Breach of Contract and Criminal Breach of Trust: A Thin Dividing Line -By Khalifa Auwal Hashim
Criminal breach of trust and breach of contract are two distinct yet related concepts in law. The distinction lies in the modes of commencement, elements required for proof and the remedies that can be sought for by an aggrieved party whereas their relationship lies in the causative factors. This thin dividing line has led to misunderstanding and misapplication of the two concepts right from the preliminary stage of investigation up to trial before a court of law.
This misconception has often caused undue advantage to some litigants particularly complainants, arbitrary arrests of defendants and equally resulted into malicious prosecutions. It also caused undue delay in courts of law which will have to pass through the rigors of trial before arriving at a conclusion.
This article seeks to examine the two major concepts with a view to identifying their salient features. It equally seeks to analyze the challenges faced as a result of misunderstanding and misapplication of the two concepts. Lastly, it deals with the most appropriate remedy for an aggrieved party in the event of any breach.
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This article seeks to address the misconception from the side of litigants, police investigators, lawyers both from public and private bar and in some cases members of the bench about the concepts of breach of contract and criminal breach of trust and their misapplication in the course of the discharge of their respective duties. The misconception has often led to series of problems such as arbitrary arrests by police officers, ill-advice given to complainants towards the pursuit of a fruitless legal excercise, subjecting defendants to unnecessary hardship and rigors of trial and wasting the precious time of the courts.
In addressing the above problem, the following questions have been formulated:
- What are the differences and similarities between criminal breach of trust and breach of contract?
- In what ways does the misapplication of the two concepts hinder the effective and speedy dispensation of justice?
- What is the most appropriate remedy for an aggrieved party where the facts surrounding a breach of contract that was occasioned contains element of criminality?
In an attempt to answer the above questions, books and articles by eminent jurists will be used. Equally both national and state legislations will be referred to and analyzed along with some judicial authorities.
The aim of this paper is to enlighten the public more particularly police investigators and legal practitioners about the salient features of the two concepts with a view to minimizing arbitrary arrests and malicious prosecutions. It could equally serve as a persuasive tool for members of the bench in arriving at a just decision when faced with a problem of that nature. Lastly, it will serve as a guide for students interested in conducting further research on the two concepts.
This paper is divided into four segments:
Section one deals with conceptual clarification of key terms i.e. criminal breach of trust and breach of contract. Under this, the paper made an attempt to examine their differences in terms of categorization in law, modes of commencement, means of proof and appropriate remedies that can be sought. It equally identified the relationship between them.
Section two deals with the challenges associated with the misapplication of the two concepts by the relevant stakeholders. This was achieved by identifying the challenges under some selected categories depending on the relevant actors.
Section three deals with the way forward and appropriate remedy or remedies for an aggrieved party in cases of any breach with an element of criminality.
Section four deals with conclusion and some recommendations.
- Conceptual Clarification of Key Terms:
The two concepts will be analyzed under two headings i.e criminal breach of trust and breach of contract.
- Criminal breach of trust:
This offence has been defined under section 311 of the Penal Code which provides as follows:
“Whoever, being in any manner entrusted with property or with dominion over property, dishonestly misappropriates or converts to his own use that property or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged or of any legal contract express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits criminal breach of trust.”
The ingredients of the offence have also been captured graphically in the case of Ibrahim & Ors vs. C.O.P as follows:
“The ingredients of the offence of criminal breach of trust contained in Section 311 of the Penal Code and which must be proved before a charge, for same can be sustained are:-
(a) that the accused was entrusted with property or with dominion over it.
(b) that he
(i) misappropriated the property;
(ii) converted such property to his own use;
(iii) disposed of it.
(c) that he did so in violation of:-
(i) any direction of law prescribing the mode in which such trust was to be discharge; or
(ii) any legal contract expressed or implied which he had
made concerning the trust; or
(iii) he intentionally allowed some other persons to do or commit the above stated,
(d) that he acted dishonestly as in (b) above.
See Onuoha v. The State (1988) 3 NWLR (pt 83) 460 (SC)…”
The ingredients mentioned above which are considered to be paramount will be analyzed hereunder:
- The Defendant must be entrusted with property or dominion over it.
The key word used here in ‘entrustment’. It has been derived from the word ‘entrust’. It connotes giving “… (a person) the responsibility for something, usually after establishing a confidential relationship” The definition above signifies the presence of a fiduciary relationship between the complainant and the Defendant. To analyze it further, it will be more appropriate to determine where the beneficial interest in the property in question lies in situations of entrustments. It has been argued that in criminal breach of trust, the beneficial interest in the property rests with the owner of that property. The Defendant is said to be entrusted only with a mere possession or dominion over the property. Thus, it is clear that the defendant is either holding it in trust for the owner or the benefit of a third party.
This is akin to a resulting trust in equity in which “…the transferor does not intend for the transferee to have the beneficial interest in the property.” From the definition and inference above, it can safely be concluded that where the beneficial interest in the property was meant to be transferred to the defendant in exchange of something like money, no ‘entrustment’ or fiduciary relationship can be established where the Defendant fails to honor the payment.
It should be noted that as long the property is entrusted by someone, the true identity of such party does not matter. This is because the Penal Code under section 311 does not restrict the ‘entrustment’ to be by a recognized owner of property. Equally, the state of mind of the Defendant about the true identity of the party who entrusted him with the property does not also matter. One may wish to argue that it goes with logic since the Defendant who willingly accepted the property from the party upon stipulated conditions has either expressly or impliedly admits or foresee the existence of a fiduciary relationship between them whether or not the property belongs to that party.
However, if the misunderstanding by the Defendant has to do with the beneficial interest of the property in question for example in situations where the Defendant thought or believed that he also has a claim over the property or that the property was giving to him as a gift to dispose of as he wishes, then the burden rests on the Defendant to prove that he has a claim to such property being a fact within his knowledge. More will be analyzed later in this paper.
- The Defendant must have misappropriated or converted to his use or disposed off the property:
This ingredient deals with the actus reus of the offence by the Defendant by either misappropriating the property entrusted to him, or converting same to his own use or even disposing same.
The word misappropriation is described in the following words: “…to take somebody elses money or property for yourself, especially when they have trusted you to take care of it…” It was also defined to mean: “the application of another’s property or money dishonestly to one’s own use.” See also the case of Tsanyawa vs. EFCC & Anor Conversion like misappropriation also involves dealing or using someone else’s property as though it were your own. It means “taking a chattel out of the possession of another with the intention of exercising a permanent or temporary dominion over it, despite the owner’s entitlement to use it all times.” From the description above, it will not amount to conversion if the Defendant who received a property from someone has a sole claim over that property. Mere possession of the property without title is not also conversion unless the Defendant shows some intention to keep it in defiance of the owner or lawful possessor.
Similarly, a Defendant who disposes of property entrusted to him for a different purpose without the express instructions of the person who gave it to him could be said to have committed criminal breach of trust
- The Defendant did so in violation of any prescribe direction or a legal contract or where he directed a third party to do so.
The first leg of this ingredient deals with violations of directions or legal contracts by the Defendant who either misappropriates, converts or disposes of a property being entrusted to him. Thus, if the Defendant upon receiving the property agrees to a particular direction prescribing the modes of the discharge of such trust or entered into a contract (expressly or impliedly) on the mode of discharge of that trust, any violation by way of misappropriation, conversion or disposition will result into a breach of trust even of the Defendant assumes that it will be for the benefit of the person who gave him the property. In such situations, express consent is paramount. Another important feature is that the contract need not be express. It can be implied from the conduct of parties as to how the trust was intended to be discharged.
The second leg of the ingredient deals with the act of the Defendant who having been entrusted with a property directed a third party to either misappropriates, converts or dispose of it contrary to a direction or an agreement. However, the caveat here is if the Defendant intentionally directed such a breach by a third party.
It should be noted here that the person directed to commit such offence may not be liable for the commission of the offence of criminal breach of trust since the property was not entrusted to him directly or rather in the absence of any fiduciary relationship between him and the person who was given possession of the property in the first place. He may however be guilty of the commission of other offences.
- The Defendant committed such breach dishonestly:
This deals with the mens rea, the mental element of the offence of criminal breach of trust. The Defendant must be shown to have acted dishonestly by causing wrongful gain to himself or to other person and wrongful loss to the person who was in possession of the property.
Before concluding on the ingredients, one may wish to pose a question whether the person entrusting the property must be the true or legal owner of that property? It is the opinion of the writer that the legal ownership of the property is immaterial in offences of criminal breach of trust in as much as it does not legally belong to the Defendant either partly or wholly. Thus, there would still be entrustment if an agent of a property owner gave the property to the Defendant in trust for the benefit of the owner or a third party beneficiary.
In any event, the prosecution is saddled with the responsibility of proving all the above ingredients beyond reasonable doubt.
1.2.2 Breach of Contract.
A breach is considered one of the four ways in which a contract can be discharged. Once a breach occurs, parties are freed from their mutual obligations. This is however subject to remedies provided by the Law for such breach as discussed below.
A breach of contract entails a situation where a party having entered into a contract fails to perform any of his contractual obligations without any justifiable reason. A breach can come in several forms. One of the most common forms is failure by a party to perform the contract. Express repudiation is another form wherein a party expressly states that he will not perform his own part of the contract. It may also be in the form of an action by one of the parties that will frustrate the performance of the contract or make such performance impossible. However, not all forms of breach can result into a discharge. It must be shown that such breach has affected a vital part of the contract.
It is paramount to state that there are several remedies for breach of contract depending on the terms of the contract, its nature and circumstances. Some of the remedies include a claim for damages against the party in breach (which includes compensatory damages, consequential damages, liquidated damages and nominal damages), order for specific performance of the contract, order for an injunction and rescission by the non breaching party.
Some of these remedies were succinctly captured in a Supreme Court case of Dantata and Anor. Vs. Mohammed where it was held thus:
“The law recognizes the restitutionary remedies of an innocent party who has opted to rescind a contract by reason of the serious breach of the other party. I am content to adopt the statement of the law as contained in Treitel’s Law of’ Contract, 5th edn, at pp. 772,773 thus: “A party who has wholly or in part performed his side of the contract and not received the agreed counter-performance in full may sometimes be entitled to restitution in respect of his own performance. Where this consists of a payment of money, the pay or will simply seek to get it back; where it consists of some other benefit he will claim recompense (or a quantum meruit) in respect of it.” It is clear that where a contract is avoided for breach, the innocent party is entitled to restitution where there is claim of total failure of consideration. As stated in Halsbury’s (op. cit.) para 1129, “a complete failure of consideration in a contract occurs where one of the contracting parties fails to receive the benefits of valuable consideration which springs from the roots, and is the essence, of the contract.”
In the case of NWAOLISAH vs. NWABUFOR, Adekeye JSC has this to say on breach of contract:
“A contract can be discharged by breach. A breach means that the party has acted contrary to the terms of the contract either by non-performance or by performing the contract not in accordance with its terms or by a wrongful repudiation of the contract. A party who has paid money to another person for a consideration that has totally failed under a contract is entitled to claim the money back to the other.”
It was further held at P. 39 paras D-E as follows: “…In consideration of remedies for breach of contract, the options open to a party to a valid contract is an action for damages in breach of the contract.”
It should be noted that it is not the intention of the researcher to exhaustively discuss the concept of breach of contract. However, the points raised so far above are enough to provide the legal basis upon which the topic can be discussed.
1.2.3 Differences between Criminal Breach of Trust and Breach of Contract:
It was held in plethora of judicial authorities that there is a world of difference between criminal breach of trust and breach of contract. Reference will be made to the case of Edun & Anor vs. FRN where EKO JSC held as follows:
“…I think there is a world of difference between breach of contract and a breach of trust. A breach of contract, on one hand, is a violation of a contractual obligation by failing to perform one’s own promise under the contract by repudiation of the contract agreement.
According to Black’s Law Dictionary 9th Ed. Page 213, a breach of contract may be by non-performance, or by repudiation, or both. Each case gives rise to a civil claim either for damages, or some other remedies including specific performance. A breach of trust, on the other hand, occurs with the trustee’s violation of either the trust terms or the trustee’s fiduciary obligations: Black’s Law Dictionary (supra)…”
Against the background of the above authority, some of these differences are briefly discussed under the following headings: categories of law, modes of commencement, means and standard of proof and remedies to be sought.
- Categories of Law:
Criminal breach of trust falls under the category of criminal law while breach of contract falls under the category of civil law. In criminal breach of trust, the prosecution is saddled with the responsibility of establishing the existence of mens rea (guilty mind) by showing that the Defendant intended to dishonestly misappropriate the property. Equally, the prosecution must establish the existence of an act or willful omission from the side of the Defendant to do an act e.g converting a property entrusted to him to his personal use.
- Modes of commencement:
To initiate an action for criminal breach of trust, it can either take one of the two forms. i.e lodging a complaint before the police or making a direct complaint before a magistrate court. In all the two instances, the police conduct investigation before commencement of trial unless there is an admission by the Defendant (in cases of direct complaint).
In breach of contract, all the Plaintiff has to do is to prepare and institute an action by any of the recognized means in court and support his case with evidence on the balance of probability.
- Means and standard of proof:
In criminal breach of trust, the means of proof are by way of direct evidence, circumstantial evidence and confessional statements. The standard of proof is beyond reasonable doubt since it deals with an allegation of crime.
In breach of contract, the means of proof is by way of evidence either oral or documentary or by conduct. The standard of proof is on the balance of probability.
In criminal breach of trust, the remedies available for a complainant is compensation upon conviction of the Defendant whereas in a civil suit for breach of contract, the Plaintiff may claim for an order of specific performance, rescission, injunction and damages.
- Relationship between criminal breach of trust and breach of contract:
Despite the host of distinguishing features captured above, there is a close relationship between criminal breach of trust and breach of contract. The relationship can best be described in the following way. A breach of contract by a party may result into a criminal breach of trust in as much as the elements of the offence can be established.
However it should be noted that not every breach of contract can result into a criminal breach of trust and not all cases of criminal breach of trust involves breach of contract. Breach of contract can at best be considered as one of factors that may result into criminal breach of trust among other factors. Various categories of contracts will be considered hereunder in further determining the relationship between the two concepts.
- Contracts for the supply of goods:
If the contract entails the supply and delivery of goods from a seller to a buyer on the agreement of payment of their monetary value by the buyer, failure to pay for the goods after receiving same may not necessarily result into a criminal breach of trust. This is because as pointed out earlier in this paper, the beneficial interest in the goods is meant to be transferred to the buyer. All the seller can do is to sue for breach of contract and claim any of the remedies discussed above. It will be a different criminal offence altogether if the buyer deceived or induced the seller to enter into the contract knowing fully well that he did not intend to pay for the goods.
If on the other hand, there was an agreement in the contract either expressly or impliedly that the goods should be returned to the seller upon non- payment of their monetary value by the buyer, then if the buyer having received same breached the contract by not paying and converted the goods to his own personal use, he may be guilty of criminal breach of trust. This is a clear case of resulting trust where the beneficial interest reverts back to the seller upon failure of the buyer to fulfill a condition in the contract. Other similar contracts in this category include contracts for the procurement of travelling visas e.t.c
- Contracts for delivery of goods
Where the contract was for the delivery of goods for example in a situation where Party A give goods to Party B for onward transmission to Party C, Party B could be held liable for criminal breach of trust if having received the goods failed to transmit same to Party C and misappropriated or converted same to his personal use. This is because the beneficial interest in the goods does not lie with Party B. This extends to a situation where the goods in question involve money in whatever form of currency.
- Contracts involving conversion of currency:
This is one of the most controversial before our courts. It entails a situation where Party A gives or sends money in a particular currency to Party B (usually banks or bureau de change owners) for the purpose of conversion into a different currency and remittance of same to either the same Party A or to a different Party C (under the instruction of Party A).
In the above situation, the question that needs to be asked is whether there is a fiduciary relationship between Party A and Party B? The answer is in the positive since the character has not been changed irrespective of the fact that Party B might get a commission out of it.
A more complicated scenario might arise in a situation where Party A (the owner) through his agent Party B sends money into an account provided by Party C on the agreement that the money will be converted into a different currency and sent to Party D (the beneficiary). On the face of it, one may argue that there is no fiduciary relationship between Party B (the agent) and Party C, if Party B decides to lodge a complaint of criminal breach of trust against Party B. However, a critical look at it will reveal that Party B though not the actual owner of the money was the one who directly entrusted Party C with the money in question. Thus, he is in the best position to lodge a complaint against Party C.
Most importantly, the definition of criminal breach of trust under the Penal Code does not in any way restrict the institution of a criminal case of this nature to ‘property owners’ only. As long as there was ‘entrustment’ of property or ‘dominion’ over property, the actual owner of the property is immaterial.
- Contracts for investment of money for the purpose of business:
This is also another controversial area of law where a party is either induced to invest or willfully invest money into a business (either real or purported) belonging to another party with an agreement that a profit will be shared periodically between the two parties in question. By way of illustration, Party A may induce Party B into investing money (which was meant to be used for business), with an agreement that a profit will be shared periodically between the two on an agreed proportion. In most instances, part of the profit is often shared for a specific period of time before problems will begin to arise. Demands for the capital invested along with the anticipated profits are normally made in disguise by the investor by way of instituting a criminal complaint.
In an analysis of the above scenario, the question to be asked is whether the beneficial interest in the money invested lies with the party who received the money or whether there was a fiduciary relationship between the two? The answer could be in the positive. This is because the party receiving the money invested and using it for business is holding it in trust for the investor. This is irrespective of the fact that the business was successful for a specific period of time, or that he also contributed to the business financially, mentally or physically. At best if he contributed financially as a form of partnership, he will be held liable to the extent of the amount invested by the investor along with the anticipated capital if at the end he decided to dishonestly misappropriate the whole capital or convert same to his own use. It is also immaterial if the investor has started reaping the benefit of the business. If however the business resulted into a total loss with no element of misappropriation or conversion from the person who received the money, then an offence of criminal breach of trust may not stand though a different claim may be made by the investor.
- Contracts for management of a property:
This entails a situation where a person is entrusted with dominion over a property but he chose to misappropriate, convert same to his own use or even dispose it. By way of illustration, Party A an owner of a company selling fuel and other petroleum products may entrust Party B with dominion over the company’s property as a manager and saddle him with the responsibility of receiving goods on behalf of the company, selling the products and remitting the proceeds to the company. If Party B misappropriates or converts the products or proceeds of sale to his own use, he can be guilty for criminal breach of trust.
A conclusion will have to be drawn here not because the examples above are exhaustive but because an analogical deduction can be made with regards to cases similar to the above in arriving at a conclusion.
- Challenges associated with the Misunderstanding and Misapplication of the Two Concepts:
The challenges will also be briefly discussed under three headings:
- Challenges associated with investigators:
Those under this category are saddled with responsibility of conducting investigations when an allegation of the commission of crime is reported. These are police officers empowered under the Police Act to investigate arrest and detain persons suspected to have committed an offence. These are the categories of people who are in first contact with complainants or parties aggrieved by a breach. In most of the instances, it is upon a thorough investigation by the police that the elements of the offence can be elicited.
Some police officers are not well abreast with the elements of offences under the Penal Code and thus, they end up assuming that every case of breach of contract can metamorphose into a criminal case of breach of contract. These civil cases often find their way into our courts of law as criminal trials The Defendant who was simply in breach of contract may be subjected to unlawful arrest, detention and even prosecution. This goes contrary to the provision of section of the Police Act, 2020. For the sake of clarity, the section provides: “A person shall not be arrested merely on a civil wrong or breach of contract” This section clearly excludes arrests on exclusive breach of contract cases. The courts also in plethora of decisions frowned against that attitude. In the case of Okafor & Anor vs. A.I.G Police Zone II Onikan & Ors
“The primary duty of the Police by Section 4 of the Police Act is the prevention of crime, investigation and detection of crime and the prosecution of offenders: IBIYEYE vs. GOLD (2012) ALL FWLR (PT 659) 1074. The Police is not a debt recovery agency and has no business to dabble into contractual disputes between parties arising from purely civil transactions.”
- Challenges associated with Prosecutors:
At this stage, it depends on whether or not the prosecutor is a legal practitioner. A non legal practitioner prosecuting before a court may not have the capacity to study the case diary and formally issue a legal advice in favour of termination of the criminal case where it is observed that the case is purely civil in nature. Notwithstanding, the prosecutor can still opt for other alternatives to terminate the First Information Report (F.I.R) under the law.
Where the prosecutor is a legal practitioner from state ministry of justice, a formal legal advice is expected to be issued to terminate a criminal case where a prima facie case cannot be established or where the case is purely civil in nature.
If any of the prosecutors fail to discharge his responsibilities accordingly, a Defendant may be end up been prosecuted maliciously.
- Challenges faced by the Courts:
At the courts, Defendants who ought not to have been charged for criminal offences are being brought either deliberately or negligently. The primary duty of the court is to adjudicate and not to step into the shoes of either the investigators or prosecutors. The court may have to conduct such trials and can only state its ruling at the stage when the prosecution has closed its case while framing a charge or in the cause of delivering judgment at the end of the case after the closure of defence (where the case was initiated by a formal charge).
What could be more time conducting a trial sometimes for years against a Defendant only for the court to discharge and acquit him at the end of the day on the basis that the case is purely civil in nature?
- Challenges related to Complainants:
A Complainant who was not advised accordingly will waste more time pursuing a fruitless exercise (which may extend to many years) in a criminal trial when he could have taken appropriate measures from the onset to seek for the appropriate remedy.
On the other hand, Defendants discharged and acquitted by courts who have been frustrated by the rigors of trial often retaliate by instituting civil actions for malicious prosecution against the prosecuting body and even the Complainants.
I am not unmindful of the fact that some Complainants prefer to see the Defendants arrested and detained by security officials for a breach of contract (though without any criminal flavor) simply because they believe doing so will fast-track the return of their property or refund of their money to them by the Defendants.
I hope to conclude on this point by making reference to the case of ONAGORUWA vs. STATE where TOBI J.S.C held as follows:
“There is no law known to me where a breach of an agreement between two parties, which has no element of criminality, can result in a criminal charge and subsequent conviction. At best, it can be a breach of a contractual relationship which the criminal law lacks legal capacity or competence to enforce and punish.”
1.4 Appropriate Remedy for an aggrieved Complainant where the Elements of Criminal Breach of Trust could be established from a Breach of Contract.
The need for more enlightenment on the most appropriate remedy for a Complainant stems out of the fact that criminal cases do not compensate fully compared to civil cases. Upon a successful conclusion of a criminal trial, a Defendant may be ordered by the court to pay compensation to the Complainant. Other punishments like fine and imprisonment in a critical sense do not in any way restore the Complainant to the position he was before the cause of action arose. This is in addition to the fact that the punitive sanctions may not take away the pains and disappointments resulting from the breach. It does not also contemplate payment of specific, general or even anticipatory damages to the Complainant. These problems necessitated the series of calls for a reformation of the criminal justice system in Nigeria to accommodate some reparatory measures. In the case of FRN Vs. LALWANI & ORS , Mbaba JCA made an obiter in that regards in the following words:
“I should however add by way of comment that there have been, in recent times, some public outcry for the need to reform or review the Criminal Justice System in our country, so that victims of crimes can also receive remedies or reparation, personal to them, in addition to punishment for the criminal conduct, which only satisfies the interest of the State in leving the prosecution. While such progressive reformations or reviews are yet to be made, to incorporate personal remedy for victims of crime into criminal prosecution, there is, obviously, nothing judicially oppressive, in my view, for a victim of criminal action maintaining a civil claim for recovery of pecuniary or personal relief from the suspect of the criminal action, which gave rise to the criminal trial, and the civil claim can go on, side by side, without clashes on dates of hearing, which the counsel concerned can always arrange with the consent of the Court(s) trying the causes…”
The most frequently asked question is whether the pendency of a criminal case in court against the Defendant can prevent a Complainant from seeking a civil remedy where the facts give rise to both criminal and civil liabilities?
In an attempt to answer the above, reference will be made to the old common law position in the English case of Smith V. Selwyn which gave rise to what was known as the rule in Smith V. Selwyn. By way of summary, the rule states that a Plaintiff who has alleged the commission of a felony against a Defendant cannot make that felony the basis of a civil action unless the Defendant has been prosecuted in the criminal trial. The notable exception is where the Plaintiff can show some good reasons devoid of his fault why the prosecution has not taken place. Thus, it was the practice of the Courts to stay proceedings in the civil action until the criminal prosecution was finally completed.
This rationale behind the position was to ensure that offenders do not circumvent prosecution by the mere fact that the Plaintiff has recovered the property taken away or has been fully compensated in a civil case for that purpose. ABIRU JCA while making reference to the case of Smith v. Selwyn in the case of FRN vs. Lalwani & Ors supra made the following observation:
“The history of the question involved in the case of Smith V. Selwyn shows that it has at different times by different authorities been resolved in three distinct ways; namely:
- That the private wrong and injury has been entirely merged and drowned in the public wrong and therefore no cause of action ever arose and could arise;
- That although there was no actual merger, it was a condition precedent to the accruing of the cause of action that the public rights should have been vindicated by prosecution of the felon; and
- The third and the most recent view is that there is neither a merger of the civil right nor is it a strict condition precedent to such right that there shall have been a prosecution of the felon, but that there is a duty imposed upon the injured person, not to resort to the prosecution of his private suit to the neglect and exclusion of the vindication of the public law.
See Midland Insurance Co V. Smith (1880-81) 6 QBD 561 and Ndibe V. Ndibe (1998) 5 NWLR (Pt 551) 632 . It is essential to note that in none of the three stated instances or ways of application of the rule in Smith V. Selwyn was the criminal prosecution ever struck out, stayed or prevented from proceeding because of a pending civil ligation on the same transaction of the criminal charge. It was always the civil action that had to await the criminal prosecution – see the cases of Ndudi V. Aniglo (1958) NRNLR 96, Haco V. P V Udeh (1959) NRNLR 61, Ibekwe V. Pearce (1960) NRNLR 12.
Further, the said rule in Smith V. Selwyn was considered anachronistic and was abolished in England by the Criminal Justice Act 1967. There are authorities of our Court of Appeal that are of the view that the rule is no longer applicable in Nigeria…..Thus, apart from specific local legislations such as the Tort Law of Anambra State, as was noted by the Court of Appeal in Ndibe V. Ndibe supra, Okafor V. Madubuko supra, there is nothing preventing a simultaneous prosecution of a criminal charge along with a civil suit arising from the same transaction. And even where such specific local legislations exist, it is the civil matter that awaits the criminal prosecution, and not vice versa.”
This position was subsequently endorsed by later decisions of the Court of Appeal such as the case of Senator Peter Nwaoboshi & Ors vs. FRN Equally, in the case of Abaver vs. ALAGA, OHO JCA has this to say:
“… the rule in SMITH VS. SELWYN (supra) is no longer good law in Nigeria as it has ceased to apply in Nigeria. The rule has also been abolished in Britain where it originated from, as it was abolished by the Criminal Justice Act 1967. Its non-applicability in Nigeria is also in view of the fact that it is a breach of the provisions of the Nigerian Constitution, 1999 (As amended) and other statutes such as the Criminal Code Act 2004 and the Interpretation Act 2004. Instructive in this regard are Sections 6(6) (b), 17(2) (e) , 46(1) and 315 (3) of the 1999 Constitution of the Federal Republic of Nigeria (As amended) , which guaranteed a persons right of access to Court.”
However, it should be pointed out that some of the above authorities contemplate a situation where a criminal case is to be instituted against a Defendant during the pendency of a civil suit involving the same facts. .
On the flip side, it will also be important to consider the position of the law as to whether a civil action can be instituted against a Defendant who is being prosecuted in a criminal trial involving the same sets of facts and whether the two can be carried out simultaneously? Mbaba JCA further held in the case of FRN vs. Nwaoboshi that:
“…While such progressive reformations or reviews are yet to be made, to incorporate personal remedy for victims of crime into criminal prosecution, there is, obviously, nothing judicially oppressive, in my view, for a victim of criminal action maintaining a civil claim for recovery of pecuniary or personal relief from the suspect of the criminal action, which gave rise to the criminal trial, and the civil claim can go on, side by side, without clashes on dates of hearing, which the counsel concerned can always arrange with the consent of the Court(s) trying the causes. It cannot be imagined that a criminal trial is a statutory bar to civil prosecution over a civil liability, where the criminal conduct also gave rise to civil remedy to a person who is a victim of the criminal conduct, entitled to recover damages………………………………………………
I believe that contemplates both Civil and Criminal remedies in any given situation, and there is no law stipulating that civil action should abate when a criminal action relating to it goes on. Both civil and criminal Suits can go on, side by side, provided they are not initiated in a manner that can amount to abuse of the process of Court…”
The authorities relied upon by Hon. Justice Mbaba in arriving at the above opinion are section 6 (6) (b) of the Constitution of the Federal Republic of Nigeria, 1999 as amended) and sections 134 and 135 (1) & (2) of the Evidence Act, 2011.
According to the learned Justice, the Evidence Act appears to have made provisions for such trials (that is, criminal and civil) side by side, when it provided different standard of proof for each. Section 134 of the Evidence Act provides that the burden of proof shall be discharged on the balance of probabilities in all civil proceeding. Section 135 (1) on the other hand provides that where the commission of a crime by a party to any proceeding is directly in issue in any proceeding, civil or criminal it must be proved beyond reasonable doubt. Section 135 (2) further provides that the burden of proving that any person has been guilty of a crime or wrongful act is, subject to Section 139 of this Act, on the person who asserts it, whether the commission of such act is or is not directly in issue in the action.
Equally, section 6 (6) (b) of the Constitution provides that the judicial powers of the Court shall extend to all matters between persons, or between government or authority and to any person in Nigeria, and to all actions and proceedings relating thereto, for the determination of any question as to the civil rights and obligations of that person.
This position has been maintained by the Appellate Court in situations where certain crimes may also give rise to a claim in tort. In the case of Abaver Vs. Alaga supra, OHO JCA further held as follows:
“The relevant question that should perhaps, be addressed at this point is whether there is in existence any principle of law which precludes the Respondent from seeking a civil remedy for assault against the Defendant either simultaneously during the pendency of the criminal trial or even after his conviction and sentence by the criminal Court had been set aside on Appeal.
In Nigeria, the position remains that certain crimes also double as tortuous acts are therefore not only prohibited and punishable by the criminal Court but are also actionable as civil wrongs in the regular civil Courts. Some examples are the crime of assault as in the instant Appeal, while others are causing wrongful death through fatal accident cases, defamation and false imprisonment, which are torts and as well as crimes. In matters of this nature, the victim of a persons act, which has caused injury and damage, may therefore choose to seek remedy before the criminal or civil Courts.
The position is that a person can be on trial for both the criminal aspect and as well as the civil aspect at the same time. In such cases, the remedies are therefore concurrent; while the accused persons tort-feasor might be imprisoned for the crime committed, he could at the same time pay damages to the Plaintiff for the tort committed. See the popular O. J. SIMPSON trial officially titled PEOPLE OF THE STATE OF CALIFORNIA vs. ORENTHAL JAMES SIMPSON decided 3rd October, 1995 in Los Angeles, California in the U.S…”
Part of the authorities relied upon by the learned Justice Oho in arriving at the decision above was the provision of the Interpretation Act which is very imperative. The section provides thus “…an enactment shall not be construed as preventing the recovery of damages in respect of injury attributable to any act by reason only of the fact that the enactment provides for a penalty, forfeiture or punishment in respect of the act.” R
In dismissing the appeal, Hon. Justice Oho held thus:
“Apart from the clear position of our law, it does not even seem to be a sensible thing to stop a plaintiff from instituting an action merely because the criminal action on the same matter has not been prosecuted. Certainly, a man who is aggrieved should have nothing to do with a criminal matter before instituting a civil action. The criminal matter is the concern of the State, so to say, while the civil matter is the concern of the aggrieved individual.
See also the cases of NDIBE vs. NDIBE (1998) 5 NWLR (PT. 551) 632; OKAFOR vs. MADUBUKO (2000) 1 NWLR (PT.641) 473; EKERETE vs. U. B. A. (2005) 9 NWLR (PT.930) 401. As noted by this Court in these cases, it is not part of Nigerian law that a complainant who runs to the Police to report a case does not have the right to further institute civil proceedings either simultaneously or subsequently even where the criminal charge and civil wrong have arisen from the same cause of transaction.”
The position of the law in Nigeria is now settled considering the clear provisions of the Administration of Criminal Justice Act, 2015 which was adopted by many states. Section 320 (1) & (2) of the Act is very apt in this regards. It provides as follows:
“320 (1) At the time of awarding compensation in any subsequent civil suit relating to the same matter, the court shall take into consideration any sum paid or recovered as compensation under this section.
(2) the pendency of criminal proceedings shall not be a bar to a civil action in respect of the same subject matter.”
The above provision was copiously adopted and inserted into the Kano State Administration of Criminal Justice, Law, 2019 under section 321 (1) & (2). Subsection (1) of both the Act and the Law acknowledge and accommodate the possibility of having a civil suit even after successful completion of a criminal trial. Subsection (2) on the other hand allows for the existence and prosecution of both civil and criminal trial simultaneously.
Thus, where the elements of criminal breach of trust can be established from a breach of contract, the complainant reserves the right to choose either to lodge a complaint to police for a criminal trial to be instituted or to institute a civil action or even to pursue both simultaneously.
- Conclusion & Recommendations:
This paper succeeded in identifying the two major concepts of criminal breach of trust and breach of contract, their major differences and their relationship. It equally analyzed the challenges associated with the misunderstanding and misapplication of the two concepts in terms of investigation and prosecution. The paper equally provided an indepth analysis on the appropriate remedy for a complainant when elements of criminal breach of trust could be found from a breach of contract. From the challenges identified in the course of analyses, the following recommendations are made:
- Police officers saddled with the responsibility of investigation should abreast themselves with the two concepts with a view to advising Complainants who approached them with a criminal complaint appropriately especially where the complaint involves a civil case of breach of contract without any element of criminality. The law frowns against the use of the Nigeria police Force as a debt recovering agency. See also the provisions of section 32 (2) of the Police Act, 2020 which prohibits the arrest of a person based on a civil wrong or breach of contract.
- Prosecutors who are legal practitioners from the State Ministry of Justice owe a duty to the State to thoroughly study case diaries handed over to them by the police and to issue legal advice timorously where the case involves a breach of contract without any element of criminality so that the Defendants will be discharged without passing through the rigors of trial.
- Complainants should desist from using the police force as a machinery to recover property or money which is subject of a breach of contract from Defendants. This has often led to actions for malicious prosecution and enforcement of fundamental rights involving huge claim for damages by Defendants who have been discharged and acquitted by the court for the offence of criminal breach of trust.
- Private legal practitioners as ministers in the temple of justice also have a role to play in advising their clients aggrieved by a breach of contract appropriately on the most appropriate measure to be taken considering the facts and surrounding circumstances of each case.