SQUIB CASE LAW
IN THE HIGH COURT OF LAGOS STATE
IN THE IKEJA JUDICIAL DIVISION
HOLDEN AT HIGH COURT NO. 29 (GENERAL CIVIL DIVISIONS
BEFORE THE HONOURABLE JUSTICE A. J. COKER (MRS.)
TODAY, TUESDAY THE 18TH DAY OF DECEMBER 2007
SUIT NO. LD/11 64/2006
BETWEEN:
MRS. TINUKE OKUSAGA CLAIMANT
AND
1. LAGOS STATE GOVERNMENT
2. THE ATTORNEY-GENERAL OF LAGOS STATE DEFENDANTS
3. THE MINISTRY OF HOUSING
JUDGEMENT
By her Writ of Summons of 24th of May 2004 and 2nd Amended Statement of Claim of 2/7/07, the Claimant seeks the following 5 reliefs:
1. (i) A declaration that the Defendants are jointly and severally bound by the contract to convey the property known as House 025 (5 Bedroom Detached House) at the Millennium Housing Estate Lekki II (hereafter called "the property") to the Claimant for sum of N16,000,000 paid to the 3rd Defendant;
(ii) An order of specific performance of a contract between the Claimant and the 3rd Defendant 'for the sale by the Defendant to the Claimant of the property.
Alternatively;
2 (i) An declaration that an agreement was concluded between the Claimant and the 3rd Defendant (on behalf of the first Defendant) for the grant by the 1st Defendant to the Claimant of a lease of the property for a term of 90 years from 30th of June 2002.
(ii) An order of specific performance by the Defendants jointly and severally of the said agreement to grant the said lease.
(iii) An order that the Defendants deliver up vacant possession of the property to the Claimant forthwith.
Alternatively;
3 (i) A declaration that an agreement was concluded between the Claimant and the 3rd Defendant (on behalf of the first Defendant) for the grant by the 1st Defendant to the Claimant of a lease of the property for a term of 90 years from 3rd of June 2003.
(ii) An order of specific- performance by the Defendants jointly and severally of the said agreement to grant the said lease.
(iii) An order of injunction restraining the Defendants, their privies from interfering with, disturbing or preventing the Claimant from possession of the property.
4. An Order vesting the said property in the Claimant.
5. Rent on the property at the rate of N1,8000,000 (One Million, Eight Hundred Thousand Naira Only) per annum from the commencement date until the property is vested in the Claimant'
The Defendants in response filed and relied upon their Amended Statement of Defence of 25/10/06. The Claimants also filed and relied on their Reply to Statement of Defence of 16/6/05:
The above processes are reproduced serially hereunder for ease of reference:
2nd Amended Statement of Claim of 2/7/07
1. The Claimant is a businesswoman carrying out business at No. 198 Awolowo Road Ikoyi Lagos State.
2. The 1st Defendant is the Government of Lagos State; the 2nd Defendant is the Chief Legal Officer of the State whilst the 3rd Defendant is the agency or arm of the Government responsible for housing related matters within the State (hereafter called the Ministry).
3. Sometime in 2001 the 1st Defendant embarked upon a large Housing Estate Project known as the 'Millennium Housing Project' which involved building houses within the environs of the State and selling to Nigerians in general.
4. Some of the houses built for sale are located in an fenced area within the Lekki Phase 1 in Eti Osa Local Government There were three categories, namely detached houses; semi detached housed (duplex) and 3 bedroom Terraced Houses and the site was identified as Lekki II. One of these houses is the subject matter of this suit.
5. At a presentation jointly organized by the 3rd Defendant and Mbc International Bank on or about June 2001, the Claimant along with other persons were shown the site during construction and given layout plans of the Estate. It was said that the houses would be built, completed and delivered to allottees on or before the 31st of December of 2001.
6. The Ministry and the Bank also advertised these houses for sale in the mass media including newspapers and by way of flyer posted in various public areas stating the respective selling price of each house. The advertised price of each house type is as follows: Detached house N16,000,000; Duplex N12,000,000; 3 bedroom Terraced NlQ.000,000.
7. In response to the presentation and adverts aforesaid the Claimant purchased, completed and submitted an application form (issued by the 3rd Defendant) by which persons are to make apply for the purchase of the houses.
8. The application form is titled 'Application for the purchase of housing unit at the Millennium Housing Unit' and consisted of layout plan, floor plans, elevation plans, building specification of material for the house types.
9. Following identification of House 025 (a detached house) by the 3rd Defendant on the layout plan, the Claimant paid the sum of N16,000,000 as purchase price. The purchase was made in three installments of N2,000,000 on 30:5:01, N7,000,000 on 2:7:01, N7,000,000 on 8:S:01. Receipt of payments were issued accordingly.
10. In order to avoid multiple allocation of a House, the 3rd Defendant maintained a master layout plan in which it entered the name of each allottee of the house upon payment.
11. Further to paragraph 10 the 3rd Defendant stated that although there was a delay in completing the houses, (hey would be completed and delivered to the Claimant by the 30th of June 2002.
12. By a letter of 13th of November 2001 the 3rd Defendant confirmed inter alia the House to be conveyed to the Claimant as House D25 (5 Bedroom Detached House) at Lekki II (the property). The letter o 13:11:01 is hereafter called 'allocation letter'. The Claimant and other persons to whom this letter was issued are hereafter jointly called the 'allotees'.
13. The monies paid by the Claimant and altotees were used by the 3rd Defendant in building the houses.
14. The Claimant avers that by virtue of the foregoing, a contract was concluded between the Claimant and the 3rd Defendant for the sale of the property.
15. The houses were not completed by the end of June 2002, and upon further enquiries from the 3rd Defendant the Claimant was informed that the house would be completed at the end of December 2002.
16. Following the aforesaid enquiries the Claimant received no further communication from the Defendants until August 2003 when the Claimant received a letter from the 3rd Defendant dated 12th August 2003 inviting the Claimant along with other allotees to a meeting with the Honourable Commissioner for Housing ("the Commissioner") on the 14th of August 2003.
17. At the meeting of 14th August, the Commissioner cataloged the series of problems said to have beset the project which included inter alia; an error in the project cost as result of a failure to include the cost of infrastructure; breach of the construction contract by the main contractor, G Cappa and concluded that the market value of the detached house was now N40,000,000.
18. The Commissioner ended the meeting by telling the allotees that the 3rd Defendant has decided to increase the purchase price of their respective houses. The Commissioner said that the purchase price originally paid shall now be deemed as deposit towards the final price of the houses.
19. In addition the Commissioner threatened that any atlotee that does not pay the increased price would have their allocation cancelled and the house sold at the increased price to third parties.
20. After the meeting the Commissioner wrote a letter dated 21st August 2003 stating that the allocation contained in the provisional letter subsist, but the final sale price shall be subsequently conveyed to the Claimant. By the letter the 3rd Defendant expressed his intention to 'vary the purchase price of the houses upwards.
21. At all material times and particularly at meetings held with the Commissioner on the 14:8:03, 4:9:03, 25:9:03, 27:10:03, 30:10:03 and 8:11:03 the Claimant and allotees of the houses protested and rejected the defendants plan to vary the purchase price of the houses and impose a higher prices.
22. Furthermore by a letter dated 24th November 2003 the allotees collectively appealed to the Governor of Lagos State to intervene in this matter to prevent such gross abuse of executive power, the letter was published in two National newspapers on the 26th November 2003 and 1st December 2003.
23. Despite all entreaties to the Defendants, the 3rd Defendant has carried out his threat and proceeded to increase the price of the houses as follows: Detached house N40,000,000; Duplex N28,000,000, Terraced House N25,000,000.
24. The defendants are now surreptitiously advertising -the houses (including the Claimant's) for sale by posting flyers on the walls of the 3rd Defendants offices.
25. Officials of the 3rd Defendant have been contacting the Claimant (and other allottees) demanding for payment to the Defendants of the difference between agreed purchase price and the increase price. The officials have also stated that the Defendants shall carry out the next stage of their threat by selling the houses at a higher price to third parties who have shown interest in the houses.
26. At a meeting held with the Commissioner on the 30th April 2003 the commissioner told one Mr. Delano, a fellow allottee, that the Defendants have no choice but to increase the purchase price as has been done. Further that as compensation for the Claimant's loss resulting from the delay in completing and delivery of the property, the Defendants are willing to sell the allotted housed D25 to him for a lesser price of N35,000,000 (Thirty Five Million Naira).
27. The Commissioner also said that the 3rd Defendant does not intend to complete the contract as agreed, save upon the payment by the Claimant of an additional sum of N19, 000,000 being the difference between the agreed purchase price and the increased price.
28. By virtue of the sale agreement made with the Claimant, the Defendants are bound to the Claimant in law to convey the property to the Claimant without payment of any additional sum to the agreed purchase price.
29. The purchase price of N16,000,000 is a binding term of the sale contract and the Defendants are in breach of the agreement by the issuance of the 3rd defendant's letter of 21 August 2003 and also by their unilateral action of increasing the purchase price of the houses.
30. The claimant avers that if the defendants had delivered the property to the claimant at the agreed date she would have earned a continuous annual income of N1,800,000 (One Million Eight hundred thousand Naira Only) per annum rent on the property. The Claimant will rely on the survey and rental valuation of the property conducted by to firm of Bode Adediji Partnership in proof of this averment at the that of this
action.
Amended Statement of Defence of 25/10/06
SAVE AND EXCEPT as is hereinafter expressly admitted the Defendants deny each and every allegation of fact contained in the Claimant's Amended Statement of Claim as if each and every of such allegation are Herein specifically set out and traversed seriatim. •-
1. The Defendants admit paragraphs 2, 3, 4, 6, 7 and 8 of the Claimant's Statement of Claim.
2. The Defendants deny paragraphs 5, 9, 10, 11, 12, 13, 14, 15, 19, 20, 21, 22, 23. 24, 25, 26, 27, 28, 29 and 30 of the Claimant's Statement Of Claim
and put the Claimant to the strictest proof thereof.
3. The Defendant avers that sometime in the year 2001 the State Government through the 3rd Defendant conceptualized the construction of detached, semi-detached and terraced buildings at Lekki Peninsula 1.
4. After completing the initial arrangements and agreements, the construction of the houses was awarded to Messrs G. Cappa ('the Contractor') with the understanding and honest believe (sic) that the project wilt be completed and delivered to the 3rd Defendant by the middle of the year 2002 based on projections and assurances by the contractor.
5. The Defendants aver that prior to the award of the contract for the construction of the houses to the Contractor, the Defendants have been able to secure a syndicated loan through its bankers for the purpose of erecting the buildings and as soon as the contract was awarded to Messrs G. Cappa, the later (sic) was paid fully as the Defendants were determined to ensure that the houses were completed within the specified period.
6. Contrary to the averments of the Claimants in paragraph 13, the Defendants did not utilize the Claimant's or any other Applicants' money to build the houses. The Defendants shall at the trial ray on documentary evidence to show that the houses were financed through bank loans.
7. In response to paragraph 9 of the Statement of Claim, the 3rd Defendant avers that the Claimant responded to the Defendants advertisement and made a payment of N16 Million in three (3) installments, consequent upon which the 3rd Defendant issued the Claimant with three receipts evidencing the payment.
8. The Defendants aver that it was after the payment made by the Claimant that the 3rd Defendant made a provisional offer of House D25 to the Claimant subject to entering into a Formal Contract.
9. The 3rd Defendant avers that amongst other terms stated in the letter of provisional offer are the following, that:-
(i) details of all other fees to be paid shall be communicated to you in due course'.
(ii) 'please note that the Government reserves the right to add minimal charges to the above cost of the house before completion when the need arises'.
(iii) 'note that you will have to pay the cost of any extra land that may abut to your ho use'.
(iv) 'the commencement of the lease shall be determined*.
10. The Defendants shall contend that in view of the above terms and contrary to the Claimant's averment in paragraph 14, there was nothing to suggest that the contract between the 3rd Defendant and the Claimant and other Applicants are concluded as the total purchase prices of the houses were still open to review by the above quoted terms, more so when the commencement of the lease is yet to be determined.
11. The 3rd Defendant avers that the above stated terms and other terms contained in the provisional letters of allocation to all allottees including the Claimant herein are similar and in part material (sic).
12. The Defendants shall contend that the allocation made to the Claimant is provisional and subject to other conditions yet to be fulfilled.
13. The 3rd Defendant avers that the Messrs G. Cappa to who is the contract for the construction of the Houses (including the detached houses were awarded failed to perform at the speed expected by the 3rd Defendant resulting in delay in completion of the project and increase in 'the cost of completion of the houses.
14. As a result of the development above the contract with Messrs G. Cappa was determined, as several efforts to make the contractor perform proved abortive; thus efforts to get another good and reliable contractors (sic) re-commenced.
15. The Defendants therefore admit paragraphs 11 and 15 of the Claimant' amended Statement of claim only to the extent that there was delay in the completion of the Housing project and aver further that the delay occasioned in the non-completion of the houses as earlier indicated was not (hat of the Defendants but attributable to the non-performance of the contractor then in charge of the construction.
16. In the meantime the Defendants continued to expend Millions of Naira to service the loan taken from MBC International Bank in respect of the housing project that has been abandoned by G. Cappa.
17. By the time new contractors were eventually found and negotiation for the re-award of the construction of the houses commenced the cost of completing the houses became more than doubled.
18. It was also at this period of re-negotiating for the continuation of the construction of the housing project that the Defendants realized that necessary infrastructure that will serve the Housing Scheme was omitted and it was obvious that the cost of such infrastructure to be put in place was not taken cognizance of when the project was first awarded to Messrs. G. Cappa and the houses advertised for sale.
19. Such infrastructure to serve the housing scheme includes:
• Electricity and electrifying the Estate with its own transformer
• Good drainage, access roads and interlocking road network.
• Boreholes with water treatment plant
• 24 hour security network and Police post
• Perimeter fence with access gates
• Car parking lots, etc.
20. The Defendants aver that the cost of providing the above listed infrastructure and more was not included in the provisional advertised prices of f416 Million, H12 Million and H10 Million in respect of detached house, duplex and 3 bedroom terraced respectively earlier offered.
21. The inclusion of the provision of these infrastructures in the new re- awarded cost of construction coupled with the unending inflationary trend in cost of building materials shut (sic) up the completion-cost of the housing projects with infrastructure to over 500% of the initial estimated cost of construction.
22. Up to date the Defendants have expended over N20 Billion which money was raised through a syndicated bank loans.
23. When it became clear that the financial burden on the resources of government in pursuance of its Lekki II Housing Schemes was becoming onerous and at the expense of the provisions of other social amenities for the populace of Lagos State, the Defendants have no choice but to invite the provisional allottees to a round-table discussion with the aim of making them to contribute to the provision of the infrastructure which they were going to enjoy. To this end, the Defendants admit part of paragraph 16 of the Statement of Claim where the Claimant averred that she and other allottees were invited to the Meeting.
24. The Defendants aver that at the said meeting it was resolved that the infrastructure would be provided at extra cost to the provisional allottees.
25. Accordingly on the 21st August 2003 all the allottees including the Claimant herein were notified in writing that the provisions) fetter of allocation issued to them shall subsist subject to the completion of the Housing Estate when the final sale price shall be conveyed to them.
26. The Defendants shall contend that as at 21st of August 2003 there was no binding formal contract for the sale or lease of the House in dispute as the final purchase price was yet to be determined. .
27. When the final purchase price of each House was determined on completion of the project viz U40 Million for the detached house, W8 Million for semi detached and f425 Million for terrace house, all the provisional allottees were notified with a demand to pay the difference.
28. The Defendants further aver that while some of the provisional allottees paid the difference of the new purchase price to have their houses transferred to them, the Claimant and some other provisional allottees rejected the new prices.
29. In spite of the negative response from some of the allottees including the Claimant herein, the 1st Defendant continued with the funding of the housing and provision of infrastructure despite immense pressures from other sectors in dire need of attention.
30. The 1st Defendant also continues to service the old and fresh loans secured for the provisions of infrastructure; the servicing and the principal loan is now running into billions of Naira.
31. The Defendants shall contend that even with the reviewed prices communicated to the allottees, the Defendants are still subsidizing the cost of construction of the houses and provision of infrastructures by over 50% of total cost.
32. In the light of the averments above, the Defendants deny the insinuation of unilateral intention to vary the purchase prices of the houses upwards as contained in paragraphs 17, 18 and 23 of the amended Statement of Claim.
33. The Defendants, in answer to paragraphs 19, 23 and 24 of the amended Statement of Claim, deny issuing any threat but states that it only makes economic sense to recover (even if it cannot make any profit any longer) substantial part of the cost of construction, which it can only do at disposing off the houses at the new prices.
34. The Defendants aver that to mitigate their losses in respect of the houses, they have leased the houses to members of the public that are willing to pay the reviewed selling prices. Evidence shall be adduced during trial.
35. The Defendants deny paragraph 13 of the. Statement of Claim and aver that there readiness to refund the monies deposited by the allottees with immediate effect was rebuffed by the Claimant and some other depositors, whereas some other depositors have taken their refunds.
36. The Defendants are willing to refund the Claimant's deposit with 15% interest.
37. The Defendants deny any knowledge of any sale agreement as such could only exist in the realms of the imagination of the Claimant.
38. The Defendants shall contend at the hearing of this case as follows:'
(i) The phrase 'subject to contract' as contained in the Claimants' letters of offer connotes that the contract to sell/lease is still open to review by either party;
(ii) That the Defendants in communicating the earlier advertised prices labored under unilateral mistake;
(iii) That in view of third parties interest already created by the Defendants, order of specific performance will not be appropriate in the circumstance, rather damages (if any) will ensure the Claimant.
(iv) That to date, there is no binding sale or lease agreement between parties in respect of the proposed lease of the house to the Claimant or any other allottees whose cases were consolidated with the present case.
(v) An Order of specific performance will also be in appropriate as some of the Claimants in the consolidated cases have an alternative prayer i.e. to compel the Defendants to refund their deposits with interest.
39. WHEREOF the Defendants urge the Court to dismiss the Claims of the Claimants.
Reply to Statement of Defence of 16/6/05
SAVE and in so far as the same consists of admission, the Claimant joins issues with the Defendants upon their Statement of Defence filed on 25th February2005
1. paragraph, 4 of the Statement of Defence is admitted only to the extent that the Defendant represented to the Claimant that the houses were to be erected and completed in accordance with the specifications attached to the application form on or before 31st of July 2002 (the completion date). The said house has since been completed.
2. With regard to paragraph 7 of the Defence, the Claimant avers that she paid the sum of N416,000,000 to the Defendant, in reliance upon the 3rd Defendant representations that the house or, title thereto shall be transferred to her upon completion of the building on the completion date,
3. Further and in the alternative, the Claimant avers that by virtue of the allocation letter, it was agreed that the Claimant shall be granted a lease of House D25 on the terms contained therein upon completion of the building as aforesaid.
4. Contrary to paragraphs 9 (iv) and 10 of the Defence, the Defendant represented to the Claimant and it was agreed that the lease to be granted shall commence on the completion date.
5. In reliance on the agreement and in anticipation of the grant of lease or title of the house to her, the Claimant approached the 3rd Defendant with an application to make improvements on the House D25, this application was subsequently put in writing vide her letter of 3rd June 2003.
6. Following the application, the Claimant was permitted to inspect and at her own cost carry out improvements to the House D25. The concrete staircase was discovered to be defective staircase and erecting a new one. The Claimant inter alia also carried out the flooring of the house by laying marble tiles therein.
7. In answer to paragraphs 4, 5, 13, 14, 17 and 18 of the Statement of Defence, the Claimant avers that she was not privy to the negotiations and agreement entered into between the Defendants and the contractors regarding the construction of the houses and at no time was the 3rd Defendant obligation to deliver the property made subject to the performance or otherwise of the said contractors.
8. In reply to paragraphs 19, 20, 21 and 22 of the Defence, the Claimant aver that at all material times the Defendant represented to the Claimant and led the Claimant to believe that the houses will be delivered together with infrastructures that will service each house. The cost of infrastructure was thus included in the selling price.
9. Paragraph 24 of the Defence is denied. The Claimant did not agree at any meeting with the Defendants to bear any extra cost for the provision of infrastructure.
10. The Claimant is and has at all material times been ready and willing to take and lease and or title of House D25 under the open contract of sale with the Defendant to alternatively on the terms of the agreement for a lease aforesaid.
11. The Claimant denies paragraph 27 in that she has not received any written notification or demand for additional money towards the purchase price. The Claimant has not received any demand for fees or charges from the Defendant in respect of the grant of a lease of the house and further avers that no fee or charges are due since the lease or transfer has not been effected.
WHEREOF the Claimant urges this Honourable Court to grant the relief in the claim.
TO BE CONTINUED.
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