POATSON GRAPHIC ARTS TRADE LIMITED & ANOR v. NIGERIA DEPOSIT INSURANCE CORPORATION
COURT OF APPEAL LAGOS DIVISION
(IKYEGH; ABUBAKAR; OGAKWU, JJ.CA)
The 1st appellant was a customer of the defunct Trade Bank Plc. which gave certain facilities to the 1st appellant secured by a deed of legal mortgage. The 1st appellant alleged that Trade Bank failed to administer the facilities properly; and consequently initiated an action against it at the High Court of Lagos State seeking inter alia, a declaration that the defunct Trade Bank Plc. was not entitled to enforce its rights of sale under the legal mortgage after the 1st appellant defaulted in repayment of the facilities. The matter was still pending in court when the respondent was appointed as the liquidator of the defunct bank which was already in distress. Thus, the respondent was substituted in the action against the 1st appellant. With the leave of court, the respondent amended the existing statement of defence and incorporated a counterclaim which for the first time brought the 2nd appellant into the matter. The appellants responded to the counterclaim of the respondent by filing a defence and a counter claim. After being served with the defence of the appellants and the counterclaim, the respondent filed an application urging the court to dismiss the counterclaim of the appellants for being statute barred on the ground that the cause of action upon which the counterclaim of the appellants was predicated arose in 1997 and 1998 and therefore could not be litigated in 2009. On the 30th of September, 2014 the lower court delivered its ruling on the application of the respondent and dismissed the counterclaim of the appellants. The appellants were dissatisfied with the court’s ruling and filed a notice of appeal at the Court of Appeal, Lagos Division. One of the issues raised in the appeal is whether the learned trial judge was correct in his decision that the appellants’ counterclaims were statute barred.
Arguing the issue, learned counsel for the appellant contended that the lower court ought to have applied the provisions of Section 3 of the Limitation Law, Cap L67, Volume 5, Laws of Lagos State, 2003 to hold that the appellants’ counterclaims were not statute barred rather than resorting to Section 8 of the Limitation Law. Learned counsel contended that Section 3 is a special provision while Section 8 is a general provision and that a general clause does not extend to those things which are specially provided for. Learned counsel cited the cases of FMBN v. Olloh and Schroder v. Major in support of the maxim generalis clausula non porrigitur ad ea quae ante specialiter sunt compretiensa; (a general clause does not extend to those things which are before specially provided for). It was stated that the lower court was in error, which occasioned a miscarriage of justice, by rejecting Section 3 of the Limitation Law which deals specifically with counterclaims and applying Section 8 which generally deals with fresh actions. Furthermore, Learned Counsel submitted that by Section 3 of the Limitation Law, a counterclaim is deemed to have been commenced on the same date as when the action was commenced. It was suggested that the respondent’s counterclaim though filed in 2009, is by virtue of its being a counterclaim, and in accordance with Section 3 of the Limitation Law, deemed to have been commenced in 1998 when the suit was commenced. Therefore, the appellants’ counterclaims to the respondent’s counterclaim though filed in 2014 and 2012 respectively is deemed in the eyes of the law by virtue of the said section 3 to have been commenced in 1998. It was therefore posited that since the 1st appellant’s cause of action in the amended counterclaim accrued in 1998 and the 2nd appellant’s cause of action accrued at the latest in 1996, their counterclaims, deemed commenced in 1998, are therefore not statute barred. Learned Counsel urged the court to resolve the issue in favour of the appellants.
Responding to the argument of the appellants, Learned Counsel for the respondent contended that section 3 of the Limitation Law is inapplicable to the appellants’ counterclaims that were already statute barred and that for purposes of the limitation of action, a cause of action arises where there is a person who can sue and another who can be sued. Learned Counsel stated that the 2nd appellant only became a party in the suit in 2012 and could not have been deemed to have commenced a counterclaim in 1998, when it was not yet a party in the suit.
The respondent’s Counsel submitted that Section 3 of the Limitation Law is inapplicable to save the appellants’ counterclaims that were already statute barred. It was stated that for purposes of limitation, a cause of action arises where there is a person who can sue and another who can be sued. It was stated that the 2nd appellant only became a party in the suit in 2012 and could not have been deemed to have commenced a counterclaim in 1998, when it was not yet a party in the suit. It was also submitted that the 1st appellant’s counterclaim was for libel, which cause of action accrued in 1998 with a limitation period of three years; while the 2nd appellant’s counterclaim was in contract, which cause of action accrued between 1993 and 1996 with a limitation period of six years and therefore there was no way the cause of action which arose at different times and were filed at different times could be deemed to have been commenced together. Learned Counsel further contended that even though the respondent’s counterclaim may have been statute barred, it was rescued by the provisions of section 44 of the Nigerian Deposit Insurance Corporation Act (NDIC Act), a provision which does not apply in favour of the appellants. Learned Counsel cited UBA Plc v. Abdullahi to support his argument that by virtue of section 44 of the NDIC Act, its counterclaim is not statute barred, even though the limitation period had long expired. Learned Counsel urged the court to discountenance the argument and authorities cited by the appellants as being inapplicable and resolve the issue in favour of the respondent.
In resolving the issue, the court held thus:
The crux of the appellants contention is hinged on the legal principle generalis specialia derogant (special things derogate from general things). The appellants posit that the special provision of limitation period as it relates to a counterclaim in Section 3 of the Limitation Law overrides the general provision as it relates to a fresh action as set out in Section 8 of the Limitation Law. In Maxwell on Interpretation of Statutes (11th Ed.) page 164, it is stated that where a general intention is expressed and also a particular intention which is incompatible with the general one, the particular intention is considered an exception to the general one. See Aqua Ltd v. Ondo State Sports Council (1988) 4 NWLR (Pt 91) 622, Schroder v. Major (supra) and FMBN v. Olloh (supra). It is on this premise that the appellants maintain that Section 3 of the Limitation Law was applicable and that their counterclaims to the counterclaim of the respondents consequently dates back to 1998 when the action was commenced since the counterclaim of the respondent though filed in 2009 also dated back to 1998. The basis of this contention is the appellants’ presumption that the provisions of the Limitation Law apply to the respondent’s counterclaim, such that it can be said to have been filed in 1998 in order for the counterclaims to counterclaim to also take benefit of Section 3 of the Limitation Law and be deemed to have been filed in 1998. The provision of Section 3 of the Limitation Law is relevant. It provides:
“3. Set-off and Counterclaim
For the purposes of this Law, any claim by way of set-off or counter-claim shall be deemed to be a separate action and to have been commenced on the same date as the action in which the set-off or counter-claim is pleaded.”
The above provision is explicit and admits of no ambiguity in its stipulation that a counterclaim for purposes of the Limitation Law is deemed to have been commenced on the same date as the action in which the counter-claim is raised. So on the face of it, it would appear that Section 3 would apply to the appellants’ counterclaims for it to be deemed as having been commenced on the same date as the respondent’s counterclaim, which by the said provision would relate back to 1998 when the action was filed. But there is a caveat, and a big one at that. This shall only be so if the respondent’s counterclaim was filed pursuant to the provisions of Section 3 of the Limitation Law, or put differently, if the Limitation Law applied to the respondent’s counterclaim as to give it its validity. Where it does not, then totally different considerations would apply.
It is in this wise, that the provisions of Section 44 of the NDIC Act come into play. It reads:
“44. The provisions of the Limitation Law of a State or the Limitation Act of the Federal Capital Territory shall not apply to a debt owed to a failing or a failed insured institution.”
The above provision-is clear that the Limitation Law does not apply to the respondent’s counterclaim. The effect of this therefore is that by the provision, the respondent’s counterclaim to recover the debt owed Trade Bank Plc by the appellants cannot become statute barred, the effective commencement date for the counterclaim is when it was filed as it cannot be deemed to have been commenced when the main action was commenced because the provision of Section 3 of the Limitation Law which provides for that does not apply to the respondent’s Counterclaim.
Issue resolved in favour of the respondent.
Andrew Igboekwe, Esq., SAN with Miss Ogochukwu OfiIi & Mrs. Damilola Ajayi for the Appellants.
Layi Babatunde, Esq., SAN with J. O. Akolade, Esq., Opeoluwa Akinosi, Esq., Miss Tomike Layi-Babatunde & David Owoeye, Esq., for the Respondent.