Goodwill Company Ltd. V. Calabar Cement Company Ltd. (In Liquidation) & Ors. (2009)
LawGlobal-Hub Lead Judgment Report
JEAN OMOKRI, J.C.A.
This is an appeal against the decision of the Federal High Court, sitting in Calabar, Coram, Ajakaiye, J., in Suit No. FHC/CA/CS/66/2004 delivered on the 3/11/06, in which the trial Judge upheld the preliminary objection of 1st and 2nd respondents that the action was statute barred-and accordingly dismissed the suit.
The appellant company, as plaintiff, instituted proceedings against the 1st – 6th respondents, who were the defendants, before the trial court, on the 4/6/04 claiming at paragraph 50 of the statement of claim, which appears at page 12 of the record of appeal, as follows:
“(1) The sum of N285,000,000.00 (Two Hundred and Eighty-Five Million Naira) being fees for consultancy services and other charges rendered for the reactivation of the 1st defendant.
(2) 21% Central Bank interest rate from 10th day of December, 1997 until judgment, thereafter at the rate of 10% until the entire judgment sum is fully liquidated.”
Eventually, pleadings were filed, served and exchanged between the parties. The 1st and 2nd respondents in their statement of defence raised a preliminary point of law in paragraph 27 thereof, namely;
“………that the court lacks the jurisdiction to hear and determine this matter and that the action is statute barred.”
Arguments were taken on the preliminary point of law and in its ruling on 30/11/06, the trial court upheld the objection and the appellant’s case was dismissed.
Dissatisfied with the Ruling of the trial court, the appellant appealed to this court on two grounds which are subscribed in-its-notice and grounds of appeal filed on 13/2/07. The grounds of appeal, shorn of their particulars are as follows:
“1. The learned trial Judge erred in law when he upheld the preliminary objection of the 1st and 2nd respondents as to the court’s jurisdiction on the ground that the appellant’s claim is statute barred by virtue of S. 16 of the Limitation Law of the Laws of Cross River State, and consequently dismissed the-appellant’s suit in limine.
- The learned trial Judge erred in law when he failed to evaluate all the evidence canvassed by the plaintiff/respondent’s counsel before coming to the conclusion that the action of the plaintiff is statute barred and as the action is no longer enforceable against the defendants.”
The appellant in its brief dated and filed on 11/6/07 formulated two issues for determination as follows:
“1. Whether the learned trial Judge was right in upholding the respondents’ preliminary objection as to the court’s jurisdiction on the ground that the appellant’s action was statute barred, taking into consideration the intervening negotiation between the appellant and the respondents, couple with the positive admission of the appellant’s claim by the respondents, as well as the relentless steps taken by the appellant to pursue its claim.
- Whether the failure of the trial court to resolve all the relevant issues pertaining to the provisions of Company and Allied Matters Act, 1990 as amended and to make findings on the material issues or facts raised by the appellant’s counsel did not occasion a miscarriage of justice?”
The 1st and 2nd respondents in their brief dated 5/7/07 and filed the same day, raised a lone issue for determination, to wit;
“Whether the learned trial Judge was right in holding that by virtue of section 16 of the Limitation Law of Cross River State, the appellant’s claim is statute barred.”
The 3rd and 4th respondents in their brief dated and filed on 12/5/08, but deemed properly filed and served on 13/5/08, with leave of this court, distilled only one issue for determination and that is:
“Whether the trial court was right in holding that by virtue of section 16 of the Limitation Law of Cross River State of Nigeria, 1991, Cap L-14, Laws of Cross River State of Nigeria, 2004, appellant’s claim is statute barred.”
The 5th and 6th respondents’ brief is dated 25/7/07 and-filed the same day. At page 3 of their brief the 5th and 6th respondents raised a preliminary objection as follows:
“That grounds 1 and 2 of the grounds of appeal are incompetent and defective and impeach the jurisdiction of this court to entertain the appeal.”
In the alternative the 5th and 6th respondents raised only one issue for determination that is:
“Whether the trial court was right in holding that by virtue of section 16 of the Limitation Law of Cross River State of Nigeria, 1991, Cap L-14, Laws of Cross River State of Nigeria, 2004, appellant’s claim is statute barred.”
Upon being served with the 5th and 6th respondents’ brief, the appellant filed a reply brief dated and filed on 8/8/07, wherein it reacted to the preliminary objection and a rejoinder on points of law in reply to the 5th and 6th respondents’ brief of argument.
In arguing Issue No.1, learned counsel for the appellant, Mr. Paul Oko, submitted that the trial Judge was wrong to hold that the appellant’s action was statute barred as raised by the 1st and 2nd respondents, inspite of the abundant, eloquent and positive averments in the appellant’s pleadings pointing at the existence of a settlement negotiation between the appellant and the respondents, as well as unambiguous admission of liability by the respondents. Learned counsel referred to the appellant’s letter of demand for payment in respect of the consultancy fees, dated 10/12/97, Exhibit F, and the 1st respondent’s reply dated 2/1/98 acknowledging the debt and promising to settle the debt, Exhibit N, to buttress his submission that the respondents admitted liability and promised to pay the debt as soon as production stabilizes and cash flow position improves. Relying on Nwadiaro vs. S.D.P.C. Ltd. (1990) 5 NWLR (Pt. 180) 322 at 326 and Eboigbe vs. NNPC (1994) 5 NWLR (Pt. 347) 649 at 684, learned counsel submitted that the legal position is that where a party admits liability during negotiation and all that remain is fulfillment of the agreement, it cannot be just and equitable to say that the action is statute barred after the statutory period of limitation giving rise to the action if the defendant were to resile from his agreement during the negotiation.
He also contended that the appellant in reliance on the representation made by the 1st respondent deferred settlement of its debt and decided to wait until when the events stated in Exhibit H would occur. Having waited for about one year and the 1st respondent could not fulfill its promise, the appellant briefed the firm of Dr. Okoi Arikpo & Associates, which wrote on 4/11/98 demanding from the 1st respondent payment of its outstanding debt within 7 days, but there was no response even though production had commences as earlier agreed by the parties. Counsel also referred to paragraphs 16, 17, 20, 21 and 22 of the statement of claim at pages 7, 8, 34 and 35 of the record, in support of his submission. It was also contended that the appellant made frantic and dogged efforts and took positive and diligent steps to get its claim paid by the respondents, but to no avail. Learned counsel also pointed out that the appellant wrote to the Vice President of the Federal Republic of Nigeria, Alh. Atiku Abubakar, in his capacity as the Chairman of the National Council for Privatization and he directed the 5th respondent to settle the debt but to no avail.
Counsel concluded that the appellant has sufficiently displayed due and reasonable diligence in pursuing its claim, therefore, it will be unjust and inequitable that the action would be barred on account of the dishonesty of the respondents.
On Issue No.2, Mr. Paul Oko submitted that the failure of the trial court to resolve all the relevant issues pertaining to the provisions of Company and Allied Matters Act, 1990, as amended and to make findings on the material issues of facts raised by the appellant led to a miscarriage of justice. He relied on Adeye & Ors. vs. Adesanya & Ors. (2001) 5 NSCQR 522 at 524; Adeveri vs. Okoh (1997) 6 NW.LR (Pt 510) 534 at 538 and Morenikeji vs. Adegbasin (2003) FWLR (Pt. 163) 45 at 50. Counsel also submitted that hearing include argument of counsel in a matter before a trial court and that evidence include affidavit evidence and pleadings placed on record before a trial court. He then concluded on this issue that had the trial Judge considered the totality of the material issues before him, he would not have upheld the objection of the 1st and 2nd respondents. He then urged the court to allow the appeal.
Learned counsel for the 1st and 2nd respondents, Mr. Neji, submitted on the lone issue in their brief that the limitation period is determined by looking at the writ of summons and the statement of claim alleging when the wrong was committed which gave the plaintiff a cause of action by comparing that date with the date on which the writ of summons was filed. If the time on the writ is beyond the period allowed by the Limitation Law then the action is statute barred. He furthered that to determine whether an action is statute barred, the starting point is to determine when the cause of action arose. He relied on Egbe vs. Adefarasin (1987) 1 NWLR (Pt. 47) 1; Adimora vs. Ajufo (1988) 3 NWLR (Pt. 80) 1; Muhammed vs. Milad., Plateau State (2001) 16 NWLR (Pt.740) 524; Mercantile Bank (Nig.) Ltd. vs. Fetuo (Nig.) Ltd. (1998) 3 NWLR (Pt. 540) 143.
Counsel pointed out that from the averments in paragraphs 16 and 17 of the statement of claim, there is no doubt that the cause of action arose on 10/12/97 when the plaintiff allegedly wrote demanding for payment of the debts but the action was filed on the 4/6/04, a period of 6 years, 5 months and 26 days after the cause of action had arisen. He also pointed out that, even if the acknowledgement of 2/1/98 by the 1st respondent were to serve as the date the cause of action arose that would still be 6 years, 5 months and 6 days before the action was filed. He contended that even though the trial court relied on a later demand by the appellant’s solicitors as pleaded in paragraph 19 of the statement of claim to hold the action was still statute barred.
Reacting to the contention of the appellant that the 1st respondent admitted its indebtedness during negotiation, therefore, it would be unjust and inequitable to hold that the action is caught by the statute of limitation, Mr. Neji submitted that the contention is not borne out by the pleadings and the cases of Nwadiaro vs. S.D.P.C. Ltd. (supra) and Eboigbe vs. NNPC (supra) do not support the appellant’s contention. He contended also that time does not cease to run merely because the parties are engaged in negotiation and if negotiation does not result in a settlement or in an admission of liability, the time devoted to negotiation will not be taken into account for the determination of the question whether a claim is statute barred.
It was also contended that, apart from the letter of 2/1/98 in which the 1st respondent allegedly acknowledged the debt owed to the appellant, there is no other occasion in which the 1st respondent admitted liability for the said debt. Rather from the plaintiff’s pleading in paragraphs 18, 19, 21 and 26 at pages 8 and 9 of the record, the 1st respondent consistently maintained that it was not indebted to the appellant. Counsel submitted that the appellant’s appeal to the 2nd and 5th respondents and the directive of the Vice President to the 5th respondent go to no issue as he was not a party to the suit before the trial court. Moreover, there is nothing in the pleading to show that the 5th respondent had an obligation to pay the alleged debt to warrant such directive. Relying on NUC vs. Onwo (2001) 3 NWLR (Pt. 695) 570; University of Ibadan vs. Adetero (1971) 1 NWLR (Pt. 185) 375; Egbe vs. Adefarasin (supra) and Ochoga vs. Administrator, Benue State (2001) 1 NWLR (Pt. 695) 570, Mr. Neji concluded that an action caught by a statute of limitation should be dismissed because the plaintiff has lost the right to judicial relief and is left with a bare and empty cause of action which he cannot enforce.
Learned counsel for the 3rd and 4th respondents, Mr. B.U. Bassey, Director of Civil Litigation, Ministry of Justice, Cross River State, made virtually the same submissions as those of the counsel for the 1st and 2nd respondents though with some minor variations in presentation and in their details: It will therefore be a sheer duplication of efforts to repeat the submissions here. Learned counsel for the 5th to 6th respondents, Mr. Emmanuel Esu Inem, at page 3 of the respondents’ brief set out the substance of the preliminary objection and moved same at the hearing of this appeal. He submitted in the main, that grounds 1 and 2 in the notice of appeal are incompetent, regard being had to the fact that they are vague and the passage where the court below is alleged to have erred is not quoted and the nature of the error in law is not specified. Mr. Irem relied on Order 3 Rule 2(4) of the Court of Appeal Rules, 2002 and Salaudeen VS. Oladele (2003) 3 NWLR (Pt. 806) 29 at 42, and submitted that grounds 1 and 2 be struck out together with the issues formulated thereon by the appellant and the submissions. He concluded that there remains no valid ground for the exercise of the court’s jurisdiction in this appeal and it should be struck out. He relied on Saleh vs. Munguno (2003) 1 NWLR (Pt. 801) 221 at 262; Lawal Osula vs. UBA Plc. (2003) 5 NWLR (Pt. 813) 376 at 392 and Eimskip Ltd. vs. Exquisite Industries (Nig.) Ltd. (2003) 4 NWLR (Pt. 809) 88 at 118 – 119.
In the alternative, counsel argued the lone issue formulated for determination. The issue, which was elaborately argued from pages 5 – 9, is substantially the same with the submissions of the 1st, 2nd, 3rd and 4th respondents; therefore, I see no good reason to repeat same presently. Besides, it will prolong this judgment into inordinate length.
However, learned counsel attacked Issue No.2 formulated and argued by the appellant in the appellant’s brief. He contended that Issue No.2 is alien to, unconnected with and unsupported by any of the grounds of appeal, therefore, it is fatally incompetent and ought to be struck out. He relied on N. N. Bank Plc. vs. Edoma (2001) 1 NWLR (Pt. 695) 535; Obim vs. Achuk (2003) FWLR (Pt.175) 558 at 563 – 564; Ante VS. University of Calabar. He concluded on this issue, that in the determination of causes and matters -in limine, the court need not take evidence but look at the pleadings to show cause whether the suit is defective or whether the court lacks jurisdiction to entertain the cause or matter. He referred to Buhari vs. Obasanio (2005) 2 NWLR (Pt. 910) 241 at 351 and Jang vs. INEC (2004) 14 NWLR (Pt. 886) 46 at 83 – 94.
It is now well settled that the issues of jurisdiction being the threshold in judicial adjudication, is radically fundamental that it can be raised at any stage of the proceeding before the court even at the Supreme Court for the first time. See Salati vs. Shehu (1986) 1 NWLR (Pt. 15) 198 and Ajakaiye & Anor. vs . Mil. Gov. of Bendel State & Ors. (1993) 9 SCNJ 242. Whenever the issue of jurisdiction of the court is raised it should be dealt with in limine or timeously, because any proceedings taken in the absence of jurisdiction are null and void abinitio, no matter how well conducted. See Dangtoe vs. C. S. C. Plateau State (2001) 4 SCNJ 131; Galadima vs. Tambai (2000) 11 NWLR (Pt. 677) 1; Adekanye & Ors. vs. Comptroller of Prisons (2000) 12 NWLR (Pt. 682) 563. In the instant appeal, the 5th and 6th respondents’ grounds of objection is that grounds 1 and 2 subscribed in the notice and grounds of appeal are vague or in general in terms and they disclose no reasonable ground of appeal which is in violation of Order 3 Rule 2(4) of the Court of Appeal Rules, 2002, therefore, they are incompetent and the appeal is incompetent.
Secondly, Mr. Irem contended that whereas the grounds of appeal alleged that the lower court erred in law, the passage in the judgment where the error is alleged to have occurred was not quoted and the nature of the error was not specified. He relied on Salaudeen vs. Oladele (2003) 3 NWLR (Pt. 806) 29 at 42.
Thirdly, it was contended by the 5th and 6th respondents that none of the grounds of appeal support or relate to any of the issues formulated in the appellant’s brief. In other words, the issues formulated by the appellant do not derive from any of the grounds of appeal, therefore, they are not competent and they should be struck out as- was done in Nwankwo vs. F.R.N. (2003) 4 NWLR (Pt. 809) 1 at 25; Obim vs. Achuk 2003) FWLR (Pt.175) 558 at 563 – 564 and Salaudeen vs. Oladele (supra).
I shall preface this judgment by carefully examining the two grounds of appeal filed by the appellant in the notice and grounds of appeal. The grounds, shorn of their particulars, are as follows:
“1. The learned trial Judge erred in law when he upheld the preliminary objection of the 1st and 2nd respondents as to the court’s jurisdiction on the ground that the appellant (sic) claim is statute barred by virtue of section 16 of the Limitation Law of the laws of Cross River State and consequently dismissed the appellant suit in limine.
- The learned trial Judge erred in law where he failed to evaluate all the evidence canvass (sic) by the plaintiff/respondent (sic) counsel before coming to conclusion one way or the other.”
Having carefully perused the two grounds of appeal, I am of the considered view that they are concise, succinct and articulate and they are not vague or in general terms. A ground of appeal is vague when it is not precisely clear or definitely expressed or stated, particularly when the ground of appeal is couched in a manner that does not provide any explicit standard for its being understood. See Gov. Ekiti State vs. Osayomi (2005) 2 NWLR (Pt. 922) 563; Nwabueze vs. Nworah (2005) 8 NWLR (Pt. 926) 1 and Tiza vs. Beghi (2005) 15 NWLR (Pt. 949) 616. This is not the case in respect of the two grounds in the instant appeal.
Furthermore, the two grounds disclose reasonable grounds of appeal with their particulars clearly stated and they are specific so much so that they gave sufficient notice to the respondents to enable them prepare their briefs, formulate their issues for determination and to proffer their arguments on such issues. In the circumstances, the grounds of appeal cannot be said to be incompetent. See Globe Fishing Industries Ltd. vs. Coker (1996) 7 NWLR (Pt.-162) 265 at 300 and Nsirim vs. Nsirim (1990) 3 NWLR (Pt. 138) 285.
In Imam vs. Sheriff (2005) 4 NWLR (Pt. 914) 80 at 153, Nzeako, JCA, put the matter succinctly and concisely as follows:
“An important element in a ground of appeal which is well articulated, is that it is couched in a manner that it brings out the basis of the appellant’s complaint ………… In essence, an appellant must frame his grounds of appeal with such clarity as would enable the opposite party and indeed the court to appreciate his complaint ………..”
It should be noted that purpose of Order 3 Rule 2(4) of the Court of Appeal Rules, 2002 is to ensure fairness to the respondent in an appeal. The application of such rules should not be reduced to a matter of sheer technicality whereby the court will look at the form rather than the substance. Any ground of appeal that is in compliance with the Rules should not be struck out notwithstanding that it did not conform to a particular form. The grounds of appeal in the instant appeal stated what the appellant’s complain is about, therefore, they cannot be described as bad or incompetent. Interestingly enough, the 5th and 6th respondents did not complain that they were embarrassed or misled or misinformed by the nature and manner of the complaints in the grounds of appeal filed. Surprisingly, the 5th and 6th respondents actually formulated an issue from the grounds of appeal. This bears an eloquent testimony to the fact that they had sufficient notice of the precise nature of the appellant’s complaint. See Imam vs. Sheriff (supra); Aderanmu vs. Olowu (2000) 4 NWLR (Pt. 652) 253 and Oge vs. Ede (1995) 3 NWLR (Pt. 385) 564. I see no merit in this ground of objection.
On the question of the appellant not quoting the error alleged to have occurred and that the nature of the error must be specified, I hold the view that the ground of appeal itself can reflect the error in law clearly.
Particulars of grounds of appeal may be set out separately and distinctly or they may be in built. What is important is the need to frame the ground in such a way that the respondents and the court may be able to appreciate the nature and purport of the complaint being made against the judgment being appealed against and so prevent an element of surprise. See Ayua vs. Adasu (1992) 3 NWLR (Pt. 231) 596 at 612.
In Ukpong vs. Commissioner of Finance (2006) 19 NWLR (Pt. 1013) 187 at 211, Onnoghen, JSC, had this to say:
“Although an appellant is required to give particulars of error(s) of law in a ground of appeal complaining of error in law; it is not every failure to do so that will render the ground so couched incompetent, particularly where sufficient particulars can be gleaned from the ground of appeal in question and the respondent and the court are left in no doubt as to the particulars on which the ground is based.”
The appellant’s ground 1 is clear and succinct and the particulars of error are sufficiently and concisely incorporated in the body of the ground, therefore, they are quite competent. The preliminary objection raised by the 5th and 6th respondents is a step into the realm of technicalities. The attitude of the courts now is to do substantial justice without clinging too much to technicality. The court is more interested in the substance of the matter than in its mere form. Justice can only be done if the substance of a matter is examined. Reliance on technicalities leads to injustice. It follows from the above that the preliminary objection of the 5th and 6th respondents are devoid of substance and they are hereby overruled.
I shall now consider the substance of the main appeal. I have carefully reflected on the issues for determination formulated by the parties in this appeal and I agree with the 1st – 6th respondents that there is in reality and in substance only one issue to be determined in this appeal. The appellant at page 4 of its brief actually distilled only one issue for determination but for undisclosed and unexplained reason it purportedly argued issue No. 2 at page 6 of its brief. This is absurd and it violates the rules governing or regulating the framing of issues for determination.
Furthermore, the purported Issue No.2 is at large because it does not arise from any of the two grounds of appeal subscribed in the notice of appeal filed. It is settled law that any issue not related to a ground or grounds of appeal is incompetent and liable to be struck out. Issues for determination must be based on the decision appealed against. See Fayemi vs. L.G.S.C. Oyo State (2005) 6 NWLR (Pt. 921) 280; Omokhodion vs. F.R.N. (No.1) (2005) 10 NWLR (Pt. 934) 568. In Okafor vs. Admin.-Gen. Anambra State (2006) 12 NWLR (Pt. 993) 131, an appellate court can only hear and decide an issue raised in the grounds of appeal filed before it. An issue not covered by any ground of appeal is therefore incompetent and will be struck out. In the circumstances, Issue No.2 or rather, the purported Issue No.2, is incompetent and it is hereby struck out.
In this appeal, the sole issue that calls for determination is as follows:
“Whether the learned trial Judge was right in holding that by virtue of section 16 of the Limitation Law of Cross River State the appellant’s claim is statute barred.”
The period of limitation is determined by looking at the writ of summons and the statement of claim only to ascertain the alleged date the wrong in question which gave rise to the plaintiff’s cause of action was committed and by comparing such date with the date on which the writ of summons or statement of claim. If the time on the writ or statement of claim is beyond the period allowed by the limitation law, the action is statute barred. What needs to be emphasized is that the determining factor is the averment in the plaintiff’s writ of summons and statement of claim. See Woherem vs. Emereuwa (2004) 13 NWLR (Pt. 890) 398 at 416. In Egbe vs. Adefarasin (supra), it was held that the limitation period is determined by looking at the writ of summons and the statement- of claim alleging when the wrong was committed which gave the plaintiff a cause of action and by comparing the date with the date on which the writ of summons was filed. If the time on the writ is beyond the period allowed by the Limitation Law then the action is statute barred.
A cause of action simply put is the facts which establish or give rise to a right of action. In Cookey vs. Fombo (2005) 15 NWLR (Pt. 947) 182, the Supreme Court gave the meaning of cause of action as follows:
“A cause of action is the bundle of aggregate of facts which the law will recognize as giving the plaintiff a substantive right to make the claim for the relief or remedy being sought……………”
In NEPA vs. Olagunju (2005) 3 NWLR (Pt. 913) 602, the court stated as follows:
“A cause of action means:
(a) a cause of complaint;
(b) a civil right or obligation for determination by a court of law; and
(c) a dispute in respect of which a court of law entitled to invoke its judicial powers to determine.
A cause of action is indeed a factual situation which enables a person to obtain a remedy from another in court with respect of the injury.”
Secondly, a cause of action matures or arises on the date or from the time when a breach of any duty or act occurs which warrants the person thereby injured or the victim who is adversely affected by such breach to take a court action in assertion or prosecution of his legal right that has been breached. The duration of a right of cause of action conferred on an injured party is circumscribed by the Limitation Law and it does not last till eternity. It lapses after the date the statute of limitation proclaims that no such legal action or proceedings may lawfully be taken or commenced by an injured party. It is therefore necessary when dealing with statutes of limitation to determine first the precise date the cause of action accrued because time will start to run from the moment the cause of action arose.
I have carefully perused the statement of claim of the appellant filed at the trial court and I find paragraphs 16 – 21, germane to the determination of when the cause of action arose. The averments are set down herein below:
“16. On the conclusion of the aforesaid ceremony the Project Manager of the plaintiff wrote on 10/12/97 to the 1st defendant demanding for payment of its consultancy fees and other charges in the sum of N285,000,000.00. The said letter dated 10/12/97 is hereby pleaded and shall be relied upon at the trial of this case. The defendants are given notice to produce same at the trial of the case.
- On 2nd January, 1998 the General Manager and Chief Executive of the 1st defendant wrote to the plaintiff acknowledging receipt of the bills submitted by the plaintiff and promise to pay same. The said letter dated 2/1/98 is hereby pleaded and shall be relied upon at the trial of this case.
- After waiting for almost one year without being paid the said debt, the plaintiff consulted the firm of Dr. Okoi Arikpo & Associates to write and demand from the 1st defendant for the settlement of the said bill of N285,000,000.00.
- The firm of Dr. Okoi Arikpo & Associates wrote on 4/11/98 and demanded from the 1st defendant for the payment of the said bills within seven (7) clear days. The said letter dated 4/11/98 is hereby pleaded and shall be relied upon at the trial of this case.
- The 1st defendant was served the said letter dated 4/11/98 on 5/11/98 through its General Manager and Chief Executive.
- Upon the service of the plaintiff’s letter of demand on the aforesaid 1st defendant, the said 1st defendant still failed reneged and neglected to pay the said debt to the plaintiff.”
The appellant’s claim at the court below is for the recovery of a debt arising from a consultancy contract with the 1st respondent. Now, in an action for the recovery of a debt, as in the instant case, the cause of action accrues upon demand for payment of the debt. In furtherance of the above objective, it is necessary to examine the paragraphs of the appellant’s statement of claim. From the averments in paragraphs 16 and 17 of the appellant’s statement of claim, it is clear that the appellant first wrote to the 1st respondent on 10/12/97 demanding for payment for its consultancy fees and other charges in the sum of N285,000,000.00. In response to the letter, the General Manager and Chief Executive of the 1st respondent, wrote to the appellant on 2/1/98 acknowledging the receipt of the bills and promised to pay same. I find it necessary to reproduce the letters presently. The letter from the appellant to 1st respondent written on 10/12/97 is as follows:
“GOODWILL COMPANY LTD.
OFFICE: CONTACT ADDRESS:
Obudu 98, Marian Rd, Calabar
C.R.S.
Our Ref: GWC/Ca17967002 December 10, 1997
The General Manager,
Calabar Cement Co. Ltd.,
Spring Road, Obutong Hill,
P. M. B. 1092,
Calabar.
Dear Sir,
REACTIVATION OF CALABAR CEMENT COMPANY (CALCEMCO): DEMAND FOR PAYMENT OF OUR CONSULTANCY FEES AND OTHER CHARGES
We are writing for the payment of our consultancy fees and other charges in respect of the reactivation of your cement factory which has been re-commissioned.
The payment is made up of:
(a) Fifteen percent (15%) of the-expected revenue from the reactivated line. The jnstalled capacity of the line is 250,000 metric tons of cement per annum. At a factory price of N320 per bag or N6,400 per ton. Excluding VAT, this amounts to N1,600,000.00 (One Billion, Six Hundred Million Naira) of which fifteen per cent (15%) is N240 Million (Two Hundred and Forty Million).
(b) And N45 million (Forty-Five Million Naira) for the reimbursable. The total amount due to us therefore is N285 Million (Two Hundred and Eighty-Five Million).
We would appreciate it if payment is made promptly. Thank you for the understanding and cooperation .
Yours faithfully,
for Goodwill Co. Ltd.
Sgd.
ENGR. J. L. USHIE
Project Manager”
The reply of the respondent dated 2/1/98 is as follows:
“Calabar Cement Co. Ltd.
SPRING ROAD, OBUTONG HILL, P.M.B. 1092, CALABAR
RC.3965
Telephone: 222518
Telex: 65120 CALCEMCO NG.
Our Ref: GM/C.9/98 Date 2nd January, 1998
The Project Manager,
Goodwill Company Limited,
98 Marian Road,
Calabar.
Dear Sir,
FEES: RE CONSULTANCY SERVICES
We write to acknowledge the bills of N285 Million (Two Hundred and Eighty-five Million Naira only) submitted as fees for consultancy services rendered by your company.
We shall take steps to settle the bills as soon as our production stabilizes and the cash flow position improves. We thank you for the good job done that has seen us out of the woods, and your understanding regarding our inability to pay immediately for your services.
We count on your continued co-operation in this regard.
Yours faithfully,
for: CALABAR CEMENT COMPANY LIMITED
Sgd.
Engr. Lawrence E. Offiong
General Manager/Chief Executive”
Viewed objectively and dispassionately, there is a clear admission of liability of the said debt by the 1st respondent. In the circumstances it will be unfair and inequitable to hold, as the respondents contended, that the cause of action accrued on 10/12/97. However, the appellant waited for almost one year after receiving the letter dated 2/1/98, but still the 1st respondent did not pay the debt.
Thereafter, the appellant instructed the firm of Dr. Okoi Arikpo & Associates to write and demand from the 1st respondent for the settlement of the debt of N285,000,000.00. That letter was written on 4/11/98 and served on – the 1st respondent on 5/11/98. The letter is reproduced hereinbelow.
“DR. OKOI ARIKPO & ASSOCIATES
(LEGAL PRACTITIONERS)
NO. 22 BONNY STREET
OFF CALABAR ROAD
P. O. BOX 669
CALABAR
TEL: 087-222149
4TH November, 1998
THE GENERAL MANAGER
CHIEF EXECUTIVE
CALABAR CEMENT COMPANY LTD. (CALCEMCO)
SPRING ROAD, OBUTONG HILL
P.M.B. 1092, CALABAR
ATTENTION: ENGR. LAWRENCE E. OFFIONG
Dear Sir,
RE: DEMAND FOR PAYMENT FOR CONSULTANCY SERVICES AND OTHER CHARGES
Our services have been retained by GOODWILL COMPANY NIGERIA LIMITED, a Company incorporated under the laws of the federation of Nigeria.
The Company aforesaid whose contact address is at No. 98 Marian Road, Calabar, Gross-River State shall hereinafter be referred to as “Our Client”.
Our Client’s letters of demand dated 14/11/98, 10/12/97 and yours of 2/1/98 all refers.
As you are well aware, our Client’s services was retained for the reactivation of your Company, Calabar Cement Company Limited (CALCEMCO) and the Chairman of the Board of Directors of your company made a deposit of N2,000,000.00 (Two Million Naira) on 24th December, 1996 for the said consultancy services.
Our Client has long concluded that job assigned to it and submitted its bills for settlement, which you acknowledged as having received same in your letter of 2/1/98 under reference.
It is surprising to our Client that uptill this moment you have not deemed it necessary to settle the said bills standing in the region of N285,000,000.00 (Two Hundred and Eighty-Five Million Naira).
We have definite instructions from our Client to write and demand from you for the final time of the said sum of N285,000,000.00 (Two Hundred and Eight-Five Million Naira).
We hereby demand that you speed up and pay the said sum of N285,000,000.00 (Two Hundred and Eighty-Five Million Naira) into this office within 7/seven clear days for onward transmission of same to our Client without fail.
TAKE NOTICE that if you default this demand as contained herein we will take steps to recover the said sum of N285,000,000.00 (Two Hundred and Eighty-Five Million Naira) from you through the due process of law.
Please, avoid the pains of litigation and attendance expenses.
Thanks sincerely.
Yours faithfully,
for: Dr. Okoi Arikpo & Associates
Sgd.
Egodo, Ogar Ndoma, Esq.,
(Managing Solicitor):”
From the content of the above letter and the averments in paragraphs 16 – 21, it is abundantly clear that the cause of action accrued on 5/11/98 as the trial Judge rightly found at pages 176 – 177 of the record. At the time the appellant instructed the firm of Dr. Okoi Arikpo & Associates to write a letter of demand on 4/11/98, the appellant must have known that the 1st respondent was not willing to pay the said debt. “Thus at that stage, it was abundantly clear that the 1st respondent was not going to pay the debt, particularly after the expiration of 7 days stated in the letter of 4/11/98. Furthermore, there was no more negotiation made made between the parties and none of the respondents admitted the debt or made any promise to settle the debt after 5/11/98. So it is crystal clear that from 5/11/98 there was no settlement or negotiation or admission of liability on the part of the 1st respondent or any of the other respondents. Although the appellant in paragraphs 32 and 33 of the statement of claim averred that it wrote to the 2nd and 5th respondents regarding the debt, there was no reply from them. Also, the appellant’s letter to the Vice President and subsequent directive from him to the 5th respondent go to no issue as the Vice President was not a party to the action before the trial court. Moreover, there is nothing in the appellant’s pleading to show that the 5th respondent had any obligation to pay the alleged debt to warrant such directive from the Vice President.
However, it is contended by the appellant in its brief, that it sufficiently exercised due and reasonable diligence in pursuing its claim, that the 1st respondent admitted its indebtedness during negotiation and it would therefore be unjust and inequitable to hold that the action is caught by the statute of limitation. The appellant relied on Nwadialo vs. S.D.P.C. Ltd. (supra) and Eboigbe vs. NNPC (supra).
It is now appropriate to refer to the case of Eboigbe vs. NNPC (supra), where Adio, JSC, in his usual erudity, had this to say. “The law does – not prohibit parties to a dispute from engaging in negotiation for the purpose of settling the dispute. Except where as a result there is what can be reasonably regarded as a settlement of the dispute or an admission of liability on the part of a defendant, the limitation time continues to run. If one considers the contents of all the letters written by the parties in this case to each other along with the action, if any, taken by the respondent or its agent or servant during the relevant period, it is quite clear that there was nothing in the manner in which the respondent conducted the negotiation which could estop it from relying on or raising the statutes of limitation. See Gbadamosi Lahan’s case, supra. In Hawlett vs. London Country Council (1908) 24 JIR 331 the letters which the parties addressed to each other contained suggestions for a settlement, the sum which the plaintiff would be willing to accept, and requests for particulars. When negotiation broke down, the plaintiff instituted an action and the defendant relied on section 1(a) of the Public Authorities Protection Act, 1893, which prescribed a limitation period of six months. It was held, on appeal, that the defendant was not estopped from relying on the Act. The situation in the respondent’s case in this matter was not as bad as the situation in Hawlettis case and the defendant in that case was not estopped from relying on the statute of limitation.”
The general proposition of law is that where the law provides for the bringing of an action within a prescribed period in respect of a cause of action accruing to the plaintiff, proceedings should not be brought after the time prescribed by the statute. Any action brought outside the prescribed period offends against the provisions of the law and does not give rise to a cause of action. See Iheanacho vs. Ejiogu (1995) 4 NWLR (Pt. 389) 324; Egbe vs. Adefarasin (supra) and Utih vs. Egorr (1990) 5 NWLR (Pt. 153) 777 at 783. In other words, where a statute of limitation prescribes a period within which an action must be commenced, legal proceedings cannot be properly or validly instituted after the expiration of the prescribed period. An action commenced after the expiration of the period stipulated in the statute of limitation is not maintainable. Where as in the instant appeal, the action is statute barred, a plaintiff, who might otherwise have had a -cause of action, loses the right to enforce the cause of action by judicial process because the period of time laid down by the limitation law for instituting such an action has elapsed.
Section 16 of the Limitation Law Cap L-41, Laws of Cross River State provides as follows:
“No action founded on contract, tort or any other action not specifically provided for in Part 1 and II of the Law shall be brought after the expiration of five years from the date the cause of action arose.”
The words of the Limitation Law, Cap L-41, Laws of Cross River State, are simple, clear and unambiguous and therefore they must be given their ordinary, natural and grammatical meaning. See K.S.I.E.C. vs. PDP (2005) 6 NWLR (Pt. 920) 25; C.A.C. vs. Ayedun (2005) 18 NWLR (Pt. 957) 391 and Yusuf vs. Obasanjo (2005) 18 NWLR (Pt. 956) 96. On reading of the above provision of the said Limitation Law, it is clear that they do not merely deny the right of action, they completely extinguish an existing right at the expiration of 5 years from the accrual of the right of action. It should be noted that the duration of a cause of action conferred on an injured person is limited and it does not last till eternity. It is extinguished by effluxion of time. In the instant appeal, the period of limitation began, at the very latest, on 5/11/98, five years from that date expired on 5/11/03. It is therefore clear that the appellant’s suit at the lower court was statute barred.
The Limitation Law of Cross River State removes the right of action and – the right to judicial relief in a plaintiff and that leaves him a bare and empty cause of action which he cannot enforce because the alleged cause of action is statute barred. The right to commence the action is extinguished by the Limitation Law. See Savannah Bank vs. Pan Atlantic (1987) 1 NWLR (Pt. 49) 213; N.P.A. Plc. vs. Lotus Plastics Ltd. (2005) 19 NWLR (Pt. 959) 158 and Onadeko vs. UBN Plc. (2005) 4 NWLR (Pt. 916) 440.
It is curious and indeed strange that the appellant who had a claim for N285,000,000.00 should sleep over his rights until the period of limitation prescribed by law expired. The appellant should know or ought to know that – though the law does not prohibit or stop parties from engaging in negotiation by parties, it does not prevent or stop the period of limitation stipulated by statute from running. The law is that when in respect of a cause of action, the period of limitation begins to run, it is not broken and it does not cease to run merely because the parties engaged in negotiations. Negotiation on its own does not retard or stop the effluxion of time nor does it revive an extant cause of action, except where as a result there is what can be reasonably regarded as a settlement of the dispute or an admission of liability on the part of the defendant, limitation period continues to run. In the instant appeal, the appellant after sending a letter of demand to the 1st respondent on 5/11/98 and there was no response, it should have instituted proceedings against the 1st respondent in a court of competent jurisdiction. To wait until almost 6 years before taking out a writ in my view, is most unreasonable and indolent, particularly having regard to the sum of money involved. The appellant should have acted timeously in – enforcing its right because equity does not aid the indolent. See Ola vs. Williams (supra). Rather than engage in what the appellant described as “frantic”, “dogged efforts”, “positive and diligent steps”, to get its claim paid by the 1st respondent, it should have sued the respondents. The best cause for a person to whom a right of action has accrued is to institute an action against the other party so as to protect his interest or right in case the negotiation fails. See Eboigbe vs. NNPC (supra) at page 659 – 660.
Learned counsel contended that proposition of the law that in considering whether an action is statute barred negotiation between parties will not stop the time from running is subject to the qualification that, where there has been admission of liability during negotiations and all that remains is fulfillment of the agreement. It will not be just and equitable to hold that the action would be barred after the statutory period of limitation giving rise to the action had elapsed, if the defendanf were to resile from his agreement during the negotiation. The contention of the learned counsel for the appellant is grossly misconceived. In the first place since the letter written on 4/11/98 by the law firm of Dr. Okoi Arikpo & Associates was delivered to the 1st respondent, there was no negotiation between the parties. In fact, the 1st respondent did not even acknowledge the letter and it did not by any means respond to it. So the question of the respondents admitting liability during negotiations and all that remains is the fulfillment of the agreement does not arise at all regard being had to facts arid circumstances of this instant case of appeal. See Eboigbe vs. NNPC (supra).
Secondly, the above proposition of the law which the appellant relied on tenaciously, does not mean that a plaintiff in the position of the appellant should go to sleep or wait ad infinitum before instituting proceeding for the recovery of the debt. That is not the intention of the law. The duration of a right or cause of action conferred on the appellant is necessarily limited and circumscribed by the Limitation Law. The right does not last till eternity. See Oke vs. Oke (2006) 17 NWLR (Pt. 1008) 224 at 241 and Woherem vs. Emereuwa (supra).
When the appellant, discovered that the 1st respondent failed to pay the debt, there was no reason for it to wait for almost 6 years before suing the respondents.
In Nwadialo vs. Shell Dev. Pet. Co. Ltd. (supra), Kolawole, JCA, at page 339 of the report held that:
“One of the principles of the statute of limitation is that those who go to sleep on their claims should not be assisted by the courts in recovering their property. But another equally important principle is that there shall be an end of these matters, and that there shall be an end to stale demands.”
From the foregoing, the conclusion I reach is that the appellant’s right of action was extinguished by the provisions of section 16 of the Limitation Law, Cap L-14, Laws of Cross River State, when it instituted its action outside the period of five years stipulated by it. See Egbe vs. Adefarasin (supra); Ochoga vs. Administrator, Benue State (supra); Oke vs. Oke (supra) and Eboigbe vs. NNPC (supra).
Where an action is held to be statute barred, the proper order to make is that of dismissal and not striking out the action. See Utih vs. Egorr (1990) 5 NWLR (supra). In Texaco Panama Inc. vs. Shell Pet. Dev., Corp of Nig. (2000) 4 NWLR (Pt. 853) 480 at 492, Aderemi, JCA, (as he then was) held as follows:
“The consequence of bringing a suit outside the period of limitation is the dismissal of that suit as the right to seek a relief remains dead for all times.”
Accordingly, I find no merit in this appeal and I dismiss it. The judgment of Ajakaiye, J., in Suit No. FHC/CA/CS/66/2004 on 30/11/06 be and is hereby affirmed. Costs is assessed and affixed at N10,000.00 in favour of each set of respondents.
Appeal dismissed.
Other Citations: (2009)LCN/3139(CA)
