Legalpedia Citation: (2015-04) Legalpedia (SC) 26116
In the Supreme Court of Nigeria
Fri Apr 24, 2015
Suit Number: SC. 259/2007
CORAM
AYO G. IRIKEFE, JUSTICE, SUPREME COURT
PARTIES
REBOLD INDUSTRIES LTD APPELLANTS
MRS. OLUBUKOLA MAGREOLA & ORS
RESPONDENTS
AREA(S) OF LAW
SUMMARY OF FACTS
The Plaintiffs/Respondents, as a firm of solicitors, were engaged by Mandilas Group Limited to prepare a deed of sub-lease between Mandilas Group Limited (the sub-lessor) and the Defendant/Appellant, Rebold Industries Limited (the Sub-lessee). There was a clause in the sublease agreement which made the Defendant/Appellant liable for the payment of legal fees of Mandilas Group Limited. After the execution of the sub-lease agreement, the Plaintiff/Respondent instituted an action against the Defendant/Appellant at the High Court of Lagos State seeking to recover legal fees, in respect of the sub-lease, from the Defendant/Appellant. The Defendant/Appellant neglected to file a statement of defence to the Plaintiff/Respondent’s statement of Claim in consequence of which the trial Court entered judgment for the Plaintiff/Respondent. The Defendant/Appellant filed an application at the Lagos State High Court praying the trial Court to set aside its judgment and strike out the suit in its entirety because the Plaintiff/Respondent lacked the locus standi to enforce the sub-lease agreement between the Defendant/Appellant and Mandilas Group Limited since he was not privy to the sub-lease agreement. The trial Court dismissed the application on the ground that the Plaintiff/Respondent had the locus standi to institute the suit given the fact that there was a representation in the sub-lease agreement to the effect that the Defendant/Appellant was responsible for the legal fees of the Solicitors of Mandilas Group Limited. Dissatisfied with the judgment of the trial Court, the Defendant/Appellant appealed to the Court of Appeal where the appeal was dismissed. Still dissatisfied with the judgment of the lower court, the Defendant/Appellant has appealed to the Supreme Court.
HELD
Appeal Allowed.
ISSUES
1. Whether the lower court was right in deciding that the Respondent has the locus standi to sue for the payment of his professional fees in respect of an agreement he prepared between Mandilas Group Limited and the Appellant to which he, (Respondent) is not a party?”
RATIONES DECIDENDI
PRIVITY OF CONTRACT – WHETHER A STRANGER CAN SUE UPON A CONTRACT ENTERED INTO BETWEEN TWO PARTIES
“As far back as 1881, this principle of law that a stranger cannot sue upon a contract entered into between two parties, he not having furnished any consideration for it, was settled. See Tweddle V Arkhinson L B. & S reported (1881 83) All ER Rep 369. See also Dunlop Pneumatic Tyre Company Ltd V Selfridge & Company Ltd (1915) AC 847.” PER J.I.OKORO, J.S.C
NECESSITY OF LOCUS STANDI IN ACTIONS – BEFORE A PARTY FILES A MATTER IN COURT, HE MUST SHOW BY HIS PLEADINGS THAT HE HAS A CAUSE OF ACTION AGAINST THE DEFENDANT
“Every appeal or suit filed before a court of law is based and anchored on its peculiar facts and the reliefs sought are not made in vacuum but relate to and derive from the raw facts of the case. The courts, in their task of determining the rights and obligations of parties are usually guided by the facts adduced before the court and the law applicable thereto. Before a party files a matter in court, he must possess what is called a cause of action which usually is against some person, persons or institutions. That is to say, a plaintiff must show by his pleadings that he has a cause of action maintainable in a court of law against the defendant. He cannot sue just anybody. It must be someone who has wronged him one way or other. You cannot sue someone who has not done you any wrong.”PER J.I.OKORO, J.S.C
PRIVITY OF CONTRACT – WHETHER A CLAUSE IN A CONTRACT AGREEMENT MADE FOR THE BENEFIT OF A THIRD PARTY CONFERS RIGHT ON THE THIRD PARTY TO SUE UNDER THE CONTRACT
“Only parties to a contract can maintain an action under the said contract. Even where a clause of the contract agreement is made for the benefit of a third party, the said third party cannot sue under the contract. See Ebhota V Plateau Investment & Property Development Company Ltd (2005) 1-5 NWLR (Pt 948) 266, All of the Federation v AIC Ltd (2000) 10 NWLR (pt 675)
293. PER J.I.OKORO, J.S.C
EXCEPTIONS TO GENERAL RULES OF LAW- EXCEPTIONS TO GENERAL RULES OF LAW HAS TO BE PROPERLY PLACED BEFORE THE COURT AND MUST BE SUCH THAT WILL NOT DESTROY THE GENERAL PRINCIPLE WHICH HAS GUIDED AND STABILIZED CONTRACTUAL RELATIONS FOR A LONG TIME
“I know that in every general rule, there is always an exception. But such exception has to be properly placed before the court and must be such that will not destroy the general principle which has guided and stabilized contractual relations for a long time irrespective of how one feels about it. In the instant appeal, there is nothing to remove it from the general principle on privity of contract.” PER J.I.OKORO, J.S.C
PRIVITY OF CONTRACT – WHETHER A PLAINTIFF WHO HAS NO PRIVITY OF CONTRACT WITH THE DEFENDANT CAN ESTABLISH A CAUSE OF ACTION FOR BREACH OF CONTRACT
“A plaintiff who has no privity of contract with the defendant will fail to establish a cause of action for breach of contract as he will simply not have a locus standi to sue the defendant on the contract”. PER J.A.FABIYI, J.S.C
SCOPE OF PRIVITY OF CONTRACT- ONLY PARTIES TO A CONTACT OR AN AGREEMENT CAN ENFORCE SAME
“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 their 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 V Ogunlowo (1997) 6 NWLR (Pt 509) page 360, Ikpeazu V ACB Ltd (1965) NMLR 374 – 378. Put differently, only parties to a contact 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. See Kano State Oil and Ahmed Products Ltd V Kofa Trading Company Ltd (1996) 3 NWLR (Pt 436) 244, Lagos State Development Property Corporation V Nigerian Land & Sea Food Ltd (1992) 5 NWLR (Pt 244) 653, Union Beverages Ltd V Pepsi Cola International Ltd (1994) 3 NWLR (Pt 330) 1 and Chukwumah V Shell Petroleum (1993) 4 NWLR (Pt 289) 512”. PER J.I.OKORO, J.S.C
ESSENCE OF THE DOCTRINE OF JUDICIAL PRECEDENT – THE RATIONALE BEHIND THE DOCTRINE OF JUDICIAL PRECEDENT THAT LOWER COURTS SHOULD FOLLOW THE DECISION OF A SUPERIOR COURT IS TO AVOID CONFUSION
“The doctrine of judicial precedent otherwise referred to as stare decisis is well rooted in our jurisprudence. It ought to be strictly followed by all lower courts. There is sense in it to avoid confusion. See: Royal Exchange Assurance Nig. Ltd. v. Aswani Textiles Ind. Ltd. (1991) 2 NWLR (Pt 176) 639 at 672. It is not proper to refuse to follow the decision of a superior court. A lower court should tow the line. See: Atolagbe v. Awuni & Ors. (1997) 7 SCNJ1 at pages 20, 24 and 35.” PER J.A.FABIYI, J.S.C
CASES CITED
STATUTES REFERRED TO
English Law of Property Act 1925
Legal Practitioners Act Cap 207 Laws of the Federation, 1990