Rebold Industries Ltd V Mrs. Olubukola Magreola & Ors (2015)

LAWGLOBAL HUB Lead Judgment Report

JOHN INYANG OKORO, J.S.C.

This is an appeal against the judgment of the Court of Appeal, sitting in Lagos, delivered on 17th November, 2007 wherein the court dismissed the appellant’s appeal, primarily on the ground that the respondent herein as plaintiff in the High Court of Lagos State, had locus standi to institute the action to enforce a contractual provision in a Deed of sublease between the appellant and Mandilas Group Limited.

A synopsis of the facts leading to this appeal will suffice. Sometimes in 1995, the service of the Respondent as a firm of solicitors, were retained by the Mandilas Group Limited for the preparation and engrossment of a deed of sublease between the Mandilas Group Limited and Rebold Industries Limited (being the appellants herein). The sublease was in respect of the property known and situate at 7A Creek Road, Apapa, Lagos.

It was a term of the agreement that the appellant would be responsible for the legal fees incurred in preparing the Deed of Lease. The appellant failed to make good the said terms of the agreement.

On the 14th day of May, 1997, the Respondent took out a writ of summons endorsed with a statement of claim against the appellant for the recovery of the said fees incurred in the preparation and engrossment of the deed.

The appellant having failed to respond to the summons of the respondent, a default judgment was entered for the respondent on the 19th of June, 1998.

On 26th day of November, 1998, the Appellant filed a motion before the Lagos State High Court challenging the

jurisdiction of the said High Court on the ground that the respondent lacked the locus standi to have instituted the action in the first place. The High Court dismissed the motion in a ruling pronounced on the 21st day of February, 2000. Aggrieved by the said Ruling, the appellant filed an appeal at the Court of Appeal on 14th May, 2002.

The court below in its judgment dismissed the appellant’s appeal on the ground that even though the respondent was not a party to the Deed of sublease, he still had locus standi to sue on the representation made by the appellant in the agreement to pay the respondent’s fees. Still dissatisfied with the judgment, the appellant has appealed to this court. Notice of appeal which contains four grounds of appeal, was filed on the 17th day of September, 2007. Out of the four grounds of appeal, the learned counsel for the appellant, Dr. Wale Olawoyin, has distilled two issues for the determination of this appeal. The issues are:-

1. Whether the Respondent who was not a party to the Deed of sublease had the locus standi to enforce a clause in the sublease which was to his benefit, that is, the payment of professional fees in respect of the preparation of the Deed of sublease.
2. Whether the Respondent who was not a party to the Deed of sublease may nevertheless have locus standi to sue in contract by simply showing a sufficient interest or injury to be suffered.

In the Respondent’s brief settled by Jim A. Omoigberale Esq, of counsel, one issue has however been formulated which states thus:

“Whether the Lower Court was right in deciding that the Respondent has the locus standi to sue for the payment of his professional fees in respect of an agreement he prepared between Mandilas Group Limited and the Appellant to which he, (Respondent) is not a party”

Without much ado, it is crystal clear that the two issues distilled by the appellant are but one issue. They both ask the same question to wit: whether the Respondent had the locus to enforce a clause in the sublease when he was not a party thereto. I shall therefore treat appellant’s two issues as one which is in tandem with the respondent’s lone issue. This appeal shall, in the circumstance, be determined based on the said issue.

Learned counsel for the appellant started his argument with the definition of Locus Standi which he states denotes the existence of a right of an individual or a group of individuals to have a court enter upon adjudication of an issue brought before the court by proceedings instigated by the individual or group. He submits that at common law, as a general rule, a contract cannot confer rights or impose obligations on strangers to it. These cases were cited in support: Thomas v. Olufosoye (1986) 1 NWLR (Pt 18) 669, Tweddle v. Atkinson (1861) 1 B & S 303 and Dunlop Pnuematic Tyre Company Ltd. V Selfridge (1915) AC 843.

Furthermore, he submitted that a person who is not a party to an agreement cannot enforce it even if the agreement was made by deed and for his benefit, relying on the cases of Ikpeazu V African Continental Bank Ltd (1965) 1 NWLR 374 at 379. Makwe v. Nwukor (2001) FWLR (Pt.63) 1 at 14, Union Beverages Ltd v. Pepsi Cola Int’l Ltd (1994) 3 NWLR (Pt.330) 1.