SAVANNAH SUGAR COMPANY LIMITED v. WABBEY FARMS LIMITED
(2013)LCN/6450(CA)
In The Court of Appeal of Nigeria
On Wednesday, the 31st day of July, 2013
CA/YL/43/2012
JUSTICES
SOTONYE DENTON WEST Justice of The Court of Appeal of Nigeria
JUMMAI HANNATU SANKEY Justice of The Court of Appeal of Nigeria
IGNATIUS IGWE AGUBE Justice of The Court of Appeal of Nigeria
Between
SAVANNAH SUGAR COMPANY LIMITED Appellant(s)
AND
WABBEY FARMS LIMITED Respondent(s)
RATIO
THE PRINCIPLE OF LAW FOR THE GRANT OF SPECIAL AND GENERAL DAMAGES
In deciding these two (2) issues, it is well to remind ourselves of the principles of law for the grant of damages in general, and general damages in particular. In contract, general damages are those damages which the law implies in every breach and every violation of a legal right. It is the loss which flows naturally from the defendant’s acts, and the quantum needs not be pleaded or proved as it is generally presumed by law. The manner in which general damages is quantified is by relying on what would be the opinion and judgment of a reasonable person in the circumstances of the case. See Osuji V Isiocha (1989) 3 NWLR (Pt. 111) 623 @ 635; Lar V Stirling Astaldi (1977) 11-12 SC 53 @ 62; Odumosu V ACB Ltd (1976) 11 SC 55.
While special damages are specifically pleaded and proved, general damages are presumed by law to be the direct, natural and probable consequence of the act complained of, and generally incapable of substantial exact calculation. While in awarding general damages, a trial Judge must make his own assessment of the quantum of such damages, he should do so in the light of the evidence before him and not base his award on a speculative claim and scanty facts.
In contra-distinction to general damages, special damages must be strictly proved. Strict proof however, means no more than such proof as would readily lend itself to qualification and assessment. It is such proof that the law will not infer from the nature of the act but is exceptional in character. Special damages denote those pecuniary losses which have crystallized in terms of cash and value before trial. See Comet Shipping Agencies Nig. Ltd V Babbit (Nig.) Ltd (2001) FWLR (Pt. 40) 1630; Gari v. Seirafina Nig. Ltd (2008) ALL FWLR (Pt. 399) 434; Arabambi v Advance Beverages Industries Ltd (2005) ALL FWLR (Pt.295) 581 per Aloma Mukhtar, JSC, (as she then was).
First off, with regard to the award of N20,000,000.00 general damages, I am of the opinion that, based on the facts in evidence before the lower Court, it was wrong as it is contrary to the principle stated by Wali, JSC in Union Bank of Nig. Ltd V Odusote Bookstores Ltd (1995); (1995) 12 SCNJ 175; (1995) 9 NWLR
(Pt. 421) 586, thus:
“The award of general damages is improper where the quantum of loss is ascertainable.” PER SANKEY, J.C.A.
WHETHER OR NOT GENERAL DAMAGES WILL BE AWARDED WHERE QUANTUM OF LOSS IS ASCERTAINABLE
As afore-stated, it is a well settled principle of law that in the circumstance where the quantum of loss is evidently ascertainable, it would not be appropriate to award general damages. See SPDC (Nig.) Ltd V Ekwems (2008) FWLR (Pt.438) 292. PER SANKEY, J.C.A.
FACTORS TO BE CONSIDERED BEFORE THE APPELLATE COURT CAN INTERFERE WITH THE DECISION OF A TRIAL JUDGE
In the case of Nzeribe V Dave Engineering Co. Ltd (1994) 8 NWLR (pt.361) 124, the Supreme Court said as follows:
“The law is well settled that in order to justify interfering with any decision of a trial Judge on the amount of damages awarded, it is necessary for the appellate court to be convinced either:
(a) That the Judge acted upon some wrong principles of law, or
(b) That the amount awarded was so extremely high or very small as to make it in the judgment of the appellate court an entirely erroneous estimate of the damage to which the Plaintiff is entitled.”PER SANKEY, J.C.A.
JUMMAI HANNATU SANKEY, J.C.A. (Delivering the Leading Judgment): The Appellant, Savannah Sugar Company Ltd, entered into an agreement with the Respondent, Wabey Farms Ltd, on the 19th February, 1988 to take a sublease of 4000 hectares of its farmland for a period of twenty (20) years. Ingrained in the agreement were conditions for the Respondent Company to grow sugarcane on an increasing percentage of the land over a given period; as well as other conditions for sharing of the crop after harvest between the parties. The Respondent Company defaulted on the agreement, and the Appellant took over the farmland because of minimal performance on the part of the Plaintiff. However, following the intervention of the Bureau for Public enterprises in the affairs of the Respondent Company in the process of privatization, the Appellant Company was offered and it accepted the sum of N711, 000.00 in full and final settlement of all his outstanding liabilities with the Respondent. The Respondent Company, dissatisfied, however filed an action against the Appellant Company at the Adamawa State High Court claiming both special and general damages. When parties failed to resolve their dispute by arbitration, in line with the lease agreement, the matter proceeded to trial.
By a Writ of summons filed on the 7th August, 2002, but issued on the 15th November, 2002, the Respondent Company claimed for special and general damages. This was later amended by a Further Amended Statement of Claim dated 16th March, 2009 at pages 24-30 of the Record, and therein it claims thus:
1. “The sum of N22, 595, 000.00 being the total value of the investment as well as the estimated profit on the farmland developed for the production of sugar cane which was taken over by the Defendant on 2nd September, 2002.
2. The sum of N50, 000, 000.00 as general damages.
3. Any other relief(s) that the Hon. Court may deem fit to grant.”
By this Further Amended Statement of Claim, the Respondent Company adumbrated the details of his claim. The Appellant Company denied the claim and also filed a Further Amended Statement of defence on the 16th February, 2009 (as contained at pages 38-40 of the Record). During the trial, the Respondent called two witnesses while the Appellant Company called one witness, and between them, some exhibits were tendered. After the addresses of Counsel, the trial Court gave Judgment dismissing the Plaintiff’s claims for special damages on the grounds that the Respondent Company had woefully failed to prove same. The lower Court however awarded the Respondent general damages to the tune of N20, 000,000.00 (Twenty Million Naira Only).
Aggrieved by this decision, the Appellant Company filed its Notice of Appeal on 20th July, 2011, wherein it complained on five (5) grounds. The grounds of appeal, shorn of their particulars, are set out hereunder as follows:
Ground 1
The learned trial Court erred in law in awarding the sum of N20, 000, 000.00 on the basis of exhibit C3.
Ground 2
The learned trial Judge erred in law in awarding general damages against the defendant for wrongful termination of Exhibit C3 on account of loss of anticipated profit and physical development and machinery.
Ground 3
The learned trial Judge erred in law in granting general damages on contract after claim on the same issue which was dismissed by the Court as a head of Special damages.
Ground 4
The learned trial Judge erred in award of general damages when a plea of accord and satisfaction was made out by the Defendant.
Ground 5
The learned trial Judge erred in law when he held that the Defendant wrongfully terminated the contract between them and the plaintiff.
He thus prayed the Court to set aside the award of general damages in the sum of N20,000,000.00 made against the Appellant and sought an order dismissing the claim.
When the Appeal was called up for hearing on the 14th May, 2013, learned Counsel for both Appellant Company and the Respondent Company adopted their respective Briefs of argument, which had been duly filed and exchanged.
Upon a cursory inspection of the Brief of argument of the Appellant Company, It was discovered that page 4 of the Brief is missing. Thus, this Court was not availed of the Appellant Company’s issues for determination which, I presume, was contained in the missing page. Since this is a crucial portion of the Appellant Company’s Brief of argument, it is, stating it mildly, quite an unfortunate oversight. As a result, the Appellant Company’s Brief is defective and faulty. What is the legal consequence of such a Brief? The legal consequence was aptly put by Oputa, JSC in his usual characteristic and classical erudition in Obiora V. Osele (1939) 1 NWLR (Pt.97) 279 @ 300 thus:
“A bad, faulty and/or inelegant Brief will surely attract some adverse comments from the courts but it will be stretching the matter too far to regard such defective brief as no Brief. A faulty Brief is a Brief which is faulty. One cannot close one’s eyes to the fact of its existence.”
My noble lord continued as follows at page 303 of the Report:
“The aim of the whole exercise is to do justice between the parties by hearing their appeals on the merits in spite of any mistakes made by counsel in preparation and prosecution of the appeal.”
Therefore, since this Court is avowed to doing substantial justice, and in line with the decisions of the Apex Court and this Court on the subject, the Appellant Company’s Brief shall be given due consideration. See also Akpan V State (1992) 6 NWLR (Pt. 248) 439 @ 471 per Nnamaeka-Agu, JSC; Ebe V Nnamani (1997) 7 NWLR (Pt. 513) 479 per Salami, JCA. Counsel are however advised to take time to ensure that all processes filed before the Court are complete and comprehensive for a proper consideration of their Appeals. It smacks of carelessness and inattention, to say the least, for counsel to file incomplete Briefs to form part of Judges’ files for the deliberation of the Appeals before the Court. Be that as it may, I have looked at the issues formulated by the Respondent Company and I shall address the Appeal based on same as they also cover the complaints in the Appellant Company’s Grounds of Appeal. They are as follows:
1. Whether the High Court of justice of Adamawa State was right in awarding the sum of N20, 000, 000.00 as general damages to the Respondent for breach of contract.
2. Whether the High Court of Justice Adamawa State was right in awarding the sum of N20, 000, 000.00 to the Respondent when the Respondent had collected the sum of N711, 000.00 from the BPE who paid on behalf of the Appellant.
Since both issues are inter-related and one over-laps into the other, both issues shall be considered together.
Issue One: Whether the High Court of justice of Adamawa State was right in awarding the sum of N20, 000, 000,00 as general damages to the Respondent for breach of contract.
Learned Counsel for the Appellant Company, Mr. Idi Ali, submits that, whereas the learned trial Judge dismissed the claim for special damages by the Respondent on the ground that it has not been specifically proved and it ought to fail on the grounds of waiver, accord and satisfaction, he went on to award general damages to the tune of N20, 000, 000.00 on the ground that the Appellant Company breached the agreement. The general damages awarded by the lower Court were made on the consideration of anticipated profit, physical development on the land and the machinery used in such developments.
Counsel submits that where damages are granted at the discretion of the trial Court, the Court of Appeal would interfere with the award where the lower Court acted upon irrelevant consideration, where the Court did not take in to account relevant considerations, where the Court did not properly apply the law, and where the award of damages is excessive or contrary to law. Reliance is placed on UBA V Ogundokun (2011) ALL FWLR (Pt. 504) 1521 @ 1557; National Oil Marketing Co. Ltd V Adewusi (2009) ALL FWLR (Pt. 455) 1669 @ 1686.
Learned Counsel contends that the lower Court dismissed the claim of the Plaintiff for special damages on the grounds that it was not specifically pleaded and adequately proved. He argues that since the Court had dismissed the claims for loss of profit and development, it was not in a position to use the loss of profit and physical development and machinery as a basis for awarding a lump sum of N20, 000,000.00 as general damages. Counsel also submits that where the quantum of damages is ascertainable, such claims related to loss of earnings or profit or other item of special damages, it is wrong for a court to base an award on such items in general damages. He relies on Gari V Sefeirina Nig. Ltd (2008) ALL FWLR (Pt. 399) 434 @ 449; SPDC Nig. Ltd V Ekwems (2008) ALL FWLR (Pt. 438) 292 @ 323; National Oil V Adewusi (supra) @ 1686; & Aliyu V Dikko (2012) ALL FWLR (Pt. 632) 1714 @ 1743. He submits that the quantum of loss of the Respondent was ascertainable and verifiable by proof and as such, compensation cannot be awarded the Plaintiff except on the head of special damages. He relies on Comet Shipping Agencies Ltd V Babbitt Ltd (2001) FWLR (Pt. 40) 1630 @ 1645.
Counsel further refers to the testimony of the Managing Director of the Respondent Company at page 88 of the Records where he admitted that the Respondent Company did not develop the land as expected by the Exhibit C3. This, he submits, is an admission against interest and it vindicates the position of the Appellant Company that the contract was not performed. Counsel submits that an admission against interest is fatal to the case of the party making the admission, and for this, relies on: Dome V INEC (2012) LPELR-SC 35/2012; Odutola V Papersack Nig. Ltd (2007) ALL FWLR (Pt. 350) 1214 @ 1235; Osunbor V Oshiomole (2009) ALL FWLR (pt. 463) 1366 @ 1405.
Furthermore, learned Counsel submits that the learned trial Judge was in error when he held that the Defendant did not lead evidence that the Plaintiff was in breach of Exhibit C3. He referred to the evidence of the defence witnesses who testified that the Defendant failed to comply with Exhibit C3 whose terms are that the Respondent shall develop 2000 hectares within three (3) years, and the Respondent did not do so. He argues that damages in a contract are awarded to a party who is wronged and not to one who is in breach of contract.
Learned Counsel further argues that the award of general damages in a lump sum of N20, 000,000.00 is wrong because it was not within the contemplation of the parties. He submits that damages are awarded to restore parties to a position they would be if the breach had not been committed, i.e. restitutio in integrum, and not as a windfall, restitutio in opulentia. Reliance is placed on CBN v Beckit construction (2012) ALL FWLR (pt. 620) 1266 @ 1279. Thus, Counsel He relies on Effiong V Aissl (2012) ALL FWLR (pt. 614) 182 @ 190 to contend that the damages awarded by the trial Court was at large and not on the basis of legal evidence and so, ought to be set aside. He argues that since the award of general damages to the tune of N20, 000, 000.00 was based on wrong principles and in violation of the law on award of damages in matters of contract, it ought to be set aside. He therefore urged the Court to resolve issue one in favour of the Appellant Company.
In response to the Appellant Company’s arguments under this issue, learned Counsel for the Respondent Company, Mr. Yahuza Abdullahi, submits that the lower Court was right in awarding general damages to the Respondent Company. Counsel contends that the Respondent Company claimed inter alia at the lower court the sum of N50, 000,000.00 as general damages, and the Court awarded N20, 000,000.00 of the sum claimed. He argues that the Appellant wrongly repudiated the agreement despite the heavy investment of the Respondent Company towards the performance of the agreement as the development of land for the production of sugarcane is capital intensive. He relies on Adekunle Oloyede V Pior (2005) ALL FWLR (Pt. 279) 1277 @ 1280; General Oil Ltd V Agu (2005) ALL FWLR (Pt. 247) 1407 @ 1409; & Life Petroleum Nig. Ltd (2006) ALL FWLR (Pt. 343) 1761 @ 1765 to argue that in such a claim, the Court has a duty to put the party claiming in the position that will ameliorate the loss of that party.
Issue 2: Whether the High Court of Justice Adamawa State was right in awarding the sum of N20, 000, 000.00 to the Respondent when the Respondent had collected the sum of N711, 000.00 from the BPE who paid on behalf of the Appellant.
In respect of the second issue Mr. Idi Ali, learned Counsel for the Appellant Company, submits that the Respondent had, upon an advertisement by the Bureau for Public Enterprises, (henceforth referred to as BPE), submitted all its claims against the Appellant Company in respect of the contract. An agreement was then executed between the Respondent Company and the BPE. The document in this regard, Exhibit D, was tendered in evidence through the DW1 when he testified that the Respondent Company was paid all its liabilities against the Appellant Company by the BPE. He referred to paragraphs 12, 13 & 14 of the Further Amended Statement of defence at page 39 of the Records, where it was pleaded that the Plaintiff entered into an agreement, Exhibit D, with the BPE to receive 50% of its total outstanding liabilities in full and final satisfaction of all his outstanding claims against the Defendant. (Reference is made to page 56 of the Records). The Respondent Company did not deny these averments and so, learned Counsel argues that they are deemed admitted.
Counsel further submits that PW1 and PW2 in their testimonies at pages 78 & 88 of the Records, admit collecting the money as in the Exhibit D. Counsel therefore argues that, having agreed to receive and did receive money in full and final settlement of all its claim, the Respondent Company was estopped by waiver, accord and satisfaction from making and persisting with any claim against the Appellant Company. Counsel submits that the agreement covered the whole of the Appellant’s liability with the Respondent Company, and having received the benefit of the agreement, there was nothing left for the Respondent Company to pursue against the Appellant Company. He relies on Fagge V Tukur (2007) ALL FWLR (Pt. 387) 876 @ 898 & Osun State Government V Danlami (2007) ALL FWLR (Pt.365) 438 @ 468. He argues further that the learned trial Judge, having found as he did at pages 104-105 of the Records, that Exhibit D relates to all creditors, which includes the Appellant Company, it was wrong for him to go ahead and make an award of general damages on the basis that Exhibit D referred to specific damages. Counsel submits that the Respondent Company, by signing the Exhibit A, intentionally and voluntarily relinquished its right to make any claim on the subject of Exhibit D against the Appellant Company. Reliance is placed on Dragetanos Construction V Fab Madis Ventures Ltd (2012) ALL FWLR (Pt. 616) 441 @ 525; & AG Nassarawa V AG Plateau (2012) ALL FWLR (Pt. 630) 1262 @ 1282. Counsel submits that the Respondent Company is estopped by equity from pursuing any further claim from the Appellant Company, having signed an agreement to receive money in full and final settlement of its entire claim. He urged the Court to also resolve this issue in favour of the Appellant Company. He finally urged the Court to interfere and set aside the award of N20, 000, 000.00 as general damages.
In response to these arguments, Mr. Yahuza Abdullahi, learned Counsel for the Respondent Company, submits that it was the duty of the Appellant Company to harvest the sugarcane cultivated by the Respondent Company so that the Respondent Company would be able to re-plant sugarcane. He contends that, where the Appellant Company is unable to harvest the sugarcane of the Respondent Company, sometimes due to the problem of the Appellant’s machineries in the factory, the Appellant Company would pay what is known as ‘stood over payment’ for un-harvested sugarcane. He contends that the sum of N711, 000.00 paid by the BPE to the Respondent Company represented only payment for the ‘stood over’, i.e. payment for un-harvested sugarcane. Consequently, Counsel submits that the lower Court rightly awarded the sum of N20, 000,000.00 against the Appellant in favour of the Respondent Company, as the Appellant Company acted without any justification when it breached the agreement between the parties. He thus urged the Court to dismiss the Appeal.
In a brief reply on point of law, Mr. Idi Ali submits that the submission of the Appellant Company with regard to harvesting the sugarcane planted by the Respondent, has no source from the pleadings or evidence. He thus urged the Court to ignore same as submission of Counsel cannot replace evidence. He relies on Usman Dan Fodio University, Sokoto V Balogun (2006) ALL FWLR (Pt. 325) 166 @ 179.
Still on the issue of payment for ‘stood over’ sugarcane, Counsel contends that this was an item of special damage and same was not proved. He argues that the Appellant Company’s appeal is against the grant of general damages. The Respondent Company has not filed a Cross-Appeal or a Respondent’s Notice, and cannot therefore argue issue two (2) outside the grounds submitted by the Appellant. Counsel, for that reason, urged the Court to discountenance the Respondent Company’s arguments and to allow the Appeal.
RESOLUTION OF ISSUES
In deciding these two (2) issues, it is well to remind ourselves of the principles of law for the grant of damages in general, and general damages in particular. In contract, general damages are those damages which the law implies in every breach and every violation of a legal right. It is the loss which flows naturally from the defendant’s acts, and the quantum needs not be pleaded or proved as it is generally presumed by law. The manner in which general damages is quantified is by relying on what would be the opinion and judgment of a reasonable person in the circumstances of the case. See Osuji V Isiocha (1989)
3 NWLR (Pt. 111) 623 @ 635; Lar V Stirling Astaldi (1977) 11-12 SC 53 @ 62; Odumosu V ACB Ltd (1976) 11 SC 55.
While special damages are specifically pleaded and proved, general damages are presumed by law to be the direct, natural and probable consequence of the act complained of, and generally incapable of substantial exact calculation. While in awarding general damages, a trial Judge must make his own assessment of the quantum of such damages, he should do so in the light of the evidence before him and not base his award on a speculative claim and scanty facts.
In contra-distinction to general damages, special damages must be strictly proved. Strict proof however, means no more than such proof as would readily lend itself to qualification and assessment. It is such proof that the law will not infer from the nature of the act but is exceptional in character. Special damages denote those pecuniary losses which have crystallized in terms of cash and value before trial. See Comet Shipping Agencies Nig. Ltd V Babbit (Nig.) Ltd (2001) FWLR (Pt. 40) 1630; Gari v. Seirafina Nig. Ltd (2008) ALL FWLR (Pt. 399) 434; Arabambi v Advance Beverages Industries Ltd (2005) ALL FWLR (Pt.295) 581 per Aloma Mukhtar, JSC, (as she then was).
First off, with regard to the award of N20,000,000.00 general damages, I am of the opinion that, based on the facts in evidence before the lower Court, it was wrong as it is contrary to the principle stated by Wali, JSC in Union Bank of Nig. Ltd V Odusote Bookstores Ltd (1995); (1995) 12 SCNJ 175; (1995) 9 NWLR
(Pt. 421) 586, thus:
“The award of general damages is improper where the quantum of loss is ascertainable.”
It is awfully obvious that what the learned trial Judge tried to do in awarding the sum of N20, 000,000.00 is to compensate the Respondent Company for the perceived losses he had suffered with the termination of the contract on the ground of its non-performance by it (the Respondent Company).The losses the Respondent Company claimed to have suffered were clearly ascertainable, and it itemised them in great detail in its Further Amended Statement of Claim and evidence. Unfortunately, both pleadings and evidence did not go far enough to prove these losses, sufficient for the trial Court to award him special damages as claimed. It is therefore palpably wrong for the learned trial Judge to have taken into consideration matters which should be considered only in the award of special damages to grant him general damages. Consequently, the learned trial Judge erred in the award of general damages to the Respondent Company as same was based on wrong principles.
As afore-stated, it is a well settled principle of law that in the circumstance where the quantum of loss is evidently ascertainable, it would not be appropriate to award general damages. See SPDC (Nig.) Ltd V Ekwems (2008) FWLR (Pt.438) 292. Having due regard to the circumstances surrounding this case, vis-a -vis the printed record of appeal, it is obvious that the loss claimed to have been incurred by the Respondent Company as a result of the retrieval of the farmland from it by the Appellant Company, were items of special damage which the lower Court held the Respondent Company had been unable to prove. There is no appeal against that finding. Thus, the learned trial Judge erred in law when he proceeded to award the sum of N20,000,000.00, clearly as compensation, (and not as general damages, properly so called), to the Respondent Company.
In the case of Nzeribe V Dave Engineering Co. Ltd (1994) 8 NWLR (pt.361) 124, the Supreme Court said as follows:
“The law is well settled that in order to justify interfering with any decision of a trial Judge on the amount of damages awarded, it is necessary for the appellate court to be convinced either:
(a) That the Judge acted upon some wrong principles of law, or
(b) That the amount awarded was so extremely high or very small as to make it in the judgment of the appellate court an entirely erroneous estimate of the damage to which the Plaintiff is entitled.”
The distinction between special and general damages for the purpose of assessment of awards must always be borne in mind. The trial Court had held that the Plaintiff (now Respondent), failed to prove its entitlement to the special damages claimed. It surprisingly, however, went on to award the Plaintiff general damages in place of special damages not proved. If the trial Court had borne in mind the differences between those awards, it would not have fallen into that error. An appellate court will alter the award of general damages if they are shown to be manifestly high or manifestly too low or awarded on a wrong principle of law. It does appear to me that the award of general damages in this case was a way of compensating the Plaintiff for the alleged loss of expected profits and money spent on farm implements, machinery, construction of culverts, etc. This cannot be justified. It is wrong for the learned trial Judge to have taken into consideration, for the award of general damages, matters which he should consider in his award of special damages. The Plaintiff had his chance to prove his claim for special damages but he failed. He should not have been given compensation for items of special damage for which he had been unable to prove. Thus, the award of N20, 000, 000, 00 as general damages must be set aside.
The learned trial Judge, in his findings at pages 101, 105-106 of the Records, found that the Appellant Company was in breach of contract and so awarded the Respondent Company the sum of N20, 000,000.00 as general damages for the breach. The contract agreement between the parties was before the lower Court in evidence as Exhibit C3. On a close scrutiny of the pleadings of the Respondent Company, it is nowhere pleaded that the Appellant Company was in breach of contract. Secondly, the Respondent Company did not make any claim for a breach of contract. His claim was expressly for special damages of N22, 595, 000.00 on the one hand and general damages of N50, 000, 000.00 on the other hand. Besides which, as rightly submitted by learned Counsel for the Appellant Company, the PW2, the Respondent Company’s Managing Director, Alhaji Abubakar Bapetel Bakari, in his evidence under cross-examination, admitted that, although the Respondent Company was expected to develop 600 hectares of land in the first year of the agreement, it failed to do so. (See page 88 of the Record). This is an admission against interest, with its attendant consequence, which is that, it is fatal to the case of the party making the admission. See Dome V INEC (2012) LPER-SC 35/2012; Osunbor V Oshiomole (2009) ALL FWL (Pt. 453) 1366; Odutola v Papersack (Nig.) Ltd (2007) ALL FWLR (Pt. 350) 1214. It also vindicates the Appellant Company’s position that the contract was not performed.
The Exhibit C3, the sub-lease agreement itself, is very crucial to a determination of this issue. For purposes of clarity of argument therefore, I shall reproduce relevant portions of it hereunder:
“The SUB-LEASE made on the 19th February, 1988 between SAVANNAH SUGAR COMPANY LTD a limited liability Company incorporated in Nigeria … (hereinafter called the “Sub-lessor”) of one part and WABEY FARMS LTD a limited liability Agricultural Company incorporated in Nigeria … (hereinafter called the “sub-lessee”)…
WHEREAS this sub-lease Agreement is supplemental to the ANDARD (sic) CANE FARMING CONTRACT and the Sub-lessee has agreed to take on lease from the Sub-lessor ALL those parcels of land designated P1, P2 or any other area of the Estates for a term of (Twenty (20) years beginning on the date of the execution of (sic) presents at a yearly rent to be mutually agreed upon and subject to the various terms and conditions hereinafter… (sic)
THIS DEED WITNESSETH as follows:-
THE SUB-LESSEE HEREBY COVENANTS FOR ITSELF AND ITS ASSIGNS THE INTENT THAT THESE OBLIGATIONS SHALL CONTINUE THROUGHOUT THE TERM HEREBY GRANTED AS FOLLOWS…
(a) To take on lease the estates designated P1, P2 totalling 4000 hectares exclusively for the production of sugar cane with the initial plan of developing 2000 hectares without prejudice to an agreed practice of fallow or rotation where deemed necessary.
(b) To undertake the development of the Estates in phases as per its feasibility report in the order of 600 hectares in the first year: 1300 hectares second year and 1, 700 hectares the third year.
(c) To sell the cane or sucrose in the cane so produced to the SUB- LESSOR for milling at its factory site at a price to be mutually agreed by the parties and on annual basis.
(d)…
THE SUB-LESSOR HEREBY COVENANTS FOR ITSELF AND ASSIGNS WITH THE SUB-LESSEE AND ITS ASSIGNS AS FOLLOWS:
(a)…
(d) Shall purchase from the Sub-lessee sugar cane or sucrose in the cane produced on the estates at the dates specified in accordance with the terms of this agreement.
(f) (i) to pay the Sub-lessee the value of its cane or sucrose in the cane supplied within 45 days of delivery at the Sub-lessor’s mill less cost of services offered failure of which the Sub-lessee shall be compensated at the Central Bank of Nigeria’s rate of interest’E2’80?
4. IT IS HEREBY AGREED AND DECLARED BY PARTIES HEREUNTO AS FOLLOWS:-
(a) Lease of the P1, P2 estates to the Sub-lessee would be for an initial period of Twenty (20) years.”
(Underlining supplied for emphasis)
From the above it is evident that the Respondent Company itself admitted being in breach of the provisions of the agreement when it stated, both in its pleadings and evidence, that it only cultivated a maximum of 100 hectares from the date of the agreement in 1988 to the year 2002, (i.e. three (3) years), when the Appellant Company informed the Managing Director of the Respondent Company that all out-growers, (including the Respondent), should hand over their sugar cane farms to the Appellant Company. (See paragraph 23 of the Further Amended Statement of Claim at page 27 of the Record). This was in clear violation of paragraph 1 (b) of the agreement Exhibit C3, which stated that the Respondent Company was to undertake the development of the estates in phases as per its own feasibility report in the order of 600 hectares in the first year, 1300 hectares in the second year and 1,700 hectares in the third year. Instead, within a period of three (3) years, the Respondent Company only managed to cultivate a measly and insubstantial self-confessed 100 hectares, instead of 1,700 hectares as stipulated by the Exhibit C3. If this is not in breach of the contract, I don’t know how else to describe it.
On the matter of the breach, by the pleadings and evidence before the lower Court, the Respondent Company was expected to work the land under a sublease for a period of twenty (20) years. Within this period, the Appellant had set specific targets which the Respondent had agreed to, i.e. that the Respondent Company was to undertake the development of the estates in phases, as per its feasibility report, in the order of 600 hectares in the first year, 1300 hectares in the second year and 1700 hectares in the third year.
However, within the first four years, (out of the twenty (20) year period), the Respondent Company had only succeeded in cultivating an insignificant area of 100 hectares. It is therefore no wonder that it was unable to establish that it had incurred a loss of N22, 595,00, which it claimed it suffered, as special damages. No specific pleadings to that effect, receipts or other evidence was offered in substantiation of that head of claim, and the lower Court was obliged to dismiss it unhesitatingly. The lower Court however fell into palpable error when it proceeded to award general damages for the breach of contract. This was not even part of the Respondent Company’s claim at the lower Court and thus it could not have awarded the Respondent Company what it did not claim. It was only made a part of the address by Counsel to the Respondent Company. It is however trite that the address of Counsel, no matter how brilliant cannot take the place of pleadings and/or evidence.
Thereafter, when the Bureau for Public Enterprises took over the Appellant Company with a view to privatising same, it approached the Respondent with an offer to pay off the liabilities of the Appellant. In response, the Respondent Company stated in its letter to BPE on 20th October, 2002 as follows:
“Submission of claims of Wabey Farms Ltd against Savannah Sugar Co. Ltd Numan Following your advertisement in the Weekly Trust of October 25 – 31st, 2002, we hereby submit our claims against Savannah Sugar Co. Ltd for sugar cane produced and our investments on our sub-lease agreements.” See page 58 of the Record.
(Underlining supplied for emphasis)
The computation of the sugar cane produced and the Respondent Company’s investments on the land was totalled on the next page of the letter at N711, 923.00, less N200, 000.00 advance collected from the Appellant Company in February, 2002. Pursuant to this, the BPE signed an agreement for the payment of the Respondent Company’s claims against the Appellant Company. It is Exhibit D before the trial Court, and it states inter alia as follows at pages 56-57 of the Record:
“THIS AGREEMENT (hereinafter called the “agreement”) is made on the 9th day of June, 2003.
BETWEEN
BUREAU OF PUBLIC ENTERPRISES… (Hereinafter referred to as BPE…)… of the one part
AND
CREDITOR TO SAVANNAH SUGAR COMPANY LIMITED (SSCL), NUMAN hereinafter referred to as the “Creditor”… of the other part.
WHEAREAS:
1. The National Council on Privatisation INCP) the apex policy making body on privatisation has approved the payment of 50% of claims across the board to all creditors as regard Savannah Sugar Company Ltd’s (SSCL) indebtedness.
2. The BPE is desirous of effecting the payment of the percentage mentioned above to each and every creditor.
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. That you will be paid 50% of your total outstanding claim.
2. That this payment shall serve as full and final settlement of all your outstanding claim against Savannah Sugar Company Limited (SSCL)
IN WITNESS WHEREOF, the party have read and understood the content of this agreement before appending his signature the day and year first above written.
NAME … ABDULLAHI BAKARI (WABEY FARMS LTD)
SIGNATURE … (signed)
DATE … 10-03-04
(Underlining supplied for emphasis)
Hence the Respondent Company, by this agreement, voluntarily relinquished whatever other claims it had against the Appellant Company.
In its Judgment at pages 104-105 of the Record, the lower Court rightly found inter alia as follows:
‘lt is therefore my view that this claim of N22, 595, 000 as special damages fails on ground that it has not been specifically proved.
Still on this claim of special damages of N22, 595, 000 by the plaintiff against the defendant assuming the plaintiff has made out the claim, still it ought to fail; on the defence of waiver, accord and satisfaction pleaded by defendant in the statement of defence.”
He rightly relied on the case of Punamchard V Temple (1911) 2 KB 330 where it was held that there may be accord and satisfaction where a creditor voluntarily agrees to accept a lesser sum in satisfaction and the debtor acts upon that accord by paying the lesser sum and the creditor accepts same. In such a case, the creditor would not be entitled to any balance that may be outstanding. Having thus found, it is difficult to understand the summersault in the latter part of the Judgment in the award of the manifestly high sum of N20, 000, 000.00 as general damages to the Respondent Company.
Even if, for purposes of argument, it is agreed that, by taking over the lease, the Appellant Company was in breach of the agreement,
it is firmly settled that, in a claim for damages for breach of contract, the court is concerned only with damages which are the natural and probable consequences of the breach or damages within the contemplation of the parties at the time of the contract. See the case of Mobil Oil Nig. Ltd V Akinfosile (1969) 1 NMLR 127. However, in such a claim the court must be careful not to compensate a party twice for the same wrong. By the law against double compensation, a party who has been fully compensated under one head of damages for a particular injury cannot be awarded damages in respect of the same injury under another head. See the cases of Artra Industries Nig. Ltd V Nigerian Bank for Commerce & Industry (1998) 3 SCNJ 97 @ 130; Imo Concord Hotel Ltd V Hon. Justice Anya (1992) 2 NWLR (Pt.234) 201.
In this case, the Respondent Company, in the first instance, had accepted payment from the BPE as full and final settlement of all its outstanding claims against Savannah Sugar Company Limited (SSCL), the Appellant herein, therefore activating the defence of waiver, accord and satisfaction, which was accepted by the lower Court. Not satisfied with that, the parties approached arbitration, in line with the arbitration clause in its agreement. When that too failed to broker a truce, the Respondent Company again approached the Adamawa State High Court seeking both special and general damages against the Appellant. There also, being unable to prove its claim for special damages in “the sum of N22, 595,000.00 being the total value of the investment as well as the estimated profit on the farm land developed for the production of sugar cane which was taken over by the defendant..”, as claimed, the lower Court, in an un-warranted show of magnanimity, awarded the Respondent Company the sum of N20, 000,000.00 in general damages. There are no parameters to show what guided the learned trial Judge and how it arrived at such an outrageously high figure in making its award. Can this be said to have been within the contemplation of the parties at the time of the contract? I think not. In the words of the learned trial Judge in his Judgment at page 108 of the Record, this was the rational for the award:
“After taking into account the term of the agreement, the period it was revoked by the defendant the anticipated profit and after considering the physical developments on the land and the machinery used in such developments. I am of the considered view that plaintiff is entitled to N20, 000, 000 as general damages from the defendant for wrongful termination of exhibit C3.”
(Underlining supplied for emphasis)
From the above quote, this award was clearly meant to serve as compensation to the Respondent Company which had been unable to prove its claim for special damages by any credible evidence. That however is not the purpose for an award of general damages. The lower Court had earlier found as a fact that the Respondent Company had been unable to prove its claim in respect of its investments on the farmland, such as the infrastructural developments on the land. (See pages 102-104 of the Record). It is therefore startling that the learned trial Judge would do a summersault and award the Respondent Company general damages for the same items of special damage he had earlier on held had not been proved. This is not acceptable. This Court will therefore interfere with such an award. Accordingly, it has to be set aside. It is consequently for these reasons that I resolve both issues in favour of the Appellant.
In the result, I find the Appeal pregnant with merit. It is allowed. The Judgment of the High Court of Adamawa State delivered by Nathan, J. on the 13th day of June, 2011 is hereby set aside, as is the award of Twenty Million Naira (N20, 000,000.00) in general damages made to the Respondent Company. Parties are ordered to bear their respective costs.
SOTONYE DENTON WEST, JCA: I agree.
IGNATIUS IGWE AGUBE, JCA: I have been privileged to read before now the well articulated and comprehensive lead Judgment of my learned brother, J. H. Sankey, JCA; and am of the candid view that my Lord has admirably and succinctly dealt with the issues that called for determination in this Appeal and I ought not have anything to add to the well scripted, expository and articulate Judgment and the reasons behind his conclusion that the Appeal is meritorious.
I only wish by way of emphasis to state that where, by the agreement made on the 9th of June, 2003 between the Bureau of Public Enterprises and the Respondent as creditors to the Appellant, the Respondent covenanted that it would be paid 50% of its total outstanding claim and that the payment would serve as full and final settlement of all the Respondent’s outstanding claim against the Appellant; the Respondent is bound by the terms of that covenant and there was no room for reneging from same, particularly, when the Respondent had collected the said sum. The law is trite on a plethora of authorities that parties are bound by the conditions and terms of a contract the voluntarily entered into see Northern Assurance Co. Ltd. V. Wuraola (1969) NSCC 22; Union Bank of Nig. Ltd. V. Ozigi (1991) 12 NWLR (pt. 176) 677, and Nika Fishing Co. Ltd. V. Lavina Corporation (2008) 16 NWLR (pt. 1114) 509 at 542 para. F.
In Idoniboye Obu V. NNPC (2003) 4 MJSC 131 at 168 paras. F-G, per Tobi, JSC; emphasising on the bindingness of contractual terms of parties posited thus: “A party who has opened his heart, mind and eyes to enter into an agreement is clearly bound by the terms of the agreement and he cannot seek for better terms midstream or when the agreement is a subject of litigation, when things are no longer at ease.
Although a party may seek for better terms, the Court is bound by the original terms of the agreement and will interpret them in the interest of justice.”
It was therefore inequitable for the Respondent to go to Court to collect damages after he had been completely paid whatever liability he incurred as a result of the acts of the Appellant. The Court below having found out that the Respondent was unable to prove its claim in respect of its investments on the farmland and infrastructural developments on the land of the Appellant, the appropriate order to be made was to dismiss the Respondents case in its entirety. To have awarded the Respondent (N20, 000,000.00) Twenty Million Naira only, the learned trial Judge transgressed one of the cardinal rules of the law of contract which is that parties and parties alone retain the right and freedom to determine the terms and conditions of their agreement and no other person not even the Court can purport to determine the terms of a contract or contractual agreement between the parties.
The duty of the Court which includes the High Court of Adamawa State per Nathan J. (as he then was), is to strictly interpret the terms of the agreement in accordance with its wordings and clear intendment of the parties. Furthermore, the law is settled on motley authorities that the Courts have no duty to rewrite the terms of agreement for the parties or even venture to write fresh agreements for them. By awarding (N20,000,000.00) Twenty Million Naira, the Court rewrote a fresh agreement on terms and conditions other than the express intention of the parties as was encapsulated in the agreement between the parties dated 9th day of June, 2003. See per Tobi, JSC; Nika Fishing Co. Ltd. v. Lavina Corporation (2008) 16 NWLR (pt. 1114) 509 at 543 paras. C-D; Nimanteks Associates V. Marco Construction Co. Ltd. (1991) 2 NWLR (pt. 174) at 411 and African Re-insurance Corporation V. Fantaye (1986) 1 NWLR (pt. 14) 133.
For the above reasons and the more elaborate reasons advanced in the lead Judgment of my noble Lord Sankey, J.C.A; I also hold that the Appeal is meritorious and is accordingly allowed. The Judgment of the lower court awarding a whopping sum of N20,000,000.00 as general damages was completely uncalled for and same is accordingly set aside. I also abide by the order as to costs.
Appearances
Idi Ali Esq.For Appellant
AND
Yahuza Abdullahi Esq.For Respondent
