➥ CASE SUMMARY OF:
Alhaji (Dr.) Bawa Garba & Anor V. Sheba International (Nigeria) Ltd. (CA/K/93/2000, 27 June 2001)
by Branham Chima (LL.B.)
➥ SUBJECT MATTER(S)
Refund of money;
Join venture;
Promoter.
➥ CASE FACT/HISTORY
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’s 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 in spite 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.
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 ₦2,175,000.00 (Two Million, One Hundred and Seventy Five Thousand Naira) at the exchange rate of ₦145.00 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 ₦85.00 to a US dollar ₦2,186,625.00. (c) On £35,000.00 from 5/8/93-24/12/96 i.e £22,050.00. (d) On £25,000.00 from 24/12/96-0/5/97 i.e £2,187.00. (e) On £20,000.00 from 30/5/97-8/9/97 i.e £1,050.00. (ii) Subtotal £25.287.00 Or (at ₦145.00 to a pound sterling) ₦3,666,687.50. Total (i) and (ii) ₦5,853,312.50. (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.”
➥ ISSUE(S)
I. Whether having regard to the claims of the respondent, the lower court has jurisdiction to hear the case?
II. 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?
III. 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?
IV. Whether the lower court was right in awarding the respondent’s claim on interest?
➥ RESOLUTION(S) OF ISSUES
[APPEAL DISMISSED, IN PART]
↪️ ISSUE 1: IN RESPONDENT’S FAVOUR.
[THE SUIT HAS NOTHING TO DO WITH THE OPERATION OF COMPANY AND THUS THE STATE HIGH COURT HAS JURISDICTION
‘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 ₦2,175,000.00 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’s claim. Learned trial Judge was indeed right in holding that he had jurisdiction to hear and determine the respondent’s claim.’]
.
.
↪️ ISSUE 2: IN RESPONDENT’S FAVOUR.
[THE AMOUNT IS ASCERTAINED THUS LIQUIDATED
‘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’s 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.’]
.
.
↪️ ISSUE 3: IN RESPONDENT’S FAVOUR.
[THERE IS NO CONFLICT IN THE AFFIDAVIT; THE CONFLICT IS IRRELEVANT TO THE RESOLUTION OF THE ISSUE
‘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’s 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.’]
.
.
↪️ ISSUE 4: IN APPELLANT’S FAVOUR.
[THE LOWER COURT OUGHT NOT TO HAVE AWARDED THE INTEREST WITHOUT PROOF
‘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’s claim at the lower court filed in July, 98 to recover the same, the subject of or the basis of the respondent’s 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’s 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’s letter of demand for the refund of its investment and the appellants’ letter agreeing to the respondents withdrawal and the repayment of the sums demanded, as contained in the respondent’s affidavit in support of the claim. The only evidence contained in paragraphs 4(q) and (r) earlier quoted in this judgment of the respondent’s affidavit in support of the respondent’s 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’s 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.’]
.
.
.
✓ DECISION:
‘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’s 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’s claim in that respect. I am not making any order on costs.’
➥ FURTHER DICTA:
⦿ JURISDICTION IS THE LIFEWIRE OF ALL TRIALS
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. — Mohammed JCA.
⦿ OTHER DOCUMENTARY EVIDENCE MAY CLEAR AMBIGUITY OF AN AFFIDAVIT
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 and 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. — Mohammed JCA.
⦿ MONEY PLACED ON DEPOSIT FOR PURCHASE OF SHARES IS NOT YET AN INVESTMENT
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. — Mohammed JCA.
⦿ WHO IS A PROMOTER?
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. — Omage JCA.
➥ LEAD JUDGEMENT DELIVERED BY:
Mohammed, JCA.
➥ APPEARANCES
⦿ FOR THE APPELLANT(S)
⦿ FOR THE RESPONDENT(S)
➥ MISCELLANEOUS POINTS
➥ REFERENCED (LEGISLATION)
➥ REFERENCED (CASE)
➥ REFERENCED (OTHERS)
