Bilante International Ltd v. Nigeria Deposit Insurance Corporation
CASE IDENTIFICATION
EDITORIAL SUMMARY
Editorial — not part of the judgment as delivered
Facts of the Case
The appellant, Bilante International Ltd, was the plaintiff in the High Court of Enugu State, where it claimed the sum of N95,684,741.57 as special and general damages for breach of contract to lend money for its road construction project. The respondent, Nigeria Deposit Insurance Corporation (originally Orient Bank of Nigeria Ltd), filed a counter-claim for outstanding and unpaid overdrafts amounting to N13,050,002.79 as at 29th February, 1992. The trial court awarded N75,684,741.57 damages against the defendant and dismissed the counter-claim.
The defendant appealed to the Court of Appeal, Enugu Division. On 13th January, 1997, the court below set aside the trial court’s judgment in respect of the damages awarded but upheld the dismissal of the counter-claim. Both parties appealed to the Supreme Court. On 21st March, 2011, the appellant moved an application to substitute Nigeria Deposit Insurance Corporation for the respondent on record, which was granted without objection.
Issues for Determination
ISSUE 1: Whether the Court of Appeal was competent to exercise jurisdiction in respect of the respondent’s appeal.
ISSUE 2: Whether, having regard to all the documentary evidence, the Court of Appeal was right in holding that there is no contract between the parties by which the respondent was to advance overdraft facilities to the appellant for the execution of the road contracts during the twelve months duration of those contracts.
ISSUE 3: Whether the Court of Appeal was right in setting aside the judgment given in favour of the appellant in respect of the ‘de-fixing’ of its fixed deposit accounts.
ISSUE 4: Whether the Court of Appeal was right in dismissing the entirety of the appellant’s claim and setting aside the sum of N75,684,741.57 awarded in the appellant’s favour by the High Court of Enugu State.
Decision / Holding
The Supreme Court dismissed both the main appeal and the cross-appeal, holding that there was no enforceable contract between the parties because the appellant’s response to the respondent’s offer constituted a counter-offer, not an acceptance. Consequently, no claim for breach of contract could succeed. The cross-appeal was also dismissed for want of proof of the alleged indebtedness. No order was made as to costs.
Ratio Decidendi / Principles
APPELLATE PRACTICE — Notice of Appeal — Competence of Appeal — Regularisation by Leave
“The contention of the appellant is that there was no proper notice of appeal before the court below to activate the hearing of the appeal thereat. Notice of appeal dated 10th October, 1995 was filed to activate the appeal at the court below by the respondent which compiled the Records of Appeal. Leave of the court was sought for departure from the Rules to use same for hearing the appeal. The application was granted on 22nd November, 1995.”
Per Fabiyi, JSC, in Bilante Int’l Ltd v. NDIC (2011) NLC-123-177-1996(SC) at p. 4; Paras B—E.
CIVIL PROCEDURE — Pleadings — Abandonment of Pleaded Facts — Failure to Call Evidence
“The duty is on a plaintiff to establish his claim against a defendant by calling evidence relevant to the facts pleaded. Where no evidence is called the facts pleaded are deemed abandoned and cannot ground any claim in law.”
Per Onnoghen, JSC, in Bilante Int’l Ltd v. NDIC (2011) NLC-123-177-1996(SC) at p. 8; Paras A—B.
CIVIL PROCEDURE — Pleadings — Counter-Claim — Cannot Be Predicated on Non-Existing Contract
“In the cross-appeal, the respondent/cross-appellant cannot predicate a counter claim on a non-existing contract. It is trite law that you cannot build something on nothing.”
Per Adekeye, JSC, in Bilante Int’l Ltd v. NDIC (2011) NLC-123-177-1996(SC) at p. 20; Paras A—B.
CONTRACT LAW — Breach of Contract — Damages — No Damages Without Valid Contract
“Damages follow breach of contract and is payable by the party responsible for the breach. In the absence of a valid contract a claim for damages fades away, as there can be no breach of a contract that does not exist.”
Per Rhodes-Vivour, JSC, in Bilante Int’l Ltd v. NDIC (2011) NLC-123-177-1996(SC) at p. 21; Paras E—A.
CONTRACT LAW — Formation of Contract — Certainty of Terms — Requirement for Enforceability
“In order to create a binding contract, the parties must express their agreement in a form which is sufficiently certain for the courts to enforce. … If the terms and conditions of the agreement are uncertain or vague as to defy ascertainment with reasonable degree of certainty, there can never be a valid agreement known to law which can be said to offer itself for enforceability.”
Per Adekeye, JSC, in Bilante Int’l Ltd v. NDIC (2011) NLC-123-177-1996(SC) at pp. 10—11; Paras E—A.
CONTRACT LAW — Formation of Contract — Conditional Offer — Formation Postponed Until Condition Fulfilled
“Usually, when an offer is subject to a condition, the formation of the contract is postponed until the happening of the event on which the offer is conditioned. If the condition of the offer is that unless something is done within a stipulated time the offer is determined such an offer cannot be accepted after the beginning of the event.”
Per Adekeye, JSC, in Bilante Int’l Ltd v. NDIC (2011) NLC-123-177-1996(SC) at p. 17; Paras B—D.
CONTRACT LAW — Formation of Contract — Consensus Ad Idem — Meeting of the Minds Essential
“The overriding consideration in determining if there is a binding contract between the parties is to see whether there was a meeting of the minds between the parties, i.e. consensus ad idem. In all cases of contracts there must be consensus ad idem.”
Per Rhodes-Vivour, JSC, in Bilante Int’l Ltd v. NDIC (2011) NLC-123-177-1996(SC) at p. 21; Paras A—B.
CONTRACT LAW — Formation of Contract — Counter-Offer — Legal Effect
“A counter offer is a statement by the offeree which has the legal effect of rejecting the offer and of proposing a new offer to the offeror. It puts an end to the previous offer of the initial offeror. The legal effect of a counter-offer is to terminate the original offer so that it cannot subsequently be accepted by the offeree.”
Per Adekeye, JSC, in Bilante Int’l Ltd v. NDIC (2011) NLC-123-177-1996(SC) at p. 19; Paras B—D.
CONTRACT LAW — Formation of Contract — Definition of Offer — Verbal, Written or Implied
“An offer may be defined as a definite indication by one person to another that he is willing to conclude a contract on the terms proposed which when accepted will create a binding legal obligation. Such offer may be verbal, written or even implied from the conduct of the offeror.”
Per Adekeye, JSC, in Bilante Int’l Ltd v. NDIC (2011) NLC-123-177-1996(SC) at p. 11; Paras C—D.
CONTRACT LAW — Formation of Contract — Offer — Prescribed Method of Acceptance
“Where an offer prescribes a method by which acceptance of his offer is to be communicated to him, that method shall be adopted by the offeree, and acceptance which fails to comply with such requirement shall be ineffective.”
Per Fabiyi, JSC, in Bilante Int’l Ltd v. NDIC (2011) NLC-123-177-1996(SC) at p. 8; Paras B—C.
CONTRACT LAW — Formation of Contract — Offer and Acceptance — Counter-Offer
“To constitute a binding contract between parties, there must be a meeting of the mind often referred to as consensus ad idem. The mutual consent relates to offer and acceptance. An offer is the expression by a party of readiness to contract on the terms specified by him which if accepted by the offeree gives rise to a binding contract. The offer matures to a contract where the offeree signifies a clear and unequivocal intention to accept the offer. … The acceptance must correspond with the term of the offer. If it purports to qualify the offer, it may amount to a counter-offer and not an acceptance. It may amount to rejection of the offer. It also destroys that offer so that cannot subsequently be accepted.”
Per Fabiyi, JSC, in Bilante Int’l Ltd v. NDIC (2011) NLC-123-177-1996(SC) at pp. 4—5; Paras B—D.
CONTRACT LAW — Formation of Contract — Written Contract — Court’s Duty to Enforce, Not Rewrite
“Where the terms of a written contract are clear, the court should ensure there is enforcement of the contract and not rewrite the contract for the parties.”
Per Rhodes-Vivour, JSC, in Bilante Int’l Ltd v. NDIC (2011) NLC-123-177-1996(SC) at p. 21; Paras B—C.
Orders of Court
(1) The main appeal is dismissed.
(2) The cross-appeal is dismissed.
(3) No order as to costs.
APPEARANCES
Counsel for the Appellant(s)
Adegbonmire; Joke Aliu (Miss); M. Mohammed
Counsel for the Respondent(s)
Dr. A.J.C. Mogbana; B. E. Nkegbu, Esq.
Amicus Curiae
None
JUDGMENTS / OPINIONS OF THE COURT
Authoritative judicial text as delivered
Lead / Majority Opinion
— (DELIVERED BY JOHN AFOLABI FABIYI, J.S.C. (DELIVERING THE LEAD JUDGMENT): )
The appellant/cross-respondent herein was the plaintiff in the High Court of Enugu State. It claimed the sum of N95,684,741.57 as special and general damages for breach of contract to lend money for its road construction project. The respondent/cross-appellant filed a counter-claim thereat for outstanding and unpaid overdrafts made to the appellant amounting to N13,050,002.79 as at 29th February, 1992. The trial court awarded the sum of N75,684,741.57 damages against the defendant. It also dismissed the defendant’s counter-claim.
The defendant appealed to the court of Appeal, Enugu Division (“the court below” for short) against the whole judgment. The court below set aside the judgment of the trial court on 13th January, 1997 in respect of the stated damages awarded. However, it upheld the dismissal of the counter-claim by the trial court.
Both sides have appealed to this court. The plaintiff filed the main appeal while the defendant cross-appealed.
P.1
On 21st March, 2011 when the appeal was heard, learned counsel for the appellant moved an application filed on 2nd June, 2010 to substitute Nigeria Deposit Insurance Corporation for the respondent on record. There was no objection raised and same was granted. Thereafter, learned counsel on both sides adopted briefs of argument as exchanged and filed on behalf of the parties.
On page 4 of the appellants’ brief four (4) issues were couched for determination of the appeal. They read as follows:-
“(1) Whether the Court of Appeal was competent to exercise jurisdiction in respect of the respondent’s appeal.
(2) Whether, having regard to all the documentary evidence, the Court of Appeal was right in holding that there is no contract between the parties by which the respondent was to advance overdraft facilities to the appellant for the execution of the road contracts during the twelve months duration of those contracts.
(3) Whether the Court of Appeal was right in setting aside the judgment given in favour of the appellant in respect of the ‘de-fixing’ of its fixed deposit accounts.
(4) Whether the Court of Appeal was right in dismissing the entirety of the appellant’s claim and setting aside the sum of N75,684,741.57 awarded in the appellant’s favour by the High Court of Enugu State.”
P.2
On behalf of the respondent/cross-appellant, four (4) issues were decoded in respect of the main appeal and two (2) issues in respect of the cross appeal at pages 2-3 of the brief argument. They read as follows:-
“(1) Was the defendant’s appeal to the court below competent?
(2) Was the court below right in holding that the plaintiff did not prove any enforceable contract with the defendant as alleged in the statement of claim?
(3) What was the nature of the claim made in respect of the de-fixture of the plaintiff’s fixed deposit?
(4) Did the damages claimed by the plaintiff flow naturally from any breach of contract?
P.3
(5) Did the plaintiff in its defence to the counter-claim specifically deny the fact of obtaining loans from the defendant?
(7) (Sic; in reality (6)) Did the production by the plaintiff of the statement of account supplied to it by the defendant which it did not dispute and which showed an indebtedness not prove the debt owed?”
MAIN APPEAL
Issue 1, put succinctly, is whether or not the defendant’s appeal to the court below was competent. The appellant herein as respondent at the court below canvassed this point relating to the competence of the appeal with fervour. Much fuss was generated on same and there is a carry over to this court.
P.4
The contention of the appellant is that there was no proper notice of appeal before the court below to activate the hearing of the appeal thereat. Notice of appeal dated 10th October, 1995 was filed to activate the appeal at the court below by the respondent which compiled the Records of Appeal. Leave of the court was sought for departure from the Rules to use same for hearing the appeal. The application was granted on 22nd November, 1995.
On 8th January, 1996 the respondent herein as appellant at the court below, filed another Notice of Appeal dated 5th January, 1996
P.5
Concurring Opinion(s)
— WALTER SAMUEL NKANU ONNOGHEN, J.S.C.:
I have had the benefit of reading in draft the lead judgment of my learned brother Fabiyi, JSC just delivered.
I agree with his reasoning and conclusion that both appeals lack merit and should be dismissed. The main issue between the parties on which all others depend is whether there was a contract known to law between the parties. Once it has been determined that no enforceable contract exists between the parties or that what took place between the parties does not translate to a contract between them, the foundation of the reliefs claimed collapses with the absence of a cause of action, which in this case is supposed to be breach of contract. In short you cannot talk of the consequences of a breach of contract when no contract exists.
P.6
The foundation blocks on which a contract is built include the principles of offer and acceptance of the offer as made by the offeror. It is the existence of the two that make us to say that the parties have come to an agreement or that they are at idem. Where an offer is made but is not accepted, there can be no agreement/contract arising therefrom.
On the other hand, where an offer is made but not accepted in the form it was made or where fresh proposals demanding to be considered by the offeror before agreeing thereto are made by the offeree, then there is no acceptance of the offer as made because what the offeree has done amounts in law to making a counter offer, which does not translate to an acceptance.
In the instant case, Exhibit 4 contains the offer made by the respondent to the appellant which appellant was called upon to accept by a particular method, as follows:-
“Kindly confirm the above agreement reached at today’s meeting by signing and returning the duplicate copy of this letter”.
The question is whether appellant accepted the offer as made and directed in Exhibit 4?
P.7
The answer is in the negative, Rather than do so appellant wrote Exhibit 5 which is in effect a counter offer. It is settled law that where an offeror has prescribed a method by which an acceptance of the offer is to be communicated, the offeree must adopt only that method as any other method will render the purported acceptance ineffective.
It is for the above reasons and the detailed ones contained in the lead judgment of my learned brother that I too find no merit in the appeal and consequently dismiss same.
The same applies to the cross appeal where no evidence exists on record to establish the counter claim of the respondent/cross appellant. The duty is on a plaintiff to establish his claim against a defendant by calling evidence relevant to the facts pleaded. Where no evidence is called the facts pleaded are deemed abandoned and cannot ground any claim in law.
I abide by the consequential orders made in the said lead judgment including the order as to costs. Appeals dismissed.
P.8
— FRANCIS FEDODE TABAI, J.S.C.:
I read in advance, the lead judgment just delivered by my learned brother Fabiyi, JSC, and I agree with him that the appeal lacks merit and ought to be dismissed.
The basic constituents of any contract are offer and acceptance. And a contract could be oral or written. When a contract is contained in a written agreement, it is that document that determines the intention and terms of the parties to it. It is the terms in that document by which the parties will be bound. And none of the parties to the contract will be allowed to introduce or read into it, a term or terms not contemplated by and agreed to by them.
P.9
In this case, Exhibit “4” represents the offer by the Respondent. But Exhibit “5” by the Appellant contains terms not contained in Exhibit “4” and cannot therefore be an acceptance. Rather, it is a counter offer and in the absence of any agreement thereto by the Respondent, there is no contract. If there is no contract there cannot be a breach to attract damages. I do not see any reason therefore to disturb the decision of the court below.
For the foregoing and the fuller reasons contained in the judgment of my learned brother Fabiyi, JSC, I also dismiss the appeal.
P.10
— OLUFUNLOLA OYELOLA ADEKEYE, J.S.C.:
— BODE RHODES-VIVOUR, J.S.C.:
It is the duty of the trial court to determine whether there is a binding contract between the parties, and this is done by considering the evidence led, documentary evidence tendered and accepted by the court and oral testimony in line with pleaded facts.
The terms of a written contract on the other hand are easily ascertained from the written agreement. The traditional view is to look for offer and acceptance and consideration. In the absence of any of them there is no valid contract. That though is not always the case. Valid contracts exist in the absence of offer, acceptance, and consideration e.g. Settlement contracts. The overriding consideration in determining if there is a binding contract between the parties is to see whether there was a meeting of the minds between the parties. i.e. consensus ad idem. In all cases of contracts there must be consensus ad idem.
P.21
A valid contract entails a definite offer and a clear acceptance. Where the terms of a written contract are clear, the court should ensure there is enforcement of the contract and not rewrite the contract for the parties. See DHL International Ltd v. Chidi (1991) 2 NWLR Pt.329 Pg. 720; Union Bank Nig. Ltd v. Ozigi (1994) 3 NWLR Pt.333 Pg.385; African Reinsurance Corp v. S. Fataye (1986) 1 NWLR Pt.14 Pg. 113. A diligent scrutiny of Exhibits 4 and 5 reveal a definite offer in Exhibit 4 by the respondent, and the introduction of other terms in Exhibit 5 by the appellant amounting to non acceptance, or a counter-offer. The court can only give effect to the intention of the parties. On the state of the exhibits there was no contract between the parties.
Damages follow breach of contract and is payable by the party responsible for the breach. In the absence of a valid contract a claim for damages fades away, as there can be no breach of a contract that does not exist, and that is the situation in this case.
For the above and the much fuller reasoning in the leading judgment which I was privileged to read in draft, I am in complete agreement with Fabiyi, JSC that the appeal should be dismissed.
P.22
Dissenting Opinion(s)
None
REFERENCES
Research enhancement — dynamically linked
Referenced Judgments
1. Afolabi v. Polymera Industries (Nig) Ltd (1967) 1 All NLR 144 — cited at p. 5; p. 8.
2. Afrotec Technical Services (Nig.) Ltd v. MIA & Sons Ltd (2000) 12 SC (Pt.11) 1 — cited at p. 19.
3. African Reinsurance Corp v. S. Fataye (1986) 1 NWLR (Pt.14) 113 — cited at p. 20.
4. Best (Nig.) Ltd v. Blackwood Hodge (Nig.) Ltd & Ors (2011) 1 SCNJ 282 at 299–300 — cited at p. 10.
5. DHL International Ltd v. Chidi (1991) 2 NWLR (Pt.329) 720 — cited at p. 20.
6. Gadzama v. Rims Merchant Bank Ltd (1997) 4 NWLR (Pt.498) 234 — cited at p. 19.
7. Hyde v. Wrench (1840) 3 Beav 334 — cited at p. 19.
8. Iteshi Onwe v. The State (1975) 9–11 SC 41 — cited at p. 4.
9. John Orekie Anyakwo v. African Continental Bank Limited (1976) 2 SC 41 — cited at p. 10.
10. Majekodunmi v. National Bank of Nigeria (1978) 3 SC 119 — cited at p. 15.
11. Nneji v. Zakhem Con. (Nig.) Ltd (2006) 12 NWLR (Pt.994) 297 — cited at p. 15.
12. Odutola v. Papersack (Nig.) Ltd (2006) 18 NWLR (Pt.1012) 470 — cited at p. 15.
13. Ogbonna v. Attorney-General Imo State (1992) 1 NWLR (Pt.220) 647 — cited at p. 11.
14. Okugbule & Anor v. Oyagbola & Ors (1990) 4 NWLR (Pt.147) 723 — cited at p. 5; p. 19.
15. Omega Bank (Nig.) Plc v. O.B.C. Ltd (2005) 8 NWLR (Pt.928) 547 — cited at p. 14; p. 15.
16. Oyegbola v. Esso W.A. (1966) 1 All NLR 170 — cited at p. 11.
17. Tukur v. Government of Gongola State (1988) 1 NWLR (Pt.68) 63 — cited at p. 3.
18. U.A.C. v. Macfoy (1961) WLR 1405 — cited at p. 20.
19. Union Bank Nig. Ltd v. Ozigi (1994) 3 NWLR (Pt.333) 385 — cited at p. 20.
Referenced Statutes
• Contract Law, Cap. 30, Laws of Anambra State 1986, Section 109(1) — cited at p. 8; p. 19.