Rebold Industries Limited V Magreola Ladipo & Co (2007)
LawGlobal-Hub Lead Judgment Report
MONICA BOLNA’AN DONGBAN-MENSEM, J.C.A. JP
On the 26th day of November, 1998, the Appellant filed a motion before the Lagos State High Court challenging the jurisdiction of the Court on the grounds of the none locus standi of the Respondent. The High Court Coram A.R.A Salid J dismissed the motion in a Ruling pronounced on the 21st day of February 2000. Aggrieved by the said Ruling, the Appellant filed this appeal on the 23rd day of February 2000. Additional grounds of Appeal were filed on the 14th day of May 2002 with the leave of this court. A total of three grounds of appeal were filed.
The brief facts of the case which metaphase into this appeal are recounted anon; – sometimes in 1995, the services of the Respondent as a firm of Solicitors, were retained by the Mandilas Group Limited for the preparation and engrossment of a deed of sublease between the Mandilas Group Limited and Rebold Industries Limited (being the Appellants). The sublease was in respect of the property known and situate at 7A Creek Road, Apapa, Lagos.
It was a term of the said agreement that the Appellant would be responsible for the fees legal incurred in preparing the Deed of Lease. The Appellant failed to make good the said terms of the agreement.
On the 14th day of May 1997, the Respondent took out a writ of summons endorsed with the statement of claim against the Appellant for the recovery of the said fees incurred in the preparation and engrossment of the deed.
The Appellant having failed to respond to the summons of the Respondent, a default Judgment was entered for the Respondent on the 19th day of June 1998.
The Appellant has come before this Court urging us to set aside the decision of the trial Court and strike out the suit of the Respondent. These reliefs are premised on the reasons that: –
(1) The Respondent not being a party to the agreement cannot enforce or purport to enforce same;
(2) That the decision in Shuwa case relied upon by the trial Court was obiter and by the principle of stare decision, cannot stand in the face of the Supreme Court’s decision in Ikpeazu’s case;
(3) That the decision in Shuwa’s case relied upon by the trial Court;
(4) That the Appellant’s case being challenge to the jurisdiction of the trial court in the line with the case of NDIC v CBN, the Appellant need not have filed a statement of defense before raising the issue of jurisdiction.
PRELIMINARY OBJECTION
The learned Counsel for the Respondent appearing in person raised a preliminary objection which was incorporated in his brief of argument. Two grounds of objection were cited to wit:-
(1) That ground one of the grounds of appeal is incompetent, because there was no such finding by the trial Court. The said ground is reproduced
for the ease of reference:-
“The learned trial Judge erred in law when he held that the appellant could enforce the lease agreement in which he was not a party because it was made for his benefit.”
The learned Counsel submits that the trial Court did not make such a finding and same would not therefore be attacked in an appeal. The said ground and its particulars are therefore incompetent and should be struck out. The learned Counsel relies on the following cases:-
Gbadamosi v Bello (1985) 2SC 168 at 174 Shuaibu v Nigeria-Arab Bank Ltd (1998) 4 SCNJ 109 at 127. Mercantile Bank of Nigeria PLC v Linus Nwobodo (2005) 7SC Pt 111pt 1 at 3-4 Okon v The State (1995) 1 SCNJ 174 at 178 Chief Agbaka v Chief Amadi (1998) 7SC Pt 11 18 at 22.
The learned Counsel to the Appellant filed a reply brief in which he responded to the issues raised in the preliminary objection.
On the competence of ground one of the grounds of Appeal, the learned Counsel cited the question posed by the learned trial Judge as the premise upon which the said ground of appeal is hitched. The question, which was asked and answered by the learned trial Judge in the Judgment is.
“Whether it can be rightly said that the Plaintiff/Respondent lacked locus standi to institute this action?” (pages 76-79 of the records for this appeal referred.).
I am of the humble opinion that this issue is a matter of semantics. The learned trial Judge did pose the question and answered it in the affirmative to the effect that “Our Courts also recognise the fact that there are very many exceptions to the general rule and our case law is replete with many authorities recognizing exceptions to the general rule on privity of contract.”
I accordingly hold that ground one of the grounds of appeal arose from the decision of the trial Court and it is competent.
The second issue raised by the learned Respondent is that of the competence of the brief of the Appellant which he states was filed out of time and without the leave of Court.
In response, the learned Counsel to the Appellant relied on the Pratice Direction No 1 of 1988 issued by the then President of this Court, the Hon. justice Mamman Nasir. The said pratice directives is published in (1988) 4 NWLR Pt 87 p 256. By the Practice Directives, time does not run for the filling of briefs when the Court is on vacation. To buttress this submission the learned Counsel cites the following cases:-
- Auto Import Export v J.A.A Adebayo and ors (2002) 18 NWLR pt 799 P 554 at 579, and
- Afribank Nigeria PLC v Akwara (2006 All FWLR pt. 304 P 401 At 430, 429-430.
The learned Counsel urges us to dismiss the preliminary objection as lacking merit.
Part of the submissions of the learned Counsel/Respondent in the preliminary objection raised adequately answers this issue and it is hereby reproduced for the ease of reference: –
“The parties were notified that the Record was ready for transmission to this Honourable Court on 2nd August 2005. The Appellant in accordance with Order 6 Rule 2 of the Court of Appeal (Amendment) Rules 1984 had 60 days from 2nd of August 2005 to file the appellant’s Brief. The 60 days expired on 4th October, 2005 as the 1st 2nd and 3rd October, 2005 were non working days or public holidays. The Appellant’s brief was not filed until 13th October, 2005 i.e. 9 days after the expiration of the time allowed by the rules. There is no application before you Lordships by the appellant for an extension of time within which to file the appellant’s brief.” (Refer page 2 Respondent’s brief)
It is a known fact that the month of August is the vacation month of this Court.
The preliminary objection is frivolous and is hereby dismissed.
The Appellant formulated three issues for determination which issues are shown to flow from the grounds of appeal filed. These shall be taken seriatim. The Respondent formulated two issues similar to issues one and three of the Appellant.
I am of the opinion that issues one and two of the Appellant can be taken together and I shall so combine them in this Judgment, which is written on the Appellant’s issues.
Issues One and Two
(i) Whether the lower Court was right in deciding that the Respondent had the locus standi to sue in respect of an agreement between Mandilas Group Limited and the Appellant to which the Respondent was not a party.
(ii) Whether it was right for the lower Court having regard to the time honored doctrine of stare decisis, to have placed heavy reliance on the decision of the Court of Appeal in Shuwa v. Chad Basin Development Authority (1991) 7 NWLR (pt. 205) 550 in the light of the to decision of the Supreme Court in lkpeazu v. African Continental Bank Ltd. (1965(1 NMLR 374 .
It is the submission of the learned Counsel to the Appellant that the Respondent not being a party to the transaction, lacks the locus standi to take up a suit on the transaction. Upon the authority of the case of Makwo v. Nwukar (2001) FWLR pt. 63 pl (at) 14, and Thomas v. Olufosoye (1986) NWLR Pt. 18 p.669, learned Counsel contends that the question of Locus Standi or title to sue denote the existence of a right of an individual or a group of individuals to have a Court enter upon an adjudication of an issue brought before the Court by proceedings instigated by the individual or group. Also are the common law principles which state that a contract does not confer rights nor impose obligations on strangers to it. Upon the authority of the Supreme Court in the case of lkpeazu v. African Continental Bank (Ltd) (1965) 1 NWLR 374 at 379, Counsel submits that the Respondent who is not a party to the agreement, cmmot enforce same even if it was made by deed and for his benefit .Counsel also relies on the case of Makwo v. Nwukar (2001) FWLR pt 63p 1 at 14 in which the Supreme Court held as follows:-
“The fact that a person who is a stranger to the consideration of a contract stands in such near relationship to the party from whom the consideration proceed that he may be considered a party to the consideration does not entitle him to sue or be sued upon the contract.”
Other cases relied on are:-
(1). Tweddle v Atkihson (1861) IB & S 303,
(2). Dunlop Pneumatic Tyre Co.Ltd v. Selfridge (915) AC 843,
(3). Union Beverages Ltd. V. Pepsi Cola Int. Ltd (1994) 3 NWLR (pt. 330) pl At 16.
It was further the submission of the learned Counsel that the learned trial Judge breached the principles of stare decisis when it ignored the decision of the Supreme Court in Ikpeazu’s case in preference for that of
this Court in the case of Shuwa v. Chad Basin Development Authority (1991) 7 NWLR Pt. 205 p. 550. It is the opinion of the learned Counsel that the decision of this Court in Shuwa’s case supra was stated as an exception to the general rule and that case re affirmed the principles in Ikpeazu’s case that a stranger has no locus standi in a contractual agreement.
The learned Counsel for the Appellant urges us to hold that the decision of the Supreme Court in Ikpeazu was the binding decision on the trial Court.
The Respondent’s learned Counsel concedes to the authority of the decision in Ikpeazu’s case. He however submits that the Supreme Court did however recognize exceptions to the doctrine. (Refer per Ademola CJN of blessed memory, in Chuba Ikpeazu v. African Continental Bank (1965) NMLR p 374 at 377). The learned Counsel to the Respondent contends that the Respondent was party by representation to the substance and had sufficient interest to entitle him to sue and enforce payment of solicitor’s fees. To support this proposition, the learned Counsel quotes extensively from the case of Beswick v Beswick (1967) 2 All ER 1197 at pgs 1201, 1205 per Lord Reid, 1205 per Lord Hodson, 1208 per Lord Guest and at 1212 per Lord Pearse. The learned Counsel purports that the decision in Beswick v. Beswick (supra) re-enforces the view of Lord Denning as expressed in Smith and Snipes Hall Farm Ltd v. River Douglas Catchment Board (1949) 2 All EA 179 at 188). Therein, Lord Denning held as follows:-
“The principle (of privity of contract) is not nearly so fundamental as it is sometimes supposed to be. It did not become rooted law until the year 1861 (Tweddle v Alkinson) and reached its full growth in 1915
(Dunlop Pneumatic Tyre Co. Ltd v. Selfridge & Co. Ltd). It has never been entirely to supplant another principle whose roots go much deeper. I mean the principle that a man who makes a deliberate promise which is intended to be binding, that is to say, under a seal or for good consideration, must keep his promise, and the Court will hold him to it, not only at the suit of the party who gave the consideration, but also at the suit of one who was not a party to the contract, provided that it was made for his benefit and that he has a sufficient interest to entitle him to enforce it, subject always, of course, to any defenses that may be open on the merits”.
The learned Counsel urges it upon us, not to allow the Appellant to set up a porous or nebulous defense of the respondent not being a party to the contract to escape liability of his obligation to pay for professional services from which it had taken considerable benefit. To substantiate this proposition, the learned Counsel culls in aid, the dictum of Pats-Acholonu JCA as he then was (of blessed memory), in NBN v. Sarol W.A Ltd (1994) 3 NWLR pt. 333 p.435 at 468 where his Lordship held as follows:-
“it will indeed be a strange and lop-sided and truncated argument for a party to suddenly seek to back out from a state of affair he has helped cause to exist and by which the other part has suffered some detriment on the premise that it was not ab initio a party to such a contract” (see also Akin Adejumo v. Ajani Yusuf Ayantegbe (1989) 6SC Pt 1 p 76 at 84, per Nnaemeka-Agu JSC and Thomas v. Olufosoye (1986) 2SC 325 at 349. ”
The learned Counsel for the Appellant has described as obiter, the decision of this Court, per Okezie JCA in the case of Shuwa v. Chad Basin (supra). A decision is said to be obiter when considered outside the issues distilled by the parties for consideration by the Court. Sometimes, when the writer of the lead judgment does not make a point, it is often dismissed as obiter. In my humble opinion, this is an error that has persisted in our judicial system. The rationale for this view can be explained, where for instance, three justices are required by law to form a quorum in the Court of Appeal, the decision of each one of them concurring, constitutes the decision of the Court. The value to our legal system is that each Judge is able to take a closer look at an aspect of the appeal placed before the Court which may be over looked by the lead writer. The outcome of such industry should not be dismissed as obiter. The collective decisions of the justices expressed individually form the decision of the court. Such constitutive should not be fragment and some describe as obiter.
The decision of Okezie JCA in shuwa (supra) was neither obiter or in conflict with that of the supreme court in Ikpeazu’s case. The facts and circumstance are even more at variance with Ikpaazu’s case and are ruinously so to case of the appellant.
The Apex court had in the case of Owodunni v. Registered Trustees of Celestial church of Christ (2000) 6 SC pt. 111 60 at 82, restated and standi of a complainant/applicant. The special situation in this appeal is that the statue confers the locus standi. Section 16 of the Legal Practitioners Act cap 20 of LFN of 1990- provides as follows:-
“subject to the provision of this act a legal practitioner shal be entitled to recover his charges by action in any court of competent jurisdiction.”
The Appellant has not in anyway controverted the claim of the Respondent that he is the legal practitioner who prepared and engrossed the Deed of sublease in respect of the property in question. Nor has it been denied that the Appellant was the said sublessee. Equally undenied is the Respondent. (Refer to Deed of substance at 17-27 0f the records for this appeal). Theses facts fit squarely with the decision of the supreme Court in Adenuga v. Odumeru (2003) 4 pt. 11 at 10 where the apex court held as follows:-
“locus standi denotes the legal capacity based upon sufficient interest in a subject matter, to institute proceedings in a court of law to pursue certain cause. In order to ascertain whether a plaintiff has locus standi the statement of claim must be seen to disclose a cause of action vested in the plaintiff and also establish the rights and obligations or interests of the plaintiff which have been or are about to be violated, and in respect of which he ought to be heard upon the relief’s he seeks”.
The statement of claim of the Respondent filed at the trial Court (pg 2 of the records) amply demonstrates the interest of the Respondent to sue and the Deed of the sublease discloses the obligation of the Appellant to the Respondent. The Respondent is therefore competently vested with the locus standi.
ISSUE THREE
(iii) “Whether the Appellant was required to file a Statement of Defense before raising the issue of jurisdiction.”
The learned Counsel has in his brief for the Appellant, stated that the challenge to the Court’s jurisdiction was premised solely on the perceived lack of locus standi by the Respondent. A decision of this Court to the effect that the Respondent has the locus standi should ordinarily put paid to this appeal. However, jurisdiction, being a fundamental judicial principle, is not easily dismissed with a wave of the hand. The Appellant has also built other issues into the locus standi “saga” calling into question, the decision of the trial Court.
The learned Counsel submits that the learned trial Judge misconceived the essence of the Appellant’s application before the Court. Counsel posits that the Appellant’s application before the trial Court was an unequivocal attack on the jurisdiction of the Court on the grounds that the Respondent as Plaintiff lacked the locus standi to sue. The learned trial Judge erred, maintains the learned Counsel, in holding that Appellant failed to file a statement of defense before raising the issue of jurisdiction.
To buttress the argument in support of this issue, the learned Counsel relied on the following cases:
- Owners/of M/V Baco Liner v. Emmanuel Adeniyi (1993) 2 NWLR pt. 274 p. 195.
- Nigeria Deposit Insurance Corporation v. Central Bank of Nigeria (2002) 7 NWLR pt 766p. 272 at 296.
In answer to this issue, the learned Counsel to the Respondent cites the provisions of order 11 of the High Court of Lagos State, (Civil Procedure) Rules of 1994 which provides that a summary judgment is entered against a Defendant who has no defense or who discloses a sham defense. It is further the submission of the learned Counsel that the Writ of Summons and the statement of claim filed by the Respondent did not contain ex-facie, any vitiating element or feature that would take away the jurisdiction of the Court. The learned trial Judge found, submits the learned Counsel, that no statement of defense had been filed or exhibited. The learned Judge was accordingly right in holding that a summary judgment obtained by plain and uncontroverted facts could not be set aside on a misconceived ground of lack of jurisdiction. Further, the Appellant gave no reason for their failure to attend the proceedings at the trial Court in spite of the fact of service on them of the writ and statement of claim. Cited in support of this argument are the following cases:-
- Nishizawa Ltd v. Jeltwani (1984) 12 SC 234 at 257-8;
- Sanni v. Brothers (Nig) Ltd c. Cotia Commercio Exportaco (2000) 6 SC Pt. 111 43 at 53, 58
- NDIC v. CRN (2002) 3 SC 1 at 8-9.
The learned Counsel also relied on the unlimited jurisdiction of the High Court as provided by section 6 (6) (b) and 236 of the constitution of the Federal Republic of Nigeria of 1979 in force at the time of filling the suit. Also cited is the dictum of Uwais JSC in Odulate v. Awosanya (2000) 1SC, 107 at 115. The High Court of Lagos State therefore had jurisdiction, submits the learned Counsel to the Respondent. Contrary to the submission of the learned Counsel for the Appellant, the learned trial Judge did not dismiss the motion of the Appellant because he had not filed a statement of defense. The learned trial Judge was referring to the requirement of an application to set aside a default Judgment. It is the learned Counsel who has misconceived the decision of the learned trial Judge. For purposes of emphasis and the ease of reference, the relevant portion of the Ruling is hereby reproduced (from page 79 of the records of this appeal).
“… The purpose of the procedure for summary judgment is to enable the plaintiff to obtain summary judgment without trial where his case is patently clear and unassailable. Although it is not designed to shut out a defendant who can show that there is a triable issue. In the instant case no statement of defense has been filed or exhibited.
A summary judgment obtained in a patently clear and unassailable case will not be set aside on a misconceived ground of lack of jurisdiction as contained in the present defendant’s motion.
In the result the defendant’s motion fails and it is hereby dismissed…”
The learned trial Judge merely pierced the veil of jurisdiction by applying the relevant law to the facts of the case before him. I am unable to fault the learned trial Judge on this. Having been served with the Writ and the Summons, the Appellant was thereby obligated to respond one way or the other. He failed to do so.
When the Appellant eventually filed the motion to set aside the Judgment, the learned trial Judge observed that “Fifteen of the paragraphs of the affidavit in support of the motion dwelt on reasons why the Court should grant an order extending the time within which the defendant could apply to set aside the judgment of the Court dated the 19th day of June, 1998…
Although paragraph 15 of the affidavit in support… states that the Defendant / Applicant has a ‘defense’ to the action which the Defendant/Applicant will put forward forcefully if leave of the Court to do so is obtained, the proposed or intended statement of defense was not exhibited. It would appear therefore that the second and the third reliefs sought by the defendant…that is an order setting aside the judgment dated the 19th June 1998 and an order striking out the suit for want of jurisdiction, both have a common ground which is paragraph 16 of the affidavit in support of the… motion”. Paragraph 16 is reproduced for ease of reference: –
“The defendant/applicant did not at any time enter into a contractual relationship with the plaintiff/applicant Attached hereto and marked Exhibit A2 is a copy of the lease Agreement dated April 1996 between Mandilas Group Limited and the defendant/Applicant.”
It is obvious from the portion of the Ruling of the trial Court reproduced (supra) that no reason whatsoever was advanced in support of the application to set aside the judgment. Some learned Counsel continue to fall into this error of failing to arm themselves with a statement of an intention to defend should their ground of jurisdiction fail. This is a typical example of such a situation.
The learned Counsel armed himself rather, with Exhibit A2, a copy of the lease agreement dated 4th April, 1996. The learned trial Judge found that clause T of the said exhibit A2 constitutes a covenant made by the defendant /applicant as (Lessee) to take over the liability of the Leasor to the Plaintiff, i.e. the payment of the legal fees.
Equipped with these uncontroverted facts, the learned trial Judge found guidance in the words of Pats-Acholonu (of blessed memory) JCA, as he then was, in the case of NBN Ltd v. Sarol W.A. Ltd (Supra) 3 pg. 43s5 at 48.
His Lordship held as follows:-
“It will indeed be a strange and lopsided and truncated argument for a party to suddenly seek to back out from a state of affair he has helped to cause to exist… ”
The point here is the unique position of the Respondent in the agreement, annexed as Exhibit A2 before the trial Court. Clause T therein confers not a benefit but remuneration for consideration already executed, a service already rendered. It would be different if the Respondent sought to enforce the agreement because his benefit lies in the fact of the enforcement. Again, the agreement has been executed and both parties have reaped the benefit of the Deed. Here in lies the distinction between this appeal and that of lkpeazu’s (supra). The Respondent has a locus standi which the trial Court competently recognized and acted upon.
I hereby affirm the decision of the trial Court. This appeal is unmeritorious and is hereby dismissed.
A cost of N10, 000.00 is awarded to the Respondent against the Appellant.
Other Citations: (2007)LCN/2375(CA)
