ASO SAVINGS AND LOANS PLC v. WIWA (2021)

ASO SAVINGS AND LOANS PLC v. WIWA

(2021)LCN/14972(CA)

In The Court Of Appeal

(ABUJA JUDICIAL DIVISION)

On Friday, January 15, 2021

CA/A/613/2017

RATIO

COURT: PRIMARY DUTY OF THE TRIAL COURT

As the trial Court, its primary duty is to evaluate evidence and ascribe probative value to it. PER ELFRIEDA OLUWAYEMISI WILLIAMS-DAWODU, J.C.A.

EVIDENCE: BURDEN OF PROOF IN CIVIL MATTERS

Burden of proof in civil matters is on the party who asserts a fact and has to prove it. The standard of proof is preponderance of evidence or the balance of probabilities. See the cases of LONGE V. FBN PLC. 2006 3 NWLR PT. 967 P. 228, DAODU V. NNPC 1998 2 NWLR PT.538 P.355 and KALA V. POTISKUM 1998 3 NWLR PT. 540 P.1. The onus of proof of an allegation is on the party who claims and it does not shift until he has proved his case on the preponderance of evidence. When the burden is discharged, it then shifts and continues to shift. A party is not allowed to rely on the weakness of his opponent in order to succeed. See the cases of IMAM V. SHERIFF 2005 4 NWLR PT. 914 P. 80, ELIAS V. OMO-BARE 1982 2 SC P. 25 and AGBI V. OGBEH 2006 11 NWLR PT. 990 P.65. PER ELFRIEDA OLUWAYEMISI WILLIAMS-DAWODU, J.C.A.

CONTRACT: DOCTRINE OF FRUSTRATION

What then is frustration in respect of a contract and as herein between the Appellant and the Respondent. The doctrine operates in a way that a contract may be discharged if after its formation events occur making its performance impossible or illegal, and in certain analogous situations. See TREITEL, THE LAW OF CONTRACT 11TH EDITION P. 866. Supervening impossibility of performance is the most obvious ground of frustration and such impossibility is not invariably a ground of discharge, as in some contracts, even the destruction of the subject-matter of a contract does not necessarily discharge it. A contract may be frustrated by delay in performance or where the subject-matter is unavailable. PER ELFRIEDA OLUWAYEMISI WILLIAMS-DAWODU, J.C.A.
COST: ATTITUDE OF THE COURT TO THE AWARD OF COST OF ACTION

As regards the award of cost of the action, firstly, one would state that cost follows event. Where the issue of cost was not raised in the writ as a claim before the Court, it does not need to be proved strictly as in proof of special damages. It is at the discretion of the Court upon the delivery of judgment to award costs to the successful party. PER ELFRIEDA OLUWAYEMISI WILLIAMS-DAWODU, J.C.A.

Before Our Lordships:

Stephen Jonah Adah Justice of the Court of Appeal

Yargata Byenchit Nimpar Justice of the Court of Appeal

Elfrieda Oluwayemisi Williams-Dawodu Justice of the Court of Appeal

Between

ASO SAVINGS AND LOANS PLC APPELANT(S)

And

OWENS WIWA RESPONDENT(S)

ELFRIEDA OLUWAYEMISI WILLIAMS-DAWODU, J.C.A. (Delivering the Leading Judgment): This appeal emanated from the judgment of the High Court of the Federal Capital Territory, Abuja delivered by Hon. Justice Peter O. Affen on July 20th, 2017 wherein judgment was entered in favour of the Respondent (the Plaintiff at the Court below) against the Appellant (the Defendant at the Court below) for the refund of the total purchase money for a five (5) bedroom semi-detached duplex situate at Plot 1268 Gudu District, behind Apo Legislative Quarters, Abuja.

The Respondent commenced action against the Appellant initially vide an Originating Summons which by the consensus of both sides, given the contentious issues involved, the Court ordered parties to file and exchange pleadings. The following were the reliefs sought by the Respondent against the Appellant:
a. A declaration that the Defendant is bound by the contract duly executed on the 8th day of June, 2015 between the Defendant and the Plaintiff for the purchase of a unit 5 bedroom Semi Detached Duplex situate at Plot 1268, Gudu District, behind Apo Legislative Quarters, Abuja.

A declaration that there is a valid, binding and enforceable contract between the Plaintiff and the Defendant, the Plaintiff having performed the terms of the said contract for the purchase of a Unit 5 bedroom Semi Detached Duplex situate at Plot 1268, Gudu District, behind Apo Legislative Quarters, Abuja.
c. A declaration that failure of the Defendant to perform its obligation by delivering vacant possession and handing over the title documents of all that One Unit 5 bedroom Semi Detached Duplex situate at Plot 1268, Gudu District, behind Apo Legislative Quarters to the Plaintiff amounts to breach of the contract duly executed between the Defendant and the Plaintiff.
d. An Order of specific performance directing the Defendant:
(i) To release the original Title Documents over All that one Unit 5 bedroom Semi Detached Duplex situate at Plot 1268, Gudu District, behind Apo Legislative Quarters, Abuja and execution of all documents transferring Ownership, Title and Interest in all the said property to the Plaintiff.
(ii) To deliver vacant possession of the one unit 5 bedroom semi-detached duplex situate at Plot 1268, Gudu District, behind

Apo Legislative Quarters, Abuja to the Plaintiff.
(e) General damages in the sum of N10,000,000.00 (Ten Million Naira Only) against the Defendant, being for the wanton breach of contract in favour of the Plaintiff for the sale of a Unit 5 bedroom semi-detached duplex situate at Plot 1268, Gudu District, behind Apo Legislative Quarters, Abuja.
(f) 25% monthly interest on the principal sum only against the Defendant commencing from the date the cause of action arose in this suit till judgment is paid to the Plaintiff in this suit.
IN THE ALTERNATIVE
(a) A declaration that the Defendant is bound by the contract validly entered with the Plaintiff for the sale of a Unit 5 bedroom semi-detached duplex situate at Plot 1268, Gudu District, behind Apo Legislative Quarters, Abuja.
(b) A declaration that the Defendant is in breach of the contract validly executed between the Defendant and the Plaintiff for the sale of a unit 5 bedroom semi-detached Duplex situate at Plot 1268, Gudu District, behind Apo Legislative Quarters, Abuja.
(c) A declaration that the Plaintiff is entitled to a refund of the sum of N50,000,000.00 (Fifty Million

Naira Only) by the Defendant being the amount paid by the Plaintiff to the Defendant for the purchase of a one Unit 5 bedroom semi-detached duplex situate at Plot 1268, Gudu District, behind Apo Legislative Quarters, Abuja.
(d) An Order directing the Defendant to refund to the Plaintiff the sum of N50,000,000.00 (Fifty Million Naira Only) being the amount paid by the Plaintiff to the Defendant for the purchase of a unit 5 bedroom semi-detached duplex situate at Plot 1268, Gudu District, behind Apo Legislative Quarters, Abuja..
(e) GENERAL DAMAGES in the sum of N10,000,000.00 (Ten Million Naira Only) being for the wanton breach of contract against the Defendant in favour of the Plaintiff.
(f) 25% monthly interest on the principal sum only against the Defendant commencing from the date the cause of action arose in this suit till judgment sum is paid to the Plaintiff in this suit.
(g) SPECIAL DAMAGES in the sum of N5,500,000.00 (Five Million Five Hundred Thousand Naira Only) against the Defendant being the cost of instituting this suit.

Being dissatisfied with the Judgment, the Appellant filed Notice of Appeal on August 23rd, 2017 containing two (2) Grounds of appeal and seeks an order of this Court allowing this appeal and an order setting aside the decision of the Honourable Justice Peter O. Affen of the High Court of the Federal Capital Territory, (Court No. 24, Maitama), Abuja in its entirety.

In compliance with the rules of this Court, both sides filed and exchanged their briefs of argument. The Appellant’s brief prepared by Abimbola Kayode Esq, was filed and dated October 17th, 2017 and the Respondent’s which was settled by Okhai U. Ohimai Esq, was filed January 29th, 2018 and deemed as properly filed and served on November 12th, 2018. Mr. Kayode adopted the Appellant’s brief and urged that the appeal be allowed. Mr. Ohimai also adopted the Respondent’s brief and urged that the appeal be dismissed.

As garnered from the printed record before this Court, the facts that culminated into the Respondent’s suit were that the representatives of the Appellant offered for sale a Unit of 5 bedroom semi-detached duplex Plot 1268, Gudu District, behind Apo Legislative Quarters, Abuja for which the Respondent paid the sum of N50,000,000.00 as the purchase price as stipulated in the

offer letter. Since the payment, the Appellant failed to hand over vacant possession of the property and title deed to the Respondent. On the other hand, the Appellant stated that the Respondent inspected the place before purchase and saw that it was a mortgaged property not vacant, that, vacant possession was to be given to the Respondent after the Mortgagor had vacated. And that if the sitting mortgagor resisted the sale another property would be given to the Respondent by the Appellant. Further that, the transaction was put on hold when the Mortgagor challenged the sale in Court. As afore stated, the Court found in favour of the Respondent and ordered a total refund of the sum paid to the Respondent from the Appellant.

ISSUES SUBMITTED FOR DETERMINATION
APPELLANT’S SOLE ISSUE:
Was the Court below right in holding that the respondent is entitled to the refund of the sum of N50 Million less the sum of N5,239,726.03 plus 10% interest per annum on the said sum with effect from today until the entire sum is liquidated and the cost of action in the sum of N100,000.

RESPONDENT’S SOLE ISSUE
Whether the respondent is entitled to the sum of N50,000,000.00 being the total purchase money paid by the Plaintiff to the defendant towards the purchase of the 5-bedroom semi-detached duplex situate at plot 1268 Gudu District, behind Apo Legislative Quarters Abuja, less the sum of N5,239,726.03 transferred on 7/10/16 by the Defendant into Zenith Bank PLC Account No. 1014162184 held by Barazena Global Services Limited at the instance of the Plaintiff and/or his solicitors and a cost of N100,000.00 being cost of this action as decided by the Court below.

Both issues are similar in content. I shall adopt the sole issue by the Appellant for the determination of this appeal with an amendment to read thus:
Was the Court below right in holding that the respondent is entitled to the refund of the sum of N50MilIion less the sum of N5,239,726.03 plus 10% interest per annum on the said sum until the entire sum is liquidated and the cost of action in the sum of N100,000.

SUBMISSION ON BEHALF OF THE PARTIES
Mr. Abimbola Kayode Esq, submitted that, it was uncontroverted at the trial that the Respondent was aware of the mortgage over the property and that the Mortgagor refused to vacate and in

fact instituted an action to challenge the sale. The performance of the contract with the Respondent was therefore frustrated, the sale became impossible, the object in consequence failed to crystallize and cited in support the cases of MAZIN ENG. LTD. V. TOWER ALUMINIUM 1993 5 NWLR PT. 295 P. 526 and LAGOS STATE GOVERNMENT V. TOLUWASE 2013 1 NWLR PT. 1336 P. 555. He submitted that performance of the agreement between the parties was completely uprooted by the institution of the case by the Mortgagor/Occupier. That, the automatic dissolution of the contract took place and further performance is excused. He argued that, post judgment interest ought not to have been granted as it was not prayed for and in support cited the cases of F.J.S.C. V. THOMAS 2013 17 NWLR PT. 1384 P. 503 and ADETOUN OLADEJI NIG. LTD. V. N.B. PLC. 2007 5 NWLR PT. 1027 P. 415. Further submitted that, the Court should not have awarded N100,000.00 as the cost of action. In conclusion, he urged that the appeal be allowed and the decision of the Court below set aside.

Mr. Ohimai Esq submitted that, the Respondent established that he was never aware of any encumbrance on the property for

which he paid the purchase price. That, the Appellant deliberately refused to disclose it to the Respondent and so the Appellant cannot claim frustration of contract as he is benefitting from his own wrong. That, the principle of frustration is not applicable herein and the Appellant having failed to transfer or give vacant possession of the property is not entitled to hold on to the Respondent’s money as it would be unjust. In support, he cited the case of U.B.A. PLC. V. BTL INDUSTRIES LTD. 2006 NWLR PT. 1013 61, MOBIL V. COKER 1971 NMLR 53, NWOLISAH V. PASCAL NWABUFOH 2004 NWLR PT. 879 507 and OYEBANJI V. FOWOWE 2008 ALL FWLR PT. 410 786.

He submitted that the grant of interest on the judgment sum is covered by the provisions of Order 39 Rule 7 of the Rules of the High Court of the Federal Capital Territory, Abuja 2004 which empowers the Court the discretion to so award.

He submitted that the contention of the Appellant in respect of the award for the cost of the action is misguided as costs follow event and a successful party is entitled to costs and cited the case of AKINBOBOLA V. PLISSON FISKO NIG. LTD. 2004 22 WRN 52. In conclusion, he urged that the appeal be dismissed as lacking in merit and to affirm the judgment of the Court below.

THE COURT
SOLE ISSUE
Was the Court below right in holding that the respondent is entitled to the refund of the sum of N50 Million less the sum of N5,239,726.03 plus 10% interest per annum on the said sum until the entire sum is liquidated and the cost of action in the sum of N100,000.

I have thoroughly read through the processes before this Court for and against this appeal and having so done I shall proceed to consider the singular issue herein.

Between the Appellant and the Respondent is a subsisting contract for the sale of a 5 bedroom duplex for which total purchase price had been paid by the Respondent. However, the Appellant had since failed to hand over the vacant possession of the property to the Respondent for the reason that the mortgagor refused to vacate and is challenging the sale to the Respondent. He claimed that the Respondent was aware of an encumbrance on the property even at the very beginning before payment was made. The Respondent denied any knowledge of an encumbrance. The Appellant is against the order for refund

and argues that there was frustration of the contract which was never envisaged and should be considered. Among the reliefs sought by the Respondent is for his money to be refunded as the Appellant cannot continue to hold on to his money without performance. As earlier stated, the Court below granted some of the reliefs of the Respondent. As the trial Court, its primary duty is to evaluate evidence and ascribe probative value to it. The consideration of the sole issue shall be through the findings and conclusion reached at the Court below, whether or not its position should be affirmed.

weakness of his opponent in order to succeed. See the cases of IMAM V. SHERIFF 2005 4 NWLR PT. 914 P. 80, ELIAS V. OMO-BARE 1982 2 SC P. 25 and AGBI V. OGBEH 2006 11 NWLR PT. 990 P.65.

The Court found from Exhibit P1, the letter of offer by the Appellant to sell the property in question to the Respondent, which the Respondent accepted. But there was no stipulated time agreed by the parties for the Appellant to hand over the vacant house and its title documents to the Respondent. It correctly held that, the law allows a reasonable time for the Appellant to do that. Having not been handed over, after demands made and the institution of the suit by the Respondent, the Appellant claimed that the contract was frustrated by the intervening law suit of the Mortgagor, challenging the sale and that, it became impossible for it to perform its obligation. As already mentioned, it claimed that the Respondent was well aware of the encumbrance on the property and went ahead notwithstanding, to purchase the house by paying the purchase sum. The Respondent opposed and denied any knowledge of the encumbrance on the property prior to payment, that it was a fact not

disclosed by the Appellant. The Court found and one agrees with it that, indeed, there was no knowledge on the part of the Respondent of the encumbrance. By Exhibit D6, the Appellant’s reply letter dated 5/11/15 to the Principal Partner of Bogana Chambers’ demand letter of 7/9/15 for the possession of the house, the Court found by the letter, that the Appellant informed the Respondent for the first time about the encumbrance on the land. The Court stated thus on page 203 of the Record:
“…The language of Exhibits (sic) D6 is “please be informed that”, which suggests that it is by the said letter that the Defendant sought to apprise the Plaintiff for the first time of the existence of the interest of a third party/mortgagor in the property.”

ground of frustration and such impossibility is not invariably a ground of discharge, as in some contracts, even the destruction of the subject-matter of a contract does not necessarily discharge it. A contract may be frustrated by delay in performance or where the subject-matter is unavailable.
The Appellant in the instant, appeals against the judgment in the following respect, whether the Court was right to have ordered a refund of the purchase money paid by the Respondent, the 10% post judgment interest award and cost.
With respect, one cannot totally agree with the Court that, the Appellant in the face of the existing suit by the Mortgagor did not breach the contract of sale, until and unless the suit was resolved in the Appellant’s favour and it fails to hand over vacant possession of the property to the Respondent. The reason being that, the Appellant can be seen as one who brought the situation upon itself, because at the time of negotiations and up until the Respondent’s acceptance of the offer of sale and even at the time of payment of purchase price, the Appellant would appear to have misrepresented or falsely represented the position of

the property as been available and ready for possession/occupation of the buyer, the Respondent in this case. As correctly found by the Court, it was not disclosed to the Respondent that there is an encumbrance on it, and that the Mortgagor may decide not to give it up and may challenge any sale of it. In my view and humbly, the Appellant’s representation by its action, even if not written or specifically stated, which can be inferred that, the property was available and was just for the Respondent to pay, was false. Because, in actual fact, after the negotiations and the payment of the purchase money, the Appellant could not hand over the property and title documents to the Respondent even after demands were made in that regard. The fact as noted by the Court that, the agreement between the parties failed to specify the time of performance, that is when to hand over the property, only bought the Appellant some time even as the Court stated, that performance in that case would be interpreted to be within a reasonable time. However and notwithstanding the reasonable time position, the Appellant should be held to answer for the false representation to the

Respondent that, the property was free and available. In my considered view and humbly, the intervening event, that is, the action instituted by the Mortgagor, should have been a probable event in the expectation of the Appellant, which again was never disclosed nor discussed with the Respondent. In all of these, one does not fail to appreciate the need for due diligence on the part of the buyer, the Respondent, however.
The Appellant’s claim that the Respondent knew of the encumbrance on the property is incorrect as the Court found that the Respondent was informed only about after three (3) months after the purchase price had been paid.
I have painstakingly and calmly gone through the submission on behalf of the Appellant. The argument clearly is that “the dissolution of the contract occurs automatically and further performance is excused … and the contract looked at as a whole, must be considered as frustrated by reason of the event.”
Respectfully, it does not lie in the mouth of the Appellant to claim that performance is excused and the contract as a whole is frustrated given the record before this Court. The law cannot allow the

Appellant to benefit from its misrepresentation or false representation and to hide under the doctrine of frustration. It would be unjust and contrary to the dictates of justice on the Respondent, where the argument of the Appellant is accepted, given the circumstance of this appeal. Section 4 (2) of the Law Reform (Contracts) Act, Federal Capital Territory Cap 517 provides clearly the position of justice and fairness thus:
Section 4 Adjustment of rights and liability of parties to frustrated contract
(1) Where a contract governed by law has become impossible of performance or been otherwise frustrated, and the parties thereto have for that reason been discharged from the further performance of the contract, the following provisions of this section shall, subject to the provisions of Section 3 of this Act, have effect in relation thereto.
(2) All sums paid or payable to a party in pursuance of the contract before the time when the parties were so discharged (in this Part of this Act referred to as “the time of discharge”) shall, in the case of sums so paid, be recoverable from him as money received by him for the use of the party by whom the sums were paid, and, in the case of sums so payable, cease to be so payable.

From the foregoing, the order of refund by the Court below was right and one cannot agree more with it. The Court seeks to do substantial justice always and that order encompasses same.

The claim for pre-judgment interest was rightly refused by the Court. The law is that, such interest must be specifically claimed and proved and the Court as stated on page 208 of the record, found no scintilla of evidence in respect of such claim.

Post judgment 10% interest is generally a mandatory provision of the rules of the Court and there is no necessity to apply for it through Writ or orally. See Order 39 Rule 7 of the Rules of Civil Procedure of the High Court of the Federal Capital Territory, Abuja, 2004.

In the light of the foregoing, the singular issue herein is resolved against the Appellant. This appeal cannot be allowed, it therefore fails and is hereby dismissed accordingly. The Judgment of the High Court of the Federal Capital Territory, Abuja delivered by Hon. Justice Peter O. Affen on July 20th, 2017 is hereby affirmed.

STEPHEN JONAH ADAH, J.C.A.: I have had the benefit of reading in draft, the judgment just delivered by my learned brother, Elfrieda Oluwayemisi Williams-Dawodu, JCA.

I agree with my learned bother’s reasoning and conclusion that this appeal is lacking in merit. I too, do dismiss the appeal.

YARGATA BYENCHIT NIMPAR, J.C.A.: I had the privilege of reading in advance the judgment just delivered by my learned brother, E. O. WILLIAMS-DAWODU, JCA and I am in agreement with his reasoning and conclusion arrived at therein.

Appearances:

A. M. KAYODE, with him, F. P. CHORIO For Appellant(s)

O. U. OHIMAI, with him, SMART UKPONAH For Respondent(s)