Southbeach Co. Ltd & Anor V. Williams (2021)
LAWGLOBAL HUB Lead Judgment Report
MOHAMMED LAWAL GARBA, J.S.C.
Based on a sub-lease agreement between respondent, the sub-leasor, and the appellants; as sub-lessee, the respondent had sued the appellants before the High Court of Lagos State, sitting at Ikeja (trial Court) in suit No. LD/1631/2010 and claimed as follows:
“(a) A declaration that the defendants’ wrongful destruction and devastation of 3 bedroom bungalow together with the appurtenances situation and known as 30 Oladipo Bateye Street GRA Ikeja Lagos (the property) and/or the structures thereon either personally or through their servants, agent assigns or howsoever as set out in paragraphs 15, 16 and 17 of the statement of claim constitutes trespass to property.
(b) Damages for trespass and related claims in the total sum of N475,000,000.00 (Four Hundred and Seventy Five Million Naira) comprising.
(i) The sum of N200,000,000.00 (Two Hundred Million Naira) being cost of reinstatement of the destroyed property to a tenantable and habitable condition pursuant to paragraph 23 of the statement of claim.
(ii) The sum of N10,000,000.00 (Ten Million Naira) per annum from 5th September 2010, with a 20% per annum increase thereof until when the property is reinstated to a tenantable and habitable condition.
(iii) The sum of N200,000,000.00 (Two Hundred Million Naira) on the footing of aggravated and/or exemplary damages pursuant to paragraphs 18, 20, 21 and 22 of the statement of claim.
(iv) The sum of N5,000,000.00 (Five Million Naira) for used and occupation of the property from 1st March 2010 to 5th September 2010 pursuant to paragraphs 12 and 13 of the statement of claim.
(v) The sum of N50,000,000.00 (Fifty Million Naira) for breach of covenants in the lease dated 15th December, 2004 pursuant to paragraphs 6, 7, 8, 9, 10, 15 and 20 of the statement of claim.
(vi) The sum of N10,000,000.00 (Ten Million Naira) estimated cost of this action pursuant to paragraph 19 of the statement of claim.
(vii) Interest on the above sums at the rate of 28% per annum compounded and chargeable from the date of filing this action until judgment and 10% thereafter until full payment.
(viii) An order of perpetual injunction against the defendants, their officers, agents or otherwise howsoever from doing any other thing following or continuing to:-
(a) destroy the three-bedroom bungalow together with all appurtenances situate and known as 30 Oladipo Bateye Street, G.R.A. Ikeja, Lagos and the structures thereon.
(b) enter into, remain on, or trespassing thereon in anyway whatsoever.”
The appellants denied the claims and the matter went to trial after which the trial Court in a judgment delivered on 19th December, 2015, granted all the aforenamed claims against the appellants.
Aggrieved by that judgment, the appellants approached the Court of Appeal, Lagos Division (lower Court), for a review of same on two grounds of dissatisfaction contained on the notice of appeal dated and filed on the 22nd December, 2015.
The lower Court in the judgment delivered on the 5th July, 2017, allowed the appeal in substantial part in the following terms:-
“In the final analysis the appeal succeeds in part and it is hereby allowed. The award of NGN474,000,000.00 (Four Hundred and Seventy Four Million Naira) damages by the trial Court has no legal basis and same is hereby set aside. In its place, the respondent is awarded the sum of NGN10,358,310.00 (Ten Million, Three Hundred and Fifty-Eight Thousand, Three Hundred and Ten Naira) plus NGN3,083,330.00 (Three Million, Eighty-Three Thousand, Three Hundred and Thirty Naira) against the appellants being the cost of reinstating the leased premises to its original state as well as the 6 months’ rent for staying back which bring it to a total of NGN13,441,600.00 (Thirteen Million, Four Hundred and Forty-One Thousand and Six Hundred Naira) with 10% post-judgment interest. Parties to bear their respective costs.”
Once more, not satisfied with the above decision of the lower Court, the appellants brought this further appeal vide the notice of appeal dated and filed on 25th July, 2017 containing three grounds.
In the appellants’ brief filed on the 8th December, 2017, an issue was formulated from each of the grounds as follows:-
“2.01 Whether the lower Court correctly evaluated the facts contained in the writ of summons, statement of claim and statement of defence filed in the suit and the evidence of the parties for it to hold that the 2nd appellant is a necessary party to this suit?
2.02 Whether the lower Court correctly applied the principles of law relating to pleadings when it relied on exhibit A – a valuation report which was not pleaded in the statement of claim and filed in the reply to the statement of defence as the costs of reinstating the damaged property and at a time the defendants/appellants were not able to provide a response to the same by the rules of pleadings, to ground the award in the appeal?
2.03 Whether the evidence adduced by the claimant/ respondent justifies the grant by the lower Court of the total sum of N10,358,310.00 (Ten Million Three Hundred and Fifty-Eight Thousand, Three Hundred and Ten Naira only) and NGN3,083,333.00 (Three Million and Eight-Three Thousand, Three Hundred and Thirty-Three Naira) as claims maintained by the respondent in the suit?
For the respondent, a notice of preliminary objection (NPO) and the respondent’s brief were filed on the 31st July, 2018.
Two issues are said to arise for determination on the merit of the appeal, thus:-
“(a) Whether the 2nd appellant was rightly adjudged as a necessary party by the lower Courts without whom the suit could have not been successfully determined.
(b) Whether the valuation report that was pleaded by the respondent in his reply to the defendant’s statement of defence was properly pleaded and considered by the trial Court.”
In line with established practice, I would consider the preliminary objection first as it seeks to terminate the life of the appeal at its stage. The objection prays for an order dismissing the appeal for want of jurisdiction on the part of the Court to entertain it on the following grounds, as set out on the notice of preliminary objection:-
“1. The grounds of appeal as couched on the notice of appeal filed on the 25th day of July, 2017 initiating this appeal bothers on issues of mixed law and facts and the appellant failed to seek leave of Court before commencing the appeal.
- The appeal offends the provisions of Section 233(3) of the 1999 Constitution of the Federal Republic of Nigeria which requires the leave of this honourable Court or the lower Court before appeals of this nature can be commenced.
- That the grounds of appeal are incompetent for the following reasons:-
The signatures on the notice and ground of appeal (Court processes) are undecipherable as to whom of the two solicitors, to wit:
Sivbone Edu Esq. or Mobolade Sanni Esq. signed the document; see Alex and Dr. A. M. Ibeanu (Infra).”
The learned counsel for the respondent moved the objection at the oral hearing of the appeal and referred to the arguments thereon at pages 5-14 of the respondent’s brief.
The arguments are to the effect that all the grounds on the notice of appeal complain about or are against the exercise of the lower Court’s discretion and concurrent findings of the two lower Courts. That the grounds are of mixed law and facts which require prior leave of Court to be competent and for the Court to have the jurisdiction to entertain the appeal.
Section 233(3) of the Constitution (as amended) as well as National Employer Mutual Gen. Ltd. v. Uchay (1973) 4 SC 1 and Faith Ent. Ltd. v. B.A.S.F. (Nig.) Ltd. (2010) 1 MJSC (Pt. 1) (no page provided) reported as B.A.S.F. (Nig.) Ltd v. Faith Ent. Ltd. (2010) 4 NWLR (Pt. 1183) 104 are cited and all the grounds of appeal were set out in support of the contention that they are of mixed law and facts.
In addition, Metal Contr. (W.A.) Ltd. v. Migliore (1990) 1 NWLR (Pt. 126) 299 on the law that a ground of appeal challenging the exercise of a lower Court’s discretion is one of the fact and at best of mixed law and facts and Thor Ltd. v. F.C.M.B. Ltd. (2002) 4 NWLR (Pt. 757) 427 are referred to, among other cases, and the Court is urged to uphold the objection.
In the appellants’ reply brief filed on the 26th February, 2018, it is submitted, after reference to Section 233(2) of the Constitution (as amended), the case of Okorocha v. P.D.P. (2014) LPELR-22058 (SC); (2014) 7 NWLR (Pt. 1406) 213 on the interpretation of the provisions and Anukam v. Anukam (2008) LPELR-500 (SC); (2008) 5 NWLR (Pt. 1081) 455 on the distinction between a ground of law alone and of mixed law and facts, that the appellants are not challenging the concurrent findings of the two lower Courts, but the application of principles of law on pleadings and award of damages on settled facts of the case.
Alternatively, relying on Bassil v. Fajebe (2001) 11 NWLR (Pt. 725) 592, it is submitted that the Court can interfere with concurrent findings of the two lower Courts where they are found to be perverse.
Learned counsel maintains that the grounds of appeal are of law alone and so do not require leave of Court for the appeal to be brought or for it to be competent. He also says the notice of appeal was duly signed by Sivbone Edu, Esq. who affixed his NBA seal and stamp thereon and urged the Court to dismiss the objection of lacking in merit.
Resolution:
Now, the law on when an appeal from the decision of the lower Court to this Court requires prior leave of Court as a condition precedent for its validity and competence as prescribed under the provisions of Section 233(3) of the Constitution (as amended) and when such an appeal does not require or need leave of Court in situations set out in the provisions of Section 233(2), is firmly settled and trite. Briefly, an appeal in which the grounds raise or involve questions of law alone, is one as of right and so does not need or require prior leave of Court to be brought or filed by virtue of the provisions in Section 233(2). An appeal in which the grounds do not fall or are not within the situations enumerated in the provisions of Section 233(2), is an appeal which, by the operation of Section 233(3) mandatorily needs or requires prior leave of Court, as a condition precedent, for it to be validly brought or filed and for it to be competent so as to vest the requisite jurisdiction on the Court to adjudicate over it. See Faith Ent. Ltd. v. B.A.S.F. Nig. Ltd. (supra) also, reported in (2010) 4 NWLR (Pt. 1183) 104, Maigoro v. Garba (1999) 7 SCNJ 270 at 279; (1999) 10 NWLR (Pt. 624) 555; Yaro v. Arewa Constr. Co. Ltd. (2007) 17 NWLR (Pt. 1063) 333; Opuiyo v. Omoniwari (2007) 16 NWLR (Pt. 1060) 415; Ogbolosingha v. B.S.I.E.C. (2015) 6 NWLR (Pt. 1455) 311.
On the determinants of when a ground of appeal can be said to be one of law alone or of mixed law and facts, guidelines have been set down by this Court in many decisions for easy identification even though the line of distinction between the two is admittedly, thin. For instance in Ogbechie v. Onochie (1986) NSCC 443; (1986) 2 NWLR (Pt. 23) 484, it was stated that:
“There is no doubt that it is always difficult to distinguish a ground of law from a ground of fact but what is required is to examine thoroughly the grounds of appeal in the case concerned to see whether the ground reveals a misunderstanding by the lower Tribunal of the law, or misapplication of the law to the facts already proved or admitted, in which case it would be question of law. Where however the grounds are such that would question the evaluation of facts by the lower Tribunal before the application of the law that would amount to question of mixed law and fact. The issue of pure fact is easier to determine.”
More guidelines were stated and re-stated in later cases including Nwadike v. Ibekwe (1987) 4 NWLR (Pt. 67) 718, Anoghalu v. Oraelosi (1999) 13 NWLR (Pt. 634) 297; F.B.N. Plc v. Abraham (2008) 36 NSCQR 1058; (2008) 18 NWLR (Pt. 1118) 172; Anukam v. Anukam (2009) 12 SC 32; (2008) 5 NWLR (Pt. 1081) 455; F.B.N. Plc v. T.S.A. Ind. Ltd. (2010) 4-7 SC (pt. 1) 228; (2010) 15 NWLR (Pt. 1216) 247, on how to identify and distinguish between a ground of law alone and one of mixed law and facts for the purpose of the requirement of leave to appeal.
In this appeal, the three grounds contained on the notice of appeal, without the particulars, are as follows:-
“Ground One
The lower Court erred in law when it held that the 2nd appellant (being the Managing Director of the 1st appellant and without more) is a necessary party to a contract between the 1st appellant and the respondent.
Ground Two
The lower Court misdirected itself in law when it relied on exhibit A – a valuation report which was not pleaded in the statement of claim and filed in the reply to the statement of defence and a time the defendants were not able to provide a response to the same by the rules of pleadings.
Ground Three
The judgment is against the weight of evidence.”
Apparently, the question raised in ground one is on the application of the principle of law on who a necessary party is in an action to the admitted fact that the 2nd appellant is the Managing Director of the 1st appellant.
The ground is therefore one of law alone which requires no prior leave of Court to be brought or filed. See Calabar Co-Op. Ltd. v. Ekpo (2008) 1-2 SC 229 at 273 – 5; reported as C.C.C.T.C.S. v. Ekpo (2008) 6 NWLR (Pt. 1083) 362; Faith Ent. Ltd. v. B.A.S.F. Nig. Ltd. (supra), also reported in (2010) All FWLR (Pt. 518) 840 at 862; (2010) 4 NWLR (Pt. 1183) 104.
Ground 2 on its part, challenges the admissibility of the valuation report in question, as evidence and alleged reliance there on by the lower Court. The issue or question raised in the ground is one of law alone. See Olarenwaju v. Ogunleye (1997) 1 KLR (Pt. 47) 225 at 232; (1997) 2 NWLR (Pt. 485) 12 Okorocha v. PDP (supra). It requires no leave of the Court.
For ground 3, as an omnibus ground, it is one which involves question of facts. See C.S.C. Bookshops Ltd. v. R.T.M.C.R.S. (2006) 11 NWLR (Pt. 992) 530 at 557; F.M.H. v. C.S.A. Ltd. (2009) 9 NWLR (Pt. 1145) 193; Akinlagun v. Oshoboja (2006) 5 SC (Pt. II) 100; (2006) 12 NWLR (Pt. 993) 60. The ground is one which mandatorily requires the prior leave of Court to be competent.
In the result, the objection succeeds only in respect of the omnibus ground 3 on the notice of appeal and is upheld in respect of the ground which is liable to be struck out.
The objection fails in respect of grounds 1 and 2 of the notice of appeal, and it is dismissed.
Since the ground 3 of the notice of appeal is found to be incompetent for want of the requisite prior leave of Court, the issue 3 raised and argued in the appellants’ brief, are contiguously infected by the incompetence and so liable to be discountenanced. See John Holt Ventures Ltd. v. Oputa (1996) 9 NWLR (Pt. 407) 101; Ononiwu v. R.C.C. Ltd. (1995) 7 NWLR (Pt. 406) 214; U.B.A. Plc v. Akparabong Comm. Bank (Nig.) Ltd. (2006) All FWLR (Pt. 320) 1099 at 1121.
I now go to consider the arguments of learned counsel on the two surviving issues raised in the appellants’ brief which are derivable from the grounds 1 and 2 of the notice of appeal.
Issue 1:
Appellants’ Submissions:
Citing Mogaji v. Mogaji (1986) LPELR-1891(SC), reported as Re: Mogaji (1986) 1 NWLR (Pt. 19) 759; Mbanefo v. Molokwu (2014) LPELR-22257(SC); (2014) 6 NWLR (Pt. 1403) 377 and Green v. Green (1987) 3 NWLR (Pt. 61) 480, on who a necessary party is in an action, it is submitted that the respondent’s S/claim and evidence placed before the trial Court did not show that the 2nd appellant had any personal interest or acted at any time in a personal capacity or is likely to be personally affected by the result of the action. According to learned counsel, there is no privacy of contract between the respondent and the 2nd appellant, who is an employee of the 1st appellant, and acted at all times, in his official capacity as the Managing Director (MD) and agent of the 1st appellant.
He argued that if the 2nd appellant was not made a party to the suit, there is no way it will affect its effectual and complete adjudication. Salomon v. Salomon (1987) AC 22 at 51 and Marina Nominees Ltd. v. Federal Board of Inland Revenue (1986) 2 NWLR (Pt. 20) 48 at 61 are cited on the law that an incorporated company is independent and a legal personality distinct and separate from the people who formed or incorporated it. It is further submitted that the law is settled that an employee acting in an official capacity in his employment as an agent of the employer, a known principle, incurs no liability, as expressed in Latin; “qulfacir peralum facit perse a sam facere unide pur” on the authority of Faith Ent. Ltd. v. B.A.S.F. (Nig.) Ltd. (2001) 8 NWLR (Pt. 714) 242 at 244.
The Court is urged to resolve the issue in favour of the 2nd appellant.
Respondent’s Submissions:
The arguments on the issue are to the effect that the appellants seek thereunder to challenge the concurrent findings of the two (2) lower Courts that the 2nd appellant is a necessary party in the action which can only be interfered with where the findings are shown to be perverse, resulted from violation of some principle of law and procedure or occasioned a miscarriage of justice, as stated in Enang v. Adu (1981) 11-12 SC 25. It is contended that the appellants have failed to show the exact portion of the findings by the lower Courts that is perverse or has occasioned miscarriage of justice for the Court to interfere with them and reliance is placed on Buhari v. Yusuf (2003) 14 NWLR (Pt. 841) 446 at 508. Learned counsel says that at the trial, 2nd appellant had explained, under cross-examination, that he played an integral part in the negotiation of the contract in question, from the beginning to the end and even signed/executed it. In addition, he submits that under the provision of Order 13 Rule 6(1) of the trial Court’s Rules, 2002, it was not a requirement for a claimant to have a specific claim against all the defendants in the suit and that once a prima facie case is made against defendant, he would be adjudged a necessary party. The Court is urged to hold that the 2nd appellant is a necessary party.
The submissions contained in the appellants’ reply brief on the issue are mere repetition and further arguments contained in the appellant’s brief and not answers to fresh or new points arising from the respondent’s brief.
Resolution:
The learned counsels are right that the law on who is a necessary party in a legal action before a Court of law, is firmly settled by judicial authorities of this Court. Simply put, a necessary party to a suit is one who is not only interested in the subject matter of the proceedings, but in whose absence the suit could not be fairly, completely and effectually adjudicated upon and all material issues finally settled therein by the Court. In Anabaronye v. Nwakaihe (1997) 1 NWLR (Pt. 482) 374; Adio, JSC, described a necessary party to an action concisely thus:-
“A necessary party to a case is a person whose presence is necessary for the effectual and complete adjudication of the questions involved in the cause or matter.”
See also Awoniyi v. The Reg. Trustees, AMORC, Nigeria (2000) 10 NWLR (Pt. 676) 522; (2000) 6 SC (Pt. 1) 103; B.O.N. Ltd. v. Saleh (1999) 9 NWLR (pt. 618) 331; Uku v. Okumagba (1974) 3 SC 35; Ojo v. Ogbe (2007) 9 NWLR (Pt. 1040) 542; E.F.P. Co. Ltd. v. N.D.I.C. (2007) 9 NWLR (Pt. 1039) 216; Osun State Govt. v. Danlami Nig. Ltd. (2003) 7 NWLR (Pt. 818) 72; Green v. Green (supra).
In addition, in law, the main or primary reason for making a person a party to legal proceedings of a Court of law is so that he should at the end, be bound by the result, orders, decision or judgment of the Court in the action. See Olawoye v. Jimoh (2013) LPELR-20344(SC); (2013) 13 NWLR (Pt. 1371) 362; Azubuike v. P.D.P. (2014) LPELR-22258(SC); (2014) 7 NWLR (Pt. 1406) 292; In Re: N.D.I.C. (2007) 7 NWLR (Pt. 1032) 54.
In this appeal, I have observed that even though the issue of whether 2nd appellant was necessary in the action before the trial Court was raised as issue 15 in the final address, by the learned counsel for the appellants filed on the 8th March, 2014, the trial Court did not pronounce or decide on it, in its judgment. I have also noted that the appellants’ notice of appeal against the decision/judgment of the trial Court, dated and filed 22nd December, 2015 did not contain a ground of appeal on either failure by the trial Court to make a pronouncement on the issue or a complaint that the 2nd appellant was not a necessary party to the action. The notice of appeal appears at pages 500-503 of vol. 1 of the record of appeal and contains two grounds of appeal, which without the particulars, are as follows:-
“Ground One
The learned trial Judge erred in law and on the facts in deciding that the claimant proved his case by a preponderance of evidence as required by the rules of this honourable Court and was entitled to the heads of claims listed in the statement of claim, when the claimant did not prove before the Court either of special damages of aggravated and/or exemplary damages under the heads of claim and the valuation report on the damage/destruction of the property – exhibit A (not forming part of the claim but produced in claimant’s reply to the statement of defence), showed only the sum of NGN10,358,310.00 (Ten Million, Three Hundred and Fifty-Eight Thousand, Three Hundred and Ten Naira only).
Ground Two
The judgment is against the weight of evidence.”
In the appellants’ brief filed on 6th May, 2015 before the lower Court by the appellants’ counsel, the two issues distilled from the above grounds of appeal and submitted to that Court for determination, were in the following terms:-
“2.01 Whether the learned trial Judge correctly evaluated the fact and evidence and considered the principles of laws guiding the award of special damages, aggravated and/or exemplary damages in a case of breach of contract or agreement when it awarded to the respondent (claimant at the lower Court) the total sum of NGN475,000,000.00 (Four Hundred and Seventy-Five Million Naira) under the heads of claim including damages for breach of covenants and pre and post-judgment interest, without proof of same and against the established principles laid down by superior Courts of record? (Distilled front ground one of the notice of appeal)
2.02 Whether the evidence adduced by the claimant justifies the grant of the total sum of NGN475,000,000.00 (Four Hundred and Seventy-Five Million Naira) as claims/claimed and if the evidence at trial established a case against the 2nd appellant? (Distilled from ground two of the notice of appeal)”
Apparently, the question whether or not the 2nd appellant was a necessary party to the action before the trial Court, was not raised or submitted to the lower Court for decision by the appellants in the appeal against the decision/judgment of the trial Court.
However, at paragraphs 10.18 on page 30 to paragraph 10.26 on page 30(i) of the appellant’s brief (which appear at pages 679-680 of vol. II of the record of appeal), the learned counsel surreptitiously introduced and argued that the 2nd appellant was not a necessary party to the action.
It should be noted that the issue 2 submitted to the lower Court in the appellants’ brief that the respondent did not make a case against the 2nd appellant at the trial Court is not the same as challenging the capacity, status of standing of the 2nd appellant as a party to the action.
In the absence of ground of an appeal complaining about or against the failure by the trial Court to pronounce or decide the issue of whether the 2nd appellant was a necessary party to the action or a ground of appeal which directly raised the issue before the lower Court, that Court lacks the jurisdiction to go outside the grounds of appeal and issues properly raised and placed before it for determination in the appeal. The lower Court cannot properly base its decision, finding or pronouncement on issues merely raised in arguments of counsel for the parties to an appeal but which are not traceable and derivable from the grounds of the appeal. See Osinupebi v. Saibu (1982) 7 SC 104; Okeke v. Oruh (1999) 6 NWLR (Pt. 606) 175; A.C.B. Plc v. Emedo (2003) 10 NWLR (Pt. 828) 244; Oje v. Babalola (1991) 5 SCNJ 110; (1991) 4 NWLR (Pt. 185) 267; R.E.A.N. Plc v. Anumnu (2003) 6 NWLR (Pt. 815) 52; Longe v. F.B.N. Plc (2010) 6 NWLR (Pt. 189) 1. The issue of whether the 2nd appellant was a necessary party to the action before the trial Court did not arise from any of the two grounds contained in the appellants’ notice of appeal in the lower Court and so was an incompetent issue over which that Court could not validly adjudicate and so liable to be struck out in this appeal.
The decision by the lower Court on the issue, at page 770 of vol. I of the record of appeal, was that:-
“Learned counsel also contended that the 2nd appellant was not a necessary party in the suit leading to this appeal. There is no gainsaying that the 2nd appellant being the Managing Director, is undoubtedly the engine room of the 1st appellant. He was the ubiquitous player who played a pivotal role in execution of the agreement in the case leading to this appeal. At page 445 of the record of this appeal, he admitted being the person who entered into the said agreement and that he signed it. He is by no means, a necessary party. A necessary party is that who is not only interested in that subject matter of the proceedings but also who in his absence, the proceedings could not be fairly dealt with. See Green v. Green (1987) 3 NWLR (Pt. 6) 480 and O. K. Contract Point v. Progress Bank (1999) 5 NWLR (Pt. 604) 631 at 634.”
There is no dispute that the 2nd appellant is the Managing Director and Chief Executive Officer of the 1st appellant, who directs and runs its affairs and business, as a company, and so its alter ego, directing mind and will under the law. In the case of Longe v. FBN Plc (supra), this Court per Oguntade, JSC, stated the position that-
“The truth of course, is that under any definition, a Managing Director is the directing mind and will and the alter ego of the company through which the company acts.”
See also Ramanchadam v. Ekpeyong (1975) 5 SC 29; Trenco Ltd. v. African Real Estate Ltd. (1978) 4 SC 9; Delta Steel Nig. Ltd. v. A.C.T. Incorp. (1999) 4 NWLR (Pt. 597) 53; Marine Management Assoc. Inc v. National Maritime Authority (2013) All FWLR (Pt. 678) 790; (2012) LPELR-20618 (SC); (2012) 18 NWLR (Pt. 1333) 506.
Ordinarily, the 1st appellant as an incorporated or registered company is a separate or distinct legal entity and personality with the requisite legal capacity to sue and be sued in legal actions from the 2nd appellant. See Yesufu v. Kupper Int. N.V. (1996) 5 NWLR (Pt. 446) 17; A.I.B. Ltd. v. Lee and Tee Ind. Ltd. (2003) 7 NWLR (Pt. 819) 366 at 395; Okolo v. U.B.N. Plc (2004) 3 NWLR (Pt. 859) 87. The law is also known that a company being an artificial person and a legal and juristic entity, can only act through natural persons such as its alter ego, officers, servants or agents. Kate Ent. Ltd. v. Daewoo Nig. Ltd. (1985) 2 NWLR (Pt. 5) 116; Standard Trust Bank Ltd. v. Interdrill (Nig.) Ltd. (2006) LPELR-9848; Leventis Tech. Ltd. v. Petrojessica Ent. Ltd. (1992) 2 NWLR (Pt. 224) 459; Saleh v. B.O.N. Ltd. (2006) 6 NWLR (Pt. 976) 316; Ishola v. S.G.B. Nig. Ltd. (1997) 2 NWLR (Pt. 488) 405.
In Yesufu v. Kupper Int. N.V. (supra) it was held by this Court, per Kutigi, JSC, (as he then was) that:
“Where a Director enters into a contract in the name of or purporting to bind the company, it is the company – the principal – which is liable on it, not the Director. The Director is not personally liable unless it appears that he undertook personal liability.”
Then in N.N.S.C. v. Alhaji Hamajoda Sabana Co. Ltd. (1988) 3 SCNJ (Pt. 130; (1988) 2 NWLR (Pt. 74) 23, Nnaemeka-Agu, JSC, stated that:-
“A company, it has been said, is an abstraction. It therefore acts through living persons. But it is not the act of every servant of the company that binds the company. Those whose acts bind the company are their alter ego – those persons who because of their positions are the directing mind and will of the company, the very ego and corporate personality of the company. See Lennards Carrying Co. Ltd v. Asiatic Retroleunt Co. Ltd. (1915) AC 7055 Per Viscount Hablane at page 713.”
In the above premises of the law, a contract entered into by the Director or Managing Director of a company in name of the company and acting in his official capacity for the company, incurs no personal liability under the contract, unless, of course, there is evidence that he undertook personal liability in making the contract.
In the appellants’ case, the agreement/contract, by way of a sub-lease dated 15th December, 2004 (which appears at pages 48-51 of vol. 1 of the record of appeal) was entered into between the respondent, as the sub-leasor, and the 2nd appellant its Managing Director who signed as “director” and the secretary of the 1st appellant.
There is no term or condition of the sub-lease which shows or even suggests that the 2nd appellant pledged or undertook personal liability in the agreement in order for personal liability to attach to him.
The 2nd appellant and the secretary of the 1st appellant who represented the 1st appellant acted in their official capacities as director and secretary respectively, for and on behalf of the 1st appellant as officers or agents authorized to carry out or conduct its affairs in the discharge of their ordinary duties. The agreement/contract was made and entered into in the name of and for the 1st appellant by the 2nd appellant and secretary and so it was a contract entered into or made by the 1st appellant; a disclosed principal, who is primarily bound by the terms and conditions set out therein. It is the 1st appellant who derived rights and was under the obligations and liabilities agreed to by the parties to the sub-lease and not the representatives or agents through whom it acted. See Trenco Nig. Ltd. v. African Real Estate & Inv. Co. Ltd. (supra) also reported in (1978) All NLR 124; S.T.B. Ltd. v. Interdrill Nig. Ltd. (supra); Ramanchadam v. Ekpenyong (supra).
If for the above reasons, the 2nd appellant is not liable or does not incur liability under the sub-lease agreement/contract entered into between the respondent and the 1st appellant, can he then be said to be a necessary party to the action before the trial Court on the basis of the breach of the terms, conditions and covenants agreed to in the sub-lease between the parties thereto?
It may be remembered that a necessary party to an action is a party in whose absence, the material issues in the case cannot fairly, completely, effectually and finally be decided by the Court. Without any difficulty, it is clear that although the 2nd appellant may be interested in the subject matter of the action against the 1st appellant due to his position as the directing mind and will, all the material issues or questions involved in the action can be effectually, completely and finally decided by the trial Court, fairly, in his absence. He cannot therefore rightly be described as or held to be a necessary party to the action merely because he represented the 1st appellant in transaction that eventually led to and participated in signing of the sub-lease agreement in question, for and on behalf of the 1st appellant; as one of its agents. The finding by the lower Court that the 2nd appellant was/is a necessary party to the action before the trial Court is erroneous in law and liable to be set aside.
The issue is resolved in favour of the appellants.
Issue 2
Appellants’ Submissions:
The pith of the arguments on the issue is that the valuation report alluded to in paragraph 19 of the respondent’s statement of claim was filed by the respondent when the appellants had no right of response under the rules of pleadings and evidence, having been filed in the respondent’s amended reply to the appellants’ amended statement of defence. Also, that the valuation report (exhibit A), has no nexus with the amount claimed as costs of rebuilding the structures destroyed and that the respondent did not claim the sum awarded by the lower Court as costs of reinstating the damaged property and there was no evidence to support the award. The case of Achike v. Osakwe (2000) 2 NWLR (Pt. 646) 630, a decision of the lower Court. Olubodun v. Lawal (2008) 17 NWLR (Pt. 1115) 1 at 20; Ughutevbe v. Shonowo (2004) 16 NWLR (Pt. 899) 300 and Amoo v. Aderibigbe (1994) 2 NWLR (Pt. 324) 92, are cited on the statement that a reply cannot be used to raise a new cause of action or issue not contained in the statement of claim.Spasco Vehicle & Plant Hire Co. Ltd. v. Alraine (Nig.) Ltd. (1995) 8 NWLR (Pt. 416) 655 at 670 on when a reply is necessary in an action is also referred to and the Court is prayed to resolve the issue in appellants’ favour.
Respondent’s Submission:
The fulcrum of the submissions is that by rules of pleadings and the provisions of Orders 3 Rule 2 and 15 of the Rules of the trial Court, the reply filed by the respondent formed part of the pleadings of the parties in the case and the valuation report in question was properly pleaded to make it admissible as evidence in the trial. Amaechi v. INEC (No. 3) (2007) 18 NWLR 18 NWLR (Pt. 1065) 79, on the contents of pleadings and Bassil v. Fajebe (2001) 11 NWLR (Pt. 725) 592 on the law that parties are bound by their pleadings are cited and the Court is urged to hold that the valuation report admitted as exhibit A in evidence was pleaded and properly admitted by the lower Court.
The arguments in the appellants’ reply brief on the issue are not answers to any fresh or new point/s raised or arising from the respondent’s brief, but rather made in the appellants’ brief.
Resolution:
From the arguments of the learned counsel for the appellants, the real complaint under the issue is that the respondent’s reply to the amended statement of defence raised or introduced a new or fresh claim, different from the ones in the statement of claim, on the ground only, that exhibit ‘A’ was annexed thereto. Exhibit ‘A’, which appears at pages 184-191 of vol. 1 of the record of appeal, is titled:
“Survey Report on Damages and Remedial Works on the Property at No. 30 Oladipo Bateye Street, GRA, Ikeja Belonging to Dr. Charles Oladeinde Williams”
was referred to and pleaded in paragraph 1(j) of the respondent’s reply to the appellants’ amended statement of defence dated and filed on the 6th March, 2012, as one of the documents to be relied on by him, at the trial of the action. In brief, exhibit ‘A’ provides details of the professional assessment and estimated costs of restoration of the property, the subject of the report, “to a tenantable state” as at the date thereof. As can be seen, the appellants’ argument is that, by exhibit ‘A’, the respondent had introduced a new cause of action, claim or issue outside and different from the claims pleaded in the statement of claim, which is not permitted, by the authority of Olubodun v. Lawal (supra) among other cases. However, as expressly admitted by the counsel at paragraph 4.02 on page 9 of the appellants’ brief, the averment/pleadings at paragraph 19(a) of the respondent’s statement of claim are thus:-
“4.02 It is contained in paragraph 19 of the respondent’s statement of claim dated the 2nd December, 2010, the following:-
Paragraph 19:
“By reason of tire matters set out in paragraphs 15, 16, 17 and 18 above, the claimant has been greatly discommoded and inconvenienced and has suffered loss and damage(s).
Particulars:
(a) Cost of rebuilding the destroyed structures on the property and reinstatement of the property to the original design and structure in 2004, when it was leased to the defendant is in the sum of NGN200,000,000.00 (Two Hundred Million Naira) as witness relevant reports from experts.”
The fact in the above pleading is that the costs of rebuilding and reinstatement of the destroyed property to the state it was in when it was leased out to the appellants was N200,000,000.00 (Two Hundred Million Naira) as shown by the reports from experts.
The respondent had therefore claimed in the statement of claim, the costs for the restoration and reinstatement of the property in question, on the basis of reports from experts. The reports from experts on the actual costs of the restoration and reinstatement of the property was the evidence to be relied on in proof of the claim for the sum of N200,000,000.00 (Two Hundred Million Naira) by the respondent. The law on pleadings is that it is only facts and not the evidence by which such facts are to be proved, that are to be pleaded, deposed to or averted in pleadings. Order 15 Rule 2 of the Rules of the trial Court, 2012 provides that
“Every pleading shall contain a statement summary form of the material facts on which the party pleading relies for his claims or defence, as the case may be, but not the evidence by which they are to be proved and shall, …” (Italics provided)
See also Nwadiaro v. S.P.D.C.N. Ltd. (1990) 5 NWLR (Pt. 150) at 333 – 4; Auto Import Export v. Adebayo (2005) 19 NWLR (Pt. 959) 44; Abubakar v. Joseph (2008) 13 NWLR (Pt. 104) 307; Olubodun v. Lawal (supra), also reported in (2008) 6-7 SC (Pt. 1) 1; (2008) 17 NWLR (Pt. 1115) 1; Amaechi v. INEC (2008) 5 NWLR (Pt. 1080) 227; (2008) 33 NSCQR (Pt. 1) 332. In addition, the law is now trite that documents do not need to be specifically pleaded before they can be admissible or admitted in evidence so long as the relevant facts which the document seek to establish are set out clearly in the pleadings. See M.C.C. v, Azubuike (1990) 3 NWLR (Pt. 136) 74; Amadi v. Olumati (1995) 7 NWLR (Pt. 410) 739 at 752; Susano Pharm. Co. Ltd. v. Sol Pharm. Ltd. (2000) FWLR (Pt. 10) 1595 at 1601 – 2; (2000) 4 NWLR (Pt. 651) 60; F.B.N. Plc v. Tsokwa (2004) 5 NWLR (Pt. 866) 271; Ojoh v. Kamalu (2005) 18 NWLR (Pt. 958) 523 at 555 – 6; Zenon Pet. & Gas Ltd. v. Idrisiyya Nig. Ltd. (2006) All FWLR (Pt. 312) 2121; (2006) 8 NWLR (Pt. 982) 221.
As can be seen easily in the pleadings in paragraph 19 of the respondent’s statement of claim, he did not only plead the material facts which show the existence of exhibit’ A’, but specifically stated that he was going to rely on same. In addition, in paragraph 1(j) of the reply to the amended statement of defence, the respondent specifically pleaded the said exhibit ‘A’ as one of the documents to be relied on in proof of the claim made. In the circumstance, it is gross misconception by learned counsel for the appellants to say and insist that pleading, production and admission of exhibit ‘A’ in evidence was setting up, raising or making a completely new or fresh claim by the respondent outside the claim. Exhibit ‘A’ was not a new pleading, but one which goes to the proof of the claims made for the costs of the restoration and reinstatement of the respondent’s property in question in the statement of claim which the appellants had the opportunity to and indeed, reacted to in their amended statement of defence. The rules of the trial Court and judicial authorities all recognize and permit the right of a plaintiff/claimant to file a reply to statement of defence in order to answer to new or fresh points raised and canvassed by a defendant therein. See Order 15 Rule 1 of the trial Court’s Rules as well as Ishola v. S.G.B. Nig. Ltd. (1997) LPELR-1547 (SC); (1997) 2 NWLR (Pt. 488) 405; Akeredolu v. Akinremi (1989) 3 NWLR (Pt. 108) 164 at 172, Oshodi v. Eyifunmi (2000) 7 SC (Pt. II) 145, (2000) 13 NWLR (Pt. 684) 298.
Exhibit ‘A’ was in law rightly pleaded by the respondent, properly admitted in evidence and made use of or relied on by the lower Court in the assessment of the claims of restoration and reinstatement of the property in question, as proved by the credible evidence adduced in support thereof at the trial Court.
Learned counsel for the appellants has argued that the sum awarded by the lower Court as the costs for the repairs or restoration of the property was not claimed by the respondent either on the writ or statement of claim and so, accordingly to him, it was against the weight of evidence. However, a party may make claims in his pleadings, which the law imposes a burden on him to prove by credible and sufficient evidence if judgment was to be entered for him by the Court. See Sections 131, 132 and 133 of the Evidence Act, 2011; Olusesi v. Oyelusi (1986) 3 NWLR (Pt. 31) 634; Balogun v. Labiran (1988) 3 NWLR (Pt. 80) 66; Jallco Ltd v. Owoniboys Tech. Serv. Ltd. (1995) 4 SCNJ 256, (1994) 4 NWLR (Pt. 391) 534, and the Court has power and authority to enter judgment in his favour in respect of the claim(s) whether in whole or in part, which is satisfactorily proved by such evidence as required by law. Mogaji v. Odofin (1978) 4 SC 91 at 93; Balogun v. U.B.A. Ltd. (1992) 6 NWLR (Pt. 247) 336; Bello v. Aruwa (1999) 8 NWLR (Pt. 615) 454. The law is also known that a Court can award to a party less than what he claims if the evidence adduced by him proves and established the award. See Haston Nig. Ltd. v. A.C.B. Plc (2002) 7 SC (Pt. II) 54; (2002) 12 NWLR (Pt. 782) 623 wherein, Ogundare, JSC, in the lead judgment of this Court stated the position that:-
“Surely, the law is trite that where a plaintiff claims more than he can prove, he is awarded the lesser amount.”
See also Ajayi v. Texaco Nig. Ltd. (1987) 3 NWLR (Pt. 62) 577; Nwachukwu v. Dungba (2009) LPELR-8414 (CA), Makanjuola v. Balogun (1989) 3 NWLR (Pt. 108) 192; Carlen Nig. Ltd. v. University of Jos (1994) 13 NWLR (Pt. 323) 631; Nwankwo v. Nzeribe (2004) 13 NWLR (Pt. 890) 422; Simpton (Nig.) Ltd. v. Pamil Ind. Ltd. (2001) 8 NWLR (Pt. 714) 49.
In the present appeal, since the respondent had claimed the sum N200,000,000.00 (Two Hundred Million Naira) as costs of restoration and reinstatement of the property in question in his statement of claim, but was only able to satisfactorily prove and establish, through exhibit ‘A’, that the actual costs as assessed by the experts engaged by him to do so, the lower Court was on “terra frema” (firm terrain) of the law to have awarded him the lesser amount which was proved by the evidence placed before the trial Court, as the costs of the restoration and instatement even though the sum or amount was less than that and was not specifically claimed by the respondent in his pleadings. The fact that the sum or amount claimed by the respondent in his pleadings is different from the lesser sum or amount awarded by the lower Court does not make the claim and evidence to be in conflict or contradiction. The claim was for costs of restoration and reinstatement and the evidence adduced and the award are both for the same claim, as proved in line with the requirement of the law.
In the result, I do not find merit in the appellants’ arguments under the issue which is resolved against them.
On the whole, the appeal succeeds in respect of the appellants’ issue 1 and it fails in respect of the appellants’ issue 2
Consequently, the appeal is allowed in respect of issue 1 and the finding by the lower Court that the 2nd appellant is a necessary party to the action, is hereby set aside. The appeal fails in respect of the appellants’ issue 2, it is dismissed and the decision by the lower Court on the awards made in favour of the respondent is hereby affirmed.
There shall be costs of Five Hundred Thousand Naira (N500,000.00) awarded in favour of the respondent and to be paid by the appellants.
SC.1014/2017
