Kaydee Ventures Ltd V The Hon. Minister Of Fed. Capital Territory (2010)
LAWGLOBAL HUB Lead Judgment Report
I. T. MUHAMMAD, J.S.C.
The plaintiff at the High Court of Justice of the Federal Capital Territory, Abuja [the trial court] and who is the appellant herein, is a limited liability Company carrying on Construction business throughout the Federal Republic of Nigeria, The 1st and 2nd defendants and now respondents in this appeal are the Honourable Minister of the Federal Capital Territory [F.C.T], Abuja and the Federal Capital Development Authority [F.C.D,A], a statutory body charged with the responsibility of physical development of the Federal Capital Territory, Abuja. The 3rd defendant/respondent is another limited liability Company carrying on business in the Federal Capital Territory. The plaintiff averred in its statement of claim that she was invited along with other contractors on the 10th of September, 1996, by the 2nd defendant to submit tenders for the rehabilitation of Keffi road at Karmo junction and Airport Express way. The plaintiff further averred that of all the six companies that tendered for the contract, that of the plaintiff was found to be the lowest and most attractive. On the 3rd of June, 1997, the plaintiff was awarded the contract at the cost of N94,623,797.84. A formal agreement was executed between the plaintiff and the 2nd defendant on the 30th day of July, 1997. The plaintiff averred that by virtue of clause 6.00 of the formal agreement, she was expected to mobilize its resources and commence work within two weeks of signing the agreement. The 2nd defendant was required by the contract to furnish the plaintiff with full priced copy of the Bills of Quantity, the drawings and specifications. The drawings as afore stated were not given to the plaintiff and without the drawings the plaintiff could not mobilize and commence work on the site. The plaintiff claimed further that even after signing the contract the demand for the afore said drawings was in vain. The duration of the work was for 6 months from the date of signing the contract. Before the expiration of the two weeks period allowed for mobilization, there were moves to terminate the contract. And by a letter dated 29th of August, 1997, the contract of the plaintiff was terminated by the defendants.
The plaintiff averred that despite the non-provision of the necessary drawings, it mobilized on site after signing the agreement. A site inspection was carried out by an independent Engineer mandated to inspect the said contract. He produced a report on 3rd of September, 1997. The plaintiff averred further that as at the date of termination of the contract, it had expended about 11 Million Naira for hiring machinery on site, vehicles, procurement of materials including bitumen, payment of workers salaries, allowances, procurement of letter of bond from N.I.M.B Ltd. According to the plaintiff, immediately the contract was purportedly terminated, the 3rd defendant moved all machinery and men into the area plaintiff had already worked upon thereby committing trespass on the site. The plaintiff finally made the following claims:
‘1. A declaration that the letter reference No. FCDA/DES/44/s/295/80 dated 29/8/97 titled ‘Termination of Contract for the construction of Link Road Keffi to Airport Express way’ is illegal null and void.
- Perpetual injunction restraining the defendants, their servants, agents assigns and privies from interfering, interrupting, or preventing the plaintiff from executing contract agreement dated 30th of July 1997.
- A perpetual injunction restraining the defendants, their assigns, agents and privies from carrying out any work on the construction of Link road III Alignment along Keffi Road to the Airport Express way, Abuja
- A perpetual injunction restraining the 1st and 2nd defendants from giving effects, or any backing or support to the 3rd defendant in carrying out the construction of the Link Road III Alignment, Keffi to Airport Express way’. IN THE ALTERNATIVE 37.
The sum of N28,387,137,139.35 being anticipated loss of profit from the aforesaid contract. 38. N30,000,000.00 as general damages for loss of goodwill reputation, and cost of demolition on site.’
In their joint statement of defence the defendants denied each and every allegation of fact contained in the statement of claim except where the defendants expressly made an admission. They put the plaintiff on the strictest proof of every allegation not admitted. After full hearing, the learned trial judge entered judgment in favour of the plaintiff by holding that the termination of contract by the defendants was wrongfully done. He awarded to the plaintiff the sum of N14,193,569.68. Dissatisfied, the defendants appealed to the court below. After hearing the appeal, the court below allowed the appeal and set aside the judgment of the trial court. It also dismissed the cross-appeal. The plaintiff/respondent appealed to this court by filing a Notice of Appeal dated 15th of December, 2000 containing five grounds of appeal. Another Notice of Appeal containing eight grounds of appeal was, with the leave of this court, filed on 24/12/2002. The latter Notice and grounds of appeal were deemed dully filed by this court on the 29th day of October, 2003. This means that the former Notice and grounds of Appeal contained in the Record of Appeal and dated 15th of December, 2000 were abandoned by the appellant. In compliance with the Rules of Practice of this court, parties settled their briefs of argument which they adopted on the hearing day of the appeal. Learned counsel for the appellant formulated the following issues:
ISSUES FOR DETERMINATION
‘1. Whether the learned justices of the court below were right in concluding that the defendants lawfully terminated the contract award to the plaintiff,
- Whether the learned Justices of the court below were right in holding that the trial judge wrongly evaluated the evidence before him and whether they were right in their own evaluation to warrant an interference with the findings and reasoning of the trial judge.
- Whether plaintiff is entitled to damages.’
The respondents on their part, through their counsel, settled the following issues:
‘1. Whether having regards to the state of pleadings and evidence in this case the learned justices of the Court of Appeal rightly held that the termination of the contract award to the Appellant was lawful. [Ground 3 of the Notice of Appeal].
- Whether the court below was right in holding that findings of the trial court were perverse and in interfering with the said findings. [Ground 4 of the Notice of Appeal].
- Whether the court below was right in setting aside the award of damages made by the trial court in favour of the Appellant. [Ground 5 of the Notice of Appeal].’
In this submissions on issue No.1, learned counsel for the appellant stated that it was common ground between the parties that the terms of the contract awarded to the plaintiff by the defendants were as contained in Exhibits F and B. It was also common ground that the contract was terminated by the defendants. It is trite law, he submitted further, that in matters of contract in which the terms and conditions of the contract were embodied in a written document, the parties and the court will not be allowed to read into the contract extraneous terms on which they reached no agreement. In other words, both the parties and the court are bound by the terms of the contract and the court is to interpret and enforce the terms of the contract as agreed by the parties. Learned counsel cited and relied on the cases of INTERNATIONAL TEXTILE INDUSTRY [NIG.] LTD. V. ADEREMI [1999] 8 NWLR [pt. 614] 268; KOIKI V. MAGNUSSON [1999] 8 NWLR [pt.615] 492.
Learned counsel for the appellant argued that the settled law is he who asserts must prove and hence the defendants having given reasons for the termination of the contract in paragraphs 13 and 18 of their statement of defence, have a duty to prove and justify the reasons for the termination. He argued further that the time limit within which the plaintiff was to mobilize to site had not expired at the material time when the defendants set the machinery in motion to terminate the contract and when the necessary drawing to be used had not been released by the defendants, notwithstanding the various demands made by the plaintiff. He made reference to Exhibit F which, he said, by it, the plaintiff was not expected to carry on any construction until all relevant construction documents had been signed. He also referred to Exhibit B the contract document which was executed on the 3rd of August, 1997, and it gave the plaintiff a period of two weeks to mobilize to site and that period would have expired on the 18th of August, 1997. The decision taken by the defendants to terminate the contract was premature. He quoted the evidence given under cross-examination by Defence Witness 1 which amounted to admission against interest. He cited the case of ADEYEYE V. AJIBOYE [1987] 3 NWLR [pt.61] 4321. He referred also to the finding of the learned trial judge that the termination of the contract was wrong. On the particular practice of the defendants to commit a contractor to commence work before formal execution of a contract agreement, which the court below upheld to be correct, learned counsel submitted that there was no evidence to support it. He urged this court to set aside the conclusion of the court below on the practice which was never proved, though pleaded in paragraph 6 of the statement of defence. Learned counsel posited also that the provision made by Exhibit B for 7 days notice to be given before termination was not complied with. He urged this court to resolve issue No.1 in appellants favour.
The learned counsel for the respondents first raised an observation which had the character of a preliminary objection although he did not specifically call it as such. That has to do with the issues formulated by the appellant and some of the Grounds of Appeal especially grounds 1 and 2 as set out in the Notice of Appeal. The first of these observations is that the appellant failed to marry the issues to the grounds of appeal. It had also failed to create any nexus between the grounds of appeal and the issues in its argument. He urged this court to deprecate that kind of practice, Secondly, learned counsel observed that the appellant did not distill any issue from grounds 1 and 2 of Notice of Appeal as none of the three issues distilled raised the complaints in those grounds of appeal and that these grounds are deemed abandoned and would be struck out. Several cases were cited in support among which are OJEGBE V. OMOTASONE [1999] 6 NWLR [part 608] 591 at 597 – 598 H – A; OGUNBADE V. ADELEYE [1992] 8 NWLR [part 260] 409 at 419 0 – E, He urged this court to strike out the grounds.
Learned counsel for the appellant filed a reply brief in answer to the issues raised by the respondent. He replied that the 3 issues for determination as formulated by the appellant are borne out of the Grounds of Appeal dated 23rd of December, 2002 and filed on the 24th of December, 2002, and were not distilled from the 5 grounds of appeal contained in the earlier Notice of Appeal dated and filed on the 15th of December, 2000. The 3 issues by the appellant are borne out of the 8 grounds of appeal as contained in the Notice of Appeal aforesaid. He urged this court to discountenance the objection in the respondents brief relating to the issues for determination. I cannot say that the learned counsel for the respondent was raising a preliminary objection on the brief of argument and the Grounds of Appeal contained in the Notice of Appeal filed in the court below on the15th December, 2000. I say so because he has not complied with Order 2 Rule 9 of the Supreme Court Rules, 1999 [as amended] which provides that a respondent intending to rely upon a preliminary objection to the hearing of the appeal shall give the appellant three clear days notice thereof before hearing, setting out the grounds of objection, and shall file such notice together with ten copies thereof with the Registrar within the same time, Where he fails to comply, the court may refuse to entertain the objection or may adjourn the hearing thereof at the cost of the respondent or may make such order as it thinks fit.
I thought the learned counsel was making a peripheral observation that was why he was urging this court to deprecate the practice adopted by the learned counsel for the appellant. But for whatever that observation was made by the learned counsel for the respondent, he, at the end, succeeded in making the learned counsel for the appellant to file a reply brief in answer to that observation which to my mind, solved the respondents problem, The learned counsel for the respondent made the following observation:
- That the appellant has failed to marry the issues to the grounds of appeal in its Notice of Appeal
- the appellant also failed to create any nexus between the grounds of Appeal and the issues in its argument on issues distilled for determination and
- That the appellant did not distil any issue from grounds 1 and 2 of the Notice of Appeal as none of the three issues distilled raised the complaints in those grounds of appeal. These grounds he, submitted, are deemed abandoned and would be struck out. Learned counsel for the respondent went on to distill his three issues from the remaining grounds 3, 4 and 5 of the Notice of Appeal. Thus, the respondents issues set out earlier in this judgment stemmed from these three grounds.
In his reply brief which was filed on the 25th of May, 2009, the learned counsel for the appellant submitted that contrary to the submission by the respondents at paragraph 3 : 1 of the respondents brief of argument, the appellants 3 issues for determination were not founded on any of the 5 grounds of appeal earlier filed.
They were borne out of the grounds of appeal dated the 23rd of December, 2002 and filed on the 24th of December, 2002. The issues for determination, he further submitted, were not distilled from the 5 grounds of appeal as contained in the earlier Notice of Appeal dated and filed on the 15th of December, 2000. The appellants 3 issues, he said, were borne out of the 8 grounds of appeal as contained in the Notice of Appeal dated 23rd of December, 2002. He urged this court to discontenance the objection raised by the respondents.
I must say that this issue as argued above by the parties gave me a little anxiety in the sense that it was initially not clear to me as to how there came about two Notices of Appeal on the same appeal with nothing practically to guide one on the quandary, neither from any of the parties nor from the file made available to me for the appeal.
I had to travel extra miles to our Registry to find out exactly what had happened. It was then that I was shown an enrolled order made by this court which granted to the applicant/appellant extension of time to seek leave to appeal, leave to appeal and extension of time to appeal. It also deemed as dully filed [on that date that is 29th of December, 2003] the appellants Notice of Appeal. The respondent, according to that order, would have his time running from the date of service of that order on him. The order was made by this court on the 29th day of October, 2003.
The appellant did not tell us anywhere in his brief or his oral adumbration that there was an order of this court that validated his otherwise, incompetent Notice of Appeal. He never told us that he filed a motion for leave to appeal. Although the respondents counsel could not be blamed, there is nothing as well from him to inform us of whether he was ever served with the enrolled order or not, which was granted in chambers. This is one of the disturbing and nagging problems we usually grapple with in chamber proceedings.
Now, as I said earlier, the leave sought and obtained to file the appeal saved the appeal itself. The appellants brief of argument was shown to have been filed within a day after leave to appeal and a deeming order that the Notice of Appeal was dully filed, were granted. Whatever miracle might have been used by the appellant in getting his record of appeal and the brief of argument filed in this court within a day after having the Notice and Grounds of Appeal been deemed filed, may appear surprising, though not impossible or illegal.
There is therefore, a valid appeal before this court. There is also a competent brief filed by the appellant. I shall now consider the submissions made by learned counsel for the respondents on issue No.1. Learned counsel for the respondent submitted that the reason for terminating the appellants contract was simply as a result of the respondents contention that the appellant did not mobilize to site upon being granted the letter of award of the contract on 3rd of June, 1997. He referred to paragraphs 13 and 18 of the statement of defence which he set out as well. He argued further 11 that the respondents witnesses testified to this and tendered Exhibits K and L to show that the appellant was directed to mobilize to site and warned of the consequences of failure to do so. Learned counsel stated that there were conflicting averments on the statement of claim of the appellant. He cited paragraphs 8, 10, 12, 13, 24 and 27 thereof. He went further to say that with such contradictions reflected in the paragraphs referred to above, the appellant puts nobody in doubt that it did not mobilize to the site because of the respondents failure to provide it with drawings and because the agreement permitted them to mobilize to site within two weeks from the date of signing. Learned counsel for the respondent submitted that the appellant testified to these series of conflicting averments through its witnesses and given the state of pleadings and evidence, the appellant prevaricated on the issue of mobilization to site.
To further show that the appellant did not mobilize to site, the report of the independent inspection found that the appellant was not on the site. On the invoices, receipts, hire of machinery and procurement of materials and letter of advance payment bond, learned counsel for the respondents submitted that the appellant, who pleaded same in paragraph 27 of its statement of claim failed to tender any of them. He argued that if these documents were tendered, they could have shown to some extent that the appellant attempted to mobilize to the site. Learned counsel urged this court to invoke section 149 [d] of the Evidence Act Cap. 14 LFN 2004 and to hold that the appellant failed to produce them because if it had done so, those documents would have been against it. He cited in support: AREMU V. ADETORO [2007] 16 NWLR [1060] 12 244. Learned counsel for the respondents stated that they averred in paragraph 6 of their statement of Defence that it was normal practice in the 2nd defendants contracts to commence work before formal execution of a contract. Learned counsel submitted that the 2nd respondent wrote Exhibit K to the appellant directing it to commence construction immediately.
No reply brief was filed by the appellant thereof. He submitted that failure to traverse that new fact constituted a formal admission by the appellant that it knew of the custom and openly flouted it. There was no need for the respondents to prove an admitted fact. He cited the provision of section 75 of the Evidence Act and the case of NDUKWE V. LPDC [2007] 75 NWLR [pt. 1026) at page 56 paragraph G; AKPAN V. UMOH [1999] 11 NWLR [pt. 627)349; MBA V. AGU [1999] 12 NWLR [pt 629]1 at page 18 F – G.
It was submitted further that since Exhibit F did not render the admitted custom inapplicable, that custom or practice commenced operation immediately upon the award of the contract on the 3rd of June, 1997. It was argued that the subsequent provision in Exhibit B to the effect that the appellant had a period of two weeks to commence work after the execution of Exhibit B was ineffectual as the terms in Exhibit B manifestly or expressly operate prospectively and not retrospectively. The appellant, it was argued further, was obligated to mobilize to site immediately it received Exhibit F but failed to do so which entitled the respondents to terminate the contract. The evidence of Defence Witnesses 1 and 2 that even several weeks after Exhibit B was executed , the appellant failed to do anything at the site was another factor which defeats appellants right in sticking to the two week period provided by Exhibit B.
On the procedure of determining the contract and in compliance with what clause 21.01 of Exhibit B provided the respondents submitted that in paragraphs 17 and 19 of the statement of claim, the appellant admitted that there was a decision to terminate the contract and that notice was given to appellant through Defence Witness 1 of respondents intention to commence irreversible termination of the contract from 1st of September, 1997 on 13th of August, 1997. In evidence, the actual date of termination of the contract was 29th of August, 1997.It was argued further that the period between the date of the notice and the date of the letter of termination that is, Exhibit 1 was more than seven days. Learned counsel for the respondents cited paragraphs 15, 16 and 18 of the Statement of Defence that it issued series of warning letters to the appellant. Having regard to the pleadings of the parties and the evidence led, the 1st and 2nd respondents complied with Clause 21.01 of Exhibit B in terminating the contract. The trial court was wrong in holding that the contract was wrongfully terminated and the court below was right when it held otherwise. Learned counsel urged us to resolve this issue in favour of the respondents and against the appellant.
Appellants issue No.2 is the trial courts evaluation of evidence and its review by the court below. It is the submission of learned counsel for the appellant that the uncontroverted evidence of Defence Witness 1 to the effect that the respondent was instructed to commence work on site since 16th of June, 1997 vide Exhibit K, cannot stand because Exhibit B which was later in time and which was executed on the 3rd of August, 1997, gave plaintiff 14 days from the date of the execution of the contract to mobilize to site. He argued further that the oral evidence of Defence Witness 1 cannot be used to vary the contents of a written document that is Exhibit B THE CASE OF UNION BANK V. OZIGI [1994] 3 NWLR [333] 385 at page 389 was cited in support. The learned counsel made reference to the practice where a contractor could be called upon to commence work on site before formal execution of the contract. He also made reference to the court belows holding on the Bill of Quantity and the drawing; Exhibit A1 was the Bill of Quantity which was admitted in evidence with no objection from the defendants/respondents. As to Exhibit A 1s authenticity, it was the court below that raised that issue Suo Motu.
There was no conflict in the evidence on the source of the Bill of Quantity and it was wrong to reject the evidence of 1st plaintiffs witness on the basis of a conflict which did not exist. Learned counsel for the appellant urged this court to hold that there was no misconception whatsoever on the part of the learned trial judge concerning the evaluation he gave to the evidence before him, rather, it was the court below that fell into a grave error in substituting its own views for that of the trial court. He urged us to resolve this issue in favour of the appellant. Learned counsel for the respondents submitted on issue two that the interference by an appeal court with the evaluation of evidence made by a trial court as well as with the findings of a trial court are governed by settled principles of law. Several cases were cited in support including: EBOADE V. ATOMESUN [1997] 5 NWLR [pt.506] 490 at page 507 – 508; MAGAJI V. ODOFIN [1978] 4 SC 94 at page 96; NZEKWU V. NZEKWU [1989] 2 NWLR [pt.104] 373 at page 393. The principle stated in these cases, is that an appellate court will not interfere with such findings unless they are perverse or unsupportable by the evidence led at the trial. It is further argued by the learned counsel for the respondents that the findings of the trial court which led it to the conclusion that the termination of the contract was wrongful were not supported by the pleadings and evidence led at the trial. The court below was in a good position to interfere with the findings and reassess the evidence. Learned counsel urged this court to resolve the issue in favour of the respondents.
Appellants issue No. 3 is on the award of damages made by the trial court which the court below set aside. Learned counsel for the appellant urged this court to hold that the defendants conduct in terminating the contract was wrongful, hence, the plaintiff was entitled to damages. He further urged that since the evidence of 1st plaintiffs witness on the profit margin of 30% of the contract sum was not challenged and should be relied upon. He relied on the case of OSONDU co. LTD. V. AKHIGBE [1999] 11 NWLR [pt.625] 1. Learned counsel urged us to set aside the contrary views of the court below and restore PAGE 7 the award made by the trial court as there was no evidence to the contrary before the court below that the plaintiff/appellant could not have realized 15% as profit on the contract price. Learned counsel for the respondents submitted that the position taken by the court below in selling aside the award of N14,193,569.68 in favour of the appellant, is unassailable having regard to the state of pleadings and evidence in this case. He submitted further that given the act of termination of the contract was not wrongful, the appellant cannot be entitled to any damages as he was found by the court below to have done nothing at the site and he cannot benefit from his own wrong.
He cited in support the cases of KANO TEXTILES PLC V. GLOEDE & HOFF [Nig.] Ltd. [2002] 2 NWLR [pt.751 420 at page 450; FIRST BANK OF NIGERIA PLC. V. MAY MEDICAL CLINIC [1996] 9 NWLR [pt.471] 195 at page 204. He urged us to resolve this issue in favour of the respondents and against the appellant. Now, it is clear from the pleadings of the parties, the evidence led before the trial court, its findings and judgment and the decision of the court below that this appeal arose as a result of dispute between the parties on whether there was a breach of the terms embedded in a Road Construction contract entered by the parties. Issue No. 1 by the appellant which is agreed by the respondents is on the lawfulness of termination of the contract between the parties. Now, where a legally permitted contract has been concluded by parties to it, the parties become bound by the terms and conditions provided therein. None of the parties will be permitted by law to resile from such terms and conditions except for good and genuine reasons. As a general rule, a contract may be determined either in accordance with the contractual terms such as through performance by the promisor of the exact terms he undertook to do for example, in contract of sale of goods or contract of supplies of service. Equally, a contract can be brought to termination where the promisor failed to perform through breach or where he made misrepresentation or where subsequent agreement took place.
A Contract can also be terminated by frustration and or as a result of certain miscellaneous events such as merger and in some cases death or bankruptcy: In its paragraph 23 of the statement of claim, the plaintiff/appellant averred as follow: ’23. In violation of the contract agreement and the content of preliminary letter aforesaid, the defendants vide a letter dated 29th of August, 1997 reference No.FDCA/DES/44/S.295/80 signed by one Asmau T. Garba [Mrs.] terminated the plaintiffs contract. The plaintiff plead [sic}and will rely on the aforesaid letter at the trial.’
In their statement of Defence, the defendants/respondents averred as follow: ’13. The defendant deny paragraph [sic] 16 and 17 of the plaintiffs statement of claim and aver that the contract was terminated on account of the plaintiffs persistent failure to mobilize on site in spite of repeated demands and instructions so to do. 18. The defendants denied paragraph 23 of the plaintiffs statement of claim and further aver that the plaintiffs contract was terminated for failure to commence work of site in spite of repeated warnings.’ After the evaluation of evidence led before him, the learned trial judge made a finding on the termination of the contract between the parties. He stated, inter alia: The formal contract agreement was executed on 30/7/97 though signed sealed and delivered on 3/8/97 between the parties as evidenced by exhibit B However as per their letter of 29/8/97, Exhibit 1 the said contract was terminated. The exhibit and paragraph 12 and 18 of statement of defence gives reasons for the termination as the plaintiffs persistent failure to mobilise on site in spite of repeated demands and instruction so to do by the defendants. This according to the learned counsel for the defendants, made it imperative that in so far as the plaintiff was in breach of contract should be and was terminated. The award of contract was however dated 3/6/97 [exhibit F] and it says that the contract was to commence after Exhibit B was prepared and signed. This was done on 29/7/97 and finalised on 3/8/97. Therefore issuance of exhibit L which was dated 3/7/97 was putting the cart before the horse.
The defendants cannot be hard [sic] to be complaining that the plaintiffs had refused to mobilise on site as the time for so doing was not yet at hand as per the contents and timing of exhibits F and exhibit B.’ PAGE 8 The learned trial judge also found that the only relevant documents in the contract are Exhibits F and B and it is the terms contained therein that the plaintiff should follow to the letter and that much had been admitted by Defence Witness 1. The learned trial judge stated further as follows:
‘The learned counsel for the defendants has rightly submitted that exhibits B[sic] speaks for itself. The agreement executed on 30/7/97 and signed on 3/8/97 allow [sic] the plaintiffs 2 weeks within which to commence work on site after DW1 wrote exhibit D on 24/8/97, four days before the grace period of 2 weeks had expired and it was to serve as last warning. this in my opinion is premature as the weeks allowed by exhibit B had not yet expired. However, assuming that exhibit B was a notice for the plaintiff to commence work on site and with a period of grace of up to 1/9/97 the termination letter dated 29/8/97 is premature, the contract work had not commenced as per exhibit D. Therefore, it cannot be construe [sic] to be abandoned in the letter of clause 21.01 read together with exhibit D. More so, that as per exhibit H, the drawings and specifications were not handed over to the plaintiffs by DW1 in line with clause 18,01 of the agreement.
SC. 264/2002
