First Bank Of Nigeria Plc. Vs Kayode Abraham (2008)
LAWGLOBAL HUB Lead Judgment Report
O. ADEREMI, J.S.C.
This is an appeal against the judgment of the Court of Appeal (Lagos Division) delivered on the 13th of June, 2002, in appeal No. CA/L/275/95: First Bank of Nigeria Plc. Versus Kayode Abraham. The appellant who was also the appellant in the court below and the plaintiff in the trial court had taken out a Writ of Summons in the trial court claiming against the respondent before this court and who was then the defendant in the trial court, as follows:
The plaintiff’s claim against the defendant is for recovery of the sums of $644,382.16 DR. i.e. (N6,416,821.99) and $499,786.15 DR. (N4,976,920.46) in Loan Accounts Nos. 5814903420 and 5814904160 respectively and 64,816.59 pounds i.e. (N1,109,672.98) in Loan Account No.7114902420 as at 31st October,1991, totaling in all N12,503,415.43 DR. being the total indebtedness owed to the plaintiff by the defendant as a result of credit facilities by way of loans granted to the defendant by the plaintiff sometimes in 1988 which indebtedness the defendant has failed and/or refused to settle despite repeated demands.
The plaintiff claims interest on the said sum of N12,503,415.43 DR at the rate of 21% per annum from 31st October, 1991, until the final payment of the debt.
The final pleadings filed and exchanged between the parties are Statement of Claim by the plaintiff/appellant and by the leave of court, an Amended Statement of Defence by the defendant/respondent. The plaintiff/appellant had, upon the entering of appearance by the defendant, filed an application for summary judgment under Order 10 Rules 1 and 2 of the High Court of Lagos State (Civil Procedure) Rules,1972. The defendant/respondent filed a Preliminary Objection together with a counter-affidavit against the plaintiff’s application for summary judgment. In his Preliminary Objection, the defendant/respondent raised the issue of jurisdiction contending that the High Court of Lagos State lacked jurisdiction to entertain the suit adding that the suit ought to be taken in England where the loan was obtained by the defendant/respondent at the London Branch of the appellant bank.The learned trial Judge who heard the Preliminary Objection upheld it and thus declined jurisdiction in the matter.
In so declining jurisdiction, the trial Judge had reasoned thus:
Even though the defendant is now within the jurisdiction of this court, it is clear that he negotiated the loans and obtained them (sic) in the United Kingdom where his account with the London Branch of the bank is designated Resident Account. I believe that the loans will be governed by the United Kingdom Laws particularly as they were loans calculated in the United Kingdom currency and United States dollars.
I am in no doubt that action for the recovery of the loans ought to be properly commenced in the United Kingdom where the loans were obtained. Any judgment obtained in that country can then be registered in this jurisdiction for the purpose of enforcement.
Consequent upon the Ruling of the trial court, the plaintiff/appellant filed an appeal against that Ruling to the court below. In dismissing the appeal to it, the court below held inter alia:
It is a well established principle of International Law that a Nation State can only validly make laws covering its own territory. The Rules of Court made under an enabling law of Lagos State of Nigeria cannot have effect over transactions conducted in England and governed by English Law. Indeed, the Rules of a State High Court do not govern transactions conducted in another State within Nigeria. It is therefore a fundamental flaw in the argument of appellant’s counsel to accept that a banking transaction conducted in London is subject to the Lagos State High Court rules as to the court in which a suit could be brought.
To allow the appellant to enforce in Nigeria a loan transaction in London is to enable the appellant to circumvent the provisions of Exchange Control Act, Cap. 113, Laws of the Federation of Nigeria,1990.
The lower court not only declined jurisdiction but offered to the appellant advice as to the proper method to approach its claim.
I entirely agree with the reasoning of the court below. This appeal lacks merit.
Dissatisfied with the judgment of the court below, the appellant has appealed to this court per a notice of appeal dated 12th September, 2002, which has incorporated into it five (5) grounds. Distilled therefrom, for determination by this court, are four issues which, as set out in the appellant’s Brief of Argument filed on the 6th of February, 2004, are in the following terms:
- Whether the court below was right to have assumed that the repayment of the loan was to be in London to preclude any recovery action in Nigeria.
- Whether Order 1A Rule 3 of the High Court of Lagos Civil Procedure Rules,1972, confers jurisdiction on the court below to adjudicate in this suit especially when the court found for (sic) a fact that the respondent was within jurisdiction in the absence of any agreement to show that the hand (sic) parities agreed that English law should apply to the transaction to the exclusion of Nigerian law
- Whether the court below was right to have raised the issue of the Exchange Control Act, Cap. 113. Laws of the Federation of Nigeria suo motu without calling on the parties to address it and subsequently held that the recovery action of the appellant in Nigeria if allowed will circumvent the provision of the Exchange Control Act even when parties were not called upon to address the court on this issue
- Whether the fact, that the respondent’s account at the appellant’s London Branch at which the loan was granted in foreign currency was tagged resident account is capable of vesting jurisdiction to adjudicate in the matter solely in English Courts under English lawWhen this appeal came before us on the 22nd of September,2008, for argument, Mr. Makinde, learned counsel for the appellant referred to, adopted and relied on the appellant’s Brief of Argument dated 6th of February, 2008, and filed the same date and the appellant’s Reply Brief filed on 14th March, 2002. He (learned counsel) urged the court to invoke the provisions of Section 22 of the Supreme Court Act; citing the decision of this court in Peter Obi v. INEC (2007) 7 S.C. 268; (2007) 11 NWLR (Pt.1046) 560, adding that there was no dispute as to the debt owed; he finally urged that the appeal be allowed. Mr. Oyesanya, learned counsel for the respondent for his part, first raised a Preliminary Objection as to the grounds of appeal contained on the notice and submitted that, at best, they are all mixed law and facts for which it is mandatory that the leave of court should be obtained before they are filed, there being no leave of court obtained in the instant appeal, he urged that these grounds of appeal be struck out as being incompetent. On the merit of the appeal, learned counsel referred to, adopted and relied on his client’s Brief of Argument filed on the 5th of February,2002, and urged this court to dismiss the appeal.
I shall start the discussion of this appeal by first treating the Preliminary Objection as it relates to the grounds of appeal i.e. Grounds 1 to 4 which the respondent contends that, at best, they are grounds of mixed law and facts. The grounds of appeal complained of are as follows:
(1) Ground 1
The Court of Appeal erred in law when it held that the fact that the contract took place in London, that performance was to be in London and that the repayment must be in London:
Particulars of Error
The respondent, a Nigerian who obtained a loan from the appellant a Nigerian bank with a branch in London was found to be resident in Nigeria as at the time the action for recovery of the loan was commenced against him by the appellant by the trial Judge.
There was no evidence or document upon which the Court of Appeal could have relied upon to come to the conclusion that the repayment must be in London but the Court of Appeal in its reasoning, assumed that repayment must be in London even though there was no such averment in the pleadings in the record before the court below. There was nothing on record at the court below to assume the place of performance of the contract as done by the Court of Appeal.
Ground 2
The Court of Appeal erred in law when it held that the Lagos State High Court Civil Procedure Rules particularly Order 1 Rules 3 and 4,1972, cannot have effect over transaction conducted in England and governed by English Law:
Particulars of Error
There is nothing on record at the court below upon which the court could have come to the conclusion that English law was agreed (sic) by the parties to be the law to govern the transaction.
Ground 3
The Court of Appeal erred in law when it held that to allow the appellant to enforce a loan transaction in London is to enable the appellant to circumvent the provisions of Exchange Control Act, Cap. 113, Laws of the Federation of Nigeria, 1990.
Particulars of Error
The learned trial Justice of Court of Appeal failed to state what section of the Exchange Control will be circumvented if the appellant is allowed to enforce the loan recovery in Nigeria.
Ground 4
The Court of Appeal erred in law when it upheld the reasoning of the trial court that the fact that the respondent (sic) account was tagged Resident Account makes the transaction subject to United Kingdom Laws particularly as they were loans calculated in the United Kingdom currency and United States dollars:
Particulars of Error
The reasoning of the learned trial Judge who found that the respondent was within jurisdiction but for the fact that the loan was calculated in the United Kingdom currency and United States dollars on an account tagged Resident Account makes the transaction subject to United Kingdom Law cannot be supported by any evidence from the record at the court below.
The court below jettisoned the provisions of Order 1A Rules 3 and 4 of the High Court Civil Procedure Rules, which clearly confers jurisdiction on the trial court and the court below for recovery action to be commenced in United Kingdom and adjournment of which can be registered in Nigeria.
The important consideration in the determination of the nature of a ground of appeal is not the form of the ground rather it is the question it raises. Indeed, a ground of appeal questioning the exercise of discretion by a lower court is a ground not of law, but, at best, of mixed law and fact. But the crucial or fundamental issue raised in this appeal is whether the trial court (Lagos High Court) has the jurisdiction to entertain the suit. And,it no longer admits of any argument that in determining whether a court has the jurisdiction or the legal power to entertain a claim or suit, it is only to the claim of the plaintiff that a resort must be had, see Adeyemi & Ors. v. Opeyori (1976) 9 & 10 S.C. 31; (1976) 9-10 S.C. (Reprint) 18 , I have quoted the claim supra. Suffice it to say that the factual content of that claim generates no controversy between the parties. I have had a careful examination of the four grounds of appeal and I am clear in my mind that they all relate to an alleged misunderstanding by the lower court of the law or a misapplication of the law to the accepted factual contents of the claims as reproduced supra. Therefore, where, as in the instant case, the grounds of appeal reveal a misunderstanding by the court below or a misapplication of the law to the settled and admitted factual contents of the claim such grounds are pure grounds of law. See (1) Ogbechie v. Onochie (1986) 2 Nwlr (Pt.23) 484, (2) Metal Construction (W. A.) Ltd. v. Migliore (1990) 2 S.C. 33; (1990) 1 Nwlr (Pt.126) 299 and (3) P. N. Udoh Trading Company Ltd. v. Sunday Abere (2001) 11 Nwlr (Pt.723) 114. The Preliminary Objection is consequently overruled. All the four grounds of appeal are pure grounds of law and they are competent. Now, to the merit of the appeal, it is clear from the pleadings that the defendant/respondent took a loan from the London branch of the plaintiff/appellant. In paragraphs 1, 2, 5 and 6 of its Statement of Claim dated 18th August,1992, the plaintiff/appellant avers thus:
Paragraph 1:
The plaintiff is a commercial bank duly licensed and registered and carries on business both at its registered office at 35, Marina, Lagos and overseas and throughout the Federal Republic of Nigeria.
Paragraph 2:
The defendant who is a Nigerian businessman ordinarily resides and carries on business at No.7, Adeniran Ogunsanya Street, Surulere Lagos within the jurisdiction of this Honourable court.
Paragraph 5:
Plaintiff avers that the purpose of the facilities was to assist the defendant meet up with some financial expenses in the lifting of crude oil from Nigeria to Florida Petroleum Corporation in the USA.
Paragraph 6:
Plaintiff further avers that the credit facilities granted were utilized by the defendant for the purpose aforesaid.
The above averments were admitted by the defendant/respondent when, in paragraph 1 of his Amended Statement of Defence dated 17th March, 1994, he averred thus:
The defendant admits paragraphs 1, 2, 5, and 6.
It is common ground between the parties that the defendant/respondent took loan from the plaintiff/appellant at its London Branch of the bank; that as at the time the plaintiff/appellant sought to recover the debt, the defendant/respondent was residing and carrying on business at No.7, Adeniran Ogunsanya Street, Surulere, Lagos, a place within jurisdiction. Equally, the registered office of the plaintiff/appellant was and still at 35, Marina Lagos. The plaintiff/appellant (the bank) is the creditor while the defendant/respondent is the debtor. The general principle must not be lost sight of that money is paid to a creditor by a debtor where the creditor is; see the old English case of The Elder (1893) Probate 119. The question may be asked: What is the meaning of jurisdiction By judicial authorities, jurisdiction is the authority by which a court has to decide matters that are laid before it for litigation or to take cognizance of matters presented in a formal way for its decision. Let it be said that the limits of this authority are, by practice, imposed by statute or law under which the court is constituted. It may be extended or restricted by similar means. If no restriction is imposed, the jurisdiction is said to be unlimited. In the case of National Bank (Nig.) Ltd. & Anor. v. Shoyoye & Anor. (1977) 5 S.C. (Reprint) 110, a Preliminary Objection to the jurisdiction of the High Court, Abeokuta (then in Western State) to hear the suit was taken. The main grounds of the objection were: that the 1st plaintiff/appellant had their headquarters in Lagos. The overdraft, the subject matter of the suit, was granted by the 1st plaintiff/appellant to the defendant in Lagos though it was later assigned to the 2nd plaintiff/appellant with their headquarters in Ibadan, then in Western State. The defendants were resident and were served in Lagos though the writ was addressed for service on the defendant at Abeokuta Motor Road, Ifo, then in Western State. An objection, by way of Oral Preliminary Objection before the commencement of the trial was taken. The Preliminary Objection was overruled by the learned trial Judge. This decision was overruled by the then Western State Court of Appeal. This court (Supreme Court) in holding that the then Western State Court of Appeal erred in its approach to the question before it and consequently erred in its decision, said at page 118 thus:
The place of instituting and of trials of suit is however regulated by Order 6 of the High Court Civil Procedure Rules and this action being for the payment of debt (an overdraft assigned by the 1st to the 2nd plaintiff) the relevant rule is Rule 4 Order 6. This rule deals with suits arising out of contract, and it reads:
All suits for specific performance or upon the breach of any contract may be commenced and determined in the judicial division in which such contract ought to have been performed or in which the defendant resides.
It seems to me that the above rule is a confirmation of the saying that the debt follows the debtor. If a debtor is allowed to escape justice in terms of a court of law located where he presently resides being unable to adjudicate in a simple case of debt for just the reason that he has relocated from the place where he took the loan and which is the seat of his creditor, gross injustice will rear its head, and this will not be in the interest of healthy growth of business transaction. To forestall the likelihood of this unfortunate incident Rules of court regulating place of instituting and trial of suit of this nature (suits upon contract) have always taken the same form when newly promulgated or amended under Civilian Regime or Military Regime. Order 2 Rule 3 of the High Court of Lagos State (Uniform Civil Procedure) Rules, Cap. 52, Laws of Lagos State promulgated under Edict No. 1 of 1988 with side note:
All suits for the specific performance, or upon the breach of any contract, may be commenced and determined in the judicial division in which such contract ought to have been performed or in which the defendant resides.
Under the Uniform Rules, Order 10 Rule 3 which relates to suits upon contract is in pari materia with the provisions quoted above. Indeed, all subsequent rules of Lagos State relating to suit upon contract are equally similar to the above quoted provision. Going by the admitted averment in the pleadings the loans were taken by the defendant/respondent at the London branch of the plaintiff/appellant between 1988 and 1991 and it was thereafter that the defendant/respondent relocated to Lagos. The Rule of Court applicable to the suit is Order 2 Rule 3 of the High Court of Lagos State (Uniform Civil Procedure) Rules, reproduced above. Interpreting the above rule, this court in Arjay Ltd. v. Airline Management Support Ltd. (2003) 2-3 S.C. 1, said that an action for breach of contract can be commenced in any of the following places: i.e.
(1) where the contract was entered into.
(2) where the contract was performed or was to be performed, and;
(3) where the defendant resides or does business.
Let me here say that Rules of Court are made to be followed. They are there to regulate matters in court and help parties to present their case within a procedure for the purpose of a fair and quick trial. Indeed, it is the strict compliance with these Rules of Court that make for quicker administration of justice. I have had a careful examination of the provisions of Exchange Control Act, Cap. 113, Laws of the Federation of Nigeria,1990, I fail to see how any of such provisions was or capable of being breached by instituting the suit in Lagos, a place where the defendant/respondent resides.
Consequently, the four issues indentified by the appellant in its Brief of Argument are hereby resolved in its favour. The only issue raised by the respondent in his Brief is hereby resolved against him.
It is my judgment that this appeal is meritorious. It is hereby allowed. The judgment of the court below and the Ruling of the trial court are hereby set aside. It is further ordered that the suit be remitted to the Chief Judge of Lagos for re-assignment to another Judge for trial of the suit to commence. There shall be costs of this appeal which I assess at N50, 000.00 (Fifty Thousand Naira Only) in favour of the appellant but against the respondent.
SC.397/2002