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CaseLaw

Agbabiaka V. Adebanjo & Ors. (1988) CLR 9(e) (SC)

Judgement delivered on June 28th 2019

Brief

  • Concurrent finding of facts
  • Debt
  • Overdraft loan
  • Cause of action over debt (Accural of)
  • Interest rates
  • Adjournment
  • Banking and interest charged on loans
  • Obiter dictum
  • Summary judgement procedure
  • Section 134(1) Evidence Act (now Section 131(1) of 2011)
  • Section 135 Evidence Act, 1990 (Now Section 132 of 2011)
  • Section 131(1) of the Evidence Act 2011
  • Section 132 of the Evidence Act 2011
  • Rule 16 of the Rules of Professional Conduct for Legal Practitioners 2007
  • Rule 30 of the Rules of Professional Conduct for Legal Practitioners 2007
  • Rule 31(1) of the Rules of Professional Conduct for Legal Practitioners 2007

Facts

On 16th May 2006, the Court of Appeal, Lagos Division (the lower Court) affirmed the decision of the Lagos State High Court (the trial Court) delivered on 18th July, 1997. The decision of the trial Court was largely on facts.

The Respondent was the Plaintiff at the trial Court while the Appellant was the Defendant. Between the Appellant and the Respondent: the fact is indubitable that on 29th January, 1985, on the application of the Appellant for term loan/overdraft of N180,000.00, the Respondent granted him the said term loan/overdraft of N180,000.00. The Appellant obtained the said term loan/overdraft of N180,000.00 for "the processing and development of" his film business. The Appellant, despite repeated demands for repayment of the loan plus the accrued interest thereon, failed to repay the loan capital and the interest thereon to the Respondent. On 6th December 1994 the Respondent therefore took out, against the Appellant a suit on a Writ of Summons specially endorsed with the Statement of Claim.

The Respondent claimed the following reliefs against the Appellant

  • a
    A declaration that Clause 2 of Memorandum of Deposit of Deed dated 29th January 1985 made between the Defendant of one part and the Plaintiff is a binding contract upon the Defendant.
  • b
    An order compelling the Defendant to execute a legal mortgage in respect of his property situate at No. 22, Akinbaiye Street, Isolo in favour of the Plaintiff, and to assign the statutory right of occupancy and deposit the certificate thereto to the Plaintiff as security for a loan of N180,000.00 (One Hundred and Eighty Thousand Naira) granted by the Plaintiff to the Defendant on 29th January, 1985 and which has accrued with interest to the sum of N844,207.00 as at 17th June, 1992.
  • c
    The sum of N844,207.00 being the cumulative principal and interest due to the Plaintiff as at 17th June, 1992 as a result of Banking Facilities (term loan overdraft) granted at the request and instance of the Defendant for the sum of N180,000.00 (One Hundred and Eighty Thousand Naira) of the cumulative sum thereof which the Defendant have refused, failed and still refuse, fail and or neglected to pay despite repeated demands.
  • d
    15% interest on overdraft facility at an implied Bank rate from 29th January 1985 to date of judgment.
  • e
    10% per annum interest at the Court rate from date of judgment until the whole judgment debt together with the interest thereon is fully paid.

The Appellant failed to respond to the suit of the Respondent within the period stipulated by the Rules of the trial Court. The Respondent was then constrained to file, on 8th March, 1996, a motion on Notice under Order 10 Rules 1(a) & (b) and Rule 2, and Order 11 Rules 1 & 2 of the High Court of Lagos (Civil Procedure) Rules, 1972 wherein he prayed for final Judgment against the Appellant in terms of the claims they sought in the suit. This motion gingered the Respondent to file a 14 paragraph affidavit showing cause why "he should, as the Defendant, be allowed to defend the action. Paragraphs 4, 5, 6 & 10 of the said affidavit, considered by the trial Court in its decision the subject of this appeal, being germane to this appeal, are herein below reproduced. That is;

  • 4
    That it is true that I applied for a loan of N180,000.00 from the Plaintiff but there was no agreement about or payment of any interest whatsoever thereon and the Defendant says that the overdraft loan was interest free.
  • 5
    That the purported interest charged on the aforesaid loan/overdraft was/is unilateral on the part of the Plaintiff without the knowledge, consent and agreement of the Defendant and there was no time I was informed before the loan/overdraft was obtained that interest shall be payable on the same.
  • 6
    That contrary to the facts deposed to in paragraph 4 of the affidavit in support dated 8th March, 1996 I have no knowledge of any interest accruing and which amounted to N877,207.00 or any sum at all as there was no time statement of account or any advice was sent to me by the Plaintiff.
  • 10
    That I am not liable to pay any interest on the aforesaid loan and overdraft of N180,000.00.

    • The Appellant, as the deponent of the foregoing affidavit, had admitted in paragraph 8 of the affidavit that he did not file any defence to the suit, having been advised by his Counsel that he was "not entitled to file any defence to this action as of right".

    The learned trial Judge upon considering the statement of claim and the affidavit supporting the motion for judgment vis-a-vis the Appellant's affidavit, part of which I earlier reproduced, found as a fact as follows; "In the first place, the affidavit of the Defendant does not condescend upon particulars. He admits applying for a loan of N180,000.00 from the Plaintiff but contends that it was interest free. He has exhibited no document to satisfy the Court that the loan was indeed interest free.

    It was held in the case of Ayansina v. Co-op. Bank Ltd. (1994) 5 NWLR (347) 742 that "by usual custom of banking, a banker has the right to charge interest at a reasonable rate on overdraft and to debit the interest on the overdrawn account."

    The Defendant in his affidavit does not dispute the amount or rate of interest charged but contends that no interest was chargeable on the loan. That would be against the normal banking interest practice.

    The onus is on the Defendant to properly set out the facts on which he relies for his defence in order to satisfy the Court that he ought to be given leave to defend the action.

    He has not challenged any of the documents exhibited by the Plaintiff. As stated in Macaulay v. NAL Merchant Bank (supra) a mere general denial by the Defendant that he is not indebted to the Plaintiff is not sufficient to meet the requirement of Order 11 Rules 3 of the Civil Procedure Rules.

    The learned trial Judge, finding that the Appellant (the Defendant) has not established any satisfactory defence, ruled against granting the leave sought to defend the suit.

    The lower Court affirmed the findings of fact by the trial Court that the loan/overdraft the Appellant took from the Respondent was not interest free; that the Appellant's affidavit, intended to show cause why he should be given leave to defend, "did not condescend on particulars" and that it did not disclose any defence to the claim of the Respondent. The lower Court further found, in agreement with the trial Court, that the Appellant merely made a sweeping general denial of the averments in the Respondent's supporting affidavit without joining issues with specific averments of the Respondent. This appeal is inter alia against these concurrent findings of fact by the two Courts below.

    Issues

    Appeal was heard on its merit....

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