ECOSOLAR INTL LTD & ANOR v. RIVERBANK CAPITAL LTD (2020)

ECOSOLAR INTL LTD & ANOR v. RIVERBANK CAPITAL LTD

(2020)LCN/14047CA)

In The Court Of Appeal

(LAGOS JUDICIAL DIVISION)

On Wednesday, March 25, 2020

CA/L/447/2016

Before Our Lordships:

Mohammed Lawal Garba Justice of the Court of Appeal

Ugochukwu Anthony Ogakwu Justice of the Court of Appeal

Jamilu Yammama Tukur Justice of the Court of Appeal

Between

1. ECOSOLAR INTERNATIONAL LIMITED 2. ARAFAT YINKA BALOGUN APPELANT(S)

And

RIVERBANK CAPITAL LIMITED RESPONDENT(S)

RATIO

WHETHER OR NOT THE CAUSE OF ACTION AS ENDORSED ON THE WRIT OF SUMMONS, DETERMINES THE PROPER PARTIES BEFORE THE COURT

It is settled law that it is the cause of action as endorsed on the writ of summons that determines the proper parties before the Court. Put differently, it is the subject matter of the action that determines who the proper parties are. See CARLEN (NIG) LTD vs. UNIJOS (1994) LPELR (832) 1 at 50, OKOYE vs. NCFC (1991) 6 NWLR (PT 199) 501, AFOLAYAN vs. OGUNRINDE (1990) 1 NWLR (PT 127) 359, BAKARE vs. AJOSE-ADEOGUN (2014) LPELR (25024) 1 at 47 and BELLO vs. INEC (2010) LPELR (767) 1 at 75. PER OGAKWU, J.C.A.

CONCEPT OF LIFTING THE VEIL OF A COMPANY

In FAIRLINE PHARMACEUTICAL INDUSTRY LTD vs. TRUST ADJUSTERS NIG LTD (2012) LPELR (20860) 1 at 31-32 this Court held:
“The BLACK’s LAW DICTIONARY; 8th Edition; defines an alter ego at page 89 thus: ‘A corporation used by an individual in conducting personal business, the result being that a Court may impose liability on the individual by piercing the corporate veil when fraud has been perpetrated in someone dealing with the corporation.’ It proceeds to state that, the doctrine that shareholders will be treated as the owners of a corporation’s property, or as the real parties in interest, whenever it is necessary to do so to prevent fraud or to do justice, is the back bone of the alter-ego rule. It therefore means that, where the director can be treated as the directing mind and will of the company, and therefore the alter ego of the company, the corporate veil of the company may be lifted or pierced. In other words, the corporate veil of a company may be lifted or pierced so as to find out the real person behind the fraudulent and improper act perpetuated by the company. This will be done where the canopy of legal entity is being used to defeat justice or justify wrong, or perpetuate and protect fraud, or cause injustice to the other party to the contract. See CHINWO v. OWHONDA (2008) 3 NWLR (Pt. 1074) Pg. 341 and VIBELKO (NIG.) LTD v. N.D.I.C. (2006) 12 N.W.L.R. (Pt. 994) Pg. 280. See also PUBLIC FINANCE SECURITIES LTD. v. JEFIA (1998) 3 NWLR (Pt. 543) Pg. 602 at 614.” PER OGAKWU, J.C.A.

DOCTRINE OF PRIVITY OF CONTRACT

Now, as a general principle of law based on the doctrine of privity of contract, a contract, cannot as a general rule confer rights or impose obligations under it on any person, except the parties to it. In aliis verbis, only parties to a contract can sue or be sued on the contract: MAKWE vs. NWUKOR (2001) 14 NWLR (PT 733) 356, IDUFUEKO vs. PFIZER PRODUCTS LTD (2014) 12 NWLR (PT 1420) 96 at 101, REBOLD INDUSTIRES LTD vs. MAGREOLA (2015) 8 NWLR (PT 1461) 201 and A-G FEDERATION vs. A. I. C. LTD (2000) 4 WRN 96 at 103. PER OGAKWU, J.C.A.

THE PRINCIPLE THAT WORDS NOT CONTAINED IN A CONTRACT CANNOT BE READ INTO THE CONTRACT

It was opined that words not contained in a contract cannot be read into the contract and that a Court cannot rewrite the contract as the contents of the Memorandum of Understanding cannot be varied, contradicted, altered or added to by oral evidence. The cases of U.B.N. vs. OZIGI (1994) 3 NWLR (PT 333) 385 at 404, GWANI vs. EBULE (1990) 5 NWLR (PT 149) 201 at 215, BABA vs. NIGERIA CIVIL AVIATION, ZARIA (1991) 5 NWLR (PT 192) 388 and EVBUOMWAN vs. ELEMA (1994) 6 NWLR (PT 353) 638 were relied upon. PER OGAKWU, J.C.A.

WHETHER OR NOT DAMAGES FOLLOW WHERE A BREACH OF CONTRACT IS ESTABLISHED

In other words, where a breach of contract is established, whether intentionally or otherwise, damages follow: N.I.P.C. vs. THE THOMPSON ORGANISATION (1969) LPELR (25547) 1 at 29 and BILANTE INT’L LTD vs. NDIC (2011) LPELR (781) 1 at 31.
In DANTATA vs. MOHAMMED (2000) LPELR (925) 1 at 18, Ayoola, JSC adopted the statement of law on the remedies for breach of contract stated in Treitel’s Law of Contract, 5th Ed. at page 772-773 that:
“A party who has wholly or in part performed his side of the contract and not received the agreed counter-performance in full may sometimes be entitled to restitution in respect of his own performance. Where this consists of a payment of money, the payor will simply seek to get it back; where it consists of some other benefits he will claim recompense (or a quantum meruit) in respect of it.”
See also OLAOPA vs. O.A.U. (supra) at 23-24, NEKA B.B.B. MANUFACTURING LTD vs. ACB LTD (2004) LPELR (1982 ) 1 at 39-40 and KAYDEE VENTURES LTD vs. THE HON. MINISTER, FCT (2010) LPELR (1681) 1 at 52. PER OGAKWU, J.C.A.

UGOCHUKWU ANTHONY OGAKWU, J.C.A. (Delivering the Leading Judgment): This appeal is a fallout from the Memorandum of Understanding entered into between the 1st Appellant and the Respondent to engage in mutually beneficial business relationships. They did engage in a business relationship, but it was not beneficial. Instead of reaping the anticipated profits, they reaped losses and litigation. They did not smile to the bank; they headed to the Court. The Respondent as Claimant before the High Court of Lagos State instituted proceedings in SUIT NO. LD/1888/2011: RIVERBANK CAPITAL LTD vs. ECOSOLAR INTERNATIONAL LTD & ANOR. It claimed the following reliefs:
“1. A declaration that the 2nd defendant who is the alter ego of the 1st Defendant is personally liable for the debt of the 1st Defendant standing to the tune of N43, 860.000.00.
2. An order directing the Defendants to pay the sum of N43,860,000 being the outstanding indebtedness to the Claimant in respect of the Clearing Agent Logistics Fees and failure of the Defendants to supply the product.
3. Interest on the sum of N43, 860,000 at the rate of 21% from

29 April 2010 to the date of the judgment and thereafter at the rate of 10% per annum until the entire judgment debt is paid.
4. Cost of this action on a full indemnity basis including, but not limited to, the cost incurred by the Claimant in issuing these proceedings.”

The Appellants filed a counterclaim and claimed the following reliefs:
“1. The sum of N16m being the sum invested by the 1st Defendant on the transaction which was lost due to the failure of the Claimant to fulfil its obligation of validating the contract under the MOU.
2. Interest of 21% per annum on the said sum from the date of judgment until the entire judgment sum is paid.”

The matter was subjected to a full dressed hearing where the parties adduced testimonial and documentary evidence. The lower Court entered judgment in favour of the Respondent. The Appellants were dissatisfied with the said judgment and they appealed against the same. The judgment of the lower Court which was delivered on 13th January 2016 is at pages 274-294 of the Records, while the Notice of Appeal which was filed on 4th March 2016 is at pages 295-299 of the Records.<br< p=”” style=”box-sizing: inherit; margin: 0px; padding: 0px;”>

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Upon the compilation and transmission of the Records of Appeal, the parties filed and exchanged briefs of argument. There is the Appellants’ Brief of Argument filed on 3rd June 2016. The Amended Respondent’s Brief of Argument filed on 29th October 2019. The Appellants’ Reply Brief filed on 5th November 2019 and the Supplementary Respondent’s Brief filed on 6th November 2019. The Amended Respondent’s Brief, the Reply Brief and the Supplementary Respondent’s Brief were all deemed as properly filed on 23rd January 2020. At the hearing of the appeal, the learned counsel for the parties urged the Court to uphold their respective submissions in the determination of the appeal.

Order 19 of the Court of Appeal Rules, 2016 provides for filing of briefs of argument. It provides for three categories of briefs, namely: Appellants’ Brief (Order 19 Rule 2); Respondent’s Brief (Order 19 Rule 4) and Reply Brief (Order 19 Rule 5). The filing of briefs of argument closes with the Reply Brief. The filing of a Supplementary Respondent’s Brief after the Appellant has filed a Reply Brief is unknown to our adjectival law.

In the circumstances, the Supplementary Respondent’s Brief is hereby struck out for being incompetent.
Order 19 Rule 5 (1) stipulates that the purpose of a reply brief is to deal with all new points arising from the Respondent’s Brief. The Appellants in their Reply Brief raised as a preliminary point, the issue that the NBA seal affixed to the Amended Respondent’s Brief has expired and that in consequences the said brief was not properly before the Court. Now, this is definitely not the proper function and purpose of a Reply Brief. There is no point arising from the Respondent’s Brief where the Respondent proffered any submissions on NBA seal. If the Appellant felt strongly about the consequences of the expired NBA seal having been affixed to the Respondent’s Brief, they should have made the proper application in that regard and not by raising the same as a preliminary point in the Reply Brief. The said preliminary point raised in the Reply Brief will therefore be discountenanced. SeeGOODWILL & TRUST INVESTMENT LTD vs. WITT & BUSH LTD (2011) LPELR (1333) 1 at 28, AKAYEPE vs. AKAYEPE (2009) LPELR (326) 1 at 18-19,

MUSCONI LTD vs. ASPINALL (2013) LPELR (20745) 1 at 21-22 and SALIHU vs. WASIU (2016) LPELR (26062) 1 at 14-15.

The Appellants distilled four issues for determination as follows:
“1. Whether or not the Appellants are liable for the non-performance of a contract as a result of the inaction of a 3rd party who was not a party to the contract and whose credibility was validated by the Respondent. (Grounds 1 and 4)
2. Whether or not the 2nd Appellant who was not a party to the contract can be held liable for the non-performance of the contract. (Grounds 2 and 5)
3. Whether or not the Respondent breached the contract by wrongful validation of the risk exposure of the transaction. (Ground 3)
4. Whether or not the trial Court rightly dismissed the counter-claim of the Appellants (Ground 7).”

The Respondent on its part formulated two issues for determination, namely:
“1. Whether, on the evidence on record, the Court below rightly held that the 2nd Appellant who was not a party to the Memorandum of Understanding between the Respondent and 1st Appellant, was a proper party to the suit being the only human face as far

as the transaction with the 1st Appellant was concerned? Grounds 2 and 5
(2) Was the learned trial Judge right to have entered judgment against the Defendants for the sum of N43, 860,00 [sic] comprising the clearing agent logistics fees and the amount expended for the failed MoU transaction and to have dismissed the unproven counter-claim of the Appellants. Ground 1, 3, 4, 6 and 7.”

The issues crafted by the parties, even though they do not correspond in terms of numbers are the same two and tuppence. The Appellants’ issue numbers one, three and four are interrelated and dovetail one into another. Indeed, they can be conveniently taken together. The Respondent’s issue number two encompasses the Appellants’ issue numbers one, three and four. The issue number one nominated by the Respondent is akin to the Appellants’ issue number two. They interrogate the same question of the liability of the 2nd Appellant on the Memorandum of Understanding. In the circumstances, on account of their apt and succinct nature, it is on the basis of two issues, firstly, the Appellants’ issue number two and secondly, the

Respondent’s issue number two; that I will consider the submissions of learned counsel and resolve this appeal.

ISSUE NUMBER ONE
Whether or not the 2nd Appellant who was not a party to the contract can be held liable for the non-performance of the contract.

SUBMISSIONS OF THE APPELLANTS’ COUNSEL
It was submitted that the 2nd Appellant was not a party to the Memorandum of Understanding, Exhibit C1, and that even though the parties were ad idem in their pleadings that the 2nd Appellant was a director and representative of the 1st Appellant, the lower Court held that the 2nd Appellant was neither a director nor shareholder of the 1st Appellant and did not show any authorisation for her to transact business on behalf of the 1st Appellant. It was posited that a person who is not a party to a contract cannot bear any burden of the contract vide CCB LTD vs. NWOKOCHA (1998) 9 NWLR (PT 564) 98 at 118. The lower Court, it was asserted, was wrong to hold that the doctrine of agency and privity of contract were not applicable because the 2nd Appellant was not a director or representative of the 1st Appellant.

SUBMISSIONS OF THE RESPONDENT’S COUNSEL
This issue is argued as Respondent’s issue number one. The Respondent submits that the lower Court was right to have looked beyond the corporate personality facade and rightly held that the 2nd Appellant was personally liable on the contract. The 2nd Appellant, it was stated, was a staff of United Bank for Africa PLC at the material time and used the 1st Appellant as the legal contraption to carry on her private and personal business. The Appellants, it was contended, admitted the Respondent’s averment that it dealt with the 2nd Appellant in her personal capacity and at the same time sought to deny the same in another paragraph of their Statement of Defence. It was contended that this was an improper denial and therefore an admission. The case of EGBUNIKE vs. ACB LTD (1995) 2 NWLR (PT 375) at 34, 55-56 was referred to.

It was opined that virtually all the correspondences on the transaction emanated from the 2nd Appellants official UBA email or Gmail account and that the 2nd Appellant’s email, part of Exhibit C4, was written in the first person singular pronoun to show that the transaction was exclusively

hers. The lower Court, it was maintained, rightly held that the 2nd Appellant was the link and the only human face of the transaction and was therefore a proper party to the case. The Respondent’s averment that the 2nd Appellant was a shareholder and director of the 1st Appellant was said to be at variance with the evidence on record, Exhibit D5, which shows that the 2nd Appellant was a director of a company that she represented on the board of the 1st Appellant. The averments in the pleadings being in conflict with the documentary evidence, the lower Court was said to be right in not acting upon it; and that it was immaterial that the said averments were admitted by the Appellants. The cases of AKPULE vs. AGBEOTU (1999) LPELR 6701 (CA), JIYA vs. AWUMI (2010) LPELR 4358 (CA) and THE STATE vs. AIBANGBEE (2008) 8 NWLR (PT 1037) 517 were relied upon. It was conclusively submitted that the lower Court was correct in finding the 2nd Appellant personally liable on the contract.

APPELLANTS’ REPLY ON LAW
The Appellants submit in the Reply Brief that the evidence is clear that the 1st Appellant was the contracting party and not the 2nd Appellant

and that the agreement binds only the 1st Appellant and Respondent, the parties thereto. It was stated that a company acts through its human agents and that a director or shareholder of a company is not liable for the official acts done on behalf of a company he acts as its agent. The cases of ADEYEMI vs. LAN & BAKER NIG LTD (2000) 7 NWLR (PT 663) 33 and NSIRIM vs. OMUNA CONSTRUCTION COMPANY LTD (1994) 1 NWLR (PT 318) 1 at 23 were cited in support. It was conclusively submitted that an agent is not liable for the acts of a disclosed principal and that a company is distinct from its directors, even though the actions of the directors are the actions of the company. The cases of NIGER PROGRESS LTD vs. N. E. L. CORP. (1989) 3 NWLR (PT 107) 68 at 84, ONU vs. GANI INT’L SERVICES TRADING CO. LTD (2009) 1 NMLR [sic] and BEBEJI OIL ALLIED PROD. LTD vs. PAN COSTA LTD (2007) 31 WRN 163 at 186 were called in aid.

RESOLUTION OF ISSUE NUMBER ONE
In the prolegomenon I set out in précis terms the circumstances that led to this action. It is in the agreement to enter into business relationship between the Respondent and the 1st Appellant. Their

understanding was reduced into a Memorandum of Understanding. The 2nd Appellant signed the Memorandum of Understanding on behalf of the 1st Appellant while Akinyemi Osinubi, the CW1, signed on behalf of the Respondent. The contracting parties are the 1st Appellant and the Respondent. They are artificial persons who have juristic personality. When the business relationship went catawampus and the Respondent resorted to litigation, it joined the 2nd Appellant as a party to the action in her personal capacity. In realisation that the contract was not with the 2nd Appellant in her personal capacity, the Respondent claimed a declaration that the 2nd Appellant is the alter ego of the 1st Appellant and personally liable for the debt owed to it by the 1st Appellant. To attain and establish the personal liability of the 2nd Appellant, it pleaded, inter alia, that the 2nd Appellant is a Director of the 1st Appellant solely for the purpose of pursuing her personal business interest and that the 1st Appellant’s veil of incorporation should be pierced to take away the limited liability protection afforded the 2nd Appellant in order to make her personally liable for

the debt. (See paragraph 5-5.4 of the Statement of Claim on page 4 of the Records).
In considering the personal liability of the 2nd Appellant, the lower Court considered the legal principle on proper parties to an action, lifting the veil of incorporation of a company, applicability of the doctrine of privity of contract and agency. In holding that the 2nd Appellant is a proper party to the action, the lower Court conclusively held that the 2nd Appellant was the only human face of the transaction and so was a proper party to the case. (See pages 284-285 of the Records). It is settled law that it is the cause of action as endorsed on the writ of summons that determines the proper parties before the Court. Put differently, it is the subject matter of the action that determines who the proper parties are. See CARLEN (NIG) LTD vs. UNIJOS (1994) LPELR (832) 1 at 50, OKOYE vs. NCFC (1991) 6 NWLR (PT 199) 501, AFOLAYAN vs. OGUNRINDE (1990) 1 NWLR (PT 127) 359, BAKARE vs. AJOSE-ADEOGUN (2014) LPELR (25024) 1 at 47 and BELLO vs. INEC (2010) LPELR (767) 1 at 75.
I have already stated that at the root of the action is the Memorandum of Understanding entered into

by the 1st Appellant and the Respondent. The Respondent wants the 2nd Appellant to be held personally liable for the debt owed to it by the 1st Appellant and specifically claimed a relief in that regard (see paragraph 35.1 of the Statement of Claim on page 12 of the Records). In the case of GREEN vs. GREEN (1987) LPELR (1338) 1 at 16-17, Oputa, JSC dealing with the classification of parties to an action and the distinction between proper parties, desirable parties and necessary parties, held that proper parties are those who, though not interested in the plaintiff’s claim, are made parties for some good reason. See also F. H. A. vs. OLAYEMI (2017) LPELR (43376) 1 at 41-42. In the diacritical circumstances of this matter, even if arguendo, the 2nd Appellant has no interest in the Memorandum of Understanding between the 1st Appellant and the Respondent, the fact that one of the reliefs claimed is for the 2nd Appellant to be personally liable for the debt owed by the 1st Appellant arising from the said Memorandum of Understanding, is a good reason for the 2nd Appellant to be made a party to the action. In the light of this, the lower Court was correct when

it held that the 2nd Appellant was a proper party to the action. Let me hasten to state that the fact that the 2nd Appellant is a proper party does not willy-nilly connote that she must be personally liable as claimed. Her personal liability would be a function of whether it was proved on the evidence.
The foundation of the Respondent’s contention and claim for the 2nd Appellant to be held personally liable is that the 1st Appellant’s veil of incorporation should be lifted, which when done will reveal as averred in paragraph 5.4 of the Statement of Claim as follows:
“5.4 Given the totality of the circumstances, the Claimant will contend at the trial that in spite of their apparent distinct legal personality, no distinction exist between the 1st Defendant and the 2nd Defendant and therefore this Honourable Court should “pierce the veil of incorporation” in order to take away the limited liability protection afforded the 2nd Defendant by making the 2nd Defendant personally liable for the debt of the 1st Defendant.”
(See page 4 of the Records)
In considering whether the corporate veil of the 1st Appellant

can be lifted, the lower Court after expounding the law conclusively held at page 287 of the Records that:
“There is no allegation of fraud or illegality in the pleadings of [sic] to make the Court lift the corporate veil. In [sic] case, exhibit D5 shows who the Directors of the 1st defendant are. The 2nd defendant is not one of them.
It is my finding that the 2nd defendant cannot be personally liable or made to answer for the acts of the 1st defendant not being a shareholder or Director of the company and for failure to show that there is any fraud or illegality in this transaction. Also no evidence was tendered to show that the 1st defendant is a sham company with no assets except for the bare assertions in the pleadings which were denied.”
So the lower Court declined to lift the veil of incorporation. Instructively, the Respondent did not appeal against this decision of the lower Court. The implication of declining to lift the veil of incorporation is that the veneer of the consequences of incorporation and the separate legal personality of the 1st Appellant remained trenchant.
The grounds of the Respondent’s claim for

the 2nd Appellant to be held personally liable is that the 2nd Appellant is the alter ego of the 1st Appellant. In FAIRLINE PHARMACEUTICAL INDUSTRY LTD vs. TRUST ADJUSTERS NIG LTD (2012) LPELR (20860) 1 at 31-32 this Court held:
“The BLACK’s LAW DICTIONARY; 8th Edition; defines an alter ego at page 89 thus: ‘A corporation used by an individual in conducting personal business, the result being that a Court may impose liability on the individual by piercing the corporate veil when fraud has been perpetrated in someone dealing with the corporation.’ It proceeds to state that, the doctrine that shareholders will be treated as the owners of a corporation’s property, or as the real parties in interest, whenever it is necessary to do so to prevent fraud or to do justice, is the back bone of the alter-ego rule. It therefore means that, where the director can be treated as the directing mind and will of the company, and therefore the alter ego of the company, the corporate veil of the company may be lifted or pierced. In other words, the corporate veil of a company may be lifted or pierced so as to find out the real person behind the

fraudulent and improper act perpetuated by the company. This will be done where the canopy of legal entity is being used to defeat justice or justify wrong, or perpetuate and protect fraud, or cause injustice to the other party to the contract. See CHINWO v. OWHONDA (2008) 3 NWLR (Pt. 1074) Pg. 341 and VIBELKO (NIG.) LTD v. N.D.I.C. (2006) 12 N.W.L.R. (Pt. 994) Pg. 280. See also PUBLIC FINANCE SECURITIES LTD. v. JEFIA (1998) 3 NWLR (Pt. 543) Pg. 602 at 614.”
The lower Court declined to lift the corporate veil so there was no basis on which liability can be imposed on any individual other than the company. See also U. O. O. (NIG) PLC vs. OKAFOR (2016) LPELR (41507) 1 at 41. Indeed, the lower Court expressly held that the 2nd Appellant on the evidence is not a Director of the 1st Appellant, based on Exhibits D5 and D6. The Respondent’s contention that its averment that the 2nd Appellant is a director of the 1st Appellant should be discountenanced for being at variance with the evidence and that the evidence, id est, Exhibits D5 and D6 should be preferred is a role reversal. It is like the tail wagging the dog. The evidence follows the pleadings

and not the pleadings the evidence, except where pleadings are amended to bring them in line with the evidence, so that the evidence will not expunged for not having been pleaded. Evidence which is not in line with the pleadings is what is to be expunged and not for the pleadings to be jettisoned because of evidence at variance with it. The Respondent’s case was that the 2nd Appellant was the alter ego and director of the 1st Appellant and should be held personally liable for the debt owed by the 1st Appellant. The evidence adduced did not so establish. The Respondent succeeds or fails on the basis of the case it made out.
Now, as a general principle of law based on the doctrine of privity of contract, a contract, cannot as a general rule confer rights or impose obligations under it on any person, except the parties to it. In aliis verbis, only parties to a contract can sue or be sued on the contract: MAKWE vs. NWUKOR (2001) 14 NWLR (PT 733) 356, IDUFUEKO vs. PFIZER PRODUCTS LTD (2014) 12 NWLR (PT 1420) 96 at 101, REBOLD INDUSTIRES LTD vs. MAGREOLA (2015) 8 NWLR (PT 1461) 201 and A-G FEDERATION vs. A. I. C. LTD (2000) 4 WRN 96 at 103. The lower

Court after restating this trite principle of law held that it was not applicable (See page 286 of the Records). I am unable to fathom how the principle is inapplicable. The Memorandum of Understanding is between the 1st Appellant and the Respondent. The action was predicated on the said Memorandum of Understanding. The lower Court declined to pierce the corporate veil of the 1st Appellant so it was not open to the Court to look beyond the parties to the Memorandum of Understanding. What is more, the claim before the lower Court is that the 2nd Appellant’s liability is on the basis of being the alter ego of the 1st Appellant. This was the relief claimed which the lower Court was under the bounden duty to adjudicate upon. The lower Court expressly found and held at page 287 of the Records that the 2nd Appellant cannot be personally liable or made to answer for the acts of the 1st Appellant. The relief as framed is that the 2nd Appellant is personally liable for the debt of the 1st Appellant and not personally liable in her own right for the debt owed to the Respondent. It is abecedarian that a Court is not to adjudicate between parties on the basis of a

claim not formulated by them: OSUJI vs. EKEOCHA (2009) LPELR (2016) 1 at 44 & 55 or (2009) 16 NWLR (PT 1166) 81 and EAGLE SUPER PACK (NIGERIA) LTD vs. ACB PLC (2006) 19 NWLR (PT 1013) 20 or (2006) LPELR (980) 1 at 40. The claim formulated by the Respondent is that the 2nd Appellant is personally liable for the debt of the 1st Appellant. The lower Court correctly held that she was not. It was wrong for the lower Court to have proceeded to adjudicate on the basis of a claim not formulated by the Respondent when it conclusively held at page 293 of the Records that:
“The 2nd defendant (Appellant) is personally liable in her own right.”
The epitome of the foregoing is that this issue must be resolved in favour of the Appellants. The 2nd Appellant was not a party to the Memorandum of Understanding and cannot be held liable on the same.

ISSUE NUMBER TWO
Was the learned trial Judge right to have entered judgment against the Defendants for the sum of N43, 860,000.00 comprising the clearing agent logistics fees and the amount expended for the failed MoU transaction and to have dismissed the unproven counterclaim of the Appellants?<br< p=”” style=”box-sizing: inherit; margin: 0px; padding: 0px;”>

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SUBMISSIONS OF THE APPELLANTS’ COUNSEL
The Appellants argued this issue under their issue numbers one, three and four. The Appellants submit that under the Memorandum of Understanding the 1st Appellant had the duty of nominating a supplier while the Respondent had the duty of validating the risk exposure mechanism of the transaction and that the Respondent failed in its duty, due to its wrongful validation of the risk exposure of the transaction as a result of which the contract was not performed. The lower Court, it was maintained, was wrong when it held that both sides had done what was needed to be done under the agreement and that since the validation of the risk exposure was what led to the failure of the transaction, then the Respondent should bear the consequence of the failure and not the Appellants; as parties are bound by the terms of their contract and that the Respondent cannot benefit from their own wrong. The cases of A. G. FERRERO & CO LTD vs. H. C. NIG LTD (2011) 13 NWLR (PT 1265) 592 at 606 -607, P. A. I. S. C. LTD vs. JKPEEZ IMPEX CO. LTD (2010) 3 NWLR (PT 1182) 441 at 459, BETA GLASS PLC vs. EPACO HOLDINGS LTD (2011) 4 NWLR

(PT 1237) 223 at among other cases were referred to.

The Appellants conclusively submit that the lower Court found that both the 1st Appellant and the Respondent lost money in the transaction and that the 1st Appellant’s loss was due to the wrongful validation of the risk exposure by the Respondent, such that the lower Court ought to have entered judgment in favour of the Appellants on their counterclaim. It was asserted that the email which the lower Court held to be an admission against interest was no more than an appeal by the 2nd Appellant to the supplier on the need to refund the lost money.

SUBMISSIONS OF THE RESPONDENT’S COUNSEL
The Respondent submits that it discharged its duties under the agreement by providing a storage facility, paying its share of the clearing agents logistics fees and also chartering the vessel to take delivery of the product. The Appellants, it was contended, failed in their duties under the agreement as they could not provide the product for ship-to-ship transfer or for storage at the storage tank which the Respondent had arranged for. It was opined that words not contained in a contract cannot be

read into the contract and that a Court cannot rewrite the contract as the contents of the Memorandum of Understanding cannot be varied, contradicted, altered or added to by oral evidence. The cases of U.B.N. vs. OZIGI (1994) 3 NWLR (PT 333) 385 at 404, GWANI vs. EBULE (1990) 5 NWLR (PT 149) 201 at 215, BABA vs. NIGERIA CIVIL AVIATION, ZARIA (1991) 5 NWLR (PT 192) 388 and EVBUOMWAN vs. ELEMA (1994) 6 NWLR (PT 353) 638 were relied upon.

The Respondent conclusively submitted that the lower Court, having found that the Respondent was not in breach of the contract was right not to have countenanced the counterclaim.

APPELLANTS REPLY ON LAW
The Appellants submit in the Reply Brief that they are not asking the Court to re-write the Memorandum of Understanding, Exhibit C1, but only seek for an interpretation of the duties of the Respondent there under. It was posited that the Respondent did not prove that the wrongful act of the Appellants led to a breach of the contract, entitling them to damages vide AHMED vs. CBN (2013) 2 NWLR (PT 1339) 524 at 590.

RESOLUTION OF ISSUE NUMBER TWO
At the heart of this issue are the terms of the contract,

Exhibit C1, between the 1st Appellant and the Respondent and whether the parties duly discharged their duties and obligations thereunder. It is rudimentary law that parties are bound by the terms of their contract and that the said terms should be read as they are without any embellishments. Put differently, terms which are extraneous to the contract and on which there was no agreement cannot be read into the contract. See A-G RIVERS STATE vs. A-G AKWA IBOM STATE (2011) 3 SC 1, OFORISHE vs. NIGERIAN GAS CO. LTD (2017) LPELR (42766) 1 at 10 and BABA vs. NIGERIA CIVIL AVIATION (1991) LPELR (692) 1 at 64.

The lower Court found and held that the following facts were not in dispute in the case. Hear the lower Court at page 281 of the Records:
“Some facts are not in dispute in this case. These are:
1. Two transactions are involved in this case. The first is the logistics fees for procurement of storage facility from Acquitane Oil and Gas Ltd. The second is the transaction relating to 5000 litres of A.G.O. meant to be supplied to Oando Plc.
2. The Memorandum of Understanding Exhibit C1 is the legal document setting out the relationship

between the parties.
3. The 5000 litres of A.G.O. was not made available for delivery to Oando.
4. Prior to and at all times material to the transaction, the 2nd defendant was in the employment of United Bank for Africa Plc.“

These undisputed facts as held by the lower Court have not been confuted. Indeed, they have not been challenged on appeal. This action being one for breach of contract, it is the contract which has allegedly been breached that commands attention in order to ascertain which, if any, of the parties is in breach of the contract.

The transaction which the 1st Appellant and the Respondent were engaged in as rightly held by the lower Court are in respect of logistics fees for procurement of storage facility and the transaction in respect of 5000 metric tonnes of Automotive Gas Oil (AGO) to be supplied to Oando PLC. Now, what are the stipulations of the legal document, the Memorandum of Understanding, Exhibit C1, on the duties and responsibilities of the parties with regard to these transactions? Clause 1 of Exhibit C1, provides for the responsibilities of the parties. It reads:<br< p=”” style=”box-sizing: inherit; margin: 0px; padding: 0px;”>

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“1. RESPONSIBILITIES
RiverBank shall:
(a) use its relationships and contacts to provide access to and fund clearance agent, lighter vessel owners, product storage (tank farm operators), depot representatives and wholesale customers in order to ensure a successful sales & marketing effort;
(b) provide insight and help validate EcoSolar’s risk management framework; and
(c) provide its share of funding for the incurred costs as agreed by the Parties.
EcoSolar shall:
(a) Use its relationship with the importers to ensure access to products, documentation, legal agreements and cargos are delivered on schedule and supply promptly all information as would help RiverBank and its associates in ensuring a successful logistics, sales and marketing efforts;
(b) work with RiverBank on business development activities and execution;
(c) provide its share of funding for the incurred costs as agreed by the Parties.”

The words employed in the above stipulation are clear and unambiguous. In UBN LTD vs. SAX NIGERIA LTD (1994) LPELR (3390) 1 at 18, Adio, JSC stated:
“When a document is clear, the operative words in it should be given

their simple and ordinary grammatical meaning. Further, the general rule is that when the words of any instrument are free from ambiguity in themselves and when the circumstances 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 the strict, plain and common meaning of the words themselves.”
See also BALIOL NIGERIA LTD vs. NAVCON NIGERIA LTD (2010) LPELR (717) 1 at 18-19, ADETOUN OLADEJI (NIG) LTD vs. NIGERIAN BREWERIES PLC (2007) LPELR (160) 1 at 14 and OLATUNDE vs. O.A.U. (1998) LPELR (2575) 1 at 22.

Relative to the two transactions, which the undisputed facts as found by the lower Court disclose, the Respondent had the responsibility, inter alia, to provide funds for clearance agent, storage facilities (tank farms) and lighter vessels to ensure a successful sales and marketing and provide its share of funding for costs. The evidence on record is replete that the Respondent paid the sum of N2million requested by the Appellants as part of the charges for

the clearing agents logistics fees and that the Respondent arranged for storage facility for the product. Furthermore, the Respondent in discharge of its obligations and duties under the Memorandum of Understanding, hired a vessel for the ship-to-ship transfer of the product. It is translucent that the Respondent discharged the responsibilities assigned to it under Exhibit C1.

By Exhibit C1, the 1st Appellant had the duty to ensure access to products in order to ensure the successful logistics, sales and marketing efforts. Once again, relative to the transactions agreed as having been embarked upon by the parties, the 1st Appellant was to ensure access to the products which the clearance agents logistics fees paid would be utilised for, and which would be stored at the storage facility (tank farm) procured by the Respondent. Furthermore, the 1st Appellant was to provide access to the ship carrying the product from which the ship-to-ship transfer will be effected to the vessel which the Respondent provided in discharge of its duties under Exhibit C1.

The unchallenged evidence is that the transactions failed because the importer who the 1st Appellant

relied on to get the product could not deliver. In pungent terms, the 1st Appellant could not fulfil its responsibility under Exhibit C1 of using “its relationship with the importers to ensure access to products.” In Clause C of the Recitals in Exhibit C1, it is stated of the 1st Appellant as follows:
“C. EcoSolar has the mandate from Specroleum Inc of Monaco and Ceedoe Gorup [sic] of Companies to be their partner in bring in [sic] delivering to tank and marketing refined products Cargo for the local market. This would entail mobilizing a lighter vessel for Ship-to-Ship transfers, product and vessel clearance, product storage and marketing to effect the complete sale of the cargo vessel.”

It seems clear from the evidence on record that the 1st Appellant failed in the discharge of its duty, as the companies that it stated that it had their mandate to partner with, did not give access to the products as a result of which the 1st Appellant breached the contract it had with the Respondent. A breach of contract connotes that the party in breach had acted contrary to the terms of the contract either by non-performance or by

performing the contract not in accordance with its terms or by a wrongful repudiation of the contract. A party who had performed the contract in consonance with its terms cannot be said to have been in breach thereof. See PAN BISBILDER (NIGERIA) LTD vs. FIRST BANK OF NIG LTD (2000) LPELR (2900) 1 at 31-32, HAIDO vs. USMAN (2004) 3 NWLR (PT 859) 65 and NWAOLISAH vs. NWABUFOH (2011) LPELR (2115) 1 at 38-39. I iterate that the Respondent, as it relates to the two transactions that they embarked upon performed its responsibilities under the contract in consonance with its terms. It is the 1st Appellant that was not able to perform its responsibilities having failed to discharge its responsibility of ensuring access to the products.

There is no confutation as to the expenses incurred by the Respondent in the discharge of its responsibilities under Exhibit C1, id est, the amount it paid towards the clearing agents, logistics fees and chartering the vessel for the ship-to-ship transfer of the product, which never was, because of the inability of the 1st Appellant to discharge its own part of the deal. Damages follow breach of contract and is payable by the party

responsible for the breach. In other words, where a breach of contract is established, whether intentionally or otherwise, damages follow: N.I.P.C. vs. THE THOMPSON ORGANISATION (1969) LPELR (25547) 1 at 29 and BILANTE INT’L LTD vs. NDIC (2011) LPELR (781) 1 at 31.
In DANTATA vs. MOHAMMED (2000) LPELR (925) 1 at 18, Ayoola, JSC adopted the statement of law on the remedies for breach of contract stated in Treitel’s Law of Contract, 5th Ed. at page 772-773 that:
“A party who has wholly or in part performed his side of the contract and not received the agreed counter-performance in full may sometimes be entitled to restitution in respect of his own performance. Where this consists of a payment of money, the payor will simply seek to get it back; where it consists of some other benefits he will claim recompense (or a quantum meruit) in respect of it.”
See also OLAOPA vs. O.A.U. (supra) at 23-24, NEKA B.B.B. MANUFACTURING LTD vs. ACB LTD (2004) LPELR (1982 ) 1 at 39-40 and KAYDEE VENTURES LTD vs. THE HON. MINISTER, FCT (2010) LPELR (1681) 1 at 52.

The sum of N43, 860,000.00 which the Respondent claimed and established at

the trial as the indebtedness due to it in respect of the transactions has not been challenged on appeal. The lower Court having found that there was a breach of contract rightly held the 1st Appellant liable to refund the Respondent the expenses it incurred in respect of its performance of its responsibilities under Exhibit C1. However, as I have found and held in resolution of issue number one, the lower Court was wrong to hold the 2nd Appellant personally liable in her own right. Indubitably, this issue number two is resolved in favour of the Respondent but only to the extent that it is the 1st Appellant alone that is liable for the sum of N43, 860,000.00 expended by the Respondent on the failed transaction undertaken pursuant to Exhibit C1.

In putting a wrap on this judgment, since issue number one was resolved in favour of the Appellants, the appeal succeeds in part; but the judgment of the lower Court is affirmed save only that it is the 1st Appellant only who is liable to the Respondent on the judgment. The Respondent’s claims against the 2nd Appellant are dismissed. The parties are to bear their respective costs of this appeal.

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MOHAMMED LAWAL GARBA, J.C.A.: I have read a draft of the lead judgement written my learned brother UGOCHUKWU ANTHONY OGAKWU, JCA in this appeal and agree with the views proficiently expressed on the two (2) germane issues which call for decision by the Court in the appeal.

The law is firmly settled that the terms and conditions of an agreement or contract, in whatever Form, freely entered into by the parties bind them alone as parties thereto and do not bind any other person not a party thereto even if the agreement or contract was made for the benefit of that other party. In other words, terms and conditions of an agreement or contract entered into by two (2) contracting parties, do not bind a 3rd party who was/is not a party to the agreement or contract even if the contract confers some benefit on such a party. UBA v. Folarin (2003) 7 NWLR (Pt.818) 18, Abed Brothers Limited v. Niger Insurance Company Limited (1976) NNLR, 1 LDPC vs. Nigeria Land & Sea Ford Company Limited (1992) 2 NWLR (Pt. 244) 653, Anumba v. E.C.B Limited (2005) 10 NWLR (Pt. 933) 321, Alade vs. Alic Nigeria Limited (2010) 19 NWLR (Pt. 1226).

New Rest International Limited vs. Oranusi (2011) 2 NWLR (Pt. 1230) 102. Idufueko vs. Pfizer Product Limited (2014) 12 NWLR (Pt. 1420) 96, Ruthling International Investment Limited vs. Ihebuzor (2016) 11 NWLR (Pt. 104) 409. Since the 2nd Appellant was rightly found not be a party to the MOU between the 1st Appellant and the Respondent because she was neither shown to be a Director nor a shareholder of the 1st Appellant for the corporate veil of the company to be pierced and lifted. she could not in law, rightly be held liable for breach of any of the terms or conditions of the MOU.
On the award of damages against the 1st Appellant, with the proof of the failure by it to perform its own part of the agreement fully and the expenses incurred by the Respondent in the discharge of its own obligations under the MOU and the full performance of the agreement, the Lower Court was right to have made the award of the sum in question, in favour of the Respondent. A party who fails or refuses to perform his own part of a contract after the other party to the contract has fully discharged his obligations under the contract, is guilty of breach of the terms of the contract

which bind him and so is liable in damages for the breach. United Bank for Africa vs. BTL Industry Limited (2006) 19 NWLR (Pt. 1013) 61, A.T.E.C. Limited vs. Military Government Ogun State (2009) 15 NWLR (Pt. 1163) 26. Lagos State Government vs. Toluwase (2013) 1 NWLR (Pt. 1336) 555, Agu vs. General Oil Limited (2015) 17 NWLR (Pt. 1488) 327.

For the above and the reasons set out in the lead judgment, which I adopt. I also enter judgement in all the terms thereof.

JAMILU YAMMAMA TUKUR, J.C.A.: I read in advance a draft copy of the judgment just delivered by my learned brother UGOCHUKWU ANTHONY OGAKWU JCA and I adopt the judgment as mine with nothing further to add.

Appearances:

Peter Olomola, Esq. with him I. C. Uwa, Esq., T. Ologunorisa, Esq., E. Adeyemi, Esq. & O. Edogiawerie, Esq For Appellant(s)

Mrs. C. Godwin-Omoaka For Respondent(s)