STEPHENSON STANDARD COMPANY LIMITED v. YIFA NIGERIA LIMITED (2012)

STEPHENSON STANDARD COMPANY LIMITED v. YIFA NIGERIA LIMITED

(2012)LCN/5534(CA)

In The Court of Appeal of Nigeria

On Wednesday, the 4th day of July, 2012

CA/L/297/2007

RATIO

DAMAGES: ESSENCE OF DAMAGES

The essence of damages in breach of contract cases is based in restitutio in integrum, that is the amount of damages to be paid to the party wronged by the breach is the amount of damages necessary to put the party wronged and aggrieved in the position he would have been had there been no breach. In Kopek Const. Ltd v. Ekisola (2010) 3 NWLR Pt. 1182 Pg. 618 at 660, the Supreme Court held per Muhammad JSC as follows:

“”Damage”, in law generally, refers to a disadvantage which is suffered by a person as a result of the act or default of another for which a legal right to recompense accrues. Damages are thus, the pecuniary recompense given by process of law to a person for the actionable wrong that another has done to him.”

See also X.S. Nig. Ltd v. Taisei (W.A.) Ltd (2006) 15 NWLR Pt. 1003 Pg. 533; UBA Plc v. BTL Ind. Ltd (2006) 19 NWLR Pt. 1013 Pg. 61 PER HELEN MORONKEJI OGUNWUMIJU, J.C.A.

DAMAGES: PRINCIPLES GUIDING THE CLAIM FOR DAMAGES FOR BREACH OF CONTRACT

“”General” damages are such that the law will presume to be direct and natural or probable consequence of the act complained of. See: Kalu & Anor v. Mbuko (1988) 3 NWLR (Pt. 80) 86 at page 98; Shell Petroleum Development Company Nig. Ltd v. Teibo VII & Ors. (1996) 4 NWLR (Pt. 445) 657 at 682. “special damages” are those damages which are actual but not the necessary result of the injury complained of and which in fact, follow as a natural and proximate consequence in the particular case, that is, by reason of special circumstances and conditions…special damages are such as the law will not infer from the nature of the fact. They do not follow in ordinary course. They are exceptional in their character and they must be claimed specifically and proved strictly”

See also Johnson v. Mobil Prod. (Nig.) Unltd (2010) 7 NWLR Pt. 1194 Pg. 462; X.S. Nig. Ltd v. Taisei (W.A.) Ltd supra, MCC (Nig.) Ltd v. Igbinoba (2010) 15 NWLR Pt. 1215 Pg. 99; Adim v. NBC Ltd (2010) 9 NWLR Pt. 1200 Pg. 543; A.M. Co (Nig.) Ltd v. Volkswagen (Nig) Ltd (2010) 7 NWLR Pt. 1192 Pg. 97 PER HELEN MORONKEJI OGUNWUMIJU, J.C.A.

EVIDENCE: WHAT CONSTITUTES STRICT PROOF

EVIDENCE: BURDEN OF PROVING SPECIAL DAMAGES

“It is a settled principle of law further that the burden of proving amount of loss sustained for claim of a special damage rests on the plaintiff…It is also the responsibility of the plaintiff at the trial to give sufficient particulars of his claim for special damages for purpose of enabling the court to calculate.” PER HELEN MORONKEJI OGUNWUMIJU, J.C.A.

JUSTICES

HELEN MORONKEJI OGUNWUMIJU Justice of The Court of Appeal of Nigeria

SIDI DAUDA BAGE Justice of The Court of Appeal of Nigeria

MUHAMMED AMBI-USI DANJUMA Justice of The Court of Appeal of Nigeria

Between

STEPHENSON STANDARD CO. LTD Appellant(s)

AND

YIFA NIGERIA LIMITED Respondent(s)

HELEN MORONKEJI OGUNWUMIJU, J.C.A. (Delivering the Leading Judgment): This is an appeal against the judgment of Hon. Justice Oyefeso sitting at the High Court of Lagos, Lagos Division, delivered on the 16th of March, 2006. The facts that led to this appeal are as follows:
The Claimant’s, now the Appellant’s case at the trial court was that it had entered into a contract of sale of insulation tapes with the Defendant, now the Respondent. The tapes were bought by sample by the Appellant from the Respondent and when the goods were delivered, they did not conform with the sample. The parties then agreed in writing to explore the commercial possibilities of the product and that if the exercise failed, the Appellant would recover its money from the Respondent and return the tapes to them. However, when the exercise failed, the Respondent refused to refund the Appellant’s money. The Appellant then instituted an action at the trial court against the Respondent.
Issues were joined. The Respondent claimed that it acted as an agent of a foreign principal. The trial court found in favour of the Appellant on all issues but postponed its awards which it made contingent upon the Appellant returning the unsold goods/tapes to the Respondent in good condition. The Appellant, being dissatisfied with this judgment has brought this appeal.
The Appellant brought an application before the court dated the 16th day of September, 2009 and filed on the 18th of September, 2009 praying this court for an Order that the Appeal be heard on the Appellant’s brief already filed and served on the Respondent. The Application was granted on the 21st of April, 2011. To all intents and purposes the Respondent is unable and unwilling to contest this appeal. The Appellant’s brief was dated 23rd of May, 2007 and filed on the same day.
Appellant’s counsel, James C. Ezike Esq. identified three issues for determination as follows:
1. In the circumstances of this case, was the trial court right to suo motu raise and determine that the refund claimed by the Claimant should be made contingent upon the claimant returning the dis-conform bulk of the goods to the Defendant in good condition or at all?
2. Whether the trial court was right to refuse to award the profit claimed by the Claimant even after finding that “the Claimnt testified that it would have made 100% profit on the transaction?
3. Whether the trial court was right to postpone the payments of interest till the return of the said goods to the Defendant?
Issues 1 and 3 address the same issue and as such I have decided to consolidate them. There are therefore only two issues for determination in this Appeal, they are as follows:
1. Whether the trial court was right in the circumstances of this case to hold that the refund claimed by the Appellant and the interest on same should be paid after the Appellant has returned the ‘goods not sold’ to the Respondent in good condition?
2. Whether the trial court was right to refuse to award the profit claimed by the Appellant?
ISSUE ONE
Counsel to the Appellant argued that the trial court having rightly found that the Respondent was in breach of the agreement between the parties, was wrong to have held that the refund of the Appellant’s money paid for the insulation tape and interest thereon should be made contingent upon the return of the remaining tapes in good condition as this was not an issue canvassed before the court at all. Counsel argued that this issue was raised suo motu by the trial court without inviting the views of the parties on this point thus violating the Appellant’s constitutional right to fair hearing. Counsel cited Nwokoro v. Onuma (1990) 3 NWLR Pt. 136 Pg. 22 at 33; Adegoke vs. Adibi (1992) 5 NWLR Pt. 242 Pg. 410; Ejowhomu v. Edok-Eter Mandilas Ltd (1986) 5 NWLR Pt. 39 Pg. 1; Ajao v. Ashiru (1973) 11 SC 23; Kuti v. Balogun (1978) 1 SC 53 at pg. 60.
Counsel submitted that since there was no counter-claim by the Respondent demanding the exchange or return of the goods in question as a condition precedent or subsequent to its refund of the Appellant’s money, the trial court erroneously made a new case for the Respondent different from that made by it. Counsel cited Aseimo v. Amos (1975) 2 SC 57; Olatunji v. Adisa (1995) 2 NWLR Pt. 376 Pg. 167; Ota Sons Ltd v. Idris (1999) 6 NWLR Pt. 606 Pg. 330; Ekpenyong v. Nnyong (1975) 2 SC 71 at Pg. 80-81.
Counsel claimed that the decision was perverse because the written Agreement between the parties states clearly that it is the responsibility of the Respondent as Party B to pay for the remaining goods in good condition and to collect the goods from the Appellant as Party A. Counsel cited Atolagbe v. Shorun (1985) 4 S.C. (Pt. 1) 250 at page 282.
Counsel also submitted that the Appellant had rejected the goods upon arrival before the parties agreed to explore its commercial possibilities. After the exercise failed, counsel submitted that the Appellant subsequently rejected the goods again verbally and by its solicitor’s letter dated 8th November 2001-Exhibit P14. Counsel submitted that the Respondent resiled from all previous agreements and categorically rejected the Claimant’s invitation to collect the goods back. Counsel then argued that the trial court had imposed on the Appellant the obligation to return the goods without imposing a corresponding obligation on the Respondent to accept the goods. Counsel submitted that the judgment of the trial court should not be made in vain as all post judgment efforts to return the goods have failed for lack of co-operation by the Defendant and its solicitors.
Counsel further argued that though Order 35 Rule 4 of the High Court of Lagos State (Civil Procedure Rules) 2004 allows the court to award post judgment interest and order the time in which it should be paid, it however does not give the court the right to postpone payment of the said interest. Counsel urged this court to reverse the decision of the trial court and award the relief claimed by the Appellant without any condition precedent.
The Appellant’s case at the trial was that the Respondent had breached the contract entered into by both parties. It should be noted at this stage, that there were two contracts between the parties. Exhibit P1 is the contract No.YNL010216, the initial contract of sale entered into by the parties for the supply of 440, 000 rolls of PVC Insulation tapes, “Globe Brand”. Exhibit P3 is the agreement entered into by the Appellant and the Respondent signed by the Appellant and one ‘Melody’, an official of the Respondent Company on behalf of the Respondent. The trial court found, and this is not in issue in this court, that Exhibit P3 was made to salvage the breach of Exhibit P1 by the Respondent. The Appellant had alleged breach of both Contracts and it is apparent from the proceedings at the trial court that the reliefs sought were based on this alleged breach of contract.
Let us consider the reliefs claimed by the Appellant at the trial court and the Orders made by the court. At page 2 of the Record of Appeal, the Appellant’s claims as endorsed on the writ of summons were for the following:
1. The sum of $31, 680.00 (thirty one thousand, six hundred and eighty United States Dollars) or its naira equivalent being cost of 440, 000 rolls of PVC Insulation tapes “Globe Brand”.
2. The sum of $2,800.00 or its naira equivalent being cost of sea freighting the said tapes.
3. The sum of $31,680.00 or its naira equivalent, being 100% profits plaintiff would have otherwise made on the said tapes
4. Interest on the sum of $34,480.00 or its Naira equivalent plus the total profits of $31,680.00 or its naira equivalent at the rate of 21% per annum from October 2001 until judgment and thereafter at the rate of 10% until full liquidation thereof.
5. The sum of N500,000 being general damages for breach of contract.
The questions before the trial court was whether there was a breach of Exhibit P1 and whether the Respondent was bound by Exhibit P3.The trial court had found that the Respondent had breached P1 and is indeed bound by the terms of Exhibit P3.at Pg. 155 of the record the learned trial judge held thus:
“From a comparison of the two exhibits, it is clear that Exhibits P5, which was supplied, is not the same in terms of quality, labels and packaging as Exhibit P4 that the Claimant ordered.  I cannot therefore hold that the Defendant performed its obligation in accordance with the terms of the contract between the parties dated 16th February 2000.  I find that there was a breach of the contract between the parties as what was ordered is not what was supplied and I so hold.”
Having held thus, the trial court went ahead to enforce the terms of Exhibit P3. The content of the contract is hereby reproduced:
PARTY A                      PARTY B
YIFA NIG. LTD                   STEPHENSON STANDARD LTD
33A Kofo Abayomi Street                143-145 Broad Street, Lagos
Victoria Island, Lagos
AGREEMENT
THROUGH FRIENDLY DISCUSSION WITH COMMON UNDERSTANDING TO CONTRACT NO.YNL 010216, BOTH PARTIES AGREED THAT THE CARGO OF INSULATION TAPES SUPPLIED FROM PARTY A TO PARTY B ARE OF SATISFACTORY QUALITY BUT THE PACKAGING OF INDIVIDUAL ROLL SHOULD NOT BE SHRINK PACKAGE INSTEAD OF THE WAY PACKED AS PARTY B’S SAMPLE. IN CASE THE PARTY B COULD NOT SELL THE GOODS IN TWO MONTHS TIME AFTER CLEAR THE GOODS OUT OF CUSTOMS ONLY DUE TO THIS REASON, THE PARTY A SHOULD PAY TO THE PARTY B FOR THE REMAINING QUANTITY IN GOOD CONDITION AND COLLECT THE GOODS FROM PARTY B.
At Pg. 160 the learned trial judge held thus:
“The agreement states that Claimant is to return the goods in good condition to the Defendant and the Defendant is to pay for the goods returned in good condition. To give effect to that agreement therefore, I hereby order the Claimant to return the goods in good condition and the Defendant to pay for those goods so returned in good condition as agreed by the parties.”
From the above, the parties had obviously agreed that the Respondent would return the Appellant’s money and collect the unsold goods back in good condition. I cannot attach any credit to the Appellant’s argument that the trial court made the Order suo motu when all it did was enforce the terms of the contract sought to be enforced by the Appellant.
The argument of the learned Appellant’s counsel that the decision was perverse because the written Agreement between the parties states clearly that it is the responsibility of the Respondent as Party B to pay for the remaining goods in good condition and to collect the goods from the Appellant is of no moment. There is no difference between 6 and half a dozen. The Order was for the unsold goods to be returned to the Respondent in good condition.
The orders the leaned trial judge made stands to reason and are just and proper in the circumstances of this case. I fail to see the rationale or wisdom behind this appeal; even a lay man could have answered the question posed by this appeal.
The Appellant’s counsel also contended that all their efforts to return the goods to the Respondent post judgment have failed till date. This cannot be a matter for this court to examine. This has to do with the enforcement of the judgment being appealed against. Any problems with enforcement of a judgment must necessarily go to the court which gave it and cannot be a matter for the appellate court. This argument is of no moment.
This issue is resolved against the Appellant.
ISSUE TWO
Appellant’s counsel argued that the trial court was wrong in refusing to award the 100% profit loss which the Appellant claimed. Counsel submitted that the grounds of refusing the claim are misconceived and run counter to well-established principles of law. Counsel argued that no authority was cited by the trial court for the view that a party admittedly in breach of a contract would not be liable in damages for its breach of contract simply because a court of law gratuitously asked the innocent party to return the goods to the party in breach. Counsel further contended that the consequence for breach of contract is payment of damages to the injured party. He cited Omega Bank Nigeria Plc v. OBC Ltd (2005) 8 NWLR Pt. 928 Pg. 549 at 576; Ukoha v. Okoronkwo (1972) 5 SC 260 at 270, 272; Adel Boshali v. Allied Commercial Exporters Limited (1961) All NLR 917
Counsel also argued that the other reason the court gave for refusing to grant 100% profit loss was perverse as the evidence given by the Appellant as to the its loss, being largely uncontroverted, should have been enough to ground the grant. Counsel cited Adel Boshali v. Allied Commercial Exporters, supra. Counsel submitted that the decision of the trial court was perverse and occasioned great miscarriage of justice and as such should be set aside. Counsel cited Obembe vs. Wemabod (1977) 5 SC 115; Incar v. Adegboye (1985) 2 NWLR Pt. 8 Pg. 453 at 460
The learned trial judge held on Pg. 160 of the record as follows:
“Claim (c) for profits cannot arise as the goods have been ordered to be returned and a refund made to the Claimant. Furthermore, although the Claimant testified that he would have made 100% profits, no concrete evidence was put before the court to back up its assertion. I therefore hold that the Claimant is not entitled to 100% profits claimed. This claim fails and is hereby dismissed.”
There are a number of remedies available for breach of contract; the most common being the award of damages. The essence of damages in breach of contract cases is based in restitutio in integrum, that is the amount of damages to be paid to the party wronged by the breach is the amount of damages necessary to put the party wronged and aggrieved in the position he would have been had there been no breach.   In Kopek Const. Ltd v. Ekisola (2010) 3 NWLR Pt. 1182 Pg. 618 at 660, the Supreme Court held per Muhammad JSC as follows:
“”Damage”, in law generally, refers to a disadvantage which is suffered by a person as a result of the act or default of another for which a legal right to recompense accrues. Damages are thus, the pecuniary recompense given by process of law to a person for the actionable wrong that another has done to him.”
See also X.S. Nig. Ltd v. Taisei (W.A.) Ltd (2006) 15 NWLR Pt. 1003 Pg. 533; UBA Plc v. BTL Ind. Ltd (2006) 19 NWLR Pt. 1013 Pg. 61

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 occasioned by the party in default at the time of the contract. These are general damages. However, where a plaintiff decided to go further to claim special damages, such must be specifically pleaded and proved. Special damages should be specifically pleaded and strictly proved because of its exceptional nature. A plaintiff claiming special damages has an obligation to plead and particularize any item of damage and give precise calculation of his loss. Relevant guiding principles of law on the pleading and establishment of special damages have been laid down in a number of authorities. In Kopek Const. Ltd v. Ekisola supra also at Pg. 660, the Supreme Court held thus:
“”General” damages are such that the law will presume to be direct and natural or probable consequence of the act complained of. See: Kalu & Anor v. Mbuko (1988) 3 NWLR (Pt. 80) 86 at page 98; Shell Petroleum Development Company Nig. Ltd v. Teibo VII & Ors. (1996) 4 NWLR (Pt. 445) 657 at 682. “special damages” are those damages which are actual but not the necessary result of the injury complained of and which in fact, follow as a natural and proximate consequence in the particular case, that is, by reason of special circumstances and conditions…special damages are such as the law will not infer from the nature of the fact. They do not follow in ordinary course. They are exceptional in their character and they must be claimed specifically and proved strictly”
See also Johnson v. Mobil Prod. (Nig.) Unltd (2010) 7 NWLR Pt. 1194 Pg. 462; X.S. Nig. Ltd v. Taisei (W.A.) Ltd supra, MCC (Nig.) Ltd v. Igbinoba (2010) 15 NWLR Pt. 1215 Pg. 99; Adim v. NBC Ltd (2010) 9 NWLR Pt. 1200 Pg. 543; A.M. Co (Nig.) Ltd v. Volkswagen (Nig) Ltd (2010) 7 NWLR Pt. 1192 Pg. 97
The Appellant in its relief 3 as endorsed on its writ of summons at the trial court had claimed 100% profit it would have otherwise made. Loss of profit is a specie of special damages which the law requires must be specifically pleaded and proved strictly by evidence of particular losses which are known and accurately measured before the trial court. In other words, loss of profit as an item of special damages must be adequately particularized in the pleading and also be proved by cogent and credible evidence at the trial. See X.S. Nig. Ltd v. Taisei (W.A.) Ltd supra; CAP Plc v. Vital Inv. Ltd (2006) 6 NWLR Pt. 976 Pg. 220.

The term ‘strict proof’ consists of evidence which are exactly known or accurately measured before the trial. It implies that the plaintiff who has the advantage of being able to base his claim upon a precise calculation must give the defendant access to the facts which make such calculation possible.
Let us consider the facts of the case. The Appellant had claimed that they would have been entitled to over a hundred percent profit had the Respondent not breached their initial agreement. At page 9 of the records in the Appellant’s Statement of Claim at the trial court, the Appellant had stated in paragraph 16 as follows:
“16. As a result of the Defendant’s breach of contract the plaintiff lost the 100% profit, which it would have made on the said tapes. The Plaintiff shall rely on letters and local purchase orders from its customers at the trial”
The Appellant had stated that it would rely on letters and local purchase orders from its customers. However, during the course of trial, there was no evidence that any effort was made by the Appellant to relate these letters to the claim for 100% profit. It is not enough for the Claimant to state that it is entitled to a particular sum of money, he must give concrete and accurate evidence of such sum. Learned Appellant’s counsel had argued that since its claim was uncontroverted, the trial court should have taken its word at face value. This, in my humble opinion stems from a misconception of the law as it relates to special damages.

The burden of proving that a party is entitled to special damages rests clearly on the party claiming it and the court cannot base an award of special damages on the weakness of the Defendant’s case. A plaintiff’s case must succeed on its own strength and not on the weakness of the Defendant’s case. In N.M.A. v. M.M.A. Inc (2010) 4 NWLR Pt. 1185 Pg. 613 at Pg. 652, it was held thus:
“It is a settled principle of law further that the burden of proving amount of loss sustained for claim of a special damage rests on the plaintiff…It is also the responsibility of the plaintiff at the trial to give sufficient particulars of his claim for special damages for purpose of enabling the court to calculate.”
I am of the view that the Appellant did not prove special damages of his loss of 100% profit as claimed by him. I cannot find any fault with the reasoning of the learned trial judge. I resolve this issue against the Appellant. I dismiss this appeal and make no order as to costs.

SIDI DAUDA BAGE, J.C.A.: I have had the opportunity of reading before now the judgment just delivered by my learned brother OGUNWUMIJU, JCA. I agree completely with the reasoning and conclusion of my learned brother and to also state that it is true that to prove that a party is entitled to special damages rests clearly on the party claiming it and the court cannot base an award of special damages on the weakness of the defendant’s case, a plaintiff’s case must succeed on its own strength and not on the weakness of the defendant’s case.

M. A DANJUMA, J.C.A.: I have read in draft the lead judgment of my learned brother, H. M. OGUNWUMIJU, JCA just delivered. I agree that the appeal has not merit and should be dismissed.
The judgment appealed against is in tanderm with the express agreement of the parties which was strictly enforced by the trial judge to its purport and intents.
In civil cases, a party wins or succeeds on the strength of his own case and not on the weakness of the defendant’s case as after all a defendant is not bound to call any evidence. That that is not done, does not make an otherwise unmeritorious claim one with merit, where there is no proof in respect thereto.
See CA/L/750/06 – HALIM MOHAMMED VS. CAR LINK NIGERIA LIMITED. (The unreported decision of this court delivered on 29/6/12.
Accordingly, I respectfully adopt in toto the reasoning in the lead judgment and the conclusion therein and hold also that there is no trace of merit is this appeal, which must be dismissed.
It is dismissed for want of merit.

Appearances

J. E EZIKEFor Appellant

AND

No AppearanceFor Respondent