Tkm Maestro Nigeria Limited v. Veritas Kapital Assurance Plc

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

JIMI OLUKAYODE BADA, JCA (Delivering the leading judgment)

This is an appeal against the Judgment of Lagos State High Court in suit No – LD/1284CMW/2015 Between:- Unity Kapital Assurance Plc. v. Tkm Maestro Nigeria Limited delivered on the 4th day of March, 2019 wherein Judgment was delivered in favour of the respondent by granting the four reliefs sought by the respondent.

Briefly the facts of this case are that the appellant approached the respondent on 14/1/2013 for a loan facility of the sum of N100,000, 000.00 (One hundred million naira) to enable it invest in a commercial paper MTN project worth N1,500,000,000,000.00 (One billion five hundred million naira).

The respondent confirmed the existence of the contract between the appellant and the MTN Nigeria and thereafter entered into a solid loan agreement with the appellant whereof the terms of the Loan Agreement upon which the relationship of the respondent and the appellant was based were clearly spelt out unambiguously before the respondent disbursed the sum of N100,000,000.00 (One hundred million naira) to the appellant.

The clear terms of the relationship between the appellant and the respondent are the principal sum of N100,000,000.00 (One hundred million naira) only, the interest at the rate of 19% per annum and the tenor was 180 days. The Loan Agreement was between the respondent and the appellant only.

The appellant failed to meet up its financial obligation as per the agreement for the liquidation of the loan, applied to the respondent and sought that the loan be rolled over for another 90 days at the same interest rate of 19% and the respondent approved the appellants request. But the appellant again failed to pay the sum of N100,000,000.00 (One hundred million naira) together with interest due to the respondent within the 90 days of rollover.

By a letter dated 9/1/2015 i.e. Exhibit 8, the appellant again pleaded for more time to fulfill its financial obligation on the Loan Agreement to the respondent. The appellant claimed that MTN Nigeria failed to settle it and again promised to pay up the loan and interest before 31/12/2014.

The appellant also failed to make the payment of the loan which situation made it clear that the appellant was merely playing pranks but never willing to liquidate the loan as mutually agreed by both parties and thereby left the respondent with the option of commencing an action against the appellant at the trial court to recover its exposure from the appellant.

The action was commenced on 19/10/2015. At the conclusion of the hearing, the trial court delivered judgment on 4/3/2019 in favour of the respondent and granted the four reliefs sought by the respondent.

The appellant who is dissatisfied with the judgment of the trial court appealed to this court.

The learned counsel for the appellant formulated 3 issues for the determination of this appeal. The issues are reproduced as follows:

i. The evidence before the trial court reveals that the underlining contract between the appellant and the respondent was an investment contract and not a loan transaction agreement. Having failed to properly evaluate the documentary evidence before it, was the trial court right when it held that the facility offered to the appellant was a loan and not an investment? (Distilled from grounds 1 & 2 of the amended notice of appeal.

ii. The claimant/respondents request for the sum of N146,964,383.51 and accrued interest was unsupported by any document or statement of account showing the defendant/appellants indebtedness. Rather than make an order of non-suit, was the trial court right when it granted the reliefs sought by the claimant/respondent? (Distilled from grounds 3 & 4 of the amended notice of peal).

iii. The defendant/appellant adduced evidence showing that the claimant/respondent was aware that any financial obligation under the Offer Letter will be satisfied from the proceeds of the contract with MTN Nigeria Communication Ltd. Was the trial curt right when it held that there was no privity of contract between the respondent and MTN Nigeria Communications Limited despite manifest evidence showing otherwise? (Distilled from ground 5 of the amended notice of appeal).