KENTUS CHEMICALS AND ALLIED PROJECTS LIMITED v. UNITED BANK FOR AFRICA PLC (2012)

KENTUS CHEMICALS AND ALLIED PROJECTS LIMITED v. UNITED BANK FOR AFRICA PLC

(2012)LCN/5578(CA)

In The Court of Appeal of Nigeria

On Thursday, the 12th day of July, 2012

CA/B/299/2005

RATIO

BANKING LAW: RELATIONSHIP BETWEEN A BANK AND ITS CUSTOMER

In law and practice of banking, the relationship between a bank and its customer is generally contractual. In the case of: Union Bank of Nig. Plc. v. Ajabule, the Hon. Justice Adekeye JSC succinctly summed up the nature of the relationship between banks and customers in the following words:

The Appellant attributed the variation in the rate of interest to Central Bank guidelines and bankers call cost of funds. In Law and Practice of Banking, the relationship between a bank and its customer is contractual. In the law of contract, the law is that a written contract agreement entered into by parties is binding on them. Where there is any disagreement between the parties to such written agreement on any particular point, the only reliable evidence to resolve the claim is the written contract of the parties. The reason being that where the intention of the parties to a contract are clearly expressed in a document the court cannot go outside the document in search of other document not forming part of the intention of the parties: S.P.D.C. (Nig.) Ltd. v. Emehuru (2007) 5 NWLR (Pt.1027) 347; Larmie v. D.P.M.S. Ltd, (2005) 18 NWLR (Pt.955) 438; Dalek (Nig.) Ltd. v. OMPADEC (2007) All FWLR (pt. 364) 204, (2007) 7 NWLR (pt. 1033) 403; Nneji v. Zakhem con (Nig.) Ltd. (2006) 12 NWLR (pt.994) 297. PER OYEBISI FOLAYEMI OMOLEYE, J.C.A.

PLEADINGS: IMPORTANCE OF PLEADINGS

Parties are guided by their pleadings and the court will not allow parties to deviate from their pleadings. See the cases of: (1) Amadi v. State (1993) 8 NWLR (Pt. 314) p. 644 and (2) Akinrinmade v. Lawal (1996) 2 NWLR (Pt. 429) p. 218. PER OYEBISI FOLAYEMI OMOLEYE, J.C.A.

CONTRACT: BINDINGNESS OF CONTRACT

DAMAGES: NATURE OF DAMAGES

Damages are the pecuniary compensation or award given by process of law to a person who has suffered loss or injury whether to his person or property through the unlawful act or omission of another. To put it in different words, damages are awarded to restore the plaintiff as far as money can, to the position he would have been if there had been no breach in the first instance. It is in essence to compensate the plaintiff for the loss. See the cases of: (1) Cameroon Airlines v. Otutuizu (2011) All FWLR (PT.570) p.1260 and (2) Shell DP v. Jammal Engineering Ltd. (1994) 4 SC p. 33. PER OYEBISI FOLAYEMI OMOLEYE, J.C.A.

APPEAL: ATTITUDE OF THE APPELLATE COURT TOWARDS DAMAGES AWARDED BY THE TRIAL COURT

(a) The trial court acted on some wrong principle of law.

(b) The award is arbitrary.

(c) The trial court acted on misapprehension of facts where it took into account irrelevant matters or failed to take into account relevant matters.

(d) Injustice would result if the appellate court does not interfere.

(e) The amount awarded is either so ridiculously high or so ridiculously low that it must have been an erroneous estimate of the damages.

(1) Momodu v. University of Benin (1997) 7 NWLR (Pt.512) p.325; (2) Obere v. Board of Management Eku Baptist Hospital (1978) 6 7 SC 15; (3) Ebe v. Nnamani (1997) 7 NWLR (Pt.513) p.479 and (4) U.A.C. v. Irole (2001) 5 (Pt.707) p.583. PER OYEBISI FOLAYEMI OMOLEYE, J.C.A.

DAMAGES: RULE ON DOUBLE COMPENSATION

See also the cases of: Nicon Hotels Ltd. v. N.D.C. Ltd. (2007) 13 NWLR (pt.1051) p.237, at p. 269, paras. B- C, Adekeye JCA (as he then was) on the rule of double compensation stated that:

Special damages can be awarded following a breach of contract. The courts are however always on the side of caution and usually scrutinize a plaintiffs claim for general damages where there is also a claim for special damages, in order to avoid double compensation. By this rule of double compensation, if a plaintiff recovers in full under special damages, for an injury he will not be entitled to recover under general damages for the same injury.

Uman v. Owoeye (2003) 9 NWLR (pt.825) pg.221

Gamboruwa v. Borno (1997) 3 NWLR (pt.495) pg. 530

Oshinjinrin v. Elias (1970) 1 All NLR 153. PER OYEBISI FOLAYEMI OMOLEYE, J.C.A.

JUSTICE

RAPHAEL CHIKWE AGBO Justice of The Court of Appeal of Nigeria

OYEBISI FOLAYEMI OMOLEYE Justice of The Court of Appeal of Nigeria

CHIOMA EGONDU NWOSU-IHEME Justice of The Court of Appeal of Nigeria

Between

KENTUS CHEMICALS AND ALLIED PROJECTS LIMITED Appellant(s)

AND

UNITED BANK FOR AFRICA PLC Respondent(s)

OYEBISI FOLAYEMI OMOLEYE, J.C.A. (Delivering the Leading Judgment): This is an appeal against the judgment of the High Court of Delta State sitting in Asaba, delivered on the 7th day of December, 2004.
The brief background facts of this matter from the Appellant’s perspective are that, sometime in March, 1997, the Appellant applied for and was granted an Import Finance Facility (IFF), by the Respondent for the purpose of importing secondhand motor spare parts from England. Under the arrangement, the Appellant contributed thirty per centum (30%), while the Respondent contributed seventy per centum (70%) for the importation of the goods. The Appellant directed that the shipping documents should be delivered to it through the Respondent. On the arrival of the goods, the Appellant approached the Respondent requesting for the shipping documents to enable it clear the goods. However, the Respondent refused to surrender the shipping documents. The Respondent insisted that the Appellant must pay off the Respondent’s seventy per centum (70%) contribution as a condition for the release of the shipping documents. In the process, due to the inability of the Appellant to clear the goods, they went into demurrage. Later the Respondent unilaterally cleared the goods and took them into a warehouse hired for the purpose. In the end, the Respondent charged and debited the account of the Appellant with the sum of eight hundred and eighty seven thousand eight hundred and sixty two naira, thirty kobo (N887,862.31) as the costs of clearing and warehousing the goods. The Appellant took a writ at the trial Court and claimed against the Respondent in its statement of claim at pages 40 to 47 of the record of appeal, as follows:
1. A declaration that the Defendant is not entitled to debit the Plaintiffs Account No. 20100579(2) with the Defendant’s Asaba branch, with the sum of N887,862.13 being amount purportedly spent by the Defendant in clearing, forwarding, demurrage and warehousing of the Plaintiffs goods, without the Plaintiff’s consent or authority first had and obtained.
2. A declaration that the purported debit advice issued by the Defendant in respect of the Plaintiffs said account for the said amount and any purported interest charged thereon is invalid, illegal, null and void and of no effect whatsoever.
3. A declaration that the Defendant’s withholding of the Plaintiffs shipping documents as aforesaid, is wrongful and illegal.
4. The sum of N5,000,000.00 (Five Million Naira) being special and general damages for the Defendant’s wrongful detention of the plaintiffs shipping documents in respect of the said goods, despite repeated demands, as well as an order for delivery up of the documents.
5. An order of injunction restraining the Defendant from further charging interest on the Plaintiffs said account in respect of any purported expenses incurred in clearing the Plaintiffs goods as aforesaid.
The case went to trial. The parties called one witness each and tendered exhibits. At the end of the trial, the learned trial Judge in his judgment, save for the order of the return of the shipping documents to the Appellant, dismissed the claims of the Appellant. The judgment is at pages 125 to 163 of the record of appeal. Dissatisfied with the said judgment, the Appellant filed an appeal against it to this Court. The notice and grounds of appeal containing six grounds of appeal dated 31st of January, 2005 which was filed on the 2nd of February, 2005, is at pages 164 to 167 of the record of appeal.
The learned counsel for the Appellant, G. A. I. Mowah prepared the Appellant’s brief of argument dated 5th June, 2007 and filed on 6th June, 2007. In it, three issues were distilled from the six grounds of appeal for determination. The issues state as follows:
ISSUE 1
Was the learned trial Judge right in deciding in the judgment that the Plaintiffs shipping documents formed part of the security for the facility granted the Plaintiff by the Defendant?
ISSUE 2
Was the learned trial Judge right in deciding that the plaintiff was obliged to pay to the Defendant the cost which the Defendant incurred in clearing the goods?
ISSUE 3
Was the learned trial Judge right in dismissing Plaintiffs claim in detinue in the face of the findings of fact that the Defendant was not justified in detaining the Plaintiffs shipping documents after the Plaintiff had repaid the facility for which the Defendant held the documents?
In the Respondent’s brief of argument dated and filed on 14th August, 2009, the learned counsel for the Respondent, Adesuwa Omonuwa adopted the three issues formulated by the Appellant’s counsel for the determination of the appeal, as already stated above.
I have meticulously considered the submissions of counsel for both parties and the legal authorities relied on by each of them in support of their respective positions. The three issues formulated for determination in this appeal in my view are coterminous and could be considered together in the resolution of the grievances of this appeal.
It is crystal clear in this matter that there is no controversy regarding the contractual relationship of the parties. However, issues have been joined on which of the documents exhibits A and T that was meant to regulate the IFF transaction between the parties. Both parties are also at one that both documents are nearly identical, save that in exhibit T, there is the clause that, there shall be a lien on the shipping documents which is to be released upon payment of the balance of seventy per centum (70%) by the Appellant to the Respondent, that is, paragraph 3(iii) of exhibit T – see pages 201 to 205 of the record of appeal. It is significant to note that the finding on the bindingness of exhibit T on the parties was made at page 159, lines 13 to 16 of the record after a very careful consideration of the relevant documentary evidence of the business relationship between the parties prior to the events leading to the consummation of the agreement. Exhibit T was tendered and admitted in evidence. I agree with the learned trial Judge that exhibit T was duly executed by the parties herein and having been admitted in evidence, the trial Court was bound as it did to rely on and use it in determining the claim of the Appellant.
In law and practice of banking, the relationship between a bank and its customer is generally contractual. In the case of: Union Bank of Nig. Plc. v. Ajabule, the Hon. Justice Adekeye JSC succinctly summed up the nature of the relationship between banks and customers in the following words:
The Appellant attributed the variation in the rate of interest to Central Bank guidelines and bankers call cost of funds. In Law and Practice of Banking, the relationship between a bank and its customer is contractual. In the law of contract, the law is that a written contract agreement entered into by parties is binding on them. Where there is any disagreement between the parties to such written agreement on any particular point, the only reliable evidence to resolve the claim is the written contract of the parties. The reason being that where the intention of the parties to a contract are clearly expressed in a document the court cannot go outside the document in search of other document not forming part of the intention of the parties: S.P.D.C. (Nig.) Ltd. v. Emehuru (2007) 5 NWLR (Pt.1027) 347; Larmie v. D.P.M.S. Ltd, (2005) 18 NWLR (Pt.955) 438; Dalek (Nig.) Ltd. v. OMPADEC (2007) All FWLR (pt. 364) 204, (2007) 7 NWLR (pt. 1033) 403; Nneji v. Zakhem con (Nig.) Ltd. (2006) 12 NWLR (pt.994) 297.
The learned counsel for the Appellant tried to raise the issue of the genuineness of exhibit T. Quite apart from the fact that on the printed record, there is no evidence that exhibit T had been shrouded in any misrepresentation from either party at the time of its making. Both parties executed exhibit T and operated it in a cordial atmosphere before the events that culminated in the suit, the subject-matter of this appeal. The Appellant has been a long-time customer of the Respondent. What is more, the genuinness or otherwise of exhibit T was not pleaded by the Appellant. Parties are guided by their pleadings and the court will not allow parties to deviate from their pleadings. See the cases of: (1) Amadi v. State (1993) 8 NWLR (Pt. 314) p. 644 and (2) Akinrinmade v. Lawal (1996) 2 NWLR (Pt. 429) p. 218.

An appeal is a continuation of the matter brought before the trial Court. I will then hold that this point canvassed and submitted upon by the learned counsel for the Appellant is of no moment, it is hereby discountenanced.

It is settled law that parties are bound by the contract they voluntarily enter into and cannot act outside the terms and conditions contained in the said contract and the court is bound to give effect thereto, see the cases of: (1) A.G. Femero & Co. Ltd. v. Henkel Chemical (Nig.) Ltd. (2011) 36 W.R.N. p.1; (2) Chukwumah v. Shell Petroleum Dev. Co. (1993) 4 NWLR (Pt. 289) p. 512 and (3) U.B.N v. Prof Albert Ojo Ozigi (1994) 3 NWLR (pt. 333) p. 385. Furthermore, it is pertinent to state that, the Appellant having benefitted from the contract between it and Respondent cannot be allowed both in law and equity to contend the genuineness of exhibit T- see the cases of: (1) Sosan v. H.F.P. Eng. (Nig.) Ltd. (2004) (Pt. 861) p. 546; (2) Solanke v. Abed (1962) 1 SCNLR p. 371 and (3) Ugochukwu v. Coop. & Commercial Bank Ltd. (1996) 6 NWLR (Pt. 456) p.524.
I am in agreement with the findings of the trial Court that the type of term in dispute is not alien to the practice of the sort of transaction between the parties herein. From the foregoing, it is my firm view that the trial Court properly found that, having adjudged exhibit T as constituting a binding agreement between the parties, the clause therein that the Appellant’s shipping documents formed part of the security for the IFF granted to it by the Respondent, is enforceable.
It is very pertinent in the resolution of this appeal to determine which of the parties had the burden of clearing the goods, the subject-matter of the transaction between the parties. I have thoroughly perused exhibit T and the other documentary and oral evidence in the record of appeal, there is no term stipulating which of the parties to be responsible for the clearing from the port and warehousing the goods in readiness for their collection and upward sale by the Appellant. It is the contention of the Respondent’s counsel that the Appellant was supposed to pay off the seventy per centum (70%)contributed by the Respondent towards the importation of the goods on their arrival. With due respect, I find this contention ludicrous. For how was the Appellant expected to pay up the balance it was owing the Respondent? If the Appellant had the money, there would have been no point for him to seek the Respondent assistance in the first place. The Respondent knew or at least was expected to know that the goods could only be cleared with the shipping documents. This is the reason it behoved the Respondent who was in possession of the shipping documents to promptly make arrangements to have the goods cleared as soon as the Appellant informed it of the arrival of the goods in Nigeria, rather than allow for the goods to go into demurrage. The Respondent ought to have made provisions for the clearing of the goods in the agreement document. In the absence of any such term, the Respondent ought to have worked out a modality with the Appellant regarding the clearing and warehousing the goods rather than take a unilateral decision as it did in this matter. The evidence adduced, especially that of DW1, by the Respondent at trial was most unhelpful to the Respondent’s position on this issue. As rightly pointed out by the learned counsel for the Appellant, there was no agreement between the parties that it was the responsibility of the Respondent to clear the goods and debit the Appellant with the costs of clearing. The Respondent was on its own when it surreptitiously made arrangements behind the back of the Appellant to have the goods cleared, warehoused and the subsequent debiting of the Appellant’s account with the costs of these and charging interest thereon. The Respondent was wrong to carry on as it did.
Another contention of the Appellant appears to me to be, the failure by the trial Court to award general damages to it and that this decision was based on wrong principle of law.
Damages are the pecuniary compensation or award given by process of law to a person who has suffered loss or injury whether to his person or property through the unlawful act or omission of another. To put it in different words, damages are awarded to restore the plaintiff as far as money can, to the position he would have been if there had been no breach in the first instance. It is in essence to compensate the plaintiff for the loss. See the cases of: (1) Cameroon Airlines v. Otutuizu (2011) All FWLR (PT.570) p.1260 and (2) Shell DP v. Jammal Engineering Ltd. (1994) 4 SC p. 33.

Generally, an appellate court will not tamper with the damages awarded by the trial court merely because it would have exercised its discretion differently if it had tried the case at first instance. An appellate court will only exercise its power to interfere with the quantum of damages awarded by a trial court where:
(a) The trial court acted on some wrong principle of law.
(b) The award is arbitrary.
(c) The trial court acted on misapprehension of facts where it took into account irrelevant matters or failed to take into account relevant matters.
(d) Injustice would result if the appellate court does not interfere.
(e) The amount awarded is either so ridiculously high or so ridiculously low that it must have been an erroneous estimate of the damages.
(1) Momodu v. University of Benin (1997) 7 NWLR (Pt.512) p.325; (2) Obere v. Board of Management Eku Baptist Hospital (1978) 6 7 SC 15; (3) Ebe v. Nnamani (1997) 7 NWLR (Pt.513) p.479 and (4) U.A.C. v. Irole (2001) 5 (Pt.707) p.583.

See also the cases of: Nicon Hotels Ltd. v. N.D.C. Ltd. (2007) 13 NWLR (pt.1051) p.237, at p. 269, paras. B- C, Adekeye JCA (as he then was) on the rule of double compensation stated that:
Special damages can be awarded following a breach of contract. The courts are however always on the side of caution and usually scrutinize a plaintiffs claim for general damages where there is also a claim for special damages, in order to avoid double compensation. By this rule of double compensation, if a plaintiff recovers in full under special damages, for an injury he will not be entitled to recover under general damages for the same injury.
Uman v. Owoeye (2003) 9 NWLR (pt.825) pg.221
Gamboruwa v. Borno (1997) 3 NWLR (pt.495) pg. 530
Oshinjinrin v. Elias (1970) 1 All NLR 153.

It is quite clear that, the established principle of law was misconceived by the learned trial Judge when he held that since the Appellant’s claim is said to lie in detinue leading to the claim for special damages which was alleged to have arisen from the wrongful withholding of the Appellant’s shipping documents, he, that is, the learned trial Judge did not see the basis or justification for a claim in general damages. The fact that the Appellant claimed special damages, (which the trial Court rightly held were not specifically and in details pleaded and strictly proved) would not bar it from claiming general damages. In the case of: Union Bank of Nigeria Plc. V. Ajabule (2012) All FWLR (Pt. 611) p. 1413 at p.1441, paras D – E, Peter-Odili JSC held that:
On this matter of the special damages, the pleadings had not been sufficiently pleaded and the evidence not within the ambit of strict proof as required by law and therefore ought not to be granted. However assuming the special damages were available to the Respondents, that would not be a bar to the award of general damages in a situation such as the prevailing one where the injury to the Respondents are not quantifiable. It is only where the damages or injury are quantifiable that general damages cannot be awarded and that is not the case here. (underlined by me for emphasis).
In my view general damages should be available to the Appellant in the instant matter where the Appellant’s ultimate sale of the goods in contention was very much delayed. It is settled that general damages are such as the law will presume to be the direct, natural or probable consequence of the act complained of. See the cases of: (1) Obasuyi v. Business Venture Ltd. (20001 5 NWLR (Pt. 658) p.668 (2) C.B.N. v. Ahmed (2004) 15 NWLR (Pt.897) p.591 and (3) Mobil Oil (Nig.) Ltd. v. Akinfosile (1969) 1 NMLR p.217. To put this in other words, where a plaintiff avers in his pleadings that some damages have been suffered by him/her/it without being in a position to calculate its value specifically, the damage would be presumed to have resulted naturally from the action of the defendant, this is general damages. In the instant matter, I hold that the failure of the trial Court to award general damages was indeed based entirely on wrong principle of law. The learned trial Judge was clearly in error to not award general damages to which the Appellant was entitled.
Regarding the issue of reception and evaluation of evidence and findings of fact, in the case of: Guardian Newspapers Ltd. v. Ajeh (2011) 10 NWLR (pt.1256) p.574, Rhodes-Vivour, JSC at p. 592 para. G had the following to say:
Receipts of relevant evidence is perception, while evaluation entails the weighing of the evidence bearing in mind the surrounding circumstances of the case. Findings of fact by trial Judge involves both perception and evaluation.

On the duty of the trial court with regard to evaluation of evidence and attitude of an appellate court thereto, the learned Jurist, Rhodes-Vivour, JSC at page 592, paras. C – F went further to say that:
This court has stated again and again that the evaluation of evidence and the ascription of probative value to such evidence are the primary functions of the court of trial which saw, heard and assessed the witnesses as they testified at the trial in the witness box. It is equally basic that where such court of trial unquestionably evaluates the evidence before it and justifiably appraises the facts, it is not the business of the Court of Appeal to substitute its own view for those of the trial court.
See Akpagbue v. Ogu (1976) 6 SC p. 63;
Woluchem v. Gudi (1981) 5 SC p. 391;
Ibanga v. Usanga (1982) 5 SC p. 103;
The trial Judge would have no difficulty in arriving at the correct decision if evidence is properly evaluated. Consequently, where evidence is properly evaluated i.e to say when all the principles of law relevant are properly considered, an appeal court would be in much difficulty trying to disturb the findings arrived at by the trial Judge. Such findings cannot be disturbed by an appeal court.
Therefore to succeed in an appeal, an Appellant must show the appellate court that the trial court against whose decision he appealed made errors either in the appraisal of the facts or application of law to the facts to warrant the intervention of the appellate court. See the cases of: (1) Balogun v. Amubikahun (1989) 3 NWLR (Pt.107) p.101; (2) Shittu v. Fashawe supra at p.44, para. D; (3) Wilson v. Oshin (2000) 6 S.C (Pt.III) p.1 and (4) Ukejiana v. Uchendu 13 WACA p.43 at p.46.

The general principle is that ordinarily an appellate court will not interfere with the decision of the trial court. But an appellate court will disturb the findings of fact by the trial court where such findings are shown to be unreasonable or perverse and not a result of proper exercise of judicial discretion. It will similarly interfere with the decision of the lower court where there is ample evidence and the court failed to evaluate it and make correct findings on the issue as in such a case the appellate court is in a good position as the trial court to make the proper findings. See (1) Shell BP Petroleum Co. Nig. Ltd. v. Pere Cole (1978) 3 S.C. p. 183 at p.194 and (2) Isokwa Motors Nig. Ltd. v. Awoniyi (1999) 1 NWLR (Pt.586) p.199. An appellate court will also interfere where the findings do not flow from the evidence on which such findings are based. See Ademolaja v. Adenipekun (1999) 1 NWLR (Pt.587) p. 440 at p. 455. I am satisfied that within the parameter set by the principle here adumbrated, it is proper and permissible for this Court to evaluate the evidence before the trial Court with a view to seeing where the justice of this case lies.
Consequently, I have the bounding legal duty to step into the place of the trial Court and I hereby award the sum of one million five hundred thousand Naira (N1,500,000.) as general damages in favour of the Appellant – see Section 15 of the Court of Appeal Act, 2004.
Conclusively, I hold that this appeal succeeds in part and it is allowed. I hereby set aside the judgment of the trial Court and grant the claim of the Appellant in the following terms and I hereby order that:
1. A declaration that the Respondent is not entitled to debit the Appellant’s Account No. 20100519(2) with the Respondent’s Asaba Branch, with the sum of N887,862.13 being amount purportedly spent by the Respondent in clearing, forwarding, demurrage and warehousing of the Appellant’s goods, without the Appellant’s consent or authority first had and obtained.
2. A declaration that the purported debit advice issued by the Respondent in respect of the Appellant’s said account for the said amount and purported interest charged thereon is invalid, illegal, null and void and of no effect whatsoever.
3. A declaration that the Respondent’s withholding of the Appellant’s shipping documents as afore-said, is wrongful and illegal.
4. The sum of one million five hundred thousand Naira (N1,500,000.) general damages for the Respondent’s wrongful detention of the Appellant’s shipping documents in respect of the said goods, despite repeated demands, as well as an order for delivery up of the documents.
5. An order of injunction restraining the Respondent from further charging interest on the Appellant’s said account in respect of any purported expenses incurred in clearing the Appellant’s goods as aforesaid.
The Appellant is entitled to the costs of this appeal which I assess at the sum thirty thousand Naira (N30,000).

RAPHAEL CHIKWE AGBO, J.C.A.: I agree.

CHIOMA EGONDU NWOSU-IHEME, J.C.A.: I read in advance the lead judgment just delivered by my learned brother OMOLEYE, JCA. I agree with the reasoning and conclusion that this appeal succeeds in part. I also set aside the judgment of the trial court and grant the claim of the Appellant as contained in the lead judgment. I abide by the order as to costs.
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Appearances

G. A. I. Mowah Esq., Miss N.C. Nkwelle Esq.For Appellant

AND

Adesuwa Omonuwa Esq.For Respondent