➥ CASE SUMMARY OF:
Saeby Jernstoberi Maskinfabric A/S v. Olaogun Enterprises Ltd. (1999) – SC
by “PipAr” Branham-Paul C. Chima, SAL.
Supreme Court – SC.261/1993
➥ JUDGEMENT DELIVERED ON:
Friday, December 3, 1999
➥ AREA(S) OF LAW
Bills of exchange.
➥ PRINCIPLES OF LAW
⦿ CLAIM FOR INTEREST MUST BE SPECIFICALLY PLEADED
Also, the law is now clear that a claim for interest must be specifically pleaded. Some of the pleading requirements may be summarized as follows: If the claim for interest is under a contract, express or implied or under mercantile usage, the relevant contractual term or any other relevant facts and matters relied upon for the entitlement must be specifically pleaded. If the plaintiff claims interest under the equitable jurisdiction of the court, he must plead all the relevant facts and matters relied upon to support such claim (See Bullen and Leake and Jacobs, (13th Ed.) pp. 567 – 8). It is evident that the appellant had completely ignored these requirements. — Ayoola, JSC.
⦿ NIGERIAN JUDGEMENTS CAN BE ENTERED IN FOREIGN CURRENCY
If there was any doubt that judgment can now be entered in foreign currency as the Court of Appeal had done, the opinion of Ogundare, JSC in Koya v. United Bank for Africa Ltd. (1997) 1 NWLR (Pt. 481) 251, 269 – 289 should, in my opinion, lay such doubt to rest. After a review of several local and English authorities he said at p. 289: “It is my respectful view that courts in this country can claim jurisdiction to entertain and determine cases where sums in foreign currencies are claimed. The old rule in England, as well as in Nigeria, is judge-made and in the light of present day circumstances of extensive international commercial relationships, that rule should give way to a new rule as now in England more so that the difficulties hitherto experienced in enforcing such judgments no longer apply.” — Ayoola, JSC.
⦿ PAYMENT OF JUDGEMENT ENTERED IN FOREIGN CURRENCY
The present practice is that where an award is made in foreign currency, the judgment will be for the payment of the amount in foreign currency or its naira equivalent converted for the purposes of the enforcement of the judgment at the time of the payment. — Ayoola, JSC.
⦿ FOREIGN COMPANY NOT INCORPORATED IN NIGERIA CAN SUE IN NIGERIA
On this appeal, it was argued by counsel on behalf of the respondent that even though it may be a legal entity in its country of incorporation, it had no artificial personality in Nigeria since the Companies Act is silent on whether a company such as the appellant would be allowed to sue or not. That submission is misconceived. The principle of law that a foreign corporation, duly created according to the laws of a foreign state recognized by Nigeria, may sue or be sued in its corporate name in our courts is part of the common law. The suggestion that a foreign company duly incorporated outside Nigeria should first be registered in Nigeria under the provisions of the Companies Act, 1968 (which was then the applicable statute) dealing with registration of foreign companies, notwithstanding that it does not fall into the category of foreign company” as defined by that Act, is too preposterous and patently inimical to international trade to merit any prolonged or serious consideration. It suffices to say that the appellant company which was admitted by the respondent to be a limited liability company with its registered office in Copenhagen properly sued in its corporate name. — Ayoola, JSC.
➥ LEAD JUDGEMENT DELIVERED BY:
⦿ FOR THE APPELLANT
Chief Kayode Ogunmekan.
⦿ FOR THE RESPONDENT
➥ CASE FACT/HISTORY
The respondent is a company registered in Nigeria which engaged in large scale agriculture. In 1979 it placed an order for a feed-mill machine as well as its spare parts with the appellant, a limited liability company with registered office in Copenhagen, Denmark, which at all material times was carrying on the business of manufacturing and marketing of agricultural machines or equipment. The appellant manufactured and delivered to the respondent the machines in accordance with the respondent’s order. The total price of the machines and the spare parts was DKR 485,336.00 payable instalmentally, the first payment of 15% of the purchase price being due and payable on the receipt of the shipping document while the balance of 85% was payable by six consecutive half yearly draft with 8% interest worked into each of the installments. Upon this arrangement, the machine and spare parts were to be fully paid for within thirty- six months from the date of the shipment. The respondent defaulted in the payment as agreed, alleging that the machine was defective and that the spare parts it had ordered were not delivered. In consequence of the default, the appellant sued the respondent claiming the purchase price of the machine and spare parts and interest thereon at the rate of 18% per annum calculated at compound interest from 1982 till judgment and thereafter at the rate of 60% on the amount of judgment debt until payment. The respondent, on the other hand, counter claimed for damages for breach of contract and interest on any amount awarded as damages.
At the High Court, counsel on behalf of the respondent contended that the cause of action arose in 1979 and that the action commenced in June 1987 was statute barred. The trial judge (Aderemi. J. as he then was) rightly appreciated that the decisive question was: when did the cause of action accrue Having held that: “Although bills of exchange is the mode of settling money that may be outstanding the transaction is rooted primarily in contract”, he held that the last of the drafts drawn in payment of the purchase price being due in 1982, the action commenced by a writ issued on 10th June. 1987 was not statute-barred. In the event, he entered judgment in favour of the appellant in the sum of DKR 470,290.00 being the amount of bills of exchange issued by the respondent in favour of the appellant and which were dishonoured.
Salami JCA delivering the leading judgment of the Court of Appeal with which Ogwuegbu, JCA (as he then was) and Muhammad JCA agreed, held that section 71(1) of the Bills of Exchange Act applied only if only one bill was involved and not when, as in the present transaction, several bills have been drawn. Having so held, he accepted the proposition of law advanced by counsel for the respondent and held that four of the drafts were caught by the limitation.
In the result, the Court of Appeal varied the judgment of the High Court by entering judgment for the appellant in that sum.
There are two appeals before us in this matter. One is by Saeby Jernstoberi Maskinfabric A/S, (the plaintiff in the High Court, respondent in the Court of Appeal and now the appellant in this appeal) from the decision of the Court of Appeal whereby the appeal of Olaogun Enterprises Ltd. (the defendant in the High Court, appellant in the Court of Appeal and respondent in this appeal) to that court from the decision of the High Court of Oyo State was partially allowed and the amount in which the respondent was adjudged liable to pay to the respondent was substantially reduced to DKR 159,514.00 from DKR 470,290.00, while the appeal was dismissed in regard to other aspects thereof. The other is a cross-appeal by the respondent from the dismissal of the rest of his appeal.
➥ ISSUE(S) & RESOLUTION(S)
♎ I. Whether the Court of Appeal was right in holding that the action was statute-barred except in regard to the amount of the 5th and 6th drafts?
A. APPELLANT DID NOT CHALLENGE THE COURT OF APPEAL THAT THE BILLS IN QUESTION WERE NOT ONE BILL
“The Court of Appeal held, as have been seen, that the drafts were separate bills rather than bills in a set. On this appeal, that view has not been challenged by the appellant. Section 71(1) of the Bills of Exchange Act which the appellant relied on as part of his argument would only be applicable if the bill in question is a bill in a set … It is misconceived to try to defeat the judgment of the Court of Appeal on this aspect of the matter by invoking the provisions of section 71(1) of the Act without first challenging the view of the Court below that the bills in question were not one bill but several bills. In the result any argument founded on section 71(1) of the Bills of Exchange Act must fail.”
B. NO PART OF THE DEBT WAS STATUTE BARRED
“The appellant’s case in the High Court, as held both by the High Court and the Court of Appeal, being that the claim was founded not on the bills but on a contract, it follows that there was a single contract, namely one of sale of goods giving occasion to a single breach when the purchase price was unpaid, and not like in the Ijale case where there were several collateral transactions giving rise to several causes of action.”
“What distinguished this case from the ordinary run of claims for purchase price of goods sold and delivered is the fact that the terms of the contract of sale provided that the respondent shall pay the price of the goods by installments. When the terms of a contract of sale provide that the entire quantity of goods is to be delivered to the buyer, but the buyer shall pay the price of the goods by installments, a cause of action for the purchase price does not accrue immediately upon delivery of the goods as it would have, had the agreement been silent as to the time of payment of the purchase price.”
“Whichever way one looks at the matter, the Court of Appeal was wrong in its conclusion that any part of the debt was statute-barred.”
“For the reason which I have given, the appeal of the appellant and the respondent’s cross-appeal fail and they are dismissed. Each party should bear the costs of its appeal.”
➥ MISCELLANEOUS POINTS
➥ REFERENCED (CASE)
⦿ CLAIM OF INTEREST MUST BE STATED TO BE WHETHER BASED ON CONTRACT OR STATUTE
In Jos Steel Rolling Co. Ltd. v. Bernestieli (Nig) Ltd. (1995) 8 NWLR (Pt. 412) 201 at p. 209 it was stated thus by the Court of Appeal: “For a claim of interest to properly exist for determination in a court of law, it must be stated in the endorsement of the claims to the Writ of Summons or in the Statement of Claim whether the claim of interest is based on contract or statute and the grounds upon which the claim is based.’”
➥ REFERENCED (OTHERS)