Home » Real Estate News » Court Stories » Supreme Court backs lessee in Mandilas property transaction
misconduct charge court stories alleged fraud

Supreme Court backs lessee in Mandilas property transaction

A Supreme Court of Nigeria, has dismissed the claims of three persons – Mrs. Olubukola Magreola, Miss Mojisola Magreola and Mr. Babajide Magreola in a property transaction involving them, Mandilas Group Limited and Rebold Industries Limited for not having the locus standi

The trio had substituted the original respondent who died while the proceedings at the Court of Appellant lasted.

And the judgment of the apex’s court favours the appellant, Rebold Industries Limited, which sought its intervention, after it lost both at the high and appellate courts.

It was in an appeal against the judgment of the Court of Appeal, sitting in Lagos, delivered on November 17, 2007 wherein the court dismissed the appellant’s appeal, primarily on the ground that the respondent as plaintiff in the High Court of Lagos State, had locus standi to institute the action to enforce a contractual provision in a deed of sublease between the appellant and Mandilas Group Limited.

Sometimes in 1995, the service of the respondent as a firm of solicitors, were retained by Mandilas Group Limited for the preparation and engrossment of a deed of sublease between the Mandilas Group and Rebold Industries Limited, the appellant herein. The sublease was in respect of the property known and situated at 7A Creek Road, Apapa, Lagos.

It was a term of the agreement that the appellant would be responsible for the legal fees incurred in preparing the deed of lease.

The appellant failed to make good the said terms of the agreement.

On the May 14, 1997, the respondent took out a writ of summons endorsed with a statement of claims against the appellant for the recovery of the said fees incurred in the preparation and engrossment of the deed.

After the appellant’s failure to respond to the summons by the respondent, a default judgment was entered for the respondent on June 19, 1998.

On November 26, 1998, the appellant filed a motion before the Lagos State High Court challenging the jurisdiction of the said court on the ground that the respondent lacked the locus standi to have instituted the action in the first place.

But the trial court dismissed the motion in a ruling pronounced on the February 21, 2000.

Aggrieved by the said ruling, the appellant filed an appeal at the Court of Appeal on May 14, 2002.

The court below, like the trial court, dismissed the appellant’s appeal on the ground that even though the respondent was not a party to the deed of sublease, he still had locus standi to sue on the representation made by the appellant in the agreement to pay the respondents fees.

Still dissatisfied with the judgment, the appellant appealed to the Supreme Court, where it argued that the Court of Appeal should have followed and applied the decisions of the Supreme Court instead of its own previous decision on the issue of privity of contract.

The respondent, on his part, argued that the facts of his case represented one of the exceptions to the general rule on privity of contract.
He argued further that the appellant gave an undertaking under the deed of sublease, and enjoyed the service rendered by the respondent; and that in the circumstance, he was entitled to sue for his professional fees by virtue of section 16 of the Legal Practitioners Act.

According to the notice of appeal, which contains four grounds of appeal, appellant’s counsel, Dr. Wale Olawoyin, distilled two issues for the determination of the appeal.

READ ALSO – Kashamu seeks to restrain Federal Govt from seizing N20b property

Olawoyin wanted the Supreme Court to examine and make pronouncement on whether the respondent who was not a party to the deed of sublease had the locus standi to enforce a clause in the sublease, which was to his benefit, that is, the payment of professional fees in respect of the preparation of the deed of sublease.

Also, the counsel sought an answer on whether the respondent who was not a party to the deed of sublease may nevertheless have locus standi to sue in the contract by simply showing a sufficient interest or injury to be suffered.

Respondents’ counsel, Messrs. Jim Omoigberale, placed before the apex court a question on 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 prepared between Mandilas Group Limited and the appellant to which he, (respondent) is not a party?

In deciding the appeal, Justice John Okoro said that without much ado, it was crystal clear that the two issues distilled by the appellant are but one issue, adding that, the two issues both ask the same question on whether the respondent had locus to enforce a clause in the sublease when he was not party thereto.

Having summarized the issues into one, Okoro said: “I shall therefore treat appellants two issue. This appeal shall, in the circumstance, be determined based on the said issue.”

According to the Judge, the respondent herein, not being a party to the sublease agreement lacked the capacity or locus standi to sue under the said agreement. “There was therefore a feature in the suit, which deprived the learned trial judge of the jurisdiction to entertain the matter.”

Okoro added that the feature in the said suit, being that the plaintiff, now respondent did not possess the requisite ground to sue the appellant under the agreement.  “The court below was, with due respect, in error to have upheld the decision of the learned trial judge not to set aside the judgment, which was handed down without jurisdiction.  In the circumstance, this issue is hereby resolved in favour of the appellant.”

On the whole, in his lead judgment, Justice Okoro said: “Having resolved the only issue adopted for the determination of this appeal in favour of the appellant, I hold that this appeal is meritorious and hereby is allowed. The judgment of the Court of Appeal, which upheld the decision of the trial court is hereby set aside.  Accordingly, the judgment of the trial court is also set aside.  I make no order as to costs.”


Leave a Reply

Your email address will not be published. Required fields are marked *