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Nigeria Deposit Insurance Corporation (2011) LLJR-SC

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Bilante International Ltd. V. Nigeria Deposit Insurance Corporation (2011)

LLJR-SC

June 6, 2023

Editor

Bilante International Ltd. V. Nigeria Deposit Insurance Corporation (2011)

LAWGLOBAL HUB Lead Judgment Report

JOHN AFOLABI FABIYI, J.S.C.

The appellant/cross-respondent herein was the plaintiff in the High Court

of Enugu State. It claimed the sum of N95,684,741.57 as special and
general damages for breach of contract to lend money for its road
construction project. The respondent/cross-appellant filed a counter-claim
thereat for outstanding and unpaid overdrafts made to the appellant
amounting to N13,050,002.79 as at 29th February, 1992. The trial court
awarded the sum of N75,684,741.57 damages against the defendant. It
also dismissed the defendant’s counter-claim.

The defendant appealed to the court of Appeal, Enugu Division (“the court
below” for short) against the whole judgment. The court below set aside
the judgment of the trial court on 13th January, 1997 in respect of the
stated damages awarded. However, it upheld the dismissal of the counter-
claim by the trial court.

Both sides have appealed to this court. The plaintiff filed the main appeal
while the defendant cross- appealed.

On 21st March, 2011 when the appeal was heard, learned counsel for the
appellant moved an application filed on 2nd June, 2010 to substitute
Nigeria Deposit Insurance Corporation for the respondent on record. There
was no objection raised and same was granted. Thereafter, learned
counsel on both sides adopted briefs of argument as exchanged and filed
on behalf of the parties.

On page 4 of the appellants’ brief four (4) issues were couched for
determination of the appeal. They read as follows:-

“(1) Whether the Court of Appeal was competent to exercise jurisdiction in

respect of the respondent’s appeal.

(2) Whether, having regard to all the documentary evidence, the Court of
Appeal was right in holding that there is no contract between the parties
by which the respondent was to advance overdraft facilities to the
appellant for the execution of the road contracts during the twelve months
duration of those contracts.

(3) Whether the Court of Appeal was right in setting aside the judgment
given in favour of the appellant in respect of the ‘de-fixing’ of its fixed
deposit accounts.

(4) Whether the Court of Appeal was right in dismissing the entirety of the
appellant’s claim and setting aside the sum of N75,684,741.57 awarded in
the appellant’s favour by the High Court of Enugu State.”

On behalf of the respondent/cross-appellant, four (4) issues were decoded

in respect of the main appeal and two (2) issues in respect of the cross
appeal at pages 2-3 of the brief argument. They read as follows:-

“(1) Was the defendant’s appeal to the court below competent

(2) Was the court below right in holding that the plaintiff did not prove any
enforceable contract with the defendant as alleged in the statement of
claim

(3) What was the nature of the claim made in respect of the de-fixture of
the plaintiff’s fixed deposit

(4) Did the damages claimed by the plaintiff flow naturally from any
breach of contract

(5) Did the plaintiff in its defence to the counter-claim specifically deny
the fact of obtaining loans from the defendant

(7) (Sic; in reality (6)) Did the production by the plaintiff of the statement
of account supplied to it by the defendant which it did not dispute and
which showed an indebtedness not prove the debt owed”

MAIN APPEAL

Issue 1, put succinctly, is whether or not the defendant’s appeal to the

court below was competent. The appellant herein as respondent at the
court below canvassed this point relating to the competence of the appeal
with fervour. Much fuss was generated on same and there is a carry over
to this court.

The contention of the appellant is that there was no proper notice of

appeal before the court below to activate the hearing of the appeal
thereat. Notice of appeal dated 10th October, 1995 was filed to activate
the appeal at the court below by the respondent which compiled the
Records of Appeal. Leave of the court was sought for departure from the
Rules to use same for hearing the appeal. The application was granted on
22nd November, 1995.

On 8th January, 1996 the respondent herein as appellant at the court

below, filed another Notice of Appeal dated 5 th January, 1996 at the
Registry of the High Court; albeit, within the time permitted by the Rules
of court. The respondent, withdrew the earlier Notice of appeal filed by it
and relied on the later notice of appeal. The appellant is still contending,
as it did at the court below, that the later notice of appeal is incompetent
as the appeal had already been entered at the court below. It was
submitted that the case of Tukur v. Government of Gongola (1988) 1
NWLR (Pt. 68) 63 is distinguishable from the facts in this matter as the two
notices of appeal filed therein were filed before the appeal was entered.
Learned counsel urged that the appeal should be struck out for want of
competence.

Learned counsel for the respondent in this appeal contended that the
appeal at the court below was competent. It was observed that the
contention of the plaintiff in the court below was that the notice of appeal
dated 5th January, 1996 did not form part of the record of appeal as it
came into existence after the appeal was entered in the court below on
22nd November, 1995. It was further stressed that the plaintiff did not raise
any issue of notice of appeal having been filed out of time when it filed its
amended brief on 30th May, 1996.

There is no dispute on the point that the appeal at the court below was
heard upon the bundle of documents filed by the respondent sequel to the
leave granted by the court below on 22nd November, 1995. The 2nd notice
of appeal filed within time on 8th January, 1996 at the Registry of the High
Court was relied upon. The first notice of appeal was withdrawn in
consonance with the course approved by this court in Tukur v.
Government of Gongola State (supra). Therein, the issue that fell for
determination was whether an appellant can file two Notices of Appeal.
The answer is in the affirmative. But the appellant must choose which of
them he intends to rely upon. See: Iteshi Onwe v. The State (1975) 9 – 11
SC. 41.

It must be pointed out here that the appeal at the court below proceeded
upon the leave granted to depart from the Rules in the preparation of the
bundle of documents for the appeal. I am of the view that an entry of the
appeal was not, stricto sensu, made as envisaged by the provisions of
Order 9 Rule 13(1) of the Court of Appeal Rules 1981. The defendant as
appellant at the court below was at liberty to file all relevant documents
and have same duly brought to the attention of the court with the
opposing party duly served. The plaintiff as respondent at the court below
was duly served with the 2nd Notice of Appeal and its brief was filed with
reliance placed on it.

The stand point of the appellant on this issue borders on technicality. The
appeal before the court below was competent. The issue is resolved
against the appellant.

Issue 2 has to do with whether or not there was any enforceable contract
between the parties. In its real essence, the law of contract at this point
requires elucidation. Contract is defined as an agreement between two or
more persons which creates an obligation to do or not to do a particular
thing. Its essentials are competent parties, subject matter, a legal
consideration, mutuality of agreement and mutuality of obligation.
Lamoureu v. Burrillville Racing Ass’n 91 R.I 94, 161A. 2d 213, 215.

To constitute a binding contract between parties, there must be a meeting

of the mind often referred to as consensus ad idem. The mutual consent
relates to offer and acceptance. An offer is the expression by a party of
readiness to contract on the terms specified by him which if accepted by
the offeree gives rise to a binding contract. The offer matures to a
contract where the offeree signifies a clear and unequivocal intention to
accept the offer. See: Okugbule & Anor. V. Oyagbola & Ors (1990) 4 NWLR
(Pt. 147) 723. It should be reiterated that in order to establish that parties
have formed a contract, there must be evidence of consensus ad idem
between them. Then if there is a stipulated mode for acceptance of the
offer, the offeree has a duty to comply with same. See: Afolabi v. Polymera
Industries (1967) 1 All NLR 144.
The acceptance must correspond with the term of the offer. If it purports
to qualify the offer, it may amount to a counter-offer and not an
acceptance. It may amount to rejection of the offer. It also destroys that
offer so that cannot subsequently be accepted. Both parties and the two
courts below appear to be at one that Exhibit 4 seems to convey an offer
by the respondent to the appellant herein. It reads as follows:-

“3rd December, 1990

Chief A. O. Okoli

Chairman,

Bilante International Ltd.

86, Awolowo Road,

Ikoyi.

Lagos.

Dear Sir,

APPLICATION FOR A FACILITY OF N18.000.000:00

We refer to your letter No. B1/EN/OBN/2/Vol. 2/34 dated 30th November,

1990 in connection with your application for a facility of N18,000,000:00
and the contract which you are handling for Anambra State Government.
Management has considered the good relationship which you enjoy with
the Bank over the years, and as we consider you a very valuable customer
of the bank, we have agreed:

See also Daniel Ibanga V. The State (1983) LLJR-SC

(1)To pay you 24% (twenty-four percent) for the Fixed Deposit which
will be used as a collateral for the facility you are asking for;

(2)Management has noted that a total of N13m will be available for the
security to cover our exposure which we understand will fluctuate
only up to N10m by the end of January, 1991. We have also noted
that your request could be reviewed as the need arises, and that an
additional N2.9m will be paid before the end of January to reinforce
whatever facility would be granted;

(3)As we consider your contract with Anambra State Government a

priority commitment, Management has agreed to provide
$300,000:00 (Three Hundred Thousand US Dollars) by middle of
January, 1991 to meet your immediate requirement and to enable
your contract agreement take off smoothly. It is also our view that
after this allocation in January a breathing space will be allowed to
enable us handle subsequent foreign exchange need of your
Company.

It is our hope that with these concessions the Management magnanimity

and understanding would have been recognized. Kindly confirm the above
agreement reached at today’s meeting by signing and returning the
duplicate copy of this letter.

Yours faithfully

ORIENT BANK OF NIGERIA LTD

SGD

E. C. IKE

MD/CHIEF EXECUTIVE

SGD

I. C. IGBOAMALU

A.G.M BANKING OPERATIONS.”

From the above, it is glaring that the respondent herein set out the terms
upon which it would grant the loan to the appellant. The respondent also
stipulated how it wants the appellant to indicate its acceptance of the
offer. The appellant chose to write Exhibit 5 to the respondent. It reads as
follow:-

“The Managing Director,

Orient Bank of Nigeria Limited,

20 Garden Avenue,

GRA,

Enugu.

Sir,
RE: APPLICATION FOR A FACILITY OF N18,000,000.00

We refer to your letter OBN/AD.1/27 dated 3rd December, 1990 in respect

of our application for a facility of N18,000,000:00 and wish to thank you
for your approval for the facility at interest rate of 271/2% (TWENTY-
SEVEN AND HALF PERCENT).

We further wish to direct that our total security cover of N13m with your
bank comprising –

(a)Cash on Fixed Deposit – N11,000,000:00

(b) Bank Guarantee – N 2,000,000:00

N13,000,000:00

Be utilized as follows-

(1)That the cash on Fixed Deposit N11m which is a merger of the

existing Fixed Deposit Account of N1m acting previously as a
collateral to Account 2 Account No. (010200374) plus N10m from
call Deposit be fixed for one year with effect from today – (4/12/90)
at the agreed interest rate of 24% (TWENTY-FOUR PER CENT).

(2)That the Bank Guarantee of N2m now serve as a direct collateral

cover on our Account 4 (Account No. 010200593) where the hitherto
existing overdraft facility of N1m on Account 2 (Account No.
010200374) should now be transferred.

We have already written the Commissioner of Finance, Anambra State

Government, requesting him to execute in favour of your bank, the
relevant forms for domiciliation of the contract payments.
We thank you again for your cooperation.

Yours faithfully,

Bilante International Limited.

SGD

Chief A. O. Okoli

(Chairman).”

It goes without any modicum of reservation that by its letter in Exhibit 5

above, the appellant set out other terms for the loan which it sought from
the respondent. Such a ploy equates with a counter-offer and not an
acceptance. It amounts to a rejection of the offer in Exhibit 4. To put it
bluntly, it destroys the offer and cannot subsequently be accepted or
reactivated.The above apart, the stipulated mode of acceptance
requested by the respondent in Exhibit 4 to sign a duplicate of same and
return it was not complied with by the appellant to its detriment. See:
Afolabi v. Polymera Industries (Nig) Ltd. (supra) which is apt on this point.
The required mode of acceptance as requested by the offeror must be
complied with by the offeree. See Halsbury’s Law of England 3 rd Edition
Volume 8 at page 74. This common Law stance has been codified by the
Contract Law, Cap. 30 Laws of Anambra State 1986. Section 109(1)
provides as follows:-“Where an offer prescribes a method by which
acceptance of his offer is to be communicated to him, that method shall
be adopted by the offeree, and acceptance which fails to comply with
such requirement shall be ineffective.”

The above discussion clinches the arguments of the appellant to the

contrary on this issue. This is enough to resolve this issue against the
appellant. It failed to establish a binding contract between it and the
respondent. The court below was right. I resolve the issue against the
appellant and in favour of the respondent.
Issue (3) deals with ‘whether the Court of Appeal was right in setting aside
the judgment given in favour of the appellant in respect of the de-fixing of
its fixed deposit account’.

The trial court held ‘that the de-fixture of the plaintiff’s fixed deposit was a
breach of contract by the defendant to de-fix without the agreement or
concurrence of the plaintiff’. But the contrary is extant in Exhibit 22A
written by the plaintiff to the defendant which gave it a ‘temporary
instruction to de-fix our fixed deposit account to the tune of N28m’ and
same stated to be ‘in accordance with the agreed de-fixing arrangement’
as pleaded in paragraph 21 of reply to statement of defence. Senior
counsel for the respondent submitted that no arrangement was pleaded or
given in evidence to show how the defendant acted contrary to the
arrangement. He felt that it was wrong for the trial Judge to hold in effect
that the de-fixture was the unilateral act of the defendant. The appellant
had no answer to same in its reply brief. The submission of the senior
counsel in respondent’s brief can well be put on its mettle. The plaintiff
did not prove that de-fixture was a unilateral act of the defendant. The
plaintiff had no cause of action for damages or loss of interest from the
fixed deposit account.

The plaintiff which is the appellant herein did not prove any enforceable
contract which is binding on the defendant respondent. There can be no
breach of a non-existent contract. See: Best (Nig.) Ltd. Blackwood Hodge
(Nig.) Ltd. & Ors. (2011) 1 SCNJ 282 at 299 – 300. I cannot surmise any
plausible reason for an award of general damages in the circumstance of
this matter.

I resolve the two issues against the appellant and in favour of the
respondent.

I short, come to the conclusion that the main appeal is devoid of merit. It
must be, and is hereby dismissed.

CROSS APPEAL
The defendant counter-claimed for a sum of N13,050,002.79 being debt
outstanding in the plaintiff’s accounts with the Bank. The contention of the
defendant is that there was no sufficient denial of the defendant’s claim to
put the debt in issue requiring proof by viva voce evidence. The defendant
placed reliance on Order 9 Rules 9 and 10 of the High Court Rules for the
contention.

It was further contended that the Statement of Account – Exhibit 12 series

were sufficient to prove the appellant’s alleged indebtedness. Learned
counsel for the cross-respondent felt that the appellant sufficiently
traversed the respondent’s counter-claim in paragraphs 13 and 15 of the
Reply to the Defence.

Learned counsel felt that the burden was clearly placed on the respondent
to establish the alleged indebtedness that formed the basis of the counter-
claim. Learned counsel for the respondent/cross-appellant felt that the
mere tendering of Exhibit 12 series without any viva voce evidence by the
appellant was not enough. Learned counsel cited the case of John Orekie
Anyakwo v. African Continental Bank Limited (1976) 2 SC 41 at page 46.

A counter-claim is said to be a separate and independent action in its own

right. See: Oyegbola v. Esso W.A. (1966) 1 All NLR 170; Ogbonna v.
Attorney-General Imo State (1992) 1 NWLR (Pt 220) 647. In this matter,
the plaintiff filed a Reply to the counter-claim and joined issues with the
defendant. The defendant merely tendered Exhibit 12 series- the
statement of Account but did not adduce oral evidence to put same in
proper perspective so as to establish the claim. The case of John Orekie
Anyakwo v. African Continental Bank Ltd cited by the learned counsel for
the cross-respondent is on all fours with the instant appeal. Therein, the
plaintiffs tendered Exhibit C Statement of Account therein and called a
witness who did not know anything about the transaction. Fatayi-Williams,
JSC (as he then was) pronounced that they know or ought to have known
right from the beginning that in order to succeed, they had to prove how
the debit balance claimed from the defendant was arrived at.

The appellant disputed the alleged indebtedness and maintained that on

the contrary, there should be a credit balance of N800,000:00 in its
accounts. The respondent Bank ought to know that in order to succeed,
they had to demonstrate through oral evidence by an official who is
familiar with the accounts how the debit balance claimed was arrived at.
The court below was correct in the stance taken by it. I do not see any
merit in the cross-appeal. I affirm the judgment of the court below in
respect of the cross-appeal.

In conclusion, I see no merit in any of the two appeals. Both the main
appeal as well as the cross-appeal is hereby dismissed. I make no order on
costs in the prevailing circumstance.

SC.177/1996