Intercontinental Bank Plc. V. Hilman & Bros Water Engineering Services Nigeria Limited (2013)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

HARUNA SIMON TSAMMANI, J.C.A. (Delivering the Leading Judgment)

This appeal is against the judgment of the Abia State High Court, Ukwa Judicial Division, presided over by Hon. Justice C.O Onyeabo. The judgment was delivered on the 13th day of May, 2010, wherein judgment was entered in favour of the Respondent against the Appellant for the sum of thirteen Million, seven hundred and thirty-four thousand Naira (N13,734,000.00) only plus interest, being the amount said to have been guaranteed by the Appellant in favour of the 1st and 2nd Defendants in the court below, but who are not parties to this appeal.

The Respondent as Plaintiff at the trial Court had taken out a writ of summons against the Appellant (who was 3rd Defendant on the writ), and Bau Consult & Producing Nig. Ltd. & Engineer Chris Sowa (who were (1st and 2nd Defendants), on the un-defended list pursuant to Order 23 rule 1 of the Abia State High Court (Civil Procedure) Rules, 2001. The Suit which was commenced before Hon. Justice I.N. Akomas was later transferred to Hon. Justice C.O. Onyeabo.

The 1st and 2nd Defendants entered appearance through Eva Ozioko; Esq. of A. O. Arulogun & Co, vide Memorandum of Appearance dated the 16/7/2007. They then filed a Preliminary Objection dated 16/7/2007. The 3rd Defendant (now Appellant’s) Memorandum of appearance is dated the 09/7/2007 and filed the 26/7/2007.

On the return date, the 1st and 2nd Defendants did not put up any appearance but there was evidence that they were served through Counsel who refused to accept service on grounds that he was no longer in the matter. However, there was no formal withdrawal of appearance by counsel nor was there any notice of change of counsel by the 1st and 2nd Defendants, but there was evidence that the said 1st and 2nd Defendants were subsequently served by substituted means. Consequently, the Notice of Preliminary objection filed by them was struck out.

The 3rd Defendant/Appellant was then granted an extension of time to file a Notice of intention to file a defence. Upon a consideration of the affidavit of the Plaintiff/Respondent and that of the 3rd Defendant/Appellant, the learned trial Judge transferred the matter to the general cause list for hearing. The Plaintiff/Respondent and the 3rd Defendant/Appellant filed pleadings, save for the 1st and 2nd Defendants who ceased appearance in the matter. By the Plaintiff/Respondent’s statement of claim, the claim against the Defendants jointly and severally was as follows:

(a) AN ORDER for the sum of N13,734,000.00 (Thirteen Million, Seven Hundred and thirty-four Thousand Naira) to be paid mandatorily to the Plaintiff being the value of the job executed for the 1st and 2nd Defendants at the Obohia, Umunteke-Mkporobe Asa Project site at the Ukwa West Local Government Area, Abia State.

(b) 10% INTEREST on the said sum calculated from 10th December, 2005 that is 60 days from July 15, 2005 when the job was certified due for payment.

(c) 5% INTEREST on the judgment debt above the Central Bank of Nigeria lending rate from the date of judgment until full payment.

It is obvious therefore that issues were only joined as between the Plaintiff/Respondent and the 3rd Defendant/Appellant before the trial court. The 1st and 2nd Defendants did not therefore answer to the Plaintiff/Respondent’s claims against them despite prove of service on them. At the hearing, a witness each testified for the Appellant and the Respondent. The Plaintiff/Respondent’s sole witness is Mr. Boniface Njoku, the Managing Director, while that of the 3rd Defendant/Appellant’s witness who testified as the D.W.1 is one Uchenna Iwueke, the Relationship Manager of the Bank.

The Plaintiff/Respondent’s case at the lower Court as stated by P.W.1 is that, the 1st and 2nd Defendants offered the Respondent a contract for the construction of 3,000 metres of drainage or drain line at a site in Aba, Obohia-Umunteke, Mkporobe. That in order to compel the Respondent to move to site, the 3rd Defendant/Appellant issued her a Letter of Comfort which is equivalent in the industry as guaranteed payment ability of the 1st and 2nd Defendants upon performance by the contractor (Respondent). He stated that the Original Letter of Comfort was missing, so he tendered a photo copy which was admitted in evidence as exhibit “A”. A copy of the Contract Agreement was also tendered and admitted in evidence as Exhibit “B”. That she was not mobilized for the job for which the contract was awarded, so she borrowed from the Central Bank of Nigeria, Ilorin Branch, Staff Welfare Fund on a friendly revolving loan which attracted a very high interest rate. The Respondent stated further that he completed the job one hundred percent; thus performing its own obligation under the contract, and a certificate of completion to the tune of 1,962 metres of completed drain was issued to him by the 1st and 2nd Defendants, and which certificate is in evidence as Exhibit “C.” That the Certificate was for the payment of N13, 734,000.00 being the value of the job completed.

It is also the case of the Respondent that, by the terms of the contract, she was to be paid 60 (sixty) days from the date the Certificate was issued, but that he was not paid within the 60 days or any date thereafter. That when the 1st and 2nd Defendants refused to pay, he went to the 3rd Defendant/Appellant and met their representative, one Mr. Thomas, but Mr. Thomas rebuffed him with ignominy. That the attitude of the 1st and 2nd Defendants made him to petition the Economic and Financial Crimes Commission for assistance, but he was advised to either report to the police or go to court. That he again Petitioned the police at the Zonal police Headquarters, Zone 9, Umuahia, where of the 1st and 2nd Defendants were arrested, and they pleaded to be allowed time to pay on or before the 15/2/2001, but they failed to honour their promise. He went on to state that, realizing that the 1st and 2nd Defendants were not going to pay, he approached the 3rd Defendant/Appellant with the Letter of Comfort for payment in accordance with the terms of the contract, but the Appellant failed to honour the contract on the ground that the Respondent had rejected the Letter of Comfort and returned same. The Respondent denied rejecting the Letter of Comfort in place of a letter of Guarantee, and insisted that the Appellant pay the sum claimed in accordance with the terms of the contract.

The Appellant stated its case through the D.W.1. In his written deposition at p.120 of the record of appeal, the D.W.1 stated that, the 3rd Defendant/Appellant initially issued a Letter of Comfort to the Respondent with respect to the contract between it (Respondent) and the 1st and 2nd Defendant, but that it later retrieved and cancelled same, when the Respondent rejected it, on the ground that it preferred a letter of guarantee. In all, the Appellant had denied liability on the ground that she was neither a party to the contract between the Respondent and 1st & 2nd Defendants, nor did it enter into a contract with the Respondent to pay the Respondent for any services rendered to the 1st & 2nd Defendants. That the Respondent having rejected and returned the original copy of the letter of comfort, the Appellant is absolved of any liability thereon as it never provided the Respondent with any Advance Bank Guarantee.

After reviewing and appraising the evidence led by the Respondent and the Appellant, the learned trial Judge believed the Respondent’s case, and entered judgment granting all the claims made by the Respondent. The Appellant being dissatisfied with the judgment filed this appeal. The Notice of Appeal which is contained at page 160 of the records was dated the 17/5/2010 and filed the 18/5/2010. It consists of only one ground of appeal as follows: