Stag Engineering Company Ltd. V. Sabalco Nigeria Ltd & Anor (2008)
LawGlobal-Hub Lead Judgment Report
HON. JUSTICE UWANI MUSA ABBA AJI, J.C.A.
This is an appeal against the decision of the High Court of Kogi State sitting at Lokoja in suit No: HCL/40/94 delivered on the 28th day of July, 2005.
The Respondents as plaintiffs instituted this action against the Appellant as defendant, claiming inter alia as per paragraph 27 of their statement of claim as follows:-
WHEREOF the plaintiffs claim as follows:-
- The sum of N3,000,000.00 being damages for breach of contract to supply brand new 500KVA Perkins/Rolls – Royce Generating Set.
- A declaration that the Defendant breached the agreement reached between the plaintiffs and the Defendant sometimes in September, 1993 to supply brand new Perkins/Rolls Royce Model 500KVA.
- A declaration that the Cummins 550 KVA refurbished generating set supplied by the defendant is at variance with the contract.
Whereof the plaintiffs claims from the Defendant the sum of N3, 000,000.00 as damages for breach of contract and as per 1-3 above.
Pleadings were duly filed and exchanged. The Respondents called two witnesses while the 2nd Respondent testified as PW3. PW1 and PW2 are officers of the Kebbi State Government who inspected and found that the Cummins 550 KVA Generator supplied by the Appellant was a second hand, refurbished and repainted one.
The case of the Appellant was that the Respondents entered into a contract with it for the supply of a new British manufactured diesel generating plant 500 JJA, to be supplied to Kebbi State Government and to be delivered at Wasagu in Birnin Kebbi. The contract price was N2.3 million and the Respondents made a deposit payment of N500,000.00 leaving a balance of N1.8million in respect of which a post dated cheque was issued for the said sum to the Appellant. The balance of N1.8 was expected to be paid after delivery of the generator and payment therefore by the Kebbi state Rural Electrification Board. The Appellant sourced for a brand new British Cummins generator but had problem with capacity specification as the one available in the market which the Appellant could get was 550 KVA as against 500 KVA. That the 2nd Respondent was informed as to the brand and capacity which was available and he agreed that it be supplied so as to beat the deadline as indicated in the Respondent’s contract with the Kebbi State Government. The Appellant purchased the Cummins diesel generating plant 550 KVA from ITT and the way bill that covered the generator on its way to Wasagu, Kebbi State, described the generator as brand new British manufactured industrial diesel generating set 550 KVA capacity Cummins generator. That the generator was duly delivered and received.
That contrary to the contractual terms, the Respondents were paid for the generator but the Respondents refused/failed to pay the outstanding balance of N1.8 million to the Appellant. That the post dated cheque issued to the Appellant by the Respondents was dishonoured on presentation. That the Respondents did not pay the outstanding balance of N1.8million for the generator despite the fact that they were fully paid by Kebbi State Government and they did not also return the generator, rather they instituted the action damages for alleged breach of contract.
The case of the Respondents as stated by PW3 who is its Managing Director, and the 2nd Respondent was that, sometimes in 1993, the Kebbi State Government entered into a contract with the Respondents for the supply of a new 500 KVA Perkins/Rolls Royce generating set. The 2nd Respondent as the Managing Director of the 1st Respondent approached the Appellant Company, an Engineering company dealing in Generators to supply one new Perkins/Roll Royce generator to Kebbi State Government, delivery of which should be made at Wasagu in Birnin Kebbi at a cost of Two million Three hundred thousand Naira (N2.3m). It is the case of the Respondents that instead of delivering a brand new Perkins/Roll Royce bargained for, the Appellant Company supplied a refurbished and repainted 550 KVA Cummins generator at the same rate with the agreed brand new Perkins/Roll Royce generator thereby breaching the contract that was legally binding on the parties.
“At the close of evidence, learned counsel addressed the court. In a considered judgment delivered on the 28th day of July, 2005 the learned trial judge entered judgment for the Respondents and awarded the Respondents N1.8million as general damages for breach of contract.
The Appellant not satisfied with the said judgment, appealed to this court vide a Notice of Appeal dated and filed on the 4th August, 2005 upon the following grounds of Appeal. The grounds of Appeal short of their particulars are hereby restated:-
- The Learned trial judge erred in law when he held that the Appellant breached contract and was liable in damages to the Respondent.
- The learned trial judge erred in law when he based his assessment of damages on wrong principles and extraneous considerations.
- The judgment of the court below is against the weight of evidence.
As is the practice in this court, parties filed and exchanged briefs of argument. In the Appellant’s brief settled by Duro Adeleye, Esq. learned counsel formulated three issues for determination, namely:
- Whether indeed, the Appellant was in breach of contract and therefore liable to general damages.
- Whether the judgment of the court below followed the flow of evidence.
- Assuming but not conceding that there was a breach of contract whether the measure of assessment of general damages by court below was proper in law.
In the Respondents brief settled by Chief U. M. Enwere Esq. learned counsel adopted the three issues for determination as formulated by Mr. Adeleye, for the Appellants.
At the hearing of the appeal on the 26th May, 2008, learned counsel for the appellant adopted and relied on the Appellant’s brief of argument dated 21st April 2008 and filed on the 24th April 2006 and urged the court to allow the appeal. The Respondents also adopted their brief of argument dated 29th November, 2007 but deemed filed on the 4th December 2007 and urged the court to dismiss appeal.
The issues for determination as formulated by the Appellant were adopted by the Respondents. I will also adopt same in the determination of this appeal.
ISSUE ONE – Whether indeed, the Appellant was in breach of contract and therefore liable to general damages.
Arguing this issue, Adeleye Esq., for the Appellants submitted that in order to determine this issue, it is necessary to resolve in the first place the nature of the contract between the parties and what are the terms thereof. It is his view that from the evidence on record there was no formal written contractual agreement between the parties, but that correspondences and documents exchanged by the parties which were placed before the court indicate what the contract was all about. He referred to Exhibits 1, 2, 3, 4, 5, and 6 as the documents in existence before and during the execution of the contract. It is his view that from these exhibits, the following are clear; that the contract was for the supply and delivery of a generating plant at Wasagu, Kebbi State (exhibit 1) and that the generator to be supplied and delivered must be a brand new British manufactured diesel generating plant 500KVA continuous rating basic electric start (Exhibit 5). That a brand new British manufactured diesel generating set of 550 KVA capacity, Cummins was supplied, delivered and was received by the Respondents (Exhibit 6). It is submitted that the 1st Respondent was fully paid for the generator by the Kebbi State Government and that out of total sum of N2.3million between the Appellant and the Respondents, the Respondents paid only N500,000.00 leaving an outstanding balance of N1.8 million referring to the evidence of DW1. It is submitted referring to the evidence of PW3under cross examination that Exhibit 1 which contains the terms of the contract there was no mention of Rolls Royce/Perkins Generator. It is thus submitted that from the evidence of PW3 under cross examination, Exhibits ‘1’ and ‘5’ settles the matter as to whether or not there was any breach of contract. It is submitted that there is no where in either Exhibits ‘1’ or ‘5’ and even Exhibits 2, 3, and 4 where “Perkins Rolls Royce” is mentioned. It is submitted that, if it is that material, it ought to have been specifically stated in the Pro-forma invoice as well as Exhibit ‘1’ the agreement inter parte. It is therefore the view of the learned counsel that there is no factual basis from the evidence of PW3 to the effect that it was Perkins Rolls Royce generator that the Respondents contracted with the Appellant to supply. It is thus contended that what the Appellant supplied was within the description given by the Respondents as it is not in contention that Cummins 550 KVA generator supplied was a British Manufactured diesel generating plant. It is his view that the finding of the learned trial judge that the Exhibits established a legally binding contract between the parties for the supply and delivery to Wasagu in Kebbi State one new 500 KVA Perkins Rolls Royce generating set was wrong in the circumstances. It is submitted that the learned trial judge introduced into the contract between the parties what was not there but which one of the parties wanted for his convenience. On the role of the Court to give effect to the terms of the contract and not to alter it or introduce any new material term to it and thereby make a new contract for the parties, the following cases were relieved upon, Olatunde Vs O.A.U. (1998) 5 NWLR (Pt.549) 178 at 194; O.H.M.B. Vs Apugo and Sons (1991) 1 NWLR (Pt.129) 652. It is submitted that from the documentary evidence before the Court, the model of generating plant to be supplied covered a wider range. That “New British Manufactured Diesel Generator” could be Cummins, Perkins, Rolls Royce and many other types will fall within the description. It is submitted that the evidence of PW1 and PW2 are totally unrelated to the contract between the Appellant and the Respondents. It is further submitted that the evidence of PW1 and PW2 relied upon by the learned trial judge related only to the contract between the Kebbi State Rural Electricity Board and the 1st Respondent and they never gave evidence on the contracts between the Appellant and the Respondents, that whether, their Board specifically agreed with the Respondents for the supply of Perkins/Rolls Royce generator was not an issue submitted for adjudication before the trial court.
It is also submitted by the learned counsel for the Appellant that the heavy reliance to which the learned trial judge placed on Exhibit 7 a letter from the Respondents to the Appellant particularly the attachment which was a report on the generator supplied by the Appellant to the Respondents which was never tendered before the Court as evidence but taken for identification purpose only is no evidence until tendered and admitted as an exhibit. He found support on the cases of Alagbemiro vs. Ajagungbade III (1990) 3NWLR (Pt.136) 37 at 63, Hausa vs. State (1994) 16 NWLR (pt 350 281 at 315, and Gbajor vs. Agunburegui (1961) 1 All NLR 853. It is submitted that the report was not specifically tendered and it could not because it is inadmissible as it was not certified true copy and submitted that the court could only act upon an evidence which is legally admissible citing in support the case of Omega Bank (Nig.) Plc. v. O.B.C Ltd (2005) All FWLR (Pt.249) 1964 at 1990. It is the view of the learned counsel that the report is a public document and the only secondary evidence admissible is a certified true copy and that the learned trial judge was in grave error to have held the Appellant liable for breach of contract relying on the report attached to Exhibit 7 which is not a certified true copy as required by section 97 (1) (e) and 2(c) of the evidence Act. That the purported authors signed the document is not sufficient. Learned counsel urged the court to reverse the findings of the court below which is based on a legally inadmissible evidence. It is also submitted that, the Appellant was never invited to participate in the inspection exercise on the generator which is a breach of the Appellant’s right to fair hearing in the determination of its civil rights and obligations contrary to section 36(1) of the 1999 Constitution of the Federal Republic of Nigeria, 1999. We were urged to resolve this issue in favour of the Appellant and to hold that the Appellant did not breach contract.
In his reply to this issue, learned counsel for the Respondent Chief Enwere, Esq. submitted that the trial court properly reviewed and evaluated the evidence adduced at the trial and found that the Appellant was in breach of the contract to supply brand new Rolls Royce generator to the Respondents. Learned counsel referred to paragraphs 4, 8, and 10 of their statement of claim, the evidence of PW3, particularly at page 120 of the record of appeal and that of DW1 at page 220, lines 8-9 of the records of appeal and submitted that the court reviewed the evidence of these witnesses and arrived at the decision that the agreement between the parties was for the supply of a Brand New Rolls Royce 500KVA. It is the view of learned counsel that the denial of the agreement by DW1 as regards the make of the generating plant to be supplied after having stated in his !etter to the Respondents, Exhibit 4 was a clear indication to cheat. He relied on the case of Onisaodu Vs Elewuju & Anr (2006) 7 SC 11 at 45 and 56 and submitted further that the case of the Appellants’ supports the Respondents contention that the agreement was for the supply of a brand new Rolls-Royce generating plant. It is also submitted that the description in the pro-forma invoice Exhibit 5 is not the same in Exhibit 6 supplied and that there was no lapse of time as alleged in the contract. It is submitted that the way bill was dated 21st/10/93 while the pro-forma invoice was dated 17/9/93 supplied within 8 weeks against the testimony that there was pressure on them. On the findings of the trial court, learned counsel referred to the followings cases; Onisaodu Vs. Elewuju (supra); Ogola Vs Ogola (2006) 2 SC (pt.1) 61; and Okoko Vs Dakolo (2006) 7 SC (pt.111) and urged the court not to disturb the findings of the trial court.
It is also submitted by Chief Enwere that the fact that the 550 KVA Cummins generator was not valued up to N750,000.00 has not been denied in the evidence of DW1 and that the Appellants submission that N2.3 million was the costs of Cummins 550 KVA was unfounded. It is therefore the view of learned counsel that the Appellant breached the agreement between the parties in that the 500 KVA Perkins/Roll Royce requested for was not supplied despite the fact that the Appellant made repeated statements that they are importing the generators from the U.K. (Exhibits 3 and 4). It is submitted that documents are hangers upon which oral evidence are assessed, he concluded that the trial court rightly held that there was a breach of contract as the generator supplied was not as specified and DW1 admitted that it bought the generator in Nigeria at ITT in Lagos contrary to the promise that it will arrive from the U.K. It is also submitted that the price the 550 KVA Cummins was bought was not disclosed or any document showing that it was a brand new generator. Learned counsel relied on the case of Enekwe Vs I.M.B. Ltd (2006)19 NWLR (pt.1013) 180 and submitted that the Appellant should not be allowed to benefit from his own wrong. We were urged not to disturb the findings of the trial court.
I have given a careful consideration to the evidence adduced before the trial court, submissions of learned counsel and authorities cited in support. I have also given due consideration all the exhibits tendered and admitted in evidence before the trial court. The pertinent question to ask is what was the contract between the parties or what were the terms of the contract between the parties? From all available evidence on record, there was no formal written contractual agreement between the parties. However, from correspondences and documents exchanged by the parties placed before the court, indicates what the contract was all about. These documents are Exhibits 1, 2, 3, 4, 5 and 6. These are the documents in existence before and during the execution of the contract. For a better appraisal of the agreement between the parties, Exhibit I which allegedly contain the contractual agreement between the parties and any other agreement that followed as reflected in these Exhibits are hereby reproduced –
Exhibit 1
16th Sept. 1993.
The Managing Director;
Stag Engineering Nigeria Limited
5, Chief Benson Anorue Street,
Apakun-Oshodi,
Lagos.
Dear Sir,
PURCHASE OF 500 KVA GENERATING SET
Following our meeting of today, the following agreement were reached for which, we are willing to go along with.
That:
(1) We will purchase the generating set at a price of N2,300,000 from you.
(2) We will pay you. a bank draft of N500,000 which serves as a deposit for the set
(3) Our posted cheque no. WS/3 010305 drawn on Bank of the North Limited, Kebbi dated 11th October, 1993 for N1,800,000 (one million, eight hundred thousand Naira only) serves as guarantee against full payment for the set.
(4) We promised to issue a Bank draft in replacement of the post-dated cheque for N1,800,000 payable in Lagos as final payment on collection of the fund from Rural Electricity board, Birnin Kebbi.
We will be very grateful if this generating set is delivered on time to Wasagu to enable us process payment at Kebbi State Government Rural Electricity Board.
Thank you for the trust reposed in us and we promise not to disappoint you.
Yours faithfully,
For: SABALCO NIGERIA LIMITED
ALH. BALA SAUSU
CHAIRMAN/MANAGING DIRECTOR
Exhibit 2 is the Appellant’s receipt in the sum of N500, 000 issued to the 1st Respondent being part payment for 500 KVA Generating set to be supplied to the 1st Respondent. Exhibits ‘3’ and ‘4’ are letters acknowledging the sum of the N500,000 from the 1st Respondent to the Appellant in respect of which Exhibit 2 was issued. Both Exhibits are dated 22nd September, 1993. Exhibit ‘5’, the pro-forma invoice dated 17th September, 1993 contains the description of the generating plant to be supplied.
It states inter alia as,
“Exhibit 5
ITEM QUANTITY DESCRIPTION UNIT TOTAL PRICE PRICE
BRAND NEW BRITISH MANUFACTURED
DIESEL GENERATING PLANT 500KVA
CONTINUOUS RATING BASIC ELECTRIC
START.
BRUSHLESS ALTERNATOR 3 PHASE 4
WIRE 0.8 PF 50 HZ 230/400 VOLTS
AT 1500 RPM. SUPPLIED COMPLETE WITH
24 VOLT ELECTRIC START, BATTERY
PACK, ACQUSTIC SILENCER AND
FLEXIBLE SECTION 12 HOURS BASE
MOUNTED FUEL TANK &
CONTAINING 1 AMMETERS,
IXVOLTMETER AND SELECTOR
SWITCH, FREQUENCY METER,
HOURS RUN RECORDER, KEY START
SWITCH BATTERY CHARGE
AMMETER, LOW OIL PRESSURE/HIGH
ENGINE TEMPERATURE SHUTDOWN
DEVICE AND MAIN OUTPUT
CIRCUIT BREAKER, SERVICE MANUAL.
LIST PRICE… EX LAGOS N2,3000,000.00
Exhibit 6 is the way bill. It gave the particulars of the generating plant supplied as:-
WAY BILL
QTY PARTICULARS
- ONE BRAND NEW BRITISH MANUFACTURED INDUSTRIAL DIESEL GENERATING SET. BASIC, WATERCOOLED AND COUPLED TO LEROY SUMMER ALTERNATOR, 550 KVA CAPACITY CUMMINS GENERATOR S/N. 97913 ENGINE NO VTA28G1. ALTERNATOR: LSA49L4-4 SUPPLIED COMPLETE WITH ALL NECESSARY ACCESSORIES SUCH AS SILENCER, MUFFLER SILENCER PIPE, ELECTRIC CONTROL PANEL, TWO NEW AND BIG BATTERIES, IGNITION KEYS (2 PCS), SERVICE MANUAL BOOKLET, ONE BIG TANK AND BASIC PANEL.
A collective reaching of these exhibits clearly reveals the terms of the contract between the parties. That the new generating plant to be supplied ‘must be a British Manufactured diesel generating plant 500 KVA capacity. The particular brand of generator to be supplied is clearly stated in the pro-forma invoice Exhibit 5 issued to the Respondents. The contract price was N2.3 million. The Respondents made a deposit payment of N500,000.00 leaving a balance of N1.8 million in respect of which a postdated cheque of the said sum was issued to the Appellant. The generating set was to be delivered to Wasagu, Kebbi State. The balance of N1.8 million was expected to be paid after the delivery of the generator and payment therefore by the Kebbi State Rural Electricity Board. It is however clear that Exhibits 1,2,3,4 did not contain the type of the generating set bargained for by the parties, but Exhibit ‘5’ which is the pro-forma invoice gave the description of the generator to be supplied as, “Brand New British Manufactured Diesel Generating Plant” and gave the capacity of the generator as 500 KVA and the price at N2.3 million. There is therefore no place in these Exhibits where Perkins/Rolls-Royce generating plant is mentioned. It is trite that parties are bound by their contract and the role of the court is to give effect to the terms of their contract and not to alter it or introduce any new material term to it and thereby make a new contract for the. parties. See Olatunde Vs O.A.U (1998) 5 NWLR (pt.549) 178; O.H.M. Vs APUGO & Sons (1990) 1 NWLR (Pt.129) 652. Mr. Adeyele contended that the finding by the learned trial judge that the contract between the parties was for the supply and delivery of a new 500 KVA Perkins/Roll-Royce Generating plant to Wasagu in Kebbi State was wrong. I cannot but agree with the learned counsel in the circumstances. There was no basis for the reliance by the court on the evidence of PW3 to the effect that it was Perkins/Rolls-Royce generator that the Respondent contracted with the Appellant to supply having excluded the oral evidence of DW1 on the variation of the contract placing reliance on Section 132(1) of the Evidence Act. It is in evidence before the lower court that PW3, the 2nd Respondent admitted under cross-examination that Exhibit 1 contains the terms of their contract with the Defendant no more and the said exhibit does not contain the type of the generating set to be supplied.
The contention of the Respondents cannot override the contents of Exhibits 1 and 5 as to the type and make of the generating set to be supplied. The oral evidence of PW3 that they negotiated for Perkins Roll-Royce not withstanding. See Section 132(1) of the Evidence Act.
Therefore, the finding of the learned trial judge that,”Although the type or name of rolls Royce generator was not mentioned in Exhibits 1, 2, 3, 4 and 5, the evidence of DW1 clearly shows what the parties contracted for was 500 KVA Perkins Rolls-Royce generator for N2.3 million and not 550 KVA Cummins generator supplied at the rate of N2.3 million. There is no pro-forma invoice raised in respect of 550 KVA Cummins generator to show the cost as in Exhibit ‘5’.” is not based on the legally admissible evidence before the court.”
The attempt by the learned trial judge to introduce Perkins Rolls Royce generator into the contract between the parties based on the oral evidence of PW 3 after finding that no type of generator was specified in any of the material exhibits is thereby making contract for the parties. It is not the duty of the court to make contract for the parties. Contract as a rule are made by the parties thereto who are bound by their terms thereof and the courts are always reluctant to read into contracts terms on which there is no agreement. Where therefore parties to an agreement have set out the terms thereof in a written document, extrinsic evidence is not admissible to add to any or contradict the terms of the written agreement.
See Bank of the North vs Akintoye (1999) 2 NWLR (pt.631) 392; Majekodunmi Vs Co-operative Bank (1997) 10 NWLR (pt.524) 98 and Orji Vs Anyaso (2000) 2 NWLR (pt.643) 1 at 23. See also Section 132(1) of the Evidence Act. In the circumstances therefore, the learned trial judge was wrong to have relied on the oral evidence of PW3 and DW1 to vary or add to the written terms of the contract between the parties as contained in Exhibits ‘1’, ‘3’, ‘4’, ‘5’ and ‘6’. Any evidence therefore that tends to vary the said terms is inadmissible. The make of the generator to be supplied was not stated in the contract terms of the parties.
Furthermore, the evidence of PW1 and PW2 heavily relied upon by the learned trial judge are totally unrelated to the contract between the Appellant and the Respondents as both PW 1 and PW2 never gave evidence on the contract between the parties herein. Their evidence if any could only be relevant to the contract between the Kebbi State Rural Electricity Board and the 1st Respondent which was not an issue before the trial court for determination.
It is trite law that document admitted for identification purpose is no evidence until tendered and admitted as an exhibit. It is also argued that the report is a public document and the only secondary evidence admissible is the certified true copy pursuant to Section 97 (1) of the Evidence Act and that the said report was not certified and the court has no discretion to admit and act upon evidence which is totally inadmissible. See Omega Bank Plc Vs O.B.C Ltd (2005) All FWLR (pt.249) 1964; Alagbemiro Vs Ajagungbade III (1990) 3 NWLR (pt.136) 37; Hausa Vs State (1994) 6 NWLR (pt.350) 281; and Gbajor Vs Agunburegui (1961) 1 All NLR 853.
The trial judge relied heavily on the said report to find that the generator supplied by the Appellant was not new but a refurbished one. A court of law can only act upon evidence that is legally admissible. It cannot and has no discretion to admit and act upon evidence which is legally inadmissible, even with the consent of the parties see Omega Bank (Nig) Plc Vs O.B.C. Ltd (supra). Consequently, the report of the committee on the inspection of the generator is inadmissible and is therefore expunged from the record of the court.
In Hausa Vs State (supra) at 315-316, Uwais,JSC(as he then was) held,
“…the statement was not put in evidence through him (PW3) nor through PW 5, but was tendered for identification only. It is not the duty of the learned trial judge to admit the statement in evidence. If counsel for the defence tendered it for identification only it was not evidence that the trial judge could act upon.”
Now, from the entirety of the documentary evidence before the court, that is Exhibits ‘1’,”2′,’3′, ‘4’,’5′ & ‘6’ the model of the generator to be supplied as particularly described in Exhibit ‘5’, the pro-forma invoice is a “Brand New British Manufactured Diesel Generating Plant 500KVA”to be supplied to the Respondents. The type to be supplied was not so stated. I have earlier found in this judgment that oral evidence of PW3 and DW1 as to the type of the generating plant to be supplied being Perkins/Rolls-Royce as found by the learned trial judge, having been introduced into the contract agreement between the parties as such evidence cannot be used to add or vary the contract agreement between.
In the evidence of DW1 before the trial court it was stated that British Manufactured Diesel Generating Plant could either be Perkins/Rolls-Royce Lister or Cummins generator as they are all British manufactured. However, from the evidence adduced before the trial court what the Respondents requested for was a 500 KVA Generating Set. It is also not in-dispute before the court that what was supplied to the Respondents by the Appellant was a 550 KVA Cummins generator as indicated in the Way Bill Exhibit ‘6’. The generator supplied does not therefore correspond with the specification of 500KVA, that is, accepting the fact that Cummins generator is also a British Manufactured Diesel Generator. In the circumstances, therefore there was a breach of contract on the face of the transaction. In the instant case, not only that the generator supplied does not correspond to the description, it is stated that, instead of supplying brand new, the Appellant supplied refurbished one, even though the Appellant was not invited at the inspection site and therefore was not heard on whether what was supplied was a brand new as indicated in the way bill or a refurbished generating plant as contended by the Respondents.
In a sale of goods, where goods are sold by description and upon delivery failed to conform to the description, the buyer is automatically entitled to repudiate the contract and demand a refund. See FBN Plc Vs Ozokwere (2006) 4 NWLR (pt.970) 422. In the instant case, instead for the Respondents to repudiate the contract and return the 550 KVA Cummins refurbished generating plant supplied back to the Appellant and demand a refund of the deposit, and damages for breach of contract, the Respondents took delivery of the 550KVA Cummins refurbished generating plant, installed same and put same into perfect use and refused to pay to the Appellant the difference of N1.8 million contract price even when he collected his contract sum from Kebbi State Government.
In the circumstances of this case, therefore, it is my candid view that even if there was a breach of the contract by the Appellant for failure to supply generating plant according to specification, the conduct of the Respondents in lying low and refusing to act immediately by repudiating the contract, they have by their own conduct acquiescence the act of the Appellant and cannot now be heard to complain of breach of contract by the Appellant. They have therefore waived any right to complain under the contract. The Respondents cannot eat their cake and have it. They cannot create a crisis situation and seek to rely on it. The Latin maxim being, Unemo ex suo delicto moliorem suam conditionem facere potes” meaning no one can improve his position by his own wrong. It is in evidence before the trial court that the Appellant wrote to the Respondents to return the generator supplied if they are of the view that it is a refurbished one and take back their deposit. The Respondents did not. It was 9 months after when the Appellant made repeated demands for the settlement of the balance in Exhibit ‘DJ’ which is the same of Exhibit ‘8’ and threaten legal action, that the Respondents wrote Exhibit ‘D2’ to complain about the condition of the generator supplied to them attaching ‘D2’ the report and thereafter went to court to claim damages for breach of contract. It is my view, in the circumstances that there was no breach of contract, and even of there was, same has been acquiescenced by the Respondents. Consequently, this issue is resolved in favour of the Appellant.
Issue No. two for determination is “whether the judgment of the court below followed the flow of evidence.”
Arguing this issue, learned counsel for the Appellant referred to some specific findings by the learned trial judge, more particularly on the issue whether there was a breach of contract, that the learned trial judge merely agreed totally with the submissions put forward for the Respondents even when they were contrary to the reasons of the court for rejecting the argument for the defence. It is submitted that the court applied Section 132(1) of the Evidence Act against the evidence on the type of the generator to be supplied as given by the defence but did not apply it to reject the mere mention of Perkins Rolls-Royce by DW1. It is also submitted that the observation of the trial judge that although the type or name of Rolls-Royce generator was not mentioned in Exhibits ‘1’, ‘3’, ‘4’ and ‘5’ the oral evidence of DW 1 clearly show that what the parties contracted for was 500 KVA Perkins Rolls Royce generator even on the face of the finding by the trial judge when he stated that there was no proforma invoice raised in respect of the 550 KVA Cummins generator to show the cost in Exhibit ‘5’. It is further submitted on the allegation that the generator supplied was refurbished, the learned trial judge went to hold that the plaintiff proved that the 550 KVA generator supplied was refurbished even when they were not given a hearing on the issue.
It is also submitted with respect to the report ID 2 giving negative comments about an item supplied by the Appellant without notice to, or participation of the Appellant, that the trial judge brushed it aside on the ground that the Appellant was not a party to the contract of the Respondent and Kebbi State Government and that the 2nd Respondent communicated the discoveries to the Appellant through Exhibit ‘7’. It is the view of learned counsel that the trial judge missed the point all because he was working towards a set answer to find the Appellant liable for breach of contract.
It is also submitted that, that the learned trial judge was determined to award damages to the Respondents for alleged over 100 trips to Birnin Kebbi at the rate of N20,000.00 per trip and a hotel accommodation of N9,500.00 per night. That learned trial judge also considered the alleged reputation of both Respondents and a denial of opportunities of further contract even in the absence of evidence to back up the alleged trips and hotel accommodation. It is submitted that such claims are in the realm of special damages and not general damages because they are capable of accurate quantification and as such needed to be as a matter of law specifically pleaded with particulars, citing the case of UBN Ltd Vs. Odusote Bookstores Ltd (1995) 9 NWLR(pt.421) 558.
Learned counsel further submitted that there was no evidence on record on the reputation of either of the Respondents. That there was also no claim for defamation and yet the trial judge found for the Respondents, that because of the breach the reputation of the Respondents would be lowered in the estimation of Kebbi State Government and has the effect of depriving them of the opportunity of getting further contracts from the Government of Kebbi State. It is submitted that this finding is speculative and that the trial judge was wrong to have ventured into, citing in support the cases of; Obulor Vs Oboro (2001) 8 NWLR (pt.714) 25; and Archibong Vs Ita (2004) 2 NWLR (Pt.858) 590. It is the view of learned counsel that the finding is perversed as it does not flow from the evidence on record. Reliance was also placed on the cases of Olohunde Vs Adeyoju (2000) 10 NWLR (pt.676) 562 and Overseas Construction Ltd Vs Creek Enterprises Ltd (1985) 3 NWLR (Pt.13) 407. It is the view of Adeyele, Esq. that the decision of the court below is against the weight of evidence and as a matter of law perverse based on evidence on record. We were urged to resolve this issue in the negative and to allow the appeal on this ground.
Responding, learned counsel for the Respondents referred to the evidence of PW1, PW 2 and Exhibit ‘7’ particularly the report of the inspection which all goes to show that the 550 KVA Cummins generator supplied by the appellant was second hand. It is also submitted that the evidence of the .only witness of the Appellant support the fact that the generator for which they raised pro-forma invoice was Perkins/Rolls-Royce and that the Appellants were only evasive on the issue and maintained in the pleading that the type of the generator to be supplied was not agreed. Learned counsel referred to the evidence of DW1 that the Respondents applied for 500 KVA Rolls-Royce which supports the case of the Respondents and submitted that the evidence of DW1 is admissible and ought to be relied upon by the trial court as evidence against interest, citing in support, the case of Akinlagun Vs Oshoboja (2006) 5 SC (pt.11) 100 wherein it was held that what is admitted need no further proof. Learned counsel submitted that from the facts as found by the trial court, .shows that the Appellant breached the agreement and that DW1 stated that they deal in Perkins and Lister generators and that the supply of Cummins was contrary to the agreement reached between the parties.
It is also the view of learned counsel that the assessment of damages was properly evaluated and considered by the trial court before it came to its finding. learned counsel referred to paragraphs-19, 20, 21, 22 and 23 of the statement of claim and submitted that the issue of reputation of the Respondents was affected by the supply of a second hand generating set. That the effect of the breach including spending over N9, 500.00 per trip which the 2nd Respondent made over 100 times was not denied specifically. It is his view that positive averment must be specifically denied, citing the case of Alhaji Goni Kyari Vs Alhaji Ciroma Alkali & Ors (2001) 5 SCNJ 421. It is the view of learned counsel that, having not joined issues on the effect of the breach, the Appellant cannot be heard to complain on the issue of damages citing the case of Oyo State Vs Fair Lakes Hotel Ltd (1989) 12 SC 23. It is his view that what is required is for the Respondents to establish their entitlement to the type of damages claimed and that the injury suffered by the Respondents was as a result of the action of the Appellant to supply second hand generator. He submitted that this is a case of supply for which damages are recoverable as held by this court in the case of Stag Engineering Co Vs Sabalco Nig Ltd & Anor (2000) 6 NWLR (pt.659) 121, It is the view of learned counsel that the judgment flowed from the evidence and facts placed before the trial court. We were urged not to disturb the findings of the trial court as same is not perversed.
I have carefully considered the evidence adduced before the trial court and the submissions of learned counsel on this issue.
It is clear from the submissions of learned counsel for the Appellant that the learned trial in his facts finding mission went on to rely on extraneous matters and speculate on issues that are not before him thereby coming to a wrong conclusion. In the case of Omega Bank Nig Plc Vs. O.B.C. Ltd (supra), the Supreme Court held with regard to contract entered into by the parties, that it is not the function of the court to make contracts between the parties. The duty of the court is to confine itself to the evidence before it. In the instant case, the learned trial judge not only went on to make contract for the parties as found in this judgment, but also went on to consider extraneous matters even in the absence of any evidence before it. There was no evidence from the records that the reputation of the Respondent would be lowered in the estimation of the Kebbi State Government that has the effect of depriving the Respondents the opportunity of getting further contacts from the Kebbi State Court. It is trite that facts pleaded and on which no evidence is led thereon goes on issue and is deemed abandoned. These findings by the learned, trial judge are speculative and the learned trial judge was wrong to have ventured into. A court of law cannot decide issues on speculation no matter how close what it relies on may seem to be to the facts. Speculation is not an aspect of inference that may be drawn from facts that are laid before the court. Inference is a reasonable deduction from facts whereas speculation is a mere variant of imaginative guess which even when it appears plausible, should never be allowed by a court of law to fill any hiatus in the evidence before it. See Overseas Const. Co Ltd Vs Creek Enterprises ltd (1985) 3 NWLR (pt.13) 406; Ivienagbor Vs Bazuaye (1990) 70 LRCN 2256 at 227
It is the duty of the court to confine their decisions to matters that are fought upon by the parties and it is wrong and unjust for the court to open a new and unexpected battle field in their judgments as this may not only, spell injustice to parties but may also erode confidence in the administration of justice. See Obulor Vs Oboro (2001) 8 NWLR (pt.714) 25; Archibong Vs Ita (2004) 2 NWLR (pt.858) 590; and Olohunde Vs Adeyoju (2000) 10 NWLR (Pt.676) 562
Where the finding of the trial court is unsupported by any legal evidence, such finding is clearly perverse and patently erroneous. It cannot be allowed to stand. This is clearly the position in the instant case. The learned trial also made effective use of ID 2, the report of the inspection committee on the Cummins generator supplied and delivered to the Kebbi State Rural Electrification Board, which was clearly inadmissible evidence when same was not admitted in evidence as an Exhibit and not being a Certified True Copy being a public document. There was also no legal evidence before the court as to the over 100 trips made by the 2nd Respondent to Kebbi State in pursuit of his payment, and hotel accommodation lodged in and paid for at the amount stated by the Respondent.
A finding of fact which is merely speculative and not based on any evidence is perverse and will invariably and inevitably lead to a miscarriage of justice. A mere speculative observation cannot be a substitute to proof of facts-ascertained in a civil suit.
It is clear from the above that the finding of the trial court is unsupported by any legal evidence. Such finding is clearly perversed and patently erroneous. It cannot therefore be allowed to stand. This issue is also resolved in favour of the Appellant.
Issue 3 for determination is “Whether assuming but not conceding that there was a breach of contract whether the measure of assessment of general damages by court below was proper in law.”
Arguing this issue, the learned counsel for the Appellant Adeyele Esq., submitted that the trial court found the Appellant liable for breach of contract and then went ahead to award general damages to the tune of N1.8 million. Learned counsel referred to the judgment of the court at page 254 of the records of appeal from line 1-22 and submitted that the court erroneously awarded damages when same has not been proved as neither PW1 and PW 2 and in fact PW3 stated that as at 12/7/94, the issue of acceptance and payment for the generating set had not been finally resolved when PW 3 stated that he had been paid for the generator.
It is the view of learned counsel that the learned trial judge merely speculated contrary to his duty to adjudicate based on the evidence before him. He referred to Obulor Vs Obara (supra) and Archibong Vs Ita (supra). That delay in payment which is one of the factors that influenced the trial court in assessing damages cannot stand.
It is also the view of learned counsel that another factor that influenced the learned trial judge in assessing damages was the purported trips to Kebbi and hotel accommodation by the 2nd Respondent. It is submitted that the Appellant is under no obligation to deny general allegations that are not specific in form or with any substantial particulars. It is submitted that dates of alleged trips were not given, names of alleged hotels are not stated and that no receipts were tendered to back up hotel charges. It is the view of learned counsel that the claims on this basis are capable of quantification and as such in the realm of special damages and ought to have been specifically pleaded as such. The cases of Obasuyi Vs Business Ventures (2005) 5 NWLR (pt.658) 668; and Nzeribe Vs Dave Eng. Co Ltd (1994) 8 NWLR (pt.361) 124. were referred to. It is also submitted that the court cannot make such wide allegation of expenses a basis for assessment of general damages citing in support the case of UBN Ltd Vs Odusote Bookstores Ltd (1995) NWLR (pt.421) 558.
It is further submitted that another factor that influenced the assessment of general damages by the trial court was the alleged damages to reputation of the Respondents in the estimation of the Kebbi State Government with the alleged resultant effect of depriving them opportunity of getting further contracts from that State Government. It is submitted that apart from the ipse dixit of the 2nd Respondent, there was no other piece of evidence on the lowering of reputation. It is also submitted that there was no evidence as to deprivation of award of further contract. That there was no evidence led that the Respondents tendered for any further contract and were not awarded. It is therefore submitted that the learned trial judge relied on his own imagination or speculation in assessing damages for breach of contract and went on to award the sum of N1.8 million as general damages, the exact sum outstanding to the Appellant from the Respondents for the generator supplied and for which Kebbi State Government paid the Respondents fully. Learned counsel submitted that the sum total of all these is that the learned trial judge misapplied the law and based his assessment of general damages on extraneous matters in total disregard of the principles of law and also on inadmissible evidence. It also the view of learned counsel that the trial court took into consideration matters that are irrelevant to assessment of general damages and came out with an excessively high assessment of general damages to tally with the liquidated debt owed the Appellant by the Respondents on the contract in the sum of N1.8 million. We were urged to set aside the award.
On the purpose of awarding general damages, learned counsel referred to the case of Omega Bank Plc Vs O.B.C Ltd (2005) All FWLR (pt.249) 1964 . It is submitted that the damage, loss or injury suffered by the Respondents if any must be such as must be deemed to be within the contemplation of the parties or as reasonably foreseeable at the time the contract was made. It is submitted that the principle of law as laid down in the case of Hadley Vs Baxendale (1854) 9 Exch.341 remains the law in Nigeria and was applied by the Supreme Court in Swiss-Nigeria Wood Industries Ltd Vs Bogo (1970) 6 NSCC 235. It is thus submitted that the failure of the Respondents to pay for the generator supplied timeously or 100 trips to Kebbi and hotel accommodation for unspecified number of nights or inability to secure further contract could not be reasonably foreseeable at the time of contract and as such should be irrelevant to assessment of general damages. We were urged to so hold and to set aside the award of general damages and resolve issue 3 in favour of the Appellant.
In his response to this issue, learned counsel for the Respondents submitted that this court in the case of Stag Engineering Co Vs Sabalco Nig Ltd & Anor (2000) 6 NWLR (pt.659) 121 decided that the issue between the parties was a simple contract and therefore the trial court properly assessed the general damages which flows from the action and breach of simple agreement to supply new Rolls-Royce 500 KVA. It is submitted that despite written promises to supply from their U.K. Office, they supplied second hand, which had to pass through 9 men inspection’ and that it was over two years thus involving extra traveling hotel and other expenses of over N29,500.00 per trip. It is further submitted that the over 100 trips to Kebbi by the 2nd Respondent was corroborated by PW1 and PW 2 and that the breach in the supply of second hand generator for a new one resulted in the extra-expenses and damages. That the loss naturally flows from the breach referring to the holding of the court at page 255 and 256 of the records of appeal.
Learned counsel submitted that the judgment of the learned trial judge was based on proved evaluated and properly reviewed evidence and we were urged to uphold the finding of the learned trial judge. I have already decided in this judgment that there was no breach of contract by the Appellant to supply the Respondents with 500 KVA brand new British Manufacture Diesel generating set, the Respondents having taken delivery of the 550 KVA Cummins generator without any complaint. I will therefore only comment on the award of general damages by the learned trial judge.
The issue of damages arises only when there is breach of’ 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. See Omega bank (Nig.) Plc Vs O.B.C. Ltd (2005) 8 NWLR.(Pt.928) 547. Therefore in any action for breach of contract, the .measure of damages is the loss flowing naturally from the breach and is incurred in direct consequence of the breach and its quantum need not be pleaded or proved as it is generally presumed by law. See Gonzee (Nig). Ltd Vs NERDC (2005) 13 NWLR (pt.943) 637. In the instant case, the learned trial judge relied on the alleged over 100 trips -made to Kebbi and hotel accommodation while the dates of 33 alleged trips were not given, name of alleged hotels were not stated and no receipts was tendered to back up hotel charges as alleged. These claims are capable of quantification and thus must be specifically proved. See Obulor Vs Obara (supra); Archibong Vs Ita (supra} and Obasuyi Vs Business Ventures (2005) 5 NWLR (pt.658) 668.
It is trite that the award of general damages is improper where the quan!um of loss is ascertainable. It is also wrong to take into consideration in awarding general damages matters which would have been considered in awarding special damages. See UBN Ltd Vs Odusote Bookstores Ltd (1995) NWLR (pt.421) 558 and Kerewi Vs Adegbesan (1967) NMLR 89.
In the instant case all the claims of over 100 trips to Kebbi and the hotel accommodation are capable of qualification and thus must be specifically proved and the learned trial judge was therefore wrong to have based his award of general damages on a consideration of matters in awarding special damages.
Where a trial judge in assessing general damages proceeds upon a wrong principle or no principle of law and makes an award which is specifically unwarranted, excessive, extravagant, unreasonable and unconscionable in comparison with the greatest loss that would possibly flow from the said breach of contract without stating whether the amount awarded is for loss of profit or loss of business and the measure of the basis of its assessment, the appeal court will interfere but not otherwise. See UBN Ltd Vs Odusote Bookstores Ltd (supra). It is clear from the instant case that the learned trial judge took into consideration extraneous matters in the award of general damages. It is the duty of an appellate court not to interfere with findings of fact made by trial court which had the advantage of hearing and seeing witnesses testify so long as those findings are reasonably supported by evidence. See Ivienagbor Vs Bazuaye (1990) 70 LRCN 2256 at 2272; Omoregre Vs Edo (1971)All NLR 282. Except in special circumstances such as commission of error in substantive or procedural law or where the findings are shown to be perverse. See Nwadike Vs Ibekwe (1987) 4 NWLR (pt.67) 718; Onwuka Vs Ediala (1989) 1 NWLR (pt.96Lj 82; and American Cyanamid Co Vs Vitality Pharm Ltd (1996) 5 NWLR (pt.488) 507. In the instant case, the award of general damages by the learned trial judge was under the misconception of the law where he has taken into account irrelevant matters and this court will interfere to set it aside. Thus issue 3rd is also resolved in favour of the Appellant and against the Respondents.
Based on the foregoing, it is my view that the judgment is against the follow of evidence. It is also perverse and there was no breach of contract and the award of general damages is only speculative.
Consequently, having resolved all the issues in favour of the Appellant, the appeal succeeds and it is hereby allowed. The judgment of S. O. Ochimana J. delivered on the 23rd July, 2005 is hereby set aside.
There shall be costs assessed at N20, 000 in favour of the Appellant against the Respondents.
Other Citations: (2008)LCN/2875(CA)
