Whether an Agent Can Be Liable for the Indebtedness of its Disclosed Principal?

INTRODUCTION:

This appeal borders on Agency.

CASE TITLE: UBA Plc v. Cross River Board of Inland Revenue (2023) LPELR-60597(CA)

JUDGMENT DATE: 4TH JULY, 2023

PRACTICE AREA: COMMERCIAL LAW (AGENCY)

LEAD JUDGMENT: MUHAMMED LAWAL SHUAIBU, J.C.A.

SUMMARY OF JUDGMENT:

FACTS:

This is an appeal against the judgment of the High Court Cross River State delivered on 29th September 2017.

The claimant commenced a civil action on 21st November 2016 against the defendant claiming the recovery of public revenue in the sum of N20, 218,185.72 (Twenty Million, Two Hundred and Eighteen Thousand One Hundred and Eighty-Five Naira, Seventy-Two Kobo) being the balance of local PAYE taxes due in 2012 from Trans-Ocean Support Services through her bank, Citibank Nigeria limited in favour of Cross River State Government.

Upon being served with the originating summons, the defendant filed a motion on notice seeking inter alia, an order striking out her name, on the ground that she is an agent of a disclosed principal and thus cannot be held liable under the circumstances. In response, the claimant filed a counter affidavit and documentary Exhibits marked A-G2 respectively. After hearing parties on their respective affidavits, learned trial judge found that the defendant acted more as an independent contractor.

Being dissatisfied with the judgment of the trial Court, the appellant appealed to the Court of Appeal.

ISSUES:

The appeal was determined on the following issues:

I. Whether the learned trial Judge was not wrong in law when in his judgment he failed to give effect to the terms of the contract made between the appellant and her disclosed principal, namely Transocean Support Services Nigeria Limited as shown in Exhibit A annexed to the affidavit to show cause and to the motion for striking out?

II. Whether the learned trial judge was not wrong in law when he held that the appellant, who is an agent of a disclosed principal is liable for the indebtedness of its disclosed principal to the respondent?

DECISION/HELD:

On the whole, the appeal was dismissed.

RATIOS:

• COMMERCIAL LAW – AGENCY – Ways in which principal and agent relationship may arise/can be created
• CONTRACT – VALIDITY OF CONTRACT – Essential elements of a valid contract
• CONTRACT – BINDING CONTRACT – Position of the law regarding what constitutes a valid and enforceable contract
• CONTRACT – PRIVITY OF CONTRACT – Whether a third party can enforce the terms of a contract between two parties
• COMMERCIAL LAW – AGENCY – Position of the law as regards the liability of an agent after the principal has been found liable