United Bank For Africa Ltd. V. Tejumola & Sons Ltd. (1988)
LawGlobal-Hub Lead Judgment Report
G. O. AGBAJE, J.S.C.
The Plaintiff Company, Tejumola & Sons Ltd., sued the Defendant Bank, United Bank for Africa Ltd. in a Lagos High Court claiming against it as per the indorsement on its Writ of Summons dated 3rd August, 1983 as follows:-
“The Plaintiff’s claim against the Defendant is for the sum of N2,000,000.00 (Two million Naira) being special and general damages for the breach of contract entered into between the Plaintiff and the Defendant in or about April 1982 in Lagos, the breach having occurred also in Lagos in or about October, 1982.”
Pleadings were ordered, filed and delivered. The case proceeded to trial before Ayorinde J. The contract alleged by the Plaintiff as existing between it and the Defendant Bank and in respect of which damages were being claimed by the Plaintiff from the Defendant for its breach by the latter was pleaded as follows in paragraphs 9, 10, 11 and 12 of the Plaintiff’s Statement of Claim:-
“9. Thereafter, negotiations as regards the term of the proposed lease of the said property went on between the parties until April, 1982 when the Defendant by its letter dated 19th April, 1982 offered to rent the said property from the Plaintiff subject otherwise to the terms and conditions contained in the said letter for a term of 15 years, the Defendant reserving the right to break the said term at the end of the 5th and of the 10th years of the said term.
- The rent offered was N215 per sq. meter (or N20 per sq. ft.) per annum payable 5 years in advance subject to a revision every 5 years.
- The area of the property agreed to be rented by the Defendant was “Portion of the ground floor (i.e. 900 sq. ft.) and all the four upper floors (i.e. 1,108sq. ft. each) comprising a total floor area of approximately 493,036 sq. metres (5,322 sq. ft.).
- The Plaintiff by its letter dated 19th April, 1982 accepted the Defendant’s offer without any reservations.”
The property to which the alleged contract relates admittedly belongs to the Plaintiff and it is situate at No. 42, Idumagbo Avenue, Lagos, otherwise known as No. 3 Docemo Street, Lagos. The Plaintiff pleaded the negotiations which led up to the contract which according to it was entered into between it and the Defendant Bank. After the contract had been concluded, as pleaded by the Plaintiff, the Plaintiff pleaded in paragraph 13 of its Statement of Claim as follows:-
“13. Thereafter, the Defendant started to give directives to the Plaintiff as to how the Plaintiff should alter the said property to suit the peculiar needs of the Defendant as a banking business office.”
The particulars of the alterations to the said property which the Plaintiff carried out pursuant to the directives of the Defendant in this regard, according to the Plaintiff, were pleaded with adequate particularities in the Plaintiff’s Statement of Claim.
The Defence of the Defendant Bank to the claim by the Plaintiff Company against it was concise and precise and it was contained in paragraphs 5, 6 and 7 of its Statement of Defence which read thus:-
“5. The Defendant admits that it entered into negotiation with the Plaintiff for the grant of a lease of the premises referred to in the Statement of Claim herein, and that the initial rent and the length of the term had been agreed as alleged. But the negotiations were never completed and in particular the Defendant’s letter dated 19th April, 1982 pleaded in paragraph 9 of the Statement of Claim was clearly written “SUBJECT TO CONTRACT.”
- The agreement referred to in the Statement of Claim did not fix the date of commencement of the proposed lease with the certainty required by law.
- The Defendant will rely upon the provisions of Section 5 of the Law Reform (Contracts) Law Cap. 66 Revised Laws of Lagos State.”
As I have said before, the case proceeded to trial before Ayorinde J. The Plaintiff led evidence, mainly documentary, in support of the various averments in its’ Statement of Claim. The Defendant called no evidence. In short the Defendant tested its case on .he evidence adduced by the Plaintiff.
The letter dated 19th April, 1982 from the Defendant which the Plaintiff pleaded as constituting the offer from the Defendant to the Plaintiff to rent the property in question is Exh. E. in these proceedings. The relevant portions of Exh. E for the purposes of the appeal in hand are as follows:-
“OUR REF: PROP/PM/82 19th April, 1982.
Tejumola & Sons Limited,
15, Okoya Street,
P. O. Box 3253,
LAGOS.
SUBJECT TO CONTRACT
Dear Sirs,
3, DOCEMO STREET AND 42 IDUMAGBO AVENUE LAGOS
We refer to your previous correspondence and the discussion of your Mr. E.T. Ajiboye with us concerning the above property. Subject to your showing evidence of good title we hereby offer to take a sub-lease of your above property on the following main terms and conditions:-
PREMISES
Portion of the ground floor (i.e. 900 sq. ft.) and all the four upper floors (i.e. 1,108 sq. ft. each) comprising a total floor area of approximately 495.36 sq. metres (5,332 sq. ft.)
TERM
15 years from the date physical possession of the property is given to us, subject to the Bank reserving the right to break at the end of the 5th and 10th years of the term.
RENT
N215 per sq. metre (or N20 per sq. ft.) per annum payable 5 years in advance from the date physical possession of the property is given to us and upon our being satisfied with the search of the Lands Registry as regards the genuineness of your title to the property.
RENT REVISION
Every five years of the term subject to the usual arbitration clause.
TENANTS COVENANTS
(Not relevant)…
LANDLORDS COVENANTS
(Not relevant) … If the above main terms and conditions are acceptable to you, please confirm. (Italics mine) Yours faithfully,
pp: UNITED BANK FOR AFRICA LIMITED
(Sgd) J. A. Dosunmu
Property Manager.”
The acceptance of the offer contained in Exh. E by the Plaintiff, according to the latter, is by Exh. F which reads thus:-
“15 Okoya Street, Lagos.
P.O. Box 3253,
Tel. 631687, 658075
19th April, 1982
The Property Manager,
United Bank for Africa Limited,
Broad Street,
Lagos.
Dear Sir,
Reference to your letter PROP/PM/82 dated 19th April, 1982. The contents were carefully noticed. Our Company has carefully consent and confirmed the Tenants Covenants and Landlord’s Covenants. We accepted your offer for the premises portion of the ground floor (i.e. 900 sq. ft.) and all the four upper floors (i.e.1,108 sq. ft. each) comprising a total floor area of approximately 495.36 square metres (5,332 sq. ft.), and also to the subject of Terms reserved by the Bank right.
Our Company also agreed the rentage of N215 per square metre (N20.00 per square foot) per annum payable in 5 years advance from the date physical possession at the property. In view of our 4 (four) months wasted on this property, we request you to take the physical possession on 1st May, 1982, and we expect your check for advance payment of 5 years as soon as possible.
We shall be looking forward for your immediate comments as soon as possible.
Thank you.
Yours faithfully,
TEJUMOLA & SONS LTD.
(Sgd)
Chairman. ”
(Italics mine).
The other documents put in evidence by the Plaintiff Company are Exhibits G, H, K, L,M,N,O, P, Q, R, S, T, T1, U, Y, W, X, Y, Z, Z2, AA, BB, CC, CC1, DD, DD1, Exh. 1, Exh. 2, Exh. 3, Exh. 4, Exh. 5, Exh. 6, Exh.7.
However, as regards the appeal in hand reference need only be made to the following out of these exhibits. First: Exhibit G which says as follows:-
“UBA UNITED BANK FOR AFRICA LIMITED
HEAD OFFICE: 97/105 Broad Street,
P.O. Box 2406, Lagos
18th May, 1982
OUR REF: PROP/AGMP/82
Chairman/Director,
Tejumola & Sons Limited,
15, Okoya Street,
LAGOS.
Dear Sir,
3 DOCEMO STREET/42 IDUMAGBO AVENUE, LAGOS
There will be a site meeting on Friday, 21st May, 1982 at 10.00 a.m. to agree the external area which should be in the exclusive possession of the Bank. Please ensure you are present, and be prepared to endorse sketch plans which will reflect any agreement reached on the spot.
We would also inspect and ensure that all the main services i.e. mains water, mains electricity, plumbing system, and sewage disposal facilities are in good working condition. The locations of our generators and strong-room and other similar items will be discussed and agreed with you.
Please confirm that you will attend the meeting.
Yours faithfully,
pp: UNITED BANK FOR AFRICA LIMITED
(Sgd) A. G. Sangosanya.”
(Italics mine)
Second: Exh. H which says as follows:-
HEAD OFFICE
15 Okoya Street, Lagos.
P.O. Box 52057,
Tel. 631687, 658075
24th May, 1982.
Mr. A.O. Okoro,
United Bank for Africa,
(Property Department).
4th Floor,
Broad Street,
Lagos.
Dear Sir,
Thanks for your co-operation for the meeting we held together about housing inspection to locate the ground floor area for Bank use. Already I have separated the wall between Docemo and Idumagbo Avenue, and I’ve block the corner piece of backyard according to the plan you draw for site.
I have demolished the small store with open space for generator plant for electrical engineer design, and the electrical engineer come here this morning and see everything. I am waiting for the ground floor Drawing Sketch you drawn for signature, and our Company authorised you to start any adjustment you need both internal and external from ground floor to fourth floor, and request from your engineer is this I’ve got report from our Electrical Contractor. I have submitted the letter and copy of collection fees.
Thank you.
Yours faithfully,
(Sgd)
Chairman”
(Italics mine).
Third: Exhibit J which says as follows:-
UBA UNITED BANK FOR AFRICA LIMITED
HEAD OFFICE: 97/105, Broad Street,
P.O. Box 2406, Lagos.
OUR REF. PROP/ABS/1246/82 10th June, 1982
Tejumola & Sons Limited,
15, Okoya Street,
P. O. Box 3253,
Lagos.
Dear Sirs,
3, Docemo Street & 42 Idumagbo Avenue, Lagos We have been informed that the suitability of the above property could be in doubt as it was understood that it once collapsed during construction.
We have therefore contacted a reputable firm of Structural Engineers who are charging N6,000.00 (Six thousand naira only) to inspect and confirm the suitability of the property. Attached is a photostat copy of their letter requesting for the above. Kindly let us have your cheque in the same amount by return.
We regret that it will not be possible to progress the transaction any further until the structural Engineers confirm that the building is structurally sound for our type of business.
(Italics mine)
Yours faithfully,
pp: UNITED BANK FOR AFRICA LIMITED
(Sgd) A. G. Sangosanya (Sgd) A. O. Okoro
Asst. General Manager Building Surveyor”
Fourth: Exhibit L which says as follows:-
PROP/ABS/1246/82 11th June, 82
Mr. A. G. Sangosanya,
Assistant General Manager,
United Bank for Africa,
Lagos.
Dear Sirs,
3, Docemo Street & 42, Idumagbo Avenue, Lagos Referred you to your letter PROP/ABS/1246/82 dated 10th June 1982, which the contents were carefully noticed.
…We hope that this our Engineer’s reports and confirmation of the Lagos State Development Town Planning will convince your satisfaction on the building suitability.
Looking forward to hear more of your comments as early as possible.
Thanks for your co-operation in this regards.
Yours sincerely,
TEJUMOLA & SONS LTD.
(Sgd)
DIRECTOR”
Both the Engineer’s report and the document from the Lagos State Development Town Planning referred to in Exh. L confirm it that the property in question in this case is structurally safe for the use to which the Defendant Bank wanted to make of it. The Engineer’s report is Exh. M.
It will appear from Exhs. N, O, P, Q, R, S, T, T1, that the Defendant Bank was not quite satisfied with the Engineer’s report in Exh. M and that at the request of the Defendant Bank another firm of Engineers named by the Defendant Bank inspected the property in question in conjunction with the Plaintiff’s Engineers with a view to assessing the suitability of the premises for the Defendant’s business. The Plaintiff paid for the costs of the inspection. In the end the new firm of Engineers Messrs Ove Arup & Partners by Exh. T of 28th September, 1982 agreed with Exh. M that the building in question was safe to carry loads peculiar to a Banking Institution. In other words, the new Engineers agreed that the building in question was safe for the business of the Defendant Bank.
In reinforcement of the opinion in Exh. T there is Exh. T1 of 13th September, 1982 from Folad Engineers addressed to Messrs Ove Arup & Partners endorsing the latter’s opinion in Exh. T.
After all these assurances from the Plaintiff to the Defendant as to the structural soundness of the property in question and after the Plaintiff at the request of the Defendant had carried out structural alterations to the property at some considerable cost the Defendant Bank wrote Exh. U of 8th October, 1982 to the Plaintiff. Exh. U reads thus:-
HEAD OFFICE: 97/105 Broad Street,
P.O. BOX 2406, Lagos.
Our Ref: PROP/PM/2124/82 8th October, 1982
Tejumola & Sons Limited,
15 Okoya Thomas Street,
Lagos.
Dear Sirs,
42, Idumagbo A venue, Lagos
This is to inform you that the members of the Management of this Bank will inspect your above property at 2.30 p.m. on Monday 11th October, 1982.
Kindly arrange for your representative to open all the doors and windows of the property to them on that day.
Yours faithfully,
pp: UNITED BANK FOR AFRICA LIMITED
(Sgd) J. A. Dosumu
Property Manager”
According to the oral evidence in this case the property was inspected on the day indicated in Exh. U. All the officers of the Bank who were present at the inspection were satisfied with what they saw there. It was after this inspection that the Defendant Bank wrote Exh. V to the Plaintiff calling off everything connected with the property in question. Exh. V reads thus:-
“Our Ref: PROP/PM/2275/82 28th October, 1982
Tejumola & Sons Limited,
15, Okoya Street,
Lagos.
Dear Sir.
RE: 3 DOCEMO STREET/42 IDUMAGBO AVENUE
LAGOS
We refer to our previous correspondence concerning our requirements for your above property. After giving this matter considerable thought, we regret to inform you that we are no longer interested in taking a lease of your above property.
We however thank you for offering the lease of the property to us and hope to be able to do business with you in future,
Yours faithfully,
pp: UNITED BANK FOR AFRICA LIMITED
(Sgd) J. A. Dosumu
Property Manager.”
All the documents, subsequent in point of time to Exh. U, put in evidence in this case establish (i) allegation by the Plaintiff charging the Defendant Bank with breach of contract and claim for damages by the Plaintiff from the Defendant for the resultant breach; (ii) attempt by the Defendant Bank to seek without admitting liability a negotiated settlement of the alleged breach of contract; and (iii) losses incurred by the Plaintiff as a result of the alleged breach. These documents strictly speaking bear little or no relevance to the issue arising for consideration in this case. So I need not say anything more about them.
The learned trial Judge Ayorinde J in his judgment dated 23/11/84 held as follows as regards Exhs. E and F:-
Exhibit ‘E’ speaks of the date when physical possession is given but Exhibit ‘F’ says physical possession is given from 1/51/82. It is my considered view that the contract was to begin on 1/5/82 which was the date fixed by the Plaintiff. The Defendant did not rebut this averment. I find it is the true date of commencement of the contract. The contention of the Defendant is untenable.”
Consequent upon this finding the learned trial Judge rejected the contention for the Defendant Bank that the negotiations between the parties in this case in respect of the property in question have not crystallized into a contract in that the date of the commencement of the proposed lease has not been agreed. The learned trial Judge then found for the Plaintiff having rejected the other contentions by the Defendant. Eventually judgment was entered for the Plaintiff against the Defendant for N732,200.00 as special and general damages for breach of contract, the latter being N200,000.
The Defendant Bank appealed against this decision to the Court of Appeal Lagos Division. In that court the Defendant Bank took the point that the negotiations between the parties in this case had not crystallized into a contract, because the date of the commencement of the proposed lease had not been agreed and that the trial court was wrong in holding that that was not so and that 1st May, 1982 was the date of the commencement of the lease. This contention was again rejected by the Court of Appeal. In the lead judgment of the Court below by Ademola, J.C.A., to which Mohammed and Kutigi JJ.C.A. agreed, the learned Justice of Appeal was of the opinion that in coming to a decision on the point at issue one must not look at Exhs. E and F alone but at all the documents that passed between the parties including Exhs. E and F. Having examined Exhs. E, F, G, H, K, Q, R, he made the following finding:-
From these series of correspondence that I have examined, I cannot see in them where the date of 1st May is the date wherein the Appellant took physical possession as being in doubt. I am inclined to think that all these activities will be regarded by the parties as preparatory to the signing of a formal lease pending the payment of rent due under the agreement.
The Appellant for reasons best known to him, but which is pretty obviously his letter of 8th September Exhibit 5 decided to have cold feet over an already concluded matter and the final breach between parties in October should have been a foregone conclusion to a discerning person.”
In the end the contention for the Defendant Bank was rejected. However, the Court of Appeal allowed the appeal of the Defendant on the issue of damages, in that the award for general damages was set aside. The Defendant Bank not being satisfied with the decision of the Court of Appeal has now appealed from it to this court.
Briefs of Arguments were filed on both sides. Both sides agreed that the only question for determination in this case is as follows:-
“Whether on the pleadings and the evidence before the court the finding that there was an agreement that the lease shall commence on 1.5.82 can be sustained.”
So, it is not necessary to refer again to the grounds of appeal in this case.
In this judgment the Appellant will hereinafter be referred to as the Defendant and the Respondent as the Plaintiff and the property the subject matter of the proposed lease as the property.
I have stated the evidence, mainly documentary, in this case and I have also referred to the relevant portions of the Statement of Claim and of the Statement of Defence. It now behoves me to state the law on the point at issue.
The case of Harvey v. Pratt (1965) 1 W.L.R. 1025 relied upon by counsel for the Defendant, Chief F.R.A. Williams, S.A.N. establishes it that for a valid agreement for a lease to exist the parties and the property, the length of the term, the rent and the date of commencement must be defined. The case of Marshall v. Berridge 19 Ch. D. 233 at 238 – 239 and 244 – 245 again cited to us by counsel for the Defendant decides it that it is essential to the validity of a lease that it shall appear either in express terms or by reference to some writing which would make it certain or by reasonable inference from the language used on what day the term is to commence, and a contract for a lease to satisfy the statute of fraud must contain this element.
On these two authorities it can be said that it is settled law that an essential term of an agreement for a lease is the day of the commencement of the term to be created by the lease.
In the instant case, as I have shown above, the alleged agreement for a lease is not in one particular note or memorandum formally signed by the parties to this case. The court has been asked to find a contract in a series of correspondence between the parties. In a situation like this it has been held in Hussey v Horne-Payne 1978-794 APP. CAS 311 that the court must take into consideration the whole of that which has passed between the parties in coming to a decision on the point in question.
Nesham v. Selby (1872)7 Ch. App. 406 decides it that as long as a necessary term of an agreement for a lease has not been agreed to the matter rests in negotiation and there is no concluded contract. The point must also not be lost sight of that an agreement for a lease is an ordinary contract and in accordance with the general principles of contract law it will not be binding on the parties until their minds are at one both upon matters which are cardinal to every agreement for a lease and also upon matters that are part of the particular bargain. See for instance Rossite. v. Miller (1878) 3 APP CAS 1124 at 1139.
On the authorities as I have just stated them, the question for determination in this case is whether it can be said on the evidence in this case that 1st May, 1982, the day said by the Plaintiff to be the commencement of the proposed lease, which no doubt is an essential term of an agreement for the lease, has been agreed to by the parties to this case.
The trial court held in the passage from its judgment which I have copied earlier on in this judgment that 1.5.82 was the commencement date of the agreement for the lease because Exh. F written by the Defendant to the Plaintiff said “physical possession is given from 1.5.82” and that the Defendant did not rebut this averment. It will appear that the trial court came to this decision as to the commencement date on the consideration of Exhibits E and F, in this case and there is no indication that it considered the other correspondence between the parties on the issue of the commencement date of the agreement for the proposed lease.
As I have shown earlier on in this judgment the Court of Appeal, the lower court, agreed with the learned trial Judge as to 1st May 1982 being the day of the commencement of the proposed lease. In coming to its decision the Court of Appeal considered all the relevant correspondence that passed between the parties on the point including Exhibits E and F. On the authority of Hussey v. Horne-Payne (supra) this is the correct approach to the point at issue. The lower court concluded as I have shown above as follows:-
“From these series of correspondence that I have examined, I cannot see in them where the date of 1st May as the date wherein the Appellant took physical possession as being in doubt.”
Neither the trial court nor the lower court, the Court of Appeal, made a definite finding that the Defendant agreed to 1.5.82 stated in Exh. F, the Plaintiffs letter to the Defendant, as the commencement date of the proposed lease. The trial court said the Defendant did not rebut the averment. The Court of Appeal, the lower court for its part said that there was no doubt that 1.5.82 was the date of the commencement of the proposed lease. It did not say positively that the Defendant agreed to this date.
I have said above that Nesham v. Helby (Supra) is authority for the proposition that the date of the commencement of an agreement for a lease must be agreed to by the parties. It will be illustrative in this regard to state the facts of that case which are as follows:-
“The Plaintiff, in a bill for specific performance of an agreement to take a lease of a house, alleged and produced evidence of a verbal agreement which was denied by the Defendant. In order to take the case out of the Statute of Frauds, the Plaintiff relied on a letter written by the Defendant, in which the Defendant agreed to take the house for seven years on certain terms, but in which the day of the commencement of the lease was not mentioned; and on another letter from the Defendant mentioning the day of commencement, and adding terms to which the Plaintiff did not agree.
In that case Sir W.M. James, L.J. held as follows:”
In this case the Plaintiff has filed a bill on an agreement evidenced by letters. It is admitted that the first letter does not contain all the terms of the alleged agreement. The omitted term is said to be evidenced by a second letter. But that letter shows that the understanding of the Defendant as to the agreement was different from that of the Plaintiff. Then the whole thing is broken off before the Plaintiff has bound himself to anything, and the Plaintiff was never placed in any difficulty by the agreement being broken off. I think that the Court has gone quite far enough in decreeing specific performance upon letters as constituting agreements, where one side is bound and the other not.”
The Plaintiff in the case failed because there was no evidence that he agreed to the date of the commencement of the proposed lease as suggested in the Defendant’s letter upon which he relied.
So what I have to do now is to find out if on the whole of the correspondence that has passed between the parties in this case and which are relevant to the point at issue and which I have copied above it can be said or inferred that the Defendant agreed to 1.5.82 which is the date of the commencement of the lease as stated in Exh. F, a letter from the Plaintiff to the Defendant.
What the Plaintiff Company said in Exh. F as to the commencement date of the proposed lease is as follows:-
“We request you to take the physical possession on 1st May, 1982.”
All the correspondence which passed between the parties showed without doubt that the Defendant never at any time took possession of the property the subject matter of the proposed lease.
At this junction I must pause to consider the case of Brilliant v. Michaels (1945) 1 All E.R. 121 at 127 to 128 where Evershed J. held as follows:-
“My opinion, therefore, is that a contract for a lease is enforceable notwithstanding that the commencement of the term may be expressed by reference to the happening of a contingency which is at the time uncertain provided that at the time that the contract is sought to be enforced, the event has occurred and the contingency has happened.”
Counsel for the Plaintiff relied heavily on this case.
Exh. E from the Defendant says the term of the proposed lease will commence from the date physical possession is given to the Appellant bank. To that extent it may be said that the commencement of the term has been expressed by reference to the happening of a contingency namely giving of physical possession to the Defendant bank. But that event has not occurred before the Defendant called off everything. So the contingency by reference to which the day of the commencement of the lease could have been ascertained did not happen. This being so, the case of Brilliant v. Michael (Supra) is not in point here, in my judgment.
I will therefore continue with the consideration of the point as to whether the Defendant has agreed to 1-5-82 as the date of the commencement of the proposed lease. Exh. F of 19.4.82 from the Plaintiff requested the Defendant to take possession on 1st May, 1982. By Exh. G of 18th May, 1982, subsequent no doubt to Exh. F, the Defendant wrote the Plaintiff saying there would be a sight meeting on Friday 21st May, 1982 at 10a.m. to agree the external areas which should be in the exclusive possession of the Defendant. It will appear the sight inspection was carried out as demanded in Exh. G. Then there is Exh. H from the Plaintiff to the Defendant, describing the inspection as one to locate the ground floor for the Defendant’s use and also containing steps taken hy the Plaintiff Company to prepare the floor area for that purpose. Then again there is Exh. J. of 10th June, 1982 from the Defendant to the Plaintiff saying, it would not be possible to progress with the transaction any further until the Structural Engineers confirmed that the property, the subject matter of the proposed lease, was structurally sound for the type of business the Defendant wanted to transact in it. There is equally no doubt that by Exhs. L, M, Q, T and T1 the Plaintiff produced confirmation from the Structural Engineers to the Defendant as to the structural soundness of the property for the banking business of the Defendant. To this end the Plaintiff incurred considerable expenses. The response of the Defendant to all what the Plaintiff Company has done was Exh. V wherein the Defendant called off everything up to that time.
The indications from the analysis I have made of the correspondence which passed between the Defendant and the Plaintiff after Exh. F was written are that the Defendant never at any time expressly agreed to 1.5.82 as the date of the commencement of the proposed lease. And I have said earlier on in this judgment that the Defendant never at any time took possession of the property.
Counsel for the Plaintiff, Mrs. P.C. Ajayi-Obe made the point both in the Plaintiff’s brief of argument and in oral submissions to us that the Defendant is estopped from saying that there is no concluded agreement in this case. She said in other words that the Defendant was estopped from saying that 1.5.82 was not the day of the commencement of the proposed lease agreed to by both sides. She said the Defendant was estopped because of the expenses incurred by the Plaintiff at the instance of the Defendant in restructuring the property the subject-matter of the proposed lease in order to make it suitable for the banking business of the Defendant. As I have said there is no doubt that the Plaintiff carried out the restructuring at a considerable cost and at the instance of the Defendant. But the point still remains whether all what the Plaintiff did was done at the time when negotiations were in progress or at a stage after a concluded agreement for a lease had been reached.
Counsel for the Plaintiff as I have said, submitted to us that the Defendant bank was estopped for the reasons I have just mentioned. She did not mention the species of estoppel she had in mind. What however readily comes to mind when dealing with a matter of this nature is what Denning J, as he then was, said, in Central London Property Trust Ltd. v. High Trees House Ltd. (1947) 1 K.B. 130 at 134 which is as follows:-
“With regard to estoppel, the representation made in relation to reducing the rent, was not a representation of an existing fact. It was a representation, in effect, as to the future, namely, that payment of the rent would not be enforced at the full rate but only at the reduced rate. Such a representation would not give rise to an estoppel, because, as was said in Jorden v. Money (1), a representation as to the future must be embodied as a contract or be nothing. But what is the position in view of developments in the law in recent years The law has not been standing still since Jorden v. Money (1). There has been a series of decisions over the last fifty years which, although they are said to be cases of estoppel are not really such. They are cases in which a promise was made which was intended to create legal relations and which, to the knowledge of the person making the promise, was going to be acted on by the person to whom it was made and which was in fact so acted on. In such cases the courts have said that the promise must be honoured. The cases to which I particularly desire to refer are: Fenner v. Blake (2) In re Wickham (3), Re William Porter & Co. Ltd. (4) and Buttery v. Pickard (5). As I have said they are not cases of estoppel in the strict sense. They are really promises, promises intended to be binding, intended to be acted on, and in fact acted on.” This has come to be known as promissory estoppel.
The mere fact that the Defendant asked for some things to be done to the property the subject matter of the proposed lease and those things were carried out would not mean that there is a concluded agreement for a lease in the absence of an agreed commencement date of the term of the proposed lease which is an essential term of a lease. The fact I have just referred to will only be relevant in the instant case if Counsel for the Plaintiff can thereby show that the Defendant has by its conduct which must be evidenced in writing, See Marshall v. Berridge (Supra) agreed to the commencement date of 1.5.82 in the Plaintiff’s letter Exh. F. Unless this can be done it cannot be said that the request by the Defendant for the work carried out by the Plaintiff on the property the subject matter of the proposed lease made 1.5.82 the date of the commencement of the proposed lease agreed to by both sides.
I cannot find anything in the requests made by the Defendant for alterations to the property the subject matter of the proposed lease suggesting that the Defendant expressly or by reasonable inference agreed to 1.5.82 as the date of the commencement of the proposed lease.
This is all the more so when the requests came after 1-5-82 and at a time when, at least from the point of view of the Defendant, (1) the external area of the property which would be in its exclusive possession had not been agreed upon and (2) the structural soundness of the property for the business of the Defendant was in doubt.
I cannot therefore find any basis for the application in this case of the type of estoppel in the High Trees Case (Supra) or for that matter any other type of estoppel in reaching a decision as to whether the Defendant agreed to 1st May 1982 as the commencement date of the proposed lease.
Both sides placed reliance on the case of Shell B.P. Petroleum Development Co. Ltd. v. Jammal Engineering Nigeria Ltd. (1974) 1 All N.L.R. Part 1 at 542. The following passages from the judgment of the Supreme Court in the case by Coker J.S.C. under-scored the points I have made in this judgment that in the absence of an agreed commencement date of a lease there can be no concluded contract for a lease. The passages are as follows:-
Page 557: “Manifestly, the letter Exhibit C touched upon the important consideration of the commencement date or dates of the lease or leases of the several houses.”
Page 558: “The learned trial Judge evidently considered the various attempts to fix commencement dates by the parties (i.e. by Exhibit E dated the 18th September, 1968, Exhibit K dated the 31st October, 1968, Exhibit L dated the 7th November, 1968 and Exhibit N dated the 29th November, 1968 and Exhibit N dated the 16th December, 1968).”
Page 558: “In the words of the learned trial Judge himself, the position was described as follows:-
“That these new dates proposed by the Defendants were accepted by the Plaintiffs are not in doubt.:
Page 570: “The learned trial Judge took the view that at that point of time the parties were in agreement over the granting of lease; by the Defendants to the Plaintiffs of a number of houses in the Jammal Estate. We think this is clearly so.”
In the instant case I cannot find any evidence of an agreed commencement date of the term of the proposed lease. I will deal briefly with the point as to the effect of Section 5 of the Law Reform Contract Law Cap. 66 Laws of Lagos State which provide as follows namely:-
“No contract to which this section applies shall be enforceable by action unless the contract or some memorandum or note in respect thereof is in writing and is signed by the party to be charged therewith or by some other person lawfully authorised by him.”
on the evidence adduced in this case on the point at issue, that is the commencement date of the term of the proposed lease.
In this regard I need only to refer to the case of Bristol, Cardiff and Swansea Aerated Bread Company v. Maggs 1890 44 Ch. D 616 which deals with the provisions Statute of Frauds (which are in pari materia with Section 5 of the Law quoted above) viz a viz the point as to whether there is a concluded agreement for a lease. I refer to page 622 of the report where Kay J. said as follows after reviewing the authorities on the point:-
“The real truth is that the statute was not meant to affect contracts in any way, but only the evidence of them. It does not provide that a memorandum duly signed shall be contract, but only that no contract concerning land shall be proved by any lower evidence than such a written memorandum. The question whether the two letters relied on in this case were a complete contract, or were only steps in a negotiation, is altogether independent of the Statute of Frauds.”
I have held that on the evidence in this case there is no agreement as to 1.5.82 being the date of the commencement of the proposed lease. If there had been such evidence then there would have been the need to find out if the evidence satisfied the requirements of Section 5 of the Law Reform Contract Law.
In sum I must hold that there is no concluded contract in this case and I must uphold the contention of Counsel for the Defendant that the transactions in the matter now before us on appeal were only steps in negotiations between the parties to this appeal.
In conclusion I hold that both the trial court and the Court of Appeal were wrong in holding that 1-5-82 was the agreed date of the commencement for the proposed lease. In the result, the Plaintiffs appeal is allowed. The judgment of the trial court and that of the Court of Appeal are hereby set aside by me. In their place I enter judgment for the Defendant dismissing the Plaintiffs case against it, with costs assessed at N500.00 to the Defendant.
It is unfortunate that the Plaintiff in conducting negotiations in a matter involving such a heavy sum of money as indicated by the evidence in this case acted without the assistance of a lawyer. It will appear that the Plaintiff at all stages of the negotiations for the lease with which we are concerned in this appeal acted for it sell. It is doubtful that it ever sought, let alone obtained, the advice of a legal practitioner in the matter. Perhaps if it had done the latter, it would have been warned of the risk of meeting demand after demand from the Defendant in the absence of a concluded agreement for a lease.
It turned out that the Plaintiff unwittingly took this risk which eventually materialised, as this judgment has shown, with the Plaintiff incurring losses for which the Defendant cannot be made legally liable. The stage at which the negotiations for an agreement for a lease had reached in this case raised high hopes in the Plaintiff that a concluded agreement would finally be arrived at.
That one was not reached is not because of any default on the part of the Plaintiff. In fact it was when all of the objections raised by the Defendant had been disposed of by the Plaintiff at some considerable cost that the Defendant called off the negotiations. The law says the Defendant can do so with impunity.
But I do not think it will be too much to expect if the Defendant having regard to all the circumstances of this case decided to absorb ex gratia some of the losses which the Plaintiff had undoubtedly suffered in the transactions.
SC.31/1987
