OKONGWU V. N.N.P.C.
| Pages | 118-138 |
118
NIGERIAN SUPREME COURT CASES
[1989] 3 N.S.C.C.
OKONGWU V. N.N.P.C.
5
STEPHEN E. OKONGWU
APPELLANT
V
NIGERIAN NATIONAL PETROLEUM CORP.
RESPONDENT
10
SUIT NO. SC 63/1987
SUPREME COURT OF NIGERIA
NNAEMEKA-AGU, J.S.C.
ESO,
J.S.C.
KARIBI-WHYTE,
J.S.C.
15
OPUTA,
J.S.C.
WALT,
J.S.C.
11th July, 1989
Contract- Breach of - Offer of alternative Job - Refusal - Effect.
20
Remedies- Damages - Assessment of
Practice and Procedure- Appellants brief - Non-refutal - Effect.
25
Words and Phrases- General and special damages.
ISSUES:
1.
Whether when one party has failed to fulfil his contractual obligation the other
party is bound to mitigate his loss.
30
2.
What is the basis for the award of damages in contract.
3.
What is the effect of a non-refutal of a point canvassed in an appellant's brief.
FACTS:
On the 17th of September, 1976, the N.N.P.C. offered the plaintiff, a master's
degree holder in chemical technology of oil and gas, a job on an initial salary of 35
N7,104 per annum. The plaintiff accepted the offer and resigned his previous
appointment with the petroleum Training Institute and paid them one month salary
in lieu of notice.
On the 6th of October, 1976 when the plaintiff reported for work in the defendant's
office he was informed that he could not commence work for several reasons.
40
The defendant however made three different offers for alternative employment to
the plaintiff which he rejected. The plaintiff eventually secured a job in August 1978
and so sued the defendant in the High Court for N3.5 million damages for breach of
contract. The trial judge held that since the defendant resiled, the plaintiff was
entitled to be put into the position he could have been if the contract had been 45
performed and so awarded the plaintiff N14,234.00 at N7,764.00 per annum for 22
months.
The defendant dissatisfied appealed and the plaintiff cross- appealed. The
defendant company contended that the period of 22 months used in computing the
damages due to the plaintiff by the trial judge did not take into account the dates 50
when the defendant company's representative requested the plaintiff to resume his
former employment at the Petroleum Training Institute. The Court of Appeal held
that the plaintiff's action in refusing the offers made to him, particularly the 3rd one,
was unreasonable since it was his duty to reduce his loss consequent upon the
breach.
OKONGWU V. N.N.P.C.
119
The Court of Appeal allowed
the defendant's appeal and estimated
10
months
as the period for which the plaintiff can claim damages which was N5,920.00. The
plaintiff cross appeal was dismissed.
The plaintiff dissatisfied and aggrieved has now appealed to this court against
5
the judgment of the Court of Appeal reducing the damages of N14,234.00 awarded
him by the trial court to N5,920.00
HELD:
1.
As a general law, the fundamental basis of assessment of damages for a breach
of contract is compensation for plaintiff's pecuniary loss naturally flowing from
10
the breach. That principle is qualified by a second, which imposes upon the
plaintiff the act of taking all reasonable steps to mitigate the loss consequent from
the breach. Acceptance of the offer made by persons in breach is reasonable
for the mitigation of the loss consequent upon the breach. However, the
reasonableness of the acceptance of the offer is predicated upon the
15
reasonableness of the offer and any conditions attached to it.
In
the instant case
the offer made to the plaintiff was not reasonable, and so the plaintiff was right in
rejecting it.
2.
There are two distinct arms for the award of damages the first is what flows
naturally and proximately from the breach and so is presumed to have been in
20
the contemplation of both parties at the time of the contract. The other is
deducible from the terms of agreement of the parties. In the instant case the
appellant would not be entitled to claim back the one month's salary he paid in
lieu of notice to the Petroleum Training Institute because such a damage was
neither natural and normal nor foreseeable from the terms of the agreement.
25
Therefore the period of 22 months it took the appellant to secure employment is
reasonable and fair for use in assessing damages payable to him from 15/10/76
- 3
1
/
3
/77 at N7,104.00 per annum and from 1/4/77 - 15/8/78 at N12,000.00 per
annum that being the salary he could have been on in N.N.P.C. with the new salary
structure.
30
3. That for every material point canvassed in an appellant's brief which is not
countered in the respondent's brief is deemed to have been conceded to the
appellant.
[As to
Award of damages
see
35
1.
Omonuwa v. Wahabi
(1976) N.S.C.C. Vol. 10 233]
2.
Swiss-Nigerian Wood Industries Ltd. v. Bogo
[1970] N.S.C.C. Vol. 6 235
3.
Maiden Electronics Works Ltd. v. A-G., Federation
[1974] N.S.C.C. Vol. 9.
[As to
the Effect of a non-refutal of a point canvassed
see
1.
Owosho & Ors. v. Dada
[1984] N.S.C.C. Vol. 15. 553.
40
2.
A.C.E. Jimona Ltd. v. Nigerian Electronic Contracting
Co.
Ltd
[1966] N.S.C.C.
Vol. 4. 135.
CASES REFERRED TO IN JUDGMENT:
1
British Westinghouse Electric & Manufacturing
Co. v.
Underground Electric
45
Railway
Co.
of London
(1912) A.C. 673 at 689.
2.
Brace v. Calder
3.
Shindler v. Northern Raincoat Co. Ltd.
(1960) 2 All E.R. 239 at 249.
4.
Payzu Ltd. v. Saunders
5.
Watson Node v. Shaw
III S.J. 117.
50
6.
Yetton v. Eastwoods Fray Ltd
(1966) 3 All E.R. 353 at 365.
7.
Pilkinton v. Wood
(1953) 2 All E.R. 81.
8.
Hadley v. Baxendale
(1854) 9 Exch. 34.
9.
Victoria Laundry (Windsor) Ltd. v. Newman Industries Ltd.
(1948) 1 All E.R.
997 at 1002 - 1003.
10.Koufos
v.
czornikow Ltd. (The Heron 11)
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