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In The Supreme Court of
Nigeria
On Friday, the 13th day of July
2007
Before Their Lordships
SC. 170/2002
Between
And
Judgement of the Court
Delivered by
George Adesola Oguntade J.S.C
The respondent, (hereinafter
referred to as the plaintiff) at the Warri High Court of Delta State brought
a suit against the appellant (hereinafter referred to as the defendant) for
special and general damages arising out of an alleged breach of contract for
Ten million United States dollars. The parties filed and exchanged
pleadings.
The defendant, after the
exchange of pleadings, brought an application praying for the following
orders:
"(1)
An order of this Honourable Court setting
down for hearing and determination the points of law raised in the
Defendant's Statement of Defence particularly paragraphs 15-22.
(2)
Based on prayer one above, an order dismissing the Plaintiffs action
for disclosing no reasonable cause of action and for being incompetent,
frivolous and vexatious in the circumstance.
(3)
An order striking out this suit for lack of jurisdiction of this
Honourable Court to entertain same."
The grounds relied upon for
bringing the application was stated to be these:
"(a)
That the matter being an admiralty matter is outside the jurisdiction
and competence of this Court to entertain same.
(b)
That by virtue of S.230 (g)
and (o) of Decree No. 107 of 1993 and Decree No, 59 of 1991 the matter
is within the exclusive jurisdiction of the Federal High Court."
The trial judge in his ruling
on the defendant's application which was delivered on 3/12/99 reasoned that
the plaintiff’s suit disclosed a reasonable cause of action and that the
writ of summons and statement of claim showed that the plaintiffs claim was
for a breach of contract and not founded in admiralty.
The defendant was dissatisfied
with the ruling. It brought an appeal before the Court of Appeal, Benin
(hereinafter referred to as the court below). The court below on 4/4/01
dismissed the appeal. Still dissatisfied, the defendant has come on a final
appeal before this Court. The defendant has in its appellant's brief
formulated two issues for determination. The issues are:
“1.
Whether or not the Court of Appeal was right in holding that the
Plaintiffs action discloses a reasonable cause of action against the
defendant/ appellant.
2.
Whether the Court of Appeal was right in holding
that the Plaintiffs claim is contract and not
admiralty thereby vesting the Delta State High Court with jurisdiction as
against the Federal High Court.”
The plaintiff in its
respondent's brief formulated two issues which in substance are the same
with the defendant/appellant's issues. I intend to take the two issues
serially.
On issue 1, the appellant's
contention was that Plaintiffs writ of summons when read along with the
Statement of Claim did not disclose a reasonable cause of action. This issue
brings into the fore a consideration of 'a cause of action'. I can do no
more on the meaning of a 'cause of action' than call to mind the observation
made by this Court per Karibi-Whyte,
JSC in Bello v Attorney-General of Oyo State
[1986] 5 N. W.L.R. (Part 45) 828 at 876
thus:
"I think a cause of action is
constituted by the bundle or aggregate of facts which the law will recognize
as giving the plaintiff a substantive right to make the claim for the relief
or remedy being sought. Thus, the factual situation on which the plaintiff
relies to support his claim must be recognized by the law as giving rise to
a substantive right capable of being claimed or enforced against the
defendant. In other words the factual situation relied upon must constitute
the essential ingredients of an enforceable right or claim - see Trower &
Sons Ltd. v Ripstein [1944] AC 254 at
p.263; Read.v Brown
22 Q.B.D. 128; Cooke v Gill [1873]L.R,
8 C.A. 107,
Sugden v
Sugden
[1957] All ER 300; Jackson.v
Spittal [1870] L.R.
5C. P.547]. Concisely stated, an act on the part of the defendant
which gives to the Plaintiff his cause of complaint is a cause of action."
See also
Akilu.v Fawehinmi (No.2) [1989]
2 N. W.L.R. (Part 102) 122 at 169.
In lbrahim.v Osim
[1988] 1 N.S.C.C. 1184 at 1194,
this Court per Uwais J.S.C.
(as he then was) discussed the proper meaning of the expression 'reasonable
cause of action' thus:
"The question therefore is
what is a 'reasonable cause of action.'?
The words 'cause of action' without the adjective 'reasonable' had
been defined by this Court. In Savage & Ors v
Uwechia, 1972) 1 AllN.L.R.
(Part 1) 251 a tp.256; (1972) 3 S.C. 24 atp.221, where Fatai-Williams,
J.S.C. (as he then was) said:
'A cause of action is defined
in Stroud's Judicial Dictionary as the entire set of circumstances giving
rise to an enforceable claim. To our mind, it is, in effect, the fact or
combination of facts, which give rise to a right to sue and it consists of
two elements the wrongful act of
the defendant which gives the plaintiff his cause of complaint and the
consequent damage. As Lord Esher said in Cooke v Gill, (1873) L.R.
8 C.P. 107 and later in Read v Brown (1888) 22 Q.B.D. 128 (C.A.),
it is every fact that it would be
necessary for the plaintiff to prove, if traversed, in order to support his
right to the judgment of the court. See
Kusada
v Sokoto Native Authority, (1968) 1 All N.L.R.
377 where the definition in
Read v Brown (supra)
was referred to with approval'
By the two elements in the
foregoing definition of 'cause of action' there can be no doubt that as far
as the respondent was concerned and as indicated in his statement of claim,
the wrongful act of the appellant was that the appellant imported sardine
with the import license issued to the respondent, made profit and refused to
share the profit as agreed with the respondent. By this, if proved, the
respondent would be entitled to damages for breach of contract.
However the definition of the
words 'cause of action' is, for the purposes of the present case, incomplete
without the meaning of the word or adjective 'reasonable' ascertained. In
Black's Law Dictionary, Special deluxe, 5th Edition, the word has
been defined to mean, 'fair, proper, just, moderate and suitable under the
circumstances.' But the phrase 'reasonable cause of action' which is used in
Order 18 rule 19 of the English Rules
of the Supreme Court (See Volume 1 of the Supreme Court Practice (1979)
had been defined in Drummond-Jackson v British Medical Association &Ors.,
(1970) 1 WL..R. 688 at p.696 C by Lord Pearson who observed -
'First there is in paragraph
(1)(a) of the rule the expression 'reasonable cause of action', to which
Lindley M.R. called attention to Hubbuck & Sons Ltd. v. Wilkinson,
Heywood & Clark Limited, (1899) 1 Q.B. 86pp.90-91. No exact paraphrase
can be given, but I think 'reasonable cause of action' means a cause of
action with some chance of success, when (as required by paragraph (2) of
the rule) only the allegations in the pleadings are considered. If when
those allegations are examined it is found that the alleged cause of action
is certain to fail, the statement of claim should be struck-out.'
“This definition was approved
by this Court in Chief (Dr.) Irene Thomas Ors. v.
The Most Reverend Timothy Omotayo Olufosoye, (1986) 1 N. W.L.R. 669 atp.682
(per Obaseki, J.S. C.)”
The question that follows is:
Looking at the facts pleaded by the Plaintiff in support of its claim, can
it be said that the case at all events has no reasonable chance of success?
It needs be said here that the proposition that a plaintiff has no
reasonable cause of action can only be made upon an examination of the facts
pleaded in the statement of claim. It has nothing to do with the nature of
the defence which the defendant may have to the plaintiffs claim. The court
must therefore confine itself only to the averments in the Statement of
Claim in the assessment of whether or not the plaintiff has a reasonable
cause of action: See Shell B.P. Petroleum Development Co. of Nigeria Ltd.
& Ors. v. Onasanya [1976] 6 S.C.89, 94.
I should now examine the facts
pleaded by the plaintiff/respondent in its Statement of Claim. The relevant
facts pleaded by the plaintiff on pages 5-9 of the record read:
"5.
By a letter dated 17th September, 1996, the defendant
solicited bid from the plaintiff for the supply of a Compact Mobile Land
Drilling Unit of a particular rating and
specification in respect of the defendant's
proposed OML 53 Land Rig Campaign. The said bid was to be in two parts, viz:
(1) Technical information and (2) Commercial. The said letter is hereby
pleaded and shall be tendered during trial.
6.
The plaintiff then informed the defendant that it did not have that
particular type of land drilling rig and the parties agreed that the
plaintiff should purchase the said Rig from India.
7.
The plaintiff forwarded its bid to the defendant in two parts
(i)
Technical Information and
(2)
Commercial.
8.
That on the 6th December, 1996, the defendant wrote a
letter to the plaintiff stating
inter alia that it was aware that the plaintiff was in the process of
purchasing the rig. In the said letter, the defendant stated that the
plaintiffs bid will be considered only if the plaintiff supplies the
defendant sufficient information on the said drilling rig it was proposing
to buy. The said letter is hereby pleaded and shall be tendered during
trial.
9.
...............................................................
10.
The defendant was fully aware that the plaintiff was to source loans
from banks in Nigeria in order to purchase the said rig from India.
11.
That the
plaintiff obtained a loan of Three
Hundred Million Naira (
12.
...............................................................
13.
That the defendant requested the plaintiff to keep it fully informed
of the stage-by-stage arrangements or steps it took in the procurement of
the rig, including financing, purchase, shipment and final arrival of the
rig in Nigeria.
14.
...............................................................
15.
That on the 20th
December, 1996, the defendant wrote a letter to the plaintiff demanding an
assurance from the plaintiff that it had purchased the rig. It also demanded
proof of ownership of the rig. The
said letter is hereby pleaded and shall be tendered during trial.
16.
That by a letter dated 15th January, 1997; the plaintiff
furnished the defendant evidence of purchase, ownership and date of arrival
in Nigeria of the rig it purchased from Triveni Engineering and Industries
Limited, New Delhi, India. The said letter is hereby pleaded and shall be
tendered during trial.
17.
That plaintiff avers that by the said letter of 20th
December, 1996, the
defendant stated that if the plaintiff could furnish it by the 16th
January, 1997, with proof of ownership
of the rig, the defendant
would consider plaintiffs
bid stated in paragraph 5 above.
18.
That the plaintiff furnished the defendant with
proof of ownership of the
land drilling rig on the 15th
January, 1997, that is, one
day before the 16th deadline stipulated by the defendant in their
letter referred to in paragraph 17 above. The plaintiffs
said letter is hereby
pleaded and shall be tendered during trial.
19.
That the plaintiff forwarded along with its letter of 15lh
January, 1997, to the defendant, a letter from Triveni Engineering And
Industries Limited Of India who sold the said Land Drilling Rig to
plaintiff. In the said letter, Triveni Engineering And Industries Ltd.
enclosed another letter confirming that ownership of the Land Drilling Rig
had passed from them to the plaintiff. The two letters are hereby pleaded
and shall be tendered during trial.
20.
That on the 17th January, 1997, the defendant wrote a
letter to the plaintiff requesting it to make available for the defendant's
sighting by 4p.m. (1600 hours) on Monday, 20th January, 1997, the
originals of the following documents:-
(i)
The Contract of Sale of the Triveni Rig VI to the plaintiff;
(ii)
The title documents of the Rig; the letter is hereby pleaded and
shall be tendered during trial.
21.
The plaintiff avers that it duly provided the defendant the necessary
information requested under paragraph 20 above.
22.
That the defendant was monitoring the purchasing transaction of the
said Land Drilling Rig from India and its eventual shipment to Nigeria.
23.
That the defendant was to send a representative to India to inspect
the rig which the plaintiff had purchased from Triveni Engineering and
Industries Ltd but later cancelled the arrangement on the ground that it
would cost it 35,000 United States Dollars, which they did not want to
expend.
24.
That consequent upon the defendant's cancellation of the trip to
India to inspect the said rig, there was delay in the shipment of the said
rig to Nigeria.
25.
...............................................................
26.
That Mallard Bay Drilling Nigeria Limited is wholly foreign-owned
company.
27.
The plaintiff is the only indigenous Company in Nigeria that performs
oil drilling of similar capacity and magnitude as Mallard Bay Drilling
Nigeria Limited.
28.
That on the 19th December, 1996, the defendant wrote a
letter to National Petroleum Investment Management Services (NAPIMS), a body
under the Nigerian National Petroleum Corporation, in which the defendant
stated inter alia
that they did not believe that plaintiff could purchase the rig
outfit to meet its bid requirements, clear the rig through Indian Customs,
transport it to Nigeria, and clear it through the Nigerian Customs by April,
1997 the defendant then
concluded that the plaintiff was not a qualified bidder.
29.
Further to paragraph 28 above, the defendant also
stated in the said letter that if the plaintiff
could provide proof of ownership of the rig by the 16th January,
1996, it would open the commercial portion of the plaintiff’s bids. The said
letter of the defendant is hereby pleaded and shall be tendered during
trial.
30.
That the plaintiff paid to Triveni Engineering and Industries Limited
India the sum of Three Million and Fifty Thousand United States Dollars
($3,050,000 U.S.D) as cost of the said Rig.
31.
The Proforma Invoice and other relevant documents are hereby pleaded
and shall be tendered during trial.
32.
That when the rig arrived in Nigeria plaintiff informed the
defendant.
33.
That the plaintiff spent the sum of Three Hundred and Fifty Thousand
United States dollars ($350,000 U.S.D) on freight charges of the said rig.
The Proforma Invoice and other relevant documents in this regard are hereby
pleaded and shall be tendered during trial.
34.
That the defendant caused the plaintiff to expend the above stated
amounts to purchase and ship the rig to Nigeria solely for the purpose and
at the request of the defendant in consideration of the defendant opening
the plaintiffs bids, [both (1) Technical Information and (2) Commercial] and
for considering the bids.
35.
That the defendant only opened the Technical Information of the
plaintiffs bid, but kept foot-dragging with regard to the commercial Portion
of the bid, despite the fact that the plaintiff had completely met its own
obligation to provide the Land Drilling rig in consideration of the
defendant's opening of the two sections of the bid.
36.
That on the 20lh March, 1997, the plaintiff wrote to the
National Petroleum Investment Management Services (NAPIMS), (a body
established by the Nigerian National Petroleum Corporation) complaining of
the behaviours of the defendant in its refusal to inspect the rig in India
as well as open the Commercial portion of plaintiff s bid. The said letter
is hereby pleaded and shall be tendered during trial.
37.
That on the 26th March, 1997, the defendant wrote a letter
to the Nigerian National Petroleum Corporation (NAPIMS) intimating them of
their plan to continue with the bidding process by opening the Commercial
section of the Mallard Bay Drilling Nigeria Limited proposal and to return
the technical and commercial sections of the plaintiffs bid. The defendant
gave NAPIMS up to the 20th April, 1997, to respond to their plan,
failing which the defendant would assume that NAPIMS had concurred with the
proposal. The said letter
is hereby pleaded and shall be tendered during trial.
38.
...............................................................
39.
Further to paragraph 38 above, the Nigerian National Petroleum
Corporation (NAPIMS) then advised the defendant not to return the technical
and commercial bid package to the plaintiff, and to also exercise restraint
till the end of April, 1997, when plaintiffs rig arrived Nigeria from India.
40.
That the plaintiff and Mallard Bay Drilling Nigeria Limited were the
only two Companies that qualified for the technical bid.
41.
That on the 15th September, 1997, the defendant wrote to
the plaintiff stating that, due to fiscal constraint of the Federal
Government's 1997 budget it was rejecting all bids it received for the
proposed 1997 OML 53 Land rig campaign. The defendant then returned only the
commercial portion of the plaintiffs bid unopened; but assuring it of an
intention to resubmit the bids when fiscal situation improves. The said
letter is hereby pleaded and shall be tendered during trial.
42.
On or about the 6th of May, 1998, the defendant sent out
bid documents to Mallard Bay Drilling Nigeria Limited and other drilling
companies but refused to send to the plaintiff.
43.
That the defendant by its numerous correspondences with the plaintiff
contracted with the plaintiff to purchase the said Triveni Rig VI from
Triveni Engineering and Industries Limited on the consideration that the
defendant will open and consider the plaintiffs Technical and Commercial
bids.
44.
That in spite of the breach of contract, the action of the defendant
in opening and considering the commercial bid of Mallard Bay Drilling
Nigeria Limited and refusing to open and consider the plaintiffs bid is
highly tainted with discrimination.
45.
That the defendant caused the plaintiff to procure the said Land
Drilling Rig but subsequently failed to pen the Commercial bid."
The above averments from the
Statement of Claim clearly made the point that the defendant led the
plaintiff to believe that it’s (the plaintiffs) commercial bid would be
accepted and considered. The plaintiff placed reliance on that
representation and incurred an expenditure of millions of dollars to import
a drilling rig into Nigeria. The defendant later failed and or neglected to
allow the plaintiff to submit a bid for the said rig. It seems to me that on
those facts pleaded, the plaintiff had shown that, its contract with the
defendant had been unlawfully breached.
It was quite another matter
whether those facts when set against the averments in defendants, Statement
of Defence would succeed. But those facts in my humble view clearly entitled
the plaintiff to a hearing on the merit of its case. The trial high Court
was of the view that the facts disclosed by the plaintiff entitled it to a
hearing to determine the merit of its case. In the same manner the court
below per Tobi JCA (as he then was) in its lead judgment observed:
"I have thoroughly examined
the action filed by the respondent (i.e. the plaintiff) and I do not agree
with learned counsel for the appellant that there is no valid cause of
action. There is. The action may succeed. It may fail. The court is not yet
there. The court will decide at the end of the proceedings. For now there is
a valid cause of action."
I am satisfied that the court
below was right. The defendant, it would seem, was in too much a hurry to
have the plaintiffs case terminated; and the plaintiff in the process driven
away from the judgment seat before airing its case. That, it must be said,
is not the way the court operates. A party ought not to be precluded from
putting across his case in a full hearing except on the clearest indication
that the action is denuded of all merits even on the supposition that the
averments in the statement of claim are deemed as admitted by a defendant.
Issue 1, therefore, fails.
Appellant's issue No. 2 raises
the contention that the plaintiffs claim was an action in admiralty and that
therefore, a State High Court has no jurisdiction to entertain same. The
defendant would rather have the case heard by the Federal High Court. I
reproduced above a substantial part of the averments in Plaintiffs Statement
of Claim. These show that in its true essence, the claim was for a breach of
contract. It has nothing to do with the admiralty jurisdiction of the
Federal High Court. The court below decided the matter in these words:
"I have carefully examined the
claim and I am of the view that it is a claim in contract and has nothing to
do with admiralty. It is clearly stated in the claim that it is for the sum
of $ 10,000,000.00 (Ten million U.S. Dollar) as special and general damages.
It is not an admiralty action. Whether the transaction is an invitation to
treat or a contract will be decided by the Judge at the trial."
I agree with the views of the
court below. This appeal has no merits. It is dismissed with
Judgment delivered by
Aloysius
Iyorgyer Katsina-Alu.
J.S.C
I have had the advantage of
reading in draft the judgment delivered by my learned brother Oguntade JSC.
I am in total agreement that the appeal has no merit.
By the averments in the
Statement of Claim it is crystal clear that the action discloses a
reasonable cause of action. It is also clear that it has nothing to do with
the admiralty jurisdiction of the Federal High Court.
I would also dismiss the appeal with
Judgment delivered by
Mahmud Mohammed J.S.C
The Respondent in this appeal
was the Plaintiff at the Delta State High Court of Justice sitting at Warri
where it instituted a suit against the Appellant which was
the Defendant claiming the sum of
US$10,000.000.00 as special and general damages for breach of contract of
supply of Rig brought by sea from India to Nigeria. The break down of the
claim is US$1 .5 million cost of freight of the Rig; US$1.5 million interest
on Bank loan obtained for the purchase of the Rig; US$2.5 million for loss
of earnings on the Rig and US$5 million as general damages.
After the exchange of
pleadings between the parties at the trial court, the Defendant filed a
motion on 1st March, 1999 under
Order 24 Rules 2 and 3 of the Rules
of the High Court of Justice of Bendel State 1988 then applicable in
Delta State for an order -
"1.
Setting down for hearing and determination the points of law raised
in the Defendant's Statement of Defence particularly paragraphs 15 - 22.
2.
Based on prayer one above, an order dismissing the Plaintiff's action
for disclosing no reasonable cause of action and for being incompetent,
frivolous and vexatious in the circumstance. and/or
3.
An order strike out this suit for lack of jurisdiction of this
Honourable Court to entertain same,"
This application was heard and
dismissed by the trial court which held that the Plaintiffs action had
disclosed reasonable cause of action which that Court has
jurisdiction to entertain. The Defendant's appeal
to the Court of Appeal against the ruling of the trial court was also
dismissed. Aggrieved by the
dismissal of the appeal, the Defendant has further appealed to this Court
raising the following two issues for determination in the
Defendant/Appellant's brief of argument.
"1.
Whether the Court of Appeal was right in holding that the Plaintiffs
action discloses reasonable cause of action against the Defendant/
Appellant.
2.
Whether the Court of Appeal was right in holding that the Plaintiffs
claim is contract and not admiralty thereby vesting Delta State High Court
with jurisdiction as against the Federal High Court?"
These two issues were adopted
in the Plaintiffs/Respondent's brief of argument.
On the first issue for
determination, the law is indeed well settled that a cause of action is
constituted by the bundle or aggregate of facts which the law will
recognise as giving a Plaintiff a substantive
right to make the claim against the relief
or remedy being sought. In other words the factual situation on which the
Plaintiff relied to support his claim must be recognised by the law as
giving rise to a substantive right capable
of being claimed or enforced against the Defendant. That is to say, the
factual situation relied upon must constitute the essential ingredients of
an enforceable right. See
Bello .v. Attorney General of Oyo
State (1986) 5 N.W.L.R. (PT. 45) 828
and
Ibrahim .v. Osim (1988) 1 N.S.C.C. 1184 at
1194. From the facts
averred by the Plaintiff in the statement of claim particularly paragraphs
6, 34, 43 and 46 thereof which referred and relied on several documents
containing correspondence between the Plaintiff and the Defendant on the
subject of bidding for the supply of a Compact Mobile Land Drilling Unit of
a particular rating and specification in respect of the Defendant's proposed
OML 53 Land Rig Campaign, I am of the firm view that essential ingredients
of enforceable rights have been disclosed therein to justify the Plaintiffs
action seeking redress in the trial High Court. With the statement of claim
thus disclosing a right of action, whether or not the Plaintiff will succeed
at end of the determination of the claims by the trial court; is totally
irrelevant at this stage. The legal
defences raised by the Defendant in its statement of defence mostly arose
from the documents exchanged between the parties in the course of the
bidding transaction between them which documents must be in evidence before
they could be annalysed and be given probative value in support of the
Defendant's case that there was no valid
contract between the parties to support the action of the Plaintiff.
The second issue for
determination is on the jurisdiction of the trial Court to entertain and
determine the claims of the Plaintiff. The fact that the transaction between
the parties giving rise to the Plaintiffs claim involves the conveyance of
the Rig purchased from India to Nigeria by sea, does not give that
transaction the character of an Admiralty action. The Court below is
therefore right in its judgment now on appeal that reasonable cause of
action has been disclosed in the Plaintiffs action which the trial Court has
jurisdiction to hear and determine.
Having read the judgment of my
learned brother Oguntade, JSC, I am entirely with him that this appeal has
no merit. Accordingly, I also dismiss the appeal with
Judgment delivered by
Francis Fedode Tabai
JSC
I had preview of the lead
judgment prepared by my learned brother Oguntade JSC wherein he narrated the
facts and quoted copiously all the relevant paragraphs of the statement of
claim. I shall not repeat them. He reasoned and concluded that the appeal
lacks merit and dismissed it I agree with his reasoning and conclusion.
The application at the trial
court which has given rise to the appeal to the Court below and to this
court was dated and filed on the 1/8/99. It prayed for:
1.
An order of this Honourable Court setting down for hearing and
determination the points of law raised in the Defendant's Statement of
Defence particularly paragraphs 15-22.
2.
Based on prayer one above, an order dismissing the Plaintiff's action
for disclosing no reasonable cause of action and for being incompetent,
frivolous and vexations in the circumstances; and/or
3.
An order striking out this suit for lack of jurisdiction of this
Honourable Court to entertain same.
In the considered ruling on
the 3/12/99, the learned trial judge dismissed the application.
The appeal to the Court below
was equally dismissed in its judgment on the 4th of April 2001.
In the said judgment the court per Niki Tobi, JCA (as he then was) had this
to say:-
"I
have thoroughly examined the
action filed by the Respondent and I do not agree with learned counsel for
the appellant that there is no valid cause of action. There is. The action
may succeed. It may fail. The court is not yet there. The court will decide
at the end of the proceedings. For now there is a valid cause of action..."
(See page 74 of the record of
proceedings) On the issue of jurisdiction he added:-
"I
have carefully examined the claim
and I am of the view that it is a claim in contract and has nothing to do
with admiralty. It is clearly stated in the claim that it is for the sum of
US$10,000.000.00 or as special and general damages. It is not an admiralty
action. Whether the transaction
is an invitation to treat or a contract will be decided by the trial judge
at the trial."
(See the same page 74 of the
record of proceedings)
I cannot agree more with the
lower court's opinion on the two issues of reasonable cause of action and
the trial court's alleged lack of jurisdiction to entertain the claim. In
the English case of Board Of Trade
.v. Cayzer Irvine And Co. Ltd (1927) Ac 610 At Page 617 a cause of
action was simply defined to mean
"that
which makes an action possible." And having regard to the settled
principle that a cause of action is determined from the facts pleaded in the
Statement of Claim, I examined the Statement of Claim. I am satisfied beyond
any doubt there is a reasonable cause of action.
Similarly the issue of
jurisdiction can only be determined from the Plaintiffs claim. I do not
think the court is bound to style the suit as an admiralty matter simply
because the Defendant so asserts. Clearly the suit is not an admiralty
matter within the exclusive jurisdiction of the Federal High Court. It is
simply a claim in contract over
which the trial High Court has jurisdiction.
For the foregoing and the
fuller reasons in the lead judgment of Oguntade JSC, I also dismiss the
appeal. I abide by the costs as assessed in the leading judgment.
Judgment delivered by
Christopher Mitchel Chukwuma
-Eneh
In this matter commenced at
the Delta State High Court Warri Judicial Division, the plaintiff claims
against the defendant read as follows:
The sum of $10,000,000 (Ten
million U.S. dollars) being special and general damages for breach of
contract. The particulars of damages
1.
Cost of freight of Rig from
India to Nigeria and Marine
Insurance SI.5 US Dollars.
2.
Interest on bank loan for purchase of the Rig
SI million US Dollars.
3.
Loss of earnings on the Rig
S 2.5 Million USD
4.
General Damages S5 Million USD
Total Damages S10
Million USD"
Parties in this matter filed
and exchanged their pleadings. The defendant in its Statement of Defence has
taken points of law against paragraphs 16, 17, 18, 19, 20, 21 & 22 of the
Statement of Claim. In furtherance of this act, the defendant filed an
application under Order 24, Rules 2,
3 and 4 of the High Court (Civil Procedure) Rules of Bendel State 1988 as
applicable to Delta State, praying the Court to set down for hearing the
points of law raised in the Statement of Defence and an order
dismissing the plaintiffs action for disclosing no reasonable cause
of action as well as an order striking, out the suit in its entirety for
lack of jurisdiction to entertain it. The trial court granted the said
order, set down the said points of law for hearing. After hearing" the
parties on the application the trial court held that the plaintiffs claim
disclosed a reasonable cause of action; furthermore that' it.
has jurisdiction to entertain the suit and
dismissed the application. The defendant being aggrieved by the decision
appealed to the Court of Appeal (court below) which also dismissed the
appeal and affirmed the decision of the court below. The defendant
(appellant in this court) has now appealed to this court by a Notice of
Appeal dated 7/3/2002 and therein has raised 3 grounds of Appeal from which
it has in its brief of argument tiled in this matter distilled 2 issues for
determination as follows:
(1)
Whether the Court of Appeal was right in holding that the plaintiff’s
action discloses a reasonable cause of action against the
defendant/appellant.
(2)
Whether the Court of Appeal was right in holding that the plaintiffs
claim is contract and not admiralty thereby vesting the Delta State High
Court with jurisdiction as against the Federal High
Court.
The plaintiff (Respondent in
this court) has in its brief of argument filed in this matter distilled 2
issues for determination as follows:
"Issue No I:
Whether the Court of Appeal
holding that the plaintiff’s statement of claim discloses a cause of action
against the defendant is not right in view of the circumstances surrounding
the whole
transaction Distilled from ground 1 of the grounds of appeal.
Issue No 2:
Whether the Court of Appeal
finding that the plaintiffs claim against the defendant is not founded on
admiralty jurisdiction but on contract thus conferring jurisdiction on the
Delta State High Court is Right? (distilled from
ground 2 of the Grounds of Appeal)."
The appellants having relied
on a number of legal authorities has submitted that, the Statement of Claim
as a matter of facts and law has not raised by the averments therein the
ingredients to constitute a reasonable cause of action to sustain the
instant suit nor any basis to
suggest that the action is rightly founded in
contract and not in admiralty. It is submitted that the action as presently
constituted is outside the jurisdiction of the State High Court being a
matter within the admiralty jurisdiction.
The appellant relies on the cases
of Orient Bank Nigeria Plc .v. Bilante International Ltd.
(1997) 8 NWLR (pt.515) 80 and Innih .v. Ferado A& C Ltd (1990)
5 NWLR (pt.I52) 604 to
submit that the transaction reached by the parties as averred in the
statement of claim can only amount to mere invitation to treat, meaning that
there is no formal contract between them. In this respect, the appellant has
referred to K.S.U.D.B.
.v. Fanz
Construction Ltd (1990) 4 NWLR (pt.i42) 14 Adebanjo v. Brown (1990) 3 NWLR
(pt.141) 661 at 688-690 and U.B.N.
ltd v, SAX (1994) 8 NWLR (pt.361) 150 at 169.
On the question that the court
below did not consider properly the question of cause of action and the
finding that the action is rightly founded in contract; it has relied on
7up Bottling Co. Ltd .v. Abiola & Sons Bottling Co. Ltd (2001) FWLR (pt.70)
1611 at 1640-1642 to buttress the point. On the submission that no
wrongful act of the defendant has been pleaded in the Statement of Claim a
necessary ingredient of cause of action it has relied on Rinco
Construction Co. Ltd .v. Veepee Industries Ltd (1992) 5 NWLR (pt.240)
248-, 255-256. On the definition of cause of action the appellant relies
on Bello .v. Attorney-General Oyo State (1995) 5 NWLR 828 at 876
in expatiation. It re-echoes on the principles laid down in Nigeria
Airways v. Lapile (1990) 3 NSCC (vol.21) 397 at 405 that is to say, the
basis under which a court may dismiss an action in contract firstly, when
there is no contract between the parties or no valid contract in law or the
matter is already res judicata or
the relief being asked is based on a ground which is not a ground for such a
relief and Halbury's Laws
of England 3rd edition vol. l page. 6, Article 9. This
court is urged to dismiss the plaintiffs/respondent's claims as lacking in
merit.
The respondent has submitted
that the Statement of Claim has showed the wrongful acts of the defendant
perpetuated on the plaintiff and the damage giving rise to a reasonable
cause of action and damages. See: Halbury's Laws of England 3rd
edition vol. 1 page 6 Article 6.
Savage v.
Uwaechie (1972) SC
213, Kusada v. Sokoto N.A,
(1987) 4
ANLR 337.On
the question that the court below dealt with all the issues submitted to it
and rightly decided the matter and thus the respondent has in that regard
distinguished this matter from the case of
Carbolic Smoke
Ball Co. v. Carllil (1893) 1
Q.H. 256. It is submitted that the court below has rightly held that
prima facie the respondent has showed a good cause of action as averred in
its Statement of Claim to sustain the instant action and that the court also
rightly held that it has the jurisdiction over the matter as it is not an
admiralty matter but one founded on contract. The court is urged to dismiss
the appeal.
Because of the peculiar facts
and circumstances of this matter I have given the case of each side of the
divide some detail so as to make for understanding of the issues raised for
determination in the matter. I start this discourse by firstly examining the
definition of cause of action. It is in a way an issue concurrent with
determining the jurisdiction of the trial court to entertain this matter. An
elaborate definition has been given by the learned authors of
Halsbury's Laws of England 3rd
edition
page 6 Article 9 and 1 have to resort to that for being very comprehensive
and 1 quote:-
“9.
Popular and strict meanings:
The popular meaning of the
expression “cause of action” is that particular act on the part of the
defendant which gives the plaintiff his cause of complaint (a). There may
however, be more than one good and effective cause of action arising out of
the same transaction (b) Strictly speaking, 'every fact which is material to
be proved to entitle the plaintiff to succeed; every fact which, the
defendant would have a right to traverse (c), forms an essential part of the
cause of action. Which “accrues” upon the happening of the latest of such
facts (d)? Consequently, in any particular case, 'the cause of action'
strictly so called can only be said to arise within a
certain local area, when all such material facts
arise within that area, in which case (as it is "often stated somewhat
tautologically) the 'whole' cause of action so arises." See
Afolayan .v. Ogunrinde
(1990) NWLR Part 127 at
p.395-396; in which the above abstract has been applied with approval of
this court.
It is therefore, settled that
a cause of action constitutes a bundle of facts and circumstances giving
rise to the plaintiffs enforceable claims against the defendant. The facts
and circumstances have to be as pleaded in the Statement of Claim. See
Ibrahim .v. Osim (1987) 4
NWLR (pt.67) 965. And
so, it has to be ascertained by having recourse to the statement of claim.
As can be seen from the definition, the proposition resolves into two
crucial factors thus: - the defendant’s wrongful act and the consequential
damage to the plaintiff. These two factors must co-exist to constitute a
cause of action before the court. It does not take account of whether the
cause of action will succeed or fail. A cause of action is
valid-irrespective of the strength or weakness of the plaintiff’s case. See:
Eseigbe .v. Agholor (1990) 7 NWLR (pt.161) 234.
In expounding further on the
matter of the defendant's wrongful acts and the damage to the plaintiff in
this matter 1 refer to paragraphs 6, 34, 43 and 46 of the Statement of Claim
and I quote:-
"6.
The plaintiff then informed the defendant that it did not have that
particular type of land drilling Rig and the parties agreed that the
plaintiff should purchase the Rig from India.
34.
That the defendant caused the plaintiff to expend the above stated
amounts to purchase and ship the rig to Nigeria solely for the purpose and
at the request of the defendant in consideration of the defendant opening
the plaintiffs bids, (both (1) Technical Information and (2) Commercial) and
for considering the bids.
43.
That the defendant by its numerous correspondences with the plaintiff
contracted with the plaintiff to purchase the said Triveni Rig VI from
Triveni Engineering Industries Limited on the
consideration that the defendant
will open and consider the plaintiffs Technical and Commercial bids,
46.
That as a result of the action of the defendant the plaintiff has
sustained substantial loss and thereby suffered damages."
To begin with, the foregoing
averments bear out clearly the representations of facts is made to the
plaintiff and estoppel establishing legal relationship between the parties
so that if proved it will give rise to judgment for the plaintiff.
There is in this sense a cause of action.
See Eastern Distributors .v. Goldring (1957) 2 Q.B. 600 on Section
21 of the Sale of Goods Act 1893 also Hopgood .v. Brown (1955) I WLR
213 per Evershed M.R. and Armstrong .v.
Sheppard & Short Ltd (1959)
Ch. 384 at 399. These
cases have taken their bearing from the classic case
of
Low .v. Bouvrie (1891} 3
Ch.82. The
question of the plaintiff having raised a reasonable cause of action on the
pleaded facts in the Statement of Claim on the backdrop of the cases cited
above is beyond question. The paragraphs of the Statement of Claim
reproduced above bear out clearly the wrongful act of the defendant and the
consequential damages suffered by the plaintiff; whether or not the cause of
action will succeed is entirely a different kettle of fish. At least, the
parties are afforded the -opportunity to prove their case and the court the
duty to
decide on the matter. In my view the Statement of Claim discloses a
reasonable a cause of action.
Issue one is therefore
resolved in favour of the respondent.
1 have
also considered Issue 2 by recoursing, again, to the
Statement of Claim and there, can be no doubt
that the claim for special and general damages-by the respondent flow
directly from the alleged breach of the
deal between the parties. The various sums claimed as per
the Writ of Summons, clearly quantify in money
terms the damages suffered by the
plaintiff in meeting his obligations under the deal. I also
resolve issue 2 in favour of the respondents.
On the whole, I agree
entirely with
fuller reasoning
and conclusions 'reached in the judgment prepared by my learned
brother
Oguntade. JSC that this appeal is without merit and should be dismissed. I
also dismiss it and endorse the orders in the lead judgment.
Counsel
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