Quo Vadis Hotel And Restaurants Ltd V. Nigeria Maritime Services Ltd. (1992)
LawGlobal-Hub Lead Judgment Report
U. MOHAMMED, J.S.C.
The plaintiff/appellant commenced action in tort in a Lagos High Court against the defendant/respondent claiming, vide paragraph 14 of its statement of claim the following reliefs:-PARTICULARS OF DAMAGE
- Cost of 300 cartons of Taittinger
Champagne at N7,000
per carton (C&F) N21,000.00
- Cost of Custom Duties
paid on 300 cartons 8,357.00
- General Damages 20,000.00
TOTAL N50,000.00
The plaintiff’s case was predicated on negligence and paragraph 12 of the Statement of Claim averred as follows:-
“12. The defendants by their negligence committed warehouse irregularities thereby incurring penalties and forfeiture of 300 cartons of the plaintiff’s Taittinger Champagne
PARTICULARS OF NEGLIGENCE
(a) Failing to take any or adequate or effective measures to ensure that customs duties payable on all the 1,000 cartons of Taittinger Champagne were paid over to the Department of Customs & Excise within a reasonable time.
(b) Failing to use their expertise (sic) knowledge to avoid incurring liabilities in the process of clearing the goods.
(c) Committing warehousing irregularities which led to the forfeiture of 300 cartons of Taittinger Champagne from their bonded warehouse.
(d) Releasing all the 1000 cartons of Taittinger Champagne to plaintiff when the defendant knew or ought to know that it was not proper to so release the goods at the time they did.
(e) Failing to ensure that 300 cartons of Taittinger Champagne belonging to the plaintiff were not forfeited for warehouse irregularities committed by defendants.”
The defendant in paragraph 4 of its Amended Statement of Defence denied the averments in paragraphs 9, 11, 12, 13. & 14 of the Statement of Claim and put the plaintiff to the strict proof of same. Paragraph 5 of the Amended Statement of Defence also denied the averment in paragraph 4 of the Statement of Claim and went on to aver that the defendant exercised reasonable care, diligence and competence in performing the contract.
At the end of the trial Johnson J. (as he then was) entered judgment for the plaintiff in items 1 & 2 of its claim and awarded N2,000.00 as damages for item 3.
On appeal to the Court of Appeal, the decision of the trial court was set aside and the plaintiff’s claim was dismissed in its entirety. This appeal is against the decision of the Court of Appeal.
In the brief of argument filed on behalf of the plaintiff the following issues were formulated as being the issues for determination by this Court. namely:-
a) Was the Court of Appeal right in holding that the defendant did not owe the plaintiff any duty of care
b) Was the Court of Appeal right in holding that the plaintiff was party to illegality and hence was barred from relief by the Courts
c) Was the Court of Appeal right in holding that the special damages were not proved
The issues formulated in the defendant’s brief would appear, on close examination to be similar, if, in effect not the same with those formulated for the plaintiff. Chief Akinbisehin adopted issue (b) and because of the attempt to distinguish the remaining two issues, I reproduce them hereunder, at least for the purpose of clarity:
a) Did the appellants establish negligence or breach of duty of care (if any) owed to the plaintiffs/appellant which resulted in damages, having regard to the pleadings and evidence on record
If the answer to the question is in the negative was the Court of Appeal not correct to have held that the particulars 12(b) (c) (d) have not been proved. If the answer to the question is in the affirmative was the Court of Appeal not correct in holding that the plaintiff was a party to illegality and hence was barred from the relief sought from the court.
b) Was the Court of Appeal correct in holding that the item of special damages awarded were not proved, having regard to the totality of the evidence and materials placed before the Court, in particular the Exhibits Q & R
On plaintiff’s issue (a), i.e. whether the Court of Appeal was right in holding that the defendant did not owe the plaintiff a duty of care, it was contended that the Court of Appeal confused the question of the existence of the duty of care with the question whether that duty had in fact been breached. It was further contended that in its analysis of the relationship between the parties the Court of Appeal failed to appreciate the core of the plaintiff’s case, to wit, that the breach of the duty of care was the non-payment of the customs duty by the defendant. It was emphasized that the portion of the judgment of the Court of Appeal where it held that:
“Is the respondent in such a legal relationship to the appellant in the Atkinian sense of a neighbour to whom a duty of care, the duty as to the removal of goods without payment of customs duty Put in another way, does the non-payment of duty create the duty of care by the appellant the breach of which resulted in damages to the respondent What is the relationship of the appellant and the respondent under the Customs and Excise Management Act 1958 and can there be said to be a statutory duly owed by the appellant to the respondent which has been breached by non-payment of customs duty on respondent’s goods and thereby resulted in damage to the respondent.”
amounted, in effect, to the court asking itself whether the breach of a duty of care could create that duty of care and that this approach, which led to the decision, was clearly wrong particularly bearing in mind that the court did not advert its attention to the admission by the defendant of the averment of the plaintiff in paragraph 4 of its Statement of Claim. It was finally argued that the Court of Appeal erred by introducing and discussing the issue of vicarious liability which neither party raised nor relied upon.
The plaintiff’s brief went further to complain about the lower court’s reference to and application of sections 73-78 and 136 and 137 of the Customs and Excise Management Act, 1958. While the brief discussed, at some length, the provisions of sections 136 and 137 of the Act, it failed to pinpoint the areas where the Court of Appeal went wrong on sections 73-78 of the Act.
Reference was made to Fridman’s Law of Agency pages 26-32 articulating that the concept of agency relates to property and contractual rights and has only limited relevance in tort. Reliance was placed on this position of the law to support the argument that the Court of Appeal was wrong in holding that the defendant was not negligent in the performance of its side of the contract.
On issue (b), i.e whether the plaintiff was a party to the defendant’s illegality, the brief cited the judgment of the lower court on page 153. lines 31-37 and concluded that was not a correct statement of the law: that the correct statement of the law is as stated in Sodipo v. Lemminkainen or (1986) 1 NWLR (Pt.15) 220 at (pages 232-233 paragraphs C to F. The brief then summarised the ratio in the Sodipo case as being (a) when a contract is ex facie illegal and (b) when it is not ex-facie illegal. In (a) the illegality need not be pleaded as a court would not close its eyes against an illegality as it is the duty of the court to refuse to enforce an illegality. In (b) however, where the illegality depends on the surrounding circumstances, then, as a general rule the court will not entertain the question unless it is raised in the pleadings. If, in such circumstance, evidence is led in support of the unpleaded illegality, such evidence goes to no issue and ought to be disregarded. In addition to the Sodipo case the brief cited the following three other authorities:-
George v. Dominion Flour Mills (1963) 3 NSCC 54 at page 57 (1963) 1 SCNLR 117:
Okagbue v. Romaine (1982) 13 NSCC 130 at page 137-138; and North Western Salt Co. v Electrolytic Alkali Co .. (1914-15) All E.R, 725.
Having stated the position of the law the brief then went on to argue that the illegality in the instant case, not being ex-facie, was not pleaded and that any evidence led in its support ought to have been disregarded as going to no issue.
The final issue taken up in the brief was on damages and the portion of the judgment of the Court of Appeal where it held that:
“no evidence was led to show (he value of the Naira equivalent of French Francs and that the figure of N70.oo per carton used by the trial court was a mystery.”
was attacked. In addition the brief attacked that finding of the Court of Appeal to the effect (that there was no evidence that customs duty was paid. The evidence of P.W.1, Exhibit C. the invoice for the whole consignment of 1.000 cartons showing the total cost price to be 380.428.60 French Francs, and Exhibit D, the debit note by the plaintiff’s bank in respect of the consignment showing the total price of the whole consignment to be 380, 428.60 French Francs at N7.60 = N50,556.39 were relied upon to support the submission that by the above calculations the Naira equivalent of the forfeited 300 cartons was N15,061.92 inclusive of other costs, such as bank charges, clearing costs, customs duty, etc. It was also argued that based on the above calculations and the evidence of P.W.1 the open market selling price of N9.50 per bottle has been amply proved.
On the question whether or not duty had been paid the brief cited paragraph 16(a) of the Statement of Defence where the defendant was alleged to have admitted receipt of the customs duty from the plaintiff and that in such a situation it was unnecessary for plaintiff to prove same.
In his oral arguments, Mr. O. Oyewole, for the plaintiff, adopted his brief and cited Agwuneme v. Eze (1990) 3 NWLR (Pt.137) 242 at page 256 paragraphs C and D; and Idehen v. Idehen (1991) 6 NWLR (Pt.198) 382 at page 424 paragraph G, page 432-433 on the issue of illegality. Section 79 of the Customs and Excise Management Act was also emphasised.
In the defendant’s brief of argument on the issue of negligence and breach of duty of care it was argued that the Court of Appeal properly considered and correctly concluded that on the totality of the evidence, negligence had not been proved. It was further argued that the Court of Appeal in discussing the issue of negligence did not in any way confuse itself as to whether or not non-payment of customs duty created a duty of care on the part of the defendant. The brief went on to submit that the discussion by the Court on the general principles of the law of negligence and the existence and breach of the duty of care could not be faulted. Reference was then made to paragraph 12(c), (d) and (e) of the Statement of Claim which the Court of Appeal held had not been proved by evidence based on o the fact that issues were joined in the pleadings.
Reference was further made to sections 136(2) and 137 of the Customs & Excise Management Act 1958 and paragraph 10 of the amended Statement of Defence to support the submission that the legal relationship between the parties was that of principal and agent. It was then contended that the consideration of Part IV, Sections 72-87 and 136 and 137 of the Customs and Excise Management Act, 1958 by the Court of Appeal was pertinent and relevant to a just decision of the appeal in the Court. The Act clearly makes a principal equally liable for any offence committed by an agent. In this regard it was argued that the illegal removal and handing over of all the 1000 cartons of champagne from the bonded warehouse to the plaintiff, with its active connivance and knowledge, rendered the plaintiff equally liable for the warehousing irregularities which resulted in both parties being penalised by the Customs Department.
On the argument of the plaintiff in the brief that illegality had not been pleaded it was submitted by reference to paragraph 12(c), (d) and (e) of the Statement of Claim that it had been pleaded. Indeed it was as a result of this that illegality was used in different forms and at different stages of the record. It was emphasised that paragraphs 10 and 13 of the Statement of Defence joined issues on the averment in paragraph 12(c), (d) and (e) of the Statement of Claim. It was finally submitted on this issue that the lower court had stated the law on illegality correctly and correctly applied it.
On the last issue of damages reliance was placed on the absence of and evidence on the rate of exchange of French Francs to Naira which ought to form the basis from which a conversion of the cost of the champagne from francs to Naira could be made. Reliance was also placed. in relation to the customs duty, on Exhibits Q. and R., being payment of duty on 700 cartons and demand for underpayment.
And in his oral arguments Chief Akinbisehin emphasised the failure of the plaintiff to prove negligence which the lower court found. He then went on to argue that paragraphs 12(b), (c) and (d) of the Statement of Claim clearly pleaded illegality and that defendant joined issues in paragraph 4 of the Statement of Defence. His final submission on this was that the plaintiff failed to prove this averment and that the lower court as perfectly justified in so holding.
Learned counsel argued that damages too had not been proved. Mr. Oyewole, for the plaintiff, made a lot of fuss about negligence and whether the defendant owed a duty of care to the plaintiff and whether or not that duty had in fact been breached. At the onset of this judgment I pointed out that the plaintiff’s claim, all along, was based on negligence. In my view it should have been based in contract since the relationship between the parties was purely contractual, they being principal and agent. It therefore follows that any breach of the agreement between the parties should have been a claim for breach of the contract which could be remedied, inter alia by the award of damages. I have no doubt whatever in my mind that the plaintiff’s remedy lay in a claim for breach of contract and not in a claim for damages in negligence. Accordingly all the discussion by the Court of Appeal, all the arguments of both learned counsel on the subject of negligence, existence and breach of the duty of care was a completely wrong approach. With utmost respect, if the learned trial Judge and the Justices of the Court of Appeal had correctly adverted their minds to the true legal relationship of the parties, they would have appreciated this point.
Be that as it may, suppose the claim could properly have been brought in tort, the issue of illegality would have settled the dispute of the parties. The argument of Mr. Oyewole that illegality had not been pleaded is not tenable, having regard 10 paragraphs 12(c), (d) and (e) of the amended Statement of Claim and paragraphs 8, 9 and 10 of the amended Statement of Defence. There was a clear and uncontradicted evidence that the plaintiff was a party to the removal of all the cartons of champagne with the knowledge that duty had not been paid on them. Indeed when it became obvious to the plaintiff that its participation in the illegal removal of the champagne would cause financial loss to it, Mr. Barve, plaintiffs General Manager addressed Exhibit H. to the Director, Board of Customs pleading for the release of the seized cartons of champagne. Exhibit H. is further proof that plaintiff knew that importation of champagne into the country was banned. There was also evidence that in addition to Exhibit H. Mr. Barve and a staff of the defendant visited the Customs Department on a few occasions to discuss the release of the imported but banned goods – see Exhibits J. and H. and the evidence of D.W.1. There could not be any doubt that the plaintiff was an active party in the illegal act of the defendant. In these circumstances the question that readily comes to mind is whether a principal, who is an active and willing party to an illegal act of his agent, can maintain an action in tort against the agent in a transaction in which a legislation makes the principal equally liable for that illegal act The answer to this question must be and is in the negative. I am of the firm view that the Court of Appeal was right in holding that the plaintiff, having actively participated in the defendant’s illegal act should not be allowed to reap any benefit from that illegal act.
This ought to dispose of the appeal but for the issue of damages over which Mr. Oyewole, for the plaintiff, raised so much dust. I have compared the submissions of learned counsel with the evidence adduced at the trial court and the judgment of both lower courts and have come to the conclusion that the Court of Appeal was right in its conclusion that “no evidence was led to show the value of the Naira equivalent of French Francs and that the figure of N70.00 per carton used by the trial court was a mystery”.
Mr. Oyewole in his arguments relied on the evidence of P.W.1, and Exhibits C. and D. for the submission that the combined effect of the Sewas to-show the naira equivalent of French Francs. Clearly the evidence of P.W. 1 did not state the rate of exchange of French Francs of the Naira. The contents and entries in Exhibit C, B and D. were not brought out and examined in open court by the witness in his evidence in chief or in cross-examination. Indeed there is nothing in the record to suggest that the learned trial Judge relied on Exhibits C. and D. to convert the cost of the goods from French Francs into naira. No such exercise was done by any of the witnesses or by the trial Judge.
The arguments of Mr. Oyewole would appear to suggest that the Court of Appeal should have examined the entries in Exhibits C. and D. and come up with the Naira equivalent of French Francs. Learned counsel did not urge the trial court or the Court of Appeal to undertake such exercise. If such exercise was performed by either court, it would have been wrong as it would have amounted to doing what the ratio in Muhammadu Duriminiya v. Commissioner of Police (1961) NRNLR 70, approved and adopted by this Court in Bornu Holding Co. Ltd v. Alhaji Hassan Bagoco (1971) Vol. 7 NSCC 321 at page 325 says a court should not do.
See also R. v. Wilcox (1961) 2 SCNLR 296; (1961) All NLR 631 at page 633, and Owe v. Oshibanjo (1965) 1 All NLR, 72 at page 75 on the same point.
The result of all this is that the appeal lacks merit and it is hereby dismissed. The decision of the Court of Appeal setting aside the decision of the trial court and dismissing the plaintiff’s claim is hereby affirmed with N1,000.00 costs to the defendant.M. L. UWAIS, J.S.C.: I have had the opportunity of reading in draft the judgment read by my learned brother, Mohammed, J.S.C., I entirely agree with him that the appeal lacks merit. I too will, therefore, dismiss it with N1,000.00 costs to the respondent.
SC.138/1988
