Importance of Time in Execution of a Contract
The Appellant accepted an offer to purchase a property belonging to the Respondent for the sum of N1,500,000.00. The Appellant made part payment of the purchase price in two installments of N500,000.00 and N200,000.00 with the receipts evidencing payment issued on 3rd June, 1992. She promised to liquidate the balance of N800,000.00 within a week. However, when she failed to honour the promise, the Respondent instructed his Solicitors to inform the Appellant of his decision to terminate the sale, on the ground that the project for which he needed the money from the sale, had been frustrated by the Appellant’s inability to pay the purchase price within the agreed stipulated time.
The Appellant (Plaintiff at the trial Court), filed an action against the Respondent seeking inter alia, the specific performance of the contract of sale of the property situated at and being at No. 65, Bode Thomas Street, Surulere, Lagos, by executing and doing in favour of the Appellant, all necessary acts, deeds, forms and things for the due vesting and registration of ownership of the said property in him, and obtaining and delivering to him, a valid copy of the Respondent’s tax clearance certificate, and of all other documents necessary for supporting an application for change of ownership in his favour. The trial Court delivered judgement in favour of the Appellant. Dissatisfied, the Respondent successfully appealed the decision of the trial Court. The Appellant, being unhappy with the decision of the Court of Appeal, filed this appeal to the Supreme Court.
The Respondent filed a preliminary objection to the competence of the 2nd, 4th and 5th Grounds of Appeal, on the basis that they were filed contrary to the provisions of Section 233(2) and (3) of the Constitution of the Federal Republic of Nigeria, 1999.
Issues for Determination The main issues for determination as identified by the parties are:
(1) Whether ground (vi) contained in the Notice of Appeal filed by the Respondent before the Court of Appeal ought not to have been struck out for want of competence;
(2) Whether the Court of Appeal was correct in its conclusion that the Respondent’s tax clearance certificate had not been made an issue between the parties and whether the production of the said certificate by the Respondent was not crucial or significant to the performance of the sale agreement; and
(3) Whether the Court of Appeal was correct in regarding time as being of the essence of the agreement between parties. If not, then whether there was justifiable basis for the learned Justices of the Court of Appeal to have quashed the trial Court’s order for specific performance.
Arguments The Respondent argued by way of Preliminary Objection that the 2nd, 4th and 5th Grounds of Appeal were of mixed law and facts and the Appellant’s failure to seek leave of the Court of Appeal or the Supreme Court to file and argue same was fatal to the appeal.
On the main issues formulated for determination, Counsel for the Appellant, submitted that the Court of Appeal was wrong when it failed to strike out the 6th Ground of Appeal, which complained about an error of law and fact and that such should not have been spared for being incompetent. On the 2nd issue, he argued that the lower Court was wrong in its conclusion that the Respondent’s tax clearance certificate was not made an issue between the parties at the trial Court. He argued on the 3rd issue, that the Court of Appeal took paragraph 12 of the Amended Statement of Claim in isolation of the context in which it was made, placed undue reliance on the said paragraph, and arrived at a wrong conclusion.
Counsel for the Respondent argued otherwise on the 6th Ground of Appeal, stating that although the ground was couched to combine error of law and facts which the Courts have decided to be incompetent; nonetheless, the application of such rules should not be reduced to a mere matter of technicality. On the 2nd issue, he argued that the tax clearance certificate did not affect the disbursement of the loan and payment of balance of purchase price. He submitted on the 3rd issue, that time was of the essence in the contract of sale between the parties. Court’s Judgement and Rationale Deciding the preliminary objection, the Court relied on the case of UBA LTD. v STAHIBAU GMBH (1989) 3 NWLR (Pt. 110) 374 and concluded that, the facts disclosed in the disputed grounds were not in contention, and that the three grounds which were the subject of the objection, were of law and did not require the leave of court.
On the first issue in the main appeal, the Court observed that the Appellant did not raise any argument in connection with the competence of the grounds at the Court of Appeal, despite being aware of how the 6th ground of appeal was couched. Relying on the cases of K. APENE v BARCLAYS BANK OF NIGERIA & ANOR (1977) 11 NSCC 2 and SHONEKAN v SMITH (1964) All NLR 168, the Court reiterated the general rule that an appellant would not be allowed to raise on appeal to the Supreme Court on questions or issues which were not raised or considered by the lower court, but where the question involves substantial points of law, substantive or procedural, and it is plain that no further evidence could have be adduced which would affect the decision of them, the court will allow the questions to be raised and the points taken, so as to prevent an obvious miscarriage of justice.
The Court thereafter, noted that error of fact where particulars are sufficiently provided, cannot render a ground of appeal incompetent; that the Appellant did not challenge the 6th ground at the lower Court first, and that there was no evidence that leave was sought and obtained at the Supreme Court to raise the 1st ground in the instant appeal. Their Lordships relied on the case of ARAKA v EJEAGWU (2000) 15 NWLR (Pt. 692) 684 to hold that, the Appellant could not raise at the apex Court, the question which was not raised or considered by the lower Court, without leave of either the lower Court or the Supreme Court.
The Supreme Court identified the two types of jurisdiction of Courts as: jurisdiction as a matter of procedural law and substantive law. Relying on the case of OBIUWEUBI v CBN (2011) 7 NWLR (Pt. 1247) 465, their Lordships held that, where a litigant may submit to procedural jurisdiction, he could not confer jurisdiction on a court, where the Constitution or Statute or any provision of the Common Law limits the Court’s jurisdiction. Where jurisdiction of a Court is a matter of procedural law, failure to comply with certain aspects of the procedure, becomes a mere irregularity, which does not render the action incompetent. Failure of the Appellant to object to the 6th Ground of Appeal amounted to a waiver; more so, as the issue complained of was a procedural irregularity, it did not render the Ground of Appeal incompetent.
On the second issue, the Court noted that PW2, (the Assistant Manager from the Bank) under cross examination, admitted that the Bank had given the Appellant enough money to cover what was required to pay the balance of the purchase price. Also, from the evidence given, the release of money to the Appellant and the removal of the encumbrance from the property, were before 15th June, 1992, long before the promise on the 3rd of July, 1992 to pay the balance of the money on the property. Based on the foregoing facts, the Court agreed with the lower Court, that the delay in making the payment by the Appellant, could not be attributed to the Respondent’s inability to furnish his tax clearance certificate, as the encumbrances on the property had been removed and the Appellant had also admitted during evidence in chief, that the matter of tax clearance did not affect the approval of the loan. The Court further agreed with the lower Court that the production of the tax clearance by the Respondent, was not crucial or significant to the performance of the sale agreement.
On the third issue, Their Lordships agreed with the Court of Appeal, that time was of the essence in the execution of the contract. Relying on the case of ODUSOGA v RICKETS (1997) 7 NWLR (Pt. 511) 1, the Court stated that where a purchaser of land makes part payment of the purchase price, but defaults in paying the balance, there can be no valid sale, even where the purchaser is in possession. Such possession is incapable of defeating the vendor’s title. In a contract of sale of land, failure to pay the purchase price, constitutes a fundamental breach which goes to the root of the case upon which the court cannot decree specific performance. In this case, the Appellant failed to pay the outstanding sum at the expiration of the time mutually agreed upon, and even after time was extended for her by the Respondent.
On a final note, the Court stated that, the learned Justices of the Court of Appeal were justified when they quashed the trial Court’s Order for Specific Performance. Having resolved the issues against the Appellant, the Court dismissed the appeal.
Representation: Mr. Dotun Oduwobi with A.B. Jimoh for the Appellant
Mr. A.R. Fatunde with C.A. Makpu Esq. and A.U. Umose for the Respondent.
Reported by Optimum Law Publishers Ltd (Publishers of the Nigerian Monthly Law Reports (N.M.L.R))
"WHERE A PURCHASER OF LAND, MAKES PART PAYMENT OF THE PURCHASE PRICE, BUT DEFAULTS IN PAYING THE BALANCE, THERE CAN BE NO VALID SALE, EVEN WHERE THE PURCHASER IS IN POSSESSION. SUCH POSSESSION, IS INCAPABLE OF DEFEATING THE VENDOR’S TITLE"