When A Subsequent Suit Will Constitute An Abuse Of Court Process

In the Supreme Court of Nigeria Holden at Abuja On Friday, the
18th day of December, 2020

Before Their Lordships

Mary Ukaego Peter-Odili

Olukayode Ariwoola

Kudirat Motonmori Olatokunbo
Kekere-Ekun

John Inyang Okoro

Chima Centus Nweze

Justices, Supreme Court

SC.692/2014

Between

INTERNATIONAL TRUST BANK PLC
APPELLANT

And

LOUIS OKOYE RESPONDENT

(Lead Judgement delivered by Honourable
Kudirat Motonmori Olatokunbo Kekere-Ekun, JSC)

Facts

The Appellant advanced an overdraft facility, to a certain
Excellent Manufacturers Ltd. The Respondent was the Chief Executive
Officer/Managing Director of the company. A Deed of Debenture was
executed between the Appellant and the company, wherein the
company’s assets were charged as security for the loan facility.
The Respondent also executed a Deed of Guarantee/Indemnity in
favour of the Appellant. Upon the Company’s default in repaying the
loan, the Appellant appointed a Receiver/Manager over the assets of
the Company pursuant to the Deed of Debenture. The Receiver/Manager
with the company in receivership and the Respondent Bank as
Co-Applicants, filed an action against the Respondent and other
Directors of the company at the Federal High Court in Suit No.
FHC/L/CS/769/2004, seeking preservatory orders in respect of the
said assets.

Subsequently, the Appellant filed an action under the Undefended
List at the High Court of Anambra State, seeking to enforce the
Respondent’s personal guarantee under the Deed of Guarantee. It
claimed the sums due to it, under the overdraft facility.

Upon being served with the Writ of Summons and accompanying
processes, the Respondent filed a Notice of Intention to Defend the
Suit. The basis of the Respondent’s Notice was that the Appellant
lacked the locus standi to institute the action, having appointed a
Receiver over the assets of the company pledged as security for the
loan, and for this reason, it had discharged itself of all
responsibility under the Deed of Guarantee executed by the
Respondent. The Respondent also posited that the Appellant
illegally withdrew some sums from the Company’s account, and that
the mortgaged property was worth more than N18 million.

After considering the submission of counsel, the trial court
held that the Respondent did not disclose any triable issue for
defence. Thereafter, the court entered judgement in favour of the
Appellant in the sum of N10 million, being the Respondent’s limit
under the Deed of Guarantee.

The Respondent appealed to the Court of Appeal which allowed his
appeal and struck out the Appellant’s claim at the trial court, on
the ground that it was an abuse of Suit No. FHC/L/CS/769/2004 which
was pending before the Federal High Court. Dissatisfied, the
Appellant appealed to the Supreme Court.

Issues for Determination

In determining the appeal, the Supreme Court considered the
issues below:

1. Whether the Court of Appeal was right in holding that the
Appellant’s suit was an abuse of Suit No. FHC/L/CS/769/2004 –
TAMUNO NATHAN GEORGE & 2 ORS v LOUIS OKOYE & 4 ORS. pending at the
Federal High Court, Lagos.

2. Whether the Court of Appeal was right when it held that, the
Respondent disclosed triable issues entitling him to be let in to
defend the Appellant’s suit at the trial court.

Arguments

Arguing the first issue, counsel submitted on behalf of the
Appellant that the fact that the Receiver/Manager appointed
pursuant to the Deed of Debenture between the Appellant and the
company instituted Suit No. FHC/L/CS/769/2004, cannot affect the
Appellant’s right of action under the Deed of Guarantee as both
contracts are separate and independent in law. He argued that the
suit was instituted by the Receiver/Manager for the preservation of
the company’s assets which were the subject of the Deed of
Debenture, and the Receiver’s only concern, and it was not brought
on behalf of the Appellant to recover the debt guaranteed by the
Respondent under the Deed of Guarantee. He submitted that the
company was not a party to Exhibit EM4; hence, it cannot derive any
benefit or suffer any detriment thereunder.

Counsel for the Respondent did not advance any arguments, to
counter the Appellant’s submissions. However, he objected to the
competence of Ground 2 of the Notice and Grounds of Appeal from
which the issue was framed, on the basis that it was not derived
from the specific finding of the Court of Appeal, as the
Appellant’s suit relates to abuse of court process. He urged the
court to discountenance the Appellant’s submissions on the
issue.

In response to the Respondent’s objection, counsel for the
Appellant referred to Order 8 Rule 2(2) of the Supreme Court Rules
and submitted that all that is required of an Appellant when
framing a Ground of Appeal, is to clearly state the aspect of the
finding of the lower court he is dissatisfied with and the
particulars and nature of the errors complained about.

Regarding the second issue, counsel submitted on behalf of the
Appellant that where a Defendant has been served with a Writ under
the Undefended List Procedure, his affidavit in support of his
Notice of Intention to Defend must state clearly and concisely as
possible, what his defence is. He relied on the case of SANUSI
BROS. NIG. LTD v COTIA C. E. I. S. A. (2000) 11 NWLR (Pt. 697) 56,
and submitted that the Respondent failed to disclose any triable
issue or defence to the suit. He further submitted that the onus
was on the Respondent to show evidence of any sum received by the
Receiver/Manager on behalf of the Appellant, the purported illegal
withdrawal by the Appellant, or that the Respondent had paid any
part of the N10 million which he guaranteed to pay. Conversely,
counsel for the Respondent submitted that the Respondent had
disclosed a fair probability of a defence in the affidavit filed in
support of his Notice of Intention to Defend, and the Court of
Appeal was correct in holding that he ought to have been given the
opportunity to defend the suit.

Court’s Judgement and Rationale

On the objection raised by the Respondent to the competence of
Ground 2 from which Issue One was formulated, the court held that a
ground of appeal will not be held to be incompetent, if the court
and the other side are not in doubt as to what the complaint is.
The court is to look at substance over form in furtherance of its
duty to do substantial justice between parties, and not be bogged
by technicalities. Thus, the Ground of Appeal was competent,
because by its wordings and the particulars of error stated
thereunder, it was clear that it was challenging the decision of
the Court of Appeal on abuse of court process.

In resolving the first issue for determination, the court held
that before a suit can be said to amount to be an abuse of court
process on the basis of multiplicity of actions, the suit and the
suit it is claimed to be abusive of, must be between the same
parties; on the same subject-matter; and on the same issues –
OKORODUDU v OKOROMADU (1977) 3 SC 21; OKAFOR v A. G. ANAMBRA STATE
(1991) 6 NWLR (Pt. 200) 659 at 681. The three conditions must
co-exist for an abuse of court process to ensue.

The suit before the Federal High Court in FHC/L/CS/769/2004 was
essentially a suit instituted by the Receiver/Manager of Excellent
Manufacturers Ltd and two other Plaintiffs pursuant to the Deed of
Debenture, to protect the assets of the company and to prevent the
Respondent as the Chief Executive Officer and other Directors, from
tampering with them. On the other hand, the suit that gave rise to
the instant appeal was instituted by the Appellant against the
Respondent in his personal capacity as a guarantor for the debt
owed by the company, based on his unequivocal and irrevocable
undertaking in the Deed of Guarantee. The court noted that company
is separate and distinct from the Respondent, and the company was
not a party to the contract of guarantee. The most pertinent
indices to be considered for a suit to be termed an abuse of court
process, is that there are multiple actions between the same
parties over the same subject-matter which is not the position in
the instant case. It cannot therefore, be said that the Appellant’s
suit that led to the instant appeal constituted an abuse of
FHC/L/CS/769/2004, as the suits were on different subject matters,
independent of each other, and the reliefs sought in each suit were
completely different from the other.

On the 2nd issue, the court held that where a Defendant avers
that he disputes all or part of the claim, he must be specific as
to what part of the claim, he must be specific as to what part of
the claim he disputes and the real nature of the defence relied on
– NISHIZAWA LTD v JETHWANI (1984) 12 SC 234. All that was available
in the affidavit filed in support of the Respondent’s Notice of
Intention to Defend the suit, were mere speculative allegations.
The affidavit did not disclose any sum of money paid by the
Respondent in favour of the Appellant, or any sum of money received
by the Receiver/Manager to the credit of the Appellant in discharge
of the sum guaranteed by the Respondent. The Respondent’s affidavit
showed a mere posturing, rather than particulars and necessary
details required to sway the hand of the hands of a court to bring
in a Defendant to defend. Mere denial of the claim by the Defendant
of its indebtedness, is not sufficient. The Defendant must disclose
a defence or elicit a triable issue upon which it would be let in
to file and defend the suit, as required by the Rules of court.

Appeal Allowed; Decision of trial court
restored.

Representation

Emeka Mozia for the Appellant.

Obi Anizoba for the Respondent.

Reported by Optimum Publishers Limited, Publishers
of the Nigerian Monthly Law Report (NMLR)(An Affiliate of Babalakin
& Co.)

In the Supreme Court of Nigeria Holden at Abuja On Friday, the
18th day of December, 2020

Before Their Lordships

Mary Ukaego Peter-Odili

Olukayode Ariwoola

Kudirat Motonmori Olatokunbo
Kekere-Ekun

John Inyang Okoro

Chima Centus Nweze

Justices, Supreme Court

SC.692/2014

Between

INTERNATIONAL TRUST BANK PLC
APPELLANT

And

LOUIS OKOYE RESPONDENT

(Lead Judgement delivered by Honourable
Kudirat Motonmori Olatokunbo Kekere-Ekun, JSC)

Facts

The Appellant advanced an overdraft facility, to a certain
Excellent Manufacturers Ltd. The Respondent was the Chief Executive
Officer/Managing Director of the company. A Deed of Debenture was
executed between the Appellant and the company, wherein the
company’s assets were charged as security for the loan facility.
The Respondent also executed a Deed of Guarantee/Indemnity in
favour of the Appellant. Upon the Company’s default in repaying the
loan, the Appellant appointed a Receiver/Manager over the assets of
the Company pursuant to the Deed of Debenture. The Receiver/Manager
with the company in receivership and the Respondent Bank as
Co-Applicants, filed an action against the Respondent and other
Directors of the company at the Federal High Court in Suit No.
FHC/L/CS/769/2004, seeking preservatory orders in respect of the
said assets.

Subsequently, the Appellant filed an action under the Undefended
List at the High Court of Anambra State, seeking to enforce the
Respondent’s personal guarantee under the Deed of Guarantee. It
claimed the sums due to it, under the overdraft facility.

Upon being served with the Writ of Summons and accompanying
processes, the Respondent filed a Notice of Intention to Defend the
Suit. The basis of the Respondent’s Notice was that the Appellant
lacked the locus standi to institute the action, having appointed a
Receiver over the assets of the company pledged as security for the
loan, and for this reason, it had discharged itself of all
responsibility under the Deed of Guarantee executed by the
Respondent. The Respondent also posited that the Appellant
illegally withdrew some sums from the Company’s account, and that
the mortgaged property was worth more than N18 million.

After considering the submission of counsel, the trial court
held that the Respondent did not disclose any triable issue for
defence. Thereafter, the court entered judgement in favour of the
Appellant in the sum of N10 million, being the Respondent’s limit
under the Deed of Guarantee.

The Respondent appealed to the Court of Appeal which allowed his
appeal and struck out the Appellant’s claim at the trial court, on
the ground that it was an abuse of Suit No. FHC/L/CS/769/2004 which
was pending before the Federal High Court. Dissatisfied, the
Appellant appealed to the Supreme Court.

Issues for Determination

In determining the appeal, the Supreme Court considered the
issues below:

1. Whether the Court of Appeal was right in holding that the
Appellant’s suit was an abuse of Suit No. FHC/L/CS/769/2004 –
TAMUNO NATHAN GEORGE & 2 ORS v LOUIS OKOYE & 4 ORS. pending at the
Federal High Court, Lagos.

2. Whether the Court of Appeal was right when it held that, the
Respondent disclosed triable issues entitling him to be let in to
defend the Appellant’s suit at the trial court.

Arguments

Arguing the first issue, counsel submitted on behalf of the
Appellant that the fact that the Receiver/Manager appointed
pursuant to the Deed of Debenture between the Appellant and the
company instituted Suit No. FHC/L/CS/769/2004, cannot affect the
Appellant’s right of action under the Deed of Guarantee as both
contracts are separate and independent in law. He argued that the
suit was instituted by the Receiver/Manager for the preservation of
the company’s assets which were the subject of the Deed of
Debenture, and the Receiver’s only concern, and it was not brought
on behalf of the Appellant to recover the debt guaranteed by the
Respondent under the Deed of Guarantee. He submitted that the
company was not a party to Exhibit EM4; hence, it cannot derive any
benefit or suffer any detriment thereunder.

Counsel for the Respondent did not advance any arguments, to
counter the Appellant’s submissions. However, he objected to the
competence of Ground 2 of the Notice and Grounds of Appeal from
which the issue was framed, on the basis that it was not derived
from the specific finding of the Court of Appeal, as the
Appellant’s suit relates to abuse of court process. He urged the
court to discountenance the Appellant’s submissions on the
issue.

In response to the Respondent’s objection, counsel for the
Appellant referred to Order 8 Rule 2(2) of the Supreme Court Rules
and submitted that all that is required of an Appellant when
framing a Ground of Appeal, is to clearly state the aspect of the
finding of the lower court he is dissatisfied with and the
particulars and nature of the errors complained about.

Regarding the second issue, counsel submitted on behalf of the
Appellant that where a Defendant has been served with a Writ under
the Undefended List Procedure, his affidavit in support of his
Notice of Intention to Defend must state clearly and concisely as
possible, what his defence is. He relied on the case of SANUSI
BROS. NIG. LTD v COTIA C. E. I. S. A. (2000) 11 NWLR (Pt. 697) 56,
and submitted that the Respondent failed to disclose any triable
issue or defence to the suit. He further submitted that the onus
was on the Respondent to show evidence of any sum received by the
Receiver/Manager on behalf of the Appellant, the purported illegal
withdrawal by the Appellant, or that the Respondent had paid any
part of the N10 million which he guaranteed to pay. Conversely,
counsel for the Respondent submitted that the Respondent had
disclosed a fair probability of a defence in the affidavit filed in
support of his Notice of Intention to Defend, and the Court of
Appeal was correct in holding that he ought to have been given the
opportunity to defend the suit.

Court’s Judgement and Rationale

On the objection raised by the Respondent to the competence of
Ground 2 from which Issue One was formulated, the court held that a
ground of appeal will not be held to be incompetent, if the court
and the other side are not in doubt as to what the complaint is.
The court is to look at substance over form in furtherance of its
duty to do substantial justice between parties, and not be bogged
by technicalities. Thus, the Ground of Appeal was competent,
because by its wordings and the particulars of error stated
thereunder, it was clear that it was challenging the decision of
the Court of Appeal on abuse of court process.

In resolving the first issue for determination, the court held
that before a suit can be said to amount to be an abuse of court
process on the basis of multiplicity of actions, the suit and the
suit it is claimed to be abusive of, must be between the same
parties; on the same subject-matter; and on the same issues –
OKORODUDU v OKOROMADU (1977) 3 SC 21; OKAFOR v A. G. ANAMBRA STATE
(1991) 6 NWLR (Pt. 200) 659 at 681. The three conditions must
co-exist for an abuse of court process to ensue.

The suit before the Federal High Court in FHC/L/CS/769/2004 was
essentially a suit instituted by the Receiver/Manager of Excellent
Manufacturers Ltd and two other Plaintiffs pursuant to the Deed of
Debenture, to protect the assets of the company and to prevent the
Respondent as the Chief Executive Officer and other Directors, from
tampering with them. On the other hand, the suit that gave rise to
the instant appeal was instituted by the Appellant against the
Respondent in his personal capacity as a guarantor for the debt
owed by the company, based on his unequivocal and irrevocable
undertaking in the Deed of Guarantee. The court noted that company
is separate and distinct from the Respondent, and the company was
not a party to the contract of guarantee. The most pertinent
indices to be considered for a suit to be termed an abuse of court
process, is that there are multiple actions between the same
parties over the same subject-matter which is not the position in
the instant case. It cannot therefore, be said that the Appellant’s
suit that led to the instant appeal constituted an abuse of
FHC/L/CS/769/2004, as the suits were on different subject matters,
independent of each other, and the reliefs sought in each suit were
completely different from the other.

On the 2nd issue, the court held that where a Defendant avers
that he disputes all or part of the claim, he must be specific as
to what part of the claim, he must be specific as to what part of
the claim he disputes and the real nature of the defence relied on
– NISHIZAWA LTD v JETHWANI (1984) 12 SC 234. All that was available
in the affidavit filed in support of the Respondent’s Notice of
Intention to Defend the suit, were mere speculative allegations.
The affidavit did not disclose any sum of money paid by the
Respondent in favour of the Appellant, or any sum of money received
by the Receiver/Manager to the credit of the Appellant in discharge
of the sum guaranteed by the Respondent. The Respondent’s affidavit
showed a mere posturing, rather than particulars and necessary
details required to sway the hand of the hands of a court to bring
in a Defendant to defend. Mere denial of the claim by the Defendant
of its indebtedness, is not sufficient. The Defendant must disclose
a defence or elicit a triable issue upon which it would be let in
to file and defend the suit, as required by the Rules of court.

Appeal Allowed; Decision of trial court
restored.

Representation

Emeka Mozia for the Appellant.

Obi Anizoba for the Respondent.

Reported by Optimum Publishers Limited, Publishers
of the Nigerian Monthly Law Report (NMLR)(An Affiliate of Babalakin
& Co.)