Niger Classic Investment Limited V. Uacn Property Development Company Plc & Anor (2016)
LawGlobal-Hub Lead Judgment Report
YARGATA BYENCHIT NIMPAR, J.C.A.
The Appellant initiated an action by way of Originating Summons against the Respondents at the Lagos State High Court. After trial, HON. JUSTICE K. O. ALOGBA in his judgment delivered on the 19th day of December, 2012 dismissed the claim of the Appellant. Dissatisfied with the judgment, the Appellant filed an amended Notice of Appeal dated 23rd January, 2015 on the 27th January, 2015 setting out 12 grounds of Appeal.
The Originating Summons before the trial Court sought answers to the following questions:
1. Whether or not a letter of September 20 2011, written by the 1st Defendant to the Claimant listed in the schedule hereunder as 1st letter constituted a valid offer by the 1st Defendant to sell to the Claimant, a 5 bedroom house known as 28D Glover Road, Ikoyi Lagos (hereinafter referred to as 28D).
2. Whether or not the request made by the Claimant on the telephone to the 1st Defendant on receipt of the said 1st letter to the effect that the offer in respect of 28D should be consolidated with an earlier offer in respect of another unit of the property
1
known as No28B Glover Road, Ikoyi, Lagos (herein after referred to as 28B), and that the sum of N160, 000,000.00(One Hundred and Sixty Million Naira) already paid for the said 28B be used as down payment for the combined prices of 28B and 28D, constituted a Counter offer by the Claimant to the 1st defendant.
3. If the said request made by the Claimant constituted a Counter – offer, whether or not the contents of another letter of September 20, 2011 with Ref No MM/SS/11/1068 written by the 1st Defendant to the Claimant (herein after referred to as the 2nd Letter), the 1st Defendant accepted the Counter offer and thereby constituted a valid agreement between the two parties in respect of No. 28D.
4. If question 2 is answered in the negative, whether time is of the essence of the offer contained in the 1st letter.
5. If time is of essence, whether or not the unconditional acceptance of N25,000,000.00 (Twenty Five Million Naira) paid by the Claimant to the 1st defendant on October 28th 2011 amount to a waiver of such time element.
IN THE ALTERNATIVE
6. Whether or not by the contents of the 2nd Letter, the 1st Defendant made a fresh
2
offer to sell to the claimant 28D together with the said 28D as single, using the said N160,000,000.00 (One Hundred and sixty Million naira) as a down payment for both.
7. If the question 6 above is answered in the affirmative, whether or not the payment of a sum of N25,000,000.00 (Twenty Five Million Naira) on the 28th October 2011, by the Claimant to the In Defendant in addition to the sum of N160,000,000.00 (One Hundred and Sixty Million Naira) mentioned in 6 above constituted an acceptance of the 1st defendant’s offer contained in its 2nd letter and as at the said October 28, 2011, there was consensus ad idem thus crystallizing into a contract.
8. Whether or not time is of essence in the offer to sell the said two units of property to the Claimant as a single sale as contained in the said 2nd letter.
9. If question 8 above is answered in the affirmative, whether or not the unconditional acceptance by the 1st defendant of the additional sum of N25,000,000.00 (Twenty Five Million Naira) paid by the Claimant to the 1st defendant on October, 28 2011 for the said sale after the time stated in the 2nd Letter as deadline for payment has lapsed, is
3
a waiver by the 1st Defendant of the time element in the offer.
The Claimant sought the following reliefs:
a) AN ORDER OF INJUNCTION restraining the 1st Defendant by itself and its agent from disposing of or dealing with or both the two units of property in any form prejudicial to the interest of the claimant.
b) AN ORDER OF INJUNCTION restraining the 2nd Defendant from registering any interest whatsoever in any one of or the two units of property known as 28B Glover Road, Ikoyi, Lagos, other than the claimant’s interest, unlike the final determination of this action.
c) A MANDATORY ORDER compelling the 1st Defendant to accept payment of the sum of N100, 000,000.00 (One Hundred Million Naira) paid by Lt. Gen M.I. Wushishi through Britannia – U Nigeria Ltd on behalf of the claimant on the 3rd January, 2012 as further payment for the purchase of both units of property known as 288 Glover Road, Ikoyi, Lagos, and the sum of N90,250, 000.00 (Ninety Million, Two Hundred and Fifty Thousand Naira) being the balance of the purchase price for both units.
d) AN ORDER directing the 1st Defendant to execute a Deed of Assignment in respect of the
4
two units of property in favour of the claimant and any other instrument necessary to transfer the titles therein to the claimant and to take all other steps to perfect such titles in the name of the claimant on payment of the balance stated in (iii) above.
e) AN ORDER directing the 1st defendant to pay the costs of this action assessed at N10,000,000.00 (Ten Million Naira).
The trial Court upon due determination of the originating summons answered the questions put forward as followed:
Question (1) – No, as the letter was made subject to contract i.e. Exhibit AA2 and was later overtaken by Exhibit- AA3.
Question (2) – (5) are also answered in the negative for reasons fully spelt out in the body of the Judgment.
Question (6) – Answered in the affirmative
Question (7) – Also, because the payment was not made in compliance with the full tenor or stipulations of Exhibit – AA3, No letter of acceptance was followed, no payment was made as at 27th September, 2011.
Question (8) – Yes, time was clearly made of the essence in Exhibit- AA3.
Question (9) – No, because there was no binding agreement created by virtue of the noncompliance with
5
the mode of acceptance and time of payment stipulated in Exhibit-AA3.”
Consequently therefore, the claim failed and was dismissed thus this appeal.
The Appellant’s Amended Brief of Argument settled by Prof A. B. Kasunmu SAN and A. J. Awonikoko SAN is dated 23rd January, 2015 and was filed on the 27th January, 2015 and deemed on the 24th of February, 2015. The Appellant also filed a reply to the 1st Respondent’s Brief of Argument dated 13th March, 2015 and filed on the same date. The Appellant’s brief presented 5 issues for determination as follows:
i. Whether the lower Court was right in coming to the decision that there is no binding contract between the Appellant and the 1st Respondent in respect of which a decree of specific performance can be issued in favour of the appellant in this case.
ii. Whether the lower Court was right in holding that time was of the essence of the contract of sale of the two properties (which is denied), and that there was no waiver of the time as stipulated in Exhibit- AA3 on the undisputed facts of this case.
iii. Whether the lower Court was right in failing to hold that the 1st Respondent’s letter dated
6
the 20th day of December 2011 is a nullity.
iv. Whether after having held that Exhibit-AA3 had consolidated the sales of the properties into a single transaction, the lower Court did not contradict itself and occasion a miscarriage of justice when it held that the 1st Respondent rightly unilaterally appropriated so much of the payment received towards the purchase of only No. 28 B Glover Road, and that specific performance could not be decreed in respect of No. 28B Glover Road, despite willingness and undertaking by the Appellant to complete the payment for the consolidated sale.
v. Whether the lower Court was wrong and acted without jurisdiction in holding that the 1st Respondent could resile from its contract to sell house 28B, Glover road, Ikoyi to the Appellant and that the 2nd Respondent can register any interest, other than the interest of the Appellant, as may be presented.
The 1st Respondent’s brief distilled the following two issues for determination thus:
1. Whether Exhibit – AA3 constituted a binding contract of offer and acceptance between the Appellant and the 1st Respondent in view of the conditions stipulated in Exhibit AA3
7
and if the question is answered in the affirmative, was time of essence of the contract and if so, was the time as copiously stipulated in Exhibit AA3 ever waived?
2. Having held that Exhibit AA3 had consolidated the sales of the two properties into a single transaction, whether the lower Court was in error when it held that the 1st Respondent can resile from the offer to sell property 28B and 28D, Glover Road, Ikoyi to the Appellant and that the 2nd Respondent can register any interest, other than the interest of the Appellant, as may be presented to it by the 1st Respondent.
The issues formulated by the 1st Respondent are concise and adequately cover the main issues in contention between the parties but for effective resolution of all the areas of complaint put forward by the Appellant, it is advisable to adopt the issues distilled by the Appellant for resolution in this appeal and in the order presented. It is noted however that the Appellant argued Issues 1, 2 and 3 together. They shall be so considered. The arguments proffered by the 1st Respondent which are under two issues shall be applied where necessary to the issues formulated by the
8
Appellant.
ISSUE 1, 2 and 3:
“1. Whether the lower Court was right in coming to the decision that there is no binding contract between the Appellant and the 1st Respondent in respect of which a decree of specific performance can be issued in favour of the Appellant in this case.
2. Whether the lower Court was right in holding that time was of the essence of the contract of sale of the two properties (which is denied), and that there was no waiver of the time as stipulated in Exhibit – AA3 on the undisputed facts of this case.
3. Whether the lower Court was right in failing to hold that the 1st Respondent’s letter dated the 20th day of December 2011 is a nullity.”
Learned counsel to the Appellant submitted that the judgment of the lower Court recognized that there was a contract between the parties in respect of the two properties in question and that the sale of both properties was a single transaction. He further submitted that Exhibit AA3 is a letter of acceptance by the 1st Respondent and not an offer and that by that letter there is already in existence a binding, enforceable and part ? performed contract between the parties.
9
That the delay by the Appellant to pay the balance of the contract sum as at the due date, only amounts to a breach of a term of the contract which entitles the 1st Respondent to either terminate the contract in its entirety, sue for recovery and/for damages for the breach. Thus, learned counsel submitted that the Court was wrong to have held that the Respondent was entitled to severe the consolidated contract into two and appropriate the payments made for the consolidated sale to fully complete the sale of 28B only. He also submitted that the Court was wrong to have held that the 2nd Respondent was at liberty to register any interest as may be presented to it by the 1st Respondent with respect to the property at 28B Glover Road.
Furthermore, the counsel to the Appellant submitted that the 1st Respondent’s letter purporting to withdraw the sale of 28D is a nullity and the Court ought to have held otherwise. That all the conditions precedent necessary for the crystallization of a contract are present and the fact that there was delay in payment of the balance, does not mean that there was no contract. He submitted that the trial Court misapplied the
10
following Supreme Court cases: KAYDEE VENTURES LTD V. HON MINISTER OF FCT (2010) 2-3 SC (PT 111) 50; BEST (NIG) LTD v. BLACKWOOD HODGE (NIG) LTD 2011 1 – 2 SC (PT 1) 55; TSOKWA OIL MKT CO V. B.O.N LTD 2002 5 SC (PT 11) 9; ODUTOLA v. PAPER SACK (NIG) LTD 2006 11 – 12 SC; 60; BILANTE INTL LTD V. NDIC 2011 6 – 7 (PT IV) P 11; FGN v. ZEBRA ENERGY LTD 2002 12 SC (PT 11) 136.
Yet again, the Appellant submitted that the trial Court erred in holding that time was of the essence in the contract between the Appellant and the 1st Respondent. That before this principle will apply in any contract, it must be expressly stated, firm and unequivocal, referred to the case of WARNER AND WARNER INTERNATIONAL ASSOCIATES NIG LTD V. FEDERAL HOUSING AUTHORITY (1993) 6 NWLR (PT 298) 148. That there is no condition stipulated in Exhibit AA3 which could render the already valid contract invalid for non – compliance and that both parties had been carrying on their respective obligations in a manner which showed that time was not of the essence. Furthermore, the Appellant contended that assuming time was of the essence, the 1st Respondent had waived its right to enforce when it
11
accepted the sum of N25million from the Appellant as further payment of its outstanding debt a month after the time stipulated for full payment had expired, cited NWAOLISAH V. NWABUFOH (2011) 14 NWLR (PT 1268) 600 S.C., NPA V. AICO (2010) 3 NWLR (Pt. 1182) 487, UCC V. ELDERDEMPSTER (1972) 7 NSCC 490, MBELEDOGU V. ANETO (1996) 2 NWLR (PT 429) 157, CAP PLC V. VITAL INV LTD (2006) 6 NWLR (PT 976) 220.
However, the 1st Respondent was of the opinion that when Exhibit AA3 is examined carefully, it clearly shows that there are conditions to be met before the contract can become binding and enforceable, citing the case of AMANA SUITS HOTELS LTD V. PDP (2007) 6 NWLR (PT 1031) 453. That the condition was that the Appellant was to credit its account with the outstanding sum to enable them conclude the transaction. Hence the 1st Respondent submits that Exhibit AA3 cannot be a binding and enforceable contract in the Court of law, relying on NEKA B.B.B. MFG. CO. LTD V. A.C.B. LTD. (2004) 2 NWLR (PT 858) P 521, To further illustrate the non – bindingness of Exhibit AA3, the 1st Respondent submitted that there was no mutuality of purpose and intention because while the
12
Appellant is of the belief that the money can be paid at any time, the 1st Respondent by Exhibit AA3 stated the importance of payment of the outstanding within a specific time. On what constitutes an agreement, the 1st Respondent cited the case of AKINYEMI V. ODU?A INV. CO. LTD (2012) 17 NWLR (PT 1329) 209 and B.C.C. PLC. V. SKY INSP (NIG) LTD (2002) 17 NWLR (PT 795) 86. It further contends that by referring to Exhibit AA3 as the “new contract” the trial Court was merely implying that it is a new transaction and a new offer. Furthermore, the 1st Respondent submitted that the alleged telephone conversation the Appellant had with a person in the 1st Respondent’s company is of no evidential value as it is not recognized, confirmed or recited in the content of Exhibit AA3, citing the case of KAYDEE VENTURES LTD V. HON MINISTER OF F.C.T (2010) 7 NWLR (PT 1192) 171 in support. More so, the 1st Respondent posited that assuming without conceding that the properties had been consolidated into one transaction, there was need for the Appellant to credit the 1st Respondent’s account with the outstanding sum to create a binding contract and that the Appellant whose
13
hand is not clean cannot approach equity, cited MOGBOLU v. WOBO (2004) 17 NWLR (PT 903) 465. That there was overwhelming evidence to show that time is of the essence in this transaction and the Appellant cannot argue otherwise, relied on TSOKWA OIL MARKETING CO. V. B.O.N LTD (2002) 11 NWLR (PT 777) 163; GOLDEN CONSTRUCTION CO. LTD V. STATECO (NIG) LTD (2014) 8 NWLR (PT 1408) 171; NWAOLISAH v. NWABUFOH (2011) 14 NWLR (PT 1268) 600; ORIENT BANK (NIG) PLC v. BILANTE INTL. LTD (1997) 8 NWLR (PT 515) 37; LEYLAND NIGERIA LTD v. DIZENGOFF (1990) 2 NWLR (PT 134) 610. Furthermore, the 1st Respondent submitted that it is not essential that the phrase “time is of the essence” must be inserted into the contract. The 1st Respondent also distinguished the cases of N.P.A V. AICO (2010) 3 NWLR (PT 1182) 487 and WARNER AND WARNER INTL LTD v. FEDERAL HOUSING AUTHORITY (1993) 6 NWLR (PT 298) 148. On waiver of time, the 1st Respondent contended that there was nothing to show that it had waived its right but that it was the Appellant who was not diligent nor ready to conclude the contract, cited the case N.B.C.I. V. INTEGRATED GAS (NIG) LTD (2005) 4 NWLR (PT 916) 61. That the
14
Appellant was never misled into thinking the conditions in Exhibit AA3 had been waived and that the 1st Respondent had promptly informed the Appellant of the withdrawal of its offer for property unit 28D, referred to JEJE V. UBA PLC (2007) ALL FWLR (PT 381) 1783, M.O. KANU SONS & CO LTD V. FIRST BANK OF NIGERIA (2006) 5 S.C. (PT 111) 80.
In response, the Appellant observed that statement made by the 1st Respondent in its brief of argument that it had sold its interest in the property to a third party is of no effect because any sale or transfer during the pendency of the litigation is ineffective and will require fresh evidence on appeal, relied on OSIDELE V. SOKUNBI (2012) 15 NWLR (PT. 1324) 470, ORONTI v. ONIGBANJO (2012) 12 NWLR (PT. 1313) 23, UDO V. R.T.B.C & S (2013) 14 NWLR (PT 1375) 489. Thus they urged this Court to disregard this issue. The Appellant also submitted that the argument of the 1st Respondent that the telephone conversation is not a counter offer is non sequitur as it was never raised in the lower Court, cited LSDPC V. PURIFICATION TECH (NIG) LTD (2013) 7 NWLR (PT 1352) 82. On the issue of waiver, the Appellant submitted that
15
the 1st Respondent’s receipt of the Appellant’s various payment after the purported payment deadline signifies a waiver and the 1st Respondent has held onto the balance of N90 million till date, cited NBCI v. INTEGRATED GAS (NIG) LTD (2005) 4 NWLR (PT 916) 617 SC. That due to the failure to notify the Appellant of its intention to waive the contract term, the condition was thereby never waived.
RESOLUTION:
It is settled that a decree of specific performance can only be made in certain circumstances such as the party seeking the order must comply with the terms of the contract. It is therefore the rule that no order will be made to enable a party breach the contract, see L.S.D.P.C v. N.L. & S.F.LTD (1992) LPELR 1744 (SC), Generally, the nature of a specific performance is a relief that is purely equitable and one of its cardinal principles is that it is granted if there is no remedy in law for the claimant’s action. So it is anchored on the inadequacy of remedy of damages in law. Fundamentally, an order of specific performance will only be applicable when there is a valid contract. There is a responsibility too on the claimant to show that he has
16
performed all that is expected of him under the contract. It is defined in Black’s Law Dictionary (9th Ed.) page 1529 thus:
“The rendering as nearly as practicable, of a promise performance through a judgment or decree; a Court ordered remedy that requires precise fulfillment of a legal or contractual obligation when monetary damages are inappropriate or inadequate, as when sale of real estate or a rare article is involved. Specific performance is an equitable remedy that lies within the Court’s discretion to award whenever the common law remedy is insufficient.”
See also BEST (NIGERIA) LTD v. BLACKWOOD HODGE (NIGERIA) (2011) LPELR-776 (SC).
A contract is defined as an agreement between two or more persons which creates an obligation to do or not to do a particular thing. Its essentials are competent parties, subject matter, a legal consideration, mutuality of agreement and mutuality of obligation, see BILANTE INTERNATIONAL LTD V. NIGERIA DEPOSIT INSURANCE CORPORATION (2011) LPELR – 781 (SC). The trial Court in refusing to make an order for specific performance held thus:
“The Appellant precipitated a breach by his conduct. There was no
17
binding contract of sale herein. The authority cited by the Appellant is not apposite. The Appellant with the above position as depicted desires to have specific performance of the agreement between it and the 1st respondent ordered by the Court in its favour…. In making an order for specific performance, the Court must exercise its discretion judicially and judiciously as well. The judge has to be discreet and balance the interest of both sides properly in his bid to do justice to the contending parties.”
The Court further held:
“In my humble view it would not be a balancing of the equities between Claimant and 1st Defendant herein to award a decree of specific performance to the Claimant, for that would mean giving judicial stamp of authority to pay the 1st Defendant for its properties as it liked and whenever it liked; irrespective of its having not formally accepted the offer and having not paid fully and even substantially within time stipulated in the offer exhibit – AA3. It will indeed be a miscarriage of justice to do, more particularly; as I had noted when the 1st Defendant still retained one unit of the two units property for the
18
claimant.”
From the extensive quotation from the judgment of the trial Court, the refusal to make an order for specific performance was premised on a number of factors. First the trial judge found that the Appellant did not accept the offer made by Exhibit AA3 so there was no contract. The trial judge also found that the Appellant precipitated a breach of the contract by his conduct and that the Appellant did not pay fully or substantially as stipulated in the offer. The settled conditions of making an order for specific performance was highlighted earlier in this judgment and principal therein is the condition that there must be a valid contract and the Appellant must have performed all that is required of him in the contract. These main elements were found by the trial Court to be missing.
In view of the challenge by the Appellant, was there a contract from where the terms and obligations can be identified? A contract was defined earlier and certain elements must exist and be identified before it can be said that there is a contract. These are:
. There must be a binding contract
. An unqualified acceptance of that offer
. A legal
19
consideration for a contract to exist
. There must be mutuality of purpose and intention
See the case of NEKA B.B.B MFG. CO. LTD v. A. C.B. LTD (2004) 2 NWLR (Pt. 858) 521.
In the case before us, the initial offer was in Exhibit AA2 which was made subject to contract. Subject to contract simply means a contract made subject to fulfillment of certain terms. It was defined in the case of BEST (NIGERIA) LTD V. BLACKWOOD HODGE (NIGERIA) LTD & ORS (2011) LPELR – 776 (SC) thus:
“Where a contract is made subject to the fulfillment of certain specific terms and conditions, the contract is not formed and not binding unless and until those terms and conditions complied with or fulfilled.”
See also TSOKWA OIL MARKETING CO. v B.O.N. LIMITED (2002) 11 NWLR (PT. 777) 163.
Parties herein engaged themselves in a property sale, that is, initially, the offer letter of 13th August, 2010 requiring payment to be made within 30days provided that advance payment was made by the 20th August, 2010 in respect of No. 28B. The Appellant made payment of the sum of N160,000,000.00 (One Hundred and Sixty Million Naira) leaving an outstanding balance of
20
N30,000,000.00 (Thirty Million Naira) which remained unpaid until the second offer for House No. 28D was made through the offer letter of Exhibit AA2 dated 20th September, 2011. This offer letter required that full payment be made by 27th September, 2011 same day Exhibit AA3 came into existence. The said Exhibit M3 purported to consummate the two sales into one even though the first one was part performed. The trial Court found that the contract of sale for No. 28B remained in existence even though the conflict created is over Exhibit M3, the offer letter that mentioned the two houses.
Now, the Appellant contended that Exhibit AA3 is an acceptance letter to a counter offer made by telephone and not an offer by the 1st Respondent. Where then are the terms of the counter offer made by telephone? Can the Court without a transcribed form of the telephone conversation interpret same and know how to apply the terms? I do not see any exhibit to that regard and therefore the Court below could not have made such a finding that there was before him an offer made by the Appellant on telephone to which Exhibit AA3 can be an acceptance. Exhibit AA3 was the first
21
document that mentioned the two properties, no other document did so. Besides, the said exhibit stipulated conditions which must be fulfilled before the contract can be consummated. I therefore find the argument of the Appellant very strange. I do not see how an acceptance letter can talk of conditions which must be fulfilled in order to consummate a contract. These are features of an offer letter and not an acceptance letter.
I agree with the learned trial judge that the duty of the Court is to interpret the terms of the document which in this case is Exhibit AA3 before the Court and not any other document not before the Court, see KAYDEE VENTURES LTD V. HON MINISTER OF F.C.T. (2010) 7 NWLR (Pt. 1192) 171 wherein the apex Court held as follows:
“It is now settled that in matters of contract, as in the instant case, in which the terms of conditions of contract are embodied in a written document, the parties and the Court will not be allowed to read into the contract extraneous terms on which they reached no agreement as the Court in the circumstances is limited to interpretation and enforcement of the terms of the contract as agreed by the parties
22
thereto.”
This was further emphasized by TOBI, JSC in the case of ADETOUN OLADEJI (NIG) LTD V. NIGERIAN BREWERIES PLC (2007) LPELR – 160 (SC) where he said thus:
“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 also DALEK (NIG) LTD V. OMPADEC (2007) 7 NWLR (PT. 1033) 402; UNION BANK OF NIGERIA LTD v. SAX (NIG) LTD & 2 ORS (1994) 9 SCNJ 1 @ 8 and SEGUN BABATUNDE & ANOR v. BANK OF THE NORTH LTD & ORS (2011) LPELR – 8249 (SC).
The trial Court after finding that Exhibit AA3 is the new contract proceeded to picking the distinguishing features between Exhibit AA2 and Exhibit AA3, principal amongst which is the fact that Exhibit AA2 is made subject to contract while Exhibit AA3 was not made subject to contract showing the seriousness with which the 1st Respondent considered Exhibit AA3. I agree with the trial Court that if the sale of the two houses were intended to be consolidated by Exhibit AA3, then that is the document to interpret in resolving the dispute
23
between the parties.
Having resolved that Exhibit AA3 is an offer letter, to progress on the issue is to answer the mother of all questions in this appeal, whether there was a contract between the parties herein. Definitely the said Exhibit AA3 contained a condition which was timed, it said:
“Kindly arrange to credit our account with the outstanding sum of Two hundred and Fifteen Million, Two hundred and Fifty thousand Naira (N215, 250, 000.00) on or before 27th September 2011 to enable us conclude this transaction.”
It therefore can be safely concluded that there was an offer for a contract by virtue of Exhibit AA3 which made payment a precondition to the consolidation of the contract. The trial judge found that failure to meet up with the time stipulation therein aborted the contract because time was of essence in the contract. Time to effect payment was circumscribed by date, that is to say payment must be effected by the 27th September, 2011. In arriving at the finding that time was of essence, the trial Court relied on the following decisions:
a. BEST (NIG) LTD V. BLACKWOOD HODGE (NIG) LTD (2011) 1 – 2 SC (PT. 1) 55 at 87.
b.
24
TSOKWA OIL MKT CO v. B.O.N LTD (2002) 5 SC (PT.11) 9
c. ODUTOLA V. PAPERSACK (NIG) LTD (2006) 11-12 SC 60
d. BILANTE INTL LTD v. NDIC (2011) 6 – 7 (PT. IV) 11 @ 141
e. FGN v. ZEBRA ENERGY LTD (2002) 72 SC (Pt 77) 136; and
f. KAYDEE VENTURES LTD v. HON. MINISTER OF F.C.T (2010) 2 – 2 SC (Pt 111) 50.
While the Appellants agreed that the propositions in the authorities relied on by the trial Court are correct, it insisted that the trial Court applied them wrongly because it failed to consider that the 1st Respondent waived the issue of payment when it accepted payment beyond the time so stipulated in Exhibit AA3. This argument by the Appellant further buttresses the fact there was indeed a time limit placed on when payment must be done which it breached. Otherwise the issue of waiver cannot arise. Consequently, I also find that time was of essence in the contract.
The Appellant further challenged the trial judge’s finding as follows:
“The claimant failed to comply with the condition precedent in the offer letter Exhibit – AA3, whether as to letter of acceptance, time of payment, the amount stipulated to be paid or the required
25
notification of same to 1st defendant, within the stipulated time. Accordingly therefore no binding contract was created between the parties based on the terms of Exhibit – AA3.”
The simple question is what is the effect of failure to meet up with the time stipulated in a contract? The authorities relied upon by the trial Court earlier listed are instructive, the apex Court has held that failure to comply with time to take a step stipulated in a contract makes the contract not binding and the offer cannot be accepted until after fulfilling the condition, see the case of BEST (NIG) LTD V. BLACKWOOD HODGE (NIG) LTD (supra) where the Apex Court held as follows:
“It is noteworthy that a contract of sale of this nature is guided by the basic rules of contract where a contract is made subject to the fulfillment 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.”
Therefore when the trial Court said there was a contract it was merely a conditional contract as the contract will not come into effect until the terms and conditions stipulated as to
26
the payment by 27th September, 2011 was fulfilled. When the said date came and no payment was made, it meant therefore that the conditional contract failed and there was no contract at all. The proposal failed to materialize since the Appellant failed to concretize the contract by effecting payment. If there was no contract after 27th September, 2011, can there be waiver after the said date in the absence of a contract? At the point of failure to have a binding contract on the two houses, the earlier contract on the first house, 28B for which some payment was made remains the extant contract. The argument of the Appellant is flawed and goes contrary to settled authorities. A conditional contract that has failed or has its terms not fulfilled cannot have any of its terms and conditions waived.
What is a waiver? It was defined in the case of IKECHI OLUE & ORS v. OBI ENENWALI & ORS (1976) LPELR – 2612 (SC) where NASIR, JSC adopted the definition given by LORD ROMILLY M.R. in VYVYAN V. VYVYN, (30, BEAV. 65, AT 74) in these words:
“Waiver or acquiescence, like election, presupposes that the person to be bound is fully cognizant of his rights, and
27
that being so, he neglects to enforce them, or chooses one benefit instead of another, either, but not both, of which he might claim.”
The concept of waiver was also described by the Apex Court in the case of EZE V. OKECHUKWU (2002) 12 S.C. (Pt. II) 103 in the following words:
“It is said that waiver is the intentional or voluntary relinquishment of a known right, or conduct as warrants an inference of the relinquishment of such right. It also arises when one dispenses with the performance of something he is entitled to whether by law or by contract, with the full knowledge of the material fact; or when a person does or forbids to do something, the doing of which is inconsistent with the right, or his intention, to rely or insist upon it. It includes the disinclination to take advantage of some defect, irregularity, or wrong in the action of another through acquiescence, renunciation, repudiation, abandonment or surrender of the right to do so.”
A waiver is dependent on an existing contract and one of the requirements of waiver is that the stipulation as to time in the contract must be clearly spelt out. Essentially, time element should not be
28
compromised. The fact is failure to comply with the time stipulated made the consolidation to fail. If there is no consolidation, it therefore means a return to the position before consolidation which is what the 1st Respondent reverted to and appropriated payment made by the Appellant to the outstanding sum on the House No. 28B. This was the finding of the trial Court and I do not see any confusion therein. A failed contract is a contract and a binding contract is also a contract, both with different effects. The contract failed to materialize or be perfected and therefore it failed to be a binding contract that is enforceable by an order of specific performance. The contract would have been enforceable only if the conditions were observed. See the case of ENEJO V. SANUSI (2008) ALL FWLR (PT. 412) 1084 @ 1088 where the Court held:
“…a party seeking to enforce a contract must show that all the conditions precedent have been fulfilled and that he has either performed, or is ready to perform all the terms which ought to have been performed by him. Again, where time is of the essence or a condition precedent expressly or impliedly stated, and he is guilty
29
of delay in performing his own part of the agreement, then such delay could count against him and might bar his claim for specific performance.”
The parties having reverted to the state or position before Exhibit AA3 came into the scene, the trial Court was right to find that the 1st Respondent’s letter, Exhibit AA6 withdrawing the offer for house number 28D was valid, because there was no contract again in Exhibit AA3 to bind the 1st Respondent or one that the Court could find the 1st Respondent culpable of a breach. I am also of the view that upon the failure of Exhibit AA3, it is only Exhibit AA2 which was partially performed that could validly invoke an order for specific performance. There was part payment towards its purchase.
While I agree with the Appellant that it was not required to write a letter of acceptance, can there be any acceptance better that complying with the date for payment? That is one condition that would have bound the 1st Respondent and made the contract enforceable by a Court of law if the 1st Respondent breached any of its terms or obligation. The authority of WARNER INTERNATIONAL ASSOCIATES NIGERIA LIMITED V. FEDERAL
30
HOUSING AUTHORITY (1993) 6 NWLR (Pt. 298) 148 is not relevant here because the subject here is not a building contract but a sale transaction, the item being houses is irrelevant.
The failure of the Appellant to reject the condition as to payment deadline meant that it was accepted by it. If the argument of the Appellant were accepted, it means upon failure to pay by the 27th September, 2011 the entire transaction for the purchase of the two houses has totally collapsed and the only option would have been to revoke the entire transaction including the first one for which money was already deposited for. It was therefore an act of magnanimity on the part of the 1st Respondent to apply the payment made out of time to conclude the deal in Exhibit AA2 and I agree with the reasoning of the trial Court in this regard.
?Was there waiver? I do not see where and how the 1st Respondent waived its right to the condition precedent to concluding the contract in Exhibit AA3. After the agreement in Exhibit AA3 failed, the 1st Respondent informed the Appellant about the failure of the contract for House No. 28D and applied the sum earlier paid to House No. 28B.,
31
further completing payment from the unilateral payment of N100,000,000.00 into the 1st Respondent’s account through a third party (Exhibit AA8). The contention of the Appellant is therefore untenable and is discountenanced.
In all, I resolve Issues 1, 2 and 3 against the Appellant and in favour of the 1st Respondent.
ISSUE FOUR
“Whether after having held that Exhibit AA3 had consolidated the sales of the properties into a single transaction, the lower Court did not contradict itself and occasion a miscarriage of justice when it held that the 1st respondent rightly unilaterally appropriated so much of the payments received towards the purchase could not be decreed in respect of No. 28D Glover, Road, despite the willingness and undertaking by the appellant to complete the payment for the consolidated sale.”
On this issue the Appellant submitted that the trial Court contradicted itself by holding that the 1st Respondent was right to have unilaterally appropriated payments made by the Appellant towards the purchase of only the property at No. 28B Glover Road instead of both properties. That by the Court justifying the deduction of N10,000,000.00
32
(Ten Million Naira) from the payment of N100,000,000.00 (One Hundred Million Naira) as balance for the sale of the property at No. 28B, the trial Court was emphatically confirming that time was not of the essence. Also submitted that the lower Court was wrong to have held that it is only payment of the full balance that could revive the contract after the Court had earlier said that the 1st Respondent was entitled to revoke the entire transaction due to the default. The Appellant submitted that in the absence of any legal prescription, the 1st Respondent cannot unilaterally appropriate monies paid by the Appellant to only one part of the consolidated contract. Moreover, it stated that appropriation cannot arise at the option of a creditor where a debtor in making payment already appropriates the payment to a specific debt obligation and that by virtue of Exhibit AA3, the contract for the sale of the two properties is an inseparable contract.
The 1st Respondent was however of the opinion that there was no contradiction or error of law in the various findings of the trial Court. That since the Appellant did not meet the conditions stipulated, the withdrawal of
33
the offer by the 1st Respondent was warranted and the ensuing contract became a still birth. Thus, it submitted that there cannot be a breach of contract, referred to BEST (NIG) LTD V BLACKWOOD HELGE LTD. (SUPRA). That acceptance must not only be intended but must be communicated. Furthermore, the 1st Respondent submitted that since the initial transaction on property 28B was almost being consummated, it was only prudent of them to recoup the balance to conclude the transaction while withdrawing the offer for property 28D. It finally concluded that the Appellant’s claim for specific performance cannot succeed and urged the Court to disallow the appeal.
RESOLUTION:
The conditions for decreeing specific performance was stated under issues 1, 2 and 3 above. Principally, it can only be decreed when the party seeking for it is not in breach as in this case. Since there was a breach of a fundamental term of the agreement that would have consummated the contract, specific performance could not have been ordered as found by the trial Court and which I also agree.
On whether the trial Court did not contradict itself when it held that the 1st Respondent
34
could appropriate the payment made after the consolidated sale failed, clearly, the Appellant is changing the character of its claim. The fact remains that the alleged contract in Exhibit M3 failed. The alleged appropriation is with regards to Exhibit AA2 and not Exhibit AA3 which is the basis of the claim before the trial Court. The 1st Respondent was therefore right to make such appropriation based on Exhibit AA2. Generally, the principle is that he who comes to equity must come with clean hands. The Appellant is seeking equity over its failure to meet up with time lines and turning round to frown at the 1st Respondent’s failure to respond to the payment made after its failure to consummate the contract. The option to appropriate was to the advantage of the Appellant as the Appellant could not have elected to pay for a property under a contract which no longer existed. The only existing debt is the one under Exhibit AA2 and therefore the principle of election is not available with only one debt in existence. There can be no choice in a single debt. The authorities cited by the Appellant are not relevant here.
?I also resolve issue four against the
35
Appellant.
ISSUE FIVE
“Whether the lower Court was wrong and acted without jurisdiction in holding that 1st Respondent could resile from its contract to sell house number 28B, Glover Road, Ikoyi to the Appellant and that the 2nd Respondent can register any interest, other than the interest of the Appellant, as may be presented to it by the Respondent.”
Here, the Appellant’s grouse with the decision of the lower Court when it held that the 1st Respondent could resile from the contract upon default is that, none of the parties prayed for this order. He submitted that a Court of law should not grant a relief which has not been prayed for. The Appellant further submitted that it was wrong for the Court to hold that the 2nd Respondent can register any interest as may be presented to it by the 1st Respondent in respect of the same 28B, referred toJATAU V. MAILAFIYU (1998) 1 NWLR (PT 535) 682, THE NIGERIAN AIR FORCE V. WING COMMANDER T.I.A SHEKETE (2002) 12 NWLR (PT 798) 129. More so, the Appellant was of the opinion that being a consolidated contract, the grant of one aspect of the prayer with respect to 28B Glover Road, automatically leads to
36
granting the other part and the Court ought not to have denied the other having found that the contract was for both, ODIASE v. AUCHI POLYTECHNIC AUCHI (1998) 4 NWLR (PT 546) 477, BARIGHA V. PDP (2013) 6 NWLR (PT 1349) 108.
On the other hand, it was submitted by the 1st Respondent that the issue of whether the 2nd Respondent can register any interest put forward to it by the 1st Respondent was tabled before the trial Court and once determined, the cCurt is entitled to make pronouncement on it.
RESOLUTION:
The foundation of the complaint here is the part of the trial Court’s judgment in the following terms:
“It is trite that even where time for completion of a contract is not stipulated, contracts being matters of serious business relationship must be completed or performed within reasonable time. The claimant did not do so in the light of peculiar facts of this case, and the 1st Defendant was therefore perfectly justified in its withdrawal of the offer on No. 28D only, when it could have done so in respect of both wings since in any case, Claimant had breached a fundamental term of the offer in Exhibit AA3 when it did not pay the full
37
outstanding balance of N215, 250, 000.00 as at 27th September, 2011.”
The trial Court then proceeded to hold that the 2nd Respondent shall be at liberty to register any interest as may be presented to it by the 1st Respondent in respect of No. 288 Glover Road, Ikoyi, Lagos.
The Appellant contends that the Court had no jurisdiction to make such an order. Looking at the reliefs sought by the Appellant at the trial Court, one of it states thus:
“An order directing the 1st Respondent to execute a deed of assignment in respect of the two units of property in favour of the Claimant and any other instrument necessary to transfer the titles therein to the Claimant and to take all other steps to perfect such titles in the name of the claimant on payment of the balance stated in (III) above.”
Therefore the issue of the order on transfer and registration had a solid foundation in the claim and reliefs sought and cannot be considered an order made without jurisdiction. The order was directed at the 2nd Respondent who was also before trial Court as 2nd Defendant. The question to ask is why was it joined? Since the Appellant is
38
questioning the completion of payment in respect of the one that the 1st Respondent gratuitously accepted its complete payment, the only reasonable order to make is the one made by the trial judge. In any case the order is one the Court could make as a consequential order and therefore the issue of jurisdiction cannot arise. The manner the order was couched is for the 1st Respondent to present who ever has paid for that house to be the new owner. It could be the Appellant and also any other. This is because the Appellant can also opt out of the sale. I resolve this issue against the Appellant and in favour of the 1st Respondent.
Having resolved all the issues for determination in this appeal against the Appellant, this appeal fails. It is unmeritorious and consequently dismissed for lacking in merit. The judgment of HON. JUSTICE K. O. ALOGBA delivered on the 19th December, 2012 is hereby affirmed.
Cost of N50, 000.00 to the 1st Respondent.
Other Citations: (2016)LCN/8779(CA)
