After nine years of legal gymnastics in suit number FHC/L/CS/1212/2014, filed by the Asset Management Corporation of Nigeria, AMCON, against GMT Securities & Asset Mgt. Co. Ltd., a Federal High Court in Ikoyi, Lagos, in its judgment said GMT should pay AMCON the sum of N521,950,000.00.
A breakdown of the figure as awarded on Friday, 24 November, 2023, by Hon. Justice C. J. Aneke showed that the Defendant/Judgment Debtor should pay AMCON the sum of:
I. N25,000,000.00 (Twenty-Five Million Naira Only) plus 10% post judgment interest to the Claimant.
II. N474,500,000.00 (Four Hundred and Seventy-Four Million, Five Hundred Thousand Naira only) plus 10% post judgment (N47,450,000.00) interest.
But it was not a total knockout against GMT as the Judge delivered judgment in favour of both parties. He ordered Restoration of the shares and their corresponding units listed by GMT.
Justice Aneke, however, refused to award cost of the suit. “Since both the Claimant and the Defendant/Counterclaimant partially succeeded in their claim and counterclaim, I make no order as to costs,” he said.
The trial was indeed a long process between 2014 when AMCON instituted the case against GMT Securities & Asset Mgt. Co. Ltd and 2023 when the Judge delivered judgment.
The full trial as recorded by Justice Aneke and his judgment below:
“On 15-8-14 the Claimant filed an undated Writ of Summons which a Statement of Claim dated the same 15-8-14 in which it claimed the following reliefs in paragraph 34 of the said Statement of Claim that is:
1. A DECLARATION that the Defendant is indebted to the Claimant in the sum of N437,269,549.15 (Four Hundred and Thirty Seven Million, Two Hundred and Sixty Nine Thousand, Five Hundred and Forty Nine Naira, Fifteen Kobo) only being the outstanding indebtedness of the Defendant to the Claimant as at January 1, 2011.
2. JUDGMENT IN THE SUM of N437,269,549.15 (Four Hundred and Thirty Seven Million, Two Hundred and Sixty Nine Thousand, Five Hundred and Forty Nine Naira, Fifteen Kobo) only being the outstanding indebtedness of the Defendant to the Claimant.
3. AN ORDER for the foreclosure of all rights, title, interest, benefits, receivable and proceeds arising from and in connection with the lien on shares of blue chip companies (the collateral), used as security for the facilities and contained in the Zenith Securities Limited, in which the interest of the Zenith Bank Plc. is noted and kept in the custody of the Central Securities Clearing Systems (CSCS)
4. AN ORDER for the sale of the shares of blue chip companies used as collateral for the overdraft facilities granted to the Defendant by Zenith Bank Plc and subsequently acquired by the Claimant, in part satisfaction of the total such amount which the value of the said shares may accrue in the stock market.
5. INTEREST at the rate of 17% per annum before Judgment and 15% per annum after judgment until liquidation of the Defendant’s indebtedness.
6. The sum of N3,000,000.00 (Three Million Naira) only being the cost of this action.
Thereafter the Claimant filed other processes as required by the Rules of this court. In Paragraphs 4, 8, 11, 13, 15, 23 and 24 of the said Statement of Claim the Claimant averred as follows:
7. By a duly executed offer letter dated January 3, 2006, the legacy bank granted the Defendant an overdraft facility in the sum of N25 Million (Twenty-Five Million Naira). The agreed collateral was a lien on the shares of 18 blue chip companies. The Claimant shall at the trial of this suit rely on the offer letter dated January 3,2006.
8. The Claimant avers that by yet another duly executed offer letter dated 11 July 2007, the legacy bank at the request of the Defendant granted an additional overdraft facility in the sum of N125,000,000.00 (One Hundred and Twenty Five Million Naira) only. The collateral for the facility was stocks of blue chip companies pledged and Warehoused in a special account with Central Security and Clearing Systems (CSCS). The Defendant was also required to open a CSCS special account on behalf of Zenith Bank Plc. and Rolex Securities with Zenith Bank Plc. as sole signatory to the account. The facility was duly accepted by the Defendants Board Resolution dated 17 July, 2007. The Claimant shall at the trial of this suit rely on the said offer letter and Board Resolution mentioned herein.
11. The Claimant further avers that by yet another duly executed offer letter dated January 18, 2008, the legacy bank again granted the Defendant, at its request, an enhancement of credit facility increases of N75,000,000.00 (Seventy Five Million Naira) only, in addition to the existing N125,000,000 (One hundred and twenty five million naira) only mentioned in paragraph 8 above to enable the Defendant finance working capital requirements for trade in stock and shares. The collateral for the facility was stocks of blue chip companies pledged and warehoused in a special account with the Central Securities Clearing Systems (CSCS). The Claimant shall at the trial of this suit rely on the said Offer Letter mentioned herein.
13. The Claimant avers that the legacy bank disbursed the facility to the Defendant, who made a full drawdown of same.
15. The Claimant further avers that as at 1 January 2011, the total indebtedness of the Defendant, comprising the principal and the accrued interest to the legacy bank stood at N437,269,549.15 (Four Hundred and Thirty Seven Million, Two Hundred and Sixty Nine Thousand, Five Hundred and Forty Nine Naira, Fifteen Kobo) only.
23. That Claimant avers that pursuant to its statutory mandate, it purchased the Non-Performing Loan of the Defendant to the Legacy Bank by a Loan Purchase & Servicing Agreement executed between the Legacy Bank and the Claimant. The Claimant will at the trial rely on a copy of the Loan Purchase and Limited Servicing Agreement.
24. The Claimant avers that by a letter dated February 18, 2011, the legacy bank wrote to the Defendant notifying it of the Assignment of the Defendant’s Loan/Loan Rights to the Claimant, and its acknowledgment of the said assignment. The Defendant acknowledged receipt of the said letter. The Claimant shall rely on the letter dated February 18, 2011 at the trial and the Defendant is hereby notified to produce its original.
On 13-10-2022 the Defendant/Counterclaimant filed its Further Amended Statement of Defence and Counterclaim dated 30-3-2022. In paragraphs 3, 3i, 3ii, 3iv, 3vii, 3viii, 3ix, 3x, 3xi, 4ix, 11, 13, 14 and 21 of the said Further Amended Statement of Defence and Counterclaim the Defendant/Counterclaimant pleaded as follows:
3 In further answer to Paragraphs 3, 4,5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 and 16 of the claim the Defendant avers as follows that:
i) Contrary to the averment in the claim, the transaction between parties was a margin loan of N25,000,000 (Twenty Five Million Naira Only) which was to be enhanced from time to time based on the good performance of the Defendant which performance was measured strictly by the repayment made by the Defendant between 2006 to 2008 when the facility/margin loan was in place.
ii) The Defendant avers that contrary to its belief and the parties’ intention, there was no multiple credit facilities as averred in the claim or as articulated by the various letters of offers pleaded in the claim, as forensic investigation revealed, and from 2008 the offer letter of January 18, 2008(Exhibit A6) governed the transaction between the parties.
iv) The shares used as collateral was (sic) deposited in a joint account with Central Securities Clearing Systems Limited, and was to be managed by both parties, however as soon as or at the time dispute arose as to the amount of debt, the Claimant through legacy Zenith Bank Plc., exercised sole and absolute control over the shares to the exclusion of the Defendant and even refused pleas by the Defendant to sell some of the shares to clear the alleged and disputed debt of N140,000,000 (One Hundred and Forty Million Naira Only) which the legacy Zenith Bank at that time in 2009 claimed was owing and due to it from the Defendant after receiving N860,000,000.00 (Eight Hundred and Sixty Million Naira Only) from Union Bank Plc., on account of the Defendant for the transfer of the trading account to Union Bank Plc., from legacy Zenith Bank Plc.
vii) The transfers or deposits made to repay the loan from the records available to the Defendant between 2006-2008, amount to the sum of N665,208,101.70 (Six Hundred and Sixty-Five Million, Two Hundred and Eight Thousand, One Hundred and One Naira, Seventy Kobo Only).
viii) The said repaid sum is well over and above the disputed sum of and Sixty-Nine Thousand, Five Hundred and Forty-Nine Naira, Fifteen Kobo Only) alleged to be due and owing to the Claimant/legacy bank.
ix) The above said sum of N665,208,101.70 (Six Hundred and Sixty-Five Million, Two Hundred and Eight Thousand, One Hundred and One Naira, Seventy Kobo Only) were paid into the facility account as follows:
Date Amount
a. 28/02/2006 237,660.52
b. 20/07/2006 3,200,398.32
c. 31/01/2007 26,558,301.44
d. 09/02/2007 10,000,000.00
e. 09/02/2007 20,465,082.50
f. 22/03/2007 11,843,345.64
g. 22/05/2007 10,000,000.00
h. 30/5/2007 22,001,972.73
i. 04/06/2007 181,437.22
j. 05/06/2007 7,189,324.31
k. 06/06/2007 26,177,185.48
1. 07/06/2007 12,487,796.90
m. 08/06/2007 17,592,114.60
n. 11/06/2007 6,679,930.01
o. 15/06/2007 5,500,000.00
p. 08/08/2007 8,497,397.14
q. 10/08/2007 32, 190,692.84
r. 13/08/2007 22,698,208.39
s. 22/11/2007 50,000,000.00
t. 22/11/2007 125,845,842.08
u. 22/08/2007 30,000,000.00
v. 23/08/2007 50,000,000.00
w. 31/01/2007 19,767.72
x. 04/12/2007 104,153,670.76
y. 04/12/2007 19,575,069.12
z. 05/12/2007 38,768,344.39
Total = N665,208,101.70 (Six Hundred and Sixty-Five Million, Two Hundred and Eight Thousand, One Hundred and One Naira, Seventy Kobo Only).
x) The aforesaid transfers/payments into the facility account, were made from accounts numbers: 601074386 and 6010715885 maintained for the Defendant by legacy Zenith Bank at its Marina Branch, Lagos. The Defendant shall rely on the bank statements of account on both accounts for the relevant period, supplied by the legacy bank for the two afore-mentioned accounts which recorded the transfers and hereby plead them. Notice to produce both the originals is hereby given to the Claimant.
xi) The Defendant avers that from the records of the two accounts as afore-mentioned, it liquidated the entire margin loan, had the legacy bank honestly paid the transferred sums into the facility account it kept for the Defendant or recorded same correctly.
4ix) The Claimant through Legacy Zenith Bank have refused to avail the when dispute arose and avers that the transactions shown in Account No.1011847154, domiciled in Zenith Bank Head Office, at Ajose Adeogun Street, Victoria Island, Lagos; from 2009, without foundation or basis or history is fraudulent, deceitful, strange, dubious, unknown and cannot be substantiated. Further the Defendant contends that it is entitled to the full details and history of transaction prior to the magic date of 2009 presented by the Claimant in that account.
11. That from the claim filed by the Claimant/Defendant to the Counterclaim, the sum totaled, N665,208,101.70 (Six Hundred and Sixty-Five Million, Two Hundred and Eight Thousand, One Hundred and One Naira, Seventy Kobo Only) made into the facility account was not recorded in the facility account or considered as reduction/repayment of the enhanced margin loan by the 2nd Defendant to Counterclaim as it ought to. In fact, about N95,000,000.00 (Ninety Five Million Naira) only out of this sum of N665,208,101.70 (Six Hundred and Sixty-Five Million, Two Hundred and Eight Thousand, One Hundred and One Naira, Seventy Kobo) only not accounted or recorded by the Claimant/Defendant to Counterclaim were funds or proceeds of shares sold and belonging to one of the Defendant’s client, namely, Benue Investment & Property Co. Ltd.
13. That the Defendant/Counter Claimant, in view of the several lodgments, debits and or repayment totaling N665,208,101.70 (Six hundred and sixty five million, two hundred and eight thousand, one hundred and one naira, seventy kobo) which was not captured by the legacy bank as articulated in the statement of account attached to the claimants claim, is entitled to a refund of the said sum of N665,208,101.70 (Six hundred and sixty five million, two hundred and eight thousand, one hundred and One Naira, Seventy Kobo Only) with interest, from the Claimant/Legacy bank/Defendants to Counterclaim.
14. The Defendant/Counterclaimant engaged the services of a firm of forensic accountants, Messrs Stephen Ezeagu & Co to examine the records of the transaction between it and the Claimant/Legacy Zenith Bank and avers that from the loan repayment report of the accountants, the Defendant/Counterclaimants has repaid the loan in full in 2007 and indeed the Claimant through the Legacy Zenith Bank is in fact indebted to the Defendant in the sum of N1,744,232,173.16 (One Billion, Seven Hundred and Forty-Four Million, Two Hundred and Thirty-Two Thousand, One Hundred and Seventy-Three Naira, Sixteen Kobo) only as at 28th February,2015.
21. The Defendant/Counterclaimant’s various shares and their respective or corresponding quantities/units, pledged as collateral and still in custody of the Claimant and 2nd Defendant to the Counterclaim are as follows: –
i) AFRIBANK- 50,012
ii) ALLCO- 22,500
iii) AP- 2,963
iv) BCC- 300,000
v) DIAMOND – 1,836,000
vi) ETERNAOIL- 1,657,579
vii) EOUITY – 500,000
viii) FCMB- 48,764
ix) FIDELITY – 137,341
x) FBN- 43,000
xi) FINBANK- 71,581
xii) GTB – 3,585
xiii) JAPAUL- 1,000,000
xiv) LASACO- 10,021,023
xv) LIVESTOCK – 5,000,000
xvi) MOBIL- 231
xvii) WEMA- 686,633
xviii) UNIVERSAL INS. 20,400
xix) WAPCO-2,323
XX) INTERNATIONAL ENERGY – 6,400
xxi) NAHCO- 2478
xxii) NASCON- 219,502
xxiii) NEM- 23.998.297
xxiv) NESTLE- 500
XXV) OANDO- 1,829
xxvi) PHB-600
xxvii) SKYEBANK- 130,248
xxviii) STACO – 28,562
xxix) STERLING BANK – 15,000,000
xxx) THOMAS WATT – 3000
xxxi) TRANSCORP – 53,548
xxxii) UACN – 191,883
xxxiii) UBA- 827,300
xxxiv) UBN- 2,433
xxxv) UNILEVER- 870
xxxvi) UNITY BANK- 3800
xxxvii) VONO – 3,870
In Paragraph 22 of the said Further Amended Statement of Defence and Counterclaim the Defendant/Counterclaimant counterclaim as follows:
22a. The payment or refund of the sum of N1,744,232,173.16 (One Billion, Seven Hundred and Forty-Four Million, Two Hundred and Thirty-Two Thousand, One Hundred and Seventy-Three Naira, Sixteen Kobo) only as at 28th February,2015, being principal sum and or wrongful deductions and interest accrued, made from the Defendants main account No. 6010714386 and trading account No. 6010715885; for the credit of facility account No. 6010718509, but which sum was not credited to the facility account.
b. 17% interest on the said sum of N1,744,232,173.16 (One Billion, Seven Hundred and Forty-Four Million, Two Hundred and Thirty-Two Thousand, One Hundred and Seventy-Three Naira, Sixteen Kobo) only N665,208,101.70 (Six Hundred and Sixty-Five Million, Two Hundred and Eight Thousand, One Hundred and One Naira, Seventy Kobo Only) from 1st March 2015 until judgment.
c. An Order to return/surrender to the Defendant all the shares in the shares portfolio listed and collected as security by the 2nd Defendant to the Counter-claim.
d. An Order to account for and refund all accumulated dividends and bonuses approximately N350,000,000.00 (Three Hundred and Fifty Million Naira) only, for all the shares in the portfolio
since the year 2008.
e. Payment of the sum N4,940,000,000.00 (Four Billion, Nine Hundred and Forty Million Naira) only as market returns on all the shares in the portfolio, rate of 38% per annum of the Nigeria Capital Market Returns Index, since 2008 till 2017.
f. N5,000,000.00 (Five Million Naira) being cost of this action.
g.15% interest on the judgment sum, until sum be fully liquidated.
On 15-12-2015 the Claimant filed Claimant’s Amended Defence to Counterclaim dated 15-12-2015. In paragraphs 17, 18, 19 and 35 of the Claimant’s Amended Defence to Counterclaim the Claimant states as follows:
17. The Claimant strongly asserts that on 25th June 2008, two (2) Union Bank of Nigeria Manager’s Cheques valued at N215.5 Million only (Two Hundred and Fifteen Million and Five Hundred Thousand Naira only) and N259 Million (Two Hundred and Fifty Nine Million Nair only) respectively were lodged into the facility account (with Account Number 6010718509) with the Marina Brach of the Legacy Bank by Ebi Odeigah, the Managing Director of the Defendant. This is evidenced by the Deposit Slip
No. 5144016 of the legacy bank dated 27th June 2008. The said Union Bank Cheques dated 25th June 2008 as well as the Deposit Slip dated 27th June 2008 are hereby attached and jointly marked as EXHIBIT ABY 6A-C.
18. Further to the paragraph above, the lodgment of the two cheques reduced the debit balance in the facility account to N214,245,946.20 (Two Hundred and Fourteen Million, Two Hundred and Forty-Five Thousand, Nine Hundred and Forty-Six Naira and Twenty Kobo only) as at close of business on June 30 2008.Thereafter, the debit balance continued to accrue interest and charges which grew to the closing debit balance of N437,269,549.15 (Four Hundred and Thirty Seven Million, Two Hundred and Sixty Nine Thousand, Five Hundred and Forty Nine Naira and Fifteen Kobo) only until it was sold to the Claimant in 2010.
19. The Claimant further avers that contrary to the false assertion of the Defendant that the transfers and payments made into the facility account was to repay the loan, the actual purpose of the various transfers was simply to settle the net position of the Defendant resulting from the buying and selling of shares on the floor of the stock exchange. This is because the outstanding debt position of the Defendant resulting from trade had to be settled at a point in the Trade and Settlement account.
35. WHEREOF the Claimant contends that the Defendant/Counterclaimants Counterclaim is misguided, frivolous, vexations and utterly without merit and liable to be dismissed by this Honourable Court. The Claimant further claims against the Defendant/Counterclaimant as follows:
1. A DECLARATION that the Defendant is indebted to the Claimant in the sum of N437,269,549.15 (Four Hundred and Thirty Seven Million, Two Hundred and Sixty Nine Thousand, Five Hundred and Forty Nine, Fifteen Kobo) only being the outstanding indebtedness of the Defendant to the Claimant as at January 1, 2011.
2. JUDGMENT IN THE SUM of N437,269,549.15 (Four Hundred and Thirty Seven Million, Two Hundred and Sixty Nine Thousand, Five Hundred and Forty Nine Naira, Fifteen Kobo) only being the outstanding indebtedness of the Defendant to the
Claimant.
3. AN ORDER for the foreclosure of all rights, title, interest, benefits, receivable and proceeds arising from and in connection with the lien on shares of blue chip companies (the collateral), used as security for the facilities and contained in the Schedule of Stock Valuation which have been moved to the dedicated account of Zenith Securities Limited, in which the interest of the Zenith Bank Plc. is noted and kept in the custody of the Central Securities Clearing Systems (CSCS).
4. AN ORDER for the sale of the shares of blue chip companies used as collateral for the overdraft facilities granted to the Defendant by Zenith Bank Plc. And subsequently acquired by the Claimant, in part satisfaction of the total indebtedness of the Defendant as contained in the Table of Stock Valuation or such amount which the value of the said shares may accrue in the stock market.
5. INTEREST at the rate of 17% per annum before judgment and 15% per annum after judgment until liquidation of the Defendants indebtedness.
6. The sum of N3,000,000.00 (Three Million Naira) only being the cost of this action.
On 17-9-2019 the 2nd Defendant filed Amended Statement of Defence of the 2r Defendant to Counterclaim dated 17-9-2019. In paragraphs 2, 3, 4, 4a, 4b, 4c, 4d, 4h, 55a, 5e, 8, of the said 2nd Defendants Amended Statement of Defence, the 2nd Defendant to Counterclaim stated as follows:
3. Further to the above, the 2nd Defendant to the Counterclaim denies the fact that the aforesaid loan was jointly used by the Counterclaimant and 2nd Defendant to the Counterclaim for the purchase of the shares of blue chip companies, rather a joint account in the names of the Counterclaimant and 2nd Defendant to Counterclaim was created over the stock of the Counterclaimant with the Central Securities Clearing System (CSCS), to enable the 2nd Defendant to Counterclaim to realize the sum outstanding against the Counterclaimant upon default of the facility/loan advanced by the 2nd Defendant to Counterclaim to the Counterclaimant.
4. In further response to paragraphs 6, 7, 10, 11, 12, 13, 14 and 15 of the Counterclaim, the 2nd Defendant to Counterclaim avers as follows:
a. That by accepted offer credit facility dated January 03, 2006, the Counter claimant (then known as Rolex Securities Ltd) was availed an overdraft facility of N25,000,000.00 (Twenty Five Million Naira) for a period of twelve (12) months, which offer was secured by a lien on shares of 18 blue chip companies. The purpose of this facility was “to trade in stock of blue chip companies and finance other working capital requirements” for the sole benefit of the Counterclaimant. A copy of Memorandum of Stock Deposit dated 18/02/2006 and offer of the credit facility dated 1/03/2006 duly executed by the Counterclaimant are hereby pleaded and shall be relied on during trial and notice is hereby given to the Counterclaimant to produce the original.
b. That by an accepted offer letter dated July 11, 2007 the overdraft facility was renewed and enhanced up to the sum of N125,000,000.00 (One Hundred and Twenty Five Million Naira) for a further period of 12 months and for the purpose of financing working capital requirements. The enhanced facility was equally secured by a lien on shares of some blue chip companies. A copy of the offer letter of facility dated 11, July 2007 is hereby pleaded shall be relied upon during trial. Notice is hereby given to the Counterclaimant to produce the original.
c. That by another offer letter dated January 18, 2008, the overdraft facility was further renewed and enhanced up to the sum of N200,000,000.00 (Two Hundred Million Naira) for a further period of 12 months and for the purpose of financing working capital requirements. The enhanced facility was equally secured by a lien on shares of some blue chip companies. A copy of offer letter dated January 18, 2008 duly accepted by the Counterclaimant is hereby pleaded and notice is given to the Counterclaimant to produce the original.
d. That the tenor of the overdraft facilities has since expired and the Counter claimant failed, refused and neglected to meet its obligation to the 2nd Defendant to the Counterclaim.
h. That in accordance with the terms of the accepted offer letters, interest continued to accrue on the Counterclaimants exposure to the 2nd Defendant to Counterclaim until December 31, 2010 when the Counterclaimants debt, which stood at N439,785,346.55 at the time, in account No. 1011847154 was transferred to the 1st Defendant to the Counterclaim (AMCON).
5. That in further denial of paragraphs 6 of the Counterclaim (i.e. Paragraph 3 vi to 3 ix of the Statement of Defence) the2nd Defendant to Counterclaim avers as follows:
a. That the various sums listed in Paragraph 6 of the Counterclaim were incorrect and all the money paid from Account No. 6010714386 (now 1010575439) and Account No. 6010715885 (now 101669733) into the Counterclaimant Facility Account No. 6010718509 (now 1010896856) and were insufficient to satisfy the debt.
e. That the cost of COT (commission on turn over) and interest at the agreed rate also continued to accrue in account No. 1011847154 until Counterclaimant’s debt, which stood at N439,785,346.55 at the time, in account No. 1011847154 was transferred to the 1st Defendant to the Counterclaim (AMCON).
8. Further to paragraphs 6 above, the 2nd Defendant to the Counterclaim avers that the claim of N665,208,101.70 which was alleged to have been paid into the facility account as repayment of its loan is contrived by the Counterclaimant as no such payment was ever made.
On 15-11-18 one Okwudili Ikegwuonu testified as P.W.1 for the Claimant. P.W.1 adopted his statement on oath made on 12 – 11- 18 as Exhibit A1. He also tendered Exhibits A2, A3, A4, A5, A6, A7, A8, A9, A10, A11, A12, A13, A14, A15, A16 and A17. P.W.1 testified that the Defendant maintained one facility account, one current account and one trade settlement account. Under cross examination by the Defendant, Exhibits A18, A19 and A20 were tendered by the Defendant through P.W.1. P.W.1 testified under cross examination that from Exhibit A18 the Claimant is aware that the Defendant disputed the debt. P.W.1 testified that the Defendant made a full draw down upon the grant of the loans as per the statement of account and that every transaction on the said statement of account is a draw down on the facility. P.W.1 testified under cross examination that transactions are different from payments of loans and that they are credit transactions in the Defendant’s account but that they do not translate to payment of the facility granted. Referred to the last 3 pages of Exhibit A7 on 28-2-10- 31-12-10 and P.W.1 testified that it is correct that COTs were charged without any transaction. This was after he stated that COTs are charged on debit transactions initiated by the customer through the Bank.
On 10-12-2019 one Ucheoma Ann Duru testified for the Claimant as P.W.2. P.W.2 works with Zenith Bank Plc. P.W.2 adopted her Statement on Oath deposed to on 18-1-19 as Exhibit A20.
P.W.2 also tendered Exhibit A21. P.W.2 testified that she did not carry out the postings in the statement of account but that the statement of account of the Bank is accurate.
Further cross examined P.W.2 testified that she did not know whether the Defendant was charged management fees, processing fees and commitment fees monthly. Shown Exhibit A7 in respect of the facility account and P.W.2 confirmed that cheques were paid in respect of the facility account.
On 12-7-2021 one Stephen Okwuonu Ezeagu testified for the Defendant/Counterclaimant as D.W.1. D.W.1 is a Chartered Accountant. He adopted his Statement on Oath made on 14-4-15. D.W.1 tendered Exhibit D1 – called Loan Repayment Report.
D.W.1 testified under cross examination that he did not audit the Defendant/Counterclaimant’s account but that he analyzed the Defendant/Counterclaimant’s Statement of Account and offer letter.
On the same 12-7-2021, one Chief Ebi Odeigah testified for the Defendant as D.W.2 and adopted his Statements on Oath made on 14-4-15 and 21-9-17. D.W.2 also tendered Exhibits D2, D3, D4, D5 and D6. He also tendered Exhibits D7, D8, D9, and D10.
Cross examined, D.W.2 testified that the figures stated in paragraphs 3ii of his Statement of Defence were taken from the statement of account supplied by Zenith Bank Plc.
On 16-3-2022 one Uche Duru, a Staff of Zenith Bank, testified as D.W.3. D.W.3 adopted her Statement on Oath made on 17-9-19 as Exhibit D11. D.W.3 admitted that she testified as P.W.2 for the Claimant.
On 27-4-2022 the Defendant/Counterclaimant filed a Final Written Address dated 26-4-2022 in which it framed two (2) issues for determination, that is:
(a) “Whether the Claimant has proved its case against the Defendant?
(b) Whether the Defendant’s Counterclaim has merit?”
On issue (a) the Defendant/Counterclaimant submitted that in order for the Claimant to succeed it must show not only how it disbursed the funds as credit facilities to the Defendant but must also show clearly by evidence on how it arrived at the total sum it now claims as debt against the Defendant/Counterclaimant. It cited the case of WEMA BANK LTD. v. OSILARU (2008) 4 WRN 160. It submitted that the Claimant expect this court to study, investigate or carry out a forensic examination of the bulky Exhibit A7 of about 312 pages with thousands of entries spanning a period of about five (5) years and that it is not the duty of the court to embark on the voyage of discovery to link the documents with the evidence before it. It cited the case of ONISARE v. AREGBE-SOLA (2015) 13 NWLR (PT. 1882)205.
The Defendant/Counterclaimant also submitted that it is clear that it disputed the debt and P.W.2 and the Defendant to the Counterclaim, D.W.3, clearly revealed that the entries in the statement of accounts were wrongful and contrary to the agreed terms in Counterclaim listing its shareholdings in custody of the Claimant was admitted by P.W.1.
On issue (b), the Defendant/Counterclaimant submitted that its Counterclaim has merit because the evidence of D.W.1 and the Loan Repayment Report, Exhibit D1, prepared by D.W.1 was not contradicted under cross examination.
It submitted that D.W.2 proved that the monies that were deducted from his trading and main accounts were not posted to the facility account. It urged the court to grant its Counterclaim.
On 6-4-2022 the Defendant to the Counterclaim filed its final written address dated 6-4-2022 in which it raised two (2) issues for determination, that is:
(a) “Whether the Counterclaimant has proved its case on the preponderance of evidence as required by law?
(b) Whether the Counterclaimant is entitled to the reliefs sought?”
On issue (a) the Defendant to the Counterclaim stated that it is trite that for a Bank to succeed in proving debt outstanding in a customer’s account, the Bank has to prove how the debt balance was arrived at and that the bank has to demonstrate through the oral evidence of an official who is familiar with the accounts on how the debt balance was arrived at. It cited the cases of BILANTE INT LTD v. NDIC (2011) 15 NWLR (PT. 1270) and ANYAKWO v. ACB LTD (1976) 2 SC 4. It then submitted that the evidence of D.W.3 who also testified as P.W.2 has shown satisfactorily how the Defendant/Counterclaimant’s indebtedness arose.
It also submitted that the Counterclaimant through its witnesses have failed to prove its counterclaim as required by law. It submitted that the court is not bound to act on the evidence of an expert, in this case, D.W.1, especially where such evidence contradicts commonsense. It cited the case of OANDO NIG. PLC v. ADIJERE (W/A) (2013) 15 NWLR (PT. 1377) 374 and AKEREDOLU v. MIMIKO (2014) 1 NWLR (PT. 1388) 402.
On issue (b), the Defendant to the Counterclaim urged the court to hold that the Defendant/Counterclaimant has failed to prove its counterclaim and is therefore not entitled to the relief it sought in the counterclaim.
On 19-5-2022 the Plaintiff/Claimant filed its Final Written Address dated 18-5-2022 in which it framed only one issue for determination, that is:
“Whether having regard to the oral and documentary evidence before this Honourable Court, the Plaintiff is entitled to the reliefs sought in its Amended Defence to the Counterclaim and the Counterclaim ought not to be dismissed?
Arguing this issue the Claimant submitted that from the evidence before the court especially Exhibit A7 and from the oral evidence of D.W.2 that it is not in doubt that overdraft facility was granted to the Defendant through Exhibits A2, A4 and A6.
It further submitted that where a customer of a Bank admits taking a loan from the bank he has the responsibility of proving that he has repaid the loan by the use of Bank tellers of payments and acknowledgment receipts by the Bank or other such credible documents. It cited the cases of ISHOLA v. S.G.B. (1997) 2 NWLR (PT. 488) 405, BISOLA NIG.LTD v. MAINSTREET BANK LTD (2013) LPELR-22062 (CA) and OKOLIE v. MORECAB FINANCE NIG. LTD (2002) ALL FWLR (PT.369) 1164.
The Claimant submitted that it is evidence that the Defendant/Counterclaimant drew down on the overdraft facility and utilized it in the excess.
It also submitted that Exhibit D1 called a Loan Repayment Report made by D.W.1 was just made to mislead the court and that what D.W.1, an accountant, ought to have made is an Audit Report and that in any case, an Audit Report made by a party without opportunity given for impute from the other party affected by it cannot be countenanced by the court.
It cited the cases of ASIKPO v. ACCESS BANK (2015) LPELR 25845(CA)) and ASSENE (NIG.) LTD v. MIVERO PHARMA LTD & ANOR (2021) LPELR-56247 (CA).
On the Counterclaim of the Defendant/Counterclaimant, the Claimant submitted that the counterclaim must fail because the Defendant/Counterclaimant relied heavily on Exhibit D1 which was made without giving the Claimant the opportunity to make an impute. It urged the court to discountenance Exhibit D1.
Finally, the Claimant submitted that the Defendant/Counterclaimant has failed to show how the figures in paragraph 4.03 of its final written address were calculated in terms of the percentages made available in Exhibits A2, A4 and A6.
On 24-5-2022 the Defendant/Counterclaimant filed a Reply on Points of Law dated 23-5-2022. I have read the said Reply.
I have summarized the processes filed, the evidence of the witnesses and the submissions of the parties in their final written addresses.
Before I go to the issues for determination of this case, I would like to comment on one (1) fact, that is:
(1) The Claimant filed on 15-8-14 a Statement of Claim dated 15-8-14 wherein it claimed some reliefs.
On 15-12-2015 the Claimant filed Claimant’s Amended Defence to Counterclaim also dated 15-12-2015.
In paragraph 35 of the said Defence to Counterclaim the Claimant claimed some reliefs. I have not yet seen where a relief is claimed in a Statement of Defence. Claimant’s Amended Statement of Defence is a Defence to Counterclaim and nothing more. It can never metamorphose into a Statement of Claim. Therefore, paragraph 35 of the Claimant’s Defence to Counterclaim in which some reliefs were sought by the Claimant is hereby struck out.
In my opinion the issues for determination are:
(1) “Whether the Claimant proved the reliefs in its Statement of Claim?
(2) Whether the Defendant/Counterclaimant proved its Counterclaim?”
On issue 1, the Defendant/Counterclaimant submitted that:
- On issue a, the Defendant/Counterclaimant submitted that in order for the Claimant to succeed, it must show not only how it disbursed the funds as credit facilities to the Defendant but must also show clearly by evidence on how it arrived at the total sum it now claims as debt against the Defendant/Counterclaimant. It cited the case of WEMA BANK LTD, v. OSILARU (2008) 4 WRN. It submitted that the Claimant expect this court to study, investigate or carry out a forensic examination of the bulky Exhibit A7 of about 312 pages with thousands of entries spanning a period of about five (5) years and that it is not the duty of the court to embark on the voyage of discovery to link the documents with the evidence before it. It cited the case of ONISARE v. AREGBE-SOLA (2015) 13 NWLR (PT. 1882) 205. The Defendant/Counterclaimant also submitted that it is clear that it disputed the debt as shown in Exhibit A18.
I agree with this submission. In this case the Defendant/Counterclaimant clearly disputed the debt as shown in its cross examination of P.W.1, P.W.2 and D.W.3. See also the case of UNITY BANK PLC v. RAYBAN ENG. LTD (2018) 12 NWLR 214 AT 233-234 where Ogakwu, JCA, held as follows:
“This may well be so but I hasten to state that a statement of account cannot on its own, amount to sufficient proof to fix liability on a customer for the overall debt balance shown on the account. The reason for this is obvious. Section 38 of the Evidence Act 1990 (now Section 51 of the Evidence Act 2011) provides that “entries in books of account, regularly kept in the course of business are relevant whenever they refer to a matter into which a court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability.” So Exhibit D1, the statement of account, which shows the amount claimed by the appellant as the outstanding debit balance on its own alone is not sufficient for a court to enter judgment for the appellant on the counterclaim. The appellant was duty bound to adduce both documentary and testimonial evidence explaining clearly the entries in the statement of account to show how the overall debit balance was arrived at: Co-Operative Bank Ltd. v. Otaigbe (1980) NCR 215; Yesufu v. ACB (1981) 1-2 SC 74; Habib Nigeria Bank Ltd. v. Gifts Unique Nigeria Ltd. (2004) 15 NWLR (Pt. 896) 406 and WEMA Bank Plc v. Osilaru (2008) 10 NWLR (Pt. 1094) 150.”
In this case, neither P.W.1, nor P.W.2 nor D.W.3 explained the various entries in the various sums claimed against the Defendant/Counterclaimant. The Claimant therefore failed to prove the reliefs it claimed on the Statement of Claim.
However, that is not the end of the matter. In paragraphs 5, 6 and 7 of the Statement of Claim the Claimant averred as follows:
5. The tenor of the overdraft facility was twelve (12) months at an interest rate of 175 per annum, and repayable upon demand from cash flow from the operations of the Defendant. Other terms of the facility include Management fees of 0.019%, Processing fee of 0.25%, and Acceptance fee of 0.25%. The facility was duly accepted by the Defendant, pursuant to its Board Resolution dated 20th of February,2006.
6. The Claimant avers that the Defendant thereafter executed the Central Securities Clearing System (CSCS) Inter Member Transfer form consenting to the transfer of the shares pledged to Zenith Securities Limited as security for the credit facility, as mentioned in paragraph 4 above.
7. The Claimant avers that further upon the Defendant’s Board Resolution, the legacy bank disbursed the facility to the Defendant, who made a full drawdown of same.
In paragraphs 3, 3i, 3ii, and 3iii of the Defendant’s Further Amended Statement of Defence and Counterclaim dated 30-3-2022 and filed on 13-10-2022 the Defendant/Counterclaimant averred as follows:
3. In further answer to paragraphs 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 and 16 of the claim the Defendant avers as follows that:
i. Contrary to the averment in the claim, the transaction between parties was a margin loan of N25,000,000 (Twenty Five Million Naira Only) which was to be enhanced from time to time based on the good performance of the made by the Defendant between 2006 to 2008 when the facility/margin loan was in place.
ii. The Defendant avers that contrary to its belief and the parties’ intention, there was no multiple credit facilities as averred in the claim or as articulated by the various letters of offers pleaded in the claim, as forensic investigation revealed, and from 2008 the offer letter of January 18, 2008 (Exhibit A6) governed the transaction between the parties.
iii. The margin loan/facility was fully secured with shares jointly bought by the parties with the loan as enhanced and further the Defendant avers that the facility was earlier secured by additional 50% worth of shares belonging to the Defendant, thus the facility was at all material times 150% secured.
Moreover, the Defendant/Counterclaimant having denied that apart from the N25Million no other loans or enhancements were granted to it, the Claimant ought to have referred to the Statement of Accounts of the Defendant/Counterclaimant in its evidence to show where the other enhancements were paid in and utilized by the Defendant/Counterclaimant. The Claimant did not do this. Therefore, the other enhancements were not proved.
I therefore hold that the Defendant/Counterclaimant admitted the disbursement of N25,000,000 (Twenty Five Million Naira) by the Claimant to it.
I therefore award to the Claimant N25,000,000 (Twenty Five Million Naira) out of the sum of N437,269,549.15 (Four Hundred and Thirty Seven Million, Two Hundred and Sixty Nine Thousand, Five Hundred and Forty Nine, Fifteen Kobo) claimed by the Claimant as the Defendant/Counterclaimant’s indebtedness to it.
All other claims made by the Claimant are hereby dismissed as not proved.
On issue 2, the Claimant submitted that:
- “Where a customer of a Bank admits taking a loan from the bank he has the responsibility of proving that he has repaid the loan by the use of Bank tellers of payments and acknowledgment receipts by the Bank or other such credible documents. It cited the cases of ISHOLA v. S.G.B (1077) 2 NWLR (PT. 488) 405; BISOLA NIG. LTD V. MAINSTREET BANK LTD (2013) LPELR – 22062 (CA) and OKOLIE v. MORECAB FINANCE NIG. LTD (2002) ALL FWLR (PT.369) 1164.
I agree with these submissions. The Defendant/Counterclaimant did not tender any evidence of repayment of the loan. The Defendant/Counterclaimant as well failed to prove any of its counterclaim. D.W.1 did not explain in his evidence how he arrived at the calculations. Both the Claimant and the Defendant/Counterclaimant just dumped document in their evidence in court.
But that is not the end of the Counterclaim. In paragraph 11 of the Defendant’s Further Amended Statement of Defence and Counterclaim, the Defendant/Counterclaimant stated as follows:
- 11. That from the claim filed by the Claimant/Defendant to the counterclaim, the sum totaled, N665,208,101.70 (Six Hundred and Sixty-Five Million, Two Hundred and Eight Thousand, One Hundred and One Naira, Seventy Kobo Only) made into the facility account was not recorded in the facility account or considered as reduction/repayment of the enhanced margin loan by the 2nd Defendant to counterclaim as it ought to. In fact, about N95,000,000.00 (Ninety Five Million Naira) only out of this sum of N665,208,101.70 (Six Hundred and Sixty-Five Million, Two Hundred and Eight Thousand, One Hundred and One Naira, Seventy Kobo) only not accounted or recorded by the Claimant/Defendant to counterclaim were funds or proceeds of shares sold and belonging to one of the Defendant’s client, namely, Benue Investment & Property Co. Ltd.
In paragraph 17 of the Claimant’s Amended Defence to Counterclaim the Claimant stated as follows:
- 17. The Claimant strongly asserts that on 25th June 2008, two (2) Union Bank of Nigeria Manager’s Cheques valued at N215.5 Million Naira only (Two Hundred and Fifteen Million and Five Hundred Thousand Naira only) and N259 Million (Two Hundred and Fifty Nine Million Naira only) respectively were lodged into the facility account (with Account Number 6010718509) with the Marina Branch of the Legacy Bank by Ebi Odeigah, the Managing Director of the Defendant. This is evidenced by the Deposit Slip No. 5144016 of the legacy bank dated 27th June 2008. The said Union Bank Cheques dated 25th June 2008 as well as the Deposit Slip dated 27th June 2008 are hereby attached and jointly marked as EXHIBIT ABY 6A-C.
I therefore hold that the Claimant admitted the payment of the total sum of N474.5 million by the Defendant/Counterclaimant on 25-6-2008. What is admitted on the pleadings need no further proof. I therefore award to the Defendant/Counterclaimant the sum of N474.5 Million.
Again in paragraph 21 of the Defendant’s Amended Statement of Defence and Counterclaim filed on 21-9-17, the extant Statement of Defence and Counterclaim at the time P.W.1 was cross examined the Defendant/Counterclaimant stated as follows:
- 21. The Defendant/Counterclaimant’s various shares and their respective or corresponding quantities/units, pledged as collateral and still in custody of the Claimant and 2nd Defendant to the Counterclaim are as follows: –
i) AFRIBANK-50,012
ii) ALLCO-22,500
iii) AP-2,963
iv) BCC-300,000
v) DIAMOND-1,836,000
vi) ETERNAOIL-1,657,579
vii) EOUITY -500,000
viii) FCMB-48,764
(x) FIDELITY-137,341
x) FBN-43,000
xi) FINBANK-71,581
xii) GTB-3,585
xiii) JAPAUL-1,000,000
xiv) LASACO-10,021,023
Xv) LIVESTOCK-5,000,000
xvi) MOBIL-231
xvii) WEMA-686,633
xviii) UNIVERSAL INS.-20,400
xix) WAPCO-2,323
xx) INTERNATIONAL ENERGY -6,400
xxi) NAHCO-2478
xxii) NASCON-219,502
xxiii) NEM-23.998.297
xxiv) NESTLE -500
xxv) OANDO-1,829
xxvi) PHB-600
xxvii) SKYEBANK-130,248
xxviii) STACO -28,562
xxix) STERLING BANK -15,000,000
xxx) THOMAS WATT -3000
xxxi)TRANSCORP -53,548Slgn.
xxxii) UACN -191,883
xxxiii) UBA -827,300
xxxiv) UBN-2,433
xxxv) UNILEVER -870
xxxvi) UNITY BANK -3800
xxxvii) VONO -3,870
During the cross-examination of P.W.1 on 22-5-2019 by the Defendant/Counterclaimant the court’s notes reads as follows:
- Referred to paragraph 21 of the Statement of Defence and he confirmed the averments therein contained. It is not true that the average return on shares is about 38% per annum. I do not know what the rate is now but at a time it was minus zero.
Therefore, the Claimant admitted that the shares listed above and their units or quantities were pledged as collateral and are in their custody.
I therefore grant to the Defendant/Counterclaimant the shares so listed with their units or quantities listed.
For the avoidance of doubt, I therefore award to the Claimant N25,000,000 (Twenty-Five Million Naira) out of the sum of N437,269,549.15 (Four Hundred and Thirty Se Million, Two Hundred and Sixty-Nine Thousand, Five Hundred and Forty-Nine Na Fifteen Kobo) claimed by the Claimant as the Defendant/Counterclaimant’s indebtedness to it.
Also I grant the Defendant/Counterclaimant the following:
(1) The sum of N474.5 Million.
(2) The various shares and their respective or corresponding quantities/units, pledged as collateral and still in the custody of the Claimant and 2nd Defendant to the Counterclaim are as follows: –
i) AFRIBANK -50,012
ii) ALLCO-22,500
iii) AP-2,963
iv) BCC-300,000CERTIFIED TRUE COPY
v) DIAMOND -1,836,000Sign.
vi) ETERNAOIL-1,657,579
vii) EOUITY -500,000
viii) FCMB -48,764
ix) FIDELITY-137,341
x) FBN-43,000
xi) FINBANK-71,581
xii) GTB-3,585
xiii) JAPAUL-1,000,000
xiv) LASACO-10,021,023
XV) LIVESTOCK-5,000,000
xvi) MOBIL-231
xvii) WEMA-686,633
xviii) UNIVERSAL INS. -20,400
xix) WAPCO-2,323
xx) INTERNATIONAL ENERGY -6,400
xxi) NAHCO-2478
xxii) NASCON-219,502
xxiii) NEM-23.998.297CERTIFIED TRUE COPY
xxiv) NESTLE-500Sign.
xxv) OANDO-1,829
xxvi) PHB-600
xxvii) SKYEBANK-130,248
xxviii) STACO-28,562
xxix) STERLING BANK -15,000,000
XXX) THOMAS WATT -3000
xxxi) TRANSCORP -53,548
xxxii) UACN-191,883
xxxiii) UBA-827,300
xxxiv) UBN-2,433
xxxv) UNILEVER -870
xxxvi) UNITY BANK-3800
xxxvii) VONO-3,870
All other claims and counterclaims are hereby dismissed.
I award 10% post judgment interest to the Claimant on the N25 Million as well as 10 % post judgment interest to the Defendant/Counterclaimant on the N474.5 Million.
Since both the Claimant and the Defendant/Counterclaimant partially succeeded in their claim and counterclaim, I make no order as to costs.
This is the judgment of this court.
HON JUSTICE C. J. ANEKE
JUDGE
24TH DAY OF NOVEMBER, 2023.
PARTIES:
Parties are absent in Court.
APPEARANCES:
V. A. ALEXANDER ESQ, for the Claimant;
C.A. DIKE ESQ with A.C. UTTUTE ESQ, for the 1st Defendant/Counterclaimant;
O.E. KONWA ESQ, for the 2nd Defendant to the Counterclaim.