PROFESSIONAL CLEANING SERVICES LTD v. BENUE STATE GOVT & ORS
(2020)LCN/15465(CA)
In The Court Of Appeal
(MAKURDI JUDICIAL DIVISION)
On Friday, December 04, 2020
CA/MK/157/2018
RATIO
CONTRACT: WHETHER A PARTY MAY RAISE AN ISSUE AS TO THE ILLEGALITY OF A CONTRACT AFTER BENEFITING FROM SAME
No person shall, after benefiting from a transaction to which he is party, be heard to say that such a contract is illegal, void or voidable when it comes to him to fulfil his obligation under the transaction so far as the other party has done all he pledged to do under it. see Oilfield Supply Centre Ltd V Johnson (1987) 2 NWLR (Pt. 85) 265 and Attorney-General of Rivers State V Attorney-General of Akwa Ibom State (2011) 8 NWLR (Pt. 1248) 31. PER JOSEPH EYO EKANEM, J.C.A.
CONTRACT: INTERPRETATION OF DOCUMENTS
Primarily, the settled position of the law is that in the interpretation of documents, where the words used in the document are clear and unambiguous, they must be given their natural and ordinary meaning, unless to do so would lead to absurdity. It was explicitly stated by the Supreme Court inSolicitor General Western Nigeria v. Dr Festus O. Adebonojo & Ors (1971) LPELR-3100(SC), per Coker, JSC, thus, page 19 of the E-Report:
“It is the alphabet of his study to any lawyer that in the construction of documents, the words must first be given their simple and ordinary meaning and that under no circumstances may new or additional words be imported into the text unless the documents would be by the absence of that which is imported impossible to understand. The cardinal presumption is that the parties have intended what they have in fact said so that their words must be construed as they stand.
In Smith v. Lucas (1881) 18 Ch.D. 531 at 542 Jessel M.R. on this point observed that:
“One must consider the meaning of the words used not what one may guess to be the intention of the parties.”
See also: Union Bank of Nigeria Limited v. Sax Nigeria Limited & Ors (1994) LPELR-3390(SC); Union Bank of Nigeria Limited v. Ozigi (1994) LPELR-3389(SC). PER ONYEKACHI AJA OTISI, J.C.A.
CONTRACT: CONSTITUENTS OF A VALID CONTRACT
It is well settled law that for there to exist a valid contract between the parties, there must be an offer, an unqualified acceptance of the offer, consideration, intention to create legal relationship and capacity to contract; Omega Bank (Nig) Ltd v O.B.C. Ltd (2005) LPELR-2636(SC); Bilante International Ltd v NDIC (2011) LPELR-781(SC); BPS Construction & Engineering Company Limited v. Federal Capital Development Authority (supra), (2017) LPELR-42516(SC).
The offer may be verbal, written or even implied from the conduct of the offeror but it must be clear and unambiguous; Bilante International Ltd v NDIC (supra); Majekodunmi v. National Bank of Nigeria (1978) 3 SC 119 at 129; (1978) LPELR-1825(SC). The acceptance must as well be clear and unqualified; Omega Bank (Nig) Ltd v O.B.C. Ltd (supra). Acceptance of an offer may be demonstrated by the conduct of the parties as well as by their words or by documents that have passed between them; Majekodunmi v. National Bank of Nigeria (supra) at page 11 of E-Report. The overriding consideration in determining if there is a binding contract between the parties is to see whether there was a meeting of the minds between the parties, to wit, consensus ad idem. In order to establish that parties have formed a contract, there must be evidence of consensus ad idem between them; Bilante International Ltd v NDIC (supra); BPS Construction & Engineering Company Limited v. Federal Capital Development Authority (supra).
It is the duty of the trial Court to determine whether there is a binding contract between the parties, and this is done by considering the evidence led, documentary evidence tendered and accepted by the Court and oral testimony in line with pleaded facts; per Rhodes-Vivour, JSC in Bilante International Ltd v NDIC (supra). PER ONYEKACHI AJA OTISI, J.C.A.
Before Our Lordships:
Onyekachi Aja Otisi Justice of the Court of Appeal
Oludotun Adebola Adefope-Okojie Justice of the Court of Appeal
Joseph Eyo Ekanem Justice of the Court of Appeal
Between
PROFESSIONAL CLEANING SERVICES LIMITED APPELANT(S)
And
1. BENUE STATE GOVERNMENT 2. ATTORNEY – GENERAL OF BENUE STATE 3. MINISTRY OF WATER RESOURCES AND ENVIRONMENT RESPONDENT(S)
ONYEKACHI AJA OTISI, J.C.A. (Delivering the Leading Judgment): This appeal was lodged against the decision of the High Court of Justice, Benue State, sitting in Makurdi, delivered on 24/5/2018 by Hon. Justice A.O. Onum, trial Chief Judge, wherein the claims of the Appellant were dismissed in its entirety.
The case of the Appellant at the trial was that the 3rd Respondent, by a letter dated 26/5/2008, Exhibit C, engaged its services to carry out “Daily Sweeping and Grass Cutting of some major streets in Makurdi Metropolis with effect from 1st June, 2008,” at the cost of N3,000,000.00 per month. The said letter of engagement, Exhibit C, did not contain any other terms or preconditions in respect of the contract thereof but only directed the Appellant “to assume full operation on 1st June, 2008”. In acceptance of the offer, the Appellant began diligent performance of the contract as directed in Exhibit C, which led to the contract sum being reviewed upwards from N3,000,000.00 to N3,250,000.00 and subsequently to N3,500,000.00 per month. At the hearing, the Appellant tendered 35 receipts evidencing payments made by the 3rd Respondent to the Appellant on the said contract from 06/10/2008 to 7/3/2014 being payments up to December, 2013. After the payment of 7/3/2014, the 3rd Respondent stopped further payments but pleaded with the Appellant to continue performing the contract since the same was a running engagement, with a promise to clear the arrears of payments. The Appellant obliged and continued performance of the contract on the basis of this assurance. The 3rd Respondent however made no further payment to the Appellant. The Appellant wrote the 3rd Respondent demanding for payment of the arrears of the contractual sum, in response to which the 3rd Respondent reneged on its agreement and invalidated the contract. Aggrieved by the action of the 3rd Respondent, the Appellant instituted the suit at the lower Court claiming jointly and severally against the Respondents, the following reliefs:
(a) A DECLARATION that the contract between this Plaintiff and the defendants, backed by a letter of engagement dated 26th May, 2008 for the “DAILY SWEEPING AND GRASS CUTTING OF SOME MAJOR STREETS” within Makurdi Metropolis at the cost of Three Million Naira (N3,000,000.00) per month which was reviewed upwards by the defendants from Three Million Naira (N3,000,000.00) to Three Million, Two Hundred and Fifty Thousand Naira (N3,250,000.00) and subsequently to Three Million, Five Hundred Thousand Naira (3,500,000.00) per month is valid, legal, binding and subsisting.
(b) A DECLARATION that the purported invalidation of the contact by the 3rd defendant on the 8th day of July, 2015, vide a letter with reference No. MEUD/ENY/852/T/7 is null, void and of no effect whatsoever.
(c) A DECLARATION that the Plaintiff duly performed her obligation in the contract by sweeping daily, the designated major streets and cutting grass within Makurdi Metropolis from 1st day of June, 2008 the 8th day of July, 2015, when the 3rd defendant purportedly invalidated the said contract and stopped plaintiff from working.
(d) A DECLARATION that the defendants last paid plaintiff the sum of Three Million, Five Hundred Thousand Naira (N3,500,000.00) only, for the month of December 2013, on the 7th day of March, 2014 and since then have failed, neglected and/or refused to pay the plaintiffs the agreed sum for the Months of January, 2014 to July, 2015 when the 3rd defendant purportedly invalidated the said contact and stopped plaintiff from working.
(e) A DECLARATION that plaintiff is entitled to be paid the sum of Sixty-Three Million Naira (N63,000,000.00) only, being the outstanding payments owed plaintiff for Eighteen (18) Months, from January, 2014 to July, 2015, when the 3rd defendant purportedly invalidated the contract and stopped plaintiff from working.
(f) DECLARATION that the defendants are estopped from shying away from their contractual obligations, having duly and validly entered into the contract with the plaintiff and derived benefit from plaintiff’s performance of her part of the contract.
(g) AN ORDER setting aside, the 3rd defendant’s purported invalidation of the contract between the 1st defendant and the plaintiff, on the 8th day of July, 2015, vide a letter with Reference No. MEUD/ENV/852/ T/7.
(h) AN ORDER directing the defendants to pay the plaintiff the sum of Sixty Three Million (N63,000,000.00) only, being the outstanding payments owed plaintiff for Eighteen (18) Months, from January, 2014 to July, 2015, when the 3rd defendant purportedly invalidated the said contract and stopped Plaintiff from working.
(i) AN ORDER directing the defendants to pay the Plaintiff the sum of Fifteen Million (N15,000,000.00) Naira only as General Damages for breach of contract.
(j) AN ORDER directing the defendants to pay the Plaintiff Ten Percent (10%) interest on the judgment sum, from the date of Judgment until the judgment debt is fully liquidated.
(k) AN ORDER directing the defendants to pay the plaintiff the sum of Five Hundred Thousand Naira (N500,000.00) only, being the cost of this suit.
See pages 204 – 206 of the Record of Appeal.
In their Joint Statement of Defence, the Respondents denied the Appellant’s claims and the existence of any contractual relationship. Their position was that the contract allegedly awarded to the Appellant, vide Exhibit C, by Mr. E.I. Wuessey, the then Permanent Secretary, Ministry of Water Resources and Environment, was a fraud. The case of the Respondents was that the said Mr. E.I. Wuessey, had no power to award such a contract which was above the sum of N1,000,000.00. The Respondents also contended that the Appellant failed to formalize the contract with the Ministry of Finance and the Tenders Board as statutorily required and was without Executive Council approval therefore invalid.
At the close of hearing, the learned trial Judge dismissed the suit in its entirety on 24/5/2018. Dissatisfied with the said judgment, the Appellant lodged the instant appeal by Notice of Appeal dated 30/5/2018, on four grounds of appeal, pages 275 – 279 of the Record of Appeal.
The parties filed Briefs of Argument in line with the Rules of this Court. The Appellants’ Brief, which was settled by Edward Agena, Esq., was filed on 18/7/2018. The 1st – 3rd Respondents’ Brief, which settled by Obande Idikwu, Esq., DDPP, MOJ, Benue State, was filed on 18/9/2020 but deemed properly filed and served on 17/11/2020. The Appellant’s Reply Brief was filed on 30/9/2019 but deemed properly filed and served on 17/11/2020. These Briefs were respectively adopted at the hearing of the appeal on 17/11/2020 by E. O. Agena, Esq., with J.E. Eyam, Esq., for the Appellant and by J. I. Wombo, Esq., for the Respondents.
The Appellant distilled a sole issue for the determination of this appeal:
Whether, from the totality of the evidence led at the lower Court, as well as the facts and circumstances of this case, there was a valid and enforceable contract between the Appellant and the Respondents (Distilled from Grounds 1, 2 and 3).
The Respondents adopted the sole issue as formulated by the Appellant. I shall also adopt the same issue for determination of this appeal.
For the Appellant, it was submitted that there was a valid and enforceable contract between the parties on the basis of the contents of Exhibit C, other documents tendered and admitted in evidence, the oral evidence led, as well as the conduct of the parties to the contract. The learned trial Chief Judge had dismissed the Appellant’s case, in the following words:
“In fact nothing on the face of the pleadings shows, even remotely, that the parties ever negotiated and agreed orally on any terms of a contract relationship before Exhibit C was written to the plaintiff’s Managing Director/CEO. That document, the essential details of which I have already reproduced is, no doubt, only a unilateral document addressed to Robert Tyough by one E. I. Wuessey who claimed to write on behalf of the Honourable Commissioner in charge of the 3rd defendant Ministry. With due respect for the notion, which the plaintiff may hold, the document lacks in the element of mutuality, that is a sine qua non in any contractual relationship…
On the foregoing note, I do not see any contract relationship between the parties that can be judicially enforced by way of any or all of the several reliefs being claimed in the suit. The suit accordingly fails and it is hereby dismissed in its entirety.”
See pages 273 – 274 of the Record of Appeal.
It was submitted for the Appellant that the reasons given by the learned trial Chief Judge to dismiss the Appellant’s Suit were not tenable in law, That the first finding of the learned trial Chief Judge that “In fact nothing on the face of the pleadings shows, even remotely, that the parties ever negotiated and agreed orally on any terms of a contract relationship before Exhibit C was written to the plaintiffs Managing Director/CEO” was not borne out of the evidence on the Record. The Chief Judge had raised it suo motu and ought not to have decided on it without affording the parties an opportunity to address him on it. Failing to do so would occasion a miscarriage of justice. Counsel cited and relied on the following cases: Fulani v. Idi (1990) 5 NWLR (pt. 150) 311; Ugo v. Obiekwe (1989)1 NWLR (Pt. 99) 566; Oje v. Babalola (1991) 4 NWLR (Pt. 185) 267; Ejezie v. Anuwu (2008) All FWLR (Pt. 422) 1005 at 1049. Counsel submitted the findings of the learned trial Chief Judge amounted to speculation. Courts of law should not embark on speculation, relying on I.B.N. Ltd. v. A. G. Rivers State (2008) All FWLR (Pt. 417) 1 at 36 – 37; Overseas Construction Co. (Nig.) Ltd. v. Creek Enterprises (Nig.) Ltd. (1985) 3 NWLR (Pt.13) 407; Bakare v. A.C.B. Ltd. (1986) 5 S.C. 48; Ejezie v. Anuwu (supra) at 1041. The rule against speculation is even more strict in contracts, citing the case of UBN Plc v. Ajagbule (2012) All FWLR (Pt. 611) 1413 at 1438; Nneji v. Zakhem Construction (Nig.) Ltd. (2006) All FWLR (Pt. 330) 1021 at 1039 S.C.; Kachia v. Hadi (2012) All FWLR (Pt. 650) 1403 at 1416. Further, it was submitted that the evidence of the oral agreements the parties had before Exhibit C was written by the 3rd Respondent to the Appellant was not relevant and inadmissible in law, citing Haruna v. A. G. Federation (2012) 9 NWLR (Pt. 1306) 419 at 446; Sijuade v. Oyewole (2012) 11 NWLR (Pt. 1311) 280 at 300; Buhari v. Obasanjo (2005) 13 NWLR (Pt. 941) 1. The Court was urged to set aside the above finding.
The Appellant’s Counsel also complained about the finding made by the learned trial Chief Judge that “That document, the essential details of which I have already reproduced is, no doubt, only a unilateral document addressed to Robert Tyough by one E.I. Wuessey who claimed to write on behalf of the Hon. Commissioner in charge of the 3rd defendant Ministry. With due respect for the notion, which the plaintiff may hold, the document lacks in the element of mutuality that is a sine qua non in any contract relationship…” and the finding that “I agree with the line of submission on behalf of the defence that if the plaintiff had desired a contract relationship with the defendants she should have gone a step further to formerly accept the written offer, which Exhibit C appears to be, by entering into a written agreement between the parties.” It was argued, assuming without conceding, that Exhibit C was a mere offer, it was fully and unconditionally accepted by the Appellant, as acceptance can be in any form, relying on UBA Plc v Ogunyemi (2017) All FWLR (PT 870) 1158 at 1168; BPS Construction & Engr. Co. Ltd v FCDA (2017) All FWLR (PT 878) 405 at 429 – 430. In determining whether there has been an acceptance or offer, the total circumstances of the case, including the conduct of the offeror and offeree are factors to be considered, citing Abba v SPDCNL (2013) All FWLR (PT 708) 812 at 834; Co-operative Development Bank Plc v Ekanem (2010) All FWLR (PT. 511) 833 at 846. It was posited that from the contents of Exhibit C, the mode of acceptance of the Respondent’s offer was by conduct.
Mr. Agena for Appellant submitted that when a contractual relationship between the parties is in series of documents, the Court must consider all the documents together; relying on Zubairu v Joseph (2016) All FWLR (PT. 853) 1682 at 1718. Reference was made to the documents tendered, especially Exhibit C7 in which the Respondents had admitted their indebtedness, as well as to the conduct of the parties.
The trial Court also made the following finding:
“…Even then paragraph 3 of the document is clear on the point that the services, if at all, envisaged were to be carried out only upon monthly release of money to the plaintiff as opposed to one that could be done in anticipation of payment…”
It was contended that this finding ran contrary to the documentary and oral evidence led by the Appellant at the trial, which showed that the Appellant performed the cleaning services before it was paid. The Court is enjoined to give effect to words used in a document and to construe the entire document in order to ascertain the intention of the parties.
The trial Chief Judge found:
“The mere fact the defendants may have wasted some money on the plaintiff over time depicted in some of the documents tendered did not translate the relationship into that of a contract that can be enforced by way of any judicial orders.”
It was submitted that the existence of a contract could be inferred from the conduct of the parties over the years, citing Abba v SPDCNL (supra). It was further argued that this finding by the trial Court enabled the Respondents to escape through the backdoor from their binding contractual engagement with the Appellant. A party who has induced another party to enter into a contract with it and enjoyed the benefits of that contract cannot turn around to impugn the said contract or refuse to be bound by its terms. Reliance was placed on Okechukwu v Onuorah (2001) FWLR (PT. 33) 219 at 231 and a number of other authorities to urge the Court to resolve this issue in favour of the Appellant and allow the appeal.
For the Respondents, it was submitted that there was no valid and enforceable contract between the Appellant and the Respondents. It was submitted that Exhibit C, relied on the Appellant, was a Letter of Engagement solely awarded by one Mr. E. I. Wuessey, then Permanent Secretary, Ministry of Water Resources and Environment, Benue State, contrary to the provisions of Chapter 23 Section 2305 of the Benue State Financial Instructions (Revised December, 2013). Mr. E. I. Wuessay, as an Accounting Officer, had no power to award a contract above the sum of N1,000,000.00. A contract of such a magnitude could only have been awarded by the Governor of Benue State or by the Benue State tenders Board by the Benue State Financial Instructions. The documents tendered by the Appellant did not show that the requisite approval of the Executive Governor or the Benue State Tenders Boards was sought and obtained; nor that the said contract was subsequently ratified by the Executive Governor or the Benue State Tenders Board. The provisions of Chapter 23 Section 2306(i) and (ii) of the Benue State Financial Instruction (Revised Edition, 2013) were not complied with. It was argued that the contract was for these reasons tainted with illegality and as such not binding on any of the parties. An illegal contract is unenforceable, relying on Ajayi v Total Nigeria Plc (2013) Vol 226 LRCN (PT 1) 65 at 82, 86; Pan Bisbilder v First Bank (2000) FWLR (PT 2) 177 at 191 inter alia.
It was further argued that Exhibit C could be seen as a letter of intent, which the Appellant should have gone ahead to regularize with proper documentation and a formal agreement with terms and conditions in order to bring the contract into existence. There being no contract, Counsel posited that invoking the doctrine of estoppel against the Respondents cannot stand. Estoppel can only arise when a party seeks to renege on a legal obligation, which is contended not to be the case here, relying on FBN Ltd v Moba Farms Ltd (2005) 8 NWLR (PT. 928) 492 at 517-520. In consideration of the fact that both parties were equally guilty of illegality, the Respondents made no counterclaim against the Appellants in the lower Court for all payments advanced to the Appellant under the illegal contract.
Counsel posited that Exhibit C as a contract document was inchoate. There was no document to substantiate the upward reviews of the contract as contended by the Appellants. In the absence of a formal agreement stipulating the terms and conditions for an upward review of the remuneration, it was submitted that it could be concluded that the parties had no consensus on this point. The Court was urged to hold that the receipts tendered in evidence at the trial Court claiming to amend the stipulated remuneration in Exhibit C were inadmissible in the absence of a formal contract duly executed by the parties. The Court was finally urged to declare the contract a nullity and resolve the sole issue in favour of the Respondents, dismissing the appeal.
The Appellant in the Reply Brief submitted that Mr. E. I. Wuessey was the Permanent Secretary in charge of the 3rd Respondent at the time Exhibit C was made and that he acted in his official capacity as an authorized agent of the respondents in signing Exhibit C on behalf of the Honourable Commissioner of the 3rd Respondent. DW1 had also admitted under cross-examination that the Permanent Secretary was empowered to sign contracts on behalf of the 3rd Respondent. It was submitted that the evidence of DW1 placed Exhibit C in position to enjoy the presumption of regularity provided for in Section 168 (1) and (2) of the Evidence Act, 2011. It was posited that Exhibit C, by presumption of regularity, was presumed by law to have been duly executed. The onus was on the Respondents to lead evidence in rebuttal of this presumption. The provisions of Sections 131 and 132 of the Evidence Act, 2011 were cited. Reliance was also placed on Omoboriowo v. Ajasin (1984) 1 SCNLR 108; Buhari v. Obasanjo (2005) 13 NWLR (Pt. 941) 1; Buhari v. INEC (2008) 19 NWLR (Pt. 1120) 246; Osawaru v. Ezeiruka (1978) 6-7 SC 135.
Appellant’s Counsel further argued that the Benue State Financial Instructions (Revised December, 2013) was not applicable to the contract in issue in this appeal, the said contract having not been awarded by the Permanent Secretary of the 3rd Respondent. Further, the said financial regulations were made in 2013 and was not shown to have retrospective effect. It could not therefore apply to the Appellant’s contract that was awarded on 26/5/2008, 5 years before the said Benue State Financial Instructions (Revised December, 2013) came into effect. If the Respondents had intended that the said Benue State Financial Instructions, revised Edition, December, 2013 should apply to the contract in issue, when it came into effect, the Appellant would have been directed to comply with it, which was not the case.
On the contention that the contract in issue was an illegal contract and unenforceable against the Respondents, it was submitted that the issue of illegality of contract cannot be raised for the first time on appeal without the leave of Court, relying inter alia on Da’u v. State (2016) 7 NWLR (Pt. 1510) 83 at 109; Awuse v. Odili (2005) 16 NWLR (Pt. 952) 416; Ojiogu v. Ojiogu (2010) 9 NWLR (Pt. 1198) 1. Assuming without conceding that the issue of illegality was raised by the Respondents at the lower Court, it was submitted that the Respondents did not plead illegality of contract in their statement of defence. Where a contract is not ex facie illegal or does not offend public policy, the question of illegality ought to be raised in the pleadings and proved by evidence, relying on authorities including George & Ors v Dominion Flour Mills Ltd (1963) NSCC 54 at 57; Ajayi v Total (Nig) Plc (2013) 15 NWLR (PT 1378) 423 at 441; West Construction Co. Ltd v Batalha (2006) ALL FWLR (PT 315) 1 at 16. The Court was urged to hold that the Respondents had failed to plead or prove illegality. The Court was further urged to hold that the allegation of fraud was also not proved beyond reasonable doubt as required by Sections 135(1) and 136(1) of the Evidence Act, 2011. Relying on Gateway Holdings Ltd v S.A.M. & T. Ltd (2016) 9 NWLR (PT 1518) 490, it was submitted that a party cannot benefit from a transaction and turn around to plead illegality. Further, the Respondents who did not raise the argument of illegality in the lower Court must be consistent in the case presented before the lower Court and on appeal.
Resolution
This appeal fits within the narrow compass of whether the Appellant established that there was in existence a legally enforceable contract between the parties. It is well settled law that for there to exist a valid contract between the parties, there must be an offer, an unqualified acceptance of the offer, consideration, intention to create legal relationship and capacity to contract; Omega Bank (Nig) Ltd v O.B.C. Ltd (2005) LPELR-2636(SC); Bilante International Ltd v NDIC (2011) LPELR-781(SC); BPS Construction & Engineering Company Limited v. Federal Capital Development Authority (supra), (2017) LPELR-42516(SC).
The offer may be verbal, written or even implied from the conduct of the offeror but it must be clear and unambiguous; Bilante International Ltd v NDIC (supra); Majekodunmi v. National Bank of Nigeria (1978) 3 SC 119 at 129; (1978) LPELR-1825(SC). The acceptance must as well be clear and unqualified; Omega Bank (Nig) Ltd v O.B.C. Ltd (supra). Acceptance of an offer may be demonstrated by the conduct of the parties as well as by their words or by documents that have passed between them; Majekodunmi v. National Bank of Nigeria (supra) at page 11 of E-Report. The overriding consideration in determining if there is a binding contract between the parties is to see whether there was a meeting of the minds between the parties, to wit, consensus ad idem. In order to establish that parties have formed a contract, there must be evidence of consensus ad idem between them; Bilante International Ltd v NDIC (supra); BPS Construction & Engineering Company Limited v. Federal Capital Development Authority (supra).
It is the duty of the trial Court to determine whether there is a binding contract between the parties, and this is done by considering the evidence led, documentary evidence tendered and accepted by the Court and oral testimony in line with pleaded facts; per Rhodes-Vivour, JSC in Bilante International Ltd v NDIC (supra).
The main document relied on by the Appellant as evidencing the contract, but denounced by the Respondents, is Exhibit C, also tendered by the Respondents as Exhibit E. I shall reproduce the said Exhibit C hereunder:
Robert Tyough
(Managing Director/ CEO
Professional Cleaning Services
No. 31, Old Otukpo Road
High-Level Makurdi.
ENGAGEMENT OF “PROFESSIONAL CLEANING SERVICES” FOR THE DAILY SWEEPING AND GRASS CUTTING OF SOME MAJOR STREETS IN MAKURDI METROPOLIS WITH EFFECT FROM 1st JUNE, 2008
1. You are aware that, the present administration of Rt. Hon. Gabriel Suswam has stepped up efforts in ensuring clean environment in the State.
2. Consequent upon this, State Government through the Ministry of Water Resources and Environment, Makurdi has engaged your Company for the daily sweeping and grass cutting within Makurdi town.
3. The government has also approved that the sum of N3,000,000.00 (Three Million Naira) Only on monthly basis should be released to the Company to carry out its assignment.
4. Your company is to assume full operation on 1st June, 2008.
5. Accept my congratulations.
(signed)
E. I. WUESSEY
Permanent Secretary
For: Hon. Commissioner
See page 41 of the Record of Appeal.
Primarily, the settled position of the law is that in the interpretation of documents, where the words used in the document are clear and unambiguous, they must be given their natural and ordinary meaning, unless to do so would lead to absurdity. It was explicitly stated by the Supreme Court inSolicitor General Western Nigeria v. Dr Festus O. Adebonojo & Ors (1971) LPELR-3100(SC), per Coker, JSC, thus, page 19 of the E-Report:
“It is the alphabet of his study to any lawyer that in the construction of documents, the words must first be given their simple and ordinary meaning and that under no circumstances may new or additional words be imported into the text unless the documents would be by the absence of that which is imported impossible to understand. The cardinal presumption is that the parties have intended what they have in fact said so that their words must be construed as they stand.
In Smith v. Lucas (1881) 18 Ch.D. 531 at 542 Jessel M.R. on this point observed that:
“One must consider the meaning of the words used not what one may guess to be the intention of the parties.”
See also: Union Bank of Nigeria Limited v. Sax Nigeria Limited & Ors (1994) LPELR-3390(SC); Union Bank of Nigeria Limited v. Ozigi (1994) LPELR-3389(SC). Therefore, the words used in Exhibit C, which are straightforward and clear, ought to be accorded and ascribed their ordinary, grammatical and plain meaning, by established judicial practice;UNIC Insurance Plc v. Fadayi & Ors (2018) LPELR-45571(CA).
Now, the operative words in Exhibit C were:
2. …State Government through the Ministry of Water Resources and Environment, Makurdi has engaged your Company for the daily sweeping and grass cutting within Makurdi town.
3. The government has also approved that the sum of N3,000,000.00 (Three Million Naira) only on monthly basis should be released to the Company to carry out its assignment.
4. Your company is to assume full operation on 1st June, 2008.
From these words, the following can be deduced: The Appellant was engaged for the daily sweeping and grass cutting within Makurdi Town on a monthly payment of N3,000,000.00, commencing from 1/6/2008. In furtherance of this agreement, the Appellant commenced work.
The Respondents’ Counsel had argued that the Exhibit C was, at best, a letter of intent. Black’s Law Dictionary, Ninth Edition at page 988 defines a letter of intent:
A written statement detailing the preliminary understanding of parties who plan to enter into a contract or some other agreement; a noncommittal writing preliminary to a contract.
A letter of intent is not meant to be binding and is generally not enforceable, unless there has been some commitment made; BPS Construction & Engineering Company Limited v. Federal Capital Development Authority (supra). An examination of the words in Exhibit C however do not reveal an intention to enter into a contract. The words used are definite in nature and not ambulatory. Exhibit C was therefore by no means a letter of intent.
There was no other condition attached to the performance of the agreement on the part of the Appellant or of the Respondents. Therefore, the arguments for the Respondent that there was need for further documentation and a formal agreement with other terms and conditions are non sequitur. Exhibit C was made in 2008 by the State Government through the Ministry of Water Resources and Environment, Makurdi. The provisions of Chapter 23 Sections 2305 and 2306(i) and (ii) of the Benue State Financial Instruction (Revised Edition, 2013) relied on the Respondents were not said to have a retrospective application.
The Respondents’ Counsel further argued that the contract in Exhibit C was illegal in that the provisions of Chapter 23 Sections 2305 and 2306(i) and (ii) of the Benue State Financial Instruction (Revised Edition, 2013) were not complied with. An illegal contract is one that is expressly or impliedly forbidden by statute, or seeks to perform some act that is contrary to public policy; Sodipo v Lemninkainen OY (1986) LPELR-3087(SC), (1986) 1 SC 197; Pan Bisbilder v First Bank (supra), (2000) LPELR-2900(SC). An illegal contract is void and cannot be the foundation of any legal right; Onyiuke v Okeke (1976) LPELR-8039(SC); Alao v ACB Ltd (1998) LPELR-407(SC). It is completely unenforceable.
Although this issue was not pleaded or otherwise raised before the lower Court, Exhibit C has not been shown to be ex facie illegal. No circumstances surrounding its making have been demonstrated to have a taint of illegality. Exhibit C was made in 2008 by the State Government through the Ministry of Water Resources and Environment, Makurdi. Exhibit C has not been shown to be affected by the provisions of Chapter 23 Sections 2305 and 2306(i) and (ii) of the Benue State Financial Instruction (Revised Edition, 2013). Neither fraud nor illegality was therefore proved by the Respondents. The position in law is that a contract that is ex-facie not illegal or offends public policy will be enforced by the Courts; West Construction Co. Ltd v Batalha (supra).
The Appellant commenced full operations in line with Exhibit C. Under cross examination, DW1 admitted, page 234 of the Record of Appeal:
“I was responsible for supervising the contract (sic) in issue. The plaintiff performed the contract in line with is(sic) mandate. Based on her satisfactory performance the(sic) paid for the month(sic) of June, 2008 – Dec. 2013.”
In other words, the Respondents supervised the dutiful performance of the contract by the Appellant and consequently paid them from June, 2008 – December, 2013. It was therefore not contested that the Appellant performed the contract in line with Exhibit C.
Now, within that period, the Appellant averred that the contract sum was reviewed and enhanced, first to N3,250,000.00 then to N3,500,000.00. The Appellant tendered the receipts of payment as Exhibits C7. The Respondents contended that there were no terms and conditions to validate the increase in the payment but they did not dispute the authenticity of the receipts, Exhibits C7. These receipts were not at all challenged in cross examination. In other words, there was nothing before the Court to suggest that the increased payments represented by Exhibit C7 were made in error or by fraud.
The point must be made that there was no irregularity surrounding the signing of Exhibit C by the Permanent Secretary for the Hon. Commissioner shown to be fatal to the Appellant’s claim. Under cross examination, DW1, page 234 of the Record of Appeal, testified that the Permanent Secretary of the Ministry is its Chief Accounting Officer and is authorized to sign contracts on behalf of the Commissioner. The receipts, Exhibit C7, as well as the evidence of DW1, confirm that the Appellant was paid by the Respondents in furtherance of the agreement they had in Exhibit C from 2008 – 2013.
In Omega Bank (Nig) Ltd v O.B.C. Ltd (supra), per Dahiru Musdapher, JSC (as he then was) elucidated, page 26 of the E-Report:
“I think I need to emphasize and reiterate that although Courts may not make contract for the parties where none exists, the Courts will seek to uphold bargains made commercially, wherever possible, recognising that they often record the most important agreements in crude and summary fashion and will seek to construe any documents fairly and broadly without being too astute or subtle in finding defects. See Brown v. Gould (1972) 1 Ch. 53; Hillas and Co. Ltd. v. Arcos Ltd. (1932) 147 LT 503; (1932) AER 494.
After due consideration of all the circumstances and if satisfied that there was an ascertainable and determinate intention to contract, the Courts will strive to give effect to that intention looking at the intent and not the mere form.” (Emphasis mine).
The learned trial Chief Judge found, page 273 of the Record of Appeal:
“The plaintiff in the instant case is firm on the point that the contract relationship she had with the defendants was on the basis of Exhibit C. In fact, nothing on the face of the pleadings shows, even remotely, that the parties ever negotiated and agreed orally on any terms of a contract relationship before Exhibit C was written to the plaintiff’s Managing Director/CEO.”
I am unable to agree with this line towed by the learned trial Chief Judge. The Court cannot go outside the oral and documentary evidence adduced before it to make these enquiries. The Appellant’s Counsel was right in his argument that the learned trial Chief Judge raised this issue suo motu without giving the parties opportunity to respond thereto, which Courts are enjoined to refrain from to avoid occasioning a miscarriage of justice; Tinubu v IMB Securities Plc (2001) LPELR-3248(SC); Eagle Super Pack (Nigeria) Ltd v ACB Plc (2006) LPELR-980(SC). Indeed, the learned trial Chief Judge, as it would seem, delved into conjecture; which Courts of law are also enjoined to avoid; ACB Plc v Emostrade Ltd (2002) LPELR-207(SC); Agip (Nigeria) Ltd v Agip Petroleum International & Ors (2010) LPELR-250(SC). Courts decide issues on facts established before them and on laws, not on speculative theories.
The uncontroverted evidence before the trial Court revealed that the Appellant, pursuant to the terms of Exhibit C in June, 2008, commenced the daily sweeping and grass cutting within Makurdi town. The Respondents commenced payments to the Appellant in line with the terms of Exhibit C in June, 2008. The payments were later reviewed and enhanced, as revealed by Exhibit C7. The Appellant stanchly performed its part of the contract, as was confirmed by DW1. It would therefore be unconscionable to allow the Respondents to resile from their responsibilities under that said contract at this stage. The sole issue distilled for determination is therefore resolved in favour of the Appellant.
In addition to the claim for payment on the contract sum, the Appellant also claimed N15 Million as general damages. This claim cannot however be granted. The settled position of the law is that in contract damages are awarded for the loss arising from the breach. Such loss must be real and within the contemplation of the parties, not speculative or imagined; GKF Investment Nigeria Ltd v NITEL (2009) LPELR-1294(SC); G. Chitex Industries Ltd v Oceanic Bank International (Nig) Ltd (2005) LPELR-1293(SC).
The appeal is meritorious and is hereby allowed. I make the following orders: The judgment of the trial Court delivered on 24/5/2018 in favour of the Respondents is hereby set aside. It is further ordered that judgment is entered in favour of the Appellant in line with paragraphs 41 (a) – (h) of the Amended Statement of Claim. The claim for general damages of N15 Million is refused. It is further ordered that the Appellant is entitled to 10% interest on the judgment sum until the judgment sum is fully liquidated. The Appellants are also entitled to costs which is assessed at N100,000.00 against the 1st, 2nd and 3rd Respondents.
OLUDOTUN ADEBOLA ADEFOPE-OKOJIE, J.C.A.: I have read in draft the judgment of my learned brother, Onyekachi Otisi, JCA and I am in agreement with my Lord’s reasoning and conclusion. I concur therewith.
JOSEPH EYO EKANEM, J.C.A.: I read in advance the lead judgment of my learned brother, O.A. Otisi, JCA, which has just been delivered. I agree with the reasoning and conclusion therein that the appeal has merit.
Exhibit “C” is clearly and unequivocally a letter written on behalf of Honourable Commissioner awarding a contract to or engaging the appellant to daily sweep and cut grass within Makurdi town at the sum of N3,000,000.00 per month. The commencement date is 1/6/2018. The appellant commenced work as required thus showing its acceptance of the engagement. The law is that an offeree can demonstrate its acceptance of an offer by conduct. See Metibaiye V Narelli International Ltd (2009) 16 NWLR (Pt. 1167) 326 and NRMA and FC V Johnson (2019) 2 NWLR (Pt. 1656) 247.
There is nothing ex- facie illegal about Exhibit C and so the respondents ought to have pleaded illegality raised by them in this Court. Since it was not pleaded, the issue is a phantom issue. Furthermore, the appellant performed its obligation under the contract and so the respondents took benefit from it. No person shall, after benefiting from a transaction to which he is party, be heard to say that such a contract is illegal, void or voidable when it comes to him to fulfil his obligation under the transaction so far as the other party has done all he pledged to do under it. see Oilfield Supply Centre Ltd V Johnson (1987) 2 NWLR (Pt. 85) 265 and Attorney-General of Rivers State V Attorney-General of Akwa Ibom State (2011) 8 NWLR (Pt. 1248) 31.
The respondents who supervised the performance of the contract through DW1 and made payments and, in the course of time, enhanced payment to the appellant for the contract cannot pretend that there was no contract. If there was no contract, what did they supervise and what did they pay for?
It is for the above reasons and the more comprehensive reasons contained in the lead judgment of my learned brother that I allow the appeal and set aside the judgment of the trial Court. I abide by the consequential orders made in the lead judgment.
Appearances:
E. O. AGENA, ESQ., with him, J. E. EYAM, ESQ. For Appellant(s)
J. I. WOMBO, ESQ., C.L.O., M.O.J., BENUE STATE – for 1st, 2nd and 3rd Respondents For Respondent(s)
