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Dala Air Services Limited V. Sudan Airways Limited (2004)

LawGlobal-Hub Lead Judgment Report

JEGA, J.C.A.

This is an appeal against the judgment of the Kano State High Court of Justice sitting at Kano in suit No.K/57/2001 delivered on the 13th day of June, 2001 by Haliru, J. The facts of this case as can be gathered from the record of proceedings are as follows:-

The respondent commenced this action under the undefended list procedure against the appellant. The respondent claim before the lower court as endorsed on the writ of summons are as follows:

“1. The sum of N14,931,900.00 (fourteen million, nine hundred and thirty one thousand, nine hundred naira) being the unremittted sales proceeds of the plaintiff’s air tickets entrusted to the defendants.

2. The court rate interest of 10% per annum on the judgment sum from the day of judgment until full and final liquidation of the same.
3. The cost of filing and prosecuting this action as well as legal costs.”

Before the matter went to court, the plaintiff in the lower court who is an airline maintained a contractual relationship with the defendant by way of commission agent whereby the plaintiff who is the respondent in this appeal would entrust several of its air tickets to the defendant who is the appellant in this appeal to sell and remit the sales proceeds to the plaintiff for a commission and this has continued for several years. The appellant would always make good the said sale proceeds through cheques some of which were returned unpaid and were represented at the instance of the appellant but were still not honored, hence the accumulated indebtedness that gave rise to the action before the lower court. When the respondent counsel sent a demand notice to the appellant, several meetings were held between the parties sequel to which the appellant had pleaded for time to make good its indebtedness and proceed to issue three cheques in part settlement thereof in the sum of N2,000,000.00 thus totaling N6,000,000.00 with a pledge to settle the balance after a purported Hajj contract between the appellant and the Federal Government of Nigeria. Out of the said three cheques issued to the appellant’s counsel by the respondent, only one went through while the other two were returned unpaid, thus prompting the plaintiff to go to court and after the service of writ on the appellant, it issued to the respondent’s counsel yet another cheque in the sum of N2,000,000.00 which was returned unpaid again.

In answer to the respondent’s claim, the appellant filed a notice of intention to defend with several affidavits and even after the matter had been duly heard on the undefended list and same reserved for judgment the appellant filed in a motion to arrest the judgment and was accordingly indulged by the trial court and allowed to re-open its argument. In all the correspondence between the parties and even in all the affidavits filed by the appellant before the lower court, the appellant never outright denied its indebtedness to the respondent but had merely alleged that the plaintiff was indebted to it in respect of a charter agreement as well as some refunds expected by it from the respondent in respect of some unused air tickets, thus indicating an intention to counter-claim against the respondent. All the allegations of indebtedness alleged against the respondent by the appellant were promptly and vehemently denied by the respondent and in all the affidavits filed by the appellant, not even a single document/exhibit was exhibited to buttress the allegation of indebtedness against the respondent. It was apparent that the appellant merely fabricated all those allegations with intention to buying time by trying to create triable issues between the parties with the hope of frustrating the respondent’s claim, at least on the undefended list.

By his judgment delivered on 13th June, 2001, the learned trial Judge entered judgment in favour of the respondent in the sum of N12,331,900.00 (twelve million, three hundred and thirty one thousand, nine hundred naira). The appellant being dissatisfied with the judgment of the trial High Court appealed to this Honorable Court on five grounds of appeal.

We took the appeal on 18th May, 2004, the learned counsel to the appellant adopted and rely on his brief of argument filed on the 19th September, 2001 and urged us to allow the appeal. The respondent’s counsel was not in court and his brief of argument filed on the 17th January, 2003 was deemed adopted.

This appeal is predicated upon five grounds of appeal and from the five grounds of appeal, learned counsel to the appellant formulated two issues for determination. The two issues are as follows:

“1. Whether or not the appellant’s affidavit in support of the notice of intention to defend the suit disclosed sufficient facts which entitled the defendant to interrogate or cross examine his witnesses?.

2. Whether or not the trial Judge properly evaluated the affidavit evidence before him?.”

Learned counsel for the respondent formulated four issues for determination which reads thus:

“1. Whether or not in an action brought under the undefended list procedure as provided for under Order 23 of the Kano State High Court Civil Procedure Rules, 1988, an alleged counter-claim by the defendant amount to a defence on the merit?

2. Whether or not, a mere and general declaration that there is/was a need to reconcile the accounts between the appellant and the respondent before the lower court amounted to a triable issue or a defence on the merit to warrant the transfer of a matter from the undefended list to the general cause list?
3. Whether or not the defendant’s affidavit before the lower court disclosed sufficient facts, which entitled the defendant to interrogate or cross-examine the plaintiff’s witnesses?
4. Whether or not the learned trial Judge properly evaluated the affidavit evidence placed before him?.”

From the facts and circumstances of this appeal, issues 1 and 2 formulated by the appellant can effectively determine the appeal, accordingly issues 1 and 2 formulated by the appellant would serve in the treatment of this appeal.

Issue No.1: whether or not the appellant’s affidavit in support of the notice of intention to defend the suit disclosed sufficient facts which entitled the defendant to interrogate or cross-examine his witnesses. Learned counsel to the appellant in his submissions as contained in his brief of argument referred to Order 23 rule 3(1) of the Kano State High Court (Civil Procedure) Rules, 1988 which states thus:

“If the party served with this writ of summons and (f) affidavit delivers to the registrar a notice in writing that he intends to defend the suit together with an affidavit disclosing a defence on the merit, the court may give him leave to defend upon such terms as the court may think just.”

Counsel submits that the phrase ‘defence on the merits’ has been explained in a number of cases including FMG v. Sani (1990) 4 NWLR (Pt. 147) 688; Mohammed v. Allied Bank (1996) 7 MAC 205.

That in determining whether the appellant has disclosed a defence on the merit reference shall be made to the affidavit in support of the writ of summons and the affidavit in support of the notice of intention to defend. Learned counsel contends that the claim of the respondent as shown on the writ of summons and supported by the affidavit in support is based on the sale of air tickets on credit to the defendant whose cheques for the tickets were dishonored on presentation. Learned counsel referred to paragraphs 3 – 4 of the affidavit in support of the notice of intention to defend which are reproduced hereunder:

“(3c) That the defendant entered into a charter agreement dated 18th December, 1998, with the plaintiff for the purpose of purchasing charter air tickets and providing an air craft, Airbus 300/600 capacity of 270 seats passengers for Kano/Jeddah/Kano Umrah 1998. A photocopy of the said agreement is shown to me and attached herewith as exhibit A.

(d) That the defendant paid the sum of USD 190,000 (one hundred and ninety thousand US dollars) to the plaintiff in advance before the aircraft was stationed in Kano Airport.

(e) That the plaintiff breach the agreement of 18/2/1998 by refusing to airlift the 1998 Umrah passenger back to Nigeria, which resulted in the defendant incurring a big financial loss by chartering another aircraft in the sum of USD 200,000.00 (two hundred thousand US dollars).

(f) That in the course of TATA Airline/or and TATA agent relationship the defendant deposited a number of cheques with the plaintiff’s company with a clear instruction that the cheques could only be presented to our bankers at the conclusion of the airlift.

(g) That the plaintiff in bad faith presented our cheques to their bankers without even (sic) after breaching the charter agreement with the resultant loss by the defendant.

(h) That our solicitors Al-Aman Attorneys has (sic) written to the principal partner, J. K. Bature Co. Solicitors to the plaintiff requesting that the plaintiff company should meet to reconcile accounts but the plaintiff refused to arrange for a meeting. A photocopy of the said letter is shown to me and attached herewith as exhibit B.

(i) That further the plaintiff through its Regional Manager entered into an agreement with the defendant, whereby the defendant Aircraft airlifted a number of (sic) passenger on (sic) route Jeddah-Kano, on agreed fee of N40,000.00 (forty thousand naira only) per passenger.

(j) That the total amount due to the defendant on this transaction is N1,880,000.00 (One million, eight hundred and eighty naira only). The plaintiff has refused to pay the defendant despite several repeated demands.

(k) That the Regional Manager and his financial controller sometime in 1999 came to the office of the defendant and forcefully retrieved 184 air tickets made up of 84 unused tickets valued at N2,940,000 and 100 partly used tickets valued at N1,800.00. A photocopy of the said letter is attached herewith and marked as exhibits (b) 1 and 2.

(l) The defendant at the request of the plaintiff secured and paid N600,000.00 for the official residence of the plaintiff’s financial controller on the understanding that the plaintiff would refund this amount to the defendant. A copy of the receipt of payment is herewith attached and marked as exhibit C.

(m) That even though the plaintiff has been in occupation of the said house, the plaintiff has refused or neglected to pay the defendant.

(n) That because of the past cordial business relationship between the plaintiff and the defendant the defendant paid to the plaintiff the sum of N2,000,000.00 through the firm of J.K. Bature & Co., with the clear understanding that the payment was a demonstration of good faith pending when parties could reconcile the various states of indebtedness between them.

(4) That the defendant intends to counter-claim in this action for the sum of N16,000,000.00 (sixteen million naira only) which the plaintiff are obliged to pay.”

Learned counsel for the appellant argues that the appellant’s affidavit in support of the notice of intention to defend raises the following triable issues:

1. The issue as to whether or not there was a charter agreement between the parties involving the sum of $190,000.00 which was breach by the respondent.
2. If the answer to one above is in affirmative, whether the appellant sustained a loss of $200,000.00.
3. The issue as to whether the appellant agreed with the respondent that cheques issued in advance were not to be presented until all passengers were airlifted.
4. The issue as to whether the appellant air-lifted 47 passengers from Jeddah to Kano N40,000.00 per passenger without being paid.
5. The issue as to whether the respondent agent forcefully retrieved 184 air tickets from the appellant.

It is submitted on behalf of the appellant that the facts alleged by the appellant are of such a nature as to entitle the appellant to interrogate the respondent or cross-examine his witness, that the respondent limited his relationship with the appellant to the sale of tickets on credit to the appellant. Whereas, the appellant in his affidavit in support of the notice of intention to defend shows a relation that is much wider and involving much more financial transaction and a complicated arrangement. That if the facts alleged by the appellant in his affidavit are true, then it will constitute a good defence to the claim of the respondent, reference made to UNN v. Orazulike Trading Co. Ltd. (1989) 5 NWLR (Pt.119) 19. Counsel urged us to resolve the issue in favour of the appellant.

In his reply, learned counsel to the respondent referred to Order 23 rule 3(1) of the Kano State High Court (Civil Procedure) Rules, 1988 and the case of Morecab Finance Ltd. v. Okoli (2001) 12 NWLR (Pt.727) 400, (2001) FWLR (Pt. 60) 1597 and submits merely raising triable issues between the parties by the defendant in the affidavit in support of the notice of intention to defend is not enough such issues must be raised in good faith.

That a meticulous examination of the record of proceedings of the lower court would reveal that all along, the appellant herein never raised any of those issues such as breach of charter agreement, non – refund of tickets, the issue of paying for residential accommodation for the respondent until the respondent took the appellant to court otherwise, the appellant prior to and even after the commencement of the suit at the lower court issued cheques in settlement of its indebtedness to the respondent out of which only one in the sum of N2,000.00 was honoured. Learned counsel to respondent argued that the question to be asked is, where were all those issues, defence and counter-claims when the appellant made efforts to pay the debt through those cheques, or better still, had those cheques been all honored and debt fully settled, would the defendant have raised all these issues, that from the totality of the averments contained in the appellant’s affidavit as well as the appellant’s conduct and actions both before the commencement of and during the pendency of the suit before the lower court, the appellant has not been sincere and honest and there is no good faith whatsoever. Further, counsel submits that most of the issues raised by the appellant before the lower court pertained to alleged counter-claims arising from other transactions allegedly between the parties which did not and still do not answer the questions of failure of the appellant to remit the sale proceeds of the air tickets entrusted to it on credit by the respondent which is the subject-matter of the respondent’s suit before the lower court. Learned counsel contends that none of the averments filed by the appellant before the lower court disclosed any defence on the merit and or raised any issue for determination between the parties to warrant the matter being transferred to the general cause list. Reference made to Nya v. Edem (2001) FWLR (Pt. 57) 852; Ataguba & Company v. Gura (Nig.) Ltd. (2000) FWLR (Pt. 24) 1522. Counsel urged us to resolve the issue in favour of the respondent.

Issue No.1 under consideration is whether or not the appellant’s affidavit in support of the notice of intention to defend the suit disclosed sufficient facts which entitled the defendant to interrogate or cross-examine his witnesses. The respondent’s claim before the lower court is as stated thus:

1. The sum of N14,931,900.00 (fourteen million, nine hundred and thirty one thousand, nine hundred naira) being the unremitted sales proceeds of the plaintiff’s air ticket entrusted to the defendant.
2. The court rate interest of 10% per annum on the judgment sum from the date of judgment until full and final liquidation of same.
3. The cost of filing and prosecuting the action as well as legal costs.

In response to the respondent’s claim, the appellant had filed a notice of intention to defend supported by a five paragraphs affidavit.

The five paragraphs affidavit revealed the following:

1. The issue as to whether or not there was charter agreement between the parties involving the sum of $190,000.00 which was breached by the respondent.
2. If the answer to the one above is in the affirmative whether the appellant sustained a loss of $200,000.00.
3. The issue as to whether the appellant agreed with the respondent that cheques issued in advance were not to be presented until the passengers had being airlifted.
4. The issue as to whether the appellant airlifted 47 passengers of the respondent from Jeddah to Kano at N40,000.00 per passenger without being paid.
5. The issue as to whether the respondent’s agents forcefully retrieved 184 air tickets from the appellant.

For the appellant to have the action transferred from the undefended list to the general cause list, his affidavit must disclose or raise in the affidavit supporting the notice of intention to defend a defence on the merit, Order 23 rule 3(1) of the Kano State High Court (Civil Procedure) Rules, 1988 states as follows:

“3(1) If the defendant served with the writ of summons and affidavit delivers to the registrar’s office a notice in writing that he intends to defend the suit together with an affidavit disclosing a defence on the merit, the court may give him leave to defend upon such terms as the court may think just.”

The operative words in the provisions set out are “a defence on the merit” and this have been construed by the Supreme Court in the case of The Federal Military Government of Nigeria & Ors. v. Abache Mallam Sani (1990) 4 NWLR (Pt. 147) 688 at 699 per Uwais, J.S.C. (as he then was):

“What is required is simply to look at the facts deposed to in the counter-affidavit or indeed the facts as averred in the statement of defence, where applicable and see if they can prima facie afford a defence to the action. In that regard, a complete defence need not be shown. It will suffice if the defence set up shows that there is a triable issue or question or that for some other reason there ought to be a trial.”

It is obvious from the passage set out from the judgment of the Supreme Court, the affidavit filed by the respondent in support of his notice of intention to defend must disclose a defence that is showing that there is a triable issue. The triable issue contemplated should not be speculative but must relate to the defendant’s defence. Defence in my humble view, are facts which, if established would defeat the claim of the plaintiff. The affidavit in support of the notice of intention to defend should set up a defence against the plaintiff’s claim and not to raise up a fresh suit or an entirely different cause or causes of action against the plaintiff.

In the instant appeal, when the affidavit filed by the appellant is compared with the claims endorsed on the writ of summons, it is glaring that what the appellant sought to do was to express an intention to counter-claim against the respondent. The main focus of Order 23 rule 3, sub-rule 1 of the Kano State (Civil Procedure) Rules, 1988 is the presentation by the defendant of a real defence on the merit to the plaintiff’s action/claim as contained in the plaintiff’s writ of summons and not to seek to raise other claims quite unrelated to the plaintiff’s claim by way of counter-claim as in the case with all the averments contained in the affidavit filed by the appellant before the lower court as such would be an entirely new cause of action which ought to and should be entertained separately quite regardless of what happens to the plaintiff’s claim because a counter claim is a separate independent and distinct action. In Jeric (Nig.) Ltd. v. Union Bank of Nigeria Plc. (2000) 15 NWLR (Pt. 691) 447, (2000) 12 SCNJ the Supreme Court held thus:

“It is trite law, that for all intents and purposes, a counterclaim is a separate, independent and distinct action and the counter-claimant, like all other plaintiffs in an action must prove his claim against the person counter-claimed against before obtaining judgment on the counter-claim.”

For the appellant to succeed in having the suit transferred from the undefended list to the general cause list under Order 23 rule 3(1) of the Kano State High Court (Civil Procedure) Rules, 1988 it is imperative on him to present a defence on the merit to the respondent’s claim and not to set up other claims which are quite unrelated to the claims of the respondent.

In the instant appeal, the affidavit in support of the notice of intention to defend did not disclose facts constituting a defence to the respondent’s claim as to entitle the claim being transferred to the general cause list. Therefore, the learned trial Judge was right to have refused the appellant leave to defend the suit and entered judgment for the respondent. It is crystal clear that all the issues canvassed by the appellant in his affidavit before the court do not touch directly on the respondent’s claim and therefore could be redressed distinctly and separately and not necessary by way of counter-claim to the respondent’s claim. It is very apparent in the instant appeal that all the allegations of indebtedness alleged by the appellant against the respondent are merely fabricated with a view to buying time by trying to create triable issues between the parties with the hope of frustrating the respondent’s claim at least on the undefended list. The issuing of cheques by the appellant to liquidate the indebtedness is nothing but admission of the claim. It is pertinent to point out the object of the undefended list procedure is to enable a plaintiff whose claim is unarguable in law, when the facts are undisputed to obtain judgment expeditiously instead of allowing a defendant who has no real defence to the action to, for mere purpose of delay, frustrate the plaintiff’s claim – See Nya v. Edem (2001) FWLR (Pt. 57) 852; Ataguba & Company v. Gura (Nig.) Ltd. (2000) FWLR (Pt. 24) 1522.

In the light of the above, since in this judgment I have earlier on stated that the affidavit in support of notice of intention to defend ‘did not disclose a defence on the merit as required by the provisions of Order 23 rule 3(1) of the Kano State High Court (Civil Procedure) Rules 1988, issue No.1 is resolved against the appellant in favour of the respondent.

Issue No.2 – whether or not the trial Judge properly evaluated the affidavit evidence before him. This issue involve the evaluation of evidence placed before the trial court, which in essence is concerned with proper evaluation of evidence before the trial Judge. In proceedings under the undefended list, the evaluation of evidence is clearly premature. The issue at stake at this stage is for the trial Judge to examine the affidavit in support of the notice of intention to defend and if he is satisfied that a triable issue or question is raised, then the appellant could be given leave to defend. The question at this stage is whether the appellant raised a substantial question or defence which prima facie ought to go on trial. Therefore, the issue that whether the defence is proved or not can only arise where the trial Judge has given the defendant leave to defend so that proof is an issue for determination after the hearing of evidence and at the time of evaluating the totality of the evidence adduced by the defendant. See Federal Military Government of Nigeria & Ors. v. Abache Malam Sani (1990) 4 NWLR (Pt. 147) 688 at 699; and Saw v. Makim (1889) TLR 72. Consequently, the issue dealing with the learned trial Judge properly evaluating evidence before him is irrelevant.

In the result, this appeal is totally unmeritorious and ought to be dismissed, accordingly the appeal is hereby dismissed. I affirmed the judgment of the learned trial Judge Haliru, J. delivered on the 13/6/2001 in suit No.K/57/2001 with costs assessed at N6,000.00 in favour of the respondent against the appellant.

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Other Citations: (2004)LCN/1635(CA)