Stanbic Ibtc Bank Plc V. Longterm Global Capital Limited & Anor (2013)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

IBRAHIM MOHAMMED MUSA SAULAWA, J.C.A.(Delivering the Leading Judgment)

The instant appeal is a fall-out of the judgment of the Federal High Court, Lagos Judicial Division, delivered on December 6, 2010 in suit No. FHC/L/1491/2009. By the said decision, the lower court, coram C.E. Archibong, J; granted some of the reliefs sought by the Respondents in the writs of summons and the statement of claim thereof, dated December 23, 2009.

Being dissatisfied with the decision in question, the Appellant filed the notice of appeal thereof, dated December 7, 2010 which is predicated upon a total of seven grounds. However, on April 1, 2011, the Appellant filed an amended notice of appeal, which was deemed properly filed on July 5, 2011, pursuant to the leave granted thereto by this Court on that date.

BACKGROUND FACTS:

The fact and circumstances surrounding the appeal are not far-fetched. As gleanable from the records of appeal, the 1st Respondent is a limited liability company with the registered head office thereof situated at No. 5 Ayodele Street, Off Iwaya Road, Onike Yaba, Lagos. The 1st Respondent was hitherto known as LONGTERM VENTURES LIMITED. However, it later changed its name to LONGTERM GLOBAL CAPITAL LIMITED. The 2nd Respondent is the chairman, and indeed Chief Executive Officer (CEO), of the 1st Respondent.

The Appellant, on the other hand, is a commercial bank licensed under the Nigerian Laws to carry out banking business, and has its registered office at IBTC Place, Walter Island, Lagos. It equally has several other branches in the country, including the ones at Plot 10712, Idejo Street, Victoria Island, Lagos and at 70, Adetokunbo Ademola Street, Victoria Island, Lagos. The Appellant was hitherto known as IBTC Chartered (Bank) Plc, but later changed the name thereof to STANBIC IBTC BANK PLC.

On April 11, 2007, the Appellant granted an overdraft facility of N600 Million to the 1st Respondent for a tenor of 365 days and an option of rollover amongst other terms. Subsequently, on May 11, 2007 and July 17, 2007, the Appellant further granted two additional overdraft facilities to the 2nd Respondent in the sums of N400 Million and N250 Million respectively, for tenors of 365 days, and with options of rollover, amongst other terms. At the expiration of the respective overdraft facilities granted to the Respondents, the Appellant granted an extension to them to liquidate the facilities. Subsequently, the 2nd Respondent applied that the facility granted to him be merged with that of the 1st Respondent.

However, the case of the Respondents is that they have liquidated the overdraft facilities granted thereto by the Appellant. Thus, in consequence of the Respondents’ refusal to release the Respondents’ shares pledged for the over draft facilities granted thereto, the Respondents deemed it expedient to institute the said suit at the lower court. By the indorsement to the writ of summons and paragraph 50 (1 -14) of the statement of claim (contained at pages 1 -17 of volume one of the Record), the Respondents sought against the Appellant, the following reliefs:

50. WHEREOF the Plaintiffs jointly and severally claim against the Defendant as follows:

(1) A declaration that as at 8/7/2009, the Defendant was indebted to the Plaintiffs in the sum of N170,304,096.79, being the shortfall arising from the unconscionable and negligent sale of 28,745,400 units of Guaranty Trust Bank Plc shares owned by the Plaintiffs.

(2) A declaration that the Defendant is indebted to the Plaintiffs in the sum of N35,725,180.87, being the outstanding excess of interest charges debited to the Plaintiffs’ accounts by the Defendant.

(3) A declaration that the Defendant is also indebted to the 1st Plaintiff in the sum of N245,729.49 being the cash deposit which was not credited to the 1st Plaintiff’s account on 2/11/2008, with accrued interest at the rate of 16% per annum from 21/10/2009 when an official demand letter was written to the Defendant in that regard till date.

(4) A declaration that the Plaintiffs are entitled to offset their indebtedness to the Defendant with all the sums referred to in reliefs 1, 2 and 3 above, which were due to the Plaintiffs at the relevant time.

(5) A declaration that based on all the sums due to the Plaintiffs as enumerated in paragraph 37 of the statement of claim, the Plaintiffs have fully and finally discharged all their obligation to the Defendant in respect of the overdraft facilities.

(6) A declaration that the Defendant is not entitled to charge interest on the overdraft facilities granted to the Plaintiffs with effect from 31/10/2009.