REGISTERED TRUSTEES OF CHAPEL OF BETTER HOPE MISSION v. OBINMA
(2020)LCN/15323(CA)
In The Court Of Appeal
(KADUNA JUDICIAL DIVISION)
On Tuesday, July 07, 2020
CA/K/50/2017
Before Our Lordships:
Hussein Mukhtar Justice of the Court of Appeal
Saidu Tanko Hussaini Justice of the Court of Appeal
Oludotun Adebola Adefope-Okojie Justice of the Court of Appeal
Between
THE REGISTERED TRUSTEES OF CHAPEL OF BETTER HOPE MISSION APPELANT(S)
And
MRS. ESTHER OBINMA RESPONDENT(S)
RATIO
WHETHER OR NOT A PARTY WHO HAS FREELY ENTERED INTO A CONTRACT CAN TAKE ADVANTAGE OF IT BY ESCAPING HIS/HER RESPONSBILITY
The law will not allow a party who has freely entered into a contract, take advantage of it but escape his/her responsibility to the contract by resiling to fulfill his/her own part of the bargain. The Supreme Court have held the case of AG RIVER STATE VS AG AKWA IBOM STATE (2011) 8 NWLR (PT 1248) Pg 31 that where parties have entered into a contract or agreement voluntarily and there is nothing to show same was obtained by fraud, mistake deception or misrepresentation they are bound by the provisions or terms of the contract or agreement. Courts of law are enjoined to respect the sanctity of agreement reached by parties where they are in consensus ad idem. PER ADEFOPE-OKOJIE, J.C.A.
THE DUTY OF THE COURT IN INTERPRETING TERMS OF A CONTRACT
In the interpretations of terms of contracts, it is settled that the ordinary meaning should be given to the words used, except there is some ambiguity. It is also settled canon of the interpretation of contracts that neither the parties nor the Courts can read into a contract a term on which there is no agreement. See Idufueko v. Pfizer Products Ltd Supra; Uwah v. Akpabio (2014) 7 NWLR Part 1407 Page 472 at 489 Para D-E per M.D Muhammad JSC; Nneji v. Zakhem Con (Nig.) Ltd (2006) 12 NWLR Part 994 Page 297 SC at 319-320 Para G-A per Tobi JSC. PER ADEFOPE-OKOJIE, J.C.A.
OLUDOTUN ADEBOLA ADEFOPE-OKOJIE, J.C.A. (Delivering the Leading Judgment): The Appellant, who was the Plaintiff in the Court below, took out a Writ of Summons before the High Court of Kaduna State, against the Respondent, who was the Defendant, for the following reliefs:
i. A DECLARATION that the Plaintiffs are the beneficial owners of property known as BF 15 Akwanga Road, Nassarawa Kaduna and covered by Kaduna State Local Government Certificate of Occupancy No. KCH/A/000274 having purchased same from the former owner, Okafor Mathew.
ii. AN ORDER of this Honourable Court directing the Defendant to immediately vacate and surrender vacant possession of part of the premises occupied by the Plaintiff known as BF 15 Akwanga Road, Nassarawa, Kaduna to the plaintiffs.
iii. Cost of the suit.
In proof of its claim, the Appellant called a sole witness, Pastor Samuel Duniya, one of its Trustees, while the Respondent testified and called two witnesses. The Court, in a judgment delivered by Bilkisu Mohammed J on 8/6/2016, dismissed the claim of the Appellant.
Aggrieved, the Appellant filed a Notice of Appeal on 22/8/16. This was followed by the transmission of the Record on 1/7/17, though deemed as properly filed on 24/6/20.
In the Appellant’s Brief of Arguments, settled by Godwin Ochai Esq of Godwin Ochai & Co, filed on 25/9/18 and deemed properly filed on 24/6/20, four (4) issues for determination were formulated, as follows:-
1. Whether from the circumstances of the transaction, the Respondent complied or abided by the terms of exhibit D1.
2. Whether there was proof of renovations carried out by Respondent to the tune of over Two Million Naira only before the Court and assuming but not conceding that there was such renovation, whether it is not in breach of the Agreement (EXHIBIT D1).
3. Whether an agreement for the sale of landed property can be concluded orally and without agreeing on the purchase sum.
4. Whether from the circumstance of this case, there could be said to be a valid sale of the property. Distilled from ground 5.
In the Respondent’s Brief of Arguments settled by T.A. Olorisade Esq. of T. A. Olorisade & Co. filed on 7/6/19, also deemed as properly filed on 24/6/20, four issues were similarly distilled for argument, as follows:<br< p=”” style=”box-sizing: inherit; margin: 0px; padding: 0px;”>
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- Whether the owners/Vendors of the property acted dishonestly and in breach of the terms in Exhibit D1 which stipulates that the respondent shall be given the first option to purchase the property and went behind the respondent to sell the property to the appellant.
2. Whether the respondent abided by the terms of Exhibit D1 and even altered her position as a result, by not only carrying out the renovations and developments on the property but also made payments for the purchase of the property after being approached by the vendors.
3. Whether the respondent breached the terms of exhibit D1 on the amount to be expended on renovation of the property or not.
4. Whether the respondent carried out the expected renovations as a result of which she expended the sum of N2.7m or not.
The sole issue for determination and under which the issues raised by the parties can be subsumed, is the following:
Whether or not the Lower Court was in error to have held that the transaction entered into between the Vendor and the Appellant was invalid in the face of Exhibit D1, the Tenancy Agreement between the Vendor and the Respondent?
The subject matter of this appeal is a developed plot of land situated at No BF. 15, Akwanga Road, Nassarawa Road, Kaduna, Kaduna State, covered by a Local Government Certificate of Occupancy No KCH/A/000274 in the name of one Mr. Matthew Okafor. Both parties to the appeal claimed that they were originally tenants of the said Mr. Matthew Okafor, hereafter referred to as “the Vendor” but subsequently bought the property from the same vendor.
The Appellant claimed that the previous owner, desirous of relocating to his home town in the East, sold the property to it at a total cost of N3.5M (Three Million Five Hundred Thousand) Naira and that it made a deposit for the purchase of the property in the year 2006 and eventually completed payment for the same in the year 2008.
The Respondent on her own part alleged that prior to her entry into the property in the year 2003, the property was an abandoned and uncompleted building in a state of complete waste and was a refuse dump. She relied on a tenancy agreement she had with the Vendor, dated 11th August, 2003, prior to her entry on the property. Pursuant to the said tenancy agreement, she was permitted to complete the structures on the disputed property at her own expense and her rents deducted annually from the total cost of renovation. It was agreed that in the event that the owner decides to sell the property, she would be given the first option to purchase the property, being the person who constructed the same.
It was also her case that having renovated and developed the property at her own expense, the owner, Mr. Matthew Okafor and his late father approached her in 2007 to purchase the property for N3M (Three Million Naira) and to start making instalmental payments for this purpose.
Arguing his issues for determination, the learned Counsel to the Appellant contends that, assuming it be true that the Respondent spent N2,700 on the property, this expenditure was contrary to the agreement which states that the Respondent should spend not more than N500,000.00. Parties, he said are bound by the contract they entered into, citing among other authorities, the cases of Idufueko v. Pfizer (2014) 12 NWLR (PT 1420) 96; BFI Group Corp v. BPE (2012) Vol 6-7 (Pt 111) MJSC 124.
There is also no proof, Counsel submitted, that the Respondent spent the amount alleged. There was also no valid sale of the land as held by the trial Judge, as, apart from the Tenancy Agreement, there is nothing before the Court to show that the property was actually offered for sale to the Respondent or that any sum was agreed as purchase price. No written offer to buy the property, as stated in the Tenancy Agreement was tendered. Counsel cited the case of Mini Lodge Ltd V Ngei (2009) 12 MJSC (PT 11) P. 56 @ SS PP 87-88 PARAS E-C on the component parts of a contract, submitting that the Respondent did not prove the existence of the essential elements of a contract, nevertheless, the trial judge proceeded to hold that the Respondent had purchased the property. This was as against the Appellant who did not only show that the Appellant and the former owner of the property had a conclusive agreement, pursuant to which the Appellant paid the purchase price and executed a Deed of Assignment but also that the original documents of the property were handed to the Appellant.
Appellant’s Counsel pointed to the Respondent’s position that the former owners offered the property to her in 2007 and that she should start paying instalmentally, contending that even though she produced no agreement to that effect, she only paid the sum of N600,000.00 (Six Hundred Thousand Naira) from 2007 to 2013 when the suit was filed, contrary to the legal requirement that a contract should be executed within a reasonable time, citing the case of NBCI V. Integrated Cross Ltd (2005) VOL 3 MJSC 40.
The Respondent’s Counsel, citing the case of Metibaiye V Narelli Int’l Ltd (2009) 16NWLR PART 1167 PAGE 326 AT PAGE 349 PARA A, per Aboki, JCA, submitted that even though Exhibit D1 is a tenancy agreement, it is a contractual agreement governed by the laws of contract. Enumerating the terms of the contract, he submitted that there was no evidence from the Appellant that any of the conditions stipulated before the vendor could sell the property was complied with. He also submitted that the terms of Exhibit D1, the Tenancy Agreement, was binding on the parties and was rightly held by the lower Court to have been breached. He cited A.G Ferrero & Co. Ltd V H.C. (Nig) Ltd (2011) 13 NWLR Part 1265 Page 592 At 606 Paragraph H per Tabai, JSC, Ifeta V S.P.D.C (Nig) Ltd (2006) 8 NWLR Part 983 Page 585 at Page 605 Paragraph A.
He submitted further that the vendor, having undertaken by his contract with the Respondent to give her first option of purchase by the Agreement of 11/8/2003, went behind to collect part payment from the Appellant in 2006, only to collect payment on the property from the Respondent in 2007, thereby resiling from the terms of the Agreement, which he cannot do. He cited the cases of A.G. Rivers State v A.G Akwa Ibom State (2011) 8 NWLR part 1248 page 31 at page 83 paragraphs B-C and A.G Nasarawa State v. A.G. Plateau State (2012) 10 NWLR part 1309 Page 419 at 458 Paragraph B-D. Counsel submitted, quoting from the Tenancy Agreement, that by the agreement, the Respondent was not limited to an expense of N500,000.00 in renovating the premises and by her evidence, carried out renovations of not less than N2.7 Million. The Appellant, not having sought a visit to the locus to see the Respondent’s developments on the land, was in no position to dispute the same.
From the undisputed facts in this case, the parties were tenants on the land in dispute. The Respondent sometime in 2003 entered into a Tenancy Agreement with the Vendor and his father Mr. Henry Okafor Aroh, the owners of the land, which land was then a refuse dump with an uncompleted building. She constructed the property and established a school thereon. In 2007 she was approached by the Vendor and his father to purchase the land for N3 Million, with an agreement for instalmental payment. She made payments of N400,000.00 and N200,000.00 in April and June 2007 respectively. She later got information that the landowners were taking steps to sell the property to the Appellant. Solicitors on her behalf wrote to the Appellant letter dated 25/5/2007 warning him of the prior commitment of the Vendor to the Respondent. She subsequently instituted an action in 2012 in the High Court of Kaduna State against her Vendor (Exhibit D7) in Suit No. KDH/KAD/668/12 in which the Court, coram M.T.M. Aliyu J, following the delivery of a considered judgment, made the following orders:-
“1. A declaration that as agreed by the parties in exhibit 2 the plaintiff should be given 1st option to purchase the property known as No. BF 15 Akwanga Road Nassarawa Kaduna where she has her school Febun Schools.<br< p=”” style=”box-sizing: inherit; margin: 0px; padding: 0px;”>
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2. An order that the plaintiff should be allowed to pay balance of the purchase price.
3. The defendants jointly and or separately are restrained by themselves, their agents, servants from selling the property to any party before the plaintiff is given option to complete payment.”
The Appellant’s witness, Pastor Samuel Duniya, however contends that further to the offer of sale to them of the property for N3.5M, he paid the sum of N100,000 as part payment on 11/9/2006 and another payment of N800,000 on 20/5/2007. The balance was paid on 28/2/2008, whereupon the Vendor handed over the original title documents, being the original Kaduna State Government Certificate of Occupancy and the agreement with which he became seised of title to the land. A Deed of Assignment was executed between them. He thus argues that by the time the judgment of the Court as delivered, on 21/5/13, the transaction between him and the Vendor had concluded.
The lower Court deliberating on this state of affairs presented before it, held as follows, at Pages 163-164 of the Record:-
“ …..by the evidence led above and the fact that there is no evidence before the Court that exhibit D1 was entered into involuntary or that same was obtained by fraud or mistake by the parties that is the Defendant and the owners/vendors of the property in the dispute as already stated, the terms of exhibits D1 are binding on the parties therein. It is pertinent to note however, that while the Defendant abided with the terms in exhibits D1 and even altered her position as a result, by not only carrying out development in the property in dispute, but also made part-payments for the purchase of the property after been approached by the vendors, the owners/vendors on their part, acting dishonestly and in breach of the terms of exhibit D1 which stipulates that the defendant should have first option to purchase, went behind her and sold same property to plaintiff. They (the vendors) collected money over the same from both parties that is, the Defendant and the Plaintiff. This action of the vendors to say at least is fraudulent.
As for the Plaintiff, being a tenant in the property in dispute as the Defendant and having seen the development carried out by her (the Defendant) it behoves on it vide its trustee, to have enquired from the Defendant about her stake in the property necessitating the development she carried out so as to know whether or not there is encumbrance of any sort in respect of the property in dispute before entering into any transaction with the vendors for its purchase.
The law will not allow a party who has freely entered into a contract, take advantage of it but escape his/her responsibility to the contract by resiling to fulfill his/her own part of the bargain. The Supreme Court have held the case of AG RIVER STATE VS AG AKWA IBOM STATE (2011) 8 NWLR (PT 1248) Pg 31 that where parties have entered into a contract or agreement voluntarily and there is nothing to show same was obtained by fraud, mistake deception or misrepresentation they are bound by the provisions or terms of the contract or agreement. Courts of law are enjoined to respect the sanctity of agreement reached by parties where they are in consensus ad idem.
Therefore, in the circumstance and in the light of the evidence led and the law, the vendors who are in breach of the terms in exhibit D1 cannot be allowed to take advantage of same to the detriment of the Defendant. Having allowed the Defendant to alter her position they are estopped from acting contrary to the terms of exhibit D1 and therefore the transaction they entered with the Plaintiff in the face of exhibit D1 in respect of the purchase of the property in dispute is invalid. The sales of the property in dispute to the Plaintiff must therefore fail and I so hold.
The lone issue for determination is hereby resolved against the plaintiff and in favour of the Defendant and on the whole I find no merit in the Plaintiff’s claims and same is accordingly dismissed.”
I am in agreement with the lower Court that the Vendor of the property is bound by the terms of the Tenancy Agreement it entered into with the Respondent, which Agreement has not been denounced by the Appellant. The law, as submitted by both Counsel, is that parties are bound by the terms of a contract voluntarily entered into by both of them and cannot depart from its contents. See Idufueko v. Pfizer Products Ltd (2014) 12 NWLR Part 1420 Page 96 at 115 Para C-D per Galadima JSC; Jeric (Nig.) Ltd v. Union Bank Nigeria PLC (2000) 15 NWLR Part 691 Page 447 SC at 462-463 Para G-A per Kalgo JSC; Page 466 Para C per Kutigi JSC (as he then was).
The Appellant has however contended that the Respondent went beyond the N500,000 stipulated in the Tenancy Agreement and can therefore not seek to use this as proof of her investment in the property. There is also no proof that she expended the sum of N2.7Million alleged by her. Furthermore, the sum expended by her has been deducted from her rent on the property. Counsel further contended that there can be no valid sale to the Respondent, having not paid the total purchase price.
It is important at this stage to set out salient terms of this Tenancy Agreement, Exhibit D1.
The Tenancy Agreement was made on the 11th of August 2003 between Mr. Matthew Okafor, referred to as “the Landlord” and “Mrs. Esther Obinma of Fabun Schools”, referred to as “the Tenant”.
Salient terms in the Agreement are as follow:
“AND WHEREAS the Landlord at the request of the Tenant has agreed to let and the Tenant, who is a school proprietress and intends to use the demise (sic) premises as a school has agreed to take from the Landlord all that 16 rooms building/premises at a rental (sic) and subject to the various terms and conditions hereunder contained.
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. That the Tenant shall at her own expenses (sic) bring the premises to completion by erecting the roof which will include the rafters, corrugated iron sheets and asbestos ceiling; erecting doors and windows, flooring etc which job is estimated at N500, 000.00 (Five Hundred Thousand Naira Only) and do such other things that shall be necessary to bring the premises in line with the purpose for which it is intended.
2. That the completion cost of N500, 000.00 shall be deductible annually at N50, 000.00 (Fifty Thousand Naira Only) from the reserved annual rent and the balance after deduction paid to be Landlord.
3. In consideration of the reserved rent of N144,000.00 (One Hundred and Forty Four Thousand Naira only) and the conditions and terms hereinbefore and after contained the Landlord HEREBY lets unto the tenant ALL THAT 16 rooms building/premises TO HOLD unto the tenant from year to year commencing from 15th day of September, 2003 PAYING THEREBY during her tenancy the yearly rent of N144,400.00 or such revised rent as may be mutually agreed upon by the parties by two equal installments in advice after the annual deduction of N50,000.00 by the Tenant shall have been made. The first annual installment having been paid at the execution of this agreement the receipt whereof the Landlord hereby acknowledged.
4. That the landlord shall give the tenant the first option of purchase in writing and the tenant must have rejected such offer in writing or unable to pay the purchase price before the landlord shall throw the offer open to the public.”
Underlining Mine.
The clause which both parties have read interpretations into is clause 4, underlined by me above.
In the interpretations of terms of contracts, it is settled that the ordinary meaning should be given to the words used, except there is some ambiguity. It is also settled canon of the interpretation of contracts that neither the parties nor the Courts can read into a contract a term on which there is no agreement. See Idufueko v. Pfizer Products Ltd Supra; Uwah v. Akpabio (2014) 7 NWLR Part 1407 Page 472 at 489 Para D-E per M.D Muhammad JSC; Nneji v. Zakhem Con (Nig.) Ltd (2006) 12 NWLR Part 994 Page 297 SC at 319-320 Para G-A per Tobi JSC.
I hold there to be no ambiguity in these terms and they shall thus be given their ordinary meaning, which is that before the property can be sold to a third party, the Respondent tenant would have been given in writing the first option to purchase the property. It is only upon her rejection of this offer or her inability to pay the purchase price demanded, that the offer can be thrown open to outsiders. No other interpretation can be given to these terms.
The case of the Respondent, as aforesaid, is that an offer to purchase the property was given to her and that she had commenced instalmental payment, when it transpired that the Landlord was at the same time negotiating with the Appellant, propelling her to seek the intervention of the Court in Suit No KDH/KAD/668/12 (Exhibit D7) seeking to stop her Vendor from selling the property, which suit was successful. That Court, in Exhibit D7, held the Vendor bound by this clause.
It is agreed by me, and as contended by the Appellant, that the Appellant was not a party to that suit and that the sale had been concluded before the date of judgment, which was 21/5/13.
The vital question however is, whether the Vendor had the vires to enter into negotiations to sell, or to actually sell the property, without the rejection by the Respondent of an offer to her of the sale of the property?
I must answer this question in the negative. Without the rejection of the offer of sale by the Respondent, the Vendor, I hold, had no authority to sell the property in dispute and the Appellant could not acquire any title to the said property.
It is of importance that this contract (Exhibit D1) was entered into in 2003 and before 2006, when the Appellant made his first instalmental payment, and later in 2008 when the final payment was made.
Exhibit D1, it is again clear, was made before the 21st day of September 2007 when the Deed of Assignment between the Vendor and the Chapel of Better Hope Mission was executed. It therefore takes precedence over these agreements, I hold.
It is irrelevant to the sanctity of this term, that the Respondent expended in excess of the sum of N500,000 stated, on the property.
What is apparent from the Agreement is the intent by the parties to protect the investment of the Respondent, who, from the unchallenged evidence, completed the building and was using the property as a school. Nothing short of an outright rejection of an offer of sale by her to the Vendor, will give the Vendor the vires to offer the property for sale to the Appellant, I hold.
From the Deed of Assignment (Exhibit P4), however it is stated that the initial payment made by the Appellant of N100,000 (One Hundred Thousand Naira) was on 11/9/2006, a subsequent payment of N800,000.00 (Eight Hundred Thousand Naira) was made on 28/5/2007, further payments of N1,300,000.00 (One Million Three Hundred Thousand Naira) were made on 24/9/2007 and 28/2/2008 respectively. All these payments were made after the Tenancy Agreement, Exhibit D1.
The Appellant, it appeared, in spite of a letter to it on 25/5/2007 by J.D. Jefia & Associates (Exhibit D4) on behalf of the Respondent, informing it of the contract between its client and the Respondent and informing it of payments made by the Respondent in furtherance of that agreement, warning the Appellant of the consequences of failure to take note of the caveat and continuing with the sale, nevertheless proceeded to make further payments of N3.4 Million. It thus had nobody but itself to blame.
I accordingly agree with the lower Court that the Vendor, being in breach of his covenant with the Respondent and having allowed her to alter her position on the disputed premises based on his undertaking, cannot resile from the term in Clause 4 of Exhibit D1 and validly enter into a contract with the Appellant.
I accordingly resolve the sole issue for determination against the Appellant and dismiss this appeal as lacking in merit. The judgment of the lower Court is accordingly affirmed. Parties shall bear their respective costs.
HUSSEIN MUKHTAR, J.C.A.: I read in draft the judgment just rendered by my learned brother, Oludotun Adefope-Okojie, JCA. I agree, on the resolution of the sole issue against the Appellant, that the appeal lacks merit and should be dismissed. I dismiss the appeal and adopt the orders made in the judgment.
SAIDU TANKO HUSSAINI, J.C.A.: The Appellant has herself to blame and none other for the expected consequences for her failure to hearken to the warning that by the existence of exhibit D1 and in particular clause 4 thereto, the Vendor/Land Lord cannot and could not have entered into any valid contract of sale with the Appellant in respect of the subject-matter over which the Respondent had made improvements on and thus altered her position as per Exhibit D1. The agreement between the Respondent and the Vendor or Landlord being first in time, other subsequent negotiations over the same land between the Appellant and the Vendor, was an exercise in futility. This is the hard truth which the Appellants, by force of the law, must accept.
I am in total agreement with the reasoning and conclusion arrived at in the lead Judgment. The appeal indeed lacks merit and I order that the same be dismissed.
Appearances:
Victoria Omajawu Esq. For Appellant(s)
A. Olorisade Esq. with him, Babatunde Taiwo, Esq. For Respondent(s)
