CHIEF S. I. AGU V GENERAL OIL LIMITED

CORAM

PARTIES

CHIEF S. I. AGU APPELLANTS

GENERAL OIL LIMITED

RESPONDENTS 

AREA(S) OF LAW

SUMMARY OF FACTS

The Plaintiff/Appellant with the Defendant /Respondent entered a lease agreement for the period of 10 years, which was subject to renewal by the Defendant/Respondent.  It was agreed by the parties in Clause 4B of the lease agreement that the 1st Defendant/Respondent was not to sublet, assign or part with possession of the property without the consent of the Plaintiff/Appellant. The 1st Defendant/Respondent thereafter mortgaged the property to First Bank of Nigeria Plc(the 2nd Defendant/Respondent). As a result of the mortgage, the Plaintiff/Appellant was unable to lease or use his property. This prompted him to institute an action at the High Court of Delta State against the Defendants/Respondents, seeking declarative order that the Mortgage Deed created by the Defendants/Respondents be declared void with special and general damages. The trial court dismissed the Plaintiff/Appellant’s first claim but granted the special and general damages demanded for by the Plaintiff/Appellant. Dissatisfied with the Trial Court’s decision, the Defendant/Respondent appealed to the Court of Appeal wherein his appeal was allowed in part. The Court of Appeal set aside the grant of the general damages made by the trial Court. Aggrieved, the Plaintiff/Appellant appealed to the apex court.

HELD

Appeal Dismissed

ISSUES

1. Whether the Court of Appeal was wrong in setting aside the general damages of N7.5million awarded to the appellant by the trial court?

RATIONES DECIDENDI

ALTERATION OF DAMAGES AWARDED ON APPEAL- THE APPELLATE COURT WILL ONLY ALTER AWARD OF DAMAGES BY A TRIAL COURT ONLY WHERE SAME IS NOT COMMENSURATE OR MADE ON WRONG PRINCIPLES

‘‘It is settled law that where damages have been awarded by a trial court, an alteration of the award will be made by an appellate court only where it is shown that the award is either manifestly too low or too high or was made on wrong principles – See the case of U.B.A. Vs Achoru (1990) 6 NWLR (Pt. 156) 254: ijebu-Ode Local Court Vs Adedeji Balogun & Co. (1991) 1 NWLR (Pt. 166) 136: Onaga Vs Miacho & Co. (1961) 2 NSCC 189 at 192’’. PER.W.S.NKANU ONNOGHEN, J.S.C

STATUS OF EVIDENCE LEAD ON FACTS NOT PLEADED- EVIDENCE LED ON FACT NOT PLEADED GOES TO NO ISSUE

‘‘It is trite that parties are bound by their pleadings. And evidence led on facts not pleaded goes to no issue. See American Cyanamid Company V. Vitality Pharmaceuticals Ltd (1991) 2 NWLR (pt. 171) 15, Osho & Anor. V. Foreign Finance Corporation & Anor. (1991) 4 NWLR (pt. 184) 157, Buraimoh V. Esa (1990) 4 SC I.’’ PER. J. I. OKORO, J.S.C

DUTY OF THE COURT WHILE CONSIDERING DAMAGES FROM BREACH OF CONTRACT- THE COURT IS NOT TO GIVE ROOM FOR SPECULATIVE OR SENTIMENTAL DAMAGES IN CONSIDERING DAMAGES IN BREACH OF CONTRACT

‘‘A court, when considering damages arising from a breach of contract, there is no room for damages which are merely speculative or sentimental unless these are specifically provided for by the express terms of the contract. Also, in awarding damages in such a claim, the court must be careful not to compensate a party twice for the same wrong.’’ PER. J. I. OKORO, J.S.C

DAMAGES FOR BREACH OF CONTRACT- THE COURT IS CONCERNED ONLY WITH THE DAMAGES WHICH ARE NATURAL AND PROBABLE CONSEQUENCE OF THE BREACH.

‘‘It is now well settled that in a claim for damages for breach of contract, as in the instant case, the court is concerned only with damages which are natural and probable consequences of the breach or damages within the contemplation of the parties at the time of the contract. See Mobil Oil Nig. Ltd V. Akinfosile (1969) 1 NMLR 227, Arisons Trading & Engineering Company Ltd V. The Military Governor of Ogun State (2009) 15 NWLR (pt. 1163) 26.’’ PER. J. I. OKORO, J.S.C

DOUBLE COMPENSATION- A PARTY WHO HAS BEEN COMPENSATED FOR AN INJURY UNDER ONE HEAD OF DAMAGES WILL NOT BE COMPENSATED AGAIN FOR THE SAME INJURY UNDER ANOTHER HEAD

‘‘By the law against double compensation, a party who has been fully compensated under one head of damages for a particular breach or injury, cannot be awarded damages in respect of the same breach or injury under another head. See Chitex Industries Ltd V. Oceanic Bank (2005) 23 NSCQR 148, Onago V. Micho & Co. (1961) ANLR 324 at 328, Nigerian Arab Bank Ltd V. Shuaibu (1991) 4 NWLR (pt 186) 450 at 456, Tsokwa Motors Nig. Ltd V. UBA Plc(2008) 2 NWLR (pt. 1071) 347.’’ PER. J. I. OKORO, J.S.C

AWARD OF DAMAGES IN BREACH OF CONTRACT- IN AWARD OF DAMAGES THE COURT CONSIDERS DAMAGES THAT WERE CONTEMPLATED BY BOTH PARTIES AT THE TIME THE CONTRACT WAS MADE

‘‘In Alhaji Mustapha Aliyu Kusfa V. United Bawo Construction Co. Ltd. (1994) 4 NWLR (pt 336) I, it was held that in cases of breach of contract, the damages that would be awarded are the pecuniary loss that may fairly and reasonably be considered as either arising naturally from the breach itself or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract as a probable result of the breach.’’ PER. J. I. OKORO, J.S.C

MEASURE OF DAMAGES IN BREACH OF CONTRACT- DAMAGES IN BREACH OF CONTRACT IS MEASURED BY THE LOSS FLOWING DIRECTLY AS CONSEQUENCE OF THE BREACH

‘‘In an action for breach of contract, the measure of damages is the loss flowing naturally from the breach and is incurred in direct consequence of the breach. See Gonzbee Nig. Ltd V. NERDC (2005) 22 NSCQR 735.’’ PER. J. I. OKORO, J.S.C

ESSENCE OF AWARD OF DAMAGES IN BREACH OF CONTRACT- THE ESSENCE OF AWARD OF DAMAGES IN BREACH OF CONTRACT IS TO RESTORE THE PLAINTIFF TO THE POSITION AS IF THE CONTRACT HAS BEEN PERFORMED.

‘‘The essence or damages in breach of contract cases is based on what is called restitution integrum i.e the award of damages in a case of breach of contract is to restore the plaintiff to a position as if the contract has been performed. See United Bank for Africa Plc V. BTL Industries Ltd (2006) 28 NSCQR 381.’’ PER. J. I. OKORO, J.S.C

CASES CITED

STATUTES REFERRED TO

Evidence Act 2011

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