General Securities and Finance Company Limited. V. Lawrence C. Obiekezie (1997)

LawGlobal-Hub Lead Judgment Report

UBAEZONU, J.C.A.

By a claim dated 22nd May 1995 the plaintiff (hereinafter referred to as “the respondent”) filed a suit on the Undefended List against the defendant (hereinafter referred to as “the appellant”) claiming as follows:

“(a) The sum of one thousand, five hundred U.S. Dollars ($1,500.00) or its naira equivalent being the sum the defendant had and received from the plaintiff on 18/5/92 for exchange to naira which said transaction the defendant failed, refused and/or neglected to perfect despite repeated and several demands.

(d) INTEREST on the said sum at the rate of 21% per annum with monthly rates from 1st June, 1992 until judgment and thereafter at the rate of 5% per annum until final liquidation of the judgment debt and costs.”

The claim was accompanied by an affidavit.

The appellant in accordance with the Rules of the Anambra State High Court applicable to Enugu State filed a Notice of Intention to defend together with an affidavit setting out its defence. The matter came up for hearing on the 26th day of June 1995 before Elechi J. of the Enugu High Court. Having read the affidavit in support of the claim and the affidavit in support of the Notice of Intention to defend and having taken addresses from counsel on both sides the learned trial Judge in a reserved ruling on the 31st day of July 1995 dismissed the notice of intention to defend and thereupon gave judgment for the respondent on his claim. Dissatisfied with the said ruling and judgment, the appellant has appealed to this court on four grounds of appeal and has formulated three issues for determination as follows:-

“1. Whether the learned trial Judge was not in error in holding that the defendant had not disclosed a good triable issue to warrant its being let in to defend the suit pursuant to Order 24 Rule 9 (2) of the High Court Rules, 1988 of Anambra State (applicable to Enugu State).

2. Whether the learned trial Judge was not in error to have entered judgment for the plaintiff as claimed in the Writ of Summons and the claim attached thereto.
3. Whether the ruling and the subsequent judgment of the trial Judge were not against the weight of evidence disclosed by the affidavit in support of the appellant’s Notice of Intention to defend the suit.”

Arguing the issue No.1 learned counsel for the appellant submits that the learned trial Judge was wrong to hold that the appellant’s Notice of Intention to defend did not disclose a defence on the merits when sufficient materials to underscore the triable issues were clearly placed before him by the uncontradicted and unchallenged affidavit setting out the grounds of the appellant’s defence. Counsel refers to paragraphs 6, 7 and 8 of the affidavit in support of the appellant’s Notice of Intention to defend and submits that they are explanatory enough as to the nature of the transaction between the parties. He contends that value can only be given when the said cheque has been paid by the paying banker. There is no evidence, counsel submits, that the said cheque has been presented to the paying banker and value given thereon. He refers to Lewis Peat v. Akhimien (1976) 7 SC 157 at 164.

It is submitted for the appellant that the said cheque was accepted by the appellant purely for collection. It was sent out the same day to the correspondent Bank. The respondent, counsel submits, was duly informed that the cheque got lost in transit on its way back to Nigeria because of a change in the policy of the paying bank of the appellant. The respondent was informed and advised to write to the drawers of the cheque to countermand same. In addition, the appellant took upon itself to write the issuers of the cheque to alert them of the loss of the cheque. Counsel refers to Sheldon’s Practice & Law of Banking by C.B. Drover and R.W. Bossy 10th edition, page 12.

On lost instruments, Counsel refers to S. 69 of the Bills of Exchanges Act Cap 35 Laws of the Federation or Nigeria 1990. He refers also to the Law & Practice of Banking by J. Milner Holden, vol. 1. From all the above, counsel argues, it is clear that a cheque per se is not money but only converted to money when presented and paid. He submits that the learned trial Judge failed to exercise his discretion judicially and judiciously given the facts deposed to in the appellant’s affidavit in support of the Notice of Intention to defend. The relevant paragraphs not having been denied are deemed to have been admitted.

It is submitted that the reliefs sought by the respondent are misconceived since there is no evidence that there was any loss of money suffered by the respondent or the drawer of the cheque. In accordance with the Nigerian Bills of Exchange Act the appellant stated in its affidavit in support of the Notice of Intention of defend that it will indemnify the respondent if the cheque has gone into wrong hands and value given thereon. See S.70 Bills of Exchange Act Cap. 35 Laws of the Federation of Nigeria 1990. It is conceded that an appellate court will not ordinarily interfere with the exercise of discretion by a lower court simply because faced with a similar application it would have exercised its discretion differently. It is however argued that the situation is different in this case. The finding of the learned trial Judge that there is no merit in the defenee, it is submitted, is without regard to the unchallenged affidavit of the appellant in support of its Notice of Intention to defend. There must be good reason for an exercise of discretion one way or another- refers to Wayne (West Africa) Ltd. v. Ekwunife (1989) 5 NWLR (Pt. 122) 422; (1989) 12 SCNJ 99 at 128. Counsel submits that the trial Judge was under a misconception as to the true import of the expression “cheque for collection” as well as when a cheque becomes money.

Counsel refers to the following cases:

“(1) Re Owen Deed; Owen v. Inland Revenue Commissioner (1949) All E.R.901.

(2) Re Hone (A Bankrupt) Ex Parte the Trustee v. Kesington Borough (1951) Ch 85 at 88 – 89.”