3PLR – ALHAJI W. O. LAWAL (SUING BY HIS ATTORNEY ALHAJI AMUSA LAWAL) V. RAIMI AJANI & 5 ORS

POLICY, PRACTICE AND PUBLISHING, 3PLR, LAW REPORTS

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ALHAJI W. O. LAWAL
(SUING BY HIS ATTORNEY ALHAJI AMUSA LAWAL)

V.

RAIMI AJANI & 5 ORS

HIGH COURT OF OYO STATE (IBADAN)

SUIT NO. 1/411/74

  30TH APRIL 1976

3PLR/1976/77  (HC)

BEFORE

AGBAJE,J.

 

REPRESENTATION

Sarumi – for the plaintiff

Aluko – for the defendant

 

MAIN ISSUES

Specific Performance- When appropriate to grant relief-Sale of land-Agreement to sell—Part payment of purchase pace—When time is not essence of contract—Effect of conveyance to third party before full purchase price is paid. Damages for breach of contract

MAIN JUDGEMENT

AGBAJE, J:

By the endorsement at the back of his writ of summons the plaintiff’s claim against the defendants is as follows:

“The plaintiffs claim against the defendants is for the specific performance of the agreement made in October 1973 at Ibadan for the sale of the land situate at Oni Village, Ibadan by the defendants to the plaintiff for N1,800.00 (one thousand and eight hundred Naira) out of which the plaintiff paid N1,200.00 (one thousand and two hundred Naira) to the defendants. The defendants have refused to take the balance of N600.00 (six hundred Naira) from the plaintiff and also refused and neglected to execute the deed of conveyance in respect of the said land in favour of the plaintiff, in pursuance of the said agreement, in spite of repeated demands. In the alternative, the plaintiff claims against the defendants

(i) an order for the refund of the part payment and

(ii) N2,000.00 (two thousand Naira) special and general damages for the breach of the said agreement.”

Exhibit “B”, a power of attorney, authorizes the attorney, plaintiff Alhaji Amusa Lawal, to bring this action in the name of Alhaji W.O. Lawal. It is common ground in this case that by a written agreement dated 10th day of October 1973, which is Exhibit “A” in this case, the defendants to this action as representatives of Oni Elesin family agreed to sell to Alhaji W.O. Lawal a piece of land lying and being at Oni Elesin Village Oojo District, Ibadan, measuring three acres, for the sum of N1,800. It is also common ground that pursuant to this agreement Alhaji W.O. Lawal paid the defendants a sum of N 1,200 towards the purchase price, thus leaving a sum of N600.00 to be paid on the purchase price. As regards the unpaid balance of the purchase price, that is the sum of N600.00, the agreement, Exhibit “A” provides as follows:

“Now witnesseth this document, that in pursuance of the said agreement and in consideration of the payment of N1,200.00 paid by the purchaser to the vendors the receipt of which the vendors hereby acknowledged, and in consideration of the purchaser’s promise to pay the balance of N600.00 at the time of the execution of the conveyance of the land the vendors as beneficial owners of the said land particularly described above hereby transferred the ownership of the said land on behalf of themselves and other members of Oni Elesin family on to the purchaser.”

That part of the passage in the agreement which I have just quoted which says that the vendors by Exhibit “A” hereby transferred the ownership of the land to which it relates to the purchaser is incapable of having the intended legal effect since Exh. A is not a conveyance which is the only way of transferring ownership of land under English Law—see the case of Lydia Erinosko v. Tunji Owokoniran (1965) N.M.L.R.479. It can only take effect as an agreement to sell land and this is in fact in keeping with a recital in Exhibit “A” which says-

“And whereas the vendors desired to sell the said land to the purchaser for the sum of 141,800.00 and the purchaser agreed to buy the said land from the vendors for N1,800.00”

It is also in keeping with another part of the agreement, Exhibit “A”, which provides as follows:

“The vendors hereby agreed to sign a deed of conveyance then prepared by the purchaser’s Solicitor at the purchaser’s expense.”

I have just held that the document Exhibit “A” is only an agreement for the sale of land. It is nowhere stated in it that the completion of the contract would take place at a particular time. A priori time was not made an essence of the contract. It is common ground in this case that the defendants to this action have sold and conveyed to another person the piece of land to which the document Exhibit “A” relates. The reason for their doing so is contained in the evidence of the first P. W., Raimi Ajani and that of the second P.W., Lamidi Adigun. Since the evidence of first P.W., Raimi Ajani in this regard relates to the information which another, most presumably the second P. W., Lamidi Adigun, supplied him, I will be content to refer to the evidence of the latter as to why the defendants sold and conveyed the land to which Exhibit “A” relates to someone other than Alhaji W.O. Lawal. This is what Lamidi Adigun said on this point:

“I am the fourth defendant in this case. I know the plaintiff. I know the other defendants. They are my relations. About a month after Exhibit “A” was executed I went to the house of the second P. W., Ladepo and that of Adedubu to demand the balance of the purchaser price. I did not go to any other person to demand the balance of the purchase price. I went to the house of Ladepo and Adedubu about three times.

Ladepo and Adedubu advised us to return the money the plaintiff paid towards the purchase price to him and sell the land to another person.”

It will appear from paragraph 14 of the plaintiff’s Statement of Claim that the demands by the defendants through Ladepo and Adedubu for the balance of the purchase price got to the notice of the plaintiff. What the defendants are thus saying is that when the plaintiff failed to pay the balance of the purchase price after they had made about three demands for it they sold the land to another person. It is clear on the evidence before me in this case that after the defendants had made repeated demands for the balance of the purchase price they did not serve a notice on the plaintiff requiring him to complete the contract. As I have said earlier on in this judgment it is nowhere stated in the agreement, Exhibit “A”, that the contract should be completed within a specified time. It appears to me that the following passage in the speech of Lord Mercy in Stickney v. Keble reported in [1915] Appeal Cases 386 at page 413 is relevant to the case in hand –

“My Lords, I am of the opinion that joy’s judgment was right. After the long delay which had taken place the plaintiff had a right to make time of the essence of the contract by serving the defendants with a notice sufficient in point of time to enable them to complete his title, and he could only be deprived of his right by contract or by conduct of his own which will make it unfair for him to insist upon his right”

The defendants in the instant case have not exercised their right to make time of the essence of their contract with the plaintiff, after what they call an undue delay on the part of the plaintiff to complete, by serving on the latter a notice to complete the contract. Since they have not exercised this right I do not think it was open to them to repudiate as they did the contract to which Exhibit “A” relates by selling the land the subject matter of the said contract to another person. I am therefore\ satisfied that the defendants are in breach of the agreement Exhibit “A”. On the evidence of the first plaintiff witness, Alhaji Amusa Alamu Lawal, which I accept I am satisfied that he tendered the conveyance Exhibit “F” in this case to the defendants for execution. I am also satisfied that at the same time he tendered the balance of the purchase price, N600.00, to the defendants. His evidence also satisfies me that the defendants refused to execute the conveyance and to accept the balance of the purchase price. It is not clear on the evidence adduced by the plaintiff whether what I have just said took place before or after the defendants had sold and conveyed the land the subject matter of Exhibit “A” to another person.

I don’t think that lack of evidence of this point is of any moment at this stage of my judgment in this case. Suffice it to say now that the plaintiff has established to my satisfaction a breach of the agreement, Exhibit “A”, by the defendants. And it is clear to me that the defendants have now put it out of their power to complete the agreement, Exhibit “A”, because they have sold the land to which it relates to another person. This being so I cannot decree specific performance of the contract, Exhibit “A”.

I now turn to the alternative claim of the plaintiff which since the Statement of Claim supersedes the writ of summons must be taken as contained in paragraph 23 of his Statement of Claim:

“In the alternative the plaintiff claims against the defendants representing Oni Elesin family jointly and severally:

(i) a refund of N1,200.00 (one thousand and two hundred Naira) already paid by the plaintiff to the defendants.

(ii) N4,000.00 (four thousand Naira) as special and general damages for breach of agreement.

Particulars of Special Damages

Solicitor’s charge for land agreement N18.00

Cost of clearing the land in October 1973 N1,200.00

Survey fees 400.00

Cost of clearing the land in September 1974 360.00

Conveyancing fees 100.00

Attestation fee 1.90k

Assessment on agreement 27.00

General damages 1,893.10k

Total N4,000.00

The plaintiff claims the refund of the part-payment of the purchase price he made, that is, the sum of N1,200.00. I have no hesitation in holding that he is entitled to this amount; so I award it to him. In addition he claims N4,000.00 as special and general damages for the breach of the contract he entered into with the defendants.

Mcgregor on Damages 13th Edition says at page 465 paragraph 659 in relation to breach by seller of the contract for sale of land:

“Breaches of contract by a seller of land fall into two categories corresponding to the division of the transaction into contract and conveyance. Thus breach by failure to convey and breach by delay in conveying fall within the first category while into the second fall breaches of the covenants in the conveyance.”

In the case in hand we are concerned with breach by failure to convey; so it falls within the first category stated above. It was held in Bain v. Fothergill (1874) L. R. 7. H.L. 158 that where a seller of land failed to complete the contract through a defect of title, damages in respect of loss of his bargain were not recoverable, in the absence of fraud, by the purchaser. I do not think the rule in Bain v. Fothergill would apply here since the cause of failure to convey does not arise from a defect of title. The defendants in the case in hand refused to convey in breach of their contract with the plaintiff and can now no longer convey the land in question to the plaintiff because they had conveyed the land to another, and, on the evidence before me they had made a better bargain. So it appears to me that the general rule for contract damages which is to put the plaintiff in the same position as if the contract had been performed will apply in the instant case. Mcgregor on Damages says again at page 477, paragraph 678:

“The normal measure of damages is the market value of the property at the contractual time for completion less the contract price.”

This measure had been awarded in cases from Engell v. Fitch (1869) L.R. 4 K.B. 659 down to Diamond v. Campbell-Jones [1961] Ch. 52 till today. And at page 479, paragraph 680, the same work says:

“Where the plaintiff recovers for loss of his bargains he cannot also recover the expense of investigating title for as was pointed out in Re Daniel [ 191712 Ch. 405, where the Court so held, if they had had the property conveyed to them, of course, they would have to incur all the expenses of investigating the title … On the other hand where the plaintiff was unable to prove that he has suffered any loss of bargain, Morton J. held in Wallington v. Trunsend [1939] 1 Ch. 588 that he was then entitled to recover the conveyance expenses as damages.”

The principle to be applied when considering damages in a breach by the seller of a contract for sale of land is also stated by Brightman J. in Lloyd v. Stanbury [1971] 1 W.L.R. 535 at page 546, thus:

“It appears tome that that decision (In Re Daniel [1917] 2 Ch. 405) is at least some authority that a disappointed buyer suing for damages because the vendor is not willing to implement the bargain is not limited to compensation for expenditure incurred strictly after the execution of the contract. In my judgment the damages which he is entitled to recover include expenditure incurred prior to the contract representing (1) legal costs of approving and executing the contract and (2) the costs of performing an act required to be done by the contract notwithstanding that the act is performed in anticipation of the execution of the contract. In addition the buyer is entitled on general principles to damages for any other loss which ought to be regarded as having been within the contemplation of the parties.

I think that there is an important limitation to be imposed on the claim for damages in the claim such as the present. If the buyer is let into possession prior to completion and sees fit to improve the property after the date of the contract, I do not think that the expenses which he incurs can in any normal case be recovered for two reasons. In the first place it is not usually, in my view, in the contemplation of the parties that the buyer will spend money in improving the property before it has been conveyed to him. Secondly if the buyer treat the contract as repudiated he is not in my judgment entitled to recover an expense which he only incurred because he was at that time keeping his option open to sue for specific performance. If he decides to claim damages such expenditure is the very reverse of mitigation of damages, it increases them. In other words the purchaser cannot keep his option open at the expense of the vendor and then elect his intermediate expenditure. I am not referring to any expenditure which is necessary to preserve the property.”

In the light of the above passage from the judgment of Brightman J. in Lloyd v. Stanbury it is my view that the claim for Solicitor’s fee for land agreement, N18.00, is recoverable by the plaintiff since it relates to expenditure incurred prior to the contract relating to the legal cost of preparing the land agreement. I am also of the view that the cost of surveying the land to which the agreement, Exhibit “A”, relates, i.e. N400, the conveyance fees in respect of the conveyance Exhibit “A”, i.e N100 and the attestation fee paid on the conveyance Exhibit “F”, i.e. N1.90, are recoverable by the plaintiff because they represent cost of performing acts required to be done by the contract notwithstanding that they are performed in anticipation of the execution of the contract. The land to which Exhibit “A” relates has to be surveyed before a survey plan of it which must be attached to the conveyance to be executed by the defendants in favour of the plaintiff can be prepared. As I said above the agreement Exhibit “A” specifically provides that the defendants shall execute a conveyance in favour of the plaintiff.

I said earlier on in my judgment that it is not clear on the evidence adduced by the plaintiff whether the defendants sold and conveyed the land to which Exhibit “A” relates before the conveyance Exhibit “F” was prepared. One thing however is clear to me on the evidence of the first P.W. which I accept and that is that the plaintiff did not know of the sale of the land to which Exhibit “A” relates to another by the defendants before the conveyance Exhibit “F” was prepared. If it were otherwise I would have held that the plaintiff having known that the defendants could no longer convey the land in dispute to him should have mitigated his losses by not going into expenses of surveying the land or preparing a conveyance in respect of it. In that event I would have held that the plaintiff was not entitled to these items of damages which I have just held he is entitled to. I am satisfied on the authority I have just cited that the plaintiff is entitled to the stamp duty he paid on the agreement Exhibit “A”, that is, the sum of N27.00. In clearing the land to which Exhibit “A” relates in October 1973 and in September 1974 as the plaintiff said he did, he was in my judgment carrying out items of improvement to the land. And it does not appear to me that such acts are necessary for the preservation of the land to which the contract Exhibit “A” relates. Following Brightman J. in Lloyd v. Stanbury I hold that damages in respect of these items of improvement to the land to which Exhibit “A” relates which the plaintiff carried out were not in the contemplation of the parties to Exhibit “A” before conveyance. So I reject the claim for N1,200.00 cost of clearing the land in October 1973 and that for 14360 cost of clearing the land in 1974. I am satisfied on the evidence before me that the plaintiff paid 14100 for the conveyance Exhibit “F”. I am also satisfied that the plaintiff paid A1400.00 for the survey plan which he used in the preparation of the conveyance Exhibit “F”. I award him this amount too. The plaintiff is also claiming N1,893.10 as general damages. It appears to me that the evidence in support of this claim is that part of the evidence of the first P. W. which says that the land the subject matter of Exhibit “A” now costs N2,000.00 per acre as against N600.00 per acre which he contracted to pay for it in 1973. This evidence relates in my view to loss of bargain. And as I have pointed above damages for loss of bargain are awarded in lieu of and not in addition to the various items of damages which I have hitherto awarded the plaintiff. On the evidence before me the plaintiff has not proved any other loss which ought to be regarded as having been within the contemplation of the parties to the contract, Exhibit “A”. Thus I am refusing the claim for the general damages. In the result I hereby enter judgment for the plaintiff against the defendants as follows:

Refund of part-payment of purchase price N1,200.00

Solicitor’s fee for preparation of land agreement 18.00

Survey fees 400.00

Conveyancing fees 100.00

Attestation fees 1.90

Stamp Duty on Land Agreement 27.00

241,746.90

 

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