Whether Non-Service of a Pre-Action Notice Can Be Waived as An Irregularity

CASE TITLE: LUSHANN ETERNIT ENERGY LTD & ANOR v. AMCON & ANOR (2024) LPELR-61768(CA)

JUDGMENT DATE: 22ND MARCH, 2024

PRACTICE AREA: CIVIL PROCEDURE

LEAD JUDGMENT: MUSLIM SULE HASSAN, J.C.A.

SUMMARY OF JUDGMENT:

INTRODUCTION:

This appeal borders on Pre-action Notice.

FACTS:

This is an appeal against the decision of the Federal High Court sitting at Lagos delivered by Hon. Justice T.G. Ringim in Suit No. FHC/L/CS/1364/2021, on the 23rd day of March, 2022.

The crux of this case revolves around a loan obtained by the 1st Appellant, who is a partner with Saltpond Offshore Oil Producing Company in Ghana. The loan, taken from Continental Trust Bank of Nigeria, was used for oil exploration in Ghana, with the company’s oil rig serving as collateral. However, the exploration failed due to various factors, leading to a substantial debt owed by the Appellant. United Bank for Africa (UBA) Plc, after acquiring Continental Trust Bank’s assets, sued Saltpond Offshore Oil Producing Company in Ghana over the debt, resulting in a settlement. Despite the settlement terms being entered as a court judgment, Saltpond failed to comply, prompting UBA to pursue garnishee proceedings and consider selling the collateral.

Unexpectedly, the 2nd Respondent, claiming to be the agent of the 1st Respondent, sent a demand letter to the Appellants for repayment of the loan, which had already been settled in the Ghanaian court judgment. The demand was based on the 1st Respondent’s purported purchase of the loan as a bad debt from UBA Plc.

In response, the Appellants initiated an action, seeking the Court’s determination on several questions and relief. However, the 1st Respondent challenged the Court’s jurisdiction, arguing that pre-action notice wasn’t served. The trial Court upheld this objection, dismissing the suit and deeming it incompetent against both the 1st and 2nd Respondents, the latter being considered an agent of the former.

The Appellants, disagreed with this decision and therefore appealed.

ISSUE(S) FOR DETERMINATION:

The Court determined the appeal on a sole issue, viz:

“Whether the trial Court was right in dismissing the Appellants’ action for failure to serve the respondents’ pre-action notice.”

DECISION/HELD:

In the final analysis, the Court made an order of striking out the suit to substitute the order of dismissal made by the trial Court.

RATIOS:

ACTION – PRE-ACTION NOTICE – Effect of failure to serve a pre-action notice
ACTION – PRE-ACTION NOTICE – Whether the non-service of a pre-action notice is an irregularity that can be waived
ACTION – PRE-ACTION NOTICE – Whether the failure to timeously raise the issue of non-service of pre-action notice is tantamount to waiver; instance when waiver cannot be deemed
COMMERCIAL LAW – AGENCY – Whether an agent acting on behalf of a known and disclosed principal can incur liability
JUDGMENT AND ORDER – ORDER OF STRIKING OUT – Circumstances where a Court would make an order of striking out
ACTION – CONDITION PRECEDENT – Effect of non-compliance with condition precedent stated in a statute before commencing an action
ACTION – PRE-ACTION NOTICE – Rationale behind the requirement of pre-action notice