West African Portland Cement Plc V. Mr. David Kehinde Oduntan & Anor (2007)
LawGlobal-Hub Lead Judgment Report
JOHN INYANG OKORO, J.C.A.
This is an appeal against the ruling of O. Osidipe, J. sitting at the High Court of Justice, Abeokuta on 21st January, 2003. At the hearing of this appeal, only the appellant was represented by counsel. The Respondents and their counsel were absent. However since briefs were filed and exchanged, this appeal was heard in accordance with Order 6 Rule 9 (5) of the Court of Appeal Rules, 2002. The Appellant, who was defendant/applicant in the court below filed a motion on notice dated 1st October, 2001 praying the court for three reliefs as follows:-
1. An order of court that the plaintiffs/respondents are estopped by their conduct from taking any further steps in the prosecution of this case.
2. An order of court that this case has been settled out of court by payment of the sum of N6m to plaintiffs/respondents by the defendant/applicant since December, 1998.
3. An order closing this case having been fully settled by the parties.
The grounds which the application was anchored were:
(a) That the equitable doctrine of estoppel preclude the plaintiffs/respondents from re-opening and/or continuing with the trial of the case
(b) That the plaintiffs were paid the sum of N6m by the defendant in December, 1998 in full and final settlement of this case including ancillary case in suit NO.HCS/14/98.
In order to fully understand the circumstance leading to the above prayers vis-a-vis the ruling of the learned trial judge being appealed against, let me state the facts of the case leading to this application.
On 2nd February, 1994, the respondents who were plaintiffs in the court below took out a writ of summons against the appellant who was defendant. Pleadings were filed and exchanged. And in a further amended statement of claim dated 14th April 1997, the respondents claimed as follows:
“Whereof the plaintiffs claim the sum of N118,681,425.00 (one hundred and eighteen million, six hundred and eighty-one thousand, four hundred and twenty five naira) as special and general damages for the injurious activities of the Defendant company causing damages to the Plaintiffs whereof he is losing money from his poultry, fish and crops farm in the estate and the building structures are under threat of collapse”.
The appellant had filed her statement of defence denying liability. Hearing commenced and the plaintiffs called witnesses and closed their case. The defendant called some witnesses and had difficulties in bringing some of her witnesses to court. While the matter was still pending, the parties entered into negotiation for an out of court settlement.
In the process, Hon. Justice O. Sodipo was transferred and the case went to two other judges who could not hear the case before they retired. The case was transferred back to the Learned Justice Sodipo to continue from where he had stopped. When the case was called on 26/11/2002, the court’s attention was drawn to this application filed by the defendant since 12th October, 2001 which had not been heard. The learned trial judge then ordered that the motion be moved. Since it is the ruling on the application that is being appealed against; I wish to also set out the facts on the affidavit in support of the application. Although the affidavit is a bit lengthy, it is necessary to set it out as it is.
AFFIDAVIT IN SUPPORT OF MOTION
I, Segun Owolabi, Adult, Male, Christian, Nigerian of 29 Marina, Lagos do hereby made oath and state as follows:-
1. That I am the litigation clerk in the law firm of Messrs Odujirin & Adefulu, Solicitors to the defendant/applicant herein by virtue of which I am familiar with the facts of this suit.
2. That I have the authority of the defendant/applicant and my employer to depose to this affidavit
3. That I am informed by Prince Adeyemi Adefulu, counsel having conduct of this case and I verily believe him that:
(a) The plaintiff/respondent’s counsel negotiated and settled this case out of court with the defendant’s company without the presence of the defendant/applicant’s counsel.
(b) Upon the defendant/applicant informing its counsel that the parties have settled and further instructed that a machinery for filing the terms of settlement with the plaintiffs/respondents be put in place, the defendant’s counsel wrote a letter dated 6th October, 1998 to the plaintiffs counsel and the plaintiffs counsel replied by a letter dated 16th October, 1998 by attaching a draft terms of settlement. The said letters are herewith attached and marked Exhibit “AS3”.
(c) That the defendant disagreed with the draft terms of settlement sent by the plaintiffs counsel through Exhibit “AS3” and consequently wrote a letter dated 29th October 1998 amending the said terms of settlement to the plaintiffs counsel. The said letter is herewith attached and marked Exhibit “AS4”.
4. That the counsel further informed me and I verily believe him that by a fax dated 8th December, 1998 and a letter dated 1st of December, 1998, the plaintiffs counsel requested the defendant/applicant to issue the cheque of N6m in the name of the law firm of Oladipo Ashiru & Co. the said fax and letter are hereby attached and marked Exhibit “BA2”.
(a) That upon receiving Exhibits BS2, the defendant’s counsel wrote the defendant by a letter dated 9th December, 1998 and the defendant by a letter dated 24th December, 1998, sent a cheque of N6m to the Plaintiffs/Respondent’s counsel. Copies of the said letters and photocopy of the cheque are herewith attached and marked Exhibit “CS2”.
(b) That the defendant/applicant copied its counsel the said letter of 24th December, 1998 and the defendant’s counsel replied by a letter dated 6th January, 1999 and there was also a reply dated 4th March 1999 by the defendant/applicant. The said letters are herewith attached and marked Exhibit “DS2”.
(c) That with the process of paying the agreed money to the plaintiff, the parties executed terms of settlement herewith Exhibited as “ES1”
(d)That based on the instructions of the defendant/applicant to its counsel, the defendant’s counsel forwarded an ancillary terms of settlement already signed by the defendants and their counsel to the plaintiff/respondent’s counsel for onward signatures and filing at the High Court by a letter dated 8th March, 1999 but the plaintiffs counsel rather than sign the ancillary terms of settlement wrote a letter dated 18th March, 1999 to the defendant’s counsel. The said letters are herewith marked Exhibit “ES2”.
(e) That upon receipt of the letter dated 18th March, 1999 from the plaintiffs counsel, the defendant’s counsel wrote a letter dated 30th March, 1999 to the defendant intimating the defendant of the plaintiffs refusal to sign the said ancillary terms of settlement. The letter dated 30th March, 1999 is herewith attached and marked Exhibit “F1”.
5. That by letter dated 20th November, 1998 and that of 18th March, 1999 it is not certain the actual person the plaintiffs counsel allegedly sent the signed copies of the ancillary terms of settlement. The said letters are hereby attached and marked Exhibit “GS2”.
6. That the terms of settlement reached by the parties necessitate the payment of the sum of N6m to the plaintiffs counsel as shown in Exhibit CS2 above.
7. That the plaintiffs refused to abide by the terms of settlement by their continued prosecution of the ancillary case in suit NO.HCS/14/98.
8. That when the plaintiffs counsel refused to withdraw the above ancillary case and/or withdraw the terms of settlement as agreed, the company secretary of the defendant wrote a letter dated 17th December, 1999 to the plaintiffs counsel. The said letter is herewith attached and marked Exhibit “IS2”.
9. That consequently, the plaintiffs counsel replied the company secretary of the defendant company by a letter dated 3rd January, 2000 accepting the payment and receipt of the W6m as full and final settlement of this case. The said letter is herewith attached and marked Exhibit “JS3”.
10. That this case has been fully settled by the parties and in consequence of which the plaintiff received and was paid the sum of N6m thereof and including the said ancillary case.
11.
12.
13.
14.
15. That I swear to this affidavit in good faith.
Signed
Deponent
A counter affidavit dated 13th September 2002 and filed the same date was deposed to by the 1st plaintiff/respondent. Let me reproduce the counter affidavit as it is short.
COUNTER AFFIDAVIT
I, David Kehinde Oduntan, Nigerian, Managing Director of D.K Oduntan Nigeria Enterprises Limited, alias AWOSAN FARMS of Sotubo Village make oath and say as follows:-
1. That I am the plaintiff/respondent in this suit and I have the authority and consent of the 2nd plaintiff/respondent to swear to this affidavit.
2. That I deny paragraphs 3(a), 3(b), 4(c) and paragraphs 6, 7, 8, 9, 10, 11, 12, 13 and 14 of the affidavit in support.
3. That although at a stage during the proceedings there was a move to settle, the parties have never agreed as to any terms of settlement in respect of this suit.
4. That the defendants merely paid money for consultancy and litigation expenses and nothing on damages.
5. That the suit has not yet been settled out of court.
6. That the plaintiffs have already called 14 witnesses while the defendant has called 5 witnesses.
7. That it will be in the interest of justice for this honourable court to hear this case to conclusion.
8. That I swear to this affidavit in good faith believing the same to be true.
Signed: D.K Oduntan
Deponent
After hearing argument from both counsel, the learned trial judge adjourned for ruling and on 21st January, 2003, dismissed the defendant’s application. The defendant/applicant not being satisfied with the said ruling has appealed to this court. With the leave of this court dated 4th March, 2003, the appellant gave notice of appeal which also contained two grounds of appeal.
From the two grounds of appeal, the appellant in his brief of argument dated 4th March, 2005 distilled one issue for determination by this court.
This issue states:-
“Whether the fully signed and executed Terms of Settlement dated 20th November, 1998 filed at the Abeokuta High Court Registry on 7th January, 2003 constitutes a binding contract between the parties which the trial court is obliged to enforce.
The Respondent, on receipt of Appellant’s brief of argument, filed the Respondent’s brief on 21st September, 2005 wherein two issues were formulated for consideration. These are:-
(1) Whether there is a competent appeal before this court since the proceeding upon which the purported appeal is hinged upon has become abated and the hearing to commence de novo.
ALTERNATIVELY
(2) Whether the trial judge was correct in dismissing the application dated 12th October 2001 in the absence of a Term of Settlement duly executed by the plaintiffs and defendant and filed in the court.
In arguing the lone issue formulated for consideration, the learned counsel for the appellant submitted that the following principles, amongst others, should guide the court in determining the issue. These are:-
(i) That parties are free to enter into agreements which they deem necessary to effect their desires.
(ii) That such agreements once entered are binding on the parties to the contract.
(iii) That courts cannot make contracts for parties
(iv) That the duty of court is to fully interpret the contract document(s) so as to fully carry out the manifest intention of the parties as disclosed by the agreement.
(v) That documents speak for themselves.
(vi) That a party is presumed to have intended what he in fact said in a document so that the words therein must be construed as they stand.
Learned counsel further submitted that where a contract is reduced to writing, the terms of such a contract are to be deduced from the written agreement and that such should be used to construe the terms of Agreement. He cited the case of Orient Bank Nigeria Plc. v. Bilante Int’l Ltd (1997) 8 NWLR of 515 0.37.
Furthermore, that the execution of the terms of settlement dated 20th March, 1998 created an entirely new contract between the parties. That a compromise had come into place with all its rights and obligations enforceable in law. He referred to these two cases viz:-
I. CBN v. Beckiti Construction Ltd. (1998) 6 NWLR of 553 p.238 at 240
2. R.E.A.N LTD v. Aswani ile Industry (1991) 2 NWLR pt 176, p.639 at 664.
On the right of parties to settle dispute out-of-court and the effect of such settlement on pending proceedings, the learned counsel referred to the case of Obayiuwana v Ede (1998) 1 NWLR of 535 p.670 at 672.
Learned counsel further submits that litigation expenses and consultancy fees were never part of the Respondent’s claim and that the appellant had no business or obligation settling such expenses were it not for the settlement entered into by the parties. Moreover, that as this was a properly and fully executed terms of settlement embodying the Terms of Settlement upon which settlement was reached, the trial court was obliged to have acted on it as parties are bound by their said agreement. He cited the case of Idakwo v. Ilona (1998) 3 NWLR pt 541 P 315 at 318.
Learned counsel also submitted that since the respondents have not pleaded non est factum or fraud, misrepresentation, intimidation, illegality or want of due execution, the court should give effect to the terms of settlement filed. He cited these cases.
1. Ugbomor v. Hademeh (1997) 9 NWLR pt 520 P 307 at 313 ratio 12
2. Allied Bank of Nigeria Ltd v. Akubeze (1997) 6 N WLR P t 509 p.374 at 385
3. UBN Ltd v. Ozizi (1994) 3 NWLR pt 333 p.385.
4. Opigo v. Yukwe (1997) 6 NWLR pt 509 p.428 at 431.
5. Section 132 (1) of Evidence Act.
The learned counsel for appellant urged the court to resolve this issue in favour of the appellant and set aside the ruling of the Hon. Justice O. Osidipe dated 21/1/2003.
In a very short argument on the first issue formulated in the respondent’s brief of argument, the learned counsel for the respondent submits as follows in paragraph 5.1:-
“The respondents will submit that where a case is part heard by a judge and it is later taken to another judge, such a case cannot be continued by the new judge but it is to be heard de novo. When a matter is heard de novo any action done or proceeding taken by or before the former judge becomes abated. FBN PLC v. Tsokwa (2004) 5 NWLR pt 866, 271 at 306”.
That was the entire argument for the 1st issue.
On the alternative issue, he submitted that there was no settlement of the matter before the trial court as the requirement for consent judgment has not been met. As to what constitutes consent judgment, he referred to the case of F.M.B v. CBA Ltd (2002) 20 WRN p.180 at 190.
He urged the court to dismiss the appeal. The issues raised by both the appellant and respondent are similar and I intend to resolve them together.
It is trite that parties to an action which is pending in court are entitled to compromise or settle their dispute on whatever terms they may agree at any time or stage of the proceedings. Although it is desirable to inform the court where the matter is pending of the intended settlement, it is not a requirement of the law before such out-of-court settlement can be effected. Where parties, in the circumstance, are able to successfully and amiably resolve the issue in dispute, the implication is that the compromise or settlement thus reached constitutes a new and an independent agreement. See Obayiuwana v. Ede (1998) 1 NWLR (pt 535) p.670.
This new agreement or put it the other way, this compromise is an arrangement by the parties as a way of settling a dispute, such dispute whether before the court or not. The import of this compromise is the concession on both sides to avoid the necessity of determining liability under the original claim before the court. In this arrangement, the plaintiff would have to forego part of his claim while the defendant would meet part of the total claim against him or as the parties may wish to settle their matter. See CBN v. Beckiti Const. Ltd. (1998) 6 NWLR (pt 553), 238
The effect of this new compromise agreement is that a new contractual relationship has been created thus putting an end to the proceedings which have been compromised or settled having been brought to an abrupt demise. It also has the effect of precluding parties from taking any further steps in the matter and it supercedes the original cause of action completely.
See Obayiuwana v. Ede (supra).
In the instant case, Exhibits AS3, AS4, BS2, CS2. DS2, ES2, F1, GS2, IS2, JS3, are correspondences between counsel for the appellants and the respondents all pointing to an out-of-court settlement of the plaintiff/respondent’s claim against the appellant. The correspondences i.e. the Exhibits culminated in the drafting and signing of Exhibit ESI which is headed “TERMS OF SETTLEMET” dated 20th November, 1998. Because of the eminent position which this exhibit occupies in this case, I hereby reproduce it hereunder:-
“TERMS OF SETTLEMENT
The parties in this suit have agreed to settle the dispute on the suit herein in the following terms:-
(1) The defendant totally denies liability for the plaintiffs claim but has agreed to settle, as a mark of good faith and in the interest of peace and good neighbourliness.
(2) The defendant shall pay to the plaintiffs and the plaintiff shall receive from the defendant the sum of N6,000,000.00 (Six Million Naira) to cover litigation expenses and other consultancy fees plaintiffs may have incurred in this matter in full and final settlement of plaintiffs claim in this suit.
(3) Each party shall bear his or its cost of this action.
(4) These terms shall be the judgment of the court.
Dated this 20th day of November, 1998.
Signed
Mr. David Kehinde Oduntan
(1st plaintiff)
Signed
D. K Oduntan Ent. Ltd
(2nd Plaintiff)
Signed
West African Portland Cement
(Defendant)
Signed
Oladipo Ashiru & Co.
(Plaintiffs Counsel)
Signed
Messrs Odujinrin & Adefulu
(Defendant’s Solicitors)”
The said terms of settlement was filed in the Registry of the court below on 17/1/2003 as contained on page 45 of the record of appeal. From the above terms of settlement and having regard to the many correspondences leading to the said compromise agreement, there is no modicum of doubt that the parties had settled this matter out of court particularly also the admission of the Respondents that they accepted and actually received the sum of N6m from the appellants which sum is that agreed upon under the said terms of settlement. The very moment which the respondent agreed on an out-of-court settlement and accepted the N6m offered by the appellant they compromised their cause of action. They can no longer pursue that claim as it no longer exists. The respondents were duty bound to inform the trial court of what had happened and not to mislead the court. At the moment the compromise agreement was reached, the original suit got extinct and the trial court lacked the jurisdiction to continue with the said suit.
The respondents have not denied the terms of settlement but assert that the N6m was not in full and final settlement of the claim but for litigation and consultancy expenses. Moreso, that the terms of settlement was not filed in court and made the judgment of the court. On the terms of settlement, the learned judge had this to say:-
“The defendants have produced the photocopy of a document called Terms of settlement which is dated 20th November, 1998 and signed by the parties and solicitors. However, the plaintiffs claim not to be aware of this agreement or terms as they do not have a copy and as such demanded for the true copy of the terms of settlement. It is however clear from Exhibit ES2 that the original of the Terms of Settlement are with the defendants who claimed that Exhibit ES1 is a counterpart…The mere fact of the payment of N6m would not amount to the final settlement of the plaintiffs claim in this matter” (see p.50 of the record).
It is worthy of note that the learned trial judge found as a fact that all the parties and their solicitors signed the said terms of settlement. Apart from the finding of fact by the learned trial judge, counsel to the respondents in a letter dated 20th November, 1998 and addressed to counsel to the appellants stated emphatically that the plaintiff had indeed signed the terms of settlement. That letter is Exhibit GS2. The letter has as its contents the following:-
“20th November, 1998
Odujinrin & Adefulu & Co.,
Church House (1st Floor)
29 Marina Lagos.
Dear Sir,
RE: TERMS OF SETTLEMENT
Kindly find returned to you the Terms of Settlement sent to us by you which our clients with much persuasion had signed and it is now left for your side to sign same.
You will do well to send the cheque for the N6,000,000.00 (Six Million Naira) with the signed copies for filing through the Sagamu Works General Manager.
Thanks,
Yours sincerely,
Signed
Oladipo Ashiru & Co.”
I am surprised that the Respondents after admitting that they signed the terms of settlement and took benefit from its contents have turned round to deny the said document. They have neither pleaded non est factum nor have they pleaded fraud, misrepresentation, illegality or want of due execution. It is trite that when a document containing contractual terms is signed then in the absence of fraud or misrepresentation, the party signing it is bound and it is wholly immaterial whether he has read the document or not. See Ugbomor v. Hadomeh (1997) 9 NWLR (pt 520) p.307, Allied Bank Nig. Ltd. v. Akubeze (1997) 6 NWLR (pt 509) p.374.
In the said terms of settlement, the N6m was “to cover litigation expenses and other consultancy fees plaintiff may have incurred in this matter in full and final settlement of plaintiffs claim in this suit” (underlining mine).
The general rule in this type of situation is that where parties to an agreement have embodied the terms of their contract in a written document as in this case, extrinsic evidence is not admissible to add to, vary, subtract from or contradict the terms of the written instrument. See Opigo v. Yukwe (1997) 6 NWLR (pt 509) 428, UBN v. Ozigi (1994) 3 NWLR (pt 333) p.385, see also Section 132 of the Evidence Act. The argument of the respondents that the N6m was meant for litigation and consultancy fees only and had nothing to do with the main claim lacks in merit. They cannot pick and choose what clause of the document they would obey. The Six Million Naira (N6,000,000.00) was to be in full and trial settlement of the plaintiffs claim in this suit. This is very unambiguous and does not need any mechanical interpretation to discover the intention of the parties therein. It was the view of the Supreme court in UBN v Ozigi (supra) at 404 paragraph B-C that:-
“The general rule is that where the words of any instrument are free from ambiguity in themselves, and where the circumstance of the case have not created any doubt or difficulty as to the proper application of the words to claimants under the instrument or the subject matter to which the instrument relates, such an instrument is always to be construed according to its strict, plain and the common meaning of the words themselves”.
I need not say more on this. I had earlier stated that at the moment the respondents accepted the N6m offered by the appellant, a fresh and binding contract of compromise had been reached. In my opinion, there is nothing left in the old suit to be tried same having been extinguished. As it stands, the new contract has been performed, the said N6m having been paid and received.
Let me add that even if Exhibit ES1 was not found but the parties have admitted signing it as in this case, this court would still uphold the agreement. This is so because an acceptance of an offer may be demonstrated by the conduct of the parties or by their words or by documents that have passed between them. In R.E.A.N Ltd, v. Aswani ile Ind. (1991) 2 NWLR (pt.176) p. 639 at 66 B-F Tobi JCA (as he then was) held as follows:-
“A compromise which is founded in the law of contract, does not stand on rhetorics but on the well settled principles of contract with its tap roots on the collateral act of forbearance. A forbearing conduct which subsequently reopens into a compromise could be in writing. It could also be made orally or by parol … There are however instances when in the interest of justice and fair play, a court of law can infer the existence of a fore-bearing conduct which has developed into a compromise. One of such instances is when the forbearance wants to take advantage of his own forbearing conduct with a view to overreaching his opponent who is already the victim of the forbearing conduct. In such a situation, a court of law as a court of equity is entitled to invoke the well established principles of estoppel by conduct”.
Where a man conducts himself in a manner such that a reasonable man would take his conduct to mean a certain representation of facts and that it was a true representation, and that the later was intended to act upon it in a particular way and he with such belief, does act in that way to his detriment, the first is estopped from denying the facts as represented. See Nassar & Sons (Nig) Ltd. v L.E.D.B (1959) 4 FSC 242 and Horicon Ltd. v. Emenike Wasurum (1987) 4 NWLR (pt 66) 646. In the instant case, the Respondents having led the appellants to part with the sum of N6m which was not part of the claim before the court but being part of a new agreement and having received the said amount in full and final settlement of the claim before the court, is estoppel from continuing with the suit which I have adjudged extinct and the learned trial judge devoid of any trace of jurisdiction. The question of suit No. HSC/24/94 starting de novo does not also arise since it is wrong to have held that there was no terms of settlement when there was clear evidence before him that the respondents received N6m arising from the said terms of settlement. There was also evidence as per Exhibit F1 that the respondents, after receiving the N6m failed to release the original of the terms of settlement for filing. This, the learned judge failed to consider. I need to condemn the attitude of both the respondents and their counsel in the handling of this matter. Counsel ought to have advised the respondents that it is unethical to continue with the suit after taking N6m from the appellants. Alternatively, counsel ought to have informed the court of the true situation since he owes his duties not only to his client but also to the court. This profession is a noble one and persons involved in it must show utmost reverence, canduor and respect. I need not say more believing that this advice is well taken. On the whole the lone issue formulated by the appellant and by the respondents are hereby resolved in favour of the appellant.
Accordingly, I find this appeal meritorious and is hereby allowed. The ruling of the learned trial judge dated 21st January, 2003 is hereby set aside.
I award costs in favour of the appellant which I assess at N5,000.00
Other Citations: (2007)LCN/2290(CA)
