Stephenson Standard Company Limited V. Yifa Nigeria Limited (2012)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

HELEN MORONKEJI OGUNWUMIJU, J.C.A. (Delivering the Leading Judgment)

This is an appeal against the judgment of Hon. Justice Oyefeso sitting at the High Court of Lagos, Lagos Division, delivered on the 16th of March, 2006. The facts that led to this appeal are as follows:

The Claimant’s, now the Appellant’s case at the trial court was that it had entered into a contract of sale of insulation tapes with the Defendant, now the Respondent. The tapes were bought by sample by the Appellant from the Respondent and when the goods were delivered, they did not conform with the sample. The parties then agreed in writing to explore the commercial possibilities of the product and that if the exercise failed, the Appellant would recover its money from the Respondent and return the tapes to them. However, when the exercise failed, the Respondent refused to refund the Appellant’s money. The Appellant then instituted an action at the trial court against the Respondent.

Issues were joined. The Respondent claimed that it acted as an agent of a foreign principal. The trial court found in favour of the Appellant on all issues but postponed its awards which it made contingent upon the Appellant returning the unsold goods/tapes to the Respondent in good condition. The Appellant, being dissatisfied with this judgment has brought this appeal.

The Appellant brought an application before the court dated the 16th day of September, 2009 and filed on the 18th of September, 2009 praying this court for an Order that the Appeal be heard on the Appellant’s brief already filed and served on the Respondent. The Application was granted on the 21st of April, 2011. To all intents and purposes the Respondent is unable and unwilling to contest this appeal. The Appellant’s brief was dated 23rd of May, 2007 and filed on the same day.

Appellant’s counsel, James C. Ezike Esq. identified three issues for determination as follows:

1. In the circumstances of this case, was the trial court right to suo motu raise and determine that the refund claimed by the Claimant should be made contingent upon the claimant returning the dis-conform bulk of the goods to the Defendant in good condition or at all?
2. Whether the trial court was right to refuse to award the profit claimed by the Claimant even after finding that “the Claimnt testified that it would have made 100% profit on the transaction?
3. Whether the trial court was right to postpone the payments of interest till the return of the said goods to the Defendant?

Issues 1 and 3 address the same issue and as such I have decided to consolidate them. There are therefore only two issues for determination in this Appeal, they are as follows:

1. Whether the trial court was right in the circumstances of this case to hold that the refund claimed by the Appellant and the interest on same should be paid after the Appellant has returned the ‘goods not sold’ to the Respondent in good condition?
2. Whether the trial court was right to refuse to award the profit claimed by the Appellant?

ISSUE ONE

Counsel to the Appellant argued that the trial court having rightly found that the Respondent was in breach of the agreement between the parties, was wrong to have held that the refund of the Appellant’s money paid for the insulation tape and interest thereon should be made contingent upon the return of the remaining tapes in good condition as this was not an issue canvassed before the court at all. Counsel argued that this issue was raised suo motu by the trial court without inviting the views of the parties on this point thus violating the Appellant’s constitutional right to fair hearing. Counsel cited Nwokoro v. Onuma (1990) 3 NWLR Pt. 136 Pg. 22 at 33; Adegoke vs. Adibi (1992) 5 NWLR Pt. 242 Pg. 410; Ejowhomu v. Edok-Eter Mandilas Ltd (1986) 5 NWLR Pt. 39 Pg. 1; Ajao v. Ashiru (1973) 11 SC 23; Kuti v. Balogun (1978) 1 SC 53 at pg. 60.

Counsel submitted that since there was no counter-claim by the Respondent demanding the exchange or return of the goods in question as a condition precedent or subsequent to its refund of the Appellant’s money, the trial court erroneously made a new case for the Respondent different from that made by it. Counsel cited Aseimo v. Amos (1975) 2 SC 57; Olatunji v. Adisa (1995) 2 NWLR Pt. 376 Pg. 167; Ota Sons Ltd v. Idris (1999) 6 NWLR Pt. 606 Pg. 330; Ekpenyong v. Nnyong (1975) 2 SC 71 at Pg. 80-81.

Counsel claimed that the decision was perverse because the written Agreement between the parties states clearly that it is the responsibility of the Respondent as Party B to pay for the remaining goods in good condition and to collect the goods from the Appellant as Party A. Counsel cited Atolagbe v. Shorun (1985) 4 S.C. (Pt. 1) 250 at page 282.

Counsel also submitted that the Appellant had rejected the goods upon arrival before the parties agreed to explore its commercial possibilities. After the exercise failed, counsel submitted that the Appellant subsequently rejected the goods again verbally and by its solicitor’s letter dated 8th November 2001-Exhibit P14. Counsel submitted that the Respondent resiled from all previous agreements and categorically rejected the Claimant’s invitation to collect the goods back. Counsel then argued that the trial court had imposed on the Appellant the obligation to return the goods without imposing a corresponding obligation on the Respondent to accept the goods. Counsel submitted that the judgment of the trial court should not be made in vain as all post judgment efforts to return the goods have failed for lack of co-operation by the Defendant and its solicitors.

Counsel further argued that though Order 35 Rule 4 of the High Court of Lagos State (Civil Procedure Rules) 2004 allows the court to award post judgment interest and order the time in which it should be paid, it however does not give the court the right to postpone payment of the said interest. Counsel urged this court to reverse the decision of the trial court and award the relief claimed by the Appellant without any condition precedent.

The Appellant’s case at the trial was that the Respondent had breached the contract entered into by both parties. It should be noted at this stage, that there were two contracts between the parties. Exhibit P1 is the contract No.YNL010216, the initial contract of sale entered into by the parties for the supply of 440, 000 rolls of PVC Insulation tapes, “Globe Brand”. Exhibit P3 is the agreement entered into by the Appellant and the Respondent signed by the Appellant and one ‘Melody’, an official of the Respondent Company on behalf of the Respondent. The trial court found, and this is not in issue in this court, that Exhibit P3 was made to salvage the breach of Exhibit P1 by the Respondent. The Appellant had alleged breach of both Contracts and it is apparent from the proceedings at the trial court that the reliefs sought were based on this alleged breach of contract.