GTB v. SITE MODE ENGINEERING LTD (2020)

GTB v. SITE MODE ENGINEERING LTD

(2020)LCN/14748(CA)

In The Court Of Appeal

(ABUJA JUDICIAL DIVISION)

On Tuesday, November 10, 2020

CA/A/516/2017

RATIO

CONTRACT: RENUNCIATION OF CONTRACT

Renunciation as described by the text Chitty on Contract (27th Edition) page 1161 goes thus:
“A renunciation of contract occurs when one party by words or conduct evinces an intention not to perform, or expressly declares that he is or will be unable to perform, his obligations under the contract in some essential respect. An absolute refusal by one party to perform will entitle the other party to treat himself as discharged as will also be clear and unambiguous assertion by one party that he will be unable to perform when the time for performance should arrive. Short of such an express refusal or declaration, however, the test is to ascertain whether the action or actions of the party in default are such as to lead a reasonable person to conclude that he no longer intends to be bound by its provisions. The renunciation is then evidenced in his conduct. Also, the party in default may intend in fact to fulfill (the contact) but may be determined to do so only in a manner substantially inconsistent with his obligations or may refuse to perform the contract unless the other party with certain conditions not required by its terms.” PER NIMPAR, J.C.A.
TERMS: IMPLIED TERMS

It is trite that every trade, profession or specialized endeavor, there are salient terms which are implied terms. The trial Judge restricted himself to the contract agreement and decline to acknowledge that in some professions certain terms do not need to be specifically mentioned in the agreement. In implying terms in facts the exercise involved is that of ascertaining the presumed intention of the parties collected from the words of the agreement and the surrounding circumstances. It must have been a term that went without saying, a term necessary to give business efficacy to the contract, a term which though tacit is part of the contract the parties made for themselves. The apex Court in the case of NIGER INSURANCE & CO LTD V ABED BROTHERS LTD & ANOR (1976) LPELR-1995 described implied terms as follows:
“In Sterling Engineering Co. Ltd. v. Pratchett (1955) AC 534 at 547, Lord Reid stated the legal connotation of the phrase “implied term” in these words: “Strictly speaking, I think that an implied term is something which, in the circumstances of a particular case, the law may read into the contract if the parties are silent and it would be reasonable to do so: it is something over and above the ordinary incidents of the particular type of contract. If it were necessary in this case to find an implied term in that sense I should be in some difficulty. But the phrase “implied term” can be used to denote a term inherent in the nature of the contract which the law will imply in every case unless the parties agree to vary or exclude it.”Per BELLO ,J.S.C. PER NIMPAR, J.C.A.
WORD AND PHRASES: MEANING OF A FOUNDATION

A foundation is described as part of a building or structure that transmits structural loads to the earth and supports the superstructure. In another definition, it says solid ground or base natural, or artificial, nature or artificial, on which building rests. See Business Dictionary and Concise Oxford Dictionary. PER NIMPAR, J.C.A.
EVIDENCE: RULE ON DOCUMENT TENDERED IN EVIDENCE BY A NON-MAKER

The rule is that a document could be tendered in evidence by a non-maker but it will not inure any evidential value because the maker is not available for cross-examination, see OKEREKE V UMAHI & ORS (2016) LPELR-40035(SC) which held thus:
“As this Court explained in Buhari v. INEC (2009) 19 NWLR (pt 1120) 246, 391 -392, “weight can hardly be attached to a document tendered in evidence by a witness who cannot or is not in a position to answer questions on the document. One such person the law identifies is the one who did not make the document. Such a person is adjudged in the eyes of the law as ignorant of the content of the document.”
In OMISORE & ORS V AREGBESOLA & ORS (2015)LPELR-24803(SC) the apex Court categorically said such a document is worthless and cannot be considered, it held thus:
”The exhibits tendered from the bar without calling the maker thereof were also held to attract no probative value because there was no opportunity given the respondents to cross-examine upon for purpose of testing their veracity. See Saeed v. Yakowa (2011) All FWLR (Pt. 692) 1650. As a matter of law, documents are to be tested in open Court before the tribunal can evaluate them. See ACN v. Lamido (2012) 8 NWLR (Pt. 1303) P.56 at 580-581.” Per OGUNBIYI, J. S .C. PER NIMPAR, J.C.A.

Before Our Lordships:

Peter Olabisi Ige Justice of the Court of Appeal

Yargata Byenchit Nimpar Justice of the Court of Appeal

Muhammed Mustapha Justice of the Court of Appeal

Between

GUARANTY TRUST BANK PLC APPELANT(S)

And

SITE MODE ENGINEERING LIMITED RESPONDENT(S)

YARGATA BYENCHIT NIMPAR, J.C.A. (Delivering the Leading Judgment): This Appeal is against the decision of the High Court of the Federal Capital Territory sitting in Abuja delivered on the 22nd March, 2017 by HON. JUSTICE A. I. KUTIGI wherein the Court below entered Judgment against the Appellants and awarded the sum of N5,000,000.00 general damages with 10% interest thereon until liquidation thereof. Dissatisfied with the said decision, the Appellant filed a Notice of Appeal on the 31st May, 2017 donating 12 grounds of Appeal. The Records of Appeal was transmitted to the Court on the 20/7/2017.

The facts leading to this appeal are amenable to brief summary, the Respondent was awarded a contract to construct a Guaranty Trust Bank branch office at Kubwa. In the course of the project, the Appellant was not satisfied with the handling of the project and terminated the contract. One of the reasons was the use of a hand mixer instead of concrete mixer. Appellant engaged another contractor, used materials kept on the site by the Respondent to conclude the project. The Respondent alleged it was mobilized with 50% and was due for the next payment but on the

termination of the contract, the payment was stopped even though work done was in excess of the 50% down payment. Aggrieved by the termination the Respondent initiated the claim by way of writ of summons before the trial Court and sought the following reliefs:
a. A declaration that the Defendant is in breach of the terms of the Contract awarded dated 4th March, 2008 for the development/construction of defendant’s Bank Kubwa branch complex.
b. A declaration that the determination of the contract by the Defendant is wrongful.
c. Award the sum of N5,000,000.00 as general damages payable by Defendant to the Plaintiff for breach of contract.
d. Award 10% interest on the above judgment sum from the date of judgment until final payment.
e. Award cost assessed in the sum of N25, 000 payable by the Defendant to the Plaintiff.

Issues were joined by the parties through pleadings and the matter went to full trial with parties calling witnesses in proof of their respective pleading and final written addresses. After due consideration, the Court below entered Judgment against the Appellant thus the appeal.

Appellants’ brief

settled by J. M. M. MAJIYAGBE, ESQ., is dated 26th day of July, 2017 filed on the 27th day of July, 2017 and deemed the 7th October, 2020 and it distilled 3 issues for determination as follows:
1. Whether the learned trial Judge was right to hold that there was insufficient material before him to make a finding of breach and renunciation of contract by the Respondent, just because there were no bills of quantities etc tendered into evidence? (Distilled from ground 1, 2, 3, 8, 9 and 10).
2. Whether the learned trial Judge was right to ignore exhibit P6 and decide the case against the Appellant partly on the grounds that the building contract’s external invigilator and the company that concluded the building after the Respondent breached and renounced the contract were not called to testify? (Distilled from ground 4, 5, 6 and 7).
3. Whether the learned trial judge was right to award the damages (with interest thereon) that he did? (Distilled from ground 11 and 12).

The Respondent’s Brief settled by FESTUS KEYAMO, SAN is dated 5th April, 2018 filed on the 6th April, 2018 and deemed the 7th October, 2020. It formulated 3 issues thus:<br< p=”” style=”box-sizing: inherit; margin: 0px; padding: 0px;”>

</br<>

Whether the learned trial Judge was right when it held that the Appellant was not able to proof breach of contract by the Respondent due to lack of substantial evidence.
2. Whether the trial Court was right to have placed heavy reliance on Exhibit P1 in construing the contract between the Appellant and the Respondent.
3. Whether the Respondent proved his case on the preponderance of evidence to be awarded N5,000,000.00 as general damages with interest.

APPELLANT’S SUBMISSIONS
ISSUES ONE AND TWO
The Appellant argued issues one and two together. Starting its arguments the Appellant submits that the trial Court lamented the absence of bill of quantities and engineering documents which made it difficult to determine whether the Respondent had renounced the contract. But the trial Court erred in that regard because the case of the Appellant was the breach of implied terms of contract and the renunciation of the said contract by the Respondent. The trial Court failed to take cognizance of implied terms which automatically come into play in a building which are not specifically written out, this was the book:

Chitty on Contract (27th Ed.) quoted at pages 4 of the Appellant’s Brief. The point made in Chitty is that law automatically presumes such terms, without having to look at the intentions of parties. It is the general presumption of law that the Respondent in the present case would utilize best practice and workmanship to produce a strong and stable building which will be used by the Appellant to serve the members of the general public. These are implied terms that need not be specifically stated, referred to Hudson’s Building and Engineering Contracts (11th Ed.) page 526 paragraph 4.076.

Continuing its submission, the Appellant states that if a company is engaged to construct a bank building; it will be presumed that the company will utilize sound workmanship and materials that will ensure that the building is not liable to collapse on members of the public. The Judge does not require a bill of quantities or engineering documents to determine whether the Respondent was in breach of the implied terms of contract. Appellant referred to the book by Chitty where it states that “certain terms will be implied, unless the implication of such term would be

contrary to the express words of the agreement”. Applying the above quote to the present case, without a detailed construction agreement or bill of quantities, the trial Judge should have relied on the building and construction implied terms of contract and found the Respondent guilty of renunciation. The Appellant also submits that if the Appellant’s case was the breach of terms of a written agreement by the Respondent, the trial Judge would have been quite right to refrain from making a find based on a document not before the Court. But the case of the Appellant was breach of implied terms of the contract as reflected in paragraph 45(a) of the Statement of Defence contained in Page 30 of the Record.

The Appellant argued that in paragraph 45(b) to (f) of the Statement of Defence, the Appellant further particularized other incident of poor workmanship and substandard materials that were a breach of the implied terms of the contract. Tendering of bill of quantities and drawings (to show written terms of contract) was definitely not germane to the Appellant’s defence. The Respondent ought to be the one to produce such documents to prove

that it was not in breach of the implied terms that the law presumes. Under cross-examination, PW1 was asked to show the Court where in the documentary evidence before the Court it stated that he could use hand-mix, he answered “there is none in the documents”. If the relevant documents does exist and is in favour of the Respondent, he would have produced them. From the above submission, it is quite clear that bills of quantities and related documents are not prerequisite for making a finding of breach of contract and renunciation.

Appellant submits that it defence was two-pronged:
(a) The Respondent breached the implied terms of contract (see page 29 of the Record); and
(b) The Respondent renounced the contract by its conduct (see page 31 of the Record).

This Court has to determine whether there is evidence of the above in the record.

On implied terms of contract, the Appellant submit that the following constitute a breach of contract:
1. Using hand to manually mix the concrete required for the building rather than utilizing a machine that would produce a homogenous superior mix to make a strong and stable building

which is a clear breach of the implied terms of contract.
2. Exhibits P6 and P9, which were tendered in evidence by the Respondent itself provided cogent evidence of poor workmanship and use of sub-standard materials.

The Appellant further submits that in PW1’s Witness Statement (Page 19 of record), the Respondent categorically admits the use of hand mix to lay the foundation of the building rather than using an automated concrete mixer. What better evidence can there be than admission under oath? Also DW1’s witness statement stated that a concrete mixer should have been used considering the fact that a bank is being built and thus safety was of paramount importance and also stated that the use of hand mix would inevitably have led to a building of poor quality, susceptible to collapse. Under cross-examination, PW1 testified that concrete mixers produce stronger concrete than hand mixing (Page 83 of Record).

Foundation is defined by Business Dictionary as:
“Part of the building or structure that transmits structural loads to the earth and supports the superstructure.”

See also Concise Oxford Dictionary of Current English (7th Ed.)

Continuing his submission, the Appellant’s counsel submits that the foundation is the most important part of the building, if made weak, the building is more likely to collapse. In PW1’s testimony he admitted using hand mix which produced weaker concrete to make concrete for the foundation, as seen in recent times, Nigeria has been plagued with collapsed buildings. In a bid to prevent such from happening, the Appellant went ahead to determine the contract because there were already cracks on the walls due to poor foundation in one of its branches as stated in DW1 Witness Statement. The Appellant also submit that, apart from hand-mix, there were other incidences of poor workmanship and sub-standard materials as stated in DW1’s Witness Statement and Exhibit P6 and P9.

The Appellant argued that being fed up with the Respondent’s sub-standard work, DW1 sent a letter dated June 9, 2008 (Exhibit P7) to the Respondent expressing its displeasure and the Respondent replied via an email (Exhibit P9) in which it admitted that the work was not up to standard and blamed the poor output of the work on

“the quality of wood in the market”. It is the responsibility of a Contractor to source for the right materials to ensure good job is done. Exhibit P6 was authored by an independent invigilator (one Engr. Niyi Oluwole) who visited the side and did assessment of the on-going project and he revealed that the Respondent was not doing what it was supposed to do. Unfortunately, the trial Judge did not place probative value on Exhibit P6 because the Appellant declined calling Engr. Oluwale to explain his notes and also invoked the presumption of withholding evidence against the Appellant for failure to call him as a witness.

The Appellant argument on declining to call Engr. Oluwale is that the note was not so technical that it required explanation. It was written in plain English and the instruction to the Respondent on how to improve its work was quite clear. The presence of the author was not needful. The Respondent is the one that tendered Exhibit P6 and if it feels that Engr. Oluwale is a necessary party, it would have applied that such a person be subpeana. Exhibit P6 was a correspondence between Engr. Oluwale and the Respondent, which is why the

Respondent had it in its possession and was able to tender it into evidence. After the Respondent was released, Brick Integral Limited was contracted to conclude the project, the Court below was wrong to make negative inferences in that regard.

The Appellant also argued that after it has adduced evidence regarding breach of implied terms of contract, the burden of proof has shifted to the Respondent to show that it was not in breach of those terms. PW1 openly admitted the use of hand-mix for the foundation in its Witness Statement on Oath and DW1 gave cogent and compelling evidence regarding poor work in its Witness Statement; the Appellant has done what was required of it to defend the action. The need for calling Engr. Oluwale or Brick Integral Limited has been dispensed with. Citing KOPEK CONSTRUCTION LTD V. EKISOLA (2010) 3 NWLR (PT. 1182) and ZENITH BANK PLC V. EKEREUWEM (2012) 4 NWLR (PT. 1290).

Finally on this point, the Appellant submits that there was no ground for finding against the Appellant simply because it declined to call those witnesses.

On renunciation of contract the Appellant adopts the definition given in Chitty (27th Ed.)

which defines renunciation as
“A renunciation of a contract occurs when one party by words or conduct evinces an intention not to perform, or expressly declares that he is or will be unable to perform, his obligations under the contract in some essential respect…”

It was the Appellant’s contention that the Respondent was obviously in the process of building its Kubwa branch in a manner substantially inconsistent with the Respondent’s obligations (i.e. not of good material/workmanship) to the Appellant and also would clearly not finish the project within the agreed timeframe.

The Appellant’s contention regarding having the right to treat the contract as renounced by the Respondent was based on the following:
1. By using hand-mix for the foundation of the building, it was very much in doubt that the Respondent would erect a structure that would meet the required safety standards.
2. The Respondent poor form of work such as using of substandard piping for mechanical and electrical fittings, inadequate supporting structures etc, from the foregoing, it is obvious that the Respondent was unlikely to

produce the quality of work required.
3. The Appellant drew the attention of the Respondent and requested that it rectify the failings. This was done in Exhibit P6 and P7 etc.
4. Unfortunately, the Respondent continued to make mistakes and it became obvious that it was incapable of, or unwilling to fulfill its obligations in the manner it was required to so do. At that point, would anybody in the Appellant’s position be expected to stand by and watch the train crash or was it prudent to treat the contract as renounced?
5. The Respondent was in delay because of the constant rectifying the faults. Time was of the essence in the building contract and the obvious knock-on effect of the delays was that the project would not be finished within sixteen weeks. Constant mistakes needs constant rectification which will result in delay which means breach of contractual obligation of delivering within a specified period, his principal is definitely within his or her rights to treat the Respondent’s conduct as renunciation.

Unfortunately, the learned trial Judge did not give the above perspective the attention it deserved. In his

Judgment, he stated that the Respondent’s admission in Exhibit P9 that his work was substandard did not “detract from the fact and evidence of PW1 that it had at all times rectified any of such failings in the execution of the contract” and also, such an admission without more was not “tantamount to a renunciation of the contract”. The crucial point was that the rectifying of the mistake resulted in delays and that meant the project was never going to be finished on time.

The Appellant submits that in DW1 Witness statement, the project should have been concluded in June, 2008 but as a result of the delay it will be completed in November, 2008. Generally, time is of most importance in building project as stated in Hudson’s book (supra) thus:
“in the absence of the express provision, a contractor must complete within a reasonable time. The reason for this latter implied term is that, an owner will be forced to stand by helpless until perhaps distant completion date…”.

But the trial Judge in his Judgment stated that delay did not warrant determination of the contract by the Appellant, because

the site was not handed over to the Respondent in good time. The Respondent argued that it was delayed by the Appellant for one week. The Appellant further states that, that should not be an excuse for the Respondent’s poor work system which had to keep getting redesigned and rectified and finally delayed the contract. That if by April, 2008 the Appellant was already complaining about the job, one week delay cannot in any way absolve the Respondent of responsibility. The trial Judge failed to take cognizance of the fact that both the delay and the issue of hand-mix to create the foundation are sufficient to justify for treating the contract as renounced.

The Appellant contended that in Hudson’s textbook, it was stated that:
“no owner can be expected to watch helplessly while defective permanent work is built into his land and covered up, with later reinstatement at reasonable cost or without serious delay progressively less likely”.

The trial Judge found that the Respondent always rectified the faulty work but that was in fact inaccurate because there was no evidence before the Court that the foundation work will be

rectified at any stage, it was a permanent defective work. The Appellant was not expected to wait for more additional defective work before it can treat the contract as renounced? It referred to ADECENTRO (NIG.) LTD V. C. OAU (2005) 15 NWLR (PT. 948) where the Court held that delay and shoddy work are sufficient grounds for treating a contract as renounced. Appellant urged the Court to find for the Appellant.

ISSUE THREE
The Appellant argued that the Respondent pleaded five items as damages in its Statement of Claim. The trial Court dismissed reliefs (a) and (b) on the ground that the Respondent failed to prove the requirement of special damages and the issue cannot be a matter for guesswork or speculation. Also the trial Court dismisses Relief (c) and (d) as being remote and not within the contemplation of the contract between the parties but in relief (e) the Court went on to grant the sum of N5,000,000.00 (Five Million Naira) as general damages for breach of contract. Based on the Judgment of the Court in granting the award, the Court fell back to the same guesswork and speculation that he had earlier condemned in his Judgment.

The Appellant

also argued that in cases of breach of contract, what matters us whether the damages sought flow directly from the breach or not. It has nothing to do with special or general damages. Appellant cited the cases of CHANRAI V. KHAWAM (1965) 1 ANLR 182, SWISS-NIGERIAN WOOD INDUSTRIES LIMITED V. BOGO (1970) 1 ALR 423 and GKFI (NIG.) LIMITED V. NITEL PLC. (2009) 15 NWLR (PT. 1164) SC. If the trial Court had borne it in mind, it would not have awarded N5 Million Naira in damages. The Court declined to grant special damages on solid basis but went on to grant general damages which has no place in this type of breach of contract. General damages are granted when there is no specific measure that can be used to assess what the Claimant suffered in cases such as tort of trauma and anxiety suffered due to an accident. But in breach of contract there is no clear formula that can be utilized. The formula is for the Plaintiff to particularize the damages he or she claims to have suffered and provide cogent forms of evidence in support of his or her claims.

The Appellant contends that what was involved in the present case was staggered payments. Having obtained the first

payment, the Respondent would have earned the second payment upon completion of the project. What the Respondent should have done is to show what it has done to warrant the N30million claim for breach of contract as contained in relief (e) with evidence of high probative value. Unfortunately, the Respondent failed to do so as observed by the learned trial Judge in its Judgment but why should the trial Judge go ahead and award 5 Million damages with no pleading or evidence to back same up? The Respondent having failed to plead and prove the damages claimed, the trial Court ought not to have granted N5million as damages as held in SWISS-NIGERIAN WOOD INDUSTRIES LIMITED V. BOGO (1970) 1 ALR.

The Appellant also contend that the trial Court felt sorry for the Respondent and thought it deserved some compensation, unfortunately the law does not care for or admit sentiment and speculation, referred to AGBAJE V. NATIKNAL MOTOR (1971) 1 UILR. There should not be reference to special or general damages in matter of breach of contracts. What matters is proper pleading and strict proof of damages that flow directly from the breach. The word special damages in law

denotes damages that are proved with receipts, statement of accounts etc items that by their nature, can be proved with certainty, citing GKF INVESTMENT NIGERIA LIMITED V. NITEL (2009) 15 NWLR (PT. 1164) SC. Generally, building markets and transactions definitely produce receipts and other proof of payment. In the instant case, at no point did PW1 state in evidence that the Respondent was unable to produce proof of payment regarding the works it had done because it was not given receipt or had lost them etc. The Respondent’s failure to produce proof receipt is simply an own-goal, cited ALH. OTARU & SONS LTD V. IDRIS (1999) 6 NWLR (PT. 606) SC. Having failed to plead and provide evidence in proof of the works that it had done, the Court below was wrong to grant an award of N5million to the Respondent.

The Appellant further contend that assuming without conceding that the Appellant was wrong to have determined the contract, the learned Judge will be at liberty to grant nominal damages because where a Plaintiff is able to prove that a breach of contract has occurred but fails to prove that he has suffered loss as a result, he will only be entitled

to nominal damages, referred to SWISS-NIGERIAN WOOD INDUSTRIES LIMITED V. BOGO (1970) 1 ALR and BADMUS V. ABEGUNDE (1999) 11 NWLR (PT. 627) SC. The question is what is the quantum of nominal damages that the Plaintiff should be entitled to? It would be a very negligible sum of money as stated in BADMUS V. ABEGUNDE (supra) as nominal damages are not small damages as defined in McGregor (13th Ed.), Jowitt Dictionary of English Law (2nd Ed.)and Black’s Law dictionary (6th Ed.).

Finally, the Appellant submits that on the issue of the interest awarded by the Court below, the Appellant submits it was right to determine the contract for the reasons proffered above and so damages attracting interest should not have been awarded.

THE RESPONDENT’S SUBMISSION
ISSUES ONE AND TWO
The Respondent submits that the trial Court was right to have dismissed the Appellant’s counter claims for want of substantial evidence. It is trite law that in civil cases where a party alleged the existence of facts, he has a burden to prove same with preponderance of evidence. See DRAGETANOS CONST. (NIG) LTD V. F.M.V. LTD (2011) 16 NWLR (PT. 1273) 308.

The Appellant’s case as contained in Page 27-33 of Records is that the contract was terminated by the Appellant because the Respondent was already in breach of the contract on terms which are not expressly stated. This allegation leaves the Appellant with a herculean burden to establish that the Respondent who was actually in breach of the said contract, referred AZUBUIKE & ANOR V. GOVERNMENT OF ENUGU STATE & ANOR (2013) LPELR-20381 (CA). The trial Court rightly dismissed the claims of the Appellant because they are spurious claims. The Appellant failed to establish any breach by the Respondent while the Respondent on the other proved with preponderance of evidence that the terms of the contract which were expressly captured in Exhibit P1 were breached by the Appellant.

The Respondent also submit that the Appellant states that Respondent was in breach of implied terms but both the Appellant and the DW1 are not building engineers so they lack expertise to determine what implied terms of building standard are. The Appellant terminated the contract on the excuse that the Respondent was slow and used hand-mix instead of concrete mix. PW1 in his

evidence explained the circumstances where hand-mix could be used and was properly used, Page 83 of the Records. There is nowhere in the contract that prohibits hand-mix and the Respondent had discretion to any mix which in his best Judgment meets standard of the building in issue and same should not be questioned. PW1 is an engineer and an expert in building construction, he was directly involved in the construction of the subject matter. It is trite law that expert evidence can only be countered by another expert in the same field and not a layman, referred the Court toORUWARI V. OSLER (2013) 5 NWLR (PT. 1348) 535.

The Respondent contends that the Appellant challenged the standard of material used and the quality of work carried out by the Respondent on the basis of implied terms but failed to produce an expert to x-ray the quality of materials that were used by the Respondent. DW1 when asked assert that a test was carried out on the structure built but the result was not placed before the Court because had it being produced, it will be in favour of the Respondent. DW1 who is an electrical engineer failed to show how he became an expert in construction

industry. The trial Court was magnanimous enough to have relied on his evidence, as his evidence was purely an opinion of a layman, relied on OMISORE & ANOR V. AREGBESOLA &7 ORS (2015) LPELR-24803 (SC). The Appellant’s failure to establish breach of any contractual term by the Respondent and calling witness to support the claim leaves the case of the Appellant as an opinion of a non-professional. Also, there is no any form of evidence to establish that the Respondent was under obligation to use any form of mixer and being a professional who knows what was proper to use in the course of the work.

The Respondent also contends that the Appellant’s case was made worse when it appointed an electrical engineer to supervise a building construction and not a building engineer. DW1 informed the Court that it has a site engineer who was never called to testify. The Appellant never called any witness before the trial Court to enable the Court take his evidence serious hence the trial Court was right to disregard the submission of the learned counsel. The Appellant’s counsel tried to adduced evidence in support of his submission but the trial

Court was right to hold that in the absence of bill of quantity and drawing which would have guided it to know if the Respondent was in fact in breach of any term. The Appellant admits it employed a building engineer because DW1 was not a professional building engineer and lacks the requisite expertise to solely monitor work done by the Respondent.

The Respondent further contends that in the absence of any contractual document between the Appellant and the Respondent, the Court was right to have relied on Exhibit P1 which is a letter of award of contract between parties. In Exhibit P1, it was expressly stated that the contract is for the period of 16 weeks and failure to complete with stipulated period, the Respondent will pay weekly the sum of 0.5% of the contract sum, beside this document the Appellant has no other document that explained the nature of the relationship between parties. The trial Court was right to have relied on it as guide to the nature of the relationship between parties. Generally, in interpreting contractual relationship, it is proper that the Court looks at the document which expresses and captures the terms of such a relationship

and no other, citing OGUNDEPO V. OLUMESAN (2011) 18 NWLR (PT. 1278) 54 and UBN PLC V. AJABULE (2011) 18 NWLR (PT. 1278) 152. The Appellant argued that the Court ought to have considered implied building regulations but what is material between parties is the content of Exhibit P1. The Appellant would have assessed the ability of the Respondent to do a professional work before engaging him to such a work. The trial Court’s reliance on Exhibit P1 to construe the relationship between the parties cannot be faulted as it was not expected that implied terms will superintend over the clear and unambiguous terms which both parties agreed on, citing DRAGETANOS CONST. (NIG.) LTD V. FMV. LTD (2011) 16 NWLR (PT. 1273) 308.

The Respondent argued that the Appellant’s argument that the Respondent was in breach of fundamental terms on the basis of content of Exhibit P6 and P9 is misconstrued. The Appellant trust the professional expertise of the Respondent to execute the contract, if the Appellant’s counsel looked at Exhibits P6 and P9, he would have realized that the instruction contained therein do not support his line of argument. Exhibit P6 is an

instruction while Exhibit P9 is more of the Respondent airing out his frustration at the Appellant for its failure to provide him with the required material to do his work. The Appellant is at liberty to call the witness he believed would proof his case and the Respondent had no issue with it. The submission that the building was likely to collapse if the contract between parties was not terminated and given to a third party is an act of drawing the Court sympathy but the Appellant forgot that the contract was terminated at the roofing stage and the new contractor only continued from where the Respondent’s work was abruptly stopped. The Appellant also complained that the foundation was poor because the Respondent used hand mix but never mention that the Respondent’s work was demolished by the new contractor at any stage. Also the Appellant’s witness stated that three tests were conducted on the building but failed to present any report to substantiate his claim that the Respondent’s work was substandard. The law is that where a party fails to call evidence which he has, the implication is that, if such evidence is produced it will speak against

such a party, relied on OLUSANYA V. OSINLEYE (2013) 7 NWLR (PT. 1367) 148.

Furthermore, the Respondent submits that since none of his structure was demolished or reserved by any shred of evidence, it shows that the Appellant purposely terminated the work at that stage to avoid making the second payment which would have been due upon completion of the roofing work.

ISSUE THREE
The Respondent submits that it established his case on the balance of probability to justify the award of damages of N5,000,000.00 and the interest thereon for breach of contract by the trial Court. The use of the term general damages for breach of contract by the trial Judge does not in any way invalidate his decision, relied on the case of IGHRERINIONO V. SCC (NIG.) LTD (2013) 10 NWLR (PT. 1361). The Appellant gave a misconceived and misconstrued argument that the only relief the Court relied on to award the cost of N5,000,000.00 and the interest against was relief E. It is clear from the Judgment of the trial Court that the N5,000,000.00 was awarded as damage for breach of contract by the Appellant and not as general damages for breach of contract as alluded to by the

Appellant. The damages awarded by trial Court is a direct consequence of the breach which resulted from the action of the Appellant, relied on FIRST INLAND BANK V. JEKS (NIG) LTD (2014) 16 NWLR (PT. 1434) 567. The reasoning behind the award of the sum N5,000,000.00 to the Respondent is for the loss and damages suffered by the Respondent is as a result of direct action of the Appellant. The N5,000,000.00 was awarded for breach of contract. The trial Judge made reference to Exhibit P8 and other documents which guided his reasoning and the unchallenged evidence PW1.

The Respondent also submits that it has proved breach of contract with preponderance of evidence and that entitled it to damages, citing M. M. A. INC. V. N.M.A. (2012) 18 NWLR (PT. 1333) 506. The Appellant’s submission that the Respondent failed to itemize the list of the cost of building materials is misconceived. The PW1 while giving his evidence gave uncontradictory and unchallenged evidence of the work carried out; material purchased which same were later used by the new contractor and same was not denied, citing MTN (NIG.) COMM. LTD V. C. C. INV. LTD (2015) 7 NWLR (PT. 1459) 437. The

Respondent also submits that the award of damages of this nature are purely discretionary privilege of a trial Judge and when same is exercised judiciously and judicially such award will not be disturbed as held in AHMED & ORS V. CBN (2012) LPELR-9341 (SC).

Finally, the Respondent submits that the trial Court did not breach any standard set by the Supreme Court in the exercised of its discretion in making the award in issue to warrant interference from this Court. The Respondent urged this Court to so hold.

RESOLUTION
I have considered the Notice of Appeal, Record of Appeal and the submissions of counsels particularly the issues distilled by the parties in their respective Briefs and I am inclined to adopt the issues distilled by the Appellant to enable the Court determine all areas of complaint put forward by the Notice of Appeal. Determination shall be in the order canvassed by the Appellant.

The Appellant argued issues one and two together. The contention canvassed in the two issues revolve around the question of renunciation of the contract by the Respondent and whether the trial Judge ignored the effect of EXHIBIT P to the case of

the Appellant in the absence of bill of quantities. Renunciation as described by the text Chitty on Contract (27th Edition) page 1161 goes thus:
“A renunciation of contract occurs when one party by words or conduct evinces an intention not to perform, or expressly declares that he is or will be unable to perform, his obligations under the contract in some essential respect. An absolute refusal by one party to perform will entitle the other party to treat himself as discharged as will also be clear and unambiguous assertion by one party that he will be unable to perform when the time for performance should arrive. Short of such an express refusal or declaration, however, the test is to ascertain whether the action or actions of the party in default are such as to lead a reasonable person to conclude that he no longer intends to be bound by its provisions. The renunciation is then evidenced in his conduct. Also, the party in default may intend in fact to fulfill (the contact) but may be determined to do so only in a manner substantially inconsistent with his obligations or may refuse to perform the contract unless the other party with certain

conditions not required by its terms.”
The trial Court ruled that the principle of renunciation is not applicable to the facts in this appeal, the facts required were not made out by the Appellant and therefore not available to so find. This aggrieved the Appellant. The Appellant listed some of the actions of the Respondent which are inconsistent with his obligations to perform the contract in terms of the express and implied terms of the contract. The acts listed are:
i. The Respondent’s use of a hand mixer for the foundation which made the building to develop cracks.
ii. Poor formwork (admitted by PW1), substandard piping for mechanical and electrical fittings inadequate to support the structure.
iii. The attention of the Respondent was drawn to these lapses through Exhibit P6 and P7.
iv. That serious errors continued to occur and did not abate, thus confirming that the Respondent was incapable of performing the contract.
v. The Appellant was also of the opinion that there was a delay in the execution of the contract.
The trial Judge found that there was no delay in the execution of the contract because the

Appellant did not make the initial down payment as at required by the contract and could not also set out the boundaries for the land to enable the Respondent commence digging for the building. Another reason advanced by the trial Court was the evidence that errors pointed out were rectified. Other errors were rectified but the major complaint was the use of hand mixers for the concrete used for the foundation and the Appellant highlighted this and it was not remedied. The argument of the trial Judge failed to underscore the importance of a foundation for any structure. A faulty foundation cannot be corrected except if the entire building is pulled down. The complaint and allegation of renunciation does not have to be evinced by direct statement from the Respondent. It can be established by action or the implication of the certain actions. The conclusion arrived at by the trial Judge that renunciation was not established is not supported by the facts, however, it should be the effect of what was established as failures or actions of the Respondent and whether they can justify the determination of the contract, the question should be that of substantiality

because the manifestation of several errors though corrected are signs of incompetence which is covered by the definition of renunciation.

The point made by the Respondent and the Court below that any point not expressly mentioned in the contract agreement cannot be considered is not correct. It is trite that every trade, profession or specialized endeavor, there are salient terms which are implied terms. The trial Judge restricted himself to the contract agreement and decline to acknowledge that in some professions certain terms do not need to be specifically mentioned in the agreement. In implying terms in facts the exercise involved is that of ascertaining the presumed intention of the parties collected from the words of the agreement and the surrounding circumstances. It must have been a term that went without saying, a term necessary to give business efficacy to the contract, a term which though tacit is part of the contract the parties made for themselves. The apex Court in the case of NIGER INSURANCE & CO LTD V ABED BROTHERS LTD & ANOR (1976) LPELR-1995 described implied terms as follows:
“In Sterling Engineering Co. Ltd. v. Pratchett

(1955) AC 534 at 547, Lord Reid stated the legal connotation of the phrase “implied term” in these words: “Strictly speaking, I think that an implied term is something which, in the circumstances of a particular case, the law may read into the contract if the parties are silent and it would be reasonable to do so: it is something over and above the ordinary incidents of the particular type of contract. If it were necessary in this case to find an implied term in that sense I should be in some difficulty. But the phrase “implied term” can be used to denote a term inherent in the nature of the contract which the law will imply in every case unless the parties agree to vary or exclude it.”Per BELLO ,J.S.C.
The trial Court narrowed its consideration strictly on the contract agreement, EXHIBIT P1 and ignored any implied term in such contracts. It is trite and not unusual that Courts also take cognizance of implied terms specific to the particular nature of the contract, in this case a building contract. As defined above, the implied terms are inherent in the nature of the contract which the law will imply in such cases unless expressly excluded or varied.

There was no variation and it was not excluded. The Court when invited should take cognizance of such implied terms. The importance of such implied terms is that it helps maintain standards, quality and makes the contract document precise. It helps in eliminating unnecessary clutter from contract agreements. It makes it unnecessary to recite such standard terms that applies to all contracts of a particular nature, that being the standard and practice of such contracts. Some of the implied terms are technical details which are best implied than specified.

The Appellant focused on the use of hand mixer instead of machine mixer particularly for the foundation drawing from the implied terms of building contracts that when building such as the one in issue, a machine mixer should be used instead of hand mixer to give a consistent foundation that can hold the building and the upper floor. The difference between a hand mixer and a machine mixer is obvious, it boils down to consistency in the concrete and impacts on the strength of the foundation. If the consistency is not smooth, then, the foundation will definitely have a fundamental defect and when the

consistency is one that can sustain the kind of structure to be constructed here, then the foundation must be solid to sustain the building. The standard of consistency is technically set and every building contractor should have known details and specifications, it shall also depend on the number of floors, this was made clear by DW1. He also told the Court there were cracks on the walls.

A foundation is described as part of a building or structure that transmits structural loads to the earth and supports the superstructure. In another definition, it says solid ground or base natural, or artificial, nature or artificial, on which building rests. See Business Dictionary and Concise Oxford Dictionary.
The Respondent admitted that they used a hand mixer and the use of uneven consistency of the concrete mix will definitely give rise to a faulty foundation.

The Appellant made heavy whether on the failure to call Engr. Oluwole to explain the notes tendered as EXHIBIT 6 which the trial Court rejected. EXHIBIT 6 reflected what Engr. Oluwole discovered as faulty with the building upon inspection. It was a technical document not tendered by its maker.

before the tribunal can evaluate them. See ACN v. Lamido (2012) 8 NWLR (Pt. 1303) P.56 at 580-581.” Per OGUNBIYI, J. S .C.
The Appellant therefore got it wrong when it submitted that the document is straightforward and self-explanatory, thus not requiring the maker to explain it. The trial Court was right in not placing any value on EXHIBIT 6, failure to call Engr. Oluwole and representative of Brick Integral Limited is fatal to the case of the Appellant whether as Defendant to the claim or as a Counterclaimant. EXHIBIT 6 is unreliable having not satisfied the requirement of credible evidence and therefore, cannot be evaluated. The witness that spoke to the document was not the maker and could not be cross-examined. However, I agree with the Appellant that failure to call the maker of EXHIBIT 6 does not amount withholding evidence, after all the document was tendered and it only failed to have effect for failure to call the maker and not because it was not available before the Court below. The evidence of poor workmanship was admitted by PW1 in the witness box and the standard of proof in a civil matter is on the preponderance of evidence and not beyond

reasonable doubt. The admission of PW1 is enough to be relied upon for a decision.

I agree with the Appellant that the Respondent did not execute the contract as expected, however, it also failed to do a proper supervision to ensure that avoidable lapses were mitigated. Having failed to so, it cannot have a valid claim in counterclaim. The Respondent too having failed to exercise professional competence resulting in visible faults on the building and the failure to use standard parameters in setting the foundation cannot claim that the determination of the contract was wrongful. Issues one and two are partially resolved in favour of the Appellant.

On issue 3 the Appellant dwelt so much on whether the Respondent justified the award of damages. The Court below awarded N5million Naira as damages for breach of a building contract. The award was made in respect of relief (e) of the statement of claim. It says:
“N30 million for breach of contract.”

All the other reliefs were found not proved. The Court below in awarding the said sum held:
“General damages fall into the category of which the court may award even where it

cannot point to any measure by which they assessed except on the opinion and judgment of a reasonable man.”

The principle of damages in breach of contract was described in the case of G.CHITEX INDUSTRIES LTD V OCEANIC BANK INTERNATIONAL (NIG) LTD (2005) LPELR-1293 (SC) thus:
”In cases of breach of contract a plaintiff is only entitled to damages naturally flowing or resulting from the breach. See Swiss Nigerian Wood Industries Ltd. v. Bogo (1971) 1 UILR 337; Agbaje v. National Motors (1971) 1 UILR 119. The measure of damages, in such cases of breach of contract, is in the terms of the loss which is reasonably within the contemplation of the parties at the time of contract. See Jammal Engineering v. Wrought Iron (1970) NCLR 295; Alraine v. Eshiett (1977) 1 SC 89. When considering damages arising from a breach of a contract there is no room for damages which are merely speculative or sentimental unless these are specifically provided for by the express terms of the contract. See P. Z. v. Ogedengbe (1972) 3 SC 98.”
See also the case of P.Z. & COMPANY V OGEDENGBE (1972) LPELR—2894(SC) which held:
“The law with respect to the

measure of damages had not changed ever since the famous dictum of Alderson, B., in Hadley v. Baxendale (1854) 9 Exch. 341 where at p. 354 he observed as follows:- Now we think the proper rule in such a case as the present is this: – Where two parties have made a contract which one of them has broken, the damages in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e. according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it. In the preparation of the claim for, as well as in the consideration of an award in consequence of, a breach of contract, the measure of damages is the loss flowing naturally from the breach and is incurred in direct consequence of the violation. The damages recoverable are the losses reasonably foreseable by the parties and foreseen by them at the time of the contract as inevitably arising if one of them broke faith with the other. In the contemplation of such a loss there can be no

room for claims which are merely speculative or sentimental unless these are specially provided for by the terms of the contract. It is only in this connection that damages can be properly described as “special” in the conception of contractual awards and it must be borne in mind that damages normally recoverable are based on the normal and presumed consequences of the breach complained of (See Koufos v. C. Czarnikow Ltd. (1967) 3 WLR 1491). Thus the terms “general” and “special” damages are normally inapt in the categorisation of damages for the purposes of awards in cases of breach of contract. We have had occasion to point this out before (see Agbaje v. National Motors Ltd. (S.C. 20/68 dated 13th March, 1970) and we must make the point that apart from damages naturally resulting from the breach, no other form of general damages can be contemplated.”
It is trite that a relief seeking damages in breach of contract is not awarded at large, the apex Court in the case of GKFI (NIG) LIMITED V NITEL PLC (2009) 15 NWLR (Pt. 1164) 344 had this to say:
“It must be stressed that in the law of contract, there is no dichotomy between special and general

damages as is the position in tort. The narrow distinction often surmised is one without a difference. In contract, it is damages simpliciter for loss arising from the breach.”
In building contracts the award of damages is strictly guided by work done, work yet undone to complete what the contract covers and the desire to take into account the profit of the employee, this was restated in the case of UKOHA & ORS V OKORONKWO (1972)LPELR-3344(SC) held:
“In such a case the principle of assessment of damages flowing from a breach by an employer in a building contract is stated as follows:- “The measure of damages as a legal problem gives little difficulty in the cases of breaches of contract by the employer. It is obvious that builders work for a profit, and apart from his entitlement to the price, the damage to a builder caused by any breach of contract by the employer will be assessed in the light of its impact upon his profit.” …”In the case of prevention, that is to say, where the employer has wrongfully terminated the contract, or has committed a fundamental breach justifying the builder in treating the contract as at an end, and the

latter accordingly ceases work, the measure of damages will be the loss of profit which he would otherwise have earned. In the more usual case where the work is partly carried out at the time when the contract is repudiated, the builder will normally be entitled to the value of the work done assessed at the contract rates, plus his profit on the remaining work.” See HUDSON’S Building and Engineering Contracts 9th Edition, page 450.” Per SOWEMIMO, J.S.C.
Consequently, there is no award in the specie of general damages in building contracts which is at large and tied to a specific act which was pleaded and proved, it is simple damages and the Claimant must establish the basis for each head of claim in damages, see SWISS-NIGERIAN WOOD INDUSTRIES LIMITED V BOGO (1970) 1 ALR 423 which held that a Plaintiff always has the burden of proving his claim to damages before he can recover them. That the rule is axiomatic that both the fact and the amount of damage alleged must be proved. The Respondent having failed to establish items A- E in the statement of claim, there was no basis or the award of N5million Naira in the name of general damages under item E which

was simple for breach of contract. Breach of contract has different implications which must be proved specifically, this being a building contract. The burden is on the Respondent to plead and prove each head of monetary claim.
I agree with the Appellant that in the award of damages, there is no room for speculation, the Court is required to avoid sentimental and speculative award; every award must be justified by pleading and specifically proved by the Claimant. The Respondent failed in this regard and the Court on a sympathetic manner awarded the sum of N 5million Naira as damages, all without basis. The trial Judge said:
“In sum, having taken the evidence on record, the sum of N5,000,000.00 will be just and reasonable in the circumstance. It appears to me a fair recompense for the unilateral breach of the contract by defendant.”

The award was not founded on any specific item of claim or evidence, it therefore rests on sentiments and this cannot stand. I hereby set aside the award of N5,000,000.00 (Five million Naira ) only made by the Court below.

Consequently, I find for the Appellant under issue three.

Flowing from

the resolution of the issues distilled for determination and adopted by this Honourable Court, the appeal is meritorious and is hereby allowed. The Judgment of the Court below delivered on the 22nd March. 2017 is hereby set aside.

Each party to bear its cost.

PETER OLABISI IGE, J.C.A.: I agree.

MOHAMMAED MUSTAPHA, J.C.A.: I have had the benefit of reading in draft the lead judgment just delivered by my learned brother, Yargata Byenchit Nimpar, JCA.

I agree with the reasoning and adopt the conclusion and orders arrived therein. The appeal is allowed and I abide by the consequential orders made therein.

Appearances:

NSIKAK UDOH Esq., with him, ISIOMA UWANWHEZE Esq. For Appellant(s)

C. UJU-AZARGI Esq. For Respondent(s)