Union Bank Of Nigeria PLC V. Associated Nigeria Hospital Equipment Limited & Anor (2014)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

THERESA NGOLIKA ORJI-ABADUA, J.C.A.: (Delivering the Leading Judgment)

The Respondents as per the Notice of Appeal dated 4/8/2008 commenced an action against the Appellant at the Kano state High Court in suit No. K/694/2002 stating that in 1999, the 1st Respondent applied for an overdraft facility, the Appellant demanded by a letter dated 29/3/99 that the overdraft be secured with a landed property covered by a Statutory Certificate of Occupancy No. LKN/RES/RC/82/414 belonging to the 2nd Respondent.

The 2nd Respondent is the Managing Director of the 1st Respondent. Prior to the grant of the said overdraft, the Appellant had granted to the 1st Respondent an overdraft of N1.5 million by a letter dated 7/11/97 and secured with the same property, which was then transferred to the latter facility. From the averments, the 1st Respondent had problem with the repayment of the overdraft which allegedly caused them, and their sister Companies to be defamed.

It was asserted that in October, 2001, the loan granted to the 1st Respondent was liquidated, but up till November, 2001, the Appellant had not delivered the Deed of Release. A letter was addressed to the Appellant to issue the same without delay which the Appellant did not adhere to. Several Reminders were dispatched to the Appellant, it still refused to budge.

This, allegedly, generated a lot of losses on the part of the Respondent in terms of other overdraft facilities it could have obtained with the same Certificate of Occupancy that was withheld by the Appellant. It was averred that they suffered colossal losses running over N50 million due to lack of finance. As a result, the Respondents instituted suit No. K/694/2002 against the Appellant wherein they claimed as follows:

“a. Declaration of Court that the defendants are under contractual obligation and duty to deliver to the Plaintiff a Deed of Release of their Certificate of Occupancy from encumbrance shortly after the Plaintiff liquidated the overdraft facilities obtained from them of which the Certificate of Occupancy No: LKN/RES/RC/82414 was pledge as collateral, with or without a formal demand for same.

b. Order of Specific Performance compelling the defendant to deliver to the Respondents within 48 hours of judgment of this Honourable Court, the Deed of Release over Statutory Certificate of Occupancy No: LKN/RES/RC/82/414

c. The sum of N5.5 Million (Five Million Five Hundred Thousand Naira only) being General and Special Damages for breach of contract and loss occasioned as a result of the failure and unlawful refusal of the defendant to release from encumbrance the Plaintiffs Certificate of Occupancy earlier pledged as security for loan from them, despite repeated oral/written demands and pleas by the Plaintiff. Plus 10% Court rate of interest from date judgment till the judgment debt is liquidated.”

The Appellant filed an Amended Statement of Defence and Counter-Claimed against the Plaintiffs thus:

“(a) The sum of N600,000.00 only for the professional fee of the Solicitors defending the suit.

(b) indemnify the Defendant against any loss and damages incurred arising from this suit including any damages that may be awarded in favour of the Plaintiff in this suit.

(c) 10% interest after judgment.”

The suit was slated for trial which the lower Court proceeded with. At the hearing, facts emerged that a similar suit No. K/697/2001 instituted by the 2nd Plaintiff and some others against the Appellant and two others claiming the same reliefs had already been adjudicated upon by Saka Yusuf, J before High Court No. 2 Kano State High Court, between them, and, which was a subject of appeal. During address, the Counsel addressed the Lower Court on the point and the lower Court then held that the issues in the instant matter had already been adjudged and determined in the said suit No. K/697/2001 presently on appeal.

In consequence thereto, the lower Court dismissed the Respondents’ claims for special and general damages for breach of contract. From the record, it seems that no clear pronouncement was made in respect of the Appellant’s counter-claim. Following, the lapse, the Appellant appealed challenging the said decision on two grounds of appeal thus: