Standard Manufacturing Company Limited & Anor V. Sterling Bank PLC (2015)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A. (Delivering the Leading Judgment)

This Appeal stems from the judgment delivered by Honourable Justice S.A. Onigbanjo of the High Court of Lagos State on the 20th of April, 2011 in Suit No. ID/436/2007, wherein he dismissed the Appellants’ Counter Claim in its entirety and entered judgment in favour of the Respondent in the sum of N12,955,003.02 with interest at the rate of 19% per annum until the final liquidation of the judgment debt.

The learned Judge in the alternative, ordered the sale of the 2nd Appellant’s property at No. 6, Ogo Oluwa Avenue, Ajuwon, Iju, Agege, Lagos covered by Lagos State Certificate of Occupancy registered as No. 5 at Page 5 in Volume 1955 of the Lagos State Land Registry Office, Alausa, Ikeja.

The Respondent by its Amended Statement of Claim dated 22nd October, 2008 sought the following reliefs:-

(a) The sum of N12,955,003.02 being the debit balance standing against the 1st Defendant’s account with the Claimant as at 7th of November 2006 in respect of credit facilities granted by the Claimant to the 1st Defendant at its request as well as bank charges and interest thereon which the 2nd Defendant guaranteed in writing to repay.

(b) Interest on the said sum of N12,955,003.02 at the rate of 19% per annum from the 8th of November 2006 until the judgment is given and thereafter at the same rate until the whole amount is fully liquidated.

AND OR:

(c) AN ORDER of sale of the 2nd Defendant’s property situate at No. 6, Ogo Oluwa Avenue, Ajuwon, Iju, Lagos and covered by a Certificate of Occupancy registered as No. 5 of Page 5, in Volume 1995 at the Lagos State Land Registry office Alausa, Ikeja which the 2nd Defendant deposited with the Claimant as security for the credit facilities granted by the Claimant to the 1st Defendant in order to liquidate the debit balance standing against the 1st Defendant’s account with the Claimant which the 2nd Defendant guaranteed to repay.

The brief statement of facts of this appeal flows from the Banker-Customer relationship between the Appellants and the Respondent herein. The Respondent granted the 1st Appellant an overdraft facility in the sum of N5,000,000.00 vide a request in a letter dated 12th August, 2003, to finance the 1st Appellant’s business subject to terms and conditions of the said letter.

As security for the overdraft, the 2nd Appellant deposited with the Respondent, the original copy of his Certificate of Occupancy over his property situate at No. 6, Ogo Oluwa Avenue, Iju, Ajuwon, Agege, Lagos State and registered as No. 5 in Volume 1955 at the Lagos State Land Registry Office Alausa, Ikeja, as well as undertake to guarantee the overdraft.

When the overdraft fell due and remained unpaid, it was restructured at the request of the Appellants to a term loan of N8,500,000.00 with an agreement that the term loan will be liquidated in ten monthly installments of N925,755.14, which the Appellants still failed to repay despite repeated demands by the Respondent and her solicitor. To this extent, the Respondent sued the Appellants at the Lower Court as per the reliefs earlier stated.

Dissatisfied with the decision of the court, the Appellants through the Notice of Appeal, dated the 4th day of May, 2011 appealed against the said judgment of S.A. Onigbanjo, J.

The Appellants’ Brief of Argument is dated and filed on 20th of June, 2014, but deemed properly filed on 22nd October, 2014; same was settled by Johnson Fabilola, Esq. of Ayodele Olugbenga & Co. The Respondent’s Brief of Argument is dated and filed on 5th of February, 2015, deemed properly filed on 11th May, 2015 and settled by Ayodele Akintunde FCIArb. of Ayodele Akintunde & Co. The Appellants’ Reply Brief is dated and filed on 25th March, 2015 but deemed on 11th May, 2015.

The Appellants distilled three issues for determination thus: –