3PLR – AIROE CONSTRUCTION & CIVIL ENGINEERING CO. LTD. V. THE UNIVERSITY OF BENIN

POLICY, PRACTICE AND PUBLISHING, LAW REPORTS  3PLR

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AIROE CONSTRUCTION & CIVIL ENGINEERING CO. LTD.

V.

THE UNIVERSITY OF BENIN

 

SUPREME COURT OF NIGERIA

SUIT NO. SC 54/1984

1ST MARCH, 1985

3PLR/1985/6  (SC)

 

OTHER CITATIONS

(1985) NWLR (Pt.2)287

 

BEFORE THEIR LORDSHIPS:

BELLO, J.S.C.

OBASEKI, J.S.C.

NNAMANI, J.S.C.

UWAIS, J.S.C.

OPUTA, J.S.C.

 

REPRESENTATION

Chief F.R.A. Williams, SAN (with him Mr. Akerele) – for the Appellant

Mr. J.A. Rerri – for Respondent

 

EDITORS

[Sam Eleanya, Agboola Omolola Oluwafolakemi, Eleanya Kalu Vincent, Eleanya Ugochi Vine]

 

MAIN ISSUES

Contract – Claim for general and special damages for breach of building contract – Contract in stages – Money for completion of stage due – Failure to pay debt due.

Practice and Procedure – Appropriate claim – Whether claim for debt due or special damages for non-payment – Appropriate order for trial judge to make where there is insufficiency of evidence to decide issue either way – Non-suit or dismissal.

 

MAIN JUDGEMENT

Judgment of Court Delivered by Muhammadu Lawal Uwais

The appellant company, as plaintiff, brought an action in the Bendel State High Court, Benin City, against the respondent as defendant. Paragraph 31 of the plaintiff’s state­ment of claim which specified the nature of the suit against the defendant reads:

“And the plaintiff claims the sum of NI50, OOO.OO made up of Special and General Damages for Award of Contract entered into between the plaintiff and the Defendant on the 2nd December, 1975 (sic) and 2nd April, 1975 respectively.

SPECIAL DAMAGES

(a) In respect of Senior Staff Quarter one Modem type 3 etc	­N44,412.50
(b) In respect of the Professorial Building and boys’ Quarters ­	N 17,767.29
	N 62,197,29
General Damages	N 87,821.21
Total	N I50,OOO.OO(sic)

(c)     The Plaintiff also claims 10% Bank Rate interest or the cur­rent bank rate interest on the Special claim (sic) of N62,179.79 (sic) from 5th October, 1977 until judgment is given in this case by this Honourable Court

(d)     (sic) Any other relief or reliefs.”

The action was contested by the defendant who filed a statement of defence denying, in its entirety, the plaintiffs’ claim.

The facts of the case were not generally in dispute and the learned trial judge found them to be, briefly, as follows. On the invitation of the defen­dant, the plaintiff submitted a tender and won a contract for the construction of a house described as “professorial quarters” including a section for domestic servants referred to as “boys’ quarters”. A written contract (exhibit K) was executed on 2nd January, 1975 (and not 2nd December, 1975 as alleged in paragraph 31 of the statement of claim quoted above) by the plaintiff and the defendant. The performance of the contract was to be completed within a period of 9 months from the date the plaintiff took pos­session of the construction site from the defendant. This was found by the learned trial judge to be the date of the execution of the agreement, namely, 2nd January, 1975.

At a later date, following the same procedure, the plaintiff was awarded a second contract by the defendant for the building of 4 Staff Quarters – one Type A3 and three Type A4- and their respective boys’ quarters. Once again the terms of the contract were contained in a written agreement (exhibit D) which was executed by the parties on the 2nd April, 1975. Orig­inally the plaintiff was to complete the construction work and hand-over the houses to the defendant not later than a period of 6 months. But the period was later extended, on mutual agreement, to 9 months. As with the first con­tract, the time was to start running from the date the plaintiff took posses­sion of the construction site from the defendant. From the evidence adduced the actual date was not certain but the learned trial judge found it to be sometime in April, 1975.

The plaintiff started work on all the sites but as it transpired the work reached certain stage before it stopped. The defendant granted additional time to the plaintiff to complete the work but the plaintiff still failed to do so.

Consequently the defendant terminated the contracts and r awarded them .to third parties for completion. The plaintiff attributed the delay to complete the work to irregular payments which it alleged were being made by the defendant and the uncooperative attitude of the defendant’s Acting Chief Engineer. The learned trial judge rejected the plaintiff’s excuse and instead found that the work was abandoned by the plaintiff following the defen­dants refusal to grant the request made by the plaintiff for an upward revi­sion of the prices of the contracts. The plaintiff’s action was therefore dismis­sed by the trial court.

However the dismissal notwithstanding the learned trial judge awarded, as claimed by the plaintiff, the sum of N62,179.79 against the defendant, as special damages. The reasons for making the award are discer­nible from the following excerpts from the judgment of the learned trial judge:

“I was told (by counsel for the defendant) that the plaintiff’s (sic) company is in breach and therefore cannot recover damages under the contract. It is also said that clause 3(11) of exhibits “D” and “K” of the contract agreement (sic) is a fundamental clause of the contract and time is of the essence of the contract. It is clear to me that the plaintiff is in breach and ‘is not entitled to general damages by his (sic) own default. The contracts were determined by the plaintiffs own act. To award general damages would also amount to double compensation since special damages have been claimed and are certain……..

It is certain that 1 cannot adopt Mr. Rerri’s argument that the plaintiff is not entitled to any special damages. The reason is that by the time the contracts were terminated by Exhibit “H” the plaintiff has (sic) done substantial work on the jobs between the date of last payment and the date of termination………….Let me say straightaway that the plaintiff is entitled to payment for the amount of work done on a quantum merit (sic) basis that is to pay a reasonable price for the work actually done………………..

The contracts agreements (sic) Exhibits “D” and “K” set out in Clause 3 (III) (a) of the schedule of payments and at what stage in the performance of the contracts they were to be made. 1 would say therefore that they are not entire contracts and that plaintiff is entitled to be paid for the divisible part of the performance completed. ”

The defendants appealed to the Federal Court of Appeal (now Court of Appeal) against the decision of the trial court. The appeal was allowed by the Court of Appeal which held that the special damages should not have been awarded. The Court therefore reversed the judgment of the learned trial judge by setting-aside the award.

Aggrieved by the decision of the Court of Appeal, the plaintiff filed in this court the present appeal. Four grounds of appeal were filed. They are as follows: ­ –

1. That the learned Justices of Appeal misdirected themselves in, Law as to the principles governing the award of damages in the contract between the parties i.e.’ general damages ‘as’ distinct from special damages as laid in Okulaja vs. Haddad 19731 S.C. 357 at 362″

Errors in Law,

(a)     When the award by the learned trial Judge was based on performance by the Plaintiff at the date of the breach.

(b)     When the issue of General Damages was clearly rejected by the learned trial Judge.

(c)     When the issues of General Damages and Special damages or the claims of the Plaintiff were quantifiable in law having regards to Exhibits “D and K” before the Court.

2. That the Learned trial Justices of Appeal were wrong in law in allowing Defendant/Appellant’s appeal in treating claims or issues in Exhibits “D and K” as distinct from Exhibits “A and B” based on Exhibits “D and K”.
3. That the Learned Justices of appeal erred in Law as to principles of law applicable in the award of damages in contracts partially performed, quantum meruit and/or proof of work-done by a party in the contract or quantification or assessment of work­ done irrespective of party in breach.
4. That the Learned Justices of Appeal misdirected themselves on the printed record of appeal in allowing the appeal.

Particulars of Misdirection

(a) When the Learned Justices held as follows: ­ –

“I must observe that it does not appear on the record that the Judge made an award to the Plaintiff/Respondent in quantum meruit or that he made out for him a claim he did not pursue and granted him a relief for which he did not pray”, having regards to Plaintiff’s claim in paragraph 31 of his Statement of Claim and Exhibits A and B arising from Exhibits “D and K”.”

In reply to the plaintiffs argument Mr. Rerri learned counsel for the defendant raised objection against grounds 2, 3 and 4 which he said were incompetent because no particulars thereof were given as enjoined by Order 7 rule 2(2) of the Supreme Court Rules, 1977. The objection was undoub­tedly well-founded in respect of grounds 2 and 3 but we did not deem it necessary to give a ruling since the remaining grounds, viz ground 1 and 4 are competent and the whole of the argument in the appellant’s brief is in fact devoted to ground 1 only.

The main question for determination as formulated in the appellant’s brief is:

“whether the High Court should have dismissed the plainitiffs claim for damages once it came to the conclusion that the plaintiff ought not to have abandoned the execution of the contract.”

Chief Williams learned counsel for the plaintiff argued that the Court of Appeal acknowledged the point that where there is a breach of contract, a contractor, whether liable for the breach or not may sue his employer for the recovery, as debt, of any interim payment that became due. He said that the Court of Appeal, however, considered the action in the present case as an action in damages for breach of contract and therefore held that it is the party injured by the breach that can claim damages and not the party that is liable for the breach of contract. Learned counsel submitted that it is unduly technical for the Court of Appeal to draw a distinction between a claim for debt and a claim for damages in default of payment of the debt. He sup­ported the submission by citing Aluminum Industries Aktien Gesellachaft v Federal Board of Inland Revenue, (1911) 2 NCLR 121 at p. 1 where it was observed that an action for damages will suffice in place of lip action for debt) and Societe des Hotels Le Touquet – Paris-Plage v Cummings, (1922)

1 K.B. 451 at pp. 457,459 and 463.

In reply Mr. Rerri argued that the plaintiff did not show in its pleadings that it was being owed any debt by the defendant. He therefore submitted that the claim before the trial court was one of damages for breach of con­tract and not that of debt due to the plaintiff.

It is true, as stated by this Court in the Aluminium Industries etc. case (supra) that an action for damages can be brought in place of action for debt. It is also possible that a particular fact or set of facts can give rise to one or more causes of action. This has been recognized by the provisions of Order 9 Rule 1 of the High Court (Civil Procedure) Rules, Cap. 65 (Laws of Bendel State of Nigeria, 1976) which read:

“1.     Subject to these rules, the plaintiff may unite in the same action several causes of action…………….”

and ‘order 13 rule 8 thereof which states:

“8.     Where the plaintiff seeks relief in respect of several. distinct claims or causes of complaint founded upon separate and dis­tinct facts; they shall be stated, as far as may be separately and distinctly, and the same rule shall apply where the defendant relies upon several distinct grounds of set-off or counter-claim founded upon separate and distinct facts.”

Therefore a plaintiff may properly join several causes of action in one suit irrespective of whether the causes of action arose from the same facts or different facts – See Owoade v The United Africa Co. Ltd., 13 WACA 204 and The United African Co. Ltd. v. .Owoade 13 W ACA 207 at p. 211. But as parties are bound by their pleadings, the plaintiff must specifically plead the facts, and not the law from which the cause or causes of action arise or can be inferred – The United Africa Co. Ltd. v. Owoade (Supra). If the facts are not so pleaded, the plaintiff will not be allowed to set up a different case ­African Continental Bank Ltd. v. Attorney-General of Northern Nigeria, (1967) N .M.L.R. 231 at p. 233: (1967) All N.L.R. 76 at p. 80 and Sir Adesoji Aderemi v Adedire (1966) N.M.L.R. 398 at p. 40l.

In the present case the plaintiff was at liberty to claim in the alternative, that is either by way of debt owed or breach of contract. Although it appears from the last paragraph of the plaintiff’s statement of claim, namely, parag­raph 31 (quoted above), that the plaintiff opted for a claim in breach of contract, the last part of the paragraph asked for “any other relief or reliefs”.

Now the Court of Appeal made the following remarks:

“It cannot be disputed that the contracts exhibits D and K are the basis of the claim in this action. Paragraphs 4 to 10 of the Statement of Claim are eloquent of this. Exhibit D and K are lump sum contracts, but in each of them, clause 3(iii) sets out the schedule of payments in seven stages, from satisfactory comple­tion of work up to damp proof course level, through various stages, to completion of the buildings. At each stage satisfactor­ily completed by the contractor, a specified percentage of the total contract sum was to be paid by the employer to the contractor. In contracts of this type once the contractor has successfully reached the agreed stage of the construction the interim payment becomes a debt due from the employer to the contractor, and irres­pective of who was responsible for the breach of the contract, the contractor can bring an action to claim it – Taylor v. Laird, (1856) LJ. 2 Exch. 329; Stubbs v. The Hollywell Railway (1856) LJ. 2 Exch. 311; Government of New Foundland v Newfoundland Railway Co., (1888) 13 App. Case; 199. If therefore the claim had been for payment for work done under exhibits D and K and for which the plaintiff/respondent had not been paid, , and evidence was laid to show at what stage he was last paid and to what stage the building had progressed before the stoppage of work, then an award could be validly made and would of course be the sum left unpaid by the defendant/appellant to the plaintiff/respondent up to the latter stage in accordance with clause 3(iii) of the contract agreements exhibits D and K. But that is not the claim in this action. The plaintiff/respondent brought this action in damages because he felt that the defendant/appellant was in breach of the contracts. When the learned trial judge found that it was not the defendant/appellant, but the plaintiff/respondent who was in breach, he should not have found for him, because an action in damages for breach of contract is at the suit of the party who is in breach of the contract. (Italics mine).

Chief Williams had argued in the alternative that since the plaintiff could bring an action in debt instead of breach of contract and this was clear to the Court of Appeal, the appeal should not have been dismissed as the dis­missal would constitute a bar to any future action by the plaintiff. He con­tended that the Court of Appeal ought to have either entered a non-suit or directed a new trial with liberty to the parties to amend their pleadings. But Mr. Rerri contended that the plaintiff’s pleadings did not show that the plaintiff was being owed any money and therefore the issue of debt did not arise.

In my opinion there is substance in the argument of Chief Williams. Contrary to the contention of Mr. Rerri it is quite clear from paragraphs 12 and 28 of the statement of claim that the plaintiff averred that it was being owed some debt by the defendant. The paragraphs in question state as fol­lows:

“12.   The Plaintiff avers and will establish at the trial that the Defen­dant was responsible for the delay in executing the contract jobs (sic) in failing to settle payments (Certificate) (sic) due to the Plain­tiff at all material time. The plaintiff will at the trial produce and rely on several letters in connection with these demands.”

“28.   Further or in the alternative, notwithstanding repeated demands by the Plaintiffs therefore (sic) the Defendant has wrongfully and in breach of the said Agreement (sic) failed and refused to settle the sum claimed by the Plaintiff…..”

It is necessary to draw attention to the fact that the foregoing averments were denied by the defendant in paragraphs 1 and 4 of its statement of defence. Furthermore, the defendant set up the following defence in parag­raph 13 thereof:

“(13) On the contrary, the plaintiff had received from the defendant the sum of N 105,382.50 which amounts to over payment made under a mistake of fact, in addition to the sum of N54,932.55 paid by the defendant as extra cost for the completion of the building works abandoned by the plaintiff as averred above.”

From the evidence adduced before the trial court each of the parties took independent action to assess the amount of work done by the plaintiff at the time of the termination of the contracts. The plaintiff claimed that it did more work than it was paid for, while the defendant adduced evidence to show that the plaintiff was in fact overpaid. The claims were considered by the learned trial judge. He rejected the defendant’s assertion because it was not set up in the statement of defence as a counter-claim. On the other hand the learned trial judge found that the plaintiff was entitled to be paid adequately for the job done (see the excerpts quoted above) and instead of assessing the debt owed by the defendant, the learned trial judge simply awarded special damages for breach of contract as claimed by the plaintiff.

This is undoubtedly wrong. The Court of Appeal was of the view and came to the conclusion that the plaintiff’s “action should have been dismissed (by the trial court) the plaintiff/respondent being at liberty to bring the approp­riate claim”.

With respect to the learned Justices of the Court of Appeal once an action is dismissed it cannot be relitigated by the parties since a plea of res judicata will apply as a bar to such .further proceedings, unless of course there is the provision of a statute or rule of court which categorically pro­vides that the issues determined between the parties can be re-opened in subsequent proceedings. It has not been shown to us that such exceptions do apply in this case:

Although on the authority of The United Africa Co. Ltd. v Owoade, (supra) judgment based on the plaintiff’s pleadings could have been entered for the plaintiff on a claim for debt, the evidence adduced on the issue by both the plaintiff and the defendant was not properly assessed by the trial court. The independent valuations carried out by the parties, of work per formed at the time the contracts were terminated, were not juxtaposed by the trial court in order to determine, on the preponderance of the evidence before it, if the plaintiff had proved his claim in debt. In my view this case clearly comes within the intention of Order 28 rule 3 of the High Court ‘(Civil Procedure) Rules, Cap. 65, which reads as follows:

“The Court may in any suit, without the consent of the parties, non-suit the plaintiff, where satisfactory evidence shall not be given entitling either party or defendant to the judgment of the Court.”

I am therefore of the opinion that the appeal should be allowed. in part only and a non-suit entered against the plaintiff. Accordingly, the appeal against the order of the court of Appeal setting-aside the award of special damages made to the plaintiff is hereby dismissed; and the appeal against the order of the Court of Appeal dismissing the plaintiff’s claim is allowed. The order is set-aside and in its place the plaintiff is hereby non-suited. There is no order as to costs. Each party is to bear its costs.

Judgement Delivered By

Mohammed Bello. J.S.C.

I had the opportunity of reading the judgment of my learned brother, Uwais, J.S.C. For the reasons stated therein, I agree the appeal should be partly allowed. Accordingly, the decision of the Court of Appeal setting-aside the award of special damages made to the plaintiff is affirmed and its decision dismissing the plaintiffs claim is hereby set aside and instead there shall be an order non-suiting the plaintiff. There shall be no order as to costs.

I would only emphasize that Societe Des Hotels Le Touquet Paris-Place v. Cummings (1922) LK.B. 451 clearly spelt out that where a debtor fails to pay a debt after it has become due for payment the creditor may sue the debtor claiming damages for breach of contract and the measure of damages is the amount of the debt plus nominal damages for its non-payment. Plain­tiffs have recourse to this cause of action generally in order to evade the rule of conflict of laws which requires, unless there is any agreement to the con­trary, a claim for the payment of a debt to be instituted in the forum of the country where the debtor resides: New York Life Ins. Co. v. Public Trustee (1924) 2 Ch. 101 at 120.

The trial judge found that under the terms of the agreements, Exhibits D and K, the contractor had done some work for which tie was entitled to payment and has not been paid. The Court of Appeal was right, in my view, in holding that such payment was a debt due to the contractor from the employer irrespective of who was responsible for the breach of the main con­tract. Accordingly, the plaintiff is entitled to claim for such debt or for dam­ages for breach of contract in respect of its non-payment. Instead of deter­mining the quantum of the debt, the trial judge erroneously awarded to the plaintiff N62,179.79 as special damages. On the other hand the defendant claimed to have over-paid the plaintiff and the trial judge erroneously rejected the defence simply because it was not set out as a counter-claim. It is clear from the manner the trial judge dealt with the case of either party, one cannot say within the balance of probability which party is entitled to succeed. I think this is a proper case to make a non-suit order in order to do justice to the parties.

Judgement Delivered By

Andrews Otutu Obaseki. J.S.C.

I have had the advantage of a preview of the draft of the judgment just delivered by my learned brother, Uwais, J.S.C. I agree, with my learned brother that the appeal be allowed and a judgment of non-suit be entered against the plaintiff/appellant instead of a judgment or order of dis­missal. I hereby adopt his opinions on the issues raised as my own.

It is common ground that the appellant did some work, in pursuance of the contract entered into by both parties, for the respondent. There is however no agreement as to the value of the work done and ‘the evidence adduced is insufficient to secure either a judgment of dismissal for the respondent or a judgment for any amount /for the appellant. It is true and I agree with my learned brother that the claim was erroneously based on breach of contract and the learned trial judge having found that the appellant caused the breach and was the party guilty of the breach, rightly dismis­sed and the Court of Appeal properly affirmed the dismissal of the cause of action based on breach of contract.

The claim for the value of work done before the breach as special dam­ages for the breach was a claim which properly lay in debt or money due and payable by the respondent for work done. The valuation of the work done according to the contract was to be by mutual agreement. There is a total absence of any such evidence and there being agreement by both sides that work was done and some payment made, it would be a juster order to non-­suit the plaintiff/appellant than to dismiss his claim and bar him forever from payment for work done.

The appeal is hereby allowed. The order of dismissal entered by the Court of Appeal is hereby set aside and in its place an order of non-suit is substituted. There will be no order as to costs.

Judgement Delivered By

Augustine Nnamani. J.S.C.

NNAMANI, J.S.C: I had a preview of the judgment just delivered by my learned brother, UWAIS, J .S.C. and I agree entirely with his reasoning and conclusions.

In his plea for remedies from this Court learned Senior Advocate appearing for the Appellants urged in the alternative that a non-suit should be entered or else an order for retrial be made. I am also of the view that while the appellants could not have succeeded in their claim for damages for breach of contract, it having been found that they infact committed the breach, they certainly were entitled to some payment for work done in accordance with Exhibits D and K.

The justice of this cause demands that a non-suit be entered against the plaintiffs/appellants. Indeed the Court of Appeal had in its judgment stated that

“If therefore the claim had been for payment for work done under Exhibits D and K for which the plaintiff/respondent has not been paid and evidence was fed to show at what stage he was last paid, and to what stage the building had progressed before the stoppage of work then an award could be validly made”.

A non-suit would occasion no hardship to either party. (See Musa Awosanya vs. Alhaji Algata and Madam Eko (1965) 1 All N.L.R. ‘228). On the contrary they would be at liberty to relitigate the issues between them for while the appellants claim outstanding payments, the respondents contend that there is an overpayment.

I abide by all the orders made in the said judgment of my learned brother, UWAIS.J.S.C.

Judgement Delivered By

Chukwudifu Akunne Oputa

I have had the privilege of reading in draft the leading judg­ment just delivered by my learned brother Uwais, J.S.C. I am in complete agreement with his reasoning and his conclusions.

In contracts like Exhibits 0 and K one is dealing with several contracts not just one contract. Where and when the Plaintiff/Appellant has reached one stage and payment of work done up to that stage is due, the appellant would be entitled to the amount agreed as contract price up to that stage. If this amount is not paid, the appellant is at liberty to sue for the amount due and payable as a debt. I will even venture to say that at that stage non-pay­ment of the amount due constitutes a breach of the contract to pay that amount due at that stage. The appellant may thus be guilty of breach of the overall contract without being guilty of the breach of the smaller stage by stage contracts, A claim on a quantum meruit presupposes exactly this and the Court of Appeal in its judgment conceded this by implication when it observed:

“In contracts of this type the contractor has successfully reached the agreed stage of the construction the interim payment becomes a debt due from the employer to the contractor, and irrespective of who was responsible for the breach of the contract the contractor can bring an action to claim it”.

The Court of Appeal then continued: ­

“If therefore the claim had been for payment for work done under exhibits 0 and K and for which the plaintiff/respondent had not been paid, and evidence was laid to show at what stage he was last paid and to what stage the building had progressed before the stoppage of work then an award could be validly made and would of course be the sum left unpaid by the defendant/ appellant to the plaintiff/respondent up to the latter stage in accordance with Clause 3(iii) of the contract agreements Exhibits D and K.”

If the contract was only for the one stage and the contractor had completed that one stage and the employer refused to pay for the work done, on that stage could he, the contractor, not sue for breach of contract; namely the contract to pay the contractor for work done? Reduced to this level it becomes clearer that whether the claim is for breach of the stage by stage contract or on a quantum meruit or for debt will not matter very much, I know that forms of action are dead but that they still rule us from their graves but all I am saying is that the law should not be allowed to become the government of the living by the dead. That is why I am inclined to agree with Chief Williams SAN that “it is unduly technical for the Court of Appeal to draw a distinction between a claim for debt and a claim for damages in default of payment of the debt.”

The only difficulty in this case is that each side used its own standard of valuation and arrived at different conclusions, The appellant alleges he was not paid fully for work done, the Respondent says the appellant was over­paid. Each side therefore has an interest in recovering whatever is due to it – the appellant the amount of the under-payment, the respondent the amount of the over-payment. Because of this, the justice of this case will be served by a non-suit leaving the gates wide open for the parties to relitigate their claims to under-payment or over-payment. I will therefore also non-suit the plaintiff/appellant. I abide by all the other orders made by my learned brother Uwais, J .S.C. in the lead judgment.