Faith Enterprises Ltd. V. B.A.S.F Nigeria Limited (2010)

LAWGLOBAL HUB Lead Judgment Report

S. MUNTAKA-COOMASSIE, JSC.

The Respondent herein which was the plaintiff at the trial court claimed against the Appellant, the defendant at the High Court Lagos State in its amended statement of claim as follows:

“Whereof the plaintiff claims against the defendant the said sum of Dm 140,000.00 or its Naira equivalent based on the prevailing rate of exchange of the day the judgment as price of goods sold and delivered to the defendant, been N11,668.41 already paid with interest thereon at the rate of 10% from the 15th of May, 1979 to the date of judgment and thereafter of 5% until the whole debt is liquidated”.

The Appellants filed its statement of defence after the closure of pleadings, the Respondent filed an application dated 15/9/1992, wherein it prayed the trial court for the following:-

“AN ORDER to enter judgment for the Plaintiff/Applicant as per the further amended writ of summons and statement of claim upon admission by the Defendant/Respondent”.

The application was based on Exhibit B, wherein the defendant was alleged to have admitted the claim of the Respondent. The Appellant filed a counter-Affidavit dated 23/8/92 and in paragraphs 7, it was averred as follows:

“7. That the purported admission by the defendant company was made in fraud of the defendant company and the defendant has consistently stated this in the statement of defence.”

Both parties were heard on the application by the trial Judge. On the 3/3/95, the trial Judge Segun J delivered his ruling and granted the Respondents application. On page 166 of the Record he held:-

“As at 3rd August, 1979 the defendant/respondent mandated Mr. Lachmandas to operate its accounts at the Union Bank of Nigeria Ilupeju Branch, Lagos. They now make allegation of fraud against Lachmandas who was the alter ego of the defendant/company. The acts of Lachmandas were therefore not of the agent of the company but that of the company itself. (Sections 65 and 70 company and Allied Matters Act). Unless the defendants (sic) can show that the plaintiffs (sic) colluded with the Managing Director and General Manager of the Defendant Company, against whom allegations of fraud were made, the defendants albeit, without particulars to perpetrate a fraud against the defendants would still be liable to pay its debt to the Plaintiff/Applicant……..

It seems to me that the defendants have no defence to this action. It is most in expedient to allow a defendant who has no real defence to the action to defend for mere purpose of delay.

This court would not encourage that.”

The defendant was dissatisfied with this ruling and an appeal was therefore lodged by him before the Court of Appeal Lagos Division, hereinafter called the lower court. After hearing the Appellants appeal, the lower court in its unanimous judgment dismissed the appeal. In the lead judgment of P.A. Aderemi JCA (as he then was), it was held as follows:-

“The attack offered to the assertion of admission is that it was made in fraud of the defendant. That is a general allegation. And it is now well settled, in law that general allegations however strong was (sic) in sufficient to amount to an averment of fraud of which account of law can take notice see:- UHUNMWAANGHO vs. OKOJIE & ORS. (1982) 9 SC 101. It need be said that fraud is a serous crime and in civil matters the particulars must be pleaded and proved strictly. See FABUNMI Vs EGBE (1985) 3 SC. 28. Beyond the bare assertion of fraud the processes filed by the Defendant/Appellant are devoid of any particulars let alone proof of same. The author of Exhibit B-Lachmandas was at the material time, the Managing Director of the defendant/company. In law the state of mind of Lachmandas, his acts are all regarded as those of the defendant/company, a legal fiction that only exists in the eye of the law…” See pp. 233 at p. 234 of the Record of proceedings”.

The Appellant was again dissatisfied with the decision of the court below had appealed to this court on the following grounds – I reproduce them hereunder with their particular for the sake of clarity.