SAN Demands N115m Fees as Firm Alleges ‘Fraudulent Misrepresentation’

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SAN Demands N115m Fees as Firm Alleges ‘Fraudulent Misrepresentation’

A Senior Advocate of Nigeria (SAN), Prof Yemi Akinseye-George, is demanding a fee of N115million from a firm, Nacenn Nigeria Ltd, for services rendered in recovering a debt. But the company has filed a counter-claim, insisting its contract with the SAN had ended. The firm claims the SAN misled it into overpaying him and is demanding a refund. 
 
What began as a cordial lawyer-client relationship between a Senior Advocate of Nigeria (SAN), Prof Yemi Akinseye-George, and a company, Nacenn Nigeria Limited, has ended up a subject of litigation.

The SAN sued the firm over alleged unpaid professional fees of N115million.

He is praying the High Court of the Federal Capital Territory for an order to “attach and deduct” the sum from the balance in the company’s account and to transfer it to his account.

The money in the account, he said, are inflows from judgment-sums received from the Federal Government, which he facilitated.
But the company filed a counter-claim, asking for a refund of N50milliion which it claimed it overpaid the SAN due to his “fraudulent misrepresentation”.
 
The claims
Akinseye-George, through his counsel Akinlolu Kehinde (SAN), said the company’s Chairman/Chief Executive Officer, the late Chief Greg Ezulike, engaged him to help recover some long-standing debt of about N2billion owed the company by the Federal Government.

The claimant said he was engaged due to his expertise as a professor of law and experience in mediating between the government and the private sector, having also worked as a special assistant to three different Attorneys-General of the Federation.

He said the late Chief Ezulike asked him to do all within his powers to recover three judgment-debts worth about N2bilion and was engaged via a February 28, 2018 letter.

Akinseye-George said the first defendant (Nacenn Nigeria) promised to pay him 10 per cent of any money received from the Federal Government on or before March 30, 2018.

According to him, he immediately began negotiations with relevant high officials in various ministries.

He said he briefed his client about the developments at the expiration of the time given him.

He said he was asked “to continue to carry out the assignment”, with the assurance that the promised 10 per cent would be paid on the recovery of the debt.

The SAN said he succeeded in recovering the funds. He said he was informed during a visit to the Ministry of Justice on June 4, 2018, that the government was about to pay some judgment-creditors and contractors.

According to the claimant, he subsequently signed a settlement agreement with the ministry on the company’s behalf, which culminated in the payment of the first N100million, after which the company paid him 10 per cent (N10million).

Akinseye-George said he also recovered a second instalment payment of N150million through the ministry, and he was also paid 10 per cent (N15million).

He said the debt repayment was eventually transferred to the Ministry of Finance, and he facilitated meetings between the relevant officials and the company’s representatives.

The SAN said the finance ministry formally took over the payment of the debt in April 2019 based on his efforts.

Sadly, Chief Ezulike died on October 23, 2019, aged 83.
Akinseye-George said the late Ezulike’s son, Afam, called to reassure him that the company would honour the father’s commitment to him.

The claimant said due to his “persistent follow-ups”, the Ministry of Finance paid N500million to the company in November 2019. The company, in turn, paid him the agreed 10 per cent.

The SAN said following numerous visits to the ministry and several letters, the ministry decided to pay the balance in three equal instalments of N416,666,666.6, with the first instalment paid in May this year.

Akinseye-George said to his “utter surprise and dismay,” the company refused to pay him the agreed 10 per cent fee. 

Instead, he was paid “a paltry sum of N10.4million being 2.5 per cent of the amount paid the defendant by the Federal Government”.
He said the Ministry of Finance, on June 15, paid the second instalment to the company.

The SAN said the company owes him N31,666,666.6 less N10.4million for the first instalment; N41,666,666.67 for the second instalment payment and the same sum for the third instalment payment, which he said was due to be paid in July.

The claimant said the first defendant was indebted to him to the tune of N73,333,333.27 up to the time of filing the suit and is entitled to a further N41,666,666.67 in view of the last payment.

Akinseye-George claims “he has suffered great financial inconvenience” due to the refusal to pay the balance of his professional fees, adding that the company is “stopped from denying the efforts and work of the claimant”.

The SAN averred that “even though the letter stated that his contract would automatically terminate on March 30, 2018, a new contract was created by the actions, words and conduct of the first defendant after that date”.

He said he not only continued to render his professional services, but also wrote letters, facilitated meetings, visiting the finance ministries of justice and finance countless times, and exchanged over 30 messages with the late chairman and other executives.

The SAN said he continued “representing the first defendant according to the terms of the contract engagement”.

The claimant said he would rely on the doctrine of estoppels, adding: “The first defendant cannot deny the existence of a contractual relationship between it and the claimant”.
 
Nacenn Nigeria’s defence/counter-claim
Nacenn Nigeria, in its statement of defence and counter-claim, said the suit cannot be maintained against it for non-disclosure of a reasonable cause of action.

The firm said it would urge the court either before or during the trial to dismiss or strike out the claim.

The defendant said it was aware that, based on the February 28, 2018 letter of engagement, Prof Akinseye-George “was engaged to provide additional services to support the efforts of other firms already engaged by the first defendant those in relation to the same matter”.

The defendant/counter-claimant, through its counsel Godwin Omoaka (SAN), said the letter of engagement “did not stipulate that the first defendant will pay the claimant 10 per cent of any payment received from the Federal Government on or before 30th March 2018”.

The company added: “Rather, the letter stipulates that the first defendant’s obligations (including payment of 10 per cent of any recovered sum) to the claimant shall terminate automatically after 30th March 2018 from the date the claimant receives the letter if the first defendant does not receive payment of the total sum of N2billion from the Federal Government.”
Nacenn Nigeria admitted that it was paid N500million in November 2019.

However, it said following the death of its former Chairman/CEO, the SAN, by a letter of demand dated 27 November 2019, asked the company, amongst other things, for N100million, “being 20 per cent [instead of the agreed 10 per cent] of the N500million recovered from the Federal Government on behalf of the first defendant in November 2019”.

The company alleged: “The claimant in making the demand for 20 per cent of the said recovered sum took advantage of the situation of the death of the former Chairman/CEO of the first defendant and the fact that the letter of engagement was not readily available to the new management of the first defendant company to ascertain the exact terms of the engagement or his alleged oral agreement with the late Chairman/CEO of the first defendant company.”

The first defendant/counter-claimant added: “Upon discovering the letter of engagement and reading the terms contained therein, Afam Ezulike, the son of late Chief Ezulike, who succeeded his father to become the new Chairman/CEO of the first defendant company, discovered that the claimant had misrepresented that he was entitled to 20 per cent of the recovered sums from the Federal Government, when the letter of engagement provided that the claimant will be entitled to only 10 per cent of the recovered sums, which was followed by the conducts of the parties after the termination of the letter of engagement in March 2018.

“This defendant found from records now available that the claimant had used the occasion of the death of the former Chairman/CEO of the first defendant company to fraudulently misrepresent his entitlements as to professional fees for the recovery of the due debt from the Federal Government by inflating same from 10 per cent to 20 per cent and the pendency of his contract with the defendant which had long expired since March 2018 but was by conduct effectively terminated in or about 09 August 2019.”

The company said the payment of two tranches of N416,666,666.6 in May and June was due to the “joint efforts of other persons engaged by the first defendant for the recovery of the debt”.

According to Nacenn Nigeria, the “claimant was fully aware that his contract with the first defendant company had terminated but chose to play on the ignorance of the new management of the defendant regarding terms of his contract of engagement”.

The firm continued: “In fairness to the claimant and as a sign of good faith, the first defendant considered the efforts of the claimant in recovering a very significant amount of the debt owed by the Federal Government and decided to and did pay him 2.5 per cent of the subsequent payment it received in May 2020, despite its discovery of the contract of engagement and the percentage stated therein and the fact that the termination predated the payment.

“However, the claimant continued to insist that he was still entitled to 10 per cent of the sums recovered from the Federal Government in May 2020 and June 2020, even though he had become aware that the defendant had become aware that his engagement with the first defendant for that purpose had long been terminated.”

The defendant insisted that it is “not indebted to the claimant in the amount alleged, having paid him for his services up till April 2020 and compensating him to the tune of N10,416,666.65 for his efforts and assistance with the matter, even after his termination had come to the knowledge of the defendant”.

The company said the SAN is rather indebted to it in the sum of N50million “being excess fee paid to him in November 2019 following the claimant’s misrepresentation of due professional fees to the new management of the first defendant, demanding 20 per cent [instead of agreed 10 per cent] of the recovered sum of N500milion by the Federal Government in November 2019”.

The company said it did not make a new promise to Prof Akinseye-George upon the death of its former Chairman/CEO to pay him 20 per cent of the recovered debt.

Nacenn Nigeria said: “Rather, it intended to continue dealing with the claimant based on the existing contractual terms, that is, payment of 10 per cent of recovered debt value as professional fees to the claimant.

“The payment of 20 per cent of recovered debt value in November 2019 was due to the misrepresentation made by the claimant to the new management of the first defendant vide his demand letter 
clearly stating that he was entitled to 20 per cent of the recovered debt value instead of the agreed and conventional 10 per cent.

“The claimant’s misrepresentation cannot constitute a new promise, or better said, vary the agreement of the parties. 

“Rather, it constitutes an attempt by the claimant to unilaterally vary the terms of his engagement, which variation is vitiated by the complained conduct of the claimant.

“Therefore, the doctrine of contractual estoppel cannot avail the claimant in this circumstance.”
 
Counter-claim
The first defendant claimed that due to the SAN’s alleged “misrepresentation of facts about his professional fees due from any recovered debts from the Federal Government,” it incurred a financial loss to the tune of N50million, including any accrued interest on the sum, which it paid the claimant in November 2019, in the belief that he was entitled to it.

The company added: “The claimant failed to disclose that the agreement between him and the first defendant had terminated since August 2019.

“The claimant misrepresented that he was paid the sum of N50,000, 000 on 28 November 2019, being 10 per cent of the sum of N500,000,000 paid to the defendant by the Federal Government of Nigeria, while in fact, the claimant fraudulently demanded and obtained N100,000,000 from the defendant, being 20 per cent of the sum of N500,000,000 paid to the defendant by the Federal Government.

“The claimant did not disclose the fact that he sent a letter to the defendant barely a month after the death of the former Chairman/CEO of the defendant to demand 20 per cent of the sum of the N500,000,000 received from the Federal Government because the first defendant’s new management had not found the letter of engagement and trusted the claimant was being honest in his demands.

“The claimant misrepresented that the defendant is indebted to the sum of N73,333,333. 27, when in fact, this allegation is blatantly false.”

The company said it has “suffered an enormous loss arising from the fraudulent misrepresentation of the claimant’s professional fees” as it would have invested the N50million or kept it in an interest-yielding account.

The defendant/counter-claimant is, therefore, praying the court for a declaration that the conduct of the claimant in misrepresenting to the first defendant his professional fee as 20 per cent of the recovered debt value was “unjustified and wrongful” and “vitiates the engagement of the claimant with the first defendant”.

It is demanding the “sum of N50million with accrued interest as the prevailing bank rate from 28 November till the time of final liquidation of the claimed sum”.

The company is also asking for “cost of this action on a full indemnity basis including but not limited to the first defendant’s costs of engaging counsel to represent it in these proceedings and its out-of-pocket expenses”.
 
Firm seeks to vacate order freezing account 
The company has filed an application praying for an order setting aside or discharging the ex-parte order of Mareva injunction obtained against it by the claimant on July 6, 2020, to attach N73,333,333.27 in its account.

“The applicant denies indebtedness to the claimant as alleged by the claimant in its motion ex-parte leading to the granting of the order of Mareva injunction by this Honourable Court on 6 July 2020,” Nacenn Nigeria said.

The firm said the court was misled “into attaching the entire funds in the Zenith Bank account of the applicant which far exceeds the alleged debt owed the claimant”.

It urged the court to lift the order or vary it by attaching only the sum of N73,333,333.27.

“Zero evidence was led to show that the applicant was in the process of dissipating its assets especially carting it out of the jurisdiction of this court to justify the grant of the freezing order,” the defendant said.
 
Court varies order
The court, on October 14, granted Nacenn Nigeria’s request for a variation of the Mareva injunction.

Justice Olukayode Adeniyi limited the attached sum to N115million, which formed the principal claim.

Omoaka had told the court that the interim order of Mareva injunction made by the court made it impossible for his client to access its Zenith Bank account even when the balance was over the N115million being claimed by the SAN.

SAN denies claim
Akinseye-George denied the allegation of fraud or misrepresentation. 
He stated that the N50million was deployed to honour the commitments made by the late Chief Ezulike to those who facilitated the recovery of the judgment-debt.

“These commitments were known to the General Manager, Mr Ifeanyi Okwusa and Mr. Maduka Anigbogu. 

“The N50million was deployed fully for the purpose it was brought, through Mr. Ifeanyi Okwuosa.

“I never misrepresented any fact or facts to anybody, including Afam Ezulike, in respect of anything done in the course of the recovery of the entire debt,” the SAN said.

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