➥ CASE SUMMARY OF:
Unity Bank Plc v. Kayode Olantunji Esq. (CA/K/300/2012, 18 September 2014)
by Branham Chima (LL.B.)
➥ ISSUES RAISED
Recovery of legal fees;
Terms of contract;
Law and morality.
➥ CASE FACT/HISTORY
The case of the Respondent on the pleadings was that by a letter dated the 19th of May, 2003, the Appellant contracted his legal services for the recovery of the indebtedness of its customers, Alhaji Sabiu Bako and Sabiplast Nig. Ltd, and which was in the sum of N203,593,193.71 as at 30th of April, 2003 and that his stated fee for the brief was 10% of the sum recovered. It was his case that his law firm wrote several letters of demand to the customers and that when the repayment of the debt was not forth coming, he commenced an action in Suit No K/389/2003 on behalf of the Appellant against the said customers of the Appellant. It was his case that the matter was keenly contested and that he subsequently obtained judgment against the customers of the Appellant, and in favour of the Appellant, in the sum of N112 Million. It was his case that the customers paid the sum of N25 Million in reduction of the judgment sum and they filed a motion for instalmental payment of the balance sum and that the motion was granted and they commenced the instalmental payments and had paid an additional sum of N13 Million. It was the case of the Respondent that he was entitled to be paid 10% of the N38 Million that had been paid by the customers and that his law firm continued monitoring the instalmental payments of the judgment sum and that the matter was, to the knowledge of the Appellant, being handled by a Counsel in his law office, Felix Jones Osimerha Esq, and that his law office was willing, ready and able to conclude the recovery of the said indebtedness. It was his case that, to his shock, he received a letter dated in November, 2008 from the Appellant debriefing him on the matter and assigning the brief to Felix Jones Osimerha Esq, who was by then still acting on behalf of his law office, and that this was done to deprive him of his earned fees and that he suffered injury and damages by reason of this action of the Appellant.
The Appellant in response admitted it contracted the legal services of the Respondent for the recovery of the indebtedness of its customers, Alhaji Sabiu Bako and Sabiplast Nig. Ltd, and which was in the sum of N203,593,193.71, as at 30th of April, 2003 and that the fee rate of the Respondent for the brief was 10% of the sum recovered but stated that it subsequently reduced the stated fee rate to 5% of the sum recovered. The Appellant admitted that a suit in Suit No K/389/03 was indeed commenced on its behalf against its said customers for the recovery of the indebtedness but stated that the Respondent never took part in the said suit and neither did the Respondent take any steps towards realizing the judgment sum. It was the case of the Appellant that the judgment entered in its favour in Suit No K/389/03 was for the sum of N82,971,565.16 and not N203,593,193.71 and that it had reduced the stated fee of the Respondent for the brief from 10% to 5% by its letter dated the 13th of January, 2004 and that this reduction of fee was accepted by the Respondent, as evidenced by his conduct in a letter dated 8th of November, 2006. It was the case of the Appellant that the Respondent abandoned the brief given to him to recover money from its said customers and left the shores of Nigeria and relocated to London and that the said brief suffered by reason thereof and that it debriefed the Respondent by a letter dated 23rd of October, 2008 and instructed the law firm of FJ Osimerha and Co to take the brief. It was its case that it was perfectly within its right to terminate the legal services of the Respondent on the said brief for non-performance and abandonment and that it was the law firm of FJ Osimerha and Co that rendered it the necessary services on the brief, including the court matter and actual recovery and that as such the Respondent was not entitled to any recovery fees or compensatory damages.
The matter proceeded to trial and at the end of which the lower Court entered judgment in favour of the Respondent. The Appellant was dissatisfied with the judgment and it caused its Counsel to file a notice of appeal dated the 2nd of July, 2012 against the judgment and the notice of appeal contained four grounds of appeal. The records of appeal show that the Respondent too was dissatisfied with a portion of the judgment and he caused a notice of cross-appeal dated the 22nd of August, 2012 to be filed and the notice of cross-appeal contained one ground of appeal.
➥ ISSUE(S) & RESOLUTION(S)
[APPEAL APPEAL ALLOWED, IN PART]
↪️ I. Whether the lower Court was correct when it held that the debriefing of the Respondent and the termination of his legal services was improper and amounted to a breach of contract, in the circumstances of this case?
RESOLUTION: IN APPELLANT’S FAVOUR.
[THE APPELLANT HAS THE RIGHT TO BRIEF ANY COUNSEL OF HIS CHOICE AND CHANGE COUNSEL AT ANYTIME
‘It is obvious from the judgment of the lower Court that the sole reason for the finding that the debriefing of the Respondent by the Appellant was improper and amounted to a breach of contract was because there was no clause on termination in the letter of engagement of the Respondent. It was not in dispute between the parties that by Exhibit 1, the Appellant engaged the services of the law firm of the Respondent to act as its legal Counsel in its bid to recover sums due to it from its customers. It is a settled principle of law that every person in this country has a right to instruct or brief any Counsel of his choice in respect of any issue, matter or case he is involved in and inherent in this right is the power of the citizen to change his Counsel as he desires at any stage of the issue, matter or case, without giving any reason for doing so and to engage as many law firms as he can afford to represent him on the issue, matter or case. It is a right guaranteed by the Constitution to every person in Nigeria and it is clearly implicit in the provisions of section 36 of the 1999 Constitution which guarantees every citizen of this country who desires a determination of his civil rights and obligations, including any question or determination by or against any government or authority, a right to fair hearing – Okoduwa v. State (1988) 2 NWLR (Pt.76) 333, Atake v. Afejuku (1994) 9 NWLR (Pt.368) 379, Akuma v. Ezikpe (2001) 8 NWLR (Pt.716) 547 and Ukweni v. Governor, Cross Rivers State (2008) 3 NWLR (Pt.1073) 33.’
‘It is also settled law that the concept of fair hearing is so fundamental a principle of our adjudicatory process that it cannot be compromised on any ground – Nwokoro v. Onuma (1990) 3 NWLR (Pt.136) 22 at 35, Iwuoha v. Okoroike (1996) 2 NWLR (Pt.429) 231, Olufeagba v. Abdul-Raheem (2009) 18 NWLR (Pt.1173) 384. When the law vests a right on a citizen, a court of law will resolutely resist any attempt, and by whatever method, to deny the citizen the enjoyment of the right conferred by law – Longe v. First Bank of Nigeria Plc (2010) 6 NWLR (Pt.1189) 1.Thus, unless a citizen expressly contracts out a right vested in him by law, the right will be held applicable in all engagements entered into by such citizen. Therefore, in the instant case, while it is correct that the letter of engagement of the Respondent, Exhibit 1, did not contain a termination clause, this cannot derogate from the right of the Appellant to debrief and terminate the legal services of the Respondent and to instruct another Counsel in any stage it desired. The right must be read into the terms of the letter of engagement of the Respondent and it is also irrelevant to the exercise of the right that the new Counsel engaged by the Appellant used to work in the law firm of the Respondent.’
‘The basis upon which the lower Court found that the debriefing of the Respondent by the Appellant was improper and amounted to a breach of contract was erroneous and very faulty. It is trite that an appellate Court is enjoined in such circumstances to interfere with the findings of a lower Court and as such the finding of the lower Court on this issue must be set aside – BFI Group Corporation v. Bureau of Public Enterprises (2012) 18 NWLR (Pt.1332) 209. The first issue for determination is resolved in favour of the Appellant.’]
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↪️ II. Whether the lower Court was correct when it held that the Respondent was entitled to 10% of the recovered sum as legal fees as against the 5% contained in the letter of the Appellant dated the 13th of January, 2004, Exhibit 23?
RESOLUTION: IN RESPONDENT’S FAVOUR.
[THE RESPONDENT WAS ENTITLED TO 10% OF HIS LEGAL FEES
‘The core issue relevant to the application of either the doctrine of novation or the principle of variation of contract to the facts of the instant case is whether by his letter dated the 8th of November, 2006, Exhibit 24, wherein he demanded for his legal fees on the sum recovered from Sabiplast Nig Ltd at the rate of 5%, the Respondent consented or impliedly agreed to the variation of his legal fees from 10% to 5% of the recovered sum. In his oral testimony at the trial, the Respondent testified that the said letter was written error and that it was corrected by a letter dated the 17th of January, 2007 wherein he demanded for his fees at the rate of. 10%. The letter dated 17th of January, 2007 tendered Exhibit 3. This testimony of the Respondent was not disparaged or contested under cross-examination. The second defence witness called by the Appellant at the trial stated under cross-examination that: “By letter dated 17th of January, 2007, Exhibit 3, the plaintiff demanded 10% on the recovered sum. Exhibit 3 came after Exhibit 24. It appears there is a mistake in one of the letters” This testimony supported the case of the Respondent that the letter dated 8th of November, 2006, Exhibit 24, was written in error. Thus, the contents of the letter cannot amount to consent or implied agreement on the part of the Respondent to the suggested variation of his legal fees from 10% to 5% of the recovered sum by the Appellant.’]
.
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↪️ III. Whether the Respondent led cogent and credible evidence in proof of his claims to warrant the lower Court entering judgment in his favour?
RESOLUTION: IN APPELLANT’S FAVOUR, IN PART.
[THE RESPONDENT IS ENTITLED TO THE PERCENTAGE OF THE FEES RECOVERED BEFORE THE TERMINATION OF HIS BRIEF
‘Applying these principles to the contents of Exhibit 1, it is correct, as stated by Counsel to the Appellant, that the legal fees of the Respondent was tied to the actual amount recovered by the Respondent, and not to the steps taken by the Respondent in recovering the debt. Thus, if the Respondent spends sleepless nights chasing the debtors to pay and takes all the steps available to ensure payment of the debt, they will all not count for anything if the debtors pay nothing in settlement of the debt; he will not be entitled to anything as legal fees. It was not in dispute that the Appellant terminated the brief of the Respondent by a letter dated 23rd of October, 2008, Exhibit 25, thus in considering the claims of the Respondent, it is essential to demarcate the sums recovered from the debtor before the 23rd of October, 2008 from those recovered thereafter. The case of the Respondent before the lower Court was that the debtors had, due to his efforts, paid the sum of N38 Million and had promised to pay the balance by making monthly instalmental payments. The Respondent led evidence in his examination in chief that subsequent to his commencing an action against the debtors, the debtors paid the sum of N25 Million and had paid a further sum of N13 Million subsequent to the judgment and he made a specific mention of a N2 Million paid by the debtor into the Appellant’s legacy account. Under cross examination, the Respondent stated that the said N2 Million was paid on the 5th of October, 2006 and he referred to a letter dated the 27th of October, 2008 which he said confirmed that the debtors paid another sum of N2 Million and also to a motion filed by the debtors dated the 16th of March, 2010 wherein he said the debtors confirmed paying a total sum of N5 Million. The said letter of 27th of October, 2008 was not one of the exhibits tendered before the lower Court. The said motion dated the 16th of March, 2010 was tendered as Exhibit 14. Reading through the affidavit in support of the motion, the debtors confirmed payment of N3 Million, which they said they paid in two installments of N1 Million on the 1st of February, 2010 and N2 Million on the 8th of February, 2010, and not N5 Million as claimed by the Respondent. The fact of the payment of N25 Million by the debtors was confirmed by the High Court in its judgment in Suit No K/389/03, Exhibit 11, and a photocopy of the cheque in payment of the N2 Million made by the debtors on the 5th of October, 2006 was attached as an exhibit to the motion, Exhibit 14. Thus, effectively, the Respondent only led cogent evidence of the payment of the sum of N27 Million by the debtors before the termination of his brief by the Appellant and of the payment of N3 Million after the termination of his brief. Without doubt, the Respondent is entitled to be paid legal fees in the sum equivalent to 10% of the said N27 Million.’
‘The next question is whether the Respondent is entitled to be paid legal fees in respect of monies paid by the debtors after the termination of his brief by the Appellant. As stated earlier, a contract for legal services is a peculiar contract, and not in the nature of other contracts, because the Constitution of Nigeria 1999 guarantees the right of every person to a Counsel of his choice at any point in time, and this includes the right to change Counsel for no reason or for any reason at all. Thus, the ordinary rules applicable to termination of other contracts, will not apply to termination of a contract for legal services. It must be noted that this right does not foreclose the entitlement of the Counsel whose brief was terminated from being paid agreed legal fees. The resolution of the question of the entitlement of the Respondent to legal fees in respect of monies paid by the debtors after the termination of his brief must thus necessarily depend on the terms of his letter of engagement, Exhibit 1. The agreed fee of the Respondent was “10% of the amount recovered”. The operative words “amount recovered” is used in the past tense and not in the future tense. Thus, they refer to the actual amount that was paid by the debtors in the life span of the brief, and not the amount that the debtors later paid after the termination of the brief and/or have promised to pay in future. Parties are bound by the terms of agreement they have voluntarily entered into and nothing must be read into the contract. To hold that since the later payments were due to or that the future payments will be as a result of the efforts of the Respondent and that as such he should be entitled to legal fees on them is to read words into the terms of agreement and also to be swayed by sentiments. There is a saying in jurisprudence that law and morality are not synonymous. Hence, an act that is morally reprehensible may not be legally punishable – Attorney General, Federation v. Abubakar (2007) 10 NWLR (Pt.1041) 1.’
‘By the terms of the letter of engagement, Exhibit 1, the Respondent is not is entitled to be paid legal fees in respect of monies paid by the debtors after the termination of his brief by the Appellant. The holding of the lower Court otherwise was thus misconceived. The third issue for determination is resolved partially in favour of the Appellant.’]
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✓ DECISION:
‘In conclusion, this appeal succeeds in part. The judgment entered by the Kano State High Court in Suit No K/537/2010 delivered by Honorable Justice Wada Abubakar Rano on the 14th of June, 2012 is hereby allowed in part and set aside in part.’
➥ FURTHER DICTA:
⦿ RULES OF COURT ARE PART OF THE MACHINERY OF JUSTICE AND ARE MEANT TO BE OBEYED
This Court will, in the instant case, followed the position of the Courts that say that a respondent willing to raise a preliminary objection must file a formal notice of preliminary objection as stipulated in Order 10 of the Court of Appeal Rules. This is in consonance with the principle of law that says that Rules of Court partake of the nature of subsidiary legislation by virtue of section 18(1) of the Interpretation Act and consequently have the force of law and they must prima facie be obeyed and followed by all the parties before the court. The Rules of Court are part of the machinery of justice made by the courts to regulate their proceedings and to help parties present their cases within a procedure made for the purpose for a fair and quick trial and it is compliance with them that gives predictability and clarity to the system of administration of justice – Aromolaran v. Oladele (1990) 7 NWLR (Pt.162) 359, Duke v. Akpabuyo Local Government (2005) 19 NWLR (Pt.959) 130, Owners of the MV “Arabella” v. Nigeria Agricultural Insurance Corp (2008) 11 NWLR (Pt.1097) 182, Agip (Nig) Ltd v. Agip Petroli International and Ors (2010) 5 NWLR (Pt.1187) 348, Oyegun v. Nzeribe (2010) 7 NWLR (Pt.1194) 577. — H.A.O. Abiru JCA.
⦿ FAILURE TO FILE FORMAL NOTICE OF PRELIMINARY OBJECTION WILL HAVE OBJECTION STRUCK OUT
The Respondent having failed to file a formal notice of preliminary objection in compliance with Order 10 of the Court of Appeal Rules either separately or as part of his brief of arguments, the preliminary objection raised and argued in the Respondent’s brief of arguments was incompetently raised and it will not the entertained by this Court. It is accordingly struck out. — H.A.O. Abiru JCA.
⦿ CHARACTERISTICS OF A WELL DRAFTED ISSUE FOR DETERMINATION
Now, an issue for determination in an appeal is a point which is so crucial that if it is decided one way or the other will affect the fate of the appeal. It is a point which is so critical that if it is decided in favour of a party, such a party is entitled to win the appeal – Okoye v. Nigerian Construction and Furniture Co Ltd (1991) 6 NWLR (Pt.199) 501 and G. Chitex Industries Ltd v. Oceanic Bank International (Nig) Ltd (2005) 14 NWLR (Pt.945) 392. Issues for determination are an important part of a brief of arguments and their purpose is to enable the parties narrow the issues in the grounds of appeal filed. The characteristics of a well drafted issue for determination in a brief of argument are precision, brevity, accuracy and clarity – Uwaifo v. Uwaifo (2005) 3 NWLR (Pt.913) 479, Iloabachie v. Iloabachie (2005) 13 NWLR (Pt.943) 695. An issue for determination must be concise and devoid of irrelevant complexities and frivolities and must be such as to ease the comprehension of matters to be adjudicated upon by the court – Ezeugo v. State (2013) 9 NWLR (Pt.1360) 508. — H.A.O. Abiru JCA.
⦿ AN APPEAL IS AN INVITATION TO REVIEW THE DECISION OF THE LOWER COURT
Now, it is trite law that that an appeal is an invitation to a higher court to review the decision of a lower Court in order to find out whether, on proper consideration of the facts placed before it and the applicable law, the lower Court arrived at the right decision – Oba v. Egberongbe (1999) 8 NWLR (Pt.685) 485, Nigerian Navy v. Labinjo (2012) 17 NWLR (Pt.1328) 56, Ombugadu v. Congress for Progressive Change (2013) 3 NWLR (Pt.1340) 31. An appeal is against the decision of a lower Court and a challenge to the validity of that decision Chukwuogor v. Chukwuogor (2006) 7 NWLR (Pt.979), United Bank of Africa Plc v. BTL Industries Ltd (2006) 19 NWLR (Pt.1013) 61, Shettima v. Goni (2011) 18 NWLR (Pt.1279) 413.The resolution of this issue for determination by this Court must thus commence from the reason for the decision of the lower Court on the issue in question. — H.A.O. Abiru JCA.
⦿ A CASE MUST BE SIMILAR FOR IT TO APPLY AS A PRECEDENT – THE FACT OF THE CASE MUST BE TAKEN INTO ACCOUNT
It is elementary that before a court can be persuaded by or rely on the judgment of a court of coordinate jurisdiction or of a higher court in resolving an issue presented before it for adjudication in a matter, the facts and circumstances of the two cases must be very similar or substantially the same. It is a settled principle in our legal jurisprudence that legal principles established in decided authorities are not to be applied across board and in all matters without regard for the facts and issues framed for adjudication in a particular case. This point was succinctly made by the Supreme Court in Marine Management Association Inc and Anor v. National Maritime Consultancy Ltd (2012) 3 NWLR (P.1333) 506 at 538A when the Court stated that: “Isolated and general principles of law cannot be relied on solely to determine an issue in a case without looking at the circumstances, facts and merits of each case.” The point was reiterated by the Supreme Court in Emeka v. Okadigbo (2012) 18 NWLR (Pt.1331) 55 where Rhodes-Vivour, JSC stated at Page 96 thus: “Facts have no views. A judgment should always be read in the light of the facts on which the case was decided. The rules of stare decisis do not allow courts to apply the ratio of a case across the board and with little regard to the facts of the case before them.” This is because decisions of courts draw their inspiration and strength from the facts which framed the issues for decision and once such decisions are made they control future judgment in like or similar cases, hence the facts of two cases must either be the same or at least similar before a decision in the earlier case can be used in a later case – Fawehinmi v. Nigerian Bar Association (No 2) (1989) 2 NWLR (Pt.105) 558, Ndu v. Onuaguluchi (1999) 11 NWLR (Pt.625) 152, Anaedobe v. Ofodile (2001) 5 NWLR (Pt.706) 365, Abubakar v. Nasumu (No.2) (2012) 17 NWLR (Pt.1330) 523. — H.A.O. Abiru JCA.
⦿ THE PRINCIPLE OF VARIATION OF CONTRACT
The principle of variation of contract involves a definite alteration of contractual obligations by the mutual agreement of both parties. Variation is analogous to the entry by the parties into a new contract. The requirements of offer, acceptance and consideration are thus imposed. In Goss v. Lord Nugent 110 ER 713 at 716, the Court stated: “By the general rules of the common law … it is competent to the parties at any time before breach of it, by a new contract not in writing, either altogether to waive, dissolve, or annul the former agreements, or in any manner add to, subtract from or vary or qualify the terms of it and thus make a contract …” For a variation to be upheld, there must be a valid and subsisting contract on foot between the parties; there must be some form of consensus between the parties as to the obligations which are to be altered; and the parties must have acted in some way to their benefit or detriment in either agreeing the variation or as a result of the variation. A mutual abandonment of the existing rights of the parties under the agreement between them is sufficient consideration to support variation of the agreement – Ekwunife v. Wayne (WA) Ltd (1989) 5 NWLR (Pt.122) 422 and Prospect Textile Mills Ltd v. Imperial Chemical Industries Plc England (1996) 6 NWLR (Pt.457) 668. Also, consideration will be said to have been provided where a party would derive a superadded benefit from the contract by reason of the variation – Williams v. Roffrey Bros and Nicholas (Contractors) Ltd (1991) 1 QB 1. Further, the fact that, as matters turned out, only one party benefits from the variation is irrelevant. — H.A.O. Abiru JCA.
⦿ PARTIES ARE BOUND BY THEIR TERMS OF CONTRACT
The parties were agreed that the terms of the engagement of the Respondent by the Appellant were contained in Exhibit 1. It is a settled principle of law that parties are free to enter into agreements and that in construing the relationship between parties to a contract, a Court is enjoined to confine itself to the plain words and meaning derived from this contract – Central Bank of Nigeria v. Archibong (2001) 10 NWLR (Pt.721) 492, Ibama v. Shell Petroleum Development Co. (Nig) Ltd (2005) 17 NWLR (Pt.954) 364, Momoh v. Central Bank of Nigeria (2007) 14 NWLR (Pt.1055) 504. Parties are bound by the contract they voluntarily entered into and cannot act outside the terms and conditions contained in the contract and neither of the parties to a contract can alter or read into a written agreement a term which is not embodied in it – African International Bank Ltd v. Integrated Dimensional System Ltd (2012) 17 NWLR (Pt.1328) 1, Lagos State Government v. Toluwase (2013) 1 NWLR (Pt.1336) 55 A court must treat as sacrosanct the terms of an agreement freely entered into by the parties as parties to a contract enjoy their freedom to contract on their own terms so long as same is lawful. The terms of a contract between parties are clothed with some degree of sanctity and if any question should arise with regard to the contract, the terms in any document which constitute the contract are the invariable guide to its interpretation. The duty of the court, where a dispute arises between parties to a contract, is to construe the surrounding circumstances, including the written or oral statement, so as to effectuate the intention of the parties – Omega Bank (Nig) Plc v. O.B.C. Ltd (2005) 8 NWLR (Pt.928) 547, BFI Group Corporation v. Bureau of Public Enterprises (2012) 18 NWLR (Pt.1332) 209, Daspan v. Mangu Local Government Council (2013) 2 NWLR (Pt.1338) 203, Afrilec Ltd v. Lee (2013) 6 NWLR (Pt.1349) 1. — H.A.O. Abiru JCA.
⦿ WHERE WORDS USED IN A DOCUMENT ARE CLEAR AND UNAMBIGUOUS, COURT MUST GIVE LITERAL MEANING
It a trite and fundamental principle of interpretation that where the words used in a document are clear and unambiguous, the court must give the operative words in the document their simple, ordinary and actual grammatical meaning – Union Bank of Nigeria Plc v. Ozigi (1994) 3 NWLR (Pt.333) 385, Adewunmi v. Attorney General, Ekiti State (2002) 2 NWLR (Pt.751) 474, Daodu v. United Bank of Africa Plc (2004) 9 NWLR (Pt.878) 276, Egwwnewu v. Egeagwu (2007) 6 NWLR (Pt.1031) 431. Even more so, the court deals with the document according to the clear intention of the parties appearing in the four corners of the document itself; in other words, the courts goes for the words used in the document to arrive at the intention of the parties – Abbey v. Alex (1999) 14 NWLR (Pt.637) 146 and Isulight (Nig) Ltd v. Jackson (2005) 11 NWLR (Pt.937) 631. — H.A.O. Abiru JCA.
➥ LEAD JUDGEMENT DELIVERED BY:
Habeeb Adewale Olumuyiwa Abiru, J.C.A.
➥ APPEARANCES
⦿ FOR THE APPELLANT(S)
Ibrahim M. Boyi Esq.
⦿ FOR THE RESPONDENT(S)
Kayode Olantunji Esq.
➥ MISCELLANEOUS POINTS
➥ REFERENCED (LEGISLATION)
➥ REFERENCED (CASE)
➥ REFERENCED (OTHERS)
