Nigerian Agricultural Co-operative Bank Limited V. Johnbull Obadiah (2003)
LawGlobal-Hub Lead Judgment Report
ISTIFANUS THOMAS, J.C.A.
This is an appeal against the ruling and judgment of Essang J. of Akwa Ibom State High Court, Oron, delivered on 19th October, 1998 and 26th January, 1999 respectively, in Suit No. HOR/46/95.
The brief facts of the case are as follows:-
The respondent as plaintiff instituted an action by way of a writ of summons dated 24/7/1995, claiming from the appellant as defendant, the sum of N1, 500, 000.00 for general damages for detinue and for a declaration that the seizure by the appellant of 35 bundles of fishing nets, was illegal, null and void. But the statement of claim was not filed until 1st April, 1997, thus a period of 2 years. Still, the appellant was not served with the statement of claim of the respondents until 2/6/1997. The statement of defence and counter claim of the appellant was filed on 2/7/1997, thus within time by the rules of court.
The record shows that the appellant’s statement of defence and the counter-claim were served by the court’s bailiff on the respondent personally on 30/9/1997, but before the service on the respondent on that date, his learned counsel had on 17/9/1997 filed an application before the court for default judgment; and was heard and granted by the court on 15/10/1997. This clearly shows that the appellant’s statement of defence and the Counter-claim had earlier been served on the respondent before the court heard and granted the application for default judgment. Learned appellants counsel has however conceded to the fact that he (counsel) was not in court on the 15/10/1997 when the application was moved and granted.
He equally conceded that the appellant also did not file a Counter-affidavit to the application for default judgment which was on notice. It is curious that learned counsel for the appellant is deliberately silent as to whether the application for default judgment was served on appellant or not. But surprisingly, the same appellant and his counsel, who were not in court on the day the respondents application was moved and granted by the trial court, on that same day, filed an application to set aside the default judgment (see page 22 of the record).
The application to set aside the default judgment was opposed by the respondent, but was however granted by the trial court on 19/10/1998 (thus one year after) on the following terms:-
“The application therefore succeeds. But taking in consideration the age of the case-having been filed in 1995 and the seeming lack of applicant and its counsel’s zeal and determination to defend the suit contributing to delay and setting aside the Notice on motion for Judgment, the Defendant/Applicant shall pay costs to the Plaintiff/Respondent assessed and fixed at N100, 000.00 (One Hundred Thousand Naira).
The aforementioned costs to be paid before the Defendant/Applicant takes further steps to defend the case. As a warning to prevent further exercise in futility, the Defendant/Applicant is to file an undertaking to defend the suit with due care, diligence and determination, failure which, the judgment of 15th October, 1997 shall be restored. Above terms and conditions setting aside the judgment to be fully complied with by the applicant before return date”.
The appellant refused to pay the cost awarded, and the respondent applied to lower court to restore its Judgment of 15/10/1997 since the appellant had not complied with the conditionalities laid in the judgment. The learned trial judge in his ruling of 26/1/1999, restored the terms of his default judgment of 15/10/1997 as follows:-
“All the submissions of the plaintiff’s counsel J.J. Edem, Esq., are up held since the defendant has not complied with the terms and conditions of court’s order dated 19/10/98. That the case has not gone on appeal, the court order being sacrament must be obeyed. Accordingly, Judgment of the court dated 15/10/97 must be restored in favour of the plaintiff for sum of N1. Million”.
Dissatisfied with the former ruling in which appellant was asked to pay a cost of N100, 000.00, learned counsel obtained the leave of this court on 19th April, 1999 to appeal against the conditionalities and the cost. The final judgment of 26/1/1999 is also appealed against by the appellant and by leave of this court, granted on 19/2/2002, amended notice of appeal containing 9 grounds of appeal, the appellant formulated two issues that read as follows:-
“(i) Was there any legal justification or basis for the final judgment of the court delivered on January 26, 1999?
(ii) Did appellant have fair hearing in regard to the final judgment of the court delivered on January 26, 1999?”
I have to point out that right from the beginning of this appeal, the respondent has deemed it not necessary to appear or file briefs. So the appeal with leave of this court is determined solely on appellant brief only. This is in accordance with Order 6 rule 10 of the Court of Appeal Rules 2002.
In arguing issue No.1 which is based on grounds 1, 2, 3, 4, 5 and 7 of the grounds of appeal, learned counsel has copiously referred to the ancillary orders as well as the terms and conditions contained in the default judgment of 15/10/1997; setting aside ruling of 19/10/1998 and the final judgment of 26/1/1999 respectively, and submitted that the crux of this appeal is that there was no basis for the ancillary orders and conditionalities. Learned counsel gave seven reasons as to why reinstating the default judgment is wrong”.
The first reason according to learned counsel is that Order 27 rules 4 and 11 of the High Court (Civil Procedure) Rules 1989 of Akwa Ibom State under which the application for default judgment was made, has absolutely not provided that failure to pay cost awarded by a court, judgment would be entered against the party that failed to pay the cost.
In other words, the above stated rules, specifically allowed default judgment only where a party has failed to file his statement of defence within the frame time therein provided or by the Court. Counsel relied on cases of Akinnuli Vs Ayo – Odugbesan (1992) 8 NWLR (Part 258) 172, 189; Imo Broadcasting Corporation Vs Iwueke (1995) 1 NWLR, (part 372) 448, 502, Malgwi Vs Gadzama (2000) 11 NWLR (Part 678) 258.
The second reason according to learned counsel, is that, it is totally illogical for the trial court to restore a default judgment when the same court had earlier acknowledged in its ruling of 19/10/1998, that there was no basis in law for the judgment in the first place, since the respondent’s application, was based on the perceived default of pleadings by the appellant, whereas the appellant, had in fact, filed their pleadings including a counter claim within time.
The third reason according to learned counsel is that the reasons given by the trial court for the default judgment are quite different from the reasons given by the respondent in their affidavit evidence, when the application for default judgment was made. In other words, appellant is alleging that the trial court made up a different case for the respondent other than what respondent asked, which is legally not allowed. Counsel referred to Tyum Vs Atavti (1996) 8 NWLR (Part 469) 675, 684 – 6; Chugbo Chemists Ltd Vs Chugbo (1996) 5 NWLR (Part 447) 246-252-3; and IMNL Vs Oge (1996) 3 NWLR (part 437) 422, 433.
The fourth reason according to learned counsel is that the law has made provision for recovery of costs awarded by courts in Sheriffs and Civil Process Act Cap. 407, Laws of Nigeria 1990. That the respondent could have availed himself by recourse to recover the cost rather than for the trial court to restore a default judgment that had earlier been set aside. Counsel referred to Ojeme Vs Monodu 11 (1995) 6 NWLR (Part 403) 583, 604-5; Nigeria Army Vs Mowarin (1992) 4 NWLR (Part 235) 345; Akibu Vs Oduntan (1991) 2 NWLR (part 171) 1.
The fifth argument of appellant counsel is that the trial court displayed double standard when alluding to the reasons for setting aside the default judgment. The double standard according to counsel, is that the trial court blamed the appellant for unnecessary delay in hearing the case, but the court closed its eyes to the fact that the respondent, who as plaintiff filed the suit in 1995, but did not file the statement of claim until about 2 years later. That the court knew that the case could not proceed without the respondent first filing his statement of claim. Learned counsel referred to the various adjournment made by the lower court and the reasons for the adjournments as well as the appearance of parties and their counsel.
The sixth submission of counsel is on the maxim that “cost follows cause”. It is the contention of counsel that it was the respondent who wasted the time of the court by failing to file his statement of claim for 2 years, yet the trial court awarded unjustified cost of N100, 000.00 against the appellant on the wrong assumption that the appellant stalled the proceedings of the case by its lack of zeal and consistent absence from the court.
That on the contrary, there was nothing suffered by the respondent that would indemnify him by the exorbitant cost of N100, 000.00.
In concluding his argument on issue No.1, learned counsel, referred to the counter-affidavit of the respondent in apposing the application to set aside the default judgment. In paragraphs 4, 5 and 6 of the counter-affidavit deposed to by the respondent himself, he said that the appellant was yet to file their statement of defence, whereas, the statement of defence had been served personally on the respondent, but he failed to hand same to his solicitor. That this is clear perjury by the respondent in his affidavit, but the trial court made feeble excuse for the respondent and his counsel in his ruling. Learned counsel for the appellant regard this as another flagrant display of double standard by the trial court, and urged that there was no legal basis for the high cost awarded and the stringent conditions which latter culminated in the unwarranted restoration of the default judgment. Counsel urged this court to set aside the restoration order and remit the case to the lower court.
Now the position of the law where a party has applied to the trial court, to enter judgment in default of pleadings in accordance with Order 27 rules 4 and 11 of the High Court “(Civil Procedure) Rules 1989 of Akwa Ibom State or in accordance with similar Rules of Court, there is no other relevant considerations other than the failure to file pleadings. Any other considerations like default of appearance whether by a party or his counsel, or lack of zeal to defend or prosecute the suit, will be considered as irrelevant considerations.
There is no doubt that the decision to set aside a judgment obtained by default of pleadings is discretionary. The discretion however, must be exercise not only judicially, but also judiciously in accordance with statutory provisions of rules of court and settled legal principles on sufficient materials. The discretion should not be influenced by irrelevant considerations. See Akinnuli Vs Ayo- Odugbesan (1992) 8 NWLR (Part 258) 172,189-190.
Though in the case at hand, the learned trial judge set aside the default judgment as applied for by the appellant, yet the reasons enumerated by the learned trial judge can be classified into two categories, one lawful and the other unlawful and therefore irrelevant.
The lawful reason is that the trial court latter found out, that in fact, the appellant had filed its statement of defence within time and it was in the court’s file. The application for default judgment was based on a mistaken belief by the respondent’s counsel, that pleadings-statement of defence had not been filed. The trial court in fact found that it was the fault of the respondent himself on whom statement of defence was served by the court-bailiff, but the respondent failed to hand it over to her counsel.
The unlawful reason given by the trial court for setting aside the default judgment is found at pages 60-61 of the record where the learned trial judge said-
“But taking into account the age of the case having been filed in 1995 and the seeming lack of applicant and its counsel’s zeal and determination to defend the suit contributing to delay and setting aside the Notice on Motion for Judgment the Defendant/Applicant shall pay costs to the Plaintiff/Respondent assessed and fixed at N100, 000.00 (One Hundred thousand).
The afore-mentioned costs to be paid before the Defendant/Applicant takes further steps to defend the case. As a warning to prevent further exercise in futility, the Defendant/Applicant is to file an undertaking to defend the suit with due care, diligence and determination, failure (sic) which the judgment of 15th October, 1997 shall be restored. Above terms and conditions setting aside the judgment to be fully complied with by the applicant before return date”.
(Italics by the trial Court).
The above unlawful reasons are irrelevant considerations applied by the trial court in exercising his discretion to set aside the default judgment. Its unreasonableness can be demonstrated as follows:-
(a) Accusation of stalling the proceedings by seeming lack of applicant and its counsel’s zeal.
(b) Uncalled and unjustified costs of N100, 000.00 against appellant.
(c) Full payment of costs before appellant takes further steps in subsequent proceedings.
(d) Warning to appellant and his counsel (which is tantamount to judgment or conviction).
(e) Filing in court of an undertaking by the appellant to defend the suit with due care, diligence and determination.
(f) Full compliance with a, b, c, d and e above cumulatively.
(g) Restoration of the default judgment of 15/10/1997 if a, b, c, d, e and f are not complied with.
There is no doubt in my mind, that the above ancillary orders and terms and conditions made by the learned trial judge, are outside the provisions of Order 27 rules 4 and 11 of the High Court (Civil Procedure) Rules 1989 of Akwa Ibom State, and to that extent are irrelevant and not based on judicial and judicious discretion. There is no legal principle on which such extraneous considerations are based.
Whereas in this case as analysed above, in the exercise of judicial discretion, a trial judge takes into consideration irrelevant issues, an Appellate Court will be justified in interfering by setting aside the discretion. See National Bank of Nigeria Ltd Vs NET (1986) 3 NWLR (Pt 31) Page 667.
I am satisfied that what the learned trial judge stated in his ruling on 19/10/1998 are irrelevant which led him into serious errors in the exercise of his discretion by restoring the default judgment which he had set aside on 15/10/1997. There was no basis for making the ancillary orders and the subsequent restoration of the default judgment. I set aside the irrelevant considerations and the subsequent order made on 26th January, 1999 in which the judgment was restored. Issue No.1 is resolved in favour of the appellant Bank.
The appellants issue No.2 is whether appellant had fair hearing when the final judgment was delivered on 26/1/1999. Learned counsel referred us to the record of proceedings and especially to the proceedings of 23/11/1998, 19th January, 1999, and 26/1/1999 respectively, counsel contended that the trial court did not issue out hearing notices to the appellant before the oral application was made by the respondent for restoration of the judgment.
I have carefully read the record of proceeding as from 23rd November, 1998 to 26th January, 1999. On 23/11/1998 the respondent’s counsel, J.J. Edem Esq. was in court, but the appellant’s counsel was absent. Also the appellant Bank was not represented. But appellant’s counsel, one C. Attah wrote to the court, seeking for an adjournment on the ground “that they want to meet their obligation”, what ever that means.
Respondent’s counsel said he had no objection and the court adjourned the matter to 19/1/99 for mention. There was no order that the appellant should be served hearing notice.
On 19/1/1999, the record shows that the plaintiff/respondent was in court but defendant now appellant was absent. No counsel for any party. It is stated that “Court could not sit due to public holiday and case adjourned to 26/1/99 for mention. It was signed by one E. E. Akadah – Principal Registrar. There is no order or directive that both parties were to be notified of the adjourned date. Surprisingly, however, on 26/1/1999, only the respondent was in court with his Counsel.
Appellant and her counsel were absent. Since there was no order on 19/1/1999 to inform parties of the adjournment to 26/1/1999, it was unfair on the part of the trial court to entertain the oral application of the respondent to restore the set judgment without putting them on notice. This has offended the rule of fair hearing and has occasioned a miscarriage of justice.
Trial Courts are enjoined to ensure that hearing notices are issued on parties before embarking on trial of any matter before them. Right to fair hearing is a constitutional right enshrined under section 33 of the 1979 constitution and now section 36 of the 1999 Constitution of the Federal Republic of Nigeria. See Agena Vs Katseen (1998) 3 NWLR (part 543) 560, 565-6 Mbadinuju Vs Ezuka (1994) 8 NWLR (part 364) 535 and Scott. E. Muakpor Vs Ukavbe (1975) 2 Sc. 41.
I am satisfied that on 19/1/1999, and 26/1/1999 when the respondent orally applied for judgment, the appellant and his counsel were not in court because there was no order for issuance and service of hearing notice or adjournment on them.
I therefore resolve issue No.2 in favour of appellant, namely, appellants fundamental right to fair hearing was breached.
On the whole, the appeal is meritorious and is hereby allowed. I set aside the order of cost of N100, 000.00 and all the other ancillary orders made by the learned trial judge on 19/10/1998 except the order setting aside the default judgment for want of pleadings. I also set aside the judgment of the learned trial judge delivered on 26/1/1999. In its place, I order that the case be sent back to Akwa-Ibom State Judiciary to be tried on its merit.
I make no order as to costs.
Other Citations: (2003)LCN/1444(CA)