Niger Dams Authority v. Chief Victor Lajide (1973)
LawGlobal-Hub Lead Judgment Report
UDO UDOMA, J.S.C.
The appellants herein, as respondents in the Lagos State High Court, Suit No. M171169, have complained against the ruling given in favour of the respondent, therein applicant, on 9th September, 1971 by Gomez J. and have therefore appealed against the said ruling to this Court.
The facts and circumstances which gave rise to the suit are not in dispute and may be briefly summarised as follows:-
By a formal building contract in writing under the title KJ .14 dated 1966 made by and between the Niger Dams Authority, the appellants that is, on the one part and Chief Victor Ladipo Lajide, trading under the name and style of Victory Builders and Agencies, the respondent that is, on the other part, the latter agreed to construct 11 resettlement villages in the Shanga area of the east bank of the Kainji Reservoir, the contract to subsist for 12 months.
The contract, KJ. 14 is in a printed and bound volume. It is a formidable and voluminous document and consists of several clauses including instructions to tender as well as specifications.
For the purpose of the present appeal, however, only clauses 41 and 63 need concern us as they appear to be directly relevant to the issues in controversy between the parties. All the same, other clauses may be referred to, incidentally, in the course of this judgment.
Clauses 41 and 63 read as follows:-
”41. The Contractor shall commence the Works on Site within the period named in the Tender after the receipt by him of an order in writing to this effect from the Engineer and shall proceed with the same with due expedition and without delay except as may be expressly sanctioned or ordered by the Engineer or be wholly beyond the Contractor’s control.
63. (1) If the Contractor shall become bankrupt or have a receiving order made against him or shall present his petition in bankruptcy or shall make an arrangement with or assignment in favour of his creditors or shall agree to carry out the contract unless a committee of inspection of his creditors or (being a corporation) shall go into liquidation (other than a voluntary liquidation for the purposes of amalgamation or reconstruction) or if the Contractor shall assign the Contract without the consent in writing of the Employer first obtained or shall have an execution levied on his goods or if the Engineer shall certify in writing to the Employer that in his opinion the Contractor-
(a) has abandoned the Contract or;
(b) without reasonable excuse has failed to commence the Works or has suspended the progress of the Works for 28 days after receiving from the Engineer written notice to proceed or has failed to proceed with the Works in accordance with the programme and any amendment approved by the Engineer under Clause 14 hereof or;
(c) has failed to remove materials from the Site or to pull down and replace work for 28 days after receiving from the Engineer’s written notice that the said materials or work had been condemned and rejected by the Engineer under these conditions or;
(d) is not executing the Works in accordance with the Contract or is persistently or flagrantly neglecting to carry out his obligations under the Contract, or;
(e) has to the detriment of good workmanship or in defiance of the Engineer’s instructions to the contrary sub-let any part of the Contract, or;
(f) has failed to comply with his obligations to observe the Ordinances, Regulations and Requirements more particularly referred to in subclause (2) of Clause 34 (as amended of these Conditions), then the Employer may after giving 14 days’ notice in writing to the Contractor enter upon the Site and the Works and expel the Contractor therefrom without thereby avoiding the Contract or releasing the Contractor from any of his obligations or liabilities under the Contract or affecting the rights and powers conferred on the Employer or the Engineer by the Contract and may himself complete the Works or may employ any other Contractor to complete the Works and the Employer or such other Contractor may use for such completion so much of the Constructional Plant Temporary Works and materials which have been deemed to become the property of the Employer under the provisions of the Contract as he or they may think proper and the Employer may at any time sell any of the said Constructional Plant Temporary Works and unused materials and apply the proceeds of sale in or towards the satisfaction of any sums due or which may become due to him from the Contractor under the Contract.
(2) The Engineer shall as soon as may be practicable after any such entry and expulsion by the Employer fix and determine ex-parte or by or after reference to the parties or after such investigation or enquiries as he may think fit to make or institute and shall certify what amount (if any) had at the time of such entry and expulsion been reasonably earned by or would reasonably accrue to the Contractor in respect of work then actually done by him under the Contract and what was the value of any unused or partially used materials any Constructional Plant and any Temporary Works which have been deemed to become the property of the Employer under the provisions of the Contract.
(3) If the Employer shall enter and expel the Contractor under this Clause he shall not be liable to pay to the Contractor any money on account of the Contract until the expiration of the Period of Maintenance and thereafter until the costs of completion and maintenance damages for delay in completion (if any) and all other expenses incurred by the Employer have been ascertained and the amount thereof certified by the Engineer. The Contractor shall then be entitled to receive only such sum or sums (if any) as the Engineer may certify would have been due to him upon due completion by him after deducting the said amount. But if such amount shall exceed the sum which would have been payable to the Contractor on due completion by him then the Contractor shall upon demand pay to the Employer the amount of such excess and it shall be deemed a debt due by the Contractor to the Employer and shall be recoverable accordingly. ”
After the execution of the contract by both parties thereto, by his letter dated 30th September, 1967 the Resident Engineer drew the attention of the respondent to clause 41 of the contract. He pointed out that by the terms of that clause work on the site of the proposed villages was to commence within 30 days of the receipt of a written order to that effect and that that period expired on 30th September, 1967 and yet no work had been commenced. He requested the situation to be remedied. Nothing happened.
On 20th December, 1967 the joint engineering consultants issued a certificate headed:
NIGER DAMS PROJECT-KAINJI DEVELOPMENT CONTRACT KAINJI. 14-SHANGA AREA
Implementation of Clause 63 ‘”Forfeiture” of the conditions of Contract’, in the following terms:
“We, the Joint Consultants, hereby certify that we are of the opinion that the KJ. 14 Contractor, Victory Builders and Agencies of P.O. Box 2243, Lagos, Nigeria, is not executing the Works in accordance with the contract in that he has failed to proceed with due expedition and without delay.
for: BALFOUR BEATY and Company Limited.
(Sgd.)
for: NEDECO. (Sgd.)
Then purporting to act under clause 63 of the contract the appellants, by their letter of 8th February, 1968, gave due notice to the respondent and, also in purported exercise of their rights under the said clause, entered upon the site and works, expelled the respondent therefrom and proceeded to complete the work.
Subsequently an application by the respondent by summons for the appointment of an arbitrator to, inter alia, enquire into matters in controversy between the parties was granted by an order of court dated 9th January, 1969. Thereafter the court by an order of 4th May, 1970 made by consent of both parties appointed a Chartered Accountant as a sole arbitrator upon the terms, inter alia, hereunder set forth, namely:
“(a) To enquire into the propriety or otherwise of the termination by the Employer of the Contract KJ. 14 in favour of the Contractor.
(b) To enquire into the propriety or otherwise of the retention by the Employer of the Contractor’s plant and materials on site of work upon termination of the said contract.”
The arbitrator duly commenced his work and during the enquiry there were produced, tendered and received in evidence by consent 33 documents, including the contract KJ. 14, the resident engineer’s letter of 30th September, 1967 the certificate dated 20th December, 1967 issued by the joint engineering consultants and the appellants’ notice dated 8th February, 1968. These documents were duly marked as exhibits 1-32, the contract KJ. 14, the letter dated 30th September, 1967 the certificate of 20th December, 1967 and the notice of 8th February, 1968 being marked exhibits 1, 7, 16 and 21 respectively. The whole bundle of exhibits was forwarded to the High Court when certain questions were referred to the court for its opinion.
In the course of the enquiry by the arbitrator, it was discovered that two main issues for determination involved questions of law; and, at the request therefore of both parties, the arbitrator stated a case for the opinion of the High Court on the two questions hereunder set forth:
The questions were:-
”(i) whether the termination or forfeiture of the contract (exhibit 1) by the appellants’ letter dated 8th February, 1968 (exhibit 21) is in accordance with the terms of the contract or amounts to a breach thereof;
“(ii) whether it is lawful for the appellants under the terms of the contract (exhibit 1) to retain the respondent’s plants and materials on site after such termination and forfeiture”
On 29th June, 1971 the matter came before the High Court. The whole bundle of exhibits, as already stated, was treated as forming part of the proceedings forwarded to the High Court by the arbitrator and constituted exhibits in the proceedings before the High Court.
The submissions by both counsel in the High Court were directed principally to the first question. It was agreed that the answer to the second question was dependent entirely on the first question before the court; and that if the forfeiture exercised by the appellants was lawful then the second question would not arise. In other words, it was agreed by counsel for both parties that if the answer to the first question was in the affirmative then that would dispose of the whole matter.
In a reserved ruling delivered by the court on 9th September, 1971 Gomez J., while accepting the submission by the counsel for the appellants that it was immaterial whether any reason was given or not, once a default certificate was issued the appellants could exercise their right of forfeiture for then the certificate would be absolute, held that, in the case on appeal, the certificate was not absolute and that the mere existence of the certificate did not automatically entitle the appellants to exercise their right of forfeiture. He held further that the certificate was open to review by the arbitrator and therefore by the court; and that it was highly unjustified for the appellants to have invoked clause 63 (1) of exhibit 1 in terminating or forfeiting the contract, such termination being, in his view, ulta vires and in breach of the terms of the contract by and between the appellants and the respondents. The learned trial judge then declared that it was unlawful under the terms of the contract, exhibit 1, for the appellants to have retained the respondent’s plants and materials, and thereupon entered judgment for the respondent with costs.
The appellants have now appealed against that ruling to this Court on a number of grounds. The main grounds argued before us which are worthy of serious consideration are the following-
“(1) The learned trial judge erred in law when he held that the forfeiture or termination by the appellant of the contract between the parties was ultra vires and/or amounted to a breach of contract.
(2) The learned trial judge erred in law and/or misdirected himself in holding the engineers’ certificate exhibit 16 as invalid and/or inconclusive against the respondent.
(4) The learned trial judge exceeded his authority in adjudicating on the matters outside the reference to High Court by the arbitrator by way of case stated and/or on matters within the exclusive preserve of the arbitrator,
(a) The validity or otherwise of the Engineers’ certificate or
(b) Questioning the Engineers’ action in relation to the issue of their certificate under clause 63 of the contract.
(C) Putting himself in the position of the arbitrator and/or considering it proper to open up the Engineers’ certificate in the absence of grounds cognisable at law for doing so”.
In his submissions on these grounds, which were by leave argued together, Mr Ajayi, counsel for the appellant contended that under clause 41 of exhibit 1, the respondent was bound to commence work on the site within the period named in the tender after the receipt by him of an order in writing to that effect. He had no alternative. Any failure on his part to do so would earn for him or expose him to forfeiture under clause 63. Learned counsel further contended that the words used in the certificate, exhibit 16, were carefully chosen and appeared to have been lifted virtually from clause 41 of the contract, exhibit 1; that they showed that in terms of clause 41, the contract had been breached; that the appellants were entitled therefore to exercise their reserved right of forfeiture; that the re-entry into the works by the appellants was lawful and in accordance with the terms of the contract, exhibit 1; that the consultant engineers’ certificate, exhibit 16, once issued was conclusive; and that the learned trial judge was therefore in error in not treating it as such, it not being competent for him to re-open the issue particularly as there was no imputation of ultra vires, fraud or want of independent judgment against the consultant engineers, these being the only grounds upon which the certificate could be challenged. Learned counsel further submitted that the only question properly before the court was as to whether or not the termination or forfeiture of the contract, exhibit 1, was in accordance with the terms of the contract, or a breach thereof, and that it was not competent for the learned trial judge to go outside the question properly referred to him by consent of both parties.
In support of his submission that the engineers’ certificate could only be impeached on the grounds of ultra vires, fraud and lack of independent judgment on the part of the engineer, learned counsel referred the Court to Halsbury’s Laws of England, 3rd Ed. Vol. 111, paragraph 985 at page 564 in which are to be found the words following:-
“Where the ascertainment of event is left to the final decision of a third person such as the architect or engineer, the decision of that third person cannot be impeached, except on the ground of its being ultra vires or fraudulent or where the architect has not exercised his judgment independently.”
Learned counsel then contended that since the question referred to the learned trial judge did not involve any issue concerning ultra vires or fraud or lack of independent judgment on the part of the engineers, the learned trial judge exceeded his authority in adjudicating on matters outside the reference to him by the arbitrator and came to a wrong decision when he held that the termination of the contract by the appellants was ultra vires and therefore not in accordance with the terms of the contract, exhibit 1.
Stadhard Lee v. and Anor (1863) 3B & S 365 (122 E.R. 138); and Scott v. The Corporation of Liverpool 3 De G & J 334 (44 E.R. 1297) were then cited and relied upon by learned counsel as authorities for his submissions.
For the respondent, Chief Williams contended on these vital points that the engineering consultants had no right in law to have based their certificate on delay or lack of expedition and that being so, the certificate was a nullity; that in law unless there was evidence of delay in fact the certificate issued by an engineer would be of no avail nor could it be regarded as conclusive of the facts stated therein; and that in this particular case all the documents tendered before the arbitrator and which were also tendered before the learned trial judge had proved nothing since some of them were mere letters.
Learned counsel then submitted that there was nothing to support the termination of the contract by the appellants which termination involved the invocation of the forfeiture clause, that is, clause 63; that there was nothing to prevent the learned trial judge from going behind the certificate issued by the engineers since there was involved even in the first question the further question as to the appropriate clause of the contract which ought to have been invoked by the engineers as it was open to them to invoke either clause 46 or clause 47; that the certificate ought not to have been issued at all since the time within which the contract was to be completed had not expired; and, finally, that the forfeiture clause, being in the nature of a penalty clause, ought to be strictly construed.
In support of these submissions, Chief Williams cited and relied on Roberts v. Bury Improvement Commissioners (1870) L.R.5 C.P. 310 and in Re Davstone Estates Ltd.’s Leases Manprop Ltd. v. O’Dell and others [1969] 2 Ch. 378. Learned counsel also referred to Hudson’s Building and Engineering Contracts 9th Ed. p. 317.
We think in Re Davstone Estate Ltd.’s Leases Manprop Ltd. v. O’Dell and others (supra) can easily be disposed of as irrelevant to the facts and circumstances of the present appeal. The decision in that case was based entirely on public policy. It was a case of a landlord and tenant in whch the landlord granted certain leases in common form of certain flats for 99 years on a yearly rent. The leases contained certain covenants, clause 2 (3) whereof stipulated that the lessees should pay to the lessor a certain sum per year.
“as a contribution towards the expenses incurred by the lessor in performing the covenants on the part of the lessor set forth in clause 3 …………… provided nevertheless that if one (tenth) part of the said expenses reasonably and properly incurred by the lessor in any year (as certified by the surveyor for the time being to the lessor (hereinafter called the surveyor) whose certificate shall be final and not subject to challenge in any manner whatsoever) shall exceed 15 pounds then the lessee shall pay to the lessor the amount of the excess such sum to be paid within 28 days after the service on the lessee of a copy of the certificate of the surveyor.”
By clause 3, the lessor covenanted:
“(1) At all times during the said term to keep the interior and exterior walls and ceilings and floors of the buildings (other than those included in this demise or in the demise of any other flat or garage in the buildings) and the roof and main drains thereof in good and substantial repair and condition … (8) To defray such other costs as may be necessary to maintain the buildings as good class residential flats and garages … ”
On a summons by the plaintiffs to determine whether, on the true construction of clause 2 (3) of the leases, the certificate of the surveyor was open to challenge by the tenants, or was conclusive as to whether the expenses had been incurred in performance of the lessor’s covenants contained in clause 3, it was held that the provision in clause 2 (3) that the surveyor’s certificate should be conclusive on what was within the meaning of clause 3 was void as contrary to public policy on the ground that it ousted the jurisdiction of the courts on a question of law, there being no distinction in this respect between a decision by an arbitration or one by an expert; and that on the true construction of the leases, the question whether the defects were within the terms of clause 3 was not a matter for decision by the surveyor’s certificate.
It was difficult to appreciate some of the submissions made by the learned counsel for the respondent, particularly when he contended that the certificate issued by the consultant engineers was a nullity and that there was nothing to support the termination of the contract by the appellants which would entitle them to forfeiture under clause 63 of the contract, exhibit 1. Surely, the question which was referred to the court was not whether the certificate issued by the consultant engineers was valid or ultra vires. Such a question was not within the contemplation of both parties to the contract when the reference was made. It was not therefore open to the respondent to select for the consultant engineers which of the clauses of the contract, exhibit 1, should be invoked by them. The warning issued by the resident engineer to the respondent was issued by virtue of clause 41 of exhibit 1. That was made most explicit; and when the consultant engineers issued their certificate, exhibit 16, the validity of the certificate was never at any time questioned.
We agree with learned counsel for the appellants also that Roberts v. Bury Improvement Commissioners (supra) which came before the Court of Exchequer Chambers by a demurrer and resulted in the reversal of the judgment of the Court of Common Pleas did not lay down any new principle or establish an additional ground to those already mentioned above for impeaching a certificate issued by a third party named in a contract as competent to issue such a certificate.
The substance of the decision of the court in that case is quite clear. It was that where an architect issues a certificate an employer would not be allowed to take advantage of such a certificate if the employer was the original cause of the delay in the execution of the work.
Although the passage quoted by him in his judgment, the subject matter of this appeal, is the passage in the judgment of Montague Smith J. delivered in the Court of Common Pleas in favour of the plaintiff in that case, which was subsequently set aside, we think the learned trial judge was right in holding that the case was not on all fours with the instant case and that the decision therein was irrelevant. We also agree with the learned trial judge that the contract must be strictly construed in accordance with the well-known rules of construction, but such strict construction cannot be a ground for departing from the terms which had been agreed by both parties to the contract.
In Stadhard v. Lee and Anor. (supra) the decision of the court turned on the construction of a contract just as in the appeal in hand. There, the action was brought by the contractor, Stadhard, as plaintiff against his employer, Lee and another, as defendants, for a declaration for work and labour done and for materials. It was in connection with a sub-contract in respect of work to be done by the plaintiff for defendants who were themselves contractors for certain public works connected with some sewerage system in which the plaintiff, Stadhard, had agreed to execute the work to the entire satisfaction of the engineer and clerk of the works appointed by the Metropolitan Board of Works, as well as to the satisfaction of the defendants and their agents, and in which the defendants had stipulated that if the works should not proceed as rapidly and satisfactorily as required by the defendants and their agents they should have full powers to enter upon and take possession of the works and pay whatever number of men they might consider necessary; and that the amount so paid, and the costs of the men so set to work, should be deducted from whatever monies might be due to the plaintiff. The defendants having acted in terms of the contract when the plaintiff made default and claimed to deduct from what was due to the plaintiff the costs incurred by them for entering and taking possession of the works, the plaintiff brought the action claiming as stated.
In their defence, described in the report as the “fourth plea”, in so far as relates to the work done, the defendants pleaded that the work was done under a certain written agreement made and entered into by and between the defendants and the plaintiff therein. The words of the contract were set out and included the following clause:-
”And the said C. Stadhard hereby agrees to execute the above mentioned work to the entire satisfaction of the engineer and clerk of works appointed by the Metropolitan Board of Works as well as to the satisfaction of Messrs Lee and Bowles or their agent. Provided that if the said works shall not proceed as rapidly and satisfactorily as required by the said W. Lee and W. Bowles, or their agent, they shall have full power to enter upon and take possession of the said works and pay whatever number of men may be left unpaid by the said C. Stadhard, and may set to work whatever number of men the said W. Lee and W. Bowles, or their agent, may consider necessary, and the amount so paid, and the costs of the men so set to work as last mentioned, shall be deducted from whatever monies may be due to the said C. Stadhard, and the amount of any monies that may be due to the said C. Stadhard shall be ascertained by Mr J. B., whose decision shall be final.”
To this defence, the plaintiff filed a reply in the following terms:
“that the works, while proceeded with by the plaintiff as in the fourth plea mentioned, did proceed as rapidly and satisfactorily as the defendants, or their agent, reasonably required, and the works then did proceed as rapidly and satisfactorily, according and pursuant to the agreement, as the defendants reasonably and properly could require: and the defendants and their agent unreasonably, improperly and capriciously required the work to proceed as in the fourth plea alleged.”
There then followed an objection in point of law, and issues were joined. The objection was argued before Cockburn C.J., Crompton and Mellor JJ.
The court then had to construe the clause of the contract set out above.It held that the reply was insufficient defence to the averment in the plea.
The judgment which was delivered by Cockburn C.J. is so pertinent to the facts and circumstances of the present case on appeal that we have decided to reproduce a portion of it which we consider most relevant. In his judgment the learned Chief Justice said at page 141:
”We quite agree that stipulations and conditions of this kind should, where the language of the contract admits of it, receive a reasonable construction, as it is to be intended that the party in whose favour such a clause is inserted meant to secure only what was reasonable and just: and we therefore entirely accede to the propriety of the decision in Dallman v. King (4 Bing. N.C. 105). But we are equally clear that, where from the whole tenor of the agreement, it appears that however unreasonable and oppressive a stipulation or condition may be, the one party intended to insist upon and the other to submit to it, a court of justice cannot do otherwise than give full effect to the terms which have been agreed upon between the parties. It frequently happens in the completion which notoriously exists in the various departments of business, that persons anxious to obtain contracts submit to terms which, when they come to be enforced, appear harsh and oppressive. From the stringency of such terms escape is often sought by endeavouring to read the agreement otherwise than according to its plain meaning. But the duty of a court in such cases is to ascertain and give effect to the intention of the parties as evidenced by the agreement; and though where the language of the contract will admit of it, it should be presumed that the parties meant only what was reasonable, yet, if the terms are clear and unambiguous, the court is bound to give effect to them without stopping to consider how far they may be reasonable or not.
“Now, on carefully considering the contract between these parties, we are satisfied that the intention was that the defendants, if dissatisfied whether with or without sufficient reason, with the progress of the work, should have the absolute and unqualified power to put on additional hands and get the work done, and deduct the cost from the contract price payable to plaintiff, and therefore, if these terms had been ever so unreasonable, we should have felt bound to give effect to them, and to hold that, so long as the defendants were acting bona fide under an honest sense of dissatisfaction, although that dissatisfaction might be ill-founded and unreasonable, they were entitled to insist on the condition, and consequently that the replication, which only alleges that their dissatisfaction was unreasonable and capricious, but which stops short of alleging mala fides in the defendants in acting as is stated in the plea, is insufficient.
We feel, however, bound, in justice to the defendants, to add that, we do not consider the stipulation in question unreasonable. It amounts only to this, that the defendants, who are the principal contractors for a great public work, and who are themselves probably under stringent terms to complete the undertaking with dispatch, insist, on employing the plaintiff to do a subordinate portion of the work, that if such work should not progress as rapidly as they may desire they shall be at liberty to put on more hands, and deduct the cost of them from the contract price, still leaving to the plaintiff the benefit of the contract.”
Scott v. The Corporation of Liverpool (supra) concerns a contract for the performance of works which contained a provision that “if the contractor should not, according to the determination of the employers’ engineer exercise such due diligence as would enable the works to be completed according to the contract, the employers might put an end to the contract, and that the contractor should be paid such sum as the engineer might determine to have been reasonably earned for work actually done.” The contract having been terminated under the provision, Messrs Scott and Nowell the contractors, as plaintiffs brought an action against the employers- The Corporation of Liverpool and their engineer, as defendants, complaining of undue delay on the part of the defendants in awarding to them the amount earned by them and seeking payment of what was due upon the contract. They did not, however, in the course of the contract, establish fraud or collusion against the engineer. Vice-Chancellor Stuarts who tried the action, dismissed it with costs. On appeal, the judgment dismissing the action was affirmed.
In dismissing the appeal, the Lord Chancellor, delivering the judgment of the court, observed that the contract had been characterised in the argument on behalf of the appellant as one of great severity towards the contractors who were said to be placed entirely at the mercy of the arbitrary discretion of the engineers but that arguments drawn from the hard terms of the agreement by which the parties had deliberately consented to be bound by them are not admissible.
His Lordship then continued, inter alia, at page 1306:
“The plaintiffs have urged very strongly in argument before me, that if there is no remedy at law it follows of necessity that there must be a remedy in equity, otherwise (as they say) this monstrous consequence will follow, that a party entitled to a large sum of money is utterly remediless. This mode of putting the plaintiffs case is, however, open to the objection that it begins by begging the whole question. It may possibly be that eventually the plaintiffs may become entitled to recover a large amount, which they may prove to be due to them, and yet at the time of the commencement of the action or the institution of a suit in equity, they may have bound themselves by contract in such a manner, that until some preliminary act is done no right of payment accrues. To speak of a party being either legally or equitably entitled, under such circumstances, would clearly be incorrect, as the title which both courts of law and equity deal with in cases of this description is not an imperfect but a complete title.
The question is, whether the plaintiffs have shown that they have a present right to an equitable remedy In order to determine this question it will be necessary carefully to consider the mode in which the plaintiffs now shape their case. All idea of founding their claim to relief upon fraud is abandoned. All the charges against Mr Hawksley (whatever their meaning may have been) are withdrawn, and as to him the bill has been dismissed with costs. And, as a corporation cannot commit fraud except through the instrumentality of an agent, this part of the case failing as to Mr Hawksley, must consequently fail as to the corporation.”
It seems to us that the above cases are in principle on all fours with the present case on appeal. Neither fraud nor collusion was even ever alleged against the consultant engineers of the appellants who issued the certificate by the authority of which the appellants exercised their right of forfeiture. It is clear that the submissions of learned counsel for the respondent cannot be sustained on any count.
For the reasons given above, we are left in no doubt that the learned trial judge was in error when he held that it was highly unjustified for the appellants to have invoked clause 63 (1) of the contract, exhibit 1, in the exercise of their right of forfeiture. He was equally in error to have held that the invocation of clause 63 (1) for the purpose of terminating the contract was ultra vires and that the contract was not terminated in accordance with the agreed terms.
In the result this appeal is allowed. The decision of the learned trial judge is set aside. Judgment is accordingly entered for the appellants with costs in the High Court and in this Court assessed at N630 and N166 respectively as we are of the view that the appellants ought to have succeeded in the court below.
Appeal allowed; judgment for appellants on case stated.
SC.76/1972
