James B. C. Mmegwa V. Texaco Nigeria Plc (2005)
LawGlobal-Hub Lead Judgment Report
MIKA’ILU, J.C.A.
This is an appeal against the judgment of Anambra State High Court, Ihiala judicial division in suit No. HIH/16/85, James R.C Mmegwa v. Texaco Nigeria Plc., delivered on 2nd April, 2001. As per the statement of claim of the appellant as the plaintiff under paragraph 2, it was alleged by the appellant as plaintiff as follows:-
“2. The defendant entered into an agreement with the plaintiff for the grant to the defendant of lease of the plaintiff’s land, situate in Ihiala, within the jurisdiction of this court, and the construction on the said land by the defendant of a petrol filling station at which the plaintiff on (sic) his nominee, shall be appointed dealer by the defendant, for the sale and distribution of the defendant’s petroleum and other products.”
In the suit, the appellant alleged default on the part of the respondent. He therefore under paragraph 22 of the statement of claim, claimed against the respondent as follows:-
“An order of this honourable court of specific performance compelling the defendant to execute the lease, the terms of which had been negotiated and agreed upon with the plaintiff, as contained in the final draft lease, signed by the plaintiff; in respect of the agreed area in plan No. MCE/68/80 for which the plaintiff holds the certificate of occupancy in his name registered as No. 45 at page 45 in volume 525 in the office at Enugu and to perform forthwith the terms and stipulations therein on their part to perform.
The said lease to take effect from 10th November, 1980. And/or such order or orders as the court may deem just in the circumstances.”
After evidence had been taken during the addresses, the appellant applied to amend the above paragraph 22 of the statement of claim by adding:
“If the court finds that the plaintiff is not entitled to specific performance of the whole or any part of the contract, the plaintiff then asks for damages.”
The learned Counsel for the respondent/defendant did not object, but asked for substantial costs of N2,000.00. The appellant’s counsel offered N1,000.00. The trial court granted the application and paragraph 22 was amended accordingly. The trial court awarded cost in the sum of N1,000.00 against the appellant in favour of the respondent. Refer to page 50 line 29-10 page 51 line 2.
At the trial, the appellant testified and called no other witness. The defendant called one witness. Some documents were tendered also in evidence by the parties. Both parties addressed the court. The trial court having considered the entire evidence and the addresses of the parties came to the conclusion that the claim of the appellant failed and dismissed the suit. Thus, the plaintiff aggrieved by the said judgment filed this appeal.
Before this court, briefs have been filed and exchanged. When this appeal came up for hearing on 15th March, 2005, the learned Counsel for the appellant, A. A. Edumanu, adopted the appellants brief filed on 15th September, 2003. The learned Counsel for the respondent, Dr. E.E.J. Okereke adopted the brief of argument of the respondent dated and filed 12th November, 2003.
In the brief of argument of the appellant, two issues have been formulated for determination. The issues are:-
(i) Whether the trial court was right in coming to the conclusion it reached, that the appellant has no remedy in specific performance.
(ii) Whether the trial court was right in suo motu, vacating its order granting the amendment of the plaintiff’s statement of claim to admit of the award of damages (in the alternative), notwithstanding its finding at p. 68 lines 27-34 of the record, “That the plaintiff in the circumstances of this case is entitled to some measure of damages.”
The issues also formulated in the respondent’s brief are two. They are similar to the issues as formulated in the appellant’s brief of argument. In determining this appeal, I will therefore consider the issues as formulated in the appellant’s brief of argument.
The first issue is married to grounds (1), (2) and (3) of the grounds of appeal. It is the argument of the learned Counsel for the appellant, on this issue, that the trial court misconceived the import of the appellant’s case, when it proceeded to consider the validity or invalidity of exhibit ‘N’ as the main question for determination by the court. That it did not advert to the claim itself, which was seeking for the order of specific performance to compel the respondent to sign exhibit ‘N’ and then to build the filling station. He has maintained that the appellant did not sue the respondent on exhibit ‘N’ but on the oral agreement which came into existence on the acceptance by the appellant, in exhibit ‘B’ the offer by the respondent in exhibit ‘A’. That the terms of the said agreement are in exhibit ‘N’ which the respondent had sent to their headquarters and got approved by them (as found by the court at page 65 lines 7-11 of the record) before bringing the said exhibit ‘N’ to the appellant to sign. The appellant’s counsel has submitted that this case is on all fours with the case of Anaeze v. Anyaso (1993) 5 NWLR (Pt. 291) 1. That the appellant did all that was required of him under agreement induced and goaded by the respondent. He has added that the appellant had contractual rights, which were breached by the respondent and which the court will protect by an order of specific performance. It is also his submission that by the nature of the agreement between the appellant and the respondent, the general rule of reluctance of the court to order specific performance of contract for building does not apply. That cases, like appellant’s, where the defendant was to take a lease of land from the plaintiff and has agreed to erect a building upon it constitute exception to the general rule. He has further contended that the appellant is entitled to the order of specific performance under the rule in Walsh v. Lonsdale (1882) 21 Ch.9. He has explained that the rule is that the tenant who is in possession (as the respondent in this case was) under an agreement for lease, is to be treated as holding upon the terms upon which he would have held had he received a valid lease in pursuance of the agreement. If therefore, exhibit ‘N’ is held invalid or unenforceable the respondent will still be treated as if he holds under an agreement for a lease, and specific performance of such agreement would be granted, since he was in possession at all material times even before exhibits ‘A’ and ‘B”. That the respondent was in possession of the land the subject matter of the lease, when the appellant was made to sign the draft lease. He has maintained that the appellant had done all that was required of him under the agreement and the trial court so found at page 68 lines 27-34.
Another contention of the appellant’s counsel is that the trial court was in error, when it suo motu went out scouting for reasons for refusing an order of specific performance under various heads like hardship, supervision by court, impecuniousity and expiration of the term of lease. He has maintained that the trial Judge is not free to speculate on matters of facts which were neither pleaded nor in evidence at trial, and to make inferences therefrom, the basis of its decision. He has relied upon Orhue v. NEPA (1998) 7 NWLR (Pt.557) 187 S.C. He urges this court to answer the first issue in the negative.
The respondent’s counsel, in the respondent’s brief of argument has argued that as a result of counter-affidavit of the appellant that he be appointed a dealer or his nominee of the filling station contrary to the respondent’s company policy, the initial offer lapsed. That this was conveyed to the appellant by a letter from the area manager dated 26th June, 1982, exhibit ‘M’. He has maintained that it was on the basis of exhibit ‘N’ that the appellant sued the respondent for specific performance. The said document was not signed by the respondent. He has contended that before a court can grant specific performance the terms must be certain. That the order of specific performance is open only to the purchaser to ask for the equitable order to buy the land since damages would not be adequate compensation. That is available where only the vendor has committed himself by signing the agreement in which the parcel of land is well described and the terms including the consideration are well set out. He has added that, it does not avail a vendor to compel a purchaser to buy his land. It is the submission of the respondent’s counsel that it is well settled law that specific performance will not be granted where complication will arise which would require the courts supervision. He has added that the order of specific performance would not be far reaching as to compel the respondent to renew the expired lease so that specific performance could be ordered. He has also submitted that generally evidence is not admitted as to what passed between the parties before the execution of a written agreement or during its preparation. He refers to Union Bank of Nig. Plc. v. Prof Ozigi (1994) 3 NWLR (Pt.333) 385. He has contended that it is for the party seeking to enforce specific performance to tender evidence in proof of the other party’s specific commitment to the written terms of the agreement, signed by the party against whom specific performance is sought. He refers to Chitty on Contract, vol. 1 (22nd edition) paragraph 65 p.32 page 601 paras. 1429-1439. He urges this court to hold that the appellant had woefully failed to produce such evidence that would entitle him to the equitable relief of specific performance in the circumstance.
After a careful perusal of the judgment of the trial court, I can hardly agree with the submission of the learned Counsel for the appellant that the trial court misconceived the import of the appellant’s case when it proceeded to consider the validity or invalidity of exhibit ‘N’ as the main question for determination by it. In its judgment, the trial court has clearly identified the issue for determination in this case. The issue identified by it, is whether there was a valid and enforceable contract between the parties and, if so, whether specific performance is available to the plaintiff in the circumstances of the case. Refer to page 42 line 62 to page 63 line 2. The trial court in its judgment has further clarified that exhibits ‘A’ and ‘B’ formed the basis of the contract which from the intention of the parties were subject to formal written agreement or document. It further held as follows:-
“In the instant case, the parties after subsequent dealings and discussions reduced the terms of their agreement into a written document, exhibit ‘N’. Having done this, extrinsic evidence of any preliminary agreements can no longer be introduced in giving effect to the agreement between the parties. It follows that what governs the relationship of the parties in this case is exhibit ‘N’.
It is true as argued by the appellant’s counsel that the claim of the appellant was seeking for an order of specific performance to compel the respondent to sign exhibit ‘N’ and then to build the filling station. However, the above decision of the trial court has answered the argument of the appellant’s counsel that the appellant sued the respondent on the oral agreement which came into existence on the acceptance by the appellant in exhibit ‘B’ the offer by the respondent in exhibits ‘B’. The trial court has made it clear that the alleged oral evidence or exhibits ‘A’ and ‘B’ are extrinsic evidence which can no longer be introduced in giving effect to the agreement between the parties. Even the learned appellant’s counsel has conceded that the terms in the oral agreement which came into existence by exhibits ‘A’ and ‘B’ have been reduced into writing in exhibit ‘N’. Therefore what the trial court did was only to go further by considering whether or not exhibit ‘N’ was valid and enforceable. The trial court in its judgment, referred to paragraph 22 of the statement of claim of the appellant, and made it clear that the appellant was asking for specific performance to compel the respondent to execute exhibit ‘N’ and perform the terms and conditions therein or damages if specific performance failed. The trial court held that where there is a valid and enforceable contract between the parties relating to transaction in respect of land and one of the parties defaults in the performance of his part, the other contracting party, who has performed his part has the option either to seek to enforce the performance of the contract or to claim for damages for breach. It concluded as follows:-
“This means that, if the contract is not valid and enforceable as in this case, the plaintiff who is not in default will have no such option. In other words, the plaintiff in this case is not entitled to specific performance nor damages.”
The trial court further took the pain of considering what the position would be assuming that exhibit ‘N’ was valid and enforceable. Still it maintained that specific performance is a discretionary remedy. It went ahead and held that order of specific performance may be refused although the contract is binding in law.
Having given its reasons it concluded as follows:-
“In the circumstances, I hold as a fact that specific performance is not available to the plaintiff as to do so will entail not only hardship to the defendant, but also constant supervision by the court.”
The argument of the learned Counsel for the appellant that the trial court misconceived the import of the appellant’s case is wrong and unacceptable. The trial court clearly understood the import of the appellant’s case. Determining the validity and enforceability of exhibit ‘N’ does not in any way vitiate the decision of the trial court. The crux of the issue is the question of grant of order of specific performance. It is trite that where there is a contract that is both valid and enforceable and one of the parties thereto defaults in the performance thereof the other party has one of two options open to him.
The options are:-
(a) to insist on actual performance of the contract i.e specific performance; or
(b) seek damages for the breach.
Refer to Anaeze v. Anyaso (1993) 5 NWLR (Pt.291) 1. However, the present case involves question of building a petrol station by the respondent on the land, which was the subject-matter of the transaction between the parties. The general rule is that a contract to erect a building, may not be specifically enforced against the builder for three reasons, which are:-
(a) damages may be an adequate remedy if another builder can be engaged to do the work.
(b) the contract may not specify the work to be done with sufficient certainty.
(c) Specific performance may require constant supervision.
Refer to Chitty on Contracts, 24 edition, 1646. In our case, the trial court among other reasons, refused to grant the order of specific performance as the performance requires constant supervision. The reasons given by the trial court are not speculations as argued by the learned counsel for the appellant.
The trial court has correctly treated exhibits ‘A’ and ‘B’ as extrinsic as in the circumstances they were preliminaries to exhibit ‘N’. They were subject to coming into effect of exhibit ‘N’. The trial court was right therefore in refusing to grant an order of specific performance to compel the respondent to sign exhibit ‘N’ as well as to grant order of specific performance to compel the respondent to build the petrol filling station on the land. The first issue is therefore decided against the appellant.
The appellant’s counsel has drawn the attention of this court to the fact that it was in the course of addresses of counsel, the appellant’s counsel applied to amend his statement of claim. The amendment was for him to include the relief of award of damages, should the court find a breach but consider the breach could be compensated in damages, in which case, the court would then hear the parties on damages. That this amendment was granted by the court without objection by the respondent. The trial court however, in the course of the judgment suo motu, reopened the question of the amendment of the statement of claim and without reference to or hearing either party on the matter vacated the court’s order granting the amendment, arguing that the court had no jurisdiction to grant the said amendment. The appellant’s counsel has submitted that the trial court lacks jurisdiction to set aside the said order made by it. That by so doing it, sat on appeal over its own judgment. He has submitted that by setting aside the order of amendment without hearing the appellant, his constitutional right to fair hearing under section 33 of the Constitution has been violated. The appellant’s counsel submitted that the trial court had jurisdiction to grant the order of amendment. That the reasons given by the trial court that no evidence was led as to damages and that no fee was paid on the claim for damages were raised suo motu by the trial court. He has submitted that the law on amendment of pleadings, is that it may be made and granted at any stage of the proceedings before judgment provided it is not prejudicial to the other party and was not made malafide. That the address stage is before judgment. On the other hand, the learned Counsel for the respondent has maintained that the amendment was not directed towards making any evidence as to damages previously given in the proceedings to be formalized, and accepted as forming evidence properly given or received and neither did the appellant adduce further evidence as to damages. This is correct argument as even the learned Counsel for the appellant in his argument is only saying that the amendment would allow evidence in future. It is true that no fee was also paid for the added relief. Undoubtedly, if a court makes order, which it has no jurisdiction to make, it has jurisdiction to rescind the order so as to restore the status quo. Refer to Akinbobola v. Plisson Fisko Nig. Ltd. (1991) 1 NWLR (Pt.167) 270, (1991) 22 NSCCC (Pt.1) 105. In this case, I have seen nothing wrong in the decision of the trial court to suo motu in its judgment rescind the order, when it realized that the order was incompetent. The issue has been canvassed at the address level. Refer to p.51 line 35 to p.52 line 5-10. There it has been counter-argued that the amendment for damages though not opposed, there was, no evidence as to damages on which the court can make any award. That the court had no jurisdiction to award damages as a relief claimed when the relief was not paid for. Therefore, it could not be said that the court suo motu decided to set aside its earlier order. The argument of the learned Counsel for the appellant on this issue fails.
In the final conclusion, I find that there is no merit in this appeal. It is accordingly dismissed. The decision of the trial court is affirmed. I award the sum of eight thousand naira (N8,000.00) as cost in favour of the respondent against the appellant.
Other Citations: (2005)LCN/1752(CA)
