‘Failure To Complain Timeously Amounts To Waiver Of Delay’

The Appellant engaged the services
of the respondent to reconcile the account position of some
concessions it granted certain companies.

They agreed that the fees for the
services, would be 18% of the amount recoverable. The Respondents
rendered the said service, and submitted their reports to the
Appellant, albeit late, but the Appellant did not complain. The
Respondents considered the high amount of the discoveries and
decided to reduce the payment to be made by the Appellant to 5%,
but the Appellant refused to pay the Respondents.

Further to the Appellant’s failure
to pay for the services rendered, the Respondents filed an action
at the Federal High Court, Lagos under the Undefended List
Procedure claiming the sums of USD9,186,701 and N144,303,981.00, as
the agreed fees for their service. They also claimed interest at
the rate of 10 percent on these sums. The Appellant filed a Notice
of Intention to Defend the suit, which was supported by an
affidavit. The trial court, however, found that the defenses raised
in the Appellant’ s affidavit did not call for the transfer of the
suit to the General Cause List, and delivered judgement in favour
of the Respondents. Dissatisfied, the Appellant appealed to the
Court of Appeal, but the Court also found for the Respondents; this
led to a further appeal to the Supreme Court.

Issues for
Determination

In resolving the appeal, the Supreme
Court considered the following issues 1. Whether the Respondents’
cause of action falls within the jurisdiction of the Federal high
Court.

2 Whether the filing of Exhibits/
documents, is a condition precedent to the transfer of the suit to
the General Cause List

3. Whether the Court of appeal
rightly held that paragraphs 3 to 14 of the appellant’s affidavit
in support of the notice of the Intention to defend the action,
were hearsay evidence and therefore, inadmissible.

4. Whether the Court of Appeal
rightly affirmed the judgement entered in favour of the Respondents
by the trial court, in the sum of USD9, 186, 701 and
N144,303,981.00.

5. Whether the Court of Appeal
rightly confirmed the pre and post judgement interests, awarded
against the Appellant by the trial court.

6. Whether the court of appeal
rightly found that, there was a waiver of the time of completion of
contract by the Appellant.

Arguments

On the first issue, the Appellant
argued that the Respondents cause of action was in respect of a
contract of service, and that same was outside the jurisdiction of
the Federal High Court. He relied on Section 251 of the
Constitution of the Federal Republic Nigeria 1999 (as amended) and
cited the case of ONUORAH V KRPC LTD (2005) 6 NWLR (pt. 921) 393 at
405 Para. A-D amongst other cases.

The Respondents argued that, their
cause of action relates to the administration or management and
control of the Appellant. They referred to Section 251 of the
Constitution and argued that, even if the action was founded on
contract the trial Court still has jurisdiction to entertain same,
as, the court has jurisdiction to entertain all matters involving
the Federal government or any of its agencies.

On the second issue, Counsel for the
appellant argued that, it was unnecessary for the Appellant to have
attached documents to the affidavit in support of its Notice of
Intention to Defend the suit. He submitted that, the Respondents
had confessed their inability to support the judgement of the trial
court; therefore, the Court of Appeal should have set aside the
judgement of the trial court. He relied on the case of I.H.LTD v
SONEB ENT. LTD. (2010) 4 NWLR (Pt. 1185) 561 SC. The Respondents,
on their part, argued that, the reason for the refusal by the trial
court to grant leave to defend the
suit,  was not because there were no
documents attached to the Appellant’s
affidavit,  but because it did not place any
material which disclosed any defence before the Court.

Arguing  the
third issue,  the Appellant posited that,
contrary to the decision of the Court of Appeal, the
inadmissibility of paragraphs 3- 14 of the Appellant’s affidavit
was not the basis of the judgement of the trial Court, and that the
Appellant’s affidavit was unchallenged by the Respondents. The
Respondents argued that, under the Undefended List Procedure, a
Plaintiff is not permitted to file a further affidavit to
controvert the facts contained in the Defendants affidavit. He
argued that, failure to file such further affidavit, is not an
admission of the facts stated in the Appellant’s affidavit. They
relied on the case of S.A.V. v TROPICAL INDUSTRY CO. LTD. (2002)
FWLR (Pt. 121) 1913.

The Appellant submitted on the
fourth issue that, there was no consensus ad idem on the fees
payable by the Appellant to the Respondents. Counsel stated that,
the parties agreed to 18 percent and not 5 percent of the
recoverable. He contended that 5 percent is a unilateral variation
of the contract by the Respondents, and that same was a
counter-offer made by the Respondents, which was incapable of being
enforced as a contract. He cited the case of NNSC V AFRICOR
INCORPORATION (1994) 3 NWLR Page 332. The appellant argued further
that, the trial Court ignored the deposition in its affidavit, that
the contract was not satisfactorily executed. Responding to the
above submission, counsel for the Respondents stated that, since
the Appellant was contending that the reduction was not agreed to
by the parties, recourse should be made to the old and existing
contract. On the issue of non-satisfactory execution of the
contract, the Respondents argued that, the Appellant did not
communicate its dissatisfaction to the Respondents, and that same
was an afterthought.

On the fifth issue, the Appellant
argued that, Respondents did not tender any evidence of agreement,
custom or trade usage in respect of the payment of interest on the
outstanding fee. Further, it posited that, the court is limited to
a liquidated sum in its judgement. The Respondents, on their part,
contended that the trial court has authority to award interest as
contained in Order 42 Rule 7 of the Federal High Court (Civil
Procedure) Rules, 2004.

The position of the Appellant on the
sixth issue, was that the Court of Appeal wrongly applied the
doctrine of waiver; since same was not specifically pleaded by the
Respondents. The Respondents countered this submission, by stating
that parties need not plead waiver in their pleadings in order to
enjoy the defence, and that it was too late to be raising the issue
of late submission of reports. He relied on the case of AUTO IMPORT
EXPORT v ADEBAYO (2005) 19 NWLR (Pt. 959) 44.

Court’s Judgement and Rationale
Deciding the first issue, the Supreme Court held that, the
Respondents’ suit relates to the administration and control of the
Appellant. It stated that the Appellant, an agency of the Federal
Government, had by its administrative powers, instructed the
Respondents to reconcile the concessions it gave to certain
companies. Consequently, by virtue of Section 251(1) of the 1999
Constitution, the Federal High Court had jurisdiction. More so, the
cases referred to by the appellant, related to simple contracts
which are distinguishable from the present case.

On the second issue, the Court
opined that, under the Undefended List Procedure, all that the
Defendant is required to do in his affidavit, is to provide
adequate grounds for asking to be heard in defence. It is not the
law, that a party who filed a Notice of Intention to Defend must,
as a condition precedent, attach a document in proof of the
depositions in the affidavit.

The Supreme Court found that, the
trial courts reason for refusing to grant the Appellant leave to
defend the suit, was not because exhibits were not attached to the
Appellant’s affidavit, but because the Appellant did not place any
material before the Court to show that there was a substantial
matter to be tried.

On the third issue, the Apex Court
held that, the reason for the trial court’s refusal to grant leave
to defendant, was not because of the allegations that some
paragraphs of the Appellant’s affidavit amounted to hearsay. Thus,
the issue of hearsay, was of no moment.

Regarding the fourth issue, their
Lordships found that the parties agreed that the respondents would
be paid 18% of the recoveries, and that the Respondents reduced it
to 5.percent. The Court held that, an agreement to vary an existing
contract, must possess the basic elements of a valid contract.
However, since there was no breach on the part of the Respondents,
their claim for a lesser percentage as their entitlement, did not
vitiate the entire agreement.

On the fifth issue, the Court held
that, before a pre-judgement interest can justifiably be awarded, a
plaintiff often pleads it, and where it is pleaded, he must prove
the basis for his entitlement, by showing that it is supported by
statue, contract or based on mercantile custom or principle of
equity. However, pre-judgment interest on a monetary or liquidated
sum, can be awarded to a successful party, even where such party
did not plead or adduce evidence in proof of such claim. Such
interest, as in the instant case, naturally accrues from the
failure to pay the amount Involved over a long period of time,
thereby depriving a party from the use of the
money.  Further, the Federal High Court,
(Civil Procedure) Rules, empowers the trial court to award
judgement interest.

On the Sixth issue, the Court held
that, although the Respondents submitted their final report to the
Appellant late, the Appellant did not complain. Also, the bill of
charges was sent to the Appellant, and it did not reject it or
raise the issue of late submission of the report, until the suit
was instituted at the trial court. Their lordships concluded that,
failure to complain timeously, amounted to a waiver of the
delay.

Based on the foregoing, the Supreme
Court affirmed judgement of the Court of Appeal.

Appeal Dismissed.

Representation:

Professor Taiwo Osipitan, SAN
with A.M. Kayode, C.I.A. Ofoegbunam and Wole Aroge for the
Appellant

Peter Olomola for the
Respondent

Reported by Optimum Publishers
Limited

(Publishers of Nigerian
Monthly Law Report (NWLR)