Union Bank Of Nigeria Plc V Ravih Abdul & Co. Limited (2018)

LAWGLOBAL HUB Lead Judgment Report

SIDI DAUDA BAGE, J.S.C.

This is an appeal against the decision of the Court of Appeal, Lagos division delivered on the 18th February, 2013 wherein the lower Court allowed the appeal and granted all the reliefs sought by in the Respondent’s Amended Statement of Claim. Being dissatisfied with the Judgement of the lower Court, the Appellant appealed to this Court vide a Notice of Appeal dated 19th April 2013 as contained in pages 440-443 of the Record of Appeal.

The Appellant’s appeal is hinged on three grounds. Ground one alleges that the lower Court erred in law when it held that the Appellant was in breach of the letter of credit without giving effect to Exhibits D2, D2A, and D2B all which clearly established that payment was made in respect of the only letter of credit SF/93/60437 opened in the transaction.Ground two alleges error of law to the extent that the lower Court held that Exhibits D2, D2A, and D2B related to payments purportedly made in respect of different letter of credit. The third ground related to error of law by the lower Court when it held that the reliefs sought and proved by

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the Respondents at trial Court inclusive of damages are granted.

SUMMARY OF FACTS:

On the 26th April, 1993, the Respondent applied to the Appellant for an irrevocable Letter of Credit in the total sum 5,240.36 in favour of Vertika International Ltd, Cheshire UK. The Letter of credit No. SF/93/60437 was opened by the Appellant on the request of the Respondent, which was to expire on the 12th August, 1993. At the request of the Respondent, validity period of the Letter of Credit was extended to 31st day of October 1993. On the 30th September, 1993, the original shipping document of the goods supplied by the beneficiary (Vertika International Ltd) was delivered by the Respondent to the Appellant who was to forward same to the correspondent bank, Barclays Bank UK for payment to the beneficiary.

The Appellant acknowledged receipt of the shipping documents, stamped and forwarded same to the corresponding bank. The Appellant gave a Certified True Copy (CTC) of the shipping (Exhibit P11) to the Respondent to clear the goods supplied on the condition that the Appellant will forward the original shipping documents as

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agreed to the corresponding bank (Barclays Bank, UK) for payment to the beneficiary.

The Appellant is alleged to have traded with the Respondent’s foreign exchange, failed or refused to forward the shipping documents to the corresponding bank to enable it pay the value of the Letter of Credit to the beneficiary as a result of which no payment was made to the beneficiary (Vertika International Ltd) during the lifetime of the letter of credit and thereafter.

In delivering its judgement on 18/2/2013 the Court of Appeal in a split decision allowed the appeal and granted the reliefs sought by the Respondent herein as contained at pages 409-439 of the Record of Appeal. The appellant herein being dissatisfied with the said Judgement filed a Notice of Appeal to this Court (Pages 440-443 of the Record).

ISSUES FOR DETERMINATION:

The Appellant formulated four (4) issues for determination at page 4 of the Appellant Brief of Argument, thus:

“(1) Whether Vertika International Ltd has paid the sum of 5,240.36 pounds being the value of the confirmed irrevocable letter of credit No. SF/93/60437 opened in its favour having regard to Exhibits D2, D2A,

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and D3B and if answer is in the affirmative, whether the Appellant is in breach of the terms of the letter of credit (Ground 1)

2) Whether or not Exhibits D2, D2A, and D3B relate to another letter of credit No. SF/95/60437 other than letter of credit no. SF/93/60437 in which the transaction involving the beneficiary known as Vertika International Ltd, the Appellant, the Respondent and Barclays Bank of England was based on (Ground 2).

3) Whether or not Exhibits P10, P16 and P17 are in conflict with Exhibits D2, D2A, and D3B all of which were placed before the trial Court (Ground 3).

4) Whether the reliefs sought by the Respondent as per the amended Statement of Claim dated 24th September, 2003 were proved to warrant the granting of same by the Court of Appeal (Ground 4).”

On its part, the Respondent also formulated two issues for determination at paragraph 4.0 (1-2) of its Respondents Brief dated and filed 2nd December, 2013, thus:

“1) Whether the Court of Appeal was right in holding that the Appellant was in breach of the terms of the Letter of Credit no. SF/93/60437 by reason of the

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Appellants failure to pay the beneficiary of the Letter of Credit (Grounds 1, 2 and 3 of the Notice of appeal).

2) Whether the Court of Appeal was right in holding that the Appellant was liable to the Respondent in damages and in granting the prayers sought (Ground 4 of the Notice of Appeal).”

The issues formulated by the parties are similar in substance to the extent that the questions for determination seek to unravel if there has been a breach of the terms of Letter of credit SF/93/60437 based on the totality of the evidence before the trial Court to occasion the award of damages awarded in favour of the Respondent against the Appellant. I have put the issue in con for the purpose of determination of this appeal, thus:

“Whether the Appellant was in breach of the terms of the Letter of Credit No. SF/93/60437 having regard to Exhibits D2, D2A, and D3B to entitle the Respondent to the relief sought for damages for breach.”

CONSIDERATION OF ARGUMENTS AND RESOLUTION OF ISSUE:

The main contention of the Appellant is that the beneficiary has been paid the sum of 5,240.36 being the value of the letter of credit. In proof of the assertion, the

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Appellant tendered Exhibit D2 dated 16th May 1997 from Barclays Bank, London. The Appellant also stressed that, to show proof of payment, it tendered Exhibit D2A which confirms payment to Vertika. Exhibit D, the Appellant further contends, shows that the beneficiary ‘has definitely received the proceeds under the letter of credit’.

The Appellant contends that by virtue of Exhibits D2, D2A and D2B, it has been shown clearly that the beneficiary, Vertika International Limited did receive the sum of 5,240.36 from Barclays Bank, being the value of the letter of credit No. SF/93/60437 contrary to the claim of the Respondent. The Appellant submits that the burden of proving a particular fact is on the party who asserts it and the onus shifts from side to side where necessary by adducing further evidence. The Appellant cited Sections 135 to 137 of the Evidence Act, now Section 131 to 133 of the Evidence Act 2011 and the cases of ADEGOKE VS ADIBI (1992) 5 NWLR (Pt.242) 410, AGU VS NNAJI (2003) FWLR (Pt.139) 1537, ONWUAMA VS EZEOKOLI (2002) 5 NWLR (Pt.760) 353, OYOVBIARE VS OMAMURHOMU (2001) FWLR (Pt.68) 1129 and IKE VS UGBOAJA (1993) 6 NWLR (Pt.301) 539.

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The Appellant contended that by tendering Exhibits D2, D2A and D2B in evidence, the burden of proof shifted to the Respondent to disprove that position. The Appellant contended further that, contrary to the position of the lower Court, the Respondent and the Beneficiary, Vertika International Ltd were in breach of duty to present relevant documents to Barclays Bank London as required, which failure made the Appellant to write the Respondent on 8th July 1994 as contained in Exhibit D4. The Appellant contended further, as contained at page 239 of the Record of Appeal that the beneficiary is to be blamed for non-presentation of documents to the advising bank and direct shipping of goods to Claimant on its instructions.

The Appellant further contended while arguing its issues two and three that the lower Court was of the erroneous view that the payment of the sum of 5,240.36 to Vertika International Limited was effected in respect of letter of credit no. SF/95/60437 and not on the letter of credit which had reference Number SF/93/60437. The Appellant submitted that there is only one letter of credit in the entire transaction

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involving the Beneficiary known as Vertika International Ltd, the Appellant, the Appellant and Barclays Bank of England and the letter of credit is SF/93/60437 (and no other).

The Appellant further submitted that there was only one transaction for letter of credit covering the sum of 5,240.36 and the reference number MRDC 4059160 has remained constant and regular. The Appellant cited the case of UBN PLC VS SPARKLING BREWERIES LTD. (1997) 5 NWLR (Pt.505) Page 344 at 353, Para. A-B; and AKINSANYA VS UBA LTD. (1986) 4 NWLR (Pt.35) at 273. The Appellant contended that the SF/95/60437 on Exhibit D2 and D4 as against SF/93/60437 was merely a typographical error as there was only one letter of credit in the entire transaction, and to hold otherwise is to hang on technicality. The Appellant submitted that an appellate Court will always lean in favour of doing substantial justice in a case rather than hanging on technicality, citing the case of ATANDA VS AJANI (1989) 3 NWLR (Pt.111) 511, NNEJI VS CHUKWU (1988) 3 NWLR (Pt.810) at 184.

The Appellant contended that having established payment to the Beneficiary Vertika international Ltd through Exhibits D2,

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D2A and D2B, the burden now shifts on the Respondent to prove the contrary, and cited the case of ONUH VS IDU (2002) FWLR (Pt.94) 66 at 79-80, to justify this position. The Appellant contended that having shown that Vertika International Ltd has been paid 5,240.36 the value of the letter of credit in the argument canvassed above, a consideration of the other claims by the Respondent becomes unnecessary because all other claims for damages were anchored and tied down to the fact of perceived non- payment of Vertika International Ltd. In view of the foregoing, the Appellant urged this Court to uphold this appeal, set aside the judgement of the lower Court and restore the judgement of the trial Court.

On its part, the Respondent submitted that parties and Courts are bound by the pleadings and are not expected or allowed to embark on a wild goose chase, as evidence a variance with pleadings goes to no issue. The Respondent cited the case of OHOCHUKWU VS ATTORNEY-GENERAL RIVERS STATE (2012) All FWLR (Pt.626), 412 at 432 Paras. B-C and ADEKEYE VS ADESINA (2011) All FWLR (Pt.571, 1509 at 1526 per Onnoghen, JSC (as he then was).

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The Respondent argued that Exhibits D2, D2A and D2B have no relationship with the letter of credit pleaded as No. SF/93/60437 in respect of which issues were joined and evidence led at the trial. The Respondent contended that payment said to have been made to the beneficiary in September 1994 as shown in Exhibit D2 are in conflict with letters written by the Appellant to the Respondent in Exhibits P 10 dated 27th July 1995. This is because Exhibits P16 and P17 of 28th January 1997 and 29th January 1997 respectively demonstrated that payments have not been made as at the days of writing those exhibits.

The Respondent contended that aside from the pitfalls of Exhibits D2, D2A and D2B as having different letter of credit numbers, those Exhibits are secondary evidence in respect of which no foundation were laid for their admissibility. On this contention, the Respondent cited the case of ONOCHIE VS ODOGWU (2006) All FWLR (Pt.317) Page 544 at 564-565 Para H-A.

On damages, the Respondent contended that special damages may be proved where the party claiming it gives evidence to support same and which evidence is unchallenged or uncontested. On this contention, the

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Respondent cited the case of ARABAMBI VS NIDB LIMITED (2006) All FWLR (Pt.295), Page 581 at 609. The Respondent further contended that the essence of special damages is to compensate for the loss sustained, and that once a breach of contract is established, damages must flow with a view to restoring the party affected to the position he would have been if there had been no breach of contract. The Respondent cited the case of CAMEROON AIRLINES VS OTUTUIZU (2011) All FWLR (Pt.570), Page 1260. The Respondent submitted that the Respondent is entitled to the reliefs being sought in the appeal. In sum, the Respondent urged the Court to sustain the judgement of the lower Court.

As hinted above, the sole issue cognisable for the purpose of determining this appeal is:

“Whether the Appellant was in breach of the terms of the Letter of Credit No. SF/93/60437 having regard to Exhibits D2, D2A, and D3B to entitle the Respondent to the relief sought for damages for breach.”

In resolving the issue, I’ll pay particular attention to the evidence before the trial Court. This becomes imperative as the point of divergence is whether or not Vertika International

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Limited has been paid the sum of 5,240.36 being the value of the letter of credit in issue at the material time. Exhibit D2 was tendered by the Appellant which is a confirmation from the Barclays Bank London, which reads thus:

“Thank you for your letter dated 5th May, 1997, the content of which have been passed to our controversing office for their comments. At the moment, we are only able to confirm that the beneficiary has definitely received the proceeds under the letter of credit of September, 1994 (Emphasis added).”

Exhibit D2A dated 9th May 1997 also corroborated the position on the receipt of payment, thus:

Ref MRDC 405 9160

Dear Sir,

We confirm that we have received all funds under the above reference

Many thanks.

The contention of the Respondent that by Exhibits P8, P10, P16 and P17 Vertika International Ltd had not received value for the letter of credit is, in my considered view, misplaced in view of overwhelming evidence of the content of Exhibits D2, D2A, D2B and D3. These have not been debunked or sufficiently controverted by the Respondent. More compelling

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is Exhibit D2B which is a letter from the Beneficiary (Vertika International Limited) to the corresponding Bank (Barclays Bank, England) dated 9th May 1997 confirming receipt of all funds. The attempt of the Respondent to controvert the content of Exhibits D2 and D2B by Exhibit P8 would appear feeble and rather ludicrous. This is because Exhibit 8 is a statement of account from Vertika International which does not invalidate the content of Exhibits D2, D2A, D2B and D3. Much more compelling is Exhibit D2B from the Vertika International Ltd itself, which in clear terms, acknowledged receipt of value on the letter of credit.

The only reasonable conclusion to be drawn, unless otherwise controverted by equally credible, direct evidence, is that Vertika International Limited has been paid the sum of 5,240.36 pounds being value for the letter of credit. The Respondent has the option of shifting the burden of proof by adducing cogent, concrete and credible evidence to contradict the content Exhibits D2, D2A, D2B and D3. This is because in civil suits, unlike criminal cases, the burden of proofs keeps oscillating among the parties. The Evidence Act 2011 says it all in Sections 131-134.

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For the purpose of burden of proof in civil suit, the Act states thus:

131. BURDEN OF PROOF.

“(1) Whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist.

(2) When a person is bound to prove the existence of any fact it is said that the burden of proof lies on that person.”

132. ON WHOM BURDEN OF PROOF LIES.

“The burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side.”

133. BURDEN OF PROOF IN CIVIL CASES.

“(1) In civil cases the burden of first proving existence or non-existence of a fact lies on the party against whom the judgment of the Court would be given if no evidence were produced on either side, regard being had to any presumption that may arise on the pleadings.

(2) If the party referred to in Subsection (1) of this section adduces evidence which ought reasonably to satisfy the Court that the fact sought to be proved is established, the burden lies on the party against whom judgment would be given if no more evidence were

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adduced, and so on successively, until all the issues in the pleadings have been dealt with.

(3) Where there are conflicting presumptions, the case is the same as if there were conflicting evidence.”

134. Standard of proof in civil cases. The burden of proof shall be discharged on the balance of probabilities in all civil proceedings.”

The burden of proof placed on the Appellant would appear discharged if considered against the backdrop of the veracity of the content of Exhibits D2, D2A, D2B and D3. The Respondent needed to have done much more than it did to show that indeed, the Appellant breached the contract of the letter of credit by failure to pay the beneficiary (Vertika International Limited) despite the later having confirmed payment on the same letter of credit. For the contention of non-payment of the Respondent to avail, a statement from the Beneficiary or the corresponding Bank, like Exhibits D2, D2A, and D2B would have swayed the balance of probabilities in favour of the Respondent.

The law is that the burden of proof is on the party who would lose if no evidence were adduced. Generally, in civil

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proceedings the burden of proof though said not to be static, it is on the vulnerable party to lead credible evidence in proof to the contrary. SEE ADEGOKE VS ADIBI (Supra), ONWUAMA VS EZEOKOLI (Supra), OYOVBIARE VS OMAMURHOMU (Supra) and IKE VS UGBOAJA (Supra). See also ONOBRUCHERE VS ESEGINE (1986) 1 NWLR (Pt.19) 799; OJOMO VS DEN (1987) 4 NWLR (Pt. 64) 216; ABIODUN VS ADEHIN (1962) 2 SCNLR 305; REYNOLDS CONSTRUCTION CO. LTD. VS OKWEJIMINOR (2001) 15 NWLR (Pt.735) 87.

The onus and burden of proof lie on the Respondent in this suit. Regrettably, the Respondent has done little to discharge the burden. We must apply law as it is. The effect of failure to discharge the onus of proof in civil cases rests squarely on the plaintiff. This was correctly applied in the Judgement of the trial Court at pages 314-337 of the Record of Appeal as well as in the minority judgement of Adamu Jauro JCA at pages 432-438 of the Records of Appeal.

I agree with the contention of the Appellant that the lower Court misdirected itself when it held that the payment of the sum of 5,240.36 to Vertika international Limited was effected in respect of letter of credit No. SF/95/60437 and

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not on the letter of credit which had reference Number SF/93/60437. This is because, to all intent and purposes, there is only one letter of credit involving the Beneficiary known as Vertika International Ltd, the Appellant, the Respondent and Barclays Bank of England and the letter of credit is SF/93/60437 (and no other). The reference number MRDC 4059160 also has remained constant and regular which further shows that the parties are clear as to the actual letter of credit, which is reference Number SF/93/60437.

The contention of the Respondent that letter of credit Reference SF/95/60437 is different from SF/93/60437 for the purpose of denying payment, which have been acknowledged by corresponding bank and beneficiary, is to say the least, misplaced. It is a failed attempt at deploying technicalities to defeat justice. Technicalities can no longer defeat justice particularly where the facts and evidence coalesced in favour of the Appellant, as in this case. The Appellant’s contention is sound in law and logic to the extent that an appellate Court will always lean in favour of doing substantial justice in a case rather than hanging on technicality.

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See ATANDA VS AJANI (1989) 3 NWLR (Pt.111) 511, NNEJI VS CHUKWU (1988) 3 NWLR (Pt.810) at 184.

The above is informed by seemingly settled position that it is no longer fashionable to decide cases solely on technicalities as the Courts have deliberately shifted away from narrow technical approach in favour substantial justice. See MAKERI SMELTING CO. LTD. VS. ACCESS BANK (NIG.) PLC (2002) 7 NWLR (Pt.766) 447 at 476-477. The attitude of the Courts now is that cases should always be decided, wherever possible on merit to the extent that blunders, like in the instant appeal where typographical errors of stating letter of credit “No. SF/95/60437” is an issue against the obvious fact and evidence that, in reality, the parties are aware that their letter of credit had reference Number SF/93/60437. This is one instance where technicalities must, and should give way to substantial justice. See also

AJAKAIYE VS IDEHIA (1994) 8 NWLR (Pt.364) 504, ARTRA IND. LTD VS NBCI (1997) 1 NWLR (Pt.483) 574, DAKAT VS. DASHE (1997) 12 NWLR (Pt.531) 46, BENSON VS NIGERIA AGIP CO. LTD (1982) 5 S.C 1. ADEKEYE VS AKIN-OLUGBADE (1987) 3 NWLR Pt.60, at 214.

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In concluding, having satisfactorily established payment to the Beneficiary Vertika International Ltd through Exhibits D2, D2A and D2B, the burden now shifted to the Respondent to prove the contrary. Similarly, having shown that Vertika International Ltd has been paid the sum of 5,240.36, being the value of the letter of credit, the necessary conclusion to be made is that the Appellant has breached no contract to warrant the award of the damages and other claims in favour of the Respondent, as those claims for damages were anchored and tied down to the fact of perceived non-payment of Vertika International Ltd.

In view of the foregoing, the sole issue formulated above in this appeal is resolved in favour of the Appellant. This appeal is hereby upheld. The judgement of the Court below is hereby set aside and the judgement of the trial Court dated 23rd February 2007 is consequently restored.

I make no order as to cost.

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SC.314/2013