Help (Nig) Ltd V Silver Anchor (Nig) Ltd (2006)

LAWGLOBAL HUB Lead Judgment Report

KATSINA-ALU, J.S.C.

This is an appeal by Help (Nigeria) Limited from a judgment of the Court of Appeal given on 12th December, 2000. The appellant company Help (Nigeria) Limited as plaintiff sued the respondent Company Silver Anchor (Nigeria) Limited as the defendant claiming against it the following reliefs:-

“1. A declaration that the plaintiffs are entitled to the assignment of the property known as Plot B2 at No.84 Ozumba Mbadiwe Street, Victoria Island, Lagos and comprised in a certificate of occupancy registered as No.19 at page 19 in Volume 1981 C at the Lands Registry, Ikeja.

2. An order for specific performance of the sale Agreement dated July 22, 1988 and order directing the defendants to execute a Deed of Assignment in plaintiff’s favour and to take all necessary steps by obtaining the consent of the Military Governor of Lagos State to the assignment of the said property known as Plot B2 at No. 84 Ozumba Mbadiwe Street, Victoria Island, Lagos and registered as No.19 at page 19 in Volume 1981 at the Lands Registry, Ikeja.
3. A declaration that the purported termination of the contract of sale of the aforesaid property vide the Defendant’s Solicitor’s letter of 25th November, 1988 by the defendants is wrongful, null, void and of no effect whatsoever.
4. A declaration that any purported sale, transfer, assignment or alienation to any person is equally null, void and of no effect.
5. A perpetual injunction restraining the defendants, their servants, agents, privies or otherwise from selling, leasing, assigning or dealing or alienating the said property to any other persons.
6. The sum of N500.00 for every day of default by the defendants commencing from 25th November, 1988 when the ultimatum given in plaintiff’s former Solicitor’s letter of 17th November 1988 expired to the date of compilation, representing agreed liquidated damages i.e. pre-estimated damages for non-completion of the said contract.

In the Alternative

7. The sum of N6,000,000.00 being special and general damages for breach of contract.

8.The plaintiff claims the sum of N320,000.00 being the refund of the part payment/deposit made by the plaintiff for the purchase of the said property, N600,000.00 loss of rent, N5,000,000.00 escalation cost, and other refunds as contained in the particulars herein together with interest at the rate of 35% per annum.” The trial court in its judgment held that the plaintiff failed to prove its case and consequently dismissed the plaintiff’s claim.

The trial court however directed that the sum of N320,000.00 which the plaintiff had paid as a deposit be refunded with interest at the rate of 21% per annum from the date of judgment till full liquidation.

On appeal to the Court of Appeal that court found that:-

“The conclusion to be arrived at on the evidence is that there was indeed a firm agreement between the parties that the defendant would sell and the plaintiff would buy an area of land depicted as B2 on exhibit B1 which said area measured 1924.930 sq. metres. I also hold that it was for this area of land that the plaintiff made the deposit of N320,000.00. I also hold that the plaintiff remained willing and ready to conclude the contract by paying the balance of N1.18m until the defendant improperly brought the contract to an end.”

The court below then allowed the appeal and set aside the judgment of the trial court. The court below proceeded to order as follows:-

“I order that defendant shall refund to the plaintiff the sum of N320,000.00 deposited for the purchase of the property. The defendant/respondent shall pay interest on the said amount at the rate of 21% per annum with effect from 18/1/89 when the case was filed to the date of this judgment and thereafter at 6% per annum until the judgment debt is fully liquidated.”

The plaintiff has further appealed to this court against the refusal of the Court of Appeal to make an order of specific performance. Both parties filed their respective briefs of argument. The plaintiff on page 2 of its brief of argument submitted two issues for determination in this appeal. These read:-

1. Whether in the proper exercise of its discretion, it is right, proper, fair and just for the lower court to refuse a decree of specific performance, in the light of its findings, particularly at pages 221 (line 8) to 224 (lines 1-34) and in view of the evidence on record.
2. Whether the Court of Appeal’s refusal to award the N500.00 per day claim for default is justified having regards to the state of evidence on record.

The defendant adopted the plaintiff’s above stated issues for the determination of this court.

I will deal with issue No.1 first. In its brief of argument the plaintiff contended in a nutshell that the Court of Appeal was in grave error when it failed to order specific performance after holding that the defendant breached the contract. The plaintiff criticized, at some length, the reasons the Court of Appeal gave for not ordering specific performance.

For its part, the defendant submitted that the plaintiff was not entitled to an order of specific performance on the main ground that the plaintiff had claimed in the alternative the refund of N320,000.00 with interest as well as damages. It was pointed out that the trial court as well as the lower court did order the refund of the said sum with interest. The lower court, however, noted that it was not in a position to order damages on the ground that the plaintiff did not lead any evidence in respect of damages.

The general principle of law is that specific performance is a discretionary remedy. The discretion is judicial discretion and is exercised on well settled principles. The jurisdiction to order specific performance is based on the existence of a valid, enforceable contract. The courts will not decree specific performance if the contract suffers from some defect such as informality, mistake or illegality which makes the contract invalid or unenforceable: See Chitty on Contracts Vol. 1, 26 Ed. P. 1202. Specific performance may also be refused in case of severe hardship to defendant. In the English case of Patel v. Ali (1984) ch.283, specific performance of a contract for the sale of a house was refused after a 4 year delay. In International ile Industries (Nigeria) Limited v. Dr. Aderemi & Ors. (1999) 8 NWLR (Pt.614) 268 this court held that:-

“To sue for specific performance is to assume that a contract is still subsisting and therefore to insist that it should be performed. That would mean that the plaintiff would not want it repudiated unless for any reason the court was unable to aid him to enforce specific performance of it. He may then fall back on the remedy at common law for damages.”

In Afrotech Tech. Services (Nigeria) Limited v. M.I.A & Sons Limited & Anor (2000) 15 NWLR (Pt.692) 730 at 790 this court held that:

“The fundamental rule is that specific performance will not be decreed if there is an absolute remedy at law in answer to the plaintiff’s claim, that is to say where the plaintiff would be adequately compensated by the common law remedy of damages.”

In the present case, the Court of Appeal in the course of its judgment, stated as follows:-

“In cases where there is a contract for the sale of land, the court is always inclined to grant specific performance. This is because the land being sold may have a peculiar value or significance to the purchaser or lessee. This is the more so in a case as this where the land appears to be choice and abutting the coastal lagoon.

However, there is a problem to the grant of an order for specific performance. The land has since lost its original character. The evidence of DW1 at page 108 of the record of proceedings goes thus:-

“There is a shopping complex on exhibit B2. I think four floors. It was built in 1996. The defendants own the buildings on the land.”

The first reaction I have is that perhaps it should serve as a lesson to the defendant to decree specific performance for it was not a wise thing for it to have developed such a mighty structure on a land subject to a litigation in Court. The redeeming feature is that fact that this dispute had arisen in 1988 and the case had dragged on in court for at least eight years till 1996 when the structure on the land was put up. Perhaps both frustration and desperation set in and impelled the defendant to adopt an unwise approach. This is more understandable from the angle that the defendant had wanted to sell the land to raise money and been indebted to First Bank Nig. Ltd. to which the initial deposit of N320,000.00 was paid to secure the release of the title documents. In all the circumstances I think it too harsh on the defendant to order specific performance.

So, how does one compensate the plaintiff. The plaintiff had alternatively to specific performance claimed pecuniary damages. It is certainly entitled to the refund of N320,000.00 which was initially deposited against the purchase. All the all other item of the claim for damages were not supported by any evidence. I am aware that in exhibit ‘J’ the parties had agreed that any party in default resulting in liability to conclude the contract at the agreed completion date will pay to the other a sum of N500.00 per day “for such number of days of such default until same is determined”. It seems to me that the agreed N500.00 per day was not fixed by way of compensation or damages payable to either of the parties in the event of inability to conclude the contract or breach. Rather, it was a provision to ensure compliance with the agreement on date of completion. It cannot therefore be a safe basis for the calculation of damages.”

I cannot agree more. The facts of this case are largely not in dispute. The defendant who owned a landed property at 84 Ozumba Mbadiwe Street, Victoria Island wished to sell a portion of it. There were two bungalows on the property. The property was partitioned into two for the purpose of the proposed sale. One portion was described as B1 and the other B2. The plaintiff employed PW 1 an estate agent and valuer to find a buyer for it. The plaintiff showed interest in purchasing the area described as B2. Its dimension was 1924.930 sq. metres. The purchase price was agreed at N1.5m. The plaintiff paid a deposit of N320,000.00 leaving a balance of N1.18m to be paid on completion. The completion date was 20/9/88. Earlier an Agreement of Sale exhibit C was prepared and signed by both parties on 22/7/88. The completion date of 20/9/88 was embodied in exhibit ‘C’.

The plaintiff’s cheque for N320,000.00 upon presentation on two occasions was dishonoured. Later however the cheque was paid. The first meeting did not hold and it became necessary to shift the completion date to 27/9/88. The plaintiff carried out an inspection of the property after relocation and it was discovered that the relocated office had encroached on the land offered for sale. The result was that the plaintiff had an area of land less by 300m than he had bargained for. The plaintiff insisted on the whole property offered to it. The parties called a meeting but it did not hold.

On 17/11/88, however, the plaintiff’s lawyers in a letter exhibit J to the defendant’s lawyers served a notice that the transaction be concluded within 7 days. That was when the defendant’s solicitors vide a letter exhibit J2 dated 25/11/88 to the plaintiff’s solicitors said that the contract was determined because of the failure of the parties to conclude the transaction. It was in these circumstances that the plaintiff brought this action.

It can be seen clearly that both parties contributed to the failure to complete the transaction. First, the plaintiff issued a cheque for the sum of N320,000.00 and twice it was dishonoured. Secondly, when the defendant discovered that the partitioning was not done according to plan, it informed the plaintiff with a view to reach a compromise. In order to do that, another meeting was fixed for 27/9/88. The plaintiff failed to attend. Thirdly, it will also be seen clearly that as a result of the intransigence of the parties, this case needlessly dragged on for 6 years before the commencement of this action. Fourthly, the plaintiff claimed in the alternative a refund of the part payment of N320,000.00 and both courts below ordered the defendant to return the said sum to the plaintiff. The claim for the refund of the part payment in my view, negated the claim for an order of specific performance. By this singular act, the plaintiff in my considered opinion had jettisoned his claim for an order of specific performance. What the plaintiff, in effect, is saying is that if he could not successfully insist on the defendant performing his part of the contract, he would accept the repudiation and ask for damages. I am in agreement with the Court of Appeal that in the circumstances of this case it was not in a position to aid the plaintiff. It was right when it refused to order specific performance. The plaintiff’s best bet was to fall back on the common law remedy of damages. Now, to the issue of damages. It is a fundamental rule that specific performance will not be decreed where the plaintiff would be compensated by the common law remedy of damages. See Afrotech Tech. Services (Nigeria) Limited v. M.I.A & Sons Ltd. & Anor. (supra). It seems obvious to me that from the plaintiff’s amended claim it was aware of this position of the law. This is because it had an alternative claim in damages and the refund of the part payment of the sum of N320,000.00 with interest for the purchase of the parcel of land in question. The refund was ordered by the two lower courts. As regards the other items of the claim for damages, the court was “unable to award damages or to grant specific performance.”

Perhaps it is necessary to read again the alternative claim for damages for ease of reference. The claim reads:-

“vii. The sum of N6,000,000.00 being special and general damages for breach of contract.

viii. The plaintiffs claim the sum of N320,000.00 being the refund of the part payment/deposit made by the plaintiffs for the purchase of the said property, N600,000.00 loss of rent, N5,000,000.00 escalation cost, and other refunds as contained in the particulars herein together with interest at the rate of 35% per annum.”

I must say that I have read through the evidence of the plaintiff’s witnesses. It will be seen clearly that none of them gave evidence in proof of the facts pleaded on damages. It must be said that pleadings in themselves cannot constitute evidence. Mere averment without evidence in proof of the facts pleaded is no proof of the facts averred therein when they have not been admitted. See Kalio v. Woluchem (1985)1 NWLR (Pt.4) 610 and Adegbite v. Ogunfaolu (1990) 4 NWLR (Pt. 146) 578 at 590. If a party to an action fails to or does not lead evidence in support of the averments in his pleading, the averments would be taken as having been abandoned.

For this reason therefore I, too, am unable to award damages.

The first issue in my view disposes of the appeal. I consider it unnecessary to consider the second issue as well as the cross-appeal.

In the result this appeal is dismissed. I affirm the decision of the Court of Appeal given on 14th December, 2000. The cross-appeal is struck out. There shall be costs of N10,000.00 to the defendant.

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SC.220/2001