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Home » Nigerian Cases » Supreme Court » Obimiami Brick & Stone (Nig.) Ltd. V. African Continental Bank Limited (1992) LLJR-SC

Obimiami Brick & Stone (Nig.) Ltd. V. African Continental Bank Limited (1992) LLJR-SC

Obimiami Brick & Stone (Nig.) Ltd. V. African Continental Bank Limited (1992)

LawGlobal-Hub Lead Judgment Report

OLATAWURA, J.S.C. 

The Appellant issued a Writ in the High Court of Anambra State of Nigeria, (now Enugu State), Enugu Judicial Division against the Respondent and claimed as follows:

“1. The defendant is a limited liability company whose registered office is situate at 148 Broad Street Lagos, and carries on commercial banking business in various places including 2 Ogui Road Enugu at which the plaintiff, a limited liability company maintains a current account and at which some of the transactions relating to the subject matter of this action, were carried out.

  1. The plaintiff has suffered damages as a result of negligence of the defendant or its employees in the course of and within the scope of their employment, as follows:-

(a) In May 1986, the plaintiff obtained an import licence valid for foreign exchange to import goods worth N1,202,830.00 from Klosa and Staas, Western Germany. The defendant, for valuable consideration, undertook to establish a confirmed and irrevocable letter of credit for the import, but negligently failed to do so before the 29th of September 1986, and thus subjected the import to second-tier instead of first-tier foreign exchange market transaction which resulted in enormous loss to the plaintiff.

PARTICULARS OF NEGLIGENCE

Fully aware, as per the exporter’s letter dated 28th August 1986, that Deutsche Bank in Frankfurt was to confirm the letters of credit, the defendant neglected to notify the said bank of the issue of the letters of credit and even when a telex message was misplaced in the defendant’s office and was not sent out until a later date when it had become stale for purposes of Decree No. 28 (sic) of 1986 (Section 15(2) (a).

(b) In November 1986, the defendant negligently excluded the plaintiff benefiting from the proceeds of BID 10 of 25th November, 1986 and so the plaintiffs money N559,290.00 paid at Enugu for which Enugu issued a draft No. DX/700594 was unutilised, whilst the bank interest on the amount kept accumulating.

PARTICULARS OF NEGLIGENCE

Though the draft was in possession of the bank, it was misplaced in the banks office, only to be discovered after the transaction, to the plaintiff’s detriment.

(c) On 11th December 1986 the plaintiff was successful in the SFEM BID 12 but the defendant negligently failed to open the letters of credit till 24th of February 1987, thus causing unnecessary delay in the arrival of goods with consequential increase in bank interests etc.

PARTICULARS OF NEGLIGENCE

Defendant overlooked to handle the transaction promptly as it should have been done in ordinary course of business.

(d) The plaintiff’s goods arrived Nigerian Port on the 12th of May 1987 but the defendant negligently failed to cause necessary steps to be taken for the clearance of the goods till the 24th of September 1987 when they approved clearance thus subjecting the plaintiff to payment of heavy demurrage charges, bank interest, etc.

PARTICULARS OF NEGLIGENCE

Fully aware since 12th May 1987, that the imported goods were awaiting clearance subject to certain payments, and fully aware of financial implication of delayed payment of the clearance charges, the plaintiffs contrary to their undertaking, neglected to release money for payment of the charges, until the 24th September 1987.

  1. The plaintiff has suffered heavy loss, and damages as a result of the negligence averred above. Wherefore the plaintiff claims from the defendant the sum of N13,000,000.00 (Thirteen Million Naira) special and general damages (N.B. full particulars of the damages will be pleaded in the statement of claim), from the defendant.

Pleadings were ordered, filed and delivered. Both parties later amended their pleadings. As a result of the issues raised by both parties in their Briefs of argument, I will refer to the amended pleadings later.

The case of the appellant as presented in the Court of trial was that the plaintiff/appellant is a manufacturing company. It manufactures cast stone bricks in various colours for sale to the public. To assist it in its business, it applied for and obtained an import licence which was valid for foreign exchange. The import licence was admitted in evidence and marked Exhibit F. It was as a result of this that the plaintiff/appellant approached the Defendant/Respondent for a loan to import the goods. The application for the loan was granted. Having obtained the approval, the Managing Director of the Plaintiff/Appellant by name Victor Obiekwe (P.W.3) travelled to Western Germany and made arrangement with one firm, KLOSA and STAAS, for the shipment of the goods to Nigeria and the foreign company “agreed to ship the goods and also give credit due through Deutsche Bank”. The Bank is also in Western Germany. The Managing Director of the Plaintiff/ Appellant came home and got in touch with the Defendant/Respondent to open a letter of credit in favour of Deutsche Bank. The Defendant/Respondent gave certain conditions to be accepted by the Plaintiff/Appellant. These conditions were clearly set out in Exhibit G. The plaintiff accepted all the conditions and the Managing Director submitted all the documents to the Enugu Branch Office of the Defendant. These documents were taken to Lagos by one Njemanze, an official of the Defendant. The Managing Director accompanied him to Lagos on 24/9/86.

Their documents were duly delivered in the Lagos Headquarters of the Defendant. It was one Mr. Okonkwo a staff of the Defendant who prepared the Letter of Credit which was eventually handed to one Mr. Akinola, Assistant Controller of Foreign Bureau Department.

As at 1 p.m. on 25/9/86 everything necessary to he done concerning the Second-Tier Foreign Exchange Market popularly called SFEM had been done because SFEM effective date of commencement was 29th September, 1986.

Before going into the evidence led in support of the claims it is necessary to mention at this early stage of this judgment that the sole purpose of this exercise was to enable the Plaintiff take advantage of the First Tier Foreign Exchange which was cheaper than SFEM. In order to take advantage of this provision anybody who purchased foreign exchange must before the commencement date of the SFEM which was 29/9/86 comply with section 15(2) of the SECOND-TIER FOREIGN EXCHANGE MARKET DECREE, 1986 which, as said earlier, came into effect on 29th September 1986. There was argument about how the Plaintiff could have known of the commencement date of this Decree. f will come to this when the submissions made before us are considered.

The Managing Director of the Plaintiff asked for a copy of the Telex allegedly sent to Western Germany. This was on 25/9/86 at about 2.30 p.m. He said Mr. Okocha told him to come back the following day to collect the copy. On 26/9/86, he went to him but he was not given a copy, the reason was that the Defendant did not find the Telex Register. It was 3 p.m. on that day i.e. 26/9/86 that he was informed the message was in fact not sent. It was thereafter an employee of the defendant one Miss Idowu was instructed to write another message. This was done but the telex message was taken to the Defendant’s telex room at 4 p.m. This time is vital as will be seen later.

According to the Managing Director, he had lost the chance of benefiting under the First Tier Market. He was then advised by the defendant to bid under the SFEM with a promise to reimburse him for the loss under the First Tier Market. He agreed and therefore succeeded under bid 12. The Managing Director gave evidence of loss as itemised in the Amended Statement of Claim. Two witnesses were called by the Plaintiff to show that no telex message was ever sent to Western Germany let alone being received. The defendant did not put up appearance in court after the 1st and 2nd P.Ws. gave evidence. In fact, they were completely absent as at the time 3 P.W. concluded his evidence in chief. Consequently 3 P.W, was not cross-examined. At the end of the case, the learned counsel Mr. Anyamene SAN addressed the Court. Judgment was delivered by Eze Ozobu J (as he then was) in favour of the plaintiff for the sum of N10,827,305.25k. With costs assessed at N4,000.00.

The Defendant appealed to the Court of Appeal, Enugu Division. In an unanimous decision, the appeal was allowed. The judgment of the High Court was set aside. This has now led to the appeal in this Court.

It is necessary to set out in details the pleadings moreso when no evidence was led by the defendant in the court of trial. The plaintiff in its Amended Statement of Claim averred in paragraphs 1 – 27 as follows:

“I. The Plaintiff is a limited liability company having its head office at No.1 Rustique Mews (off Rehabilitation Road) behind Enugu Airport Emene, Enugu and carries on commercial business of moulding and manufacturing of multi-coloured cast stone bricks.

  1. The defendant is a limited liability company whose registered office is situate at No. 106/108 Broad Street, Lagos and carries on commercial banking business at various places including No.2 Ogui Road, Enugu at which the plaintiff maintains a current account and at which some of the transactions relating to the subject matter of this action were carried out.
  2. In June 1986 the plaintiff completed the erection of rustique machineries and other equipment ready to commence production of multi-coloured cast stone bricks at its factory at Emene Enugu.

but the production depended on the essential raw materials, namely, super-white cement and bayerferrox (iron) oxides which could only be imported from overseas.

  1. After much expenditure and efforts, on or about 9th May 1986, the plaintiff obtained an import licence No. 80V0006496 dated 9th May 1986 valid for foreign exchange to import the said raw materials worth N 1 ,202,830.00 and specified in the import licence from all countries excluding South Africa provided such goods were supplied to the plaintiff on or before the 31st December, 1986, the plaintiff will rely on this document during trial.
  2. The plaintiff, through its Managing Director, Victor Kanayo Obiekwe travelled to Western Germany to conclude arrangements with KLOSA & STAAS for a credit line; prices and shipment of the said raw materials. The latter company then contacted Deutsche Bank in Western Germany on plaintiff’s behalf and secured credit line subject to the receipt of a letter of credit by the said Deutsche Bank. The condition is contained in their letter of 28th August 1986. This letter will be relied upon at the trial.
  3. The plaintiff applied to the defendant for a loan of N834,850.64 and letter of credit facilities to be able to import 1,915 metric tons of super-white cement and 24,625 kos (sic) of diverse colours of bayerferrox (iron) oxide (sic) from Western Germany.
  4. The defendant in a letter of September 19, 1986 granted one percent on the N690,000.00 and a condition that the loan be repaid from the sales of the product. This letter referred to will be founded upon at the hearing of this suit.
  5. On the 19th of September 1986, the defendant undertook the duty to establish an irrevocable letter of credit for the importation of the said raw materials as specified in the profonna invoice No. N/1084A/86 of 8th August, 1986 from KLOSA & STAAS, and in consequence took possession of the original proforma invoice of KLOSA & STAAS.
  6. The Second Tier Foreign Exchange market (SFEM) was to come into operation on the 29th of September 1986 and only confirmed letter of credit completed before that date would be transacted under the First Tier Market while others from that date would be under the Second Tier Market which is costlier that the first tier. The defendant was aware of this fact and also that several importers and banks were expediting actions so as to beat that date and benefit from the First Tier Market.
  7. The plaintiff promptly complied fully with the terms and conditions stipulated in the defendant’s letter of undertaking dated 19th September, 1986.
  8. Although the defendants (sic) was aware that the Second Tier Foreign Exchange Market (SFEM) would come into operation on Monday 29th September. 1986, and all relevant documents were submitted to the defendant’s branch office. Enugu, on or before Monday, 22nd September 1986, to enable the branch office to prepare all relevant documents in good time to meet the deadline, the defendant neglected to take the necessary steps to beat the said deadline.
  9. According to the telex message which the plaintiff received from KLOSA & STAAS dated 25th September 1986, contents of which the plaintiff’s Managing Director personally brought to the knowledge of the defendant, the Deutsche Bank was eager to confirm the letter of credit to beat the SFEM deadline if only the defendant acted quickly. Despite this telex message, the defendant still failed to communicate the opening of the said letter to Deutsche Bank before the close of business on the 26th September 1986.
  10. On Friday. 26tb September 1986, at about 11 a.m. the plaintiff’s Managing Director called at the defendant’s office in Lagos to collect plaintiff’s copy of the telex message of 25th September 1986, prepared by the defendant’s employee: one Mr. Okonkwo of Foreign Business Department conveying to the Deutsche Bank by telex message that the irrevocable letter of credit had been opened in favour of the plaintiff’s beneficiary KLOSA & STAAS. But after a considerable waste of time, at about 4 p.m, the defendant informed the plaintiff’s Managing Director that a telex message prepared on 25/9/86 was after all not sent out and that the message would be sent out in the evening. The plaintiff avers that it was negligence by the defendant that prevented the sending of the message on 25/9/86.

PARTICULARS OF NEGLIGENCE

Fully aware as per the exporter’s letter dated 28th August, 1986, that Deutsche Bank in Frankfurt, Western Germany was eager to confirm the letter of credit; the defendant failed to advise the said bank of the opening of an irrevocable letter of credit and even when a telex to that effect was prepared on the 25th September 1986, the telex message was not sent out on that date even though the defendant was fully aware that SFEM would come into effect on Monday 29th September, 1986 and that a telex message sent out on 26th September, 1986 evening which was Friday could not reach the addressees till Monday 29th September as 27th and 28th being Saturday and Sunday respectively were work free days in Nigeria and in Western Germany.

  1. The plaintiff was forced to request KLOSA & STAAS, Western Germany to send another proforma invoice since the one of 8th August 1986 was rendered useless due to the commencement of SFEM. KLOSA & STAASI forwarded another proforma invoice No./1084A/86 dated 20th November, 1986 after plaintiff’s Managing Director visited KLOSA & STAAS Western Germany. The proforma invoice was immediately submitted to the defendant on 21st November 1986 by the plaintiff. The difference in the price of the goods between the first and second tiers caused a loss of N1,697,800.00 to the plaintiff.Particulars of Loss

Item 1st Tier 2nd Tier Loss Amt

1.Super 1915m/tons 806m/tons 1109m/tons

White 22180(50kg)

Cement bags at

N70.00

each bagN1,555,6002.Bayer 24,625kos 9,500kos 1512kos

(Iron) or 605

(25kg) at

N240.00

each bag

N145,200

N1,697,800

Also, the plaintiff was forced to obtain an interest free loan of N140,000.00 from Denz & Company Limited to settle expenses and debts resulting from the negligence of the defendant.

  1. In November 1986 for the purpose of the importation of the raw materials aforementioned, the plaintiff mandated the defendant to participate in auction Bid 10 of 25th November 1986 on the plaintiff’s behalf but the defendant negligently disqualified the plaintiff from participating on the ground that the defendant had not a draft No. DX/700594 for N559,290.00 issued by the defendant’s branch office, Enugu; forwarded to and was in possession of the Defendant’s head office in Lagos since September 1986, that is during the First Tier Foreign Exchange Market so that the plaintiff’s money N559,290.00 obtained on loan from the defendant’s branch office Enugu for which Enugu issued a draft No.DX/700594 was unutilised, whilst the bank interests on the account kept on accumulating. The defendant’s letter of 25th November 1986 and a foreign exchange requisition form dated 9th December 1986 from defendant’s Enugu branch office and plaintiff’s letters of 28th November 1986 and 2nd December 1986 will be relied upon at the trial. The defendant is hereby given notice to produce the said letters and form at the hearing of this case.

PARTICULARS OF NEGLIGENCE

Though the draft was in possession of the bank, it was negligently not utilized until a later date after the defendant had disqualified the plaintiff from participation in auction Bid 10 to the plaintiff’s detriment.

  1. On 11th December 1986 the plaintiff was successful in the SFEM (Second Tier Foreign Exchange Market) BID 12. The transaction being “spot” market and not “forward” market the defendant ought to have immediately on 11th December 1986 opened letter of credit advising the beneficiary KLOSA & STAAS in Western Germany to enable KLOSA & STAAS prepare the goods for shipment but the defendant negligently treated the transaction as “forward” market and conveyed the telex message advising and confirming the irrevocable letter of credit LC.EN2/87/SFEM HQ.142/87 LD’6/87 for DM331,603-35 on 13th January 1987 and opened the irrevocable letter of credit only on 24th February, 1987, to KLOSA & STAAS. This delay meant a delay for the plaintiff to be paying interest on the borrowed capital which was lying idle. The defendant is hereby given notice to produce this letter of 24th February 1987 at the hearing of this case.

PARTICULARS OF NEGLIGENCE

The omission of the defendant to handle the transaction with reasonable despatch required in the circumstance as it should have been done in the ordinary course of business as a spot market transaction.

  1. The shipping documents were sent to the defendant three weeks before the departure of the ship that brought the goods to Nigeria and the plaintiff’s goods arrived Nigerian port at Port Harcourt on the 12th May 1987. The defendant was duly notified in advance of the arrival of the goods. Despite the plaintiff’s letter of 5th June 1987 requesting the defendant to honour its undertaking including personal calls by the plaintiff’s representative at the defendant’s office to persuade the defendant provide money for the clearance according to its undertaking the defendant failed to do so. By a letter dated 4th June 1987 written by Port Express Services Limited, Port Harcourt to the defendant’s branch office, Enugu, the defendant was advised that the warehousing expenses payable up to the 22nd of June 1987, in respect of the super-white cement consignment was N110,454.14 but the defendant failed to take the necessary steps required to enable the plaintiff clear the goods. The defendant is hereby given notice to produce above – referred letters at the hearing of this case.
  2. Earlier on, about 27th May 1987, KLOSA & STAAS wrote Rector International (Nigeria) Limited, Enugu and the latter in turn wrote to the Managing Director of the plaintiff company attaching the letter of 27th May, 1987 by KLOSA & STAAS instructing that the plaintiff could discharge the consignment into a warehouse although the practice was forbidden by the Federal Government of Nigeria.
  3. By various letters dated 5th June, 1987, 28th July 1987, undated reminder and 21st August 1987, the plaintiff persistently requested and ureminded the defendant’s branch at Enugu and employees of the foreseeable consequences flowing from the defendant’s continued delay to provide the amount required for clearing the consignment and its contractual or legal duty to see that the goods were cleared in accordance with terms of the defendant’s Enugu branch office letter of 29th July 1987, shows that the defendant was aware of the goods arrival at Port Harcourt for the defendant knew in advance when the ship conveying the goods left port of export and estimated and actual time of arrival at Port Harcourt.
  4. When Port Express Services Limited, Port Harcourt, the warehousing agent, wrote to the plaintiff a letter of 10th July 1987 and warned that 16120 bags of 806 metric tons of super-white cement consignment imported by the plaintiff would be included in the list of overtime cargo to be auctioned by the Federal Government of Nigeria and requested the plaintiff to evacuate them with despatch, the plaintiff notified the defendant at once about the warning but the defendant remained adamant and unperturbed.
  5. When the defendant failed to provide the money required to clear the goods the plaintiff had no alternative but to borrow the sum of N244,971.00 with interest from the Co-operative and Commerce Bank (Nigeria) Limited, Enugu, through its Managing Director to enable the plaintiff clear, transport and store the goods. A total sum of N194,151.29 was paid by the plaintiff for demurrage and other charges as invoice PESL N.017 of 16th July, 1987, shows.
  6. In compliance with the terms of the loan from the Co-operative and Commerce Bank (Nigeria) Limited, the super-white cement of 776 metric tons or 15,520 bags were delivered to the plaintiff but were stored in a warehouse at Ogbor Hill, Aba, at a storage rent of N1,000.00 per month. Although the bayerferrox (iron) oxides and 600 broken bags of super-white cement have been delivered in the building at Emene, Enugu, the plaintiff could not to into production without the 15,520 bags of cement being released to the plaintiff.
  7. According to the agreement between the plaintiff and the Cooperative and Commerce Bank (Nigeria) Ltd., ther (sic) superwhite cement will be released on payment of N244,971.00 and any other interests and charges accruing thereto. As the defendant failed to provide funds for repayment of the said sum of N244,971.00 borrowed from Co-operative and Commerce Bank (Nigeria) Ltd for clearing the said goods plus accrued interests, which as at 21st January 1988 had amounted to N308,35 1.25 to the knowledge of the defendant, the said Bank sold the saleable quantity of the said super-white cement numbering 12,000 bags at the end of August 1988 as the goods had deteriorated by caking and could not be used for the manufacture of cast stone bricks. The said bank charges rental for the warehouse at the rate of N1,000.00 a month for the twelve months the super-white cement remained stored in the said warehouse. In fact the final figure of the debt and accrued interest is N393,247.25.
  8. As a result of the facts averred in paragraphs 22 and 23 above, the plaintiff suffers damages for the payment of rent and for keeping the factory machines idle and the bank interest in the loan is running.
  9. The plaintiff’s machineries and equipment are now lying idle and rusting away owing to the acts of negligence exhibited by the defendant. In consequence the plaintiff will expend the sum of N85,000.00 to service the machineries and equipment before putting them to use.
  10. The negligent acts of the defendant have caused the plaintiff not to manufacture its products resulting in a heavy loss of profits of N8,570,215.00 (its equivalent in the first quarter of 1989 having regard to the depreciated value of the naira being N20 million). Wherefore the plaintiff claims from the defendant the sum of N22,650,337.50 special and general damages.
See also  Essien Ibok Essien V. The State (2017) LLJR-SC

PARTICULARS OF SPECIAL DAMAGES

  1. Loss of 1,109 metric tons or 22,180

(50kg) bags of super-white cement

at N70.00 per bag 1,552,600.00

  1. Loss of 15,125 kos or 605 (25kg)

bags of bayerferrox (iron) oxide

at N240.00 per bag. 145,200.00

  1. Demurrage 194,151.29
  2. Interest charged by the defendant

on aforesaid loan to the plaintiff

from 24th September 1986 to 31st

January, 1989 333,138,96

  1. Loan from, and accrued interest

thereon charged by Co-operative

and Commerce Bank (Nigeria) Limited. 93,247.25

  1. Rental for warehouse at Ogbor Hill Aba 12,000.00
  2. Loss of profit 20,000,000.00

TOTAL N22,650,337,50

In its own defence the defendant in its Amended Statement of Defence on pages 72 – 85 of the Record read as follows:-

AMENDED STATEMENT OF DEFENCE

  1. Save as hereinafter expressly admitted, the defendants denies each and everyone of the allegations of fact as are contained in the Plaintiff’s statement of claim as if the same have been set out and specifically traversed seriatim.
  2. The defendant admits paragraphs 1 & 2 of the plaintiff’s statement of claim.
  3. Paragraph 3 of the statement of claim. The defendant admits paragraph 3 of the statement of claim to the extent only that the defendant was aware of the fact that the plaintiff had erected plants and machineries in the factory and was awaiting raw materials in order to commence production. But the defendant denies that both Bayer Ferrous oxides and super white cement were raw materials. Rather only Bayer Ferrous oxides was to be used as raw materials, while super white cement was to be sold for money or money’s worth. This was so stated as well in the plaintiff’s letter of application for the opening of credit addressed to the defendant which letter, dated the 16th day of July, 1986, will be founded upon at the trial of this suit.
  4. In further answer to paragraph 3 of the statement of claim the defendant avers that the super white cement was imported discharged, cleared and collected by the plaintiff in or about the month of May, 1987. The plaintiff had since utilized the said super white cement.
  5. Paragraph 4 of the statement of claim. The defendants admits paragraph 4 of the statement of claim to the extent only that the plaintiff obtained an import licence dated the 9th day of May 1986 and submitted the same to the defendant before the expired date of 31st day of December, 1986. But the defendant humbly would observe that the plaintiff did not submit the import licence to the defendant until the 16th day of July, 1986 when he submitted the same with his application for letter of credit and overdraft to finance the purchase of goods and import expenses.
  6. In further answer to paragraph 4 of the statement of claim, the defendant avers that when the plaintiff submitted his import licence and the letter dated the 16th day of July, 1986 the following facts were in issue and needed to be taken into consideration

(a) The plaintiff was not liquid and wanted some money in addition to the sum already advanced to it. The plaintiff was asking for a further credit of N1,287 million.

(b) The credit applied for was to finance the letter of credit import duty, freight, insurance and other charges.

(c) The credit is not automatic nor can it be taken for granted. It requires the consideration and approval of the defendant’s Board of Directors.

(d) When approval was given for the loan.

(e) When the pre-conditions for the release of the loan were fulfilled by the plaintiff as are contained in the defendants letter of approval dated 19th day of September, 1986 addressed to the plaintiff.

  1. Paragraph 5 of the statement of claim. The defendants admits paragraph 5 of the statement of claim and in further answer to this paragraph the defendant would add that relying on this understanding between the plaintiff and the Deutsche Bank in West Germany the defendant went ahead and established the letter of credit. But the same Deutsche Bank turned back and declined to confirm the credit so established by the defendant and insisted that a cash cover must be made. This development was promptly communicated to the plaintiff in the defendants letter dated the 9th day of October, 1986.

This letter will be founded upon at the trial of this suit. The plaintiff is hereby given notice to produce the said letter at the trial of this suit.

  1. In further answer to the paragraph 5 aforesaid, the defendant states that in the said letter the defendant advised the plaintiffs to get in touch with the dealers in West Germany and sort out all the issue of credit line. The plaintiff was sort a reminder dated the 4th day of November 1986 and the plaintiff could not show up on the 25th day of November, 1986 to collect a bid form. The defendant will found upon the letter of reminder dated the 4th day of November 1986 and the plaintiff is hereby given notice to produce the said letter at trial of the suit.
  2. Paragraphs 6 and 7 of the statement of claim. The defendant denies paragraphs 6 and 7 of the statement of claim and the defendant avers that the plaintiff applied for an overdraft of N1,639,307.40 made up of N1,056,907 letter of credit, N360,849.00 surcharged, N211,381.40 advance import duty and N10,569.00 being the plaintiff’s projected bank charges. This was for the purchase of and importation of Bayer ferrous iron oxide and two brands of cement namely super white cement and Portland cement.
  3. In further answer to paragraphs 6 and 7 of the statement of claim the defendant avers that the defendant approved the sum of N690,000.00 as a loan to the plaintiff in the defendant’s letter dated 19th day of September, 1986 addressed to the plaintiff. In the defendant’s letter, of approval aforesaid the defendants made the loan subject to 1% commitment fee to be paid by the plaintiff to the defendant from the proceeds of sale of the goods, namely the two brands of cement, but not from the proceeds of sale of products of the factory. The defendant will at the trial of this suit found upon the letter of approval of loan to the plaintiff. The plaintiff is hereby given notice to produce the said letter at the trial.
  4. The defendant admits paragraph 8 of the statement of claim, to the extent only that in its normal course of duty it commenced to establish irrevocable letter of credit on satisfying itself that the preliminary requirements for opening of irrevocable letter of credit such as the funds and the proforma invoice have been met, by the plaintiff.
  5. Paragraph 9 of the statement of claim. The defendant admits

(a) that the Second Tier Foreign Exchange Market (SFEM) was to come into effect on the 29th day of September, 1986.

(b) that only confirmed letters of credit which were confirmed on or before the 29th day of September, 1986 could be transacted under the First Tier Foreign Exchange system.

(c) that the Second Tier Foreign Exchange Market is costlier than the First Tier in the rate of naira exchange for other world currencies. It is also true that most Banks and importers were striving to beat the date line. But the defendant in spite of the short time it had to scale through and the unprecedented rush on the Bank the defendant succeeded in establishing the letter of credit with the confirming bank in West Germany being the Deutsche Bank of Frankfurt on the 25th day of September, 1986. The defendant will found upon a copy of the telex dated the 25th day of September 1986which was tested and found received on the following day the 26th day of September, 1986.

  1. In further answer to paragraph 9 of the statement of claim the defendant states that the Central Bank of Nigeria regulation requires that on (sic) advance import duty should be paid before a letter of credit is established. The plaintiff paid the advance import duty on the 25th day of September, 1986 and rushed the receipt to the defendant at about 4.30 pm after Banking hours. The receipt No. 560883 of the 25th day of September 1986 will be founded upon at the trial of this suit.
  2. In further answer to paragraph 9 of the statement of claim the defendant states that the defendant properly communicated the establishment of a letter of credit to the plaintiff’s advising Bank on the same day the 25th day of September, 1986 by telex and there and then requested them to confirm the letter of credit, but they declined to confirm and insisted on cash cover a demand which could not have been met before the 29th day of September, 1986. The defendant further avers that in line with the requirements stipulated in the letter dated the 25th day of August, 1986 addressed to the plaintiff by its suppliers by name KLOSA and STAAS of West Germany the defendant successfully and promptly communicated to Deutsche Bank the establishment of a letter of credit in favour of the plaintiff’s suppliers.
  3. Paragraph 10 of the statement of claim. The defendant denies paragraph 10 of the statement of claim and the plaintiff is therefore put to the strictest proof thereof.
  4. Paragraph 11 of the statement of claim. The defendant admits that it was aware that the First Tier Foreign Exchange Market was to come into effect on the 29th day of September, 1986 but the defendant denies the rest of paragraph 11 and the plaintiff is therefore put to the strictest proof thereof.
  5. In further answer to paragraph 11, the defendant avers that the plaintiff handed in the last of the relevant documents to the defendant on the 25th day of September, 1986 being the advanced duty payment receipt and the defendant acted on to (sic) matter at once.
  6. Paragraph 12 of the statement of claim. The defendant denies paragraph 12 of the statement of claim and states that it is not true that the letter of credit was not opened on the 25th day of September 1986. The defendant opened a letter of credit on 25th day of September, 1986 and communicated the same to the Deutsche Bank the same day. It is not the duty of the defendant to inform a beneficiary of the letter of credit that its letter of credit has been established and opened. It is the duty of the advising correspondent bank and in this case Deutsche Bank which is to advise the supplier and in this case Klosa and Staas.

19(a) Paragraph 13 of the statement of claim. The defendant denies in the strongest terms paragraph 13 of the statement of claim and the plaintiff is put to the strictest proof thereof. In further answer to paragraph 13 of the statement of claim. The defendant avers that it made it clear to the plaintiff that the defendant could not guarantee any line or lines of credit and that the defendant could not therefore be held liable in any manner whatsoever for non confirmation of the letter of credit. This was initially agreed upon between the plaintiff and the defendant and the agreement was put into writing in a document dated 24th day of September, 1986. The document will be relied upon at the trial of this suit.

19(b) In further answer to paragraph 13 of the statement of claim, it was also agreed between the plaintiff and the defendant that any excess amount of money to be paid by the defendant over the current Foreign Exchange rate as contained in the letter of credit due to fluctuation in the rate of exchange prevailing in the date of final settlement in Foreign exchange should be borned (sic) by the plaintiff. Pursuant to this the plaintiff executed in favour of the defendant an indemnity dated 23rd day of January, 1986. This indemnity will be relied upon at the trial of this suit.

19(c) In further answer to paragraph 13 the defendant avers that the plaintiff was well aware of the uncertainty at the time in confirmation of letter of credit. This was why in plaintiff’s letter dated 24th day of September, I986 addressed to the defendant the plaintiff suggested two alternatives to be adopted by the defendant in order to achieve confirmation of the letter of credit. This letter will be founded upon at the trial.

  1. Paragraph 14 of the statement of claim. The defendant is aware that the Deutsche Bank refused to confirm the letter of credit before the 29th day of September, 1986 denying the plaintiff the opportunity of benefiting from the First Tier Foreign Exchange Market. But the defendant denies being responsible for the loss of opportunity or being negligent, reckless or careless in any manner whatsoever in the defendant’s handling of the plaintiffs letter of credit, or at all. The defendant further denies being responsible for the loss of charges suffered by the plaintiff as a result of which the plaintiff missed the First Tier Foreign Exchange Market.
  2. Paragraph 15 of the statement of claim. The defendant denies vehemently paragraph 15 of the statement of claim and the plaintiff is therefore put to the strictest proof thereof.
  3. In further answer to paragraph 15 of the statement of claim the defendant states that the plaintiff was disqualified in the Auction Bid No. 10 of the 25th day of November, 1986 because it did not make a formal application under the First Tier Foreign Exchange Market, but had to rely on its pre-SFEM application NoLC/EN/4/86. The plaintiff was invited by the defendant in the defendant’s letter of the 9th October, 1986 to attend at the defendant’s Enugu Main Branch for the defendant to explain to it the implications of the non confirmation of the letter of credit but the plaintiff did not come. The defendant sent a reminder letter dated the 4th day of November, 1986 yet the plaintiff did not come until the 25th day of November 1986 when it came to complete a bid form to secure the necessary cash cover.
  4. In further answer to paragraph 15 of the statement of claim the defendant states that it was made clear to the plaintiff that release of the Bank draft amounts to a refund and that this cannot be done unless and until the defendant received confirmation from the advising Bank in this case Deutsche Bank of the cancellation of the First Credit established by the defendant in CC/EN/4/86 with the Bank for the beneficiaries.
  5. Paragraph 16 of the statement of claim. The defendant admits paragraph 16 of the statement of Claim to the extent only that the plaintiff was successful in the SFEM (Second Tier Foreign Exchange Market) bid No. 12 of the 11th day of December, 1986. The rest of the paragraph is denied by the defendant.
  6. In further answer to paragraph 16 of (sic) the defendant states that there is no ‘Spot’ of ‘Forward’ (Market in Nigeria). The letter of credit could not have been established on the 11th day of December, 1986. Besides the Central Bank of Nigeria requires import duty to be paid in advance before a letter of credit could be established. The plaintiff did not pay the import duty until the 8th day of January, 1987.
  7. In further answer to paragraph 16 above the defendant states that the Central Bank of Nigeria sells only United States of America Dollars to Banks at the auction and credits the account of the Bank in the United States of America Dollars. The plaintiffs purchased a total of 155, I36.47 US Dollars at the auction, and not in Deutsche Marks required by the plaintiff. The defendant had to instruct its US correspondent Bank in New York to transfer 155,136.47 to the defendant’s London Branch to enable London Branch buy 311,603.35 DM at the London ‘spot’ Market. The defendant’s London Branch went to the London ‘spot’ market and found out that the selling rate was 1.7845 to one U.S. Dollar and that an additional sum of 19,480.14 U.S. Dollars was required to make up 311,603DM to cover the amount of the letter of credit. In order not to frustrate the letter of credit, the defendant made up the amount of the letter of credit and there and then transferred the amount to Deutsche Bank in West Germany a gesture which the plaintiff did not appreciate. There was no delay in any manner whatsoever in the whole transaction having regard to the circumstance of the case.
  8. Paragraph 17 of the statement of claim. The defendant denies paragraph 17 of the statement of claim and the defendant in answer to the same, avers that by paragraph 7 of the defendant’s letter of approval of the loan addressed to the plaintiff dated 19th day of September, 1986, the said paragraph 7 provides that the plaintiff shall bear the cost of warehousing of the goods and other charges relating to the clearing of the goods.
  9. In further answer to paragraph 17 of the statement of claim the defendant avers that because of the plaintiffs inability to pay for the clearance and storage of goods in line with the provisions of paragraph 7 of the letter of approval aforesaid, the plaintiff applied to the defendant for approval of yet another loan in the sum of N110,454.00 and the approval took some time to come through. The defendant is not liable therefore to the plaintiff for any delay of charges, fines or damages which may have been brought about by the delay in clearing and taking delivery of the goods at the Port Harcourt Wharf, or at all.
  10. Paragraph 18 of the statement of claim. The defendant denies paragraph 18 of the statement of claim and avers that the defendant does not know of any letter dated 27th day of May, 1987 written by KLOSA and STAAS to Rector International Nigeria Limited who in turn wrote to the plaintiff instructing that the plaintiff could discharge the consignment into a warehouse. The defendant avers categorically that there is no law or rule in Nigeria which prohibits importers from discharging their goods in a ware house as long as the requirements have been met.
  11. The defendant denies paragraphs 19 and 20 of the statement of claim. The defendant in further answer to paragraphs 19 and 20 of the statement of claim avers that the grant of loan which has been applied for by the plaintiff required time to process and approve. In this case the plaintiff applied for grant of further loan and the same was granted by the defendant’s top management. It was not automatic nor was it obligatory upon the defendant to provide the loan for the clearance of the goods.
  12. Paragraph 2I of the statement of claim. The defendant denies paragraph 21 of the statement of claim as the defendant had no knowledge of the transactions. The plaintiff is therefore put to the strictest proof thereof.
  13. Paragraphs 22, 23, and 24 of the statement of claim. The defendant denies paragraphs 22, 23, and 24 of the statement of claim and the plaintiff is therefore put to the strictest proof.
  14. In further answer 10 paragraph 22, 23, and 24 of the statement of claim the defendant says that when the plaintiff’s application for further loan was approved the defendant paid the same amounting to N110,454.00 for clearing, and Port charges, including demurrage, on behalf of the plaintiff. The defendant was not aware of the transactions including agreement between the plaintiff and Cooperative and Commerce Bank of Nigeria Limited and Comex International Limited in which transactions the plaintiff had to borrow money for clearing the goods or at all.
  15. The defendant will contend at the trial of this suit that the letter of credit was established subject to the Uniform Customs and Practice for Documentary Credit (1983) Revision LCC Publication No.400 to which Nigeria has subscribed which provides inter alia as follows:

Article 18

Banks assume no liability or responsibility for the consequences arising out of delay and/or loss in transit of any messages, letters or documents or for delay, mutilation or other errors arising in the transmission of any telecommunication. Banks assume no liability or responsibility for errors in translation or interpretation of technical terms, and reserve the right to transmit credit terms without translating them.

Article 20

(a) Banks utilising the services of another bank or other banks for the purpose of giving effect to the instructions of the applicant for the credit do so for the account and at the risk of such applicant.

(b) Banks assume no liability should the instructions they transmit not be carried out, even if they have themselves taken initiative in the choice of such other banks.

These provisions will be relied upon at the trial of this suit.

  1. Paragraphs 25 and 26 of the statement of claim. The defendant denies paragraphs 25 and 26 of the statement of claim and the plaintiff is hereby put to the strictest proof thereof.
  2. Paragraph 27 of the statement of claim. The defendant denies being liable to pay the sum of N13,000,000.00 (Thirteen Million Naira) (sic) special and general damages for negligency; the particulars of which are stated in paragraph 27 sub paragraphs 1,2,3,4,5,6,7 ,8,9(a), (b) & (c) to the plaintiff or at all. And the defendant will urge the Honourable Court at the trial to dismiss the plaintiff’s claim as speculative and without merit.

STATEMENT OF COUNTER CLAIM

  1. The plaintiff, a company incorporated in Nigeria with Limited liability whose head office is situate at Enugu and which carries on business at Enugu is indebted to the defendant a company incorporated in Nigeria, with Limited liability and whose head office is situate in Lagos carrying on business in Enugu as Banker in the sum of N2,276,620.61 (Two Million, two hundred and seventy-six thousand, six hundred and twenty naira sixty one kobo) as at close of business on the 31st day of December, 1987 being total loan or overdraft granted the plaintiff by the defendant at the plaintiff’s’ request. The plaintiff has not repaid all or part of the loan overdraft to the defendant.
  2. The plaintiff has been and is one of the defendant’s numerous customers and the plaintiff operates a current account No. B 102966/6374 with the defendant in the defendant’s Enugu Main Branch, at No.3 Ogui Road, Enugu.
  3. On or about the 6th day of March, 1980, the defendant at the request of the plaintiff granted the plaintiff a loan or an overdraft in the sum of N100,000.00 (One hundred thousand naira) on compound interest at the rate of 10% (ten percent) per annum with monthly rests. The plaintiff withdrew the whole amount from its current account aforesaid. As at close of business on 25th day of January, 1983 the plaintiff was indebted to the defendant in the total sum of N141,795.97 (One hundred and forty-one thousand, seven hundred and ninety five naira ninety-seven kobo) being balance of overdraft, and other charges.
  4. On the 4th day of March, 1983 the sum of N50,000.00 (Fifty Thousand naira) was approved for the plaintiff by the defendant payable within one year, with compound interest at the rate of 10% (ten percent) per annum with monthly rests.
  5. By the defendant’s letter dated the 10th day of July, 1986 addressed to the plaintiff the defendant raised the limite (sic) of the loan or overdraftofN650,000.00 (Six Hundred and Fifty Thousand Naira) for a further period of 2 years to be repaid on or before the 15th day of July, 1987 with compound interest at the rate of 13% (Thirteen percent) per annum with monthly rests. The plaintiff is hereby given notice to produce the said letter at the trial of this suit.
  6. By a letter dated the 19th day of May, I986 addressed to the plaintiff by the defendant the defendant granted the plaintiff a further N100,000.00 (One hundred thousand naira) with compound interest at the rate of 13% (thirteen percent) with monthly rests. The plaintiff is hereby given notice to produce the said letter at the trial of this suit.
  7. The plaintiff applied for more credit to enable him purchase and import some goods mentioned in the foregoing paragraphs. By the letter dated 19th day of September, 1986 the defendant granted the plaintiff a further sum of N690,000.00 (Six hundred and ninety thousand naira) for opening of letters of credit for the importation of oxides, white and Portland cement. The letter of approval aforesaid will be founded upon and the plaintiff is hereby given notice to produce the same at the trial of this suit. The plaintiff was at all times sent a statement of account.
  8. The foregoing approvals are merged in the plaintiff’s current account No.B 10-2966/6374 now computerised as No.042 14508. The defendant delivered to the plaintiff the statement of the account of the plaintiff for the periods (a) 26/1/83 to 22/4/87 (b) 2/5/87 to 29/5/87 (c) 30/5/87 to 30/6/87 (d) 30/6/87 to 31/8/87 (e) 30/9187 (f) 1/10/87 to 30/10/87 and (g) 1/11/87 to 31/12/87 and the plaintiff is hereby given notice to produce the same at the trial of this suit. Total indebtedness of the plaintiff to the defendant as at close of business on the 31st day of December, 1983 is N2,276,620.61.
  9. By the plaintiff’s letter of the 16th dayof July, 1986 to the defendant in which the plaintiff applied for more credit or overdraft, the plaintiff undertook to repay the entire loan or overdraft with proceeds of sale of the two brands of cement to be imported by the plaintiff with defendant’s overdraft.
  10. The plaintiff has since cleared and taken delivery of goods, sold them and has refused and/or neglected to pay the defendant the same overdraft despite repeated demands. The plaintiff has rather brought this claim in damages for negligence against the defendant.
  11. WHEREFORE the defendant counter-claim against the plaintiff as follows:
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(i) The sum of N2,276,620.61 (Two Million, two hundred and seventy six thousand. six hundred and twenty naira, sixty one kobo) (sic) being overdraft with compound interest granted to the plaintiff by the defendant at the plaintiff’s request with monthly rests, as at close of business on the 31st day of December, 1987.

(ii) Compound interest at the rate of 15% per annum with monthly rests until judgment is given.

I will now refer to specific findings of fact made by the learned trial judge. Before doing so however, I need to remind myself of the claims; failure of the respondent to send the telex message to Western Germany in order to beat the SFEM (The Second-Tier Foreign Exchange Market) Decree 1986 made in Lagos on 15th day of August 1986 which came into force on 29th September, 1986.

The learned trial Judge found:

(i) That all the necessary documents needed by the Defendant to send the telex messages to Deutsche Bank in Germany were handed over to the defendant.

(ii) That no telex message was sent by the Defendant as claimed in their pleading.

(iii) That Exhibit 1A was made in anticipation of litigation.

(iv) That by the time the telex message was sent by the defendant on 26/9/86 the Banks in Frankfurt had closed.

(v) That P.W.3 was a witness of truth.

The Defendant appealed. The appeal was allowed and the claims of the plaintiff were dismissed with costs. With regard to the counter-claim, the order of dismissal was set aside and it was ordered that the counter-claim be heard and tried.

Leave of the lower court was obtained to appeal on grounds of appeal on mixed law and fact. There are 6 grounds of appeal filed against the judgment. Owing to the nature of the briefs filed and the issues raised by both parties the grounds and their particulars though prolix must be reproduced hereunder for a better understanding and appreciation of the submissions made before us. These grounds read as follows:

“1. The Court of Appeal erred in law in the following passage of its lead judgment which led it to a wrong decision:

‘I do not see that the defendant’s liability can be founded on its failure to send the telex on 25 September which the learned judge called a breach of contract. I cannot also in all the circumstances come to the conclusion that the alleged negligence of the defendant caused the plaintiff any damage. In fact it has not been proved that the defendant was in breach of any duty it owed to the plaintiff.’

PARTICULARS OF ERROR

(a) A contract in a very elementary definition is an agreement whereby a person undertakes for reward to perform an act for another.

(b) The defendant admitted in its pleading that it undertook for reward to establish a letter of credit for the plaintiff and inform Deutsche Bank of West Germany by telex message before the coming into force of the Second-Tier Foreign Exchange Market in order to enable the plaintiff to benefit from the more favourable terms of the 1st Tier Foreign Exchange Market.

(c) The defendant admitted that unless the said telex message was received by the said Deutsche Bank before the close of business on the 26th of September 1986 the plaintiff would loss the financial benefit of the 1st Tier Foreign Exchange Market.

(d) The defendant pleaded that it fulfilled its said obligation.

(e) The court of trial found it defaulted and the defendant did not appeal against this finding.

(f) The trial court further held: ‘one would ask what prevented the defendants from sending the message in the morning hours (i.e. of 26th September 1986). Their attitude in this regard can only be attributed to gross irresponsibility and negligence.’

(g) This finding of the trial court accords with the complaint of the plaintiff, The plaintiff did not found its action on the tort of negligence as subtly urged by the defendant in the Court of Appeal and is allowed (sic) by the court,

(h) The court below therefore was wrong in its conclusion urged by the defendant that the plaintiffs action was based on negligence but the trial court gave judgment to it for breach of contract.

  1. The Court of Appeal completely misconceived the complaint of the plaintiff in the trial court upon which the said Court adjudicated and thereby misdirected itself in law and on the facts in the following passages of its lead judgment upon which it grounded its dismissal of the plaintiffs suit; namely, that it was not ‘shown by evidence of substance or of probative value that Deutsche Bank or banks in Germany close business at 4 p.m. that ‘the fact that PW,3 said in evidence that banks in West Germany close at 4 p.m. does not shift my (sic) onus onto the defendant to rebut’; that ‘It was not pleaded and not given in evidence that the defendant was aware that banks in Germany close at 4 p.m. or that they could not act on the day a telex was sent if sent after 4 p.m ‘; that ‘there is nothing that can be relied upon till now apart from hearsay contained in Exhibit L that Deutsche Bank was ready to add their confirmation.’

PARTICULARS OF MISDIRECTION

(a) The complaint of the plaintiff was that because the defendant did not inform the Deutsche Bank of West Germany of the establishment of the letter of credit for the plaintiff before the close of business on 26th September 1986 the plaintiff lost purchasing raw materials covered by the import licence issued to it under the First-Tier Foreign Market which the defendant admitted was cheaper than in the Second-Tier Foreign Exchange Market under which it eventually made the said purchase.

(b) It was the same Deutsche Bank that confirmed another letter of credit established for the plaintiff by the defendant under the Second-Tier Foreign Exchange Market.

(c) It was the defendant that conducted the bid for the plaintiff under the Second-Tier Foreign Exchange Market.

(d) The plaintiff pleaded in the particulars under paragraph 13 of its statement of claim both original and amended, that a telex sent out in the evening of Friday after the close of business for the day would not beat the 2nd Tier Foreign Exchange Market.

(e) The pleading of the defendant was that it sent the telex informing Deutsche Bank of the opening of the letter of credit on 25th September, 1986.

(f) It was not the case of the defendant that it was not aware that banks close in Western Germany by 4 p.m. local time here.

(g) It is very elementary knowledge that once a business house closes for the day any communication addressed to it has to await the re-opening of the business house on the next working day.

(h) Evidence is not pleaded.

(i) The Evidence Act enjoins the court to take judicial notice of the divisions of time.

(j) It was not the case of the defendant on its pleading that it did not know of the date of coming into force of the 2nd Tier Foreign Exchange Market until 25th September 1986 as speculated by the Court of Appeal. It pleaded knowledge of the said date and of the financial repercussions to the plaintiff if the telex message was not received by Deutsche Bank before the coming into force of the 2nd Tier Foreign Exchange Market on 29th September 1986, the 27th and 28th of September being non working days in both Western Germany as in Nigeria.

  1. The court below misdirected itself in law and on the facts in the passage of its lead judgment quoted hereunder which it led it to reverse the judgment of the court below based on proved facts and substitute therefore a judgment based on conjecture and speculation:

‘It seems to me, as I said earlier, that the need to have a confirmed irrevocable LC came much later than the time a contract was reached by the parties for the opening of an irrevocable LC on 19 September, 1986. At that time it would appear there was nothing officially known of the Second Tier Foreign Exchange Market (SFEM). The averments in paragraphs 9, 10 and 11 of the amended statement of claim that the defendant then knew of SFEM, and that the plaintiff had by 22nd September given it all relevant documents to take steps to meet the deadline and so qualify under the First Tier, cannot really be supported by facts. It appears that the reality of the coming of SFEM was not established until Decree No. 23 known as Second-Tier Foreign Exchange Market Decree 1986 was published in Lagos on 24 September 1986 in an Extraordinary Gazette as Government Notice No. 650. That was when Government notice of it was legally given to the banks and their customers. At least no other source of knowledge was pleaded.

It was obviously that Decree that made the plaintiff want to secure confirmation of its LC. It sought to do this by itself scouting for a confirming banker. It appeared to have got one through the efforts of the sellers. That was what gave rise to exhibit L. It was after exhibit L was received by the plaintiff (not before 25 September) that pressure was put on the defendant by the plaintiff to see how the LC would be confirmed under section 15(2)(a) of Decree No. 23.”

PARTICULARS OF MISDIRECTION

(a) The obligation of the defendant to the plaintiff was not an issue in the trial court.

(b) The defendant pleaded in paragraph 14 of its amended statement of defence that ‘in line with the requirements stipulated in the letter dated 25th day of August 1986 addressed to Staas of West Germany the defendants successfully and promptly communicated to Deutsche Bank the establishment of a letter of credit in favour of the plaintiff’s suppliers.’

(c) The defendant further pleaded in paragraphs 7 and 14 of its amended statement of defence that it was aware that Deutsche Bank was will (sic) to give credit provided it received a letter of credit from the defendant and relying on this understanding between the plaintiff and Deutsche Bank it went ahead and established the letter of credit’ and that ‘the defendant properly communicated the establishment of a letter of credit to the plaintiff’s advising bank on the same day the 25th day of September 1986 by telex and there and then requested them to confirm the letter of credit but they declined to confirm and insisted on cash cover a demand which could not have been met before the 29th day of September 1986.

(d) The learned trial judge found as a fact that the defendant did not send out the telex message to Deutsche Bank of Western Germany which it averred it did on the 25th of September 1986.

(e) The trial court also found that Exhibit 1A, i.e. the alleged telex message, was a document made in anticipation of litigation.

(f) There was no appeal from these findings of fact but the Court of Appeal held suo motu that the message was sent. tested and found received the following day, 26th September 1986.

  1. The court below erred in law in embarking on an evaluation of the evidence tendered at the trial, when the facts testified to in evidence by the plaintiff were not challenged in cross-examination nor rebutted by contrary evidence and were in fact believed by the trial court and worse still, basing its said evaluation on speculations and conjectures.

PARTICULARS OF ERROR

(a) It was sheer speculation for the Court of Appeal, after holding that evidence was not brought to controvert some aspects of the evidence of the principal witness for the plaintiff, to find that it ‘seemed impossible from the available evidence for any steps to be taken by the defendant to ask Deutsche Bank to add their confirmation to the letter of credit before the letter from Klosa & Staas dated 25th September 1986 was received’, when the defendant pleaded that it sent the letter of credit to Deutsche Bank for confirmation on 25th September, 1986.

(b) It was sheer speculation for the court below to hold that “it is most unlikely that P.W.3 travelled to Lagos on 24th September 1986 as given by him in evidence with all the relevant documents which were delivered to the defendant bank’s Lagos Office” when the defendant pleaded in paragraphs 11 and 12(c) of its defence that it received all relevant documents from the plaintiff bore (sic) it opened a letter of credit which it communicated to Deutsche Bank on 25th September 1986.

(c) Evaluation of evidence is the primary and exclusive function of the trial court subject to exceptions which were not canvassed by the defendant in the court below.

  1. The Court of Appeal erred in law in itself raising remoteness of damage for the defendant when the defendant did not specifically make remoteness of damage a ground of appeal.

PARTICULARS OF ERROR

(a) The ground of appeal filed by the defendant was that the “damages awarded were excessive and unreasonable and, there was no legal or rational ground for making the award”.

(b) the defendant never pleaded remoteness of damage in the trial court.

(c) The observation of the Court of Appeal on pleading how loss of profits was worked out means that evidence must be pleaded contrary to the rules of the pleading.

(d) The other observation of the Court of Appeal on the damages awarded overlooked the dicta of the Supreme Court on proof of special damages, namely, that there is no special category of evidence required by law for proof of special damages and that the ipse dixit of the claimant will suffice in circumstances such as the instant case.

  1. The Court of Appeal erred in law in holding that there was no basis for dismissing the defendant’s counter-claim after it had earlier warned the defendant’s counsel to appear in the High Court to conduct the case of the defendant and the said counsel refused to attend the court on the ground that the defendant instructed him not to appear further in the case.

PARTICULARS OF ERROR

(a) It was within the discretion of the High Court to dismiss or strike out the counter claim.

(b) It is not the function of an appellate court to substitute its discretion for that of the trial court.

(c) There was no complaint that the High Court took irrelevant considerations into account in exercising its discretion.

(d) A party who files an action in court and refused to pursue it at the trial will not be heard to complain that his claim was dismissed”.

The Plaintiff who is the Appellant in this court raised four issues for determination, they are:

“(a) Was the court below right on hearing the appeal to make findings of fact in respect of matters on which issues were not joined by the defendant in the trial court

(b) Was the court below right in scouting for evidence and basing its judgment on inference drawn from such evidence found out by itself which turned out to be speculative without calling on the parties to address it on such new found evidence

(c) Was the court below right in raising for the defendant as a ground of appeal that the damage suffered by the plaintiff was too remote and basing its decision against the plaintiff on the said ground when remoteness of damage was not put in issue by the defendant in the trial court nor specifically raised by the defendant in its grounds of appeal

(d) Was the court below right to set aside the order of the trial court dismissing the counterclaim and to substitute therefore an order H putting the counterclaim back on the cause list for trial”

The Defendant who is now the respondent formulated four questions for determination in its Amended brief. They are as follows:

(i) Whether the plaintiff proved the contract which formed the basis of his action against the defendant.

(ii) Whether the failure or neglect of the defendant to communicate the fact that it had opened the letter of credit to Deutsche Bank until after the close of business on Friday 26/9/86 constitutes an actionable wrong (whether in contract or in tort) on the part of the defendant.

(iii) Whether the Court of Appeal was justified in rejecting or departing from findings or decisions of the High Court on matters which were not disputed by the defendant and in particular whether the said Court of Appeal was right in deciding the following questions:

(a) the date of the publication of the Second-Tier Foreign Exchange Market Decree, 1986 in the Gazette; (b) knowledge on the part of the defendant of the provisions or requirements of the Decree at the time he entered into the contract sued upon with the defendant;

(c) the probable time when the documents relating to the opening of the letter of credit reached the defendant;

(d) adequacy of the pleading and the evidence relating to damages; and

(e) remoteness of damage.

(iv) What order should the Court below have made on the defendant’s counter-claim”.

In his oral submission the learned counsel for the appellant Mr. Anyamene S.A.N. referred to the pleadings as straightforward but that the lower court went on a voyage of discovery and that the court raised issues that were not raised by the parties. Learned counsel pointed out that the respondent’s counsel appreciated this but that the lower court did it in the interest of justice. Learned counsel then referred to the defence of the respondent which was that the telex message was sent on 25/9/86 and confirmed that it was received. A defence which according to the Judge’s finding was false. But that the Court of Appeal came to the conclusion that the message was sent. Learned counsel submitted that immediately Decree 23 of 1986 was signed on 15/8/86 it became law. Learned Senior Advocate referred to the pleadings filed by the Defendant especially paragraph 14 of the Amended Statement of Defence. Learned Senior Advocate referred to the Respondent’s brief on admission and submitted that the Respondent did not make any admission in respect of what they did not know about: SEISMOGRAPH SERVICE NIGERIA LTD. V. EYUAFE (1976) 9 – 10 S.C 135; (1976) N.S.C.C Vol. 17 547 and submitted that the case relied upon by the respondent is inapplicable. Learned counsel had recourse to paragraph 14 of the Amended Statement of Defence and described it as an undertaking to send and confirm by telex; and that unless the telex was sent the Deutsche Bank in Frankfurt could not have refused to confirm. Mr. Anyamene S.A.N. referred to page 236 of the record of appeal where the respondent in its brief in the lower court speculated why the Deutsche Bank refused to confirm the credit. and further stressed that no appeal was filed against the finding by the trial Judge that the telex was not sent. Learned Senior Advocate referred to paragraph 14 of the Amended Statement of Claim, where the loss sustained was pleaded. He also referred to the observation of Uwaifo J.CA, on this issue on pages 317 -8 of the record.

On the issue of contract for foreign exchange the learned Senior Advocate submitted once the respondent admitted that they sent the telex there was no need to produce the form filled for the Foreign Exchange, he referred to paragraph 19(a) of the Amended Statement of Defence. Learned Counsel referred to s.15(2)(a) of the 1986 Decree and concluded by saying that the respondent disabled the Deutsche Bank from performing. He finally urged that the appeal be allowed.

In his own reply, Chief Williams S.A.N. submitted that the appellant has failed to prove the foundation of the basis of its case. He referred to paragraph 12 of the Amended Statement of Claim. According to the evidence led, the letter of credit was opened in Lagos on 25/9/86 as Exhibit L is dated 25/9/86. It is the contention of the respondent that it is for the Nigerian Bank to arrange for confirmation. Appellant only proved that letter of credit was opened but failed to prove failure on the part of the respondent to despatch the telex on 25/19/86. Learned Senior Advocate referred to paragraphs 14 and 20 of the Amended Statement of Claim. Then Chief Williams submitted that failure to communicate cannot cause loss once the letter of credit is established. He referred to paragraph 8 of the Amended Statement of Claim and finally adopted his brief. Mr. Anyamene S.A.N. cited these two cases:

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(1) A. E. IPADEOLA & ANOR V. ABIODUN OSHOWOLE & ANOR (1987) 3 NWLR (Pt.59) 18

(2) SALAWU AJIDE V. KADIRI KELANI (1985) 3 NWLR (Pt.12) 248; (1985) 11 S.C.124 atl68 and 173.

It is better to know whether the contract which formed the basis of this action has been proved. I have set out earlier the material findings made by the learned trial judge on this issue. In their consideration of the issue of the contract the lower court said:

“Now, it is of utmost importance that if the defendant is to be held liable in that regard, it must be shown by the plaintiff:

(1) that the defendant did not send the telex on the 26th September or that it sent it after the close of business that day by (sic) Deutsche Bank,

(2) that the defendant was aware that Deutsche Bank close their business at 4 p.m.

(3) that the Deutsche Bank did not send their confirmation solely on the ground that the telex got to Germany after 4 p.m. (i.e. at 4.20 p.m)”.

I agree. I think what is more important in the above stipulated conditions is that the telex was sent; if the telex was not sent at an, the question of getting there late will not arise. Paragraph 14 of the Amended Statement of Defence stated categorically and unequivocally that the telex was sent. That paragraph states inter alia:

“14 ………… the defendant states that the defendant properly communicated the establishment of letter of credit to the plaintiffs Bank on the same day the 25th day of September 1986 by telex and there and then requested them to confirm and insisted on cash cover a demand which could not be met before 29th day of September 1986 ”

By its pleading conditions (2) and (3) laid down for the enforcement of a contract between the parties did not arise again. It must be appreciated that there cannot be a better notice of the case a party intends to make than his pleading. It is a mere notice and can never be substituted for the evidence required in proof of the facts pleaded; subject however to an admission made by the other party. Unless a party through skilful cross-examination discredits the case of the other party, he is still bound to lead evidence in support of his own pleading. Once the evidence led is admissible, relevant and uncontradicted and not discredited by cross-examination a court can legally rely on it .The defendant/respondent led no evidence nor tendered any document in support of its averment. On the contrary however, the plaintiff/respondent led evidence that the telex was not sent. it called two vital witnesses from NITEL (P.W.1 and 2) to show conclusively that no message was sent. I prefer to set down verbatim the question put to and the answers by P.W.2 – Ezekiel Kilanko Olubode, a technician on Telex and Overseas Operation and Maintenance of Telex Services in Lagos Zone. This is limited to Exhibit B tendered by consent. Exhibit B is the Bill from NITEL in respect of messages sent overseas by the Defendant during the month of September 1986. The crucial dates in that month in so far as this case is concerned are 25th and 26th September. 1986. Exhibit B also shows “itemised bits of messages showing their dates of despatch”

“Q You have a Bill for September 1986 meant for ACB

A. Exhibit B is the Bill for telex messages for A.C.B. for September 1986.

Q It will not be correct to say that Exhibit A is an attachment without a Bill

A. Exhibit B set out in detail the Bill. It explains in detail the calls made and all the particulars.

PUT. Message was sent on 25/9/86 to 41414791

A. Based on Exhibit B no message was sent on that day.

PUT. On 26/9/86 the called number confirmed that it received a message that was sent to it on 25/9/86

A. It is not possible”

On the evidence of this technician which the learned trial Judge believed, nobody should be left in doubt that paragraph 14 of the Amended Statement of Defence already quoted above is false. This takes me to what Chief Williams in his brief referred to as “The Second Contract” and whether it was proved. Chief Williams relied on what Uwaifo J.C.A. said that application for the letter of credit was not tendered and that consequently it was impossible for the court to determine “all the terms” of the contract. With respect, that is not the case of the parties. The defendant/respondent did not plead ignorance of any contract but it showed through its pleading that it was aware of the terms and the purpose, if not, why should the defendant in paragraph 19(a) and (c) aver as follows:

“19(a) In further answer to paragraph 13 of the statement of claim. The defendant avers that it made it clear to the plaintiff that the defendant could not guarantee any line or lines of credit and that the defendant could not therefore be held liable in any manner whatsoever for non confirmation of the letter of credit. This was initially agreed upon between the plaintiff and the defendant and the agreement was put into writing in a document dated 24th day of September, 1986. The document will be relied upon at the trial of this suit.

19(c) In further answer to paragraph 13 the defendant avers that the plaintiff was well aware of the uncertainty at the time in confirmation of letter of credit. This was why in plaintiffs letter dated 24th day of September 1986 addressed to the defendant the plaintiff suggested two alternatives to be adopted by the defendant in order to achieve confirmation of the letter of credit. This letter will be founded upon at the trial”.

Why did the defendant/respondent fail to tender this letter Neither can the defendant be heard to say that the plaintiffs case “as pleaded did not include any allegation that the defendant undertook to communicate the fact that the letter of credit was opened to the Deutsche Bank before the close of business on 26/9/86”. In my view the combined effect of paragraphs 8 and 9 of the Amended Statement of Claim shows that 26/9/86 was the last day the appellant could have benefited under the First Tier Foreign Exchange Market. In my view, as analyzed above, once the telex was not sent, it follows that the question of confirmation by Deutsche Bank did not arise.

There is no doubt that both parties were aware of the relevant Nigerian Law i.e. Decree No. 23 of 1986 which I had earlier referred to as SFEM. The relevant provisions which relates to the official First Tier Market reads:

“any transaction covered by a specific import licence in 1985 or 1986 for which a confirmed and irrevocable letter of credit was established on or before the last day immediately preceding the commencement of this Decree must be settled at the rate of exchange prevailing at that material date.”

Chief Williams seems, to concentrate on “confirmed and irrevocable letter of credit” without adverting to the steps to be taken before the irrevocable letter of credit should be confirmed. The confirming Bank, in this case Deutsche Bank must receive a notification from the defendant i.e. the issuing bank before it can confirm. You can only confirm once there is a request. The telex which ought to convey the request was not sent; this is the case of the Appellant. This to my mind “…as why the defendant/respondent averred in paragraph 12 of the Amended Statement of Claim thus:

“12 The defendants admits

(a) that the Second Tier Foreign Exchange Market (SFEM) was to come into effect on the 29th day of September, 1986.

(b) that only confirmed letters of credit which were confirmed on or before the 29th day of September, 1986 could be transacted under the First Tier Foreign Exchange system.

(c) that the Second Tier Foreign Exchange Market is costlier than the First Tier in the rate of Naira Exchange for other world currencies. It is also true that most Banks and importers were striving to beat the date line. But the defendant in spite of the short time it had to scale through and the unprecedented rush on the Bank the defendant succeeded in establishing the letter of credit with the confirming Bank in West Germany being the Deutsche Bank of Frankfurt on the 25th day of September, 1986.

The defendant will found upon a copy of the telex dated the 25th day of September, 1986 which was tested and found received on the following day the 26th day of September, 1986.”

I will repeat again that it has been proved to be false, the averment that the telex was sent. I agree with Mr. Anyamene S.A.N. in his oral submission that unless the telex was sent the. Deutsche Bank could not have refused to confirm any letter of credit. I cannot therefore accept the submission of Chief Williams that the Appellant has failed to prove the Defendant’s failure to despatch the telex on 25/9/86 or on any date before 29/9/86.

The finding in this issue was not challenged on appeal:

IPADEOLA & ANOR V. A. OSHOWOLE & ANOR (1987) 3 NWLR (Pt.59) 18; (1987)5 S.C.376/378: SALAWU AJIDE V. KADIRI KELANI (1985) 3 NWLR (Pt.12) 248; (1985) 11 S.C. 124 at 168 & 173.

In the lead judgment of Uwaifo J.C.A, the learned justice after citing authorities on delegated legislation and on when a delegated legislation “should ideally come into effect” said:

“I do not intend to say more than that. So in fact it could have at best been a matter of speculation as to when the Decree would indeed come into operation at the time the defendant was making effort over the confirmation of the LC. It is, in my view, a grave matter to attempt to saddle the defendant with liability in the circumstances of the publication of that order……

It is most unlikely that P.W. 3 travelled to Lagos on 24 September as given in evidence by him in the company of one Njemanze, an official of the defendant bank “with all the relevant documents” which were delivered to the defendant Bank’s Lagos Office ……It seems a fair view to take that the plaintiff 3rd witness most probably proceeded to Lagos after he got Exhibit L on 25th September and that he might have arrived there that day”

With respect there was a lot of surmise on the part of the lower court about what happened. No doubt the court was led into this after trying to make a case not based on the evidence yet to be given by the defendant/respondent in this appeal. If the evidence had been duly considered and consideration given to the findings of the trial court, there should not have been any need for the “‘discovery” embarked upon by the lower court. No court has a right to force a party to give evidence. After both parties to dispute had been duly notified of the hearing date, and a party for no justifiable reason decides to, so to say, opt out of the proceedings; the case presented by the other party once it is not discredited in any legal way should be the case to be considered on its merits. The intention of the other party whey it refuses to take part is not the business of the court. This situation is different from a position taken by a party who announces not to call evidence in view of the evidence led by the other party.

In summarizing the plaintiff/appellants claim, Chief Williams in his brief said:

“The only ground on which the plaintiff rested his claim in this action was that the defendant was responsible for this failure (failure that the Deutsche Bank failed to confirm the credit) because he failed to communicate in time with Deutsche Bank. There is no valid legal or factual basis for such a claim.”

Learned Counsel then agreed with the criticism of the lower court about the visit to Lagos by P.W.3 and evidence relating to the time business closed on the last day i.e. 26th September, 1986. As said earlier the criticisms on which this submission is based missed the point of contention which is whether the telex was sent or not and once it was proved and found by the judge that it was not sent, this Court will, in the absence of any contrary evidence accept that finding.

In summary I will hold that there has been a breach of the contract for which the defendant/respondent is liable.

I now come to the issue of damages. The lower court per Uwaifo J.C.A. said:

“If I were however to hold the defendant liable, the amount of damages would have been the cost of buying foreign exchange from the First and Second-Tier Foreign Exchange markets in respect of later financing the said Letter of Credit”

I agree. The learned Justice of the Court of Appeal explained it better when later in his judgment he said again:

“Therefore all it could hope to get in an action like this, as an alternative to the difference computed in naira between the cost of buying foreign exchange from the First and Second-Tier Foreign Exchange Markets as I earlier said in this judgment, if properly asserted and proved as a necessary consequence of that loss of opportunity, would have been loss of profit and no other”

In assessing damages one must inevitably look at the claims filed and as set out in paragraphs 21-27 of the Amended Statement of Claim already reproduced above. In claim 2(a) the damages suffered were due to the failure of the defendant to send the telex.

In his evidence concerning the failure to beat SFEM P.W.3 said:

“When I failed to beat SFEM, the defendant asked me to utilize the money in bidding for the second Tier and whatever losses I sustain would be taken care of.”

The plaintiff/appellant in paragraph 14 of the Amended Statement of Claim pleaded this loss. The relevant part of paragraph 14 reads:

“………The difference in the price of the goods between the first and second tiers caused a loss of N1,697,800.00 to the plaintiff

Item 1st Tier 2nd Tier Loss Amt

1.Super 1915m/tons 806m/tons 1109m/tons

White 22180(50kg)

Cement bags at

N70.00

each bag

N1,555,600

2.Bayer 24,625kos 9,500kos 1512kos

(Iron) or 605

(25kg) at

N240.00

each bag

N145,200

N1,697,800

The defendant/respondent in answer to this in paragraph 20 of the Amended Statement of Defence averred:

“Paragraph 14 of the Statement of Claim. The defendant is aware that the Deutsche Bank refused to confirm the letter of credit before the 29th day of September, 1986 denying the plaintiff the opportunity of benefiting from the First Tier Foreign Exchange Market. But the defendant denies being responsible for the loss of opportunity or being negligent, reckless or careless in any manner whatsoever in the defendant’s handling of the plaintiff’s letter of credit, or at all. The defendant further denies being responsible for the loss of charges suffered by the plaintiff as a result of which the plaintiff missed the First Tier Foreign Exchange Market.”

In view of the conclusions reached, I will grant this loss well calculated and proved.

I now come to the other special damages as itemized on page 175 of the Record of Appeal. These are based on claims 2(b), (c) and 2(d):

2(b) I do not see how this can give rise to any special damage; the complaint is in respect of the bank interest. No where had it been alleged that failure to pay the loan which in anyway must attract interest was due to any fault as such. A claim for general damages may have been considered. I will disallow the items based on this.

2(c) & 2(d) have not been established, Exhibit G i.e. letter dated 19/9/86 laid down certain and specific conditions which must be met and there was no evidence led to show these conditions were met.

For instance condition (7) is clear and unambiguous:

“7. Costs of joint control of goods e.g. warehousing, and other charges, however incurred in respect of the security of the goods will be borne by our company”.

Not a word was said about this in the evidence before the lower court. It appears to me therefore that claims (iii), (vi) cannot be maintained. Whereas claim (vii) is speculative. On the whole, I will dismiss those claims referred to as special damages. There will be judgment in favour of the plaintiff/appellant for the sum of N1,697,800 (One Million, Six hundred and ninety-seven thousand, Eight Hundred Naira only) being the difference in the price of the goods between the first and second tier markets..

I now come to the counter claim. Counter-claim is a cross-action. This must be proved. At the hearing, and in fact in the middle of the trial, the defendant completely withdrew from the further participation. The case suffered several adjournments. To appreciate the levity with which the defendant treated the proceedings, I reproduce below the proceedings of 21st March 1989 up to the time Mr. Anyamene SAN closed the case for the plaintiff and addressed the Court:

“Plaintiff present by Victor Kanayo Obiekwe, defendant absent. Mr. A. N. Anyamene, S.A.N. (Miss N.N. Owoh with him) for the plaintiff. No counsel appears for the defendant.

Mr. Anyamene – This suit came up today. It is so in order that the defendants should be served with the Amended Statement of Claim and also for them to cross-examine the last witness for the plaintiff. On the 14/3/89 both the Amended Statement of Claim and hearing notice were served on the defendant personally. Time of service was 12.30 noon of the said date. We obtained a certified true copy of the affidavit of service by the bailiff. I tender the affidavit of service – received and marked Ex. U. The defendant is not here and no counsel appears for him. In the circumstances I urge the Court to apply ORDER 24 Rule 13 of the High Court Rules and proceed with the hearing of the case. This is the third hearing notice served on the defendant and yet the defendant has consistently absented itself. No indication from the defendants that they have any intention to defend the suit. Isay so because only yesterday 20/3/89 defendant failed to obtain an interim order from the Court of Appeal to stop hearing of this case. The defendant’s motion to that effect at the Court of Appeal is CA/E/31M/89. I informed the Court of Appeal that this case will go on today and Counsel Mr. E. C. Ibe heard me when I announced that the case will go on. Mr. Ibe had appeared for the defendant in this Court up to the 7/3/89.

Ruling: Hearing of this suit now proceeds.

Mr. Anyamene – I close plaintiff’s case. And now address the Court”.

Where a plaintiff or a defendant who files a counter-claim abandons his claim without leading any evidence the proper order to make is to strike out the case or the counter-claim. The learned trial Judge was wrong to have dismissed the counter-claim. While agreeing with the lower court that the counter-claim was wrongly dismissed, no reason was given by the lower Court for ordering that the counter-claim be restored “on the cause list for normal trial”. I cannot, with respect, agree with Mr. Anyamene S.A.N. that “a trial court is not bound to give its reasons for dismissing a claim abandoned by the claimant”. If that dismissal is meant to be, and in fact should be, a judgment of the court, reasons must be given. It is not for the appellate court to speculate why a case was dismissed, non-suited or struck out. The reason for doing so must appear on the record of the lower court. It is not a case of discretion as canvassed by the appellant, it is in the interest of justice that any party should know why he has lost or won a case. The administration of justice requires proof of any claim or counter-claim and not surmise or conjecture. Chief Williams S.A.N. is right in his submission that “a Court of justice ought to be very slow to give final judgment in an action or counter-claim when it is aware that there has been no trial on the merits.” But I disagree that it is for that reason that the court below ordered that the case be put back on the cause list. No Court should force a party to proceed with a claim abandoned. In the final analysis the counter-claim will be and is hereby struck out.

The appeal has succeeded in part. Costs of this appeal are assessed at N1,000.00 in favour of the appellant.

S. KAWU, J.S.C: I have had the advantage of reading, in draft, the lead judgment of my learned brother, OLATAWURA, J.S.C. which has just been delivered. I am in complete agreement with his reasoning and also with his conclusion that this appeal ought to be allowed. The lower court was definitely in error when it carne to the conclusion that there was no contract between the parties when the parties in their pleadings agreed that there was. In paragraph 8 of the Amended Statement of Claim, the appellant pleaded as follows:

“On the 19th of September, 1986, the defendant undertook the duty to establish an irrevocable letter of credit for the importation of the said raw materials as specified in the proforma invoice No. N/1084A/86 of 8th August, 1986, from KLOSA & STASS, and in consequence took possession of the original proforma invoice of KLOSA & STAAS.”

This was admitted by the defendant in paragraph 11 of its Amended Statement of Defence where it averred thus:

“11. The defendant admits paragraph 8 of the statement of claim, to the extent only that in its normal course of duty it commenced to establish irrevocable letter of credit on satisfying itself that the preliminary requirements for opening of irrevocable letter of credit such as the funds, and the proforma invoice have been met, by the plaintiff.”

Furthermore there was the evidence of 3 P.W. – the Managing Director of the plaintiff company, which evidence was believed by the learned trial Judge. There was also overwhelming evidence that the defendant failed to perform its own side of the contract and that being the case, in my view, the learned trial judge was right in finding the defendant liable in damages for breach of contract.

For the above reasons, and for the fuller reasons set out in the lead judgment of my learned brother, OLATAWURA, J.S.C., I too will allow the appeal. I abide by all the orders made in the lead judgment including the order as to costs. I will also strike out the defendant’s counterclaim which would appear to have been abandoned.


SC.186/1990

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