INTEGRATED MERCHANTS LIMITED v. OSUN STATE GOVERNMENT & ANOR
(2011)LCN/4986(CA)
In The Court of Appeal of Nigeria
On Monday, the 12th day of December, 2011
CA/I/280/2008
RATIO
WRITS OF SUMMONS: WHETHER A WRIT OF SUMMONS CAN BE ENDORSED BY A LAW FIRM
Order 5 rule 12 (1) of the High Court (Civil Procedure) Rules of Oyo State Provide thus: “Where a plaintiff sues by a legal practitioner, the writ shall be endorsed with the plaintiff’s address and the legal practitioner’s name or firm and a business address of his within the jurisdiction and also, if the legal practitioner is the agent of another the name or firm and business address of his principal.” As can be seen from Order 5 rule 12(1) of the High Court (Civil Procedure) Rules reproduced above, a writ of summons, the process by which this suit was commenced could be endorsed by a law firm as it was done in this case. PER MOORE A. A. ADUMEIN. J.C.A.
WRIT OF SUMMONS: ESSENCE OF WRIT OF SUMMON; EFFECT OF A DEFECTIVE WRIT OF SUMMONS
In ordinary civil suits, a writ of summons is the foundation or substratum of a law suit where it is required to be commenced by a writ of summons. It is on the writ of summons that all other processes – statement of claim, statement of defence, counter claim, reply, motions, and all interlocutory processes are laid. Where the writ of summons is defective, incurably defective, the foundation of the suit is gone and there is nothing upon which other processes in the suit can stand. However, where the writ of summons is sound, being competent, other processes can be properly laid on it. PER MOORE A. A. ADUMEIN. J.C.A.
RULES OF COURT: WHETHER NON-COMPLIANCE WITH RULES OF COURT CAN BE WAIVED BY AN ADVERSE PARTY
the procedural rules require that the statement of claim be signed by the plaintiff or his legal practitioner – Order 25 rule 4(3) of the High Court (Civil Procedure) Rules of Oyo State. Rules of Procedure, such as the High Court (Civil Procedure) Rules of Oyo State in issue can be waived by an adverse party where there is noncompliance by a party. PER MOORE A. A. ADUMEIN. J.C.A.
OBJECTION TO STATEMENT OF CLAIM: WHETHER OBJECTION TO THE COMPETENCE OF THE APPELLANT’S STATEMENT OF CLAIM OUGHT TO HAVE BEEN RAISED TIMEOUSLY BY THE RESPONDENTS
The objection to the competence of the appellant’s statement of claim ought to have been raised timeously by the respondents and it also not covered by the grounds of appeal. See DAVID V. JOLAYEMI (2011) 1 NWLR (Pt.1258) 320; (2011) 13 WRN 55 at 89. PER MOORE A. A. ADUMEIN. J.C.A.
TECHNICAL JUSTICE; ATTITUDE OF THE COURT TO DO SUBSTANTIAL JUSTICE AND NOT TECHNICAL JUSTICE
The mood and attitude of Courts of law in recent and present times is to avoid deciding cases without processing the merits thereof. In other words, cases should not be disposed of on mere technical grounds – there must be justice in substance and not technical justice. PER MOORE A. A. ADUMEIN. J.C.A.
JUSTICES
KUDIRAT MOTONMORI OLATOKUNBO KEKERE-EKUN Justice of The Court of Appeal of Nigeria
CHINWE EUGENIA IYIZOBA Justice of The Court of Appeal of Nigeria
MOORE A. A. ADUMEIN Justice of The Court of Appeal of Nigeria
Between
INTEGRATED MERCHANTS LIMITED Appellant(s)
AND
1. OSUN STATE GOVERNMENT
2. ATTORNEY GENERAL OF OSUN STATE Respondent(s)
MOORE A. A. ADUMEIN. J.C.A. (Delivering the Leading Judgment): The appellant was the plaintiff while the respondents were the defendants in Suit No: HOS/76/2002 which was heard and determined by the High Court of Osun State, Osogbo Judicial Division, holding at Osogbo presided over by Abdulkareem, J. The parties filed and exchanged pleadings; the matter proceeded to trial; the appellant called one witness who was cross-examined by the respondents’ counsel; the respondents rested their case on that of the appellant; counsel for the both parties addressed the trial court and judgment was delivered on the 12th day of December,2006. The appellant’s claim was dismissed. The appellant was dissatisfied with judgment of the trial court and filed a notice of appeal containing 4 (four) grounds (pages 72 to 74 of the record of appeal). The grounds of appeal, shorn of their particulars, are reproduced herein:
1. The Honourable Judge erred in law and fact when he held that the insurance Performance Bound (sic) Exhibit “F” was not a fulfillment of the condition precedent to the release of 60% materials advance when the same has been incorporated into the agreement dated 23rd December, 1998 between the parties.
2. The learned trial Judge erred in law and fact when he held the Respondents were entitled to treat the Agreement between the 1st respondent and the Appellant for the supply installation and commissioning of a comprehensive Television Studio Equipment for the Osun State Broadcasting Corporation Services dated 23rd August, 1998 as having been terminated on the ground of inordinate delay by the Appellant and thereby came to the wrong conclusion
3. The trial court erred in law when it went beyond interpreting and giving effect to Exhibit “E” but proceeded to consider extraneous matters to nullify Exhibit “E” thus defeating the intention of parties.
4. The decision of the trial court is against the weight of evidence.
The appellant’s statement of claim of 26 (twenty-six) paragraph spans pages 3 to 6 of the record of appeal. The respondents filed a statement of defence of 11 paragraphs (pages 8 and 9 of the record). The appellant’s reply to the respondents’ statement of defence covers pages 10 to 12 of the record of appeal. It is important to point out here that both the statement of claim and the reply to the statement of defence, filed by the appellant in the court below, were signed on its behalf by “TUNDE OLASHORE & CO” (see pages 6 and 12 of the record of appeal). The parties were, therefore, invited to address the Court on the competence of the appellant’s statement of claim and reply to statement of defence.
Mr. Babatunde Aiku (SAN), learned counsel for the appellant, at the hearing of the appeal argued that the appellant’s statement of claim signed by “TUNDE OLASHORE & CO” complied with the High Court (Civil Procedure) Rules of Oyo State applicable when the suit was filed in 2002 as the legal practitioner stated the name of the law firm and supplied the address in compliance with Order 5 rule 12(1). On this point, the learned Senior Counsel referred to and relied on the case of DAVID V. JOLAYEMI (2011) 1 NWLR (Pt.1258) 320 at 356.
The appellant referred to the notice of appeal signed by “OLATUNDE OLASHORE ESQ” and submitted that it is the notice of appeal that gives the court the jurisdiction to entertain this appeal PEAK MERCHANT BANK LTD. V. NIGERIAN DEPOSIT INSURANCE CORPORATION (2011) 12 NWLR (1261) 253 at 262. The appellant contended that the judgment of the lower court is a valid judgment and that the respondents did not file a cross appeal or a respondent’s notice urging the Court to affirm the judgment on the ground that the statement of claim was not signed by counsel. On this point, the appellant referred the Court to the case of AROWOLO V. ADESINA (2011) 2 NWLR (pt.1231) 315 329 – 330.
It was further submitted by the appellant that this Court could raise an issue suo motu but such an issue must be a live issue. The case of OKONJI & ORS. V. NJOKANMA & ORS. (1999) 14. NWLR (pt.638) 250 at 266 was cited and relied on. The appellant argued that the issue raised suo motu by the court is not a live issue in the appeal – OGUNDELE V. AGIRI (2009) 18 NWLR (Pt.1143) 219 at 246.
The appellant finally urged the Court to proceed with the merit of the case in the interest of the litigants as the Supreme Court did in Ogundele’s case.
In reply, Mr. Biodun Badiora (PSC, Osun State), learned counsel for the respondents, argued that the statement of claim signed by “TUNDE OLASHORE & CO” offended the provisions of sections 2(1) and 24 of the Legal Practitioners’ Act, Cap. 2007 Laws of the Federation of Nigeria, 1990. Relying on the cases of OKETADE V. ADEWUNMI & ORS . (2010) 4 SCM 1 at 7 and OKAFOR & ORS. V. NWEKE & ORS. (2007) 5 SCM 180 at 187 the respondents contended that a process signed by a law firm remains incompetent. The respondents argued that Order 5 rule 12 (1) of the High Court (Civil Procedure) Rules of Oyo State relied upon by the appellant was inapplicable because the said rule referred to writ of summons and not statement of claim, as in this case.
The learned counsel for the respondents referred to Order 4 rule 4 of the Rules of this Court and submitted that the Court is not limited to the notice of appeal and that the Court rightly raised the issue suo motu.
Order 5 rule 12 (1) of the High Court (Civil Procedure) Rules of Oyo State Provide thus:
“Where a plaintiff sues by a legal practitioner, the writ shall be endorsed with the plaintiff’s address and the legal practitioner’s name or firm and a business address of his within the jurisdiction and also, if the legal practitioner is the agent of another the name or firm and business address of his principal.”
As can be seen from Order 5 rule 12(1) of the High Court (Civil Procedure) Rules reproduced above, a writ of summons, the process by which this suit was commenced could be endorsed by a law firm as it was done in this case.
In ordinary civil suits, a writ of summons is the foundation or substratum of a law suit where it is required to be commenced by a writ of summons. It is on the writ of summons that all other processes – statement of claim, statement of defence, counter claim, reply, motions, and all interlocutory processes are laid. Where the writ of summons is defective, incurably defective, the foundation of the suit is gone and there is nothing upon which other processes in the suit can stand. However, where the writ of summons is sound, being competent, other processes can be properly laid on it.In the instant case, the writ of summons is competent, and there has been no argument about this. The respondents argued that Order 5 rule 12 (1) of the High Court (Civil Procedure) Rules of Oyo State relied upon by the appellant was inapplicable to this case. I agree with the respondents. However, I am of the view that this appeal ought to be heard on its merit because a comparison of the signatures on the writ of summons and the appellant’s notice of appeal clearly shows that they are the same. The striking similarities are such that one does not need to be a hand writing expert to easily form the correct opinion that the signatures are the same; that is that the notice of appeal and the statement of claim were signed by one person. While in the statement of claim, the name of the person was not specified, in the notice of appeal the name was fully specified as “OLATUNDE OLASHORE ESQ” who qualifies as a legal practitioner under the Legal Practitioners’ Act relied upon by the respondents. In any case, the statement of claim in issue is not an originating process. However, the procedural rules require that the statement of claim be signed by the plaintiff or his legal practitioner – Order 25 rule 4(3) of the High Court (Civil Procedure) Rules of Oyo State. Rules of Procedure, such as the High Court (Civil Procedure) Rules of Oyo State in issue can be waived by an adverse party where there is noncompliance by a party. In the instant case, the respondents proceeded with the case by filing a statement of defence, participating fully at the lower court and in this court without raising the slightest objection to the competence of the appellant’s statement of claim. The respondents can be taken to have waived their right to complain about the competence of the statement of claim in issue. The objection to the competence of the appellant’s statement of claim ought to have been raised timeously by the respondents and it also not covered by the grounds of appeal. See DAVID V. JOLAYEMI (2011) 1 NWLR (Pt.1258) 320; (2011) 13 WRN 55 at 89.
The mood and attitude of Courts of law in recent and present times is to avoid deciding cases without processing the merits thereof. In other words, cases should not be disposed of on mere technical grounds – there must be justice in substance and not technical justice.I am inclined to agreeing with Mr. Aiku (SAN), learned counsel for the appellant, that the issue raised suo motu by this court is not live a issue and it is not an issue that will enable the Court to do substantial justice to the parties. I hold, therefore, that this appeal is competent and I will proceed to determine whether or not it has merit.
In accordance with the Rules of this Court, the parties filed and exchanged briefs of argument. At the hearing of the appeal the learned counsel for the appellant adopted and relied on the appellant’s brief and urged the court to allow the appeal and award the sum of 50,000.00 pounds to the appellant.
On their part, the respondents urged the court to dismiss the appeal and uphold the judgment of the lower court.
In his brief of argument, Babatunde A. Aiku, Esq. (as he then was, now SAN), learned counsel for the appellant distilled the following lone issue for determination, namely:
“Whether on the available materials and the state of the law, the trial court was right in refusing both the plaintiff’s main claim for specific performance and the alternative claim for special damages in the particular circumstances of this case”
On the other side, Biodun Badiora, Esq. (Principal State Counsel, Osun State) framed the following two issues for determination, namely:
“i. whether the Insurance Performance Bond (Exhibit ‘F’) was a fulfillment of the condition precedent to the release of 60% materials advance of the contract sum as provided for in the agreement dated 23’d December, 1998. (Grounds 1 and 3)
ii Whether the contract between the appellant and 1st respondent has lapsed by effluxion of time.
(Grounds 2)
In his argument, Mr. Aiku, learned counsel for the appellant referred to the views of the learned trial judge from pages 66-68 of the record appeal where the lower court, among other things, stated that “the inordinate delay by the plaintiff in fulfilling it’s (sic) own side of the contract was such as may be regarded as evidence of abandonment of the agreement between it and the 1st defendant”. Counsel for the appellant contended that “in so far as the performance bond (exhibit F) predates exhibits ‘C” and ‘D’, it is clear that performance of the contract was of the essence to the appellant and not evidence of abandonment of the agreement as held by the trial court. Learned counsel referred to meaning of abandonment as stated in the case of ADECENTO (NIGERIA) LIMITED v. COUNCIL OF OBAFEMI AWOLOWO UNIVERSITY (2005) 15 NWLR (Pt.948) 290 at 312, where the Supreme Court, said:
“Abandonment denotes animus non furandi i.e. no intention of going back.”
The appellant contended that the trial court raised the issue of the date of exhibit ‘F’ suo motu without giving the parties an opportunity to address on it. Counsel argued that the case of the respondents was not failure to fulfill a condition precedent and that the agreement dated 23 December, 1998 (exhibit ‘E’) incorporated the performance bond (exhibit ‘F’). He referred the court to the case of COMPTOIR COMMERCIAL & IND. S.P.R. LIMITED V. OGUN STATE WATER CORPORATION & ANOR. (2002) 1 NWLR (Pt.773) 629 at 659.
It was argued on behalf of the appellant that the failure to deliver the equipment was because the respondent did not “release the 60% materials advance when due and payable in breach of clause 3 (i) of exhibit ‘F’ “. On the meaning of “advance”, learned counsel referred to the case of SUMMIT FINANCE COMPANY LIMITED V. IRON BABA & SONS LIMITED (2003) 17 NWLR (Pt. 848) 89 at 123, per SALAMI, JCA (as he then was, now PCA).
The appellant contended that it was wrong for the learned trial judge to have expunged exhibit ‘O’ – a document admitted without any objection from the respondents’ counsel. On this point the cases of TANGALE TRADITIONAL COUNCIL V. ALHAJI ALHASSAN MOHAMMED FAWU (2001) 17 NWLR (Pt.742) 273 at 336; SUMMIT FINANCE COMPANY LIMITED V. IRON BABA & SONS LIMITED (2003) 17 NWLR (pt.848) 89 at 119 and SHYLLON & ANOR. V. UNIVERSITY OF IBADAN (2007) 1 NWLR (Pt.1014) 1 at 16, were cited and relied upon.
The appellant argued that although the learned trial judge correctly stated the position of the law on specific performance and damages, as laid down in the cases of UBN LTD. V. PENNY MART (1992) 5 NWLR (Pt.240) 255; IHEANACHO V. EJIOGU (1995) 4 NWLR (Pt.3891 324 and P.Z. & CO. LTD. V. OGENDEGBE (1972) 1 ALL NLR (Pt.1) 200 at 205, the court “failed to correctly apply principles of law settled in those cases. The appellant referred the court to the case of INTERNATIONAL ILE (NIGERIA) LIMITED V. DR. ADEMOLA O. ADEREMI & 5 ORS. (1999) 8 NWLR (Pt.614) 268 at 303 and argued that the court rightly stated the position of the law in respect of the alternative claim of 50,000.00 (fifty thousand pounds sterling) but failed to award this sum to the appellant. Learned counsel further referred the court to the case of OKONGWU V. NNPC (1989) 4 NWLR (Pt.115) 296 at 309.
The appellant contented that “when a defendant relies on the evidence adduced by the plaintiff without adducing evidence, such a party has nothing to offer and must be bound by the evidence adduced by the plaintiff’. The case of ALECHENU V. OSHOKE (2002) 9 NWLR (pt.773) 521 at 538.
The appellant finally argued that the principle of restitutio in integrum as alternative remedy applies to this case. In his response, Biodun Badiora, Esq. learned counsel for the respondents, referred to the judgment of the lower court where it was held that the Insurance Performance Bond (exhibit ‘F’) was not a fulfillment of the condition precedent for the release of 60% materials advance of the contract sum (pages 67 – 68 of the record of appeal).
Learned counsel for the Respondents argued that where terms of an agreement have been reduced into writing, effect must be given to the words in the written document. He referred, on this point, to the cases of ADETOUN OLADEJI (NIG.) LTD V. NIG. BREWERTES PLC (2007) 2 SCM 103 @ 115; ARJAY & ORS. VS. AIRLINE MANAGEMENT SUPPORT LTD. (2003) 5 SCM 17 @ 55 56 and UNION BANK OF NIGERIA LTD. V. B.U. UMEH & SONS LTD. (1996) l NWLR (PT.426) 656 @ 601.
Counsel argued that assuming that the contract agreement (exhibit ‘E’) had been varied via exhibit ‘C’ and ‘D’ as found by the trial court, exhibit ‘F’ would still not be a fulfillment of the condition precedent to the release of the 60% advance. The respondents argued that the appellant “never obtained any Insurance Performance Bond after Exhibit D” to “back up the payment of 60% materials advance” because exhibit ‘F’ merely assured the performance of the contract. Mr. Badiora argued that “where a condition precedent is included in a contract in respect of a particular term to take effect the condition precedent must be performed before the effect will flow.” He referred to and relied on the case of TSOKWA OIL MARKETING LTD. VS. BANK OF NORTH LTD. (2002) 1 SCM 159 @ 180 – 181. He argued that exhibit ‘F’ was “clearly outside the agreed change in exhibits C & D to back up the payment of 60% materials advance.” He urged the court to resolve the first issue formulated by him in favour of the respondents.
On the second issue for determination, Mr. Badiora contended that since time was of essence to the contract under dispute, the respondents could not “be held to such contract” as the appellant did not perform within the time frame stipulated for performance. On this point, learned counsel for the respondents referred the court to the cases of MAZIN ENGINEERING LTD. V. TOWER ALUMINIUM (1993) 2 NWLR (pt.295) 526 @ 536 and KANU SONS & CO. LTD VS. FIRST BANK PLC (2006) 7 SCM 115 @ 128, per OGUNTADE, JSC. Learned counsel for the respondents referred to paragraph 2 (v) of exhibit B – the letter of award of contract and clause 3 (v) of Exhibit E – the contract agreement where it was specified that “completion period is 4 months from the date of siging (sic signing) the contract agreement.”
The respondents argued that the appellant would be entitled to his claim for damages only if it had succeeded in establishing that the respondents caused the breach of the Contract. On this point, learned counsel for the respondents referred the court to the case of TSOKWA OIL MARKETING LTD. VS. BANK OF NORTH LTD. (Supra) at 189.
FACTS OF THE CASE
The facts of this case can be summarized thus:
1. By a letter dated 15th December, 1998 the appellant was awarded a contract by the 1st respondent for the supply, installation and commissioning of a “Comprehensive Television Studio” at a total sum of N106,000,000.00 (one hundred and six million naira). The said letter was admitted in evidence as exhibit B.
2. By exhibit B the appellant was entitled to receive “60% materials advance with a bank guarantee from a reputable bank” and the contract was to be completed within 4 months.
3. However, the appellant applied for waiver of the requirement of bank guarantee and instead offered to provide “a Performance Guarantee Bond” and the 1st respondent granted the appellant’s request and accepted a performance guarantee bond issued by Perpetual Assurance Company Limited – a copy of the said bond was admitted as exhibit F.
4. A formal agreement between the parties dated the 23rd of December, 1998 was signed and the agreement was admitted in evidence by the lower court as exhibit “E”.
5. Sometime in February, 1999 the chief executive of the appellant travelled to the United Kingdom to purchase the television equipments and he made a deposit of 50,000.00 (fifty thousand) United Kingdom pound sterling as part payment of the purchase price of the television equipments.
6. Notwithstanding several letters from the appellant to the 1st respondent demanding the 60% materials advance, the 1st respondent refused or failed to make any payment. There were correspondences between the appellant and the 1st respondent on the said contract upto July, 2001 when the appellant still agreed to execute the contract at the initially agreed sum of N106,000,000.00
7. The 1st respondent however terminated the contract on or about the 16th day of July, 2001 vide a letter dated 16 July, 2001 addressed to the General Manager, Osun State Broadcasting Corporation and which letter was attached to a letter dated 17th July, 2001 addressed to the appellant – admitted in the lower court as exhibit O.
8. The appellant was aggrieved and this suit was filed in the lower court whereby the appellant (as plaintiff) sought the following relief:
“An Order of Specific Performance by the defendants of the contract dated 23rd December, 1998 between the 1st defendant and the plaintiff of the supply, installation and commissioning of a Comprehensive Studio for the use of Osun State Broadcasting Corporation (Television Service) at Television Village, Oke-Bale, Osogbo, Osun State of Nigeria.
OR
In the alternative general and special damages as stated in the particulars hereunder from the defendants for the breach of the said contract dated 23rd December, 1998 between the Osun State Government and the plaintiff.
Particulars of damages:-
(i) Specific Damages:-
(a) Interest paid on guarantee obtained from the Bank in respect of the performance of the contract by the plaintiff at the rate of N381 ,600.00 (three hundred and eighty-one thousand and six hundred Naira) per month from 1st July, 2001 until the Guarantee expires.
(b) Sum of 50,000.00 (Fifty thousand pounds sterling) paid as deposit on the purchase of the Studio Equipment now in London, United Kingdom.
(ii) General Damaqes:-
N50,000,000.00 (Fifty million naira only).”
The evidence in this case is mostly documentary. The appellant tendered exhibits ‘A’ to ‘U’ in support of its case.
By exhibit ‘B’ dated 1sth December, 1998, the appellant was awarded a “contract for the supply, installation and commissioning of comprehensive television studio for the use of Osun State Broadcasting Corporation (Television Services)……at a total sum of One Hundred and Six Million Naira (N106,000,000.00).” One of “the terms and conditions for the award” as set out in exhibit ‘B’ is “60% materials advance with a bank guarantee from a reputable bank” The appellant, upon receipt of exhibit ‘B’ wrote a letter dated “17th December 1998” wherein the appellant requested for a variation of the terms of the contract. In particular, the Appellant appealed to give to the respondent “a Performance Bond or Guarantee from a reputable financial institution e.g. Insurance Companies” instead of a bank guarantee. In her response, the 1st respondent by a letter dated 29th January, 1999 admitted as exhibit ‘D’ in the lower court accepted the request for variation but stated that “the Performance Bond must be obtained from one of the Insurance Companies approved by the State Government.”
A contract agreement, curiously made on the 23rd day of December, 1998 was consequently signed by the 1st respondent and the appellant and in it the terms of the contract were clearly set out. The contract agreement was admitted in the lower court as exhibit ‘E’. The appellant and the 1st respondent described themselves as “the Purchaser” and “the Supplier” respectively in exhibit ‘E’. In paragraph 3(i) of exhibit ‘E’ the parties agreed as follows:
“Payment shall be made to the supplier in the following manner:
(i) 60% materials advance with a Bank Guarantee from a reputable Bank.” (Underlining mine)
It must be pointed out very clearly that the parties further agreed in paragraph 21 of exhibit ‘E’ as follows:
“The following documents shall form part of this agreement:
(i) The Letter of Award No.SP/S.96/4/1/Vol.II/98 dated December, 1998;
(ii) The Performance Bond No.PB/032/98/HO issued by Perpetual Assurance Company Limited;
(iii) Letter of Acceptance.”
The Performance Bond No.PB/032/98/HO issued by Perpetual Assurance Company Limited on the 16th day of December, 1998 was admitted by the trial court as exhibit ‘F’.
Mr. Badiora, learned counsel for the respondents argued that the appellant “failed to obtain and present an Insurance Performance Bond apart from Exhibit ‘F’ and therefore the appellant should not expect “payment of the 600/o materials advance” as stated in the agreement exhibit ‘E’. I find myself unable to agree with the learned counsel for the respondents. The Insurance Performance Bond, exhibit ‘F’, having been expressly incorporated into the contract agreement – exhibit ‘E’ by the parties, forms part of the agreement between them. It would amount to a mere surplusage for the appellant to produce or present another Insurance Performance Bond. In exhibit ‘F’ the Performance Bond issued by Perpetual Assurance Company Limited, specific reference was made to the award by the 1st respondent of the contract in issue to the appellant and the Insurance Company “firmly bound” itself unto the 1st respondent “in the sum of N106,000,000.00 (One Hundred and Six Million Naira only).” The Performance Bond was “valid until the close of business on 15th day of June, 1999.” There is no evidence that Perpetual Assurance Company Limited is not “one of the Insurance Companies approved by the State Government” as required by the 1st respondent in her letter of 29th January, 1999. In the absence of such evidence, the presumption is that Perpetual Assurance Company Limited is one of the Insurance Companies approved by the 1st respondent.
When exhibits ‘B’, ‘C’, ‘D’, ‘E’ and ‘F’ are read together, it is clear that, notwithstanding the rather untidy manner the contract was drafted the parties agreed that the appellant should produce “an Insurance Performance Bond instead of a Bank Guarantee to back up the payment of 60% materials advance” (paragraph 1 of exhibit ‘D’). The appellant, accordingly produced the Insurance Performance Bond – exhibit ‘F’ and the 1st respondent was satisfied and it was duly incorporated by the parties into their contract agreement exhibit ‘E’. Therefore, the appellant ably satisfied the pre-condition for the payment of “60% materials advance”. It is not correct that the appellant failed to fulfill its own part of the contract. The appellant, contrary to the contention of the respondents, fulfilled its own obligation – production of a Performance Bond right from the inception of the contract agreement.
The respondents, having expressly agreed with the appellant that the appellant could produce an insurance performance bond instead of a bank guarantee are bound by that agreement and could not unilaterally resile from it.
In the present case, the learned counsel for the respondents helpfully referred the court to the case of ADETOUN OLADEJI (NIG.) LTD VS. NIGERIAN BREWERIES PLC (2007) 2 SCM 103 @ 115 where the Supreme Court held inter alia, that.
“Where there is a contract regulating any arrangement between the parties the main duty of the court is to interpret that contract to give effect to the wishes of the parties as expressed in the contract document” (underlining mine).
One of the wishes of the parties, as expressed in the contract agreement and other documents incorporated thereto, is that the appellant could produce an insurance performance bond instead of a bank guarantee to “back up the payment of 60% materials advance.” This is the clear intention of the parties as can be gleaned from exhibits ‘B’, ‘C’, ‘D’ and ‘E’. This is so because where series of documents constitute the contract between parties any document incorporated into the main contract paper or agreement should be interpreted or construed as forming an integral part of the main contract document. See the case of COMPTOIR COMMERCIAL & IND. S.P.R. LIMITED VS. OGUN STATE WATER CORPORATION & ANOR (2002) 9 NWLR (Pt.773) 629 @ 656, where the Supreme Court, per AYOOLA, JSC, held thus:
“When a contract is reduced to the form of document into which has been incorporated other documents, the documents incorporated cease to be extrinsic to the main document, but fall to be construed as part of it.”
It is clear from the facts of this case, that the parties mutually agreed that the insurance performance bond was a sufficient guarantee for the payment of the 600/o materials advance to the Appellant and for this reason, the Performance Bond (exhibit ‘F’) was incorporated into the contract agreement. As stated earlier, the appellant promptly and eminently fulfilled the condition precedent for the release by the respondents of the 60% materials advance. From the documentary evidence before the learned trial judge, the following finding by His Lordship cannot be supported:
“….the inordinate delay by the Plaintiff in fulfilling its own side of the contract was such as may be regarded as evidence of abandonment of the agreement between it and the 1st Defendant.” I agree with the appellant, that the appellant never manifested any intention to abandon the agreement in issue. If there had been any delay, it was occasioned by the 1st respondent which knew that time was of the essence but bluntly ignored, failed or refused to release the 60% materials advance notwithstanding that the appellant had fulfilled the condition precedent to the payment. I am shocked that the learned trial judge never adverted his mind to the copious documentary evidence showing the spirited efforts on the part of the appellant to get the 60% materials advance payment from the 1st respondent to enable it to execute the contract. When it became very obvious that the 1st respondent was failing in its obligation, the appellant made several demands for payment and there was no evidence that the 1st respondent responded positively. See the letters exhibits ‘G’, ‘H’, ‘I’ and ‘J’ written by the appellant to the 1st respondent, demanding the 60% payment advance.
It was not until April 10, 2000 that Osun State Broadcasting Corporation, which executed the contract agreement “for and on behalf” of the 1st respondent, as mandated in paragraph 3 of exhibit ‘B’, wrote in exhibit C to the appellant as follows:
“As you are aware, the Budget for Year 2000 has been approved. We want to begin to process the release of funds for the 60% advance payment on the contract for the TV studios. To enable us start the process immediately, I want your confirmation of the following:
(a) that the contract price still remains at N106 million, In paragraph 5 of your letter of 31st June, 1999, you said, “we do not intend to ask for variation provided the Osun State Government fulfill their contractual obligation”. In an earlier letter of 12th May, 1999, you said in paragraph 4 that if payment is not made by 28th May, 1999, there will be a variation of 20% that will bring the contract sum to N123 million. We want to know your firm and definite position now;
(b) that the completion period is still four months;
In case the contract price is confirmed by you as N106 million, please arrange urgently for a fresh performance bond since the last one was valid until 15 June 1999.
We look forward to your urgent reply.
Thank you for your co-operation.
Sincerely,
(Signed)
Yemi Farunbi,
(CHAIRMAN)”
By the foregoing letter, it was represented to the appellant that the contract was still subsisting. The Appellant responded by confirming in exhibit ‘M’ appellant’s letter dated 14th April 2000 that it was ready to execute the contract at the agreed sum of N106,000,000.00. In the fifth paragraph of exhibit M, the appellant stated thus:
“We also confirm the completion period of 4 months from the date of payment of 60% material advance to us.”
The learned counsel for the respondents was therefore wrong in arguing that “the contract between appellant and the 1st respondent lapsed by efluxion of time”. Under the circumstances of this case, the contract in issue was wrongly terminated by the respondents.
The appellant seems to have abandoned its claim for specific performance or general damages of N50,000,000.00 because at the hearing of this appeal its learned senior counsel urged the Court “to allow the appeal and award the sum of 50,000.00 (pounds) to the appellant in the circumstances”. This is the second leg of the appellant’s alternative relief. In its judgment, the lower court held, at pages 70-71 of the record of appeal thus:
“Regarding the 50,000.00 (fifty thousand pounds sterling) the plaintiff paid as deposit for the purchase of the Television Studio Equipment. In the unlikely event that my judgment in respect of the main claim is reversed on appeal on the ground that the contract was terminated by the 1st defendant’s default in making the advance payment when it was due and payable; then the remedy of the plaintiff being the innocent party is not to insist that the contract still subsists but it should be compensated. In this connection, there is evidence that the 1st defendant entered into an agreement with the plaintiff to supply, install, and commission certain Television Studio Equipment. There is also evidence unchallenged and uncontroverted that based on the contract, the plaintiff proceeded to place an order for the supply of the Equipment from the UK, and paid the sum of 50,000.00 (pounds) for it as deposit before the 1st defendant allegedly terminated the contract. Since damages is the sum of money which will put the party who has suffered in the same position as he would have been in if he had not sustained the wrong for which he is getting his compensation or reparation; I am of the opinion that the 50,000.00 (pounds) deposit made by the plaintiff is the only amount that should be awarded to it were the main judgment be reversed on appeal.”
The respondents did not appeal against this finding of the lower court. This means that the respondents agree with the lower court. Since the appellant has limited itself to the sum of 50,000.00 (pounds) I do not find it difficult to grant that request.
In conclusion, therefore, I hold this appeal has merit and it is hereby allowed.
The sum of 50,000.00 (fifty thousand pounds sterling only) being the sum of money paid by the appellant as deposit on the purchase of the studio equipments pursuant to the agreement between the 1st respondent and the appellant for the appellant to supply and install a comprehensive studio for the use of Osun State Broadcasting Service is hereby awarded as specific damages in favour of the appellant against the respondents.
The sum of N100,000.00 (one hundred thousand naira only) is hereby award as costs against the respondents.
KUDIRAT MOTONMORI OLATOKUNBO KEKERE-EKUN, J.C.A.: I have had the privilege of reading in draft the judgment of my learned brother, M.A.A. Adumein, JCA just delivered. His Lordship has meticulously considered and resolved the sole issue for determination in this appeal. I agree entirely with his reasoning and conclusion that the appeal is meritorious and should be allowed. I allow it in the terms stated in the lead judgment and abide by the order for costs.
CHINWE E. IYIZOBA, J.C.A.: I read before now the judgment just delivered by my learned brother, Moore A. A. Adumein JCA. I agree with his reasoning and conclusions. I have nothing more to add as he has dealt exhaustively with all the issues in the appeal. I abide by the consequential orders including the order as to costs.
Appearances
Babatunde A. Aiku, (SAN) with Olusola Sullyman Esq.For Appellant
AND
Biodun Badiora, Esq. (Principal State Counsel, Osun State Ministry of Justice)For Respondent
