Alhaji Usman Dantata & Anor V. Mouktar Mohammed (2000)
LAWGLOBAL HUB Lead Judgment Report
In the High Court of Lagos State, the respondent (‘the plaintiff’) sued the appellants (“the defendants”) claiming as follows:
“(a) A declaration that the Plaintiff is the person entitled to certificate of occupancy dated 26th day of September, 1979 registered as No. 24 at page 24 in volume 1875 of the register of Deeds kept at the Lagos State Land Registry, Lagos, Nigeria.
(b) A declaration that the plaintiff is the person entitled to all that premises known as plot C Turnbull Road, Ikoyi now, 1 Jabita Close, Ikoyi, Lagos.
(c) A declaration that the agreement dated 28th of November, 1980 between the plaintiff and the 1st Defendant is null and void and not binding on the Plaintiff as the 1st defendant has breached in a fundamental manner the provisions of the said agreement.
(d) Possession of the said premises,
(e) An order of perpetual injunction restraining the Defendants, their agents and or any person whatsoever deriving authority from any said Defendant from dealing with and or interfering with the Plaintiff’s right in and over the aforesaid land and in any manner howsoever having the effect prejudicing and adversely affecting the rights of the Plaintiff in the land.”
The facts as averred in the statement of claim are that by an agreement in writing made between the plaintiff and the 1st defendant and signed on 28th November, 1980 these two panics agreed to exchange their respective properties. The plaintiff agreed to transfer “his title and ownership” in an undeveloped land situate at Ikoyi, Lagos (“the property”) to the 1st defendant while the 1st defendant also agreed to transfer his “title and ownership” over his landed property situate at Sharada, Kano (“the Kano property”), consisting of four acres, two of which have been developed by the erection thereon of a factory and office building, to the plaintiff.
Pursuant to the agreement, the plaintiff let the 1st defendant into possession of the property and gave consent to the 1st defendant to mortgage the property to the International Bank for West Africa in order to enable the 1st defendant to raise money to develop it. Apparently, the 1st defendant developed the property by building a house on it as it was further averred in the statement of claim that he occupied the house built on the property for a number of years before he leased it to the 2nd defendant. It was averred that the 1st defendant “has neglected to and refused” to yield up possession of the Kano property, notwithstanding that the plaintiff had made several demands on him to perform his own side of the bargain and the 1st defendant had always asked for more time to do so. The plaintiff, upon these facts, alleged in paragraph 18 of the statement of claim that the 1st defendant (sic) actions are in bad faith and have completely breached the agreement entered to between the Ist defendant and the plaintiff on the 28th November, 1980 and rendered the agreement null and void and not binding on the plaintiff.” The defendants filed their respective statements of defence. The 2nd defendant sub-joined to his own defence a counter-claim which the plaintiff answered by filing a reply to defence and counter-claim. Although not pertinent to the issues on this appeal, by the counter-claim the 2nd defendant sought adeclaration of the High Court that he was entitled to be registered as owner of the property or, in the alternative, that the plaintiff be ordered to execute an assignment in his favour.
At the close of pleadings, the 1st defendant applied to the High Court for an order dismissing the suit on that grounds that it disclosed no reasonable cause of action and that the reliefs snught by the plaintiff were “unobtainable in law”. Akinsanya, J., before whom the matter came,granted the application and dismissed the action on March 11, 1994. She was of the view that if breach of contract is alleged, nullification of the contract as claimed by the plaintiff by his relief (c) above, was not the appropriate relief to be sought. She regarded the other reliefs sought by the plaintiff, particularly the declaratory and injunctive reliefs, as “auxiliary reliefs” which, to my mind, is an apt way of describing a relief which merely supports the principal relief and cannot stand if the principal relief fails. In this case, she regarded relief (c) as the main relief and the others as merely supporting that relief and consequential to the grant of the main relief. She further held that in any event, the action was statute-barred.
On the plaintiffs appeal to the Court of Appeal from the decision of the High Court the two issues raised were whether the statement of claim disclosed a reasonable cause of action and whether the action was statute-barred. The Court of Appeal allowed the appeal of the plaintiff to the extent only that the learned judge was wrong in holding that as regards reliefs (a) and (b) the statement of claim did not disclose a reasonable cause of action and that the action was statute-barred. In regard to the other reliefs sought the appeal was dismissed.
Uwaifo. JCA. as he then was, who delivered the leading judgment of Court of Appeal (with which Musdapher and Pats-Acholonu, JJCA. agreed) after referring to the facts pleaded, said:
“I think in those circumstances which gave rise to litigation in an action brought by the plaintiff against the 1st defendant and any other person put in possession by the 1st defendant, the plaintiff can claim a declaration that he is the person entitled to a statutory right or certificate of occupancy of the property in Lagos, because that is a fact since he has not in law ceased to be the holder of the right of occupancy granted by the Governor to him over the land. He can claim a further declaration that he is the person entitled to the said land. Declaratory reliefs are meant to declare an existing state of affairs in law. It will be conceded that the other three reliefs sought cannot be supported by the facts in the statement of claim”.
He was also of the view that the action was sustained by the declaratory reliefs sought and expressed an opinion that the plaintiff could amend his statement of claim to seek further reliefs of specific performance and damages. In a unanimous decision, the Court of Appeal allowed the appeal in part as earlier stated. This appeal is taken by the defendants from the decision of the Court of Appeal. The only issue for determination in this appeal, as stated in the appellants’ brief of argument, is: “Whether reliefs (a) and (b) sought by the plaintiff disclosed reasonable cause of action in the sense that they are such that the court can grant against the 1st and 2nd defendants pursuant to the facts contained in the statement of claim.”
Although there was only one issue for determination, arguments advanced by counsel on behalf of the defendants fall into three heads which can be summarized as follows: first, there was no reasonable cause of action disclosed because (a) the plaintiff averred that he had let the 1st defendant into possession of the property pursuant to the agreement and that the latter had developed it: (b) the plaintiff has on his own showing admitted that he had transferred the property to the 1st defendant: (e) it would be inequitable to grant the declarations sought; secondly, since, as held by Akinsanya, J. reliefs (a) and (b) were merely ancillary to relief (c) in regard to which the court below has held that a cause of action had not been disclosed, the court below should have held that the other reliefs which were merely consequential to that relief could not be granted: and, thirdly, the suggestion made that the plaintiff could amend his statement of claim to claim specific performance is inconsistent with the opinion that reliefs (a) and (b) could sustain the action.
Counsel for the plaintiff argued that a cause of action being “a combination of the facts which the law will accept as giving the plaintiff a substantive right to entitle him to the remedy sought.”: the statement of claim had disclosed a reasonable cause of action as it set out the plaintiff’s legal right, the legal obligation of the defendants, the infringement by the defendants of those legal rights and the refusal of the 1st defendant to fulfil his legal obligations. It was argued that as the holder of the statutory right of occupancy in the property, the plaintiff is entitled to the declarations he sought. Learned counsel for the plaintiff submitted that a declaratory relief is an independent cause of action on its own. Substantial arguments were proffered to show that even as regards reliefs (c), (d), and (e) the statement of claim disclosed a reasonable cause of action.
Notwithstanding that a few interesting legal issues arise from this appeal, a disturbing feature of the entire matter is that although the agreement which engendered these proceedings had been entered into about twenty years ago, yet the action instituted as far back as 1992 to determine the status of the agreement and the rights of the plaintiff to property which was his and which he claims still remained his, remained bogged down at the interlocutory stage with appeals! Care must be taken to ensure that what is supposed to be the machinery of justice should not be made to grind so slowly that persons who stand to profit by delay, will succeed in converting the machinery of justice to one of injustice.
The jurisdiction of the High Court to grant declaratory reliefs is exercised pursuant to Ord, 22 r.5 of the High Court of Lagos State (Civil Procedure) Rules (“the Rules”) which provides that:
“No action shall be open to objection on the ground that a merely declaratory judgment or order is sought thereby and the court may make binding declarations of right whether any consequential relief is or could be claimed or not.”
From the provisions of this rule it is clear that declaratory judgments are not to be regarded as auxiliary or consequential. For a person to be entitled to a declaration he must show the existence of a legal right, subsisting or in the future, and that the right is contested. Put another way, what would entitle a plaintiff to a declaration is a claim which the court is prepared to recognise and which, if validly made, it is prepared to give legal consequence to. A claim for a declaration is itself a cause of action created by the rule. It was in this vein that in the persuasive authority of Eastham v. Newcastle United Football Club Ltd (1963) 3 All ER 139 at 153 Wilberforce, 1., said:
“In my judgment, the cases ….. establish that even though there is no cause of action apart from the rule under which declaratory judgments may be given (which is R.S.C., Ord. 25. r. 5) [now Ord. 15 r. 16] and even though no consequential relief can be given, the court has ample power to grant a declaratory judgment.”R.S.C. Ord. 25, referred to in the passage above, is similar to the Ord. 22 r. 5 earlier quoted above. Rather than be an auxiliary relief very often a declaration is itself a foundation for other reliefs.
In the words of Dip lock L.J. in Letang v. Cooper( 1964) 2 All ER 929,934, so often quoted in several judgments in this country as to have become part of our laws. The words cause or action mean “simply a factual situation the existence of which entitles one person to obtain … a remedy against another person.” Bringing the words [cause of action” to their ordinary English meaning level. Jacob. J., in Newport Association Football Club and others v. Football Association of Wales Ltd (1995) 2 All ER 87 at 92 defined the words as meaning: “a cause for an action in the courts to determine a disputed matter.”
Ord. 15 r.1 of the Rules permits the joinder in one action, of several causes of action unless the Court or judge is of the view that the causes of action cannot be conveniently tried or disposed of together. It was, therefore, an error to have proceeded, as the trial judge had, apparently, done, as if all the causes of action in the suit must be dependent one on the other, one being the principal, and the others being auxiliary. Learned counsel for the plaintiff was right when he submitted that the claim for declaration is an independent claim. Proceeding on that fooling, the correct approach was to consider the declaration sought as if relief(c) had not been pan of the claim. That, in effect, was the approach adopted by the Court of Appeal. Viewing the declaration sought as independent causes of action, in order to determine whether the statement of claim has disclosed a reasonable cause of action, what the court should consider are the contents of the statement of claim and not the extent to which one relief can co-exist with another. Having considered the content of the statement of claim, deemed to have been admitted, the question is whether the cause of action has some chance of success, notwithstanding that it may be weak or not likely to succeed. (see Thomas and others v. Olusofoye (1996) I NWLR (PI.18) 669.
In this case, the averments that the plaintiff had let the 1st defendant into possession of the property and that the latter had developed it cannot, by themselves, be seen as robbing the claim for the declarations sought of a chance of success. The argument that the plaintiff admitted that he had transferred the property to the 1st defendant is based on an error. What was averred is an agreement to assign and not an assignment. This case is clearly distinguishable from those cases in which, although the plaintiff averred that he had paned with the in the subject-matter of the action, he, nevertheless sought a declaration of title to the same. Although declaration is a discretionary remedy, the time to exercise a discretion whether to grant or refuse a declaration is upon a trial of tile suit. The contention that the court below should have held that there was no reasonable cause of action because it would be inequitable to grant a declaration is for that reason misconceived.
In the second branch of his argument, counsel on behalf of the defendants argued, in line with the opinion of the trial judge and in opposition to the view held by the Court of Appeal, that reasonable cause of action could not have been disclosed in relation to the declaration while it was held not to be disclosed in regard to relief (c) earlier stated. Learned counsel further argued that having held that there was no cause of action disclosed in regard to relief(c).the Court or Appeal was in error in nevertheless, holding that the two first reliefs could sustain the action. As earlier stated, it is not the other claims made or reliefs sought by the plaintiff that have to be looked at in order to determine whether a cause of action has been disclosed in regard to the declaratory reliefs (a) and (b). Strenuous efforts were made by counsel on behalf of the defendants to justify the conclusions of the learned trial judge in regard to reliefs (c) (d) and (e).
Counsel for the plaintiff argued to the contrary. He argued that even though the words “null and void” have been used in the claim and in the pleading, the court should look at the substance of what was being claimed and permit an amendment, if need be. It was argued that on the averments in the statement of claim, there was a reasonable cause of action disclosed, even in regard to relief (c) which was for a declaration “that the agreement between the Plaintiff and the 1st defendant is null and void and not binding on the Plaintiff as the 1st Defendant has breached in a Fundamental manner the provisions of the said agreement. “It would appear that the High Court and the Court of Appeal had fastened on the words “null and void” to hold that there was no reasonable cause of action disclosed in regard to relief(c). Were they right in that view I do not think so. Counsel for the defendants came nearest to the truth of the matter when he submitted that: “Although rescission is one of the remedies for breach of contract, it is not every breach of contract that entitles the Party aggrieved to rescind the contract. “He rightly appreciated that, in substance, the plaintiffs claim in regard to relief (c) was one of rescission of the contract. The learned of his submission, however, is that: “A breach of Agreement can neither lead to frustration of the contract nor to its being rendered void or illegal.” He further argued on the point thus: “The obligation of the Appellant under the Agreement is to transfer ownership of the Property in Kano to the Plaintiff. If he defaulted in fulfilling his own part of the obligation under the Agreement certain legal consequences may follow but the act of default does not make the agreement incomplete, non-existing, null and void or illegal. To be entitled to a relief annulling a contract, the aggrieved Party must show either that he was induced to enter into the contract by fraud or committed a material error or that the contract is illegal.” In so far as the learned counsel did not deny that rescission was a remedy available to the plaintiff. The submission docs not advance the case of the defendants much. The plaintiff’s case on his pleading, in a nutshell, is that, knowing the purpose for which he needed the Kano property which he agreed to exchange for the property, the 1st defendant had committed a serious breach of the agreement between the
parties by failing to perform his side of the bargain. Bad faith on the part of the 1st defendant was alleged. It was averred in paragraph 18 of the statement of claim that as a result of the 1st defendant’s complete breach of the agreement, the agreement had become “null and void and not binding on the Plaintiff.” What the two courts and counsel for the defendants seem to have found objectionable was the use of the words “null and void.” Though the words may not be considered apt. for a contract which is being rescinded de futuro, definition of “rescission” in terms of nullity has sometimes been made in terms of nullity. See, for instance, under “rescission” in Black’s Law Dictionary.
Be that as it may, notwithstanding the use of the words “null and void” in the claim and in the statement of claim, it is evident from the rest of the wording that the plaintiff’s case was that he was no more bound by the contract by reason of the serious breach committed by the 1st defendant. He did not use the particular word “rescind” but that does not matter since averments show clearly that the case put forward was that the contract has been rescinded.
Where one party has committed a serious breach of contract the innocent party has a right to rescind the contract. It has been said that the contract is in such circumstances rescinded de futuro. (see Halsbury’s laws of England. (4th edn) Vol. 9(1). para. 989). It has been said that in a case where it is alleged that B has the right to rescind for breach it must be determined (1) whether there has been a breach by A of a term or the contract or a mere misrepresentation; (2) whether the breach is sufficiently serious to justify rescission de futuro of the contract by B, as well as to claim for damages; and whether B has instead elected to affirm the contract (See Halsbury’s Laws of England, para. cited above). It follows that a pleading which contains averments that there has been a breach of contract and that the breach is sufficiently serious to justify a claim that the plaintiff is no more bound by the contract cannot be said not to disclose a reasonable cause of action.
When there is a serious breach of contract, one of the consequences is that the innocent party who has elected to rescind de futuro the contract is released from further obligations under the contract. The law is put succinctly thus in Halsbury’s (op. cit) para. 1003, as follows:
“lf the innocent party (B) can and does elect to rescind the contract de futuro following a breach by the other party (A), all the primary obligations of the parties under the contract which have not yet been performed are terminated .
…Thus the innocent party is released from further liability to perform; and, for the ‘primary’ obligation of the defaulting party to perform, there is substituted by operation of law a ‘secondary’ obligation to pay damages from the loss resulting from failure to perform the primary obligation.”
The High Court and the Court of Appeal had been comfortable with the conclusion that there was no cause of action disclosed in regard to reliefs (c), (d) and (e) because sufficient attention had not been paid: (1) to the real substance of the plaintiff’s claim, which had led them to put more emphasis than is called for on the use of the words “null and void” as part of the formulation of the relief sought, and, consequently, (2) to the rights of the innocent party when he elects to rescind de futuro the contract and the extent of the restitutionary remedies available to him upon such rescission.
The law recognises the restitutionary remedies of an innocent party who has opted to rescind de futuro a Contract by reason of the serious breach of the other party. I am content to adopt the statement of the law as contained in Treitel’s Law of’ Contract, 5th edn, at pp. 772,773 thus:
“A party who has wholly or in part performed his side of the contract and not received the agreed counter-performance in full may sometimes he entitled to restitution in respect of his own performance. Where this consists of a payment of money, the pay or will simply seek to get it back: where it consists of some other benefit he will claim recompense (or a quantum meruit) in respect of it.”
It is clear that where a contract is avoided for breach,the innocent party is entitled to restitution where there is claim of total failure of consideration. As stated in Halsbury’s (op. cit.) para 1129. “a complete failure of consideration in a contract occurs where one of the contracting parties fails to receive the benefits of valuable consideration which springs from the roots, and is the essence, of the contract”
Enough, I believe, has been said to show that, viewed properly, the statement of claim in this case disclosed a reasonable cause of action in regard to all the reliefs sought. The declaratory reliefs (a) and (b) were sought as judicial confirmation of the title in the property which the plaintiff claimed still remained in him and has not been transferred to the defendant; relief (c), notwithstanding the inappropriate use of the words “null and void”, which could have been deleted without damage to the plaintiff’s case was for a declaration that the contract was no longer binding by reason of serious breach by the 1st defendant; relief (d) is a restituitionary remedy following the rescission and upon total failure of consideration; and relief (e) is auxiliary to the first two declarations sought and was designed to be protective of the right to and title in the property which the plaintiff claimed was still vested in him.
One last, but rather inconsequential aspect of the defendants’ counsel submission is that the suggestion of the court below that the plaintiff should amend his statement of claim to claim specific performance is inconsistent with the opinion that the declaratory reliefs (a) and (b) could sustain the action. A gratuitous advice given by a court should hardly engender arguments on an appeal. An opinion expressed by way of advice to the parties is not part of the reasons of the decision and has nothing to do with the merits of the decision. None of the parties is obliged to accept and act on the advice, worthy of respect and attention though it may be. The court itself, embarrassing as it may sometimes be if it may have to depart from its own advice, does not need to feel bound in any way by such advice. This appeal can be decided without any need to comment on the advice given by the court below as to whether or not the plaintiff could amend his statement of claim and what such amendment should consist of. Nothing needs be said beyond drawing attention to some aspects of the matter. An election that the contract is rescinded is inconsistent with a claim for specific performance of the contract. The claim of the plaintiff being, in substance, the 1st defendant having committed a serious breach of the agreement, the contract was no more binding on him, a claim for specific performance could only he made in the alternative. To grant a claim for specific performance on the statement of claim as at present formulated will lead to a situation in which the plaintiff is, at the same time, approbating (affirming that the contract subsisted and should be specifically performed) and reprobating (asserting it has been determined by serious breach and restitution should he made.) At the end of the day, it is for counsel to the plaintiff to know which option best suits his client’s interest.
An unusual, but, I daresay, salutary feature of the arguments advanced by counsel for all the parties on this appeal, is that although there has been no cross-appeal in relation to the opinion of the Court or Appeal that there was no cause of action in relations to reliefs (c), (d) and (e), arguments have been fully and extensively advanced for and agaainst that conclusion. As has been seen. a consideration of those arguments has….. occupied a considerable part of this judgment and it has been found that the Court of Appeal, as the High Court was, wrong in the view they held in this regard. That error should not he left uncorrected. I think this is an appropriate occasion to invoke the combined provisions of Ord.8 rr 2 & 12 of the Supreme Court Rules which will be very sparingly invoked, and make an order which the court below ought to have given or made “notwithstanding that no notice or appeal has been given in respect of any particular party to the proceedings in that court, (i.e. the court of first instance), or that any ground for allowing the appeal or for affirming or varying the decision of the court is not specified in such a notice.” It is just to ensure the determination on the merits of the real question in controversy between the parties that an order be made sel1ing aside the ruling of the High Court in its entirely. This has the effect of restoring all the reliefs claimed.
The result of all that has been said is that the appeal will be dismissed and the order or the Court of Appeal varied. But before I make an order, it is pertinent to express profound concern at the injustice that may be occasioned to the panics, particularly to the plaintiff. Should this case not be heard speedily and determined with utmost dispatch As earlier said, and relying only on the averments in the statement of claim, the agreement between the parties was made in 1980. The plaintiff who agreed to exchange the properly for the one in Kano for the purpose or being usefully employed in retirement, has given out possession of the property in part performance of his own side of the bargain without having anything in return from the 1st defendant for a period now spanning twenty years. Still relying on the plaintiff’s pleading only, the result is that, if the averments in the statement of claim are true for twenty years the 1st defendant had, in effect, treated the agreement as if it did not exist, holding on to the property as well as the Kano properly. Whatever the defence or the defendants to the plaintiff’s action may be, it is imperative in the interest of justice that this cast be given the most accelerated hearing possible in the High Court of Lagos State.
For the reasons which I have given, I would dismiss the appeal. I vary the decision of the Court or Appeal only to the extent that the plaintiff’s appeal to that court is allowed in its entirety, and not in part, and not subject to any such terms as indicated in the judgment of Uwaifo JCA. as he then was, with which the other members of that court agreed. The respondent (“the plaintiff’) is entitled to the costs of this appeal. I award N10,000 cost to the respondent.