AGUOMUO v. EDO CO-OPERATIVE FEDERATION LTD
(2020)LCN/14375(CA)
In The Court Of Appeal
(BENIN JUDICIAL DIVISION)
On Thursday, June 25, 2020
CA/B/300/2008
Before Our Lordships:
Helen Moronkeji Ogunwumiju Justice of the Court of Appeal
Samuel Chukwudumebi Oseji Justice of the Court of Appeal
Moore Aseimo Abraham Adumein Justice of the Court of Appeal
Between
MRS. FELICIA AGUOMUO APPELANT(S)
And
EDO CO-OPERATIVE FEDERATION LTD RESPONDENT(S)
RATIO
WHETHER OR NOT A PARTY WHO SIGNS AN AGREEMENT IS BOUND BY IT
The law is settled that a party who signs an agreement is bound by it. The judicially approved function of the Court is to interpret the agreement and enforce its terms without more.
If the provisions of an agreement are clear and unambiguous and there is nothing to enable the Court to put upon them a construction or interpretation different from that which the wordings connotes, it will remain sacrosanct. Thus parties to a written agreement are mutually bound by the terms contained in the agreement. The Courts intervention can only arise where it is shown that the terms are illegal or contrary to public policy. See FAKOREDE VS. A.G. WESTERN STATE (1972) 1 All NLR (PT.) 178; UBA LTD VS. PENNYMART LTD (1992) 5 NWLR (PT. 240) 228; MARYAM VS. IDRIS (2000) FWLR (PT. 23) 1237; ARTRA INDUSTRIES LTD. VS. NBCI (1998) 1 NWLR (PT. 483) 574; ODUOYE VS. NIGERIA AIRWAYS LTD (1988) 2 NWLR (PT. 55) 126; ROBINET (NIG) LTD VS. SHELL (NIG) GAS LTD (2013) LPELR – 22144 (CA). See also the case of WILLIAMS VS. WILLIAMS & ORS. (2014) LPELR – 22642 (CA) where this Court in addressing the issue whether parties are bound by the terms of their contract held at page 42 of the report as follows:
“The point should however be further stressed that, an agreement entered voluntarily by parties such as in this case must of necessity be honoured in good faith, in the absence of fraud or mistake because the Court does not engage itself in the act of writing or rewriting agreements for parties, it must therefore avoid being branded as a meddlesome interloper. Where therefore the words in an agreement are clear, precise and unambiguous, the Court shall without much ado expound those words in their ordinary and natural sense in order to give a true and genuine effect to the intention of the parties. See JADESIMI V EGBE (2003) 10 NWLR (PT. 827) page 1…” PER OSEJI, J.C.A.
WHETHER OR NOT PARTIES TO AN AGREEMENT ARE BOUND BY THE TERMS AND CONDITIONS OF TEH CONTRACT
As earlier expressed in this judgment with the support of authorities, the law is settled that parties to an agreement are bound by the terms and conditions of the contract they signed and the primary duty of the Court is restricted to interpretation and enforcement of the terms of the contract as agreed by the parties thereto. Vide ISHENO VS. JULIUS BERGER PLC (2008) 3 NSCQR (PT1) 296 and KAYDEE VENTURES LTD VS. MINISTER FCT (2010) 4 NSCQR (PT 2) 830; LINTON INDUSTRIAL TRADING COMPANY (NIG) LTD VS. C.B.N & ANOR (2013) LPELR – 22036 (CA).
On this premise, I am of the view that the terms of paragraph 2(a) of Exhibit B which is binding on the parties concerned is that the rent payable on each of the 12 stores is fixed at N2000 monthly and which rent is to run for 25 years from 1997. PER OSEJI, J.C.A.
WHETHER OR NOT A COURT CAN DECIDE A CASE ON MERE SPECULATION
A Court should therefore not decide a case on mere conjecture or speculation. Courts of law are Courts of facts and laws. They consequently decide issues on facts established before them and in laws and as such must avoid speculations. See NUHU VS. OGELE (2003) 12 SCM 209; AGIP (NIG) LTD & ORS. VS. CHIEF C. EZENDU & ORS. (2010) 1 SC (PT. 11) 98; OKOYA & 2 ORS VS. SANTILLI & ORS (1993 – 1994) All NLR 404; UNIVERSAL TRUST BANK OF NIGERIA VS. FIDELIA OZOEMENA (2007) 1 SCNJ 318; IBRAHIM & ANOR. VS. STATE (1986) 1 NSCC 230. PER OSEJI, J.C.A.
SAMUEL CHUKWUDUMEBI OSEJI, J.C.A. (Delivering the Leading Judgment): This is an appeal against the judgment of the High Court of Edo State sitting in Benin City and delivered on the 20th day of April, 2008, wherein part of the reliefs sought by the plaintiff (now Respondent) was granted.
The Respondent herein had as claimant, instituted an action via a writ of summons filed together with a statement of claim against the defendant (now Appellant). In paragraph 11 of the amended Statement of Claim subsequently filed on 4/4/2006, the Respondent sought the following reliefs against the Appellant.
“(A) A declaration that the defendant is in breach of the agreement entered into on 2nd July 1997 with the plaintiff by charging rents higher than that stated in the contractor/finance agreement between the parties.
(B) A declaration that since the year 2003 the defendant has breached a term in the contract by which she is to pay certain sum of money monthly on a prorata basis to the plaintiff out of the rents the defendant collects from the property.
(C) A declaration that the plaintiff is entitled to be informed by the defendant at all times
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when she effects any increase in the rent paid by the tenants occupying the stores she built in the premises of the plaintiff at No, 8 Ewaise (Forestry) road, Benin City so that plaintiff can be paid its share of such rent on a pro-rata basis.
(D) An order directing the defendant to pay all outstanding entitlements due to the plaintiff on a pro rata basis from the monthly rents collected from tenants in the premises of the plaintiff.
(E) An order that the agreement between the plaintiff and the defendant be renegotiated and/or rectified to accommodated a clause for rent increases which should be shared on a pro-rata basis in order not to continue to give to the defendant the unfair advantage she currently enjoys over and above the plaintiff owing to defendant’s oppressive conduct in the management of the rents accruing from the property.
(F) An order that the rectification of the contract document should also be done in such a way as to reflect on the number of years that the defendant would occupy the said premises.
In summary, the facts of the case as presented by the Respondent is that sometime in 1997, the Respondent was in search of
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someone who would be able to develop the forecourt of it office at No. 8, Ewaise (Forestry) Road, Benin City, by building 12 stores on the land. The appellant showed interest and after some meetings were held, the parties finally agreed on the terms. The appellant’s solicitor finally drew up the agreement and it was duly executed on the 2nd July, 1997. During the construction of the stores the appellant built 13 stores as against 12 contained in the agreement. The agreement contained a one year period of moratorium during which the appellant would collect rents from the stores and enjoy same alone without paying anything to the respondent. On the completion of the stores the appellant put in tenants who were made to pay the agreed rent of N2,000 per month. The appellant in obligation to the respondent began paying N500 representing one quarter of the rent to it while the appellant would keep the balance sum of N1500 as agreed.
By January 2004, the appellant increased the rent to N5, 000 per month without notice of the increase to the respondent and in spite of the increase in rent she was still paying N500 per month to the respondent. As at the time the
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respondent brought the matter to Court in 2005 the appellant was already collecting N8,000 as rent per store from the tenants without the knowledge of the respondent.
The case proceeded for trial on the basis of the Respondent’s further amended statement of claim and the Appellant’s statement of defence as well as their witness statement on oaths.
Upon adoption of written addresses, the learned trial Judge delivered judgment on the 20/5/2008 in favour of the Respondent.
The Appellant herein was dissatisfied with the said judgment and consequently filed a Notice of Appeal on 6/10/2009.
An Amended notice of Appeal with six grounds was filed on 08/5/2013. The appellant brief of argument was subsequently filed on 15/10/2012 but deemed properly filed 20/2/2017
The Respondent herein filed her amended brief of argument on 26/6/2019.
In response to the Respondent brief of argument, the appellant filed a reply on 18/6/2013. The parties adopted and relied on their respective brief of argument at the hearing of the appeal on the 27/05/2020.
From the four grounds in the amended notice of appeal, the appellant in his brief of
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argument formulated three issues for determination. To wit:
1. Whether the lower Court was right in ordering for a rectification of the lease agreement between the parties in the manner it ordered, having regard to the Provisions of Exhibit ‘B’ and peculiar nature of the business relationship between Appellant and the Respondent. (Grounds 1, 2, & 5).
2. Whether there is any provision or feature in Exhibit ‘B’ which requires Appellant to consult, disclose or seek permission from Respondent to increase the rents of her sub-tenants. (Ground 4).
3. Whether the manner of evaluation of evidence before it by the lower Court was not such that calls for the intervention of this honourable Court for the just determination of the issues arising between the parties in this appeal.
4. Whether the lower Court was right to have granted relief 11(d) despite it being indefinite, uncertain, difficult to quantify; and not specifically pleaded and proved by the Respondent.
The Respondent herein in their brief of argument formulated three issues for determination as follows:
(a) Whether the learned trial judge was right in ordering a
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rectification of the agreement (Exhibit B in this case) having regard to the evidence before the Court.
(B) Whether the idea of a lease for 25 years certain to the appellant can be read into Exhibit ‘B’ in this case.
(C) Whether relief 11(d) in the respondent’s amended statement of claim in the lower Court was imprecise, uncertain, difficult to quantify and not specifically pleaded and proved by the respondent.
I shall adopt the four issues as raised in the Appellant’s brief of argument in the consideration of this appeal.
APPELLANT’S SUBMISSION
In arguing the issues 1, 2 & 3 together, learned counsel to the appellant referred to Exhibit B to submit that by the nature of the lease agreement and inside it, the Appellant was granted a leasehold on Respondent’s empty land for 25 years for her to construct 12 shops after which period she would surrender possession of the 12 shops built on the empty land of the Respondent to the Respondent forever.
He further submitted that in a lease agreement particularly the type herein which requires the Appellant to forever cede or hand over possession of the 12 shops to the
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Respondent at the expiration of the term certain, the parties usually agree on a ground rent to be paid to the Landlord by the tenant periodically, but do not go further to fix the rent the tenant is to charge on her sub-tenant and/or expect that such rents on the sub-tenants are to be shared between landlord and tenant on a pro – rata or any other basis.
It was argued that clause 2(a) of Exhibit ‘B’, the tenancy agreement, which sought to fix the rent of the sub-tenants at N2,000.00 was, to the extent of the said fixture, oppressive and unfair on the Appellant and therefore unconscionable such that it ought not to have been enforced or relied upon by the lower Court in it’s judgment to grant relief (e) as claimed by the Respondent. He added that the lower Court findings and conclusions were erroneous and did not entail a careful evaluation of Exhibit B and the totality of the evidence furnished by the parties at the trial.
Still on the evaluation of Exhibits B, it was submitted that there is also nothing in the said Exhibit which limits the amount of rents the Appellant could receive for herself for her investment to justify the amount she spent to
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build the shops. He added that even if it could be said for purposes of argument alone that there is any provision in Exhibit B that can be construed to limit the Appellant to earning only the sum of N4.2 million from her investment in building the said shops, such a provision would be caught by the principle of unconscionably which would make it unenforceable.
Placing reliance on the case ofBobmanuel v. West (2008) ALL FWLR (pt 437) p. 173 at p. 187, paras C- D, Ojo v. Governor, Oyo State (1989)1 NWLR (pt 95) p 1., Eholor v. Osayande (1992) 6 NWLR (pt 249) p. 524, it was contended that this honourable Court, being an appellate Court, may interfere with the findings of fact of a trial Court where the latter failed to reproperly evaluate the evidence or make proper use of the opportunity of seeing or hearing the witnesses at the trial, or where it has drawn wrong Conclusions from the accepted evidence or where its findings are shown to be perverse.
It was further contended that the lower Court bought and accepted the questionable and untenable assertion and/or claim of the Respondent at the trial that Appellant invested a whopping sum of over N4,200,000.00
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just for the purpose of her being allowed to “recoup” her expenses in building the shops. He added that this notion is not only fraudulent but untenable because no businessman or woman would source for scarce resources such as the sum of N4,200,000.00 along with possible interests that might accrue to it, only for the purpose of being allowed to “recoup” the said sum and nothing but that.
He argued that there is nothing in law known as anticipatory breach of an agreement or it’s term, it is either one is in breach of an agreement or not. He added that the concept of anticipatory breach as propounded by the lower Court could only lead to speculative justice or justice founded on speculation rather than the facts and law of a given case.
It was posited that the lower Court did not properly construe the totality of the nature and surrounding circumstances of the transaction between the parties before determining what it found to be the real intention of the parties. He added that if there was any form of mistake in Exhibit B that ought to have been sought for rectification by the Respondent at the lower Court, it is the omission in that document of a
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provision for the upward adjustment of the land rent of 500.
On issue 4, learned counsel submitted that the lower Court ought not to have granted relief (d) in the Further Amended Statement of Claim in the form and manner it was claimed by the Respondent in her Further Amended Statement of Claim.
It was further submitted that the Respondent failed to specifically plead, explicitly claim and strictly prove relief (d) in her Further Amended Statement of Claim and the lower Court should have prevented her witness from giving evidence on that relief and ought not to have granted it.
With reference to the further Amended Statement of Claim, it was contended that the only portion of it that contain pieces of facts that resemble pleadings touching on relief (d) are paragraphs 7 and 8 and there is no pleading therein that meet the high standard of specific pleading required of a relief of that nature.
He further contended that assuming without any concession that the pleadings of Respondent in her paragraphs 7 and 8 of her Further Amended Statement of Claim were sufficient for purposes of giving evidence relating to relief (d), the evidence
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actually volunteered by the Respondent through her sole witness was insufficient as evidence that can ground the grant of relief (d).
RESPONDENT’S SUBMISSION
Replying as per issue 1 & 2, learned counsel to the Respondent submitted that the learned trial judge was right in ordering rectification of the contract, Exhibit ‘B’ in this case, having regard to the clauses in the said Exhibit ‘B’ and the evidence led by the parties.
It was further submitted that the crux of the dispute between the appellant and the respondent hinges on these two clauses and the dispute was brought to the fore by the decision of the appellant to unilaterally increase the rent chargeable on the stores without consulting the respondent and utilizing the increased rent alone.
It was posited that the clause 2(a) of Exhibit ‘B’ explains the reason why the tenancy was made to last for 25 years and that the rent chargeable on the stores will be N2,000. He added that Exhibit ‘B cannot in anyway be construed as a lease for 25 years certain and the 25 years in clause 1 of Exhibit ‘B’ was subject to the qualification in clause 2(a).
It was contended that the
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purpose of the final order made by the trial judge was in the best interest of the appellant and it was supposed to assist the appellant ventilate her grievances about extra money she alleged she had spent and the fact that she was expected to make higher profit from her investment which was not taken care of in Exhibit ‘B’. He added that the Court is not concerned with what ought to be the contents of Exhibit ‘B as urged in issues 1, 2, & 3 in the appellant’s brief of argument but only concerned with the construction of the contents of the document.
He further contended that the learned trial judge could not have done better than she did having regard to the evidence before him, particularly the leverage which the appellant said she thought she was entitled to enjoy under the document. He relied on the case ofJ.E. OSHEVIRE LTD vs TRIPOLI MOTORS (1997) 5 NWLR (PART 503) 1 at 18 G-H.
On issue 3, learned counsel argued that it is not in controversy that since Exhibit ‘B’ took effect the appellant alone has been collecting rents from the stores, the management or which is in dispute in this case.
He further argued that in Exhibit B, the
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appellant knew what the respondent’s entitlement was at any given time but she denied such knowledge and what the respondent claimed in this case was quantifiable as far as the respondent was concerned since the appellant alone knew what the rents were although she denied knowledge of it.
It was submitted that it is a serious error for counsel to the appellant to have dubbed relief’s as special damage which the respondent ought to prove strictly and what was claimed was respondent’s entitlement under Exhibit B’ which was being withheld illegally by the appellant.
It was therefore urged on this Court to resolve all the issues against the appellant.
APPELLANT’S REPLY
In response to the Respondent’s brief of argument, learned counsel to the appellant submitted that the Respondent’s Counsel attempted to introduce evidence vide his address and the law is trite that submissions of counsel is not evidence, neither can it substitute evidence, nor play any supplementary role to evidence in any case before a Court of law. In support of this stance he cited Okon V. Ubi (2006) ALL FWLR (Pt 328) P. 717 at 743, paras A-D.
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It was further submitted that throughout the proceedings in the Lower Court, the evidence adduced by the Respondent centred only on the fact that the increase in the rents of the sub-tenants was not made and that its supposed share was not given to it. He added that no case was made by the Respondent in the Lower Court that “since Exhibit ‘B’ took effect the appellant alone has been collecting rents from the stores, the management of which is in dispute in this case” and no evidence in that regard is on the record of this appeal.
It was argued that both the appellate Court and the parties before it are bound by the record of the Lower Court. On this he cited the case of Government of Cross River State V. Assam (2008) ALL FWLR (Pt 418) P.351 at Pp. 359-360, paras H-A
Relying on the case of Chinwuba V. Alade (1997) 6 NWLR (Pt 507) P. 85, it was posited that the submissions of the Respondent’s Counsel highlighted above do not relate to, neither are they covered by the issues distilled by him for argument and that a party to an appeal must restrict his argument to issues formulated for argument. He added that any argument outside the issues formulated by a
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party to an appeal for goes to no issue and is liable to be discountenanced by the Court.
It was therefore urged on this Court to discountenance the above listed argument of counsel to the Respondent and allow the appeal.
RESOLUTION OF ISSUES
I have carefully read through the record of appeal with particular reference to the judgment of the trial Court. I have also paid attention to the issue formulated in the parties briefs of argument as well as the arguments in support thereof. As earlier indicated, I shall consider this appeal on the basis of the four issues raised by the Appellant.
ISSUES 1, 2 & 3
On these, three issues as argued together in the Appellant’s brief of argument. They are all hinged on the nature, scope and effects of Exhibit B, the tenancy agreement between the parties.
The law is settled that a party who signs an agreement is bound by it. The judicially approved function of the Court is to interpret the agreement and enforce its terms without more.
If the provisions of an agreement are clear and unambiguous and there is nothing to enable the Court to put upon them a construction or interpretation
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different from that which the wordings connotes, it will remain sacrosanct. Thus parties to a written agreement are mutually bound by the terms contained in the agreement. The Courts intervention can only arise where it is shown that the terms are illegal or contrary to public policy. See FAKOREDE VS. A.G. WESTERN STATE (1972) 1 All NLR (PT.) 178; UBA LTD VS. PENNYMART LTD (1992) 5 NWLR (PT. 240) 228; MARYAM VS. IDRIS (2000) FWLR (PT. 23) 1237; ARTRA INDUSTRIES LTD. VS. NBCI (1998) 1 NWLR (PT. 483) 574; ODUOYE VS. NIGERIA AIRWAYS LTD (1988) 2 NWLR (PT. 55) 126; ROBINET (NIG) LTD VS. SHELL (NIG) GAS LTD (2013) LPELR – 22144 (CA). See also the case of WILLIAMS VS. WILLIAMS & ORS. (2014) LPELR – 22642 (CA) where this Court in addressing the issue whether parties are bound by the terms of their contract held at page 42 of the report as follows:
“The point should however be further stressed that, an agreement entered voluntarily by parties such as in this case must of necessity be honoured in good faith, in the absence of fraud or mistake because the Court does not engage itself in the act of writing or rewriting agreements for
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parties, it must therefore avoid being branded as a meddlesome interloper. Where therefore the words in an agreement are clear, precise and unambiguous, the Court shall without much ado expound those words in their ordinary and natural sense in order to give a true and genuine effect to the intention of the parties. See JADESIMI V EGBE (2003) 10 NWLR (PT. 827) page 1…”
The point I seek to emphasise here is that parties are bound by the contract they voluntarily entered into and cannot act outside the terms and conditions contained in the said contract because they have clearly expressed their intention in a document and which intention the Court is bound to construe as per the wordings in this contract in the absence of any ambiguity.
See ZAKHEM CONSTRUCTION (NIG) LTD VS. EMMANUEL NNEJI (2006) 5 SCNJ 242 and AG RIVERS STATE VS. AG AKWA IBOM STATE & ANOR (2011) 3 SC page 1; BABATUNDE VS. BANK OF THE NORTH LTD & 2 ORS. (2011) 12 SC (PT. V) page 1.
In the instant case, the contention of the learned counsel for the Appellant is that clause 2(a) of Exhibit B (the Tenancy Agreement) which sought to fix rent payable by the subtenants in each
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of the 12 room stores at N2000 is to the extent of such fixture oppressive, and unfair to the Appellant and therefore unconscionable and ought not to have been relied on and enforced by the trial Court.
Now the said paragraph 2(a) of Exhibit B reads thus:
“That the rent shall be N2000 (Two thousand Naira) per store monthly for the 25 years, that is until the year 2022, but the Tenant shall pay to the Landlord N500.00 (Five hundred Naira) per store monthly and keep N1,500 (One thousand five hundred naira) to defray the cost of developing the property.”
The above set out paragraph of Exhibit B no doubt speaks glaringly for itself. The intention of the parties as expressed therein, is that the rent to be paid monthly for each store shall be the sum of N2000 for 25 years from the day the agreement took effect in 1997. That is until the year 2022. The proceeds from the rent, that is N2000 per month for each of the 12 stores is to be shared by way of the Appellant keeping the sum of N1,500 while she pays N500 to the Respondent.
The basis for the Appellant keeping the sum of N1,500 out of the N2000 monthly rent per store is according
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to the agreement to defray the cost of developing the property.
My own simple understanding of paragraph 2(a) of Exhibit B is that the rent payable on the 12 stores in the sum of N2000 monthly shall run for 25 years until 2022. The said paragraph 2(a) might have been inelegantly drafted without taking into consideration the dynamics of our economic system having regard to the fluctuating nature of the Naira and that rents hardly remain static except where strictly stated as in this case.
Ironically, from the evidence and submission of counsel, the appellant’s counsel was honoured with the privilege of preparing the tenancy agreement and he found it expedient to so incorporate paragraph 2(a) which the Respondent endorsed and executed without much ado.
As earlier expressed in this judgment with the support of authorities, the law is settled that parties to an agreement are bound by the terms and conditions of the contract they signed and the primary duty of the Court is restricted to interpretation and enforcement of the terms of the contract as agreed by the parties thereto. Vide ISHENO VS. JULIUS BERGER PLC (2008) 3 NSCQR (PT1) 296 and
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KAYDEE VENTURES LTD VS. MINISTER FCT (2010) 4 NSCQR (PT 2) 830; LINTON INDUSTRIAL TRADING COMPANY (NIG) LTD VS. C.B.N & ANOR (2013) LPELR – 22036 (CA).
On this premise, I am of the view that the terms of paragraph 2(a) of Exhibit B which is binding on the parties concerned is that the rent payable on each of the 12 stores is fixed at N2000 monthly and which rent is to run for 25 years from 1997.
Furthermore, the Respondents as the landlord shall be paid N500 in each store monthly while the Appellant retains the sum of N1,500 to defray the cost of developing the property in their agreement as expressed in Exhibit B. If parties enter into an agreement, they are bound by its terms. One cannot therefore legally or properly read into the agreement the terms on which the parties have not agreed. See WILLIAMS EVBOUMWAN & ORS. VS. JONATHAN ELEMA & ORS (1994) 7 – 8 SCNJ page 2.
In this regard the contention by learned counsel for the Appellant that paragraph 2(a) of Exhibit B is oppressive, unfair and therefore unconscionable and should therefore not be enforced is not sustainable. Moreso, that there is no evidence of fraud, deceit
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or misrepresentation and that the whole agreement was prepared by the Appellant’s counsel who signed same with the Respondent without any proof of compulsion.
The learned counsel for the Appellant has also sought to justify the unilateral increase of the rent payable on the stores since 2003 wherein he argued in paragraph 5.02 of the Appellant’s brief of argument as follows:
“We submit that, in a lease agreement particularly the type herein which requires the Appellant to forever cede or hand over possession of the 12 shops to the Respondent at the expiration of the term certain, the parties usually agree on a ground rent to be paid to the landlord by the tenant periodically, but do not go further to fix the rent the tenant is to charge on her sub-tenant and/or expect that such rent on the subtenants are to be shared between landlord and tenant on a pro-rata or any other basis.”
To my mind, the above set out submission still amounts to begging the question, which put succinctly is;
What is the purport of the clear wordings in paragraph 2(a) of Exhibit B which is agreement prepared by the counsel for the Appellant and
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at the instance of the Appellant before it was studied and executed by the parties? The unsolicited semantics and undue appeal to morality as embarked upon by the Appellant’s counsel cannot unfortunately alter the content of the agreement to the effect that rent for each of the 12 stores was fixed for N2000 per month and that while the Appellant shall retain the sum of N1,500, the balance N500 shall be paid to the Respondent and the arrangement shall run for a period of 25 years with an initial one year moratorium in favour of the Appellant.
If anything, the act of the Appellant in embarking on a unilateral series of increase in the rent for the stores without the prompting or in consultation with the Respondents since 2003 constitutes an infringement of the provisions of paragraph 2(a) of Exhibit B in the real sense of the wordings. But this is by the way as the issue of breach is not one of the grounds of appeal stricto sensu.
It is expedient at this juncture to set out the findings of the trial Court on the issue as detailed in pages 44 to 46 of the record of appeal. To wit:
“The Plaintiff witness testified that it was discovered
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that defendant in January 2003 was charging N4,500 per store up stairs and N5000 per store downstairs. In 2005 the sub-tenants were paying N6000 per store upstairs and N8000 per store downstairs. That the defendant did not disclose these increases to the Plaintiff. That the increases would have benefited the Plaintiff on a pro rata basis. I am satisfied that from Exhibit D, there is no doubt that the defendant unilaterally increased the rent payable per shop in the property. Although Exhibit B is silent as to who fixed the rent and who is to determine it one way or the other, I am sure the defendant cashed in on this lapse. Though it is settled law that is not the function of the Court to make contracts for the two contracting parties, it is however the Court’s duty to construe the surrounding circumstances including written and oral statements as to effectuate the intention of the parties. See O.B. Nig. Plc. Vs. O.B.C. Ltd. (2005) Vol. 123 LCRN 34 at 58.
From the surrounding circumstances especially Exhibit B2, I find that the true intention of the parties was to among other things make the defendant finance the project to the tune of N4.2million
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and to recoup her money within a period of 25 years at a static or fixed rate of N2000 per month from each of the 12 stores with defendant retaining ¾ of the said rent and plaintiff retaining ¼ thereof i.e Defendant retaining N1500 and Plaintiff N500. However, the parties failed to project into the future. Either they were mistaken that the rents would remain static. I believe that since the defendant unilaterally hiked the agreed rent a case of anticipatory breach would arise, that is, where before the time she is to recoup her expended money in putting up the building she has acted in such a way as to lead a reasonable person to conclude that she does not intend to wait for the agreed time in that she would get more money. In my humble view the option open to the plaintiff whom I adjudge to be the innocent party is to bring this action. It is certain that the common intention of the parties is that the rents be shared for the twelve shops in the manner they agreed and shared the N2000 i.e. plaintiff gets N500 and the defendant gets N1,500 and for a period of 25 years. The Plaintiff has sufficiently proved a common intention that the rents be
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used to defray the cost of the building. The call for the rectification of the contract by the plaintiff is justified as the evidence giving rise to same is convincing. In the case of Crane vs. Hegeman-Harris Co. Inc. (1971) 1 WLR 1390 at P.I.391 Simmonds, J stated that:-
“It is sufficient to find a common continuing intention in regard to a particular provision or aspect of the agreement. If one finds that in regard to a particular point, the parties were in agreement up to the instrument and the formal instrument does not conform with that common agreement, then this, Court has jurisdiction to rectify, although it may be that there was, until the formal instrument was executed, no concluded and binding contract between the parties.”
It is my firm view that in the case at hand, equity in the exercise of its exclusive jurisdiction will not permit the defendant to exclusively benefit from a unilateral and proven hike in the rent as mutually agreed by both parties. The defendant’s action must therefore necessitate a rectification of the contract as demanded by the plaintiff in the amended statement of claim. The hike in the rent unilaterally does not
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suffice to nullify the contract at law but it is material enough to attract the intervention of equity. In the circumstance in this case equity has to interfere to give meaning and meet the clear intentions of the parties when they drew up the contract in Exhibit B.”
I agree with the findings of the learned trial Judge save for the finding that there was an anticipatory breach of the terms of paragraph 2(a) by the Appellant by unilaterally hiking the agreed rent. The point is that a breach resulted from the very date she increased the rent payable on the store contrary to the clear terms of the agreement that the rent is fixed for N2000 monthly for 25 years and that is until the year 2022.
But as earlier stated, the issue whether there was a breach or not is outside the scope of this discourse. On the finding by the learned trial Judge that there is need for rectification of the contract, learned counsel for the Appellant had argued that the equitable remedy of rectification can only apply where it is sought to correct or rectify a document which purports to embody some prior agreement whether oral or in writing and which prior agreement has not
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(due to mutual mistake) been incorporated in the document, therefore in the absence of any such prior agreement the issue of rectification cannot apply in the instant case, because a mistake of fact by only one party cannot evoke the equitable remedy of rectification.
For the Respondent, the contention is that the learned trial Judge was right in making the order for rectification having regard to the case made out by the parties. On this he referred to the findings of the learned trial Jude at page 46 and 47 of the record of appeal.
The said findings of the learned trial Judge reads thus:
“The declaration sought by plaintiff in paragraph 11(b) will also not be made as strictly speaking Exhibit B has not been breached conversely the declaration sought by Plaintiff in paragraph 11(c) is the proper declaration to be made in the circumstances of this case in view of the finding of this Court that there was a unilateral hike in the rents payable on the property by the defendant and she alone benefits from the hike in rents. This Court being a Court of law and equity will not allow the ends of justice to be defeated by the strict application of
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the law which in this instance would appear to be that the contract as negotiated is that the Plaintiff is entitled to N500. Equity will ask why defendant who by the said same contract should get N1,500 will be allowed to increase her earning from Plaintiff’s property while Plaintiff sticks to N500. This is definitely inequitable. Consequently, the order sought for by the Plaintiff in paragraph 11(d) is well founded and succeeds as it is only through this means that the parties will be able to enjoy the benefit and meaning of Exhibit B and invariable guide their future relationship and determine when the contract will terminate.”
The said finding of the learned trial Judge as above set out is acceptable to me to the extent that there is need for rectification of the contract as equity takes as done that which ought to be done. I am not unaware of the Appellant’s contention that rectification mainly applies to correct or rectify a document embodying a prior agreement and that a mistake of fact by only one party cannot evoke the equitable remedy of rectification. Vide F.E. ROSE LONDON LTD. VS. WILLIAM H. PINJURO & CO. LTD (1953) 2 QB
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450 and WEEDS VS. BLANEY (1976) 120 SJ 333:239 EC 279.
These are mainly foreign High Court authorities which could be persuasive. However given the peculiar nature of the instant case where both parties to the agreement inadvertently omitted to address the possibility of subsequent rent increase for the stores but held down to a rent of N2000 monthly for 25 years raises serious cause for concern. Moreso that the Appellant turned around to exploit the lacuna to her own sole advantage by increasing the rent over the years since 2003 and solely enjoying the benefit of such increase without due consideration or regard to the financial interest of the Respondent (her Landlord) indeed calls for the intervention of the Court of equity to meet the ends of justice.
This is not a case of mistake of fact by one party to the agreement as alluded to by the Appellant’s counsel but a mutual omission by both parties to incorporate fundamental provision in the agreement for the benefit of both the Appellant and the Respondent. In this regard I believe that an order of rectification will serve its equitable purpose in the transaction between the parties
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and the trial Court was on solid ground to have so ordered. The original agreement as per paragraph 2(a) of Exhibit B is that the rent for each of the 12 stores shall be fixed at N2000 monthly for a period of 25 years to end in the year 2022.
Furthermore, the rent of N2000 is to be shared in a manner that the Appellant shall retain N1,500 to enable her recover the costs of developing the property over the said 25 years and to pay the balance N500 to the Respondent as the Landlord. However by the year 2003, the Appellant unilaterally increased the rent to N5000 and subsequently to N6000 and N8000 respectively and in all these increase, she continued to give the Respondent only N500 and retain whatever extra balance accruable to her based on the amount of rent collected from the sub-tenants. It follows that, contrary to the provision of paragraph 2(a) of Exhibit B which prescribes that the Appellant shall keep N1,500 of every N2000 rent collected and pay the balance of N500 to the Respondent, that Appellant (from the evidence before the trial Court) now, retains N7,500 every month for each of the 12 stores while she still continued to give the
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Respondent only N500 as per the agreement which never allowed or provided for any increase or variation of the rent payable on the stores.
This approach is no doubt extremely exploitative and justice demands that it must be addressed by way of rectification of the agreement as equity cannot shut its eyes to the exploitative propensity of one of the parties to the agreement which created a lacuna by the making of the Appellant who was given the privilege to prepare the said agreement.
These issues are accordingly resolved against the Appellant.
On issue 4, that is, whether the lower Court was right to have granted relief 11(d) despite it being indefinite, uncertain, difficult to quantify; and not specifically pleaded and proved by the Respondent.
The learned trial Judge in granting the claim as per paragraph 11(d) of the amended statement of claim held at page 46 of the record of appeal as follows:
“Equity will ask why defendant who by the said same contract should get N1,500 will be allowed to increase her earning from plaintiff’s property while plaintiff sticks to N500. This is definitely inequitable. Consequently,
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the order sought by the plaintiff in paragraph 11(d) is well founded and succeeds as it is only through this means that the parties will be able to enjoy the benefit and meaning of Exhibit B and invariably guide their future relationship and determine when the contract will terminate.”
The said paragraph 11(d) of the amended statement of claim reads thus:
“An order directing the defendant to pay all outstanding entitlements due to the plaintiff on a pro-rata basis from the monthly rents collected from tenants in the premises of the plaintiff.”
I am minded to state that the claim as per paragraph 11(d) is ambiguous, inchoate and indeterminable given the manner it was couched.
The amount claimed is not stated, the number of years of the outstanding entitlements due to the Respondent is not also specified, neither was the pro-rata nature of the sharing.
It is not in doubt that the Appellant had unduly exploited the lacuna in paragraph 2(a) of Exhibit B to her extreme advantage by increasing the rent for the stores unilaterally and enjoying the benefits thereof to the detriment of the owner of the property. But
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unfortunately the law requires that a party seeking the intervention of the Court to right such wrong must be specific and precise in his claim. He should not make a claim at large and leave the Court to embark on a mission of speculation over the proper claim being sought. A vague expression because of its uncertainty or absurdity leads to speculation as to what is intended.
A Court should therefore not decide a case on mere conjecture or speculation. Courts of law are Courts of facts and laws. They consequently decide issues on facts established before them and in laws and as such must avoid speculations. See NUHU VS. OGELE (2003) 12 SCM 209; AGIP (NIG) LTD & ORS. VS. CHIEF C. EZENDU & ORS. (2010) 1 SC (PT. 11) 98; OKOYA & 2 ORS VS. SANTILLI & ORS (1993 – 1994) All NLR 404; UNIVERSAL TRUST BANK OF NIGERIA VS. FIDELIA OZOEMENA (2007) 1 SCNJ 318; IBRAHIM & ANOR. VS. STATE (1986) 1 NSCC 230.
The Respondent’s claim as per paragraph 11(d) of the amended statement of claim is vague, ambiguous and inchoate and as such will engender conjecture or speculation from the Court if granted.
Relief 11(e) as sought by the
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Respondent is the appropriate order to be made in the circumstance, moreso that the Respondent did not cross-appeal as per reliefs 11(a) and (b).
On the whole, this appeal succeeds in part and it is hereby allowed in part. Except for the relief contained in paragraph 11(d) of the amended statement of claim which I hereby set aside, the judgment of the High Court of Edo state delivered on the 20th of May 2008 is hereby affirmed.
For the avoidance of doubt, the order of rectification shall take effect from the 20th day of April, 2008 when the judgment of the trial Court was delivered.
Parties shall bear their costs.
HELEN MORONKEJI OGUNWUMIJU, J.C.A.: I have read the Judgment just delivered by my learned brother Samuel Chukwudumebi Oseji JCA. I agree with the reasoning and conclusion that the appeal be allowed in part and certain orders of the trial Court be set aside. I will also abide by all the consequential Orders in the lead judgment. Appeal allowed in part.
MOORE ASEIMO ABRAHAM ADUMEIN, J.C.A.: I had a preview of the judgment of my learned brother, Samuel Chukwudumebi Oseji, JCA; just delivered. I agree with the reasoning and
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conclusions of my learned brother.
I also allow the appeal in part but affirm the decision of the trial Court, as set out in the leading judgment.
I abide by the order as to costs.
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Appearances:
R.I.D. Okezie For Appellant(s)
I.D. Okoro For Respondent(s)
