➥ CASE SUMMARY OF:
Chevron Nigeria Limited V. Lonestar Drilling Nigeria Limited (13 July 2007, SC.170/2002)
by Branham Chima (LL.B.)
➥ SUBJECT MATTER(S)
Cause of action.
➥ CASE FACT/HISTORY
The respondent (hereinafter referred to as the plaintiff) at the Warri High Court of Delta State brought a suit against the appellant (hereinafter referred to as the defendant) for special and general damages arising out of an alleged breach of contract for ten million United States dollars. The parties filed and exchanged pleadings.
The defendant, after the exchange of pleadings, brought an application praying for the following orders: “(1) An order of this honourable court setting down for hearing and det ermination, the points of law raised in the defendant’s statement of defence particularly paragraphs 15-22. (2) Based on prayer one above, an order dismissing the plaintiffs action for disclosing no reasonable cause of action and for being incompetent, frivolous and vexatious in the circumstance. (3) An order striking out this suit for lack of jurisdiction of this honourable court to entertain same.”
The trial Judge in his ruling on the defendant’s application which was delivered on 3/12/99 reasoned that the plaintiff’s suit disclosed a reasonable cause of action and that the writ of summons and statement of claim showed that the plaintiff’s claim was for a breach of contract and not founded in admiralty. The defendant was dissatisfied with the ruling. It brought an appeal before the Court of Appeal, Benin (hereinafter referred to as the court below). The court below on 4/4/01 dismissed the appeal. Still dissatisfied, the defendant has come on a final appeal before this court.
➥ ISSUE(S)
I. Whether or not the Court of Appeal was right in holding that the plaintiff’s action discloses a reasonable cause of action against the defendant/appellant?
II. Whether the Court of Appeal was right in holding that the plaintiff’s claim is contract and not admiralty thereby vesting the Delta State High Court with jurisdiction as against the Federal High Court?
➥ RESOLUTION(S) OF ISSUES
[APPEAL DISMISSED]
↪️ ISSUE 1: IN RESPONDENT’S FAVOUR.
[THERE IS A VALID CAUSE OF ACTION; WHETHER IT WILL SUCCEED IS NOT IN ISSUE NOW
‘The above averments from the statement of claim clearly made the point that the defendant led the plaintiff to believe that its (the plaintiff’s) commercial bid would be accepted and considered. The plaintiff placed reliance on that representation and incurred an expenditure of millions of dollars to import a drilling rig into Nigeria. The defendant later failed and or neglected to allow the plaintiff to submit a bid for the said rig. It seems to me that on those facts pleaded, the plaintiff had shown that, its contract with the defendant had been unlawfully breached. It was quite another matter whether those facts when set against the averments in defendant’s, statement of defence would succeed. But those facts in my humble view clearly entitled the plaintiff to a hearing on the merit of its case. The trial High Court was of the view, that the facts disclosed by the plaintiff entitled it to a hearing to determine the merit of its case. In the same manner the court below per Tobi JCA (as he then was) in its lead judgment observed: “I have thoroughly examined the action filed by the respondent (i.e. The plaintiff) and I do not agree with learned counsel for the appellant that there is no valid cause of action. There is. The action may succeed. It may fail. The court is not yet there. The court will decide at the end of the proceedings. For now there is a valid cause of action.” I am satisfied that the court below was right. The defendant, it would seem was in too much a hurry to have the plaintiff’s case terminated; and the plaintiff in the process driven away from the judgment seat before airing its case. That, it must be said, is not the way the court operates. A party ought not to be precluded from putting across his case in a full hearing except on the clearest indication that the action is denuded of all merits even on the supposition that the averments in the statement of claim are deemed as admitted by a defendant.’]
.
.
↪️ ISSUE 2: IN RESPONDENT’S FAVOUR.
[PLAINTIFF’S CLAIM IS IN CONTRACT, AND NOT IN ADMIRALTY
‘Appellant’s issue No. 2 raises the contention that the plaintiffs claim was an action in admiralty and that therefore, a State High Court has no jurisdiction to entertain same. The defendant would rather have the case heard by the Federal High Court. I reproduced above a substantial part of the averments in plaintiff’s statement of claim. These show that in its true essence, the claim was for a breach of contract. It has nothing to do with the admiralty jurisdiction of the Federal High Court. The court below decided the matter in these words: “I have carefully examined the claim and I am of the view that it is a claim in contract and has nothing to do with admiralty. It is clearly stated in the claim that it is for the sum of $10,000,000.00 (ten million U.S. dollars) as special and general damages. It is not an admiralty action. Whether the transaction is an invitation to treat or a contract will be decided by the Judge at the trial.”’
Per Mohammed: ‘The second issue for determination is on the jurisdiction of the trial court to entertain and determine the claims of the plaintiff. The fact that the transaction between the parties giving rise to the plaintiff’s claim involves the conveyance of the rig purchased from India to Nigeria by sea, does not give that transaction the character of an admiralty action. The court below is therefore right in its judgment now on appeal that reasonable cause of action has been disclosed in the plaintiff’s action which the trial court has jurisdiction to hear and determine.’]
.
.
.
✓ DECISION:
‘I agree with the views of the court below. This appeal has no merits. It is dismissed with ₦10,000.00 costs in favour of the plaintiff/ respondent.’
➥ FURTHER DICTA:
⦿ MEANING OF CAUSE OF ACTION
✓ I can do no more on the meaning of a ‘cause of action’ than call to mind the observation made by this court per Karibi- Whyte JSC in Bello v. Attorney-General of Oyo State (1986) 5 NWLR (Pt. 45) 828 at 876 thus: “I think a cause of action is constituted by the bundle or aggregate of facts which the law will recognize as giving the plaintiff a substantive right to make the claim against the relief or remedy being sought. Thus, the factual situation on which the plaintiff relies to support his claim must be recognized by the law as giving rise to a substantive right capable of being claimed or enforced against the defendant. In other words, the factual situation relied upon must constitute the essential ingredients of an enforceable right or claim – see Trower and Sons Ltd. v. Ripstein (1944) AC 254 at 263; Read v. Brown 22 QBD 128; Cooke v. Gill (1873) LR 8 CP 107; Sugden v. Sugden (1957) All ER 300; Jackson v. Spittal (1870) LR 5C p. 547. Concisely stated, an act on the part of the defendant which gives to the plaintiff his cause of complaint is a cause of action.” — Oguntade JSC.
✓ In Ibrahim v. Osim (1988) 1 NSCC 1184 at 1194, this court per Uwais JSC (as he then was) discussed the proper meaning of the expression ‘reasonable cause of action’ thus: “The question therefore is what is a ‘reasonable cause of action.’? The words ‘cause of action’ without the adjective ‘reasonable’ had been defined by this court in Savage and Ors. v. Uwechia (1972) 1All NLR (Pt. 1) 251 at 256, (1972) 3 SC 24 at 221. Where Fatayi-Williams JSC (as he then was) said: ‘A cause of action is defined in Stroud’s Judicial Dictionary as the entire set of circumstances giving rise to an enforceable claim. To our mind, it is, in effect, the fact or combination of facts, which give rise to a right to sue and it consists of two elements – the wrongful act of the defendant which gives the plaintiff his cause of complaint and the consequent damage. As Lord Esher said in Cooke v. Gill (1873) LR 8 CP 107 and later in Read v. Brown (1888) 22 QBD 128 (CA), it is every fact that it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court. See Kusada v. Sokoto Native Authority (1968) 1 All NLR 377 where the definition in Read v. Brown (supra) was referred to with approval.’
⦿ CAUSE OF ACTION HAS NOTHING TO DO WITH THE DEFENDANT’S DEFENCE
The question that follows is: Looking at the facts pleaded by the plaintiff in support of its claim, can it be said that the case at all events has no reasonable chance of success? It needs be said here that the proposition that a plaintiff has no reasonable cause of action can only be made upon an examination of the facts pleaded in the statement of claim. It has nothing to do with the nature of the defence which the defendant may have to the plaintiff’s claim. The court must therefore confine itself only to the averments in the statement of claim in the assessment of whether or not the plaintiff has a reasonable cause of action. See Shell Petroleum Development Co. of Nigeria Ltd. and Ors. v. Onasanya (1976) 6 SC 89, 94. — Oguntade JSC.
⦿ A CAUSE OF ACTION IS THE AGGREGATE OF FACTS
the law is indeed well settled that a cause of action is constituted by the bundle or aggregate of facts which the law will recognise as giving a plaintiff a substantive right to make the claim against the relief or remedy being sought. In other words the factual situation on which the plaintiff relied to support his claim, must be recognised by the law as giving rise to a substantive right capable of being claimed or enforced against the defendant. That is to say, the factual situation relied upon must constitute the essential ingredients of an enforceable right. See Bello v. Attorney-General of Oyo State (1986) 5 NWLR (Pt. 45) 828 and Ibrahim v. Osim (1988) 1 NSCC 1184 at 1194. — Mohammed JSC.
⦿ CAUSE OF ACTION HAS TO BE RESOLVED BY TAKING A LOOK AT THE STATEMENT OF CLAIM
It is therefore settled that a cause of action constitutes a bundle of facts and circumstances giving rise to the plaintiff’s enforceable claims against the defendant. The facts and circumstances have to be as pleaded in the statement of claim. See Ibrahim v. Osim (1987) 4 NWLR (Pt. 67) 965. And so, it has to be ascertained by having recourse to the statement of claim. As can be seen from the definition, the proposition resolves into two crucial factors thus:- the defendant’s wrongful act and the consequential damage to the plaintiff. These two factors must co-exist to constitute a cause of action before the court. It does not take account of whether the cause of action will succeed or fail. A cause of action is valid irrespective of the strength or weakness of the plaintiff’s case. See: Eseigbe v. Agholor (1990) 7 NWLR (Pt. 161) 234. — Chukwuma-Eneh JSC.
⦿ WHETHER CAUSE OF ACTION WILL SUCCEED IS IMMATERIAL TO JURISDICTION
To begin with, the foregoing averments bear out clearly the representation of facts made to the plaintiff and estoppel establishing legal relationship between the parties so that if proved it will give rise to judgment for the plaintiff. There is in this sense a cause of action. See Eastern Distributors v. Goldring (1957) 2 QB 600 on section 21 of the Sale of Goods Act 1893 also Hopgood v. Brown (1955) 1 WLR 213 per Evershed MR and Armstrong v. Sheppard and Short Ltd (1959) Ch. 384 at 399. These cases have taken their bearing from the classic case of Low v. Bouvrie (1891) 3 Ch. 82. The question of the plaintiff having raised a reasonable cause of action on the pleaded facts in the statement of claim on the backdrop of the cases cited above is beyond question. The paragraphs of the statement of claim reproduced above bear out clearly the wrongful act of the defendant and the consequential damages suffered by the plaintiff. Whether or not the cause of action will succeed is entirely a different kettle of fish. At least, the parties are afforded the opportunity to prove their case and the court, the duty to decide on the matter. In my view the statement of claim discloses a reasonable a cause of action. Issue one is therefore resolve in favour of the respondent. — Chukwuma-Eneh JSC.
➥ LEAD JUDGEMENT DELIVERED BY:
Oguntade JSC
➥ APPEARANCES
⦿ FOR THE APPELLANT(S)
⦿ FOR THE RESPONDENT(S)
➥ MISCELLANEOUS POINTS
➥ REFERENCED (LEGISLATION)
➥ REFERENCED (CASE)
➥ REFERENCED (OTHERS)
