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Rebold Industries Limited v. Mrs Olubukola Magreola & Ors (2015)

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⦿ CASE SUMMARY OF:

Rebold Industries Limited v. Mrs Olubukola Magreola & Ors (2015) – SC

by PaulPipar

⦿ PARTIES

APPELLANTS
1. REBOLD INDUSTRIES LIMITED

v.

1. MRS. OLUBUKOLA MAGREOLA
2. MISS. MOJISOLA MAGREOLA
3. MR. BABA JIDE MAGREOLA

⦿ CITATION

(2015) LPELR-24612(SC);

⦿ COURT

Supreme Court

⦿ LEAD JUDGEMENT DELIVERED BY:

John Inyang Okoro, J.S.C.

⦿ LAWYERS WHO ADVOCATED

FOR THE APPELLANT

– Dr. Wale Olawoyin

FOR THE RESPONDENT

– Jim A. Omoigberale Esq

⦿ FACT

Sometimes in 1995, the service of the Respondent as a firm of solicitors, were retained by the Mandilas Group Limited for the preparation and engrossment of a deed of sublease between the Mandilas Group Limited and Rebold Industries Limited (being the appellants herein).

The sublease was in respect of the property known and situate 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 14th day of May, 1997, the respondent took out a writ of summons endorsed with a statement of claim against the appellant for the recovery of the said fees incurred in the preparation and engrossment of the deed. The appellant having failed to respond to the summons of the respondent, a default judgment was entered for the respondent on the 19th of June, 1998.

On 26th day of November, 1998, the Appellant filed a motion before the Lagos State High Court challenging the jurisdiction of the said High Court on the ground that the respondent lacked the locus standi to have instituted the action in the first place. The High Court dismissed the motion in a ruling pronounced on the 21st day of February, 2000.

Available:  Wema Bank Plc v. Alhaji Idowu Fasasi Solarin Osilaru (2007)

Aggrieved by the said Ruling, the appellant filed an appeal at the Court of Appeal on 14th May, 2002. The Court below in its judgment 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 respondent’s fees.

Still dissatisfied with the judgment, the appellant has appealed to this court.

⦿ ISSUE

Whether the Lower Court was right in deciding that the Respondent has the locus standi to sue for the payment of his professional fees in respect of an agreement he prepared between Mandilas Group Limited and the Appellant to which he, (Respondent) is not a party?

⦿ HOLDING & RATIO DECIDENDI

The Supreme Court held in favour of the Appellant.

RATIO:

i. Put differently, only parties to a contract or an agreement can enforce it. A person who is not a party to it cannot do so even if the contract was made for his benefit as in this case.

ii. Even though it was the respondent herein who was engaged by Mandilas Group Ltd. to draft this sublease agreement, he was not a party to the agreement. Not being a party to the agreement, by the well established principle of privity of contract, the respondent had no locus standi to sue under the said agreement.

iii. There was therefore a feature in the suit which deprived the learned trial judge of the jurisdiction to entertain the matter. 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.

Available:  James Afolabi v. The State [2016]

⦿ REFERENCED

⦿ SOME PROVISIONS

Section 16 (1) of the Legal Practitioners Act Cap 207 Laws of the Federation, 1990:
“16(1) Subject to the provisions of this Act, a Legal Practitioner shall be entitled to recover his charges by action in any court of competent jurisdiction.
16(3). In any case in which a legal practitioner satisfies the court, on an application made either ex parte or if the court so directs after giving the prescribed notice –
(a) That he has delivered a bill of charges to a client and
(b) That on the face of it the charges appear to be proper in the circumstances; and
(c) That there are circumstances indicating that the client is about to do some act which would probably prevent or delay the payment to the practitioner of the charges, then, notwithstanding that the period mentioned in paragraphs (b) of subsection (2) of this section has not expired, the court may direct that the practitioner be authorized to bring and prosecute an action to recover the charges unless before judgment in the action the client gives such security for the payment of the charges as may be specified in the direction.”

Clause 2(t) of the sublease agreement provides that the appellant shall pay legal fees or charges of the Lessor’s solicitors. It state: “We, the Lessee for ourselves and our assigns and to the intent that the obligations shall continue throughout the term hereby created covenant with the Lessor as follows: (t) To pay the proper scale costs of the Lessor’s solicitors for the preparation, engrossment, stamp duty Registration and Professional fees in respect of this lease and the counterpart thereof.”

⦿ NOTABLE DICTA

Available:  Assad Sabbagh & Naman Sabbagh (Trading As Sabbagh Bros.) v. Bank Of West Africa Ltd. (1966) - SC

Every appeal or suit filed before a court of law is based and anchored on its peculiar facts and the reliefs sought are not made in vacuum but relate to and derive from the raw facts of the case. – John Inyang Okoro, J.S.C. Rebold Industries Limited v. Mrs Olubukola Magreola & Ors (2015)

Let me state for emphasis that only parties to a contract can maintain an action under the said contract. Even where a clause of the contract agreement is made for the benefit of a third party, the said third party cannot sue under the contract. – John Inyang Okoro, J.S.C. Rebold Industries Limited v. Mrs Olubukola Magreola & Ors (2015)

I cannot surmise why the court below decided to rely on the decision of that court in Shuwa v. Chad Basin Development Authority (1991) 7 NWLR (Pt. 205) 55 and tried to brush aside the clearly demonstrated stand of this court with respect to the principle of privity of contract. Let me say it quietly that the doctrine of judicial precedent otherwise referred to as stare decisis is well rooted in our jurisprudence. It ought to be strictly followed by all Lower Courts. There is sense in it to avoid confusion. – John Afolabi Fabiyi, J.S.C. Rebold Industries Limited v. Mrs Olubukola Magreola & Ors (2015)

Privity of contract is a common law doctrine. The law is that generally only a party to a contract can enforce it. A person who is not a party to it cannot enforce it even if the contract is made for his benefit and purports to give him the right to sue upon it, as he has not furnished consideration for it. – Kekere-Ekun, J.S.C. Rebold Industries Limited v. Mrs Olubukola Magreola & Ors (2015)

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