Wemabod Estate Limited V. Adesoye Simeon Osinuga(1994)

LawGlobal-Hub Lead Judgment Report

EMMANUEL OLAYINKA AYOOLA, J.C.A.

 The respondent (“the Plaintiff”) sued the Appellant (“the defendant”) on a contract. He claimed the sum of N300,805.00 specified, in his statement of claim filed with the writ of summons which superseded the writ, as made up of the following:-
“21.1. N65,625.00 for Professional Services rendered;
21.2. N35,000.00 as loss of profit of work carried to stage III of the contract;
21.3. N250 referred for re-allocation form;
21.4. Interest on the total sum of N300,875 with interest thereon at 13% per annum from 7/7/83 till total liquidation of the debt, from the Defendant for breach of contract.”

In November 1986, the plaintiff applied for summary judgment pursuant to 010 Rules 1 and 2 of the High Court of Lagos State (Civil Procedure) Rules (the Rules). He stated in his affidavit among other things that:
(1) there was an agreement between the plaintiff and the defendant whereby a consultancy contract was entered into, by which the defendant engaged the plaintiff, to perform some services in relation to a proposed renovation/redevelopment of its property lying, situate and being at Murtala Muhammed Way, Ebute Metta, Lagos;
(ii) pursuant to the Agreement work was done for the defendant by the plaintiff; and,
(iii) on account of such services rendered in performance of the contract, the defendant was indebted to the plaintiff in the sum now claimed and has refused to pay the plaintiff the said sum despite repeated demands. The affidavit was accompanied by several documentary exhibits.

The Estate Surveyor of the defendant in an affidavit filed on behalf of the defendant to show cause against the application stated that it was admitted that there was a contract as alleged by the plaintiff and that the plaintiff “did some work on the renovation/redevelopment of one of its properties in respect of which the Defendant/Respondent is owing the Plaintiff/Applicant some money.” In paragraphs 6 and 7 of the affidavit the facts were deposed to by him “that the job was still on the drawing board when it had to be suspended and “that the amount of work done on the property by the Plaintiff/Applicant has not been quantified and evaluated in order to know the financial commitment of the defendant/respondent.”

It was stated that the defence goes to the whole of the claim.

In a short judgment, the learned Judge (Agoro J.) refused leave to defend on the ground that the facts deposed to in the affidavit filed on behalf of the defendant did not seem to be sufficient to entitle the defendant to defend the substantive action. He entered judgment in favour of the plaintiff in the sum claimed with costs.

The defendant has appeals from that judgment. In the brief of argument filed by counsel on its behalf, three issues for determination were formulated thus:-
(a) Did the plaintiff have any locus standi to institute the action?
(b) Was the learned trial Judge right to have given judgment for an unliquidated sum?
(c) On a proper consideration of the facts before the learned trial Judge, was he right to have refused the defendant leave to defend the action on the merits?”

Learned Counsel for the plaintiff agreed that those are the issues that properly arise for determination.

The law is now fairly well settled that leave to defend must be given unless there is no real substantial question to be tried.

There would be a real substantial question to be tried whether that question is one of fact or one of law, when the issue raised causes a reasonable doubt to the plaintiff’s entitlement to judgment. In Jones v. Stone (1894) AC 122, it was said that the power to give summary judgment under an order similar to 0.10 is “intended only to apply to cases where there is no reasonable doubt that a plaintiff is entitled to judgment, and where therefore it is inexpedient to allow a defendant to defend for mere purposes of delay.”

A fair probability that the defendant has a bona fide defence would suffice for the exercise of discretion to grant leave to defend. In a recent case, this court had occasion to consider 0.10 and said (per Uwaifo, J.C.A.):
“The purpose of the procedure under Order 10 is not to drive the defendant who shows he has a triable issue from judgment seat. It is to come in the interest of justice to the aid of the plaintiff whose claim is patently unassailable and where all the facts relied on by the defendant, assuming them to be in favour, do not amount to a defence in law.” See Savol West Africa Ltd v. National Bank of Nigeria Ltd & Ors. (CA/L/48/88: Unreported: 1994)

The main question in this case is whether the Judge was right when he held that the facts deposed to in the defendant’s affidavit do not seem to be sufficient to entitle the defendant to defend, but counsel for the defendant had launched into a discourse of the architect’s role in the execution of a building contract. In order to put the issues on this appeal in proper focus, it is expedient to observe that the proper place to put forward facts showing that the defendant has a good defence to the action is before the trial Judge who is vested with discretion to grant leave to defend. Where such leave has however been refused, it should be open to the defendant on an appeal from such refusal, to show that the legal result of the facts disclosed in his affidavit entitle him to defend the action.

On this appeal, the defendant’s counsel has sought to show that the propositions of law, extracted from authoritative books on building and engineering contracts, which apply to the facts of this case are as follows:-
(a) Where work is done on approval, or is in the nature of a proposal, sketch or design submitted for approval, the Architect may have no claim unless the design is actually approved or used in effect such designs are in nature of offers or tenders.
(b) Where an architect is engaged on the basis of the scale fees but the project is abandoned before completion, he is not entitled to recover the scale fees but only his fair charges, for the work actually done, i.e. on a quantum meruit.
(c) In considering the amount to be paid to an Architect on a quantum meruit for partial services on an abandoned project, it is not appropriate to calculate his remuneration based on a percentage of the estimated cost of works which had been abandoned or on time basis;
(d) When an architect contracts to perform an entire work, e.g. to prepare drawings and superintend the Whole work for a certain sum, whether fixed on the basis of a commission on the outlay or otherwise, his charges are not recoverable until the whole work is complete, unless express provision is made for payment by instalments.
It is argued, that “applying the above rules to the facts of this case, it is readily apparent that there are serious issues, both of fact and of law to be determined at the trial.”

It is manifest from the facts deposed to in the affidavit filed on behalf of the defendant and those facts in the plaintiff’s affidavit admitted by the defendant that the main question in the case is as to the method of computation of the plaintiff’s entitlement. The plaintiff says that the amount owing to him by the defendant is the amount computed on scale fees basis, but the defendant while agreeing, it would appear that some money is due to the plaintiff, contends that such money can be ascertained only upon the basis of actual work done by the plaintiff. The material facts were before the learned Judge that the plaintiff was engaged on the basis of the scale fees. In exh. A which is said to form the basis of the contract between the parties the defendant had written:
“On commissioning, your terms of engagement and fees would (be) based on the conditions laid down by the federal Military Government Circular No. W95356/Vol.I/208 of 26th June, 1975 (Scale of fees payable to consultants for public work;”

Both exhibits H and I also show that the plaintiff had presented his bill to the defendant computed on scale fees basis. It is common ground that the project was not proceeded with.

There were thus sufficient materials before the learned Judge to raise a substantial question whether the plaintiff was entitled to a claim computed on scale fees basis as he had done or on quantum meruit bases which paras. 6, 7 and 9 of the affidavit to show cause suggest should be the correct basis of computing the plaintiff’s entitlement. It is difficult in these circumstances to accept the submission made by learned counsel on behalf of the plaintiff on this appeal, that since the “plaintiff had eloquently disclosed the basis of computation of his claim in the lower court, it is rather late in the day for the appellant to attach them.” No doubt, the learned Judge would have been assisted by submission of counsel if counsel for the defendant had not been extremely laconic in his address, merely submitting: that having regard to the affidavit to show cause, the defendant should be allowed to defend the action. However, his failure to address the Judge on the legal result of the facts put before the Judge does not excuse the learned Judge from considering the defence which the defendant’s affidavit disclosed: that its liability to the plaintiff is to be determined by actual valuation of the work done as distinguished from liability on scale fee basis as claimed by the plaintiff. In my judgment, the learned as claimed Judge was wrong when he held that the facts deposed to in the defendant’s affidavit do not seem to be sufficient to entitle the defendant to defend.

Additional grounds of defence have been brought out by counsel for the defendant on this appeal. These are:
(i) That although the agreement of the parties was that the conditions laid down by the Federal Military Government Circular No. W95356/Vol. I/208 of 26th June 1975 should be applicable, the last bill presented by the plaintiff and which formed basis of his claim showed that the plaintiff’s professional fees had been calculated in accordance with The Nigerian Institute of Architects Conditions of Engagement and Consultancy services;
(ii) That there were marked disparities in the basis of calculation of the plaintiff’s first bill (Exh. H), and the second (Exh. I);
(iii) That the estimated project cost had escalated from N4.5 million as at the date of the first bill to N2 Million as at the date of the second bill.
These are cogent points of defence but the defendant had chosen not to raise any of the in its affidavit to show cause or in its counsel’s address before the learned Judge. Where a defendant has not expressly or by necessary inference shown that he is relying on a particular defence, it is not for the Judge to wade through the facts and scan through the documents to formulate a defence for that defendant. In the present case, the only defence which the defendant can be said to have put forward is that its liability to the plaintiff cannot be determined unless on basis of actual work carried out i.e. on quantum meruit basis. In determining whether the learned Judge was right or not, that is the only defence that should be considered on this appeal.

As earlier stated, the learned Judge came to a wrong conclusion when he said that the facts deposed to did not seem to be sufficient to entitle the defendant to defend the action on the merit. At that stage of the proceedings all that the learned Judge needed to be convinced of was that there was a probability of a bona fide defence or that there was no reasonable doubt that the plaintiff would be entitled to judgment. If leave to defend is granted to the defendant his contentions may at the end of the day be rejected. Notwithstanding that possibility, at that stage of the proceedings all that the Judge had to consider was whether those contentions are patently a sham and are not substantial. In this case, if the learned Judge had adverted to the propositions of law available to the defendant in relation to the facts, he would have come to a different conclusion. I hold that on the facts deposed to in the defendant’s affidavit the defendant should have been granted leave to defend the action.

The two outstanding issues, though now almost academic can be disposed of shortly! Although the point was not taken before the learned Judge, counsel for the defendant on this appeal now contends that the plaintiff has no locus standi to bring the action. I would reject this contention for several reasons. First, the issue was not taken as it should have been in the circumstances, before the learned Judge; secondly, the defendant in its affidavit admitted that the contract was between the plaintiff and the defendant and referred therein to the plaintiff as the person to whom it had a yet unquantified financial commitment. If the defendant had sought to show that it should be granted leave to defend the action because the plaintiff had no locus standi to sue, the proper place to raise the question is normally before the Judge who was to exercise a discretion whether or not leave to defend would be granted. Be that as it may, and although nothing turns on the question of standing on this appeal, it seems to me that where liability is to a firm, the partners as joint creditors are the proper plaintiffs and not one of them. Where a promise is made to a number of persons jointly, all of them (if living) must be parties to the action. (See Treitel: The Law of Contract 5th Edn. p. 456).

The second issue is whether the Judge was right to have given summary judgment for an unliquidated sum. Even if the rest of the judgment could be said to be for some liquidated sum on an assumption that it is a claim for agreed remuneration and that the plaintiff is entitled to make such claim, the sum of N35,000 claimed for “loss of profit on stage III of the contract” falls within the category of unliquidated damages. In these circumstances, Order 10 Rule 7 should have applied. That rule reads:
“Where in the case of any claim for unliquidated damages, the court……… has given leave to enter interlocutory judgment, the value of the goods and the damages, or the damages only, as the case may be, shall be ascertained in anyway which the court or Judge may direct.”
In this case in regard to the claim for N35,000 the Judge should have directed that damages be assessed.

This case underscores the need for plaintiffs and their legal advisers to bear in mind that it is only in the clearest cases that resort should be had to the summary procedure permitted by Order 10. Where the affidavit of the defendant in his effort to show cause, shows probability of a substantial defence, it is prudent not to pursue an application for summary judgment. In this case an attempt to obtain judgment speedily has led to a situation in which the action would now have to go back to trial more than seven years after it had been commenced and after an aborted summary judgment which will now be set aside had been obtained.

Be that as it may, this appeal succeeds. I would allow the appeal and set aside the judgment of the High Court, Agoro J, given on 15th December 1986 pursuant to an application pursuant to Order 10 Rules 1 & 2 of the High Court of Lagos State Civil Procedure Rules 1972 and the order for costs. I would remit the case back to the High Court to be tried de novo with leave to the defendant to defend the action. I order that each party should bear his or its costs of this appeal.

Other Citations: (1994)LCN/0184(CA)