Nigerian Ports Authority V. Construzion General Farsura Cogefarspa (1994) LLJR-SC

Nigerian Ports Authority V. Construzion General Farsura Cogefarspa (1994)

LawGlobal-Hub Lead Judgment Report

O. IBEKWE, J.S.C. 

This is an appeal from the decision of J.I.C Taylor, Chief Justice delivered on 3rd of January, 1972. The plaintiffs’ amended claim against the defendants is as follows:

“(a) 80,810:0s:0d. money payable by the defendants to the Plaintiff for money received by the defendants for the use of the Plaintiff. Between January, 1966 and July, 1967 the 2nd Defendant cause payment of the said money, the property of the Plaintiff, to the 1st Defendant without authority from the Plaintiff;

(b) 32,324:0s:0d. interest thereon at 10% per annum for four years;

(c) 50,000:0s:0d. general damages; And the Plaintiff claims the total sum of 163,134:0s:0d.

2. Alternatively, the Plaintiff’s claims against the 2nd Defendant for 163,134 damages for Deceit.”

The 1st defendants counterclaimed for the sum of 287,986.

The plaintiffs are a statutory corporation entrusted with the management of the ports of Nigeria. The first defendants are building contractors who were engaged by the plaintiffs to construct what is now known as the second Apapa Wharf Extension. Work began on the Wharf Extension in 1963 and ended in March 1965. The second defendant was, at all material times, the chief executive of the plaintiffs.

Pleadings were ordered and filed The plaintiffs in their statement of claim contended that the 2nd defendant who authorised the payment to the 1st defendants of the amount claimed had no authority to do so; and that in approving the payment he, 2nd defendant, acted fraudulently, and recklessly. That averment was the plank upon which the entire case of the plaintiff rested. For the purpose of clarity, we shall set out the relevant portion of the statement of claim as follows:

“12. Knowing that he had no authority to settle Claim No. 2A (Le. the claim stated above) the 2nd defendant submitted a memorandum dated the 24th day of December, 1965 to the then Chairman of the Board of the Nigerian Ports Authority suggesting that consideration be given to meeting Claim No. 2A.

13. There was no reply to the said memorandum.
14. By letter dated 21st January, 1966, the 2nd defendant falsely represented through the Chief Engineer of the Nigerian Pons Authority to the Consulting Engineers who were by this time resident in London that the Plaintiff/Corporation had agreed to pay to the 1st defendant the money being claimed under Claim No. 2A.
15. There was no reply to the said memorandum.
16. By letter dated 21st January, 1966, the 2nd defendant falsely represented through the Chief Engineer of the Nigerian Ports Authority to the Consulting Engineers who were by this time resident in London that the Plaintiff/Corporation had agreed to pay to the 1st defendant the money being claimed under Claim No.2A .
17. In reliance upon the 2nd defendant’s said representation,hte Consulting Engineers began to issue Certificates covering the payments to the 1st defendant in respect of Claim No. 2A.

“17. The 2nd defendant’s said representation was false and was made fraudulently in that, as the 2nd defendant well knew, he had no authority what so ever from the Board of the Plaintiff Corporation to make any payment for the said Claim No. 2A, or the said represent+ation was made recklessly, the 2nd defendant not caring whether it was true or false.”

Strangely enough, the plaintiffs, at the trial, led no evidence whatsoever in proof of these allegations against the 2nd defendant, which allegations as we have stated, formed the only foundation upon which their case was built. In the words of the learned Chief Justice:

“Now quite a great many epithets have been used in these paragraphs to describe the action of the 2nd defendant amounting to something near criminal or corrupt negligence; but throughout the case for the plaintiff not a shred, and I repeat for emphasis, not a shred of evidence was led or slightest endeavour made to substantiate any of them.”

With particular reference to this aspect of the plaintiffs’ case, it is on record that, in his address, the learned counsel for the plaintiffs in the court below said as follows:

“We put up fraud but we were unable to present a case because our witnesses were absent. We have not put up a case against the 2nd defendant and

I will not pursue the case against him. The case against the 2nd defendant is off entirely.”

In the circumstapces, the learned Chief Justice came to the conclusion, quite rightly in our view, that the plaintiffs’ claim against the 2nd defendant “was most frivolous and was an abuse of the process of the court” The claim was therefore dismissed. We take the view that that should have been the end of the plaintiffs’ case because it is obvious that the whole of the plaintiffs case against the 1st defendants was entirely based upon those same allegations which they levelled in their pleadings against the 2nd defendant who was their chief executive at the material time, namely that he acted fraudulently and without authority.

Nevertheless, the learned Chief Justice still proceeded to consider the other aspects of the plaintiffs case. With thoroughness, he went into the legal issue as to whether the plaintiffs were right in grounding their claim as they did on money had and received for the use of the plaintiffs. After reviewing some relevant authorities on this as ect of the case, the learned Chief Justice stated as follows:

”There is no doubt that the money was paid out of the funds of the plaintiff authority. It is alleged it was paid through the fraud of the 2nd defendant which was not proved. In the absence of such proof and on the averment that the 2nd defendant was the General Manager of the Plaintiff authority, can such a payment be the subject matter of an action for money had and received”

The learned Chief Justice then gave special consideration to the case of Diplock v. Wintle (And Associated Actions) 1947 Ch. D 716, upon which so much reliance was placed by learned counsel for the plaintiffs. And after saying that he did not see in what way that case could assist the plaintiffs on the point under consideration, the learned Chief Justice drew attention to a clear statement of the law in that same case by Wynn-Parry J., at p. 725 as follows:

“The rule that the mistake upon which an action for money had and received must be based must be a mistake of fact is, in my view, of completely’general application, and in no way depends upon the pre-existence in fact of a contract, written or oral,. between the parties. The plaintiff in an action for money had and received must, as an essential condition of success, be able to show that he paid the money claimed under a mistake of fact.”

Finally, the learned Chief Justice stated as follows:

“What I have been unable to gather in the present case is the alleged mistake of fact. The fraud, yes but that was not proceeded with and was abandoned. The statement of claim filed by the plaintiffs ends with these paragraphs:

21. By reasons of the 2nd defendant’s said fraudulent misrepresentation and unauthorised dealing the plaintiffs have suffered loss and damage…..”

Continuing his judgment, the learned Chief Justice finally decided as follows:

“On the evidence before me the claim made by the plaintiffs against both defendants in all its ramifications is completely without substance and I dismiss it with costs to be assessed at the end of this judgment.”

After dismissing the plaintiffs’ case the learned Chief Justice then considered the 1st defendants’ counterclaim. It is relevant to observe here that, when the substantive suit came up for hearing on the 28th October, 1971, in the court below, learned counsel for the plaintiffs in opening his case sought leave to add to his pleadings the following:

“The plaintiffs in the alternative plead the statutory provisions of S.97 of the Ports Act.”

The application was vehemently opposed by learned counsel for the 1st judgment. In order to appreciate the stand taken by the lower court, we think that the background story should be narrated.

At the beginning of this case S.97 of the Ports Act was not pleaded by the plaintiffs in their original defence to the counterclaim. The record of appeal also discloses the fact that at a very early stage in the proceedings before another judge, Adefarasin J., (as he then was) judgment had been entered in favour of the 1st defendants on their counterclaim because of the plaintiffs’ failure to file a defence to it.

On the 10th of July, 1971 however, the plaintiffs brought an application to set aside the said order made by Adefarasin J. To this application, the plaintiffs attached what purported to be their defence to the counterclaim. It is important to mention that in that defence no mention was made of or reliance placed on S.97 of the Ports Act. The application was set down for hearing before the learned Chief Justice, who in ruling delivered on the 28th October, 1971 set aside the order made by Adefarasin J., on the counterclaim on the defence filed by them. The case was then fixed for hearing on the 28th October, 1971; and it was on that day that the belated application to amend was made and refused as we had earlier on stated in this judgment. Rejecting that application, the learned Chief Justice said inter alia as follows:

“It is in effect a new plea, a new defence.”

At the end of the trial, the learned Chief Justice gave judgment in favour of the 1st defendants on their counterclaim. It is from this decision of the learned Chief Justice, dismissing the plaintiffs’ claim on the one hand, and allowing the 1st defendants, counterclaim on the other, that the plaintiffs have now appealed to this court. At the hearing of this appeal, Chief Godfrey K.J. Amachree sought and obtained leave to argue the four additional grounds of appeal which were re-numbered as 2-5 as follows:

”2. The Plaintiff was denied a fair hearing of its case as provided under section 22(1) of the Constitution of the Federal Republic of Nigeria in that:

(a) On the 28th day of October, 1971 during the trial, the learned trial judge rejected an application for a short adjournment made by counsel for the plaintiff to enable him to call his witnesses who were on subpoena and who were present in Court at the early part of the trial. By so refusing, the Plaintiff was forced to close its case without calling these witnesses and in the process some vital documents were not tendered.

ot proceedmgs on the 28th of October 1971, the learned trial judge rejected the Plaintiff’s application made under Order xxxIII of the High Court of Lagos (Civil Procedure Rules) to amend the Statement of Claim by adding paragraph 9 to read-“The Plaintiff in the alternative pleads the statutory provisions of S.97 of the Ports Act.”

“3. The learned trial judge’s interpretation of the law pertaining to amendment of proceedings as contained in Order XXXIII of the High Court of Lagos (Civil Procedure Rules) was erroneous.

4. The learned trial judge’s interpretation of Section 97 (i) and (ii) of the Ports Act (Cap155) of the Laws of the Federation, at pages 166-168 of the record of proceedings was erroneous.
5. The Defendant’s Counterclaim was statute-barred.”

In our view, only ground 2(a) and (b) and ground 4 seem to deserve serious consideration as those were the grounds which were vigorously canvassed and hotly contested before us. We therefore shall endeavour to deal with those two grounds in full. Before going further, we wish fIrst of all to acknowledge the fact that both Chief Amachree, learned counsel for the appellants, and Chief Williams, learned counsel for the respondents have indeed been of immense assistance to this court. It is proper to say that their wealth of experience cast a good deal of light on the complex legal problems raised by this appeal.

It is Chief Amachree’s contention under ground 2 that the rejection of the application made by the learned counsel for the appellants in the lower court for an adjournment so as to enable the appellants to call their witnesses is tantamount to a denial of fair trial on the part of the learned Chief Justice. This argument on the face of it sounds attractive, but it loses its force on a closer scrutiny of the circumstances surrounding the application and its eventual rejection, as disclosed by the record of appeal.

For purpose of clarity, we think that the relevant portion of the proceedings should be set out as follows:- .

“Court:-At 12.30 noon, Mr Amachree is in difficulty and cannot proceed as his witnesses some of whom were here at the commencement of the case on Subpoena have left the Court premises without seeking the leave of the Court or informing counsel.

Court refuses to adjourn the matter. Notifying counsel that the case was specifically taken out of the turn and the other 2 cases fixed for today were adjourned about 10.30 a.m. Amachree closes:

It seems to us that the stand which was taken by the learned Chief Justice in this regard was justified. We think that we should stress here that in civil cases, it is the duty of the parties to produce their witnesses; and as far as possible, either party should be alert throughout the trial. We think: that there are occasions where it will not be in the interest of justice to grant an adjournment. It should always be borne in mind that the interest of justice does not mean just the interest of the application; it also includes the interest of the respondent and the court. In other words, the adjournment being sought should, in a strict sense, be in the interest of all concerned.

We ourselves were somewhat amazed when it came out during the hearing of this appeal that the witnesses in question are member of staff of the plaintiffs corporation. Learned counsel for the appellants was however candid enough to admit that the behaviour of those witnesses at the material time had been embarrassing to him. It seems to us that in the circumstances of this case, the learned Chief Justice had no alternative than to continue with the trial of the case before him. We do not think that in civil proceedings the machinery for the administration of justice should be allowed to grind to a halt simply because one or two careless witnesses have chosen to disappear from the court without seeking the leave of the court, or informing counsel.

Again, the contention of Chief Amachree under ground 2(b) is that by rejecting the appellants’ application to amend their statement of claim at that late stage, so as to plead the statutory defence provided by S.97 of the Ports Act, the learned Chief Justice has denied the appellants a fair trial. Judging from the record of appeal, it seems to us that, notwithstanding the fact that the application to amend was refused, the learned Chief Justice nevertheless fully considered at length the effect of S.97 of the Ports Act on the 1st defendants’ counterclaim as if the application had not been disallowed. This point is clearly supported by ground 4 of the additional grounds of appeal set out above. And since the learned Chief Justice’s interpretation of S.97 of the Ports Act was exhaustively reviewed by learned counsel for the patties in their respective arguments before us, we take the view that ground 2(b) is now, more or less, merely academic.

We shall therefore proceed to consider ground 4 which seems to be the bone of contention in this appeal.

Under ground 4, Chief Amachree unleashed a vehement criticism of the observations made by the learned Chief Justice to the effect that:

1. S.97 of the Ports Act does not apply to the filing of a counterclaim where the suit itself is brought by the very Authority for whose protection the section was enacted; and
2. That S.97 does not deal with actions relating to contract.

The question now is how far are the above observations of the learned Chief Justice correct in law

Section 97 of the Ports Act reads in the relevant portion as follows:

(1) “When any suit is commenced against the Authority or any servant of the Authority for any act done in pursuance or execution, or intended execution of any Ordinance or Law, or of any public duties or authority, or in respect of any alleged neglect or default in the execution of such Ordinance, Law, duty or authority, such suit…….

(2) “No suit shall be commenced against the Authority until one month at least after written notice of intention to commence the same shall have been served upon the Authority by the intending plaintiff or his agent”

We shall first of all deal with the point as to whether this kind of provision applies to a counterclaim or not. The law on this point does not seem to be well- settled, owing to the fact that a counterclaim is to all intents and purposes an action by the defendant against the plaintiff. There is also the undeniable fact that, under our legal system, a defendant in any civil proceeding is entitled to plead and rely on all defences that may be open to him, including the defence of counter-claim or set-off, as well as other equitable defences. It seems to us that the Notice of Action required under the Ports Act, and such like Statutes, is in the nature of privilege created by the statute in favour of the statutory body concerned. Such privilege in substance implies that in the absence of the prescribed Notice of Action the statutory body concerned could not be subjected to the jurisdiction of the court. A problem arises where the statutory body itself commences an action as plaintiff. Is the defendant, in such circumstances, to be deprived of the valuable defence which may include a counterclaim which is directly connected with the principal claim We think that to do so would in effect be to deny the defendant a fair trial. It is our view that, in such circumstances, the statutory body should be deemed to have waived the privilege conferred upon by statute. It therefore, follows that if the statutory body sues as plaintiff, then any counterclaim which is directly connected with the principal claim would be available to the defendant.

We draw support from some authorities dealing with diplomatic immunity under Private International Law which seem to fortify the view which we have just expressed in relation to the waiver of privilege at common law. This topic was fully considered in the case of South African Republic v. La Compagnie Franco-Beige Du Chemin De Fer DuNord (1898) 1 Ch. D. 190, at 195 and at 196, where North J., cited with approval the relevant portions of the judgments in two cases delivered by the House of Lords, and the Court of Appeal respectively. The first is the case of Duke of Brunswick v. King of Hanover, 6 Beav, 38, where the law is stated as follows:

“The case which we have upon this point go no further than this; that where a foreign Sovereign files a bill, or prosecuted an action in this country, he may be a defendant to a cross-bill or bill of discovery in the nature of a defence to the proceeding, which the foreign Sovereign has himself adopted.There is no case “to show that, because he may be plaintiff in the courts of this country for one matter, he may therefore be made a defendant in the courts of this country for another and quite distinct matter…….. It is clear that Lord Langdale considered the law settled. There may be a proceeding against a foreign government plaintiff by way of counter-proceeding, by cross-bill, or, what I take to be not the same as a cross-bill, a bill of discovery-it might be either a bill of discovery, if necessary, or a cross-bill-in the nature of a defence to the proceedings set up by the plaintiff; but not a proceeding setting up against the Sovereign another claim in respect of another and entirely distinct matter.”

The other case is Strousberg v. Republic of Costa Rica, 29 W.R. 125, where James L.J. says:

“It appears to me that it is due from one nation to another, that one Sovereign should not assume or usurp jurisdiction over another Sovereign. It is a violation of the respect due to a foreign Sovereign or State to issue the process of our Court against such Sovereign or State. There is but one exception, if it can be called an exception, to the rule, and that is where a foreign Sovereign or State comes into the Courts of this country for the purpose of obtaining some remedy; then by way of defence to that proceeding, the person sued here may file a cross-claim against that Sovereign or State for enabling complete justice to be done between them.”

We think that we should also refer to the interesting case of High Commissioner for India v. Ghosh (1960) 1 Q.B. 134, where Jenkins L.J., at p. 140, laid down the law as follows:

“The law which we have to apply is, I apprehend, well settled. A person entitled to diplomatic immunity as the High Commissioner for India indisputably is, or a foreign sovereign state, as for this purpose the Union of India admittedly is, cannot be impleaded in the courts of this country in an action such as the plaintiff’s counterclaim in respect of slander But the High Commissioner and the Union of India have chosen to come to the courts in this country and to submit to the jurisdiction of those courts for the purpose of establishing their claim in debt against the defendant. By that they must be taken to have waived their immunity to a certain extent, and the extent of such waiver for the present purpose is this: By bringing their action in this Country and submitting to the jurisdiction, the plaintiffs must be taken to have submitted to the jurisdiction not only for the purpose of having their claim adjudicated upon but also for the purpose of enabling the defendant, against whom they are prosecuting their claim to defend himself adequately, and his adequate defence may include a claim or demand asserted by way of counterclaim. That does not, however, mean that the plaintiffs, having brought their action here, are thereby expoosed to any sort of claim which the defendant may choose to raise against them by way of counterclaim, however far removed from the plaintiffs’ cause of action the counterclaim may be.”

The net result of the authorities cited above is that the defendant in the kind of circumstances which we have been considering, is entitled to plead any setoff or counter-claim which is directly related to the principal claim; but not to raise any counterclaim which is outside of and independent of the subject-matter of the claim. To employ the time-honoured metaphor, a counterclaim in such circumstances, can be used only “as a shield, not a sword.”

Reasoning by analogy, therefore, we take the view that the initiation of proceedings by a statutory body enjoying the kind of statutory privilege which is conferred on the present appellants under S.97 of the Ports Act should have the effect of precluding such statutory body from invoking the statutory privilege in respect of any counterclaim directly connected with the principal claim. To hold otherwise would tend to defeat the ends of justice. We think that it is good law to say that, where a person is.being sued in respect of a transaction, it is monstrous and unjust that he should be prevented from setting up a counterclaim in respect of the transaction, even if in an original action there would be no jurisdiction to sue the plaintiff. See Grientoveen v. Hamlyn & Co. Ltd., (1892) T.L.R. 231.

We shall now deal with the other point which to our mind, does not seem to be well-settled, namely whether the kind of statutory privilege which we have been considering is applicable to an action founded upon a contract. In other words, whether S.97 of the Ports Act applies to cases of contract. We think that the answer to this question must be in the negative. We agree that the section applies to everything done or omined or neglected to be done under the powers granted by the Act. But we are not prepared to give to the section the stress which it does not possess. We take the view that the section does not apply to

cases of contract. The learned Chief Justice, in deciding this point, made reference to the case of Salaka v. L.ED.B. and Anor., 20 N.L.R. 169 where de Commarmond S.P.J. as he then was, construed the provision of S. 2 of the Public Officers Protection Ordinance which is almost identical with S. 97 of the Ports Act, and thereafter stated the law as follows:

“I am of the opinion that section 2 of the Public Officers Protection Ordinance does not apply in cases of recovery of land, breaches of contract, claims for work and labour done, etc.”

We too are of the opinion that de Commarmond S.P.J. has quite rightly stated the law in the passage of his judgment cited above. It seems to us that an enactment of this kind i.e. S97 of the Ports Act is not intended by the legislature to apply to specific contracts .

It is pertinent to point point out that the view which we have just expressed seems to be in consonance with the trend of similar judgments pronounced in English cases dealing with similar provisions in certain English Statutes. We shall refer only to one case as an example. In The Midland Railway Company v. The Local Board for the District of Withington (1882-3) 11 Q.B.D., 788, the Court of Appeal construed S264 of the Public Health Act, 1875 (38 & 39 Vict. C. 55) which, more, or less falls in line with S.97 of the Ports Act, the subject-matter of this appeal. We think that it is desirable that we should here set out the provision of S.264 of the Public Health Act, 1875, as follows:

“Sec. 264. A writ or process shall not be sued out against or served on any local authority, or any member thereof, or any officer of a local authority, or person acting in his aid, for anything done or intended to be done or omitted to be done under the provisions of this Act, until the expiration of one month after notice in writing has been served on such local authority, member, officer or person”

Delivering the judgment of the court at p.794, Brett, M.R., made the following illuminating observation:

“It has been contended that this is an action in contract, and that whenever an action is brought upon a contract, the section does not apply. I think that where an action has been brought for something done or omitted to be done under an express contract the section does not apply; acording to the cases cited an enactment of this kind does not apply to specific contracts. Again, when goods have been sold, the section will not apply to an action upon a quantum meruit, because the refusal or omission to pay would be a failure to comply with the terms of the contract and not with the provisions of the statute.”

We agree with their Lordships’ exposition of the law on this point. Clearly, the appellants’ claim and the 1st respondents’ counterclaim in the present case are founded in contract The counterclaim, in brief, is for the payment of the balance of the money due from the appellants to the respondents as a result of the contract they both entered into for the construction of the second Apapa Wharf Extension.

In the circumstances, we affirm the judgment of Taylor, Chief Justice, in Suit No. LD/206/70 delivered on 3rd January, 1972. This appeal is dismissed with costs assessed at N200.00 to each set of respondents.

Other Citation: (1974) LCN/1840(SC)