4/LAW REPORT
23.05.2017
Land Use Act: Foreigner Owning Land in Nigeria
I
Facts n 1975, the District Head of Kajuru in Kachia Local Government Area of Kaduna State, acting on the instruction of the Emir of Zaria, granted permission to the Appellant to build a temporary weekend hospitality resort on a hilltop in the Village. This was later converted to a permanent structure which he named “The Kajuru Castle”. In a bid to expand the business, the Appellant commenced negotiations through the agency of the District Head, for purchase of the land surrounding the hill. He was at the final stage of the negotiation when he was appointed the Managing Director of the Respondent in 1986. Being a German, the Appellant was advised to purchase the land in the name of the Respondent as it was unlawful for him to hold a legal estate in Kaduna State. The Appellant heeded the advice and the receipt evidencing the purchase was issued in his name and that of the Respondent. A certificate of occupancy and a subsequent statutory certificate of occupancy were issued in respect of the land in the name of the Respondent (Exhibits A1 and A3). When dispute arose over legal title to the property, the Appellant approached the High Court of Kaduna State, seeking inter-alia, a declaration that the Respondent holds the legal estate in the land at Kujuru, bought by him in the Respondent’s name, upon a resultant trust to his benefit and as such, the Respondent is obliged to comply with his instruction in respect of the transfer of the legal estate in the land. The Respondent joined issues with the Appellant, contending that he was not entitled to the reliefs claimed. After reviewing the issues and the applicable laws, the trial Court found that the Appellant failed to prove his claims and dismissed same. The appeal to the Court of Appeal was dismissed; the Appellant then appealed to the Supreme Court. Issue for Determination The Appellant and the Respondent formulated two issues each, for determination of the appeal. However, the Supreme Court, having read through the record of appeal and briefs of argument filed, distilled the lone issue below for the determination of the appeal: Whether the Court of Appeal was right when it dismissed the Appellant’s appeal for failure to adduce sufficient evidence in proof of his claim that the Respondent is holding the legal estate upon an implied trust in respect of the disputed property for his benefit by implication of law. Arguments In support of his case, learned Counsel for the Appellant, submitted that the evidence before the trial Court established that the subject property was purchased and developed with private funds of the Appellant. He argued that the certificates tendered, were for the purpose of establishing the capacity of the Respondent as an implied trustee for the benefit of the Appellant. He stated that the lower Court was wrong, when it relied on Section 132(1)(a) of the Evidence Act to hold that the testimonies of PW1 – PW14 cannot vary exhibits A1 and A3 issued in the name of the Respondent. Counsel faulted the advice given to the Appellant about holding legal estate in Nigeria, and contended that the provision under the Land Tenure Law which prohibits aliens from acquiring legal estate in land in Northern Nigeria, was abrogated by the Land Use Act, 1978. Counsel submitted that implied trust is an equitable conversion of the holder of the property into a trustee by operation of law and as such, the question of leading evidence to prove a “grant” and “acceptance” does not arise. On the other hand, learned Counsel for the Respondent, submitted that the oral testimony of the Appellant cannot vary the contents of Exhibits A1 and A3, which were glaringly issued in the name of the Respondent. He posited that the Appellant failed to meet the legal requirements laid down in the case of UGHUTEVBE v SHONOWO & ANOR (2004) ALL FWLR (Pt. 220) 1185 at 1212, Paragraph E-A, to establish the existence of a legal relationship between him and the Respondent, so as to be entitled to judgement in his favour. Court’s Judgement and Rationale The Appellant did not set out a claim for declaration of title to land. His principal claim, was for a declaration that the Respondent holds the legal estate in the land at Kajuru bought by him in the Respondent’s name upon a resulting trust to his benefit. In the Black’s Law Dictionary, 7th Edition, trust is defined as the right enforceable solely in equity to the beneficial enjoyment of property to which another person holds the legal title. Where a party claims certain property is held in constructive trust for his own benefit, he has a duty to prove that the title document in possession of the trustee is valid and in proper custody.
Hon. Paul Adamu Galinje, JSC
In the Supreme Court of Nigeria Holden at Abuja On Friday, the 7th Day of April, 2017 Before Their Lordships Ibrahim Tanko Muhammad Mary Ukaego Peter-Odili Kumai Bayang Aka’ahs Amina Adamu Augie Paul Adamu Galinje Justices, Supreme Court SC. 198/2006 Between Gerhard Huebner.............. Appellant And Aeronautical Industrial Engineering and Project Management Co. Ltd (AIEP/DANA) ......Respondent Lead Judgement delivered by Hon. Paul Adamu Galinje, JSC
Where he successfully contradicts and renders the title document in the name of the Trustee invalid, his claim automatically fails, since the success of his claim depends largely on the validity of the documents of title in the name
"SECTION 1 OF THE LAND USE ACT, 1978 SPECIFICALLY LIMITS ITS BENEFITS TO NIGERIANS, AND THAT A NONNIGERIAN CANNOT APPLY FOR A STATUTORY OR CUSTOMARY RIGHT OF OCCUPANCY, BECAUSE SECTION 36(1) WHICH PROVIDES FOR ANY PERSON, DOES NOT INCLUDE ALIENS WHO ARE NOT NIGERIANS"
of the Trustee. In this case, the evidence called at the trial Court was not meant to contradict Exhibits A1 and A3, but to strengthen them and justify the role played by the Appellant in the acquisition of the property in issue. Thus, the provision of Section 132 of the Evidence Act was not applicable to the situation at the trial Court. Still on the issue of Trust, the Apex Court held that a constructive or implied trust is the formula through which the conscience of equity finds expression. Where property is acquired in a circumstance that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him to a Trustee. BEATTY v GUGGENHEIM EXPLORATION CO. 122 N.E. 378; KOTOYE v SARAKI (1992) NWLR (PT. 264) 156, (1992) 11/12 SCNJ 26. An implied trust does not require an agreement between the Settlor and the Trustee. Constructive trust is neither granted nor accepted but foisted on the parties by operation of law. It follows that the question of whether the Appellant produced evidence of the resolution of the Board of the Respondent authorising such trust is of no moment. The elements of trust are: i. A trustee, who holds the trust property and is subject to equitable duties to deal with it for the benefit of another; ii. A beneficiary to whom the trustee owes equitable duties to deal with the trust property for his benefit; and iii. Trust property which is held by the trustee for the beneficiary. The evidence before the trial Court shows that the property in dispute, was acquired by the Appellant with his own money in the name of the Respondent. This fact is supported by the evidence of purchase of the property in 1976 and 1985, before the Appellant became the Managing Director of the Respondent in 1986. The salient question however, is whether the Appellant was qualified and had the legal capacity to hold legal estate in land in Nigeria? The applicable authority in this instance is the case of CHIEF S.O. OGUNMOLA & 6 ORS. v HODA EIYEKOLE & 9 ORS. (1990) 4 NWLR (PT. 146) 632 at 647 Paragraphs B – D. In this case, Their Lordships of the Supreme Court, OLATAWURA, JSC; OBASEKI, JSC; KARIBI-WHYTE, JSC and WALI, JSC agreed that Section 1 of the Land Use Act, 1978 specifically limits its benefits to Nigerians, and that a non-Nigerian cannot apply for a statutory or customary right of occupancy, because section 36(1) which provides for ANY PERSON, does not include aliens who are not Nigerians. However, His Lordship, AGBAJE, JSC held a dissenting opinion in the judgement thus: “... a non-Nigerian who is a holder of land is entitled to the benefits of Section 36(1) of the Act provided the non-Nigerian in the words of the definition section of the Act is a person entitled to a right of occupancy or a person to whom a right of occupancy has been validly assigned.” Counsel for the Appellant urged the Court to adopt the dissenting view in this case and depart from the majority decision of the Court. Their Lordships nonetheless, held that the majority decision of the Court constitutes the decision of the Court, which is binding. The law under which the decision referenced was reached has not been repealed or altered; it is still the extant law which regulates land administration in Nigeria. Hence, the call for the Supreme Court to depart from its earlier decision is baseless. The law remains that an alien has no legal capacity to hold interest in land in Nigeria and as such, the Appellant cannot own the land in Kajuru Local Government Area of Kaduna State. By the principle of nemo dat quod non habet, the Appellant cannot benefit from property which he was incapable of owning. The principle of implied trust on the basis of equity, does not enure to the Appellant either. The acts of the Appellant, knowing that he was not qualified to own land in Northern Nigeria, and going ahead to make the purchase wrongfully and illegally, amounts to approaching equity without clean hands, which cannot be encouraged. The flip side would be that he made the payments with his funds, not being aware that he could not have such ownership; then his action would have been caught up by the principle that ignorance of the law is not an excuse. It follows that whether in law or in equity, the Appellant would have lost out, having lacked the capacity to enter into the purchasing transaction for land as a foreign national. Appeal Dismissed. Representation: Mr. R.A. Oluyede with Kate Okoh (Miss) for the Appellant. Mr. S.A. Adeniran with B.E. Gwadah Esq., Mrs. W. Agyo and A.S. Agbu for the Respondent. Reported by Optimum Publishers Limited (Publishers of Nigerian Monthly Law Reports (NMLR))