Shell Bp Petroleum Dev. Co. V. Jammal Engineering(Nigeria) Limited (1974)
LawGlobal-Hub Lead Judgment Report
This appeal involves two cases which were consolidated for hearing by the High Court, Lagos State (Dosunmu, J.). The parties to both cases are the same save for the fact that the plaintiffs in one are the defendants in the other. In the first of the cases, i.e. Suit No. LD/160/69, the plaintiffs are Shell BP Petroleum Development Co. of Nigeria Ltd., and the defendants Jammal Engineering (Nigeria) Limited. The writ of summons in that case, as finally amended, is endorsed as follows:
“The plaintiff claims against the defendant:
- A declaration that the agreement partly written partly oral made between the plaintiff and the defendant between June 1968 and February 1969 whereby the defendant agreed to lease to the plaintiff upon certain terms, properties situate at and being houses Nos. 11, 12, 13, 14 and 2 Jammal Estate off Gerrard Road, Okoyi is a valid and subsisting agreement and is binding upon the defendant.
- An Order of specific performance of the said agreement.
- 5, 000 Pounds damages for defendant’s wrongful failure or neglect to complete the houses and deliver possession of the same at the time stipulated in the agreement.
- An Injunction restraining the defendant its servants or agents or otherwise howsoever from leasing or parting with the possession of the said houses Nos. 11. 12. 13. 14 and 2 Jammal Estate, Gerrard Road, Ikoyi otherwise than by leasing the same to or by duly effectively vesting the same in plaintiff.
- Repayment of the said deposit of 2, 500 Pounds together with interest thereon at the rate of 5 percent per annum.
- 12, 750 Pounds being general damages for breach of the said agreement.
The other action was commenced some five or six weeks later as Suit No. LD/243/69. The plaintiffs therein are Jammal Engineering (Nigeria) Ltd., and the defendants Shell BP petroleum Development Co. of Nigeria Ltd. The writ is endorsed for the following claims:
“The plaintiff’s claim against the defendant is for a declaration that the “tenancy agreement” dated 14th March, 1969 and purporting to have been made by the plaintiff of the one part and the defendant of the other part is null and void and not binding on the plaintiff. In the alternative the plaintiff claims the said “agreement” is voidable and should be set aside.”
Pursuant to the relevant order of count pleadings were filed and delivered in both cases and at the trial after consolidation, the learned trial judge regarded the Shell BP Petroleum Development Co. of Nigeria Ltd. as plaintiffs and Jammal Engineering (Nigeria) Ltd. as defendants in the consolidated proceedings. We propose in this judgment to refer to the respective parties in the same manner.
The pleadings of the plaintiffs aver that both the plaintiffs and the defendants are limited liability companies that by agreement dated the 30th August, 1968 between the parties. The plaintiffs agreed to hire and the defendants agreed to let to them eight houses belonging to the defendants, five of which (Nos. 2, 11, 12, 13 and 14 in Jammal Estate, Ikoyi) are to be let for respective terms of three years starting from the dates of completion of each house and the yearly rent of 1,900 Pounds (or N3.800) per house. The first two years rents to be paid down and on terms to the effect that the lessees should pay all rates and execute all internal repairs and the lessors should pay the ground rent and be responsible for all structural repairs. The plaintiff’s statement of claim further stated in paragraphs 6 and 7 thereof as follows:
“6. The defendant company contracted that the said dwelling houses would be ready for occupation by the plaintiff on the following dates:
House No. 11.12/2/69
House No. 12. 22/2/69
House No. 13. 15/3/69
House No. 14. 15/3/69
House No. 2. 22/3/69
- In response to the demands of the defendant the plaintiff in January 1969 paid to the defendant the sum of 2,500 Pounds as deposit representing advance payment of 500 Pounds rent in respect of each of the five houses.”
The statement of claim further avers that although the defendants duly executed the leases of three out of the eight houses concerned in favour of the plaintiffs after the completion of those three houses, the defendants had failed and/or refused to complete the remaining five houses described above let alone execute the leases thereof to the plaintiffs and this, even though an appropriate draft lease covering the said five houses was duly presented by the plaintiffs to the defendants for execution. Finally, paragraphs 13 and 14 of the plaintiffs’ statement of claim state as follows:
“13. If the lease is not executed by the defendant the plaintiff says (as the fact is) that it will, owing to the defendant’s wrongful refusal and neglect to complete the houses and give possession thereof as within the time provided for by the agreement, have sustained damage to the extent of 5,000 Pounds made up of sums expended for or value of, temporary accommodation secured for its employees pending the completion of the said houses.
- If the said lease is not executed the plaintiffs says (as the fact is) that it will, owing to the defendants breach of contract have sustained damage to the extent of 12,750 Pounds made up of the difference between the rent payable under the said agreement for three years and the rent which the plaintiff will now have to pay for comparable houses today for a three year period at an annual rent of 2,750 Pounds per house.”
By their amended statement of defence, the defendants state that although there was negotiation between the parties concerning the leases of the houses in question, there was no binding agreement of the type postulated by the statement of claim. The defendants’ statement of defence further avers that they will rely on a number of letters specified in their statement of defence to prove that there was no binding agreement to let the houses concerned to the plaintiffs and that with respect to the amount of 2,500 Pounds (or N5, 000) stated by the plaintiffs to have been deposited with the defendants, the statement of defence avers in paragraphs 6 and 7 as follows:
“6. The defendants aver that in the course of the negotiation pleaded in paragraph 4 hereof and at their (defendants) request, the plaintiffs paid a sum of 2,500 Pounds through the estate agents to the defendants on the understanding:
(a) That the five houses will be completed on the dates specified in paragraph 6 of the statement of claim;
(b) On failure by the defendants to complete the houses by the dates aforesaid the said sum of 2,500 Pounds or such proportion thereof as may be applicable have regard to the number of houses completed, will be refundable to the plaintiff.
- When the defendants, in fact, were unable to complete the houses on the dates referred to in paragraph 6 of the statement of claim, they returned the sum of 2,500 Pounds to the plaintiffs through the estate agents and, in addition, they undertook to pay reasonable interest on the deposit aforesaid. The sum was paid on the 25th March, 1969 and received by the estate agents on the 26th March, 1969.”
The statement of defence further avers that the deposit of 2,500 Pounds (or N5, 000) was duly returned to the plaintiffs, that the land on which the houses were being erected was State land within the meaning of the State Land Act, cap. 45, that the defendants’ title to the said land is subject to the provisions of section 7 of that Act, that the houses were uncompleted at the date of the issue of the writ of summons, that there is no sufficient memorandum in writing of any agreement between the parties as required by law and that in any case if there was any such binding agreement, as the plaintiffs claimed, “the said plaintiffs have elected to waive any claim for specific performance and to treat any breach by the defendants of their obligation to complete the houses by specific dates as a discharge of such contract” .
As stated before, this appeal concerns two cases which were consolidated for hearing. In the other case, i.e. Suit No. LD/243/69, the plaintiffs are, as stated before, Jammal Engineering (Nigeria) Ltd. and they had sued as the defendants Shell BP Petroleum Development Co. of Nigeria Ltd. As plaintiffs in that case, Jammal Engineering (Nigeria) Ltd. averred in their statement of claim that they are indeed the owners of lands in the Jammal Estate, Ikoyi, registered under the Registration of Titles Act as No. L05091 and No. L05092 and that a Mr. Morgan and a Mr. Siddiqi of the plaintiffs’ Company, without the authority of the Company, purported to acknowledge on behalf of the Company a tenancy agreement dated the 14th March, 1969 in respect of three houses situate on the said Jammal Estate, Ikoyi. Paragraphs 9, 10 and 11 of their pleadings are to the following effect:
“9. The said Tenancy Agreement dated 14th March, 1969 was not made by deed.
- The defendants were at all material times (or in the alternative as from the 22nd February, 1969, when they received the letter pleaded in paragraph 7 hereof) aware that Mr. Morgan was not authorised to execute or sign any agreement on behalf of the plaintiff.
- By reason of the facts hereinbefore pleaded the plaintiffs aver that the Agreement aforesaid is void or voidable.”
The defendants to the second action i.e. Messrs. Shell BP Petroleum Development Co. of Nigeria Ltd., by their statement of defence contend for the validity of the lease agreement of the 14th March, 1969 and in particular paragraph 4 of their statement of defence avers as follows:
“4. With further reference to paragraph 4 of the. statement of claim the defendant avers as follows:
(a) That the negotiations conducted by and between the plaintiff and the defendant was for the leasing by the plaintiff to the defendant of 8 (eight) houses then being erected by the plaintiff on the plots of land referred to in paragraph 2 of the statement of claim.
(b) That the said negotiations were both oral and by correspondence.
(c) That R.C. Irving & Co. Ltd. a firm of Estate Agents at all material times acted as, and in fact were the agents of the plaintiffs during the negotiations with the defendants for the leasing of the 8 houses.”
By their statement of defence they further aver that the plaintiffs had always held out Mr. Morgan as having full authority to endorse the Tenancy Agreement on behalf of the plaintiffs’ Company, that Mr. Morgan did endorse the said Agreement with the full authority and full knowledge of the plaintiffs’ Company which did not at the earliest opportunity repudiate responsibility for Mr. Morgan’s action. The statement of defence further avers that the plaintiffs’ Company later ratified and clearly executed the said Tenancy Agreement, let the defendants into possession of the houses concerned and received from them the full rents payable under the said Agreement and eventually got the documents duly stamped by their agents.
Before taking evidence, the learned trial judge made a formal order consolidating the two cases for hearing in the following terms:
“Court: Application for consolidation Suits LD/160/69 and LD/243/69 is granted for the purpose of pleading and the plaintiff in Suit LD/160/69 will start and remain as plaintiff, throughout the proceedings and the plaintiff in Suit No. LD/243/69 shall remain the defendant.”
The plaintiffs, Shell BP Petroleum Development Co. of Nigeria Ltd. then called evidence by five witnesses, one of whom was a late Permanent Secretary in the Lagos State Ministry of Works, Mr. A.B.A. Johnstone. He testified that His Excellency the Governor of Lagos State is the one charged with responsibilities for State lands in Lagos and that the land concerned in this case was State land. He testified on this point as follows:
“To the best of my knowledge my Ministry received applications from the plaintiff for consent to sublease in respect of houses Nos. 2, 11, 12 and 14 and 7, on the Jammal Estate at Ikoyi. Nothing has been done in respect of these applications. I cannot remember whether the defendant Jammal Company applied for consent to sublet the said houses.”
The plaintiffs through their witnesses also produced a large number of letters suggesting a full and binding contract to let out the either houses on the Jammal Estate, Ikoyi. A representative of a company of estate agents, Messrs. R.C. Irving & Co. Ltd., testified that they were employed by the defendants to let fourteen “luxury type houses” on the Jammal site at Gerrard Road, Okoyi (see Exhibits A and B) and that in consequence of various discussions between them and the plaintiffs the parties agreed to hire and to let eight of the fourteen houses at a rent of 1,900 Pounds (or N3,800) per annum for a term of three years with the payment down of two years rent in advance (Exhibits C and D). The estate agents further gave evidence that the houses on the Estate are numbered Nos. 1’9714 and that the eight supposed to be let to the plaintiffs are Nos. 1, 2, 7, 9, 11, 12, 13 and 14. Mr. Graeme Moore of R.C. Irving & Co. Ltd., testified that later, by letter dated the 18th September, 1968 (admitted in evidence as Exhibit E) his Company was informed that two of the houses were then completed and that a draft lease of these two houses was duly executed by the defendants (Exhibit G) and that this document carried the seal of the defendants’ Company. The document, Exhibit G, however spoke of three houses and in explanation of this point, Mr. Moore testified as follows:
“House No. 8 came into the picture after Exhibit G was initialed. House No. 8 was originally in the letter of letting, but it subsequently took the place of House No. 1 by reason of the fact that it was the last to be completed. Eventually it was agreed that No. 8 house should replace No.1. In Exhibit L the defendant asked for the rent in respect of No. 8 house. The draft lease Exhibit G was eventually amended to include 7, 8 and 9 houses. When the lease proper was prepared in respect of the offers and 3 houses, we forwarded the original 8 counter parts to the defendant/company. It was returned duly signed by Mr. Morgan. We returned the documents (the original and counterpart) to Messrs. Irving & Bonnar the solicitors.”
He further testified that the draft lease was later engrossed and executed and produced it in evidence as Exhibit W. The same witness had testified that as the defendants were pressing for the payment down of a deposit on each of the house, they wrote to the plaintiffs on the 22nd October, 1968 (i.e. Exhibit J) to pay a sum of 1,000 Pounds (or N2, 000) per unit but by their letter of the 31st October, 1968 (i.e. Exhibit K) the plaintiffs counter-offered a sum of 500 Pounds (or N1, 000) per unit. In reply to the letter Exhibit K, the defendants by letter of the 7th November, 1968 (i.e. Exhibit L) rejected the inclusion of fresh proposals with the existing agreement between the parties and stated further as follows:
“The completion schedule for the uncompleted houses are also not possible to adhere to now, as reply to our offer dated 18th September, has been received only now after 1 1/2 months. The schedule which we gave was subject to our receiving a deposit immediately so that we can expedite the matter. Now there is very little time left even for speeding up. If we receive the cheque for the deposit within a week, we can promise to hand over those six houses as under:
Two at the end of December, 1968, one at mid-January, 1969, One at the end of January, 1969, Two at the end of February, 1969.
If the cheque for the deposit is not received within a week, then the deal should be treated as cancelled, although we had reduced the rent for the other 3 houses on this understanding.
Will you please let us have the cheque for house No.8 for which there is no hitch.”
The contents of Exhibit L were duly communicated to the plaintiffs by letter dated the 21st November, 1968 (Exhibit M) from the defendants’ agents, messrs. R.c. Irving & Co. Ltd., and by their letter dated the 16th December, 1968 (i.e. Exhibit 0) the plaintiffs, through their solicitors, Messrs. Irving & Bonnar, paid to the defendants agents, Messrs. R.C. Irving & Co. Ltd., the sum of 2,500 Pounds (or :N5,000) representing total deposits of 500 Pounds (or :N1, 000) per unit on five houses. The letter Exhibit 0 contained the following in part:
“This payment is being tendered on the following conditions:
- That the houses will be ready on the dates agreed.
- That 500 Pounds will be deductible from the first payment of advance rent in respect of each house and
- That the whole amount, or such proportion thereof as may be applicable having regard to the number of houses completed, will be refundable to our clients if the houses are not completed in time and will on demand become a debt repayable by Jammal Engineering (Nigeria) Limited to Shell BP Petroleum Development Company of Nigeria Limited.
This amount should only be released by you to Jammal against a written undertaking on the above terms.”
Mr. Graeme Moore further testified that on the 11th January, 1969 his Company received the letter Exhibit P from the defendants stating the revised dates for completion of the houses and that on the 14th January,1969, by letter admitted as Exhibit Q, the Managing Director of the defendants’ Company, Mr. A.A. Jammal, wrote to their own agents, Messrs. R.C. Irving & Co. Ltd., as follows:
GERRARD ROAD ESTATE-IKOYI
Referring to the writer’s telephone conversation with your Mr. O’Grady today, we are disappointed to note that you have still not released the deposits you are holding on the six remaining houses on the above estate.
The writer will be leaving for overseas by the ending of the week and would like the matter settled before then. It would be appreciated, therefore, if you would kindly let us know your decision in this respect, as we have already received many offers for these houses for terms much better than those given to your good selves.
“We now look forward to your early reply and your cheque in settlement of the deposits.”
There was another letter dated the 20th January, 1969 (Exhibit R) and by that the defendants’ agents paid over the amount of 2,500 Pounds (or N5, 000) deposit to the defendants. Mr. Moore, the plaintiffs’ witness, on this point testified as follows:
“To my knowledge the defendants did not eventually give possession of these five houses to the plaintiff. On the 18th March, 1969 we wrote to the defendants’ letter produced no objection and marked Exhibit U. We received a reply to this letter dated 25/3/69 from the defendants letter produced no objection admitted Exhibit V: The cheque of 2,500 Pounds accompanying Exhibit V is still in our possession because Messrs. Irving & Bonnar refused to receive same when we sent it to them. I have seen these 8 houses some of them have been completed, and some still in the process of erection.”
A Mr. Grant of the solicitors firm of Messrs.Irving and Bonnar, who are solicitors to the plaintiffs in this matter, then gave evidence confirming substantially the evidence of Mr. Moore. The plaintiffs also called as a witness a Mr. Roger Murley, Head of the personnel services Dept. of Shell BP Petroleum Development Co. of Nigeria Ltd., who testified that the Managing Director of the defendants’ Company, Mr. Jammal, had once told him, in connection with the leases concerned, that he wanted more money as rents for the premises than the plaintiffs would agree to pay and that in any case he was desirous of cutting out the agents, Messrs. R.C. Irving & Co. Ltd., from the whole business so that he could deal direct with the plaintiffs.
The plaintiffs then closed their case and learned counsel for the defendants announced that he would not call any evidence for the defence. Learned counsel on both sides then addressed the court at length and the learned trial judge reserved his judgment for consideration. Eventually, in the course of his reserved judgment, the learned trial judge decreed as follows:
“In the result my judgment therefore is as follows:
- In Suit LD/243/69, claim is dismissed.
- In suit LD/160/69:
(a) The declaration sought is granted,
(b) The order of specific performance is refused,
(c) 5,000 Pounds damages claimed is dismissed,
(d) The order of injunction is refused.
(e) The defendants are ordered to repay the deposit of 2,500 Pounds with interest therein at per rate of 5% from 10th March 1968 to 7th April, 1968 and with the same rate of interest from today until it is fully paid.
(f) 3,000 Pounds general damages are awarded in plaintiffs’ favour.”
As both parties have appealed to this Court against that judgment, it is fair to observe that the learned trial judge was at great pains to consider all the principal issues posed by the two cases.
In his consideration of the later of the two cases, i.e. Suit No. LD/243/69 instituted by the defendants, as plaintiffs therein, he examined the submission that the leases Exhibit W was void in that it does not comply with the provisions of section 14 of the Registration of Titles Act, Cap. 181. On that point he observed as follows-
“So that where strict conformity with forms is required in respect of conveyance of fee simple or exercise of power of sale by a charge, this is not so in respect of leases. I find nothing to the contrary in the Act. Learned counsel for the defendant referred to Sec. 79(1) of the Act which in effect says forms in the First Schedule shall be used with necessary modifications.
It is my view that this applies where the Act provides that the prescribed form shall be used. I hold therefore that Exhibit “w” is good in that it is an agreement for a term not exceeding 3 years and need not be under deed as in unregistered conveyancing.”
In his consideration of the earlier of the two Suits, i.e. No. LD/160/69, the learned trial judge directed himself as follows:
“I now come to the other Suit No. LDI/60/69. The pleadings that were filed and exchanged in the said suit reveal that the dispute is over an alleged contract relating to leases of five houses in Jammal Estate then under construction. My primary task therefore is to discover whether there has been any agreement on the cardinal terms of the proposed leases. Even where I discover this, the matter will not end there; because as the negotiation proceeded, there seems to be some other essential terms which the parties wished to include in their agreement. Therefore I have to find as well whether the minds of the parties were at one in respect of those other essential terms. The cardinal terms of a normal lease are (1) the parties (2) property (3) duration of the lease (4) commencement and (5) rent.”
The learned trial judge took the view that the contract between the parties crystallized by a letter from the defendants’ agents, Messrs. R.C. Irving & Co. Ltd., dated the 30th August, 1968 and admitted in evidence as Exhibit C and opined that if that letter was read along with Exhibit E dated the 18th September, 1968, from the defendants to their agents, it was clear that the properties agreed to be let to the plaintiffs were houses Nos. 1,2, 11, 12, 13 and 14 in the Jammal Estate. Exhibit C reads thus in full:
“Attention of Mr. Scott
The Shell-BP Petroleum Development Company of Nigeria Limited,
JAMMAL ESTATE OFF GERRARD ROAD OLD IKOYI
Further to our various discussions on the above properties, we are pleased to confirm your offer to lease eight houses on the above Estate on the following terms and conditions; 2 houses immediately available, the remaining 6 to be completed before the end of December, 1968 leases on each house to be taken up as soon as completed before that date. We await a schedule of anticipated completion times from the landlord.
- RENT: 1,900 Pounds per annum payable 2 years in advance in the first instance.
- LEASE: 3 years, to commence as above.
- LESSORS: (Jammal Engineering (Nig.) Limited,
235/237 Apapa Road, Ijora) to be responsible for:
(a) Ground Rent.
(c) Structural Repairs.
(d) Our Commission.
- LESSEES: (Yourselves) to be responsible for:
(b) Legal Fees.
(c) Internal repairs and decorations.
We are sending copies of this letter to the Lessors and three to yourselves, and would be grateful if you would each endorse your agreement on one copy and return it to us. The third copy is for you to forward to your solicitors with your instructions that they prepare a Lease Agreement on your behalf, letting us have a copy of such instructions.”
Manifestly, the letter Exhibit C touched upon the important consideration of the commencement date or dates of the lease or leases of the several houses. On this aspect of the case and commenting on the letter Exhibit C, the learned trial judge stated as follows in his judgment:
“What has proved almost intractable in this case is the agree commencement dates in respect of the lease. It is important to recall again how Exhibit “C” seems to provide for these. It says in part: “the remaining six be completed before the end of December, 1968, lease on each house to be taken up as soon as completed before the date.”
I pause here for a moment to say that nobody reading this particular passage in Exhibit “c” would think otherwise than that the parties contemplated that there would be separate leases in respect of the houses. The commencement date of each lease is to be fixed to the date of the completion of each house with the hope that all the houses will be completed before the end of December, 1968. This is my understanding of this passage. But what I am still concerned with at this stage is to see whether there is any agreement as to the commencement dates, and that this is essential in a lease is settled in law. See the cases of Cartwright v. Miller (1817) 36 L.T.R. page 398 and Marshall v. Berride (1881) 19 Ch. 233.”
The learned trial judge evidently considered the various attempts to fix commencement dates by the parties (Le. by Exhibit E dated the 18th September, 1968, Exhibit K dated the 31st October, Exhibit L dated the 7th November, 1968, Exhibit N dated the 29th November, 1968 and Exhibit O dated the 16th December, 1968). Although Exhibit N simply named the completion date for a number of houses, the learned trial judge observed that by the letter Exhibit O (dated the 16th December, 1968) addressed by the plaintiffs’ solicitors to the defendants’ agents, the plaintiffs had identified the various completion dates mentioned in Exhibit N with particular houses specified in Exhibit C. The learned trial judge took the view that this arrangement was acknowledged and accepted by the defendants whose representative had signed Exhibits N and O and that this course of affairs was followed up and confirmed by the defendants in their letter Exhibit P dated the 11th January, 1969 which letter carried “the signature of the Company’s own Chief Quantity Surveyor”. In the words of the learned trial judge himself, the position was described as follows:
“That these new dates proposed by the defendants were accepted by the plaintiffs are not in doubt. In Exhibit “R” letter of the 28th January, 1969, a cheque for the sum of 2,500 Pounds in furtherance of this acceptance was forwarded by the plaintiffs to the defendants and its receipt was duly acknowledged by the Accountant of the defendant company. I am satisfied that the deposits were paid when the parties reach firm agreement as to the commencement dates of the leases. I cannot imagine that any solicitor given all these data will have an insuperable difficulty in drawing up any lease in respect of the 5 houses at this stage. I believe that I can therefore at this point hold that the cardinal terms of the proposed lease are definitely agreed.”
The learned trial judge then considered in some detail the further correspondence exchanged by the parties after Exhibit P. He referred in particular to Exhibit S (dated the 14th February, 1969) whereby the defendants’ estate agents sought yet to alter the completion dates of the houses, Exhibit U (dated the 18th February, 1969) whereby the plaintiffs sought to know from the defendants the date of delivery of plumbing materials to the houses and Exhibit T (dated the 24th February, 1969) whereby the defendants gave the impression they were still keeping the agreed dates alive, Exhibit U dated the 18th March, 1969, whereby the defendants’ estate agents had called on the defendants to perform their contract and Exhibit V dated the 25th march, 1969, whereby the defendants advised their own agents that they were unwilling to perform the contract. Exhibit V, dated the 25th March, 1969, reads as follows;
“Messrs. R.C. Irving & Co. 11/17, Tinubu Street, Lagos.
I acknowledge receipt of your letter reference G.38 dated 18th
- I regret that it is not possible for me to give you any new dates as requested in the last paragraph. Accordingly I regard this matter as closed as it is not possible for us to reach agreement.
- A cheque for 2,500 Pounds being the return of deposit is enclosed herewith.
Please acknowledge receipt.”
The learned trial judge, relying on the cases of Bellamy v. Debenham (1891) Ch. D. 412 and Perry v. Suffield Ltd. (1916) 2 Ch. D. 187, distinguished the present case from Bristle Cardiff and swansea Aerated Bread Co. v. Maggs (1890) 44 Ch. D. 616 and pointed out that when once the contract between the parties to a series of negotiation by correspondence has become crystallized, subsequent correspondence between the parties, unless this goes to the root of the whole subject, could not alter the existing contract or throw the whole matter into the melting pot of negotiation. He then concluded on the claim before him for a declaration of the contract as follows:
“In my view upon true construction of all the correspondence in this case there is a firm contract by the defendants to lease to the plaintiffs five houses at the rent of 1,900 Pounds per house for a period of 3 years commencing as to houses Nos.11,12 13 14 and 2 on 22/2/69 ,22/2/69, 15/3/69 and 22/3/69 respectively, and I will therefore grant the declaration as sought.”
The learned trial judge then dealt at some length with the claims for specific performance and injunction. He referred to paragraph 12 of the plaintiffs’ statement of claim which reads thus:
“The plaintiff avers that a draft of the lease which the defendant ought to execute in favour of the plaintiff (in respect of houses Nos. 11, 12, 13, 14 and 2) and which draft is, with the necessary modifications identical with that executed in respect of the other three other houses, is attached hereto and marked “A”.”
He eventually declined to make such order since, as he observed, he had found that there should in fact be a different lease for each of the houses commencing on different dates according to when severally the buildings were completed. He concluded that this was a case in which he “should make an award of damages if i find eventually that the breach of the said contract has been committed.”
Turning to the claim for damages, the learned trial judge referred to paragraph 13 of the plaintiffs’ statement of claim and observed that the claim seemed to be “an amount to compensate the plaintiffs for the sums expended for providing temporary accommodation for their employees pending the completion of the said houses.”
He however rejected this claim as well, pointing out that “it is in the nature of special damages of an alleged breach which on the authorities had to be strictly proved. I have no evidence whatsoever in support of this claim as pleaded, But it is a matter which i can legitimately take into consideration when making the award of general damages.”
The learned trial judge considered the claim for the refund of the plaintiffs’ deposit of 2,500 Pounds (or N5, 000) and held
“That the plaintiffs are entitled to the return of their deposit with interest.”
On the claim of the plaintiffs for 12,750 Pounds (or N25, 500) general damages, the learned trial judge considered
“in particular the inconvenience suffered by the plaintiffs by reason of their employees and their families having to be accommodated at places which they regard as inferior to those that they have bargained for.”
He referred to the evidence claimed by the plaintiffs to have been placed before him of the comparative rentals of houses similar in standard and location to those in question but rejected these as a basis of assessment saying
“I have no evidence whatsoever that the plaintiffs as a result of this breach of contract took houses of equivalent standard and how much in fact were paid for them. But I will regard the evidence in support of this claim, along with others, as helping me to quantify the general damages following the breach.”
The learned trial judge then discussed and disposed of a few insubstantial issues before finally giving judgment in favour of the respondents as already set out by us in the course of this judgment.
As stated before, both parties have now appealed to this Court against that judgment, the defendants in the first suit No. LD/160/69 (and plaintiffs in the second Suit No. LD/243/69) the Jammal Engineering (Nigeria) Ltd., complaining that the learned trial judge wrongly found that there was a concluded and binding contract to lease houses by them, that the learned trial judge wrongly dismissed their case against the defendants in the later Suit, that he should not have entered judgment against them for the return of 2,500 Pounds (or N5, 000) with interest, and that in any case the learned trial judge should not have awarded any general damages against them. On the other hand, the complaint on appeal of the plaintiffs in the earlier Suit No. LD/160/69 (and defendants in the later Suit No. LD/243/69) Shell BP Petroleum Development Co. Ltd. is that the general damages awarded were inadequate and that the learned trial judge wrongly rejected the evidence of comparative rental figures which only could have secured to them the appropriate basis of assessment of damages.
On behalf of the defendants, learned counsel argued before us, firstly that the lease purported to be executed in respect of three of the houses is invalid and, secondly, that the learned trial judge was wrong to have found that there was a valid contract between the parties for the breach of which he could and did award damages against the defendants. With respect to the first leg of his appeal, learned counsel for the defendants submitted that the lease Exhibit W purported to have been executed by the defendants in favour of the plaintiffs was void inasmuch as the provisions of the Registration of Titles Act, cap. 181 had not been complied with. The particular contract was pleaded in paragraph 8 of the statement of claim in the earlier Suit, i.e. No. LD/160/69 and was in fact the subject-matter of the later Suit, No. LD/243/69. Paragraphs 2 and 3 of the statement of claim filed by the defendants who are the plaintiffs in the later suit, aver as follows:
“2. The plaintiffs are the registered owners of the land at Ikoyi Residential Area lying to the north of Gerrard Road, Ikoyi known as Plots 16, 18, 17 and 18A in Section 44.
- Plots 16 and 17 are registered as Numbers LO 5091 pursuant to the Registration of Titles Act and Plots 18 and 18A are similarly registered as Number LO 5092 under the same Act.”
As stated before, the leasehold contract being impugned is Exhibit W and the first recital in that document reads as follows:
- The Landlord is beneficially entitled to ALL THOSE four pieces of land known as Plots 16, 17, 18 and 18A in Section 44 of the Ikoyi Residential Area lying to the north of Gerrard Road, Ikoyi and the Lagos State and is registered as proprietor thereof under Title Number LO 5091and LO 5092 of the Lands Registry at Lagos.
The relevance of this recital is that the land concerned in the lease is registered land within the provisions of the Registration of Titles Act, cap. 181. The lease itself is made in conventional conveyancing form and is certainly not made on any of the forms prescribed by the Registration of Titles Act. Learned counsel for the defendants has argued before us that inasmuch as the lease was not so made it is void or voidable at the least.
Paragraphs 2 and 3 of the statement of claim in the later Suit, which describe the nature of the leasehold land the tenancy, were admitted by paragraph 2 of the statement of defence in that action and it must be, as indeed it is, common ground between the parties that the land concerned is registered land. Learned counsel referred to section 14 of the Registration of Titles Act and submitted that since that provision was not complied with, the lease Exhibit W is void. Section 14 of the Registration of Titles Act, cap. 181, reads as follows:
“14(1) The registered owner of land may in the prescribed manner lease the land to the same extent as if the land has not been registered.
(2) The lease shall be completed by registration of the lease as an encumbrance, and of the lessee as owner of the lease, and by filing the original lease or a copy thereof in the registry.
(3) Provided that the foregoing provisions of this section as to registration of the lease and lessee and filing the lease shall not be obligatory where the lease is for a term of less than five years and the leased land is occupied under the lease.”
The section understandably prescribes the form and manner in which leases of registered land should be made even though section 14(3) exempts from the requirements of filing and registration a lease which is expressed to be for a period less than five years. In other words, provided the requirements of sub-section (1) of section 14 are complied with, then it will clearly have been unnecessary for either of the parties to comply in the present case with the provisions of sub-section (2) of the section. Learned counsel for the defendants submitted that the lease Exhibit W was not made “in the prescribed manner” as required by section 14(1). Learned counsel also referred to the meaning of “prescribed” as set out in section 3 of the Act as follows:
“prescribed’ means prescribed by this Act or, subject to the provisions of this Act, by rules made under this Act, or, subject to the provisions of this Act or any such rules, by the registrar.”
For his part, learned counsel for the plaintiffs countered this argument and submitted that section 14 of the Registration of Titles Act does not apply to the lease in question since the lease is for a term only of three years and where the lessees are in possession, as indeed the present plaintiffs were. Learned counsel for the plaintiffs further submitted that section 79 of the Act and Form 4 in the Schedule to the Act describing the form in which a lease of registered lands should be made, are not applicable since by the provisions of section 14(3) the plaintiffs are not under any duty to seek to register or file their lease which must be considered inadequate inasmuch as it does satisfy the provisions of the Real property Act, 1845 and the Statute of Frauds.
We have already described the form of the purported lease Exhibit W and the nature of the land comprised in the said lease. There can be no dispute as to the meaning of section 14 of the Registration of Titles Act as it states that the lease may be made in the prescribed manner and section 79 of the Act states that forms in the Schedule to the Act shall be used in effecting assurances of registered land. In the course of his judgment, the learned trial judge distinguished between “prescribed form” and “prescribed manner” thus:
“In my view I do not think that where the Act speaks of prescribed manner, it necessarily means prescribed form. The expression, “Prescribed form”, appears in various sections of the Act namely, Section 12, S.23, S.27, S.38 and S.55. Section 55(1) is worthy of note, it reads:
‘The Registrar shall issue to the registered owner of any land or charge a certificate of title in the prescribed form showing in the prescribed manner all subsisting entries in the register affecting that land or charge.’
From this provision only, it is clear that the “prescribed manner” does not mean “prescribed form”.”
We are of course not satisfied that this attempt at distinguishing these two concepts is either justified or relevant to the determination of the matter before the Court. It is sufficient to point out that a prescribed manner of doing an act in law may involve the use of a prescribed form and a prescribed form for doing such an act or of doing it may be identical to or synonymous with a prescribed manner for doing it. Be that as it may, the important thing is to decide whether the lease Exhibit W satisfied the requirements of the Act which governs dealings with registered land. The mandatory provisions of section 79 refer one to the use of the appropriate form and Form 4 in the Schedule sets out such a form which is described as a “deed” in accordance with the meaning of a deed in section 80(1) of the Act. The sub-section reads as follows:
“80(1) An instrument which is expressed to be made or to operate as a deed shall be deemed to be a deed and shall operate accordingly, but shall not on that account require to be sealed.”
Paragraph 9 of the statement of claim in the later Suit did point out that the lease Exhibit W was not by deed and paragraph 2 of the statement of defence in that suit admits this averment. Section 79(1) and (2) of the Act provide as follows:
“79(1) The forms in the First Schedule to this Ordinance shall be used with such modifications and additions as are necessary or desired, and allowed by the registrar
(2) An instrument for which no form is provided by the said First Schedule shall be in such form as the registrar may approve.”
If then the document Exhibit W is not made in the form prescribed by section 79(1) and thereby characterised a deed by section 80(1), it must follow, as it does, that Exhibit W has not been made “in the prescribed manner” within the contemplation of section 14(1) of the Act. Strictly
speaking, section 14 of the Act does not make the use or employment of the statutorily forms mandatory and indeed subsection (3)of that section expressly exempts from the operation of sub-section (2) leases for terms less than five years where the leased land is occupied under the lease. In the present case, therefore, Exhibit W had not been made in the “prescribed manner” and apparently it is exempted from the requirements of registration and fuming especially when, as the evidence goes in this case, the lessees are in occupation of the houses by virtue of the lease. The truth however is that in any case Exhibit W cannot be registered or filed as it was not made in the manner prescribed by the Act: in short, it is a dealing by a registered owner with registered lands outside the Registration of Titles Act. That Act does not create new tenures and/or interests and the respective interests of owner, chargee, transferee or chargor at or before registration are governed by the provisions of section 28 of the act. Section 28(1) and (2) of the Act read as follows:
“28(1) The registered owner of any land or charge may in the prescribed manner transfer such land or charge or any part thereof.
(2) The transfer shall be completed by registration of the transferee as owner of the land or charge transferred, and filing the transfer in the registry; but until such registration the transferor shall remain the registered owner of the land or charge.”
The section does not convert the interest or estate of anyone whose registration is either not contemplated at all or is not yet completed into equitable interests and, undisputably, until and unless such interest is completely registered as prescribed by the Act, the registered owner remains the owner of his land for all purposes of the Registration of Titles Act. But clearly, section 42(1) of the Act affords protection to dealings generally with registered land outside the Act, although by the proviso thereto the section postpones such interests as are created thereunder to those created in accordance with the Act. Then comes section 42(2) of the Act. Section 42 of the Act reads as follows:
“42(1) Any person, whether being the registered owner or not, having a sufficient interest or power in or over registered land, may dispose of or deal with the same, and create any interests or rights therein which are permissible in like manner and by the like modes of assurance in all respects as if the land were not registered: Provided that all interests and rights disposed of or created under this section (whether by the registered owner or any other person) shall be capable of being overridden by registered dispositions for valuable consideration.
(2) Nothing in this section shall be construed as authorising any disposition of any estate, interest, or right or other dealing with land to be effected under this section if the disposition or dealing is one which could be effected under any other section, and any such disposition or dealing shall be effected under and in the manner required by such other section, and when so required shall be registered or protected as provided by this Ordinance.”
Manifestly, section 42(2) axes whatever privilege has been conferred by section 42(1) and in this respect the observations of this Court in Jaffar v. Ladipo (1969) 1 All N.L.R. 165 are pertinent. The disqualification prescribed by section 42(2) is not general and it is restricted only to cases “if the disposition or dealing is one which could be effected under any other section” of the Act and in such cases, according to that section of the Act, “any such disposition or dealing shall be effected under and in the manner required by such other section”. The concluding words of section 42(2) are important. They are that
“when so required shall be registered or protected as provided by this Ordinance.”
These concluding words have relevance to the provisions of section 14(3) where no registration is required and protection is otherwise afforded.
To put together the effects of the relevant sections of the Act, we point out that a lease by virtue of section 14 must be made “in the prescribed manner” in order to escape the proscription of section 28, to enjoy the protection of section 42(1) and to escape the disqualification of section 42(2). H, like Exhibit W, it is not so made, it does not comply with section 14(1) and section 28(1) (it need not comply with section 28(2) and apart from lacking the protection of section 42(1) falls within the disabilities prescribed by section 42(2). Now, section 42(2) requires that such dealings shall be effected under and in the manner required by the Act-a requirement which postulates that any disposition or dealing which discountenances it must be invalid under the Act. We are of the view that learned counsel for the defendants was right in his contention that the lease Exhibit W is void. Although section 14(1) has employed the word “may” in its requirement of compliance, it seems to us clear that where the dealing contemplated is one for which provision is made in the prescribed manner, the transferor or transferee has no alternative but to use such “prescribed manner” in order to make the disposition or dealing valid under the Act.
The other leg of the argument of learned counsel for the defendants concerns the claim of the plaintiffs for a declaration of an existing contract to let out the remaining five houses on Jammal Estate, Gerrard Road, Ikoyi.
The learned trial judge did make such a declaration and indeed awarded damages for the infraction of the contract which he found proved awarded counsel for the defendants argued before us that:
(i) the contract which the learned trial judge found and upon which he based his judgment, was not the same as the contract sued upon or tried in the action;
(ii) there was no concluded contract between the parties;
(iii) the order for the return of 2,500 Pounds (or N5, 000) deposit ought not to have been made; and
(iv) the learned trial judge should not have granted an amendment of the plaintiffs’ writ and statement of claim at the stage when they sought and obtained an order for the amendment.
With respect to Heads (i) and (ii), learned counsel for the defendants submitted that the learned trial judge was in error to find for several contracts in respect of the different houses when by both their writ and their amended statement of claim, as well as by the proposed Deed of Lease in respect of which specific performance is being sought (i.e. Exhibit U), the plaintiffs were clearly urging a single contract to commence “from the 28th day of October, 1969 for the term of three years”. This argument was opposed by learned counsel for the plaintiffs who submitted that the learned trial judge rightly found in a single contract agreed by both parties in respect of five houses to commence on different dates according to the respective dates of completion of the houses. In Allsop v. Orchard (1923) 1 Ch. 323, referred to by learned counsel for the plaintiffs, Eve, J. (as he then was) held that where the written terms of a proposed contract are different from the oral terms also discussed (and apparently agreed) by the parties, there can be no enforceable contract of the one or the other. We do not think however that the facts of this case are on all fours with those of the present case. The parties herein always discussed, whether orally or by writing, the same subject-matter, the same rents and indeed the same detail of the same hiring. In the same way, no-one of the parties had urged, as in the case of Smith v. McGowan (1938) 3 All E.R. 447, the execution of more than one contract. Reference was made by learned counsel for the defendants to the cases of Winn v. Bull (1877) & Ch. 29 and Ridgway v. Wharton (1858) L.J. 27 Eq. 46 where the parties clearly agreed that their discussions were subject to a formal contract and as no such formal contract was eventually prepared it was held that there were no enforceable contracts. The present case is of course also distinguishable from this inasmuch as the parties to the present case never expressly left the validity of their contract to the preparation or execution of a formal contract although it was manifestly within the contemplation of both parties that a formal lease would eventually be prepared and executed by both. Still more unlike the facts in Stimpson v. Gray (1929) 1 Ch. D. 629 (relied upon by learned counsel for the defendants) are the facts in the present case where the parties came to an agreement on all the terms of their contract except the commencement dates for the occupation of the respective houses.
It was however contended by learned counsel for the defendants, relying on the decision in May v. Thomson (1882) 20 Ch. 705, that inasmuch as the commencement dates for the several leases, of the houses concerned were left unagreed a contract might not be declared or decreed by the court. In May v. Thomson (supra) the plaintiff had offered his medical practice together with the lease of the premises on which he practised for sale. The defendants negotiated with him for the purchase and both of them agreed that a formal document, to be thereafter prepared, would precisely set out their rights and obligations. They never agreed on the actual date of handing over the practice and the court held that for the reasons shown above there was no enforceable contract between the parties.
This is of course a strong case for the defendants to rely upon and learned counsel for the defendants contended before us that we should apply the principle of May v Thomson to the present case. The plaintiffs’ writ in the present case describes “an agreement partly written partly oral” made between the parties whereby the defendants “agreed to grant a lease upon certain terms to the properties situate at and being houses Nos. 11, 12, 13, 14 and 2 Jammal Estate. . . . . . . .” That was and is the declaration sought by the plaintiffs and it is obvious that at the commencement of their discussions both parties contemplated that the houses would be handed over to the plaintiffs more or less at the same time. That this is so is evident from a perusal of Exhibit D (dated the 30th August, 1968), Exhibit E (dated the 18th September, 1968) and Exhibit F (dated the 4th October, 1968). The learned trial judge took the view that at that point of time the parties were in agreement over the granting of lease; by the defendants to the plaintiffs of a number of houses in the Jammal Estate. We think this is clearly so. That it is so is evidenced by letter dated the 22nd October, 1968, Exhibit J, from the agents of the defendants. The letter reads thus:
Jammal Estate Plots 16-18A Gerrard Road, Ikoyi.
Further to our various discussions regarding the above houses, the Lessors have indicated they require a deposit against each uncompleted house to be paid now. so that the houses are held for Shell’s occupations figure suggested is $1,000per unit.
Under separate cover you have received a letter of agreement pertaining to house 8 of this plot, for your acceptance and return to us. The landlord suggested that in view of houses 7, 8 & 9 being completed perhaps it will be simpler if the final lease being drawn on 7 and 9 cover house 8 as well.
We trust you will consider this practical.
Yours faithfully, etc.”
This letter was received by the plaintiffs and duly acknowledged by the plaintiffs’ letter to the defendants’ agent dated the 31st October, 1968, Exhibit K, which reads in part as follows:
“We refer to your letters of 22nd and 23rd October, 1968 and to the conversation between Messrs. O. Moore, R.E Murley and H.P. Scott on 24th October, 1968.
We confirm that we are prepared to pay deposit of 500 Pounds for 5 houses still in course of construction on the above estate on the understanding that they will be completed for occupation and the keys handed over to us according to the following programme:
2 houses on 15th November, 1968
2 houses on 20th November, 1968
1 house on 15th December, 1968
We understand that you will provide, immediately a plan of the east clearly indicating the houses and servants quarters, which we are leasing. ”
Indeed, the draft Deed of Lease attached to the writ (Exhibit A as well as Exhibit O) and paragraph 13 of the defendants’ amended statement of defence, say no more than this and we do not see the difference between this agreement in respect of which a declaration is sought and that which the learned trial judge actually decreed.
There is some little argument as to how the difference in the completion dates of the several houses will operate to negative the existence of any firm contract of leasing between the parties. As we stated before, the parties originally contemplated that the houses would be completed and handed over at once and the failure to accomplish this is predominantly on the part of the defendants. The argument now being advanced on behalf of the defendants is tantamount to saying that inasmuch as they have failed to complete the houses and fulfill their contract at the agreed time (whether due to their own fault or not as we make no pronouncement on this aspect of the case) that factor must operate to stultify the existing agreement. We do not think so. The discussions about the completion dates of the several houses arose later after the concluded agreement and in view of the subsequent action or inaction of the defendants in not completing the houses.
It was further argued that the learned trial judge should have confined his decision only to the documents produced by the plaintiffs to prove their case and that he should not have employed in deciding to give the plaintiffs judgment on the point those documents which the defendants had produced in evidence for the purpose of disproving the plaintiffs’ case. For this argument learned counsel for the defendants had placed reliance on the Footnotes No.5 to Order 18/12 of the Rules of the Supreme Court in England (Annual Practice 1970 at p. 362) which, under the caption “Agreement”, reads in part as follows:
“Where a contract is alleged to be implied from a series of letters or conversations or otherwise from a number of circumstances, the contract should be alleged as a fact, and the letters, conversations or circumstances set out generally, and further particulars requiring details will not generally be ordered.”
The Rule referred to does not purport to alter the existing law or rule of pleadings. All it says is that the pleadings of the parties must be cogent enough to give the other party notice of what is intended to be canvassed at the hearing. Neither the rule itself nor the Footnotes relied upon by learned counsel attempted to restrict the freedom of a judge in the eventual consideration of a case to put together and reassemble the facts before him. The final exercise of judgment must of necessity involve a consideration of all the correspondence that is properly put in evidence by both sides, all the correspondence tendered in order to establish the case and all that produced in order to disprove the existence of a contract. It is only after such detailed consideration that a tribunal can fairly come to a conclusion as to whether or not the parties actually arrived at an agreement. See Thomas Hussey v. Horne-Payne (1879) 4 App. Cas. 311. The task of analysing the several letters and attempts to reconcile the one with the other is undoubtedly a very difficult one calling for the most serious examination of each and every one of several documents until the tribunal is able to say whether a contract is indeed established as in the words of Lord Cairns, L.C. thus:
“But, my Lords, over and above that, I must say that having read with great care the whole of this correspondence, there appears to me clearly to be pervading the whole of it the expression of a feeling on the one side and on the other that those who were ordering the coals were ordering them, and those who were supplying the coals supplying them, under some course of dealing which created on the one side a right to give the order, and on the other side an obligation to comply with the order. ”
See per Lord Cairns in Brogden & Ors. v. Metropolitan Railway Co. (1877) 2 A.C. 666 at 679. The learned trial judge in the present case did consider this aspect of the case for in the course of his judgment he observed thus:
“There is the further submission by the learned counsel that the plaintiffs should win or lose on the documents expressly pleaded by them and that they have no right to rely on any such documents tendered by the defendants. There is certainly some force in the argument that the plaintiffs should have pleaded “general correspondence”, in addition to those specifically pleaded as this will enable them to put forward any other documents material to their case. But the failure to do so is not to make me look at the case in different compartments as I have to examine all the evidence, documentary and oral as a whole to see if there is a concluded contract or not.”
We are satisfied that this aspect of the case was properly considered and dealt with by the learned trial judge and we are equally satisfied that there was a concluded agreement between the parties as described on the plaintiffs’ writ and that this was the agreement which the learned trial judge decreed. The arguments on the relevant grounds of appeal must and do fail.
Again it was contended that the learned trial judge ought not to have allowed the plaintiffs to amend their writ and statement of claim in the course of the address of the learned counsel for the plaintiffs. In the course of argument on the application for amendment, learned counsel for the plaintiffs summarised the effect of the amendment sought (and evidently granted) thus:
“The original amended writ appears to give the impression that the agreement in respect of the 8 houses was to be carried into effect by the execution of one deed of lease. But for the avoidance of doubt, the new amendment is to show that it does not necessarily mean that one deed will cover all 8 houses or remaining five houses.”
and learned counsel for the defendants summarised the effect of it as follows:
“The amendment now sought to be made would make it read as it were a claim based on an agreement to lease five (5) as soon as each house is are completed on a day.
It does not appear that the learned trial judge made any formal order on the application although he listened to elaborate arguments on both sides as to the propriety or otherwise of granting the application. The records show however that at the end of the argument the plaintiffs filed an amended writ and an amended statement of claim incorporating the amendments sought and the defendants also filed an amended statement of defence in answer to the new writ and statement of claim.
The rules for granting amendments of pleadings or proceedings are very flexible and a great deal depends on the discretion of the judge or tribunal. Where there has been no breach of any relevant rule of law in that respect a party opposing the grant of leave to amend such pleadings or proceedings has a rather uneasy task and unless he can establish prejudice, unnecessary expense, irreparable inconvenience or lack of good faith, the hands of the court are free. In the present case, it was not shown and has not been shown to us that the learned trial judge did not properly exercise his discretion to grant leave to amend and we cannot accede to the ground of appeal which complains about this.
Lastly, it was argued before us for the defendants that the order on them to refund the deposit of 2,500 Pounds (or: N5,000) with interest ought not to have been made. The amount involved was in fact paid by the plaintiffs to the defendants’ Company which had demanded it as a total deposit payable in respect of five houses at the rate of 500 Pounds (or:N1,000) per house. The pleadings of the parties show that the plaintiffs paid the amount to the defendants at their request. In answer to the paragraph of the statement of claim, pleading this payment, the defendants’ statement of defence, as set out earlier on in this judgment at paragraphs 6 and 7, admits the receipt of the money but asserts that it was paid over by the defendants through their own estate agents for transmission to the plaintiffs. By letter dated the 29th November, 1968, from the defendants, Exhibit N, they wrote to Messrs. Irving & Bonnar, the plaintiffs’ solicitors, noting the readiness of the plaintiffs to pay down this deposit of 2,500 Pounds (or:N5,000) and stated further therein as follows:
“The writer would like to add that this installation in no way affects the payments of the 500 Pounds deposit and we will be looking forward to receiving same early next week”.
On the 16th December, 1968, by their letter of that date, Exhibit O, the plaintiffs’ solicitors, Messrs. Irving & Bonnar, forwarded to the defendants’ estate agents, Messrs. R.C.Irving & Co. Ltd. the cheque for the deposit of $2,500 (or N5,000).In the letter, Exhibit O, the plaintiffs’ solicitors prescribed a number of conditions to be satisfied by the defendants before the release of the money to them by their agents. One of such conditions was the demand for a firm date or dates from the defendants for the completion of the several houses. On the 11th January, 1969, by their Letter, Exhibit P, the defendants wrote to Messrs. R.C. Irving & Co. Ltd., their own estate agents as follows:
JAMMAL ESTATE: GERRARD ROAD
Further to your letter of 6th January, 1969 we wish to inform you that the following are the revised completion dates for the five remaining houses for Shell-BP.
House No. 11 22.2.69
House No. 12 22.2.69
House No. 13 15th March, 1969
House No. 14 15th March, 1969
House No.2 22nd March, 1969
We are doing our utmost to improve on these completion dates, and shall keep you informed in this respect. In the meantime, could you please arrange for the release of the 500 Pounds deposits, at least for the first two houses.
Assuring you of our best attention at all times.”
The defendants’ letter dated the 11th January, 1969, also requested the defendants’ agents to pay over to them the deposits which they were holding. By their letter dated the 20th January, 1969, Exhibit R, the defendants’ agents, Messrs. R.C. Irving & Co. Ltd., forwarded to the defendants the amount of the deposit. It appears that at that time the defendants’ agents were all but satisfied with the rate of progress of the construction works. This is reflected in their letters of the 14th February, 1969 (Exhibit S), the 21st February, 1969 (Exhibit T) and the 18th March, 1969 (Exhibit U). These letters were all written to the defendants by their own agents, Le. Messrs. R.C. Irving Co. Ltd. In the last of the letters, that is Exhibit U, the agents did not hide their qualms about the sincerity of the defendants to perform their contract with the plaintiffs and they also asked them for revised completion dates. Copies of Exhibit U were sent to the plaintiffs and to the plaintiffs’ solicitors, Messrs. Irving & Bonnar. Letters reflecting the same or similar feelings were also written by the defendants to their own agents, as for example Exhibit Y (dated the 18th January, 1969), Exhibit AA1(dated the 14th February, 1969), Exhibit BB or JJ 9 dated the 5th March, 1969) and Exhibit CC (dated the 10th March, 1969). Exhibit CC reads thus in part:
“I have under separate cover written to our Bank to refund to your client the sum of 2,500 Pounds deposit and if they wish, we are prepared to pay, in addition, any interest they may charge on the deposit.”
Then came the letter Exhibit V dated the 25th March, 1969, written by the defendants to their own agents and to which we had earlier on in this judgment referred. By Exhibit V, the defendants returned the amount of 2,500 Pounds (or N5, 000) to their own agents stating that they thereafter regarded “this matter as closed as it is not possible for us to reach agreement”. This, as stated before, was on the 25th march, 1969 and by their letter Exhibit DD, dated the 29th March, 1969, the defendants’ agents acknowledged the receipt of the amount of 2,500 Pounds (or N5, 000) from the defendants. Messrs. R.C. Irving & Co. Ltd., apparently attempted to return this amount of 2,500 Pounds (or N5, 000) to the plaintiffs’ solicitors. The solicitors refused to accept the refund for by their letter, Exhibit EE, dated the 11th April, 1969, Messrs. Irving & Bonnar wrote to the defendants’ agents as follows:
“Further to your letter dated the 29th march, 1969, we return herewith your cheque for 2,500 Pounds which we are not authorised to accept. Our client has instructed us to inform you that Jammal Engineering (Nigeria) Limited might consider paying this amount into Court to abide the outcome of legal proceedings which our client is instituting. Please advise your principal of our client’s decision.
We enclose herewith the counterpart of the Tenancy Agreement in respect of houses 7, 8 and 9.
Kindly acknowledge receipt.”
It seems as if the money had since remained in the custody of the defendants’ agents. The position therefore is as follows:
16/12/68-money paid to defendants’ estate agents by plaintiffs’ solicitors (Exhibit 0).
20/1/69-money released to defendants by their own agents (Exhibit R). 2513/69-money returned by defendants to their own agents (Exhibit V).
29/3/69-receipt of money acknowledged by defendants’ agents (Exhibit DD).
11/4/69- money sent to plaintiff’s solicitors and refused by them and returned to defendants’ agents (Exhibit DD).
As stated before, the learned trial judge in his judgment adjudged that the defendants should pay back to the plaintiffs this amount of 2,500 Pounds (or N5, 000) with five per cent interest until the time of payment. In his consideration of this claim, the learned trial judge observed:
“In spite of the later amendment to the writ of summons to include the claim for the return of deposit of 2,500 Pounds it must be deemed that this claim was made on the 8th of April, 1969 when the original writ was filed. But as at this date the amount was in the hands of the plaintiffs or their agents, Messrs. Irving & Bonnar. It was argued as to why the plaintiffs should sue for the amount which was already in their hands. The explanation for this was that the plaintiffs were contemplating an action for specific performance, and to hang on to the money in their hands will be prejudicial to that relief. On the 11th April, 1969 the cheque of 2,500 Pounds was returned to the defendants’ agent, Messrs. R.C. Irving who is still holding to it up till today. In the circumstances I will hold that the plaintiffs are entitled to the return of their deposit with interest.”
We observed before that the contention on appeal of learned counsel for the defendants is that the order for the refund of the deposit with interest should not have been made. When counsel was pressed by us as to the reasonableness of his submissions he modified his stand and stated that the defendants were prepared “to refund the amount of 2,500 Pounds with interest to the date we first returned it”. There is no dispute that the defendants’ agents sent a cheque in respect of this amount to the plaintiffs’ solicitors for by their letter Exhibit EE dated the 11th April, 1969, Messrs. Irving & Bonnar, plaintiffs’ solicitors, rejected the cheque which, as expressed in the letter Exhibit EE, was sent to them by the defendants’ agents by their letter of the 29th March, 1969. Admittedly, the defendants by their own letter of the 16th March, 1969, Exhibit CE, were willing to pay “any interest they may charge on the deposit”.
In those circumstances, it appears to us that the only matter for decision on this point is the period for which the deposit should carry interest. The learned trial judge ordered that the defendants should refund the deposit with interest from the 10th March, 1968 to the 7th April, 1969, the latter date being the day before the issue of the writ of summons in this case, his view being that “it must be deemed that this claim was made on the 8th April, 1969 when the original writ was filed”. We are not addressed as to any authority or principle on which the learned trial judge had relied for this conclusion and we are far from convinced that such conclusion was axiomatic. The learned trial judge took the view as well that although the plaintiffs’ solicitors were holding the deposit with them on the date returned, the deposit as such retention of it would be prejudicial to their claim for specific performance.
Here again we do not share the views of the learned trial judge for clearly the return of the deposit to the plaintiffs’ solicitors in the circumstances may even provide some evidence of the breach of their contract by the defendants. Very important as well, and having a peculiarly adverse effect on the decision of the learned trial judge on this point, is the fact that eventually he found against the plaintiffs’ claim for specific performance. We think it inequitable for the plaintiffs to ask for the return with interest of money already in the hands of their solicitors at the time of the issue of the writ. The defendants would refund the plaintiffs’ deposit of 2,500 Pounds (or N5,000) together with interest at the rate of five per cent per annum from the date it was paid to the defendants’ agents, the 16th December, 1968 to the date the amount was repaid to the plaintiffs’ solicitors, the 29th March, 1969.
The plaintiffs have also appealed against the decision of the learned trial judge complaining about the rejection by the court of their claims for specific performance and injunction and the paucity of the amount of damages awarded them by the learned trial judge 3,000 Pounds (or N6,000). Learned counsel for the plaintiffs submitted that the learned trial judge should have ordered that the lease Exhibit UU be executed by the defendants. After finding and decreeing the agreement between the parties, the learned trial judge considered the claim for specific performance and concluded, rightly in our view, that as the completion dates for the several houses were not immediately available it was not possible, without unduly embarrassing the defendants, to clamp down on a firm date or firm dates for the commencement of the several leases there must be. He observed thus:
“The learned counsel for the plaintiff suggested to me that in order to obviate this apparent difficulty, an order can be made that a contract leasing the houses and when they are completed could be made. In the first place, such order in my view will seem vague and contrary to my findings that specific dates have been agreed upon. Again if I have to make an order that the defendants execute leases in respect of each house commencing from the various dates that I have found, house 11 from 22/2/69, house 12 from 22/269, house 13 from 15/3/69 house 14 from 15/3/69 and house 2 from 22/369. I know in my mind that this is an unfair order to make because rents will become due as from those dates when it is obvious from the evidence that the houses were not ready for occupation on those dates. I will be making the plaintiffs to pay almost half a year’s rent without occupying the premises. In all the circumstances, I find eventually that the breach of the said contract has been committed.”
We are firmly of the view that the learned trial judge was right in his approach to this point and we are in agreement with his conclusions concerning the claim for specific performance.
There is another aspect of the claim for specific performance concerning which we think we should express some comments. The proposed lease, Exhibit UU, is in the conventional form of conveyancing and does not follow the prescribed form in the Registration of Titles Act, cap. 181. Earlier on in this judgment we had expressed our views on a similar document. Exhibit W, and pronounced against the validity of such a document for the purpose for which it was intended. If Exhibit UU had been executed as a proper lease, it would manifestly partake of the inadequacies of Exhibit W and would in any case have been useless. We have said enough to dispose of the claim for specific performance as it is presented.
Learned counsel for the plaintiffs further argued that the damages awarded are manifestly too small inasmuch as the learned trial judge failed to base his assessment on the evidence of the difference between the amount of rent contracted and the actual rent which the plaintiffs would have had to pay for similar houses in the circumstances of the breach. Learned counsel for the defendants for his part contended that as the plaintiffs failed to prove an agreement they should also have failed on their claim for damages. We observe shortly that the submissions on behalf of the defendants must fail inasmuch as we had already found, as the learned trial judge did, that the plaintiffs established that there was between them and the defendants such an agreement as they have claimed. If there was, as indeed there is in the present case, a breach of an executory agreement, the remedy of damages for such breach is clearly available to the plaintiffs. The learned trial judge in the present case found as much when in his judgment he stated, concerning the plaintiffs’ claim for damages, as follows:- .
“Before considering this claim I want to make it clear that I hold that the defendants committed a breach of the contract, which I found established, when they wrote on 10/3/69 as in Exhibit “cc” saying “we regret to inform you that we have no desire to let the remaining five houses anymore, and we regret any inconvenience caused as some of these houses are now required by the Ministry of Defence, Lagos and the rest will be utilized by us”.
In assessing the damages which he decided to award, the learned trial judge directed himself thus:
“As to the claim itself, it is one for general damages, but the plaintiffs set out to prove it as if it were a claim for special damages.”
Thus, the learned trial judge tried to distinguish between special and general damages in respect of breach of contract. It is pertinent to observe, concerning this exercise, that it was unfortunate. The law with regard to the assessment of damages was laid down as far back as 1854 in the case of Hadley v. Baxendale (1854) 9 Ex (Ch. 341, where at p. 354 of the Report, Alderson, B. expressed the law as follows:
“Now we think the proper rule in such a case as the present is this: Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such a breach of contract should be such as may fairly and reasonably be considered either arising naturally, according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it.”
The formula does not leave any room for any further classification of damages into general or special for whatever species of damage it be, to be sustainable such damage must flow naturally from the breach of the contract in the sense that it was contingent or dependent upon a matter or factor expressly or impliedly within the contemplation of the parties to the contract at the time of its institution. The categorisation into general and special damages is exceptionally confusing and in some cases had occasioned substantial miscarriage of justice. See Chanrai & co. (Nigeria) Ltd. v. Khawam (1965) 1 All N.L.R. 182; also Maiden Electronic Works Ltd. v. The Attorney-General of the Federation (1974) 1 S.C. 53 (especially at p. 97).
Be that as it may, the learned trial judge proceeded thereafter to give consideration to the claim and eventually assessed damages. He first of all dismissed as irrelevant evidence the materials supplied as to the rates of rentals payable for comparable accommodation in the locality of the houses intended to be leased by the plaintiffs. He then considered what he described as the inconvenience to the staff of the plaintiffs who could not be accommodated in the houses in dispute and awarded on this score the amount of 3,000 Pounds (or N6, 000).
Before us, the plaintiffs contended that this amount was insufficient and the defendants contended that it should not have been awarded at all. We have already rejected the submissions of learned counsel for the defendants that damages should not be awarded because no agreement was found.
Indeed an agreement was found by the learned trial judge in the terms of the writ. Learned counsel for the defendants further submitted however that any award of damages must be based on an assessment of the loss suffered by the plaintiffs, as a result of the breach and certainly not on inconvenience to their staff. Learned counsel for the plaintiffs, on the other hand, submitted that the measure of damages is the difference between the contracted rental of the houses and what the plaintiffs would have had to pay for comparative hiring. Learned counsel for the plaintiffs in support of his submissions relied on the cases of John Bain v. Richard Fothergill (1874) 7 App. Cas. 158; Wright v. Dean (1948) 2 All E.R. 415 and Hollington Bros. v. Rhodes & Anor. (1951) 2 All E.R. 578. We are of the opinion that the damages which can naturally flow from the breach of a contract of the type in question in the present case, can only properly be measured by the difference in the amount of the rent on which the parties based their contract and such rent as one of the parties actually paid in respect of alternative accommodation which such a party had had to take up in consequence of the breach. It should be pointed out that in the present case there is no evidence whatsoever that the plaintiffs actually hired other alternative accommodation for their staff who would have gone into the houses in dispute and that in consequence of this, the plaintiffs’ Company had actually paid out that much for such alternative accommodation. There was of course abundant evidence of rentals of comparative accommodation. The learned trial judge himself observed this and agreed as much in the course of his judgment. What he regarded as the basis for assessment of what he described as general damages, is the evidence of rental figures of comparative accommodation.
We are clearly of the opinion that in this respect the learned trial judge was in error of law. His line of reasoning completely overlooks the fact that the contract between the parties was an executory contract. The measure of damages appropriately is the loss flowing from the contract and unless the element of speculation was in the contemplation of the parties at the time of the contract, whatever else could have accrued to a party as a result of that speculation on the contract is not relevant. That was in effect the decision of the House of Lords in the case of Bain v. Fothergill (supra). In Wright v. Dean (supra), Wynn Parry, J., as he then was, explained and applied the principle expounded in Hadley v. Baxendale (supra). We are in agreement with his explanation and application of that principle. Hollington Brox. v. Rhodes (supra) is a classic example of an assessment of damages based on actual expenses incurred by the plaintiffs as a necessary result of the breach by the defendants of their contract in that case. The principle of assessment established by the authorities is clear generally. It is that a party in breach of his contract is liable in damages and the aggrieved party is entitled to such an owing necessarily from the breach in that either the injury suffered by the aggrieved was in the contemplation of both parties at the time of the institution of the contract or is an inevitable consequence of the breach. With respect to the case in hand, as we have stated before, such damages must be assessed with reference to any loss actually suffered by the plaintiffs as a result of the defendants’ breach to let the houses to them: the loss calculated not on the figures of what possibly they could have expended or suffered but on the figures of what they actually expended or suffered.
The learned trial judge had found that there was no evidence from the plaintiffs on this aspect of the case (he described it undoubtedly erroneously as “special damages”) and indeed before us learned counsel for the plaintiffs conceded that there was no such evidence. In that case plainly there should have been no award, not because the plaintiffs are not entitled to it but because they failed to supply the necessary materials on which an assessment of their loss or damages can be based. The arguments in respect of this ground of appeal must be upheld in favour of the defendants.
Both sides have failed or succeeded in parts on this appeal and it is fair to desist from making any order as to costs. In the circumstances therefore, we make the following orders:
- (i) With respect to Suit No. LD/160/69 we:
(a) dismiss the defendants’ appeal against the judgment for a declaration of contract between the parties as well as their appeal against the refund of the deposit of 2,500 Pounds (or N5, 000) to the plaintiffs with respect to this latter claim we modify the order of the High Court and order that the defendants should refund the said amount of N5, 000 to the plaintiffs with interest at the rate of five per cent per annum on the amount from the 16th December, 1968 to the 29th March, 1969 and
(b) allow the appeal of the defendants against the order awarding damages of 3,000 Pounds (or N 6,000) against them and set aside the said order of the High Court, Lagos in this respect.
(ii) We dismiss the appeal of the plaintiffs against the orders of the High court refusing to grant specific performance of the contract and injunction as well as plaintiffs’ appeal on the adequacy or otherwise of the amount of damages awarded.
- with respect to Suit No. LD/243/69 we allow the appeal of the defendants (i.e. the plaintiffs in that suit-Jammal Engineering (Nigeria) Ltd.) and grant them the declaration therein sought that document Exhibit W dated the14th March, 1969, is void as a lease or me propemes therein purported to be assured.
- We set aside the order of the High Court, Lagos, as to costs and direct that if any monies had been paid in consequence of this order as to costs such monies should be refunded. We order that both in the High Court and in this Court the parties should bear their own costs.
- We direct that the foregoing shall be the judgment of the Court.
Other Citation: (1974) LCN/1794(SC)