3PLR – ABDULLAHI V WAJE COMMUNITY BANK

POLICY, PRACTICE AND PUBLISHING,  LAW REPORTS – 3PLR

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ABDULLAHI

V

WAJE COMMUNITY BANK

IN THE COURT OF APPEAL

KADUNA JUDICIAL DIVISION

3PLR/2000/4  (CA)

 

OTHER CITATIONS

7 NWLR (PT 663) 9 at 25

BEFORE THEIR LORDSHIPS

MAHMUD MOHAMMED, JCA

VICTOR AIMEPOMO OYELEYE OMAGE, JCA

OLUDADE OLADAPO OBADINA, JCA

 

REPRESENTATION

K.T. Turaki. ESQ.with him –  Appellant

Fatima Alkali – For the Respondent

 

MAIN ISSUES

BANKING AND FINANCE – BANKING PRACTICES:- Determination of interest rate chargeable by banks – When compound interest may be charged on overdraft-

PRACTICE AND PROCEDURE – Undefended list – Power of High Court to enter suit on- Determination of matter on

 

PRACTICE AND PROCEDURE – EVIDENCE – Extrinsic evidence – Whether documents can be altered by

 

 

MAIN JUDGEMENT

OLUDADE OLADAPO OBADINA, JCA.(delivering the leading judgment)

This is an appeal against the judgment of the Kano State High Court delivered on the 10th day of May, 199 in favour of the respondent in Suit No. K/743/98.

At all times material to this action, the appellant was a Current Account holder of the respondent bank and accordingly a Banker/Customer relationship subsisted between the parties. In the course of that relationship, the appellant being a Current Account holder of the respondent applied to the respondent for an overdraft facility in the sum of N1,000,000 (one Million Naira) only. The application was approved by the respondent and overdraft agreement dated 7th day of May, 1997 was executed by the parties.

Pursuant to the said overdraft agreement, the respondent advanced the sum of N1,000,000 (One Million Naira) to the appellant sometime in March, 1998. Upon expiration of the facility and the inability of the appellant to repay same in spite of repeated demands, the respondent took out a writ of summons against the appellant.

In the Writ of Summons issued on the Undefended List, the respondent, as plaintiff , claimed against the appellant as defendant in the following terms:

“The plaintiff’s claim is for the sum of N1,931,893,88k (One Million, Nine Hundred and Thirty-One Thousand, Eight-Hundred and Ninety-Three Naira, Eighty-Eight Kobo), being money payable by the defendant to the plaintiff as at the 8th day of October, 1998, for money lent by the plaintiff to the defendant at the defendant’s request, and for interest agreed to be paid on money so lent. Defendant has refused, neglected and failed to pay the said sum despite repeated demands.

Wherefore the plaintiff claims the said sum of N1,931,893,88k plus interest at the rate of 21% from the said 8th day of October, 1998 till judgment is entered and thereafter at the court’s rate until liquidate.

And the plaintiff claims the costs of this action”.

The Writ was supported by an affidavit in support of Writ of Summons, on the ’Undefended List’.

The appellant in response to the Writ, filed a Notice of intention to defend; an affidavit in support and a further affidavit in support of Notice of intention to defend.

At the end of the trial, the trial court entered judgment in favour of the respondent in the sum of N1,386,893.00k One Million, Three Hundred and Eighty Six Thousand, Eight Hundred and Ninety Three Naira) and the interest agreed to be paid on the money.

The appellant was aggrieved and dissatisfied with the judgment of the trial court. He therefore appealed to this court against the decision of the trial court, on six (6) grounds of appeal.

From the six grounds of appeal, the appellant formulated three (3) issues for determination of this court. The issues formulated read as follows:

“(1)   Whether the respondent’s affidavit dated 19th day of November, 1998 per se as supported by Exhibit KN1 are sufficient in establishment of the respondent’s claim in Undefended List, regard being had to the premises upon which the respondent’s claim for interest, charges commission on the turnover and other expenses were not stated in the affidavit.

(2)     Whether failure of the trial lower court to transfer the cause to a general cause list does not amount to the denial of the appellant was not allowed to exercise his right of calling witnesses, cross-examining the respondent’s witnesses and proffering his defence in respect of a matter over which the plaintiff/respondent’s affidavit dated 19th day of November, 1998, is in conflict with the defendant/appellant’s affidavit and further affidavit in support of Notice of intention to defend dated 15th day of March, 1999 and 17th day of March, 1999 respectively on vital issues.

(3)     Whether Exhibit K3 in support of the plaintiff/respondent’s affidavit can rightly be said to have spoken for itself in proof of the plaintiff/respondent’s claim under undefended list”.

The respondent also formulated one issue for determination of this court namely:

“Whether the affidavit of the appellant disclosed a defence on the merits within the meaning of Order 23, Rules 3 (1) or the Kano State High Court Civil Procedure Rules, 1988, to warrant a transfer to the General Cause List, especially as the action was brought on the Undefended List”.

The appellant again filed an appellant’s reply brief in response to the respondent’s brief.

From the totality of arguments of the appellant in the appellant’s briefs, the crux of the appellant’s complaint is that the appellant’s affidavits in support of the Notice of intention to defend disclose a defence on the merit when regard is had to the affidavit in support of the respondent’s claim on the Undefended List. In that regard the first issue raised by the appellant and the only issue formulated by the respondent are identical and the same in substance. They are both seeking to know whether the claim as constituted is a proper case to be tried on the Undefended List of the court. The plaintiff/respondent issued his Writ of Summon against the appellant on the Undefended List pursuant to Order 23 Rule 1, of the Kano State High Court Civil Procedure Rules, 1988. Order 23 Rule 1, of the Rules provides as follows:-

“Whenever application is made to a court for issue of a Writ of Summons in respect of a claim to recover a debt or liquidated money demand and such application is supported by an affidavit setting forth the grounds upon which the claim is based and stating that in the deponent’s belief there is no defence thereto, the court shall, if satisfied that there are good grounds for believing that there is no defence thereto no defence thereto, enter the suit for hearing in what shall be called the ’Undefended List’; and mark the Writ of Simmons accordingly, and enter thereon a date for hearing suitable to the circumstances of the particular case”.

Order 23, Rule 1 of the Rules as quoted as quoted above, empowers the court to enter the suit for hearing on the Undefended List, if the court is satisfied that there are good grounds for believing that there is no defence to the suit. The fact that the court places a suit on the Undefended List. Whether the suit would be heard on the Undefended List as placed, would depend on whether the defendant could disclosed a defence to the suit. Order 23, Rule 3 of the Rule 3 of the Rules has the following to say on the issue:

’3(1) If the party served with this Writ of Summons and affidavit delivers to the Registrar a Notice in writing that he intends to defend the suit together with an affidavit disclosing a defence on the merit, the court may give him leave to defend upon such terms as the court may think just.

3(2)   Where leave to defend is given under this rule, the action shall be removed from the Undefended List and placed on the Ordinary Cause List; and the court may Order pleadings, or proceed to hearing without further pleadings”.

From the combined provisions of Order 23, Rules, 1, 2and 3 the High Court Civil Procedure Rules, Kano State, 1988, the fact that the Court places a suit on the undefended list of the Court does not necessarily mean that the suit will be finally heard on the undefended list. Whether it will be finally heard on the Undefended List will depend on whether the defendant can disclose in his affidavit a defence on the merit of the case. Therefore from the totality of the evidence proffered by the parties in this appeal, the issues for determination are as follows:

(1)     Whether in view of the claim of the respondent, the affidavit in support of the notice of intention to defend filed by the appellant disclosed a defence on the merit to justify the transfer of the case to the general cause list; and

(2)     Whether failure of the trial court to transfer the cause to the general cause list amounts to a denial of the appellant’s right to fail hearing.

In his brief of argument, the appellant referred to Exhibit KN. 1 and the affidavit in support of the respondent’s writ of summons. He argued that Exhibit KN. 1 expressly shows that the appellant was charged some bank charges and commissions, C.M.C. charges. Commissions on turnover, interest on overdraft among others, while the affidavit in support of the summons did not explain how the interest, commissions and charges accrued. He said the affidavit did not show whether the parties agreed on the charges and commissions a term of the contract on the basis of which the interests and charges were charged. He argued that the affidavit in support of the summons did not show the percentages, if any, agreed upon by the parties to be charged as interest, and whether the interest should be compound or simple. He submitted that the learned trial court was in error when he entered judgment on the Undefended List on the strength of the affidavit. He further submitted that a bank can only charge compound interest on an overdraft facility where the customer agrees for it to be charged. He relies on U.B.V. v. SAX (Nig.) Ltd. (1994) 8 NWLR (Pt. 361) 150. He submitted that for a judgment under Undefended List to be entered for interest, commissions. Bank charges and other expenses, the respondent must expressly give account of the genesis of the charges and commissions as to whether they arose from an agreement and/or banking custom or tariff. He submitted that where interest is being claimed as a matter of right, the proper practice is to claim entitlement to it on the writ, and please facts which show such entitlement in a statement of claim. He urged the court to hold that the respondent’s affidavit in support of the writ in this case did not claim any entitlement to interest, commission on turnover and M.C. charges, and judgment could not be entered on the undefended list.

In his further submission, the appellant referred to Exhibit KN.3 in support of the respondent’s writ of summons; which is the overdraft agreement between the parties. He argued that the agreement did not shed any light as to what constitutes usual commissions and customary banking charges, costs, expenses or incidental expenses relating to overdraft facilities. He submitted that where there is no agreement between a banker and its customer as to payment of interest on a loan account of the customer. The trial court cannot infer payment of such interest from an alleged universal custom, unless such custom is established by evidence to exist in Nigeria. He said that respondent’s affidavit in support of the writ did not indicate what constitutes usual commissions and customary banking charge and the percentage that is chargeable s as interest, and therefore the trial court was in error in law in holding that Exhibits KN . 1 and KN. 3 and the affidavit in support of the writ established the items relating to interest, charges costs and expenses. He urged the court to allow the appeal.

In his own argument, the learned counsel for the respondent referred to paragraphs 3(g) and 3(j) of the affidavit in support of the appellant’s notice of intention to defenced filed by the appellant. He said the appellant did not controvert the assertion that the appellant was owing the principal sum of N1m (one Million Naira). He also referred to page 3 lines 6-7 of the appellant’s brief wherein the appellant admitted taking an overdraft of N1m (One Million Naira) from the respondent sometimes in 1998.

The learned counsel referred to the affidavit in support of the writ of summons filed by the respondent and Exhibit KN.3 attached thereto: that is, the overdraft agreement between the parties. He also referred to paragraph 3(c) of the affidavit in support of the appellant’s notice of intention to defend wherein the appellant acknowledged Exhibit KN.3 as the overdraft after agreement between the parties. He referred to paragraphs 2 and 4 of Exh. KN.3 and submitted that the combined effect of paragraphs 2 and 4 the agreement Exhibit KN3.e, is that the respondent was given the unilateral right to charge all the interest and other charges reflected to the statement of account, Exhibit KN.1 and that the court is precluded from holding to the contrary. He relied on the case of J. E. Oshevire Ltd. v. Tripoli Motors (1997) 4 SCNJ 246; (1997) 5 NWLR (Pt. 503)1. He submitted that the appellant cannot vary the terms of the agreement by oral evidence. He said the respond charged interest and other commissions reflected in Exhibit KN.1, in exercise of the discretionary power conferred by clauses 2 and 4 of Exhibit KN.3 the agreement between the parties. The counsel for the respondent further argued that assuming there was no agreement between the parties regarding interest; he submitted that the respondent would still be entitled to interest, because in the normal banking practice and in consonance with the universal custom of banking, it is an implied term of overdraft or loan agreement between the bank and the customer that a reasonable interest will be charged on such loan or overdraft where no rate of interest is expressly agreed upon. He cited as an authority, the case of Faagol Instrument Ltd. v. N.B.N. Ltd. (1993) 1 NWLR (Pt 271) 586 at 587.

He urged the court to hold that Exhibits KN. 1.; KN.3 and the affidavit in support of the writ filed by the respondent have established the respondent’s claim and affirm the judgment of the trial court.

The main complaint of the appellant is that in Exhibit KN.1, (a statement of account) the respondent charged him (the appellant) some banking charges and commissions; that he (appellant) was also charged CMC charges, commission on turnover, interest on overdraft among others, while affidavit in support of the writ of the respondent did not explain how the interest, commissions and charges accrued. He further said that the affidavit in support of the writ of the respondent also did not show the parties agreed on the charges. Commissions and interest as terms of their contract.

In the affidavit in support, of the writ filed by the respondent, the respondent stated inter-alia as follows:

“(iii)   Sometime in March, 1988, at the defendant’s request, the plaintiff allowed the defendant to overdraw his account (with No. 591) with the plaintiff. This situation continued in varying degrees till the 8th day of October, 1988 by which time the Outstanding balance in the defendant’s account had escalated to the sum of N1,931,893.88k (One Million, Nine Hundred and Thirty One, Eight Hundred and Ninety Three Naira, Eighty Eight Kobo). Attached in this regard is a copy of the state of account of the state of account of the defendant’s account with the plaintiff. It is marked Exhibit’s account with the plaintiff. It is marked Exhibit KN.1.

(iv)    On various occasions since the 8th day of October, 1998, the plaintiff has demanded the repayment of the said overdraft by the defendant, the defendant had failed, neglected and refused to heed the said demands.

(v)     The plaintiff was as a result, constrained to brief our firm (M.A Bello and Co. Solicitors) with explicit instruments to institute these proceedings to recover the said sum from the defendant, which sum is still due and continues to attract interest at the rate of 21% agreed by the defendant with the plaintiff prior to the grant of the overdraft.

(vi)    By a letter dated the 21st day of October, 1998, the said firm of M.A. Bello and Co. Solicitors, further demanded of the defendant the payment of the said sum of N1,931,893.88k due to the plaintiff; to no avail. A copy of the said letter is attached hereto, marked Exhibit KN.2

(vii)   The defendant also executed an overdraft agreement with the plaintiff in respect of his said overdraft of his account with the plaintiff. A copy of the said agreement, dated 1st January, 1998 is attached hereto marked Exhibit KN.3.

(viii)   The defendant as defence to this action”.

There appellant as defendant filed a notice of intention defend supported by affidavit in confirmity with Order 23, Rule 3(1) of the Kano State High Court Civil Procedure Rules 1988.

In the affidavit in support of notice of intention to defend, the appellant stated in paragraph 3 of the affidavit inter-alia as follows:

“3(b) That he maintains a current account No. 391 with the plaintiff’s bank, Waje Community Bank Ltd., Kano and a Ledger Card evidencing every transaction was being maintained by the bank.

(c)     That the statement of claim in support of the plaintiff’s claim does not reflect true position of the plaintiff’s and the defendant’s transaction.

(d)     That the statement of claim does not provide sufficient information as to the agreement of the parties on the interest, usual commissions and other banking charges chargeable in respect of the transaction and the mode of their computation.

(e)     that the plaintiff and defendant agreed by paragraph 4 of Exhibit KN. 3 in support of the writ that chargeable interest should be based on agreements.

(f)      That the plaintiff unilaterally charged interest, and other bank charges without any agreement reached relating thereto.

(g)     That the defendant was charged compound interest on the facility and the interest so charged was added to the principal debt when no agreement to that effect was reached between the plaintiff and defendant.

(h)     That the amount charged as commission and other banking services were arbitrarily and unilaterally charged by the plaintiff without any express agreement reached between the parties.

(i)      The amount claimed from the defendant by the plaintiff cumulated to One Million, Nine hundred and thirty-eight Kobo (N1,931,883,88k) mainly due to unilateral and arbitrary charges debited and compounded to the defendant’s current account without an agreement and consent of the defendant sought and obtained thereto.

(j)      That reversal of the arbitrary charges and establishment of actual debt will certainly drastically reduce the defendants debt.

(k)     That the actual debt of the defendant can only be ascertained through normal process of proof and evidence.

(L)     That the defendant has a defence to substantiate and unascertained amount claimed by the plaintiff and is desirous of advancing the same before the court”.

From the affidavit in support of the notice of intention to defend, there is no paragraph where appellant denied taking an overdraft facility of N1m (One Million Naira) from the respondent; on the contrary, in paragraph 3(g) of the affidavit, the appellant admitted that there was a facility but complained that a compound interest was charged and added to the principal debt when there was no agreement to that effect between the parties in respect of the overdraft facilities; and that the agreement of the parties is that the interest chargeable should be based on their agreement.

From the combined contents of the affidavit in support of the writ of summons filed by the respondent and the exhibits attached thereto and the affidavit in support of the notice of intention to defence file by the appellant, it is common ground:

“(1)   That the respondent granted an overdraft facility in the sum of N1m (One Million Naira) to the respondent sometime in 1998.

(2)     That the parties executed an overdraft agreement, Exhibit KN.3, in respect of the transaction.

In paragraph 3(d) of the affidavit filed by the appellant, the appellant complained that the statement of claim, (I suppose he is referring to the affidavit in support writ by the respondent) does not provide sufficient information as to the agreement of the parties on the interest, usual commissions and other banking charges, chargeable in respect of the transaction and the mode of their computation.

Since there is an agreement between the parties in respect of the transaction, the propriety of the claim by the respondent will depend on the provisions of the agreement; in that regard what does the agreement say on the issues of interest, usual commissions and other banking charges chargeable in respect of the transaction and their mode of computation against which the appellant is now complaining?

Clauses 1, 2 and 4 of the agreement – Exhibit KN.3 read as follows:

“(1)   The borrower will pay to the bank on demand monies and liabilities now or hereafter due and owing to the bank by the borrower in any manner whatsoever whether as principal or surety, either solely or jointly with any other company, society, corporation, person or persons in partnership or otherwise and when the said monies shall becomes due and payable herein to pay interest from time to time of such demand until actual payment thereof at the rate aforesaid computed with monthly interest with interest owing at the date in each month to which interest is normally computed being added monthly to the amount owing so as to form one aggregate sum carrying interest at the rate aforesaid.

(2)     That the overdraft facilities granted by the bank, the borrower shall include interest computed in accordance with the prevailing interest rate of the bank or such other rates as the bank may from time to time determine including all usual commissions and customary banking charges and all costs and expenses incurred in connection with or incidental to the overdraft facilities.

(4)     That if and when the overdraft facilities expire, there remains a balance unpaid or so long as the same or any part thereof shall remain due and unpaid the borrower shall be lawful for the bank to charge all commissions, costs, bank charges and expenses relating to overdraft facilities and same shall subsists until final liquidation of any sum outstanding”. See Exhibit KN.3 at page 14 of the record of appeal.

That is the agreement entered into and signed by the parties in respect of the overdraft facilities.

In clause 2 of the agreement, Exhibit KN.3, the parties agreed that the overdraft facilities granted by her respondent to the appellant shall include interest computed in accordance with the prevailing interest rate of the respondent bank or such other rates as the respondent may from time to time determine including all usual commission and customary banking charges and all costs and expense incurred in connection with or incidental to the overdraft facilities.

Clause 2 of Exhibit KN.3. the agreement between the parties empowers the respondent to charge interest on the overdraft; it empowers the respondent to compute the interest so chargeable in accordance with the prevailing interest rate of the respondent bank or to compute the interest in accordance with such other rates as the respondent may from time to time determine. In determining the interest chargeable, the respondent may include all usual commissions and customary banking charges, and all costs and expenses incurred by the respondent in connection with or incidental to the overdraft facilities.

Similarly, clause 1 of the agreement – Exhibit KN.3 enjoins the appellant, when the monies under the overdraft become due and payable, to pay interest from time to time of such demand until actual payment thereof. When clauses 1 and 2 of the agreement – Exhibit KN.3, are read together, shows that interest payable shall be computed in accordance with the prevailing interest rate of the respondent bank, and shall be computed with monthly interest with interest is normally computed being added monthly to the amount owing so as to form one aggregate sum. In other words, a sober reading together of clauses 1 and 2 of the agreement shows that the interest chargeable on the overdraft, the subject matter of Exhibit Kn. 3 shall be compound interest.

Again, the effect of the combined provisions of clauses 2 and 4 of the agreement is that when the said overdraft facilities expire, and there remains a balance unpaid or so long as the overdraft itself or any part of it remains unpaid, the appellant shall pay to the respondent interest on the facilities at rate computed in accordance with the prevailing interest rate of the respondent bank and it shall be lawful for the respondent to charge all commissions, costs, bank charges and expenses relating to the overdraft facilities.

Those are the provisions of the agreement between the parties.

It is the general rule that where parties to an agreement have set out the terms thereof in a written document, extrinsic evidence is not admissible to add to, vary, subtract from or contradict the terms of the written instrument. See Olaloye v. Balogun (1990) 5 NWLR (Pt. 148) 24; Union Bank Nigeria Ltd. v. Ozigi (1994) 1 NWLR (Pt. 333) 385 and UBN Ltd. v. SAX (Nig.) Ltd. (1994) 8 NWLR (Pt. 361) 150 at 164; Section 131 (1) of the Evidence Act 1990. Therefore, if there is any disagreement between the parties to a written agreement as to what is the term of the agreement on any particular point, the authoritative and legal source of information for the purpose of resolving the disagreement is the written agreement executive by the parties. In this case, the document containing the terms of the agreement relating to the overdraft – Exhibit KN.3. See UNB Ltd. v. SAX (Nig.) Ltd. (Supra) at page 164.

The provisions of the agreement between the parties – Exhibit KN. 3 are very clear and unambiguous. When a document it clear and unambiguous, the operative words in it should be given their simple and ordinary grammatical meaning.

Further, the general rule is that when the words of any instrument are free from ambiguity in themselves and when the circumstance of the case have not created any doubt or difficulty as to the proper application of the of the words to claimants under the instrument or the subject-matter to which the instrument relates, such and instrument is always to be construed according to the strict, plain and common meaning of the words themselves. See UBN Ltd v. SAX (Nig.) Ltd. (Supra) at 165.

Once the conditions necessary for the information of a contract are fulfilled by the parties thereto they are bound by it. It is not the business of the court to make a contract for the parties or to re-write the one which they have made. See Oyenuga v. The Provisional Council of the University of Ife (1965) NMLR 9.

In the present case of appeal, the agreement between the parties – Exhibit KN. 3 clearly empowers the respondent bank to charge interest at the prevailing interest rate of the bank. The respondent is also empowered by the agreement to charge all commission. Costs bank charges and expenses relating to the overdraft facilities. The agreement does not enjoin the respondent, in computing the interest on the overdraft facility, to consult the appellant. Under no circumstances should new or additional words be imported into the text unless the document would be by the absence of that which is imported, impossible to understand. See Solicitor – General, Western Nigeria v. Adebonojo (1971) 1, All NLR 178, cited with approval in Union Bank of Nigeria Ltd. v. Ozigi (Supra).

In the circumstances, the respondent having attached Exhibits KV.3 to his affidavit in support of the writ of summons and stating that in his belief the appellant had no defence to the claim. I am of the view that the respondents has sufficiently set for the grounds upon which the claim was based to justly an order placing the cause on the Undefended List. The affidavit of the respondent with Exhibits KN.1 and KN.3 attached thereto contained sufficient materials to ground the order made by the learned trial judge placing the cause on the Undefended List.

The other aspect of the issue for consideration is whether the affidavit of the appellant in support of the notice of intention to defend disclosed a defence on the merit to warrant and order of the court for the case to be tried on the general cause list.

At pages 17-20 of the record of appeal, appellant filed a notice of intention to defend and supported the notice by affidavit and further affidavit with an Exhibit marked as Exhibit 1.

A critical examination of the affidavit and further affidavit in support of the notice of intention to defend file by the appellant does not show any paragraph where the appellant denied taking the overdraft facilities from the respondent. All the complaints of the appellant relate to the interest element and other banking charges made by the respondent. The only semblance of a defence is that sum of (N545,000) five hundred and forty-five thousand Naira which the appellant paid vide Exhibit 1 attached to the further affidavit. The money was paid after the last date of Exhibit KN.1.

After a sober reflection on the affidavit and further affidavit in support of the notice of intention to defend, it seems to me all the complaints made by the appellant in respect of the interest elements and other banking charges and commissions aspect of the debt being claimed are misconceived; in that the overdraft agreement between the parties, Exhibit KN. 3 empowers the respondent to charge interest and other banking charges and commissions as it did.

The power given by the relevant clauses of the overdraft agreement between the parties – Exhibit KN.3 could not properly be used to stipulate arbitrary rate of interest or rates of interest contrary to the guidelines given by the Central Bank of Nigeria, because under Section 15 of the banking Act, Cap 28 of the Laws of the Federation of Nigeria, 1990, the rates of interest charged on advances, loans or credit facilities or paid on deposits by any licensed bank it to be linked to the minimum rediscount rat of the Central bank subject to stated minimum and maximum rates of interest and the minimum and maximum rates of interest when so approved are to be the same for all licensed banks. The interest structure of each licensed bank is subject to the approval of the Central Bank.

Upon consideration of the totality of the evidence before the learned trial court, it seems to me the affidavits filed by the appellant in support of the notice of intention to defend does not disclose a defence on the merit to justify the inovation of Order 23 Rule 3(2) of the Kano State High Court (Civil Procedure) Rules 1988 by the learned trial judge. With Exhibit KN. 3 attached to the affidavit in support of the summons by the respondent. The learned trial judge was right in holding that the items relating to interest, charges, costs and expenses claimed by the respondent have been established.

The next issue for consideration is whether failure of the trial court to transfer in cause to the general cause list amounts to a denial of the appellant’s right to fair hearing

In arguing the issue in his brief of argument, the learned counsel for the appellant referred to paragraphs 3(f) and 3(g) of the appellant’s affidavit in support of notice of intention to defend, where, according to the learned counsel, the appellant categorically denied the existence of an express agreement on the chargeable interest rate and other bank charges. He submitted that since Exhibit KN.1 i.e. statement of account, incorporates claims on bank charges and compound interest as constituting the whole sum claimed by the respondent, there was an irreconcilable conflict between the deposition of the respondent and that of the appellant. He submitted that the conflict could only be resolved by the trial court calling oral evidence. – He cited National Bank v. Are Brothers (1977) 6 SC 97; Pharmacists Board v. Adebesin (1978) SC 43.

He further submitted that where a trial court failed to allow the determination of the truth in respect of affidavits that are conflicting on vital issues, the refusal borders on the infringement of right of the parties to fair hearing, as their right of cross examining the witnesses for the purpose of ascertaining the truth has been infringed. He argued that the affidavit of the respondent and those of the appellant were in conflict on vital issues, and that such vital conflict could only be resolved by calling oral evidence.

He submitted that since the affidavits of the appellant in support of the notice of intention to defend disclosed some doubt on the case for the respondent, failure of the trial court to transfer the matter to the general cause list is a breach of Section 33(1) of the Constitution of the Federal Republic, 1979. He urged the court to allow appeal.

One of the cardinal principles of our judicial system is the adoption of the principle of fair hearing. The basic criteria and attributes of fair hearing include:

(a)     That the court or tribunal hear both sides not only in the case but also on all material issues in the case before reaching a decision which may be prejudicial to any party in the case:

(b)     That the court or tribunal shall give equal treatment, equal opportunity and equal consideration to all concerned; and

(c)     That having regard to all the circumstances in every material decision in the case, justice must not only be done but must manifestly and undoubtedly be seen to have been done.

See Udo-Akugba v. Paico Ltd. (1993) 4 NWLR (Pt. 288) 434 at 443; Kotoye v. CBN (1989) 1 NWLR (Pt. 98) 419: Adigun v. Attorney-General of Oyo State (1987) 1NWLR (Pt. 53) 678 and Deduwa v. Okorodudu (1976) 9 – 10 SC 329.

In the present case on appeal, the writ was issued on the Undefended List under the provisions of Order 23 Rule 1 of the Kano State High Court (Civil Procedure) Rules 1988. According to the provisions of the Rule, a matter instituted on the

Undefended List is determine purely on the basis of affidavit evidence. For case of reference. I shall set out the relevant provisions of Order 23 of the Kano State High Court (Civil Procedure) Rules, 1988. It provides:

“Order 23

(1)     Whenever application is made to a court for issue of a writ of summons in respect of a claim to recover a debt or liquidated money demand and such application is supported by an affidavit setting forth the grounds upon which the claim is based and stating that in the deponent’s belief there is no defence thereto, the court shall, if satisfied that there are good grounds for believing that there is no defence thereto, enter the suit for hearing in what shall be called the ‘Undefended List’, and mark the Writ of Summons accordingly, and enter thereon a date for hearing suitable to the circumstances of the particular case.

(3)(1) If the party served with this writ of summons and affidavit delivers to the Registrar a notice in writing that he intends to defend the suit together with an affidavit disclosing a defence on the merit, the court may give him leave to defend upon such terms as the court may think just.

(3)(2) Where leave to defend to defend is given under this rule, the action, shall be removed from the “Undefended List’ and placed on the ordinary Cause List; and the court may order pleadings or proceed to hearing without further pleadings.

(4)     Where any defendant neglects to deliver the notice of defence and affidavit prescribed by rule 3(1) or is not given leave to defend by the court. The suit shall be heard as an Undefended suit., and judgment given thereon, without calling upon the plaintiff to summon witnesses before the court to prove his case formally.

(5)     Nothing herein shall preclude the court from hearing or requiring oral evidence, should it so think fit, at any stage of the proceeding under Rule 4”.

In the instant case, application for a writ of summons on the Undefended List was made under Order 23(1) and the suit was placed on the Undefended List for hearing. The appellant was served with the writ and the affidavit in support in accordance with Order 23(2) of the Rules and he took advantages of Order 23(3)(1) and delivered to the registrar a notice in writing that he intended to defend the suit. He filed an affidavit and further affidavit with an Exhibit in support of the notice of intention to defend.

The matter came up for hearing. The appellant and the respondent were each represented by counsel, and heard by the court, on their respective affidavit evidence, under Order 23(3)(1) of the Rules. The court considered both the affidavit in support of the summons with the Exhibit in support of the notice of intention to defend. In the consideration of the case of both parties, the learned judge stated inter-alia as follows:

“The contention of the defendant over his indebtedness to the plaintiff is not on the principal sum borrowed to him but on the interest and other charges. The defendant in paragraph 3(d) of his notice of intention to defend averred that the statement of claim does not provide sufficient information as to the agreement of the parties on the interest, usual commissions and other bank charges chargeable in respect of the transaction and the mode of their computation. In paragraphs 3(e) and 3(f) of the affidavit in support of notice of intention to defend the defendant said that both the plaintiff and the defendant agreed by paragraph 4 of Exhibit KN.3 in support of the writ that chargeable interest should be based on agreement but the plaintiff unilaterally charges interest and other bank charges without any agreement but the plaintiff unilaterally charges interest and other bank charges without any agreement reached with the defendant”.

The learned trial judge then construed Exh. KN.3 which the appellant alleged that governed the transaction between the parties and came to the conclusion that there was no merit in the notice of intention to defend file by the appellant to transfer the matter into the general cause list, as the affidavit in support of the notice does not disclose a defence to the action. The suit was then heard as an Undefended Suit and judgment was given in accordance with Order 23(4) of the Rules. – See pages 24 to 33 of the record of appeal.

The appellant was imploring the trial court to transfer the cause to the general cause list, according to the appellant, because there were conflicts between the affidavit in support o the summons and the affidavit of intention to defend. The case of the respondent was based on Exhibits KN. 3. A close and analytical reading together of the affidavit in support of the summons filed by the respondent and the affidavits in support of notice of intention to defend filed by the appellant clearly shows that the appellant did not join issues with the respondent on the respondent’s Exhibits KN.1 and KN.3 which is the appellant’s statement of account with the respondent and the overdraft facilities in the sum of N1m (One Million Naira). He did not say how much exactly he was owing to contradict the amount stated in Exhibit KN.1, h did not state in his affidavits how much interest or other charges the respondent ought to have charged as opposed to what he now charged. Furthermore, the appellant did not deny the agreement entered into by the parties – Exhibit KN.3; indeed, he admitted Exhibit KN.3 as the agreement governing the transaction between the parties. In that regard, I think no further evidence was necessary for the learned trial judge to resolve the issues raised by the parties.

The complaint of the appellant is that the respondent unilaterally and arbitrarily charged interest and other bank charges and commission without the appellant’s consent. The issue as to whether the respondent has power to charge the interests and other bank charges as it did cannot be resolved by oral evidence which the appellant requested for. The issue can only be and must only be resolved by close examination of the written agreement, Exhibit KN.3, between the parties. Oral evidence is not admissible to vary, subtract from or contradict the terms of Exhibit KN.3 with respect to the powers of the respondent to charge interest and other bank charges in respect of the overdraft facilities between the parties. – See UBN Ltd. v. SAX (Nig.) Ltd. (Supra) 164-165.

From the totality of the evidence before the trial court, it seems to me that the trial court only followed the procedure under Order 23 of the Kano State High Court (Civil Procedure) Rules 1988 as should be followed; and by virtue of the combined provisions of Order 23 Rules 3 and 3(1) of the Rules, a defendant is given an opportunity of being heard. Indeed the appellant took advantage of Order 23(3)(1) after he has been served with the summons by filing notice of intention to defend in accordance with the Rules.

In conclusion I am of the view that the appeal is unmeritorious and should be dismissed. I therefore dismiss the appeal and affirm the judgment of the trial court dated 10th day of May, 1999. The appellant shall pay costs of N5, 000 (Five Thousand) to the respondent.

Nigerian Cases Referred to in the Judgment:

Adigun v. Attorney-General of Oyo State (1987) 1 NWLR (Pt. 53) 678

Deduwa v. Okorodudu (1976) 9 – 10 SC. 329.

REUBEN N. A. EKWUNIFE V. WAYNE (WEST AFRICA) LIMITED (1989)

5 NWLR (Pt. 122) 422,

Fuagol Instrument Ltd. v. N.B.N. Ltd. (1993) 1 NWLR (Pt. 271) 586

J.E. OSHEVIRE Ltd. Tripoli Motors (1997) 5 NWLR (Pt. 503) 1.

Koteye v. CBN (1989) 1 NWLR (Pt. 98) 419;

National Bank v. Are Brothers (1977) 6. SC 97;

Olaloye v. Balogun (1990) 5 NWLR (Pt. 148) 24;

Oyenuga v. The Provisional Council of the University of Ife (1965) NMLR 9

Pharmacists Board v. Adebesin (1978) 5 SC 434.

Rickett v. B.W.A. Ltd (1960) SCNLR 227

Solicitor-General, Western Nigeria, Adebonojo (1971) 1, All NLR 178.

U.B.N. Ltd. v. Sax (Nig.) Ltd. (1994) 8 NWLR (PT. 361) 150

U.B.N. LTD. v. Sax (Nig. ) Ltd. (1991) 7 NWLR (Pt. 202) 227

U.B.N.L TD. V. Ozigi (1994) 1 nwlr (Pt. 333) 385

Udo – Akagha v. Paico Ltd. (1993) 4 NWLR (Pt. 288) 434.