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  • Prime Merchant Bank Ltd v. Man-Mountain Company
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  • 2000-07-31
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Prime Merchant Bank Ltd v. Man-Mountain Company

PRIME MERCHANT BANK LIMITED.

V

MAN-MOUNTAIN COMPANY

( Incorporated Insurance Broker )

COURT OF APPEAL

( LAGOS DIVISION )

ATINUKE OMOBONIKE IGE,  J.C.A. ( Presided and read the leading judgment )

PIUS OLAYIWOLA ADEREMI,  J.C.A.

IFEYINWA CECILIA NZEAKO,  J.C.A.

CA/L/93/97

TUESDAY 18TH JANUARY, 2000

ACTION - Burden of proof on a plaintiff in civil matters - Need to succeed on the strength of his own case and not the weakness in Defendant’s case

ACTION - Cost of engaging the services of a legal practitioner as a direct consequential loss which flows from a breach of contract - Whether actionable

ACTION - Counter-claim - Nature and proof of - Need to file pleadings and lead evidence

BANKING - Deposit for ascertainable date of maturity - Impropriety of calling for a refund of deposit before date of maturity

CONTRACT - Breach of contract - Damages as a recognised remedy at law Reasonable forseeability of injury as a criterion for award

DAMAGES - Breach of contract - Reasonable foreseeability of injury as a criterion for award of damages - Test for determining

DAMAGES - Special damages - Proof of - Need for strict and special proof

LEGAL PRACTITIONER -  Cost of engaging the services of a legal practitioner as a direct consequential loss which flows from a breach of contract - Whether actionable

PRACTICE AND PROCEDURE - Damages for breach of contract - The test of reasonable forseeability of injury as a criterion for award of

Issues:

  1. Whether the cost of Appellant’s engaging the services of a legal practitioner was a direct consequential loss which flowed from the breach by the respondent of the contract between the Appellant and Respondent; and whether such a loss was actionable.
  2. Whether the appellant had sufficiently proved the special damages of the cost of engaging a legal practitioner claimed before the trial court by mere oral evidence adduced to substantiate the payment thereof without any documentary proof of same even though the evidence as to payment was unchallenged and uncontroverted.

Facts:

The Respondent (Plaintiff in the trial court) placed the sum of N30,000,000 ( Three Million Naira) with interest on same at 14.50% per annum, with the Appellant as deposit with an ascertainable date of maturity.  The Respondent later sought to withdraw the deposit before the agreed date of maturity.  He instituted an action, claiming the principal sum and interest the agreed rate, and the cost of the action instituted.  The appellant denied liability and counter-claimed the sum of N300,000 (Three Hundred Thousand Naira) as special damages, being cost incurred as solicitors’ fees for the defence of the respondent’s action.  The trial court, conceding that the Respondent was indeed in breach of the contract with the Appellant by his calling for a refund of the sum placed before the date of maturity, however, upheld the Respondent’s claims in part.  The Appellant’s counter-claim was dismissed in its entirety.  The court held inter alia that there was no term in the contract stipulating that in the event of a party instituting an action in respect of the contract, the other party shall pay solicitors’ fees.

The Appellant, being dissatisfied, appealed to the Court of Appeal, contending that the liability to pay solicitor’s fees or its actual payment was a loss which flowed naturally and is incurred directly from the breach of contract.  The Court of Appeal in a unanimous decision, though holding that the liability to pay solicitors fees was a consequential loss flowing from the breach of contract by the Respondent, dismissed the appeal on grounds of lack of adequate proof of the payment of the fees.