Echaka Cattle Ranch Ltd. V. Nigerian Agricultural And Cooperative Bank Limited (1998)
LAWGLOBAL HUB Lead Judgment Report
MOHAMMED, J.S.C.
On 19th April, 1982, Nigerian Agricultural and Cooperative Bank, the respondent in this appeal, granted a loan of N2,000,000,00 (Two million naira) to the plaintiff under certain terms and conditions signed by both parties to the agreement. On 23rd July. 1988, the respondent caused to be published in Nigerian Chronicle Newspaper it’s intention to sell plaintiff’s property held as security for the loan.
In order to stall the sale of it’s properties by public auction, the appellant went to Ogoja High Court and claimed for the following reliefs:
i. A declaration that the threatened sale or other alienation of the plaintiff’s properties by the defendant or its agents will violate the plaintiffs rights under the agreement and be null and void.
ii. An injunction restraining the defendant by itself and or its agents or servants from selling or alienating the plaintiff’s properties as the loan is not yet mature for payment.
iii. N5,000,000 damages suffered by the plaintiff as a result of the false impression created by the malicious publication.”
The suit was first handled by Binang J. who granted an exparte interim injunction and restrained the respondent from disposing of the secured properties of the appellant by public auction pending the determination of the suit.
During the exchange of pleadings the respondent averred in the Statement of Defence that at the time of the institution of this suit in the High Court the appellant’s indebtedness to the respondent stood at N3,644,789.70 (Three million, six hundred and forty-four thousand, seven hundred and eighty-nine naira, seventy kobo). Therefore, the respondent made a counter-claim against the appellant in the following averments:
- The defendant hereby counter-claims against the plaintiff for the sum of N3,644,789.70 (Three million, six hundred and forty-four thousand, seven hundred and eighty-nine naira, seventy kobo) being the total sum owing by the plaintiff to the defendant as at 30/9/89, made up of the principal loan and interest thereon.
- Wherefore and in further answer to the Statement of Claim, the defendant will at the trial set up and rely on all legal and equitable defences open and available to it and it will in particular urge the Court to:-
(a) Dismiss all the arms of the plaintiff’s Claim as being untenable in law, misconceived, frivolous and an adventure at unjust enrichment and a gold digging exercise.
(b) Enter judgment for the plaintiff (sic) defendant in terms of its counter claim and furthermore.
(c) The defendant will urge the Court in limine, to discharge the Order of Court dated the 2/9/88 made exparte for interim injunction against the defendant till the determination of the suit, the same being bad in law.”
The suit suffered several adjournments. On 12th December, 1990, Mbanefo J. adjourned the matter to the 18th and 19th February, 1991 for hearing. On that day appellant’s counsel sought for leave to withdraw from the case on the ground that his BRIEF had not been “perfected”. The secretary of the appellant admitted that they received a letter, from the counsel four days before the hearing reminding the company about problems of his assignment. The court however refused to grant appellants’ counsel leave to withdraw from the suit and adjourned it to the following day.
On the following day appellant’s counsel did not show up, but the Managing Director. Chief Morphy did. He prayed the court to grant him a long adjournment so that he could settle with the bank. The court recorded that it had adjourned the case to 14th, 15th and 16th May, 1991 for report of settlement or definite hearing.
On 14th May, 1991, a lawyer. Mr. E.E.E.Ita. announced himself representing the appellant. He said that he was a new counsel in the case and would like a further adjournment of the matter so as to effect a settlement with the bank. Respondent’s counsel opposed the application and told the court that during the three months period that the case had been adjourned the Managing Director of the appellant did not make any written or personal contact with the Head Office of the bank in Kaduna over the settlement. The court nevertheless adjourned the case to 16th May. 1991, for the appellant to submit proposals for settlement of it’s indebtedness to the bank or have the case dismissed.
On 16th May, 1991. Chief Morphy appeared without his new lawyer. He said his counsel was in Enugu Court of Appeal. The court asked Chief Morphy if it was true that the proposal he submitted to the respondent was for payment of N50,000.00 within two months of writing his proposal for settlement and re-scheduling of the loan for 20 years. Mr. Morphy told the court that he would like to speak through his counsel. At the end of the frustrating encounter the learned trial Judge wrote the following ruling:
“It gives me a feeling that the Chairman of the plaintiff Company filed his claim of 1st September, 1988 in bad faith and so is his plea for settlement. He seems in my view to treat the Order of the court with extreme levity which must be deprecated in the strongest terms. It seems after taking the Bank for a ride upon being given a loan of N2,000.000.00 about 19th April, 1982 the Chairman of the plaintiff is set to do the same with proceedings before the court otherwise how could the Chairman who has promised to pay N750,000 about 13th February. 1988 and defaulted and was faced with a fore-closure proceedings run into court for a claim of N5.000,000.00 damages suffered by the plaintiff as a result of the false impression created by the malicious publication” (notice of fore-closure) sit in his office on a date the matter was adjourned for 3 days for definite hearing or settlement and offer N50,000 by 2 months from date (sic) and rescheduling of the loan for 20 years. The Court cannot be used to perpetuate this type of impropriety against anyone much less the defendant Company which is set up for the good of the Community. The handling of this matter by plaintiff and its Chief leaves a lot to be desired and impresses me that the plaintiff has no intention of prosecuting his claim nor an intention to meet its indebtedness and that the court is being used to sustain the smoke-screen of this impropriety.
The claim of the plaintiff is hereby dismissed. The interlocutory Order of 2nd September, 1988 restraining the defendant/respondent by itself, its agent or servant in person or E.O. Ubokulo, Esq, or any other person from carrying out the sale of the plaintiff/appellant properties under the agreement between the plaintiff/applicant and the defendant/respondent as advertised of 23rd July. 1988, pending the determination of the substantive Suit is hereby vacated. Court: Counter claim adjourned to 1st July. 1991 for hearing.”
Dissatisfied with the ruling, the appellant filed his appeal before the Court of Appeal, Enugu Division. In a considered judgment, Umaru Abdullahi, JCA, with whom Akintan, JCA, agreed, dismissed the appeal. Uwaifo, JCA, dissented, saying that under Order 41, rule 2 of the High Court Rules of Cross River State, the learned trial Judge had power to strike out the action but not to dismiss it. The appellant appealed to this court against the majority judgment. There is only one ground of appeal filed and it reads:
“The majority of the Justices of the Court of Appeal erred in law when they held that in dismissing the action:-
“…… the lower court had exercised its discretion judicially and judiciously having regard to the attitude exhibited by the appellant in the handling of his claim.”
The single issue formulated from the ground of appeal is whether the Court of Appeal was right in holding that the learned trial Judge had power to dismiss the action and had exercised it’s discretion in so doing judicially and judiciously. The respondent’s counsel, Mr. lB. Daudu, SAN, raised two issues on the single ground of appeal. The issues read:
“1. Whether having regard to the facts and circumstances leading to this appeal, the Court of Appeal was correct in affirming the trial court’s undoubted exercise of judicial discretion to dismiss the appellant’s suit for want of diligent prosecution
- Having regard to the facts and circumstances leading to the appeal including the applicable law is the appropriate order one of striking out or dismissal”
Learned counsel for the appellant enumerated three points and said that he would examine them in detail and show that the learned Judge was in error in coming to those conclusions and that the Court of Appeal was also wrong to uphold the order made by Mbanefo J. The learned counsel submitted that there was no evidence and no basis for the assertion that the appellant:
i) had no intention of prosecuting its claim;
ii) had no intention of meeting its indebtedness to the respondents, and
iii) that the court was being used to sustain the smokescreen of the impropriety.”
On the first point, learned counsel traced the history of the case filed by the appellant and submitted that the only delay caused by the appellant was on 18th February, 1991 when the case was first set for hearing. On that day, counsel for the appellant signified his intention to withdraw from representing the appellant. However, even though the court had refused to grant appellant’s counsel leave to withdraw the counsel refused to go on with the case. On 19th February, 1991 having been abandoned by its counsel, the appellant had to get it’s Managing Director to address the court and he intimated the court that he would secure a settlement with the bank.
Learned appellant’s counsel submitted that on the next adjourned date, 14th May 1991, the appellant’s Managing Director came to court with a new counsel, Mr. E.E.E. Ita. The new counsel pleaded for time to effect a settlement with the bank. The court adjourned the matter to 16th May, 1991 for the appellant to inform the court of the proposals for settlement. On 16th May, 1991 the Managing Director, Mr. Morphy, came to court without his counsel and after the court had gone into dialogue with him it dismissed the suit. The appellant’s counsel before us, Mr. Kanu Agabi, who is now a Senior Advocate, argued that the appellant was not guilty of any delay in this matter. He said that only three months had elapsed from the time when the action was ripe for hearing to the time when it was dismissed by the learned trial Judge.
Learned counsel for the respondent. Mr. J.B. Daudu, SAN, submitted in reply to submission of the appellant’s counsel, that the appellant was not asking for a adjournment to produce his witnesses or prepare himself for hearing. Instead, his application was for settlement, which, although every court had a duty to encourage, is not the primary function of a High Court. Learned counsel for the respondent is quite right that the appellant was not ready to proceed with the case on 14/5/98 for hearing. It seems to me that the Managing Director of the appellant, Mr. Morphy, is not sincerely pursuing a genuine settlement with the respondent. At the time Chief Morphy offered to pay N50,000.00 within two months of putting up his proposal for settlement with the respondent and requested for rescheduling of the loan for 20 years, the appellant’s outstanding indebtedness to the bank was N3,644,789.70. The sincerity of the appellant could be judged by the offer given to the bank for settlement. The proposal submitted on the 16th May, 1991 to the bank by the Chief Executive of the appellant was the same as the one he had submitted three years before 16th May, 1991. When asked by the court to explain whether it was true that the proposal he submitted was similar to the one he submitted to the bank three years ago and that the bank rejected it, Chief Morphy said he would not speak except through his counsel. Chief Morphy had no answer to the question put to him by the court. But there is a letter written by bim of 14/5/91 to the Managing Director of the respondent in which Chief Morphy made such proposal. The letter bas been copied at page 21 of the record of this appeal. It was after this incident that the court exercised it’s discretion and dismissed appellant’s Suit. I will answer the question put up by the appellant’s counsel i.e. whether the appellant had no intention of prosecuting it’s claim, in the affirmative.
The second question posed by the learned counsel for the appellant, viz, whether the appellant had no intention of meeting it’s indebtedness to the respondent has been answered in the first poser. It is crystal clear that the appellant had not made any serious and reasonable proposal for the payment of what had already fallen due for payment of the loan the company received from the respondent. For how could one who is to pay N3,644,789.70 offer to make a down payment of N50,000.00 only and the payment shall be within two months of the date Mr. Morphy wrote the letter of proposal for settlement and how could the company be acting in good faith if it asks for rescheduling of its loan for 20 years.
The third poser is where learned counsel for the appellant asked whether the court was being used to sustain the smokescreen of the appellant’s impropriety. In dealing with this issue learned counsel for the appellant cited the case of Usikaro v. Itsekiri Land Trustees (1991) 2 NWLR (Pt. 172) 150 in which Nnaemeka-Agu J .S.C., contributing to the lead judgment, considered the issue of what amounts to inordinate delay in prosecution of a case and opined thus:
“It would of course be irritating to any trial judge to have come to court prepared for a two-day of trial on a special fixture only to have a two-day unexpected holidays forced down on him. The only question in this appeal is not whether he was right, as I believe he was, to have reacted adversely to the situation. It is however, whether he made the order which the Justice of the case justified.”
The last sentence in the opinion of his Lordship Nnaemeka-Agu JS.C., is the pertinent issue in considering the reasons behind the learned trial Judge’s dismissal of appellant’s claim. The learned trial Judge did not dismiss the case because of inordinate delay to prosecute same. It is quite clear that the issue dealt with by the learned trial Judge is bad faith on the side of the appellant and she explained it clearly in her ruling. The appellant had used the process of the court to delay the foreclosure sale of it’s mortgaged property in order to obtain satisfaction of the loan which the appellant was in breach of its repayment. The company filed this Suit in order to obtain an injunction restraining the respondent from disposing off the secured property tied to the loan and Binang J. readily granted the injunction exparte. Since it obtained the injunction it is one excuse after another delaying the prosecution of the claim.
It is for the above reasons I agree with the majority judgment of the Court of Appeal that the lower court exercised it’s discretion judicially and judiciously. The exercise of discretion is a matter exclusively for the court to do after weighing all the circumstances of the case in the interest of justice and the balancing of the interest of the parties involved, including the balance of convenience and disadvantages, which might be suffered by any of the parties concerned. It is after the court shall have given consideration to such matters that it can arrive at what is undeniably a difficult decision which must appear reasonable in all circumstances of a particular case. A liberty or privilege to decide and act in accordance with what is fair and equitable under the peculiar circumstances of the particular case, guided by the spirit and principles of law, and exercise of such discretion is reviewable only for an abuse thereof – see American case of State v. Draper, 83 Utah 115,27 P2d 39.
A person aggrieved by the exercise of a discretionary power may, instead of attacking the merits of the exercise of discretion contend that the repository of the discretion has acted without jurisdiction or ultra vires because of the non-existence of a state of affairs upon which the validity of the exercise of discretion depends.
Mr. J.B. Daudu, SAN, referred to the minority judgment of Uwaifo, JCA, where the learned justice referred to Order41, rule 2 of the High Court Rules of the Cross River State where the learned justice opined that the learned trial Judge acted without jurisdiction to have dismissed the suit of the appellant instead of striking it out. The learned Senior Advocate argued that Order 41, rule 2 of the Cross River State High Court Rules docs not apply to a situation where the suit is dismissed for want of diligent prosecution. It applies only to a situation where the plaintiff does not appear on the date fixed for hearing. Mr. Daudu is quite right because the meaning of Order 41, rule 2 is without any ambiguity. It reads thus:
“If the plaintiff does not appear, the court shall, unless it sees good reason to the contrary, strike out the cause (except as to any counter claim by the defendant) and make such order as to costs in favour of any defendant appearing as seems just:”.(Italics mine)
So even if I accept that the court had dismissed appellant’s suit for want of prosecution, generally where the plaintiff fails to set the suit down for hearing within the time laid down for that purpose or to take any other steps as may be ordered for the expeditious hearing of the suit, the court may on the application of the defendant make an order dismissing the suit for want of prosecution – see Reggentin v. Brecholme Bakeries Ltd (1967) III C.A. 216. In the case of Ajayi v. Omorogbe (1993) 6 NWLR (Pt. 301) 512 at 534 this court held that courts have often resorted to the inherent jurisdiction of the court whenever the grounds for seeking a relief cannot be properly brought under a rule of court or any enabling statutory provision.The court has an inherent jurisdiction to dismiss an action for want of prosecution where there is default in compliance with an order of court or where the plaintiff is guilty of inexcusable and inordinate delay in the prosecution of the action.
The appellant filed this action on 30th August, 1988 in Ogoja High Court. When the action was set down for hearing on 18th and 19th February 1991 the Managing Director of the Company, Mr. Morphy, sought for adjournment in order to settle the matter with the bank. The court adjourned the suit to 14th, 15th and 16th May, 1991 for a report of settlement or definite hearing. When no reasonable proposal was submitted for settlement and Managing Director showed no intention to call evidence for the hearing of the case the court found that the appellant was not acting in good faith. It therefore dismissed the claim of the appellant and vacated the interlocutory injunction granted exparte in favour of the appellant in which the respondent was restrained from foreclosure sale of the appellant’s secured property tied to the loan. I agree with the Court of Appeal that the learned trial Judge, Mbanefo J, exercised her discretion judicially and judiciously in dismissing the appellant’s suit at the state she reached in the proceedings.
This appeal has failed and it is dismissed. The majority judgment of the Court of Appeal in which the decision of Mbanefo J of Cross River High Court, was affirmed is hereby affirmed by me. I award the respondent N10,000.00 costs against the appellant.
SC.134/93