citation: LOR (27/6/2001) CA
In The Court of Appeal of Nigeria
On Wednesday, the 27th day of June, 2001
Before Their Lordships
ISA AYO SALAMI Justice of The Court of Appeal of Nigeria
MAHMUD MOHAMMED Justice of The Court of Appeal of Nigeria
VICTOR AIMEPOMO OYELEYE OMAGE Justice of The Court of Appeal of Nigeria
1. ALHAJI (DR.) BAWA GARBA
2. A.B.G. COMMUNICATIONS LTD-Appellants
SHEBA INTERNATIONAL (NIG.) LTD –Respondent
MOHAMMED, J.C.A. (Delivering the Leading Judgment): By a writ of summons dated 8/7/98, the plaintiff which is now the respondent before this court filed an action at the Kaduna State High Court holden at Kaduna, under the undefended list of that court pursuant to Order 22 rules 1 – 5 of the Kaduna State High Court (Civil Procedure) Rules 1987 against the defendants, who are now the appellants claiming the following reliefs:1. The sum of 15,000.00 (Fifteen thousand pounds sterling) or the equivalent of N2,175,000.00 (Two Million, One Hundred and Seventy Five Thousand Naira) at the exchange rate of N145.00 to a pound sterling being the balance of $40,000.00 (Forty Thousand US Dollars) and 35,000 (Thirty Five Thousand Pounds Sterling) paid by the plaintiff to the defendants on investment of Jos Satellite Joint Venture.
2. Interest at the rate of 21 percent per annum on the said principals of $40,000.00 and ?35,000.00 as follows.
(a) On $40,000.00 from 3/6/93 – 26/7/96 i.e $ 25,200.00.
(b) on $10,000.00 from 26/10/96 i.e $ 525.00.
(i) Sub-total $25,725.00 or at N85.00 to a US dollar N2,186,625.00.
(c) On 35,000.00 from 5/8/93 ’97 2412/96 i.e 22,050.00.
(d) On 25,000.00 from 24/12/96 ’97 0/5/97 i.e 2,187.00.
(e) On 20,000.00 from 30/5/97 ’97 8/9/97 i.e 1,050.00.
(ii) Subtotal 25.287.00 Or (at N145.00 to a pound sterling) N 3,666,687.50.
Total (i) & (ii) N5,853,312.50.
(f) On 15,000.00 from 8/9/97 until the entire debt is liquidated.”
Upon the service of the writ of summons and the accompanying affidavit in support of the respondent’s claims on the appellants, their learned counsel in response not only filed a notice of intention to defend the action as required under Order 22 of the Kaduna State High Court (Civil Procedure) Rules 1987, but also a preliminary objection to the jurisdiction of the trial High Court to entertain the respondent’s action. The notice of intention to defend the action and the notice of preliminary objection challenging the jurisdiction of the trial High Court were supported by the same affidavit deposed to on 17/7/98 on receipt of which the respondent filed a counter affidavit deposed to on 27/7/98. A further and better affidavit in support of notice of intention to defend the action and notice of preliminary objection was filed by the appellants on 28/7/98 before the undefended suit and the preliminary objection came up together before Makeri J. for hearing the same day, 28/7/98. After suffering a number of adjournments, the matter was ultimately heard on 9/11/98. In his ruling/judgment delivered on. 11/6/99, the learned trial Judge dismissed the preliminary objection raised by the appellants and held that the lower court has jurisdiction to hear the suit. On the affidavits in support of the appellants’ notice of intention to defend the suit, the lower court found that no defence on the merit had been disclosed therein to warrant granting the appellants as the defendants in the action leave to defend the suit and consequently proceeded and entered judgment for the respondent as plaintiff against the appellants as defendants as per the sum indicated in the writ of summons. The relevant part of this judgment at pages 106 to 107 of the record reads:
“A careful consideration of all the facts surrounding this matter reveals clearly that the transaction here has nothing to do with the internal management of an incorporated company as submitted by Alh. Sani Aminu Esq. This being the case the submission that it is only the Federal High Court that has jurisdiction in this case can not stand as such the submission is discountenanced. On the issue of notice of intention to defend the suit it is very clear that the defendant was by his admission and making part-payment of the amounts in question vested this court with power to adjudicate on this matter.
The relevant question is whether there is a defence on the merit disclosed by the defendants? The answer is in the negative in the sense that the defendant having admitted the amount and has paid a substantial part of the amount of it, cannot now back out from paying the balance. He even made an undertaking as to whom he would pay the said balance. It is therefore too late at this stage to hear him to say that both the demand made by the plaintiff and the part payment already made by the defendants are all illegal as submitted by Alh. Sani Aminu. There is no iota of any illegality in the whole transaction at all.
In the final analysis, I have come to the conclusion that having regards to the whole buts of this case the preliminary objection lacks merit and as such must be dismissed.
The notice of intention to defend this suit also has not disclosed any defence on the merit and same is discountenanced. To this end, I uphold the submission of Aneme Esq and enter judgment in favour of the plaintiff as against the defendants under Order 22 rule 4 of the rules of this court 1987 per the sum indicated in the writ of summons dated 21/7/98. Interest payable on the said amount shall be 10% from date of judgment until the whole or entire debt is liquidated.”
Dissatisfied with the ruling and judgment, appellants have appealed to this court. The amended notice of appeal of the appellants contains 4 grounds of appeal from which 4 issues for the determination of the appeal were distilled. The issues are:
“1. Whether the facts and the circumstances of this matter reveal clearly that the transaction between the appellants and the respondent is concerned with the internal management of a limited liability company incorporated under the provisions of the companies and Allied Matters Act 1990 (hereinafter referred to as “CAMA).
(2) Whether from the facts and circumstances of this matter the respondent’s claim could be taken as a debt or liquidated money demand, within the meaning and contemplation of Order 22(1) of the High Court (Civil Procedure) Rules 1987.
(3) Whether the trial court was right when it dismissed the appellant’s case herein having regard to its failure to call or order for oral evidence to resolve the glaring conflicts in the affidavit evidence before it.
(4) Whether by awarding interest to the respondent the appellants were denied fair hearing.”
Although in the respondent’s brief of argument, 4 issues were also formulated from the 4 grounds of appeal filed by the appellants, the issues which are not the same as those in the appellant’s brief or argument are as follows:
“1. Whether from the facts and circumstances of this case, it was the Federal High Court that had exclusive jurisdiction to entertain this matter.
2. Whether from the facts and circumstances of this case the matter was not the type contemplated by Order 22 of the Kaduna State High Court (Civil Procedure) Rules, 1987.
3. Whether the trial court did not properly consider the merits of the appellants’ notice of intention to defend along with the argument on the preliminary objection over jurisdiction before coming to a decision.
4. Whether the issue of interest was not conceded by the appellants.”
A careful perusal of the 4 issues each in the appellants’ and the respondent’s briefs of argument respectively shows that each of the issues 1,2,3, and 4 arose from grounds 1,2,3, and 4 respectively of the appellants’ grounds of appeal. However, although the appellants are complaining in their ground one of the grounds of appeal that the lower court had no jurisdiction to entertain the case, the appellants’ issue No. 1 arising from that ground was merely framed at large without raising anything on jurisdiction. The issue is not an issue at all in this appeal as its resolution one way or the other would have no bearing at all in allowing the appeal. Similarly, the respondent’s issue No. 3 which is supposed to have arisen from the appellants’ ground 3 complaining of failure of the trial court to call oral evidence to resolve conflicts in the affidavits of the parties, has no bearing whatsoever with that ground of appeal or any of the remaining 3 grounds of appeal for that matter. The issue simply does not arise from any of the grounds of appeal. Thus, not being proper issues for determination in this appeal, the appellants’ issue No. 1
and the respondent’s issue No. 3 shall be ignored in the determination of this appeal. See Onyesoh v. Nnebedun (1992) 3 NWLR (Pt. 229) 315 at 343. The remaining issues for determination therefore in this appeal are the appellants’ issues 2,3 and 4 and the respondent’s issues 1,2 and 4 respectively.
Since the respondent has properly framed an issue from the appellants’ ground one of the grounds of appeal, I shall proceed to resolvethat issue on jurisdiction. However before proceeding to do so, I shall state though briefly, the facts of the case. By an agreement in 1993, the appellants and the respondent agreed to form a joint venture to be known as Jos Cable Satellite Limited. Pursuant to that agreement in Kaduna, the respondent paid the sum of $40,000.00 and 35,000.00 respectively to the appellants as the respondent’91s contributions or shares in the proposed joint venture which ultimately resulted in the incorporation of the company, Jos Cable Satellite Limited. Not long after the incorporation of the company, the respondent became dissatisfied with the venture and therefore decided to withdraw from it by a letter dated 14/3/95 addressed to the 1st appellant asking for the repayment of the sums paid towards the venture together with interest. In their reply dated 4/10/95, the appellants agreed to the withdrawal of the respondent from the joint venture and also agreed to refund the sums of $40,000.00 and 35,000.00 respectively paid by the respondent towards the joint venture but did no say anything on interest on the amount. Pursuant to their agreeing to pay back the sums invested, the appellants had between 26/9/96 and 8/9/97, paid a total sum of $40,000.00 and 20, 000.00 to the respondent thereby leaving a balance of 15,000.00. It was when this balance could not be paid by the appellants inspite of undertaking to do so, that the respondent instituted this action to recover the balance of 15,000.00 together with 21% interest on the total amount paid to the appellants. The lower court granted the reliefs sought by the respondent with 10% interest under the undefended list of that court, hence the present appeal.
The first issue for determination therefore is whether having regard to the claims of the respondent, the lower court has jurisdiction to hear the case. It was argued for the appellants that having regard to the transaction between the parties in this appeal which relates to the management of internal affairs of a company, Jos Cable Satellite Limited registered under the provisions of the Companies and Allied Matters Act 1990, the lower court has no jurisdiction to hear the case which, by virtue of section 230 of the 1979 Constitution as amended by Decree 107 of 1993 is under the exclusive jurisdiction of the Federal High Court. The cases of 7UP Bottling Company Ltd v. Abiola & Sons (1996) 7 NWLR (Pt. 463) 743 – 744 and Nwaubani v. Golden Guinea Breweries Plc (1995) 6 NWLR (Pt. 400) 184 at 200. That having regard to the complaint of the respondent in paragraph 4(1) of the affidavit in support of the writ of summons which touches on the internal affairs of a company, only the Federal High Court that has jurisdiction in the case. Appellants’ learned counsel therefore urged this court to allow the appeal on this issue.
The respondent however contended that its claim at the trial court is within the courts jurisdiction as it only involves a claim for the refund of money paid to the appellants which the appellants agreed to pay and infact started paying leaving only a balance of 15,000.00. That the claim being money paid to the appellants as promoters of company, it is the appellants that are liable to refund relying on the case of Transbridge Co. Ltd v. Survey International Ltd. (1986) 4 NWLR (Pt.37) 516 at 605. Learned counsel to the respondent concluded that the respondent’91s case at the lower court does not fall within the jurisdiction of the Federal High Court under section 230(1) (e) of the 1979 Constitution as amended by Decree 107 of 1993.
Jurisdiction is the very basis on which any court of law tries a case as it is the life line of all trials. This is because a trial without jurisdiction is a nullity.The current statute in force at the time the respondent’s action was filed at the court below with regard to the relevant part of the jurisdiction of the Federal High Court is the provision of section 230 (1) (e) of the 1979 Constitution as amended by the Constitution (Suspension and Modification) Decree No. 107 of 1993 which states:
“230(1) Notwithstanding anything to the contrary contained in this Constitution and in addition to such other jurisdiction as may be conferred up on it by an Act of the National Assembly or Decree, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters arising from:
(e) The operation of any Act or Decree relating to Companies & Allied Matter and any other common law regulating the operation of companies.”
There is no doubt therefore that any dispute between parties over the operation of the Companies and Allied Matters Act 1990 regulating the operation of companies, comes exclusively under the jurisdiction of the Federal High Court, as
submitted by the appellants relying on the case of 7up Bottling Co. Ltd v. Abiola & Sons Ltd (1996) 7 NWLR (Pt.463) 714 at 744 cited and relied upon in support of the argument.
However, the law is also well settled that it is the claim of the plaintiff that determines the jurisdiction of the trial court. In other words ordinarily, it is the claim of the plaintiff and not the defendant’s defence that would be looked into or examined to determine jurisdiction. See Adeyemi v. Opeyori (1976) 910 SC 31 at 49 and Mustapha v. Governor of Lagos State (1987) 2 NWLR (Pt.58) 539; Opiti v. Ogbeiwi (1992) 4 NWLR (Pt.234) 184; Anya v. Iyayi (1993) 7 NWLR (Pt.306) 290 and Akinfolarin v. Akinnola (1994) 3 NWLR (Pt. 335) 659 at 674 where Iguh JSC stated the position of the law when he said:
“In the first place, it is a fundamental principle of law that it is the claim of the plaintiff which determines the jurisdiction of a court entertaining the same. See Ajaka Izenkwe & Ors v. Nnadozie (1952) 14 WACA 361 at 363 and Adeyemi v. Opeyori (Supra) at P.51.”
In the instant case, the claim of the respondent against the appellants as endorsed on the writ of summons filed under the undefended list of the lower court is for the sum of 15,000.00 or its Naira equivalent of N2,175,000.00 being the balance of $40,000.00 and ?35,000.00 paid by the respondent to the appellants on investment of Jos Satellite Joint Venture and interest at the rate of 21 % per annum on the said amounts paid to the appellants. On the face of this claim, there is no relief therein which relates the claim on the operation of the Companies and Allied Matters Act 1990 regulating the operation of companies. Although the amount being claimed is a balance of the amount paid by the respondent in a joint venture company registered under the Companies and Allied Matters Act, the joint venture having been terminated by mutual agreement of the parties to the joint venture when the respondent was allowed to withdraw and be paid back the amount it had invested in the joint venture, the balance of that amount now being claimed by the respondent is a simple debt or liquidated money demand within the contemplation of Order 22 Rule 1 of the Kaduna State High Court (Civil Procedure) Rules 1987, and therefore to my view falls squarely within the jurisdiction of the lower court. In other words, right from the 4th day of October, 1995, when the appellants clearly accepted in writing by their letter at page 11 of the record of the proposal by the respondent to withdraw from the venture as contained at page 10 of the record and also agreeing in writing to refund to the respondent the sums of $40,000.00 and 35,000.00 respectively paid to the appellants by the respondent towards the sustenance of the joint venture project, the amounts became a debt or liquidated money demand payable by the appellants to the respondent. The dispute between the parties over the management of the Jos Cable Satellite Limited which was incorporated as the result of the joint venture established between the parties and which has not been made the subject of the claim of the respondent in the present suit, is totally irrelevant and therefore can not play any role in the determination of the jurisdiction of the lower court to entertain the respondent’91s claim. Learned trial Judge was indeed right in holding that he had jurisdiction to hear and determine the respondent’91s claim.
The second issue is whether from the facts and circumstances of this case, the respondent’s claim could be taken as a debt or liquidated money demand within the meaning and contemplation of Order 22 Rule 1 of the High Court (Civil Procedure) Rules 1987. Learned counsel to the appellants referred to the definitions of words ‘debt’ and ‘liquidated demand’ in Blacks Law Dictionary Sixth Edition and submitted that the claim of the respondent in the present case does not fall within the contemplate support of the writ of summons and paragraphs 3(a)-(g) of the appellants affidavit in support of notice of intention to defend the suit, had revealed some disputes over the management of the joint venture project, the Jos Cable Satellite Limited which necessitated the transfer of the case to the ordinary cause list for hearing on pleading in line with the decision of this court in Agwuneme v. Eze (1990) 3 NWLR (Pt. 137) 242 at 253 – 257.
For the respondent it was argued that since the claim of the respondent was the balance of 15,000.00 or its Naira equivalent including interest on the same which brought the total amount at the time of filing the suit to N5,853,312.20, the amount is a debt and infact liquidated money certain in sum within the requirement of Order 22 of the Kaduna State High Court (Civil Procedure) Rules 1987 and therefore rightly heard and determined by the lower court under the undefended list.
The claim of the respondent in the present case as endorsed in the writ of summons is for a sum of money due by certain and express agreement as the amount of $40,000.00 and ?35,000.00 which the respondent asked the appellants to refund to it and which the appellants agreed to refund, had been ascertained and settled by agreement of the parties. The respondent’91s claim for the balance of the amount still outstanding from the total amount the parties agreed to be refunded to the respondent, is therefore debt or liquidated money demand within the contemplation of Order 22 rule 1 of the Kaduna State High Court (Civil Procedure) Rules 1987.
The third issue is whether the trial court was right when it dismissed the appellants’ case having regard to its failure to call or order for oral evidence to resolve the glaring conflicts in the affidavit evidence before it. The appellants have argued in their brief of argument that although conflicts exist in the affidavits of the parties on whether board meetings were held in the operation of the joint venture company, or whether the payments made to the appellants were loan, or whether general meetings of the joint venture company were held, the lower court all the same dismissed the defence of appellants and refused to call oral evidence to resolve the conflicts as required by law. Several cases were cited in support of this argument, one of which is the case of Shugaba v. Union Bank Of Nigeria Plc (1997) 4 NWLR (Pt. 00) 481 at 490.
As far as the claim of the respondent in this case is concerned, learned counsel to the respondent had maintained that there is no conflict at all in the affidavit of the parties warranting the calling of oral evidence to resolve. That as the appellants’ affidavit in support of their notice of intention to defend the suit had disclosed no defence on the merit to the claim, the lower court was right in refusing to transfer the case to the general cause list for hearing.
It is indeed the law as correctly stated in the appellant’s brief of argument that where there is conflict in the affidavits filed by parties in support of their respective cases in a dispute before a court, it is the duty of the court
trying the case to resolve such conflicts in the evidence by calling oral evidence or otherwise. See Nwosu v. Imo State Environmental Sanitation Authority (1990) 2 NWLR (Pt. 35) 688 at 718 where Nnaemeka-Agu JSC (as he then was) stated the law as follows:
“Evidence by affidavit is, it must be noted, a form of evidence. It is entitled to be given weight where there is no conflict, after the conflict has been resolved from appropriate oral or documentary evidence. For true, it is the law that where there is conflict of affidavit evidence called by both sides, it is necessary to call oral evidence to resolve the conflict. See Falobi v. Falobi (1976) 9 & 10 SC 1 P.15; Akinsete v. Akinduture (1966) 1 All NLR 147. But I believe that it is not only by calling oral evidence that such a conflict could be resolved. There may be authentic documentary evidence which supports one of the affidavits in conflict with another. In a trial by affidavit evidence such as this, that document is capable of tilting the balance in favour of the affidavit which agrees with it.”
In the present case where the claim of the respondent against the appellants is for the payment of the balance of the sum of 15,000.00 then due from the appellants out of the sums of $40,000.00 and 35,000.00 respectively which the appellants had agreed to pay the respondent, there was no conflict at all in the parties affidavit on that claim filed under the undefended list. The alleged conflicts in the affidavit listed by the appellants in their argument as to whether there had ever been a board meeting of the board of Jos Cable Satellite Limited, are totally irrelevant to the claim of the respondent which had already withdrawn from the joint venture with the agreement of the appellants who had almost completed refunding the respondent’91s investment in the joint venture before the present action was filed. In other words, whether there ever had been a board meeting or not of the board of the joint venture company is a matter which is no longer an issue between the parties as far as the claim of the respondent in this case is concerned. The result of this situation of course is that having regard to the present issue for determination in this appeal, I say there was no conflicts in the affidavit of the parties requiring any resolution by any evidence, not to talk of oral evidence.
The last issue for determination in this appeal is whether the lower court was right in awarding the respondent’s claim on interest. This issue is based or derived from the appellants’ ground 4 of the grounds of appeal which is complaining of the absence of an agreement between the parties on interest. It was argued for the appellants in support of this issue that from the papers filed and the affidavit evidence led at the trial court, there is no where the parties had expressly agreed on the issue of interest. That only paragraph 4(r) of the respondent’s affidavit in support of its claim Exhibit ‘E’ to the affidavit being a letter written by the respondent to the appellants that mentioned interest and that these do not constitute agreement between the parties. It was therefore further argued that in the absence of documentary evidence, a court can only adjudicate on the issue of interest after hearing the parties on the matter to avoid denial of fair hearing as was stated in Clay Industries (Nigeria) Ltd v. Aina (1997) 8 NWLR (Pt. 516) 208 at 227 – 228.
The respondent however pointed out that the issue of interest was raised by the respondent and conceded by the appellants. That the issue was raised by the respondent in paragraphs (q) and (r) at pages 5 and 6 of the records. The matter was also raised in the last paragraph of page 10 of the records. Learned counsel to the respondent therefore concluded that the appellants not having said anything in their affidavit and further affidavit in support of their notice of intention to defend the suit, are deemed to have admitted the claim.
The respondent’91s claim for interest at the rate of 21% per annum on the amounts of $40,000.00 and 35,000.00 respectively it had paid to the appellants as investment in the joint venture with the appellants from which it had voluntarily withdrawn with the agreement of the appellants, is the second relief contained in the respondent’91s writ of summons filed under the undefended list of the lower court. In support of this claim, the respondent averred in paragraph 4(q) and (r) of the affidavit in support of its claim as follows:
“(q) If the said $40,000.00 and 35,000.00 paid to the defendants by the plaintiff since 3/6/93 and 3/8/93 respectively were left in the plaintiff account it would have yielded colossal interest.
(r) The defendants are aware that deposits for shares attract interest at the prevailing bank rate”
The respondent also mentioned about interest in the last paragraph of its letter of 14/3/95 Exhibit to its affidavit withdrawing from the joint venture addressed to the appellants at page 10 of the record where it said:
“You may also be aware that any deposit for shares attracts interest payable at prevailing bank rate. We shall therefore expect a repayment of the principal amount and the interest accrued on 30th April, 1995.”
However, it is observed that the letter Exhibit ’91E’91 was only exhibited in support of the respondent’91s demand for the refund of only the sums $40,000.00 and ?35,000.00 respectively without averring anything on interest on the amounts as shown in paragraph 4(k) of the respondent’91s affidavit where it is stated:
“(k) The above irregularities discouraged the plaintiff who in March, 1995 demanded the refund of the said contributions of $40,000.00 and 35.000.00. (A copy of the said letter is exhibited hereto as Exhibit ’91E’91).”
However, it is observed that the appellants’91 reply to the respondents letter Exhibit ’91E’91at page 10 of the record dated 4/3/95 which appellant’91s letter is dated 4/10/95 at page 11 of the record, the appellants merely accepted the respondent’91s proposal to withdraw from the joint venture and agreeing to refund to the respondent the sums of $40,000.00 and 35,000.00 respectively without saying anything on interest. In an apparent agreement with that silence of the appellants on the issue of interest, even the respondent’91s subsequent demand for the payment of the principal amounts it had paid the appellants through its counsel Yahaya Mahmood Esq, when in the letter of demand dated 5/2/96, only the payment of the principal amounts was demanded to be made within 14 days while the demand of the respondent for interest was made only conditional and in the alternative if the amounts had to be recovered by filing a suit in court. Paragraph 3 of the learned counsel’91s letter at page 13 of the record an this issue is quite clear when it said:
“3. Our instruction is to demand for the payment of the sums of $40,000.00( Forty Thousand US Dollars) and 35,000.00 (Thirty Five Thousand Pounds Sterling) or the Naira equivalent within 14 days from the date of this letter. Thus, if the
payment is not made by noon of the 21st of February, 1996 we have alternative instructions to file a suit in court to recover the said amount with interests.”
Thus, as no action was filed against the appellants to recover the principal sums until the appellants had paid a greater part of this sum leaving the balance of only 15,000.00 which constituted the subject of the respondent’91s claim at the lower court filed in July, 98 to recover the same, the subject of or the basis of the respondent’91s claim for interest as reflected specifically on the writ of summons filed under the undefended list of the lower court, had been further beclouded thereby requiring proof on the affidavit evidence in support of the respondent’91s case, in the same way its claim for the principal sums was proved on the same affidavit evidence of exhibits A,B,C,D,E, and F made up of receipts for the payment of the principal, respondents letters authorising its bank to effect the payment, the respondent’91s letter of demand for the refund of its investment and the appellants’91 letter agreeing to the respondents withdrawal and the repayment of the sums demanded, as contained in the respondent’91s affidavit in support of the claim. The only evidence contained in paragraphs 4(q) and (r) earlier quoted in this judgment of the respondent’91s affidavit in support of the respondent’91s specific claim for interest, is not enough in my view to support that claim as the evidence in those two paragraphs, is purely speculative and does not give any basis in support of the claim. In other words in the absence of any agreement between the parties as to the amount of interest that an investment withdrawn from the joint venture would attract at the time of the withdrawal and thereafter until the amount is withdrawn is fully paid up, it is not possible to regard the respondent’91s claim for interest at 21% per annum as proved. The lower court was therefore wrong in entering judgment for the respondent in respect of that item of its claim at a reduced rate 10% interest per annum without any evidence on the basis of such reduction of the rates specifically claimed by the respondent which the respondent could not prove. In the circumstances of this case, the proper course the lower court could have taken was to have dismissed that item of the claim in the absence of any required proof. This is because the fact that the claim was filed under undefended list of the lower court, that does not absolve the respondent of the burden of proving its claim on the evidence averred in the affidavit in support of its claim as required by law.
For the foregoing reasons, this appeal succeeds in part. The appeal against the judgment of the lower court of 11/6/99 granting the respondent’91s claim in the sum of ?15,000.00 or its Naira equivalent being the balance of $40,000.00 (Forty Thousand US Dollars) and 35,000.00 (Thirty Five Thousand Pounds Sterling) paid by the respondent to the appellants on investment of Jos Satellite Joint Venture having failed is hereby dismissed and the judgment of the lower court in this respect is hereby affirmed. However, the appeal against the award of interest having succeeded is hereby allowed. Accordingly, the order of the lower court awarding 10% interest per annum to the respondent in place of interest of 21% per annum claimed by the respondent which was not proved is hereby set aside and replaced with an order dismissing the respondent’91s claim in that respect.
I am not making any order on costs.
SALAMI, J.C.A: I read before now the judgment just delivered by my learned brother Mahmud Mohammed, JCA and agree with the reasoning contained therein and the conclusion arrived there at.
I propose to dilate succinctly on the question of interest. Interest generally is not payable or recoverable at common law on ordinary debt in the absence of some:
(a) Contract express or implied.
(b) Mercantile usage.
(c) By statute such as S.17 of the Judgment Act of 1838; ss. 9(3) and 57 of the Bills of Exchange Act Cap. 35 of the Laws of the Federation of Nigeria, 1990 and the provisions of various High Courts Civil Procedure Rules allowing courts to grant post judgment interest.
(d) power of court to award interest in exercise of its equitable jurisdiction where a person in fiduciary relation has improperly profited from his fiduciary position, see Harsant v. Blaine Macdonald & Co.. (1887) 33 TLR 689.
The facts of the instant appeal do not place the respondent’s case within any of the circumstances set out above for attracting interest. There is neither an express or implied contract entitling the respondent to interest nor is there any mercantile practice to justify awarding it interest.
The parallel sought to be drawn between the circumstances of the instant appeal and the money placed on deposit for purchase of shares does not avail the respondent. The sums of 35,000.00 and $40,000.00 made available to the appellants were for an investment in a joint venture to establish a satellite station. Money placed on deposit for purchase of shares is not yet an investment. It is only transformed to an investment after it is converted to shares on the purchase. It is, therefore, alright for money placed on deposit for purchase of shares to attract interest until it is invested. But an investment can only attract profit or dividend, if the investment makes profit and not interest because it is being used to trade.
In the circumstance, I, too, for the reason contained in the lead judgment of my learned brother Mahmud Mohammed, JCA, find that the appeal partially succeeds and it is allowed to that extent. I endorse all the consequential orders including the order as to costs proposed in the lead judgment of my learned brother Mohammed, JCA.
OMAGE, J.C.A: The facts before this appeal commenced on 3rd June, 1993 when the respondent paid to the appellant the sum of $40,000 dollars, and on 5/8/93 paid also to the appellant the sum of ?35,000 sterling. The appellant issued receipts for both sums of money. It was the expectation of both the 1st appellant and the respondent that the sum paid represented the percentage of a shareholding of the respondent in a company to be incorporated by both parties. The company named for Cable Satellite Limited was incorporated, but it remained demanded of the purpose for which the parties agreed to its location. The respondent deposed that it found that the operating license of the Company was detained by the appellant not in his name for cable Satellite Limited as agreed, but in a creation of the appellant only called ABC Communications Ltd.
The respondent said it discovered also that the account of the joint venture was being operated in the name of ABC Communications, which belonged solely to the appellant. It was for this reason that the respondent in 1995 demanded the refund of its sum of money paid to the appellant. By its letter admitted as Exhibit F in a subsequent proceeding, the appellant agreed to refund the sum originally received by it from the respondent for the joint venture.
On various dates between 26/7/96, and 8/9/97, the appellant made payment through the respondent’91s solicitors of a total of US dollars $40,000, and 20,000 pounds with a balance of 15,000 unpaid of 15,000 at the then current rate of N145, to a pound is N7,175.000. Despite repeated promises made by the appellant to pay the balance due, he failed upon which reason the now respondent instituted an action in the High Court of Kaduna State for recovery of the said balance due. The said suit upon the application of the respondent was placed on the undefended suit cause list. The core of the respondent’91s claim against the appellant under the undefended list is the liquidated sum of 15,000 pounds sterling or its naira equivalent until the entire debt is paid together with interest thereon. Upon receipt of the writ under the undefended list, the appellant filed (1) A notice of intention to defend (2) a notice of preliminary objection. The objection contained in the notice is to the effect that the subject matter of the claim filed by the respondent is a matter of company incorporation, under the Companies and Allied Matter Act. That by the provision of section 230 of the 1979 Constitution as amended by Decree 107 of 1993, the Kaduna High Court has no jurisdiction on the matter. In the event, the counsel to the appellant urged that the respondents claim cannot be determined under the provision of Order 22 of the Kaduna State Civil Procedure Law. The appellant in the court below argued that because of the antecedent facts, only the Federal High Court has jurisdiction over the matter, being a matter of company dispute. In rejecting the preliminary objection of the appellant below the court upheld the submission of the respondent counsel that the claim of the plaintiff/respondent is for a simple debt, not one founded on a dispute in a company. The Jos Cable Satellite Limited incorporated in 1995 was not in existence at the time the money was paid, and that it is settled law that until an incorporated company adopts a liability after it comes into existence. it cannot be liable for the debt incurred before it comes into existence. The company is therefore not liable for the claim of the plaintiff/respondent. The above being the body of the defendant/appellant’91s intention to defend, the court below dismissed the defendant’91s objection and proceeded with the determination of the claim under the undefended suit. The court below found and ruled thus:
“In the final analysis, I have come to the conclusion that having regards to the whole units of this case the preliminary objection lacks merit, and as such must be dismissed the notice of intention to defend the suit also has not disclosed any defence, and same is discountenanced. To this end, I upheld the submission of Aneme Esq and enter judgment in favour of the plaintiff as against the defendant under order 22 rule 4 of the rules of this court 1987, per the same indicated in the writ of summons dated 21/7/98. Interest payable on the amount shall be 10% from date of judgment until the whole or entire debt is liquidated.”
The defendant was not satisfied with the judgment and being thereby aggrieved, filed two alternative grounds of appeal to one ground of law, each with its particular. There are four issues, proposed for determination, they are not in the alternative, they read thus:
“Whether the facts and circumstances of this matter reveal clearly that the transaction between the appellant and respondent is concerned with the internal management of a limited liability company incorporated under the Companies and Allied Matters Act 1990 hereafter referred to as CAMA.
Whether from the facts and circumstances of this matter, the respondent claim could be taken as a liquidated money demand within the meaning and contemplation of Order 22 (1) of the High Court Civil Procedure Rules 1987
3. Whether the trial Court was right when it dismissed the appellants’ case herein having regard to its failure to call or order for oral evidence to resolve the glaring conflicts in the affidavit evidence before it.
4. Whether by awarding interest in the respondent, the appellants were denied fair hearing.”
From the appellant ground of appeal, the respondent formulated, the following issues:
(1) Whether from the facts and circumstances of this case it was the Federal High Court that had exclusive jurisdiction to entertain this matter.
(2) Whether from the facts and circumstances of this case the matter was not the type contemplated by Order 22 of the Kaduna State High Court (Civil Procedure) Rules 1987.
(3) Whether the trial court did not properly consider the merits of the appellants notice of intention to defend alone with the arguments on the preliminary objection over jurisdiction before coming to a decision.
(4) Whether the issues of interest was not conceded by the appellants.
I have read with great care on several occasions the issues formulated by the appellant and those of the respondents with regards to the grounds of appeal filed by the appellant and I am of the view that the issues formulated by the respondent are simply a variation in the case of words of the appellants issue. Having said this, it is well to observe that though the appellant first 1st issue in the consequence is speaking of jurisdiction, the said first issue of the appellant is worded in such a manner and language, that the reader has to conclude, because it is not so specifically said that if the issue complained of is not under the Companies and Allied Matters Act 1990 CAMA, the State court has jurisdiction on it. Because of my observation above, I now place each issue 1,2,3,4 of the appellant against issue 1,2,3, 4 of the respondent and treat each issue of each party together as one in each case up to issue 4. I start with issue one of the appellant whose 1st issue I summarise as ‘If the circumstances of the matter between the party does not reveal that it is concerned with the internal management of company, is it not right to agree that the State court has jurisdiction? Whereas the respondents issue one avers this whether from the facts and circumstances of this case it was the Federal High Court that had exclusive jurisdiction to entertain the matter.
I have stated above the circumstances of the matter between the appellant and the respondent, but put briefly the facts are that the respondent paid some money for a share in the incorporation of a company. She became disappointed when she saw the way the company now incorporated was being operated and asked for a refund of her money. What is relevant from the point of view of law is this. The sum of money sought to the respondent was paid by the respondent to the appellant before this
company was incorporated. After its incorporation the company did not adopt its liability to the subscribers who paid the money one of promotion of the company sought a refund of his money with interest the question which arises for determination from the facts above is this. Is it the company which is liable to the respondent or the party also a promotion of the company to whom the money was given, and who acknowledged the receipt of the money? One simple approach to the questions is, can a company being an incorporated body incur liability before its incorporation? Before I answer to this question, I have to go into the status of a promotion in a company formation.In Twycross v. Grant (1877) 2 CPD 469 541 a promoter is described as one who undertakes to form a company with reference to a given object and to set it going, and who takes necessary steps to accomplish that purpose per Cockburn CJ.
A promoter is neither an agent of, nor a trustee of the Company, but he occupies a fiduciary position to the company. He must account to the company for any money he received as a promoter. A promoter has no right against the company for payment of services rendered before the promotion of the company, and a promise to pay him by company is not binding because the consideration is past. The point of defining the status of a promoter in this judgment is to show that the money received on behalf of a company before its incorporation is a past consideration and it is unenforceable against the company.
In the instant appeal, the printed record does not show that the sum paid to the respondent by the appellant was adopted by the company after its incorporation. Therefore for the reason given above, the company is not liable for any past consideration and the company is not therefore liable consequently the money received by the appellant from the respondent is not a matter within any internal dispute of the company. The respondents claim in the court below is only a matter of simple debt. Therefore the classification of the claim before the court is determined by the plaintiff’s claim, and not the defendant’s defence.
In my respectful view, the issue before the court below is one of a simple claim for money had and received, and the respondent claimed interest also such a matter was properly before the jurisdiction of the State High Court, and I so rule. I resolve issue one of the appellant and of the respondent in favour of the respondent.
I intend to treat issues two and three of the appellant and respondents together. For that reason I will treat now issue four of both the appellant and the respondents. Issue 4 reads as follows:
“Whether by awarding interest to the respondents the appellants were denied fair hearing. By his own submission in his brief, the appellants stated as follows:
From the papers filed and the affidavit evidence before the trial honourable court, there is no where the parties expressly agreed on the issue of interest the appellant therefore upbraided the judgment of the court for not hearing from both parties before awarding interest on the judgment. The real fact is that the trial court awarded against the appellant favour of the respondent interest at the rate of 10% instead of the prayers of the respondent for 21% on the writ of summons.”
In the respondents brief, on issue 4 he asked Whether the issue of interest was not conceded by the appellants. It is the respondents submission that as it did not contradict the respondent claim for interest in the court below, because the appellant was aware that the money received from the respondent, by it was an investment, the respondent was therefore entitled to interest though the appellant had submitted that the ground of appellant was improper, I hold the respectful view that the issue of interest accruable to the principal sum is properly raised by the appellant not for the issue of alteram partem raised by the appellant, but to determine whether any interest added to the claim of the respondent is a proper issue to be determined under the undefended list procedure, as postulated in issues 2 in both the appellant and the respondents brief. To answer the questions in the issues 2 of both the appellant and the respondent, when the two issues asked (i) whether the plaintiff respondent claim was a liquidated demand to be determined under Order 22, (1) of the High Court Civil Procedure rules 1987, and the respondent asked whether from the facts and circumstances the claim of plaintiff in the court below is the type contemplated by Order 22, of the High Court Civil Procedure Rules 1987. The provision in Order 22, rule 1 of the Civil Procedure rule provide for a quick and efficacious resolution and disposition of a sum of money that is certain and liquid where the defendant has no defence. In the instant appeal, the plaintiff’s claim in the court below includes a certain sum with interests. From the submission in the briefs of the appellant and the respondent and the judgment awarded by the court on the interest it is apparent that the interest payable on the debt is uncertain. The interest payable on the total sum which is liquidated is uncertain.In SBN. PLC v. Kyentu (1998) 2 NWLR (Pt. 536) 41 at 45 my learned brother Edozie JCA while in Jos Division of this court had occasion to describe the kind of claim maintainable under the undefended list, and I agree with the description which says:
“For a suit to be maintainable under the undefended list the suit must relate to a claim for a debt or liquidated money demand. Liquidated money demand includes a debt and means a specific amount which has accrued in favour of the plaintiff from the defendant.”
The opinion above is saying and I agree that the sum due and described as liquidated must have accrued and it must be certain.
The interest claimed by the respondent in the court below is for an uncertain sum and the interest at the rate to be paid by the appellant is yet to be determined by the trial court, even where as in this case the defendant has agreed that interest is recoverable. Consequently, the sum payable in the judgment of court is not wholly liquidated. The opinion open to the court below is either to determine the sum admitted by the appellant as the liquidated sum and direct the issue of interest to the general cause list for determination. Before a conclusion is arrived at on issue 2 of both parties it is relevant to consider issue 3 of both the appellant and the respondent when each asked:
“Whether the trial court did not properly consider the merits of the appellant notice of intention to defend, along with the argument on the preliminary objection over jurisdiction before coming to a decision and the appellant asked whether the trial court was right when it dismissed the appellants case having regard to the failure to call or order oral evidence to
resolve the glaring Conflict in the affidavit evidence before it.”
Whether or not the trial court was right when in the course of determination of a preliminary objection made by the appellant, he proceed to resolve the issue of the respondents liquidated demand. In determining this issue, I have considered the observation and directive given by the apex court in Nigerian Ports Authority v. Construczion G.F Cogefar Spa (1974) 12 SC 81 at 91. Where the court said that an appellate court should not interfere with the exercise of a discretion of lower court on the grounds that it may exercise it differently.
In the instant appeal, though the decision of the court below to hear the plaintiff respondents claim is a choice between whether or not to take the main claim in fact under the liquidated suit, and the interest in the general cause list, I am of the respectfully considered view that to take the claim in part as stated below or to take the decision to award the respondents claim with interest under the undefended list as done in the judgment of the court below does not comply with the provisions of Order 22 rule 1 of the civil procedure rules because when the sum in interest is to be considered with the liquidated sum the claim of the plaintiff ceases to be a sum certain.
It ceases to be a liquidated demand, and it must be a matter to be resolved under the general cause list. Therefore, it is because I am of the view that the exercise of discretion of the court will occasion a miscarriage of justice that I rule other than as determined in the judgment of the court below that the plaintiff respondents claim should have been sent to the general cause list for determination. I hold this view because the affidavit filed by both the appellant and respondent raised conflicting issues which are best resolved by oral evidence, see Akinduro v. Iwakun (1994) 3 NWLR (Pt. 330) 106; Falobi v. Falobi (1976) 9-10 SC.
Secondly, and in particular, the whole sum claimed with interest thereon cannot be said to be a liquidated demand. Thirdly, the resolution of the preliminary objection on the jurisdiction of the court by the defendant conflicted a hearing. The court below should have ruled separately on that issue, and that decision should not have resulted in the court appropriating to itself a hearing under the undefended suit, that is to say, even when the court ruled that it has jurisdiction to determine the plaintiff/respondents claim the decision to send the claim to a general cause list is separate from the decision that the court below has jurisdiction, which I agree that it has. In sum, I am also of the view like my learned brother M. Mohammed JCA that the court below has jurisdiction and that the appeal succeeds in part for a different reason. I am of the view that the entire trial upon an application for hearing on the undefended list, should be sent to the general cause list for determination.
The appeal succeeds in part, and entire claim is my judgment to be sent to the general cause list for hearing and determination. I am also of the view that no costs should be awarded.
Appeal allowed in part.
M. J. Zubairu Esq., (with himD. Samaila Esq.) For Appellant
E. C. Eneme Esq., (with him C.D. Dennagha Esq.) For Respondent