Artra Industries Nigeria Limited V. The Nigerian Bank For Commerce And Industry (1998)

LAWGLOBAL HUB Lead Judgment Report

ONU, J.S.C.

This is an appeal against the decision of the Court of Appeal, Jos Division (Coram: Oguntade. Edozie and Muntaka Coomassie, JJCA) sitting in Jos which on 11th November, 1996 allowed the appeal of the defendant (herein respondent) and dismissed plaintiffs case in an action founded in contract involving foreign exchange transaction entered into between the plaintiff (herein appellant) and the defendant. The Court of appeal (hereinafter referred to as the court below) in addition, allowed the defendant’s cross-appeal thus culminating in the judgment of the trial Federal High Court in Suit No. FHC/J/10/93 appealed against being set aside in its entirety.

Briefly stated, the appeal herein began like this:-

The plaintiff was granted a loan by the defendant to finance a project for the production of medicated cotton wool and bandages in Bukuru near Jos. Plateau State of Nigeria. Unhappy about the losses it has sustained and allegedly caused by the defendant in the draw-down of the loan and the execution of the project, the plaintiff filed the action hereinbefore referred to which led to the filing and exchange by the parties of pleadings with subsequent amendments thereto. In its Amended Statement of Claim, the reliefs sought by the plaintiff in paragraphs 28 and 29 thereof against the defendant ran thus:

“28. Whereof the plaintiff claims against the defendant as follows:

(i) A Declaration that by virtue of the provisions of Part III of the Companies Decree No.51 of 1968 the defendant is bound by the Investment and Mortgage Agreement dated 12/4/88 and made between the plaintiff and the defendant that the defendant cannot vary the amount secured by the said Agreement.

(ii) A Declaration that the defendant’s letter Ref. No. LEG 72/Vol. 1 dated 14/1/94 and addressed to the Managing Director of the plaintiff violates the terms of the Investment and Mortgage Agreement aforesaid as they relate to the repayment of the amount secured thereunder.

(iii) A Declaration that since the difference in the exchange rate at which the loan was disbursed to the plaintiff was occasioned as a result of the defendant’s negligence, the plaintiff cannot be held liable for the payment of same.

(iv) The sum of Fourteen Million lour hundred and eighty thousand naira only (sic) being special and general damages suffered by the plaintiff as a result of the defendant’s refusal to grant consent to the plaintiff to obtain the working capital granted by Savannah Bank of Nigeria PLC.

PARTICULARS OF DAMAGES

1. SPECIAL DAMAGES.

(a) Loss of anticipated turn-over/earnings per month on the utilization of the working capital beginning from 1/8/93 to 31/3/94 N10,080,000.00

(b) Difference between the cost price of raw materials, equipment spare pans as at April, 1993 and January, 1994………………. N1,000,000.00

(c) The equivalent 14,530 U.S. Dollars still held by the defendant being balance of the undisbursed term loan as per defendant’s letter 31/5/90 N121,000.00

Subtotal N11,201,000.00

2. GENERAL DAMAGES N3.279 000.00

N14.480.000.00

29. Interest at the rate of 10% per annum on the total judgment sum beginning from the date of judgment until the total amount is paid.”

Each party called two witnesses who gave oral evidence to complement the documentary exhibits received by consent to prove its case. As can be gathered from the pleadings and evidence in support thereof, the salient facts which gave rise to the controversy between the parties may be briefly stated as follows:-

While the plaintiff is a limited liability company incorporated in Nigeria and carries on the business of production of medicated cotton wool and bandages, the defendant is a Development Bank established under Act No. 22 of 1973, (now Cap. 296 Laws of the Federation 1990). The defendant’s principal function is to provide equity capital and funds by way of loans to indigenous medium and long term investment in industry and commerce, at such rates and upon such terms as may be determined by the Board in accordance with the policy directed by the National Council of Ministers.

Sometime in 1986, the defendant placed advertisement for the promotion of small and medium size industries. In response thereto, the plaintiff applied for loan from the defendant. Pursuant to the application aforesaid, in 1987 a letter of intent vide Exhibit B was received from the defendant granting the plaintiff the sum of N2.9 million as term loan on the World Bank Credit Line, which sum was meant for the purchase of only plant and equipment. Following the grant of the loan, an Investment and Mortgage Agreement, to wit: Exhibit ‘C” was executed by the parties on 12/4/88. The Term Loan aforesaid was to be paid by the defendant directly to Alfa-matex S.A. of Barcelona, Spain as the manufacturers of the required plants and equipment. The defendant then opened a letter of credit in favour of Alfa-matex, but the said letter of credit (Exhibit EE) was never confirmed until it expired on 2312189. In consequence whereof Alfa-matex could not commence the manufacturing of the plants and equipment. The plaintiff wrote a protest letter – see Exhibits ‘D’ & ‘E’ to the defendant informing them that Alfa matex had indicated that it would not start manufacturing of the plants and equipment until the letter of credit was confirmed in their favour and that time was running out with the fear of increase in the cost of the plants and equipments. The defendant by their letters to the plaintiff dated 2/5/89 and 30/6189 (Exhibits EE & H respectively) intimated the plaintiff of the problem and requested for another pro forma invoice and other related documents for re-establishment of another letter of credit on the approved World Bank credit line but warned the plaintiff that in accordance with Uniform Custom and Practice for Documentary Credit (1983) and the International Chamber of Commerce publication No. 400, the establishment and cancellation charges will be debited to the plaintiff. The plaintiff in response to Exhibits EE and H, by their letter dated 29/6/89 (Exhibit MM), forwarded a new pro forma invoice (Exhibit G), from GATCO Trading GMBH of Hamburg in Germany, to the defendant. The value of the new pro forma invoice was USD 735,470. The defendant on 4th July, 1989 opened letter of Credit No. L/C 890244/WB for USD 735,470 the naira equivalent was N5,326,200.19. See Exhibits L, GG, HH and LL. By Exhibit I dated 24/1 0/89, Messrs GATCO of Hamburg confirmed the receipt of the letter of credit. To enable them erect, install and commission the factory, the plaintiff sent another pro forma invoice to the defendant for the sum of USD 31,355. By their letter to the plaintiff dated 30/5/90, the defendant reminded the plaintiff they had disbursed N5,326,200.19 being the value of USD 735,470 which sum is USD 33, 100 higher than the approved loan.

The plaintiff was requested to pay USD 16,805 to enable the defendant remit this sum as well as USD 14,550 in their custody to the erectors in Germany. The plaintiff did not respond until 23/10/90 when they paid N121,000.00 to the defendant to cover USD 16,805. See: Exhibits M and N. Between May and October 1990, the Exchange Rate had shot up and the NI21,000.00 could not purchase N16,805 USD. The defendant could not therefore disburse this sum to the erectors and the account of the plaintiff was never debited with the undisbursed part of the Term loan. By their letter dated 25/6/92 the defendant granted consent to the plaintiff to enable them obtain a Working Capital of N1.7 million from Commerce Bank PLC. The plaintiff secured another approval by a letter dated 25/3/93 – Exhibit ZZ; the defendant refused to grant consent to create further charge in favour of Savannah Bank of Nigeria PLC. The plaintiff went to the Federal High Court, Jos to compel the defendant to give their consent. On 2/12/93 the Federal High Court, Jos ordered the defendant to grant the requisite consent within 7 days. Sequel to the above, the plaintiff on 31/1/94 proceeded to the Federal High Court Jos to claim the several reliefs I have herein before set out. After taking the evidence of the two witness by the parties and considering the submissions of counsel, the learned trial Judge of the Federal High Court (Kasim, J.), on 20th July, 1995 gave judgment against the defendant and in favour of the plaintiff in the following terms:-

“In sum, judgment is entered in favour of the plaintiff as follows:-

1. That there is no variation in the investment and Mortgage Agreement dated 12th April, 1988 and made between the plaintiff and defendant and that none of the parties therein can unilaterally vary the terms of the said Agreement, including the amount secured by the Agreement.
2. That based on the evidence of the 1st defendant witness, the loan granted under Exhibit C together with interest thereon, was not due for payment at the time Exhibit ‘BB’ was written.
3. That since the difference in the exchange rate at which the loan was disbursed to the plaintiff was occasioned as a result of the defendant’s negligence, the plaintiff cannot be held liable for the payment of same.
4. The plaintiff is awarded the following special and general damages:-

(i) 70% of loss of anticipated turn over/earnings (i.e. N1.26 million) per month on the utilization of the working capital beginning from 1st August, 1993 to 31st March, 1994.

(ii) The difference between cost price of raw materials, equipment and spare parts as at April, 1993 and January 1994, which amount to N1,000,000.00

(iii) The equivalent of 14,540 Dollars still held by the defendant, being the balance of the undisbursed term loan, as per Exhibit ‘K’ which is N121,000.00

(iv) N50,000.00 as general damages.

(v) Interest at the rate of 2 1/2 per annum on the total judgment sum beginning from the date of this judgment until the total amount is paid.”

Dissatisfied with that part of the judgment which awarded only 70% of the anticipated turn over/earnings, the plaintiff appealed against it. The defendant on its part, appealed against the whole decision by way of across-appeal. After briefs were duly filed and exchanged by the parties, the appeal was eventually heard on 25th of September, 1996. In a well considered reserved judgment delivered on 11th November, 1996, the court below as hereinbefore stated dismissed the appeal while the cross-appeal was allowed and the judgment of the trial Federal High Court was set aside in its entirety. The appeal herein premised on thirteen grounds contained in the Notice of Appeal and reflected on pages 257 to 264 of the record of appeal, is against that decision with which the plaintiff felt aggrieved. The defendant also filed a respondent’s Notice at pages 265-266 of the record.

In accordance with the rules of this court the parties eventually filed and exchanged briefs of argument in which the plaintiff submitted thirteen issues as arising for determination. They are:-

(i) Whether the Court of Appeal was right when it held that the principal loan advanced to the appellant was N6, 120,207.00 as per Exhibit ‘NN’.

(ii) Whether the Court of Appeal was right when it held that the loan granted to the plaintiff was provided by the World Bank and that the said bank was the principal of the respondent as well as Midland Bank.

(iii) Whether the Court of Appeal was right when it held that even if the Midland Bank was the agent of the respondent, the respondent cannot be vicariously liable for the negligent act of the Midland Bank without the latter being joined as a party.

(iv) Whether, having regards to the facts and circumstances of this case, the Court of Appeal was right when it held that the exemption clause of clause 11(iii) of the Investment and Mortgage Agreement (i.e. Exhibit ‘C’) provided a complete exemption to the respondent for the consequences of the failure to confirm the 1st letter of Credit.

(v) Whether the Court of Appeal was right in holding that the respondent had absolute discretion to grant or refuse to grant consent to the appellant to create a further Mortgage or charge on its assets after granting the first consent to the Commerce Bank PLC.

(vi) Whether the Court of Appeal was right when it failed to consider the issue as to whether or not the respondent unreasonably withheld the exercise of its discretion (if any) under clause 28 of Exhibit ‘C’ and if the answer is in the negative, whether the respondent unreasonably withheld the exercise of discretion under the clause aforesaid.

(vii) Whether the Court of Appeal did not misdirect itself on the facts of this case when it held that the award relating to loss of anticipated earning/turnover made in favour of the appellant was unjustified because it was not within the contemplation of the parties that the respondent has to provide working capital for the appellant.

(viii) Whether the Court of Appeal was right when it held that the award in respect of loss of anticipated earning/turnover made in favour of the appellant was further unjustified because the special damages on which it is predicated were not particularised and that even if the respondent is precluded from complaining about particulars, Exhibit ‘X’ (the Cash Flow) tendered in evidence in proof of the claim has no weight and further that there was no basis for calculating the claim of N1.26 million every month.

(ix) Whether the Court of Appeal was right when it held that the appellant did not prove the loss of anticipated profit it sustained.

(x) Whether the Court of Appeal was right when it held that it was the failure of the appellant to make adequate arrangement as it had contracted and not the refusal of the respondent to give consent for loan that led to the loss resulting from fluctuations in prices of raw materials.

(xi) Whether the Court of Appeal was right in setting aside the award of N121,000.00 representing USD 14,530.00 undisbursed balance of term Joan as well as the award of N50,000.00 general damages.

(xii) Whether the Court of Appeal was right in holding that the findings of the trial court that the loan granted under Exhibit ‘C’ together with interest was not due when Exhibit ‘BB’ was written.

(xiii) Having regard to the totality of evidence adduced at the trial court was the Court of Appeal right in setting aside the decision of the trial court.

The Defendant for his part submitted six issues for this court’s resolution.

They are:

(1) Whether the principal loan is N2.9 million or the actual amount disbursed upon the establishment of the Letter of Credit;

(2) Whether the appellant was aware that the loan granted them is from the World Bank and if the answer is in the affirmative whether the respondent is vicariously liable for the negligence of their Agent, Midland Bank, London.

(3) Having regard to the agreement between the parties, who is to bear the risk of or the consequences of foreign exchange fluctuation;

(4) Whether the respondent has a discretion to grant or to refuse to grant consent to create further charge on the security held by them;

(5) Whether the Court of Appeal was wrong in holding that the loan became repayable from the 4th day of January, 1991 and that the due date for first instalment was June 30, 1991;

(6) Whether the Court of Appeal was wrong in setting aside the various monetary awards or damages made by the trial court and in dismissing the claim of the appellant.

I take the view that irrespective of the proliferation and prolixity of the plaintiffs issues I will stick to them in my treatment of them as they fall within and circumscribe the thirteen grounds of appeal filed in the (plaintiff’s) Notice and Grounds dated the 19th of November, 1996. In this wise, I shall deal with issue No.1 separately; issue numbers two and three together, issue No.4 separately; issue Numbers 5 and 6 together; issue Numbers 7,8,9, 10,11 and 12 together and finally issue Number 13 separately. Before delving into their consideration, however, I wish to re-iterate that as done by this court in a number of cases before now, we strongly deprecate any prolixity or prolixity in issue formulation. Thus, as we had occasion to counsel in Abiodun Adelaja v. Olatunde Fanoiki & Anor. (1990)2 NWLR (Pt. 131) 137 at page 148 paragraphs E-F:

“It is now fairly well settled that the issues for determination in the appeal formulated must of necessity be limited by, circumscribed and rail within the scope of the grounds, of appeal filed. Since they arise from the grounds of appeal, the issues ought to take account of the grounds of appeal and cannot raise issues outside their contemplation. It is therefore not usually envisaged that the issues for determination will be more in number than the grounds of appeal on which they are based. Since the issues for determination are highlights of the grounds of appeal, they usually are framed in terms of related grounds of appeal supporting the same issue. Hence the issues for determination are usually less but never more than the number of the grounds of appeal filed.”

In Raphael Agu v. Christian Ozurumba Ikewibe (1991) 3 NWLR (Pt. 180) 385 at page 401 paragraphs C-E where Karibi-Whyte, J.S.C. stated inter alia:

“The issues for determination formulated by both counsel would seem to me to have ignored the grounds of appeal on which they ought to be based. The court has counseled counsel formulating issues on several occasions to ensure always that the formulation is not merely consistent with and within the scope and confines of the grounds of appeal relied upon, but also that they should not be so prolix and proliferate as to be more in number than the grounds of appeal on which they are based. This is because whereas an issue to be determined can take into consideration a number of grounds of appeal, it is not desirable to split a ground of appeal into a number of issues. See A.G. Bendel State v. Aideyan (1989) 4 NWLR (Part 118) 646; Ugo v. Obiekwe (1989) 1 NWLR (Part 99) 566; Adelaja v. Fanoiki (1990) 2 NWLR (part 131) 137 ……………………..”

See also Olumolu v. Islamic Trust of Nigeria (1996) 2 NWLR (Pt. 430) 253. Having made the above observations. I will now proceed to consider he issues as rationalised by me as follows:

ISSUE NO 1

Issue No.1 poses the question of whether the court below was right when it held that the principal loan advanced to the plaintiff was N6,120,207.00 as per Exhibit ‘NN’. The issue has close affinity with the defendant’s issue one and in it the plaintiff has contended in answer both orally through counsel and in its brief all in the negative – firstly, that it is not in doubt that the transaction between it (plaintiff) and the defendant was governed by the Letters of Intent vide Exhibits ‘A’ and ‘B’ respectively as well as the Investment and Mortgage Agreement which is Exhibit ‘C’ in these proceedings. That as a follow up to Exhibit ‘B’, the parties executed Exhibit ‘C’ dated 12/4/88 and in its clauses 6(1) and 7 the words “not exceeding in the aggregate” and ‘include’ contained at pages 65 and 76 respectively were defined in Blacks Law Dictionary with pronunciations Sixth Edition. We were therefore urged to interprete what the word “include” in clause 7 of Exhibit ‘C’ connotes and as to whether it is indicative of the fact all those things mentioned therein are confined within the sum ofN2.9 million stated in clause 6(i) of Exhibit ‘C’. Further and in addition to the above, it was argued, that it is settled law that parties are bound by their pleadings and that any evidence adduced at the trial which is at variance with those pleadings goes to no issue and should be ignored. Reliance was placed on the cases of Union Bank of Nigeria Ltd Michael Nnoli (1990)4 NWLR (Part 145) 530 and Benson v. Otubor (1975) 3 SC. 9; (1975) NSCC 49. We were next referred to paragraph 3 of the Amended Statement of Claim dated 31st March, 1995 to which an answer was proffered in paragraph 3 of the defendant’s Amended Statement of Defence dated 28th February, 1995, adding that it is clear

from the latter paragraph reproduced for purposes of clarity, that the contention of the defendant was that the principal loan advanced to the plaintiff was N5,326,200.19 but that in his evidence in chief, D.W.l – Mr. Peter Enezi stated as follows:-

‘The actual amount disbursed in foreign currency was $735,470.00 plus 15% interest – that is N270,000.00 during the period of construction, this added to N5.8 million and up to N6.1 million.”

This, it was argued, contrasts with what the same witness said in his evidence in chief thus:

“The total loan as at 30/10/90 is N6,420,267.97 exclusive of interest.”

It was next submitted that these pieces of evidence are completely at variance with the defendant’s pleading, particularly paragraph 3 of the Amended Statement of Defence (supra). The effect of this in law, it is argued, is that the defendant had not proved that the actual principal loan granted to the plaintiff is above N2.9 million as stated in clause 6(i) of Exhibit ‘C’. what is more, it is further argued, the defendant did not amend the Amended Statement of Defence so as to bring it in line with the evidence at the trial, namely that of D.W. I in relation to the principal loan granted to the defendant. We were therefore, urged to set aside the finding of the lower court that the principal loan advanced to the plaintiff was N6, 120,207.00 as same is completely at variance with the pleadings. Besides, it is maintained, Exhibit ‘NN’ on which the lower court relied in arriving at the above finding was made from records kept by the defendant and over which the plaintiff had no access or control. It was therefore, contended that it follows that the defendant ought to have known the actual principal amount advanced to the plaintiff and same should have been pleaded. The case of The Queen v. Gabriel Adaoju Wilcox (196 I) J SCNLR 190; (1961) All NLR (Pt. 4) 631 at 634 in which the Federal Supreme Court cited with approval the case of Duriminiya v. Commissioner of Police (1961) NRNLR 70 whereof from the principle decided therein, the contention that the principal loan advanced to the plaintiff was N6, 120,207.00 is at variance with both the defendant’s pleading as well as the evidence of D.W.1 who contradicted his own evidence as to the amount of principal loan exclusive of interest. Moreover, it was argued, the amount which the plaintiff had purportedly admitted as being the principal loan in Exhibits ‘GG’, ‘HH’ and ‘JJ’ is equally at variance with the amount stated in Exhibit ‘NN’ on which the lower court relied as well as the oral testimony of D.W. 1 – Mr. Peter Enesi. We were thus urged to hold that the only evidence left and on which the court can rely is Exhibit ‘C’ on which the amount of the principal loan is stated to be N2.9 million.

While it is correct to say from both the letter of intent, Exhibit A2 and the Investment and Mortgage Agreement (Exhibit ‘C’) that the principal loan granted by the defendant to the plaintiff was N2.9 million, clause 7 of Exhibit ‘C’ however, provides:

“It is hereby agreed and understood that the loan shall include any sum owing to the lender by reason of advances made directly to any person at the request of or on behalf of the Borrower on any bonds, letters of credit issued and guarantees or indemnities given by the Lender or its agents on behalf of the Borrower.” (Italics is mine for comments).

In its brief the plaintiff has interpreted the word “include” italicized above to mean that all these things, namely “advances made directly to any person at the request of or on behalf of the Borrower on any bonds, letters of credit issued and guarantees or indemnities” are included in the aggregate sum of N2.9 million in clause 4 Exhibit ‘C’. A careful look at clause 4 however, will reveal that the Term Loan of N2.9 million is meant to cover only building, plants and machinery, both of which total N2,985 million. Other items therein provided exclude payments on bonds, letters of credit, guarantees or indemnities. These items, be it noted, do not form part of the principal loan of N2.9 million. In interpreting a document, due regard must be given to the entire document so as to find out the correct meaning of the word in relation to the agreement. See Schroeder & Co. v. Major & Co. (Nig.) Ltd (1989) 2 NWLR (Pt. 101) 1. The court below was therefore perfectly right, in my opinion when it held, inter alia, that-

“The word “include” in an enactment must be construed as comprehending, not only such things as they signify, according to their natural import but also those things the interpretation clause declares that they shall include. See Nafiu Rabiu v. The State (1980) 8-11 sc. 130; Mandara v. A.G. of Federation of Nigeria (1984) 1 SC 311 ;(1984) I SCNLR 311 and Nwobosi v. The State (1995) 6 NWLR (Part 404) 658 at 683.”

Clearly therefore Clause 6(1) of Exhibit ‘C’ is subject to Clause 7. The loan shall include such sums paid by the Lender for and on behalf of the Borrower on any Letter of Credit etc. By their letter dated 29/6/89 Exhibit MM the plaintiff requested the defendant to open a new irrevocable and confirmed Letter of Credit in favour of GATCO of Hamburg, Germany. Paragraph 2 of Exhibit MM states:

“We shall be grateful therefore, if a fresh irrevocable and confirmed Letter of Credit could now be opened in favour of GATCO TRADING GMBH of the FEDERAL REPUBLIC OF GERMANY……………….. in the sum of US $735,470.00.

In Exhibit LL, a letter dated 21/9/93, the plaintiff admitted at page 3 paragraph XIII and XVI that:

“(XIII) Letter of Intent from the Nigerian Bank for Commerce and Industry and Investment Mortgage Agreement dated 12th April, 1988 for the principal loan from Nigerian Bank for Commerce and Industry for N2.9 million but L/C opening now N5.33 million.”

“(XVI) Form ‘M’ for the opening of Letter of Credit for USD 735,470 at N7.2419 = N5,326,200.19 being the cost of Plants and Machinery financed by NBCI.”

In Exhibit GG another letter dated 28/1/93 the plaintiff said:

“We refer to your demand note dated 11th January, 1993 on the above and wish to correct that the principal loan is USD 735,470 at N7,2419 =N5,326,200.19 not N5,850,267.97 as stated in the above note.”

In their letter dated 28/1/93 (Exhibit HH) the plaintiff admitted that:

“We refer to your interest demand note dated 31st December, 1992 on the above and wish to correct that the interest has accrued on the principal sum ofN5,326,200.19 at l5% i.e. N I,758,045.50 based on a daily N I,404.19 not N2, 150, 134.92 as stated in the above demand note.”

In Exhibit JJ. Statement of Affair of the plaintiff as at 31st December, 1991, duly authenticated by the Managing Director and another Director, the plaintiff admitted owing the defendant N6.570,553.00 made up of principal loan of N5,326,200.00 and interest of N 1,244, 153.00. Similarly, in Exhibit KK, the plaintiffs audited Account for the six months period ending 31st December, 1992, in which the plaintiff admitted owing the defendant N6,570,353.00. When cross-examined, P.W.1 confirmed the contents of Exhibits II, JJ and KK and admitted that his company owed the principal sum of N5,326.200.00 and interest of N 1,244,155.

Clause 4 of Exhibit ‘C’. the Deed of Guarantee provides as follows:

“Any admission or acknowledgement in writing by the Borrower or any person on behalf of the Borrower of the amount of the indebtedness of the Borrower or any statement of account furnished by the Lender the correctness of which is certified by an official of the Lender, shall be conclusive and binding on the Guarantors …”

Exhibits NN and 00 are the Statements of Account of the plaintiff duly certified by D.W.I, an official of the defendant. Both Exhibits are conclusive that the principal loan was N6,120,267.97 while the interest was N3,761,016.34 as at December, 1994. By virtue of Clause 4 of the Deed of Guarantee above, this figure is conclusive and binding on the plaintiff. Parties are bound by an agreement they freely entered into. See Baba Nigerian Civil Aviation Centre Ltd (1991)5 NWLR (Pt. 192) 388; UBA Limited v. Umeh & Son Ltd (1996) 3 NWLR (Pt. 426) at 565 and SCOA Nigeria Ltd. v. Bourdex Ltd (1990) 3 NWLR (Pt.138) 380 at 389.

From the foregoing. the court below was therefore right, in my view, to hold that the principal loan was N6, 120,207.00 which sum incorporated N5,850,267.97 and interest of N270.000.00 during construction. The plaintiffs attack in its brief on the pleading being at variance as to the principal sum owed in the court below ought therefore to be discountenanced or ignored. See Kolawole v. Alberto (1989) 1 NWLR (Pt. 98) 382 at 399 and Okonji v. Njokanma (1991) 7 NWLR (Pt. 202) 131 at 153. This is the moreso in the instant case that issues were joined by the parties that N2.9 million is not the principal loan on the establishment of Letter of Credit. The defendant led evidence to prove that the principal loan was over N5,326,200.19, an account also admitted by the plaintiff. By the agreement of the parties, the interest during construction put at N270.000.00 vide Exhibit OO is also capitalized to form part of the loan. Although the defendant did not file a counterclaim nor was judgment given in its favour upon any claim, the correct amount owed as principal sum was an issue before the trial court as well as in the court below. It would appear therefore that the court below had a duty to decide on the issue, as indeed it did, rightly in my view, that the principal sum was N6, 120,207.00 as per Exhibit NN. This issue is thus answered in the affirmative.’

Issues No. Two & Three

The plaintiffs grouse here which are focussed on grounds 2 and 3 of the grounds of appeal are whether the court below was right when it held that the loan granted to the plaintiff was provided by the World Bank and that the said bank was the principal of the defendant as well as Midland Bank and whether the court below was right when it held that even if the Midland Bank was the defendant’s agent, the defendant cannot be vicariously liable for the negligent act of the Midland Bank without the latter being joined as a party.

That the plaintiff knew or had reason to know that the source of the Term loan was from the World Bank can firstly be gathered from relevant pleadings as follows:-

In paragraph 9 of the Amended Statement of Defence, the defendant pleaded thus:

“The defendant denies paragraph 9 of the Statement of Claim and avers that the facility granted the plaintiff is a World Bank Credit Line for Small and Medium scale enterprises (NIE) and had since lapsed. All unutilised loans revert back to the World Bank and the plaintiff is not being debited for the undisbursed 14,530 V.S. Dollars.”

By its paragraph 4 of the plaintiffs Reply to the Amended Statement of Defence the plaintiff pleaded as follows:-

“In reply to paragraph 9 of the Statement of Defence the plaintiff avers that since there was mutual agreement between the parties that the U.S.D. 14,530.00 should be used to offset part of the installation cost, the defendant was in breach of clause 5 of the Investment and Mortgage Agreement when it failed to remit the said sum for the agreed purpose.”

From the pleadings above, it is clear that the plaintiff never joined issue that the facility granted them was a World Bank Credit. In other words, the fact was never controverted by the reply as the plaintiff ought to do for the issue raised thereon to have been joined. See Ehimare v. Emhonyon (1985) I NWLR(P1.2) 177 at 188; and Overseas Construction Co. (Nig.) Ltd. v. Creek Enterprises (Nig.) Ltd (1985) 3 NWLR (Pt.13) 407 at 409. If the plaintiff did not deny that the facility granted them was from the World bank the plethora of documentary evidence adduced indicate beyond dispute that that bank is the principal whereas the defendant is their agent for the purpose of meeting the needs of small and medium scale enterprises in Nigeria show as follows:-

Exhibits A2, EE and LL speak loudly for themselves. Thus, Exhibit A2 the Letter of Intent states for instance that:

“I am pleased to inform you that after due consideration to your application the Nigerian Bank for Commerce and Industry has approved an Investment in Artra Industries Limited by the way of Term Loan ofN2,900,000.00 (Two million, nine hundred thousand naira only) in the WORLD BANK LINE CREDIT on the terms and conditions contained in the Investment and Mortgage Agreement.” (Italics supplied by me).

In their letter dated 21/9/93 the plaintiff wrote:

“It is very important to make a recap of the history of this project which NBCI are very much aware of i.e. the fact that NBCI disbursed the 100%costofPlantsand Machinery on the World Bank Line of Credit for USD 734,470 by means of an irrevocable and confirmed Letter of Credit.” (Italics supplied.)

In paragraphs a, b, and c of Exhibit EE, the defendant notified the plaintiff of the following facts leading to the cancellation of the first Letter of Credit No. LC 880230/WB:

Having opened the LC on the 12th August. 1988 we despatched our ‘application for special commitment letter’ to World Bank on the 11th August………………………. ”

(b) On the 29th August, 1988, the World Bank forwarded its Commitment Guarantee ‘to Midland Bank to enable the latter add its confirmation to the Letter of Credit.”

(c) The World Bank sent a copy of its approved Special Commitment Guarantee to us in this bank on 13th September. 1988. On the basis of this World Bank Special Commitment, Midland Bank ought to have added its confirmation to the credit, but we did not receive Midland Bank’s confirmation advice prior to the expiring of credit.”

On viva voce evidence rendered at the trial P.W.1, Mr. Olawale Banwo admitted that:

“By June, 1987 I got a letter of Intent guaranteeing us a sum of N2.9 million as term loan on the World Bank Credit Line, which is meant for the purchase of only plants and equipment.”

When cross-examined, however, P.W.1, said:

“I do not know that the loan is from the World Bank.”

The court below after a careful appraisal of the quantum of evidence adduced before the trial court came to the conclusion, rightly in my opinion, that in the disbursement of the loan three banks were involved viz the defendant bank, the World Bank and the Midland Bank. As it was the case of the defendant that the plaintiff was aware that the source or the fund was the World Bank but the plaintiff throughout the cross-examination of its Chairman denied the fact the court below resolved the conflict thus created when it held inter alia:

“But whether the trial court was right in its finding that the plaintiff had no cause to believe that the loan was from the World Bank is a different matter. This is so because the Chairman and Managing Director of the plaintiff had in examination-in-Chief appeared to indicate that he knew that the loan was from the World Bank….. but denied that fact in cross-examination. By the contradiction in his evidence, he ought not to have been believed. Besides, the documents tendered bear eloquent testimony that the plaintiff knew that the source of the fund was a World Bank Line of Credit. It is well established that where there is oral as well as documentary evidence, documentary evidence should be used as a hanger from which to assess oral testimony: See Kimdey & 11 Ors v. The Military Governor of Gongola State & ors. (1988) 2 NWLR (Part 77) 449. I am of the view that based on the pleadings, the contradictory evidence of the plaintiffs Managing Director and the plethora of documentary evidence tendered the learned trial Judge ought to have found that the plaintiff knew that the loan in question was provided by the World Bank which was the principal of the defendant and the Midland Bank.”

I cannot agree more since the plaintiff in arguing its brief has sought to limit the court below to only Exhibits ‘B’ and ‘C’ in isolation of other exhibits before the Court and trying to establish the fact that the plaintiff was aware of the source of the fund – the phrase “World Bank Line of Credit” being clear and unambiguous. Besides, the plaintiff was not misled by this phrase since it had no doubt as to the source of the fund while the denial of its Managing Director in cross-examination made it necessary to refer to other documents to resolve the issue. Be it noted that the position of the World Bank as the provider of the funds and therefore the principal of the defendant is not derogated from by the fact that it was not a party to the agreement Exhibit ‘C’. The problem arose from the finding of the trial court wherein it held inter alia that:

“Therefore since the defendant had chosen to perform its duty under Exhibit ‘C’ through the World Bank and Midland Bank, and during the course of performing that duty, one of the agents (the Midland Bank) neglected in the performance of such duty, it is only fair and equitable that the defendant be held liable for the negligence of the Midland Bank. One of its agents and I so hold.”

The court below declined to uphold, rightly in my view, the above conclusion by answering same in the negative. However, when on its own it held that “the loan in question was provided by the World Bank which was the principal of the defendant and the Midland Bank,” I think it fell into a serious error. This is because the question of principal/agent relationship between the World Bank on the one hand and the defendant and Midland Bank on the other hand could not have arisen in so far as the transaction was concerned. Be that as it may, no miscarriage of justice could be said to have been occasioned on the point. See Far East Mercantile Co. Ltd v. Jackie Philips Photos Ltd (1974) 11 Sc. 225 at 231-232 and Eme v. The State (1964) 1 All NLR 416.

The two issues considered together are accordingly answered in the affirmative.

Issue No.4

This issue poses the question whether having regard to the facts and circumstances of this case the court below was right when it held that the exemption clause of clause 11(iii) of the Investment and Mortgage Agreement (i.e. Exhibit ‘C’) provided a complete exemption to the defendant for the consequences of the failure to confirm the 1st letter of Credit.

Now, clause 11 of Exhibit ‘C’ provides as follows:

“11 (iii) All risks of foreign exchange including fluctuations howsoever caused shall be borne by the Borrower,” (Italics supplied by me).

The above provision is bereft of any ambiguity. Its clear purport, in my judgment, is to exonerate the defendant from all risks of foreign exchange, and more especially, that which arises from fluctuations in the exchange rate. The reason for such fluctuations, it would appear, is not important. The duty of the court is to interpret the agreement in enforceable terms without more. See National Salt Co. R of Nigeria Ltd v. Mrs. M.J. Innis Palmer (1992) 1 NWLR (Part 218) 422. In the instant case, the only contract is between the plaintiff as the buyer of the Machinery and the defendant as the issuing house. If there is any liability such must flow from the terms of the contract binding the parties. The contract between the plaintiff and the defendant is Form M annexed to Exhibit E – the application to purchase foreign currency. The mode of payment requirement by the plaintiff is IRREVOCABLE LEITER OF CREDIT in a transaction between the plaintiff and the defendant i.e. a contract between the buyer and the issuing bank wherein the duty of the defendant is to issue to the plaintiff a letter of credit in strict compliance with the buyer’s instruction. See Akinsanya v. U.B.A. Ltd (1986) 4 NWLR (Pan 35) 273 at page 303. In the instant case where although the plaintiff admitted that the Letter of Credit was opened on the 20th May, 1988 but that the defendant was negligent by failing to confirm the same to enable the supplier proceed with the manufacturing of the plant, machinery and equipment the defendant having complied with instruction on Form M cannot. in my view, be held liable for the failure of Midland Bank to add their confirmation to the letter of credit – a non-contractual requirement between the parties. On this score alone, the defendant cannot bear the responsibility or the risk of f1uctuation of the foreign exchange by reason of failure to confirm the 1st Letter of Credit. The exclusion clause in this case is quite a reasonable one having regard for quite some lime, to the less than stable value of the naira – its aim being to protect investors in the defendant- as the person who stands to benefit from a transaction, should also bear the risk arising thereof. See Wallellsteiner v. Moir (No. 2) (1975) 1 All E.R. 504 at 589 where Denning M.R held inter alia:

“It is a well known maxim of the law that he who would take the benefit of a venture if it succeeds, ought also to bear the burden if it fails.”

As I take the firm view that the plain construction attributable to the said exclusion clause by the court below is most reasonable in the circumstances and ought to be sustained, my answer to issue (iv) is also rendered in the affirmative.

Issues No.5 & 6:

These issues (which is defendant’s issue 4 and are predicated on grounds 5 and 6 of the grounds of appeal) ask whether the court below was right in holding that the defendant had absolute discretion to grant or refuse to grant consent to the plaintiff to create a further mortgage or charge on its assets after granting the first consent to the Commerce Bank PLC. Also whether the court below was right when it failed to consider the issue as to whether or not the defendant unreasonably withheld the exercise of its discretion (if any) under clause 28 of Exhibit ‘C’ and if the answer is in the negative, whether the defendant unreasonably withheld its consent under the aforesaid clause. After reference was made to clause 28 of Exhibit ‘C’ (reproduced in plaintiffs brief for emphasis) it was contended that notwithstanding the fact that the court below had rightly held that the clause’s object is to enable it (the defendant) to protect its Investment, its implications is that having charged in favour of the defendant by way of a second floating charge all its floating assets, the plaintiff may give a first charge on the said floating assets to enable it obtain working capital from any Commercial Bank up to the maximum of N45,000.00 and that any further right to create any Mortgage or charge on the said floating assets shall only be exercisable subject to the prior consent in writing of the defendant. It is clear from the above, it is argued, that (he gram of the consent under the above clause is not lied to any other factor besides the express demand for consent. In other words. it is not a condition precedent to the grant of consent that the plaintiff must have commenced the repayment of the loan or interest. The court below, which it is further submitted. was wrong in its reasoning and conclusions in construing the clause. appears to be saying that since the defendant had earlier granted consent to the plaintiff in favour of Commerce Bank PLC to finance its fixed assets, the defendant was no longer under a duty to grant any further consent in favour of any other bank for its working capital.

With utmost due respect, the above line of argument adopted by the plaintiff cannot be correct if cognisance is taken of the full purport of Clause 28 of Exhibit ‘C’ which conferred power on the plaintiff to execute a first charge on its book debts, stocks-in-trade and work in progress to obtain working capital from a licensed commercial bank up to the maximum of N45,000.00 and then added a proviso, to wit:

“Any further right to create any mortgage or charge on its books debts, stock-in-trade, work in progress and moveable assets shall only be exercisable subject to prior consent in writing of the lender.”

The court below, in my opinion, had therefore rightly construed this proviso as conferring a discretionary power on the defendant to decide whether or not to grant consent for any further mortgage or charge above the specified amount to be effected on the plaintiffs assets already mortgaged or charged with the defendant. It certainly cannot be, as contended by the plaintiff, a requirement of mere notice without more, of the plaintiffs intention or desire to effect further mortgage or charge on its assets already mortgaged with the defendant. In George v. Khoury (1965)1 All NLR 91, the articles of a private company empowered the directors to refuse to register a transfer to which they had not consented. It was held that this was a discretionary power which must be exercised by a vote of the board ad hoc. See also Metal Construction (WA.) Ltd v. Migliore (1979) NCLR 462: (1979) 6-9 SC. 163 and Re Hackney Pavillion Ltd (1923) All E.R. 524.

If it is thus accepted that the above proviso conferred a discretion, upon what terms, one may ask, should it be exercised It is the plaintiffs argument that once a demand is made the defendant must grant its consent. With due respect, this cannot be so as the essence of discretion will be defeated if that essence of option to pick and choose is absent. Discretion means equitable decision of what is just and proper under the circumstance or a liberty or privilege to decide and act in accordance with what is fair and equitable under the peculiar case guided by the principles of law. See Blacks Dictionary of Law, 5th Edition page 419; Ejiamike v. Ejiamike (1972) E.C.S.L.R. Vol. II (Part 1) 11 and Doherty v. Doherty (1964) 1 All NLR 299; (1964) NMLR 144. I am satisfied that in the case in hand this was exactly what the defendant did when by its letter, Exhibit ZZ addressed to the plaintiff, it indicated as follows:-

” ……the bank is unable to further dilute the existing pari passu sharing security arrangement due to the fact that doing so would expose the bank to a very low assets coverage ratio that is unacceptable. ”

The court below in rightly upholding this exercise of discretion by the defendant held inter alia (per Edozie, JCA) as follows:

“How can the defendant protect its interest if it has no discretion to refuse the consent to diminish its assets If the defendant has no discretion there could have been no requirement as to the prior consent in writing. The fact that the defendant called for a revised cash flow projection did not automatically mean that it must grant its consent. It was evident from the record that the plaintiff made no repayment of the loan since commencement of operation in May, 1992 The second draw down was the defective date, the 18 months moratorium would expire by January, 1991. Yet by 29/3/93 when the 2nd application to create a further charge was made the plaintiff had paid only N20,000.00”

See also Section 279(3) of the Companies and Allied Matters Act, Cap. 51 Laws of the Federation 1990 which relevantly provides:

“A director shall act at all times in what he believes to be the best interest of the company as a whole so as to preserve its assets, further its business, and promote the purposes for which it was formed, and on such manner as a faithful, diligent. careful and ordinarily skilful director would act in the circumstances.”

In the light of the foregoing, there is no doubt that the exercise of discretionary power such as in this case, falls within the management power which is by Section 63(3) of the Companies and Allied Matters Act (supra) conferred on the directors. In exercise of such power, the directors must adhere strictly to the statutory provision which enjoins them to consider the interest of the company as paramount. In the case in hand, the directors of the defendant bank being therefore alert to their responsibilities, could not have exercised their discretion in favour of the plaintiff, the proper effect of which would be to further dilute the defendant’s security, when the plaintiff is already in breach of its previous undertaking.

On the second arm in these issues argued together, to wit: issues 5 and 6, the plaintiff through its counsel has urged us to answer same in the negative and to hold that the defendant unreasonably withheld its consent under Clause 28 of Exhibit ‘C’ aforesaid. After we were specifically referred to the holding of the learned trial Judge in his judgment to the effect that –

“Again, once the plaintiff has made an application for grant of consent, the defendant has no discretion under clause 28 to refuse such consent. Assuming the defendant has a discretion in the grant of such consent, I am of the view that the consent was unreasonably withheld in view of the fact and circumstances of this case.”

The above was specifically appealed against by the defendant in Ground 5 of the Notice and Grounds of Appeal and there from an issue to cover same was formulated in the court below. That notwithstanding, it was contended, the court merely dealt with the aspects which touched the question as to whether or not the defendant had discretion whether to grant or refuse consent under Exhibit ‘C’. Besides, it was further argued, their Lordship of the Court below did not go further to determine the arm of the issue which touched on whether or not the defendant unreasonably withheld the exercise of its discretion under Cause 28 aforesaid.

It was next argued that a court of law must consider all issues properly raised before it unless of course the determination of such issue will not materially affect the case. The case of Sanusi v Ameyogun (1992) 4 NWLR (Part 237) 257 at 540 was cited in support of the proposition. In addition, it was contended on the authority of Madike v. Inspector General of Police (1992) 3 NWLR (Part 227) 70 that it is also settled law that where a court of law fails to consider an issue properly raised before it, an appellate court can resolve same. We were in consequence of the failure of the court below to act in this regard urged to resolve the issue in favour of the plaintiff. This is so, it is further submitted, because when Savannah Bank of Nigeria PLC approved the sum of N1 million for the plaintiff, the latter applied to the defendant for consent to enable it create a further mortgage or charge over its assets in favour of the said bank as required by clause 28 (ibid). After adverting our attention to the application for consent vide Exhibit ‘Y’ in this proceeding dated 29/3/93, it was pointed out how the application was accompanied with a cash now projection Exhibit ‘W’ which showed how the money would be utilized and the anticipated earnings. It was further pointed out that when the defendant received the application, it requested the plaintiff to carry out certain amendments on the Cash Flow Projection i.e. Exhibit ‘W’. Based on the above, it was maintained, an amended Cash Flow Projection which is Exhibit ‘X’ was jointly prepared by both parties and later submitted to the defendant in May, 1993. After our attention was drawn to the evidence of P.W. 1 and P.W. 2 in the record of proceedings it was further argued in the plaintiff’s brief that not only were the above pieces of evidence never challenged by the defendant, D.W. 1 who not only admitted that Exhibit ‘X’ was received by the defendant, agreed under cross examination that Exhibit ‘X’ production was to start in August, 1993. The foregoing notwithstanding the defendant did not grant consent and the position remained the same until the plaintiff went to court to compel the defendant to grant consent. The court, it was pointed out, decided the case in favour of the plaintiff and the court’s order is contained in Exhibit ‘Y’ in this proceeding. It was after the court’s judgment in Exhibit ‘Y’, it was demonstrated, that the plaintiff received Exhibit ‘Z1’ which is a letter dated 30/11/93 but dispatched on 8/12/93 as per Exhibit ‘Z2’ which is the Courier Service Slip showing the date it was dispatched. The three major issues raised in Exhibit ‘Z1’, i.e. letter dated 30/1/93, it was submitted, were taken care of and reflected in Exhibit ‘X’ which Exhibit was never faulted by the defendant. The issue of non-repayment of the loan or interest, the appointment of a Sole Administrator for the defendant and the attendant problem faced by the said Administrator, it was further argued, were never discussed with the plaintiff at any meeting or in any correspondence. In view of the above, it was finally submitted, even if the defendant had a discretion to refuse to grant consent under Clause 28 of Exhibit ‘C’ (which was not conceded) such discretion was unreasonably withheld in this case.

The short answer to the queries raised here can be found in the testimony of D.W1, Peter Enesi whose evidence the trial court wrongly indicted but the court below rightly in my view, set aside after evaluating and appraising same. Said D.W.1 at pages 52 and 53 of the record:

“Under Exhibit ‘C’, it is the duty of the plaintiff to provide working capital. The plaintiff took loan of N1.7 million from Commerce Bank as working capital which later rose to N3.06 million. It is the claim of N1 million being the difference in the costs of materials between April, 1993 and January, 1994, this is not only unjustified but unfounded, as we are not the cause for the increase in the prices. We are not obliged to grant more loans or grant further consent to obtain more loans……………….. ”

That the court below (per Edozie, JCA) showed no sign of over sightedness or obliviousness of the above piece of evidence as contained in one of the issues raised by the plaintiff, it undertook a meticulous review of same at page 236 and 237 of the record. That the court below gave full treatment to the issue relating to the matter and adequately so, can be deciphered from page 246 of the record wherein it observed inter alia thus:

“It is submitted in the plaintiff’s brief that clause 28 above does not make the right to create further charge or mortgage subject to the repayment of loan to the defendant or any other creditor and that once the plaintiff makes an application for consent pursuant to clause 28 aforesaid, all that the plaintiff can do is to ensure that its own interest is adequately protected and that once that was done it has no discretion to refuse such consent. How can the defendant protect its interest if it has no discretion to refuse the consent to diminish its assets If the defendant has no discretion, there could be no requirement as to its prior consent in writing. The fact that the defendant called for a revised cash flow projection did not automatically mean that it must grant its consent. ……”

If the above extract was not an adequate or should I say exhaustive treatment of the matter raised as an issue before the trial court and embodied as defendant’s issue 5 in the court below, I cannot imagine any such issue being side-tracked. And granted that what in my view is considered as an exhaustive treatment of the issue raised and considered falls short of anything adequate (which is not conceded) I am of the view that what the court below decided cannot be said to amount to a substantial miscarriage of justice. See Far East Mercantile Co. Ltd v. Jackie Philips Photos Ltd (1974) 11 Sc. 225, 231-232and Eme v. State (1964) 1 All NLR 416, No retrial is called for in a matter such as this, See Dantumbu v, Adelle (1987) 4 NWLR (Part 65) 314, And I so hold.

This issue is accordingly resolved against the plaintiff.

Issues 7, 8, 9, 10, 11 AND 12 Considered together

These issues which are distilled from grounds 7, 8, 9, 10, 11 and 12 respectively of the grounds of appeal and symmetrically dove-tail into the defendant’s issue No.6, constitute the plaintiffs complaints relating to the various sums awarded as damages by the trial court but disallowed by the court below. In considering them together, I wish to proceed under the following four headings.

(a) 70% loss of anticipated turn-over/earnings (i.e, N1.26 million) per month on the utilization of the working capital beginning from 1st August, 1991 to 31st March, 1994.

(b) The difference between the cost of raw materials, equipments and spare parts as at April, 1993 and January, 1994 which amounts to N1 ,000,000,00.

(c) N50,000 general damages.

(d) The award of N121,000,00 equivalent of USD14,530 still held by the defendant being balance of the undisbursed terms loan as per Exhibit K which is N121,000,00

The first leg of the complaint (a) shortly put, is as to whether the court below was right when it held that the award in respect of loss of anticipated turn over/earnings made in favour of the plaintiff which was unjustified because the special damages on which it is predicated were not particularised and that even if the defendant is precluded from complaining about particulars, Exhibit ‘X’ (the Cash Flow) tendered in evidence in proof of the claim, has no weight and further that there was no basis for calculating the claim of N 1.26 million every month.

Now, when the court below set aside the award of N1.26 million for every month, one of the reasons it gave was that:

“It was therefore not within the contemplation of the parties that the defendant has to provide working capital for the plaintiff.”

The court below then went on to consider the provisions of Clause 36(g)(iii) of Exhibit ‘C’ to the effect that adequate arrangements satisfactory to the lender had been made for provision of working capital for the operation of the project. The gravamen of the plaintiff’s claim for loss of anticipated earning is that as a result of the failure of the defendant to grant consent to enable it obtain a draw down of the working capital granted by the Savannah Bank of Nigeria PLC, it could not commence full production as at August, 1993. It was the plaintiffs contractual obligation to have made satisfactory arrangements for procurement of working capital before commencement of operation in May, 1993 but it did not do so. Again, the plaintiff and the sponsors had agreed that any overrun in project costs or shortfall in the finance shall be met by them without recourse to the defendant and devoid of qualification. Therefore, requesting the defendant to grant further consent to create further charges is contrary to Clause 5 of Exhibit A2 which states that –

“5. The company and sponsors shall undertake that any overrun in project cost or shortfall in the source of finance as envisaged shall be met by them without recourse to NBCI.”

Thus, the reasoning and conclusion of the court below is in my opinion, justified by the term of contract between the parties and the defendant, in my view, cannot be penalised for failure of the plaintiff to abide by the terms of the contract. And since the defendant had no contractual obligation to provide working capital it cannot be penalised for holding its consent. This is only just and equitable.

(6) Another reason for disallowing the award of N1.26 million is that the claim was not particularised. Exhibit ‘X’ upon which the claim was based has no weight, and as a projection in a feasibility report, is not proof of such anticipated profit.

What is more. the report was not authenticated by anybody. Exhibit ‘X’, titled “Realistic projected cash flow for 12 months” was tendered by P.W. 1, the Managing Director of the plaintiff. As there was no explanation as to what the projections connoted and nobody signed it (see Aku Nmecha Transport Services (Nig.) Ltd. v. Atoloye (1993)6 NWLR (Part 298) 233 at page 254 A-B), the findings and conclusion of the court below are amply supported by authorities. See also A.G. of Oyo State v. Fair-Lakes Hotel (No.2) (1989) 5 NWLR (Part 121) 255 at 284. In the former case where the expert was not called to give evidence, Exhibit 3 (a V.I.O’s report), had not all the evidential or probative value intact. He was not available in court to be cross-examined, as he did not give evidence. The witness who tendered Exhibit 3 was not competent to answer questions on it. As if the above was not enough, to shake the veracity of the exhibit, the document itself H was in self contradiction.

In the latter case, a feasibility report was tendered as Exhibit B by the P.W. 1 who was not the maker of the document. The maker Messrs Pannel Kerr Foster and Company, a firm of chartered accountants did not give evidence for the plaintiff and the court did not attach any weight to the document which at best remained a mere projection and was so held by the Court of Appeal. This court on appeal affirmed the judgment of the court below, See also Uwa Printers Ltd v. Investment Trust Ltd. (1988) 5 NWLR (Part 92) 110 at 121-122 where this court upheld the decision of the Court of Appeal disallowing an award of N645,676.08 as anticipated loss of profit for reason that the auditors report, Exhibit 29, was based on another document Exhibit 1. Another case in which the award of loss of profit was refused was the case of Barau v. Cubits (Nig.) Ltd (1990) 5 NWLR (Part 152) 630 at page 648 G-H and page 649 E-F. The plaintiff’s contention therefore that as Exhibit ‘X’ was jointly prepared by both parties and was unchallenged, the court below was in error to hold that the document has no weight, it is in my view, unsustainable. This is because both parties here are abstract entities. Credible evidence must be given e.g. that of a staff who prepared the document and who could explain the basis of its projections. In the present case neither P.W.1 nor P.W.2 explained the basis of its projections. The evidence itself is self defeating and in that light, the defendant had no obligation to cross-examine on worthless evidence. In proper cases, unchallenged oral evidence of a party establishing his claim has been held to be sufficient proof vide Nwbuoku v. Ottih (1961) ANLR 507 at 508; (1961) 2 SCNLR 232.

Where, as in the instant case the evidence is self defeating and unacceptable, the court is not obliged to act on it. See Jalingo v. Nyame (1992) 3 NWLR (Part 231) 538 at 545. See also Sommer v. F.H.A. (1992) 1 NWLR (Pt. 219) 548. The cases of Osuji v. Isiocha (1989) 3 NWLR (Part 111) 623 at 638 and Obimiami Bricks & Stone (Nig.) Ltd v. African Continental Bank Ltd (1992) 3 NWLR (Part 229) 260 at 293-294 are inapplicable for the sheer reason that the plaintiff has the onus of proof of its case as per Section 137 of the Evidence Act. However, since there was no credible evidence in proof of the anticipated turn over, it cannot succeed on the strength or weakness of the defence. Moreover, as the basis of the calculation at paragraph 4.38 of the plaintiff/appellant’s brief does not justify the award of N 1.26 million for 18 months, the various sums quoted therein, in my view, are the total cost of production for each item which includes cost of raw materials, labour and overheads. Since damages are not awarded for the gross income but rather for net income or profit where as in the case in hand, the cost of production is not known an award on net income or anticipated profit based on speculation cannot be allowed to stand. Thus, the court below was justified, in my opinion, in setting aside the award as not having been established. See Odulaja v. Haddad (1973) NSCC 357; (1973) 11 SC 537.

(C) On the grouse wherein the plaintiff indicts the award of N1,000,000.00 being the difference in the cost of raw materials, equipments and spare parts between April, 1993 and January, as wrongly made, 1994. I can do no better than to adopt in its entirety what the learned Justices of the court below said in disallowing the award. Said the writer of the lead judgment, Edozie, JC.A. and concurred by Oguntade and Muntaka-Coomasie, JJ.CA:

“As earlier postulated, by the Investment and Mortgage Agreement Exhibit C, the responsibility for the procurement of raw materials and spare parts as listed in Exhibits DD I and DD2 rested squarely on the plaintiff and it was failure to make adequate arrangement as it had been contracted and not the refusal of the defendant to give consent for loan that led to the alleged loss resulting from the fluctuation in prices of raw materials. I will also set aside the award as being too remote.”

This is a valid and an impeccable conclusion with which I am not prepared to interfere or disturb.

On the award of N50,000.99 as general damages, the plaintiff in its ground of appeal No. 12 attacked the setting aside of this sum, pointing out that the issue distilled therefrom was canvassed by the plaintiff at paragraph 4.49 of its brief and in disallowing this award the court below held, rightly in my view, as follows:

“However, by the law against double compensation, a party who has been fully compensated under one head of damage for a particular injury cannot be awarded damages in respect of the same injury under another head.” See: Onago v. Micho & Co. (1961) ANLR 324 at 328;(1961) 2 SCNLR 101″

It is the plaintiff’s contention here that this award as general damages was proper and justified by the conduct of the defendant who deliberately refused to comply with the order of mandamus (Exhibit Y) made against it on 2/12/93. The award of N1,000,000.00, be it noted, covered the period 1st April, 1993 to January, 1994. The plaintiff was also awarded N 1.26 million every month from 1st August, 1993 to 31st March, 1994. This is for both anticipated loss of turnover/earning and the difference arising from the price of raw materials, equipments and spare parts. Thus, the plaintiff had been adequately compensated. See West African Shipping Agency v. Kala (1978) 11 NSCC 114;(1978)3 SC21 where this court took the view that the award of general damages is another way of compensating the plaintiff or the loss of expected profit and the freight on the goods. Thus, the court below was justified in setting aside the award of N50,000.00 general damages purported to have been awarded to the plaintiff on the ground that such an award constitutes double compensation. See: Nigerian Arab Bank Ltd v. Shuaibu (1991) 4 NWLR (186) 450 at 456; Imo Concord Hotel Ltd v. Anya (1992) 2 NWLR (Part 234) 210 and Mercantile Bank v. Adalma (1990) 5 NWLR (Part 153) 747 at 751-752. In the absence of any proof, a plaintiff would only be entitled to nominal damages, it being agreed that the plaintiff did not prove loss or damages under the head of general damages. See Ogbechie v. Onochie (1988)1 NWLR (Part 70) 370 at 396. (d) On the award of N121,000.00 representing USD 14,530, this is an issue arising out of plaintiffs appeal ground No. 11. In its consideration of the issue as to whether the plaintiff deserved to be entitled to the amount the court below held, rightly in my view, thus:

“In the situation where the plaintiff is in default of repaying its accrued debt it cannot be heard to be demanding more money from its creditor.”

It needs to be pointed out here and now that all arguments canvassed at paragraph 4.48 of the plaintiff’s brief to the effect that the error the court below fell into was it’s either going outside the pleadings and evidence when clearly the issue does not emanate or flow from that ground of appeal, or howsoever the plaintiff’s complaint, goes to no issue. In thus setting aside this award the court below, in my view, among other reasons took into consideration the fact that the plaintiff was in default of loan repayment and therefore could not be seen as asking for more money. Besides, by Order 3 rule 23 Court of Appeal Rules, 1981 as amended, the court below is empowered to give any judgment or make any order that ought to be made although the party against whom the judgment or order was made may not have appealed against such decision. The court below, in my opinion, was in consequence right to have set aside the judgment of the trial court awarding N121,000.00 to the plaintiff as the purported balance of the undisbursed loan.

All these issues having been duly and fully considered are accordingly resolved against the plaintiff.

Issue No 13

Finally, the plaintiff’s grouse here is whether having regard to the totality of evidence adduced at the trial court, the court below was right in setting aside the decision of the trial court.

It is enough for me to say here that having regard to all the submissions made in respect of all the other issues hereinbefore considered, the court below was, in my opinion correct to have set aside the decision of the trial court which, in my judgment was not the result of a proper appraisal and evaluation of the evidence adduced thereat. See Fashanu v. Adekoya (1974) 6 SC.83 at 91; Chief Woluchem v. Chief Gudi (1981) 5 SC 291 at 326 and Balogun v. Agboola (1974) 10 SC.111.

The result of all I have been saying is that this appeal lacks merit and it is hereby accordingly dismissed with N10,000.00 costs in favour of the defendant.

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SC. 27/1997