Thomas W. & Son (N. Nig. Ltd) v. P. I. Ltd: On Whether party who benefitted from agreement can allege same is illegal, voidable, or void-: An insight into the Court of Appeal decision in Thomas W. & Son (N. Nig. Ltd) v. P. I. Ltd.
Citation: 12 NWLR PT.1687 at PG. 540.
Courtesy: Moruff O. Balogun Esq.
Summary of facts
The respondent sued the appellant under the summary judgment procedure. It sought judgment for N35million as unpaid loan, 12 % interest per annum till date of judgment and 10% interest per annum thereafter until payment of the judgment debt; and costs. The respondent attached several documents to the affidavit in support of its motion for judgment. The documents included exhibit B-a letter dated 6th November 2008 that the appellant wrote to the managing director of the respondent, and by which the appellant sought the loan of N35 million at interest rate of 12% per annum repayable within 12 months; and exhibit C-a cheque dated 13th December 2008 issued by the respondent in favour of the appellant for the sum of N15million in a failed attempt to repay part of the loan.
In response, the appellant filed a statement of defence and counter-claim. It pleaded that it had no direct business transaction with the respondent, but with Mrs. Nenadi Usman, the chairman of the respondent’s board of directors. The appellant pleaded in its counter-claim that:
(a) the respondent had no powers by its objects, to carry out the business of granting loan and charging interest:
(b) the respondent was not licensed to give out loans; and
(c) by granting the loan, the respondent engaged in an act of illegality.
The appellant also sought leave to defend the action on the merits.
In its ruling, the trial court held that the loan agreement was not between the appellant and Mrs. Nenadi Usman, but between the appellant and the respondent. It held that the appellant was bound by the loan agreement and was liable to the respondent’s claims. It dismissed the appellant’s application for leave to defend the action.
It entered summary judgment in favour of the respondent.
The appellant appealed to the Court of Appeal. The appellant argued that the trial court ought to have granted it leave to defend the suit on the merits because:
The documentary exhibits the respondent attached to both its writ of summons and the motion for summary judgment were not certain as to whether the transaction was between the respondent and the appellant, or between the respondent and a non-party to the suit, Thomas Wyatt Nigeria Plc.
The appellant’s counter-claim ex facie raised triable issues. The respondent’s act of filing a further counter-affidavit to the appellant’s defence and counter-claim was evidence of a dispute worthy of being resolved at full trial. The documents exhibited and relied upon by the respondent in support of its claim for interest showed contradictory interest rates of 12% per annum in exhibit B and 18% per annum in the respondent’s letter of demand.
Held : (Unanimously dismissing the appeal)
The Court of Appeal raised and considered the following issues:
On Whether party who benefitted from agreement can allege same is illegal, voidable, or void-
A party to a transaction who has benefitted from the transaction cannot say such transaction is illegal or void or voidable in order to avoid fulfilling his obligation under the transaction so far as the other party has done all he pledged to do under the transaction. In this case, if the loan transaction was illegal, as asserted by the appellant, the appellant was a party to the transaction. Therefore, it is a case of mutual wrongdoing or illegality. Consequently, the appellant’s defence was an attempt to take advantage of its own wrong-doing, which is not permissible.
On Meaning and application of “Nemo ex suo delicto moliorem suam conditionem facere potest:
The maxim: “nemo ex suo delicto moliorem Suam conditionem facere potest” means “no one can improve his position by his own wrong doing”. In this case, the law will not permit the appellant who took the respondent’s N35million, to turn around to refuse to repay the loan by alleging that the loan was illegally given to it.
On Whom lies burden of proof of assertion-
The party who makes an assertion has the burden of proving it. In this case, the appellant had the onus of proving its assertion that the respondent had no powers under its objects to grant loans, but it did not do so because it failed to exhibit the memorandum and articles of association of the respondent to prove its assertion that the objects of the respondent do not allow it to give loans.
On Purpose of summary judgment procedure and when applicable –
The summary judgment procedure in Order 11 of the High Court of Kaduna State (Civil Procedure Rules) 2007 serves as a quick way to judgment when the plaintiff is of the view that the defendant has no defence to his claim. The procedure is applicable where the facts are clear and straightforward. The procedure is appropriate for disputes that are not very intricate and do not call for a full hearing. When applied, the court saves the parties and itself the protraction and tedium that attends normal litigation. In this case, from the evidence before the trial court, the agreement for the loan of N35million at interest rate of 12% per annum was between the appellant and the respondent. The appellant’s argument that the agreement was between the respondent and Mrs. Nenadi Usman was baseless.
In the circumstance, the trial court rightly entered summary judgment in favour of the respondent.
Moruff O. Balogun Esq.
Ijebu Ode, Ogun State.