International Trust Bank Plc. V. Kautal Hairu Company Ltd. (2005)

LawGlobal-Hub Lead Judgment Report

JEGA, J.C.A.

This is an appeal against the judgment of the Kano High Court of Justice, presided over by Hon. Justice Mohammed Umar Alkali in suit No. K/430/97, wherein he entered judgment on the undefended list against the appellant on 26th August, 1997, in the sum of $120,000.00 American dollars, plus 15% interest from 26th April, 1995 to the 26th August, 1997, and thereafter, interest at 10% court rate from the 26th August, 1997, until judgment debt is fully liquidated. The appellant is not satisfied with the judgment and has filed an appeal dated 30th September, 1999, after obtaining an extension of time from this court on the 29th September, 1999. There were two grounds of appeal on the original notice of appeal. This court on the 22nd April, 2002, granted leave to the appellant to amend its notice of appeal. The appellant has now filed and served the amended notice of appeal dated 25th April, 2002, which pursuant to the leave granted by this court inter alia now includes an additional ground of appeal and raised a fresh issue to wit whether the lower court had the jurisdiction to hear and give judgment in this case as an undefended list suit.

The fact of this case as can be seen from the totality of the records presented before this court inclusive of the filed briefs, are as follows: By a writ of summons dated the 18th July, 1997, the respondent herein filed an action against the appellant under the undefended suit. No leave of court was sought nor obtained to issue, enter or place the writ of summons on the undefended list. The parties then engaged in negotiating an out of court settlement, but while these negotiations were on, the respondent pressed for judgment before the court and this the court acceded to on the 26th August, 1997. In the course of the arguments on whether judgment on the undefended list should be entered against the appellant, counsel representing the appellant challenged the claim for interest and urged the court not to award that claim. The learned trial Judge failed to record or rule on the arguments of counsel, but in a ruling given on the 24th November, 1997, upon an application by counsel to the appellant that he corrects what he thought was a slip in the judgment of the lower court acknowledged that objection to award interest was indeed raised, but was neither recorded nor ruled upon by him for the reasons that he thought the parties will resolve that in their negotiations. The objections of counsel to the appellant to the award of interest have not been heard and determined one way or the other by the lower court.

Upon the three grounds of appeal as contained in the amended notice of appeal filed by the appellant dated the 25th day of April, 2002, learned Counsel for the appellant formulated three issues for determination. The issues are:

1. “Whether the lower court was right in awarding interest of 15% per annum on the sum of $120,000 American dollars from the 26th April, 1995 to the 26th August, 1997 in favour of the respondent.
2. Whether the appellant was not denied a fair hearing on the issue of interest claimed by the respondent having regard to the acknowledgement of the lower court that it failed to record and rule on behalf of the appellant.
3. Whether the entire judgment on the undefended list including the award of interest made by the Judge was not a nullity.”

The respondent also formulated three issues for determination. The issues are stated thus:

1. “Whether the respondent is entitled to claim interest against the appellant on a call deposit account at the rate of 15% on the sum of $120,000 US dollars and whether the lower court was right in awarding the said interest.
2. Whether the appellant is entitled to be heard in an undefended suit procedure where the appellant failed and refused to file any paper after being served with the writ of summons containing the claim of the respondent against it.
3. Whether the appellant can now raise a preliminary objection at an appellate stage in an undefended suit proceeding.”

When this appeal was heard on the 10th May, 2005, learned Counsel for the appellant, Mr. O.E.B. Offiong adopted the appellant’s brief of argument which was deemed filed by an order of this court on 21st May, 2002 and urged the court to allow the appeal.

Learned Counsel for the respondent Mr. R. A. Sadik adopted the respondent’s undated brief of argument filed pursuant to court order of extension of time dated 7th February, 2005 and urged the court to dismiss the appeal.

The issues formulated by the appellant and the respondent are not exactly dissimilar accordingly, the issues as formulated by the appellant would adequately disposed of this appeal.

Issue No.1 – Whether the lower court was right in awarding interest of 15% on the sum of $120,000 American dollars from the 26th April, 1996 to the 26th August, 1997, in favour of the respondent. On this issue, the learned Counsel for the appellant submits that the learned trial Judge was wrong to have awarded interest of 15% per annum on the sum of $120,000 to the respondent, when the respondent had neither established a right to such interest, nor did he make a sufficient endorsement of the claim for interest so as to raise the claim for determination, neither was there any proof of how they came about the right to interest and the rate of interest. It is further submitted for the appellant that it is now well settled that a claim of interest could only arise either (a) as a right or (b) where there is a power conferred by statute to do so in the exercise of the court’s discretion. It is further the contention of the appellant that a claim of interest as of right arises where it is contemplated by the agreement of the parties or under mercantile custom or under a principle of equity such as breach of a fiduciary relationship. Reference made to Reoben N. A. Ekwunife (Trading Under the name of and style of Gonglobe Associates and Company) v. Wayne (West Africa) Ltd. (1989) 5 NWLR (Pt.122) 422 at 445; Himma Merchants Ltd. v. Alhaji Inuwa Aliyu (1994) 5 NWLR (Pt.347) 667 at 676 G-H; Jos Steel Rolling Co. Ltd. v. Bernestieli (Nig.) Ltd. (1995) 8 NWLR (Pt.412) 201 at 208; Enahoro v. IBWA Ltd. (1991) 1 NCLR 180.

Learned Counsel for the appellant argues that even if interest is not claimed on the writ, but facts are pleaded on the statement of claim and evidence is given which show entitlement thereto, the court may if satisfied with the evidence, award the claim of interest. That adjudication on the plaintiff’s right to interest in such case is like any other issue in the case based on the evidence placed before the court. The evidence called at the trial will in such a case, establish the proper rate of interest and the date from which it should begin to run whether from the accrual of the cause of action or otherwise. Reference made to Saeby Jerstober Maskinfabrk A/S v. Olaogun Enterprises Ltd. (1999) 14 NWLR (Pt.637) 128 at 144 H – 145 A-B; Akpabuyo Local Govt. v. G.O. Duke (trading under the name & style of Giffobass Ventures) (2001) 7 NWLR (Pt.713) 557 at 573 H574 A – B. Counsel for the appellant urges us to uphold its complaint under issue 1 that the lower court erred in awarding the claim for interest to the respondent and to set aside the award and dismiss the claim.

In reply to the submissions on issue No.1, learned Counsel for the respondent submits that the nature of the contract between the appellant and the respondent herein was that of banker/customer relationship where the respondent deposited its money in the sum of $120,000.00 US dollars in a call deposit with the appellant. It is the contention of the respondent’s counsel that once a customer makes a deposit in a call deposit account, the customer is entitled to interest on the said deposit. Submits that the appellant and the respondent were in agreement that the said deposit by respondent was an investment with the appellant that this was confirmed by exhibits KHL3 and KHL4 attached to the claim of the respondent against the appellant before the lower court. Counsel further submits that the respondent was entitled to the interest claimed in this suit at the rate of 15%-which claim the appellant did not deny or dispute before the lower court. That the claim of the respondent was with the appellant for almost two months before the date of judgment which the appellant never challenged at all. Thus, the respondent was entitled to judgment in the sum claimed inclusive of the rate of interest. Learned Counsel for the respondent argues that the lower court was right in awarding the interest of 15% in favour of the respondent as the appellant did not challenge same at the hearing of the suit under the undefended list. That the counsel that represented the appellant before the lower court admitted that the appellant was owing the respondent thus they did not file any paper. That admission by a counsel is binding on the client.

Issue No. 1 as formulated by the appellant concerns the justification on the award of 15% interest per annum on the sum of $120,000 American dollars from the 26th April, 1995 to the 26th August, 1997, in favour of the respondent. The claim of 15% interest by the respondent is contained in paragraph 2 of the respondent’s particulars of claim as filed in the lower court. The said paragraph 2 of the respondent’s particulars of claim read thus:

“2. The plaintiff also claims against the defendant, an interest of 15% per annum on the said sum of US $120,000 from the date of deposit that is, 26th April, 1995 to date of judgment and 10% court rate from the date of judgment until final liquidation of the entire judgment debt.”

This court stated clearly the position of the proper procedure for raising claim of interest on a sum claimed in an action in Jos Steel Rolling Co. Ltd. v. Bernestielli Nig. Ltd. (supra). This court states thus: