Dala Local Government V. Access Bank PLC & Anor (2016)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

ISAIAH OLUFEMI?AKEJU, J.C.A. (Delivering the Leading Judgment)

This appeal is against the decision of the High Court of Kano State holden at Kano delivered on 9th June, 2011 in suit No. K/593/2010 wherein the 1st Respondent herein then as Intercontinental Bank Plc and as plaintiff claimed against the appellant and the 2nd Respondent herein as defendants, jointly and severally the sum of N7,703,479.37 (Seven Million, Seven Hundred and Three Thousand, Four Hundred and Seventy Nine Naira, Thirty Seven Kobo) and interest at 22.50% per annum from 12th October, 2011 till judgment and 10% interest from the date of judgment until the debt is liquidated as well as the costs of the action.

?The action was brought under the undefended list, and was commenced by the motion exparte dated 22nd November 2010 for leave to mark and place the writ of Summons under the undefended list. As disclosed in the affidavit in support of the motion exparte deposed to by one Musa Adamu, the litigation clerk in the chambers of Messrs Saka Abubakar & Co, Counsel to the Plaintiff, the 1st Defendant, Maikudi Abba Kofar Kudu applied to the plaintiff, on 10/12/2007

for a loan facility of N4,850,000.00 (Four Million, Eight Hundred and Fifty Thousand Naira) to enable him supply sixty units of motorcycles to Medical and Health Workers Union of Nigeria, Dala Local Government which loan was approved by the plaintiff now 1st Respondent vide her offer letter dated 28th December, 2007 which the 1st defendant now 2nd Respondent accepted. The Medical and Health Workers Union of Nigeria, Dala Local Government Branch was to pay for the supply of the Motorcycles by monthly installment from deductions made from members’ salary, while the 2nd defendant, Dala Local Government guaranteed the deduction of the money from salary and payment into account No.116182776 with Unity Bank with effect from November, 2007 to March 2009.

?It was further deposed that the 1st defendant utilized the loan granted to him and supplied the 60 units of motorcycles to the Medical and Health Workers Union of Dala Local Government Branch, but the Local Government remitted only an amount of N1,372,074.00 (One Million Three Hundred and Seventy Two Thousand Seventy Four Naira Only) into Account No.116182776 and stopped further remittance as a result of which

the 1st defendant’s account with the plaintiff rose to the sum of N7,703,479.37 deficit with accrued interest as at 11th October, 2010 which has not been paid despite several letters of demand by the bank.

It was the belief of the deponent that the defendants had no defence to the action.

The same affidavit was also filed with the writ of Summons to which documents marked as Exhibits A, B, C, D, E, F and G were attached.

Upon service of the writ on the defendants, after the High Court of Kano State had granted the application for placing same for hearing under the Undefended List pursuant to Orders 8, 23 (1) and 27 of Kano State High Court (Civil Procedure) Rules, 1988, and marking the writ as such, the 2nd defendant Dala Local Government now appellant, sought and obtained the leave of Court to file and serve her Notice of intention to defend and affidavit of Defence out of time while the Notice of Intention to Defend and affidavit showing defence dated 3rd January, 2011 and 4th January, 2011 respectively were deemed properly filed, while the case was adjourned to 30th March, 2011 for Ruling. That was the Ruling of the Court on page 8 of the

Record of Appeal. The Notice of Intention to defend dated 3rd January, 2011 but filed on 4th January, 2011 with the supporting affidavit are on page 70 and pages 71 – 73 of the record of appeal. The affidavit was filed with Exhibit DLG.1.

?In the Affidavit in support of the Notice of Intention to Defend deposed to by one Rita Rowland Ovoke, the litigation Secretary in the law firm of Messrs Mamman Lawan & Co, Counsel to the 2nd defendant, it was stated that the 1st defendant who was granted the loan secured the same by submitting the Certificate of occupancy of his house as collateral while transaction that led to the grant of the loan was done without the 2nd defendant who did not guarantee the loan to the 1st defendant. It was further deposed that the agreement for the supply of motorcycles was between the plaintiff and the Union of Medical and Health Workers of Nigeria, Dala Local Government Branch Kano and it was the Union that provided corporate guarantee for the supply of the motorcycles to the members and not the Local Government; that the 2nd defendant was only required to remit certain deductions from the salary of the affected Staff to an

account owned by the union, which was done by remitting the agreed monthly installment to the Union’s account in the sum of N1,372,074 as four monthly installment after which the 1st defendant and the Union requested that the agreed monthly installment be paid directly to the 1st defendant and not to the account.

The 2nd defendant then obliged and paid all respective monthly installments to the 1st defendant on payment vouchers, which vouchers got burnt later and efforts to procure copies from 1st defendant was to no avail.

In his judgment aforesaid, the learned trial judge found and held that the affidavit accompanying the Notice of Intention to defend filed by the 2nd defendant on 4th January, 2011 did not disclose any defence on the merit to warrant the transfer of the suit for hearing under the general cause List. He therefore granted the reliefs sought by the plaintiff as in the Writ of Summons.