DOLIZ BROWN GROUP LTD & ORS v. STERLING BANK
(2020)LCN/14868(CA)
In The Court Of Appeal
(ABUJA JUDICIAL DIVISION)
On Wednesday, December 30, 2020
CA/A/49/2020
RATIO
CONTRACT: DUTY OF THE COURT IN THE INTERPRETATION OF CONTRACTUAL TRANSACTION
In the interpretation of contractual transaction, Court will always hold parties bound by the terms of their agreements when construed according to the strict, plain and common meaning of the words in the instrument as they stand. See the case of SOLICITOR-GENERAL WESTERN NIGERIA VS. ADEBONOJO (1971) 1 ALL NLR PG. 178; U. B. N. VS. OZIGI (1994) 3 NWLR (PT. 333) PG. 385. PER BABA IDRIS, J.C.A.
EQUITY: EFFECT OF EQUITY ACTING IN PERSONAM
Equity acting in personam will not allow a party to come to the temple of justice with dirty hands and unclean conscience. It also does not allow a party to benefit from his iniquity. See the case of MR. GIDEON OGUNPEHIN VS. NUCLEUS VENTURE (2019) LPELR – 48772 (SC) (P. 24, paras. D – E) per Ejembi Eko, JSC. PER BABA IDRIS, J.C.A.
LAND LAW: EFFECT OF ALIENATION OF INTEREST IN LAND WITHOUT THE CONSENT OF THE GOVERNOR
What Sections 22 and 26 of the Land Use Act provides for is that the prior consent of the Governor is a condition precedent for alienation of interest in Land and Section 26 of the Act, renders any alienation without the requisite consent, null and void. However, the sections do not prohibit and affect agreements between parties for the alienation of interest in land and before the alienation which would require the prior consent of the Governor.
In other words, the provisions of Sections 22 and 26 of the Land Use Act do not out law entering into contract agreements for the alienation of interest in land without the consent of the Governor. See the cases of AGBABIAKA VS. OKOJIE (2004) 15 NWLR (897) 503; OMOZEGHIAN VS. ADJARHJO (2006) 4 NWLR (969) 33; MAINAGGE VS. GWAMMA (1997) 11 NWLR (528) 191.
In the case of IBEKWE VS. MADUKA (1995) 4 NWLR (PT. 392) 716, it was held that:
“The combined effect of Section 22(1) and (2) of the Land Use Act does not make an agreement, to alienate without first obtaining the Governors consent void. It makes an agreement to alienate conditional upon obtaining the Governor’s consent. Before the consent is obtained, the agreement is inchoate.” PER BABA IDRIS, J.C.A.
Before Our Lordships:
Peter Olabisi Ige Justice of the Court of Appeal
Elfrieda Oluwayemisi Williams-Dawodu Justice of the Court of Appeal
Mohammed Baba Idris Justice of the Court of Appeal
Between
1. DOLIZ BROWN GROUP LTD 2. ENGR. EDDY NDICHE 3. CHIEF OMENIFE A. C. IZUEGBU APPELANT(S)
And
STERLING BANK PLC RESPONDENT(S)
MOHAMMED BABA IDRIS, J.C.A. (Delivering the Leading Judgment): By a Writ of Summons dated 10th June, 2013 and filed on the 23rd May, 2013, the Appellants as Plaintiffs at the trial Court instituted an action against the Respondent, who was the defendant at the trial Court. In the said Amended Writ of Summons filed on the 17th November, 2014 and the Appellants sought for the following reliefs against the Respondent thus:
1. A DECLARATION that the Defendant breached both its express and implied obligations/Covenant which is embedded in the Contract finance agreement and the Tripartite deed of legal Mortgage dated 21st Day of April, 2011.
2. A DECLARATION that by the breach of the contract finance agreement by the Defendant, it is not entitled to the total principal facility and the interest thereof claimed by the Defendant.
3. The sum of N500,000,000.00 being special damages resulting from losses caused to the 1st Plaintiff by the acts of the Defendant in breach of the existing Contract between the parties in respect of both the rehabilitation of the Oba/Nnewi-Okigwe Road Section 1 Route 429 Contract No. 5983 and the
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Contract for the construction of Wannune Earth Dam Project Benue State.
4. The sum of N1,000,000,000.00 (One Billion Naira) only as general damages for breach of contract, loss of reputation and goodwill.
5. AN ORDER directing the Defendant to return the title deeds of the House used as a collateral or security for the facility, i.e., Plot No. 594B, along Victoria Ironsi Street, Federal Housing Estate, Gwarinpa 2, Abuja, to the Plaintiffs free from any encumbrance.
6. The sum of Six Million Naira (N6,000,000.00) only as the cost of this action.
On the other hand, the Respondent counter claimed against the Appellants as follows:
a. The Sum of One Hundred and Sixty Two Million Naira (N162,000,000.00) being the Principal loan granted to the Plaintiffs, duly accepted and admitted by the said Plaintiffs and which has become due, severally demanded by the Defendant from the Plaintiff but yet unpaid.
b. The sum of Eighty Million, Fifty Five Thousand, Eight Hundred and Eighty Eight Naira Sixty Two Kobo, (N80,055,888.62) being the interest at 23 percent per annum, handling charges and penalties as beginning from the 30th day of August, 2013
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till Judgment and after judgment at 10% till liquidation of the Judgment sum.
c. A DECLARATION that by virtue of the Tripartite Deed of Legal Mortgage perfected and registered at the Federal Housing Authority and the default in payment of the loan and the accrued interest, the counterclaimant is entitled to sell the property known as Plot No. 594B, 411 Crescent, ‘A’ Close old reference no. FHA/ES/GWA11/P.594B, new ref. No. FHA/ES/GWA/11/P.594B of 19/10/.0 situate and lying within Gwarimpa 11 Estate, FCT, ABUJA. In order to recover moneys due to it.
d. A DECLARATION that by virtue of the PERSONAL GUARANTEE provided by Chief Omenife A. C. Izuegbu, the Defendant can legally proceed and recover the outstanding indebtedness due from the 1st Plaintiff in her favour against the Guarantor.
e. A MANDATORY ORDER of the Honourable Court directing Chief Omenife A. C. Izuegbu to settle all the outstanding indebtedness due from the 1st Defendant which he personally guaranteed to the Counterclaimant herein.
f. A PERPETUAL INJUNCTION restraining the Defendants to this counter claim, their agents and privies from interfering with the
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Counterclaimant’s right of sale of the said mortgaged property to recover moneys due to it.
Before going into the appeal, below is a summary of the facts involved in this appeal:
It is the Appellants’ claim at the trial Court that in June 2011, the 1st Appellant was offered a contract facility for the sum of N162,000,000.00 by the Respondent after it applied for same.
The Appellants also claims that the said facility was for the financing of Oba-Nnewi-Okigwe Road Section II (Anambra/Imo Border-Ibinta-Okigwe Road) in Imo State awarded to the 1st Appellant by the Federal Government of Nigeria through the Federal Ministry of works and that the 1st Appellant fulfilled the terms of the offer and therefore accepted same.
The Appellants also claims that the 2nd Appellant expecting the Respondent to fulfill its obligation in the agreement decided to be part of the project and offered his building at Plot No. 594B, 411 Crescent, A Close, with Old Reference No. FHA/ES/GWA II/P 594B, New Reference No. FHA/ES/GWA II/P 594B located at Gwarinpa Estate, Abuja, through a Deed of Assignment made in his favour by Mr. Chinedu Emeka of No. 3 Durban
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Street, Wuse II, Abuja as collateral upon the agreement entered and signed by the Appellants and Respondent that the Respondent would disburse funds and adequately finance the contract.
The Appellants also claims that the Respondent made the first disbursement on time and the 1st Appellant commenced work immediately on the project with the aim of completing same on schedule. The Appellants also claims that when the second disbursement became due, the Respondent wasn’t forth coming and that the Appellants were conscious of the weather condition during which it could work on the project.
The claim of the Appellants is that the failure of the project was due to the refusal of the Respondent to release funds for the Project on time and so they filed the suit leading to this appeal against the Respondent for breach of contract.
The Appellants at the trial Court opened its case on the 6th June, 2016 calling two witnesses who testified and tendered 14 documents which were admitted and marked as Exhibits DB1 – DB14. The Exhibits are listed hereunder as follows:
EXHIBIT DB1 – Federal Ministry of Water resources letter of award to
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the 1st Appellant dated 8/2/2011.
EXHIBIT DB2 – 1st Appellant’s letter to the Respondent bank dated 21/2/2011.
EXHIBIT DB3 – Tripartite Deed of Legal Mortgage (secondary copy) dated 21/4/2011
EXHIBIT DB4 – Respondent’s letter dated 8/6/2011 to the 1st Appellant titled “offer of N162,000,000.00 (One Hundred and Sixty-Two Million) contract for facility.
EXHIBIT DB5 – Photocopy of Federal Ministry of works letter to the 1st Appellant dated 18/6/2011.
EXHIBIT DB6 – 1st Appellant letter to the Respondent dated 20/7/2016.
EXHIBIT DB7 – Photocopy of the 1st Appellant letter to the Respondent dated 11/10/2012.
EXHIBIT DB8 – 1st Appellant’s letter dated 31/10/2012 to the Respondent.
EXHIBIT DB9 – Photocopy of Respondent’s letter dated 12/2/2013.
EXHIBIT DB10 – Respondent’s letter dated 6/5/2013 to the 1st Appellant.
EXHIBIT DB11 – Respondent’s letter dated 14/5/2013 to the 1st Appellant.
EXHIBIT DB12 – 1st Appellant’s letter dated 4/4/2013 to the Respondent.
EXHIBIT DB13 – 1st
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Appellant’s letter dated 16/5/2013.
EXHIBIT DB14 – Letter by the 1st Appellant to the Respondent dated 30/10/2012.
The Appellants closed their case on the 6th June, 2016 and the matter was adjourned to 25th July, 2016 for the defence to open its case.
The Respondent opened its defence on the 17th November, 2016 and called one witness who testified as DW1 and tendered one document which was admitted and marked as Exhibit SB1 – SB12 (A) as listed hereunder thus:
EXHIBIT SB1 – Offer of N162,000,000.00 (One Hundred and Sixty-Two Million) Naira Contract Finance Facility dated 8/06/2011.
EXHIBIT SB2 – 1st Appellant’s letter to the Respondent on disbursement of N180,000,000 dated 20/07/2011
EXHIBIT SB3 – letter dated 2/8/2011 on disbursement of additional fund.
EXHIBIT SB4 – Letter requesting for extension of time on contract finance facility dated 12/12/2011.
EXHIBIT SB5 – Letter of 12/2/2013 to 1st Appellant.
EXHIBIT SB6 – FIRS revenue collection receipt No. 0602248140
EXHIBIT SB7 – Federal Housing Receipt No. 600029129 of 14/02/2013
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EXHIBIT SB8 – Sovereign Trust Insurance Renewal of Premium dated 16/05/2013.
EXHIBIT SB9 – Photocopies of Sterling Bank Plc Cheque.
EXHIBIT S10 – Certificate of compliance sterling bank statement of account.
EXHIBIT S11 – Deed of tripartite legal mortgage
EXHIBIT S12 – Letter of guarantee
EXHIBIT S12 (A) – Indemnity
The Respondent then closed its case on the 1st June, 2017 and the matter was adjourned to 24th April, 2018 for cross-examination of the Respondent to the counter claim.
On the 3rd of October, 2018 the Defendant to the counter claim was cross-examined and the matter was adjourned to 28th November, 2018 for adoption of final written addresses. The parties then filed and re-adopted their respective written addresses on the 1st November, 2019.
After considering the evidence led by parties, the learned trial judge, Honourable Justice H. B. Yusuf delivered judgment in the Suit No. FCT/HC/CV/3273/2013 on the 1st July, 2019 wherein the trial judge granted judgment in favour of the Respondent.
Dissatisfied with the judgment of the trial Court, the Appellant filed a Notice of Appeal dated
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25th November, 2019 comprising of twelve grounds of appeal. Parties to the appeal before this Court filed and exchanged their respective briefs of argument.
In the Appellants’ brief of argument as settled by his counsel S. I. Ameh, SAN and dated the 12th Day of June, 2020 and filed 15th June, 2020, the following issues for determination were distilled from the grounds of appeal as follows:
1. Whether from the Peculiar facts of this case, the Respondent breached the terms of the Contract Finance Facility Agreement contained in Exhibit DB4 between the 1st Appellant and the Respondent. (Grounds 1, 2, 4, 5, 6, 7 and 12 of Notice of Appeal)
2. Whether by the clear intentions of the parties on repayment of the facility as contained in the Contract Finance Agreement and the state of evidence at the trial Court, the Respondent’s Counter claim for the repayment of the facility was not in violation of the terms of the agreement between them. (Grounds 3 and 11 of the Notice of Appeal)
3. Whether having found that the tripartite deed of legal Mortgage created by the parties was in violation of Section 22 of the Land Use Act and therefore
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invalid, the Learned Trial Judge was right to have countenanced any right found or sought to be enforced on the valid deed or tripartite legal mortgage vide the Respondent’s Counter Claim at the Trial Court. (Ground 8 and 9).
4. Whether the Learned Trial Judge was right when he relied on an unregistered Tripartite Deed of legal Mortgage, he had found to be invalid to grant the Respondent, the right of sale of the said mortgaged property. (Encompassing Ground 10 of the Notice of Appeal).
The Appellants’ Counsel argued Issue One and Two together. In arguing both issues, the Appellants’ Counsel argued that the Respondent was in breach of the terms of the contract and failed to promptly disburse the full loan sum to enable the 1st Appellant to execute the contract it had with the Federal Ministry of Works.
The Appellants’ Counsel argued that time was of essence in the contract which was relayed by the 1st Appellant to the Respondent dated 20th July, 2011 and the breach brought the contract to an end.
The Appellants’ Counsel further argued that there was no evidence at the trial Court to show how the Respondent
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disbursed the loan, the total amount disbursed, how it calculated interest on the loan given and the actual date of disbursement and that all that the Respondent did was to dump a purported statement of account said to belong to the 1st Appellant. On this point, counsel cited the case of AGWU VS. EZE (2012) 1 LRCN AT PAGE 508 – 509, PARAS G – E.
The Appellants’ Counsel also argued that the burden of proving full disbursement of the loan sum and how it arrived at the claimed interest rests squally on the Respondent who alleged it. On this point, counsel referred this Court to Section 131 of the Evidence Act, 2011. Counsel further argued that it would amount to cloistered justice for the Court to descend into the arena of conflict and to begin assisting a party to link contents of its document or transactions to the statement of account dumped on it, as regrettably done by the trial Court in this case.
The Appellants’ Counsel argued that parties are bound by the terms of the contract they executed and the Court is duty bound to give effect to the terms of the contract as executed by the parties. On this part, counsel cited the
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case of A. G., RIVERS STATE VS. A.G, AKWAIBOM STATE (2011) 8 NWLR (PT. 1248) 31 AT PAGES 83 – 84 PARAGRAPHS G – A.
The Appellants’ Counsel argued that it was established by evidence before the trial Court that the 1st Appellant was awarded the contract, subject matter of the suit leading to this appeal which the Respondent agreed to finance the project. The Appellants’ Counsel further argued that the intentions of the parties were reduced into writing (Exhibit SB1) and that the Respondent inserted into the contract a repayment clause stating that proceeds from the contract would be the source of repayment of the loan and a further clause that the entire proceeds of the contract it obtained from the Federal Government with it.
The Appellants’ Counsel also argued that the evidence before the trial Court was overwhelming on the fact that the Respondent opened Account No: 309246649150 in the 1st Appellant’s name, specifically to receive any payment made by the Federal Ministry of Works in favour of the 1st Appellant from the road project. Counsel further argued that the Respondent cannot now deny the express term of
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the contract in Exhibit SB1 which it executed. On this point, counsel cited the case of A. G., NASSARAWA STATE VS. A. G. PLATEAU (2012) 10 NWLR (PT. 1309) 419 AT 449 PARAS E – F.
The Appellants’ Counsel also argued that the overwhelming evidence before the trial Court is that there was no form of inflow from the Federal Ministry of Works into the 1st Appellant’s account No: 309246649150 domiciled with the Respondent.
In conclusion on this point, the Appellants’ Counsel submitted that the trial Court was under an obligation to give effect to the intention of the parties as clearly stated in the contract between them and not to cherry pick a clause out of the entire agreement to rule in the Respondent’s favour. He further urged this Court to resolve this Issue in his favour.
The Appellants’ Counsel also argued Issue Two and Three. Counsel cited Section 22(1) and 26 of the Land Use Act and argued that the effect of the provisions is that where a legal mortgage is created over an interest in land, the consent of the Governor or the FCT Minister is a mandatory requirement, and the failure to so obtain the said consent makes the transaction null and void.
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The Appellants’ Counsel argued that there are fundamental infractions that affected the validity, legitimacy and enforceability of the said deed of tripartite legal mortgage, which was rightly held by the trial Court in page 972 Volume II of the Record of Appeal, and he urge this Court to hold. Counsel further argued that the DW1 under cross-examination admitted that there was nothing on the face of the Exhibit SB10 that shows consent of the Honourable Minister of the FCT was obtained prior to the purported interest sought to be enforced by it through its counter claim.
The Appellant also argued that the said Exhibit SB10 was not registered. On this point, counsel cited the case of AKINDURO VS. ALAYA (2007) 14 NWLR (PT. 1057) PG 312. The Appellants’ Counsel further argued that where admitted in evidence, the trial Court ought to have expunged it from its records. Counsel therefore urged this Court to expunge Exhibit SB10, Paragraphs 9, 12, 13, 38, 39 and 46 of the Amended Statement of Defence and paragraphs 1(c) and (f) of the Counter Claim found at pages 625, 626, 633, 634, and 639 in Volume
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II of the printed Record of Appeal and paragraph 11, 13, 15, 41, 46 and 47 of the Respondent’s witness Statement on Oath found at pages 643, 644, 648 and 649 in Volume II of the printed Record of Appeal.
The Appellants’ Counsel also argued that the findings of the trial judge contained at page 971 – 972 of the printed Record of Appeal was not appealed against. Therefore, the said finding is extant, effective and binding on all the parties including the Respondent.
The Appellants’ Counsel also argued that a party, the Respondent in this case, seeking declaratory reliefs must succeed on the strength of its case/counter claim and not on the weakness of the Defendants to the counter claim. Counsel further argued that the evidence led by the Respondent as counter claimant is at variance with its pleadings and the pleadings and evidence ought to be thrown out. On this point, counsel cited the case of ZACCALA VS. EDOSA (2018) 6 NWLR (PT. 1616) 528 AT 546 – 547 PARAS H – B.
The Appellants’ Counsel also argued that Exhibit SB10, which purports to confer a right on the Respondent to sell the mortgaged property
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without the consent of the FCT Minister first had and obtained is not only invalid, but null and void. On this point, counsel cited Section 26 of the Land Use Act and submitted that the finding of the trial judge at page 972 of the Record of Appeal is wrong.
In conclusion, the Appellants’ Counsel urged this Court to allow the appeal and set aside the judgment of the trial Court and also dismiss the counter claim of the Respondent.
On the other hand, the Respondent filed its Respondent Brief of Argument dated 24th June, 2020 and filed on the 30th June, 2020 as settled by its Counsel, Akinlolu Thimoty Kehinde, SAN and adopted the issues for determination raised by the Appellant as follows:
1. Whether from the peculiar facts of this case, the Respondent breached the terms of the Contract Finance Facility Agreement contained in Exhibit DB4 between the 1st Appellant and the Respondent (Grounds 1, 2, 4, 5, 6, 7 and 12 of Notice of Appeal).
2. Whether by the clear intentions of the parties on repayment of the facility as contained in the Contract Finance Agreement and the state of evidence at the trial Court, the Respondent’s Counter
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claim for the repayment of the facility was not in violation of the terms of the agreement between them. (Grounds 3 and 11 of the Notice of Appeal).
3. Whether having found that the tripartite deed of legal Mortgage created by the parties was in violation of Section 22 of the Land Use Act and therefore invalid, the Learned Trial Judge was right to have countenanced any right found or sought to be enforced on the valid deed or tripartite legal mortgage vide the Respondent’s Counter Claim at the Trial Court. (Ground 8 and 9).
4. Whether the Learned Trial Judge was right when he relied on an unregistered Tripartite Deed of legal Mortgage, he had found to be invalid to grant the Respondent, the right of sale of the said mortgaged property. (Encompassing Ground 10 of the Notice of Appeal).
In arguing Issue One and Two, the Respondent’s Counsel argued that when a Court seeks to discover the intentions of parties to a written agreement, the Court will construe the said written agreement in order to discover the true intentions of parties to it. Counsel further argued that the offer of N162 Million Contract Finance Facility dated the
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8/2/2011 and Tripartite Deed of Legal Mortgage (Exhibits DB4 and DB3) constitutes the binding agreement which parties freely entered into and thus they are the basis for ascertaining the intentions of the party.
The Respondent’s Counsel also argued that from the Contract Finance facility, the tripartite deed of legal mortgage, the pleadings of parties and the evidence of PW1 under cross-examination, parties were ad idem on the terms of the loan agreement. Counsel further argued that there is a very sound understanding of the agreement by the Appellants and that the Appellants understood that the loan sum advanced to it was One Hundred and Sixty-Two Million Naira (N162,000,000.00) only, for a period of 180 days, at the interest rate of 23% per annum and that it was secured with the 2nd Appellant’s property who guaranteed the loan among other things.
The Respondent’s Counsel also argued (argument as contained in the Respondent Brief of Argument) that the Respondent did not in any way, breach the agreement rather it religiously performed its own obligations therein.
The Respondent’s Counsel also argued that the
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Appellants’ argument that the Respondent dumped Exhibit SB 12 before the Court and did not speak to the said Exhibit is misleading as the DW1 during his evidence in cross-examination at pages 920 – 921, stated how the loan sum was paid into the Appellant’s account and that the Appellant made this same argument at the trial Court and the trial Court dismissed the argument.
The Respondent’s Counsel also argued that the Respondent Counter Claim did not violate the agreement between the parties rather it accords with same. Counsel further submitted that once a lender has proved as the Respondent has done, that it fully disbursed the loan sum, the onus is on the borrower like the Appellants herein to prove non-receipt of the loan or that they have paid back the loan fully. On this point, counsel cited the case of OWOLI VS. MORECAB FINANCE NIG. LTD (2001) FWLR (PT. 60) 1597 AT 1607 PARAS B – E.
The Respondent’s Counsel argued that the domiciliation of proceeds of the contract in the Appellants’ account with the Respondent does not set the Appellants free from their obligations to repay the loan within the duration
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stated by the contract. On this point, he referred the Court to the case of JULIUS BERGER (NIG) VS. T. R. C. B. LTD (2019) 5 NWLR (PT. 1665) P. 219 AT 240.
The Respondent’s Counsel also argued that the Appellants breached its agreement with the Federal Ministry of Works when it failed totally to complete the asphalting of the Oba-Nnewi-Ibinta Imo Border Road Project awarded to it by the Respondent to carry out the project and that it would have been different if the Appellants delivered its job to the Federal Ministry of Works, got the entire performance certificate and submitted to the Respondent. The Respondent’s Counsel further argued that the Contract Finance Facility did not make proceeds of the contract the sole source of repayment.
In conclusion, the Respondent’s Counsel urged this Court to resolve Issue One and Two in favour of the Respondent.
The Respondent’s Counsel in arguing Issue Three and Four, argued that the 2nd Appellant was the one who instead of getting the consent of the Minister of the Federal Capital Territory, got that of the Federal Housing Authority and registered same at the Federal Housing
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Authority, got consent to transfer from the wrong authority and that he will not be allowed to take and enjoy the loan, and then turn around to allege that because he did the wrong thing, he should be discharged from his obligation.
The Respondent’s Counsel also argued that this Court cannot allow the Appellants eat their cakes and have it as the loan in issue was given to them in 2011, they utilized the loan and when it became due for repayment and demands made on them after every other allowance had been made to get the loan repaid, the Appellants rushed to the trial Court and denied liability of repayment of the loan.
In conclusion, the Respondent’s Counsel urged this Court to resolve Issue 3 and 4 in favour of the Respondent, dismiss the appeal and uphold the judgment of the trial Court.
The Appellant also filed a Reply Brief of Argument in response to the Respondent’s Brief. The said brief is dated 9th October, 2020 and filed on the same date. The Reply Brief was settled by the Appellant’s Counsel, S. I. Ameh, SAN.
In Response to Issue One and Two of the Respondent Brief of Argument, the Appellants’
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Counsel argued that disbursing the loan sum to the 1st Appellant in piece meal as against a lump sum disbursement, as done by the Respondent in this case was a breach of the contract between the parties which frustrated the smooth and expeditious execution of the contract the 1st Appellant had with the Federal Ministry of Works.
The Appellants’ Counsel also argued that the 2nd and 3rd Appellants only agreed to guarantee the loan and offered their property as collateral on the basis that the Respondent would promptly perform its part of the contract as agreed but the Respondent breached the contract. On this point, counsel cited the case of BEST NIGERIA LTD VS. BLACKWOOD HODGE (NIG) LTD & ORS (2011) 5 NWLR (PT. 1239) 95 AT 117, PARAS A – B.
The Appellants’ Counsel also argued that besides failure to prove its entitlement to interest as required by law, it is also not entitled to same. Counsel further argued that the law is clearly settled that where a claim, defence or counter-claim is based on debit balance in a statement of account, in order to succeed, such a party must prove the evidence how the debit balance was arrived at
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and in this case, there was no such explanation.
In Response to issue three and four as argued by the Respondent’s Counsel, the Appellants’ Counsel argued that the Respondent did not Cross Appeal against the adverse finding of the trial Court that Exhibit SB 10, was invalid and did not transfer a legal title on the Respondent and as such, the finding is binding on it.
The Appellants’ Counsel argued that it is trite that it is the duty and responsibility of the mortgagee, especially of the Respondent’s status to ensure that the consent allegedly obtained was properly obtained and, in this case, no consent was obtained. Counsel further argued that the case of UGOCHUKWU VS. COO. & COMM. BANK LTD does not apply in this case.
In conclusion, the Appellants’ Counsel urged this Court to allow the appeal and set aside the decision of the trial Court.
Having summarized the argument of Counsel, I wish to adopt the issues for determination formulated by the Appellants and I will address same thereon. The said issues for determination are:
1. Whether from the Peculiar facts of this case, the Respondent breached the
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terms of the Contract Finance Facility Agreement contained in Exhibit DB4 between the 1st Appellant and the Respondent.
2. Whether by the clear intentions of the parties on repayment of the facility as contained in the Contract Finance Agreement and the state of evidence at the trial Court, the Respondent’s Counter claim for the repayment of the facility was not in violation of the terms of the agreement between them.
3. Whether having found that the tripartite deed of legal Mortgage created by the parties was in violation of Section 22 of the Land Use Act and therefore invalid, the Learned Trial Judge was right to have countenanced any right found or sought to be enforced on the invalid deed or tripartite legal mortgage vide the Respondent’s Counter Claim at the Trial Court.
4. Whether the Learned Trial Judge was right when he relied on an unregistered Tripartite Deed of legal Mortgage, he had found to be invalid to grant the Respondent, the right of sale of the said mortgaged property.
ISSUE ONE
Whether from the Peculiar facts of this case, the Respondent breached the terms of the Contract Finance Facility Agreement
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contained in Exhibit DB4 between the 1st Appellant and the Respondent.
Basically, the argument of the Appellants’ Counsel on this issue is that the Respondent breached the terms of the Contract Finance Facility Agreement when it failed promptly to disburse the full loan sum to the Appellant to enable it execute the contract it had with the Federal Ministry of Works.
The contract facility as stated in the Contract Finance Facility Agreement (Exhibit SB1) between the Appellants and the Respondent was for the sum of N162,000,000.00 (One Hundred and Sixty-Two Million Naira) which the Appellants acknowledged in paragraph 5 of the Amended Statement of Claim and the said Contract Finance facility was for 180 days.
There was a Tripartite Agreement (Exhibit DB3) between the 1st Appellant, 2nd Appellant and the Respondent to use the 2nd Appellant’s house as collateral for the facility. The Appellants acknowledged the fact that the Respondent made the 1st disbursement of the facility on time and that the 1st Appellant commenced work immediately. See Paragraph 13 of the Amended Statement of Claim contained at page 471 of the Record of Appeal.
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The Appellants argument is that the 2nd disbursement of the loan became due and despite the demand for same, the Respondent remained indifferent but made the disbursement weeks later. The Respondent on the other hand pleaded in its statement of defence contained at page 626 of the Record of Appeal particularly at paragraph 13 that as provided by the loan agreement, the Defendant fulfilled its own obligation under the Contract Finance Facility. The Respondent went further to state that it never stopped or delayed the disbursement of payment to the Appellants in line with the loan agreement and that the Respondent instead advised the 1st Appellant to avail it in writing, a breakdown of the amount of money needed by them and what it is meant for in line with paragraph 6 of the loan agreement. See Paragraphs 18 and 21(b) of the Amended Statement of Defence and Counter Claim contained at page 627 and 628 of the Amended Statement of Defence and Counter Claim.
The Appellants did not contend these facts by filing a reply to same.
Now, it would be worthy of note to refer to paragraph 6 under the sub-head ‘Transaction Dynamics’ of the
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loan agreement which provides thus:
“Doliz Brown Group submits request for payment to various suppliers in line with the breakdown of funds utilization but not exceeding the limit of N162 Million.”
In the interpretation of contractual transaction, Court will always hold parties bound by the terms of their agreements when construed according to the strict, plain and common meaning of the words in the instrument as they stand. See the case of SOLICITOR-GENERAL WESTERN NIGERIA VS. ADEBONOJO (1971) 1 ALL NLR PG. 178; U. B. N. VS. OZIGI (1994) 3 NWLR (PT. 333) PG. 385.
It is clear that the Appellants submitted a break down by virtue of Exhibit SB3 which is a request for additional disbursement in the total sum of N59,998,200 (Fifty-Nine Million, Nine Hundred and Ninety-Eight Thousand, Two Hundred Naira Only) which serves as an evidence of the facts stated by the Respondent in paragraph 21 (b) of the Statement of Defence and in line with the provisions of the loan agreement.
The Appellants in their evidence before this Court also did not argue that the loan sum was not given to them upon their application for the second disbursement
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of same which serves as an admission in the first place but instead, that the loan sum was not promptly disbursed which my findings above have shown to be false. In the circumstance, I do not only align myself with the argument of the Respondent on this point but I also agree in totality, with the finding of the learned trial judge who carefully evaluated the evidence on this point and came to its logical conclusion. This point is hereby resolved in favour of the Respondent.
On the next point under this Issue as argued by the Appellants’ Counsel wherein he argued that the Respondent did not speak to the statement of account it relied on to prove the entries alleged therein even though the evidence before the Court shows otherwise. I agree with the argument of the learned Counsel to the Appellant that the burden of proving that there was full disbursement of the loan sum rests on the Respondent. I also agree with the response of the Respondent’s Counsel at Paragraph 4.11 of the Respondent’s Brief of Argument as it is also evident from the evidence of the Respondent’s witness during cross-examination as contained at
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page 920 – 921 of the Record of Appeal thus:
“The Defendant granted a contract financing facility to the 1st Plaintiff. The loan sum was not disbursed to the 1st Plaintiff on one occasion that was the dictates of the 1st Plaintiff. The earlier sum of the loan was paid into the customer’s account on the 22/6/2011. On the 24/06/2011, the customer requested for payment of N90,450,000.00 and the sum were disbursed to be used at the Plaintiff’s pace. They used the money between June, 24th to 22nd July, 2011. The Defendant received another request for additional release of N59,900,000.00 from the Plaintiff. No work program was attached in line with the Contract agreement. The Attention of the 1st Plaintiff was drawn to this omission on same day. We did not see the Plaintiff again until the 2/8/2011. They brought a work plan and approval was granted immediately. Although the approval was for N59,900,000.00. The Defendant allowed the Plaintiffs to withdraw N65,600,000.00….” (Emphasis Mine)
It is therefore my finding that after the statement of account was tendered in evidence by the DW1, he also during cross-examination showed how the funds
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were disbursed to the Appellants. This point is also resolved in favour of the Respondent.
Having determined that there exists no breach of contract by the Respondent against the Appellants and that evidence was given through cross-examination by the DW1 showing disbursement of the 2nd trench of the loan sum and thus the said statement of account showing the same was not dumped at the trial Court, I hereby hold in addition to the decision of the trial Court, from the facts of this case and the evidence before the Court which has also been made available to me by the Record of Appeal, the Respondent did not breached the terms of the Contract Finance Facility Agreement contained in Exhibit DB4 between the 1st Appellant and the Respondent. This Issue One is hereby resolved in favour of the Respondent.
ISSUE TWO
Whether by the clear intentions of the parties on repayment of the facility as contained in the Contract Finance Agreement and the state of evidence at the trial Court, the Respondent’s Counter claim for the repayment of the facility was not in violation of the terms of the agreement between them.
Having established that there is
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no breach of contract by the Respondent against the Appellants and also having in mind all my findings under Issue One above, it follows logically that the Respondent’s claim for the repayment of the facility was not in violation of the terms of the agreement between the Respondent and the Appellants and the Appellants must be held liable for his liability arising out of the contract. This Issue is thus resolved in favour of the Respondent.
ISSUE THREE AND FOUR
Whether having found that the tripartite deed of legal Mortgage created by the parties was in violation of Section 22 of the Land Use Act and therefore invalid, the Learned Trial Judge was right to have countenanced any right found or sought to be enforced on the invalid deed or tripartite legal mortgage vide the Respondent’s Counter Claim at the Trial Court.
AND
Whether the Learned Trial Judge was right when he relied on an unregistered Tripartite Deed of legal Mortgage, he had found to be invalid to grant the Respondent, the right of sale of the said mortgaged property.
I will make my findings on both Issue Three and Four together. The argument of the
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Appellants’ Counsel is that the Deed of Tripartite Legal Mortgage in respect of the 2nd Appellant’s property is unregistered and purports to alienate the right of a statutory title holder without the consent of the FCT Minister first had and obtained.
What is the position of the law as regard these arguments by the Appellants’ Counsel? Like the Appellants’ Counsel has rightly said, Section 22(1) and 26 of the Land Use Act has provided that any alienation of statutory Right of Occupancy over a land without the consent of the Governor but in this case the FCT Minister is null and void.
Also, Section 15 of the Land Instrument Registration Act also provides that no instrument shall be pleaded or given in evidence in Court as affecting a land, unless the same has been registered in the proper office.
However, just as the trial Court had held, the Appellants cannot take advantage of the loan granted and now rely on his own failure to invalidate the deed of Tripartite Legal Mortgage.
Equity acting in personam will not allow a party to come to the temple of justice with dirty hands and unclean conscience. It also does not
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allow a party to benefit from his iniquity. See the case of MR. GIDEON OGUNPEHIN VS. NUCLEUS VENTURE (2019) LPELR – 48772 (SC) (P. 24, paras. D – E) per Ejembi Eko, JSC.
The argument of the Appellants’ Counsel that the trial judge cannot hold that the Tripartite Deed of Legal Mortgage is invalid and in the same vein hold that a valid deed of legal mortgage was created with respect to the mortgaged property does not hold water as my interpretation of the trial Court’s decision is that even though there is the provision of the Land Use Act by virtue of Section 22 and 26, equity must prevail.
The 2nd Appellant used his property known as Plot No. 594B, new Ref. No. FHA/ES/GWA/11/P.594B of 19/10/0 situate and lying within Gwarimpa 11 Estate, FCT, Abuja for the loan sum of N162,000,000.00 which has remained unpaid and he did not deem it fit to register the said tripartite deed or seek for Governor’s consent but now after claiming and benefitting under the said agreement, he now wants to renege from performing his own part of the contract? This Court cannot allow itself to be used as a tool to propel such act by the Appellants.
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Secondly, I have this to say about the said Tripartite Deed of Mortgage. What Sections 22 and 26 of the Land Use Act provides for is that the prior consent of the Governor is a condition precedent for alienation of interest in Land and Section 26 of the Act, renders any alienation without the requisite consent, null and void. However, the sections do not prohibit and affect agreements between parties for the alienation of interest in land and before the alienation which would require the prior consent of the Governor.
In other words, the provisions of Sections 22 and 26 of the Land Use Act do not out law entering into contract agreements for the alienation of interest in land without the consent of the Governor. See the cases of AGBABIAKA VS. OKOJIE (2004) 15 NWLR (897) 503; OMOZEGHIAN VS. ADJARHJO (2006) 4 NWLR (969) 33; MAINAGGE VS. GWAMMA (1997) 11 NWLR (528) 191.
In the case of IBEKWE VS. MADUKA (1995) 4 NWLR (PT. 392) 716, it was held that:
“The combined effect of Section 22(1) and (2) of the Land Use Act does not make an agreement, to alienate without first obtaining the Governors consent void. It makes an agreement to
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alienate conditional upon obtaining the Governor’s consent. Before the consent is obtained, the agreement is inchoate.”
In this case, the Tripartite Deed was only an agreement by which the 2nd Appellant gave as security, its interest in his property known as Plot No. 594B, new Ref. No. FHA/ES/GWA/11/P.594B of 19/10/0 situate and lying within Gwarimpa 11 Estate, FCT, Abuja land, for the facilities it was granted by the Respondent in the event it failed to honour its obligations.
The interest in the said land was not by the Deed, transferred or even alienated by the 2nd Appellant to the Respondent to warrant the prior consent of the Governor as required under Section 22 of the Land Use Act. In fact, the Deed cannot even be said to be a contract agreement for the alienation of the land in question between the Appellants and the Respondent, but simply an agreement to use the land as security for the facility granted to the Appellants.
A proper agreement for the alienation of the land in question would come later after the Respondent has effectively called in and taken steps to realize the security secured by the Deed. It is therefore a gross
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misconception for the Appellants’ Counsel to argue that the Governor’s prior consent was required for the Deed by which the land in question was only given as a security and not alienated by the 2nd Appellant. See OKUNEYE VS. FBN PLC (1996) NWLR (PT. 457) 749.
In any case, the learned trial Court is right that the 2nd Appellant would not be allowed to use the law to benefit from its own wrong since the duty to obtain the Governor’s consent even if required, was on him. See the cases of OMOZEGHIAN VS. ADJARHO (SUPRA); SOSAN VS. H. F. P. ENG. NIG. LTD (2004) 3 NWLR (PT. 861) 546 and AMADI VS. NSIRIM (2004) 17 NWLR (901) 111.
It is therefore the decision of this Court on this issue that the Appellants cannot claim under the contract and now turn around to claim a defect in the agreement which was his duty to perform. On the other hand, however like I have made in my finding, the Governor’s consent is only premature at this stage where the mortgage property has not been alienated as the Tripartite Deed of Mortgage is only an agreement to alienate the said property of the 2nd Appellant and not to alienate the property per se.
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Also, the argument of non-registration of the tripartite deed of legal mortgage cannot also avail the Appellants as I have already held, the Appellants cannot gain from the contract and now be found to complain when it is time to fulfill its own obligation in the same contract he now complains of. These issues are hereby resolved in favour of the Respondent.
In the final result, it is my considered view and also agreeing with the decision of the learned trial judge and reliefs granted therein in its entirety, that this appeal fails in view of all my findings made above.
This appeal is hereby dismissed for lacking in merit. I make no further order as to cost.
PETER OLABISI IGE, J.C.A.: I agree.
ELFRIEDA OLUWAYEMISI WILLIAMS-DAWODU, J.C.A.: I agree.
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Appearances:
I. Ameh, SAN with him, D. M. Idoko Esq , E. Atadoga, Esq. and Z. Akubo, Esq. For Appellant(s)
T. Kehinde, Esq. with him, E. J. Okoye, Esq., I. C. N. Okonkwo, Esq. and S. M. Nyikemba, Esq. For Respondent(s)
