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In The Supreme Court of Nigeria On Friday, the 10th day of March 2006
SC. 252/2001
Before Their Lordships
Between
And
Judgement of the Court delivered by Ikechi Francis Ogbuagu, J.S.C.
This is an appeal against the decision of the Court of Appeal; Benin Division (hereinafter called "the court below") delivered on 29th March, 2001, allowing the appeal by the Defendant/Respondent to it from the decision of the High Court of Ondo State holden at Akure -per Adeloye - Chief Judge, on 25th March, 1996.
Dissatisfied with the said decision, the Appellants who were the plaintiffs in the trial court, and also the Cross Appellants in the court below, have again, appealed to this Court on twelve (12) grounds of appeal.
Both in the Amended Writ of Summons and paragraph 53 of the Statement of Claim, the Appellants, claimed from the defendants/respondents as follows:
"i) A Declaration that the refusal of the Defendant to open letter of Credit required by the Plaintiffs constitutes a breach of the investment and Mortgage agreement between the Plaintiffs and the Defendant
ii) An Order of Specific performance, that the Defendant should unconditionally open the letter of Credit with the Plaintiffs' new suppliers at the current price in 1994 of the machinery and equipment needed for the project, the subject of contract.
Alternatively:
iii)
An Order directing the defendant to pay the sum of
iv) An Order directing the defendant to pay to the plaintiffs an amount representing 10% of the judgment debt as interest per annum from the date of judgment until the judgment is finally liquidated".
The trial court in its judgment at page 97 of the Records, stated as follows:-
"in sum I refuse the declaration sought and come to the conclusion that the fraud and distrust of the suppliers by the plaintiffs frustrated the business deal of the plaintiffs and led to a breach of the Mortgage Agreement. I order that the defendant open a letter of credit with the plaintiffs' new suppliers at the current price of the machinery and equipment needed for the project or in the alternative the defendant should refund all the expenses of the plaintiff at the time of application in 1988".
The respondent appealed against the said decision. The appellants, cross-appealed. Briefs were filed and exchanged by the parties. In a unanimous decision, the court below, allowed the main appeal, dismissed the claims of the appellants and dismissed the cross-appear hence the appeal by the appellants to this Court.
The appellants in their Brief, have formulated six (6) issues for determination, namely,
"Issue One
Whether the Court of Appeal was right in confirming that the doctrine of frustration applied to this case when same was neither pleaded by either of the parties and there was no evidence to have warranted, such a finding? Grounds 6 and 7 of the Notice of Appeal.
Issue Two
Whether the Court of Appeal was right in holding that the refusal by the respondent to accept the new supplier nominated by the appellant did not constitute a breach of the Mortgage and Investment Agreement? Grounds 9 and 10.
Issue Three
Whether the omission of the Court of Appeal to give equal prominence to the case of the appellant in the main appeal and those of the respondent in the cross-appeal has occasioned a miscarriage of justice in this case? Grounds 11 and 12 of the Notice of Appeal.
Issue Four
Whether the application of the Supreme Court's decision in Mazin Eng. Ltd. V. Power Aluminium Ltd.(1993) 5 NWLR (Pt 295) 526 and the rejection of the applicability of the Supreme Court decision in Nasaralai Vs. Arab Bank 1986 4 NWLR (Pt. 36) 409 by the Court of Appeal has not occasioned a miscarriage of justice in this case? Grounds 4 and 8 of the Notice of Appeal.
Issue Five
Whether the finding by the Court of Appeal to the effect that the suppliers (i.e. Waf Export Ltd.) was an agent to the plaintiff and that the claim of the plaintiff did not correspond with the relief ordered by the trial Judge were not perverse? Grounds 3 and 5 of the Notice of Appeal.
Issue Six
Whether the Court of Appeal was right in confirming the legitimate use of an allegedly altered clean report of finding when same was never pleaded nor given in evidence by either of the parties but only raised speculatively by the 'defendant's Counsel in a written address? See Grounds 1 and 2 of the Notice of Appeal".
The Respondent in its Brief has adopted all the issues formulated by the Appellants.
When this appeal came up for hearing on 13th December, 2005, Bolanle Esq., - learned counsel for the Appellants, adopted their Brief - He referred to their case No. 1 of the List of Authorities - i.e. Mozin Engineering Ltd, v. Tower (not Power as appears in the Brief and list) Aluminium Ltd. (1993) 5 NWLR (Pt 295) 320 (it is also reported in (1993) 6 SCNJ.178 and urged the Court, to follow it. He submitted that to merely plead frustration without evidence in support, goes to no issue. He finally, urged the Court to allow the appeal.
Chief Fesobi, referred to and adopted their Brief of Argument filed on 16th October, 2001, and urged the Court, to dismiss the appeal for, lacking in merits, according to him.
From the pleadings and the evidence of the parties, the facts briefly stated, are that the 1st plaintiff/Appellant, is a limited liability company incorporated in Nigeria, while the 2nd plaintiff/Appellant, is the Managing Director of the 1st plaintiff/Appellant. The 1st plaintiff/Appellant carries among its businesses, the servicing and general repairs of Automobiles and heavy duty trucks. The defendant/Respondent is a financial institution.
On 12th
February, 1987, the Appellants and the Respondent, executed an investment
and mortgage Agreement wherein, the Respondent agreed to provide the
Appellants, a loan of With the consent of the Respondent, the Appellants nominated Waf Export Ltd based in London to supply the machinery and Midland Bank also based in London, as the confirming bank to the letter of credit transaction. Shortly after the execution of the said Agreement, the Appellants drew the attention of the Respondent, to the insufficiency of the said sum of £226,000.00 (two hundred and twenty-six thousand pounds sterling) foreign exchange earlier approved for the project. As a result of this information by the Appellants to the Respondent, the sum of $35.000.00 (thirty-five thousand dollars), was further approved by the Respondents, bringing or making the total amount approved, to £245,860.32 (two hundred and forty-five thousand eight hundred and sixty pounds thirty-two pence). The original proforma invoice was thereupon amended, to reflect this later approval. The amended proforma invoice is dated 4th February, 1988. The Respondent, thereafter, forwarded the said invoice to Cotecna International Ltd. - who is the Inspection Agents, for onward transmission to Midland Bank and the said suppliers.
It is noted by me that the said amendment, was approved by the World Bank that had provided the line of credit and remitted the said amount of £245,860.32 to Midland Bank in order to finance, the purchase based on the amended proforma invoice. It was after this, that the Respondent, (not the plaintiffs as stated in the Appellants' Brief), opened a letter of credit No. 880043/WB in which the said WAF Export Ltd, was named as the beneficiary.
The request for additional loan to the Appellants was confirmed to Cotecna International Liaison Officer in Lagos by a letter - exhibit "F" dated 19th July, 1988. Attached thereto, were Exhibits F1 to F10 - i.e. particulars of the machinery specified for supply by WAF Export Ltd. (hereinafter called "the Suppliers"), in view of the said amended letter of credit, the 1st Appellant, on arrival from London to Nigeria on 30th Nov, 1988, approached the Respondent with a request to extend its said letter of credit for another or further six months - i.e. to 30th June, 1989.
Things started to "fall apart" or "wobble”, when the Appellants, learnt that the Suppliers, had deviated/reneged from the agreed supply of the machinery contained in or, specified in the said invoice and were looking for some sub-standard ones and were even trying to inflate the prices. The Appellants immediately wrote exhibit "J" dated 7th March, 1989 (not 17th March, 1989, as appears at pages 88 and 418 of the Records). Exhibit J in headed/captioned -"Application to stop the Shipment of sub-standard machines and inflation of prices".
In response to Exhibit J, the Respondent wrote exhibit "K" dated 8th March, 1989, to Cotecna International Ltd. As a result of the receipt of Exhibit "M" from Cotecna International Ltd. dated 31st May, 1989, to the Appellants informing/intimating them that the Suppliers had printed the Appellants' letter heads/headings and forged the signature in order to obtain documents from Cotecna International Ltd. (hereinafter called simply "Cotecna") giving permission for a deviation from the original contract, the Appellants, wrote Exhibit "O" dated 8th July, 1989, asking or urging on the Respondent, not to make any payment to the Suppliers. The Appellants again, wrote another letter - exhibit "P" dated 10th July, 1989 to the Respondent and followed it up with a Telex or Telegram to the Respondent urging it not to transact any business with any expired document.
Eventually, the Appellants sought to substitute the Suppliers, with another or new supplier - C.J. SERVICES LTD., but the Respondent refused, It is as a result of the refusal, that the plaintiffs/Appellants, instituted the action that has eventually, led to the instant appeal. The Appellants' case, succeeded at the said trial High Court. The Respondent appealed to the court below while the Appellants cross-appealed. In the said unanimous decision, the court below, allowed the appeal of the Respondent and dismissed the said cross-appeal.
In my humble and respectful view, the real and crucial issues for determination are Issues Two, Four and Five of the Appellants. The learned trial Judge at page 91 of the Records, found that there was mutual distrust between the Appellants and the Suppliers or the Agent. At page 93B of the Records, (the side numbering is faulty). His Lordship, stated inter alia, as follows:
"The alteration to the Clean Report of Finding was made by the plaintiff (sic) with the connivance of the supplier".
".........It is not explained to the defendant what fatal effect the alteration by the two parties without the prior consent of the Bank would have.....".
He reproduced the concluding paragraph of Exhibit "M" which read thus:
"We would draw your attention to established procedure, which protect your interests, which state that any amendment to a Form "M" should be completed via the issuing bank and not in the form of a letter from the applicants".
Then at page 94, he stated as follows:
"I have a strong feeling that the agreement by the two parties to alter the Clean Report of Finding without resort to NBCI (i.e. the respondent) or Cotecna was made in ignorance".
He went on thus: "The only issue on which the supplier and the plaintiff (sic) agreed was the amendment of the proforma invoice Form M dated 19/7/88, whereby the cost of machinery was increased by $35,000.00. Therefore, it was a catalogue of distrust between the plaintiff and the Supplier.........”
His Lordship went on to expatiate and inter alia, stated as follows:
"............Plaintiffs compared the list with the original order and found that the imported machinery was not according to the specification. This he reported to NBCI. - Plaintiff himself advised the Bank not to release money to the Supplier for the machinery shipped to Nigeria. As the Plaintiff's Manager was rejecting the goods of the Suppliers, he was on the other hand entering into an agreement with the suppliers to clear the machinery imported. He again applied for a loan to take delivery of the machinery he had himself originally condemned".
(The underlining mine)
At page 95, the learned trial Chief Judge, had a "swipe" on the 1st Appellant. He had this to say, inter alia -
"...........The report of the demand for gratification originated from the plaintiff (sic). Furthermore, the plaintiff (sic) later again admitted that he (sic) (meaning the 2nd plaintiff/Appellant) sought to over invoice his goods to accommodate what he had spent in travelling to London". (The underlining mine)
He went on, inter alia, as follows:
"in my view, the more serious complaint against the relationship of the Supplier and the plaintiff (sic) is the total lack of trust between the two. The very basis of any commercial or business relationship is trust".
(The underlining mine)
He expatiated and then stated inter alia, as follows:
"......... I agree with the submission of learned counsel for the defendants that the Supplier by his fraudulent and unreliable style of business was responsible for the frustration of the contract agreement between the plaintiffs and the defendants. The plaintiff was no less guilty by his false accusation of the staff of the defendants".
(The underlining mine)
Then said he:
"I do not believe the plaintiff (meaning the 2nd plaintiff) when he said that he was being forced by the officers of NBCI to sign documents that could be incriminatory or that he was arrested by the staff of the Bank on a chance visit to their premises........".
(The underlining mine)
Yet and yet, surprisingly and remarkably, for reasons best known to His Lordship, at pages 96 and 97 of the Records, he made a "U-turn" so to speak and made the said orders at page 97 of the Records part of which i had reproduced earlier in this Judgment.
The court below - per Ba'aba, JCA at pages 434 to 435, stated as follows:
"I am therefore of the firm view that the refusal of the appellant to accept the new supplier nominated by the respondents does not constitute a breach of contract in the circumstances of this case as no self respecting bank would commit its resources without imposing strict conditions. The case of Nasaraisi v. Arab Bank (1986) 4 NWLR (Pt. 36) 409,415 -416 relied upon by the learned counsel for the respondents, is not applicable in this case where the letter of credit has expired. Even in Nasaraisi (supra) the right of the appellant to reject a supplier was recognized.”
(The underlining mine)
I agree. I will in fact, add that with some of the findings or pronouncements of the learned trial Chief Judge hereinabove reproduced, no Bank worth its while, will ever dare to have any further dealings with a customer such as the Appellants or the 2nd Appellant in particular, whose dubious activities, would amount to eating its/their cake and having it. Worse still, where their customer falsely, accused their staff, of grievous wrong doing.
More disturbing, is/was, when the learned trial Chief Judge, proceeded to make an award or awards that were never pleaded nor asked for by the Appellants. He gave his reason for making the said orders at page 96 of the Records that the project still stands. It need be emphasized, that the various findings of fact by the learned trial Chief Judge some of which I have reproduced in this Judgment, were not appealed against by the Appellants. The consequence in law is that the said findings are deemed to be correct. See Chief Biariko & ors. v. Chief Edeh - Ogwuile & ors, (2001) 4 scnj. 335 (5) 353 cited and relied on by the learned counsel for the Respondent; Ejiwhomu v Edet-Eter Mandilas Ltd. (1986) 9 S.C. 41 @ 47: and Alhaji Adeyemi & anor. v. Chief Olakunmi & 10 ors. (1999) 14 NWLR (Pt. 638) 104 (5) 211 - 214; (1999) 12 SCNJ. 224 just to mention but a few.
Again, the court below held that there is no dispute that the 2nd Appellant, admitted that there were irregularities in the transaction caused by the Suppliers. See page 434 of the Record. I note that there is no appeal against this finding by the Appellants.
A reading by me of paragraph 20 of the Amended Statement of Defence, puts me in no doubt, that the Respondent, gave very good reasons for its refusal to continue with the Agreement - Exhibit A - It is averred as follows:
"...... .the Defendant avers that the mere nomination of a Supplier by the plaintiff is not enough. Such a change must be approved by the Defendant. The Defendant categorically rejected the request for change .of Supplier through its letter LEG 649 Vol. 1 of 24th August, 1989......”
(The underlining mine)
See also paragraph 21 thereof.
I note that the Appellants did not counter this weighty averment either by filing a further Amended Statement of Claim or controvert it in their evidence. See also exhibit NN. - The two page letter dated September 13, 1991. See page 44 of the Records.
I had stated that the reason given by the learned trial Chief Judge is/was, that the Project still stands. For said he:
"It is my view that what has been adversely affected is the transaction between the plaintiffs and their Suppliers. If the Suppliers are rejected as the plaintiffs have done the project still stands. Except the Midland Bank or even NBCI sees something wrong with the project or likely to cripple, the project could the lenders withhold making an investment. Critical factors in the transactions between the plaintiff and the NBCI have been perpetrated by WAF Exports Ltd. If the plaintiffs denounced WAF Export as they have done and seek to substitute him (sic) with another agent I see no reason why such a substitution should be refused. It is in evidence that no payment has been made to WAF Export by Midland Bank or NBCI......”
With the greatest respect, the above reasoning or conclusion is completely misconceived. It was because of this reasoning, that His Lordship, made the orders herein below reproduced. It need be borne in mind that the learned trial Chief Judge, refused the declaration sought by the Appellants. In other words, he refused the claims in the said paragraph 53 (i) and (ii) of the Amended Statement of Claim. His Lordship, as noted by me earlier in this Judgment, granted the Alternative claims (iii) (a) to (d). By implication, the learned trial Chief Judge refused the claim in No. 4 relating to interest.
I have deliberately gone this far because, it is now settled that an appeal, is by way of a re-hearing. See Sabrue Motors Nig.Ltd, v. Rajab Enterprises Nig. Ltd. (2002) 4 SCNJ 270 @ 282: and Attorney-General, Anambra State & 5 ors. v. Okeke & 4 ors. (2002) 5 SCNJ. 318 (5) 333.
For the avoidance of doubt, the orders read as follows:
".......it is my order that a new letter of credit be issued by the defendants with the plaintiffs at the current price of the machinery and equipment to be ordered by the plaintiff (sic).
In the
alternative the plaintiff (sic) should be entitled to a refund by the bank
of the fee of
I had earlier reproduced the concluding paragraph of the trial court's judgment at page 97 of the Records. From the first order, the learned trial Chief Judge, with respect, was re-writing, the contract Agreement of the parties. Surely, and on the decided authorities, he was not entitled to do so. See Fakorede & ors. v. Attorney-General of Western State (1972) 1 All NLR 178 @ 189; (1972) 3 S.C. 79: Oduye (Mrs.) v. Nigeria Airways Ltd. (1987) 2 NWLR (Pt.55) 126; (7987) 4 SCNJ. 40. Mrs.Layade v. Panalpina World Transport Nig. Ltd. (1996) 7 SCNJ. 1 (a) 14 -15 - per Adio, JSC, and many others It is noted by me that in the Appellants' Issue No. 1, the learned counsel for the Appellants forcefully attacked and deprecated the said conclusion of the learned trial Chief Judge that the fraud and distrust of the Suppliers by the plaintiffs frustrated the business deal of the Appellants and that this led to a breach of the Mortgage Agreements. However, what is important in my respectful view in this appeal, is that the said award or order or orders made by the learned trial Chief Judge, is/are at variance with the Alternative claim. Surely, if the learned trial Judge found as a fact and held that the contract had been frustrated for whatever reason, he had no right or business, to make the said order or orders. I so hold. It is now firmly settled in a plethora of decided authorities/cases by this Court, that a court, does not award what is not sought by a party or what is not claimed by a party. See Ekpenyong v. Inyang (1975) 2 S.C. 71 @ 81 - 82; Kalio v. Daniel - Kalio (1975) 2 S.C. 15 @ 17 -19; Makanjuola & anor. V. Chief Balogun (1989) 3 NWLR (Pt. 108) 192 @ 206; (1989) 5 SCNJ. 42; Olorotimi v. Ige (Mrs.) (1993) 8 NWLR (Pt.311) 257 @ 271; (1993) 10 SCNJ. 1 and recently, Adeye & 8 ore, v. Chief Adesanya & 3 ors. (2001) 2 SCNJ 79 and Joe Go/day Co. Ltd. & 5 ore, v. Co-operative Development Bank Plc (2003) 2 SCNJ 1 (5) 20 just to mention but a few.
The court below at page 406 of the Records, stated inter alia as follows:
"I agree with the submission of the learned counsel for the Appellant that looking at the claims of the Respondents contained in the Amended Statement of Claim at pages 12 - 13 of the record and the award granted to the Respondents by the learned trial Chief Judge at pages 96 - 97 of the record they do not appear to correspond hence the said orders are ultra vires and void. It has been decided in a long list of authorities that the Court should never award what was never claimed or pleaded by either party: See Ekwunife v. Wayne (W/A) Ltd. (1989) 4 NWLR (Pt. 122) 454; Ekpenyong v. Inyang (sic) (1975) S.C. 71, 80-89".
The above pronouncement cannot be faulted by me as it is settled law.
In view of the fact and I so hold, that the issue in this appeal, is a simple and straightforward one and which is clearly taken care of by Issues Two (2) and Five (5) of the Appellants in their said Brief, my answers to the said two (2) issues, is rendered in the Affirmative/Positive; while my answer to issue Five (5), is in the Negative. In the circumstances, since I am of the respectful view, that the other Issues one, three, four and six, are non-issues, irrelevant and amount to academic issues or chasing the shadow instead of the substance, and this Court is precluded from going into them, the said issues are hereby and accordingly, struck out by me.
In the end result or final analysis, this appeal is devoid of any substance or merit, it fails and it is accordingly dismissed.
I hereby affirm
the said decision of the court below. I award
The Cross Appeal
The court below, rightly in my view, held that the other issues not considered by it, are academic because,
"if it is resolved in favour of the cross-appellant, it will not have any effect on the judgment for that reason, the said issue is discountenanced it will amount to repetition to reproduce the submissions of both Counsel on the remaining two issues, that is, issues No. 1 and 3 which I have already dealt with in the appeal. I therefore adopt my conclusion in the appeal in respect of the said issues which i hereby resolved (sic) In favour of the cross-respondent against the cross appellant. The cross-appeal therefore fails and is hereby dismissed".
I entirely agree. The cross-appeal fails and it is dismissed with costs as costs follow the events. However, the cross-appellant cannot be punished because of the decision of his learned counsel to file the same. So, no order as to costs.
Judgement delivered by Sylvester Umaru Onu, J.S.C.
The Appellants who were plaintiffs at the Akure Division of the High Court of Ondo State (before Adeloye, C.J) claimed as per paragraph 53 of their Amended Statement of Claim as follows: -
"i) A Declaration that the refusal of the Defendant to open letter of Credit required by the Plaintiffs constitutes a breach of the investment and Mortgage agreement between the Plaintiffs and the Defendant
ii) An Order of Specific performance, that the Defendant should unconditionally open the letter of Credit with the Plaintiffs' new suppliers at the current price in 1994 of the machinery and equipment needed for the project, the subject of contract.
Alternatively:
iii)
An Order directing the defendant to pay the sum of
iv) An Order directing the defendant to pay to the plaintiffs an amount representing 10% of the judgment debt as interest per annum from the date of judgment until the judgment is finally liquidated".
The learned trial Chief Judge at the conclusion of the trial held as follows: -
"In sum I refuse the declaration sought and come to the conclusion that the fraud and distrust of the suppliers by the plaintiffs frustrated the business deal of the plaintiffs and .led to a breach of the mortgage Agreement. I order that the defendant open a letter of credit with the plaintiffs' new suppliers at the current price of the machinery and equipment needed for the project or in the alternative the defendant should refund all the expenses of the plaintiff at the time of application in 1988."
By the above extract, the plaintiffs as appears clear, won only a partial success in their claims against the background of the defendant who was wholly dissatisfied and so filed an appeal before the Court of Appeal, Benin Division challenging the decision of the trial court. The plaintiff’s sequel to their reaction brought a cross - appeal. The Court below in a considered unanimous decision allowed the defendant's appeal and proceeded to dismiss the plaintiffs' suit. Equally, the cross - appeal by the defendant was dismissed. Being dissatisfied with this decision the plaintiffs have finally appealed to this Court.
My learned brother Ogbuagu, JSC has so meticulously articulated the facts culminating in the dispute that I do not consider repeating them all over again except to highlight issues where necessary for the sake of emphasis and clarity. Be that as it may, the learned trial Chief Judge rightly recognised as undisputed the following facts at pages 87 - 88 of the record, viz:
"1.
On 12th February, 1987 the plaintiffs and the defendant executed
an Investment and Mortgage Agreement wherein the defendant agreed to provide
the plaintiff a loan of
2. The part of the loan to be made in foreign exchange £226, 000.00 for the purpose of opening a letter of credit in favour of any company nominated by the plaintiffs to import the machinery required by the plaintiffs.
3. With the consent of the defendant, the plaintiffs nominated WAF Export Company based in London to supply the machinery and Midland Bank of London as the confirming bank that is, the bank through which the foreign currency payment was to be made for machinery purchased.
4. The machinery available was to cost £245, 860.32 or $441, 000 instead of £226, 000 earlier proposed Midland Bank was contacted to amend the letter of credit to accommodate an additional $35, 000.00 to make up for $441, 000.00 or £245, 860.32 required.
5. Both parties further recognised and agreed on the Cotecna International Company being the Nigerian Federal Government Agency in England with office in Lagos and having the duty to inspect and check goods coming to Nigeria. They issue invoices for goods to be supplied and conduct pre - shipment inspection after which a "Clean Report of Finding for Payment" is issued on goods to be shipped.
6. The irrevocable letter of credit for the import of the machinery was opened by the defendants in favour of WAF EXPORT LTD. The request for additional loan to the plaintiff was confirmed to Cotecna International Liaison Officer in Lagos vide letter dated 19' July 1988 admitted as exhibit "F" to which were attached particulars of machinery specified for supply by WAF Export marked exhibit Fl - F10. In view of the amended letter of credit, plaintiff, on arrival from London to Nigeria on 30/11/88 went to the defendants to extend his letter of credit for a further six months to 30/6/89."
Of what led to the ultimate collapse of the project the learned Chief Judge said, inter alia, at page 94 - 95 of the record thus:
"The only issue on which the supplier and the plaintiff agreed was the amendment of the proforma invoice Form M dated 19/7/88, whereby the cost of machinery was increased by $35, 000. Thereafter, it was a catalogue of distrust between the plaintiff and the supplier. By a letter dated 7/3/89 to which was attached a personal letter of one Admiral Sunday Englo the plaintiff accused the suppliers of inflating prices and procuring substandard machines. The accusation was not only communicated to Cotecna International but notified to Midland Bank London. The plaintiff by letter and by cablegram to Midland Bank urged the Bank to withhold payment to the supplier who was alleged to have shipped substandard machinery in May 1989 according to the plaintiffs WAF Export Limited had presented to them a list of substandard equipment and machinery which plaintiffs alleged had been shipped to Nigeria by the supplier. Plaintiffs compared the list with the original order and found that the imported machinery were not according to the specification. This he reported to NBCI. Plaintiff himself advised the bank not to release money to the supplier for the machinery shipped to Nigeria. As the plaintiff manager was rejecting the goods of the suppliers, he was on the other hand entering into an agreement with the suppliers to clear the machinery imported. He again applied for a loan to take delivery of the machinery he had himself originally condemned.
(Underlining is mine for comments later)
In my view, the more serious complaint against the relationship of the supplier and the plaintiff is the total lack of trust between the two. The very basis of any commercial or business relationship is trust. If a customer and its agent who in this case is the supplier have no confidence or trust in each other, no self respecting bank would lend its money in support of their business. The accusations and counter accusation of one by the other rather than booster business relationship harmed and devastated it. I agree with the defendant that the air between the supplier and the plaintiff had been so foul that it would be a risk on the part of the defendant to continue to honour any investment in the business of the plaintiff. I agree with the submission of learned counsel to the defendants that the supplier by his fraudulent and unreliable style of business was responsible for the frustration of the contract agreement between the plaintiffs and the defendants. The plaintiff was no less guilty by his false accusation of the staff of the defendants.
(Underlining above is also by me for emphasis)
I do not believe the plaintiff when he said that he was being forced by the officers of NBCI to sign documents that could be incriminatory or that he was arrested by the staff of the Bank on a chance visit to their premises."
The doctrine of frustration was given prominence of treatment by the two courts below (see paragraph 27 of the Amended Statement of Defence at page 20 of the Record). The case of Mazin |