THE SHELL PETROLEUM DEVELOPMENT COMPANY LTD. V. ANTHONY NWABUEZE (2013)

THE SHELL PETROLEUM DEVELOPMENT COMPANY LTD. V. ANTHONY NWABUEZE

(2013)LCN/5949(CA)

In The Court of Appeal of Nigeria

On Thursday, the 21st day of February, 2013

CA/PH/415/2007

RATIO

TORT: MEANING OF DAMAGES

Damages are the money claimed by or ordered to be paid to a Plaintiff as compensation or loss of injury. It is the sum which a person wronged is entitled to receive as compensation from the wrongdoer for the wrong. It is general damages when it is such that the law presumes follow from that particular type of wrong complained of. General damages do not need to be specifically claimed and as such, it is usually termed direct or necessary damages. It is trite law that a claim for general damages belong to the realm of tort. See Multichoice v. Azeez (2010) 15 NWLR (Pt.1215) 40 at 53, P.Z. & Co. Ltd. v. Ogedengbe (1972) 1 All NLR (Pt.1) 202 at 205 – 206; Sosan v. HEP Engineering (Nig.) Ltd. (2004) 2 NWLR (Pt.861) 546 at 576. Per. UCHECHUKWU ONYEMENAM, J.C.A.

THE DAMAGES RECOVERABLE IN AN ACTION FOR BREACH OF CONTRACT

JUSTICES

ALI ABUBAKAR BABANDI GUMEL Justice of The Court of Appeal of Nigeria

CHIOMA EGONDU NWOSU IHEME Justice of The Court of Appeal of Nigeria

UCHECHUKWU ONYEMENAM Justice of The Court of Appeal of Nigeria

Between

THE SHELL PETROLEUM DEVELOPMENT COMPANY LTD Appellant(s)

AND

ANTHONY NWABUEZE (Carrying on business under the name and style of TONNKEN INT’L COY) Respondent(s)

UCHECHUKWU ONYEMENAM, J.C.A. (Delivering the Leading Judgment): This an appeal against the judgment delivered by the High Court of Rivers State sitting at Port Harcourt on 4th June, 2004 wherein the judgment was entered in favour of the Respondent who was the plaintiff at the lower court.
The Respondent at the lower court had claimed as follows:
a. A declaration that the plaintiff having supplied the items in milestones 3 & 4 in accordance with the specification in contract No E-03917 is therefore entitled to the payment thereof and payment of the resulting demurrage.
b. An Order of specific performance compelling the defendant to pay to the plaintiff the following:
i. The sum of N2,208,000.00 being the total value of the items supplied in milestones 3 & 4 of the contract between the plaintiff and the defendant.
ii. The sum of N1,196,000.00 being the total cost of demurrage incurred by the plaintiff as a result of change in the destination of supply and the resultant delay arising therefrom.
iii . The sum of N2 million (Two Million Naira) only as general damages arising from the interest charges by the Bankers/sponsors of the contract and loss of business good-will with the Bankers as a result of delay in payment.
Total claim is the sum of N5,404,000.00 (Five Million Four Hundred and Four Thousand Naira) only.
The Respondent was a registered contractor with the Appellant who was the defendant at the lower court. On 20th March, 1997 the Appellant awarded the Respondent a contract for the procurement and delivery of construction (building) materials for the construction of a Town Hall at KURUMA COMMUNITY. The contract No: E-03917 whose terms and conditions are contained in a document tendered as Exhibit D at the lower court was originally valued at N3.4 million and segmented into four numbers of milestones for convenience of performance.
The contract was later mutually reviewed upwards by an additional sum of N2.8 million thus bringing the total value of the contract to N6.2 million. The Respondent performed the contract in two different segments. The items in milestones 1 & 2 were supplied at the first instance and were duty paid for by the appellant.
The Respondent contends that on the due day to supply items in milestones 3 and 4, there was youth unrest in the community. The Respondent informed the Appellant of the development but the Appellants took weeks to arrange for the storage of the materials at their Kidney Island Stores. This made the Respondent to incur demurrage on the barge and lorries which conveyed the materials to and from the project site at Kuruma to Kidney Island Store. The Respondent averred that in order to palliate the transporters, he withdrew the electrical materials in the items supplied, resold same to pay. The Respondent thereafter informed the Appellant to deduct the value of the electrical materials from the sum due him in milestones 3 and 4.
Eventually when the Respondent was shown the designated place to store the items, the Appellant’s project Engineer Mr. Victor Tikili inspected them and confirmed them satisfactory. The Appellant deducted the sum of N460,000.00 for the electrical materials from the value of milestones 3 and 4. The Respondent wrote to the Appellant on the cost of demurrage incurred as a result of the change in destination for the supply of the materials and the resultant delay caused by the Appellant in taking delivery. He then submitted the bill/invoice for the items supplied in milestones 3 and 4 and the accrued demurrage to the Appellant. The Appellant did not complain of any default nor defect in the quantity and quality of the items in milestones 3 and 4. When the Respondent approached them for the issuance of completion forms and/or certificates the Appellant was not forthcoming, so he petitioned to one of the Defendant’s senior staff Mr. Udum complaining of the payment.
It was then that the Appellant wrote a reply stating that the items in milestones 1 and 2 were not completely supplied and that the money paid for milestones 1 and 2 was meant to be an advance payment of which no further payment would be made. The Respondent in response protested stating that all the items for milestones 1 and 2 were complete in terms of quantity and quality having been so adjudged after inspection and subsequent issuance of certificate of completion by the Appellant’s officers. He noted that it was about thirteen months after payment had been made for milestones 1 and 2 that the Appellant brought about allegation of non-completion of the supply. He claimed the value of milestones 3 and 4 (items supplied) at N2,208,000.00 (Two Million Two Hundred and Eight Thousand Naira) and N1,196,000.00 (One Million One Hundred and Ninety Six Thousand Naira) only the total demurrage incurred. The Respondent claimed that the delay caused by the Appellant in the non-payment of the money created a problem between him and his bank (FBN) Merchant Bankers who sponsored the contract. He averred that he had used all the subtle means to effect amicable settlement but the Appellant refused, failed and/or neglected to concede
The Appellant on the other hand filed a defence and counter claim. He alleged that the Respondent failed to comply with the schedules and specifications for milestones 1 and 2 as the additional materials for which the contract value was reviewed upwards were not supplied. Based on the information of the supervising engineer that the Respondent was encountering financial difficulties which were hampering the performance of the contract, the Appellant approved the payment for milestones 1 and 2, even though it was known to both sides that work had not been completed as required by the contract. The Appellant said this was to assist the Respondent and this fact of non-completion was agreed to by both parties at their meeting on 20th March, 1998.
The Respondent commenced the supply of materials for milestones 3 and 4 only after series of letters and meetings had taken place in order to forestall the termination of the contract. That the KURUMA community did not allow the contractor to off load the materials because the members of the community adjudged the materials to be inferior in quality. The Appellant also certified the inferior quality of the materials but provided a provisional site for the storage of the materials at their Kidney Island.
The Appellant maintained that the question of demurrage on barges did not arise as the Respondent used Cargo carrying Canoes. Moreover under the contract, transportation was the responsibility of the Respondent. The Appellant denied liability either for the alleged demurrage which was false or on any supplies in respect of milestones 3 and 4. The Respondent asked for the withdrawal of the electrical items from the contract due to financial constrain. The Respondent only brought to the Appellant the list of the materials to be stored on 31st August, 1998 for which he was directed to Kidney Island the same day. That the store was a gratuitous provisional arrangement for the Respondent to enable him collate the materials for inspection by Appellant’s officials. The goods supplied at Kidney Island were inspected but denied they were found or confirmed satisfactory. As such, the Appellant had no obligation to pay for them.
When the Respondent informed the Appellant of his inability to make any further supplies including the electrical materials, a reconciliation meeting was arranged and agreement reached on supplies and receipts. The Respondent signed the document (minutes) on 3rd May, 1999. The Appellant admitted that the Respondent submitted a claim but denied liability as there was no basis for the claim. Rather, the Appellant claimed it over paid the Respondent.
Denying not being responsible for whatever existed between the Respondent and his bankers, the Appellant emphasized that it had paid the Respondent for all accepted supplies which amounted to N3,992,000.00 with an over payment of N567,332.33.
In its counter-claim, the Appellant claimed the said overpayment being over payment for goods not supplied for milestones 1 and 2 in contract No. E03917 for the supply of building materials at the Town Hall building site at KURUMA town.
During the hearing of the case at the lower court, the Exhibits tendered were labeled A – Y. At the end of the trial, the learned trial Judge in his considered judgment found as follows:
“Having considered most of the issues raised by the parties, the court is of the opinion that the defendant (now appellant) was in breach of the contract for his failure to pay the contract money due and payable to the plaintiff in respect of milestones 3 & 4 for the materials supplied. Plaintiff is entitled to the claim for demurrage. Consequently, the following orders are hereby made;
c. A declaration that the plaintiff having supplied the items in milestones 3 & 4 in accordance with the specification in contract No E-03917 is therefore entitled to the payment thereof and payment of the resulting demurrage.
d. An Order of specific performance compelling the defendant to pay to the plaintiff the following:
iv. The sum of N2,208,000.00 being the total value of the items supplied in milestones 3 & 4 of the contract between the plaintiff and the defendant.
v. The sum of N1,196,000.00 being the total cost of demurrage incurred by the plaintiff as a result of change in the destination of supply and the resultant delay arising therefrom.
vi. That the Defendant should pay a total sum of N3,404,000.00 to the plaintiff on the whole. (See pages 148-149 of the Records).
The learned trial Judge also found that the counter-claim was not proved. He accordingly dismissed same.
The Appellant dissatisfied with the decision of the lower court filed this appeal containing three grounds. The Respondent also being dissatisfied with the decision of the lower court not to award damages against the Appellant after making a determination that the Appellant was in breach of contract also filed a cross-appeal with one ground. Briefs were duly filed and exchanged by parties. Appeal was subsequently heard on 3rd December, 2012. From the grounds of appeal, the Appellant formulated the under-listed 3 issues for the determination of the appeal.
(a) “Whether the learned trial Judge was right in holding the Appellant liable for breach of contract in the face
Exhibit “D” and “S” on record?
(b) Whether the judgment was valid having being delivered over a year after conclusion of addresses by the parties?
(c) Whether Exhibit “S” was not binding on the parties?”
The Respondent presented the following 4 issues for the determination of this appeal.
“1. Whether on the weight of evidence before the court, the appellant was not in breach of the contract with the Respondent. (Ground 1).
2. Whether the learned trial Judge was not right in not according any evidential value to Exhibit S in the face of Exhibits, W, X & X1, V, F & F1, G, G1 & G2, J & J1 and L which overwhelmingly contradict Exhibit S and other anomalies inherent in the said Exhibit S. (Ground 2). ‘
3. Whether the judgment of the lower court is valid (Ground 3)
4. Whether the Respondent who has shown the damages he suffered for the breach of contract is entitled to award of compensatory damages for such determined breach of contract (Cross-appeal)”.
Issues 1, 2 and 3 of the issues raised by the Respondent have same purport as the three issues formulated by the Appellant. Issue 4 distilled by the Respondent is from the sole ground of his Cross Appeal.
Resolution of the issues as raised by the Appellants will determine this appeal. However issue ‘C’ of the Appellant’s issues is submerged in issue ‘A’. In which case issue ‘C’ will be resolved in the course of resolving issue “A”. Accordingly I shall determine the appeal based on 2 issues. In resolving the issues I shall resolve them as issue 1 and 2 seriatim.
ISSUE 1
The learned senior counsel for the Appellant referred to Exhibit D (the contract agreement) tendered by the Respondent and submitted that parties are bound by the terms of contract they freely entered into. He cited: The owners of the M.V. Lupex v. Nigeria Overseas Chartering and Shipping Limited (2003) F.W.L.R. (Pt.170) 1428 at 1445; B.B.C. Plc V. Sky INSP Nig. Ltd. (2002) 17 NWLR (Pt.795) 117.
It was contended for the Appellant that the storage facility provided for the Respondent by her as a result of the youth unrest in Kuruma Community was gratuitous and not capable of altering the terms and conditions of Exhibit ‘D’.
The Appellant further argued that the learned trial Judge having made the finding of fact that the Respondent was party to the reconciliation agreement – Exhibit ‘B1’, he ought to have ‘dismissed the Respondent’s claim and granted the counter claim of the Appellant as the evidential scale titled more on the side of the Appellant. It was also the Appellant’s contention that since the learned trial Judge found that the Respondent signed Exhibit ‘S’, he was wrong to have held that the Appellant was liable for breach of contract and for payment of demurrage as Exhibit ‘S’ expressly exempted the Appellant from such charge. The judgment was thus submitted to be against the weight of evidence proffered by parties.
The learned counsel urged the court to resolve issue 1 in favour of the Appellant.
In response, the learned counsel for the Respondent submitted that it is the primary duty of the trial Judge to evaluate evidence and ascribe probative value to them. See Fagbenro v. Arobadi (2006) ALL FWLR (pt. 310) 1575 at 1594; Awoyoolu v. Aro (2006) All FWLR (Pt.308) 1319 at 1335. He further referred to the holding of the learned trial Judge at pages 137-147 of the record and submitted that the trial court took time to painstakingly appraise all the Exhibits, evidence and the comportment of witnesses and rightly placed probative value to all the pieces of evidence and arrived at a sound and unimpeachable conclusions.
Learned counsel urged the court to uphold the findings of fact made by the trial court and to dismiss the appeal on this issue.
Resolution of Issue 1
The law is settled that parties are bound by the terms of their contract. See: Ladipo v. Ladije (1973) 5 SC. 207. In this case, the parties are as submitted by the Appellant bound by the terms and conditions of Exhibit D.

It is equally correct in law that it is a trial court’s prerogative to evaluate evidence and ascribe probative value to it. This court will not ordinarily interfere in this primary responsibility of the trial court unless where the lower court has failed to carry out this duty judicially and judiciously.

In his submissions the learned senior counsel for the Appellant referred to a reconciliation agreement Exhibit ‘B1’ and the meeting for reconciliation Exhibit ‘S’. In sum, he submitted that the learned trial Judge wrongly found on these documents. This he said made the judgment to be against the weight of evidence. See paragraphs 4.01E and 4.01G of Appellant’s brief.
Exhibit ‘B1’ – contractor work category maintenance document was tendered by PW1 on 12th April, 2000. See page 39 line 2 of the record. Exhibit ‘B1’ is not a reconciliation agreement as submitted by the Appellant. Exhibit ‘B1’ did not seem to be in dispute which accounts for why neither the Appellant’s nor the Respondent’s counsel made reference to it in their addresses at the lower court. I have also gone through the judgment of the lower court and found no where that the learned trial Judge made reference to Exhibit ‘B1’ let alone making a finding on it. From the record, the related reconciliation documents are exhibits L, V and S which both counsel addressed the trial, court on. The trial court consequently made findings on them.
Exhibit ‘B1’ by its nature is not the document the Appellant termed it to be and from the facts and circumstances of this appeal, it is not in dispute. From the record there was no decision of the lower court on it, the Appellant therefore wrongly submitted on it. Accordingly I discountenance the submission of the Appellant on Exhibit ‘B1’ in the determination of this appeal.
From the record and the emphasis laid by the learned senior counsel while arguing the appeal, the main issue is the construction of Exhibit S by the learned trial Judge. At pages 145 and 149 in particular, the learned trial Judge’s findings and conclusions are to the effect that demurrage was property raised by the Respondent and the Appellant acknowledged same in Exhibits L and S. Also, that there were reconciliation meetings for which Exhibit S represented one of them and that the Respondent who signed Exhibit S was part of that reconciliation meeting. The learned trial Judge came to the conclusion that demurrage was covered by Exhibit D and that the Respondent was entitled to the claim of demurrage.
The Appellant’s contention here is that, the learned trial Judge was wrong in his interpretation and evaluation of Exhibits D and S when he concluded that despite Exhibit S the Appellant was liable to pay demurrage. It is important to note that from the findings of the learned trial Judge he concluded that Exhibit S was binding on the parties. See page 145 lines 15 – 20 of the record.
On a careful reading of Exhibit D particularly page 9 paragraph 2.3 of Article 2; page 26-27 Appendix 4.2 Articles 1 and 2; I do agree with the learning trial Judge that Exhibit D did not exclude demurrage. I therefore hold that the incident of demurrage is covered by Exhibit D.
However on whether in the face of Exhibit S the Respondent could be entitled to demurrage under Exhibit D, the Appellant submitted that the Respondent could not. On their own the Respondent submitted that Exhibit S is contradictory and the trial court was right in relying on other more self explicable exhibits that also clearly contradicted Exhibit S in arriving at its decision. It was also submitted for the Respondent that Exhibit S was not pleaded and so inadmissible in law. He referred to paragraphs 15 and 21 of the Appellant’s brief for that contention and cited: See Okonji v. Njokanma (1999) 14 NWLR (Pt.638) 250 at 266; Shittu v. Fashawe (2005) All FWLR (Pt. 278) 1017 at 1032.
There are in law, two categories of inadmissible evidence. Firstly, is evidence absolutely inadmissible in law and for which even by the parties’ consent cannot be admitted. See: Kole v. Coker (1982) 12 SC 252. Secondly, is evidence which is inadmissible in law but upon fulfilling certain conditions; parties may by consent admit such evidence notwithstanding the conditions have not been met. See Etim v. Ekpe (1983) 1 SCNLR 120. The law stands that in the second category of inadmissible evidence, where a party fails to object to the admission of the otherwise inadmissible evidence at the trial, he cannot be allowed to raise an objection at the appeal state. See Igbodim v. Obianke (1976) 9-100 SC 179.
Exhibit S is not a document which is absolutely inadmissible in law, it is a document admissible as secondary evidence. DW1 while testifying gave reasons why he did not have the original of Exhibit S to tender before he sought to tender the photocopy. The Respondent did not object and Exhibit S was admitted in evidence. See page 70 lines 16 – 26. Since the Respondent did not object to the tendering of Exhibit ‘S’ at the lower court, I hold that she cannot be allowed on appeal to raise objection on its admissibility on the ground that Exhibit ‘S’ is not a primary evidence. See Anyaebosi v. Briscoe (Nig) Ltd. (1987) 3 NWLR 84.
On whether Exhibit ‘S’ is inadmissible because it was not pleaded by the Appellant. I have read the Appellant’s statement of defence, I readily agree with the Respondent that Exhibit S was not pleaded in paragraph 15 of the statement of defence. However, as to whether it is correct to say it was not pleaded in Paragraph 21 of the Appellant’s Statement of defence. Paragraph 21 avers as follows:
“In further answer to paragraph 19-21, the defendant pleads the contract agreement, all correspondences relevant to the dispute written by the plaintiff and the defendant, all relevant delivery documents and all documents including minutes not yet specifically pleaded but relevant to the dispute between the parties.”
By Merriam – Webster dictionary, “correspondence” mean amongst others “the agreement of things with one another” Exhibit ‘S’ was admittedly signed by the Respondent. Exhibit ‘S’ therefore was an agreement between the parties and as such qualifies as a correspondence made by the parties. I do not therefore agree with the Respondent that Exhibit ‘S’ was wrongly admitted by the learned trial Judge. Rather I hold that Exhibit ‘S’ was pleaded in paragraph 21 of the Appellant’s statement of defence and was rightly admitted by the learned trial Judge.
The Appellant’s further contention that the learned trial Judge was wrong when he held that the Appellant was in breach of contract and liable to pay demurrage when Exhibit ‘S’ exempted the Appellant from such charge relates to the probative value the learned trial Judge ascribed to Exhibit ‘S’.
It is an elementary principle of law that the admission of evidence is different from the weight attached to it. By section 92 of the Evidence Act Laws of the Federation of Nigeria; in estimating the weight, if any, to be attached to evidence; the trial court most consider all circumstances from which an inference can reasonably be drawn as to the accuracy of the statement. Regard must also be had to the fact, whether or not the statement was made synchronous with the existence of the facts stated.
The learned trial Judge had at pages 137 – 145 of the record, particularly pages 138 lines 2 – 11, 143 lines 17-21 and 144 of the record, in his evaluation of evidence and findings of fact preferred Exhibits X, X1, W, F and F1 to Exhibit S. Accordingly the learned trial Judge attached much weight to the other exhibits mentioned above as against Exhibit ‘S’. Exhibit ‘S’ is a two paged document titled Material Reconciliation for Town hall construction at Kuruma. Unlike the other exhibits tendered in the case which consistently referred to the contract number to which they related, Exhibit ‘S’ left the contract number to which it relates hanging and to be speculated upon. Exhibit ‘S’ has cancellations which were not countersigned or explained off. The document also is not legible on the contractor’s claim. What is clear on the face of Exhibit ‘S’ is the column indicated as VOWD – described as (value of work done), the Appellant’s claim and Respondent’s Claim. These two columns form an integral part of the same document. There is nothing on Exhibit ‘S’ to show which of the two claims was adopted and or agreed upon by parties as the outstanding claim. Exhibit ‘S’ simply shows each of the parties maintaining their position as to their claims. In other words Exhibit ‘S’ merely states the equal positions of the parties.
From the facts of this appeal, the content of Exhibit ‘S’ is sufficiently contradicted by other documentary evidence before the court. Exhibits X and X1 tendered by DW1 substantially contradicted the column captioned VOWD in Exhibit ‘S’. Exhibits X and X1 disclosed the list of the quantity of materials supplied by the Respondent to the Appellant in respect of milestones 1 and 2 which the Appellant received and paid for. Exhibit ‘S’ is in many ways questionable, no cogent inference can be drawn from the circumstances of Exhibit ‘S’ as to its accuracy in the face of Exhibits X, X1, F, F1 and W in particular. It is the duty of the trial court to appraise the totality of the admissible evidence adduced by both parties before it can ascribe probative values to it: See Fagbenro v. Arobadi (2006) All FWLR (Pt. 310) 1575. I hold the view that the learned trial Judge was right in considering all the documentary evidence before him alongside Exhibit ‘S’ before reaching his conclusions. I do not therefore find reason to disturb the evaluation and probative value ascribed by the learned trial Judge to the exhibits including Exhibit ‘S’. I hold that the learned trial judge was right in holding that the Appellant was in breach of contract. Accordingly, I resolve issue 1 in favour of the Respondent.

ISSUE 2
The Appellant submitted that the judgment of the lower court delivered a year and three months after the conclusion of addresses of counsel to parties being contrary to section 294(1) of the 1999 Constitution of the Federal Republic of Nigeria is invalid.
It was contended for the Appellant that the inordinate delay in delivering the judgment made the learned trial Judge to not only loose the advantage of watching the demeanor of the witnesses, but the memory of the content of documents tendered before him which led to a miscarriage of justice.
The learned senior counsel urged the court to resolve issue 2 in the negative.
On issue 2, the learned counsel for the Respondent submitted that the submissions of the Appellant on this issue are misconceived and substantially misrepresented. He conceded that the parties concluded initial addresses on 28th January, 2003 and judgment delivered on 4th June, 2004. However he contended that the conclusion of addresses on 28th January, 2003 did not remain the final addresses of the parties in the matter. The learned counsel for the Respondent stated that the correct position is that the learned trial Judge, upon return from a national assignment as the Chairman of the Election Petition Tribunal sitting in Kogi State, directed the parties to re-open their addresses. Both counsel on 28th April, 2004 elected to re-adopt their earlier addresses made in respect of their cases after which judgment was delivered on 4th June, 2004. See pages 95 – 96 of the record.
Learned counsel for the Respondent submitted that the judgment complied with the provisions of section 294(1) of the 1999 Constitution and as such valid. He urged the court to resolve issue 2 in favour of the Respondent.
It is correct as submitted by the learned senior counsel for the Appellant that by virtue of section 294(1) of the 1999 Constitution of the Federal Republic of Nigeria, judgment shall be delivered not later than ninety days after the conclusion of evidence and final addresses. The key word there is final addresses.
In the instant, it would appear that parties concluded their initial addresses on 28th January, 2003 and judgment delivered on 4th June, 2004 a period of about a year and three months. This is not the absolute position of the facts and circumstances of the case. From the record as submitted by the learned counsel for the Respondent the addresses of 28th January, 2003 was not the final addresses of the parties. When the learned trial Judge returned from election Petition Tribunal national assignment, he directed the parties to re-open their addresses. The parties opted to re-adopt their earlier addresses on 28th April, 2004. See pages 95 lines 25-27; 96 lines 1-3 of the record. After the re-adoption on 28th April, 2004 the learned trial Judge delivered his judgment on 4th June, 2004.
The re-adoption of addresses by the parties on 28th April, 2004 amounted to fresh and final addresses of parties. Accordingly, it is not the correct position that the learned trial Judge delivered his judgment outside the time limit provided for by section 294(1) of the 1999 Constitution (supra). I hold that the judgment of the trial court on 4th June, 2004 was within the ninety days stipulated by the Constitution. The said judgment is therefore valid. Issue 2 is resolved in favour of the Respondent.
From the foregoing, I hold that appeal fails and is dismissed. I uphold the judgment of the lower court in suit No: HC/No./PHC/47/2000 delivered on 4th June, 2004 as per pages 148 – 149 lines 10 – 20 and lines 1 – 15 respectively.

CROSS APPEAL
The Respondent dissatisfied with part of the judgment filed a Notice of Appeal with one ground of appeal on 26th July, 2004.
The facts of the Cross Appeal are same as the facts that had earlier been set out in his judgment. Issue 4 of the Respondent’s/Cross Appellant’s brief of argument was formulated on the Cross Appellant’s sole ground of Appeal. The Cross appeal was argued at pages 15-17 of the cross Appellant’s brief. The Appellant/Cross Respondent responded to the Respondents/Cross Appellant’s argument at pages 3 – 7 of her reply brief.
I shall reproduce the sole issue for the determination of the cross Appeal which is that
“Whether the Respondent who has shown the damages he suffered for the breach of contract is entitled to award of compensatory, damages for such determined breach of contract”.
In his submission on the sole issue, the learned counsel for the Cross Appellant referred to paragraph 28(b)(iii) of the statement of claim, the evidence of Respondent/Cross Appellant as PW1 on the loan she obtained from FBM (Merchant Bankers) Ltd, Exhibits M and N to the effect that on 15th November, 2000 the bank, FBM (Merchant Bankers) Ltd, filed a motion on notice to be joined in the suit which led to this cross appeal to ensure she recovers her money: to submit that; the learned trial Judge misconstrued the fundamental essence of award of general damages in breach of contract. Learned counsel argued that the Appellant/Cross Respondent did not need to be party to the transaction between Respondent/Cross Appellant and his bank as held by the lower court to be liable for damages for breach of contract.
He submitted that what the court ought to have considered is the effect of the breach on the Respondent/Cross-Appellant. See Stabilini Visinoni Ltd. v. Metalum Ltd. (2008) All FWLR (Pt.409) 503; Ibro Hotels Ltd. v. Hotel Support Services Ltd. (2000) FWLR (Pt.16) 2748 at 2758; Ndinwa v. Igbinedion (2000) FWLR (Pt.30) 2673 at 2684.
The Cross Appellant urged the court to resolve the issue in her favour and allow the cross appeal.
In response, the learned counsel for the Appellant/Cross Respondent referred to the rules governing the award of damages in cases of breach of contract. See Maiden Electronics Works Ltd. v. A-G Federation (1974) N.S.C.C. Vol. 9. 43 at 45. He submitted that parties are bound by Exhibit D which is their terms and conditions of contract. He argued that bank loan was neither part of the contract nor can it be inferred from the contract.
It was also submitted for the Appellant/Cross Respondent that general damages cannot be awarded in an action for breach of contract. See Ndinwa v. Igbinedion (2001) 5 NWLR (Pt.705) 140 at 151; Maiden Electronics Works Ltd. v. Ag of the Federation (1974) All NLR (Pt.1) 179 at 210.
The learned counsel for the Cross Respondent conceded that the Cross Appellant pleaded that a bank sponsored the execution of the contract he entered into with her but contended that the Cross Appellant did not lead evidence on any bank interest chargeable in any circumstance relating to the contract. He submitted that the trial court was right to have refused award of general damages claimed by the Cross Appellant. He urged the Court to dismiss the cross appeal.
In his reply brief, the Respondent/Cross Appellant submitted that the contention of the Appellant/Cross Respondent that general damages are not awarded in an action for breach of contract is a misconception of the law: He cited N.D.I.C. v. Kaleyemi Bakeries & Catering Services Ltd. (2007) All FWLR (Pt.357) page 916 at 952.

Damages are the money claimed by or ordered to be paid to a Plaintiff as compensation or loss of injury. It is the sum which a person wronged is entitled to receive as compensation from the wrongdoer for the wrong. It is general damages when it is such that the law presumes follow from that particular type of wrong complained of. General damages do not need to be specifically claimed and as such, it is usually termed direct or necessary damages.
It is trite law that a claim for general damages belong to the realm of tort. See Multichoice v. Azeez (2010) 15 NWLR (Pt.1215) 40 at 53, P.Z. & Co. Ltd. v. Ogedengbe (1972) 1 All NLR (Pt.1) 202 at 205 – 206; Sosan v. HEP Engineering (Nig.) Ltd. (2004) 2 NWLR (Pt.861) 546 at 576.

The common law principle which has been followed by our courts is that; in an action for breach of contract, the damages recoverable are the artless and likely consequences or losses logically foreseeable by the parties and ought to have been foreseen by them at the time of the contract – as ipso facto corollary to a breach by any of the parties. See: Hadley v. Baxendale (1854) 9 Exch. 341; Okongwo v. N.N.P.C. (1989) 4 NWLR (Pt.115) 296 at 307. The issue is not whether the wrongdoer had foreseen the damages resulting from the breach. Instead, it is whether the possibility of its occurrence was within the contemplation of both parties at the time they entered into the contract.
In the appeal at hand, the trial court held that the Appellant/Cross Respondent breached the contract when it failed to pay the Respondent/Cross Appellant the sum of N2,208,000.00 (Two million two Hundred and eight thousand naira) only, being the total value of the items supplied in milestones 3 and 4 of the contract between the parties. Having so held, it was the duty of the trial court to consider the natural and probable consequences of the Appellant/Cross Respondent holding back the money due to the Cross Appellant for the supplies he made in determining whether the Cross appellant was entitled to damages.
I note the argument of the Appellant/Cross Respondent that parties are bound by the terms and conditions of their contract. Also is the Appellant’s strong submission that since the Cross Appellant gave evidence that he had no financial incapacitation and Exhibit D (the contract) did not provide that the Cross Appellant should obtain loan to execute the contract, the lower court was right in refusing to award general damages as a result of interest charges ensuing from the bank loan.
The Appellant/Cross Respondent’s position is correct, which is to say that parties are bound by the terms and conditions of the agreement they have entered into. In this case Exhibit D. See Ladipo v. Lajide (1973) 5 SC 207. However, I do not see in any way in the contract where it expressly prohibited the taking of loan by the Cross Appellant to execute the contract. It is my view that the Cross Appellant was correct when he stated that he had no financial problem. This did not in any way mean that he was financially autonomous neither did it connote that he must execute the contract with his personal money. That statement simply means that finance would not bar him from executing the contract timeously and in accordance with the standard stipulated in Exhibit D. Accordingly, the Cross-Appellant’s ability to borrow money to execute the contract was an integral part of not having any financial problems. Again by Exhibit D, it was within the contemplation of the parties that the supplies in milestones 3 and 4 will be executed with money within the time grant specified. It was also within the contemplation of the parties that the money spent by the Cross Appellant in executing the contract will be repaid by the Cross Respondent upon execution of the contract. I had earlier said that Exhibit D did not prohibit the Cross Appellant from borrowing money to execute the contract. The fact is, whether funding the contract was sourced from the bank or his personal money, so long as the Cross Respondent did not pay for the supplies within the time allowed in the contract agreement, losses were bound to naturally flow either as interest on bank loan or diminishing return on investible personal funds and business of the Cross Appellant.
I am therefore of the view and hold that sourcing for money to supply items in milestones 3 and 4, was within the contemplation of Exhibit D.
The Cross Respondent conceded at page 5 paragraph 2.06 of their Appellants reply brief and reply to Respondent’s Cross appeal that the Cross Appellant borrowed money from the bank but contended that no evidence was led in proof of the general damages he alleged arose from interest charges by the bank. It is therefore not in issue that bank loan was used by the Cross Appellant to execute the contract, I have also held that sourcing of fund for the purpose of executing the contract was within the contemplation of the parties. The question now is, what damages will naturally flow or result as a consequence of the Appellant’s/Cross Respondent’s failure to pay for the job executed for her. It is overwhelming that damages arising from a breach in paying money due to a Plaintiff at the time it was due, is the interest on the amount due. The reason is that such interest will place the Plaintiff on the financial strength he would have been if he was paid as at when due. See S.B.N. Plc. v. Opanubi (2004) 15 NWLR (Pt.896) 437. In Stabilini Visinoni Ltd. v. Metalum Ltd. (2008) All FWLR (Pt.409) 503, the Court of Appeal held thus:
“In a situation arising from commercial matters, a party holding on to the fund of another, for so long without justification ought to pay compensation for so doing. In the instant case, where the Defendant withheld Plaintiff’s money, for contract executed, the interest claimed thereon by the Plaintiff was rightly awarded by the trial court.”
Accordingly, in the instant appeal the damages recoverable by the Cross Appellant as naturally flowing and probable consequences or losses reasonably foreseeable by the parties at the time of entering the contract is that; failure of the Cross Respondent to pay for the execution of milestones 3 and 4 as at when due is the interest rate of the money sourced from the bank which continues to run until such a time the contract money is paid. I hold that the damages recoverable in view of the facts of this case are the interest charges and loss of Cross Appellant’s business goodwill with the bank.
General damages are not recoverable in an action for breach of contract and the case of N.D.I.C. v. Kalayemi Bakeries & Catering Services Ltd. (2007) All F.W.L.R. (Pt.357) 916 is not an authority for holding that general damages are recoverable in an action for breach of contract. A calm reading of the decision of the Court of Appeal in the above case does not support the Cross Respondent’s position to that effect. The court therein defined general damages and went on to expound on damages recoverable upon breach of contract.
However, although I held that in this action rather than general damages what was recoverable was the bank interest charges and loss of business goodwill as a result of Cross Respondent’s breach of Contract. The Cross Appellant had pleaded that he borrowed money from the bank but did not plead the interest rate. The Cross Appellant who is ordinarily entitled to award of damages for the losses he incurred by reason of the interest charges on the loan has left the court without facts and materials for the award. Howbeit, a Plaintiff in a case of breach of contract is entitled to nominal damages even though he has suffered no actual damage. The violation or infraction of his legal right per se will entitle him to nominal damages without proof of any loss incurred by him as a consequence of the breach. See Obere v. Board of Management EKO Hospital (1978) 1 L.N.R. 240 at 250.
Nominal damages being a small amount fixed as damages for breach of contract without regard to the amount of loss. It is awarded simply once the Plaintiff establishes a breach f contract but fails to establish a loss caused by the wrong. The essence of a judgment for nominal damages is that the Plaintiff has established a legal right. See S.W. Waddams, the Law of Damages 2477 – 478 (3rd Ed. 1997). I had upheld the trial court’s decision that the Cross Respondent breached the contract; I also hold the view that the said breach has caused the Cross Appellant loss of business goodwill with the bank. This entitles the Cross Appellant to damages even when he has not established actual damage.
Again, I hold that the Cross Respondent did not need to be a party to the loan transaction the Cross Appellant had with the bank for him to be entitled to damages as long as the Cross Appellant has shown that: the bank interest charges and loss of business goodwill accrued as a result of the Cross Respondent’s breach of contract.
Accordingly, by the principle of law stated above, I hold that the Cross Appellant is entitled to damages for the infraction of his right stemmed on his loss of business goodwill with his bank. Issue is resolved in favour of the Cross Appellant.
Consequently, Cross Appeal succeeds and is allowed. I set aside the judgment of the lower court on the issue of award of damages for breach of contract as delivered by the High Court of Justice Rivers State sitting in Port Harcourt – Suit No: PHC/47/2000 between Mr. Anthony Nwabueze V. Shell Petroleum Dev. Co. Ltd on 4th June 2004.
I order that the Cross Respondent pay N1,000,000.00 (One Million) Naira damages to the Cross Appellant.
I make no further order as to costs.

ALI ABUBAKAR B. GUMEL, J.C.A.: I have had the privilege of reading before now the lead Judgment of my learned brother, Onyemenam, JCA. I agree with all his reasonings and conclusions. I adopt them as mine in also allowing this appeal in part. I abide by all the consequential orders of my learned brother as set out in the lead judgment.

CHIOMA EGONDU NWOSU-IHEME (Ph.D) J.C.A.: I read the judgment prepared by my learned brother, UCHECHUKWU ONYEMENAM, JCA. I have no option but to endorse the said judgment in the same terms as stated in the lead judgment.

Appearances

Chief M.I. Ahamba, SAN with C.C. OkoroaforFor Appellant

AND

Benjamin Obiora with C. DibizezueFor Respondent