ISAAC SHEDOWO v. ATTORNEY GENERAL OF LAGOS STATE
(2019)LCN/12805(CA)
In The Court of Appeal of Nigeria
On Wednesday, the 6th day of March, 2019
CA/L/15/2016
RATIO
CONTRACT: WHERE A CONTRACT IS NOT CERTAIN
“In BEST (NIGERIA) LTD vs. BLACKWOOD HODGE (NIGERIA) LTD (2011) LPELR (776) 1 at 38, the apex Court held that: ‘Where a contract is made subject to the fulfilment of certain specific terms and conditions, the contract is not formed and not binding unless and until those terms and conditions are complied with or fulfilled.’ See also TSOKWA OIL MARKETING CO LTD (2002) 11 NWLR (PT 777) 163 and NIGER CLASSIC INVESTMENT LTD vs. UACN PROPERTY DEVELOPMENT CO. PLC (2016) LPELR (41426) 1 at 20. The phrase ‘subject to contract’ is a long standing rule which means that the contract is incomplete and not binding until a formal contract has been settled, and that the matter remains in negotiation until a formal contract is executed.” PER UGOCHUKWU ANTHONY OGAKWU, J.C.A.
JUSTICES
JOSEPH SHAGBAOR IKYEGH Justice of The Court of Appeal of Nigeria
UGOCHUKWU ANTHONY OGAKWU Justice of The Court of Appeal of Nigeria
TOBI EBIOWEI Justice of The Court of Appeal of Nigeria
Between
ISAAC SHEDOWO Appellant(s)
AND
ATTORNEY GENERAL OF LAGOS STATE Respondent(s)
UGOCHUKWU ANTHONY OGAKWU, J.C.A. (Delivering the Leading Judgment):
The provenance of this appeal is in the transaction between the parties in respect of property situate at Abraham Adesanya Housing Estate, Ajah, Lagos. The Appellant claims that after having paid the Respondent the contractual sum of N2 million, the Respondent refused to give him possession of the property. The Respondent however asserts that there was no valid and enforceable contract. The Appellant consequently instituted proceedings at the High Court of Lagos State in SUIT NO: ID/634/2013: ISAAC SHEDOWO vs. ATTORNEY-GENERAL OF LAGOS STATE claiming the following reliefs:
a) A DECLARATION that having paid the full purchase price N2million for the Maisonette referred to as MII/10/House at Abraham Adesanya Housing Estate Ajah, he has become the lawful owner.
b) AN ORDER directing the Lagos State Government to give him possession of the Maisonette referred to as MII/10/House at Abraham Adesanya Housing Estate, Ajah or a completed building of similar standard in similar location.
c) DAMAGES in the sum of N10 million for depriving him of the property which he has fully paid for.
IN THE ALTERNATIVE
a) AN ORDER directing the Lagos State Government to refund to him the sum of N2 million being the purchase price plus interest at the rate of 20% per annum from February 2002 till judgment and thereafter at 6% per annum after Judgment until full payment
b) DAMAGES in the sum of N5 million being the loss suffered by him for a breach of the Defendant?s contractual obligation to him?
(See pages 137-138 of the Records)
The parties filed and exchanged pleadings and at the conclusion of the inter partes hearing, the lower Court entered judgment for the Appellant for the alternative relief for the refund of the sum of N2 million he had paid. The Court however declined to award the pre-judgment interest and damages for breach of contract claimed by the Appellant.
The Appellant was dissatisfied with the said judgment and appealed against the same. The chafed judgment of the lower Court which was delivered on 29th June 2015 is at pages 313-331 of the Records while the Notice of Appeal which was filed on 17th August 2015 is at pages 332-337 of the Records. The Records of Appeal were compiled and transmitted and the parties filed and exchanged briefs of argument.
At the hearing of the appeal, the Respondent was not represented, though duly served; the Court then treated the appeal as duly argued by the Respondent pursuant to Order 19 Rule 9 (4) of the Court of Appeal Rules, 2016. The learned counsel for the Appellant, Akin Adepoju, Esq., identified the processes filed and urged the Court to allow the appeal.
In the Appellant’s Brief which was filed on 29th December 2016, the Appellant distilled five issues for determination as follows:
1. Whether the learned Trial Judge properly considered the facts in issue when she held that because the Appellant did not file a Reply to controvert the averments contained in Paragraphs 5, 6, 7 and 8 of the Consequential Amended Statement of Defence, he has not joined issues with the Respondent and is deemed to have admitted as true the averments in the Defence.
2. Whether the non-payment of the sum of N21,000 for Insurance, Maintenance and Documentation amounted to non-acceptance of the offer of the Respondent and as a result, there is no contract between the parties to contract between the parties to confer a proprietary right on the Claimant.
3. Whether the learned Trial Judge was not in error when she held that there must be a Final Allocation Letter to embody all the terms of the contract and that as the Appellant was not issued with a Final Allocation Letter but with a Provisional Letter of Offer (Exhibit C7) there was no contract.
4. Whether the learned Trial Judge having held that the Appellant was entitled to a refund of the sum of N2 Million paid by him on the ground of money had and received can refuse to award damages or interest for the period the Respondent denied the Appellant the use of his money.
5. Whether from the available evidence damages and interest ought not to have been awarded to the Appellant.?
The Respondent’s Brief was filed on 6th March 2017 but deemed as properly filed on 16th January 2019. The Respondent formulated two issues for determination, namely:
1) Whether in the circumstances of this case the Honourable Court was right to hold that there was no valid contract between parties in this case. (Distilled from Ground 2, 3 and 4)
2) Whether from the available evidence before the Court, the Appellant is entitled to the award of damages and interest in this case. (Distilled from Grounds 5, 6 and 7)
The issues as crafted by the Respondent are succinct and concise. Indeed the said issues are distensible and encompass issue numbers two, three, four and five distilled by the Appellant. In the circumstances the issues on the basis of which I would presently consider the submissions of learned counsel and resolve this appeal are the Appellant’s issue number one and the Respondent’s issue numbers one and two. In order to conduce to the utmost pellucidity, the issues are:
1. Whether the learned Trial Judge properly considered the facts in issue when she held that because the Appellant did not file a Reply to controvert the averments contained in Paragraphs 5, 6, 7 and 8 of the Consequential Amended Statement of Defence, he has not joined issues with the Respondent and is deemed to have admitted as true the averments in the Defence.
2. Whether in the circumstances of this case the Honourable Court was right to hold that there was no valid contract between parties in this case.
3. Whether from the available evidence before the Court, the Appellant is entitled to the award of damages and interest in this case.
ISSUE NUMBER ONE
Whether the learned Trial Judge properly considered the facts in issue when she held that because the Appellant did not file a Reply to controvert the averments contained in Paragraphs 5, 6, 7 and 8 of the Consequential Amended Statement of Defence, he has not joined issues with the Respondent and is deemed to have admitted as true the averments in the Defence.
SUBMISSIONS OF THE APPELLANT’S COUNSEL
The Appellant submits that the lower Court was wrong by holding that because the Appellant did not file a Reply to the Statement of Defence, he had admitted the averments in paragraphs 5, 6, 7 and 8 of the Consequential Amended Statement of Defence. It was contended that the said paragraphs did not raise any new issues but were the Respondent’s response to paragraph 14 of the Amended Statement of Claim and was the joining of issues in respect thereof.
It was posited that a Reply is to answer new facts raised in the defence and that it is not necessary where the only purpose is to deny the averments made in a statement of defence filed in answer to a statement of claim. The cases of OSHODI vs. EYIFUNMI (2000) 7 SC (PT II) 145, OBOT vs. CENTRAL BANK (1993) SCNJ 268 at 284, SPASCO vs. ALRAINE (1995) 9 SCNJ 288 at 305 and ISOLA vs. SOCIETE GENERALE BANK (1997) 2 SCNJ 2 at 16 were referred to.
It was stated that the evidence extracted from the DW1 under cross examination supported the averments in the Amended Statement of Claim, which evidence can be relied upon in proof of the facts in dispute vide ADEOSUN vs. THE GOVERNOR, EKITI STATE (2012) 1 MJSC (PT I) 1 at 26. It was conclusively submitted that the facts pleaded by the Respondent being in conflict with the Appellant?s averments, the parties had joined issues which would be for resolution at the trial. The case of UNION BANK vs. JERIC NIG LTD (1982) [sic] 2 NWLR (PT 536) 63 was relied upon.
SUBMISSIONS OF THE RESPONDENT’S COUNSEL
It is the Respondent’s submission that the question of whether the averments in paragraphs 5, 6, 7 and 8 of the Consequential Amended Statement of Defence were admitted is of no consequence as the decision of the lower Court did not turn on the question of the said admission. It was opined that the lower Court considered the merits of the case by assessing and evaluating the evidence adduced before arriving at its decision.
RESOLUTION OF ISSUE NUMBER ONE
The gravamen of the contention under this issue is whether there was a need, on the state of the pleadings, for the Appellant to have filed a Reply to the Consequential Amended Statement of Defence and if the failure to have filed a Reply amounted to an admission of any of the averments in the Consequential Amended Statement of Defence, particularly paragraphs 5, 6, 7 and 8 thereof.
Dealing with this issue, the lower Court after stating the case as averred by the parties in their pleadings specifically stated as follows at pages 327-328 of the Records:
The Claimant, however, chose to be silent in the face of those ‘damning’ averments contained in paragraphs 5, 6, 7 and 8 of the Statement of Defence.
The law, I find, is very well settled that in circumstances such as this one, where a claimant fails to file a Reply to controvert or deny very damaging assertions in a Statement of Defence, that claimant will be taken to have admitted as true the said averments in the Defence. I refer, for example, to the Supreme Court decisions in Gabriel Iwuoha & Anor. v Nigerian Postal Services Limited & Anor. [2003] 8 NWLR (Pt. 822) 308, and Chief Raymond D. Ogolo & Ors. v Chief Paul D Fubara & Ors. [2003] 11 NWLR (Pt. 831) 231, 265-266.
Thus, and judging by the state of the pleadings, the Claimant is taken by me to have admitted to be true the Defendant?s position that there was, in fact, no contract in existence between him and the Government as he failed to take the necessary step (that is, to pay the outstanding sum of N21,000.000k) upon which the existence of such a contract was expressly predicated. With no contract in place he then had no cause of action before the Court as he had no proprietary rights to the property in question at all.
This should put paid to the substance of this action. However, and just for the sake of the completion of records (and, also, just in case I was wrong), I will still proceed to consider the merits of his Claim on the basis of the evidence placed before me. (Emphasis supplied)
Without a doubt, the lower Court held that the Appellant, having remained silent in the face of the averments in paragraphs 5, 6, 7 and 8 of the Consequential Amended Statement of Defence is deemed to have admitted the said paragraphs. However, the lower Court did not decide the action based on what it held to be the said admission. In recognition of its fallibility, the lower Court proceeded to consider and decide the substance of the action and did not merely premise its decision on the narrow technical issue of the purported admission. This being so, even if the lower Court was indeed wrong on the question, it would not result in the decision of the lower Court being reversed. It is therefore effulgent that the contention in this issue is academic as a favourable resolution of the issue would not confer any benefit on the Appellant.
The Courts do not exist for the discourse of academic questions and matters. The ivory towers, law journals and law periodicals are the proper fora for such an exercise. In PLATEAU STATE vs. A-G FEDERATION (2006) 3 NWLR (PT 967) 346 at 419, Tobi, JSC stated:
‘A suit is academic where it is thereby theoretical, makes empty sound and of no practical utilitarian value to the plaintiffs even if judgment is given in his favour. A suit is academic if it is not related to the practical situation of human nature and humanity.’ See also EZEANYA vs. OKEKE (1995) 4 NWLR (PT 388) 142 at 165, GLOBAL TRANSPORT OCEANICO S. A. vs. FREE ENTERPRISES (NIG) (2001) LPELR (1324) 1 at 19-20 and AGBAKOBA vs. INEC (2008) 18 NWLR (PT 1119) 489 at 547.
In the circumstances, this issue is inutile as the practical situation is to consider and decide whether the decision of the lower Court on the merits of the action is the correct decision. This is what will now captivate our attention under the remaining two issues for resolution in this appeal.
ISSUE NUMBER TWO
Whether in the circumstances of this case the Honourable Court was right to hold that there was no valid contract between parties in this case.
SUBMISSIONS OF THE APPELLANT?S COUNSEL
The Appellant’s submissions on this issue are in his issue numbers two and three. He argues that the lower Court was wrong when it held that the non-payment of the sum of N21, 000.00 amounted to non-acceptance of the offer. It was opined that payment of the sum of N21, 000.00 was a post contract event which would take place at the point of handing over of the property; the sum of N2million having been paid for provisional allocation of the property to be made, that the Appellant had acquired proprietary interest which the non-payment of the said sum of N21, 000.00 can only make inchoate.
It was asserted that provisional allocation having been made and proprietary interest acquired, the payment of the N21, 000.00 will lead to issuance of final allocation letter, handing over of keys and possessory right conferred on Appellant. It was opined that the stakeholders meeting the Appellant was invited to and the correspondence between the parties raised the presumption of a contractual relationship between them and that the Respondent cannot approbate and reprobate, having by its conduct led the Appellant to believe that there existed an implied contract. The cases of A-G KADUNA STATE vs. ATTA (1986) 4 NWLR (PT 38) 785 and KUKU vs. PERMAROOF CONTRACTORS LTD (1971) UILR 161 were referred to. It was maintained that the provisional letter of allocation, Exhibit C7, created a valid and enforceable contract between the parties.
It was conclusively submitted that if Exhibit C7 and Exhibits D3 and D4, issued to another allottee who got a final letter of allocation, were properly construed, it would have shown that there was a valid contract and the Appellant was entitled to be given a final letter of allocation.
SUBMISSIONS OF THE RESPONDENT’S COUNSEL
The Respondent submits that Exhibit C7, the provisional offer of allocation letter, is the only document dictating the relationship between the parties and that the lower Court correctly analysed the said Exhibit and held that the necessary conditions required to give validity to the contract had not been performed and so a valid contract could not be said to exist. The cases of DANGOTE GENERAL ILE PRODUCTS LTD vs. HASCON ASSOCIATES NIG. LTD (2013) LPELR 20665 (SC) and BILANTE INTERNATIONAL LTD vs. NDIC (2011) LPELR 781 (SC) were referred to on the essential elements of a valid contract and it was posited that by Exhibit C7, the offer made therein can only be deemed accepted upon payment of the sum of N21, 000.00. It was stated that the Appellant not having paid the said sum of N21, 000.00, there was no contract since the acceptance must correspond with the terms of the offer vide BILANTE INTERNATIONAL LTD vs. NDIC (supra), NJIKONYE vs. MTN NIG. COMM. LTD (2008) 9 NWLR (PT 1092) 339 at 363, ODUTOLA vs. PAPERSACK (NIG) LTD (2006) 18 NWLR (PT1012) 470 among other cases.
The Respondent opined that the use of the words subject to contract and provisional offer on Exhibit C7 were instructive, as they show that there has not been a complete contract. The cases of ACMEL NIG LTD vs. FBN PLC (2014) LPELR 22444 (CA), BEST NIG LTD vs. BLACKWOOD HODGE NIG LTD (2011) LPELR 776 (SC) and TSOKWA OIL MARKETING CO. vs. B.O.N. LTD (2002) 11 NWLR (PT 777) 163 were relied upon. It was conclusively submitted that he who asserts must prove and that the Appellant having failed to produce a final letter of offer did not prove his claim of ownership. The case of GENEVA vs. AFRIBANK NIG PLC (2013) LPELR ? 20662 (SC) was cited in support.
RESOLUTION OF ISSUE NUMBER TWO
Let me rehash the salient facts of this matter. The Appellant, desirous of acquiring a house in Lagos completed and submitted an application form in that regard. He paid the sum of N2million being the purchase price and infrastructure cost for the house after which he was issued a provisional letter of offer of allocation, offering him a 2-bedroom maisonette at Abraham Adesanya Housing Estate, Ajah, Lagos, subject to contract. The said letter, Exhibit C7, set out the conditions of the allocation. The Appellant was eventually not given possession of any house and when he sued, the lower Court held that there was no valid and enforceable contract between the parties; but that the Appellant was entitled to the refund of the N2million he had paid in respect of a consideration that had failed.
The kernel of the contention under this issue is whether Exhibit C7, the provisional letter of offer of allocation constitutes a valid and enforceable contract. It is trite law that in the construction of a document, the cardinal principle is that the parties are presumed to intend what they have in fact said or written down. Therefore the words written by them would be so construed and should be given their ordinary and plain meaning unless where circumstances such as trade usage or the like dictate that a particular construction ought to be applied in order to give effect to the particular intention envisaged by the parties. Paucis verbis, the guide in the interpretation of the provisions of a written contract is that nothing should be read into a contract other than what its clear and plain words indicate. The contract is to be given the plain and ordinary meaning of the words employed. See UNION BANK vs. NWAOKOLO (1995) 6 NWLR (PT 400) 127, CITY ENGINEERING (NIG) LTD vs. FHA (1997) LPELR (868) 1 at 42 and LEWIS vs. UBA (2016) LPELR (40661) 1 at 25. It is against the background of this settled state of the law that the interpretation of Exhibit C7 has to be approached. Where the language employed is plain and admits of only one meaning, the task of interpretation is negligible:NWANGWU vs. NZEKWU (1957) 3 FSC 36, ORIENT BANK vs. BILANTE INTERNATIONAL LTD (1997) 8 NWLR (PT 515) 37 at 78 and LEWIS vs. UBA (supra).
Exhibit C7 provides as follows on the payments to be made in order for the Appellant to accept the offer before issuance of allocation letter and handing over of keys:
(2) The details of amount payable is as follows:
(3) Purchase Price N1,500, 000.00 (Paid /To be paid)
(4) Add: Infrastructural cost N500, 000.00 (Payable at once)
(5) Sub-total N2, 000,000.00
(6) Less: Amount Paid N2, 000,000.00
(7) Amount outstanding NIL
(8) Add: (i) Lessor?s Rent P.A N5, 000:00 (Subject to periodic review)
(ii) Insurance @ 0.5% to cover reinstatement value of each unit including loss of rent/alternative accommodation N5,000:00 (Subject to periodic review)
(iii) Documentation N5, 000.00 (Payable once only)
(iii) Maintenance of water-plant & water treatment @ N500:00 per month N6, 000:00 (Subject to periodic review)
(9) Payment due before Allocation letter and handing over of keys N21, 000:00
Transfer Fee
(1) Legal fee…………….. N (To be determined and paid later)
(2) Survey fee…………… N (To be determined and paid later)
Note:
1. You are required to accept this offer by issuing your Bank drafts as follows:
N16, 000.00 – LAGOS STATE MINISTRY OF HOUSING
N5000:00 – LASACO ASSURANCE PLC?
The above stipulations are clear that the Appellant is to accept the offer by paying the sum of N21, 000.00 before allocation letter is issued and the keys handed over. It has to be remembered that at the time Exhibit C7 was issued, the Appellant had already paid the sum of N2million, which entitled him to the provisional offer of allocation which he was, by Exhibit C7, to accept by paying the sum of N21, 000.00. In ADETOUN OLADEJI vs. NIGERIAN BREWERIES PLC (2007) LPELR (160) 1 at 14, Tobi JSC stated:
“The meaning to be placed on a contract is that which the plain, clear and obvious result of the terms used in the agreement. See Aouad v. Kessrawani (1956) NSCC 33, (1956) 1 F.S.C. 35, SCNLR 83. When constructing document in dispute between the parties, the proper course is to discover the intention or contemplation of the parties and not to import into the contract, ideas not potent on the face of the document. See Amadi v. Thomas Aplin Co. Ltd (1972) 4 SC 228, (1972) 7 NSCC 262. Where, there is a contract regulating any arrangement between the parties, the main duty of the Court is to interpret that contract to give effect to the wishes of the parties as expressed in the contract document. See Oduye v. Nigeria Airways Limited (1987) 2 NWLR (Pt.55) 126. In the construction of documents, the question is not what the parties to the document may have intended to do by entering into that document, but what is the meaning of the words used in the document. See Amizu v. Dr. Nzeribe (1989) 4 NWLR (Pt. 118) 755. However, where the meaning of words used are not clear, the Court will fall back on the intention behind the words. Above all, it is not the function of a Court of Law to make agreements for parties or to change their agreement as made. See African Reinsurance Corporation v. Fantaye (1986) 1 NWLR (Pt.14) 133.”
See also HOME PAGE INDUSTRIES LIMITED vs. TNT COURIER SERVICES LIMITED (2018) LPELR (45117) 1 at 12-15.
The Appellant’s contention that he acquired proprietary interest and that it was after he had been put into possession that he would pay the sum of N21, 000.00 is not borne out by the plain and ordinary meaning of the words employed in Exhibit C7, which is that the provisional offer made to the Appellant is to be accepted by payment of the sum of N21, 000.00 and that the said payment is due before allocation letter and handing over of the keys. To accede to the Appellant’s contention would amount to the Court making an agreement for the parties or changing the agreements they made: AFRICAN REINSURANCE CORPORATION vs. FANTAYE (supra) and ADETOUN OLADEJI vs. NIGERIAN BREWERIES PLC (supra). It is not confuted that the Appellant did not pay the said sum of N21, 000.00, so he did not accept the offer made to him in Exhibit C7 and not having accepted the offer, there was no concluded, valid and enforceable contract.
Now, in order for there to be a valid contract there must be the consensus ad idem, the meeting of the minds of the parties. Where there is an issue as to whether there was such a meeting of the minds, the problem is resolved by breaking down the agreement between the parties into offer and acceptance. The offer is the statement made by one party which if unequivocally accepted without qualification by the other party will result in a valid contract. SeeAKINYEMI vs. ODU?A INVESTMENT CO. LTD (2012) LPELR (8270) 1 at 48, ORIENT BANK vs. BILANTE INTERNATIONAL LTD (supra) at 77 and BILANTE INTERNATIONAL LTD vs. NDIC (supra).
I iterate that the Appellant did not accept the offer as stipulated in Exhibit C7. The lower Court therefore arrived at the correct decision when it held at page 329 of the Records:
‘Thus, Exhibit C7 is an offer. It was for the Claimant by the terms of the letter, to signify acceptance of that offer by making payment of the said sum of N21, 000.00k. What is more, that payment was a condition precedent to him being handed over the keys! These are the express words of the document.
It was clear that it was upon the basis of the acceptance of that offer – including crucially the condition to pay the sum of N21, 000.00k – that an allocation was to be made to the Claimant by means of what was termed an ‘allocation letter’…
Thus, Exhibit C7 is not a contract. And it has specifically made clear this fact by the use of the words ‘provisional’ and ‘subject to contract’.
There is a further aspect to this matter, Exhibit C7 is a provisional offer that was made subject to contract. This implies that it is a contract made subject to the fulfilment of certain terms.
In BEST (NIGERIA) LTD vs. BLACKWOOD HODGE (NIGERIA) LTD (2011) LPELR (776) 1 at 38, the apex Court held that:
‘Where a contract is made subject to the fulfilment of certain specific terms and conditions, the contract is not formed and not binding unless and until those terms and conditions are complied with or fulfilled.’
See also TSOKWA OIL MARKETING CO LTD (2002) 11 NWLR (PT 777) 163 and NIGER CLASSIC INVESTMENT LTD vs. UACN PROPERTY DEVELOPMENT CO. PLC (2016) LPELR (41426) 1 at 20.
The phrase ‘subject to contract’ is a long standing rule which means that the contract is incomplete and not binding until a formal contract has been settled, and that the matter remains in negotiation until a formal contract is executed.
In UBA PLC vs. TEJUMOLA & SONS LTD (1988) LPELR (3402) 1 at 38, the Supreme Court referred to the dictum in the old English case of TROLLOPE (GEORGE) & SONS vs. MARTYN BROTHERS (1934) 2 KB 436 at 455 as follows:
‘It has been well settled that the result of an offer ‘subject to contract’ means that the matter remains in negotiation until a formal contract is executed… (by) making an offer…’subject to contract’…they are not at any time bound…until the formal contracts are exchanged.’
The Latinism is locus poenitentiae (place of repentance), meaning, inter alia, ‘a point at which it is not too late for one to change one’s legal position; the possibility of withdrawing from a contemplated course of action’ before being committed to it. The opportunity to withdraw from a negotiation before finally concluding the contract’. See Black?’ Law Dictionary 8th Edition and the case of MIKANO INTERNATIONAL LTD vs. EHUMADU (2013) LPELR (20282) 1 at 66-68 (per Augie, JCA [now JSC]).
The necessary implication is that by making Exhibit C7 subject to contract, the Respondent would not be bound by it unless the terms and conditions therein are met and it further gives the Respondent the window of opportunity to withdraw from the provisional offer therein contained before it results in a definite binding contract.
The lower Court was consequently on firma terra when at page 329 of the Records it stated and held:
Indeed, that term ‘subject to contract’ is well defined in law. It cannot, by any stretch of the imagination, be equated with, or said to amount to, a valid, binding, and complete agreement in law.
It is ineluctable that this issue must be resolved against the Appellant. The lower Court was right when it held that there is no binding contract between the parties, the Appellant having failed to comply with the conditions for acceptance of the offer, id est, payment of the sum of N21,000.00.
ISSUE NUMBER THREE
Whether from the available evidence before the Court, the Appellant is entitled to the award of damages and interest in this case.
SUBMISSIONS OF THE APPELLANT’S COUNSEL
This issue corresponds with the Appellant’s issue numbers four and five. It is the Appellant’s submission that the lower Court was in error when it refused to award damages and interest on the ground that there was no fault on the part of the Respondent. It was stated the Respondent admitted that it demolished the property allocated to the Appellant due to structural defects, but that it did not rebuild the same or allocate another property to the Appellant. It was posited that the Appellant having been made to resort to litigation to recover the N2million he paid, was entitled to interest on his money which the Respondent had kept him out of. The cases of ADEYEMI vs. LAN BAKER NIG LTD (2000) 7 NWLR [no part stated] 33 at 51-52 and ACME vs. KADUNA STATE WATER BOARD (1999) 2 SC 1 were referred to.
It was contended that the lower Court was in error not to have awarded damages in favour of the Appellant on the ground that there was no contract. It was opined that notwithstanding the use of the words ‘subject to contract’ in Exhibit C7, the intention of the parties and the surrounding circumstances should be looked into to determine if the parties did not envisage a valid contract until later vide INTERNATIONAL ILE INDUSTRIES LTD vs. ADEREMI (1999) 6SC (PT I) 1 at 27. It was maintained that all the ingredients of a valid contract are in Exhibit C7 and that the phrase ?subject to contract? used therein was of no relevance and can be severed from the contract without impairing the contract itself. The case of UBA vs. TEJUMOLA & SONS LTD (1988) 2 NWLR (PT 79) 662 was relied upon. It was asserted that there was a valid contract which the Respondent breached by demolishing the property allocated to the Appellant, showing that it no longer intended to honour its obligation under the contract, thereby entitling the Appellant to award of damages and interest since the transaction between the parties was commercial in nature.
The case of SPRINGFIELD INTERNATIONAL LTD vs. RANK XEROX NIG LTD (2002) ALL FWLR (PT 182) [no page stated] was cited in support.
SUBMISSIONS OF THE RESPONDENT’S COUNSEL
The Respondent submits that since there was no valid and enforceable contract between the parties, the lower Court was right not to have awarded damages. It was stated that damages can only be awarded where there has been a breach of contract vide OCEANIC BANK INTERNATIONAL PLC vs. ABEOKUTA COMMERCIAL & IND COMPANY LTD (2014) LPELR – 22937 (CA), STAG ENGINEERING CO. LTD vs. SABALCO NIG LTD (2008) LPELR – 8485 (CA) and GONZEE (NIG) LTD vs. NERDC (2005) 13 NWLR (PT 943) 637. It was posited that when the property allocated to the Appellant was demolished for being structurally defective, the Appellant was given the option of paying more for an alternative property or have the N2milllion he had paid refunded to him, but that the Appellant did nothing and that having slept on the issue, equity would not aid the indolent. The case of A-G RIVERS STATE vs. UDE (2007) ALL FWLR (PT 347) 600 at 614 was called in aid.
On the claim for interest, the Respondent submits that nothing in Exhibit C7 provides for interest and that the Appellant who claimed pre-judgment interest had the burden of proving his entitlement to it. The case of TEXACO OVERSEAS (NIG) PETROLEUM COMPANY UNLTD vs. PEDMAR NIG LTD (2002) LPELR 3145 (SC) was referred to. It was opined that the Appellant did not establish entitlement to interest at the rate claimed and that the Appellant did not lead evidence on how he arrived at the 20% claimed as the rate of interest. The cases of KWAJAFFA vs. BANK OF THE NORTH (2004) 5 SC (PT I) 103 at 134 and OLORUNSHOLA vs. LAGOS BUILDING INVESTMENT COMPANY LTD (2010) LPELR ? 4735 (CA) were relied upon. It was maintained that the lower Court balanced the interest of justice by awarding the Appellant post-judgment interest as provided for in the Rules of Court.
RESOLUTION OF ISSUE NUMBER THREE
In the consideration of issue number two above, I affirmed the decision of the lower Court that there was no valid and enforceable contract between the parties. In the absence of a valid contract, there cannot be a breach for which a party can be mulcted in damages. The principle is damnum sine injuria, where there is no breach or wrong there can be no damages. The award of damages are a function of liability. The Appellant claimed damages for breach by the Respondent of its contractual obligation to him. There was no valid contract that was breached, so the Respondent not being liable for any breach of contract cannot have damages awarded against it: TSOKWA OIL MARKETING CO. vs. B. O. N. (supra) at 218, ANIKE vs. SPDC (NIG) (2010) LPELR (11878) 1 at 18-19, OCEANIC BANK INTERNATIONAL PLC vs. ABEOKUTA COMMERCIAL & IND COMPANY LTD (supra) at 22 and STAG ENGINEERING COMPANY LTD vs. SABALCO NIG LTD (supra).
Let me state that contrary to the Appellant?s contention, the phrase ?subject to contract? employed in Exhibit C7 is definitely of relevance. It is not floccinaucinihilipilification! In INTERNATIONAL ILE INDUSTRIES LTD vs. ADEREMI (supra) relied upon by the Appellant, Iguh, JSC stated:
‘If the preparation of a further document is a condition precedent to the creation of a contract then, of course, the parties, if no such further document has been prepared, would not have reached a consensus ad idem on the various terms of the agreement and no contract in such circumstances would be deemed to have been concluded as at that stage.’
Exhibit C7 provides for further payment of N21, 000.00 to be paid as acceptance of the offer before the allocation letter (further document) is issued and the keys handed over. The allocation letter (further document) was not issued because the Appellant did not pay the said sum of N21, 000.00. So there was no consensus ad idem and a fortiori, no valid contract was consummated. The lower Court was therefore correct in its decision that the Appellant was not entitled to damages.
The Appellant claimed pre-judgment interest at the rate of 20% from February 2002 until judgment and post-judgment interest at the rate of 6% per annum until full payment. The lower Court having held that the Appellant was entitled to the refund of the N2miilion he paid awarded him post-judgment interest at the rate of 10% per annum stipulated by the Rules of Court until the amount is fully repaid.
Now, there are two types of interest usually awarded by a Court, namely pre-judgment interest otherwise known as interest as of right? and post-judgment interest otherwise known as ‘discretionary interest’, which a Court is allowed by the Rules of Court to award to a successful party at the end of the trial, at a rate fixed by the Rules. The disceptation herein is on pre-judgment interest.
Pre-judgment interest must not only be specifically claimed, but evidence must be adduced in proof of it, failing which it will not be awarded by a Court. The award of pre-judgment interest can be made where it is contemplated in the agreement between the parties, under a mercantile custom and under the principle of equity such as breach of fiduciary relationship. See EKWUNIFE vs. WAYNE (WA) LTD (1989) 5 NWLR (PT 122) 422 at 445, IDAKULA vs. RICHARDS (2001) 1 NWLR (PT 693) 111 at 122, 124-125, BERENDE vs. USMAN (2005) 14 NWLR (PT 944) 1 and BERLIET NIGERIA LTD vs. KACHALLA (1995) 9 NWLR (PT 420) 478. There is nothing in Exhibit C7 which provides for, or contemplates the payment of interest; furthermore there is nothing in the evidence on any mercantile custom or breach of any equitable principle on which the Appellant would be entitled to award of pre-judgment interest.
Put simply, the Appellant did act adduce any credible evidence entitling him to pre-judgment interest: REO ENTERPRISES vs. NWOSU (2007) 11 WRN 16 at 33 and R.C.C. (NIG) LTD vs. ROCKONOH PROPERTY CO. LTD (2005) 10 NWLR (PT 934) 615 10 640-641. The Appellant?s ipse dixit that the interest payable on such amount, if put in a fixed deposit, hovers between 15% -25% does not establish the rate of interest which is fixed by the Central Bank of Nigeria (CBN) Monetary Policy Rate (MPR). There is no whit, iota or scintilla of evidence in proof of the CBN MPR as it relates to interest rate of 20% claimed by the Appellant. The lower Court was right in not awarding the pre-judgment interest claimed as the same was not proved. This issue number three is resolved in favour of the Respondent.
‘In a coda, the conflating of the totality of the foregoing leads to the indubitable conclusion that the appeal is devoid of merit. The appeal fails and it is hereby dismissed. The decision of the lower Court, Coram Judice: L. A. Okunnu, J., is hereby affirmed. The Respondent is entitled to the costs of this appeal which I assess and fix at N50, 000.00.
JOSEPH SHAGBAOR IKYEGH, J.C.A.: I agree with the lucid judgment prepared by my learned brother, Ugochukwu Anthony Ogakwu, J.C.A., which I had the honour of reading in advance.
TOBI EBIOWEI, J.C.A.: I was afforded the opportunity of reading in draft the judgment just delivered by my learned brother UGOCHUKWU ANTHONY OGAKWU, J.C.A.
I agree with the reasoning and conclusion reached therein in the said judgment.
Appearances:
Akin Adepoju, Esq.For Appellant(s)
Respondent absent and not represented by counselFor Respondent(s)
