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
FACTS
The facts of this case are simply that the Claimant, one of many, paid N16 Million for a detached house as advertised by the Lagos State Government in their Millennium Housing Scheme at Lekki Phase II. It is the case of the Claimant that having paid the said sum and been allocated House D25 on the master plan, the contract between herself and the Defendants was concluded and that the subsequent 140% increase in the selling price of the property was unilateral and a breach of contract for which inter alia Specific performance of the contract plus damages is the only equitable remedy.
The Defendants on the other hand contend that the contract was incomplete, subject to contract and never crystallized because of the failure of the Claimant to complete payment of the reviewed completion cost as demanded by them. Consequently, that they were entitled to offer same to third parties to cover their costs; third parties who have since taken up the said houses. As such the only equitable remedy is for a refund of the Claimant's money with interest, which remedy the Claimant refuses to accept.
Trial commenced on the 26th day of June 2006 with the evidence of the Claimant who testified on oath in English language as CW1 in line with her pleadings as above reproduced. She adopted her Written Statements on Oath of 25-10-04. 21-6-06 & 30-6-06 as her evidence in chief and tendered Exhibit C8 - letter of 3-6-03 - letter written to the 3rd Defendant seeking permission to enter into her allotted house to make improvements therein.
The following Exhibits had been admitted by consent of Counsel during the Pre-Trial
Conference and marked accordingly:
CI - Prototype Application Form & Survey Layout
C2 (A-D) - 3 Treasury Receipts for the total sum of N16 Million & Acknowledgment
of receipt of Completed Application Form
C3 - Letter of Provisional Offer of Allocation of 13/11/01
C4 - Letter of Lagos State Government dated 28/1/03
C5 - Photocopy of Advertorial on Page 72 of This Day Newspaper of 26/11/03
C6 - Photocopy of Advertorial on Page 26 of Guardian Newspaper of 1/12/03
C7 - Photocopy of Advert of Millennium Houses for sale by the Ministry of Housing
C8- Letter of the 1st Claimant dated 3/6/03
C9 - Survey & Rental Valuation Report by Bode Adediji Partnership
Under cross-examination by Mrs. L. A. Oluyemi, Assistant Director. Ministry of Justice, the Claimant read Paragraph 3 of Exhibit C3 - the Letter of Allocation and insisted that the commencement date of her sublease was 30/6/02. She admitted that she does not have a Deed of Sublease but that after paying the purchase price of 416 Million, she was told orally that she would be given possession on the said 30/6/02.
When asked if as per Paragraph 12 of Exhibit C3 "other fees" had been communicated to her, she said she had spent much more money than fees but she had not paid any other fees yet. When asked if she had been given possession, she stated that she had been in possession since 3rd of June 2003 as the Defendants gave her permission to go into the house and make. improvements in the property. She stated that she did not have any letter giving her permission to enter and make the said improvements but that her entry was approved and she had proof. She however stated that she is not living in the property because of this Court case.
She also testified that at the meeting she referred to in Paragraph 22 of her Statement on Oath which she was invited to by the Defendants, they were informed that the Defendants were having difficulties finishing the houses. That she felt this did nor apply to her as her, house had already been roofed and was at fittings stage. She said she informed the Minister that she had started renovation works in her own house; a fact which she said the then Permanent Secretary admitted she gave permission for and was aware of. She stated that some of the other houses, e.g. D2 or D20 were not at the same stage as hers but that she is. only aware of the status of her own house. She admitted that the Commissioner
informed them at the meeting that the original contractor could not complete the work. She said that she did employ one Bode Adediji to prepare a Valuation Report dated 20/12/05 in respect of the said disputed property, which was prepared and given to her after the institution of the suit. This Valuation Report was tendered through her and marked Exhibit
C9.
She further testified that she took the matter to Court because the LASG, i.e. the 1st
Defendant herein, asked her to come and pay an outstanding balance on the house but that she paid fully in 2001, the selling price .of Nl 6 Million. She reiterated that it was the allottees' monies that were used to build the houses and that the Ministry, the
Defendant, gave the cost of the house in dispute as N16 Million as written in the Letter or Allocation" Exhibit C3.
When asked if as at the time the houses were completed, the LASG communicated the cost of each house aside from the purchase price, she testified that they did not discuss that. Finally she admitted that she knew that the LASG took loans to build the said houses.
She was not re-examined.
CW2, one Austin Eboigbe testified on oath also and in English Language, he adopted his Written Oath of 21/6/06 as his evidence in chief. He stated that he prepared Exhibit C9. He was neither cross-examined nor re-examined. . -
The Defence opened their case on the 14th day of November 2006 with the evidence of their sole witness - DW1 - one Mrs. Temitope Akinbola, a Principal Land Officer since 2001 with the Ministry of Housing, Alausa, Lagos. She testified that she was aware that the
Claimant amongst many others sued the LASG in respect of Houses at the Millennium Housing Estate, Lekki and adopted her Written Oath of 25/10/06.
Under cross-examination by Mr. Ademola Akinrele, SAN, DW1 stated that she knew the Claimant but only by her name. She was asked to read Paragraph 9 (iv) of Exhibit C3 and state if a commencement date is stated therein to which she sa^ no. DW1 however testified that the houses were leased to members of the public between 2004 and the time/date of her testimony. Finally, she testified that she was not aware that it was after the notification of this suit that the houses in dispute were leased to other persons.
Written Addresses were filed and adopted by the Counsel to the parties as follows:
• Defendants' Final Address of 16/2/07;
• Claimant's Final Address of 8/10/07 & ,
• Defendants' Reply Address of 2/11/07.
The Claimant's Counsel raised 5 Issues for Determination in their Written Brief as follows;
1. Whether there is as concluded a binding agreement for the sale by assignment of House D25 to the Claimant.
2. Whether there is concluded, a binding agreement between the Claimant and the 3rd Defendant for the lease of the House D25 to the Claimant for a term of 90 years commencing on the 30th of June, 2002, alternatively;
3. Even if the lease is invalid or void, whether pursuant to the equitable doctrine of part performance there was concluded a binding agreement for the lease of the House D25, for a term of 90 years commencing from the 3rd of June 2003.
4. Whether the Claimant is entitled to specific performance of the contract for sale or lease of House D25.
5. Whether the Claimant is entitled to the rental income in addition to specific performance from the date the property ought to have been conveyed.
The Defendants on the other hand raised 3 main Issues for Determination:
(a) Whether there was a concluded contract i.e. a binding sale or lease
agreement of House 025 between the Claimant and the Defendants.
(b) Whether ah order of specific performance is appropriate in the circumstances of this case (s).
(c) Whether the Claimant is entitled to rent in the absence of a binding contract and when the Defendants are willing to refund her deposit with
15% interest.
From the above highlighted pleadings, evidence of the parties and issues raised, it is
necessary to state that the following facts are not in dispute:
1. The Claimant is one of 17 persons suing the LASG in respect of Houses in the Millennium Housing Estate Lekki II (see pages 1 & 2 of Claimant's Written Address) and consented to this suit being a test case.
2. That some of the original Claimants had decided to withdraw their suits and either pay the additional costs demanded by the LASG in respect of the said houses or obtain a refund.
3. The Claimant paid N16 Million for her own detached house as advertised vide
Exhibit C1.
4. The original contractor did not complete the Project in June 2002 and a new
contractor had to be hired to complete the project.
5. That the Project has since been completed and the LASG offered same to third parties vide Exhibit C7 - wherein the type of detached house claimed herein by the Claimant was offered at N40 Million.
There is no doubt that the dispute in this suit revolves mainly around the interpretation of the content of the provisions/terms of the Claimant's Letter of Allocation dated 13/11/01- Exhibit C3 marked "subject to contract", and Exhibit C4, which is not so marked vis-à-vis other correspondences and the oral evidence before the Court. It is thus necessary to reproduce for ease of reference, the said Exhibits C3 & 4:
Exhibit C3
13/11/01
Our Ref. No. MH/EST/HIH/LEKKI/0001381
MRS TINUKE OKUSAGA
198, AWOLOWO ROAD
IKOYI
Dear Sir/Madam,
RE: PROVISIONAL OFFER OF ALLOCATION OF A 5 BEDROOM. DETACHED HOUSE AT THE MILLENNIUM HOUSING ESTATE - LEKKI II
With reference to your application for a house, I am happy to inform you that you have been offered House D25 (5 Bedroom Detached House) SUBJECT TO CONTRACT at the above Housing Estate, under the ministry's High Income Housing Programme; some of the conditions of the allocation are as follows:
1) The selling price of the house is N6,000,000.00
2) In addition to the selling price of the house, you are required to pay other fees referred to as "Transfer fees" which will be communicated to you later.
3) Through the term granted, you will be expected to pay annual fee of N25,000.00 known as lessor's rent. This fee which is payable on taking possession is revisable every 5 years.
4) The title to be granted is a sub-lease for a term of 90 (Ninety) years, subject to conditions as the state government may determine from time to time.
5) It is hereby agreed by the parties herein that you cannot transfer or alienate the house without the prior written consent of the Ministry of Housing.
6) The ministry reserves the right of first option to purchase the house/unit should you decide to sell.
7) The house is offered in the condition and state it is, and on taking possession, you must expressly accept that the Ministry is under no further obligation to you in respect of any defect whatsoever on or specifically stated in writing to provide in the house.
8) It is compulsory that you have an insurance policy against fire and other perils. The first installment shall be paid to a named insurance company before taking possession. You shall make available to the ministry for inspection/scrutiny the Insurance policy by the 30th January of every year during the said period of sublease.
9) YOU SHALL NOT 'CARRY OUT ANY ALTERATIONS OR ADDITIONS TO THE HOUSE WITHOUT THE PREVIOUS WRITTEN
CONSENT OF THE MINISTRY VIOLATION OF THIS CLAUSE SHALL LEAD TO CANCELLATION OF THE OFFER HEREBY MADE AND/OR DEMOLITION OF THE SAID UNAUTHORISED ADDITION OR ALTERATION. THE COST OF DEMOLITION OF SUCH STRUCTURE SHALL BE BORNE BY THE ALLOTTEE.
10) The house shall be USED FOR RESIDENTIAL PURPOSES ONLY.
11) The violation of any of the above stated conditions/terms shall result in the withdrawal of your allocation, whenever it is made to you.
12) Details of all other fees to be paid shall be communicated to you in due course.
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. Note also that you will have to pay the cost of any extra Land that may abut to your house.
Congratulations.
(signed)
ARC. (MRS) O.A. EJIWUNMI
PERMANENT SECRETARY (HOUSING).
Exhibit C4
Our Ref No. MH/EST/HIH/LEKKI 11/0001381/20 28TH JAN.. 2003
MRS. TINUKE OKUSAGA
198 AWOLOWO ROAD
IKOYI.
Dear Sir/Madam,
MILLENNIUM HOUSING ESTATE - LEKKI II
RE: COMPLETION OF 5 BEDROOM DETACHED HOUSES
This letter is to acquint (sic) you of the developments on the above subject
Estate wherein you have been provisionally allocated a unit of the 5 Bedroom
detached houses.
2. as you are probably aware, of all the contractors working on various types of houses on the" Estate, Messrs G. Cappa who were awarded the construction work of the detached houses have been very slow, inactive and have not given the job the urgency it deserved in spite of being duty paid!
3. Pursuant to the ineffectiveness of the company on the job, the Government, after several efforts to make them perform proved abortive, had to determine the contract.
4. The contract has now been re-awarded to equally reputable contractors with proven track records.
5. It is believed that all documentations for the new contracts will be completed soon, and, hopefully the contractors shall move to site by the middle of February 2003.
6. We appreciate the fact that you should be duely (sic) intimated of developments on the project and this shall form our pattern henceforth until the properties are handed over.
Please bear with us.
Thank you.
(signed)
ARC (MRS) O.A EJIWUNMI
PERMANENT SECRETARY
MINISTRY OF HOUSING.
From Exhibit C3 above, it is clear that what was offered to her is a Title of a Sublease of 90 years as per Paragraph 4 thereof. All submissions by the Claimant in respect of an outright sale as per the 1st issue raised by the Claimant's Counsel are thus discountenanced accordingly.
In this Court's view the main issues to be determined are:
1. Whether there was a binding, concluded and enforceable contract between the Claimant and the Defendants for a Sublease for 90 years; &
2. If so, whether the Claimant is entitled to her claims for specific performance, vesting of possession, injunction and damages.
The determination of the suit therefore rests mainly on the 3rd alternative relief of the
Claimant.
ISSUE 1
It is the contention of the Defendants that the terms "provisional offer" and "subject to transfer" show the agreement between the parties was still at negotiation stage notwithstanding the payment of N16 Million selling price paid by the Claimant, especially
since the Claimant herself admitted that there was no Deed of Lease executed in her
favour. Counsel referred to the following cases at Pages 3 & 4 of his Written Brief: U.B.A. LTD V. TEJUMOLA & SONS LTD (1988) 2 NWLR (PT 79) 662; LIMAN V MOHAMMED (1999) 6 SC (PART 1) 67 @ 75-76; LAW V JONES (1973) 2 AER 437; INTERNATIONAL TEXTILES INDUSTRIES (NIG) LTD VS ADEREMI & ORS (1999) 6 SC (PT 1) 1.
It was the further contention of the Defendants' Counsel, Mr. Lawal Pedro, that Exhibit C3 could not be a binding contract as it was devoid of some fundamental terms particularly the commencement date and the additional fees and costs to be paid. Counsel submitted further at page 5 of their Written Address that there is evidence that these terms were not certain from the uncontroverted testimonies of both CW1 & DW1 who testified as to a meeting with the then Minister of Housing where the Claimant (and others) were, intimated of a variation in construction cost necessitating an increase in the prices of the houses and the shift in the completion date of the buildings. He further submitted that this evidence was in line with paragraph 27 of the Amended Statement of Claim.
Counsel therefore urged the Court to hold that in the absence of an agreement of fundamental terms between the parties there was no binding contract for a sublease. He cited the case of ETUATAMI V OLAIYA (2001) 18 NWLR (PART 74?) @ 572 on this.
It is the submission of learned Silk for the Claimant on the other hand that the term "subject to contract" is irrelevant and inapplicable where both parties proceeded on the basis that there was a contract- He contended that the Claimant's Counsel had misconstrued the Court's decisions in the 3 cases cited by them namely UBA's case, Liman's case and International Textiles Industries case, especially the latter case. He therefore submitted that taking into consideration the dictum of Uwaifo JSC in that case, the phrase "subject to contract" has no effect in the current state of our Conveyancing Law and thus immaterial to the contract made between the parties as the letter subsequent to Exhibit C3 after the Claimant had paid the advertised price for the House, i.e. Exhibit C4, was not marked "subject to contract".
It was Learned Silk's further contention at Page 7 of his Brief that althoughJt is conceded that Exhibit C3 does not state a commencement date, the same document - Exhibit C3 - makes it ascertainable upon the delivery of possession to the Claimant and that there is uncontroverted evidence of the Claimant herself that she was allowed to enter to make improvements in her property. Counsel relied on the following cases at pages 7-9 of their Written Address on this: OKECHUKWU V ONUORAH (2000) 15 NWLR (PT 691) 597; NLEWEDIM V UDUMA (1995) 6 NWLR 385 @ 400; WESTLEY V WALKER (1878) 38 L.T 284
Counsel therefore submitted that delivery of possession took place on or around the 3rd day of June 2003 when the Claimant was allegedly "allowed entry" into the house to carry out improvements therein as evidenced by her uncontroverted testimony which ought he urged the Court to deem as admitted; Or alternatively on the 30th of June 2002, the date as per her ipse dixit when she was told that the houses would be completed.
He therefore urged the Court to hold that there was a completed contract orally and in writing and by part-performance and that the Court is bound to protect the equity created in favour of the Claimant by these so that same would not be defeated or frustrated by the Defendants and to grant an Order for Specific performance. He relied on the following cases at Pages 12 & 13 of his Written Brief: INTERNATIONAL TEXTILE INDUSTRIES V ADEREMI (1999) 8 NWLR Pg 268; OKECHUKWU V. ONUORAH (supra).
Finally on this point, learned Silk contended that contrary to the submissions of Defendants' Counsel, a formal Deed of Sublease is not necessary for the bindingness of the contract as it merely denotes the conveyancing stage - the second and concluding stage of the transaction which would trigger off the issue of "Transfer fees" as per Exhibit C3 Paragraph
2. He cited at page 14 of his Brief the case of BEST (NIG) LTD V BLACKWOOD HODGE (NIG) LTD (2001) 10 NWLR @ page 41 per Babalakin JSC where he held thus:
"in a sale of land there are two stages viz: (a) agreement to sell or buy, and (b) the, final stage of the sale culminating in deed of conveyance or allied instrument to transfer in interest bargain for. When parties go to court for specific performance they go after stage (a) above, the agreement of sale and this may be conditional agreement subject to consent of the governor being obtained as it is in this case".
In further response, Defendants' Counsel, Mr. Pedro, submitted as per their Reply Brief that the Court ought to discountenance ail submissions in respect of the evidence of CW1 as to alleged entry and improvements in the house as these were not particularized in the pleadings nor such specific claim for damages made in her pleadings. He relied on the cases of: OREDOYIN V. AROWOLO (1989) 4 NWLR (PT 114) 172 & AMODU V. AMODE (1990) 5 NWLR (PT. 150) 356.
Finally, he submitted that this is not a case where specific performance ought to be ordered as even if the Claimant is in possession which is not conceded, failure to pay the balance on the contract as demanded means there is no valid contract. In other words that a party must take both benefit and responsibility and that specific performance can only be granted to a party who has part-performed and is willing to further perform the outstanding terms of the agreement.
Having thoroughly considered the above-highlighted, and after a close and detailed perusal of the Claimant's pleadings, the first point to make as rightly observed is that there are indeed no specific claims or particulars of improvements or indeed specific claims for damages incurred for any improvements in the said disputed house in the Claimant's Amended Statement of Claim.
It is now trite that parties are bound by their pleadings. See on this the Supreme Court case of EJUETAMI V OLAIYA (supra) cited by Defendants' Counsel. As rightly submitted on this point, evidence in absence of any foundation of averments in pleadings go to no issue and must be discountenanced. See the following cases:
• CIVIL DESIGN CONSTRUCTION NIG. LTD V. SCOA NIG. LTD (2007) 2 S.C. 195
• OKOKO V. DAKOLO (2006) 7 S.C (PT III) 84
• WEST CONSTRUCTION CO. LTD V BATHALA (2006) 4 SC PART 1
• ADEMESO V OKORO (2005) 6 SC (PART 1) 51 esp. @ 58/9
• IHEANACHO V. CHIGERE (2004) 7 S.C. (PT II) 49
This evidence cannot be given any weight at all in that regard.
However, as to whether this evidence can be given probative value in respect of the
submissions on the Claimant's part-performance, this will be dealt with after this Court has determined the main issue of whether there is a binding & concluded contract between the parties herein.
On the main issue in dispute between the parties herein, the contention of the Defendants is that the contract is inchoate notwithstanding the payment of the selling price of N16 Million, as there are other terms outstanding for the allottee to fulfill (e.g. payments of other fees and charges anticipated but not yet fixed and communicated and the commencement date) before the contract becomes binding, hence the relevancy of the words and phrases "provisional offer" and "subject to contract".
The Claimant on the other hand contends that the contract was concluded and completed by the acceptance of the Claimant to pay the selling price and the payment of same. Thus, that those phrases are not relevant to the facts and circumstances of this case especially in the face of Exhibit C4 which is not so marked. It is her Counsel's further contention that the commencement date not stated in Exhibit C3 must be related to the date of handing over of possession as referred to consistently in the said Letter of Allocation - Exhibit C3.
From the above, it is clear that both Counsel are ad idem that for a binding Lease Agreement to exist, there must be certainty as to the length of the lease, rent and date of commencement must be clearly defined.
See the following cases: UBA V TEJUMOLA & SONS LTD (1988) 2 NWLR (PART 79) @ 662 esp. @ 678, (supra) /
• HARVEY V PRATT (1965) 1 WLR 1025 &
• MARSHALL V BERRIDGE 19 CH.D 233 @ 238-239 & 244-245d.
It is indeed the settled position of the Law that for a binding contract to exist, the elementary and well laid down principles of offer, acceptance, and consideration and of course intention to create a legal relationship must operate. See the Cases of:
• UBN LTD V SAX NIG. LTD (1994) 9 NWLR (PART 361) @ 150
• LAWAL V UBN PLC (1995) 2 NWLR (PART 378) @ 407. ,,
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