Gold Link Insurance Company Ltd V. Petroleum (Special) Trust Fund (2005)

LawGlobal-Hub Lead Judgment Report

JIMI OLUKAYODE BADA, J.C.A.

This is an appeal from the Judgment of the Federal High Court, Abuja, in suit No: FHC/ABJ/CS/179/2003 – PETROLEUM (SPECIAL) TRUST FUND AND GOLD LINK INSURANCE COMPANY LIMITED delivered on the 3rd day of October 2006.

Briefly the facts of the case are that the Respondent as the Plaintiff at the lower Court filed this action on the undefended list on the 4th day of April 2003. The matter was later transferred to the general ca se list and pleadings were ordered.

In the suit, the Respondent as Plaintiff claimed the sum of (N3,017,707,37) i.e. Three Million, Seventeen Thousand, Seven Hundred and Seven Naira, Thirty Seven Kobo, being money had and received from the Plaintiff by Tonada Publications ltd and guaranteed by the Defendant i.e. Gold Link Insurance Company Limited, as 70% down payment for the supply of stationery materials and which items were not supplied.

At the trial, the Respondent relied on its guarantee agreement with the Appellant dated 6th August 1998 in which the Appellant guaranteed the payment to the Respondent if Tonada Publications failed to perform.

The Appellant’s case on the other hand was that the Respondent nominated the manufacturer of the stationery materials to whom Tonada paid the cost of manufacturing but that the manufacturer failed to produce the goods. The Appellant therefore maintained that since the failure of Tonada Publications limited to supply was because the manufacturer nominated by the Respondent failed to produce the stationery, it was not liable.

The lower Court gave Judgment in favour of the Respondent on the ground that the Respondent had proved its case by showing that the contractor, having collected the 70% down payment failed to supply the goods, thereby making the Defendant i.e. his guarantor liable to refund the money collected.

The Appellant dissatisfied with the said Judgment now appealed to this Court.

The Learned Counsel for the Appellant abandoned Ground one of his Notice of Appeal and relied on Ground 2. He formulated only one issue for determination as follows:-

“Whether the Judgment of the lower Court is not against the weight of evidence adduced before His Lordship namely that the failure of the manufacturer nominated by the Respondent to produce the goods was the reason the guaranteed contractor failed to supply the goods.”

The Learned Counsel for the Respondent formulated two issues for determination as follows:-

“Issue 1

Whether the alleged failure of the manufacturer to produce absorbs the Appellant of her obligation under the contract of guarantee which obliges her to refund the advance payment made to the contractor in event of failure of the contractor to supply the goods.

Issue 2