Search LawGlobal Hub

Mathias Umeanozie V. First Bank of Nigeria Plc (2016)

LawGlobal-Hub Lead Judgment Report

EMMANUEL AKOMAYE AGIM, J.C.A.

On 28-11-1985, the appellant herein as plaintiff, filed a claim and caused the issuance of a writ of summons on the same day, commencing suit No 0/44/85 in the High Court of Anambra State at Onitsha against the respondent herein and Central Bank of Nigeria as defendants.

The suit was tried on the following pleadings ? 2nd amended statement claim filed on 8-8-2007 accompanied by list of witnesses, depositions of witnesses, list of documents and the documents to be relied on at the trial and the further, further amended statement of defence of the 1st defendant filed on 22-11-2007 accompanied by list of witnesses, witness depositions, list of documents, and document to be relied on at the trial.

The plaintiff applied for the withdrawal of the suit against the Central Bank of Nigeria and its name was struck out as defendant in the suit by the trial Court.

The reliefs claimed for by the plaintiff are stated in paragraph 41 of the 2nd amended statement of claim as follows-

“1. A DECLARATION that the 1st Defendant was in breach of its duty to the

plaintiff by its failure to remit to the plaintiff?s overseas suppliers the various purchase sums (in foreign currency) for goods paid for by the plaintiff through the 1st Defendant as the plaintiff?s bankers.

2. AN ORDER directing the 1st Defendant to pay to the plaintiff the sums of US$6,955.00, US$7,080.00 US$6,980.00, US$6,800.00, US$7,050, 00, US$7,160.00 and US$7,040.00 totalling Us$49,065.00 or its Naira equivalent at the prevailing exchange rate at the time the 1st Defendant decides to make the payment, being the value of the letters of credit Nos. 273/82/117/ID and 273/82/118/ID.273/82/119/ID. 273/82/120/ID. 273/82/121/ID, 273/82/122/ID AND 273/82/123/ID, received by the 1st Defendant from the plaintiff not remitted to the plaintiff?s overseas suppliers or refunded to the plaintiff.

3. Interest on the above sum at the rate of 35% per annum from November 1982 until judgment and thereafter at the rate of 15% until final liquidation of the judgment sum.

4. N180,000,000 (One Hundred and Eighty Million Naira) being loss of profit since 30th November 1982 to date of judgment.

5. N100,000,000,00 (One

Hundred Million Naira) being loss of reputation with business partners in Taiwan.

6. N100,000,000,00 (One Hundred Million Naira) being aggravated and general damages for willful breach of contract, gross negligence and breach of fiduciary duty to the plaintiff.

7. Interest on the sum of N4,088,69 debited from the plaintiff?s account without justification at the rate of 35% per annum from 1982 till the date the 1st Defendant decides to pay.”

The plaintiff testified and also adduced evidence through PW2 in support of his claim. The 1st defendant adduced evidence through DW1 in support of his defence.

After conclusion of evidence by both sides and following the adoption by each party of their written final addresses, the trial Court rendered judgment on 11-3-2009 holding that the plaintiff- ?is entitled to his deposit. In the absence of any convincing evidence against his claim. I hereby enter judgment for the plaintiff in the sum of Six Million Four Hundred and Seventy Six Thousand Five Hundred and Eighty Naira (N6,476,580.00) being the value of $49,065.00 spent by the plaintiff without receiving his goods. ?

Dissatisfied with certain parts of the judgment of the trial Court, the plaintiff on 9-7-2014 commenced this appeal No. CA/E/400/2014 by filing a notice of appeal containing 8 grounds for the appeal, after this Court extended the time for him to appeal against the said judgment.

The parties herein have filed, exchanged and adopted their respective briefs as follows – appellants brief, respondents brief and appellants reply brief.

The appellant?s brief raised the following issues for determination;

“1. Whether the trial judge was not in error when he did not award interest of 35% per annum from 1982 till date of judgment on the refund of N6,476,580.00 being the value equivalent of US $49,065.00 paid by the appellant to the respondent for seven letters of credit which the respondent refused, failed or neglected to remit to the overseas suppliers of the appellant. (Ground 1)

2. Whether the trial judge was not in error when she did not order the refund to the appellant of the sum of N4,088.69 with interest at 35% per annum from 1982 till date of judgment being the sum debited by the respondent on appellant?s account without any

lawful justification (Ground 2)

3. Whether the Learned Trial Judge was not in error in assessing and awarding a lump sum of N15 million to the appellant for loss of profit, loss of reputation and general and aggravated damages which items were claimed and proved separately by appellant (Ground 3).

4. Whether the appellant was entitled to his claim for loss of profit, loss of reputation, general and aggravated damages with interest of 35% per annum till date of judgment. (Grounds 4, 5, 6)

5. Whether appellant was entitled to interest at the rate of 35% from 1982 till date of judgment and thereafter at the rate of 15% until liquidation of the judgment debt on any claim found due to the appellant.” (Grounds 7 & 8).

The respondent adopted the issues raised for determination in the appellant?s brief.

?Before I delve into the merits of this appeal, Let me deal with a preliminary point that touches on the competence and validity of the notice of appeal that commenced this appeal. This point has to do with the lack of identity of the signatory of the said notice of appeal.

Listed at the foot of the notice of appeal are the names

of five legal practitioners, who as indicated therein are of the Law firm of IUC Global chambers, which is referred to therein as ?appellants counsel?. The names are listed from top down, in the following order, Prof. Ilochi Okafor, SAN, Berne Nwachukwu (Mrs), Fabian Okonkwo, Esq, Chuks J. Okonkwo Esq and Chienye Okafor Esq. There is a signature at the foot of the said notice of appeal lying between the names Berne Nwachukwu (Mrs) and Fabian Okonkwo Esq., beneath the names of Prof Ilochi Okafor SAN and Berne Nwachukwu (Mrs) and on top of the other names of Fabian Okonkwo, Esq, Chuks J. Okonkwo, Esq and Chienye Okafor Esq. None of the above names was ticked to show that the bearer of the name made the said signature. As it is, there is nothing in the said notice of appeal identifying the person who made the said signature.

It is settled by a long line of judicial decisions that only a person who is registered to practice as a legal practitioner in Nigeria, in that his name is on the roll of legal practitioners, can competently and validly sign or issue a Court process or any legal document on behalf of some other person. Therefore a Court

process signed or issued by a person who is not a legal practitioner on behalf of a party in a case is incompetent and void. See for example Okafor & Ors v. Nweke & Ors (2007)3 SC (Pt 11)55, Unity Bank PLC v. Denclag Ltd & Anor (2012) LPELR ? 9729 (SC), First Bank of Nigeria PLC & Ors v. Maiwada & Ors (2012) LPELR ? 9713 (SC), N.N.B PLC v. Denclag LTD & Anor (2004)LPELR ? 5942 (CA) and Bello v. Adamu & Ors (2011) LPELR ? 3722 (CA). Therefore, it is of fundamental importance that the identity of such person who signed or issued a Court process be certain and obvious on the face of the process so as to show beyond conjecture that he is a legal practitioner. If the identity of the signatory of a Court process is not certain or obvious on the face of the said Court process, it cannot be said or assumed that such a signatory is a legal practitioner.

The identity of a signatory of a Court process can be made certain and obvious on the face of the Court process by writing the name of the signatory beneath the signature and then followed by the name of the law firm or if the signature is on top or in the midst

of several names, then one of the said names can be ticked as an indicator that he is the maker of the signature or his name can be written beside the signature.

?Where the identity of the signatory of a Court process is not certain or obvious on its face as in this case, the process has been held to be incompetent and invalid as it cannot be said or assumed that the unidentified and unknown signatory is a legal practitioner. The fact that the name of a law firm is written under the signature as appellant?s counsel, after the names of the person who are members of the law firm as in this case, is of no moment because the preponderance of judicial authorities do not accept the presence of the name of the law firm that is acting for the party as an indicator that the unidentified and unknown signatory is a legal practitioner and do not accept that a law firm is a legal practitioner as prescribed in S. 2(1) and S. 24 of the Legal Practitioners Act. See SLB Consortium Ltd v. NPC (2011) LPELR ? 3074 (SC), Okafor & Ors v. Nweke & Ors (supra), Unity Bank PLC v. Denclag Ltd & Anor (supra) and FBN PLC & Ors v. Maiwada (Supra).

?In

the light of the foregoing, I hold that the notice of appeal that commenced this appeal is incompetent and void. It is hereby struck out. Since the notice of appeal that commenced this appeal is incompetent, this appeal is equally incompetent. There can be no competent and valid appeal without a competent and valid notice of appeal. Also this Court would lack the jurisdiction to entertain and determine such an appeal as it has not been initiated by a valid legal process . This appeal is also struck out.

Having determined that the appeal is incompetent, there would have been no need to determine the merits of the appeal, but out of abundance of caution and for whatever it is worth, let me also determine the merit of this appeal as an alternative position.

?I will determine the merit of this appeal on the basis of the issues raised for determination in the appellant?s brief.

I would determine issues 1 and 5 together as they are essentially the same. Issue 1 asks ?Whether the trial judge was not in error when he did not award interest of 35% per annum from 1982 till date of judgment on the refund of N6,476,580.00 being the value

equivalent of US $49,065.00 paid by the appellant to the respondent for seven letters of credit which the respondent refused, failed or neglected to remit to the overseas suppliers of the appellant. (Ground 1)?

Issue 5 asks ?Whether appellant was entitled to interest at the rate of 35% from 1982 till date of judgment and thereafter at the rate of 15% until liquidation of the judgment debt on any claim found due to the appellant. (Grounds 7 & 8).?

The complains under these issues are against the failure of the trial Court to award pre-judgment interest on the adjudged sum and post judgment interest at the rate of 15% per annum. It simply held that it is convinced that the appellant is entitled to the refund of the money paid by him to the respondent for onward transmission to the Overseas suppliers. It then ordered the respondent to pay to the appellant six million, four hundred and seventy six thousand, five hundred and eighty naira (N6,476,500.00) as the then naira equivalent to the sum of $49,065.00.

Learned Counsel for the appellant has argued that the trial Court ought to have gone further to award interest to the

appellant against the respondent for holding unto the business capital of the appellant when they failed to remit the money to appellant?s overseas suppliers thereby depriving the appellant the opportunity of trading with the money from 1982 to the date of the judgment in 2009, a period of 27 years and causing him loss of business reputation with his suppliers in Taiwan.

?Learned Counsel for the respondent argued in reply that the appellant is not entitled to award of interest, that the appellant did not plead or prove any agreement by the parties or mercantile practice or custom on the payment of any interest on such money, that the appellant having been awarded N15 million naira for loss of profit and damages, it would amount to double compensation to seek or be awarded interest on the same sum of money for loss of use of same, that the respondent was merely an intermediary through which the appellant applied to the Central Bank of Nigeria for foreign exchange for international commercial transactions, that the Central Bank of Nigeria was the sole authority empowered to approve, release and remit forex overseas at the material time by virtue of S.

1(1)(a)and (b) of the Exchange Control (Anti ? Sabotage) Act 1984 and S. 7 (a), (b) and (d) of the Exchange Control Act 1962, that the appellant did not withhold the payment of the N44,271.64 deposited with it by appellant to the Central Bank and so discharged its responsibility to the appellant to pay the said sum to the Central Bank for approval and release of forex.

?I have calmly and carefully read through the entire 2nd amended statement of claim. I agree with the argument of Learned Counsel for the respondent, that it was not pleaded anywhere therein that both parties agreed that the respondent shall pay interest on the said sum deposited by the appellant in its account with the respondent from the moment it is so deposited until the $49,065.00 is paid to the suppliers overseas or that a mercantile practice or custom exists that requires the respondent as the issuing bank in a letter of credit transaction to pay interest on monies paid to it by a trading customer for onward payment to the customer?s overseas suppliers. The appellant?s claim in paragraph 41(iii) of the 2nd amended statement of claim for interest at the rate of 35%

per annum on the said sum from November 1982 when the money was paid to the respondent in pursuance of the seven letters of credit till judgment is not supported by any facts in the said pleading. So on the said pleading, the claim for the said relief was not made out. It is the facts pleaded in the statement of claim that show entitlement to the reliefs claimed therein. So unless there are facts pleaded in the statement of claim showing entitlement to a relief claimed therein, then the claim for that relief fails on the pleading and does not qualify for trial.

?The testimony of PW1 under cross examination that the parties agreed on payment of interest on the said sum is not supported by the pleadings. The fact of such an agreement is not pleaded in the 2nd amended statement of claim or any other pleading. The testimony of PW2 in chief contained in paragraph 18 of his witness deposition at page 265 of the record of this appeal that the respondent was earning interest of 30% to 35% per annum from the said money is not supported by the pleadings. The fact that the respondent was earning interest at such rate from the said money is not pleaded in the 2nd

amended statement of claim. In any case, even if the fact of such earning by the respondent was pleaded, that cannot qualify as a pleading of the fact of the existence of an agreement between the parties that respondent shall pay the appellant interest on the sum at a certain or any rate and cannot qualify as the pleading of the fact of the existence of a mercantile practice or custom in that trade requiring the respondent to pay the said interest at a certain or any rate. So the above mentioned testimonies of PW1 and PW2 on facts not pleaded go to no issue and are legally inadmissible. The testimonies are therefore worthless as they amount to no evidence.

The duty to pay pre-judgment interest or the right to be paid such interest on a debt, loan or money held in one?s custody on behalf of another can only arise and exist by agreement of the parties to the transaction expressly made or inferable from the usual course of dealing between the parties or from the custom or usage of that trade or business or by statute. See Abia State Transport Corp & Ors v. Quorum Consortium Ltd (2009) 3-4 SC 187, Himma Merchants Ltd v. Aliyu (1994) LPELR ?

1366 (SC), A-G Femero & Co Ltd v. Hankel Chemicals Nig Ltd (2011) LPELR ? 12 (SC), Diamond Bank Ltd v. Partnership Investment Co. Ltd (2009) LPELR ? 939 (SC) and A.I.B Ltd v. Integrated Dimensional System Ltd & Ors (2012) LPELR ? 9710 (SC).

It is not in dispute on the pleadings and evidence of both sides that the appellant deposited the sum of N44,271.64 under the letters of credit transaction for the respondent to protect and sustain the appellant?s financial credit reputation with his suppliers overseas, by transmitting the said sum in naira to the Central Bank of Nigeria, the body statutorily vested with the exclusive authority to approve and release the foreign currency for payment for overseas transactions and that the respondent promptly applied for the said foreign currency from the Central Bank of Nigeria by promptly paying the sum in naira to it and submitting along with it Form M. There is no evidence that the respondent did not promptly pay the naira deposit to the Central Bank of Nigeria and there is no evidence that the Central Bank paid the $49,065.00 applied for to the respondent and that the respondent kept

the money and did not pay it to the appellant?s overseas suppliers. The case of the appellant is not that the respondent held the naira deposit and did not promptly transmit it to the Central Bank of Nigeria. It is also not the appellant?s case that the Central Bank of Nigeria paid the said $49,065.00 to the respondent and the respondent kept the money and refused to remit same to the appellant?s overseas suppliers. The case of the appellant is that the respondent deceived him that the $49,065.00 had been paid to the overseas suppliers and the goods had been supplied by the said suppliers and had arrived Nigeria via the port in Portharcourt, when it knew that no such payment had been made to the overseas suppliers and that they had not supplied the goods. I agree with the submission of Learned Counsel for the respondent that in the absence of proof of custody by the respondent of either the appellant?s naira deposit or the $49,065.00 or any part of it received from the Central Bank of Nigeria, the respondent is not liable to pay interest on an amount which the appellant admitted was in the custody of the Central Bank of Nigeria and not

in the custody of the respondent.

Generally, by the nature of a documentary credit transaction, there can be no obligation on the issuing bank to pay interest on the money paid to it in pursuance of the letters of credit for onward transmission to the Central Bank of Nigeria for purchase of Foreign Currency for payment in respect of overseas transactions or to pay interest on the Foreign Currency released to it by the Central Bank for payment to the overseas suppliers provided it did not retain custody of any of the said moneys contrary to the expectations under the documentary credit transaction.

?In any case, it is clear from the evidence that it was not within the contemplation or expectation of the appellant and the respondent that under the documentary credit transaction the respondent shall pay interest on the money deposited with it by the appellant in pursuance of the letters of credit issued by the respondent to pay for the goods to be supplied to the appellant by his suppliers overseas or that the respondent shall pay interest on the foreign currency it receives from the Central Bank of Nigeria to pay the appellant?s overseas suppliers.

Form M, the application for irrevocable letter of credit did not indicate that the respondent shall pay such interest. The expectation and contemplation of the parties to the said documentary credit transaction was that the issuing bank (respondent) shall not pay interest on the monies received by it on behalf of the appellant for the purpose of the issued letters of credit. Exhibit M, the 3rd February 1984 letter written by the appellant to the respondent stated this clearly. The letter which was demanding for the refund of the money deposited by the appellant with the respondent for the purpose of the letters of credit stated thusly-

?We Earnestly wish to remind you of our deepened concern over being refunded with the compulsory/mandatory deposits of the above long protracted, unutilized, discrepantly drawn and expired letters of Credit. As you might have been aware, the credits were established by you in November 1982 ? one year and four months by now.

We want the deposits back since ?

1. The goods were completely banned into Nigerian and no import license was issued to us.

2. The credits had long expired discrepantly

for over one year.

3. The deposits are not interest oriented.(underlined by me)

4. The exporters have long declined to effect shipment.

To refund the deposits to us is the task lying in your hands and as good bankers with repute, we appeal to you to instigate your International Division, Lagos with the view to recalling the deposits back to our account as soon as possible.?

The testimony of PW2 under cross examination confirm that there was no contemplation of interests by the parties.

?There is no doubt that if the appellant had proven that the respondent withheld the deposit he paid to it in pursuance of the documentary credit transaction and did not pay it or promptly pay it to the Central Bank of Nigeria or that the Central Bank of Nigeria approved and released the $49,065.00 to the respondent to pay the appellants suppliers in Taiwan but the respondent withheld the money and did not pay or promptly pay the overseas suppliers, the respondent would have been liable to pay interest on the money at the prevailing bank rate for deposits prescribed by the applicable Central Bank Guidelines, on the equitable principle that it has

breached its fiduciary duty to the appellant and enriched itself thereby. This appears to be the basis of the Supreme Court decision in Akwara v. International Bank for West Africa Ltd (2000) FWLR (Pt 11) 1766. The facts of that case, briefly stated, are as follows- ?The appellant negotiated and obtained credit with Newby Iron Founders Ltd, England who shipped Iron water pipe fittings worth $17,649.00 to him. The appellant nominated the respondent as his banker for the purpose of the transaction and subsequently paid the value of the consignment in local currency to the respondent to be remitted through the Central Bank of Nigeria to Newby Iron Founders Ltd England at the prevailing exchange rate. The respondent applied to the Central Bank for Foreign exchange allocation to finance the credit but did not transfer the appellant?s cash deposit along with the application. (underlining mine) In 1984, the then military government embarked on a refinancing of all outstanding applications and because of the devaluation of the naira, the appellant was required to meet up with a shortfall of N13,331.18. Consequently, the Central Bank issued a report to the

respondent to ascertain the status of the appellant?s application. The respondent?s reply to the CBN?s report was that ?No Naira Available? which means that the appellant made no Naira deposit, and had no sufficient deposit with the respondent. The trial Court in its judgment dismissed the appellant?s case but ordered the refund of the deposit. On appeal, the Court of Appeal set aside the decision of the High Court and awarded the appellant interest on his money withheld by the respondent.

In our instant case, there is no evidence that the respondent withheld any money paid to it for the purpose of giving effect to the letters of credit by which the appellant paid for supplies of goods from Taiwan. So Akwara?s case is not applicable here.

The case of the appellant in paragraphs 10 to 34 of the 2nd amended statement of claim and paragraphs 12 to 27 of the deposition of PW1 was that the goods to be paid for by the letters of credit were to have been shipped in a container through Gold Star Line Shipping Company?s vessel, Gold Hilar on 25-2-1983, that on 5-2-1983, the appellant?s suppliers in

Taiwan wrote to him confessing that they did not ship the goods as agreed, but that they had simply forwarded fake documents of title to the goods to create the false impression that the goods were on board the ship to obtain payment for the goods without shipping them, that the appellant gave a photo copy of the said letter to the respondent and asked it to disregard any documents it receives concerning the shipment of his goods from the suppliers in Taiwan and should no longer remit the price of the goods to the suppliers in Taiwan, that on 8-4-1983, the respondent wrote to the appellant informing him that it had received the documents of title to the goods from the suppliers in Taiwan and requested the appellant to come to the respondent and collect the documents, that the appellant repeated its earlier warning to the respondent not to release the price of the goods to the suppliers as the goods had not been shipped, that on 26-4-1983 the appellant wrote to the respondent repeating the instructions that the respondent should not release the price of the goods to the suppliers, that in compliance with the appellant?s instruction, the Onitsha Branch of

the respondent wrote to its head office notifying them that the Taiwan suppliers had confirmed that they did not ship the goods to the appellant and adviced that the remittance of the purchase price of the goods to the said suppliers be withheld even if Foreign exchange allocation for the transaction had been made by Central Bank of Nigeria pending compliance with the Exchange Control Regulation of Nigeria, that surprisingly, the respondent wrote to the appellant requesting him to collect the shipping documents in order to collect his goods from combined Maritime Agencies (Nig) Ltd, that the said shipping company also wrote to him a letter dated 8-3-1983 to go and collect his goods at the Port in Protharcourt, that he travelled to Portharcourt and found the vessel allegedly carrying his goods at the wharf, that the wooden cases enumerated in the Manifest as containing his goods were not loaded on board the ship and did not actually arrive with the ship and that there were no goods belonging to the appellant any where in the ship, that the appellant requested the respondent to refund the monies paid by the appellant to the respondent to pay for the goods, that

the respondent claimed that it had remitted the money to the suppliers in Taiwan, that the appellant had to travel to Taiwan to recover his money or collect the goods, that the Taiwan suppliers informed the appellant no money was remitted to them in Taiwan by the respondent, that the appellant reported the matter to the Board of Foreign Trade in Taiwan which held a meeting with the appellant and the suppliers? bank and it was found even from respondent?s correspondences that no remittance of the purchase price was made to the suppliers in Taiwan, the Taiwan suppliers wrote letter dated 27-9-1985 to the appellant and another letter dated 29-10-1985 to the Onitsha Manager of the respondent notifying them that the 7 letters of credit were cancelled, that the appellant again wrote to the respondent a letter dated 2-12-1985 requesting it to refund the appellant?s money, that the respondent instead of refunding the deposit as requested instructed the appellant to advice his suppliers to return the original credit instruments to the respondent to enable it effect the refund, that the suppliers insisted that the respondent return the fake documents

of title to the goods earlier sent to it by them to enable them return to the respondent the original letters of credit and that the respondent refused to return the said fake documents of title to the goods in its possession and would not refund the plaintiff?s money.

By the appellants own showing in his pleading and evidence, the respondent diligently discharged its obligation to the appellant to finance the payment for the supplies from Taiwan by documentary credit, that it was the appellant?s suppliers in Taiwan who frustrated the process of remitting the money for the goods to them in Taiwan by engaging in the fraudulent practice of sending fake documents of title to the goods to the respondent to enable them obtain advance payment for the goods that had not been shipped by false pretence and by later cancelling the letters of credit. The appellant by his own evidence in exhibit M admitted that the goods it ordered for and the payment for which the $49,065.00 was required were contraband goods for which no import licence was obtained by him. The full content of exhibit M is already reproduced at pages 13-14 of this judgment. The

appellant?s pleading and evidence, particularly exhibit M establish that the appellant?s instruction to the respondent not to remit the money to its suppliers in Taiwan was because of the above fraudulent acts of the appellant and his suppliers in Taiwan. This is expressly stated in exhibit M. It is established by the appellant?s pleading and evidence that the respondent which had started the process of sending the money to appellants suppliers had to instruct its head office to stop the process. It is also established by the appellant?s pleading and evidence that the respondent did not refuse the appellant?s request for a refund of the money that should have been paid to the overseas suppliers, but rather demanded for the return of the original copies of the cancelled letters of credit by the appellant?s suppliers overseas to enable it effect the return of the money. The appellant by his own showing in his pleading and evidence could not get his overseas suppliers to return the said original copies of letters of credit, as they insisted on the respondent returning to them the fake documents of title they had sent to

respondent before they can release the original of the letters of credit to the respondent.

In the light of the foregoing fraudulent acts of the appellants suppliers in Taiwan, their attempt to fraudulently obtain payment for the goods by the false pretence that they had sent the document of title to the goods and their unilateral cancellation of the letters of credit, the respondent acted reasonably and well within its right as the issuing bank to demand the return of the original letters of credit by the appellant?s suppliers in Taiwan before it refunds the money to the appellant. The respondent did not breach its fiduciary duty to the appellant under the documentary credit transaction and did not enrich itself from the fiduciary relationship.

I do not agree with the submission of Learned Counsel for the appellant that the trial Court should have awarded pre-judgment interest on the adjudged sum of 15 million naira from 1982. The trial Court in making this award stated thusly- ?The N180,000,000.00 for loss of profit from 1982 till date. N100,000.000.00 loss of reputation with Taiwan business partners: N100,000.000.00 general and

aggravated damages, totaling N380,000,000.00 is on the extreme side. It is hereby reduced to N15 Million Naira totaling N21,476,580.00. 5% interest from the date of judgment until the entire sum is liquidated.? So the award was for loss of profit from 1982 till date, loss of business reputation and general and aggravated damages.

The trial Court was right when it did not award a pre judgment interest on the said adjudged sum. A Court has no power to award such an interest on the adjudged sum. Its power to award pre-judgment interest is limited to the debt or amount claimed before the date of judgment. As I had held herein such interest is awardable only upon proof that the claimant has a right to the interest by virtue of an agreement between the parties, or under a mercantile custom or by statute or under a principle of equity, such as breach of fiduciary relationship. Once judgment is rendered and an amount is awarded to a party as a judgment sum, the only interest the Court can award on such adjudged sum is interest from the date of the judgment until the judgment is fully paid or until a named date. The power of the Anambra State High Court to

award interest on the judgment sum is provided for in Order 35 Rule 4 of the Anambra State High Court (Civil Procedure) Rules 2006 which states thusly- ?The judge at the time of making any judgment or order or at any time afterwards, may direct within which the payment is to be made or other act is to be done, reckoned from the date of the judgment or order, or from some other point of time as the judge deems fit and may order interest at a rate not less than 10% per annum or at the prevailing interest rate for the time being chargeable by Commercial bank on loans and overdrafts (which ever is higher) to be paid upon any judgment until the judgment debt is fully liquidated or settled.?

This provision requires that such interest be reckoned from the date of the judgment or such other point of time after the date of the judgment. In Jallco Limited & Anor v. Owoniboys Technical Services Ltd (1995) LPELR ? 1591 (SC) the Supreme Court considered and applied Order 27 Rule 8 of the Kwara State High Court (Civil Procedure) Rules 1975 which is in pari materia with Order 35 Rule 4 of the 2006 Anambra State High Court(Civil Procedure) Rules and

held that this Court was right in ordering interest to be paid on the judgment debt from the date of judgment until final liquidation. This Court is bound by the decision of the Supreme Court.

The trial Court was wrong to have awarded interest of 5% on the adjudged sum of 15 million naira until it is fully paid up. This is because Order 35 Rule 4 of the Anambra State High Court(Civil Procedure) Rules 2006 which gave the trial Court the power to award post judgment interest on the judgment sum, prescribes that such interest shall be at a rate not less than 10% per annum or at the prevailing interest rate for the time being chargeable by commercial banks on loans and overdrafts (whichever is higher) until the judgment debt is fully liquidated. There is no evidence of the prevailing interest rate chargeable by commercial banks on loans and overdrafts. So the trial Court was bound to be guided by the prescribed minimum rate of 10% per annum prescribed in Order 35 Rule 4. So the award of 5% interest per annum on the judgment sum of 15 million naira is contrary to the minimum rate of 10% interest per annum on a judgment sum prescribed in Order 35 Rule 4. For

this reason I hereby review the post judgment interest payable on the judgment sum of 15 million naira from the 5% per annum to 10% interest per annum in keeping with Order 35 Rule 4 of the Ebonyi State High Court Rules 2008.

In the light of the foregoing issues Nos 1 and 5 are resolved in favour of the respondent except the part complaining against the trial Court?s award of post judgment interest of 5% per annum on the adjudged sum of 15 million naira which is resolved in favour of the appellant.

I will now consider issue No 2 which asks ?Whether the trial judge was not in error when she did not order the refund to the appellant of the sum of N4,088.69 with interest at 35% per annum from 1982 till date of judgment being the sum debited by the respondent on appellant?s account without any lawful justification (Ground 2)?

?Learned Counsel for the appellant argued under this issue that the appellant in paragraph 9 of his 2nd amended statement of claim copiously pleaded that the respondent debited his account with the sum of N4,088.69 without lawful justification, that this fact was admitted by the respondent in paragraph 5

of its further further amended statement of defence, that the said sum was debited and taken by the respondent from the appellant?s account, that the trial Court did not order the refund of the said sum which the respondent admitted that it took from the appellant?s account with it, that the trial Court was bound to consider the claim for that relief separately.

Learned Counsel for the respondent has argued in reply that the respondent?s debit of the said sum of N4,088.69 from the account of the appellant was contractual and was meant to cushion the fluctuation in exchange rate and it is not interest oriented.

It is not in dispute that the respondent debited the said sum of N4,088.69 from the respondent?s account. What is in dispute is whether the debit was lawfully justified and was with the consent of the appellant and the purpose of the debit.

?The appellant stated in paragraph 9 of his 2nd amended statement of claim that- ?The plaintiff states that although he left the sum of N580.00 in his account as compulsory deposit to cover any unforeseen shortfall in foreign exchange, the 1st defendant debited the sum of

N4,088.69 from the plaintiff?s account as alleged shortfall without justification since no remittance was made to the foreign suppliers. The plaintiff states that he is entitled to interest on the said sum of N4,088.69 at the commercial rate of 35% per annum from 1982 till the date the 1st defendant decides to pay. The plaintiff hereby gives the 1st defendant notice to produce the debit note in respect of the debit of the sum of N4,088.69 from the plaintiff?s account.?

?In response to this paragraph of the appellant?s 2nd amended statement of claim, the respondent in paragraphs 5 and 6 of his further further amended statement of defence filed on 22-11-2007 stated that-

“5. The 1st defendant admits paragraph 9 of the plaintiff?s said pleadings only to the extent that the plaintiff?s application for foreign exchange, at the material time, was required to be accompanied by not only the exact naira equivalent but also extra naira deposit meant to cushion any fluctuation in exchange rate. The plaintiff duly accepted this mandatory requirement, hence he made the extra deposit, all of which naira deposits were forwarded

with the L/Cs and Form ?M? to the 2nd defendant, to await exercise of its regulatory discretion.

6. In further answer, the 1st defendant vehemently denies any entitlement by the plaintiff to interest charges on the said naira deposits, being totally extraneous to contract, equity or the contemplation of the parties at the time of the deposit or any time thereafter, moreso as the said naira deposits were meant to be transmitted to the custody of the CBN; and not categorized as a loan or overdraft extended by the plaintiff to the 1st defendant, or at all.?

?It is clear from the above reproduced pleadings of both sides that they understood that the debit of the said sum of N4,088.69 from the appellant?s account was meant to cover any shortfall in the naira equivalent of the foreign currency requested for, due to unforeseen fluctuations in the currency exchange rate. It is obvious from paragraph 9 of the 2nd amended statement of claim that the appellant?s reason for contending that the debit was without justification was that the $49,065.00 was not remitted to the overseas suppliers. It is clear from paragraph 5 of the

respondent?s further further amended statement of defence which the appellant did not border to file a reply to deny, that the sum of N4,088.69 accompanied the respondents? application for foreign exchange on behalf of the appellant as the required extra naira payment to Central Bank of Nigeria to provide for any shortfall due to fluctuation in exchange rate. So the debit was justified as part of the requirement for obtaining the foreign exchange in the sum $49,065.00 to effect the payment by letters of credit for the supplies from Taiwan. The trial Court ordered the refund of the $49,065.00 or its naira equivalent as at date of judgment by the respondent to the appellant. By this order, the foreign exchange of $49,065.00 that was meant to be purchased by the principal naira deposit of N44,271.64 and the extra naira deposit of N4,088.69 was to be refunded by the respondent to the appellant. So there was no basis for an order that the respondent refund to the appellant the sum of N4,088.69 debited by the respondent from the appellant?s account with it as part of the sums required to purchase the $49,065.00 from the Central Bank of Nigeria. The

sum of $49,065.00 covers the equivalent sums in naira paid for it. The trial Court was right for not ordering that the respondent refund the sum of N4,088.69 to the appellant after ordering that it pays the $49,065.00 to the appellant.

For the above reasons, I resolve issue No 2 in favour of the respondent.

Let me now consider issue No 3.

The appellant as plaintiff in paragraph 41(iii),(iv),(v) and (vi) of his 2nd amended statement of claim, claimed for four distinct reliefs as follows-

(iii) Interest on the above sum at the rate of 35% per annum from November 1982 until judgment and thereafter at the rate of 15% until final liquidation of the judgment sum.

(iv) N180,000,000 (One Hundred and Eighty Million Naira) being loss of profit since 30th November 1982 to date of judgment.

(v) N100,000,000,00 (One Hundred Million Naira) being loss of reputation with business partners in Taiwan.

(vi) N100,000,000,00 (One Hundred Million Naira) being aggravated and general damages for willful breach of contract, gross negligence and breach of fiduciary duty to the plaintiff.

The trial Court held in respect of these reliefs thusly-

?is entitled to his deposit. In the absence of any convincing evidence against his claim. I hereby enter judgment for the plaintiff in the sum of Six Million Four Hundred and Seventy Six Thousand Five Hundred and Eighty Naira (N6,476,580.00) being the value of $49,065 spent by the plaintiff without receiving his goods.?

Learned counsel for the appellant has argued that the trial Court was bound to have considered each relief separately and entered judgment on each separately, that the appellant is entitled to know what was awarded to him in respect of each relief, that the lump sum award of 15 million naira to cover all the above four reliefs has left the appellant and even this Court in the dark and guessing as to what ought to have been awarded in respect of each relief. He relied on the decision of this Court in Muoghalu v. Ude & Anor (2000) FWLR (pt 14)2454 at 2467; and the decision of the Supreme Court in G.B. Ollivant v. Agbabiaka (1972)2 SC 137 for this submission. He urged this Court to exercise its jurisdiction under S. 15 of the Court of Appeal Act to separate the awards to make it clear what is assigned to each head of claim.

Learned Counsel for the respondent relying on the decision of this Court in GFK Investment Nig. Ltd v. Nitel PLC (2006) All FWLR (pt 299) 1402 at 1415 ? 1417 argued that such lump sum award in respect of several reliefs does not vitiate the validity of the award, that the appellant?s prayer that this Court exercise its power under S. 15 of the Court of Appeal Act to separate the amount awarded amongst the four distinct reliefs is defeated by this Court?s decision in GFK Investment Nig Ltd v. Nitel PLC (supra) and that this Court cannot do so in this case without additional evidence.

?Let me consider the merit of the above arguments.

The principles that guide the award of an amount for loss of profit are clearly different from the principles that guide the award of general damages and damages for loss of business reputation. The fact of loss of profit must be specifically pleaded, particularized and strictly proved with arithmetical exactitude. The profit lost must be actual net profit lost and not anticipatory or paper net profit. So it is necessary for the sum awarded for loss of profit to be known and certain so as to ensure

that the amount awarded is supported by the pleadings and evidence and is an adequate compensation for the actual net profit lost by a party of the amount awarded.

The losses that justify the award of general damages and damages for loss of business reputation do not have to be specifically pleaded with particularity or strictly proved. General damages are awardable once the violation of a legal right is proved. The quantum of such damages is determined by the Court according to the peculiar facts of the case which would show the nature of the injury or losses suffered as result of the infraction of a party?s right. The discretion of the Court in fixing the amount awarded as general damages must be exercised judicially and judiciously.

?The decision to award an amount for each of the reliefs claimed must reflect the consideration and application of the guiding legal principles for making the award. The principles that is applied in fixing an amount awarded as general damages including damages for loss of reputation cannot be applied in making an award for loss of profit, a form of special damages, as to do so would not yield the right outcome.

Loss of profit, if proved must be awarded as claimed because the Court has no discretion to reduce the sum claimed for the loss that is proved. To do so would amount to depriving the claimant his right to the profit proved. So it is not possible in law for the amount awarded as general damages to be the same amount awarded as loss of profits. That is the implication of awarding the lump sums of N15 million naira as loss of profits, damages for loss of business reputation, general and special damages and aggravated damages.

Learned Counsel for the appellant has rightly submitted that he was entitled to know how much of the amount claimed for each relief was awarded. The lump sum award makes it impossible to know which amount of the N15 million naira is for loss of profit or is for damages for loss of reputation or is for general or aggravated and special damages.

The judgment of the trial Court did not show the basis for the award as it relates to the claim for each relief. I agree with the argument of Learned Counsel for the respondent that this Court cannot exercise its general powers under S. 15 of the Court of Appeal Act to now divide the 15

million naira amongst each of the four reliefs in paragraph 41(i) to (vi) without additional evidence to provide a justifiable basis for such a distribution. In any case the pleadings and evidence as they are did not establish any loss of profit or loss of business reputation or any breach by the respondent of the contractual right of the appellant under the documentary credit transaction.

The Supreme Court in G.B. Ollivant v. Agbabiaka (1972) 2 SC 137 in considering whether it was proper for a Court to make a lump sum award to cover distinct reliefs claimed for separately held thusly- ?It will be observed that the claim is itemized into three distinct groups, namely, (a), (b) and (c). Instead of separately considering each of the claim, the Learned Judge in the portion of the judgment that we have quoted earlier considered the claim as a whole and awarded as damages a lump sum of 3,000 pounds to cover all the items of damages. We think that in awarding damages, the Learned Judge ought to have treated each item of the claim separately.?

In the light of the foregoing, issue No 3 is resolved in favour of the respondent.

?I will now

consider issue 4 in the appellant?s brief which asks ?Whether the appellant was entitled to his claim for loss of profit, loss of reputation, general and aggravated damages with interest of 35% per annum till date of judgment. (Grounds 4, 5, 6)?

Learned Counsel for the appellant has argued that the appellant in paragraph 38 of the 2nd amended statement of claim specifically pleaded the particulars of loss of profit he suffered from 1982 to 2007 for the reckless non challant acts of the respondent and that the evidence of PW2 that the appellant would have made profit of 75% to 85% of the said amount in the total sum of N180 million naira if he was trading with the principal sum of $49,065.00 and N4,088.69 held over and detained by the respondent was not challenged.

?It is glaring that the sum of 180 million naira claimed for as profit lost is in respect of anticipated profits, also called paper profit. It is not actual profit. PW2 testified that it is the profit the appellant would have made if he had traded with the monies he paid to the respondent to pay his Taiwan suppliers by means of letters of credit from 1982 to 2007. Such

evidence is speculative of the profit that would have been made if such monies were used by the appellant in trading. A claim for an amount for loss of profit, a form of special damages, can only succeed in respect of the proven actual loss of net profit. This is because of the requirement that it must be strictly proven. Such a claim cannot succeed on the basis of speculations about the profit that would have been made if the monies allegedly held over were used by the appellant in trading during the relevant period. General damages for loss of use of money is a more appropriate relief for such imprecise losses.

?In any case, I have held herein that the respondent did not withhold or detain any of the monies paid to it by the appellant for remittance to his Taiwan suppliers for payment of the supplies. It was the appellant that stopped the remittance of the price of the goods to the Taiwan suppliers because the suppliers had confessed to sending fake documents of title to the goods to the respondent to fraudulently obtain an advance payment for the goods that it has refused to ship to the appellant. The appellant?s Taiwan suppliers also cancelled

the letters of credit but refused to return the original copies of the letters of credit to the issuing bank until the respondent returned to it the fake documents of title they sent to it in a bid to cause it to remit the purchase price of the goods to them when they had not shipped the goods. It was the failure of the appellant and his Taiwan suppliers to return the original letters of credit that delayed the refund of the price of the goods to the appellant. The documentary credit transaction was frustrated by the actions of the appellant and his overseas suppliers. This is established by his pleadings and testimonies in chief. It is also confirmed by exhibit M, a letter dated 3-2-1984 which he wrote to the Manager of the Onitsha branch of the respondent stating that the deposit be refunded to him because ?1. the goods were completely banned into Nigeria and no import license was issued to us.

4. the exporters have long declined to effect shipment.?

?The crisis situation the transaction fell into was created by the fraudulent propensities of the appellant and his Taiwan suppliers. He frustrated himself from trading with the monies that

was meant to pay for his supplies from Taiwan. He and his Taiwan suppliers are the architects of his misfortune. He cannot use the law and legal process to get benefits from a crisis situation he created.

It is also the case of the appellant that he suffered loss of business reputation with his Taiwan suppliers due to the alleged failure of the respondent to effect the remittance of the price of the goods to the suppliers in Taiwan in keeping with its obligation under the documentary credit by which the payment for the goods was to be effected. Learned Counsel for the appellant has argued that ?The appellant pleaded and gave evidence of loss of reputation suffered by him, before his overseas suppliers when respondents failed to remit the seven letters of credit to the said suppliers and deceived the appellant into making repeated representation and demands on the suppliers that the letters of credit were actually remitted to them. Appellant travelled to the Republic of Taiwan and lodged a formal complaint against his overseas suppliers over the issues of with-holding of his goods to the Taiwaness Board of Foreign Trade, which board after

investigation discovered that the letters of credit were never remitted to the appellant?s overseas suppliers. This portrayed the appellant before the overseas suppliers as a dishonest customer consequent upon which the overseas suppliers black listed the appellant and stopped doing business with him.?

?Learned Counsel further submitted that the respondent falsely and maliciously alleged that the goods ordered from Taiwan were contraband goods and communicated this to the appellant?s suppliers in Taiwan and local customers who consequent thereupon avoided and shunned the appellant as a criminal and devious business man and that the trial Court found the respondent liable for inflicting harm on the reputation of the appellant.

The above arguments of Learned counsel for the appellant are contrary to his pleadings and evidence. The argument that the respondent did not send the original copies of the letters of credit to the appellants suppliers in Taiwan is contradicted by the appellant?s pleading in paragraphs 32, 33 and 34 of the 2nd amended statement of claim which reads thusly-

“32. The 1st defendant instead of

releasing the deposit as requested, instructed the plaintiff to advice the suppliers to return the original credit instruments to the 1st defendant?s to enable it effect a refund.

33. The 1st defendant from the request contained in paragraph 31 above has neglected or refused to refund to the plaintiff the deposit upon his seven (7) letters of credit. The suppliers, KUO & YANG INDUSTRIAL CO. LIMITED, later wrote the plaintiff that they asked the 1st defendant to return all the documents of goods sent to the 1st defendant by the suppliers to enable them return to the 1st defendant the original letters of credit as demanded. The 1st defendant still refused to return the said original documents in its possession to the suppliers, nor refund the plaintiff?s money. The plaintiff will found on the suppliers letters No. KY-13006 of January 15, 1986.

34. The plaintiff states that the 2nd defendant does not make it a condition that original letters of credit must be submitted to it before withdrawal of compulsory deposits could be effected.?

?The appellant as PW1 testified in support of these averments in paragraphs 33 to 35 of his

witness deposition. The appellant?s suppliers in Taiwan received the original copies of the seven letters of credit, held on to them and have refused to release them even after they confessed sending fake documents of title to the respondent and tried to fraudulently obtain advance payment of the price of the goods they knew they were not going to supply to the appellant and even after they had cancelled the letters of credit. They now seek a return of the fake documents of title they sent as a condition for their release of the leters of credit to the respondent.

?In paragraphs 13 to 35 of the 2nd amended statement of claim, the appellant stated that he stopped the respondent from remitting the price of the goods to his Taiwan suppliers because the suppliers sent fake documents of title, cancelled the letters of credit and did not ship the goods. His letter to the respondent, exhibit M states that ?he asked for a refund of the money he paid the respondent for remittance to the overseas suppliers because ?the goods were completely banned into Nigeria and no import licence was issued to us.? and ?the exporters have long declined

to effect shipment.?

It was the appellant who by exhibit M confessed that the goods he ordered from Taiwan and in respect of which the letters of credit were issued were completely banned into Nigeria and that no import license was issued to the appellant. So the averment in paragraph 10 of the further amended statement of defence at page 269 of the record of this appeal that the appellant ordered for contraband goods is not malicious and false as it amounts to a restatement of the appellant?s written confession in exhibit M. The averment is proven by exhibit M.

By exhibit M, the appellant admitted engaging in the disreputable act of ordering for the supply of contraband goods from Taiwan. In his pleadings, the appellant admitted that his suppliers in Taiwan engaged in the disreputable acts of forging documents of title and trying to use them to defraud the appellant through obtaining advance payment from respondent for the goods that had not been shipped to the appellant.

?The pleadings and evidence of the appellant did not establish that the respondent did not discharge its obligation under the documentary credit transaction and did

not establish that the appellant suffered any loss of business reputation as a result of how the respondent discharged its obligation under the documentary credit transactions.

In the light of the foregoing I hold that the appellant was not entitled to his claim for loss of profit, loss of reputation, general and aggravated damages. Issue 4 of the appellant?s brief is resolved in favour of the respondent.

Fortunately for the appellant, the respondent did not cross appeal against the award of damages for loss of profit, loss of reputation, general and aggravated damages and so did not seek to set aside the award.

On the whole, this appeal fails as it lacks merit. It is accordingly dismissed. The judgment of the High Court of Anambra State delivered on 11-3-2009 in suit No 0/447/1985 per G.N. Mbanugo J is hereby affirmed and upheld, except the award of 5% interest per annum on the judgment sum of 15 million naira, which is hereby reviewed upwards to 10% per annum. The appellant shall pay costs of N100,000 to the respondent.

Other Citations: (2016)LCN/8766(CA)

Mathias Umeanozie V. First Bank of Nigeria Plc (2016) LLJR-CA

Mathias Umeanozie V. First Bank of Nigeria Plc (2016)

Related Posts:

Published by

LawGlobal Hub

Leave a Reply Cancel reply