Tesam Nigeria Limited V. South Texas Projects & Anor (2003)
LawGlobal-Hub Lead Judgment Report
KUMAI BAYANG AKAAHS, J.C.A.
The plaintiff applied for a writ of summons in suit No. W/206/98 in the Warri High Court presided over by Akpiroroh, J. (as he then was) claiming against the defendants –
“(a) The sum of N2,452,500.00 (Two million, four hundred and fifty-two thousand, five hundred naira) being sum owed the plaintiff by the defendants and part of which sum the defendants promised to pay on or before the 29th day of May, 1998 at Warri – a place within the jurisdiction of this Honourable Court.
(b) Plaintiff also claim (sic) the sum of 20% interest of the money owed the plaintiff by the defendants until same is liquidated by the defendants or judgment is delivered.
The defendants have refused, failed and or neglected to pay the above stated sum despite repeated demands for same by the plaintiff.”
On the same day that the application for the writ was made, the plaintiff filed a motion ex parte praying for the following reliefs viz:
“1. An order entering suit No. W/206/98 filed by the plaintiff/applicant herein on the 24th day of July, 1998, for hearing in the undefended list of this Honourable Court.
2. An order attaching the naira equivalent of the sum of N2,452,500.00 (two million, four hundred and fifty-two thousand, five hundred naira) from Chevron (Nigeria) Limited out of the $60,327 being monies currently standing to the credit of the defendant with Chevron (Nigeria) Limited.
3. An order directing Chevron (Nig.) Limited to pay forthwith the naira equivalent of the sum of N2,452,500.00 (Two million, four hundred and fifty two thousand, five hundred naira) to the Registrar of this Honourable Court out of the sum of $60,327 (sixty thousand, three hundred and twenty-seven US Dollars) being monies standing in credit due and payable to the defendant (sic) by Chevron (Nig.) Limited pending the determination of the motion on notice.”
The motion was supported with a 34 paragraph affidavit and several annexures. The motion was taken and all the prayers were granted. The suit was therefore entered under the undefended list.
Subsequently on 5th August, 1998 judgment was entered in favour of the plaintiff for the amount and interest claimed with N3,500.00 as costs. The defendants who got to know that judgment had been given against them through a tip off by an anonymous source later filed a motion dated 20/8/98 praying the court to set aside the judgment delivered on 5/8/98. The application and two other applications were heard by Narebor, J. and in a considered ruling delivered on 26/1/99, he declared the judgment, orders and the entire proceedings a nullity for want of service of the relevant processes including the writ of summons and thereby set aside the said judgment and other incidental orders. The plaintiff was aggrieved and appealed against the entire decision.
Three grounds of appeal were filed. As objection was taken to the grounds of appeal (even if improperly taken), I shall reproduce them and they are as follows:-
“Ground 1
The learned trial Judge erred in law when he made an order striking out the suit for want of jurisdiction, when there was no prayer seeking for such relief in the motion paper of the defendants/respondents.
Particulars of error
There was no prayer in the motion paper urging the Honourable trial Judge to strike out the suit for want of jurisdiction.
Ground 2
The learned trial Judge erred in law when he held that the suit be struck out on the ground that there was no proper service on the defendants/respondents.
Particulars of error
1. There was no application setting aside the order of substituted service made on the 28th of July, 1998.
2. That the order for substituted service made on the 28th of July, 1998 is still subsisting and has
not been set aside by any order of court.
That the defendants/respondents became aware of the suit when they were served by the order of substituted of (sic) service made on the 28th day of July, 1998.
Ground 3
The learned trial Judge erred in law when he held that the judgment delivered on the 5th day of August, 1998 be set aside.
Particulars of errors
1. That the judgment having been entered under Order 23 rule 4 of the Bendel State High Court (Civil Procedure) Rules, 1998 as applicable in Delta State, is a final judgment which can only be set aside on appeal.
2. The necessary processes were served on the defendants/respondents vide the order of substituted service, made on the 28th day of July, 1998, on their last known place of abode/business.”
Now the respondents have raised a preliminary objection to the three grounds of appeal I have already reproduced contending that they are incompetent and should be struck out as same do not relate to the decision/ruling appealed against and without the leave of either the lower court or in the circumstance this Honourable Court first sought and obtained.
In the brief of argument, learned counsel for the respondents submitted that the entire appeal is incompetent and should be struck out and dismissed but made submissions in paragraph 3.02 as follows:-
“We submit that grounds 1 and 2 of the notice of appeal are not related to the judgment in question. It is noteworthy that grounds 1 and 2 are grounds challenging the learned trial Judge for striking out the suit i.e. suit No. W/206/98.”
Learned counsel appeared to have abandoned his stand that the whole appeal is incompetent since ground 3 dealt with the setting aside of the judgment being appealed against. I agree with learned counsel that the judgment and all the other processes including the writ of summons in suit No. W/206/98 were set aside. Striking out has a connotation that some of the processes or orders made were allowed to stand. The best example that can be given is with grounds of appeal. Some grounds of appeal may be incompetent; hence an application can be made to have the incompetent grounds struck out and the competent grounds will be left to sustain the notice of appeal.
See Obala of Otan -Aiyebaju v. Adesina (1999) 2 NWLR (Pt. 590) 163.
Even if grounds 1 and 2 are struck out, ground 3 can still sustain the notice of appeal. The order made on 26/1/99 setting aside the judgment delivered on 5/8/98 was a final order and so no leave is required before an appeal can be made to this court as the appeal lies as of right against that judgment to this court. See: section 220(1)(a) of 1979 Constitution. Akoh v. Abuh (1988) 3 NWLR (Pt. 85) 696; Aqua Ltd. v. Ondo State Sports Council (1988) 4 NWLR (Pt. 91) 622.
An attempt was made to amend the grounds of appeal and the appellant’s brief but the application was struck out on 10/7/2001 and so the subsisting appellant’s brief is the one dated 13/4/99 from which two issues were formulated. The issues are:-
“( 1) Whether the learned trial Judge was right when he struck out the entire proceedings/suit for want of jurisdiction/proper service of the relevant processes considering the fact that there was no prayer seeking for such relief and/or requesting for the substituted service order to be set aside.
(2) Whether the learned trial Judge was right when he set aside the judgment delivered on the 5th day of August, 1998, having regard to the facts of this case whose judgment was delivered under the undefended list procedure.”
The respondents distilled one issue for determination which is:
“Was the learned trial Judge right in setting aside the judgment obtained under the undefended list as it affects this case?
The argument which learned counsel has advanced is that the court is not a father Christmas and cannot give to a party what he or she did not request for. He contended that the court went ahead to set aside the whole proceedings when the only prayer was for the judgment to be set aside. It is learned counsel’s submission that the judgment delivered on 5/8/98 cannot be set aside without first setting aside the order of substituted service made on 28/7/1998 and so the learned trial Judge was wrong in making a finding that “the order for substituted service … were not served as ordered on the defendants.” A number of cases were cited to support that submission that a court cannot grant a party more than what he requested for.
On the issue of failure to set aside the order of substituted service, learned counsel for the respondent argued that the learned trial Judge exercised his discretion judiciously and judicially when he found that the order for substituted service, writ of summons, placing the suit on the undefended list, the judgment under the undefended list and all other processes in the matter were not served as ordered on the defendants and therefore they were not aware. He argued that an order of substituted service is often resorted to where it is impracticable to serve the defendant at his known address, or where it is evident that the defendant is avoiding service.
In this case, the defendants/respondents categorically stated in their affidavit before the lower court that they did not have an office at the Chevron Yard Escravos or at all in Nigeria and this was not challenged. They also deposed to the fact that as at the date of the purported service of the relevant court processes, the defendants were no longer in Nigeria and that the appellant was their sole agent and representative in Nigeria through whom they did business in Nigeria. It was submitted that in the circumstances, even if the order of substituted service was rightly made, it was right for the learned trial Judge to set aside the judgment.
In the circumstance of this case, I do not agree with the submission of learned counsel for the appellant that an application to set aside the order of substituted service ought to have been made first before the one to set aside the judgment obtained under the undefended list can be entertained. I cannot see any radical difference between an application to set aside the judgment now on appeal and an application to set aside the order of substituted service of the processes issued which included the writ of summons since the ultimate effect in granting either application is the same.
Where the challenge made is to set aside the order of substituted service of the writ is granted, all consequent actions taken including the purported service of the writ by substituted means becomes a nullity.
Where a defendant seeks to set aside a judgment on the undefended list obtained in default of appearance after substituted service of court process on the ground that he never lived at the address where the substituted service was effected, that judgment must be set aside. See: Okereke v. Ejiofor (1996) 3 NWLR (Pt. 434) 90; Societe Generale Bank (Nig.) Ltd. v. John Adebayo Adewunmi (2003) 10 NWLR (Pt. 829) 526.
In the motion dated 20/8/98 in which the defendants now respondents sought to set aside the judgment delivered on 5/8/98, one of the grounds relied upon was that the necessary court processes were not served on the defendants, neither were the defendants aware of the said action. In paragraphs 3(a-b) and 7 of the affidavit of Obafemi Ailem in support of the motion, he deposed to the following facts:-
“3. That I have been informed by the 2nd applicant and I verily believe him as follows:-
(a) That he is the Managing Director of the 1st applicant and that neither himself nor the 1st applicant was served with the purported court processes and as at the date of the purported service he was not in Nigeria.
(b) That the 1st applicant does not have an office in Nigeria as its office is situated in Houston Texas in the U.S.A
7. That I have been further informed by the 2nd applicant and I verily believe him that the applicants do not have any office at Escravos and that the order of substituted service never got to their attention.
Although the plaintiff/respondent deposed to a counter-affidavit in which he stated in paragraph 7(b) that-
“That defendants/applicants’ office is at Chevron Yard in Escravos -”
the agency agreement between Tesam Nigeria Limited and South Texas Projects marked exhibit “A” proved to the contrary. The agreement commenced as follows:-
“This agreement made this 13th day of November, 1996 between South Texas Projects. Inc of Houston, Texas, U.S.A. (hereinafter referred to as the “principal company”) on the one hand and Tesam Nigeria Limited of 23 Effurun/Sapele Road, Enerhen Junction, Warri, (hereinafter referred to as the ‘agent’) on the other hand.
In consideration of this agreement made by each with the other, the principal company and the agent agree as follows:-
1. Agency: That Tesam Nigeria Limited, a Nigeria National Company, duly incorporated under the Companies and Allied Matters Decree, 1990, is the sole representing agent to South Texas Projects, Inc. of U.S.A. also, a duly registered company in the United States of America.”
Clause 1 of the agreement fully recognised the fact that the 1st defendant/respondent is a registered company in the United States of America and there is no indication that it had a registered office; neither was any intention expressed that it was going to be registered in Nigeria.
At the time the plaintiff/appellant applied for an order of substituted service, it was aware that none of the defendants/respondents had an address for service within the country. There was therefore no way the defendants/respondents could be served with any process.
A similar scenario played out in Okereke v. Okafor, supra and Achike, J.C.A. (as he then was) in dealing with the issue said at page 104:
“It is clear from the affidavit evidence placed before the lower court, the evidence overwhelmingly shows that appellant was not duly or personally informed of the summons taken out by the respondent against him, the substituted service in the circumstance of the case notwithstanding. It is another way of saying that there was failure to properly give notice of the case filed under the undefended list to the appellant. Since such notice is unquestionably mandatory under the rules of court, the proceeding before the lower court on 28/1/91 wherein he signed judgment in default against the appellant, although ostensibly valid should ex debito justiciae be set aside because of the fundamental vice or irregularity that goes to the competence of the court.
See Mohammed v. Mustapha (1993) 5 NWLR (Pt. 292) at 222. In such a situation, the lower court is competent to set aside its judgment given in such circumstances or even the judgment of a court of co-ordinate jurisdiction. See Okoye v. N.C. & F. Co. Ltd. (1991) 6 NWLR (Pt. 199) 501 and Ben Thomas Hotels v. Sebi Furniture Co. Ltd. (1989) 5 NWLR (Pt. 123) 523.”
It is to be observed that on page 17 of the records, before the order for substituted service was made, the bailiff reported that he made effort to serve process on the 1st and 2nd defendants on 24th day of July, 1998 at the Chevron Yard Escravos but could not locate them. The motion ex parte was thereafter taken and the order for substituted service of the writ of summons and enrolment of order were granted. This was on 28/7/98 and judgment on the undefended list was entered on 5/8/98 without ascertaining that the order for substituted service was carried out and an affidavit of service sworn to that effect which must be deposited in court.
The Supreme Court in S.G.B.N. Ltd. v. Adewunmi, supra held per Katsina-Alu, J.S.C. at page 542 that where a trial court fails to demand to know whether his order for substituted service was complied with and proof thereof which should be the copy of the affidavit of service sworn to by the bailiff, any judgment entered by him on the undefended list will be declared a nullity if application is made by the defendant to have that judgment set aside on the ground that he was not aware of the proceedings. See also Obimonure v. Erinosho & Anor. (1966) 1 All NLR 250. Scott – Emuakpor v. Ukavbe (1975) 12 SC 41 and Mbadinuju v. Ezuka (1994) 8 NWLR (Pt. 364) 535.
This issue has effectively disposed of this appeal to the extent that even if grounds 1 and 2 had been held to have been arisen from the judgment appealed against and the issue properly formulated, a striking out order of the entire proceedings for want of jurisdiction would still be proper in the circumstances and even if improperly made, no substantial miscarriage of justice can be said to have occurred.
This appeal has no merit and it is accordingly dismissed with N5,000.00 costs in favour of the respondents against the appellant. This appeal was deemed argued on the briefs duly filed as appellant’s counsel was absent from court on the date the appeal was fixed for hearing although there was proof of the service of hearing notice on the chambers of appellant’s counsel. See Order 6 rule 9(5) CAR 2002.
Other Citations: (2003)LCN/1470(CA)