Zenith Plastics Industries Limited V. Samotech Limited (2018)

LAWGLOBAL HUB Lead Judgment Report

KUDIRAT MOTONMORI OLATOKUNBO KEKERE-EKUN, J.S.C.

The respondent herein, as plaintiff before the High Court of Rivers State sitting at Port Harcourt, instituted an action against the appellant, as defendant where, by paragraph 30 of its statement of claim dated 30/12/1996 filed on 6/1/1997, it sought the following reliefs:

“a) N502,400.00 being balance outstanding against the defendant in respect of electrical work carried out on its behalf by the plaintiff in September 1995 and July 1996.

b) N1.9 million being damages and losses plaintiff suffered by reason of the defendant’s failure to pay the contract price as and when due.

c) N20 million general damages for breach of contract and libel of the plaintiff by the defendant.

d) 25% interest per annum on the total sum of N22,402,400.00 from December 1996 until judgment is delivered in the matter and thereafter 25% interest per annum thereon until full payment thereof is made.”

Pleadings were filed and exchanged and evidence led by the parties in respect of their positions. At the conclusion of the trial the Court found in favour of

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the plaintiff and awarded reliefs (a) and (b) as claimed. It also awarded N10 million as general damages for breach of contract and libel. The defendant/appellant was dissatisfied with the judgment and appealed to the Court of Appeal, Port Harcourt Division.

The facts that gave rise to the suit were ably summarised by the Court below at pages 214-216 of the record, I adopt the summary of facts hereunder as follows:

“The plaintiff and the defendant entered into a contract for the plaintiff to construct an 11 KVA electric power line. The cost of the contract was N1,405,500 (one million, four hundred and five thousand five hundred naira).

The plaintiff completed the construction of the 11 KVA electric power line in September 1995 and demanded payment. The defendant did not pay the debt.

In July 1996, the defendant and its neighbour, Belhope Plastics Ltd. gave the plaintiff a contract jointly. The contract sum was N193,000 (one hundred and ninety three thousand naira). On completion of the contract Belhope Plastics Ltd paid its own share of N96,500, while the defendant did not pay its own share of N96,500 despite demands for payment by the

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plaintiff.

The defendants indebtedness to the plaintiff stood at N1,502,400 (one million five hundred and two thousand four hundred naira) made up of N1,405,500 on the 11 KVA contract and N96,500 on the contract shared with Belhope Plastics Ltd. Union Bank Plc (the plaintiff Bankers) stopped all credit facilities to the plaintiff, and this affected the execution of plaintiffs SHELL contract which SHELL terminated and which the plaintiff says caused him a loss of N1.9m.

Due to mounting pressure on the plaintiff from its Bankers Union Bank Plc to pay up the loans advanced to it to perform the contracts, the plaintiff authorized the defendant to pay its debt directly to Union Bank Plc. The authorization was an irrevocable authority. See Exhibit B. On receipt of Exhibit B, Union Bank Plc wrote to the defendant to make confidential inquiry about the plaintiff and to confirm the authenticity of Exhibit B. The defendant replied Union Bank Plc.

See Exhibit C. It reads in part.

“… we wish to emphasize that this company has no business relationship whatsoever with SAMOTECH LTD.

Therefore SAMOTECH LTD. irrevocable authority letter dated

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19/7/96 should be regarded null and void. We dissociate ourselves from any transaction/s that may exist between your bank and SAMOTECH LTD.”

After exhibit C the defendant paid the plaintiff N1 million. This payment left outstanding balance of N502,500.

After due trial on the plaintiffs statement of claim, the defendants further amended statement of defence, and the reply to statement of defence, the learned trial Judge E.N.T. Ebette J handed down his judgment on 25/3/04 in favour of the plaintiff against the defendant.

The concluding part of the judgment reads:

“…In the event, it is the view of the Court that the plaintiff has proved that the defendant owes it the sum of N502,000 being the outstanding balance unpaid for the contracts it awarded to the plaintiff and the sum of N1.9 million being the amount sustained as a loss for the termination of the contract awarded to it as shown in Exhibit C. The plaintiff is also entitled to the sum of N10,000,000 (ten million naira) as general damages for the breach of contract and Libel of the plaintiff by the defendant.”

In a considered judgment delivered on 12/7/2007 the Court, in dismissing the

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appeal, held thus at pages 242-243 of the record:

“I agree with the learned trial judge bearing in mind the circumstances in which Exhibit C was written, any reasonable man would view the respondent with disgust, deceitful, untrustworthy, a trickster, dishonest. The banker customer relationship was seriously disrupted. The respondent’s business nosedived. The Bank did not want to have any relationship with the respondent after it received Exhibit C, except to collect and quickly too, all the money advanced to the respondent. Exhibit C is clearly defamatory of the respondent. For the avoidance of doubt the respondent is entitled to the following:

1. N502,400.00 (Five Hundred and Two Thousand, Four Hundred Naira)
2. N10,000,000.00 (Ten Million Naira).

The appeal fails and it is accordingly dismissed. There shall be no order on costs.”

The appellant, still aggrieved, further appealed to this Court vide a notice of appeal dated and filed on 13/7/2007 containing two grounds of appeal. The appellant realising that the grounds of appeal were not grounds of law alone, discarded the original notice of appeal and filed an application for the

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trinity prayers i.e. extension of time to seek leave to appeal, leave to appeal and extension of time to appeal against the judgment of the Lower Court. The application was granted on 11/6/2008 and the appellant was given 60 days within which to file its notice of appeal. The said notice of appeal containing three grounds of appeal was filed on 01/10/2008 and can be found at pages 251- 254 of the supplementary record.

The parties duly filed and exchanged their respective briefs as required by the Rules of this Court. At the hearing of the appeal on 9/1/2018, C.A. Adolor Esq. adopted and relied on the appellant’s brief filed on 12/8/2008 in urging the Court to allow the appeal. E.C.N. Igbokwe Esq. adopted and relied on the respondent’s brief deemed filed on 28/4/2010 in urging the Court to dismiss the appeal,

At page 9 of its brief, the appellant formulated 3 issues for determination which are reproduced hereunder:

“1. Whether from the circumstances of this case the learned Justices of the Court of Appeal afforded the appellant fair hearing when they held that “the learned counsel for the appellant did not file a Reply Brief to enable him respond

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to the submissions contained in the Respondent’s brief.” (Ground 1)

2. Whether it was not wrong for the learned Justices of the Court of Appeal to have held that the award of damages for libel was not improper whereas the complaint of the appellant in the Court of Appeal is that it was wrong for the learned trial judge to award general damages of N10 million for both breach of contract and libel without categorizing the award for each cause of action. (Ground 2)
3. Whether it was not wrong for the learned Justices of the Court of Appeal to have relied on the evidence of PW2 to hold that Exhibit C was published and therefore defamatory.”(Ground 3)

Learned counsel for the respondent adopted the three issues.

Issue 1

In support of this issue, learned counsel for the appellant submitted that in the course of its judgment, the Lower Court held that it failed to file a Reply brief in reaction to the preliminary objection raised in the respondent’s brief. He submitted that contrary to the Court’s observation, it filed its Reply brief, though out of time, with leave of the Lower Court granted on 14/2/2007. The said brief was deemed duly filed

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and served on that date. He referred to the Reply Brief at pages 204-209 of the record and the order of the Lower Court extending the time to file the process at page 210 of the record. He submitted that the appellant pointedly addressed the issues raised in the respondent’s brief, particularly as it relates to the lump sum of N10 million awarded by the trial Court as general damages for both breach of contract and libel and the failure of the plaintiff to prove the allegation of defamation.

He submitted that the failure of the Lower Court to consider its Reply brief amounts to a denial of its constitutional right to fair hearing as enshrined in Section 36 of the 1999 Constitution of the Federal Republic of Nigeria. He also referred to Olagunyi Vs Oyeniran (1996) 6 NWLR (Pt.453) 127 @ 146 B C; Mohammed v. Olawunmi (1990) 2 NWLR (Pt.133) 458 @ 485 B-C; Ejeka Vs The State (2003) 7 NWLR (Pt.819) 408 @ 421 C-E. He contended that had the Lower Court considered the submissions in the Reply Brief, it would have reached a different conclusion. He submitted that the effect of the breach of the appellant’s right to fair hearing is that it vitiates the

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proceedings and renders them null and void. He referred to: Military Governor Imo State Vs Nwauwa (1997) 2 NWLR (Pt.490) 675 @ 708 H; Olagunyi Vs Oyeniran (supra) and urged the Court to set aside the judgment of the Lower Court.

Learned counsel for the respondent prefaced his submissions in response with this concession at paragraph 4.1 of his brief:

I concede that the appellant filed a reply brief and that the Court of Appeal inadvertently did not refer to the Reply brief.”

He however submitted, that notwithstanding this omission, the Lower Court afforded the appellant “full, adequate and complete fair hearing” and that the appellant’s complaint is thus untenable. He submitted that the authority of Mohammed Vs Olawunmi (supra) is not applicable to the circumstances of this case, as in that case, the application in question was granted without a hearing. He submitted that the other authorities relied upon by the appellant do not support its case. He relied on Ejeka Vs The State (supra) cited by learned counsel to the effect that it is not every mistake or error in a judgment that would result in an appeal against it being allowed.

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He argued that the omission of the Lower Court to refer to the appellant’s brief is an unsubstantial error, which has not occasioned a miscarriage of justice. He referred to the observation of the Court that “not filing a Reply Brief or responding to the above submissions is in no way fatal” as an indication that the absence of the appellant’s Reply Brief did not affect the finding and decision of the Court.

He submitted that the purpose of a Reply Brief is to respond to any new points arising from the respondent’s brief and not an opportunity for the appellant to take a second bite at the cherry or to add more flesh to his earlier submissions. He contended that the only new issue raised in the respondent’s brief was in relation to the competence of the grounds of appeal, which was resolved in the appellant’s favour. He noted that the only ground of appeal struck out by the Court was Ground 3 because no issue was distilled from it. He argued that other submissions in the Reply Brief which related to the issue of accord and satisfaction were fully argued in the appellant’s main brief and that the said issues were duly considered and resolved against the

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appellant under Issue 2 in the judgment. He submitted that the issue of libel was also considered and resolved at pages 235-242 of the record.

He reiterated his contention that the appellant did not suffer any injustice by the omission of the Lower Court to consider the Reply Brief. He submitted, relying on Oje Vs Babalola (1991) 4 NWLR (Pt.185) 282 C, that this Court will only interfere with the judgment of the Court below if the error or omission is so substantial as to occasion a miscarriage of justice.

Section 36 (1) of the 1999 Constitution as amended provides:

“36(1) In the determination of his civil rights and obligations, including any question or determination by or against any government or authority, a person shall be entitled to a fair hearing within a reasonable time by a Court or other tribunal established by law and constituted in such manner as to secure its independence and impartiality.

What is fair hearing In Duke Vs Govt. of Cross River State & Ors (2013) 8 NWLR (Pt.1356) 347 @ 366 C it was held by this Court as follows:

‘The term ‘fair hearing’ within the con of Section 36 (1) of the 1999

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Constitution, is that a trial ought to be conducted in accordance with all the legal norms designed to ensure that justice is done at all cost to all parties. The principle of fair hearing is that both sides must be given an opportunity to present their respective cases. It implies that each side has the right to know what case is being made against it and given ample opportunity to react or respond thereto.”

(Underlining mine) In Mohammed Vs Olawunmi & Ors (1990) 2 NWLR (Pt.133) 458 @ 485 B-C it was held per Nnaemaka-Agu, JSC, “The right to fair hearing entrenched in Section 33 (1) of the 1979 Constitution entails not only hearing a party on any issue which could be resolved to his prejudice, but also ensuring that the hearing is fair and in accordance with the twin pillars of justice, namely audi alteram partem and nemo judex in causa sua.” Further, in Pam & Anor. Vs Mohammed (2008) 16 NWLR (Pt.1112) 1 @ 48 E-F His Lordship, Oguntade, JSC stated thus: “The question of fair hearing is not just an issue of dogma. Whether or not a party has been denied of his right to fair hearing is to be judged by the nature and circumstances

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surrounding a particular case; the crucial determinant is the necessity to afford the parties equal opportunity to put their case before the Court before the Court gives its judgment.”

See also: Denloye Vs Medical and Dental Practitioners Disciplinary Committee (1968) LPELR- 25526 (SC); (1968) 5 NSCC 260. It is thus clear from the authorities referred to above that the principle of fair hearing is fundamental and must be observed in the conduct of any judicial or quasi judicial proceedings, The requirement that a party must be given ample opportunity to present his case means that the Court has an obligation to consider all the material placed before it by all parties before reaching a final decision.

The effect of failure to observe the principle of fair hearing is that the proceedings are null and void, no matter how well conducted. His Lordship, Tobi, JSC had this to say in Orugbo & Anor. Vs Una & Ors. (2002) 16 NWLR (Pt.792) 175 @ 199 A-D:

“The fair hearing principle entrenched in the Constitution is so fundamental in the judicial process or the administration of justice that breach of it will vitiate or nullify the whole

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proceedings, and a party cannot be heard to say that the proceedings were properly conducted and should be saved because of such proper conduction.

Once an appellate Court comes to the conclusion that there is a breach of the principle of fair hearing, the proceedings cannot be salvaged as they are null and void ab initio. After all, fair hearing lies in the procedure followed in the case, not in the correctness of the decision.

Accordingly, where a Court arrives at a correct decision in breach of the principle of fair hearing, an appellate Court will throw out the correct decision in favour of the breach of fair hearing, See generally:

Ceekay Traders Ltd. Vs General Motors Co. Ltd. (1992) 2 NWLR (Pt.222) 132; University of Nigeria Teaching Hospital Management Board Vs Nnoli (1994) 8 NWLR (Pt.363) 376.”

(Underlining mine)

See also: Kotoye v. CBN (1989) 1 NWLR (Pt.98) 419 @ 488 C D; Wagbatsoma v. FRN (unreported) SC.517/2015 delivered on 9/2/2018; Oyeyemi v. Owoeye (2017) LPELR 41903 (SC) @ 56 B E.

I shall now apply the above principles to the facts of this case. For the hearing of the appeal,

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the processes before the Lower Court were (1) the appellant’s brief filed on 24/8/2005 at pages 154-176 of the record; (2) the respondent’s brief filed on 2/12/2005 at pages 181-199 of the record and (3) the appellant’s Reply Brief dated 15/2/2006 at pages 204-209 of the record which was deemed filed on 14/2/2007 pursuant to an order of the Lower Court of same date.

Therefore, in determining the appeal and for all the parties to have equal opportunity of being heard, all the processes had to be considered. Now, in the course of the judgment, the Court below noted at page 218 of the record that learned counsel for the respondent had argued that the Notice and Grounds of Appeal and the additional ground of appeal were in breach of Order 3 Rule 2 (3) of the Court of Appeal Rules and that there was unnecessary repetition in some of the grounds. The learned Justice who wrote the lead judgment proceeded at page 219 of the record to state as follows:

“Learned counsel for the appellant did not file a Reply to enable him respond to the above submissions. Not filing a Reply brief or responding to the above submissions is in no way fatal. This is so because the

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court has the power suo motu to strike out incompetent grounds of appeal. See: Order 3 Rule 2(2),(3) and (4) of the Court of Appeal Rules.

If indeed the appellant failed to file a Reply brief, the above position taken by the Court would have been in order. However, where the Court states that the appellant did not file a Reply brief when the process was properly before it, it creates a different scenario altogether. It is a clear admission that the appellant’s case was not considered in its entirety. This fact was admitted by learned counsel for the respondent in paragraph 4.1 of his brief. Since the Court erroneously held that the appellant did not file a Reply brief, there was no opportunity for it to consider whether the Reply brief met the requirements of a Reply brief. It is not for learned counsel for the respondent to contend before us that the only new issue raised in the respondent’s brief had been addressed in the main brief or that the Reply brief was a re-hash of arguments in the main brief.

Learned counsel for the appellant contends that apart from addressing the objection raised by the respondent, the Reply Brief also contained

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submissions on other aspects of the appeal relevant to its case. Order 6 Rule 5 of the Court of Appeal Rules 2002 permits an appellant to file a Reply Brief, if necessary. Having exercised its right under the Rules, by filing a Reply Brief, the Lower Court had a duty to consider it and make necessary findings in respect of the arguments proffered therein. The Court could only reach a determination as to the competence of the Reply brief or the materiality of the submissions of learned counsel after giving it due consideration. Having held that the appellant failed to file a Reply Brief, when it had in fact filed one, means that the entirety of its case was not considered by the Court before it reached its decision. It may well be that if the Court had considered the Reply brief it could have found that it did not provide any material assistance to the Court in resolving the issues before it. However, it would have come to that conclusion fully seised of all the relevant material submitted by the parties.

The argument of learned counsel for the respondent to the effect that there has been no miscarriage of justice in this case and that the Lower Court’s

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omission is not fatal, is misconceived. A similar submission was made in Kotoye vs C.B.N. (supra). The Court held that it was not necessary to consider whether or not the order made in that case was more beneficial to the appellants or the respondents. It held that once it is established that a party entitled to be heard was not heard, a breach of the principles of fair hearing is established. It concludes the matter and the proceedings are vitiated.

I am satisfied that there was a breach of the appellants right to fair hearing by the Lower Court when it failed to consider its Reply Brief. This issue is accordingly resolved in the appellant’s favour.

The net effect of the resolution of this issue in the appellant’s favour is that the entire proceedings before the Lower Court are vitiated. They are rendered null and void. In the circumstances, the judgment of the Court of Appeal, Port Harcourt Division in CA/PH/191/2004 delivered on 12/7/2007 is hereby set aside. It is ordered that the appeal be remitted to the President of the Court of Appeal for re-assignment to a different panel of that Court for expeditious hearing and determination.<br< p=””

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The parties shall bear their respective costs in the appeal.

Appeal allowed.

SC.22/2008