IN THE COURT OF APPEAL OF NIGERIA
On Thursday, The 23rd day of January, 2014
CHANCHANGI AIRLINES (NIGERIA) LIMITED ................. Appellant
AFRICAN PETROLEUM PLC .............. Respondent
A.B. Sheriff Esq., (Al-Amen Abubakar holding his brief) for Appellant
Festus Okoye Esq., (Lydia Izan holding his brief) for Respondent
ITA GEORGE MBABA, J.C.A. (Delivering the Leading Judgment):
This is an appeal against the Ruling of Kaduna State High Court in suit No. KDH/KAD/573/2011, delivered by M.T.M. Aliyu J, on 11/7/2011, entering Summary judgment in the suit for the plaintiff.
By a writ of summons, filed on 23/5/2011, the plaintiff (now Respondent) had claimed against the Defendant (now Appellant) as follows:
(1) "... The sum of N110,884,713.68 (One Hundred and ten Million, Eight Hundred and Eighty Four Thousand, Seven Hundred and Thirteen Naira, Sixty Eight Kobo) being outstanding debt for JET-A1 (aviation fuel) supplied to it and which the defendant has refused to pay despite repeated demands.
(2) Interest in the sum of (sic) 21% from the date of judgment until the debt is liquidated
(3) The cost of the suit."
(See page 2 of the Records of Appeal)
The Respondent also filed a statement of claim and witness depositions and address and pleaded the same reliefs. He filed a motion on notice on the same date 23/5/2011 seeking summary judgment as per the writ of summons, under or 11 Rule 1 of the High Court (Civil Procedure) Rules of Kaduna State. Appellant filed a statement of defence dated 27/6/2011 and witness' depositions, together with written submission. The motion was argued on 4/7/2011, and on 11/7/2011, the learned trial Court entered judgment for the Respondent; as follows:
"... it is my humble opinion that the Defendant has no defence to the action to warrant the suit being transferred to the general cause list. I believe the plaintiff is entitled to the judgment in the sum of N110,884,713.68 (one hundred and ten million, eight hundred and eighty four thousand, seven hundred and thirteen naira, sixty eight kobo) ...On the claim of 21% pre-judgment interest the plaintiff has not produced evidence to justify it. I however grant the plaintiff post judgment interest on the judgment debt at 10% per annum from today the 11th of July, 2011 till the judgment debt is liquidated ....The Defendant shall pay the plaintiff N253,350.00 the cost of this suit." (See page 65 - 66 of the Records).
Appellant filed Notice of Appeal against that decision as per the Notice and grounds of appeal on pages 67 - 69 of Record, dated 22/8/2011, raising 2 grounds of appeal, as follows:
"(1) The learned trial judge erred in law when he entered summary judgment in the suit.
Particulars of Error
(i) The statement of defence in denying that parties are registered companies has raised a triable issue or good defence.
(ii) Registration of a Company is an issue that cannot be presumed.
(iii) Registration of a Company is proved by evidence producing the certificate of incorporation.
(2) The learned trial judge erred in law when he considered whether the defence that none of the parties is a registered company was established.
Particulars of Error:
(i) It is not necessary at the stage of application for summary judgment to consider whether the defence has been established.
(ii) The Court considered and rejected the defence that the plaintiff is not a registered Company when it relied on a reported case involving the plaintiff to hold in effect that it is a registered company.
(iii) The Court considered and rejected the defence that the Defendant is not a registered Company."
Appellant filed its Brief of argument on 30/1/2013 with the leave of Court and distilled two issues for determination, namely:
(1) Whether the statement of defence disclosed a triable issue or good defence to the action
(2) Whether the trial Court was right to have analyzed, considered and controverted the defence."
The Respondent filed its Brief on 4/2/2013 and in it raised a preliminary objection to the appeal on the grounds that grounds 1 and 2 of the appeal did not derive inspiration from the ruling of the trial Court and that Appellant did not frame any issue for determination from the grounds 1 and 2 of the appeal, as the issues distilled and argued by the Appellant have no relationship with the grounds 1 and 2 on the Notice of Appeal dated 22/8/2011.
The Respondent did not however, file any notice of preliminary objection as required by Order 10 Rule 1 of the Court of Appeal Rules 2011, to activate the said preliminary objection. It simply raised the objection, just like that, and argued same on 22/11/2013, when the appeal was heard, as part of the Respondents Brief, on page 7 to 11 of the Brief!
We have stated, repeatedly, that that is not how to raise preliminary objection. The law clearly specifies the procedure for raising a preliminary objection, requiring the notice of same to be served on the opponent, at least 3 clear days to the hearing of the appeal, and the same to be formally filed in the Court. See order 10 Rules 1 and 3 of the court of Appeal Rules 2011 and the case of AYOADE VS. SPRING BANK PLC (2013) LPELR 20763; GARBA VS. UMMUANI (2013) 12 WRN 76; MOYOSORE VS. GOV. KWARA STATE (2012) NWLR (Pt.1293) 242. See also the unreported decision of this Court in GUARRANTY TRUST BANK PLC VS. FADCO INDUSTRIAL LTD & ANOR: CA/K/333/2007, delivered on 10/5/2013, where we held, relying on AYOADE VS. SPRING BANK PLC (supra) that:
"... The Respondents were in grave error to have thought that arguing the preliminary objection in the Respondent's brief, without first of all, filing the Notice of preliminary objection as required by law (Order 10 Rule 1 of the Court of Appeal Rules 2011) was okay ..."
The Respondent's alleged preliminary objection was therefore not properly raised and is incompetent.
The Respondent had also distilled one issue for the determination of the appeal, namely:
"Whether the Kaduna State High Court was right in entering summary judgment in favour of the Respondent based on the clear admissions of indebtedness by the Appellant and the state of the materials placed before it
Arguing the Appeal, learned Counsel for the Appellant, A.B. Sheriff Esq., submitted that Appellant filed a statement of defence as stipulated by Order 11 of the High Court Rules on which the application was brought; that by virtue of Order 11 Rules 5 of the High Court (Civil Procedure) Rule, the Lower Court was obligated to look at the state of defence to ascertain if it disclosed a good defence; that a good defence, as used in the rules, means a triable issue; that where a good defence was disclosed a summary judgment would not be entered, as the defendant should not be shut out from defending the action. He relied on NISHIZAWA VS. S.M. JETHWANI LTD. (1984) 12 SC 234; MACAULAY VS. NAL MERCHANT BANK LTD. (1990) 4 NWLR (Pt. 144) 283 at 324 - 325.
Counsel submitted that the statement of defence had raised that it had denied the Respondent's claim that it is a "public liability company" as well as the claim that it (Appellant) is a limited liability company; that such raised a triable issue, as it argued that the transaction between them was illegal and unenforceable, for the reason that they were not public liability company and limited liability company, respectively!
Counsel argued that the registration or legal capacity of a company cannot be presumed; that if any of the parties was not registered as a company, the suit became incompetent as the law is settled that non-juristic person cannot sue or be sued. He relied on OKECHUKWU & SONS VS. NDAH (1967) NMLR 368; FAWEHINMMI VS. NBA (No. 2) (1989) 2 NWLR (Pt.105) 558; CARLEN NIG. LTD. VS. UNIVERSITY OF JOS (1994) 1 NWLR (Pt.323) 631.
Counsel said that it was wrong for the trial Court to proceed to entering judgment for the respondent, without resolving the issue of status of the parties to enter into the contract, first, by hearing the case on the general cause list by which time evidence would be led for the production of the certificate of incorporation of the parties to resolve the issue of their status; that issue of legal capacity of the parties is a triable issue and a good defence to an action.
On issue 2, whether the Court was right to have analyzed, considered and controverted the defence, Counsel submitted that the issue raised in the statement of defence was to be examined forensically, at the trial and so the trial Court was wrong to have gone to analyze, consider and controvert the defence as it did; that it is immaterial at the stage of summary judgment application to inquire whether or not the defence will succeed. He relied on ADEBISI MCGREGOR ASSOCIATES LTD VS. NMB LTD. (1996) 2 SCNJ 72; MACAULAY VS. NAL MERCHANT BANK LTD. (supra).
Counsel argued that by relying on the letter heads of the parties to determine their status, the trial Court had disregarded the caution caveat in the decision of the Supreme Court in case of A.C.B. PLC. VS. EMOSTRADE LTD. (2002) 4 SC (Pt.2) 1 at 11, where Kalgo JSC said:
"It is not enough to assume that because a company uses the name "Limited" on the writ of summons as plaintiff, that company must be a limited liability company entitled to sue. The company status must be proved especially in this case where it was denied to be a limited liability company at the time of the transaction. This was not proved in this case and cannot be presumed either."
Counsel further submitted that the trial Court was wrong to say:
"Quite apart from this, it is my view that the plaintiff, as an incorporated company cannot be in dispute, and there are plethora of authorities in which the plaintiff sued or was sued in its name African Petroleum Plc. One such authorities is B.I. AIKABELI VS. AFRICAN PETROLEUM PLC. (2001) 6 NWLR (Pt. 708) 93."
That the reasoning of the Lower Court Counsel said was wrong and contrary to decisions of superior Courts on the matter; that the legal personality of a company can only be proved by production of the certificate of incorporation, not by resort of the trial Court to the parties letter heads, or the Court relying on its memory or on the fact that the parties or one of them had sued or been sued in the past as a limited liability company, successfully; that such is not a matter for the Court to take judicial notice of.
Counsel urged us to resolve the issues in Appellant's favour and allow the appeal.
In his response Festus Okoye Esq., for the Respondent, submitted on Respondent's lone issue, that the trial Court was absolutely right in entering judgment for the Respondent, based on the materials placed before it and the state of the law; that Order 11 Rule 1 of the High Court (CP) Rules, providing for summary judgment, must be read in conjunction with Order 3 of the Kaduna State High Court (CP) Rules 2007. He placed reliance on the said provisions and emphasized on Order 11 Rules 5(1) and (2).
He submitted that, by the tenor of Order 3 and Order 11 Rule 4 of the High Court (Civil Procedure) Rules, in determining whether to allow the defendant to defend the suit, the trial Court must consider the statement of claim filed, the witnesses depositions, the list of exhibits to be used and the written address filed by the plaintiff, as well as the application for summary judgment and the accompanying affidavit, that the Court must do the same to the processes filed by the defence; he argued that in this case Appellant never denied the indebtedness to the Respondent, that it rather pleaded by several documents for time to pay the debt. (See pages 38 to 48 of the Records).
Counsel submitted that in considering whether defendant should be allowed to defend, the Court has a duty to consider all the documents filed by the parties and after analyzing and considering all the material before it, the Court then decides to allow the defendant to defend, if it appears to it that the defendant has a good defence to the claim, and if not, the Court has to enter judgment for the plaintiff. Counsel relied on Order 11 Rule 5, and on the case of TAHIR VS. BANK OF THE NORTH (2007) ALL FWLR (Pt. 388) 1072 on the proof of a "good defence of a fact, which if proved, would exonerate the defendant from the plaintiffs claim."
Counsel submitted that Appellant was only interested in delaying the case, from the onset; that he did not file any counter affidavit and so did not controvert any of the averments in the Respondents affidavit in support of the motion for summary judgment. He relied on the case of UNIVERSITY OF BENIN VS. K.T. ORG. LTD. (2007) 14 NWLR (Pt. 1055) 441 at 464.
Counsel submitted that the trial judge was right in entering judgment for the Respondent; that Appellant had no defence to the claim of Respondent. He relied on the case of UNIVERSITY OF BENIN BS. K.T. ORG. LTD. (supra) on the essence of the provision of summary judgment in the Rules of Court.
He urged us to resolve the issue against the Appellant and dismiss the appeal.
RESOLUTION OF ISSUES:
Order 11 Rules 1-5 of the High Court (Civil Procedure) Rules of Kaduna State makes provisions for application for summary judgment as follows:
Rule (1): "Where a plaintiff believes that there is no defence to the claim, the plaintiff shall file with the originating process, the statement of claim, the exhibits, the depositions of the plaintiff's witnesses and an application for summary judgment which application shall be supported by an affidavit stating the grounds for the plaintiff's belief and a written address in respect thereof."
By Rule (4) thereof:
"where any defendant served with the processes and any document referred to in Rule 1 of this Order intends to defend the suit, such defendant shall, not later than the time prescribed by these Rules for filing a defence, file:
(a) A statement of defence;
(b) Deposition of witnesses;
(c) The exhibits to be used in the defence; and
(d) A written address in reply to the application for summary judgment."
Rule 5 (1) and (2) of the Order stipulate what the trial Court shall do, to determine whether or not to enter the summary judgment:
"5(1) where it appears to the judge that a defendant has a good defence and ought to be permitted to defend the claim, the judge may grant the defendant leave to defend the claim.
5(2) where any defendant fails or neglects to comply with the provisions of Rule 4 of this Order, or it appears to the judge that the defendant has no good defence to the claim, the judge may enter judgment for the plaintiff."
In the case of UNIVERSITY OF BENIN VS. T.K. ORG. LTD. (2007) 14 NWLR (Pt.1055) 441, where a similar provision in the High Court (Civil Procedure) Rules of Lagos State was considered and rationalized, this Court held at pages 461 - 462 that:
"... The whole purpose of the summary judgment procedure is to ensure justice to a plaintiff and minimize delay where there is obviously no defence to his claim and thus prevent the grave injustice that might occur through a protracted and ultimately frivolous litigation. In other words, the summary judgment rules are specially made to help the court achieve their preliminary objective, i.e. to do justice to the parties by hearing their cases on the merit with utmost dispatch and prevent the frequent outcry that justice delayed is justice denied."
At page 476 of the said judgment (above) this court said:
"The purpose of summary judgment under Order 11 is to prevent sham defence from defeating the right of parties by delay thus causing great loss to the plaintiff. A sham defence is an unreal, fake, deceitful defence. No amount of sophistry or technical pyrotechnic can launder a sham defence into a real defence to a plaintiff's pleaded facts and verifying evidence".
The intention and objective of Order 11 of the High Court (Civil Procedure) Rules is similar to the provisions under what is popularly known as Undefended List procedure, and the same Rules of Court provides for the hearing and determination of cases of debt or liquidated money demands, summarily, where no defence on the merit is disclosed by the defendant. The aim of this special provision remains to speed up the trial:
"... being a special class and intended to give summary judgment to a creditor in obvious claims of indebtedness or outstanding monetary claims, which are indefenceable,.. thus avoiding the normal process of hearing, which would require filing of pleadings and calling of witnesses to prove the claim, with all the time and energy input, struggle, contention and legal fireworks by the parties and counsel at the hearing..."
See ILORIN EAST LOCAL GOVT. VS. ALASINRIN (2012) ALL FWLR [Pt.645] 226 held 1.
The law allows the trial court unfettered discretion, in a case placed on the undefended list or brought for summary judgment, under Order 11 of the High Court Civil Rules, to determine whether or not the defendant has disclosed a tangible defence, or the merit, or, in the parlance of Order 11 Rules 5, whether the defendant has a good defence and ought to be permitted to defend the action. See the case of UNIVERSITY OF BENIN VS. K.T. ORG. LTD. (supra).
"It is always the discretion of the trial Court to decide for itself whether a triable issue has been disclosed or not in an affidavit of intention to defend a suit and not of any other court, but that discretion must be carefully exercised based on the contents of the affidavit. The procedure is, by its nature, designed to obtain a summary judgment without the necessity of going to full trial."
See also ILORIN EAST LOCAL GOVT. VS. OLASINRIN (supra) at 244, where we held:
"The discretion to place a suit on the undefended list resides with the trial judge, once he is satisfied, based on the depositions of the plaintiff that there are good grounds to believe that the defendant has good defence to the action. Even when the defendant files a notice of intention to defend and an affidavit thereto, disclosing what he thinks are good grounds to defend the action, the discretion still remains with the trial court to satisfy itself that the affidavit ....discloses a defence on the merit..." See also ATGUBA & CO. VS. GURA NIG. LTD.  ALL FWLR [Pt. 256] 1219; NISHIZAWA Ltd. Vs. JETHWANI  12 SC 23; FMG Vs. SANI  4 NWLR [Pt. 147] 688; AUSTIN NWANG ESQ. VS. UBN PLC  LPELR -  LPELR -21823 [CA].
In the case of S.P.D. NIG. LTD. VS. ARHO-JOE NIG LTD. (2006) 3 NWLR (Pt. 966) 172, the Court of Appeal gives some guide as to what constitutes triable issue in a summary judgment application as follows:
"A "triable issue" or a "defence on the merit" under the undefended list procedure is where a defendant's affidavit in support of the notice of intention to defend is such that requires the plaintiff to explain certain matters with regard to his claim, or throws some doubt on the plaintiff's claim."
In this case [at hand] Appellant did not even file any counter -affidavit to contest the averments of the Respondent in support of the application for summary judgment. He merely filed statement of defence, depositions of its witnesses, exhibits and written address, pursuant to Order 11, Rule 4 of the Rules of Court, which the trial Court looked at and considered in arriving at the summary judgment. That means, as far as the motion for summary judgment was concerned, which was founded on the supporting affidavit, Appellant did not contest the application, as he deposed to no affidavit to deny, controvert or debunk the claims of the Respondent. In the case of UNIVERSITY OF BENIN VS. K.T. ORG. LTD. (supra) at 464, this court held;
"... the failure of the defendant to file an affidavit disclosing a good defence would automatically place his case in an intolerably weak position to satisfy the Court that it has a good defence. Hence filing only a statement of defence may not be a conclusive way of showing cause under the special provision and procedure. In the instant case, the appellant, having been served with a specially endorsed writ of summons accompanied by a statement of claim, it was expected of it to show it had a good defence to the Respondents' claim, by disclosing sufficient facts thus entitling it to defend the action. Such disclosure must be shown in the Counter affidavit. Failure of the appellants to upgrade its statement of defence, filing a counter affidavit disclosing good defence has placed its case in a weak position."
Of course, the reason for filing counter affidavit, in the circumstances, should have been obvious to the Appellant, as the same was required to convert the facts disclosed in the statement of defence into evidence, for the purpose of the application for summary judgment.
I think the trial court had even unduly indulged the Appellant, when, despite the failure to file a Counter-Affidavit, that Court still looked at the processes filed by the Appellant Statement of defence witnesses depositions, exhibits and address of counsel, and came to the conclusion that Appellant did not disclose any good defence. Appellant had argued that Order 11 Rule 4 did not make provision for Counter affidavit. What a sad submission! How else did the learned Counsel for the Appellant expect to present the case of the Appellant against the application for summary judgment to the Court?
It has become the norm that in a suit fought on affidavit evidence, the filing of Counter-affidavit, where a respondent contests the claim of an applicant, in any application before the Court backed by a supporting affidavit, is not negotiable.
The main triable issue on which Appellant predicated its much touted right to defend the suit at the Lower Court is found in Paragraph 4.6 and 4.7 of the Appellant's Brief - page 5:
4.6 "The case of the Plaintiff as set out in the statement of claim and witness deposition is that it is a "Public liability company". That the Defendant is indebted to it in the sum of N110,884,713.68. That the Defendant is a limited liability company.
4.7 The Defendant in the statement of defence denied that the plaintiff is a Public Limited Company and also denied that the Defendant is a limited liability company. The defendant also stated that the transaction between the parties is illegal and unenforceable. See paragraphs 2, 3, 4 and 5 of the statement of defence (pages 50-51 of the Record)."
Counsel for the Appellant argued that the court should have sent the case back to the general cause list for evidence to be called for parties to produce their certificates of registration and tender the same to prove their registration or incorporation, to qualify the Respondent to claim its money for the product supplied to the Defendant!
That appears to be a new dimension or dangerous depth to which a desperate, dishonest debtor would descend in the futile attempt to escape responsibility of paying its debt- declaring its creditor (and itself) illegal organizations or non-existence!
It portrays lack of ingenuity and unreasonableness, in my view, for a Counsel to adopt this line of defence, and mislead a party to think that by burying its head in the sand like the Ostrich, it is no longer seen! Appellant's Counsel should have concerned himself with the substance of the claim of the Respondent.
The issue before the court was payment of debt N110,884,713.68, being the cost of goods supplied to the Appellant by the Respondent, and which the Appellant never denied, and had acknowledged severally on it corporate fetter heads. See its letters on pages 18, 21, 22 - 23, 39, 42, 43 - 44 of the Records where Appellant kept apologizing for the debt and was making plans to pay!
The sudden turn of attitude by the Appellant, on being served with the process of court to enforce payment for the supply contract, is baffling and fraudulent, just as it is ridiculous.
In all the letter heads, referred in the Records of Appeal the Appellant wrote its name as CHANCHANGI AIRLINES (NIG) LTD., and that is the name it is sued in this case. That is also the name which Learned Counsel for the Appellant, C.I.C. CHIKWENDU Esq., who entered appearance for the Appellant at the Lower Court, accepted as the appropriate name of the Appellant. (See page 49 of the Records). That too is the name which the witness of the Appellant, MUSTAPHA MOHAMMED SAMBO, admitted as the defendant (now Appellant) and deposed:
1. "That I am a manager in the employ of Defendant."
He then said:
3. "That the Defendant is not a limited liability company as claimed or at all.
4. That the defendant went into the transaction with the plaintiff upon its misrepresentation that it was a public limited company and licensed to deal in petroleum product.
5. that the plaintiff in deed is not a public limited liability company and has no licence to deal in petroleum product.
6. That the transaction between the parties is illegal and unenforceable.
7. That this suit is vexatious and intended only to embarrass and ought to be dismissed"
What happened to the product with which the Appellant admitted it transacted with the Respondent, amounting to N110, 884,713.68, which resulted in the debt? Did that also become illegal and/or the money?
The learned trial Court had considered the sham statement of defence and the fraudulent bent of the Appellant, when it said:
"I think it was wrong for the defendant at this stage, after it had received benefit of supplied aviation fuel from the plaintiff worth N110 million to turn around at this hour to claim that it (the defendant) is not a juristic person and also that the plaintiff is also not a juristic person and has no licence to deal in petroleum product.
The law, for a very long time, has been settled that no person shall, after reaping benefit from a transaction of which he is a party be heard to say such a transaction is illegal or void or voidable' when it comes to him to fulfill his obligation under the transaction, so far the other party has done all he pledged to do under it." See FACEL SERVICES LTD. NPA  ALL FWLR [Pt.199] 1400 at 1423.
I cannot agree less with the learned trial court and I think that finding and ruling is infallible in the face of the fraudulent claims of the Appellant.
If it is true that Appellant is not a limited liability company, (which it claimed to be at the time of taking delivery of aviation oil from the Respondent and as stated in the letters it signed with the Respondent), it is free to report itself to the Corporate Affairs Commission and to the Police for prosecution! But it has a duty to settle the debt it owes, first, in the name it is known and with which it presented itself to the Respondent to incur the debt of N110,884,713.68!
I cannot fault the decision of the learned trial court in this appeal and so I resolve the issues against the Appellant.
I think Counsel for the Appellant at the Lower Court and on appeal, should bear responsibility for this charade and clear attempt by the appellant to seek the cover of illegality of contract to defraud the respondent, or to frustrate the recovery of the money, outstanding on the aviation fuel supplied to the Appellant. No Counsel should aid or assist a client to pursue ignoble or fraudulent cause.
This appeal is, completely, devoid of merit and is hereby dismissed. Appellant shall pay the cost of the appeal, assessed at N100,000.00, to the Respondent.
DALHATU ADAMU, J.C.A.:
I have gone through the advanced copy of the judgment of my learned brother Mbaba JCA and I agree with his reasons and the conclusion he arrived at that a counsel should not aid or pursue an ignoble or fraudulent cause and the appeal is devoid of any merit. It is also hereby dismissed by me. I abide by the order on costs made in the lead judgment.
ABDU ABOKI, J.C.A.:
I have read in advance the judgment just delivered by my learned brother, ITA GEORGE MBABA JCA. I agree with the conclusion reached therein that the appeal is devoid of merit. I accordingly dismiss same and also abide by the consequential order as to costs.