ARFO CONSTRUCTION COMPANY LIMITED v. THE MINISTER OF WORKS & ANOR
(2018)LCN/12318(CA)
In The Court of Appeal of Nigeria
On Thursday, the 20th day of December, 2018
CA/A/526/2016
RATIO
CONTRACT: WHERE THERE IS A BREACH OF CONTRACT
“Generally, as it is elementary law that the burden is on the plaintiff to prove that there was a contract between him and the defendant and that the contract was breached to his disadvantage. Thereafter, the plaintiff has to lead evidence to prove damages. A plaintiff who fails to prove breach and subsequent damages will fail in his action. In a contract which is in writing, a plaintiff has to prove breach by leading evidence based on the written contract. This is because the parties are bound by the contract. After all, it is not the function of a Court of law to make contract for parties or to change their contract as made. See Orji Vs Anyaso (2000)2 NWLR (part 643) page 1.” PER ADAMU JAURO, J.C.A.
CONTRACT: WHO CAN PROVE BREACH OF CONTRACT
“The law is trite that the onus is on the party who asserts breach of contract, to prove same before the burden will shift to the other party. See Ezenwa Vs Ekong (1999) 11 NWLR (part 625) 55; Bikay Engineering Ltd Vs Governor Ondo State & Ors (2013) LPELR 20890 (CA). ” PER ADAMU JAURO, J.C.A.
DOCUMENT: WHETHER DOCUMENT OR CONTRACT IS TO BE CONSTRUED IN ITS ORDINARY MEANING
“I only add for emphasis that in the construction of the terms of a contract, the meaning to be placed on it, is that which is the plain, clear and obvious result of the terms used. A contract or document is to be construed in its ordinary meaning as question of fact. Thus, where the words of a contract agreement or document are clear, the operative words in it should be given their simple and ordinary grammatical meaning. See DALEK (NIG) LTD v. OMPADEC (2007) 7 NWLR (PT 1033) 402; U.B.N. LTD v. SAX (NIG) LTD (1994) 8 NWLR (PT. 361) 402.” PER ADAMU JAURO, J.C.A.
PLEADING: WHERE A PARTY PLEADS WITHOUT EVIDENCE
“The law has long been settled that pleadings however strong and convincing the averments may be, without evidence in proof thereof goes to no issue. Evidence must be led to prove the facts relied on by the party or to sustain allegations raised in pleadings. A mere averment in pleadings proves nothing unless admitted. See UBN Plc Vs Astra Builders (W.A) Ltd (2010) 5 NWLR (part 1186) 1 SC. The 1st Respondent in the instant case does not admit the said Appellant’s claim. In the absence of prove from the Appellant, the claim must fail.” PER ADAMU JAURO, J.C.A.
JUSTICES
ABDU ABOKI Justice of The Court of Appeal of Nigeria
ADAMU JAURO Justice of The Court of Appeal of Nigeria
EMMANUEL AKOMAYE AGIM Justice of The Court of Appeal of Nigeria
Between
ARFO CONSTRUCTION CO. LTD Appellant(s)
AND
1. THE MINISTER OF WORKS
2. ATTORNEY GENERAL OF THE FEDERATION Respondent(s)
ADAMU JAURO, J.C.A. (Delivering the Leading Judgment):
This is an appeal against the decision of the High Court of the Federal Capital Territory, Abuja in suit No. FCT/HC/CV/1313/ 2012 presided over by Hon. Justice S. E. Aladetoyinbo delivered on the 28th day of June, 2016.
The facts herein that resulted in this appeal was that the plaintiff (now appellant) averred in his amended statement of claim that by an award letter with reference number WR 13965/Vol. 1/187 captioned: REHABILITATION OF IKOM WULA OBUDU ROAD, AND OBUDU CATTLE RANCH ROAD, ROUTES 454 AND 466, IN CROSS RIVER STATE CONTRACT NO. 5634 the Appellant was awarded contract by the 1st Defendant/Respondent for the construction of the above mentioned road at the negotiated sum of N3,722,169,685.08 with a completion period of 24 months. Under the said award letter, an Engineer’s order was given to the plaintiff in accordance with clause 41 of the conditions of contract, to commence work on 14th February, 2003 and complete same on or before 13th February, 2005. The plaintiff accepted the 1st Defendant’s award letter unconditionally vide a letter dated 20th January, 2003.
Plaintiff alleged that, its calculated profit from execution of the said contract was N1,342,759,389.78 being 35% of the total contract sum.
It was also the statement of the plaintiff that under clause 9 of the Form of Agreement between the parties, a temporary advance payment of not less than 25% of the total contract sum was to be paid by the 1st Defendant/Respondent to the plaintiff. He stated that the said 25% temporary advance payment was not paid to the plaintiff by the 1st Defendant until after 11(eleven) months into the life of the said contract, which undue delay set the foundation for a further delay to execute the said contract within the original contract period of 24 months.
Though the plaintiff mobilized to site and commenced work, at different occasions the plaintiff wrote for extension of time within which to complete the project. The extension of time that were granted to the plaintiff/respondent by the 1st Defendant are: Extension applied in:
a) May 2005 and extended to 30th June, 2006
b) 17th July, 2006 and extended to 30th March 2007.
c) 4th April, 2007 and extended to 30th December, 2007.
d) February, 2008 and extended to 29th June, 2010.
In 2009, the plaintiff wrote to the 1st Defendant requesting for the review of the contract rates from N3,722,169,685.08 (Three Billion, Seven Hundred and Twenty Two Million, One Hundred and Sixty Nine Thousand, Six Hundred and Eighty Five Naira and Eighty Kobo) to N7,816,576,201.01 (Seven Billion, Eight Hundred and Sixteen Million, Five Hundred and Seventy Six Thousand, Two Hundred and One Naira only) Vide letter No. WR. 13965/Vol.1/203 date 19th August, 2010, the 1st Defendant conveyed an anticipatory approval for review of rates, on the condition that the plaintiff confirms in writing, a duration of 18 months completion period. See page 91 of the record of appeal.
However, though the plaintiff gave confirmation of completion within the said 18 months in writing vide its letter dated 23rd August, 2010, the 1st Defendant vide its letter No. WR. 13965/Vol. 11/359 dated 29th November, 2012 terminated the contract awarded to the plaintiff for the following reasons:
i) “As at the date, the work percentage completion is 30% with a time lapse of 375%. This slow pace of work has led to further deterioration of the road and has made it impossible to complete the work within the original scope and rates with the effect of bringing the contract to a standstill.
ii) Your request for upward review of the basic and unit rates has also been rejected as lacking in merit due to your poor and unimpressive antecedents.” See pages 207 – 208 of the record of appeal.
It was averred by the plaintiff that the 1st Defendant’s letter terminating the plaintiff’s contract constitutes a breach of contract, whereof the plaintiff claimed against the 1st defendant as follows:
a.) A declaration that the termination by the Defendant of contract No. 6534 (sic) between the plaintiff and the 1st Defendant is wrongful and constitutes a breach of the terms and conditions of contract between the parties.
b.) Special damages in the sum of N260,045,114.19 against the Defendant, being total interest in all delayed payment (mobilization fee and interim certificates) at 24.61% being the prevailing Central Bank of Nigeria interest rate per annum as at December, 2012, when this suit was instituted, thereafter, at the same rate until final judgment and thereafter at the same rate until the said sum is fully liquidated.
c) Special damage in favour of the plaintiff in the sum of N1,303,759,389.78 (One Billion, Three Hundred and Three Million, Seven Hundred and Fifty Nine Thousand, Three Hundred and Eighty Nine Naira, Seventy Eight Kobo) representing 35% of the total contract sum calculated at the commencement of the contract to be earned by the plaintiff upon duly executing same, which shall be lost to the plaintiff as a result by the unlawful termination of the contract by the Defendant.
d) Interest at 10% per annum on the said sum of N1,303,759,389.78 until final judgment and thereafter at the same rate until the amount is fully liquidated.
e) General damages for breach of contract in the sum of 112,500,000 (Two Billion, Five Hundred Million Naira only).”
In its amended statement of defence, 1st defendant denied most of the allegations levelled against it by the plaintiff. It was stated that the decision by the 1st Defendant to terminate the contract awarded to the plaintiff 9 (nine) years later, but still stagnant at 30% accomplishment and at a time lapse of 375%, is justified in the light of all the 1st Defendant’s effort to revive the project which was frustrated by the plaintiff’s inability to perform. The 1st Defendant further stated that the plaintiff’s poor and unimpressive antecedent towards the contract in issue, prevented it from benefiting from the year budgetary funds meant for the project. The 1st defendant counter-claimed against the plaintiff. In its counter-claim the 1st Defendant stated that it had only recovered N65,000,000.00 out of the advance payment made to the plaintiff in the sum of N930,543,421.27 representing 25% of the total contract price. It was further stated that the long delay by the plaintiff without completing the contract made the 1st Defendant to suffer loss and therefore entitled to liquidated damage in accordance with clause 47(1) of the standard condition of contract to which both parties had subscribed. This entitles the 1st Defendant to damages per each day of delay (850 days) against the plaintiff from the last extended date of June, 2010 to the date of termination which was 29th November, 2012.
PARTICULARS OF DAMAGES
N50,000.00 X each day of delay (850 days)
N42,500,000.00 (Forty-Two Million Five Hundred Thousand Naira) only.
The reliefs sought by the 1st Defendant in its counter-claim against the plaintiff are as follows:
a) The sum of N865,542,421,21 which is outstanding unrecovered amount of the Advance Payment made to the plaintiff by the 1st Defendant.
b) The sum of N42,500,000.00 as special damages arising from the plaintiff?s delay in completion of the contract.
c) General damages in the sum of N500,000,000.00.
d) The cost of this suit.
At the close of the parties’ pleadings, the matter proceeded to trial. In support of its case, the plaintiff called two witnesses and tendered 21 exhibits marked as Exhibits Al. – A18, Exhibits C, D and E. Seven other documents that emanated from the custody of the 1st Defendant were also admitted at the instance of the plaintiff, which were marked as Exhibit B1 – B7. The 1st Defendant for its part, in denying the plaintiff’s claims and in support of its counter – claim called one witness and tendered 27 documents which were admitted and marked as Exhibit F1 – F27.
After parties closed their respective cases, final written addresses were filed and exchanged. The lower Court delivered its judgment on the 28th June, 2016. In his considered judgment, the learned trial judge held that “the termination of the contract does not amount to breach of contract…. the plaintiff having violently breached the contract is not entitled to any special damages, general damages or specific performance of the contract. The 1st Defendant having terminated the contract is released from any obligations to the plaintiff arising from the contract…. the plaintiff is hereby ordered to pay the sum of N865,542,421.21 to the 1st Defendant with immediate effect. The plaintiff to pay 10% annual interest on the judgment sum with effect from 28th day of June, 2016 till the whole judgment is liquidated. The case of the plaintiff is unmeritorious same is hereby dismissed.? See pages 308-511 of the record of appeal.
Aggrieved with the aforementioned decision, the appellant appealed to the Court on five grounds of appeal. The grounds and their particulars are contained on pages 513 – 515 of the record of appeal. The Appellant sought the reliefs from the Court as follows:
i) A declaration that the termination by the 1st respondent of contract No. 5634 between the appellant and the 1st respondent was wrongful and constituted a breach of the terms and conditions of the contract between the parties.
ii) Special damage in favour of the Appellant in the sum of N260,045,114.19 against the 1st respondent being total interest on all delayed payments (mobilization fee and interim certificates) at 24.6% being the prevailing Central Bank of Nigeria interest rate per annum as at December, 2012, when this suit was instituted, thereafter, at the same rate until final judgment and thereafter and the same rate until the said sum is fully liquidated.
iii) Special damages in favour of the appellant in the sum of N1,303,759,389.78 representing 35% of the total contract sum calculated at the commencement of the contract to be earned by the Appellant upon duly executing same, which shall be lost to the Appellant as a result of the unlawful termination of the contract by the 1st respondent.
iv) Interest at 10% per annum in favour of the Appellant on the said sum of N1,303,759,389.78 until final judgment and thereafter at the same rate until the amount is fully liquidated.
v) An order dismissing the judgment of the trial Court granting the 1st respondent’s claim for refund of N865,542,421.21 from the appellant, together with the 10% interest thereon until liquidation.
The record of appeal was compiled and transmitted to the Court on 22nd September, 2016. Parties thereafter filed and exchanged their respective briefs of argument, in accordance with the rules of Court. The Appellant’s brief of argument was settled by Ahmed Maiwada Esq. It was undated and filed on 3rd October, 2016. The 1st respondent’s brief of argument on the other hand, settled by Babashani Mukhtar Esq., was dated 15th February, 2018 and deemed filed on 14th March, 2018.
From the Appellant’s five grounds of appeal, its learned counsel distilled five (5) issues for determination as follows:
i) Whether the learned trial judge was right in law when he restricted himself to only some of the documents tendered and admitted in evidence during trial in dismissing the appellant’s claims.
ii) Whether the learned trial judge was right in law when he held that the appellant was in breach of its contract with the 1st respondent by failing to complete the execution of the said contract within 24 months of its award.
iii) Whether the learned trial judge was right in law when he held that the termination of the contract by the 1st respondent between him and the appellant, was lawful and in accordance with the terms and conditions of contract, and therefore did not amount to breach of contract.
iv) Whether the learned trial judge was right in law by dismissing the appellant’s claims against the 1st respondent.
v) Whether the parts of the judgment of the learned trial judge are not completely against the weight of evidence presented before the Court during trial.
The 1st Respondent’s counsel for his part, formulated a lone issue for determination to wit:
“Whether the learned trial judge was right in dismissing the Appellant’s claims against the Respondents in suit No. FCT/HC/CV/1313/12 for being unmeritorious and granting the 1st Respondent’s counter-claim of N865,542,421.21 against the Appellant with 10% annual interest.”
It is settled law that a Court can reframe or reformulate issue or issues formulated by a party or parties in an appeal. The reason is for precision and clarity. It is also to narrow down the issue or issues in controversy to lead to a more judicious and proper determination of the appeal. See Unity Bank Plc & Anor. Vs Edward Bouari (2008) 2 SCM 193, Okoro Vs The State (1988) 12 SC 191 Latunde & Anor Vs Bella Lajinfin (1989) 5 SC 59; Musa Sha Jnr. Vs Da Rap Kwan & Ors (2009) LPELR- 8682 (CA) at page 16 paragraphs A – D.
In view of the foregoing authorities, the issue for determination in this appeal can be compressed thus:
Whether the lower Court was right in holding that the contract was rightly terminated thereby dismissing the Appellant’s claims and granting the 1st Respondent’s counter-claim.
In arguing this issue, it was submitted by the learned counsel for the Appellant that the learned trial judge was wrong in totally ignoring the standard condition of contract (Road Works) Vol. 1 1999 Edition which was tendered by the Appellant and admitted as Exhibit A15. He contends that Exhibit A15 contains a formalized terms and conditions that governed the relationship between the Appellant and the 1st Respondent under the contract. He submits that the trial judge was wrong to have disregarded clause 63, the condition under which alone the 1st Respondent could terminate its contract with the Appellant. He referred to the case of Agbare Vs Mimra (2008) 2 M.J.S.C 134 at page 140.
It was further the contention of the Appellant that the Appellant and the 1st Respondent having mutually consented that the completion period of the contract be extended for up to four times, in line with Exhibit A15, the learned trial judge erred when he held that the Appellant was in breach of the said contract by failing to complete the execution of the contract within 24 months of its award. He submits that the completion of the contract within 24 months of its award was not in issue between the parties. He argued that a Court should confine itself to issue raised by the parties alone. Reference was made to the cases of N.B.C.I. V Integrated Gas (Nigeria) Limited & Anor. (2005) 5 CLRN 1 at page 5, SPASCO Vehicle and Plant Hire Co. Vs Alraine (Nig) Ltd (1995) 8 NWLR (part 416) at page 667. In line with these authorities, learned counsel contended that the grant of the sum of N865,542,421.21 in favour of the 1st Respondent, for an alleged breach was neither claimed nor proven.
Learned counsel argued that the finding of the learned trial judge that the Appellant was guilty of attempting to write the contract between it and the 1st Respondent was not based on a pleading of the Respondents to that effect. Neither was there any evidence adduced on the issue. He submits that the conclusion reached by the trial judge was in error. He referred to the case of Idowu Vs The State (2000) 7 SC (part II) 50 at page 68. In his further submission, counsel argued that it was wrong for the learned trial judge to have relied on Exhibit C and the extensions granted to the Appellant by the 1st Respondent to conclude that the termination of the contract does not amount to breach of contract among other findings was a manifest error. He contends that there is no termination clause in Exhibit C. He said termination clause exists only as clause 63 inside Exhibit A 15. He quoted and reproduced the said clause 63 in Exhibit A15.
Learned counsel submits that the 1st Respondent failed to observe the principle in terminating the contract with the plaintiff in accordance with Exhibit A15, as the 1st Respondent did not make any reference in the letter of termination to any specific paragraph in clause 63, for which reason the said termination was issued. He contends that Exhibit A13 is vague as the reason for the termination does not contain any allegation against the Appellant of going into bankruptcy, Liquidation, amalgamation or having any execution levied against its property. It was further maintained that for the 1st Respondent to terminate the contract with the Appellant for any of the reasons listed in clause 63(a) (f), the Engineer of the 1st Respondent must first and foremost write and certify that any of the situations in paragraph (a) – (f) of clause 63 were present as regards the Appellant’s conduct. Counsel submits that in the instant case, the 1st Respondent has neither pleaded the issuance of the Engineer’s certificate on the Appellant prior to the termination of the contract nor presented evidence whatsoever to show that such Engineer’s certificate was issued prior to the termination of the contract.
He referred to clause 1 (c) of Exhibit A13 where Engineer is defined. Counsel relied on the case of Nigergate Limited Vs Niger State Government & 2 ors (2004) 12, CLRN at page 19 paragraph 5 where the Court held that an agreement that provides for a mode of termination has to, without more be terminated in accordance with the terms of the agreement.
Based on his submission above, learned counsel submits that the learned trial judge was wrong to hold that the terms and conditions of Exhibit C governed the termination of the contract between the parties, rather than the terms and conditions of Exhibit, A15 agreed by the parties, and that the trial judge erred by ignoring the said Exhibit A15 particularly clause 63 thereof, before arriving at his conclusion that it was Exhibit C that provided for termination.
On whether the lower Court was right to have dismissed the Appellant’s claims against the 1st Respondent, learned counsel submitted that the Appellant had duly presented evidence in proof of all its claims against the Respondents, oral and Documentary. For the special damages, learned counsel contended that in accordance with Section 128 (2) of the Evidence Act, 2011, the Appellant provided oral evidence of the 9 transactions by which the Appellant based his claim to the said special damages. In view of that, learned counsel submitted that the finding of the trial Court lacks basis in law, and it is not based on the provisions of the Evidence Act, 2011.
Learned counsel contended that the Appellant was able to discharge the burden of proof in favour of its claim, he submits that the burden had shifted to the Respondents to prove to the Court that the 1st Respondent did pay the listed certificate within the prescribed time, especially in view of the 1st Respondent admission in exhibits it tendered by itself before the Court which supported the Appellant’s claim of delays.
For the Appellant’s claim for damages arising from wrongful termination of the contract by the 1st Respondent, learned counsel contended that once it is resolved in favour of the appellant that the trial Court has erred in holding that the 1st Respondent wrongfully terminated the contract between it and the Appellant, then the claim of the Appellant for damages as a result of the breach should succeed. He relied on the case of Admiralty Commissioners Vs S.S. Veleria (1922) 2 AC 242 at page 248; Okongwu Vs N.N.P.C (1989) 4 NWLR (part 115); Haway Vs Medicowa Nig Ltd (2000) FWLR 1040 at 1050 paragraph D.
Again, for the claim of special damages of N1,140,065,162.88, counsel referred the Court to the case of Jeric Nig. Ltd Vs UBN Plc (2000) 15 NWLR (part 691) part 447. In concluding, learned counsel urged the Court to set aside the part of the judgment of the lower Court and grant all the reliefs sought by the Appellants in this appeal.
In response to the above submissions, learned counsel for the 1st Respondent submits that the trial judge was right in law to have dismissed the appellant’s claims in this suit against the Respondents. He submits further that the trial judge was also right when he held that the termination of contract No. 5634 by the 1st Respondent is justified in view of the Appellant’s serious breach of the said contract.
It was stated that from the evidence led at the trial, the 1st Respondent awarded to the Appellant contract for the Rehabilitation and Asphalt overlay or Ikom – Wula – Obudu Road and Obudu – Cattle Ranch Roads Routes 454 and 466 (contract No. 5634) in Cross River State, on the 14th of January 2003. The contract ought to have been completed on or before 13th February, 2005 and the contract sum which is not to be reviewed is N3,722,169,685.08. The Appellant communicated to the 1st Respondent about its unconditional acceptance. The 1st Respondent paid a total sum of N930,542,421.27 to the Appellant as advance payment representing 25% of the value of the contract.
Learned counsel stated further that several extensions of time and warnings were given to the Appellant by the 1st Respondent prior to the termination and various administrative efforts were made by the 1st Respondent in a bid to allow the appellant time to perform the contract but no meaningful achievement was made by the Appellant and this led to the setting up of a committee by the 1st Respondent which its report was admitted in evidence as Exhibit D. It was pointed out that no progress in works by the Appellant was recorded between the periods of January 2012 when Exhibit D was compiled up to the 29th November, 2012 when the contract was finally terminated. It was contended that all the aforementioned transactions occurred after the Appellant had with him, the sum of N930,592,421.27 as advance payment representing 25% of the value of the contract. Counsel contends that all these averments were not seriously denied, nor controverted by the Appellant at the trial. Relying on the authority of Akinsule vs Ugunyanju (2011) 12 NWLR (part 1261) page 284, counsel submits that the Court is entitled to accept and use evidence not effectively countered.
It was further the submission of the learned counsel that the decision by the 1st Respondent to terminate the contract awarded to the Appellant 9 years after its initial expiration period is justified, in the light of all the 1st Respondent efforts to revive it which was frustrated by the Appellants inability to perform. He referred to the case of Mustapha Vs Abubakar (2011) 3 NWLR (part 1233) page 146 paragraphs B – C, where the Court held that in the absence of a contrary intention, performance of a contract has to be carried out on the exact date specified in the contract.
On the claim of special damage claimed by the Appellant, learned counsel submits that the Appellant specifically pleaded the interim certificate in a tabular form in his pleadings, but the certificate of payment as tabularized where not tendered in evidence by the Appellant neither his bank statement.
Learned counsel argued that for the Appellant to prove his claim of special damages for delay in payments of interim certificate, it is required of him to first exhibit the date the various certificates were raised and to also exhibit his bank statements showing various dates when payments were effected into his account by the 1st Respondent. He contends that failure of the Appellant to do so made it difficult for the Court to draw conclusion, that the delay alleged by the Appellant actually occurred. Learned counsel submits that where facts are pleaded without evidence adduced, same goes to no issue. He referred to the case ofAlao Vs Akano (2005) 11 NWLR (part 935) page 180.
On the strength of the above authorities, learned counsel submits that the Appellant has failed to establish the alleged delay of payment of interim certificates which formed the bedrock of all his claims against the 1st Respondent. He referred to the documentary evidence tendered at the trial and the cases of Eholor Vs Osayande (1992) 6 NWLR (part 249) 524; Felicia Akinbisade Vs The State (2007) All FWLR (part 344) 17 at 33. It was further submitted that the learned trial judge was right in law to have dismissed the Appellants claims in this suit against the Respondents for being unmeritorious and the contract was rightly terminated by the 1st Respondent.
For the 1st Respondent’s counter-claim of N865,542,421.21, learned counsel maintained that the appellant received the sum of N930,542,421.21 representing 25% of the total contract sum as advance payment and mobilization to site. Out of the said N930,542,421.21, the amount received from the Appellant is the sum of N65,000,000.00 only with an outstanding unrecovered sum of N865,542,421.21.
It was submitted that based on the pleadings and evidence not disputed at the trial, the counter-claim of the 1st Respondent in the sum of N865,542,421.21 being the amount which is the outstanding unrecovered advance payment made to the Appellant by the 1st Respondent had been established. He referred to the case of Fayemi Vs Olorunfemi (1998) 19 NWLR (part 534) page 530.
In concluding, learned counsel submits that giving due consideration to the facts of the case, pleadings and evidence in the Court below, the learned trial judge was right and could not have arrived at any other conclusion than holding that the Appellant’s claims in the suit against the Respondents were unmeritorious and consequently dismissed same. He urged the Court to discountenance all the arguments of the Appellant and dismiss this appeal in its entirety with substantial cost.
Generally, as it is elementary law that the burden is on the plaintiff to prove that there was a contract between him and the defendant and that the contract was breached to his disadvantage. Thereafter, the plaintiff has to lead evidence to prove damages. A plaintiff who fails to prove breach and subsequent damages will fail in his action. In a contract which is in writing, a plaintiff has to prove breach by leading evidence based on the written contract. This is because the parties are bound by the contract. After all, it is not the function of a Court of law to make contract for parties or to change their contract as made. See Orji Vs Anyaso (2000)2 NWLR (part 643) page 1. In the instant case, there was no dispute as to the existence of contract between the Appellant and the 1st Respondent. The Appellant’s appeal centered on the wrongful termination of his contract by the 1st respondent which it claimed amounted to breach of contract by the 1st Respondent against the Appellant.
The Appellant’s contract was terminated by the 1st Respondent on 29th November, 2012 vide Exhibit D. Though the contract was initially awarded to the Appellant by the 1st Respondent for the Rehabilitation and Asphalt overlay of Ikom Wula Obudu Road and Obudu Cattle Ranch Roads Routes 454 and 466 in Cross River State, contract No. 5634 dated 14 January, 2003. The negotiated sum of the contract was the sum of N3,722,369,685.08 (Three Billion, Seven Hundred and Twenty-two Million, One Hundred and Sixty Nine Thousand Six Hundred and Eight Five Naira and Eight Kobo) with a completion period of 24 months. The appellant was to commence work on 14th February, 2003 and complete same on or before 13th February, 2005. The award letter contained a clause stating “… this is a fixed type of contract and the Ministry will not entertain any request for a review of rates.” See Exhibit C on page 8 of the additional record of appeal. By its letter dated 20th January, 2003, the Appellant unconditionally accepted the award letter for said contract together with all the terms and conditions contained therein. See page 115 of the main record of appeal.
The terms and conditions of the contract that regulate the 1st Respondent’s contract with the Appellant among other documents is the standard conditions of contract (Road works) of the Federal Government of Nigeria Vol. 1 see pages 11 and 80 – 149 of the supplementary record of appeal. With the un-conditional acceptance of all the terms of the contract, the 1st Respondent paid the sum of N930,542,421.27 as advance payment representing 25% of the contract sum to the Appellant. The advance payment was paid to the Appellant in two parts as follows:
a) First payment
Date paid – 2nd April, 2003
Amount paid N500,000,000.00k
b) Second payment
Date paid – 11th November, 2003 Amount paid – N440,542,421.27
See page 215 of the main record of appeal.
As at initial expiration period of the contract that is 13th February, 2005, no meaningful progress was achieved for the execution or completion of the said contract. In May, 2005, the Appellant wrote to the 1st Respondent requesting for extension of time to complete the project to the end of 30th June, 2006. See page 57 of the main record of appeal. This request was graciously granted by the 1st Respondent. In February,2006, the 1st Respondent gave the Appellant warning letter about the slow progress of the works. Despite the warning, the Appellant could not meet up with the time extended to it, to complete the project.
With the expiry of the 1st period extended to the appellant without completing the project, the Appellant wrote another letter dated 17th July, 2006 requesting for further extension of time to complete the project to the end of 30th March, 2007. See page 62 of the main record of appeal. The 1st Respondent approved the Appellant’s request to complete the work up the said 30th March, 2007. See the 1st Respondent’s letter dated 8th August, 2006 on page 66 of the main record of appeal.
For the 3rd time, the Appellant could not fulfill its obligation under the contract to meet up with the deadline of completion to the said 30th March, 2007. Thus, on 4th April, 2007, appellant requested for additional extension of time to end the project till 30th December, 2007. See page 67 of the main record of appeal.
Graciously as usual, the 1st Respondent obliged the Appellant with the said request. See page 70 of the main record of appeal. It pertinent to state that in all the three applications for extension of time made by the Appellant, the Appellant kept citing similar reasons for not completing the project.
The 1st Respondent at different occasions gave the Appellant letters of warning to complete the project. See pages 71, 72 and 75 of the main record of appeal. Though the Appellant could not again complete the project on or before 30th March, 2007, in February, 2008, Appellant requested for more extension of time, this time around to end the project to the end of 30th December, 2008 citing disturbance from one community located at Kanyang as the major reason for not completing the project. See pages 77 – 78 of the main record of appeal. Before the 1st Respondent obliged the Appellant with this request, the 1st Respondent requested the Appellant to submit a realistic work programme that can see to the end of the project. See page 81 of the main record of appeal.
The Appellant responded with a letter dated 6th May, 2008 and submitted work programme to the 1st Respondent covering a period of two (2) years commencing from the month of June, 2008 to June, 2010 within which the work will be completed. See pages 82 – 83 of the main record of appeal. With the said new work programme, the 1st Respondent extended the period for the completion of the contract in favour of the Appellant to 29th June, 2010. See page 84 of the main record of appeal. Despite the above extension, the 1st Respondent continued following the Appellant with warning letters on slow progress of the work.
However, instead of the appellant concentrating on completing the project as approved for him by the 1st Respondent, on 4th September, 2009, the Appellant wrote to the 1st Respondent requesting for upward review of the contract rate from 3, 722,169,685.08 to 7,916,576,209.01. See pages 39 – 47 of the supplementary record of appeal. The 1st Respondent granted anticipatory approval to the Appellant subject to the approval of Bureau of Public Procurement and Federal Executive Council for the upward review of the contract sum.
As indicated from the reports of the two committees constituted to reassess the current capacity of the Appellant in undertaking the outstanding project, from March, 2011 to January, 2012 up to 29th November, 2012 the percentage of the work completed remained between 29.960/o to 30%. See pages 368 – 370, 384 – 390 of the main record of appeal and page 50 of the supplementary record of appeal.
The position of the law is that outside oral evidence, a Court has a duty to scrutinize and examine closely all contractual documents duly admitted as exhibits to determine whether there exists a contract between the parties or breach that can terminate the contract. See BFI Group COTP Vs BPE (2012) 18 NWLR (part 1332) page 209 at page 235 paragraphs D – D (SC). In Ezenwa Vs K.S.H.S.M.B (2011) 9 NWLR (part 1251) page 89 at page 118 paragraphs D – E, the Court held that the duty on a trial Court is to properly evaluate the contents of a documentary exhibits. See also Tangale Traditional Council Vs Fawu (2001) 17 NWLR (part 742) 293; Ogun Vs Asemah (2002) 4 NWLR (part 756) 208.
In the instant case, from the exhibits tendered before the lower Court, it is clear that the contract is regulated by several documents, to wit contractual agreements. By the letter for the award of the contract and four other letters to which the 1st Respondent extended time for the Appellant to complete the project, it is clear that the parties intended to make the time as of essence in the performance of the contract. It is the law that time is of essence where the parties have expressly made it so, or where circumstances show that it is intended to be of essence or where a definite time is fixed for execution of the contract. Thus, failure to perform the contract within the limit will constitute a breach. See Nwaolisah Vs Nwabufoh (2011) 14 NWLR (part 1268) page 600 at page 631 paragraphs G – H.
In the instant case, the Appellant is in breach of the contract for the failure to execute the project within the time limit agreed by the parties or as extended. As pointed earlier, before the 1st Respondent approved the last extension granted to the appellant, the Appellant had to submit a realistic work programme that indicated the end of the project. The appellant proposed to complete the project in June, 2010 and the 1st Respondent agreed to that. However, up to the time of terminating the contract in November, 2012, the percentage of work done was 30%. The case of Nwaolisah Vs Nwabufoh cited (supra), was similar to the instant case where time was stipulated for the clearance of the Appellants container by the Respondent. The Respondent promised to perform his contractual obligation within month. The Respondent failed to discharge his obligation within the said period, the Supreme Court per Galadima, JSC as page 639 Paragraphs D – H held:
“I consider in this case that time factor was of essence. The parties embraced this as their contractual obligation. The respondent promised to clear the appellant’s container within one month. He changed his fees to meet this target, Container shipped abroad to Port Harcourt customs is the subject matter. Time is stipulated, usually, within which such goods must be cleared otherwise it could be declared as “overtime cargo” and then auctioned. As professional and experienced customs clearing agent, the respondent knew this. He was quite conversant with the process any procedure required for the procurement of necessary documents including the import license. Agreement was concluded with the appellant in October, 1984. He delayed until February, 1985 when he came to demand for extra sum of N35,000.00 Two months thereafter that is on 7/4/1986 he now wrote the appellant demanding for certain documents to facilitate the clearance of the goods, that was almost two years after he entered into the contract to clear the goods within a month. The appellant lost his consignment which landed at the wharf since July, 1984. I cannot see how the two Courts below came to the conclusion that the parties were in pari delicto as to who breach the contract. I find that the respondent was blameworthy for the breach of contract in the circumstance of this case.”
In the instant case, the 1st Respondent having performed its obligation under the contract by making the advance payment up to 25% of the total contract sum and set the time limit when which the Appellant was to deliver then the Appellant cannot shift blame on the 1st Respondent for its (appellant) failure.
A clear case of abandonment of the contract or the Appellant is not executing the works in accordance with the contract or is persistently or flagrantly neglecting to coming out to his obligations under the contract has been established against the appellant.
Clause 63 of the Federal Government of Nigeria Contract Agreement and standard conditions of contract (Road Works) Volume 2 re-edited in July, 1999 provides thus:
“Forfeiture and Termination 63. If the contractor shall become bankrupt or have a receiving order made against him or shall present his petition in bankruptcy or shall make an arrangement with or assignment in favour of his creditors or (being a corporation) shall go into liquidation (other than voluntary liquidation for the purpose of amalgamation or reconstruction), or if the contractor shall assign the contract without the consent in writing of the Employer first obtained, or shall have an execution levied on his goods, or if the Engineer shall certify in writing to the employer that in his own opinion the Contractor:
a) Has abandoned the Contract or
b) Without reasonable excuse has failed to commence the works or has suspended the progress of the works for 28 days after receiving from the Engineer written notice to proceed, or has failed to proceed with the works in accordance with the programme and any amendment approved by the Engineer under clause 14 hereof or
c) Has failed to remove from the site or to pull down and replace work for 28 days after receiving from the Engineer written notice that the said materials or work has been condemned and rejected by the Engineer under these conditions or
d) Is not executing the works in accordance with the contract or is persistently or flagrantly neglecting to carry out his obligations under the contract or
e) Has to the determent of good workmanship or in defiance of the Engineer’s instructions to the contrary sub-let any part of the contract or
f) Has failed to comply with his obligations to observe the Laws, Regulations and requirements more particularly referred to in Sub-clause (l) of Clause 34.
Then the Employer may after giving 14 days notice in writing to the contractor enter upon the site and the works and expel the Contract therefrom without thereby avoiding the contract or releasing the contract from any of his obligations or liabilities under the contract or affecting the rights and powers conferred on the Employer or the Engineer by the Contract and may himself complete the works or may employ any other contractor to complete works and the Employer or such other contract may use for such completion so much of the construction plant, temporary works and materials which have been deemed to become the property of the Employer under Clause 53 as he or they may think proper and the Employer may at any time sell any of the said construction plant, temporary works and unused materials and apply the proceeds of sales in or towards the satisfaction of any sums due or which may become due to him from the Contractor under the contract.
From the above clauses, once it is established that the Appellant is in breach of any of the content of clause 63, the contract can be validly terminated. The letter of termination expressly referred to clause 63. The reasons given for the termination clearly fall within clause 63. It has to be noted that the contract was initially to last for two years that is 2003 to 2005, but various extensions made the life span was extended to 2010. As 2012 when it was terminated the achievement recorded was 20.96% to 30%. The Appellant was in breach of the contract and the termination under clause 63 as earlier said was validly made.
The other aspect worthy of consideration is the procedure for the termination of the contract i.e the 14 days notice in writing from the 1st Respondent to the Appellant. In this case, the Appellant was duly served with the said 14 days notice. See letter of termination of the contract dated 29th November, 2012 on pages 50 – 51. It provides as follows:
“You are therefore hereby given fourteen (14) days Notice of the Ministry’s intention to enter upon the site and the works and expel your Company therefrom. This Notice shall be effective from the date of service of this letter on you. Upon entry into the site and the works, the Ministry shall carry out a joint measurement of works with your company in accordance with the clause 63(2) of the standard conditions of service.”
The Appellant is not denying that he was served with the above notice, the argument that the 1st Respondent did not follow due process in terminating its contract with the Appellant cannot be sustained in view of the fact that the 1st Respondent duly adhered to the terms and conditions of the contract before terminating the contract.
The law is trite that the onus is on the party who asserts breach of contract, to prove same before the burden will shift to the other party. See Ezenwa Vs Ekong (1999) 11 NWLR (part 625) 55; Bikay Engineering Ltd Vs Governor Ondo State & Ors (2013) LPELR 20890 (CA).
In the instant appeal, the Appellant has failed to discharge the primary burden of proof that by terminating the contract against the Appellant, the Respondent had breached any of the terms of the contract made by the parties. In view of the foregoing, it is my humble view that the lower Court was right when it held that the contract was rightly terminated by the 1st Respondent against the Appellant.
The Appellant claimed for special damages in the sum of N260,045,114.19 against the 1st Respondent, being total interest in all delayed payments of mobilization fee and interim certificates at 24.61%. It was the contention of the 1st Respondent on the Appellant?s claim that the Appellant specifically pleaded the interim certificates, but same were not tendered in evidence.
Counsel further submitted that the Appellant is required of him to first exhibit the date the various certificates was raised and to also exhibit his bank statement showing various dates when payments were effected into his account by the 1st Respondent.
The law has long been settled that pleadings however strong and convincing the averments may be, without evidence in proof thereof goes to no issue. Evidence must be led to prove the facts relied on by the party or to sustain allegations raised in pleadings. A mere averment in pleadings proves nothing unless admitted. See UBN Plc Vs Astra Builders (W.A) Ltd (2010) 5 NWLR (part 1186) 1 SC. The 1st Respondent in the instant case does not admit the said Appellant’s claim. In the absence of prove from the Appellant, the claim must fail.
On the other aspect of the Appellant’s claim of special damage in the sum of N1,303,759,389.78 plus 10% interest per annum on the said sum. This claim was anchored on the 1st Respondent’s termination of the Appellant’s contract. It has been established in this judgment that the contract was lawfully terminated by the 1st Respondent. This claim cannot also succeed in the exercise of the 1st Respondent’s lawful authority. It is the law that special damages can be awarded to the plaintiff where specific injuries are suffered as a result of a wrongful act of the Defendant and strictly proved.
See Ozigbu Eng. Co. Ltd Vs Iwuamadi (2009) 16 NWLR (part 1166) page 62. In the instant case, no wrong was committed by the 1st Respondent as a result of the termination of the appellant’s contract. This claim too must fail.
Further, the Appellant claimed general damages for breach of contract in the sum of N2,500,000.00k. The law is that once a breach of contract is established, damages follow. General damages are those losses that flow naturally from the adversary and it is generally presumed by law as it need not be pleaded or proved. General damages are awarded by the Court to assuage the loss caused by an act of the adversary. See Union Bank Vs Odusote Bookstores Ltd (1995) 9 NWLR (part 421) 558, Unity Bank Plc Vs Jahswill Onwudiwe & Anor (2015) LPELR – 24907 (CA). In the instant case, the Plaintiff/Appellant did not succeed in establishing that the 1st Respondent committed any breach of contract against him. The claim therefore collapses with the Appellant’s case.
The 1st Respondent on the other hand counter claimed against the Appellant for the sum of N865,542,421.21 which is the outstanding unrecovered amount of the Advance payment made to the plaintiff by the 1st Defendant/1st Respondent among other reliefs. As held in a numerous authority a counter-claim is in the same position as an action, being itself a cross-action and subject to the same rules of Court as regards pleadings. See Dabup Vs Kolo (1993) 12 SCNJ 1.
The 1st Respondent led evidence in proving their counter-claim. In the DW1’s evidence-in-chief, it was testified that out of the outstanding Advance payment paid to the Appellant by the 1st Respondent, the 1st Respondent received the sum of N65,000,000.00 from the Appellant. The DW1 was cross-examined by the Appellant’s counsel before the lower Court, but failed to controvert his evidence. It appears that the Appellant failed to defend the 1st Respondent’s counter-claim. By law, in the absence of a defence to a counter-claim, the Court is duty bound in such a situation to enter judgment for the claim in the counter claim. See Dabup Vs Kolo (supra); Broad Bank of Nigeria Ltd Vs Zamogas Nig Ltd (2011) LPELR 3892 (CA) page 61 at paragraphs B – D. On failure of the Appellant’s counsel to challenge or controvert the evidence of DW1 in proof of his counter claim, the Supreme Court in the case of Leadway Assurance Company Limited Vs Zeco Nig. Ltd (2004) LPELR – 1773 (SC) held thus:
“The law in this regard is settled. Where evidence given by a party to any proceedings was not challenged by the opposite party who had opportunity to do so, the Court of trial has a duty to act on the unchallenged evidence before it.”
In consequence of the foregoing, I humbly hold the opinion that the lower Court was right in granting the claim. Flowing from all that has been said in the resolution of this issue, I resolve the issue against the appellant and in favour of the Respondents.
Having resolved the lone issue for determination in this appeal against the Appellant, I have no hesitation to hold that the Appellant’s appeal lacks merit, same is hereby dismissed. The judgment of the lower Court in suit No. FCT/HC/1313/2012 presided over by Hon. Justice S. E. Aladetoyinbo delivered on the 28th June, 2016 is hereby affirmed. There shall be no order as to costs.
ABDU ABOKI, J.C.A.: I had the privilege of reading before now, a draft of the lead judgment just delivered by my Learned Brother ADAMU JAURO, JCA.
His Lordship has prudently and diligently dealt with the lone issue that arose for determination.
I agree with his reasoning and conclusion that the appeal lacks merit and ought to be dismissed. These findings and conclusions flowed from the evidence adduced at the trial. The facts leading to this appeal and the reliefs sought have been adequately marshaled out in the lead judgment and I need not repeat them.
I only add for emphasis that in the construction of the terms of a contract, the meaning to be placed on it, is that which is the plain, clear and obvious result of the terms used. A contract or document is to be construed in its ordinary meaning as question of fact. Thus, where the words of a contract agreement or document are clear, the operative words in it should be given their simple and ordinary grammatical meaning. See DALEK (NIG) LTD v. OMPADEC (2007) 7 NWLR (PT 1033) 402; U.B.N. LTD v. SAX (NIG) LTD (1994) 8 NWLR (PT. 361) 402.
In the appeal under consideration, it is the contention of the Appellant that the 1st Respondent wrongfully terminated its contract which amounted to a breach of their contractual agreement.
It is on record that the contract was initially awarded to the Appellant by the 1st Respondent for the Rehabilitation and Asphalt overlay of Ikorn Wula Obudu Road and Obudu Cattle Ranch Roads Routes 454 and 466 in Cross Rivers State Contract No. 5634 dated 14th January, 2003. It is also borne out of the Record that the Appellant, contrary to the terms and conditions which regulate the contract agreement, did not complete the project at the required time even after the 1st Respondent graciously granted it extensions to enable the completion of the project.
The law is settled that where time is of the essence and where the parties have expressly made it so, or where circumstances show that it is intended to be of the essence, or where a definite time is fixed for execution of a mercantile contract even though time is not expressly made of the essence, the failure to perform the contract within the time limit will constitute a breach. See MAZIN ENG. LTD v. TOWER ALUMINIUM (1993) 5 NWLR (PT 295) 526; FGN v. ZEBRA ENERGY LTD (2002) 18 NWLR (PT 798) 162
In the instant case, the 1st Respondent having performed its obligation under the contract by making the advance payment up to 25% of the total contract sum and set the time limit within which the Appellant was to deliver, and the Appellant having failed to deliver at the agreed time, was a clear case of abandonment of the contract by the Appellant, and which constituted a breach, of the content of Clause 63 of the Federal Government of Nigeria Contract Agreement and Standard Conditions of Contract (Road Works) Volume 2 re-edition in July 1999.
It is on account of this and the fuller reasons adduced in the lead judgment of my Learned Brother ADAMU JAURO, JCA, that I also find the appeal to be devoid of merit and same is accordingly dismissed.
I abide by the orders contained in the lead judgment.
EMMANUEL AKOMAYE AGIM, J.C.A.: I had a preview of the judgment just delivered by my Learned brother, Lord Justice Adamu Jauro, JCA, I agree with the reasoning, conclusions and orders therein.
Appearances:
Ahmed Maiwada, Esq. with him, Ikeazor Igbokwe, Esq.For Appellant(s)
Kayode Adebayo, Esq. for the 1st Respondent.
Mrs. Ngosso T. Ucheagbu (Senior State Counsel, Federal Ministry of Justice) for the 2nd RespondentFor Respondent(s)
