Fortune International Bank Plc. & Ors V. City Express Bank Ltd (2012)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

JOHN INYANG OKORO, J.C.A (Delivering the Leading Judgment)

This appeal is against the Ruling of the Federal High Court Lagos in Suit No. FHC/L/CS/58/02 delivered on 29th July, 2002 by A. A. Gumel, J. wherein the learned trial Judge entered Judgment in favour of the Respondent herein as per its claim dated 26th June, 2002. A synopsis of the facts giving birth to this appeal will suffice.

The Respondent/cross Appellant as plaintiff in the trial court, granted a Term Loan Facility of N500, 000,000.00 (five hundred million naira) through its offer letter dated 12th January, 2001 to the 2nd Appellant who accepted and utilized the same as encapsulated on pages 6 – 10 of the record of appeal. The 1st Appellant which shares the same ownership structure with the 2nd Appellant, further to its Board Resolution, executed a corporate Guarantee for the said facility in favour of the Respondent/cross Appellant.

The 3rd, 4th and 5th Appellants also executed personal Guarantees in favour of the Respondent herein. Owing to the failure of the 2nd Appellant to honour its obligation i.e., the payment of agreed monthly rentals and further failure on the part of the 3rd – 5th Appellants, the Respondent/cross Appellant called in the corporate Guarantee of the Appellants who also defaulted in their, obligation.

With this state of affairs, the Respondent on 21/1/02 instituted an action by way of originating summons and claimed inter alia the sum of N254, 836,238.23 (two hundred and fifty four million, eight hundred and thirty six thousand, two hundred and thirty eight naira, twenty three kobo) being the 1st – 5th Appellants’ indebtedness to the Respondent/cross Appellant as at 15th January, 2002.

In a bid to secure the money, the court below granted an ex-parte application against the Central Bank of Nigeria, ordering it to set aside the said amount standing to the credit of the 1st Appellant. Upon service of the processes on the 1st – 5th Appellants, they filed a preliminary objection on 14/2/02 challenging the jurisdiction of the court and on that same date the court below extended the life span of the exparte order.

On 6/3/02, the 1st Appellant issued its cheque No. 000746370 in the sum of N259,796,792.50 (two hundred and fifty nine million, seven hundred and eighty six thousand, seven hundred and ninety two naira, fifty kobo) an amount over and above the sum claimed by the Respondent in its Originating Summons. The Respondent in acknowledging receipt of the said amount in a letter on page 471 of the record of appeal, reminded the Appellants that it was still being owed the sum of N50, 555,027.70 (fifty million, five hundred and fifty five thousand, twenty seven naira, seventy kobo) “being cumulative sum for interest, default and other charges”.

In consequence thereof, the Respondent/cross Appellant brought an application to amend the originating summons to reflect the sum owing, which it said ought to have been N310, 119,820.29 (three hundred and ten million, one hundred and nineteen thousand, eight hundred and twenty naira, twenty three kobo) as at the time the suit was filed originally and having paid the sum of N259,786,792.50 (two hundred and fifty nine million, seven hundred and eight six thousand, seven hundred and ninety two naira; fifty kobo), the unpaid balance was then the sum of N50, 021,114.94 (fifty million, twenty one thousand, one hundred and fourteen naira, ninety four kobo). On 27/5/02 when the motion for amendment came up for hearing, the court below made an order that the parties should file pleadings afresh in the new matter.

The Respondent/cross Appellant then filed a writ of summons with a statement of claim- The Respondent also filed a Motion Ex-parte dated 20/6/03 praying the court to enter the suit on the undefended list and the suit was accordingly entered on the undefended list. On receipt of this process, the Appellants, rather than file Notice of Intention to defend the suit, filed another preliminary objection challenging the Jurisdiction of the court. On 29/7/02, the learned trial Judge struck out the said preliminary objection for being an abuse of court process. He then proceeded to enter Judgment for the Respondent/cross Appellant in terms of his claim based on the undefended list procedure since the Appellants did not file Notice of Intention to defend.

Aggrieved by the Ruling of the court below, the Appellants filed Notice of Appeal on 1st August, 2002 which Notice contains five Grounds of Appeal. Also, by the leave of this court the Appellants filed one additional Ground of Appeal on 4th June, 2004. Out of the six Grounds of Appeal, the learned counsel for the Appellants has formulated three issues for the determination of this appeal. The issues are:-

“1. Whether or not the learned trial Judge was right to have awarded Judgment against the Appellants under an undefended list procedure in an action commenced by way of Originating Summons;

2. Whether or not an undefended list procedure under order 24 Rule 1 of the Federal High court (Civil Procedure) Rules 2000 can be used by the Respondent to recover legal charges, default charges and interest charges from the Appellant all of which are in the form of general damages without any evidence;
3. Whether or not the Respondent claim is caught by Doctrine of Estopel, having by his words or conduct made unambiguous promise or assurance to the Appellant which is intended to affect the relations between the Appellant and the Respondent and the Appellant having acted upon the said assurance altering his position to his detriment”.

On page 10 of the brief settled by Oluwakemi Balogun Esq. on behalf of the Respondent, the three issues distilled by the Appellants are repeated. Although the learned counsel for the Respondent did not expressly say they are adopting those issues, it may be safe to conclude that the Respondent has adopted the three issues distilled by the Appellants. I shall therefore determine this appeal based on the three issues distilled by the Appellants.

On issue one, the learned counsel for the Appellants, E. A. Oyebanji, Esq. contended that the Respondent failed to comply with the order of the lower court made on 27/5/02 which ordered it to file a statement of claim and serve same on the Appellants who should file their statement of Defence accordingly. That rather than comply with the said order, the Respondent filed writ of summons along with a statement of claim. He submitted that the filing of the writ of summons by the Respondent was without a valid order of the court and consequently the Judgment given in pursuance of such a writ is bad and invalid in law being null and void. He relies on the case of UAC v. Macfoy (1961) 3 All ER 1169.

Secondly, he submitted that the Respondent super imposed the writ of summons on the originating summons in order to enable it bring the suit under the undefended list procedure. He concluded argument on this issue by stating as follows:-