Peter Okeke & Anor V. Nicon Hotels Limited & Anor (1998)

LawGlobal-Hub Lead Judgment Report

MUHAMMAD, J.C.A. 

The suit which gave rise to this appeal was instituted before the Kaduna State High Court No.4 on the undefended list procedure. The claim of the respondent as plaintiff against the appellants as defendants jointly and severally were for:-

“1. The sum of N531.471.00 being outstanding amount due from the defendants to the plaintiff on account of hotel bills incurred by the 1st and 3rd defendants as guests of the plaintiff in its Nicon Noga Hilton Hotel Abuja at various dates between 9th May, 1996 and 24th June, 1996 which said bills the defendants have failed, refuest (sic) and neglected to pay despite repeated demands,

2.2 I per cent interest on the said amount from 25th June. 1996 until judgment and thereafter at 10 per cent per annum until the judgment debt is fully paid.

3. Costs of this action.

Mr. J.B. Daudu (SAN) for the 1st and 2nd appellant filed a notice of intention to defend the action. The learned trial Judge took arguments on the notice to defend from respective counsel for the panics and ruling was fixed for the 16th of December. 1997. In his ruling, the learned trial Judge had that a defence on the merit had not been disclosed which would warrant the transfer of the suit to the general cause list. Judgment was accordingly entered in favour of the respondent as per the writ of summons.

Dissatisfied, the appellants filed a notice of appeal to this court, The notice of appeal contained three grounds of appeal.

In compliance with our rules of court, parties filed and exchanged briefs of argument. Learned senior counsel for the 1st & 2nd appellants formulated only one issue for determination which is as follows:-

“Whether the notice or intention to defend and affidavit in support thereof filed on behalf of the 1st and 2nd appellants in defence of the respondents specific claims disclosed a defence on the merits such that the learned trial Judge upon the consideration ought to have transferred the matter to the general cause list and whether judgment ought to have been entered in favour of the plaintiff.”

Learned counsel for the respondent formulated the following issue:-

“Whether the lower court was justified in holding that the notice of intention to defend did not disclose any defence on the merit and having so decided, entered judgment for the respondent.”

Now, before delving into the determination of the issues formulated by the parties, I consider it pertinent to give a run-down of the background facts of this case as is gatherable from the printed record before the court. This is in order to allow for a fair grasp of the case which indeed is within a very narrow compass. The respondent is the proprietor and owner of the Nicon Noga Hilton Hotel. Abuja. The 1st appellant is the Managing Director of the 2nd appellant. Sometimes between the 9th day of May 1996 and 24th June, 1996, the 1st and 3rd appellants were at their request provided accommodation facilities by the respondent at its Abuja Nicon Noga Hotel. The 1st appellant was a guest at the Hotel from the 13th to the 15th day or June, 1996 whereas the 2nd respondent was a guest at tile same Hotel from 9th May, 1996 to 24th June 1996. Hotel bills in the sum of N531.471.00 were incurred. In partial settlement of the said bill, the 1st and 2nd appellants issued various cheques at various times all totaling to the sum of N272, 112.00. On presentations, all the cheques were dishonoured. Further cheques in various sums were issued by the 1st & 2nd appellants but these were never presented sequel to the previous dishonour of the first set of cheques. On coming to know that their cheques were dishonoured, the 1st & 2nd appellants promised to make good the said cheques. This, they failed to do and the respondent had to resort to filing the suit which resulted into this appeal.

On the hearing dale, learned SAN for the 1st & 2nd appellants informed the court that he was formally dropping the name of Mr. Sipa Mohammed which name appears on the record as the 2nd defendant/respondent. In his submission, learned SAN argued that the lower court ought to have transferred the suit to the general cause list rather than treating it on the undefended list. The notice of intention to defend on pages 31 – 32 of the record discloses several defences. The defences did consist merely of general denial but cogent reasons why the appellants should not be liable for the debts incurred by the 2nd respondent in the absence of any document to link the 3rd respondent’s reservation of accommodation to the appellants. Again, there were conflicts in the affidavits of both parties as to who would bear responsibility for Mrs. Mohammed’s indebtedness. There was therefore need for the learned trial Judge to call oral evidence to resolve such conflicts. It was also wrong of the learned trial Judge to raise the issue of defence of estoppel. Learned senior counsel urged us to allow the appeal and set aside the lower court’s judgment. The plaintiffs claim at the lower court should be dismissed or transfer same, at best, to the general cause list.

Learned counsel for the 1st respondent submitted that the appellants’ notice of intention to defend did not disclose a defence on the merit and the lower court was right to hold that the appellants did not make out a defence on the merits to the respondent’s case. He argued further that it were the appellants who checked Mrs. Sipa Mohammed (2nd respondent) into the Nicon Noga Hilton Hotel Abuja on 9th May, 1996. They paid the initial deposit of N30,000.00. further deposits were also made subsequently. By this, argued the learned counsel, the 2nd appellant represented that it was responsible for payment of the bills. The 1st appellant, as per the affidavit in support of notice of intention to defend, was the Managing Director or the 2nd appellant and all cheques issued to the respondent in the transaction between the parties, were signed and stamped by the 1st appellant. This connoted active knowledge and participation of the appellants as it was at appellants’ insistence and request that Mrs. Sipa Mohammed was checked into the hotel. As for the affidavit evidence before the lower court, learned counsel submitted that there was no conflict at all as the appellants failed m show the areas of conflict. And even if there were, the documentary evidence ought to assist the lower court in resolving such conflicts. Submitted further is that the existence or failure of the business transaction between the appellants and Mrs. Sipa Mohammed was never communicated to the respondent and would not be the basis to deny the respondent payment for services rendered. Lastly, learned counsel argued that the respondent had altered its position based on the appellants’ representation that they would be responsible for paying the bills incurred by Mrs. Sipa Mohammed. He urged us to dismiss the appeal.

Now let me observe from the start that the issues formulated by the parties are in accord in intent though different in terms. Both issues arc on whether the learned trial Judge was justified in refusing to transfer the suit from ‘undefended’ in the general cause list’. An undefended action is one which the defendant is not willing to contest, oppose or defeat the claim made against him by the plaintiff. In that event, the defendant need do nothing and on the date fixed for hearing, the suit or action will be heard as undefended suit and the court may give judgment for the plaintiff without his calling witnesses in proof of the claim. Such judgment is considered as judgment on the merits. See: U.A.C. (Technical) Ltd v: Anglo -Â Â Canadian Cement Ltd. (1966) NMLR 349. Such a suit is only maintainable in a claim for debt or liquidated money demand.

Liquidated demand is a debt specific sum due and payable by the defendant to the plaintiff. It must however be ascertained or capable of being ascertained as a mere matter of arithmetic. It includes a debt and may arise from contract, tort or otherwise.

Entry of a suit in the undefended list is not automatic. ‘The court must be satisfied that there are good grounds for believing that there is no defence to the claim before entering it in the undefended list.

But for a defendant who wants to defend the suit filed against him, rules of court require that he has to file a notice if his intention defend, within some time limit. This notice of intention to defend must be accompanied by an affidavit setting out clearly the grounds of his defence. Where the grounds set out are not entirely frivolous and if they show that there is a dispute between the parties then the suit will have to be transferred to the general list for hearing. See Olubusola Stores v. Standard Bank at Nigeria Ltd. (1975) 4 SC 51 at 55. Thus, the requirement of this rule is not satisfied by a general statement that the defendant has a good defence to the action. The court will certainly refuse to allow a defaulting defendant to defend an action brought on the undefended list if such a general averment is unsupported by particulars which, if proved, would constitute a defence to the suit. See: John Half & Co. (Liver Pool) Ltd. v. Henry Fajemirokun (1961) All NLR492; Eastern Nigerian Development Corporation v. Felix Durunna (1966-67) 10 ENLR 201. These requirements are happily provided by the Kaduna State High Court rules 1 & 3.The 1st & 2nd appellants, in compliance therewith, filed on the 29th day of October, 1997 a joint notice of intention to defend the action filed against them by the respondent. The notice was accompanied by a 15 paragraph affidavit. Thus, as I stated earlier, was moved on the 14th day of November, 1997 and a ruling thereon, refusing the suit to be transferred to the general cause 1ist, was delivered by the learned trial Judge on 16th of December, 1997. In refusing to transfer the suit to the general list, the learned trial Judge stated among other things:-

“After a careful perusal of the affidavit of the defendants accompanying the notice of intention to defend, I am unable to find any defence on the merit disclosed to warrant leave being granted for the defendants to defend the suit. This is because all I have before me is a general averment which is unsupported by any particular (sic) which would if proved, constitute a defence on the merit.”

It may not be convenient but I find it necessary to reproduce the 15 paragraph affidavit in support or the notice of intention to defend filed by the 1st & 2nd appellants and it reads as follows:-

“AFFIDAVIT IN SUPPORT

I, Chief Peter Okeke, male, adult, Xtian, businessman and Managing Director of Peter Tiwell Nigerian Limited of BX. 386 Sardauna Crescent, Kaduna do hereby make oath and declare as follows:-

1. That I have read the writ or summons on the undefended list in this action.
2. That although I am the Managing Director of the 2nd respondent, the latter, i.e. 2nd respondent did not have any transaction whatsoever as it relates to the reservation of accommodation, settlement of accrued bill or any other dealing in respect of liability purportedly incurred by the 3rd defendant or myself.
3. That I stayed in the plaintiff’s hotel between the 13th and 15th of June, 1996 and I settled the bill with a post dated cheque.
4. That contrary to the plaintiffs Exhibit ‘D’ I at no time requested for accommodation for or on behalf of the 3rd defendant Mrs. Sipa Mohammed neither did the 2nd defendant of which I am the Managing Director make such a request.
5. That the 2nd defendant is not corporate customer of the plaintiff and has never as a corporate body availed herself of plaintiff’s facilities.
6. That the 3rd defendant reserved accommodation for herself and held herself out as liable to pay her bills hence the plaintiff’s bills which was annexed to the affidavit sworn to by Frank Ikpe Esq.

discloses only the 3rd defendant’s name and nowhere does it disclose any connection with the 2nd defendant and myself.

7. That al the material time the 3rd defendant incurred these bills there was a business transaction between myself and the said 3rd defendant.
8. That it was only pursuant to a private agreement between myself and Mrs. Sipa Mohammed that I issued those cheques referred to in the plaintiff’s affidavit.
9. That all business transactions between myself and the 3rd defendant eventually broke down and I was relieved the cheques were not paid.
10. That the plaintiff ought to have entered into its own arrangements as to how the 3rd defendant was to pay for the accrued hotel bills.
11. That I neither held myself nor the 2nd defendant out to the plaintiff as being responsible for the plaintiff’s debt.
12. That the mere fact that I know the 3rd defendant does not make me liable for her hotel bills.
13. That I have since the termination of business relationship between myself and the 3rd defendant repudiated any liability to be responsible for the cheques amounting to N260,000.00 issued in respect of bills incurred by her paid as a result of our private arrangement.
14. That both myself and the 2nd defendant have defences to this action.
15. That I swear to this affidavit conscientiously believing same to be true and correct in accordance with the Oaths Act Cap 3.33 LFN 1990.

Sgd

Deponent

Sworn to at the High Court Registry, Kaduna

This 29th day of October, 1997

Sgd

Commissioner for Oaths”

It is clear to me that even from the contents of paragraphs 2,4,5,6,8,9, 10, 11, 13 & 14 of the affidavit, it is quite desirable that the parties be granted leave to be heard on oral evidence. These are material averments which certainly cannot be resolved except through oral evidence. In my view, such averments can by no means be regarded to be general or a mere sham. For instance, one may wish to ask: where is the evidence that it was the 1st & 2nd appellants that had undertaken to settle the hotel bills incurred by the 2nd respondent. Mrs. Sipa Mohammed? The issue of the cheques issued by 2nd appellant and bounced require a serious consideration as well. At any rate, there is no gain saying that the courts shall not allow an undefensable or sham claim to prolong its procedure and accrue more costs to the plaintiff. On the other hand however, where a defence disclosing some arguable issues has been put up, it is the duty of the court to consider it and grant leave to the defendant to defend the action. It is my view that the learned trial Judge was in error to have failed to consider the grounds put forward by the 1st & 2nd appellants which were adequate to establish a defence against the action. See: Jipreze v. Okonkwo (1987) 3 NWLR (Pt.62) 737 at 744; Ndukwe v. Domsey international Sales Corp. (1991) 7 NWLR (Pt.206) 680 at 688; Egbe v. Adejarasin (1985) 1 NWLR (Pt.3) 549 at 568; Letang v. Cooper (1964) 2 All ER 929; Kanada v. U.T.C. (Nigeria) Ltd. (Unreported) appeal No. No. CA/K/125/89 of 21st May, 1990.

On this point alone, I determine this appeal in favour of the 1st & 2nd appellants. The appeal is allowed. The ruling of Mokari J. of 16/12/97 is hereby set aside. It is directed hereby, that the suit be transferred to the general cause list for a hearing by another Judge of the Kaduna State High Court. Appellants are entitled to N2,000.00 costs from the respondent.

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Other Citations: (1998)LCN/0418(CA)