ASSET MANAGEMENT CORPORATION OF NIGERIA & ANOR v. ISREAL AEROSPACE INDUSTRIES LIMITED & ANOR
(2019)LCN/12756(CA)
In The Court of Appeal of Nigeria
On Thursday, the 28th day of February, 2019
CA/L/253/17
RATIO
ACTION: APPLICABLE LAW WHEN A CAUSE OF ACTION ARISES
“It is settled law that the applicable law to any cause of action is the law in force or in existence at the time the cause of action arose and not at the time the action was instituted. See ADAH Vs. NYSC (2004) LPELR 69 (SC); OGBORU & ANOR Vs. UDUAGHAN & ORS (2011) LPELR 8236 (SC); SPDC Vs. ANARO & ORS (2015) LPELR 24750 (SC). ” PER TIJJANI ABUBAKAR, J.C.A.
ESTOPPEL: ESTOPPEL BY CONDUCT
“The law appears settled to me that where a party by his conduct willfully causes another to believe the existence of certain state of things and induces him to act on that belief, that other party will not be allowed in law to aver the contrary to what he presented, based on the equitable principle of estoppel by conduct, emphasized in NSIRIM Vs. NSIRIM (2002) LPELR 8060 (SC); UDE V NWARA & ANOR (1993) LPELR 3289 (SC); PINA Vs. MAI-ANGWA (2018) LPELR?44498 (SC) and C.N. OKPALA & SONS LTD Vs. NB. PLC (2017) LPELR ? 43826 (SC). See also Section 169 of the Evidence Act, 2011.” PER TIJJANI ABUBAKAR, J.C.A.
STATUTE: RETROSPECTIVE EFFECT OF STATUTE
“Generally, no statute shall be construed to have retrospective effect unless such a construction is clearly expressed in the wordings of the statute or arises by necessary and distinct implications. See OJUKWU Vs. OBASANJO & ORS (2004) LPELR 2400 (SC). In AFOLABI & ORS Vs. GOV., OYO STATE & ORS (1985) LPELR 196 (SC), the Supreme Court, per OPUTA, JSC (of blessed memory) held that ‘retrospective laws are prima facie of questionable policy and contrary to the general principle that legislation by which human conduct of mankind is to be regulated ought, when introduced, to deal with future acts, and ought not change the character of past transactions carried on upon the faith of the then existing law See also ADESANOYE Vs. ADEWOLE (2006) LPELR 143 (SC). It is therefore my firm view, contrary to the contention of the Appellants’ counsel that, in so far as there are no express wordings to the contrary, the 2015 Amendment to the AMCON Act will only affect rights which came into existence after the amendment was passed. It is rightly stated in the Amendment Act that its commencement date is 26th May, 2015 and in law, where a commencement date is provided in a statute, it is that date that the law is regarded to have come into force. See YABUGBE Vs. C.O.P. (1992) LPELR 3505 (SC); YARE Vs. NUNKU & ORS (1995) LPELR ? 3514 (SC).” PER TIJJANI ABUBAKAR, J.C.A.
JUSTICES
TIJJANI ABUBAKAR Justice of The Court of Appeal of Nigeria
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO Justice of The Court of Appeal of Nigeria
JAMILU YAMMAMA TUKUR Justice of The Court of Appeal of Nigeria
Between
1. ASSET MANAGEMENT CORPORATION OF NIGERIA
2. BOEING 737 AIRCRAFT WITH SERIAL NO 29431 Appellant(s)
AND
1. ISREAL AEROSPACE INDUSTRIES LIMITED
2. AIR NIGERIA DEVELOPMENT LIMITED Respondent(s)
TIJJANI ABUBAKAR, J.C.A. (Delivering the Leading Judgment):
This appeal stems from the Judgment of the Federal High Court sitting in the Lagos Judicial Division delivered by KURYA J. on the 28th day of October, 2016 in Suit No: FHC/L/CS/117/2012 as contained at pages 1689 ? 1722 of the Records of Appeal wherein the learned trial Judge gave judgment in favour of the 1st Respondent and awarded general and special damages in addition to the award of interests at the rate of 21% against the 1st Appellant and in favour of the 1st Respondent.
The suit was instituted at the Court below by the 1st Respondent herein (as Plaintiff) against the 2nd Respondent and 2nd Appellant (as 1st and 2nd Defendants respectively) by a Writ of Summons and Statement of Claim dated the 20th day of September, 2012 as found at pages 9 – 15 of the Records of Appeal. The 1st Respondent’s claim was that it leased two aircraft engines CFM 56-3C1 ESN 724.458 and CFM 56-3C1 ESN 860.151 to the 2nd Respondent as replacement for the 2nd Respondent?s Boeing 737 aircraft – the 2nd Appellant; and that upon the expiration of the terms of the lease, the 2nd Respondent failed to return the engine and pay the outstanding lease charges despite several demands and promises. The 1st Appellant and 1st Respondent entered into discussions as a result of the 1st Appellants acquisition of the 2nd Respondent’s Non Performing Loan (NPL) with the United Bank for Africa (UBA); the discussions culminated into the Agreement contained at pages 942 – 966 of the Records of Appeal. Subsequently, the 1st Appellant was joined as 3rd Defendant pursuant to an application dated 8th January, 2014 (contained at pages 824 – 839 of the Records of Appeal). Parties exchanged pleadings and at the conclusion of the trial, judgment was given in favour of the 1st Respondent.
Miffed by the decision of the lower Court, the Appellants filed this appeal via an Amended Notice of Appeal dated and filed on the 21st day of March, 2018 containing 10 (ten) Grounds of Appeal. The Appellants’ amended Brief of Argument was filed by Solomon Edoh Esq on the 21st day of March, 2018. The Appellants’ Amended Notice of Appeal and amended Brief were deemed as properly filed and served on the 12th of April, 2018.
The 1st Respondent’s Brief was filed by Essien E. Udom Esq. on the 11th day of April, 2018 but deemed as properly filed and served on the 12th day of April, 2018. The learned Counsel for the Appellants filed a Reply Brief on the 17th day of April, 2018. The 2nd Respondent was neither represented nor filed any brief of argument in this appeal. The learned Counsel for the Appellants nominated the following seven issues for determination.
1. Whether the claim before the Court below was within the Court?s admiralty jurisdiction?
2. Having regards to the Writ of Summons and Statement of Claim, whether the claim before the Court below was a simple contract over which the Court lacked jurisdiction?
3. Whether the acquisition by AMCON, of an Eligible Bank Asset (EBA) from an Eligible Financial Institution (EFI) pursuant to Sections 34 and 44(b) of the AMCON Act amounts to an acquisition of the debtor entity?
4. Having regards to the uncontroverted evidence that the Appellant was not privy to the Lease Agreement between the 1st Respondent and 2nd Respondent, whether the settlement negotiations between the Appellant and the 1st Respondent in respect of the 2nd Respondent?s obligations constituted an admission of liability by the Appellant?
5. In the absence of proof, whether the Court below was right to award interest at the rate of 21% per annum in favour of the Plaintiff?
6. Having regards to evidence that the leased engines CFM 56-3C1 ESN 724.458 and CFM 56-3C1 ESN 860.151 are in the possession of the 1st Respondent and not in the possession or control of the Appellants, whether the Appellants are liable to return the engines to the 1st Respondent?
7. Whether the award of general damages in addition to the award of specific damages and interests, in respect of the same injury, does not amount to double compensation?
The learned Counsel for the 1st Respondent on the other hand crafted 6 (six) issues for determination; the issues are also reproduced as follows:
1. Whether the lower Court was right in holding that it has jurisdiction to entertain the claim of the 1st Respondent.
2. Whether the lower Court was right in holding that the 1st Respondent’s claim falls within the admiralty jurisdiction of the Federal High Court.
3. Whether having regards to the settlement negotiations between the 1st Appellant and the 1st Respondent following that acquisition of all the assets of the 2nd Respondent by the 1st Appellant, the lower Court was right in holding that the 1st Appellant has admitted liability of the 2nd Respondent to the 1st Respondent.
4. Whether having regards to the acquisition by the 1st Appellant of all the assets of the 2nd Respondent and the provisions of Sections 34 and 44 (b) of the AMCON Act, the lower Court was right in holding that the 1st Appellant has inherited the liability of the 2nd Respondent to the 1st Respondent.
5. Whether in the circumstances of this case, the lower Court was right to award interest at the rate of 21% per annum in favour of the 1st Respondent.
6. Whether having regards to the evidence adduced before the lower Court, the award of general damages in addition to the award of specific damages and interest amount to double compensation.
I have carefully considered the issues raised by the counsel on behalf of their respective parties. It is my view that the issues identified by the Appellant, are apt and will accordingly, determine the appeal.
SUBMISSIONS OF COUNSEL
ISSUES ONE AND TWO
On the first issue, learned counsel for the Appellants referred to OKULATE Vs. AWOSANYA (2000) 1 SC 107 and PORTS AND CARGO HANDLINGS SERVICES COMPANY LIMITED & ORS Vs. MIGFO NIGERIA LIMITED & ANOR (2012) LPELR-9725 (SC) to submit that Courts cannot confer jurisdiction on themselves and that jurisdiction can only be conferred by the Statute creating the Court or the Constitution. Counsel referred to Section 251 (g) of the 1999 Constitution of the Federal Republic of Nigeria (as amended) and Section 1 of the Admiralty Jurisdiction Act, Cap A5, LFN, 2010 to argue that the admiralty jurisdiction of the lower Court is clearly delimited and that the instant case does not fall within any of the stipulated categories wherein the lower Court can exercise jurisdiction. Learned counsel relied on PETRO JESSICA & ANOR Vs. LEVENTIST TECHNICAL CO. LTD [1992] NWLR (Pt. 244) Pg. 675 to further contend that the instant case was not in relation to the ownership of aircraft but relates only to rentals in respect of leased aircraft engines.
Learned counsel referred further to Section 4 of the Admiralty Jurisdiction Act, Cap A5, LFN, 2010 to contend that there was no evidence before the lower Court of any Convention in force to which Nigeria is a party; and as such the lower Court could not have assumed jurisdiction over a claim for the recovery of lease rentals of engines. Counsel referred to the findings of the lower Court at pages 1704 – 1705 of the Records of Appeal and submitted that the lower Court erroneously founded its jurisdiction on the premise that it had earlier granted an interim order for the possession of the leased engines under the Federal High Court Admiralty Jurisdiction Procedure Rules, 2011. Learned counsel relied on OHAKIM Vs. AGBASO [2010] 19 NWLR (Pt. 1226) Pg. 172 SC; STALLION (NIG) LTD Vs. EFCC [2008] 7 NWLR (Pt. 1087) Pg. 461 and AGBOGBU Vs. OKOYE [2008] All FWLR (Pt. 414) Pg. 1494 at 1526-1527, Paras. G – B to contend that the jurisdiction of the Court in any matter is determined by the substantive claim before the Court; and that an interim/interlocutory application cannot vest in the Court jurisdiction over a substantive claim.
Learned counsel further cited OKEZIE Vs. FEDERAL ATTORNEY-GENERAL & ANOR (1979) LPELR-2448 (SC) and SHA?ABAN & ANOR Vs. SAMBO & ORS (2010) LPELR-3032 (SC) to submit that the Federal High Court Admiralty Jurisdiction Procedure Rules, 2011 cannot be relied upon to assume jurisdiction over the instant case because the Rules of Court made by the Court cannot confer jurisdiction on that Court. Counsel further relied on WEMA SECURITIES AND FINANCE PLC Vs. NIGERIA AGRICULTURAL INSURANCE CORP (2015) LPELR-24833 (SC) and NURTW & ANOR Vs. RTEAN & ORS (2012) LPELR-7840 (SC) to argue that the mere fact that an aircraft was made a party to the suit does not automatically confer admiralty jurisdiction on the lower Court.
Learned counsel referred to Sections 5 (1), 5(2), 2(2)(a) ? (b), and 2 (3)(u) of the Admiralty Jurisdiction Act to contend that the Act does not permit the institution of an action in rem against an aircraft. Learned counsel referred to IROEGBU Vs. MV CALABAR CARRIER [2008] 5 NWLR (Pt. 1079) Pg. 147 at 170, Para. D; ALUMINIUM MANUFACTURING CO. LTD Vs. N.P.A. [1987] NWLR (Pt. 51) Pg. 475; ADELEKAN Vs. ECULINE NV [2006] 12 NWLR (Pt. 993) Pg. 33 and INTEGRATED TIMBER & PLYWOOD PRODUCTS LTD Vs. UNION BANK NIGERIA PLC (2006) LPELR-1519 (SC) to urge this Court to hold that the subject matter of the instant suit was not within the provisions of the Admiralty Jurisdiction Act.
Submitting on the second issue for determination, Learned counsel for the Appellant relied on WEMA SECURITIES AND FINANCE PLC Vs. NIGERIA AGRICULTURAL INSURANCE CORP (2015) LPELR-24833 (SC) and the Amended Statement of Claim at pages 883 ? 888 of the Records of Appeal to submit that the subject matter of the claim before the lower Court was a simple contract and not a claim in respect of the ownership of an aircraft, or for the salvaging or towing of an aircraft and not a matter by an aircraft operator or in connection with the operation of an aircraft. Counsel argued that the claim was simply for the payment of rental due on a lease agreement in respect of leased engines. Learned counsel referred ADELEKAN Vs. ECULINE NV (Supra) and INTEGRATED TIMBER & PLYWOOD PRODUCTS LTD Vs. UNION BANK NIGERIA PLC (Supra) to submit that a claim in respect of a simple contract and negligence is outside the admiralty jurisdiction of the Federal High Court; and that the lower
Court lacked jurisdiction in respect of the instant case which was a claim in respect of a simple contract. Learned Counsel urged this Court to so hold.
Responding on the two issues argued together by learned Counsel for the Appellants, Learned counsel for the 1st Respondent referred to OMNIA (NIG) LTD Vs. DYKTRADE LTD [2007] 15 NWLR (Pt. 1058) Pg. 576; AYORINDE Vs. ONI [2000] 3 NWLR (Pt. 649) Pg. 348 and NNADI Vs. OKORO [1998] 1 NWLR (Pt. 535) Pg. 573 to submit that the Plaintiff’s cause of action as disclosed in the Writ of summons determines the jurisdiction of the Court; and where the Statement of Claim, which supersedes the Writ of Summons has been filed, the jurisdiction of the Court is determined by the contents and claim in the Statement of Claim. Counsel referred to the 1st Respondent?s Amended Statement of Claim at pages 883 ? 888 of the Records of Appeal to submit that the lower Court had jurisdiction to entertain the 1st Respondent?s claim which falls within the Admiralty Jurisdiction of the Court.
Learned counsel referred to A. W. (NIG.) LTD Vs. SUPERMARITIME (NIG.) LTD [2005] 6 NWLR (Pt. 922) Pg. 563 at 587, Paras. B ? D; Section 1(a) & (d) and 4 of the Admiralty Jurisdiction Act, Cap A5, LFN, 2010; Article XVI of the Convention on International Recognition of Rights in Aircraft 1948 (Fourth Schedule to the Civil Aviation Act, 2006); Articles 1(2)(a), 2, 13 (1) (a), (b) & (d), (u) and 43 of the Protocol to the Convention on International Interest in Mobile Equipment on Matters Specific to Aircraft Equipment (the Cape Town Convention and Protocol) also contained in Section 73 (2) and the Fifth Schedule to the Civil Aviation Act, 2006 to submit that the trial Court is conferred with jurisdiction to hear and determine the 1st Respondent?s suit and that it was on the basis of these enactments that the trial Judge granted the interim reliefs sought by the 1st Respondent at the lower Court pursuant to the Federal High Court of Nigeria Admiralty Jurisdiction Procedure Rules, 2011 on the 20th day of November, 2012.
Learned counsel further referred to Order 19, Rules 1 and 2 of the Admiralty Jurisdiction Procedure Rules, 2011 and Section 5(4)(a) of the Admiralty Jurisdiction Act to submit that the subject matter and issues raised in the instant suit as contained in the 1st Respondent?s Amended Statement of Claim fall squarely within the Admiralty Jurisdiction in rem of the lower Court. Counsel referred to RHEIN MASS UND SEE GMBH Vs. RIVWAY LINES LTD [1998] 5 NWLR (Pt. 549) Pg. 265 at 281, Paras. B ? F and C.S. INC. Vs. M/T ?CINDY GAIA? [2007] 4 NWLR (Pt. 1042) Pg. 222 to submit that the question as to whether an action is to be in rem or in personam is one of mere procedure which does not affect the jurisdiction of the lower Court to entertain the instant suit brought pursuant to its admiralty jurisdiction.
Learned counsel further referred to A. W. (NIG.) LTD Vs. SUPERMARITIME (NIG.) LTD (Supra) at Pg. 587-588, Paras. H ? A to further contend that the foundation of an action in rem is the lien resulting from the personal liability of the owner of the res; that the lien attaches to the res; and that until the lien is discharged by the payment of the outstanding lease rentals, the 1st Respondent has a cause of action against the res which is the 2nd Appellant herein. Counsel submitted that the liability for the unpaid Aircraft Engine lease rentals attaches to the 2nd Appellant giving rise to the 1st Respondent?s lien on the 2nd Appellant. Counsel referred to RHEIN MASS UND SEE GMBH Vs. RIVWAY LINES LTD (Supra) at Pg. 277-278, Paras. G ? A to submit that the lower Court was right in holding that the 1st Respondent?s claim falls within its Admiralty jurisdiction.
Learned counsel further submitted that, contrary to the Appellant’s submission, the 1st Respondent’s claim before the lower Court was not one of simple contract over which the lower Court would have lacked jurisdiction; Counsel referred to Section 251(1)(k) of the 1999 Constitution of the Federal Republic of Nigeria (as amended) and Section 7(1)(k) of the Federal High Court Act, Cap F12, LFN, 2004 to further submit that the 1st Respondent’s suit relates to aviation matters over which the lower Court is vested with jurisdiction. Counsel further referred to Article XVI of the Convention on International Recognition of Rights in Aircraft 1948 and Articles 1(2)(a) of the Protocol to the Convention on International Interest in Mobile Equipment on Matters Specific to Aircraft Equipment (the Cape Town Convention and Protocol) (respectively contained in the Fourth and Fifth Schedule to the Civil Aviation Act, 2006) to argue that the term ‘aircraft’ includes airframe and engines.
Learned counsel for the 1st Respondent argued that Exhibit 60(J) found at page 112 of the Records of Appeal established further that the 1st Respondent’s claim relates to aviation matters; and that the 1st Respondent’s witness testified at pages 970 – 982 of the Records of Appeal that 1st Respondent’s two engines were installed and operated in the 2nd Appellant at all times material to the instant suit. Counsel submitted that the 1st Respondent recovered possession of the said two engines on the 10th day of December, 2012 pursuant to the ex-parte orders made by the lower Court on the 20th day of November, 2012. Learned counsel cited CAMEROON AIRLINES Vs. OTUTUIZU [2011] 4 NWLR (Pt. 1238) Pg. 512 at 537, Para. F and urged this Court to resolve issues 1 and 2 in favour of the 1st Respondent.
In the Reply Brief, the learned Counsel for the Appellants argued that the instant case does not fall within the admiralty jurisdiction of the lower Court as provided by Section 1 of the Admiralty Jurisdiction Act; that any claim brought under any Convention pursuant to Section 4 of the Admiralty Jurisdiction Act must come within the provisions of Section 1 of the Act; and that the provisions of Section 1 of the Admiralty Jurisdiction Act and the Convention on International Recognition of Rights in Aircraft, 1948 will only be applicable if the 1st Respondent’s case was for propriety interest in the engines but that the 1st Respondent?s claim in the instant case was for possessory rights/interest and not propriety rights/interests. Counsel further argued that the 1st Respondent’s claim did not qualify for any recognizable right under the Convention on International Recognition of Rights in Aircraft 1948 because the said Convention only relates to leases of six months or more while the 1st Respondent?s lease was for a period of 60 – 90 days. Learned Counsel for the Appellants therefore submitted that the lease transaction subject matter of the suit at the lower Court did not come within the purview of article 1 of the convention.
RESOLUTION
The sum total of the present issues hinge on the question whether the present suit as constituted falls within the admiralty jurisdiction of the Federal High Court. Section 251(1)(g) of the 1999 Constitution of the Federal Republic of Nigeria, (as amended) expressly states that the Federal High Court shall have and exercise jurisdiction to the exclusion of any other Court in civil causes and matters relating to any admiralty jurisdiction. The extent of the admiralty jurisdiction of the Federal High Court, as it relates to the instant issue which is the subject matter of litigation, is aptly provided in Section 1(1) of the Admiralty Jurisdiction Act, as follows:
1(1) The admiralty jurisdiction of the Federal High Court (in this Act referred to as ?the Court?) includes the following, that is-
1. Jurisdiction to hear and determine any question relating to a proprietary interest in a ship or aircraft or any maritime claim specified in Section 2 of this Act;
2. Any other admiralty jurisdiction being exercised by any other Court in Nigeria immediately before the commencement of this Act;
3. Any jurisdiction connected with any ship or aircraft which is vested in any other Court in Nigeria immediately before the commencement of this Act;
4. Any action or application relating to any cause or matter by any ship owner or aircraft operator or any other person under the Merchant Shipping Act or any other enactment relating to a ship or an aircraft for the limitation of the amount of his liability in connection with the shipping or operation of aircraft or other property.
I have taken time to refer to the relevant provisions of the Constitution as well as the provisions of the Admiralty Jurisdiction Act, in order to determine whether, particularly from Section 2 of the Admiralty Jurisdiction Act, the claim of the 1st Respondent as constituted falls within the exclusive admiralty jurisdiction of the Federal High Court or not. The law is well settled that it is the claim of the plaintiff as disclosed in the statement of claim that determines the jurisdiction of the Court. See: JEV & ANOR Vs. IYORTYOM & ORS (2014) LPELR 23000 (SC); ABIA STATE TRANSPORT CORPORATION & ORS Vs. QUORUM CONSORTIUM LTD [2009] 15 NWLR (Pt. 1145) 1. In the 1st Respondent’s Statement of Claim found at pages 11 to 15 of the record of appeal, the 1st Respondent claimed as follows:
1. A declaration that the continued detention and use by the Defendants of the Plaintiff’s engines CFM 56-3C1 ESN 724.458 and CFM 56-3C1 ESN 860.189 after Engine Lease Agreement have been duly terminated, is unlawful and amounts to a breach of the Lease Agreements between the parties.
2. An Order directing the Defendants to redeliver forthwith possession of the Plaintiff’s engines CFM 56-3C1 ESN 724.458 and CFM 56-3C1 ESN 860.189 to the Plaintiff.
3. An Order directing the Defendants to pay the Plaintiff the sum of $1.5 million being the outstanding lease charges on the Plaintiff?s engines CFM 56-3C1 ESN 724.458 and CFM 56-3C1 ESN 860.189.
4. Interest on the said debt owed at the rate of 21% per annum or at the prevailing interest rate at the material time from 17th May, 2012 till judgment and thereafter at the rate to be adjudged by the Court.
5. An order directing the Defendants to pay the Plaintiff a daily sum of $1,600 per day for each day of lateness and $264 per hour and $116 per cycle being special damages for loss incurred by the plaintiff from 17th May, 2012 until such time as the engines are returned to the Plaintiff.
6. Sum of N10,000,000.00 (Ten Million Naira) general damages for breach of the Engine Lease Agreements by the Defendants.
7. Sum of N15 million (Fifteen Million Naira) general damages for breach of the Engine Lease Agreement by the Defendants.
The 1st Respondent as Plaintiff also averred as follows in its statement of claim:
4. The Plaintiff avers that by virtue of Engine Lease Agreements dated 21st March, 2011 and 5th May, 2011 respectively, the Plaintiff leased the Plaintiff?s Engines CFM 56-3C1 ESN 724.458 and CFM 56-3C1 ESN 860.189 to the 1st Defendant to be used as replacement engines while the Plaintiff repaired the 1st Defendant?s Engines CFM56-3C1 ESN 860.172 and CFM 56-3C1 ESN 860.151, for a period of 60-90 days. The Plaintiff pleads and shall at the trial of this matter rely on the Engine lease Agreements dated 21st March, 2011 and 5th May, 2011.
5. The Plaintiff states that the above leases were based on IATA Document No. 5015-00, MASTER SHORT-TERM ENGINE LEASE AGREEMENT, 2002. The Plaintiff hereby pleads and shall at the trial of this matter rely on the said IATA Document No. 5016-00.
6. The Plaintiff avers that both Lease Agreements were to expire within 14 days of completing the shop visit for the 1st Defendant’s engines CFM 56-3C1 ESN 860.172 and CFM 56-3C1 ESN 860.151.
7. The Plaintiff avers that at the completion of the shop visit for the Defendant’s first two engines, the Plaintiff redelivered the engines to the 1st Defendant and upon the agreement of the parties, both Lease Agreements were extended for an additional 90-day period each but in any case not later than 14 days after completion of the shop visit for subsequently removed engines CFM 56-3C1 ESN 860.149 and CFM 56-3C1 ESN 860.175 pursuant to Amendment 1 to the lease agreements respectively.
8. The Plaintiff avers that upon the expiration of the lease Agreements coupled with the default of the Defendants, the Plaintiff by two letters both dated 9th May, 2012 notified the Defendants of its termination of the lease Agreements with date of termination effective as of 17th May, 2012 and requested the Defendants to return the Plaintiff’s two engines and pay all outstanding lease charges of $1.5 million not later than 17th May 2012. The Plaintiff pleads and shall at the trial of this matter rely on the said notices of termination of lease both dated 9th May, 2012.
9. The Plaintiff further states that in the said Notices of termination, the Plaintiff specifically informed the Defendants that in the event that the engines are not returned to the Plaintiff by 17th May, 2012, the Defendants shall be liable for all additional expenses incurred in enforcing the Plaintiff?s rights including but not limited to attorney’s fees and finance charges due on the unpaid debt.
10. The Plaintiff avers that at the request of the Defendants for extension of time, the Plaintiff by another letter dated 13th May, 2012 magnanimously agreed to extend the Defendants’ time to 24th May, 2012, to pay the leasing charges due to the two leased engines and the shortfall due for engine ESN 860.175 which was under repair at the Plaintiff’s shop. The said letter is hereby pleaded and shall be relied upon at the trial of this action.
11. The Plaintiff states that despite the Defendants several promises and proposals to pay the outstanding lease debts, the Defendants have till date neither made any payment at all nor returned the two engines to the Plaintiff. The Plaintiff pleads and shall at the trial of this suit rely on mails exchanged between the parties.
12. The Plaintiff further states that the Plaintiff’s two engines are till date installed on the 2nd Defendant, parked at the Murtala Mohammed Airport, Ikeja, Lagos?
19. The Plaintiff avers that by reason of the Defendants’ continued detention and use of the Plaintiff?s engines contrary to the agreements between the parties, the Plaintiff has thereby suffered economic damage and or loss of business.?
Now going through the above reproduced averments, can it be said that the 1st Respondent?s cause of action falls within the admiralty jurisdiction of the Federal High Court? I do not think so. In my humble understanding the entire claim of the 1st Respondent is hinged on the alleged continued detention and use of its engines by the Defendants and no more, thereby giving rise to an action for the tort of detinue arising out of breach of the lease agreement executed by the parties. I need to state at this point that in an action for detinue, the gist of the action is the unlawful diversion of the Plaintiffs chattel which he has an immediate right to possess after the Plaintiff has demanded for its return, See:SHONEKAN Vs. SMITH (1964) 1 All NLR 168 at 173, AKPENE Vs. BARCLAYS BANK NIG LTD (1985) 5 NWLR (Pt. 5) 116, and ADEGBAIYE Vs. LOYINMI (1986) 5 NWLR (Pt. 43) 665.
The Appellants in this appeal strenuously contended that the 1st Respondent?s suit is founded on simple contract and not any cause or matter within the admiralty jurisdiction of the Federal High Court. On the other hand, the 1st Respondent?s counsel argued, relying on Section 4 of Admiralty Jurisdiction Act that aviation claims relate to ‘any reference in this Act to a claim in respect of an aircraft includes a claim that can be made under any of the Conventions in force to which Nigeria is a party.’ Learned Counsel for the Respondent therefore relied on Article XVI of the Convention on International Recognition of Rights in Aircraft, 1948 (incorporated as Fourth Schedule to the Civil Aviation Act, 2006) wherein Aircraft is defined to include ?the airframe, engines, propellers, radio apparatus and all other articles intended for use in the aircraft whether installed therein or temporarily separated therefrom.
I have carefully gone through the provisions of the Convention as well as Article 1(2)(a) of the Protocol to the Convention on International Interest in Mobile Equipment on Matters Specific to Aircraft Equipment (Fifth Schedule to Civil Aviation Act) referred to by the learned Counsel for the 1st Respondent, it is important to note that they are inapplicable in the instant case. I must state for the avoidance of doubt that the application of Section 4 of the Admiralty Jurisdiction Act is not open-ended. As the learned Counsel for the Appellants rightly submitted, any claim brought under any convention pursuant to Section 4 of the Admiralty Jurisdiction Act, must be of such nature that comes within Section 1 of the Act, wherein ‘aircraft’ has been referred to and from the provisions of Section 1(1) of the Act, which defines and delimits the admiralty jurisdiction of the lower Court, it is only where the case before the Court relates to (a) proprietary interest in an aircraft; where jurisdiction connected with aircraft was previously vested in some other Courts before the enactment of the Act, and (c) where the claim relates to any banking or letter of credit transaction for importation or exportation of aircraft. See Section 1(1)(a), (c) and (h) of the Admiralty Jurisdiction Act.
The 1st Respondent’s claim before the Court is solely for the enforcement of possessory rights and not proprietary right and it is also not its case that the case borders on any banking transaction for the importation or exportation of aircraft to warrant the application of the relevant provisions of the Admiralty Jurisdiction Act.
The provisions of Section 4 delimited to instances where a claim in respect of an aircraft can be maintained under a Convention in force to which Nigeria is a party. Article I of the 1948 Convention relied on by the 1st Respondent clearly states that the rights recognized by contracting states under the Convention include rights to possession of aircraft under leases of six months or more. See Article I(1)(c) of the 1948 Convention. The implication is that so long as the 1st Respondent’s suit, bordering on possession of aircraft engine is under a lease for a period of 60 to 90 days, the Convention and the definition of aircraft therein sought to be relied upon cannot be applicable to the instant case.
The mere fact that the engine leased is for use by an aircraft is not sufficient to confer the admiralty jurisdiction on the lower Court. Considering the peculiar aggregate of facts which constitute the basis of the action before the lower Court, in particular the fact that the engines, properties of the 1st Respondent, are allegedly being detained by the Appellants without consent and contrary to the express agreement between the parties, the only reasonable conclusion to reach in the circumstance is that the 1st Respondent?s suit is for detinue and breach of contract. Even though an aircraft engine is involved in the dispute between the contending parties, this is not sufficient to confer jurisdiction on the Federal High Court in the exercise of its exclusive Admiralty Jurisdiction. This is a case of detinue, the claim relates to breach of agreement and conversion, this cannot obviously fall within the Admiralty jurisdiction of the Federal High Court. 1st Respondents claim is wholly and exclusively within the jurisdiction of the High Court of Lagos State.
A cause of action has been defined as the wrongful act of the defendant and the consequent damage suffered by the Plaintiff. It entails the facts which when proved will entitle a Plaintiff to a remedy against a Defendant. See: OSHOBOJA Vs. AMUDA (1992) 1 NWLR (Pt. 250) 260. The cause of action in the matter leading to the instant appeal stems from the breach of agreement and unwarranted detention of the 1st Respondent’s properties by the Appellants and I am inclined to hold that it is immaterial that the property is an aircraft engine. The relevant question for the purpose of jurisdictional test is: can the matter be decided without reference to the provisions of the Admiralty Jurisdiction Act. I am inclined to answer this in the affirmative, the matter can be effectively and effectually determined without recourse to the Admiralty Jurisdiction Act.
While considering the object and purpose of the extinct Federal Revenue Court Decree, the Supreme Court of Nigeria per OPUTA, JSC, (of blessed memory) held in EZE Vs. FRN [1987] NWLR (Pt. 51) 506; (1987) LPELR 1193 (SC), 27 to 28, para’s G – D, that:
“Although the Court is not at liberty to construe a Statute by its motives which influenced its enactment, yet when the reason for the enactment is known it is the duty of the Court to read the Statute or sections of it in such a way as to fairly and accurately carry out that object of the Decree, Act, or Statute and not with a view of extending the Section or the Statute to something that was not intended”
It is not necessary to try to overstretch the extent and scope of the admiralty jurisdiction of the Federal High Court and the extent of the Admiralty Jurisdiction Act to include matters such as the case of the 1st Respondent in this appeal. The mere fact that the property converted by a defendant giving rise to the Plaintiff?s claim is an aircraft engine does not in my view, give the claim a pigmentation or character of an action in admiralty. See: NUN RIVER VENTURES LTD & ANOR Vs. ABBNG LTD & ANOR (Unreported Appeal No. CA/L/485/2016), delivered on 24th November, 2017, where I maintained similar position. Having considered the 1st Respondent?s claim as reproduced earlier, I agree entirely with the learned Counsel for the Appellants that the claim in the instant case is simply one of detinue engrained in simple contract, which falls within the jurisdictional competence of the High Court of a State.
If an aircraft engine is converted, and the complaint is limited only to the conversion and breach of contract, it is only that particular complaint that is relevant for the purpose of determination of jurisdiction.
This was the approach adopted by the Supreme Court in EZE Vs. FRN (supra), where the Court had to consider whether the Federal High Court had jurisdiction to entertain a criminal charge relating to forgery of documents produced for the purpose of custom duty. In the words of the Court, ‘the character of the document, that is one produced for purpose of customs, is irrelevant for the determination of jurisdiction.’ I am therefore of the view, that the 1st Respondent’s claim at the Court below does not have the character of a claim in Admiralty, it is a case of simple contract, a breach of same and conversion of property. See:IROEGBU Vs. MV CALABAR CARRIER & ORS (2007) LPELR 5143 (CA). In the light of all I said therefore, this issue is resolved in favor of the Appellants against the Respondents.
Without prejudice to the foregoing and in line with the admonition of the Supreme Court that this Court being an intermediate Court must consider and pronounce on all issues submitted to it for determination by the contending parties. An intermediate Court must pronounce on all issues, it must not restrict itself to one or more issues which in its opinion may dispose of the matter, see: CHIEF ADEBISI ADEGBUYI Vs. APC & ORS (2014) LPELR-24214 (SC).
I will now proceed to consider the other issues nominated by the 1st Appellant and argued by the parties in this appeal.
ISSUE THREE
The learned Counsel for the Appellants referred to the findings of the lower Court at pages 1716 ? 1718 of the Records of Appeal that the purport of Sections 34 and 44(b) of the Asset Management Corporation of Nigeria Act, 2010 is that AMCON will be liable for the obligations of the debtor, that is the 2nd Respondent; counsel argued that the decision of the lower Court was reached per incuriam because the lower Court relied on the provision of Section 34 of the AMCON Act, 2010 which had since been amended by the AMCON (Amendment) Act, 2015. Learned counsel contended that Section 34(1)(a) of the AMCON (Amendment) Act, 2015 provides that, upon the acquisition of an Eligible Bank Asset (EBA), AMCON shall be vested with rights of the Eligible Financial Institution (EFI) in respect of the EBA without assuming any liability or obligation arising thereunder. It was submitted that the lower Court would have reached a different conclusion if it had considered the provisions of the extant law.
Learned counsel further argued that, assuming without conceding, that the applicable law was the AMCON Act, 2010 and not the AMCON (Amendment) Act, 2015; the 1st Appellant is still not liable for the liabilities of the 2nd Respondent. Counsel referred to Section 34(1) of the AMCON Act, 2010 and argued that it is clear from the ordinary meaning of the section that the rights and obligations which were vested in AMCON upon the acquisition of an Eligible Bank Asset (EBA) were the rights which were vested in the Eligible Financial Institution (EFI) prior to the acquisition of the EBA.
Learned counsel contended that the 1st Appellant in the instant case would only be vested with the rights of UBA under the credit/loan agreement and be liable for only the obligations arising from the credit/loan agreement for which the UBA would have been liable. Counsel further submitted that there is no evidence of any provision in the credit/loan agreement assigned to the 1st Appellant which stipulated that 1st Appellant would be liable to third parties for the obligations of the 2nd Respondent.
Learned counsel further referred to Section 44(b) of the AMCON Act, 2010 and contended that there is nothing in the said provision which imposes liability on AMCON or even the Eligible Financial Institution (EFI) for an obligation which is owed by a debtor to a third party under a totally unrelated contract. Counsel submitted that the decision of the lower Court amounts to a travesty of justice because it implies that the ultimate liability of the 2nd Respondent’s debt would be on UBA who was a secured creditor and was never a party and had no knowledge of any dealings between the 2nd Respondent and its customers, clients and other creditors.
Learned counsel referred to Sections 25 and 61 of the AMCON Act; and Paragraph 5 of the Guidelines for the Operation of AMCON, 2010 made pursuant to Sections 24 and 61 of the AMCON Act. Counsel submitted that the transaction between AMCON and UBA is an assignment of a debt (a collateralized NPL) owed to UBA by the 2nd Respondent which implies that AMCON stepped into the shoes of UBA and became a secured creditor of the 2nd Respondent. Counsel argued that the implication of an AMCON acquisition is that AMCON becomes entitled to enforce creditor rights against the debtor entity, including the right to enforce any security/collateral which in the instant case is the All Assets Debenture; and that AMCON does not acquire the debtor entity. Learned counsel for the Appellants further argued that the instant scenario is different from an acquisition of an entity under the Investments and Securities Act, which involves the acquisition of the shares and membership in the target entity.
It was further submitted that the lower Court erred in its interpretation of the statutory role of the 1st Appellant under the AMCON Act at pages 1716 – 1719 of the Records of Appeal because the lower Court applied the general principles of company acquisition which are governed by the Investments and Securities Act. Learned counsel submitted that the acquisition of UBA?s creditor rights cannot transmute AMCON into a debtor or render AMCON liable for an obligation which is not even enforceable against UBA in the first place. Counsel further argued that the lower Courts suggestion that AMCON could claim indemnity from UBA is irreconcilable with law and the facts; and that the lower Court purported to make UBA whom the 2nd Respondent is still owing liable to the 1st Respondent for the indebtedness of the 2nd Respondent. Learned counsel submitted that the decision of the lower Court is completely wrong.
In his response, learned counsel for the 1st Respondent referred to the findings of the lower Court at page 1718 of the Records of Appeal; Exhibits D3 at pages 1246 – 1267 of the Records of Appeal and Exhibit D6 at pages 1268 – 1297 of the Records of Appeal. Counsel argued that the applicable law in the instant case is Section 34(1) of the AMCON Act, 2010 which was in operation at the time the 1st Appellant acquired the assets of the 2nd Respondent and not the AMCON (Amendment) Act, 2015 as contended by the 1st Appellant. Learned counsel argued that by Exhibit D6, the acquisition of the assets of the 2nd Respondent including the 2nd Appellant was made in 2012; that the liability in connection with the 1st Respondent’s cause of action occurred prior to the transfer of the 2nd Appellant and other assets of the 2nd Respondent to the 1st Appellant; and that the applicable law therefore is Section 34(1) of the AMCON Act, 2010.
Learned counsel for the 1st Respondent referred to Sections 34(1) and 44(b) of the AMCON Act, 2010 and argued that the combined effect of the two Sections is to make the 1st Appellant liable to all obligations and liability in respect of any claim, award, payment or damages in connection with a cause of action occurring prior to the date of the transfer with a right of indemnity against the Eligible Financial Institution; and that the lower Court was therefore right in holding that the 1st Appellant inherited the liability of the 32nd Respondent to the 1st Respondent. Counsel further argued that, assuming without conceding that the AMCON (Amendment) Act, 2015 was applicable; the 1st Appellant will still be held liable for the liabilities of the 2nd Respondent to the 1st Respondent.
Learned counsel referred to Section 4 (a) of the AMCON (Amendment) Act, 2015 and Section 34(1) of the AMCON Act, 2010 to submit that the two sections when read together does not suggest that upon the acquisition of an Eligible Bank Asset by AMCON, AMCON shall be vested with the rights of the Eligible Financial Institution without assuming any liability or obligation arising thereunder. Counsel submitted further that the lower Court would have come to the same conclusion even in the light of the AMCON (Amendment) Act, 2015 taking into consideration the fact that the 1st Respondent has a lien over the 2nd Respondent whose assets the 1st Appellant acquired. Learned counsel urged this Court to resolve this issue in favour of the 1st Respondent.
In Reply on the effect of Section 34(1) of the AMCON Act, 2010, learned Counsel for the Appellants referred to UGWU Vs. ARARUME [2007] 12 NWLR (Pt. 1048) Pg. 367 and SAVANNAH BANK OF NIGERIA LIMITED Vs. AJILO [1989] 1 NWLR (Pt. 97) Pg. 305 and submitted that the purport of the AMCON (Amendment) Act, 2015 and Section 34(1) of the AMCON Act, 2010 is that the 1st Appellant should no longer be liable for any obligations which an Eligible Financial Institution (EFI) may owe to the debtor in respect of an acquired Eligible Bank Asset (EBA). Learned counsel further relied on AHMED Vs. KASSIM (1958) 1 NSCC; IBRAHIM Vs. BARDE & ORS [1996] 9 NWLR (Pt. 474) Pg. 513 and OJOKOLOBO Vs. ALAMU [1987] 3 NWLR (Pt. 61) Pg. 377 to argue that Section 34(1) of the AMCON Act, 2010 as amended by the AMCON (Amendment) Act, 2015 is intended to have a retrospective effect considering that AMCON had ceased further acquisitions of Eligible Bank Asset (EBA) long before 2015 and therefore the said amendment is totally irrelevant unless it was the intention of the legislature that it should apply to the acquisitions which were all done in 2010/2011.
RESOLUTION
It is settled law that the applicable law to any cause of action is the law in force or in existence at the time the cause of action arose and not at the time the action was instituted. See ADAH Vs. NYSC (2004) LPELR 69 (SC); OGBORU & ANOR Vs. UDUAGHAN & ORS (2011) LPELR 8236 (SC); SPDC Vs. ANARO & ORS (2015) LPELR 24750 (SC). In the present appeal, the facts show that the cause of action arose in 2012 when the 1st Appellant acquired the assets of the 2nd Respondent, the subject matter of the suit. Therefore, the applicable statute is the Assets Management Corporation of Nigeria Act of 2010 and not its consequential amendment in 2015. I am unable to accept the submissions of learned Counsel for the Appellants that the provisions of the Amendment Act, 2015 have retrospective effect, particularly in relation to Section 34(1) of the Original Act.
Generally, no statute shall be construed to have retrospective effect unless such a construction is clearly expressed in the wordings of the statute or arises by necessary and distinct implications. See OJUKWU Vs. OBASANJO & ORS (2004) LPELR 2400 (SC). In AFOLABI & ORS Vs. GOV., OYO STATE & ORS (1985) LPELR ? 196 (SC), the Supreme Court, per OPUTA, JSC (of blessed memory) held that ‘retrospective laws are prima facie of questionable policy and contrary to the general principle that legislation by which human conduct of mankind is to be regulated ought, when introduced, to deal with future acts, and ought not change the character of past transactions carried on upon the faith of the then existing law See also ADESANOYE Vs. ADEWOLE (2006) LPELR 143 (SC). It is therefore my firm view, contrary to the contention of the Appellants? counsel that, in so far as there are no express wordings to the contrary, the 2015 Amendment to the AMCON Act will only affect rights which came into existence after the amendment was passed. It is rightly stated in the Amendment Act that its commencement date is 26th May, 2015 and in law, where a commencement date is provided in a statute, it is that date that the law is regarded to have come into force. See YABUGBE Vs. C.O.P. (1992) LPELR 3505 (SC); YARE Vs. NUNKU & ORS (1995) LPELR ? 3514 (SC).
Therefore, the learned trial judge was right to have applied the provisions of AMCON Act, 2010 and not its 2015 Amendment to the instant case.
The question then is whether, by the provisions of Sections 34(1) and 44(b) of the AMCON Act 2010, the 1st Appellant is liable to the 1st Respondent.
Section 34(1) provides as follows:
‘Subject to the provisions of the Land Use Act and Section 36 of this Act, where the Corporation acquires an eligible bank asset, such eligible bank asset shall become vested in the Corporation and the Corporation shall exercise, all the rights and obligations of the eligible financial institution from which the eligible bank asset was acquired in relation to the bank asset, the debtor concerned and any guarantor, surety or receiver, liquidator, examiner or any other person concerned and the eligible financial institution shall cease to have those rights and obligations.’
Whereas Section 44 of the Act provides as follows:
‘If the Corporation so directs, an eligible financial institution from which the Corporation has acquired an eligible bank asset shall indemnify the Corporation and its officers against any liability or loss-
1. arising from any error, omission or mis-statement in any information or certificate provided to the Corporation by or on behalf of the eligible financial institution; or
2. In respect of any claim, award, payment or damages which the corporation becomes liable to pay to any person where the liability arises in connection with a cause of action occurring prior to the date of transfer or as the case may be any proportion of such liability is attributable to a period prior to the date of transfer.’
The law is well settled that where the provisions of a statute are clear, the duty of the Court is to interpret such clear provisions by giving the plain wordings their natural and ordinary interpretation without more; see KRAUS THOMPSON ORS. Vs. N.I.P.S.S. (2004) LPELR 171 (SC); and it is certainly not the duty of a judge to interpret a statute to avoid its consequences, because the consequences of a statute are those of the legislature, not the Judge; see AMAECHI Vs. INEC (2008) LPELR 446 (SC); AROMOLARAN Vs. AGORO (2014) LPELR 24037 (SC).
The provisions of Section 34(1) of AMCON Act are clear and unambiguous and the purport of the provision is that by operation of law, where the 1st Appellant acquires an eligible bank asset, same shall be vested in it, and it shall then have full possession and exercise, all rights and powers and perform all obligations relating thereto, so that right or interest of the eligible financial institution from which the Corporation has acquired such eligible bank asset shall cease upon such acquisition by the Corporation. As it relates to the instant case, it is obvious that upon the acquisition of the eligible asset of the 2nd Respondent from UBA, the 1st Appellant by operation of law shall take the place of UBA and exercise all rights and powers and perform duties thereto and UBA shall cease to be the beneficiary of the Registered Deed of Debenture and Floating Charge executed by the 2nd Respondent and UBA. Pursuant to Sections 34 and 35 AMCON Act, the debt and security interests including the position of UBA as debenture holder in relation to the Eligible Bank Asset acquired by the 1st Appellant from UBA is now vested in the 1st Appellant.
I am with the learned trial judge that in as much as the 1st Appellant has acquired the eligible assets of the 2nd Respondent from UBA, it is by operation of law liable to the 1st Respondent for any cause of action connected with the assets acquired and which occurred prior to the acquisition of the assets, including the 2nd Appellant from UBA. Looking at Section 44(b) earlier reproduced, it is clear that where the Corporation is exposed to liability for claim, award, payment or damages in connection with a cause of action occurring prior to the date of transfer of the assets. By the intention of that provision, the Corporation is entitled to be indemnified by the Eligible Financial Institution from whom the eligible bank asset was acquired for such claim, award, payment. In my view, the learned trial judge correctly applied the law when he held at pages 1717 to 1718 of Volume IV of the records of appeal, as follows:
?I am of the view as submitted by the Plaintiff counsel that the Act contemplates the 3rd Defendant?s liability in the circumstances of this case as it makes provision for indemnification of the 3rd Defendant by the eligible financial institution from which the corporation has acquired an eligible Bank asset.
From the foregoing I am of the view that the learned counsel rightly submitted that the liability arising in connection with the Plaintiff’s cause of action has occurred prior to the date of transfer to the second defendant to the third Defendant. I also hold that the combined effect of Sections 34(1) and 44(b) of the Amcon Act is to make the third Defendant liable to all obligations and liabilities in respect of any claim, award, payment, or damages in connection with the cause of action occurring prior to the date of transfer with a right of indemnity against the financial institution.
It is not disputed that the 1st Appellant acquired all the assets of the 2nd Respondent from UBA. The learned trial judge made a definite finding on this issue at pages 1718 to 1719 of Volume IV of the record of appeal. I am unable to disturb this finding. The implication is that, by the operation of Section 34(1) AMCON Act, the 1st Appellant is liable to the 1st Respondent in relation to the cause of action which accrued before the acquisition or transfer of the assets of the 2nd Respondent to the 1st Appellant by UBA. As a result, therefore, I resolve this issue in favor of the 1st Respondent against the Appellants.
ISSUE FOUR
Learned counsel for the Appellants referred to the decision of the lower Court at pages 1689 – 1722 of the Records of Appeal where it was found that the 1st Appellant admitted liability for the indebtedness of the 2nd Respondent by virtue of the settlement negotiations held between the Appellant and the 2nd Respondent’s Creditors. Counsel relied on REICHIE Vs. NIGERIA BANK FOR COMMERCE AND INDUSTRY (2016) LPELR-40051 (SC) to contend that except where there are statutory exceptions or there is an assignment of the contract or where a party has assumed the personality of the party to the contact; a person who is not a party to an agreement can neither be bound by the terms thereof nor be liable for the obligations arising therefrom; and that none of the known exceptions applies to the instant case. Learned counsel argued that the learned trial Judge erred when he held that the doctrine of privity of contract did not apply to the instant case which is not a case under any of the statutory exceptions to the doctrine of privity of contract.
Learned counsel submitted that there was no allegation or evidence of assignment or acquisition of the lease agreement to AMCON; and that it was the credit agreement between the UBA and the 2nd Respondent that was assigned to the 1st Appellant who only stepped into the shoes of UBA as a creditor to the 2nd Respondent. Counsel argued that there was no interface between UBA and the 1st Respondent and that UBA has no knowledge and was never party to any agreement between the 1st and 2nd Respondents for the lease of engines. It was contended by counsel that the 1st Appellant is only liable for obligations under the credit agreement between UBA and the 2nd Respondent. Learned counsel referred to INTERCONTRACTORS Vs. UAC [1988] NWLR (Pt. 76) Pg. 303 to submit that upon the appointment of a Receiver, the Debtor retains its distinct corporate personality and remains liable for its obligations; and that the 1st Appellant herein did not assume the personality of the 2nd Respondent; and that the 2nd Respondent remained a distinct personality liable for all its obligations including the one owed to the Appellant.
Learned counsel for the Appellants further submitted that settlement negotiations which were initiated by the Appellant cannot amount to an admission of liability by the Appellant.
Counsel referred to KANO Vs. THE GOVT OF ADAMAWA STATE & ORS (2014) LPELR-24161 (CA); NBN LTD Vs. GURHERIC LTD [1987] 2 NWLR (Pt. 56) Pg. 253 at 263; EIGBE Vs. N.U.T [2008] 5 NWLR (Pt. 1081) Pg. 604 at 632, Paras. C – D and NARINDEX TRUS LTD Vs. NIG. INTERCONTINENTAL MERCHANT BANK LTD [2001] 10 NWLR (Pt. 721) Pg. 321 to submit that an admission in law must be positive, direct, clear, unambiguous and unequivocal. Learned counsel referred to pages 940 – 966 of the Records of Appeal to contend that in the entire correspondence between the 1st Appellant and the 1st Respondent, there was no statement by the 1st Appellant admitting that it was liable for the 2nd Respondent’s indebtedness to the 1st Respondent. Counsel relied on ASHIBUOGWU Vs. A-G BENDEL [1988] 1 NWLR (Pt. 69) Pg. 138 to submit that the 1st Appellant?s offer to pay the sum of USD 1.6 million in discharge of the 2nd Respondent?s indebtedness to the 1st Respondent was not an admission of liability; that the 1st Appellant cannot in law admit a debt which is neither incurred nor guaranteed; and cannot also admit liability for a contract to which it is not a party either directly or by agency.
Learned counsel for the Appellant argued that, assuming without conceding, that the various correspondences between the 1st Appellant and the 1st Respondent constituted an admission of liability by the Appellant; the said admission is unenforceable at the instance of the 1st Respondent because there was no consideration for the promise. Counsel referred to the Settlement Agreement-Exhibit 60X at pages 961 ? 965 of the Records of Appeal and contended that the said Settlement Agreement was not executed; and that promise to pay the sum of USD 1.6 million by the Appellant was on the condition that the 1st Respondent would discontinue its suit against the 2nd Respondent before the lower Court. Counsel further referred to Exhibit 60Y at page 966 of the Records of Appeal to submit that assuming the said Settlement Agreement was executed and the Appellant was to be bound thereby, the remedies that would have been available to the 1st Respondent upon the Appellant?s failure to pay the said sum of USD 1.6 million would be to seek to recover damages for breach, in the event that it had performed its own obligation to discontinue the suit against the 2nd Respondent.
Learned counsel further contended that the Appellant could also seek for specific performance in the event it had irreparably altered its position as a result of the 1st Appellant?s promise and/or where it is yet to perform its own part of the contract, then the contract fails and it could proceed with the suit against the debtor ? 2nd Respondent for the full sum of the indebtedness. Learned counsel submitted that the mutual non-performance of the said Settlement Agreement cannot transmute into a greater right for the 1st Respondent to now enforce the terms of the Lease Agreement against the Appellant who was never a party to the said Lease Agreement. Counsel referred to ET & EC NIG. LTD Vs. NEVICO LTD [2004] 3 NWLR (Pt. 860) Pg. 327; PLATEAU INVESTMENT & PROPERTY DEV. CO. LTD Vs. EBHOTA [2001] FWLR (Pt. 64) Pg. 374; MAKWE Vs. NWUKOR [2001] FWLR (Pt. 63) Pg. 1 and ACB PLC Vs. NWODIKA [1996] 4 NWLR (Pt. 443) Pg. 483 at 484 to submit that a person who has not furnished a consideration for a promise cannot enforce that promise. Learned counsel further referred to Exhibit 60T at page 942 of the Records of Appeal to submit that the correspondence clearly shows that the negotiation talks were in respect of the 2nd Respondent?s engines which were with the 1st Respondent for repairs; and not in respect of the leased engines which were the subject of the 1st Respondent?s claim before the lower Court. Counsel urged this Court to set aside the decision of the lower Court.
In response, the learned counsel for the 1st Respondent referred to the findings of the trial Court at pages 1719 ? 1720 of the Records of Appeal; the testimony of the 1st Respondent?s witness ? Mr. Genadi Kraizer at pages 970 ? 982 of the Records of Appeal; Exhibit 60T at page 1704 ? 1705 of the Records of Appeal which was written by the 1st Appellant in response to Exhibit 60S ? the 1st Respondent?s Solicitor?s letter contained at page 940 of the Records of Appeal; Exhibit 60U at page 943 of the Records of Appeal; Exhibit 60V at pages 944 ? 946 of the Records of Appeal; Exhibit 60V at page 948 of the Records of Appeal; Exhibit 60W at pages 959 ? 965 of the Records of Appeal; and Exhibit 60X which is the final Settlement and Release Agreement between the 1st Appellant and the 1st Respondent contained at pages 1014 – 1020 of the Records of Appeal. Counsel contended that the 1st Appellant had in various correspondences admitted liability of the 2nd Respondent to the 1st Respondent following the 1st Appellant?s acquisition of all the assets of the 2nd Respondent including the 2nd Appellant over which the 1st Respondent has a lien.
Learned counsel submitted that the 1st Appellant?s admission satisfied the requirement of the law as stated in KANO Vs. THE GOVT OF ADAMAWA STATE & ORS (Supra); counsel further referred to GRAYSHOT ENT. LTD Vs. MIN. OF AGRIC [2002] 9 NWLR (Pt. 771) Pg. 1 at 22-23, Paras. E – A and UNITED WORLD LTD INC. Vs. M.T.S. LTD [1998] 10 NWLR (Pt. 568) Pg. 106 to submit that the several correspondences between the 1st Appellant and 1st Respondent though marked without prejudice are admissible having resulted in a concluded agreement. Learned counsel submitted further that DW1 gave corroborative evidence at page 1430 of the Records of Appeal that the 1st Appellant had in the past settled with other Maintenance, Repairs and Operation Facilities.
Learned counsel argued that the instant case is distinguishable from the case of ASHIBUOGWU Vs. A-G BENDEL (Supra) because the 1st Appellant?s admission of liability was based on the fact that it had acquired all the assets of the 2nd Respondent including the two aircraft engines currently in the custody of the 1st Respondent as well as the 2nd Appellant. Counsel further contended that the 1st Respondent is not expected to furnish any consideration as argued by the Appellants because the 1st Respondent already had a lien over the 2nd Respondent?s assets which the 1st Appellant acquired; and that all that the 1st Appellant was doing was to discharge the lien by paying the 2nd Respondent?s indebtedness to the 1st Respondent.
Learned counsel further contended that contrary to the submissions of the 1st Appellant, the Settlement Agreement – Exhibit 60X was duly executed by both the 1st Respondent and the 1st Appellant; counsel argued that Exhibit D4 which was tendered by the 1st Appellant is not the original copy and that DW1 admitted under cross-examination at pages 1427 ? 1428 of the Records of Appeal that the original copy could not be found. Learned counsel referred to Section 167(d) of the Evidence Act, 2011 and submitted that the 1st Appellant withheld the original copy of Exhibit 60X and refused to honor Exhibit 60Y as well as the Notice to produce the original documents in its custody because the document would have been unfavorable to the 1st Appellant if produced.
Learned counsel further argued that the 1st Appellant’s submission as to the remedies available to the 1st Respondent upon the 1st Appellant’s failure to pay the discounted sum of USD 1.6 million is misconceived; counsel submitted that the 1st Respondent has a cause of action against the 1st Appellant by virtue of the acquisition of the 2nd Appellant over which the 1st Respondent has a lien. Counsel referred to Exhibits 60U, 60V, 60X and 60Z to argue that the 1st Appellant’s submission that ?the correspondence clearly shows that the negotiation talks were in respect of the 2nd Respondent’s engines which were with the 1st Respondent for repairs’ is an attempt to mislead this Court. Learned counsel submitted that it is immaterial whether or not the 1st Appellant is a party to the Engine Lease Agreement between the 1st Respondent and the 2nd Respondent. Counsel urged this Court to resolve this issue in favour of the 1st Respondent.
In the Reply Brief, counsel referred to Section 196 of the Evidence Act, 2011; FAWEHINMI Vs. N.B.A. & ORS (No. 2) [1989] 2 NWLR (Pt. 105) Pg. 494; ASHIBUOGWU Vs. A-G BENDEL (Supra); OBEYA Vs. FBN PLC (2010) LPELR-4666 and IBRAHIM AKANBI & ANOR Vs. ALATEDE NIGERIA LTD [1999] 1 NWLR (Pt. 639) Pg. 125 to submit that an admission contained in a document marked ?without prejudice? cannot be treated as an admission against the maker; Exhibits 60T, 60U, and 60V are all marked ?without prejudice? and therefore not binding on the 1st Appellant as an admission of liability. Counsel cited A.G., ABIA STATE Vs. AGHARANYA [1999] 6 NWLR (Pt. 607) Pg. 362; OMEGA BANK Vs. O.B.C. [2005] 8 NWLR (Pt. 928) Pg. 547 and JINADU Vs. ESUROMBI-ARO [2009] 9 NWLR (Pt. 1145) Pg. 55 to submit that Exhibit 60X on the other was not signed by the 1st Appellant and therefore is of no probative value. Learned counsel further argued that the 1st Appellant clearly stated that it could not continue with the settlement agreement in Exhibit 60V at page 958 of the Records of Appeal; counsel submitted that the implication of Exhibit 60V and non-execution of Exhibit 60X by the 1st Appellant is that there was no conclusive agreement/contract between the parties.
Learned counsel referred to B.F.I.G. Vs. B.P.E [2008] All FWLR (Pt. 416) Pg. 1915 at 1936, Paras. A ? D; AMANA SUITS HOTELS LTD Vs. P.D.P [2007] 6 NWLR (Pt. 1031) Pg. 453 at 477, Paras. E ? F; OJO Vs. ABT ASSOCIATES INCORPORATED & ANOR (2014) LPELR-22860 (CA); OBAIKE Vs. B.C.C PLC [1997] 10 NWLR (Pt. 525) Pg. 435 at 477; ORIENT BANK (NIG) PLC Vs. BILANTE INTERNATIONAL LTD [1997] 8 NWLR (Pt. 515) Pg. 37; UDEAGU Vs. BENUE CEMENT CO. PLC [2006] 2 NWLR (Pt. 965) Pg. 600 and Professor Itse Sagay in the ‘Nigerian Law of Contract’, 2nd Ed. 2000, Spectrum Law Series, at Pages 20 – 21 to submit that for a contract to be binding, there must be an unequivocal acceptance; that such acceptance must be clearly communicated to the offeror and the 1st Respondent at paragraphs 8 & 9 of its Reply to Statement of Defence at page 934 of the Records of Appeal admitted that the 1st Appellant never communicated an acceptance or execution of Exhibit 60X. Counsel further referred to OWONYIN Vs. OMOTOSHO [1961] All NLR Pg. 304 and EGBOBIAMEN Vs. FMBN [2002] 40 WRN 40 to submit that this Court has the competence and duty to expunge or exclude an evidence wrongly admitted by the trial Court and deal with the case on the remaining legally admitted evidence.
RESOLUTION
The learned trial judge in the judgment of the trial Court, particularly at page 1719 of Volume IV of the record of appeal, accepted the 1st Respondent?s submission that the 1st Appellant admitted liability through various correspondences exchanged by parties. The Appellants? counsel believes that the learned judge erred in his conclusion. The stance of learned Counsel is hinged on the fact that there is no privity of contract between the 1st Appellant and the 1st Respondent but he was quick to concede that the principle accommodates statutory exceptions, or where there has been an assignment of the contract or the third party assumes the personality of a party to the contract.
I believe this issue has been dealt with under the second issue for determination relating to the obligation of the 1st Appellant under Section 34(1) of AMCON Act, and I need not invest any more time dealing with the same issue. In my view the instant case falls under the latter category, because here the facts on records show that, though the 1st Appellant was not privy to the agreement executed with the 1st Respondent, it placed and conducted itself in a manner implying that it had assumed the personality of the 2nd Respondent under the lease agreement. This is evident from the correspondences exchanged by the parties, particularly those written by the 1st Appellant to the 1st Respondent, including Exhibits S, T, U, V, W, X and Y. The law appears settled to me that where a party by his conduct willfully causes another to believe the existence of certain state of things and induces him to act on that belief, that other party will not be allowed in law to aver the contrary to what he presented, based on the equitable principle of estoppel by conduct, emphasized in NSIRIM Vs. NSIRIM (2002) LPELR 8060 (SC); UDE V NWARA & ANOR (1993) LPELR 3289 (SC); PINA Vs. MAI-ANGWA (2018) LPELR?44498 (SC) and C.N. OKPALA & SONS LTD Vs. NB. PLC (2017) LPELR ? 43826 (SC). See also Section 169 of the Evidence Act, 2011.
The pertinent question here is, whether, considering the facts and circumstances of the instant case, the learned trial judge rightly held that the 1st Appellant admitted liability to the 1st Respondent. Admission in law, is a voluntary acknowledgment made by a party of the existence of certain facts which are inconsistent with his claim in an action. See Section 20 of the Evidence Act, 2011;OMISORE & ANOR Vs. AREGBESOLA & ORS (2015) LPELR ? 24803 (SC) and NIGERIAN ADVERTISING SERVICES LTD & ANOR Vs. UBA PLC & ANOR (2005) LPELR ? 2009 (SC), by the provisions of Section 27 of the Evidence Act, admissions are not conclusive proof of the matters admitted but they may operate as estoppel. To this extent, therefore the authorities are clear that for an admission against interest to have probative or evidential value, same must be precise and unequivocal. See UDO Vs. OKUPA (1991) 5 NWLR (Pt. 191) 365 at 386.
Learned Counsel for the 1st Respondent argued that the contents of Exhibits 60t, 60u, 60v and 60x constitutes admission of liability on the part of the 1st Appellant. Exhibit 60t at page 942 of Volume III of the record of appeal is a letter dated 3rd July, 2013, written by the 1st Appellant and addressed to the 1st Respondent’s Solicitor, informing the 1st Respondent that ?the Non-Performing Loan of Air Nigeria Development Limited and their respective interests? has been assigned to the 1st Appellant due to their inability to repay their indebtedness to their Bank creditors and the need for a meeting to be arranged to ‘work towards reaching a settlement’ of the issues regarding the two engines belonging to Air Nigeria which is in the custody of the 1st Respondent. Whereas Exhibit 60u at page 943 of Volume III of the records of appeal, is a letter dated 6th September, 2013 wherein an offer was made to the 1st Respondent by the Appellant and the conditions stated therein towards getting a discounted amount as full and final payment in respect of the alleged indebtedness of Air Nigeria.
On the other hand, Exhibit 60v found at page 944 of Volume III of the records of appeal, is an email correspondence of 19th September, 2013 wherein the 1st Appellant confirmed to the 1st Respondent that its management had approved to settle the dispute between them at US$1,600,000.00. One thing remains very clear with respect to all the exhibits the three Exhibits were all marked ‘WITHOUT PREJUDICE’ presupposing that parties do not intend to negotiate freely but on the condition that if negotiations fail, evidence of the facts admitted during negotiation cannot generally be given in evidence in Court in the event of litigation.
The decision to tag the exhibits ‘without prejudice’ is in accord with the provisions of Section 26 of the Evidence Act, 2011 which provides that ‘in civil cases, no admission is relevant, if it is made either upon an express condition that evidence of it is not to be given, or in circumstances from which the Court infer that the parties agreed together that evidence of it should not be given As LUSH, J. aptly puts it in the old case of ROCHE Vs. ARMSTRONG (1922) 1 KB 485 at 489, ‘it is the policy of the law that dispute should be amicably settled if possible and it would be unwise to enter into negotiations, if statements made during such negotiations were admissible in evidence at the trial in the event of the attempt to settle not being successful.
In CHIEF FAWEHINMI Vs. NIGERIAN BAR ASSOCIATION & ORS (No. 2) (1989) 2 NWLR (Pt. 105) 558; (1989) LPELR 1259 (SC), the Supreme Court, per AGBAJE, JSC held:
‘Happily we are not without prejudice to guide in the matter. As regards this point, Phipson on Evidence, 12th Edition, page 295, paragraph 679, says: ?Offers of compromise made expressly or impliedly ‘without prejudice’ cannot be given in evidence against a party as admissions; the law, on grounds of public policy, protecting negotiations bona fide entered into for the settlement of disputes. The rationale of the doctrine is a complex of factors. The policy of the law is to encourage settlements; it is thought to be ‘unfair’ that advantage should be taken of the willingness of one parties that without prejudice communications should not be disclosed.’
See also ASHIBUOGWU Vs. A.G., BENDEL STATE & ANOR (1988) LPELR (SC), where NNAEMEKA-AGU, JSC held as follows:
‘A statement made in the course of the negotiation of the compensation or the offer of such a compensation would, in my view, be analogous to a statement made ‘without prejudice’ during a negotiation. The law has always taken the view that parties should speak freely in attempting a settlement of their disputes. That freedom of discussion will be seriously prejudiced if any offer or admission made in the process of the negotiation could be given in evidence and be used to support a party’s case in Court afterwards, should negotiation break down. Where such negotiations are made by written communication they are usually recognized that in some circumstances it is not essential that the words ‘without prejudice’ should have been used; it may be implied that negotiations were conducted on this understanding’
See also OBEYA Vs. F.B.N. PLC (2010) LPELR 4666 and RESURRECTION POWER INVESTMENT COMPANY LIMITED Vs. UNION BANK OF NIGERIA PLC (2013) LPELR 21262 (CA).
In my humble understanding therefore the answer to the point raised in this issue is that, on the basis of the above authorities cited, Exhibits 60t, 60u and 60v containing offer of settlement by the 1st Appellant and inference of liability on their part cannot be used against the 1st Appellant because at the time the exhibits were prepared, there was dispute existing between the parties and they made series of attempts to settle and the documents were marked ‘without prejudice’. The documents made in the course of negotiation are therefore inadmissible in evidence to establish the 1st Appellant?s liability. I must be quick to add that the inscription of the words ‘without prejudice’ cannot be applied to truncate a concluded agreement as found by this Court in PACERS MULTI-DYNAMICS LIMITED & ANOR Vs. ECOBANK PLC (2018) LPELR-45008 (CA). My Lord and learned Brother IKYEGH JCA, while setting down the principles guiding admissibility of a document marked ?without prejudice? made it clear that such document would remain inadmissible if negotiations are still on going as in the instant case, said as follows:
‘..A letter written with the expression ?without prejudice? is restricted only to cases where there is unresolved dispute or negotiation is still in progress and is yet to crystalize into an agreement between the parties to the dispute in which case the letter or correspondence is inadmissible in evidence on the footing that confidential overtures so made should be excluded from evidence on the ground of public policy. Because if it is so, amicable settlement of dispute would be difficult and the defendant would be prejudiced and/or unprotected by a grasping adversary who may exploit the amicable arrangement to settle the dispute by relying on an offer made in the course of the negotiation as binding on the person that made it in disregard of the fact that it was made under disputed circumstances or at the time there was dispute between the parties…’
Meanwhile, it was also the contention of the 1st Respondent that the 1st Appellant’s admission of liability and settlement discussions contained in Exhibits 60t, 60u and 60v culminated into a final Settlement and Release Agreement between the 1st Appellant and 1st Respondent as contained in Exhibit 60x at pages 1014 to 1020 of Volume III of the record of appeal. I have taken a very careful look at the said Exhibit and it is clear that same was only executed by the 1st Respondent and not by the 1st Appellant. It is clear from the correspondences exchanged between the 1st Appellant and the 1st Respondent, particularly at page 966 of Volume III of the records of appeal, where it became obvious that the 1st Appellant before the execution of the Agreement, opted out of the settlement. For the avoidance of doubt, the 1st Respondent?s mail sent to one Jania Ochonogor, who is apparently an officer of the 1st Appellant, on Tuesday, 19th November, 2012, 3:09 pm reads as follows:
ATTENTION: JANIA OCHONOGOR
Dear Ms Ochonogor,
May I refer to your phone call on Friday 1st November, 2013 informing me that AMCON had decided not to proceed further with the Settlement with Israel Aerospace Industries (our ‘Client’).
As should be expected, this information was received with surprise by our Client considering the time and resources deployed towards the amicable settlement of the matter over the past four months. Our Client rightly expects, and we trust that you will oblige us, with a written explanation as to why such decision was taken after the Settlement Agreement was duly signed and returned to you by our Client in the terms agreed by the parties. Furthermore, considering the fact that the Court had been duly notified of the settlement and had adjourned the matter to the 6th December, 2013 for report of settlement it becomes requisite for the Court to be informed of the reason for AMCON’s decision to abort the settlement.
In the circumstance, we demand that you return all documents, papers and process that were sent to you in furtherance of the Settlement particularly, we demand that you return the original Settlement Agreement upon receipt of this email.
Yours faithfully,
For: UDOM AND UDOM
Essien E. Udom, Esq.
It is clear to me that the Settlement Agreement was not finalized and executed by the 1st Appellant. I am unable to accept the submissions of learned Counsel for the 1st Respondent that agreement had been concluded, this is far from it. It is apparent from the contents of the mail reproduced herein before and other correspondences exchanged by the parties, particularly those of 17th and 18th October, 2013 found at pages 958 to 969 of Volume III of the records of appeal, wherein it was particularly stated by the 1st Appellant’s Aviation Consultant, Mr. Ali Magashi, that the 1st Appellant ?will need an assessment report, with an indicative cost and timeline that will bring the two engines back to serviceability and airworthiness before (the 1st Appellant) can proceed with any settlement agreement.? I am of the view that though it is obvious from the record before this Court, that the 1st Respondent executed the Settlement Agreement, the 1st Appellant did not execute its own part of the agreement, the only conclusion to be reached, with no evidence pointing to the contrary, is that the 1st Appellant opted out of the Settlement and no final agreement was reached. As rightly submitted by learned Counsel for the 1st Appellant, before a binding contract can be said to exist in law, there must be unconditional and unequivocal acceptance which must be communicated to the offeror. See: ORIENT BANK (NIG) PLC Vs. BILANTE INTERNATIONAL LTD (1997) 8 NWLR (Pt. 515) 37. In the instant case, there was no acceptance at all.
Let me quickly observe that the presumption under Section 167(d) of the Evidence Act, 2011 as to failure to produce the Original Settlement Agreement purportedly signed by both the 1st Appellant and the 1st Respondent does not arise here, as I stated earlier, the facts on record buttresses the 1st Appellant?s contention that it did not sign the Agreement. It is only where the evidence on record points to the fact that the 1st Appellant had indeed signed the Agreement and failed to produce same before the Court, that the presumption under Section 167(d) will arise. I am therefore fortified in my stance that the submissions of learned Counsel for the 1st Respondent on this ground is not well founded.
Having regard to the fact that the 1st Appellant did not execute the Final Agreement and the clear evidence showing that it opted out of the settlement, and the inadmissibility of Exhibits 60t, 60u, and 60v which were all marked ‘without prejudice’, the only conclusion to be reached is that the learned trial judge erred when he held that the 1st Appellant admitted liability to the 1st Respondent. This issue is therefore resolved in favour of the 1st Appellant against the 1st Respondent.
ISSUE FIVE
Learned counsel for the Appellant referred to the award of interest made against the Appellant at 21% per annum on the debt owed by the 2nd Respondent to the 1st Respondent at page 1722 of the Records of Appeal; counsel submitted that the basis of the claim and award of interest was not established in evidence or even in the judgment of the Court and that there was no proof or premise upon which the rate of 21% was arrived at. Learned counsel referred EKWUNIFE Vs. WAYNE (W/A) LTD [1989] 5 NWLR (Pt. 122) Pg. 422; JAMBO Vs. GOV. RIVERS STATE [2007] 17 NWLR (Pt. 1062) Pg. 198 at 215-216, Para. H – A; STABILINI VISIONI LTD Vs. METALUM LTD [2008] 9 NWLR (Pt. 1092) Pg. 416 at 431, Para. F – H and BALOGUN Vs. E.O.C.B. (NIG) LTD [2007] All FWLR (Pt. 382) Pg. 1952 at 1972, Paras. A – C and submitted that a claim for interest must be specifically pleaded and established by way of proof. Counsel contended that the lower Court was in error when it awarded interest to the 1st Respondent without any pleadings or proof of entitlement of the 1st Respondent to the interest awarded or how the rate was arrived at. Counsel urged this Court to resolve this issue against the 1st Respondent and set aside the decision of the lower Court.
Learned counsel for the 1st Respondent referred to the judgment of the lower Court at pages 1722 of the Records of Appeal with respect to the payment of interest at 21% per annum; counsel referred to the 1st Respondent’s Writ of Summons and paragraphs 15, 18, 19 & 24 of the Amended Statement of Claim at pages 10 & 883 – 888 of the Records of Appeal to contend that the 1st Respondent claimed against the Defendants jointly and severally, interest on the debt owed at the rate of 21% per annum or at the prevailing interest rate at the material time; and that the claim for interest was based on the 2nd Respondent’s unlawful and/or wrongful withholding of the outstanding lease debts owed to the 1st respondent by virtue of the Aircraft Engine Lease Agreement despite several promises and proposals.
Learned counsel further referred to paragraphs 11 & 13 of the 1st Respondent’s Witness Statement on Oath at pages 970 – 982 of the Records of Appeal; Exhibit 60E at pages 94 & 96 of the Records of Appeal and the 1st Respondent’s Solicitor?s letter at page 108 of the Records of Appeal to submit that the 2nd Respondent had in their several correspondences with the 1st Respondent admitted its indebtedness to the 1st Respondent on the Aircraft Engine Lease Agreement but failed to pay the indebtedness despite several demands and proposals. Counsel relied on STABILINI VISIONI LTD Vs. METALUM LTD [2008] 9 NWLR (Pt. 1092) Pg. 416 at 433-434, Paras. G – C and DIAMOND BANK LTD Vs. PARTNERSHIP INVESTMENT CO. LTD [2009] 18 NWLR (Pt. 1172) Pg. 67 at 97, Paras. F – H to submit that interest can be awarded in a claim for the return of money arising from commercial transactions particularly where the Defendant held the money of the Plaintiff for some time without justification. Learned counsel submitted that the lower Court was right to have awarded pre-judgment interest at the rate of 21% per annum in favour of the 1st Respondent. Counsel urged this Court to resolve this issue in favour of the 1st Respondent.
In Reply, learned Counsel for the 1st Appellant submitted that the cases of STABILINI VISIONI LTD Vs. METALUM LTD (Supra) and DIAMOND BANK LTD Vs. PARTNERSHIP INVESTMENT CO. LTD (Supra) are inapplicable to the circumstances of the instant case; counsel referred to FERRO & COMPANY LIMITED Vs. H.C. NIGERIA LIMITED [2011] 13 NWLR (Pt. 1265) Pg. 592; TEXACO OVERSEAS (NIG) PETROLEUM COMPANY UNLIMITED Vs. PEDMAR NIGERIA LIMITED [2002] 13 NWLR (Pt. 785) Pg. 520 and TRANSNATIONAL CORPORATION OF NIGERIA PLC Vs. MR. & MRS. EGBE & ANOR (2017) LPELR-42243 (CA) to submit that the lower Court was wrong and embarked on speculations in arriving at the rate of 21% interest in favour of the 1st Respondent.
RESOLUTION
The position of the law on this issue is well settled on seemingly endless judicial decisions, in EKWUNIFE Vs. WAYNE (W/A) LTD (supra), as emphasized in FERRO & COMPANY LIMITED Vs. H. C. NIGERIA LIMTED (supra), referred to by the 1st Appellant, the Supreme Court of Nigeria held as follows and I quote:
‘The principle relevant to the issue under consideration has been laid down in a number of cases thereby becoming settled law that a claim for Pre-judgment interest may be made by a Plaintiff as a right where it is either expressly provided for in or is contemplated by the agreement between the parties or under a mercantile custom, or under a principle of equity as a breach of fiduciary relationship. It follows that before a party can claim Pre-judgment interest, he has to plead not only his entitlement to the interest but the basis of the entitlement, either by statute or contract/agreement between parties or mercantile custom or principle of equity such as breach of fiduciary relationship. It is not for the Court to speculate or conjecture or assume the facts relevant to the claim. The relevant facts must be pleaded, as facts not pleaded goes to not issue.’
See also UNITED BANK FOR AFRICA PLC Vs. MRS. DOREEN NKOLIKA ORANUBA (2013) LPELR 20692 (CA) and HAUSA Vs. FBN PLC (2000) 9 NWLR (Pt. 671) 64. I have earlier reproduced the relevant averments contained in the 1st Respondent?s Amended Statement of Claim and I am unable to find, contrary to the erroneous contention of learned Counsel for the 1st Respondent, any averment where the pre-judgment interest of 21% per annum was claimed by the 1st Respondent. The present case does not come under any of the instances where interest is as of right, so that the 1st Respondent?s entitlement to same must be specifically pleaded and strictly proved. In this case, this was not done, claim for interests was not pleaded, any evidence led therefore will go to no issue. This issue is resolved in favour of the 1st Appellant.
ISSUE SIX
Learned counsel for the Appellants referred to the decision of the lower Court at page 1722 and 1380 of the Records of Appeal and submitted that it was in evidence that the leased engines with CFM 56-3C1 ESN 724.458 and CFM 56-3C1 ESN 860.151 which the trial Court ordered the Appellant to return to the 1st Respondent had since been retrieved by the 1st Respondent from the 2nd Respondent long before the 1st Appellant acquired and enforced the All Assets Debenture against the 2nd Respondent. Counsel submitted that the said engines were never at any time in the possession or under the control of the 1st Appellant. Learned Counsel urged this Court to resolve this issue in favour of the 1st Appellant. Learned counsel relied on ASHIRU Vs. OLUKOYA (2006) LPELR-580 (SC); MAKINDE Vs. AKINWALE [1995] 6 NWLR (Pt. 399) Pg. 1 and GEOSITE SURVEYS (NIG) LTD Vs. NWAGBARA [2007] All FWLR (Pt. 386) Pg. 742 at 762, Paras. C – E to submit that a man cannot give what he does not have and that the law cannot command the doing of an impossible act or make an order that is incapable of being carried out. Counsel submitted that the lower Court therefore erred when it ordered the Appellants to return the engines to the 1st Respondent when the 1st Respondent at the material time was in possession of the said engines.
The 1st Respondent did not respond to this issue dealing with the return of the engines.
RESOLUTION
Looking at the evidence elicited from PW1 during cross-examination, particularly as recorded at page 1380 of Volume IV of the records of appeal, there is no doubt that the leased engines CFM 56-3C1 ESN 724.458 and CFM 56-3C1 ESN 860.151 have been in possession of the 1st Respondent, even before the 1st Appellant enforced the All Assets Debenture against the 2nd Respondent. The Witness stated on record that though the lease agreement was terminated in May, 2012, the engines were in possession of the 1st Respondent in January, 2013.
Having regard to the above position therefore, the learned trial judge erred when he held that the 1st Appellant is liable to return the engines already repossessed by the 1st Respondent. This issue is resolved in favour of the 1st Appellant.
ISSUE SEVEN
The learned Counsel for the Appellants submitted that this Court, being an appellate Court will generally not exercise its powers to interfere with an assessment of damages by the trial Court unless in certain circumstances. Counsel referred to BRITISH AIRWAYS Vs. ATOYEBI (2014) LPELR-23120 (SC); SHODIPO Vs. DAILY TIMES (1972) 11 SC Pg. 69 at 79; ALLIED BANK OF NIGERIA LTD Vs. AKUBUEZE (1997) LPELR-429 (SC) and U.B.A. PLC Vs. B.T.L. INDUSTRIES LTD [2006] 19 NWLR (Pt. 1013) Pg. 61 to submit that the award of general damages made by the lower Court in addition to the award of special damages together with interests thereon is erroneous in law; and that the guiding principle in the assessment and award of damages is ‘restitutio in integrum’ which is to the effect that the Plaintiff should be restored, as far as money can do, to the position in which he would have been if the breach had not occurred.
Learned counsel referred to pages 1712 – 1713; 1721 -1722 and 1715 – 1722 of the Records of Appeal and relied on EASTERN BREWRIES PLC, AWO OMAMMA & ORS Vs. NWOKORO (2012) LPELR-7949 (CA) and ALHAJI DANJINJIN UMAN & ANOR Vs. MRS. C.T. OWOEYE [2003] 9 NWLR (Pt. 825) Pg. 221 to submit that the award of special damages, interests, as well as general damages for the same injury amounted to double compensation. Counsel further relied on HIMMA MERCHANTS LIMITED Vs. ALIYU [1994] 5 NWLR (Pt. 347) Pg. 667; A.C.B. PLC Vs. HASTON NIGERIA LTD [1997] NWLR (Pt. 515) Pg. 110 and CROWN FLOUR MILLS LTD Vs. OLOKUN [2008] 4 NWLR (Pt. 1077) Pg. 254 at 291, Paras. D ? E; Pg. 292, Para. C to submit that the award of interests at a particular rate is in the nature of special damages.
Learned counsel cited UNION BANK OF NIGERIA LTD Vs. ODUSOTE BOOKSTORES LTD [1995] 9 NWLR (Pt. 421) Pg. 586; COMET S.A. (NIG.) LTD Vs. BABBIT (NIG.) LTD [2001] 7 NWLR (Pt. 712) Pg. 442; WASA NIG. LTD Vs. KALA (1978) 3 SC Pg. 21 at 32; KENTUS CHEMICALS AND ALLIED PROJECTS LTD Vs. UNITED BANK FOR AFRICA PLC (2012) LPELR-9836 (CA) and ARMELS TRANSPORT Vs. TRANSCO (NIG.) LTD (1974) 11 SC Pg. 237 to submit that having compensated the 1st Respondent in the contract sum and in the claims for alleged inconvenience and economic/business losses together with interests thereon, the lower Court was in error when it proceeded to make additional award for general damages on the same ground of inconvenience and economic/business losses. Counsel further submitted that the award of general damages was not needed having duly compensated the 1st Respondent and that the trial Court’s decision was either based on a misapprehension or disregard to the settled position of law.
Learned counsel further referred to UBN PLC Vs. AJABULE & ANOR (2011) LPELR-8239 (SC) to submit that an award of general damages is premised on a presumption of the direct and natural consequence resulting from a person’s wrongful act; and that in the instant case, the lower Court at page 1722 of the Records of Appeal awarded general damages against the 1st and 2nd Appellants for breach of Engine Lease Agreement when the trial Court did not make any finding of breach of the said Engine
Lease Agreement against the Appellants. Counsel argued that the trial Court only found at pages 1714 and 1715 of the Records of Appeal that the alleged breach was by the 2nd Respondent herein. Counsel submitted that the said breach occurred long before the 1st Appellant came into the picture to enforce its creditor rights against the 2nd Respondent. Learned counsel submitted that having failed to make a finding against the Appellants for breach of the Engine Lease Agreement, there was no factual basis for the award of general damages against the Appellants given that there was no nexus between the Appellants and the alleged breach. Counsel urged this Court to set aside the judgment of the lower Court and allow this appeal.
On his part, learned counsel for the 1st Respondent referred to U.B.N. PLC Vs. AJABULE [2011] 18 NWLR (Pt. 1278) Pg. 152 at 181 and EASTERN BREWRIES PLC, AWO OMAMMA & ORS Vs. NWOKORO [2012] 14 NWLR (Pt. 1321) Pg. 488 at 516, Paras. B ? C to submit that the surrounding circumstances of the instant case and the evidence adduced by the 1st Respondent at the lower Court justified the award of special damages, interests, as well as general damages in favour of the 1st Respondent and same does not amount to double compensation as contended by the 1st Appellant. Counsel referred to the particulars of special damages as stated at pages 1704 – 1705 of the Records of Appeal; Article 25 of the Lease Agreement at page 27 of the Records of Appeal; Article 25 of the other Lease Agreement at page 41 of the Records of Appeal; paragraph 24 of the Amendment Statement of Claim at pages 883 ? 888 of the Records of Appeal and Exhibit 60P at page 1203 of the Records of Appeal which counsel submitted were not challenged or contradicted by the Appellants or the 2nd Respondent.
Learned counsel submitted that from the evidence adduced at the lower Court, the special damages which consisted of the outstanding lease rentals, finance charges and expected legal fees did not adequately or fully compensate the 1st Respondent for the economic damage and/or loss of business it suffered as a result of the flagrant breach of the Engine Lease Agreements by the 2nd Respondent. Counsel referred to paragraph 17 of the 1st Respondent?s Witness Statement on Oath at pages 990 – 1002 of the Records of Appeal; Exhibit 60E at pages 92 – 96 of the Records of Appeal and Exhibit 60J at page 112 of the Records of Appeal to contend that apart from the charges which constituted the Special Damages, the 1st Respondent suffered huge economic damage and/or loss of business as a result of the 2nd Respondent?s refusal to return the 1st Respondent’s two leased engines despite the repeated demands for same until the 10th of December, 2012 when the 1st Respondent ultimately recovered possession of the said engines pursuant to the ex-parte orders made by the lower Court on the 20th day of November, 2012.
Learned counsel referred to CAMEROON AIRLINES Vs. OTUTUIZU (Supra) at 541, Paras. D – E and UNION BANK OF NIGERIA LTD Vs. ODUSOTE BOOKSTORES LTD (Supra) at Pg. 588 to submit that the 1st Respondent had adduced sufficient evidence before the lower Court to be entitled to the award of general damages together with special damages and interest. Counsel further submitted that although the lower Court did not make any findings of breach of the Engine Lease Agreements against the Appellants; the 1st Appellant inherited the liability of the 2nd Respondent to the 1st Respondent by virtue of its acquisition of all the assets of the 2nd Respondent including the 2nd Appellant which formed part of the subject matter of this suit. Learned counsel urged this Court to resolve this issue in favour of the 1st Respondent; counsel further urged this Court to dismiss this appeal and affirm the judgment of the lower Court.
In the Reply Brief, Learned counsel contended on the award of general and special damages that the facts and circumstances of this case are at variance with that of EASTERN BREWRIES PLC, AWO OMAMMA & ORS Vs. NWOKORO (Supra); and that the award of special and general damages in the said cases were for different heads of claims unlike the instant case where the trial Court awarded both special and general damages for the same ‘economic loss and business loss’ allegedly suffered by the 1st Respondent. Counsel relied on ALHAJI DANJINJIN UMAN & ANOR Vs. MRS. C.T. OWOEYE [2003] 9 NWLR (Pt. 825) Pg. 221 and urged this Court to discountenance the submissions of the 1st Respondent and to allow this appeal and set aside the judgment of the lower Court.
RESOLUTION
An appellate Court will not readily disturb and/or interfere with an award of damages by a trial Court, unless it is shown that the trial Court acted upon a wrong principle of law; or that the amount awarded is so high or low; or there was an entirely erroneous estimation of damages. See: NEWBREED ORG. LTD Vs. ERHOMOSELE (2006) 5 NWLR (Pt. 974) 499; IFEANYI CHUKWU OSONDU CO. LTD Vs. AKHIGBE (1999) 1 NWLR (Pt. 625) 1.
In the present case, the contention of the 1st Appellant is that the award of general damages together with special damages including interest is erroneous in law. Save for the issue relating to interest already considered and resolved under the preceding issue, I will find it hard to accept and associate with the submissions of learned Counsel for the 1st Appellant.
The Supreme Court of Nigeria in ELIOCHIN (NIG) LTD Vs. MBADIWE (1986) 1 NWLR (Pt. 14) 47 held that special damages will be awarded if strictly proved in addition to general damages and this does not amount to double compensation. See also UTB (NIG.) LTD. Vs. AJAGBULE (2006) 2 NWLR (Pt. 965) 447 and ODIBA Vs. AZEGE (1998) 9 NWLR (Pt. 566) 370. It is not the case of the 1st Appellant that the 1st Respondent did not prove its entitlement to the amount awarded as special damages; rather its contention, which I find not predicated on solid grounds, is that the award of special and general damages amounts to double compensation. It is not the law that where special damages are awarded, general damages cannot be awarded; each award is dictated by the evidence adduced as well as other surrounding circumstances of the case. Therefore, in my humble understanding the fact that the trial Court had awarded special damages in favour of the 1st Respondent did not preclude it from awarding general damages in its favour. I therefore do not find sufficient basis to interfere with the award made in favour of the 1st Respondent. This issue is therefore resolved in favour of the 1st Respondent.
Now on a final note, having earlier found that the present suit does not fall within the admiralty jurisdiction of the Federal High Court, the only conclusion I must reach is that the Appellants’ appeal is meritorious and must therefore be allowed and is hereby allowed by me. The Judgment of the Federal High Court, by KURYA, J. delivered on the 28th day of October, 2016 is hereby set aside.
In line with the general powers of this Court under Section 15 of the Court of Appeal Act and the powers of transfer vested in the Federal High Court pursuant to Section 22 of the Federal High Court Act, the present action in Suit No: FHC/L/CS/117/2012 is hereby transferred to the High Court of Lagos State for the Honorable Chief Judge of Lagos State, to assign to a Judge of the High Court of Lagos State there to be heard and determined expeditiously. Considering the amount of time spent in litigation, the trial Court is directed to accord accelerated hearing.
Parties shall bear their respective costs.
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.: My learned brother, TIJJANI ABUBAKAR, JCA has afforded me the rare privilege of reading in draft the judgment just delivered. I agree with the limpid reasons advanced therein to arrive at the inevitable conclusion that the mere fact that the subject matter of the present appeal borders on aircraft engine does not bring same within the exclusive admiralty jurisdiction of the Federal High Court. For the avoidance of doubt, considering the peculiar circumstances and facts of this case, it is obvious that the case before the lower Court is solely hinged on the tort of detinue, to wit, the purported detention of the 1st Respondent’s aircraft engines without the latter’s consent and contrary to the express agreement executed by the parties.
Thus, having also considered the facts contained in the records of appeal as well as the arguments canvassed in the briefs of argument filed by the learned counsel to the parties, I agree with the conclusion reached in the leading judgment that there is merit in the instant appeal. I abide by the consequential order(s) made in the leading judgment.
JAMILU YAMMAMA TUKUR, J.C.A.: My learned brother ABUBAKAR JCA. afforded me the opportunity of reading before today a draft copy of the lead judgment just delivered.
I adopt the judgment as mine with nothing further to add.
Appearances:
David AmakiriFor Appellant(s)
Emmanuel S. Ogbodo, A.D. Ubon, B.E. Olokpa (Miss) for the 1st RespondentFor Respondent(s)
