QUO VADIS HOTELS AND RESTAURANTS LTD v. NIGERIAN MARITIME SERVICES LTD (SC 138/1988) [1992] 7 (17 July 1992);

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IN THE SUPREME COURT OF NIGERIA

ON FRIDAY, THE 17TH DAY OF JULY 1992

SC 138/1988

BETWEEN

QUO VADIS HOTELS AND RESTAURANTS LTD ..................................................... PLAINTIFF/APPELLANT

AND

NIGERIAN MARITIME SERVICES LTD ............................................................. DEFENDANT/RESPONDENT

BEFORE: Muhammadu Lawal Uwais; Saidu Kawu; Abubakar Bashir Wali; Olajide Olarewaju Olatawura; Shehu Usman Mohammed, JJSC

ISSUES

Whether the Court of Appeal had been correct in holding that breach of contract between a principal and its agent could not be entertained as an action for damages in tort?

Whether the Court of Appeal had been correct in holding that a principal could not succeed in an action for damages against its agent when the principal had knowledge of, and actively participated in, the agent's illegal actions?

 

FACTS

The plaintiff had (illegally) imported 1000 cartons of French champagne into Nigeria and appointed the defendant as its warehousing agent. The plaintiff paid a portion of the duties in respect of the consignment, but accepted the release of the remainder of the consignment, by the defendant to the plaintiff, without the additional duties having been paid. This led to the confiscation by the authorities and forfeiture of 300 cartons of the champagne.

The plaintiff succeeded in its action in the trial court and was awarded damages for loss incurred, as the holding of the trial court is that the defendant had acted in breach of its duty of care for releasing the consignment with the full knowledge that the necessary duties imposed by the Customs and Excise Management Act had not been paid. The Court of Appeal upheld the defendant's appeal against that finding and this was a further appeal to the Supreme Court, by the plaintiff, against the decision of the Court of Appeal.

 

HELD (Unanimously dismissing the appeal)

1.      On the cause of action

The plaintiff had incorrectly based its claim on negligence while its claim actually lay in contract in view of the contractual relationship between the plaintiff (principal) and its agent, the defendant. Damages could have been awarded for breach of contract, but not for negligence. Mohammed, JSC, at page 529.

 

2.      On a claim based on an illegal act

The plaintiff had been fully aware of the defendant's illegal removal of the goods, the necessary duty not having been paid. The plaintiff had therefore actively participated in and had been a party to the defendant's illegal activities. Thus, a principal who had been a participating party to its agent's illegal actions could not maintain an action in tort (for breach of duty) against its agent. Mohammed, JSC, at page 529.

The plaintiff sought to benefit from an illegal act which it knew to be illegal, encouraged and took part in it. Where the court is aware of such illegalities, it can not turn a blind eye. Olajide Olatawura, JSC, at page 536.

O Oyewole (with Dr ADO Badina) for the Appellant

Chief F A Akinbishehin, SAN (with C O Akinbishehin and Y I Elendu) for the Respondent

 

The following cases were referred to in this judgment:

Nigeria

Agwuneme v Eze (1990) 3 NWLR (Part 137) 242

Bornu Holding Co Ltd v Alhaji Hassan Bogoco (1971) Vol. 7 NSCC 321

Duruminiya v Commissioner of Police (1961) NRNLR 70

George v Dominion Flour Mills (1963) 3 NSCC 54

Idehen v Idehen (1991) 6 NWLR (Part 198) 382/424

Okagbue v Romain (1982) 13 NSCC 130

Owe v Oshibanjo (1965) 1 All NLR 72

R v Wilcox (1961) All NLR 631

Sodipo v Lemmin Kainen OY (1986) 1 NWLR (Part 15) 220

 

Foreign

North Western Salt Co v Electrolytic Alkali Co [1914-15] All ER 725

 

The following statutes were referred to in this judgment:

Customs and Excise Management Act, 1958: Ss 72-87, 79, 136, 136(2), 137

 

The following book was referred to in this judgment:

Law of Agency, Fridman, at 26-32

 

Mohammed, JSC (Delivered the Leading Judgment):- The plaintiff/appellant commenced action in tort in a Lagos High Court against the defendant/respondent claiming, vide paragraph 14 of its statement of claim the following reliefs:-

Particulars of Damage

1.      Cost of 300 cartons of Taittinger Champagne at N7,000 per carton (C&F)             N21,000.00

2.      Cost of Custom Duties paid on 300 cartons                                                            8,357.00

3.      General Damages                                                                                                     20,000.00

Total         =             N50,000.00

The plaintiff's case was predicated on negligence and paragraph 12 of the statement of claim averred as follows:-

"12.    The defendants by their negligence committed warehouse irregularities thereby incurring penalties and forfeiture of 300 cartons of the plaintiff's Taittinger Champagne

Particulars of Negligence

(a)     Failing to take any or adequate or effective measure to ensure that customs duties payable on all the 1,000 cartons of Taittinger Champagne were paid over to the Department of Customs & Excise within a reasonable time.

(b)     Failing to use their expertise (sic) knowledge to avoid incurring liabilities in the process of clearing the goods.

(c)     Committing warehousing irregularities which led to the forfeiture of 300 cartons of Taittinger Champagne from their bonded warehouse.

(d)     Releasing all the 1,000 cartons of Taittinger Champagne to plaintiff when the defendant knew or ought to know that it was not proper to so release the goods at the time they did.

(e)     Failing to ensure that 300 cartons of Taittinger Champagne belonging to the plaintiff were not forfeited for warehouse irregularities committed by defendants."

The defendant in paragraph 4 of its amended statement of defence denied the averments in paragraphs 9, 11, 12, 13 & 14 of the statement of claim and put the plaintiff to the strict proof of same. Paragraph 5 of the amended statement of defence also denied the averment in paragraph 4 of the statement of claim and went on to aver that the defendant exercised reasonable care, diligence and competence in performing the contract.

At the end of the trial Johnson J (as he then was) entered judgment for the plaintiff in items 1 & 2 of its claim and awarded N2,000 as damages for item 3.

On appeal to the Court of Appeal, the decision of the trial court was set aside and the plaintiff's claim was dismissed in its entirety. This appeal is against the decision of the Court of Appeal.

In the brief of argument filed on behalf of the plaintiff the following issues were formulated as being the issues for determination by this Court, namely:-

(a)     Was the Court of Appeal right in holding that the defendant did not owe the plaintiff any duty of care?

(b)     Was the Court of Appeal right in holding that the plaintiff was a party to illegality and hence was barred from relief by the Courts?

(c)     Was the Court of Appeal right in holding that the special damages were not proved?

The issues formulated in the defendant's brief would appear, on close examination, to be similar, if, in effect not the same with those formulated for the plaintiff. Chief Akinbisehin adopted issue (b) and because of the attempt to distinguish the remaining two issues, I reproduce them hereunder, at least for the purpose of clarity:

(a)     Did the appellants establish negligence or breach of duty of care (if any) owed to the plaintiffs/appellants which resulted in damages, having regard to the pleadings and evidence on record?

If the answer to the question is in the negative was the Court of Appeal not correct to have held that the particulars 12(b), (c) and (d) have not been proved.

If the answer to the question is in the affirmative was the Court of Appeal not correct in holding that the plaintiff was a party to illegality and hence was barred from the relief sought from the court.

(b)     Was the Court of Appeal correct in holding that the item of special damages awarded were not proved, having regard to the totality of the evidence and materials placed before the Court, in particular to Exhibits 'Q' & 'R'?

On plaintiff's issue (a), ie whether the Court of Appeal was right in holding that the defendant did not owe the plaintiff a duty of care, it was contended that the Court of Appeal confused the question of the existence of the duty of care with the question whether that duty had in fact been breached. It was further contended that in its analysis of the relationship between the parties the Court of Appeal failed to appreciate the core of the plaintiff's case, to wit, that the breach of the duty of care was the non-payment of the customs duty by the defendant. It was emphasised that the portion of the judgment of the Court of Appeal where it held that:

"Is the respondent in such a legal relationship to the appellant in the Atkinian sense of a neighbour to whom a duty of care, the duty as to the removal of goods without payment of customs duty? Put in another way, does the non-payment of duty create the duty of care by the appellant the breach of which resulted in damage to the respondent? What is the relationship of the appellant and the respondent under the Customs and Excise Management Act 1958 and can there be said to be a statutory duty owed by the appellant to the respondent which has been breached by non-payment of customs duty on respondent's goods and thereby resulted in damage to the respondent."

amounted, in effect, to the court asking itself whether the breach of a duty of care could create that duty of care and that this approach, which led to the decision, was clearly wrong particularly bearing in mind that the court did not advert its attention to the admission by the defendant of the averment of the plaintiff in paragraph 4 of its statement of claim. It was finally argued that the Court of Appeal erred by introducing and discussing the issue of vicarious liability which neither party raised nor relied upon.

The plaintiff's brief went further to complain about the lower court's reference to and application of Sections 73-78 and 136 and 137 of the Customs and Excise Management Act, 1958. While the brief discussed, at some length, the provisions of Sections 136 and 137 of the Act, it failed to pin point the areas where the Court of Appeal went wrong on Sections 73-78 of the Act.

Reference was made to Fridman's Law of Agency, pages 26-32 articulating that the concept of agency relates to property and contractual rights and has only limited relevance in tort. Reliance was placed on this position of the law to support the argument that the Court of Appeal was wrong in holding that the defendant was not negligent in the performance of its side of the contract.

On issue (b), ie whether the plaintiff was a party to the defendant's illegality, the brief cited the judgment of the lower court on page 153, line 31-31 and concluded that that was not a correct statement of the law; that the correct statement of the law is as stated in Sodipo v Lemmin Kainen OY (1986) 1 NWLR (Part 15) 220 at pages 232-233 paragraphs C to F. The brief then summarised the ratio in the Sodipo case as being (a) When a contract is ex facie illegal and (b) When it is not ex facie illegal. In (a) the illegality need not be pleaded as a court would not close its eyes against an illegality as it is the duty of the court to refuse to enforce an illegality. In (b) however, where the illegality depends on the surrounding circumstances, then, as a general rule the court will not entertain the question unless it is raised in the pleadings. If, in such circumstance, evidence is led in support of the unpleaded illegality, such evidence goes to no issue and ought to be disregarded.

In addition to the Sodipo case the brief cited the following three other authorities:- George v Dominion Flour Mills (1963) 3 NSCC 54 at page 57; Okagbue v Romain (1982) 13 NSCC 130 at page 137-138; and North Western Salt Co v Electrolytic Alkali Co [1914-15] All ER 725.

Having stated the position of the law the brief then went on to argue that the illegality in the instant case, not being ex-facie, was not pleaded and that any evidence led in its support ought to have been disregarded as going to no issue.

The final issue taken up in the brief was on damages and the portion of the judgment of the Court of Appeal where it held that:

"no evidence was led to show the value of the naira equivalent of French francs and that the figure of N70 per carton used by the trial court was a mystery."

was attacked. In addition the brief attacked that finding of the Court of Appeal to the effect that there was no evidence that customs duty was paid. The evidence of PW1, Exhibit 'C', the invoice for the whole consignment of 1,000 cartons showing the total cost price to be 380,428.60 French francs, and Exhibit 'D', the debit note by the plaintiff's bank in respect of the consignment showing the total price of the whole consignment to be 380,428.60 French Francs at N7.60 = N50,556.39 were relied upon to support the submission that by the above calculations the naira equivalent of the forfeited 300 cartons was N15,061.92 inclusive of other costs, such as bank charges, clearing costs, customs duty, etc. It was also argued that based on the above calculations and the evidence of PW1 the open market selling price of N9.50 per bottle had been amply proved.

On the question whether or not duty had been paid the brief cited paragraph 16(a) of the statement of defence where the defendant was alleged to have admitted receipt of the customs duty from the plaintiff and that in such a situation it was unnecessary for plaintiff to prove same.

In his oral arguments, Mr O. Oyewole, for the plaintiff, adopted his brief and cited Agwuneme v Eze (1990) 3 NWLR (Part 137) 242 at page 256 paragraphs c and d; and Idehen v Idehen (1991) 6 NWLR (Part 198) 382 at page 424 paragraph 9, page 432-433 on the issue of illegality. Section 79 of the Customs and Excise Management Act was also emphasised.

In the defendant's brief of argument on the issue of negligence and breach of duty of care it was argued that the Court of Appeal properly considered and correctly concluded that on the totality of the evidence, negligence had not been proved. It was further argued that the Court of Appeal, in discussing the issue of negligence did not in any way confuse itself as to whether or not non-payment of customs duty created a duty of care on the part of the defendant. The brief went on to submit that the discussion by the Court on the general principles of the law of negligence and the existence and breach of the duty of care could not be faulted.

Reference was then made to paragraph 12(c), (d) and (e) of the statement of claim which the Court of Appeal held had not been proved by evidence based on the fact that issues were joined in the pleadings.

Reference was further made to Sections 136(2) and 137 of the Customs & Excise Management Act, 1958 and paragraph 10 of the amended statement of defence to support the submission that the legal relationship between the parties was that of principal and agent. It was then contended that the consideration of Part iv, Sections 72-87 and 136 and 137 of the Customs and Excise Management Act, 1958 by the Court of Appeal was pertinent and relevant to a just decision of the appeal in that Court. The Act clearly makes a principal equally liable for any offence committed by an agent. In this regard it was argued that the illegal removal and handing over of all the 1000 cartons of champagne from the bonded warehouse to the plaintiff, with its active connivance and knowledge, rendered the plaintiff equally liable for the warehousing irregularities which resulted in both parties being penalised by the Customs Department.

On the argument of the plaintiff in the brief that illegality had not been pleaded it was submitted by reference to paragraph 12(c), (d) and (e) of the statement of claim that it had been pleaded.

Indeed it was as a result of this that illegality was used in different forms and at different stages of the record. It was emphasised that paragraphs 10 and 13 of the statement of defence joined issues on the averment in paragraph 12(c), (d) and (e) of paragraph 12 of the statement of claim. It was finally submitted on this issue that the lower court had stated the law on illegality correctly and correctly applied it.

On the last issue of damages reliance was placed on the absence of any evidence on the rate of exchange of French francs to Naira which ought to form the basis from which a conversion of the cost of the champagne from francs to naira could be made. Reliance was also placed, in relation to the customs duty, on Exhibits 'Q' and 'R', being payment of duty on 700 cartons and demand for underpayment.

And in his oral arguments Chief Akinbisehin emphasised the failure of the plaintiff to prove negligence which the lower court found. He then went on to argue that paragraphs 12(b), (c) and (d) of the statement of claim clearly pleaded illegality and that defendant joined issues in paragraph 4 of the statement of defence. His final submission on this was that the plaintiff failed to prove this averment and that the lower court was perfectly justified in so holding.

Learned Counsel argued that damages too had not been proved.

Mr Oyewole, for the plaintiff, made a lot of fuss about negligence and whether the defendant owed a duty of care to the plaintiff and whether or not that duty had in fact been breached. At the onset of this judgment I pointed out that the plaintiff's claim, all along, was based on negligence. In my view it should have been based in contract since the relationship between the parties was purely contractual, they being principal and agent. It therefore follows that any breach of the agreement between the parties should have been a claim for breach of the contract which could be remedied, inter alia, by the award of damages. I have no doubt whatever in my mind that the plaintiff's remedy lay in a claim for breach of contract and not in a claim for damages in negligence. Accordingly all the discussion by the Court of Appeal, all the arguments of both learned Counsel on the subject of negligence, existence and breach of the duty of care was a complete wrong approach. With utmost respect, if the learned trial Judge and the Justices of the Court of Appeal had correctly adverted their minds to the true legal relationship of the parties, they would have appreciated this point.

Be that as it may, suppose the claim could properly have been brought in tort, the issue of illegality would have settled the dispute of the parties. The argument of Mr Oyewole that illegality had not been pleaded is not tenable, having regard to paragraphs 12(c), (d) and (e) of the amended statement of claim and paragraphs 8, 9 and 10 of the amended statement of defence. There was a clear and uncontradicted evidence that the plaintiff was a party to the removal of all the cartons of champagne with the knowledge that duty had not been paid on them. Indeed when it became obvious to the plaintiff that its participation in the illegal removal of the champagne would cause financial loss to it, Mr Barve, plaintiff's General Manager addressed Exhibit 'H' to the Director, Board of Customs pleading for the release of the seized cartons of champagne. Exhibit 'H' is further proof that plaintiff knew that importation of champagne into the country was banned. There was also evidence that in addition to Exhibit 'H'. Mr Barve and a staff of the defendant visited the Customs Department on a few occasions to discuss the release of the imported but banned goods - see Exhibits 'J' and 'H' and the evidence of DW1. There could not be any doubt that the plaintiff was an active party in the illegal act of the defendant. In these circumstances the question that readily comes to mind is whether a principal, who is an active and willing party to an illegal act of his agent, can maintain an action in tort against the agent in a transaction in which a legislation makes the principal equally liable for that illegal act? The answer to this question must be and is in the negative. I am of the firm view that the Court of Appeal was right in holding that the plaintiff, having actively participated in the defendant's illegal act should not be allowed to reap any benefit from that illegal act.

This ought to dispose of the appeal but for the issue of damages over which Mr Oyewole, for the plaintiff, raised so much dust. I have compared the submissions of learned Counsel with the evidence adduced at the trial court and the judgment of both lower courts and have come to the conclusion that the Court of Appeal was right in its conclusion that "no evidence was led to show the value of the naira equivalent of French francs and that the figure of N70 per carton used by the trial court was a mystery."

Mr Oyewole in his arguments relied on the evidence of PW1, and Exhibits 'C' and 'D' for the submission that the combined effect of these was to show the naira equivalent of French Francs. Clearly the evidence of PW1 did not state the rate of exchange of French francs to the naira. The contents and entries in Exhibits 'C' and 'D' were not brought out and examined in open court by the witness in his evidence in chief or in cross-examination. Indeed there is nothing in the record to suggest that the learned trial Judge relied on Exhibits 'C' and 'D' to convert the cost of the goods from French Francs into naira. No such exercise was done by any of the witnesses or by the trial Judge.

The arguments of Mr Oyewole would appear to suggest that the Court of Appeal should have examined the entries in Exhibits 'C' and 'D' and come up with the naira equivalent of French Francs. Learned Counsel did not urge the trial court or the Court of Appeal to undertake such exercise. If such exercise was performed by either court, it would have been wrong as it would have amounted to doing what the ratio in Muhammadu Duruminiya v Commissioner of Police (1961) NRNLR 70, approved and adopted by this Court in Bornu Holding Co Ltd v Alhaji Hassan Bogoco (1971) Vol. 7 NSCC 321 at page 325 says a court should not do.

See also R v Wilcox (1961) All NLR 631 at page 633, and Owe v Oshibanjo (1965) 1 All NLR, 72 at page 75 on the same point.

The result of all this is that the appeal lacks merit and it is hereby dismissed. The decision of the Court of Appeal setting aside the decision of the trial court and dismissing the plaintiff's claim is hereby affirmed with N1,000 costs to the defendant.

 

Uwais, JSC:- I have had the opportunity of reading in draft the judgment read by my learned brother, Mohammed, JSC. I entirely agree with him that the appeal lacks merit. I too will, therefore, dismiss it with N1,000.00 costs to the respondent.

 

Kawu, JSC:- I have had the advantage of reading, in draft, the lead judgment of my learned brother, Mohammed, JSC which has just been delivered. I am in complete agreement with his reasoning and his conclusion that the appeal lacks merit and should be dismissed. The evidence shows quite clearly that the plaintiff participated actively in the defendant's illegal act and that being so, the Court of Appeal was right in its conclusion that the plaintiff should not be allowed to benefit from its participation in an illegal transaction. I too will dismiss the appeal and affirm the decision of the Court of appeal with N1,000 costs awarded to the respondent.

 

Wali, JSC:- I have had the privilege of reading in draft, the lead judgment of my learned brother Mohammed, JSC. I entirely agree with his reasoning and conclusion that the appeal has no merit.

For the same reasons stated in the lead judgment, I also dismiss this appeal and abide by the consequential orders contained in the lead judgment.

 

Olatawura, JSC:- I had a preview of the judgment of my learned brother Mohammed, JSC just delivered. I agree with his reasoning and conclusion. I wish to highlight and reemphasise some facts and points already discussed by Mohammed, JSC in the lead judgment.

The appellant who was the plaintiff in the Lagos High Court instituted an action against the respondent who was the defendant for the breach of oral agreement made between the two of them in December 1976. Their relationship as principal and agent dated back to 1974. It was by an oral agreement that the appellant appointed the respondent its clearing agent in respect of 1,000 cartons of Taittinger Champagne ordered by the appellant. The said 1,000 cartons of champagne were cleared and stored in the respondent's bonded warehouse and eventually released to the appellant at its request. As a result of the representation made by the respondent 300 cartons out of these 1000 cartons were released to the respondent on the ground that the Board of Customs and Excise wanted to make a physical inspection of the already delivered goods. These 300 cartons of champagne were never returned to the appellant and it was as a result of the respondent's failure to return them that the appellant instituted the action. The particulars of damages suffered had already been set out in the lead judgment. The appellant denied any knowledge of any gallonage or litterage query on the consignment until the action was filed in court. It was agreed by both parties that on arrival of the goods to the country they were stored in a bonded warehouse. The appellant admitted paying the sum of N9,450 being part payment of the duties payable on the whole consignment. This was in December, 1976 as evidenced by Exhibit 'F'.

The failure of the respondent to answer the query was known to Mr Barve (the appellant's Manager) who did everything and in particular by writing letter so as to clear the query. Both parties and the Customs & Excise Department agreed to settle. Exhibit 'H' written by Mr Barve on behalf of the appellant shows that the appellant was aware of the history, the query and the final decision of Board of Customs and Excise in respect of the consignment of Champagne.

The learned trial Judge Ademola Johnson J (as he then was) found in favour of the plaintiff/appellant. There was an appeal against that decision to the Court of Appeal. In a unanimous decision the lower court allowed the appeal, set aside the judgment of the Court of trial and dismissed the action filed by the plaintiff/appellant. The present appellant appealed against the decision of the lower court on three grounds of appeal namely:-

"(a) The learned justices of the Court of Appeal erred in law and on the facts when they held, inter alia, that the defendant did not owe the plaintiff a duty of care in the circumstances of this case.

Particulars of Error

(i)      Their Lordship (sic) confused the facts relied on by the plaintiff as evidence of a breach of a duty of care, with the facts evidencing that duty of care;

(ii)     Their Lordship (sic) misunderstood the import of Section 136 of the Custom and Excise Management Act which made the plaintiff vicariously liable to pay fines to the Board of Customs & Excise for offences arising from the negligence of the defendant;

(iii)    Their Lordship (sic) confused the status and meaning of an independent contractor with that of an agent in holding that an independent contractor cannot be liable to its principal in negligence;

(iv)    Their Lordship (sic) failed to take into account the fact that the defendant was engaged in the practice of a specialised expertise which the plaintiff relied upon.

 

(b)     The learned justices of the Court of Appeal erred in law and on the facts when they upheld the defendant's plea of illegality to defeat the plaintiff's claim.

Particulars of Error

(i)      There was no evidence on record of any illegality on the part of the plaintiff;

(ii)     Their Lordship (sic) failed to draw a distinction between offences involving strict liability and those requiring "mens rea";

(iii)    Their Lordship (sic) failed to take into account the fact that the plaintiff was only held vicariously liable for an offence primarily committed by the defendant

 

(c)     The learned justices of the Court of Appeal erred in law and on the facts when they held that items 1 & 2 of the damages awarded were not strictly proved.

Particulars of Error

(i)      The defendant did not lead any evidence to controvert the plaintiff's evidence in proof of the damages claimed;

(ii)     Although no direct evidence was given by the plaintiff's witness as to the exchange rate of the French Franc, he gave uncontroverted evidence as to the selling price in the plaintiff's restaurant and in the open market of the champagne. In either case, the selling price was higher than the amount being claimed by the plaintiff.

(iii)    The only defence witness, one Ebenezer Oluwole Adeyemi, stated categorically that the defendant "used the cheques issued by Quo Vadis eventually to pay the duties". Accordingly, there was no basis for their Lordship's (sic) finding that the payment to the Board of Customs was not proved.

(d)     The judgment was against the weight of the evidence."

Briefs were filed by the parties. Mohammed JSC in the lead judgment has set out the issues raised in the briefs and I need not repeat them except where it is necessary in support of any submissions or conclusions reached by me.

In his oral submission, Mr Oyewole the learned Counsel for the appellant relied on his brief in respect of issues (a) and (c) but on (b) ie illegality, he submitted that there was no pleading on illegality. Learned Counsel thus referred to the respondent's brief where the respondent tried to show that illegality was pleaded. Learned Counsel cited Agwuneme v Eze (1990) 3 NWLR (Part 137) 244/256 and submitted that where the agreement is not ex facie illegal it should be pleaded: Idehen v Idehen (1991) 6 NWLR (Part 198) 382/424 and referred to Section 79 of the Customs and Excise Management Act 1958.

In his oral submission, Chief Akinbisehin SAN on this issue relied on paragraph 12(c) of the statement of claim which pleaded illegality and that both pleadings averred illegality and referred specifically to Exhibits 'E' and 'F' He submitted that the respondent proved the appellant was a party to the illegality.

It appears to me that the success of this appeal depends mainly on whether both parties were aware of the illegality. The agreement was either ex facie illegal or if illegality was pleaded then the action must fail. It is for this reason that I will consider issue (b) first before considering either issue (a) or (c).

In treating this issue Ademola JCA in the lead judgment said:-

"The learned Judge rejected the plea "Ex turpicausa oritur non actio" put up by the appellant for the reasons stated in the extract from his judgment quoted above. I have already dealt with one part of his reasoning for the rejection. The other reason given is that appellant failed to call evidence of the respondent part in the illegality. This is palpably wrong as no such duty is cast on him in law. It is not for a defendant to prove any illegality, it is for the court to note the evidence of such illegality wherever it might come from and refused to enforce any obligation under the transaction. The removal of the cartons of champagne which respondent received was against Customs regulations as found by the learned Judge. Is the respondent to benefit from that transaction by the award of damages to it? That is the moral issue posed by this case which in my view the learned Judge missed completely in his rejection of the plea set up the appellant; see Sodipo v Lemminkamenoy (1986)1 NWLR page 220 particularly at pages 132-235 per Eso, JSC. In my view, the plea of illegality succeeds and should operate to defeat any question of liability of the appellant."

Was there any pleading on illegality? Chief Akinbisehin SAN in his brief on pages 9 and 10 referred copiously to the various issues of illegality especially pleaded in paragraph 12(c) & (d) of the statement of claim to wit:-

"12     (c)     Committing warehousing irregularities which led to the forfeiture of 300 cartons of Tttinger Champagne from their bonded warehouse

(d)     Releasing all the 1,000 cartons of Taittinger Champagne to plaintiff when the defendant knew or ought to know that it was not proper to so release the goods at the time they did".

These were acts referred to by the appellant as particulars of negligence. I agree with the learned Counsel for the respondent in the brief filed on behalf of the respondent when he said:-

"It is submitted that the cumulative effect of paragraph 12(c) of the statement of claim at page 6 line 5 of the Record of Appeal and paragraphs 4,10,13,14 and 15 of the amended statement of defence at page 36 lines 23-25, page 37 lines 17-19, lines 30-35 and page 38 lines 1-12 showed that irregularity, wrongful act, wrongful doing, contravention and illegality and the sanctions of penalty and forfeiture were pleaded."

It is pertinent at this stage to refer to Exhibit 'F' written by Mr M.G. Barve to the respondent before the payment of the total duties payable on the entire consignment. It reads:-

"13th December, 1976

Nigerian Maritime Service Ltd

13/15 Sapele Road,

Apapa.

Dear Sirs,

B.W.H. 442

Kindly deliver the undermentioned per bearer herewith:

100 cartons X 12 bottles of taittinger-Brut Reserve.

Thanking you.

Yours faithfully

for: Quo Vadis Hotels & Restaurants Ltd

(Sgd) Mr G. Barve"

This release of 100 cartons was before the duties payable on the whole consignment was fully paid. The first instalment of N9,450 was paid on 8 December, 1976 whilst the last instalment of N18,900 was paid on 11/2/77. It is untenable therefore for the appellant to claim ignorance of what it pleaded under paragraphs 12(c) and (d) of the statement of claim already reproduced above.

The combined effect of Exhibits 'F' (where the appellant's Manager requested the respondent to deliver 100 cartons of champagnes on 13 December before custom duty on the whole consignment of 1000 cartons had been paid) 'H', (this confirms the order of the cartons to the appellant) and 'L' (which shows a record of the movement of the entire consignment) is the knowledge and active participation of the appellant in the illegal removal of the consignment from the bonded warehouse of the respondent. These irregularities were fully highlighted in Exhibit 'P' written to the respondent by the Department of Customs and Excise.

I agree with Ademola JCA when he said:-

"The error in law of the learned Judge lies in the fact that Section 136(2) (sic) of the Customs and Excise Department Management Act has not been considered in the consideration of this case. In my opinion, it is applicable and the respondent must take responsibility for illegal removal from the warehouse of cartons of champagne in this case."

Section 136 of Customs and Excise Management Act 1958 provides for the payment of any duty by an agent in respect of the goods and the performance of all acts under the Customs and Excise laws pertaining to these goods. In order not to shift responsibility by the principal or to claim ignorance of liability for the payment of duties the proviso to Section 136(ii) specifically states:-

"(ii) nothing in this Section shall relieve the principal from liability."

Failure of the agent to pay duties on goods imported is a breach of that Section in respect of which the principal is liable. The combined effect of Sections 136 and 137 of the Customs and Excise Management Act 1958 is to ensure the payment of duties on goods either by the agent or principal or both. I cannot see how Section 79 of the same Act which Mr Oyewole cited can be a defence to these two Sections. Infact it is not relevant to the matter in issue.

Payment of duties in respect of goods in bonded warehouse is a condition precedent to the release of the goods. I have already held that the appellant had not only knowledge, but also participated fully in the illegal removal of the cartons of champagne-contrary to the law. Having taken such illegal steps which facilated the removal of the consignments from the bonded warehouse I will answer the question posed by the appellant on the second issue:-

"(b) Was the Court of Appeal right in holding that the plaintiff was a party to illegality and hence was barred from relief by the courts?"

In the positive, illegality was pleaded and there was also evidence on record in support of illegality. This court or any court of law cannot close its eyes to the acts which the law forbids. What the appellant in this case seeks to achieve is to benefit from an illegal transaction of which he had foreknowledge, took part in it and actively encouraged a breach of an act that is statutorily forbidden. Since I have come to the conclusion that the transaction was illegal, I do not consider it necessary to express any view on issues (a) and (c). I will for the above reasons and for the fuller reasons given in the lead judgment of my learned brother Mohammed, JSC dismiss the appeal with costs assessed at N1,000 in favour of the respondent.

Appeal dismissed.