In The Supreme Court of Nigeria
On Friday, the 29th day of June 1990
SC 186/1986
Between
A. A. Macaulay ...... Appellants
And
NAL Merchant Bank Ltd ....... Respondent
Judgement of the Court
Delivered by
Agbaje. J.S.C.
The plaintiff's Bank, NAL Merchant Bank Ltd., sued the defendant, Mr. A. A. Macaulay in a Lagos High Court claiming against him as follows:
The plaintiff's claim against the defendant is for the sum of N3,490.95 (Ninety three thousand, four hundred and ninety naira, ninety-five kobo) being the amount due and payable by the defendant to the plaintiff as at 30th September, 1984 for money lent in form of a term loan to the defendant at the defendant's request in the normal course of plaintiff's business as a banker together with interest and the usual bank charges thereon, which sum defendant has refused and neglected to pay A in spite of repeated demands.
AND THE PLAINTIFF ALSO claims interest on the said sum of N3 ,490.95 at the rate of 91/2% per annum from 1St October, 1984 until judgment and thereafter at the rate of 91/2% per annum until final liquidation of the whole debt together with costs.
The writ of summons containing the claim, dated 21/11/84 and a statement of claim dated 21/11/84 were filed together in the Lagos High Court Registry on this same day. Both were served upon the defendant.
Upon the failure of the defendant, within the time prescribed by law, to enter an appearance to the writ of summons or file a statement of defence to the plaintiff's statement of claim, the plaintiff by motion on notice under Order 9 Rule 3 and Order 24 Rule 2 of the High Court of Lagos State Rules of Court and the Court's Inherent Jurisdiction, applied to court for the following relief:-
An order entering final judgment for the plaintiff in the amount claimed in the plaintiff writ of summons and Statement of Claim together with interest as claimed upon default of appearance and or defence.
The application came on for hearing before Adeniji. J.. on 25/4/85. on that day, counsel for defendant sought and was granted an adjournment for him to regularise the defendant's position. Nothing significant happened in the case until l/7/85 when the following occurred in court before Adeniji, J:-
PARTIES.
Absent.
Bayo Adeniji - Fashola for Plaintiff/Applicant.
Mr. Joseph for Defendant.
Case Adjourned. 8/7/85 to enable defendant file Statement of Defence before then, with N200 costs to plaintiff/applicant.
Costs to be paid on or before 8/7/85.
Pursuant to the above order of Adeniji. J. 1/7/85. the defendant filed a statement of defence dated 4/7/85 to the plaintiff's statement of claim. It appears therefore quite clear that the statement of defence was filed regularly. For reasons hereinafter appearing I have to reproduce the whole of the statement of defence:-
STATEMENT OF DEFENCE
SAVE AND EXCEPT as herein specifically admitted, the defendant denies each and every allegation of facts contained in the plaintiff's Statement of Claim if each were set out seriatim and specifically traversed the same.
1. The defendant admits paragraphs 1,2.3,4 and 7 of the plaintiff's Statement of Claim.
2. The defendant denies paragraph 5, 6, 8. u and lo ~ the H plaintiff's Statement of Claim.
3. The defendant shall at the trial of this action rely on the agreement between the parties herein as contained in the Letter dated 25th April, 1980 and hereby gives the plaintiff notice to produce same.
4. The defendant avers that pursuant to the aforesaid letter/agreement, the defendant appointed Messrs. Mcgregor and Ojutalayo, Chartered Surveyors and Valuers as his agents.
5. Furthermore by a letter dated 6th May, 1980 the defendant's aforesaid agents with the defendant's full knowledge and consent duly noticed the plaintiff of their position and the defendant hereby gives notice to the plaintiff to produce the said letter.
6. The defendant denies the receipt of any debit or revision letter whatsoever from the plaintiff and or its solicitors.
7. The defendant shall at the trial of this action contend that the plaintiff action herein is premature.
WHEREOF of defendant denies the plaintiff's claim of N93,490.95k or at all as same is not due to the plaintiff.
It was after this regular statement of defence had been filed by the defendant that the plaintiff/bank by summons on notice applied to the court under order 10 Rules 1 & 2 of the Lagos State High Court Rules for the following relief:
Entering judgment against the defendant for the sum of N93,490.95 (Ninety-three thousand, four hundred and ninety naira, ninety five kobo) together with interest at the rate of 91/2 per annum from 1st October, 1984 until judgment and thereafter at the rate of 91/2 per annum until final liquidation of the whole debt together with costs.
Order 10 rules 1 & 2 provide as follows:-
1. (a) Where the defendant appears to a writ of summons specially indorsed with or accompanied by a statement of claim under Order 3, rule 4, the plaintiff may on affidavit made by himself or by any other person who can swear positively to the facts, verifying the cause of action and the amount claimed (if any liquidated sum is claimed), and stating that in his belief there is no defence to the action except as to the amount of damages claimed, if any, apply to a Judge in Chambers for liberty to enter judgment for such remedy or relief as upon the statement of claim the plaintiff may be entitled to. The Judge thereupon, unless the defendant shall satisfy him that he has a good defence to the action on the merits or shall disclose such facts as may be deemed sufficient to entitle him to defend the action generally, may make an order empowering the plaintiff to enter such judgment as may be just, having regard to the nature of the remedy or relief claimed.
(b) If on the hearing of any application under this rule it shall appear that any claim which could not have been specially indorsed under Order 3, rule 4, has been included in the indorsement on the writ, the Judge may, if he shall think fit, forthwith amend the indorsement by striking out such A claim, or may deal with the claim specially indorsed as if no other claim had been included in the indorsement, and allow the action to proceed as respects the residue of the claim.
(c) Where the plaintiff's claim is for the delivery up of a specific chattel (with or without a claim for the hire thereof or for damages for its detention) the Judge may make an order for the delivery up of the chattel without giving the defendant any option of retaining the same upon paying the assessed value thereof, and such order if not obeyed may be endorsed by a writ of attachment or a writ of delivery.
2. The application by the plaintiff for leave to enter final judgment under rule 1, of this Order shall be made by summons returnable in Chambers not less than four clear days after service. accompanied by a copy of the affidavit and exhibits referred to therein.
The affidavit in support of the summons read thus:
AFFIDAVIT IN SUPPORT OF SUMMONS
I, Kolade Ajayi, Nigerian Bank Officer, now residing at Block7, House 14 Satellite town, Lagos hereby make oath and say as follows:
1. That I am an officer in the Credit Department of the Plaintiff Company.
2. That I am familiar with the facts of this case and I have the E prior authority and consent of the plaintiff to swear to this affidavit.
3. That the plaintiff's cause of action in this suit is as indorsed in the writ of Summons and Statement of Claim herewith attached and marked Exhibit 'P1'
4. That sometime in April, 1980 the plaintiff granted to the F defendant at the defendant's request a term loan of ~7(),000.00 (Seventy thousand naira) under certain terms and conditions as communicated to the defendant vide plaintiff's letter JAO/BEE/NAL of 25/4/80, which terms were accepted by the defendant.
5. That the document now shown to me and marked Exhibit 'P2' is a photocopy of the aforesaid letter showing the said G terms and conditions and which copy I confirm as correct having compared it with the original in plaintiff's custody.
6. That under the terms and conditions governing the loan and accepted by the defendant the defendant was required by paragraph 5 of the same to repay the loan in full within H four (4) years from either
a. rental income on the bungalows estimated at N12,000.00 (twelve thousand naira) per annum on i.e. N24,000.00 (twenty-four thousand naira) per annum or/and
b. any other sources.
7. That the defendant made full use of the loan granted as aforesaid and as at 30/8/84, his loan account with the reflected a debit in the sum of N93,490.95 (Ninety- three thousand, four hundred & ninety naira ninety-five kobo).
8. The defendant has not in spite of repeated demands paid back the said sum upon which interest at the rate of 91/2% continues to accrue.
9. That the attached and marked Exhibit 'P3' are some of the plaintiff's several letters of demand to the defendant which were never responded to.
10. That I am informed by Mr. Kola Awodein who is the counsel conducting this suit on plaintiff's behalf and I verily believe him that the defendant duly entered an appearance to this suit through his solicitors Messrs Akin 0. Sikuade & Co., and also filed a Statement of Defence on 8/7/85.
11. That the document now shown to me and marked Exhibit 'P4' is a copy of the defendant's Statement of Defence.
12. That I am informed by Mr. Kola Awodein of counsel and I verily believe him that the Statement of Defence discloses no defence whatsoever to the plaintiff's claim.
13. That the document now shown to me and marked Exhibit 'P5' is a photocopy of the letter referred to in paragraphs of the Statement of Defence and which copy I confirm as correct having examined it with the original in the custody of the plaintiff.
14. That the document now shown to me and marked Exhibit 'P6' is a copy of the Statement of Account of the defendant with the plaintiff/applicant which statement has been duly certified by me after examining same with the original entries in the book in the custody of the plaintiff/applicant and having found the same to be true and correct.
15. That the books are those kept by the plaintiff/applicant in the ordinary course of its business and that the entries thereon are those made in the ordinary course of plaintiff's business.
16. That the defendant has no defence whatsoever to this claim.
17. That I swear to this affidavit in good faith.
The defendant then filed an affidavit showing cause why he should be let in to defend the action. The affidavit read thus:-
1. That I am the above named defendant.
2. That I have been shown a copy of the affidavit of Kolade Ajayi deposed to on the 18th day of October, 1985.
3. That paragraphs 4 and 5 of the said affidavits are true.
4. That I intend to reply on the letter dated 25th April, 1980 referred to in paragraph 5 of the said affidavit.
5. That it was mutually agreed between the plaintiff and myself that time is not the essence of the agreement.
6. That in furtherance of the agreement my sole letting agents caused Exhibit P5' referred to in paragraph 13 to be written to the plaintiff.
7. That I am made to understand by the plaintiff before agreeing with same that the sum ofN70,000 is to be repaid to the plaintiff within 4 years of completing the bungalows and tenanting.
8. That it was the averments in paragraph contained in paragraphs 4, 5, 6 and 7 above that lured me on to accepting the loan.
9. That I have repeatedly informed the plaintiff of the state of the bungalows same being uncompleted yet.
10. That the sum of 70,()0O or at all is not due to the plaintiff.
11. That the plaintiff's claim and application before this court is an abuse of the process of this court.
12. That I at no time received any advice or notification from the plaintiff.
13. That I intend to defend the plaintiff's claim upon the foregoing depositions.
14. That I swear to this affidavit conscientiously.
Adeniji, J. heard the arguments on the application for summary judgment. Giving his ruling on it on 29/11/85 he held as follows:-
....Since the facts and particulars here show that this is a fair dispute as to the meaning of the loan terms and questions of facts may arise I think it is right in the circumstances to grant the defendant leave to defend this suit.
And he accordingly ordered as follows:-
Leave is hereby granted to the defendant to defend the action, and the Statement of Defence already filed deemed to have been properly filed in the circumstances. The parties are accordingly directed to take out summons for directions.
The plaintiff bank appealed against this ruling to the Court of Appeal, Lagos Division, which in its judgment in the appeal as per the lead judgment F of Uthman Mohammed, J.C.A., in which Nnaemeka-Agu, J.C.A., as he then was, and Kutigi, J.C.A. concurred delivered on 21/7/86 held as follows:-
first: In April, 1980, the appellant, on an application by the respondent granted the latter a loan of N70,000.00 with interest at 61/2 percent. The respondent accepted and signed the agreement on the terms and conditions specified therein. By the end of four years, after signing the agreement, the Loan Account of the respondent had gone up to N93,490.95. One of the conditions of offering the lo~n was that it would be repaid, with interest, within four years of the signature of the agreement.
Second: lt is without any doubt that the respondent has not raised any defence in both the statement of defence and the affidavit filed by him in this appeal and I am in agreement with the submission of Mr. Awodein that the appellant is entitled to summary judgment on the claim filed before the High Court ........................................................................
The appeal therefore succeeds and it is allowed.
The ruling of Adeniji, J., delivered on 29th November, 1985, is set aside. In its place, as applied for in the writ of summons, judgment is hereby entered in favour of the appellant and against the respondent, in the sum of N93,490.95 The respondent shall also pay all the accumulated interests at the rate of 91/2 percent per annum, from the 1st October, 1984 to date. In addition the judgment debt shall yield interest at the rate of 41/2% until the final liquidation of the total debt. I assess costs in favour of the appellant at N50.00 in this court and Nl50.00 at the court below.
It is against this judgment that the defendant has now appealed to this Briefs of argument were filed and served on both sides. According to the defendant/appellant the issues arising for determination in this appeal
are as follows:
1. Whether or not from the State of the pleadings the main issue joined between the parties turns on the construction of the terms and conditions of the agreement between the parties.
2. Whether or not the finding of the learned trial Judge that the appellant made out a prima facie case which ought to be tried being a finding of fact based on the totality of the evidence before the court ought to have been disturbed by the Court of Appeal.
3. Whether or not Order 10 Rules 1 and 2 procedure is appropriate in the circumstance of this case particularly in construing and NOT inspecting document to wit the terms and conditions of the agreement without the assistance of the arguments of both counsel and purely on affidavit evidence.
4. Whether or not the parties from the materials before the court agreed That the loan would be repaid, with interest, within four years of the signature of the agreement", and if so whose signature?
The main thrust of the submissions of counsel for the defendant/appellant Mr. C.O. Joseph on all the issues said to arise in this case is that the resolution of the dispute between the parties to this case turns on the construction of the loan agreement. And, this being so counsel submits this case is not a proper subject-matter for the proceedings for summary judgment under Order 10 rule 1 of the Lagos State High Court Civil Procedure Rules. For this proposition counsel relies on the following authorities:
Bowes v. Caustic Soda and Chlorine Syndicated (1982-93) 9 T. 328; Jacobs v. Booth's Distillery Company 85 L.T. 212 H.L. The Law Vol. LXXXV Page 262. Saw v. Khakim Lindsay V. Martin (1888-89) 5 T. L. R. 323 The Electric and General Contract Corporation V. Thomson - Houston Electric Company (1893-94) T.L.R. 103 Ford V. Harvey and other (1892-93) 9 T.L.R. 328.
Counsel for the defendant further makes the point that the Court of Appeal erred when it held:
One of the conditions of offering the loan was that it would be repaid, with interest, within four years of the signature of the agreement.
According to the brief of arguments of the plaintiff's respondent the issues arising for determination in this appeal are as follows:
(a) Whether the Court of Appeal was right in holding that the appellant had no arguable defence to the claim and in entering judgment for the respondent accordingly.
(b) Whether the Court of Appeal was right in examining and construing the relevant documents in evidence in its determination of the case.
(c) Whether a proper application of the relevant provisions of the said Order 10 precludes in all events an examination and construction of relevant documents produced in evidence.
These issues are, in my view, vitiations of the issues said by the defendant to p arise for determination in this appeal which together boil down to the point whether or not the defendant should be let in to defend the action. And the submission in this regard of counsel for the plaintiff, Mr. Kola Awodein, is that on the whole of the material in this case there is no issue or question in which it ought rightly to be allowed to go to actual trial. In effect, counsel has submitted that the defendant has not raised either in his statement of de- F fence or in the affidavit showing cause against the application any triable issue. He places reliance on the following cases:
1. Verrall v. Great Yarmouth BC (1980)1 All E.R. 839 at 843,.
2. European Assian Bank V Punjab and Sind Bank (1983) 2 All E.R. 508 at 516;
3. Nishizawa Ltd. V. S.N. Jethwani (1984)12 S.C. 234 at 276-7; and
4. VanLynn Developments Ltd. V Pelias Construction Co. Ltd. (1968)3 All E.R. 824 at 825.
The provisions of Order 10 rules (1) and (2) were considered in depth in the case of Nishizawa Ltd. v. S.N. Jethwani (1984)12 S.C. 234 by this court. It will be a work of super-ero-gation if I were to undertake to examine the provisions afresh and construe them. I think it is enough for me if I apply the decisions in the case to the case in hand or state my reasons why a particular decision in the case will not apply here.
It is to be noted as I have said earlier on in this judgment the defendant's statement of defence to the plaintiff's statement of claim was filed regularly. So an important feature of this case is that there was a regular statement of defence in existence before the plaintiff applied for summary judgment under Order 10 rule 1. In Nishizawa Ltd. V. Jethwani Ltd. (supra) this court H was confronted with a situation where a statement of defence was filed after an application for summary judgment was made but before leave to defend the action was given to the defendant by court. It was in this context that the relevance of the statement of defence filed was pronounced upon in the consideration of the point whether or not the defendant in the case should have been let in to defend.
In Nishizawa Ltd. V. Jethwani, (supra) it was remarked as per the lead judgment of Obaseki, J.S.C., that the English case of Mclardy V. Slateum (1890) 24 Q.B.D. 504 is:
.no authority for the statement that "the fact that he has delivered a defence may be sufficient to enable a defendant to get leave to defend" but only an authority for the proposition that "the plaintiff's application for judgment may be made even after the delivery of a statement of a defence.
I consider the decision in the case of Mclardy V. Slateum (supra) very much relevant to the case in hand. So it behoves me to set down the decision in the case at page 506 of the report by Pollock, B.:-
This is an appeal from an order of Field, J., at chambers, setting aside an order of a master, who, upon an application under Order XIV., had given the defendant leave to defend upon paying the amount of the claim into court.
The order of Field, J., proceeded upon his view of the proper construction of Order XIV. , r.1, namely, that the plaintiff was bound to make his application for summary judgment before the defendant had put in any statement of defence. We took time to consider our judgment, principally because we were desirous of ascertaining what was the practice followed by other Judges, and by the masters, in consequence of being informed by counsel that Field, J., had long ago decided, in an unreported case, that
the application must be refused if made after delivery of a statement of defence.
We have made those inquiries, and learnt that the view of Field, J., still is that the intention of Order XIV was that the plaintiff must make his application before delivery of a statement of defence; but that in peculiar circumstances it may be made after, as where the defendant has delivered his defence before the expiration of the usual time, for the very purpose of defeating such an application. The view taken by other Judges, and by the masters, is that the intention of Order XIV., r.1, was that the plaintiff should apply within a reasonable time after the appearance of the defendant, but that it very often happens that a defence, which has been delivered, itself discloses facts which make an application under Order XIV right and proper. We think that this is the proper construction of the rule. (Italics mine)
As I have said earlier on in this judgment the statement of defence in the instant case was filed regularly. It appears from the decision in Mclardy v. Slateum (supra) that before that case the view was that upon a proper constructionoforderXl Rule 21 (U.K. Rules of Court) which as I have said is in pari materia with Order 10 rule 1 of the Lagos High Court Civil Procedure Rules the plaintiff was bound to make his application for summary judgment before the defendant had put in any statement of defence. My understanding of the decision in Mclardy v. Slateum is that that case has not swept away that view. What it has done, in my view, is that it recognises an exception to that view, namely, when it happens that a defence, which has been delivered, itself discloses facts which make an application for summary judgment right and proper. It appears to me that when an application for summary judgment is made under these circumstances, one must perforce have recourse in the first instant to the statement of defence delivered in the consideration of the point whether or not to grant the application. If the statement of defence in fact shows a triable issue, then the application will be refused. If it does not, then recourse will be had to the affidavit of the defendant showing cause to the application with a view to finding out if the defendant, in the language of Order 10 rule 1(a) of the High Court of Lagos State Rules has satisfied the Judge that he has a good defence to the action on the merits or that he, the defendant, has disclosed such facts as may be declared sufficient to entitle him to defend the action generally.
On all the matters which the trial Judge has to consider before coming to his decision as to whether or not to make an order empowering the plaintiff to enter summary judgment against the defendant, the trial Judge is not without guidance. In Nishizawa Ltd. v. Jethwani (supra) at page 260 this court quoted with approval Notes 14/3 - 4/4 to Order 014 r.3 of the English Rules on Summary Judgment in the Supreme Court Practice 1976 as guidance to a court dealing with a matter of this nature:-
The defendant's affidavit must "condescend upon particulars", and should, as far as possible, deal specifically with the plaintiffs claim and affidavit, and state clearly and concisely what the defence is, and what facts are relied on as supporting it. It should also state whether the defence goes to the whole or part of the claim, and in the latter case it should specify the part.
A mere general denial that the defendant is indebted will not suffice (Wallingford V. Mutual Society (1880) 5 App. Cas., per Lord Blackburn, at p.704; Re General Rail Syndicate, Whiteley's Case, (1900)1 Ch., per Lindley, M.R., at p.369 Anon., (1875) WN 249, per Quain, J., at p.250) unless the grounds on which the defendant relies as showing that he is not indebted are stated (ibid.). If the affidavit commences, as it may, with a statement that the defendant is not indebted to the plaintiff in the amount claimed, or any part thereof, it should proceed to state why the defendant is not so indebted, and to state the real nature of the defence relied on (Re General Rail, Syndicate, G supra).
Again, it is not enough for the defendant to show a case of hardship but creating no enforceable right, e.g., past promise by plaintiff unsupported by valuable consideration (Woolston V. Baines, (1876) W.R. 74), nor a mere inability to pay (Besant V. Townsend, 22 L.R. Ir. 389), nor an allegation that the plaintiff H has given time for payment which, of course, constitutes no defence unless there be consideration (Hookham V. Nayer (1905), 22 T.L.R. 241).
If the defence relied on is fraud the affidavit should state the particulars of the fraud (Wallingford V. Mutual Society (1880) 5 App. Cas. 685). A mere vague general allegation of fraud is useless (ibid).
Similarly, if a legal objection is raised, the facts and the point of law arising thereon must be clearly stated.
Indeed, in all cases, suffident facts and particulars must be given to show that there is a bona fide defence (Wallingford V. Mutual Society (1880), 5 App. Cas. 685, see judgment of Lord Blackburn at p.704; Harrison v. Bottenheim, 26W. R. 362; Ray V. Barker, 4 Ex. D. 283; Shurmur V. Young (1889), 5 T.L.R. 155). Matter of hearsay is admissible in the defendant's affidavit (Harrison V. Bottenheim (1878), 26 W.R. 362, C.A.), provided that the sources and grounds of information or belief are disclosed: see Rule 4(2), supra, and Re Young Manufacturing Co., (1900)2 Ch. 753, C.A.; and cf. 0.41, r.5.
The defendant's affidavit is not conclusive and does not preclude him from relying on defences not raised in it (Ray V. Newton, (1913)1 K.B., per Hamilton, L.J. at p.258).
The case of Jacob's v. Booth's Distillery Company (1901-2) Volume 85 N.S. The Law Times Report 262 is authority for the proposition that judgment should only be ordered under Order XIV (U.K. Rules) dealing with summary judgment where assuming all the facts in favour of the defendant they do not amount to a defence in law. The same case also decides it that where there is a triable issue, though it may appear that the defence is not likely to succeed the defendant should not be struck out from laying defence before the court either by having judgment against him or by being put under terror to pay money into court as a condition of obtaining leave to defend.
The case of the Electric and General Contract Corporation V. The Thomson - Houston Electric Company 1893 - 94 Vol. X The Time Law Report 103 is authority for the proposition that Order XIV (U.K. Rules) providing for summary judgment does not apply to cases raising what may turn out to be difficult question of law. The case of Ford V. Harvey & anor. 1892-95 9 T.L.R. 328 is authority for the proposition tha