B. O. Famuyiwa Vs Folawiyo & Ors (1972)

LawGlobal-Hub Lead Judgment Report

FATAYI-WILLIAMS, J.S.C. 

On 27th November, 1959, Isaac Fafiolu (5th P.W.), a motor driver in the Ministry of Agriculture, Western Region, was driving one of the Ministry’s vehicles (identification No. 009856) from Ilaro to Abeokuta. The plaintiff (now appellant) then a 3200(pounds) per annum road overseer in the said Ministry, was one of the passengers in the said vehicle.

At a place called Ibese, Isaac Fafiolu saw a tipper lorry (identification No. LD 4429) driven by Ogundeji (2nd defendant) approaching in the opposite direction. When they met, the tipper lorry passed so close to the vehicle in which the plaintiff was travelling that it “brush passed” the said vehicle and severely injured the plaintiff who sustained a fracture of the right arm as a result. Having found that the 1st defendant was the owner of the said tipper lorry, the plaintiff commenced proceedings in the Lagos High Court in which he claimed against the two defendants as follows:

Particulars of Claim

The plaintiff’s claim against the defendants is for the sum of 317,000(pounds) being damages suffered by the plaintiff from the negligence of the second defendant in the driving and management of a motor vehicle No. LD 4429 at Ibese Village on the 27th November, 1959, as a servant or driver of the 1st defendant and in the course of his (2nd defendant’s) duty, whereby the said motor vehicle was driven with great force and speed against the vehicle No. 009856 in which the plaintiff was travelling and he (plaintiff) was severely injured and was thereby put to great pain and incurred and suffered loss.

Particulars of Personal Injury

The plaintiff sustained a fracture of his right arm and shoulder; he suffered severely from shock and had his right arm permanently injured.

Particulars of Negligence

The second defendant:-

(a) drove the said motor vehicle at an excessive speed;

(b) failed to keep a proper look-out;

(c) failed to keep properly to the left side of the road;

(d) failed to manage his motor vehicle as to avoid “brush passing” the vehicle in which the plaintiff was travelling;

(e) failed to keep the said motor vehicle under proper control.

Particulars of Damage

Loss of earning 2,000(pounds)

Pain and suffering 1,500(pounds)

Loss of capacity for the enjoyment of life 2,500(pounds)

Shortening of expectation of life 5,000(pounds)

Injury to health 2,500(pounds)

Future loss of earning 3,500(pounds)

………..

17,000 ………..

After pleadings had been ordered and duly delivered by the plaintiff and the 1st defendant (the 2nd defendant did not file any statement of defence), the learned counsel for the 1st defendant, on an application made ex parte on 10th November, 1964, obtained the leave of the court to issue and serve a “Third Party Notice” on the 3rd defendant. Paragraphs 4 and 5 of the affidavit in support of the ex parte application read:-

“4. By a policy of insurance dated 18th February, 1959 and made between myself of the one part and the Northern Assurance Company Limited of No. 40 Marina, Lagos of the other part, the Northern Assurance Co. Ltd. covenanted to indemnify me against the plaintiff’s claim herein.

5. I claim to be indemnified by the said Northern Assurance Company Limited against the whole of the plaintiff’s claim against me in this action, and I ask leave to issue and serve on the said Northern Assurance Company Ltd. a third party notice claiming such indemnity.”

On 14th December, 1964, the Northern Assurance Co. Ltd. made an unsuccessful attempt to set aside the third party notice. It must be noted that the object of the third party notice is to prevent multiplicity of actions and to enable the court to settle disputes between all parties to them in one action (See Baxter v. France [1895] 1 Q.B. 591 as per Lord Esher M.R. at p. 593). It is also to prevent the same question from being tried twice with possibly different results (See Benecke v. Frost (1876) 1 Q.B. at p. 422 per Blackburn J.).

Thereafter, the 1st defendant served his own statement of claim (not the statement of defence which he had filed in answer to the plaintiff’s statement of claim) on the third party (that is, Northern Assurance Co. Ltd.). Paragraphs 2-5 of the said statement of claim read:-

“2. The 1st defendant states that if the claim which ‘he contends’ is none the less sustained, he is entitled to be indemnified by the third party to the extent of the plaintiff’s claim and costs (including the 1st defendant’s costs) by virtue of a policy of insurance entered into between the 1st defendant and the third party on or about the 18th February, 1959, whereby the third party covenanted to indemnify the 1st defendant against all sums which the 1st defendant shall become legally liable to pay in respect of bodily or other injury to any person arising out of the use of the aforementioned vehicle.

3. The 1st defendant avers that sometime in 1959, his solicitors, Thomas, Williams and Kayode, gave notice of an alleged accident to the third party and warning them of their responsibility on the policy should the 1st defendant be held liable for the alleged accident.
4. By another letter dated 21st April, 1964, the 1st defendant by his solicitors wrote to the third party informing them of the plaintiff’s claim and reminding the third party of their duty under the said policy of insurance.
5. The third party has refused or neglected to indemnify the 1st defendant under the said policy in the event of the plaintiff succeeding in his claim against the 1st defendant. Whereof the 1st defendant claims to be indemnified by the third party to the extent of the plaintiff’s claim against the 1st defendant should the plaintiff succeed on the said claim.”

The third party’s reply to the above averments is in paragraph 3-9 of their statement of defence and reads:-

“3. Paragraphs 2 and 3 of the 1st defendant’s statement of claim are denied by the third party.

4. The third party admits the receipt of the 1st defendant’s solicitor’s letter dated 21st April, 1964, and gave a reply by letter dated 27th April, 1964, denying the receipt of any alleged notice from Thomas, Williams and Kayode, Solicitors or from anybody in 1959 as alleged or at all.
5. The 1st defendant insured with the third party under policy No. MB.605426/L and as a result of non-compliance with the terms of the said policy by the 1st defendant, the third party by letter on 22nd August, 1960 repudiated all liability to him under the said policy for the alleged accident. The third party will refer in detail to the terms and conditions under the said policy at the trial.
6. It was a term of the said policy of insurance that the 1st defendant shall within 12 months of such repudiation refer the matter to arbitration.
7. The 1st defendant did not refer the matter to arbitration within 12 months as provided in the policy and did not do so at any time.
8. Further it was a term of the said policy that the making of any award by an arbitrator shall be a condition precedent to any right of action against the third party by the 1st defendant and that such condition precedent has not been fulfilled.
9. That no dispute has arisen between the third party and the 1st defendant in the matter.

Whereupon the 1st defendant is not entitled to be indemnified by the third party.”

From the above averments, it is clear and beyond dispute that the liability of the third party in the present claim was a matter between them and the 1st defendant. No issue existed and none was joined between them and the plaintiff.

At the hearing on 12th January, 1966, Dr. Bailey (1st P.W.) an orthopaedic surgeon gave evidence as to the extent of the injuries sustained by the plaintiff from the motor accident. The plaintiff himself also testified that day in support of his claim. In answer to a question put to him under cross-examination by the leamed counsel for the third party, the plaintiff replied as follows:-

“Following the accident I was paid 212=12=6d(pounds) compensation by my employers. This was under the Workmen’s Compensation Act.”

On 1st February, 1966, the 2nd defendant appeared at the hearing in person. As we had pointed out earlier he filed no statement of defence. At the hearing that same day, Isaac Fafiolu (5th pl.w.), the driver of the plaintiff’s vehicle, testified as to circumstances leading to the collision between the 1st defendant’s tipper lorry driven by the 2nd defendant and his own vehicle and how the plaintiff’s right arm was fractured as a result. He was followed by Moses Abohwo (6th pl.w.) the policeman to whom the accident was reported and who went to the scene of the accident not long after. Another witness called by the plantiff is James Olabode Idowu (7th p.w.) a clerk in the Ministry of Agriculture, who was in charge of Establishment and Records at the material time. He testified as to the record of service of the plaintiff and how, because of his inability to continue his work as Field Overseer due to the injuries he sustained from the motor accident, he had to be invalided out of the service. To a question asked by the learned counsel for the third party under cross-examination, this witness replied:-

“I have no record of any payment having been made to the plaintiff as a result of this accident.”

The case was then adjourned to 23rd February, 1966.

At the resumed hearing on that date, the Court granted an application by learned counsel for the third party to amend the third party’s statement of defence by the addition of a paragraph 10 which reads:-

“10. If there is an indemnity as claimed by the 1st defendant which is denied the third party will contend that the plaintiff has no cause of action at common law.”

In his defence, the 1st defendant testified as follows:-

“The 2nd defendant was not my driver. I have never employed him. He never drove in the course of my employment. It was on my return from Europe that I was informed that the vehicle had been involved in an accident; that was in December 1959.”

He then testified about the communication which he had with the third party through his solicitor with respect to the accident. In answer to a question asked by the court, he admitted that the driver (2nd defendant) was employed at the material time by a firm known as the Construction Supplies Company of which he was one of the partners. He also admitted that it was another partner (Mr. Akinwunmi) who informed him of the accident on his return from Europe.

In his own testimony, the 2nd defendant admitted that he was the driver of the tipper lorry No. LD. 4429 on the material date but denied colliding with the plaintiff’s vehicle on that day or at all. He said he was employed by one Mr. Akinwunmi to drive the lorry and not by the 1st defendant. Under cross-examination, he admitted that the 1st defendant was one of the owners of the business for which he was working as a driver.

The third party called one David Greig. He said that the 1st defendant did not report the accident to them nor did he complete any accident report form up till the time he gave evidence in court. He further stated that it was the plaintiff’s solicitors who informed them of the accident.

In his judgment, the learned trial judge, when considering the position of the third party, observed as follows:-

“The third party, the insurers of the 1st defendant’s vehicle, had on the 4th January, 1965 been joined by an order of the Honourable Court made by Adedipe J., on an application made to him in that behalf by the 1st defendant. The purport of the application was to enable the assured to be indemnified by the insurers should plaintiff succeed in his claim.”

He then proceeded to find as follows:-

“In his final submission, it was contended by Mr. Sofola for the insurance company that the plaintiff had exercised the option open to him under the Workmen’s Compensation Act and the present claim is no longer maintainable. It was contended by Mr. Molajo for the plaintiff that the Workmen’s Compensation Act was not pleaded and consequently the defence could not rely on it to bar the plaintiff’s claim. But in Willis’s Workmen’s Compensation Act 37th Edition at p. 546, it is there stated by the learned author that:-

‘If it is proved during the hearing of the action against a stranger that the plaintiff has already recovered compensation from his employer, it is submitted that the judge is bound to give effect to the section and to give judgment for the defendant and that this right to judgment is not prejudiced by the fact that the defendant had knowledge of such recovery and has not given notice of the defence … .’

There is evidence that the defence knew that the plaintiff had been paid compensation under the Act. The plaintiff himself … under cross-examination. Even if the defence knew and did not plead it, the court would still be obliged to give effect to the provisions of section 26(a) of the Workmen’s Compensation Act aforesaid-vide Oliver v. Nautilus Steam Shipping Co. Ltd. [1903] 2 K.B. 639 ….

The question here is whether, in view of the provision of section 26(a) of the Workmen’s Compensation Act, a plaintiff who has already been paid compensation by his employers can maintain a subsequent action for damages based on the same injury My answer to the question is clearly in the negative.

The result therefore is that this action fails and is hereby dismissed.”

The plaintiff has now appealed against this judgment. His grounds of appeal are:-

(1) that the learned trial judge misdirected himself in law by holding that because the plaintiff accepted compensation for the injury from his employers under the Workmen’s Compensation Act he could not succeed at common law when there was no evidence that the plaintiff made an irrevocable option or that he knew that he had a right of action at common law apart from the right to compensation under the said Workmen’s Compensation Act.

(2) that he erred in law in failing to direct his mind to the evidence before him and thereby failed to consider whether the plaintiff would have failed or succeeded on the facts had he not received the compensation alleged; and

(3) that the judgment is against the weight of evidence.

In support of the first ground of appeal, Mr. Molajo for the plaintiff/appellant submitted that before the plaintiff/appellant could be debarred from claiming damages at common law there must be evidence that he was aware of the option open to him at the time he accepted the compensation under the Workmen’s Compensation Act (Cap. 222). Learned counsel then referred to section 27 of Cap. 222 (which is the same as section 29 of the English Workmen’s Compensation Act of 1925) which provides that there should be a written agreement signed by the plaintiff/appellant before he could be debarred from claiming. He then submitted that not only did the plaintiff/appellant not sign any written agreement as required by section 29, no evidence was adduced to show either that he was literate or that he was aware of his right to claim damages at common law at the time when he received the compensation. He then referred us to four cases namely Western Nigeria Trading Co. v. Ajao (1965) N.M.L.R. 178; Burke and Unsworth v. Elder Dempster Lines Ltd. [1939] 3 All E.R. 339; Deane v. H.F. Edwards and Co. Ltd. [1941] 2 All E.R. 274 at p. 281; Young v. Bristol Aeroplane Co. Ltd. [1946] 1 All E.R. 98 at p. 104; and Olsen v. Magnesium Castings and Products Ltd. [1947] 1 All E.R. p. 333. We agree that these cases show that if a plaintiff does not know that he has an option under the Workmen’s Compensation Act between accepting compensation under the Act and claiming damages at common law, he would not be debarred from claiming such damages. Thus in Young v. Bristol Aeroplane Co. Ltd. (supra) it was held that where a workman accepted some payments under the Act, in ignorance of the option, the alternative remedy was not lost. Again in the recent case of Knipe v. British Railways Board [1972] 2 W.L.R. at p. 131, Lord Denning, M.R., made some pertinent observations with respect to section 29 of the English Workmen’s Compensation Act of 1925. The observations show that the views of the English courts as to awareness of the option by the workman are still the same. This is what Lord Denning said:-

“British Railways said that, under section 29 of the Act of 1925, Mr. Knipe had an option either to take workmen’s compensation or to claim damages at common law. They said that he had received five weeks’ workmen’s compensation and thereby exercised his option ….

Cussack J. has found here that, although Mr. Knipe received payments, he did not know they were workmen’s compensation payments. He thought they were sickness benefit. In any case, it is plain that he did not know he had an option of claiming one or the other. He is, therefore, not barred by section 29 of the Workmen’s Compensation Act, 1925.”

It must be pointed out, however, that all these cases deal with acceptance of compensation under section 29 of the English Act, (the equivalent section in our own Act is section 27). That section deals with a claim in respect of an injury caused by the personal negligence or wilful neglect of the plaintiff’s employer or of some other person for whose act or default the employer is responsible. None of them applies to the circumstances of the instant case where the plaintiff has claimed not against his employer who had paid him compensation but against a stranger whose negligence caused the injuries for which he claimed damages. The relevant section in this respect is section 30 of the English Act or section 26 of our own Act and on which the judgment now appealed against was based.

The next question, therefore, is whether the views expressed in the cases to which learned counsel had referred us and which apply to section 29 of the English Act apply equally to a claim made under section 30 of the said Act. Section 26(a) of our own Act which is similar to section 30 reads:-

“26. Where the injury in respect of which compensation is payable under this Ordinance was caused in circumstances creating a legal liability in some persons other than the employer to pay damages in respect thereof:-

(a) the workman may take proceedings both against that person to recover damages and against any person liable to pay compensation under this Ordinance for such compensation, but shall not be entitled to recover both damages and compensation.”

The section was considered in Elligott v. Nebbett [1948] 1 All E.R. 514.

In that case an injured workman received payments from his employer on the understanding that they were not to prejudice his right of action at common law against a stranger in respect of his injury, and would be repayable by him in the event of his succeeding in such action, but would otherwise be treated as payments of workmen’s compensation. When the plaintiff claimed damages from the defendant for the injury on these facts, the defendant pleaded that the plaintiff was precluded from claiming damages by section 30(1) of the English Act of 1925 because he had already recovered workmen’s compensation from his employers. The court held that the plaintiff had not recovered compensation in such circumstances as to make the bar imposed by section 30( 1) of the English Act available to the defendant. This decision, with which we entirely agree, shows, albeit by implication, that the law applies to a defence raised under section 26 of our own Act and that the acceptance of compensation by a workman under our Act is a bar only if the workman knows or is deemed to know that he has an option as to whether to accept compensation under the Act or to claim damages from the stranger at common law.

In the case in hand there was no evidence before the learned trial judge that the plaintiff knew, or ought to have known, of this option at the time he accepted compensation from his employers. That being the case the learned trial judge should not have dismissed his claim on the ground that he had accepted such compensation.

With respect to the second and third grounds of appeal, learned counsel for the appellant contended that since the 1st and 2nd defendants never pleaded the acceptance of compensation under the Workmen’s Compensation Act as a defence to the claim, that defence was therefore not open to them and the learned trial judge should not have used the plea of the third party in their amended statement of defence to dismiss the plaintiff’s claim. It was further submitted that on the admissible evidence as it stood, both the evidence given by the plaintiff in answer to questions asked by the learned counsel for the third party as well as the defence of the third party should have been ignored and judgment given on the merits. For the respondents, it was submitted that even if the defence available under section 26 had not been pleaded, it was the duty of the court to take notice of it and to refuse the plaintiff’s claim if the defence was sustained.

As part of the judgment of the learned trial judge to which we had earlier referred, the court held that even if the defence knew and did not plead section 26(a) of the Workmen’s Compensation Act, the court would be obliged to give effect to it and relied on Oliver v. Nautilus Steam Shipping Co. Ltd. [1903] 2 K.B. 639, and a quotation from Willis’ book on Workmen’s Compensation as authority for this view. Having looked at Oliver’s case we are convinced that that case is no authority for the proposition that the Workmen’s Compensation Act need not be pleaded by any person relying on it. The whole of the quotation from Willis’ on which the learned trial judge also relied reads:-

“Procedure-If it is proved during the hearing of the action against a stranger that the plaintiff has already recovered compensation from his employer, it is submitted that the judge is bound to give effect to the section and to give judgment for the defendant; and that this right to judgment is not prejudiced by the fact that the defendant had knowledge of such recovery, and has not given notice of the defence under Order IX rule 4 of the County Court Rules, 1936.”

In the first place, this quotation merely puts forward the submission of the learned author and not a single authority was cited in support. Moreover, it is obvious that the learned author had the County Court Rules, 1936, in mind in his submission. We do not think we should be mesmerised by the authority of print particularly when the submission of the learned author is at variance both with our Rules of Court and with a long line of authorities such as Akwei v. Akwei 9 W.A.C.A. III at p. 115; NIPC v. Bank of West Africa Ltd. [1962] 1 All N.L.R. 556 at pp. 565-566; Paul v. George (1959) 4 F.S.C. 198 at p. 201; Ochonma v. Unosi (1965) N.M.L.R. 321; and Yassin v. Barclays Bank D.C.O. (1968) N.M.L.R. 380, where it had been held that a defendant must plead facts or statutes (or facts indicating the defence under such statutes) on which he intends to rely. In this connection, we also refer to Order 32, rule 13 of the Supreme Court Rules (Cap. 211 of the Laws of Nigeria, 1948 applicable in Lagos State) to which we refer in Yassin v. Barclays Bank (supra) which read:-

“The defence must allege any fact not stated in the statement of claim on which the defendant relies in defence, as establishing, for instance, fraud on the part of the plaintiff, or showing that the plaintiff’s right to recover or to any relief capable of being granted on the petition, has not yet accrued, or is released, or barred or otherwise gone. ”

This rule clearly shows that the fact that the plaintiff/appellant had received compensation from his employers must be specially pleaded by the 1st and 2nd defendants/respondents if they wish to rely upon it. A submission by Willis in his book cannot override the rule of court. It is our view that as they had not pleaded it the court should not have relied upon it when considering the plaintiff/appellant’s claim against them.

We will now proceed to consider the averment of the third party in paragraph 10 of their amended statement of defence which reads:-

“If there is an indemnity as claimed by the 1st defendant which is denied the third party will contend that the plaintiff has no cause of action at common law.”

We must point out that the third party had never disputed the plaintiff’s claim against the 1st and 2nd defendants/respondents. As a matter of fact their amended statement of defence was filed in answer to the averments in the statement of claim filed, not by the plaintiff/ appellant, but by the defendants/respondents wherein they claimed an indemnity against the third party. Throughout the proceedings the third party did not ask for, nor was he granted, leave to join as defendant in the action brought by the plaintiff/appellant against the defendants/ respondents. As a result, the third party never filed a defence to the plaintiff/appellant’s statement of claim. All the third party disputed, having regard to their pleadings, was their liability to indemnify the defendants/respondents who had claimed an indemnity against them.

The procedure with respect to a third party is clear. If a third party disputes the defendant’s liability to the plaintiff, the court may, on the application of the defendant, give directions which may include a direction that the third party shall have liberty to defend the action. The third party will then ask for leave to defend. We refer, in this respect, to the Order 16, rule 4(4) of the English Rules of the Supreme Court which is applicable and which reads:-

“(4) On an application for directions under this rule the Court may give the third party leave to defend the action, either alone or jointly with any defendant, upon such terms as may be just, or to appear at the trial and to take such part therein as may be just, and generally may make such orders and give such directions as appear to the Court proper for having the rights and liabilities of the parties most conveniently determined and enforced and as to the extent to which the third party is to be bound by any judgment or decision in the action.”

Where the third party obtains leave to defend the action against the plaintiff he will in general be allowed to do so upon any grounds which would have been available to the original defendant as a defence to the plaintiff’s claim. (See Callendar v. Wallingford (1884) 53 L.J.Q.B. 569). An insurer will, however, not be allowed to be added as defendant merely to enable a declaration of liability to be obtained where, as in the instant case, no dispute exists between him and the plaintiff. (See Carpenter v. Ebblewhite [1939] 1 K.B. 347 at pp. 357-358; and New India Assurance Co. Ltd. v. Odubanjo S.C. 85/1969 (unreported) of 8th October, 1971.)

In the present case, although the defendants/respondents applied for directions, none was given by the court and so no leave was granted to the third party to defend against the plaintiff/appellant’s claim. Instead, the court, on 22nd February, 1965, merely ordered pleadings as between the defendants/respondents and the third party, the defendants/ respondents to file their statement of claim within 30 days and the third party to file their statement of defence within 30 days thereafter. The effect of this was that the third party were neither parties to the plaintiff/appellant’s claim against the defendants/respondents nor did they file any defence to the plaintiff/appellant’s statement of claim, the amendment to their statement of defence notwithstanding. For this reason, the learned trial judge, since no defence under section 26(a) of the Workmen’s Compensation Act was properly raised against the plaintiff/ appellant’s claim even by the the third party should not have based his decision on it. He was therefore in error in holding that the payment of compensation was a bar to the plaintiff/appellant’s claim.

For the reasons which we have given above, this judgment, based as it were on a defence not put forward by the defendants/respondents and which was not therefore in issue between them and the plaintiff/appellant, cannot be allowed to stand. The defence was raised by the third party who, as we have shown, were not competent to raise it against the plaintiff/appellant having regard to the particular circumstances of the case.

The appeal is therefore allowed and the judgment of the Lagos High Court in Suit No. LD/443/63 delivered on 9th May, 1966 is hereby set aside. The case is accordingly remitted to the High Court for Lambo Ag. C.J., who originally heard the case, to decide the claim on the merits. Costs of this appeal in favour of the plaintiff/appellant are assessed at 72 guineas while the costs in the court below will abide the result.

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Other Citation: (1972) LCN/1437(SC)