Neka B.b.b. Manufacturing Company Ltd. V.african Continental Bank Ltd (2004)

LAWGLOBAL HUB Lead Judgment Report

PATS-ACHOLONU, J.S.C.

The appellants as plaintiffs had obtained a loan from the Nigerian Building Society by using the title deeds of two of their directors as collateral. The respondents as defendants redeemed the loan facility hitherto granted by the Nigerian Building Society and retained the title deeds formerly in the possession of the Nigerian Building Society as security. The appellants claim that later they paid their indebtedness to the respondents and demanded the return of the title deeds of their directors which were being detained as claimed by the appellants. From time to time the appellants demanded the return of the documents from the respondents as they stated that they had good offers for a loan from the Union Bank and other financial institutions. The appellants said that when it appeared that the respondents were unable to trace the whereabouts of the documents after what the latter claimed was an extensive search, the respondents “pleaded” with the appellants to renew their application with them instead of the Union Bank or any other financial institution for that matter. This advice was based on the assertion by the appellants that they obtained good and reasonable business propositions from some foreign companies and they needed facility from a bank to be in a position to engage in those business concerns, but that the failure or refusal of the respondents to release these documents to them robbed them of the gains or profits they would or might have realized had the proposed transactions succeeded.

The respondents in rejecting the claim of the appellants stated that though the documents were missing, and not being detained, but that after fruitless searches, they obtained or procured the certified copies of those documents which they believed that the appellants could use for the interim period. But, instead of accepting them, the appellants refused, and rather asked for the duplicate of the certified true copies. They equally denied advising the directors of the appellants to proceed to oversea’s tour for business transactions, or were aware that the appellants had applied for a loan facility from the Union Bank and stated that they would have been prepared to give a bond or a guarantee should that have been requested. After the hearing in the High Court, judgment was in the main given to the appellants although the claim under the head of raw materials was refused. The respondents being the losing party appealed to the Court of Appeal while the appellants cross-appealed. The appeal was largely successful.

In its judgment the Court of Appeal held as follows:

“The amount of N6,000.00 awarded in respect of general damages is allowed to stand, since there was neither an appeal nor cross-appeal against it. But the appeal against the special damages awarded succeeds and is hereby allowed, while the cross-appeal against same fails and is hereby dismissed. For the avoidance of doubt the amount of N1,963,465.50 awarded in favour of respondents as special damages is hereby set aside, as there was no evidence to support it, while the general damages of N6,000.00 is hereby affirmed.”

Piqued no doubt by this turn of events, the appellants appealed to this court and filed 5 grounds notice of appeal from which they distilled four (4) issues for determination. They are as set down

below:

1. Whether the learned Justices of the Court of Appeal were right in law when they held that in the absence of any evidence to show that certain monies were actually paid to the respondents by the appellant for transmission to the European experts in 1982 there can be no claim for special damage based on the foreign exchange differentials in the value of the Naira.
2. Whether the learned Justices of the Court of Appeal were right in law when they held that the evidence as given by PW4 relating to differentials in the cost of importation of the goods in 1982 and 1987 and tendering of the proforma invoices does not amount to sufficient proof of those arm of special damages.
3. Whether the learned Justices of the Court of Appeal were right when they held that there was no evidence whatsoever as to what the estimated income and profit would be and therefore the special damages were not strictly proved by the appellant.
4. Whether the learned Justices of the Court of Appeal adequately considered the cross-appeal of the appellant before dismissing same.

It is noticeable that the general characteristic or nature of the issues formulated is their ungainly verbosity, id est, lacking in precision and clarity. Besides, those to be determined seem repetitive of each other thereby robbing them of the refined or exquisite taste in prose they should ordinarily possess.

On the other hand, the respondents framed only one issue which I hereby set down and which runs thus:

“Whether on the pleadings and evidence there is a legal basis for the award of special damages or in the alternative whether the (plaintiff) appellant discharged the burden of proof required to succeed in its claim for special damages”.

After I have carefully studied the case file, and dutifully considered the briefs filed, I am convinced that strictly speaking there is only one issue and that is as formulated by the respondents. It is not in all occasions that a court must inevitably accept the issues framed by the appellant as though they are immutable particularly when the issues formulated by the respondent address the points in consideration or in controversy much more squarely. Indeed the court may decide in an appropriate case to suo motu frame issues which though do not and ought not in any way depart from the contents or purport and ramifications of the issues already framed by the parties, and distilled from the grounds of appeal, but are much more succinct, precise and readily understandable. Thus in Lebile v. Registered Trustees C & S (2003) 2 NWLR (Pt. 804) 399 at 424, Uwaifo, JSC said:

“As to issue 5, what the court below did was to summarise what it found to have survived out of the six issues raised by the plaintiff, and then considered them under two issues which it framed from those other issues the way it understood them to connote. There is nothing improper about that so long as the summary was reasonably reflective of the issues in question as they relate to the grounds of appeal.”

See also Fabiyi v. Adeniji (2000) 6 NWLR (Pt. 662) 532 at 546; Oloba v. Akereja (1988) 3 NWLR (Pt. 84) 508; (1988) 2 NSCC 120. Even when the appellate court is of the view that the issues formulated by both sides do not quite reflect the questions that would ordinarily be distilled from the grounds of appeal, it may on its own formulate new issues based on the grounds of appeal but care should be taken that the new issues formulated by the court are brought to the attention of the parties for any possible objection. In that way no party will complain of unfair hearing.

In the appellants’ reply brief no new issue was raised but they have sought to put more teeth and vigour in their original brief and whittle down the tenor of the respondents’ brief.

The appellants’ counsel had submitted in his brief that what calls for immediate resolution is this; if the action is founded on negligence as opposed to being in detinue whether special damages if proved could be awarded Damages in tort is a compensation for loss sustained arising out of the act or omission of a defendant. It is a trite law that where the claimant specifically alleges that he suffered special damages he must per force prove it. The method of such proof is to lay before the court concrete evidence demonstrating in no uncertain terms easily cognizable, the loss or damages he has suffered so that the opposing party and the court as the umpire would readily see and appreciate the nature of the special damages suffered and being claimed. A damage is special in the sense that it is easily discernible and quantified. It should not rest on a puerile conception or notion which would give rise to speculation, approximation or estimate or such like fractions. Now part of the evidence of PW1 runs thus:

“The Union Bank did not give us the loan as we failed to supply the title documents and the defendant refused to give us a bond or indemnify us as to the lost documents. As a result we have suffered a lot of loss and damages. I am asking for the claim as per paragraph 27 of the statement of claim, the accountant will give account of the special damages.”

In his evidence Gregory Obem Omokivie, PW4 who is the accountant testified as follows:

“The plaintiff has suffered damages and in the regard I know the plaintiffs would have made profit and taking into account the present conversion rate of the Naira. The plant and equipments were estimated to cost N1.5m, raw materials N100m and PVC titles N.7m, totaling N3.00m. These figures were calculated basing them on rate differentials between 1982 and 1988. These are C.B.N. rate and at the time of the calculations I make some jottings. Rates of conversion

Swiss Franks 476,142.70 converted at $F.3.1293 = N1.00 = N152,156.30. The conversion rate and their equivalents are as contained in paragraph 27 of the further amended statement of claim.”

The learned counsel for the appellants had submitted that in line with the evidence of PW4, special damages were adequately pleaded and evidence in proof of the special damages was adequately given. It is instructive here to set down some portions of the pleadings of the appellants:

“Para 17. The plaintiffs had good offers for a loan from the Union Bank of Nigeria Plc and other Financial Houses on the condition that they could get the original documents which were released to the defendants by the Nigeria Building Society on behalf of the plaintiffs.

Para. 18. The plaintiffs reviewed their demands for their title documents from the defendants to use as collateral or security for the four other Banks or Financial Institutions.

Para 19. The defendants refused and or neglected to surrender the title documents of the plaintiffs to them and the plaintiffs instructed their ‘solicitors’ Senator Anna and Associates to demand their title documents.”

In none of the exhibits was it shown or stated that the Union Bank had been approached and they specifically insisted that the original title deeds must be produced. This must be understood against the background of the denial made contained both in the pleadings and testimony of the respondents to the effect that ordinarily banks accept certified true copies of title deeds. In this case there is evidence that the appellants rejected the deed of release as well as the certified true copies of the documents.

So much reliance was placed on the claim of great loss sustained by the appellants. A close look at the evidence of PW4 shows that he was merely stating the possible cost of the materials and profits if they had been bought; a belief which was hinged on the premise of a bank granting the facility required. The appellants it must be pointed out did not in a way prove any distinct loss arising out of any clear cut case of business transaction which they embarked. Id est, such as placing an order and relying on any bank as its agent to do the rest. Even from the evidence of PW4, the whole testimony was based on approximation and a general expression of opinion as to what could or might be realised.

In the judgment of the lower court, the Court of Appeal per Akpabio, JCA held as follows in respect of the much vaunted degree of loss sustained:

“In the instant case however, all that the respondent had succeeded in doing through PW4 was to show that goods that could have been imported with N152,158.30 in 1982, later cost N1,239,275.52 to import. Raw materials that initially cost N193,440.00 to import in 1982, later cost N1,017,299.15 to import in 1987. But it was never averred that the 1982 value of those goods was ever paid to the appellant to transfer to Western Germany or Italy, and it failed to do so by negligence. The evidence tendered in court was proforma Invoices to show the value of goods to be sent to Nigeria by the Overseas 11 exporters. In the absence of any evidence to show that certain monies were actually paid to the appellants by respondent transmission to the European Exporters in 1982, there can be no claim for special damages based on the foreign exchange differentials in the value of the Naira”.

It cannot be overemphasized that neither the pleadings nor the most forensic eloquence of any brilliant lawyer can be a substitute for evidence that was not given. Evidence whether oral or documentary consists of facts, and facts are the fountain head of law. In a case such as this, it is not enough to marshal or reel out intimidating figures to show losses whether probable or estimated. Such figures duly set out to prove special damages must be amply and fully supported by exhibits that would be unassailable as to persuade the court to find in favour of the proponent of the case.

Further, the appellants in their brief submitted that evidence which established the legitimacy and the existence of the business venture from where the loss was occasioned was given by PW1. The existence of a business venture should be separated from anticipated profit or probable loss if the so called business is not realised. A business venture to my mind can be said to be a commercial or industrial intercourse or transaction with commercial or trading flavour. It could be perilous and be a risky undertaking and therefore may be marked by its vulnerable nature, as there is always a possibility of a loss. Such business or venture – a term being a short form of adventure, does not confer any benefits or be said to connote by its very nature, profitability as it is no more than what it says. I fail to see how a loss or profit can be said to have been occasioned by reason of a mere existence of business proposition where there are no facts to show the risk taken to afford the court the opportunity to determine the nature and character of the claim made.

The appellants’ counsel referring to the evidence of PW1 submitted that the facts stated in the testimony “though given orally were supported by documents some of which are exhibits D1 and D2”, showed the losses suffered. Let me set down the contents of exhibits D1 and D2.

EXHIBIT ‘DI’

XX 241917

ROA/bok/LD/82 9th February, 1982

The Chief Legal Officer,

Legal Department,

A.C.B. Limited

Head office,

Lagos.

Dear Sir,

RE: RETURN OF TITLE DOCUMENTS – AIC NEKA B. B. B. MANUFACTURING CO. NIG. LTD.

We refer to your letter LD/BR.121/44 of 11th November, 1981 regarding our above-named company customers’ account and confirm that their indebtedness with us had been cleared with their Union Bank cheque for N73,463.49 lodged on 7th October. 1981, photocopy of their ledger card attached.

At the customers’ request, we implore you to deliver both their title document based in Enugu on which legal mortgage had been perfected with registration number as 49/49/599 Enugu and the one with the Federal Mortgage Bank referred to in your letter under reference. The customers claimed that we contracted to settle their debt with Nigeria Building Society, redeem and keep their mortgaged documents. We are therefore surprised to note from your letter that this property is still not in our custody.

Customers elect to deliver this letter to you and you have our authority to release their title documents to them and endorse your action to us. The customers Deed of mortgage dated 9th June, 1997 and registered as 49/49/599 Benin City was forwarded to the leader, Special Recovery Task Force as per our letter IOEO/ASO/ACS/42/8348/81 of 15th March, 1981.

EXHIBIT ‘D2’

Our Ref. N/ACB/83/2

No. 81, Forestry Road.

P. O. Box 682,

Benin City

16th November, 1983.

Your Ref: ROA/ASO/ACS/82The Manager,

African Continental Bank Limited,

1, Ring Road, PM.B. 1137,

Benin City.

Dear Sir,

Re: Your delay in Releasing Our Mortgaged Deed on our Property at No.1 Hospital Avenue, Plot Q G.R.A

Enugu.

1. Your letter dated 29th October, 1982 reached us a couple of months ago and despite our surprise at your forwarding the said letter to a wrong address i.e. Enugu, when we wrote to your bank with our Benin address we chose to call on you for the collection of our original deed.
2. We object in very strong terms to your treatment towards us.
3. We paid you fully in September, 1981 and had since been demanding for our original deed of conveyance but your letter did not indicate that the said titled document registered as 94/94/411 Benin City – A/C 8348 is the original deed which your bank took over from the Nigeria Building Society now called Mortgage Bank.
4. Your failure to surrender the original deed but insisting on our payment of yet another N100.00 (One hundred Naira) shows that you could not bother what we have lost in terms of business.
5. Be it known to you that:

(1) We demand forthwith, the original deed. Adequate compensation for your deprivation since we were unable to obtain further loan to carryon with our business.

6. Further correspondence on this matter should be channeled through our Lawyer, Chief G.M. Onyiuke, 1 Adeyemi Lawson Road, P. O. Box 659, Ikoyi – Lagos.

(Sgd.) EN. Debekeme (Mrs.)

Ref No. N/ACB/83/2A

81, Forestry Road,

P. O. Box 682,

Benin City.

16th November, 1983

Copy to:

Chief G. M. Onyiuke,

1, Adeyemi Lawson Road,

P. O. Box 659,

Ikoyi – Lagos.

I would now equally set down the particulars of special damages claimed.

1. TULLIO GUISI SPA A

Cost of Machinery and Equipments for the

manufacturing of Buttons and Sheet Blanks

as at 24th June, 1982

…SF N476,142.70

Conversion rate as at 24/6/82

NI= SF.3.1293 Swiss Franc.

Therefore SF476,142.70 … = 476.142.70

= 3.1293

= 152,156.30

B

Same Machinery and Equipment for manufacturing of Buttons and Sheet Blanks as at 11/6/87 and at SFEM rate that is SF! = N2,9223

Cost of Machinery etc. as above is 476,142.70SG

Converted to Naira at the rate of 2,9223 to 1 Swiss

Francs is therefore = 476,142.70 x N2.9223 …

1.239,431.8

Loss arising from delay in commencing the industry in 1982 and occasioned by changes in exchange rate is B =A

Which is N1,391,431.82 – N128,686.22 = N1,239,275.52

2. RAW MATERIALS C

Imported Raw Material cost in Us dollars as at 1982 US$ 285,628.00

= $1.4765 as at 1982

Therefore $285,628 – 285,638 …. 193,449.38

1.4765

The Raw material cost at SFEM rate on 11/6/87 with conversion rate of Naira to the dollar at N4.2389 to US dollar cost of Raw materials etc in US dollars $285,628 x N4.2389 .. 1,210,748.53. It thus means that what would have cost N193,449.38 in 1982 if the business had taken-off is now costing N1,210,748.53

The difference now a loss this company has suffered

for delay is N1.210,748.53 – N193,4499.38 = 1.017.299.15

Total losses: = N2,256,574.67

P.V.C. ACOUSTIC CEILING AND WALL PANNELING TILES

Cost of Machinery, Equipments Spare Parts, Finished Goods etc. as at 22/5/86 as per Grant +

Hattemeister .. DM3.680.40

Conversion rate of Naira to DM in 1986

Nl = DM2.1272 … 176,776.99

Cost of same machinery etc. as above ‘A’ above at DM37040.00 as at 11/6/87 but converting at SFEM rate of N2.3962 to DM.

This gives DM376040 x N2.3962 = 901,067.05

The loss occasioned by delay and changes in exchange rates is therefore N901,076.05 – 176,776.99 = 724,290.06

SUMMARY OF LOSSES INCURED

1. Machinery 1.239.275.52
2. Raw Materials 1.017.299.15
3. P.V.C Tiles 724,290.06

N2.980.864.73

General damages resulting from the refusal and or negligence of defendant to return the title documents to the plaintiffs.

N 1.000.000.00

N3,980,864.73

The appellants seem to rely on the above figures, exhibits D1 and D2 as proof of special damages. They naively placed their imaginary loss at the feet of the respondents for refusal or failure to give them back their title deeds. The special damages must be strictly proved. There is no evidence of such a proof for neither PW1 nor PW4 made any effort to prove the special damages claimed.

It is important at this juncture to set down some portions of the evidence of DW1.

“In 1982, the plaintiff asked for their title deeds which have (sic) been misplaced. But in 1986 and 1989 they approached the defendants for the documents and they gave them certified true copies which they refused to collect. It is the practice of banks to take certified true copies of documents from customers and search through the land Registry to assure that it is not encumbered before it is processed. The defendants gave the plaintiff certified true copy of their documents of their original deed of release which the plaintiff refused … We wrote exhibit E3 to pacify the customer. Since the plaintiff refused the certified true copy, and the deed of release we felt it was not necessary to issue bond of indemnity but this is quite necessary even though the plaintiff had accepted the certified copy and deed of release.”

It would appear that not a forthright effort was made by the appellants to help themselves by accepting both the certified copies of the title documents, and the deed of release to enable them as they claimed, to seek for a facility from any bank. It is equally important to observe that no bank has promised to give any loan. All that the Union Bank had insisted was to see valid documents. It is possible to assume that no worthwhile financial institution would embark on any meaningful discussion relating to a grant of any facility for which collateral is important without first seeing the documents that would be the source of security for the loan. In other words, whatever the Union Bank or even the respondent must have said could only be described as an expression of intent. This much can be garnered from the evidence of DW1, where he said:

“The plaintiff went to the head office who radioed me and that they had agreed for facilities for the plaintiff.

The plaintiff met me on a later date and I gave them a form to fill which is exhibit ‘K’. The plaintiff applied for Naira and Dutch mark. The head office was surprised at the amount now requested for when exhibit ‘A’ was sent to Lagos. I see exhibit G2 it is mere invitation to submit documents and it does not mean that loan has been given.”

In such an unsettled situation the appellants could not possibly construe such expression as amounting to a promise that they would be granted the loan. That being the case, it is not conceivable that the appellants could possibly engage in any meaningful business discussion with foreign companies with whom they hoped to commence some business enterprise as there was yet no fund or facility to effectuate the business. How then one might be tempted to ask did the appellants incur the losses being claimed. Indeed the so called special damages were based on the evidence of PW4 whose evidence on the specific claims was nothing to write home about. When the evidence of a witness is hazy or deficient or utterly hollow, skimpy or shallow, then it would prove nothing and in the case of specific claims such weak evidence would be so wanting in its substantiality that it may be regarded as a mere effusion of an incompetent witness.

The evidence of facts and circumstances on which a party relies such as in the case, and the inferences deducible therefore must so preponderate in the favour of the basic proposition he is seeking to establish by proof as to exclude any equally well supported belief, and that in the administration of justice the court must be satisfied with proof which leads to a conclusion with probable certainty where absolute certainty is either impossible or not necessary or essential. Where there are specific claims it is the duty of the plaintiff to prove all the essential facts succinctly and with clarity to leave no one in doubt.

In order to meet the standard required in proof of specific or special items of claims, the facts must not be wobbly or bent or susceptible to varying degrees of construction. In the case of J.O Imana v. Robinson (1979) 1 All NLR 1 at 16 in relation to proof of special damages the Supreme Court per Aniagolu, JSC said:

“The term strict proof required in proof of special damages means no more than that the evidence must show the same particularity as is necessary for its pleading. It should therefore normally consist of evidence of particular losses which are exactly known or accurately measured before the trial. Strict proof does not mean unusual proof, as the play of the appellants’ counsel on those words tendered to suggest, but simply implies that a plaintiff who has the advantage of being able to base his claim upon a precise calculation must give the defendant access to the facts which make such calculation possible.”

Let me consider the case of U.B.N. v. Odusote Bookstore Ltd. (1994) 3 NWLR (Pt. 331) 129 to which both parties have cited. In that case the respondent had commenced an action against the applicant for negligence in handling, operating and management of the plaintiffs’ business affairs and accounts. They equally, claimed some special damages. The case before the Supreme Court was in respect of a motion for stay of the judgment of the Court of Appeal which affirmed the judgment of the High Court. The matter was essentially as to whether the applicant had satisfactorily made out a special case for the court to consider exercising a discretion in its favour although the facts of the main case would on the surface appear to be exactly the same as in this case. In that case the respondent had in fact paid some money to the bank for his business transactions and it was the alleged mishandling that brought the parties to the court. I really do not know the significance of this case to the present one in which this court is hearing an appeal on the full force of the main case arising out of the judgment of the Court of Appeal.

In the case under consideration the appellants have paid nothing and the attempt to use figures of the value of Naira relative to the dollars then as to show how much gain might have been made, succeeded in merely obfuscating the appellants’ case. The claims of the appellants seem to me to be hinged on very flimsy, terribly elastic, and I dare say sadly deficient testimony that could not by any stretch of imagination had guaranteed any compensation by way of damages.

Finally let me discuss the point made in the appellants’ brief that the evidence of PW4 which I have described as being utterly hollow, was not challenged. An opposing party should not be expected to challenge an evidence that is hollow, empty or bereft of any substance as that would to my mind amount to chasing a shadow. I am familiar with the case of Odulaja v. Haddad (1973) 1 ANLR 191 to the effect that an evidence not challenged by the party that had the opportunity to do so should ordinarily be believed and accorded credibility. I believe that such holding rests on the premise that such evidence is capable of being believed if not challenged. In other words, when the evidence is weak in content as not to assist the court or is manifestly unreasonable or is devoid of any substance as not to help to resolve the matter in issue it will be safe to ignore it as it does not attain the standard of credibility. Although it is the general rule that uncontradicted evidence from which reasonable people can draw but one conclusion may not ordinarily be rejected by the court but must be accepted as true, it is also true to say that the court is not in all the circumstances bound to accept as true testimony an evidence that is uncontradicted where it is willfully or corruptly false, incredible, improbable or sharply falls below the standard expected in a particular case. Another disconcerting point if not entirely confusing to the point of being almost melo-dramatic aspect of the appellants’ case is that it is difficult to understand what the claim is all about. For example if it involves negligence, there are no particulars of negligence. It is not a case founded in the tort of detinue. To understand and appreciate the extent of what I would describe as the disorientated nature of the claim made which boggles and tasks the mind, I shall reproduce some of the portions of the claim made below:

“1. A declaration that defendants in breach of stated condition failed to keep the said title documents safely and did not redeliver them to the plaintiffs on demand whereby the said documents were and are lost to the plaintiffs. Or in the alternative the defendants and or their servants, are guilty of negligence whereby the said documents were lost or not returned to the plaintiffs in spite of repeated demands.

2. By reason of the matters aforesaid the plaintiffs have suffered loss of lucrative business and special and general damages assessed at three million. nine hundred and eighty thousand, eight hundred and sixty-four Naira, seventy-three kobo from defendants’ refusal and or failure to return the title documents for the plaintiffs for them to use as security for loans from other banks or grant the plaintiffs loan since the defendants cannot return the title documents for the plaintiffs for them to use as security for loans from their banks or grant the plaintiffs loan since the defendants cannot return the title documents.”

Thereafter they proceeded to itemise what they described as special or particular damages. The almost incomprehensible nature of the relief by way of claims for damages is difficult to be pigeonholed into a particular compartment of the law as to enable the court understand and realistically and seriously deal with the matter. When the nature of pleadings or claim is so disturbingly boorish or negativistic or even waspish, no court would accord credit to the case being put forward. A plaintiff must fully understand the case he is putting across and what he expects the court to do for him and this should be put in a language that flows freely. This appeal was dead, right from the word go. It is unnervingly bad and irremediable. It is completely bereft of any merit and I must confess it reached the nadir of utter hopelessness in this court.

In the circumstances the appeal fails as lacking in merit. It is hereby dismissed. I affirm the judgment of the court below, and as there is no appeal or cross-appeal on the sum of N6,000.00 hitherto awarded, it therefore still stands. I award N10,000.00 costs to the respondent.

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SC.32/1997