In The Supreme Court of Nigeria
On Friday, the 1st day of December 1989
SC 169/1986
Between
Attorney-General of Oyo State ...... Applicants
Commissioner for Trade, Industries &
Co-operatives Oyo State
And
Fairlakes Hotels Limited
The Registrar of Companies ....... Respondents
Judgement of the Court
Delivered by
Abaje, J.S.C.
In the Federal High Court holden at Lagos the plaintiff Company',. claimed against the defendants, The Registrar of Companies. The Attorney-General of Oyo State and The Commissioner for Trade, Industries and Co-operatives. Oyo State jointly and severally or in the alternative as follows:-
The plaintiff claims against the defendants jointly and severally or in the alternative as follows:-
1. Declaration:-
(a) That the Memorandum and Articles of Association of New Oyo Hotels Limited presented to the 1st defendant for registration since April. 1978, and on which a duty of N 18,756.00 was paid is entitled to be registered notwithstanding,' the fact that the subscribing representative of the 2nd and 3rd defendants has not been Able to produce his tax clearance certificate.
(b) That the 2nd and 3rd defendants or either of them is not entitled to obstruct the registration of the said New Oyo Hotels Limited for the objects for which it was intended, or in any way substitute for the plaintiff any other company or person as financial partner In the proposed new Government hotel for Ibadan.
2. Further or alternatively to 1(b) Damages (general and special) in the sum of Five million Naira (N 5,000,000.00) against the 2nd and 3rd defendants jointly and severally for the loss suffered or to be suffered by the plaintiff for breach by the 2nd and 3rd defendants of an agreement entered into between 1977 and 1978, to operate an international hotel in Ibadan in co-operation with the plaintiff on a joint-venture basis.
Pleadings were ordered in the case by MB. Belgore. J., as he was then, on 28th July. 1981. After the plaintiff's statement of claim and a joint statement of defence for the 2nd and 3rd defendants to it had been filed, the plaintiff by motion on notice applied for an order for extension of time within which to file a reply to the defence of the 2nd and 3rd defendants. The application was granted by M.B. Belgore, J. as he then was, on 13th May, 1981.
Pursuant to this order a reply to the defence of the 2nd and 3rd defendants was filed on the same day i.e. 13/5/81. It was in this document, Reply to the defence of the 2nd and 3rd defendants that the particulars of the damages claimed by the plaintiff company against the defendants appeared for the first time as reflected in para. 9 of the Reply which as subsequently amended reads thus:-
Particulars of Damages
as amended on the 28th day of October, 1981
Particulars of Damages:-
(1) a. Fees and expenses
paid to Messrs Pannell Kerr and
Forster for Preparation
of Feasibility Study
for Financial Partners N 10,800.00
b. Fees paid to
Messrs Idem Consultants
for consultancy work on
behalf of Fairlakes
Hotels Ltd. May, 1976
to April, 1978 26,500.00 N37,300.00
2 Travelling
a Two Directors
travelling to Paris 1977
10 man days 1,000.00
Transport and Hotel 2,800.00 3,800.00
b One Director travelling
to Brussels 1978-
4 man days 400.00
Transport and Hotel 1,500.00 1,900.00
c. Directors travels
to Ibadan 15 times:
15 x 3 - 45 man days 4,500.00
Transport and Hotel 1,050.00 5,550.00
(3) Memorandum and
Articles of Association
a. Printing 175.00
b. Stamp Duty 18,750.00
c Registration 216.00
d. Legal Fees 5,250.00 24,391.00
(4) Estimated Loss of Profits
which the plaintiff could have
earned in five years from the
Hotel Project 1,913,800
(5) General Damages 3,013,289.00
5,000,000.00
The 1st defendant, Registrar of Companies. did not file any defence to the plaintiff's statement of claim.
The case proceeded to trial before M.B. Belgore, J. as he then was, on B 28th October, 1981.
After calling three witnesses for the plaintiff. counsel for the plaintiff closed the plaintiff's case on 14th January. 1982. Thereafter, counsel for the 2nd and 3rd defendants opened their case and put one witness in the witness box. In the course of the evidence in chief of the witness the case was adjourned for further hearing till 20/2/82. a Saturday. The witness continued his evidence in chief on the latter date. At the end, apparently. of his evidence in chief, his counsel, Mr. Awosesi, sought for an adjournment to call another witness which application was apparently dropped after Chief Olowofoyeku Counsel for the plaintiff, had opposed it. Thereafter Counsel for the plaintiff cross-examined the witness. And then without any indication in the record of proceedings before us in this appeal that the case for the 2nd and 3rd defendants had been closed, the case was adjourned till 6th May. 1982 for addresses of counsel. Nothing turned on this observation in this appeal so that is the end of that observation.
In his judgment on 11th November l982 after listening to the final addresses in the case on 27th October. 1982. the learned trial Judge found for the plaintiff on the issue of liability and awarded it damages as follows:
ln conclusion, I find the 2nd and 3rd defendant jointly and severally liable to the plaintiff to the extent of the following damages claimed in the Particulars of damages:
1. Item 1(a) N10,800.00
2. Item 2(a) 3 .800.00
3. Item 2(b) 1,900.00
4. Item 2(c) 5 .550.00
5. Item 3 N 24.391 .00
6. General Damages N 65.000.00.
The award of N 65,000.00 for general damages was said by the learned trial Judge to be made up of the sum of
N 50,000.00 awarded as general damages simpliciter and the figure of N15.000.00 (It) representing the interest which the plaintiff would have earned on the total sum of N46.000.00 awarded the plaintiff in respect of heads of claims 1 (a). 2(a). 2(b). 2(c) and 3 above for the period of 5 years during which the money. was tied up in the venture which gave rise to the case in hand. So in fact the award of N15.000,00 has to do with the heads of claims I have just specified and not with the award under the head of general damages with which it is lumped.
The learned trial Judge rejected the head of claim under paragraph 9(4) for estimated loss of profits which the plaintiff said it would have earned in five years from the hotel project giving rise to this action -
N 1,913.800.00 -holding in doing so that there was no basis on the evidence before him upon which such an award could in law be grounded.
The declaratory judgment sought against the 2nd and 3rd defendants in claim 1(b) of the plaintiff's claims against the defendants was also refused. Claim 91(b) - fees paid to consultants was also refused by the learned trial Judge. I cannot find any pronouncement by the learned trial Judge on the declaratory judgment sought in claim 1(a) by the plaintiff against apparently the 1st defendant only. Again nothing turns on this in this appeal. So I say no more about it.
Both the 2nd and 3rd defendants, on the one hand, and the plaintiff, on the other hand were dissatisfied with the decision of the learned trial Judge. For their part the 2nd and 3rd defendants appealed against the whole decision, complaining (1) that the decision was a nullity having been given, according to them, outside the prescribed constitutional period of 3 months after final addresses and (2) that the decision was against the weight of evidence. For his part, the plaintiff, as respondent to the appeal of the two defendants filed under Order 3 Rule 14(1) of the Court of Appeal Rules a Notice of its intention to contend that the decision of the trial court of 11th November, 1982 be varied as follows:
(1) That the damages in paragraph 9(1)(b) of the statement 'of claim in respect of Consultancy work done by Messrs Idem Consultant totalling N26,500.00 be granted.
(2) That Estimated loss of profits which the plaintiff/respondent could have earned in five years be increased to N 1,913,800.00 as general damages.
Total: N 1,940,300.00
AND TAKE NOTICE that the grounds on which the respondent intends to rely are as follows:-
(1) The learned Judge erred in law and on the facts in holding that the plaintiff/respondent did not give evidence to support his claim under Para. (1 )(b) when 1st plaintiff Witness gave evidence of work done by Idem Consultants of which he is also a Director.
(2) The learned Judge erred in law and on the facts in awarding N65,000 under General Damages when the best evidence given by the plaintiff/respondent of the loss it would suffer in five years remain unchallenged
The appeal came on for hearing in the Court of Appeal, Lagos Judicial Division on 15th October, 1984, (Coram Ademola, J.C.A., Nnaemeka Agu, J.C.A. (as he then was) and Kutigi, J.C.A.) on that day Mr. Okesola counsel for the 2nd and 3rd defendants, the appellants, informed the court that he was wholly with drawing the appeal of the appellants. Whereupon the lower court, ruled as follows:-
Appeal of the appellants is struck out and hereby dismissed Notice of intention to vary Judgment is now turned into a cross appeal
It does not appear from this order how it came about that the respondent's notice under Order 3 rule 14(1) of its intention to contend that the judgment of the trial court he varied became transformed into a notice of appeal under Order 3 rule 2. However, nothing turns on this in this appeal. Suffice it to say for the purposes of the present appeal, that the respondent's notice was treated rightly or wrongly in the lower court as a notice of appeal. And the appeal of the 2nd and 3rd defendants having been dismissed on 15/ 10/84, the lower Court proceeded to hear arguments without further ado on the cross-appeal into which it has converted the respondent's notice of his intention to vary the judgment of the trial court. Nothing again turns on the procedure in this appeal. So I leave it at that. So it transpired that arguments were taken in the lower Court only on the complaint of the respondent on the issue of damages. In other words, the question whether the 2nd and 3rd defendants were not in breach of the agreement upon which the plaintiff sued was not a live issue in the lower court.
In the lead judgment of the lower court, per Nnaemeka-Agu, J.C.A. ~ (as he then was) given on 11th December, 1984, it was held as follows:-
In the case of consultancy fees I must point out that all I can see on record is its being claimed under paragraph 9(1)(b) of the claim and a statement by 1 P.W. that if the project would not go on, they claim damages as therein itemized So I must hold that the learned Judge was right to have dismissed that item of the claim.
The appeal as it relates to expected profit is, in my opinion different. The appellants were categoric in the evidence of P.W. 1 that they were basing their claim on this item on the feasibility report of consultants who had been commissioned by both sides, whose report, Exh. b, was tendered without objection and P.W. 1 was not cross-examined on it nor was the projected profit by the experts impugned or contradicted in any way. In my view, the item should have been accepted as proved
......................................................................................................................................................................................................................................
Indeed when 1 P.W. testified that item 4 of the claim was based on the feasibility report, one would have expected that appellants, if they did not agree that the report was correct. to have produced some evidence to show it or at least challenge it under cross-examination but they did not. The learned Judge should have regarded the item as duly proved. See Obi Obembe v. Wemabod Estates Limited (1977) 5 S.C. 115, p.139-140. It appears to me that although the learned Judge was right in holding that the experts' estimate of profit was subject to some probabilities, it was for the appellants, in the above circumstances, to bring those improbabilities, if any, which could impugn an award based on that report, if they could. Having failed to do so, there is clearly a case made out for an award based on it.
Before I conclude, I shall refer to a matter which was not originally an issue in this appeal, but which was raised by the court. That issue is as to whether, if we agree that the respondents - cross-appellants - are entitled to an award for expected profit, that can stand with the award of general damages. Alhaji Rasaq conceded it that both of them could not stand. I entirely agree with him as it would amount to double counting to award general damages as well as expected profit. I should therefore disallow the sum of N50,000.00 with interest, awarded as general damages.
In the result I dismiss the appeal by the appellants (2nd and 3rd defendants in the court below) against the judgment of Belgore, J., in Suit No.FRC/19/79. I hereby vary the award of damages by disallowing the award of
N50,000.00 (with interest) as general damages but substituting an award of N 1,913,800.00 as loss of profit. The appeal against the rejection of claim for consultancy fees is rejected.
Both Ademola and Kutigi, JJ.C.A. concurred in the judgment.
The 2nd and 3rd defendants are dissatisfied with the judgment of the court below. This time the plaintiff is satisfied with that judgment including the order of that court over-turning the award of the trial court of
N 50,000.00, with interest awarded as general damages in favour of the plaintiff even when no challenge was made to that award by the 2nd and 3rd defendants in the Court of Appeal. So that order must inevitably remain undisturbed in this court.
By the ruling of this court given on 27th October, 1986 this court per the lead ruling of Bello, J.S.C. (as he then was), pursuant to an application by the 2nd and 3rd defendants as appellants ordered as follows:-
(1) Time within which the appellants may seek leave of this Court to appeal is hereby extended to today.
(2) leave is hereby granted to the appellants to appeal on ground 5 only within 2 weeks from today,
(3) N25 costs to the respondents.
It appears crystal clear from this order that the 2nd and 3rd defendants were granted leave to appeal on ground 5 only which reads thus:-
The Court of Appeal erred in law by shifting the onus proof of loss of profit on the defendants.
In short, the appeal of the 2nd and 3rd defendants was by the order of 27th October, 1986 limited to the points raised in ground 5 only which can, compendiously, be referred to as issue of damages only. So it was no small surprise to me when counsel for the 2nd and 3rd defendants, Mrs. Adebayo in the brief of arguments filed on behalf of the 2nd and 3rd defendants gave notice under Order 6 rule 5(1) of the Rules of this court of the appellants' intention in the course of the hearing of this appeal to apply for leave to introduce new points not taken in the court below, to wit, points touching the 6 issue of liability of the 2nd and 3rd defendants on the contract sued upon by the plaintiff as opposed to the issue of damages flowing from the breach of the agreement. The application of the 2nd and 3rd defendants in this regard was summarily refused on 1&9/89 when this appeal came on for hearing. The appeal was then heard as it had to be on the issue of damages only.
Briefs of arguments were filed on both sides. And as I have just said, oral arguments were necessarily restricted to the arguments in the brief of arguments of the 2nd and 3rd defendants on the issue of damages arising from their only ground of appeal before us i.e. ground 5 which I have copied above.
Before setting down the issues arising for determination in this appeal, I must refer to the submission to us in the respondent's brief of arguments that there is no jurisdiction in this court to entertain any appeal from the Federal High Court. I am satisfied that the submission is well founded. Section 213 of the Constitution of the Federal Republic of Nigeria 1979 gives this court the jurisdiction to the exclusion of any other court of law in Nigeria to hear and determine appeals from the Court of Appeal. So it is an appeal from the decisions of the Court of Appeal, albeit on appeal from the decisions of a state High Court or a Federal High Court to it, that will lie to this court. So in the instant case, we are dealing with the decisions of the Court of Appeal. I have earlier on in this judgment stated those decisions which for ease of reference I repeat here, as per the lead judgment of Nnaemeka-Agn, J C. A. as he then was:-
I hereby vary the award of damages by disallowing the award of N 50,000.00(with interest) as general damages but substituting an award of N1,913,800.00 as loss of profit. The appeal against the rejection of claim for consultancy fees is rejected.
The appeal of the 2nd and 3rd defendants to the Court of Appeal having been withdrawn it was dismissed in that court. I have also shown above that the present appeal of the 2nd and 3rd defendants is limited to the issue of damages. The latter must because of what I have said above about the jurisdiction of this court to take appeals only from the decisions of the Court of Appeal be qualified in one important respect namely the issue is limited to the variation by the Court of Appeal of the quantum of damages awarded the plaintiff Company against the 2nd and 3rd defendants consequent upon the appeal of the plaintiff company in that court. In effect the appeal of the 2nd and 3rd defendants must be limited to the figure of N 1,913,800 which the Court of Appeal awarded the plaintiff company as loss of profit contrary to the rejection of that head of claim by the trial court.
Counsel for the 2nd and 3rd defendants has identified in all 16 issues as arising for determination in this appeal. It will be a waste of paper and effort to set down all the issues in this judgment. In the light of what I have hitherto said in this appeal the only issue arising for determination in this appeal is that part of issue I in the brief of arguments of the 2nd and 3rd defendants which says:-
Whether there was any or sufficient proof of
(i) ..........................................................................................................................................................................................................................
(ii) loss of expected profits entitling the plaintiff respondent to the claim of N 1,913,800.00 as claimed either as general or special damages.
This head of claim is contained in para. 9(4) of the Reply of the plaintiff winch the learned trial Judge considered and rejected for the following reasons: -
The damages under Clause 9(4) is a special one while that under 9(5) is a general one
Special damages have to be specifically or strictly proved though it need not be proved in any particular way, but a Judge must not base it on his own estimate when evidence is provided. Messrs Dumez (Nig.) Ltd. v. Patrick Nwaka Ogboli (1972) 1 All N.L.R. (part 1) 241. I will consider both items of damages.
Clause 9(4) of the particulars of Claims asked for
N1,913,800.00 as
estimated loss of profits which the plaintiff could have earned in five years from the Hotel Project. ------------------------------------------------------------------------------------------------------------------------------------------------------------------
the claim as to anticipated profit is a special one which must be established by evidence. Chief J. K. Odumosu v. African Continental Bank Ltd. (1976)11 S.C. 55. There was no oral evidence as to how this sum was arrived at. Mr. Apara in his evidence only stated:-
If the project will not proceed, I claim damages itemised in my paragraph 9 of my Reply. Item 4 on paragraph 9 was based on feasibility study.
This, to my mind by itself, is no proof of any special damage as Coker, J.S.C. in Oshinjinrin & Ors. v. Aihaji Elias & Ors. (1970)1. All N.L.R. 153 stated what is required of a person claiming special damages is that he
should establish his entitlement to that type of damages by credible evidence of such a character as would suggest that he indeed is entitled to an award under that head, otherwise the general law of evidence as to proof by preponderance or weight usual in Civil cases operates.
Mr. Apara stated that his estimated profit was based on feasibility survey which was Exhibit 'B'. I am of the view that estimate of profit in Exhibit B cannot come under the principle laid down by the Privy Council in
Abel Boshali v. Allied Commercial Exporters Limited (1961) All N.L.R. (Part 4) 917. Abel Boshali's case envisaged that a witness testified and was liable to cross-examination to test his veracity and the basis of his calculation. Exhibit 'B' is a mere projection subject to various probabilities.
...........................................................................................................................................................................................................................................
The Gross operating profit relates to profit before property and Corporation taxes, insurance, interest and amortisation of the loan but allows for the deduction of a management fee of four per cent of total revenue and 12 per cent of gross operating profit.-
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------------------------------ Why was 5 years taken as the period for claiming profits?----------------------------------------------------------------------
------------------The second question is, how was the figure
N 1,913,800.00 arrived at?. The estimated profit given in Exhibit 'B' was for the whole hotel and the plaintiff was only 35% Shareholder of the whole project. Where is the evidence of the total profit of which 35% of it for 5 years would come?
Taking into account, the lack of any oral evidence of anticipated profit and considering all the probabilities upon which Exhibit "B' was compiled, I do not find established, any degree H of evidence of the special damages under item 9(4).
The 1st P.W. Mr. Olakunle Apara, did not mince words when he said in his evidence at the trial of this case that the head of claim for estimated loss of profits the plaintiff could have earned in 5 years from the hotel profit i.e. N1,913,800.00 in paragraph 9(4) of the plaintiff's reply was based on the feasibility study admitted in evidence without any objection to it as Exh. B. And Indeed no other evidence was led by the plaintiff in this regard. Mr. Apara who put the document in evidence was not its maker. In the final analysis the consideration of the propriety or otherwise of the award of the sum of N1 ,913,800.00 made by the Court of Appeal in favour of the plaintiff as loss of anticipated profits boils down to the examination of the evidential or probative value of Exh. B in this regard.
Before I consider the probative or evidential value of Exh. B as regards proof of estimated loss of profits, I must say that Mr. Molajo, S.A.N. is right in his submission to us that since the exhibit is not inadmissible per Se and at the worst is only admissible subject to conditions its having been admitted in evidence without objection constitutes a waiver of the conditions to which its admissibility is subject. (See Okeke v. Obidife (1965)1 All N.L.R. So and Igbodim v. Obianke (1976) 9-10 S.C. 179).
So, Exhibit B is legal evidence in this case. But as this court has pointed out in Sodimu v. N. P.A. (1975) 4 S.C. 15 it is only admissible for all legitimate purposes.
Because of the submissions of Counsel on Exh. B. outside of the general principles governing proof of damages, which I am now about to consider, it is necessary I state before I do so how Exh. B came into being. By para. 5 of the plaintiffs statement of claim which was admitted by para. of the defence, it was pleaded as follows:
It was agreed by the parties that the plaintiff should commission a feasibility report the cost of which was to be defrayed by the plaintiff and subsequently passed to the project if the studies proved positive.
The plaintiff also pleaded in para. 9 of the statement of claim and this again was admitted in para. 7 of the defence as follows:-
9. An agreement defining the obligations of the parties was signed on 9th December, 1977.
The said agreement entered into on 29/12/77, is Exh. A in these proceedings.
It was no doubt pursuant to the agreement pleaded in para. 5 of the Statement that the plaintiff got Exh. B, the feasibility study prepared in February, 1977 at a cost of N10,000.00to him about 11, months before the parties signed the agreement defining their interests and commitments in the project - an International Hotel in Ibadan - the subject-matter of the agreement Exhibit A.
Exh. A is not silent as to the rights and obligations that could flow from the feasibility study - Exh. B - prepared by the plaintiff. In this regard the following paragraphs of Exh. A are relevant,.
7. Feasibility Study:
To determine the cost and profitability of the project Fairlakes has commissioned a feasibility study hereof, which was carried out by Messrs. Pannel Kerr Foster and Company as Consultants, at a total cost of
N l0,800.00 (Ten Thousand Eight Hundred Naira). The feasibility study has been taken by Novotel as reference for the preparation of both the economic brochure and the technical date of this project.
9. Preliminary Expenses:
Preliminary expenses including the cost of the Feasibility Studies incurred by any of the partners prior to the incorporation of the Company shall be capitalised, provided they are supported by appropriate evidence and are necessarily incurred on account of the project.
17. Agreement Subject to Review:
If in the opinion of any party to this agreement, satisfactory progress in the execution of the provisions of this Agreement has not been made at the end of the period of one year from the signing thereof, this Agreement shall thereafter be liable to be reviewed at the request of such party; the review may involve the modification of any part of the Agreement. In the event of cancellation the expenses already incurred shall be reimbursed in proportion to the shareholding of the parties provided that the party in default shall not be entitled to any reimbursement.
It is against this back ground of Exh. B that Counsel for the 2nd and 3rd defendants Mrs. Adebanjo submitted in their brief of arguments as follows:-
The makers were not called. The document (exhibit "B") was made by experts in their professional capacity. No foundation was laid regarding the failure to call them. Nobody else could have cross examined on the contents thereof. Exhibit "B" admitted and tendered, not to establish any liability or claim but merely as evidence that, in accordance with exhibit "A" the' document came into existence as stipulated - Please see pages 47 lines 5 - 11 on the record of proceedings. Admissibility in the circumstances could not confer on it any probative value. The accuracy of it was not thereby established. Its contents were not prepared with the material issues in this suit in the contemplation of its makers.
On the other hand Mr: Molajo, S. A. N. counsel for the plaintiff has submitted in the brief of arguments of the plaintiff as follows:-
16. When therefore there was no litigation in view, the parties have recognised the Feasibility Report as an authentic reference for (1) the cost, and (2) the PROFITABILITY of the project.
19. It is submitted further that both parties have accepted the opinion of the experts who prepared the Feasibility Report as an authentic estimate of the profits and expenses of the project. The appellants cannot therefore be heard to say that the feasibility report is NOT a report belonging to and accepted by the appellants and the respondent.
On the admitted facts in this case, it must be taken that Exh. B. as submitted by Mr. Molajo, S.A.N. and in fact this was not seriously contested by Mrs. Adebayo, was the product of a joint commission by the parties in the case before us.
The feasibility report Exh. B contains no doubt a statement of estimated operating costs which include estimated gross operating profit. Against this statement of estimated operating Results the firm of chartered accountants Messrs Pannell Fatzpatrick & Co. who prepared it, entered the following caveat at page 1 of Exh. B namelv "We do not warrant that the estimates will be attained." And as to the purpose for which the feasibility study has been prepared the same firm of accountants said at page 2 of Exh. B:-
This report and the related Statement of Estimated Income and Expenses have been prepared for your use and guidance in determining the feasibility of the project in relation to its cost and for possible use in securing primary mortgage financing or negotiation of a lease, management or franchise agreement. As is customary in assignments of this nature, neither our name nor the material submitted may be included in any prospectus, newspaper publicity or as part of any printed material, or used in offerings or representations in connection with the sale of securities of participation interest to the public.
Having regard to the caveat entered against the estimated operating results in Exh. B by the firm of accountants who made it and more importantly, to the use and limits, again, according to the same accountants, to which Exh. B could and should be put, I have no doubt that the figures relating to estimated gross profit in it cannot be regarded as a pre-estimate by the parties in this case of the damage, in terms of loss of profit which any party to the contract for the construction of the hotel project would suffer in the event of breach of the contract by the other party or parties. Exh. B. is designed, as it says, to guide the parties involved in the hotel project in determining the feasibility of the venture in relation to its cost.
If I had had any doubt as to what I have just held, which I don't, the doubt could have been dispelled by the provisions of paragraphs 9 and 11 and 17 of Exh. A which I have copied above. The combined effects of paragraphs9, 11 and 17 of Exh. A are:
1. The parties have accepted Exh. B and what it says as to the use it should be put namely reference paper i.e. something consulted for information; and
2. Cost of the preparation of the feasibility study is an item of preliminary expense properly incurred by the party concerned prior to incorporation of the company which shall be capitalised; and
3. In the event of cancellation or breach of the agreement, Exh. A the cost of preparation of Exh. B is an expense which the party who had incurred it is entitled to recover.
With what I have said above I have disposed of the special submission made by counsel for the respondent, Mr. Molajo, S.A.N. on Exh. B, as proof of the loss of profit claimed by the plaintiff.
I can now consider the submissions of counsel on me probative or evidential value of Exh. B based as they were on general principles as distilled from decided cases.
The pith of the submissions of counsel for the 2nd and 3rd defendants, the appellants is that even if Exh. B constitutes legal evidence in this case in the sense that it can form the basis of a judgment in th~ case, it carries little or no weight, since its makers none of them were called to give evidence and no reason was given by the plaintiff for the failure to call its makers. Relying on the case of Odumosu v. African Continental Bank Ltd. (1976) 11 S.C. 55 counsel submitted that anticipated profit like the one claimed in paragraph 9(4) of the reply of the plaintiff is an item of special damage which must be supported by evidence.
As to the views of the court below in its lead judgment by NnaemekaAgu, J.C.A., as he then was, namely::-
Indeed when 1 P.W. testified that item 4 of the claim was based on the feasibility report, one would have expected the appellants, if they did not agree that the report was correct, to have produced some evidence to show it or at least challenged it under cross-examination; but they did not.
Counsel for the appellant both in brief of argument for the appellants and in open court submitted:-
(1) that the onus was on the plaintiff to prove its entitlement to the damages it was claiming and that the Court of Appeal by its statement in question was thereby shifting that onus from the plaintiff to the defendants; and
(2) since the makers of Exh. B were not called as witnesses in this case nobody else including P.W. 1 could have been effectively cross-examined on its contents.
As regards the cases upon which the court below relied for its finding that the trial court should have regarded Exh. B as proof of item 9(4) of the plaintiff's claim counsel submitted in the brief of arguments for the 2nd and 3rd defendants as follows:
Three cases were cited by the Court of Appeal in support of the decision of that Court. The cases are:
(i) Obi Obembe V. Wemabod Estates Ltd. (1977) 5 SC.l~5; The Boshali case (1961) All N .L. R. 912 (Privy Council) was cited at pages 139 - 140 therein.
(ii) J.A. Obanor v. Ehigie Obanor (1976) 2 S.C. 1;
(iii) Seismograph Services Ltd. v. B. F. Onokpasa (1972) 1 All N.L.R. 343.
With the greatest respect my Lords these cases are not on all fours with the case on hand. They are distinguishable in that the experts or material witnesses in those cases testified before the trial courts. The extracts quoted from the said judgments contain the distinguishing factors. We humbly urge this Honourable court to hold that the said cases do not apply.
The submissions of counsel for the plaintiff Mr. Molajo, S.A.N. in the plaintiff's brief and in open court were along the following lines:-
What the plaintiff was claiming under paragraph 9(4) of the reply was loss of profits as a head of general damages; assessment can be based not only on the uncontradicted ipse-dixit of an expert witness but also on the ipse dixit of any other witness whose evidence is equally uncontradicted or challenged in cross examination. With particular reference to the case in hand, he submitted in the brief of arguments for the plaintiff, the respondent, as follows:
In the instant appeal, Olakunle Apara the 1st P.W. was quoting from the statement of the experts who carried out the feasibility study accepted by both parties and as analysed on page 62 of the feasibility report which is exhibit B. It is submitted however, that where the ipse dixit is not of a fact requiring expert knowledge it will be evidence upon which a court is entitled to act. An example is found in the recent decision of the Supreme Court in Ahmed Debs & 2 Ors. v. Cenico Nigeria Limited
(1986) 3 N.W.L.R. (Pt.32) 846 at 853 per Oputa, J.S.C. and at 854 per Kayode Eso at 854 - 855.
Before leaving these cases of Obi Obembe and Ahmed Debs, it is interesting to observe that the Supreme Court in both cases said that if a party is not cross-examined on a particular point the evidence on that point ought to be accepted by the trial Judge. Likewise in this case
Olakunle Apara was not cross-examined about the figure of loss of profit which he testified to was based on an expert opinion, the feasibility report. The learned trial Judge had no ground for refusing to accept it. As we had submitted earlier before he could base his decision against the acceptance of such unchallenged evidence, he must call on counsel for both parties to address him on it. This he failed to do. In the line of the Supreme Court decisions that such unchallenged evidence should be accepted is the case of Alhaji A. W. Akibu v. Joseph Opaleye & Another (1974) 11 S.C. 189 at 196 and 197.
Mr. Molajo, S.A.N., also submitted in the plaintiff's brief of arguments that the decision of this court in
Odarnosu v. African Continental Bank Ltd (1976)11 S.C. 55 upon which counsel for the 2nd and 3rd defendants relied F on heavily in this appeal is not apposite here because that case was concerned with an action in tort, detinue, and not with one in contract as it is here. I do not think the latter submission is correct.
Idigbe, J.S.C., delivering the reasons for judgment of this Court in the case stated the general principles applicable in any case, be it in tort or in contract, before applying those principles to the specific case before this court then which as Mr. Molajo, S.A.N., pointed out was an action in detinue, a tort.
First on the issue of proof of special damages, Idigbe, J.S.C., said:-
The learned trial Judge then referred to a passage in the judgment of Coker, J.S.C., delivering the judgment of this Court in Oshinjinrin & Ors. v. AihajiElias & Ors. (1970)1 All N.L.R. 153 dealing with the issue of proof of special damages, which reads:-
..what is required is that the person claiming should establish his entitlement to that type of damages by credible evidence of such a character as would suggest that he indeed is entitled to an award under that head, otherwise the general law of evidence as to proof by preponderance or weight usual in civil cases operates.
Idigbe, J S. C., then proceeded to discuss the measure of damages in the case before him, detinue, and then said:-
Where however, the plaintiff particularises items of special damage, then he must establish the same by evidence.
The learned Justice of the Supreme Court then proceeded to discuss generally the expression '~General and Special damage" by reference to:-
(1) the observations of the learned authors of the Mayne and McGregor 12th Edition on Damages on the expression;
(2) to decided cases as to what the expression signifies; and
(3) to the rules as to proof of special and general damages.
Then he said:-
General damages are such as the jury may give when the Judge cannot point out any measure by which they are to be assessed, except that opinion and judgment of reasonable men
(Prehn V. They Royal Bank of Liverpool (l870) L.R. 5 Exch. 92 per Martin, B.). From the point of view of proof (evidence), general damages are classified into two categories:-
(1) that in which they (damages) may either be inferred (e.g. in cases of defamation or of personal injury to plaintiff when pain and suffering may be presumed): and
(2) that in which they will not be inferred but must be proved (for instance damages arising by way of general loss of business following an injury).
Even in regard to this latter category evidence will not be allowed to be given by a plaintiff of loss of a particular transaction or customer (following the injury) with a view to showing specific loss for that is a matter which falls in the realm of special damage; and -
"if there be any special damage which is attributable to wrongful act that special damage must be averred and proved, and if proved will be awarded
"
(See The Susequethanna (1925) A.C. 655 at 661 per Lord Bunedin). Special damages, therefore, consist of items of loss which have to be particularised or specified in the plaintiff's pleadings (as the appellant has done in the instant case) in order that he may be permitted to give evidence thereof and recover thereon.
The passages I have copied above from the judgment of the learned Justice of the Supreme Court relate to matters of general principles which will certainly help in deciding the case in hand.
The contract between the plaintiff and the 2nd and 3rd defendants to establish an International Hotel at Ibadan was never executed. It was still executory at the time the plaintiff brought the present action against the 2nd and 3rd defendants for its breach.
So, it will be difficult to conceive how the plaintiff could have suffered loss of a particular transaction or customer giving rise to loss of profit.
In the context of an action in contract, it is wise to remind ourselves of what Lord Macnaghten said in Stroms Bruks Aktie Bolag v. Hutchison (1905) A.C. 515 that he thought the division into general and special damages was more appropriate to tort than contract. The following passage from McGregor on Damages 14th Edition ~ge 16 article 19 throws more light on the observation of Lord Macnaghten:-
the only issue was as to the particularity of the special dam-age, but in Hayward v. Pullinger Devlin, J . thought that the earlier Court of Appeal case decided the matter. He held accordingly that where the plaintiff claimed in his statement of claim "damages for wrongful dismissal" without more, and the damage for which he wished to recover was the loss of salary and commission he would have earned during the period of notice to which he was contractually entitled, this was special damage, and as it had not been specifically pleaded, the statement of claim was defective. The reason why these various items of damages have been held to he special for the purpose of pleading although general for the purpose of liability would seem to he that where damage has become crystallised and concrete since the wrong the defendant could be surprised at the trial by the detail of its amount, although it is of a type which he could expect as a consequence of the wrong. As Lord Donovan said in Perestrello V. United Paint Co., the obligation to particularise arises "not because the nature of the loss is necessarily unusual, hut because a plaintiff who has the advantage of being able to base his claim upon a precise calculation must give the defendant access to the facts which make such calculation possible (Italics mine).
So, in the instant case, I will be content to say that once the plaintiff has specifically pleaded this head of claim, as it is undoubtedly the case, even without saying that the head of claim for anticipated profits was an item of special damage or general damage, it was entitled to prove it by evidence and recover the amount if the evidence in respect thereof was sufficient having regard to the authorities. In other words, I am satisfied that the plaintiff was in order by specifically pleading its estimated loss of profits for a period of 5 years from the hotel profit an item of damage and at the same time claiming the said amount as part of the general damages claimed by it.
Having disposed of the procedural point as to what the item of loss we are concerned with should be called, and the pleading in this regard, I can now consider the all important question as to whether, on the evidence adduced by the plaintiff in this case, the trial court, contrary to its finding, ought to have been satisfied, as held by the Court of Appeal, that the plaintiff has established the head of claim relating to estimated loss of profits.
I need only remind myself that proof of the head of claim was based on documentary evidence only, to wit feasibility study, Exh.B put in evidence not by its makers who were none of them called as witnesses in this case but byP.W.1, Mr. Olakunle Apara, who was not cross-examined on the estimated profits from the hotel project stated in Exh. B. The 2nd and 3rd defendants led no evidence on the estimated profits stated in Exh. B or for that matter on the profitability of the hotel project at all. It is in these circumstances that the Court of Appeal held that the plaintiff's evidence relating to loss of anticipated profits was unchallenged and uncontradicted. This being so, the Court of Appeal, relying on Obi Obembe v. Wemabod Estates A Limited (1977) 5 S.C. 115 at pp.139-148, further held that the trial Court should have regarded the item of damage in question as duly proved. Counsel for the plaintiff, Mr. Molajo, S.A.N., in support of the view expressed by the Court of Appeal, referred us to the following cases - Okechukwu v. Okafor (1961) All N.L.R. 685 at p.692; Okulaja v. Haddad (1973) 11 S.C. 357 at p.362 and Boshali v. Allied Commercial Exporters Ltd. (1961) All B N.,L.R. 9l7atp.921.
Mrs. Adebayo, counsel for the 2nd and 3rd defendants, the appellants, for her part, has submitted to us that the authorities relied upon by the plain-tiff and the Court of Appeal would only apply in a situation where an expert testified as a witness in the witness-box and not in the situation facing us in this case, where a document prepared by experts and nothing more was relied upon in proof of damages. She submitted that in the latter circumstance, the trial court was right in attaching little or no weight of the documentary evidence in question.
All the authorities cited in the judgment of the Court and by counsel for the plaintiffs, Mr. Molajo, S.A.N., to us show that unchallenged evidence must be accepted by the Court as establishing the facts stated therein. With D reference to proof of damages, it may even be said that it is now too late in the day to say that a trial Judge cannot rely on the mere ipse dixit of a plain-tiff who is not an expert to assess damages when that evidence is uncontradicted. See Agbaje v. National Motors (1971) 1 U.I.L.R. 219 and Dorbay v. Mohaber (1967)2 A.E.R. 760. However, the following passages from the decision of this Court in Nwabuoku v. Ottih (I96l) All N.L.R. 487 at 490 bring clearly out the class of evidence to which this proposition can properly be applied.
At this stage, I will set out in full the document Exhibit 1:-
Exhibit I
SC/3/1961. S.O. Nwabuoku vs. P.N. Ottih
An agreement between Mr. P.N. Ottih Victoria and Mrs. S.O. Nwabuoku Tiko:
I, Stephen Nwabuoku of Ibo, resident at Tiko hereby today mortgage to Mr. P.N. Ottih of Victoria, my house on Botanical Road, Half Mile, New Town Road, Victoria on the land of Mr. Roohm for the sum of £120.ls.Od. (One hundred and twenty pounds, one shilling) which I received from him since 24th June, 1955.
Mr. P.N. Ottih is hereby today authorised to collect rents from the house and have full control of the said house
until the amount which I, Mr. Nwabuoku is owing him is fully refunded.
On no account will this said house be sold or mortgaged to another person without first settling fully with Mr. P.N. Ottih.
(Sgd). S.O. Nwabuoku
Witness (Sgd.) Okoro
Date: 15/2/57
Victoria
It is to be noted that this document is dated 15th February, 1957. In his particulars of Claim the appellant claimed on an oral transaction between the parties in 1955 and gave evidence of this; he gave evidence of the transaction in 1955 and nothing more.
It is clear from his judgment that the learned trial Judge gave no consideration whatever to the appellant's evidence before him; his evidence was not at anytime rebutted by the defendant who did not go in the witness-box to give evidence. The evidence of the appellant therefore stands uncontradicted. His evidence giving the terms of the transaction between him and the respondent was in terms of his writ. In the absence of any evidence of rebuttal, the appellant was entitled to judgment, and I am of the view that the learned Judge's duty was to have entered judgment in his favour at the close of the respondent's case (Italics mine).
The headnote to Nwabuoku v. Ottih in the report properly, in my view, states what the case decides as follows:
Where a plaintiff adduces oral evidence which establishes his claim against the defendant in the terms of the Writ, and that evidence is not rebutted by the defence, the plaintiff is entitled to judgment.
In effect, the proposition was made in respect of oral evidence. Even in the case of Dorbay v. Mohaber
(supra), Lord Wilbedorce, giving the opinion of the Privy Council, applied the proposition to oral evidence as it is apparent from the following passage from the opinion:-
With regard to the cost of installing the mill, the appellants are, in principle, entitled to damages, since such expenditure has been thrown away. The trial Judge seems to have accepted this, but held that the figure claimed $1,500 - had not been properly established. The appellant, however, gave evidence about this expenditure; as recorded in the Judge's note he said "the cost of the installation was $1,500 including workmanship", and no challenge to this by cross-examination seems to have been made, for did the Judge give any reasons for holding the sum excessive. in these circumstances, the right course, in their Lordships' view, is to award to the appellants the sum claimed (Italics mine).
In each of the following cases I have referred to above, namely Obanor v. Obanor, Boshali v. Allied Commercial Exporters Ltd. and Obembe v. Wemabod Estate Ltd., the Court was concerned with oral evidence which was unchallenged and uncontradicted. So having regard to the proposition just stated, such evidence was accepted as proof of what it stated, and rightly too.
Here we are not concerned with the oral evidence of an expert witness, or for that matter the oral evidence of any witness. Our pre-occupation is to A find out the evidential value of Exh.B, a feasibility study, in the absence of any evidence from its makers about it. Let us remind ourselves that Exh.B is admissible in evidence because of the provisions of S.90(1) of the Evidence Act to the effect that in any court proceedings where direct oral evidence of a fact would be admissible, any statement made by a person in a document and tending to establish that fact, shall, on production of the original document, be admissible as evidence of that fact, subject to certain conditions being fulfilled which I need not go into here. I will only add to what I have earlier on said about documents admissible in evidence subject to conditions that the decision of this Court in Ighodim v. Obianke (1976) 9-10 S.C. 179 has settled it that such a document can even be admitted in evidence by the trial Court by virtue of Section 90(2) of the Evidence Act, notwithstanding C the fact that its maker was available and was not called as a witness.
In Ayeni v. Dada (1978) S.C. 35 at 61,this Court has held that, although a document may be admissible in evidence under the provisions of the Evidence Act, the weight to be attached to its contents is another matter.
With particular reference to documents admissible in evidence under Section 90 of the Evidence Act, like the one I am now considering, this court, in the case of
Ogunsanya v. Taiwo (1970)1 All N.L.R. 147 at p.152, focussed attention on the provisions of Section 91(1) of the Evidence Act relating to the evaluation of such evidence by the Court. The passage, in the case, is as follows:-
Section 90 of the Evidence Act does not create a new type of category of evidence and for the avoidance of doubt, Section 91(1) prescribes as follows:-
S.91(1) - In estimating the weight, if any, to be attached to a statement rendered admissible as evidence by this Ordinance, regard shall be had to all the circumstances from which any inference can reasonably be drawn as to the accuracy or otherwise of the statement, and in particular to the question whether or not the statement was made contemporaneously with the occurrence or existence of the facts stated, and to the question whether or not the maker of the statement had any incentive to conceal or misrepresent facts.
The question therefore is - if the learned trial Judge had realised that there was some direct evidence in exhibit IA that Raji Akintola was head of the family, what probative value would he have given that piece of evidence, not only intrinsically by itself but also in the context of the entire case including the contents of the several documents produced in evidence in this case?
We are clearly not in a position to know to what conclusion the learned trial Judge would have come on a consideration of such evidence H vis-a-vis the other circumstances of this case and we are of the view therefore that this case must go back to the High court for re-hearing with the necessary directions. (Italics mine).
The position, as I see it, is as follows. Oral evidence and a document put in evidence under Section 90 of the Evidence Act cannot, on the authorities, receive the same treatment when it comes to the matter of evaluating such evidence. The former, if unchallenged, must, on the authorities, be accepted as establishing the facts therein stated. As regards the latter, documents admitted by the consent or by the Court in the absence of their maker under Section 90 of the Evidence Act, the Court still has, on the authorities, a duty to consider the weight to be attached to such documentary evidence before coming to the conclusion as to whether or not it establishes the facts stated therein, in any case short of that in which there is an admission by the opposing side that it does.
I have, no doubt, therefore, in holding that the lower Court, the Court of appeal, was in error in equating Exh.B, the feasibility report, admissible in evidence under Section 90 of the Evidence Act, with oral evidence given in the witness-box by a witness for the purposes of the evaluation of that evidence. Because of this error, the Court of appeal with respect, again, in my view, fell into the error of holding that since there was no challenge to Exh.B, it must be accepted as establishing the facts stated therein, regardless of any circumstances from which any inference can reasonably be drawn D as to the weight, if any, to be attached to the document.
I am equally satisfied that the learned trial Judge, M. B. Belgore, J., as he then was, was right, on the authorities, to have considered the weight to be attached to Exh.B., the feasibility report, after it had been admitted in evidence by consent and without its contents having been directly contradicted by the other side in evidence. The circumstances which the learned trial Judge took into consideration in his evaluation of Exh. B are as follows:-
(1) Lack of any oral evidence of anticipated profits in the case in hand; and
(2) the probabilities upon which the figure of the anticipated gross-profits from the hotel project in Exh. B was based.
The learned trial Judge, in my view, although he did not expressly say so, acted within the provisions of Section 91(1) of the Evidence Act when he considered the weight to be attached to Exh. B by him.
The weight to be attached to Exh. B is a matter of inference to be drawn from established facts and has nothing to do with the credibility of witnesses. So both the trial court and the appellate courts are in the same position when the question involved is the proper weight to be attached to that document. See Akintola v. Oluwo (1962) 1 All N.L.R. 224.
The probabilities upon which the anticipated gross-operating profits over the first 10 years from the hotel project were based in Exh. B are evident from the following passage in Exh B: -
Estimated Gross Operating Profit
In projecting the Gross Operating Profit over the first 10 years of operation, we have assumed room occupancy to be 60 per cent in the first year of operation, 70 per cent and 80 percent in the second and third years respectively and 80 per cent in the subsequent years. (Italics mine).
As I said earlier on in this judgment, the makers of Exh. B said, inter alia, in the document:-
We do not warrant the estimates will be attained.
In Exh. B, it was assumed that the proposed hotel venture would be operational as from January, 1981 and that in that year, its first year of operation, room occupancy in the hotel would be 60% of the total capacity. Trial of this case began in October of the assumed first year of operation, i.e. 1981. So, oral evidence as to the profitability of hotel business in Ibadan in 1981, at least, will evidently be a sine qua non for the assessment of the accuracy of the projected gross profits in Exh.B. This is the type of oral evidence which the learned trial Judge remarked was absent in the case before him. In short, in the absence of oral evidence in support of the projected gross profits in Exh. B, based on assumptions, it is nigh impossible to come to any conclusion as to the accuracy of the projected profits.
This court recently in Uwa Printers Ltd. v. In vestment Trust Ltd. (1988) 5 N.W.L.R. (Pt.92) 110, and earlier on in J.K. Odumosu v. A.C.B. (1976) 11 S.C. 55, has held that anticipated profits must be established by evidence, The onus is evidently on the plaintiff to prove its anticipated profits. A priori, the onus is on the plaintiff to establish the accuracy of the projected gross profits in Exh. B tendered by it in proof of its claim. So, if for any reason, evidence which would help the trial court to assess the accuracy of the projected profits is inadequate, lacking or not convincing, it is the plaintiff who will fail in its claim for anticipated profits.
I am satisfied that the trial Judge was right in coming to the conclusion that he could attach little or no weight to Exhibit B because the evidence from which he could have inferred the weight to be attached to the document was just not before him. In the circumstances, I am equally satisfied that the learned trial Judge was right in his decision that the plaintiff, by merely putting Exh. B in evidence and nothing more, has not proved its entitlement to the anticipated profits claimed by it. In effect, the Court of Appeal, the lower Court, was, in my judgment, in error to have held that Exh. B, the feasibility study, in the circumstances I have narrated above, would suffice to establish the plaintiff's claim to the anticipated profits. Incidentally, the lower Court itself as per the lead judgment of Nnaemeka-Agu, J C. A. (as he then was), recognised it that the anticipated profits in Exh. B were calculated on the basis of the probabilities of the occurrence of events subsequent to the production of the document. The lower court then went on to say that it was for the defendants to give evidence as to the improbability or improbabilities of the projected profits in Exh. B if they, the defendants ,wanted to impugn the latter. From what I have said earlier on in this judgment, the onus was on the plaintiff, in my judgment, to lead evidence in this case showing that the probabilities upon which Exh. B was based are valid, before there will be any onus on the defendants to show that the projected profits ere improbable if they intended to challenge the evidence on the head of claim in question. See section 136(1) and (2) of the Evidence Act.
The plaintiff has not, by evidence, as I have shown above, established prima facie the accuracy of the projected profits in Exh. B. In the circumstances, it cannot be said that there is any onus on the defendants to show that the projected profits were improbable, if they intended to challenge the evidence in that regard.
In the result, the appeal of the 2nd and 3rd defendants is allowed by me. The decision of the Lower Court, the Court of Appeal, awarding the plaintiff the sum of N1, 913, 800.OO as loss of profit is hereby set aside by me. I restore the order of the trial court disallowing that head of claim.
I have noticed that there is no appeal by the plaintiff against the order of the lower court, the Court of Appeal, setting aside the award of N 50,000.00 with interest as general damages by the trial court in favour of the plaintiff. In the circumstances, that order of the Court of Appeal must stand even when it appears clear that it was made in the belief that the award of N 50,000.00 with interest as general damages could not rightly co-exist with the award of N1, 913,800.00 as loss of profit which. as it now happens, I have just set aside.
The order as to costs made in the lower Court is hereby set aside by me. In its place, I order that both sides shall bear their costs in that court. I award the 2nd and 3rd defendants, the appellants, the costs of this appeal against the plaintiff, the respondent, which I assess at N 500.00.
Judgment delivered by
Obaseki, J.S.C.
I have had the advantage of reading in draft, the judgment just delivered by my learned brother, Aghaje. J.S.C. I agree with and adopt his opinions on the issues raised in the appeal on the onus of proof of loss of profit and allow the appeal against the award made by the Court of Appeal.
Not having appealed to the Court of Appeal on the question of liability to pay damages, the appellant is estopped from raisin~ the issue of liability iii this appeal as he has tried to do by the copious arguments in his brief. The appeal is in essence only a challenge to the correctness and competence of the Court of Appeal to vary the general damages awarded by the Federal High Court (Belgore. J. (as he then was) by allowing the claim of Nl,9l3,800.00 loss of profit as general damages having regard to the fact that the claim for loss of profit claimed for 5 years was disallowed by the learned trial Judge for want of proof.
The issue therefore is whether the respondent is entitled to that item of damages in the light of the evidence on record. It is a short issue as it is settled and trite law that he who asserts or claims a relief must prove it by credible admissible evidence and judgment and grant for such claims must be based on legal evidence of the highest probative value and weight. The plaintiff not having appealed against the disallowance of N50,000.00 dam-ages part of the N65,000.00 general damages awarded by Belgore, J. (as he then was) no issue can be raised about that aspect of the decision in this appeal.
This appeal from the order of the Court of Appeal made on the 27th day of October, 1986, is founded on one ground and one ground only and that
Reads:-
The Court of Appeal erred in law by shifting the onus of proof of loss of profit on the defendants.
The kennel of the decision of the Court of Appeal is found in the lead judgment delivered by Nnaemeka-Agu, J.C.A. (as he then was) in the following terms:-
1 hereby vary the award of damages by disallowing the award of N50,000.00 (with interest) as general damages but substituting an award of N1,913,800.00 as loss of profit. The appeal against the rejection of claim for consultancy fees is rejected.
The appeal must be limited to this award of N1, 913,800 loss of profit. The proper issue formulated amongst others by learned counsel for the appellants is:
Whether there was any or sufficient proof of loss of expected profit entitling the plaintiff/respondent to the claim of N1 ,913,800. 00 as claimed either as general or special damages.
Estimates loss of profit has always been treated as special damages.
Chief J. K. Odumosu v. African Continental Bank Ltd. (1976)11 S.C. 55.
To entitle a claimant to judgment of the court for loss of profit, the special damage must be strictly proved.
Dumez (Nigeria) Ltd. v. Patrick Nwaka Ogboh (1972)1 All N.L.R. (Part 1) 24.
The only evidence given in support of this item of claim caine from Mr. Apara. In his testimony, he said:
If the project will not proceed, I claim damages itemised in my paragraph 9 of my reply. Item 4 on paragraph 9 was based on feasibility study.
Coker, J.S.C. in Oshinjinrin & Ors. v. Alhaji Elias & Ors.
(1970)1 All N.L.R. 153 and the Privy Council in Abel Boshalli v. Allied Commercial Exporters Limited (1961) All NLR. (Part 4) 917 have set out the standard and quality of proof required to establish such item of claim. Hearsay evidence to which class feasibility study Exhibit B falls do not qualify for acceptance as legal evidence that can sustain such an award.
There was no oral evidence of this loss of profit and the lack of this piece of evidence is fatal to the award made by the Court of Appeal.
Mr. Apara who put the document - report of feasibility study Exhibit B was not the maker of the document. Exhibit B on the face of it, does not claim the probative value ascribed to it by the Court of Appeal. This is evident from the caveat inserted by the authors of the report which reads:
We do not warrant that the estimates will be attained.
This lack of warranty together with the declared purpose for which the feasibility study was prepared (which appears on page 2 of Exhibit B) cannot but have a fatal disabling effect on the whole case of the respondent in this a~ peal. The declared purpose reads:
This report and the related statement of estimated income and expenses have been prepared for your use and guidance in determining the feasibility of the project in relation to its costs and for possible use in securing primary mortgage financing or negotiation of a lease management or franchise agreement. As is customary in assignments of this nature, neither our name nor the material submitted may be included in any prospectus, newspaper publicity or as part of any printed material or used in offerings or representations in connection with the sale of securities of participation interest to the public.
Exhibit B cannot therefore be the foundation of a genuine pre-estimate of loss of profit in a claim for loss of profit in an action before a court of law.
The appeal succeeds and is hereby allowed. The decision of the Court of Appeal awarding the respondent N1,913,800.00 loss of profit is hereby set aside and that item of claim stands disallowed as decided by the Federal High Court. Subject to this, the decision of the Court of Appeal is affirmed. The appellants are entitled to costs in this appeal fixed at N500.00 to be paid by the respondent.
Judgment delivered by
Nnamani, J.S.C.
I had before now the privilege of reading in draft the judgment just delivered by my learned brother, AGBAJE, J.S.C., and I entirely agree with his reasoning and conclusions. My learned brother has fully dealt with all the issues agitated before us and my comments are merely for purposes of emphasis. The only ground of appeal which the appellants were given leave to argue was ground 5 which attacked the damages awarded the respondents by the Court of Appeal. In paragraph 9(4) of their reply to the statement of defence which was amended on 28/10/81, the plaintiffs gave their particulars of damages to include 'estimated loss of profits which the plaintiffs could have earned in five years from the Hotel project -N1,913,000." It was this that the Court of Appeal awarded.
This claim of N1,9l3,000 was based on Exhibit B, a feasibility Report on the project, unarguably prepared on the agreement of both parties. I do not think that it is open to argument that the document was admissible. The issue to be examined is what weight ought to have been attached to it. Was it sufficient to justify the huge amount awarded the respondents by the Court of Appeal?
In the trial Court, Belgore, J. (as he then was) was not impressed by it F and gave I' a low evidential value. Of it he commented and concluded:
Mr. Apara stated that his estimated profit was based on feasibility survey which was Exhibit B. I am of the view that estimate of profit in Exhibit 'B' cannot come under the principle laid down by the Privy Council in Abel Boshalli v. Allied Commercial's Exporters Limited (1961) All N.L.R. (Part 4) 917. Abel Boshalli's case envisaged that a witness testified and was liable to be cross examined to test his veracity and the basis of his calculation. Exhibit B is a mere projection subject to various possibilities. Those who compiled the study were fully aware of this and at paragraph 3 of page 2 of the study it is stated:-
During the initial periods, the net operating results may not necessarily reach those of the estimated representative year. In these periods, operations are generally required to absorb pre-opening advertising and promotional activities, employee training and other expenses of a non-recurring nature.
This is beside the fact that projected profit given are gross and as it is stated on p.58 L.1 of the study:
The Gross operating profit relates to profit before property and A Corporation taxes. insurance interest and amortisation of the loan but allows for the deduction of a management fee of four per cent of total revenue and 12 per cent of gross operating profit.
Apart from the fluid nature of the projection in Exhibit B, there are a few unanswered questions on item 9(4). Why was 5 years taken as the period for claiming profits? on page 57 the projection for gross operating profit was for the first 10 years. The second question is, how was the figure N1,913,000 arrived at? The estimated profit given in Exhibit B was for the whole hotel and the plaintiff was only 35% shareholder of the whole project. Where is the evidence of the total profit from which 35% of it for 5 years would come? Taking into account, the lack of oral evidence of anticipated profits and considering all the probabilities upon which Exhibit B was compiled I do not find established, any degree of evidence of special damages under item 9(4)."
I would have said that this clearly and correctly put Exhibit B in its proper place. The Court of Appeal did not think so. In the view of that Court, as the evidence given by the respondents on the estimated profits was not controverted by the appellants, the learned trial Judge ought to have awarded the full amount claimed in paragraph 9(4). The Court thought that if there were any improbabilities it was for the appellants to provide them as they were party to the commissioning of Exhibit B. Nnaerneka-Agu, J.C.A. (as he then was) writing the lead judgment put it thus:-
The appeal as it relates to expected profit is, in my opinion different. The appellants were categoric in the evidence of P.W. I that they were basing their claim on this item on the feasibility report of consultants who had been commissioned by both sides, whose report. Exhibit B, was tendered without objection and P.W.l was not cross-examined on it nor was the projected profit by the experts impugned or contradicted in any wav. In my view, the item should have been accepted as proved.
The Court of Appeal relied on three cases: S.A. Obanoh v. Ehigie Ohanor (1976) 2 S.C.1.: Seismograph Services Ltd. v. B.F.Onakpasa (l972) 1 All N.L.R. 343. and Obi Obembe v. Wemahod Estate Ltd. (1977) 5 S.C. 115, 139-148 all in which the evidence of one witness, was accepted as sufficient in proof. In the instant case, Mr. Apara, for the respondents gave evidence that his estimated profits as in paragraph 9(4) was based on feasibility survey which was Exhibit B. He was not cross-examined on this. That is what the Court of Appeal held was enough in proof. First, the makers of Exhibit B. the experts. Pannel Kerr Forster and Co., did not give evidence and it is difficult to see of what use cross-examination of Mr. Apara would have been. Secondly. there are clearly situations in which one witness, i.e., oral evidence would have been sufficient. My learned brother, Agbaje, J.S.C., has dealt with this in great detail and I do not find it necessary tore-peat him. Suffice it to say that the 3 cases on which the Court of Appeal relied were cases in which experts or material witnesses testified in the trial Court.
I think that the Court of Appeal was in error in giving Exhibit B such weight. I fully endorse the strictures of the document by Belgore, J., as he then was. Exhibit B was no more than a projection. No where in that report was the figure N1,913,000 mentioned as projected profit. Mr. Molajo, S.A.N. before this Court said it appeared in his own calculations. Besides, as Belgore, J., pointed out, the respondents only had 35% shareholding. What was the projected profit of which N1,913,000 was a part? Exhibit B was a projection for the first 10 years. How did the estimated profit for 5 years come about?
Finally, it has to be remembered that the company to manage the Hotel was yet to be incorporated and loans for the project had not even been obtamed. It is settled that a claim for anticipated profit is a special one which must he strictly established by evidence. See Chief J. K. Odumosu v. African Continental Bank Ltd. (1976) 11 S.C.55. This principle was recently upheld by this court in Uwa Printers v. Investment Trust Ltd. (1988) 5 N.W.L.R. (Pt. 92)110 in which anticipated profits were again based on a feasibility report, and although even the factory had been constructed, the claimant failed as he could not show a single contract of printing to support the claim for estimated profits.
I too. therefore, agree that this appeal must succeed and I therefore allow it. The judgment of the Court of Appeal. Lagos Judicial Division dated l0th December. 1984 is hereby set aside. I abide by all the orders including order for costs in the lead judgment of Agbaje, J.S.C.
Judgment delivered by
Uwais, J.S.C.
I have had the opportunity of reading in advance the judgment read by my learned brother, Agbaje. J.S.C. I entirely agree that the appeal has merit and that it should be allowed.
The only issue for determination in this appeal is whether a document which has been admitted under the provisions of section 90 sub-section (1) of the Evidence Act. Cap.62 should be regarded as a proof of its contents if the testimony of the witness that tendered it in evidence was not challenged under cross-examination. Section 90 sub-section (1) reads
90. (1) In any civil proceedings where direct oral evidence of fact would be admissible, any statement made by a person in a document and tending to establish that fact shall. on production of the original document, be admissible as evidence of that fact if the following conditions are satisfied
(a) if the maker of the statement either
(i) had personal knowledge of the matters dealt with by the statement, or
(ii) where the document in question is or forms part of a record purporting to be a continuous record, made the statement (in so far as the matters dealt with thereby are not within his personal knowledge) in the performance of a duty to record information supplied to him by a person who had or might reasonably be supposed to have personal knowledge of those matters, and
(b) if the maker of the statement is called as a witness in the proceedings: Provided that the condition that the maker of the statement shall be called as a witness need not be satisfied if he is dead, or unfit by reason of his bodily or mental condition to attend as a witness, or if he is beyond the seas and it is not reasonably practicable to secure his attendance, or if all reasonable effort to find him have been made without success.
In the Federal High Court the respondents, as plaintiffs, based their claim for estimated profit on a feasibility report (exhibit B) which was prepared by the firm of Messrs Pannell Kerr, Fester & Company The feasibility report was tendered in evidence by a Mr. Olakunle Apara (P.W.1) who was a director of the 1st respondent. Nobody from the firm of Messrs Pannell Kerr, Fester & Co. was called as a witness to give evidence about the contents of the feasibility report. In his well-considered judgment, the learned trial Judge, Babatunde Belgore, J. (as he then was) observed as follows
Mr. Apara (P.W. 1) stated that his estimated profit was based on feasibility survey which was Exhibit 'B'. I am of the view that estimate of profit in Exhibit 'B' cannot come under the principle laid down by the Privy Council in Abel Boshali V. Allied Cornmercial Exporters (1961) All N.L.R. (Part 4)917. Abel Boshali's case envisaged that a witness testified and was liable to cross-examination to test his veracity and the basis of his conclusion. Exhibit 'B' is a mere projection subject to various probabilities
.Apart from the fluid nature of the projection in Exhibit 'B' there are few unanswered questions on item 9(4) (of the Statement of Claim). Why was 5 years taken as the period for claiming profits? The projection made in Exhibit B on p.53 was a typical annual operating result and on p.57, the projection for gross operating profit was for the first 10 years. The second question is: how was the figure N1,913,000 arrived at? The estimated profit given in Exhibit 'B ' was for the whole hotel and the plaintiff was only 35% shareholders of the whole project. Where is the evidence of the total profit of which 35% of it for 5 years would come?
Taking into account, the lack of any oral evidence of anticipated profit and considering all the probabilities upon which Exhibit 'B' was compiled. I do not find established, any degree of evidence of the special damages (estimated profits) under item 9(4) (of the Statement of Claim). (parenthesis and italics mine).
In the Court of Appeal the decision of the learned trial Judge was reversed for the following reasons given by Nnaemeka-Agu, J.C.A. (as he then was) and concurred with by Ademola and Kutigi, JJ.C.A.
The appeal as it relates to expected profit is, in my opinion different. The appellants were categoric in the evidence of P.W.1 that they were basing their claim on this item on the feasibility report of consultants who had been commissioned by both sides, whose report, Exhibit B, was tendered without objection and P. W. 1 was not cross-examined on it nor was the projected profit by the experts impugned or contradicted in any way . In my view, the item should have been accepted as proved. I find some support in this from the dicta of the Supreme Court in S.A. Obanor v. Ehigie Obanor (1976) 2 S.C. 1 where their Lordships, per Madarikan, J.S.C. said at pages 4 5
...The gravamen of his argument was that Mr. Talabi being an expert whose evidence remain unchallenged the lower court should have accepted his evidence unless there was good reason to reject it. Counsel relied on the case of Seismograph Services Ltd. v. B.E. Onokpasa (1972)1 All N.L. R. 343 and in particular, invited our attention to the observation at page 345 where this court said:-
We are of the view, therefore, that if the learned trial Judge had applied the correct test, he would have come to the conclusion that the only expert opinions before him were those of the defence experts, and so unless for good reasons otherwise should have accepted them.
We think there is great force in this submission. Indeed when P.W. 1 testified that item 4 of the claim was based on the feasibility report, one would have expected the appellants, if they did not agree that the report was correct, to have produced some evidence to show it or at lease (sic) challenged it under cross-examination; but they did not. The learned Judge should have regarded the item as duly proved. See Obi Obembe v. Wemabod Estates Limited (1977) S.C. 115 at p.139-140. It appears to me that although the learned trial Judge was right in holding that the experts' estimate of profit was subject to some probabilities, it was for the appellants, in the above circumstances, to bring those probabilities, if any, which could impugn an award based on that report, if they could. Having failed to do so, there is clearly a case made out for an award based on it
..
In the result I dismiss the appeal by the appellants (2nd and defendants in the Court below)
.. I hereby vary the award of damages by disallowing the award of
N50,000.00 (with interest) as general damages but substituting award of N1,913,800 as loss of profit. (italics mine).
From the foregoing it is clear that the Court of Appeal reversed the decision of Belgore, J. (as he then was) on the ground that P.W. 1 who tendered exhibit B "was not cross-examined on it nor was the projected profit by the experts impugned or contradicted in any way." It is significant to point out in reaching this conclusion the Court of Appeal did not advert to the provisions of section 90 sub-section (1) or any other provisions of the Evidence Act. It merely relied on the decision in Obi Obembe's case (supra) and Obanor's case (supra) which in turn cited Seismograph Services Ltd.'s case with approval. However, it is to be observed that although the decisions in the cases of Obanor and Seismograph Services Ltd. (supra) stated that the testimony of an expert witness if unchallenged by way of cross-examination or contradicted by evidence should be accepted, a rider to that was added and it is that unless there is no good reason to reject it. In other words what this Court said in those cases is that expert evidence, if admitted and it is unchallenged by way of cross-examination or contradictory evidence should be accepted if there is no good reason to reject it . It is not an unbridled dictum that simply provides that once an expert's evidence has been admitted and is neither challenged nor tested under cross-examination then such evidence becomes inevitably acceptable. It has to be borne in mind that every piece of evidence that has been admitted in the course of proceedings is subject to be tested for credibility, weight or cogency by the trial Court before it becomes acceptable. It is not merely acceptable just because it is an expert evidence which has not been contradicted nor challenged. To hold otherwise is to jettison the primary duty of a trial court which is to evaluate all the evidence before it whether given by an expert or not, before coming to a conclusion as to the preponderance of the evidence adduced by the parties.
Now the present case is distinguishable from the cases of Obanor; Seismograph Services Limited, and Obi Obembe (supra) and even Boshali's case (supra). In the latter cases, the testimonies of the experts concerned, were given by the experts themselves in person; so that the admission of their evidence was not governed by the provisions of section 90 of the Evidence Act, Cap.62 as was the position in the case at hand. Where a document is admitted in evidence under section 90, regard must be had to the provisions of section 91 of the Evidence Act in determining what weight is to be attached to the document. Sub-section (1) of section 91 states -
91 (1) In estimating the weight, if any, to be attached to a statement rendered admissible as evidence by this Act, regard shall be had to all the circumstances from which any inference can reasonably be drawn as to the accuracy or otherwise of the statement, and in particular to the question whether or not the statement was made contemporaneously with the occurrence or existence of the facts stated, and to the question whether or not the maker of the statement had any incentive to conceal or misrepresent facts.
It, therefore, follows that it is not sufficient to say that where a document written by an expert is tendered in evidence and that document or the testimony through which it is tendered, if unchallenged, then it must be acted upon. The document is certainly subject to scrutiny by the trial Court and its contents could, in the process of the scrutiny, be rejected if there is reason to do so, as was done in the present case by the learned trial Judge. In my opinion, the Court of Appeal was in serious error when it reversed the decision of the learned trial Judge.
Accordingly, I too will allow this appeal and it is hereby allowed. The decision of the Court of Appeal awarding the sum of N 1,913,000.00 to the respondents as special damages is hereby set aside. In its place I substitute the award of N50,000 which was made by the learned trial Judge. The appellants are entitled to costs against the respondents, which I assess at N500.00.
Judgment delivered by
Kawu, J.S.C.
I have had the advantage of reading in draft the lead judgment of my learned brother, Agbaje, J.S.C., which has just been delivered. I am in complete agreement with his reasoning and also with his conclusion that the appeal should be allowed. I agree that the plaintiff ought not to have been entitled to the anticipated profits claimed by merely putting forward Exhibit 'B' in evidence. I too will dismiss the appeal. I abide by all the consequential orders made in the lead judgment, including the orders as to costs.
Judgment delivered by
Belgore, J.S.C.
I read in draft the judgment of my learned brother, Agbaje, J.S.C., and I agree entirely with his reasoning and conclusion that this appeal succeeds on the only issue of damages canvassed. I will however also restore the order of the trial Court awarding N 50,000.00 damages as in the concurring judgment of Uwais, J.S.C.
There is however a point raised but on which some clarification should be made. The present appellant, as appellant in the Court of Appeal withdrew the appeal. What remained in that Court was the Respondent's Notice under Order 3 and 14(1) of the Court of Appeal Rules, similar provisions as in the Supreme Court Rules, Order 8 rule 3(1). The rule reads:
14. (1) A respondent who, not having appealed from the decision of the Court below, desires to contend on the appeal that the decision of that Court should be varied, either in any event of the appeal being allowed in whole or in part, must give notice to that effect, specifying the grounds of that contention and the precise form of the order which he proposes to ask the Court to make, or to make in that event, as the case may be.
What we are faced with in this appeal is that the respondent did not cross-appeal from the dedsion of the Federal High Court to the Court of Appeal but only gave "respondent's notice." Before hearing the appeal, the appellant applied to discontinue the appeal and it was accordingly dismissed. Then what of the respondent's notice? At first, the respondent's notice appears to have been hooked to the appeal and if that was the case, the notice would normally die with it. The respondents' notice proceedings is based on the premise that the person giving it has won in the Court below and the loser is appealing. It is a procedure that follows an appeal, without an appeal, respondent's notice is irrelevant. But when the substantive appeal is withdrawn, the respondent's notice does not die with it.. If in the normal cause of hearing the substantive appeal and it is subsequently dismissed, the respondent's notice is not attached to the apron string of the substantive appeal. In a Situation, as in this at hand, the withdrawal of the substantive appeal does not kill off the respondent's notice, but it could be proceeded upon just like a cross-appeal. [See Re Cavander's Trusts (1881)16 Ch. D. 270, C.A.]. The
of Appeal was right in converting the respondent's notice in this in-to cross-appeal. There are however occasions when respondent's
notice would not suffice, e.g. when it will give a completely different facade to the case by fundamentally altering the original decision. In such a case a cross-appeal is what is relevant. Adeleke v. Akin-Olugbade (1987) 3 N.W.L.R. (Pt.60) 214.216. Luckily this issue has been fought, but this explanation is necessary for practice guidance only.
I also make the same consequential orders as made in the lead judgment of Agbaje, J.S.C.
Judgment delivered by
Wali, J.S.C.
I had the advantage of a preview of the lead judgment of my learned brother, Agbaje, J.S.C. I agree with the reasoning and the conclusions reached thereupon, both on matters of fact and law. The issue of assessing special damages on feasibility report on the ipse dixit of the plaintiff only and who is not the maker of the report has recently been dealt with by this Court in U wa Printers Ltd. v. Investment Trust Ltd. (1988) 5 N.W.L.R. (Pt.92) 110.
It is therefore for these same reasons given by my learned brother, Agbaje, J.S.C., in his lead judgment that I would also allow this appeal and do so in terms set out in the lead judgment, inclusive of order as to costs.
Counsel
Mrs. B.O. Adebayo, Director of Legal
Drafting and Ministerial Counselling, Oyo State ....... For the Appellants
E.A. Molajo,SAN
With H.D. Abina and J. Akin-Williams ....... For the 1st Respondent
Alhaji R.A. Osikoya, Director of Civil Litigation, Federal Ministry of Trade ....... For the 2nd Respondent