Henkel Chemicals (Nigeria.) Ltd. V. A.g. Ferrero & Company. Ltd. (2002)
LawGlobal-Hub Lead Judgment Report
SALAMI, J.C.A.
The plaintiff’s claim before the trial court against the defendant was as follows: –
“(a) N449,474.45 (Four Hundred and Forty Nine Thousand Four Hundred and Seventy Four Naira Forty-Five kobo) only being the sum outstanding against the defendant in favour of the plaintiff on valuation certificate No. 18 issued by the defendant’s Architects on 7th December, 1989.
(b) Interest on the outstanding sum herein above at the minimum rate of 25% per annum from the date of the default by the defendant to effect payment according to contract i.e. from 29th day of December, 1989, till judgment in this suit.
Interest at the rate of 10% per annum on the judgment debt from the date of judgment until the judgment debt is fully and finally settled by the defendant.”
The action was brought under the undefended procedure at the Kaduna State High Court of Justice. Upon the defendant filing a notice of intention to defend supported by affidavit disclosing a defence on the merit, the learned trial Judge, Yahaya, J, transferred the suit from undefended to general cause list. Whereupon pleadings were ordered, filed, exchanged and settled at the amended statement of claim and a statement of defence. The suit which had a chequered history was then transferred to Akaahs, J., (as he then was) before it was eventually assigned to Inuwa, J, who concluded the trial.
The plaintiff called his only one witness and closed its case and eventually delivered its speech owing to dilatory tactics of the defendant, it neither adduced evidence nor addressed the court on the case. Learned trial Judge, Inuwa, J., in a reserved and considered judgment, acceded to the plaintiff’s three reliefs with costs assessed at N4,000.00. The defendant was unhappy, and being dissatisfied with the judgment, appealed to this court on three grounds of appeal.
Pursuance of the notice of appeal filed, particularly the grounds of appeal contained therein, issues were framed in the briefs of argument filed and exchanged in accordance with the provisions of Order 6 rules (1) and (2) of the Court of Appeal Rules, Cap.62 of the Laws of the Federation of Nigeria, 1990. In the appellant’s brief these 2 issues were identified as calling for determination:-
“(1) Whether having regard to the pleadings and evidence before the lower court, the trial lower court was justified in awarding the respondent 25% per annum interest on the claimed sum of N449,474.45 from December 29, 1989, to 16/6/2000. This issue derives from ground 1 of the grounds of appeal.
(2) Whether the learned trial Judge exercised his discretion both judicially and judiciously in awarding interest on the outstanding claimed sum of N449,474.45 at the rate of 25% per annum from December 29, 1989 to 16/6/2000. This issue derives from ground 3 of the grounds.”
The respondent’s brief carried only one issue which issue reads as follows:
“Whether having regard to the unchallenged evidence led by PW.1 on behalf of the respondent, coupled with the fact that the appellant did not lead evidence at the trial, the trial court was light to have awarded interest of25% per annum on the claimed sum of N449,474.45k from 29th December, 1989 to 16th June, 2000.”
This identification substantially adopts the appellant’s first issue as the only issue calling for determination in this appeal.
But the learned Counsel for respondent, on the question of formulating issues, took exceptions to some aspects of appellant’s formulations. Firstly, he contended rightly, in my view, that appellant’s issue 2 cannot competently derive from ground 3 of the grounds of appeal to which the appellant related it. Ground 3 is the omnibus ground and reads as follows:-
“The judgment is against the weight of evidence.”
This ground of appeal is usually directed at the summary and evaluation or appraisal of evidence by the trial Judge as well as his ascription of probative value to the evidence adduced before him. It postulates that there was no evidence which, if accepted, would support the findings of the trial Judge or the inference which he had drawn thereon. I do not think that the ground of appeal can be extended to cover principle or principles relating to right or liability to interest which to my mind is an issue of law. It is settled that the omnibus ground cannot sustain or give rise to a specific point of law. See Calabar East Co-op v. Ikot (1999) 14 NWLR (Pt. 638) 225, a Supreme Court decision and I therefore, agree with the submission of the learned Counsel for the respondent that appellant’s issue 2 cannot derive from an omnibus ground of appeal, that is ground 3 of the grounds of appeal. Consequently, the issue raised as well as the argument proffered thereof are incompetent. The ground is deemed abandoned as impliedly no viable or competent issue is framed from it. The ground of appeal, the issue purportedly framed there from and the argument canvassed thereon, having been ruled incompetent are hereby struck out.
I agree also with the learned Counsel for respondent’s observation that an examination of the two issues formulated in the appellant’s brief and the ground of appeal from which the respective issues had been derived, no issue had been related or derived from ground 2. It is settled that a ground of appeal from which no issue had been identified is deemed abandoned and liable to striking out. See Ojegbe & Another v. Kent Omatsone & Others (1999) 6 NWLR (Pt.608) 591, 597 – 598 cited in the respondent brief. The resultant affect of this is to strike out ground 2 of the grounds of appeal. The appellant is now left with only one issue which is substantially similar to the respondent’s sole issue which is derived from ground 1 of the grounds of appeal. In canvassing the issue learned counsel for appellant, in the appellant’s brief, reiterated the award of interest of 25% on the sum claimed against the defendant.
He also read the plaintiff’s claim contained on paragraph 13 of the amended statement of claim. Learned Counsel contended that throughout the testimony of the only plaintiff witness, one Godwin Ugbabe, nowhere was evidence adduced regarding the basis of the pre-judgment interest of 25% per annum. Learned Counsel further contended that parties are bound by their contract which cannot be varied unilaterally.
In this regard, learned Counsel for respondent referred to paragraph 8 of the amended statement of claim wherein the respondent pleaded that the appellant failed to pay the sum stated in the certificate No. 18 within 21 days of the date of the issue of the certificate and contended that there is nowhere throughout the amended statement of defence where appellant denied the respondent’s entitlement to pre-judgment interest.
Learned Counsel then submitted that the appellant having defaulted in settling the amount of N449,474.45 shown on certificate No. 18 within the 21 days of the date of issue of the certificate the respondent’s claim for interest at the rate of 25% is well founded owing to the value of the money which the appellant has for no just cause withheld. He relied on the cases of Adeyemi v. Lan & Baker (Nig.) Ltd. (2000) 7 NWLR (Pt.663) 33, 48 and Koloko v. Joseph Nasr (2001) 11 NWLR (Pt. 725) 573, 582.
In the instant case, the respondent claimed as follows in paragraph 13(b) of his amended statement of claim: –
“13(a) ……………………….
(b) interest on the outstanding sum at the minimum rate of 25% per annum from the date of the default by the defendant to effect payment according to contract i.e. from 29th day of December, 1989, till judgment in this suit; and
(c) ……………………………
And the only piece of evidence adduced in support thereof is-
“we ask the court to recover the sum stated on certificate No. 18 and pay 25% interest from 29/12/98, till judgment is given in this case.”
The same witness Mr. Ugbabe while testifying under cross examination stated as follows:-
“The basis for our claim of 25% interest is the value of the money. That matter of interest has nothing to do with the contract.” (italicizing mine)
And finally on evidence first plaintiff witness also testified as follows:-
“By the term of agreement, the contract sum was supposed to be paid by monthly basis based on Henkel’s Quantity Surveyor’s assessment of actual work done on site with full value of material on site. The Henkel’s Architect will then be handed over the valuation by the Henkel’s Quantity Surveyor who will then formally issue a certificate of certification that the work was also done in accordance with the terms of the contract, the certificate will then be given to the plaintiff… the said certificate to the defendant, payment is supposed to be within 21 days thereafter.”
(italicizing mine)
There is substance in the submission of the learned Counsel for appellant that parties to a contract are bound by the terms and conditions of the agreement entered into and it is not permissible for either party unilaterally to vary the terms of the contract. The evidence just set out in this judgment are the pieces of evidence proffered in respect of appellant’s liability to pay and the respondent’s entitlement to interest in respect of the default of payment on the outstanding valuation certificate No. 18 before judgment. It contains no evidence of consensus ad idem on payment of interest before the judgment is delivered. The provision requiring payment of interest which was lacking could easily have been inserted into the term of the agreement, if parties were so mindful, to the effect that valuation certificate be settled within 21 days after it is served on the employer otherwise interest would be payable. A rate of interest on default of payment of outstanding sum on a valuation certificate could have been agreed upon. There is no evidence of such an agreement between the parties. Neither was evidence led of a trade practice or mercantile practice nor existence of fiduciary relation between the parties. Learned trial Judge was equally not referred to a statute providing for payment of interest on outstanding bill before judgment is given in respect of the indebtedness.
There is no merit in the contention of the learned Counsel for appellant that the appellant having defaulted on the valuation certificate the respondent’s claim for interest at the rate of 25% is justified considering the value of the money which the applicant has for no just cause withheld on the strength of the cases of Adeyemi vs. Lan & Baker (Nig.) Ltd. (supra), Koloko v. Joseph Nasr (supra).
The mere fact that the sum of money is substantial is not enough to justify award of interest on debt. The general principle is that interest is not payable or recoverable, at common law, on ordinary debt in the absence of some-
(a) contract express or implied; or
(b) some mercantile usage;
(c) by statute, such as the Judgment Act of 1838 and Ss. 9(3) and 57 of the Bills of Exchange Act, Cap. 35 of the Laws of the Federation of Nigeria, 1990. See Lord Tenderron’s Act – Civil Procedure, 1833; London, Catham and Dover Railways v. South-Eastern Railway (1893) AC 429, 434; Page v. Newman (1829) 109 E.R. 140, 141 and Re Anglesey (1901) 2 Ch. 548.
A court also, under its equitable jurisdiction, has power to award interest where a person in a fiduciary position has improperly enriched himself from his fiduciary position: Harsant v. Blaine Macdonald & Co. (1887) 3 TLR 689; Wallersteiner v. Moir (No.2) (1975) QBD 373. In Spartali v. Constantinidi (1872) 20 WR 823 interest was awarded on partnership money retained by the defendant beyond an agreed period. See Burdick v. Garrick (1870) 5 Ch. App. 233, 242 where compound interest was awarded.
It is established that all agents owe their principals certain fiduciary duties which may atimes arise from contract, express or implied. But quite often they are independent of contract and are imposed by equity on the agent by the mere fact of their peculiar relationship. Vide Diab Nasr & Another v. Anthione Rossek (1973) 1 All NLR (Pt.1) 629; (1973) 6 SC 121. Such a compensatory award of interest should be in the contemplation of both parties under the rules for assessment of damages in contract cases laid down in Hadley v. Baxendale (1854) Exchequer 341.
The postulation of learned Counsel for respondent that equity should intervene cannot be seriously pursued. It seems to me respectfully that equity does not intervene unless there is fiduciary relationship between the parties. There is nothing before the court establishing that the appellant is in a fiduciary position and has improperly profited from his fiduciary position. Neither is it proved that the appellant is an agent of the respondent. There is equally no material before the court to infer that compensatory award of interest on claim outstanding beyond 21 days of receipt of valuation certificate was within the contemplation of the parties. In the absence of evidence to the effect that, in event of a breach or default on the payment of a valuation certificate the defaulting party would be liable to interest on the outstanding sum, in my respectful view, the claim is not made out. As a party cannot unilaterally impose a term of contract on the other, the parties to the agreement must be ad idem on a term and condition of the contract before it becomes enforceable. The right to interest is equally not established without reference to a fiduciary relation, trade practice or custom or mercantile usage or statute providing for such interest. There is, therefore, no justification for the award of interest on the judgment debt from 29th December, 1989, to the date of judgment on 16th June, 2000. Indeed, the sole witness in the suit, Mr. Ugbabe, expressly admitted that “That matter of interest has nothing to do with the contract” under cross-examination. What then is raisin d’eter for the award of pre-judgment interest in this appeal? None.
In the circumstance of this appeal, learned trial Judge wrongly awarded pre-judgment interest. I am encouraged in this view by the Supreme Court decision in the case of Reuben N.A. Ekwunife v. Wayne (West Africa) Limited (1989) 5 NWLR (Pt.122) 422, 455 cited in the respondent’s brief that;
“Interest may be claimed as of right where it is contemplated by the agreement between the parties, or under a mercantile custom or under a principle of equity such as breach of fiduciary relationship.”
(Italicizing mine)
See the case of Kaduna State Transport Authority v. Samuel Ofodile (1999) 10 NWLR (Pt.622) 259, 265, Alfotrin Ltd. v. A.-G., Federation (1996) 9 NWLR (Pt.475) 634, 663; Menakaya v. Menakaya (2001) 9 SCNJ 1, (2001) 16 NWLR (Pt. 738) 203 and Edem v. Canon Ball Ltd. (1998) 6 NWLR (Pt. 553) 298, 315.
Finally, as a matter of practice and procedure, where interest is being claimed, the practice is to endorse the claim on the writ of summons and plead facts which support such entitlement in the statement of claim. Even, if it is not endorsed on the writ of summons, but the facts are pleaded on the statement of claim and requisite fees paid the court may, if proved on the preponderance of evidence, grant, the award of interest. In the instant case, the appellant failed to indorse award of interest in the writ of summons it took out. It is doubtful, if filing fees was paid in respect of the award of interest pleaded and claimed in the pleadings. Since payment of filing fees is condition precedent to vesting of the jurisdiction of the court and the same seems not have been paid the claim is incompetent. See Fada & Others v. Maman Naomi (2002) 4 NWLR (Pt.757) 318, 337.
The appeal therefore, succeeds and it is allowed. The award of pre-judgment interest of 25% on the judgment debt of N449,474.45 from 29th December, 1989, to the date of judgment which is 16th June, 2000, is without merit and is set aside. There shall be no order as to costs.
Other Citations: 2002)LCN/1241(CA)