Where there is no express agreement on the rate of interest payable, established custom can be used

AGBABIAKA v. FIRST BANK (2019) LPELR-48125 (SC)
 
In the Supreme Court of Nigeria
ON FRIDAY, 28TH JUNE, 2019
Suit No: SC.6/2007
Before Their Lordships
 
 IBRAHIM TANKO MUHAMMAD, JSC
AMINA ADAMU AUGIE, JSC
EJEMBI EKO, JSC
PAUL ADAMU GALUMJE, JSC
UWANI MUSA ABBA AJI, JSC
 
Between

OLASUNKANMI GREG AGBABIAKA (Substituted for Alhaji S. O. Agbabiaka
(Deceased) by Order of Court dated February 25, 2003)                                -Appellant(s)
                                   
And
 
FIRST BANK OF NIGERIA PLC                             -Respondent(s)      
 
LEAD JUDGMENT DELIVERED BY EJEMBI EKO, J.S.C.
FACTS OF THE CASE
The respondent was the plaintiff at the trial court, while the appellant was the defendant. On January 29, 1985, on the application of the appellant for term loan/overdraft of N180, 000, the respondent granted him the said term loan/overdraft of N180, 000. The appellant obtained the said term loan/overdraft of N180, 000 for “the processing and development of” his film business. The appellant, despite repeated demands for repayment of the loan plus the accrued interest thereon, failed to repay the loan capital and the interest thereon to the respondent.
  
On December 6, 1994 the respondent took out, against the appellant a suit on a Writ of Summons specially endorsed with the Statement of Claim. The respondent claimed the following reliefs against the appellant: a. A declaration that Clause 2 of the Memorandum of Deposit of Deed dated January 29, 1985 made between the defendant on one part and the plaintiff is a binding contract upon the defendant.
b. An order compelling the defendant to execute a legal mortgage in respect of his property situate at No. 22, Akinbaiye Street, Isolo in favour of the plaintiff, and to assign the statutory right of occupancy and deposit the certificate thereto to the plaintiff as security for a loan of N180, 000 granted by the plaintiff to the defendant on January 29, 1985 and which has accrued with interest to the sum of N844, 207 as at June 17, 1992.
  
c. The sum of N844, 207 being the cumulative principal and interest due to the plaintiff as at June 17, 1992 as a result of Banking Facilities (term loan overdraft) granted at the request and instance of the defendant for the sum of N180, 000 of the cumulative sum thereof, which the defendant have refused, failed and neglected to pay despite repeated demands. d. 15 percent interest on overdraft facility at an implied Bank rate from January 29, 1985 to date of judgment. e. 10 percent per annum interest at the court rate from date of judgment until the whole judgment debt together with the interest thereon is fully paid.

ISSUES FOR DETERMINATION
The Apex Court determined the appeal on the issues joined by the parties.

RESOLUTION OF ISSUES
Relying on Sections 134(1) and 135 of the Evidence Act, 1990 LFN (now Sections 131(1) and 132 of the Evidence Act, 2011. The Supreme Court per EKO, J.S.C. held that: ‘’Whoever desires any court to give him judgment, as to any legal right or liability dependent on the existence of facts which he asserts, has the onus of proving that those facts exist’’
  
The court stated that the appellant admittedly averred in paragraph 8 of his affidavit that he filed no defence to the claims of the respondent having been advised by his counsel that he was not “entitled to file any defence to this action as of right”. Therefore the fact of his taking the term loan/overdraft of N180, 000 from the respondent is indubitable. A fact he admitted. That in his affidavit he did not disclose how much he had repaid the respondent out of his indebtedness. The court held that the appellant, as submitted by the respondent’s counsel, admitted taking the loan facility but complained that the loan was interest free without adducing any iota of evidence to back up the assertion in order to displace the normal banking custom. That the two courts below found so as a fact and the concurrent finding of fact is not perverse.
  
On the submission by the appellant’s counsel that the trial court, in giving judgment to the respondent, gave judgment for interest at compound rate and not a reasonable rate, and that this “was clearly illegal”. The court observed that this argument cannot be accommodated under the issue, distilled from grounds 1 and 2 of the amended Notice of Appeal, which complain that there were no facts establishing the conditions for the grant of summary judgment under the relevant rules of trial court and that respondent’s Form 917 exhibited to the statement of claim did not show any agreement to pay any interest on the principal loan sum. The court stated that the said Form 917, Exhibit A8, gave notice to the appellant, as the borrower, that “all usual bank charges and commission and interest would be charged on the loan” contrary to his averment that he had no knowledge that the loan would attract any interest thereon and that he was not liable to pay any interest on the loan. He was held to have executed Form 917, Exhibit A8. The concurrent findings of fact on this, by the two Courts below, were therefore held not to be perverse.
  
The Supreme Court held that the respondent having by the processes filed, including the statement of claim, prima facie disclosed a triable issue against the appellant; it does not avail the appellant to aver, as he did, that he was, as of right, not entitled to defend the action. The holding of the trial court, affirmed by the Court of Appeal, that the onus was on the appellant to properly set out the facts on which he relies for his defence in order to satisfy the court that he ought to be given leave to defend the action was therefore found faultless by the Supreme Court. The Supreme Court held that evidence discloses a prima facie case when it is such that, if uncontradicted and if believed, it is not only sufficient to support the case of the plaintiff against the defendant; it also entitles the court to proceed to judgment in favour of the plaintiff. That the totality of the facts in the statement of claim and the other processes, unless sufficiently contradicted by the appellant, entitle the respondent to the judgment it got against the appellant.

The Court relied on the Supreme Court decision in MACAULAY v. NAL MERCHANT BANK LTD (1990) 4 NWLR (pt. 147) 688; (1990) 1 NSCC 433, (1990) LPELR-1801 (SC), where it was held that in a summary judgment procedure whereby the defendant is required, upon an affidavit, to show cause why judgment should not be entered against him; the defence he is obligated to disclose is a real defence on the merits and not a sham defence intended only to dribble and frustrate the court and the plaintiff and thereby delay the disposal of the action.
The Supreme Court per GALUMJE, J.S.C. in his concurring contribution, held on the position of the law where there is no express agreement as to the rate of interest payable held that: ‘’Where there is no express agreement as to the rate of interest payable, the bank is entitled to charge interest rate on the basis that there is an established custom to that effect.’’
See BARCLAYS BANK OF NIGERIA LTD V. ALHAJI MAIWADA ABUBAKAR (1977) 10 SC.13, (1977) LPELR-750(SC).
 
HELD
In a unanimous decision, the Supreme Court found the appeal lacking in merit and consequently dismissed same. The concurrent decisions of the lower courts were further affirmed.
Appearances:
OLUMIDE SOFOWORA, SAN
WITH HIM, P. E TAGBO, ESQ. AND G. SOFOWORA, ESQ.                 -For Appellant
EMONI WILLIAMS, ESQ. -For Respondents.
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