Omega Bank Nigeria Plc V. O. B. C. Limited (2005)

LAWGLOBAL HUB Lead Judgment Report

MUSDAPHER, J.S.C.

In the High Court of Justice of Ondo State, in the Akure Judicial Division and in suit No. AK/305/94, the plaintiff as per paragraph 94 of its amended statement of claim claimed against the defendant as follows:-

“94. Whereof the plaintiff claims from the defendant as follows:

(i) A sum of N71, 000,000.00 (Seventy one million naira) as follows:

(a) A sum N47, 000.00 being anticipated profit which the plaintiff lost due to the refusal and or failure to release to the plaintiff a sum of at least N5 million nexim, fund, three year revolving export finance facility or arose from the refusal and or failure on the part of the defendant to process the plaintiff’s application for N5 million nexim three years revolving export finance facility for 1991/92, 1992/93 and 1993/94.

(b) A sum of N12 million as damages from the refusal of the defendant to release to the plaintiff latter’s pledged securities with the defendant but for which no fund was made available for the year 1994/95.

(c) The further sum of N12 million as damages arising from the refusal of the defendant to release to the plaintiff, the plaintiff’s securities with the defendant but for which no fund was made available as well as crippling the plaintiff’s access to alternative funds for the year 1995/96.

(ii) 114,100.00 pounds being additional expenses incurred by Messrs Minstrel Limited of England on purchase of 1,100 metric tons of cocoa beans which the plaintiff had, to the knowledge of the defendant, contracted to supply Messrs Minstrel Limited but which the plaintiff could not supply as a result of the failure and or refusal of the defendant to make available or process plaintiff’s application for nexim three year revolving export finance facility.

(iii) 38,250.00 pounds being additional expenses incurred by Messrs Minstrel Limited of England on purchase of 450 Metric tons of cocoa beans which the plaintiff had, to the knowledge of the defendant, contracted to supply Messrs Minstrel Limited but which the plaintiff could not supply as a result of the failure and or refusal of the defendant to make available or process plaintiff’s application for NEXIM three year revolving export finance facility.

(iv) The sum of $1,730.25 (US Dollars) being the balance of the plaintiff’s dollars account with the defendant.

(v) An order that the defendant shall pay to the plaintiff reliefs II, III and IV above at the rate of exchange prevailing as at the time the defendant satisfied this judgment on reliefs (ii), (iii) and (iv) above.

(vi) An order for the immediate release of the securities deeds pledged for the properties mentioned in paragraph 8 and 71 above.

(vii) Interest at the rate of 10% on each of the items of claim mentioned above until date of judgment and thereafter until whole judgment debt is liquidated.”

The defendant’s amended statement of defence contained a counter-claim whereby it sought the following relief:-

“21. Whereof the defendant claims from the plaintiff the sum of N2,169,930.10 with banking interest from the 9th February, 1995, until the sum is finally liquidated.”

In reaction, the plaintiff filed a reply to the statement of defence and a defence to the counter-claim. At the hearing of the matter, the plaintiff called 4 witnesses and tendered 38 exhibits (exhibits P1- P38). The defendant called one witness and tendered one document, exhibit 1. By leave of court the parties filed written addresses. In his judgment delivered on the 13/1/1998, the learned trial Judge found for the plaintiff. He held (1) there was a concluded nexim loan agreement for 3 years running in the sum of 6 million naira for each cocoa season. (2) the defendant breached that loan agreement and (3) that the plaintiff was entitled to all the reliefs recited above except the rate of interest post judgment fixed at 71/2%. The learned trial Judge also awarded the defendant the sum of N640,593.53 as its proved counter-claim.

The defendant felt unhappy with the decision and appealed to the Court of Appeal. Thirteen issues for determination of the appeal were submitted to the Court of Appeal.

The plaintiff also felt unhappy with the decision on the counterclaim and also filed a cross-appeal.

After the consideration of the issues in the appeal and the issues raised in the cross-appeal, the Court of Appeal per Rowland, JCA who read the lead judgment and agreed to by Ibiyeye and Akaahs, JJ.C.A. dismissed in its entirety the defendant’s appeal and allowed in part the cross-appeal, by reducing the award made to the defendant from N640,593.53 to N389,947.09. The defendant hereinafter called the appellant felt disgruntled and has now appealed to this court.

The plaintiff shall hereinafter be called the respondent.

It is with the leave of this court that the appellant filed an amended notice of appeal containing 18 grounds of appeal. It is also with the leave of the court that the appellant filed appellant’s amended brief on the 17/6/2004 while the respondent’s brief was filed on 16/7/2004. Before the examination of the grounds of appeal and the issues distilled therefrom, it shall be convenient at this stage to sketch out the facts. The facts put shortly are: The appellant is a commercial bank where the respondent in the normal course of business kept a current account. In September, 1991, the respondent applied to the appellant for N5 million Nigerian Export and Import Bank (nexim) revolving loan for a period of three years to enable the respondent purchase and export Cocoa to its foreign customer namely Minstrel Limited of the United Kingdom. The nexim credit facility is grantable to an importer or exporter of goods through a commercial bank. The facility is designed to promote trade in the non-oil sector. The interest rate charged on the nexim loan is lower than the rate charged by commercial banks. The scheme is only available to an importer or exporter, by an application to a commercial bank. The commercial bank processes the application and sends it to nexim for approval. The commercial bank, however remains primarily responsible to repay the loan to nexim. Therefore the commercial bank has the duty to protect itself and to ensure that an applicant for the nexim credit will not default in repayment. So there must be an agreement between the applicant and a commercial bank.

The appellant processed and secured N6 million nexim loan for the use of the respondent. It is common ground that the appellant was not merely an intermediary to this loan, but was the primary obligor to nexim. In the event of any default the appellant is duty bound to refund the loan plus interest to nexim. According to the appellant, the respondent’s application for the loan exhibit P5 was replied in exhibit P7 a letter dated 10/1/1992 in which the appellant conveyed the approval of the application with conditions which the respondent must fulfil before it could utilise the facility. The respondent on the other hand insisted that exhibit P6 an internal Memorandum unsigned and emanating from the head office of the appellant and addressed to its Akure branch controller was the reply to its application. The learned trial Judge found that exhibit P6 concluded the loan agreement. The relevant exhibits that is exhibits P5, P6 and P7 are hereunder reproduced so that their impact may be properly appreciated.

“Exhibit P5

16th September, 1991

The Manager,

Owena Bank Nigeria Plc.,

17, Oyemekun Road,

Akure. –

Dear Sir,

Application for a Three Year Revolving Export Finance Facility of Five Million (5,000,000.00) under Central Bank Refinancing.

We shall be very much obliged if you will approve a three year revolving facility of five million naira under the Central Bank of Nigeria refinancing scheme for us to enable us embark on a very dynamic export of cocoa beans, butter and other processed cocoa products. As you will notice from your record, we have been on the export business for years and we have always used facilities from Merchant Bank in Lagos through your Akure Branch and we obtained an overdraft of seven hundred and fifty thousand naira from you last season out of which we exported one hundred and sixty metric tonnes of cocoa with total value of US Dollar of one hundred and fifty-two thousand ($152,000.00).

The export business requires sufficient funds and continuously and this is why we are now applying for a three year facility of five million naira backed by Central Bank refinancing scheme. Your Apapa Office is already handling our application to the Central Bank of Nigeria and we are very optimistic of the success of our application with an initial contract for six hundred metric tonnes of cocoa from Minstrel Limited of England.

We await your immediate approval of this application to enable us make a good start.

Yours faithfully,

Signed

Chief Olaiya Bamidele

(Managing Director).”

“Exhibit P6

CFE: EEO: 003:91

2nd December, 1991

The Controller,

Owena Bank (Nigeria) Plc.

Akure

Dear Sir,

Re: Export Finance Facility RRF of N6, 000, 000. 00.

We refer to your application No. 11CR:03:FFA:91 dated 21st October, 1991 in respect of the above application and hereby convey Central Office approval and conditions stipulated below:

Nature and Amount Enhancement of existing Export Finance Facility of N750k to N6, 000,000.00 under no circumstance should this limit be exceeded without the prior approval of the Central Office.

Pricing

(a) Interest rate at CBN Refinancing and Rediscounting rate of 18% per annum.

(b) COT and other charges as per existing CBN rules and regulations.

(c) Arrangement fee – 1% of N6, 000,000.00 flat.

Securities:

(1) Existing Legal Mortgage on property located 168, Oyemekun Road, Akure valued at N1.8M

to be up stamped.

(2) Legal Mortgage on Block IX, Plot 3, Ondo State Government Commercial Layout, Ilesa Road, Akure, valued at N805,83.00.

(3) Legal Mortgage on properties at No.1 Olaiya Close, Off Bank, Akure valued at N600,480.00

and No.9 Sowole Street, Off Dopemu Road, Agege, Lagos.

(4) Confirmed in-evocable letter of credit from a first class overseas bank.

(5) Lien on Export proceeds.

(6) Against warehouse warrants.

Repayment/Expiry

Facility to revolve but must be fully adjusted after a period 150 days as CBN refinancing is only for 150 days.

To be reviewed after every 3 months.

Other Terms and Conditions

(1) OBC Motors Limited will produce confirmed In-evocable letter of credit for Nigeria Cocoa Beans.

(2) All shipment will be on FOB basis.

(3) Disbursements must be fully monitored and must be in tranches against Warehouse receipts. (4) Draw down to be in tranches depending on value of warehouse receipt and/or stocks purchased. After the first draw down, the warehouse receipt will be deposited with the Bank to facilitate the second drawn down. Draw down will only be by Banks Cheques in the name of the vendors for purchasing the product.

(5) Paid up capital should be increased to at least N5 million latest by 30/4/92 submission of latest audited financials to determine the exact position of the company latest by 31/1/92.

(6) Security perfection to be completed before disbursement.

(7) All other terms and conditions stipulated in our sanction letter No. CFE/EO/FTD/ 1/27/90 dated 8th August, 1990 remain unchanged.

Please find enclosed a copy of CBN approval for RRF of N,000,000.00 and note that disbursements would only be effected from Export Refinance Account as this facility should not affect our credit ceiling position.

Yours faithfully,

J.O.O

Mirza Nazim Alo E.B. Odugbesan (Mrs)

Controller Manager

Central Foreign Exchange Central Foreign

Exchange.”

Exhibit P7

“The Managing Director,

OBC Motor’s Limited,

168, Oyemekun Road,

PD. 130x 577

Akure.

Dear Sir,

Re: Your Application for Export Finance Facility RRf of (N5,000,000.00 Five Million under Central Bank Refinancing.

We refer to your application dated 16th September, 1991, in respect of the above application and hereby convey 13ank’s approval subject to the terms and conditions stipulated below:

Nature and Amount

Enhancement of existing Export Finance Facility of N7.50k to N6,000,000.00.

Pricing

(a) Interest rate at CBN Refinancing and Rediscounting rate of 18% per annum.

(b) COT and other charges as per existing CBN rules and regulations.

(c) Arrangement fee – 1% of N6, 000,000.00 flat.

Securities

(1) Existing Legal Mortgage on Property located at 168, Oyemekun Road, Akure valued at N1.8M to be upstamped.

(2) Legal Mortgage on Block IX Plot 3 Ondo State Govt. Commercial Layout Ilesa Road, Akure,

valued at N805,83.00.

(3) Legal Mortgage on properties at No.1, Oliaye Close, Off Bank Road, Akure, valued at N600, 480.00 and No.9 Sowole Street, Off Dopemu Road, Agege Lagos.

(4) Confirmed in-evocable letter of credit from a first class Overseas Bank

(5) Lien on Export proceeds.

(6) Against Warehouse Warrants.

Repayment/Expiry

Facility to revolve but must be fully adjusted after a period 150 days as CBN refinancing is only for 150 days.

To be reviewed after every 3 months.

Other Terms and Conditions

1. OBC Motors Limited will produce confirmed irrevocable letter of credit from first class

Overseas Bank for Nigeria Cocoa Beans.

2. All shipment will be on FOB basis.
3. Disbursements must be fully monitored and must be in tranches against Warehouse Receipts.
4. Draw down to be in tranches depending on value of Warehouse Receipt and/or stocks purchased. After the first draw down, the warehouse receipt will be deposited with the Bank to facilitate the second drawn down. Draw down will only be by Banks Cheques in the name of the vendors for purchasing the produce.
5. Under no circumstances should this limit be exceeded without the prior approval of the Central Office.
6. Paid up capital should be increased to at least N2.5 Million latest by 30th April, 1992 submission of latest audited financial to determine the exact position of the economy latest by 31st January, 1992.
7. Security perfection to be completed before disbursement.
8. All other terms and conditions stipulated in our sanction letter No. CFE/EO/FTD/1127/90 dated 8th August, 1991 remain unchanged.
9. All legal and other expenses in respect of perfection of securities/documents and as may be incurred from time to time in conduct of the facilities will be borne by you and debited to your account. Also, the cost of valuation of properties charged as security to the Bank by an outside appraiser, charges incurred in connection with inspection security at periodical intervals by the Bank’s staff etc will be recovered from you from time to time.
10. 1n case this offer is acceptable to you, please indicate by appending your signature on the copy of this letter and return same to the undersigned.

Yours faithfully,

Signed Signed

E.A. Faluyi C.O. Olaniyan (Mrs)

Principal Manager Senior Manager-Credit”

In any event, the respondent rejected the conditions contained in exhibit 7 as being too onerous consequent upon which the good relationship broke down and the facility could not fall through. Bad blood generated over this resulting into the exchange of correspondence and the intervention by both nexim and the Central Bank of Nigeria. The respondent on the other hand claimed and insisted that the appellant was wrong to have imposed impossible conditions as contained in exhibit 7.

The respondent further claimed that the conditions imposed by the appellant in exhibit 7 amounted to breaching the contract which was claimed to have been concluded before the appellant applied for and received the funds from nexim. The respondent further contended, and such contention found favour with the courts below that the loan agreement could be inferred from the surrounding circumstances including exhibits P11, P6 and P21 and the oral discussions between one Ali and PW1 showed that the parties agreed orally to amend the terms and conditions contained in exhibit P6 due to protestations of the respondent.

Now the appellant has identified, formulated and submitted to this court the following issues as arising for determination of the appeal. The issues are:-

“(1) Whether the learned trial Justices of the Court of Appeal rightly or wrongly admitted and relied on exhibit P6, which is unsigned internal memo of the appellant whose alleged makers/authors, were not called as witnesses.

(2) Whether the learned Justices of the Court of Appeal rightly or wrongly held that there was a concluded nexim loan agreement between the appellant and the respondent which was breached by the appellant.

(3) Whether the Court of Appeal was right or wrong when it held that the issue of parol evidence not being used to contradict written document was a new issue requiring leave of the court

(4) Whether on the state of the pleadings, the learned justices of the Court of Appeal correctly or wrongly, held that the appellant admitted the existence of nexim loan agreement between the parties and that there was an agreement between the parties and that there was an agreement to delete objectionable part of exhibit P6.

(5) Assuming the appellant was rightly held liable for breach of the nexim loan agreement, whether the Court of Appeal correctly assessed/awarded special damages of N47 million in favour of the respondent, as loss of anticipated profits for 1991/1992, 1992/1993 and 1993/ 94 cocoa seasons.

(6) Whether the learned Justices of the Court of Appeal rightly or wrongly held the appellant liable for detinue in respect of the title deeds of properties which the respondent had submitted to the appellant.

(7) Were the learned Justice of the Court of Appeal right or wrong in confirming the award of damages of N24 million against the appellant on account of the alleged detinue

(8) Were the learned Justice of the Court of Appeal right or wrong in their decision to award N114, 100.00 and US Dollars 38,250.00 in, favour of the respondent on account of the damages allegedly suffered by her overseas buyers Messrs. Minstrel Limited in procuring

tons of cocoa beans from alternative sources in 1991/92; 1992/93 and 1993/94 cocoa seasons

(9) Were the learned Justices of the Court of Appeal right or wrong in rejecting exhibit P29 in evidence on the ground that it is a privileged document

(10) Whether the Court of Appeal was right or wrong in confirming interest of 71/2% per annum made by the trial Judge on the judgment debt.”

In his brief for the respondent, the learned counsel formulated more or less the same number of issues. It is my view that the issues I

are unwieldy, prolix and verbose. This court has on several occasions condemned the proliferation of issues in briefs of argument. It is not the number of issues for determination formulated that determines the quality of a brief or that determines the success of an appeal. See Iwoha v. NIPOST Ltd. (2003) 8 NWLR (Pt. 822) 308. The issues formulated in this case, have the effect to obscure the fundamental and core issue in this case, that is whether the negotiations between the parties eventually crystallized into a valid and enforceable agreement for which damages may be recoverable for the breach of the contract. For, it is only when there is a valid and enforceable contract, that the issues for example of damages may become relevant and important. Accordingly, from the stand of the parties and with particular reference to the exhibits referred to above and reproduced, in my view the central and crucial issue is first to determine whether there was a binding contract entered into by the parties.

The lower courts arrived at the decision that there was a nexim loan agreement entered into by the parties and that the appellant breached the loan agreement by the interpretation of exhibit P5, exhibit P6, exhibit P7 and exhibit P11.

The case of the appellant was that although it sourced the nexim facility, it had to protect itself of ensuring the repayment of the loan, that was why it communicated its conditions to the respondent in exhibit P7 which was also in answer to the respondent’s application as contained in exhibit P5. It is submitted that the respondent rejected the offer in exhibit P7. The appellant, hence argued that there was no contract. It is argued that the learned justices relied on exhibit P5, P6, P11 and the alleged oral, agreement to find the existence of a contract. It is further submitted that the lower court was in error to have found the existence of the nexim contract by reference to the conduct of the appellant when it allowed the respondent to draw on its account. It is again submitted that the overdrawing of the account simpliciter does not justify the inference of an admission of a concluded nexim agreement, because where a customer of a bank whose account is insufficiently funded, draws a cheque over and above the funds in his account, such drawing is regarded as an application to the bank for an overdraft. See ACB Ltd. v. Egbunike (1988) 4 NWLR (Pt. 88) 350; Brooks & Co. v. Blackborn Benefit Society (1984) AC 857 at 864; Cuthbert v. Robarts, Lubbock & Co. (1909) 2 CHD 226 at 233.

It is submitted that exhibit P6 was not addressed to the respondent, it was an internal memo, meant to be sent to an organ of the appellant, somehow the respondent hijacked it and prematurely replied it in exhibit P11 even before it received the reply to its application for the loan which the appellant made in exhibit P7.

Exhibit P11 clearly was a reply to exhibit P6 which was not addressed to the respondent. It is submitted that the respondent rejected the terms properly addressed to it in exhibit P7. The reaction of the respondent to exhibit P7 was a rejection of the terms of the loan PW1 for the respondent testified thus “there was no way we could accept the offer in exhibitP7. (Pages 123 lines 26 -30 of the records) DW1 corroborated the stand of the respondents in their rejection of the terms. It is submitted that the learned justices of the lower court were in error to have treated exhibit P7 as a letter of breach of contract rather than a letter of offer to the respondents. It is submitted that the duty of the court is to give effect to the agreement of the parties. Learned counsel referred to (1) Alfotrin Ltd. v. A.-G., Federation (1996) 9 NWLR (Pt. 475) 634 at 647; Fakorede and Others v. A.-G., Western State (1972) 1 All NLR (Pt. 1) 178 at 189.

It is submitted that the Court of Appeal was in error to have held that a contract existed before exhibit 7 was issued in breach of that contract. It is submitted that “it is trite law that an offer and unqualified acceptance of the offer together with consideration are essential for existence of any contract”. See Tsokwa Motors Ltd. v. UBN Ltd. (1996)9 NWLR (Pt.471) 129; PTI v. Uwamu (2001) 5 NWLR (Pt. 705) 112; Faagol Instrument Ltd. v. National Bank of Nigeria Ltd. (1993) 1NWLR (Pt. 271) 586; Neka V. ACB Ltd. (2004) 3 MISC page 118; Harvey v. Facey (1893) AC 552; Clifton v. Palumbo (1944) 2 All ER 497.

It is again submitted that exhibit P6 could not be a reply to the application in exhibit P5 as there is a complete absence of connection between the two. The latter made no reference to the former and was not addressed to the respondent.

The learned counsel for the respondent on the other hand argued that whether there was a nexim Loan agreement and whether the loan agreement is breached by the appellant centers on the interpretation to be given to exhibits P.5, P6, P7 and P11. It is submitted that nexim loan by its special nature, the facility is applied by a bank only after the bank has satisfied itself with the application made by a customer. It is submitted that once nexim approved the facility, the commercial bank has no light or business of imposing conditions on the exporter – who is the beneficiary. It is submitted that the contract became concluded even before the commercial bank applies for the loan. In the instant case, the appellant applied for the loan for the benefit of the respondent and received it on the 19/12/1991 and refused to disburse it.

It is again submitted that exhibit P5 is the application for the facility made by the respondent. Exhibit P6 was the letter of which the appellant notified the respondent of the approval and exhibit P7 is a fresh offer made by the appellant. It is submitted again that the contract is consummated by exhibits P5 and P6. It is again submitted that the appellant had failed to show that the two lower courts were wrong to conclude that an agreement had been established by exhibit P6

It is again submitted that the contention of the appellant that exhibit P7 was the offer of the contract for the nexim loan which was rejected by the respondent by exhibit P 11 cannot be correct because while exhibit P7 is dated 10/1/1992. Exhibit P11 is dated 6/1/1992 and this exhibit P11 predated exhibit P7 and could not therefore be correct to insist that exhibit P11 is a reply to exhibit P7.

On the contrary exhibit P11 was a follow up of the discussion between PW1 and one Mr. Ali which was held pursuant to exhibit P6 and which discussion culminated into the contract the lower courts held to have been entered into by the parties. It was argued that. The appellant was therefore manifestly in error to insist that exhibit P11 was a reply to exhibit P7. It was further argued .that exhibit P11 clearly reveals the agreement entered by ‘the ‘parties (PW1 and Mr. Ali) including the agreement to delete the agreement objectionable conditions contained in exhibit P6.

It is manifest that the trial court found the existence of an oral contract for the nexim facility entered into between the parties, which finding’s affirmed by the Court of Appeal. It is now settled law that it is not the function of the court to make contracts between the two parties, but it is the court’s duty to construe the surrounding circumstances including written and oral statements as to effectuate the intention of the parties. In order to decide whether the parties have reached an agreement, it is usual to inquire whether there has been a definite offer by one party and unqualified acceptance of that offer by another. Now, the respondent applied for the loan facility through exhibit P5 .to the Akure branch of the appellant. Without waiting for a reply from Akure branch, the respondent went to the head office of the appellant and there obtained exhibit P6 an unsigned internal memorandum not addressed to the respondent, but to an official of the appellant. It relied on exhibit P6 as the reply to its letter of application for the loan in exhibit P5. In my view, this cannot be correct, exhibit P6 is not and cannot be the reply to its letter of application for the loan simply because it was not addressed to it. Indeed in its negotiations for the loan facility the respondent was dealing with the Akure branch of the appellant. It is very clear that the respondent jumped the gun and began to act on exhibit P6 which was not addressed to it and which clearly referred to an earlier correspondence between the “Controller” Akure branch and the head office. The respondent was not dealing with the appellant’s head office. In my view the court below was in error to have held that exhibit P6 was the acceptance of exhibit P5. There is no correlation or connection between exhibit P5 and exhibit P6. The latter made no reference to the former. It is the law of contract that the letter of acceptance must unqualifiedly accept a particular offer.

The lower court was therefore in error to have placed reliance to exhibit P6 and P 11 and to find an oral agreement between the respondent’s Managing Director and the appellant’s Mr. Ali on the nexim Loan. The lower court affirmed the finding of the trial court on the existence of an oral agreement made with Mr. Ali which clearly was not the case of the respondent. Both in its evidence and pleadings the respondent never relied on any oral agreement. The respondent relied on exhibit P6 as the acceptance of its application in exhibit P5. As mentioned above, exhibit P6 was not addressed to it. It was an internal memorandum, for the consumption and use of the staff of the appellant. The respondent applied for the facility to the Akure branch of the appellant and not to the head office of the appellant.

The appellant clearly, in my view, replied the respondents’ application for the facility (exhibit P5) in its letter addressed to it in exhibit P7. There is no dispute whatever that the respondent rejected the terms contained in exhibit P7. When negotiations are in progress between the parties intending to enter into a contract, the whole of those negotiations must be considered as to determine, whether, if at all, the contract came into being. The parties here intended to have a written contract and by their rejection of exhibit P7, the respondents must be taken to have refused to enter into the contract with the appellant. Accordingly, there was no contract entered between the parties.

Before I part with this issue, I think I need to emphasise and reiterate that although courts may not make contract for the parties where none exists, the courts will seek to uphold bargains made commercially, wherever possible, recognising that they often record the most important agreements in crude and summary fashion and will seek to construe any documents fairly and broadly without being too astute or subtle in finding defects. See Brown v. Gould (1972) 1 eh. 53; Hillas and Co. Ltd. v. Arcos Ltd. (1932) 147 LT 503; (1932) AER 494. After due consideration of all the circumstances and if satisfied that there was an ascertainable and determinate intention to contract, the courts will strive to give effect to that intention looking at the intent and not the mere form. But in the instant case, there is no sufficient certainty as to the acceptance of the terms offered by the appellant in exhibit P7, rather it was manifest that the respondent rejected the offer made by the appellant in exhibit P7. It is impossible under all the circumstances of this case to take exhibit P.6 as an offer or acceptance of an offer. It is a document not signed nor addressed to the respondent, it is a worthless document which does not have any efficacy in law. Accordingly any agreement entered into by Mr. Ali and the PW 1 to amend it does not qualify it to be an agreement initiated by the respondent in exhibit P5. Thus, issues 1, 2, 3 and 4 all broadly relating to the existence of a binding contract between the parties are deemed to have been discussed under this issue and the end result being that there is no enforceable contract proved by the respondent. The respondent clearly rejected the offer of the appellant in exhibit P7, it cannot claim the existence of any other contract, written or oral.

Now, issues 5, 6, 7,8 and 10, relate to the question of damages and interest, recoverable for the breach of the contract. Damages for breach of contract are a compensation to the plaintiff for the damage, loss or injury suffered through that breach. It is meant, as far as money can do it, for the plaintiff to be placed in the same position as if the contract has been performed. But there must be a contract and its breach before the issues of damages and interest can arise. Accordingly under the circumstances and having regard to my finding that there was no contract entered into by the parties, the respondent having rejected the offer made by the appellant, the question of damages became non-issues in this appeal and are struck out. I shall now deal with issue No.9.

Issue No.9

This relates to the admission of exhibit P29 which the learned trial Judge utilized in awarding the appellant the sum of N640,593.00 on the counter-claim. The Court of Appeal held that exhibit P29 was inadmissible being a privileged document and reduced the counter-claim to N389,947.09. It is submitted that the privileged status of exhibit P29 in which the respondent admitted its indebtedness to the appellant was not an issue before the trial court.

It was also not an issue in the cross-appeal and indeed exhibit P29 was tendered without objection at the trial.

The learned counsel for the respondent on the other hand argued that a privileged document remains in law inadmissible to all purposes and that even when the respondent did not object to it, it remains inadmissible.

Now, there is no doubt that the issue of the privileged status of exhibit P29 was not made an issue in the cross-appeal of the respondent in the court below. At the trial exhibit P29 was tendered

in evidence and there was no objection on the part of the respondent.

In it the respondent admitted “balance due for repayment by us.

N640,593.53” exhibit P29 was not marked “without prejudice” the Court of Appeal in its judgment refused to act on exhibit P29 because according to it, it was a privileged document.

The law is settled that a court can only act upon evidence that is legally admissible. It cannot, and it has no discretion to admit and act upon evidence which is legally inadmissible, even with the consent of the parties. See Kale v. Coker (1982) 12 SC 252; Alade v. Olukade (1976) 2 SC 183. But in my view there is nothing in the Evidence Act that makes exhibit P29 inadmissible, it is a written statement made by the respondent adverse to its interest. See S.S.N.L. v. Eyuafe (1976) 9-10 SC 135. Where no objection is raised when a document is offered in evidence, the document will be admitted and acted upon and the opposing party cannot later complain on its admissibility unless the document is inadmissible by law. See Etim v. Ekpe (1983) 1 SCNLR 120. In any event the inadmissibility of the exhibit P29 was a fresh issue in the Court of Appeal for which no leave was sought and obtained. It was therefore incompetent.

On that ground alone, I resolve the issue in favour of the appellant On the whole, the appeal of the appellant is allowed. The judgment and orders of the court below in respect of the plaintiff respondent’s claims are set aside and in their place, the claims of plaintiff/respondent shall be and are hereby dismissed. The decision of the Court of Appeal in relation to the counter-claim be and it hereby set aside and the decision of the trial court is restored.

The appellant is entitled to costs in the trial court, Court of Appeal and this court, respectively assessed at N7 ,500,00, N7,500.00 and N 10,000.00.

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SC. 77/2002