Narindex Trust V Nigerian Inter-contintental Merchant Bank Limited (2001)

LAWGLOBAL HUB Lead Judgment Report

KALGO J.S.C.

This is an appeal against the decision of the Court of Appeal, Kaduna, delivered on the 6th day of January 1996. The case was earlier tried in the Kano State High Court (hereinafter referred to as the trial Court) by Abdullahi J, who delivered his judgment on the 6th day of May 1995.

The action was originally filed in the trial Court on the undefended list pursuant to the provisions of Order 23, rule 1 of the Kano State High Court (Civil Procedure) Rules, 1998. The appellants as defendants at the trial, filed a notice of intention to defend the action and applied to the trial Court to transfer the case to the general cause list. The learned trial Judge heard arguments of counsel on the application and in a ruling delivered on 18th January 1994, transferred the case to the general cause list. Thereafter learned Counsel for the appellants also applied for an order of pleadings by the parties but the learned trial Judge overruled him and ordered that the case be beard without pleadings in accordance with Order 23, rule 3 (2) of the said Rules.

In the writ of summons which was taken out on the 13th of December, 1993, the respondent, as plaintiff, claimed against the appellants, jointly and severally, the sum of N18,550,763.94 (Eighteen million, five hundred and fifty thousand seven hundred and sixty three Naira ninety four Kobo) plus interest at the rate of 63% per annum and further at the Court’s rate from the date of judgment until the whole debt is liquidated. The appellants also filed a counter claim against the respondent claiming the sum of N30,000,00 (Thirty million Naira) being the cost of cotton delivered to the respondent’s accredited agent SGS Inspection Services by warrant No. 009250 which cotton was stolen as a result of the negligence and/or carelessness of the said SGS. The respondents filed a reply to the counter-claim.

Since there was no pleadings filed in the action, the trial proceeded by each party calling witnesses in proof of their respective cases including the counter-claim. At the end of the trial the learned trial Judge struck out the name of the 2nd appellant from the action and found the 1st appellant only liable and accordingly ordered it to pay the respondent the sum of N18, 550,763.94 as claimed. In respect of the counter-claim, the learned Judge entered judgment for the appellant in the sum of N12,000,000.00 as special damages on account of the respondent’s admission that the cotton was worth 12 million Naira N1,000,000.00 was also awarded to the appellant as general damages. Both parties were not satisfied with the decision of the learned trial Judge and they appealed to the Court of Appeal. The Court of Appeal allowed the main appeal of the respondent, restored the name of the 2nd appellant as a party to the case and liable jointly with the 1st appellant as guarantor of the loan. It also dismissed the cross-appeal of the appellants and set aside the order of N12.1 million special and general damages entered or made in favour of the appellants by the trial court. The appellants now appealed to this court on 11 grounds of appeal.

In this court the parties filed and exchanged written briefs. In the appellants’ brief the following issues for the determination of this Court were identified:

1. Whether the learned Justices of the Court of Appeal, Kaduna Division were not in error in setting aside the sum of N 12.1 million awarded the appellants as counterclaim by the trial Court and dismissing their counterclaim of N30 million for their missing 1877 metric tonnes of cotton when both the evidence adduced at the trial and the findings of the learned trial Judge have clearly established the fact that they are entitled to the same.
2. Whether the decision of the lower court restoring Exb. 18 earlier on expunged by the trial court was not erroneous, and whether in the absence of this exhibit, there was any material left on the basis of which the Court of Appeal could justify the judgment of N18, 550,763.94 entered in favour of the respondent by the trial High Court.
3. Whether the judgment of the Court of Appeal, Kaduna Division affirming the judgment of the trial court in the manner it did, and setting aside the appellant’s counter-claim and dismissing same was not in the light of the facts and circumstances of this case and the findings of the trial High Court, unreasonable and against the weight of evidence.

The respondents restated the issues thus: –

1. Whether the learned Justices of the Court of Appeal erred in setting aside the award of N12.1 million to the 1st appellant on its counter-claim.
2. Was Exhibit 18 (the 1st appellant statement of account) wrongly admitted in evidence?
3. Did the Court of Appeal rightly affirm the judgment in favour of the respondent Bank for the sum of N18, 550,763.947

I think it is pertinent, albeit briefly, to set out facts giving rise to this case as presented before the trial Court.

The 1st appellant was an old customer of the respondent bank and the 2nd appellant is the managing director of the 1st appellant. On the 13th of July 1992, the 1st appellant applied for a N10 million credit facility called Bankers Acceptance (B.A) Warehousing facility from the respondent. The application was Exhibit 1 at the trial. The application was approved and the approval was conveyed to the 1st appellant through the 20th appellant vide letter dated 27th July, 1992 (Exhibit 2) on the conditions set out in that letter. By a letter dated 28th July, 1992, (Exhibit 3) the appellant, by its Managing Director (20th appellant) and Secretary, notified the respondent that the 1st appellant had accepted the credit facility on the conditions set out in Exhibit 2, and that the 2nd appellant was authorised to sign any document concerning the loan facility.

As security for the loan facility, the appellants offered the personal guarantee of the 2nd appellant and 1877 metric tonnes of raw cotton in their warehouse valued at N12 million. The loan was to be repaid within 90 days only, and on the due date the respondent demanded repayment. The appellants were unable to pay anything but wrote to the respondents to extend time for repayment to another 180 days from the 16th of October 1992. The respondent obliged but meanwhile interest had accrued on the principal loan. On the 8th of June 1993 when the respondents wrote back demanding for repayment, the appellants replied that they needed a little more time to liquidate the loan and interest and in the same letter blamed their partner one Alhaji Sani Buji of Buji Investment Ltd for diverting their funds. When the default in payment continued, the respondent sought to lay their hands on the 1877 metric tonnes of raw cotton granted to them as security. Here again the appellants told them that their said partner Alhaji Sani Buji had sold the cotton and misappropriated the money to his own use. Thereafter, the respondent gave notice to the appellants of their intention to institute legal action, which they did by filing this action in the trial court on 13th December 1993.

I now come back to the issues for determination framed by the learned counsel in their respective briefs. Each has formulated 3 issues and the points raised in the appellants’ issues are exactly the same as those in the respondents issues. I shall therefore consider the appellants’ issues for the purpose of this appeal.

Issue 1

This issue deals with the counter-claim of the appellant. The trial Court awarded the appellant N12.1 million as special and general damages by way of counter-claim but this was set aside by the Court of Appeal. Learned counsel for the appellant submitted in his brief that there was sufficient evidence to support the findings of the learned trial Judge and that the appellants’ were entitled to the amount of N 12.1 million awarded to them.

On page 82 of the record, the counter-claim reads: –