CORAM

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Folasade Ayodeji Ojo Justice of the Court of Appeal

Ngozika Uwazurunonye Okaisabor Justice of the Court of Appeal

Ruqayat Oremei Ayoola Justice of the Court of Appeal

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PARTIES

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1. CHIEF JOHN E. KENNETH OYEGUN

2. ONOME FOODS LIMITED

3. OSAZUWA EMOKPAE OYEGUN

APPELLANTS 

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1. MR. CHRISTOPHER AKINSANYA ATKINSON

2. MR. OMOLOLU AUDELY ALAKIJA

3. MR. CHRISTOPHER ANANI

4. ROBIN SERVICES NIGERIA LIMITED

5. CORPORATE AFFAIRS COMMISSION

RESPONDENTS 

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AREA(S) OF LAW

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CONTRACT LAW, COMPANY LAW, LIMITATION OF ACTION, FRAUD, EQUITY, RESCISSION, SPECIFIC PERFORMANCE, CIVIL PROCEDURE, ORIGINATING SUMMONS, COMPANIES AND ALLIED MATTERS ACT, EVIDENCE LAW, FEDERAL HIGH COURT JURISDICTION, LACHES, REPUDIATION

 

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SUMMARY OF FACTS

This case arose from a contract dated 21st April 1988 for the sale of shares in Robin Services Nigeria Limited (4th Respondent) between Mr. Christopher Akinsanya Atkinson and others (1st-3rd Respondents) as vendors, and Chief John E. Kenneth Oyegun and others (Appellants) as purchasers. The agreed purchase price was initially £400,000, later renegotiated to £300,000, and eventually converted to N750,000 at the prevailing exchange rate of N7.50 to £1.

The Appellants paid a total of N350,000 (representing approximately 82% of the purchase price), leaving a balance of N400,000 unpaid. After the initial payment, the vendors transferred possession of the company including its seal, share certificates, books, and leasehold property at 45A Campbell Street, Lagos to the Appellants.

The dispute arose when the Respondents discovered in 2006-2007 that the Appellants’ solicitor had attempted to surreptitiously register the company shares with the Corporate Affairs Commission without completing payment. The Respondents alleged this constituted fraud and sought rescission of the contract.

The Respondents commenced action by originating summons in 2012, seeking declarations that the Appellants acted fraudulently, that the contract should be rescinded, and various consequential reliefs including recovery of the company property. The Appellants filed a preliminary objection challenging jurisdiction on the grounds that the action was statute-barred under the Limitation Law of Lagos State.

The Federal High Court dismissed the preliminary objection and granted all reliefs sought by the Respondents, leading to this appeal.

 

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HELD

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1.The appeal succeeded in part.

2.The Court held that allegations of fraud exempted the case from the operation of the Limitation Law of Lagos State under Section 58 of the law.

3.The Court found that the contract had not been completed as full payment had not been made, making rescission available to the Respondents.

4.The Court held that the trial judge erred in failing to consider all issues raised by the Appellants, constituting a denial of fair hearing.

5.The Court determined that the suit was wrongly commenced by originating summons due to allegations of fraud, which required oral evidence.

6.The Court found that the Federal High Court had jurisdiction over the ancillary relief regarding the property.

7.The case was remitted to the Chief Judge of the Federal High Court for retrial by another judge.

8.Parties were ordered to bear their respective costs.

 

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ISSUES

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1.Whether or not the Contract of Sale between the Parties was a Contract under seal caught by Section 12 of the Limitation Law of Lagos State and does not therefore come under the exceptions of Section 13 therefore?

2.Whether the Learned Trial Judge was right in his interpretation of the provisions of Sections 8, 12, 13, 34, and 38 of the Limitation Law of Lagos State in stating that this contract, which is one under seal, was not statute-barred?

3.Whether under S.12 of the Limitation Law of Lagos, the Suit of the Plaintiffs at the lower Court was not statute-barred at the time it was brought?

4.Was the Learned Trial Judge right when he refused to make specific findings on the six (6) issues submitted for determination by the Appellants when he failed to consider and pronounce on the said issues in his ruling?

5.Whether or not damages would not have been an adequate remedy to the grudge of the Plaintiff/Respondents in the Court below, in other words, was the Learned Trial Judge not wrong in granting all the declarations in equity sought by the Respondents when damages would have been adequate remedy?

6.Whether or not the Plaintiffs’ delay in bringing the action before the lower Court has defeated the equitable relief of rescission?

7.Whether or not in the suit of the Plaintiff/Respondents the remedy of rescission was available, the contract having been completed?

8.Whether the Honourable lower Court was right when he found that the share transfer contract was never completed, when indeed it was, all parties treated it as completed?

9.Whether the Learned Trial Judge was right in making a finding of fraud against the Appellants in a hostile proceeding based on conflicting affidavit evidence for which there was no oral evidence before the Court, in other words, should the Honourable Lower Court Judge have ordered a conversion of the suit to a writ of summons with pleadings?

10.Whether the Learned Trial Judge was right in refusing the Appellants prayer that pleadings be filed in the matter before him as same was a contentious suit and hostile in nature?

11.Whether the Learned Trial Judge was right in holding that the Appellants have repudiated the agreement prior to the rescission of the Contract by S.P.A Ajibade & Co. Letter dated the 21st day of September 2007?

12.Whether the Learned Trial Judge was right in granting all the declaration and orders sought by the 1st to 4th Respondents despite the conflicting affidavit evidence before the Court which was not resolved by the Court?

13.Whether or not the order of the Court below ordering possession of the property known as No. 45A Campbell Street, Lagos, from the Defendants/Appellants to the 1st – 4th Plaintiffs/Respondents upon the dispute over the said property in this case brought by the latter was with proper jurisdiction?

 

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RATIONES DECIDENDI

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FRAUD AS EXCEPTION TO LIMITATION LAW

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“Section 58 of the Limitation Law of Lagos State, 2003 provides that where, in the case of an action for which a period of limitation is fixed by the Law, either: (a) The action is based on the fraud of the defendant or his agent or of any person through whom he claims or his agent; or (b) the right of action is concealed by the fraud of any such person; the period of limitation shall not begin to run until the plaintiff has discovered the fraud or could with reasonable diligence have discovered it.” – Per Supreme Court in SIFAX (NIG) LTD Vs. MIGFO (NIG) LTD

 

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CORRECT DECISION THROUGH WRONG REASONING

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“Judgment of Court will not be reversed on appeal simply because the conclusion and decision were reached from a wrong reason. This is so because, once the decision is correct, the wrong channel or route through which that decision was made would not nullify the said decision.” – Per Supreme Court in K S J S C Vs. TOLANI

 

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DISABILITY, MISTAKE AND FRAUD AS EXCEPTIONS

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“a party would not be allowed to take advantage of the Limitation Law where there is clear evidence of disability, mistake, fraud and in certain cases involving personal injury, death.” – Per Court in EJURA Vs. IDRIS

 

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FAILURE TO CONSIDER ALL ISSUES

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“Where a Court inexplicably fails to accord due consideration to the case or issues presented by a party, it would result in breach of the right of fair hearing as enshrined in Section 33 of the 1979 Constitution, which is in pari materia with Section 36(1) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended). Indeed, it amounts to a sheer abdication of duty for a Court to fail or decline to determine a case or issue as presented to it by a party.” – Per Supreme Court in AMINU Vs. SUBAIR

 

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FRAUD VITIATES CONTRACTS

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“Fraud vitiates every contract in which it enters and an instrument, the consideration for which is fraudulent even in part is voidable at the option of the party defrauded.” – Per Court in F.A.T.B. LTD Vs. PARTNERSHIP INVESTMENT CO. LTD

 

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COURT WILL NOT ENFORCE FRAUDULENT CONTRACTS

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“a Court of law will not lend its aid to enforce the performance of a contract tainted with fraud or illegality.” – Per Court in OKAFOR Vs. SOYEMI

 

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LACHES AND FRAUD

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“it is a principle of equity that no length of time is a bar to relief in the case of fraud in the absence of laches on the part of the person defrauded.” – Per Court in AROWOLO Vs. IFABIYI

 

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DEFINITION AND APPLICATION OF LACHES

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“Laches means that a person takes no steps for a long time to enforce his right when the knowledge of it is brought to his notice.” – Per Court in AGBARA Vs. AMARA

 

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DISCHARGE OF CONTRACT BY PERFORMANCE

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“A contract is discharged, only when both parties are released from their obligation under the agreement. A contract is usually discharged by performances, if both parties have done all that is required of them by the express agreement.” – Per Supreme Court in ACHONU Vs. OKUWOBI

 

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PAYMENT AS FUNDAMENTAL TERM

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“If a purchaser fails to complete payment of the purchase price, the vendor can treat that as a repudiation and claim damages for breach of contract, or he may seek specific performance.” – Per Court in MUSTAPHA Vs. ABUBAKAR

 

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PROOF OF FRAUD BEYOND REASONABLE DOUBT

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“Where there are competing claims and interests, the one with a better case shall prevail, if both are put on the scale of justice to see where the pendulum preponderates. This is by comparing the documents relied upon to see which speaks better truth than the other. However, where the issue borders on fraud or forgery or change of election result or whichever language or term is used, it is criminal and must be proved beyond reasonable doubt.” – Per Supreme Court in NAMMAGI Vs. AKOTE

 

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WRONG COMMENCEMENT BY ORIGINATING SUMMONS

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“The proper order a trial Court should make where it finds that a suit before it was wrongly commenced by way of originating summons is to order pleadings, and not to dismiss such suit or pronounce on the merits of the suit.” – Per Supreme Court in ADEYELU II Vs. AJAGUNGBADE III

 

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ANCILLARY JURISDICTION

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“By virtue of section 7(3) of the Federal High Court Act, where jurisdiction is conferred upon the Court under subsections (1), and of the section, such jurisdiction shall be construed to include jurisdiction to hear and determine all issues relating to, arising from or ancillary to such subject matters.” – Per Supreme Court in CRESTAR INT. NAT. RES. LTD Vs. S.P.D.C.N. LTD

 

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CASES CITED

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STATUTES REFERRED TO

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1. Companies and Allied Matters Act (CAMA) (Sections 81, 151, 152, 246(1), 248, 251, 258, 291, 292(1), 541, 543)

2. Constitution of the Federal Republic of Nigeria 1999 (as amended) (Sections 36, 251)

3. Federal High Court Act 2004 (Section 7(3))

4. Federal High Court (Civil Procedure) Rules 2009 (Order 3 Rules 2, 6, 8; Order 13 Rules 5, 6)

5. Companies Proceedings Rules 1992

6. Evidence Act 2011 (Section 135)

 

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