ZENITH BANK PLC v. ATO PROPERTIES LIMITED
(2019)LCN/13285(CA)
In The Court of Appeal of Nigeria
On Thursday, the 16th day of May, 2019
CA/L/85/2017
JUSTICES
MOHAMMED LAWAL GARBA Justice of The Court of Appeal of Nigeria
BIOBELE ABRAHAM GEORGEWILL Justice of The Court of Appeal of Nigeria
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO Justice of The Court of Appeal of Nigeria
Between
ZENITH BANK PLC – Appellant(s)
AND
ATO PROPERTIES LIMITED – Respondent(s)
RATIO
WHETHER OR NOT HE WHO ALLEGES MUST PROVE
In law, it is he who alleges the positive that carries the burden of proof of what he has positively alleged. There is really no initial burden on he who alleges the negative since the negative is ordinarily incapable of proof. See Elemo V. Omolade & Ors. (1968) NMLR 359; Atane V. Amu (1974) 10 SC 237; Fashanu V. Adekoya (1974) 6 SC 83; Kate Enterprises Ltd. V Daewoo Nig Ltd.(1085) 2 NWLR (Pt. 116; Onyenge V. Ebere 18 NSCQR (Pt.) PER GEORGEWILL, J.C.A.
WHETHER OR NOT FACTS ADMITTED NEEDS NO FURTHER PROOF
It is also the law that facts admitted by either party of the averments of the other party also need no further proof. It is equally well accepted that facts in a pleading of one party which are not specifically traversed but are generally or evasively traversed are also deemed as having been admitted by the other party. See also Hashidu V. Goje 2 EPR P.790 @ p. 836. See also Oversea Construction Company Nig. Ltd. V. Creek Enterprises Nig. Ltd (1985) 3 NWLR (PT.13)407; Adesoji Aderemi V. Adedire (1966) NMLR 398; Nnameka Emegokwue V. James Okadigbo (1973) 4 SC 113; Woluchem v. Gudi (1981) 5SC 291; lwuoha V. NIPOST (2003) 8 NWLR (Pt. 822) 308; Akpapuna & Ors V. Obi Nzeka & Ors. (1983) 2 SCNLR 1, (1983) 7 SC 1; Omoboriowo v. Ajasin EPR (Vol. 3) 488 @ p. 511; Iniama v. Akpabio (2008)17 NWLR (Pt. 1116) 225 @ p. 309. PER GEORGEWILL, J.C.A.
ESSENTIAL ELEMENTS OF NEGLIGENCE
In law, negligence is constituted of three essential elements, namely: a) The duty of care owed the Claimant by the Defendant; b) The breach of that duty of care by the Defendant; and c) The resultant damages. Thus, the Claimant in an action for negligence must show that he had suffered damage as a consequence of the Defendant?s failure or breach of the Defendant?s duty of care owed to the Claimant. See: MTN V. Mundra Ventures (Nig) Ltd. (2016) LPELR ? 40343 (CA) per Georgewill JCA @ pp. 36 ? 37. See also Olam (Nigeria) Ltd. V. Intercontinental Bank Ltd. (2009) LPELR ? 8275 (CA); Koya V. UBA Ltd. (1997) 1 NWLR (Pt. 481) 41; Osigwe V. Unipetrol Ltd. (2005) 5 NWLR (Pt. 918) 261; Aluminum Manufacturing Company V. Volkswagen Nig. Ltd. (2010) 7 NWLR (Pt. 1192) 97 @ p. 118. PER GEORGEWILL, J.C.A.
WHETHER OR NOT SPECIAL DAMAGES NEED TO BE SPECIFIALLY PLEADED AND STRICTLY PROVED
The law is thus well settled that though there is need to specifically plead and strictly prove special damages, the rule requiring anyone asking for special damages to prove strictly that he did suffer such damages as he claimed, it does not means that the law requires a minimum measure of evidence or that the law lays down a special category of evidence required to establish entitlement to special damages. However, is required to establish entitlement to special damages is credible evidence of such a character as would suggest that he indeed is entitled to an award under that head otherwise the general law of evidence as to proof by preponderance or weight as usual in civil cases operates. Thus, General damages are such as the Court may give when the judge cannot point out any measure upon which they are to be measured except the opinion and judgment of a reasonable man. They are losses which flow naturally from the Defendant and the quantum need not even be pleaded or proved as it is generally presumed by law. They are presumed to flow from the negligence complained of and proved and in appropriate and deserving cases shall be awarded to assuage the injury done to the successful Claimant against the Defendant. PER GEORGEWILL, J.C.A.
BIOBELE ABRAHAM GEORGEWILL, J.C.A. (Delivering the Leading Judgment): This is an appeal against the Judgment of the High Court of Lagos State, Lagos Judicial Division, Coram; O. A. Ogala J., in Suit No: LD/253A/2011: Ato Properties Ltd. V. S. E. I. C Construction Nigeria Limited & Ors., delivered on 10/11/2016, in which the claims of the Respondent as Claimant against the Appellant as 2nd Defendant and two other Defendants were granted.
The Appellant was dissatisfied with the said Judgment and had promptly appealed to this Court vide a Notice of Appeal filed on 28/11/2016 on five grounds of appeal at pages 936 – 941 or 983 ? 988 of the Record of Appeal. The Record of Appeal was duly compiled and transmitted to this Court on 24/1/2017. The Appellant?s brief was filed on 25/7/20117. The Respondent?s brief was filed on 6/12/2018. The Appellant?s reply brief was filed on 28/2/2019.
?At the hearing of this appeal on 29/4/2019, Chibueze Muobuikwu Esq., learned counsel for the Appellant adopted the Appellant?s brief and Appellant?s reply brief as his arguments in support of the appeal and urged the
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Court to allow the appeal and dismiss the Respondent?s suit for lacking in merit. On their part, Charles U. Edosomwan SAN, learned Senior Advocate for the Respondent, appearing with Prince Osazu Isibor Esq., Eric Ogiebor Esq., and Funmilayo Tessy Meghoro Esq., adopted the Respondent?s brief as their arguments in opposition to the appeal and urged the Court to dismiss the appeal and affirm the judgment of the Court below.
By a Writ of Summons filed on 16/2/2011 and by a Further Amended Writ of Summons and Statement of Claim filed on 24/4/2015, the Respondent, as Claimant claimed against the Appellant, as 2nd Defendant and two other Defendants jointly and/or severally as follows:
1. A Declaration that the Claimant is entitled to the refund of the sum of N24,345,496.27 being the outstanding balance of the money paid into the account of S.E.I.C. Construction Nigeria Ltd as advance payment in the 2nd Defendant?s custody and insured by 3rd Defendant.
2. The sum of N24, 345, 496. 27 being the outstanding balance of the money paid into the account of S.E.I.C Construction Nigeria Ltd and the 2nd Defendant jointly and/or
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severally as at 17/11/2009 when the contract was determined.
3. 20% interest on the said sum of N24, 345, 496. 27 until the final liquidation of the sum.
4. A Declaration that the 2nd Defendant was negligent and reckless in the administration of the advance payment guarantee (APG) deposited with it on behalf of the Claimant to the 1st Defendant. S.E.I.C Construction.
5. The sum of N24, 345, 496. 27 as special damages for negligence against the 2nd Defendant.
6. A Declaration that the 3rd Defendant was negligent and reckless in the administration of the Performance bond executed in the benefit of the 2nd Defendant by 1st Defendant and the 2nd Defendant.
7. The sum of N24, 345, 496. 27 being the outstanding damages sustained by the Claimant Respondent under the Performance bond which is now due to the Claimant from 1st Defendant and 3rd Defendant jointly and/or severally as at 17/11/2009 when the contract was determined.
8. The Claimant further claims the sum of N50, 000, 000. 00 as general damages.
9. The Cost of this action.
BRIEF STATEMENT OF FACTS
On the pleading and evidence, both oral
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and documentary, the gist of the Respondent?s case as Claimant before the Court below was that it was awarded a contract by the Lagos State Government for the building of 8 units of 4 Bedrooms maisionette, which contract it then offered to the 1st Defendant before the Court below vide Exhibit CW1 (b), which accepted same vide their letter in Exhibit CWI(c). Upon the acceptance of the 1st Defendant, the Respondent further entered into contract with the 2nd Defendant by way of an Advance Payment Guarantee in the sum of N58, 000, 000. 00 vide Exhibit CW1 (E) (1-2), with a validity period of 12 months but not later than 12/10/2009. It then made an advance payment of N47, 310, 000. 00 to the Appellant, which entire sum the Appellant to the 1st Defendant on 25/3/2009 when the 1st Defendant had not discharged its contractual obligations to the Respondent and in breach of contract and contrary to the terms of the Advance Payment Guarantee. The Respondent maintained that the funds held by the Appellant were not to be released to the 1st Defendant unless the Respondent issued interim Payment Certificates. However, out of the sum of N47,310,000.00 paid to the 1st
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Defendant, it had only issued two interim certificates valued at N15, 514, 503. 73 and after series of complaints about the slow pace of work and of the quality of work done by the 1st Defendant, the Respondent received a letter dated 10/11/2009 from the Lagos State Government expressing their displeasure with the work on the site and further vide a letter from Lagos State dated 24/11/2009 it determined the contract for breach of terms. The Respondent then informed the Appellant of the determination of the contract between it and the 1st Defendant vide its letter of 18/11/2009 and also wrote a letter of complaint dated 29/12/2009 to the Appellant on the conduct of its staff Adedeji Adegoke and Nnamdi Ihekwezu. By letters dated 17/11/2009 and 30/11/2009 it had notified the 3rd Defendant of its intention to determine the contract and recalled the bond and the 3rd Defendant vide its letters of 28/112009 and 29/11/2009 informed the Respondent of the need to investigate and assess the claim and also notified the First Spring Insurance Brokers of the recall of the performance bond. However, on 28/11/ 2010 Nnamdi Ihekweazu an officer of the Appellant
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forwarded a letter from the 1st Defendant authorizing the immediate payment of the sum of N6, 000, 000. 00 to the Respondent. The Appellant and 3rd Defendant failed to respond to the request of the Respondent. The 1st Defendant made several promises to liquidate the balance sum of N24,321,169.04 but only made two unsubstantial payments of N1,000,000.00 and N250,000.00 to the Respondent on 18/6/2010 and 14/7/2010. The Appellant and the other Defendants then refused and or failed to liquidate the outstanding sum of N24,321,169.04 till date and thereby caused the Respondent several losses in trying to shore up the work done by the 1st Defendant from being totally destroyed, hence the claims against the Appellant and the two other Defendants. See pages 537 – 538, 539 – 549 of the Record of Appeal.
?On the other hand, on the pleading and evidence, both oral and documentary, the gist of the Appellant?s case as 2nd Defendant before the Court below was that the Appellant agreed to issue an Advance Payment Guarantee (APG) dated 13/10/ 2008 for the sum of N58,100,000.00 in favor of the Respondent on behalf of the 1st Defendant for 12 months but
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not later than 12/10/2009 when the offer would terminate and become void whether or not the original guarantee is returned to the bank for cancellation. By paragraph 2 of the Advance Payment Guarantee it was to take effect from the date of receipt of the advance payment in cleared funds and was to remain valid for 12 months and thereafter the Appellant would be discharged of all liabilities under the APG. Further that by Paragraphs 6 and 7 of the APG, it is imperative that any claim by the Respondent on the part of the 1st Defendant pursuant to the APG should have been received by the Appellant on or before 12/10/2009 within the life span of the APO and that the failure of the Respondent to give it a written notice Of the 1st Defendant?s default if any existed on or before the 12/10/ 2009 was fatal. However, in line with good business practice, the Appellant went further to secure its own liability under the APG by a Counter indemnity dated 10/10/2008 from the 3rd Defendant also for the tenure of one year which was to expire on the 9/10/2009.
?By the terms of the APG, the Respondent was to have remitted the sum of N58, 100, 000. 00 to the
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Appellant in favor of the 1st Defendant as condition precedent to the validity of the Advance Payment Guarantee, out of which only the sum of N47, 300, 000. 00 was in fact remitted to the Appellant by the Respondent and the failure to remit the total sum of N58, 100, 000.O0 to the Appellant rendered the APG invalid and the Appellant under the terms of the APG shall not be liable for any subsequent transaction or agreement between the Respondent and the 1st Defendant. The Appellant never received any interim certificates totaling the sum of N15, 514, 503. 73. The transfer of the entire sum of N47, 300, 000. 00 by the Appellant to the 1st Defendant on 25/3/2009 was with the express approval of the Respondent and in line with the agreement between the Respondent and the 1st Defendant. The APG was managed fairly and professionally and in accordance with the terms of the APG and banking practice and did not create an additional or extra obligation on the Appellant apart from the express terms of the APG. The allegation of unethical conduct or lack of competence and professionalism against the officers of the Appellant by the Respondent have no basis and that the
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subsequent arrangements between the Respondent and the 1st Defendant ostensibly on the basis of reaching a settlement was not at the instance of the Appellant or was the Appellant privy to the arrangements and thus out of the purview of the APG and that the subsequent refund or payment of N6, 000, 000. 00 to the Respondent was a direct payment by the 1st Defendant to the Respondents? account and therefore, the Appellant?s liability had been extinguished. See pages 724 – 731 of the Record of Appeal.
?The case went to trial before the Court below only between the parties that joined issues in their pleadings. The Respondent called one witness, who testified as CW1, one Mrs. Ugo Aluta and tendered several documents admitted in evidence as Exhibits CW1 (A) – (X) and closed its case. The Appellant also called one witness who testified as DW1, one Nnamdi Steven Ihekweazu and tendered several documents admitted in evidence as Exhibits DW1 (A) – DW1 (F) and closed its defense. The 3rd Defendant also called one witness who testified as DW2, one Felicia Bolajoko David and closed its case. The 1st Defendant did not participate at the trial. At the
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conclusion of trial and adoption of final written addresses by the parties, the Court below delivered it judgment on 10/11/2016, in which it had no difficulty readily entering judgment against the 1st Defendant on the unchallenged evidence led against it by the Respondent and also entering judgment against the Appellant and the 3rd Defendant in favor of the Respondent, hence the appeal to this Court by the Appellant. See pages 948 – 982 of the Record of Appeal.
ISSUES FOR DETERMINATION
In the Appellant?s brief, three issues were distilled as arising for determination from the five grounds of appeal, namely;
1. Was the Advance Payment Guarantee (APG) between the Respondent and the Appellant made for a definite period of time? (Distilled from Ground One)
2. Was the condition precedent to the validity of the APG complied with by the Respondent notwithstanding that the Respondent paid the sum of N47, 310,000. 00 to the Appellant in favor of S.LE.C. Construction Nigeria Limited, instead of N58, 100, 000. 00 expressly agreed under the APG? (Distilled from Ground Two)
?3. Whether from the entirety of the facts before the Court
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below, the Appellant is liable in negligence to the Respondent under the APG? (Distilled from Grounds Three and Four).
In the Respondent?s brief, three issues were also distilled as arising for determination this appeal, namely;
1. Whether the Appellants unilateral remittance of the entire funds that constituted the advance payment guaranty on 25/3/2009, seven clear months before the date of expiration of the life span of the APG and when the Contractor had not yet performed her contract with the Respondent, did not amount to a breach of contract of the APG entitling the Respondent to damages/restitution?
2. Whether the Appellant?s unilateral disbursement of the entire funds that constituted the advance payment guaranty seven clear months before the expiration of the life span of the APG including the manner in which same was disbursed to the Contractor by the Appellant even before the performance of the contract between the Contractor and the Respondent was not negligent?
3. Whether the Appellant having willingly, voluntarily and without any complaint, administered, managed and applied the funds in the advance payment
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guaranty, they can rightly turn around to complain that the Respondent did not remit the complete amount to the APG account and hence same was void?
My lords, I have given due considerations to the averments in the pleadings of the parties, the evidence, both oral and documentary, as led by the parties. I have also reviewed the submissions of counsel in their respective briefs in the light of the findings and decisions of the Court below in the judgment appealed against and it does appear to me that the three issues for determination as distilled in the Appellant?s brief are the apt issues for determination in this appeal, a consideration of which would invariably involve the due consideration of all the issues as distilled in the Respondent?s brief. However, in view of the interwoven nature of all the three issues for determination, I shall consider all of them together and resolve them in one fell swoop in this judgment. I proceed to do so anon!
ISSUES ONE, TWO AND THREE (Taken Together)
Was the Advance Payment Guarantee (APG) between the Respondent and the Appellant made for a definite period of time; was the condition
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precedent to the validity of the APG complied with by the Respondent notwithstanding that the Respondent paid the sum of N47, 310, 000. 00 to the Appellant in favor of S.LE.C. Construction Nigeria Limited, instead of N58, 100, 000. 00 expressly agreed under the APG, and whether from the entirety of the facts before the Court below, the Appellant is liable in negligence to the Respondent under the APG?
APPELLANT?S COUNSEL SUBMISSIONS
On issue one learned counsel for the Appellant had submitted that a contract of guarantee is a collateral agreement for the performance of another?s undertaking in that it is an undertaking or promise that is collateral to the primary or principal obligation and therefore, has its basis on a main contract and thus if the main contract is vitiated by any element, the contract of guarantee will become unenforceable and contended that in law where parties have embodied the terms of their contract in a written document, extrinsic evidence is not admissible to add to, vary, subtract from or contradict the terms of the written instrument. Counsel relied on UBN V. Ozigi (1994) 3 NWLR (Pt.333) 385 @ p. 400;
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Yadis (Nig.) Ltd. V. Great Nigeria Insurance Co. Ltd. (2007) 14 NWLR (Pt.1055) 584 @ p. 610.
It was also submitted that by the terms of the APG it was to last for 12 months with effect from the date of receipt of the advance payment sum in cleared funds but not later than 12/10/2009 after which the same shall terminate and become void whether or not the original guarantee is returned to the bank for cancellation and contended that this clear and unequivocally agreement between the parties is what should be given effect to by the Court contrary to the findings of the Court below and urged the Court to hold that any claim pursuant to the APG should have been received by the Appellant on or before 12/10/2009 being the expiry date but since no claim was received by the Appellant within the lifespan of the APG, the Appellant incurred no liability in disbursing the fund to the Contractor in line with the terms of the APG contrary to the perverse finding of the Court below and to set aside the same and allow the appeal. Counsel relied on UBN V. Ozigi (Supra); Owoniboys Technical Services Ltd. V. UBN Ltd (2003) 15 NWLR (Pt. 844) 545; Orient Bank (Nig.) Plc V. Bilante Int?l Ltd
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(1997) 8 NWLR (Pt. 515) 37 @ p. 89; Warner & Warner Int. V. FHA (1993) 6 NWLR (Pt. 298) 148 @ p. 169.
?It was further submitted that in law parties to a written contractual agreement are bound by the terms of contract and the Court has a duty to enforce the terms of a contract which the parties in their free-will mutually adopted and signed, provided such terms are not illegal or contrary to public policy and contended that it was very clear that the intention of the Appellant and Respondent, who were the parties to the APG, was to make the lifespan of the APG 12 months and urged the Court to hold that the Appellant has been duly discharged from any liability whatsoever under the APG by effluxion of time and in law where a person has been released from liability under a contract of guarantee, the issue of contribution does not arise since no person can be called upon to contribute to a non -existent liability. Counsel relied on Koiki V. Magnusson (1999) 8 NWLR (Pt. 615)482; Ogun State Housing Corporation V. Ogunsola (2000) 14 NWLR (Pt. 687) 431; Arjay Ltd. V. AMS Ltd. (2003) 7 NWLR (Pt. 820) 577; Niger Dams Authority V. Lajide (1973) 5
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SC 207; UBN Ltd V. Umeh & Sons Ltd (1996) 1 NWLR (Pt. 426) 565@ p. 605; Ajagbe V. Idowu (2011) 17 NWLR (Pt. 1276) 422; Arab Bank Ltd V. Dantata (1977) 7 SC 33.
It was also further submitted that the Appellant was not served with Exhibit CWI (U) and consequently had no notice of the purported default of S.E.I.C. Construction Nigeria Limited and the said letter was written after the expiration of the APG on 12/10/2009 and was also not served on the Respondent and contended that since it was expressly agreed that the construction of the 8 Units of 4 Bedroom Massionette contained in Exhibit CW1 (M) (1 – 2) and Exhibit DWI (E) (1-2), which was the only contract between the Respondent and the Appellant, was to last for 12 months, it cannot by any stretch of imagination be thought or assumed that the APG would last beyond the life span of the construction of the 8 Units of 4 Bedroom Massionette upon which the APG stands and falls and urged the Court to hold that the Court below was in error when it held that the basis of the Respondent?s claim against the Appellant was negligence and that since the Appellant disbursed the APG sum to S.E.LC.
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Construction Nigeria Limited ?within the lifespan of the Advance Payment Guarantee? it did not matter that the Respondent did not notify the Appellant of S.E.I.C. Construction Nigeria Limited?s default within the lifespan of the APG and to set aside this perverse finding since the validity and enforceability of the APG was not dependent on the time disbursement of the APG sum was made to S.E.I.C. Construction Nigeria Limited by the Appellant but was dependent on when the Respondent notified the Appellant of any default by S.E.I.C. Construction Nigeria Limited before 12/10/2009.
?
On issue two learned counsel had submitted that it is clear from the face of Exhibit CW1 (M) (1 – 2) (APG) that the receipt of the sum of N58, 100, 000. 00 by the Appellant directly from the Respondent in favor of the Contractor was a condition precedent to the validity of this Guarantee Agreement and contended that the Respondent in contravention of the said agreement deposited the only sum of N47, 310, 000. 00 and thereby vitiating the agreement between parties and urged the Court to hold that in law where a contract is subject to the fulfillment of certain
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terms and conditions, the contract is not formed and not binding unless and until such terms and conditions are complied with or fulfilled and therefore, once a condition precedent is incorporated into an agreement that condition must be fulfilled before the effect can flow and the Respondent having failed to fulfill the condition precedent rendered the APG null and void. Counsel referred to Black?s Law Dictionary, 9th Edition, 2009 @ p. 312 and relied on Nigercare Dev. Co. Ltd V. ASWB (2008) 9 NWLR (Pt.1093) 498; Adetoun Oladeji (Nig.) Ltd V. NB. Plc (2007) 5 NWLR (Pt.1027) 415 @ p. 433; Tsokwa Oil Marketing Co. V. BON Ltd (2002) 11 NWLR (Pt. 777) 163 @ pp. 221 – 222; Sparkling Breweries Ltd V. UBN Ltd (2001) 15 NWLR (Pt.737) 539, Okechukwu V. Onuorah (2000) 5 NWLR (Pt. 691) 597; UBA Ltd V. Tejumola & Sons (Nig.) Ltd (1988) 2 NWLR (Pt.79) 662; Ajibola V. Sogeke (2003) 9 NWLR (Pt. 826) 494 @ p. 533; Awoyemi V. Fasuan (2006) 13 NWLR (Pt.996) 86 @ p. 107; UBA V. Ekpo (2003) 12 NWLR (Pt. 834) 332 @ p. 42; Katto V. C.B.N. (1991) 9 NWLR (Pt. 214) 126; Kaliel V. Aliero (1999) 4 NWLR (Pt.597) 139; Best (Nig) Ltd V. B.H. (Nig) Ltd (2011) 5 NWLR (Pt. 1239) 95
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@ p. 126.
On issue three learned counsel had submitted that in an action for negligence the burden of proof falls upon the Plaintiff alleging it to give the particulars of negligence and lead evidence in support thereof and contended that in law the tort of negligence arises when a legal duty owed by the Defendant to the Plaintiff is breached and the resultant damages and urged the Court to hold that what was agreed to between the Respondent and the Appellant in the APG was that the value of the advance payment and the liability assumed by the Appellant under the guarantee would be reduced in proportion to the extent of work done as the Contractor progressively discharges its responsibilities to the Respondent and therefore, there was no provision making issuance of Interim Payment Certificates a condition precedent to disbursement of the APG fund by the Appellant to the Contractor and the manner of disbursement of the APG fund to the Contractor was at the discretion of the Appellant. Counsel relied on NBC Plc V. Borgundu (1999) 2 NWLR (Pt. 591) 408; Agbonmagbe Bank Ltd. V CFAO (1966) 1 SCNLR 367; Dare V. Fagbamila (2009) 14 NWLR 177 @p. 180.
?It was
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also submitted that the Court below cannot rightly rely on Exhibit DWI (E) (1-2) the Offer of Advance Payment Guarantee, which was between the Appellant and the Contractor as a basis for holding the Appellant liable in negligence to the Respondent, who was not a party to it and contended that in law by the doctrine of privity of contract a contract cannot confer rights or impose obligations on strangers to it and urged the Court to hold that the Court below was wrong when it held the Appellant liable in negligence to the Respondent on the basis of the APG between the Appellant and the Contractor and in the absence of any contract entered into between the Appellant and the Respondent to warrant the finding of negligence against the Appellant by the Court below. Counsel relied on A – G Federation V. AIC Ltd (2000)10 NWLR (Pt. 675)293 @ p. 306; Dunlop V. Selfridge (1915) AC 847; Chuba Ikpeazu V. ACB Ltd. (1965) NMLR 374.
?
It was further submitted that throughout the entirety of evidence led, the Respondent did not establish the ingredients of negligence against the Appellant to be entitled to a favorable finding of negligence as was erroneously done by the
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Court below and contended that the duty the Appellant owed to the Respondent was to ?pay? or disburse the sum of money that the Respondent deposited with it to the Contractor in ?advance? for the execution of a construction contract that the Respondent awarded to the Contractor and to ?guarantee? such payment and urged the Court to hold that the Appellant cannot be said to have breached its duty under the APG simply because the Appellant paid or disbursed the fund to the Contractor in advance, which is what the Appellant was contracted to do and to set aside the perverse finding of negligence by the Court below and allow the appeal and dismiss the Respondent?s claims against the Appellant. Counsel relied on Hamza V. Kure (Supra) @ p. 649 ? 650; UTB (Nig.) V. Ozoemena (Supra) @ pp. 464 – 465; Orhue V. NEPA (1998) 7 NWLR (Pt. 557) 187.
?
RESPONDENT?S COUNSEL SUBMISSIONS
On his issues one and two taken together, learned Senior Advocate for the Respondent had submitted that on the strength of the offer of advance payment Guarantee and the advance payment Guarantee the Respondent transferred the sum of
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N47, 310, 000. 00 to the custody of the Appellant for the payment in installment disbursement to the contractor as construction of Respondent?s work progresses on the site and contended that the clear intention of the parties as can be gleaned from Exhibits DW2 (F) (1-3) and CW1(M)(1-2) is that funds in the APG which was in the custody of the Appellant was only to be released to the Contractor in accordance with these provisions and urged the Court to hold that the Court below was correct to have given effect to the intention of the parties and to affirm those findings and to dismiss the appeal. Learned Senior Advocate relied on Kaydee Ltd V. Minister of Federal Capital Territory (2010) 7 NWLR (Pt.1192) 171 @ pp. 221 – 222; Cooperative Development Bank V. Ekanem (2009) 16 NWLR (Pt. 1168) 585.
?It was also submitted that by releasing the entire funds guaranteed by the APG to the Contractor on 25/3/2009, as admitted by the Appellant?s witness DW1, seven clear months before the expiration of the tenure of the APG amounted to at best negligent and a gross violation of the terms and conditions of the APG and contended that in law the disbursement
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of the entire fund in the APG by the Appellant when the contract for the building construction of the Respondent by the Contractor was yet to be performed amounted clearly to negligent conduct without regard to the essence for which the APG was procured in the first place which was a security instrument for the performance of the Respondent?s contract by the Contractor and urged the Court to so hold and to affirm the decision of the Court below to that effect and to dismiss the appeal. Learned Senior Advocate relied on Cameroon Airlines V. Otutuizu (2011) 4 NWLR (Pt. 1238) 512; Federal Ministry of Health V, CSA Ltd (2009) NWLR (Pt. 1145) 193 @ p. 214.
?It was further submitted that conduct of the Appellant in the outright disbursement of the fund in the APG to the Contractor amounting to a clear breach of the contract of APG coupled with the Appellant?s negligence in the administration of the APG, the Court below was right to hold that the Respondent was entitled to Damages and restitution of the balance contract sum which was not utilized by the Contractor on the face of the two interim payment Certificates and one final valuation for
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certification and contended that the value of work done on the site by the Contractor amounted to the total sum of N22, 988, 380. 96 leaving the balance sum of N24, 321, 169. 04 and urged the Court to hold that the Court below was right to have granted the relief seeking the restitution of this amount to the Respondent and to affirm the said award and to dismiss the appeal for lacking in merit. Learned Senior Advocate relied on Cameroon Airlines V. Otutuizu (Supra).
?It was also further submitted that the conduct of the Appellant as regard the management and disbursement of the fund in the APG was at best negligent and reckless in that the Advance payment Guarantee contract was tenured for 12 months to terminate on the 12/10/ 2009 but the Appellant in flagrant violation of the terms of the said contract, negligently disbursed the supposedly secured fund in its custody to the Contractor without the Respondent?s authority/consent seven months before the expiration of the life span of the APG when the Contractor was yet to perform the contract which was the purpose of the APG and contended that the sole purpose of the APG contract was to serve as a
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Security, surety, a guarantee and an indemnity that in the event that the Contractor fails to perform its contractual responsibilities to the Respondent, that is, the construction of 8 units of 4 Bedrooms maisonette, the advance payment in APG shall be utilized to remedy the failure of the Contractor and urged the Court to hold that Fund secured by the APG ought to be used to remedy any eventual default committed by the Contractor and to affirm the liability of the Appellant to the Respondent. Learned Senior Advocate relied on Trade Bank V. Chami (2003) 13 NWLR (Pt. 836)158 @ p. 210; Hamza V. Kure (2010) 10 NWLR (Pt. 1203) 630 @ p. 646; UTB V. Ozoemena (2007) 3 NWLR (Pt. 1022) 488; FBN Plc V. Associated Motors (1998) 10 NWLR (Pt. 570) 441; Orhue V NEPA (1998) 7 NWLR (Pt. 557) 187; FBN Plc V. Songonuga (2007) (Pt. 1021) P. 230 @ pp. 278 ? 279; Dragetanos Construction Nig. Ltd V. FMV Ltd (2011) 16 NWLR (Pt. 1273) 308 @ p. 400.
?On his issue three, learned Senior Advocate for the Respondent had submitted that the time the Appellant received the sum of N47, 310, 000. 00 from the Respondent as the advance payment without any objection, contention or
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challenge and thereafter proceeded to administer, applied and managed the said fund in the APG, the Appellant was estopped from complaining and have therefore, waived its right to complain at this stage that the Respondent did not remit the sum of N58, 100, 000.00 and contended that DW1 admitted that the Appellant did not raised any objection or contention to the receipt of the sum of N47, 310, 000.00 as advance payment in the APG instead of N58, 100, 000. 00 and urged the Court to hold that the Appellant having not so objected and proceeded to administer the fund has waived its right in law and cannot now turn around to alleged that the APG was void. Learned Senior Advocate referred to Section 169 of the Evidence Act, 2011 and relied on Hydro ? Quest Nig. Ltd V. BON (1994) 1 NWLR (Pt. 318) 41 @ p. 49; Caribbean Trading & Fidelity Corporation V. NNPC (1992) 7 NWLR (Pt. 252) 161; Ariori V. Elemo (1983) 1 SCNLR 1; Auto Import V. Adebayo (2005) (Pt. 959) 44 @ pp. 122 – 123; NBCI V. Integrated Gas Nig. Ltd (1999) 8 NWLR (Pt. 613) 119 @ p. 128
APPELLANT?S COUNSEL REPLY SUBMISSIONS
In his reply submissions, learned counsel for the
26
Appellant had submitted that the argument by the learned Senior Advocate for the Respondent was a clear misconception of Clauses 2, 4 and 5 of Exhibit CW1(M)(1-2) in that in law where words of a document are clear and unambiguous, the Court is enjoined to give them their ordinary literal meaning and therefore, cannot read into that document what is not stated therein and contended in interpreting an agreement, it must be read as a whole and interpreted in that light with effort being made to achieve harmony among the parties and urged the Court to hold that the intention of parties in Exhibit CW1(M)(1-2) is that though the guarantee is to be valid for 12 months, the Appellant was not expected to wait till the 12 months have expired before fulfilling its obligation under the APG contract and therefore acted within the terms of the APG when it released the funds to the 1st Defendant, more particularly when there was no complaint from the Respondent. Counsel relied on UBN Ltd V. Sax (1994) 8 NWLR (Pt. 361) 150 @ p. 65; Yadis (Nig) Ltd V. Great Nigeria Insurance Co. Ltd (2007) 14 NWLR (Pt. 1055) 584 @ p. 610; FBN Plc. V. Maiwada (2013) 5 NWLR (Pt. 1348) 444 @ p. 483
27
;Mbani V. Bosi (2006) 11 NWLR (Pt. 991) 400 @ p. 417; Okogie V. Epoyun (2010) 11 NWLR (Pt. 1206) 456 @ p. 476.
?It was also submitted that the Advance Payment Guarantee, which was the only contract between the Appellant and the Respondent, did not provide for the manner of disbursement of the APG fund to the contractor and contended that in law by the principle of guarantee the Appellant had the obligation to release the APG sum to the Contractor once a representation is made for such payment, except a complaint of default is made by the Respondent, which complaint was not made in the instant case until after the expiration of 12 months and urged the Court to hold that clause 5 of Exhibit CW1(M)(1-2) expressly gave the Respondent the obligation of monitoring and reporting any default by the Contractor to the Appellant, which apparently excludes the Appellant from the obligation of investigating or questioning whether the Contractor was or has been in default or not, more particularly when Exhibit CW1(M)(1-2) did not provide that the issuance of Interim Payment Certificates would be a precondition for the release of the funds in the custody of the
28
Appellant. Counsel relied on A.I.D.C V. Nigeria LNG. Ltd (2000) 4 NWLR (Pt. 653) 494 @ p. 503; BFI Group Corp. V. BPE (2012) NWLR (Pt. 1332) 209 @ p. 238; Nwosu V. Zenith Bank Plc (2015) 9 NWLR (Pt. 1464) 314; Esal (Commodities) Ltd & Reltor Ltd V. Oriental Credit and Wells Fargo Bank NA (1985) 2 Lloyd?s Rep 546; Siporex Trade SA V. Banque Indosuez (1986) 2 Lloyd?s Rep 146; Ansal Engineering Projects Ltd V. Tehri Hydro Development Corporation (1996) SCR(4) 226; Ehuwa V. O.S.I.E.C. (2006) 18 NWLR (Pt. 1012) 544 @ pp. 568 – 569; Udoh V. Orthopaedic Hospital Management Board (1993) 7 NWLR (Pt. 304) 139.
?It was further submitted that given the settled position of the law of privity of contract to the effect that the APG contracts are independent contracts from the construction contract between the Respondent and the Contractor and the offer letter for the APG, which was only between the Appellant and the Contractor, the Appellant is not obligated under the APG contract to question the demand for payment by the contractor, especially where there is no complaint of default by the Respondent and contended that the Appellant is not in any way
29
under the APG contracts obligated to verify the extent of work done by the Contractor before releasing the APG sum to the contractor neither is the Appellant bound to wait till the expiration of the 12 months before the APG sum could be released and urged the Court to so hold and to set aside the perverse finding to the contrary by the Court below and to allow the appeal. Counsel relied on Basinco Motors Ltd V. Woermann – Line & Anor (2009) 13 NWLR (Pt. 1157) 149 @ p. 180; LSPDC & Anor. V. Nigerian Land & Sea Foods Ltd (1992) 5 NWLR (Pt. 244) 653 @ p. 673; National Thermal Power Corporation Ltd V. Flowmore Pvt. Ltd (1995) 4 SCC 515. Edward Owen V. Baclays Bank International (1978) 1 All ER 976 @ p. 983; FBN Plc V. Sonngonuga (2007) 3 NWLR (Pt. 1021) 230 @ pp. 278 – 279.
?It was further submitted that in law in a banker – customer contractual relationship, although the bank owes the customer a duty of care, the said duty is discharged once it is carried out in accordance with the instruction given to it by the customer, which in this instance is embodied in the APG contract in Exhibit CW1 (M)(1-2)) and contended that the duty the Appellant
30
owes both the Respondent and the Contractor in respect of the APG is to promptly release to the Contractor in line with the APG contract and the principle of guarantee, except where there is a complaint from the Respondent to the effect that the Contractor had defaulted in its obligation to the Respondent and urged the Court to hold that the Appellant has been able to demonstrate that it carried out its obligation with reasonable care and in accordance with the terms of Exhibit CW1(M)(1-2) and there was therefore, no form of misfeasance on the part of the Appellant that would warrant any liability in negligence whatsoever against the Appellant. Counsel relied on Ndoma – Egba V. ACB Plc (2005) 14 NWLR (Pt. 944) 79 @ pp. 112 -114; Basinco Motors Ltd V. Woermann-Line & Anor.(supra) @ p. 180; LSPDC & Anor. V. Nigerian Land & Sea Foods Ltd (supra) @ p. 673.
?It was also further submitted that the Respondent?s argument that the Appellant waived its right to insist on the precondition for the validity of the APG was grossly misconceived in that the operative word used in clause 1 of Exhibit CW1(M)(1-2) is ?shall? which connotes
31
mandatory action which cannot be waived and contended that the express agreement of parties cannot be varied by ?conduct? of parties as in law it can only be varied by another agreement and urged the Court to hold that hold that the disbursement of the APG sum by the Appellant does not in any way presuppose that the Appellant had waived the condition precedent to the performance of the APG contract. Counsel relied on Onochie V. Odogwu (2006) 6 NWLR (Pt. 975) 65; Larmie V. DPMS Ltd (2005) 12 SC (Pt.1) 94; FGN V. Zebra Energy Ltd (2002) 18 NWLR (Pt. 798) 162.
RESOLUTION OF ISSUE ONE, TWO AND THREE (Taken Together)
?My lords, when in an appeal an Appellant employs the phrase that the judgment is ?against the weight of evidence? as in ground 5 of the grounds of appeal, it postulates that there was no evidence which if accepted would support the findings of the trial judge or the inference which he had made. It could also mean that when the evidence adduced by the Appellant is balanced against that adduced by the Respondent on the imaginary scale of justice, the judgment given in favour of the Respondent would be against the
32
weight which should have been given, having regards to the totality of the evidence before the Court. See Mogaji V. Odofin (1978) 4 SC 94. See UBN Ltd. V. Borini Promo Co. Ltd. (1998) 4 NWLR (Pt. 547) 640; Anyaoke & Ors. V. Adi & Ors (1986) 3 NWLR (Pt. 13) 1.
In law, it is he who alleges the positive that carries the burden of proof of what he has positively alleged. There is really no initial burden on he who alleges the negative since the negative is ordinarily incapable of proof. See Elemo V. Omolade & Ors. (1968) NMLR 359; Atane V. Amu (1974) 10 SC 237; Fashanu V. Adekoya (1974) 6 SC 83; Kate Enterprises Ltd. V Daewoo Nig Ltd.(1085) 2 NWLR (Pt. 116; Onyenge V. Ebere 18 NSCQR (Pt.
My lords in considering issues one, two and three for determination together, I bear in mind that issue of facts on which the parties are ad idem require no further proof and are taken as having been established. It is also the law that facts admitted by either party of the averments of the other party also need no further proof. It is equally well accepted that facts in a pleading of one party which are not specifically traversed but are generally or
33
evasively traversed are also deemed as having been admitted by the other party. See also Hashidu V. Goje 2 EPR P.790 @ p. 836. See also Oversea Construction Company Nig. Ltd. V. Creek Enterprises Nig. Ltd (1985) 3 NWLR (PT.13)407; Adesoji Aderemi V. Adedire (1966) NMLR 398; Nnameka Emegokwue V. James Okadigbo (1973) 4 SC 113; Woluchem v. Gudi (1981) 5SC 291; lwuoha V. NIPOST (2003) 8 NWLR (Pt. 822) 308; Akpapuna & Ors V. Obi Nzeka & Ors. (1983) 2 SCNLR 1, (1983) 7 SC 1; Omoboriowo v. Ajasin EPR (Vol. 3) 488 @ p. 511; Iniama v. Akpabio (2008)17 NWLR (Pt. 1116) 225 @ p. 309.
?I have earlier reproduced in great details the respective cases of the parties as placed before the Court below through their further amended pleadings and the evidence of CW1 for the Respondent, DW1 for the Appellant and DW2 for the 3rd Defendant before the Court below. The parties tendered several documents admitted in evidence as Exhibits, of which the most crucial, going by the issues as joined between the Appellant and the Respondent is the Advance Payment Guarantee admitted as Exhibit CW1 (M)(1 ? 2) through the CW1 on 13/7/2015, and as Exhibit DW1(E)((1 – 2) through
34
the DW1 on 15/7/2015.
?The CW1 was thoroughly cross examined. Under cross examination, the CW1 stated that the Respondent had dealt with the 1st Defendant on other contracts and confirmed that Exhibit CW1 (b) is the contract between the Respondent and the 1st Defendant and that the 1st Defendant was requested to provide an advance payment guarantee as in Exhibit CW1 (M)(1 – 2) furnished by the 1st Defendant to the Respondent. The total cost of the project was put at N83, 000, 000. 00. The Respondent was to remit 60% of the contract sum amounting to N47, 000, 000. 00, which was remitted to the account of the 1st Defendant, which amount was lower than the N58, 000, 000.00 as the Respondent had to pay tax on behalf of the 1st Defendant, including withholding tax and development levy and such deductions were paid at source. All money were to be released to the 1st Defendant by the Appellant upon presentation of Interim Certificates issued by the Respondent as done in standard building projects, admitting however that the Advance Payment Guarantee does not mention anything about interim certificates. The contract took effect on Monday 6/10/2008 and also
35
admitted that apart from the Advance Payment Guarantee there was no other agreement between the Respondent and the Appellant.
?
The DW1 was also thoroughly cross examined. Under cross examination, the DW1, stated that the APG has a tenure of 12 months but not later than the specified date of 12/10/2009 and maintained that the APG is not a Tripartite Agreement and the sum of N47, 300, 000. 00 was not remitted to the 1st Defendant on 25/3/2009, although he could not state precisely when it was remitted as he was not with the details. That he has been in the Banking Industry for over 15 years and had done other APGs. He admitted that the funds are to be under the custody of the Appellant. However, it is not true that the Appellant was to monitor the parties since the APG is to receive advance payment for the Respondent on behalf of the 1st Defendant and is not a performance guaranty. The APG is to be released at the Bank?s discretion as long as it does not tamper with the guaranty itself since the APG is meant to be a sort of guaranty to the Respondent in the event of default and was meant to protect the parties to the agreement. He confirmed that the
36
sum of N 47, 310, 000. 00 was received by the Appellant on the APG and indeed the sum of N47, 300, 000. 00 was released on 25/03/2009 to the 1st Defendant and the payment was made at the discretion of the Appellant, though he could not recall how the disbursement was made to the 1st Defendant. However, he had no evidence that the payment was disbursed to the 1st Defendant gradually as it performed the contract and could not also confirm that the contract was actually executed by the 1st Defendant.
Now, the crucial document on which the resolution of the issues in this appeal would depend is the Advanced Payment Guarantee, which due to its importance in this appeal, I shall reproduce hereunder inter alia as follows:
ADVANCE PAYMENT GUARANTEE
BY THIS GUARANTEE, WE ZENITH BANK PLC of Plot 87, Ajose Adeogun, Victoria Island, Lagos State (hereinafter called ?the Bank) on behalf of our customer S.E.I.C CONSTRUCTION NIGERIA LIMITED of Plot 1685 Oladele Olashore Street, Victoria Island, Lagos (hereinafter called ?the Contractor?) are bound unto ATO PROPERTIES LIMITED (hereinafter called ?the Employer?) in the
37
sum of N58,100,000.00 only being advance payment by the Employer to the Contractor.
?..
NOW THEREFORE, if the Contractor shall fail to perform the contract; according terms and conditions or on default fail to refund the advance payment sum, the Bank shall pay to the Employer an amount not exceeding the sum of N58, 100, 000. 00 only, PROVIDED however that if the Contractor shall perform its obligations to the employer in accordance with the Contract, then this obligation shall be discharged and the tenure of this Guarantee shall terminate and it shall become null and void.
IT IS HEREBY DECLARED THAT:
1. Receipt of the sum of N58, 100, 000. 00 only, by the Bank directly from the Employer in favor of S.E.I.C CONSTRUCTION NIGERIA LIMITED/ZENITH BANK PLC on behalf of the Contractor shall be a condition precedent to the validity of Guarantee.
2. This Guarantee shall take effect from the date of receipt of The advance payment sum in cleared funds and shall remain valid for Twelve (12) months thereafter or up to the time the Employer has completely recouped the advance payment sum in terms of work
38
made whichever is but not later than October 12, 2009 after which the same, shall terminate and become void whether or not the original guarantee is returned to the Bank for cancellation.
3. ?…
4. The value of the advance payment and the liability assumed by the Bank under this Guarantee shall be reduced in proportion to the extent of work done as the Contractor progressively discharges its responsibilities to the Employer.
5. Employer shall give to the Bank as soon as possible written notice of default before the end of the tenure of the Guarantee otherwise the bank shall be discharged of all liabilities under this Guarantee. ?..?
?
My lords, issues one, two and three deal, in the main, with the issues of proof, entitlement, assessment and quantum of damages. In the judgment of the Court below, these issues were comprehensively dealt with on the strength of above pieces of oral and documentary evidence led by the parties. It found in favor of the Respondent on all its claims against the Appellant and the two other
39
Defendants, holding inter alia as follows:
The question to be determined by the Honorable therefore is whether the 2nd Defendant exercised the standard of care a reasonable and prudent bank would have exercised in the circumstance of this case. The question is did the conduct of the 2nd Defendant fall below the legal standard established to protect others against unreasonable risk of harm to the Claimant?….The question is will a Bank who has issued an advance payment guarantee, which is an assurance that a contract or act will be duly carried out and who has agreed with the contractor as to the manner of disbursement of same and has an agreement as in clause 4 of the APG with the Claimant release the entire funds of the APG when it did on the 25/3/2009. The Honorable Court finds without any doubt that from the entirety of facts before it, the 2nd Defendant has failed to exercise the standard of care that a reasonable and prudent bank would have exercised in a similar situation, that the conduct of the 2nd Defendant falls below the standard established to protect others against unreasonable risk of harm and this denotes culpable
40
carelessness. The Claimant has been able to prove from the evidence before the Court that the 2nd Defendant owed it a duty of care and in fact breached that said duty which resulted in harm/injury to the Claimant?.The Court finds that the Claimant has satisfactorily proved its claims against the three Defendants on the preponderance of evidence and on the balance of probabilities and is thus entitled to the judgment in its favor.? See pages 948 – 982 of the Record of Appeal.
?Looking specifically at the peculiar nature of the claims of the Respondent against the Appellant, I have no doubt in my mind that it is one founded simply on negligence in contractual obligations rather than strictly on breach of contract as is being so assiduously contended by the Appellant in this appeal. I therefore, hold that the Court below was right when it considered the claims of the Respondent against the Appellant as a claim in negligence in contractual obligations. I also completely agree with the learned Senior Advocate for the Respondent when he submitted that the claim of the Respondent against the Appellant is not one strictly founded on breach of contract
41
but rather one simply founded on negligence in contractual obligations. The question arising then is simply this: Did the Respondent prove negligence against the Appellant and was thus entitled to judgment against the Appellant as found by the Court below? This to my mind, and I so hold, is the real crux of this appeal.
In law, negligence is constituted of three essential elements, namely: a) The duty of care owed the Claimant by the Defendant; b) The breach of that duty of care by the Defendant; and c) The resultant damages. Thus, the Claimant in an action for negligence must show that he had suffered damage as a consequence of the Defendant?s failure or breach of the Defendant?s duty of care owed to the Claimant. See: MTN V. Mundra Ventures (Nig) Ltd. (2016) LPELR ? 40343 (CA) per Georgewill JCA @ pp. 36 ? 37. See also Olam (Nigeria) Ltd. V. Intercontinental Bank Ltd. (2009) LPELR ? 8275 (CA); Koya V. UBA Ltd. (1997) 1 NWLR (Pt. 481) 41; Osigwe V. Unipetrol Ltd. (2005) 5 NWLR (Pt. 918) 261; Aluminum Manufacturing Company V. Volkswagen Nig. Ltd. (2010) 7 NWLR (Pt. 1192) 97 @ p. 118.
?My lords, when it comes to the relatioship between
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a bank and its customer, or whoever is having dealings with a bank in connection with his funds with the bank, it is settled law that generally a Bank in its dealings with its customers owes to them a duty of care and thus negligence if proved is a ground for liability against a Bank by its customer. It follows therefore, that between the Appellant, a Bank and its customer, the Respondent, negligence will arise where the bank, breaches the implied duty to observe the standard expected of a reasonable banker in respect of dealings with the customer?s fund and the onus, of proving that it is not negligent lies on the Appellant, the Bank.
?I have looked at the APG and in construing its terms, I agree with the submission of learned Senior Advocate for the Respondent that in law in ascertaining what the intention of parties to a contract is, recourse can be had to both the contract documents and other letters or other correspondences forming part of the transactions between the parties leading to the contract. In this vein, I find that in construing the intention and terms of the parties in the Advance Payment Guarantee, which is
43
Exhibit CW1 M (1- 2), the contents of Exhibit DW2 F (1 – 3), which is the letter of offer of the Appellant expressly stating the terms and conditions for which the Respondent, the 1st Defendant and the Appellant in the contract of Advance Payment Guarantee were to be bound, are relevant and is a pointer to the real intention of the parties in the APG. See Cooperative Development Bank Plc V. Ekanem (2009) 16 NWLR (Pt. 1168) 585 @ p. 601, where it was held inter alia thus:
?In the interpretation of a contract involving several documents, the trial court can only determine the issues before it on the documents including LETTERS relating to the contract and conduct of the parties.?
Also inKaydee Ltd V. Minister of Federal Capital Territory (2010) 7 NWLR (Pt. 1192) 171 @ pp. 221-222, the Supreme Court expatiated on the issue of binding nature of terms of contract on parties to the contract, when it stated inter alia thus:
?If parties have agreed between them – selves upon the conditions for the formation of a contract and these conditions were embodied in a document, they are bound by the terms and conditions set down in the
44
contract documents. Having so bound them – selves, it is not the duty of the Court to make a contract for the parties.?
Still on the above issue regarding the intention of parties to a contract and the binding nature of terms voluntarily agreed to by parties, in Cooperative Development Bank Plc V. Ekanem (2009) 16 NWLR (Pt. 1168) 585, it was held inter alia thus:
?The entire law of contract is founded on the consensus or will theory of contract, which asserts that contractual obligations are self imposed and in terms of function of the courts, finds expression in the idea that the exclusive task of a Court in contract cases is to discover what the parties have agreed and give effect to it except in cases of mistake, duress and illegality
?The Respondent as Claimant pleaded and led evidence that the Appellant as 2nd Defendant had breached the duty of care created by the relationship of Banker/Customer in relation to the payment at a go all the funds secured in the Advance Payment Guaranty to the 1st Defendant when the contract for which the guaranteed payment
45
sum was to be made had either been poorly executed or out rightly not yet executed to the extent of the guaranteed sum. The Appellant denied the allegation of negligence against it by the Respondent. There is no gainsaying that where a Bank, such as the Appellant executes a guaranty in favor of the Respondent, it is not and cannot be for the mere fun of it, it is under a duty of care to ensure that the funds in its custody, for which it has executed a guaranty in favor of the Respondent on behalf of the 1st Defendant, is not dissipated in any manner inconsistent with the terms of the APG and in reckless disregards to the rights of the Respondent to get its work done to the extent of the guaranteed sum.
?The above, in my finding, was crucial to the Respondent for the carrying out its contract with 1st Defendant for the purpose of ensuring that its own contract with the Lagos State Government, for which it had contracted the 1st Defendant to the knowledge of the Appellant, was carried out without any breach as anything otherwise, as it happened in the instant appeal when the Lagos State Government terminated its contract with the Respondent on account of
46
the failures of the 1st Defendant, could be fatal or jeopardize the interest of the Respondent. The Appellant, a Bank owes as a duty of care to exercise utmost care in handling such sensitive and trust dependant transactions such as advance payment guaranty to secure the funds of the Respondent to ensure that it receives value for the funds that would be released to the 1st Defendant by the Appellant, a duty which the Appellant flunked without even batting an eye lid when it released the entire guaranteed sum in one fell swoop on 25/3/2009, seven clear months to the guaranteed tenor of the APG, to the 1st Defendant.
?Now, what is the defense of the Appellant? The lame excuses, or rather the unintelligent defense of the Appellant is simply this: that the APG itself was void because the Respondent did not pay the complete sum guaranteed, yet the Appellant had acted on it and paid out the entire guaranteed sum to the 1st Defendant, and further that at any rate it was not the business of the Appellant to monitor if any work has been done by the 1st Defendant at as its obligation, as it understood it, was simply to release the money to the 1st Defendant under
47
the terms of the APG. What a laughable and unintelligent defense by a banker!
My lords, if all the issue between the Respondent and the 1st Defendant was the mere release of the agreed advance sum to the 1st Defendant, would the Respondent need any guarantee from the 1st Defendant to be executed by a bank as reputable as the Appellant? I think not! It does appear to me that the Appellant is saying that it is or was indeed ignorant of the very essence of advance payment guarantee in transactions of the nature entered into by the parties. What was the guarantee for if all that the Appellant was or is to do was simply to release the entire guaranteed sum to the 1st Defendant even before the end of the tenor of the guarantee and without any work done to any reasonable extent by the 1st Defendant? Was the money a grant or a mere largesse from the Respondent to the 1st Defendant to be disbursed and dispensed by the Appellant at its discretion, whims and caprices? I certainly do not think so!
?In my finding therefore, and the Court below also found so and quite rightly too, the act of the Appellant amounted to gross negligence and crass indifference to its
48
fatal consequences on the funds and contract of the Respondent firstly with the Lagos State Government, and secondly with the 1st Defendant. Things, particularly financial transactions between a bank and its customer, do not and cannot just work as lackadaisical like the Appellant made it to appear like in this appeal. Indeed, and I so hold, that the Appellant showed complete lack of utmost good faith in its dealings with the guaranteed funds of the Respondent.
?Thus, as rightly found by the Court below, where in handling such business transaction it is shown, as was creditably shown by the Respondent on the proved evidence as in the printed record, that there was manifest negligence on the part of the Appellant, the duty of care is clearly breached or broken. I agree with and affirm the findings of the Court below as correct when it found that the Appellant in executing the advance payment guaranty on behalf of the 1st Defendant in favor of the Respondent, owed the Respondent a duty of care, which duty of care it clearly and unjustifiably breached, when it in one fell swoop, seven clear months to the end of the duration of the tenor of the APG, released
49
the entire guaranteed sum to the 1st Defendant on 25/3/20099 and which breach had resulted into colossal damages to the Respondent, in the form of termination of its contract with the Lagos State Government and the loss of the outstanding sum on the guaranteed sum for work not yet done by the 1st Defendant, and for which the Respondent was clearly entitled, as was also rightly held by the Court below, to judgment for the refund of the outstanding sum as well as general damages.
I find the above painstaking findings and decisions of the Court below as both impeccable and unimpeachable and cannot therefore, be disturbed by this Court but must be allowed to stand. However, I shall later return to the issue of quantum and heads of damages as awarded to the Respondent against the Appellant by the Court below to see whether or not the awards followed the correct principles of the law on award of damages.
?I have already held that the finding of the Court below that the Appellant was negligent was on firm ground and thus correct, and in law negligence, which simply is the omission to do something which a reasonable man, guided upon those considerations
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which ordinarily regulates the conduct of human affairs, would do or doing something which a prudent and reasonable man would not do, once proved attracts redress in form of damages. See Hamza V. Kure (2010) 10 NWLR (Pt. 1203) 630 @ p. 646, where the Supreme Court opined inter alia thus:
?Negligence?may consist in omitting to do something which ought to be done either in a different manner or not at all. Where any of the situations happen, then liability will accrue against the Defendant……?
In law, a contract of guarantee is not to be entered into lightly or feebly but rather one to be entered into with utmost good faith involving the voluntary shouldering of enormous obligation of trust and security of the party guaranteed in favor of the party in whose favor the guarantee is made. It should only be entered into after careful thought and consideration of its implications on the guarantor in the event of its breach. A guarantor, would therefore, not be let go on flimsy or lame excuses when he is called upon to bear his obligations under a contract of guarantee. Thus, the conditions under which a guarantor can be discharged
51
from or relieved of his liability under a contract of guarantee would include, inter alia, the following, none of which I find operates in favor of the Appellant in the instant appeal, namely: a. where his obligation under the guarantee contract has been satisfied; b. where the principal debt has been extinguished by an act or acts of the parties; c. where a limitation or prescriptive period has elapsed; and d. where a Court applies a presumption which operates to terminate the contract of guarantee. See FBN Plc V. Songonuga (2007) (Pt. 1021) 230 @ pp. 278 – 279.
I had earlier stated that the Appellant?s defense that the Respondent failed to pay into the account of the 1st Defendant the total sum of N58, 100, 000. 00 but rather paid into it the sum of N47, 310, 000. 00, which is a lesser amount, and thereby rendered the advance payment guarantee void was laughable and unintelligent, particularly coming from such a reputable bank in the mould of the Appellant. Now, here is my reason for so stating! The Appellant knew that the amount paid in my the Respondent, which the CW1 explained was subjected to withholding and other lawful deductions, was
52
less than the amount stated in the APG, yet it neither repudiated nor called for renegotiation, but admitted proceeding to administering the funds by releasing the entire sum in one fell swoop to the 1st Defendant on 25/3/2009, seven clear months before the expiration of the tenor of the APG, only to turn round when confronted by the Respondent on its negligent act to say that the APG was after all void! The APG that it had already in its discretion, as DW1 puts it, administered and released or paid over to the 1st Defendant in one fell swoop? If this defense or excuse coming from such a reputable banking institution in Nigeria, such as the Appellant, is not laughable and unintelligent, what else could be so?
In law, the Appellant being aware of the shortfall and having the option of either repudiating the APG or calling for renegotiation, but having proceeded to administer the funds protected by the APG has simply waived its rights, if any at all, to complain. I so hold. This is the real essence of the concept of waiver in our law and as codified in Section 169 of the Evidence Act, 2011. See Caribbean Trading & Fidelity Corporation V. N.N.P.C
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(1992) 7 NWLR (Pt. 252) 161, where Niki Tobi JCA (as he then was but later JSC and now in peaceful rest) had stated inter alia thus:
?Waiver carries some element of abandonment of a known legal right. By his conduct, the person gives a clear impression that he is not ready to pursue his legal right in the matter. He may not say so in specific words. He may not say so at all. But once his conduct shows that trend, a Court of Law will hold that he has waived his right.
Much earlier in 1983, the Supreme Court had in the celebrated case of Ariori V. Elemo (1983) 1 SCNLR 1 per Kayode Eso JSC., (God bless his soul) had expatiated on the concept of waiver inter alia thus:
If therefore, having full knowledge of the rights, interest, profits, or benefits conferred upon or accruing to him by and under the law, but he intentionally decides to give up all these or some of them, he cannot be heard to complain afterwards that he has not been permitted the exercise of his right or that he has suffered by his not having exercised his rights, He is, to put it in another way estopped from raising the issue”
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See also Hydro ? Quest Nig. Ltd V. B.O.N (1994) 1 NWLR (Pt. 318)41 @ p. 49; Auto Import V. Adebayo (2005) (Pt. 959) 44 @ pp. 122 – 123; NBCI V. Integrated Gas Nig. Ltd (1999) 8 NWLR (Pt. 613) 19 @ p. 128.
?Having firmly held as above that the Court below was right to have found the Appellant liable in negligence to the Respondent, let me now turn my attention to the issue of damages awarded against the Appellant by the Court below. The Respondent had claimed the refund of the sum of N24, 345, 496. 27 as representing the outstanding amount for work not yet done by the 1st Defendant but which fund had already been released by the Appellant to the 1st Defendant. The Respondent also claimed the sum of N50, 000, 000. 00 as general damages as wells as the cost of the action. In its assessment the Court below, satisfied on the quality of evidence led by the Respondent, awarded to the Respondent the sum of N24, 345, 496.27 claimed as special damages as proved against the Appellant and the two other Defendants. It then preceded further to award the sum of N500, 000.00 as general damages and another sum of N500, 000.00 as cost of the
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action both in favor of the Respondent against the Appellant and the two other Defendants. The other two Defendants before the Court below sued jointly and or severally with the Appellant are not appealing against the judgment of the Court below, at least not in this appeal.
?The law, as I understand it, is that damages being a constituent part of the tort of negligence, once proved, is not limited or circumscribed to special damages alone, as it does appear to be the correct line of thinking and reasoning of the Court below in granting the reliefs claimed by the Respondent against the Appellant. In law, as buttressed by a plethora of decided cases as are replete in our Law Reports, is that there is a distinction and very wide divide between special damages and general damages. These differences includes, though not intended as an exhaustive list of these differences, the following namely: 1: General damages need not be pleaded but special damages must be specifically pleaded; 2: General damages need not be proved but special damages must be specially proved; 3: In General damages the assessment is the duty of the Court but in special damages its
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assessment is based on what is specifically proved; 4. General damages refer to those damages, which flows naturally from the wrongful act of the Defendant but special damages are those damages which denotes those pecuniary losses which have crystallized in terms of cash and values before the trial. See Ijebu Ode Local Government V. Adedeji Balogun & Co (1991) 1 NWLR (Pt. 166) 36. See also Bello V. AG Oyo State (1986) 5 NWLR (Pt. 45) 828; UBN Ltd. V. Odusote Book Stores Ltd (1995) 9 NWLR (Pt. 421) 558.
The law is thus well settled that though there is need to specifically plead and strictly prove special damages, the rule requiring anyone asking for special damages to prove strictly that he did suffer such damages as he claimed, it does not means that the law requires a minimum measure of evidence or that the law lays down a special category of evidence required to establish entitlement to special damages. However, is required to establish entitlement to special damages is credible evidence of such a character as would suggest that he indeed is entitled to an award under that head otherwise the general law of evidence as to proof by preponderance
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or weight as usual in civil cases operates. Thus, General damages are such as the Court may give when the judge cannot point out any measure upon which they are to be measured except the opinion and judgment of a reasonable man. They are losses which flow naturally from the Defendant and the quantum need not even be pleaded or proved as it is generally presumed by law. They are presumed to flow from the negligence complained of and proved and in appropriate and deserving cases shall be awarded to assuage the injury done to the successful Claimant against the Defendant.
?It is for the above reason, an award of general damages would be improper when quantum of loss is ascertainable. It is to be taken into account in awarding general damages matters which have been considered in awarding special damages. On the other hand, special damages are those damages which are given in respect of any consequences reasonably and probably arising from the breach complained of. Thus they denote those pecuniary losses which have crystallized in terms of cash and values at the trial and must be specifically pleaded and strictly proved. In all however, there is no
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principles of law that forbids, in appropriate and deserving cases in an action founded in tort unlike in contract, from granting both special damages as pleaded and proved and general damages as found flowing naturally and directly from the injury done to the Claimant by the Defendant, in so far as in the circumstances of the case it does not amount to double compensation. See Ijebu Ode Local Government V. Adedeji Balogun & Co (1991) 1 NWLR (Pt. 166) 36. See also Bello V. AG Oyo State (1986) 5 NWLR (Pt. 45) 828; UBN Ltd. V. Odusote Book Stores Ltd (1995) 9 NWLR (Pt. 421) 558; Oshinjirin V. Elias (1970) All NLR 153; Warner International V. Federal Housing Authority (1993) 6 NWLR (Pt. 298) 148.
My lords, having earlier reiterated the applicable and guiding principles of law on the grant or refusal of special and general damages, I find that the Respondent did proved as required by law its claim for special damages against the Appellant and the two other Defendants and therefore, the Court below was right to have granted that head of special damages claim in favour of the Respondent against the Appellant. The Court below, therefore, acted on the
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correct principles governing the award of special damages on the proved evidence of the Respondent and such a correct award of special damages cannot be disturbed by this Court. As regard the claim for general damages of N50, 000, 000. 00, the law is that general damages need not even be pleaded or proved.
Having considered the entire circumstances of the case before the Court below, as in the printed record, I find that the award of N500, 000. 00 as general damages was founded on the correct principles of law on award of general damages and thus very proper. I also bear in mind that cost follows the event and I find that the cost of N500, 000. 00 awarded as cost of the action in favour of the Respondent against the Appellant has not been shown to be excessive or that it followed any wrong principles of law on award of cost to a successful party by the Court.
?In my finding, both the general damages and the cost of action, as assessed and awarded by the Court below in favour of the Respondent against the Appellant, were indeed very conservative and therefore, cannot be disturbed by this Court.
An appellate Court will not interfere with and
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disturb the correct decision of a trial Court, since it is not so much concerned with the correctness or wrongness of the reasons adduced by a trial Court for its decisions or conclusions but rather more concerned with whether the decision reached or conclusion arrived at was correct or wrong. See Alhaji Ndayako & Ors. V. Alhaji Dantoro & Ors. (2004) 13 NWLR (Pt. 889) 187 @ p. 198, where Edozie, JSC., had pronounced with finality on this vexed issue, thus:
?An appellate Court is only concerned with whether the judgment appealed against is right or wrong not whether the reasons given are right or wrong. Where the judgment is right but the reasons given are wrong, the appellate Court does not interfere. It is only where the misdirection has caused the Court to come to a wrong conclusion that the appellate Court will interfere….?
See also Abaye V. Ofili (1986) 1 NWLR (Pt. 15) 134; Ukejianya V. Uchendu 18 WACA 46.
?In the light of all the findings above, I hereby resolve all the three issues against the Appellant in favor of the Respondent. The appeal therefore, lacks merit and ought to be dismissed. Consequently, this appeal
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is hereby dismissed in its entirety.
In the result, the judgment of the High Court of Lagos State, Lagos Judicial Division, Coram; O. A. Ogala J., in Suit No: LD/253A/2011: Ato Properties Ld. V. S. E. I. C Construction Nigeria Limited & Ors., delivered on 10/11/2016, wherein the claims of the Respondent were granted against the Appellant is hereby affirmed.
There shall be no order as to cost.
MOHAMMED LAWAL GARBA, J.C.A.: As usual, my learned brother Biobele Abraham Georgewill, JCA has comprehensively dealt with the issues submitted for decision by the parties. In the lead judgement, a draft of which I read before now, and the views expressed therein are the same with mine. I just wish to emphasize that the Appellant, unexpectedly, would appear to have taken the Advance Payment Guarantee (APG) it issued in favour of the Respondent for granted by arguing that it was simply to receive and transmit the sum guaranteed without due regard to the terms and conditions thereof and the very essence of the guarantee issued by it by the tenor of the APG, the Appellant was required to exercise banking care and skill in the
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administration or disbursement of the sums received and not to merely act as conduit pipe for the transfer of sum between the Respondent and S.E.I.C. Construction Nigeria Limited. As demonstrated in the lead judgement, the Appellant was bound by the terms and conditions set out in the APG and had the contractual duty of care which it deliberately refused to exercise in disbursement of the Respondent’s fund’s resulting in the loss of the Sum claimed by the Respondent as special damages against it In the circumstances, it cannot escape responsibility and liability the breach of the legal and contractual duty of care owed under the APG and the High Court was right to have so found in its see judgment. See UBA v. Folarin (2003) 7 NWLR (818) 18. FBN LTD. V. African Petroleum Limited (1996) 4 NWLR (443) 438. NNB LTD v. Odiase (1993) 8 NWLR (310) 235.
I agree entirely, for the reasons set out in the lead judgement, that the appeal is completely bereft of merit and ought to be dismissed.
It is dismissed by me too in the terms of the lead judgement.
?ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.: I have had the rare opportunity of reading in
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draft, the leading judgment just delivered by my learned brother, BIOBELE ABRAHAM GEORGEWILL, JCA. He has extensively considered and exhaustively pronounced on the relevant issue(s) germane to the resolution of this appeal.
It is settled principle of law that an appellate Court will not interfere with and disturb the correctness or wrongness of the reasons adduced by a trial Court for its decisions or conclusions but rather be more concerned with whether the decision was right or wrong.
This Honourable Court in the recent case of OGUNDE v ABDULSALAM(2017) LPELR – 41875 (CA), my Lordship re iterated this settled principle thus;
“At any rate, the most determinant issue in any appeal is not so much as which issue for determination was preferred by the trial Court but rather whether it arrived at Correct findings and reached correct conclusions borne out by the pleadings and evidence as led before it by the parties. This is why in law once the Conclusion reached by a Court is correct not even insufficient or outright wrong reasons can warrant an appellate Court to disturb the correct findings. It may however, in my view, supply the correct
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findings. It may however, in my view, supply the correct reasons being higher in the hierarchy of Courts and imbued with greater wisdom and knowledge of law. It cannot under the guise of wrong reasons set aside a correct finding or conclusion of lower Court. In law, where a trial Court arrives at a conclusion will be to set aside or not on appeal is largely dependent on the question whether the conclusion reached was right or wrong on the evidence before the Court. An appellate Court is not much concerned with the reasons adduced in reaching a conclusion by a trial Court rather with the correctness or otherwise of the conclusion reached. Thus, if the conclusion reached is correct even if the reason is wrong, the appellate Court will not interfere with the correct conclusion.?
per GEORGEWILL, JCA (PP. 21 – 23, PARAS. E- C)
?In the light of the above and the reasoning enumerated in the lead judgment, I too agree that the appeal lacks merit and is hereby dismissed in its entirety. The judgment of the High Court of Lagos state, delivered by O. A OGALA, J on 10/11/2016 is hereby affirmed. I abide by all consequential orders.
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Appearances:
Chibueze Muobuikwu, Esq.For Appellant(s)
Charles U. Edosomwan SAN with him, Prince Osazu Isibor, Esq., Eric Ogiebor, Esq. and Funmilayo Tessy Meghoro, Esq.For Respondent(s)
Appearances
Chibueze Muobuikwu, Esq.For Appellant
AND
Charles U. Edosomwan SAN with him, Prince Osazu Isibor, Esq., Eric Ogiebor, Esq. and Funmilayo Tessy Meghoro, Esq.For Respondent