United Bank For Africa PLC V. Unisales International (Nigeria) LTD (2014)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

FREDERICK O. OHO, J.C.A. (Delivering the Leading Judgment)

This is a relatively short case in respect of which only the PW1 testified, tendered a number of documentary Exhibits and was hardly Cross-Examined before the Defendant was foreclosed by the Lower Court and yet has raised a number of important issues in this Appeal.

The main of these issues is the question of Fair-Hearing and the propriety of issuing Hearing Notices to parties alerting them of the cases pending against them before orders and judgments are delivered. There is also the issue of the Mortgagee’s power of sale; whether same can be vitiated if tainted by fraud or collusion. The issues of award of damages by the Lower Court, when fraud is alleged to have been proved in a Mortgage transaction also featured in this Appeal.

The Plaintiff, a limited liability company and customer of the Defendant at its Ikot-Ekpene Road Branch, Aba, Abia State in 1983 was a beneficiary of an overdraft facility to the tune of N200,000.00 vide a letter dated 24-2-1983, with which to augment its importation business. In securing the facility, the Plaintiff mortgaged two of its properties situate at 146, Ehi Road, and 194, Jubilee Road, both in Aba, Abia State of Nigeria.

According to the Plaintiff, the Goods to be imported were duly shipped from Rotterdam to Port-Harcourt but were stolen by unknown persons, The Defendant, as a result of the plaintiff’s indebtedness to her and after several demands to no avail, instructed an Auctioneer’ one Mr. G. Ekwekwuo to sell by Public Auction the plaintiff’s two properties by which the overdraft facility was secured.

The Plaintiff, on its part alleged fraud and collusion between the Defendant and its agent, the Auctioneer in the process of selling the mortgaged properties, by not issuing adequate notices of the scheduled Auction. The Plaintiff also alleged that the sales by Auction of the properties were carried out in violation of Section 19 of the Auctioneer’s Law, Cap. 12 Laws of Eastern Nigeria applicable in Abia State.

At the Lower Court, the Defendant’s own story was completely different. The sum of Two-Hundred and Fifty-Thousand (N250,000.00) Naira and not Two Hundred Thousand (N200,000.000) as claimed by plaintiff, was the amount said to be given to the Plaintiff as monies to augment its working capital and not meant for any importation of goods. And as a result, Defendant claimed not to have any knowledge of whether goods were imported or not as importation transactions are usually done through loans in the form of letters of credit and not through overdrafts facilities in customers’ account.

Defendant also denied any under hand dealings in the Auction sale of the mortgaged properties as the amount realized was the forced sale value of the properties to the highest bidder. The Defendant further claimed that the sales were done based on the Valuation Reports of Messrs. CHUKWU UDE & PARTNERS of No.130 Ehi Road, Estate Surveyors and Valuers on the two mortgaged properties at the instance of Mr. LEKWAUWA, the Managing Director of the plaintiff’s company.

All of these notwithstanding, in order to redress the perceived anomalies in the alleged shoddy handling of the Auction sales, the Plaintiff took out a writ of summons accompanied by a statement of claim on the 27-9-1994 wherein at paragraph 28 the Plaintiff claimed against the Defendant as follows:

“WHEREFORE the Plaintiff has been damnified and claims as follows:

1. A Declaration that the Plaintiff’s properties situate at 194, Jubilee Road, Aba and 146 Ehi Road, Aba were irregularly and fraudulently sold by the Defendant.
2. N10,000,000.00 damages for the irregular sale.
3. The sum of N1,500,000.00 being money due from the Defendant to the plaintiff less the sum of N472,612.96K owed to the Defendant by the plaintiff as at 11th September, 1989.
4. Interest on the above sum at the rate of 22% per annum from 12th September, 1999 until judgment.
5. Interest at the rate of 10% per annum on the judgment debt until liquidated,
6. A Declaration that the Plaintiff is not indebted to the Defendant.
7. The cost of this Action.”

In his evidence before the trial court, the PW1, one L. M. Lekwauwa told court that he is Managing Director of the Plaintiff and went on to give evidence in line with the statement of claim, tendering in the course of doing so, a number of documentary Exhibits. At the conclusion of the evidence-in-chief of the said PW1, the court adjourned the matter for cross-examination of the PW1 by learned counsel for the Defendant.

It was at this stage that the Defendant’s counsel resorted to writing letters after letters, one each for every adjourned date with the result that Defendant ended up foreclosed by the Lower Court and the Plaintiffs sole witness, the PW1 ended up not cross-examined. The trial court thereafter adjourned the matter for Defense. No hearing Notices were issued on the Defendant. When the Defendant did not turn up at the next date of case, Plaintiff’s counsel addressed court and judgment was delivered in the matter on the 20th day of December, 2004.

The learned trial Judge, in his judgment said:

“I am satisfied that the plaintiff has proved his case based on his unchallenged evidence. He is entitled to judgment against the Defendant. Prayer 1 of paragraph 28 succeeds. With regards to prayer 2, court award damages of Three Million Naira (N3,000,000.00) to the plaintiff for the irregular sale. Prayer 3 has been proved and Plaintiff is entitled to N1,500,000.00 being money due from Defendant to plaintiff. With regards prayer 4 to court does not see how the interest of 22% was arrived at. No evidence to support same.