United Bank For Africa Ltd & Ors V. Dike Nwora (1978)
LawGlobal-Hub Lead Judgment Report
In proceedings commenced in the High Court of Lagos State, the plaintiff, now respondent, claimed from the defendants, now appellants, jointly and severally, the sum of 3.75 million naira (N3,750,000) being anticipated profits accruing from a contract to supply cement entered into between the plaintiff and certain companies in 1974, the breach of which the defendants jointly and severally induced thus causing the plaintiff damage.
The plaintiff also claimed against the defendants, jointly and severally, in the alternative, the same sum of 3.75 million naira as damages for negligence in handling the plaintiff’s papers relating to the contract.
The plaintiff also claimed an account of all profits which accrued to the third defendant by reason of the induced breach of the contract aforesaid and payment over to the plaintiff of the amount so found.
The plaintiff filed in court and served on the defendants on 18th December, 1975, his amended writ of summons together with an amended Statement of Claim dated 17th December, 1975. When the defendants did not file their Statement of Defence within fourteen days from the date when the Statement of Claim was served on them as provided for in Order 18 rule 6 of the High Court of Lagos (Civil Procedure) Rules, 1973, (hereinafter referred to as the Rules), the plaintiff, on 10th February, 1976, applied to the High Court by motion on notice to the defendants for an order entering judgment as per his writ of summons and Statement of Claim.
On receiving the copy of the motion for judgment, each defendant, on 16th February, 1976, filed his Statement of Defence and served a copy of it on the plaintiff.
Later, on 5th April, 1976, the plaintiff’s motion for judgment was argued before Adefarasin, the Chief Judge of Lagos State, who delivered his ruling on 18th April, 1976. In his ruling, the learned Chief Judge observed:-
Having looked at the defendant’s Statement of Defence I think they should be given an opportunity to pursue their defence. Again, the plaintiff’s claim is for as large a sum as N3.75 million as anticipated profits arising out of a breach of contract. It does not seem to me right to enter an interlocutory judgment in these circumstances when a defence is before the court although technically defective.
He therefore refused to grant the plaintiff’s application for judgment. He, however, ordered-
that the defendants herein shall file their application for enlargement of time within which to file a defence within 10 days of the date hereof. It is this final order that the defendants are aggrieved about and in respect of which they had appealed to the Federal Court of Appeal where their appeal was dismissed. Still dissatisfied, they have now appealed to this court. We agree with learned counsel for the appellants that this appeal raised an important point of procedure capable of affecting the speed at which trials are disposed of in the High Court of Lagos State. We also think that it is capable of causing an unnecessary increase in the cost of litigation.
Having regard to the written arguments filed by both parties and the short submissions made before us at the hearing of the appeal, it became clear that the questions which call for determination are these-
Firstly, does non-compliance with the rules of court which prescribe the time for filing a pleading or other documents result in such pleading or documents being rendered void or treated as a nullity
Secondly, is a pleading or other document filed after the time prescribed by the rules valid but voidable at the instance of the opposite party who may, if he wishes, ask the court to set it aside and
Thirdly, will the court set aside such a pleading or document on an application made by one of the parties if the justice of the case requires it so to do but not otherwise
Fourthly, and in the alternative, where the opposite party takes no step to set aside the pleading or document, can the court, on a motion by that opposite party for judgment in default, such as the case in hand, after deciding that the pleading filed by the other party discloses a good and arguable case or a reasonable cause of action, and dismissing the motion for judgment, extend the time pursuant to Order 18 rule 6 of the Rules and award costs against the party in default
Finally, if the court has jurisdiction to extend the time and award costs as aforesaid, was the manner in which it is exercised in the circumstances of the case in hand based on correct principles, bearing in mind the need for speedy hearing of cases and for reducing cost of litigation to the minimum
Before answering these questions, we think it is necessary to refer to the appropriate rules. Order 18 rule 6, to which we were referred by both parties, reads- Where a defendant has entered an appearance, he shall file his defence within fourteen days from the time limited for appearance or from the service of the Statement of Claim, whichever shall be the later, unless such time is extended by consent in writing, or by the court or a Judge in chambers…
The effect of this rule, in the circumstances of the present case, is that the defendant must serve his defence within fourteen days after the Statement of Claim had been served on him. Such a defence is in effect automatically served under the rules and not by order of court, unless, as had been done by the plaintiff in this case, there has been a motion for judgment, in which case, the court, instead of granting the motion, may extend the time for filing the Statement of Defence by order of court. Because of the failure of the defendants to file their defence as provided for in the above rule, the plaintiff applied under Order 24 rule 11 of the Rules on 10th February, 1975 for an order delivering judgment in favour of the plaintiff for the sum of N3,750,000 against the defendants jointly and severally according to the plaintiff’s amended writ of summons and Statement of Claim.
Order 24, rule 11 (the provisions of which are similar to those of Order 19, rule 7(1) of the English Rules) reads-
In all actions other than those in the preceding rules of this Order mentioned, if the defendant makes default in filing a defence, the plaintiff may set down the action on motion for judgment, and such judgment shall be given as upon the Statement of Claim the court or a Judge in Chambers shall consider the plaintiffs to be entitled.
It is common ground that the action in the present case is not one of those referred to in rules 2 to 10 of Order 24: We also observe that in cases to which rule 11 applies, the default in serving a Statement of Defence cannot be followed by judgment without an order of court because the plaintiff must apply for judgment by motion.
Be that as it may, each of the defendants, before the application for judgment came up for hearing, filed his Statement of Defence on 16th February, 1975. The first point to be considered in these circumstances is the effect of such statement of Defence on the plaintiff’s application for judgment. It is provided in Section 12 of the High Court Law of Lagos State (Cap. 52 of the Laws of Lagos State) that in the absence of any provisions as to particular practice and procedure in the High Court Rules, the jurisdiction of the High Court, in respect of such practice and procedure, shall be exercised in substantial conformity with the practice and procedure, for the time being of the High Court of Justice in England. With the provision of Section 12 in mind, we will now refer to Order 2 rule 1(1) of the Rules of the Supreme Court, 1965, which are in force in the High Court of Justice in England (hereinafter referred to as the English Rules) and which, as we have pointed out above, are applicable to civil proceedings in the High Court of Lagos State. The relevant portion of Order 2 rule 1(1) of the English Rules reads:
1(1) Where at any stage in the course of or in connection with any proceedings there has, by reason of anything done or left undone, been a failure to comply with the requirements of these rules, whether in respect of time, or in any other respect, the failure shall be treated as an irregularity and shall not nullify any document.
By this rule, it is clear that the Statement of Defence filed out of time by each defendant in the present case is not a nullity. What then is it The answer to this question will be found in rules 1(2) and 2 (1) of the same Order 2, the relevant part of which reads- 1(2) the court may, on the ground that there has been such a failure as is mentioned in paragraph (1), and on such terms as to costs or otherwise as it thinks just, set aside any document
2(1) An application to set aside for irregularity, any document, shall not be allowed unless it is made within a reasonable time and before the party applying has taken any fresh steps after becoming aware of the irregularity.
When read together, the two rules quoted above show that a document, such as the Statement of Defence in the present case, if filed out of time is a voidable document. It remains a valid document until it is set aside. That being the case, it is always open to the party at whose option it may be set aside to waive his right to do so. In this connection, we refer again to the provisions of Order 18 rule 6 where a plaintiff is empowered by the rule to extend the time for filing the Statement of Defence by consent in writing. The leading case on the significance of a voidable document is MacFoy v. United Africa Co. Ltd. (1962) AC 152 where Lord Denning observed, rightly in our view, at page 160 as follows:-But if an act is only voidable, then it is not automatically void. It is only an irregularity which may be waived. It is not to be avoided unless something is done to avoid it. There must be an order of court setting it aside; and the court has a discretion whether to set it aside or not. It will do so if justice demands it but not otherwise. Meanwhile it remains good and a support for all that has been done under it. So will this Statement of Claim be a support for the judgment, if it is only voidable and not void.(The underlining is ours)
We recall that each of the three defendants’ Statement of Defence, filed as far back as 16th February, 1976, was before the learned Chief Judge when he delivered his ruling on 18th April, 1976. If the Statement of Defence, though irregularly filed, is valid until it is set aside, and learned counsel for the plaintiff/respondent conceded this, what then is the point in ordering the defendants to-file their application for enlargement of time within which to file a defence within 10 days of the date hereof. Admittedly, the learned Chief Judge has the discretion under Order 18 rule 6 to extend time to enable the defendants to file their defence. But such discretion, in our view, must be exercised at all times in the interest of justice.
The case of Gibbings v. Strong (1884) 26 Ch. 66 (CA) to which we were referred by learned counsel for the appellants, illustrates clearly, the futility of ordering that time should still be extended for filing a pleading which has already been filed in court out of time. In that case, it was held that on a motion for judgment for want of defence, if a defence has been put in, though irregularly, the court will not disregard it, but will see whether it sets up grounds of defence which, if proved, will be material, and if so, will deal with the case in such manner that justice can be done. As Lord Selborne, LC., rightly observed at pages 68-69 of his judgment in the court – When no defence has been put in, then, by Order 29 rule 10, of the rules of 1875, the plaintiff may set down the action or motion for judgment, and such judgment shall be given as upon the Statement of Claim, the court shall consider the plaintiff to be entitled to. This means that the court is to exercise some judgment in the case; it does not necessarily follow the prayer, but gives the plaintiff the relief to which, on the allegations in his Statement of Claim, he appears to be entitled; and if a defence has been put in, though irregularly, I think the court would do right in attending to what it contains. If it were found to contain nothing, which if proved, would be material by way of defence, the court would disregard it. If, on the other hand, it discloses a substantial ground of defence, the court will not take the circuitous course of giving a judgment without regard to it, and obliging the defendant to apply, under Order 14, to have that judgment set aside on terms, but will take steps to have the case properly tried on the merits.
(The underlining is ours) Other cases on the same point are Gill v. Woodfin (1884) 25 Ch D 707 (CA); Graves v. Terry (1882) 9 QBD 170; and Montagu v. Land Corporation 56 LT 730. The next question is this. What steps should the court have taken in the case in hand to have it properly tried on the merits
Admittedly, where no Statement of Defence has been filed, the court, in its discretion, has the power under Order 18 rule 6 of the Rules to extend the time by order to enable a defendant to file his Statement of Defence. Furthermore, it must be pointed out that although Order 24, rule 11 is expressed in mandatory terms, the rule is not mandatory but discretionary, and the court retains its discretionary power whether to give judgment or to extend the time for the defendant to file his defence when it is just to do so. (See Wallersteiner v. Moir (1974) 1 WLR 991). Moreover, there is nothing in Order 18 rule 6 to indicate that the rule applies only to cases where no Statement of Defence has been filed and we are not prepared to hold that it does. We think it applies also to cases where a defence has been filed out of time. In such cases, the parties can, by consent, regularise the position or the court, provided the Statement of Defence discloses a substantial ground of defence, can do so by order either on application or suo motu.
Looking at this particular case where each defendant has filed a Statement of Defence which having regard to his observation, the learned Chief Judge must have found to disclose a substantial ground of defence, it seems to us that it is a wrong exercise of his discretion to have ordered the defendants to file an application for enlargement of time within which to file a defence within 10 days from the date of his order, thus indicating, albeit by implication, that no statements of defence had been filed before. With respect, we think it was erroneous of him to have ordered them, in those circumstances, to apply for extension of time to file what amounted to new statements of defence within ten days. Surely, this discretion, which the learned Chief Judge undoubtedly has in the matter, must be exercised judiciously, bearing in mind that it is the duty of the court whenever possible, not only to minimise the cost of litigation, but also to see to it that justice is not delayed unnecessarily.
In our view, the learned Chief Judge, in the exercise of his power under Order 18 rule 6, should have extended the time suo motu up to 18th April, 1976, the day when he delivered his ruling. By ordering the defendants, as he did, to apply within ten days to file another Statement of Defence, the learned Chief Judge, if we may say so, again with respect, was merely taking refuge in an unnecessary legal technicality which would obviously delay the hearing of the action further. We think he should have extended the time to file the statements of defence to the date of his ruling, order that the Statement of Defence already filed had been duly filed, and then fix a date for the hearing of the case. This appeal, therefore, succeeds and it is allowed. Accordingly, the order complained of in the ruling of the learned Chief Judge of Lagos State, and the decision of the Federal Court of Appeal affirming the said order, together with the orders made by the two courts as to costs, are set aside. Instead we order as follows:-
(a) that the time within which the defendants should file their statements of defence be and is hereby extended to 18th April, 1976;
(b) that provided the fees for filing the statements of defence are duly paid, the Statement of Defence already filed in court by each defendant shall be deemed to have been duly filed;
(c) that the orders made in paragraphs (a) and (b) above shall be the orders of the High Court; and
(d) that the defendants shall be awarded costs which we assess –
(i) in the high Court at N36.00;
(ii) in the federal Court of Appeal at N60.00; and
(iii) in this court at N323.00.
Other Citation: (1978) LCN/1976(SC)