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A fundamentally defective process cannot be regularized or cured by amendment (2)


Mahmud Mohammed

Mahmud Mohammed

Therefore, neither the court nor the parties at that stage can cure it, as the statement of defence and its attachment are dead on arrival and ought to be struck out. A fresh one to be filed (now out of time) would attract a leave for extension of time. Having utilized same to judgment.

I am afraid it affects the proceedings and therefore stands that there is no defence. Therefore the lower court wrongly based its judgment on same.

It has affected the judgment. A witness statement on oath cannot precede the statement of defence. This again cannot be an irregularity that can be waived. It is fundamental defect i.e. defect of 14/09/2007. The contention that parties did not object goes to no issue.

Parties cannot confer status on a dead process. See Okafor v. Nweke (2007) 10 NWLR (Pt. 1043) 521. On the part of the 3rd defendant, it is apparent that he derives this title to the property from the 1st defendant.

The implication is that having struck out the 1st defendant’s statement of defence, he has failed to establish his title to the property thereon.

Therefore, the title of the 3rd respondent in relation to the property cannot stand. I resolve this issue in favour of the appellant. Issue Two The appellant raised the issue of estoppel by conduct and referred to the locus classicus case of Iga v. Amakiri (1976) 11 SC 1 at 12 as well as section 151 of the Evidence Act, 2004.

He said that it is not in dispute that there was a compromise agreement dated 17/6/2003 (exhibit H2) and later exhibit H4 dated 22/06/2005 which extended payment to 30/6/2005 and also by another letter (exhibit H5) which extended further the period to the end of October 2005.

Appellant stated that in exhibit H5, there was no specific mention that the appellant would forfeit the benefit of redeeming the agreed sum after October 2005 but rather that “it might be constrained to take appropriate legal steps to recover our dues if by the end of October 2005 the balance of the judgment debt is not liquidated in full”.

“We kept paying money to them and they were collecting it even after the time stated in exhibit H2 has elapsed. Even when we visited the bank, it did not tell us that my property would be sold”.

Counsel further argued that this position was tacitly confirmed by the 1st respondent’s witness when she said at page 194 of the records, inter alia, that: “We kept on collecting payment towards the end of 2005 not because we decided not to enforce exhibit D”.

Counsel contended that clearly the 1st respondent, both expressly and by implication, led the appellants to believe that it would continue to observe and be bound by the compromise agreement; hence estoppel by conduct applies to this case. Counsel cited Olalekan v. Wema Bank Plc (2006) 13 NWLR (Pt. 998) 617. At this point we will have to consider the issue of “estoppel” and “waiver” raised.

In Silas Okoye Okonkwo & Ors. v. Chief Agogbua Kpajie & Ors. (1992) LPELR-2483 (SC); (1992) 2 NWLR (Pt. 226) 633 at p. 655 paras.

E-G, the Supreme Court stated what estoppel by conduct entails: “Where a man by word or conduct willfully made a representation of a state of facts to another thereby induced that other to believe that the state of things were as represented by that person and that other took him by his words and acted upon that representation, then that person who made the representation either by himself or his representative in interest cannot now turn around to say or behave as if the state of things were not as he represented them. He is estopped from asserting the contrary.

All that is required in such a case is that the facts to be relied upon as estoppel be duly pleaded or brought to the notice of the adjudicating tribunal in some appropriate.

Per Nnaemeka-Agu, J.S.C. p. 655, (paras. E-G) In the case of Attorney-General River State v. Attorney-General,Akwa Ibom State (2011) 8 NWLR (Pt. 1248) 31, the court noted that the doctrine of estoppel by conduct, though a common law principle has been enacted into our body of law as section 151 of the Evidence Act, 2004 (now section 169 of the Evidence Act, 2011).

The doctrine of estoppel by representation or by conduct is founded on the principle of fraud and it has five essential elements: (a) that there was a false representation or concealment of material fact; (b) that the representation must have been known to be false by the party making it or the party must have been negligent in not knowing its falsity; (c) it was believes to be true by the person to whom it was made; (d) that the party making the representation must have intended that it be acted on or the person acting on it must have been justified in assuming this intent; and (e) that the party asserting the estoppel acted on the representation in a way that will result in substantial prejudice unless the claim of estoppel succeeds …. Ibe v. Auta ( 1998) 2 NWLR (Pt. 538) 497; Baffa v. Odili (2001) 15 NWLR (Pt. 737) 709.” Per Abiru, J.C.A(Dissenting) (Pp.50-51, paras. C-F)

There was no response from the 1st respondent to this letter. Nowhere did the 1st respondent in their evidence deny the acceptance of the said sum or letter even after the date.

Having done this on two occasions, the 1st respondents by their conduct represented that they were still ready to accept the sum from the appellant even though the appellants had initially breached the terms of their compromise agreement.

More so, it is not on record that the 1st respondent returned the money paid back to the appellant after the sale, or even return the outstanding of the balance to the appellant after the sale of the property. More so, they did not notify the appellants of the intended sale, but gave the appellant the impression that they have not sold the property, only later to discover that the property had indeed been sold.

This to me amounted to estoppel by conduct and the 1st respondent is estopped from selling the property since they had by their own conduct given the appellants an impression that they are still willing to receive money from them.

They cannot just wake up one morning and just sell the property to a willing buyer. See Nigerian National Petroleum Corporation v. Mamman Aminu (supra).

This is in line with the provision of section 169 of the Evidence Act, 2011. On the whole, I am of the firm opinion that the law would not allow the 1st respondent to benefit from its own wrong in this case. See Ukaegbuv. Ugoji (1991) 6 NWLR (Pt.196) 127; On this ground I resolve this issue in favour of the appellant.

Issue Three The appellants submitted that although the mortgagee’s exercise of right of sale will not be questioned only on ground of undervalue sale, such a right would be vitiated where a case of mala fide is established against a mortgagee.

Counsel further contended there are facts showing the mala fide of the 1st respondent in relation to the sale of the appellant’s mortgaged property. He relied on the case of: West African Breweries Ltd. v. Savannah Ventures Ltd. (2002) 5 SC (Pt. 11) 84; (2002)

Apparently, the move to sell the mortgaged property has been set in motion after the order to attach was granted and during negotiation by parties; after the mortgagee had agreed to installmental payment. The order to attach the property lapsed and the 1st respondent had gone back to its option of selling by private treaty.

Having by conduct allowed the appellant to believe that it was not selling the property, it surreptitiously sold by private treaty under secrecy.

In Babatunde & Anor. v. Bank of North (2011) LPELR – 8249; (2011) 18 NWLR (Pt. 1279) 738 at pp. 762-763, the court held: “that though the complaint of undervalue alone is not enough to vitiate the exercise of a mortgagee’s power of sale but the court will always be on the lookout that mortgagee acts bona fide and observes reasonable precautions to obtain not the best price but a proper price.” See West African Breweries Ltd. v. Savannah Ventures Ltd. (2002) 10 NWLR (Pt. 775) 401.

In this case, what is the proper price in the circumstances? The purchaser stated that he paid initial deposit on 8th November 2005 and the last two installments on January and March 2006 meaning he paid In installments· Why was it that a purchaser of a mortgaged property would be allowed to pay in installments spanning about 6 months and the owner was not allowed to redeem her property considering the letter of 11th November 2005.

The 1st respondent certainly did not act in good faith most baffling in this regard is the fact that the respondent had chosen a method and now made a u-turn to go on another by private treaty. It is now glaring that the property was not sold as at 8th November only a deposit was made.

The respondent frustrated the redemption of the property even-though N2,000,000.00 in the savings account of the appellant was frozen by the 1st respondent. Equity leans in favour of the appellant in this regard.

On this ground I resolve this ground in favour of the appellants and set aside the counter-claim of the 3rd respondent. Issue Four The appellants contended that the facts of the existence of the judgment in suit no. ID/2566/2000 dated 17th July 2004 and the order to attach the property dated 9th January 2004 (exhibit E and H1 respectively) have raised the issue of waiver and due process.

Counsel submitted that this presupposes the 1st respondent elected to exercise its right against the appellants through the instrumentality of the court and secondly, to be bound to observe the procedure prescribed by law for exercising that choice of right it made. He further submitted that the authority of Olori Motors v. U.B.N. Plc (2006) 10 NWLR (Pt. 989) 586 is distinguishable from the facts of this case.

Counsel contended that upon obtaining the court order, the 1st respondent became bound to adhere strictly, to the procedure laid down by law for giving effect to the order as prescribed by Order III rule 6(2), (3), (4) (5) and (7) of the Judgment Enforcement Rules, made pursuant to the Sheriffs and Civil Procedure Law, Cap. S6, Law of Lagos State, 2003. In the circumstances, I am of the opinion that the scenario is different from the case of Olori Motors Ltd. v. U.B.N. (supra). Having chosen a particular line, he ought to finish same before embarking on the other option.

He had an elapsed order to sell, he needed another court order to validly sell the property after a demand, he cannot invoke the power of sale directly. Even in the light of the above reasoning, he had accepted payments and even after purported sale. The respondents are estopped from exercising the right of sale under the mortgage deed.

I resolve this issue against the respondent. On the whole, I resolve the four issues in favour of the appellants. The appeal is meritorious and judgment of Gbajabiamila, J. of the Lagos State High Court is hereby set aside in its entirety. Costs of N50,000.00 is awarded in favour of the appellant.

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