Pareto Funds & Securities Ltd. V. International Trust Bank Plc. (2011)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

ISTIFANUS THOMAS, J.C.A. (Delivering the Leading Judgment)

By writ of summons, the plaintiff but now simply the respondent, filed on the 03-08-2004 against the defendant, but to be referred to as the appellant. The suit was commenced at the Federal High Court Port Harcourt presided by A.O. Faji, Judge, who delivered his judgment on 16-12-2005 against the appellant and it was on the undefended list.

The respondent’s claim on the writ was for the sum of N17,726,833.73 being the principal and “accrued profit sharing investment yield charge” as at 31-07-2007 arising from debt and thereafter profit sharing investment yield charge at the rate of 5.5% and then 10% post judgment interest.

The respondent’s writ on the undefended cause list was, supported by affidavits evidence wherein, it set out the claim against the appellant as follows:

“i. sometimes on 21-08-01 the appellant by Exhibit A, requested the respondent to invest N3,000.000 by disbursing same to the appellant’s customers, DNA PLUS Resources and McDaniel’s & Anad Associations. The appellant undertook to repay the principal sum plus profit sharing investment yield charge in 120 days.

ii. The respondent accepted the appellant’s offer by two letters written on 27-8-01 and 27-11-01 and marked Exhibits B and C respectively.

iii. The respondent advanced the sum of N3,000,000 on 28-8-01 to DNA PLUS.

iv. Contrary to their terms of agreement, the appellant failed to repay the principal sum and the accrued profit sharing investment yield charges.

After serving the appellant with the writ the appellant filed on 23-11-04, two motions on notice, namely for an order of the trial court to strike out the suit on the ground that the court had no jurisdiction to hear and determine the suit; and the other motion was for extension of time to file a Noticed of intention to Defend the suit. The trial court first considered the issue of jurisdiction and dismissed same on the finding that the Federal High court had the jurisdiction. The trial court also, granted the appellant extension of time to file its notice of intention to defend, and it was deemed property filed and served.

In the appellant’s notice of intention to defend, it raised the following relevant assertions as follows:

i. That it is a commercial banker under a license from central Bank of Nigeria and engaged in accounts keeping and giving credit facilities of its customer. That it does not engage in investment or merchant banking.

ii. That the appellant could not by its operating license, enter into profit sharing investment venture with the respondent.

iii. The DNAA PLUS Resources and McDaniel’s with the Port Harcourt branch and then applied for a credit facility of N8.500.000 and matter was referred to the head office of the appellant. That it is true that the respondent granted N3,000,000 facility to DNA Plus Resources and McDaniel’s & Anad Associates subject to a guaranteed from a reputable bank.

iv. That the appellant did not guaranteed the credit facility as this would require Board Approval.