EMMANUEL EKANEM JACOB V. AKPADUAK ADUANG AFAHA
(2012)LCN/5238(CA)
In The Court of Appeal of Nigeria
On Tuesday, the 20th day of March, 2012
CA/C/147/2008
RATIO
LAW OF CONTRACT: ON THE DEFINITION OF FRUSTRATION AND EVENTS CONSTITUTING FRUSTRATION
“Frustration is the premature determination of on agreement between parties, lawfully entered into and which is in the cause of operation of the time of its premature determination, owing to the occurrence of on intervening event, or change of circumstances so fundamental as to be regarded by law both as striking of the root of the agreement, and as entirely beyond what was contemplated by the parties when they entered into the agreement NBCI Vs. Standard (Nig) Eng. Co. Ltd (2002) 1 NWLR pt 768 page 104” The underlisted situation or events have been held by the courts of one time or the other to constitute frustrating events namely:
(1) Subsequent legal changes,
(2) outbreak of war,
(3) destruction of the subject matter of the contract;
(4) government requisition of the subject matter of the contract and
(5) the cancellation of on expected event.
The rule is that it is not for the parties, but for the court to state whether and when frustration has occurred, and the court has the power to determine the existence of frustration even where the parties have showed otherwise. PER. UZO I. NDUKWE-ANYANWU, J.C.A
DAMAGES: ON WHOM LIES THE BURDEN OF PROOF OF DAMAGES FOR BREACH OF CONTRACT
The burden of proof of damages for breach of contract is on the Plaintiff. Where his evidence is unchallenged, the burden of proof is discharged upon a minimum of proof. Steyer (Nig) Ltd vs. Gadzama (1995) 7 NWLR pt 407 page 305, Medical and Dental Council of Nig v. System Information Ltd (1998) 12 NWLR pt 572 page 258. PER. UZO I. NDUKWE-ANYANWU, J.C.A
DAMAGES: THE RULE APPLICABLE TO AWARDING DAMAGES IN AN ACTION FOUNDED ON BREACH OF CONTRACT
In awarding damages, in an action founded on breach of contract, the rule to be applied is Restitutio in integrum, that is, in so far as the damages are not too remote, the Plaintiff shall be restored, as for as money can do it, to the position in which he would have been if the breach had not occurred. Okongwu Vs. NNPC (1989) 4 NWLR pt.115 Page 296, Oshin and Oshin Ltd Vs. Livestock Feed Ltd (1997) 2 NWLR pt 486 Page 162, Udeagu Vs. Benue Cement Co. Plc (2006) 2 NWLR pt 965 page 600. PER. UZO I. NDUKWE-ANYANWU, J.C.A
JUSTICES
MOHAMMED LAWAL GARBA Justice of The Court of Appeal of Nigeria
UZO I. NDUKWE-ANYANWU Justice of The Court of Appeal of Nigeria
ISAIAH OLUFEMI AKEJU Justice of The Court of Appeal of Nigeria
Between
EMMANUEL EKANEM JACOB Appellant(s)
AND
AKPADUAK ADUANG AFAHA Respondent(s)
UZO I. NDUKWE-ANYANWU, J.C.A (Delivering the Leading Judgment): This is an appeal against the judgment of the High Court of Akwa Ibom Holden of Eket delivered on 5th February, 2007.
The Appellant as defendant was sued in the High Court of Eket Akwa Ibom State by the Plaintiff /Respondent. The Appellant and the Respondent entered into a contract Exhibit 1. The Respondent bought a motocycle for the sum of N58,000.00. The Respondent went into an agreement with the Appellant to hire out the motorcycle to the Appellant. The Appellant was to carry the Motorcycle and pay to the Respondent of sum of N350.00 everyday for 16 months. The Appellant paid the Respondent the agreed sum of N350.00 from 20th January, 1997 – 25th January, 1997 (6 days).
The payment thereafter ceased and the Respondent could not find the Appellant nor did he pay any other sums to him.
After sometime, the Respondent as plaintiff sued the Defendant/Appellant. In his writ, the Plaintiff/Respondent claimed as follow:
1. An order on the Defendant to return to the Plaintiff. Plaintiff’s Yamaha Motorcycle with registration No. QA 763 KET OR the current market value thereof.
2. An order for payment of hire rents of N350.00 (Three Hundred and Fifty Naira) a day with effect from 26th January, 1997 until judgment.
After a full trial, the trial Judge delivered his considered judgment and held as follows:
1. The defendant shall return the Plaintiffs motorcycle in excellent condition.
Alternatively,
The Defendant shall pay the plaintiff the sum of N95,000.00 (Ninety Five Thousand Naira) the current market price of a new motorcycle.
2. The Defendant shall pay the Plaintiff rent of N350.00 (Three Hundred and Fifty) Naira a day from 26th January, 1997 till today.
3. The defendant shall pay the plaintiff cost of N3,500.00 (Three Thousand Five Hundred Naira).
Being dissatisfied with this judgment, the Appellant filed his notice and 2 Grounds of Appeal. The Appellant filed his Appellant’s Brief on 25th November, 2008 and articulated 2 issues for determination as follows:
1. Whether the learned trial Judge was right to fix the value of the lost motorcycle of N95,000.00 when the purchase invoice tendered by the respondent place the value of same at N58,000.00.
2. Whether the learned trial Judge was right to have ordered the appellant to pay the respondent the sum of N350.00 per day until judgment after having ordered the appellant to return the motorcycle to the respondent or pay the value thereof.
The Respondent filed no brief and as such, the appeal was heard on the Appellant’s brief alone.
ISSUE 1
Whether the learned trial Judge was right to fix the value of the lost motorcycle at N95,000.00 when the purchase invoice tendered by the respondent place the value of same at N58,000.00.
Counsel argued that the hire purchase agreement between the parties collapsed barely one week after it was signed. The Appellant paid for only 6 days when the motor cycle was supposedly stolen. The learned counsel to the Appellant referred the court to Exhibit 2 which was the purchase receipt of the motorcycle which was bought for N58,000.00. Counsel submitted that it was wrong for the trial Judge to make an order for the Appellant to pay N95,000.00 being the current cost of the motor cycle of the time of the suit. Counsel referred the court to Xtoudos Services Nig. Ltd Vs. Taisei (WA) Ltd 2006 ALL FWLR Pt 333 page 1640. Again in the case of A.G. Ferrero & Co Ltd Vs. Nnamani (2006) ALL FWLR pt 339 page 990 where it was held that special damages must be strictly proved. The only proof is shown by the evidence of the purchase receipt tendered as Exhibit 2.
The current value of N95,000.00 therefore fixed by the trial Judge is outrageous and perverse. Counsel urged the court to resolve this issue against the respondent.
The Respondent had bought a motor cycle for N58,000.00 vide Exhibit 1. This motor cycle he gave to the Appellant in which they agreed that the appellant was to pay to the Respondent N350,00 every day for 16 months. The Appellant paid for only 6 days when the motorcycle was purportedly stolen. This event therefore frustrated the contract.
“Frustration is the premature determination of on agreement between parties, lawfully entered into and which is in the cause of operation of the time of its premature determination, owing to the occurrence of on intervening event, or change of circumstances so fundamental as to be regarded by law both as striking of the root of the agreement, and as entirely beyond what was contemplated by the parties when they entered into the agreement NBCI Vs. Standard (Nig) Eng. Co. Ltd (2002) 1 NWLR pt 768 page 104”
The underlisted situation or events have been held by the courts of one time or the other to constitute frustrating events namely:
(1) Subsequent legal changes,
(2) outbreak of war,
(3) destruction of the subject matter of the contract;
(4) government requisition of the subject matter of the contract and
(5) the cancellation of on expected event.
The rule is that it is not for the parties, but for the court to state whether and when frustration has occurred, and the court has the power to determine the existence of frustration even where the parties have showed otherwise.
In the instant case, the Defendant/Appellant alleged frustration that is, that he was drugged by one of his passengers who stole the motorcycle. There was no report of this incident to the police nor the Respondent. The Respondent however contended that such frustration was due to the fault of the Appellant but he the Respondent has to prove such fault. See the case of NBCI Vs. Standard (Nig) Eng. Co. Ltd (supra).
The doctrine of frustration is applicable in all categories of contract. See Aroko Vs. MCC Ltd (1978) 2 LNR 60. However, the rule is that self-induced frustration like in this case is no frustration but a breach of contract. Western Nig Finance Corp Vs. West Coast Builders Ltd 1971 1 U.I.L.R page 93.
One would ask what are the remedies for breach of contract? If one party to a contract is in breach, the other party is entitled to bring on action for damages so as to be placed in the some financial position as if the contractual terms had been duly carried out.
The rule governing the time of assessment of damages is that damages are to be assessed as of the time when the cause of action arose, that is, the date of the breach. However, this is not on absolute rule.
The burden of proof of damages for breach of contract is on the Plaintiff. Where his evidence is unchallenged, the burden of proof is discharged upon a minimum of proof.
Steyer (Nig) Ltd vs. Gadzama (1995) 7 NWLR pt 407 page 305, Medical and Dental Council of Nig v. System Information Ltd (1998) 12 NWLR pt 572 page 258.
In awarding damages, in on action founded on breach of contract, the rule to be applied is Restitutio in integrum, that is, in so far as the damages are not too remote, the Plaintiff shall be restored, as for as money can do it, to the position in which he would have been if the breach had not occurred. Okongwu Vs. NNPC (1989) 4 NWLR pt.115 Page 296, Oshin and Oshin Ltd Vs. Livestock Feed Ltd (1997) 2 NWLR pt 486 Page 162, Udeagu Vs. Benue Cement Co. Plc (2006) 2 NWLR pt 965 page 600.
In the instant case, the cost of the motor cycle was N58,000.00 per Exhibit 1 at the time of the contract. The appellant could only pay for the hire for 6 days. The wear and tear on the motor cycle for 6 days could not have been appreciable. The motorcycle just disappeared in the custody of the Appellant. The Appellant neither reported to the police nor to the Respondent that the motorcycle the subject matter of this contract was stolen.
The appellant had not been totally honest with the whereabouts of the motorcycle. What the law places on the Plaintiff/respondent is the burden of proving that there was a breach of contract. This the Respondent had proved that, the Appellant breached the contract of hire of the motorcycle. Where his evidence is unchallenged, the burden of proof is discharged upon a minimum of proof.
After proving that the Appellant had breached the contract, the respondent is entitled to Restitutio in intergrum. The Respondent is entitled to the cost of the motorcycle as of the time of the breach.
The motorcycle was only used for 6 days from the date of the contract.
The Respondent is therefore entitled to the cost of the motorcycle which is N58,000.00. The first issue is therefore resolved against the Respondent in favour of the Appellant.
ISSUE 2
“Whether the learned trial Judge was right to have ordered appellant to pay respondent the daily hire sum of N350.00 until judgment after having ordered the appellant to return the motorcycle or the value to the respondent.
The learned counsel to the Appellant submitted that the contract of hire purchase between the parties lasted for fess than a week.
Learned counsel argued that the trial Judge ordered that the Appellant pay rent from the date of the loss of the motor cycle till the date of judgment which was 5th February, 2007. Counsel submitted that even of the contract ran smoothly the duration of the contract was for only 16 months. Counsel argued further that since the Respondent had claimed the value of the motorcycle, he cannot also claim for the N350.00 as that would have been double jeopardy.
Finally Counsel submitted that the order by the trial trudge that the value of the motor cycle be paid to the Respondent cancels the contract and forecloses the Respondent to be entitled to the daily hire sum of N350.00 for the duration awarded by the court. This clearly exceeded the total contract value of the contract, if it had been performed to conclusion. Counsel urged the court to set aside this award.
The object of contract damages is to put the Plaintiff in the position he would have been in, if the contract had been satisfactorily performed. Agbanelo Vs. U.B.N. Ltd (2000) 4 SC pt 1 page 234.
The trial court cannot order for the payment of N58,000.00 being cost of purchase of the motor cycle as of the time of the contract and of the some time order for the daily hire of N350.00 to be paid to the Respondent. The contract had failed and as such the N350.00 expected to be paid daily failed with it. The Respondent cannot receive compensation twice. The Respondent cannot have his motorcycle and expect the Appellant to still pay N350.00 daily.
The rule is that in an action for breach of contract, the terms “special” and “general” damages are not applicable. Consequently, there is no distinction between special and general damages in law of contract. Chanrai Vs. Khawan (1965) 1 All NLR page 182, Shell BP Vs. Jammal Eng. Ltd (1974) 1 All NLR pt 1 page 542, Okeke Vs. Oche (1994) 2 NWLR pt 329 page 688 Sheyer (Nig) Ltd Vs. Gadzama (1995) 7 NWLR pt 407 page 305.
Like I stated earlier, in awarding damages in on action founded on breach of contract, the rule to be applied is Restitutio in integrum that is, in so for as the damages are not too remote, the Respondent shall be restored, as for as money can do it, to the position in which he would have been if the breach had not occurred. See Okongwu Vs. NNPC (supra) Oshin and Oshin Ltd Vs. Livestock feed Ltd (supra) Udeagu Vs. BCC. Plc (supra).
The Respondent had been restored to his position before the contract and that is his rightful entitlement. N58,000.00 the worth of the motorcycle has been awarded. He is no longer entitled to the daily payment of N350.00.
That being the case, the second issue is also resolved in favour of the Appellant. In sum, the appeal succeeds. The Respondent is entitled to N58,000.00 the worth of the motorcycle at the time of the contract, and N3,500.00 being cost awarded by the trial Court. All the other awards by the trial court are hereby set aside.
I make no orders as to cost.
MUHAMMED LAWAL GARBA, J.C.A.: A draft of the lead judgment delivered by my learned brother, U.I. Ndukwe-Anyanwu, JCA, was read by me before today. I agree with the reasoning and conclusions reached on the issues that arose for determination in the appeal and make the same orders contained therein.
ISAIAH OLUFEMI AKEJU, J.C.A.: My learned brother, Uzo I. Ndukwu-Anyanwu, JCA gave me the opportunity of reading before now the lead judgment just delivered. I agree with the reasoning as well as the conclusion that the appeal has succeeded, I too allow the appeal and abide by the consequential orders in the lead judgment including costs.
Appearances
Livinus Udofia Esq.For Appellant
AND
For Respondent
