B.b Apugo & Sons Limited V. Orthopaedic Hospital Management Boardo (2016)

LAWGLOBAL HUB Lead Judgment Report

KUDIRAT MOTONMORI OLATOKUNBO KEKERE-EKUN, J.S.C.

This is an appeal against the judgment of the Court of Appeal, Enugu Division, delivered on 7th July 2005 dismissing the appellants appeal and affirming the decision of the Enugu State High Court delivered on 20th December, 2000.

The facts that gave rise to this appeal are as follows: On 8th July 1987, the National Orthopaedic Hospital, Enugu entered into two contracts Exhibits A and B, with the appellant for the supply, delivery and installation of (a) X-Ray equipment and spare parts and (b) Prosthetic and Orthotic equipment from SIEMENS Aktiengessellschaft (AG) in Germany. In order to facilitate the procurement of letters of credit by the appellant from SIEMENS Aktiengessellschaft of Germany, the contract sum was paid in full. The appellant accordingly opened Letters of Credit with his bank, Allied Bank of Nigeria Limited. It later transpired that the Letters of Credit were only procured in respect of some of the goods.

When the goods in respect of which the Letters of credit were opened arrived,the appellant demanded further payment

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before it would release the goods. The appellant’s refusal to release the goods led the respondent to institute an action against the appellant and its bankers vide a writ of summons filed on 5/7/1988.

Upon being served with the originating processes, the appellant filed a statement of defence and counter claim. The appellant’s bank, Allied Bank Limited, sought and obtained an order of the trial Court striking its name from the suit on the ground that it was not a necessary party thereto and no reasonable cause of action had been disclosed against it.

Pursuant to orders made by the trial Court and affirmed by the Court of Appeal, the appellant was ordered to release the procured goods to the respondent. At the trial Court, the respondent made a claim against the appellant for the sum of 64,000 (Sixty-Four Thousand Pounds Sterling) being the value of the goods which the appellant failed to order from SIEMENS but for which it had been paid in full.

Pursuant to the order of the Court of Appeal, the appellant eventually delivered the portion of the goods it had ordered and received but failed to install them. The respondent was

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therefore compelled to engage a third party to install the equipment at its hospital at Enugu. Consequently, it sought and obtained leave to amend its claims to include the cost of installation against the appellant.

In its defence, the appellant contended that it had procured and delivered all the equipment ordered by the respondent and had in fact incurred additional expenses within the contemplation of the parties at the time the contract was entered into. That a review of the contract value was necessitated by the fluctuation in the cost of foreign exchange. It also contended that with regard to the first contract, Exhibit A, it was an agent of a disclosed foreign principal. It also refuted the respondent’s claim that it engaged a third party to install and rehabilitate the equipment.

Each party called one witness and closed its case. After considering the addresses of learned counsel, the learned trial Judge on 20th December 2000, entered judgment in the respondent’s favour as follows:

“(1) The sum of 64,000 (Sixty-Four Thousand) Pounds Sterling being the value at the time the breach occurred of one HT Transformer and two X-Ray Tubes