Rhein Mass Und See & Ors V. Rivway Lines Limited (1998)

LAWGLOBAL HUB Lead Judgment Report

OGUNDARE, J.S.C.

The plaintiff is a shipping company incorporated in Nigeria; it has its head office in Lagos. The plaintiff offers its services to other shipping companies in and outside Nigeria. The 1st defendant (hereinafter is referred to as defendant simpliciter) is a German shipping company with its registered office in Breman, Germany. The 2nd defendant is a German bank.

In September 1973 the plaintiff and the 1st defendant entered into a joint venture agreement by which they established a joint venture shipping company known as North Europe West African Lines Limited (NEWALINES, for short). Under the agreement, the plaintiff was appointed general agent to all NEWALINES Vessels that called at West African Ports and was entitled to remuneration by way of agency commission of 1.5 per centum for all inward and outward bound freights. In February 1978, the said joint-venture agreement was mutually terminated and, upon accounts being taken of the joint venture business, the plaintiff claimed that a sum of Dm 262,800 was due and payable to it for services rendered under the agreement to various vessels.

As the defendant would not pay, the plaintiff on December 23, 1986 issued a writ of summons out of the registry of the Federal High Court Lagos claiming, as per paragraph 46 of its statement of claim filed on 12th March 1987, as hereunder:

“(a) The sum of DM 262,800 plus interest at the rate of 15% until judgment and 5% thereafter until the total judgment debt is liquidated jointly and severally from the 1st and 2nd defendants and

(b) The sum of N30,120,33 from the 1st defendant as per the writ of summons OR 65% of the sum of N30,120,33, being the 1st defendant’s share of the loss and/or litigation/Court expenses on the aforesaid NEWALINES ‘vessels operation,”

Rather than file a statement of defence in reply to the plaintiffs pleadings, the defendant brought a motion praying the trial High Court for orders:

“I. That the processes originating this suit, that is to say the particulars of claim and statement of claim be set aside on the grounds that even if all the facts alleged therein were true (which is not conceded) the plaintiff cannot maintain these proceedings because the cause of action is time-barred.

(II) That this Suit be set aside on the grounds that the court lacks jurisdiction to adjudicate the merits of this case, the case not been (sic) one properly cognizable within S 7 of the Federal High Court Act.

Alternatively

(III) That these proceedings be stayed on the grounds that the subject matter of dispute vi: Monies lodged in the 2nd defendant’s Bank in West Germany, is not within the jurisdiction and the appropriate and convenient Forum for the proper adjudication of this suit is West Germany.

(IV) That these proceedings be transformed to the Lagos Stale High Court on the grounds that this Honorable Court lacks jurisdiction to adjudicate the merits of the plaintiffs claim by virtue of S 7 of the Federal High Court Act.”

After taking arguments from learned counsel for the parties, the learned trial Judge, in a well considered ruling, found:

“(i) On the issue of jurisdiction, I hold that this matter is one in respect of which this court is clothed with Admiralty jurisdiction under section 7(1)(d) of the Federal High Court Act 1973; the subject matter being one concerning disbursement in respect of ships – a matter concerning which a High Court in England will under section 1(1)(b) of the Administration of Justice Act (of England) 1956 assume Admiralty jurisdiction:

(ii) On the issue of whether this action is statute-barred, I find that notwithstanding that the cause of action fully arose in March 1978 following the dissolution of the contract between the parties and the taking of accounts, the delay of 8 1/2 years (to 3rd December 1986) before the action was instituted, is not fatal to the action since it is an Admiralty cause which section 7(3) of the Limitation ACI 1966 exempts from the 6-year limitation period stipulated under section 7(1) of the Limitation Act 1966; and

(iii) The contract, between the plaintiff and the 1st defendant whereby the plaintiff was to disburse funds in Nigeria in Naira later to be reimbursed in West Germany in Dms, is, without the approval of the Minister of Finance, clearly in breach of the provisions of the Exchange Control Act 1962, particularly sections 3, 7 and 9 being founded on an illegality and for that reason, unenforceable through any court in Nigeria,”

and adjudged-

‘This application therefore succeeds only on the ground that it is unenforceable on account of illegality. It fails on the grounds of jurisdiction and time limitation.

The substantive action is therefore dismissed.”

Dissatisfied with parts of the ruling, the parties appealed to the Court of Appeal. The plaintiff appealed against that part of it which declared the 1978 joint venture agreement illegal and the defendant appealed against the part that held that the action was not statute-barred. The Court of Appeal allowed plaintiff’s appeal and ordered that “the case be retried before another Judge of the Federal High Court who should order the defendants to file a statement of defence and where necessary allow parties to adduce evidence with a view to interpreting the provisions of the Exchange Control Act. 1962 to the peculiar facts of this case in ascertaining whether the said law applies or not.” The court dismissed the defendant’s cross appeal thus affirming the decision of the trial High Court that the action was not statute-barred.

The defendant has further appealed to this court against that part of the judgment of the court below declaring the action not statute-barred. The Notice of Appeal contains two grounds of appeal which, without their particulars, read as follows:

“1. The learned justices of the Court of Appeal erred in law in holding that the respondent (sic) suit was an admiralty action enforceable in rem even though it was found to be an admiralty action in personam.

2. The Court of Appeal was wrong to hold that S.7(3) of the Limitation Act 1966 applied to save the respondent’s case from the 6 year time bar.”

And in the written brief of argument filed pursuant to the rules of this court the defendant set out the following two questions as calling for determination in this appeal.

“(i) Does the Limitation Decree No. 88 of 1966 that exempts from it’s six year time-bar ’causes of action within the Admiralty jurisdiction enforceable in rem include within this exemption ’causes of action enforceable in personam’

(ii) If not, what is the effect of this on the judgment of the Court of Appeal which establishes that so long as a claim is enforceable in rem, a plaintiff’s action need not be an action in rem before S.7(3) of the Limitation Act applies.”

The plaintiff formulated the questions as follows:

1. Whether the respondent’s cause of action is an admiralty cause enforceable in rem. In other words, could the vessels in connection with which the cause of action (disbursements were made) arose, have been arrested by a proceeding in rem at the instance of the respondent if they were within jurisdiction at the time this action was commenced against the appellants.
2. Whether a Plaintiff having a cause of action within the admiralty jurisdiction enforceable in rem can sue in personam.
3. Whether a Plaintiff having a cause of action in admiralty enforceable in rem must sue in rem before section 7(3) of the Limitation Act 1966 applies:’

The two sets of questions raise substantially the same issue, and that is, whether Plaintiff’s action comes within the exemption clause in section 7(3) of the Limitation Act, 1966.

The sum total of the submissions for the Defendant is that Plaintiffs action is an Admiralty action in personam which is outside the purview of section 7(3) of the Limitation Act. Mr. Agbakoba, learned counsel for the Defendant, in his oral submission before us, concedes it that the cause of action in this case is one enforceable in rem. While further conceeding that there is a difference between “action” and “cause of action” he nevertheless urges us to interpret the latter expression as used in section 7(3) of the Limitation Act to mean action.

It is, on the other hand, contended in the brief of the Plaintiff that the claim being one cognisable within section 1(1)(p) of the Administration of Justice Act 1956 (England) and section 2(2)(p) of the Admiralty Jurisdiction Act, it is a cause of action in admiralty enforceable in rem within the con of section 7(3) of the Limitation Act 1966. It is further submitted that provided that the claim is enforceable in rem, the action itself need not be in rem before section 7(3) applies. It is explained that the Plaintiff need not to have sued in rem before claiming the benefit under section 7(3).

The success or otherwise of this appeal revolves on the interpretation to be put on section 7(3) of the Limitation Act, 1966. In order to resolve this issue it is better to set out section 7 in extenso. It reads:

“7.(1) The following actions shall not he brought after the expiration of six years from the date on which the cause of action accrued-

(a) actions founded on simple contract;

(b) actions founded on quasi-contract;

(c) actions to enforce a recognizance;

(d) actions to enforce an arbitration award where the arbitration agreement is not under seal or where the arbitration is under any enactment other than the Arbitration Act;

(e) actions to recover any sum recoverable by virtue of any enactment other than –

(i) a penalty or forfeiture or sum by way of penalty or forfeiture.

(ii) a sum due to a registered company by any member thereof under its articles of association.

(iii) an amount recoverable against concurrent wrong doers under any civil liability enactment for the time being in force relating to concurrent wrong doers.

(2) Subsection (1) of this section shall apply to an action to recover a seaman’s wages.

(3) Save as provided in subsection (2) of this section, this section shall not apply to any cause of action within the Admiralty jurisdiction which is enforceable in rem.

(4) Subject to the provisions of section 8 of this Decree, an action founded on tort shall not be brought after the expiration of six years from the date on which the cause of action accrued.

(5) An action for an account shall not be brought in respect of any matter which arose more than six years from the commencement of the action.

(6) No arrears of interest in respect of any debt shall be recovered after the expiration of six years from the date on which the interest became due,”

(Italics are mine for emphasis)

In my respectful view what is barred after the statutory period is the action. But the statutory period is reckoned from the accrual of the cause of action giving rise to the action. One must, therefore, begin by defining the word “action” and the expression “cause of action”. The word “action” is defined in section 68 of the Act as follows:

“‘action’ includes any proceeding (other than a criminal proceeding) in a court established by law”.

The expression “cause of action” is not defined in the Act, it has, however, been judicially defined in a number of cases. In Savage v. Uwaechia (1972) 3S.C. 214, 232, (1972) ANLR 255, 261 Fatayi-Williams JSC (as he then was) delivering the judgment of this court, had this to say:

“A cause of action is defined in Stroud’s Judicial Dictionary as the entire set of circumstances giving rise to an enforceable claim. To our mind, it is, in effect, the fact or combination of facts which give rise to a right to sue and it consists of two elements – the wrongful act of the defendant which gives the plaintiff his cause of complaint and the consequent damage. As Lord Esher said in Cooke v. Gill (1873) L.R. 8C.P. 107 and later in Read v. Brown (1888)22Q.B.D. 128 (C.A.). It is every fact it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court. (See also Kusada v. Sokoto Native Authority, S.C. 131/68 delivered on 13th December, 1968, where the definition in Read v. Brown (supra) was referred to with approval.”

See also Kusada v. Sakata Native Authority (1968) 1 All NLR 377; (1968) ANLR 366; Aliu Bello & Ors. v. Attorney-General Oyo State (1986) 5NWLR (Pt. 45) 828 where Karibi- Whyte JSC at p.876 observed:

“I think a cause of action is constituted by the bundle or aggregate of facts which the law will recognise as giving the plaintiff a substantive right to make the claim against the relief or remedy being sought. Thus the factual situation on which the plaintiff relies to support his claim must be recognised by the law as giving rise to a substantive right capable of being claimed or enforced against the defendant. In other words, the factual situation relied upon must constitute the essential ingredients of an enforceable right or claim – see Trower & Sons Ltd. v. Ripstein (1944) A.C. 254 at P. 263; Read v. Brown 22 Q.B.D. 128; Cooke v. Gill (1873) L.R. 8 C.A. 107; Sugden v. Sugden (1957) All E.R. 300; Jackson v. Spittal (1870)L.R. 5 C.P. 542. Concisely stated, any act on the part of the defendant which gives to the plaintiff his cause of complaint is a cause of action.”

see further: Tukur v. Government of Gongola State (1989) 4 NWLR (Pt. 117) 517; Thomas & Ors. v. Olufosoye (1986) 1 NWLR (Pt. 18) 669.

Turning to the case on hand, plaintiff claims that it made some disbursements on account of various vessels, as ship agent, for and on behalf of the defendant and has not been reimbursed. These are the facts giving rise to this cause of action. As found by the two courts below and as conceded by Mr. Agbakoba, and quite rightly in my view, this cause of action is one falling within the admiralty jurisdiction of the Federal High Court – See S.1. (1)(p) Administration of Justice Act (England) and sec. 2(2) Admiralty Jurisdiction Act, No. 59, 1991; The WestPort (No.3) (1966) 16 L1 L.R. 342; King Ren Shipping and Trading Co. Ltd. v. Amatameso Shipping Agencies (1979) FNLR 182. It is conceded before us by Mr. Agbakoba, that in the enforcement of this cause of action, plaintiff could proceed either against the vessels concerned or against their owner(s) or both. Where plaintiff proceeds against the vessel, the action is one in rem and where he proceeds against the owner, the action is one inpersonam. Defining the expression “action inpersonam, Coker J.S.C., delivering the judgment of this court in Nigerian Ports Authority v. Panalpina (1973) 5 SC. 77 at Pp. 96-97; (1973) ANLR 408, 422 observed:

“Etymologically an action inpersonam is an action brought against a person, an action to compel to do or not to do a particular thing or take or not to take a particular course of action or inaction. Actions for damages in tort or for breaches of contract are clearly directed against the person as opposed to actions which are brought for the purpose of declaring or challenging a status, like proceedings under the matrimonial laws of the country or of legitimacy or an admiralty action directed against a ship or the res (and so known as an action in rem) or the like. Generally therefore, all actions which are aimed at the person requiring him to do or not to do or to take or not to take an action or course of conduct must be and are actions inpersonam.”

And in Anchor Ltd. v. The Owners of the ship Eleni 1 PSC 14, 15; Nigerian Shipping Cases Vol.1 p. 42, Foster Sutton, FCJ defined “action ill rem” as follows:

“An action in rem is one in which the subject matter is itself sought to be affected, and in which the claimant is enabled to arrest the ship or other property, and to have it detained, until his claim has been adjudicated upon, or until security by bail has been given for the amount, or for the value of the property proceeded against, where that is less than the amount of the claim.”

It follows that plaintiff’s cause of action is one enforceable in rem. In my respectful view, the fact that this cause of action can be enforced by action in personam where plaintiff proceeds, as in this case, against the defendant, owner of the vessels concerned in the joint venture agreement, would not alter the nature of the cause of action. See R. v. Judge of City of London Court (1892) 1 QB273, 295 where Lord Esher. M.R. observed –

“If there is a collision between two ships on the high seas, that the Admiralty Court has jurisdiction to deal with the liability of the owners of those ships is true, and it can exercise that jurisdiction either by action in rem or by action in personam. Given the jurisdiction, the question whether the action is to be in rem or in personam is one of mere procedure.”

That being so, the conclusion I reach is that the cause of action in this case is one enforceable in rem.

I now turn to the Limitation Act. While sub-section (I) of section 7 prohibits the bringing of an action after the expiration of the statutory period therein provided, sub-section (3) creates an exemption from the provisions of sub-section (I). Sub-section (3) for ease of reference, reads:

“Save as provided in sub-section (2) of this section, this section shall not apply to any cause of action within the Admiralty jurisdiction which is enforceable in rem. (Italics are mine)

Mr. Agbakoba would want this court to interpret “cause of action” to mean “action”. But such an interpretation will only lead to absurdity. It is a cause of action that is enforceable in rem and not an action. Moreover, it is a cardinal rule of interpretation which has been accepted in numerous cases in this country, that if the words of the statute are in themselves precise and unambiguous, no more is necessary than to expound those words in their natural and ordinary sense, as the words themselves in such case best declare the intention of the legislature. See: Asuquo v. The State (1967) 1 All NLR 123; Adejumo v. Governor of Lagos State (1972) 3 SC. 45: Lawal v. G.B. Ollivant (1972) 3 SC 124; Aya v. Henshaw (1972) 5 SC. 87; Estate of Soule v. Johnson (1974) 12 SC 121; Ifezue v. Mbadugha (1984) 1 SCNLR 427; Awolowo v. Shagari (1979) 6-9 SC 51: Toriola v. Williams (1982) 7 SC 27; IBWA v. Imano (Nig. ) Ltd. & Anor. (1988) 3 NWLR (Pt. 85) 633; NBN Ltd. v. Weide & Co. (Nig. Ltd. (1996) 8NWLR (Pt. 465)150; Obeta v. Okpe (1996) 9 NWLR (Pt. 473) 401. I do not think there is a place for the incorporation of the Mischief Rule in this case. The combined effect of sub-sections (I) and (3) of section 7 will not support the kind of interpretation suggested by Mr. Agbakoba.

Sub-section (3) exempts a cause of action within the Admiralty jurisdiction which is enforceable in rem from the provisions of sub-section (1) of section 7 of the Act. And as plaintiff’s cause of action in the instant case is one within the Admiralty jurisdiction which is enforceable in rem, it follows that this action taken by the plaintiff to enforce its right. though in personam, is exempted from the provisions of section 7(1). I agree with the two courts below that plaintiffs action taken 81/2 years after the accrual of the cause of action in this case is not statute-barred.

Consequently. I find no merit in this appeal which I hereby dismiss with N10.000.00 (ten thousand Naira) costs. As there is no appeal against that part of the judgment of the court below on the question of illegality. I say nothing on that issue except to say I affirm the order made by the court below.

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SC.221/1993