MRS. JOSEPHINE DAKOUR & ORS v. LAGOS STATE URBAN RENEWAL BOARD & ORS (2015)

MRS. JOSEPHINE DAKOUR & ORS v. LAGOS STATE URBAN RENEWAL BOARD & ORS

(2015)LCN/8077(CA)

In The Court of Appeal of Nigeria

On Wednesday, the 17th day of June, 2015

CA/L/351/2008

RATIO

LAND LAW: ALIENATION OF TITLE TO LAND; WHETHER A HOLDER OF A STATUTORY RIGHT OF OCCUPANCY CAN ALIENATE THE LAND WITHOUT THE CONSENT OF THE GOVERNOR

Section 22(1) of Land Use Act, 1978 provides:
“It shall not be lawful for the holder of a statutory right of occupancy granted by the Governor to alienate his right of occupancy or any part thereof by assignment, mortgage, transfer of possession, sublease or otherwise howsoever without the consent of the Governor first had and obtained.”
The sale agreement (Exhibits EBA1 and EBA2) which is the contract between the parties to this agreement is to transfer the rights and title of the Appellants to the 4th Respondent. Apparently, the contract is sale of property ipso facto, but the 4th Respondent argued it only indicated an intention to, by subsequent agreement, alienate the land. 4th Respondent further stated that Exhibit EBA2 only states the terms and conditions which parties would have to comply with prior to the stage of assigning the land.
Section 22(1) of Land Use Act is conually clear to the effect that it proscribes all transaction regarding transfer of title in land of a statutory right of occupancy holder to ensure strict compliance with the provisions of the act to obtain the consent of the Governor. Section 26 of the Act makes such transaction null and void. It has been held by the Supreme Court in AWOJUGBAGBE LIGHT INDUSTRIES LTD. v. CHINUKWE [1995] 5 NWLR (Pt. 390) 409 that until parties comply with the performance of an act specified by law, an instrument is not a deed; it is a mere escrow. In the event of the failure to perform the condition so specify by law or to obtain the consent of the Governor before alienation of the property in this case makes the transaction inchoate until the condition is performed or consent obtained. Failure to obtain the consent does not invalidate the agreement but it only makes it a mere escrow and further proscribe alienation of same. Such document cannot transfer title to land but it is not illegal and it will remain a mere agreement without the consent of Governor first had and obtained.
It is trite that the provisions of the Act reproduced above, proscribed the holder of a statutory right of occupancy to alienate his right without the consent of Governor first had and obtained. However, the Act does not prohibit the making of a written agreement to transfer his entire right prior to obtaining requisite consent from the Governor as long as the agreement is subject to the consent of governor being had and obtained. See AWOJUGBAGBE LIGHT INDUSTRIES LTD. v. CHINUKWE (supra); SAVANNAH BANK (NIG.) LTD. v. AJILO [1989] 7 NWLR (Pt. 97) 305; INTERNATIONAL ILE INDUSTRIES (NIG.) LTD. v. ADEREMI [1999] 8 NWLR (Pt. 614) 268; ONAGORUWA v. AKINREMI [2001] 6 NSCQR (Pt. 11) 973. per. ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.

BANKING LAW: CHEQUE; WHEN IS THE REASONABLE TIME FOR A CHEQUE TO BE PRESENTED

What then is a reasonable time for a cheque to be presented? A reasonable time in the presentation of a cheque could be gleaned from the date of issuance of the cheque and the period of validity of the cheque. If a cheque is presented within the period of its validity from its issuance date, then it amounted to due presentation within reasonable time. Sections 45(1) and (2)(b) and 74(a) and (b) of the Bill of Exchange Act provides:
“45. (1) Subject to the provisions of this Act, a bill must be duly presented for payment; and if it be not so presented the drawer and endorsers shall be discharged.
(2) A bill is duly presented for payment if it is presented in accordance with the following rules –
(a) …
(b) where the bill is payable on demand, then, subject to the provisions of this Act, presentment must be made within a reasonable time after its issue, in order to render the drawer liable, and within a reasonable time after its endorsement, in order to render the endorser liable; and in determining what is a reasonable time, regard shall be had to the nature of the bill, the usage of trade with regard to similar bills, and the facts of the particular case; no person authorised to pay or refuse payment can be found there, no further presentment to the drawee or acceptor is required.” (Underlining mine)
“74. Subject to the provisions of this Act –
(a) Where a cheque is not presented for payment within a reasonable time of its issue, and the drawer or the person on whose account it is drawn had the right at the time of such presentment as between him and the banker to have the cheque paid, and suffers actual damage through the delay, he is discharged to the extent of such damage, that is to say, to the extent to which such drawer or person is a creditor of such banker to a larger amount than he would have been had such cheque been paid;
(b) In determining what is a reasonable time regard shall be had to the nature of the instrument, the usage of trade and of bankers, and the facts of the particular case.” (Underlining mine). per. ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.

BANKING LAW: CONFIRMATION OF A CHEQUE; THE IMPLICATION OF THE FAILURE TO CONFIRM A CHEQUE WHERE IT IS REQUIRED AND THE DUTY OF THE ACCOUNT OFFICER TO CONTACT THE DRAWER SEEKING ITS CONFIRMATION

A cheque is a bill of exchange issued by one person called the drawer to another – the drawee to be presented upon demand for payment. It is a written order for payment which becomes money when it is duly presented and exchanged with cash. See UBN LTD. v. NWOYE [1996] LPELR-3388 where the Supreme Court held that a cheque which has not been cleared where clearance is necessary does not put the account of a customer in funds. It only metamorphoses into physical cash on due presentation. See ABEKE v. THE STATE [2007] 3 S.C. (Pt. 11) 105. Confirmation of a cheque is a preliminary step of dishonouring it; where confirmation of the drawer is required, the bank is bound to notify the drawer. See Section 48 of the Bill of Exchange Act. Where confirmation is required and the drawer failed to confirm, then it is deemed that the drawer is not willing to proceed with the payment order on the cheque. In the instant case, the Appellants’ Counsel stated in his Reply to the 3rd Affidavit of Emmanuel Bankole Akinbule in support of the 4th Defendant’s Counterclaim (pages 180-183 of the record) dated 24th October, 2012 that he did inform the 4th Respondent that the cheque was dishonoured. Ordinarily, it is the duty of the account officer or the bank itself to contact the drawer seeking its confirmation. The Appellants’ counsel went extra mile to inform the 4th Respondent about the non-payment. per. ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.

EVIDENCE: WHETHER A COURT OF LAW MUST DISSUADE ITSELF FROM SPECULATIONS

It is trite that a court of law must dissuade itself from speculation or conjecture; otherwise whatever decision reached will occasion a miscarriage of justice. See MOBIL (NIG) LTD. v. PAM [2000] 5 NWLR (Pt. 657) 506 at 527; OGUNYE v. STATE [1999] 5 NWLR (Pt. 604) 518; ITESHI ONWE v. THE STATE [1975] 9-11 SC 23. per. ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.

BANKING LAW: NOTICE OF DISHONOR; HOW A NOTICE OF DISHONOR IS GIVEN

Section 49(e) of the Act is to the effect that notice of dishonor may be given in writing or by personal communication, and may be given in any terms which sufficiently identify the bill, and intimate that the bill has been dishonoured by non-acceptance or non-payment. It is natural in the relationship of banker and customer and between customers to communicate the non-acceptance or payment of a cheque to the drawer. Especially between customers where the cheque is denied payment, it is primarily incumbent on the drawee to spontaneously inform the drawer that the cheque he issued has been denied. In like manner, the bank has a duty of care and confidentiality to exercise in protecting the interest of the drawer. See DIAMOND BANK LTD. v. SECURITIES & FINANCE COMPANY LTD. [2008] LPELR-4035(CA); PBN v. ADEGBESOTE [1986] 3 NWLR (Pt. 4) 707; JOACHIMSON v. SWISS BANK CORPORATION [1921] 3 K.B. 110; AGBANELO v. UBN LTD. [2000] 7 NWLR (Pt. 666) 534; ECOBANK NIG. LTD. v. EKPERIKPE [2013] LPELR-20327. per. ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.

COMMERCIAL LAW: PURCHASE PRICE: WHETHER THERE CAN BE VALID SALE EVEN WHERE THE PURCHASE PRICE IS NOT FULLY PAID

In furtherance to the position of the law as stated while resolving the earlier issues, the law is settled that where the purchase price is not fully paid, there can be no valid sale even if the purchaser is in possession. See OGUNDALU v. MACJOB [2015] LPELR-24458; ODUSOGA v. RICKETT (supra); OGUNBAMBI v. ABOWAB (supra); ONANUBI v. OGUNFOLU (supra); ANWASI v. CHABASAYA [2000] 1 NWLR (Pt. 661) 408; MAINAMA v. DAMBATTA [2014] LPELR-23645; ODUFUYE v. FATOKE [1977] 4 SC 11; NIDOCCO LTD. v. GBAJABIAMILA [2013] 14 NWLR (Pt. 1374) 350; MANYA v. IDRIS [2001] 8 NWLR (Pt. 716) 627. per. ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.

CONTRACT: SPECIFIC PERFORMANCE: CONDITIONS A PARTY SEEKING FOR THE ORDER OF SPECIFIC PERFORMANCE MUST PERFORM

On the issue of the order of specific performance, it is trite that a party who wants the court to order the specific performance of a contract must comply with its terms. The party seeking this order must have shown that he has performed all condition precedent to the performance of the contract. See L.S.D.P.C. v. N.L. & S.F. LTD. [1992] LPELR-1744; ANAEZE v. ANYASO [1993] 5 SCNJ 151; [1993] 5 NWLR (Pt. 291) 1; BEST (NIG) LTD. v. BLACKWOOD HODGE (NIG) LTD. [2011] 5 NWLR 95. per. ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.

LAND LAW: SALE OF LAND; WHEN IS A CONTRACT FOR THE SALE OF LAND SAID TO BE COMPLETED AND CONCLUDED

APPEAL: INTERFERANCE; GROUNDS ON WHICH AN APPELLATE COURT CAN INTERFERE WITH THE PROPER EXERCISE OF DISCRETION OF A LOWER COURT

An appellate court will not ordinarily interfere with a proper exercise of discretion of a lower court except on the following grounds:
1. The discretion was not exercised in accordance with law.
2. That the decision of the lower court is perverse.
3. Where the lower court acted under a misapprehension of the law.
4. Where the lower court acted under a misapprehension of the facts.
5. Where the lower court omitted to take into account matters that are relevant.
6. Where the discretion is exercised on wrong or inadequate materials.
See WAZIRI v. GUMEL [2012] LPELR-7816; OBUEKE v. NNAMCHI [2012] LPELR-7810; OSUJI v. EKEOCHA [2009] ALL FWLR (Pt. 490) 614; ADMIORA v. AJUFO [1988] 3 NWLR (Pt. 80) 1. per. ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.

Before Their Lordships

SIDI DAUDA BAGEJustice of The Court of Appeal of Nigeria

JOSEPH SHAGBAOR IKYEGHJustice of The Court of Appeal of Nigeria

ABIMBOLA OSARUGUE OBASEKI-ADEJUMOJustice of The Court of Appeal of Nigeria

Between

1. MRS. JOSEPHINE DAKOUR
2. MRS. JANNETTE TABET
3. MRS. GEORGETTE METTA
(Suing by their Attorney, Mr. George Nabhan)
4. MR. ANTOUN AZIZ TAYAH
5. MR. EDWARD AZIZ TAYAH
(Suing by their Attorney, Chief Henry Tayah as Executors of the estate of Aziz Assad Tayah)Appellant(s)

AND

1. LAGOS STATE URBAN RENEWAL BOARD
2. THE COMMISSIONER FOR THE ENVIRONMENT, LAGOS STATE
3. THE COMMISSIONER FOR JUSTICE AND ATTORNEY-GENRAL OF LAGOS STATE
4. FAT BAK ENTERPRISES LTDRespondent(s)

ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A. (Delivering the leading Judgment): This Appeal is against the judgment delivered by Honourable Justice O.A. Ipaye of the High Court of Lagos State on the 21st of November, 2003 in Suit No. M/151/2001, wherein the learned Judge countenanced claim (ii) of the counterclaim of the 4th Defendant/Counter Claimant by ordering specific performance to enforce all the conditions and terms of the contract (Exhibit EBA 2).

The Appellants by their Amended Originating Summons dated 8th February, 2002 prayed the court for the following orders:-
(i) An Order that they do recover possession of the parcel of land known as 78, Nnamdi Azikwe Street, comprised in Land Certificate No. L00896 on the ground that they are entitled to possession and that the persons in occupation are in occupation without licence or consent.
(ii) An Order of injunction restraining the 1st to 3rd Defendants from further trespass on the parcel of land in dispute.
(iii) N20,000,000.00 (Twenty Million Naira only) as damages for the act of trespass by the 1st to 3rd Defendants.

The 4th Defendant/Respondent by its Counterclaim dated 12th February, 2002 counterclaimed as follows:
i. An Order restoring the 4th Defendant into possession of the property known as 78, Nnamdi Azikwe Street, Lagos comprised in Title No. L00896.
ii. An Order of specific performance compelling the Plaintiffs to assign all their rights and interests in the property to the 4th Defendant in accordance with the terms and conditions stipulated in the two sale agreements as soon as the 4th Defendants are restored to possession and the present proceedings finally resolved.
iii. Damages for trespass against the 1st & 2nd Defendants.
iv. An Order of injunction restraining the 1st & 2nd Defendants from further trespassing on the said property on the restoration of the 4th Plaintiff to possession.”

The suit was commenced by way of Originating Summons dated the 19th February, 2001 and amended on the 8th February, 2002, brought pursuant to Order 59 Rule 2 of the High Court of Lagos State Civil Procedure Rules 1994. Upon service of the summons, the 1st to 3rd Defendants filed 35 paragraphs Counter Affidavit dated 18th March 2002. The Plaintiffs responded vide 14 paragraphs reply dated 4th September, 2002. Consequent upon an application by the Intervener dated 11th December, 2001 brought pursuant to Order 14 Rules 19 and 20 of the High Court of Lagos Civil Procedure Rules 1994, the court made an order on 5th February, 2003 joining the respondent FAT BAK ENTERPRISES LTD as the 4th Defendant/Counter Claimant.

The 4th Defendant filed a counter-affidavit in support of its counter claim dated 13th February, 2002 in response to the Plaintiffs’ Amended Originating Summons. Other affidavits and further affidavits were deposed to and exchanged between the parties. Consequent upon this, the court entered judgment between the Plaintiff and 1st to 3rd Respondents thus:
“1. I hereby order that the Plaintiffs do recover possession of the parcel of land known as No. 78, Nnamdi Azikwe Street, Lagos comprised in Land Certificate No. L00896 on the ground that they are entitled to possession and that persons in present possession are in occupation without their licence and consent.
2. That the 1st-3rd Defendant shall deliver possession immediately.
3. A perpetual injunction is hereby granted in favour of the Plaintiffs restraining the 1st-3rd Defendants by themselves, servants or agents howsoever from trespassing on the said parcel of land located at No. 78, Nnamdi Azikwe Street, Lagos.”

The case of the 4th Defendant/Counter Claimant is that the Plaintiffs entered into an agreement dated 21st December, 1999 with the 4th Defendant, wherein the Plaintiffs as the registered proprietor of the property known as 78, Nnamdi Azikwe Street, Lagos and comprised in Title No. L00896 agreed to sell all their rights and interest in the said property to the 4th Defendant for the sum of 27 million naira. At the time of the agreement, the 4th Defendant was in partial possession as a tenant of the Plaintiffs property. On 1st January, 2001, the property was gutted by fire.

Thereafter, the agreed purchase price was re-negotiated downward to N20 million. The 4th Defendant/Counter claimant had as at then paid a total sum of N6 million to the Plaintiffs in partial consideration of the agreement to sell. The tenor of payment according to the sale agreement dated 8th March 2001 was that, after the sum of N6 million was paid by the 4th Defendant, the balance of N14 million was to be paid as follows: (a) N3 million to be immediately paid to the Law Firm of M.I. Jegede & Co. as stakeholders. (b) Balance sum of N11 million to be paid within 45 days to the said law firm informing the purchasers that suit No. M/151/2001 between Dakour v. Lagos State Urban Renewal Board & 2 Ors had been concluded.

The 4th Defendant/Respondent issued a cheque dated 28th March, 2001 in the sum of N3 million drawn on International Bank Ltd. The cheque was returned unpaid with the notation ‘DCR’ when it was presented for payment. Payment of N3 million and the additional N11 million has not been made till date.
After hearing argument from both sides, the trial court entered judgment in favour of claim (ii) of the 4th Defendant’s Counter claim.

Dissatisfied with the decision of the court, the Appellants through their Notice of Appeal, dated the 13th day of January, 2004 containing 10 grounds of appeal appealed against the said judgment of O.A. Ipaye, J.

The Appellants’ Brief of Argument is dated 28th of June, 2008 and filed on 1st of July, 2008; same was settled by Taslim Animashaun of M.I. Jegede & Co. The 4th Respondent’s Brief of Argument is dated 4th September, 2009 and filed on 7th of September, 2009, deemed properly filed on 7th October, 2010 and settled by O.V. Iweze of Akinlawon & Ajomo & Co. The Appellants’ Reply Brief is dated 20th of October, 2010 and filed on 21st of October, 2010 and settled by Solomon Adeseun, Esq. of M.I. Jegede, SAN & Co. The 1st to 3rd Respondents did not file brief of argument.

Appellants in their brief of argument distilled five issues for determination of this appeal as follows:
(1) Whether the learned trial Judge was right in seeking to enforce a right of specific performance in favour of the 4th Respondent under a contract that is inchoate and touches and affects land and is viewed by section 22 of the Land Use Act to be null, void and unenforceable?
(2) Whether the learned trial Judge was right in holding that the act of the appellants in presenting the 4th Respondent’s cheque for three million naira dated 28th March, 2002 on 12th July 2002 could amount to due presentation?
(3) Whether the trial court was right in holding that the 4th Respondent had performed its obligations to the Claimant/Appellant on the contract referred to in exhibits EBA1 and EBA2 which had fallen due despite the fact that the Appellant did not receive value for the Respondent’s cheque of N3 million upon presentation for payment to the 4th Respondent’s banker?
(4) Whether the Respondent’s intervention in suit No. M/151/2001 by joining as an Intervener and counterclaimant and the Respondent’s failure to pay the sum of three million naira on the contract constitute breaches of the contractual terms between the parties that entitle the Appellant to view the contract as breached and/or repudiated and/or discharged?
(5) Whether the learned trial Judge was right in awarding the remedy of specific performance against the Appellant in favour of the 4th Respondent?

The 4th Respondent, in its brief of argument, formulated three issues for determination thus:
(1) Whether Exhibit EBA2 is a specifically enforceable agreement?
(2) Whether the 4th Respondent was in breach of clause 2(a) of Exhibit EBA2?
(3) Whether in the prevailing circumstance, the Court of Appeal can interfere with the discretion of the lower court to order specific performance to enforce the terms and conditions contained in Exhibit EBA2?

The three issues formulated by the Respondents seem overlapping with the issues distilled by the Appellants. However, the five issues of the Appellants will be adopted in the determination of this Appeal. Whereas, I shall merge issues one, two and three of the Appellants issues for determination together.

ISSUES ONE, TWO AND THREE:
Learned counsel to the Appellants in his issue one argued that the agreement between the parties contained in Exhibits EBA1 and EBA2 are inchoate for failure to comply with the legal requirements of validity of the contract vis-‘E0-vis the consent of Governor. He relied on Sections 22(1) and 26 of the Land Use Act. He contended further that the contract between the Appellants and the 4th Respondent is one of assignment of interest in land which is coined a sale agreement “to sell and buy the land and building situate and known as 78, Nnamdi Azikwe Str., Lagos comprised in title no. L00896” Counsel relied on AWOJUGBAGBE LIGHT INDUSTRIES v. CHINUKWE [1995] 4 NWLR (Pt. 390) 383 to submit that where parties fail to obtain the requisite consent, no right can arise or be enforced under such contracts.

Appellants’ counsel submits further that Exhibits EBA1 and EBA2 will remain dormant and inchoate until the requisite consent of the governor is sought and obtained. The contract is a mere escrow and does not transfer any title to land. He cited M/S ILEMOBOLA CO. LTD. v. GOV. KADUNA STATE [2000] 7 NWLR (Pt. 666) 633, ratios 3, 4 and 6.

He finally submitted that the court ought not to have sought to enforce the agreement by specific performance since it lacks the consent of governor.

In issue two, Appellants’ counsel submitted that the obligation of the 4th Respondent under the contract was not discharged when the Appellants presented the 4th Respondent’s cheque of N3 million dated 28th March, 2002 for payment on 12th July, 2002. He argued that the Appellants presented the cheque within the statutory six months validity period for presenting a cheque. There is no dispute on the facts that 4th Respondent’s cheque was presented to the bank by the Appellants within six months from the date of its issue. Counsel for Appellants while arguing cited Sections 45(2)(b) and 47(1)(a) of the Bills of Exchange Act that a Bill of Exchange is duly presented when it is presented at a reasonable time after its issue. He submitted that reasonable time in banking practice in Nigeria is six months from the date of issue. He relied on ROTIMI WILLIAMS v. WEST AFRICA PILOT [1961] 1 ALL NLR 866 to submit that the six months statutory period of presenting cheque is a notorious fact; a matter which are well known to the court. He also cited BUKO v. NIGERIAN POOLS CO. LTD. [1966] 4 NSCC 297 at 299 lines 22-25.

Learned counsel to the Appellants contended that the position taken by the trial Judge in holding that the “Appellants in presenting the Respondent’s cheque dated 28th March, 2002 on 12th July, 2002 cannot amount to due presentation” was incorrect. He submitted that the presentation of the cheque by the Appellants was valid, due presentation within reasonable time and humbly urge this court to so hold.

On issue three, Appellants stated the modus operandi under the contract as it relates to payment of money is as follows: (a) N3 million to be immediately paid to the Law Firm of M.I. Jegede & Co. as stakeholders; and (b) balance sum of N11 million to be paid within 45 days of the said Law Firm of M.I. Jegede & Co. informing the purchasers that suit No. M/151/2001 between Dakour & Ors. v. Lagos State Urban Renewal Board & Ors. have been concluded. Learned counsel submitted that the 4th Respondent was found wanting in relation to item (a) above till date. He submitted further that the failure on the part of the 4th Respondent to pay the Appellants N3 million immediately constituted a breach in discharging its obligation. He stated the performance of this obligation, a fundamental term of the contract would have assured the Appellants that 4th Respondent still intend to discharge their further obligations under the contract.

Appellants’ counsel argued that the N3 million stated in the agreement is a fundamental condition of the contract that the Appellants placed heavy reliance upon. He relied on Section 12(2) of the Sales of Goods Law of Lagos State 1958 in defining the “terms and condition.” His submission is that a breach of a condition that parties consider fundamental entitles the innocent party to consider the contract as discharged and repudiated. Counsel for the Appellants submitted that Appellants were only interested in obtaining instant value for the Respondent’s cheque of N3 million upon presentation and are under no obligation to revert to the 4th Respondent for any confirmation. He stated the Appellants complied with bank customs and usages as it relates to presentation for payment which they ought to have been paid. He relied on OGUNLOWO v. OGUNDARE [1993] 7 NWLR (Pt. 307) 610 that the court in interpreting the law must never substitute the provisions of the law with its own reasoning or opinion. Counsel to the Appellants finally submitted that the 4th Respondent has not fulfilled its obligation to pay the sum of N3 million immediately which has fallen due on the contract. He urged this court to so hold.

4th Respondent in its brief of argument under issue one submitted that Exhibit EBA2 is not a deed of sale; it does not alienate or transfer title to land. Therefore, it does not require the consent of the Governor. Learned counsel to 4th Respondent stated that the consent of governor is only needed for the assignment that would post date Exhibit EBA2 which was the provision made in clause 5 of Exhibit EBA2. See INTERNATIONAL ILE INDUSTRIES (NIG.) LTD. v. ADEREMI & 5 ORS. [1999] 8 NWLR (Pt. 614) 268. He contended that Section 22(1) of Land Use Act, CAP L5, LFN 2004 does not prohibit a written agreement to transfer or alienate land so long as such a written agreement is understood and entered into, subject to the consent of the Governor. But that the section prohibits transaction whereby the holder of the statutory right of occupancy purports to alienate as a complete transaction where the consent is not obtained. He relied on AWOJUGBAGBE LIGHT INDUSTRIES LTD. v. CHINUKWE (supra).

Counsel to 4th Respondent analyzed the contents of clause 5 of Exhibit EBA2 that its intention is within the contemplation of the parties that any assignment which would follow the sale agreement would be subject to the consent of the Governor of Lagos State being obtained. He submitted that Exhibit EBA2 does not alienate any right of occupancy over the property in dispute. He further stated that Exhibit EBA2 only stipulates the terms and conditions which both parties would have to abide by before reaching the stage whereby the assignment could take place. 4th Respondent submitted that Exhibit EBA2 contemplates the consent of the governor to a future assignment and it is therefore null and void.

Learned counsel to the 4th Respondent submitted further that the trial Judge did not order specific performance of a Deed of Assignment which did not have the Governor’s consent. The lower court only ordered specific performance to enforce the terms and conditions contained in Exhibit EBA2. Counsel submitted that Exhibit EBA2 is a complete agreement on its own not requiring the consent of the Governor, which prescribes the terms and conditions upon which a future assignment will be effected. He relied on INTERNATIONAL ILE INDUSTRIES (NIG) LTD. v. ADEREMI & ORS. (supra).

On its issue two, 4th Respondent’s counsel argued that the delivery of a cheque of N3 million naira on the 28th of March, 2001 (the date of Exhibit EBA2), satisfies the condition of immediate payment. He cited ABEKE v. STATE [2007] 9 NWLR (PT. 1040) 411 at 426 paras D-E, to contend that issuance of a cheque has certain connotations in law vis-‘E0-vis (a) that of documenting the particular transaction; and (b) as a medium of payment.

Counsel relied on DALEK (NIG.) LTD. v. O.M.P.A.D.E.C. [2007] 7 NWLR (Pt. 1033) 402 at 441 para. A to argue that the operative word in clause 2(a) of Exhibit EBA2 is “immediately” and that it must be given its ordinary and simple meaning. He stated that 4th Respondent issued the cheque on the date of execution of Exhibit EBA2. He submitted that the 4th Respondent is not in breach of the agreement to pay immediately. He argued while citing Section 135 of Evidence Act, C.O.P. & 1 ANR. v. OGUNTAYO [1993] 6 NWLR (Pt. 299) 259 at 268 that the onus is on the Appellants to establish the breach of the 4th Respondent. He stated 4th Respondent could have breached the agreement only if it failed to issue the cheque of N3 million immediately or if it was issued in the knowledge that there were no sufficient funds in the account to give value to the cheque. Appellants nor the bank did not give reason of insufficient fund to give value to the cheque at the time it was presented.

Learned counsel submitted that Appellants’ act of not presenting the cheque immediately is a waiver of their right to receive payment immediately. He cited UNITED CALABAR CO. v. ELDER DEMPTER LINES LTD. [1972] 7 NSCC 490 at 497. Counsel contended that 4th Respondent was not in breach of its obligation to pay immediately and does not have any obligation to pay the N3 million at a later date. However, he stated that Appellants failed to duly present the cheque within a reasonable time. He cited Section 74(a) Bill of Exchange Act, CAP B8, LFN 2004 and DIKE v. ACB LTD. [2000] 5 NWLR (Pt. 657) 441 to argue that in determining what a reasonable time is, regard should be made to the nature of the instrument, the usage of the trade and custom of bankers and the facts of the circumstance. 4th Respondent’s counsel stated that the Appellants presented the cheque 4 months after the issuance of same and that it was dishonoured because of the word “DCR” which was written on it. He submitted that the word “DCR” does not mean the cheque was dishonoured for lack of funds. It implies Drawer’s Confirmation is required. Counsel then submitted that it will only amount to breach of contract of Exhibit EBA2 if the cheque was dishonoured for insufficient fund. He stated further that the Appellants having accepted the cheque is bound to comply with all the norms and practices associated with it. Furthermore, he argued that since drawer’s confirmation was required to effect payment, the Appellants were bound to seek this confirmation and their failure to so do meant that they refused to accept payment of the N3 million.

Learned counsel argued that the 4th Respondent is not in continuance breach. He stated that unless the Appellants accept payment of the N3 million by seeking confirmation of the 4th Respondent’s cheque, 4th Respondent has no further obligation under Exhibit EBA2. He submitted that Exhibit EBA2 still subsists because it has not been repudiated. He argued the Appellants failed to communicate the requirement of drawer’s confirmation. He relied on WESTAC (NIG.) LTD. v. SOKOTO STATE GOVT. [2001] 4 NWLR (Pt. 703) 304 at 318 paras D-E and Chitty on Contracts, 28th Ed. Vol. 1, para. 25.

Appellants in their reply brief contended the case of ABEKE v. STATE (supra) cited by the 4th Respondent does not support its argument that mere issuance of a cheque without receiving value for it suffices payment. Learned counsel argued that issuance without more does not amount to completion of payment. The issuance amounted to payment when it metamorphoses into physical cash on due presentation at the bank. He relied on H.M.S. LTD. v. FIRST BANK [1991] 1 NWLR (Pt. 167) 290 at 310; CHINDO WORLDWIDE LTD. v. TOTAL NIGERIA PLC. [2001] 16 NWLR (Pt. 739) 291 at 313-314 paras H-B. Appellants’ counsel submitted that the mere handing over of a cheque without more leaves the obligation to pay outstanding.

Counsel argued further while citing UNION BANK PLC. v. OKUBAMA [2000] 14 NWLR (Pt. 688] 570 that the determination of the liabilities of parties to the bill must be in accordance with the Bill of Exchange Act. He contended that a cheque must be presented within a reasonable time having regards to banking custom and practice vide DIKE v. A.C.B. [2000] 5 NWLR (Pt. 657) 441; AGBONMAGBE BANK LTD. v. C.F.A.O. [1966] 1 ALL NLR 140 at 145; CPL LTD. v. SCANBECH [2002] 13 NWLR (Pt. 785) 439 at 451 PARAS F-G; S.74(a) OF THE BILL OF EXCHANGE ACT. He contended further that the reasonable time for presenting a cheque is the date the cheque was issued and the cheque’s period of validity. Counsel argued that the word ‘DCR’ on the cheque does not mean that Appellants should seek the 4th Respondent’s confirmation. He stated it means that ‘Drawer Confirmation Required’ which could indicate ‘let the customer confirm if he is ready to take extra debit or indebtedness in his account.’ He relied on STANDARD TRUST BANK LTD. v. ANUMNU [2008] 14 NWLR (Pt. 1106) 125 at 157 paras. A-D. He argued it is contrary to the nature of a cheque to impose on the drawee an additional burden of having to run to the drawer to ask for further confirmation before the bill is honoured. He contended that to require the drawee to look for the confirmation of the drawer is to turn the bill of exchange to a conditional order for payment.

Learned Appellants’ counsel contend that the case of WESTAC NIG. LTD. v. SOKOTO STATE GOVERNMENT (supra) as cited by the 4th Respondent is contrary to the case of the 4th Respondent that some overt act is pending on the part of the Appellants to show that they have repudiated the contract after the 4th Respondent’s cheque was not paid. He argued that the nature of a breach in a contract may be taken by the aggrieved party as repudiation of the contract. He submitted that the failure of the 4th Respondent to make sure that the cheque issued was honoured constitutes repudiation of the contract.

On a final note, the Appellants submitted that contrary to the argument of the 4th Respondent that this court cannot interfere with the discretion of the trial court granting an order of specific performance, this court can interfere with an exercise of discretion if it was found that the discretion was not exercised judiciously. He relied on UBA v. ETIABA [2010] 10 NWLR (Pt. 1202) 343 at 391; OYEGUN v. NZERIBE [2010] 7 NWLR (Pt. 1194) 577 at 596 para B.

Learned Appellants’ counsel argued that Exhibits EBA 1 and EBA 2 are both inchoate for failing to meet the requirement for the validity of the contract. He stated consent of governor is required in transaction of this nature. His argument stood on the provisions of Sections 22(1) and 26 of the Land Use Act. The consequence of the failure to comply with the formalities required by law as condition precedent to a transaction makes such transaction void. Section 22(1) of Land Use Act, 1978 provides:
“It shall not be lawful for the holder of a statutory right of occupancy granted by the Governor to alienate his right of occupancy or any part thereof by assignment, mortgage, transfer of possession, sublease or otherwise howsoever without the consent of the Governor first had and obtained.”
The sale agreement (Exhibits EBA1 and EBA2) which is the contract between the parties to this agreement is to transfer the rights and title of the Appellants to the 4th Respondent. Apparently, the contract is sale of property ipso facto, but the 4th Respondent argued it only indicated an intention to, by subsequent agreement, alienate the land. 4th Respondent further stated that Exhibit EBA2 only states the terms and conditions which parties would have to comply with prior to the stage of assigning the land.
Section 22(1) of Land Use Act is conually clear to the effect that it proscribes all transaction regarding transfer of title in land of a statutory right of occupancy holder to ensure strict compliance with the provisions of the act to obtain the consent of the Governor. Section 26 of the Act makes such transaction null and void. It has been held by the Supreme Court in AWOJUGBAGBE LIGHT INDUSTRIES LTD. v. CHINUKWE [1995] 5 NWLR (Pt. 390) 409 that until parties comply with the performance of an act specified by law, an instrument is not a deed; it is a mere escrow. In the event of the failure to perform the condition so specify by law or to obtain the consent of the Governor before alienation of the property in this case makes the transaction inchoate until the condition is performed or consent obtained. Failure to obtain the consent does not invalidate the agreement but it only makes it a mere escrow and further proscribe alienation of same. Such document cannot transfer title to land but it is not illegal and it will remain a mere agreement without the consent of Governor first had and obtained.
It is trite that the provisions of the Act reproduced above, proscribed the holder of a statutory right of occupancy to alienate his right without the consent of Governor first had and obtained. However, the Act does not prohibit the making of a written agreement to transfer his entire right prior to obtaining requisite consent from the Governor as long as the agreement is subject to the consent of governor being had and obtained. See AWOJUGBAGBE LIGHT INDUSTRIES LTD. v. CHINUKWE (supra); SAVANNAH BANK (NIG.) LTD. v. AJILO [1989] 7 NWLR (Pt. 97) 305; INTERNATIONAL ILE INDUSTRIES (NIG.) LTD. v. ADEREMI [1999] 8 NWLR (Pt. 614) 268; ONAGORUWA v. AKINREMI [2001] 6 NSCQR (Pt. 11) 973.

The contents of Exhibits EBA1 and EBA2 substantially make provisions for terms and conditions to be adhered to by parties in respect of subsequent agreement to be made for the outright alienation consequent upon the performance of the terms and conditions. I shall reproduce relevant paragraphs of the agreement as follows:
Exhibit EBA1
“1. Subject to the consent of the Governor of Lagos State being obtained to the assignment hereinafter stipulated for, the Vendors will sell and the Purchaser will buy all the rights and interests of the Vendors in the house and premises situated and known as 78, Nnamdi Azikwe Street, Lagos the particulars of which are specified in the schedule hereto.
2. …
3. …
4. The completion of the purchase and payment of the balance of the purchase money shall take place within 45 days of the stakeholder informing the Purchaser that a new Land Certificate has been obtained and…the balance of the purchase money shall not be paid on that completion day, the Purchaser shall pay to the Vendors interest therein at the prevailing rate of interest on deposits computed from that day until actual payment.
5. On payment of the balance of the purchase money in accordance with Clause 4 hereof, the Vendors will execute a proper assignment to the Purchaser of the property sold, such assignment to be prepared and perfected by and at the expense of the Purchaser.
6. The Vendors shall at the expense of the Purchaser, apply for and endeavour to obtain the Consent of the Governor of Lagos State to the assignment. In case the Vendors shall be unable for whatever cause to obtain such consent then the Vendors shall be entitled to rescind this contract whereupon this contract shall become void and the said deposit shall be converted to rent for the use and occupation of the property by the Purchaser.” (Underlining mine).

Exhibit EBA2 states:
“Whereas
1…
2. The Transfer of the property could not be concluded up till now due to the failure of the Lagos State Governor to consent to the Vesting Deed in favour of the 2nd party.
3…
4…
5…
Whereby it is agreed as follows:
1…
2. The sum of N14m (sic) outstanding in respect of the sale shall be paid by the Purchasers as follows:-
(a) N3m to be immediately paid to the Law Firm of M.I. Jegede & Co. as stakeholders.
(b) Balance sum of N11m to be paid within 45 days of the said Law Firm of M.I. Jegede & Co. informing the Purchasers that Suit No. M/151/2001 between Mrs. Josephine Dakour & Ors. v. Lagos State Urban Renewal Board & 2 Ors has been concluded.
3…”

Clause 5 above is clear in its con that Exhibits EBA1 and EBA2 are mere sale agreements subject to a proper agreement that will alienate the interest of the vendors. It will therefore be ludicrous to say Exhibits EBA1 and EBA2 are agreements that alienate and or transfer the interest of the Appellants’ right. These agreements contemplate the consent of the Governor to a future assignment. They are merely contracts evidencing the terms and condition of an agreement to sell; nothing more.
I resolve issue one in favour of the 4th Respondent.

On issue two, the main contention of the Appellants queried the decision of the trial Judge which held that the act of the Appellants in presenting the 4th Respondent’s cheque for N3million dated 28th March, 2002 on 12th July, 2002 amounted to due presentation. The Supreme Court in H.M.S. LTD. v. FIRST BANK [1991] 1 NWLR (Pt. 167) 290; [1991] LPELR-1364 (SC), per Obaseki, JSC at page 28, para C held:
“A cheque in strict sense, is an order or request for payment until the cheque is honoured or cleared and the amount stated on it paid, it is not money.”
A cheque is an instrument of payment which metamorphoses into physical cash on due presentation at the bank. It is not money until it is honoured and paid. A cheque once it is regular on the face will be honoured by the bank upon presentation. There are reciprocal duties imposed on banker and its customer in this regard; the customer is duty bound to exercise reasonable care in executing his written orders on the cheques so as not to mislead the bank or facilitate forgery. See FBN v. AKIRI [2013] LPELR-21966; NIGERIAN AIR FORCE v. OBIOSA [2003] 4 NWLR (Pt. 810) 233.

The cheque of the 4th Respondent was issued and dated 28th March, 2002 and presented by the Appellants on the 12th July, 2002. It is a notorious fact that a cheque issued must be presented for payment within a reasonable time according to banking custom and usage. Appellants contended he had six months validity period within which to present the cheque. On the other hand, 4th Respondent argued the Appellants did not present it within reasonable time.

It is a notorious fact in Nigeria banking custom and usage (a CBN policy) that a cheque (an instrument of payment) when issued, must be presented for payment within a period of six months. In this case, the Appellants presented the cheque about four months after it was issued which was still within a reasonable time. The effect of ‘DCR’ written on the face of the cheque upon presentation is that it is dishonoured for payment. “DCR” implies Drawer’s Confirmation Required. A confirmation is defined in AFRIBANK NIG. PLC v. ANUEBUNWA [2011] LPELR-3635 as:
“A contract, or written memorandum thereof by which that which was infirm, difficult of proof, imperfect, or subject to be avoided is ratified, rendered valid and binding, made firm and unavoidable. To give formal approval Act or process of confirming. The implication of the above definition is that the Appellant must prove that the Respondent must by all means and all situations ratify any cheque before it becomes valid. This is clearly outside the legal agreement – the mandate (the authority) between the parties.”
See also BALOGUN v. NBM [1978] 3 SC 155; AFRIBANK NIG. PLC v. A.I. INVESTMENT [2003] FWLR (Pt. 141) PAGE 184.

Though, the lower court was unable to unravel the mystery behind the non-payment of the cheque. Even this court cannot infer the reason why drawer’s confirmation was required or speculate why the cheque was returned unpaid. It is trite that a court of law must dissuade itself from speculation or conjecture; otherwise whatever decision reached will occasion a miscarriage of justice. See MOBIL (NIG) LTD. v. PAM [2000] 5 NWLR (Pt. 657) 506 at 527; OGUNYE v. STATE [1999] 5 NWLR (Pt. 604) 518; ITESHI ONWE v. THE STATE [1975] 9-11 SC 23. Therefore, the 4th Respondent ought to have taken further steps to confirm the cheque when notice of the non-payment was communicated and/or make payment in liquid form.

Section 10 of the Bill of Exchange Act provides as follows:
“Bill payable on demand.
1. A bill is payable on demand –
a. Which is expressed to be payable on demand or at sight or on presentation; or
b. In which no time for payment is expressed.
2. Where a bill is accepted or endorsed when it is overdue, it shall, as regards the acceptor who so accepts or any endorser who so endorses it, be deemed a bill payable on demand.”
A cheque being a bill of exchange is payable on demand as evidenced in the presentation for payment by the Appellants. Without presenting it for payment, demanding for its cash equivalent, it is not payable. In furtherance to due time for presentation, Section 40 of the Act provides that:
“(1) Subject to the provisions of this Act, when a bill payable after sight is negotiated, the holder must either present it for acceptance or negotiate it within a reasonable time.
(2) If he do not do so, the drawer and all endorsers prior to that holder are discharged.
(3) In determining what is a reasonable time within the meaning of this section, regard shall be had to the nature of the bill, the usage of trade with respect to similar bills, and the facts of the particular case.” (Underlining mine).

On the issue of the non-payment or caveat of “DCR” written on the cheque, the Appellants argued their counsel called the counsel to the 4th Respondent to inform him of the cheque being returned unpaid. See paragraph 19 of Appellants’ Reply to 3rd Affidavit in Support of 4th Defendant’s Counterclaim dated 24th October, 2002 (page 182 of record). The 4th Respondent denied having knowledge of the caveat on the cheque and its non-payment in paragraph 5 of its 3rd Affidavit in Support of Counterclaim dated 9th October, 2002 (page 179 of record). Section 49(e) of the Act is to the effect that notice of dishonor may be given in writing or by personal communication, and may be given in any terms which sufficiently identify the bill, and intimate that the bill has been dishonoured by non-acceptance or non-payment. It is natural in the relationship of banker and customer and between customers to communicate the non-acceptance or payment of a cheque to the drawer. Especially between customers where the cheque is denied payment, it is primarily incumbent on the drawee to spontaneously inform the drawer that the cheque he issued has been denied. In like manner, the bank has a duty of care and confidentiality to exercise in protecting the interest of the drawer. See DIAMOND BANK LTD. v. SECURITIES & FINANCE COMPANY LTD. [2008] LPELR-4035(CA); PBN v. ADEGBESOTE [1986] 3 NWLR (Pt. 4) 707; JOACHIMSON v. SWISS BANK CORPORATION [1921] 3 K.B. 110; AGBANELO v. UBN LTD. [2000] 7 NWLR (Pt. 666) 534; ECOBANK NIG. LTD. v. EKPERIKPE [2013] LPELR-20327.

The 4th Respondent maintained the refusal of the bank to honour or pay the cheque was due to the Appellants delay in presenting the cheque. In paragraph 4(iii)-(vi) (pages 171-172 of record) of the Appellants’ Reply to Further Affidavit in Support of Counter Claim, Appellants averred that the cheque was delayed for presentation due to 4th Respondent advice or instruction to withhold presentation for payment until after the perfection and exchange of the sale agreement. This instruction to delay is evident in the last paragraph of Exhibit AA8 (page 174 of record) – a letter dated 26th June, 2001 written by 4th Respondent’s counsel to the Appellants’ counsel. The content of the paragraph is as follows:
“Sir, I have their mandate to once again demand from you, and I hereby demand, the original copy of the sale agreement dated 28th March, 2001 to which they are entitled, so that they can fulfill their own obligations therein.” (Underlining mine)

From the foregoing, it is evident that 4th Respondent delayed the presentation for payment of the cheque by its instruction to the Appellants that they should defer presentation until the happening of an event. However, it is immaterial whether the cheque was presented immediately or at later time. The factor to be considered is whether the presentation is within the reasonable time for presenting an instrument of payment in the nature of a cheque and whether value was given for the cheque.

The community reading of the foregoing provisions of Bill of Exchange Act, averments from affidavits and paragraphs of letters, especially Section 40(3) of the Act. Subsection (3) of Section 40 is to the effect that a bill of exchange must be presented within a reasonable time having regard to the nature of the bill, the usage of trade and the fact of the particular case. Appellants had averred that 4th Respondent caused the delay till the happening of an event. Upon presentation, it was rejected or dishonoured by non-payment. A cheque does not give value if rejected or becomes stale for failure to present it within reasonable time. Payment of it can only be made upon revalidation before re-presentation of same or the drawer issues a new one. In all of this, nothing has been said about revalidation and or re-issuance of a new cheque by the 4th Respondent who is aware of the non-payment. 4th Respondent did not specifically deny the caveat of ‘DCR’ written on the cheque or its non-payment. The law is extant that the mere deposit of cheque without more or without the cheque giving value is not payment. See UBN LTD. v. NWOYE [1996] (supra); ABEKE v. STATE (supra).

On the whole of this, I resolve issue two in favour of the Appellants.

On issue three, I will adopt my resolution on the issues above. However, I will add that a fundamental breach in terms of contract may entitle the innocent party to treat the contract as repudiated. The failure of the 4th Respondent to transfer monetary value in its cheque constitutes substantial breach of Exhibit EBA2. The N3 million which ought to have been paid immediately is still pending till date. See AHMED v. CBN [2012] LPELR-9341; SBN PLC. v. OPAWUBI [2004] 15 NWLR (PT. 896) 437; TSOKAW OIL MARKETING CO. v. B.O.N. LTD. [2002] 11 NWLR (Pt. 777) 163. In my view, the 4th Respondent is yet to discharge its obligation regarding the payment of N3 million to the Appellants. A deposit per se without more cannot amount to payment of purchase price. See ODUSOGA v. RICKKET [1997] 7 NWLR (Pt. 511) 1; ONANUBI v. OGUNFOLU [2009] LPELR-3730; OGUNBAMBI v. ABOWAB [1951] 13 WACA 222.

On the totality of the arguments above, I resolve issue three in favour of the Appellants and against the 4th Respondent.

Issue four of the Appellant’s brief bothers on whether the failure of the 4th Respondent to pay the balance of the purchase price as agreed under Exhibit EBA2 constitutes a breach of the contract sufficient enough for the Appellants to treat the contract as discharged or repudiated. In furtherance to the position of the law as stated while resolving the earlier issues, the law is settled that where the purchase price is not fully paid, there can be no valid sale even if the purchaser is in possession. See OGUNDALU v. MACJOB [2015] LPELR-24458; ODUSOGA v. RICKETT (supra); OGUNBAMBI v. ABOWAB (supra); ONANUBI v. OGUNFOLU (supra); ANWASI v. CHABASAYA [2000] 1 NWLR (Pt. 661) 408; MAINAMA v. DAMBATTA [2014] LPELR-23645; ODUFUYE v. FATOKE [1977] 4 SC 11; NIDOCCO LTD. v. GBAJABIAMILA [2013] 14 NWLR (Pt. 1374) 350; MANYA v. IDRIS [2001] 8 NWLR (Pt. 716) 627. Actions in court are determined by circumstance surrounding them; in this the agreement between the parties stipulates the modality of payment.

I resolve issue four in favour of the Appellants.

ISSUE FIVE
Appellants’ counsel argued that a plaintiff in an action for specific performance of an agreement cannot succeed if there is a failure on his part to discharge his obligations under the agreement which formed the contract between the parties. He relied on Law of Contract by Professor Sagay at page 666 and the unreported case of COKER v. AJEWOLE, Suit No. SC 373/74. Learned counsel submitted that the 4th Respondent is in breach of its remaining obligations under the contract for failing to give monetary value of its cheque of N3 million. On the whole of this, counsel to the Appellants submits further that this breach disentitles the 4th Respondent to the remedy of specific performance. He relied on EMECHIE v. ABIOSE [1991] 2 NWLR (Pt. 172) 192 while arguing that he who comes to equity must do equity and must come with clean hands. Learned counsel submitted that specific performance must not be awarded capriciously. He stated that 4th Respondent has not approached equity with clean hands. He submitted that the court should not allow the 4th Respondent to benefit from the generosity of equity. Appellants’ counsel finally submitted that the trial Judge erred in law when he ordered specific performance in favour of the 4th Respondent.

In issue three of the 4th Respondent’s brief, learned counsel relying on Itsey Sagay in Nigerian Law of Contract, 2nd Edition at page 664 to describe the nature of specific performance. He argued that the plaintiff is not entitled to the order as of right, it is discretionary. Counsel cited HELP (NIG.) LTD. v. SILVER ANCHOR (NIG.) LTD. [2006] 5 NWLR (Pt. 972) 196. The 4th Respondent’s counsel defined judicial and legal discretion vide BABATUNDE v. P.A.S. & T.A. LTD. [2007] 13 NWLR (Pt. 1050) 113 at 149-150 paras. H-C. Counsel itemized two instances when specific performance can be made by a court according to the learned author I.O. Smith in his book Practical Approach to the Law of Real Property in Nigeria at page 436 as follows:
(a) Where there is a valid contract in existence or
(b) Where there is sufficient act of part performance.

Learned Counsel O.V. Iweze of the 4th Respondent contended that the learned trial Judge carefully ordered specific performance. Learned counsel finally submitted that the trial Judge exercised her discretion to grant an order of specific performance judiciously and judicially. Counsel posed a question whether this court can interfere with the discretion that was exercised judiciously and judicially? He cited BABATUNDE v. P.A.S. & T.A. LTD. (supra) that discretion is that of the trial court. He submitted that this court cannot interfere with the discretion of the trial court.

Appellants in their reply contended that this court can interfere with the discretion of the trial court if it is satisfied that the discretion was not exercised according to the rules of reason, justice and law. He relied on UBA v. ETIABA [2010] 10 NWLR (Pt. 1202) 343; OYEGUN v. NZERIBE [2010] 7 NWLR (Pt. 1194) 577.

It is clear from the terms and conditions of Exhibit EBA2 that the payment modules which is subject to the vesting of Appellants’ right in the 4th Respondent is predicated on the fulfillment of the condition precedent elucidated in the first payment module and the occurrence of a future event which is the second payment module. A clear interpretation of the contract is also to the effect that the second payment module cannot be effected without making a valid payment in the first module. The subsequent payment of the N11 million naira within 45 days after the conclusion of the litigation in the Suit No. M/151/2001 is futuristic and is also hinged on the initial payment of the N3million. A cheque was issued for the N3 million but was dishonoured. The banker called for the 4th Respondent’s confirmation which till date has not been confirmed.

A condition precedent has been defined by the Supreme Court, Per Ogbwuegbu, JSC in ATOLAGBE v. AWUNI [1997] 9 NWLR (Pt. 522) 536; LPELR-593 at page 118 para C thus:
“A condition precedent is one which delays the vesting of a right until the happening of an event.”
This condition makes the existence of a right dependent on the happening of an event. The right contained in the sale agreement is conditional and not absolute. The 4th Respondent was unable to meet the terms agreed as to payment. See also ALABI v. KWAPOLY [2012] LPELR-9213; OKOMALU v. AKINBODE [2006] 9 NWLR (Pt. 985) 338; OWOSENI v. FALOYE [2005] 14 NWLR (Pt. 946) 719; EGUAMWENSE v. AMAGHIZEMWEM [1993] 9 NWLR (Pt. 315) 1.

It is also the law that a contract for the sale of land is completed and concluded where there are parties in existence, the property to be sold, the consideration for the sale and nature of the interest to be granted. Where the contract has been made out as in this appeal, a party who has part performed is in breach for non performance. See OSHAFUNMI v. ADEPOJU [2014] LPELR-23073; OGABEIDO v. OSIFO [2007] 3 NWLR (Pt. 1022) 423; GEGE v. NANDE [2006] 10 NWLR (Pt. 988] 256; MUSTAPHA v. ABUBAKAR [2010] LPELR 4567; OHIAERI v. YUSUF [2009] 6 NWLR (Pt. 1137) 207. However in this appeal, the 4th Respondent has not proved to the court below that its company was willing to or took steps to confirm the cheque that was dishonoured. 4th Respondent also did not take reasonable steps to resuscitate the contract that has been repudiated impliedly by its conduct as a result of its default to give value to its cheque. The 4th Respondent could have replaced the cheque with cash since the time the cheque was rejected to save or elongate the life of the contract or at best ensure the confirmation of the cheque already issued or pay by another means other than by cheque. The contract could have been kept alive if 4th Respondent considered confirming the cheque or took further steps to pay. In this case, there is fundamental breach on the part of the 4th Respondent, whereupon he will not be entitled to an order of specific performance. The contract having been repudiated by the breach of the 4th Respondent of its own obligation leaves no right to be specifically performed.

On whether the Court of Appeal can interfere with the exercise of discretion of the lower court. An appellate court will not ordinarily interfere with a proper exercise of discretion of a lower court except on the following grounds:
1. The discretion was not exercised in accordance with law.
2. That the decision of the lower court is perverse.
3. Where the lower court acted under a misapprehension of the law.
4. Where the lower court acted under a misapprehension of the facts.
5. Where the lower court omitted to take into account matters that are relevant.
6. Where the discretion is exercised on wrong or inadequate materials.
See WAZIRI v. GUMEL [2012] LPELR-7816; OBUEKE v. NNAMCHI [2012] LPELR-7810; OSUJI v. EKEOCHA [2009] ALL FWLR (Pt. 490) 614; ADMIORA v. AJUFO [1988] 3 NWLR (Pt. 80) 1.

In this instant case, the trial court in its evaluation of evidence of parties held the issuance of the cheque, though not honoured by the bank, to be payment in respect of the contract contained in Exhibit EBA2. This is clearly a misapprehension of the position of the law that mere issuance of cheque without more does not amount to payment. In view of the foregoing, the trial court was in error when it granted the equitable relief of specific performance.

I resolve issue five in favour of the Appellants.

On the whole, I find merit in this appeal. The appeal is allowed and the judgment of Ipaye, J. of the High Court of Lagos State delivered on 21st July, 2003 is hereby set aside. No order as to cost.

SIDI DAUDA BAGE, J.C.A.: I have read, before now, the draft of the judgment just delivered by my learned brother, Abimbola Osarugue Obaseki-Adejumo, JCA. Having equally perused the briefs of argument of the learned counsel vis-a-vis the record of appeal, I cannot but concur with the reasoning and conclusion reached in the lead judgment, to the effect that the present appeal is meritorious. I adopt both the said reasoning and conclusion as mine, and accordingly allow the appeal, the judgment of Ipaye, J. of the High Court of Lagos State delivered on 21st July, 2003 is also hereby set aside.

No order as to cost.

JOSEPH SHAGBAOR IKYEGH, J.C.A.: I had the honour of reading in print the comprehensive judgment prepared by my learned brother, Abimbola Osarugue Obaseki-Adejumo, J.C.A., in which I concur with nothing extra to add.

Appearances

Solomon AdeseunFor Appellant

AND

No appearance for RespondentsFor Respondent