Omotayo Olatunji Vs A. Y. Ojikutu (1961)

LawGlobal-Hub Lead Judgment Report

LORD MORRIS

This is an appeal from a judgment of the Federal Supreme Court of Nigeria (Jibowu , Nageon de Lestang and Hubbard F.JJ.) of the 23rd February, 1957, allowing an appeal by the respondent (who was the plaintiff in the original proceedings) and dismissing a cross appeal by the appellant (who was the defendant in the original proceedings) from a judgment of the Supreme Court of Nigeria (Lagos Judicial Division) (Johnston J.) of the 26th November, 1954. By the judgment last referred to the respondent was awarded £5,000 special damages and £500 general damages. Both parties appealed.

The respondent claimed that the award in his favour should have been for the respective sums of £20,000 and £5,000. The appellant complained of that part of the judgment of Johnston, J. which awarded the sum of £5,000: the further award of £500 was not the subject of appeal. The Federal Supreme Court allowed the respondent’s appeal in part and entered judgment in his favour for £20,000 and dismissed the appellant’s appeal. The court held that the learned Judge had been wrong in awarding the respondent £500 general damages but noted that this matter had not been raised by or on behalf of the appellant. Judgment was entered for the respondent for £20,000 with £500 costs in the Court below and £128 costs of the appeal and the appellant’s appeal was dismissed with 25 guineas costs to the respondent. Appeal is now brought from this judgment and the effective issues are whether the respondent was entitled to be awarded £20,000 or alternatively to be awarded £5,000 or whether he should not have been awarded either of these sums.

It will be convenient to refer to the appellant as the defendant and to the respondent as the plaintiff. The plaintiff and the defendant were both general traders and they were members (with three others) of a syndicate in Lagos. The business of the syndicate was concerned with general trading and the events which resulted in this litigation followed upon a visit to London which was paid by the defendant as far back as 1952. The litigation began by writ of summons dated the 7th January, 1954. After the judgment in the Fed-eral Supreme Court final leave to appeal was granted. That was on the 22nd May, 1957. The record was agreed by the parties on both sides on the 27th December, 1957 but was not received in the Privy Council office until the 2nd July, 1959. The record was bespoken on the 1st October, 1959: duplicating was concluded in May 1960 and the respective cases were lodged in Oc-tober 1960.

The defendant who was a general trader and produce merchant paid his visit to London on behalf of the syndicate in September, 1952. He came in the hope of finding buyers for Nigerian produce which the syndicate might sell. He was furnished with certain samples of produce which included Nigerian cedar. He became acquainted by introduction with a man named Frankel. In the course of an interview with Frankel, in which the interest of Frankel as a possible purchaser of produce was sought, the defendant was asked by Fran-kel whether he (the defendant) would be interested in a purchase of Bedford motor trucks. Frankel claimed to be friendly with the manufacturers of them. By a letter dated the 4th September, 1952 Frankel made an offer to sell fifty Bedford 5-ton trucks at the price of £707 each f.o.b. The defendant by letter accepted the offer and being agreeable to paying Frankel a 5 per-cent buying commission at sight in Lagos looked forward to receiving his confirmation. Shortly thereafter Frankel asked the defendant for a deposit of £5,000 saying that the manufacturers (Vauxhall Motors) wanted him to deposit money and saying also that it was their first transaction together. After making certain enquiries through his bank the defendant returned to Nigeria and reported to the plaintiff and to the members of the syndicate. It seems clear that a delivery of the lorries in Lagos might result in profitable dealings in regard to them. The plaintiff was undoubtedly interested. A question arose at the trial as to whether the events that followed were any concern of the syndicate or whether they alone involved the plaintiff and the defendant.

It was held by the learned Judge that the later events did not con-cern the syndicate and this finding has remained unchallenged. The plaintiff agreed to proceed further with the project of buying Bedford lorries and the defendant returned by air to England as the agent of and with instructions from the plaintiff. The plaintiff agreed to pay to the defendant a sum of £300 for his expenses and further agreed to give him 35 per cent of the net profit that resulted from the anticipated dealings with the lorries. Summarizing the main events that followed, the defendant after his return to England re-ported to the plaintiff in such a way that the plaintiff remitted the sum of £5,000 which was paid to Frankel. Frankel then wished to have a further ad-vance before the lorries were sent: he asked the defendant first for £18,000 but altered that sum to £15,000. Later Frankel paid a visit to Lagos and saw the plaintiff and the plaintiff gave Frankel a cheque (dated the 18th November, 1952) for £15,000. Frankel therefore received a total of £20,000. At a later date he asked for a further advance which was not made. Time went on but no lorries were ever delivered.

Recourse against Frankel has been impossible. Eventually by writ of summons dated the 7th January, 1954, the plaintiff brought an action against the defendant claiming damages for breach of the contract of agency. The issue raised in the litigation is whether the defendant was negligent in his conduct when acting on behalf of the plaintiff and whether the plaintiff suffered loss in consequence. The learned Judge at the trial held that the defendant had acted with a lack of care and that the plaintiff had in consequence suffered the loss of the sum of £5,000. He held that the loss of the £15,000 did not result. He held that in the circumstances such sum was paid to Frankel without the agency of the defen-dant and that the payment of it was uninfluenced by the defendant’s previ-ous conduct in words or writing. The Federal Supreme Court took a diffe-rent view in regard to this latter point and held that the plaintiff was entitled to recover both the £5,000 and the £15,000.

The hearing of the action involved the taking of evidence on some four-teen days in October and November 1954, and the consideration of a large number of documents. On the hearing of the appeal their Lordships have been fully referred to the notes of the evidence and to the documents. It is submitted on behalf of the defendant that a consideration of the findings and of the documents should lead to the view that the defendant was not shown to have been negligent.

In approaching the issue as to whether the defendant failed to exercise the measure of care which in all the circumstances was demanded of him it is relevant to bear in mind that he was not one who possessed or claimed to possess the expert skill or the experience or the special training of a broker or business agent. The plaintiff knew the defendant as a general trader in Lagos and as a fellow member of the syndicate which has been mentioned. The plaintiff was not entitled to expect or to require a higher measure of skill or knowledge than one in the position of the defendant could reasonably be expected to possess. The plaintiff knew that the defendant was a produce dealer and had no special qualification as a motor dealer.

The defendant said in his evidence that in his own business (dealing in timber and produce) he shipped through agents and that he had no personal  experience of shipping procedure. It is further important to note the circumstances under which the defendant was introduced to Frankel and under which they met and the steps which the defendant took to enquire as to Frankel’s financial standing.

When the defendant first traveled to London he was given by a Mr McVicker in Lagos a letter of introduction to Mr McVicker’s brother in London. Mr McVicker in Lagos had been sent out there in 1952 as an agent for one Gourewitz with a view to rubber purchases: he had a letter of intro-duction to the defendant: he had met Frankel and the learned Judge held that it was Frankel who had paid his passage money. Mr McVicker in Lagos did not then know the plaintiff but came to know him later and at the time of the trial was his partner.

When the defendant reached London he first met Mr McVicker’s London brother (who was a director of a timber company who were potential importers of rubber) and then, in his company, met Frankel. Mr McVicker in Lagos had in fact spoken to the defendant about Frankel and had said that he was a wealthy man. The defendant’s meetings with Frankel were such as confirmed that Frankel was in a substantial way. The defendant learned that Frankel was a furrier and was in the rubber business. The defendant went to Frankel’s office, travelling in an expensive car, and all the indications in re-gard to Frankel seemed satisfactory. It was in this setting that the plan for the sale of the motor lorries arose. Had all gone according to expectations there seems little doubt that the transaction was one from which the plaintiff would have been able to make an agreeable profit.

During his first visit to London and after making the arrangements about the lorries with Frankel the defendant made enquiries as to Frankel’s financial position. The learned Judge held that the result of the enquiries was such as to satisfy him. In his judgment the learned Judge said:

It is clear that the defendant on his first trip was much impressed by Frankel’s ostentatious mode of living and his show of apparent business prosperity. It is a safe assumption that defendant’s Bank Manager in London made an inquiry into Frankel’s business and financial position which if not as thorough an investigation as it might have been satisfied the defendant already so favourably impressed by what he had seen of Frankel. The defen-dant, in other wo

Other Citation: (1961) LCN/0904(SC)