Facts:

The 1st defendant is a customer of the claimant – a commercial bank. The claimant alleged that it advanced several facilities to the 1st defendant, which were guaranteed by the 2nd to 4th defendants – directors of the 1st defendant running into principal sum of N20,000,000.00 (Twenty Million Naira) with accumulated interest of N63,656,336.83 (Sixty Three Million, Six Hundred And Fifty Six Thousand, Three Hundred and Thirty Six Naira, Eighty Three Kobo). It started in April, 1995 when the 1st defendant via an offer letter applied for the loan of N5,000,000.00 (Five Million Naira) at 3% interest per annum. The offer was accepted and the facility advanced. The 2nd to 4th defendants pledged real property as collateral for the loan.

In November 1995, the 1st defendant applied for another facility of N5,000,000.00 (Five Million Naira) in the form of commercial paper, which was advanced and guaranteed by 2nd and 3rd defendants. The commercial paper was converted to overdraft and parties agreed that 21% interest rate was to be charged. In 1997, another facility of N5,000,000.00 (Five Million Naira) was advanced to the 1st defendant bringing the overdraft to N10,000,000.00 (Ten Million Naira) and a property in Port Harcourt owned by one Reginald Nwabake was pledged and a deed of tripartite legal mortgage executed. These facilities were alleged to be unpaid yet the 1st defendant applied for another facility of N10,000,000.00 (Ten Million Naira) which was advanced by the claimant and guaranteed by the 2nd to 4th defendants. These facilities were not paid and continued to accumulate interest running to the cumulative sum of N5,000,000.00 (Five Million Naira) as at May 2005. The claimant
alleged that it wrote series of demand letters to the defendants who failed, refused or neglected to redeem the debt. The claimant further alleged that it could not exercise its right over one of the pledged properties because it was fraudulently acquired by one of the defendants and was subject of litigation. The claimant therefore, filed a claim at the High Court of Lagos State seeking orders of the court to compel the defendants to repay the debt and accrued interest including an order attaching the pledged properties.

After being served with the process, the defendants filed their defence denying any liability and incorporated a counter claim. The defendants alleged that they have fully liquidated the debts and that the court should order the claimant to return to the 2nd and 3rd defendants the personal guarantees they issued to the claimant. Furthermore, the defendants alleged that the claimant was indebted to it in the sum of N1,146,979.78 (One Million, One Hundred and Forty Six Thousand, Nine Hundred and Seventy Nine Naira, Seventy Eight Kobo) after employing the services of an accountant to audit the 1st defendant’s account. The defendants also sought interest on the amount stated above.