United Bank for Africa Plc V. New Tarzan Motors Limited (2016)

LawGlobal-Hub Lead Judgment Report

MASSOUD ABDULRAHMAN OREDOLA, J.C.A.

This is an appeal against the judgment of the High Court of Anambra State, sitting at Onitsha (hereinafter referred to as the Lower Court) delivered by Hon. Justice Vin Agbataon the 28th day of January, 2008. The suit was originally instituted by the plaintiff/respondent vide a writ of summons filed on the 9th day of June, 2005, wherein the Respondent claimed against the defendant/appellant in the following terms as reproduced below:

?WHEREFORE the plaintiff claims from defendant the sum of N150,000.000.00 being general and special damages for wrongful deduction and breach of contract.

PARTICULARS OF DAMAGES SPECIAL DAMAGES

Deduction from plaintiff?s account from 25th December, 2000 ? 25th January, 2002

– N21,220,925.57

Interest on the amount: – N37,681,220.21

Total – N57,962,145.78

General Damages: – N91,097,854.22

Grand Total – N150,000.000.00?

At the close of pleadings, both parties led evidence in proof of their respective cases. The plaintiff/respondent called two (2) witnesses, while the defendant/appellant

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called only one witness. At the end of it all, the learned trial judge entered judgment for the plaintiff/respondent in the following words:

?The plaintiff is, therefore, entitled to judgment in this suit. The defendant shall pay to the plaintiff the sum of N21,220,925.57 being unauthorized deductions from the accounts of the plaintiff with her from the 25th day of December, 2000 to the 25th day January, 2002. The plaintiff claimed also, against the defendant, the sum of N37, 681,220.21 being interests on the above stated judgment debt. She did not however, establish by evidence how she arrived at that figure. Be that as it may, the Supreme Court in the case ofBalogun vs. National Bank of Nigeria Ltd. (1978) 3 S. C. 155, had restated the law to the effect that people engaged in business should recover substantial damages without proof of actual loss. The defendant shall, therefore, also pay to the plaintiff the sum N37, 681,220.21 being damages for breach of contract.?

The appellant was dissatisfied with the said decision and thus appealed against it. Originally this was done vide a notice of appeal filed on the 30th of January, 2008,

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but was subsequently amended by the order of this court made on the 17th day of November, 2008 which deemed the same as having been properly filed and duly served. Thus, the said judgment is being challenged before this Court on seven (7) grounds of appeal; the grounds without their particulars are reproduced below:

?GROUND ONE

The learned trial Judge misdirected himself and thereby erred and came to a wrong conclusion when he held as follows:

?It appears, to me preposterous that the Defendant applied her own funds to acquire her own buses and then debited the accounts of the plaintiff with interests for the said funds when she was yet to take possession of the buses. It does not make sense to me?

?GROUND TWO

?The learned trial judge erred in law in awarding the sum of N21,220,925.57 as special damages representing the sum deducted from the plaintiff?s account between 25th January, 2000 and 25 January, 2002?

?GROUND THREE

The learned trial judge erred on law when he held as follows:

Be that as it may, the Supreme Court in the case Balogun V National Bank of

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Nigeria Ltd (1978) 3 S. C. 155, had restated the law to the effect that people engaged in business should recover substantial damages without proof of actual loss. The defendant shall, therefore, also pay to the plaintiff the sum of N37,681,220,21 being damages for breach of contact

?GROUND FOUR

The learned trial judge erred in law when he held as follows:

?The transaction between the parties was a lease finance transaction. It was not term loan, as suggested by the defense counsel. Consequently, both the principal sum and the interests thereon were part and parcel of the 21 equal monthly rentals, which the plaintiff had since paid to the defendant. It follows, therefore, that any deductions outside the aforesaid 21 equal monthly rentals, made by the defendant from the account of the plaintiff with her is not allowed, neither by the law nor by the agreement of the parties. It was done in breach of the contract between the parties?

?GROUND FIVE

The trial Court erred in law in holding that:

?A bank, not being a charitable organization is entitled to charge interests on funds which she

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released to her customer from the date of the release of such funds. This is however true to the extent only that the said funds were released to the customer. It becomes a totally different ball game in such circumstance as in the present case, where such funds were never released to the customer, the plaintiff, but were rather applied for the acquisition of some buses the property in which remained in the Defendant?

?GROUND SIX

The learned trial judge erred in law in considering only the case for the plaintiff and failed to advert his attention to the evidence adduced, and the authorities referred to by the defendant.?

?GROUND SEVEN

The learned trial judge erred in law when he held as follows:

?At all times material to this suit, the property in the buses remained in the Defendant. Indeed, it was in the exercise of her rights as owner of the said buses that the Defendant had to sell one of them without recourse to the plaintiff?

?In accordance with the rules of this Court the parties filed their respective briefs of argument. The appellant?s brief of argument was prepared by Alfred

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Uwaka, Esq. and filed on the 3rd day of April, 2009. It was deemed as properly filed and served on the 7th day of July, 2009. The respondent?s brief of argument, on the other hand was filed by Chief S. O. P. Okeke. It was filed on the 6th day of August, 2009. The appellant?s counsel upon being served with the respondent?s brief of argument, filed a reply brief on the 13th day of September, 2010. The same was deemed as properly filed and duly served on the 11th day of October, 2010.

?In the resolution of this appeal, the learned appellant?s counsel formulated two (2) issues for determination. The issues are as follows:

ISSUE 1

Whether the learned trial judge was right to have awarded the sum of N37,681,220.21k (Thirty Seven Million Six Hundred and Eighty one Thousand Two Hundred and Twenty Naira Twenty One Kobo) as damages for breach of contract to the plaintiff/respondent.

ISSUE 2

?Whether the learned trial judge was right in the circumstance in holding that both the principal sum and interest were part and parcel of the 21 equal monthly rentals, thereby disallowing the interest charged by the

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defendant/appellant and awarding the sum of N21,220,925,57k (Twenty One Million, Two Hundred Twenty Thousand Nine Hundred and Twenty Five Naira Fifty Seven Kobo) to the plaintiff/respondent as special damages.?

The learned counsel to the respondent on his own, distilled four (4) issues for the determination of this appeal the issues are as follows:

?(i) Whether the respondent/defendant was right to have deducted money from the account of the respondent/plaintiff when no business was done for the respondent/plaintiff.

(ii) Whether the Learned Trial judge was right to have awarded the sum of N37,681,220.21k (Thirty Seven Million Six Hundred and Eighty One Thousand Two Hundred and Twenty One Kobo as damages for the breach of contract to the plaintiff/respondent.

(iii) Whether the learned trial judge was right in the circumstance in holding that both the principal sum and interest were part and parcel of the 21 equal monthly rentals, thereby disallowing the interest charged by the defendant/appellant and awarding of the sum of N21,220,925.57k to the respondent/plaintiff as special damages.

(iv) Whether this Court can interfere

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with the finding of the trial Court.?

It is instructive to observe at this point, that the issues as distilled by the learned counsel to the respondent are materially the same with those distilled by the learned appellant?s counsel except for the fact that the learned respondent?s counsel merely crafted the issues in an expanded form.

I have carefully gone through all the evidence on record; the judgment of the Lower Court, issues formulated by learned counsel to both parties and arguments, and I am of the opinion that the issues formulated by the learned counsel to the appellant are more apt for the resolution of this appeal. Thus, the issues are hereby adopted towards the determination of this appeal. Having carefully examined the said issues adopted for the determination of this appeal I am of the view that they are inter-related and mutually dependent. Thus, it would be better that they are considered together.

ARGUMENT ON ISSUES. (ISSUE 1 AND ISSUE 2)

The learned counsel for the appellant submitted that a party must establish his claim by evidence before he could be entitled to judgment. He referred to and relied on

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the cases of Sokwo v. Kpongbo (2008) 7 NWLR (Pt. 1086) 342 @ 362; and Nzeribe v. Dave Eng. Co. Ltd. (1994) 8 NWLR (Pt. 361) 124 @ 136. The learned counsel also contended that the respondent failed to prove that they are entitled to special damages (in form of interest on the amount the appellant allegedly wrongfully deducted from its account, and that the learned trial judge so found, but went ahead to grant the relief.

The learned counsel submitted in another vein, that the authorities in respect of which the Lower Court relied upon in reaching its decision in this regard were decided on a different principle of law and the same is not applicable to the instant case. The learned counsel finally submitted on this point that the Lower Court ?had no jurisdiction to award to the plaintiff/respondent damages for a relief not claimed as the Court did.? He called in support the cases of Ekpenyong v. Nyong (1975) 2 SC 65 @ 73-74; Fabiyi v. Adeniyi (2000) 6 NWLR (Pt. 662) 532 @ 542; and Odofin v. Agu (1992) 3 NWLR (Pt. 229) 350 @ 372 – 373.

The learned counsel to the respondent on his own part contended that, there was evidence on record which

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established the fact that the appellant wrongfully deducted the sum of N21,220,925,57k from the respondent?s account. The learned counsel thereby submitted that the damages in this respect were awarded to compensate the respondent in order to make reparation for all the actual damage done to the respondent which flowed directly from the said act. He called in aid the cases of Doyle v. Olby (Iron Mongers Ltd.) (1969) 2 All E. R. 119 @ 122; and Balogun v. National Bank of Nigeria Ltd (1978) 3 S. C. 155.

The learned counsel to the appellant had hitherto submitted that this issue was borne out of the Lower Court?s findings, where it was stated as follows

both the principal sum and the interest thereon were part and parcel of the 21 equal monthly rentals which the plaintiff had since paid to the defendant. It follows, therefore, that any deduction, outside the aforesaid 21 equal monthly rentals, made by the defendant from the account of the plaintiff with here is not allowed, neither by the law nor by the agreement of the parties. It is done in breach of the contract between the parties.?

?The learned counsel then

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maintained that the respondent did not at any point pleaded that both the principal sum and interest were part and parcel of the 21 monthly rentals. Thus, the decision of the Lower Court amounted to formulating or putting forward a different case from what the respondent averred. The learned counsel, thus, submitted that the trial Court had no jurisdiction to make findings to the effect that both the principal sum and interest are part and parcel of the 21 equal monthly rentals, and that by this finding, the Court made a case different from the case made by the respondent. He relied on the case ofFabiyi v. Adeniyi (2000) 6 NWLR (Pt. 662) 532 @ 542, on the established point that a Court has no jurisdiction to grant a relief which has not been pleaded or prayed for.

?The learned counsel contended further that the contract between the parties was not a case of finance transaction strictly speaking, as the agreement clearly contemplated and stipulated the payment of interest apart from rentals. The learned counsel went ahead to buttress this fact with references to pieces of evidence on record. Thus, the learned counsel submitted that learned trial judge

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(with due respect) failed to properly grasp and appreciate the transaction between the parties and evidence of the appellant.

The learned counsel submitted also the respondent failed to strictly prove that she was entitled to the special damages claimed. He submitted further that for a party to claim special damages and succeed, he must specifically plead it and strictly prove the same. He relied on the case of Arabambi v. A. B. I Ltd (2006) 3 M. J. S. C., 61 @ 98-99.

The learned counsel argued further that the transaction was in form of ?disguised borrowing? equivalent to a form of term loan in respect of which the sum released by the appellant was to attract interest in accordance with the custom and practice of banking transactions. The learned counsel argued further that the Lower Court failed to properly evaluate the evidence before it; thus, it erroneously found that both the interest and the principal sum was part and parcel of the 21 equal monthly rental payments. He therefore, urged this Court to interfere with the findings of the Lower Court and find in favour of the appellant. He relied on the following cases in making his

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submissions; Sha (Jnr.) v. Kwan (2000) 8 NWLR (Pt. 670) 685 @ 704 among others.

Finally, the learned counsel argued that the transaction between the parties was reduced into a written agreement to which both parties are bound and while the Court is only saddled with the responsibility of interpreting plainly, the terms as agreed by the parties. He stated that any effort in default of the above would amount to re-writing agreements for the parties which the law frowns at. He cited and relied on the cases of Larmie vs. DATA Processing Maintenance & Services Ltd. (2006) 3 M.J.S.C., 20. He argued that Exhibits D1, D6 and D7 clearly showed and stipulated that the payment of interests would be differentiated and excluded from the monthly rental payment. Relying on all the above arguments and authorities in support thereof, he therefore urged this Court to allow this appeal and make an order dismissing the respondent?s claim in its entirety.

?The learned counsel to the respondent in further response contended that the transaction between the parties is a finance lease contract. He also stated that the transaction is akin to Equipment Leasing which

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is all about financing. He referred us to the case of Mulliner v. Flounce (1878) 3 Q.B.D. 484. The learned counsel contended that a finance lease contract is drawn up in such a way as to involve payment over an obligation period of specified sums, sufficient in total to amortize the capital out lay of the lessor and some profit. He argued further that the appellant as the lessor in the instant case, entered the contract that did not anticipate deductions upfront. The learned counsel then maintained with insistence, that the monthly rental consists of the capital and interest. He referred us to the written by Professor T. M. Clark (LEASING) 1978, pages 3 and 12.

The learned counsel therefore submitted that, it amounts to double portion for the appellant to deduct the sum of N21,220,925.57k and also collect the full rental which comprised of the principal and the interest thereon. He further opined that the learned trial judge was right when he disallowed the interest and awarded the sum of N21,220,925.57 to the respondent.

?Let me state, that I subscribe to the submission of the learned counsel to the appellant on the fact that where parties who

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are desirous of entering a business relationship have reduced the terms of relationship into writing, they would be bound by such terms. Also, if the wordings of the agreement are plain and unambiguous, Courts are generally bound to interpret the agreement literally, giving effect to the terms already agreed upon by the parties. This is moreso, because it is not the business of Courts to write or make new agreement/contract for the parties. See Owoniboys Tech. Services Ltd. v. U. B. N. Ltd. (2003) 15 NWLR (Pt. 844) 545; (2003) LPELR ? 2854.

It is also a trite law that, where document(s) form part of a long drawn transaction, such as in the instant case, they should be interpreted not in isolation but in the contract of the totality of the transaction in order to fully appreciate their legal import and purport and impact. That is the only way to find out and determine the real intention of the parties. A restrictive and restricted interpretation which does not take cognizance of the total package of the transaction in which the documents are integral part cannot meet the justice of the case. See the cases of R.E.A.N. Ltd. v. Aswani ile Ind. (1991)

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2 N.W.L.R. (Pt.176) 639 @ 669; and Agbachi v. Azubuike (2010) LPELR ? 3646.

I have carefully examined Exhibits D1 and D7 (which forms the fulcrum of this case), vis–vis the conduct of the parties, and it is my firm view point that the parties expressly agreed for the payment of a separate interest apart from the monthly rentals. It is clear on the face of the said exhibits that the parties contemplated and agreed for the payment of interest apart from the rental payments on the lease facility. I also agree with the learned counsel to the appellant that the transaction between the parties is in a hybrid form; encompassing both Loan facility and Lease Financing.

It is now well settled that banks not being a charitable organization has the power or are entitled to charge interests on loans or other advances or facilities granted and or made available to a customer, even where there was no express agreement on the rate of interest to be charged. See the case ofAdetoro v. U. B. N. Plc. (2007) LPELR ? 8991.

Also, it is trite principles of law of contract that parties to a binding contract are bound by the terms of the said contract

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which they voluntarily entered into, see the cases of Best (Nigeria) Ltd. v. Blackwood Hodge (Nigeria) Ltd. (2011) 5 NWLR (Pt. 1239) 95; and A. G. Ferrero & Co. Ltd. V. Henkel Chemicals Nig. Ltd (2011) LPELR ? 12. On the strength of the above established principles of law and the authorities cited in support as well as all the evidence on the printed record placed before us, it is my humble and firm view point, that the appellant has the right under the said contract to charge separate interest (as it has done in this case) on the ?loan? advanced to the respondent in form of letter of credit as well as receive monthly rental from the respondent in discharge of the lease financing afforded it by the appellant. Thus, both issues formulated in determination of this appeal are hereby resolved in favour of the appellant.

Having resolved the issues formulated and adopted for the resolution of this appeal as done above, it is my finding that this appeal is meritorious and it is accordingly allowed. Consequently, it is my standpoint that the Lower Court acted in error when it ordered the appellant to pay the sum of N21,220, 925. 57K (Twenty

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One Million, Two Hundred Twenty Thousand Nine Hundred and Twenty Five Naira, Fifty Seven Kobo) and N37, 681,220. 21k (Thirty Seven Million, Six Hundred and Eighty one thousand, Two hundred and Twenty Naira and Twenty One Kobo) to the respondent as unauthorized deduction from the accounts of the respondent from 25th day of December, 2000 to the 25th day of January, 2002 and general damages for breach of contract, respectively. In the premise, the judgment of the Lower Court delivered on 28th day of January, 2008 in Suit No. 0/3/8/2005 is hereby set aside and the respondent?s case is accordingly dismissed. No order is made with regard to costs. Parties are to bear their respective costs.

Other Citations: (2016)LCN/8646(CA)