Onaga George & Ors Vs Micho and Company (1961)

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UNSWORTH, F.J

This is an appeal from a decision of the High Court of the Enugu Judicial Division awarding the respondent contractor the sum of £3,964 as damages for breach of a building contract.

The facts are that the respondent contractor tendered for a contract to erect a school, and on the 25th September, 1958 he received a letter signed by the 2nd appellant informing him that the Umuneke College Planning Committee had accepted his tender (Exhibit B). He later (on the 26th October , 1958) entered into a formal agreement with the Umuneke Clan Union, which was signed by him and the 1st, 3rd and 5th appellants. The building was to be completed within a period of six months (Exhibit D). The 4th appellant did not sign the agreement, but it is clear from his own evidence that the agreement was signed with his authority and that he took an active part in the negotiations. The respondent commenced work after receiving an authorization to do so, signed by the 1st and 3rd appellants (Exhibit E) and reached lintel level by the end of November, when an installment of £2,000 became due in accordance with the terms of the contract.

On the 6th December, 1958, the 4th appellant visited the site and prepared a re-port, drawing the attention of the respondent to certain alleged defects, but authorizing payment of the installment of £2,000 without prejudice to the engineer’s report (Exhibit N). The respondent acknowledged the report at the foot of exhibit N and undertook to correct any defects if an engineer should visit the site and “finds to the contrary”. He also recorded that work was suspended. The respondent was only paid £1,120 out of the £2,000 and there was a conflict of evidence as to the reasons for this short payment. On the 10th December, 1958, the respondent wrote to the Chairman of the Umuneke Clan Union informing him of the short payment and asking for further advances with a view to speeding up the work (Exhibit O). On the 15th December, 1958, the respondent received a letter from the Planning Committee requesting him to cease work until an inspection team had inspected the building, with the contractor and his engineer, and stating that the respondent would be informed of the date for the inspection (Exhibit H).

In the event the Planning Committee did not send any team of inspectors to the site, and on the 18th March, 1959, the respondent wrote to the Chair-man of the Umuneke Clan Union informing him that he had arranged for the work to be inspected by his engineers at 10.00 a.m. on the 28th March, 1958 and requesting the Chairman to arrange for a team of supervisors to be present at the time of inspection (Exhibit J). The respondent duly attended with his engineer at the time stated, but the Planning Committee did not send any team of supervisors as requested. On the 10th April, 1959, the Secretary of the Umuneke Clan Union wrote to the respondent inviting his attention to the defects, which had been the subject of the report of the 6th December, 1958, and adding that the D.P.C. and foundations were not as specified in the specifications. In that letter the Union stated that they reserved the right to sue the contractor for breach of contract and the recovery of money already paid (Exhibit P). On the 25th April, 1959, the respondents’ solicitor wrote to the appellants requesting payment of the balance on the £2,000 installment and a further £500 fee for working material on the site, and giving notice that failure to comply would induce the respondent to repudiate the contract (Exhibit K). The respondent said that he did not receive any reply to this letter, and after receiving a copy of the agreement on the 2nd May repudiated the contract. He later brought these proceedings. The claim as amended was against the five appellants for themselves jointly and severally and as members of Umuneke College Planning Committee representing Umuneke Clan. The trial Judge said that he was satisfied that there was a breach of contract on the part of the appellants and awarded damages which were made up of a sum for the balance of work done; loss of estimated profits; compensation for certain special losses and a sum of general damages.

The appellants’ counsel argued a number of grounds of appeal, and I would say at this stage that I do not think that there was substance in any of them except that relating to the quantum of damages.

The first ground argued was that the Judge erred in giving judgment for the plaintiff in that the plaintiff sued a wrong party as defendants. It was argued that he ought to have sued the whole Umuneke Clan Union. This Clan Union is an unincorporated body, and, in my view, the plaintiff properly sued the persons who had signed or otherwise authorized the contract, which was the subject of the dispute.

The second point argued was that the contractor had himself been guilty of breaches of contract which would have justified the appellants in repudiating the contract, and that, in these circumstances, the contractor cannot be heard to allege that the appellants were responsible for the abandonment of the contract. The breaches referred to were the defects mentioned in Exhibits N and P. I do not think that these defects, even if they all existed, went to the root of the contract, and it would appear from the wording of Exhibit N, the payment of a sum on account, and the whole conduct of the appellants, that they themselves did not regard the defects as matters going to the root of the contract so as to justify repudiation.

The third point argued was that the appellants had not abandoned the contract and that the contractor was not justified in repudiating on account of the non-payment of the full amount of advance owing. In this connection counsel referred to the principles set out in the case of Mersey Steel and Iron Company v. Naylor, (1884) 9 A. C. 434 as authority for his submission that the contractor was not justified in repudiating the contract, as the appellants had not shown an intention on their part to abandon or repudiate. It is true that the non-payment of an installment would not, in the absence of express provision, in itself excuse the contractor from refusing or delaying execution of his part of the contract, but the circumstances of the non-payment may be evidence of an intention to abandon, and that is so here. The appellants failed to pay the full installment in December 1958, and it has never been paid in full. It was again in December when the Planning Committee alleged that the work was defective and requested that the contractor should cease work until an inspection team had inspected the building with the contractor and his engineer; but no team of inspectors had been sent to the site when the contractor wrote on the 18th March, 1959, unsuccessfully seeking to arrange an inspection appointment for the 25th of that month, and no team of inspectors has ever visited the site. In my view the delay was inexcusable, having regard to the time fixed for the completion of the contract and the fact that it must have been common knowledge that the rainy season in Nigeria was fast approaching.

The next ground of appeal argued was that exhibits H and M were wrongly admitted. I do not think that there is any substance in this submission. Exhibit H was from the Planning Committee and was actually signed by a member of that Committee. Exhibit M is signed by the 4th defendant and relates to negotiations in connection with the contract.

The last ground of appeal was that “the damages awarded to the plaintiff were excessive”. We allowed this ground of appeal to be argued in so far as it related to items of general damage but for future guidance I would record that a ground of appeal in these terms is much too indefinite. This Court does not intervene on a question of damages unless the trial Judge acted upon some wrong principle of law or the amount awarded was so extravagant or so small as to make it an entirely erroneous estimate of the damages. In these circumstances a party appealing against damages should specify with particularity the wrong principle of law alleged, if he wishes to argue that the Judge acted on wrong principles. In the present case we allowed argument to the extent mentioned above, and I consider that the Judge acted on wrong principles in assessing the loss of profit and in awarding the so-called general damage of £660.

An aggrieved contractor is entitled to any balance of payment

Other Citation: (1961) LCN/0908(SC)