Award of Interest

Before Our Lordships

Mary Ukaego Peter-Odili - Justice of the Supreme Court of Nigeria

Olukayode Ariwoola - Justice of the Supreme Court of Nigeria

Chima Centus Nweze - Justice of the Supreme Court of Nigeria

Ejembi Eko - Justice of the Supreme Court of Nigeria

Uwani Musa Abba Aji - Justice of the Supreme Court of Nigeria

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Between

CAPPA & D'ALBERTO (NIGERIA) PLC - APPELANT

And

NIGERIA DEPOSIT INSURANCE CORPORATION

(Liquidator Of IVORY MERCHANT BANK (NIG.) LIMITED) - RESPONDENT

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UWANI MUSA ABBA AJI, J.S.C. (Delivering the Leading Judgment): This appeal is against part of the judgment of the Court of Appeal, Lagos Division, delivered on 30/11/2000, wherein the lower Court arbitrarily reduced the rate of interest awarded the Appellant/Plaintiff in the trial Court from 25% per annum to 4% per annum from 27/3/1990, till judgment and 4% per annum thereafter until final liquidation of the judgment as opposed to the rate of 21% per annum awarded by the trial Court, without giving any reasons or stating the law under which it acted. Dissatisfied, the Appellant therefore seeks the reversal of that portion of the lower Court's judgment relating to interest and restore the judgment of the trial Court in respect of same.

By the amended Statement of Claim dated 5/2/1991 (see pages 93-97), the Appellant/Plaintiff claimed against the Respondent:

1 . The refund of the sum of N3, 121,446.00 (Three Million, One Hundred and Twenty-One Thousand, Four Hundred and Forty-Six Naira Only) being the total sum of money of the "Crossed Cheques" cleared negligently and fraudulently received and cleared by the Defendant into the fake account.

2. Interest at rate of 26% per annum from the 27th of March, 1990 till the judgment is given and the same rate from the date of judgment until the whole debt is finally liquidated by the Defendant.

3. The sum of N10,000,000.00 (Ten Million Naira) as general damages for negligence in receiving, clearing and keeping the "Crossed Cheques".

4. Such costs as may be expended by the Plaintiff in instituting this action.

The trial Court gave judgment in favour of the Appellant, which caused the Respondent to appeal while the Appellant cross-appealed. The lower Court delivered its judgment contained at pages 452-466, wherein it reduced the interest rate awarded by the trial Court from 26% to 4% per annum till judgment and final liquidation respectively. In seeking for determination of the appeal before this Honourable Court, the Appellant formulated these 2 issues:

1. Whether having regards to the facts and circumstances of this case, particularly the breach of equitable relationship between parties, the Appellant was right in claiming a prejudgment interest at 25% per annum and the same rate after judgment until final liquidation.

2. Whether the Court of Appeal was right in the exercise of its discretion by arbitrarily reducing the rate of interest awarded the Plaintiff by the trial Court without giving reasons or stating under which provisions of the law it acted.

The Respondent on the other hand formulated the issues for determination thus:

1. Whether there existed any evidence or any material upon which the High Court of Lagos State could properly award the Appellant's claim for interest at the rate of 25% per annum and at the same rate after judgment until final liquidation by the Respondent, and

2. Whether the Court of Appeal judicially and judiciously exercised its discretionary powers by reducing the rate of interest awarded the Appellant by the trial Court.

PRELIMINARY OBJECTION:

The Respondent herein has led a notice of preliminary objection to the hearing of the Appellant's appeal on the following bare grounds:

1. That the sole ground of appeal raises issues of mixed law and fact.

2. That the Appellant did not obtain the leave of the Court of Appeal, contrary to Section 233(2) of the Constitution of the Federal Republic of Nigeria, 1999.

It is on record that on the day of hearing this appeal, both the Respondent and Appellant's Counsel were absent. Thus, the preliminary objection stands abated and unused. An issue or a preliminary objection in respect of which no argument is advanced in the brief of argument and therefore not canvassed before the Court must be deemed abandoned. See Per IGUH, JSC in ONAMADE V. A.C.B. LTD (1997) LPELR-2671(SC) (PP. 17-18, PARAS. F-A). See also LEMBOYE V. OGUNSIJI (1990) 6 NWLR (PT. 155) 210 AT 232; AJIBADE V. PEDRO (1992) 5 NWLR (PT. 241) 257; ARE V. IPAYE (1986) 3 NWLR (PT. 29) 416 AT 418.

The preliminary objection is hereby discountenanced and struck out.

ISSUE FOR DETERMINATION:

The two issues formulated by both parties can be harmonized into one thus:

Whether by the facts and circumstances in the instant appeal, the lower Court exercised its discretion judiciously in reducing the interest rate awarded by the trial Court from 25% to 4%.

SUBMISSIONS OF COUNSEL:

The Appellant's learned Counsel has submitted that the idea of the award of interest is not to compensate for the damage done but for being kept out of funds legitimately owned or ought to have been paid as held in NATIONAL BANK OF NIGERIA LTD V. SAVOL WEST AFRICA LIMITED (1994) 3 NWLR (PT.333) AT 463, or when in a business transaction like this, one party is found to have withheld money due to the other party for sometime after being due as decided in ACME BUILDERS LTD V. KADUNA STATE WATER BOARD (1999) 2 SC 1 AT 9.

On the powers of the Court to award interest, it is in general that it is based on contract, some merchantile usage or by statute. Reliance was placed on LORD LONDON CHATHAM & DOVER RAILWAY V. SOUTH EASTERN RAILWAY (1890) AC AT 433. Pre-judgment and post-judgment interests are claimed as of right, where it is conferred by statute or according to the prevailing economic situation. He cited EKWUNIFE V. WAYNE (W/A) LTD (1989) 5 NWLR (PT.122) 422, BERLIET (NIG.) LTD V. KACHALLA (1995) 9 NWLR (PT.420) AT 500, R.E.A.N. LTD V. ASWANI TEXTILE LTD (1991) NWLR (PT.176) AT 671.

It was settled that the trial Court found that there was a breach of equitable relationship which kept the Appellant out of funds to necessitate the award of interest. Thus, the finding of primary facts is the preserve of the trial Court as decided in EKWUNIFE V. WAYNE (W/A) LTD (SUPRA) AT 439 PARA F. It is therefore the law that the appellate Court should give reasons for the exercise of its discretion one way or the other as found in WILLIAMS V. VOLUNTARY FUNDS SOCIETY (1982) 1-2-SC AT 162. He urged this issue to be resolved in the favour of the Appellant and to allow the appeal.

The Respondent through his learned Counsel argued that the Appellant failed to establish that it was entitled to the 25% interest as no evidence was led to that respect. Hence, he who asserts must prove. He quoted in support EGBUNIKE V. AFRICAN CONTINENTAL BANK LTD (1995) 2 NWLR (PT. 375) AT 52. AKINTOLA V. STABILINI & CO. LTD (1972) NSCC (VOL.7) AT 125-126.

It was submitted that the Appellant failed to show how the lower Court wrongly or arbitrarily exercised its discretion in reducing the rate of interest awarded by the Federal High Court. The learned Counsel therefore prayed that this issue be resolved against the Appellant and the appeal dismissed.

RESOLUTION OF ISSUE:

Both the Court and the parties are bound by the reliefs claimed as framed and it is not the duty of the Court to grant any relief outside what had been claimed.

By the amended Statement of Claim dated 5/2/1991 (see pages 93-97), upon which the Appellant as Plaintiff won his case against the Respondent, the Appellant claimed against the Respondent, apart from the sum of N3,121,446.00 (Three Million, One Hundred and Twenty One Thousand, Four Hundred and Forty Six Naira Only) being the total sum of money of the "Crossed Cheques" cleared negligently and fraudulently received and cleared by the Defendant into the fake account; "Interest at rate of 26% per annum from the 27th of March, 1990 till the judgment is given and the same rate from the date of judgment until the whole debt is finally liquidated by the Defendant."

The above relief of 26% interest rate per annum was predicated on the facts pleaded and the relationship/transaction that existed between the Appellant and the Respondent leading to the loss incurred by virtue of the Respondent's negligence.

The trial Court, having the preserve of the primary evidence and facts, considered the case of the Appellant and Respondent and was frank and truthful to hold the Respondent Bank negligent for the conversion of the sum of N3,121,446, when at page 165 of the record, it held that "the defendant bank did not follow the normal and usual banking procedure in the payment of the said amount in the account to fictitious person(s). I have held that the defendant bank was negligent in the payment of the said sum".

The lower Court in affirming the judgment of the trial Court towed the same line in considering the case before it that "the learned trial Judge was right when he held that the Defendant/Bank was negligent..." See page 463 paragraph 4 of the record and sundry affirmations of the trial Court's decision by the lower Court thus:

The Appellant/Bank had opted to deal with the cheques in a manner which is inconsistent with the right of the Plaintiff/Respondent...and therefore they are liable to the Respondent for the conversion of the sum of N3,121,446 which belongs to the Respondent.

The trial Judge was right when he held that the Defendant/Bank was negligent in opening account No.45-100187 and having the cheques of the Plaintiff/Company paid into the account No. 45100187. The Defendant/Bank was therefore negligent in the payment of the said sum of N3,121,446 and was liable to pay same back to Respondent. The Appellant has failed to prove contributory negligence against the Respondent, hence that plea cannot hold.

The lower Court having agreed and being on the same page with the trial Court, however took a u-turn and reduced the interest rate from 26% per annum to 4% per annum.

In fact, the judgment of the lower Court being attacked by the Appellant captured at page 464 of the record states thus:

"...Moreover the Cross/Appellant did not raise any claim for aggravated damages in the statement of claim. Also the learned trial Judge cannot grant more than 4% interest on the judgment sum. That part of the judgment is therefore reduced to 4% interest up till day of judgment and 4% after the judgment until final liquidation...On a final analysis, the appeal fails and the Cross Appeal also fails..."

Although an appellate Court admittedly can disturb an award of damages if such award is excessively high or unreasonably low, it is settled that a Court of Appeal will not disturb an award of damages made by the lower Court merely because it would have come to a different figure if it had heard the case itself. See Per NNAMANI, JSC in DUYILE & ANOR V. KELLY OGUNBAYO & SONS LTD (1988) LPELR-975(SC) (P. 17, PARAS. D-G).

The lower Court having reduced the interest rate from 25% awarded by the trial Court to 4% is on the same page with the trial Court. If the trial Court was wrong or perverse in its assessment or ascertainment of the facts and circumstances of the case at hand, which was the exclusive preserve of the trial Court, the appellate Court notwithstanding, has the power to re-assess and reevaluate the facts and circumstances and to arrive at the correct assessment and evaluation. Otherwise, the appellate Court cannot take over and usurp the primary function of the trial Court to handle primary facts. In essence or the point I am trying to drive home is that if the lower Court disagreed with the trial Court on the award of interest, it was to completely disregard it as having not been proved, and not to reduce same to 4% without stating and proffering superior reasons why it did so. No Court exists in isolation, and the rule of precedence and independence must be observed unless where there is perversity and injustice.

By the pleadings of the parties, it is revealed that the transaction was based on normal banking or financial transaction, where interest rates/gains/profits are topmost and uppermost. In fact, where interest is not even claimed on the Writ, but the facts are pleaded as did the Appellant in its amended Statement of Claim and evidence was given which showed entitlement thereto, the Court may award interest as a general rule. See EKWUNIFE V. WAYNE (W/A) LTD (1989) 5 NWLR (PT.122) 428.

It is revealed by the record and the pleadings led by the Respondent that the relief sought by the Appellant was not contested at all. Thus, parties are bound by their pleadings. It is elementary that a Court is bound by the reliefs sought. The generosity or charity of a Court of law is confined strictly to the reliefs sought to the extent that a Court of law cannot give a party what he did not claim. That is completely outside our procedural law. The rationale behind this is that a party who comes to Court knows where the shoe pinches him and therefore knows the limits of what he wants. The Court, as an unbiased umpire, cannot claim to know the reliefs better than the party. See Per Tobi, JSC, in EAGLE SUPER PACK (NIGERIA) LTD V. ACB PLC (2006) 19 NWLR (PT 1013) 20 or (2006) LPELR (980) 1 AT 40.

To reduce the interest rate from 26% per annum to 4% per annum without giving any cogent reason by the lower Court is to present to the parties a different case altogether, which the lower Court does not have the power to do. If the Appellant had won his case by the preponderance of evidence to be entitled to the interest rate of 26% per annum, what was the basis the lower Court reduced it to 4%?

A successful party is entitled to costs unless there are special reasons why he should be deprived of his entitlement. In making an award of costs, the Court must act judiciously and judicially. That is to say with correct and convincing reasons. See Per RHODES-VIVOUR, JSC in NNPC V. CLIFCO NIG. LTD (2011) LPELR-2022(SC) (P. 23, PARAS. D-A).

Interest may be awarded in a case in two distinct circumstances, namely: (i) As of right: and (ii) Where there is a power conferred by statute to do so, in exercise of the Court's discretion. Interest may be claimed as a right where it is contemplated by the agreement between the parties, or under a mercantile custom, or under a principle of equity such as breach of a duciary relationship. Where interest is being claimed as a matter of right, the proper practice is to claim entitlement to it on the writ and plead facts which show such an entitlement in the statement of claim. See Per NNAEMEKA-AGU, JSC in EKWUNIFE V. WAYNE WEST AFRICA LTD (1989) LPELR-1104(SC) (PP. 33-42, PARAS. C-A).

This was the claim of the Appellant at the trial Court; even vide his Cross Appeal before the lower Court. Thus, it does not lie before the lower Court to deny him his entitlement without proper reasons either based on lack of the right or the statute to support it.

This issue is therefore resolved in favour of the Appellant and the appeal hereby succeeds. The judgment of the lower Court dated 30/11/2000 is set aside. Parties are to bear their costs.

MARY UKAEGO PETER-ODILI, J.S.C.: I agree with the judgment just delivered by my learned brother, Uwani Abba Aji, JSC and to register the support I have in the reasonings from which the decision emanated, I shall make some remarks.

The appellant challenges the judgment of the Court of Appeal sitting in Lagos or Court below or lower Court delivered on 30th November, 2000.

The Court below in exercise of its discretion reduced the rate of interest awarded the plaintiff at the Federal High Court from 25% per annum to 4% per annum from 27th March, 1990 till judgment and thereafter at 4% per annum until final liquidation of the judgment.

The fuller details of the facts are captured in the leading judgment and I shall not repeat them except when circumstances warrant a reference to any part of those facts.

On the 2nd day of November, 2020 date of hearing, learned counsel for the appellant and the respondent being absent, their briefs or argument led on 19/9/2006 and 6/11/2006 respectively were taken as argued.

The appellant distilled two issues for determination which are thus:-

1. Whether having regard to the facts and circumstances of this case particularly the breach of equitable relationship between parties, the appellant was right in claiming a pre-judgment interest at 25% per annum and the same rate after judgment until final liquidation.

2. Whether the Court of Appeal was right in the exercise of its discretion by arbitrarily reducing the rate of interest awarded the plaintiff by the trial Court without giving reasons or stating under which provisions of the law it acted.

The respondent also formulated two issues, viz:-

i. Whether there existed any evidence or any material upon which the High Court of Lagos State could properly award the appellant's claim for interest at the rate of 25% per annum and at the same rate after judgment until final liquidation by the respondent; and

ii. Whether the Court of Appeal judicially and judiciously exercised its discretionary powers by reducing the rate of interest awarded the appellant by the trial Court.

I shall make use of the issues formulated by the respondent for any purpose.

ISSUE 1

Whether there existed any evidence or any material upon which the High Court of Lagos State could properly award the appellant's claim for interest at the rate of 25% per annum and at the same rate after judgment until final liquidation by the respondent. Learned counsel for the appellant contended that the principle

guiding award of interest is not to compensate the successful party for the damage done but for being kept out of funds which he legitimately owns or ought to have been paid to him. He cited National Bank of Nigeria Ltd v Savol West Africa Limited (1994} 3 NELR (pt.333] 435 at 463 etc.

That it is settled law that when in a business transaction like the one under consideration, one party is found to have withheld money due to the other party for sometime after being due, it is a natural consequence that flows from the default that interest be paid for the period of default with liquidation. He relied on ACME Builders Ltd v Kaduna State Water Board (1999} 2 SC 1 at 9.

Learned counsel for the appellant contended that defendant/respondent failed or breached in his duty of care towards the plaintiff/appellant and was therefore negligent in the circumstances of this case. That the transaction between the parties being of a commercial nature coupled with the finding of the trial Court that the action of the defendant was tantamount to a breach of equitable relationship between parties the appellant was right in claiming interest as of right from the date of cause of action until judgment and interest upon judgment debt until final liquidation.

Learned counsel for the respondent contended that from the records that the appellant failed to establish that they were entitled to the 25% interest as no evidence of their entitlement to same was led before the lower Court that pleadings no matter how well and eloquently couched cannot take the place of evidence as in this case where appellant led no evidence to prove the relief sought in interest. He cited Egbunike v African Continental Bank Ltd (1995) 2 NWLR (pt. 375) 34 at 52; Dongtoe v Civil Service Commission (2001) 9 NWLR (pt. 717) 132 at 161 - 162.

The award of interest is guided with the caution that it is not awarded to compensate the successful party for the damage done but rather for being kept out of funds which he legitimately owns or ought to have been paid to him. See National Bank of Nigeria Ltd V Savol West Africa Limited (1994} 3 NWLR (pt. 333} 435 at 463; R.E.A.N, Ltd v Aswani Textile Ind. Ltd (1991} 2 NWLR (pt. 174}639 at 670 7 671.

It is also trite in law that when in a business transaction like the one under discourse a party is found to have withheld money due to the other party for sometime after being due, it is a natural consequence that flows from the default that interest be paid for the period of default until liquidation. I rely on ACME Builders Ltd v Kaduna State Water Board (1999} 2 SC 1 at 9.

It needs be brought up that the power to award interest on judgment debts are provided for in the relevant local laws or rules of the High Court and where no provisions are made, resort would be had to the position in England as at the relevant time. In such a situation the power to award interest will be exercised here as it would be in the High Court of Justice in England.

On award of interest and distinction between prejudgment and post-judgment awards of interest, it is to be noted that interest may be awarded in a case in two distinct circumstances, namely:

a. where it is claimed as of right

b. where there is power conferred by statute to do so in exercise of the discretion.

See Ekwunife v Wayne (WA) Ltd [1989] 5 NWLR (pt. 122) 422.

In respect of interest as of right, this may be claimed where it is contemplated by the agreement between the parties or under mercantile custom or under a principle of equity, such as a breach of fiduciary relationship. See Ekwunife v Wayne (WA) supra 44. Where the claim of interest is under a statute, it is not obligatory for a beneficiary of the provision such as provided under Order 27 Rule 8 of the High Court of Plateau State (Civil Procedure) Rules 1976 to state in the endorsement of his claim on the writ or to plead in his Statement of Claim that fact or the grounds of his entitlement thereto as statutory interest is one provided by state as opposite to claim as of right. See Ekwunife v Wayne (WA) Ltd supra at 455.

In the case at hand, the defendant/respondent failed or breached in his duty of care towards the plaintiff/appellant and therefore negligent in the circumstances of this case as found by the learned trial judge. The transaction between the parties being of a commercial nature coupled with the finding of the trial Court that the action of the respondent was tantamount to a breach of equitable relationship between the parties, the appellant was right in claiming interest as of right from the date of cause of action until judgment and interest upon judgment debt until final liquidation.

The appellant on its part had complied with the rules and procedures by endorsing the claim of interest on the writ of Summons and pleading same in the statement of claim, both of which were unchallenged by the respondent even at the Court below.

Therefore, the Court of trial was right in its findings and conclusion including the award of interest.

ISSUE 2

Whether the Court of Appeal judicially and judiciously exercised its discretionary powers by reducing the rate of interest awarded the appellant by the trial Courts.

Learned counsel for the appellant submitted that the end of Justice cannot be met by awarding interest at the rate of 4% and date of judgment in the light of trend and materials placed before the Court.

That the discretion exercised by the Court of Appeal by reducing the rate of interest awarded by the trial Court was arbitrary as no reasons were given nor did it state under which provisions of the law it acted. He cited Ekwunife v Wayne (1989) 5 NWLR (pt. 122) 422.

In response, learned counsel for the respondent stated that by virtue of Order 1 Rule 20 (4) & (5) of the Court of Appeal Rules, 1981 as amended the Court of Appeal has the general power to make any order necessary for determining the real question in controversy between the parties in an appeal. Also, that Section 16 of the Court of Appeal Act, 1976 vests in the Court below the powers to make an order which a lower Court can make hence the Court of Appeal was right to do what it did in the award of interest. He relied on Order 3 Rule 23 of the Court of Appeal Rules, 1981, Section 16 of the Court of Appeal Act, 1976; Ovenseri v Osagiede (1998) 11 NWLR (pt. 572) 5.

It was submitted for the respondent that the appellant failed to show how the Court of Appeal wrongfully or arbitrarily exercised its discretion, in reducing the rate of interest awarded by the Federal High Court.

That this Court should not interfere with the proper exercise of the discretion of the Court of Appeal such as in the case at hand.

On the rightness of what the Court of Appeal did in cutting the interest awarded by the trial Court to 4% ante judgment. In doing so, the Court below exercised a discretion and it has power to exercise a discretion in the matter but such an exercise must be done judicially and judiciously. In the instant case, the trial Court made its award based on its finding on primary facts which is essentially the preserve of a Court of first instance. The only way an interference against such a finding can be made by the appellate Court is upon a finding that the earlier finding of the trial Court stemmed from a wrong and unfounded application of the law, in which case the interference would be justified and upheld. That exception against the general rule on a primary finding is not applicable herein as the High Court expressly found that the plaintiffs case arose out of a breach of an equitable relationship and which finding was not disturbed on appeal.

Also, the plaintiff as a corporate entity who had been illegitimately kept out of funds had claimed interest at 25% until liquidation as of right and had it endorsed on both the writ of Summons and Statement of Claim.

Therefore, the Court of Appeal disturbing that earlier finding of the trial Court cannot stand. The situation is all the more unacceptable where the Court below offered no reasons for the action, bringing what it did as an arbitrary reduction of interest and an action neither judicial nor judicious. See R.E.A.N. Ltd v Aswani Textiles Ltd [supra] 670 - 677; Ekwunife v Wayne [supra] p.45; Williams v Voluntary Funds Society [1982] 1 -2 SC 145 at 162.

Clearly, this Issue 2 is resolved in favour of the appellant.

Finally, this appeal has merit and along with the well-articulated leading judgment, I too allow the appeal. I set aside the judgment of the Court of Appeal and resolve the decision and orders of the trial High Court.

Appeal Allowed.

OLUKAYODE ARIWOOLA, J.S.C.: I had the privilege of reading in draft the lead judgment of my learned brother, Abba Aji, JSC just delivered. I am in agreement with the reasoning therein and conclusion arrived thereat, that there is merit in the appeal and should be allowed. I too will allow it.

Appeal allowed.

CHIMA CENTUS NWEZE, J.S.C.: My Lord, Abba Aji, JSC, obliged me with the draft of the leading judgement just delivered. I agree with His Lordship that, being meritorious, this appeal should be allowed. I abide by the consequential orders in the leading judgement. Appeal is hereby allowed.

EJEMBI EKO, J.S.C.: On 2nd November, 2020 when this appeal was heard, the parties though served, were absent. The briefs led by the Appellant and the Respondent were, in accordance with the Rules of this Court, were taken as having been duly adopted.

The Respondent had, through their Counsel Victor I. Udo, Esq., led Notice of Intention to Rely Upon Preliminary Objection. The Notice was led on 6th November, 2006. In the Respondent's Brief of Argument dated 30th October, 2006, but led on 6th November, 2006 no Preliminary Objection was therein raised or argued. At the hearing of the appeal, the said Preliminary Objection, because of the absence of the Respondent and his counsel, was not argued or adopted. The obvious consequence is that the Notice of Preliminary Objection had been abandoned; and it is accordingly struck out.

The trial Court had found the Respondent (the Defendant) liable in negligence in its normal banking duty to the Plaintiff/Appellant. That is, negligence in the manner it (the defendant) had handled the Plaintiff/Appellant's money held in its account domiciled in the Defendant/Respondent. The trial Court, having held that the Defendant was guilty of the tort of conversion of the Plaintiffs cheque ordered the Defendant to pay N3,121,446.00, as special damages, being the value of the cheque. In addition, the trial Court ordered the Defendant to pay pre-judgment interest at the rate of 27% per annum with effect from 27th March, 1990 until the judgment was finally liquidated. Post judgment interest on the judgment at the rate of 21% per annum until the final liquidation of the judgment was further ordered.

The Defendant appealed the decision raising 5 grounds of appeal. None of the grounds challenged the awards of interest. The Defendant later led a sixth (6th) ground as additional ground, wherein they raised the issue: whether the trial Court was entitled to award interest at 27% per annum or any other rate as damages without any pleading, proof or submission on the question by the Plaintiff? The ground/issue complains, as I suppose, about the award of pre-judgment interest being "punitive award of interest". At the Court of Appeal (the lower Court) the Defendant, as the appellant, argued that, by Section 17 of the Judgment Act, 1833 - an English statute of general application then applicable in Lagos State, the High Court's power "to award interest on tort judgment" is limited to 4% per annum. The argument had lumped both interest on pre-judgment principal sum and interest on post-judgment sum.

The argument had apparently influenced the lower Court to unilaterally, albeit arbitrarily and capriciously, slash the interests on pre-judgment at 27% and the post judgment sum at 21% or 4% per annum respectively. The lower Court had thereby committed several errors. The Defendant, as appellant before it, had limited his argument to post judgment interest. That is; he challenged only the trial Court's "power to award interest on a tort judgment". He had clearly veered off the complaint in Additional Ground 6 he had brought before the lower Court. Ground 6 did not complain about post judgment interest. Since the complaint was limited to pre-judgment interest the lower Court was therefore wrong to extended its jurisdiction to the frontiers of post judgment interest. It had acted arbitrarily and capriciously thereby. In any case, Section 17 of the Judgment Act, 1833 regulated only interest on judgment sum. It limited such interest to 4% per annum. There was no such limitation on pre-judgment interest

The lower Court seemed to have thought that the trial Court awarded interest at 27% per annum on the principal sum, the value of the cheque converted, as an ordinary debt. Even at that they were wrong to have awarded 4% interest per annum on it. The general rule is that interest is not payable or recoverable at common law on ordinary debts in the absence of some contract, express or implied, or some mercantile practice: THIRWELL v. OYEWUMI (1930} 4 NWLR (PT. 144) 334. Under its equitable jurisdiction, a Court has power to award interest where a person in fiduciary position (as the defendant at the trial was to the plaintiff) has improperly profited from his fiduciary position: THIRWELL v. OYEWUMI (supra) at Page 405 relying on HARSANT v. BALINE MACDONALD & CO (1887) 3 TLR 689; WALLERSTEINER v. MOIR (No.2) (1975) Q.B 373 CA. In SPARTALI v. CONSTANTINIDI (1873) 2 W.R 823 - which appears more apposite to the instant case; interest was awarded on partnership money retained by the defendant beyond the agreed period. The award was on equitable grounds and on the presumption that the defendant by withholding the money had made profit by such wrongful withholding.

I should point out that OJIKUTU v. ACB (1968) ANLR 141 is not very much apposite. In that case it was held (as at 1968) that where no local statute provided for interest on judgment sum, resort could be had to Section 17 of the Judgment Act, 1838 (of UK), being a statute of general application, for imposition of 4% interest on judgment sum. Since the promulgation in 1988 by the various States Edicts on applicable laws that limited the application of English Statutes of general application. I have doubt if Section 17 of the Judgment Act, 1838 (UK) is, or can still be, invocable. In OJIKUTU v. ACB (supra) the Court made it clear that banks cannot invoke the Act for prejudgment interest.

For avoidance of doubt, even if Section 17 of Judgment Act, 1838 still applied; it applied and fixed 4% interest per annum only on post judgment sum or debt.

The lower Court had definitely, in the capricious judgment, allowed themselves to be misled by the confusion and mixing up of issues that had afflicted the defendant/appellant before them. They gave no good or tangible reason, if any at all, for interfering with the award of interest by the trial Court. It is trite that there must be reason for every judgment.

I will, just like my learned brother UWANI MUSA ABBA AJI, JSC, did in the lead judgment just delivered, allow this appeal and restore decision and orders of the trial Court. Appeal allowed. The decision and orders of the lower Court are hereby set aside.

All consequential orders in the lead judgment are hereby adopted by me.

Appearances:

Lanre Ojetunji, Esq. - For Appellant(s)

Victor Udo, Esq. - For Respondent(s)

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