Mr Olagoke Akinsulie & Anor. V. Mr Michael Ogunyanju (2011)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

CHINWE IYIZOBA, J.C.A. (Delivering the Leading Judgment)

This is an appeal against the judgment of Ogunwumiju J of the Ondo State Judiciary (as he then was) sitting at Ondo delivered on the 31st day of May, 2004 in which judgment was given in favour of the Respondent for damages for breach of contract.

The facts of the case are that the respondent as the plaintiff sued the appellants claiming N2.5 million naira general and specific damages for breach of the contract agreement entered into by the parties. One Ademola Akinsulie, the son of the Appellants resident in the United States decided to finance the construction of a duplex house for his parents, the appellants. Ademola and the respondent discussed and agreed on the terms of the building agreement. Ademola then stepped aside and left his parents to sign the contract agreement with the respondent. The 1st appellant and the respondent thereupon executed the contract agreement admitted in evidence as Exhibit P4. Although the name of the 2nd appellant appeared in the agreement as a party, she did not sign the agreement. By the contract agreement the sum payable to the respondent by the appellants for the job is N2,668,065.00 (Two Million, Six Hundred and Sixty-Eight Thousand, Sixty-Five Naira). This amount covered both building materials and the respondent’s workmanship. By clause 8 of the agreement, the amount was to be paid to the respondent in three installments of One Million Naira, One Million Naira and Six Hundred and Sixty- Eight Thousand, Sixty-Five Naira respectively.

From the very beginning, the appellants breached the terms of the agreement by failing to pay to the Respondent the installments as agreed. Later, they committed further breaches of the agreement by unilaterally purchasing materials for the job, unilaterally subcontracting plumbing, electrical and aluminum works of the building project to other people. The appellants ignored the protests of the respondent. When, finally the respondent got his solicitor to write a letter to the appellants and followed it up by serving them the writ of summons in this case, the appellants chased the respondent away from the building site when according to the respondent the job was 98% completed. The respondent further claimed that during the period of the contract, there was another oral agreement (which the appellants did not deny in their pleading or evidence) to renovate the old building of the appellants at the cost of N146,908.00.

The respondent consequently claimed against the appellants jointly and severally as follows:-

1. A declaration that the contract agreement dated 1/11/99 entered into by the parties at Ondo town is valid and subsisting
2. 2.5 million Naira for general and specific damages suffered by the plaintiff due to the breach of the contract agreement entered into by the parties on the 1st day of November, 1999 at Ondo town The appellants denied breach of the agreement and alleged that it was the respondent who breached the contract by his refusal to pay workmen who worked on the site and his refusal to pay for materials purchased leading to complaints from the workmen and retailers of building materials. The appellants further alleged that the respondent waived his right to complain of any breach as he had condoned the purported breach.

In a well considered judgment, the trial court held that the respondent’s claim that he had completed up to 98% of the building construction was not controverted by the appellants and that the appellants did not give any cogent or legal reason for terminating the contract. He consequently found the appellants in breach of the contract between the parties, and the respondent entitled to damages in restitution. The trial court however held that the respondent’s claim under relief I cannot hold, in that since he alleged a breach of contract, the contract cannot at the same time be subsisting. The court also held that the claim for general and special damages under relief 2 is inappropriate in an action founded on contract as the only damage claimable is loss naturally flowing from the breach or loss that arose within the contemplation of the parties. The trial judge then awarded the respondent the sum of N1,681,846,7k damages for the breach of the contract agreement and the sum of N146,908.00 for the renovation of the appellant’s old building.

Dissatisfied with this judgment, the appellants filed a notice of appeal with two grounds of appeal. Later with the leave of the court, they amended their notice of appeal by adding 5 other grounds of appeal. From these 7 grounds of appeal, learned counsel for the appellants formulated seven issues for determination in his brief of argument. They are:-

Issue 1: Whether the trial court can award the respondent a relief of quantum meruit that was not claimed (Grounds 1)

Issue 2: Whether the trial court was right in awarding the sum of N146,908.00 to the respondent for the cost of renovation of added jobs not contained or mentioned in Exhibit P4, the executed contract agreement (Ground 2)

Issue 3: Whether the 2nd appellant can be held liable under the contract document she did not sign. (Ground 3)

Issue 4: Whether there was any breach of the building contract committed by the Appellants in view of the holding of the trial Court that the Respondents had waived the breach, if any of clauses 7 and 8 of the contract document Exhibit P4 (Ground 4)

Issue 5: Whether the Respondent has any standing in instituting this action in his personal name (Ground 5)

Issue 6: Whether Exhibit P4 is independent of Exhibit P3 which gives detailed analysis of the contract sum of N2,668,065.00 contained in Exhibit P4 (Ground 6)

Issue 7: Whether the trial court was right in granting the relief for breach of contract against the Appellants when the necessary party in the cause of action was not joined in the suit (Ground 8)