Best (Nigeria) Ltd v. Blackwood Hodge (Nigeria) Ltd & Ors

There are two appeals against the judgment of the Court of Appeal, Lagos Division (‘the court below’ for short) delivered on 22nd July, 1998. The main appeal is against the affirmation by the court below of the decision of the trial court and the dismissal of the appellant/cross-respondent’s appeal. The cross-appeal by the 1st respondent is against the failure of court below to consider the cross-appellant’s brief of argument for the hearing and determination of its cross-appeal against the decision of the trial court which awarded the sum of N75,000:00 as general damages to the appellant.

The appellant, as plaintiff at the Lagos State High Court, sued the 1st respondent claiming an order for specific performance of a contract for assignment of the 1st defendant/respondent’s property at No. 15 Burma Road, Apapa, Lagos as well as an order for inquiry into damages and other consequential orders. It also claimed against the 3rd defendant/respondent an order of injunction preventing any beneficial transfer of rights in the property to him by the 1st defendant.

On his part, the 3rd defendant/respondent averred that he bought the property through the agents of the 1st respondent for the sum of N3.5 million. He claimed that he enjoyed the occupation of the property by virtue of a valid contract and counter-claimed for declaration that he is entitled to be registered as the proprietor of the property and for perpetual injunction.

The relevant facts of the matter should be clearly set out at this point in time. The 1st respondent was the owner of the property situate at No. 15 Burma Road, Apapa, Lagos otherwise known as 11/15 Burma Road, Apapa, Lagos.

P.1

In March 1986, the appellant commenced negotiation with the 1st respondent for the purchase of the stated property and offered the sum of N3 million as purchase price. The appellant also agreed to pay the sum of N450,000:00 to the 1st respondent as consent fee which the 1st respondent will eventually pay to the Lagos State Government.

The appellant, by its letter dated 27th March, 1986 – exhibit B requested the 1st respondent to grant it an interest free loan in the sum of N450,000:00 to enable it pay the cohsent fee. This was rejected by the 1st respondent.

The 1st respondent intimated the appellant that other prospective purchasers have made offers for the purchase of the property. The appellant was informed about an offer of N3.5 million received by the 1st respondent and that the property would be sold to the person who satisfied the desired conditions of sale. On 3rd June, 1986, the appellant and the 1st respondent agreed for the sale of the property in the sum of N3 million on the further term that the appellant would pay same together with the sum of N450,000:00 consent fee which the 1st respondent would pay to the Lagos State Government.

The appellant issued a cheque in the sum of N3 million drawn on the account of one Clix Glow Nigeria Limited but failed to pay the sum of N450,000:00 for the consent fee in accordance with the agreed terms and conditions for the sale of the property.

The 1st respondent was desirous to have a purchaser who would fulfil the conditions of sale instantly. The 3rd respondent had made moves through the 2nd respondent in 1985 to purchase the property and deposited the sum of N1 million. The 3rd respondent agreed to pay the sum of N3.5 million. Sequel to payment of same in full June, 1986, the 1st respondent put the 3rd respondent possession of the property.

P.2

The 1st respondent then refunded the sum of N3 million to the appellant together with the sum of N50,000:00 as extant in Exhibit ‘C’. The appellant was not put in possession of the property by the 1st respondent. The learned trial Judge, in his considered judgment, found that the appellant’s failure to pay the consent fee was in breach of a material condition of the contract to assign the property. The trial court dismissed the appellant’s claims but awarded the sum of N75,000:00 to the appellant as general damages for breach of contract.

The stance posed by the learned trial judge precipitated an appeal as well as a cross-appeal at the court below. The main appeal thereat, had to do with the refusal of the trial court to make an order for specific performance of the contract of purchase of the stated property. The cross-appeal thereat had to do with the award of the sum of N75,000:00 as damages for breach of contract by the 1st respondent which the court below found, difficult to explain since there was no such claim’.

The court below dismissed the main appeal before it filed by the appellant. It found that the trial court was right when it found that a decree for an order of specific performance could not be made. The main appeal was dismissed and the judgment of the trial court was affirmed. The court below kept mute in respect of the cross-appeal by the 1st respondent thereat as no pronouncement was made with respect to the sum of N75,000:00 awarded as damages by the learned trial Judge for an alleged breach of contract by the 1st respondent.

P.3

In a similar fashion, both sides of the divide felt dissatisfied with the stance of the court below. The plaintiff/appellant again filed an appeal in this court. The 1st defendant/respondent filed a cross-appeal. The two (2) appeals shall be treated in seriatim.

MAIN APPEAL

On 2nd November, 2010 when the appeal was heard, learned counsel for each party adopted and relied on the brief(s) of argument as duly filed. A notice of preliminary objection was raised to the competence of the grounds of appeal filed on 21st September, 1998 by the 3rd respondent. It is imperative to consider the propriety or otherwise of the preliminary objection at this juncture.

On behalf of the 3rd respondent it was opined that since the appellant failed to obtain the leave of the Court of Appeal or that of this court on Grounds 1, 2 and 3 of the grounds of appeal and since the said grounds contain grounds of mixed law and fact the court should strike out the grounds of appeal as they are incompetent.

On grounds 4 and 5 of the grounds of appeal, it was submitted that the said grounds offend the provisions of Order 8 rule 2 of the Rules of the Supreme Court, 1985 Cap. 62 Law of the Federation of Nigeria 1990. Learned counsel felt that since the said grounds did not state particulars, they should be struck out. The cases of Ogbechie v. Onoche (1986) 1 NWLR (Pt. 23) 484; Popoola v. Adeyemo (1992) 8 NWLR (Pt. 257) 1; Yaro v. A.C. Ltd. (2007) 10 MJS 21 were cited.

In the appellants’ reply brief, it was pointed out that the appellant sought the leave of this court by an application dated 24th October, 2003 to appeal on grounds other than grounds of law alone and same was granted on 3rd November, 2003.

P.4

The appellant’s counsel on this point stands on a firm ground. It is extant in the records of this court that the desired leave to appeal on grounds other than law alone was granted in chambers on 3rd November, 2003. There is a sealed Order to that effect. With respect, the assertion made to the contrary was dead wrong. In effect, grounds 1, 2 and 3 of the grounds of appeal are competent and remain inviolate. The cases of Ogbechie v. Onoche (supra) and Popoola v. Adeyemi (supra) are not apposite or applicable.

With respect to the objection raised to the competence of grounds 4 and 5 for not being attended by particulars, it is apt to reproduce them below as follows:-

“(iv) The court below erred in law in failing to give any consideration whatsoever to the arguments urged upon it to the effect that the 3rd defendant failed to prove an enforceable contract of sale between him and the 1st respondent and accordingly, his (3rd defendant’s) counterclaim ought to have been dismissed. The court ought to have found that the 3rd defendant did not prove the existence of an enforceable, contract between him and the 1st respondent.

v. In the alternative to ground (iv) the court below erred in law in failing to find that the 3rd defendant was not a purchaser for value without notice since he had notice of the interest of the appellant.”

From a clear reading of the above grounds of appeal, one can see that they contain in-built particulars. There is no ambiguity as to what each ground is complaining about. Where the complaint on a ground of law is clear and succinct, particulars may equate to repetition which is undesirable. Substantial justice must now have pre-eminence over technicality. See: Odoniyi v. Oyeleke (2001) SC 194 at 198; Nwosu v. Imo State Environmental Sanitation Authority (1990) 2 NWLR (pt. 688) 717.

P.5

In short, I find that the grounds of appeal are competent. The preliminary objection raised by the 3rd respondent was ill-tuned and same is hereby overruled and dismissed.

The issues formulated by the appellant are as follows:_

“(1) Whether the court below was correct in holding that there was no enforceable contract between the appellant and the 1st respondent”

Sub-issues to be considered are as follows:-

“(1a) Whether the appellant did unequivocally accept the terms of the 1st respondent’s offer to assign the properties in dispute to them (sic) so that a contract was concluded with the appellant.

(1b) Whether the further offer by the appellant in regard to the payment of the said tax constitutes a non-performance of its contractual obligations such as to render the said contract void or unenforceable.

(2) Whether the decision of the court below affirming the assignment of the properties in dispute by the 1st respondent to the 3rd respondent as a purchaser without notice of the appellant’s interest in the property was correct.

(3) Whether in the circumstance of this case an order of specific performance of the contract is available to the plaintiff or in the alternative whether the court should have ordered an inquiry into damages.”

On behalf of the 1st respondent, the two (2) issues concisely distilled for determination of this appeal read as follows:-

“(i) Whether the court below was right when it held that there was no enforceable contract between the appellant and the 1st respondent/cross-appellant which was capable of grounding a decree of specific performance in favour of the appellant (grounds 1, 2 and 3 of the Notice of Appeal)

P.6

(ii) Whether the court below was correct when it held that the 3rd respondent is bona fide purchaser of the 1st respondent’s property for value without notice of the appellant’s interest in the property (Grounds 4 and 5 of the Notice of Appeal”).”

On behalf of the 2nd respondent, two issues for determination were also couched. They read as follows:-

“(A) Whether the lower court was correct when it held that there was no enforceable contract between the appellant and the 1st respondent which could be enforced by an order of specific performance by the court in favour of the appellant. Grounds (i), (ii) and (iii).

(B) Whether the lower court was correct when it found as a fact that the 3rd respondent was a valid purchaser of the property in dispute without notice of the interest of the appellant. Grounds (iv) and (v).”

The 3rd respondent’s issues for determination are similar to those of the 1st respondent. I do not need to reproduce them so as to conserve time and energy.

With respect to issue one (1), the complaint of the appellant relates to the position mutually taken by the trial court and the court below that there was no enforceable contract between the appellant and the 1st respondent which could be enforced by an order of specific performance by the court in favour of the appellant.

It is basic that to constitute a binding contract, there must be an agreement in which the parties are ad idem on essential terms and conditions thereof. The promise of each party must be supported by consideration. See; Alfotrin Ltd. v. Attorney-General of the Federation (1996) 9 NWLR (Pt. 475) 634 at 657; Yaro v. Arewa Construction Ltd. (2007) 17 NWLR (Pt. 1063) 333 at 389.

P.7

A party as the appellant in this appeal who wants the court to order specific performance of the contract between it and the 1st respondent must depict evidence of compliance with its terms. No court of law should give an order that will enable a party to a contract to breach a material and salient term bf same. See: L.S.D.P.C. v. N.L.S.S.F Ltd. (1992) 5 NWLR (Pt. 244) 653 at 671.

Let me further reiterate the point that a contract ought to be strictly construed in the light of the essential and material terms agreed by the parties. The court should not allow a party to dribble the other party. See Kanu Ltd. v. FBN Plc (2006) 8 MJSC 131.

It is clear to me that a contract between parties may be discharged by breach of a fundamental term by any of the parties. There is no gain-saying the point that a breach of contract is committed when a party to the contract without lawful excuse fails, neglects or refuses to perform an obligation he undertook in the contract or incapacitates himself from performing same or in a way back down from carrying out a material term. See: Adeoti & Anr. v. Ayofinde & Anr. (2001) 6 NWLR (Pt.709) 336.

Where a party to a contract is in breach of a material term of same, the breach gives the aggrieved party a lee-way or an excuse for non-performance of its own side of the bargain. Such a party is at liberty to treat the contract as extinguished or at an end. See: Yadis (Nig.) Ltd. v. G.N.I.C. Ltd. (2007) 14 NWLR (Pt.1055) 584 at 609.

Parties are bound by the terms agreed to in a contract. If the conditions for the formation of a contract are fulfilled by the parties thereto, they will be bound.

P.8

It is not the function of a court to make a contract for the parties or to rewrite the one which they have made. See. UBN v. Ozigi (1994) 3 NWLR (Pt. 333) 385 at 404; Oyenugu v. Provisional Council of the University of Ife (1965) NMLR 9.

In this matter, it is not in contention that the agreement between the appellant and the 1st respondent in respect of the property in dispute was that in consideration of the appellant paying the sum of N3 million together with consent fee (withholding tax) in the sum of N450,000:00 to be paid simultaneously with the purchase price, the 1st respondent would assign the property to the appellant.

The above was confirmed by the appellant’s witness – P.W.1 on page 47 lines 18-21 of the record where he testified as follows:

“I met their Managing Director Mr. Fraser-Allen. He confirmed to me that the property was for sale and quoted the price at N3.5 million. He told me that whoever buys the property would be responsible for the withholding tax.”

Under cross-examination at page 51 lines 31-32 of the record, he admitted that –

“The question of withholding tax is a material part of the contract.”

The 1st DW, Mr. Fraser Allen who negotiated on behalf of the 1st respondent confirmed the evidence of 1st P.W. Mr. Punjabi. He gave evidence that the agreement between the parties was for the payment of the purchase price of N3 million plus the consent fee and/or withholding tax in the sum of N450,000:00 which would be paid by the 1st respondent to the Lagos State Government.

P.9

It is extant from the evidence on record and indeed it was not disputed that the appellant failed to pay the sum of N450,000:00 as agreed by it to the 1st respondent. The appellant showed lack of will or capacity to pay the said amount to the 1st respondent. The appellant applied for an interest free loan from the 1st respondent which refused same. The appellant failed to pay the agreed consent fee, a material and essential term of the agreement between it and the 1st respondent.

It is clear that after failing to pay the consent fee, a material term of the contract, a vital consideration was not met by the appellant which breached an essential term of the agreement.

The appellant reneged on its promise to pay consent fee as same was not supported by consideration. It committed a breach as a fundamental term was not complied with by it. For, without lawful excuse the appellant failed, neglected or refused to perform its obligation as undertaken by it. The 1st respondent is given a lee-way or an excuse for non-performance of its own side of the bargain. The 1st respondent was at liberty to treat the contract as at an end or extinguished. See: Yadis Nig Ltd. v. GNIC (supra). This must be so since it is not the court’s function to make a contract for the parties or to rewrite the one made by them. See: UBN v. Ozigi (supra).

The appellant tried to seek umbrage under the principles of law stated in International Textile Ind. Nig. Ltd. v. Aderemi (1999) 8 NWLR (Pt. 614) 268 at 295 regarding two stages involved in transactions of the transfer on sale of an estate in land – the contract stage and the conveyancing state.

P.10

Therein, it was stated that it is only after a binding contract of sale is arrived at that the need to pursue the procedure for acquiring title will arise. The appellant precipitated a breach by his conduct. There was no binding contract of sale herein. The authority cited by the appellant is not apposite.

The appellant, with the above position as depicted, desires to have specific performance of the agreement between it and the 1st respondent ordered by the court in its favour. Specific performance has been defined in Black’s Law Dictionary Ninth Edition at page 1529 as ‘the rendering, as nearly as practicable, of a promised performance through a judgment or decree; a court ordered remedy that requires precise fulfilment of a legal or contractual obligation when monetary damages are inappropriate or inadequate, as when sale of real estate or a rare article is involved. Specific performance is an equitable remedy that lies within the court’s discretion to award whenever the common law remedy is insufficient.’

In making an order for specific performance, the court must exercise its discretion judicially and judiciously as well. The Judge has to be discreet and balance the interest of both sides properly in his bid to do justice to the contending parties. See: (University of Lagos v. Olaniyan (1985) 16 NSCC (Pt. 1) 98, 113; Eronini v. Iheuko (1989) 2 NSCC (Pt.1) 503, 513; (1980) 3 SC (Pt.1) 30.

Both the trial court and the court below in their wisdom refused to make an order for specific performance in appellant’s favour of the botched contract precipitated by it. There was no conclusive and valid contract upon which an order for specific performance could hang.

P.11

The two courts below exercised their discretion judicially and judiciously as well. No reasonable court, in my considered opinion, would act otherwise. I cannot fault them. I support their stance and affirm it. Order for specific performance in the prevailing circumstance of the matter is most unwarranted.

The two courts below, made concurrent findings which are not perverse. This court will not, in the circumstance, interfere with same. See: Anaeze v. Anyaso (1993) 5 NWLR (Pt. 291) 1; Fajemirokun v. C. B. Nig. Ltd (2009) 5 NWLR (Pt. 1135) 588 at 599.

I accordingly resolve issue one (1) in favour of the respondents and against the appellant.

Issue two (2) is whether the lower court was correct when it found as a fact that the 3rd respondent was a valid purchaser of the property in dispute without notice of the appellant’s interest.

The appellant felt that the 3rd respondent was a purchaser with notice of its interest in the property in dispute. On the other hand, the 3rd respondent maintained that he was purchaser without notice of appellant’s interest; if any exists.

It is extant in the record of appeal that the 3rd respondent paid a deposit of N1 million to the 1st respondent in 1985 for the same property in dispute while the appellant paid in March, 1986. The 3rd respondent’s transaction with the 1st respondent is earlier in time. The appellant admitted that it was informed by the 1st respondent that there were other negotiations going with prospective buyers. On 24th July, 1986 when the action was initiated, the 3rd respondent had completed negotiation with the 1st respondent and paid in full for the assignment of the property. The 3rd respondent, after the completion of purchase price, was put in possession before suit was initiated.

P.12

I strongly feel that the two courts below were correct when they found that the 3rd respondent is a bona fide purchaser for value without notice of any body’s interest. A bona fide purchaser for value is one who has purchased property for valuable consideration without notice of any prior right or title which if upheld will derogate from the title which he has purported to acquire.

Undoubtedly, the 3rd respondent is not caught by the doctrine of lis pendens. He had no notice of the interest of the appellant whose action was initiated after the completion of the contract between him and the 1st respondent who put him in possession of the property. The appellant was never put in possession of the property by the 1st respondent. The 1st P.W said so in clear terms. See: John Obagie v. Alhaji S. O. Olayinka (1987) 3 NWLR (Pt.59) 144; Ogundaini v. Araba (1978) 6-7 SC 55; both cited by the 3rd respondent’s counsel and of moment.

The issue is also resolved against the appellant and in favour of’ the respondents.

I come to the conclusion that the main appeal of the appellant is devoid of merit and same is hereby dismissed.

CROSS-APPEAL

The cross-appeal has to do with the propriety or otherwise of the award of the sum of N75,000:00 as damages to the appellant/ cross-respondent by the learned trial judge after finding that there was no enforceable contract between the cross-appellant and the cross-respondent.

P.13

The issues for determination in the cross-appeal as formulated on behalf of the cross-appellant read as follows:-

“9.01 Whether non consideration by the Court of Appeal of the cross appellant’s appeal and the argument to the cross-appellant’s brief urged on the Court of Appeal in respect of same is proper in the instant case after the Court of Appeal had unanimously found that there is no enforceable contract between the cross-appellant and the cross- respondent.

9.02 Whether the Court of Appeal was right when after finding that there is no enforceable contract between the cross-appellant and the cross-respondent it proceeded to affirm the decision of the trial court in full without setting aside the trial court’s award of damages to the cross-respondent.”

The cross-respondent appears to be at one with the above issues as set out.

On behalf of the cross-appellant, it was submitted with respect to issue 9.01 that a cross-appeal is an independent and distinct appeal which should have been considered as argued in the brief of argument and pronounced upon one way or the other by the court below. The cases of Jamgbadi v. Jamgbadi (1963) 2 NLR 311; (1963) NSCC 281 at 282; Ojogbue v. Nambia (1972) 1 All NLR (Pt.2) 226 at 232; Registered Trustees of AMORC v. Awoniyi (1994) 7 NWLR (Pt. 355) 154 at 150 were cited.

Learned counsel further submitted that the oversight by the court below in not considering the arguments in the cross-appellant’s brief and giving a decision on same caused injustice to the cross-appellant and is in breach of its full right to fair hearing as enshrined in section 36 of the 1999 Constitution of the Federal Republic of Nigeria. The case of Tunbi v. Opawole (2000) 2 NWLR (Pt. 644) 275 at 288 was cited.

P.14

Learned counsel urged this court to hold that the oversight of the court below is improper and prejudicial to the cross-appellant.

Learned counsel for the cross-respondent in its brief pointed it out in its brief that the supplementary record containing the Notice of Appeal contains no court stamp. I see that the said Notice of Appeal is dated 9th October, 1990. Though it contains no court stamp the next page is the official receipt for filing same on 11th October, 1990. There is no big deal in the subtle observation which points at the direction of technicality. Substance should be the vogue,

I should state it right away that the court below goofed by not considering the cross-appeal of the cross-appellant. Irrespective of the decision reached in the main appeal, the court below had an abiding duty to consider the cross-appeal and pronounce on the propriety or otherwise of the same. The court below erred when it failed to consider arguments urged upon it in respect of the cross-appellant’s appeal. See AMORC v. Awoniyi (supra). Such a goof as precipitated by the omission to pronounce on the cross-appeal led to a breach of the cross-appellant’s right to fair hearing as enshrined in section 36(1) of the 1999 Constitution. See: Tunbi v. Opawole (supra) at 288 where Ayoola, JSC pronounced as follows:

“…When such argument has been presented and submissions made, the tribunal should not come to a decision without the consideration of the arguments and submissions. A party cannot be said to have been given his right of fair hearing when his arguments have been shut out from consideration, albeit by mistake.”

In short, it must be stated in clear terms that the oversight of the court below in not considering the cross-appeal is improper and prejudicial to the cross-appellant.

P.15

On issue 9.02, it was submitted on behalf of the cross-appellant that since the court below found that there is no enforceable contract between the cross-appellant and the cross-respondent, the judgment of the trial court awarding damages of N75,000:00 should not have been affirmed. The case of Berliet Nig. Ltd. v. Francis (1987) 2 NWLR (Pt. 58) 673 at 679 was cited. Learned counsel urged this court to act accordingly under the provision of section 22 of the Supreme Court Act to consider the cross-appeal.

Learned counsel for the cross-respondent urged that this court should uphold the concurrent findings of the two courts below with respect to the award of N75,000:00 to the cross-respondent as damages by the trial court as inadvertently affirmed by the court below.

The resolution of this issue is not far fetched. The learned trial judge found that there was no enforceable contract between the cross-appellant and the cross respondent. There can be no breach of a non existent contract. There can be no inducement of a breach that does not exist. One cannot put something upon nothing and expect it to stand. It will definitely collapse. This pronouncement by Lord Denning in Macfoy v. U.A.C. Ltd. (1962) AC 150 at page 160 still continues to rule the waves. It is apposite here.

The sum of N75,000:00 which was awarded by the trial court based on an unenforceable contract naturally collapsed. It must be wiped out vide the full powers of this court vide section 22 of the Supreme Court Act. It is the duty of the Court of Appeal to consider issue properly raised in the grounds of appeal before it. Where this had not been done, as herein, this court can, notwithstanding the fact that the court below has not made any pronouncement, consider the ground of law or facts so raise. Refer to Ukwunnenyi v. The State (1989) 4 NWLR (Pt.114) 131 at 141.

P.16

The two courts below made concurrent findings that there is no enforceable contract between the cross-appellant and the cross-respondent. Such was well made. I completely agree. The right order to be made is one setting aside the award of the sum of N75,000.00 and dismissing the plaintiff/cross-respondent’s suit in its entirety. I order accordingly as I resolve issue 9.02 in favour of the cross-appellant and against the cross-respondent.

In short, the main appeal is hereby dismissed for want of merit. The cross-appeal has merit and is hereby allowed. The appellant in the main appeal shall pay N50,000:00 costs to each respondent.

P.17