Legal Nuggets (92):Interest On Overdraft; When Interest on Overdraft is Chargeable- By Adedotun Haheeb Adetunji LL.M(MioD)

ALHAJI HASSAN BELLO & SONS LTD. & ANOR. vs. ZENITH BANK(2018)LPELR-43792(CA)

ISSUE: INTEREST ON OVERDRAFT: When interest on overdraft is chargeable                                                                                                                               

PRINCIPLE:

"Parties are ad idem as to the tenor of the loan facility as clearly stated in Exhibit P2 to be twelve (12) months. Where there is a fixed expiry date for an overdraft, the agreed interest rate will only be applicable from the date the agreement came into effect up to the date the facility expired as the indebtedness cannot be treated as an overdraft after the expiry date. Thus, what the bank will be entitled to after the debt has become due is damages for breach and it is also not open to Court to award the applicable interest rate per annum to cover from the day the overdraft facilities became due up to the day of judgment of the Court.     

See UBA V. LAWAL (2008) 38 WRN 66 at 73 and INTERGRATED DIMENSIONAL SYSTEMS LTD V. AFRICA INTERNATIONAL BANK LTD (2002) 4 NWLR (Pt. 758) 660. Also in SANI ABACHA FOUNDATION FOR PEACE & UNITY V. UBA PLC (2010) 17 NWLR (Pt. 1221) 192 at 207-208, the Supreme Court has held that interest must not only be pleaded but also strictly proved. Thus, where interest is being claimed as a matter of right, the facts of that entitlement must be pleaded by the claimant followed by evidence to establish same. It is only when the Court is satisfied after reviewing the pleadings and evidence that it may award same." Per SHUAIBU, JCA.(Pp.20-21,Paras.B-B).

ISSUE: PROOF: How to claim a sum of money on the basis of the overall debit balance of a statement of account

                                                                                     

PRINCIPLE:
"I have stated that in prove of her claims for the principal sum and the accrued interests, the respondent had also relied on bank statement of the 1st appellant. The law is that any bank which is claiming a sum of money on the basis of overall debit balance of a statement of account must adduce both  documentary and oral evidence explaining clearly the entries therein particularly where as in the instant case the debt is constituted largely by interest charges to show how the overall debit balance was arrived. See HADYER TRADING MANUFACTURING LTD. V. TROPICAL COMMERCIAL BANK PLC (2013) LPELR 20294.

       
Also in BIEZAN EXCLUSIVE GUEST HOUSE LTD. V. UNION HOMES SAVINGS &

LOANS LTD. (2011) 7 NWLR (Pt. 246) 246 at 286 this Court has held that a statement of account is not sufficient explanation of debts and lodgments.

       
Therefore, evidence needs be adduced on its contents because interest charges and other charges are not liquidate, there should be a break down, an analysis of how much of the debt is interest to enable the Court appreciate what is before it without having to do private calculation,an exercise  which the law disapproves.

       
In an earlier decision in the case of HIMMA MERCHANTS LTD. V. ALIYU (1994) 5

NWLR (Pt. 347) 667 at 676, the Supreme Court was emphatic in holding that the

best method of satisfying a Court about the existence of the ground for the award of interest is by adducing credible, sufficient and satisfactory evidence about it. Thus, interest must be specifically pleaded and proved. In the present case, there is no evidence to explain the basis upon which the interest was arrived at and in the absence of credible evidence justifying the claim, the Court is not entitled to act blindly by granting the interest as claimed.

     
Mindful of the trite position of the law that pleaded facts without evidence in

amplification go to no issue, learned trial judge rightly found in my view that the

allegations of over charges was resolved in favour of the appellants.
       
Consequently, the Court subtracted the amount termed over charged from the entire claim and arrived at the outstanding credit balance of N19,548,869.82. However, learned appellants' counsel further contended that the amount of N19,

548, 869.82 awarded as judgment sums still formed part of the unproven sums of N22, 995, 691.45. I have held elsewhere in this judgment that the 1st appellant's statement of account, Exhibit P1, 2 - 27 was merely dumped on the trial Court without relating the figures contained therein. In other words, PW1 through whom Exhibit P1, 2 - 27 was tendered did not bother to demonstrate the Exhibit. And the Court as an arbiter must not get into the arena and engage itself in doing a case for one party to the disadvantage of the other party." Per SHUAIBU, JCA.(Pp.17-20,Paras.E-A).