E. D. Obialo & Ors V. Amaobi Alfred Ugochukwu (2002)

LawGlobal-Hub Lead Judgment Report

ABOYI JOHN IKONGBEH, J.C.A.

The appellants carried on the business of estate surveyors. The respondent carried on the business of business consultants. On 13/07/87 the appellants engaged the services of the respondent for the purpose of securing for them a contract from the old Imo State Government for the rating and valuation of Aba/Obioma Ngwa rating and valuation area. They entered into a written agreement on the same day for the purpose. By the agreement the respondent was to be paid by the appellants30% of the contract fee as consultancy fees. In addition the respondent was to share the balance of 70% equally with the five appellants.

A contract worth N1, 600, 000.00 was later awarded to the appellants and they duly executed it. In course of time the first instilment was paid to them and they worked out 30% of it and paid same to the respondent. Thereafter nothing further was forthcoming from them despite the fact they had received further payments from Government. After fruitlessly pursing them for payment the respondent took out a writ of summons at the Imo State High Court, Owerri, and Claiming against the appellant –

“(a) The sum of N139, 166.66 made up as follows:

(i) N89, 400.00 (Eighty Nine Thousand Four Hundred Naira) representing his 30% consultancy services fees on the sum of N298, 000.00 (Two hundred and Ninety Eight Thousand Naira) had and received by the defendant, for the contract for the property rating of Aba and Obioma Ngwa Local Government Area.

(ii) N48, 766.66 (Forty Eight Thousand Seven Hundred and Sixty Six Naira Sixty Six Kobo) representing his 1/6 share of the sum of N292 600.00 being 70% of the sum of 418, 000.00 paid to the defendants on the said contract in part payment.

(b) Order of Court that the balance of N1, 182, 000.00 (One Million One Hundred and Eighty Two Thousand Naira) or part payment thereof payable by the Imo State Government to the defendants be paid into Court by the defendants on receipt of same pending the payment of the plaintiffs said consultancy of 30% and 1/6 share in the 70%.”

Pleadings were exchanged and the matter went to trial where at oral and documentary evidence was placed before the Court. In his judgment delivered or 24/03/97 the learned trial Judge, M. O. Maranzu, J., found in favour of the respondent. He however did not award him everything that he asked for.

Aggrieved by that part of the judgment that found them liable on the agreement to the respondent the appellants have appealed to this Court. The respondent for his part was dissatisfied with that part of the judgment in which the learned trial Judge declined award him some of the sums he had claim. He has consequently cross-appealed after seeking and obtaining leave of this Court.

Counsel on behalf of the appellants has submitted the following issue for determination by us:

“(a) Whether the Court below was right in holding that the agreement Exhibit .A, between the respondent and the appellants for canvassing and influencing the award of contract by the Ministry of Local Government for Rating and Valuation of Aba/Obioma Ngwa Local Government Areas is not a contract against Public policy and therefore enforceable.

(b) Whether the Court below was right in holding that the award of 5 zones our of 13 zones of Aba/Obioma Ngwa Property Valuation to the appellants by the Imo, State Government on 06/08/87 per Exhibit ‘F’ was as a result of the canvassing activities of the respondent after the execution of the agreement Exhibit ‘A’ on 13/07/97

(c) Whether the award of N5, 000.00 costs and 21 percent interest far above the rate of interest allowed by law is not excessive, arbitrary and unreasonable in the circumstance.

In respect of the main appeal the following two issues were formulated on behalf of there respondent:

(1) Whether or not the contract For canvassing for the award of contract of property rating in the Aba/Obioma Ngwa Local Government Areas of Imo State as embodied in Exhibit ‘A’ is against public policies and therefore unenforceable?

(GROUND 2).

(2) Whether or not the trial court erred in law by holding that award of Aba/Obioma Ngwa property valuation to the defendants was as vassing activities of the plaintiff/respondent (GROUND 3).”

In respect of his cross-appeal the following issue was formulated on behalf of the respondent/cross appellant:

Whether or not the learned trial Judge erred in law by refusing to award the plaintiff a total sum of Four Hundred and Forty Thousand Naira (N444, 000.00) being thirty percent of N1.6m, less N36, 000.00 already paid to the plaintiff, having regards to the fact that the defendant did not deny receiving the N1.6m as full and final payment based on the pleadings?

Counsel on behalf of the appellants did not react to the cross-appeal by filing any further brief. Consequently only the respondent’s/cross appellant’s argument on it is before us.

I shall deal with the main appeal first.

Arguing the appeal on the first issue formulated on behalf of the appellants which is the same as respondent’s issue No. 1, Mr. C. Ubakatonu, who had prepared the brief of argument, submitted that the consultancy agreement between the parties (Exh. A) Is not an enforceable contract. This, according to learned counsel, is because it was “an agreement to canvass and influence the award of government contract”. Such an agreement, counsel argued, is against public policy. For this he relied on Knight, Frank & Rutley Nig. Ltd. v, A-G., Kano State [1990] 4 N. w. L. R. (Pt. 143) 120, and Nwogav. Okoronkwo [1972] E. C. S.L.R.615.

At the end of his argument on this issue, Mr. E. C. Mere, Esq., for the respondent, urged us to hold that the issue as formulated on behalf of the appellants is incompetent as it has not arisen from any ground of appeal.

With all due respect to Mr. Mere, there is absolutely no merit in his half-hearted objection to this issue as formulated. The issue clearly arose from ground 2, added by amendment. The ground, without is a particular, reads:

“2. The learned trial Judge erred in law in sustaining the plaintiff’s case when the plaintiffs claim founded on a contract for canvassing and influencing the award of contract of Property rating in the Aba, Obioma Ngwa Local Government Areas of Imo Stare, as embodied in the agreement “Exh. A’, is against public policy and therefore unenforceable.”

I shall, therefore, proceed to consider the merit of the matter.

Addressing the issue Mr. Mere pointed out that no evidence was placed before the Court showing that the contract was in any way tainted: with illegality or malpractice. He also drew attention to the fact that the evidence shows that the mode of canvassing for and influencing the award of the contract adopted by the respondent was persuasion by word of mouth. Counsel then submitted that since no question of bribery of other form of corruption was shown to have been involved, no talk of the agreement being against public policy can arise. Counsel distinguished the two cases relied on by the appellants counsel.

Now, let us take a look at the terms of the agreement, Exh. A. It is on pp. 103 – 105 of the record and read:

“This agreement witness:

(1) That the ONOUN GROUP have retained the services of Mr. Amaobi Ugochukwu Managing Director AMMSCOT ENTERPRISES, 5 NGOR OKPARA STREET ALADINMA HOUSING ESTATE OWERRI

(2) That the fee for this job is 30% of the fees payable, and is being made specifically for Consultancy Services on property rating of Aba and Obioma Ngwa Local Government Areas.

(3) That the Managing Director of AMMSCOT ENTEPRISES, Mr. Amaobi Alfred Ugochukwu, shall also be entitled to share and share alike as a partner and is like manner with all the five partners of ONOUN GROUP

(4) That this agreement shall be binding on all the parties concerned and on default any of the parties shall reserve the right to sue for specific performance.”

I see nothing here that can be said to be against public policy. It is a simple agreement whereby the appellants engaged the consultancy services of the respondent to procure the valuation contract for them. Nobody testified, and there is nothing on record to show that in going about the procurement the respondent did anything unbecoming and which should be frowned at on grounds of public policy. The evidence-under cross-examination of the respondent (P.W. 1) by appellants’ counsel underscored the respondent’s above board stand in the matter. See p. 85; lines 7 – 17 of the record: r;

“Q. what actually did you do in canvassing and acquisition?

Ans. I was going to the Ministries of Local Government canvassing on behalf of the company of the defendants.

Q. What actually did you do by way of canvassing?

Ans. I was talking to people who were responsible for the award contract projecting their image and their company’s image.

a. Do you know that that canvassing is not allowed by law and by public policy?

Ans. Depending on the type of canvassing.”

As pointed out, the appellants never proffered any evidence to show that the respondent employed any other method more sinister than this. It is for all these reasons that i agree with the respondent’s counsel on the distinction he made between this case and the Knight, Frank & Rutley and Nwoga cases. In those cases elements of illegality and bad motive wire in evidence, unlike in the present case.

For the reasons I have given, I must resolve this issue against the appellants and in favour of the respondent. Before I move to the next issue, however, I must observe on the conduct of the appellants in the whole affair. If anybody is to be condemned it is the appellants. They acted in a most dishonourable manner. They benefited from the services of the respondent, but tried to use any and every means, fair and foul, to deal him out of this due entitlement. In condemnation of the conduct of the appellants the learned trial Judge at p. 178 of the record quoted the words of Lord Mansfield in Holman v. Johnson [1775] Cop. 341 that –

“…the objection that a contact is immoral or illegal as between plaintiff and defendant, sounds at all times very in the mouth of the defendant,”

The objection sounded particularly foul in the mouth of the defendant in this case. Even in a case where the contract was indeed illegal or immoral and, therefore, against public policy to enforce it, it is not a very pleasing sound to hear, coming from a defendant who was part of the fraud or immorality. In a case, such as the present one, ‘where the plaintiff has not shown to have been involved in any untoward conduct, it is a most galling sound, to hear from the sneaky defendant who is clearly out to deal the plaintiff out of his due entitlement.

I now move to the next issue. Issue (b) in the appellant; brief and issue 2 in the respondent’s brief both raise the question whether or not the learned trial Judge was right in holding that the respondent fulfilled his own end of the bargain, thereby leaving the ball in the appellants’ court. Mr. Ubakonu, the appellant, argued that the respondent could not be said to have fulfilled his obligations under the agreement because the learned Judge failed to make findings on three relevant points, which, in his own words, were:

“(a) Did the respondent canvass and procure for the appellants the contract envisaged in the exhibit ‘A’

(b) Canvassing and procuring the award of contract for rating and valuation of Aba/Obioma Ngwa L. G. A. as continued (read contained) d the agreement Exhibit ‘A’. Is the award of 5 zones out of 13 zones fulfilling of the bargain, as stipulated ‘A’

(c) On what basis was the respondent to share equally the 70 percent balance of the value of the contract awarded. Was he to become a member of the firm of Estate surveyors or was he not to become the 6th member of the firm of ONOUN GROUP CONSULTANT ESTATE SURVEYORS

Let us look at the record to see whether or not this criticism of the Judge is justified. From p. 176, line 8, to p. 178, line 6 the learned Judge dealt with the matter thus:

“Reverting to the claim of the plaintiff and the feeble defnce of the defendant especially as it related to the quatum of work the defendant were expecting to do whether five or the alleged thirteen zones I find as a fact that there is no mention of thirteen zones was mentioned in Exhibit ‘F’ the document embodying the agreement between Imo State Government and the defendant. One cannot help but feel rather uncomfortably that the defendants introduced this issue of zones in order to defeat the legitimate claims of the plaintiff particularly if one has recourse to paragraph 8 (eight) of the amended statement of defence where the defendant pleaded that the full contract for valuation of Obioma Ngwa/Aba Local Government consists of fifteen zones not thirteen.

Similarly if one has recourse to the evidence of D. W. 1 defence witness that the contract for the zones were awarded at the same time to the defendants and other eight estate surveyors but surprisingly neither D. w. 2 who claimed to be Deputy valuation officer at the time nor the-first defendant was the First defence witness ever mentioned the name or names of any of the other eight estate surveyors not was any of them called as a defence witness.

It is therefore my view and I hold as a fact that the plaintiff fulfilled his own side, of the bargain by canvassing and procuring for the defendants the contract they obtained from Imo State Government embodied in Exhibit ‘F’ and I hold as a consequence that the defendants are liable to pay the plaintiff what they agreed as per Exhibit ‘A’ as varied and modified as per Exhibits ‘D’ and ‘E’ and I so hold.

The averment by the defendants that they were awarded the contract in Exhibit ‘F’ solely on their own merit without them to help plaintiff at all cannot be sustained in the light of the entire evidence in this case.

If the defendants were so sure of themselves why did they all – five of them all university graduates with the First defendant holding a doctorate degree as per their letter head in Exhibit ‘E’ with wide business connections and branches all over Nigeria – in Owerri, Lagos, Jos, Kano and Yola in Gongola State as per Exhibit ‘E’ go to a mere diploma holder in computer Science training in oxford street London to canvass for contract for them from Imo state Government. why did these gentlemen all five of them all university graduates pay to the plaintiff a huge sum of money like N36, 000.00 when they received the first install mental payment from the Imo state Government; why did he defendants write to the plaintiff as per Exhibit ‘E’ over year after they had executed Exhibit ‘A’ with him that they were going to pay him his entitlement as per Exhibit ‘E’ already reproduced in this judgment where first defendant the man ageing partner said in part I shall repeat part of Exhibit ‘E’ for emphasis quote.

‘I shall take personal, responsibility to settle our commitment to your group based on the agreed thirty per centum.

This is a commitment and remains inviolable.”

It can be seen from this portion of the judgment that the learned judge covered all the three points raised. He dealt with each of the question and resolved it in favour of the respondent and gave reasons why he did so in each case. What the judge did in the passage highlighted amounted, in my view to findings of facts. The judge found that there was nothing in the agreement or anywhere else to suggest that the respondent was to secure a contract in respect of thirteen zones. He found that the defendant got the contract through the effort of the respondent. The appellant have not appealed against this finding. I would appear that the appellants’ counsel did not quite understand what the learned Judge said regarding balance of 70% of the contract after 30% had been paid out to the respondent as consultancy fees. According to learned counsel –

“The Court did not say what bargain the respondent fulfilled to entitle him to share equally with the appellants the balance of 70% of the contract sum of N1.6 million.

The Court, with respect did not say that the respondent was entitled to same in the 70%. On the contrary the court expressly found that the respondent was not entitled to anything beyond his consultancy fee of 30%. He arrived at this conclusion because, according to him, the parties had agreed by Exhs. E and F to limit the respondent’s entitlement to his consultancy fee. The respondent does not appear to quarrel with this. He has included no complaint on it his cross-appeal.

I see no merit in the arguments on behalf of the appellants on this issue. The issue is accordingly resolved against them.

On issue (c) the learned counsel for the appellants submitted that the learned trial Judge was wrong in awarding interest at the rate of 21% when the Rules of court limited it to only 10%. He complained also about the excessiveness of the cost N5, 000.00

I think the appellants have a point on the question of award of interest. I agree that the learned trial Judge exceeded his authority when he ordered the appellants to pay interest or the judgment at the rate of 21%. Order 40, Rul. 7 of the Imo State High court (Civil procedure) Rules, 1988, limits the rate of interest on a judgment debt to only 10%. The rule provides:

“7. The court at the time making any judgment or order or at any time afterwards may direct the time within which the payment or other act is to be made or done, reckoned from the date of the judgment or order, or from some other point of time as the court thinks fit and may order interest at a rate not exceeding ten Naira per centum annum to be paid upon my judgment, commencing from he date thereof or afterward wards as the case may be.

I observe that the respondent did not in his writ of summons or pleading make any claim for interest on the judgment debt. I do not think it was proper for the learned Judge to order interest suo motu and without first hearing counsel. Order 40, Rule 7 only gives the Judge the authority and the discretion in an appropriate case to make the order. The rule does not, in my view, make the order for payment of interest follow a monetary award as the day follows the night. The appropriate case sought to be where the beneficiary of the monetary award has asked for interest. Even in such case I do not consider it appropriate to make the order as a matter of course just because it is one of the reliefs sought. The court ought to hear the parties.

In the circumstances of this case I do not think the order for payment of interest made against the appellants should be allowed to stand.

There is, however’ no merit in the complaint about the order for costs. The court heard he parties. Counsel on behalf of the respondent itemized of N10, 000 he asked for as costs. The appellants’ counsel offered only N1, 600.00. Before the Judge fixed it at N5, 600.00 he took into account the fact that there had been a total of fifty appearances and out-of-pockets expenses of N6000.00. In the circumstances, I see no justification in disturbing

All the major issues having been resolved against the appellant their appeal has no chance of success. I will accordingly dismiss it.

I now come to the respondent’s cross-appeal. Learned counsel for the respondent cross appellant submitted that having regard to paragraph 8(a) and (b) of his amended statement of defence, wherein the cross appellant pleaded that the full contract sum of N1.6 million had been paid to the respondent, and the to fact that the appellant/cross-respondents did not specifically deny this, the learned Judge should have worked the arithmetic to determine the amount of the fifth and final installment made to the appellants/cross-respondents and awarded him 30% thereof. In his submission, the learned judge’s ruling that because the cross appellant in his evidence had not mentioned the value of the fifth installment received by the cross respondents on 12/08/89 the former could not recover any percentage thereof in this action is not tenable.

As I pointed out earlier on in this judgment, the appellant/cross respondent never reacted to this cross-appeal. They never filed any brief in response to it.

As we saw at the beginning of this judgment, the learned Judge did decline of to award 30% the fifth installment alleged by the cross appellant to hare been to the cross respondents because the former did not state the amount of it in his evidence as he did in respect of the three’ earlier installments.

It is true, as the learned Judge, observed, that in his evidence the cross appellant did not talk about the final installment. The contention on his behalf, however, was that was irrelevant. The argument was that the fact that the final installment was paid to the cross respondents was not in issue as the latter had admitted it by implication. It was, therefore, not necessary for the cross appellant to lead evidence on it.

We will now see whether indeed the cross respondents could be said to have admitted it, and, if so, what effect it would have on the learned Judge’s refusal to award 30%of it to the cross appellant’ In paragraph 8 of his amended statement of claim the cross appellant pleaded:

“8(a) The total amount of the contract sum (N1, 600,000.00) already paid to the defendants by the Imo State Government is N443, 333.34 (Four Hundred and Forty three Thousand Three Hundred and Thirty Three Naira Thirty four Kobo) remaining the balance of N1, 156, 666.66 (One Million One Hundred and Fifty Six Thousand Six Hundred and Sixty Six Naira Sixty Six Kobo); out of which balance the plaintiffs Consultancy Fess of 30% is N346, 999.98. The defendants have been paid the final of the said balance of N1, 156, 666.66 on or about 12th August, 1989. The Final Certificate of Completion of the contract was issued to the defendants of on 17July, 1989. The same is hereby pleaded. The defendants are notified to product same at the hearing of this suit.

(b) Of the said balance of N1, 156, 666.66 the 70% is N809, 666.66 and the share of the plaintiff as a Partner of the defendants as per their said Agreement is 1/6 which is N134, 944.44 (One Hundred and Thirty Four Thousand Nine Hundred and Forty Four Naira Forty Four Kobo). Thus the total payment due the plaintiff as per the said agreement less N36, 000.00 already paid to him is N626, 194.42 (Six Hundred and Twenty Six Thousand One Hundred and Ninety Four Naira Forty Kobo)”

(Italics mine).

As can be seen, sub-paragraph (a) contains the specific allegation that the on or about 12/08.19 the appellants/cross respondents received the last and final installment of N1, 156, 666.66.00

How did the cross respondents meet this allegation? In paragraph 10 of their amended statement of defence they pleaded:

“10 In answer to paragraph 8(a) and (b) of the statement of claim the defendant will at the hearing contend that the plaintiff is not entitled to any of the sums of money claimed as the plaintiff did not participate in the award as and execution of the contract a partner or in any other capacity.

The first striking point that I observe is that they neither did nor meet the specific allegation that final installment was in fact paid to them on 12/08/89. They did not even make the general denial in this paragraph. They denied only the allegation that the cross appellant was entitled to anything out of the amount paid.’

The question is, if indeed they had not received the final install as the cross appellant specifically alleged they had, would they not have loudly denied it? Their answer that the cross appellant was not entitled to any part of it is clear admission that they had indeed received it. In any case, by order 25, Rule 9 of the Rules, every allegation of fact in any pleading if not denied specifically or by necessary implication, or stated to be not admitted in the pleading of the opposite party, shall be taken to the admitted as against sane adult pleader so omitting to deny.

Guided by the observations I just made and by the rule I just referred to, I must agree with earned counsel for the cross appellant that the latter had no obligation to lead evidence on the fact that final installment was in fact paid. What is admitted needs no proof? I agree with him that in the circumstance of the case the fact that the cross appellant did not testify to the amount of that final installment should not deprive him of his due entitlement. I do not think that the judge was right in suggesting that the cross appellant should recover that entitlement by a separation action. The court has always tried to avoid multiplicity of actions. Advising final to take a fresh action to recover it is to needlessly encourage multiplicity of actions. Since the judge already knew the sum of the first four installment paid to the cross respondent in became a simple exercise of deducting that sum from the total contract sum, which he also knew. And since he had found that the cross appellant was entitled to 30% of whatever the fifth installment was he should have embarked on the simple calculation and given him his entitlement.

The cross appellant expected the learned Judge to have awarded him a trial of N1444, 000.00 being 30% of N1, 600, 000.00 less N36, 000.00 paid to him from the first installment. I do not think he is entitled to the full amount of N444, 000.00. He assumed that the N1.6 million was the exact amount of the last installment paid to the cross respondents. He himself, however, showed that tax was deducted from each installment before it was paid to the cross respondents. He showed the amount that was deducted as tax from the first installment paid to the cross respondents in January 1988. The amount before tax was N133, 333.34. After tax it came down to N120, 000.00. The amount deducted as tax was, therefore N13, 332.74, which is 10% of the amount of that installment. The cross appellant a so showed that tax was also deducted from the other three installments before payment to the cross respondents, although he did not indicate the amount of tax deducted. There is no reason why one cannot assume that it was the same percentage of the installment as applied to the first installment. It is my view, therefore, that it would amount to overpaying the cross appellant to pay him 30% of N, 156, 666.66, which is the gross balance, without first deducting tax of at least 10%. I think that should be done.

10% of N1, 156, 666.66 is N115, 666.66. If that is deducted from the gross; it comes to N1, 040, 999.994. 30% of this net amount comes to N312, 299.9982, which can be rounded off to N312, 300.00. This, in my view, should be the cross appellant’s 30% consultation fee on the final installment. Add N83, 556.00, being the total amount of his entitlement from the second, third and fourth installments, and his total entitlement should have been N395, 856.00.

For the reasons I have given, subject to the modification t have indicated I resolve the sole issue in the cross-appeal in favour of cross appellant.

In summary my judgment is as follows

l. The main appeal lacks merit and is accordingly dismissed. Except the order for payment of interest I affirm all the consequential orders made by Maranzu, J. I however set aside the order on the appellants to pay interest on the judgment debt.

2. The cross appeal succeeds. The order of the learned Judge declining to award the cross appellant his entitlement on the final installment and asking him to claim it in a separate action is set aside. In it place I award the cross appellant the sum of N395, 956.00.

The appellants/cross respondents are to pay costs of N5, 000.00 to the respondent/cross appellant for the appeal and N3, 000.00 for the cross appeal.

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Other Citations: (2002)LCN/1083(CA)