DENJIM INTEGRATED SERVICES LTD v. BENUE STATE INTERNAL REVENUE SERVICE & ORS (2020)

DENJIM INTEGRATED SERVICES LTD v. BENUE STATE INTERNAL REVENUE SERVICE & ORS

(2020)LCN/14872(CA)

In The Court Of Appeal

(MAKURDI JUDICIAL DIVISION)

On Thursday, December 03, 2020

CA/MK/99/2017

RATIO

CONTRACT: BINDINGNESS OF CONTRACT ON PARTIES

It is settled law that parties to a contract are bound by the terms of the contract and that in determining the rights and obligations under the contract, the Court must respect its sanctity and not allow a term on which there was no agreement to be read into the contract. See Cannitec International Company Ltd v Solel Boneh Nig. Ltd. (2017) 10 NWLR Part 1572 Page 66 at 79 Para C-D per Rhodes-Vivour JSC; Idufueko v. Pfizer Products Ltd (2014) 12 NWLR Part 1420 Page 96 at 115 Para C-D per Galadima, JSC; Omega Bank Plc v. O.B.C. (2005) 8 NWLR Part 928 Page 547 SC at 574-575 Para H-A; Page 576 Para B-D per Musdapher, JSC (as he then was). PER ADEFOPE-OKOJIE, J.C.A.

APPEAL: POWERS OF THE COURT OF APPEAL UNDER SECTION 15 OF THE COURT OF APPEAL ACT 2004

Section 15 of the Court of Appeal Act 2004 empowers this Court to take whatever decision the lower Court should have taken, as if it was the trial Court. See also Kayili v. Yilbuk (2015) 7 NWLR Part 1457 Page 26 at 73 Para F-G; (2015) All FWLR Part 775 Page 347 at 387 Para B-C per Ogunbiyi, JSC; Nobis-Elendu v. Independent National Electoral Commission (2015) 16 NWLR Part 1485 Page 197 at 225 Para G-H; (2015) AFWLR Part 812 Page 1505 at 1524 Para E, 1525 Para A-B per M.D. Muhammad JSC. PER ADEFOPE-OKOJIE, J.C.A.

CONTRACT: HOW DAMAGES TO A CONTRACT ARE DETERMINED

The law is well settled that where two parties have made a contract which one of them has broken, the damages are such as may fairly and reasonably be considered either arising naturally, that is, according to the usual course of things or such as may reasonably be supposed to have been in the contemplation of both parties at the time of making the contract, as the probable result of the breach. See GE International Operations (Nig.) Ltd. v. Q Oil and Gas Services Ltd (2016) 10 NWLR Part 1520 page 304 at 335 Para B-D per Mahmud Mohammed, CJN (as he then was); B.B. Apugo & Sons Ltd v Orthopaedic Hospitals Management Board (OHMB) (2016) 13 NWLR Part 1529 page 206 at 256-257 Para B-H per Kekere-Ekun, JSC. PER ADEFOPE-OKOJIE, J.C.A.

Before Our Lordships:

Onyekachi Aja Otisi Justice of the Court of Appeal

Oludotun Adebola Adefope-Okojie Justice of the Court of Appeal

Joseph Eyo Ekanem Justice of the Court of Appeal

Between

DENJIM INTEGRATED SERVICES LTD APPELANT(S)

And

1. BENUE STATE INTERNAL REVENUE SERVICE 2. ATTORNEY-GENERAL, BENUE STATE 3. BENUE STATE GOVERNMENT RESPONDENT(S)

OLUDOTUN ADEBOLA ADEFOPE-OKOJIE, J.C.A. (Delivering the Leading Judgment): This is an appeal against the judgment of the Benue State High Court delivered on the 25th day of May, 2015 by A.O. Onum, J.

The Appellant, who was the Plaintiff at the lower Court, had filed an action for breach by the Respondents of its contract with it and seeking payment of both general and special damages. The Respondents, denying liability counterclaimed for special damages being “punitive damages for acts of conspiracy, misrepresentation, impersonation, fraud and forgery” and also for general damages. At the conclusion of hearing, the trial Judge dismissed both the Appellant’s claim and the Respondents’ Counterclaim.

Aggrieved, the Appellant appealed to this Court, by Notice of Appeal filed on 23/6/16, subsequently amended by leave of the Court granted on 25/9/18. The Amended Notice of Appeal, filed on 20/9/18, was accordingly deemed as properly filed by this Court on 25/9/18.

By reason of the grant of an application filed by the Appellant’s Counsel at the hearing of the appeal on 19/11/2020 for

regularization of the Record of Appeal, the said Record, transmitted on 22/3/2017, together with the Briefs of Arguments which had been filed by the parties, were deemed as properly filed on 19/11/2020.

In the Appellant’s Brief of Arguments, prepared by Shaager Boayally, Esq., filed on 7/12/2018 but deemed, as aforesaid, as properly filed on 19/11/2020, three issues were formulated for determination, as follow:
1. Whether or not the filling in longhand of the space left for the insertion of the date, month and year of commencement on a duly executed contract document amounts to interconnection and additions requiring to be countersigned by the parties in the absence of which the document would be deemed worthless as evidence of the date of commencement.
2. Whether or not proceeding from the trial Court’s finding that either Exhibit B3 and E3 read together with Exhibit B, B1 and B2 shows a clear intention of the parties to go into a contractual relationship, having regards to the due execution of the contract document by both parties without any provision that the contract was made escrow and in particular that Exhibit B3 which had

the commencement date on it has each of its pages duly franked by the DW1 is conclusive, unimpeachable and preferred evidence that the parties were agreed on the commencement date upon the execution of the contract?
3. Whether or not the Appellant proved his claim at the trial Court and was entitled to the reliefs claimed.

M.T. Alashi, Principal State Counsel, Ministry of Justice, Benue State, in the Respondents’ Brief of Arguments filed on 4/2/19 but deemed as properly filed on 19/11/20, adopted the issues for determination formulated by the Appellant.

In response, the Appellant filed a Reply Brief on 15/9/2020, similarly deemed as properly filed on 19/11/20.

The 3rd issue formulated, I note, can conveniently be subsumed under the 2nd issue. I shall thus adopt as the issues that arise for determination, the 1st and 2nd issues formulated by the Appellant, modified for succinctness, as follows:
1. Whether or not the filling in longhand of the spaces left for the insertion of the date on a duly executed contract renders the document worthless for lack of countersigning?
2. Whether or not the lower Court was right to have held

that the Respondents did not breach their contract with the Appellant.
The 1st issue, in consequence is:
Whether or not the filling in longhand of the spaces left for the insertion of the date on a duly executed contract renders the document worthless for lack of countersigning?

This issue comes about by reason of the decision of the lower Court that the document relied upon by the Appellant in proof of the contract between the parties, Exhibit “B3”, is a worthless document, on the ground that “the hand written interlineations or additions in paragraph 5 of Exhibit B3, having not been signed by the parties are undoubtedly worthless as evidence on the important point of when the agreement between the parties was to commence.”

Exhibit “B3” is the Memorandum of Understanding (MOU) between the parties. Both parties tendered this document. In the version tendered by the Appellant at the lower Court, the date of the agreement was inserted in hand as 25th day of June, 2013. The commencement and duration date of the agreement in Clause 5 was also written in hand as 26th day of July, 2011 to 25th day of July, 2016.<br< p=”” style=”box-sizing: inherit; margin: 0px; padding: 0px;”>

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In the version of the MOU tendered by the Respondent (Exhibit E3) there were blank spaces for the date and also the commencement and duration period.

The lower Court acknowledged that the parties had “hotly contested” the genuineness of the document, with the Respondents alleging that it was forged because the said dates were written in long hand. The Court, upholding the Respondents’ contention, held that there was no binding agreement between the parties that could be enforced.

COUNSELS’ SUBMISSIONS:
The Appellant has pointed out that it is a judicially noticeable fact and also customary, for contractual documents to leave spaces for insertion of commencement dates subsequently. He submitted, citing APC v INEC (2015) ALL FWLR Part 771 Page 1420, that where a document is silent on the commencement date, it will be presumed that effect will be given to it from the date the officer signed the document. It also stands to reason that the execution at the bottom of the document referring to the date and year above-written renders the dates written more probable. Counsel distinguished the case of Omega Bank PLC v OBC Ltd (2005) All FWLR Part 249 Page 1064.

The learned Counsel for the Respondent submitted that the decision of the lower Court was right, as it is the duty of the trial Court which saw and heard the witnesses, to evaluate their evidence and pronounce on their credibility as well as ascribe probative value to it, citing Ukeje v. Ukeje (2014) WRN 1 at Page 25. The Respondents, having challenged this document in the lower Court as a forged document, the lower Court was right not to have attached any evidential value to it, as the onus of proof placed on the Appellant to establish before the lower Court that Exhibit “B3” was more authentic than Exhibit “E3” was not discharged.

DECISION:
As aforesaid, the Appellant’s version of the Memorandum of Understanding is “Exhibit B3”, while the version relied upon by the Respondents is Exhibit “E3”. The contents of both documents are the same, save for the blank spaces mentioned above. As pointed out by the Appellant’s Counsel, it is indeed customary in typed agreements to leave the date of the agreement blank, to be filled in at a later date. I do not

consider this deleterious to the agreement. As also submitted by the Appellant, the fact that dotted lines in the agreement are filled by hand, do not make the document forged.
With respect to Clause 5 of Exhibit “E3” tendered by the Respondents, of the document states:
5. Commencement/Duration/Renewal:
“This Agreement shall take effect from the …day of ….2011 and shall subsist for a period of Five (5) years therefrom, terminating on the ….day of …2014 but the same may be renewed for such further period and terms as may be mutually agreed upon by the parties herein.”
In Exhibit “B3”, however, Clause 5 states as follows:
“This Agreement shall take effect from the 26…day of July….2011 and shall subsist for a period of Five (5) years therefrom, terminating on the 25..day of July…2016 but the same may be renewed for such further period and terms as may be mutually agreed upon by the parties herein.”
As aforesaid, the portions inserted in Exhibit B3 are handwritten.
What is clear is that where dots are left in documents as in this case,

the presumption is that these dots are to be filled at a later date, as occasion demands. It is also clear that these spaces cannot but be filled by hand, the document having already been typed.
No authority has been produced to suggest that where blank spaces are to be filled by parties, these blank spaces must be countersigned. It is an entirely different matter where there have been erasures or cancellations. Those, I agree, may need to be signed to show the authenticity of those erasures/cancellations. Where, as in this case, the blank spaces were merely filled, without cancellations, I know no requirement of the law that requires them to be initialed.
What was held in the case relied upon by the lower Court in impugning Exhibit B3 of Omega Bank Plc v OBC Ltd (2005) LPELR 2636 at Pages 34-35, Para F-A (2005) All FWLR Part 249 Page 164, is the statement by Tobi JSC that “where a document is not signed, it may not be admitted in evidence. Even if it is admitted in evidence, the Court should not attach any probative value to it. This is because a document which is not signed has no origin in terms of its maker.”
Similarly, in the case

also relied upon by the lower Court, of Garuba v KIC (Kwara Investment Company) (2005) LPELR Page 1310; (2005) All FWLR Part 252 Page 469, the Supreme Court, per Oguntade, JSC, impugning the document relied upon by the lower Court, observed that the document described as a handbook containing the Company’s general policies did not bear the signature of the appellant company’s director, secretary or any principal officer of the company.
This is however not the situation in the instant case where both Exhibit B3 and D3 were signed by officers of both companies.
The Execution clause in both agreements, which are identical, is set out hereunder:
“IN WITNESS WHEREOF, THE PARTIES HAVE HEREUNTO SET THEIR HANDS AND SEALS, THE DAY AND YEAR FIRST ABOVE
Signed, Sealed and Delivered for, and on behalf of the within named Client:
Benue State Government:
Name E.G Ayangebee Name Torsabo David
Designation Head: Head Unit Designation Revenue Management Officer
Address BIRS Makurdi Address BIRS Makurdi
Signature … SGD…

Signature… SGD…
Signed, Sealed and Delivered for and on behalf of the within named Consultant:
Name Akortsaha A.A. Name Kyagu Ahangba
Designation MD/CEO Designation Secretary
Address 97 Gboko Road, Makurdi Address After 3 Tks Bar AnkpaQrs Makurdi
Signature ….SGD……. SGD…”
It is important to note that these above details contained in Exhibits “B3” and “E3” were all handwritten and not typed.
The presupposition appears to be that the MOU is executed between the 1st Respondent and its contractors, leaving the blank details to be filled as occasion demands. Be that as it may, both Exhibits “B3” and “E3” are signed, making the principles in Omega Bank Plc v. OBC Ltd. Supra and Garuba v. KIC Supra inapposite.
Contrary to what the lower Court held, I see no “hand written interlineations or additions”, merely a filling of blank spaces meant to be filled.
Indeed, as pointed out by the Appellant’s Counsel, the words “In witness

whereof the parties have set their hands, the day and year above written” are indicative of the fact that a date has been inserted above, which the execution clause is referring to. This thus gives validity to Exhibit “B3”, I hold.
The trial Court, I accordingly hold, was in error to have held Exhibit “B3” to be worthless for the reason that the dates were filled in long hand and that they these hand written dates needed to have been countersigned.
I thus resolve the 1st issue in favour of the Appellant.

The 2nd issue for determination, is:
Whether or not the lower Court was right to have held that the Respondents did not breach their contract with the Appellant.

COUNSELS’ SUBMISSIONS
The Appellant’s Counsel, referring to the exhibits before the Court, submitted that a clear intention to go into a contractual relationship was shown and that the Appellant had proved the frustration of the contract as a result of the Respondents’ failure to provide an enabling environment for the smooth performance of the Appellant’s contractual obligation. This, the 1st Respondent did, by

failing to introduce them to the relevant stake holders and zonal officers to enable them function and which officers obstructed them, not being on the list of consultants submitted, thereby breaching Paragraph 4(a) (i) of the Memorandum of Understanding.

Appellant’s Counsel submitted that the special damages were proved, having not been challenged and that the general damages should have been awarded. He accused the trial Court of failing to make a proper appraisal of the exhibits and was wrong to have looked outside these exhibits to determine the genuineness of them. The contract between the parties having been breached, the Respondents were liable for the default arising.

The Principal State Counsel, for the Respondents, submitted that the 1st Respondent had the unfettered right to terminate the contract if the Appellant failed to make remittances of revenue collected for a period of two consecutive months, pursuant to Clause 6(a) of Exhibit B3, which the Appellant failed to show compliance with. All that was tendered was the sum of N70,000.00 for the period 2011-2015. He denied that there was a mutuality of purpose and that there must be

consensus ad idem. He also questioned the capacity in which PW1 testified.

DECISION
It is settled law that parties to a contract are bound by the terms of the contract and that in determining the rights and obligations under the contract, the Court must respect its sanctity and not allow a term on which there was no agreement to be read into the contract. See Cannitec International Company Ltd v Solel Boneh Nig. Ltd. (2017) 10 NWLR Part 1572 Page 66 at 79 Para C-D per Rhodes-Vivour JSC; Idufueko v. Pfizer Products Ltd (2014) 12 NWLR Part 1420 Page 96 at 115 Para C-D per Galadima, JSC; Omega Bank Plc v. O.B.C. (2005) 8 NWLR Part 928 Page 547 SC at 574-575 Para H-A; Page 576 Para B-D per Musdapher, JSC (as he then was).

In the instant case, the parties are agreed on correspondence between them in the course of the transaction. Exhibit “B” is a letter from the 1st Respondent to the Appellant dated 6/7/2011.
The contents of Exhibit “B” are set out below:
“APPOINTMENT AS CONSULTANT/PARTNER FOR THE COLLECTION OF REVEUE ON REGISTRATION OF ASSOCIATIONS
1. I am to convey the appointment of your Company (Dejinm

Integrated Services Limited) as a “Consultant/Partner for the collection of revenue on registration of Associations (i.e. Food Sellers Association, Sheep & Goats Sellers Association and Cattle Dealers Association) throughout Benue State.
2. Details of this appointment would be contained in an Agreement/Memorandum of Understanding to be executed between your Company and the Benue State Government on the matter.
3. In the event that you accept this appointment, do communicate your acceptance within one clear week from the date of your receipt of this offer letter. Note that the acceptance letter shall be accompanied by your company’s Certificate of Incorporation, your current Tax Clearance Certificate as well as a Draft Agreement/Memorandum of Understanding for our vetting.
4. Congratulations.
SGD
Barr E.T.C. Akula
Ag. Board Secretary/LO
for: Executive Chairman.”

By Exhibit “B2” dated 14/6/2013, the 1st Respondent, in response to the Appellant’s request, “approved the modification of the appointment of your company as a Consultant/Partner for the collection of revenue from food

vendors and registration of Associations (i.e. Sheep, Goat and Pig Sellers Associations and Cattle Dealers Association) throughout Benue State.”

The agreement reiterated that “Details of the appointment would be contained in an Agreement/Memorandum of Understanding to be executed between your Company and the Benue State Government.”

The MOU, duly executed by the parties and tendered by them both, as aforesaid was Exhibits “B3” and “E3” respectively. Having decided in favour of the Appellant, with regard to Exhibit B3 above, due regard will be given to this exhibit, which has not been successfully proved by the Respondents to be a forgery. This document gives the date of the agreement to run from 26/7/2011 to 25/7/2016.

Salient points of relevance to the determination of this issue, are the following clauses:
Clause 1(d) Which provides that the Consultant “shall be entitled to pocket any amount of money collected over and above the sum specified in paragraph 2(i) and (ii).”
Clause 2 (i) which provides that the Consultant shall remit to the client “on a monthly basis the sum of

Fifty thousand Naira (N50,000.00) throughout the subsistence of this agreement and which, by Clause 2(ii) should be “not later than the 2nd day of each succeeding month.”
Clause 6 “Termination:
(a) That if the Consultant is in arrears of remittance of revenue for a consecutive period of two months, the client shall be at liberty to terminate the agreement without giving any prior notice to the Consultant.
(d) The termination of this Agreement shall be without prejudice to the rights that might have accrued to the respective parties prior to the termination thereof.”

The parties are in agreement that the 1st Respondent, by its letter dated 12/6/2015, Exhibit “B14” terminated this appointment. It gave as some of its reasons that the acceptance of the appointment was not done within one week from the date of receipt of the letter of appointment and that none of the requested documents, viz Certificate of Incorporation, Tax Clearance Certificate and draft Memorandum of Understanding for vetting were produced. Furthermore, that “records of revenue remitted to the revenue account of the Benue State

Government with effect from the date of the consultancy appointment, on Friday 5th June 2015” were not produced.

However, as successfully contended by the Appellant, the letter of appointment was duly accepted and the requested documents submitted. In addition, the 1st Respondent continued to transact business with the Appellant over the years and cannot be heard to be complaining, years later, about the absence of any documents.

Of importance is Exhibit “B5”, a letter written by the Appellant to the 1st Respondent dated 22/5/2014 complaining, inter alia, of the 1st Respondent’s failure to create an enabling environment for its smooth operation, contrary to Clause 4(a) of the MOU, as the Respondent had failed to introduce it to the stakeholders/authorities and complaining that “rather than give us the required cooperation/assistance, the stakeholders including your zonal/area officials” were stampeding their efforts, giving as their reason that the name of the company has not been included among the list of consultants.

There were also a series of letters requesting the 1st Respondent to release the MOU to

them to enable them proceed with the assignment.

I do agree with the Appellant that by the acts of the 1st Respondent, it had been prevented from carrying out the assignment effectively, thereby frustrating the contract. The lower Court was accordingly in error to have held that as there was no valid contract between the parties, there was no breach by the 1st Respondent of any contract.

I again resolve the 2nd issue for determination in favour of the Appellant.

The follow up question is what remedy is available to the Appellant?

Having held that there was a breach by the 1st Respondent of its contract with the Appellant, the question is what damages

attend a breach of the Appellant’s contractual obligations.
The law is well settled that where two parties have made a contract which one of them has broken, the damages are such as may fairly and reasonably be considered either arising naturally, that is, according to the usual course of things or such as may reasonably be supposed to have been in the contemplation of both parties at the time of making the contract, as the probable result of the breach. See GE International Operations (Nig.) Ltd. v. Q Oil and Gas Services Ltd (2016) 10 NWLR Part 1520 page 304 at 335 Para B-D per Mahmud Mohammed, CJN (as he then was); B.B. Apugo & Sons Ltd v Orthopaedic Hospitals Management Board (OHMB) (2016) 13 NWLR Part 1529 page 206 at 256-257 Para B-H per Kekere-Ekun, JSC.
In the instant case, the Appellant has claimed special damages of N85,850,000.00 made up as follows:
1. Production of identity cards …………N250,000.00
2. Purchase/branding of uniforms……..N10,000,000.00
3. Printing of receipts and memos………N600,000.00
4. Payment of ad hoc staff salaries for 3

months…N15,000,000.00
5. Salary arrears for 12 months………….N60,000,000.00
6. An order directing the Defendants to pay to the Plaintiff the sum of N1,000,000,000.00 as general damages
7. The cost and the expenses of this suit including legal fees assessed at N1,000,000.00.
The claim for projected remuneration of N11,000,000.00 was withdrawn and in any event is speculative.
In determining the damages to be awarded, Clause 4(b) (ii) of the MOU states that the Consultant shall “Carry out the recruitment of its staff, pay the salaries and all the remunerations of the said staff. The said staff shall have identity cards and uniforms (as may be approved by the Client) for easy identification.”
Clearly therefore, the Respondents cannot be made liable for payment of the staff salaries, identity cards, purchase of uniforms and printing of receipts. However, it is clear that by reason of the 1st Respondent’s failure to produce a conducive environment, as demonstrated in the letters above, the Appellant was unable to achieve the projected revenue target and was made to incur expenses, to its detriment.

The law provides that where it is impossible to state the quantum of damage, the Court can award what, in its opinion, is reasonable. See Union Bank Plc v. Chimaeze (2014) 9 NWLR Part 1411 Page 166 at 192-193 Para H-A; (2014) All FWLR Part 734 Page 48 at 72 Para F-G per Ariwoola JSC; Eneh v Ozor (2016) 16 NWLR Part 1538 page 219 at 238 Para G-H per Aka’ahs, JSC.
What I believe is reasonable in the circumstances of this case is the sum of N1,000,000.00 (One Million Naira) to the Appellant as damages for breach of contract, as the law expects the Appellant to minimize his loss. See Onwuka v. Omogui (1992) 3 NWLR Part 230 page 393 at 422 Para B per Babalakin, JSC; Page 425 Para B per Nnaemeka-Agu, JSC.

In consequence, this appeal is allowed in part. The judgment of the lower Court is set aside and in its stead are made the following orders:
1. A declaration is granted that the acts of the Respondents, particularly the 1st Respondent against the Appellant constitute a breach of contract.
2. The sum of N1,000,000.00 (One Million Naira) is awarded to the Appellant as damages for breach of contract.
3. Costs of N100,000 are awarded to the Appellant.

ONYEKACHI AJA OTISI, J.C.A.: My Learned Brother, O.A, Adefope-Okojie, JCA, made available to me a draft copy of the lead Judgment, just delivered, in which this appeal has been allowed in part. The resolution of the issues arising for determination have been comprehensively considered and resolved and I adopt same as mine.

I also allow this appeal in part and abide by the orders made in the lead Judgment, including the order as to costs.

JOSEPH EYO EKANEM, J.C.A.: I read in advance the lead judgment of my learned brother, O.A. Adefope Okojie JCA, and I agree with the reasoning and conclusion therein allowing the appeal. In consequence, I set aside the decision of the trial Court and abide by the consequential orders made in the lead judgment.

Appearances:

Shageer Boayally, Esq For Appellant(s)

L. Edia, Senior State Counsel, Ministry of Justice, Benue State For Respondent(s)