Festus Evbuomwan V. Bendel Insurance Co. Plc (2000)

LawGlobal-Hub Lead Judgment Report

AKINTAN,  J.C.A.

This is an appeal against the ruling delivered by Edokpayi J. on 18th December, 1995, sitting at Benin High Court in suit No. B/112/94. The appellant, Festus Evbuomwan was the plaintiff while the respondent, Bendel Insurance Plc., was the defendant in the action. The plaintiff’s claim against the defendant in the case was for “N350,000 being amount due to the plaintiff under a friendly loan granted to Isaac Oviasu (now deceased) as per an agreement made in Benin City on 31st day of December, 1991 and which said sum was repayable on or before the 30th May, 1992. The defendant undertook to guarantee payment of the said sum in default by Mr. Oviasu. The principal debtor could not pay before his untimely death. The plaintiff also claimed interest thereon at the rate of 20% per annum from 31st May, 1992 until judgment and thereafter at 10% per annum until the total sum is liquidated. The action was filed on 17th February, 1994.

The plaintiff contended that the respondent was served with the writ but failed to enter appearance. The plaintiff thereafter on 15th August, 1994 filed his statement of claim and this was followed by a motion for judgment. Both the statement of claim and the motion for judgment were also said to have been served on the defendant. The motion for judgment was thereafter listed for hearing before Omaje, J. sitting at a Benin High Court. The defendant was absent on the day the motion came up for hearing and it was not represented by any counsel. The plaintiff however gave evidence in support of his claim and in line with his pleadings. A witness, Paul Zaye, a bailiff at Benin High Court, gave evidence for the plaintiff. He told the court, inter alia, that on 17/5/95 he served the motion on notice on the Managing Director at the company’s registered office at the Sapele Road office of the company. The learned trial Judge there and then on 29/5/95 entered judgment for the plaintiff in the sum, of N350,000 with interest thereon at the rate of 12% from 4/6/92 up to the date of judgment on 29/5/95.

The plaintiff’s next action was that he applied ex parte for a garnishee order nisi attaching the defendant’s monies with the First Bank of Nigeria Plc. King’s Square branch, Benin City. The application was taken and granted. It was then served on the defendant and its said bankers. The defendant reacted by filing a motion on notice in which it prayed the court for extension of time within which it could apply to set aside the judgment and the garnishee order and an order setting aside the said judgment and the garnishee order. The motion was supported by a 17 paragraph affidavit deposed to by Robinson Abiyere, an Assistant Manager in charge of legal matters with the defendant company. The deponent denied in the affidavit that the defendant was ever served with any of the processes as claimed by the plaintiff. He further disclosed that as at the time of the purported service of the documents, the offices of the company were deserted due to a strike action embarked upon by the entire staff of the company.

The motion was opposed by the plaintiff and to that end, an 18 paragraph counter-affidavit was deposed to and filed by his counsel, Olugbemi Adisa. The deponent denied that the company’s premises were deserted as claimed in the affidavit in support. He then maintained that the defendant was duly served with all the processes in the case as claimed by the plaintiff.

The motion thereafter came up for hearing before Edokpayi J. When hearing in the matter started on 12/12/95, Mr. Itua, learned counsel for the applicant (now respondent) moved the motion and concluded his address on that day. Mr. Osaze-Uzzi, learned counsel for the respondent (now appellant) started his reply.

He was, however, yet to complete his address when further hearing in the matter was adjourned to 14/12/95 by the learned Judge. The applicant, however, filed a 20 paragraph further and better affidavit deposed to by the same Robinson Abiyere in support of the motion. Paragraphs 6 to 18 of the further affidavit adequately set out the appellant’s reason for the further affidavit as well as its case. The paragraphs read as follows:

“6. That on 11/9/93 I deposed to an affidavit in support of the defendant/judgment/debtor/applicant’s application to set aside the judgment dated 29/5/95 and garnishee order dated 30/3/95.

7. That after carefully going through the applicant’s file in this case with Yakubu Itua Esq. the applicant’s solicitor in this case I discovered that paragraphs 3 and 11 of my affidavit dated 11/9/95 are not correct as it is in another matter that Yakubu Itua Esq. filed a memorandum of appearance on 17/9/95.
8. That the truth of the matter is that the applicant did not brief any counsel in this suit as it did not receive court processes in this case.
9. That paragraphs 3 and 11 of my affidavit of 11/9/95 were made inadvertently without any intention to deceive this Honourable Court.
10. That the attention of the applicant was drawn to suit No. B/112/94 for the first time in September, 1995 when the applicant received the garnishee order. Exhibited as Exhibit A in my affidavit of 11/9/95.
11. That the fact of this case was that on 17/12/91 Late Isaac Oviasu trading as Vos Nigeria Company obtained credit guarantee bond No. NBCN 12655 from the applicant to cover a loan facility of N700,000.00. A copy of the credit guarantee bond is exhibited hereto as Exhibit “1”.
12. That on 21/5/92 late Issac Oviasu died.
13. That on 4/6/93 the applicant received from the respondent a letter dated 4/6/93 claiming the sum of N437, 492.00 from the applicant as principal debt and interest in accordance with the credit guarantee bond. A copy of the letter is exhibited hereto as Exhibit “2”.
14. That the applicant in accordance with the practice and especially as Isaac Oviasu was dead requested the respondent to produce evidence of the amount of loan given to late Isaac Oviasu and the respondent produced a receipt purportedly signed by late Isaac Oviasu on 30/5/92 which was a receipt issued nine days after the death of late Isaac Oviasu. The receipt is exhibited hereto as Exhibit “3”.
15. That the respondent also produced New Nigeria Bank cheque dated 30/12/91 for the sum of N250.00 purportedly issued to late Isaac Oviasu and on enquiry there was no evidence that the said cheque was in fact paid into the account of late Isaac Oviasu. The cheque is exhibited hereto as Exhibit “4”.
16. That by letter reference BIC/CM/EB/CB/6/92 dated 20/12/93 written by the applicant to the respondent, the respondent repudiated the claims of the respondent because of lack of evidence of payment to late Isaac Oviasu and because the late Isaac Oviasu and the respondent committed a fraud on the applicant by altering the terms of the credit guarantee bond No. NACB 12655.
17. That when the respondent produced the agreement he entered into with the late Isaac Oviasu it was found to be a friendly loan without interest and for the sum of only N350,000.00. The agreement is exhibited hereto as Exhibit “5”.
18. That the applicant has a good defence to the claim of the respondent contained in the respondent’s statement of claim which is exhibited hereto as Exhibit “6” and the applicant is ready to file a defence within three days if this application is granted.”

When hearing in the case resumed, Mr. Itua, learned counsel for the applicant informed the court that he had filed a further and better affidavit. He then sought leave of the court to use the facts deposed therein. His request was opposed by Mr. Osaze-Uzzi, learned counsel for the respondent (now appellant) on the ground that the respondent had started his final address and as such it was too late in the day for the applicant to reopen its case. The objection was, however, overruled by the court and the applicant was allowed to reopen its case and use the facts deposed to in the further and better affidavit. The learned Judge gave his reasons for over-ruling the objection as follows in his said ruling:

“Ruling:

Having read through the further and better affidavit and listened to counsel, there is no doubt that the further and better affidavit was not filed timorously enough but the learned counsel has in the further and better affidavit advanced reasons to the effect that he could not be properly in knowledge of the facts now deposed to in the further and better affidavit because the case file was with another counsel previously assigned to do the matter. The further and better affidavit is tending to suggest some fraud which could, if proved, vitiate any judgment based on it. In the peculiar circumstance, this court has to choose either to adhere strictly to known procedure and rule that the applicant cannot belately now come to re-open its case and use the further and better affidavit and therefore shut its eyes to the allegation of fraud in the transaction forming the basis of the judgment, or choose to relax the known procedure in the interest of justice and allow the further and better affidavit be used in the further and reopened argument of the motion by the applicant. If the applicant is allowed to use the further and better affidavit the respondent whose counsel was already replying to the argument of the motion still has the opportunity of re-acting to the further and better affidavit and his counsel will still have the chance to advance his reply to the further and better affidavit in his reply. On the other hand, if the applicant is refused the use of the further and better affidavit, his allegation suggesting fraud in the entire transaction upon which the judgment and order of garnishee both rest will remain unattended or unexamined for ever.

I am of the view that this is a rare situation in which procedural defects should be ignored in favour of the merits of the case. Consequently, the objection of the learned counsel for the respondent is refused and the applicant and its counsel are allowed to re-open the argument of the motion and to use the further and better affidavit in that further argument”

Learned counsel for the applicant thereafter reopened his case by addressing the court and making use of the new facts disclosed in the further and better affidavit. At the conclusion of his address, learned counsel for the respondent/appellant concluded his address. The ruling of the court was thereafter delivered.

The learned trial Judge found as a fact in his ruling that there was nothing on record and in the case file to show that either the statement of claim or the motion on notice for final judgment in default of appearance was served on the applicant. The learned Judge also found as a fact that the bailiff who testified at the trial of the case failed to file the usual certificate of service in the case file. He therefore came to the conclusion that the failure of the applicant to appear to defend the claim at the trial was due to the fact that none of the court processes was served on the applicant. The motion was therefore granted as prayed. The court accordingly granted an extension of time within which the applicant was to apply to set aside the judgment dated 19/5/95 and the garnishee order. Both, the judgment and the garnishee order were also set aside and N500 cost was awarded to the applicant.

The present appeal is against the ruling of the court. Five grounds of appeal were filed against the ruling. The briefs were filed and exchanged in this court. Based on the grounds of appeal filed, the appellant formulated the following three issues as arising for determination in the appeal in the appellant’s brief:

“1. Was the learned trial Judge right when he granted the defendant’s counsel leave to rely and use the affidavit filed by him after he had concluded his submissions and to reopen his arguments after the plaintiffs counsel had commenced his reply thereto?

2. Was the learned trial Judge right in holding that the defendant was not served having regard to the evidence on record?
3. Was the learned trial Judge right in extending the time within which to apply to set aside the judgment and garnishee order of Hon. Justice V.A.O. Omage dated 29th May, 1995 having regard to the materials presented to court by the defendant?”

The respondent adopted the above three issues in the respondent’s brief.

It is submitted in the appellant’s brief on Issue No.1 that as the further affidavit filed did not disclose any facts which were not within the deponent’s knowledge, the respondent ought not to have been allowed to use the facts therein. This is because the reason given by the deponent in the affidavit was that he discovered while going through the file with his employer’s solicitors that paragraphs 7 and 11 of his earlier affidavit in support were incorrect. It is argued that since he did not disclose when he made the discovery and why he did not depose to the affidavit until more than three months after the application was filed, he ought not to have been allowed to use the new affidavit. The decision of the court to allow the respondent to re-open its case after the appellant’s counsel had started his address was unfair and contrary to the accepted practice as laid down in judicial decisions. The decision in Majoroh v. Fassassi (1986) 5 NWLR (Pt.40) 243 was cited in support of the submission.

The point raised in Issue No.2 relates to the question whether or not the respondent was duly served with the court processes. Reference is made to the evidence of the bailiff given at the hearing before Omage J. It is then submitted that the question whether or not there was service had been settled before that learned Judge and that it was not within the duty of Edokpayi J. to re-open that point because the court was already functus officio on that point.

The decision in Bello v. National Banks Ltd. (1992) 6 NWLR (Pt.246) 213 was cited in support of the point that an affidavit of service is prima facie proof of service in relation to how and where service was effected.

The lower court’s reasons for setting aside the judgment and the garnishee order are the subject-matter considered in the appellant’s third issue. It is submitted that although a court has a discretion to grant or refuse an application for extension of time to apply for an order to set aside a judgment and for an order to set aside a judgment, as in the present case, it is submitted that such request could only be granted after the applicant must have shown satisfactory reasons for bringing such application and such application must be made without undue delay. Reference is made to the reasons given in support of the application in this case and it is submitted that the reasons given do not justify granting the prayers. The interest of the appellant was also not adequately taken into consideration by the court before reaching its said conclusion. Similarly, the allegation of fraud relied on by the learned trial Judge is said to be inapplicable because the alleged fraud was made in respect of an alteration of the guarantee bond and not in respect of the respondent’s liability.

It is submitted in reply in the respondent’s brief on the first issue that what the learned trial Judge did when he allowed the respondent to reopen its case and use the facts deposed to in the better and further affidavit was proper and amounted to proper exercise of his discretion having regards to the facts placed before him.

It is submitted that since justice and fair hearing should not be sacrificed at the alter of technicality, the facts placed before the court were sufficient to warrant and justify the exercise of the court’s discretion in favour of the respondent as it was done in the case.

It is submitted in reply in respect of Issue No.2, that since the respondent had denied being served with any of the court processes, as deposed to in paragraphs 8 and 10 of the further and better affidavit, it became obvious that the entire proceedings leading to the judgment was a nullity because a plaintiff could only get judgment in a case under Order 14 of the High Court Rules if the defendant was duly served with all the court processes including copies of the motion for such judgment. Since the learned Judge rightly found as a fact that there was no certificate of service of the court processes on the respondent in the case file, his decision that the court processes were in fact not served on the respondent was justifiable having regard to the facts deposed to in the afore-mentioned paragraphs 8 and 10 of the further and better affidavit. The decision in Bello v. National Bank Ltd. (supra) is therefore said to be inapplicable to the present case since there was no affidavit of service on the respondent.

On Issue No.3, it is submitted in reply that since the learned trial Judge had a discretion to act one way or the other in the matter, the appellate court cannot just substitute its own discretion for that of the trial court unless the appellate court was satisfied that the lower court based its exercise of the discretion on wrong principles. Also since the appellant has failed to establish that the exercise of the discretion was based on wrong principles, there is therefore said to be no justification for this court tampering with the lower court’s discretion in the matter.

Two main points are raised in this appeal. The first is whether or not there is justification in this court tampering with the lower court’s exercise of its discretionary powers made in the case before it. The learned trial Judge had exercised his discretionary power in favour of the respondent by granting its request to re-open its case and use new facts made in a motion filed after its counsel had concluded his final address and learned counsel for the appellant had started his address but was yet to conclude it. The other point raised is whether the learned trial Judge’s finding of fact that the respondent was not served with the relevant court processes was right and justifiable having regards to the facts placed before him.

It is settled law that in an appeal against the exercise of discretion by a trial court, the appellate court can only tamper with such exercise of power when it has been shown that the discretion had not been exercised judicially. It will therefore be improper for an appellate court to merely substitute its own discretion for that of the trial court. An appellate court will, however, interfere when the order of the lower court will result in injustice: See Abeki v. Amboro (1961) All NLR 368; Resident, Ibadan Province v. Lagunju (1954) 14 WACA 549; and Enebeke v. Enekebe (1964) 1 All NLR 102. The question as to when an appellate court could rightly interfere with the exercise of a lower court’s discretion, therefore, will depend on the facts in every particular case. Thus, for example, in George v. Dominion Flour Mills Ltd. (1963) 1 SCNLR 117; (1963) 1 All NLR 71, it was held that in exercising his discretionary power to give leave to amend, the trial Judge should have regard to the rule audi alteram partem; but that the Judge was right in the case in refusing such leave after the plaintiff had concluded his case since there would be no opportunity for the plaintiff to be heard on the new points sought to be introduced. The facts in the present case are to some extent similar to those in the George v. Dominion Flour Mills Ltd., (supra) in that the respondent, as applicant, had completed its final address and the appellant had commenced his when the application was made.

But there are additional facts in the instant case which create a clear distinction between the present case and the George v. Dominion Flour Mills case (supra). Among the new facts placed before the lower court is that the respondent was in fact not served with the court processes in the case before the trial that resulted in the judgment sought to be enforced. Similarly, it was revealed that the guarantee bond relied on in making the respondent liable was unilaterally amended and there was also a possibility that no loan was in fact granted to Isaac Oviasu, now deceased, the repayment of which the respondent guaranteed in the bond said to have been unilaterally altered. These facts are strong enough to justify any fair-minded tribunal exercising its discretion in favour of any applicant. I therefore believe that the learned trial Judge acted properly in granting the application to reopen the applicant’s case. I believe that the rule audi alteram partem was also not breached because it was also open to the appellant to react to the new facts in any form it wanted, including starting his final address disrupted all over. As it was not on record that the court refused any request from him to either react to the new facts introduced or that he was not allowed to start his final address disrupted de novo there is therefore no evidence upon which one can act on in holding that the audi alteram partem rule had been breached in the appellant’s case. There is therefore totally no reason or justification for this court tampering with the lower court’s exercise of its discretionary power in the instant case.

The only point yet to be resolved is whether the learned trial Judge was right in holding that the respondent was not served with the court processes before the trial before Omage J. took place. Again the finding of fact made by the learned trial Judge was premised on the facts placed before the court. The respondent denied in the better and further affidavit that it was ever served with the court processes. It was also disclosed that as at the time of the purported service claimed by the appellant, the entire operation of the respondent company was grounded as a result of an industrial unrest embarked on by the company’s work force and that the service referred to in the motion on notice was in respect of another case, hence the need to depose to the better and further affidavit to correct the misinformation.

The law is settled that a court is only competent to adjudicate in the case before it when, among others, the action is initiated by due process of law and any condition precedent to the exercise of its jurisdiction has been fulfilled: See Madukolu & Ors. v. Nkemdilim (1962) 2 SCNLR 341, (1962) 1 All NLR 587. One of the conditions precedent to the exercise of a court’s jurisdiction which must be fulfilled is, in my view, that all the parties in the case must be duly served with the relevant court processes. Any failure to comply with any of the conditions precedent to the exercise of jurisdiction would amount to a defect in the competence of the court and such would render the entire proceedings before the court a nullity: See Madukolu & Ors. v. Nkemdilim, (supra). As the court has rightly found that the respondent was not served with the court processes before the trial leading to the judgment sought to be enforced was embarked upon, it followed that the entire proceeding before Omage J. was a nullity. The lower court was therefore right in setting aside the judgment and the garnishee order made for the enforcement of the said judgment.

In conclusion therefore and for the reasons set out above, I hold that there is totally no merit in the entire appeal. I accordingly dismiss it with N5,000.00 costs in favour of the respondent.

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Other Citations: (2000)LCN/0813(CA)