UBA v. NEW TARZAN MOTORS LTD

CITATION: (2016) LPELR-41016(CA)

In the Court of AppealIn the Enugu Judicial Division

Holden at Enugu

ON FRIDAY, 20TH MAY, 2016Suit No: CA/E/139/2008

Before Their Lordships:

HELEN MORONKEJI OGUNWUMIJU Justice, Court of AppealMASSOUD ABDULRAHMAN OREDOLA Justice, Court of AppealMISITURA OMODERE BOLAJI-YUSUFF Justice, Court of Appeal

BetweenUNITED BANK FOR AFRICA PLC - Appellant(s)

AndNEW TARZAN MOTORS LIMITED - Respondent(s)

RATIO DECIDENDI

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1. BANKING LAW - INTEREST ONCREDIT FACILITIES: General rule asto payment of interest on a debt orloan and its exception"It is now well settled that banks notbeing a charitable organization hasthe power or are entitled to chargeinterests on loans or other advancesor facilities granted and or madeavailable to a customer, even wherethere was no express agreement onthe rate of interest to be charged. Seethe case of Adetoro v. U. B. N. Plc.(2007) LPELR ??? 8991 . "Pe rOREDOLA, J.C.A. (P. 16, Paras. D-E) -read in context

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2. C O N T R A C T - T E R M S O FCONTRACT: Whether parties arebound by the t e rms o f t he i ragreement"Also, it is trite principles of law ofcontract that parties to a bindingcontract are bound by the terms ofthe sa id contract which theyvoluntarily entered into, see the casesof Best (Nigeria) Ltd. v. BlackwoodHodge (Nigeria) Ltd. (2011) 5 NWLR(Pt. 1239) 95; and A. G. Ferrero & Co.Ltd. V. Henkel Chemicals Nig. Ltd(2011) LPELR ??? 12."Per OREDOLA,J.C.A. (Pp. 16-17, Paras. F-A) - read incontext

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3. C O N T R A C T - T E R M S O FCONTRACT: Whether parties arebound by the terms of their contractand the duty of court to give effect tosame"Let me state, that I subscribe to thesubmission of the learned counsel tothe appellant on the fact that whereparties who are desirous of entering abusiness relationship have reducedthe terms of relationship into writing,they would be bound by such terms.Also, if the wordings of the agreementare plain and unambiguous, Courtsare generally bound to interpret theagreement literally, giving effect tothe terms already agreed upon by theparties. This is moreso, because it isnot the business of Courts to write ormake new agreement/contract for thepart ies. See Owoniboys Tech.Services Ltd. v. U. B. N. Ltd. (2003) 15NWLR (Pt. 844) 545; (2003) LPELR ???2854."Per OREDOLA, J.C.A. (Pp. 14-15,Paras. F-C) - read in context

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4. INTERPRETATION OF DOCUMENT -CONSTRUCTION OF DOCUMENTS:Guiding principles to the constructionof contract documents"It is also a trite law that, wheredocument(s) form part of a longdrawn transaction, such as in theinstant case , they shou ld beinterpreted not in isolation but in thecontract of the total i ty of thetransaction in order to full appreciatetheir legal import and purport andimpact. That is the only way to findout and determine the real intentionof the parties. A restrictive andrestricted interpretation which doesnot take cognizance of the totalpackage of the transaction in whichthe documents are integral partcannot meet the justice of the case.See the cases of R.E.A.N. Ltd. v.Aswani Textile Ind. (1991) 2 N.W.L.R.(Pt.176) 639 @ 669; and Agbachi v.Azubuike (2010) LPELR ??? 3646."PerOREDOLA, J.C.A. (Pp. 15-16, Paras. C-A) - read in context

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M A S S O U D A B D U L R A H M A N O R E D O L A ,J.C.A.(Delivering the Leading Judgment): This is anappeal against the judgment of the High Court of AnambraState, sitting at Onitsha (hereinafter referred to as theLower Court) delivered by Hon. Justice Vin Agbataon the28th day of January, 2008. The suit was originally institutedby the plaintiff/respondent vide a writ of summons filed onthe 9th day of June, 2005, wherein the Respondent claimedagainst the defendant/appellant in the following terms asreproduced below:“WHEREFORE the plaintiff claims from defendant thesum of N150,000.000.00 being general and specialdamages for wrongful deduction and breach ofcontract.PARTICULARS OF DAMAGES SPECIAL DAMAGESDeduction from plaintiff’s account from 25thDecember, 2000 – 25th January, 2002- N21,220,925.57Interest on the amount: - N37,681,220.21Total - N57,962,145.78General Damages: - N91,097,854.22Grand Total - N150,000.000.00”

At the close of pleadings, both parties led evidence in proofof their respective cases. The plaintiff/respondent calledtwo (2) witnesses, while the defendant/appellant

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called only one witness. At the end of it all, the learned trial

judge entered judgment for the plaintiff/respondent in the

following words:

“The plaintiff is, therefore, entitled to judgment in

this suit. The defendant shall pay to the plaintiff the

sum of N21,220,925.57 being unauthorized

deductions from the accounts of the plaintiff with her

from the 25th day of December, 2000 to the 25th day

January, 2002. The plaintiff claimed also, against the

defendant, the sum of N37, 681,220.21 being

interests on the above stated judgment debt. She did

not however, establish by evidence how she arrived at

that figure. Be that as it may, the Supreme Court in

the case ofBalogun vs. National Bank of Nigeria Ltd.

(1978) 3 S. C. 155, had restated the law to the effect

that people engaged in business should recover

substantial damages without proof of actual loss. The

defendant shall, therefore, also pay to the plaintiff

the sum N37, 681,220.21 being damages for breach of

contract.”

The appellant was dissatisfied with the said decision and

thus appealed against it. Originally this was done vide a

notice of appeal filed on the 30th of January, 2008,

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but was subsequently amended by the order of this court

made on the 17th day of November, 2008 which deemed

the same as having been properly filed and duly served.

Thus, the said judgment is being challenged before this

Court on seven (7) grounds of appeal; the grounds without

their particulars are reproduced below:

“GROUND ONE

The learned trial Judge misdirected himself and

thereby erred and came to a wrong conclusion when

he held as follows:

“It appears, to me preposterous that the Defendant

applied her own funds to acquire her own buses and

then debited the accounts of the plaintiff with

interests for the said funds when she was yet to take

possession of the buses. It does not make sense to

me”

“GROUND TWO

“The learned trial judge erred in law in awarding the

sum of N21,220,925.57 as special damages

representing the sum deducted from the plaintiff’s

account between 25th January, 2000 and 25 January,

2002”

“GROUND THREE

The learned trial judge erred on law when he held as

follows:

“… Be that as it may, the Supreme Court in the case

Balogun V National Bank of

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Nigeria Ltd (1978) 3 S. C. 155, had restated the law to

the effect that people engaged in business should

recover substantial damages without proof of actual

loss. The defendant shall, therefore, also pay to the

plaintiff the sum of N37,681,220,21 being damages

for breach of contact…”

“GROUND FOUR

The learned trial judge erred in law when he held as

follows:

“The transaction between the parties was a lease

finance transaction. It was not term loan, as

suggested by the defense counsel. Consequently, both

the principal sum and the interests thereon were part

and parcel of the 21 equal monthly rentals, which the

plaintiff had since paid to the defendant. It follows,

therefore, that any deductions outside the aforesaid

21 equal monthly rentals, made by the defendant

from the account of the plaintiff with her is not

allowed, neither by the law nor by the agreement of

the parties. It was done in breach of the contract

between the parties”

“GROUND FIVE

The trial Court erred in law in holding that:

“A bank, not being a charitable organization is

entitled to charge interests on funds which she

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released to her customer from the date of the release

of such funds. This is however true to the extent only

that the said funds were released to the customer. It

becomes a totally different ball game in such

circumstance as in the present case, where such

funds were never released to the customer, the

plaintiff, but were rather applied for the acquisition

of some buses the property in which remained in the

Defendant”

“GROUND SIX

The learned trial judge erred in law in considering

only the case for the plaintiff and failed to advert his

attention to the evidence adduced, and the

authorities referred to by the defendant.”

“GROUND SEVEN

The learned trial judge erred in law when he held as

follows:

“At all times material to this suit, the property in the

buses remained in the Defendant. Indeed, it was in

the exercise of her rights as owner of the said buses

that the Defendant had to sell one of them without

recourse to the plaintiff”

In accordance with the rules of this Court the parties filed

their respective briefs of argument. The appellant’s brief of

argument was prepared by Alfred

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Uwaka, Esq. and filed on the 3rd day of April, 2009. It was

deemed as properly filed and served on the 7th day of July,

2009. The respondent’s brief of argument, on the other

hand was filed by Chief S. O. P. Okeke. It was filed on the

6th day of August, 2009. The appellant’s counsel upon

being served with the respondent’s brief of argument, filed

a reply brief on the 13th day of September, 2010. The same

was deemed as properly filed and duly served on the 11th

day of October, 2010.

In the resolution of this appeal, the learned appellant’s

counsel formulated two (2) issues for determination. The

issues are as follows:

ISSUE 1

Whether the learned trial judge was right to have

awarded the sum of N37,681,220.21k (Thirty Seven

Million Six Hundred and Eighty one Thousand Two

Hundred and Twenty Naira Twenty One Kobo) as

d a m a g e s f o r b r e a c h o f c o n t r a c t t o t h e

plaintiff/respondent.

ISSUE 2

“Whether the learned trial judge was right in the

circumstance in holding that both the principal sum

and interest were part and parcel of the 21 equal

monthly rentals, thereby disallowing the interest

charged by the

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defendant/appellant and awarding the sum of

N21,220,925,57k (Twenty One Million, Two Hundred

Twenty Thousand Nine Hundred and Twenty Five

Naira Fifty Seven Kobo) to the plaintiff/respondent as

special damages.”

The learned counsel to the respondent on his own, distilled

four (4) issues for the determination of this appeal the

issues are as follows:

“(i) Whether the respondent/defendant was right to

have deducted money from the account of the

respondent/plaintiff when no business was done for

the respondent/plaintiff.

(ii) Whether the Learned Trial judge was right to have

awarded the sum of N37,681,220.21k (Thirty Seven

Million Six Hundred and Eighty One Thousand Two

Hundred and Twenty One Kobo as damages for the

breach of contract to the plaintiff/respondent.

(iii) Whether the learned trial judge was right in the

circumstance in holding that both the principal sum

and interest were part and parcel of the 21 equal

monthly rentals, thereby disallowing the interest

charged by the defendant/appellant and awarding of

t h e s u m o f N 2 1 , 2 2 0 , 9 2 5 . 5 7 k t o t h e

respondent/plaintiff as special damages.

(iv) Whether this Court can interfere

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with the finding of the trial Court.”

It is instructive to observe at this point, that the issues as

distilled by the learned counsel to the respondent are

materially the same with those distilled by the learned

appellant’s counsel except for the fact that the learned

respondent’s counsel merely crafted the issues in an

expanded form.

I have carefully gone through all the evidence on record;

the judgment of the Lower Court, issues formulated by

learned counsel to both parties and arguments, and I am of

the opinion that the issues formulated by the learned

counsel to the appellant are more apt for the resolution of

this appeal. Thus, the issues are hereby adopted towards

the determination of this appeal. Having carefully examined

the said issues adopted for the determination of this appeal

I am of the view that they are inter-related and mutually

dependent. Thus, it would be better that they are

considered together.

ARGUMENT ON ISSUES. (ISSUE 1 AND ISSUE 2)

The learned counsel for the appellant submitted that a

party must establish his claim by evidence before he could

be entitled to judgment. He referred to and relied on

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the cases of Sokwo v. Kpongbo (2008) 7 NWLR (Pt.

1086) 342 @ 362; and Nzeribe v. Dave Eng. Co. Ltd.

(1994) 8 NWLR (Pt. 361) 124 @ 136. The learned

counsel also contended that the respondent failed to prove

that they are entitled to special damages (in form of

interest on the amount the appellant allegedly wrongfully

deducted from its account, and that the learned trial judge

so found, but went ahead to grant the relief.

The learned counsel submitted in another vein, that the

authorities in respect of which the Lower Court relied upon

in reaching its decision in this regard were decided on a

different principle of law and the same is not applicable to

the instant case. The learned counsel finally submitted on

this point that the Lower Court “had no jurisdiction to

award to the plaintiff/respondent damages for a relief not

claimed as the Court did.” He called in support the cases

of Ekpenyong v. Nyong (1975) 2 SC 65 @ 73-74; Fabiyi

v. Adeniyi (2000) 6 NWLR (Pt. 662) 532 @ 542; and

Odofin v. Agu (1992) 3 NWLR (Pt. 229) 350 @ 372 -

373.

The learned counsel to the respondent on his own part

contended that, there was evidence on record which

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established the fact that the appellant wrongfully deducted

the sum of N21,220,925,57k from the respondent’s

account. The learned counsel thereby submitted that the

damages in this respect were awarded to compensate the

respondent in order to make reparation for all the actual

damage done to the respondent which flowed directly from

the said act. He called in aid the cases of Doyle v. Olby

(Iron Mongers Ltd.) (1969) 2 All E. R. 119 @ 122; and

Balogun v. National Bank of Nigeria Ltd (1978) 3 S.

C. 155.

The learned counsel to the appellant had hitherto

submitted that this issue was borne out of the Lower

Court’s findings, where it was stated as follows

“…both the principal sum and the interest thereon

were part and parcel of the 21 equal monthly rentals

which the plaintiff had since paid to the defendant. It

follows, therefore, that any deduction, outside the

aforesaid 21 equal monthly rentals, made by the

defendant from the account of the plaintiff with here

is not allowed, neither by the law nor by the

agreement of the parties. It is done in breach of the

contract between the parties.”

The learned counsel then

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maintained that the respondent did not at any point

pleaded that both the principal sum and interest were part

and parcel of the 21 monthly rentals. Thus, the decision of

the Lower Court amounted to formulating or putting

forward a different case from what the respondent averred.

The learned counsel, thus, submitted that the trial Court

had no jurisdiction to make findings to the effect that both

the principal sum and interest are part and parcel of the 21

equal monthly rentals, and that by this finding, the Court

made a case different from the case made by the

respondent. He relied on the case ofFabiyi v. Adeniyi

(2000) 6 NWLR (Pt. 662) 532 @ 542, on the established

point that a Court has no jurisdiction to grant a relief which

has not been pleaded or prayed for.

The learned counsel contended further that the contract

between the parties was not a case of finance transaction

strictly speaking, as the agreement clearly contemplated

and stipulated the payment of interest apart from rentals.

The learned counsel went ahead to buttress this fact with

references to pieces of evidence on record. Thus, the

learned counsel submitted that learned trial judge

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(with due respect) failed to properly grasp and appreciate

the transaction between the parties and evidence of the

appellant.

The learned counsel submitted also the respondent failed to

strictly prove that she was entitled to the special damages

claimed. He submitted further that for a party to claim

special damages and succeed, he must specifically plead it

and strictly prove the same. He relied on the case of

Arabambi v. A. B. I Ltd (2006) 3 M. J. S. C., 61 @

98-99.

The learned counsel argued further that the transaction

was in form of “disguised borrowing” equivalent to a

form of term loan in respect of which the sum released by

the appellant was to attract interest in accordance with the

custom and practice of banking transactions. The learned

counsel argued further that the Lower Court failed to

properly evaluate the evidence before it; thus, it

erroneously found that both the interest and the principal

sum was part and parcel of the 21 equal monthly rental

payments. He therefore, urged this Court to interfere with

the findings of the Lower Court and find in favour of the

appellant. He relied on the following cases in making his

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submissions; Sha (Jnr.) v. Kwan (2000) 8 NWLR (Pt.

670) 685 @ 704 among others.

Finally, the learned counsel argued that the transaction

between the parties was reduced into a written agreement

to which both parties are bound and while the Court is only

saddled with the responsibility of interpreting plainly, the

terms as agreed by the parties. He stated that any effort in

default of the above would amount to re-writing

agreements for the parties which the law frowns at. He

cited and relied on the cases of Larmie vs. DATA

Processing Maintenance & Services Ltd. (2006) 3

M.J.S.C., 20. He argued that Exhibits D1, D6 and D7

clearly showed and stipulated that the payment of interests

would be differentiated and excluded from the monthly

rental payment. Relying on all the above arguments and

authorities in support thereof, he therefore urged this

Court to allow this appeal and make an order dismissing

the respondent’s claim in its entirety.

The learned counsel to the respondent in further response

contended that the transaction between the parties is a

finance lease contract. He also stated that the transaction

is akin to Equipment Leasing which

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is all about financing. He referred us to the case of

Mulliner v. Flounce (1878) 3 Q.B.D. 484. The learned

counsel contended that a finance lease contract is drawn

up in such a way as to involve payment over an obligation

period of specified sums, sufficient in total to amortize the

capital out lay of the lessor and some profit. He argued

further that the appellant as the lessor in the instant case,

entered the contract that did not anticipate deductions

upfront. The learned counsel then maintained with

insistence, that the monthly rental consists of the capital

and interest. He referred us to the text written by

Professor T. M. Clark (LEASING) 1978, pages 3 and

12.

The learned counsel therefore submitted that, it amounts to

double portion for the appellant to deduct the sum of

N21,220,925.57k and also collect the full rental which

comprised of the principal and the interest thereon. He

further opined that the learned trial judge was right when

he disallowed the interest and awarded the sum of

N21,220,925.57 to the respondent.

Let me state, that I subscribe to the submission of the

learned counsel to the appellant on the fact that where

parties who

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are desirous of entering a business relationship have

reduced the terms of relationship into writing, they would

be bound by such terms. Also, if the wordings of the

agreement are plain and unambiguous, Courts are

generally bound to interpret the agreement literally, giving

effect to the terms already agreed upon by the parties. This

is moreso, because it is not the business of Courts to write

or make new agreement/contract for the parties. See

Owoniboys Tech. Services Ltd. v. U. B. N. Ltd. (2003)

15 NWLR (Pt. 844) 545; (2003) LPELR – 2854.

It is also a trite law that, where document(s) form part of a

long drawn transaction, such as in the instant case, they

should be interpreted not in isolation but in the contract of

the totality of the transaction in order to fully appreciate

their legal import and purport and impact. That is the only

way to find out and determine the real intention of the

parties. A restrictive and restricted interpretation which

does not take cognizance of the total package of the

transaction in which the documents are integral part

cannot meet the justice of the case. See the cases of

R.E.A.N. Ltd. v. Aswani Textile Ind. (1991)

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2 N.W.L.R. (Pt.176) 639 @ 669; and Agbachi v.

Azubuike (2010) LPELR – 3646.

I have carefully examined Exhibits D1 and D7 (which forms

the fulcrum of this case), vis-à-vis the conduct of the

parties, and it is my firm view point that the parties

expressly agreed for the payment of a separate interest

apart from the monthly rentals. It is clear on the face of the

said exhibits that the parties contemplated and agreed for

the payment of interest apart from the rental payments on

the lease facility. I also agree with the learned counsel to

the appellant that the transaction between the parties is in

a hybrid form; encompassing both Loan facility and Lease

Financing.

It is now well settled that banks not being a charitable

organization has the power or are entitled to charge

interests on loans or other advances or facilities granted

and or made available to a customer, even where there was

no express agreement on the rate of interest to be charged.

See the case ofAdetoro v. U. B. N. Plc. (2007) LPELR –

8991.

Also, it is trite principles of law of contract that parties to a

binding contract are bound by the terms of the said

contract

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which they voluntarily entered into, see the cases of Best

(Nigeria) Ltd. v. Blackwood Hodge (Nigeria) Ltd.

(2011) 5 NWLR (Pt. 1239) 95; and A. G. Ferrero & Co.

Ltd. V. Henkel Chemicals Nig. Ltd (2011) LPELR – 12.

On the strength of the above established principles of law

and the authorities cited in support as well as all the

evidence on the printed record placed before us, it is my

humble and firm view point, that the appellant has the right

under the said contract to charge separate interest (as it

has done in this case) on the ‘loan’ advanced to the

respondent in form of letter of credit as well as receive

monthly rental from the respondent in discharge of the

lease financing afforded it by the appellant. Thus, both

issues formulated in determination of this appeal are

hereby resolved in favour of the appellant.

Having resolved the issues formulated and adopted for the

resolution of this appeal as done above, it is my finding that

this appeal is meritorious and it is accordingly allowed.

Consequently, it is my standpoint that the Lower Court

acted in error when it ordered the appellant to pay the sum

of N21,220, 925. 57K (Twenty

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One Million, Two Hundred Twenty Thousand Nine Hundred

and Twenty Five Naira, Fifty Seven Kobo) and N37,

681,220. 21k (Thirty Seven Million, Six Hundred and Eighty

one thousand, Two hundred and Twenty Naira and Twenty

One Kobo) to the respondent as unauthorized deduction

from the accounts of the respondent from 25th day of

December, 2000 to the 25th day of January, 2002 and

general damages for breach of contract, respectively. In the

premise, the judgment of the Lower Court delivered on

28th day of January, 2008 in Suit No. 0/3/8/2005 is hereby

set aside and the respondent’s case is accordingly

dismissed. No order is made with regard to costs. Parties

are to bear their respective costs.

HELEN MORONKEJI OGUNWUMIJU, J.C.A.: I have hadthe privilege of reading before now the judgment of mylearned brother MASSOUD ABDULRAHMAN OREDOLAJCA. Parties are bound by the contract they voluntarilyenter into. I agree with my brother that the partiescontemplated and agreed for the payment of interest apartfrom rental payments on the lease facility both being anintegral part of the same contract. I agree with thereasoning, conclusion and order in the lead judgment todismiss the case of the Respondent and thus allow theappeal.

MISITURA OMODERE BOLAJI-YUSUFF, J.C.A.:

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I was privilege to read in draft the judgment of my learned

brother, MASSOUD ABDULRAHMAN OREDOLA, JCA. I

agree entirely with the reasoning and conclusions therein

that this appeal is meritorious and it is accordingly allowed.

I abide by the consequential orders made therein.

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Appearances:

Mrs. Helen Ovonlen For Appellant(s)

Chief S. O. P. Okeke with him, G. N. Ideh, Esq.For Respondent(s)

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