MARWA MAGDI CONSTRUCTION COMPANY LIMITED v. SHIRKE BACK-UP NIGERIA LIMITED
(2019)LCN/13237(CA)
In The Court of Appeal of Nigeria
On Friday, the 10th day of May, 2019
CA/IB/262/2016
RATIO
ORDER OF DISMISSAL: IMPLICATION
An order of dismissal creates a bar to subsequent suits and operates as estoppel per rem judicatam. THE YOUNG SHALL GROW MOTORS LTD V. AMBROSE O. OKONKWO & ORS (2010) 3 5 SC (PT.111) 124..
By the dismissal, even the money alleged to be due to the appellant is gone, dismissed.PER NONYEREM OKORONKWO, J.C.A.
JUSTICES
JIMI OLUKAYODE BADA Justice of The Court of Appeal of Nigeria
NONYEREM OKORONKWO Justice of The Court of Appeal of Nigeria
FOLASADE AYODEJI OJO Justice of The Court of Appeal of Nigeria
Between
MARWA MAGDI CONSTRUCTION CO. LTD Appellant(s)
AND
SHIRKE BACK-UP NIGERIA LTD Respondent(s)
NONYEREM OKORONKWO, J.C.A. (Delivering the Leading Judgment): The appeal herein is against the judgment of the Ogun State High Court per Osinuga J. delivered on August 12, 2015 wherein the judgment concluded thus:
?Consequently, the counter-claim of the defendant succeeds. Damages is awarded in the sum N500,000.00 (five hundred thousand naira).
Consequently, the claim of the claimant fails and it is accordingly dismissed. On the other hand, the defendant was able to establish its counter-claim of the defendant succeeds.?
The claim of the appellant at the lower Court was as follows:
1. The sum of N90,039,540.00 (Ninety Million, Thirty-nine Thousand, Five Hundred and Forty Thousand Naira) being money owed the claimant by the defendant in respect of the contract for the Construction of the ?ware house and silo foundation? at the defendant?s site in Ikenne, Ogun State.
2. The sum of N50,000,000.00 (Fifty Million Naira) as general damages for the defendant?s breach of contractual obligations to the claimant in respect of the contract for the Construction of the ware house and
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silo foundation? at the defendant?s site in Ikenne, Ogun State.
3. Interest of 10% annually in respect of the amounts mentioned respectively in paragraphs 17(1) and 17(2) above, from the date of filing this action till the date judgment is delivered therein and thereafter, interest of 10% annually on the judgment debt till same is fully liquidated by the defendant.
While the respondent in its statement of defence subjoined a counter-claim whereby respondent claimed against the appellant/claimant as follows:
i. The sum of N12,352,000.00 (Twelve Million, Three Hundred and Fifty Two Thousand Naira) as contractual penalty for breach of contract at the agreed rate of 0.02% of consideration from 24th April, 2010 to 30th March, 2011.
ii. Damages for breach of contract.
By the pleadings of the parties, there is a contract by which respondent offered the appellant the construction of a warehouse and silo foundation of a contract price of N193,000,000.00 at the respondents site at Ikenne, Ogun State and subject to the terms specified in the letter of offer dated November 20, 2009. Although there is a letter of
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offer which was received in evidence as Exhibit ?A?, there is no corresponding acceptance to the offer but nonetheless, the parties proceeded to commence the execution of the contract with the respondent paying the advance payment of 15% being (N28,950,000.00) to the appellant subject to the appellant providing a performance bond from an approved bank. The contract was according to stipulation in Exhibit ?A?, to be completed in 90 days and 150 days for the warehouse and silo foundation and was to attract a bonus payment of N5,000,000.00 for ?Quality and Timely Delivery of works payable at the absolute discretion of the company upon completion of work and delivery? according to specification.
The appellant commenced work but in the course of time alleged interference by the respondent who, appellant alleged engaged other workers to work along the appellant and also refused to pay the appellant for work done for various stages for which appellant has earned payment. For these stages of work done, the appellant claimed the sum of N90,039,540.00 from the respondent which the respondent refused to pay.
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For the respondent, it was alleged that time was of the essence of the contract and that the appellant did a poor job and was in breach of the stipulation as to time necessitating the respondent taking measures to salvage the works particularly after the Managing Director of the appellant travelled out of the country without the knowledge of the respondent thereby abandoning the site. These breaches caused the respondent as defendant to undertake to complete the work.
Following the takeover of the works by the respondent, the appellant made a claim for work done for the respondent. The following pleadings of the defendant/respondent at paragraphs 13, 14, 15 and 17 by the respondent/defendant are herewith reproduced.
13. The defendant states that following the receipt of the claimants valuation dated 20th June, 2010 it contested the basis of the claimants valuation and forwarded the valuation done by Messrs. Project Costs Limited and invited the claimant to a site meeting with the Project Managers and Quantity Surveyors to jointly establish and measure the actual level of work done on site but the claimants failed or refused to attend or take part in any site
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meeting. The defendant shall rely on its letter dated 31st August, 2010 at the trial of this action.
14. The defendant denies paragraphs 11, 12 and 13 of the statement of claim and states that it is not liable to the claimant for the sum of N90,039,540.00 (Ninety Million, Thirty-Nine Thousand, Five Hundred and Forty Naira) but states that the correct valuation is contained in the report of the Project Managers and Quantity Surveyors Messrs. Project Costs Limited dated 6th July, 2010 which stated the figure as N35,151,614.71k (Thirty-Five Million, One Hundred and Fifty One Thousand, Six Hundred and Fourteen Naira , Seventy-One Kobo).
15. The defendant states that the said figure of N35,151,614.71k (Thirty-Five Million, One Hundred and Fifty-One Thousand, Six Hundred and Fourteen Naira, Seventy-One Kobo) stated by the Project Manager includes works which were jointly financed and executed by the claimant and the defendant and the defendant shall seek a deduction of the said sum and computation of the balance.
17. The defendant avers that it is entitled to set-off the amount claimed in the counter-claim and the deduction for works which
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were jointly financed and executed by the claimant and the defendant against the amount claimed by the claimant.
By these paragraphs of the statement of defence, the respondent clearly admit the sum of (N35,151,614,71k) (Thirty-Five Million, One Hundred and Fifty-One Thousand, Six Hundred and Fourteen Thousand Naira, Seventy-One kobo) as due to the appellant for work done as estimated by the Project Manager of the respondent, out of which sum respondent claim entitlement to a set off for work which were jointly financed and executed by ?claimant and defendant? against the amount claimed by the claimant.
However, in the judgment of the lower Court, the claim of the appellant for work done was dismissed while the counter-claim of the respondent was said to succeed.
Dissatisfied with the judgment, the appellant by notice of appeal filed 19/10/15 appealed on five (5) grounds of appeal viz:
(i) GROUND ONE
ERROR IN LAW
The learned trial Judge erred in law when he held as follows in his judgment:
?Consequently, I hold that in the instant, giving the operative words in paragraph 6 of Exh.?A?, a simple
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and grammatical ordinary meaning, time remains of essence in the contract, and paragraph 1 and 4 of same, time is of essence in the contract. The submission of the Claimant?s counsel is therefore overruled; while I uphold the submission of Mr. Nwokwu that indeed, the parties intended time to be of paramount essence to the contract. Consequently, issue 1 is resolved in favour of the defendant?.
(ii) GROUND TWO
ERROR IN LAW
The learned trial Judge erred in law when after he held as follows:
?This assertion I find it to be inconsistent with the evidence of CW1 when in Cross Examination he said ?yes’ on the same Exh. ?E? the sum of N58M plus was paid to me. The total project was of N100M, but they paid me a small amount. I was later asked by the defendant to use my money. After I had used my money partly I told them that I could not continue with the project, then, they asked me to stop the project. We waited for about 6 months; thereafter I traveled to my country
Decided that:
Other than that, the claimant abandoned the project with no intention to come back to same. The
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submission of the learned counsel Mr. Alausa in this regard is therefore overruled.?
(iii) GROUND THREE
ERROR OF LAW
The trial Court erred in law after considering the conduct of parties, more particularly the fact that the claimant was asked to use his money and when he exhausted his money and demanded for further payment, which the defendant refused to advance as a result of which the claimant stopped further work, held;
From the above, can it be rightly said that the defendant breached the agreement? I do not have any struggle arriving at no for an answer.?
(iv) GROUND FOUR
ERROR IN LAW
The learned trial Judge erred in law when he held that:
?Relying on the above decisions, and having carefully reviewed the evidence before me and all the exhibits tendered. I hold that upon preponderance of evidence, the claimant fails to establish the claim against the defendant.?
(v) GROUND FIVE
ERROR OF LAW
The learned trial Court erred in law when he held that:
Thus following the above decision of their lordships of the Supreme Court, it can be safely concluded that
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in entering into Exh. ?A? the parties reasonably contemplated an occurrence of breach of contract, hence a penalty is imputed in the contract? hence I hold that the claim of contractual penalty as stated in Ex. ?A? is a properly claimed one.?
And therefrom formulated 5 issues for determination viz:
1. Whether the Honourable Trial Court was right to hold in page 181 of the record that a clause in a contract for bonus to be made available only as an addition to the main contract for quality and timely delivery of work can amount to fundamental breach of the contract.
(Distilled from Ground 1 of the Notice of Appeal).
2. Whether the Appellant (Claimant) abandoned the project when in fact the Respondent (Defendant) ordered him to stop the work. (Distilled from Ground 2 of the Notice of Appeal).
3. Whether the Honourable Trial Court was right after evaluating the evidence before it arrived at a decision in page 186 of the record thus: ?From the above, can it be rightly said that the Defendant breached the agreement? I do not have any struggle arriving no for an answer?. (Distilled from Ground 3 of the Notice of Appeal).
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4. Whether against the weight of evidence, the Honourable Trial Court was right to hold at page 202 of the record that the Appellant (Claimant) has not established its claim. (Distilled from Ground 4 of the Notice of Appeal).
5. Whether the Honourable Trial Court after evaluating Exhibit ?A? (the Contract Agreement at page 13 of the records) was right to hold that the penalty clause was for a breach of contract and not for late completion. (Distilled from Ground 5 of the Notice of Appeal).
In response the respondent filed a brief of argument and raised two issue for determination thus:
i. Whether the lower Court was wrong in its evaluation of exhibits tendered in this matter, its findings that time was of essence, that the Appellant abandoned the contract and thereby breached the fundamental term thereof. (Grounds 1, 2 and 3).
ii. Whether the lower Court was wrong in holding that from the preponderance of evidence and exhibits tendered the Appellant failed to establish its claims and that the penalty for the breach in exhibit ?A? was properly claimed by the Respondent. (Grounds 4 and 5).
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There is however one pertinent consideration which I need to bring to light and possibly frame an issue on. It is that the respondent in paragraphs 13, 14, 15 and 17 of the statement of defence admitted part of the claim of the claimant and agreed that by its Project Managers estimation, the claimants figure for work done was N35,1515,614.71k (Thirty-Five Million, One Hundred and Fifty-One Thousand and Seventy-One Kobo) out of which respondent claims a set off or deduction as indicated earlier. The appellant was entitled to such money as admitted by the respondent in those pleadings and in evidence on a quantum meruit basis. The issue I would now formulate is this;
?Was the trial Court not in error to have dismissed the appellant?s claim entirely without ascertaining what is actually due to the respondent from those admission, and entering judgment for the appellant on whatever is due to the appellant.?
F.B.N. PLC V. OZOKWERE (2014) 3 NWLR (PT.1395) 439 at 458.
In framing the above issue arising from the pleading and evidence but omitted by the parties, the Court of
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Appeal is at liberty to reject issues framed by the parties and frame its own issue if, in its view the issue of the parties will not lead to a proper determination of the appeal. SeeJOHN BANKOLE & 3 ORS V. MOJIDI PELU & 3 ORS. (1991) 11 ? 12 SC 116. The Court is therefore enabled under its rules to raise a substantial point of law which was not brought to the attention of the lower Court and made a ground of appeal; Inua v. Nta (1961) 1 ALL NLR 576. The Court will therefore deal with a point which is disclosed on the pleading and evidence which goes to the root of the action notwithstanding that such point was not raised at trial nor on appeal: OLEGBADE V. ADEKOYA (1962) 2 ALL NLR 52. In any event the issue arises from the pleadings of the parties.
In dealing with this issue, having dismissed the appellant?s claim entirely without reservation, what becomes of the amount admitted in paragraphs 14 and 15 for N35,151,161,71k less respondents deductions.
To dismiss an action means an order or judgment finally disposing of an action and of whatever is the rights that were in contention. SANUSI V. AYOOLA (1992) 9 NWLR (PT.265) 275 AT 295 – 296.
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An order of dismissal creates a bar to subsequent suits and operates as estoppel per rem judicatam. THE YOUNG SHALL GROW MOTORS LTD V. AMBROSE O. OKONKWO & ORS (2010) 3 ? 5 SC (PT.111) 124?..
By the dismissal, even the money alleged to be due to the appellant is gone, dismissed.
In the case of the appellant, monetary claim admitted will be lost. This is where the trial Court misconceived the law and misdirected itself. As the respondent still claims a deduction or offset off from this sum, the judgment as it is cannot stand but must be set aside on that issue as having not decided the parties issues on the case.
Accordingly, the judgment of the trial Court of August 12, 2015 is set aside. It is hereby ordered that a new trial be had before another Judge as the Chief Judge of Ogun State may direct.
JIMI OLUKAYODE BADA, J.C.A.: I had the advantage of reading in draft the Lead Judgment of my learned brother NONYEREM OKORONKWO, JCA, just delivered.
I am also of the view that the judgment delivered by the lower Court on 12/8/2015 be set aside. And in its place the case
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be remitted to the Chief Judge of Ogun State, who shall assign it to another Judge to be heard de novo.
FOLASADE AYODEJI OJO, J.C.A.: I have read before now the lead judgment just delivered by my learned brother, Nonyerem Okoronkwo, JCA. I agree entirely with the reasoning and conclusion.
By a letter of notification of contract dated 23rd July 2009, the National Food Reserve Agency (An agency of the Federal Ministry of Agriculture and Water Resources) awarded a contract to the Respondent Company to construct a Silo Complex at Ikenne, Ogun State. The Respondent Company outsourced the construction of a ware house and Silo Foundation to the Appellant Company vide a letter of Offer dated 20th November 2009. A dispute arose between the Appellant and the Respondent which led to the suit at the lower Court.
From the pleadings on record parties are ad idem that there was part performance of the contract. The Appellant’s claim amongst others was for the sum of (Ninety Million, Thirty Nine Thousand, Five Hundred and Forty Naira) for work done. The Appellant’s claim was dismissed by the lower Court,
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Upon a perusal of the pleadings of parties particularly the statement of defence of the Respondent, it would appear the Respondent admitted the Appellant was entitled to some money for work done. See paragraphs 13, 14 and 15 of the statement of defence.
The law is trite that where a defendant admits part of a definite sum, the admission constitutes a solemn declaration of Defendant’s indebtedness to the claimant. The Court should ordinarily entertain no further dispute on the admitted claim. The claimant is entitled to judgment on the admitted sum thereon leaving the balance to be contested. In dismissing the Appellant’s claim in its entirety, the trial judge failed to consider the admitted indebtedness of the Respondent. This has occasioned a miscarriage of justice to the Appellant.
For this and fuller reasons given in the lead judgment, I agree with my learned brother that this appeal be allowed and the judgment of the lower Court set aside. I also abide by all the consequential orders made by His Lordship.
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Appearances:
B. H. Bwala with him, Kikelomo OlarewajuFor Appellant(s)
John Nwokwu with him, Agnes UsulorFor Respondent(s)
Appearances
B. H. Bwala with him, Kikelomo OlarewajuFor Appellant
AND
John Nwokwu with him, Agnes UsulorFor Respondent
