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BRITISH AIRWAYS PLC
CHIEF FUNSO AKINYOSOYE
COURT OF APPEAL
1 NWLR (Pt.374) 722.
O. Ajumogobia (with him Ekwam) – for appellant
Chief Akinyosoye SAN (with him Mrs Akande and Miss J. Harriman) – for respondent
[Sam Eleanya, Agboola Omolola Oluwafolakemi, Eleanya Kalu Vincent, Eleanya Ugochi Vine]
– Breach of Contract,
– Limitation Period,
– Cause of Action
Both parties entered into an agreement whereby the appellant instructed the respondent to arrange the transfer of large amounts of money in foreign exchange through the Central Bank of Nigeria to London on its behalf. Respondent was to be paid 5½ of the amount transferred as his professional fees.
Respondent made all necessary contacts and arrangements with the CBN and the Inland Revenue and succeeded in effecting the transfer in foreign exchange equivalent to the tune of N4, 651,794.68 in February 1982. Respondent then wrote and informed the appellant of the completion of the assignment and demanded payment of his professional fees. Appellant refused to pay and disputed liability to pay through a letter dated December 14th, 1984. Consequent upon this, Respondent filed a writ of summons on March 7th 1990 claiming the sum of $232,589 (or its Naira equivalent at the exchange rate operating on date of judgement) being 5% of the amount transferred and interest on the same at the rate of 15% per annum from February 1982 to date of judgment and subsequently at the rate of 5%P/A until judgment debt, interest and costs have been fully liquidated.
Appellant filed a statement of defence and a motion on notice praying the court to dismiss the action as it was statute – barred. Respondent filed a counter – affidavit to the motion. Trial Judge held that it was premature at the stage the application was brought for the court to decide whether the case was statute barred or not.
Trial court thus dismissed the application. Appellant then appealed.
Whether the action filed by respondent was statute barred having regard to the pleadings before the court.
Lead judgement DELIVERED BY Kalgo JCA (UWAIFO, JCA. (Dissenting)
This is an appeal the ruling of Omotoso J. of the High Court of Lagos delivered on the 24th of August, 1990. The main issue in dispute and which this Court is called upon to determine in this appeal, is whether the action filed by the plaintiff/respondent is statute-barred having regard to the pleadings before the trial Court.
On the 7th of March, 1990, the plaintiff/respondent (hereinafter referred to as “the respondent”) filed a writ of summons claiming from the defendant/appellant (hereinafter referred to as “the appellant”):
“the sum of $232,589 (two hundred and thirty two thousand, five hundred and eighty-nine U.S. Dollars) or its Naira equivalent at the rate of exchange at the date of judgment, being 5% of the amounts transferred, and interest on the same at the rate of 15% per annum from 24th February, 1982 to date of judgment debt, interest and costs have been fully liquidated.”
The respondent subsequently filed a statement of claim which was dated 5th March 1990 (See pp.4-9 of record of appeal). On the 22nd of May, 1990, the appellant filed a statement of Defence to the action as contained on p13 of the record. On the same day, the appellant filed a motion on notice praying the trial court to “dismiss the action herein on the ground that the plaintiff’s action is barred by section 8(1)(a) of the Limitation Law Cap. 70 Laws of Lagos State of Nigeria, 1973.” The respondent filed a counter affidavit of 12 paragraphs sworn to by Solomon Sofunmade on the 11th of June, 1990.
The learned trial judge heard the application and in a considered ruling delivered on the 24th of August, 1990, concluded on p.48 of the record thus: –
“Until evidence is led and the case unfolds, it will be impossible for the court to decide whether or not the case of the plaintiff falls within the exception to the general rule that negotiation do not extend the limitation period on the facts presented by the plaintiff. It will be premature at this stage to rule that this action is statute barred, the contents of the letters pleaded and evidence of the negotiations of the parties are vital to the consideration of the issue as to whether or not the action is statute bared. The long age procedure of interrogation and/or Discovery of Documents are open to the Defendants. The application is premature and it is accordingly dismissed.”
The appellant was dissatisfied with this ruling and on the 12th October, 1990, having obtained leave of this Court of Appeal, filed a Notice of Appeal against the said ruling on one ground of appeal which without particulars read as follows: –
“The learned trial Judge erred in law in failing to dismiss the plaintiff’s claim and in concluding that it was necessary to lead evidence at trial to determine whether the plaintiff’s action is Statute barred having regard to the state of the pleadings and in particular the plaintiff’s Statement of Claim.”
The parties to this appeal filed their briefs of argument in this court. The appellant formulated, in his brief, the following issues to be determined this appeal: –
“(i) Whether having regard to the endorsement on writ of summons, the State of Claim and Statement of Defence, the suit filed by the respondent stated in the appellant’s motion to dismiss, viz. the action is statute barred.
(ii) Whether the learned trial judge was correct in ruling that the appellant’s application to dismiss could only be considered in the light of the evidence to be adduced in supporting the respondent’s claim.”
The respondent in his brief submitted only one issue arises for determination in this appeal and it is this: –
“When or not the action, having regard to the facts and law is statute-barred.”
At the bearing of the appeal before this court, the learned counsel for the appellant adopted his brief of argument. He then referred the court to Chitty on Contracts, 26th Edition Vol.1, paragraph 1942, p.1263, the case of FRED EGBE V. ADEFARASIN (No.2) (1987) 1, Coburn v. Colledge (1987) 1QB 702, and submitted that the trial Judge was wrong in holding that she could not determine the relevant date the cause of action arose without taking evidence. On the issue of fresh negotiation constituting an exception to the general rule, the learned counsel submitted that this was not pleaded by the respondent and so everything said about it went to no issue and should have been disregarded by trial Judge. He then referred to Halsburys Law of England, 4th Edition Vol.28 paragraph 608 in support of his submission.
The learned counsel for the respondent also adopted his brief of argument. He submitted that the letter dated 14th December 1984, which was pleaded in paragraph 28 of the Statement of Claim controls the period the cause of action arose in this case. He then cited the cases of Ajide v. Kelani ((1985) 3 NWLR (Pt.12) 248 and Nwadialo v. Shell Petroleum Dev. Co. Ltd (1990) 5 NWLR (Pt.150) 322 and submitted that the action of the respondent was filed within time and is not statute barred.
The appellant filed only one ground of appeal in the notice of appeal (pp71-73 of the record), complaining of the refusal of the learned trial Judge to hold that the action of the respondent was statute-barred and should be dismissed in limine. In my view the main issue for determination here is whether or not the action of the respondent is statute-barred, having regard to the facts and the law to be considered by the trial judge in the circumstances of this case. For this reason, it is my view that the only issue for determination is this appeal is that set out by the respondent and I adopt it as such.
The first point I wish to look at is how does one determine the period of limitation in any particular case? Here I refer to the case of Egbe v. Adefarasin (No. 21 (1987) 1 NWLR (Pt.47) at p.20 where Oputa, J.S.C. said:-
“The answer is simple-by looking at the writ of summons and the Statement of Claim alleging When the wrong was committed which gave the plaintiff a cause and by comparing that date with the date on which the writ of summons were filed. This can be done without taking oral evidence. If the time on the writ is beyond the period allowed by the Limitation Law then the action is statute barred”
What then is the meaning of cause of action? In Akilu v. Fawehinmi (No.2) (1989) 2 NWLR (Pt.102) 122 at 169, the Supreme Court held that: –
“Cause of action has been held to mean every fact which is material to be proved to entitle the plaintiff to succeed, or all those things necessary to give a right to relief in law or equity. See Bello v. A.G. Oyo State (1986) 1 QB 232 at 242.”
Therefore the period of limitation simply put, is that period of time after the accrual of a cause of action during which legal proceedings can be brought by a competent party because the period laid down by the Limitation Law Act has not lapsed.
My next point is when does the cause of action accrue to a party and when does the period of limitation begin to run? I am taking these two questions together because it appears to me that they are co-terminus. In the case of Adimora v. Ajufo (1989) 3 NWLR (Pt.80) at p.17, the Supreme Court considering when a cause of action is said to accrue held:-
“What is meant by cause of action? In its best definition it consists of every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to judgment. Cooke v. Cill (1873) E R 3 CP. 107; Read v. Brown (1889) 22 QBD 128. When these facts have occurred and provided there are in existence, a competent plaintiff and a competent defendant a cause of action is said to accrue to the plaintiff because he can prosecute an action effectively. Thus the accrual of a cause is the event whereby a cause of action become complete so that the aggrieved party can begin and maintain his cause of action”
From this, it appears very clear to me that the period of limitation in respect of any particular action will begin to run from the date the cause of action accrues. See Rhodes v. Smethurst 150 E.R. 1335; Pritam Kaur v. Russel & Sons Ltd., (1973) All E.R. 617 and Egbe v. Adefarasin (supra).
Having laid down the legal principles above, I now come back to the case on appeal. From the record of appeal, it is not in dispute that the writ of summons in this action was filed in the trial court on the 7th day of March 1990. The Statement of Claim was also filed about the time in the same Court. It is also not in dispute that the appellants instructed the respondent to arrange the transfer of large amount of money in foreign exchange through the Central Bank of Nigeria from Nigeria to London on their behalf and it was agreed that the respondent would be paid 5% of the amount transferred as his professional fees. (See paragraphs 8-12 of the Statement of Claim) The respondent made all the necessary contacts and arrangements with the Central Bank of Nigeria and Department of Inland Revenue and finally succeeded in effecting the transfer in foreign exchange equivalent of a total sum of N4,651,794.68 vide Central Bank approved Release Batch No. 689251 of 24th February 1982. Thereafter the respondent informed the appellants of the completion his assignment and demanded payment of his professional fees. The appellants refused to pay and disputed liability to pay the fees. (See paragraphs 18-23 of the Statement of Claim).
From the above facts, it cannot be disputed that, the respondent entered into a simple contract to transfer the appellants money from Central Bank of Nigeria in foreign exchange to London on payment of 5% of the amount so transferred. He had carried out his part of the contract but the appellants refused to pay him. There is therefore a breach of that simple contract by the appellants. In the case of Sanda v. Kukawa Local Government (1990) 2 NWLR (Pt.174) 379 at p.388, the Supreme Court held that:-
“In actions for breach of contract, the cause of action accrues for the plaintiff’s benefit from the time the breach of the contract is committed and not when the damage is suffered.”
See also Olaogun Ent. Ltd v. S.J. & M (1992) 4 NWLR (Pt.235) 361 at 388. This means that in respect of this appeal, as soon as the appellants denied liability, the respondent’s cause of action arose, and the time begins to run against him for the purposes of limitation. But the respondent did not specify any date or refer to any document in which the appellants notified him of their denial of liability. But in explaining their position in the Counter-affidavit to the appellants motion to dismiss the action in limine for being statute-barred, the respondents averred as follows:-
“5. That in paragraphs 19 and 20 of the Statement of Claim, the date 24th February, 1982 is merely the time when approval for remittance was granted by the Central Bank of Nigeria.
The learned counsel for the respondent had however submitted at the hearing of this appeal that the date 14th December 1984, was the date when the cause of action accrued to the respondent and that the time begins to run on that day for the purpose of the statute of Limitation. Looking at paragraphs 23 and 28 of the Statement of Claim, it is only in paragraph 28 that the actual date when the appellant denied liability was specified i.e. 14th December 1984. The appellant in his Statement of Defence filed on 22nd of May, 1990; (p.12 of the record) made a general denial of all the allegations of fact contained in the Statement of Claim. The allegation or averment made by the respondent in paragraph 28 of the Statement of Claim, is an essential and material one in the circumstances of this case which in my respectful view required a specific traverse. The need for specific traverse in a situation such as this was emphasized and explained by Salami, J.C.A. in the Olaogun Ent. Ltd. (supra) at pp. 380-381 where he said:-
“The purpose of traverse in a statement of defence is to contradict an assertion of fact in the Statement of Claim, as a result it must not be vague, evasive or general in respect of essential and material allegations such a general denial ought not be adopted, essential allegation should be specifically traverse; per Lord Denning M.R. in Walleersteiner v. Moir (1974) 1 WLR 991, at 1002. A refusal to admit must be denied explicitly and clearly ….. However paragraphs which are purely introductory or explanatory of facts with paragraphs are known as matters of inducement and the statement at the end of the claim which are not essential or do not form part of the main cause of action can be denied generally.”
I agree entirely with my learned brother Salami, J.C.A. on this proposition and I adopt it in toto in respect of this appeal. The averrments contained in paragraph 28 of the Statement of Claim are indeed very essential and material to the main cause of the respondent’s action and must therefore be specifically and not generally denied. They are not merely introductory or explanatory of certain facts averred in the Statement of Claim. The appellants in their Statement of Defence did not deny them specifically. Therefore paragraph 28 of the Statement of Claim stands out untraversed. The effect of this in my view, is that the trial court was entitled to rely on it in deciding the application to dismiss the action.
Also in paragraph 8 and 9 of the respondent’s counter-affidavit in the application to dismiss the action (p.26 of record) as earlier set out in this judgment, the respondent further explained the contents of his Statement of Claim particularly paragraph 28 thereof. This constitutes affidavit evidence which is consistent with the contents of the pleadings, and could be relied upon by the trial court. The appellants did not challenge this in their further affidavit also. In the case of Ajide v. Kelani (supra) Oputa, J.S.C. said that a party should be consistent in stating his case and consistent in proving it. On p. 271 of the report, the learned Justice of the Supreme Court said:-
“Justice is not interested in scoring debating points. The defendant cannot make one case in his pleadings and an entirely different and inconsistent case by his sworn testimony and hope to win on appeal. No, he cannot.”
But if the sworn statement is consistent with his pleadings, then the defendant can win. Therefore since the affidavit evidence is sworn evidence, and is consistent with the averment in the respondent’s pleadings, then the Court can rely and accept it.
According to S.8(1)(a) of the Limitation Law (Cap.70) Laws of Lagos State, 1973, all actions founded on simple contract like in the present appeal, shall not be brought after the expiration of six years from the date on which the cause of action accrues. I have indicated earlier in this judgment that the date of 14th December 1984 was the date the appellant denied liability to the respondent and consequently committed breach of the contract between them and the respondent. The cause of action in this case, accrued to the respondent on that day and time begins to run from that day, for the purpose of limitation. Since in this case, the action must be brought within 6 years, the respondent must bring his action against the appellant on or before the 14th of December, 1990. The respondent, according to the record, has filed his writ of summons in the trial Court on the 7th day of March 1990 Therefore, I am satisfied that the respondent filed his action within time and that his action is not statute-barred.
The learned counsel for the appellant made heavy weather of the fact that the case of the appellant did not fall within the exception to the general rule of limitation of action specified in Halsbury’s Law of England 3rd Edition, Volume 24 p.182 paragraph 333 and p.204 paragraph 366, because according to him, the respondent failed to satisfy the requirement of such exception. The learned counsel argued in his brief that there was no subsequent agreement entered into between the parties arising from any negotiations on the payment of the alleged money owed to the respondents, and that even if there was such an agreement, it was not supposed by any consideration. Even if, counsel argued, that the alleged service of the respondent could be taken as consideration, it was past consideration which cannot sustain a legally enforceable contract. Therefore, learned counsel submitted in his brief that the exception mentioned in the Halsbury’s Laws of England referred to above, cannot apply to the case of the respondent.
Learned counsel further argued that even if it is accepted for the sake of argument that the circumstances mentioned in the exception to the general rule of limitation in the Halbury’s Laws referred above, apply in this appeal, none of these circumstances were pleaded by the respondent. Therefore, counsel submitted, the respondent cannot rely on the exception the circumstances of which have not been pleaded. He cited a number of legal authorities in support of his contention.
I have carefully considered all this beautiful and searching arguments of the learned counsel for the appellant, but with due respect to him, I do not think they are relevant to the circumstances of this appeal, having regard to my findings earlier in his judgment.
In the respondent’s Statement of Claim, it is abundantly clear that the only date specified when the appellants denied liability was 14th December 1984 (paragraph 28). although in paragraph 23 of the statement of claim, it was also mentioned that the claim was denied, no mention was made of any date and the appellants failed to specify any date when they denied liability themselves. They also failed to specifically traverse the essential averments made in paragraph 28 of the Statement of Claim as required by law and the fact that there were negotiations between the parties on the respondent’s efforts to recover his fees, lasting for about 2 years after completing his services, does not make the averments in the Statement of Claim unlikely. What matters here is that there must be a specific denial of the liability for payment when the cause of action arises and time begins to run for purposes of limitation. Here, the respondent averred that this was the 14th of December 1984, which date was not specifically traversed by the appellant who also failed to point to any specific date when the liability was denied.
Therefore, I have no doubt in my mind that the 14th of December 1984, was the relevant date in this case and for the reasons stated above it should have been relied upon by the learned trial Judge instead of considering the exception to the general rule. I think that the learned trial Judge was wrong in basing her decision on the application to dismiss on the exception since the date of 14th December 1984 should have been clear to her as the only date when the appellants denied liability to pay the fees of the respondent.
Finally, for all what I have said above, I find that the action of the respondent was filed within the period of limitation and therefore proper. Therefore for different reasons I dismiss the application of the appellants at the trial Court. I affirm the orders of the learned trial Judge Omotosho J. made on the 24th of August 1990, and dismiss the appeal of the appellants. I award N1,000.00 costs to the respondent.
AYOOLA JCA agreed with the lead judgment
UWAIFO, JCA. (Dissenting)
I regret I am unable to agree with the judgment of my learned brother, Kalgo, J.C.A. just delivered. I think the issue involved here is very straight-forward. The facts of the case have been stated by Kalgo J.C.A. To put them in very simple terms, the plaintiff/respondent alleged that a contract was reached between him and the defendant/appellant whereby the plaintiff was to help transfer the defendant’s money (a given sum) through the Central Bank of Nigeria to London for a fee of 5% of the amount transferred.
The plaintiff said he performed his part of the bargain. According to him, on 24th February, 1982 he got the Central Bank’s approval whereupon the money was transferred. The defendant was informed but it repudiated liability. Indeed, as pleaded by the plaintiff, a letter was written to the defendant in November, 1983 of his intention to sue. The defendant through its Solicitors wrote on 14 December, 1984 denying liability.
The plaintiff took out a writ of summons on 7 March, 1990 and this was met with an objection that the action was statute-barred. On the facts so pleaded by the plaintiff I cannot see that his action is still maintainable. The contract as pleaded is for the plaintiff to do an act and for the defendant to pay him for doing it. The plaintiff performed his part but the defendant was in breach of his own part to pay. The plaintiff’s cause of action is the complete performance of his own part of the bargain. A cause of action is said to consist of every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to judgment: See Afolayan v. Ogunrinde (1990) 1 NWLR (Pt.127) 369 at 382. All that is necessary for the plaintiff to prove in the present case to establish a cause of action is that there was an agreement and that he performed his part.
In an action based upon contract, the cause of action accrues for the plaintiff’s benefit from the time the breach of contract is committed and the period of limitation will begin to run from the date the cause of action accrues: See Sanda v. Kukawa Local Government (1991) 2 NWLR (Pt.174) 379 at 388. In the absence of facts pleaded by the plaintiff that the payment of his fee was by the terms of the said contract postponed after the performance of his part, payment was due to him the moment he performed. The defendant would be bound to pay from that date and would be in breach from that date for failing to pay. It is that date the cause of action accrues: see Halbury’s of England 4th Edn. para 673. Time begins to run from the next day for the plaintiff to bring action to claim the amount of fees due. Since from what he averred the plaintiff fully performed his part of the contract on 24th February, 1982, he would be obliged by law to bring his action not later than 24th February, 1988 i.e. within a period of six years.
The plaintiff brought his action on 7th March 1990 i.e. over two years outside the limitation period. His action had been ceased to be maintainable and his claim ought to have been dismissed. I will therefore allow the appeal and dismiss the claim. I award costs of N400.00 as costs in the court below and N600.00 as costs in this court.
Nigerian Cases referred to:
Adimora v. Ajufo (1988) 3 NWLR (Pt.80) 1
Afolayan v. Ogunrinde (1990) 1 NWLR (Pt.127) 369
Ajide v. Kelani (1985) 3 NWLR (Pt.12) 248
Akilu v. Fawehinmi (No.2) (1989) 2 NWLR (Pt.102) 122
Egbe v. Adefarasin (1987) 1 NWLR (Pt.47) 1
Olaogun Enterprises Ltd v. S.J. & M (1992) 4 NWLR (Pt.235) 361
Sanda v. Kukawa L.G. (1991) 2 NWLR (Pt.174) 379