Sunday Adisa Oduntan Vs General Oil Ltd. (1995)
LAWGLOBAL HUB Lead Judgment Report
OGWUEGBU, J.S.C.
The plaintiff in the application for interlocutory injunction which led to this appeal brought an action against the defendant in the Lagos High Court claiming the following reliefs:-
(a) A declaration that the plaintiff is entitled to quiet possession and enjoyment of the land situate, lying and being at Onisigidi village near Agege along Lagos-Abeokuta Express-Way in Ikeja Division of Lagos State which is more particularly described and delineated on the Plan No. RO/LA 750 dated 27th March, 1973 for a period of 50 years commencing from 30th June, 1983 under a valid and enforceable contract between the plaintiff and the defendant.
(b) A declaration that the defendant is not entitled in law to terminate the said contract before the due date.
(c) An order of perpetual injunction restraining the defendant by himself, his servants, workmen, privies or agents or otherwise howsoever from trespassing on the said land or disturbing or otherwise interfering with the plaintiff’s quiet enjoyment thereof or from carrying on the business of purchasing, storing or selling petroleum products thereon without the authority and consent of the plaintiff.”
The plaintiff later filed a motion on notice for an order of interlocutory injunction restraining the defendant from trespassing or otherwise interfering with the plaintiff’s quiet enjoyment of the land or from carrying on the business of purchasing, storing or selling petroleum products thereon. The application was granted. The defendant appealed against the ruling and having lost the appeal in the court below, has further appealed to this court.
From the four grounds of appeal filed, he formulated eight issues for determination. In effect two issues were formulated from one ground of appeal. Issues 2, 4, 6 and 7 are based on complaints against the decision of the learned trial Judge. By formulating those issues the learned counsel for the appellant appeared to have forgotten that this is an appeal against the decision of the Court of Appeal. Since issues 1,3,5 and 8 will dispose of the appeal, I will therefore confine myself to those issues which rightly complain against the decision of the court below. Issues 2,4, 6 and 7 are incompetent and are hereby struck out. The respondent on the other hand did not file any brief of argument. He was neither present at the hearing nor represented by counsel.
The facts giving rise to this application can be summarised as follows: The plaintiff and the defendant entered into an agreement whereby the defendant leased a parcel of land at Onisigidi Village near Agege along Lagos-Abeokuta Expressway in Ikeja to the plaintiff for a period of fifty years commencing from 30th June, 1983 at a yearly rent of N2,500.00. The defendant let the plaintiff into possession of the land upon receipt by him of the sum of N25,000.00 being rent for the first ten years of the lease granted. The plaintiff paid another sum of N50,000.00 to the defendant for construction works already executed on the land by the defendant. The plaintiff erected a petrol service station on the land with his own money.
The plaintiff agreed with the defendant to appoint the defendant the operator of the Petrol Service Station and for the defendant to manage the same as a dealer. The defendant paid the sum of N50,000.00 which the plaintiff paid into the defendant’s Dealership Deposit Account for the supply of petroleum products.
The defendant through his solicitors wrote to the plaintiff determining the said dealership agreement on 15/4/87 and asked the plaintiff to remove its signs and pumps lawfully placed on the land including the plaintiff’s other machinery and equipment thereon.
The defendant in his counter-affidavit deposed that sometime in 1983, he rented the petrol station to the plaintiff at a yearly rent of N2,500.00 and that the plaintiff paid the sum of N25,000.00 as rent for ten years; that he has been in possession of the property selling petroleum products from the plaintiff on an owner/dealer basis.
He further averred that all that the plaintiff contributed were logo, pumps and underground tank; that there was irregular supply of petroleum products by the plaintiff and this adversely affected his business. As there was no improvement in the supply, he instructed his solicitors to write a letter of protest. When there was no improvement in the supply of petroleum products, he procured a license from Nigerian National Petroleum Corporation (NNPC.) for storage and sale of petroleum products through National Oil and Chemical Marketing Company Ltd.
Before he started receiving supplies from the National Oil and Chemical Marketing Co. Ltd., he instructed his solicitors to write to the plaintiff terminating the dealership agreement and forwarded a certified cheque for the sum of N 15,000.00 being the unused rent paid by the plaintiff. The solicitors carried out the instructions.
He deposed that he had been receiving constant and regular supply of petroleum products from the National Oil and Chemical Marketing Co. Ltd. since 27/4/87 and 12/5/87, the plaintiff and his agents took over the running of the petrol station and started selling the petroleum products purchased from the National Oil and Chemical Marketing Co. Ltd.
He denied that the plaintiff built the petrol station and that apart from the rent of N25,000.00 part of which he had refunded, the plaintiff did not give any other money to him. The above are the facts giving rise to the substantive action, which is yet to be determined, and the application for interlocutory injunction which led to this appeal.
I think the two main issues calling for determination in this appeal are:-
(a) Whether on the affidavit evidence, the court below was right in affirming the decision of the learned trial Judge that the plaintiff made out a case for the grant of the order pending the determination of the substantive suit.
(b) Whether the court below was right in affirming the decision of the trial court which did not extract an undertaking as to damages from the plaintiff.
The plaintiff is the respondent in this court as well as in the court below. The defendant has remained the appellant both in the court below and in this court. In considering the first issue. The trial court made the following findings before granting the application:
( 1 ) That the respondent has sufficient interest either as a lessee or as somebody with special interest on the land which can be protected by way of interlocutory injunction.
(2) That there was a serious question to be tried at the hearing, that is, . whether the respondent has a leasehold interest in the land and whether the appellant unilaterally terminated that interest, before its expiration.
(3) That the plaintiff would suffer irreparable damage if the order was refused because the plaintiff would lose goodwill and reputation in the area where it was operating the petrol station whereas the appellant if he wins could easily be compensated in damages.
The court below agreed that the respondent has interest on the land worthy of protection by way of injunction whether such interest is leasehold or a licence to be on the land. It said:
“The learned Judge is right in my view in the resolution of this problem in favour of the respondent. If the injunction had not been granted, irreparable damage would have been done to the respondent’s business, and any goodwill he hopes to build for the sale . of his products would be lost.”
This conclusion is justified by the facts disclosed in the affidavit in support of the application and the counter-affidavit of the appellant.
It was submitted in the appellant’s brief that the balance of convenience was in his favour and he stood to suffer irreparable injury which included the loss of livelihood and only source of income because in addition to the loss of his landed property, the appellant had petroleum products on the land at the time the order was made on 6/5/87.
It was further argued that a corporation should only be redressed or compensated for loss of revenue as opposed to intangible loss such as loss of goodwill or reputation. The case of Duyile & Or v Ogunbayo (1988) 1 NWLR (Pt. 72) 601 was cited.
It was also urged on behalf of the appellant that no order of interlocutory injunction should be made unless the applicant gives a satisfactory undertaking is to damages and where a court of first instance failed to do so, an appellate court ought normally to discharge the order. In support of this argument, reference was made to the case of Kotoye v. CBN. (1989) 1 NWLR (Pt. 98) 419 at 456 and 474. It was also contended that the court below was in error not to have discharged the order made by the trial court.
The appellant conceded that there is a serious question to be tried but maintained that from the facts, the respondent was not entitled to the relief he sought and on this ground the order should not have been made
It was also submitted that there was conflict in the affidavit evidence before the court and this should have been resolved by calling oral evidence. Counsel referred to the cases of Akinsete v Akindutire (1966) I All NLR 147 and Eboh v. Oki(1974) I S.C. 179 at 189-190.
I have considered the above submissions. The most usual basis for the grant of an interlocutory injunction is the need to protect the applicant by preserving the circumstances which are found to exist at the time of his application until the rights of the parties are able to be finally established by proper procedures.
This is weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his legal rights from which he could not be adequately compensated in damages if in the end the substantive case is resolved in his favour.
Since the respondent had established that there is a substantial issue to be tried at the hearing, it is not necessary to determine his legal right to the claim since at that stage there can be no such determination, because the case is yet to be tried on the merits. It is therefore erroneous as contended by the appellant that the respondent should show from the facts that he is entitled to the claim. See Egbe v. Onogun (1972) All NLR 95 (Reprint); Kufeji v. Kogbe (1961) All NLR 113 (Reprint) and Obeya Memorial Specialist Hospital v. Attorney General of the Federation & Or. (1987) 3 NWLR (Pt. 60) 325.
When it was established before the court as in this case that there was a serious question to be tried, the burden of proof on the respondent was discharged. The respondent is not required in an application for interlocutory injunction to show indefeasible rights to the reliefs sought. This is not the stage when the question of the ownership of the petrol service station, its land and buildings are to be determined.
The next question is the balance of convenience. Who will lose more if the status quo is restored and maintained till the final determination of the suit? From the facts disclosed in the affidavit and counter-affidavit, I agree with the courts below that the respondent would lose more if the application was refused. There was sufficient risk that the respondent’s commercial interest would be destroyed along with the goodwill attaching to that interest. The appellant must not be encouraged to believe that he may do a wrongful act on the payment of a given sum of money as damages if the application was refused. The appellant has nothing to lose and would not suffer any damage as he himself terminated the dealership agreement. In my view, where there is a clear breach of the respondent’s right by the unilateral termination of their agreement, the question of balance of convenience should not arise. The termination of the contract was a deliberate act of the appellant.
The court when considering an application for interlocutory injunction of this nature should not try to resolve conflicts of evidence on affidavits as to facts on which the claims of either party may ultimately depend or decide difficult questions of law which call for detailed argument and consideration. A judge in determining such application must be careful and ensure that he does not in the determination of the application, determine the same issues that would arise for determination in the substantive suit. See Williams v. Dawodu (1988) 4 NWLR (Pt. 87) 189; Akapo v. Hakeem Habeeb & Ors(1992) 6 NWLR (Pt. 247) 266; Obeya Memorial Hospital v. Attorney-General of the Federation & Or. supra and Egbe v. Onogun (1972) 1 All NLR 95 (Reprint).
In deciding upon the course which most accords with the balance of justice, the court on an application for interlocutory injunction makes use of its power to require undertakings of the plaintiff himself or the defendant as the case may be, the purpose being to enable the court if it thinks that the justice of the case requires it to compensate a person who has been temporarily restrained should it turn out, that he was needlessly enjoined, for damages which he has suffered meanwhile.(the italics is mine for emphasis only). It is not in every case that an undertaking as to damages ought to be given.
In the appeal before us, I am of the view that an undertaking as to damages will not be appropriate in the circumstances of this case. The appellant is the owner of the land and the respondent is only a lessee. In any case. what undertaking does he require where by his action, he purported to terminate the dealership agreement?
Finally, the court below made pronouncements on the merits or otherwise of the case. It ought not have done so and this court had frowned at such comments in many of its decisions. That notwithstanding, the comments did not touch on the merits of the application.
It is a wrong proposition of the law that a corporate body such as the respondent can only he redressed or compensated for loss of revenue as opposed to intangible losses of goodwill and reputation. A company can sue for defamation. It has reputation and goodwill which can he protected. An injury to its reputation can lead to loss of its goodwill. The courts will in appropriate cases protect the reputation and goodwill of a company by award of damages and injunction While it is true that a company being an artificial person is incapable of having natural grief and distress, this does not mean the same thing as its reputation in the way of its trade and business. The case of Duyile v Ogunbayo & sons Ltd. (supra) cited by learned counsel for the appellant did not decide that a corporation has no reputation which can be protected.
I hold that the order granting the injunction was made upon a proper exercise of discretion and the court below acted correctly in affirming it. The appeal is accordingly dismissed. The decision of the court below is hereby affirmed. I make no order as to costs.
Other Citation: (1995) LCN/2654(SC)
