Ekondo Community Bank Limited V. MR. Eniefiok Mbom Anieting (2013)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

UZO I. NDUKWE-ANYANWU, J.C.A. (Delivering the Leading Judgment)

This is an appeal against the judgment of the High court of Cross River State sitting in Calabar delivered on 7th November, 2010 in suit No HC/166/2006.

Briefly, the facts are that the Respondent took a loan of N1m from Davandy Finance and Securities Ltd Calabar with an interest rate of 5% per month. The respondent continued paying the loan until 2004 he wrote a letter dated 27th July, 2004 requesting for re-negotiation. The re-negotiation ended up in confirming a new interest rate of 3% per annum on the outstanding balance of the loan which was at N671,637.00.

The appellant thereafter took over the transaction. The Respondent continued paying instalmentally a total sum of N711,637.00. The Appellant thereafter sued the Respondent under the Undefended List Procedure. However, the Respondent filed his notice of intention to defend with an affidavit disclosing a defence on the merit.

Consequently, the trial Judge transferred the suit to the General Cause List. Pleadings were subsequently exchanged. The Respondent as Plaintiff claimed as follows:

“WHEREFORE, the Plaintiff claim against the Defendant as follows:

1. The sum of N800,026.69 being the loan facility with accrued interest outstanding as at 30th June, 2006.
2. 10% post judgment interest rate per month on the said sum till judgment debt is fully liquidated.
3. N150,000.00 being recovery costs.”

The respondent in his statement of defence filed on 20th day of October, 2006 contended that he was not indebted to the Appellant after paying N771,637.00 in full satisfaction of the loan balance of N671,637.00 at 3% per annum. Unilaterally, the Appellant charged the interest rate from 3% per annum to 3% per month. The letter Exhibit “9” for this change, the Respondent claims, was never communicated to him.

After a full trial, the learned trial Judge delivered its considered judgment in favour of the Respondent. Being dissatisfied, the Appellant filed his notice and four grounds of appeal. The Appellant filed his brief on 8th day of August, 2011 and articulated four issues for determination as follows:

“(i) Whether the learned trial Judge properly directed himself as to the burden of proof, having regard to the nature of the issues placed before him, in particular evidence of Pw1 vis-a-vis Exhibits “4”, “5” and “9”. (Ground 1).

(ii) Whether the learned trial Judge properly evaluated the evidence before him when in the light of Dw1 evidence vis-a-vis Exhibits “7”, “8” and “10”, he concluded that the Appellant is not entitled to its claims against the Respondent. (Ground 2).

(iii) Whether in view of the Respondent’s evidence, he has shown by cogent and preponderance of evidence that he has in fact liquidated his indebtedness to the Appellant. (Ground 2).

(iv) Whether in the absence of contradictory evidence the learned trial Judge was right to suo motu question and discredits Exhibit “9”, and relied solely on Exhibit (5)). (Ground 3).”

The Respondent filed his brief on 13th September, 2011 and also articulated two issues for determination as follows:

“1. Whether the learned trial Judge was right to hold that the applicable rate of interest on the loan was 3% per annum as stated in Exhibited “4 and “5” and not 3% per month as stated in Exhibit “9”.