FIDELITY BANK v. TRIMIDAN LTD & ANOR
(2020)LCN/14305(CA)
In The Court Of Appeal
(IBADAN JUDICIAL DIVISION)
On Friday, June 05, 2020
CA/IB/510/2018
Before Our Lordships:
Jimi Olukayode Bada Justice of the Court of Appeal
Nonyerem Okoronkwo Justice of the Court of Appeal
Folasade Ayodeji Ojo Justice of the Court of Appeal
Between
FIDELITY BANK PLC APPELANT(S)
And
1. TRIMIDAN LIMITED 2. RODAH OMOLEYE OLANREWAJU RESPONDENT(S)
RATIO
WHO IS YOUR NEIGHBOUR IN LAW?
The rule that love your neighbour as yourself becomes in law, you must not injure you neighbour and the lawyer’s question, who is my neighbour receives a resisted reply: you must take reasonable care to avoid acts or omission which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law is my neighbour? The answer seems to be – persons who are so closely and directly affected by my acts that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question. Societe Bancarie (Nigeria) Ltd vs. Margarida Salvado De Lluch (2004) 9-12 SCM (pt. 1) 143; (Donoghue vs. Stevenson (1932) A.C. 562 at 581 per Lord Atikin.
All that is necessary as a step to establish the tort of actionable negligence is to define the precise relationship from which the duty to take care is deduced. It is however essential in English law that the duty of care should be established. The mere fact that a man is injured by another; act gives itself no cause of action; if the act is deliberate, the party injured will have no claim in law even though the injury is mentioned, so long as the other party is merely exercising a legal right. If the act involves lack of due care; again no cause of actionable negligence will arise unless the duty to be careful exists. Societe Bancarie (Nigeria) Ltd vs. Margarida Salvado De Lluch (2004) 9-12 SCM (pt. 1) 143; (Dorset Yatch Co. Ltd. vs. Home Office (1970) A.C 1004), PER OKORONKWO, J.C.A.
NONYEREM OKORONKWO, J.C.A. (Delivering the Leading Judgment): This appeal arose from the judgment of the Ogun State High Court delivered on 7th November, 2018. The respondents herein, at the lower Court, as claimant claimed against the appellant herein who was the defendant thereat as follows:
a. A Declaration that the Defendant is in breach of the advance payment guaranty contract between the 1st Claimant and the Defendant.
b. A Declaration that the Defendant is in breach of its fiduciary duty to the 1st Claimant.
c. A Declaration that the 1st Claimant is not indebted to the Defendant in the sums claimed in its letter of demand dated June 3, 2015 and October 10, 2014 or in any other sum whatsoever.
d. A Declaration that the Defendant was in breach of the contract of advance payment guarantee when it took over execution of the contract of supply of consignment of the tricycles the 1st Claimant had with Niger State Government.
e. A Declaration that the Defendant was negligent in the manner it managed the 1st Claimant’s contract with Niger State Government after it hijacked the performance of same from the 1st Claimant.
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- An Order directing the Defendant to pay the 1st claimant specific damages for breach of contract as follows:
Difference of 15% duty- N8, 777,718.50
Consultancy fees to secure 5% duty waiver on the remaining containers due to the Defendant’s breach/negligence in assessing the 1st set if Containers at 20%- N7,500,000.00
Total Demurrage- N35,133,661.50
Total- N51,411,380.50
g. An Order directing the Defendant to refund the sum of N868, 875.00 it imputed into the 1st Claimant’s account as warehousing fee when the 1st Claimant was solely responsible for ware housing all the tricycles.
h. An Order directing the Defendant to pay the 1st Claimant the sum of N100,000,000.00 (One Hundred Million Naira Only) as general damages for its negligence and destruction of the 1st Claimant’s good name and good will by black listing the 1st Claimant at the credit registry.
i. An Order directing the defendant to forward a letter of non-indebtedness to all the relevant credit registries and bureaus where it blacklisted the 1st Claimant forthwith.
j. An Order of perpetual injunction restraining the Defendant from selling,
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taking over or dealing in the 2nd Claimant’s property by Certificate of Occupancy No. 0033623 dated January, 2011 and registered as No. 76 in volume 759 at the Lands Registry, Abeokuta, Ogun State in any manner whatsoever.
k. An Order directing the Defendant to release the 2nd Claimant’s Certificate of Occupancy No. 0033623 dated January, 2011 and registered as No. 76 in volume 759 at the Lands Registry, Abeokuta, Ogun State to the 2nd Claimant. See pages 326 – 327 of the Record.
The appellant as defendant/counter claimant in the counterclaim claimed against the claimant/respondent as follows:
a. The sum of N40,710,227.26 being the balance of debt owed by the Defendants to Counter-Claim jointly and severally as at 12/02/2015 arising from the credit facilities granted to the 1st Defendant to Counter-Claim pursuant to the Letters of Offer duly executed by the 1st Defendant to Counter-Claim.
b. Interest on the sum of N40,710,227.26 at the rate of 25% per annum from 28th September, 2015 till the determination of the case and liquidation of the debt. Or in the Alternative;
c. An Order for the sale of the property situate
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at Keke Crescent, Chief Okunola Estate, Ijoko-Ota, Ado-Odo/Ota, Ogun State used as securities for the credit facilities granted to the 1st Defendant to Counter-Claim and consented to by the 2nd Defendant to Counter-Claim. See page 411 of the Record.
The case was heard on pleadings and in the end, the trial judge entered judgment in favour of the Claimant/Respondent. The defendant being dissatisfied by Notice of Appeal filed November 8, 2018 lodged this appeal at the lower Court registry upon six grounds of appeal as follows:
Ground 1
The learned trial judge erred in law when he held that the Appellant should pay the sum of N35,133,661.50 as demurrage charges to the 1st respondent.
Ground 2
The learned trial judge erred in law when he came to the conclusion that the Appellant breached the contract as represented by Exhibit D by appointing its own clearing agent to clear the contract of supply of tricycles which Niger State Government awarded to the 1st respondent.
Ground 3
The learned trial judge erred in law when he held that the 1st respondent is entitled to the sum of N8,777,718.50 being the difference of 15% duty on the
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1st consignment which the 1st respondent’s clearing agent assessed at the rate of 20%.
Ground 4
The learned trial judge erred in law when he dismissed the Appellant’s claim and proceeded to grant N50 Million damages against the Appellant.
Ground 5
The learned trial judge erred in law when he came to the conclusion that the Appellant is liable to pay the sum of N868,875.00 to the effect that the 1st respondent did not authorize the said sum for warehousing agent.
Ground 6
The learned trial judge erred in law when he dismissed the Appellant’s Counter-Claim in the sum of N40,710,227.26 at the rate of 25% per annum.
Issues for Determination
Arising from these grounds of appeal, the appellant raised four issues for determination as follows:
1. Whether, the learned trial judge was right to have held that the appellant breached the contract between the parties represented by Exhibit D. This relates to ground two of the Appeal.
2. Whether having regard to the circumstances of this case, the respondents can be said to have established their entitlement to the monetary reliefs which the Court below granted in
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their favour. This relates to grounds one, three and five.
3. Whether the learned trial judge was right to have awarded the sum of N50,000,000 damages against the Appellant. This relates to ground four.
4. Whether, the learned trial judge was right to have dismissed the Counter-Claim of the Appellant in view of the express content of Exhibit D6. This relates to ground six.
While the respondents raised three issues for determination as follows:
1. Whether the lower Court was right when it held that the Appellant was in breach of the Advance Payment Guarantee Contract (Exhibit C10/D04) by appointing its own clearing agent to clear the consignment of tricycles which the Niger State Government awarded to the 1st respondent to supply (distilled from Ground 2).
2. Whether the lower Court was justified in granting the reliefs granted to the respondents in its judgment considering the pleadings and evidence of the parties (distilled from Grounds 1, 3, 4 & 5).
3. Considering the failure of the appellant to prove its counterclaim as required by law, whether the lower Court rightly dismissed same (distilled from Ground 6).
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Background Facts as given by Respondents.
Having regards to the position of the Parties and the fact that much of the facts are not in dispute, I have decided for purposes of this appeal to adopt the statement of fact given by the respondent. It runs thus:
“It is the case of the Respondents that the 1st Respondent was awarded a contract by the Niger State Government to supply 1,000 units of Tricycles on the condition that it provides an advanced payment guarantee from a reputable bank which the Appellant provided after the 1st Respondent had disclosed all the details of the contract to the Appellant.
In awarding the 1st Respondent the contract to supply 1,000 tricycles at the sum of N624,750,000.00 (Six Hundred and Twenty Four Million Seven Hundred and Fifty Thousand Naira Only) the Niger State Government considered its expertise in importation of tricycles particularly the fact that it was a recognized Manufacturer/Assembler of Tricycles in Nigeria with Government approved waiver to import at 5% duty. Payment of N270,000,000.00 (Two Hundred and Seventy Million Naira) was made to the Appellant in favour of the 1st Respondent in March, 2012 for the execution of the
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first half of the contract (open letter of credit for importation, clearing and delivery) with immediate effect. The sum of N270,000,000.00 (Two Hundred and Seventy Million Naira) represents what was left of the original sum of N300,000,000.00 after deduction of tax in the sum of N30,000,000.00.
Upon arrival of the consignment of tricycles at the Nigerian Port, the Appellant did not inform the 1st Respondent of its arrival. The 1st Respondent only got to know of the arrival of the 1st consignment after the Appellant had assessed the custom duty payable on the first tranche of 10 containers at 20%. The Appellant proceeded to assess duty and clear the 1st consignment of 10 containers at 20% custom duty rate even though it was aware that the 1st Respondent had a waiver to clear at 5% custom duty. The Appellant released funds for the renewal of same. The 1st phase of the contract which ordinarily should take the 1st Respondent 5 months to complete took the Appellant 1 year to complete because it has no expertise in same coupled with its negligence in execution of same. The letter re-affirming the accreditation of the 1st Respondent as a recognized
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Manufacturer/Assemble of Tricycles in Nigeria and to import at 5% duty was issued on 28th May, 2012 while the waiver of the budget office is dated 3/7/12. The bill of lading and the commercial invoice with respect to the 1st 10 Containers was issued on 3rd May, 2012. Assessment was done by the Appellant at 20% duty on 31/07/2012 as evidenced by the Assessment Notice of that date and payment made by the Appellant on 27/08/2012 as evidenced by their receipt of the said date.
Owing to the breach of the Advanced Payment Guarantee contract by the Appellant who hijacked the performance of same, the 1st Respondent suffered damages by way of excess payment of custom duty on the 1st 10 Containers, Consultancy fees and demurrage on the remaining consignments of tricycles. The Appellant further frustrated the 1st Respondent’s business after the consignment started incurring demurrage by deliberately delaying the release of the funds meant to be a timely loan to clear the containers from the port. As delays were experienced, demurrage rose on a daily basis.
Pursuant to a meeting held at the office of the Attorney General of Niger State between the
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Commissioner of Transport, Niger State and the Appellant’s representatives in the persons of Messrs. Adeyemo Atiba from its Lagos Office, Nasiru Hassan (Minna Branch Manager) and one Azeez Tunde Nurudeen where it was agreed that the Appellant would be liable for non-performance of the Contract. It was then agreed that Niger State Government would bear half of the extra cost incurred as a result of the Appellant’s negligence. The Niger State Government paid the Appellant N27,000,000.00 (Twenty Seven Million Naira) in furtherance of the agreement referred to above. The Appellant refused to honour the agreement between the parties having received the said sum but rather it insisted on the 1st Respondent bearing the responsibility of the cost incurred as a result of its breach of contract and negligence.
The Appellant blacklisted the 1st Respondent at the central credit registry due to loans it incurred as a result of the Appellant’s breach of contract and negligence, thereby destroying the 1st Respondent’s business name and its ability to secure credit to fund its business. It has become impossible for the 1st Respondent to do its
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importation business. The Appellant has grounded the 1st Respondent’s business. The 1st Respondent has received several contract awards but it has been unable to execute them due to the actions of the Appellant.
The Appellant also threatened to take over and sell the 2nd Respondent’s property situate at Keke Crescent, Chief Okunola Estate, Ijoko-Ota, Ado-Odo/Ota Local Government Area, Ogun State covered by Certificate of Occupancy No. 0033623 dated 1st January, 2011 and registered as No. 76 at page 76 in Volume 759 at the Land Registry, in the Office at Abeokuta, Ogun State based on a loan which the Appellant caused the 1st Respondent to incur as a result of the Appellant’s breach of contract and negligence.
The Appellant’s contention in paragraph 2.3 of its address that it did not grant the 1st Respondent credit facility to renew its license does not arise, as it is not in doubt that the Niger State Government released 48.02% of the total contract sum to the 1st Respondent from which the 1st Respondent applied for the release of the sum of N1,500,000.00 (One Million Five Hundred Thousand Naira) upon the release of the funds
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for the tricycles by Niger State Government. The Appellant released the sum of N1,500,000.00 One Million Five Hundred Thousand Naira) to the 1st Respondent through its Managing Director on the 21st June, 2012.
Even though the Appellant was aware that the total contract sum was N624,750,000.00 (Six Hundred and Twenty Four Million Seven Hundred and Fifty Thousand Naira only) out of which Niger State Government had released N300,000,000.00 (Three Hundred Million Naira) leaving a balance of N324,750,000.00 (Three Hundred and Twenty Four Million, Seven Hundred and Fifty Thousand Naira Only), the Appellant maliciously quoted the sum of N509,000,000.00 (Five Hundred and Nine Million Naira) to Niger State Government as the balance required to complete the remainder of the contract of supply of tricycles in its letter of April 17, 2013.
The 1st Respondent did not authorize the Appellant to quote the sum of N509,000,000.00 (Five Hundred and Nine Million Naira) to Niger State Government as the balance required to complete the remainder of the contract of supply of 1000 tricycles granted to the 1st Respondent. The Appellant breached the Advance payment guarantee
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contract by quoting N509,000,000.00 when it was aware that N324,750,000.00 was the balance of the contract remaining with Niger State Government. The 1st Respondent suffered huge loss owing to the breach as Niger State Government withdrew the performance of the remainder of the contract from the 1st Respondent thereby denying it the benefit it would have enjoyed if it performed same as well as the source of repaying the loan incurred on payment of demurrage owing the Appellant’s serial breach of the Advance payment Guarantee Contract.”
Essential Legal Concepts
It seems to me that a key to understanding this case and appeal lies in appraising the essential legal concepts that run through the entire case. From the pleadings, evidence and the judgment of the trial Court, these concepts are (1) interference with contract as alleged by the respondents and upheld by the trial judge and (2) Negligence of the appellant in performing the contract of the respondent.
Appraisal of Concepts
Interference with contract
The Law of torts from long time ago recognized that knowingly to procure —or to induce a third party to break his contract to
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the damage of the other contracting party without reasonable justification or excuse is a tort. In Quinn vs. Leathem 1901 Ac 495, Lord Macnaghten said that a violation of a legal right committed knowingly is a cause of action and it is a violation of legal right to interfere with contractual relation recognized by law if there be no sufficient justification for the interference. Lumly vs. Gye 1853 E & B 216, Bowen vs. Hall (1881) 6 QB 332; Temperton vs. Russell (1893) 1 QB 715 –In Clerk & Lindsel on Torts, the common Law Library series No. 3 the principle of procuring a breach of Contract or Interference in Contract has been explained graphically thus: “But where ‘A’ procures ‘B’ to break his contact with “C”, it has been held that C can sue A, but B cannot because B must resist A’s efforts by strength of will”. Per Upjohn LJ Boulting vs. Ass. of Cimematograph, Television and allied Technicians 1963 2 QB 606, 639 – 640. Applying the formula to the case in hand, the appellant is sued for interference of the contract and so is A in the formula. The contract is between the respondents and Niger
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State Government for the procurement of Tricycles (1000 Unit). The respondent is B and the Niger State Government is C. B must be able to resist A’s effort by force of will. See Clerk & Lindsell on Torts Paragraph 792. It means that the respondents as B cannot sue because they must resist by strength of will.
Street on Torts have analyzed what the elements of the tort are. They are:
1. Kinds of contract. Interference is applicable to every contract except void contracts
2. Breach of contract – Any breach can sustain action for damages but a party who is not in breach can sue William vs. Hursy (1959) CLR 30 High Court Australia.
3. What constitutes inference?
4. What constitutes interference?
(1) Direct persuasion or procurement or inducement applied by the defendant to the contract breaker is sufficient Thomson vs. Deaking (1952) Ch.646 (1952) 2 All ER 361.
(2) Relisting performance by a tortuous act. Physical restraint upon the contractor so as to prevent him from carrying out his contract with the plaintiff. Thomson vs. Deaking (supra) or depriving him of the only possible means of carrying on the
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contract.
(3) Inconsistent Dealing
Jenkings LJ stated that there seem to be no doubt that if a third party with knowledge of a contract between the contract breaker and another has dealing with the contract breaker which the third party knows to be inconsistent with the contract, he has committed an actionable interference. Thomson vs. Deakings (supra)
(4) Interference which, if effected by contractor would be breach of contract. GWK Co. Ltd vs. Dunlop Rubber Co. Ltd. (1926) 4 TLR 376; 42 TLR 593.
Damages
It must be proved that the breach of contract has caused damage or that damage can be inferred from the circumstances.
The above highlights from the tort of inference with contract should be enough to give one an insight into the tort and clear all confusion of considering the concept as appertaining to or arising from the law of contract.
We now consider the other aspect of the case which is negligence.
Negligence – A short Appraisal
Lord Wright put the concept of negligence thus:
“In strict legal analysis, negligence means more than heedless or careless conduct whether in omission or commission.
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It properly connotes the complex concept of duty, breach, and damage thereby suffered by the person to whom the duty was owing” – Lochgelly Iron & Coal vs. M. Mullan (1934) A.C. 1 HL at 25.
Here, in my view, we are concerned with “duty” because it is the duty situation that creates condition for liability in Negligence.
A duty of care must be owed to somebody to act or refrain from acting; there must be one of those general situations which the Law recognizes as being capable of giving rise to a duty situation. In Heavens vs. Pender (1883) 11 QBD 503 at P. 509, Brett M.R. highlighted the duty requirement in the following manner:
“…whenever one person is by circumstances placed in such a position with regard to another that everyone of ordinary sense who did think would at once recognize that if he did not use ordinary care and skill in his own conduct with regard to those circumstances he would cause danger or injury to the person or property of the other, a duty arises to use ordinary care and skill to avoid such danger.”
Later, a more elaborate classification was given by LORD ATKIN in Donoghue vs. Stevenson (1932) A.C. 562:
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“…The rule that you are to love your neighbour becomes in law, you must not injure your neighbour; and the lawyer’s question, who is my neighbour receives a restricted reply. You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law is my neighbour? The answer seems to be – persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question.”
The parties are the Niger State Government and TRIMIDAN LTD 1ST Respondent. As we found in the preceding analysis, “where A procures B to break it contract with C it has been held that C can sue A but B cannot because B must resist A’s efforts by strength of will “–See Cinematograph Television and Allied Technicians 1963 2 QB 606 639-640 Per Upjohn Ltd. ‘A’ being the Appellant Fidelity ‘B’ being 1st Respondent Trimidan Ltd and ‘C’ is the Niger State Government.
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By this authority and the formula, it is only the Niger State Government ‘C’ that can sue ‘A’ for any interference with its contract with Trimidan Ltd while ‘C’ the Niger State Government can sue B Fidelity Bank but B Fidelity Bank cannot but must resist A’s – Niger State Government by strength of will.
The elements of the tort of interference with contract have been listed above and nothing in the facts of this case shows any inference with contract between Niger State Govt. and Fidelity Bank.
The trial judge treated the case as contractual and not as a tort and therefore misled himself it is entirely a tort and not contract.
Another head of claim upon which the trial judge rested his award of damages is Negligence. But one cannot see a vital aspect of Negligence which is duty. There is no formulation of duty situations which have even been made more elaborate in Nigeria in the following cases:
A person must take reasonable care to avoid acts or omissions which he can reasonably foresee would be likely to injure persons who are so closely and directly affected by his acts or omissions that he
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ought reasonably to have them in contemplation. Orhue vs. Nepa (1998) 5 SCNJ 133; (applied: Donoghue vs. Stevenson (1932) A.C. 862.
A duty of care has its origin on the concept of foreseeability. This principle was first enunciated in Heaven vs. Pender (1883) 11 QBD 503 at 509 when Bret M.R. said “whenever one person is by circumstance placed in such a position with regard to another, that everyone of ordinary sense who did think would at once recognize that if he did not use ordinary care and skill in his own conduct with regard to the circumstances he would cause danger or injury to the person or property of the other, a duty arises to use ordinary care and skill and avoid such danger.” Societe Bancaire (Nigeria) Ltd. vs. Margarida Salvado De Lluch (2004) 9-12 SCM (pt. 1) 143.
The rule that love your neighbour as yourself becomes in law, you must not injure you neighbour and the lawyer’s question, who is my neighbour receives a resisted reply: you must take reasonable care to avoid acts or omission which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law is my neighbour? The answer seems to be
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– persons who are so closely and directly affected by my acts that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question. Societe Bancarie (Nigeria) Ltd vs. Margarida Salvado De Lluch (2004) 9-12 SCM (pt. 1) 143; (Donoghue vs. Stevenson (1932) A.C. 562 at 581 per Lord Atikin.
All that is necessary as a step to establish the tort of actionable negligence is to define the precise relationship from which the duty to take care is deduced. It is however essential in English law that the duty of care should be established. The mere fact that a man is injured by another; act gives itself no cause of action; if the act is deliberate, the party injured will have no claim in law even though the injury is mentioned, so long as the other party is merely exercising a legal right. If the act involves lack of due care; again no cause of actionable negligence will arise unless the duty to be careful exists. Societe Bancarie (Nigeria) Ltd vs. Margarida Salvado De Lluch (2004) 9-12 SCM (pt. 1) 143; (Dorset Yatch Co. Ltd. vs. Home Office (1970) A.C 1004)
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Against the analysis made above. Three poignant issues arise which are:
1. Does the tort of interference with contract of a third party arise in this case?
2. Does the tort of Negligence arise in the case?
3. Did the Advance payment guarantee APG create any contract between the Appellant and either of the respondents or the Niger State Government?
Or
Was the advance Payment Guarantee a unilateral undertaken by the Guarantor Bank Liability Bank Plc to bind itself to the employer Niger State Government to the amount of N300 Million naira or 48.02% of the contract sum?
Interference with Contract
The main contract in this case is the procurement contract between Niger State Government for the supply of 1000 units of tricycles between it and Trimidan Ltd and bearing in mind that a fiduciary relationship is concerned largely with trust and confidence between parties to a transaction, undue influence may be presumed. A fiduciary relation is one founded on trust and it implies one must act with utmost fairness and honesty. Okesanya vs. Lawal 1986 NWLR (Pt. 22) 417 at 433, NBA vs. Udeagha (2006) 12 NWLR (Pt. 994) 438 at 458. Apart from the bank
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/Customer relationship between appellant and 1st respondent, no Fiduciary relation exist between the appellant and 1st respondent as to be the basis of a claim.
Advanced Payment Guarantee Exhibit D03
The Advanced payment Guarantee in this case was issued by the appellant’s bank at the instance of 1st respondent. The beneficiary is the Ministry of Lands Aviation and Inland Water ways Niger State with a tenure of 180 days for the purpose of enabling 1st respondent Trimidan Advance Payment of N300,000,000 for the supply of 1000 tricycle from Niger State Government.
The Advance Credit Guarantee, arises for the benefit of beneficiary Niger State Government to the amount of N300, 000,00. The question is whether 1st respondent can sue upon it and whether the trial judge can declare liability thereupon as in this case. I do not think so.
Having traversed main legal concepts involved in the case and appeal, the stage is now set for the resolution of issues of the appellants.
Resolution of Issues (Appellant)
Issues No.1
Whether, the learned trial judge was right to have held that the appellant breached the contract between the
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parties represented by Exhibit D. This relates to ground 2 of the appeal.
Exhibit D04 is the Advance Guarantee Payment whereby the appellant held itself out as a Guarantor liable to the Employer Niger State Ministry of Lands. Transport, Aviation and Inland Water Ways Niger State Exhibit D03 contains the terms and conditions of the Guarantee whereby the said Niger State Government is the employer and beneficiary of the Guarantee. It follows that 1st respondent cannot sue or has no locus to sue under the Advance Payment Guarantee which ennures for the benefit of the Employer Niger State Government in the event of the default and to the amount of N300, 000.00 or 48.02% of the mobilization paid.
It was wrong therefore for the trial Court to award any damage to the respondent who is not provided for under the Guarantee Exhibit D03 and D04. Edu vs. National Bank of Nig. (1971) NSCC276, Salami vs. Savannah Bank of Nigeria (1990) 2 NWLR (Pt. 130) 106.
The Advance Payment Guarantee does not exist to confer any financial benefit on the respondent. It ennures for the benefit of Niger State Govt. or agency who is paying the mobilization of 300 million naira
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or 48.02% and requires security for their money which the appellant provided under the bank’s guarantee.
The trial Court was therefore misconceived to have place liability under the Guarantee on the appellant.
Issue 2
Whether having regard to the circumstances of this case, the respondents can be said to have established their entitlement to the monetary reliefs which the Court below granted in their favour. This relate to grounds one, three and five.
Issue No. 2 is as to issue No.1, in the circumstance, respondent has not made out any claim under this heading or issue.
Issue 3
Whether the learned trial judge was right to have awarded the sum of N50,000,000 damages against the appellant. This relates to ground four.
As highlighted above, the question of negligence does not arise. There was no duty situation whatsoever between appellant and 1st respondent. There being no duty owed the 1st respondent, there can be no breach or damage. Any award at damage is without foundation and is misplaced and misapplied.
Issue NO. 6
Whether, the learned trial judge was right to have dismissed the Counter-Claim of the
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Appellant in view of the express content of Exhibit D6. This relates to ground six.
Exhibit D06 is an internal Memorandum of the 1st respondent and has nothing whatsoever with any other Party in this case or appeal. It creates no liability and has no bearing with the counter claim of the appellant which appears unchallenged. The issue No 6 is clearly irrelevant.
All four issues are without merit.
Resolution of issues (Respondents)
Issue No. 1
1. Whether the lower Court was right when it held that the Appellant was in breach of the Advance Payment Guarantee Contract (Exhibit C10/D04) by appointing its own clearing agent to clear the consignment of tricycles which the Niger State Government awarded to the 1st Respondent to supply (distilled from Ground 2)
The Advance Payment Guarantee did not create a contract between appellant and the respondent nor Niger State Government agency. It was only an enforceable payment guarantee in favour of Niger State Government agency Exhibit C10 or D04. The terms of the Guarantee is contained in Exhibit D03. There is no stipulation obliging the appellant to do anything beyond the Guarantee which is unilateral.
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Issue No. 2
Whether the lower Court was justified in granting the reliefs granted to the Respondents in its judgment considering the pleadings and evidence of the parties (distilled from Grounds 1, 3, 4 and 5).
The case of the respondent and the claims were all predicated on wrong heads of claims in interference with contract, negligence and under the Advanced Payment Guarantee all of which have been demonstrated as having no bearing with the case.
Issue No. 3
Considering the failure of the Appellant to prove its counterclaim as required by law, whether the lower Court rightly dismissed same (distilled from Ground 6).
The appellants counter claim arose independently of the Advance Payment Guarantee. Having lost prudence in the Custom Payment, Respondents had needed to continue with their contract with the Niger State Govt./Agency and needed money by way of loan from the appellant. Appellant obliged respondent. The loan detail is given in Exhibit C29 Deed of Tripartite legal Mortgage between Trimidan Ltd (the borrower) and Rodah Omoleye Olanrewaju (The Mortgagor) and Fidelity bank Plc. (The bank).
The respondents
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admitted this loan under Exhibit C29 and there is no reason whatsoever why the trial judge ought not to have given effect to Exhibit C29 and granted the counter claim. See Paragraph 7 (g) of the Amended defence and counter claim.
In the final analysis, the judgment of the lower Court is hereby set aside in it’s entirely.
Pursuant to paragraph 64 of the statement of defence and counterclaim and facts precedent thereto, the counter claim succeeds. Accordingly;
The sum of N40,710,227.26 being the balance of debt owed by the Defendants to Counter-Claim jointly and severally as at 12/02/2015 arising from the credit facilities granted to the 1st defendant to Counter-Claim pursuant to the Letters of Offer duly executed by the 1st defendant to Counter-Claim.
Interest on the sum of N40,710,227.26 at the rate of 25% per annum from 28th of September, 2015 till the determination of the case and liquidation of the debt. Or in the Alternative;
An Order for the sale of the property situate at Keke Crescent, Chief Okunola Estate, Ijoko-Ota, Ado-Odo/Ota, Ogun State used as securities for the credit facilities granted to the 1st Defendant to
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Counter-Claim and consented to by the 2nd Defendant to Counter-Claim.
JIMI OLUKAYODE BADA, J.C.A.: I had a preview of the lead Judgment of my Lord, NONYEREM OKORONKWO JCA, just delivered and I agree that the judgment of the lower Court be set aside and it is hereby set aside in its entirety by me.
I abide by the consequential order made in the said lead judgment.
FOLASADE AYODEJI OJO, J.C.A.: I have had the privilege of reading in draft the judgment just delivered by my learned brother, Nonyerem Okoronkwo, JCA and I am in full accord with his reasoning and conclusion that the appeal has merit.
For the reasons given in the said Judgment, I also allow the appeal and abide by the consequential orders made therein.
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Appearances:
Adisa OluwoleFor Appellant(s)
A.K. Ishola OsobuFor Respondent(s)
Appearances:
Adisa Oluwole For Appellant(s)
A.K. Ishola Osobu For Respondent(s)
