An undefended list procedure is not designed to shut out a defendant who can show existence of a triable issue

AJAO & ORS v. UNILORIN MFB LTD (2018) LPELR-45693(CA)

In the Court of Appeal
In the Ilorin Judicial Division
Holden at Ilorin
ON MONDAY, 27TH AUGUST, 2018
Suit No: CA/IL/20/18

Before Their Lordships:

CHIDI NWAOMA UWA, JCA
HAMMA AKAWU BARKA, JCA
BOLOUKUROMO MOSES UGO, JCA

Between
1. ALFRED AJAO
2. AB-FACTOR GLOBAL CONCEPT LIMITED
3. DR. OLUSOJI O. ADEBISI –
4. MRS. TITILADE ITIOLA
5. ODEBUNMI EZEKIEL OLUYEMI
6. DR. OMOLARA O. OLUWANYI
Appellants
And
UNILORIN MICROFINANCE BANK LTD
Respondent

LEAD JUDGMENT DELIVERED BY CHIDI NWAOMA UWA, J.C.A.

FACTS OF THE CASE
The Respondent instituted this action at the Ilorin judicial division of the High Court of Kwara State under the Undefended List Procedure. The respondent from her affidavit evidence said it granted the sum of N8million in favour of the 1st and 2nd defendants (now appellants) in two installments (i.e. 18th February and 2nd April, 2015) to aid the supply of Fire Fighting Hilux (First Responder) to University of Ilorin. On the 19th February, 2016, the 1st and 2nd defendants applied again for another loan to refinance the contract and same was granted in the sum of N6.4million.

The appellants on the other hand made out that both principal sums were eventually repaid by the 1st and 2nd appellants in installments. It was alleged that all the transactions through which the loan was obtained and the repayments were done through the 2nd defendant/appellant’s account domiciled with the respondent. It was further alleged that the respondent made an entry of N15, 800.000.00 to the 2nd appellant’s account. It was also alleged that the 2nd appellant did not apply nor receive the said sum from the respondent.

The appellant alleged that there were series of contentions as to whether the amount claimed by the respondent comprised both the principal and the interest. It was made out that the evidence adduced by the respondent are grossly not sufficient for the Court to have come to the conclusion that the 3rd – 6th appellants guaranteed the two loans, as the loans were taken at different times and the guarantors that guaranteed the first loan were not the same persons that guaranteed the second loan. The appellants were of the view that the learned trial judge should not grant the reliefs under the undefended list procedure but the matter should be transferred to the general cause list for proper trial as it was apparent that the reliefs sought were not for a liquidated sum.

In a judgment delivered on the 14th day of December, 2017, the court granted the reliefs sought by the Respondent. The appellants were aggrieved by the decision of the trial court, hence this appeal to the Court of Appeal.

ISSUES FOR DETERMINATION
The court determined the appeal on a lone issue:
Whether having regards to the facts and circumstances of this case, the trial court was right in granting the reliefs of the respondent under the Undefended List Procedure when the money claimed by the respondent was unliquidated and when there are still serious contentions between the 1st and 2nd appellants and the respondent as to the amount owed.

APPELLANTS’ COUNSEL SUBMISSIONS
Relying on the case of ASUP OFFA v. UBA PLC & ORS (2013) LPELR-22493(CA), learned appellant’s counsel submitted that the trial court was wrong to have granted the reliefs sought by the respondent under the Undefended List Procedure. It was argued that the suit ought not to have been accommodated under the Undefended List Procedure, that there is a dispute as to whether the principal sum has been paid or not and whether the claim is for both the principal loan and interest. It was submitted that the trial court’s reliance on exhibits 8 and 11 as implied admissions was improper.

In the alternative, without conceding that there was an admission by the 1st and 2nd appellants, it was submitted that an admission like a confessional statement binds the maker of the said admission and cannot bind a co–accused. Counsel cited ADUSEI VS. ADEBAYO (2012) LPELR-7844(SC) PAGE 17 PARAS. A – C. It was argued that the trial court ought not to have held the 3rd – 6th appellants liable for what they did not admit and that the appellants were entitled to their defense. It was also argued that the court ought to have been satisfied that the claimant had established a prima facie case against the defendant before granting the claim under the undefended list procedure. Reference was made to Order 32, Rule 1, Kwara State High Court (Civil Procedure) Rules, 2005. It was stressed that the procedure under the Rules requires that it be deposed in the affidavit in support of the writ that in her belief, there is no defense to the action. It was argued that this condition precedent was not fulfilled by the respondent thus; the matter ought to have been transferred to the general cause list for full trial.

It was also argued that the allegation of fraud by the appellants in their affidavit in support of the notice of intention to defend constitutes a triable issue. Therefore, the case was unfit for trial under the undefended list procedure.

RESPONDENT’S COUNSEL SUBMISSIONS
Learned Counsel for the Respondent in his response submitted that in considering whether the suit was in line with the provisions of Order 23, Rule 1 of the Kwara State High Court (Civil Procedure Rules) 2005, one would examine the writ of summons filed by the respondent, which shows that the respondent’s claim was to recover debt of a liquidated sum of N4,751,464.78. It was stressed that there is no dispute as to the amount owed. Counsel contended that exhibit 5 and the entries made on 16/6/15 and 18/5/16, showed that the amount paid by the appellants covered the principal and interest sum. Also, that exhibit 3 showed that 7% interest rate payable was a term of the loan contract; therefore a claim for interest under the undefended list procedure is in order.

On the allegation of fraud, counsel submitted that a mere allegation of fraud cannot be used as a ground of transfer of a matter from undefended list procedure to the general cause list. OJIBAH VS. OJIBAH (1991) 5 NWLR (PT. 191) 276; (1991) LPELR-2374(SC) was cited.

RESOLUTION OF ISSUES
In resolving the issue, the court examined when the undefended list procedure is appropriate for a trial. Relying on UNITED BANK FOR AFRICA PLC & ANOR Vs. ALHAJI BABANGIDA JARGABA (2007) 11 NWLR (PT. 1045) P. 247; (2007) LPELR-3399(SC) and AGWUNEME VS. EZE (1990) 3 NWLR (PT. 137); the court stated that the procedure is to ensure quick disposal of certain categories of cases such as those involving debts or liquidated sum.

The Court however held that the procedure is not designed to shut out a defendant who can show in his affidavit in support of intention to defend that there is a triable issue.
The court examined the exhibits before it and held that obviously, there is a dispute as to whether the principal sum has been paid or not, that the respondent failed to state how much of the principal sum remained unpaid and how much of the interest accrued to enable the court ascertain whether the suit could be properly tried under the undefended list procedure.

It was held that from the provisions of Order 23, Rule 1 of the Kwara State (Civil Procedure) Rules, the affidavit in support must set forth the grounds upon which the cause of action is based as well as stating that to the deponent’s belief “there is no defense to the action.”

The Court further considered paragraphs 9 to13 of the 1st, 2nd and 6th appellants’ affidavit in support of their notice of intention to defend the action and held that all the averments therein showed that there was need to have sent the matter to the general cause list so that evidence could be led and the respondent’s witnesses cross examined on the allegations and denials to get to the root of the matter.

The court gave instances where leave to defend an action under the undefended list procedure will be granted, some of which are:
(a) Where the defendant raises substantial questions of fact or law which ought to be tried
(b) Where the defendant alleges misrepresentation or fraud by the plaintiff.
(c) Where the facts alleged by the plaintiff are of such a nature as to entitle the defendant to interrogate the plaintiff or cross-examine the plaintiff’s witnesses on accompanying affidavit.

In resolving the issue, the court held that where fraud is alleged, full trial would clear the air. The court cited DENTON-WEST Vs. MUOMA (2010) 2 NWLR (PT. 1177) 19 at 45 – 46. The Court finally held that the respondent’s claim did not qualify as a liquidated sum to have been tried under the undefended list procedure. Also, that the appellants have disclosed triable issues, which will necessitate the hearing of the action under the general cause list.

HELD
In a unanimous decision, the appeal was allowed. The suit was remitted back for hearing under the general cause list.

Appearances:
Y.A. DIKKO – For appellants

I.F. YUSUF with him, A.A. OMOLABI and A.T. ABDULRAZAK – For respondent.

Compiled by Lawpavilion