Mr. P. T. Adedeji V. Dr. Moses Obajimi (2018)
LAWGLOBAL HUB Lead Judgment Report
SIDI DAUDA BAGE, J.S.C.
This is an appeal against the Judgment of the Court of Appeal delivered on the 14th day of June, 2007; coram: Afolabi Fabiyi, Musa Dattijo Muhammed, Amina Adamu Augie, JJCA., sitting at the Ibadan Judicial Division of the Court of Appeal wherein, the learned Justices of the Court of Appeal allowed the Appeal taken out by the Respondent who was then the Appellant before the Court below. The facts that led to this appeal are hereinafter succinctly reproduced.
The Respondent, who at the time, was the chairman of a business concern: International Insurance Group Nigeria Limited intended to sell the business and the Appellant was willing to buy. To this effect, the Appellant and Respondent executed a Memorandum of understanding (Exhibit 7) on 4th February, 1999. By that Memorandum of understanding, parties agreed that the purchase price of the Business shall be N5,000,000.00 (Five Million Naira only), it was also agreed that the Appellant shall pay the purchase price on or before 30th April, 1999. It was also agreed by the parties that the Appellant shall bear some sundry
expenses one of which included 15% statutory deposit with the Central Bank of Nigeria.
The Appellant, went ahead to pay the sum of N500,000.00 (Five Hundred Thousand Naira only) as statutory deposit to the Central Bank of Nigeria.
The purchase price of N5,000,000.00 (Five Million Naira Only), remained unpaid by the Appellant by 30th April, 1999, the date agreed by parties in Exhibit 7 for fulfillment of same. The Appellant however, on 26th October, 1999 wrote to the Respondent and his privies demanding from the Respondent the refund of the sum of N500,000.00 (Five Hundred Thousand Naira only), which had earlier been paid to the Central Bank of Nigeria. The Respondent, miffed by the Appellant’s demands instituted an action before the High Court of Oyo State, Ibadan Judicial Division on the 6th day of July 2001, wherein he sought the following reliefs at page 5 of the record of appeal:
“1. A declaration that by the terms of the memorandum of understanding dated 4/2/99 entered into by the Plaintiff and the Defendant at SW9/1406 Ring Road, Ibadan and executed by the Plaintiff and the Defendant at the Plaintiffs office in Ibadan, the Plaintiff is neither
indebted to the Defendant in the sum of N500,000.00 or indeed any other sum at all, nor liable to refund the sum of N500,000.00 to the Defendant nor indeed any sum at all.
- The sum of N1,000,000.00 (N1 million) being general damages for breach of the aforesaid memorandum of understanding by the Defendant on 30/4/99.
- 21% interest on the sum claimed from 1/5/99 till judgment is given and thereafter at 21% till judgment sum is fully recovered.
- Further and other reliefs.
- Cost of this action.”
The Defendant, on receipt of the writ and endorsed claim, filed a Counter-Claim where he prayed the trial Court for the reliefs at pages 22 to 24 of the record of appeal:
“(a) The sum of N500,000.00 paid by the Defendant to the Central Bank of Nigeria as Part of the Statutory Deposit on an agreement with the Plaintiff to buy the Plaintiff’s International Insurance Group Limited which purchase was not conclusive.
(b) Interest at the rate of 21% on the said sum of N500,000.00 from 8th day of March 1999 until judgment is given and thereafter until the entire judgment sum is liquidated.”
Upon consideration of the cases of the
parties, the Trial Court, in its judgment delivered on 28th May 2003, found that the Appellant was in breach of a fundamental term of the Memorandum of Understanding (Exhibit 7), which stipulated that the full purchase price of N5,000,000.00 (Five Million Naira) only be fully paid on or before 30th April, 1999.
The Trial Court, in the interest of justice and on the principle of equity also ordered the refund of the sum of N500,000.00 (Five Hundred Thousand Naira Only), i.e. 15% statutory deposit paid by the Appellant to the Central Bank of Nigeria.
The Respondent, dissatisfied with the judgment of the Trial Court, took out an appeal before the Ibadan Judicial Division of the Court of Appeal, vide a Notice of Appeal on 5th June, 2003, the Appellant with the leave of the Court below, Cross-Appealed against the part of the judgment touching on non-award of interest on the sum of N500,000.00 (Five Hundred Thousand Naira only), awarded to him by the Trial Court. The Court below, found for the Respondent while setting aside the judgment of the trial Court and dismissed the Counter-Claim of the Appellant.
The Appellant, irked, by the judgment of the
Court below, has taken out this Appeal before this Court vide a Notice of Appeal filed on 22nd August 2007 containing 5 grounds of appeal to wit: –
“1. The Learned Justices of the Court of Appeal erred in law in holding that the Appellant breached the contract between him and the Respondent.
- The learned justices of the Court of Appeal erred in law in construing Exhibit 7 particularly when it held thus:
“……the only reason why the appellant may reimburse respondent as per Clause V(I) of Exhibit 7 is where the Contract was frustrated by the appellant himself or by an Act of God or if by mutual consent, the parties agree that the respondent be reimbursed…certainly, it stretched the interpretation of Exhibit 7 too far and beyond reasonable limit to hold that the Respondent was entitled to reimbursement in the circumstance created by him”.
- The Learned Justices of the Court of Appeal erred in law when they held that the learned trial judge found in favor of the Appellant on the ground of part performance.
- The learned Justices of the Court of Appeal erred in law when it held that the N500,000.00 the learned trial judge ordered
to be refunded to the Appellant by the Respondent was damages for some loses suffered by the Respondent.
- The learned Justices of the Court of Appeal erred in law to have dismissed the Counter – Claim of the Appellant a fortiori the Appellant Cross Appeal on the failure of the learned trial judge to have awarded interest on the N500,000.00 awarded to the Appellant on the ground that the Appellant was not entitled to it.
The Appellant filed a Brief of Argument dated 13th August, 2009 on the same day and filed an Amended Brief of Argument on 19th January, 2018 but deemed as filed on 22nd January, 2018, while the Respondent’s Brief filed on 9th October, 2009, was deemed filed on 22nd January, 2018.
In the Appellant’s Amended Brief of Argument, which was deemed as filed on 22nd January, 2018, settled by Mahmud K. Adesina, Esq., four issues were formulated for determination by this Honourable Court to wit:
“1. Whether the Justices of the Court of Appeal were wrong in holding that the only tenable reason why the Respondent may reimburse the Appellant as per Clause V(i) of Exhibit 7 is where the Contract was frustrated by the Respondent himself
or by an Act of God or if by mutual consent, the parties agree that the Respondent be reimbursed and if the answer is in the affirmative, whether the decision of the Lower Court ought not to be set aside
- Did the Respondent suffer any damage as a result of the failure of the Appellant to complete the purchase price of the sale to justify award of damages
- Whether the Justices of the Court of Appeal were right in their finding that the Learned Trial Judge found in favour of the Appellant on the ground of part performance and if not whether the finding has occasioned a miscarriage of justice to the Appellant
- Whether the Appellant is entitled to interest on the judgment sum”
On his own part, in the Brief of Argument settled on behalf of the Respondent, Victor Opara, Esq. formulated five (5) issues for the determination of this Court in this Appeal as follows;
“1. Whether the Appellant did not breach the Contract between him and the Respondent in respect of the Memorandum of Understanding dated 4th February 1999
- Whether entitlement to reimbursement of expenses envisaged by Clause V(i) of the Memorandum of understanding
dated 4th February 1999 (being called Exhibit 7) covers a situation where the Appellant is in clear breach of a fundamental term of the contract
- Whether the Appellant could be granted interest on the sum of N500.000.00
- Whether the Respondent did not suffer damages as a result of Appellant’s breach
- Whether the learned Trial Judge did not find in favour of the Appellant, in respect of his Counter-Claim, on the ground of part performance of the contract by the Appellant
ANALYSIS OF SUBMISSION OF COUNSEL
It is my belief that Issue 1 as formulated by the Appellant address the same point as Issues 1 and 2 formulated by the Respondent; they will analyzed under the heading Issue 1.
I will also treat Appellant’s Issue 2 and Respondent’s Issue 4 as Issue 2 in that they address the same issue as well. Issue 3 will cover Appellant’s Issue 3 and Respondent’s Issue 5. While Issue 4 is the Appellant’s Issue 4 and Respondent’s Issue 3.
On this issue, counsel for the Appellant, Mr. Adesina, Esq., submitted that Clause V(i) of the Memorandum of Understanding (Exhibit 7) merely provided that the Appellant be reimbursed
where the sale is not conclusive. He submitted that the Appellant’s Counter-Clam as well as the judgment of the trial Court, which found for the Appellant on the Counter-Claim was premised on this Clause.
Counsel submitted that the interpretation given to Clause V(i) of Exhibit 7 by the Court below is not only extraneous but erroneous as the said clause did not give any other condition for which the Appellant may be reimbursed other than when the sale is not conclusive. Counsel submitted further that Courts should give effect to the wishes of the parties in the contract document which in this case means reimbursement once the contract is inconclusive regardless of why. Counsel relied on ODUYE VS. NIGERIA AIRWAYS LTD (1987) 2 NWLR (Pt.55) 126 at page 60; Bookshop House v. Stanley Consultants (1986) 3 NWLR (Pt.26) 87.
Counsel submitted further that when constructing a document in dispute, the court should use the plain, clear and obvious meaning of such agreement, he referred to ADETOUN OLADEJI (NIG) LTD VS. N.B. PLC (2007) 3NWLR (Pt.1027) 415 at 433.
Counsel submitted that parties had contemplated that the sale may be non-conclusive and had
made specific provisions for the expectations, obligations and liabilities of each party under Exhibit 7.
Counsel further submitted that the definition of the word “may” as contained in Blacks Law Dictionary connotes permission, optional or discretional and not mandatory conduct. He relied on the findings of the trial Court in submitting that parties did not mean that monies paid would be lost due to non-performance or non-conclusiveness of the contract.
He submitted that the lower Court unduly and arbitrarily imported that the only tenable reasons for the Respondent’s reimbursement of the Appellant’s expenses is by the Respondent’s frustration of the contract or by an Act of God and or by mutual consent when there was nothing before the lower Court to support the finding.
Counsel submitted that even in contracts where there were no specific provision for reimbursement, the courts have held that even though a party is in breach, he is entitled to recover his expenses made pursuant to the contract. He referred to DIES VS BRITISH AND INTERNATIONAL MINING AND FINANCE CORPORATION (1939) 1 KB 724; KERR LJ IN ROVER INTERNATIONAL LTD VS. CANNON
FILM SALES LTD. (No.3) (1989) 3 All ER 423; STOCKLOSER VS JOHNSON (1954) 1 ALL ER 630; MAYSON VS CLOVET (11924) AC 980 at 985.
Counsel submitted that in spite of the Appellant not paying the purchase price as at when due; 30/4/99, the Respondent benefited immensely from the Statutory Deposit fees paid by the Appellant. Counsel submitted that this finding of the trial Judge remains uncontroverted.
Counsel submitted that the trial Court on the basis of equity was constrained in view of the advantage enjoyed by the Respondent as a result of the payment of the fees by the Appellant, to order the reimbursement of the fees to the Appellant.
Counsel contended that lower Court’s finding that the only tenable reasons why the Respondent may reimburse the Appellant are when the contract is frustrated by an Act of God or the Respondent himself or by mutual consent by the parties is erroneous and amounts to the lower Court rewriting a contract for the parties, which counsel submitted is not the function of any Court. He submitted further that the duty of the Courts in cases like this is to construe the surrounding circumstances to determine the intention of
the Parties. He referred to BILANTE INTERNATIONAL LTD VS NIGERIA DEPOSIT INSURANCE CORPORATION (2011) LPELR-781 (SC); BMN LTD VS CHEVRON NIG. LTD. (2007) WRN (Vol.2) 1 at 15 lines 5-20 (SC); UWAH & ANOR VS AKPABIO & ANOR (2014) LPELR-22311 (SC).
Counsel for the Respondent, Mr Opara, Esq. on this issue, contended that Appellant breached a fundamental term of Exhibit 7 which contention, he submitted was fully supported by the trial Court at lines 11-23 of page 57 of the Record of Appeal before this Court.
Counsel submitted that for a contract to be legally binding and enforceable, parties must reach a consensus ad idem in respect of the terms thereof. He submitted that it was indisputable and clearly incontestable that Exhibit 7 showcases and embodies the terms of the contract terms, which the Appellant never refuted.
Counsel submitted that one of the fundamental terms of the contract was to complete within a stipulated time which stipulated time was not complied with by the Appellant. He relied on the case of TSOKWA MARKETING COMPANY VS. B.O.N. LTD (2002) 11 NWLR (Pt.777) page 163 at 200 in submitting that failure of the Appellant to pay the
contractual sum of N5,000,000.00 (Five Million Naira) to the Respondent constituted a breach of contract for which the Respondent is entitled to damages. He further relied on the case of MR. J. A. ADEOTI & ANOR VS. CHIEF J. A. AYORINDE & ANOR (2001) 6 NWLR (pt. 709) page 336 at 345 paragraphs D-E.
Counsel to the Respondent further submitted that both the trial Court and the lower Court have found concurrently relying on the evidence before them that the Appellant breached the contract between he and the Respondent, he referred to pages 57, 157 and 163 of the record of Appeal and urged this Court not to disturb the concurrent finding of facts as there is no miscarriage of justice or violation of principle of law and procedure to warrant the obviation of same. He referred to OGOEJEOFO VS. OGOEJEOFO (2006) All FWLR (Pt. 301) page 1792 at 1807 -1808 paragraphs G-C.
Counsel submitted that by the provisions of Clause V(a) of Exhibit 7, the Respondent may reimburse the Appellant in respect of any of the items stated thereat. He submitted that there was no obligation placed on the Respondent to reimburse the Appellant but rather, at the discretion of the Appellant.
Counsel relied on the decision of the Court below in asserting that the trial Court did not consider the case of the Respondent at all in conferring with equity and interest of justice.
Counsel submitted that the Court below strictly confined itself to the guidelines laid down by this Honourable Court relied on by the Appellant in ODUYE VS. NIGERIA AIRWAYS LTD (1987) 2 NWLR (Pt.55) 126 at 60; BOOKSHOP HOUSE VS. STANLEY CONSULTANTS (1986) 3 NWLR (Pt.26) 87; and ADETOUN OLADEJI (NIG) LTD VS N.B. PLC (2007) 3 NWLR (pt. 1027) 415.
Counsel submitted that the cases relied on by the Appellant do not support his case on the basis that whilst the trial Court imported extrinsic factors such as the doctrine of part performance into the interpretation of parties’ contractual obligations, the Court below restricted itself to the task of discovering the intention and contemplation of the parties and afterwards, gave effect to the said intention and contemplation.
Counsel relied on GABRIEL OLATUNDE VS OBAFEMI AWOLOWO UNIVERSITY & ANOR (1998) 4 SCNJ page 59 at 74-75 in submitting that the only reasonable interpretation to be given
to clause v(i) of Exhibit 7 is that where fidelity and compliance to Exhibit 7 by the contracting parties is frustrated by an Act of God, or mutual consent, then the Respondent may benevolently reimburse the Appellant in respect of monies physically received by the Respondent.
Counsel submitted that it will be preposterous to assert and argue that the intention of the contracting parties is that in any event, including a breach by the Respondent of the contract, the Respondent will reimburse the Appellant, in his opinion, this will lead to extreme absurdity.
Counsel contended contrary to Appellant’s submissions that the mere fact that the contract agreement envisages that the contract may not be concluded does not in fact imply that the contract must be discharged by breach, particularly the Appellant’s breach neither does it foreclose a complaint of breach of contract by either of the parties. He submitted that to hold otherwise, would be to make nonsense of the fundamentals of contract.
Counsel contended that the Court below disagreed with the trial Court after considering the basis of the trial Judge’s allusion to the doctrine of equity and
found that equity, justice and fair play lean favourably towards the Respondent rather than the Appellant.
Counsel contended that the Appellant was wrong to maintain that the finding of the trial Court on the fact that the Respondent suffered no loss remained unchallenged in the face of Ground two of the Notice of Appeal before the Court below (contained on page 3 of the Record of Appeal) where the Respondent in fact challenged same.
Counsel submitted that the Appellant is not entitled to refund of the sum of N500,000.00 since the Appellant willfully breached the contract of agreement. He submitted further that it will be most unfair and extremely untenable to allow the Appellant benefit from a contract which he deliberately and perniciously breached. He submitted that equity will not allow a party benefit from his own wrong. He relied on BUSWELL VS. GOODWILL (1971) 1 All ER 418 at 421 and ENEKWE VS. IMB (NIG) LTD. (2007) ALL FWLR (Pt.349) Page 1053 at 1081.
Learned counsel urged this Court to find that the provision of Clause V(i) of Exhibit 7 does not envisage a situation were the Appellant is in clear breach of a fundamental term of the
contract. He further urged this Court to affirm the decision of the Court below.
Counsel submitted that the cases referred to by the Appellant in Paragraph 5.16 of his Brief go to no issue as the circumstances of that case are different from this instant one and a meticulous scrutiny of the cases will clearly indicate a miscomprehension and misapplication of the decision in the said cases.
Counsel contended that the N500,000.000 was not paid to the Appellant or on his behalf but on behalf of International Insurance Group Nigeria Limited and that the Respondent never paid the Appellant on account of his contractual agreement with the Appellant, he further contended that the Appellant is distinct and separate from the legal personality of International Insurance Group Nigeria Limited.
Counsel submitted that it is improper for the Appellant to Counter-Claim from the Respondent, a sum which was not paid to the Respondent. He submitted that clause v(i) of Exhibit 7 does not envisage where the Appellant is in clear breach of a fundamental term of the contract.
On this issue, Appellant’s counsel submitted that Even though the
Respondent claimed that he had lucrative offers from other prospective buyers for the purchase of the company which is the subject matter of Exhibit 7, which he rejected for the Appellant’s benefit and for which he suffered colossal loss/damages as a result of the Appellant’s failure to pay the purchase price, the Respondent was not able to substantiate his claim successfully before the trial Court, learned counsel claimed that there was no appeal on this finding of the Trial Court by the Respondent on this issue.
Learned counsel submitted that the question pertinent to this case is what loss/damage would be said to naturally flow from the breach and or how best the Court would compensate the Respondent by way of damages as a result of the failure of the Appellant to pay the purchase price of the company
Counsel submitted that the Respondent failed to prove any damage or loss he suffered but merely harped on the Appellant’s failure to pay the sum of N500,000.00 by the agreed date. Counsel submitted that the Court below also harped on this point as the basis for award of damages to the Respondent and yet could not find as to the Respondent’s loss or
damage caused by the Appellant’s failure to pay the purchase price.
Counsel submitted that the fact that the Appellant failed to pay the contract sum alone, without more, cannot justify the award of damages to the Respondent nor can it suffice as proof that the Respondent has suffered loss or damage.
Counsel submitted that the purpose of an award of damages is to put the innocent party back to the position he would have been if the contract had been performed satisfactorily. Counsel further submitted that the loss or damage must flow directly from the breach. He referred this Honourable Court to the case ofOkongwu v. N.N. PLC (1989) 4 NWLR (pt. 115) 296. He submitted further that the loss must either be in contemplation of the parties or is an unavoidable consequence of the breach. He referred us to IJEBU-ODE LOCAL GOVT. VS ADEDEJI BALOGUN & CO. (1991) 1 NWLR (Pt.166) 136; UNION BEVERAGES LTD. VS M.A. OWOLABI (1988) 1 NWLR (Pt.68) 128; UBN LTD VS ODUSOTE BOOKSTORES LTD. (1995) 9 NWLR (Pt. 421) 558.
Counsel submitted further that damages was never contemplated by the parties to the contract, which is why the agreement contained a clause in
the event of an inconclusive sale stating that the vendor may reimburse the purchaser. He relied on the case of OSUN STATE GOVT. VS. DALAMI (NIG) LTD (2007) 9 NWLR (Pt.1038) 66 at page 86.
Counsel submitted finally on this issue, that parties had envisaged a situation where the sale would be inconclusive and that it matters not whether the Respondent or the Appellant was responsible for the non-conclusion of the sale for the clause to be effective. He referred to the cases of IFETA VS. SPDC NIG LTD (2006) LPELR 1436(SC); NEPA vs. ALLI (1992) NWLR (Pt. 259) 279.
He urged this Court to resolve this issue in favour of the Appellant on the strength of the foregoing.
Learned Respondent’s counsel, on this issue, contended that the 4th Ground of the Notice of Appeal is not borne out of the Decision of the Court below. He referred this Court to MERCANTILE VS. NWOBODO (2005) All FWLR (Pt. 281) page 1640 at 1647. He further contended that this issue for determination (raised by the Appellant as Issue 2 in his brief) does not emanate from any ground of appeal.
Counsel submitted that whilst this issue for determination asserts that the respondent did
not suffer any damages as a result of the Appellant’s breach of contract to be entitled to an award of damages, the 4th Ground of Appeal presupposes a challenge on the propriety of the holding of the Court of Appeal to the effect that the trial judge awarded damages in the sum of N500,000.00 in favour of the Appellant.
Counsel submitted further that whilst Appellant’s 4th Ground of Appeal relates to the order of the Trial Court for the refund of the sum of N500,000.00 to the Appellant, the Appellant’s issue relate to whether the Respondent suffered injury as a result of Appellant’s Breach of Contract to be entitled to an award of damages.
Let me pause here and state that submissions of learned counsel for the Respondent on this goes to no issue as same cannot be tied to any ground of Appeal.
Counsel submitted that issues for determination must fall within the scope of the Grounds of Appeal and any issue which falls outside the Grounds of Appeal is incompetent, as issues for determination must be tailored to the real and crucial issues in controversy, Appeals are argued on issues for determination and not on ground of Appeal and an incompetent
Ground of Appeal cannot ground issue for determination in an Appeal. He referred this Court to the cases of ADELUSOLA VS. AKINDE (2004) All FWLR (Pt.218) page 776; (2004) MJSC page 33; SHITTU VS. FASHAWE (2005) All FWLR (Pt.278) page 1017; NWANKWO VS EDCS (2007) All FWLR (Pt.360) page 1448 at 1463; ANPP VS HARUNA (2005) All FWLR (Pt.242) page 549 at 565; ADEBAYO VS SHOGO (2005) All FWLR (Pt.253) page 739 at 755.
In submitting that this for determination does not emanate from the 4th Ground of Appeal.
Learned counsel, submitted in the event that this Court is minded to find otherwise on this issue that from the evidence on Record, particularly at pages 12-13 of the Record show that the Company sought to be purchased was de-registered owing to the Appellant’s failure to honour his financial obligations to the Respondent in Respect of Exhibit 7 and that the Respondent indeed had to shun other offers for purchase of the Company as depicted by Exhibits 3 and 4.
Counsel posited that testimony elicited from the Respondent at trial to this effect remains unchallenged by the Appellant and yet the trial Court held that Exhibits 3 and 4 were not proved to
the satisfaction of the Court.
Counsel submitted that the Appellant, having never denied these facts has been deemed to have admitted them and having not been properly traversed before the trial Court erred in finding otherwise.
Counsel submitted that once a party to a contract establishes to the satisfaction of the Court that another party has committed a breach of contract the most common claims is that for damages. He referred to ROBINSON VS. HARMAN (1848) 1 Ex 850 at page 855 (1843-60) All ER 383 at page 385; A.C.B. LIMITED VS ADEBESIN & COMPANY LIMITED (1999) 1 NWLR (Pt. 585) page 13 at 22 paragraphs B-C; HADBY VS BAXENDALE (1854) 9 Ex. 341; (1843-60) All ER 461 at 465.
Counsel submitted that the Court below was in doubt as to the Appellant’s liability to the Respondent for breach of contract and so refrained from awarding further damages against the Respondent.
Counsel submitted further that the mitigation of damages suffered by the Respondent does not derogate from the fact that the Respondent in fact suffered damages, counsel urged this Court to find that the Respondent suffered damages at the instance of the breach of contract
perpetrated by the Appellant.
Whether the lower Court was right to find that the trial Court found for the Appellant on the ground of part performance
Learned counsel for the Appellant, on this issue submitted that there were two major issues before the Trial Court to wit; the claim for N1,000,000.00 (One Million Naira) general damages by the Respondent and the Counter-Claim for the sum of N500,000.00 (Five Hundred Thousand Naira) by the Appellant. He submitted that a Counter-Claim is a different action from the main action and that the trial Court demonstrated this in the judgment of the Court.
Counsel submitted that the trial Court considered the case of the Respondent fully before proceeding to consider the Counter-Claim of the Appellant. He submitted further that the learned Trial Court found that there was part performance of the contractual obligations under the contract by the Appellant on pages 57 and 58 of the Record of Appeal.
Counsel submitted that the findings of fact were made when learned Trial Court considered the propriety of the grant of the claim of the sum of N1,000,000.00 (One Million Naira) general
damages claimed by the Respondent.
Counsel submitted that the trial Court dismissed the Claims of the Respondent on the grounds that: –
“(i) the Respondent did not prove any loss or damage he suffered as a result of the failure of the Appellant to the purchase price at the agreed date;
(ii) it cannot be said that the Respondent suffered any loss or damage;
(iii) that the Respondent gained an advantage rather than a loss by the payment of the N500,000.00.”
Counsel submitted that it was possible for the trial Court to dismiss the Respondent’s claim on some ground, other than part performance and so, the reference to part performance is of no serious importance and cannot be rightly said to be the basis for dismissal of the Claim of the Respondent. Counsel submitted that it is not every finding of fact that the Court will disturb. He referred toNDULUE VS IBEZIM (2002) 12 MJSC 51 at page 58 para F.
Counsel submitted further that it cannot be said that the Trial Judge applied the principle of part performance in considering the counter claim for the sum of N500,000.00 of the Appellant, counsel submitted that the trial Judge found
that the respondent had suffered no loss to warrant the grant of general damages, but that the Appellant has proved that he paid N500,000.00 to the Central Bank of Nigeria on behalf of and to safeguard the Respondent’s company.
Counsel submitted that the Trial Court considered the provision of Exhibit 7 regarding reimbursement in the event that the sale was inconclusive.
Respondent’s Counsel on this issue, conceded that there were two major claims before the Trial Court as submitted by the Appellant, Counsel also conceded that a Counter-claim is a different action from the main action.
Counsel however disagreed with the Appellant that the Trial Judge did not find in favour of the Appellant for part performance. Counsel referred to pages 65, 66 and 67 of the Record of Appeal (wherein the Trial Court’s Judgment is contained) and submitted that the Trial Court relied heavily on the fact that the Appellant had paid the sum of N500,000.00 to the Respondent in partial fulfillment of his contractual obligation.
Counsel submitted that the Court below upheld counsel’s argument that the doctrine of part performance was misapplied by the Trial Court
and that the contentions of the Appellant that the Trial Court’s pronouncements on part performance was merely an obiter dictum goes to no issue. Counsel contended that the issue of part performance formed a substantial part of the Trial Court’s Judgment and cannot be disregarded as mere obiter dictum. He referred to UTC (NIG) LTD VS PAMOTEI (2002) FWLR (Pt.129) page 1557 at 1621 – 1622 Paragraphs G-A; XTOUDOS SERVICES (NIG) LTD VS. TAISEI (W.A.) LTD (2006) All FWLR (Pt. 333) page 1640 at 1650 Paragraphs E-F.
Learned Counsel submitted that the issue of part performance was raised suo motu by the Trial Court and decided same without affording the parties an opportunity to address it on the issue and therefore occasioned a miscarriage of justice.
Counsel submitted that the Court below observed that the Trial Court did not restrict itself to the issues raised by the parties before it. Counsel submitted that a Court is not competent to grant to a party to a suit a relief not claimed by that party, neither is the Court allowed to divest from the issues before it. He referred to ANTHONY Vs. SURVEYOR GENERAL OGUN STATE (2007) All FWLR (Pt.354) page 390 at
Paragraph; THE STATE VS OLADIMEJI (2003) 14 NWLR (Pt.839) page 75 paragraphs B-D; SHITTA-BEY VS FEDERAL PUBLIC SERVICE COMMISSION (1981) 1 SC 40; EBBA VS OGODO (1984) 1 SCNLR 372 (1984); SAUDE VS. ABDULLAHI (1989) 4 NWLR (Pt.116) 387; ADENIRAN vs. ALAO (2001) 18 NWLR (Pt.745) page 361 at 410 to 411; NTEOGWUILE VS. OTUO (2001) 16 NWLR (Pt.738) page 58 at 75 Paragraphs A-D.
Counsel submitted that the decision of a Court in a suit must be confined to the issues properly raised by the parties and Court cannot make a case for either or both parties to a suit and that it is also improper for a Court to give judgment on the case it has so formulated contrary to the case of the parties before it. He referred to OSOLU VS. OSOLU (2003) 11 NWLR (Pt. 832) at 631 Paragraphs H-C; OSASONA VS. AJAYI (2004) 14 NWLR (Pt. 894) page 527 at 547 paragraphs A-C; ARAKA VS EJEUGWU (1999) 4 NWLR (Pt. 185) page 830 at 848 Paragraphs A-C; KANKARA VS C.O.P. (2002) 13 NWLR (Pt. 785) page 596 at 614 to 615; IKEANYI VS A.C.B. (1997) 2 NWLR (Pt. 489) page 50, at 52 Paragraph B; JUWO VS SHEHU (1992) 8 NWLR (Pt. 258) page 129 at 136 Paragraphs C-D.
Counsel submitted that by importing
the issue of part performance, the Trial Court made a case for the Appellant which counsel posited, is not the business or duty of a Court. Counsel referred us to OJO VS. VICTINO FIXED ODDS LTD (2001) FWLR (Pt. 42) page 93 at 106 Paragraphs B-C; ODUNZE VS NWOSU (2007) All FWLR (Pt. 379) page 1295 at 1132 Paragraphs A-B; LAWAL VS ADENIJI (1997) 3 NWLR (Pt. 494) page 457; OCEANIC BANK INTERNATIONAL (NIG) LTD VS OWHOR (2009) All FWLR (Pt.154) page 1599 at 1609; IBORI VS AGBI (2004) All FWLR (Pt. 202) page 1799 at 1839 Paragraphs C-D; OYEKANMI VS NEPA (2001) All FWLR (Pt. 34) page 404 at 429 – 430 Paragraphs G-A.
Counsel submitted that the Court Below was right to set aside the judgment of the Trial Court on the grounds that the doctrine of part performance imported into the Judgment did not hold water.
Whether the Appellant is entitled to interest on the judgment sum
Learned Appellant’s counsel submitted that the Appellant in his Counter-Claim claimed interest on the sum of N500,000.00 (Five Hundred Thousand Naira) deposited by the Appellant to the Central Bank of Nigeria, counsel further submitted that from the Appellant’s
Pleadings, before the Trial Court, it was clear that the money paid by him would attract interest from a certain date as the Central Bank which usually dictates interests to be charged by other banks would certainly charge interest on the money deposited with it.
Counsel further submitted the Appellant’s evidence that the Central Bank always pays interest which can be as high as 24% per annum was sufficient basis for the Trial Court to find for it on the claim for interest. Counsel referred us to the case of SAEBY JERNSTOBERI M. FAIS VS. OLAOGUN ENT. (1999) 14 NWLR (Pt. 637) 128 at 144; HIMMA VS. ALIYU (1994) 6 SCNJ (Pt. 1) 87 at 93-94.
Counsel submitted that the respondent never denied that the Appellant was entitled to interest on sum Counterclaimed and what is not specifically denied is deemed to have been admitted and therefore, needs no further proof. Counsel submitted further that the Respondent has indeed expressly agreed to the assertions that the Central Bank has been paying interest on the sum in as evident on page 26 of the record of Appeal.
Counsel submitted that the Trial Court was wrong to find that there was no proof before the
Court to substantiate an award of interest. Counsel conceded to the fact that Courts will not ordinarily disturb a concurrent finding of the Trial Court and Court of Appeal except when there is miscarriage of justice or a serious violation of some principles of law or procedure. He referred to ILODIBIA VS. N.C.C. LTD (1997) 7 NWLR (Pt. 512) 174 at 192.
Counsel however, submitted that the reasons adduced by the Court below is different from that adduced by the Trial Court for dismissal, and submitted that the decision is perverse and has occasioned a miscarriage of justice.
On this issue, Counsel for the Respondent submitted that interest may either be awarded as of right or where there is a power conferred by statute to do so in the exercise of Court’s discretion. Counsel further submitted that interest may be claimed as of right where it is contemplated by agreement between the parties or under a mercantile custom or by principle of equity such as the breach of a fiduciary relationship. Counsel referred to EKWUNIFE VS. WAYNE WEST AFRICA LIMITED (1989) 5 NWLR (Pt. 1220) page 422.
Counsel submitted further that where interest is being claimed as
a matter of right, the proper practice is to claim entitlement to it on the Writ and plead facts showing entitlement in the Statement of Claim, he referred to TEXACO OVERSEAS NIGERIA LIMITED vs. PEDMAR NIGERIA LIMITED (2002) 13 NWLR (Pt. 785) page 526 at 547 Paragraphs E-H; UDECHUKWU VS OKWUKA (1956) SCNLR page 189.
Counsel submitted that no cogent evidence was led by the Appellant regarding any 21% interest claimed and no evidence was led in support of the date of accrual of any interest.
Counsel submitted that the N500,000.00 (Five Hundred Thousand Naira) paid by the Appellant for the Benefit of the Company and not the Respondent since by Exhibit 7, the purchase price of the Company was N5,000,000.00 (Five Million Naira Only).
Counsel further submitted that it was not contemplated by the parties that the N5,000,000 (Five Hundred Naira) paid to the Central bank of Nigeria will attract interest thereon, payable by the Respondent, counsel submitted that testimony on trial shows that it is the Company if at all that was entitled to interest and the Appellant would only be entitled to the interest in the event of purchase of the company, which the
Appellant did not Purchase.
Counsel urged this Court to hold that the Learned Trial Court is right in law to refuse the pre-judgment interests to the Appellant. Regarding post judgment interest, Counsel submitted that although the Trial Court may in deserving cases, award post judgment interest having regard to Order 40 Rule 7 of the Oyo State High Court Civil Procedure Rules, 1988.
Counsel emphasized the use of the word “may”. Counsel further submitted that the Learned Trial Court exercised her discretion judiciously in refusing to award post judgment interest and this Court should affirm the decision of the Trial Court. Counsel referred to NWAKHOBA VS DUMEZ NIGERIA LIMITED, AJAOKUTA (2003) All FWLR (Pt. 179) page 1188 at 1208.
It is now trite that a Court has the authority to reframe issues for determination before it in a bid to better appreciate and address the issues of the parties. Please see: BIARIKO VS. EDEH-OGWUILE (2001) 12 NWLR (Pt.726) 235 at 265; OBIUWEUBI VS. CENTRAL BANK OF NIGERIA (2011) 7 NWLR (Pt. 1247) 465; (2011) LPELR-2185 (SC). I have carefully considered the submission of counsel on the various issues
raised, it appears to me that there is only one sole issue germane to this appeal which I find as follows:
“Whether the learned Justices of the Court of Appeal were right to hold that the Appellant who is in breach of contract (Exhibit 7) ought not to be reimbursed for the payment of N500,000.00 (Five Hundred Thousand Naira only) in view of his breach”.
It is my humble belief that a thorough resolution of this issue, will bring to a definite halt, all other issues raised by the parties in this appeal.
It is trite that Courts are imbued with the judicial authority and jurisdiction to give life to contractual agreements made between parties, provided that, such contracts are rooted within the law. The law is that once the terms of contractual agreements between parties are clear and unambiguous, it is the duty of Courts to construe such agreements/contracts in line with the clear intention of the contracting parties. See: GABRIEL OLATUNDE VS OBAFEMI AWOLOWO UNIVERSITY & ANOR (1998) 4 SCNJ 59. The fuss in this case seemed to be largely on the effect on Exhibit 7, the Memorandum of Understanding signed by the Parties
to this suit. The relevant portions are herein reproduced for ease of reference;
Item (ii)(ii) of Exhibit 7 reads thus: –
“That the agreed price of N5,000,000 (Five Million Naira) is net of the Company’s liabilities and assets (apart from the statutory deposit of N2,500,000 (Two Million Five Hundred Thousand Naira) at the Central Bank of Nigeria (C.B.N.).”
That the payment of the N5,000,000 (Five Million) agreed to by the vendors shall be paid by the purchasers either instalmentally or in full, not exceeding the end of April, 1999″
“That in the event of the sale not conclusive the above stated expenses borne by the purchasers may be reimbursed by the vendor.”
It is trite that where parties have embodied the terms of their contract in a written document, extraneous evidence is not required, whether to add, subtract from, vary or contradict the terms of the written document. Please see SOLICITOR GENERAL WESTERN NIG. VS. DR. FESTUS O. ADEBONOJO & ORS (1971) 1 ALL NLR 181; OLATUNDE VS OAU & ANOR (1998) LPELR-2575 (SC).
It is not in dispute that parties before this Honourable Court agree to the fact that they
executed Exhibit 7 and it is not in dispute that the Appellant refused to pay the purchase price for the Company by the due date on the agreement. For the avoidance of any doubt, the Appellant by his testimony on page 34 of the Record of Appeal stated thus:
“On the strength of Exhibit 7, i.e. the M.O.U., we are to complete payment by the end of April 1999, by that date, we had not paid the money in full. To date, we have not paid in full.”
It is my finding therefore, that the Appellant is in Breach of Exhibit 7, having not complied with a fundamental term of the contract agreement. It is clear that parties understood that the passing of time was an intrinsic term of their contract. What is more, the Appellant has further conceded to the fact of his breaching the terms provided in Exhibit 7, in paragraphs 2.5 and 4.18 of the Appellant’s Brief the Appellant submitted thus: –
“2.5 The Appellant failed to pay the Purchase Price of N5,000,000.00 as at 30/4/1999.
4.18 It may be well said that the Appellant did not pay the Purchase Price of N5,000,000.00 at the due i.e. 30/4/99…”
A further look at paragraphs 4.23-4.29, alludes to the
Appellant’s acceptance of and in fact revelry in his breach, in fact, the summary of his contention in those paragraphs is that his failure to pay the purchase price as and when due cannot justify an award of damages in law. The Respondent is also agreeable to the fact that the Appellant is indeed in breach of the term of Exhibit 7.
That said, I believe it is settled, as far as it pertains to this Appeal that the Appellant did in fact breach the terms of the Memorandum of Understanding between the Parties in this Appeal, this fact has been reiterated both by Parties and Courts in this Appeal. For avoidance of doubt; the Trial Court found as follows (on page 57 of the Record of Appeal): –
“There is no doubt that there was a breach of contract which has led to its being frustrated. Now the question is by whom
Exhibit 7, the Memorandum of Understanding at paragraph (ii) (iii) time was of the essence.
“That the payment of the N5million agreed to by the vendors shall be paid by the Purchasers either instalmentally or in full, nor exceeding the end of April, 1999…
It is quite clear that there was a breach as to the payment of the contract
sum. Agreed, ownership had not passed but there was part performance of the contractual obligation.
The defendant either through his evidence or pleadings have not denied that he failed to meet the obligation, he just stated at par. 10 of the Statement of Defence that he was “unable to conclude the said transaction by 30th April, 1999…”
The lower Court held further at page 58 of the Record thus: –
“The Defendant neither in his evidence nor pleadings stated the reason for his inability to conclude the contract nor why he did not formally terminate same for whatever his reasons were. The Plaintiff was still anticipating payment as per paragraph II (iii) of the M.O.U, but it was not forthcoming neither was any reason given before the defendant’s move towards a recovery of the sum of N500,000.00 paid as contained in paragraph 14 of the Statement of Defence and relying on Exhibit 6 written to the Plaintiffs agents…”
One wonders whether in such a contract where on of the conditions was that money was supposed to be paid by a certain time i.e. 30th April, 1999 the defendant waiting until 26th October 1999 without any act in furtherance of the
contract was taken, can be said to be reasonable under the circumstances, no explanation, no cancellation of the contract, but leaving the Plaintiff in a limbo.”
The Court below also found on the issue of breach as follows:
“Let me observe here that it can hardly be contested that the Learned Trial judge found the Respondent (i.e. Appellant herein) to be in breach of a fundamental term of Exhibit 7. The germane term that was breached relates to non-payment of the sum of N5,000,000 being the purchase price on the due date which is 30/4/99.”
A fundamental principle of the law of contract is that for a contract to be regarded as legally binding and enforceable, parties must reach a consensus ad idem in respect of terms of same.
The burden of proof of the existence of terms of an agreement rests squarely on the party asserting such terms since it is a matter of evidence.
One thing is clear, Exhibit 7 embodies the terms of the contract it creates, clearly and the evidence of the Appellant during evidence-in-chief and the Respondent during cross-examination are clear indications that the Appellant has established the existence of a fundamental term
as regarding the time stipulated.
It is now trite law, that a valid contract may be discharged by one of four ways. See TSOKWA OIL MARKETING COMPANY VS B.O.N. LTD (2002) 11 NWLR (Pt.777) page 163 at 200 where this Court held as follows:
“A valid contract between parties may be discharged in one of four ways known to law, namely:
a) by performance
b) by express agreement
c) by the doctrine of frustration; or
d) by breach.”
It is my firm view that the Appellant who failed to pay the contractual sum of N5,000,000.00 being purchase price for International Insurance Group Nigeria Limited on or before 30th April, 1999 has breached the terms stipulated in Exhibit 7.
Suffice to say, that when a party to a contract fails, neglects, or refuses without a lawful reason or excuse to perform the obligation he undertook under the contract, or when such a party performs the obligation defectively or makes it impossible for himself to perform the contract, a contract has been breached. Please see: BEST NIGERIA LTD VS BLACKWOOD HODGE (NIGERIA) LTD. & ORS (2011) 5 NWLR (Pt. 1239) 95 where this Court held per Fabiyi JSC (as he then was) that: –
“There is no gain-saying the point that a breach of contract is committed when a party to the contract without lawful excuse fails, neglects or refuses to perform an obligation he undertook in the contract or incapacitates himself from performing same or in a way back down from carrying out a material term.”
See also ADEOTI & ANOR V. AYORINDE & ANOR (2001) 6 NWLR (pt.703) 336. In this Appeal, I find also that the Appellant is in breach of Exhibit 7.
Furthermore, it is now well known that this Court refrains from disturbing concurrent findings of facts where there is sufficient evidence to support the findings. See: OGOEJEOFO VS. OGOEJEOFO (2006) All FWLR (Pt.301) page 1792 at 1807 where this Court held that:
“The attitude of the Supreme Court to concurrent findings of lower Courts is that it will not interfere with such findings where the findings are reasonably justified and supported by evidence and where no special circumstances why the Supreme Court should interfere with the findings is shown by the substantial error apparent in the record of proceedings, such as miscarriage of justice or violation of some principles of
law or procedure.”
Having found that there is sufficient evidence before the Court that the Appellant is in breach of Exhibit 7, I also, shall not interfere with these findings. I so hold.
Upon this finding, it is now pertinent to resolve the real issue for determination before this Honourable Court. Much ado has been made by parties as to whether the Appellant, who is no doubt in breach of the Memorandum of understanding ought to be reimbursed the sum of N500,000.00 (Five Hundred Thousand Naira only). The trial Court on finding that the Appellant was in breach of a fundamental term of the contract went further to state on page 58 of the Record of Appeal that the Appellant cannot be said to be in total breach of the contractual agreement on ground of part performance, interest of justice and equity.
The relevant portion of Exhibit 7 is reproduced for ease for reference: –
“That in the event of the sale not conclusive the above stated expenses borne by the purchasers may be reimbursed by the vendor.”
The lower Court in interpreting this clause went to town on the connotation of the word “may” and found in favour of the Appellant on the
ground of his part performance and the gains accrued to the Respondent because of the sum paid by the Appellant. I however, do not see it that way, I believe the good fortune of the Respondent have not one way or another, anything to do with the inactions of the Appellant or in fact, this Appeal. The fortune is inspite of the breach of the contract. Was it the case that the Respondent frustrated the contract himself, the case may have been different.
I find it pertinent here to ask in the interest of equity and good conscience, howbeit that the Appellant who has willy-nilly refused (and with no lawful excuse) to perform a contract he has willingly signed and deliberately held the Respondent to ransom by refusing to pay up without word of his loss of interest or otherwise to the Respondent, be made to benefit from his breach. It is trite that a party should not benefit from his own wrong and I am of the firm view that the decision of the trial Court amounts to allowing a party reap benefits from his wrong. See: ENEKWE VS I.M.B (NIG) LTD (2007) All FWLR (Pt. 349) page 1053 at 1081.
The trial Courts attempt to bail the Respondent out on the
equitable doctrine of part performance shall not be allowed to stand, it is my firm view that equity must be done to both parties and not just the Appellant. I affirm the finding of the Court below as follows:
“It must be stated here that the doctrine on part-performance arose by sheer intervention of equity. Equity intervened to mitigate the losses that may arise by rigid application of contracts that by law ought to be in writing but were made orally. The doctrine is based on estoppel that a defendant who plainly indicated by his conduct the existence of a contract could not be allowed to give himself the lie and take shelter under a statute. It is designed to prevent fraud from being perpetrated on the other side who has altered his position on the faith of the contract…
Exhibit 7 is a written contract between the parties. They did not enter into any oral contract in which the appellant made the respondent alter his position adversely on the faith of the contract. So, the doctrine of part-performance imported into the judgment did not hold any water. The learned trial judge with respect to her, talked about interest of justice to the respondent
who was in breach of a fundamental term. I am afraid; interest of justice must be to the appellant as well and I dare say even to the Court itself. The respondent did not pay the purchase price on 30-4-99 as agreed. Within 30-4-99 and 29-10-99, the respondent put the appellant in limbo; to use the language of the trial judge. The respondent failed to pay up on scheduled date. For about six months, the respondent put the appellant in suspense and had the audacity to say that the appellant was negotiating with others for the sale of his concern.”
I absolutely agree with this position and do believe that if anything, that the wand of interest of justice and equity being waved in favour of the Appellant at the trial Court should have been directed at the Respondent too, luckily for the Respondent, posterity has smiled on him through the decision of the Court below and I do not intend to overturn that decision, in fact, I endorse it.
In light of the above, I hereby hold that this appeal is lacking in merit and same is hereby dismissed. I affirm the decision of the Court of Appeal delivered on 14th June, 2007. No order.