Mobil Oil Plc V. Drexel Energy and Natural Resources Ltd. & Ors (2003)
LawGlobal-Hub Lead Judgment Report
OLUFUNLOLA OYELOLA ADEKEYE, J.C.A.
This appeal is against the ruling of the High Court of Justice Oyo State Ibadan Judicial Division delivered on the 16th of November, 1999.
The facts of the case at the court below are that the 4th and 5th respondents in this appeal commenced this action as plaintiffs against the Ist-3rd respondents as Ist-3rd defendants and the appellant as 4th defendant in the Ibadan Judicial Division of the High Court of Justice Oyo State on the 31st of March, 1998.
In the writ of summons and statement of claim filed on the 6th of April 1998 – the plaintiffs claimed against the defendants as follows:-
(1) The sum of N20,635,323.69k (Twenty million, six hundred and thirty five thousand, Three hundred and twenty three Naira sixty nine kobo) being the balance as at 6/4/98 of the amount of N17,586,000 (Seventeen million, five hundred and eighty-six Naira) plus interest bank charges etc. on the principal amount borrowed by the 1st defendant with the 2nd and 3rd defendants as guarantors in October 1996 from the 1st plaintiff with the 2nd plaintiff as mediator on terms and conditions specified in the letter dated 2nd of October, 1996, which sum the defendants failed, neglected and refused to pay despite repeated demands.
(ii) Interest on the said sum at the 25% per annum from the said 6/4/98 till payment.
(iii) Against the 4th defendant only, the sum of N14,841.000 being damages for the negligence of the 4th defendant in allowing and facilitating the 1st defendant to divert the payment of N14,841,000 made to the 4th defendant by the 1st plaintiff directly for a specific purpose to a different purpose in consequence of which diversion the 1st plaintiff suffered loss.
(iv) Against the 4th defendant only, interest rate of 25% per annum on the said amount from the date of the receipt of the said N14,841,000 until payment of the said sum to the 1st plaintiff.
(v) And for an order compelling 1st, 2nd and 3rd defendants to perfect the mortgage of the properties mentioned in paragraphs 30 supra in favour of the 1st plaintiff.
The appellant as 4th defendant filed its memorandum of appearance and its statement of defence joining issues with the plaintiffs on the 6th of November 1998. The appellant, as 4th defendant on the 23rd of April 1999 filed a motion on notice praying the court for the undermentioned reliefs:-
(1) An order striking out the name of the 4th defendant/applicant in this suit;
(2) An order dismissing the plaintiffs’ claim against the 4th defendant in this suit as no cause of action arises against the 4th defendant.
The plaintiffs reacted to the application by filing a counter affidavit on the 25th of May 1999. And the trial court took arguments of the parties. In a considered ruling delivered on the 16th of November 1999 – the learned trial Judge dismissed the application of the 4th defendant.
The appellant being dissatisfied with the ruling of the court filed a notice of appeal with three grounds of appeal. Both parties exchanged briefs in compliance with the rules of the Court of Appeal 1981 as amended. In the appellant’s brief filed on the 6th of November, 2002 two issues were distilled for determination as follows:-
(1) Is it a correct position of the law that once a statement of defence has been filed the issue as to whether or not there is a cause of action can no longer be raised?.
(2)Whether from the circumstances of this case the appellant had any contractual relationship with the 4th and 5th respondents from which a duty of care can be inferred?
The issues arise from the grounds of appeal in the appellant’s notice of appeal.
The 1st-3rd respondents in their brief deemed filed on the 24th of September 2002, formulated three issues for determination as follows:-
(1) Whether or not the statement of claim discloses a cause of action against the appellant to warrant the trial court refusing to strike out the appellant’s name or dismiss same?;
(2) Whether the appellant is a necessary party to the action bearing in mind the issues joined with the 4th-5th respondents in answer to paragraphs 20-26 of the statement of claim?.
(3) Whether the issue of privity of contract raised by the appellant as 4th defendant in the lower court can be determined by the court at interlocutory stage without going to trial?.
The 4th and 5th respondents also settled for three issues for determination by this court as follows:-
(i) Whether the appellant is a necessary party to the action bearing in mind the issues joined with the appellant paragraphs 20-26 of the statement of claim?.
(ii) Whether the issue of privity of contract raised by the appellant as defendant in the lower court can be determined at the interlocutory stage without going to full trial?.
(iii) Whether the issue of whether or not the statement of claim discloses cause of action in negligence can be determined at the interlocutory stage without evidence considering the facts pleaded in paragraphs 20-26 of the statement of claim?
It is apparent that the respondents decided to have three issues rather the two issues formulated by the appellants for the purpose of clarity and better understanding of the legal points raised in the argument of the appellant. In my line of thought, the substantial issues raised in this appeal affect the cause of action of the plaintiffs before the trial court and whether the plaintiffs can make the appellant before this court, defendant to the suit.
In this appeal, I shall still adopt the two issues raised for determination by the appellant. In suit No. 1/149/98 before the Oyo State High Court, Ibadan Division for which the instant appeal emanates – both parties have filed their pleadings – statement of claim and statement of defence. The appellant wants to know whether or not it is possible to raise an objection to the cause of action of the plaintiff – and the parties invited as defendants to the suit. The issues of claims, cause of action and parties to a suit are as provided for in the Oyo State High Court Procedure Rules Edict 1988.
Order 11 rule 1 – defines who can be plaintiffs as:-
Order 11 “All persons may be joined in one action as plaintiffs in whom any right to relief (in respect of or arising of the same transaction or in a series of transactions) is alleged to exist whether jointly, severally or in the alternative, whose, if such persons brought separate actions, any common question of law or fact would arise and, judgment may be given for such one or more of the plaintiffs as may be found to be entitled to, without any amendment – provided that if, upon the application of any defendant, it shall appear that such joinder may embarrass any of the parties or delay the trial of the action, the court or a Judge in chambers may order separate trials, or make such other order as may be expedient in the circumstances”.
Rule 3: – guides as to who can be defendant as follows:-
“All persons may be joined as defendants against whom the right to any relief is alleged to exist, whether as jointly or severally, or in the alternative. And judgment may be given against such one or more of the defendants as may be found to be liable according to their respective liabilities without any amendment”.
It is the argument of the appellant that the learned trial Judge made a mistake in the ruling when he concluded that the name of the appellant can not be struck out as a defendant since issues had been joined in the suit. Regardless of the fact that the defendant had filed a statement of defence application to strike out a suit or a party’s name for disclosing no cause of action steps to strike out a suit for want of cause of action, the court must restrict itself to the statement of claim of the plaintiff. The appellant cited the case of Shell Petroleum Development Company v. Onasanya (1976) 6 SC pg. 89.
The Ist-3rd respondents by way of reply gave meaning of cause of action as:-
(i) A cause of complaint.
(ii) A civil right or obligation fit for determination by a court of law.
(iii) A dispute in respect of which a court of law is entitled to invoke its judicial powers to determine.
The foregoing definition is as handed down by the Supreme Court in the case of Afolayan v. Ogunrinde (1990) 1 NWLR (Pt.127) p. 369. Reference was made to the book on Practice and Procedure of the Supreme Court, Court of Appeal and High Courts of Nigeria 2nd Edition Chapters 5 paragraph 5.03 pages 18-19 – where the learned author defined cause of action as:
“The factual basis or some factual situations a combination of which makes the matter in litigation an enforceable right or actionable wrong.”
It is trite law that the court will look at the statement of claim of the plaintiff to determine whether a cause of action is disclosed.
Paragraphs 15, 16, 18, 20, 21, 22, 23, 24, 25, 26 and 27 of the statement of claim disclose weighty allegations against the 4th defendant and that the plaintiff has a grievance against the 4th defendant. The relevant part of this stage is that allegations are made against the defendants which raise question fit for the trial court to determine – regardless of the weakness in the plaintiff’s claim.
The learned trial court did not base his decision in the ruling on the statement of defence. The 4th and 5th respondents argued that they had rightly joined the appellant to the action before the trial court, being a necessary party to the suit, as without making it a party the court may not be able to effectually and completely adjudicate upon and settle all questions involved in the matter.
The categories of parties before the court are specified as proper parties, necessary parties and desirable parties. The court must also ensure that all persons who may be entitled to or who claim some share or interest in the subject – matter of the suit or who may likely be affected by the results, if they had not already been made parties. The cases of Green v. Green (1987) 3 NWLR (Pt.61) 480 at p. 492. Awoniyi v. AMORC (2000) 10 NWLR (Pt. 676) 522, (2000) 6 SC (Pt.1) p. 107.
The issue of whether the statement of claim disclose a cause of action at all or not cannot be determined until after full trial and evaluation of the evidence before the trial court. The averments in the statement of claim of 4th and 5th respondents, disclose some questions fit to be decided by the trial court and to which they may be entitled to some remedies against the appellant Alhaji Usman Dantata & Anor. v. Mouktar Mohammed (2000) 7 NWLR (Pt. 664) 176, (2000) 5 SC 1 at pg. 29.
On the 2nd issue for determination the appellant contended that this court should determine whether from the circumstance of this case, if the appellant had any constructual relationship with the 4th and 5th respondents from which a duty of care can be inferred. The appellants gave an outline of the relationship of the plaintiffs and defendant and concluded that there was no contractual relationship between the appellant and the 4th-5th respondents. There was no contract of bailment with the appellant regarding the money lodged with the appellant – so that the appellant does not owe the 4th-5th respondents any duty of care.
There are no facts in the statement of claim connecting the appellant to a claim in negligence. The relationship of the 1st and 4h and 5th respondents is a purely banker and customer relationship which has nothing to do with the appellant, as innocent and independent third party.
The case of Imo Concorde Hotel v. Anya (1992) 4 NWLR (Pt.234) 210 was cited. In the appellant’s reply brief it was further argued that without the appellant being joined as a party to the suit, the subject matter of the contractual relationship between the 1st 3rd respondents and the 4th and 5th respondents can be settled. The appellant did not enter into any form of relationship constructual or official with the 1st – 3rd respondents subject to or based on the instructions, consent or authority of the 4th and 5th respondents.
The appellant cited the cases of Dantata & Anor. Mouktar Mohammed (2000) 7 NWLR (Pt. 664) 176, (2000) 5 SC 1; Aliyu v. Aturu (1999) 7 NWLR (Pt.612) 536 CA; Peter Tiwell (Nig.) Ltd. v. Inland Bank (Nig.) Ltd. (1997) 3 NWLR (Pt.494) 408; New Nigeria Newspapers Ltd. v. Ademola (1997) 6 NWLR (Pt. 507) 76.
The 1st-3rd respondents argued in respect of the 2nd issue that based on the pleadings the issues in dispute are inter alia that the 4th defendant acted negligently in paying out the sum of N14,841,000 to the 1st defendant thus allegedly facilitating the diversion of the said sum by the 1st-3rd defendants and causing damage to the plaintiff. Both parties joined issues, the appellants are the only one who can lead evidence to show why their action cannot be held to be negligent. The appellants also argued that there is no privity of contract between itself and the plaintiff to ground an action in negligence against it, on relying on the case of Imo Concorde Hotel v. Anya (1992) 4 NWLR (Pt.234) 210. The respondents relied on the case of Abosomwan v. Merchantile Bank of Nigeria Ltd. (No.2) (1987) 3 NWLR (Pt. 60) 196, (1987) 3 NWLR (Pt.60) page 196 to hold that in transaction such as the one between the parties a claim of negligence can be made out against a third party not a party to the contract from where the claim arose. Parties have to give evidence to resolve the issue raised therein.
The 4th and 5th respondents in their brief argued that there are exception to principle pronounced in the case of Imo Concorde Hotel v. Anya (1992) 4 NWLR (Pt.234) 210 that there must be nexus between the appellant and 4th-5th respondents with regard to the transaction to ground liability. The law is clearly stated by the Supreme Court in the case of Abusomwan v. Merchantile Bank of Nigeria Ltd. (1987) 2 NCC Vol. 18 pg. 828 at 887. The issue of negligence alleged by the 4th and 5th respondents cannot be determined at the interlocutory stage of the proceedings. Evidence will have to be adduced to establish the liability of the appellant since 4th – 5th have joined frivolous and an abuse of event process.
What is a cause of action in a suit has been clearly defined in a number of cases determined by our superior courts. It can conveniently be stated as follows:
(1) A cause of complaint
(2) A civil right or obligation for determination by a court of law.
(3) A dispute in respect of which a court of law is entitled to invoke its judicial powers to determine.
(4) Consequent damage.
It is every fact that would be necessary for the plaintiff to prove if traversed, in order to support his right to the judgment of the court.
It is the bundle or aggregate of facts which the law will recognize as giving the plaintiff a substantive right to make the claim against the relief or remedy being sought. It is the factual situation which the plaintiff relies to support his claim that must be recognized by the law as giving rise to a substantive right capable of being claimed or enforced against the defendant. The factual situation relied upon must constitute the essential ingredients of an enforceable right as claim.
Afolayan v. Ogunrinde (1990) 1 NWLR (Pt.127) p. 369; Rhein Mass U.D. Sec. GMBH v. Riv Way Lines Ltd. (1998) 5 NWLR (Pt.549) p. 265 SC; Akibu v. Oduntan (2000) 13 NWLR (Pt.685) p. 446 SC; Savage v. Uwechia (1972) 3 SC 214; Kusada v. Sokoto Native Authority (1968) 1 All NLR p. 377; Bello v. A.-G., Oyo State (1986) 5 NWLR (PT.45) p. 828; Tukur v. Gov. of Gongola State (1989) 4 NWLR (PT.117) p.517; Thomas v. Olufosoye (1986) 1 NWLR (Pt.18) p. 669.
The claim of the 4th and 5th respondents against the appellant is as specified in the writ of summons and paragraph 32(3) and (4) of the statement of claim. In the statement of claim of the plaintiff/4th and 5th respondents, the appellant/4th defendant was mentioned in paragraphs 15, 16, 18, 20, 21,22, 23, 24, 25, 26, 27, 32(3) and (4).
In determining what is cause of action in a matter the claim and the relief sought in a suit, the averments in the entire statement of claim must be considered together and not in isolation of one another. In the instant case, all the paragraphs mentioned above relating to the 4th defendant are very vital part of the claim from which the cause of action derived its source. The questions raised in these paragraphs are fit to be determined by the learned trial Judge. In considering whether there is a cause of action in this suit before this lower court the learned trial Judge relied on and considered the relevant averments in the statement of claim relating to the 4th defendant. It is however noteworthy that when considering the issue of disclosure of a cause of action, it is irrelevant to consider the weakness of the plaintiffs’ claim; what is important is to examine the averments in the pleadings and see if they disclose some cause of action or raise some questions fit to be decided by a judgment. Dada v. Ogunsanya & Anor. (1992) 3 NWLR (Pt. 232) 754, (1992) 1 NSCC p. 369.
It is my conclusion that there is cause of action capable of sustaining the claim before the trial court. I here mentioned earlier on in this judgment the guideline of the rules of Oyo State High Court as to who should be parties to an action.
The argument of the appellant is that the name of the appellant be struck out from the suit since the 4th and 5th respondents did not have a contract of bailment with the appellants regarding the money lodged with the appellant, the appellant does not owe the 4th and 5th respondents any duty of care. Consequently, the 4th and 5th respondents have no cause of action against the appellant – it ought not to have been joined as a party. The cause of action in the plaintiffs claim before the trial court is noted in negligence – duty of care. The appellant stressed that there is no nexus between the parties. I have adverted my mind to certain paragraphs of the statement of claim particularly paragraphs 24, 25 and 26 of the statement of claim as follows:
Paragraph 24:-
The plaintiff will contend that upon payment of the N14,481,000.00 to the 4th defendant a cheque written directly in the name of the 4th defendant in order to deliver the product ordered to the Honeywell Fisheries Limited the money so deposited will remain the property of the 1st plaintiff until the 4th defendant had supplied the product for which the money was deposited. And if the product was not delivered, the money remains available in the hands of the 4th defendant who has a duty to notify the plaintiff before releasing the money to anybody particularly the person who cannot produce the receipt.
Paragraph 25:-
It will contend also that the 4th defendant acted negligently in accepting to refund the money deposited for a particular purpose on the sudden request of the 1st defendant, in the circumstance of the deposit which were well-known to the 4th defendant.
Paragraph 26:-
It will be contended also that by releasing the money the 4th defendant facilitated the diversion of the money.
The plaintiff in paragraph 32(3) and (4) of its statement of claim is claiming damages to the tune of N14,841,000.00 from the 4th defendant plus interest. Paragraph 6 of the statement of defence filed by the appellant reads:-
Paragraph 6:-
The 4th defendant further denies every allegation of negligence imputed on her and states in addition that
instead it is the plaintiffs that appear from their statement of claim to have been negligent in their relationship with the 1st and 3rd defendants.
From the foregoing, parties have obviously joined issues. The trial court must take evidence to support the facts pleaded by both parties. Moreover, it is appellant who can lead evidence before the trial court to show why their action cannot be construed or held to be negligent. Any judgment given by the court will affect the appellant. It is therefore a necessary party. Categories of parties to an action are specified in a plethora of cases as proper parties, necessary parties and desirable parties. A necessary party is one who is not only interested in the subject matter of proceedings but also who in his or her absence the proceedings could not be fairly dealt with. He is one without whom he is being made a party to the action the court may not be able to effectually and completely adjudicate upon and settle all questions involved in the matter.
It is trite that parties against whom complaints are made in an action must be made parties. The reason which makes it necessary to make a particular person a party to an action is that he should be bound by the result of the action and the question to be settled therefore must be question in the action which cannot be effectually and completely settled unless he is a party.
The essence is:-
(a) To put an end to litigation and not to have two parallel proceedings in which the same issue is raised, leading to different and inconsistent results.
(b) To make the person joined to be bound by the result of the litigation.
Trial Judges have the prerogative and responsibility to ensure that the proceedings agree with the justice of the case by joining as plaintiffs or defendants –
All persons who may be entitled to or who claim some share or interest in the subject matter of the suit or who may likely be affected by the results, if they had not already been made parties.
Awoniyi v. AMORC (2000) 10 NWLR (Pt. 676) 522, (2000) 6 SC (Pt. 1) 103 at 107; Green v. Green (1987) 3 NWLR (Pt. 61) 480 at 492.
The appellant maintained that it cannot be a necessary party to the suit and that if indeed the allegation by the 4th respondent that the appellant is the wrong doer is true then there is no sufficient relationship of proximity or neighbourhood between the appellant and the 4th respondent to warrant a prima duty of care. The appellant referred to the case of Imo Concorde Hotel v. Anya (1992) 4 NWLR (Pt. 234) 210. In the case of Abusomwan v. Merchantile Bank of Nigeria Ltd. (1987) 3 NWLR (Pt.60) 196 at 197-198, the sum total of the decision is to the effect that it is clear that in banking transactions such as the one between the parties herein a claim of negligence can be made out against a third party not a party to the contract from whence the claim arose.
The appellant put up copious argument in the appellant’s reply brief which in my view is more appropriate as an address before the trial court after both parties must have called evidence. The learned trial Judge was of the view that the matter should proceed to trial so that the issues joined in the pleadings are determined by the court.
The submission in the appellant brief and reply brief shows a burning desire and wish of the appellant that this court wade into and determine the main issue in the suit before the trial court so as to dismiss the 4th and 5th respondents’ claim. If this court is to accede to the request of the appellant in this appeal surely the substantive matter shall be determined at this interlocutory stage.
It is trite that in considering whether or not to grant an interlocutory application a court should be cautious not to prejudge issues which are yet to be tried in the substantive action still pending before the trial court.
Orji v. Zaria Industries Ltd. (1992) 1NWLR (Pt. 216) 124; Akapo v. Hakeem-Habeeb (1992) 6 NWLR (Pt. 247) 266; Fasakin v. Fasakin (1994) 4 NWLR (Pt. 340) 597.
It will be premature at this stage to take out the name of the appellant from the suit and/or dismiss the 4th and 5th respondents’ claim against the appellant in suit No. 1/149/98 before the lower court. This court directs that there is need for the suit to go to trial so that the issue of whether there was negligence on the part of the appellant can be determined on the facts of the case. Which simply means that there is need for evidence to be adduced by the parties in proof of the claim and or in defence to the said claim to resolve the issues raised therein. It is the view of this court that this appeal is premature, lacks merit, and it is seen as an unnecessary waste of litigation time and the litigants’ precious money. Counsels are advised to stop chasing the shadow while ignoring the substance. The appeal is accordingly dismissed with N20,000 costs. N10,000 in favour of the 1st-3rd respondents and N10,000 to the 4th-5th respondents.
Other Citations: (2003)LCN/1364(CA)