Obi Obembe Vs Wemabod Estates Limited (1977) LLJR-SC

Obi Obembe Vs Wemabod Estates Limited

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In these proceedings commenced in the High Court of Lagos State, the plaintiff claimed against the defendants the sum of £37,410.18.2d.being balance of fees and reimbursable expenses due to the plaintiff for services rendered for the defendants at their request in respect of the construction of “Unity House” at 37, Marina, Lagos. The particulars of claim, as set out in paragraph 14 of the plaintiff’s Amended Statement of Claim, read-   

“(i) Fees for structural and civil engineering services £44,662.0.0d. (ii) Re-imbursable expenses 367.5.8d (iii) Resident supervision 5,079.7.6d (iv) Deposit on behalf of Wemabod    Estates Ltd. in respect of special  steel 3,000.0.0d  £53,108.13.2d Payment up-to-date by Wemabod Estates in purported satisfaction of all claims 15,697.15.0d Balance £37,410.18.2d.”   At the hearing, the plaintiff admitted that the two sums of £367.5.8d. and £3,000.0.0d. Which he claimed as reimbursable expenses and as deposit in respect of special steel respectively, had been refunded to him since the commencement of proceedings and that he no longer wished to claim these amounts.

This admission has therefore reduced the total claim to £34,043.12.6d. which when converted to naira is now approximately N68,087.25k.   The evidence adduced by the plaintiff in support of his claim may be summarised as follows. The plaintiff is a consulting engineer operating under the name and style of “Obi Obembe and Associates”. The defendants, in May, 1969, appointed him as the consulting engineer in respect of the building known as “Unity House” which they proposed to erect at No. 37, Marina, Lagos. The conditions of the engagement of the plaintiff and his scale of fees were to be governed by those laid down in a booklet published by the Association of Consulting Engineers in London (Exhibit 3). Pursuant to this, it was agreed that the plaintiff’s fees for work done by him were to be calculated as a graded percentage of the engineering works as presented at page 38 of the booklet (Exhibit 3).

Soon after commencement of the building project, the parties had a disagreement about the quantity of the steel recommended by the plaintiff for the project. As a result the plaintiff’s appointment was terminated by the defendants by letter dated 9th October, 1970 (Exhibit 10). The claim is, however, not for wrongful termination of his appointment but for the work which he had done pursuant to the project; it is based partly on the scale of fees laid down in the booklet (Exhibit 3) and partly on the letters exchanged by the parties.   With respect to the amount claimed by him for structural and civil engineering services, the plaintiff testified that his claim for £44,662.0.0d. is for work done by him as shown in the document (Exhibit 11), that it is in accordance with the booklet (Exhibit 13) and that it is based on a percentage of the cost shown in the bill of quantities (Exhibit1 3) sent to him on 20th March, 1970, by Messrs. Roland and Partners, the quantity surveyors in charge of the project. He said further that all his figures in Exhibit 11 are taken from the bill of quantities except for the sum of £75,000 shown as the cost of the disputed quantity of steel. Under cross-examination he testified further as follows:-  

“My claim relates to what I actually did up to the time my services were terminated. I now say that my claim relates to work which I actually did and also work which I might have done had the contract not been terminated. ……………… In fact I am saying that I only claimed for work which I did. I did not measure the job at the stage at which my work was stopped.

I know that there is a progress chart in the building industry. I had not got the progress chart up to the stage at which I was stopped. I have a record of the services, which I rendered up to the stage I stopped but I have not got it here. The records are in loose sheets but they are complete.” (The underlining is ours).   When asked why he did not bring the records to court, the plaintiff replied:- “I did not bring it to court because I understood that if I brought it the defendants would like to see it. These records are drawings.”  

The records were not produced throughout the trial. The significance of this omission vis-à-vis the claim for work done will emerge later. Finally, the plaintiff contended that his fees did not depend on the amount spent on the project and that if he did some work for a client and the client did not execute the work, he (the plaintiff) would still get paid for the work which he had done.   PAGE| 4   In his testimony about the sum of £5,079.7.6d., claimed for the services of his resident engineers, he referred to Schedule “C” in Exhibit 11 which contained all his claims from the defendants.

The particulars shown in Schedule “C” are as follows:- “FEES FOR RESIDENT SUPERVISION BY STRUCTURAL ENGINEERS   1/4 (Bonus) £1,560     390 Basic & Parking 150 (for 10 months)     £2,100 Rate Per Hour 3 X 2,100 = 63/- per hour     100   January 1970 881/2 hours @ 63/- £278.15s.6d February “ 161 “ @ 63/- £507. 3s = March “ 177 “ @ 63/- £ 557.11. = April “ 193 “ @ 63/- £ 607.19. = May “ 181¼ “ @ 63/- £ 570.18. 9d June “ 193 “ @ 63/- £ 607.19. =   July “ 201 “ @ 63/- £ 633. 3. = August “ 181¼ “ @ 63/- £ 570.18.9d September “ 1883/4 “ @ 63/- £ 594.11.3d October “ 47¾ “ @ 63/- £ 150. 8.3d 1.612 ½ £5,079. 7s.6d” He thereafter testified as follows:-   PAGE| 5   “Schedule ‘C’ shows the work done by Israel Okwudiarue from 19/1/70 to 22/5/70 and Mr. Aliu Adisa Disu from 22/5/70 to 12/10/70. Their basic salary was £1,560 per annum with bonus being a quarter of the salary. There was also a car allowance of £150 per annum. This make a total of £2,100 per annum. I prepared the Schedule in accordance with the number of hours they worked.”   When cross-examined about the particulars in Schedule “C” the plaintiff replied- “In Schedule ‘C’, I claimed 1,6121/2 hours for the resident engineers. The defendants agreed by letter to pay by number of hours worked. Exhibit 12 is the letter and it is dated 7/8/70. I accepted the terms of Exhibit 12 and asked my lawyer to accept”.

The relevant portion of the letter (Exhibit 12), dated 7th August, 1970, written by the defendants’ Managing Director to the plaintiffs reads:- “Finally, you will also note that the matter of your resident engineer’s expense was raised and a proposal was discussed that it should be agreed at £250 per month. We have had an opportunity of studying the provisions of the conditions of engagement of the Association of Consulting Engineers on this matter and we are of the view that the more appropriate manner of determining the reimbursement of the Resident Engineer’s fee is to base the calculation on the following principles set out by the Association of Consulting Engineers:   ‘Fees of your site engineer will be calculated as follows: and payable monthly:- On a time basis at the rate of 3s. 0d per £100 (or part thereof) of annual salary (including any bonus).’ We hope that you will consider the above proposals and respond to us without any delay whatsoever. In the circumstance therefore, we would like to have your immediate assurance that your firm is proceeding with your assignment without any interruption.”   The reply to the letter (Exhibit 12) was written by the plaintiff’s solicitors and addressed to the defendants’ Managing Director. It is dated 14th August, 1970 and was admitted in evidence as Exhibit 42. The last paragraph of the reply reads:- “Finally, on the question of the resident engineer, our clients accept your new proposal on hourly basis, and will be re-presenting their bills accordingly.”  

The plaintiff was neither cross-examined on his evidence about the resident engineers nor was any reference made to the figures shown in Schedule “C” of Exhibit 11. One of the resident engineers testified for the plaintiff. He is Aliu Adisa Disu (1st P1/W). Part of his testimony reads:-   PAGE| 6   “I know the Unity House of 37 Marina. I went there on 22/5/70 as a resident engineer. Mr. Okwudare was the resident engineer before me. I stopped working there on 12/10/70. Our hours of work was 7 a. m. till 4 p. m with an hour break for lunch. My salary at the time was £1,560 per annum plus a quarter of my annual salary as bonus. I got a car basic allowance of £150 per annum. Okwudare left our firm and so I succeeded him on the site. He is no longer in the company. I kept records on the site showing the hours of work. We worked on Saturday from 7 a.m. till 11.15 a.m; when it rain we still worked. I produce my record of hours of work for September, 1970 (no objection, admitted Exhibit 25). I produce the record for the last 12 days in October, 1970 (no objection, admitted Exhibit 26). Before September, 1970 I was not keeping hourly records. In August, 1970 we received instructions from the defendants that payment would be on hourly basis. I then had to go to the calendar and calculated the days.

That was how I got the hours from May to August. My predecessor observed the same hours as I did taking out Sunday calculating and public holidays and calculating from 7 a. m to 11.15 a. m. for Saturdays.”   In his testimony for the defendants, Adekunle Ojora (1st D/W) admitted that the plaintiff elected that his fees should be calculated on the basis of the structures and engineering works of the project. After giving the reasons for the termination of the plaintiff’s appointment as the consulting engineer, he explained why they rejected the additional claims for structural works made by the plaintiff as follows:-   “The total amount we paid to the plaintiff was based on the contract and covers the cost on the bills of quantities of the structural aspects of the project. In this connection, there are three engineering specialists consultants on the project, i.e. plaintiff, mechanical and plumbing consultants, and electrical contractors.

We paid the plaintiff on a calculation on the structural engineering works as stated in Exhibit 1. We paid the other consultants also on the bills of the architects with regard to their respective specialities ……………. Exhibit 9 which was submitted to us by plaintiff was claiming on items which the other consultants were claiming on. Plaintiff was on item 6 of Exhibit 9 claiming a percentage of plumbing and engineering installation on which we had another consultant. Plaintiff is also asking us to pay in respect of generating plant on which we had electrical consultants ………. The following items were taken into account in paying the plaintiff, soil investigation, sub-structure, concrete and steel work, piling and all other preliminary items and reinforced concrete items.”   When cross-examined about the resident engineers, the 1st D/W replied- “We agreed that the man should be paid according to the work he did. I now read the conclusion of the letter Exhibit 12 ……… The letter Exhibit 42 does not accept our proposals in Exhibit 12 ……….. Before the plaintiff engaged a resident engineer he should have sought  our views and our agreement as to the cost. At the time there was no work going on the site and I did not see any justification for paying a resident engineer. I did not include any fees for the resident engineer.

We never thought of him. At no time was our consent sought for the appointment.” (The underlining is ours).   In a reserved judgment, the learned trial Judge observed as follows:- “I have paid due attention to the oral evidence led by both parties and the documents which formed the contract between the parties especially Exhibits 1, 2, 10 and 12. In a claim of this kind a plaintiff has the burden of proving that which he asserts. It is therefore, the duty of the plaintiff to prove his entitlement to every item of claim as stated in his Statement of Claim and set out in his analysis of fees Exhibit 11. I must say at once that the plaintiff has not shown by evidence that he is entitled to the claims which he is making on his writ.”   The learned trial Judge then proceeded to consider the evidence in support of the plaintiff’s claim as follows;- “The plaintiff admitted that he did not measure the work which he had done; that he never prepared a progress chart up to the stage at which he stopped the work; and that there is no provision in the conditions of engagement and scale of fees, Exhibit 3, for the wrongful termination of the services of consulting engineers.

The plaintiff stated that he kept a record, in loose sheets, of services which he rendered (for which he is now claiming) up to the stage when he had stopped work. When asked to produce it he said he did not bring it to the court because he understood that if he did the defendants would wish to see it. The preliminary and general works shown in the calculations of the plaintiff in Exhibit 11 is costed at £228,286 as against £141,350 shown in the Bill of Quantities Exhibit 13. The plaintiff was unable to give a satisfactory explanation for this difference. It seems clear to me that the plaintiff did not release the working drawings for the project and this had led the defendants to write their letter Exhibit 19.

The plaintiff based his claims as to the amount of remuneration due to him on his own oral evidence and the scale of fees Exhibit 3. He did not call any consulting engineer or such other expert to testify for him. Assuming that the conditions of engagement and scale of fees of the Association of Consulting Engineers, Exhibit 3, apply to the case the fantastic fees charged by the plaintiff are not supported by the provisions in Exhibit 3. The plaintiff relies on the provisions of Exhibit 3 at page 30 Clause 3, Clause 9, at pages 33 and 34, and page 38 at the Schedule to Part 1…………. I do not consider that the scale of fees relied upon Exhibit 3 is applicable. The plaintiff is entitled to be paid at the rate of the work he actually did. If the work were measured then it would have been possible to determine the sum due to the plaintiff. It seems to me that the plaintiff for reasons not unconnected with the determination of his engagement put up a fantastic claim which is out of all proportion with the actual work done.”

The learned trial Judge then dismissed the plaintiff’s claim in its entirety after considering the claim made for the resident engineers as follows:- “With regard to the fees for the resident engineer although the plaintiff has shown by Exhs. 1 and 2 that the defendants are under obligation to pay for the services of a resident engineer he has not proved that the fees actually due in respect of this is £5,079.7s.6d as stated in Exhibit C which is attached to Exhibit 11.   If anything over and above what the defendants had already paid to the plaintiff had been due to him he has greatly inflated his claims and failed to prove them. Had I been in a position on the facts to find any of the plaintiff’s claims proved I would have been unable to enter judgment in his favour in view of the Arbitration clause 17 of Exhibit 3 at page 37 which the parties had agreed would govern their contract.” (The underlining is ours)    It is against this judgment that the plaintiff has now appealed to this court. Briefly stated, the complaints of learned counsel for the plaintiff/appellant at the hearing of this appeal are these. Firstly, the learned trial Judge misdirected himself in law by stating in his judgment that if he had found the plaintiff’s claim proved, he would have been unable to enter judgment in his favour in view of Clause 17 in Part II of the Association of Consulting Engineer’s booklet (Exhibit3) which provides for reference to arbitration in case of disputes.

This misdirection is all the more glaring when, on the facts, the defendants themselves had expressly refused to proceed to arbitration. Secondly, he erred in law in holding that the scale of fees in Exhibit 3 was inapplicable to the calculation of the plaintiff’s fees when the parties specifically agreed in Clause 12 thereof that the said scale of fees would apply. He consequently also erred by refusing to give judgment for the plaintiff on the items based on that scale of fees, and by observing, before coming to that conclusion, that the fees claimed are fantastic. Finally, the learned trial Judge erred both in law and on the facts in refusing to grant the amount claimed for the resident engineers when the plaintiff himself in his letter (Exhibit 12) agreed to the basis of that claim.   With respect to the complaint about the observation of the learned trial Judge on the failure of the plaintiff to submit his claim first to arbitration before coming to court, Mr. Sofola, with his characteristic frankness, was also of the opinion that the learned trial Judge was in error in making the observation. We also agree that the trial Judge did not state the law correctly.

As the learned counsel for the plaintiff/appellant has rightly pointed out, arbitration clauses, speaking generally, fall into two classes. One class is where the provision for arbitration is a mere matter of procedure for ascertaining the rights of the parties with nothing in it to exclude a right of action on the contract itself, but leaving it to the party against whom an action may be brought to apply to the discretionary power of the court to stay proceedings in the action in order that the parties may resort to that procedure to which they have agreed.

The other class is where arbitration, followed by an award is a condition precedent to any other proceedings being taken, any further proceedings then being, strictly speaking, not upon the original contract but upon the award made under the arbitration clause. Such provisions in an agreement are sometimes termed “Scott v. Avery” clauses, so named after the decision in Scott v. Avery (1856) 5 H.L.Cas. 811, the facts of which are as follows. An insurance company inserted in all its policies a condition that, when a loss occurred, the suffering member should give in his claim and pursue his loss before a committee of members appointed to settle the amount; that if a difference thereon arose between the committee and the suffering member, the matter should be referred to arbitration, and that no action should be brought except on the award of the arbitrators. In considering the scope of these provisions, the court held that this condition was not illegal as ousting the jurisdiction of the courts.

In the case in hand, clause 17 of the “Model Form of Agreement B” at page 37 of the Booklet (Exhibit 3), which on the evidence, both oral and documentary, adduced by both parties, has been incorporated by reference into the agreement between the parties reads:- “Any dispute or difference arising out of this Agreement shall be referred to the arbitration of a person to be mutually agreed upon or, failing agreement, of some person appointed by the President for the time being of the Institution of Consulting Engineers.”  

This clause is clearly different from the “Scott v. Avery.” clause. As a matter of fact, it belongs to the first class of arbitration clauses. We pause here for a moment to point out that when the dispute between the parties arose, the plaintiff, through his solicitors (the letter dated 9th January, 1971 – Exhibit 24 – refers) asked that the dispute should be referred to arbitration. The defendants, through their own solicitors, replied that a submission of the dispute to arbitration would serve no useful purpose. (See letter dated 19th January, 1971 – Exhibit 23).   As we have pointed out earlier, any agreement to submit a dispute to arbitration, such as the one referred to above, does not oust the jurisdiction of the court. Therefore, either party to such an agreement may, before a submission to arbitration or an award is made, commence legal proceedings in respect of any claim or cause of action included in the submission (See Harris v. Reynolds (1845) 7 QB 71). At common law, the court has no jurisdiction to stay such proceedings. Where, however, there is provision in the agreement, as in Exhibit 3, for submission to arbitration, the court has jurisdiction to stay proceedings  by virtue of its powers under Section 5 of the Arbitration Act (Cap.13 of the Laws of the Federation). The section reads:-

“5. If any party to a submission, or any person claiming through or under him, commences any legal proceedings in any court against any other party to the submission, or any other person claiming through or under him, in respect of any matter agreed to be referred, any party to such legal proceedings may at any time after appearance, and before delivering any pleadings or taking any other steps in the proceedings, apply to that court to stay the proceedings, and that court if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the submission, and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, may make an order staying the proceedings.”  

No stay was asked for by the defendants/respondents after they were served with the Writ of Summons. On the contrary, they accepted service of the Statement of Claim, filed their own Statement of Defence, testified in their defence, and took part in the proceedings until judgment was delivered. In order to get a stay, a party to a submission must have taken NO step in the proceedings.

A party who makes any application whatsoever to the court, even though it be merely an application for extension of time, takes a step in the proceedings. Delivery of a Statement of Defence is also a step in the proceedings (See West London Diary Society Ltd. v. Abbot ( 1881) 44 LT 376). Moreover, if the court has refused to stay an action or if the defendant has abstained, as in the case in hand, from asking it to do so, the court has seisin of the dispute, and it is by its decision, and by its decision alone, that the rights of the parties are settled. (See Doleman & Sons v. Ossett Corporation (1912) 3 KB (CA) 257, as per Fletcher-Moulton, LJ., at p. 269; also Hasting v. Nigerian Railway Corporation (1964) Lagos High Court Reports 135 at pp. 136-137. In these circumstances, it was erroneous of the learned trial Judge to observe as he did that even if the plaintiff/appellant had proved his case, he (the trial Judge) would have been unable to enter judgment in the plaintiff/appellant’s favour.

With respect to the complaint about the decision of the trial Judge that the scale of fees in the Association of Consulting Engineers’ booklet (Exhibit3) was not applicable to the calculation of the plaintiff/appellant’s fees there is no doubt, having regard to the contents of the documentary exhibits tendered at the hearing, that it was the intention of the parties that the whole of that part of the booklet dealing with “Model Form of Agreement between a client and consulting engineers” at pages 28 to 38 thereof was incorporated into the agreement. Part 1 of the Schedule to the said Form provides for the scale of fees. The whole Form of Agreement deals with the design and supervision of st

Other Citation: (1977) LCN/1899(SC)

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