BDCOMMERCIAL LAW REPORT: Extraneous Facts Cannot Vary An Executed Contract

MINAJ HOLDINGS LTD. V. ASSET MGT CORP. OF NIG.
COURT OF APPEAL, LAGOS DIVISION
(NDUKWE-ANYANWU, ABUBAKAR, NIMPAR JJ.CA)

The Respondent instituted an originating summons before the Federal High Court, Lagos Division against the Appellants praying that the court enforce the contract executed between the parties. In the accompanying affidavit, the Respondent stated that the Appellant failed the reimburse Union Bank of Nigeria the total sum of money she owed the latter totalling N8,935,824,268.66 (Eight Billion Nine Hundred and Thirty Five Million Eight Hundred and Twenty Four Thousand Two Hundred and Sixty Eight Naira Sixty Six Kobo Only) from two loan facilities Union Bank of Nigeria granted in favour of the Appellant.

The Respondent stated that upon commencement of its operations, it acquired all the bad debts of Union Bank of Nigeria Plc including that of the Appellant. The Respondent in concert with the Appellant restructured the Appellant’s loan facility and subsequently reduced the debt profile of the latter to N2,099,225,000.00 (Two Billion and Ninety Nine Million Two Hundred and Twenty Five Naira Only) to include an accrued interest of 15% on the total debt being N367,364,375.00 (Three Hundred and Sixty Seven Million, Three Hundred and Sixty Four Thousand, Three Hundred and Seventy Five Naira Only). The new restructured sum payable to the Respondent by the Appellant totalled N2,466,589,375.00 (Two Billion, Four Hundred and Sixty Six Million, Five Hundred and Eighty Nine Thousand Three Hundred and Seventy Five Naira Only).

The Appellants failed to pay the new restructured amount as agreed between parties. After examining all the facts contained in the affidavits filed by parties, the trial court granted the reliefs of the Respondent. Dissatisfied with the judgment, the Appellants filed their notice of appeal to the Court
of Appeal, Lagos Division praying that the judgment of the trial court be dismissed for failure to evaluate the facts placed before it.

Two issues were filed for by the Appellants in determination of their appeal but the court found one issue apt for the determination of the appeal:
“Whether the court below accurately and correctly evaluated and summed up the total value of all the identified assets of the Appellant in the hands of the Respondent, when it considered the second issue for determination as formulated by that court?”

Learned Silk for the Appellant argued that the Respondent had in its possession all the properties of the Appellant and that if the properties were properly evaluated particularly with regard to the Appellant’s property in Enugu State, the restructured debt of the Appellant would have been paid up. Learned Silk contended that failure to properly evaluate these facts by the trial court was detrimental to the case of the Appellant. On this note, Learned Silk urged this court to evaluate properly the unchallenged, uncontroverted and admitted evidence of the Appellant’s property in Enugu in possession of the Respondent and adjust the computation made by the court below.

Learned Silk for the Respondent on his part argued that parties are bound by the terms of the contract and the court cannot alter such terms but rather the duty of the court is to enforce the terms of the contract freely entered into between the parties. Learned Silk argued that as at the time of computing the new debt and to the knowledge of the Appellant, the property at Enugu State was never part of the consideration. Learned Silk continued that the inclusion of the Enugu State property amounted to extraneous fact which the court cannot rely on. In conclusion, Learned Silk argued that the trial court correctly and properly evaluated the total value of the assets of the Appellant as shown in the agreement reached by the parties.

Unanimously dismissing the appeal, the court went on to say:
“The depositions in the Appellant’s affidavit referring to the Enugu property, the valuation of Jide Taiwo for the Abuja property and the money in the Appellant’s account with the Union Bank of Nig. PIc, are all extraneous matters. They were not part of the terms of the contract of restructure, Exhibit M2, signed by the Chairman, Senator Mike Ajaegbo.

The Appellant reneged on the terms of the contract. I am surprised that the Respondent did not call into play the “Default Clause of the contract in Exhibit M2.

The primary duty of the court in the circumstance is limited to interpretation and enforcement of the terms of the contract as agreed by the parties thereto, see Koiki vs. Magnusson (1991) 8 NWLR pt. 615 pg. 492, International Textile Ind. (Nig) Ltd vs. Aderemi (1991) 8 NWLR pt. 614 PO. 268.
“it must be reiterated here that the court must treat as sacrosanct the terms of an agreement freely entered into by the parties.”

This is because parties to a contract enjoy their freedom to contract on their own terms so long as same is lawful.

The terms of contract between parties are clothed with some degree of sanctity and if any question should arise with regard to the contract, the terms in any document which constitute the contract are arguably the guide to its interpretation. When parties enter into a contract they are bound by the terms of the contract as set out by them. It is not the business of the court to rewrite a contract for the parties, See BFI Group of Company vs. BPE (2012) L.PELR 9339, Afrotecit Services (Nig) Ltd vs, M.A. and Sons Ltd (2002) 15 NWLR pt. 692 PD. 730.

The Appellant and the Respondent entered into this contract and the terms of the Facility Restructuring Agreement (FRA) was signed by the Chairman of the Appellant – Senator Mike Ajaegbo. Having signed the Facility Restructuring Agreement (FRA), the Appellant is bound by all the terms of the document unless there is an allegation of fraud. The Chairman understood the terms of the Facility Restructuring Agreement (FRA) because the subsequent correspondence of the Appellant showed his appreciation of the question of the Respondent in restructuring the loan facilities extended by Union Bank of Nig. PIc.

The Respondent is entitled to the total sum of the restructured loan of N2,466,589,375.00 (Two billion four Hundred and Sixty Six Million, five Hundred and eighty Nine thousand, three hundred and seventy five naira only) as per the Facility Restructuring Agreement (FRA).
This issue is resolved against the Appellants”.

COUNSEL:
L C llogu (SAN), Lloyd Oyinki for the Appellant
T. Pinheiro (SAN), I. Adebambo, C A Chanbang for the Respondent
This summary is fully reported at (2015) 10 CLRN
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