3PLR – MASTER HOLDING (NIG) LIMITED & ANOR V. EMEKA OKEFIENA

POLICY, PRACTICE AND PUBLISHING, 3PLR, LAW REPORTS

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MASTER HOLDING (NIG) LIMITED & ANOR

V.

EMEKA OKEFIENA

IN THE COURT OF APPEAL OF NIGERIA

ON TUESDAY, THE 14TH DAY OF DECEMBER, 2010

CA/E/328/2009

3PLR/2010/43(SC)

 

OTHER CITATIONS

 

BEFORE THEIR LORDSHIPS

AMINA ADAMU AUGIE, JCA

ABDU ABOKI, JCA

SAMUEL CHUKWUDUMEBI OSEJI, JCA

 

BETWEEN

1. MASTER HOLDING (NIG) LIMITED
2. CHIEF ANAYO NWANDU – Appellant(s)

 

AND

EMEKA OKEFIENA – Respondent(s)

 

REPRESENTATION

O.I.E. Onukwuli – For Appellant

 

AND

E.N. Onyibor – For Respondent

 

ORIGINATING COURT

Enugu State: High Court (L.O. Okereke J- Presiding)

 

CONNECTED AREAS OF PRACTICE

1. Debtor- Creditor Law

 

MAIN ISSUES

 

1. APPEAL – whether an appellate court can review costs awarded by the lower court

 

2. BANKING LAW – AWARD OF INTEREST ON BANK FACILITIES/LOANS- when interest is not payable or recoverable -when a court has the power to award interest -basis for award of interest –duty of customer to pay interest to the Bank-proper practice where interest is being claimed as of right

 

3. PRACTICE AND PROCEDURE- JUDGMENT AND ORDER –essence of costs – principle guiding the award of costs -relevant considerations for the award of costs –whether court can award to a claimant what he did not claim or prove- whether a correct decision is affected by wrong reasons given in the judgment

 

MAIN JUDGMENT

ABDU ABOKI, J.C.A. (Delivering the Leading Judgment):

This is an appeal against the judgment of L.O. Okereke J. of the Enugu State High Court Enugu, delivered on the 29th day of July, 2009.

The brief facts of the case is that the Plaintiff/Respondent supplied pieces of timber worth N1,120,010.00 to the Defendants/Appellants of which they paid only N401,500.00 leaving a balance of N719,5 10.00 they refused to pay despite several demands. The Defendants/Appellants made spirited overtures to effect out-of-court settlement but yielded no positive result.

 

The Plaintiff/Respondent therefore took out a Writ of Summons under the summary judgment (the undefended list) procedure. The Defendants/Appellants filed ‘A Notice of Intention’ to defend the suit’ with an affidavit setting out the grounds of their defence.

 

The court after going through the documents filed by the parties transferred the case to the general cause list and directed that pleadings be filed and exchanged. After exchange of pleadings, the court heard argument of counsel and adjourned for judgment.

 

The court delivered its judgment in favour of the Plaintiff/Respondent thus:-

‘The judgment of the court is summarized as follows:-

 

1. ‘The plaintiff is entitled to the sum of N719,510.00 from the defendants being the balance of the N1,120.010,00.00 the defendants give the plaintiff for the timber he supplied them.

 

2. The plaintiff is equally entitled to 25% interest per annum on the sum of N719,510,00 from 1st June, 2006 till toady the judgment is delivered.

 

3. Special damages of N165.000.00 as well as general damages of one million naira for breach of contract fare and is dismissed.

 

Court: ‘The plaintiff is awarded the list of N20,000.00 for this litigation. At the request of the defendants the debt is to be liquidated on or before 60 days from the day of the judgment’.

 

The defendant dissatisfied with the 2nd award and the costs awarded to the plaintiff appealed against the judgment to this court.

 

Learned counsel for the Appellant O.I.E. Onukwuli Esq. adopted and relied on the appellant’s brief filed on 15/10/09 as the appellants’ argument in this appeal.

 

E.N. Onyibor, learned counsel for the Respondent also adopted and relied on the brief of argument dated and filed 28/9/2010 as the Respondent argument in this appeal.

 

The Appellant distilled two issues for determination and they read as follows:-

 

1. Whether the trial court was right in granting the Respondent a pre-judgment interest of 25% in utter disregard of the decision of the Apex Court in these suits.

 

(a)     Ekwunife v. Wayne (W.A) Ltd. (1989) 5 NWLR Pt. 122 at 422 or (1989) 12 SCNJ 99.

 

(b)     Himma Merchants Ltd. v. Aliyu (1994) 5 NWLR pt. 47 Page 667 or (1994) 6 SCNJ 87.

 

2. Whether the trial court exercised its discretion properly in awarding whooping costs of N20,000.00 against the defendants.

 

The Respondent formulated only one issue for determination and it reads:-

‘Whether the trial court was not right in awarding the Respondent a pre-judgment interest on the sum claimed and cost of N20,000.00 as cost of litigation’.

 

Learned counsel for the Respondent argued that issue 2 formulated by the Appellants is not based on any ground of appeal. He urged the court to discountenance the whole argument on the issue.

 

The Appellant on page 1, paragraph 1.04 of their brief of argument said the appeal is based upon (3) three grounds but that ground 1 is abandoned.

ISSUE ONE:

 

‘Whether the trial court was right in granting the Respondent a pre-judgment interest of 25% in ulter disregard of the decisions of the Apex Court in these suits’.

 

(a)     Ekwunife v. Wayne (W.A.) Limited (1989) 5 NWLR pt. 122 page 422 or (1989) 12 SCNJ 99.

(b)     Himma Merchants Ltd. v. Aliyu (1994) 5 NWLR pt. 47 page 667 or (1994) 6 SCNJ 87′.

 

Learned counsel for the Appellant submitted that the trial court was totally wrong in allowing pre-judgment interest of 25% to the plaintiff.
He argued that the interest claimed and granted does not conform with the ways by which a claim of interest can arise in our law. He contended that there are legally two ways by which interest on a sum of money claimed as a debt can arise namely:-

 

(a)     as of right and

(b)     where there is a power conferred by statute to do so in the exercise of the courts discretion.

 

Learned counsel argued that there is no evidence whatsoever, that the claim is founded upon any, mercantile custom or trade agreement known to the parties and or any agreement between the parties which ante-dates the judgment delivered on 29th July, 2009. The interest of 25% under contention is without foundation and ought not to be allowed or granted. He referred the court to the case of Himma Merchants Ltd. v. Aliyu (1994) 6 SCNJ 87,

Learned counsel submitted that where interest is being claimed as a matter of right, the proper practice is to claim the entitlement to it on the writ and plead the relevant facts which showed such an entitlement in the statement of claim. He argued that this was not done nor was any evidence led to that effect. He referred the court to the cases of Ekwunife v. Wayne (W.A) Ltd (supra) and Himma Merchants Ltd. v. Aliyu (supra).

 

Learned counsel submitted that the position of the law is that the best method of satisfying a court about the existence of any matter is by adducing credible, sufficient, and satisfactory evidence about it.

 

He argued that in the instant case, there is no evidence whatsoever about the rate of interest agreed upon by the parties and the basis upon which it is computed.

 

He maintained that there is not even a piece of paper from the Bank, UBA, to confirm any transaction between the respondent and the Bank which could have confirmed the amount borrowed, the interest rate and the date of borrowing.
He urged the court not to uphold the decision of the trial court and to set same aside.

 

Learned counsel argued that the power to award interest is both statutory and at common law.

 

He maintained that having shown that the plaintiff is not entitled to his claim of 25% which ante-dated the date of judgment at common law. He argued that the statute ought to be looked at to ascertain whether there is a saving grace.
He referred the court to order 35, rule 4 of the High Court Rules of Enugu, 2006. Which he submitted represents the statutory position and empowers the court on delivering judgment in an action for contract or damages for tort to award interest at the rate of not less than 10% from the date of the judgment.
Learned counsel urged the court to uphold and adopt the Apex Court’s statement and decree that the trial court has no jurisdiction under the rule to award interest from the date of the accrual of cause of action, or from a date ante dating the judgment, since it has also been shown that no question of claim of interest as a right arose in the proceedings.

 

In their argument, on the first issue for determination, learned counsel for the Respondent argued that the learned trial judge had a full grasp of the case and did appropriately apply the law to the facts laid down before him. Learned counsel argued that the interest claimed and facts justifying same were copiously pleaded in the Plaintiffs’/Respondents’ Statement of Claim dated 26/2/07.

 

He referred the court to paragraphs 6, 7, 8, 11, 18E and 19B of the Statement of Claim in which he insisted that the pre-judgment interest were copiously and clearly pleaded contrary to the contention of the appellants’ counsel.

 

On whether evidence was led at the trial on the pre-judgment interest. Learned counsel referred the court to the plaintiff s statement on oath in line with the High Court Rules of Enugu State 2006.
Order 3 rule 2(1).

 

He argued that the plaintiffs evidence in-chief was encapsulated in his statement on oath at pages 60 – 64 of the Record of Appeal and duly adopted in the lower court as the evidence of the plaintiff in chief on 14/1/08 at page 109 of the Record of Appeal.

 

Learned counsel for the Respondent referred the court to paragraphs 23, 26 and 27 of the said statement on oath.

 

He argued that it is pertinent to note that in his cross-examination of the plaintiff which is at page 110 – 114, learned counsel for the Appellant never asked the plaintiff even a single question on the issue of the prejudgment interest suggesting that the evidence led in chief by the respondent on the matter was accepted as true.

 

Learned counsel for the Respondent referred to the judgment of the trial court at page 171 and 172 of the Record of Appeal as well as the case of Ekwunife v. Wayne (W.A) Ltd. (1995) 5 NWLR pt. 122 page 422 at 428, where the apex court held that “interest may be claimed as of right where it is contemplated by the agreement between the parties or under mercantile custom or under a principle of equity.

 

Learned counsel maintained that in the instant case, it is contemplated in the parties contract that interest shall be paid to the Respondent since he had borrowed fund from the bank to finance the supply of timber to the Appellant. He argued that it is common and or a universal knowledge that bank facilitates or loans do not come free, while it is part of the duties of a bank to grant credit facilities to a customer, the customer is also bound to pay interest to the Bank. He referred the court to the case of S.T.B. Ltd. v. Inter Drill Nig. Ltd. (2007) All FWLR pt. 366 page 756 at 761.

 

Learned counsel referred to the pleadings of the plaintiff in paragraph 17 of the Statement of Claim and the reply of the defendants in paragraph 20 of the Statement of Defence. It was contended on behalf of the Respondent that if the appellants expect the Respondent to know that the Diamond Bank plc. was financing the project, why would they not also know that he, the Respondent was also financing his own supplies to them through bank finance.
Learned counsel argued that the appellants would not therefore expect that the bank loan which the Respondent got from the bank with which to finance the supply was free. He contended that it is therefore correct to state that the interest was contemplated by the agreement between the parties or under mercantile custom between the parties. Learned counsel maintained that the learned trial judge was justified in finding as he did at page 171 of the Record of Appeal and supported by the decision of the Apex court in Ekwunife v. Wayne (W.A.) Ltd. (supra).

 

It is trite law that a court cannot award to a claimant what he did not claim and or prove. Thus a party who claims interest on a sum of money has an obligation to support his claim. See Balogun v. E.O.C.B. (Nig) Ltd. (2007) 5 NWLR pt. 1028 Page 584.

 

A court has the power to award interest in two distinct circumstances.:-

 

(a)     as of right, and

 

(b)     where there is power conferred by statute to do so, in exercise of the courts discretion.

 

Interest may be claimed as of right where it is contemplated by the agreement between the parties or under a mercantile custom, or under a principle of equity, such as where there is a breach of a fiduciary relationship. See Balogun v. E.O.C.B (Nig,). Ltd. (supra). I.T.B. Plc. v. K.H.C. Ltd. (2006) 3 NWLR pt.968 page 443.

 

Texaco Overseas (Nig.) Unltd. V. Pedmur (2002) 13 NWLR pt.785 page 526.

Where interest is being claimed as of right, the proper practice is to claim entitlement to it on the writ of summons and plead facts which shows such an entitlement in the statement of claim. However, since the Statement of Claim supersedes the writ of summons, even if interest is not claimed on the writ of summons, but facts are pleaded in the Statement of claim and evidence led showed entitlement to the interest claimed, the court has a discretion to award interest, if satisfied with the evidence presented by the claimant. See I.T.B. Plc. v. K.H.C. Ltd. (supra)- Daniel Holding Ltd. v. UBA Plc. (2005) 13 NWLR pt.943 page 533. R.C.C. (Nig.) Ltd. v. R.P.C. Ltd. (2005) 10 NWLR pt.934 page 615. Texaco Overseas (Nig) Unltd. v. Pedmar (supra).

 

In the instant case, the Plaintiff/Respondent averred on paragraph 5, 6, 7, 8, 11 and 19(A) (B) of the statement of claim at pages 56 – 73 of the Record of Appeal Thus:-

 

5. That it had been argued between the parties that payments for supplies of the timber and hardwood must be effected within 30 days of the delivery of any consignment of the goods to the defendants.

 

6. The plaintiff who had heard of the defendants reputation or notoriety for owing suppliers had raised the issue with them and brought it to their information that he was raising a loan facility from his bank, the UBA Plc at the rate of 25% per annum to facilitate the due performance of the contract, they had re-assured him that they would pay him promptly

 

7. Hand on plough, the plaintiff after raising money from his Bank (supra) supplied the timber to the defendants without any delay.

 

11. Till date, more than I year after some of the supplies had been made, they have paid only N401,500.00 of the debt after several visits the plaintiff had made to them at Enugu for the money number at least 30.

 

19. Wherefore the plaintiff claims from the defendants as follows:-

 

(A)     N719,510.00 being the balance of the debt the defendant still owe the plaintiff for the supply of timber he had made to them between January and May 2006.

 

(B)     Interest on the above sum at the rate of 25% per annum from 1/6/2006 till the court delivers judgment in the matter’.

 

In a written statement on oath in support of the averment in the statement of claim. The Plaintiff/Respondent stated in paragraphs 4,8,9, 23,25, 26,27 and 28 at pages 60 – 64 of the Record of Appeal as follows:-

 

‘4.      That they had issued several LPO (local purchase orders) to me for the supply of the timber, it was agreed by the parties and also stated on the face of the (LPO’s) that from each consignment or supply of timber, I made to them, the defendants shall pay me fully within 30 days from the date of their taking delivery of the same.

 

‘8.      I had been warned that the defendants were notorious for owing suppliers money after receiving supplies, I had raised that issue with the defendants earlier on but they had re-assured me that my payments were to be prompt and as due:’

 

‘9.      That the defendants have till date paid me only the sum of N401,5000.00 of the total sum of N1,120,010.00 for the supplies leaving out a balance of N719,510.00 unpaid till date’.

 

’23.    That I had declared to the defendant that I secured a bank loan from the UBA plc with which I had purchased the timber in the first place. I had, also declared to them that I pay interest at the rate of 25% in the fund till date.

 

25. That the defendants had committed a breach of our contract by failing to pay me for the limber I supplied to them within 30 days stipulated in the LPO’s/ invoices or as agreed by as’.

 

’26.    That I have incurred heavy damages as a result of their failure since I could not make any mote turn over, my fund has been tied with them, my interest payable to my Bank has kept on mounting and I cannot even meet my financial obligation to my immediate family’-

 

’27.    I urge the court to make an order compelling the defendants to pay me the balance of N719,510.00 being the amount still left unpaid of the timber I supplied to the defendant, interest on the said amount at the rate of 25% per annum counting from 1/6/2006 till judgment is delivered in this matter.

 

’28.    That I depose to this oath in good faith, believing same to be true and in accordance with the oath Act 1990′.

In response to the claim of the Plaintiff/Respondent above, the Defendants/Appellants averred in their statement of defence at page 75 of the Record particularly paragraphs 9 and 10 thus:

 

‘9.      In further reaction to paragraphs 6 and 7 the defendant aver that the plaintiff did not dismiss his financial problems with any staff of the company, the 1st defendant or with the 2nd defendant.

 

’10.    On the same paragraph 6, the defendants aver that if the plaintiff had that type of financial commitment and brought the same to the notice of the defendant, he would not have waited until 24/3/2006 and 6/6/2006 for payment without making any demand.

 

23(b)           The plaintiff is not entitled to interest at the rate of 25% or to any interest at all. Since bank interest was not in contemplation when the local purchase order were issued. Besides, the plaintiff breached the contract by supplying pieces of timber of low quality and not fit the purpose’.

 

The Defendants/Appellants state in paragraph 23 (11) on Oath at page 83 of the Record of Appeal thus:-

 

23(1) ………………………….

 

(ii)     The plaintiff is not entitled to any interest on the amount yet to be paid to him. Interest on loan/overdraft was not in contemplation when the Local purchase order (L.P.O.) were issued to him. He did not disclose to and never told staff of the 1st defendant nor its Chairman/Managing Director that he borrowed or would borrow from U.B.A. Plc or any bank at all to finance the supply of timber”

 

I am satisfied from the averment in the pleadings the statement on oath reproduced above that it could be inferred that interest on the debt owed the Plaintiff/Respondent was contemplated. If the Defendants/Appellants default in paying the Plaintiff/Respondent within 30 days, his money for the timber supplied to them, since the Plaintiff/Respondent had borrowed fund from the bank to finance the supply of the timber, he had supplied the Defendants/Appellants. It is common knowledge that bank facilities or loans do not come free, while it is the business of a bank to grant credit facilities to a customer, the customer is also bound to pay interest to the Bank. See STB Ltd. v. Inter Drill Nigeria Ltd. (2007) All FWLR pt.366 page 756 at 761.
The Defendants/Appellants would not therefore expect that the loan the Plaintiff/Respondent got from the bank to finance the supply of timber to them was for free.

 

The basis for award of interest could be the fact that the plaintiff has been kept out of his money for a period and the Defendant who had use of the money for himself ought to compensate the plaintiff for the deprivation.

 

See International Offshore Construction Ltd. v S.I.N Ltd. (2003) 16 NWLR pt.845 page 157.
Kano Textile Printers Plc. v. Tukur (1999) 2 NWLR pt.589 page 78.
Habib Nig. Bank Ltd. v. Ochete (2001) 3 NWLR pt.699 page 114.

 

I agree with the finding of the lower court when it said in its judgment on page 171 of the Record of Appeal, as follows:-

 

‘On the issue of interest on this debt, this court infers from the dealing between the parties that the plaintiff is entitled to an interest on this debt. In the circumstances, the plaintiffs claim in paragraph 19(b) of his statement of claim succeeds” The Defendants/Appellants have not made out any good showing in their brief of argument to warrant this court to set aside the finding of the lower court on the issue of 25% interest on the sum of N719,510.00 being the unpaid balance for the timber supplied to them by the Plaintiff/Respondent.

 

This issue is resolved in favour of the Respondent.

 

ISSUE TWO:

 

‘Whether the trial court exercised its discretion properly in awarding whooping costs of N20,000.00 against the defendants?

 

It was submitted on behalf of the Appellants that the award of N20,000.00 costs against the defendants was indisputably on the higher side, and contrary to the long established direction/advice of the appellate courts to the trial court to always give reasons for their judgments since they know that such judgments are subject to review. It was argued that the trial court ignored the subsisting order/advice and gave no reasons for making such an outrageous award in exercise of its discretionary powers. Learned counsel for the Appellant contended that the trial of the matter and the amount of the preparatory work in it did not justify the quantum of the award. He argued that any delay in the determination of the case was not caused by the defendants alone but by both parties as well as the exigencies of court duties and that there was no reason for the excessive costs.

 

Learned counsel maintained that there are well known and generally accepted principles of law that costs follow event and that the successful party is entitled to costs. He argued that, costs are given as indemnity to the party entitled to them and not as a punishment on the party paying, but to compensate the successful party for part of the express which he incurred by having to come to court. He insisted that the costs to be awarded being at the discretion of the trial court, such discretion should be exercised judicially and judiciously otherwise it will be capricious and tyrannous as in the instant case. Learned counsel argued that the amount of cost awarded is not meant to unjustly enrich the winning party, who also has a duty to mitigate his losses. He referred the court to the cases of U.B.N. Limited v. Nwaokolo (1995) 4 SCNJ 93.

Agidigbi v. Agidigbi (1996) 6 SCNJ 105.
Akinbobola v. Puson Fisko Nig. Ltd. (1991) 5 SCNJ 129.

 

Learned counsel argued that if the plaintiff had co-operated with the defendants as per their letters to him (pages 86 and 87), there would not have been any need to go to court at all. He maintained that it is in both the Statement of Defence and the defendants’ sworn evidence that the General Manager (DW1 herein) called at the chambers of the plaintiff s counsel in a move to exploit an out of court settlement but the counsel did not co-operate with him. He submitted that it is trite law that the plaintiff has a duty to mitigate his losses.
Learned counsel for the Appellants maintained that it is quite clear from their submission that the trial court exercised its discretionary powers without fully considering the circumstances of the cases that led to miscarriage of justice.
Learned counsel submitted that the principle is well established that in order to justify reversing a trial court on the amount of costs awarded, the appellate court should be satisfied and convinced either.

 

1. that the trial court acted upon some wrong principles of law, or

 

2. that the amount awarded was so extremely high and extravagant, or so very small and paltry as to make it appear in the opinion of the appellate court an entirely erroneous estimate of the damage to which the plaintiff is entitled.

He cited the cases of Imah v. Okogbe (1993) 12 SCNJ 57 at 80. Ukwu v. Bunge (1997) 7 SCNJ 262 at 271.

 

Learned counsel urged the court to hold that the trial court acted on wrong principles and thereby awarded extremely excessive extravagant and unwarranted costs of N20,000.00. He argued that the discretionary power was not exercised judicially and judiciously. Learned counsel urged the court to reverse and reduce the costs awarded to a tolerable amount. He submitted that the exercise of judicial discretion must accord with common sense and justice. He referred the court on this point to the case of Odusote v.  (1991) NMLR 228.
Learned counsel for the Appellants submitted that it is an established principle of law that court ought to remain an impartial arbiter between parties in the exercise of judicial discretion and that it should not be utilized in granting indulgence to a party. He cited the case of Willoughby v. International Merchant Bank Nig. Ltd. (1957) 1 SCNJ 46.

 

Learned counsel argued that it is in the interest of justice to interfere with the trial courts exercise of judicial discretion in the instant case. He urged the court to resolve this issue in favour of the Appellant. On the issue of costs, learned counsel for the Respondent submitted that the position of the law is that costs follows events, and that the successful party should not be deprived of his costs unless for good reasons. He referred the court to the case of Seaby v. Olaogun (1999) 10 – 12 SC 46 at 59.

 

Learned counsel maintained that the Respondent had before commencing the action taken his time to see if the matter would be resolved without litigation in his letter to the appellants on the matter in December 2006, the Respondent had recounted the countless number of times he had visited Enugu from Onitsha at great cost to himself by way of transportation fares etc, he also made an impassionate pleas to the appellants to remember that he was only but a beginner in business and had borrowed funds from the Bank to be able to make the supplies.

 

Learned counsel maintained that despite all these, the appellants never paid the money. He also maintained that the case had been called upon in court for  about 35 times and out of which the Respondent had attended court for more than 25 times from Onitsha and in most of the times, the appellants hardly attend court. Learned counsel referred the court to pages 93, 101, 108, 109, 114, 115, 116 and 128 of the Record of Appeal. He argued that a careful consideration of these pages of the Record of Appeal will show that only the Respondent who was attending court from Onitsha was present in court in all the days the matter was called up at the court below.

 

Learned counsel for the Respondent submitted that the lower court award of cost to him is in accordance with the law as stated by the Supreme Court in Seaby v. Olaogun (supra), that costs follow events.

 

He urged the court to so hold and to dismiss this Appeal.

 

The position of the law is that costs follow events and a successful party should not be deprived of his costs unless for good reasons. See Seaby v. Olaogun (1999) 10 -12SC page 45 at 59. Worno v. U.A.C. Ltd. (1956) 1 FSC 33 at 34. Biode Pharmacuetical Ltd V. Adsell Ltd. (1956) 5 NWLR 1070.

 

The essence of costs is to compensate the successful party for part of the loss incurred in the litigation. Costs cannot cure all the financial loss sustained in the litigation. It is also not meant to be a bonus to the successful party. And not to be awarded on sentiments. See UBN Ltd. v. Nwaokolo (1995) 4 Kings Law Report (KLR) 919.

 

The costs awarded are meant to have some cushioning or palliative effect on the financial burdens of the party in victory. See Reg. Trustees of Ifejolu v. Kuku (1991) 5 NWLR pt.189 page 65.

 

In F.A. Akinbobola v. Plisson Fisko Nigeria Ltd & ors. (1991) 1 SCNJ 129 at 133.
Kawu JSC said:-

 

‘The award of costs is of course, always at the discretion of the court which discretion must be exercised both judicially and judiciously – Haco Ltd. v. S.M. Daps Brown (1973) 2 SC 14.

 

It is also a well established principle that costs follow events and that a successful party is entitled to cost unless there are special reasons for depriving him of his entitlement – Adenanya v. Governor-in-General (1962) 1 All NLR 308’.
Karibi – Whyte JSC said at Page 141:-

 

‘It is argued and rightly too, that although the question of award of costs is discretionary, the exercise of the discretion is judicial and on recognized principles- See Halco Ltd. v. S.M. Daps Brown (1973) 4 SC 140.
Generally accepted on very exceptional circumstances for depriving him of his entitlement’ which must be indicated by the judge, a successful party to a litigation is entitled to the costs of the action – Adenanya v. Governor-in-General (1962) 1 All NLR 308.’

On whether an appellate court can review costs awarded by the lower court.
The Supreme Court said in the case of Leonard Okoye & Ors. v Nigeria construction and furniture co, Ltd. & ors, (1991) 7 SCNJ (PT 11) page 365 at 389. Per Akpata JSC :-

 

‘An Appeal Court has competence to review the costs awarded in the lower or trial court only where the appellant who was the loser in the lower court or trial court succeeds in his appeal. In that event, the costs awarded against his will, invariably, of necessity be set aside an order as to costs in the lower or trial court is made in his favour. This is because the losing party in the court below who win son appeal is entitled to be indemnified, that is, to have his usual remedy in costs in the Appeal Court and in the court below where he ought to have succeeded in the first place.

 

An Appeal Court is competent to review the costs where the successful party in the lower court cross-appealed against a part of the judgment and succeeded’.
I am of the opinion that an appellate court upon a submission by an aggrieved party can review an award of costs where amount awarded was extremely high and extravagant or too small and paltry and does not reflect the proper or correct estimate of what a successful party should be entitled to from the circumstance of the case.

 

However, the amount of costs awarded is not meant to unjustly enrich the winning who also has a duty to mitigate his losses. See UBN Limited v. Nwaokolo (1995) 4 SCNJ 93. Agidigbi v. Agidigbi (1996) 6 SCNJ 105. Akinbobola v. Elison Fisko Nig. Ltd. (supra).

 

In the instant case, The Respondent was in court for 25 out of the 35 times the matter was called at the lower court. The Respondent had to come all the way from onitsha to attend to court at Enugu and at great cost to himself by way of transportation.

 

It is common knowledge that litigants incurred expenses in terms of filing fees and money for services of court processes.

 

On the principle guiding the award of costs this court said in the case of Buhari v. obasanjo (2005) 2 NWLR pt.910 page 241 at 602.
Per Nsofor J.C.A.:

 

‘Costs are not imposed as a punishment on the party who pays them nor are they awarded as bonus to the party who received them. No. See P.O.S. Olasope v. National Bank of Nigeria & Anor. (1985) 3 NWLR( PT. 11) 147. The party entitled should only be indemnified for his out of pocket expenses and be compensated for the time and fair expenses for the litigation.
Therefore I have taken into consideration’ inter alia, the length of the trial – almost two (2) years – and the number of appearances. See. Harold v. Smith (1957) All ER 1229, 1231′.

In the instant case, I have carefully examined the court process filed by the Respondent in this suit and there are quite a number of them in the Record of Appeal. There is evidence on these court process that filing fees have been paid. It is on record that in the course of hearing of this suit, the lower court had awarded cost in favour of the Respondent to compensate certain lapses of the Appellants. The Respondent as the successful party at the lower court is entitled to be indemnified for part of the expenses he incurred in prosecuting this suit.
It is part of the complaint of the appellants in this appeal that the lower court did not give reasons for making such outrageous award in exercise of its discretionary powers as it was enjoined to do by the appellate courts.

 

I am of the opinion that where a correct decision is arrived at in the eyes of the law, the fact that insufficient or even a wrong reason was given for such decision is of no moment. I find support for this opinion in the Supreme court’s decision in Lebite v. The Registered Trustees of Cherubim and Seraphim Church of Zion of Nigeria, (Igbonla & Ors. (2003) 2 NWLR pt. 804 page 399 at 422 – 423.
Per Uwaifo JSC:

 

“It does not matter that the court below may not have gone into the available details of circumstances which, put together and considered, must lead to the conclusion that the plaintiff’s claim was properly dismissed.

 

It is in law enough that it reached the right decision as I consider it should. In other words, if the conclusion reached by the court below is correct, that cannot be affected by the fact that it was arrived at on insufficient or even some wrong reasons. See Ukejianya v. Uchendu (1950) 13 WACA 45 at 46. Ayeri v. Sowemimo (1982) 5 SC 60 at 74 – 75. , Abaye v. Ofolu (1986) 1 NWLR pt. 15 page 134 (1956) 17 NSCC (pt.1) 94 at 133.

 

In the instant case, the lower court was right in awarding costs.

 

I am of the opinion that the costs of N20,000.00 awarded by the lower court against the Appellant is not excessive. This issue is also resolved in favour of the Respondent.

 

There is no merit in this appeal and it is hereby dismissed.

N20,000.00 cost is hereby awarded in favour of the respondent.

AMINA A. AUGIE, J.C.A.:

 

I have read in draft the lead Judgment just delivered by my learned brother, Aboki, JCA, and I agree with him that the appeal lacks merit.

 

It is true that the mere fact that a sum of money is substantial is not enough to justify award of interest in it. The general rule is that interest is not payable or recoverable at common Law on ordinary debt in the absence of the following situations: (a) contract, express or implied; or (b) some mercantile usage; or (c) provision by statute. However, following the decision of the Supreme court in Petgas Res. Ltd. v. Mbanefo (2007) 6 NWLR (Pt. 103 1) 545, I must say that the lower Court was right when it awarded interest in favour of the Respondent in that the Appellants kept him of the money due to him, and more or less had use of it to themselves, so they ought to compensate him accordingly.

 

It is for this and other reasons in the lead Judgment that I dismiss the appeal. I also abide by the consequential orders in it including costs.

SAMUEL CHUKWUDUMEBI OSEJI, J.C.A.:

 

I have had the advantage of reading in draft, the judgment just delivered by my learned brother ABDU ABOKI, J.C.A. and will state briefly on the issue of cost that in civil trials, the award of costs is discretionary. Where a trial court exercises its discretion in a proper manner, that is to say, acts judicially and judiciously the appellate court will be reluctant to question such exercise of discretion. See REAN LTD VS ASWANI TEXTTLES LTD. (1992) 3 NWLR (Pt 227) 1, and NICON INSURANCE CORPORATION (2006) 5 NWLR (Pt.973) 625. In ADELAKUN v. ORUKU (2006) 11 NWLR (Pt.992) 625 at 650. The Lagos Division of this Court per Salami JCA (as he then was) listed the relevant considerations for the award of costs as follows:-

 

(a)     the summons fees paid;

 

(b)     the duration of the case;

 

(c)     he number of witnesses called by the party in victory;

 

(d)     the vexations or frivolous nature of the action or defence of the party who failed in the litigation;

 

(e)     the cost of legal representation

 

(f)      the monetary value at the time of incurring the expenses, and;

 

(g)     the value and purchasing power of the currency of award at the time of the award.

 

Now given the circumstances of this case particularly the conduct of the appellants with respect to the money owed, the number of appearances in the trial court which the Respondent put at about 35 times (and he goes from Onitsha to Enugu to attend court). Legal fees for counsel representation as well as cost of filing the processes from the undefended suit to the exchange of pleadings as ordered by the trial court. I am convinced that the award by the trial court of a cost of N20,000 is not outrageous.

 

For this and the fuller reason given by my learned brother in the lead judgment, I also dismiss this appeal for lack of merit and I also abide by the order as to costs.