KHATOUN ENTERPRISES LIMITED v. UNITED NIGERIA TEXTILES & ANOR
(2014)LCN/7269(CA)
In The Court of Appeal of Nigeria
On Thursday, the 12th day of June, 2014
CA/K/261/2013
RATIO
WHETHER AN UNDENIED FACT IS AN ESTABLISHED FACT
As held in the case of Oshodi v. Eyifunmi (2000) 13 NWLR (Pt.684) 298 at 337, Para B, per Iguh JSC, a denial of a material allegation of fact must not be general or evasive, but specific.
Every allegation of fact, if not denied specifically or by necessary implication shall be taken as established at the hearing. per OLUDOTUN ADEBOLA ADEFOPE OKOJIE, J.C.A.
JUSTICE
ABDU ABOKI Justice of The Court of Appeal of Nigeria
OLUDOTUN ADEBOLA ADEFOPE OKOJIE Justice of The Court of Appeal of Nigeria
AMINA AUDI WAMBAIJ ustice of The Court of Appeal of Nigeria
Between
Text
KHATOUN ENTERPRISES LIMITED Appellant(s)
AND
1. UNITED NIGERIA TEXTILES
2. SUPERTEX LIMITED Respondent(s)
OLUDOTUN ADEBOLA ADEFOPE OKOJIE, J.C.A. (Delivering the Leading Judgment): This is an appeal from the judgment of Kano State High Court presided over by Hon. Justice Dije Abdu Aboki, delivered on the 22nd day of March 2013.
The Appellant, as Plaintiff, by its Writ of Summons, Specially Endorsed, dated 7th July 2008, sued the Respondents (Defendants) jointly and severally for the following:
1. The sum of N89,865,655.20 being the agreed 5% commission/rebates for the Plaintiff purchases from 1999 – 2007 or any part thereof adjudged due (sic).
2. The sum of N3,912,000.00 being the illegal deductions from the Plaintiff’s account as rollers surcharge or any part thereof adjudged due.
3. N90,000,000.00 being general damages for breaches of contract.
The Respondents filed a Joint Statement of Defence and Counterclaimed for the following:
* The sum of N59,391,514.72 being the total outstanding indebtedness to the Defendants for credit sales of textile materials between 04/08/2003 and 04/09/2007.
* The sum of N180,000.00 being outstanding engraving charges on Plaintiff’s designs for September, 2005 and October, 2006.
* N10,000,000.00 damages.
In proof of its claim, the Appellant (plaintiff) called 3 witnesses and tendered several exhibits, while the Respondents (Defendants) called a sole witness and also tendered a number of exhibits.
The case of the Appellants, in summary, per its pleadings and as presented by its witnesses, is that the Appellant is a buyer and distributor of the Respondents’ textiles, the 1st and 2nd Respondents being sister companies. At a meeting called by the Respondents sometime in 1996, it was agreed that the Appellant was to be supplied regularly with textile materials particularly during the peak period, i.e. in the months of October to December and during Sallah and Easter. Also that the Appellant will be given a 5% commission/rebate on sales. It was further agreed that there would be prompt production and supply exclusively of materials, particularly those produced in line with designs made available by the Appellant.
The Appellant accused the Respondents of breach of the agreement, alleging that the 1st Respondent delayed in the supplies, and that supplies made to the Respondent in the peak period were lower than demanded. In addition, that the Appellant was paid only 3% rebate for a period, before its cessation altogether. It also accused the Respondents of supplying the Appellant’s designs to other customers and that the Respondents, in breach of agreement, exported the same. Further, that the Respondents illegally charged the Appellant for rollers used on their designs, by sending a debit note to them.
The Respondents, in their pleadings and evidence of their witness, denied knowledge of any meeting at which the parties agreed to a rebate/commission of 3%. The 3% given to the Appellant, it was alleged, was performance award. They denied breach of any of the terms of the contract and alleged that it was the Appellant that was indebted to them.
Following conclusion of trial and the consideration of final written addresses filed by both Counsels, the trial Judge, in her Judgment, dismissed the claim of the Appellant for breach of contract. She also dismissed the Appellant’s claim of N3,912,000 for illegal deductions from its account. She held the 1st Respondent liable for breach of the verbal agreement to pay 5% discount on sales for the period July 2002 to September 2007. She, proceeded to award 3% discount in the sum N16,076,522.78 (Sixteen Million and Seventy Six Thousand Five Hundred and Twenty Two Naira Seventy-Eight Kobo).
The learned Judge granted the Counterclaim of the Respondents, in part, awarding the sum of N180,000, as engraving charges on the Appellant’s designs. She held the Appellant indebted to the Respondents for credit sales of textile materials, however reducing the amount sought. She refused the claim of the Respondents for general damages.
Dissatisfied with this judgment, the Appellant appealed to this court against the Judgment. The Respondent cross Appealed.
In the main appeal, in the Appellant’s Brief of Arguments, settled by Nelson Uzuegbu and Ifeanyi Ogenyi of Nelson Uzuegbu & Co. the following issues for determination were raised:
1. Whether the Plaintiff/Appellant is not entitled to be awarded 5% Commission as rebate which they claimed and proved instead of only the 3% commission awarded in favour of the Appellant by the trial court.
2. Whether the Appellant/Plaintiff is not entitled to the award of general damages in all the circumstances of this case.
3. Whether the Respondents ore entitled to the various unquantified sums purportedly awarded in their favour by the learned trial judge in respect of Exhibit M65- M90.
4. Whether the learned trial judge was right in awarding the sum of N180,000.00 as outstanding engraving charges on Plaintiff/Appellant’s design from September 2005 and October 2006 in favour of the Respondents.
The Respondents, in their Brief of Argument settled by Suleiman Ahmed Akasawua of P. Subhanallahi Chambers, raised the following as the issues which arise for determination:
1. Whether the Learned trial Judge was right when she refused to award 5% commission/rebate to the Appellant.
2. Whether the Learned trial judge was right when she refused to award general damages to Appellant for breach of contract
3. Whether the Learned trial judge was right when she awarded to the Respondents the various sums in Exhibits M65-M90
4. Whether the Learned trial Judge was right when she sustained Respondents claim for outstanding engraving charges on Appellant designs in the sum of N180,000.00
I shall adopt, as the issues that arise for determination in the main appeal, those raised by the Appellant, with a slight modification to the phraseology of Issue No 3.
The 1st issue for determination is:
Whether the Plaintiff/Appellant is not entitled to be awarded 5% Commission as rebate which they claimed and proved instead of only the 3% Commission awarded in favour of the Appellant by the trial court.
The Appellant has contended that it led credible and unchallenged evidence to prove that the Respondents agreed to pay it 5% trade/rebate commission of its total purchases but that the Respondent paid only a rebate of 3% over a period and stopped altogether. As the trial judge found the Respondents in breach of the agreement to pay 5%, its decision to award 3% discount is thus untenable, Counsel submitted.
The Respondents however contend that they, in their pleadings and evidence, denied that they (Respondents) had a conference with their top dealers in Kano at which the terms of the dealership were spelt out, including 5% commission/rebate on sales to the Appellant. Also, nowhere in the documents tendered was rebate/commission of 5% mentioned. The Lower Court was thus right in refusing this claim.
The Appellant in its Reply Brief countered that the Court did make a specific finding that there was an agreement to pay 5% rebate, which finding has not been appealed against and is therefore conclusive. The finding of the trial Court thus remains sacrosanct. The letters of the Appellant complaining of the Respondents’ failure to pay the said amount was not challenged or controverted and thus needs no further proof.
The Judgment of the trial Court is contained on Pages 606-624 of the Record of Proceedings.
In deciding whether or not there was an agreement to pay 5% rebate/commission, the trial Judge first determined whether or not it could look at Exhibits A1-A21, described in the index of the record of Proceedings and in the judgment of the Court, as credit notes issued by the Respondents to the Appellant.
This is because, as she observed, she had earlier on in the proceedings ruled that these credit notes are in respect of the years 1997-2001, a period she had held the claims to be statute barred.
She noted that, by her earlier Ruling, the claims preceding July 2001 are statute barred. This reason alone, she held, is not sufficient for these exhibits to be discountenanced by the Court in finding whether the Plaintiff (Appellant) is entitled to a 5% rebate for all sales made by the Defendant (Respondent). She further held that an agreement does not have to be in writing to have validity in law and that, having found that Exhibits A1-A21 are evidence that can be looked at, coupled with the fact that an oral agreement has the same validity as a written one, it is incumbent on her to closely examine these exhibits in order to find if they are for payment for performance award, as contended by the Defendants, or for rebate/commission as contended by the plaintiff.
She held, following a consideration of Exhibits A1-A21 that these payments were made to the Plaintiff (Appellant) over a period of time and in the absence of any evidence from the Defendants (Respondents) stating how and why the payments were made, she believed the evidence of the Plaintiff.
The learned Judge also referred to the letters written by the Appellant to the Respondents (Exhibits B1-B5) complaining of the Respondents’ failure to honour the agreement regarding the rebate, which letters, she observed, were admitted without objection from the Respondents and with no attempt by the Respondents to challenge the Appellant on its non receipt. The bare assertion by the Respondents’ witness of lack of knowledge of the letters, she held, were insufficient to prove the Respondents’ lack of receipt of the same.
The court further referred to the failure of the Respondents to cross examine PW1 on the verbal response he got to those letters by the Respondents’ Director, one Mr. Wong, which she held to be an admission. She considered the Respondents’ traverse of the Appellant’s Statement of claim on this issue, in its Statement of Defence, as constituting an insufficient denial of the meeting, which she likened to an admission. She thus held as follows, at Page 613 to 614 of the Record:
“I find that the 1st defendant is in breach of the said verbal agreement to pay 5% discount on sales as rebate to the plaintiff and the plaintiff is entitled to the said payment from the period July 2002 to the last sale transaction in Sept. 2007. Exhibits F1 and F2 which are the ledger kept by the plaintiff in respect of purchases made by them from the defendants covers the period prior to July 2002 and after. Accordingly the PW.3 a former accountant of the plaintiff testified on what 5% and 3% of the total rebate from the sales within the period August 2002 to July 2008 in respect of 1st and 2nd defendants is and gave the sum of N381,293,524.25k as the total value of sales in exhibit F2 and 5% of that figure to be N19,0664,676.21k while 3% is N11,438,797.63k.
He gave the total value of sales in exhibit F1 for the period in question as N154,591,704.91k and gave 5% of the said sum be N7,729,585.25k and 3% is N4,637,751.15k.
The PW.3 also totaled the figures in both exhibits FL and F2 and gave 5% to be N26,794,261.46k while 3% is N16,076,522.78k.
The above calculations done by the PW.3 from the exhibits tendered by the plaintiff exhibits F1 and F2 which PW.3 stated he prepared using the parking list which is usually attached to the invoices supplied along with the goods purchased. The above figures as given by the PW.3 was not challenged on its correctness by the defendants.
Although I have found that the agreement on the rebate as testified by the PW.1 is proved on the balance of probabilities I will award not 5% of the sales value but 3% in line with what the defendants had initially been paying as evidenced by exhibit A1 – A21. Accordingly this head of claim succeeds in part.”
I have no cause to fault the reasoning of the trial Judge. I however hold, that the trial Judge, having held the agreement on the rebate of 5% as having been proved, should have proceeded to award the 5% agreed and not the 3% that the Defendants had been wrongfully paying over the period in dispute.
While I thus uphold the finding of the Court with regard to proof of this claim, I hold the learned trial Judge to be in error to have proceeded to award a lesser percentage than that agreed and held by her as having been proved.
I accordingly hold that the Appellant is entitled to be awarded 5% Commission as rebate instead of the 3% Commission awarded by the trial Court.
On the quantification of 5%, the trial Judge in her judgment above, set out the figures as given by the Appellant’s Accountant, PW3, in his evidence, which evidence she accepted. The total value of the sales for the period August 2002 to July 2008 was stated to be N381,293,524.25 plus N154,591,704.91. The rebate of 5% for the total sales, the witness said, was N26,794,261.46, while that for 3% is the sum of N16,076,522.78K. The trial Judge awarded this latter sum to the Appellant.
It is this sum of N26,794,261.46, being 5% of the total, I hold, that is due to the Appellant.
I thus resolve the 1st issue for determination in favour of the Appellant.
The 2nd issue for determination is as follows:
Whether the Appellant is not entitled to the award of general damages in all the circumstances of this case.
Dividing this issue into three, Appellant’s Counsel submitted, firstly, that its witness, PW1, tendered Exhibits L1 and L2 in support of their claim for wrongful exportation by the Respondents of its designs outside Nigeria, thus breaching the term that goods based on the Appellant’s design, would be supplied exclusively to the Appellant. He stated that PW2, a former staff of the Respondents gave unchallenged evidence that the “Color Way” prints with Nos. 88-89 printed by the Respondents were meant for export and that Exhibits L1 and L2 fell within that range. Counsel alleged there to be an admission by the Respondents’ Counsel in their final written address before the Lower Court, that these prints were meant for export but that these facts were not pleaded. He submitted that the trial Judge was in error in holding that the admission by the Respondents’ Counsel was immaterial because it was not backed by evidence. He submitted that the Appellant had pleaded and proved that the designs given to the Respondents to be exclusively printed for them, were exported by the Respondents in breach of the said agreement.
Secondly, Counsel submitted, contrary to what the trial Judge held, the Appellant’s claim that the Respondents exported their designs outside Nigeria does not amount to a criminal allegation which must be proved beyond reasonable doubt. The standard of proof was thus by preponderance of evidence. In addition, the evidence of the Appellant’s witness on this arrangement was not cross examined upon nor controverted. The conclusion of the trial Judge was therefore erroneous.
Thirdly, that the Appellant had led unchallenged evidence to prove that the Respondents breached the agreement to supply them with more goods at peak seasons. The Judge, having found in favour of the Appellant that there are incidents of delay and shortfall in supply of the goods requested for during peak seasons, erroneously concluded that these are too negligible to constitute a breach of contract upon which damages could be awarded. This pronouncement of the Judge, Counsel complained, was raised and determined suo motu by the judge.
It was Counsel’s further argument that the Respondents breached their agreement to supply Nichemtex and other products to the Appellant and that the trial Judge wrongly held that there was no agreement to supply the Appellant with Nichemtex products. She was therefore wrong not to have held the Respondents liable.
The Respondents’ Counsel submitted, in response, that there is nothing on the face of Exhibits L1 and L2 (invoices) to show that the goods stated therein ever left the shores of Nigeria or that they were never supplied to the Appellant. By the admission of the Appellant that it had a debit balance with the Respondents, the Respondents, as rightly held by the Judge, were in order to have discontinued supply to the Appellant. The refusal of the award of general damages by the trial Judge should thus be upheld.
Furthermore, the law is that it is not proper to award general damages for breach of contract as only special damages can be claimed.
On this issue of whether or not to award general damages, the trial Judge, at Page 616-617 of the Record of Proceedings put the question to be considered thus:
“The claim for damages for breach of contract is founded upon the Plaintiff’s assertion that the Defendants failed to meet their demand during the peak season and that their designs were being sold to other customers of the Defendants including export outside the country. That the agreement to meet the Plaintiffs demand during the peak season was in exchange for the Plaintiff not to buy from other manufacturers which the Plaintiff refrain from doing by keeping his own side of the agreement…(sic)”
Reviewing the evidence and the documents tendered, she upheld the submission of the Respondents’ Counsel that the Respondent had to mitigate its losses for, at the time the Respondents stopped further supplies to the Appellant, the Appellant was indebted to them.
She also found that it was clear from the letters of the Appellant to the Respondents that there was no existing contract in respect of the supply of Nichemtex products between the parties. She acknowledged, from the exhibits, that there were incidents of delay in printing designs and that there were shortfalls in supply of goods requested for. She however held:
“…these incidences are extremely few when compared to the volume of sales between the parties in the years running through the period of the transaction. I am therefore of the view that the few incidences as stated in the evidence of PW1 and the letters written by him to the Defendants are too negligible to constitute a breach of contract upon which damages should be awarded.”
On the matter of export by the Respondents of designs meant solely for the use of the Appellant, she had this to say in her Judgment at Pages 678-679 of the Record:
“On whether the Plaintiff’s designs were sold to other customers of the Defendants and exported outside the country, there is no concrete proof that the plaintiff’s designs were sold to other customers, the evidence of the plaintiff on this is not substantiated. The submission by the defendants counsel that the evidence is not pleaded is unfounded and as rightly submitted by learned counsel to the plaintiff the law does not require evidence to be pleaded but only facts and that paragraph 15 of the statement of claim pleaded in facts relating to the evidence in question. However, the submission by the plaintiff’s counsels that the defendants’ counsel conceded in his final written address that colour way Nos. 99 were meant for export is incorrect. I have not seen where the defendants’ counsel conceded this and even if he did, that will have no relevance unless the concession is borne out of evidence in the case. If a witness concedes to a fact that will be an admission that required no proof but not counsel.
On this issue, the defendant’s counsel submitted in his reply on point of law that the said allegation of exporting designs of the plaintiff by the defendant’ amounts to a crime and that allegations of a crime in a civil action has to be proved beyond reasonable doubt. Generally, allegation of a crime in a civil action must be pleaded and particularized.
While the plaintiff pleaded the said allegation in paragraph 15 of their statement of claim, the said allegation has not be particularized (sic). See the case of Adeile v. Olude (2003) FWLR Pt.157 P.1077 Holding 9. Furthermore the only evidence of this allegation coming from the PW 2 an unhappy former employee of the 1st defendant and exhibit L1 & L2 has fallen short of the standard of proof that is beyond reasonable doubt. I am therefore unable to find that the plaintiff is entitled to damages on this issue.
I do not find any serious breach of contract on the transaction between the parties to warrant the award of damages. This head of claim fails and is also dismissed.”
I look at Exhibits L1 to L12 tendered by the Appellant as proof of export. These exhibits have been set out at Pages 295-298 of the Record of Proceedings. There is nothing in these documents, I hold, to show that these designs were exported. They are merely invoices of the 1st Respondent issued to the Appellant stating the same to be “Indigo Print”, with other specifications.
All there is, as alleged proof, I note, is the ipse dixit of PW2 that he is sure the designs were exported. What the quantity exported is and what the loss is to the Appellant, has not been given. The trial Judge, I therefore hold, was right in her observations that “there is no concrete proof that the Plaintiff’s designs were sold to other customers, the evidence of the Plaintiff is not substantiated”.
I also agree with the learned Judge that, even though the Appellant did plead that the goods were exported, there is no concession by the Respondents’ Counsel in the Final Address before the Lower Court, that the goods were exported.
I, however agree with the submission of the learned Counsel to the Appellant that the trial Judge was in error when she held that the allegation of export of the designs amounts to a crime, particulars of which should be pleaded, and that the burden placed on the Appellant of proving export is beyond reasonable doubt.
This is because, the standard of proof in civil cases is not proof beyond reasonable doubt but on preponderance of evidence and the balance of probabilities. See the case of Wachukwu v. Onwuwanne (2011) 14 NWLR Part 1266 Page 1 at 36-37 paras G – C per Tabai JSC.
This, notwithstanding, I am in agreement with the trial Judge that there is no proof, even by preponderance of evidence, that the designs were exported or that they were sold to persons other than the Appellant. The trial Judge, I accordingly hold, was right in her conclusion that there was no breach proved, to attract the award of damages. The reference to the evidence of PW2 by the trial Judge as that of an “unhappy employee”, as complained by the Appellant’s Counsel, is thus of no moment.
I accordingly resolve the 2nd issue for determination against the Appellant and in favour of the Respondents
The 3rd issue for determination is:
Whether the Respondents are entitled to the various sums in Exhibits M65-M90 without the same having been quantified.
This award is in respect of the 1st relief in the Respondents Counterclaim in which they sought the following:
“The sum of N59,391,514.72 being the total outstanding indebtedness to the Defendants for credit sales of textile materials between 4/8/2003 and 4/9/2007.”
The Appellant in its Brief of Argument filed before this Court, argued this issue under 3 sub heads.
Under the first head, Counsel argued that the learned Judge was wrong in not resolving the contradiction in the different figures against the Respondents.
Under the second head, he argued that the conclusion of the Judge did not arise from the evidence and that the Defence witness did not separate or differentiate between the invoices, M1-M90 when tendered. Also that DW1, after having admitted that some of the invoices had been paid for did not state which had been paid for and which had not.
The trial Judge, he submitted, erred in law in rejecting the unchallenged evidence of PW1 with regard to the loss of the receipts on the ground that the evidence was not credible enough, without stating the reason therefor. Also the issue of separating Exhibits M1-M64 as the supplies paid for and Exhibits M65-M90 as those not paid for, are entirely a case made out by the trial Judge and not presented by the Respondents. It is not the duty of the court, he said, to make out a case for the parties. This led to the trial Judge wrongly placing the burden on the Appellant. Counsel further accused the trial Judge of not properly evaluating the evidence. In addition, that the figures in Exhibit M65-90 were not quantified.
The Respondents’ Counsel in his Brief of Argument submitted that the difference in figures is negligible and the trial Judge right to have considered the discrepancies negligible. Conceding that the learned Judge should have added up the amounts standing to the credit of the Respondents in Exhibits M65-90, since, however, the exhibits were deemed read by the trial Court, the failure to do so did not occasion a miscarriage of justice. The amount when added up is the sum of N22,337,846.80. The Appellant, he said, never denied receipt of these goods.
I note that the Respondents, in proof of their counterclaim, tendered before the trial Court, invoices and receipts of products supplied to the Appellant, which documents were marked Exhibits M1-M90. Also tendered were the Statements of Account opened by them for the Plaintiff and the waybills and debit notes (Exhibits N1 and N2).
The contention of the Appellant before the trial Judge was that there were contradictions with regard to the exact figure owed by the Appellant in respect of these documents. That while the figure in the pleadings is N59,571,514.72, the Defence witness in his evidence gave the figure as N59,383,614.72 and in another breath gave the figure as N59,571,514.72. Counsel had asked the trial Court to discountenance the evidence of DW1 as being at variance with the pleadings.
Counsel to the Appellant also submitted before the trial Judge that the correct figure in Exhibits M1-M90 is N55,409,134.07.
The trial Court had, however found unchallenged the fact that the Respondents supplied textile materials to the Appellant. She found it proved that payment had been effected by the Appellant in respect of Exhibits M1-M64 but that there was no proof of payment in respect of Exhibits M65-M90. She found support for these figures from the evidence of the Appellant’s witness, PW1, that the goods supplied on credit were the ones covered by invoice and that since Exhibits M1-M64 were not covered by invoice but “parking list” and receipts, the same had not been proved to have been paid for. The Appellant, she held, had failed to discharge the onus of proving that these goods had been paid for. She considered the evidence of the Appellant’s witness that they had lost the receipts, not credible enough proof of payment of the supplies in Exhibits M65-M90.
She also held that in spite of the fact that the evidence was unchallenged under cross examination, unchallenged evidence can only be acted upon where it is found to be credible. She held the Respondents entitled to payment for the sums contained in those invoices.
She held the difference in figures quoted by DW1 to be minimal and not significantly changing the nature of the claim. It was not a material contradiction sufficient to constitute a variance with the pleadings.
The Court discountenanced the figure of N55,409,134.07 given by the Appellant’s Counsel in his Final Written Address on the ground that the tabulation was not done during the course of the proceedings, nor elicited from the witness during trial.
I, yet again, find no fault with the reasoning of the learned trial Judge as regard her finding of liability against the Appellant with respect to Exhibits M65-M90.
The Judge systematically went through the evidence of both parties and examined the documents tendered.
The argument as to discrepancies in the total of the figures in Exhibits M1-M90, in any event, is academic as the learned Judge did not award the entirety of Exhibits M1-M90 but the figures in Exhibits M65-M90.
Counsel to the Appellant has complained that the trial Judge did not give the total figure in the said invoices. The trial Judge had concluded on this issue at Page 623 thus:
“Therefore without any proof of payment of the goods supplied to the Plaintiff on credit as evidenced by Exhibits M65-M90 I find that the Defendants are entitled to payment for the sums contained in those invoices. The Defendants’ first head of claim succeeds in part.”
It is indeed true, as conceded by the Respondents’ Counsel that the learned Judge was in error not to have given the total figures in these invoices and awarded the sum total of the figures. Her failure to do so, I however hold, does not occasion a miscarriage of justice, as this court, by Section 15 of the court of Appeal Act 2004, can insert the total figure. I accordingly resolve this issue for determination partly in favour of the Respondents.
The calculation, I find, has been done by the Respondents’ Counsel at Page 10 Para 4.3.14 of the Respondent’s Brief as N22,337,846.80 (Twenty Two Million, Three Hundred and Thirty Seven Thousand, Eight Hundred and Forty Six Naira, Eighty Kobo). This figure has not been challenged by the Appellant in its Reply Brief. I accordingly hold the Respondent entitled to an award of N22,337,846.80 (Twenty Two Million, Three Hundred and Thirty Seven Thousand, Eight Hundred and Forty Six Naira, Eighty Kobo)
The 4th issue for determination in the substantive appeal is:
Whether the learned trial judge was right in awarding the sum of N180,000.00 as outstanding engraving charges on Plaintiff/Appellant’s design for September 2005 and October 2006 in favour of the Respondents.
The Appellant has argued that in its pleadings and the evidence of its witness, PW1, this claim was denied. It insisted that that the rollers for printing can be used several times and can be used for other distributors, not solely for the Appellant. It had protested this debit to the Respondents. It contended that its witness was not challenged on this evidence under cross examination. Having failed to do that, the Defence, through DW1, could not produce receipts in respect of same after the Appellant had closed its case. Furthermore, the receipts relied upon by the learned Judge in awarding this sum, viz Exhibits Q1 and Q2 are a cumulative sum of N90,000.00 and not N180,000 as claimed by the Respondents and erroneously awarded by the trial Court.
The Respondents in their Brief of Argument, submitted that DW1 was not cross examined on Exhibits Q1 and Q2, neither was his evidence discredited. The court is thus bound to accept his evidence as proof of the issue in contest. Counsel conceded that the total sum in Exhibits Q1 and Q2 in support of their claim of N180,000 is N90,000.00. He contended however that it was not mandatory for them to have tendered any documents before the Court can consider the claim proved, since civil cases are proved on the balance of probabilities.
This issue relates to the Counterclaim of the Respondents for the sum of N180,000.00 being the outstanding engraving charges on the Appellant’s designs for September 2005 and October 2005.
In proof of this claim the Respondents tendered Exhibits Q1 and Q2. These exhibits, as contained on Pages 595 and 596 of the Record of Proceedings of the Lower Court are for the sum of N60,000 and N30,000 respectively. The learned Judge in her judgment, contained on Page 623 of the Record of Proceedings, referred to these exhibits as the cost of the engraving charges, holding it established that the Respondents were entitled to these charges. The fact that the designs were not exclusively produced for the Appellant, she held, cannot be sustained in view of the findings of the Court.
I again do not find any fault with the reasoning of the trial Judge. I however agree with the Appellant, and as conceded by the Respondents’ counsel, that the total sum of these vouchers is N90,000.00 and not N180,000.00. I, in consequence, substitute the sum of N90,000.00 in place of the sum of N90,000.00 awarded by the trial Judge, the award not having been given support to by the documents relied upon by her.
With regard to the substantive appeal, I thus resolve issue No. 1 in favour of the Appellant and issue No. 4 partly in its favour. I resolve issues Nos. 2 and 3 against the Appellant.
With regard to the Cross Appeal, the following were the issues raised by the Defendants (Respondents) for the Court’s determination, namely:
1. Whether the Learned trial judge was right to hold that Exhibit A1- A21 can be looked at to establish or buttress the oral agreement made with Cross-Appellants to give 5% rebate/commission for all sales made by Respondent when Exhibit A1-A21 relates to transactions which were entirely statute barred
2. Whether the Learned trial judge was right to hold that Cross Appellant pleadings of not being aware of any meeting with Respondent were an insufficient denial that can be likened to an admission of the verbal agreement to pay 5% rebate/Commission to the Respondent.
3. Whether the evidence of PW3 and the figures in Exhibits F1-F2 are contrary to pleadings.
4. Whether the Learned trial judge properly evaluated Exhibits M1-M64 and afforded Cross Appellants fair hearing before her holding regarding Exhibits M1-M90 tendered by the Cross Appellants.
The Plaintiff (Appellant) in the Cross Respondent’s Brief raised the following as the issues which arise for the Court’s determination, namely:
1. Whether the learned trial judge was right in holding that the Cross-Appellants’ pleading of not being aware of any meeting with the Cross Respondent whereat the 5% rebate/commission was agreed upon amounts to an insufficient denial that can be likened to an admission.
2. Whether the learned trial judge was right in his finding on the facts that the 1st Cross-Appellant is in breach of the agreement to pay 5% discount/rebate /commission on sales to the Cross Respondent.
3. Whether the learned trial judge was right in accepting PW3’s evidence given in proof of the Cross Respondent claims in the trial court for sales rebates payable by the Cross-appellants to the Cross- Respondent.
4. Whether the learned trial judge was right in holding that there was no evidence that the correct amount owed to the Defendants (now Cross-Appellants) by the Plaintiff (now Cross-Respondents) in Exhibits M1-M90 is N55,409,134.07 and not N59,391,514.72 (sic).
5. Whether the learned trial judge was not wrong in separating Exhibits M1-M64 from Exhibits M65-M90 and for privately examining the said exhibits without calling on the parties to address on it.
A number of these issues, I note, are intertwined with those raised and decided in the main appeal. I shall, however, adopt the issues for determination raised by the Respondents/Cross Appellants.
The 1st issue for determination in the Cross Appeal is the following:
Whether the Learned trial Judge was right to hold that Exhibit A1-A21 can be looked at to establish or buttress the oral agreement made with Cross-Appellants to give 5% rebate/commission for all sales mode by Respondent when Exhibit A1-A21 relates to transactions which were entirely statute barred.
The Cross Appellants, in their Brief of Argument have argued that the learned trial judge was in error to have looked at Exhibits A1-A21 for the period 1997-2001 in determining whether the Cross Appellants were culpable on the oral agreement to pay 5% rebate, when the learned Judge had held that the claims preceding the period July 2002 were statute barred. These exhibits became “worthless pieces of paper” and cannot establish a cause of action in favour of the Plaintiff, for once a matter is statute barred, the right of action and its enforcement are removed.
The Cross Respondents however contend that Exhibits A1-A21 are documentary evidence, corroborating PW1’s evidence in proof of the fact that the Cross Appellants partially fulfilled the agreement. These documents are not only relevant to the facts of the case but have probative value in establishing an agreement which was to govern indefinitely the dealership between the parties. These exhibits were therefore admissible and were not objected to by the Cross Appellant at the trial Court.
This issue came up for consideration in the determination of Issue No. 1 above of the Appellant’s appeal.
As aforesaid, the response of the trial Judge to this contention raised in the Cross Appellants’ final address before her (Page 610-611 of Record of Proceedings), was that, even though by these documents, the claims preceding July 2002 were statute barred, these documents can be used to buttress the evidence of PW1 on the oral agreement to give 5% rebate/commission.
The learned Counsel to the Defendant has cited the case of Ijale v. AG Leventis & Co Ltd (1961) ANLR Page 762, where the question before the High Court was whether the claims of the Plaintiff were caught by the Statute of Limitations. The decision of the learned trial Judge in that matter, de Lestang CJ at Page 771, upholding the Defendant’s Counsel, was that since the cause of action arose from time to time, when the payments were due, while some of the causes of action were barred, others that arose from a time subsequent, were not barred.
I do observe a similar analogy in the present case. The fact that a case is barred by statute is no reason to discountenance the documents which the Court relied upon in proving the bar, from being used to validate other claims.
As the trial Judge held, what was barred is the right of action and not the documents by which the statute bar is proved. I find no error committed by the Lower Court in its decision that Exhibits A1-A21 can be looked at in establishing the oral argument made with the Cross Appellants to give 5% rebate/commission for all sales made by the Respondent. I thus resolve the 1st issue for determination raised by the Cross Appellants against them and in favour of the Cross Respondents.
The 2nd issue raised by the Cross Appellant is:
“Whether the Learned trial Judge was right to hold that Cross Appellant pleadings of not being aware of any meeting with Respondent were an insufficient denial that can be likened to an admission of the verbal agreement to pay 5% rebate/commission to the Respondent.”
The Cross Appellant has contended that the learned trial Judge drew a wrong conclusion that the Cross Appellant’s pleadings of not being aware of the meeting, could be likened to an admission of the agreement. The whole tenor of the Statement of Defence should have been considered. The pleadings materially traversed the allegation of 5% rebate/commission, he contended.
The Cross Respondent, in response, reiterated its earlier submissions, adding that the failure of the Cross Appellant to lead rebuttal evidence by calling their executive director who presided over the meeting, led to the right conclusion made by the trial judge.
While conceding that the trial Judge, at an interlocutory stage had held that only evidence of rebates accruing within the last 6 years preceding the filing of the claim in July 2008 would be entertained, he submitted that the claims for that period, which claims were unchallenged, were rightly upheld by the trial judge. It was a misconception by Counsel to the Respondents to argue that the documents in respect of these claims could not be used.
In order to determine whether there was a proper traverse of the Statement of Claim, it is necessary to set out the salient paragraphs.
Paragraph 5 of the Cross Respondent’s Statement of Claim, as set out at Page 59- 60 of the Record states as follows:
“The Plaintiff will show that they had been dealing generally in the Defendants goods prior to 1996; but in January that year the Defendants had a conference with their top dealers in Kano (including the Plaintiff) at which the terms of the dealership were spelt out including 5% commission/rebate on sales to the plaintiff, prompt production and supply exclusively to the plaintiff of materials, particularly those produced in line with designs made available by the plaintiff.
Paragraphs 5 and 6 of the Defendants’ Statement of Defence as set out at Page 75 of the Record of Proceeding are as follow:
Para 5
The Defendants vehemently deny paragraphs 5, 6, 7, 8, 9, 11, 12, 13, 14, 15, 17, 18, 17 (sic) of the statement of claim and put the plaintiff to the strictest proof of all the averments therein.
Para 5
The Defendants, in answer to paragraph 5 of the statement of claim say that they are not aware of the conference in 1996 or at any other time with top dealers in Kano whereat they entered into terms of dealership agreement including payment of 5% commission/rebate on sales to the plaintiff by Defendants.
The response of the learned Judge to these submissions Counsel is contained at Page 613 of the Record of proceedings, follows:
“The failure by the Defendants to challenge the evidence of PW1 on the existence of the agreement and the verbal response he got over the complaint letters he wrote to the Defendant has been held to amount to an admission. See the case of Ibeans v Ogbeide Supra.
The contention was also made by the Plaintiff’s counsel that the averment in the Defendant’s pleadings on the Plaintiff’s assertion that a meeting took place is short of a specific traverse since the defendants merely averred that they are not aware of any such meeting which is not the same as saying no such meeting took place. He relied on the case of Lewis Peat Ltd. V. Akhimien (1976) 1 All NWLR P. 460 and submitted that an averment not specifically traversed is deemed admitted.
I am of the view that the said averment in the Defendants’ pleadings of not being aware of any such meeting is another way of saying that the Defendant cannot admit or deny the Plaintiff’s claim that a meeting took place and by the decision in the above cited case it is an insufficient denial that can be liked to an admission and I so hold.”
I again find no cause to fault the reasoning of the trial Judge.
As held in the case of Oshodi v. Eyifunmi (2000) 13 NWLR (Pt.684) 298 at 337, Para B, per Iguh JSC, a denial of a material allegation of fact must not be general or evasive, but specific.
Every allegation of fact, if not denied specifically or by necessary implication shall be taken as established at the hearing.
Indeed in the case referred to by the trial Judge of Messrs Lewis & Peat v Akhimien (1976) 1 ANLR Part 1 Page 460 at Page 465-466 Lines 16-20 Idigbe JSC reading the lead judgment held as follows:
“We must observe, however, that in order to raise an issue of fact in these circumstances there must be a proper traverse; and a traverse must be made either by a denial or non-admission either expressly or by necessary implication. So that if a Defendant refuses to admit a particular allegation in the statement of claim, he must state so specially; and he does not do this satisfactorily by pleading thus: “Defendant is not in a position to admit or deny (the particular allegation in the statement of claim) and will at the trial put the Plaintiff to proof”. As was held in Harris v. Gamble (1878) 7 Ch. D. 877. A plea that “Defendant puts Plaintiffs to proof” amounts to insufficient denial: equally a plea that the “Defendant does not admit correctness” (of a particular allegation in the statement of claim) is also an insufficient denial – see Rutter v. Tregent (1879) 1-2 Ch.D. 758. We are, of course, not unmindful of the first paragraph of the statement of defence. Nowadays almost every statement of defence contains such a general denial. (see Warmer v. Sampson 1959 1 Q.8. 287 at 310-311. However, in respect of essential and material allegations such a general denial not be adopted; essential allegations should be specifically traversed. [see Wallerstein v. Moir (1974) 1 W.L.R. 991 at 1002 per Lord Denning M.R.; also Buller & Leake & Jacobs. Precedent of pleadings 12th Edition P.83]. In this connection also we draw attention to Order 13 rules 9 & 10 of the Rules of the High Court Western Region of Nigeria Cap 44 of vol. 2 of the 1959 edition of the Laws of Western Region of Nigeria applicable in the former Midwestern State (now Bendel State). We are, therefore, of the opinion that paragraph 3 of the statement of defence did not deny the facts alleged in paragraphs 1 & 3 of the statement of claim sufficiently enough to raise any issue in respect of the facts.”
By reason of the authorities above and as held by the trial Judge, the averment of the Respondents that they put the Appellant to strict proof of the averment in Paragraph 5 of the Statement of Claim is, I hold, is an admission of the averment.
More important is the fact that the trial Judge did not rely solely on this “admission” but found proof of the rebate/commission, from surrounding facts, correspondence between the parties and the custom between them. I again resolve the 2nd issue for determination against the Counter Claimants and in favour of the Cross Respondent.
The 3rd issue for determination raised by the Cross Appellant is:
Whether the evidence of PW3 and the figures in Exhibits F1-F2 are contrary to pleadings.
The contention of the Cross Appellants is that the trial Judge was in error to have accepted the evidence of PW3 that the total sales in Exhibits F1 and F2 for the period August 2002 to July 2008 was the sum of N381,293,524.25k upon which figure she awarded the rebate/commission of 3%. This evidence was “substantially” not pleaded and is at variance with the pleadings of the Cross Respondents. The Court thus had no jurisdiction to have awarded the sum of N16,076,522.78.
The Cross Respondents’ Counsel, in opposition, denied that the evidence of PW3 and the figures contained in Exhibits F1 and F2 are at variance with the Cross Respondent’s pleadings. The Cross Respondent, Counsel argued, claimed rebates of N89,865,655.20 for the period 1966 to 2007 but the trial Judge ruled that evidence be led only of the accruals from 2002 to 2007. The trial Judge was therefore right in accepting this evidence, in line with the facts averred.
I agree with the Cross Respondents’ Counsel that the facts upon which the evidence of PW3 is given has been pleaded in Paragraphs 11 and 12 of the Cross Respondent’s Statement of Claim. The trial Judge, as submitted by the learned Counsel to the Cross Respondent, was permitted by law to have awarded less than the amount claimed by the Appellant and which was done.
On the power of the Court to award less that what is claimed and pleaded, see the case of First Bank of Nigeria Plc v Dr. Abdulkadir Oniyangi (2000) 6 NWLR Part 661 Page 497 at 513 Para A per Onnoghen JCA (as he then was).
I thus resolve the 3rd issue for determination raised in the Cross Appellants’ Brief of Argument, against the Cross Appellant and in favour of the Cross Respondent.
The 4th issue raised by the Cross Appellant is:
Whether the Learned trial judge properly evaluated Exhibits M1-M64 and afforded Cross Appellants fair hearing before her holding regarding Exhibits M1-M90 tendered by the Cross Appellants.
In view of my resolution above of issue No.3 in the main appeal, it is not necessary to again deliberate on this issue.
In conclusion, following from the resolution of the various issues as has been done above, the appeal and cross appeal succeed in part, as follows:
With regard to the main appeal:
1. I affirm the Judgment of the trial Judge that the Appellant has failed to prove breach of contract against the Respondents.
2. I affirm the Judgment of the Lower Court that the agreement for payment of 5% rebate/commission has been proved.
3. Having held the trial Judge to have been in error to have awarded the sum of N16,076,522.78 as 3% rebate instead of N26,794,261.46 (Twenty Six Million Seven Hundred and Ninety Four Thousand and Ninety Four Thousand Two Hundred and Sixty-One Naira Forty Six kobo) being 5% rebate/commission, I award in the Appellant’s favour, the sum of N26,794,261.46K in substitution for the award of N16,076,522.78 made by the trial Judge.
4. I affirm the Judgment of the Lower Court with respect to the liability of the Appellant for the cost of engraving, but reduce the award to N90,000.00 (Ninety Thousand Naira).
5. I dismiss the appeal of the Appellant against the refusal of the trial Judge to award the sum of N3,912,000 as illegal deductions for roller charges.
On the Cross Appeal:
I affirm the judgment of the Lower Court with regard to the indebtedness of the Cross Respondent to the Cross Appellants, vide their Counterclaim, and insert the amount by which the Cross Respondents are indebted as N22,337,846.80 (Twenty Two Million, Three Hundred Thirty Seven Thousand, Eight Hundred and Forty Six Naira, Eighty Kobo).
I refuse the other reliefs sought in the Cross-Appeal.
ABDU ABOKI, J.C.A.: I have had the opportunity of reading the lead judgment of my learned brother, OLUDOTUN ADEBOLA ADEFOPE-OKOJIE, JCA. Having perused same, I agree with the conclusion reached that the decision of the Lower Court be affirm and also the appeal of the Appellant be dismissed.
I abide by the consequential orders as to costs in the lead judgment.
AMINA AUDI WAMBAI, J.C.A.: I read in advance the lead judgment of my learned brother Oludotun Adebola Adefope-Okojie JCA, just delivered and I entirely agree with the reasoning and conclusion reached by his lordship.
I agree that both the main appeal and the cross-appeal succeed in part. I abide by the consequential orders made in the lead judgment including the order as to cost.
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Appearances
Ifeanyi OgenyiFor Appellant
AND
Suleiman AkasawuaFor Respondent
