O. Kanu, Sons & Company Limited V. First Bank of Nigeria Plc (2001)
LawGlobal-Hub Lead Judgment Report
OGEBE, J.C.A.
The appellant sued the respondent in the High Court, Aba claiming the following reliefs in paragraph 28 of its statement of claim:
“(a) An order of this honourable court compelling the defendant to waive or absolve or write off the sum of N10,805,000.00 (Ten million, eight hundred and five thousand naira) being the cost of 2900 bales of stockfish destroyed by the Health Authorities as a result of the defendant’s negligence or alternatively.
(b) N30,000,000.00 (thirty million naira) as special and general damages for negligence.”
Pleadings were filed and exchanged by the parties and the respondent in its amended statement of defence included a counter-claim against the appellant in paragraph 32 thereof as follows:
“Whereof the defendant Counter-claims from the plaintiff as follows:-
(i) The said total sum of N38, 352,908.63 due on the plaintiff’s Account Nos. 004/021765/5 and 001020/017655.
(ii) An order directing the plaintiff to liquidate the said outstanding total sums within 3(three) months from the date of the judgment or as the honourable court may seem fit.
(iii) Interest on the said total capital sum or any balance thereon at the rate of N10.00 (ten naira) per centum per annum, commencing from the date of the judgment.”
The case of the appellant from the pleadings and evidence was that sometime between the months of August and September, 1989, the appellant was granted an increase on the loan and overdraft facility with interest rate fixed at 361/2% per annum by the respondent for the importation of stockfish upon the fulfillment of terms and conditions contained in exhibits B and M. The appellant accepted the facility by exhibit C and submitted a cash flow projection as required by the respondent as shown in exhibit C1 which demonstrated the appellant’s ability to import the said stockfish, sell same and pay back all money owed the respondent by 31st December, 1989. The respondent failed to forward the necessary documents relevant for the transaction especially in respect of letters of credit and thereby caused a delay of 23 days and as a result the stockfish which should have arrived before Christmas of 1989 did not arrive until the 12th January, 1990. Consequently, the stockfish could not be sold as a result of glut in the market. The stockfish was kept in the warehouse but continued to deteriorate and was eventually condemned by Health Authorities in April 1991 and a total of 2,900 bales of stockfish were destroyed causing the appellant considerable loss.
The respondent denied the claim and counter-claimed for the payment of the principal, loan and overdraft facilities plus interest in the sum of N38,352,968.63.
The trial court dismissed the appellant’s claim and gave judgment to the respondent in respect of its counter-claim against the appellant.
Aggrieved by that decision the appellant has appealed to this court and filed a brief of argument in which the learned counsel for the appellant formulated 4 issues for determination as follows:
“(1) Whether upon proper construction of section 15 of the Banking Act, Cap. 28, LFN, 1990 and exhibit V, the trial Judge was right in entering judgment in favour of the defendant/respondent on the amount claimed in the counter-claim.
(2) Whether in view of the evidence before the court, the trial Judge was light in holding that plaintiff/appellant failed to discharge the onus or burden of proof on the issue of negligence.
(3) Whether the undertaking in exhibit P that the defendant/respondent will not be held responsible for the delay in procurement of foreign exchange from Central Bank of Nigeria and remittance of same to the beneficiary of letters of credit can exculpate the defendant/respondent from being held responsible for the consequences of the delay in advising of the beneficiary of the opening of the letters of credit exhibits 0.01-04.
(4) Whether the failure of the parties to agree on what the appellant will pay as full and final statement of the debt before the destruction of the stockfish renders the appellant’s suit premature.”
The respondent also filed a brief of argument and identified 4 issues for determination as follows:
“(i) What infact was the contract of the parties (appellant/respondent) on the transaction, and further was the appellant’s claim founded on negligence (instead of breach of contract) properly conceived in law?
(ii) Was there any negligence established on the part of the respondent in the performance of the transaction, to warrant the appellant’s claims or any of it?
(iii) If the answer to (ii) is in the alternative could any of the losses or damage claimed (if proved) be properly referable to the respondent’s alleged negligence?
(iv) Was the respondent entitled to judgment on its counterclaim or has the appellant advanced any valid defence(s) to that counter-claim or any part of it?”
The appellant also filed a reply brief.
On the 1st issue, the learned counsel for the appellant submitted that by virtue of section 15(1) of the Banking Act the rate of interest charged on advances, loans or credit facilities by any licensed bank shall be linked to the minimum rediscount rates of the Central Bank subject to stated minimum and maximum rates of interest and the minimum and maximum rates of interest when so approved shall be the same for all licensed banks provided that differential rates may be approved for the various categories of banks to which the Act applies. The learned counsel argued that interest charged by the respondent was above the maximum allowed by the Central Bank.
In paragraph 13 of the appellant’s reply to the statement of defence and counter-claim it averred as follows:
“13. The plaintiff denies paragraphs 31 and 32 of the statement of defence and counter-claim and in answer thereto further avers as follows:-
(a) That the total sum of N38,352,908.63 the defendant alleged that is owed to it by the plaintiff is doubtful and will at the trial put the defendant to the strict test.
(b) The interest charged on the two respective accounts were unilaterally done by the defendant without communicating the plaintiff and same were not based on approved Central Bank of Nigeria Guidelines on interest rate on loans and overdraft facilities.
(c) The plaintiff further avers that it is the policy of Federal Government of Nigeria through the Central Bank of Nigeria Monetary Credit, Foreign Trade and Exchange Policy Guidelines to regulate interest rate on loans and overdraft. The plaintiff pleads and shall rely on the Central Bank of Nigeria Monetary Credit, Foreign Trade and Exchange Policy Guidelines for 1990, 1991, 1992, 1993 and 1994 respectively.
(d) The defendant has since January, 1990 ceased to send the plaintiff with the statement of account and the plaintiff has not received any statement of account or debit advise from the defendant since January, 1990 in respect of the aforesaid account.”
The averment in sub-paragraph (b) refers to two respective accounts for which interest were unilaterally charged not based on approved Central Bank of Nigeria Guidelines. There is no averment challenging the interest rate in respect of the overdraft facilities to cover the importation of the stockfish. The PW2, Chief Sir Maxwell Onuiri Kanu, the Managing Director of the appellant company while testifying under cross-examination at page 152 of the record stated thus:
“I don’t dispute the liability I undertook with the defendants. We agreed on it and signed in respect thereof.”
Earlier, in evidence at page 148 of the record he had stated:
“The nature of the interest granted to me by the defence was an opportunity interest. It was a special interest.”
My conclusion from all I have quoted above is that the question of whether the interest charged on the loan facility was above the rate permitted by the Central Bank was not an issue before the trial court and therefore it cannot be the basis of an issue for determination in this court. In any event, PW2 did not dispute liability on the stockfish loan facility. Accordingly, I strike out the first issue in the appellant’s brief as improper. I also discountenance the arguments therein.
On the 2nd issue the learned counsel for the appellant submitted that the respondent caused a delay in the shipment of the stockfish with the result that the stockfish did not arrive before Christmas 1989 and could not be sold. He said that the letters of credit were not forwarded in good time to enable the early shipment of the goods.
In reply to this, the learned Senior Advocate for the respondent submitted that there was no negligence on the part of the respondent. He said that even if there was delay with regard to the letters of credit, the stockfish did infact leave the port of export on the 22nd of November, 1989 which was much earlier than the 30th of December, 1989 which the appellant projected as the latest date for the shipping of the stockfish from Iceland. He said that what actually caused the loss was the hoarding of the commodity by the appellant from the time it arrived in January, 1990 up to April, 1991. He said that there was evidence that the appellant on taking delivery of the stockfish sold off 7,100 bales and stored up 2,900 bales from the 12th of January, 1990 up to the 9th of April, 1991 when the stockfish was confiscated by the Health Authorities and destroyed.
A party suing for negligence must show that the defendant owed him a duty of care and that he suffered damage in consequence of the defendant’s failure to take care. See the case of Agbonmagbe Bank Ltd. v. C.F.A.G. (1966) 1 ALL NLR 140.In this case, the appellant did not sue for any breach of contract rather it chose to sue for negligence. There was clear evidence that the projected date set by the appellant for the stockfish to leave Iceland was the 30th of December, 1989 and the stockfish actually left on the 22nd of November, 1989. The appellant therefore cannot attribute any negligence to the respondent for late arrival of the stockfish in Nigeria. There is no evidence whatsoever to support any negligence on the part of the respondent. The main responsibility of the respondent was to provide the loan facility to enable the appellant import the stockfish. The appellant from the evidence before the trial court was the cause of its own loss by hoarding the stockfish over a long period of time. What stopped the appellant from selling the stockfish by December of 1990? The appellant hoarded the stockfish with the hope that the price would rise in the market. It cannot hold the respondent responsible for its own failure or miscalculation.
The 3rd issue has been answered in my conclusion reached under the second issue because whether or not the respondent should be held responsible for the delay in procurement of foreign exchange from Central Bank of Nigeria and remittance of same to the beneficiaries of letters of credit is completely irrelevant as the importation of the stockfish was not delayed and no negligence could be attributed to the respondent.
On the 4th issue, the learned counsel for the appellant submitted that the inability or the failure of the parties to agree on what should be full and final settlement of the debt before the destruction of the stockfish does not render the suit premature as held by the trial court because the appellant’s claim is based on the value of the destroyed stockfish and the appellant could not wait indefinitely to negotiate with the respondent before going to the court.
I agree with this submission but it does not affect the merit of the case. The court still went ahead to try the appellant’s claim on its merit and dismissed it. It did not strike out the appellant’s claim as premature.
For all have said in this judgment, I find this appeal totally lacking in merit and I hereby dismiss it and affirm the decision of the trial court. The appellant shall pay costs of N5,000.00 to the respondent.
Other Citations: (2001)LCN/1004(CA)