Tskj Nigeria Limited V. Otochem Nigeria Limited (2018)

LAWGLOBAL HUB Lead Judgment Report

IBRAHIM TANKO MUHAMMAD, J.S.C.

The respondent herein, was the plaintiff at the High Court of Rivers State (trial Court). It is an incorporated limited liability Company which carries on the business of marine construction and equipment leasing.

The appellant herein, was the defendant at the trial Court. It is a limited liability company. It was the case of the respondent at the trial Court that sometime in February, 1997; it entered into a contract with the appellant for the supply of a houseboat for the temporary use of its staff. It was allegedly agreed that the appellant would make an advance payment of N6,288,000.00 representing the rental value at the rate of N100,000 per day for two months as well as the cost of transporting the houseboat from Warri to Bonny. Certain modifications were also to be made to the boat before delivery. It was contended that the terms and conditions of the contract were spelt out in a Local Purchase Order (LPO) issued by the appellant to the respondent.

It was the respondent’s case before the trial Court that after the houseboat was delivered, the appellant requested

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that it be upgraded to European executive standard. Pursuant to this request the respondent alleged that it carried out further modifications to the boat at a cost of N12m. Upon completion of the modifications however, the appellant refused and/or neglected to settle the respondent’s bill. The respondent contended that the houseboat remained in the appellant’s possession for a period of 148 days before it was forced to retake possession thereof.

The appellant on the other hand, denied the respondent’s claims and contended that it did not take delivery of the houseboat because the respondent failed to meet the delivery deadline and also because it did not meet the required standard.

The respondent consequently instituted an action before the High Court of Rivers State, Port Harcourt Division. In its writ of summons at pages 1 – 3 of the printed record it sought the following reliefs against the appellant:

“a) N14,800,000.00 (Fourteen Million, Eight Hundred Thousand Naira only) representing hire rentals for 148 days (26th March, 1997 – 20th August 1997 inclusive).

b) N12, 000,000.00 (Twelve Million Naira Only) special damages.

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(c) N40, 000,000.00 (Forty Million Naira only) general damages.”

At the conclusion of the trial, the learned trial judge entered judgment in favour of the plaintiff/respondent herein as follows:

1. The… special damages for the sum of N12,000,000.00.
2. The sum of N6,288,000.00 which was the money the defendant ought to have paid in advance before or at the delivery of the boat.
3. Daily hire for 2 months and 28 days on invoice No. 0072 for the sum of N8, 800,000.00.”

On the whole, judgment was entered for the plaintiff for a total sum of N32,088,000.00. The plaintiff was also entitled to costs which was assessed and fixed at N3,000.00 (Three Thousand Naira).

The appellant was dissatisfied with the judgment. He appealed to the Court below.

The Court below allowed the appeal in part. It set aside that part of the trial Court’s judgment awarding the sum of N12m to the respondent as special damages.

Dissatisfied further, the appellant filed its appeal to this Court. Learned counsel for the respective parties settled briefs of argument.

Learned counsel for the appellant set out the following issues for determination:

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“3.1.1 Whether the High Court of Rivers State has the requisite jurisdiction to entertain the suit number PHC/1414/98 (Ground One of the Amended Notice of Appeal)

3.1.2 Whether the Court of Appeal properly considered and evaluated the evidence adduced in the case before reaching the conclusion that there was a valid and enforceable contract between the parties (Grounds two and three of the Notice of Appeal).

3.1.3 Whether the Court of Appeal was right to have held that the respondent was entitled to the sum of N6, 288,000,00 being the money that the respondent ought to have been paid in advance before or at the delivery of the houseboat

(Ground four of the Notice of Appeal)”

Learned counsel for the respondent set out the following two issues for determination:

“Whether a claim strictly for payment of accrued hire rentals of a houseboat and general damages for breach of the contractual term of payment by one of the parties is a claim that falls within the admiralty jurisdiction exclusively vested on the Federal High Court as to rob the High Court of Rivers State of jurisdiction to entertain such

a claim. (Arising from ground 1).

Whether there are strong and cogent legal grounds made out by the appellant to warrant the Supreme Court to reverse the concurrent findings of fact by the lower Court that there was a valid and enforceable contract between the parties which was breached by the appellant.

(Encompassing grounds 2, 3 and 4).

In his submissions on issue one, the learned counsel for the appellant set out the provisions of Section 251(1)(g) of the Constitution which confers admiralty jurisdiction on the Federal High Court. lt stated that the admiralty jurisdiction conferred on the trial Court is as defined by the Admiralty Jurisdiction Act, 1991, Cap. A5 Laws of the Federation of Nigeria, 2004 (AJA). He set out Sections 1(a); 2(3)(f) of the AJA; 272 of the Constitution of the Federal Republic of Nigeria. Learned counsel for the appellant argued that applying the foregoing principles to the present case, and it is obvious from the statement of claim, the respondent’s claim before the High Court of Rivers State arose out of an agreement for the hire of the houseboat “Prince ll.” He argued further that a houseboat falls squarely

within the definition of a ship. An agreement for the hire of same is an agreement for the hire of a ship. Thus, by a combined reading of Section 251(1)(g) of the Constitution of Federal Republic of Nigeria, 1999, and Sections 1(1) (a) and 2(3)(f) Admiralty Jurisdiction Act, the respondent’s claim falls within the exclusive admiralty jurisdiction of the Federal High Court.

Further, the learned counsel for the appellant set out and made a comparison of Sections 272 of the Constitution of Federal Republic Nigeria, 1999 which confers general jurisdiction on a State High Court and 251 of the same Constitution which confers exclusive jurisdiction on Admiralty and matters related thereto, on the Federal High Court. He submitted that the Rivers State High Court did not have the requisite jurisdiction to entertain the suit filed before it, No. PHC/1414/98.

Learned counsel for the appellant urged this Court to find and declare the proceedings conducted by the Rivers State High Court a nullity and to strike out the appeal.

My noble lords, in consideration of an issue that touches on the jurisdiction of a Court of law, (issue No.1 herein) it always

becomes pertinent to re-state the jurisdiction of the Court under scrutiny. Learned counsel for the appellant and learned counsel for the respondent, from their respective briefs of argument, are in agreement that Section 272 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) (herein after referred to as Constitution of the Federal Republic of Nigeria, 1999) is the Section that confers GENERAL jurisdiction on a State High Court. The Section provides:

“Subject to the provisions of 251 and other provisions of this Constitution, the High Court of a State shall have jurisdiction to hear and determine any civil proceedings in which the existence or extent of a legal right, power, duty, liability, privilege, interest, obligation or claim is in issue.

It is the submission of learned counsel for the respondent that the jurisdiction of the High Court of Rivers State, being a superior Court of record, is determined by the nature of the claimant’s claim in relation to the constitutional provisions establishing the Court. It is the claimant’s claim as endorsed in the writ of summons and statement of claim that the Court

considers to determine whether or not it has jurisdiction to entertain the action. Learned counsel cited and relied on the case of Attorney General of the Federation v. Guardian Newspapers Ltd. (1999) 5 SC (Pt.lll) 59. He argued further that in determining whether this appeal falls within the jurisdiction of High Court of Rivers State or that of the Federal High Court, a critical appraisal of the claims endorsed on the respondent’s writ of summons and statement of claim together with the constitutional provisions establishing both Courts, is imperative.

I am in complete agreement with the correct statement of the law as stated by the learned counsel for the respondent. This Court has already held that it is only on careful examination of the pleadings filed by the parties in a cause or matter namely the statement of claim not the defence that the Court can ascertain, whether or not the Court has jurisdiction. See: Trade Bank Plc v. Benilux (Nigeria) Ltd (2003) 5 SC 1.

The claims of the plaintiff at the trial Court as per paragraph 15 of his amended statement of claim reads:

a) N14, 800,000.00 (Fourteen Million, Eight Thousand (sic:

Eight Hundred Thousand) Naira only) representing hire rentals for Houseboat (Prince III) for 148 days (26th March, 1997, 20th August, 1997) inclusive.

b) N12, 000,000.00 (Twelve Million Naira only) special damages

c) N40, 000,000.00 (Forty Million Naira only) general damages.”

Facts in support of the claim are pleaded in the plaintiffs amended Statement of Claim particularly in the following paragraphs:

“4. On or about the 25th day of February, 1997, the Defendant issued to the plaintiff a local purchase order No- PH63339700331 for the supply on hire(sic) a House boat (Prince III) on a daily-rental of N100,000.00 (One Hundred Thousand Naira only). The defendant is hereby given notice to produce the original of the Local Purchase order in its Possession.

5. The Local Purchase Order pleaded in paragraph 4 above among others, contained specifications for the House Boat and conditions of the hire contract.

6a. Following the delivery of the House Boat, the Defendant asked for further modifications of the House Boat to meet its senior staff standard by letter dated 31st March, 1997.

6b. The plaintiff carried out the additional

modification required by the defendant while the House Boat was in possession of the Defendant and completed same about nine (9) days later.

14. The plaintiff states that when all efforts to recover arrears of rentals from the defendant failed, it took steps and retook possession of the House Boat on 20th August, 1997, following defendant’s breach of the terms of the hire agreement.
15. By reason of the said breaches on the part of the defendant, the plaintiff has suffered loss and damage and the plaintiff claims….” See pages 21- 22 of the record.”

Paragraph 14 of the Amended statement of claim of the plaintiff shows that the transaction entered by both the respondent/plaintiff and the appellant/defendant was that of a Hire agreement which was breached by the appellant/defendant.

Some few findings made by the learned trial judge are in support of the averment in paragraph 14 of the amended statement of claim:

“From the pleadings of both parties and its evidence before this Court it is correct that the defendant wanted the House boat and had discussions with the plaintiff here in Port Harcourt and subsequently in Bonny.

I am satisfied that following the approached (sic) made by the defendant to the plaintiff about the month of February one Mr. Hart a younger brother of Abbey Hart met the plaintiff and that he was directed to the plaintiff in respect of House Boat namely in connection of hiring of House boat. They discussed and followed same up by linking the plaintiff with the defendant who needed the house boatI agree that they met in Bonny and that was between Mr. Boscolo, the PW1 and John Adams in Mr. John Adam’s office on the terms of the contractI find as a fact that after this meeting the parties formally entered into the contract and also stating where the House Boat will be stationedIt is accepted by DW1 that Exhibit A emanated from the defendant. I find therefore as a fact that Local Purchase Order Exh. A was issued by the defendant to the plaintiff

It is in evidence by the plaintiff that the terms and conditions of the contract are as stated in the LPO Exh. A.. The Dw1 said that Chris Green and that the plaintiff had a house boat which plaintiff rent (sic) to the defendant…. On the whole I find as correct the account of the plaintiff in

this case as opposed to that of the defendant….. It was the defendant who breached the contract.”

The Court below, affirmed the nature of the transaction by making a finding that the original contract between the parties was embodied in Exhibit A, that by Exhibit B, which is uncontroverted, the respondent fulfilled its obligation under Exhibit A and delivered the house boat to the appellant on 26th March, 1997. That the unchallenged evidence before the Court is that the appellant failed to pay any of the amounts agreed upon in Exhibit A.

Therefore, it is concurrent findings of the two lower Courts that:

i. There was a contract between the parties in this appeal;

ii. the nature of the contract was that of a simple contract of hire of house boat rather than contract of maritime or admiralty claims;

iii. that there was a breach of the contract occasioned by the defendant/appellant.

My lords, in determining jurisdiction of a Court, we should always remember to consider two important determinants or factors which confer jurisdiction on a Court:

a) the Constitution or statute or law that creates the Court and;

b) the nature of the case/suit/claims giving rise to the subject matter for litigation.

The facts giving rise to this appeal were summarised at the beginning of this judgment. Considering these facts and the law, the appellant is submitting that the High Court of Rivers State did not have the requisite jurisdiction to entertain the suit which gave rise to this appeal making reference to Sections 251 and 272 of the Constitution of Federal Republic of Nigeria, 1999. Learned counsel for the respondent submitted that this appeal is a simple case of debt owed by the appellant to the respondent which arose from breach of contract of hire of a houseboat. lt does not arise in the main nor touch on anything admiralty to oust the jurisdiction of the High Court of Rivers State. It is also not a maritime claim.

This matter was initiated at the High Court of Rivers State. It went through from trial stage to judgment. It then went to the Court of Appeal Port Harcourt on appeal. There was no challenge at both stages to the jurisdiction of the trial Court. The issue is embeded in the contract of hire of the houseboat which is the subject matter of Ground of

Appeal one of the further Amended Notice of Appeal, which is related to issue No.1 by the appellant.

Jurisdiction of any State High Court and the Federal High Court is donated by the Constitution of the Federal Republic of Nigeria, 1999 (as amended). In relation to a State High Court, Section 272 of the Constitution of the Federal Republic of Nigeria provides:

“Subject to the provisions of Section 251 and other provisions of this Constitution, the High Court of a State shall have jurisdiction to hear and determine any civil proceedings in which the existence or extent of a legal right, power, duty, liability, privilege, interest, obligation or claim is in issue.

Thus, a State High Court has a very wide civil jurisdiction on almost all civil matters, except where it has been limited/restricted by the Constitution or any other statute. On the other hand, Section 251 of the same Constitution provided for the jurisdiction of the Federal High Court including admiralty matters. It states:

“251(1) Not withstanding anything to the contrary contained in this Constitution and in addition to such other jurisdiction as may be conferred

upon it by an Act of the National Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other Court in civil causes and matters-

(g) any admiralty jurisdiction, including shipping and navigation on the River Niger or River Benue and their affluent and on such other inland water way as may be designated by any enactment to be an international waterway, all Federal Ports, (including the Constitution and powers of the port, authorities for Federal ports) and carriage by sea.”

There is a finding by the trial Court which was affirmed by the Court below that the transaction between the parties is that of houseboat hire. This, in my view, is a simple contract and not an admiralty or maritime matter. By the constitutional provisions of a State High Court, it is the Port Harcourt High Court and not the Federal High Court that has jurisdiction over this simple contractual engagement.

This is because, careful observation and literal construction of the averments of the Statement of Claim is to the effect that the action filed before the trial Court is for the recovery of accrued and unpaid hire rentals

for a houseboat let to the appellant by the respondent and damages for breach of the contract. The fact that the Admiralty Jurisdiction Act, 1991, Cap. A5 of the Laws of the Federation of Nigeria, 2004, defines a ship (Section 26 thereof) as a vessel of any kind used or constructed for use in navigation by water, however it is propelled or moved and includes a large, lighter or other floating vessel, cannot, in my view, convert an agreement for hire of houseboat into an admiralty agreement. The mere fact that a ship is involved in a simple contract does not automatically make that simple contract a subject for jurisdiction in admiralty matters. To hold to that supposition will be ridiculous. See: Texaco Overseas Nigeria Petroleum Company Unlimited v. Pedmar Nigeria Ltd. (2002) 7 SC (Pt.11) 222; American International Insurance Co. Ltd. v. Ceekay Traders Ltd. (1981) 5 SC 81. This case of a simple contract of debt recovery is, I hold, within the civil jurisdiction of the Rivers State High Court and it properly assumed jurisdiction on the matter. Issue No.1 is resolved against the appellant and in favour of the respondent.

Issue No.2 is on the role of the Court below, whether it properly considered and evaluated the evidence adduced in the case before concluding that there was a valid and enforceable contract between the parties.

Permit me, my lords, to draw attention from the out set in this issue that it is not the business of the Court below (unless in exceptional circumstances) to evaluate and thus, ascribe probative value to evidence. That is the whole mark of the trial Court that heard, saw, observed and ascribed probative value to evidence through witnesses. The only assignment expected of an Appeal Court (in an appeal) is to review, among other things, the evidence and the whole proceedings of the trial Court.

In his arguments, learned counsel for the appellant made submissions to the effect that the evidence adduced at the trial Court shows that the intention of the parties was that the appellant would accept to hire the houseboat upon fulfillment of certain conditions being the provision of additional facilities and conditions of same upon its delivery at an agreed date. Reference was made to paragraph 5 of the Statement of Claim where the respondent averred that Local

Purchase Order (LPO) were given by the appellant (Exhibit A). Evidence, showed also that the appellant had intended the houseboat as a temporary accommodation pending completion of its J.V. and TCN Camps and that the agreed delivery date was 7th March, 1997. The respondent failed to deliver the houseboat on the stipulated date and when it was delivered, it was in an unsatisfactory state; the appellant’s Camps were ready for occupation and were indeed occupied. Time was of essence in the circumstance. The respondent failed to carry out the modifications stipulated by the appellant. There was thus, a qualified acceptance of the offer by the appellant.

The learned counsel for the respondent made submissions in response to the appellant’s arguments that the intention of the parties was that the appellant would accept to hire the houseboat upon fulfillment of certain conditions, i.e. provision for additional facilities and modifications of same are not borne out of the evidence on record or the exhibits before the Court. The lower Court was right in upholding the trial Court’s findings of facts.

From the record of appeal, it is clear that the Court

below reviewed the pleadings of the parties, the evidence on record in relation to the findings of the trial Court. For instance, on the formation of the contract between the parties, the trial Court found as follows:

“l find as a fact that after this meeting the parties formally entered into the contract and also stated where the houseboat will be stationed. It is accepted by the DW1 that Exhibit “A” emanated from the defendant. I find therefore as a fact that the LPO Exhibit “A” was issued by the defendant to the plaintiff.”

On the delivery of the houseboat, the trial Court stated:

“From these, I find as a fact and true that the houseboat was delivered to the defendant…. On the whole I find as correct the account of the plaintiff in this case as opposed to that of the defendants. The houseboat was delivered to them.”

The Court below agreed with the trial Court’s findings as above. It stated, inter alia:

“l am of the humble view that the learned trial judge correctly evaluated the evidence before him on the issue of the delivery of the houseboat. I find no reason to interfere with his decision in that regard.”

Further, it is the observation of the Court below that:

“My first observation is that contrary to the averment in paragraph 8(d), (e) and (f) of the amended statement of defence and the oral evidence of DW1, Exhibit “A” does not contain provision to the effect that the refurbishment of the houseboat was a condition precedent to any contract between the parties. This is particularly so having regard to the fact that there were provisions for certain payments to be made in advance. There is also no stipulation as to the delivery date. The portion of the document where the delivery date ought to have been stated as blank. A stipulation that time is of the essence of a contract must be shown clearly as a fundamental term.”

I am thus, in agreement with the learned counsel for the respondent that the submission of the appellant that there was a qualified acceptance of the houseboat by it does not flow from the evidence. It is the imagination of appellant’s learned counsel which, certainly, has no place in evidence nor in law, generally. See: Popoola Bamgbegbin & Ors v. Jimoh Atanda Oriare & Ors (2009) All FWLR (Pt.484) 1460 at page 1480 H – A. In other

words, the submission by the learned counsel for the appellant on conditional acceptance of the houseboat goes to no issue. Certainly, Exhibits A & B represent the first and second contracts by the parties as found by the two lower Courts. Exhibit B could not be a counter offer but a separate contract of itself as found by the Court below:

“l am of the view that Exhibit B represented a second contract.”

The two lower Courts made a finding that there was definite offer and acceptance which form the basis of any neutral contract.

There is a finding also that it was the defendant/applicant who was responsible for the breach of the contract which caused loss to the claimant. In affirming the trial Court’s finding, the Court below had this to say:

“The learned trial judge, page 125 of the record based his award of general damages on the breach of the terms of the contract by the appellant, particularly its failure to pay the initial instalment agreed upon and its conduct throughout the entire transaction. In the course of this judgment I found that the original contract between the parties was embodied in Exhibit A; that by Exhibit B,

which is uncontroverted, the respondent fulfilled its obligation under Exhibit A and delivered the house boat to the appellant on 26th March, 1997. The unchallenged evidence before the Court is that the appellant failed to pay any of the amounts agreed upon in Exhibit A. I agree with the finding of the learned trial judge that the respondent had proved that it suffered loss arising from the appellant’s breach. I therefore find no reason to interfere with the award of general damages made by the learned trial judge.”

In view of the concurrent findings on this issue by the lower Courts, I find no error which shows that the lower Court’s concurrent decision is unsupportable by evidence or that it has been reached on the application of wrong principles of law or procedure. Thus, I have no difficulty in affirming the concurrent decisions of the two lower Courts.

I have noted that the appellant has formulated his 3rd issue (issue three) for determination. The respondent has not reflected issue 3 in his brief of argument. He rather dwelt on the two issues formulated for consideration.

Arguments on the appellant’s 3rd issue are centred on the

principle of no binding contract between the parties. Consequently, appellant argued that the conditions precedent for hire of the houseboat were never fulfilled by the respondent thus the contract was not formed or became binding and enforceable against the appellant.

I think it needs no further elaboration, the issues/points raised in appellants issue No.3 are nothing other than an unnecessary repetition. All the points raised were carefully dealt with by the lower Courts. I find nothing wrong with the concurrent decisions of the two lower Courts which I affirm. I consider it a wasteful exercise to repeat what has been said confidently by the two lower Courts. Court action must not be in vain. We try as much as possible to avoid verbosity and aimlessness in our judgments or Rulings. I do not consider it worthwhile to waste any further time and energy on appellant’s issue three. The issue has been comprehensively covered by the two issues formulated by the appellant which I have just considered. Issue No. three by the appellant, in my view, is impotent and is hereby struck out.

In the final analysis, this appeal lacks merit and it is hereby dismissed by me. Appellant is to pay to the respondent costs in this appeal in the sum of N500, 000.00 (five hundred thousand naira only).

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