Finunion Limited V. The M.v. Briz & Anor. (1997)

LawGlobal-Hub Lead Judgment Report

UWAIFO, J.C.A.

The plaintiff/appellant took out an action in rem against the defendants/respondents for an alleged damage done to a cargo of consignment of 9334 cartons of frozen fish (Horse Mackerel) shipped per the 1st defendant (The M. V. Briz) to the order of the plaintiff/appellant. The vessel sailed from Namibia to Port Harcourt and Apapa Ports and the cargo was delivered on or about the month of December, 1991. The plaintiff claimed that on delivery the cargo was found to be damaged. It therefore sued for its full value of US$700,000 (stated in the claim as USD 393,354 and N4,241,770.61). There is no dispute that the value of the cargo is US$700,000.

The vessel had sailed from Port Harcourt at the time the action was brought and was at the Apapa Port. The action had to be brought at the Federal High Court, Lagos. The Plaintiff by motion ex-parte applied for the arrest and detention of the vessel as security for its claim pending the determination of the suit or “Until the defendants shall show good, reasonable and sufficient cause for its release” or until further order by the court. The application was granted by Jinadu J. on 21 May, 1992 and the vessel was accordingly arrested by the Admiralty Marshal of the court.

On 8 July, 1992, the defendants applied by motion on notice to have the vessel released upon security of US$100,000. The further affidavit sworn on 15 July 1992 in support of the motion contained allegations that the consignment had been examined by the plaintiff on arrival at the Apapa Wharf and that only a small part of it was found bad. I shall reproduce those paragraphs of the said further affidavit which I consider relevant for this appeal:

“3. That the total consignment of fish carried by the Vessel on the relevant trip was 2800 tons.

4. That 1395 tons of fish were discharged, examined and received by the plaintiff at Port Harcourt on 23rd December, 1991 after delaying the Vessel for 17 days.
5. That the plaintiff did not complain about the condition of the consignment of fish it examined and received at Port Harcourt.
6. I verily believe that the fish on board the vessel were inspected by the Nigerian Health Authorities in Port Harcourt and accepted by them to be in good condition.
7. That at Apapa Wharf the plaintiff examined and received 1031.26 tons of fish without raising any objection as to their condition.
8. That at Apapa Wharf the plaintiff examined and rejected 373.74 tons of fish on board as being bad.
9. That the vessel was fully discharged on 10th January, 1992 less the 373.74 tons of fish rejected by the plaintiff after the plaintiff had delayed the vessel for another 4 days.
10. That the Vessel has 4 hatches all of which worked in Port Harcourt until when the vessel got to Apapa Wharf, Lagos where the fish in hatch 4 (373.74 tons) developed complain.
11. That I verily believe that the plaintiff has sold all the 2426.26 tons of fish it examined and took delivery of at Port Harcourt and Apapa Wharf respectively.
12. That I verily believe that the plaintiff is responsible for the 373.74 tons of fish going bad because of their delay in discharging the fish from the Vessel.
13. That I verily believe that if the plaintiff sustained any loss at all from the sales of the 2426.26 tons of fish it took delivery of it must be due to a combination of other factors like unstable market prices and the plaintiff’s faulty cold store rented from Frozen Foods Nigeria Limited 57 Trans Amadi (Industrial Estate) Port Harcourt where they stored (1395 tons) of the total consignment of fish they examined and accepted.
14. Now shown to me and marked Exhibit ‘D’ is a copy of the letter written by the plaintiff dated 1/6/92 to the Administrator of Frozen Foods Nigeria Limited complaining about their faulty cold store.”

In an affidavit in reply to the said further affidavit, sworn on 21 July, 1992, the plaintiff, in one out of five paragraphs of that affidavit, said: “That I deny all the facts therein as if the same were set out herein and separately denied.” The learned trial Judge held that this was not adequate denial as it was not specific enough. There was another paragraph which said: “That I am informed by counsel in charge of this matter Dolapo Akinrele Esq. and I verily believe that the plaintiff has not substantiated its averments encapsulated in paragraphs 3 to 22 of the further affidavit.” The respondents now contend that this amounts to argument and conclusion, and I think they are justified in that criticism: See Nigerian LNG Ltd. v. African Development Insurance Co. Ltd. (1995) 8 NWLR (Pt. 416) 677 at 696 – 702.

After considering arguments on the defendants’ motion, the learned trial Judge ordered the release of the vessel from arrest and detention upon the defendants furnishing a guarantee in the sum of US$200,000, The plaintiff complains that that amount is not adequate security for its claim of USS700,000 as contained in the writ of summons and appeals that the decision was one arrived at erroneously by the learned trial Judge. Although four issues were set down in the appellant’s brief for determination, learned counsel for the appellant in oral argument on 23 April, 1997 before this court reduced them to only one, namely:

“Whether there was sufficient material before the lower court to enable it to reduce the amount of guarantee.”

The learned trial Judge gave two reasons for reaching a decision to reduce the guarantee to be provided by the defendants. First, he said that the plaintiff’s claim did not, to use his words, “categorically state what number of cartons of fish were lost and what number were damaged so that the court can see at a glance how the total claim of US$700,000,00 damages was arrived at.” Looking at the plaintiffs claim, what the learned trial Judge said, with due respect to him, was a complete misconception, The plaintiff did not claim that some consignment of the fish was lost and some damaged, What it claimed was that the entire consignment was damaged and that the value was US$700,000,00.

The second reason given by the learned trial Judge, again to use his words, was that “there are these substantial averments of facts contained in paragraphs 4 – 11 of the further affidavit that the plaintiff examined and received a total of 2,800 tons of fish less 373,74 tons.” He was of the opinion that these facts should have been specifically denied. It is true that in the affidavit in reply to that further affidavit as I have already pointed out in the course of this judgment, the plaintiff simply denied the truth of all the relevant paragraphs. But in view of the earlier affidavit of the plaintiff sworn on 21 May, 1992 by one Felix Olatunji Hughes, the Group Personnel and Administrative Manager of the plaintiff, which was an affidavit of urgency in support of the motion to arrest the vessel, the position of the plaintiff was clear, Paragraphs 3, 4, 5 and 6 read: “3, That sometime in November 1991, 9334 Cartons of frozen Horse Mackerel were consigned to the order of the plaintiff company at ex the M.V. BRIZ.

4. That the vessel aforesaid arrived Nigeria on or about the month of December, 1991 laden with the consignment aforementioned.
5. That upon discharge of the consignment aforesaid from the vessel, it was certified by the Socicte Generale De Surveillance, a Government approved inspection Company that the consignment was in a damaged condition.
6. That as a result of the state of the consignment, the plaintiff company could no longer sell them and as such has been put to great loss.”

In view of this direct assertion as to what happened to the entire consignment and that a government sponsored inspection company had certified the condition thereof, it became unnecessary even for the plaintiff to respond to any further affidavit by the defendants unsupported by credible facts and/or documents. It would mean either that the plaintiff was telling untruth or the defendants were. That would remain an issue to be decided in the substantive case.” But at the moment, on the face value of the affidavit evidence before the court, the following can legitimately be allowed to influence the decision on the amount of guarantee that is appropriate. First, the contention of the plaintiff that it could not sell the fish because it had been damaged resulting in great loss ought to be considered against the background that it places reliance on a positive deposition as to what a Government approved inspection company was alleged to have provided as evidence of the damaged condition of the fish. Second, as against that positive deposition by the plaintiff is the mere deposition of belief (not supported by any facts or source of information) by the defendants that the fish were inspected. On board the vessel by the Nigeria Health Authorities in Port Harcourt (the particular health authorities not having been mentioned).

In the circumstances of this case, the further affidavit by the defendants although later in time would not appeal strong enough on the point as to the condition of the consignment of fish as to require the plaintiff to supply further facts or to make specific denial. The later affidavit cannot and ought not therefore to have any decisive effect in the circumstances on the issue arising as to make the court throw itself upon it in acceptance of the facts therein contained simply because it was later in time and not countered. As said by the Supreme Court per Irikefe J.S.C. in National Bank Ltd. v. Are Brothers (1977) 6 S.C. 97 at 108;

“It would not be open to the court as it did here, to accept the last affidavit in point of time as the true position of matters, merely because the other side had failed to lodge a counter-affidavit.” The learned trial Judge limited himself to the facts contained in paragraphs 4 to 11 of the further affidavit as to what he said the plaintiff failed to deny specifically. I shall not bother about other facts not so considered by him since there is no appeal against what he failed to consider in that further affidavit. Having regard to the facts he considered and the reasons given by him to put the guarantee at USS200,000. I think the learned trial Judge acted on a wrong premises and therefore fell into the error of denying the plaintiff its entitlement to sufficient security to cover the amount of its claim with interest and costs on the basis of its reasonable arguable best case, which is the principle upon which the matter or security or guarantee to get an arrested ship released or bailed is considered; See The “Moschanthy” (1971) 1 Lloyd’s Rep. 37 at 44. The other way of stating the principle is that in the absence of a strong contrary evidence the amount of bail or guarantee should be sufficient to cover the plaintiffs claim together with interest thereon and the costs of the action: See Halsbury’s Laws of England Vol. 1, 4th ed. paragraph 380; M/V “Da Qing Shan” v. Pan Asiatic Commodities Plc. Ltd. (1991) 8 NWLR (Pt. 209) 354 at 367. The plaintiff appears to have put forward an arguable case at this stage of demanding a guarantee in these interlocutory proceedings as to the value of the loss suffered by it and the general rule is that the court cannot and ought not at that stage to take a position that would adversely prejudice its claim by so severally reducing the value stated therein unless a very clear case justifying that course had been made out by the defendants. As Brandon J put it in The “Moschanthy” (supra) at page 45;

“….these are interlocutory proceedings and the Court cannot try the case in them. It may be that the plaintiff could, at a trial, produce independent evidence to corroborate his figure, and the fact that he has not done so at this stage ought not to result in his being denied the opportunity later.”

I am satisfied that there is merit in this appeal. I therefore allow it and set aside the order of the lower court given on 27 July, 1992. It is ordered that the bank guarantee to support the release of the Vessel M.V. Briz shall be US$700,000.00 not US$200,000.00. I award costs of N2,000.00 to the appellant.

Other Citations: (1997)LCN/0309(CA)