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News - 23 January 2020

In the Supreme Court case of Joseph Uzor & Anor and Daewoo Nig. Limited & Anor (SC. 251/2008) delivered on 25th January 2019, the central issue was whether the Court of Appeal was right in finding that the trial Court had no jurisdiction to entertain the suit on the grounds that the writ of summons sought for reliefs other than liquidated money demand alone.

Brief facts of case

The Appellants (Mr Joseph Uzor) were retained by the 1st Respondent (Daewoo Nig. Limited) to submit 2 volumes of house boat drawings/designs for 100 Offshore Personnel of the 1st Respondent. M. Y. W. Chung, the Project Manager of the 1st Respondent, in a letter dated 26th June 1994, acknowledged receipt of the drawings and stated that the boat construction contract will be awarded to the Appellants but in case of delay or failure, the Appellants will be paid the cost of the drawings/designs and adequate compensation.

When the contract was not awarded to the Appellants, their Legal Practitioner wrote a demand letter to the 1st Respondent demanding for the cost of the drawings and damages for the treatment in which the 1st Respondent meted to the 1st Appellant. In response to the demand letter, Mr Chung apologised for unduly assaulting the character of the 1st Appellant through the use of foul language on him. He then undertook to pay the Appellants the sum of N 700, 000 (Seven Hundred Thousand naira) for 2 volumes of the house boat designs and the sum of N 500, 000 (Five Hundred Thousand naira) being general damages.

Mr Chung also agreed to pay the sum of N 1, 000, 000 (One Million naira) to the Appellants for undue assassination of the character of the 1st Appellant and the sum of N 50, 000 (Fifty) Thousand naira for personal injuries on him. Mr Chung directed the Appellants to pick up the total amount of N 2, 250, 000 (“the total sum”) at the 1st Respondent’s Port Harcourt office on 29th March 1996.

Case at the trial Court

Upon failure of 1st Respondent to pay the Appellants the total sum as promised, the Appellants, commenced an action under the undefended list procedure of the High Court of Cross River State to recover the total sum plus the sum of N 500, 000 (Five Hundred Thousand naira) for unauthorised transfer and passing-off of the Appellants’ house boat drawings and designs (“damages for passing-off”) resulting in N 2, 750, 000 (“the claimed sums”) as liquidated sums.

The trial Court, who was convinced of the Appellants’ case, entered judgment under the undefended list procedure on 24th February 1997 for the claimed sums with interest till payment, is effected.

Case at the Court of Appeal

Dissatisfied with the judgment, the Respondents appealed to the Court of Appeal and the Court allowed the appeal and set aside the judgment of the trial Court. The basis for the decision of the Court of Appeal is that a writ of summon which contained reliefs for assault, character assassination, personal injuries, delay and breach of contract, unauthorised transfer and passing-off cannot be said to be a claim to recover a liquidated sum. Again, the trial Court had no jurisdiction to hear or award damages for passing-off.

Arguments at the Supreme Court

The Appellants

The Appellants contended that contrary to the decision of the Court of Appeal, there was no evidence where the Appellants indicated that their claims were based on assault rather the 1st Respondent agreed to pay a liquidated sum of money to the Appellants and the suit was instituted to recover the agreed sum which sum was confirmed by Mr Chung’s letter. The Court of Appeal was therefore wrong to disregard this important piece of evidence.
The Appellants further contended that they had complied with the rules of Court for the matter to be heard under the undefended list procedure and the Court of Appeal ought to have interpreted and applied the law accordingly. Mr Chung’s letter speaks for itself and cannot speak through the testimony of witnesses or any argument put forward. The wordings of the letter operated to confer jurisdiction on the trial court as per the liquidated claim.

The Appellants concluded that the Court of Appeal misunderstood the case put forward at the trial court and ignored the letter of apology of Mr Chung which gave rise to the suit. Since the Court of Appeal took an erroneous view of the case, its findings were perverse as such the Supreme Court should interfere and reverse the decision.

The Respondents

In response, the Respondents contended that the claim before the trial court was not for liquidated money demand and could not have been validly brought under the undefended list procedure. The action was not for the agreed sum. The claims of the Appellants as endorsed on their writ of summons necessitated the taking of evidence to prove the damages the 1st Appellant suffered which would enable the Court to assess the quantum of damages. The 1st Appellant ought to establish that he has a character that has been assassinated and the damages thereof.

The Respondents also contended that the condition precedent to invoke the jurisdiction of the trial Court was not fulfilled and therefore the Court was not competent to entertain the suit under the undefended list procedure. Since the Federal High Court is vested with the sole jurisdiction over matters related to passing-off, the trial Court lacked jurisdiction to hear and determine the Appellants’ claim for passing off which was endorsed on the writ. The Respondents urged the Supreme Court to dismiss the appeal because the Appellants’ claim did not constitute claims for recovery of debts or liquidated money demand. 

The Judgment of the Supreme Court

The Supreme Court found that the nature of debt envisaged by the rules of Court under the undefended list procedure must be monetary debt or liquidated money demand. This procedure applies throughout Nigeria except Lagos. In most States, the procedure is available in respect of claims to recover a debt or liquidated sum of money.

The Court also found that 2 (two) key issues are central under the rules. First, the amount claimed and second, that there is no defence to the claim. The Court of Appeal should have averted its attention to the letter of apology written by the Respondent which speaks for itself. The letter states the object, the nature and admitted specific sums which the Appellants claimed before the trial Court. The letter even gave a pick up date of the total sum.

The Supreme Court opined that had the Court of Appeal averted its mind to the far reaching letter of apology, it would have come to a different conclusion. The 1st Respondents clearly defaulted to honour its own undertaking. As such beyond the needless resort to technicalities, the amount is a liquidated demand for which the Appellants had justifiable reason to pursue under the undefended list procedure.

The Court found that the Respondents’ attempt to impeach the judgment of the trial Court was flawed because it is the actual claims that confers jurisdiction on the Court. The Appellants’ claims bordered on admitted debt and failure of the 1st Respondent to honour its own letter and undertaking.

The Supreme Court held that the Court of Appeal erred in law in its decision that the trial Court had no jurisdiction to hear the suit under the undefended list procedure. The judgment of the trial Court was restored and allowed in part. The Court ordered the Respondents to pay the claimed sum less damages for passing off which the trial Court does not have jurisdiction to entertain.

Conclusion

From the foregoing, it is clear that the cause of action which culminated to an admitted or liquidated sum is immaterial for a matter to be brought under the undefended list procedure. The pertinent question is, is there any evidence of a liquidated money demand to necessitate instituting a suit under the undefended list procedure? If the answer is in the affirmative, then the claimant can institute an action under the relevant rules to recover the liquidated sum under the undefended list procedure.


Emmanuel Ekpenyong Esq. FCIArb

Emmanuel Ekpenyong Esq. FCIArb

Firm: Fred-young & Evans LP
Country: Nigeria

Practice Area: Corporate