United Calabar Co.v. Elder Dempster Lines Ltd. (1972)

LawGlobal-Hub Lead Judgment Report

COKER, J.S.C.

The United Calabar Company was the plaintiff in an action instituted by it in the High Court, Calabar, against the respondents, then defendants, and in which the plaintiff claimed special and general damages from the defendants for wrongfully terminating a contract of work entered into by the parties. The particulars of damages, later itemized, were expressed on the writ as follows:-

Special Damages 3,750 pounds

General Damages 6,250pounds

TOTAL 10,000pounds

By its statement of claim, later filed and delivered, the plaintiff avers that his firm were registered under the Registration of Business Names (Act) as stevedores; that by an agreement dated the 1st October, 1961, between the parties the plaintiff was to perform stevedoring services for and/or at the instance of the defendants at the port of Calabar for monetary consideration; that the plaintiff did perform these services and that in contravention of the provisions of the agreement between the parties the defendants by their letter of the 17th September, 1962, wrongfully terminated the contract. Paragraph 5 and part of paragraph 6 of the statement of claim aver as follows:-

“5. It was expressly provided by the said Agreement (Inter alia) as follows:-

“Clause 15: “This Agreement shall continue in force until the Thirtieth day of September, 1962 on which day it shall cease if either of the parties has given to the other three months previous notice in writing. If neither party has given notice to terminate this Agreement it shall continue in force subject to a termination at three months notice by either of the parties.”

6. On the 17th September, 1962, the Elder Dempster Agencies Limited, Calabar, as agent for the defendant wrote to the plaintiff as follows:-

“I am directed by my Principals to give you 3 months notice in writing, terminating your work for this Company in accordance with the terms of the Stevedoring contract … ”

The defendants filed and delivered as well a statement of defence. In their statement of defence the defendants aver that the contract relied upon by the plaintiff was for a definite term or period of one year from the 1st October, 1961 to the 30th September, 1962; that the plaintiff did not generally become competent to perform the contract until the 31st October, 1962; that the stevedoring contract between them and the plaintiff was properly determined as the plaintiff would not provide “full insurance cover against all risks”, contained in paragraph 13 of the agreement, that the plaintiff had suffered no damages whatsoever by the termination of the contract and indeed that the plaintiff had accepted other jobs from the defendants which should amply compensate him for whatever he might have lost by virtue of the termination of the stevedoring contract. The statement of defence also states that a sum of 3220pounds had been deposited in the High Court, Calabar, and avers “that the said sum was sufficient to satisfy the plaintiff’s partnership’s claim against the defendant’s company.” Paragraphs 6 and 7 of the defendants’ statement of defence read as follows:

“6. Further and in the alternative the defendant-company state that at no time did the plaintiff-partnership furnish to the defendant any written confirmation to the defendant or its agent to the effect that the plaintiff-partnership has obtained full insurance cover against all risks contained in paragraph 13 of the agreement relied on by the plaintiff-partnership and the defendant-company will contend that upon such a breach of the aforementioned undertaking the defendantcompany terminated the contract relied upon by the plaintiff the said plaintiff having committed a breach of an essential term of the said contract.

7. Further and in the alternative the defendant-company states that by a letter written by their agent Elder Dempster Agencies Limited dated 17th September, 1962 they gave notice to the plaintiff-partnership terminating the work of the said plaintiff forming the subject ofthe stevedoring contract the subject-matter of this action and further that the said notice of termination was duly received by the plaintiff-partnership who accepted the said notice of termination without any complaint save that on 14th December, 1962 the plaintiff-partnership by letter reference DC/IE/FIN for the first time acknowledged the receipt of the defendant-company’s aforesaid letter of termination and therein stated that the said notice of termination was invalid.”

At the trial, evidence was given on behalf of the plaintiff by Johnson Edet Effiong who described himself as the plaintiff’s managing director. He produced the copy of the written agreement (admitted as exhibit B) and testified that although the plaintiff duly and properly performed its own services as contained in exhibit B, yet on the 17th September, 1962 and by virtue of a letter of that date the defendants wrongfully determined the said contract. The letter of the 17th September, 1962 was also produced and admitted in evidence as exhibit C. The witness further testified as to payments made by the plaintiff for hire of offices, for emoluments and wages of staff and for hire of car. The witness was cross-examined by learned counsel for the defendants and part of the cross-examination is to. the following effect:-

“Q. Did you have a contract on insurance for your (plaintiff’s) workmen at the Calabar Port

A. No, I have completed negotiations for the contract in respect of my workmen’s compensation in connection with exhibit B. The premium has been quoted, but I did not pay the premium. I did not know of the insurance clause in the agreement (exhibit B) until 19th December, 1961. And as soon as I knew of it, I made the first approach to Guinea Insurance Company who refused to insure. I went to the African Insurance Company, after two other Insurance Companies had refused. Negotiations with this company took three or four months, and had not been completed before I got notice of termination from the defendant company (exhibit C).