IN THE SUPREME COURT OF NIGERIA
ON FRIDAY, THE 2ND DAY OF OCTOBER 1992
NATIONAL ELECTRIC POWER AUTHORITY ............................................... APPELLANT
ALLI (TRADING UNDER THE NAME AND STYLE OF IJEREGUNKAJOLA SAWMILL INDUSTRY) AND LAMUREY NIGERIA LIMITED ........................................ RESPONDENTS
BEFORE: Adolphus Godwin Karibi-Whyte; Saidu Kawu; Phillip Patrick Nnaemeka-Agu; Emmanuel Obioma Ogwuegbu; Shehu Usman Mohammed, JJSC
What are the tests to be applied in proving and quantifying special damages as a result of negligence?
Appellant was a generator, distributor and provider of electricity in Nigeria. First respondent was the owner of a sawmill and second respondent the assignor of certain machinery to the first respondent's sawmill. First respondent still owed the second respondent some payments in respect of certain of the machinery on his premises.
A huge fire had spread to the first respondent's sawmill from the appellant's transformer, totally destroying all the respondents' machinery housed in there. The respondents, plaintiffs in the trial court, blamed the outbreak of the destructive fire on the appellant's negligence and claimed damages for, inter alia, replacement of the machinery, payment of the site lease, loss of income and damages for payment of wages. It was common cause that a sudden upsurge of electricity had caused the eruption of the fire. The upsurge, in turn, had been caused by a fault in a transformer, installed by the appellant.
The appellant denied negligence, claiming that it had also not been in breach of any statutory duty, that it had installed a circuit breaker in the factory and that it had been an accident over which it had no control.
The trial court having found negligence on the part of the appellant, allowed special damages for the replacement of the machinery, a portion only of the loss in wages and a small portion of the loss of income claimed; in all, the trial court awarded about one third of the plaintiffs' (respondents') total claim.
All three parties appealed to the Court of Appeal, and that court increased the respondents' award marginally, having upheld the trial court's findings on law.
Appealing once more, the appellant claimed that the Court of Appeal had erred in holding that the respondents had discharged the burden of proof in respect of the value of a claim for special damages and that it had wrongly found that the onus had shifted to the appellant (defendant).
In a cross-appeal, the first respondent claimed that both the trial court and the Court of Appeal had failed to apply the doctrine of restitutio in integrum correctly or at all, when the said doctrine was clearly applicable to the quantification of damages in cases of tort.
HELD (Unanimously dismissing the appeal)
1. On the onus of proof where special damages are claimed
A claim for special damages requires strict proof, but this means no more than that the proof should readily lend itself to quantification. The peculiar circumstances of the available evidence will dictate the nature of the proof required. Ogwuegbu, JSC, at page 438.
2. On the measure of special damages
The measure of damages for the machines, which had been totally destroyed, is the value of the machines at the time of the incident that caused the damage, in addition to such sums as would place the first respondent in the same position if he had not suffered the loss. Thus, the first respondent was entitled to restitutio in integrum. Ogwuegbu, JSC, at page 440.
Mr GN Uwechue for the appellant
Mr Oluwole Aina (with him, (Mr O Akinbi) for the respondent
The following cases were referred to in this judgment:
Adejumo v Ayantegbe (1989) 3 NWLR (Part 110) 417
Adeyemi v A-G Oyo State (1984) 2 SC NLR 525
Akinsanya v UBA Ltd (1986) 4 NWLR (Part 35) 273
Balewa v Doherty (1963) 1 WLR 949
Enang v Adu (1981) 11 - 12 SC 25
Incar Nigeria Ltd v Adegboye (1985) 2 NWLR (Part 8) 453
Nwabuoku v Ottih (1961) 2 SC NLR 232
Nwadike v Ibekwe (1987) 4 NWLR (Part 67) 718
Odulaja v Hadda (1973) 1 All NLR (Part II) 191
Odulaja v Haddard (1975) 11 SC 357
Omoregbe v Lawani (1980) 3-4 SC 108
Shodipo v Daily Times (1972) 11 SC 69
Barkway v South Wales Transport Co (1950) AC 185
Bolton v Stone (1951) AC 850
Clyde, The (1856) Swab 23
Collingwood v Home and Colonial Stores  3 All ER 200
Dunne v North Western Gas Board (1964) 2 QB 806
Eastern and South African Telephone Co v Cape Town Tramways (1902) AC 381
Geddis v Proprietors of Bann Reservoir (1878) 3 AC 430
Harmonides, The (1903) P 1, 5 - 6
Imana v Robinson (1979) 3-4 SC 1
Ironmaster, The (1859) Swab 441
Leisbosch Dredger v SS Edison (1933) AC 449
Livingstone v Rawyards Coal Co (1880) 5 AC 25
Mills v Stanway Coaches Ltd (1940) 2 KB 334
Moffett v Gough 1 LR 371
Moore v Dee-R Ltd (1971) 1 WLR 1476
National Telephone Co v Baker (1893) 2 Ch 186
Northwestern Utilities Ltd v London Guarantee And Accident Co Ltd & others (1936) AC 108
Owen v Sykes (1936) 1 KB 192
Phillips v London & SW Railway (1879) 5 Q & D 78
Radcliffe v Evans (1892) 2 QB 524
Read v Lyons (J) & Co Ltd (1947) AC 156
Rylands v Fletcher (1866) LR 1 Ex 256, (1868) LR 3 HL 330
The following statutes were referred to in this judgment:
Electrical Supply Regulations Cap 37 of 1958: S 7
Evidence Act: Ss 56, 136(1); 136(2)
National Electric Power Authority Act 24 of 1972: Ss 1, 7(a), 7(b)
The following Rules were referred to in this judgment:
Supreme Court Rules, 1985 Order 6 rule 5
Ogwuegbu, JSC (Delivered the Leading Judgment):- The plaintiffs claim against the defendant is as follows:-
"The second plaintiff by an agreement dated 6 September 1977, sold the machines and machineries listed in paragraph 6 above to the first plaintiff upon terms that the first plaintiff having paid
N15,000 to the second plaintiff, the aforesaid machines were assigned and delivered to the first plaintiff subject to the first plaintiff paying to the second plaintiff the balance of N45,000 plus interest thereon at the rate of 12% from 6 September 1977.
The machines supplied and delivered to the first plaintiff by the second plaintiff listed in paragraph 6 of the further amended statement of claim were:-
1. Long Saw Machine, Model ST 110
2. Band Saw Sharpner, Model CITV25,KS
3. Tensioning Machine
4. Extra Blades and Spare Parts.
After the purchase and delivery of the above machines, the first plaintiff established and installed an ultra modern Sawmill Factory at the Industrial Area, Irewon Road, Ijebu-Ode in Ogun State.
The defendant is a statutory authority set up under and by virtue of the National Electricity Act for the following purposes:-
(a) To generate or acquire supply of electricity.
(b) To provide bulk supply of electricity for distribution within and outside Nigeria, and
(c) To provide supply of electricity for consumers in Nigeria. It supplied electricity to the factory of the first plaintiff.
On 12 February 1980, the defendant's transformer at Ijebu-Ode, due to its negligence, went into flames. The fire from the transformer spread to the first plaintiff's factory and destroyed all the machines and machineries.
Wherefore the plaintiffs jointly and severally claim from the defendant as follows:-
"A. Special Damages:
(i) Damages being cost of replacing the machine listed above which were completely destroyed
(ii) Damages for payment of rent on lease of factory site at
N1,600 per annum from 12 February 1980 - 11 February 1983 N4,800
(iii) Damages for payment of wages for skilled staff who could not (sic) laid (sic) at
N9,360 per annum from 12 February 1980 to 11 February 1983 N28,000
(iv) Loss of income from 12 February 1980 up to 11 February 1983
B. From the award of damages that may be adjudged due to the first plaintiff, the second plaintiff claims
N45,000 plus interest at the rate of 12% from February 1980 until payment of it.
C. In the alternative, the first and second plaintiffs claim that the defendant, its agents or servants are liable in the sum of
N314,480 for breach of its statutory duty on 12 February 1980, by not complying with Section 7 of Electrical Supply Regulations Cap 37 of 1958.
D. Interest at the rate of 5% on
N314,480 from 3 August/8/ 1982 till the date of judgment.
E. Interest at the rate of 10% on the judgment debt from the date of judgment until payment of the judgment debt."
Pleadings were filed and exchanged and trial started on the further amended statements of claim and defence. At the conclusion of the hearing and the addresses of both learned Counsel, the learned trial Judge, Delano, J in a reserved judgment found as follows at page 94 lines 1 to 23 of the record:-
"From above, all the items of claim fail except the following:-
(i) Item A(i) where the claims of
N80,000 special damage succeeds.
(ii) Item A(iv) where the first plaintiff is awarded the following general damages:-
N2,400 for salaries paid to his workers;
N12,000 for profit he could have earned.
(iii) Items B, D and E partially succeed.
In respect of item D, interest will be at the rate 5% on
N94,400 from 3 August 1982 to 10 January 1985, which is two years, 5 months and eight days. On calculation, the interest is N11,439.34. The total damage therefore becomes N105,839.34. In respect of item E, it is ordered that interest should be calculated at the rate of 10% on the day of payment of judgment debt.
Finally, judgment is given in favour of the plaintiffs in the sum of one hundred and five thousand, eight hundred and thirty nine Naira, thirty four Kobo (
N105,839.34) as against the defendant. The second plaintiff is entitled to 12% of N45,000 from February 1980 to 10 January 1985 which is about N72,000 out of N105,839.34 the second plaintiff is entitled to N72,000."
Both parties were dissatisfied with the decision and each appealed to the Court of Appeal against parts of the judgment.
The defendant complained about the findings on its liability and damages. The first plaintiff cross-appealed and his complaint was that the learned trial Judge failed to award him the claim for loss of income.
The Court of Appeal, Ibadan Division, in its judgment dated 3 March 1987 dismissed the defendant's appeal and allowed the plaintiff's cross-appeal. That court found as follows at page 174 lines 17 to 29 of the record of appeal:-
"As the learned trial Judge has failed to consider the evidence on loss of income before him and to evaluate it, this court is in as much the same position as the High Court to do so. In so doing, I consider that taking the lowest figure of
N240 a calculation of the figure (on a monthly rate for 30 days (apart from Sundays) to be arrived at will slightly exceed N5,600. An award of the amount of N5,600 would therefore have met the ends of justice. On the item, I award N5,600.
In sum and for the foregoing reasons, the appeal fails in its entirety and is dismissed. The cross-appeal is allowed.
The judgment of the High Court is hereby varied by the addition of
N5,600 for loss of income to the sum of N105,839.34 awarded by the High Court to make a total of N111,439.34k . . ."
Both parties were again not satisfied with the decision of the Court of Appeal. The defendant on 2 June 1987 obtained the leave of the Court of Appeal to appeal on grounds of fact, mixed law and facts.
The grounds of appeal are:-
"1. The learned Justices of the Court of Appeal erred in fact and therefore wrongly dismissed the appeal when, on the record, the learned trial Judge had no credible consistent evidence to base his conclusion as to the market value of the machines and, himself, noted that there were contradictions on this aspect of the matter.
2. The learned Justices of the Court of Appeal erred in fact and misdirected themselves and therefore wrongly dismissed the appeal when they failed to hold that the contradictions in the evidence as to the purchase price of the machines, rendered the evidence unreliable and therefore ought to have been discountenanced by the trial Judge.
Error in Law
3. The learned Justices of the court of Appeal erred in law and therefore wrongly dismissed the appeal when they did not hold that the fact that the defendant/appellant did not offer any alternative market value for the machines did not reduce the burden on the plaintiffs/respondents of strict proof of the market value of the machines, an item of special damages, which burden the plaintiffs did not discharge.
The Court of Appeal in the judgment of Omololu-Thomas JCA in holding that once the burden of proving the worth of the machines is established the onus shifts on the defendants when :-
a. The burden of proof in this case of special damages was that of strict proof.
b. It never shifts to the defendant.
4. The learned Justices of the Court of Appeal erred in fact and therefore wrongly dismissed the appeal when they discountenanced the complaint of defendant/respondent that fourth PW was treated as an expert witness whose evidence was crucial to the trial Judge's finding of fact when on the record there was no justification for according PW4 such a status, thus giving great weight to his evidence.
Error in Law
5. The learned Justices of the Court of Appeal erred in law and in fact and therefore wrongly dismissed the appeal when they failed to hold that when the trial Judge accepted and awarded the figure of
N80,000 he was awarding a figure for the destroyed machines as new, when he should have accounted for depreciation, thus restoring the plaintiff to the position he was before the incident that destroyed the machines.
(a) The Court of Appeal erred in law in holding that it is not in every case that depreciation should be accounted for in quantifying the pre-accident value or the market value of a lost or destroyed item. Their Lordships also erred in fact in holding that when the trial Judge accepted the evidence of PW4 that the machine was worth
N80,000 he was not only returning to its market value, but also the lowest worth of such worth of such value/machine, when PW4 had given no such indication in his evidence so that their lordships' conclusion that the trial Judge did not award the value of the machine as new was wrong."
The first plaintiff cross-appealed against that part of the decision dealing with the assessment of damages for loss of income to the appellant.
The ground of appeal reads:-
"1. The Court of Appeal erred in law by failing to apply either correctly or at all the law of restitutio in integrum to the proved and established facts before it, which failure led to the award of damages which was manifestly too low and thereby occasioned a miscarriage of justice.
1. The principle applicable to the assessment of damages for tort is restitutio in integrum which the Court of Appeal failed to apply to the facts of this case before making its award."
The defendant/appellant identified six issues for determination by this court:-
"1. Whether the principle of res ipsa loquitur was applicable in this case when the cause of the res, a sudden upsurge of electricity, has been identified as due to a fault in the NEPA transformer and the facts are equally consistent with accident as with negligence.
2. Whether the learned trial Judge and the learned Justices of the Court of Appeal were right in failing to hold that the installation of the circuit breaker (which had not been found faulty) by NEPA in the plaintiff/respondent's premises had neutralised the presumption of negligence which the circumstances of the occurrence might have raised against the defendant/appellant.
3. Whether there was consistent and credible evidence as to the market value and purchase price of the machines to justify the findings of the learned trial Judge which the Court of Appeal upheld.
4. Whether the failure of the defendant/appellant to adduce evidence as to an alternative market value of the machines reduced the burden on the plaintiffs/respondents of strict proof of that item of their claim on special damages.
5. Whether the Court of Appeal was right in failing to seriously consider the undue weight placed by the learned trial Judge on the evidence of PW4 who was erroneously regarded as an expert witness.
6. Whether the Court of Appeal was right in failing to set aside the award of
N80,000 special damages as the market value of the goods, as new, without consideration of the machines which had been used for one year."
The only issue submitted by the first plaintiff cross-appellant for determination in the appeal by the defendant is:-"In a case of special damages requiring strict proof, is it the law that the burden of proof never shifts to the defendant?"
In his cross-appeal, the plaintiff identified one issue for determination, namely:-
"Whether having regard to the evidence and upon a proper application of the principle of restitution in integrum,
N5,600 was an adequate compensation in the circumstances for loss of income."
On its part the defendant/respondent in the cross-appeal identified one single issue as arising for determination:-
"Whether the Court of Appeal applied correctly or at all the principle of restitution in integrum in the award of the sum of
N5,600 as special damages for loss of income to the plaintiff having regard to the proved and established facts."
In this judgment, the defendant will be referred to as the appellant while the first plaintiff will be referred to as the cross-appellant.
The appellant filed his brief of argument and the respondent's brief to the cross-appeal on 14 May and 26 October, 1990 respectively. The cross-appellant filed the respondent's brief to the appellant's appeal and the brief to his cross-appeal on 22 February 1991 and 27 February 1990.
The appellant at page 7 of his brief of argument indicated that he would seek leave of this court to raise the issue of the applicability of the principle of res ipsa loquitur as it involved a substantial issue of law and no fresh evidence would be needed to consider it. True enough, the appellant indicated his intention to seek leave to raise the point. He did not ask for the said leave at the hearing of the appeal and none was granted. In the circumstances, all arguments in the brief in respect of the principle of res ipsa loquitur raised in issue (1) go to no issue and will not be considered by me in this judgment.
On issue two, the learned Counsel for the appellant submitted that through the cross-examination of PW2 (Dele Otukoya), the appellant had led sufficient evidence to rebut the presumption of negligence. He referred to the evidence of PW2 at page 58 of the record of appeal (third paragraph) where the witness stated:
"What NEPA requires in any industrial premises, is to install a protective device which in this case is a fuse whose function is (to) disconnect electricity (to) in the installation (text missing) of the customer if there is electrical fault. It is N.E.P.A. which installs the device that disconnect (sic) N.E.P.A. supply from consumer installation when there is an abnormal voltage or current . . . The plaintiff saw-mill has a circuit breaker."
Counsel submitted that on the above evidence taken along with an earlier evidence of the same witness to the effect that the fault must be from the source of electricity, in this case the transformer, the learned trial Judge should have found that the appellant had taken sufficient care to prevent even damage due to the alleged sudden upsurge of electricity by installing a circuit breaker in the factory.
In paragraph 7(a) of the further amended statement of claim, the appellant averred:
"On the said 12 February 1980, Ijebu-Ode township experienced an up-surge of excessive power supply when more than the required amount of voltage for domestic and industrial consumption penetrated into houses and industrial projects in Ijebu-Ode, Ikenne, Iperu, Ijebu-Igbo and caused considerable damage to electrical projects at Ijebu-Ode and the other towns."
The appellant, in paragraph I of its further amended statement of defence, merely denied paragraph 7(a) along with some other paragraphs and put the cross-appellant to the strictest proof. It further denied any negligence, breach of any statutory duty and that it was an accident over which it had no control.
In his evidence, the first plaintiff who testified as PW1 at page 45 lines 17 to 29 stated:-
"I know the defendant. NEPA supplied electricity to the Industry. Before the supply, they tested the electric installation on the site to make sure they are not faulty.
On 12 February 1980, at about 4.30 pm after the close of business for the day, Buari and I were on the site. We were sitting (sic) in the store. As we got down, we saw the fluorescent light in the Sawmill on very bright and they started to explode. There was a sudden upsurge of current in the Sawmill. We ran out to the Street. As I looked back at the Sawmill, I saw that it is on fire. Then I was on the street. I also saw an explosion in the NEPA office. People started to run here and there. The NEPA office with everything inside including the electric wire were burnt . . . After then, I went to the NEPA office. I report the fault of NEPA".
In answer to his cross-examination the witness at page 47 lines 5 - 9 said:-
"NEPA issues a Certificate after inspection of the installation with NEPA before connection of electricity to the house. I have a certificate from NEPA after inspection. I have no automatic switch off equipment attached to my switch."
In answer to cross-examination, PW2 stated at page 56 lines 28 - 29 of the record:-I observed that the Sawmill got burnt as a result of an electrical fault."
At page 57 lines 3 - 9 the witness stated:-
"From what the first plaintiff told me about the issue of the fire and my observation at the scene at (sic) my view, that an electrical fault of such magnitude could not be internal fault but an external fault. Such external fault could only be caused by lack of maintenance of electrical equipment owned by NEPA. The fault must be from the source of electricity, in this case, from the NEPA transformer."
This witness further stated under cross-examination that it is NEPA that installs protective device that disconnect NEPA supply from consumer installation when there is abnormal voltage or current and that the cross-appellant's Sawmill has a circuit breaker.
The trial Judge, among other things, found that the source from which the res emanated was in the management of the defendant, who must provide evidence that the high voltage was not due to want of care on its part. He further stated that the defendants did not lead any evidence to disprove negligence on their part.
The appellant led no evidence at all to show that the upsurge of electricity, which caused the extensive damages to private and industries premises in Ijebu-Ode and environs, was as a result of accident as it claimed in its statement of claim. The cross-examination by the appellant as to the cause of the fire incident was feeble if at all.
The appellant generates electricity, provides bulk supply of same for distribution and provides supply of electricity to consumers in Nigeria. It is my view that electricity is a very dangerous thing, being handled and carried by the appellant. If it should escape, it owed a duty to the consumers to exercise reasonable care and skill, that the consumers should not be damaged. The degree of care which that duty involved must be proportioned to the degree of risk involved. See Northwestern Utilities Ltd v London Guarantee And Accident Co Ltd & others (1936) AC 108, 118 and Collingwood v Home and Colonial Stores  3 All ER 200.
Having considered all the circumstances, I am satisfied that negligence on the part of the appellant was proved and this is a proper case where the rule in Rylands v Fletcher (1868) LR 1 Exch 265 should apply fully.
On the issue of damages, it was the submission of the learned Counsel for the appellant that there was no consistent and credible evidence as to (a) the market value at the relevant point in time (emphasis by Counsel) and (b) The purchase price of the machines to justify the decision of the Court of Appeal that the figure of
N80,000 could be said to be the market price of the machines destroyed.
Counsel referred to the evidence of PW4 (Mr Richard O Odusote) who testified on 1 November 1984 when the incident took place on 12 February 1980. He submitted that the witness was clearly testifying as to the probable cost of the machines as at November, 1984. He further stated that neither this witness nor any other witness gave evidence as to the market value of the machines as at the time of the incident and that the Court of Appeal relied on the case of Shodipo v Daily Times (1972) 11 SC 69, 76 - 77 to uphold the decision of the learned trial Judge in holding that the amount awarded was not shown to be inordinately high or low. He stated that the principle applicable in assessment of damages in the circumstances of this case is founded on the principle of restitutio in integrum.
He said that in cases where chattels were destroyed by wrongful act of a defendant, the measure of damages is the value of the goods at the time of the destruction.
Learned Counsel for the appellant also submitted that there was no evidence at all as to the value of the machines at the time of destruction and that the learned trial Judge applied the wrong principle. He said that the Court of Appeal was in serious error in failing to set aside the Judge's acceptance of irrelevant evidence in determining the market value of the machines. In the circumstance, he argued, the findings of the Court of Appeal are wrong and the authorities relied upon by the court are inapplicable, namely, Imana v Robinson (1979) 3-4 SC 1; Odulaja v Haddard (1975) 11 SC 357 and Omoregbe v Lawani (1980) 3-4 SC 108.
Learned appellant's Counsel also complained about the evidence of PW4 being treated as that of an expert by the trial court and that the witness did not qualify as an expert on the evidence before the court within the meaning of Section 56 of the Evidence Act.
Learned Counsel for the cross-appellant contended that the decision of the Court of Appeal cannot be faulted and that it is supported by authorities. He disagreed with the contention of the learned Counsel for the appellant that in cases involving special damages, the burden never shifts and that this runs counter to the provisions of Section 136(1) and (2) of the Evidence Act.
The claims for the machines destroyed were items of special damage which are required to be proved strictly, but strict proof of special damage means no more than such proof as would readily lend itself to quantification. The nature of proof in a given case must be dictated by the peculiar circumstances of the available evidence. See Odulaja v Hadda (1973) 1 All NLR (Part II) 191, 196 and Incar Nigeria Ltd v Adegboye (1985) 2 NWLR (Part 8) 453.
In addition, the character of the acts themselves which produce the damage and the circumstances under which these acts are done, regulate the degree of certainty and particularity with which the damage ought to be proved. See Radcliffe v Evans (1892) 2 QB 524.
In the appeal before us, the cross-appellant in his further amended statement of claim averred that he paid
N15,000 to the second plaintiff for the machines subject to his paying the balance of N45,000 to the second plaintiff plus interest thereon at 12% per annum with effect from 6 September 1977. In answer to cross-examination, the cross-appellant stated:-
"The cost of replacing the machines now is
PW4 stated in examination-in-chief at page 55 lines 20 - 22 and 30 - 33:-
"We still sell sawmill and services of the machines. The machines sold to the plaintiff will not cost less than
N80,000 (eighty thousand naira) now . . . Even after using the machine for about one year, the price would be worth N80,000 because when we sold it, we sold to advertise but by 1980, the second hand value of the machine was worth N80,000" (My emphasis.)
At pages 73 and 74 of the record of appeal, the purchase price of the machines was given as
N48,077.77 and N58,777.77 in Exhibits 'G' and 'H'.
In the famous case of Liesbosch Dredger v SS Edison (1933) AC 449, the plaintiffs' dredger, which was sunk by the defendant, was employed by the owners in the normal course of their business as civil engineers. While the dredger Liesbosch was lying moored alongside the breakwater at Patras Harbour in the Hellenic Republic, the steamship Eddison fouled the dredger's moorings and carried her out to sea, where she sank and was lost. The owners of the Eddison admitted liability.
In an action brought by the owners of the Liesbosch, the House of Lords held that the measure of damages was the value of the Liesbosch to her owners as a profit-earning dredger at the time and place of her loss, and that it should include:-
"(1) A capital sum made up of (a) the market price on 26 November, 1928, when it was sunk, of a dredger comparable to Liesbosch; (b) the cost of adapting the new dredger and of transporting and insuring her moorings to Patras; and (c) compensation for disturbance and loss suffered by the owners of the Liesbosch in carrying out their contract . . . including in that loss such items as overhead charges and expenses of staff and equipment, and the like, thrown away but neglecting any special loss or extra expense due to the financial position of the parties.
(2) Interest upon the capital sum from 26 November 1928. The above statement of the law should apply here."
The machines of the cross-appellant were totally destroyed. The measure of damage therefore is the value of the machines at the time of the accident plus such further sum as would compensate the cross-appellant for the loss of earnings or income, together with interest upon the capital sum from the date of destruction.
The cross-appellant is entitled to what is called restitutio in integrum, which means that he should recover such sum as will replace him, so far as can be done, by compensation in money, in the same position as if the loss had not been inflicted on him.
Where there is a total destruction of a chattel as in this case, damages to be awarded need not be based on the value of the chattels at the time of destruction. Used equipments could be sold for more than their purchase price. See Moore v Dee-R Ltd (1971) 1 WLR 1476.
However, the courts below, not having based their award on the value of the machines at the time of destruction, the appeal partially succeeds.
It is therefore ordered that the case be remitted to the trial court with a direction to assess the appropriate damages in respect of the machines based on the evidence before it.
As to the cross-appeal, the cross-appellant testified that his daily income is between
N310 and N240 excluding Sundays. Under cross-examination, he said:- "I am not sure of N1,600 monthly. This is so because I am an illiterate."
There is no doubt that the cross-appellant suffered loss of income. The Court of Appeal was clearly in error to have awarded the sum of
N5,600 as damages for one month. The cross-appellant supplied the evidence of his daily income. This evidence was not controverted. One wonders why the trial Judge disallowed this item of special damage and the Court of Appeal awarding damages for one month only. No reasons were given by the Court of Appeal for doing this.
I therefore allow the cross-appeal and also remit the case to the trial court to assess the loss of income at the rate of
N240 per day from 12 February 1980 to 11 February 1983.
I assess the costs of both appeals at
N1,000 in favour of the appellant against the plaintiff/cross-appellant and N1,000 in favour of the cross-appellant and against the defendant/appellant/respondent.
Karibi-Whyte, JSC:- I have read the judgment of my learned brother Ogwuegbu, JSC. I agree with his reasoning and conclusions on both the appeal and cross-appeal. I also agree with the Order remitting the case to the trial Court for the assessment of damages based on the evidence before it in respect of the machines.
I abide by the costs awarded in the leading judgment.
Kawu, JSC:- I have had the advantage of reading, in draft the lead judgment of my learned brother, Ogwuegbu, JSC which has just been delivered. With regard to the main appeal, I agree that the case should be remitted to the trial court to assess, on the evidence before it, the appropriate damages in respect of the damaged machines. For the reasons set out in the lead judgment, I also allow the cross-appeal and direct the trial court to assess the loss of income at the rate of
N240 per annum from 12 February 1980 to 11 February 1983. I abide by the order as to costs made in the lead judgment.
Nnaemeka-Agu, JSC:- I have read in advance the judgment just delivered by my learned brother, Ogwuegbu, JSC. I agree with him that the liability of the appellant was proved. On the issue of damages, I find it difficult to agree that this was a case that ought to be remitted for damages to be assessed for reasons contained in this judgment. He has set out the facts of the case fully, and I do not intend to repeat them, save to mention a few facts sufficient to give necessary foundation to the opinion I wish to express.
The defendant/appellant is a statutory corporation set up under the National Electric Power Authority Act No 24 of 1972. Under Section 1 of the Act, it has the duty to
". . . develop and maintain an efficient, co-ordinated and economical system of electricity supply for all parts of the Federation or as the Authority may direct, and for this purpose:-
(a) To generate or acquire supply of electricity.
(b) To provide bulk supply of electricity for distribution within or outside Nigeria and
(c) To provide supply of electricity for consumers in Nigeria and as may, from time to time, be authorised by the Authority."
It was pursuant to the above statutory duty that the defendant installed the necessary fittings and equipment and supplied electricity, to the first plaintiff's sawmill factory at the Industrial Area Irewon Road, Ijebu-Ode in Ogun State. But on 12 February 1980, the defendant's transformer supplying electricity to the factory went up in flames and the fire spread to and seriously destroyed the first plaintiff's factory, the essential machinery and plant of which had been sold and supplied to him by the second plaintiff. The plaintiffs' case is that the blow-up of the transformer and the consequential fire were as a result of the negligence and/or breach of the statutory duty of the defendant, its servants and/or agents. The particulars of negligence and/or breach of statutory duty were given in paragraph 12(a) of the Further amended statement of claim as follows:-
"Particulars of Negligence
1. Failure to take any or adequate precautions to prevent an excessive power supply to the plaintiff's factory.
2. Failure to take any or adequate steps to prevent the penetration into the plaintiff's factory of more than required amount of voltage for the use of the said factory.
3. Failure to have or to maintain any or adequate and efficient systems of periodic checks on plants, installations and transformers to prevent their sending out excess voltage or catching fire, thereby causing damage to plaintiff's properties.
4. Failure to provide any signalling or other warning system and failing to signal to or in any other way warn the plaintiffs of the approach of excess voltage or electricity current to their factory."
They also pleaded res ipsa loquitur. The plaintiffs also pleaded that the defendant, after investigation of the accident wrote letters admitting liability and promised to pay compensation to the plaintiffs; and that it later referred the issue of adequate compensation to their insurers but later failed/refused to pay.
Consequently the plaintiffs instituted this suit. On the quantum of damages the plaintiffs claimed as follows:-
"A. Special Damages:-
(i) Damages being cost of replacing the machine listed above which were completely destroyed
(ii) Damages for payment of rent on lease of factory site at
N1,600 per annum from 12 February 1980 to N4,800
11 February 1983
(iii) Damages for payment of wages for skilled staff who could not be laid off at
N9,360 per annum from 12 February/2/ 1980 to 11 February/2/ 1983 N28,000
(iv) Loss of income from 12 February/2/ 1980 at the rate of
N5,600 per month up to 11 February/2/ 83 N201,600 N314,480
B. From the award of damages that may be adjudged due to the first plaintiff the second plaintiff claims
N45,000 plus interest thereon at the rate of 12% from February 1980 until payment of it.
C. In the alternative, the first and second plaintiffs claim that the defendant its agents or servants are liable in the sum of
N314,480 for breach of its statutory duty on 12 February 1980, by not complying with Section 7 of Electrical supply Regulations Cap 37 of 1958.
D. Interest at the rate of 5% on
N314,480 from 3 August/8/1982 till date of judgment.
E. Interest at the rate of 10% on the judgment debt from the date of judgment until payment of the judgment debt."
The defendant by its amended statement of defence joined issues with the plaintiffs on most of the issues of fact pleaded in the further amended statement of claim. In particular, it denied negligence, any breach of its statutory duty, and the applicability of res ipsa loquitur. Further, it pleaded accident, act of God (in the alternative) and that the incident was caused by technical fault in the first plaintiff's machine, owing to bad set up and bad management. It also pleaded that it was immune to liability.
At the trial, the plaintiffs gave and called evidence in support of their pleading. The defendant called no evidence. In the circumstances, the Court approached the case from the standpoint that in spite of the traverse or denial on the pleading, the defendant, having failed to put anything on his own side of the imaginary balance, it is deemed to have accepted the facts adduced by and on behalf of the plaintiffs. On that basis, therefore, the court proceeded to consider whether the plaintiffs discharged the legal burden of proof incumbent on them, which, in that case would be discharged on a minimal of proof. See on these: JOO Imana v Robinson (1979) 3 - 4 SC 1, page 8; Nwabuoku v Ottih (1961) 2 SC NLR 232; Adejumo v Ayantegbe (1989) 3 NWLR (Part 110) 417. The learned trial Judge came to the conclusion that the plaintiffs proved their case and, after consideration of the evidence on damages, entered judgment in the sum of
N105,839.34 in favour of the first plaintiff out of which he awarded N72,000 in favour of the second plaintiff. The defendant appealed and the plaintiffs cross-appealed on damages.
On appeal, the Court of Appeal while dismissing the appeal allowed the cross-appeal, and awarded the sum of
N5,600 to the plaintiff as damages for loss of income.
The defendant has appealed further to this Court. Unfortunately, the appellant did not formulate any issues but argued his appeal on the grounds of appeal. As this Court has stated a number of times, an appellant who does not formulate issues for determination in his appeal has not complied with the provisions of Order 6 rule 5 of the Supreme Court Rules, 1985. That rule provides that the brief shall contain, inter alia "the issues arising in the appeal". But as it is a case of non-compliance and the respondents have taken no objection on it but rather have taken other steps pursuant to the appeal, I shall say nothing more about it.
The appellant argued at length the issue of res ipsa loquitur. It was the submission on behalf of the appellant that the learned trial Judge was wrong to have held that res ipsa loquitur applied and that the defendant/appellant failed to call evidence in rebuttal of negligence. It was the further submission of Counsel on appellant's behalf that although the defendant called no evidence, he was still entitled to succeed if he could persuade the Judge that although the facts raise a prima facie case against it, it would not be fair to infer that it was in fact negligent.
In my opinion, the principle of res ipsa loquitur has no application to this case. For the application of the doctrine rests squarely on three conditions, namely: that the thing which caused the damage was under the care and control of the defendant; that the occurrence is such that it could not have happened in the absence of negligence; and that there is no evidence as to why or how the occurrence took place. See on this: Clerk & Lindsell: On Torts (14ed.) paragraph 975 - 980 at pages 596 - 601. As in this case, the plaintiffs relied upon and gave positive evidence of negligence, it follows that res ipsa loquitur did not apply. (See on this: Barkway v South Wales Transport Co (1950) AC 185; also Bolton v Stone (1951) AC 850).
But the fact that this point was successfully urged in favour of the appellant does not necessarily mean that I shall allow the appeal. For, it is not every point successfully taken that will result in an appeal being allowed. The so-called blue pencil rule prescribes that if a point is successfully attacked the court should, as it were, run a blue pencil across it and see whether the other grounds which have not been successfully attacked can sustain the decision appealed from. If they are, the court will still dismiss the appeal. (See on this: Balewa v Doherty (1963) 1 WLR 949, at page 960; Adeyemi v A-G Oyo State (1984) 2 SC NLR 525, page 575). So, the main issue in this case is whether, after disregarding the issue of res ipsa loquitur, negligence or breach of statutory duty was proved.
Among plaintiffs' witnesses was PW2, Dele Otukoya, a qualified engineer who gave evidence as an expert. His accepted evidence shows that an electrical fault of the magnitude that was involved in this case could not have been from internal, but must have been from external fault; and that such a fault could only have been caused by lack of maintenance of the electrical equipment owned by the defendant, which in turn led to the malfunctioning of the protective equipment which would have prevented the explosion and the subsequent fire. Thus he eliminated the possibility of the incident resulting from the first plaintiff's fault and proved negligence or breach of statutory duty on the part of the defendant. By this state of the facts, negligence and/or breach of the statutory duty imposed on the defendant under Section 1 of the Act, set out above, was proved. Similarly, the breach of its general duty as set out in Section 7 of the Act was established. For under Section 7 (a) and (b), it was vested with the duty of managing, maintaining and working the electricity undertaking efficiently. Furthermore by letters, particularly Exhibits 'B' and 'C', the defendant admitted liability but later failed or refused to pay compensation to the first plaintiff. So, on the state of the oral evidence before the court supported by Exhibits 'B' and 'C', negligence, as pleaded in paragraph 12 of the further amended statement of claim, was clearly proved and shown to be the cause of the explosion of the transformer and the consequent fire which destroyed the first plaintiff's sawmill factory.
On my above conclusion on the facts, I find it difficult to agree that the basis of defendant's liability in this case is the rule in Rylands v Fletcher (1866) LR1 Ex. 256, at page 279 which was affirmed in (1868) LR 3 HL 330. This is because that rule is basically the liability of the insurer: it is not dependent upon plaintiff's proof of negligence -Read v Lyons (J) & Co Ltd (1947) AC 156. Nor is it necessary for the defendant to prove that he had taken all necessary steps to prevent the damage which is called in question. As Lord Cairns pointed out in the House of Lords at page 334 of the report in that case, it is applicable to situations in which the defendant has made an unnatural use of his land. Above all, it is the law that when, as in this case, a dangerous thing such as electricity is used under statutory authority, it is necessary to prove negligence in order to establish liability: see Geddis v Proprietors of Bann Reservioir (1878) 3 App Cas 430; Dunne v North Western Gas Board (1964) 2 QB 806. Although the rule in Rylands v Fletcher (supra) applies to electricity (Eastern and South African Telephone Co v Cape Town Tramways (1902) AC 381), where, as in this case, electricity is used or generated under statutory authority, it is necessary to prove negligence on the part of the electricity authority before liability can attach to them, unless the establishing statute expressly preserves their liability see National Telephone Co v Baker (1893) 2 Ch 186. As, on the accepted facts of this case the appellant failed to maintain the transformer and thereby prevent the explosion and the consequential fire, its negligence, and hence liability, was duly proved. I, therefore, agree, though for slightly different reasons, that the liability of the appellant was clearly proved.
It is, however, on the issue of damages that I respectfully disagree with my learned brother. This derives from the fact that, on the only evidence before the court, contrary to the contention on behalf of the appellant, there was uncontradicted evidence of the value of the machine in 1980 when the incident occurred. In this respect, PW4 testified as follows:-
"We still sell sawmill and services of the machines. The machine sold to the plaintiff will not cost less than
N80,000 (eighty thousand Naira) now . . . Even after using the machine for about one year, the price would be worth N80,000 because when we sold it we sold to advertise but by 1980 the second hand value of the machine was worth N80,000." (My emphasis.)
In view of the words underlined, I do not see how it could be argued that the value of the machine at the time of the accident in 1980 was not given. For the words underlined clearly put the value in 1980, at least
N80,000 (eighty thousand Naira). Taken together with the evidence of purchase price which was given differently as N48,077.77 and, N58,777.77 in Exhibit 'G' and 'H', all that one can say is that although it was bought at either N48,077.77 or N58,777.77 in 1977, its second hand value was N80,000 in 1988 as well as 1980. Above all, it is clear from the decision of the learned trial Judge on the issue, which has been confirmed by the Court of Appeal, that he believed this piece of evidence. In considering this state of the facts, I must bear in mind the fact that the power of an appellate court to disturb a finding as to damages is very much limited, particularly in a case like this which turns on credibility of a particular witness. This Court will not interfere merely because it would be inclined to award a different figure, Mills v Stanway Coaches Ltd (1940) 2 KB 334, at page 340. It can only interfere where there is an obvious over-estimate or under-estimate and such is perverse or appears to have been arrived at on wrong principles: See Owen v Sykes (1936) 1 KB 192; Phillips v London & SW Railway (1879) 5 Q&D 78. A finding is said to be perverse when it is not only against the weight of evidence but, is altogether against the evidence: See Moffett v Gough, 1 LR lr 371, per Christian, LJ. As the finding was based on uncontradicted evidence before the court, it cannot be said to be against the weight of evidence nor against the evidence. Above all, it is a concurrent finding by the two lower courts. By a long line of decided cases, this Court has always been reluctant to interfere with them unless special circumstances have been shown: see Enang v Adu (1981) 11 - 12 SC 25, page 42; Akinsanya v UBA Ltd (1986) 4 NWLR (Part 35) 273; Nwadike v Ibekwe (1987) 4 NWLR (Part 67) 718. It is necessary, I believe, to distinguish the instant case, which depends upon an uncontradicted valuation on oath by an expert, from the case of Leisbosch Dredger v S.S. Edison (1933) AC 449 in which there was no such evidence and the court was called upon to arrive at a value based on the initial purchase price. In such cases, it is necessary to take into account and discount the depreciation and then base the value on the depreciated value of the chattel. Such is not the case in this case, which is based on the value of the machine at the time of the damage in an economy which is beset by severe inflationary pressure - a fact of which I feel entitled to take notice.
In order to reach a conclusion on the above state of the facts, I need to consider the law. The basic object of an award of damages is to compensate the plaintiff for the damage, loss, or injury he has suffered. The guiding principle is restitutio in integrum when a court is faced with the problem of assessing compensation for a tort, although it is sometimes applied in contract also. The principle envisages that a party which has been damnified by the act which is called in question, must be put in the position in which he would have been if he had not suffered the wrong for which is now being compensated: Livingstone v Rawyards Coal Co (1880) 5 App Cas 25, page 39. In the instant case that sum is the value of the machine at the time it was burnt in 1980. As the only available evidence of that came from PW4 who put it at
N80,000 and this was neither challenged nor contradicted and agreed with the particulars of special damages set out in paragraph 13 A(i) of the further amended statement of claim and had, in fact, been accepted concurrently by the two lower courts, it ought not be disturbed.
This raises the difficult but important question of what is the best evidence of value in the circumstances of this case? In the case of The Ironmaster (1859) Swab 441 it was held that, in the absence of clear market value, the best evidence of value is the opinion of those who knew the vessel shortly before the incident or damage. The next best evidence is the opinion of those who are well conversant with the type of chattel destroyed generally, while the original cost, the cost of repairs due and the sum at which insurance had been taken out, though sometimes evidence of value, are of inferior weight. These principles were approved in The Harmonides (1903) Page 1, 5 - 6. See also The Clyde (1856) Swab. 23. These cases and others in the class show that the price of the goods less depreciation which was applied in Leisboch case (supra) is not the only method of proving the value of a chattel destroyed. They also show that the opinion of a person, such as PW4 who is well conversant with the chattel involved, is also an acceptable evidence of value. It should have been accepted in this case, more so in this country in which it is a matter of common knowledge that because of the rapid depreciation of the Naira, a chattel could be sold for much higher price than it was bought after it has been used for a number of years. So, the value by PW4 should have been accepted. There is, therefore, nothing to remit to the court below for assessment.
As for the cross - appeal, I agree that there is no justifiable reason why the court below should have limited its award of
N240 per day (exclusive of Sundays) to only one month. As we have come to the conclusion that the award by the court below of N5,600 per month as loss of profit was reasonable, but that there was no justification for limiting it to only one month, we should proceed to multiply it by the number of month, we consider proved, that is sixteen months. It is all a matter of arithmetic. This Court should not remit a matter of mere arithmetical calculation to the High Court. I shall therefore award the sum of N5,600 x 36 months i.e. N201,600 to the plaintiff under this head.
In the result, the appeal fails and is dismissed. The cross-appeal succeeds and is allowed. I award to the plaintiff a further sum of
N201,600 as special damages for loss of profit.
The appellants shall pay the costs of this appeal which I assess at
Mohammed, JSC:- I have had the benefit of reading, in draft, the lead judgment of my learned brother, Ogwuegbu, JSC, just delivered. I agree with the conclusions reached therein and the reasons for them which I adopt as mine. I allow the appeal in part and remit the matter back to the trial court to ascertain the value of the machinery at the time of the damage. I also allow the respondents' cross appeal and remit the matter back to the trial court to assess loss of income at
N240 per day for 36 months less Sundays. I abide by the order of costs.