When Does the Right of Action to Recover a Debt Accrue When the Debtor Acknowledges the Debt or Makes a Part Payment?

CASE TITLE: ANDY SURVEYS CO. (NIG) LTD v. CHEVRON (NIG) LTD & ANOR (2024) LPELR-62855(CA)

JUDGMENT DATE: 28TH JUNE, 2024

JUSTICES: MISITURA OMODERE BOLAJI-YUSUFF
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO
ABDUL-AZEEZ WAZIRI

DIVISION: ASABA

PRACTICE AREA: LIMITATION LAW

FACTS:

This appeal borders on limitation law.

This is an appeal against the ruling of Delta State High Court of Justice.

The appellant was the claimant before the trial Court. According to the appellant, it was engaged by the 1st and 2nd respondents to undertake surveying and ancillary jobs between 2014 and 2015 on a project known as the FWD project. The respondents paid the appellant in respect of some of the jobs done but refused to pay for the remaining jobs, for which the appellant submitted invoices. Sometime in 2015, the 2nd respondent (agent of the 1st respondent) agreed via email that they would pay the outstanding debt but pleaded that they be allowed to pay when they resume work at the site. In 2017, 2019, and 2021 the respondents continued to acknowledge the debt but pleaded for time. When the respondents failed to pay the debt, the appellant instituted the suit from which this appeal emanated in 2021.

The 1st respondent’s case is that the 2nd respondent is an independent contractor engaged by the company to execute a particular contract with liberty to employ and use experts, professionals, or any other workforce as the 2nd respondent needed in the execution of the contract. Under the contract between the 1st and 2nd respondents, the 2nd respondent bears the responsibilities and liabilities of its employees and sub-contractors engaged in furtherance of its obligations in the contract. There are indemnity clauses insulating the 1st respondent from any liability to such 3rd party or parties engaged by the 2nd respondent in respect of the contract. The 2nd respondent in the course of the execution of the contract awarded to it, sub-contracted and engaged the services of the appellant to undertake some surveying and ancillary jobs on its behalf and from which contract the appellant alleged that there was an outstanding amount yet to be paid. The 1st respondent was never at any time a party to the contract/agreement between the appellant and the 2nd respondent. According to the 1st respondent, it discharged its financial obligation towards the 2nd respondent after its contract.

The 2nd respondent’s case is that the 2nd respondent and the appellant were co-contractors of the 1st respondent for the installation of the 1st respondent’s PWD equipment. The 1st respondent contracted the 2nd respondent to install the main PWD equipment for the appellant. The appellant was contracted by the 1st respondent to supply surveying services to aid the 2nd respondent’s installation of the PWD equipment. According to the 2nd respondent, the only relationship between the 2nd respondent and the appellant is that the 1st respondent pays for the appellant’s services through the 2nd respondent. The 2nd respondent filed a preliminary objection on the ground, among others, that the action was statute-barred.

​After hearing both parties, the trial Court in its judgment held that the cause of action accrued in 2014 and the suit became statute-barred in 2019.

The appellant being dissatisfied with the ruling of the trial Court appealed.

ISSUE(S) FOR DETERMINATION:

The Court formulated a sole issue for determination viz:

“Whether on the facts pleaded and documents frontloaded by the appellant the Court below was right when it held that the appellant’s suit is statute-barred.”

COUNSEL SUBMISSIONS:

​The appellant’s counsel submitted that the 2nd respondent who alleged that the cause of action in the suit accrued in 2014 and therefore, the suit ought to have been filed on or before 31st December 2019 had the burden to prove that assertion which the 2nd Respondent woefully failed to do and the trial Court fell into the same error. On what is a cause of action and when it accrues, he referred to Owie v. Ighiwi (2005) LPELR-2846(SC). G-Cell Wireless Ltd. & Anor. v. Zin Investment Ltd. E & Anor (2022) LPELR-56676(CA). He further submitted that in considering the issue of whether an action is statute-barred, the Court should have regard to the pleadings filed by the appellant as the claimant at the trial Court and not the pleadings or processes filed by the respondents except where there are admissions made by the respondents in their statement of defence or any process filed by them that supports the case of the appellant. He referred to WOHEREM V. EMERUWA (2004) ALL FWLR (PT.221) 1570. According to counsel, the averments in paragraphs 21, 27, and 32 of the statement of claim stated clearly the various dates the respondents acknowledged the debts and nowhere was it stated in the statement of claim that the cause of action occurred in 2014 as alleged by the 2nd respondent. Counsel argued that given the 2nd respondent’s inability to prove that the cause of action accrued in 2014 and that it expired in 2019, the trial Court ought to have called on parties to open their case and lead evidence on the issue which the Court failed to do and the consequence of the misdirection is that the Court erroneously shifted the burden of proving that the cause of action accrued in 2014 on to the appellant. On the effect of misplacement of the burden on a party, he referred to SAIDON AFRICA LTD. V. ACCESS BANK (2017) LPELR-49868(CA) OKOYE & ORS. V. NWANKWO (2014) LPELR-23172(SC).

On the alleged respondents’ acknowledgment of the debt, counsel referred to the emails exchanged between the parties which were front-loaded with the statement of claim. He submitted that subsequent acknowledgment of a debt revives a cause of action. He referred to A.G ADAMAWA STATE V. A.G FEDERATION (2014) LPELR-23221(SC). IFEAYICHUKWU TRADING INVT. VENTURES LTD. V. ONYESOM COMMUNITY BANK LTD. (2[115) LPELR-24819 (SC). He referred to the Holden of the Court below that he could not find any evidence to support the averment in paragraph 32 of the statement of claim that the respondents pleaded for more time to pay the debt nor the evidence that the defendants acknowledged indebtedness to the Claimant. He submitted that the Court erred in searching for evidence at that stage as it is trite that at the hearing of a preliminary objection, the Court’s duty is to consider the writ of summons and averments in the statement of claim but where parties joined issues on the date of accrual of the cause of action, the Court cannot compute the date pleaded in the statement of defence.

​Counsel contends that the email of 11th of March, 2015 is a clear admission by the respondents that they owe the debt and pleaded for time to pay, and that when the PWO project resumes they would pay. He submitted that the cause of action accrued in 2017 when the appellant made a demand for the payment of the debt after the respondents had acknowledged the same on the 11th of March, 2015, and further accrued in 2021 when the respondents further acknowledged the debt.

The 1st respondent’s counsel, on the other hand, submitted that there is no controversy as to the date the cause of action accrued as the averment in the statement of claim as to when the cause of action accrued was unambiguous from the pleadings. He contends that in 2014 when the appellant demobilized from the work site allegedly being owed for service provided, there was a person who can sue, another who can be sued, and all the facts that are material to sustain the cause of action had taken place. He referred to R.C.C. NIG. LTD. v. BURATTO (1993) 8 NWLR (Pt. 312) 508 at 513(E-F).

​On acknowledgment of the debt, counsel submitted that the law is trite that before any writing could be described as an acknowledgment to take a case out of the statute of limitation, the writing by the debtor should recognize the existence of the debt or the right against itself and the acknowledgment must be definite and unconditional. He referred to Section 30 (5) (a– b) and 31 of the Limitation Law of Delta State Cap LII (2006). L.T. THADANI & ANOR. v. NATIONAL BANK OF NIGERIA LIMITED & ANOR. (1972) LPELR 3147 SC RATIO 2. He submitted that the email message of 11th March 2015 from the 2nd respondent to the appellant is not a sufficient acknowledgment of a debt to take the case out of the provision of the statutes of limitation as the said promise to pay was premised on some conditions and once the acknowledgment or admission is based on some conditions, it is certainly not an acknowledgment or admission. He argued that assuming without conceding that the email of 11th March 2015 relied upon by the appellant constitutes an acknowledgment, the appellant is still caught up by the Limitation Law having not filed this suit within the 5 years prescribed by the Limitation Law of Delta State.

In response to the submissions of the appellant, the 2nd respondent’s counsel submitted that the appellant having failed to frontload the document by which the respondents allegedly pleaded for more time to pay the debt as the appellant did with other documents, this Court should discountenance the averment in paragraph 32 of the appellant’s statement of claim. He referred to N.S.I.T.F. M. B V. KLIFCO NIG. LTD (2010) 13 NWLR (PT. 1211) 307. He further submitted that the email of 11th March 2015 which the appellant is relying on as an acknowledgment is concocted, doctored, altered, and or falsified because the printout was altered in that emails that emanated from diverse persons do not come with the same serial numbering or consecutive serial numbering, the email shows that it was being sent by Bolu Oluyemi whereas it is signed off at the bottom by Ajayi Isaac Olutayo. He referred to ELIAS V. F.R.N (2021) 16 NWLR (PT. 1800) 495. NWAOBA V. IHEBIE (1990) 2 NWLR (PT.134) 589. IHEANACHO V. EJIOGU (1995) 4 NWLR (PT.389) 324. He contends that the content of the email is an intention to resume mediation and not an acknowledgment of debt as it does not pass the unequivocal and unconditional test laid down by the Supreme Court in N.S.I.T.F. M. B V. KLIFCO NIG. LTD (SUPRA). NATIONAL UNIVERSITY COMMISSION V. OLUWO (2001) 3 NWLR (PT. 699) 90.

DECISION/HELD:

In conclusion, the Court dismissed the appeal.

RATIO:

LIMITATION LAW –  ACKNOWLEDGEMENT OF DEBT: When does right of action accrue where debt is acknowledged

“​By law, the five years within which the appellant ought to have commenced its suit for recovery of the debt owed by the respondents would have expired by on 29/5/2019. However, by virtue of Section 30 (5) (a) of the Limitation Law of Delta State 2006, where any right of action has accrued to recover any debt or other liquidated pecuniary claim and the person liable or accountable for the claim acknowledges the claim or makes any payment in respect of it, the right shall be treated as having accrued on and not before the date of the acknowledgment or payment. See S & Y (NIG) LTD & ORS V. AMCON (2020) LPELR- 50336(CA) AT 25-27 (A-A).” Per BOLAJI-YUSUFF, J.C.A.

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