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UNITED BANK FOR AFRICA LTD. v. TEJUMOLA & SONS LTD.

(1988) JELR 33202 (SC)

Supreme Court  •  SC.31/1987  •  27 May 1988  •  Nigeria

Coram
ANDREWS OTUTU OBASEKI JSC; AUGUSTINE NNAMANI JSC; ADOLPHUS GODWIN KARIBI-WHYTE JSC; ABDUL GANIYU OLATUNJI AGBAJE JSC; PHILLIP NNAEMEKA-AGU JSC;

Judgement

A. G. O. AGBAJE, JSC (Delivering the Leading judgment): The Plaintiff Company, Tejumola and Sons Ltd., sued the Defendant Bank, United Bank for Africa Ltd. in a Lagos High Court claiming against it as per the indorsement on its Writ of Summons dated 3rd August, 1983 as follows:-

"The Plaintiff's claim against the Defendant is for the sum of ₦2,000,000.00 (Two million Naira) being special and general damages for the breach of contract entered into between the Plaintiff and the Defendant in or about April 1982 in Lagos, the breach having occurred also in Lagos in or about October, 1982."

Pleadings were ordered, filed and delivered. The case proceeded to trial before Ayorinde J. The contract alleged by the Plaintiff as existing between it and the Defendant Bank and in respect of which damages were being claimed by the Plaintiff from the Defendant for its breach by the latter was pleaded as follows in paragraphs 9, 10, 11 and 12 of the Plaintiff's Statement of Claim:-

"9. Thereafter, negotiations as regards the term of the proposed lease of the said property went on between the parties until April, 1982 when the Defendant by its letter dated 19th April, 1982 offered to rent the said property from the Plaintiff subject otherwise to the terms and conditions contained in the said letter for a term of 15 years, the Defendant reserving the right to break the said term at the end of the 5th and of the 10th years of the said term.

10. The rent offered was ₦215 per sq. meter (or ₦20 per sq. ft.) per annum payable 5 years in advance subject to a revision every 5 years.

11. The area of the property agreed to be rented by the Defendant was "Portion of the ground floor (i.e. 900 sq. ft.) and all the four upper floors (i.e. 1,108sq. ft. each) comprising a total floor area of approximately 493,036 sq. metres (5,322 sq. ft.).

12. The Plaintiff by its letter dated 19th April, 1982 accepted the Defendant's offer without any reservations."

The property to which the alleged contract relates admittedly belongs to the Plaintiff and it is situate at No. 42, Idumagbo Avenue, Lagos, otherwise known as No. 3 Docemo Street, Lagos. The Plaintiff pleaded the negotiations which led up to the contract which according to it was entered into between it and the Defendant Bank. After the contract had been concluded, as pleaded by the Plaintiff, the Plaintiff pleaded in paragraph 13 of its Statement of Claim as follows:-

"13. Thereafter, the Defendant started to give directives to the Plaintiff as to how the Plaintiff should alter the said property to suit the peculiar needs of the Defendant as a banking business office."

The particulars of the alterations to the said property which the Plaintiff carried out pursuant to the directives of the Defendant in this regard, according to the Plaintiff, were pleaded with adequate particularities in the Plaintiff's Statement of Claim.

The Defence of the Defendant Bank to the claim by the Plaintiff Company against it was concise and precise and it was contained in paragraphs 5, 6 and 7 of its Statement of Defence which read thus:-

"5. The Defendant admits that it entered into negotiation with the Plaintiff for the grant of a lease of the premises referred to in the Statement of Claim herein, and that the initial rent and the length of the term had been agreed as alleged. But the negotiations were never completed and in particular the Defendant's letter dated 19th April, 1982 pleaded in paragraph 9 of the Statement of Claim was clearly written "SUBJECT TO CONTRACT."

6. The agreement referred to in the Statement of Claim did not fix the date of commencement of the proposed lease with the certainty required by law.

7. The Defendant will rely upon the provisions of Section 5 of the Law Reform (Contracts) Law Cap. 66 Revised Laws of Lagos State."

As I have said before, the case proceeded to trial before Ayorinde J. The Plaintiff led evidence, mainly documentary, in support of the various averments in its' Statement of Claim. The Defendant called no evidence. In short the Defendant tested its case on .he evidence adduced by the Plaintiff.

The letter dated 19th April, 1982 from the Defendant which the Plaintiff pleaded as constituting the offer from the Defendant to the Plaintiff to rent the property in question is Exh. E. in these proceedings. The relevant portions of Exh. E for the purposes of the appeal in hand are as follows:-

"OUR REF: PROP/PM/82 19th April, 1982.

Tejumola and Sons Limited,

15, Okoya Street,

P. O. Box 3253,

LAGOS.

SUBJECT TO CONTRACT

Dear Sirs,

3, DOCEMO STREET AND 42 IDUMAGBO AVENUE LAGOS

We refer to your previous correspondence and the discussion of your Mr. E.T. Ajiboye with us concerning the above property. Subject to your showing evidence of good title we hereby offer to take a sub-lease of your above property on the following main terms and conditions:-

PREMISES

Portion of the ground floor (i.e. 900 sq. ft.) and all the four upper floors (i.e. 1,108 sq. ft. each) comprising a total floor area of approximately 495.36 sq. metres (5,332 sq. ft.)

TERM

15 years from the date physical possession of the property is given to us, subject to the Bank reserving the right to break at the end of the 5th and 10th years of the term.

RENT

₦215 per sq. metre (or ₦20 per sq. ft.) per annum payable 5 years in advance from the date physical possession of the property is given to us and upon our being satisfied with the search of the Lands Registry as regards the genuineness of your title to the property.

RENT REVISION

Every five years of the term subject to the usual arbitration clause.

TENANTS COVENANTS

(Not relevant)...

LANDLORDS COVENANTS

(Not relevant) ... If the above main terms and conditions are acceptable to you, please confirm. (Italics mine) Yours faithfully,

pp: UNITED BANK FOR AFRICA LIMITED

(Sgd) J. A. Dosunmu

Property Manager."

The acceptance of the offer contained in Exh. E by the Plaintiff, according to the latter, is by Exh. F which reads thus:-

"15 Okoya Street, Lagos.

P.O. Box 3253,

Tel. 631687, 658075

19th April, 1982

The Property Manager,

United Bank for Africa Limited,

Broad Street,

Lagos.

Dear Sir,

Reference to your letter PROP/PM/82 dated 19th April, 1982. The contents were carefully noticed. Our Company has carefully consent and confirmed the Tenants Covenants and Landlord's Covenants. We accepted your offer for the premises portion of the ground floor (i.e. 900 sq. ft.) and all the four upper floors (i.e.1,108 sq. ft. each) comprising a total floor area of approximately 495.36 square metres (5,332 sq. ft.), and also to the subject of Terms reserved by the Bank right.

Our Company also agreed the rentage of ₦215 per square metre (₦20.00 per square foot) per annum payable in 5 years advance from the date physical possession at the property. In view of our 4 (four) months wasted on this property, we request you to take the physical possession on 1st May, 1982, and we expect your check for advance payment of 5 years as soon as possible.

We shall be looking forward for your immediate comments as soon as possible.

Thank you.

Yours faithfully,

TEJUMOLA and SONS LTD.

(Sgd)

Chairman."

(Italics mine).

The other documents put in evidence by the Plaintiff Company are Exhibits G, H, K, L, M, N, O, P, Q, R, S, T, T1, U, Y, W, X, Y, Z, Z2, AA, BB, CC, CC1, DD, DD1, Exh. 1, Exh. 2, Exh. 3, Exh. 4, Exh. 5, Exh. 6, Exh.7.

However, as regards the appeal in hand reference need only be made to the following out of these exhibits. First: Exhibit G which says as follows:-

"UBA UNITED BANK FOR AFRICA LIMITED

HEAD OFFICE: 97/105 Broad Street,

P.O. Box 2406, Lagos

18th May, 1982

OUR REF: PROP/AGMP/82

Chairman/Director,

Tejumola and Sons Limited,

15, Okoya Street,

LAGOS.

Dear Sir,

3 DOCEMO STREET/42 IDUMAGBO AVENUE, LAGOS

There will be a site meeting on Friday, 21st May, 1982 at 10.00 a.m. to agree the external area which should be in the exclusive possession of the Bank. Please ensure you are present, and be prepared to endorse sketch plans which will reflect any agreement reached on the spot.

We would also inspect and ensure that all the main services i.e. mains water, mains electricity, plumbing system, and sewage disposal facilities are in good working condition. The locations of our generators and strong-room and other similar items will be discussed and agreed with you.

Please confirm that you will attend the meeting.

Yours faithfully,

pp: UNITED BANK FOR AFRICA LIMITED

(Sgd) A. G. Sangosanya."

(Italics mine)

Second: Exh. H which says as follows:-

HEAD OFFICE

15 Okoya Street, Lagos.

P.O. Box 52057,

Tel. 631687, 658075

24th May, 1982.

Mr. A.O. Okoro,

United Bank for Africa,

(Property Department).

4th Floor,

Broad Street,

Lagos.

Dear Sir,

Thanks for your co-operation for the meeting we held together about housing inspection to locate the ground floor area for Bank use. Already I have separated the wall between Docemo and Idumagbo Avenue, and I've block the corner piece of backyard according to the plan you draw for site.

I have demolished the small store with open space for generator plant for electrical engineer design, and the electrical engineer come here this morning and see everything. I am waiting for the ground floor Drawing Sketch you drawn for signature, and our Company authorised you to start any adjustment you need both internal and external from ground floor to fourth floor, and request from your engineer is this I've got report from our Electrical Contractor. I have submitted the letter and copy of collection fees.

Thank you.

Yours faithfully,

(Sgd)

Chairman"

(Italics mine).

Third: Exhibit J which says as follows:-

UBA UNITED BANK FOR AFRICA LIMITED

HEAD OFFICE: 97/105, Broad Street,

P.O. Box 2406, Lagos.

OUR REF. PROP/ABS/1246/82 10th June, 1982

Tejumola and Sons Limited,

15, Okoya Street,

P. O. Box 3253,

Lagos.

Dear Sirs,

3, Docemo Street and 42 Idumagbo Avenue, Lagos

We have been informed that the suitability of the above property could be in doubt as it was understood that it once collapsed during construction.

We have therefore contacted a reputable firm of Structural Engineers who are charging ₦6,000.00 (Six thousand naira only) to inspect and confirm the suitability of the property. Attached is a photostat copy of their letter requesting for the above. Kindly let us have your cheque in the same amount by return.

We regret that it will not be possible to progress the transaction any further until the structural Engineers confirm that the building is structurally sound for our type of business.

(Italics mine)

Yours faithfully,

pp: UNITED BANK FOR AFRICA LIMITED

(Sgd) A. G. Sangosanya (Sgd) A. O. Okoro

Asst. General Manager Building Surveyor"

Fourth: Exhibit L which says as follows:-

PROP/ABS/1246/82 11th June, 82

Mr. A. G. Sangosanya,

Assistant General Manager,

United Bank for Africa,

Lagos.

Dear Sirs,

3, Docemo Street and 42, Idumagbo Avenue, Lagos

Referred you to your letter PROP/ABS/1246/82 dated 10th June 1982, which the contents were carefully noticed.

...We hope that this our Engineer's reports and confirmation of the Lagos State Development Town Planning will convince your satisfaction on the building suitability.

Looking forward to hear more of your comments as early as possible.

Thanks for your co-operation in this regards.

Yours sincerely,

TEJUMOLA and SONS LTD.

(Sgd)

DIRECTOR"

Both the Engineer's report and the document from the Lagos State Development Town Planning referred to in Exh. L confirm it that the property in question in this case is structurally safe for the use to which the Defendant Bank wanted to make of it. The Engineer's report is Exh. M.

It will appear from Exhs. N, O, P, Q, R, S, T, T1, that the Defendant Bank was not quite satisfied with the Engineer's report in Exh. M and that at the request of the Defendant Bank another firm of Engineers named by the Defendant Bank inspected the property in question in conjunction with the Plaintiff's Engineers with a view to assessing the suitability of the premises for the Defendant's business. The Plaintiff paid for the costs of the inspection. In the end the new firm of Engineers Messrs Ove Arup and Partners by Exh. T of 28th September, 1982 agreed with Exh. M that the building in question was safe to carry loads peculiar to a Banking Institution. In other words, the new Engineers agreed that the building in question was safe for the business of the Defendant Bank.

In reinforcement of the opinion in Exh. T there is Exh. T1 of 13th September, 1982 from Folad Engineers addressed to Messrs Ove Arup and Partners endorsing the latter's opinion in Exh. T.

After all these assurances from the Plaintiff to the Defendant as to the structural soundness of the property in question and after the Plaintiff at the request of the Defendant had carried out structural alterations to the property at some considerable cost the Defendant Bank wrote Exh. U of 8th October, 1982 to the Plaintiff. Exh. U reads thus:-

HEAD OFFICE: 97/105 Broad Street,

P.O. BOX 2406, Lagos.

Our Ref: PROP/PM/2124/82 8th October, 1982

Tejumola and Sons Limited,

15 Okoya Thomas Street,

Lagos.

Dear Sirs,

42, Idumagbo A venue, Lagos

This is to inform you that the members of the Management of this Bank will inspect your above property at 2.30 p.m. on Monday 11th October, 1982.

Kindly arrange for your representative to open all the doors and windows of the property to them on that day.

Yours faithfully,

pp: UNITED BANK FOR AFRICA LIMITED

(Sgd) J. A. Dosumu

Property Manager"

According to the oral evidence in this case the property was inspected on the day indicated in Exh. U. All the officers of the Bank who were present at the inspection were satisfied with what they saw there. It was after this inspection that the Defendant Bank wrote Exh. v. to the Plaintiff calling off everything connected with the property in question. Exh. v. reads thus:-

"Our Ref: PROP/PM/2275/82 28th October, 1982

Tejumola and Sons Limited,

15, Okoya Street,

Lagos.

Dear Sir.

RE: 3 DOCEMO STREET/42 IDUMAGBO AVENUE LAGOS

We refer to our previous correspondence concerning our requirements for your above property. After giving this matter considerable thought, we regret to inform you that we are no longer interested in taking a lease of your above property.

We however thank you for offering the lease of the property to us and hope to be able to do business with you in future.

Yours faithfully,

pp: UNITED BANK FOR AFRICA LIMITED

(Sgd) J. A. Dosumu

Property Manager."

All the documents, subsequent in point of time to Exh. U, put in evidence in this case establish (i) allegation by the Plaintiff charging the Defendant Bank with breach of contract and claim for damages by the Plaintiff from the Defendant for the resultant breach; (ii) attempt by the Defendant Bank to seek without admitting liability a negotiated settlement of the alleged breach of contract; and (iii) losses incurred by the Plaintiff as a result of the alleged breach. These documents strictly speaking bear little or no relevance to the issue arising for consideration in this case. So I need not say anything more about them.

The learned trial Judge Ayorinde J in his judgment dated 23/11/84 held as follows as regards Exhs. E and F:-

Exhibit 'E' speaks of the date when physical possession is given but Exhibit 'F' says physical possession is given from 1/51/82. It is my considered view that the contract was to begin on 1/5/82 which was the date fixed by the Plaintiff. The Defendant did not rebut this averment. I find it is the true date of commencement of the contract. The contention of the Defendant is untenable."

Consequent upon this finding the learned trial Judge rejected the contention for the Defendant Bank that the negotiations between the parties in this case in respect of the property in question have not crystallized into a contract in that the date of the commencement of the proposed lease has not been agreed. The learned trial Judge then found for the Plaintiff having rejected the other contentions by the Defendant. Eventually judgment was entered for the Plaintiff against the Defendant for ₦732,200.00 as special and general damages for breach of contract, the latter being ₦200,000.

The Defendant Bank appealed against this decision to the Court of Appeal Lagos Division. In that court the Defendant Bank took the point that the negotiations between the parties in this case had not crystallized into a contract, because the date of the commencement of the proposed lease had not been agreed and that the trial court was wrong in holding that that was not so and that 1st May, 1982 was the date of the commencement of the lease. This contention was again rejected by the Court of Appeal. In the lead judgment of the Court below by Ademola, JCA, to which Mohammed and Kutigi JJCA agreed, the learned Justice of Appeal was of the opinion that in coming to a decision on the point at issue one must not look at Exhs. E and F alone but at all the documents that passed between the parties including Exhs. E and F. Having examined Exhs. E, F, G, H, K, Q, R, he made the following finding:-

From these series of correspondence that I have examined, I cannot see in them where the date of 1st May is the date wherein the Appellant took physical possession as being in doubt. I am inclined to think that all these activities will be regarded by the parties as preparatory to the signing of a formal lease pending the payment of rent due under the agreement.

The Appellant for reasons best known to him, but which is pretty obviously his letter of 8th September Exhibit 5 decided to have cold feet over an already concluded matter and the final breach between parties in October should have been a foregone conclusion to a discerning person."

In the end the contention for the Defendant Bank was rejected. However, the Court of Appeal allowed the appeal of the Defendant on the issue of damages, in that the award for general damages was set aside. The Defendant Bank not being satisfied with the decision of the Court of Appeal has now appealed from it to this court.

Briefs of Arguments were filed on both sides. Both sides agreed that the only question for determination in this case is as follows:-

"Whether on the pleadings and the evidence before the court the finding that there was an agreement that the lease shall commence on 1.5.82 can be sustained."

So, it is not necessary to refer again to the grounds of appeal in this case.

In this judgment the Appellant will hereinafter be referred to as the Defendant and the Respondent as the Plaintiff and the property the subject matter of the proposed lease as the property.

I have stated the evidence, mainly documentary, in this case and I have also referred to the relevant portions of the Statement of Claim and of the Statement of Defence. It now behoves me to state the law on the point at issue.

The case of Harvey v. Pratt (1965) 1 W.L.R. 1025 relied upon by counsel for the Defendant, Chief F.R.A. Williams, S.A.N. establishes it that for a valid agreement for a lease to exist the parties and the property, the length of the term, the rent and the date of commencement must be defined. The case of Marshall v. Berridge 19 Ch. D. 233 at 238-239 and 244-245 again cited to us by counsel for the Defendant decides it that it is essential to the validity of a lease that it shall appear either in express terms or by reference to some writing which would make it certain or by reasonable inference from the language used on what day the term is to commence, and a contract for a lease to satisfy the statute of fraud must contain this element.

On these two authorities it can be said that it is settled law that an essential term of an agreement for a lease is the day of the commencement of the term to be created by the lease.

In the instant case, as I have shown above, the alleged agreement for a lease is not in one particular note or memorandum formally signed by the parties to this case. The court has been asked to find a contract in a series of correspondence between the parties. In a situation like this it has been held in Hussey v. Horne-Payne 1978-794 APP. CAS 311 that the court must take into consideration the whole of that which has passed between the parties in coming to a decision on the point in question.

Nesham v. Selby (1872) 7 Ch. App. 406 decides it that as long as a necessary term of an agreement for a lease has not been agreed to the matter rests in negotiation and there is no concluded contract. The point must also not be lost sight of that an agreement for a lease is an ordinary contract and in accordance with the general principles of contract law it will not be binding on the parties until their minds are at one both upon matters which are cardinal to every agreement for a lease and also upon matters that are part of the particular bargain. See for instance Rossite v. Miller (1878) 3 APP CAS 1124 at 1139.

On the authorities as I have just stated them, the question for determination in this case is whether it can be said on the evidence in this case that 1st May, 1982, the day said by the Plaintiff to be the commencement of the proposed lease, which no doubt is an essential term of an agreement for the lease, has been agreed to by the parties to this case.

The trial court held in the passage from its judgment which I have copied earlier on in this judgment that 1.5.82 was the commencement date of the agreement for the lease because Exh. F written by the Defendant to the Plaintiff said "physical possession is given from 1.5.82" and that the Defendant did not rebut this averment. It will appear that the trial court came to this decision as to the commencement date on the consideration of Exhibits E and F, in this case and there is no indication that it considered the other correspondence between the parties on the issue of the commencement date of the agreement for the proposed lease.

As I have shown earlier on in this judgment the Court of Appeal, the lower court, agreed with the learned trial Judge as to 1st May 1982 being the day of the commencement of the proposed lease. In coming to its decision the Court of Appeal considered all the relevant correspondence that passed between the parties on the point including Exhibits E and F. On the authority of Hussey v. Horne-Payne (supra) this is the correct approach to the point at issue. The lower court concluded as I have shown above as follows:-

"From these series of correspondence that I have examined, I cannot see in them where the date of 1st May as the date wherein the Appellant took physical possession as being in doubt."

Neither the trial court nor the lower court, the Court of Appeal, made a definite finding that the Defendant agreed to 1.5.82 stated in Exh. F, the Plaintiffs letter to the Defendant, as the commencement date of the proposed lease. The trial court said the Defendant did not rebut the averment. The Court of Appeal, the lower court for its part said that there was no doubt that 1.5.82 was the date of the commencement of the proposed lease. It did not say positively that the Defendant agreed to this date.

I have said above that Nesham v. Helby (Supra) is authority for the proposition that the date of the commencement of an agreement for a lease must be agreed to by the parties. It will be illustrative in this regard to state the facts of that case which are as follows:-

"The Plaintiff, in a bill for specific performance of an agreement to take a lease of a house, alleged and produced evidence of a verbal agreement which was denied by the Defendant. In order to take the case out of the Statute of Frauds, the Plaintiff relied on a letter written by the Defendant, in which the Defendant agreed to take the house for seven years on certain terms, but in which the day of the commencement of the lease was not mentioned; and on another letter from the Defendant mentioning the day of commencement, and adding terms to which the Plaintiff did not agree.

In that case Sir W.M. James, L.J. held as follows:

"In this case the Plaintiff has filed a bill on an agreement evidenced by letters. It is admitted that the first letter does not contain all the terms of the alleged agreement. The omitted term is said to be evidenced by a second letter. But that letter shows that the understanding of the Defendant as to the agreement was different from that of the Plaintiff. Then the whole thing is broken off before the Plaintiff has bound himself to anything, and the Plaintiff was never placed in any difficulty by the agreement being broken off. I think that the Court has gone quite far enough in decreeing specific performance upon letters as constituting agreements, where one side is bound and the other not."

The Plaintiff in the case failed because there was no evidence that he agreed to the date of the commencement of the proposed lease as suggested in the Defendant's letter upon which he relied.

So what I have to do now is to find out if on the whole of the correspondence that has passed between the parties in this case and which are relevant to the point at issue and which I have copied above it can be said or inferred that the Defendant agreed to 1.5.82 which is the date of the commencement of the lease as stated in Exh. F, a letter from the Plaintiff to the Defendant.

What the Plaintiff Company said in Exh. F as to the commencement date of the proposed lease is as follows:-

"We request you to take the physical possession on 1st May, 1982."

All the correspondence which passed between the parties showed without doubt that the Defendant never at any time took possession of the property the subject matter of the proposed lease.

At this junction I must pause to consider the case of Brilliant v. Michaels (1945) 1 All E.R. 121 at 127 to 128 where Evershed J. held as follows:-

"My opinion, therefore, is that a contract for a lease is enforceable notwithstanding that the commencement of the term may be expressed by reference to the happening of a contingency which is at the time uncertain provided that at the time that the contract is sought to be enforced, the event has occurred and the contingency has happened."

Counsel for the Plaintiff relied heavily on this case.

Exh. E from the Defendant says the term of the proposed lease will commence from the date physical possession is given to the Appellant bank. To that extent it may be said that the commencement of the term has been expressed by reference to the happening of a contingency namely giving of physical possession to the Defendant bank. But that event has not occurred before the Defendant called off everything. So the contingency by reference to which the day of the commencement of the lease could have been ascertained did not happen. This being so, the case of Brilliant v. Michael (Supra) is not in point here, in my judgment.

I will therefore continue with the consideration of the point as to whether the Defendant has agreed to 1-5-82 as the date of the commencement of the proposed lease. Exh. F of 19.4.82 from the Plaintiff requested the Defendant to take possession on 1st May, 1982. By Exh. G of 18th May, 1982, subsequent no doubt to Exh. F, the Defendant wrote the Plaintiff saying there would be a sight meeting on Friday 21st May, 1982 at 10 a.m. to agree the external areas which should be in the exclusive possession of the Defendant. It will appear the sight inspection was carried out as demanded in Exh. G. Then there is Exh. H from the Plaintiff to the Defendant, describing the inspection as one to locate the ground floor for the Defendant's use and also containing steps taken hy the Plaintiff Company to prepare the floor area for that purpose. Then again there is Exh. J. of 10th June, 1982 from the Defendant to the Plaintiff saying, it would not be possible to progress with the transaction any further until the Structural Engineers confirmed that the property, the subject matter of the proposed lease, was structurally sound for the type of business the Defendant wanted to transact in it. There is equally no doubt that by Exhs. L, M, Q, T and T1 the Plaintiff produced confirmation from the Structural Engineers to the Defendant as to the structural soundness of the property for the banking business of the Defendant. To this end the Plaintiff incurred considerable expenses. The response of the Defendant to all what the Plaintiff Company has done was Exh. v. wherein the Defendant called off everything up to that time.

The indications from the analysis I have made of the correspondence which passed between the Defendant and the Plaintiff after Exh. F was written are that the Defendant never at any time expressly agreed to 1.5.82 as the date of the commencement of the proposed lease. And I have said earlier on in this judgment that the Defendant never at any time took possession of the property.

Counsel for the Plaintiff, Mrs. P.C. Ajayi-Obe made the point both in the Plaintiff's brief of argument and in oral submissions to us that the Defendant is estopped from saying that there is no concluded agreement in this case. She said in other words that the Defendant was estopped from saying that 1.5.82 was not the day of the commencement of the proposed lease agreed to by both sides. She said the Defendant was estopped because of the expenses incurred by the Plaintiff at the instance of the Defendant in restructuring the property the subject-matter of the proposed lease in order to make it suitable for the banking business of the Defendant. As I have said there is no doubt that the Plaintiff carried out the restructuring at a considerable cost and at the instance of the Defendant. But the point still remains whether all what the Plaintiff did was done at the time when negotiations were in progress or at a stage after a concluded agreement for a lease had been reached.

Counsel for the Plaintiff as I have said, submitted to us that the Defendant bank was estopped for the reasons I have just mentioned. She did not mention the species of estoppel she had in mind. What however readily comes to mind when dealing with a matter of this nature is what Denning J, as he then was, said, in Central London Property Trust Ltd. v. High Trees House Ltd. (1947) 1 K.B. 130 at 134 which is as follows:-

"With regard to estoppel, the representation made in relation to reducing the rent, was not a representation of an existing fact. It was a representation, in effect, as to the future, namely, that payment of the rent would not be enforced at the full rate but only at the reduced rate. Such a representation would not give rise to an estoppel, because, as was said in Jorden v. Money (1), a representation as to the future must be embodied as a contract or be nothing. But what is the position in view of developments in the law in recent years? The law has not been standing still since Jorden v. Money (1). There has been a series of decisions over the last fifty years which, although they are said to be cases of estoppel are not really such. They are cases in which a promise was made which was intended to create legal relations and which, to the knowledge of the person making the promise, was going to be acted on by the person to whom it was made and which was in fact so acted on. In such cases the courts have said that the promise must be honoured. The cases to which I particularly desire to refer are: Fenner v. Blake (2) In re Wickham (3), Re William Porter and Co. Ltd. (4) and Buttery v. Pickard (5). As I have said they are not cases of estoppel in the strict sense. They are really promises, promises intended to be binding, intended to be acted on, and in fact acted on." This has come to be known as promissory estoppel.

The mere fact that the Defendant asked for some things to be done to the property the subject matter of the proposed lease and those things were carried out would not mean that there is a concluded agreement for a lease in the absence of an agreed commencement date of the term of the proposed lease which is an essential term of a lease. The fact I have just referred to will only be relevant in the instant case if Counsel for the Plaintiff can thereby show that the Defendant has by its conduct which must be evidenced in writing, See Marshall v. Berridge (Supra) agreed to the commencement date of 1.5.82 in the Plaintiff's letter Exh. F. Unless this can be done it cannot be said that the request by the Defendant for the work carried out by the Plaintiff on the property the subject matter of the proposed lease made 1.5.82 the date of the commencement of the proposed lease agreed to by both sides.

I cannot find anything in the requests made by the Defendant for alterations to the property the subject matter of the proposed lease suggesting that the Defendant expressly or by reasonable inference agreed to 1.5.82 as the date of the commencement of the proposed lease.

This is all the more so when the requests came after 1-5-82 and at a time when, at least from the point of view of the Defendant, (1) the external area of the property which would be in its exclusive possession had not been agreed upon and (2) the structural soundness of the property for the business of the Defendant was in doubt.

I cannot therefore find any basis for the application in this case of the type of estoppel in the High Trees Case (Supra) or for that matter any other type of estoppel in reaching a decision as to whether the Defendant agreed to 1st May 1982 as the commencement date of the proposed lease.

Both sides placed reliance on the case of Shell B.P. Petroleum Development Co. Ltd. v. Jammal Engineering Nigeria Ltd. (1974) 1 All N.L.R. Part 1 at 542. The following passages from the judgment of the Supreme Court in the case by Coker JSC under-scored the points I have made in this judgment that in the absence of an agreed commencement date of a lease there can be no concluded contract for a lease. The passages are as follows:-

Page 557: "Manifestly, the letter Exhibit C touched upon the important consideration of the commencement date or dates of the lease or leases of the several houses."

Page 558: "The learned trial Judge evidently considered the various attempts to fix commencement dates by the parties (i.e. by Exhibit E dated the 18th September, 1968, Exhibit K dated the 31st October, 1968, Exhibit L dated the 7th November, 1968 and Exhibit N dated the 29th November, 1968 and Exhibit N dated the 16th December, 1968)."

Page 558: "In the words of the learned trial Judge himself, the position was described as follows:-

"That these new dates proposed by the Defendants were accepted by the Plaintiffs are not in doubt."

Page 570: "The learned trial Judge took the view that at that point of time the parties were in agreement over the granting of lease; by the Defendants to the Plaintiffs of a number of houses in the Jammal Estate. We think this is clearly so."

In the instant case I cannot find any evidence of an agreed commencement date of the term of the proposed lease. I will deal briefly with the point as to the effect of Section 5 of the Law Reform Contract Law Cap. 66 Laws of Lagos State which provide as follows namely:-

"No contract to which this section applies shall be enforceable by action unless the contract or some memorandum or note in respect thereof is in writing and is signed by the party to be charged therewith or by some other person lawfully authorised by him."

on the evidence adduced in this case on the point at issue, that is the commencement date of the term of the proposed lease.

In this regard I need only to refer to the case of Bristol, Cardiff and Swansea Aerated Bread Company v. Maggs (1890) 44 Ch. D 616 which deals with the provisions Statute of Frauds (which are in pari materia with Section 5 of the Law quoted above) viz a viz the point as to whether there is a concluded agreement for a lease. I refer to page 622 of the report where Kay J. said as follows after reviewing the authorities on the point:-

"The real truth is that the statute was not meant to affect contracts in any way, but only the evidence of them. It does not provide that a memorandum duly signed shall be contract, but only that no contract concerning land shall be proved by any lower evidence than such a written memorandum. The question whether the two letters relied on in this case were a complete contract, or were only steps in a negotiation, is altogether independent of the Statute of Frauds."

I have held that on the evidence in this case there is no agreement as to 1.5.82 being the date of the commencement of the proposed lease. If there had been such evidence then there would have been the need to find out if the evidence satisfied the requirements of Section 5 of the Law Reform Contract Law.

In sum I must hold that there is no concluded contract in this case and I must uphold the contention of Counsel for the Defendant that the transactions in the matter now before us on appeal were only steps in negotiations between the parties to this appeal.

In conclusion I hold that both the trial court and the Court of Appeal were wrong in holding that 1-5-82 was the agreed date of the commencement for the proposed lease. In the result, the Plaintiffs appeal is allowed. The judgment of the trial court and that of the Court of Appeal are hereby set aside by me. In their place I enter judgment for the Defendant dismissing the Plaintiffs case against it, with costs assessed at ₦500.00 to the Defendant.

It is unfortunate that the Plaintiff in conducting negotiations in a matter involving such a heavy sum of money as indicated by the evidence in this case acted without the assistance of a lawyer. It will appear that the Plaintiff at all stages of the negotiations for the lease with which we are concerned in this appeal acted for it sell. It is doubtful that it ever sought, let alone obtained, the advice of a legal practitioner in the matter. Perhaps if it had done the latter, it would have been warned of the risk of meeting demand after demand from the Defendant in the absence of a concluded agreement for a lease. It turned out that the Plaintiff unwittingly took this risk which eventually materialised, as this judgment has shown, with the Plaintiff incurring losses for which the Defendant cannot be made legally liable. The stage at which the negotiations for an agreement for a lease had reached in this case raised high hopes in the Plaintiff that a concluded agreement would finally be arrived at. That one was not reached is not because of any default on the part of the Plaintiff. In fact it was when all of the objections raised by the Defendant had been disposed of by the Plaintiff at some considerable cost that the Defendant called off the negotiations. The law says the Defendant can do so with impunity. But I do not think it will be too much to expect if the Defendant having regard to all the circumstances of this case decided to absorb ex gratia some of the losses which the Plaintiff had undoubtedly suffered in the transactions.

A. O. OBASEKI, JSC: This is an example of hard cases which make bad law. The Appellant offered to take the property of the Respondent on a lease for a term of 15 years to commence on the date possession is given to the Appellant. This offer was made subject to contract. The Respondent suggested the 1st May, 1982 as the date physical possession would be given and requested the Respondent to be ready to take physical possession on that date. There were several amendments to be made to the buildings to suit the business purpose of the Appellant. The Respondents faithfully carried out the amendments suggested by the Appellant at heavy cost to itself. These were not concluded till well and long after the 1st of May, 1982. Indeed, representatives of both parties had a site meeting on the 18th of May, 1982 to agree on the exclusive area to be granted in the proposed lease and other amendments to the building to satisfy the requirements of the Appellant. The Appellant finally complained about structural suitability and required confirmation that there were no structural defects in the buildings. The Respondent provided this confirmation at enormous costs for it paid the fees of the engineers who carried out the inspection. After receiving the confirmation required, instead of taking physical possession, the Appellant called off the whole negotiation. When the Respondent claimed damages, it was met by the plea that the commencement date for the lease not having been agreed, there was no concluded contract.

It is well to point out that while it is well to take refuge under sections 5 of the Law Reform Contracts Law Cap. 66 Laws of Lagos State which is similar in terms to the Statute of Frauds in England, the law was meant to be a shield against frauds and not to be an instrument of frauds.

It becomes necessary to amend our laws to meet situations created by these hard cases. Banks which involve landlords in heavy expenses to put their property to the standard requested by the bank must not be allowed to escape liability for damages by clever maneuvering of the law. However, the court is not the legislature. Its duty is to interpret the law and apply it to facts in the administration of justice. It does not over step its bound and trespass upon the sacred province of the legislature. It is the province of the legislature to enact laws and amend or repeal laws. The court can only draw attention to areas of the law where amendment is required or desirable.

I have heard my learned brother, Agbaje JSC deliver his judgment in this case. I had the advantage of reading it in draft before now. I agree with all the opinions so lucidly articulated and I adopt them as my own.

Reluctantly, I must say I hereby allow the appeal with ₦500.00 costs to the Appellant and enter a judgment of dismissal of all the Respondent's claims. In view of the importance of the issues raised, I would add the following comments.

The sole question for determination was whether it can be said from the evidence before the Court in the case that the 1st day of May, 1982 was agreed upon by both parties as the day the proposed term of the lease of 15 years was to commence. The facts were fully stated in the judgment of my earned brother and from the documentary and oral evidence adduced in the case, no reasonable tribunal can come to a decision that 1st day of May, 1982 was agreed on by the parties. The deciding factor was the taking of physical possession by the Appellant and it must not be overlooked that the letter Exhibit E where "the taking of physical possession" was proposed as the commencement date for the lease" was made subject to contract. The request of the Respondent that the Appellant take possession, physical possession on the 1st day of May, 1982 was an offer to give physical possession on that date which could only be accepted by the taking up of possession. Unfortunately, the property was not ready for occupation on that date.

It is settled by authorities that where a contract is subject to the happening of a contingency that contract only becomes enforceable provided the event has occurred or the contingency has happened. Where a date for the commencement of a lease is not specified but stated by reference to the happening of a contingency which is uncertain in time until the contingency happens there is no enforceable lease. See Brilliant v. Michaels (1944) 1 All E.R. 121 at 127-128. This is because the time of the contingency being uncertain there is no agreement as to time of commencement. See Shell BP Petroleum Development Co. Ltd. v. Jammal Engineering Nigeria Ltd. (1974) 1 All N.L.R. (Pt. 1) 542, 557, 558 and 570 per Coker, JSC.

The most important aspect of the case, I think, is the fact that the offer in Exhibit E written by the Appellants wherein the offer to take a lease of the property was made, was made "subject to contract." The lower court seems to have overlooked this aspect of the correspondence between the parties. Exhibit E, in part reads:

"Our Ref: PROP/PM/82 19th April, 1982

Tejumola and Sons Limited,

15 Okoya Street,

P.O. Box 3253,

Lagos.

Subject to Contract

Dear Sirs,

3 Docemo Street and 42 Idumagbo Avenue, Lagos

We refer to your previous correspondence and the discussion of your Mr. E.T. Ajiboye with us concerning the above property, subject to your showing evidence of good title, we hereby offer to take a sub-lease of your property on the following main conditions:

Premises - (not relevant) Term 15-years from the date physical possession of the property is given to us subject to the bank reserving the right to break at the end of the 5th and 10th years of the term.

Rent - Not relevant.

Rent Revision - Not relevant

Tenant's Covenant - (Not relevant)

Landlord's Covenant - (Not relevant)

If the above main terms and conditions are acceptable to you, please confirm.

Yours faithfully,

pp: United Bank for Africa Limited

Sgd. J. A. Dosunmu

Property Manager."

The Respondent accepted the offer by letter Exhibit F. The letter inter alia reads:

19th April, 1982

The Property Manager,

United Bank for Africa Ltd.,

Broad Street, Lagos.

Dear Sir,

Reference to your letter PROP/PM/82 dated 19th April, 1982. The contents were carefully noticed. Our company has carefully consent and confirmed the Tenants covenants and Landlord's covenant...

Our company also agreed the rentage of ₦215 per annum payable in 5 years advance from the date physical possession of the property. In due of our 4 (four months wasted time on this property, we requested you to take physical possession on 1st May, 1982 and we expect your check for advance payment of 5 years as soon as possible.

We shall be looking forward to your immediate comments as soon as possible.

Thank you.

Yours faithfully,

Tejumola and Sons

Sgd .

Chairman

What then does "subject to contract" mean? In my view, it means that until a formal contract is drawn up and executed everything is in the negotiation stage. Judicial authorities support this construction. See Winn v. Bull (1877) 7 Ch. D. 29 per Jessel M.R. at p. 32, Rossdale v. Denny (1921) 1 Ch. 57 CA. per Lord Stendale MR at pp. 66,67, Chillingworth v. Esche (1924) 1 Ch. 97 CA. per Pollock MR at pp. 103-105.

In Coope v. Ridout (1921) 1 Ch. 291 CA., Warrington, U. said at p.297:

"What is the true construction of the words 'subject to contract' in the Plaintiffs' offer? I think the offer means that it is an offer to purchase subject to the preparation and execution of a formal contract. If it is attempted to give that offer any other meaning, that meaning must be either, 'subject to this offer being accepted, which is absurd, or 'subject to the parties coming to terms on certain details not yet mentioned'. In the latter case, it would merely amount to an agreement to enter into a future agreement which would confer no rights on any of the parties to it."

In Keppel v. Wheeler (1927) 1 KB 577 C.A. Bankes, L.J. at p. 584 had this to say on the matter:

"I pause here to state plainly what is now well established, that where a person accepts an offer subject to contract, it means that the matter remains in negotiation until a formal contract is settled and formal contracts are exchanged."

Finally, on this matter of the meaning of 'subject to contract', I will refer to the dictum of Maugham, L. J. in Trollope (George) and Sons v. Martyn Brothers (1934) 2 KB 436 CA at 455, there the learned Lord Justice said:

"It has been well settled that the result of an offer 'subject to contract' means that the matter remains in negotiation until a formal contract is executed, that is if the contract is recorded in two parts until the formal contracts are exchanged...Taught by experience in these courts it is every day practice for intending purchasers of property who are making an offer to make their offer in the form of 'subject to contract' with the result that they are not at any time bound and have a locus poenetentiae until the formal contracts are exchanged."

There can therefore be no question of the negotiations between the parties having been concluded before the Appellant called it off.

For the above reasons and the reasons set out in the judgment of my learned brother, Agbaje, JSC, I hereby allow the appeal, set aside the decisions of the Court of Appeal and the High Court and enter a judgment dismissing the claims of the Plaintiffs/Respondents. The Appellant shall have cost in this appeal fixed at ₦500.00.

A. NNAMANI, JSC: I had a preview of the judgment delivered by my learned brother, AGBAJE, JSC and I agree with his reasoning and conclusions.

There is no doubt that long negotiations were held between the Appellant and Respondent with respect to the Appellant taking a lease of the Respondent's premises situate at 42 Idumagbo Avenue, Lagos otherwise known as 3 Docemo Street, Lagos. From the printed record, it seems that the parties agreed on all the terms of the proposed lease except the date of commencement of the lease. The High Court and the Court of Appeal, after wading through the myriads of documentary evidence - Exhibits A, B, C, D, E, F, G, H, J, L, v. etc. - held that there was indeed agreement on the date of commencement, and that the agreed date was 1/5/82. The Appellant then appealed to this Court.

The bone of contention in this Court was, therefore, whether those two Courts were right in holding that there was any such agreement. For my purpose, the two documents that are vital for determining this issue are Exhibits E and F. There were in these terms:

"Exhibit E

United Bank for Africa Ltd.

Head Office 97/105, Broad Street,

P.O. Box 2406,

Lagos.

19th April, 1982

Our Ref: Prop/PM/82 19th April, 1982

Tejumola and Sons Ltd.,

15, Okoya Street,

P.O. Box 3253,

Lagos.

SUBJECT TO CONTRACT

Dear Sirs,

3 DOCEMO STREET AND 42 IDUMAGBO AVENUE, LAGOS

We refer to your previous correspondence and the discussion of your Mr. E.T. Ajiboye with us concerning the above property. Subject to your showing evidence of good title we hereby offer to take a Sub-lease of your above property on the following main terms and conditions:-

PREMISES

Portion of the ground floor...(5,332 sq. ft)

TERM

15 years from the date physical possession of the property is given to us subject to the Bank reserving the right to break at the end of the 5th and 10th years of the term.

RENT

₦215 per sq. metre...to the property.

RENT REVISION

Every five years of the term subject to the usual arbitration clause.

TENANTS COVENANTS ...

LANDLORD'S COVENANTS...

If the above main terms and conditions are acceptable to you, please confirm.

Yours faithfully,

pp: UNITED BANK FOR AFRICA LTD.

(Sgd.) J. A. Dosunmu

Property Manager."

(Italics mine)

In a letter dated the same 19th April, 1982, Exhibit F, the Respondent accepted those main terms. I shall set down only the relevant portion dealing with taking of possession which has relevance to when the lease was to commence. That portion read, "Read Our Company also agreed the rentage of ₦215 per square metre (20.00 per square foot) per annum payable in 3 years advance from the date physical possession at the property. In due (sic) of our 4 (four) months wasted on this property, we requested you to take physical possession on 1st May, 1982 and we expect your cheque for advance payment of 15 years as soon as possible..." (Italics mine)

As it was, therefore, while the Appellant put the date of commencement on the date physical possession of the property is given to them, the Respondent in accepting the proposed terms, requested the Appellant to take physical possession on 1/5/82. There was no express reply by the Appellant to this invitation, and it was on this that the learned trial Judge held that the date 1st May, 1982 had been agreed on by the two parties. With all respect, I prefer the approach of the Court of Appeal which was to look at the whole documentary evidence to see whether such agreement could be implied from the conduct of the parties.

Having done the same exercise, I cannot come to the same conclusions as they did. The Appellant never replied to the request that possession be taken on 1st May, 1982. Worse still is the inevitable conclusion that one must draw from what happened after 19th April, 1982. The next response to the invitation to take possession was the Appellant's letter dated 18th May, Exhibit G in which the Appellant requested a site meeting with Respondent on 21st May, 1982 "to agree on the external areas which should be in the exclusive possession of the Bank". It requested the Respondent to "be prepared to endorse sketch plans which will reflect any agreement reached on the spot". The Respondent attended that meeting and on 24th May, 1982, Exhibit H, wrote to confirm what actions he had taken following their agreement at the site. After going through all the documentary evidence, I cannot hold that there had been any agreement as to the date the term of lease was to commence, nor can I say that the Appellant had taken possession. The impression one goes away with after reading those documents, is one of continuing negotiations and adjustments of the premises. I cannot therefore imply any agreement on the issue of date of commencement. It is not being disputed that there can be no enforceable contract of lease in the absence of agreement on the date of commencement of the agreed term. As Lord Denning put it in Harvey v. Pratt (1965) 1 W.L.R. 1025 at 1027 "It is settled beyond question that in order for there to be a valid agreement for a lease, the essentials are not only for the parties to be determined, the property to be determined, the length of the term and the rent, but also the date of commencement. This document does not contain it. It is not sufficient to say you can supply it by an implied term as to reasonable time." See Marshall v. Berridge (1881) 19 Ch. D. 233 C.A. and Edwards v. Jones (1921) 124 L.T. 740. This suit has caused me anxious moments. If I had the slightest feeling that this was one of those technicalities against which this Court has resolutely set its face, I would have dismissed this appeal. But alas the law seems clear to me. There is no doubt that the Appellant led the Respondent up a very expensive garden path only to throw it away. But it is a path on which the most unwisely jumped. If only it had retained the services of counsel, it would have become so clear that it was essential to have an enforceable agreement before it embarked on the very expensive alterations it made at Appellant's request. The Respondent's anxiety to let these premises probably got the better part of even its layman's judgment. I join my learned brother in hoping that the Appellant can be persuaded to reduce the Respondent's losses to a tolerable level. Those alterations made at its request may not suit any other tenant.

For these reasons, and the fuller reasons in the lead judgment, I too would allow this appeal. The appeal is accordingly allowed. I abide by all the orders made by AGBAJE, JSC including the order for costs.

A. G. KARIBI-WHYTE, JSC: I have had the privilege of reading the judgment of my learned brother A.G.O. Agbaje, JSC just delivered. I agree entirely that this appeal should be dismissed. The facts of the case have been lucidly and fully dealt with in the judgment of my learned brother Agbaje JSC. I adopt the facts so stated.

The issue for determination in this appeal has been very clearly formulated in his brief by Chief F.R.A. Williams S.A.N., learned counsel for the Appellant. Kehinde Sofola S.A.N. for the Respondent agrees with the formulation. It reads thus:

"Whether on the pleadings and the evidence before the Court, the finding that there was an agreement that the lease shall commence on 1.5.82 can be sustained."

Both counsel adopted their briefs of argument and made oral elaborations where necessary.

The difference of opinion between the parties arises from the consideration whether the parties agreed that the commencement date for the lease subject matter of the negotiation was to be on the 1.5.82. There is only one ground of appeal which I do not consider necessary to reproduce. The issue for determination as formulated being sufficient.

Both parties relied on Exhibits E letter from the Appellant making an offer as to the terms on which the lease of the property will be taken; and Exhibit F, the acceptance by the Respondent of the terms in Exhibit E. For ease of reference I reproduce Exhibits E and F.

EXH. E.

"HEAD OFFICE: 97/105, Broad Street,

P.O. Box 2406, Lagos.

Our Ref. PROP/PM/82 19th April, 1982

Tejumola and Sons Limited,

15, Okoya Street,

P.O. Box 3253,

Lagos.

SUBJECT TO CONTRACT

Dear Sirs,

3 DOCEMO STREET AND 42 IDUMAGBO AVENUE, LAGOS

We refer to your previous correspondence and the discussion of your Mr. E. T. Ajiboye with us concerning the above property. Subject to your showing evidence of good title we hereby offer to take a sub-lease of your above property on the following main terms and condition:-

PREMISES

Portion of the ground floor (i.e. 900 sq. ft.) and all the four upper floors (i.e. 1,108 sq. ft. each) comprising a total floor area of approximately 495.36 sq. metres (5,332 sq. ft.)

TERM

15 years from the date physical possession of the property is given to us subject to the Bank reserving the right to break at the end of the 5th and 10th years of the term.

RENT

₦215 per sq. metre (or ₦20 per sq. ft.) per annum payable 5 years in advance from the date physical possession of the property is given to us and upon our being satisfied with the search of the Lands Registry as regards the genuineness of your title to this property.

RENT REVISION

Every five years of the term subject to the usual arbitration clause.

TENANTS COVENANTS

(a) To pay a share calculated on pro rata basis (i.e. ratio of the floor area occupied to the whole) of all township and water rates levied now or in the future on the entire property and stated in a separate Rate Assessment to be prepared by the Local Government.

(b) To pay for all electricity consumed on the demised premises.

(c) To maintain the interior of the demised premises in good repair and condition (fair, wear and tear excepted) and to decorate the interior of the demised premises at the termination or expiration of the term of the lease.

(d) To pay the costs involved in Legal fees for the preparation, stamping and registration of the documents in evidence of this transaction.

(e) Not to assign or sublet without the consent of the Landlord such consent not to be unreasonably withheld in the case of a responsible Company or person.

(f) To arrange at its expense for the cleaning of the demised premises.

(g) To affix signs relating to banking business to the exterior and interior of the premises provided they conform with the aesthetic standard of the building.

(h) To provide all internal partitions required at its expense.

LANDLORDS COVENANTS

(i) To insure the demised premises against loss or damage by fire, tornado, windstorm and earthquake and to pay the development charges (if any) that may be levied by the Lagos State Government or any body duly authorised by it in respect of the premises.

(ii) To keep the demised premises structurally sound, wind and watertight and the exterior' and all drains and boundary walls and fences (if any) thereof in good and tenantable repair and condition and the exterior in a reasonable state of decorative repair.

(iii) To arrange for a separate rating assessment of the demised premises for township and water rate to be levied by the Local Government in charge of the area in which the property is located.

(iv) To arrange for the installation of separate electric meter to the demised premises.

(v) To allow the tenant to make reasonable structural alterations to suit the purpose (i.e. banking business) for which the premises is demised.

(vi) To provide all essential services (i.e. water, electricity) to the demised premises.

(vii) To give the tenant peaceful and quiet enjoyment.

(viii) To ensure free and uninterrupted access to the demised premises.

(ix) To pay the ground rent and comply with the covenants reserved in the Head lease.

(x) To ensure that the portion of the ground floor not included in the demised premises is not used or occupied for purposes inimical to the tenant, its business, staff and customers.

If the above main terms and conditions are acceptable to you, please confirm.

Yours faithfully,

pp: UNITED BANK FOR AFRICA LTD.

(Sgd.) J. A. Dosunmu

Property Manager."

"Exhibit F - LD/891/83 - By Plaintiff

Tejumola and Sons Ltd. v. U.B.A. Limited

TEJUMOLA and SONS LTD.

Registered in Nigeria

Importers, Exporters, General Merchants, Commission Agents and Manufacturers Representatives.

HEAD OFFICE

15 Okoya Street, Lagos,

P.O. Box 3253 B

Tel. 631687, 658075

19th April, 1982

The Property Manager,

United Bank for Africa Limited,

Broad Street,

Lagos.

Dear Sir,

Reference to your letter PROP/PM/82 dated 19th April, 1982. The contents were carefully noticed. Our Company has carefully consent and confirmed the Tenants Covenants and Landlord's covenants. We accepted your offer for the premises portion of the ground floor (i.e. 900 sq. ft) and all the four upper floors (i.e. 1,108 sq. ft. each) comprising a total floor area of approximately 495.36 square metres (5,332 sq. ft.), and also to the subject of Terms reserved by the Bank right.

Rent: Our Company also agreed the rentage of ₦215 per square metre (₦20.00 per square foot) per annum payable in 5 years advance from the date physical possession at the property.

In due of our 4 (four) months wasted on this property, we requested you to take the physical possession on 1st May, 1982, and we expect your cheque for advance payment of 5 years as soon as possible.

We shall be looking forward for your immediate comments as

soon as possible.

Thank you.

Yours faithfully,

TEJUMOLA and SONS LTD.

(Sgd)

Chairman"

Whereas Appellant contended that Exhibit E though containing many of the terms of the lease being negotiated, still did not provide for a commencement date. This was because it provided that the lease shall commence on the date physical possession was given to the Appellant.

Respondents contended that Exh. F, clearly stated that physical possession was given to the Appellant on the 1st May, 1982 and this has to be regarded as the date of commencement of the lease. It was submitted that all the renovations and alterations made to the property i.e. 42 Idumagbo Avenue, Lagos, otherwise known as 3 Docemo Street, Lagos after the 1st May, 1982 were made for and on behalf of the Appellant who were the lessees. It was submitted that as from May 1, 1982 there was a concluded contract to lease the property and that Appellants were bound by the contract and consequently liable for the damages suffered by Appellant's repudiation of the contract. It is pertinent to mention that Appellant although filed a Statement of Defence did not call any evidence, oral or written, at the trial. They relied on the evidence of the Respondents. They admitted that they finally repudiated the negotiation, but denied that there was, at that stage, any concluded agreement between the parties. In support of this view and of the fact that they were still in the process of negotiation and May 1, 1982 was never agreed as the date for commencement of the lease. Appellants relied on Exh. G written to the Respondents after May 1, 1982, Exh. H written by Respondents after the site inspection. Exhibits G and H are reproduced below-

"Exhibit G - LD/891183 - By Plaintiff

Tejumola and Sons Ltd. v. U.B.A. Ltd.

USA UNITED BANK FOR AFRICA LIMITED

HEAD OFFICE: 97/105, Broad Street,

P.O. Box 2406, Lagos

OUR REF: PROP/AGMP/82 18th May, 1982

Chairman/Director,

Tejumola and Sons Limited,

15 Okoya Street,

Lagos.

Dear Sir,

3 DOCEMO STREET/42 IDUMAGBO AVENUE, LAGOS

There will be a site meeting on Friday 21st May, 1982 at 10.00 a.m. to agree the external areas which should be in the exclusive possession of the Bank. Please ensure you arc present, and be prepared to endorse sketch plans which will reflect any agreement reached on the spot.

We would also inspect and ensure that all the main services i.e. mains water, mains electricity, plumbing system, and sewage disposal facilities are in good working condition. The locations of our generators and strong room and other similar items will be discussed and agreed with you.

Please confirm that you will attend the meeting.

Yours faithfully,

pp: UNITED BANK FOR AFRICA LIMITED

(Sgd) A. G. Sangosanya"

"Exhibit H - LD/891/83 - By Plaintiff

Tejumola and Sons Ltd. v. U.B.A. Ltd.

TEJUMOLA and SONS LTD.

Registered in Nigeria

Importers, Exporters, General Merchants, Commission Agents and Manufacturers Representatives.

HEAD OFFICE

15 Okoya Street, Lagos

P. O. Box 52057

Tel. 631687,658075

24th May, 1982.

Mr. A.O. Okoro,

United Bank for Africa,

(Property Department),

4th Floor,

Broad Street,

Lagos.

Dear Sir,

Thanks for your co-operation for the meeting we held together about housing inspection to locate the ground floor area for Bank use. Already I have separated the wall between Docemo and Idumagbo Avenue, and I've block the corner piece of backyard according to the plan you draw for site. I have demolished the small store with open space for generator plant for electrical engineer design, and the electrical engineer come here this morning and see everything. I am waiting for the ground floor Drawing Sketch you drawn for signature, and our Company authorised you to start any adjustment you need both internal and external from ground floor to fourth floor, and request from your engineer is this I've got report from our Electrical Contractor. I have submitted the letter and copy of collection fees.

Thank you.

Yours faithfully,

(Sgd)

Chairman ...

Respondents went into further expenses in trying to meet the criticisms of the Appellants by making alterations to the building in respect of the structural soundness of the building, suitability of the building for banking business. Nevertheless Appellants on the 28th October, 1982 wrote Exh. V, repudiating the continuance with the negotiation which reads

"Exhibit v. - LD/891/83 - By Plaintiff

Tejumola and Sons Ltd. v. U.B.A. Ltd.

UBA UNITED BANK FOR AFRICA LIMITED

HEAD OFFICE: 97/105 Broad Street,

P.O. Box 2406, Lagos

Our Ref: PROP/PM/2275/82 28th October, 1982

Tejumola and Sons Limited,

15 Okoya Street,

Lagos.

28th October, 1982

Dear Sir,

RE: 3 DOCEMO STREET/42 IDUMAGBO AVENUE, LAGOS

We refer to our previous correspondence concerning our requirements for your above property. After giving this matter considerable thought, we regret to inform you that we are no longer interested in taking a lease of your above property.

We, however thank you for offering the lease of the property to us and hope to be able to do business with you in future.

Yours faithfully,

pp: UNITED BANK FOR AFRICA LTD.

(Sgd) J. A. Dosumu

Property Manager."

Hence Respondents action, claiming damages as per the writ of summons.

It is important to bear in mind that the facts of this case are based on a negotiation for a Lease. The parties here have relied on Exh. E and F already reproduced as containing the terms of the negotiation. It is well settled that the contract, memorandum or note admitted as expressing the terms of a contract, must state all the material terms of the contract. The court will not regard such a document as expressing the contract when material terms are missing and cannot be determined by interpretation or implication of law - See Stimson v. Gray (1929) 1 Ch. 629. It is essential for the memorandum relied upon to have the names of the lessor and lessee - See Williams v. Jordan (1877) 6 Ch. D. 517; Skelton v. Cole (1857) 1 De G and 1.587, the description of the property - Kennedy v. Lee (1817) 3 Mer. 441, and the term and its commencement with certainty - See Marshall v. Berridge (1881) 19 Ch. D.233; Harvey v. Pratt (1965) 1 WLR 1025. The time of commencement must either be certain or capable of being certain before the lease takes effect. - See Lace v. Chandler (1944) KB 368 at p. 370. Mrs. Ajayi-Obe has submitted that Exhs. E and F constitute the contract, and when read together the date physical possession was offered Appellant being May 1 1982 will constitute the commencement date.

It seems to me that this is not an answer to the contention by Appellants that physical possession was not given on that day as negotiations were still in progress. This is supported by Exh. 1 with respect to the site inspection after May 1, 1982 and subsequent alterations to the property Exh. L. Mrs. Ajayi-Obe would want it to be accepted by necessary implication and inference that Appellants accepted possession as from May 1, 1982. The evidence relied upon for the drawing of such inference was not sufficient. Mrs. Ajayi Obe's contention was that Appellants did not reject the suggestion of May 1, 1982 in Exh. F, and are therefore to be taken to have accepted that date. This is too simplistic a view of the contrary conduct of the Appellant by fixing a site meeting after May 1, 1982 in Exh. J which was accepted by the Respondent without pointing out the significance of that date.

It is now well settled and has been so accepted since 1881, when Lush J agreed with Jessel MR in Marshall v. Berridge (1881) 19 Ch. D.233 and said at p.244-245.

"Now it is essential to the validity of a lease that it shall appear either in express terms or by reference to some writing which would make it certain, or from the language used, on what day the term is to commence. There must be a certain beginning and a certain ending, otherwise it is not a perfect lease, and a contract for a lease must, in order to satisfy the statute of Frauds, contain those elements."

This view was followed in Harvey v. Pratt (supra). The rationale of the principle is that the parties must themselves define the subject matter of their bargain, and a term of years can only be defined by indicating the beginning and the end. The period of 15 years is indicated as the term, not the commencement. It is acceptable where a lease is provided to commence on the happening of a condition, as in Brilliant v. Michaels (1945) All E.R. 121, Lace v. Chandler (supra). This is permissible even if oral, if at the time of enforcement it is in writing-

See Rawlinson v. Ames (1925) Ch. 96. It is important to remember that an agreement to enter into a lease is governed by the ordinary principles of the law of contract. A contract is only binding on the parties when they are ad idem as to matters which are cardinal to the agreement and part of the bargain as a whole - See Rossiter v. Miller (1878) 3 App. Cas. 1124 at p. 1139. If one infers from Exhibits E and F and the suggestion that the commencement date was to he on the date physical possession is given to Appellant, it is obvious that Appellant called off the negotiation before the happening of the condition, and Brilliant v. Michaels (supra) relied upon is not of any assistance. It has been submitted that this court should not lightly interfere with concurrent findings of facts by the courts below about May, 1982 as the date of commencement of the lease agreed by the parties. I think the finding in this case falls within the well settled exceptions where there is no basis for the finding of fact of the courts below and the finding is clearly not supported by the evidence - See Lengbe v. Imale (1959) LLR. 95; Shell BP v. Pere Cole and Ors. (1978) 3 SC. 183. I hold therefore that the courts below were in error in accepting May 1, 1982 as the date of commencement of the proposed lease. Since there was no commencement date in the transactions leading to the proposed agreement for a lease the transactions did not crystallise into a contract. It is clear on the evidence that the parties have not defined the subject matter of their bargain having not defined the beginning and the end of the lease - See Harvey v. Pratt (supra). There is no lease capable of satisfying the provisions of section 5, Law Reform (Contracts) Law, Cap. 66 of Lagos State which is similar to section 4 of the Statute of Frauds 1677. See also Marshall v. Berridge (supra) at p. 244-245.

I agree entirely with the submission of Chief Williams S.A.N., that the transactions relied upon were only steps in negotiations between the parties to this appeal. There was no concluded contract. For the reasons I have given above and for the much fuller reasons given by my learned brother A.G.O. Agbaje JSC, I will allow this appeal with costs assessed at ₦500 to the Appellant.

P. NNAEMEKA-AGU, JSC: The straight issue for decision in this appeal is whether the negotiation for the Appellants to lease the premises of the Respondents for purposes of their business crystallized into an agreement for a lease. The Appellants hoisted their case on the contention that there was no agreement as to the date of commencement of the lease.

My learned brother, Agbaje, JSC, has fully set out the facts that led to the case as well as a number of documents admitted in evidence which are relevant to the issue before the Court. I do not intend to repeat them here. It is enough for me to mention that the learned trial Judge, Ayorinde, J., found from the evidence before him that the parties agreed that the lease would commence on the 1st of May, 1982. He based that inference substantially upon the contents of Exhs. E and F. The Court of Appeal per Ademola, JCA, Mohammed and Kutigi, JJCA, concurring, agreed with him. The question, therefore is whether their Lordships of the Court of Appeal were right. Much as I do not intend, as I have stated to set out the facts in any detail, I deem it necessary to advert to material aspects of the contents of Exhibits E and F, if only to put the facts in their correct perspective. In Exh. E, a letter dated 19th April, 1982, which was written by the Appellants themselves and marked "subject to contract" they spelt out the premises, term, rent, rent revision, and tenants in relation to the property. There is strictly no dispute in this appeal as to any of these, except the "Term" which read:

"15 years from the date physical possession is given to us, subject to the Bank reserving the right to break at the end of the 5th and 10th years of the term."

The terms in Exh. E were accepted by a letter, Exh. F, dated 19th April, 1982, and signed by the Chairman of the Respondent company. The relevant portion of Exh. F runs thus:

"Our Company also agreed the rentage of ₦215 per square metre (₦20.00 per square foot) per annum payable in 5 years advance from the date physical possession at the property. In due (sic) of our 4 (four) months wasted on this property, we requested (sic) you to take physical possession on 1st May, 1982, and we expect your cheque for advance payment of 5 years as soon as possible.

We shall he looking forward for your immediate comments as soon as possible."

(Italics mine)

I may observe that Exh. F did not just accept the portion of Exh. E quoted above which would have left the matter as at the date the Appellants took physical possession. If it did, the contract would have crystallized upon the happening of the contingency, that is upon the Appellants taking physical possession of the premises. Where a contract document instead of naming a specific commencement date for a contract rather hangs it upon the happening of a contingency, a valid contract crystallizes when that nominated, even if uncertain, contingency happens. This is the result of all the decided cases on the point, including: Bishop of Bath's Case (1605) 6 Co. Rep. 346; Phelan and Tedcastle (1884) 31 L.J. Ch. 44; Marshall v. Berridge (1881) 19 Ch. D. 233; and Mauray v. Durley Chine (Investments) Ltd. (1953) 2 All E.R. 458.

But, for one reason, this principle is not strictly decisive of this appeal. For the Respondents had gone ahead to nominate a date for the Appellants' taking physical possession. The suggestion therefore becomes: did the parties agree on this date, id est, 1st May, 1982? As far as this particular term of the contract went, it was more than a mere acceptance of the term offered in Exh. E, that is a mere offer of taking physical possession on a date which was open and unspecified. An acceptance is a final and unqualified expression of assent to the terms of an offer, as made by the offeror. This is trite. Where in the attempt to accept an offer the offeree varies the terms of the offer or, as in the instant case, introduces an entirely new term, it is not an acceptance and cannot result in a contract crystallizing: See Jackson v. Turquand (1869) L.R. 4 H.L. 305; Jones v. Daniel (1894) 2 Ch. 332. It is a counter-offer which is not only not an acceptance of the offer but amounts to a rejection of the original offer, with the result that even if that original offer is subsequently accepted, its acceptance does not result in a contract between the parties: See Hyde v. Wrench (1840) 3 Beav. 334. In the instant case, the moment the Respondents rather than accepting that particular term in Exh. E, as offered, went ahead to offer a date for taking physical possession, it became a counter-offer which must be accepted before a contract based on it could be said to have crystallized between the parties. It is not correct that the date, 1st May, 1982, was ever accepted either expressly or by the conduct of both parties or of the Appellant as the agreed date for taking possession of the premises. It was, in my view, a finding not based on any evidence before the court of trial or the Court of Appeal. So this Court ought not allow it to stand. The conduct of the parties on and after that date did not lend any support to the suggestion that negotiation had been concluded before that date. For a perusal of Exhs. G dated 18/5/82, dated 24/5/82, J dated 10/6/82, L dated 11/6/82 and so many other documents, shows affirmatively that after the 1st of May, 1982, such vital issues relating to the contract such as the external areas of the premises appurtenant to the contract, the ground floor area for the Appellants, and the structural stability and suitability of the buildings for banking purposes, were yet to be settled. It is not the case that the commencement date had been agreed and accepted, but that further correspondences and discussions went on between the parties. From the state of the facts, I agree with my learned brother, Agbaje, J.S.C., that the 1st of May, 1982, was never agreed as the commencement date of the contract. The effect of this is that there was neither a lease nor a binding agreement for a lease between the parties. Denning, L.J., in Harvey v. Pratt (1965) 2 All E.R. 786 put the position in law most succinctly where he stated at p. 788 thus:

"It is settled beyond question that, in order for there to be a valid agreement for a lease, the essentials are that there should be determined not only the parties, the property, the length of the term and the rent, but also the date of its commencement. This document does not contain it. It is not sufficient to say that it can be supplied by an implied term as to reasonable time."

All the massive documents in evidence in this case are clearly lacking in this essential. There is therefore no enforceable contract for a lease. The learned counsel for the Respondent has argued that "subject to contract" an Exh. E is a useless surplusage since, by Exh. F., the Appellant had accepted every condition stipulated in Exh. E. Reliance was placed on Nicolene Ltd v. Simmonds (1953) 1 All E.R. 822, and Richards Properties Ltd v. Corporation of Wardens of St. Saviour' Parish Southwark (1975) 3 All E.R. 416. This was the view of the Court of Appeal: their Lordships held that on the authority of Harvey v. Pratt (supra) all the essentials of a contract for a lease were present. If their Lordships were correct in this foundation of their conclusion I would readily have agreed with them on the premises that the parties had made an immediately binding agreement, which even would have made the words "subject to contract" a mere surplusage. For, no doubt, the general principle is that the function of courts is to interpret the agreement between the parties, and not to make one for them. In the exercise, the courts are ordinarily supposed to give effect to the words in the contract documents. On this general principle "subject to contract" normally means that the contract is incomplete and not binding until a formal contract has been settled, approved and exchanged by the parties: See: Eccles v. Bryant and Pollock (1948) Ch. 93; Coope v. Ridow (1921) 1 Ch. 291; Chillingworth v. Esehe (1924) 1 Ch. 97; Bennett, Walden and Co. v. Wood (1950) 2 All E.R. 134

But this general principle admits of one important exception in a transaction such as the instant if, from the tender or other documents exchanged by the parties, it could be said that the vendor's offer has been accepted by the purchaser: that is that all the essentials enumerated in Harvey v. Pratt (supra) have been agreed upon. In other words, that agreement has been reached as to the parties, the property, the length of the term, the rent, and the date of commencement. Once an agreement has been reached on all these, the addition of the term "subject to contract" becomes a cosmetic surplusage. See on this: Michael Richards Properties Ltd. v. St. Saviours (supra), Nicolene Ltd. v. Simmonds (supra), Storer v. Manchester City Council (1974) 3 All E.R. 824;

But the decisive and fatal feature in this case in view of what I have said above is that an essential of the agreement, that is the commencement date, had not been agreed to. This makes it impossible to apply the exception and say that an agreement was complete.

For this reason, I entirely agree with my learned brother, Agbaje, JSC, that the appeal succeeds in that the Plaintiff/Respondents did not prove their case.

I therefore allow the appeal and dismiss the Plaintiffs' case with the same orders as were made in the lead judgment. I do not see any basis for the unspecified estoppel raised by Mrs. Ajayi Obe before us. Neither in the pleadings nor in her brief did she supply any substratum for it. I need not say more about it.

There is one aspect of the ultimate suggestion made in the lead judgment on which I feel quite reluctant to go along with my learned brother. He suggested that, in view of the enormous expenses which the Respondents ran at the request of the Appellants, counsel on both sides should put their heads together to see how justice could be done to them. I cannot agree to this without pointing out that the Respondents were the architects of their own misfortune. With all the clear story which the quality and language of their correspondences tell, they still elected to act for themselves, for a transaction which could have been worth several millions of naira. It was only after they had ruined their case that it dawned on them that they should brief an experienced counsel, for the court case. This is a height of indiscretion. Yet, it is said that the quality of mercy is not strained. It is only on this ground that I associate myself with the suggestion that counsel should agree on what compensation should be paid to the Respondents for the expenses they ran at the request of the Appellants, in spite of the fact that there was no binding contract between the parties.

Appeal Allowed.

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