ESSET PETROLEUM ENTERPRISES NIGERIA LIMITED v. PETROLEUM EQUALIZATION FUND MANAGEMENT BOARD & ANOR
(2019)LCN/13889(CA)
In The Court of Appeal of Nigeria
On Tuesday, the 2nd day of April, 2019
CA/C/365/2017
RATIO
LAW OF CONTRACT: SANCTITY OF AGREEMENT: THE COURT MUST ALWAYS RESPECT THE SANCTITY OF AGREEMENT OF PARTIES
Yet, a contract is to be enforced by the Courts as agreed by the parties. This is because a Court of law must always respect the sanctity of the agreements reached by the parties. It must not make a contract for them or re-write the one they have already made for themselves. See SONA BREW PLC v. PETERS [2005] 1 NWLR [Pt. 908] 478; OWONIBOYS TECHNICAL SERVICES LTD. v U.B.N. LTD. [2003] 14 NWLR [Pt. 844] 545 SC; S. E. CO. LTD. v N.B.C.I. [2006] 7 NWLR [Pt. 978] 201 SC. PER MOJEED ADEKUNLE OWOADE, J.C.A.
LAW OF CONTRACT: ON WHOM LIES THE RESPONSIBILITY OF PROVING FACTS UNDER CONTRACT LAW
In the law of contract, it is firmly established that it is a person who asserts that money is owed to him that has the duty to prove his assertion and the exact amount owed to him. See S.B.N. PLC v CROWN STAR & CO. LTD [2003] 6 NWLR [Pt. 815] 1. PER MOJEED ADEKUNLE OWOADE, J.C.A.
LAW OF CONTRACT: HOW TO INTERPRET THE LANGUAGE CONTAINED IN A CONTRACT
Also, in the construction of the terms of a contract as in the instant case, the meaning to be placed on it, is that which is the plain, clear and obvious result of the terms used. A contract or document is to be construed in its ordinary meaning as question of fact. Thus, where the words of a contract agreement or document are clear, the operative words in it should be given their simple and ordinary grammatical meaning. See DALEK (NIG) v OMPADEC [2007] 7 NWLR [Pt. 1033] 402 SC; U.B.N. LTD. v SAX (NIG0 LTD. [1994] 8 NWLR [Pt. 361] 402 SC; OMPADEC v DALEK (NIG) LTD. [2002] 12 NWLR [Pt. 781] 384; UNION BANK OF NIG. LTD. v. OZIGI [1991] 2 NWLR [Pt. 176] 677. PER MOJEED ADEKUNLE OWOADE, J.C.A.
LAW OF CONTRACT: WHETHER THE COURT HAS THE DUTY TO MAKE CONTRACT BETWEEN PARTIES
The above is still largely based on the principle that it is not the function of the Court to make contracts between the parties. The Courts duty is to construe the surrounding circumstances including written and oral statements so as to effect the intention of the parties. See OMEGA BANK (NIG) PLC v O.B.C. LTD. [2005] 8 NWLR [Pt. 928] 547 SC.
In the instant case, and having regards to the caveat contained in Exhibits PW1 ? H, I, J, K, L, M, N, O, P, Q, R, and S the terms and conditions of payment in the agreement between the parties are uncertain or vague as to defy ascertainment with reasonable degree of certainty, and cannot be said to be a valid term of payment which can be said to offer itself for enforceability. See ODUTOLA v PAPERSACK (NIG) LTD. (NIG) LTD. [2006] 18 NWLR [Pt. 1012] 470 SC; EZENWA v EKONG [1999] 11 NWLR [Pt. 625] 55. PER MOJEED ADEKUNLE OWOADE, J.C.A.
LAW OF CONTRACT: HOW THE COURTS WILL BE ABLE TO ENFORCE A CONTRACT
This is because in order to create a binding contract, the parties must express their agreement in a form, which is sufficiently certain for the courts to enforce. See CELL AND NEPHWE LTD. v OUSTON [1914] AC 251; ORIENT BANK (NIG) PLC v BILANTE INTERNATION LTD. [1997] 8 NWLR [Pt. 515] 37. And, also because a Court of law is bound by the terms of written contract entered into by the parties. However, where a party cannot show a written contract agreement entered into, the trial Court will not go into speculation. See DALEK (NIG) v OMPADEC [2007] 7 NWLR [Pt. 1033] 402 SC; S.P.D.C. (NIG) LTD. v EMEHURU [2007] 5 NWLR [Pt. 1027] 347. PER MOJEED ADEKUNLE OWOADE, J.C.A.
JUSTICES
MOJEED ADEKUNLE OWOADE Justice of The Court of Appeal of Nigeria
OBANDE FESTUS OGBUINYA Justice of The Court of Appeal of Nigeria
YARGATA BYENCHIT NIMPAR Justice of The Court of Appeal of Nigeria
Between
ESSET PETROLEUM ENT. (NIG) LTD Appellant(s)
AND
1. PETROLEUM EQUALIZATION FUND [MGT.] BOARD
2. SECRETARY, PETROLEUM EQUALIZATION FUND [MTG.] BOARD Respondent(s)
MOJEED ADEKUNLE OWOADE, J.C.A. (Delivering the Leading Judgment): This is an appeal against the judgment of I. E. Ekwo, J. of the Federal High Court, Calabar, delivered on April 4, 2017 in Suit No. FHC/CA/CS/13/2016.
The Appellant as plaintiff in the Court below issued a writ accompanied by a statement of claim wherein he claims jointly and severally against the Respondents as follows:
1. A declaration that the contract between the plaintiff and the defendants is valid and subsisting.
2. An order of this honorable Court directing the defendants jointly/severally to pay the sum of N16,819,666 [Sixteen Million Eight Hundred & Nineteen Thousand Six Hundred & Sixty six naira only] as being the processed but unpaid outstanding debt owed to the plaintiff.
3. An order of this honorable Court directing the defendants jointly/severally to pay the sum of N4,616,540.50k [Four Million Six Hundred and Sixteen Thousand Five Hundred and Forty Naira and Fifty Kobo only] being the processed but outstanding debt of the part paid transaction.
4. An order of this honorable Court directing the defendants jointly/severally to process and pay to the plaintiff the sum of N3,484,800 [Three Million Four Hundred and Eighty Four Thousand Eight Hundred Naira only] being the unprocessed and unpaid transaction carried out for the defendants.
5. An order of this honourable Court directing the defendants jointly/severally to pay the sum of N20,000,000 [Twenty Million Naira only] being the loss suffered for the inability of the defendants to pay its debt and for the breach of contract.
6. An order of this honorable Court directing the defendants to pay 20% judgment interest on the total sum owed the plaintiff since November 2013 up to when the matter was instituted in Court.
7. An order of this honorable Court directing the defendants to pay a 20% interest on the judgment sum until when the debt is fully liquidated.
The 1st and 2nd Respondents filed a joint statement of defence, whereupon the Appellant filed a Reply to the Statement of Defence. The parties called one witness each, that is PW1 and DW1 and Appellant tendered several documents. The case of the Appellant as plaintiff was/is that it is an independent marketer of Petroleum products and licensed by the Department of Petroleum Resources to market all forms of Petroleum products to the general public. It was also registered with the Respondents to participate in the Petroleum Bridging program. That in January 2010, the Respondents engaged the Appellant to bridge petroleum products from Lagos to Calabar and Port Harcourt depots. Between January, 2010 and July 2012, the Appellant provided bridging services to the Respondents by conveying petroleum products from Lagos to Calabar and Port Harcourt depots at various times.
It was also the Appellant?s case that between the period of providing these services, the Respondents processed and paid some of its total claims leaving some balance of the total sum unpaid. The Appellant stated that it submitted all the documents required by the Respondents to process and pay all the outstanding debts owed it including the meter tickets. That in spite of submitting all the documents required, the Respondents paid part of the debts leaving a balance of N16,819,666.00 [Sixteen Million, Eight Hundred and Nineteen Thousand , Six hundred and Sixty six naira] unpaid.
It was also the Appellant?s case that the Respondents failed to process and pay the sum of N3, 484, 800.00 [Three Million, Four Hundred and Eighty Four Thousand, Eight Hundred naira only] and N4, 616, 540.50 [Four Million, Six Hundred and Sixteen Thousand Five Hundred and Forty and Fifty kobo] respectively in spite of submitting the Acknowledgment and the Certification Forms as required by the Respondents.
The Respondents do not controvert the fact that the Appellant was contracted by them for the bridging transaction but instead aver that the Appellant was paid what was due to it through the Verification, Schedule and Reporting [VSR] process based on approved payment template at the time of transaction and therefore did not leave any balance unpaid. The case of the Respondents is best understood from the averments in paragraphs 8 ? 12 of their statement of defence reproduced below:
8. The 1st and 2nd defendants deny paragraphs 12, 13, 14, 15, 16 and 17. The defendants further aver that the plaintiff was paid the amount it was eligible for after the transactions underwent processing. The 2nd defendant reserves the right of determining the rate of reimbursement due to any oil marketing company based on then existing approved template at the time of transaction.
9. The defendants aver that her Bridging Acknowledgment and Certification Form issued to the plaintiff only carries amount as requested by the plaintiff, and as recommended by the depot representative of the 1st defendant.
10. The defendant further avers the form is only an acknowledgement of receipts of the marketers documents, and not a guarantee for payment. A copy of the defendants? Bridging Acknowledgment and Certification Form is hereby pleaded and shall be heavily relied upon during trial.
11. The defendants usually carry out an independent verification exercises from the loading depots and capture same on the Verification, Schedule and Reporting [VSR], in addition to other requirements to other requirements for claims processing before reimbursement is made to any oil marketing company.
12. The defendants further aver in answer to paragraphs 12, 13, 14, 15, 16 and 17 of the plaintiff?s statement of claim that the defendants paid the plaintiff what was due to the plaintiff as processed in the Verification, Schedule and Reporting [VSR] based on the approved payment template at the time of the transaction and therefore did not leave any balance unpaid.
In his judgment of 12/04/2017, the learned trial judge reviewed the evidence of the parties and dismissed the Appellant?s case for failure to supply the Respondents the materials requisite for its claims to be processed and paid by the Respondents and inability to prove its case on balance of probabilities.
The learned trial judge held first at pages 213 to 214 of the Record of Appeal, that;
Now, both sides are ad idem on the trite principle of law that to succeed in a civil case, the onus of proof is on the plaintiff, which onus can only be discharged by preponderance of evidence. For the existence of the contract in issue in this case, the only evidence thereof are Exhibits PW1-H,I,J,K,L,M,N,O,P,Q,R and S tendered by the plaintiff. No evidence was adduced in this case to show any petroleum bridging charter between the parties.
The evidence of the Plaintiff in this case is the sole testimony of PW1 and the documentary evidence tendered by witness on the issue of indebtedness of the defendants to the plaintiff are Exhibits PW1-H, I, J, K, L, M, N, O, P, R and S. Simply put, I believe that before the parties engaged in the transactions which form the subject matter of this action there must have been terms agreed to by the parties. Going by the evidence of PW1, it is my opinion upon the evidence of PW1 and DW1 that when a bridging transaction has been effected by an independent marketers engaged by the defendant, payment for such transaction is processed upon the independent marketer submitting a Bridging Acknowledgement and Certification Form [otherwise known as Bridging Claims Form] to the defendants which are Exhibits PW1- H, I, J, K, L, M, N, O, P, R and S. The defendants upon receipt of the Form will take steps as stated on the portion of the Form titled ?For Office Use Only?. It is on the portion that the Bridging Claim is certified as scrutinized and recommended for payment. It is further stated on Exhibits PW1- H, I, J, K, L, M, N, O, P, R and S relied upon by the plaintiff what appears to me to be Caveat Emptor to wit:
This Form is to Acknowledge Receipt of Your document and not a Guarantee for Payment.
Secondly, at pages 214 to 216 of the Record of appeal that;
The duty of the Court in cases of this nature is to enforce the terms of a contract freely entered into between the parties unless the contract is void ab initio or is illegal; see CADBURY [NIG] PLC v FRN [2005] 5 NWLR [Pt. 918] 332. It is therefore not the function of the Court of law to make agreements for the parties or to change their agreement as made; see AFRICAN REINSURANCE CORP. V FANTAYE [1986] 1 NWLR [Pt. 14] 113, and ADETOUN OLADEJI (NIG.) LTD. v N.B. PLC [supra].
If the plaintiff entered into a contract with the defendants on all the terms found on Exhibi
