PETROLEUM (SPECIAL) TRUST FUND V. WESTERN PROJECT CONSORTIUM LTD. & ORS.
(2016)LCN/8411(CA)
RATIO
CONTRACT: CONTRACT AGREEMENT; CIRCUMSTANCES WHERE THE IDENTIFICATION OF A VALID OFFER AND ACCEPTANCE WOULD NOT BE NECESSARY
The traditional or well settled view is that to be valid an agreement requires the identification of a valid offer and a valid acceptance of that offer, but this traditional analysis would not be necessary where it becomes clear that the parties were agreed on all the material points. That is to say the parties are/were ad idem. See: Gibson v. Manchester City Council (1978) 2 All Eng., Reports p. 583; Butler Machine Tool Co. Ltd. v. Ex-cell-o Corp. Ltd. (1979) 1 All Eng Reports p. 965. PER. RHODES-VIVOUR, J.C.A.
PRACTICE AND PROCEDURE: DUTY OF A COUNSEL WHO COMPLAINS THAT THE JUDGE DID NOT EVALUATE EVIDENCE, OR DID NOT EVALUATE EVIDENCE PROPERLY
Counsel who complains that the Judge did not evaluate evidence, or did not evaluate evidence properly has the added duty to show how this omission by the Judge if corrected, the judgment would be found to be wrong. PER. RHODES-VIVOUR, J.C.A.
COURT: DUTY OF THE COURT TO CONSTRUE CONTRACT AND WHAT THE COURT IS EXPECTED TO DO WHEN A CONTRACT IS CONTAINED IN MORE THAN ON DOCUMENT
When interpreting a contract the court considers the intentions of the parties who have agreed on the terms that shall bind them. Once they agree there is consensus ad idem. The court must examine the words used in the contract to know what was agreed. It is those words that express the parties intentions. Courts construe contracts so as to give effect to the intention of the parties and that interpretation must be within the contemplation of the parties. Where the terms of a contract are clear, and there is no fraud or misrepresentation, the parties are bound by its terms and it is not the business of the court to rewrite contracts freely executed by the parties.
See: Union Bank Nig. Ltd. v. Prof Ozigi (1994) 3 NWLR (Pt.333) p. 385; Bookshop House v. Stanley Consultants (1986) 3 NWLR (Pt.26) p. 87; African Reinsurance Corp. v. Fantaye (1986) 1NWLR (Pt.14) p. 113. A contract may be contained in more than one document. When that is the case the court is expected to examine all the documents passing between the parties and reach a conclusion from them, or from the conduct of the parties, whether they have reached agreement on all material points. Applying this guide one would easily see that in most cases there is a contract/agreement once the parties sign without objection taken to it. After all the signature of the parties on the contract papers signifies full agreement with everything therein. That is to say the signature indicates that the signatory gave his consent to every clause in the document. PER. RHODES-VIVOUR, J.C.A.
APPEAL: INTERFERENCE WITH FINDINGS OF TRIAL COURT; SITUATIONS WHERE AN APPELLATE COURT CAN SET ASIDE WITH THE FINDINGS OF THE TRIAL COURT
Conversely where the trial court failed to evaluate evidence (oral/documentary) or did not properly evaluate such evidence the court of appeal can do what the trial court ought to have done and set aside the findings made. See: Ejoh v. Wilcox (2003) 13 NWLR (Pt.838) p. 488; Wilson v. Oshin (2000) 9 NWLR (Pt.673) p. 442; Salako v. Dosunmu (1997) 8 NWLR (Pt.517) p. 371; Umesie v. Onuaguluchi (1995) 9 NWLR (Pt.421) p. 515. PER. RHODES-VIVOUR, J.C.A.
CONTRACT: AWARD OF INTEREST; SITUATIONS WHERE INTEREST IS AWARDED
The award of Interest by the Court below is two fold. Pre-judgment interest, awarded by the Court at the prevailing Central Bank of Nigeria rate. Post Judgment interest awarded at 5% after Judgment until final liquidation. I earlier alluded to the position of the Law that to succeed where interest is claimed as of right facts must be pleaded in support and evidence must be led which show entitlement to it.
In the instant case interest was not claimed on the writ neither were facts averred in the pleadings to show that the respondents were entitled to interest as of right. Furthermore interest at the prevailing Central Bank of Nigeria rate is vague as such interest swings around from time to time.
In the absence of a circular, CBN interest rate is uncertain. There was thus nothing before the court to justify the award of interest at the prevailing Central Bank of Nigeria rate. In the light of all that I have been saying I am satisfied that the respondents have been paid in full all their claims and they are not entitled to any more payments. Accordingly this appeal is allowed.There shall be no order on costs. PER. RHODES-VIVOUR, J.C.A.
In The Court of Appeal of Nigeria
On Monday, the 11th day of December, 2006
CA/A/84/06
JUSTICE
OLUFUNLOLA OYELOLA ADEKEYEJustice of The Court of Appeal of Nigeria
BODE RHODES-VIVOURJustice of The Court of Appeal of Nigeria
ABDU ABOKIJustice of The Court of Appeal of Nigeria
Between
PETROLEUM (SPECIAL) TRUST FUNDAppellant(s)
AND
1. WESTERN PROJECT CONSORTIUM LTD.
2. ENGR. STEPHEN OJOBOR
(Suing for himself and on behalf of other members of Eastern Projects Consultants)
3. NORWEST CONSULTANTS LTD.
4. ALHAJI MUNIR YAKUBU
(Suing for himself and on behalf of other members of North East Zonal Consortium)
5. ALHAJI A. M. KAWU
(Suing for himself and on behalf of other members of Consortium Zone Six)Respondent(s)
RHODES-VIVOUR, J.C.A. (Delivering the Leading Judgment): In the Federal High Court Abuja Judicial Division the respondents (“the plaintiffs”) sued the appellant and the Attorney-General of the Federation (“the defendants”) on a specially endorsed writ claiming as follows:
“1.(a) The 1st plaintiffs claim against the defendants jointly and severally the sum of N47,635,918:88 (Forty seven Million six hundred and thirty-five thousand nine hundred and eighteen Naira eighty eight Kobo) being the unpaid outstanding balance of the negotiated and agreed sum due to the 1st plaintiff and interest calculated at the rate of 30% per annum from the 27th of June 2000 till Judgment and thereafter at 12% until the entire Judgment is liquidated.
(b) The 2nd plaintiff’s claim against the defendants jointly and severally the sum of N35,361,226.44 Thirty-five Million, three hundred and sixty one thousand two hundred and twenty-six Naira forty-four kobo) representing the unpaid outstanding balance of the negotiated and agreed sum due to the 2nd plaintiff and interest calculated at the rate of 30% per annum from the 27th of June 2000 till judgment and thereafter at 12% until the entire judgment is liquidated.
(c) The 3rd plaintiff’s claim against the defendants jointly and severally the sum of N35,242,904:76 (Thirty-five million two hundred and forty two thousand nine hundred and four Naira seventy-six Kobo) representing the unpaid outstanding balance of the negotiated and agreed sum due to the 3rd plaintiff and interest calculated at the rate of 30% per annum from the 27th June 2000 till judgment and thereafter at 12% until the entire judgment is liquidated.
(d) The 4th plaintiff’s claim against the defendants jointly and severally the sum of N35,577,823:05 (Thirty-five million five hundred and seventy seven thousand eight hundred and twenty three naira, five kobo) representing the unpaid outstanding balance of the negotiated and agreed sum due to the 4th plaintiff and interest calculated at the rate of 30% per annum from the 27th of June 2000 till judgment and thereafter at 12% until the entire judgment is liquidated.
(e) The 5th plaintiff’s claim against the defendants jointly and severally the sum of N46,027002:92 (Forty six million twenty-seven thousand and two Naira ninety two Kobo) representing the unpaid outstanding balance of the negotiated and agreed sum due to the 5th plaintiff and interest calculated at the rate of 30% per annum from the 27th of June 2000 till judgment and thereafter at 12% until the entire judgment is liquidated.
(f) The 6th plaintiff’s claim against the defendants jointly and severally the sum of N40,514,673:68 (Forty Million five hundred and fourteen thousand six hundred and seventy three naira, sixty eight kobo) representing the unpaid outstanding balance of the negotiated and agreed sum due to the 6th plaintiff and interest calculated at the rate of 30% per annum from the 27th of June 2000 till judgment and thereafter at 12% until the entire judgment is liquidated.
2. The plaintiffs jointly claim against the defendants jointly and severally a total sum of N208,339,509:73 (Two hundred and eight Million, three hundred and thit1y nine thousand, five hundred and nine Naira, seventy three Kobo) only, being the total of the unpaid balance of the negotiated and agreed amounts between the plaintiffs and the 1st defendant.
3. A declaration that the plaintiffs are jointly entitled to be paid a total sum of N208,339,509:73 (Two hundred and eight Million, three hundred and thirty nine thousand, five hundred and nine Naira, seventy three Kobo) only by the defendants being the total unpaid balance of the amounts agreed between the plaintiffs and the 1st defendant.
The facts are not in dispute. The plaintiffs were consultants to the 1st defendant, The Petroleum (Special) Trust Fund. They undertook various consultancy jobs for the 1st defendant. On conclusion of their jobs the Federal Government of Nigeria discontinued the operations of the 1st defendant and appointed an Interim Management Committee to wind it up, and negotiate with the plaintiffs and reach an agreement as to the full and final payments due to them from the 1st defendant.
Negotiations were held between the Interim Management Committee and the plaintiffs. The amount to be paid to each plaintiff was agreed. See exhibits A – A4.
Clause 1.7 of the agreements executed by the parties made the payments agreed to subject to MR President’s approval. It reads:
“It was noted that payments of any amount agreed upon is subject to MR President’s approval and availability of funds.”
The plaintiffs were not paid the sums agreed in exhibits A – A4, rather, they were paid 50% of the sums agreed in full and final payment of their claims, The defendant claimed that this was so because MR President gave approval for only 50% of the sums negotiated, and agreed, to be paid to the plaintiffs as full and final payments. See exhibit F.
The plaintiffs collected sums amounting to 50% of the negotiated amount and sued for the balance of 50%. Hon. Justice B.F.M. Nyako agreed with the plaintiffs that they were entitled to the outstanding 50%. The concluding part of the judgment reads as follows:
“I find that the defendants have breached the terms of this agreement with each of the plaintiffs and that each of the plaintiffs are entitled to the balance of their money as agreed upon. If the defendants require a further reduction, they should renegotiate with the plaintiffs otherwise they are bound by the terms of their agreement. Consequently, I hereby order judgment in favour of each of the plaintiffs as claimed. Interest at the prevailing Central Bank of Nigeria rate, and 5% thereafter until first liquidation.”
The judgment did not go down well with the defendants and so on 8/3/06 the 1st defendant filed a notice of appeal.
In accordance with Order 6 rules 2 and 4 of the Court of Appeal Rules Briefs of argument were duly filed and exchanged by both sides.
The appellant’s brief of argument was filed on 25/4/06, while the respondents brief of argument was filed on 23/6/06.
At the hearing of the appeal on 14/9/06 learned counsel for the appellant MR-E. Jegede adopted his brief and urged us to allow the appeal and enter dismissal of the plaintiff’s claim.
The respondents were absent and unrepresented. Invoking the provisions of Order 6 rule 9(5) this appeal was treated as having been duly argued in the absence of learned counsel for the respondents.
Learned counsel for the appellant distilled three issues for determination of this appeal from his six Grounds of Appeal. They are:
“ISSUE NO.1
Whether the lower court correctly evaluated and construed the various relevant documentary evidence particularly exhibit A, A1 to A4. Exhibit C and exhibit G, G1 to G5.
ISSUE NO.2
Whether there is evidence before the court that plaintiff’s collected various sums of money from the 1st defendant in full and final payments of their respective claims.
ISSUE NO.3
Whether the unspecified interest awarded pre-judgment was legally justified.”
Learned counsel for the respondents presented a single issue for determination of this appeal. It is:
“Whether the defendants discharged the evidential burden of proof placed upon them in the light of the issue for determination before the lower court.”
I have examined the issues formulated by both sides, and I must say that I am not comfortable with the appellants Issue No.2 and the respondents sole issue.
In situations such as I now find myself this court has the power to adopt or even formulate issues that would determine the real grievance in the appeal. See: Ikegwuoha v. Ohawuchi (1996) 3 NWLR (Pt.435) p. 146; Aduku v. Adejoh (1994) 5 NWLR (Pt.346) p.582.
In my view the following issues would address the real complaint in this appeal. They are:
1. Whether payment of 50% of the negotiated sums was in full and final settlement of respondents/plaintiff’s claim, or the agreed amounts negotiated by the parties.
2. Whether the court below correctly evaluated and construed the various relevant documentary evidence particularly exhibits A, A1 to A4, C and G, G1 to G5.
Whether the unspecified interest awarded pre-judgment was legally justified.
At the hearing in the court below no one gave evidence on oath, rather the hearing was based on documents.
The following documents were tendered on behalf of the respondents/plaintiffs:
(i) Exhibit A – A4 – Negotiations between PTF and the respondents on various dates.
(ii) Exhibit B – Letter dated 30/1/01 to PTF from PPMC
(iii) Exhibit C – Letter dated 22/3/01 from Atiyu Umaru to President, Federal Republic of Nigeria.
(iv) Exhibit D – Reply to exhibit C from PTF dated 9/5/01.
(v) Exhibit E – Letter dated 24/5/01 from Aliyu Umaru to President, Federal Republic of Nigeria.
The following documents were tendered on behalf of the appellant/defendant:
(vi) Exhibit G – G5 – Payment vouchers (6 Nos.) dated 9/1/01.
(vii) Exhibit F – Memo from 1st defendant to MR President and his endorsement thereon.
On Issue No.1 learned counsel for the appellant observed that the clear interpretation of clause 1.7 in exhibits A – A4 is that both sides have by their agreement donated their powers on the sums payable to MR. President notwithstanding the agreement reached between them as to the sums payable. He submitted that parties to an agreement can subject their agreement to a third Party’s discretion.
Reference was made to Isiyaku v. Zwingina (2003) 6 NWLR (Pt.817) p. 560. Contending that MR President’s decision on payment of money shall prevail and the resolutions relating to money is subordinated to MR President’s approval. Reference was made to Tukur v. Governor, Gongola State (1989) 4 NWLR (Pt.117) p. 517; Texaco Panama Inc. v. Shell PDCN Ltd. (2002) 5 NWLR (Pt. 759) p, 209; Yusufu v. Obasanjo (2003) 16 NWLR (Pt.847) p, 554. He urged us to resolve this issue in his favour.
Learned counsel for the respondents argued that clause 1.7 in exhibits A, A1 – A4 is not an integral part of the agreement of the parties, rather a gentleman’s provision designed to restrain the defendant from steps to enforce the agreement. Learned counsel further argued that there was nothing in clause 1.7 that gives the defendant a right to pay a lesser sum than the agreed amount. He urged us to uphold the decision of the teamed trial Judge and dismiss the appeal.
The respondents on completion of their consultancy jobs for the 1st defendant presented their bills. They were invited for negotiations. They participated in negotiations. On conclusion fees to be paid to the respondents were agreed. See exhibits A, A1-A4. In these exhibits there is a clause. It is clause 1.7. It reads:
“It is noted that payment of any amount agreed upon is subject to MR President’s approval and availability of fund.”
The respondents and the defendant signed these exhibits. The respondents were paid 50% of the negotiated amount. Justification for such payments was placed on MR President’s directive contained in exhibit F.
The traditional or well settled view is that to be valid an agreement requires the identification of a valid offer and a valid acceptance of that offer, but this traditional analysis would not be necessary where it becomes clear that the parties were agreed on all the material points. That is to say the parties are/were ad idem. See: Gibson v. Manchester City Council (1978) 2 All Eng., Reports p. 583; Butler Machine Tool Co. Ltd. v. Ex-cell-o Corp. Ltd. (1979) 1 All Eng Reports p. 965.
When interpreting a contract the court considers the intentions of the parties who have agreed on the terms that shall bind them.
Once they agree there is consensus ad idem.
The court must examine the words used in the contract to know what was agreed. It is those words that express the parties intentions.
Courts construe contracts so as to give effect to the intention of the parties and that interpretation must be within the contemplation of the parties. Where the terms of a contract are clear, and there is no fraud or misrepresentation, the parties are bound by its terms and it is not the business of the court to rewrite contracts freely executed by the parties.
See: Union Bank Nig. Ltd. v. Prof Ozigi (1994) 3 NWLR (Pt.333) p. 385; Bookshop House v. Stanley Consultants (1986) 3 NWLR (Pt.26) p. 87; African Reinsurance Corp. v. Fantaye (1986) 1NWLR (Pt.14) p. 113.
A contract may be contained in more than one document. When that is the case the court is expected to examine all the documents passing between the parties and reach a conclusion from them, or from the conduct of the parties, whether they have reached agreement on all material points. Applying this guide one would easily see that in most cases there is a contract/agreement once the parties sign without objection taken to it. After all the signature of the parties on the contract papers signifies full agreement with everything therein.
That is to say the signature indicates that the signatory gave his consent to every clause in the document.
On page 112 of the Record of Appeal, the Learned trial Judge had this to say on clause 1.7 in exhibits A, A1 – A4:
“…MR president has directed that the 1st defendant pays 50% of what had been negotiated in full and final payment etc. The question here is how will this directive fall within the above clause. The answer is that it does not. By MR President’s directive a new amount not agreed upon has become payable. This is not the spirit of the agreement arrived at the renegotiation.”
Clause 1.7 in exhibits A, A1 – A4 is a term of the agreement freely executed by the parties. Had the learned trial Judge considered the meaning of the words “Subject to” in clause 1.7. Her lordship would have come to a very different conclusion.
“Subject to” means liable, subordinate, subservient, or inferior to, governed or affected by; provided that; provided; answerable for; See Blacks Law Dictionary 6th Edition page 1425.
Where “Subject to” is used, a condition, restriction, limitation is introduced. See: Oke v. Oke (1974) 1 All NLR (Pt.1) p. 443; Aqua Ltd. v. Ondo State Sports Council (1988) 10 – 11 SC p. 31; (1988) 4 NWLR (Pt.91) 622; Olusemo v. COP (1998) 11 NWLR (Pt. 575) p. 547.
The agreed amount to be paid to the respondents was brought to the attention of MR President in line with Clause 1.7 in exhibits A, Al – A4, See exhibit F.
In exhibit F MR President endorsed/directed thereon thus:
“Chairman (IMC) PTF Pay 50% of what you have negotiated in full and final payment as consultancy fees to deferent categories of Management Advisory consultants and finally disengage all consultants …. ”
My lords “Subject to” in clause 1.7 in exhibit A, A1 – A4 signed by all the parties implies that the fees agreed to be paid to the respondents are conditional upon what MR President directs. The directive of MR President is all too clear for anyone to see above. The sums were duly paid to the respondents according to MR President’s directive, and the respondents collected their fees in full and final payment.
In my view the learned trial Judge was wrong to find that the appellant/defendant had breached the terms of the agreement with each of the respondents/plaintiffs and that each of the said plaintiffs are entitled to the balance of their money as agreed upon. Rather the terms of the agreement were complied with as the parties intended.
The parties agreed that whatever fees they agreed on was subject to MR President’s approval and availability of funds. MR President approved 50% of the agreed fees to be paid to the respondents in full and final payment of their claims. The respondents are bound by the plain words of exhibits A, A1 – A4 (the agreement) to which they signed. If they assert the contrary the onus is on them to establish facts on which they base that assertion. Sadly there are no such facts forthcoming.
Once again I hold that the payment of 50% of the negotiated sum to the respondents in full and final payment of their fees is within the contemplation of the parties since they freely gave their consent by their signatures to MR President approval. MR President directed that a reduction of the agreed sums by 50% should be paid to the respondents (consultants). The respondents are bound in view of clause 1.7 in exhibits A, A1 – A4.
On Issue No.2 learned counsel for the appellant observed that the trial court failed to evaluate/review documentary evidence, i.e. exhibits C, G, G1 – G5.
He submitted that if these exhibits were evaluated the trial Judge would have seen that what was paid was full and final payment. Relying on fibrin v. Saba (2004) 16 NWLR (Pt.899) p. 243; Fagunwa v. Adibi (2004)17 NWLR (Pt.903) p. 544; Iwuoha v. NIPOST Ltd. (2003) 8 NWLR (Pt.822) p. 308. He observed that signing exhibits G, G1-G5 the respondents accepted a lesser amount in full and final payment of their fees. He urged us to resolve this issue in his favour.
Replying learned counsel for the respondents argued that the word “Final” in exhibits G, G1-G4 refers simply to the description of the valuation upon which the payments were made and not that the payments made to the signatories were final payments of the fees due to them. As regards exhibit C Learned counsel argued that it was a letter of protest and not evidence that the respondents willingly waived their rights to the balance.
Relying on Kosile v. Folarin (1989) 3 NWLR (Pt.107) p. 1. He submitted that the respondents did not waive their rights to the balance, rather they accepted the payment as part payment which was contemplated by the agreement of the parties.
It is the duty of the trial court to evaluate all relevant oral and documentary evidence. This is the well settled practice because since the trial court saw, and heard the witnesses it is in a good position to ascribe probative value to such evidence. Where the trial court evaluated the evidence and appraised the facts the appeal court would be loath to substitute its own views for the views of the trial court. Conversely where the trial court failed to evaluate evidence (oral/documentary) or did not properly evaluate such evidence the court of appeal can do what the trial court ought to have done and set aside the findings made. See: Ejoh v. Wilcox (2003) 13 NWLR (Pt.838) p. 488; Wilson v. Oshin (2000) 9 NWLR (Pt.673) p. 442; Salako v. Dosunmu (1997) 8 NWLR (Pt.517) p. 371; Umesie v. Onuaguluchi (1995) 9 NWLR (Pt.421) p. 515.
Counsel who complains that the Judge did not evaluate evidence, or did not evaluate evidence properly has the added duty to show how this omission by the Judge if corrected, the judgment would be found to be wrong.
The thrust of Learned counsel for the appellant’s submission on this issue is that had the trial Judge properly examined/evaluated exhibits C, G, G-G5 it would be clear that the respondents were paid their fees in full. The learned trial Judge did not examine exhibits C, G1 – G5 in the Judgment on pages 107 – 113 of the record of appeal.
Exhibit C is dated 22/3/01 written on behalf of the respondents by their counsel to MR President complaining about outstanding payments due to his clients. The respondents’ grievance are so obvious in paragraph six of the said exhibit C. It reads:
” Your Excellency, the foregoing is clearly against the policy of Your Government which approved the payment of 50% to all Consultants in full and final settlement of their claims against the PTF ….”
They complain of being underpaid because the 50% agreed in exhibits A, A1-A4 was further reduced by MR President’s directive in exhibit F where MR President directed the Chairman of (IMC) PTF:
“to pay 50% of what you have negotiated in full and final payment as consultancy fees to different categories of management Advisory consultants and formally disengage all consultants …. ”
Exhibit C is clearly a letter of protest to MR President by the respondents that they were not paid the sums agreed in exhibits A, A1 – A4.
On the other hand exhibits G, G1 – G5 are payment vouchers signed by the respondents. Documents (inclusive of vouchers) are to be examined as a whole and not in parts before the court can conclude what the document is all about.
In exhibits G, G1-G5 the word “Final” is clearly inscribed.
“Final” means conclusive, definite, unalterable. Further down it is stated thus:
Being payment for consultancy on Zonal project ….. as attached as approved.
The fees approved are stated, and still further down on these exhibits it is stated that:
“It is the last approval for payment by the President.”
In my respectful view the Word “final” and the sentence:-
“It is the last approval for payment by the President”
is conclusive that signatories to exhibits G, G1 – G5 were paid the sums stated therein in full and final payment of their claims. The respondents must accept the implications and consequences of their signatures on exhibits G, G1 – G5.
The respondents were paid the sums stated in exhibits G, G1 G5 on the 9th of January 2001, in full and final settlement of their claims. It was not until the 22nd of March 2001, that the respondents saw the need to protest by writing exhibit C to MR President. To my mind exhibit C was written in the faint hope that MR President might reverse his directives which were given in accordance with a very clear and integral term in the Contract, Clause 1.7.
Had the learned trial Judge examined/evaluated exhibits G, G1 – G5 she would have concluded that the respondents signed them in full and final settlement of their claims as approved by MR President after invoking clause 1.7 in exhibits A, A1 – A4.
On Issue three learned counsel for the appellant observed that the respondents/plaintiffs did not plead how they became entitled to interest or lead evidence on pre Judgment interest. He submitted that since the respondents/plaintiffs did not claim interest as of right, or plead facts in support of it, or prove it, it was wrong for the learned trial Judge to grant it. Reliance was placed on: Ekwunife v. Wayne (W/A) Ltd. (1989) 5 NWLR (Pt.122) p. 422: Texaco Overseas (Nig.) Ltd. v. Pedmar (Nig.) UnLtd. (2002) 13 NWLR (Pt.785) p. 526; Henkel Chem Ltd. v. A.G. Ferrero & Co. (2003) 4 NWLR (Pt.810) p. 306. He urge us to vacate the pre Judgment interest awarded by the Court and resolve this issue in favour of the appellants.
In their brief of argument the respondents were silent on this issue. There was no response. The concluding part of the judgment of the Trial court reads as follows:
” …. I hereby order Judgment in favour of each of the plaintiffs as claimed. Interest at the prevailing Central Bank of Nigeria rate, and 5% thereafter until final liquidation.
Interest is awarded in two distinct situations, namely:
(a) Where it is claimed as of right.
(b) Where statute confers on the court the power to award interest.
Where interest is claimed as of right the party must claim entitlement to it on the Writ of Summons and plead facts in support in the statement of claim, or where the party omits to claim interest on the writ he would only be entitled to it if facts are pleaded in the statement of claim and evidence led which show entitlement to it.
If the court is satisfied with the evidence given, interest is awarded. Interest so awarded is awarded as of right and it is prejudgment interest. The Judge must state when it starts to run, usually from the accrual of the cause of action or whenever the Judge deems proper, after examining the evidence in support.
When actions are brought on Commercial matters the courts usually find that money ought to have been paid sometime ago. In such cases it ought to carry interest and that is pre-judgment interest.
The time, pre-judgment, when it would start to run depends on evidence. The basis of such an award is that the defendant had kept the plaintiff out of his money, and the defendant has had the use of it for himself, so he ought to compensate the plaintiff accordingly.
See: Ekwunife v. Wayne W/A Ltd. (1989) 5 NWLR (Pt.122) p. 422; Texaco Overseas (Nig.) Unltd. v. Pedmar (Nig.) Ltd. (2002) 7 SC (Pt.11) p. 222; (2002) 13 NWLR (Pt.785) 526; Harbutt’s Plasticine Ltd. v. Wayne Tank and Pump Co. Ltd. (1970) 1 All Eng Reports p.225; A.B. Kemp Ltd. & Ors v. Tolland (1956) 2 Lloyds List Report p. 681.
Order 42 rule 7 of the Federal High Court (Civil Procedure) Rules 2000 is the statutory power enabling a Judge of that court to award interest not exceeding 10% per annum on the Judgment debt.
This is post Judgment interest to be awarded by a Judge after exercising his discretion judicially and judiciously. That is to say with sufficient and convincing reasons, not arbitrarily or at the whim of the Judge. The reasons for an award of post Judgment interest are usually not stated in the Judgment but appear clear once the Judge does not exceed the stated amount provided by statute and by compelling evidence.
Post Judgment interest, is with effect from the date of Judgment or from any time afterwards. The Judge has no jurisdiction to order payment of interest not included in the claim from a date before Judgment was delivered.
In Ekwunife v. Wayne (W/A) Ltd. (supra) Interest at 10% of the Judgment sum (as provided by Order 27 rule 8 of Plateau State High Court (Civil Procedure) Rules 1976 was awarded with effect from the date of the accrual of the cause of action. This was wrong, it ought to have been awarded after Judgment since it was post Judgment interest. The Supreme Court amended the Judgment to read Judgment at the rate of 10% p.a. with effect from 8/12/80, the date of the Judgment of the High Court.
The award of Interest by the Court below is two fold. Pre-judgment interest, awarded by the Court at the prevailing Central Bank of Nigeria rate. Post Judgment interest awarded at 5% after Judgment until final liquidation.
I earlier alluded to the position of the Law that to succeed where interest is claimed as of right facts must be pleaded in support and evidence must be led which show entitlement to it.
In the instant case interest was not claimed on the writ neither were facts averred in the pleadings to show that the respondents were entitled to interest as of right. Furthermore interest at the prevailing Central Bank of Nigeria rate is vague as such interest swings around from time to time.
In the absence of a circular, CBN interest rate is uncertain. There was thus nothing before the court to justify the award of interest at the prevailing Central Bank of Nigeria rate. In the light of all that I have been saying I am satisfied that the respondents have been paid in full all their claims and they are not entitled to any more payments.
Accordingly this appeal is allowed.
There shall be no order on costs.
ADEKEYE, J.C.A.: I had read in draft the judgment just delivered by my learned brother, O. Rhodes-Vivour, JCA.
In the basic requirements of a contract there must be an offer, an unqualified acceptance of that offer and a legal consideration for a contract to exist.
In deed there must be mutuality of purpose and intention between the two contracting parties. In the instant appeal, the parties held negotiations as an outcome of which the amount to be paid for their consultancy job was agreed and reduced into writing as per exhibits A – A4 Clause 1.7 of the agreements executed by the parties made the payments agreed subject to Mr. Presidents approval as follows:
“It was noted that payment of any amount agreed upon is subject to the President’s approval and availability of funds.”
The respondents gave their consent to and agreed to be bound by clause 1.7 Vide exh G, G1 – G5.
None of the parties can ordinarily thereafter withdraw from the terms of a binding agreement. Tsokwa Motors (Nig.) Ltd. v. UBN Ltd. (1996) 9 NWLR (Pt.471) p.129; Alfotrin Ltd. v. A.-G., Federation (1996) 9 NWLR (Pt.475) p.634; Neka B.B.B. Mfg. Co. Ltd. v. African Continental Bank Ltd. (2004) 2 NWLR (Pt.858) p.521 SC.
Generally speaking in the absence of fraud or mistake, the court will interpret the agreements of the parties in a manner that will allow them to bind themselves as they deem appropriate. The words of the agreement shall be expounded in their natural and ordinary sense.
In sum in the evidence before the court, the parties left the final say in the contract with the President and subject to the availability of funds. Mr. President is the determining factor and he has the power to dictate how much the contractors shall be paid by a stroke of his pen. That was the term the parties particularly the respondents subjected themselves to. The lower court should not have gone outside the scope of clause 1.7. Isiyaku v. Zwingina (2003) 6 NWLR (Pt.817) p.560.
The learned trial Judged acted ultra vires of her power in awarding any kind of interest in this case. Pre-judgment interest is not awarded at large.
The general principle is that interest is not payable or recoverable, at common law in the absence of the following situations:
(a) Contract express or implied or
(b) Some mercantile usage or
(c) Provision by Statute
Kaduna State Transport Authority v. Ofodile (1999) 10 NWLR (Pt.622) p.259; Afribank (Nig) Plc v. A.I. Investment Ltd. (2002) 7 NWLR (Pt.765) p40: Henkel Chem Ltd v. A.-G. Ferrero & Co. (2003) 4 NWLR (Pt.810) p.306; Edem v. Canon Ball Ltd. (1998) 6 NWLR (Pt.553) p.298.
An order for pre-judgment interest or post judgment must be ascertainable it cannot be made at large, or subject to Central Bank dictate.
Where interest is being claimed, the practice is to endorse the claim on the writ of summons and plead facts which support such entitlement in the statement of claim. If it is pleaded and the requisite fees paid the court may if proved on the preponderance of evidence grant the award of interest.
There was no basis on which to award the interest granted by the learned trial Judge as parties were paid in full and final satisfaction of their claim. In line with the leading judgment of my learned brother, I also allow the appeal and make no order as to costs.
ABOKI, J.C.A.: I had the opportunity of reading in draft the lead judgment of my learned brother Bode Rhodes- Vivour, J.C.A. just delivered. I entirely agree with his reasoning and conclusion that the appeal be allowed.
I abide by the consequential orders contained in the lead judgment.
Appeal allowed.
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Appearances
E. JegedeFor Appellant
AND
No appearance for the RespondentFor Respondent
