Simple Contracts involving Ships: Exclusion from Admiralty Jurisdiction of the Federal High Court
Facts
The Respondent, a limited liability company engaged in the business of marine construction and equipment leasing, instituted an action against the Appellant at the High Court of Rivers State. It was the case of the Respondent at the trial court, that sometime in February 1997, it entered into a contract with the Appellant for the supply of a houseboat for the temporary use of the Appellant's staff, and it was agreed that the Appellant would make an advance payment of N6,288,000.00, representing the rental value of the houseboat for two months and the cost of transporting it from Warri to Bonny. It was also agreed that, certain modifications were to be made to the houseboat before delivery. The Respondent also contended before the trial court that, at the request of the Appellant and at a higher cost, that after the houseboat was delivered, it was further upgraded to a higher standard. However, upon the completion of the modification, the Appellant refused to settle the Respondent's bill, and the houseboat remained in the Appellant's possession for 148 days, before the Respondent was forced to retake possession of it.
Further to this, the Respondent sought inter alia N14, 800,000.00, representing the rental value of the houseboat, for the period of 148 days that the houseboat was in the custody of the Appellant. The Respondent also sought special and general damages. At the conclusion of trial, the trial court entered judgement in favour of the Respondent, and awarded special damages in the sum of N12,000,000.00, the sum of N6,288,000.00, which was the sum the Appellant ought to have paid in advance before or at the delivery of the houseboat, and the sum of N8,800,00.00, representing the cost of daily hire of the equipment for 2 months and 28 days, as contained in an invoice presented before the court.
Dissatisfied, the Appellant appealed to the Court of Appeal which allowed the appeal in part, and set aside the part of the trial court's judgement awarding special damages in favour of the Respondent. Still dissatisfied, the Appellant instituted a further appeal at the Supreme Court.
Issues for Determination
The Appellant formulated three issues for determination, but essentially the Supreme Court adopted the following two issues in its resolution of the appeal, as follows:
1. Whether the High Court of Rivers State, had the requisite jurisdiction to entertain Suit No. PHC/1414/98.
2. Whether the Court of Appeal properly evaluated the evidence adduced in the trial court, before arriving at the conclusion that the Respondent was entitled to the award of N6,288,000.00 as money which ought to have been paid, either before or at the delivery of the houseboat.
Arguments
In his submission on the first issue, counsel for the Appellant referred to the provisions of Section 251(1) (g) of the 1999 Constitution of the Federal Republic of Nigeria, which confers jurisdiction in admiralty matters on the Federal High Court, and argued that the houseboat which formed the basis of the agreement between the Respondent and the Appellant, falls squarely within the definition of a ship, and an agreement for the hire of same, is an agreement for the hire of a ship. He submitted that, by a combined reading of Section 251(1) (g) of the 1999 Constitution and Sections 1(1) (a) and 2(3) (f) of the Admiralty Jurisdiction Act, the Respondent’s claim falls within the exclusive admiralty jurisdiction of the Federal High Court, and in this regard, the High Court of Rivers State wrongly exercised jurisdiction in entertaining the matter. Counsel for the Appellant therefore, urged the Supreme Court to find and declare the proceedings conducted by the High Court of Rivers State, a nullity.
In response, counsel for the Respondent submitted that, it is the Claimant’s claim as endorsed in the writ of summons and statement of claim, that a court considers to determine whether or not it has jurisdiction to entertain an action. He relied on ATTORNEY GENERAL OF THE FEDERATION v GUARDIAN NEWSPAPERS LTD (1999) 5 SC (Pt. III) 59. He argued that, in determining whether the subject matter of the appeal falls within the jurisdiction of the High Court of Rivers State or that of the Federal High Court, a critical appraisal of the claims endorsed on the Respondent's writ of summons and statement of claim, together with the constitutional provisions establishing both courts, is imperative.
On the second issue, counsel for the Appellant submitted that, the evidence adduced at the trial court, shows that the intention of the parties was that the Appellant would accept to hire the houseboat upon fulfilment of certain conditions, being the provision of additional facilities and conditions of same upon delivery at an agreed date. Counsel for the Appellant argued that, there was also evidence showing that the Appellant had intended the houseboat as a temporary accommodation, pending completion of its camps and that the agreed delivery date was 7th March, 1997. However, the Respondent failed to deliver it on the stipulated date, and when it was delivered, it was delivered in an unsatisfactory state, as the Respondent failed to carry out the modifications stipulated by the Appellant, and the Appellant’s camp were in fact ready for occupation and were indeed occupied. He submitted that, there was a qualified acceptance of the offer by the Appellant.
Counsel for the Respondent submitted on the other hand that, the submission of the Appellant that there was a qualified acceptance of the houseboat, was not supported by the evidence adduced before the trial court, or exhibits before the court.
Court’s Judgement and Rationale
On the first issue, the Court relying on its decision in Trade Bank Plc v Banikys (Nigeria) Ltd. (2003) 5 SC 1, held that it is only on careful examination of the pleadings filed by the parties in a matter, namely, the statement of claim not the defence, that the court can ascertain whether or not the court has jurisdiction. The Court referred to the claims of the Respondent and the facts pleaded in respect of same, as contained in its amended statement of claim, and held that same showed that the transaction between the Appellant and the Respondent which formed the basis of the claim, was that of a hire agreement, a simple contract, which was breached by the Appellant. The Supreme Court held that, the action filed by the Respondent at the trial court was for the recovery of accrued and unpaid hire rentals for a houseboat let to the Appellant by the Respondent, and damages for breach of contract. The Court further held that, the mere fact that the Admiralty Jurisdiction Act defines a ship as a vessel of any kind used for navigation in whatever, including a large, lighter or floating vessel, cannot convert an agreement for hire of a houseboat into an admiralty matter, neither does the mere fact that a ship is involved in a simple contract, automatically make that simple contract a subject for jurisdiction in admiralty matters. The Court placed reliance on Texaco Overseas Nigeria Petroleum Company Unlimited v Pedmar Nigeria Ltd (2002) 7 SC (PT. 11) 22; American International Insurance Co. Ltd v Ceekay Traders Ltd (1981) 5 SC 81. The Apex Court held that, the instant case which is that of debt recovery on a simple contract, falls within the civil jurisdiction of the High Court of Rivers States as provided under Section 272 of the 1999 Constitution, and it properly assumed jurisdiction on the matter.
On the 2nd issue, the Court held that assessment of evidence and ascription of probative value, is the primary duty of a trial court and not the business of the Court of Appeal (unless in exceptional circumstances), and the only assignment expected of an appeal court in an appeal before it, is to review among other things, the evidence and the whole proceedings of the trial court. The Court held that, from the record of appeal, it was clear that the Court of Appeal reviewed the pleadings of the parties, the evidence on record in relation to the findings of the trial court on the formation of a contract between the parties, and the delivery of the houseboat. The Court of Appeal in its review also rightly observed that, there was neither any evidence before the trial court that the refurbishment of the houseboat was a condition precedent to any contract between the parties, nor was there any stipulation as to the delivery date. The Apex Court held that, the submission of the Appellant that there was a qualified acceptance of the houseboat by it, does not flow from the evidence, and there was also a finding of fact by the two lower courts supported by evidence, that it was the Appellant who was responsible for the breach of the contract which caused loss to the Respondent. The Court held that, in view of the concurrent findings on the issue by the lower courts, it found no error which shows that the lower court's concurrent decision was unsupportable by evidence, or that it had been reached on the wrong application of law or procedure.
Appeal Dismissed.
Representation
Dayo Ayoola Johnson with Ayokunle Adesomoju, for the Appellant
Collins N. Oluobor Esq., for the Respondent
“THE MERE FACT THAT A SHIP IS INVOLVED IN A SIMPLE CONTRACT, DOES NOT AUTOMATICALLY MAKE THAT SIMPLE CONTRACT A SUBJECT FOR JURISDICTION IN ADMIRALTY MATTERS. TO HOLD THAT SUPPOSITION, WILL BE RIDICULOUS”