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Introduction
In a breach of contract claim, damages fall into two broad categories: general and special. While general damages are presumed to flow naturally from the breach, special damages are exceptional; they are losses that do not necessarily arise as a matter of course from the act complained of.
In UBA Plc v. Ogundokun (2009) ALL FWLR (Pt. 1138) 431 at 489, it was held that the cardinal rule governing special damages is that for a claim to succeed, it must be specifically pleaded and strictly proved. Strict proof requires the Claimant to provide precise and tangible evidence that ties the claimed loss to each item of disbursement or breach, enabling the court to immediately quantify the claim without having to make its own estimates.
In the case of Ajigbotosho v. Renolds Const. Co. Ltd (2019) 3 NWLR (Pt. 1659) 287, the Supreme Court had the opportunity to make a pronouncement on how to prove special damages in a claim for a breach of contract.
Summary of facts in the case of Ajigbotosho v. Renolds Const. Co. Ltd (2019) 3 NWLR (Pt. 1659) 287
Renolds Construction Company (the Respondent) was awarded a contract by the Federal Government to dualise the Ibadan/Ife Road. To execute this project, the Respondent entered into several Lease Agreements with Alhaji Musa Ajibotosho (the Appellant) to use his land for site erection and excavation of materials. Instructively, Clause 5 of these Lease Agreements provided that the Respondent must level and restore the land to a usable state upon completion of the road construction project before handing it back to the Appellant.
The Respondent completed the road project but failed to level and restore the land as agreed. After the Respondent failed to respond positively to the Appellant's request for restoration, the Appellant instituted an action at the High Court of Oyo State, claiming general and special damages for the breach of the Lease Agreements.
The trial High Court found the Respondent liable for breach of the Lease Agreements and awarded the sum of N250,000.00 (Two hundred and fifty thousand) as general damages and N25,000.00 (Twenty-five thousand) as the cost of survey. However, the court dismissed the Appellant's claim for special damages on the ground that it was not strictly proved as required by law.
The Appellant had claimed the sum of N3,712,500.00 (Three million, seven hundred and twelve thousand, five hundred naira) as the amount required to rehabilitate the damaged parcel of land, and N743,149.20 (Seven hundred and forty-three thousand, one hundred and forty-nine naira, twenty kobo) as the cost of repairing the damaged road. Despite these specific figures, the High Court held that the claims were unproven because the amounts were based merely on estimates obtained from third parties rather than actual, incurred expenditure.
Both the Court of Appeal and the Supreme Court affirmed the trial Court's dismissal of the special damages claim, holding that the Appellant had failed to meet the strict standard of proof required by law. The Supreme Court at Page 297 Para A-B, per Bage, JSC, held as follows:
"For a claim in the nature of special damages to succeed, it must be proved strictly and the court is not entitled to make its own estimate on such a claim. It should be noted that special damages should be specifically pleaded in a manner clear enough to enable the defendant know the origin or nature of the special damages being claimed against him to enable him prepare his defence."
The Supreme Court went further at Page 297 Para H, per Bage, JSC, to hold as follows:
"From the foregoing, special damages will only be awarded if strictly proved and for this, the appellant in this case ought to have gone beyond stating the estimate of the amount it will cost him to repair the damaged road and rehabilitate the damage done to the parcel of land."
Key Takeaways for Claiming Special Damages
The Supreme Court's decision in Ajigbotosho v. Renolds Const. Co. Ltd serves as a vital reminder for litigants on the rigorous requirements for recovering specialised damages in Nigerian Courts. From the decision, we can deduce the following:
- Claims for special damages based on mere estimates, quotations, or imprecise calculations will invariably fail. The amount claimed must be supported by compelling, documentary evidence of actual loss or expenditure (e.g., receipts, invoices for completed work, bank statements showing disbursements, or forensic accounts showing lost profit or income).
- The claim must be pleaded with precise details, clearly linking the Defendant's breach to the exact financial loss incurred. The pleading must also give the opposing party and the Court full notice of the origin and nature of the damage.
- Claims for special damages are often stronger where the loss is in the nature of an out-of-pocket expense. In such cases, the Claimant would only need to provide evidence of the disbursement (e.g. bank statements, receipts, and invoices from the repair contractor).
- Unlike a claim for general damages, where the Court can make a fair and reasonable assessment, the Court will not exercise its discretion to award special damages. The claim must stand or fall strictly on the quality and exactitude of the evidence provided by the Claimant.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
