Bookshop House Ltd. V. Stanley Consultants Ltd. (1986)

LawGlobal-Hub Lead Judgment Report

OPUTA, J.S.C.

The facts of this case are quite straightforward and simple. The Appellant, the Bookshop House Ltd. wanted to erect a multi storey ultra modern office block. Their architects Messrs Godwin and Hopwood then invited the Respondents, Stanley Consultants Ltd. to undertake the engineering design of the said building known as Bookshop House.

After the usual negotiations and exchange of correspondence, the Appellant, the Bookshop House accepted the Proposals submitted by the Respondents (Stanley Consultants Ltd.). These Proposals were tendered in evidence. Stanley Consultants Ltd executed their own part of the contract. But a dispute arose between the parties over one single solitary issue, namely “The Fees” to be paid by the Bookshop House Ltd. to Stanley Consultants Ltd. as per the contract documents.

This dispute was referred to Arbitration. During the arbitration, Stanley Consultants Ltd. tendered a series of documents marked EXS. A1 to A10. EX. A10 is of special importance to this appeal as it is the A.C.E. Conditions of Engagement. The Bookshop House Ltd. tendered EXS. B to B9. Both sides called witnesses to testify in addition to tendering the documents referred to above. In the Arbitration proceedings, the gordian knot was the proper interpretation of the phrase – “the total construction cost of the project”.

At the end of its deliberations, the Arbitrators held:-

“We are of the view that when EX. A1 is read in the light of other documentary evidence and the whole body of oral evidence adduced in these proceedings, the true and correct intention of the parties was as contended by the Claimants that the fee of 3.85% stipulated in the last paragraph at the bottom of page 4 of EX. A1 should be based on the total construction cost of the project, that is the overall construction cost of the building and should certainly not be based, as contended by the Respondents, on “the engineering works designed by the Claimants”. We hereby make an award accordingly and direct that calculation of fees under the last paragraph (headed “Fee A” on page 4 of EX.A1) shall be in accordance with this award”.

The Firm of Stanley Consultants Ltd. won before the Arbitrators.

The Bookshop House Ltd. was not satisfied with the Arbitration award which in effect means the interpretation given by the Arbitrators to the expression “the total construction cost of the project” to mean and include the overall construction cost of the building now known as Bookshop House. The Bookshop House Ltd. then applied to the Lagos High Court by Notice of Originating Motion for an Order:-

“1. Setting aside the Award of Chief C. O. Madarikan and Messrs. J. A. Owoseni and Akintola Williams dated 19th day of September, 1977.

2. Remitting the same to the said Arbitrators for reconsideration and that the costs of and incidental to his application may be paid by the Respondents”

In its Ruling, the Lagos High Court at p. 61 of the record of proceedings observed:-

“The term which the court is called upon to consider here, and which the arbitrators had earlier considered appears simple, though by the importation of reference to the definition by the Association of Consulting Engineers had acquired some technicality…The words to be construed here as rightly pointed out by the arbitrators are “total construction cast of project”, if that was on, there would appear to be no difficulty for we only need to ascertain the total cost of the project in this case, the Bookshop House as it stands and nothing more, but it did not stop here, it went further and provided, that construction cost in that con should be interpreted as generally defined by the Association of Consulting Engineers. This last clause, in my own considered, view, imports a technical meaning to the word “construction costs” in the earlier Clause, which tends to modify the literal meaning of the said words.”

After considering a number of authorities, the Lagos High Court per Johnson, J. (as he then was) exercised the powers conferred on the court under Section 11(1) of the Arbitration Law, Laws of the Federation of Nigeria & Lagos 1958 and remitted the award to the Arbitrator:-

“for consideration on the basis that the interpretation to be accorded to the terms in dispute is as decided by this court, i.e. assessing the fees due to the respondent, not on the total cost of the construction of the C.S.S. Bookshop Building, but on the cost of work done by them as engaged by the applicant. It is ordered that an award based on the combined meaning of “Project” and “the Works” as defined in Ex.C and adjudged by this court be used as a guide in reconsidering the award”. The High Court thought (see p.63 of the record) a marriage of the definition of “project” and “the works” “would serve as a useful aid to ascertain the meaning of the words “cost of construction” because those words related to “project” and “the works” as defined in Ex C and adjudged by this court be used as a guide in reconsidering the award.”

The High Court thought (see p.63 of the record) a marriage of the definition of “project” and “the works” “would serve as a useful aid to ascertain the meaning of the words “cost of construction” because those words related to “project” and “the works” in connection with which the services of the respondent were engaged”.