ARC. GEORGE ONIOMOH AFIFEN NIG. LTD & ANOR V. UNIVERSITY OF JOS (2004)

Background

This appeal arose from an oral arrangement made between December 1992 and February 1993 between the appellants and the Faculty of Medical Sciences of the University of Jos. The first appellant was engaged as consultant architect, engineer and quantity surveyor for proposed office buildings, laboratories and a twin lecture theatre. The estimated cost of the projects was substantial and was intended to be raised through a fund-raising exercise. After the proposed projects were scaled down, the first appellant prepared fresh designs, working drawings and bills of quantities. On the first appellant’s recommendation, the second appellant was appointed to construct the office and laboratory buildings at the premises of the Jos University Teaching Hospital.

The second appellant commenced construction in March 1993 and carried out substantial work, including roofing, plastering, installation of window and door frames, courtyard drainage and work on soak-away pits. The appellants maintained that approximately 80 per cent of the project had been completed before work stopped because of lack of funds. In 1997, the Vice-Chancellor of the respondent university wrote to the first appellant requesting the project documents and details of the liabilities due to the consultants and contractor. The appellants supplied the requested materials, but the university subsequently handed the project to another contractor for completion without paying the appellants’ outstanding fees and expenses.

The appellants commenced proceedings at the Federal High Court, Jos, claiming sums for professional consultancy services, construction work, retention money, interest and expected profit. They also pleaded an alternative claim based on quantum meruit. The trial court dismissed the entire claim, principally accepting the respondent’s contention that it was not a party to the agreement allegedly made with the College of Medicine or Faculty of Medical Sciences. The appellants appealed.

Issues

1. Whether the location of the buildings at JUTH could absolve the University of Jos from contractual liability.
2. Whether the evidence and conduct of the university established knowledge, recognition or acceptance of the contract.
3. Whether the principles of equity prevented the university from retaining the benefit of the work while denying liability.
4. Whether the failure to reduce the building contract into writing invalidated it.
5. Whether the trial court failed to consider the alternative claim based on quantum meruit.
6. Whether the trial court properly evaluated the pleadings, oral testimony and documentary evidence.
7. Whether grounds of appeal raising fresh issues of ratification and agency were competent without leave of court.

Ratio Decidendi

The Court of Appeal held that a construction contract is not required by law to be in writing merely because it concerns the construction of buildings. An oral contract may be valid and enforceable where the surrounding facts and conduct establish that the parties reached an agreement and acted upon it.

The court further held that the Faculty of Medical Sciences and the College of Medicine were not separate juristic persons distinct from the University of Jos. Under sections 1(1) and 1(2) of the University of Jos Act, the university was a statutory body corporate with perpetual succession and the capacity to sue and be sued. Its faculties and constituent units were integral parts of the university and had no independent legal personality capable of being used to defeat claims against the university.

Exhibit 4, a letter written by the Vice-Chancellor, was particularly significant. The letter acknowledged that the appellants were the consultants on the project, stated that the project had been abandoned through lack of funds and not through any fault of the appellants, requested the contract documents and drawings, and asked the appellants to submit their outstanding liabilities for consideration and settlement. The court regarded this conduct as a clear admission that the university knew of and accepted the project. The university could not take over, complete and benefit from the project while denying the obligations arising from it.

Quantum meruit means reasonable remuneration for services rendered rather than necessarily the precise contractual sum claimed. The court stated that such a claim presupposes a valid contractual relationship which has been prematurely terminated or under which additional work has been performed. A claimant must nevertheless prove, by evidence, the basis and value of the remuneration sought.

Court Findings

The Court of Appeal found that the trial judge had misconstrued the evidence and had not properly evaluated Exhibit 4 or the admissions made by the respondent’s witness. The location of the project at JUTH was not the true basis of the trial court’s decision and did not absolve the university from liability. The decisive question was whether a contract existed and whether the university was bound by the acts of its faculty and officers.

The court also applied equitable principles. Equity, being concerned with conscience, good faith and the fair regulation of reciprocal obligations, would not permit the respondent to enjoy the benefit of the completed work while escaping payment. The university’s conduct in taking over the project and arranging for its completion reinforced the conclusion that it had accepted responsibility for the project.

The appellants’ fresh arguments concerning ratification and agency, insofar as they were raised without having been pleaded and without leave, were struck out. The court reaffirmed that an appeal is incompetent where leave is required but has not been obtained. However, the striking out of those grounds did not defeat the appeal because the remaining issues, particularly the existence of the contract, the legal status of the faculty and the evaluation of Exhibit 4, were sufficient to dispose of the matter.

Conclusion

The appeal was allowed. The judgment of the Federal High Court delivered on 25 January 2001 in Suit No. FHC/J/CS/17/99 was set aside. Judgment was entered for the first appellant in the sum of N4,007,687.11 for design, consultancy and supervision services, and for the second appellant in the sum of N1,025,786.76 being the amount due under the outstanding interim payment certificate. Costs of N10,000 were awarded to the appellants.

Significance

The decision is important in Nigerian contract and education law. It confirms that an oral building contract may be enforceable, that a university’s faculty ordinarily lacks a separate legal identity from the university, and that a statutory institution cannot rely on internal institutional distinctions to avoid liabilities incurred through its authorised officers. It also illustrates the evidential importance of subsequent conduct and correspondence in proving contractual recognition. Finally, the judgment demonstrates that equity will prevent a party from retaining the benefit of construction work without accepting the corresponding financial burden, while emphasising that claims based on quantum meruit must be supported by clear evidence of the services performed and their reasonable value.