Whether The Court Can Award Damages Claimed in Alternative to Specific Performance for Breach of Contract for Sale of Property

CASE TITLE: ORIOKE V. ONAYEMI & ORS (2024) LPELR-61803(SC)
JUDGMENT DATE: 8TH MARCH, 2024
PRACTICE AREA: LAW OF CONTRACT
LEAD JUDGMENT: KUDIRAT MOTONMORI OLATOKUNBO KEKERE-EKUN, J.S.C.

SUMMARY OF JUDGMENT:

INTRODUCTION:
This appeal borders on awarding damages for breach of contract.

FACTS:
This is an appeal against the decision of the Court of Appeal, Ibadan, overturning the decision of the High Court of Oyo State, held at Ibadan.

The 3rd, 4th and 5th respondents inherited the property located at Oke-Bola, Ibadan, Oyo State, from their late father, Emmanuel Ajayi Ekunseitan, who died sometime in 1960. The 2nd respondent (1st defendant at the trial Court) is an estate agent who was commissioned by the 3rd, 4th and 5th respondents to find a buyer for the house. According to the 2nd respondent, the 1st respondent was interested in buying the house. After negotiations with the 3rd, 4th and 5th respondents, it was agreed that the purchase price would be N750,000.00, which the 1st respondent was to pay in two instalments.

The first installment of N500,000.00 was paid on 10/2/1995, while the balance was paid on 29/9/1995. In the case of 2nd respondent, when the first cheque for N500,000.00 was cashed, the money was shared between the 3rd, 4th and 5th respondents. However, while the 4th and 5th respondents collected their share, the 3rd respondent did not collect his but asked the 2nd respondent to keep it until the entire purchase price was paid. When the balance of N250,000.00 was received, the 2nd respondent notified the 3rd respondent who, at that stage, informed him that he was no longer interested in the transaction as he had found a buyer who had offered N800,000.00 for the property. He showed the 2nd respondent the cheque he had received from the new buyer, issued on October 3, 1995. He asked him to return the N750,000.00 to the 1st respondent. The buyer, who paid N800,000.00, was joined as the 6th defendant at the trial Court on April 26, 1998, and is the present appellant in this appeal.

The 1st respondent was unhappy with the state of affairs, having fulfilled his own part of the contract, without the property being released to him. It was contended that it was the 3rd respondent who refused to perfect the document. This was what prompted him to institute the action before the trial Court. The 1st respondent had filed a caution at the Ministry of Lands, Housing and Physical Planning, Oyo State against the grant of any statutory right of occupancy in respect of the disputed property. It was, however, contended that, in spite of the caution, a deed of assignment was executed between the 3rd respondent and the appellant and was duly registered at the Lands Registry in an attempt to render any decision of the Court nugatory. The doctrine of Lis pendens was pleaded.

It was the 3rd respondent’s contention that, as the head of the family and sole surviving administrator of their late father’s estate, he had the right to sell the property without the consent of the other members of the family.

At the conclusion of the trial and after considering the addresses of counsel, the learned trial Judge awarded N1 Million (One Million Naira) damages for breach of contract. The 1st respondent was dissatisfied with the judgment and appealed to the Court of Appeal. The appeal was allowed. The order made by the learned trial Judge awarding the appellant damages of N1,000,000.00 for breach of contract was hereby set aside. In its place, an order of specific performance against the 2nd respondent and his sisters was decreed to the appellant, hence this appeal to the Supreme Court.

ISSUE(S) FOR DETERMINATION:

The Court considered:

“Whether having declined to make an order of specific performance, it was proper for the learned trial Judge to have awarded the alternative relief of damages for breach of contract and whether the Court below was right to have set aside the award of damages.”

DECISION/HELD:
The appeal was allowed.

RATIOS:
• CONTRACT – SPECIFIC PERFORMANCE – Guiding principles on the grant of order of specific performance of contract
• JUDGMENT AND ORDER – SETTING ASIDE JUDGMENT/ORDER – Whether a judgment given on a wrong reason with a correct conclusion will be set aside
• CONTRACT – SPECIFIC PERFORMANCE – Rationale for including a claim for damages as an alternative to a claim for specific performance
• ACTION – ALTERNATIVE CLAIM(S)/RELIEF(S) – Nature and effect of alternative claim
• ACTION – ALTERNATIVE CLAIM(S)/RELIEF(S) – Instance where a trial court will be held to have rightly awarded damages claimed in alternative to specific performance for breach of contract for sale of property
• ACTION – ALTERNATIVE CLAIM(S)/RELIEF(S) – When the Court of Appeal will be held to have wrongly overturned the judgment of a trial Court granting the alternative remedy of damages in lieu of specific performance for breach of contract for sale of property
• EQUITABLE REMEDY – SPECIFIC PERFORMANCE – Nature of an order of specific performance and when same will be granted

To read the full judgment or similar judgments, subscribe to Prime or Primsol