Ezekiel Okoli V Morecab Finance (Nig) Ltd (2007)

LAWGLOBAL HUB Lead Judgment Report

U. ONU, J.S.C

This is an appeal by the defendant/appellant against the decision of the Court of Appeal, Enugu Division (hereinafter referred to as the Court below) which had on the 17th of January, 2001 upheld the decision of J. N. Ofomata J , sitting at Onitsha High Court, Anambra State.

The claim before the High Court was for payment of a loan granted by the plaintiff company, Morecab Finance (Nig) Limited to the defendant, Ezekiel Okoli, plus interest. The claim was made under the undefended list procedure (see page 4 of record of proceedings. The defendant’s defence is at page 7 of record of proceedings). The plaintiff won the case on 6th of October, 1997 and the defendant appealed against the decision on the 9th October, 1997. He also lost and has now appealed to this court.

The four issues the defendant/appellant has formulated as arising for determination in this appeal are as follows:

“1. Whether the court below was right in upholding the judgment of the trial Judge that there was no triable issue raised in the appellant’s defence.

2. Whether the learned Justices of the court below were not in error to have ignored the surrounding circumstances of this case which makes it unsuitable to be heard under the undefended list procedure.
3. Whether the Court below was right to have dismissed the allegation of fraud against the company without proper investigation.
4. Whether in view of the failure of the respondent to traverse the allegation of fraud this appeal should be allowed.”

The sole issue the plaintiff/respondent has proffered for our determination is:

“Did the affidavit in support of the defendant/appellant’s notice of intention to defend the suit disclose a defence on the merits as prescribed by Order 24 rule 9 of the High Court Rules of Anambra State 1988 to justify an order transferring the suit from the undefended list to the general cause list.”

At the hearing of this appeal on 6th February, 2007 both parties were absent but since they had filed their briefs we deemed them as argued.

The sole issue proffered for the argument of the appeal by the respondent, in my view, will do to dispose of this appeal. The main plank of the defence sought to be set up by the appellant in his notice of intention to defend this suit which was placed on the undefended list, is contained in paragraphs 1 and 28 of the affidavit in support of his said notice of intention to defend wherein he deposed as follows:

“(1) That I am not a loan customer of the plaintiff.

(28) That the amount the plaintiff is claiming from me is non existent and not owed to the plaintiff.”

The foregoing extracts are mere conclusions and are insufficient to cause the matter to be transferred to the general cause list. See Wallingford v. Mutual Society (1880) 5 A.C 685 at 704 cited with approval in John Holt (Liverpool Ltd.) v. Fajemirokun (1961) ANLR 513. For purpose of emphasis I reproduce hereunder the following paragraphs in appellant’s affidavit thus:

“29. That the truth is that I was owing CCB, Plc a certain sum which I have liquidated after the sale of one of my houses and after the said repayment, CCB, Plc did not return my Deed of Title.

30. So my former good friend and confidant for many years Mr. Kenneth Okonkwo told me and I verily believed him that we shall make case against CCB Plc.
31. Mr. Kenneth Okonkwo prepared for me and I verily believe him the contents of the letter dated 11/ 10/93 and the same is hereby attached and marked exhibit K.
32. That when the CCB, Plc aforesaid did not return the Deed of Title the same Mr. Kenneth Okonkwo (sic) for me the contents of the letter dated 5th day of November, 1993. A copy of the said letter is hereby attached and marked exhibit L.
33. That when the CCB, Plc could not return the deed of title, Mr. Kenneth Okonkwo briefed Barrister Okey Anoh to write on my behalf the letter dated the 14/1/ 94. A copy of the said letter is hereby attached and marked exhibit M.
34. That the alleged debt of N 1, 575 million purportedly owed to the plaintiff in those letter was the brain-child of Mr. Kenneth Okonkwo whose (sic) said allegation of commitment to Morecab Finance Nig. Ltd. is made to the tune of N 1,575 million, the CCB, Plc will be forced to return the title deed.
35. Mr. Kenneth Okonkwo also told me and I verily believed him that the inclusion of N5,000,000 (five million naira) will form the basis of the letter dated 26/10/93 is attached as exhibit .
36. That Mr. Kenneth Okonkwo further briefed and instructed Mr. Okechukwu Anoh to file suit No. 0/110/94 on my behalf against CCB, Plc. A copy of the statement of claim in the said suit is hereby attached and marked exhibit O.
37. That all the documents attached by the plaintiffs company counsel to the affidavit verifying the claim in this suit are part of the supposed preparation by Mr. Kenneth Okonkwo for him to assist me to prove my case against the CCB Plc.
38. I trusted him so much and do whatever he tells me to do without any doubt or suspicion.”The question is, do the foregoing depositions in the affidavit in support of the notice of intention to defend disclose a defence on the merits within the meaning and intendment of Order 24 rule 9 of the High Court. Rules of Anambra State, 1988 to justify an order transferring the suit to the general cause list I am of the view that they do not in as much as the “defence” sought to be raked up in the said affidavit are a sham and constitute a clever by half attempt to divert attention from the real issues raised by the respondent’s claim.

Now, the totality of the averments in the said affidavit in Support of the notice of intention to defend revolve around a loan which, as the herein defendant/appellant alleges he, (i.e. Ezekiel Okoli) owed the CCB Plc and which his friend Mr. Kenneth Okonkwo was assisting him to liquidate. It is the appellant’s further claim (in his said affidavit) that the documents exhibited to the affidavit in support of the claim in this suit which is placed on the undefended list were made or authorised by his said friend Mr. Kenneth Okonkwo in a bid to assist him out of his problems with CCB Plc.

It is contended for the plaintiff/respondent that to determine whether the defendant/appellant’s story (supra) discloses a triable issue, the following questions afford useful guides:

a) On the materials on record, was the defendant/appellant i.e. Ezekiel Okoli indebted to CCB Plc at any time

b) If the answer to (a) is in the negative, who was so indebted

c) Is there any relationship between the documents exhibited to the affidavit in Support of the claim on the undefended list and the documents attached to the notice of intention to defend

d) If there is no such relationship, could the defendant/ appellant be said to have made out a triable issue

A careful and calm reading of exhibits “K”, “L”, “M”, “N” and “O” in support of the affidavit in support of the notice of intention to defend provides a negative answer to the question No: (a) above to wit: who was indebted to CCB Plc exhibit “K” (supra) is a letter dated 11/1 0/93 on the letter headed paper of Ezzy Rainbow International Limited written to the Managing Director of CCB making reference to its previous indebtedness which it had repaid and requesting a release of the title documents referred to in the affidavit in support of the notice of intention to defend. It is this letter of 11/10/93 that the defendant/appellant claims to have been prepared for “me” in paragraph 31 of the affidavit in support of his notice of intention to defend to create an impression that there was a personal loan transaction between him and CCB Plc when, in point of fact, the transaction was between a corporate body (Ezzy Rainbow International Limited) and CCB Plc.

Furthermore, it was stressed, exhibit “M” is the letter written by Barrister Okey Anoh to CCB Plc which the appellant deposed in paragraph 33 of the same affidavit in support of the notice of intention to defend to have been written “on my behalf” to create a misleading impression that the subject matter of the said loan concerned him as an individual. But as the opening sentence of the said letter demonstrates, Okey Anoh Esq (supra) wrote the letter under reference as “solicitors for Ezzy Rainbow International Enterprises Nigeria Ltd. a company incorporated under the Laws of the Federal Republic of Nigeria … ”

Exhibits “N” and “O” are not different, exhibit N is a letter, from Morecab Finance (Nig.) Limited to the Managing Director, Ezzy Rainbow International Limited on the same subject matter. Again, in exhibit “O” is the statement of claim in suit No. 0/110/94 which the defendant/appellant claimed, in paragraph 6 of the said affidavit of his notice of intention to defend to have been filed “on my behalf’. The said statement of claim shows that the suit has Ezzy Rainbow International Enterprises (Nig) Limited as plaintiff. The defendant/appellant (Ezekiel Okoli) is not a party in suit No. 0/110/ 941 neither is Ezzy Rainbow International Enterprises, (Nig) Limited a party in the present case. It is elementary that Ezzy Rainbow International (Nig) Limited is different from its members and its liabilities are not ordinarily transferred to defendant/appellant merely because he is a Director thereof and/or signs documents for it. In sum, the materials on record point to one inescapable conclusion:

the defendant/appellant was not indebted to CCB Plc. It was Ezzy Rainbow International Enterprises (Nig) Ltd. that was so indebted. It was thus, idle for the defendant/appellant to attempt to confuse issues in this matter by dragging a transaction between third parties i.e. Ezzy Rainbow Ltd. and CCB Plc into this matter as a purported defence.

The matter becomes clearer if one attempts an answer to question No. (c) above, namely: is there any relationship between the documents exhibited to the affidavit in support of the claim on the undefended list and the documents attached to the notice of intention to defend The relevance of this question is underscored by the averment in paragraph 37 of the affidavit in support of the notice of intention to defend which alleges that:

“… all the documents attached by the plaintiff’s Company counsel to the affidavit verifying the claim in this suit are part of the supposed preparation by Mr. Kenneth Okonkwo for him to assist me to prove my case against CCB Plc.”

Now, apart from the fact that the appellant has been shown above not to have any case against CCB Plc, there is no connection between the documents exhibited to the affidavit in support of the claim on the undefended list and those attached to the affidavit in Support of the notice of intention to defend. In the first place, all documents relevant to the debt owed CCB Plc show that the said transaction took place in or about 1993, exhibit K to the said affidavit in support of the notice of intention to defend which shows that the said debt to CCB Plc had already been paid with the assistance of the financiers of Ezzy Rainbow International Limited was made on 11/10/93. In his letter copied at pages 11(v) – 11(x) of the records, Banister Okey Anoh wrote that as at the date of the said letter i.e.14/1/94, his client had already taken a loan of N1,575, 000.00 from Morecab Finance (Nig) Limited. The statement of claim in suit No. 0/110/94 which in paragraph 16 pleads the same loan of N1,575,000.00k was dated 13/4/94 and filed on the same date. What possible connection could the said loan of N1,575,000.00k taken by Ezzy Rainbow Ltd which was already in existence as at 14/1/94 and 13/4/94 when Barrister Okey Anoh’s letter (supra) and the statement of claim in suit 0/110/94 were written have with a fresh application for facility made in the personal name of the appellant on 8/8/96 i.e. over two years later (see application for loan at page 5 of the records). What connection could the two loan transactions, one may ask, possibly have One was in or before 1993, while the other was in 1996. The amount involved in one was N1,575,000.00 whilst N1.062,000.00k was involved in the other. One is owed by a limited liability company whilst the other is owed by an individual. It is not possible to decipher how the documents in the latter loan of 1996 could help the prosecution of suit No. 0/110/94. The statement of claim in the last mentioned case is part of the records and it can be seen the said documents relevant as they are to the instant case, much as they are relevant to the loan subject matter of the instant case) are not therein pleaded and are not therefore admissible in that case. All the foregoing. it is contended, show that even if there is any truth in the allegations leveled against Mr. Kenneth Okonkwo (which is denied) same relates to a completely different transaction from the one which is the subject matter of the case herein on appeal.

Now to the issue of fraud. This issue raise in paragraph 23 of the further affidavit in support of notice of intention to defend the suit. Therein, the defendant/appellant deposed:

“23. That the documents were forged and the photocopies attached to the claim.”

It is further submitted and I entirely agree that this allegation of fraud does not advance the position of the defendant/appellant a little bit. This is because, as already pointed out herein, the documents alleged to have been made on the direction of Mr. Kenneth Okonkwo vide paragraphs 1,22,23,28,29,30,31,38,43,27,2 and 9 of the affidavit in support of the notice of intention to defend and which were relied upon in paragraph 4.0.8 (p.6) of appellant’s brief of argument particulars of the alleged fraud are different from those giving rise to this suit. Nowhere in the affidavits deposed to by him o in this matter did the appellant deny signing the documents on which the debt now sought to be recovered from him arose. It is also disquieting that the appellant would seek to set up fraud allegedly perpetrated by Mr. Kenneth Okonkwo (who is not a party to this suit) in collusion with himself and seek to rely on same to the detriment of the respondent. There is nothing to suggest that in the alleged fraudulent act of trumping up documents to mislead CCB Plc (supra), the said Mr. Kenneth Okonkwo acted for and at the direction or instigation of the respondent. It is, in the foregoing circumstances, difficult to see how the alleged collusion of the appellant and a non-party to this suit to forge and utter documents to CCB Plc (another non-party to this suit) which can be said to constitute a defence on the merits in this matter. For an allegation of fraud to avail a defendant in a suit placed on the undefended list, it must be on matters relevant to the case set up by the plaintiff. See John Holt (Liverpool Ltd.) v. Fajemirokun (1961) ANLR (Reprint) 492 which approved of the decision in Wallingford v. Mutual Society (1880) A.C 685 at 704 where Lord Blackburn, said:

“If you swear that there was fraud, that will not do. It is difficult to define it but you must give such an extent of definite facts pointing to fraud as to satisfy the judge that those are facts which make it reasonable that you should be allowed to raise that defence.”

In the case in hand, the plaintiff a Finance House, has exhibited all its books and documents with which the appellant applied for and was granted a loan. These range from his handwritten application for the said facility, to an agreement drawn and executed between him and the bank to the vouchers and lodger cards showing how he operated his account with the respondent and incurring the liability subject-matter of this suit. He (defendant/appellant) does not deny his signature on the documents. He did not also establish a nexus between the set of documents exhibited to the affidavit in support of the plaintiff/respondent’s claim which was placed on the undefended list which were made in 1996 and the documents bearing on his story about CCB Plc which were made in 1993. His allegation of fraud was left with nothing to give flesh to it.

It is little wonder then that the Court of Appeal found that same was insufficient to cause the matter to be transferred to the general cause list.

I cannot but agree with and in effect, solemnly affirm and ratify the decision of the Court of Appeal. This is because the Courts have, over the years, treated allegations in affidavits in defendants’ notices of intention to defend with circumspection, to the effect that:

” … a defendant who has no real defence to the action should not be allowed to dribble and frustrate the plaintiff and cheat him out of judgment he is legitimately entitled to by delay tactics aimed, not at offering any real defence to the action but at gaining time within which he may continue to postpone meeting his obligation and indebtedness.” See Agro-Millers Ltd. v. CM.B. Ltd. ( 1997) 10 NWLR (Pt.525) 469 at 477-478.

I therefore ratify, confirm and approve of the above statement of the Court of Appeal and hold that the purported defence raised in the notice of intention to defend in the present suit amount to no more than the trick identified in Agro-Millers Ltd v. CM.B. Ltd. (supra) and finally, that I agree with the respondent that the points raised in paragraphs 7.0 I to 7.03 of the appellant’s brief are non sequitur. As already pointed out, there is nothing to show that. In advising the appellant to prepare any documents with which to deceive CCB Plc, Kenneth Okonkwo acted for or on the authority of the plaintiff/respondent. The appellant’s own affidavit evidence showed that he dealt with Mr. Kenneth Okonkwo as his friend and confidant. See paragraph 30 of the affidavit in support of the notice of intention to defend. The defendant/appellant failed both in the

High Court and in the court below to mislead them into transferring the suit to the general cause list by resorting to stories involving two non-parties to the suit (i.e., CCB Plc and Kenneth Okonkwo) and in hoping thereby to secure a transfer of the matter to the general cause list. The court below saw through the appellant’s scheme or deviousness and held –

” … too many irrelevant and unnecessary materials have been dumped into this case by the appellant with the obvious intention of kicking up unnecessary dust so as to confuse or obscure the main issue in controversy in this case. The case against the appellant was simply that on 12/8/96 he obtained a loan of N1,062,000.00 from the respondent Company – a Finance House known as Morecab Finance (Nig.) Limited, He duly submitted a letter of application for loan written by him by hand, and also completed the usual formal application form, Facility Form, Loan Agreement and Payment Voucher, all duly signed by him. The whole amount was to be refunded in six months together with the agreed interest of 21%. At the expiration of the six months period the appellant did not refund a single kobo either as principal or interest. The owners of the money therefore instituted this action against the appellant at the Onitsha High Court for recovery thereof.”

It is trite law that charges of fraud or commission of other crimes or any fact showing illegality must be specifically pleaded.

In United Africa Company Ltd. v. James Eggay Taylor (1936) 2 WACA 70 at 71 the Privy Council held as follows:

“In the opinion of their Lordships there is no rule which is less subject to exception than the rule that charges of fraud and a fortiorari charges of criminal malversation or felony against a defendant ought not to be made at the hearing of an action unless in the case where there are pleadings, those charges have been definitely and clearly alleged so that the defendant, comes into court prepared to meet them.”

This was followed in Emmanuel Nelson Tamakloe v. The Basel Trading Co. (1940) 6 WACA 231 and Oyebisi Afolbhi Usenfowokan v. Idowu (1969) NMLR 77. See also Brett.JSC in the case of Usen v. Bank of West Africa Ltd. .. (1965) 1 ALL NLR 244. At page 247 of the report the learned Justice held that

“fraud may be presumed from the nature of the bargain … the circumstances and condition of the parties contracting, weakness, one sided, extortion and advantage taken of that weakness on the other. Fraud in such cases does not mean deceit or circumvention; it means unconscionable use of the power arising out of the circumstances and condition of the parties.” See Adimora v. Ajufo (988) 3 NWLR (Pt. 80) at 13.

If irregularity and/or fraud is alleged, it has to be particularised, pleaded and proved. See Akin Omoboriowo & Ors. v. Chief Michael Adekule Ajasin (1984) 1 SCNLR 108 and Fabunmi v. Agbe (1985) 1 NWLR (Pt.2) 299.

For as Thesiger LJ said in Davy v. Garret (877) 7 Ch. Div. 473 at 489:

“In the common law courts, no rule was more settled than that fraud must be distinctly alleged and distinctly proved and that it was not allowable to leave fraud to be inferred from the facts.”

In Earl Aylesfora v. Morris (873) 8 Ch. App 0861 – 1893) A.E.R E 300 (reprint) it was held that:

“fraud may be presumed from the nature of the bargain – the circumstances and condition of the panics contracting, weakness on one side, extortion and advantage taken of that weakness on the other. Fraud in such cases does not mean deceit or circumvention, it means an unconscionable use of the power arising out of the circumstances and condition of the parties.”

The attitude of the Courts on the issue of fraud has been total and unequivocal condemnation of the conduct. See Clermont v. Tas Burgh 37 ER 318/321, this sometimes is subject to certain conditions on the part of the defendant: where the defendant has assented to the fraud or has waived his right to object. See Clapham v. Shillito 49 ER 1019.

It is the law that fraud unravels everything vide per Lord Denning M.R in Lazarus Estate v. Beasley (956) 1 All E.R 341; it must be specifically pleaded and its particulars given, failing which the evidence obtained thereof would not be admissible. See Fabunmi v. Agbe (supra) and Adeoye v. Ibidun Jinadu (975) 5 SC 43 at 48-49.

Since in the instant case the appellant neither particularised, pleaded nor proved fraud, his case is devoid of any iota of proof and it must perforce fail.

From all I have been saying, I find no merit in this appeal and it is accordingly dismissed.

Appeal dismissed with N10,000 costs to the respondents.

SC.73/2002