DANIELS INDUSTRIES INCORPORATED VS REBOLD INTERNATIONAL LIMITED

Legalpedia Citation: (2015) Legalpedia (CA) 33731

In the Court of Appeal

Thu Nov 19, 2015

Suit Number: CA/L/436/2009

CORAM

MONICA BOLNA’AN DONGBAN-MENSEM

PARTIES

DANIELS INDUSTRIES INCORPORATED2. EQUIPMENT AND CONTROL NIG LTD

APPELLANTS

REBOLD INTERNATIONAL LIMITED

RESPONDENTS

AREA(S) OF LAW

Nil

SUMMARY OF FACTS

This is an interlocutory appeal against the Ruling of the High Court of Lagos State.

The Plaintiff’s (now Respondent’s) case is that it entered into a Foreign Sales Representative Agreement with the 1st Appellant wherein the Respondent was appointed to be its authorised representative in Nigeria and by the said agreement the Respondent was entitled to earn commissions on business deals attracted on behalf of the 1st Defendant. By a letter dated 30-4-1997 the 1st Appellant had informed the Respondent about the re-organisation and restructuring of its activities in which a new legal entity known as DANIEL EUROPE LIMITED was incorporated and designed as a point of contact for the Respondent for ease of business. On the 25-10-1999 the said JIM GRAY wrote another letter to the Respondent informing it that DANIEL INCORPORATED has been acquired by EMERSON GROUP as a fully owned subsidiary and that the 2nd Appellant has been appointed as the sole agent for Nigeria. The Respondent felt that this was in breach of the 1988 agreement which made it the exclusive representative for the 1st Appellant in Nigeria, hence it instituted this Suit in the lower court. Upon being served with the processes, the Appellants reacted by filing a 2nd further Amended Statement of Defence and Amended Counter-Claim. Subsequently, by a Motion on Notice dated 16-01-2007, the Appellant sought an order of the lower court to dismiss the Respondent’s Suit in limine in its entirety. The Respondent opposed the application by filing a Counter-affidavit. At the hearing of the application, in a Ruling, the Appellant’s application was dismissed. The Appellant being dissatisfied with the said Ruling filed a Notice of Appeal this instant court.

HELD

Appeal allowed.

ISSUES

1. Whether in the circumstances of the Appellants’ application dated January 16, 2007, the Learned Trial Judge was right in holding that it must refrain from determining the substantive issues between the parties at an interlocutory stage? (Grounds 2 and 3).

Whether based on an affidavit evidence provided by the Appellants in support of the application dated January 16, 2007 there were sufficient material evidence before the lower court to determine that the Respondent is not a party to the foreign Sales Representative Agreement dated April 1, 1988? (Grounds 1, 4 and 5).

RATIONES DECIDENDI

LOCUS STANDI – MEANING OF LOCUS STANDI

Locus Standi denotes the legal capacity to institute an action in a court of law. The term “Locus Standi” therefore means the legal standing or capacity to initiate, commence, or institute an action in a competent court of law without any legal inhibition or impediment. Locus Standi is a condition precedent to the determination of a Suit on the merit though it is not dependent on the success of a case. See AJAYI VS ADEBIYI (2012) 11 NWLR (PT 1310) 137; ADEKUNLE VS ADELUGBA (2011) 16 NWLR (PT 1272) 154; FIDELITY BANK PLC VS MBACHU (2012) 1 NWLR (PT 1231) 260; TAIWO VS ADEGBORO (2011) NWLR (PT 1259) 562. PER – SAMUEL CHUKWUDUMEBI OSEJI, JCA

LOCUS STANDI – HOW A PLAINTIFF CAN SATISFY THE COURT THAT HE HAS THE LOCUS STANDI

For a Plaintiff to satisfy the court that he has the Locus Standi, he should be able to show that his civil rights and obligations have been or are in danger of being infringed. There must therefore be a connection between such Plaintiff and the disclosed cause of action concerning his rights or obligations and such Locus Standi is determined by examining the Statement of Claim and the chances that the action may not succeed is an irrelevant consideration. See TAIWO VS ADEGBORO (Supra). PER – SAMUEL CHUKWUDUMEBI OSEJI, JCA

LOCUS STANDI – WHETHER OR NOT LOCUS STANDI AND JURISDICTION ARE INTERWOVEN

Locus Standi and jurisdiction are interwoven in the sense that Locus Standi goes to affect the jurisdiction of the court before which an action is brought. Thus where a Plaintiff has no Locus Standi to bring a Suit, the suit becomes incompetent and the court lacks the jurisdiction to entertain same and the only order to make in the circumstance is that of dismissal. See AJAYI VS ADEBIYI Supra where the Supreme Court also held at page 175-176 that:-

“the guiding principles to determine whether a person has Locus Standi or not are:-

(a) He must be able to show that his civil rights and obligations have been or are in danger of being infringed,

(b) The fact that a person may not succeed in the action is immaterial;

(c) Whether the civil rights and obligations have been infringed depends on the particular of the case;

(d) The court should not give any unduly restrictive interpretation to the expression.

PER – SAMUEL CHUKWUDUMEBI OSEJI, JCA

LOCUS STANDI – THE TEST FOR DETERMINING WHETHER A PERSON HAS LOCUS STANDI

In TAIWO VS ADEGORO Supra, the court also held at pages 580 that the test for determining whether a person has Locus Standi are:-

(a) The action must be justifiable; and

(b) There must be a dispute between the parties.

It was further held by their Lordships that an issue as to whether a Plaintiff has Locus Standi or not is determined by examining only the Statement of Claim and the chances that the action may not succeed is an irrelevant consideration.

See also OJUKWU VS OJUKWU (2008) 12 SC (PT III) 1.

It however behoves a Plaintiff who seeks to enforce his civil rights or obligations in a court of law to show sufficient interest in the Suit. See PAM VS NASIRU MOHAMMED (2008) 5-6- SC (PT 1) 83; A.G LAGOS STATE VS EKO HOTELS LTD (2006) 9 SCNJ 104. PER – SAMUEL CHUKWUDUMEBI OSEJI, JCA

CONFLICT IN AFFIDAVITS – RESOLUTION OF CONFLICTS IN PARTIES AFFIDAVITS

It is very clear from the above set out paragraphs that there are fundamental conflicts in the parties affidavits which of necessity should be resolved through oral evidence or documentary evidence.  See EIMSKIP LTD VS EXQUISITE IND. (NIG) LTD (2003)4 NWLR (PT 809) 88 wherein the Supreme Court held inter alia, that where affidavit evidence are in conflict, oral evidence should be led to reconcile the conflict, unless there is documentary evidence which can tilt the contradictory or “quarrelling” evidence one way or the other.  Also in BAWA VS PHENIAS (2007) 4 NWLR (PT 1024).  It was held by this court that conflict in affidavits can be resolved by authentic documentary evidence which support one of the affidavits in conflict with another and where the court has enough documentary evidence at its disposal, it can suo motu resolve conflicting affidavit evidence by resorting to documentary evidence. PER – SAMUEL CHUKWUDUMEBI OSEJI, JCA

PRIVITY OF CONTRACT – THE POSITION OF THE LAW ON THE DOCTRINE OF PRIVITY OF CONTRACT

This is generally the position of the law given the doctrine of Privity of contract.  Thus, in MAKWE VS NWUKOR (2001) 14 NWLR (PT 33) 356, it was held that:

“It is trite law that as a general rule a contract affects only the parties thereto and cannot be enforced by or against a person who is not a party to it: In other words, only the parties to a contract can sue or be sued on the contract and, generally, a stranger to a contract can neither sue nor be sued on the contract even if the contract is made for his benefit and purports to give him the right to sue or make him liable upon it”.

See also NEGBENEBOR VS NEGBENEBOR (1971) 1 ALL NLR 210; IKPEAZU VS ACB LTD (1965) NMLR 374 and BORISHADE VS NATIONAL BANK OF NIGERIA LTD (2005) LPELR (11968) CA; A.G. FEDERATION VS A.I.C LTD (2000) 10 NWLR (PT 675) 293.  AFRIBANK (NIG) PLC VS OSISANYA (2000) 1 NWLR (PT 642) 599. PER – SAMUEL CHUKWUDUMEBI OSEJI, JCA

PRIVITY OF CONTRACT – WHETHER OR NOT A CONTRACT AFFECTS ONLY THE PARTIES, AND CANNOT BE ENFORCED BY OR AGAINST A THIRD PARTY

As much as said decision may sound persuasive or convincing, I am however bound to follow the numerous decisions of the Supreme Court which had made it clear that as a general rule a contract affects only the parties thereto and cannot be enforced by or against a person who is not a party thereto, even if the contract was made for his benefit and purports to give him the right to sue a make him liable upon it.  The very recent decision of the Supreme Court in REBOLD INDUSTRIES LTD VS MRS OLUBUKOLA MAGREOLA  & ORS (2015) LPELR (24612) SC further confirmed this state of jurisprudence  in Nigeria wherein the Court per OKORO JCA held inter alia that:

”I must state clearly that there is in the law of contract what is referred to as privity of contract.  It is always between the contracting parties who must stand or fall, benefit or lose from the provisions of the contract.  That is to say, their contract cannot bind third parties nor can third parties take or accept liabilities under it nor benefit there under. See OGUNDARE VS OGUNLOWO (1997) 6 NWLR (PT 509) page 360; IKPEAZU VS ACT LTD (1965) NMLR 374 AT 378 put differently, only parties to a contract or an agreement can enforce it.   A person who is not a party to it cannot do so even if the contract was made for his benefit as in this case.”

In the light of the above, I am persuaded to hold that the Respondent have not shown or satisfied this court that it was a party to the Foreign Sales Representative Agreement entered in 1988 between the 1st Appellant and REBOLD INTERNATIONAL as revealed in Exhibits KE1 and KE 2.  There is therefore no privity of contract between the said Respondent and the 1st Appellant in which case the Respondent to my mind, has no locus standi but institute this action. PER – SAMUEL CHUKWUDUMEBI OSEJI, JCA

DISCRETION OF COURT – DISCRETION OF COURT MUST BE EXERCISED JUDICIOUSLY AND JUDICALLY

A grant or refusal of the application herein is written the discretionary powers if the Court. This discretion must be exercised judiciously and judicially towards resolving the controversy between the parties. PER – SIDI DAUADA BAGE JCA

LOCUS STANDI – A PLAINTIFF MUST HAVE THE NECESSARY STANDING TO OBTAIN RELIEFS IN A CAUSE

For the Plaintiff to be able to obtain reliefs in a cause, he must have the necessary standing. That is why issues of cause of action or standing to institute an action must be raised in the limine before going into the merit of the matter in dispute between the parties. AREGHEOSULA AROWOLO & ANOR V. OBA S.A. AKAIYEJO II, THE OGOGA OF IKERE EKITI (2011) LPELR- 3804. PER – YARGATA BYENCHIT NIMPAR JCA

CASES CITED

STATUTES REFERRED TO

Nil

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