Notary Public for Nigeria and Senior Associate with the Dispute Resolution Department of S. P. A. Ajibade & Co., Lagos Office, Nigeria.

Transcription

1 Dispute Resolution 17 th December 2018 Introduction Propriety of Claiming Solicitor s Fees as part of Cost of Action from the Losing Litigant: Recent Judicial Position on Standard of Proof required from the Winning Litigant. 1 of 7 Peter Olaoye Olalere, Esq1 It is trite law that where there is a legal wrong there must be a remedy as aptly captured in the latin maxim ubi jus, ibi remedium. It is also trite that costs follow events and a successful party is entitled to cost which he should not be deprived of except for a good or special reason. 2 If the Claimant s case seeking payment of outstanding sums in a civil matter succeeds, it is the writer s humble view that the claim for expenses and costs (including legal or solicitor s fees) ought to be awarded as prayed as there would not have been a need to incur legal or solicitor s fees whatsoever had the defendant (losing side) paid the Claimant (winning side) before the latter approached the court. The above was the line of submissions in the final written address in respect of a recent matter in which the Claimant later won on all grounds except on the award of the solicitor s fees in respect of which the above argument was put forth by the present writer. The court s reasoning for not awarding the solicitor s fees was that though properly pleaded as part of special damages, with the fees agreement with the Claimant duly tendered and received in evidence, it was not strictly proved as the Claimant only tendered the fees agreement between the Claimant and solicitor in evidence. The Claimant was adjudged not to have shown evidence that the expense was incurred. This write-up thus attempts to interrogate our courts general reluctance to award appropriate costs in deserving events; and 1 Notary Public for Nigeria and Senior Associate with the Dispute Resolution Department of S. P. A. Ajibade & Co., Lagos Office, Nigeria. 2 See Saeby v. Olaogun (1999) SC 45, 59, and Ladega v. Akinliyi (1969) 2 SC 91.

2 particularly the court s decision regarding whether fees agreement between the Claimant and solicitor is not sufficient proof that the Claimant had incurred expenses. Conversely, can expenses incurred but not yet paid be considered as not incurred solely on the basis that same is to be paid later? Or does the fact that an expense incurred has not been paid mean that the expense has not been incurred? Claiming Solicitor s Fees from the losing litigant: Unethical Practice or Special damage? Claiming Claimant Solicitor s fees from the defendant under Nigerian law was initially considered to be against public policy and unethical in a line of writer authorities, including the case of Guiness Nigeria Plc v. Nwoke 3 where it was held that as unethical and an affront to public policy for a litigant to pass on the burden of his solicitor s fees to his opponent in a suit. However, that position has since changed, and solicitor s fees is now considered as a claim within the realm of special damages which, must be pleaded specially and evidence adduced to prove same specifically. In the case of S.P.D.C. Nig. v. Okonedo, 4 it was decided that special damages must be specifically pleaded and specially proved. The current state of the law on granting solicitor s fees is that upon proper pleading and once it is established that the Claimant suffered a wrong as a result of the Defendants refusal to pay their indebtedness, evidence of the solicitor s fees like every other special damages only need be provided on the balance of probability in all civil cases. This position is confirmed by the writer authority of the case of Int l Offshore Const. Ltd v. S.L.N. Ltd 5 where the Court of Appeal, placing reliance on the Supreme Court decision in Rewane v. Okotie-Eboh 6 held that: Under Nigerian Laws expenses incurred on services of counsel are reasonably compensated. Thus the costs will be awarded on the ordinary principle of genuine and reasonable out of pocket expenses and normal counsel cost is usually awarded for a leader and one or two juniors. In the instant case, the trial court was perfectly right in the award it made in respect of expenses incurred by the respondent for services of solicitors 3 [2000]15 NWLR (Pt. 689). See also A.C.B. Ltd. v. Ihekwoaba [2003] 16 NWLR (Pt.846)249 and Nwanji v. Coastal Services (Nig.) Ltd [2004] 11 NWLR (Pt.885) [2008] 9 NWLR (Pt. 1091) 85 at paras. H-D; Lonestar Drilling Nig. Ltd v. New Genesis Executive Security Ltd (2011) LPELR-4437 (CA). 5 [2003] 16 NWLR (Pt. 845) 157 at 179 paras. A-D. 6 (1960) SCNLR of 7

3 The Court of Appeal thus affirmed the decision of the trial court awarding the Respondent the sum of N1m as incurred solicitors fees, particularly as the claim was not contested with credible evidence as unreasonable or extravagant or that the fees was more than normal to indemnify the respondent of the expenses incurred in counsel s cost. See also the case of Naude & Ors v. Simon 7 the Court also held that: The principle of law is that a successful party is entitled to be indemnified for costs of litigation which includes charges incurred by the parties in the prosecution of their cases. It is akin to claim for special damages. Once the solicitor's fee is pleaded and the amount is not unreasonable and it is provable, usually by receipts, such a claim can be maintainable in favour of the claimant. Holding further in the Naude s case, Tinuade Akomolafe-Wilson 8, stated that: In the recent case of LONESTAR DRILLING NIG. LTD. V. NEW GENESIS EXECUTIVE SECURITY LTD (2011) LPELR CA at page 11, this Court by Ejembi Eko, JCA stated thus:- "It is abundantly clear from the foregoing that costs fall into two broad species, namely the necessary expenses in the proceedings made by a party and costs in terms of the litigant's "time and effort in coming to Court." The former category includes filing fees, and solicitor's fees. This category belongs to the realm akin to special damages. They are easily ascertainable by producing, for instance receipts. That is why the Rules classify them as expenses. The other category which the Rules allowed the litigant to be compensated for is the litigants time and effort in coming to Court.' "The Court, under this category, usually takes into account the number of appearances of the litigant, and his counsel in Court." Having regard to the above recent cases, it is no more in doubt that damages for cost, which includes solicitor's fees and out of pocket expenses if reasonably incurred are usually paid by Courts if properly pleaded and proved. In short, the decision of this Honourable Court in the cited cases of IHEKWOABA v. ACB LTD (supra) and GUINNESS (NIG) PLC v. NWODE (supra) where this Court held that the payment of solicitor's fees as damages is not supported in this country does not represent the present state of the mind of the Courts in this country. In more recent times, it is common for solicitors to include their fees for prosecution of 7 (2013) LPELR-20491(CA) 8 J.C.A (as she then was) (2013) LPELR-20491(CA) at pages 24-28, para. A 3 of 7

4 cases and pass same to the other party as part of claims for damages, which have been awarded by the Courts once the claims are proved. Where parties have agreed that one party will be paying the solicitor s fees of another litigant before approaching the court or tribunal as is more generally the case in arbitration matters where parties often agree beforehand or where the rules of procedure or law guiding the dispute resolution often makes provisions in this regard. In the case of Bluenest Hotels Limited v Aerobell Nigeria Limited 9, it was held that generally it is unethical and an affront to public policy for a litigant to pass his solicitors fees in an action to his opponent. This is based on the self-evident truth that the solicitors fees do not form part of the cause of action. The position would however, be different where the obligation to pay the solicitors fees is contractual. The rudimentary principle of law in respect of contracts and agreements is expressed in the Latinism pacta conventa quae neque contro leges neque dolo malo inita sunt omni modo observanda sunt, more commonly expressed as pacto sunt servanda, meaning that agreements which are neither contrary to the law nor fraudulently entered into should be adhered to in every manner and in every detail. In this case, the bill of charges presented was evaluated as sufficient to prove the claim for solicitor s fees of N1m which was granted and upheld on appeal. Again, as was the case of the respondent in the case of Michael v. Access Bank Plc, 10 where a claim for Solicitors fees does not form part of the Claimant's cause of action, the claim cannot be granted. In that case, the claim for solicitor s fees was for a counterclaim that was not connected to the claim of the appellant. The court did not grant same. Similarly, there are case law writer authorities to the effect that legal fees, unless previously agreed upon, and in a particular sum, cannot be claimed under the Undefended List Procedure. 11 Is the standard of Proof required that of Special Damages in Civil matters or more? In the above cited writer authorities of the cases of S.P.D.C. Nig. v. Okonedo and Int l Offshore Const. Ltd v. S.L.N. Ltd, it would seem that invoice or receipt of payment of the incurred solicitor s fees were offered in evidence. It would thus appear; that in the writer s recent experience and from the tenor of the decision of the court in the case conducted by this writer, the expectation was that either of the invoice or receipt must have been tendered in evidence before the court would consider the special claim for solicitor s fees proved specially. 9 (2018) LPELR-43568(CA). 10 (2017) LPELR-41981(CA). 11 See the following cases: Dumez (Nig.) Ltd v. Ogboli (1972) 3 SC 196 at , Otaru & Sons Ltd v. Idris (1999) 4 SC (Pt. 2) 87 and Fortune International Bank Plc v. City Express Bank Ltd [2012] 14 NWLR (Pt.1319) of 7

5 It is in this regard that the interrogation posed in this article comes into view. That question is: what standard of proof is required from the party claiming solicitor s fees to satisfy and enable the trial court grant the claim? Must receipt of payment of the solicitor s fees always be tendered in evidence? It is the writer s opinion that the same standard of proof required of every special damage in any civil litigation, which is that the claimant only needs to prove on the balance of probabilities and not beyond all reasonable doubts, is required in the case of a claim for solicitor s fees. Consequently, proof on a balance of probabilities does not require receipt of payment in all cases. It is not proof to the hilt, or the criminal standard of proof beyond a reasonable doubt. In the case of Unipetrol Nig. Plc v. Adireje (WA) Ltd, 12 the Supreme Court held that although tendering receipt could be a good mode of proof, it is not an exclusive means of proving special damages. Similarly, in Obasuyi v. Business Ventures Ltd 13 the apex court held that when it is stated that special damages must be strictly proved, it is not in all cases that a receipt must be tendered, and that what amounts to strict proof varies with the facts of each case. Again the Supreme Court re-emphasized in the case of Ibrahim & Ors v. Obaje 14 where the Court found that the items of special damages were properly stated in pleadings and the evidence sufficient as put forward by the Respondent since really the appellants neither countered those special damages in their own pleadings and in evidence merely dismissed the issue of injury or damages in an off- handed way. The apex court, relying on their many earlier decisions, held that "strict proof" required in proof of special damages means no more than that the evidence must show the same particularity as is necessary for its pleading. Item of special damage need not be proved with mathematical exactitude in every case in order to satisfy strict proof. In the case of Calabar East Co-op. v. Ikot 15 the Supreme Court held that strict proof of special damages means no more than such proof as would readily lend itself to quantification and the nature of proof in a given case must be dictated by the peculiar circumstances of the available evidence. Depending on the circumstance of each case, the evidence based on ipse dixit of the claimant alone may even be sufficient. Again where evidence of the special damage is not challenged both in pleadings and evidence and the nature of the evidence is credible, the trial court ought to accept it. The oral evidence of the respondent was considered good enough in the Calabar East Co-op s case as oral evidence was adduced to the effect that the rain had destroyed all the receipts of purchase 12 [2005]14 NWLR (Pt. 946) 563 at 621 para. A-E. 13 [995]7 NWLR (Pt. 406) 184 at 194 paras. G-H. 14 (2017) LPELR (SC). 15 [1999]14 NWLR (Pt. 638) 225 at of 7

6 of the tools and machineries when the appellant removed the roof of the store/apartment where they were kept. Consequently, where as in the experience of this writer there is a fees agreement between the Claimant and solicitor without any rebutting evidence from the defendant to indicate the fees as unreasonable or a farce or that the amount was not incurred, the claim ought to award same. Based on the current position of the law on special damages, the claim for attorney fees should be considered as proved and should be awarded given that there is no other evidence on the other side of the scale and the fees claimed has not been argued to be unreasonable in the circumstance. Again, an incurred expense does not necessarily mean that such agreed expenses have been paid to the solicitor at the time of prosecuting the case, and thus there may not be a receipt as yet. In business parlance, the phrase incurred expenses typically refers to costs incurred that have not been paid or incurred expenses could be those one has agreed to and obligated to pay. The Black s Law Dictionary, 16 defines expense as an expenditure of money, time, labor, or resources to accomplish a result; esp., a business expenditure chargeable against revenue for a specific period and accrued expense as an expense incurred but not yet paid. It is in the light of this definition that we answer the interrogation of this article thus: expenses incurred but not yet paid can (nay should) be considered as expenses already incurred notwithstanding that it will be paid later. It is submitted that the solicitor s fees agreement with the Claimant shows that the Claimant is obligated to pay the already incurred legal expenses. Conclusion Given that the general acceptance that solicitor s fees is no longer in the realm of claims considered as being against public policy or unethical in our corpus juris; and the acceptance that same is a special damage, this writer submits that the requirement of proof require should not be elevated by our courts to the standard of proof required in a criminal case. Our courts should not continue to see the award of solicitor s fees as just cost which is a matter of discretion for them subject only to the fact that the discretion must be exercised both judicially and judiciously and for which the Courts are enjoined to be reasonable in the assessment thereof. Rather, it should be seen as a specie of special damages which once pleaded and specifically proved on a balance of probabilities should be awarded to the deserving party. It is our expectation that our courts will seize the earliest opportunity to award all specially proved reasonable solicitor s fees against the losing side and in favour of the winning side once specifically pleaded and specially proved on the balance of probability. Doing this will aid the court s recent stance and regime of award of reasonable cost to 16 9 th Edition edited by Bryan A. Garner 6 of 7

7 decongest our courts of frivolous claims, encourage litigants to resolve disputes via alternative and faster ADR means and to negotiate settlement out of court genuinely; knowing full well that where a party refuses to settle in good conscience, the solicitor s fees will most likely be part of the cost that the losing side will pay at the end of the day. For further information on this article and area of law, please contact Peter Olaoye Olalere at: S. P. A. Ajibade & Co., Lagos by telephone ( ), fax ( ) mobile ( ) or (oolalere@spaajibade.com). 7 of 7