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BFI Group Corporation v. Bureau Of Public Enterprises (2012) – SC

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➥ CASE SUMMARY OF:
BFI Group Corporation v. Bureau Of Public Enterprises (2012) – SC

by “PipAr” Branham-Paul C. Chima.

➥ COURT:
Supreme Court – SC.12/2008

➥ JUDGEMENT DELIVERED ON:
Friday, The 6th Day Of July, 2012

➥ AREA(S) OF LAW
Contract;
Auction.

➥ PRINCIPLES OF LAW
⦿ DEMEANOUR OV WITNESSES VIS-A-VIS DOCUMENTARY EVIDENCE
An appellate court should not ordinarily substitute its own views of fact for those of the trial court. See: Ebba v. Ogodo (1974) 1 SCNLR 372; Balogun v. Agboola (1974) 1 All NLR (pt. 2) 66.  Ascription of probative value to the evidence of witnesses is pre-eminently the business of the trial court which saw and heard the witnesses. An appeal court will not lightly interfere with same unless for compelling reasons. But where evidence has nothing to do with the demeanour of witnesses or relates to interpretation to be placed on documents tendered before the court, an appellate court will be in a good position to act accordingly. See: Ebba v. Ogodo (supra); Ogbechie Onochie (1998) 1 NWLR (Pt.470) 370. An appellate court will not interfere with findings of fact except where wrongly applied to the circumstance of the case or vital documents tendered were jettisoned or conclusion arrived at was patently perverse or wrong, See: Nwosu v. Board of Customs & Excise (1988) 5 NWLR (Pt. 93) 225; Nneji v. Chukwu (1996) 10 NWLR (pt. 378) 265. And where there is conflict in the evidence of witnesses, documentary evidence will serve as a hanger on which the truth shall be resolved. Documents tendered as exhibits are very vital as they do not embark on falsehood like some mortal beings. See: Olujinle v. Adeagbo (1988) 2 NWLR (Pt.75) 238. — J.A. Fabiyi, JSC.

⦿ COURT SHOULD TREAT AS SACROSANCT TERMS OF AGREEMENT BY PARTIES
It must be reiterated here that the court must treat as sacrosanct the terms of an agreement freely entered into by  the parties. This is because parties to a contract enjoy their freedom to contact 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 invariably the guide to its interpretation when parties enter into a contract, they are bound by the terms of the contract as set out by them. It is not the business of the court to rewrite a contract for the parties. See Afrotech Services Nig Ltd. v. M.A. & Sons Ltd. (2002) 15 NWLR (pt. 692) 730 at 788. — J.A. Fabiyi, JSC.

⦿ WHERE BY WORDS OR CONDUCT A PARTY HAS MADE THE OTHER PARTY CHANGE HIS STANCE
The position of the law still remains the same. It is that where by words or conduct, a party to a transaction freely makes to the other an unambiguous promise or assurance which is intended to affect the legal relations between them and the former acts upon it by altering his position to his detriment, the party making the promise of assurance will not be permitted to act inconsistently with it. This is as pronounced in Central London Property Trust Ltd. v. High Trees House Ltd. (1947) K.B. 130. It has remained good law for a long time now. I approve same without any reservation. — J.A. Fabiyi, JSC.

Available:  J.I. Okolo v. Midwest Newspaper Corporation & ORS. (1977)

⦿ A DIVISIBLE CONTRACT
A divisible contract is separable into parts, so that separate parts of the agreed consideration may be assigned to severable parts of the performance. Such divisible agreements admit of pro rata payments for each portion that was performed, and is independent of performance of other parts of the contract. — J.A. Fabiyi, JSC.

⦿ FINAL ADDRESS CANNOT MAKE UP FOR LACK OF EVIDENCE
It is not clear to me why the above submission of senior counsel to the respondent has come up. There is no evidence on record that Russal of Russia has taken possession of ALSCON and now fully operates it. Such forms part of address which is ordinarily designed to assist the court. It is not evidence and no fine speech in an address can make up for lack of evidence to prove or establish a fact or else disprove and demolish a point in issue. See: Niger construction Ltd. v. Okugbeni (1987) 4 NWLR (pt. 67) 738 at page 792. — J.A. Fabiyi, JSC.

⦿ WHAT US SPECIFIC PERFORMANCE?
What then is specific performance? It is the rendering as nearly as practicable of a promised performance through a judgment or decrees; a court ordered remedy that requires precise fulfilment of a legal or contractual obligation when monetary damages are inappropriate or inadequate as when the sale of real estate or a rare article is involved. In essence the remedy of specific performance enforces the execution of a contract according to its terms. (Black’s Law Dictionary, Ninth Edition page 1528). — J.A. Fabiyi, JSC.

⦿ COURT SHOULD PROVIDE REMEDY WHERE THERE IS A RIGHT
Both lower courts agreed that the factual situation in the transaction between the parties reveals a right vested in the appellant. The law is that the court must provide a remedy where the plaintiff has established a right. The court is also to look into the substance of an action and not the form. The appellant is entitled to a remedy and justice. — O.O. Adekeye, JSC.

➥ LEAD JUDGEMENT DELIVERED BY:
John Afolabi Fabiyi, J.S.C.

➥ APPEARANCES
⦿ FOR THE APPELLANT
Chief Wole Olanipekun, SAN.

⦿ FOR THE RESPONDENT
J.N. Egwuonwu.

➥ CASE FACT/HISTORY
This is an appeal against the judgment of the Court of Appeal, Abuja Division (”the court below” for short) delivered on 5th April, 2007 wherein it dismissed the appeal of appellant herein and affirmed the decision of the trial Federal High Court (‘the trial court’ for short) which found that there was no valid or enforceable contract between the parties herein capable of being enforced by the court.

At the trial court, the appellant, as plaintiff thereat, claimed against the defendant inter alia, the respondent herein, the following declaratory reliefs: – An order of declaration that the acceptance of the plaintiffs bid price of the sum of US $410 million for the acquisition of 77.5% shares as core investor in ALSCON by the defendant at the bid/auction sale of ALSCON sale held on 14/6/2004 constituted a binding contract between the parties.

The plaintiff at the trial court also sought for an order of perpetual injunction as follows:-  ”(k)  An order of perpetual injunction restraining the defendant, its servants, agents, privies, management or howsoever called from inviting any further biding for the sale and acquisition of ALSCON in violation of the contract between the plaintiff and defendant and or from negotiating to sale, (sic) selling, transferring or otherwise handing over the Aluminium Smelter company of Nigeria Limited (ALSCON) to any person or persons in violation of the contract between the plaintiff and the defendant.”

Available:  M. Iloabachie Esq. v Benedict N. Iloabachie (2005) - SC.137/2000

The Appellant had further appealed to this Court.

➥ ISSUE(S) & RESOLUTION(S)
[APPEAL ALLOWED]

I. Whether on a proper evaluation of both oral and documentary evidence adduced before the trial court, the lower court was right in affirming the finding of fact by trial court that there was no contract between the parties that is capable of being enforced by an order of specific performance?

RULING: IN APPELLANT’S FAVOUR.
A. PARTIES ALREADY AGREED ON THE FEE OF THE BID BOND, AND NOT WITHIN THE POWER OF THE COURT TO CHANGE IT
“The court below reasoned that the sum of US $1 Million bid bond was not sufficient to secure the performance of the obligation on the part of the respondent to perfect the transfer of ALSCON to the appellant. Consideration has been defined as the inducement to contract; the cause, motive, price or impelling influence which induces a contracting party to enter into a contract; the reason or material cause for a contract. Some right, interest or profit or benefit accruing to one party or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other. See: Richman v. Brookhaven servicing corporation 80 MISC 2d. 563, 363 NY. S. 2d 731, 733 (Black’s Law Dictionary 5th Edition page 277).  In this matter, the parties expressly agreed that the bid bond is US $1 Million. It was not within the province of the court below to query same as such would amount to dictating the terms of the contract to the parties. See: Spasco Vehicle & Hire Co. v. Alraine Nig Ltd. (1995) 8 NWLR (Pt. 416) 665 at 672.”

“The argument of the senior counsel for the appellant in this respect remained uncountered. The argument can well be put on its mettle. In view of the circumstances of this case, what transpired between the parties equates with a contract. The appellant’s bid at the auction sale was the preferred bid. It was accepted by the respondent which had been furnished with a bid bond of $1 Million as agreed.  There was a validity period of 180 days placed on the bid bond – Exhibit 4. The respondent must be made to keep to its words and honour.”

B. THE RESPONDENT HAD ALREADY CAUSED THE APPELLANT TO ALTER HIS POSITION
“The respondent in the transaction caused the appellant to alter its position from the beginning of the transaction up to 14th June, 2004 when the appellant was declared the buyer of ALSCON. This is confirmed in the extant evidence of DW1 that the event of 14th June, 2004 the financial bid opening, completed the sale of ALSCON to the appellant.  He testified that the respondent confirmed that the appellant had assembled, for the purpose of the purchase of ALSCON, an executive staff in its preparation to take over ALSCON. He also testified that the appellant engaged a technical partner in Daewoo for the purpose of taking over ALSCON. The requirement of a technical partner part of the technical bid conference of 20th May, 2004.  It occurs to me that to have treated the entire transaction as a mere declaration of interest that only amounts to an invitation to treat points to the fact that the court below did not take into account the peculiar, complex and segmented nature of the transaction. DW2 maintained that the sale of ALSCON was a very complex transaction.”

Available:  University Of Calabar v. Dr. Okon J. Essien (1996)

C. ABROGATING THE CONTRACT BY THE RESPONDENT WAS CONTRARY TO THE TERMS
“The reason given by the respondent for abrogating the contract was most unjustified. The reason is contrary to the agreement of parties contained in Exhibit 5. The insertion of the offensive clause that 10% bid price be paid within 15 days of the receipt of Exhibit 6 came after the financial bid opening held on 14th June, 2004. The unilateral alteration runs against sub paragraph (f) of Exhibit 5 – the sealed and agreed terms of the contract. The unilateral insertion of the offensive clause without mutual agreement of the appellant amounted to a breach of the contract between the parties.”

D. AN ENFORCEABLE CONTRACT WAS REACHED BY THE PARTIES ALREADY
“It must be reiterated that an enforceable contract was struck by the parties by acceptance of the appellant’s bid on 14th June, 2004. The consideration for same was the bid bond of $1 Million in favour of the respondent. The appellant was the winner at the bid by the fall of the hammer at the auction sale of 14th June, 2004 and its offer was approved NCP. The only aspect remaining is the putting of hands and seals on mutually agreed version of Exhibit 2 and due payment of the 10% bid price within 15 days of signing the agreed contract and the balance of bid price within 90 days.”
.
.
.
✓ DECISION:
“There is no doubt in my mind that an order of specific performance of the contract between the parties is clearly warranted and same is hereby ordered as prayed. The appeal is meritorious in the extreme. It is hereby allowed. The decisions of the two courts below are hereby set aside. The claims of the appellant at the trial court are hereby granted.”

➥ MISCELLANEOUS POINTS

➥ REFERENCED (CASE)
⦿ EFFECT OF A BID BOUND
Earlier in this judgment, I set out the contents of Exhibit 4 which is a performance bond or ‘a bid bond’. This court spelt out the effect of same in A.I.D.C. v. Nigeria L.M.G. Ltd. (2004) 4 NWLR (pt. 653) 494 at 503 as follows per Ayoola, JSC;-  ”Performance bonds are bonds made to secure the performance of a principal contract. Such bonds may be classified according to the obligation undertaken by the obligee. In some case, it is, in reality, a conditional guarantee, while in others, it may be what is described as an ‘on demand bond’ or, as it is sometimes called a first downward bond. If the performance bond is an ‘on demand bond’ as argued by the plaintiff, the defendant’s liability would follow merely on a demand for payment made in good faith without a need to prove the validity of the claim.”

➥ REFERENCED (OTHERS)

End

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