Category: Newsletter

SUBROGATION: MATTERS ARISING

  1. The Doctrine of Subrogation

When an insured person suffers a loss he will be entitled to money from the insurance claim and may also be entitled to sue anyone responsible for the loss and claim damages. Where an insurer has paid the claim, the law has long recognised the interests of the insurer in any right of action accruing to the insured person to enable the insurer to claim back the whole or part of the sum paid out under the policy. See, Castellain v Preston (1883). Therefore, the law allows the insurer to commence legal action in the name of the insured against the 3rd party wrongdoer. Subrogation is a corollary of the principle of indemnity and since an insured cannot recover more than full indemnity, the insurer cannot also recover more than the amount of the claim paid. Nevertheless, the insurer must bring the action for the whole loss and not only for the amount to which they are entitled. See, Yorkshire Insurance v Nisbet Shipping (1962).

In Midland Galvanising v Comet Shipping (2014), Iyizoba JCA           referred to following passage from Templeman on Marine Insurance   6ed at page 451 on the meaning of subrogation,

“Subrogation is the right by which an underwriter, having settled a loss, is entitled to place himself in the position of the assured, to the extent of acquiring all rights and remedies in respect of   the loss which the assured may have possessed, either in the nature of proceedings for compensation or recovery in THE NAME OF THE ASSURED against third parties, or in obtaining general average contribution.”

  1. Restriction on subrogation rights

Furthermore, the insurer’s subrogation rights are confined to the rights of the insured including any contractual or statutory exclusion or limitation of liability. This can also arise where the action is statute barred or time barred, or where the liable 3rd party is bankrupt or liquidated. The insurer who brings an action against a 3rd party is also bound by a finding of contributory negligence against the insured.

Restriction on the subrogation rights of an insurer can also arise from a procedural defect caused by the insured. In British India General Insurance v Kalla (1965), the Supreme Court held that an insurer could not prosecute an appeal which the insured had abandoned. In Chubb Custom Insurance v Space Systems/Loral (2014), the Federal Supreme Court of the United States affirmed the decision of the Court of Appeal which held that the insurer lacked standing to bring a subrogation suit under Comprehensive Environmental Response Compensation and Liability Act (CERCLA) because the insured had not made a written demand for a sum certain to the allegedly liable party as required by the CERCLA statute.

  1. Letter of Subrogation or Subrogation Condition 

Recently, in Midland Galvanising v Comet Shipping (2014), the insurer brought the action in the name of the insured against the shipping agent for damage to cargo. One issue which arose for determination was whether the insurer could bring the action in the name of the insured in the exercise of its subrogation rights. The trial court was of the opinion that if there was subrogation of the plaintiff’s claim then the insurer should have instituted the action in its own name. None of the parties raised this issue but it was raised by the trial judge suo moto. The trial judge said that he had no precedent before him suggesting that this was either industry or indeed acceptable legal practice, yet he did not ask both counsel to address him on the point. The Court of Appeal, per Iyizoba JCA held as follows,

“From all indications, if the learned trial Judge had called on the parties to address him on the new issue he raised suo motu, he surely would have come to a different conclusion on the right of the appellant to institute the action. This is because the authorities suggest that when there is subrogation, a suit in court must be instituted in the name of the insured and not in the name of the insurance company as there is no privity of contract between the insurance company and the defendant.”

The subrogation condition in the insurance policy usually affirms the position at common law and equity and only permits the insurer to bring an action in the name of the insured. On the other hand, a letter of subrogation may assign the rights of action of the insured to the insurer. Upon payment of the claim the insurer receives from the insured a signed discharge voucher. In addition, some insurers also insist on a Letter of Subrogation signed by the insured which may assign the insured rights of action and authorise the insurer to proceed directly in the name of the insurance company against any 3rd party wrongdoer.

The question is whether such a letter of subrogation actually constitutes a valid and effective assignment to the insurer of the insured rights of action against 3rd parties. Judicial authorities are not unanimous on the point. In Chellarams v N.N.S.L (1974), the State High Court held that the letter of subrogation signed by the insured had assigned the right of action and the insurer could only bring the suit in its own name. On the other hand, in Prestige Assurance v Ostfriesland (1995), the Federal High Court held that the letter of subrogation signed by the insured was not a formal assignment of the right of action and the insurer could not bring the suit in its own name. See, Omo-Eboh, Law of Insurance Contracts in Nigeria, 1st ed. (2012) for more cases on this point.

  1. Sub-Contractors & Co-insured

The general principle is that an insurer cannot be subrogated against  its own insured. Therefore, one defence to a subrogation claim is that because the 3rd party is a co-insured, the insurer cannot subrogate against a negligent co-insured. Where the wrongdoer is a sub- contractor and co-insured and the loss is covered by the policy, the courts have held that the insurer cannot exercise subrogation rights against them. In Petrofina v Magnaload (1984) the main contractor took out a policy which also covered the sub-contractors. After paying the claim the insurers brought an action against the negligent sub-contractor. The court held that the insurers could not exercise    subrogation rights against the sub-contractor as they were co-   insured. See also, Stone Vickers v Appledore Ferguson Shipbuilders   (1991) and National Oilwell v Davy Offshore (1993) Cooperative Retail Services v Taylor Young Partnership  (1990) HL.

In Commonwealth Construction v Imperial Oil (1977), the Supreme Court of Canada held that sub-contractors who are not specifically mentioned but described and covered under the policy are protected from subrogation proceedings. Such a sub-contractor had an insurable interest in the project and therefore the insurer had no right to subrogate against that sub-contractor notwithstanding any actionable negligence. In Gard Marine & Energy v China National Chartering (2015), the Court of Appeal in England stressed the importance of interpreting the underlying contract between the parties to establish if there was an intention that the insurance was for their joint benefit. If there was such an intention, then it meant that the parties had agreed to an insurance solution without rights of subrogation.

5. Tenancy & Fire Policies.

It is now settled that when a landlord takes out a fire policy and the tenant pays the premium, the tenant should benefit from the insurance. Therefore, where the tenant was responsible for the fire, the landlord cannot sue the tenant and the insurer cannot bring an action against the tenant. In Mark Rowlands v Berni Inns (1986), the premises were destroyed by fire due to the tenant’s negligence and the insurer brought an action against the tenant. The lease contained a provision stating that the landlord had an obligation to insure the premises and the tenant was obliged to pay money to the landlord for the premium. The landlord had taken out an insurance policy over the premises, which did not name the tenant. The Court of Appeal in England held that the policy taken by the landlord was intended to be for the benefit of the tenant and as such the landlord could have no further claim against the tenant. See also, Weide v Hashim Transport (1968) and Sule v Norwich Union (1971).

In The Eaton Company Limited v Albert Smith (1978), a landlord’s insurer sought to recover in respect of a fire caused by a negligent tenant. The lease provided that the landlord would keep the buildings insured against loss by fire but the obligation to repair rested upon the tenant. The Supreme Court of Canada held that the landlord and tenant had entered into a contract in which the landlord had agreed to provide fire insurance in lieu of its right to sue and the insurance money was the only source of compensation that the landlord could look to in the event of loss. Therefore, the landlord and its insurer could not shift the loss to the actual wrongdoer. See also, Agnew-Surpass Shoe Stores v Cummer-Yonge Investments (1976), Greenwood Shopping Plaza v Beattie (1980).

End.

 

 

 

 

 

Mortgaged Property: Sale by Public Auction

When a debtor (mortgagor) defaults and is unable to settle his indebtedness to a financial institution (mortgagee) then the property provided as security for the credit facility may be sold to settle the debt. This can be done where the parties have executed a mortgage deed which empowers the mortgagee to exercise the statutory power of sale. Once the mortgaged property is sold except where fraud or collusion can be proved it is difficult to impeach the sale.

The relevant laws on this subject are the Auctioneers Law and the Conveyancing Act or the Law of Property Law. Section 19 of the Auctioneers Law states that, no sale by auction shall take place until after at least seven (7) days public notice made at the place of the intended sale. Section 21 Conveyancing Act or section 123 of the Law of Property Law both state that, a mortgagee shall in the exercise of the power of sale have the power to transfer by deed the property sold by auction to the bonafide purchaser free from all interest which the mortgage has priority but subject to all interest which have priority to the mortgage. Furthermore, those sections also state that the sale of the mortgaged property cannot be impeached on the grounds that, there were no circumstances to authorise the sale, or that the statutory seven day notice was not given.

We shall examine some cases to show the practical operation of the laws. In Okonkwo v Coperative & Commerce Bank (2003), the auctioneer hired by the mortgagee bank gave only two (2) days notice of the public auction. The Supreme Court held that the provisions of Section 21 Conveyancing Act or section 123 of the Law of Property Law prevailed over section 19 of the Auctioneers Law. Therefore the sale by auction of the mortgaged property could not be rendered invalid on the grounds that the statutory seven (7) day notice was not given. However, the Supreme Court added that there were other factors upon which the sale of mortgaged property may be impeached. As Uwaifo JSC said, “These are fraudulent or improper acts which are likely to prevent the property put up from realizing its fair value. Collusion or want of good faith is an obvious one.”
Another case is Ibiyeye v Fojule (2008), where the auctioneer hired by the mortgagee bank gave only two (2) days notice of the public auction. The Supreme Court held that the provisions of Section 21 Conveyancing Act or section 123 of the Law of Property Law prevailed over section 19 of the Auctioneers Law. Therefore the sale by auction of the mortgaged property could not be rendered invalid on the grounds that the statutory seven (7) day notice was not given. See also, ACB v Ihekwoaba (2003).

The fact that the property was auctioned at lower than market price is not a ground for impeaching the sale. As long as the sale was not conducted fraudulently or in bad faith the mortgagor cannot complain about the low price. Auctioned property is usually sold at an undervalue (forced sale value) but so long as the price is not ridiculously low or the property grossly undervalued such as to suggest fraud or collusion between the mortgagee and auctioneer and buyer, the mortgagor cannot complain. See, Eka-Eteh v NHDS (1973

However, it must be noted that the recent decision of Taiwo v Adegboro (2011), is contrary to the earlier decisions on the point but did not consider and overrule those decisions. In that case, Adegboro borrowed money from the bank and executed a legal mortgage over his property. When he defaulted the bank appointed an auctioneer to exercise its power of sale. The auctioneer pasted a notice of sale on the property to be sold by public auction the next day. In effect notice of only one day. The property was sold to Taiwo for N140,000 and the widow of Adegboro brought an action to set aside the sale on the grounds that the sale was done in violation of the Auctioneers Law and the property was sold at a gross undervalue because it was worth N340,000. The Supreme Court refused to overturn the concurrent decisions of the trial court and the Court of Appeal and agreed that the sale of the property was invalid because it violated the Auctioneers Law. It is also noteworthy that the court in this case did not consider the provisions of the Conveyancing Act or the Law of Property Law.

Aviation Accidents: Liability of Carriers

Under aviation law, an aircraft accident is an occurrence associated with the operation of an aircraft which takes place between the time when passengers embark until such time as passengers disembark from the aircraft. Any legal action for loss or damage to baggage, personal injury or the death of a passenger caused by an aircraft accident can only be brought under and subject to the conditions and limits of liability set out in the international treaties that govern the liability of air carriers known as the Montreal Convention 1999 (which replaced the Warsaw Convention 1929). The point must be made that any action brought against a carrier under the Convention is time barred if not instituted within 2 years from the date of the accident.

These international conventions have been domesticated by our local legislation in the Civil Aviation Act 2006 and are therefore enforceable in Nigerian courts. Section 48 of that Act provides that the provisions of the Montreal Convention 1999 set out in the Second Schedule of the Act, shall have the force of law and apply to international and domestic carriage by air, irrespective of the nationality of the aircraft performing the carriage and shall govern the rights and liabilities of carriers, passengers, consignors, consignees and other persons.

A practical application of the international conventions and aviation law can be found in the case of Hakar Air Services v Keazor (2011), on the liability of a carrier for loss of baggage and personal injury to a passenger. The claim of Keazor against Harka Air was for special damages in the sum of USD38,000 and general damages in the sum of USD5,000,000 being compensation and damages arising from the loss of baggage and personal injuries sustained on board a Harkar Air aircraft which crash landed in Lagos on the 24th day of January, 1995. On that date, Keazor boarded a Harka Air flight from Kaduna to Lagos. There was bad weather at Kaduna as a result of which all other commercial airlines cancelled their flights. The flight was turbulent and the aircraft finally crash landed in Lagos. This resulted in smoke and fire in the cabin which caused panic as passenger scampered for safety. Keazor sustained injuries and required medical attention.

He commenced legal action at the High Court which considered and applied the provisions of the Warsaw Convention (the applicable law at the time of the accident in 1995) and awarded the sum of N1,257,840 as damages. Article 17 of the Warsaw Convention provided that, a carrier was liable for damage sustained in the event of the death or injury to a passenger, if the accident which caused the damage sustained took place on board the aircraft or in the course of embarking or disembarking. Article 18 of the Convention provided that, a carrier was liable for damage sustained in the event of the destruction or loss of, or damage to, any registered luggage or any goods, if the occurrence which caused the damage so sustained took place during the carriage by air. Article 22 of the Convention limited the amount of liability of a carrier in respect of loss or damage to baggage or cargo to a sum of 250 Francs per kilogram or 5,000 Francs per passenger.

Article 25 of the Warsaw Convention provided that a carrier could not be entitled to limit or exclude his liability as provided by the Convention if the loss or damage was caused by the willful misconduct of the carrier or any employee or agent of the carrier acting within the scope of his employment. On appeal, the Court of Appeal held that there was sufficient evidence of willful misconduct by Harkar Air but the trial court was in error to have awarded damages in Naira when it was pleaded in US Dollars. It then awarded damages in the sum of USD11,000 as compensation. Harkar Air further appealed to the Supreme Court which affirmed the decision and award of damages of the Court of Appeal. See also, Oshevire v British Caledonian Airways (1997)SC, Cameroon Airlines v Otutuizu (2011)SC, Emirates Airlines v Aforka (2014)CA, British Airways v Atoyebi June (2014) SC.

The Montreal Convention 1999 has reviewed the limits of liability of carriers. Article 22 now limits the amount of liability of a carrier in respect of loss or damage to baggage to a sum of 1,000 Special Drawing Rights (SDR) per passenger and for cargo to the sum of 17 SDR per kilogram. Article 21 limits the amount of liability of a carrier in respect death or injury of passengers to 100,000 SDR. One SDR is roughly equivalent to One USD.

Finally, one important provision of the Civil Aviation Act is section 48(3) which states that, “In any case of aircraft accident resulting in death or injury of passengers, the carrier shall make advance payments of at least USD 30,000 within 30 days from the date of such accident, to the natural persons or such natural persons who are entitled to claim compensation in order to meet the immediate economic needs of such persons. Such advance payments shall not constitute recognition of liability and may be set off against any amounts subsequently paid as damages by the carrier.”

Fatal Accidents: No Compensation for Parents of Deceased Children

The loss of a family member due to an accident is a very painful experience but sadly it is not in all cases that financial compensation by way of damages can be obtained by the relatives. Where the deceased is a child or infant, the outcome of litigation can be very unpleasant. The following case of Jenyo v Akinreti (1990) is a graphic example of this matter.

On the 3rd day of July, 1973 at about 11a.m the deceased, a girl aged 5 years old, was standing near the road when the 1st defendant negligently drove a motor lorry, belonging to Nigerian Breweries Plc, along the road and knocked down the deceased. She sustained severe injuries from which she died one week later in hospital. Subsequently, her parents brought a claim for damages under the Fatal Accidents Law and the court awarded the sum of N25,000 as general damages. On appeal, the Court of Appeal reduced the damages to N1,000 only and the aggrieved parents appealed to the Supreme Court.

The Court addressed the principles of law relating to the assessment of damages under the Fatal Accidents Law. Section 3(1) of the Fatal Accidents Law of Lagos State states that,

“Where after the coming into operation of this law, the death of a person is caused by wrongful act, neglect or default and the wrongful act, neglect or default is such as would, if death had not ensued, have entitled the person injured to maintain an action and recover damages in
respect thereof, the person who would have been liable if death had also ensued shall be liable to an action for damages notwithstanding the death of the person injured.”

The Court relied upon the decision in Barnett v Cohen (1921) where the plaintiff commenced legal action under the Fatal Accidents Act in England, as personal representative of his infant son, aged 4 years old at the time, to recover damages for the death of his son caused by the negligence of the defendants. In that case the court said,

“In the present action the plaintiff has not satisfied me that he had a reasonable explanation of pecuniary benefit. His child was under four years old. The boy was subject to all the risks of illness, disease, accident and death. His education and upkeep would have been a substantial burden to the plaintiff for many years if he had lived. He might or might not have turned out a useful young man. He would have earned nothing till about sixteen years of age. He might never have aided his father at all. He might have proved a mere expense. I cannot adequately speculate one way or the other.”

In Jenyo v Akinreti, the Supreme Court dismissed the appeal of the parents and held that they were not entitled to damages. Wali JSC said,

“In the instant case, the girl whose death was caused by the negligent acts, of the 1st defendant as the agent of the 2nd defendant was about 5 years old. At that age the plaintiffs could not be said to be deriving any benefit from her nor could it be speculated and conjectured that the deceased would live and even if she did live the plaintiff would derive any pecuniary benefits from her. At that tender age the deceased was nothing more than an unavoidable burden and liability to them. The law is still as stated by Viscount Haldane, in Taff Vale Railway v Jenkins that, ‘The basis is not what has been called solatium, that is to say damages given for injured feelings or on the ground of sentiment, but damages based on compensation for a pecuniary loss.”

The decision of the Supreme Court was delivered in 1990, 17 years after the death of the child, and the parents went home empty handed. The decision was based on sound reasoning and not on sentiment but many will still argue that justice was not served. One argument is that the 5 year old deceased in Jenyo v Akinreti had a right to life and this right was violently cut short by the reckless driver. The legal maxim ubi jus ibi remedium means that where there is a right there is a remedy. In Bello v Att Gen Oyo State (1986), Oputa JSC said, “The maxim is so fundamental to the administration of justice that where there is no remedy provided either by the common law or by statute the courts have been urged to create one.” The driver may have been charged and convicted of manslaughter or causing death by dangerous driving but that would not bring back the dead girl and assuage her parents.

Proof of Murder: The Doctrine of Last Seen

Proof of Murder: Doctrine of Last Seen 

Circumstantial evidence may be the only evidence available to prove the offence of murder against a defendant. Even in the absence of the body of the deceased a defendant can still be convicted for the offence of murder. In Archie v The State, (1993) the appellant was convicted for the offence of murder. The prosecution alleged that the appellant gave the deceased a ride in his car and that since then the deceased had not been seen. The appellant denied the charge and claimed that along the way there was an accident and the car plunged into a river. He admitted that while the deceased died in the accident he was rescued by fishermen. The divers who later combed the river could find neither the car nor the body of the deceased. The Supreme Court upheld the conviction and rejected the explanation of the appellant. Wali JSC said,

“It is now trite law that the fact of death is provable by circumstantial evidence where neither the body of the victim or any trace of it for that   matter has been found, even if the person suspected has made no confession of any participation in committing the offence. But before     the defendant is convicted on such evidence, it must be such that   makes the commission of the offence certain and leaves no reasonable    doubt that it was the defendant that committed it.”

In cases of murder, where there is no explanation for the death or disappearance of the deceased and the defendant was the last person to be seen in company of the deceased, then circumstantial evidence can be used to link the defendant with the death of the deceased and prove the charge against the defendant beyond reasonable doubt. There is no burden on the defendant to prove his innocence and explain the death of the deceased but the burden remains on the prosecution to prove that the defendant killed the deceased. It is the duty of the prosecution to lead sufficient evidence to establish a prima facie case against the defendant to require an explanation for the disappearance of the deceased and the absence of a reasonable explanation can support the inference of guilt.

The Supreme Court has developed a presumption of fact known as the doctrine of last seen which is based on circumstantial evidence. The statutory authority for this presumption can be found in section 167 of the Evidence Act. It is important to warn that the doctrine cannot be applied where the appellant was the last person to be seen with the deceased but there is no other circumstantial evidence. In Ismail v The State, (2011) Mukhtar JSC (as she then was) explained the doctrine, 

“In a case of culpable homicide, as in this present one where the doctrine of last seen has been applied, the law presumes that the person last seen with the deceased before his death was responsible for his death, and the accused is expected to provide an explanation of what happened.”

In Igabele v The State,(2006) the appellant was convicted for murder. The case of the prosecution was that the appellant motor driver and the deceased conductor, both went out with their vehicle but did not return home. The vehicle was later returned by another driver about four days later and the next day the owner of the vehicle reported the matter to the police. The body of the deceased was discovered about one month later with vital organs missing and the appellant was arrested about two months later. The appellant claimed that the deceased got off the vehicle somewhere to see his brother but did not say where. Later, he said that the deceased fell off the vehicle somewhere and died. The Supreme Court affirmed the conviction of the appellant. Oguntade JSC said, after asking the following questions; Are the facts of this case compatible with the innocence of the appellant? Are the facts capable of explanation upon any other reasonable hypothesis than the guilt of the appellant? 

“I agree that in a criminal trial the burden is always on the prosecution to prove the guilt of the accused person beyond all reasonable doubt. Generally speaking therefore, there is no duty on the accused to prove his innocence. However, where circumstances arise, as in this case, some explanation may be required from the accused person as the facts against him are strong. Where he fails to offer such explanation as happened in this case, his failure will support an inference of guilt against him.”

In The State v Ogbubunjo, (2001) the appellants were charged with murder. The deceased was last seen in the company of the appellants and her body was found buried on their farm. There was no eye witness to the murder and the available circumstantial evidence was not sufficient to lead to a compelling and irresistible inference that the appellants committed the offence. Onu JSC said, 

“In the instant case, there is no evidence of surrounding circumstances which by undesigned coincidence is capable of proving the proposition that the respondents committed the offence of murder with the accuracy of mathematics. Rather what we have from the prosecution is evidence of mere suspicion against the respondents, evidence of equivocation, of uncertainties, of hearsay and rumours, which in a criminal court cannot suffice to establish any offence beyond reasonable doubt. It is trite law that it is not sufficient to say “if the respondents are not the murderers, I know of no one else who is. There is some evidence against them and none against anyone else. Therefore, they must be found guilty.” Such line of reasoning is unsound.” 

In Adepetu v The State, (1998) the appellant convicted for the offence of murder. The case of the prosecution was that the appellant was the last person to be seen alone in the company of the deceased. Two days later the appellant reported that she was dead and her corpse was in the mortuary. He denied responsibility for her death but was unable to account for her whereabouts from the time he was last seen with her until the time of her death. The facts found by the trial Judge as circumstantial evidence include the fact that; (i) the appellant and the deceased together left the hotel where they had been drinking, to an unknown place on foot leaving the appellant’s vehicle behind; (ii) the appellant later returned to the hotel alone without the deceased to pick up his vehicle; (iii) the appellant told lies about the whereabouts of the deceased and tried to implicate other people. The Supreme Court upheld the conviction of the appellant. Ogundare JSC said,

“The law is clear on the point; where, as in the instant case, direct evidence of eyewitness is not available, the court may infer from the facts proved the existence of other facts that may logically trend to prove the guilt of a defendant. In drawing an inference of guilt of a defendant from circumstantial evidence, however, great care must be taken not to fall into serious error. It follows therefore, that circumstantial evidence must always be narrowly examined, as this type of evidence may be fabricated to cast suspicion on innocent persons. Before circumstantial evidence can form the basis for conviction the circumstances must clearly and forcibly suggest that the defendant was the person who committed the offence and that no one else could have been the offender. …….. Generally there is no duty on the defendant to prove his innocence. Circumstances may, however, arise where some explanation may be required from the defendant such as where apparently damning circumstances are established against the defendant.”

In Archibong v The State, (2006) the appellant was convicted for murder. The case of the prosecution was that the deceased and the appellant went to a hotel for drinks after which they checked into a room. About two hours later the waiter knocked on the door of the room but there was no response. He opened the door and found that the appellant was no longer in the room but the deceased lay naked and motionless on the floor with foam around her mouth and nose. The Supreme Court applied the doctrine of last seen and convicted the appellant. Ogbuagu JSC said, 

“In view of the said doctrine, it is settled that it is the duty of the accused person to give an explanation as to how the deceased met his or her death. In the absence of any explanation by the appellant as to how the deceased met her death, surely and certainly, the trial court was perfectly justified in drawing the inference that the appellant killed the deceased.”

  • This is an extract from the 2nd edition of the book Criminal Evidence in Nigeria by Jide Bodede to be published in 2015.

False Imprisonment & Malicious Prosecution

 

FALSE IMPRISONMENT & MALICIOUS PROSECUTION

 When any offence is committed the usual practice is for the victim to make a complaint to the police and name the suspected offender. The suspect may then be arrested and if there is sufficient evidence after investigation the person will be charged to court. However, we must sound a note of warning that people must be careful when making complaints to the police not to instigate the arrest and cause the prosecution of a suspect without reasonable grounds. This is because the baseless arrest or prosecution of any person caused by false allegations may attract legal action and damages for false imprisonment or malicious prosecution.

 The case of UAC v Sobodu (2007) is instructive. Sobodu was employed as a Hardware Merchandise Controller at UACN. The company discovered a fraud which took place in the hardware department of Kingsway Stores where an amount over N800,000 was found to have been stolen. The matter was promptly reported to the police and Sobodu was arrested and detained for three days. He was later charged in the Magistrate Court along with some others on charges of conspiracy, fraud and stealing. However, he was discharged by the court and sought reinstatement to his employment but the company refused. He then instituted legal action against UACN claiming N1,000,000 damages for wrongful termination of appointment and another N1,000,000 for unlawful arrest and detention by the police.

 The trial court awarded him N500,000 as damages for malicious prosecution. Sobodu’s claim for unlawful arrest and detention was in effect a claim for false imprisonment but the trial court erroneously held that UACN was liable for malicious prosecution. The company was aggrieved and appealed against the judgment. The Court of Appeal distinguished the two torts of false imprisonment and malicious prosecution and Adamu JCA said,

 “Although the two heads of tort of false imprisonment and malicious prosecution may sound similar and are interrelated in the sense that they both border on the making of a false complaint or charge against the plaintiff which may lead to his arrest or detention, they are however quite different even from their names. Where a complaint is made to a police officer and he makes an arrest or detention, the party making the complaint or charge is only liable for false police and the and defendant also instigates them to arrest the person complained against and make a formal charge against him before a Magistrate and prosecute him as in the instant case, then the liability is also for malicious prosecution because the police cannot be said to be allowed the freedom of action and the party making the complaint will be more damnified if the charge subsequently proves to be fabricated or if the person complained against is ultimately discharged by the Magistrate.” 

The tort of false imprisonment arising from unlawful arrest and detention is straightforward. If a suspect is arrested and detained on the basis of false allegations made in a complaint to the police, then the complainant is liable for false imprisonment. On the other hand, to succeed in an action for malicious prosecution the claimant must prove the following ingredients; (a) that he was prosecuted by the defendant (the defendant set the law in motion against the claimant leading to a criminal charge); (b) that as a result of the prosecution, the claimant was discharged and acquitted; (c) that the prosecution by the defendant was completely without reasonable and probable cause; and (d) that the prosecution was a result of malice by the defendant against the claimant.

 In UAC v Sobodu, the only ingredient established was that as a result of the prosecution the claimant was discharged even though not acquitted. UACN had not acted maliciously and there was reasonable cause. Sobodu was the Hardware Merchandise Controller and the fraud took place in the hardware department of Kingsway Stores. Therefore the trial court was wrong to have held the company liable for malicious prosecution. 

An interesting case was Balogun v. Amubikahun (1989), Balogun, a lawyer and Amubikahun, a butcher were protagonists in litigation over a parcel of land at Ibadan. While the case was pending, Balogun made a report to the police against the butcher alleging that he attempted to kill him with the help of a witch who was caught when she entered his home. The butcher and the alleged woman were both arrested and prosecuted but later discharged. At the trial it emerged that the woman was hired by the lawyer to implicate the butcher. The Supreme Court upheld the concurrent findings of the trial court and the Court of Appeal and held that Balogun was liable in damages for malicious prosecution.

 Finally, in Bayol v Ahemba (1999), Ahemba made a report to the police against Bayol alleging that he stole rice from his farm. Bayol was arrested and prosecuted but later discharged. After his discharge he filed an action against Ahemba for seeking damages for malicious prosecution. The trial and the Court of Appeal both found that Bayol had failed to prove malicious prosecution but he was dissatisfied and further appealed. The Supreme Court dismissed the appeal and held that Bayol did not prove two key ingredients; the absence of reasonable and probable cause and the presence of malice. See also, Ogbonna v Ogbonna (2014) and Ejikeme v Nwosu (2001).

 

 

 

 

Effect of Illegality in Contracts

 

 

THE EFFECT OF ILLEGALITY IN CONTRACTS 

Lets us start with the general rule on the effect of illegality in contracts. The position of the law is that a contract that is ex-facie illegal will not be enforced by the courts. The term ex-facie means on the face of it. Thus where illegality is clearly apparent or evident from the facts of the case, the courts will not enforce such a contract. Some examples of illegal contracts are; an agreement to import or sell a prohibited product, or an agreement to engage in any activity without the required licence or permit. In Ekwunife v Wayne WA (1989), Nnaemaka-Agu JSC stated the law,

“It is necessary to begin by stating the position of this court with respect to the questions of illegality as a vitiating element in contracts. It is that when a contract is ex-facie illegal, whether such an illegality has been pleaded or not, the court will not close its eyes against it. For its takes the view that it is the duty of every court to refuse to lend its stamp of authority on any illegal transaction. Where, on the other hand, the contract is not ex-facie illegal and the question of illegality depend on a number of facts to be hammered out by evidence and forensic logic, the general rule is that illegality must be raised on the pleadings.” 

An example of the application of the law is the case of Sodipo v Leminkianen (1986). Sodipo entered into a contract to borrow money in foreign currency (GBP & USD) from a company based in Finland. When he failed to pay, Leminkainen sued for recovery of the money in a Nigerian court. The judge suo motu (on his own) raised the illegality of the contract on grounds that it violated the Exchange Control Act 1962 since the parties did not seek the approval of the Minister of Finance for the transaction. The contract was clearly a transaction expressly prohibited by statute and the illegality was ex-facie or apparent. On appeal Leminkainen queried the right of the trial judge to consider the illegality of the contract. The Supreme Court held that the trial judge was right to raise the issue of illegality even though it was not introduced by the parties since it was ex-facie. See also, Fasel Services v NPA (2009) and Alao v ACB (1998). 

Another example of the law in operation is the case of West Construction v Batalha (2006). Batalha, a Portuguese national who was engaged as a project engineer in 1992, sued his employers for the outstanding balance of his salary and allowance for services rendered. The employers, West Construction, argued that the contract of employment was illegal and unenforceable on two grounds. First, that the contract contravened Central Bank of Nigeria Regulations on the payment of the salary of expatriates with foreign currency in cash in Nigeria. Second, that the contract violated the Immigration Act because Batalha had a resident permit to work as an instrumentation engineer with another company, Jagal Nigeria Limited, issued on 21st March 1988 but fraudulently used the said permit to work for West Construction. The trial Judge held that the contract of employment was illegal and unenforceable. Batalha was aggrieved and appealed against the decision. At the Supreme Court, Akintan JSC said,

 “The Plaintiff’s claim in the instant case, as already set out above, is  briefly for the recovery of his outstanding salary and allowances   due  to him from the Appellant, his former employer. There is definitely nothing apparent or evident from the face of the claim to show or from which any act of illegality could be inferred. The claim is therefore ex-facie legal and enforceable. The law is settled that before a claim can be said to be ex-facie tainted with illegality it must be clearly apparent and unequivocal from the claim that what the Court is being called upon to entertain is illegal and in breach of a specific statute or law. Applying the law as declared above to the instant case, I have no doubt in holding that the Plaintiff’s claim is a simple claim for outstanding salary and allowances due for services rendered under a contract of employment. The claim was therefore ex-facie not illegal. It follows then that the onus was on the Appellant, who wanted to rely on illegality as a defence, to duly plead that defence and set out the particulars of the illegality.”

Now this does not mean that if a contract is not ex-facie illegal or if illegality is not apparent on the face of the contract, then it is valid and enforceable. The distinction is that where the contract is ex-facie illegal then the court can be moved by preliminary objection to dismiss the case in limine. However, where a contract is tainted by illegality but it is not apparent on the face of it then the party must plead the particulars of illegality and wait until the trial of the action to prove the point by evidence. The court will then decide in the judgment whether or not the contract is tainted by illegality and therefore unenforceable.

One crucial question which has generated a plethora of cases is whether a contract which is declared null and void by statute is therefore illegal and unenforceable. In Pan Bisbilder v First Bank (2000), Pan Bisbilder sued First Bank for breach of a loan agreement under the Agricultural Credit Guarantee Scheme Act. The Act prohibited the application of the funds to any purpose other than that for which it was granted and stipulated a penalty of fine or imprisonment. There was mutual agreement of the parties in violation of the statute to deduct and utilize part of the loan to clear outstanding overdrafts. 

Pan Bisbilder denied the existence of the illegal agreement and sought to enforce the disbursement of entire loan without deduction. The Supreme Court rejected the claim and held that where parties to a contract have agreed to terms which violate a statute, the performance of the contract by one of the parties does not become a breach because the terms of the contract were illegal in the first place. Achike JSC said,

“It will be enough to say that contracts which are prohibited by statute coupled with provision for sanction (such as fine or imprisonment) in the event of its contravention are said to be illegal. There is however the need to make a distinction between contracts that are merely declared void and those declared illegal. For instance, if the provisions of the law require certain formalities to be performed as conditions precedent for the validity of the transaction, without however imposing any penalty for non-compliance, the result of failure to comply with the formalities merely renders the transaction void, but if a penalty is imposed, the transaction is not only void but illegal, unless the statute stipulates otherwise.”

For example, the Land Use Act provides that any transaction without the consent of the Governor is void. Therefore, a deed of assignment or legal mortgage executed without the consent of the Governor is void but not illegal. In Union Bank v Ayodare (2007). Ayodare took a loan from Union Bank and used his properties as security. The bank tried to sell the properties but Ayodare argued that the bank could not enforce the legal mortgages because they were null and void since the consent of the Governor had not been obtained. The Supreme Court followed the decision in Savannah Bank v Ajilo (1989) and held that the mortgages were void but they were not illegal. Oguntade JSC said, 

“The statute (Land use Act) at present under consideration states that it shall be unlawful for the occupier to alienate his right of occupancy but the statute does not provide any penalty for the breach of its provisions, nor would it appear necessary in the interest of public policy for an agreement of alienation to be treated as illegal. Public policy can be equally safeguarded by the Government power of revocation. I would hold that the contract was not illegal.”   

Now, what are the consequences of illegality in a contract? It is settled that where a contract is tainted with illegality the courts will not enforce such a contract. The principle is founded on public policy and expressed in the maxim ex turpi causa non oritur action, meaning an action cannot arise from a base cause. Furthermore, the position of the law is that where a contract is tainted with illegality and both parties are equally to blame then neither party can claim any right or remedy under the contract. See, Pan Bisbilder v First Bank (2000). This is also expressed in the maxim in pari delicto potio est condition defendentis, meaning where the parties are both at fault the condition of the defendant is better. Therefore, whether or not a party can recover under an illegal contract may depend on whether the party had knowledge of the illegality and was equally to blame.

 

No Premium no cover

 

NO PREMIUM NO COVER MATTERS ARISING: CASE LAW REVIEW

  1. Section 50 Insurance Act

Section 50(1) of the Insurance Act 2003 states that, “The receipt of an insurance premium shall be a condition precedent to a valid contract of insurance and there shall be no cover in respect of an insurance risk unless the premium is paid in advance.” In the case of Ajaokuta Steel v Corporate Insurance (2004), the Court of Appeal pronounced on the provisions of section 50(1) of the Insurance Act and held that the no premium no cover condition was a condition precedent to the formation of a valid insurance contract. Therefore, failure of the insured to pay premium before the inception of the policy rendered the insurance contract null and void and unenforceable. That decision has now been affirmed by the Supreme Court in Corporate Insurance v Ajaokuta Steel (2014). Since 2004, a plethora of insurance litigation has arisen on the above provision of the Act and they have raised certain issues which will now be discussed. 

  1. Waiver of condition precedent

There is sufficient judicial authority that any party can waive a constitutional or statutory right which is made for their benefit. See, Ariori v Elemo (1983) and Mobil Producing v LSEPA (2003). Therefore it is arguable that an insurer can be held to have waived the condition precedent in section 50(1) of the Insurance Act even though premium has not been paid but the insurer assumes the risk. The matter was settled by the decision of the Supreme Court in Corporate Insurance v Ajaokuta Steel (2014), which held that, the no premium no cover condition precedent, cannot be waived by an insurer.

 In that case, counsel to Corporate Insurance argued that the provision was made for the benefit of the insurer and therefore the insurer could waive the condition. Counsel to Ajaokuta Steel argued that the use of the word “shall” in the section meant that the provisions were mandatory and could not be waived. My Lord Inyang Okoro JSC said,

 “The argument of the appellant that Section 50(1) of the Act inures to the appellant and as such it can waive it does not appeal to me at all. Had the Legislature intended to confer a special right of waiver on the insurer, it would have said so. Moreso, and as already stated, the word “shall” used in the provisions of Section 50(1) of the Insurance Act clearly imposed a mandatory condition precedent to the making of a valid insurance contract on all the parties thereto, and does not seek by any stretch of interpretation to confer any right of waiver of same on the insurer or any other party at all.”

  1. Part payment of premium

Premium must be paid in advance and must be paid in full. Part payment of the agreed premium does not constitute compliance with the condition precedent. In Industrial and General Insurance v Adogu (2009), the Court of Appeal held that part payment of premium did not fulfill the condition precedent in section 50(1) of the Act. My Lord Abba Aji JCA said,

 “If the section intends to make payment of premium in part or by instalment, it would have stated so as what is not stated is meant to be excluded. Section 50 of the Act therefore does not contemplate instalmental payment of premium in an insurance contract. The payment of premium is a condition precedent to the contract of insurance and where parties have entered into a conditional contract, the condition precedent, like in the instant case, that is, the full payment of premium must happen before either party can become bound by the contract.”

 There is still another issue. In IGI v Adogu (supra), part payment of premium was made before the inception of the policy but the balance of premium was paid after the loss and when the subject matter of the policy had ceased to exist. What is the effect where there is part payment of premium before the inception of the policy but full payment of the balance before the loss and when the subject matter of the policy is still in existence? Will this constitute compliance with the condition precedent? On the authority of the current judicial authorities, the contract will still be void and unenforceable regardless of payment in full before the loss.

 One other matter must be raised. What happens when there is payment of provisional premium? This occurs in some liability policies where the full premium cannot be ascertained until the end of the period of insurance. In my humble opinion, the short answer is that payment of the premium assessed at the inception of the policy constitutes payment of the full premium and satisfaction of the no premium no cover condition.

  1. Insurance brokers

Section 50(2) of the Act states that, “An insurance premium collected by an insurance broker in respect of an insurance business transacted through the insurance broker shall be deemed to be premium paid to the insurer involved in the transaction.” Where premium is paid through a broker, the money is treated as already in the hands of the insurer and the insured shall not be held liable for the refusal or failure of the broker to remit the premium. This issue arose for decision in Shoreline Lifeboats v Premium Insurance Brokers (2012), where the Court of Appeal held that payment to a broker was as good as payment to the insurer. My Lord Agbo JCA said,

“This is because once the insured pays his premium to the broker he has met his obligation to the insurer and the insurer cannot resile from the contract whether or not the broker remits the sum paid to the insurer. It was therefore not the business of the appellants whether or not the 1st respondent remitted the premium paid to the insurer.” See also, Unity Kapital Insurance v Akut Investment (2010). 

  1. Nullity or illegality of contract

It is now settled that failure of the insured to pay premium before the inception of the policy renders the contract of insurance unenforceable. The tricky question is whether or not the failure to fulfill the no premium no cover condition precedent renders the contract of insurance null and void and also makes it illegal. The issue was addressed by the Supreme Court in Corporate Insurance v Ajaokuta Steel (2014) where my Lord Inyang Okoro JSC said,

 “It is crystal clear that any contract or transaction entered into by parties, which contract or transaction is either expressly or impliedly prohibited by statute, is illegal and unenforceable. It is my view therefore that any contract or transaction which seeks to circumvent the provisions of a statute is ex-facie illegal and no party can take benefit from it. For me, the contract of insurance between the parties herein, which was made in clear contravention of Section 50(1) of the Insurance Act, is ex-facie illegal and unenforceable.” See also, Unitrust Insurance v Ambico Sendiarin (2012)

I beg to differ with my lordships on this point and humbly submit that failure to comply with section 50(1) of the Act only renders the insurance contract null and void but not illegal. Illegality attracts a punishment either by way of fine or imprisonment and this means that since section 50(1) of the Insurance Act does not impose a sanction or penalty for non compliance with the condition precedent, the insurance contract can only be void but not illegal. In Pan Bisbilder v First Bank (2000), my Lord Achike JSC said,

 “It will be enough to say that contracts which are prohibited by statute coupled with provision for sanction (such as fine or imprisonment) in the event of its contravention are said to be illegal. There is however the need to make a distinction between contracts that are merely declared void and those declared illegal. For instance, if the provisions of the law require certain formalities to be performed as conditions precedent for the validity of the transaction, without however imposing any penalty for non-compliance, the result of failure to comply with the formalities merely renders the transaction void, but if a penalty is imposed, the transaction is not only void but illegal, unless the statute stipulates otherwise.”

 For example, the Land Use Act provides that any transaction without the consent of the Governor is null and void but the law does not provide any penalty for the breach of its provisions. Therefore, a deed of assignment or legal mortgage executed without the consent of the Governor is void but not illegal. In Union Bank v Ayodare (2007), the parties failed to obtain the consent of the Governor to a legal mortgage. The Supreme Court followed the decision in Savannah Bank v Ajilo (1989) and held that the mortgage was void but not illegal.

 Jide Bodede LL.M (Lond), ACIArb (UK) Former Deputy Director, Legal Services at Industrial & General Insurance Plc, currently Managing Partner Lawfields Solicitors & Advocates.

Proof of Handwriting

 PROOF OF HANDWRITING & SIGNATURES

 Section 93 of the Evidence Act 2011

(1) If a document is alleged to be signed or to have been written wholly or in part by any person, the signature or the handwriting of so much of the document as is alleged to be in that person’s handwriting must be proved to be in his handwriting.

(2) Where a rule of evidence requires a signature, or provides for certain consequences if a document is not signed; an electronic signature satisfies that rule of law or avoids those consequences.

(3) An electronic signature may be proved in any manner, including by showing that a procedure existed by which it is necessary for a person, in order to proceed further with a transaction to have executed a symbol or security procedure for the purpose of verifying that an electronic record is that of the person.

  1. Methods of Proof of Execution of Documents

1.1 Where any person is alleged to be the maker of a document then the handwriting or signature on the document in question must be proved to be the handwriting or signature of that person. See section 93(1) of the Evidence Act. Also, where a statement in a document is tendered as documentary hearsay, the statement shall not be deemed to have been made by a person unless the document was signed or made in the handwriting of that person or recognized by him in writing as one for the accuracy of which he is responsible. See also section 83(4) of the Evidence Act. There are seven methods to prove the identity of the maker of the signature or handwriting on any document.

1.2 The first method is by the direct evidence of a witness. The direct evidence about the identity of any handwriting may be a confession by the maker of the writing or the evidence of a witness in whose presence the writing was made. See section 29 of the Evidence Act on confessions and section 126 of the Evidence Act on direct evidence.

1.3  The second method is by the opinion of any person acquainted with the handwriting or signature of the maker of the document. Section 72 of the Evidence Act states that, when the court has to form an opinion as to the person by whom any document was written or signed, the opinion of any person acquainted with the handwriting of the person by whom it is supposed to be written or signed, that is was or was not written or signed by that person is admissible. In Stephen John v The State, (2011) NWLR (pt.1278) 353, the statements of the defendants were tendered by a police officer who stated as follows, “The statement of the first defendant was recorded by Sergeant Attah Idu. He is now on transfer to Lagos. I have been with Sergeant Atta Idu since 1999 in the Police Force. I can identify his handwriting and signature. If I see the statement I can recognize his handwriting and signature.” Counsel argued that the statements were inadmissible since they were not tendered by the police officer who obtained them. At the Supreme Court, Mukhtar JSC said,

“The reproduced evidence of pw3 explained the reason why the maker  was not in court to tender the confessional statement, and the fact  that he identified the handwriting of the maker of the said Exhibit lends credence to its admissibility. The contention that the Exhibit was  inadmissible because it was not tendered by the maker is, in the circumstance, of no moment.”  See also, Edoho v The State (2010) NWLR (pt.1214) 651.

1.4 The third method is by proof that the name, address, and business or occupation of the maker of the document in question is the same as that of the defendant. See section 94(1) of the Evidence Act states that, evidence that a person exists having the same name, address, business or occupation as the maker of a document purports to have, is admissible to show that such document was written or signed by that person.

1.5 The fourth method is by evidence that the document in question was a reply to another document delivered to the defendant in order to prove that the defendant was the maker of the document. Section 94(2) of the Evidence Act states that, evidence that a document exists to which the document in issue, purports to be a reply, together with evidence of the making and delivery to a person of such earlier document, is admissible to show the identity of the maker of the disputed document as the person to whom the earlier document was delivered.

1.6 The fifth method is by the finding of the trial Judge sitting in open court after a comparison of handwritings. Section 101 of the Evidence Act states that, in order to ascertain whether a signature or writing is that of the person by whom it purports to have been written or made, any signature or writing admitted or proved to the satisfaction of the court to have been written or made by that person may be compared with the one which is to be proved. The court may direct any person in court to write any words or figures to enable the judge to make the comparison. Section 101 of the Act does not permit a trial judge to examine the documents in chambers but only in open court. Before a trial judge can invoke the provisions of section 101 of the Act, there must be a dispute over the maker of the document in question. Furthermore, the duty of the trial judge is to make a comparison between admitted and disputed writings and not to examine disputed writings alone and come to a conclusion.

 In Yongo v COP, (1992) NWLR (pt. 257) 36, the defendants were charged with dishonestly receiving and concealing stolen property. The case of the prosecution was that pw1 bought a brand new car for N49,000 and told the 1st defendant driver to take the car to Gongola State. The driver deviated to Gboko where he gave the car and particulars to the 2nd defendant with instruction to sell the car and it was sold to the 4th defendant. There was no agreed price but the 2nd defendant collected a deposit of N10,000. The car was reported stolen and later discovered in the possession of the 4th defendant buyer who claimed that the car was given to him as pledge for a loan of N10,000 and tendered the pledge Exhibit K. The Magistrate examined the pledge in chambers, rejected the document as fake and accepted the evidence of the prosecution that the 4th defendant obtained the vehicle by outright sale On appeal the Supreme Court held that the explanation of the defendants that the transaction was a pledge was sufficient to raise a reasonable doubt in the mind of the court and rebut the presumption of guilty knowledge. Kutigi JSC said,

 “On the whole therefore I am of the view that the magistrate was wrong when he single-handedly in his chambers, proceeded to examine Exh.K (the pledge) and thereby arrived at the conclusion that the writing and the signatures thereon were all done by one single individual. No wonder he did not say who wrote and or signed it. I think although the law permits trial courts to compare writings or signatures in order to discover their authors, this only arises in a case where the writings or signatures are in dispute and therefore in issue. And in such cases proven or acknowledged writings or signatures of the disputants must be before the court. Nobody has denied writing or signing Exh.K in this case.”  See also, Queen v Wilcox (1961) ANLR 658, ACB v Ndoma-Egba (2000) NWLR (pt.994) 79.

 1.7 The sixth method is by circumstantial evidence. In some cases there may be no direct evidence of witnesses or the evidence of a handwriting expert but circumstantial evidence may provide proof that a document was forged or uttered by the defendant. In Akinbisade v The State, (2006) NWLR (pt.1007) 184, the defendant was charged and convicted of conspiracy, stealing and uttering a forged document. The case of the prosecution was that the defendant and one Okusanya, opened a bank account on the false authority of their boss. The account was operated by them in different assumed names by which they made several deposits and withdrawals. The Supreme Court was split (3:2) on whether or not the defendant uttered Exhibit S, the forged letter of authority to open the account. The majority were of the view that there was overwhelming evidence that the defendant operated the fraudulent account and she could not have done so without knowledge of the letter. Therefore, even if she did not open the account personally she must have aided, counseled or procured someone to utter the forged letter. The minority held the view that there was no evidence on the record to prove that the defendant forged the letter or conspired with anyone to make it and the fact that the defendant fraudulently operated the account did not automatically mean that she uttered the forged letter. Tobi JSC delivering the lead judgment said,

 “It is not in all cases that absence of evidence of handwriting expert is  prejudicial to the case of the prosecution. While such evidence could      be a desideratum in some cases, it is not invariably so. Where there is a very strong connecting link between the defendant and the document to the extent that the circumstances zero on the commission of the     offence by the defendant, the court is entitled to draw the inference circumstantially that the defendant was the author of the document and    therefore the author of the crime. It is because our adjectival law           realises that it is not in all cases that direct evidence of an eye witness           is possible that the law has carved out a niche to assimilate or           accommodate circumstances surrounding the commission of an           offence; a position which leads to the admission or admissibility of           circumstantial evidence.”  See also, UTB v Awanzingana Entp. (1994) NWLR (pt.348) 56

  1. Proof by Handwriting Experts

2.1 The seventh method is by the opinion of an expert known as a handwriting analyst or document examiner. See Section 68 of the Evidence Act. The opinion of a handwriting expert is not conclusive about the identity of the maker of the disputed writing. The purpose of the opinion of the expert is to assist the trial Judge to make the correct inference from the comparison of the admitted and disputed writings. The handwriting expert should state whether in his opinion the admitted writing and the disputed writing were made by one and the same person but not whether the disputed writing was made by the defendant. It is the duty of the trial Judge to arrive at the ultimate conclusion about the identity of the maker of the disputed writing. In Fakhruddin v State of Madhya Pradesh, (1967) AIR (vol.54) 1326, the Supreme Court of India explained,

“This comparison depends on an analysis of the characteristics in the admitted or proved writing and the finding of the same characteristics in large measure in the dispute writing. In this way the opinion of the deponent whether expert or other is subjected to scrutiny and although relevant to start with becomes probative. Where an expert opinion is given the court must see for itself and with the assistance of the expert come to its own conclusion whether it can be safely held that the two writings are by the same person. That is not to say the court must play the role of an expert but to say that the court may accept the fact proved only when it has satisfied itself on its own observation that it is safe to accept the opinion whether of an expert or other witness.” See also, Awosika v I.G.P (1968) ANLR 706, Ozigbo v The State (1976) ANLR 109 at 117

 2.2 In criminal cases, and in particular trials for the offence of forgery, the handwriting of any person is an acceptable means to determine the identity of the maker of the signature or writing on any document. This is because the handwriting of every individual contains distinctive characteristics which differentiate it from the handwriting of any other person even though there may be some similarity in the handwriting of two or more persons. Opinion evidence involves the process of comparison and analysis of the characteristics of the admitted writing which is the handwriting of the defendant on the one hand with the characteristics of the disputed writing which is the handwriting in question. However, because of the possible resemblance between the handwriting of two or more persons there is the danger of mistaken identity and therefore the opinion evidence of handwriting experts must be evaluated with caution. Nevertheless, there is no law or rule of practice that requires the corroboration of the evidence of a handwriting expert or any other expert for that matter before the trial court can act upon it. An expert is not a tainted witness and should not be treated as unworthy of credibility unless and until the contrary is proved. In Murarilal v State of Madhya Pradesh, (1980) AIR (vol.67) 531, the Supreme Court of India said,

 “We are firmly of the opinion that there is no rule of law nor any rule of prudence which has crystallized into a rule of law that opinion evidence of a handwriting expert must never be acted upon unless substantially corroborated. But having due regard to the imperfect nature of the science of identification of handwriting the approach as we indicated earlier should be one of caution.”  See also, Magan Bihari Lal v State (1977) AIR (vol. 64) 1091.

  1. Proof of Forgery

3.1 The Criminal Code defines the offence of forgery and states that a person who makes a false document or writing knowing it to be false and with intent that it may in any way be used or acted upon as genuine whether in Nigeria or elsewhere to the prejudice of any person or with intent that any person may in the belief that it is genuine be induced to do or refrain from doing any act whether in Nigeria or elsewhere is said to forge the document or writing. When a person denies making a document which he is alleged to have written or signed then such a denial means that the document is a forgery. The original or primary evidence of the document which contains the forged signature or writing must be produced but secondary evidence or a copy of the document may be admissible.

3.2 The person whose signature or writing was forged is an essential and material witness for the prosecution to prove that the handwriting or signatures did not belong to them and was not made by them. That person must be called to state that he was not the author of the disputed writing and failure to call them to deny or confirm their handwriting or signature is fatal to the case of the prosecution. In Alake v The State, (1992) NWLR (pt.265) 261, the defendant and others were charged with offences of stealing, forgery, uttering and inducing delivery by false pretences. The defendant was the cash and bank supervisor of the company with responsibility for issuing cheques for payment of bills but there was no direct evidence that the cheques in question were written by him. The defendant’s boss testified that he was familiar with his signature and it was not on any of the three cheques in question. The evidence of the handwriting expert confirmed that the cheques were forged but did not state that the defendant’s handwriting was on any of the cheques. Furthermore, the persons whose signatures were alleged to have been forged did not give evidence to deny the signatures on the cheques. The Supreme Court discharged and acquitted the defendant. Kutigi JSC said,

 “They were persons whose signatures were alleged to have been           forged. I think failure to call them to deny or confirm their signatures           on the cheques was clearly fatal to the case of the prosecution, the           evidence of the handwriting analyst notwithstanding.”

  1. Electronic Signatures

4.1 A signature is used for two purposes, the first is to authenticate a document and the second is to identify the maker of the document. The traditional means of signatures on documents was by manual signatures on paper transactions but with modern e-commerce and technology the use of electronic signatures is now widespread. Proof of an electronic signature is admissible under section 93(3) of the Evidence Act. The section permits an electronic signature to be proved in any manner including by showing that a procedure existed by which it was necessary for a person, in order to proceed further with a transaction must have executed a symbol or security procedure for the purpose of verifying that an electronic record is that of the person.

4.2 The Evidence Act only states that electronic signatures are admissible in evidence but does not define an electronic signature. An electronic signature is an inscription in electronic or digital form which is appended to an electronic document to establish the identity of the maker and authenticity of the document. The use of electronic signatures in the UK is governed by the Electronic Communications Act 2000 and the Electronic Signatures Regulations 2002. Section 7(2) of the Electronic Communications Act defines an electronic signature and states that, “For the purposes of this section an electronic signature is so much of anything in electronic form as; (a) is incorporated into or otherwise logically associated with any electronic communication or electronic data; and (b) purports to be so incorporated or associated for the purpose of being used in establishing the authenticity of the communication or data, the integrity of the communication or data, or both.”

 4.3 Electronic signatures have also been recognized in several legal systems. In India the Information Technology Act 2000 gives legal recognition to electronic or digital signatures. In the U.S.A the Electronic Signatures in Global and National Commerce Act (the E-Sign Act) 2000 and the Uniform Electronic Transactions Act (UETA) also give legal protection to electronic signatures. Similarly also, the Electronic Transactions Act 1999 recognises electronic signatures in Australia.

THE DANGERS OF SELF HELP

Welcome once again to another edition of our newsletter. The purpose of our newsletter is twofold. It is to inform our clients about important areas of the law that impact their commercial and domestic activities and also to update them of new developments in the law.

 THE DANGERS OF SELF HELP IN DEBT RECOVERY & TENANCY MATTERS

 Self help means taking a matter into one’s hands and resorting to extra legal methods to enforce a legal right. The use of self help is commonly found in debt recovery and tenancy matters where landlords or creditors are exasperated by intransigent tenants or debtors.

In Governor Lagos State v. Ojukwu (1986), the Lagos State Government ejected the occupant of the premises while the matter was still pending in court. The Supreme Court condemned the resort to self help as an act of executive lawlessness and held that that once a matter is pending before a court, no person has the right to take the matter into his own hands and take possession of the premises by the use of law enforcement agents.

 A person who first engages in self help cannot later seek the assistance of the court on the same matter. Furthermore, that person not only runs the risk of legal action but may also incur aggravated damages for the misconduct. In Eloichin v Mbadiwe (1986), while the tenancy was subsisting the landlord entered the premises to forcefully eject the tenant and throw out their property. The tenant sued the landlord for trespass for unlawful entry into the premises and for trespass to their goods and claimed aggravated damages. It is settled law that even where a tenancy has come to an end the landlord cannot go into the premises to eject the tenant without first issuing statutory notices and obtaining an order of court for possession. Aniagolu JSC said,

  “The laws of all civilized nations have always frowned at self help if for no          other reason that they engender breaches of peace. It is no doubt          annoying, and more often than not, frustrating for a landlord to watch         helplessly his property in the hands of an intransigent tenant who is paying       too little for his holding, or keeps the premises untidy, or is irregular in his       payment of rents or is otherwise an unsuitable tenant for the property. The   temptation is very strong for the landlord to simply walk into the property and retake immediate possession. But that is precisely what the law        forbids.” 

Apart from the danger of aggravated damages as a civil remedy of the tenant, the landlord also runs the risk of criminal prosecution. Section 44 of the Lagos State Tenancy Law 2011, states that any person who demolishes, alters, or modifies a building for the purpose of ejecting a tenant without an order of court and any person who forcibly ejects a tenant or threatens or molests a tenant by action or words with a view to ejecting that tenant shall be guilty of an offence and be liable to a fine of N250,000 or maximum of six months imprisonment. Even when the tenancy has expired the tenant becomes a statutory tenant and is entitled to the protection of the law until an order of possession is granted to the landlord.

A person cannot at the same time commence legal proceedings and resort to self help. In Duwin Pharmaceuticals v Beneks Pharmaceuticals (2008), Duwin sued Beneks for infringement of their registered trade mark and obtained an interim injunction against them. The trial court later vacated the injunction and granted an accelerated hearing of the matter. Duwin was aggrieved with the order of the trial court and decided to report the matter to the police and also went on appeal. The Supreme Court held that the resort to self help was contrary to the rule of law. Aloma Mukhtar JSC (now CJN) said,

“It is disturbing that the appellant (Duwin) after obtaining the above orders should proceed to petition the police on the same matter. The order as can be understood was restraining the respondents (Beneks) from inter-alia manufacturing the product in controversy, and so should cover whatever the appellant deemed to be the respondents interference with the product in controversy, albeit adulteration of the product. The argument of learned counsel for the appellant that the report lodged to the police was on adulteration of the product, does not reduce the gravity and consequence of the action of seeking police intervention and self-help. The argument is not at all persuasive. The appellant sought the court’s intervention, and the court adequately intervened by giving the reliefs and orders sought, but then the appellant has proved that, that was not enough for it was not satisfied, but resorted to self help. This action definitely was contrary to the principle that a litigant will not abuse a court’s process that is already in existence by resorting to self-help, and the courts will not tolerate such action or abuse.”

 In the Duwin v Beneks case, Chukwuma-Eneh JSC expressed doubts about whether the police complaint was actually a resort to self help since it concerned a criminal matter, the adulteration of products. This author is of the humble view that, where certain aspects of a case are criminal in nature then it should be reported to the police first before commencing legal action on the civil aspects of the matter. In Att. Gen. Federation v Dawodu (1995) the Supreme Court held that, where a person is prosecuted for an offence, it is legitimate to commence civil proceedings on the same facts against that person even while the criminal proceedings are still pending. Therefore where the same facts raise both civil remedies and criminal sanctions it is advisable to start the criminal proceedings before the civil action is commenced.

 We know that in the case of some hard core debtors a measure of coercion by the use of law enforcement agents may be the only viable option for any recovery. However, where a debtor is distressed and does not have money then no amount of coercion by law enforcement agents can draw water out of the stone. In the absence of a dishonoured cheque the debtor cannot be prosecuted simply for owing money. Therefore, regardless of the problems of the judicial process, litigation is still a viable option.

 Where there is no dispute over the debt and there is written admission by the debtor the creditor can come under the summary judgment procedure and cases can be disposed of in less than one year. Compare this to the several years many creditors have waited for their money. Also worthy of note is that the jurisdiction of Magistrate Courts has been increased to N10,000,000 (Ten Million Naira). Creditors whose claims are N10,000,000 and below can approach the Magistrate Court where proceedings are quicker than the High Court.

 Furthermore, mediation (ADR) is now mandatory in most debt recovery cases at the High Court before the case is heard by a Judge. From our experience many cases are settled at this stage and the debtor and creditor will reduce their agreement into terms of settlement which will be entered as the judgment of the court. It is also noteworthy that NO appeal is permitted against this type of consent judgment.

 Finally, where a debtor is not liquid he may have to sell his property to settle the debt. However, many debtors will not do this willingly and law enforcement agents cannot compel a debtor to do so. Only a court of law can attach and sell the property, both goods and houses, of a judgment debtor in execution and satisfaction of the judgment debt.

 If you need clarification any of the above issues kindly contact our law firm for further legal advice. Thank you.