Investment Firm loses appeal challenging payment of $33.8m debt to Sterling Bank
By Jude-Ken Ojinnaka
The Court of Appeal, Lagos Division has dismissed appeal filed by an investment company, C&N Investment Limited challenging the judgement of a Federal High Court, Lagos, which ordered the firm to pay Sterling bank Plc the sum of $33,814,859.35, being outstanding loan and accrued interest obtained from the bank.
In its lead judgement delivered by Justice Abubakar Sadiq Umar, the appellate court resolved all the issues canvassed in favour of the bank.
Other members of the panel, Justice Festus Obande Ogbuinya and Justice Muhammad Ibrahim Sirajo aligned with the lead judgement.
The Appellant (C&N Investment Limited) had in appeal number CA/L/816/2022 filed against Sterling Bank and Total E & P Nigeria Limited, prayed the court to determine whether having regards to the entire circumstances of the case, the learned judge of the lower court was right in granting Sterling Bank’s (1st Respondent) motion for summary judgement/judgement on admission, dated June 27, 2022.
The facts of the case was that sometimes in December 2010, the Appellant (C&N Investment Limited) applied and was granted a loan facility in the sum of $17,000,000 (Seventeen Million US Dollars) by the 1st Respondent.
The loan was for 78 months commencing from the 22nd of December 2010 to 22nd June 2017.
The source of the repayment of the loan is the anticipated rent from the renewal of the Total E & P Nigeria Limited (2nd Respondent) tenancy in respect of a property situate at 17/17A, Olu Holloway Road, Ikoyi, Lagos State let out to the 2nd Respondent by the Appellant.
The Appellant later requested and was granted restructuring of the loan for a further period of 24 months commencing from the 22nd of June 2015 to the 22nd of June 2020.
The new terms and conditions of the restructured loan were contained in the 1st Respondent’s Offer Letter dated June 22, 2018 and Facility Agreement executed to that effect.
The outstanding sum at the date of restructuring the facility was sum of $33,814,859.35(Thirty-three million, eight hundred and fourteen thousand, eight hundred and fifty-nine dollars, thirty-five cents).
Upon refusal of the 2nd Respondent to renew its tenancy in respect of the property, the Appellant instituted Suit No: LD ADR/1499 17 against the 2nd Respondent.
The Sterling bank which was expecting the rent from the 2nd Respondent to be paid into the facility account in partial liquidation of the loan it advanced to the Appellant later got to know that the Appellant had settled amicably the dispute in Suit No: LD/ADR/1499/17 with the 2nd Respondent having collected a certain sum of money from the 2nd Respondent.
Miffed by this development, the Sterling Bank wrote the Appellant a letter dated the 5th September 2019 demanding the payment within seven days, of the entire outstanding loan and accrued interest in the sum of $39,172,776.34 (Thirty-nine million, one hundred and seventy-two thousand U.S dollars, thirty-four cents) allegedly on account of the breach of the terms of the facility.
But, the Appellant, via its solicitors’ letter dated the 11th September 2019, rejected the allegation of breach of the terms of the facility, contending that the loan was to be liquidated in bullet payment and not from the anticipated rent from the property let out to the 2nd Respondent, arguing that the loan would not be due for repayment until June 2020 according to the terms of the restructured facility.
The Appellant thereafter commenced a suit on the 23rd September 2019, pleaded facts and front loaded documents to show that based on the terms and condition of the restructured loan, the rent from the 2nd Respondent was no longer part of the source of liquidation of the loan and that the date for repayment of the loan would be June 22, 2020.
Two years, after the lapse of June 2020 the due date for the repayment of the restructured facility, before the matter proceeded to trial, Sterling Bank, on the 31st May 2022 filed a motion for summary judgement/judgement on admission predicated on the extant pleadings before the court.
Apart from its counter-affidavits to the 1st Respondent’s motion for judgement, the Appellant on its part filed a motion on notice dated the 16th June, 2022 for amendment of its extant pleading.
But after hearing argument of counsel, the lower court judge in two separate rulings delivered on the 15th July, 2022 granted the 1st Respondent’s motion for summary judgement/judgement on admission but refused the motion for amendment filed by the Appellant.
Dissatisfied, appellant challenged the decision of the lower court, and wanted it set aside.
Resolving all the issues in favour of Sterling Bank, the Appellate Court in its judgement held that
‘’The whole essence of summary judgement is to ensure quick dispensation of justice by eliminating delay that may be caused by trial where there is obviously no defence to a claim and thus prevent the grave injustice that might occur through a protracted frivolous trial. In other words, the summary judgement rules are specially designed to help the Court achieve their primary objective, i.e. to do justice to the parties by hearing their cases on the merit with utmost dispatch’’.
Justice Umar in his lead judgement held ‘’Upon a holistic consideration of the Appellant’s pleadings and documents front loaded as advocated by the Appellant, I am convinced that not just the paragraphs of the Appellant’s pleadings relied upon by the lower court but the entire case of the Appellant as put forward from the inception up to the 30th May, 2022, when the 1st Respondent filed its motion for summary judgement constitutes admission of liability for the sum of $33,814,859.35(Thirty-three million, eight hundred and fourteen thousand, eight hundred and fifty nine dollars, thirty five cents) to the 1st Respondent.
‘’What do I mean by this? The kernel of the Appellant’s case before the lower court was that based on the terms contained in the restructured facility documents especially the offer letter of June 22, 2018, the rental proceeds of its property is not the source of the repayment of the loan and that the tenor of the loan is 24 months, which extends the due date of repayment of the loan to the 22™ June, 2020 from the date of restructuring’’.
Reproducing the Memorandum of Acceptance front loaded by the Appellant, Justice Umar held that ‘’it does not accord with the dictates of morality, logic and law to plead a document which you accepted by executing it and prayed the court to declare it as the document governing the relationship between you and the other party only for you to turn around and put up an argument that the content of the document was unilaterally determined by the other side and that you should not be bound by it.
‘’I therefore endorse the lower’s court finding that the Appellant’s pleadings are replete with admissions of liability for the restructured facility in the sum of $33,814,859.35 (Thirty-three million, eight hundred and fourteen thousand, eight hundred and fifty nine dollars, thirty five cents).
‘’Having considered above the Appellant’s complaints under various issues distilled in its brief of argument, the conclusion I arrived at is that all the issues are resolved against the Appellant. In answer to the sole comprehensive issue distilled for the determination of this appeal against the Appellant. I hold that this appeal is frivolous and it is accordingly dismissed.
The court awarded cost of N250, 000.00 against the Appellant.