Court Dismisses Appeal Challenging Payment of $33.8m Debt to Sterling Bank

Wale Igbintade

The Court of Appeal, Lagos Division has dismissed an appeal filed by C&N Investment Limited challenging the judgement of Justice Daniel Osiagor of the Federal High Court, sitting 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.

The Appellate Court in its lead judgement delivered by Justice Abubakar Sadiq Umar, resolved all the issues canvassed in favour of Sterling bank.

Other members of the panel, Justice Festus Obande Ogbuinya (Presided), and Justice Muhammad Ibrahim Sirajo aligned with the lead judgement.

The Appellant had in appeal number CA/L/816/2022 filed against Sterling Bank and Total E & P Nigeria Limited, had prayed that 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 judgment/judgment on admission, dated the 27″ June 2022.

Details of the dispute was that sometimes in December 2010, the Appellant (C&N Investment Limited) had applied and was granted a loan facility in the sum of $17,000,000 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 was the anticipated rent from the renewal of the 2nd Respondent’s tenancy in respect of a property situate at 17/17A, Olu Holloway Road, Ikoyi, Lagos State let out to the 2% 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 22 June 2020.

The new terms and conditions of the restructured loan were contained in the 1st Respondent’s Offer Letter dated the 22 June 2018 and Facility Agreement executed to that effect.

The outstanding sum at the date of restructuring the facility was the sum of $33,814,859.35.

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 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, allegedly on account of the breach of the terms of the facility.

But, the Appellant, via its solicitors’ letter dated September 11, 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 and 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 frontloaded 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 but before the matter proceeded to trial, Sterling Bank, on the 31st May 2022 filed a motion for summary judgment/judgment on admission predicated on the extant pleadings before the court.

Apart from its counter-affidavits to the 1st Respondent’s motion for judgment, the Appellant on its part filed a motion on notice dated the 16 June, 2022 for amendment of its extant pleading.

The lower court judge after hearing argument of counsel, in two separate rulings delivered on the 15th July, 2022 granted the 1st Respondent’s motion for summary judgment/judgment on admission, but refused the motion for amendment filed by the Appellant.

Dissatisfied, 1st Respondent 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 judgment 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 judgment 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 frontloaded 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 judgment constitutes admission of liability for the sum of $33,814,859.35 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.”

The court awarded cost of N250, 000.00 against the Appellant.