African Continental Bank Ltd. & Anor. v. Ifeanyi Ajugwo (2011) – CA


African Continental Bank Ltd. & Anor. v. Ifeanyi Ajugwo (2011) – CA

by “PipAr” B.C. Chima

Court of Appeal – CA/E/66/2006

Tuesday, the 5th day of July, 2011

New contract varying mortgage transaction.

It is a trite procedural tenet that the evaluation of evidence and ascription of probative value to such evidence are the exclusive preserve of the trial court which had the opportunity of hearing and assessing the testimony and conduct of the witnesses. It is unusual for an appellate court to disturb such findings of a trial court except where it is found to be perverse irrational or does not accord with common sense. See DARE VS FAGBAMILA (2009) 14 NWLR (PT 1160) 177; SULE VS HABU (2011) 7 NWLR (PT 1246) 339 and KARIBO VS GREND (1992) 3 NWLR (PT 230) 426. — S.C. Oseji, JCA.

It seems to me of necessity to stress the obvious that although courts are expected to deliver their decision within 90 days after final addresses, where the stipulated time is however not complied with either due to force majeure, inadvertence or neglect, such decision will not be rendered a nullity, unless and until the appellate court seized of the complaint or appeal is satisfied that such late delivery of judgment has occasioned miscarriage of justice. This to my mind is the true import of the provisions of Section 294(1) and (5) of the 1999 constitution aforementioned. See also the decisions in ATUNGWU VS OCHEKWU (2004) 17 NWLR (PT 901) 18; IGWE VS KALU (2002) 5 NWLR (PT 761) 678 and OLOKOTINTIN VS SARUMT (1997) 1 NWLR (PT 480) 222 AT 232. — S.C. Oseji, JCA.

Available:  Alexander Madiebo & Ors v. Godwin Nwachukwu Nwankwo (2001)

The intent and purpose of Section 34 of the Evidence Act is clear. Simply put, it pertains to the admissibility in the present proceeding, of evidence given by a witness in a previous proceeding. Such previous evidence though hearsay, is admissible in the present proceeding under Section 34, which provide an exception to hearsay rule once the requisite conditions are fulfilled. See IKENYE VS OFUNE (1985) 2 NWLR (PT 5) 1. For the purpose of clarity, I herein below reproduce the provisions of Section 34 (1) of the Evidence Act:- 34(1) “Evidence given by a witness in a judicial proceeding, or before any person authorized by law to take it, is relevant for the purpose of proving, in a subsequent judicial proceeding, or in a later stage of the same judicial proceeding, the truth of the facts which it states, when the witness is dead or cannot be found, or is incapable of giving evidence or is kept out of the way by the adverse Party, or when his presence cannot be obtained without an amount of delay or expense which, in the circumstances of the case, the court considers unreasonable: Provided:- (a) that the proceeding was between the same parties or their representatives in interest; (b) that the adverse party in the first proceeding had the right and opportunity to cross examine; and (c) that the questions in issue were substantially the same in the first as in the second proceeding.” I do not need to say much again. The above provision is very clear and succinct to the effect that it relates to the admissibility of evidence given in a previous judicial proceeding in a subsequent judicial proceeding or in a later stage of the same proceeding. — S.C. Oseji, JCA.

Available:  Access Bank Plc V. Edo State Board of Internal Revenue (2018) - CA/B/333/2015

It is trite that the award of costs is always at the discretion of the court but such discretion must be exercised judiciously and judicially.  It is also a well settled principle that costs follow event and a successful party is entitled to costs except where there are special reasons for depriving him of such entitlement and these ought to be shown by the judge. See OBAYAGBONA VS OBAZEE (1972) 5 SC 247. AMIRA NIG) LTD VS MAL (NIG) LTD. (2001) 17 NWLR (PT 742) 269 and DONATUS IDAM VS ALEX IDEMYOR MENE (2009) 17 NWLR (PT 1169) 74 … It is worthy of note that costs are not imposed as a punishment on the party who pays them, neither are they awarded as a bonus to the benefiting party. The party entitled should only be indemnified for his out of pocket expenses and be compensated for the true and fair expenses for the litigation. See BUHARI VS OBASANJO (2005) All FWLR (PT 258) 1604; KUKOYI VS ODUFALE (1965) 1 All NLR 300 and OLASOPE VS NATIONAL BANK OF NIGERIA (1985) 3 NWLR (PT 11) 147. — S.C. Oseji, JCA.

Available:  Esther Mueller v. Werner Mueller (2005)

The award of costs involves a judicial discretion which must be exercised judicially and judiciously on fixed principles that is according to rules of reason and justice not according to private opinion. See Wurno v. VAC Ltd. (1956) I FSC 33 at 34. The exercise of such discretion must similarly not be affected by question of benevolence or sympathy. The award of costs is not meant to be a bonus to the successful party and should not be awarded on sentiment. See Universal Bank of Nigeria Ltd. v. Nwaokolo (1995) 11 Kings Law report (KLR) 919. Rewani v. Festus Okotie-Eboh (1960) 5 FSC 200 at 207. It follows therefore that the discretion of the court in awarding costs must be judicially and judiciously. It is an acceptable practice in law for appellate court not to interfere with the exercise of discretion by lower courts. In this regard appellate courts seldom interfere with the exercise of discretion in awards of costs except where such discretion is not exercised judicially and judiciously. See Nwaubani v. Golden Guinea Breweries Plc. (1995) 6 NWLR (Pt 400) page 191. A trial judge has discretion whether to award costs or not and also as regards the person by whom the costs are to be paid. — Abdu Aboki JCA.

Generally there is no right of appeal against an award of costs except with leave of the High Court or of this court by virtue of section 241(2)(c) of the 1999 constitution. The exception to this provision of the constitution is where in addition to appeal as to costs, there is appeal on other issues or issue. See Anyaso v. Anyaso (1998) 9 NWLR (Pt 564) page 157. Ayanboye v. Balogun (1990) 5 NWLR (Pt 151) page 410. — Abdu Aboki JCA.

Samuel Chukwudumebi Oseji, J.C.A.

Chief L. C. B. Ezebilo (SAN).

F. A. Ogbuli (Mrs).

The plaintiff Ifeanyi Ajugwo, in the lower court in Suit NO. O/118/90 was substituted for his deceased father, Jerome B.C. Ajugwo. He is now the 1st Respondent in this appeal. His father Jerome Ajugwo was a current account customer with the 1st defendant (now the appellant) in her Onitsha branch. One S.B.C. Maduakolam, carrying on business under the name and style of Maduakolam and company was a friend of Respondent’s father. He also had a current account with the appellant. He borrowed money from the appellant and the Respondent’s father guaranteed the loan/overdraft and in the process mortgaged his landed property at Plot 8, Block 34 Nupe Settlement, otherwise known as N0. 2 Anambra Street Fegge, Onitsha and handed the documents of title, namely a Building lease and Assignment of lease to the Appellant and the transaction was evidenced by a Deed of legal Mortgage showing that the appellant will lend the sum of N15,000 to S.B.C. Maduakolam as the Borrower while the Respondent’s father was the mortgagor who guaranteed the loan. Subsequently S.B.C. Maduakolam moved to Owerri and opened another account with the appellant’s branch there. The appellant later merged his account in Onitsha with that in Owerri branch. The Respondents father then applied to the appellant for the Demerger of the accounts and stoppage of further interest accruing on the loan account to enable him pay off the loan he guaranteed and recover his title documents. His request was granted by the 1st appellant upon certain conditions which he readily agreed to in writing. While he was making payments as agreed, the 1st appellant instructed an auctioneer to sell the mortgaged property and this was eventually done in spite of his efforts to show that he did not default in repayment of the loan within the time frame given by the 1st appellant. Consequently, he instituted this suit.

Trial court gave judgement in Respondents’ favour, hence Appellants appeal now.


I. Whether it was right for the learned trial judge to hold in his judgment that under the law of novation or variation that Exhibit C. has varied or substituted exhibit J. the legal mortgage and subsequently rendered the provision of Exhibit J inoperative and inapplicable in this case?

A. “In this case, there is evidence that sometime after the conclusion of the loan transaction as evidenced in Exhibit J., the borrower (S.B.C. Maduakolam) moved to Owerri where he opened another account with the Owerri branch of the 1st Appellant Bank. The Onitsha and Owerri branch accounts of S.B.C. Maduakolam where subsequently merged by the appellant Bank, (note that the Onitsha branch account was the source of the loan facility granted to the borrower, S.B.C. Maduakolam). There was no information as to the later day relationship between the borrower and the mortgagor before and after the former’s movement to Owerri. But what is not in doubt according to evidence duly accepted by the learned trial judge, was that the mortgagor applied to the appellant bank to demerge the borrower’s Owerri and Onitsha accounts to enable him ascertain and repay the loan standing against the borrower’s account at Onitsha branch so that he the mortgagor can recover his mortgaged property. There was also a request for waiver of further interest on the outstanding loan. The mortgagor’s request was duly granted by the 1st appellant bank and this was evidenced in Exhibit C. written to the mortgagor by the said 1st appellant.”

B. “It follows no doubt that whatever was previously binding on the parties as contained in Exhibit J. in terms of method of repayments and nature of default was varied by the emergence of Exhibits C. to F. In this regard, the learned trial judge reasoned at page 106 of the record as follows:- “For novation to ensue there must be not only the substitution of some other obligation for the original one but also the intention of animus novandi. ASHIBUOGWU VS A.G. BENDEL STATE (1988) 1 NWLR (PT 69) 138 Ratio 4 and 5. UNION BEVERAGES LTD. VS OKOLABI (1988) 1 NWLR (PT 68) 128 ratio 6. The question to be asked is whether the first defendant can be allowed, both in law and equity, to renege on Exhibits C, D, E, and F. There was an offer and there was acceptance, followed with valuable consideration. They are bound by the terms of Exhibit C. which terms were fulfilled by the plaintiff’s father in Exhibits F. and G. Also there was uncontradicted evidence that between 30/3/89 and 28/12/89 the plaintiffs father made a total payment of N30,420 and on 1/3/90 paid N5,620.00 on Exhibit G. bringing the total payment to N36,049 and that was in full and final payment before the expiration of the 18 months given him in Exhibit C. Infact he paid an Excess of N6.82.” I agree with the learned trial judge that there has been a variation of the contract or what is termed ‘novation’ as earlier defined.”

C. “In the light of the content of Exhibit ‘H’ above, the learned trial judge at the same page 108 of the record found as follows:- ‘One is surprised that inspite of Exh. H, the 1st and 2nd defendants went ahead with the sale of the mortgaged property. I have held above that the promise or assurance in Exh. C. operates as estoppel in favour of the Plaintiff. The 1st and 2nd defendants must accept their legal relations with the plaintiff’s father as modified by them in Exh. C. which hereby substituted Exh. J. and rendered it’s provisions inoperative. That being the case, they cannot exercise their right as mortgagees under Exh. J. as such powers had been modified by Exh. C. they can only invoke such powers in case of breach by the plaintiff’s father of the terms of Exh. C.’”
II. Whether it was right for the trial court to declare null and void and of no effect the sale of the mortgage property by the defendant bank mortgagee in Suit No. O/118/90 when such declaration was not even sought for by the plaintiff in his relief either in his writ of summons or statement of claim?

A. “In the instant case reliefs as claimed by the Respondent in paragraph 24 of his further amended statement of claim dated 24/5/1996 and filed on 13/6/1996 read as follows:-
‘Whereof the plaintiff claims from the defendants jointly and severally as follows’ –
(a) A declaration that the plaintiff is entitled to the return of his father’s documents in respect of his landed property at No. 2 Anambra Street, Fegge, Onitsha which said documents as hereinabove mentioned are dated the 4th of May 1973 and the 27th of August, 1974.
(b) An order of court that the said documents be returned to the plaintiff forthwith.
(c) N500,000 (five hundred thousand naira) for breach of warranty and/or assurance for failure to return the said documents in respect of the said overdraft facilities heretofore mentioned which has been re-paid.’
The reliefs granted by the learned trial judge in his judgment as shown in page 110 of the record of appeal is herein below reproduced as follows:-
‘In the circumstances of the above reasons I hold that the plaintiff has proved his case on the preponderance of evidence and is entitled to judgment. Accordingly, I hereby enter judgment for the plaintiff against the 1st and 2nd defendants jointly and severally as follows:-
(a) Declaration that the plaintiff is entitled to the return of his father’s documents in respect of his landed property at No. 2 Anambra Street, Fegge, Onitsha, which documents are dated the 4th of May 1973 and the 27th of August, 1974.
(b) An order of this court that the said documents be returned to the plaintiff forthwith.
(c) N250,000 (Two hundred and fifty thousand naira) for failure to return the said documents in respect of the said overdraft facilities which had been repaid.’
I have carefully perused the above claim granted by the trial court vis-a’-vis the reliefs claimed by the Respondent and earlier reproduced and I did not see any difference in the two except for relief (c) where the learned trial judge granted N250,000 instead of the sum of N500,000 as claimed by the respondent. Care must be taken not to confuse the findings of a court with a final order granting a party’s claim.”
III. Whether it was right for the trial judge to have delivered his judgment in this case outside the statutory period of 90 days (three months) after the conclusion of evidence and final addresses of counsel in the case contrary to Section 294 (1) of the 1999 constitution of the Federal Republic of Nigeria?

A. “In the instance case, final addresses by counsel in the case was concluded on 6/2/2004 and judgment was eventually delivered on 3/6/2004. That is about 118 days thereafter, meaning that it exceeded the stipulated 90 days with about 28 days. That notwithstanding, for this court to declare the judgment a nullity on the ground of delay in the delivery of the judgment, the appellant must of necessity produce convincing and credible evidence that it suffered a miscarriage of justice as a result. I have had cause to revisit the judgment of the lower court for a thorough reappraisal but find it difficult or impossible to identify any aspect of the finding of the learned trial judge that might have been skewed, nor was there any misapplication of the evidence adduced by the parties as alleged by the appellants, rather I find that the evidence available for the consideration of the learned trial judge was predominantly documentary and this fact was alluded to by the learned senior counsel for the appellants at page 7 paragraph 4.5:3 of the appellant’s brief of argument. I therefore hold that no miscarriage of justice was shown to have been occasioned to the appellant by the delay to justify a declaration of the decision of the lower court a nullity.”
IV. Whether it was right for the learned trial judge to have awarded the cost of N25,000 (Twenty five thousand naira) against the 1st and 2nd Defendant/appellant in favour of the plaintiff?

A. “In the circumstance this court does not see any justification to interfere with the award of N25,000 cost in favour of the plaintiff by the learned trial judge. This is one exercise of discretionary power that should not be disturbed by an appellate court.”
“In the final analysis, I find that this appeal lacks merit and is hereby dismissed. The judgment of the lower court is hereby upheld. I award a cost of N20.000 in favour of the Respondent.”



DUMEZ (NIG) LTD VS NWAKAOBA & ORS. (2009) 12 S.C.M. (PT 2) 504 at 517 – 518 where the Supreme Court held that:- “It is both fundamental and elementary principle in the determination of actions before a court or tribunal, that the adjudicating body is bound to limit itself to the claims before it. A court may indeed make incidental orders which flow naturally from the relief claimed. However a court has no power and is not under any circumstances entitled to award a relief not claimed by the party in the writ of summons and the statement of claim.”

✓ Olasope v. National bank of Nigeria Ltd. & Anor (1985) 3 NWLR (pt 11) page 147 of 152. This court reduced the N200 costs awarded to the 1st Respondent to N100. Kutigi JCA (as he then was) said:- ‘I see no basis for awarding N200 costs to the 2nd Respondent who to all intent and purposes appears to be a busy-body as far as this suit is concerned. He voluntarily joined himself and had nothing to ask the Appellant even after testifying in court. And coupled with what his own counsel said in court below that his appearance should be discontinued. He is in my view entitled to no costs and I award none to him.’
✓ In Umarco Nigeria Ltd. v. Panelpina World transport Ltd. (1986) 1 CA (pt 2) page 324, this court set aside the N1,000 cost awarded in favour of the Respondent on the ground that this amount was not only excessive but also unreasonable having regard to the out-of-pocket expenses, the length of hearing and other relevant circumstances. See Oforn & Ors v. Odunsi (1960) NMLR 12. But in Daily Times Nigeria Ltd. v. Chief William (1986) NWLR Pt 36 page 526. The judge awarded the Respondent N1,000.00 exemplary damages and N1,000 costs. The Appellant appealed both on the exemplary damages and on the cost. On the issue of costs, it was contended that as the Respondent conducted the case himself and spent only N101.17k out-of-pocket expenses, N1,000 costs was excessive. The court held that award of N1,000 was not excessive even though the respondent out-of-pocket expenses are N101.17k . Ademola JCA (as he then was) said:- ‘On the issue of costs awarded I do not regard it as excessive because all factors must have been taken into consideration and the fact that the Respondent conducted the case himself should not necessarily be against him but could also be in favour of the Appellant in that if a counsel had been employed by the Respondent, the cost awarded could have reflected counsel cost in favour of the Respondent.’

Blacks Law Dictionary 6th Edition at page 1064 as:- “A type of substituted contract that has the effect of adding a party, either as obligor or obligee, who was not a party to the original duty. Substitution of a new contract, debt or obligation for an existing one, between the same on different parties.” “In the Civil Law, there are three kinds of novation: where the debtor and creditor remain the same, but a new debt takes the place of the old one; where the debt remains the same but a new debtor is substituted; where the debt and the debtor remain, but a new creditor is substituted.”

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