MOBIL PRODUCING NIG. UNLTD v. NSESCO NIGERIA LIMITED
(2010)LCN/3897(CA)
In The Court of Appeal of Nigeria
On Monday, the 28th day of June, 2010
CA/C/216/2007
RATIO
DECLARATION OF RIGHT: ON WHAT BASIS IS A DECLARATORY RELIEF BE MADE
…in the cases of EDOZIEN v. EDOZIEN (1998) 13 NWLR (pt.580) 133; 147 it was stated by this court as follows:- 1. “I would like to say it loud that a declaration of right is purely discretionary remedy. It is never granted as a matter of course. The court must be satisfied of the desirability of granting it and the only way to so satisfy the court is by the plaintiff presenting a very strong and cogent case in his statement of claim and adducing convincing evidence in support thereof. Such is the burden which the plaintiff must discharge, and the plaintiff can not discharge it by placing reliance on absence of statement of defence.” PER JA’AFARU MIKA’ILU, J.C.A.
WHETHER THE COURT CAN MAKE DECLARATIONS OF RIGHT EITHER ON ADMISSION OR IN DEFAULT OF DEFENCE WITHOUT HEARING EVIDENCE AND BEING SATISFIED BY SUCH EVIDENCE TO THE PLAINTIFF’S ENTITLEMENT TO SUCH A RIGHT
The Supreme Court in DR OLADIPO MAJA v. MR. COSTA SAMOURIS (2007) 7 NWLR (pt.765) 78, 100-101 held that the court does not make declarations of right either on admission or in default of defence without hearing evidence and being satisfied by such evidence to the plaintiff’s entitlement to such a right. The requirement of oral evidence arises from the fact that the court has a discretion to grant or refuse a declaratory relief and its success depends entirely on the strength of the plaintiff’s own case and not on the defence. PER JA’AFARU MIKA’ILU, J.C.A.
ANTICIPATED PROFITS: WHETHER THE ONUS OF PROVING ANTICIPATED PROFITS IS ON THE PLAINTIFF
The Supreme Court in A-G OYO STATE VS. FAIR LAKES HOTELS (NO.2) (1989) 5 NWLR (pt 121) 255; 284 stated as follows:- ” anticipated profits must be established by evidence. The onus is evidently on the plaintiff to prove its anticipated profits. A prior, the onus is on the plaintiff to establish the accuracy of the projected gross profit in exhibit B tendered by it in proof of its claim. So if for any reason, evidence which would help the trial court to assess the accuracy of the projected profits is inadequate, lacking or not convincing, it is the plaintiff who will fail in its claim for anticipated profits”.
ANTICIPATED PROFITS: WHETHER LOSS OF ANTICIPATED PROFITS IS IN THE NATURE OF SPECIAL DAMAGES
…the Supreme Court in UWA PRINTERS LTD VS. INVESTMENT TRUST LTD (1988) 5 NWLR (pt 92) 110 held that loss of anticipated profit is in the nature of special damages which has to be particularized and specifically established by quantity and credible evidence. PER JA’AFARU MIKA’ILU, J.C.A.
CONSEQUENCE OF THE FAILURE TO PRESENT ORAL EVIDENCE IN PROOF OF LOSS OF PROFIT
In A-G OYO STATE VS. FAIR LAKES HOTEL (NO. 2) (supra) the Supreme Court held that the absence of oral evidence in proof of loss of profit was fatal to an award for loss of profit. The plaintiff had the burden of proving the loss they alleged by putting before the trial court credible evidence. Having failed to put any evidence before the court in the circumstances of this case, the plaintiff’s claim ought to fail. For the trial court to enter judgment summarily, without taking evidence, it has occasioned miscarriage of justice on the part of the appellant as the judgment was based on arbitrary considerations. The plaintiff did not give any evidence, it did not exhibit the contract they were relying on; it did not show which clause in the agreement was allegedly breached. Thus in ALHAJI SALISU BARAU v. CUBITS NIGERIA LTD (1990) 5 NWLR (pt.152) 630 it was held that he who asserts or claims a relief must prove it by credible admissible evidence and the judgment and ward on such claim must be based on legal evidence of the highest provocative value and weight. Thus the plaintiff made allegation of facts in its pleading and failed to discharge the burden of proving those facts by credible evidence as required by law. PER JA’AFARU MIKA’ILU, J.C.A.
JUSTICES
KUMAI B. AKAAHS Justice of The Court of Appeal of Nigeria
JAFARU MIKA’ILU Justice of The Court of Appeal of Nigeria
N. S. NGWUTA Justice of The Court of Appeal of Nigeria
Between
MOBIL PRODUCING NIG. UNLTD Appellant(s)
AND
NSESCO NIGERIA LIMITED Respondent(s)
JA’AFARU MIKA’ILU, J.C.A. (Delivering the Leading Judgment): In this case the Respondent/Plaintiff sued the appellant in the High Court of Akwa Ibom State, Eket Judicial Division in Suit No HEK/26/2004 in which Judgment was delivered on the 22nd day of November, 2004. The respondent as plaintiff had applied to the trial court for summary judgment on declaratory reliefs which the trial court granted. Being dissatisfied with the decision of the trial court, the defendant/appellant appealed to this court as per Notice of Appeal dated and filed on the 23rd January, 2006 upon the order of this court dated 16th January, 2006 extending time for the appellant within which to file the said notice of Appeal. Thus the Respondent, as plaintiff in the lower court filed the action against the appellant claiming for the following:-
(a) A declaration that the Defendant has breached the provision of Janitorial Service Agreement No.2450279 between the Plaintiff and the defendant dated January 1, 2003.
(b) A declaration that article 15.2 dealing with dispute resolution is unlawful, null and avoid.
(c) The sum of 4,473,643.96 being the value of the contract for the period of January, 1 to December 31, 2004.
(d) N2,000.000.00 being general damages.
Thus the facts of this matter as averred to in the statement of claim at the lower court are summarized as follows:-
(a) Sometime in 2002 the plaintiff/Respondent bided for a job upon which the defendant/appellant contracted the plaintiff and entered into an agreement No.2450279.
(b) The plaintiff alleges that by exhibit B annexed to the said agreement, it was entitled to a monthly payment of N373,270.33 fixed for two years commencing from January 1, 2003
(c) That by Article 2.1 of the agreement the contract was to last for one year subject to extension by 30 days notice.
(d) The plaintiff averred that despite his notice for extension the Defendant/Appellant went ahead to appoint another contractor thereby breaching the agreement executed with the plaintiff.
Thus upon the alleged breach the plaintiff brought this action claiming declaration reliefs and compensation for loss of business profit and also filed a motion on notice dated 13th July, 2004 praying the trial court to enter judgment in favour of the Plaintiff as per the writ of summons in default of appearance and defence by the defendant.
The trial court heard the application in the absence of the Defendant and granted the claims summarily.
The appellant has framed the following issues for determination:-
1. Whether in the circumstances of this case, the trial court was right to have entered summary judgment against the appellant.
2. Whether or not the trial court was right in granting the sum of N4.473.643.96 to the Respondent as value of the unperformed contract.
On the other hand the respondent has adopted the above issues for determination.
The learned counsel for the appellant has argued that it is not in doubt from the above that claims (c) and (d) will accrue if the Defendant/Appellant is found wanting or liable on claims (a) and (b).
Thus if the Defendant is not liable for breaching the terms of the Janitorial Services Agreement No. 2450279 the ancillary claims (c) and (d) do not avail the plaintiff. The claims of the plaintiff are for a declaration and for anticipated profit.
It is to be noted that the rules of court provide in 014 R5 that in all actions not specifically provided for in this order, if the defendant fails to enter appearance within the stipulated time, the plaintiff may apply for the case to be set down for hearing, and upon such hearing the court may give any judgment that the plaintiff appears to be entitled to on the facts. Thus it is evident that in the first instance, the plaintiff/respondent was not entitled to bring an application under order 14 rule 1 of the rules of court for summary judgment in default of appearance and pleadings. Indeed the plaintiff was not entitled to summary judgment at all going by the provisions of Order 14 Rules 5 of the Rules of Court. The trial Judge ought to have considered the provisions of Order 14 rules 5 and applied the same by setting the matter down for hearing to allow the plaintiff/respondent prove its declaratory reliefs. Refer to FALOBI v. FALOBI (1978) 9-10 SC 1 and OKEY v. AIYEDUN (1986) 2 NWLR (pt.23) 548. Thus in the cases of EDOZIEN v. EDOZIEN (1998) 13 NWLR (pt.580) 133; 147 it was stated by this court as follows:-
1. “I would like to say it loud that a declaration of right is purely discretionary remedy. It is never granted as a matter of course.
The court must be satisfied of the desirability of granting it and the only way to so satisfy the court is by the plaintiff presenting a very strong and cogent case in his statement of claim and adducing convincing evidence in support thereof.
Such is the burden which the plaintiff must discharge, and the plaintiff can not discharge it by placing reliance on absence of statement of defence.”
The learned appellant counsel has averred that in this case the trial court summarily entered judgment in favour of the plaintiff without the plaintiff adducing evidence, neither documentary nor oral, in proof of its claim. No argument is recorded in favour of the plaintiff on its application for judgment.
It is to be noted that the plaintiff before the trial court failed to annex the contract document alleged to have been breached by the defendant upon which the plaintiff seeks declarations on. The contract was not annexed to the writ of summons and it was not annexed to the statement of claim and it was not even exhibited on the affidavit in support of the motion for judgment. I hold that the plaintiff having not adduced any evidence in proof of its claim ought not to have been granted judgment in this matter.
The trial court ought not to have granted summary judgment on declaration reliefs. The Supreme Court in DR OLADIPO MAJA v. MR. COSTA SAMOURIS (2007) 7 NWLR (pt.765) 78, 100-101 held that the court does not make declarations of right either on admission or in default of defence without hearing evidence and being satisfied by such evidence to the plaintiff’s entitlement to such a right. The requirement of oral evidence arises from the fact that the court has a discretion to grant or refuse a declaratory relief and its success depends entirely on the strength of the plaintiff’s own case and not on the defence.
The above is sufficient to make this court uphold this appeal. But it should be noted that the plaintiff/respondent claimed the sum of “4,473,643.96” as value of the contract they were supposed to execute on behalf of the defendant/appellant but for the allege breach. The currency in which the plaintiff is claiming is not reflected or shown in both writ of summons and statement of claim. The plaintiff in its motion on notice prayed for judgment as per the writ of summons which in itself failed to state the currency thus leaving the same for speculation. The trial Judge did speculate and infer that the plaintiff must have represented those figures in Naira, thus awarding damages for alleged breach in Naira.
Also the plaintiff’s claim for the sum is in the nature of anticipated profit. The Supreme Court in A-G OYO STATE VS. FAIR LAKES HOTELS (NO.2) (1989) 5 NWLR (pt 121) 255; 284 stated as follows:-
” anticipated profits must be established by evidence. The onus is evidently on the plaintiff to prove its anticipated profits. A prior, the onus is on the plaintiff to establish the accuracy of the projected gross profit in exhibit B tendered by it in proof of its claim. So if for any reason, evidence which would help the trial court to assess the accuracy of the projected profits is inadequate, lacking or not convincing, it is the plaintiff who will fail in its claim for anticipated profits”.
In this case the sum total of the averments of the plaintiff in its statement of claim is that but for the alleged breach by the defendant.
The plaintiff would have performed the Janitorial Services contract for January 1st to December 31st, 2004 and in the process would have earned N372.720.33 per month for 12 months under consideration.
Thus the Supreme Court in UWA PRINTERS LTD VS. INVESTMENT TRUST LTD (1988) 5 NWLR (pt 92) 110 held that loss of anticipated profit is in the nature of special damages which has to be particularized and specifically established by quantity and credible evidence.
Thus in this case the plaintiff did not put any evidence before the trial court in proof of its anticipated profit or the loss thereof which it sustained upon the alleged breach.
Even the plaintiffs counsel arguments, which would count to chart the path of justice. The agreement between both parties was not even sighted by the trial court. In A-G OYO STATE VS. FAIR LAKES HOTEL (NO. 2) (supra) the Supreme Court held that the absence of oral evidence in proof of loss of profit was fatal to an award for loss of profit. The plaintiff had the burden of proving the loss they alleged by putting before the trial court credible evidence. Having failed to put any evidence before the court in the circumstances of this case, the plaintiff’s claim ought to fail. For the trial court to enter judgment summarily, without taking evidence, it has occasioned miscarriage of justice on the part of the appellant as the judgment was based on arbitrary considerations. The plaintiff did not give any evidence, it did not exhibit the contract they were relying on; it did not show which clause in the agreement was allegedly breached. Thus in ALHAJI SALISU BARAU v. CUBITS NIGERIA LTD (1990) 5 NWLR (pt.152) 630 it was held that he who asserts or claims a relief must prove it by credible admissible evidence and the judgment and ward on such claim must be based on legal evidence of the highest provocative value and weight.
Thus the plaintiff made allegation of facts in its pleading and failed to discharge the burden of proving those facts by credible evidence as required by law. Therefore the trial court ought not to have granted the plaintiff judgment under and circumstance.
To conclude, it is clear that both the main claims and the ancillary claims of the plaintiff are such that the law requires the plaintiff, even in the absence of the defendant and in default of pleadings by the defendant, to enter the witness box and adduce credible evidence in proof of its right for a declaration thereof and to strictly prove the basis of their assessment of the anticipated profit.
The plaintiff failed on both counts to adduce any evidence documentary or oral, therefore not placing anything before the trial court for consideration. Thus the trial court erred in granting summary judgment to the plaintiff for the claims in this case on the grounds of default of appearance an pleading by the defendant as such judgment is not backed by law and occasion miscarriage of justice against the appellant.
This appeal has merit. It is allowed. The judgment of the trial court is hereby set aside.
The case is remitted to the court below to be heard and determined by another judge. Each party to bear its costs.
KUMA B. AKAAHS, J.C.A.: I had the privilege of reading in draft the judgment of my learned brother, Mikailu, JCA. He admirably discussed the law applicable to declaratory actions. I entirely agree with his exposition and adopt in its entirety his reasoning and conclusion. In summary judgment cannot be given in claims for declaratory reliefs as the court cannot make declaration of right either on admission or in default of defence without hearing evidence which entitles the plaintiff to the declaration he is seeking. The principle was well stated in KODILINYE v ODU (1935) 2 WACA 336 AT 337 which dealt with declaration of title where the court stated per Webber, CJ that “the onus lies on the plaintiff to satisfy the court that he is entitled on the evidence brought by him to a declaration of title. The plaintiff in this case must rely on the strength of his own case and not on the weakness of the defendants case.” The principle holds true for other declarations as in declaration for title.
For this and the more detailed reasons contained in the leading judgment, I too find there is merit in the appeal and I allow it accordingly. I endorse the order remitting the matter to the Hon Chief Judge of Akwa Ibom State for hearing and determination by another Judge other than Enefiok Udoh J.
NWALI SYLVESTER NGWUTA, J.C.A.: I read in draft the lead judgment just delivered by my Learned Brother Mika’ilu, JCA and I entirely agree with the reasoning and conclusion therein.
The trial Court was in error when it entered a summary default judgment under order 14 r. 1 of the Court of Appeal Rules 2007.
A declaratory relief is granted or denied based on the discretion of the Court and there can be no Judicial and judicious exercise of discretion if the Court has not heard the evidence in the matter. And what is more the Lower Court relied on a purported breach of contract which was not exhibited or proved before it.
For the above and the fuller reasons in the lead judgment, I also allow the appeal.
I adopt the consequential orders in the lead judgment.
Appearances
Edet Bassey EsqFor Appellant
AND
Emmanuel O. Akpan EsqFor Respondent
