to raise an issue of a possible illegality likely to vitiate a claim before it whether or not the parties raise it. It is sufficient if it is apparent or inherent in whatever little facts the parties are willing to make available to the court. ”

And on illegality itself he said

“Where therefore, the transaction between parties before a court is either apparently or inherently illegal, I do not see how a court of justice can reconcile the idea of justice with keeping mute over the issue and giving a judgment without examining or raising the issue of illegality, even suo motu.”

He then went on to resolve the issue saying- “There is however in this matter a saving grace for the plaintiffs. The Exchange Control Act confines itself to act by Nigerians in or outside Nigeria and provides the consequences for a breach of any of the provisions of the Act. In this case, it is the defendant that would appear to have contravened the provision of the Act by taking or accepting loan outside Nigeria in foreign currency.”

It seems clear to me therefore that the narrow bridge upon which the Plaintiffs have passed in the ruling of the learned trial Judge was his finding that the Exchange Control Act, in the words of the learned trial Judge, “confines itself to acts by Nigerians in or outside Nigeria and provides the consequences for a breach of any of the provisions of the Act.” The Defendants appealed to the Court of Appeal on two grounds and they are

(1) whether or not the endorsement to the writ filed by the Plaintiffs did amount to a Statement of Claim, as required by the Rules, in other words whether or not there is a defect, in law, in the writ, and

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(2) whether or not the Judge could raise such issues as have not been raised by the Parties.

The Court of Appeal, in a well considered judgment, as per Nnaemeka-Agu, J.C.A. dismissed the appeal.

On the Foreign Exchange aspect of the case, Nnaemeka-Agu, J.C.A. took the view that the Exchange Control Act 1962 is to guard against a breach of its provisions by any person earring on foreign exchange transactions in Nigeria or Nigerians carrying on such transactions anywhere in the world. As the Plaintiffs are a Finnish Company and there was nothing to show that the loan transaction took place in Nigeria, learned Justice of the Court of Appeal said he could not see how the Finnish Company could be affected. He then concluded on this point:

“The principle which emerges from a view of all the authorities cited before us is that when a contract is ex-facie illegal, whether illegality has been pleaded or not, the court (sic) ought not close its eyes against the illegality, as it is its duty to refuse to enforce such a transaction whether illegality has been pleaded or not. See Snell v. Unity Finance Limited (1964) 1 All E.R. 680 also N.W. Salt and Co. Ltd. v. Electrolytic Alkali Co. Ltd. (1914-15) All E.R. Rep. 752. But where, as in this case, there is no illegality exfacie, it ought to be pleaded and duly proved by evidence before it need be considered by the Judge. See George v. Dominion Flour Mills Ltd. (1963) 1 All N.L.R. 71 at p. 74.” The learned Justice of the Court of Appeal then dealt with the issue of the specially endorsed writ. He found that the affidavit sworn to by Miss Sofola, junior counsel in the chambers of the learned counsel to the Plaintiffs, was proper and the Statement of Claim filed with the writ of summons satisfied the requirements of the law. It is against this judgment that the Defendant, Harold Sodipo has finally appealed to this Court. The grounds of appeal filed are similar to those canvassed in the Court of Appeal and supporting the grounds is a very detailed brief by Mr Lardner, S.A.N., learned counsel for the Defendant, who hereinafter will be referred to in this judgment as the Appellant. An equally detailed brief has been filed by Mr Kehinde Sofola, S.A.N. learned counsel for the Respondents-the Finnish Plaintiffs/Company who are now the Respondents to this appeal in this Court. The two issues which were contested in the Court of Appeal have been equally lustily contested here and I will deal with both starting with the issue of specially endorsed writ.

Order 3, Rule 4 of the High Court of Lagos (Civil Procedure) Rules 1972 provides-

“41 In any action which in England may be assigned to the Chancery Division or the Queen’s Bench Division, other than an action which includes-

(a) a claim by the plaintiff for libel, slander, malicious prosecution, false imprisonment, seduction or breach of promise of marriage; or

(b) a claim by the plaintiff based on an allegation of fraud, the writ of summons may, at the option of the plaintiff, be specially endorsed with or accompanied by a statement of his claim.”

Order 10, Rule 1 of the same Rules provides

“1(a) Where the defendant appears to a writ of summons specially endorsed with or accompanied by a statement of claim under Order 3, Rule 4 the plaintiff may on affidavit made by himself or by any other person who can swear positively to the facts, verifying the cause of action and the amount claimed (if any liquidated sum is claimed), and stating that in his belief there is no defence to the action except as to the amount of damages claimed, if any, apply to a Judge in Chambers for liberty to enter judgment for such remedy or relief as upon the Statement of Claim the plaintiff may be entitled to. The Judge thereupon, unless the defendant shall satisfy him that he has a good defence to the action on the merits or shall disclose such facts as may be action generally, may make an order empowering the plaintiff to enter such judgment as may be just, having regard to the nature of the remedy or relief claimed.

(b) If on the hearing of any application under this rule it shall appear that any claim which could not have been specially endorsed under Order 3, Rule 4, has been included in the endorsement on the writ, the Judge may, if he shall think fit, forthwith amend the endorsement by striking out such claim, or may deal with the claim specially endorsed as if no other claim had been included in the endorsement, and allow the action to proceed as respects the residue of the claim. ”

One may seek to know the purpose of these rules. The rules are for the purpose of obtaining summary judgment without proceeding to trial. They are for disposing, with dispatch, of cases which are virtually uncontested. There are some preliminary requirements to the application of the rules. They are

(1) The defendant must not only have been served, he must also have entered appearance.

(2) A Statement of Claim must have been endorsed or attached to the writ served upon the defendant.

(3) There must be a definitive affidavit (which of course is evidence on oath) verifying the cause of action and the amount claimed and also that the defendant has no defence to the action.

(4) The defendant must not have filed a defence to the action.

An action in the undefended list, following these Rules, is not a real substitute to trial of actions, but it serves the purpose of reducing congestion in the courts, by way of creating an avenue for the speedy determination of actions. If a defendant is served with a writ and a statement of claim, and he enters an appearance to the action, having read the affidavit that he has no defence to the action, yet he files no defence, he cannot be seen to complain later that he has not had a fair trial.

I agree with and would readily adopt the submission of Mr Sofola that the defendant can oppose summarily judgment.

(a) on the ground that the case does not fall within the scope of the Rules (especially as the Rules except some actions), and also that there have been some procedural irregularities;

(b) on his filing a defence showing that there is an issue or question in dispute which ought to be tried.

The question as to the propriety of Miss Sofola swearing to the affidavit accompanying the writ has been raised. What the Rule requires where the Plaintiff himself has not sworn to the affidavit accompanying the endorsed writ is that the person who swears to the affidavit must be in a position to swear positively to the facts verifying the cause of action and must be able to state, in his belief, that the defendant has no defence to the action. When the person swearing the affidavit is not the plaintiff, he must show that he has the authority of the Plaintiff see Chirgwin v. Russell (1910) 27 T.L.R. (CA.) 21.

In this case, the affidavit of Olatokunbo Sofola, which is seven point, avers facts, which in my view could, by virtue of the fact of her position as junior counsel to plaintiffs’ counsel, be within her personal knowledge more especially as the Plaintiffs were an artificial person. She did not as junior counsel have to be present at the transaction of the loan to know that on the dates specified, loans in foreign currency to the tune of the amount stated had been made to the defendant. She swore positively, and this has not been controverted, that she has the authority of the Respondents herein to swear to the affidavit, see Chirgwin v. Russell (supra). I think the affidavit has sufficiently complied with the Rules in Coforpose Lagos v. Grunwaldt (1910) 1 K.B. 41 (CA.) with Symon & Co. v. Palmers Stores (1903) Ltd. (1912) 1 K.B. 259.

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In May v. Chidley (1984) 1 Q.B. 451, it was held that the affidavit needs not set out all the particulars, nor verify the facts except by reference to the Statement of Claim and this was what Miss Sofola did in paragraph 4 of her affidavit when she made reference to the particulars set out in the Statement of Claim endorsed with the writ.

Now, I have made reference to English authorities here but the Rule itself was based on an English Rule and it makes no secret of it in its content. I do feel however, that the time has come when Rules of court in this country should start to exist without necessary reference to or dependence upon English Rules. Such dependence does not help the wiping out of colonial mentality in the laws of the country. Our Civil Procedure Rules should, in reflecting the experiment made for so long with the English legal system, commence a voyage of its own, which is purely Nigerian and which could assimilate or shed off some of the cumbersome English procedure which is amended from time to time to suit purely, and rightly too, the English legal system.

The next question is whether the writ filed by the Respondents is in accordance with the Rules. There is no doubt that the Statement of Claim endorsed on the writ is a Statement of Claim. It is the province and the privilege of every plaintiff to formulate his Statement of Claim as he wishes. He rises and falls by it. That is his case. He should know it more than anyone else.

On this ground, therefore, I have no hesitation in agreeing with the submissions of the Respondents. And it is this that takes me to the second issue as to whether or not the cause of action shows prima facie illegality.

The point was raised suo motu by the learned trial Judge and he resolved it in favour of the Respondents. It seems to me that throughout this case, from the High Court to the briefs filed by both parties in this court, both sides to this dispute and both Courts through which the case has so far travelled before finding its way to the Supreme Court are agreed on the law as regards the attitude of the Courts, also both here and the United Kingdom, to the situation where a claim before the court savours of apparent illegality.

Candide Johnson, J. (as he then was) said-

“Where therefore, the transaction between parties before a court is either apparently or inherently illegal I do not see how a court of justice can reconcile the idea of justice with keeping mute over the issue and giving a judgment without examining or raising the issue of illegality even suo motu.”

I have already set out what Nnaemeka-Agu, J.C.A. said in the Court of Appeal as regards the principle which emerges from the authorities he had examined on the subject. It is that when a contract is ex-facie illegal, whether illegality has been pleaded or not the court would not close its eyes against that illegality, as it is the duty of every court to refuse such a transaction even where illegality has not been pleaded.

In his brief Mr Lardner, S.A.N. came out with the following proposition of law-

“it is respectfully submitted that the statement of Donaldson, J. (as he then was) in Belvoir Finance Co. Ltd. v. Harold G. Cole & Co. 1969 2 All E. R. 904 at 908 that ‘illegality, once brought to the attention of the Court, overrides all questions of pleadings’ represents the correct state of the law.

See also:

(i) dictum of Scrutiny, L.J. in Phillips v . Copping 1935 1 K.B. 15, C.A.-‘It is the duty of the Court when asked to give a judgment which is contrary to a statute to take the point, although the litigants may not take it.

(ii) The case of Royal Exchange Association Vega 19022 K.B. 384 which shows that where a statute makes a particular contract or class of contracts invalid, the Judge ought to refuse to entertain the action even though neither party has raised the objection.”

Mr Kehinde Sofola, S.A.N. referred to the case of North-Western Salt Co. Ltd v. Electrolytic Alkali Co. Ltd. (1914-15) All E.R. Reprint 752 and said

“In North-Western Salt Co. Ltd. v. Electrolytic Alkali Co. Ltd. (1914-15) All E.R. Reprint at Page 752, Lord Moulton said, inter alia, as follows:

‘If the contract and its setting be fully before the Court, it must pronounce on the legality of the transaction. But it may not do so if the contract be ex-facie illegal, and it has before it only a part of the setting, which it is not entitled to take as against the Plaintiff, as fairly representing the whole setting.’

The Supreme Court in the case of Francis Okagbue & 2 Ors. v. Janet Romaine (1982) 5 S. C. 133 at 156 has approved the decision in North-Western Salt Co. Ltd. case when it said-

‘A close examination of all or most of the various decisions of this Court on the subject clearly bears out the point made in the preceding paragraph. Dominion Flour Mills Ltd. was the case in which the decision re-stated the well-known principle of law that where a contract is not ex-facie illegal and the question of illegality depends on the surrounding circumstances, then as a general rule the Court will not entertain the question of its illegality unless it is raised in the pleadings; in such circumstances, evidence adduced in support of the unpleaded illegality clearly goes to no issue. The situation in the North-Western Salt Co. Ltd. case is to the same effect’ . ”

I respectfully agree with all these options. It is already trite that no court will be friendly with or countenance illegality. Indeed the law needs no restatement. What is important therefore is whether on the Statement of Claim endorsed to the writ in this case, there is prima facie illegality.

I have, at the beginning of this judgment, set out the writ and the endorsed Statement of Claim. The Statement of Claim states the sum claimed in two currencies foreign to this country. They are U.S. dollars and the Pound Sterling. Neither currency is a currency commonly used in this country. One needs no evidence thereupon because of the notoriety. The particulars of the loan allegedly made out to the appellant set out various dates and various sums six of which are in the U.S. dollars and one in Pound Sterling. The claim states the cause of action as “money payable by the Defendant to the Plaintiffs for money lent by the Plaintiffs to the Defendant”

In the alternative it was-

“money payable by the Defendant to the Plaintiffs for money had and received by the Defendant for the use of the Plaintiffs.”

Now, s. 3 of the Exchange Control Act 1962, that is the law that governs the operation of currency other than Nigerian currency, provides-

  1. (1) Except with the permission of the Minister, no person other than an authorised dealer, shall in Nigeria, and no person resident in Nigeria other than an authorised dealer, shall, outside Nigeria, buy or borrow any gold or foreign currency from or sell or lend any gold or foreign currency to any person other than an authorised dealer.

(2) Where a person buys or borrows any gold or foreign currency in Nigeria, or being a person resident in Nigeria, buys or borrows gold or foreign currency outside Nigeria, he shall comply with such conditions as to the use of which it may be put or the period for which it may be retained as may be notified by the Minister before, or at the time of, such purchase or borrowing, or at any time thereafter. ”

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The question is, looked at from the background of the Exchange Control Act 1962 does the statement of claim as it is drafted show any apparent illegality

Mr Lardner says it does. Mr Sofola says it does not. He in fact relied inter alia on the obiter dictum by my learned brother Aniagolu, J.S.C. in this case when the constitutional issue involved therein came before this court for determination.

In Sodipo v. Lemminkainem Oy (1985) 2 N.W.L.R. 547, the issue before the court was whether S.258 of the Constitution of the Federal Republic of Nigeria 1979 applied, in which case of its application, the ruling delivered by the High Court (Candide Johnson, J. as he then was) which went on appeal to the Court of Appeal and subsequently to this Court would be void. Aniagolu, J S.C. after fully determining the issue before the Court went on obiter and said, after a review of so many authorities, on “ex-facie illegality”

“Running through all these cases is the one common feature that exfacie or from the facts adduced in evidence of the transaction surrounding circumstances, the illegality of the transaction has become apparent. In such a case the trial Judge must act to enforce and protect the law of the land. But the illegality has to be apparent. The Judge is not to embark on an inquisitorial investigation where nothing illegal is apparent. ”

I respectfully agree with this statement of law by my brother Aniagolu, J.S.C. A Judge exists to determine disputes and to examine with due care and microscopic sense all matters before him in his pursuit of Justice. He is there not to trap any party or to set in motion what the parties have not brought before him. He is not the Grand Inquisitor envisaged by Dostoevsky in his Brothers Karamazov. He is a judge governed by rules. In Lim Poh Choo v. Camden and Islington Area Health Authority (1976) Q.B. 629 at p. 649 Lord Scarman gave an imaginative picture of the Judge. He said-

“The Judge, however wise, creative, and imaginative he may be, is ‘cabin’d, cribb’d, confin’d, bound in’ not, as was Macbeth, to his ‘saucy doubts and fears’ but by the evidence and arguments of the litigants. Lord Scarman may be a bit narrow in the strait compass he has put the Judge, and I fear I may not go that far with him but the Judge though he must have some room to manouvre, once it is in the interest of justice, is certainly not to create an image of a go-getter, a free for all fighter.

Now, to the Exchange Control Act, S.3 of the Act certainly makes the law applicable to Nigerians and non Nigerians in Nigeria. And in this I will accept the reasoning of Nnaemeka-Agu, J.C.A. who said “The essence of the Exchange Control Act of 1962 is to guard against a breach of its provisions by persons carrying on foreign exchange transaction in Nigeria.”

I cannot accept the dictum of Candide Johnson, J. (as he then was) when he said

“The Exchange Control Act confines itself to acts by Nigerians in or outside Nigeria.”

It, with respect, does not, when the non Nigerian is in Nigeria, the Act is equally applicable to him.

If the Appellant and the Respondents transacted the loan agreement that has led to this litigation in Nigeria, then it would be illegal, except the Exchange Control Act has been complied with. There is nothing in the statement of claim to say it has been so complied with. So on the face of the statement of claim as it stands, there seems to be possibility and probability of illegality.

The Exchange Control Act applies to Nigerians outside Nigeria. If the Appellant took the loan outside Nigeria the Act would apply to him while the lender, if there is no approval by the Minister would be aiding illegality. Except the Act has been complied with therefore the statement of claim as it stands, on the face of it savours of illegality. I find it difficult to accept the fine distinction made by the Court of Appeal that it is only the Appellant who is a Nigerian that might have been affected. What one is concerned with at this stage is apparent illegality. “Ex-turpi causa oritur non actio” is as valid a dictum now as it was in Roman Law.

Aniagolu, J.S.C. said in Sodipo v. Lemminkainen Oy (supra) after enunciating a correct statement of the law

“I do not think that the circumstances of this case before the learned trial Judge, satisfied his raising suo motu the issue of illegality under the Exchange Control Act.”

This of course was said obiter and with much respect to my learned brother, I cannot accept it. We are still in the incohate stage. The case may end with no issue of illegality proved. It is a case as to whether or not to allow summary judgment where one smells illegality. It may, after investigation, be an unjustified fear.

In that same case, that is the Sodipo case (supra) Obaseki, J.S.c. (obiter) had said

“In the instant appeal, the issue raised by the learned judge is a genuine pendent one…”

I agree. And also agree when Aniagolu, J.S.C. (ibid) said earlier

“A contract may be against public policy either from the nature of the acts to be performed or from the nature of the consideration”.

It may be that in the final analysis the parties will not raise the issue of the Exchange Control Act: If the Court smells illegality, then let the Court know whether this is a matter which involves Exchange Control Act or not.

For these reasons I will allow the appeal, set aside the judgment of the High Court given on 13th May 1980 by Candide Johnson, J. (as he then was) and his award of Costs. I also hereby set aside the judgment of the Court of Appeal dated 17th September 1982 including its award of Costs. I hereby order a retrial of the case before another Judge of the High Court of Lagos who shall proceed to order pleadings in the case.

The Respondents shall pay Costs of N300.00 to Appellant. They shall also pay the sum of N200 as Costs in the Court of Appeal.

NNAMANI, J.S.C.-I had a preview of the judgment just delivered in this matter by my learned brother Eso, J.S.C. and I entirely agree with his reasoning and conclusions.

The issues discussed therein cannot bear repetition. The attitude of the Courts to the issue of apparent, or ex-facie illegality is certainly well settled (See Gedge v. Royal Exchange Assurance Corporation (1900) 2 Q.B. 214 at 220; Okagbue and Ors. v. Romaine(1982)5 S.C. 133; Nasr v. Berini (Betrutriyad) (Nigeria) Bank Ltd. (1968) 1 All N.LR. 274). In the instant case I think that a perusal of the statement of claim does indicate that there may well be illegality particularly having regard to the provisions of Section 3(1) and (2) on the Exchange Control Act 1962.

I would, therefore, also allow the appeal. I endorse all the orders in the judgment of my learned brother, Eso, J.S.C.

UWAIS, J.S.C.-I have read in draft the judgment read by my learned brother Kayode Eso, J.S.C. I entirely agree with the reasoning and conclusions therein. I too will therefore allow the appeal N300.00 and N200.00 costs to the appellant. I also endorse the other orders contained in the said judgment.


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