NIGER INSURANCE CO. LTD V. ABED BROTHERS LIMITED & ANOR

CORAM

ALEXANDER, CHIEF JUSTICE, NIGERIA

EMANUEL OBIOMA OGWUEGBU, JSC. JUSTICE, SUPREME COURT (Read the Leading Judgment)

OKAY ACHIKE JUSTICE, SUPREME COURT

PARTIES

NIGER INSURANCE CO. LTD APPELLANTS

RESPONDENTS

AREA(S) OF LAW

SUMMARY OF FACTS

The appellant is an insurance company and was the insurer of a motor vehicle acquired by the respondent under a hire-purchase agreement. The insurance agreement between the appellant and the respondent was in the nature of a comprehensive policy the terms of which are contained in the Standard Policy of the appellant, which was admitted at the trial as Exhibit 23. The trial judge held that there was an implied term in the policy of an undertaking by the appellant to repair the motor vehicle within a reasonable time. He found that the appellant was in default in the discharge of that obligation and was liable for breach of the policy. The appellant appealed against this decision.

HELD

The appeal was dismissed and the decision of the court of appeal was affirmed.

ISSUES

That the decision is against the weight of the evidence.

The learned trial Judge in fixing an arbitrary figure of £600 (N1200) as monthly loss of profit failed to consider the evidence which if he had done could have produced a lesser figure of N1,000.

Whether or not the learned Judge was right in holding that the limitation of liability, under Section 1 clause 2 and the exception clause 1(i) did not shield the appellant from the consequence of its own default in discharging its obligation under the policy to repair the motor vehicle within a reasonable time.

RATIONES DECIDENDI

THE PRESENCE OF A FUNDAMENTAL BREACH OF THE CONTRACT IS ONE OF THE TRUE CONSTRUCTIONS OF THE CONTRACT

“It is settled law that the question whether an exception clause or a limitation of liability clause in a contract is applicable where there is a fundamental breach of the contract is one of the true construction of the contract.” Per BELLO, JSC

PERFORMANCE WITHIN A SPECIFIC TIME WILL HAVE TO BE DETERMINED ACCORDING TO THE CIRCUMSTANCES OF THE CASE

“It is trite law therefore that where a contract has to be performed within no specified time, which connotes a reasonable time, such time will have to be determined according to the circumstances of the case, and with particular reference to the means and ability of the person by whom the contract is to be performed.” Per BELLO, JSC

THE LAW IMPLIES THAT THE PERFORMANCE OF AN OBLIGATION SHOULD BE DONE WITHIN A REASONABLE TIME.

“Where a contract is silent as to the time for the performance of an obligation, the law implies that the obligation should be performed within a reasonable time.” Per BELLO, JSC