Yekini Yusuff & Anor. V. International Institute of Tropical Agriculture & Anor. (2008)

LawGlobal-Hub Lead Judgment Report

M. D. MUHAMMAD, J.C.A.

This is an appeal against the ruling of the Oyo State High Court coram M. O. Adio J delivered on 13th April, 1999 dismissing the Plaintiffs Interlocutory application for the following:

(i) An order restraining the Defendants from selling, assigning, transferring or disposing of the generating sets subject of this action pending the determination of this action;

(ii) Alternatively an order setting aside any sale, assignment, transfer or disposal of any of the generating sets subject of this action is so far any such dealing with the generating sets occurred during the pendency of this action; and

(iii) An order directing the defendant to keep the machines safe and secure on their premises at I.T.T.A. Ibadan, or alternatively transfer same into the custody of the court pending the determination of this action.

The Plaintiffs application for the above reliefs was filed on 6/11/98 consequent upon the writ taken out by the Plaintiff on 7/10/98 to commence the substantive suit against the Defendants. The facts in support of Plaintiffs’ application gathered from the affidavit in support of the application show that Defendants had advertised the sale by auction of certain generating sets. Following the invitation for tenders, Plaintiffs bided for the purchase of 4 lots for the sum of N6,622,126:00k. In keeping with the terms of the tender, the Plaintiffs/Applicants paid a N10,000.00k non refundable deposit per lot as well as a N40,000.00k refundable deposit per lot. They paid a total deposit sum of N20,000.00k the Defendants.

The Bids were eventually opened and Plaintiffs/Applicants were informed thereafter of the success of their bids by the 2nd Defendant who also asked them to pay up the balance of the purchase sum. The deposits earlier received by the Defendants from the Plaintiffs constituted part payment of the purchase price.

Instead of receiving the balance from the Plaintiffs who had approached the 2nd Defendant to pay, the latter became hedgy. The 2nd Defendant asked the Plaintiffs to pay One Million, Five Hundred Thousand Naira, the price offered by another bidder for the entire lots. Plaintiffs indicated their interest to pay for the entire lot to the 2nd Defendant. Rather than allow the Plaintiffs/Applicants pay up, 2nd Defendant further jerked up the price to Two Million, One Hundred Thousand Naira and threatened to sell off the equipments to other willing purchasers if the amount was not promptly paid for. To forestall this sale, the Plaintiffs took out a writ against the Defendants and subsequently filed the instant application.

The Defendants opposed Plaintiffs/Applicants application. They relied on facts contained particularly in paragraph 4(v)-(xiv), 5, 6, 7, 8 and 9 of their counter affidavit. Therein, Defendants/Respondents conceded that Applicants had bidded for four lots out of the generating sets following the advertisement in respect of the sale as contained in Exhibit BDD1 annexed to the counter affidavit. The offer made by the Applicants for the four lots they won was however considered low by the committee set up to dispose off the generators. The initial bidding was cancelled following similar conclusion by the committee on bids regarding the other lots. Eventually, the committee cancelled the entire bids and delegated 2nd Defendant to negotiate higher prices from prospective buyers. 1st Applicant was informed about the cancellation and advised by the 2nd Defendant/Respondent to collect both the refundable and non refundable deposits they made. 1st Applicant went into negotiation with the 2nd Defendant for prices in respect of 1st, 2nd, 3rd, 4th, 5th and 14th lots. Similar negotiations also took place between 2nd Defendant/Respondent with other interested buyers. At the end, 1st Applicant improved on the offer of N21 Million Naira made by one Mohammed Hassan. 1st Applicant and 2nd Defendant/Respondent concluded negotiation with an offer of N21.1 Million Naira for lots 1, 2, 3, 4, 5 and 14. 1st Applicant picked up a letter of Intent written by 1st Defendant/Respondent on 31st August, 1998 with a promise to sign and return same. 1st Applicant never did. Instead, Applicant’s Counsel sent in Exhibit C threatening legal action. On 21st October, 1998, 1st Defendant/Respondent accepted a N10 Million Naira offer made by another buyer, Nucleus Ventures Ltd. and faxed a letter of Intent in their favour the same day, Nucleus Ventures Ltd paid for the lots vide an Inland Bank draft dated 27th October 1998 but delivered to and received by the Defendants the following day. With the sale scaled and confirmed by Exhibit BDD6 annexed to Defendant’s counter affidavit, Nucleus removed the generators immediately.

Counsel on both sides advised the lower court. In a precise but well considered ruling the court after reviewing the facts on both sides at pages 58-59 of the record inter alia ruled as follows:-

“I am also not going to express an opinion one way or the other whether there was a contract of sale which is absolute or conditional or whatever…. The interest of a third party – intervening at a certain stage is also left open, the consequences of this may be material at the time of final decision in this case, I was addressed extensively by both Counsel on those issues, but with the deference from (sic) them. I am not competent to proffer any views on them at this interlocutory stage”.

The court proceeded then to summarise the applicable principles governing the grant or refusal of interlocutory applications. It rightly stated that the first Issue for it to consider is whether there is a serious issue to be determined in the substantive suit. Put differently, whether Plaintiffs legal right has been established. The court continued in its ruling thus:-

“Once this is found to be so, the court shall then proceed to consider where the balance of conveniences lies. Where damages will be adequate remedy and the Defendant would be in a financial position to pay the damages, interlocutory injunction will not be granted even if the Plaintiffs claim is shown to be strong at the stage of making the application for the grant of an interlocutory injunction”.

Before it done, the court noted that where however damages would not provide the Plaintiff/Applicant with adequate remedy in the event of his success in the substantive suit, the court would then consider the sufficiency of the compensation the Plaintiff undertook to provide as damages for the loss the Defendant would have sustained at the end of the suit following the grant to the Plaintiff who eventually losses out after acquiring the injunctive order. The court captured the settled principle that it had the absolute discretion to grant and refuse the applications and concluded thus:-