Knight Frank & Rutley (Nigeria) & Anor. V. Attorney-general Of Kano State (1998)
LAWGLOBAL HUB Lead Judgment Report
UWAIS, C.J.N.
By a written agreement entered into on the 10th day of November 1983 between the then Commissioner for Finance, Kano State, and the appellants the latter were to “prepare a valuation list of all rateable hereditaments for the collection of property rates in the area verged GREEN on the attached plan and the NEW EXTENSION (No Man’s Land) area of Kano State.” The agreement provides that the appointment of the appellants, by the Commissioner, who acted on behalf of Kano State Government, to prepare the valuation list should be deemed to have taken place retrospectively with effect from the 13th day of November, 1980.
Clause 12 of the agreement reads:
“ARBITRATION – Every dispute arising from this agreement shall be referred to an Arbitrator to be generally accepted by the parties: failure to agree on the appointment of an Arbitrator, either party may apply to the Chief Judge of the State for the appointment of an Arbitrator, in which case the provision of Arbitration Law of the Kano State of Nigeria shall apply.”
And clause 13 provides that the agreement may be determined by either party thereto on giving at least a month’s notice to the other in writing of the intention to terminate the agreement.
On the 9th day of December, 1987 the Commissioner for Finance wrote a letter to the appellants in which he stated in part that “the Government is left with no option than to rescind and determine the valuation contract entered with you.” The reason for this action being that the valuation of the hereditaments requested by the Government of Kano State fell within the responsibilities of Local Governments of the State and not the State Government.
The solicitors of the appellants – J. B. Majiyagbe & Co. wrote a letter on 25th January, 1988 demanding that the matter be referred to an arbitrator in accordance with the terms of the agreement stated in clause 12 therein. The solicitor of the Government (Acting Deputy Director of Civil Litigation) replied contending that the agreement between the parties was void since it was ultra vires the Government and therefore no valid arbitration could be conducted in the circumstance. The reply ended as follows:-
“‘The Government does however recognise the usefulness of the exercise and does not discountenance the possibility of the Local governments being interested in the project which falls entirely within their constitutional authority. If your clients are interested, it is possible to open discussion along these lines with the Local Governments concerned.
We look forward to your response on this please.”
As the proposition was not accepted by the appellants, their solicitors wrote a letter to the Chief Judge of Kano State on the 16th day of March, 1988 requesting him to appoint an arbitrator to look into the dispute between the parties. The Chief Judge appointed one Mrs. Fatima Kwaku, a private legal practitioner, as the arbitrator. The solicitor to the Government wrote a letter to Mrs. Kwaku on the 20th day of April, 1988, narrating to her the background to the dispute between the parties and drawing her attention to the fact that her appointment to arbitrate between the parties was improper and that she had no jurisdiction, even if she was validly appointed, to rule on the validity of the contract between the parties since she was to derive her authority from a contract that was void. The letter ended by advising that if Mrs. Kwaku was inclined to proceed with the arbitration the Government would on her first sitting request her to state these questions under section 15 of the Arbitration Law, Cap. 7 of the Laws of Northern Nigeria, 1963, applicable in Kano State, for the opinion of the High Court of Kano Stale. And so an originating summons was taken out of the High Court against the appellants by the respondent on the 7th day of July, 1988.
Meanwhile the respondent brought an application for an interim order to restrain Mrs. Kwaku from sitting as an arbitrator to the dispute between the parties. This was refused by the court as the learned trial Judge (Saka Yusuf, J.) felt that the application should have been brought against the appellants who asked for the arbitration and not the arbitrator.
Two reliefs were asked for by the respondent in the originating summons. The first was for the trial court to set aside the appointment of the arbitrator. The second was for the High Court to declare that the contract between the parties was null and void because the Commissioner for Finance who entered into the agreement with the appellants for and on behalf of the Government of Kano State lacked the capacity to do so. The first leg of the claim was regarded dealt with in the ruling given by the learned trial Judge on the respondent’s application for interim injunction to restrain the arbitrator from sitting. As the second relief was purely a legal question, no witness’ evidence was adduced. The trial court was simply addressed by counsel.
In his ruling, the learned trial Judge made the following findings:-
“It is clear from these various submissions, both counsels( sic) agreed that section 7 of the 1979 Constitution has created all Local Governments throughout this country while sub-section (5) assigned various functions to these Local Governments. It is necessary to examine these provisions to see to what extent are these functions. Section (1) (b) and (j) of Schedule 4 to the Constitution provide-
‘1. The main functions of a Local Government Council are as follows:
(b) Collection of rates, radio and television licences;
(j) Assessment of privately owned houses, or tenement for the purposes of levying such rates as may be prescribed by the House of Assembly of a State.’
Having regard to the above provisions of the Constitution it is undisputably plain that the questions (sic) of levying tenement rates and assessment of privately owned houses for that purpose are some of the functions assigned to the Local Governments since section 1(b) and (j) of the Fourth Schedule has squarely placed the levying of rates and assessment of houses at the disposal of Local Governments. What then are the relationships between the Local Government and the State Government vis-a-vis the provisions of section 7 of the Constitution. Section 7 also provides:-
‘The system of Local Government by democratically elected Local Government Council is under this Constitution guaranteed and accordingly the Government of every State shall ensure their existence under a Law which provides for the establishment, finance and functions of such councils.
Thus the Constitution has guaranteed the existence of a Local Government once one is established. Government of Kano State, in its Edict No. 5 of 1977 established all the Local Governments throughout the State. By sections 3 and 4 of the same Edict, the existence of these Local Governments are (sic) made as separate entities from the State Government. They are independent bodies whose functions are also well set out and defined. Section 76 of the same Edict made all the Local Governments the rating authorities within their respective areas of operation while sections 88 and 89 empowered them to cause the value of every tenement subject to the rate in their respective areas to be ascertained and assessed by an appraiser. These various provisions have therefore made it clear that all the responsibilities for the levying and assessing the value of tenements which are subject to the rate are vested only in the hands of the Local Governments. The position of these Local Governments with regards (sic) to the contracts in the discharge of their function is made clear by section 42 of the same Edict, when it provides:-
‘Subject to the provisions of this section, a Local Government may enter into any contract necessary for the discharge of any of its functions.”
The learned trial Judge concluded his ruling in favour of the plaintiff (respondent herein) by stating thus:-
“Finally, as I have pointed out earlier in this ruling, the Commissioner for Finance has no power either to usurp the functions of the Local Governments or to enter into any contract which they too are competent under the law to do. The contract between the Commissioner for Finance and the defendants (appellants herein) therefore are ultra vires and consequently the contract is void and in the eyes or the law non-existant notwithstanding whether or not the contract had been performed.”
Dissatisfied with the decision the defendants appealed to the Court of Appeal. in its decision, the Court of Appeal (Uthman Mohammed, J.C.A., as he then was; Ogundare and Achike, JJ.C.A.) adverted (per Uthman Mohammed, J.C.A., who delivered the lead judgment) to the Fourth Schedule of the 1979 Constitution and the provisions of section 76 of Kana State Local Government Edict, No.5 of 1977 which provides as follows:
“76. Every Local Government shall for the purposes of this part be the rating authority for its area.”
and found thus:-
“It has clearly been shown here that the Local Government Councils, in Kano State, have been conferred with the power of assessment of privately owned houses or tenements for the purpose of levying rates…………….I believe that once the State passes a legislation assigning the function of valuation of tenement rates to the local Government as the Constitution has directed, only the Local Government Council will have the power to deal with that subject matter. The State (Government) has no power to deal with the matter and the Local Government Council cannot, even if it wants to, divest itself of those powers.”
In dismissing the appeal the Court of Appeal held, as per Uthman Mohammed, J.C.A.
“Since the Kano State Government has no power over assessment of tenements rates, it goes without saying that it has no jurisdiction to enter into an agreement with any body or person for the valuation of rateable hereditaments……………….. it should be noted that this contract is a void one and has been, quite rightly, declared so by the learned trial Judge.”
Further aggrieved by the decision, the appellants have now appealed to this court contending in the 3 issues they postulated in their brief of argument as follows:-
“1. Whether the Court of Appeal was right when it affirmed the ruling of the High Court in which that court had held that the Commissioner for Finance, on behalf of Kano State Government had no competence to enter into the contract dated 10th November, 1983, which contract was for that reason null and void.
- Whether the Court of Appeal was right when it upheld the decision of the trial court that the contract dated 10th November, 1983 was void because of the impossibility of performance.
- Whether the Court of Appeal was correct when it upheld in effect that Kano State Government could refuse to honour its obligation under the contract having taken benefit of it and part performed it by paying an initial deposit of N100,000.00.”
The respondent failed to file a brief of argument. At the hearing of the appeal both the appellants and the respondent were not represented by counsel. In addition none of the appellants was present in court. Since the appellants had filed a brief of argument, we deemed the appeal argued in accordance with the provisions of Order 6 rule 8(7) of the Supreme Court Rules, 1985 which states:-
“(7) When an appeal is called, and it is discovered that a brief has been filed for only one of the parties and neither of the parties concerned nor their legal practitioners appear to present oral argument, the appeal shall be regarded as having been argued on that brief.”
I think the important point which arises from the issues for determination formulated by the appellants in their brief of argument is: whether the respondent acted ultra vires in entering into contract with the appellants for the purpose of preparing a valuation list of rateable hereditaments in the municipal area of Kano. If the answer is in the negative; whether the respondent is liable under the contract between it and the appellants.
Arguing in the appellants’ brief of argument, it is submitted that there is nothing in the Constitution or any other law which makes the contract illegal. It is contended that the reason for the preparation of the valuation list was for the collection of property rates and, therefore, it falls short of who was to do the collection of the rates. It is argued that it cannot be presumed that Kano State Government was undertaking the collection of the rates since it had no constitutional power to do so. It is canvassed that courts will presume the constitutionality of acts done by the National Assembly, State Assembly and Executive. Authorities are cited in support of the argument; they include Dahiru Cheranci v. Alkali Cheranci 1960 NRNLR 24; Benson v. Onitiri (1960) 5 F.S.C. 69; (1960) SCNLR 177; R. v. Thomas Ijoma, (1960) WNLR l30 and Ashimowu Aduke v. Oyenubi (1968) NMLR 477 at P. 481. It is then submitted that it must be presumed that Kano State Government knew the limits of its constitutional powers when it entered into contract with the appellants. It would not therefore deliberately flout constitutional provisions.
It is further argued that it is within the power of Kano State Government after receiving the Valuation List to pass it on to the Local Governments for their use and the Local Governments would be free to use the list or otherwise. The position would have been different, it is submitted, if the contract between the parties had been for the collection of rates.
The appellants contend that at the time the parties entered into the contract, they both believed that the respondent had the legal capacity to enter into the contract. Consequently the respondent benefitted under the contract and permitted the appellants to expend time and resources for four years. Therefore the contract was not frustrated for impossibility of performance as found by the Court of Appeal on the authority of Sheikh Brothers Ltd. v. Ochsner. (1957) A.C. 136.
Finally it is argued that the Court of Appeal was wrong to have refused to consider what remuneration should be paid to the appellants for the work done under the contract. It is submitted that the fact that the appellants had done some work under the contract, albeit, as the court below found, under a void contract, did not disentitle them to reasonable compensation for work done. Reliance is placed on the case of Craven-Ellis v. Canons Ltd. (1936) 2 K.B. 403.
It is urged upon us that we should allow the appeal, set aside the judgments of the lower courts, dismiss respondents originating summons and make an order that the arbitration sought for by and granted to the appellants should hold.
In determining whether the contract was ultra vires both the trial court and the Court of Appeal relied inter alia on the Constitutional provisions of section 7 of the Constitution of the Federal Republic of Nigeria, 1979.
Now by section 7 subsection (5) of the Constitution of the Federal Republic of Nigeria, 1979 (Cap. 62) the functions which can be conferred by Law on Local Government Councils are intended by the Constitution to include the functions set out in the Fourth Schedule to the Constitution. The Schedule provides in paragraph I(b) and (j) thereof as follows-
“1. The main functions of a local government council are as follows:-
(b) collection of rates, radio and television licences;
(j) assessment of privately owned houses or tenements for the purpose of levying such rates as may be prescribed by the House of Assembly of a State, and….;”
It is clear from the foregoing that the collection of rates on rateable hereditaments and the assessment of rates on privately owned houses are subjects within the responsibilities of local government councils. From the terms of the contract entered into by the appellants and the respondent, clause 1 states that the Government of Kano State was “desirous of having prepared a Valuation List of all rateable hereditaments” in the Municipal area of Kano. Clause 2 indicates that the Government was desirous of appointing a consultant “to prepare a valuation list for the purpose of property rates.” It can be seen that the main purpose for which the contract was entered into by the parties corresponds with the functions allocated to local government councils by the 1979 Constitution.
Pursuant to the provisions of section 7 subsection (5) of the 1979 Constitution, the Military Government of Kano State promulgated in 1977, Kano State Local Government Edict, No.5 of 1977. The Edict provides in section 76 thereof as follows:-
“76. Every Local Government shall for the purposes of this part be the rating authority for its area,”
These provisions give effect to the constitutional provisions in section 7 subsection (5) and paragraph 1(b) and (j) of the Fourth Schedule to the 1979 Constitution and put it beyond any doubt that it was the Local Governments in Kano State that possessed the power to assess, impose and collect rates on privately owned property.
There was no any other enactment either in the 1979 Constitution or any law that provided or suggested that the power conferred on the Local Governments could be shared with the State Government in respect of assessment, imposition and collection of the rates. If there were, none was drawn to the attention of the lower courts or indeed this court.
The powers exerciseable by the Federal, State and Local Governments have been clearly identified under the 1979 Constitution. With the exception of the items under the Concurrent Legislative List each of the three tiers of Government exercises exclusive power over the subject under its control. By the provisions of section 274 subsection (4) of the 1979 Constitution the provisions of the Interpretation Act, 1964, No.1 of 1964 shall be employed in interpreting the provisions of the 1979 Constitution.
It is clear from the provisions of paragraph 1(b) and (j) of the Fourth Schedule read together with the provisions of section 7 subsection (5) of the Constitution that the intendment of the Constitution is that only Local Government Councils have the power to assess and impose rates on privately owned property. In interpreting that power section 10 subsection 2 of the Interpretation Act, 1964 provides:-
“(2) An enactment which confers a power to do any act shall be construed as also conferring all such other powers as are reasonably necessary to enable that act to be done or are incidental to the doing of it.”
It follows from these provisions that the power to award the contract entered into between the parties in this case is exerciseable by the Local Government Councils concerned and not Kano State Government.
Again section 32 of the Interpretation Law, Cap. 51 of the Laws of Northern Nigeria, 1963 applicable to Kano State at the time material to this case provides:-
“32. Where in any Law power is given to any person to do or enforce the doing of any act or thing all such powers shall be understood to be also given as are reasonably necessary to enable the person to do or enforce the doing of the act or thing.”
There is no legislation which empowers Kano State Government to dabble in or interfere with the compilation of valuation list for the purpose of assessing or collecting rates on private properties in Kano State. Therefore, the Government acted ultra vires in entering into contract with the appellants to do what only the Local Government Councils concerned were entitled to do under the 1979 Constitution and the Local Government Edict, 1977. Consequently, I hold that both the trial court and the Court of Appeal were right in coming to the conclusion that the Government had no power to award the contract and it acted ultra vires in doing so.
It is elementary that where a party acted contrary to, infringes or violates any of the provisions of the Constitution, such action is null and void and of no effect whatsoever. It follows that the action by the respondent in entering into contract with the appellants, when the former had no power to do so, is null and void and of no effect whatsoever. Consequently the contract is vitiated. It, therefore, becomes null and void.
In the book Judicial Review of Administrative Action, Third Edition, by S.A. de Smith, the following passage appears on p. 88 thereof:-
“A public body with limited powers cannot bind itself to act ultra vires; and if it purports to do so it can repudiate its undertaking, for it cannot extend its powers by creating an estoppel – Fairtitle v. Gilbert, (1787) 2 T. R. 169 and Rhyl U.D.C. v. Rhyl Amusements Ltd. (1959) 1 W.L.R. 465.”
It remains to mention that the Assessment Law, Cap. 8 of the Laws of Northern Nigeria, 1963 provides for the ascertainment of the value of tenement for rating purposes. The Law empowers the State Commissioner, charged with the responsibility, to appoint appraisers for the purpose of compiling a valuation list which will be employed in determining the rate to be charged on tenements.
Although the Assessment Law was an existing Law under the provisions of section 274 subsections (1) and (4) (b) of the 1979 Constitution, its application is subject to the provisions of the Constitution. Section 7 subsection (5) of the 1979 Constitution read together with the provisions of paragraph 1(J) of the Fourth Schedule to the Constitution and section 76 of Kano State Local Government Edict, No.5 of 1977 have effectively removed the power to appoint appraisers to compile valuation list from the State Commissioner in charge and transferred the function to Local Government Councils. This is a further proof that the respondent had no power at the time of entering into the contract to appoint the appellants as appraisers to compile a valuation list for the purpose of charging tenement rates by the Local Government Councils.
It is significant to point out that the suspension of the provisions of section 7 subsection (5) of the 1979 Constitution by the Constitution (Suspension and Modification) Decree No.1 of 1984 has no bearing on this case because the contract entered into by the parties in November, 1983 to have effect from 13th November, 1980 predated the 1984 Decree. So that at the time the contract agreement was executed the provisions of the Constitution in question were extant and applicable.
On the whole this appeal fails. The appellants cannot be awarded any damages against the respondent on the basis of quantum meruit because there was no basis upon which the trial court could have done so since there was no counterclaim to that effect by them. The appeal is hereby dismissed with no order as to costs.
SC.218/1991