Appealing Awards Of Cost In Nigeria

by Muyiwa Ogungbenro , Ubong Charles Bassey and Olukemi Owolabi

Introduction

The term “costs” means two things in law. The first is the charge which a solicitor is entitled to make and recover from the client or person for professional services. The other meaning usually given to the word is the sum of money which the Court orders one party to pay another party in action as compensation for the expenses of litigation incurred.¹ We will be relying on the second meaning in this article.

Awards of cost are a common occurrence in Nigerian litigation and parties typically expect courts to make such awards. Awards of cost can be ordered in favour of a party for the expenses incurred in the suit or for certain aspects of the proceedings. This article provides insight into the different types of cost orders and the attitude of the appellate courts to an application for a cost review.

The distinction between the Types of Cost Awards

There are two types of cost awards.² One is awarded in accordance with settled principles of law, while the other is awarded at the court’s discretion based on particular facts.³

Awards in accordance with settled principles of law

This type of cost is typically awarded in favour of a litigant who participated in the full course of litigation, the hearing of an application, or an appeal. It is awarded to compensate a successful party for the financial expense expended in prosecuting or defending a case, application or appeal. These types of cost orders include the cost of the action, interlocutory costs etc. Nigerian case law supports the position that a successful party is entitled to an award of cost as of right, except if he misconducts himself.⁴

Awardsin the exercise of the court’s discretion on particular facts

This is usually awarded to punish a defaulting party who fails to either comply with specified court procedures or obey a court order, whether in its entirety or in accordance with the specified time. Notably, there is no appeal regarding this type of cost because it is awarded based on the private opinion of the judge.⁵

Challenging Awards of Cost in Accordance with Settled Principles of Law

A key principle guiding the awards of cost is that cost is awarded at the discretion of the trial judge. The appeal court will not interfere unless it is satisfied that the trial judge did not exercise his discretion judiciously or judicially.⁶ Judicial discretion must be exercised on fixed principles and according to rules of reason and justice. The exercise of discretion must be justifiable. This means the trial court is expected to show for what items it awarded costs and how much was allowed in respect of each award.⁷

Further, an appellate court may reduce cost where a trial court awards excessive cost but fails to state its reasons or gives invalid reasons for doing so. In the recent case of Seven up Bottling Co Ltd v. Ajayi,⁸ the Court of Appeal set aside the award of cost awarded by the lower court on the basis that it was excessive and there was no material basis for the cost award.

Procedure to set aside an award of cost

In challenging an award of cost, it is important to note that an appeal court only has the power to review costs awarded by the lower court where the appellant, who lost at the lower court, succeeds upon appeal.⁹ In this case, the cost awarded against him will be set aside and the appellant will be indemnified for his costs at the trial and appeal courts. An appeal court would also be competent to review the costs where the successful party at the lower court cross-appealed against a part of the judgement and succeeded. While an appeal may be brought on the sole issue of cost, the courts are usually reluctant to hear appeals where the sole issue is on cost unless it is of great importance.¹⁰

An appellate court may also choose to vary costs in favour of the respondent. However, this can only be done upon a complaint raised by the respondent that the costs awarded by the lower court were inadequate.¹¹

Comment

From the decision of the Supreme Court above¹², it is clear that some awards of costs are not appealable, ie, awards granted in the exercise of the court’s discretion on particular facts. However, this position appears contradictory to the provision of section 241(2) (c) of the 1999 Constitution of the Federal Republic of Nigeria (as amended). Section 241 (2) (c) envisages that a party can appeal an award of cost. It does not distinguish between the different types of costs. It only provides that a party would require the leave of the Court to appeal on costs only.

By the provision of the Constitution, it would appear that all costs are appealable, subject to the leave of the Court in deserving cases. As such, a party can appeal an award of cost only (with the leave of Court), even if the cost was granted in the exercise of the court’s discretion on particular facts. This is evidently at variance with the decision of the apex court. It is, therefore, hoped that more decisions will be handed down by the Supreme Court to clear up this apparent contradiction.

Footnotes

1 Mbanugo & Ors v. Nzefili (1997) LPELR-5483(CA)

2 UBA Ltd v. Stahlbau GMBH & Co. KG (1989) LPELR-3400(SC)

3 Madu & Anor v. Anozia & Anor (2018) LPELR – 45484(CA)

4 Cooper v. Whittingham (1880) 15 Ch.D. 501, at p.504; Inneh v. Obaraye (1957) 2 FSC 58, at 59

5 UBA Ltd v. Stahlbau GMBH & Co. KG (Supra)

6 Wurno v. United Africa Company Ltd (1956) 1FSC 33 at 34

7 Ojiegbe and Anor v. Ubani and Anor (1961) 1 All NLR 277

8 (2007) LPELR-8765 (CA)

9 Leonard Okoye & Ors v. Nigerian Construction & Furniture Co Ltd & Ors (1991) LPELR-2509(SC)

10 R v. Holderness Borough Council, ex p James Robert Developments Ltd (1993) 5 Admin LR 470, 66 P & CR 46, CA

11 Fidelis Nwadialo, Civil Procedure in Nigeria, Second Edition (Lagos: University of Lagos Press, 2000)

12 UBA Ltd v. Stahlbau GMBH & Co. KG (Supra)

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