CHIEF J. A. OJOMO VS INCAR (NIG.) LTD.

CHIEF J. A. OJOMO VS INCAR (NIG.) LTD.

(1993) LCN/2502(SC)

In the Supreme Court of Nigeria

Friday, September 17, 1993


Case Number: SC. 57/1988

 

JUSTICES:

A.G. KARIBI-WHYTE – JUSTICE, SUPREME COURT

A.B. WALI – JUSTICE, SUPREME COURT

O. OLATAWURA – JUSTICE, SUPREME COURT

M.E. OGUNDARE – JUSTICE, SUPREME COURT

S.U. ONU – JUSTICE, SUPREME COURT

BETWEEN

APPELLANTS

CHIEF J. A. OJOMO

AND

RESPONDENTS

INCAR NIGERIA LTD

RATIO

IT IS TRITE LAW THAT THE LAW OF CONTRACT IS CONCERN WITH LEGAL OBLIGATIONS CREATED BETWEEN THE CONTRACTORS.

IT IS TRITE LAW THAT THE LAW OF CONTRACT IS CONCERN WITH LEGAL OBLIGATIONS CREATED BETWEEN THE CONTRACTORS.

OGUNDARE, JSC.: (Delivering the Judgment by the Court): By a writ of summons issued in May 1982, the plaintiff claimed from the defendants jointly and severally or in the alternative as follows:

“1. Declaration that the Plaintiff’s contract with the 1st Defendant as brokers in respect of their workers Benefit Scheme arranged with the 2nd Defendant is still subsisting.

2. An order that the 2nd Defendant do pay to the plaintiff all commission due on the said Benefit Scheme from January, 1981, until the determination of this action.”  The Defendants having put in appearance, pleadings were filed and exchanged. By paragraph 21 of his Statement of Claim, the plaintiff claimed as hereunder: “Wherefore the Plaintiff claims against the defendants jointly and severally or in the alternative. (i) Declaration that the Plaintiff’s contract with the 1st Defendant as Consultants in respect of the 1st Defendant’s workers Pension Scheme arranged with the 2nd Defendant is still subsisting. (ii) An Order that the 2nd Defendant do pay to the Plaintiff all commissions due on the said Pensions Scheme from January 1981 until the determination of this action. (iii) Further or alternatively to claims (i) and (ii) or either of them, a sum of N2.5 million from 1st Defendant being damages for breach of contract.

PARTICULARS OF DAMAGES:

(a) Commission which the Plaintiff would have earned during the year of 1981          35,000.00

(b) Commission which the Plaintiff would have earned during the year of 1982          40,000.00

(c) Commission which the Plaintiff would have earned from 1983 to 1992 that is 10 years  at N50,000.00 per annum                                                                                                                                                                                 500,000.00

(d) General Damages                                                                                                   N1,925,000.00                                                                                                TOTAL                                                                                                    N2,500.000.00

Needless to say the defendants denied liability. At the conclusion of the trial and addresses by learned counsel for the parties, the learned trial Judge in a considered judgment found as follows: “Having regard to the views which I have held earlier on the notice of termination of the services of the plaintiff I shall not grant the declaration sought so also shall I not grant the second order sought; I shall however grant the 3rd claim, for damages for a breach of contract. It is however trite law and learned counsel seemed to have conceded that , that in an action for a breach of contract, there is dichotomy of damages into special and general damages. Damages in such an action are limited to such that flows naturally from the breach or such that may be considered to have been in the contemplation of parties that will flow from such a breach. In P.Z & Co. v. Ogedenghe (1972) 1 All NLR. (Pt.l) 202, it was held among others: ‘(2) Apart from damages naturally resulting from the breach of contract no other form of general damages can be contemplated; for this reason the award of a sum as general damages in addition to the sum awarded in lieu of notice cannot stand.’   Having regard to the above, the claim under (iii) and (b) (sic) cannot stand and is hereby struck out. Based on the evidence before me, I shall grant claims (iii) (e) (sic) & (b) in their entirety: as regards claim (iii) (c) I shall grant a sum of N250,000.00 being the commission which the plaintiff would have earned for 5 years from 1983-1987 at the rate of N50,000.00 per annum. Plaintiff therefore succeeds in his claim and there shall be judgment for the plaintiff against the defendants jointly and severally for the sum of N325,000.00”.   He entered judgment for the plaintiff accordingly. Being dissatisfied with the said judgment, the defendants appealed to the Court of Appeal which court (Ademola JCA, Nnaemeka-Agu, JCA (as he then was) and Kolawole JCA by majority decision (Nnaemeka-Agu, JCA dissenting) dismissed the appeal of the 1st defendant but reduced the damages against it to N35,000.00. The court unanimously allowed the appeal of the 2nd defendant and dismissed plaintiff’s claim against it. Being dissatisfied with the majority decision of the Court of Appeal as to the damages awarded in his favour, the plaintiff appealed to this court against the award. The 1st defendant also cross-appealed on the question of liability and damages. The 2nd defendant was made a party to this appeal by the 1st defendant. I may here mention however, that the plaintiff did not appeal in respect of the dismissal of his claims against the 2nd defendant.   This is perhaps a convenient stage to set out the facts, howbeit briefly. The plaintiff practised as a pensions consultant under either the name and style of Pensions Consultant Company of Nigeria or United Pensions Consultants Company Limited or United Pensions Consultants Company. Sometime in July 1970, he made proposals to the 1st defendant for the establishment of a Pension Scheme for the latter’s staff. Consequent upon the submission of his proposals, the 1st defendant appointed him as Pensions Consultant in respect of its staff retirement scheme and other pension matters as might be approved by the 1st defendant and its Workers’ Union. The plaintiff prepared a staff Retirement Benefit Scheme which was approved by the 1st defendant. On the recommendation of the plaintiff the 1st defendant appointed the 2nd defendant as its Insurance Company for the purpose of carrying out the Scheme. Under the arrangement between the parties, the plaintiff was not entitled to any remuneration from the 1st defendant but the 2nd defendant was obliged to pay him annual commission on all premiums paid by the 1st defendant to the 2nd defendant. The Scheme came into operation on 1st January, 1971 and continued until 1980 when it appeared that things fell apart between the plaintiff and the 1st defendant in consequence of which the 1st defendant notified the 2nd defendant of the appointment of another firm of Consultants in respect of the Staff Pension Scheme. The plaintiff claimed that he was not notified of the termination of his consultancy by the 1st defendant. The 1st defendant, on the other hand, claimed that the plaintiff was so notified. The plaintiff contended that even if he was notified, such notification would not “in fact and in law” terminate his agreement with the 1st defendant. Plaintiff instituted the action leading to this appeal contending that the abrupt discontinuance of the 1st defendant to do business with him since January 1980 amounted to a breach of contract.   In plaintiff/respondent’s Brief of Argument, two questions were set out as calling for determination in this appeal which expression also includes the cross-appeal both of which shall hereinafter be referred to as “this appeal”. The 1st defendant for its part, raised three questions in its Brief of Argument. Having regard to the Grounds of Appeal as contained in the two Notices of Appeal and the judgment of the court below appealed against, I am of the view that the questions that call for determination in this appeal are as stated in the plaintiff/respondent’s Brief and these are:   “(1) Was the Court of Appeal right in confirming the decision of the trial court on the liability of the 1st Defendant for breach of contract; and (2) Was the court right in its assessment of the damages due to the Plaintiff from the breach.”   I shall now proceed to consider the questions raised but before doing so, I need say something on the position of the 2nd defendant. Mr. Kayode Sofola in his oral address before us made a point that the two appeals, that is, the main appeal and the cross-appeal do not concern the 2nd defendant as the plaintiff s claim against that defendant having been dismissed and there was no appeal against that dismissal, the 2nd defendant was no longer concerned with the matter. Learned counsel for all the parties conceded that there was no appeal against the 2nd defendant. Consequently we struck out both the appeal and the cross-appeal in so far as the 2nd defendant is concerned.

QUESTION 1: In his oral argument before us Mr. Kayode Sofola observed that the plaintiffs case was built on paragraphs 7, 8, 19 and 21(iii) of his Statement of Claim and that the sum total of this case was that his consultancy Agreement with the 1st defendant could not be terminated during the duration of the Insurance Scheme he prepared for the 1st defendant. He also observed that both the trial High Court and the Court of Appeal found that the Consultancy Agreement could be determined during the life of the Scheme. He further observed that there was no appeal by the plaintiff against this finding. Learned counsel also observed that the two courts below found that the Consultancy Agreement could be determined by Exhibit J2, a letter dated 10th December, 1980 written by the 1st defendant to the plaintiff terminating his broker’s appointment with effect from 31st December 1980 but that Exhibit J2 was never received by the plaintiff. Learned counsel submitted that it was plaintiff’s duty to establish that his contract was still subsisting at the time of the alleged breach. He referred to paragraph 14 of the Statement of Claim and argued that while plaintiff pleaded that he wrote renewal letter in January 1982 he was silent on the issue of renewal letter of January 1981. He urged the court to hold that on the pleadings and evidence the plaintiff did not prove that the Consultancy Agreement with the 1st defendant was still subsisting.   In his brief, Mr. Sofola, after referring to a passage in the lead judgment of Ademola JCA to the effect that the 1st defendant could not bring forward in the Court of Appeal a line of argument at variance with his case at the trial, submitted that paragraph 9 of the 1st defendant’s Statement of Defence was sufficient to base the argument that the plaintiff was not entitled to claim a right to express notice. Learned counsel further submitted that the absence of any term requiring express notice meant that there was not in law any need for Exhibi

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