Harold Shodipo & Co. Ltd Vs The Daily Times Of Nigeria Ltd (1972)

LawGlobal-Hub Lead Judgment Report

T. O. ELIAS, C.J.N. 

In Suit No. LD/130/69 the plaintiffs, herein appellants, through a firm known as Messrs Adana Brothers placed an order for the advertisement of their business names and undertakings for publication in the 1969 Year-Book published by the defendants. The cost of a full page advertisement therein was 40(pound), which was paid through Messrs Adana Brothers.

When placing the order with the defendants, Messrs Adana filled in and forwarded to the latter advertisement form exhibit D showing his client, title, mid-year space, date, position and his own rate of commission. As it happened, the defendants failed to insert the advertisement in the Nigeria Year-Book for 1969 in accordance with the order and, when sued contended that Messrs Adana were never their agents for acceptance of the advertisement in their Year- Book and that, even if they were such agents, they were too late in submitting their proof of the advertisement in question. The defendants also contended that, under the terms of the contract, they were not liable for failure to insert the advertisement.

The learned trial judge found that the evidence adduced before him showed that the cheque for the 40(pounds) was issued in the name of the defendants and that Messrs Adana Brothers duly claimed 10 per cent commission from the defendants. The learned trial judge therefore held that, in this particular transaction, Messrs Adana Brothers acted as the agent of the defendants, and that the latter had committed a breach of the contract by their failure duly to insert the advertisement. The learned trial judge accordingly held that the defendants were liable in damages to the plaintiffs for breach of contract. He proceeded to award 350(pounds) as damages which amount includes the 40(pounds) costs of the advertisement, together with 50(pounds) costs, in favour of the plaintiffs. In reaching this conclusion, the learned trial judge said:-

“In estimating the quantum of damages one has got to look at the circumstances of the case. I have not been addressed nor had evidence been led that the plaintiffs definitely lost some particular clients or suffered specific losses as a result of the failure to insert the advertisement. In awarding damages, I take into consideration the amount of 40(pound) which they, plaintiffs, paid for the advertisement and which had not been refunded to them and the failure of the defendants to carry out their contract.”

Against this decision of the High Court of Lagos State, the appellant has filed and been allowed to argue the following two grounds of appeal:-

1. The learned trial judge erred in law and on the facts in failing to observe that in the circumstances of this case it is not possible or even necessary for the plaintiff to prove actual damages.
2. The learned trial judge erred in law and on the facts in assessing damages by allowing his mind to be influenced by his finding that no evidence was led to the effect that “the plaintiffs definitely lost some particular clients or suffered specified losses as a result of the failure to insert the advertisement.”

Particulars of Error

(i) The purpose of the advertisement was to win new clients.

(ii) It is impossible to ascertain the number of persons who would have patronised the plaintiffs if the advertisement had been published.

3. The damages awarded are manifestly low.

In arguing both grounds of appeal, Chief Williams, learned counsel for the appellant, submitted that he had no quarrel with the learned trial judge’s decision in respect of the refund of the 40(pounds) paid for the advertisement by the plaintiffs, but that the learned trial judge was in error in awarding so small an amount of damages mainly on the ground that evidence had not been led to show that the plaintiffs had suffered specific pecuniary losses as a result of the failure of the defendants to insert the appellants’ advertisement in their Year-Book. His contention is that, in this type of claim, it is not always possible to adduce evidence of specific losses. In support of his contention he referred to Aerial Advertising Co. v. Batchelors Peas Ltd., (Manchester) [1938] 2 All E.R. 788, at page 795, where Atkinson J. observed as follows:-

“I come, then, to the claim for general damages, and here a point of law is raised. There is only a claim for general damages in respect of pecuniary loss, and Mr. Roskill says that I cannot give general damages for pecuniary loss in respect of breach of contract, and that I can give damages only by way of special damage for a breach of contract. For that argument Mr. Roskill relies upon Groom v. Crocker (1). I fail myself to see any difference in principle between a claim for special damage and a claim for general damage. One, of course, has to be proved as completely as does the other. The only difference is that, where one is claiming special damage, the circumstances are such that one is able to put one’s finger on a particular item of loss and say, ‘I can prove that I lost so much there, so much there, and so much there’, whereas a claim for general damages means this: ‘We cannot prove particular items, but we can prove beyond all possible doubt that there has been pecuniary loss.’ Once that has been proved, I cannot myself see any difference in principle between special damage and general damage. When one reads Groom v. Crocker (1), one sees that, so far from saying that there is any difficulty in recovering general damages, to my mind it says precisely the opposite. The relevant passage in the case is quite short. Groom v. Crocker (1) was decided so recently that I need not go through the facts. What Sir Wilfrid Greene, M.R. said (and this is what is relied upon) at at p. 401:-

‘It was said that, as a result of the negligence on the part of the appellants, the respondent was subjected to mental suffering, that he was held up to public disapproval, that his reputation as a careful driver was destroyed, and that the jury were entitled to award damages in respect of these matters. It was said that the action was an action in tort, and not in contract, and that, even if it were an action in contract, such damages were recoverable. In my opinion, the cause of action is in contract, and not in tort.’

Sir Wilfrid Greene, M.R. then goes on to say what the duty was, and proceeds, at p. 402:-

‘No authority was cited to us which supports the proposition that, in an action based on breach of contract, damages can be recovered in respect of the matters to which I have referred (which did not include pecuniary loss). No pecuniary loss arose from them, and no reasonable probability of pecuniary loss in the future could be shown.’

Surely, if that means anything at all, it means that this is not a case of pecuniary loss, where, of course, damages could be given, but something quite different. Sir Wilfrid Greene, M.R., then says, at p. 402:-

Reliance was placed on Wilson v. United Counties Bank Ltd., (2). In the case, bankers, who had been entrusted with the supervision of a trader’s business, by their negligence caused his bankruptcy. In addition to damages for the loss occasioned to the bankrupt’s estate, the jury awarded 37,500pounds damages for the injury to his credit and reputation, and it was held by the House of Lords that this award was good. The decision rested upon the special terms of the contract, under which the bank agreed to take all reasonable steps to maintain the plaintiff’s credit and reputation. Lord Birkenhead, L.c., put the case in the same class as that of the case where a banker dishonours a cheque although the customer’s account is in funds. In such cases, it is the commercial credit of the customer that is injured, and the inference arises that pecuniary loss will necessarily ensue. I repeat that I do not regard that as an authority for the proposition that general damages are not recoverable for pecuniary loss. Difficulty of proof does not dispense with necessity of proof. In considering damage on this part of the case, one has to be very careful that one is not giving damages for injury to reputation and that type of thing. One can only give general damages in respect of the pecuniary loss which has been sustained.”

On the issue of the assessment of damages learned counsel for the appellant cited Chaplin v. Hicks [1911] 2 K.B. 786, where after a brief historical development in the assessment of damages by the courts for breach of contract, Vaughan-Williams L.J. said at page 792:-

“But from first to last there were, as there are now, many cases in which it is difficult to apply definite rules. In the case of a breach of contract for the delivery of goods the damages are usually supplied by the fact of there being a market in which similar goods can be immediately bought, and the difference between the contract price and the price given for the substituted goods in the open market is the measure of damages; that rule has been always recognized. Sometimes, however, there is no market for the particular class of goods; but no one has ever suggested that, because there is no market, there are no damages. In such a case the jury must do the best they can, and it may be that the amount of their verdict will really be a matter of guesswork. But the fact that damages cannot be assessed with certainty does not relieve the wrong-doer of the necessity of paying damages for his breach of contract. I do not wish to lay down any such rule as that a judge can in every case leave it to the jury to assess damages for a breach of contract. “

Finally, Chief Williams submitted that the principles applicable in cases of appeal on quantum of damages are those laid down in the Privy Council decision in Khawam and Co. v. Chellaram and Sons (Nig.) Ltd. [1964] 1 W.L.R. 711 at page 714 where Lord Guest said as follows:-

“The principles upon which an appellate court will act in reviewing an award of damages were stated by Viscount Simon in Nance v. British Columbia Electric Company Ltd.:–

(1) The principles which apply under this head are not in doubt. Whether the assessment of damages be by a judge or a jury, the appellate court is not justified in substituting a figure of its own for that awarded below simply because it would have awarded a different figure if it had tried the case at first instance. Even if the tribunal of first instance was a judge sitting alone, then, before the appellate court can properly intervene, it must be satisfied either that the judge, in assessing the damages, applied a wrong principle of law (as by taking into account some irrelevant factor leaving out of account some relevant one); or, short of this, that the amount awarded is either so inordinately low or so inordinately high that it must be a wholly erroneous estimate of the damage (Flint v. Lovell, approved by the House of Lords in Davies v. Powell Duffryn Associated Colleries Ltd.). The last named case further shows that when on a proper direction the quantum is ascertained by a jury, the disparity between the figure at which they have arrived and any figure at which they could properly have arrived must, to justify correction by a court of appeal, be even wider than when the figure has been assessed by a judge sitting alone. The figure must be wholly ‘out of all proportion.’”

It is the submission of Chief Williams that, having regard to the fact that the appellants are a building and engineering company with possibilities of winning contracts worth very large sums of money of which the company has been deprived by the defendant’s breach, the learned trial judge should have awarded a far more substantial amount of damages than the 350(pounds) actually awarded.

Mr. Adesanya, learned counsel for the respondents, at first tried to deny the respondents’ liability to the appellants, but we stopped him as there was no cross-appeal by him before us on that question. He then limited himself to arguing in support of the judgment appealed against by insisting that the appellants should have adduced evidence of specific losses before the trial court as a result of the defendants’ failure to insert the advertisement. We think that this point is sufficiently met by the dictum of Vaughan-Williams L.J. in Chaplin v. Hicks cited above to the effect that in this type of case, proof of specific losses is well nigh impossible and can at best be little more than guesswork, the only limitation being that the quantum of damages finally arrived at by the court should be neither inordinately low nor inordinately high.

We think, that, after taking into consideration all the circumstances of the case on appeal before us, 2,500(pounds) should be a fair assessment of the pecuniary loss suffered by a building and engineering company such as is the appellant in this case in the circumstances prevailing in Nigeria today.

Accordingly we allow this appeal and set aside the sum of 350(pounds) awarded as damages and substitute therefore the sum of 2,500(pounds) as general damages which we do now award to the appellants. The order as to costs in the court below stands undisturbed. We award the appellant fifty guineas cost in this appeal.

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Other Citation: (1972) LCN/1509(SC)