IN THE COURT OF APPEAL OF NIGERIA
On Wednesday, The 28th day of May, 2014
CA/K/16/2006
BETWEEN
CHAMPION BREWERIES PLC ................. Appellant
V.
1. SPECIALTY LINK LIMITED .............. Respondents
2. AKWA IBOM STATE GOVERNMENT
APPEARANCES
Chief Ijim Omoigberale KSM for Appellant
S. M. Nwosu Esq. for Respondent
MAIN JUDGMENT
ITA G. MBABA, J.C.A. (Delivering the Leading Judgment):
This is an appeal against the judgment of Kaduna State High Court, in Suit No. KDH/KAD/185/99, delivered on 13/6/2003 by Hon. Justice J. Abiriyi (as he then was), wherein his Lordship entered judgment for the Plaintiff (now 1st Respondent) and awarded 8% interest on the original sum of N21,750,000.00 loaned to the 1st Defendant (now Appellant) and guaranteed by the 2nd Defendant from 6/4/98 to the date of full liquidation. The trial court had dismissed the claim for special and general damages, sought by the 1st Respondent.
Appellant was granted extension of time/leave by this court, on 19/4/04, to file this appeal and it did so as per pages 266 to 267 of the Records of Appeal, disclosing 3 grounds of appeal, as follows:
(1) The Learned Trial Judge erred in law when he assumed jurisdiction to entertain this suit when the court lacked the jurisdiction to entertain same.
PARTICULARS OF ERROR
(a) The contract, the subject matter of the action, was entered into in Uyo, Akwa Ibom State.
(b) The Defendants in the suit are resident in Uyo, Akwa Ibom State.
(c) The performance and/or object of the contract was in Uyo, Akwa Ibom State.
(2) The Learned Trial Judge erred in Law in awarding the claim of interest to the plaintiff as there was no basis for interest in the loan agreement.
PARTICULARS OF ERROR:
(a) The loan granted by the plaintiff to the 1st Defendant was clearly agreed to be interest fee.
(b) The supposed oral agreement, by the 2nd Defendant to pay 8% interest on the loan is invalid as the 2nd Defendant, not being a principal party to the loan agreement, cannot agree to any interest without the principal party.
(c) An oral agreement cannot alter a written agreement.
(3) The Learned Trial Judge erred in law by calling on the Plaintiff to address the Court on the same day the Defendants were foreclosed, from cross examining PW2 and thereby denied defendants fair hearing.
PARTICULARS OF ERROR:
(a) On the day the Defendants were foreclosed from cross examining the PW2, the Defendants were not given any opportunity to put in their defence.
(b) There was no adjournment for the Defendant to put in their defence:
(c) The Defendants were not given any opportunity to prove their counter claim."
Appellant filed its brief on 21/12/2004 and distilled 3 issues for determination, as follows:
(1) Whether the entire proceedings and judgment of the lower court is not a nullity as the said court lacked jurisdiction to have entertained the matter (Ground 1).
(2) Whether the entire proceedings and judgment of the lower court is not vitiated by the fact that the Appellant was denied its right of fair hearing (Ground 3).
(3) Whether there was any basis in law for the award of 8% interest on the original loan of N21,750.000.00 from 6/4/98 to the date the loan was fully repaid, when same was never claimed by the 1st Respondent. (Ground 2)"
The 1st Respondents filed their brief on 13/1/06, with the leave of court and raised a preliminary objection to the appeal in the Respondent's brief (pages 2 to 6 thereof). On the main appeal, 1st Respondent argued same on the following issues:
"(1) Whether the Trial Court lacked the jurisdiction to entertain the plaintiffs' claim (Ground 1)
(2) Whether the Appellant was denied fair hearing in the entire proceedings leading to the judgment of the court (Ground 3)
(3) Whether a subsequent oral agreement is admissible to vary or supplement the terms of a written agreement. (Ground 2)"
Appellant filed a reply brief on 22/9/06 to contest the preliminary objection.
When this appeal was heard on 19/3/14, the parties adopted their briefs and moved us accordingly, after the argument of the preliminary objection.
A brief facts of the case, as articulated by the 1st Respondent, shows that Appellant, guaranteed by the 2nd Defendant, obtained a friendly loan from the 1st Respondent, sometime in 1997, in the sum of 21.75 million, free from interest and charges, payable within 180 days; that the Appellant and the 2nd Respondent further agreed to be liable to 1st Respondent for any loss or injury occasioned to the 1st Respondent, as a result of the non-payment of loan (See Exhibit 1). Appellant and the 2nd Defendant defaulted on the repayment of the loan at the due date, and subsequently, in a meeting between the parties, 2nd Appellant reached agreement to pay 8% interest, monthly, from the date of default until the principal sum was fully liquidated. Appellant and the 2nd Defendant thereafter paid N17million of the principal sum and failed to pay the outstanding balance. The Respondent (as plaintiff,) commenced the action under the undefended list and claimed a total sum of N12,834,193, being outstanding balance of the loan had and received and 21% interest per annum from 1/1/99 to the date of judgment, and thereafter at the rate of 10% until the judgment sum was fully liquidated.
The Defendants, who were represented by the Attorney General of Akwa Ibom State, filed a notice of intention to defend the suit and admitted owing the balance of the loan, that is, N4,750,000.00, disputing the remaining claim representing interest. Judgment was entered for the Plaintiff in the said sum of N4.75, while the rest of the claim was transferred to the general cause list for hearing and determination, on pleadings.
The Plaintiff (Respondent) filed pleading and claimed N8,084,193.00 as special and general damages for breach of contract and 8% interest from 31/12/98 up to the date of judgment and thereafter at the rate of 10%,until full liquidation of the judgment debt. The Defendants refused and neglected to file their defence and to attend court on the date fixed in the presence of both counsel for the hearing of the case. That was on 28/6/99, and so the Plaintiff asked for judgment in default of the pleadings, pursuant to Order 26 Rule 2 (1) of the Kaduna State High Court (Civil Procedure) Rules 1987, and the Court entered judgment accordingly.
Appellant and the 2nd Defendant, thereafter sought an order of the trial court to set aside the judgment, but the trial court noted that the affidavit in support was based on falsehood, but all the same granted the application in the best interest of justice and set aside the judgment on 28/6/99. The Defendants thereafter filed their defence and a Counter-claim.
The Plaintiff thereafter led evidence in proof of its case and the case progressed until 12/3/2003 when the case was adjourned to 6/5/2003 for Cross-examination of PW2, defence and possibly, address.
On the 6/5/2003, the parties were absent but the plaintiff was represented by Counsel, Mr. Nwosu, who asked for another date, saying, he was informed by the Court Registrar, that the Defence Counsel called earlier to say he was bereaved. The case was adjourned to 9/6/2003 and on that date the defendants and their Counsel were absent and the Plaintiff's Counsel expressed disappointment and asked the court to discharge the PW2, who had been recalled for cross-examination, and for closure of the defence case and for address.
There was allegation that the Defence Counsel had been notified of the date of adjournment (9/6/03). The court therefore granted the application of the Plaintiff, discharged the PW2 from Cross examination, closed the case of the defence and allowed the Plaintiff's Counsel to address it. See pages 246 - 251 of the Records of Appeal. The court then adjourned the case for judgment, which was delivered on 13/6/03, when it entered judgment for the Plaintiff, in part, that is in respect it called;
"8% interest agreed between the parties as a result of the breach of the agreement between them from the 6th of April, 1998 until the date it fully paid the original sum of N21.75, it lent to the 1st Defendant and guaranteed by the 2nd defendant. The 8% shall be calculated for that period only." See page 259 of the Records.
The 1st Respondent had raised objection to this appeal in its Brief of argument. We have always said that a valid objection to the hearing of appeal has to be filed in court, apart from being raised, at least 3 days, before the hearing of the appeal to give the Appellant due notice. That emphasis is, however, stressed in the 2011 Court of Appeal Rules - Order 10 Rule 1.
See the case of Ayoade v. Spring Bank Plc (2014) 4 NWLR (Pt. 1396) 93 at 116:
"By virtue of Order 10 Rule 1, Court of Appeal Rules, 2011, a Respondent raising preliminary objection on appeal must, first of all, file a notice of preliminary objection, before canvassing argument on it in his brief of argument, (Moyosore v. Gov. Kwara State (2012) 5 NWLR (Pt. 1293) 242; Esoho v. Asuquo (2007) ALL FWLR (Pt. 359) Bayero v. Mainasara & Sons Ltd (2006) 8 NWLR (Pt. 982) 391 referred to)."
The reason for this is that, where the objection is raised in the Respondent's brief, there is no way of proving that the preliminary objection had been 'filed' as required by law, and it is the filing fees that breathe life onto a court process, where fees are required for filing. Garba v. Ummuani (2013) 12 WRN 76.
The Respondent did not file the said preliminary objection. But it must also be said that failure to comply with that rule is not fatal, as it is only an irregularity, which can be remedied by an order to pay the fees, upon the defect being highlighted, See Samba Petroleum Co. Ltd v. FCMB (2014) 3 NWLR (Pt. 1394) 346 (2013) LPELR-21874(CA); Onwugbufor v. Okoye (1996) 1 NWLR (Pt. 424) 259.
The issues for determination of preliminary objection are:
"(1) Whether the Appellant's appeal which has not been entered in the Court of Appeal is competent.
(2) Whether grounds 2 and 3 of the grounds of appeal being mixed law and facts are competent grounds, when no prior leave of court was sought and obtained before raising and arguing the grounds.
(3) Whether issue No. 3 as formulated and argued by the Appellant was derivable from ground 2 of the appeal as contended by Appellant, or from any of the grounds of appeal."
On the 1st issue, the Respondent alleged that Appellant in this appeal merely copied the appeal No. CA/K/425/2014, assigned to a sister appeal filed by the 2nd Respondent in this appeal; that whereas the Appellant and the said 2nd Respondent were defendants at the Court below, and each of them filed Notice of Appeal against the judgment of the Trial Court, only the appeal by the 2nd Respondent was entered in this court.
Without bothering to go over the whole arguments of the parties on this, I think it is the 1st Respondent that is confused as to which appeal we are hearing. The Records of Appeal in this matter bears the Number CA/K/16/2006 and it was transmitted to this court on 29/11/04. There are two Notices of appeal one filed by the 2nd Respondent herein (Akwa Ibom State Government) and the other by Appellant, on pages 260 to 265 and 266 to 267, respectively. The Briefs of the parties in this appeal carry the Appeal Number CA/K/16/2006 (written by hand, after crossing the printed No. CA/K/425/04). The 1st Respondent's motion for extension of time to file its Respondent's Brief had also Crossed Appeal No. CA/K/425/M/04 in favour of Appeal No. CA/K/16/06.
There is also evidence that the Appellant obtained the order of extension of time by this Court to file the Appeal; that was on 19/4/04. I think, whatever question that may disturb the 1st Respondent on the administrative handling of the two appeals and the assignment of numbers to them cannot be directed at or blamed on the Appellants, as that remains a problem of the Registry of this Court, which, I believe had been resolved, and the parties are not confused that this appeal (No. CA/K/16/06) was originated by the Appellant. This above, however, shows why parties, who fought a case together at the trial court should always stay together on appeal, rather than duplicate their efforts and costs in filing separate appeals over the same issue.
On the 2nd Issue, it is obvious that learned Counsel for the 1st Respondent has greatly misconstrued the law. We have held, several times, that any appeal raised against a final judgment of the High Court, sitting at first instance, is appealable, as of right, without any need to seek and obtain the leave of the High Court or of this court, whether the grounds of appeal are of facts or of mixed facts and law or of law alone. That is the purport of Section 241(1)(a) of the 1999 Constitution, as amended. See also the case of Garba v. Ummuani (2013) 12 WRN 76; Kwazo v. Railway property Co. Ltd: CA/K/41/06 delivered on 13/5/14.
On Appellants Issue 3, (which I have earlier reproduced), not being derivable from ground 2 or any ground of the appeal, I think the 1st Respondent's observation on the relationship between the Issue 3 and ground 2 of the appeal is wrong. The ground 2 of appeal was that the learned trial judge erred in law in awarding the claim of interest to the Plaintiff as there was no basis for interest in the loan agreement. The 3rd issue for determination, which is whether there was any basis in law for the award of 8% interest on the original loan of N21,750,000.00, is proper and in order, in my humble opinion.
I hold that the preliminary objection was therefore misconceived, and I dismiss it, as the grounds of appeal and issues distilled from them are properly in place.
Appellants Counsel, Chief Jim Omoigberale KSM (who settled the brief), on issue 1, submitted that the entire proceedings and the judgment of the trial court was a nullity, because the court lacked jurisdiction to entertain the suit, the reason being that the Defendants were based and resident in Uyo, Akwa Ibom State. Counsel said the 1st Respondent's chairman, testifying as PW2, told the court that he, an indigene of Akwa Ibom State, was approached for the loan transaction while he was at home in Akwa Ibom State on holiday; that he went to the government house and met the Military Administrator of the State, where the negotiation for the friendly loan took place; he later met the Board of directors of the Appellant and they finally agreed on the friendly loan and gave the same, with a written agreement to that effect. Thus, Counsel submitted that no part of the transaction occurred in Kaduna, that even the collateral pledged as security for the loan were warehouses situate in Calabar and Ogoja in Cross-River State, all outside the territorial jurisdiction of the trial court that the trial court was therefore wrong when it assumed jurisdiction in the case. He relied on Order 10 Rules 2 and 3 of the Kaduna State High Court (Civil Procedure) Rules 1987, on the limits of territorial jurisdiction
that "All suits for specific performance, or upon the breach of any contract shall be commenced and determined in the judicial division in which such contract ought to have been performed, or in which the defendant resides or carries on business."
Counsel urged us to hold that the entire trial and decisions amounted to a nullity as the court wrongly assumed jurisdiction, which it lacked. He relied on some decided authorities including NDIC v. CBN (2002) 3 SC at 8; Thompson v. University of Calabar (2004) ALL FWLR (Pt. 209) 1148 AT 1168.
On issue 2, Counsel submitted that the entire proceedings and judgment were vitiated because the Appellant was denied right of fair hearing; that the Plaintiff's case was closed on 3/10/02, while the matter was adjourned for defence in the absence of the Appellant with an order that Appellant should be served, (Page 241 of the Records); that the 1st Respondent had difficulties in serving the hearing notices on the Appellant until 15/1/03, when it brought a motion ex-parte for an order of substituted service, through DHL - courier services, which application was granted. (Pages 84-86 and 243-244 of the Records).
Counsel submitted that upon proper service by DHL, the Appellant was represented in court on 12/03/03 and he brought application to recall the PW2 for cross examination, which was granted. The matter was, thereafter, adjourned to 6/5/03 for the Cross examination, defence and possible address; that on the said 6/5/03, the Appellant's counsel was absent because he was bereaved and the court then adjourned the matter to 9/6/03 for defence with an order that Appellant be served. (Page 246 of the Records).
Counsel submitted that the order of 9/6/03, that Appellant be served notice of the new date was not carried out by the Registry of the court, but that the trial court relied on the mere ipse dixit of the 1st Respondent's Counsel and its Registrar, that the date had been communicated to Appellant's Counsel, to discharge the PW2, deny the Appellant the right of defence, took address of the Plaintiff and adjourned the case for judgment on 13/6/03, with an order that the Appellant be served with the hearing notice (pages 246 - 251 of the Records).
Counsel noted an unusual hurry by the trial judge on the said 9/6/03 to deny the Appellant right of hearing, and said that the failure to serve the Appellant with new dates of adjournment, ordered on 6/5/03 and 9/5/03 was fatal; that the service should have been effected by DHL as ordered by the court on 15/1/03. He relied on the case of AMANA COMMUNITY BANK NIG LTD v. MR. OKWU OLU (2003) FWLR 9 (Pt. 158) 1308 AT 1320 - 1321; EKUMA v. SILVER EAGLE SHIPPING AGENCIES LTD (1987) 4 NWLR (Pt. 65) 472 SOCIETE GENERAL BANK NIG LTD v. ADEWUNMI (2003) FWLR (Pt. 158) 1181 AT 1190.
Counsel further noted that Appellant had a counter claim at the lower court but the court said nothing about it while closing the defence of the Appellant, ordering address by the 1st Respondent on 9/6/03 and reading its judgment on 13/6/03; that the judgment therefore failed to address all the issues, placed before the court and was invalid.
On Issue 3, Appellant reproduced the paragraph 25 of the 1st Respondent's pleading at the lower court as stated on pages 21 - 23 of the Records:
"Whereupon the Plaintiff claims against the defendants jointly and severally the sum of N8,084,193.00 as special and general damages for breach of contract and 8% interest from 31st day of December, 1998 up to the date of judgment and thereafter at the rate of 10% until judgment sum is fully liquidated."
Counsel submitted that parties are bound by their pleading and any evidence adduced contrary to the pleadings goes to no issue; that it is not open for the court to make a case for any party different from what is placed before it by the parties; that though the court can award less than what is claimed by the parties, it cannot award more then what a party claims, or what is not claimed.
Counsel submitted that considering the above claim of the 1st Respondent, and the above principles, governing awards, the trial court violated every known principle, went on a voyage of its own, to make award which is not supported by any law or legally admissible facts of the case. He submitted that the 8% interest claimed by 1st Respondent related to the claim of N8,084,193.00, that the said amount claimed (or part of it) has to be awarded, before the 8% interest can be awarded, as it ought to be computed on the amount awarded; that in this case, the amount claimed as special and general damages were not established and was dismissed, but, strangely, the court went forward to award the 8% interest saying;
"From the nature of the agreement between the parties which was a friendly loan and the subsequent oral agreement between them that 8% interest be paid as a result of the breach from the date of the breach and to mitigate (sic) loss to the Plaintiff. I am reluctant to award general damages... The claim of the Plaintiff succeeds in part. The Plaintiff shall be paid by the Defendants jointly and severally the 8% interest agreed between the parties as a result of the breach of agreement between them from the 6th of April 1998 until the date it fully paid the original sum of N21,750,000.00 it lent to 1st Defendant and guaranteed by the 2nd Defendant. The 8% shall be calculated for that period only." (Page 259 of the Records)
Counsel submitted that having refused to award the main claim of the Appellant for N8,084,193.00 as special and general damages, the court should have dismissed the suit; that the 8% interest on the original loan of N21,750,000, from 31/12/98 to date of payment was never before the Trial Court; that decision was not only strange but also bizarre.
Counsel further submitted that the evidence relied on for the award was not legally admissible as the loan agreement was covered by a written agreement (Exhibit 1), whereas the alleged agreement to pay 8% interest was said to be oral, land made by 2nd defendant (guarantor); that Exhibit 1 had clearly stated that the loan was interest free! He submitted that oral evidence cannot be admitted to alter, vary or defeat a written agreement.
Moreover, Counsel said there was no indication Appellant consented to the alleged oral agreement and it was not stated when the PW1 started to compute the interest and on which amount the computation was done!
He urged us to resolve the issues for Appellant and allow the appeal.
The 1st Respondent's Counsel, S. M. Nwosu Esq.; on issue one, submitted that the trial court had jurisdiction to entertain the case, because 1st Respondent had pleaded that the loan agreement was entered into in Kaduna and that the loan was advanced to Appellant at Kaduna by means of bank draft, through it bankers in Kaduna. See paragraphs 5 and 12 of the statement of claim (page 21 of the Records). Counsel referred us to paragraph 2 of Appellant's statement of defence, where they stated: "Defendants admit paragraph 5 but add that the request was for N21.75m friendly and interest free loan"; he said that the Appellant also admitted receiving the friendly loan granted as per the Plaintiff's averment in paragraph 12 of the statement of claim, that the payment was made to them in Kaduna through Plaintiff's bankers in Kaduna.
I do not think it is necessary to be-labour further arguments on this issue, i.e., whether or not the trial court had jurisdiction to entertain the suit. Even if the Appellant were to have effectively denied that the loan transaction was partly negotiated in Kaduna and also paid in Kaduna through 1st Respondent's bankers in Kaduna, the mere fact that the Appellant submitted to the jurisdiction of the trial court, filed notice of intention to defend the suit, offered to liquidate the original loan by paying the balance of N4.75m and paid the same; applied for the rest of the matter to be sent to the general cause list, for determination and even filed a counter claim in the case, shows that Appellant had accepted and submitted to the jurisdiction of that court and even sought its protection. It cannot therefore complain on appeal.
I believe, when it comes to territorial jurisdiction of a court, a party who willingly submits to the jurisdiction of a court and takes part in the trial of his case, cannot turn round, on appeal, to question the powers of the court to hear his case, as long as the court was seized with power over the subject matter of the claim.
In the case of Mobil Producing Un-ltd v. Lagos State Environmental Protection Agency (2002) LPELR 1887 (sc), it was said that;
"The rule of jurisdiction, as held by this court ... is that nothing shall be intended to be out of the jurisdiction of a superior court but that which specifically appears to be so. That an irregularity in the exercise of jurisdiction should not be confused with a total lack of jurisdiction which takes cognizance of the general meaning of the word 'jurisdiction' as "the authority which a court has to decide matters that are litigated before it, or take cognizance of matters presented in a formal way for its decision" (per Ayoola, JSC). His Lordship further held:
"Where competence is presumed, because there is nothing on the face of the proceedings which reveals jurisdictional incompetence of the court, it is for party, who alleges the courts incompetence to raise the issue either in his statement of defence in the proceedings, commenced by writ, or by affidavit, in cases commenced by originating summons. A judgment given in proceedings which appear ex-facie regular is valid"
The law, however, is that parties cannot, by consent confer jurisdiction on a court, where it has none. But where it has, as per the subject matter in litigation, pursuant to the case of the Plaintiff, "the court, cannot by the precipitated action of the defendant, lose that jurisdiction, simply because the defendant wants it so. After all, it is settled law that, it is the Plaintiff's claim in a matter that determines the jurisdiction of the court." See ADEPOJU v. INEC (2012) 21 WRN 38 holding 2; Akinpolarin v. Akinnola (1994) 3 NWLR (Pt. 335) 659.
The Respondent had pleaded in paragraph 5 of their pleading that, "Sometime in 1997, the chairman and Managing Director of the 1st Defendant approached the Plaintiff in Kaduna... "In paragraph 12, the Plaintiff also alleged, "The Plaintiff through its Bankers in Kaduna and by means of drafts advanced the friendly loan to the Defendants."
These averments were duly admitted by the Appellant in paragraph 2, when it said "Defendants admit paragraph 5 but add that the request was for a N21.75m, friendly loan and interest free loan". Appellant was completely silent on paragraph 12 and that amounts to admission of same. No wonder the Appellant did not raise any issue about territorial jurisdiction at the trial court, but rather filed a counter-claim, seeking a declaration that the Defendants were not indebted to the Plaintiff and an order for the Plaintiff, to return the title deeds of the 1st Defendant's warehouses in Calabar and Ogoja, and for N5m as general damages for breach of contract.
I think the issue one therefore, came as an after - thought, and the Appellant lacked the vires to raise it in this court (even under the guise of jurisdiction), as the same was never raised at the court below, and no leave was sought by Appellant to raise it, as a fresh issue. See Ikedigwe v. Fai (2012) 10 NWLR (Pt. 1308) 375; Udo v. RTBC and S (2013) 14 NWLR (Pt. 1375) 488; University of Ilorin v. Olawepo (2012) 52 WRN 42
See also the case of Rivers State Govt. v. Specialist Konsult 2005 MJSC 19 AT 43 (OR (2005 LPELR-2950(SC), where the supreme court held:
"In actions based on contract, jurisdiction depends generally on one of the following:
(a) Where the contract was made;
(b) Where the contract ought to have been performed; or
(c) Where the defendant or one of the defendants resides
There is also another settled procedure and it is this: The venue for the trial of a suit based on a breach of contract could also be determined by:
(a) Where the contract ought to have been performed; or
(b) Where the defendant resides; or
(c) Where the defendant carries on busin