New Nigerian Bank Plc. V. Denclag Limited & Anor (2004)

LawGlobal-Hub Lead Judgment Report

AMIRU SANUSI, J.C.A. 

This is appeal against the decision of Plateau State High Court of Justice delivered on the 22nd day of October, 1998. The respondents herein were the plaintiffs in the court below while the appellant was the defendant thereat. By writ of summons issued on the 6th June, 1995, the plaintiffs sued the defendant at the lower court. Pleadings were ordered filed and exchanged by parties. With leave of court, parties amended their pleadings. In an amended statement of claim filed with leave of the trial court, the plaintiffs claimed the under-mentioned reliefs against the defendant.

(a) A declaration that the defendant inexplicably caused an undue delay in the remittance of foreign exchange to the plaintiffs’9191 overseas suppliers, namely Sartra International Limited towards the procurement of hospital equipment under and by virtue of tender agreement dated 16/9/1987 as well as mandates to deduct Bauchi State share of federal allocation at source, thereby causing short fall or balance of N616,019.36 which the defendant is obliged to pay back to the plaintiffs.

(b) A mandatory order compelling the defendant to pay the said sum of ?616,019.36 to the plaintiffs or its naira equivalent at the rate of N130 to 1 pound, that is to say, N80,082,516 being money due and payable to the plaintiffs as the differential short fall and or special damages on the hospital equipment procured from Sartra International Limited.

(c) N4,917,484.00 as general and exemplary damages for defendant’s gains and palpable delay in remitting currency as well as inconveniences caused the plaintiffs.

(d) Cost of the action.

The defendant on its part, after denying all the claims by the plaintiffs made counter-claims as follows:

(1) The sum of N3,929,226 made-up of N3,065,000, being money credited to the instructional department for the purchase of hospital equipment but unutilized and withheld by the 1st plaintiff/respondent and

(2) N864,226.67 paid into account of the 1st plaintiff/respondent as excess/unutilized times on letters of credit No: HO/JO/LC/40/90.

The plaintiffs as cross-defendants filed reply to statement of defence, denying the counter-claim as well as defence to counter-claim.

The facts of the case are briefly summarized below:-

The plaintiffs are customers of the defendant, a company engaged in banking business. Sometime in 1987, the plaintiffs/respondents won a contract for the supply of hospital equipment to the Bauchi State Ministry of Health and the Government of Bauchi State undertook to pay for the job. The Bauchi State Government approached the respondents for loan and the latter, especially the 2nd plaintiff/respondent introduced the defendant/appellant bank to Bauchi State Government. An agreement was executed to the tune of One million, four hundred and seventy-six thousand, seven hundred and seventy-seven naira, ninety-four kobo (N 1,476,777.94). By clause 14(a) and (c) of the agreement, the defendant/appellant bank was made the financial institution from which the Bauchi State Government was to take loan to finance the contract in consideration of which a down payment of N1 million was to be made to the defendant/appellant which said sum was duly paid to the defendant. Also, under clause 14(d) of the agreement, the defendant was to make all payments due to the contractors, (the 1st plaintiff). By this agreement, a contractual relationship was created between the defendant/appellant and the two plaintiffs/respondents.

In pursuance of this arrangement, the defendant was to open letters of credit in favour of the plaintiffs under which it was to promptly remit foreign exchange to the plaintiffs’9191 overseas suppliers, namely Sartra International Ltd. It became apparent that the appellant failed to open the letters of credit timeously, hence, the delay on its part in remitting the amount. Due to the delay in transferring foreign exchange to Sartra International Limited, there was a short fall of ?616,019.36 being the outstanding payment in respect of the hospital equipment to the respondents/plaintiffs for onward delivery to Ministry of Health, Bauchi State. When hearing commenced in earnest and in the course of the trial, the plaintiff called some witnesses and a motion filed by the plaintiff for accelerated hearing was granted. Series of delay were caused by both parties especially the defence. In the end, the defendants/appellants did not lead evidence, and despite the order of accelerated hearing, the defendant/appellant did not defend the suit. After several adjournments and the hearing of interlocutory applications, the defendant/appellant refused to defend the case or to prove its counterclaim. In the end, the court entered its judgment in favour of the plaintiff/respondents and dismissed the counterclaims.

Aggrieved by the judgment of the lower court, the appellant appealed to this court. In keeping with the rules of this court in which parties filed and exchanged their briefs of argument, the appellant herein filed its brief of argument. Seven issues for the determination of the appeal were identified and distilled from fourteen grounds of appeal it filed vide its notice and grounds of appeal filed on 23/10/98. The appellant also filed an appellant’s reply brief on 23/5/2000.