U. Ugwe Ukoha & Ors V. G. Golden Okoronkwo (1972)
LawGlobal-Hub Lead Judgment Report
The appellants, who were defendants in the lower court, have appealed against the judgment of Allagoa l. in which he awarded a total sum of 6,541.14s.6d as special and general damages against them jointly and severally in favour of the respondent.
The action titled Suit No. HU/9/1965 was instituted at the High Court, Umuahia, in the then Eastern Nigeria. The plaintiff’s claim as contained in paragraph 18 of the statement of claim is expressed as follows:-
“Whereof the plaintiff claims from the defendants jointly and severally 7,015.18s.6d made up as follows:
- 1,374.18s.6d being the unpaid balance of the value of the work done by the plaintiff for the defendants in 1964 at Ohafia, Umuahia at the request of the defendants.
- 5,641 being general damages being approximately 10 per cent profit of the value of a contract made and to be performed at Ohafia between the plaintiff and defendants in an agreement dated 23rd March, 1964 which the defendants have refused or neglected to perform.”
The defendants in their statement of defence averred in paragraph 13 thus:-
“The defendants deny that the plaintiff is entitled as claimed at paragraph 18 of the statement of claim and aver that what the plaintiff is entitled to receive is 100.13s.0d only.”
The facts, which the learned trial judge found proved, were that the plaintiff and defendants entered into an agreement for the erection of two standard hospital blocks, two standard maternity blocks, one standard out patient block, one standard kitchen, laundry room, drying shed, staff room and incinerator, one standard operation theatre block, one standard mortuary block, one standard covered way, two nursing sisters quarters and quarters for 12 nurses; that the plans of the buildings were handed over by 1st defendant to the plaintiff; that it was then agreed between the parties that the contract price was to be 56,415.8s.6d. A written contract was executed between the plaintiff and defendants and this was tendered in evidence; that a written undertaking was also given by the defendants to the African Continental Bank Ltd., Umuahia that the defendants will pay to the Bank directly all monies due to the plaintiff for the buildings as and when they fell due, so that the Bank would extend overdraft facilities to the plaintiff.
The plaintiff later commenced work at the site in March, 1964. Initially he cleared the site of tree stumps and erected the following:-
(a) Access Road
(b) Water patchment
(c) Temporary store.
In addition to these plaintiff moved his building equipments to the site. He employed staff, about 45 in number, and paid for their accommodation.
Under exhibit A the plaintiff was to be paid of the contract price as an advance before the commencement of the work. He however started the work using his own money, and made frequent requests for the advance but instead he was only paid 707.19s.3d. In the meantime the plaintiff had already obtained an overdraft of 1,500 from the Bank. On 11th July, 1964 the plaintiff wrote exhibit H to the 2nd defendant, who was chairman of the Building Committee, complaining that he had not been paid in accordance with the contract agreement, exhibit A.
Exhibit H reads:-
“G. GOLDEN OKORONKWO & BROS. GENERAL CONTRACTORS No. 333
43 Bonny Street, P.O. Box 186, Umuahia Ibeku.
11th July, 1964.
By a written agreement dated the 23rd March, 1964 made between my company, Messrs. G. Golden Okoronkwo & Brothers and the Board of Trustees of Ohafia Community Hospital of which you are the Chairman, my company undertook, in consideration of the sum of 56,415.8s.6d and of the terms and conditions therein contained, to build a community hospital in accordance with specification and drawings.
In the agreement were set out the manner in which and the stages at which various amounts were to be paid to my company.
Since the work started in March, 1964, not a penny has been paid to my company and it would appear that not a penny is likely to be paid in the near future as it seems clear that there are no funds available for the project.
In the circumstances we request that the trustees assign to us the site as approved by Government together with all relevant documents including plans.
It is my hope that this proposal will receive immediate attention and so obviate the need for drastic action on my part to protect the company’s rights.
Yours faithfully (Sgd.) G. G. OKORONKWO.”
At this time he had erected some section of the patient ward and had gone up to lintel level, and constructed foundations on other portions although at higher cost than agreed upon because the land was not level. He got some other materials ready for use on the buildings. On 13th November, 1964 he received a letter signed by the 1st defendant to the effect that the Ohafia community had decided to complete the buildings themselves and that he, the plaintiff, should submit a claim for the work he had done up till then. On receipt of this letter, exhibit B, the plaintiff consulted a solicitor and as a result, exhibit F was written to the defendants.
Exhibit F reads:-
“Dr. Nwakamma Ok oro Barrister & Solicitor
P.O. Box 618, Enugu, Nigeria.
My ref. 64/151/9 4th December, 1964.
The Board of Trustees of Ohafia Community Hospital, c/o Mr. U. Igwe Ukoha, Ohafia High School, Ohafia, Bende.
Ohafia Community Hospital
I have been instructed by Messrs. G. G. Okoronkwo and brothers and I write on their behalf to draw your attention to the building contract dated 23rd March, 1964 between you and them.
- Despite repeated demands and consultations, you have neglected/failed to pay to my clients the first agreed instalment which was due as an advance.
- Pursuant to paragraphs 2(d) of the said contract, it is my instruction to request that you arrange forthwith for the meeting of selected people therein provided for. My client will bring two people and you are entitled to bring the same number. You should suggest any date in December 1964 and place for the meeting and inform me in good time, by telegram if possible.
- The meeting will be required to agree on the payment of the first instalment and will ensure the payment of same forthwith.
“5. Your failure to arrange for this meeting within December 1964, and to pay the said first instalment will be treated as an indication of your intention to disregard the said agreement and thereafter, my client will be free to go to court.
(Sgd.) Nwakamma Okoro Solicitor to Messrs.
G. G. Okoronkwo & Ors.”
Inspite of all efforts the defendants failed to provide the agreed advance and so work at the building site had to stop. The plaintiff then filed this action.
The learned trial judge rejected the evidence of the defendants denying any liability except for the amount admitted by them in paragraph 13 of the statement of defence. He held that the defendants were jointly and severally liable for the breach of contract.
On the issue of damages the learned trial judge said:-
“The evidence of the quantity surveyor which was unchallenged shows that the value of the work done on the site is 1,787.13s.9d less 707.19s.3d received by the plaintiff from the defendants making it 1,079.14s.6d.
On the general damages the plaintiff’s claim based on 10 per cent profit was not also challenged. Plaintiff will therefore be entitled to
56,413.18s.6d less 1,787.13s.9d which will be 54,627.14s.9d 10 per cent of which is 5,462 odd.
All told there will be judgment against the defendants jointly and severally, 6,541.14s.6d special and general damages for the plaintiff.”
At the hearing of the appeal learned counsel for the defendants was granted leave to substitute fresh grounds of appeal numbered (a) to (h) as set out in the schedule to the motion paper dated 19th August, 1966. He was also granted leave to amend the relief sought. The original grounds of appeal dated 15th July, 1965 were then struck out. The only ground of substance argued before us was on the award of damages.
Ground (d) reads:-
“The sum of 36,541.14s.6d special and general damages awarded by the court is excessive and not supported by the evidence before the court, and the basis of the award is misconceived and unintelligible.”
The learned trial judge had referred to the evidence of the quantity surveyor which was not challenged as to the value of the work done at the site, which was 1,787.13s.9d and deducted the sum of 707.19s.3d which the plaintiff admitted receiving and this leaves a balance of 1,079.14s.6d. Surely these are no imaginary or fictitious figures but were those given in evidence. It was therefore wrong for learned counsel for the appellants to argue, as he did, that there was no evidence before the court to support the award.
The plaintiff gave evidence of the profit he would have made on the contract which was estimated at 10 per cent of the contract price. This was not challenged. There was also evidence, which the learned trial judge believed, that the defendants wrongfully terminated the contract.
In such a case the principle of assessment of damages flowing from a breach by an employer in a building contract is stated as follows:-
“The measure of damages as a legal problem gives little difficulty in the cases of breaches of contract by the employer.
It is obvious that builders work for a profit, and apart from his entitlement to the price, the damage to a builder caused by any breach of contract by the employer will be assessed in the light of its impact upon his profit.” … “In the case of prevention, that is to say, where the employer has wrongfully terminated the contract, or has committed a fundamental breach justifying the builder in treating the contract as at an end, and the latter accordingly ceases work, the measure of damages will be the loss of profit which he would otherwise have earned.
In the more usual case where the work is partly carried out at the time when the contract is repudiated, the builder will normally be entitled to the value of the work done assessed at the contract rates, plus his profit on the remaining work.” See HUDSON’S Building and Engineering Contracts 9th Edition, page 450.
We think, on the facts as found by the learned trial judge, he was clearly right in the amount of damages he awarded in this case. The appeal fails and it is dismissed. The respondent is awarded costs of 46 guineas against the appellants.