BALE ADEDIRE & 6 ORS v. 1. THE CARETAKER COMMITTEE OF THE IFE DIVISIONAL COUNCIL 2. ADERAWOS TIMBER CO. LTD (FSC 395/1961) [1963] 6 (22 January 1963);

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  • BALE ADEDIRE & 6 ORS v. 1. THE CARETAKER COMMITTEE OF THE IFE DIVISIONAL COUNCIL 2. ADERAWOS TIMBER CO. LTD (FSC 395/1961) [1963] 6 (22 January 1963);

Headnote and Holding:

The court considered an appeal against the decision of the lower court, seeking among other things, a declaratory order, that a concession agreement signed, and registered in the Register of Deeds, Lands Registry entered by the second respondent on behalf of the native lands was irregular, and liable to be set aside. 

At the core of the challenge was a lease agreement entered by the Ife District Native Authority over a forest, which was communal property. The lease was granted to a timber trading company for a 25-year term. The court had to decide several issues, including: (1) whether the appellants had locus standi (2) whether the Oni if Ife had the capacity to act as both grantor and grantee (3) and whether the deed of concession was made in pursuance of the power vested in the first defendant.

In considering the appellants locus standi in the matter, the court considered the use of the land which included farming, fishing and hunting. The court concluded that the appellants thus had substantial interest in the matter. The court found in favour of the appellants on the question of whether the Oni of Ife executed the deed in a dual capacity as he was both a grantor and a major shareholder of the grantee company. Through being the grantor and the beneficiary of the rights, the Oni of Ife acted in a dual capacity and his interests in the agreement conflicted with his fiduciary duty. The court held that the Oni of Ife and the council, ought to have exercised their rights in a manner consistent and not detrimental to the rights of the appellants. 

Appeal succeeds. 

IN THE SUPREME COURT OF NIGERIA

On Tuesday, the 22nd day of January 1963

FSC 395/1961

Between

BALE ADEDIRE & 6 ORS ........................................................ APPELLANT

And

1. THE CARETAKER COMMITTEE OF THE IFE DIVISIONAL COUNCIL ............................................ RESPONDENT

2. ADERAWOS TIMBER CO. LTD 

 

Appeal by plaintiffs. (High Court (W.N.) Suit No. I/212159).

Section 22 of the Forestry Ordinance (1948 Laws of Nigeria Cap. 75) authorises a native authority to create a forest reserve within its jurisdiction; section 23(1) requires notice to be given of the intention, and investigation of rights claimed; section 27 provides that, apart from rights which are saved, the order extinguishes rights in the reserve; and section 33(1) vests the Native Authority with the control of the reserve subject to certain supervision and advice.

The Ife Native Authority Forest Reserve Order 1941 (at B 269 of the 1941 Laws) created a forest reserve, and in the Second Schedule saved (inter alia), for Ogunleye and his successors who are members of the hunters guild of Ile-Ife the right to reside in certain camps, and also saved for Ogunleye and his successors the right to farm in a certain area, and some rights to take firewood, etc.

On 6th January, 1954, the Ife N.A., of which the Oni was a member, granted the Aderawos Timber Co. Limited, of which the Oni was the principal shareholder, a concession to fell timber, and make roads etc. within the Ife N.A. Forest Reserve. The plaintiffs as members of the Ife community sued the successors of the Ife N.A. and the said company, claiming (inter alia) an order to set aside the concession and for an account of the company's profits. Their case was that the N.A. held the Reserve in trust for them; that the Oni was a trustee and acted in a dual capacity in the agreement for the concession, and that there was a possible conflict between his private interest and his duty as trustee.

The first defendant (the Caretaker Committee of Ife Divisional Council) pleaded the time-bar in section 62(1) of the Native Authority Ordinance (1948 Laws of Nigeria Cap. 140) and section 242 of the Local Government Law 1957 (W.R.) on the ground that the suit was brought more than six months after the concession was given; the second defendant (the company) denied the plaintiffs' allegations and alleged that the concession was lawfully made by the Native Authority.

The first plaintiff gave evidence that he was a native of Ife and a taxpayer, head of the Ogunleye family and a member of the hunters guild of Ile-Ife, and that his family still hunted and farmed in the Forest Reserve. He was the only witness.

The trial Judge dismissed the claim. On appeal, the issues were (a) whether the plaintiffs had a locus standi, (b) whether the agreement was one which ought to be set aside and (e) whether the claim was statute-barred.

The defendants submitted that it was not established that the plaintiffs represented any identified community or that the first plaintiff represented the Ogunleye family. Counsel for the plaintiffs said that they were not suing on behalf of the community, but their case was that the first plaintiff, as a member of the hunters guild and head of the Ogunleye family, had hunting and farming rights in the Forest Reserve. The other arguments appear sufficiently from Held (2) and (3).

 

HELD:

 

(1)     The first plaintiff as head of his family was the person in control of family property under native law and custom; farming rights were reserved to his family, and hunting rights to the hunters guild of which he was a member; thus he had an interest in portions of the area conceded to the company, and his interest was affected because the concession authorised them not only to fell timber, but also to make roads etc. over the area.

(2)     The Oni acted in a dual capacity in the agreement for the concession, and, as certain rights in the Forest Reserve, including those of the first plaintiff, were saved by section 27 of the Forestry Ordinance, the Oni and his Council had a duty to exercise their powers over the Reserve in a way that was not inconsistent with, or detrimental to the rights so saved; and the Oni vis-a-vis the first plaintiff was in quasi-fiduciary position in the N.A. which in equity would not allow him to put himself in a situation in which his interest as shareholder would or might be in possible conflict with that duty.

(3)     In regard to the time-bar in section 62(1) of the Native Authority Ordinance, that provision did not protect an act done in pretended execution of public powers or duties conferred or imposed by an Ordinance, and was not meant to allow a member of a public authority to enter into a private contract for his own benefit in breach of trust; and the defence of the time-bar was not available in this case.

 

Appeal allowed; High Court decision replaced by order setting aside deed of concession etc.

 

Cases cited:-

 

Regal (Hastings Limited) v. Gulliver [1942] 1 All E.R. 378; Thomson, In re Thomson v. Allen [1930] 1 Ch. 203, 214; Sharpington v. Fulham Guardians [1904] 2 Ch. 449; Bradford Corporation v. Myers [1916] A.C. 242, 247.1

 

APPEAL from the High Court of Western Nigeria.

 

R. A. Fani-Kayode, O.C. (with him O.A. Duduyemi) for the Appellants.

 

Chief F.R.A. Williams, Q.C. (with him G.C. Nzegwu) for the Respondents.

 

Taylor, F.J.:-This is an appeal from the judgment of Kester J., of the High Court of Ibadan, dismissing the plaintiffs' claim which reads as follows:-

 

The plaintiffs, members of the Ife Community, jointly and severally claim against the defendants jointly and severally:-

 

(i) A declaration that the Deed of "Concession" dated 6th January, 1954, and registered as Instrument No. 16 at 16 in Volume 54, Register of Deeds, Lands Registry, Ibadan, purported to have been entered into by the Ife District Native Authority on the one part and second defendant on the other part is irregular and contrary to equity and liable to be set aside.

(ii) An order to set aside the aforesaid Deed.

(iii) Against the second defendant, an account of all profits derived pursuant and by virtue of the "Concession" conferred on them by the aforesaid Deed, and an Order that the sum found on such account be paid into Ife Divisional Council Treasury for public use and benefit.

(iv) Against the second defendant, an injunction to restrain them from further exploiting of the "Concession", the subject matter of the aforesaid Deed.

 

The main ground on which the plaintiffs seek the declaration set out above is contained in paragraph 8 of the S/Claim which states that:-

 

"8.     Sir Adesoji Aderemi, the Oni of Ife concluded the said instrument on behalf of each side to the purported contract purporting to act in a dual capacity."

 

This is followed by paragraph 9 in which it is averred that:-

 

"9.     The aforesaid Deed of Concession is in the circumstances unfair, irregular and contrary to equity and liable to be set aside in that the Oni of Ife acted on both sides in a transaction in which he had a personal interest in possible conflict with his duty as trustee of communal lands."

 

The case for the plaintiffs, as can be gathered from the pleadings, is that they are members of the If e Community and that a lease of certain forest-area in If e which was the communal property of the Ife Community, measuring some 53 square miles, was granted by the Ife District Native Authority to Aderawos Timber Trading Company Limited for a term of 25 years, subject to the conditions and stipulations contained in the Deed, and marked exhibit "A" in these proceedings. The plaintiffs further say, and I would here quote paragraphs 3 to 5 of the S/Claim, that:-

 

"3.     The aforesaid property was held in trust for the said Community by the Ife District Native Authority the successor of the rights and duties of which is now the first defendant.

4.      At all dates material to the Deed of "Concession" registered as No. 16 at 16 in Volume 54 Register of Deeds, Land Registry, Ibadan, Sir Adesoji Aderemi, the Oni of Ife was the trustee of Ife Communal Lands.

5.      At all times material to the aforesaid Deed of "Concession", Sir Adesoji Aderemi, the Oni of Ife was a Principal member of the Aderawos Timber Company Limited."

 

In their Defence, both defendants made a general traverse of all the allegations contained in the S/Claim and the first defendant goes on to set up the defence that the plaintiffs' claim to relief is barred or extinguished by section 62 of the Native Authority Ordinance Cap. 140 Laws of Nigeria and/or section 242 of the Local Government Law 1957 which contains identical provisions. The 2nd defendant company aver in paragraphs 2 to 4 of the S/D that:-

 

"2.     The second defendants aver that the forest area comprised in the instrument described in paragraph 2 of the Statement of Claim was duly constituted a forest reserve under the Forestry Ordinance.

3.      With further reference to paragraphs 2 and 3 of the Statement of Claim the defendants aver that the plaintiffs have no right in or over the area of land in dispute in this case.

4.      The second defendants aver that the Deed described in paragraphs 2, 4 and 7 of the Statement of Claim was duly made in pursuance of powers vested in the Native Authority by law."

 

From the pleadings the issues raised were these:-

 

(1)     Have the plaintiffs a locus standi? Have they any interest in the property in dispute which will entitle them to bring this action?

(2)     If they have a right of action, did the Oni of Ife act in a dual capacity both as grantor and grantee or as one of the grantors and one of the grantees?

(3)     Is the transaction one that a Court of Equity will set aside as being contrary to well established principles or rules governing dealings between parties to a contract or persons placed in a fiduciary or quasi-fiduciary position.

(4)     Is the action barred by virtue of section 62 of the Native Authority Ordinance Cap. 140 Laws of Nigeria?

(5)     Was the Deed of Concession made in pursuance of power vested in the 1st defendant?

 

The appellants have filed seven grounds of appeal with their notice of appeal; and these grounds, though couched in different forms, deal with the issues I have set out above. I shall deal with them in the order in which I have set them out.

On the first, the only witness who gave evidence at the hearing was the 1st appellant, and there was no evidence adduced by the respondents controverting the facts deposed to by this witness.

 

He said inter alia that:-

 

"I am Adedire Ogunleye. I am also the Bale (Head) of Adedire Agbedegbede Compound, Ile-Ife. I was formerly an elephant hunter. I was a member of the Hunters Guild at Ile-Ife. My ancestor's name is Ogunleye. I know the forest which is the subject matter of this case. I am a native of Ile-Ife. I am tax payer at Ile-Ife. I was born and bred in that forest. I hunted and farmed some portions of the forest. This was before it was made a Forest Reserve."

 

And under cross-examination he said that:-

 

"I am the Head of the Ogunleye family. Some members of the Ogunleye family still farm in part of the reserve. Some members of the Ogunleye family are still hunting in this part of the reserve."

 

In addition to this evidence which as I have said is unrebutted, Mr Kayode for the appellants drew our attention to the 1941 Laws of Nigeria, the Forestry Ordinance No. 38 of 1937 dealing with Ife Native Authority Forest Reserve. In the Second Schedule at B270 under the Sub-head "Rights to Reside" appear the following provisions:-

 

"The holders of farming rights have the right to reside within their respective farm enclaves as described in this Schedule. The following have the right to reside temporarily for the purpose of the enjoyment of their hunting and fishing rights in the following camps respectively:-(There is no right to grow crops round those camps which are not covered by farming rights):

Ogunleye and those his successors who are members of the hunters guild of Ile-Ife and recognised by the heads of that guild as successors to the camps named."

 

Finally at B272 certain farming rights in respect of certain areas are also reserved to the Ogunleye family.

Chief Williams has urged that the plaintiffs were unable to show the identity of the Community they represent; that there was no evidence that the Community owned the forest, and that the evidence of PW1 was confined mainly to the Ogunleye family, and that even then he is not shown as claiming on behalf of the family. Mr Kayode in his reply said that the plaintiffs were not suing on behalf of the Community and as far as that point is concerned is content to put his case no further than that the 1st plaintiff as a member of the Hunters' Guild and head of Ogunleye family has both hunting and "farming rights" in the Ife Native Forest Reserve.

It was further argued by Chief Williams that when the Native Authority takes over the management and control of a forest reserve, it in fact, becomes the owner of such reserve with the result that the plaintiffs have no rights over the area so declared a reserve. Our attention was drawn to various sections and definitions of words, both in the Forestry Ordinance No. 38/37, and Cap. 75 of Volume 3 of the 1948 Laws of Nigeria. I do not intend in this judgment to embark upon a discussion of the rights of the Community as a result of these Ordinances, for, as Mr Kayode has said, he has not brought this action, the subject matter of this appeal, for and on behalf of the Ife Community. We are here concerned with the rights of the seven individual plaintiffs/appellants. As I have said, only the first appellant gave evidence and on his own showing, coupled with the reservation of certain rights to his family of framing, and of hunting rights to a guild of which he is a member, it is beyond doubt that he has certain rights over portions of the conceded area, both as head and as member of the Ogunleye family. In this case on appeal, the 1st appellant as the head of the Ogunleye family is the person in whom by established Native Law and Custom, is vested the management and control of family property. Had exhibit "A" dealt only with rights of cutting timber, the argument might be put forward that the plaintiffs' rights of hunting, fishing and farming would in no way be affected by the felling of logs, but Clause lb gives the 2nd defendants the following additional rights over the whole area:-

 

"To make such roads, railways, and bridges, and to erect such buildings as are necessary within the Concession Area for the felling conversion and extraction of all such logs, timber, and firewood."

 

In my view, the 1st appellant has in his own right shown that he has an interest in portions of the conceded area, and that the 2nd defendants have been granted rights of felling timber, making roads, railways, bridges, and erecting building where require over the whole area conceded.

I now pass on to the second issue. At the hearing of the suit exhibit "B" the register of members of the 2nd defendant company was put in by consent. Folios 4 and 5 show the only two members as being Sir Adesoji Aderemi, Oni of Ife, and one Lasisi S.A. Awoshiyan. The Articles of Association, ehibit "c" together with the other exhibits tendered at the hearing, i.e., G.4, D.4 and D.5 make it abundantly clear that Sir Adesoji Aderemi holds the largest share in this company and that in 1957 he became a Director on the cessation of one Moronfolu Adedapo Aderemi of the Afin Ife from the directorship of the company. In the agreement exhibit "A" the Testimonial reads thus:-

 

"In Witness whereof the Oni of Ife and Council for and on behalf of the Ife District Native Authority          "

 

Sir Adesoji Aderemi executed this Deed together with four others for the Oni of Ife and Council. There can therefore be no doubt, and in fact Chief Williams did not seek to argue to the contrary that the Oni of Ife did execute this Deed in a dual capacity being one of the grantors and at the same time the major share holder of the grantee company. Both the first and second issues must therefore be resolved in favour of the appellants.

I now come to the third point as to the effect of such a transaction in equity. Mr Kayode has referred us to the case of Regal (Hastings), Limited v. Gulliver [1942] I.A.E.R at378 in which Lord Sankey puts the duties and liabilities of persons occupying a fiduciary position as follows (at 381):-

 

"As to the duties and liabilities of those occupying such a fiduciary position, a number of cases were cited to us which were not brought to the attention of the trial Judge. In my view, the respondents were in a fiduciary position and their liability to account does not depend upon proof of mala fides. The general rule of equity is that no one who has duties of a fiduciary nature to perform is allowed to enter into engagements in which he has or can have a personal interest conflicting with the interests of those whom he is bound to protect. If he holds any property so acquired as trustee, he is bound to account for it to his cestui que trust."

 

In the case of Thomson, in re Thomson v. Allen [1930] 1 Ch. 203 at 214 Clauson J. says:-

 

"In order to find the principle I have to apply I turn to the judgment of Cranworth L.C. in the House of Lords in the case of Aberdeen Ry. Co. v. Blaikie Brothers (1). This case dealt with a fiduciary relation which arose from the fact that the person concerned in the case was the director of a corporate body. A corporate body, "says the Lord Chancellor, "can only act by agents, and it is of course the duty of those agents so to act as best to promote the interests of the corporation whose affairs they are conducting. Such agents have duties to discharge of a fiduciary nature towards their principal. And it is a rule of universal application, that no one, having such duties to discharge, shall be allowed to enter into engagements in which he has, or can have, a personal interest conflicting, or which possibly may conflict, with the interests of those whom he is bound to protect. So strictly is this principle adhered to, that no question is allowed to be raised as to the fairness or unfairness of a contract so entered into." And further: "The inability to contract depends not on the subject matter of the agreement, but on the fiduciary character of the contracting party, and I cannot entertain a doubt of its being applicable to the case of a party who is acting as manager of a mercantile or trading business for the benefit of others, no less than to that of an agent or trustee employed in selling or letting land."

 

In this case on appeal before us the evidence, unchallenged, is abundant that the Oni of Ife was the major shareholder, and is the Chairman of the Board of Directors of the 2nd defendant company who are the grantees. It has further been established by exhibit "A" that the Oni of Ife and four others for and on behalf of the Ife District Native Authority signed in the capacity of grantors. The grantors are, as a result of section 33(1) of the Forestry Ordinance Cap. 75 Vol. 3 of the 1948 Laws of Nigeria, empowered with full rights of control and management of the Native Authority Forest Reserve. While the rights of individuals in the Native Authority Forest Reserve are extinguished, certain rights are by section 27 preserved. The section reads thus:-

 

"Every right in or over land within an area constituted a Native Authority Forest Reserve under section 22, other than the rights set forth in the order constituting such reserve, shall be extinguished upon the coming into operation of the order, save as provided in section 23."

 

I have pointed out in an earlier part of this Judgment the rights possessed by the 1st appellant and the Ogunleye family in certain parts of this reserve. It therefore stands to reason that in the management and control of the whole of the reserved area, the Oni of Ife and Council must exercise their rights or powers in a way that is not inconsistent with or detrimental to the rights and interests reserved in favour of those persons referred to in the 2nd Schedule to the Forestry Ordinance of 1937, and one of whom is the 1st appellant. In my view, the position of the Oni of Ife and Council vis-a-vis the 1st appellant is covered by the two cases to which I have made reference; and equity will not allow him so to put himself in a position in which his interests as the major shareholder of the 2nd respondent company will be or may be in possible conflict with the duties imposed on him and his Council, as already indicated. He is placed in a quasi-fiduciary position as the Oni of Ife in the Ife District Native Authority which executed the Deed exhibit "A" through the Oni of Ife and Council.

The fourth issue is whether the claims of the 1st appellant is barred by virtue of section 62(1) of the Native Authority Ordinance Cap. 140 Vol. 4 of the 1948 Laws of Nigeria which provides that:-

 

"When any suit is commenced against any Native Authority for any act done in pursuance, or execution, or intended execution of any Ordinance, or of any public duties or authority or in respect of any alleged neglect or default in the execution of any such Ordinance, duty or authority such suit shall not lie or be instituted unless it is commenced within six months next after the act, neglect or default complained of, or in a case of a continuance of damage or injury, within six months next after the ceasing thereof."

 

There is a proviso to this section, but it is not relevant for the purposes of this appeal. Chief Williams Q.C., for the respondent argued that the granting of the concession was an act done in pursuance or execution of an Ordinance and that as such any Suit in respect thereof must be brought within six months after the 6th January, 1954. Mr Kayode Q.C., for the appellants contended that the section did not apply for the following three reasons:-

 

(i) That the duty imposed on the Native Authority was not one that it was obliged to carry out;

(ii) That an act in breach of a trust cannot be done in the execution of a duty; and

(iii) That even if these points were resolved against him, the period of six months would not begin to run until six months after the cessation of the damage or injury to the appellants, which he said was a continuous one.

 

I shall deal firstly with the second point argued by Counsel for the appellants for, if this is answered in his favour, there will be no need to consider the other points raised by him and by the learned Counsel for the respondent. In dealing with this point, I shall also have covered the fifth issue set out earlier in this Judgment. As has been conceded, the Native Authorities Ordinance Cap. 140 is identical with the Public Authorities Protection Act 1893. The learned Author of Halsbury's Laws of England Vol. 23, the 1st Edition says at 343 that:-

 

"The act, or omission, need not be directly justifiable, as this would reduce the protection to a nullity. It is sufficient if the defendant has a bona fide belief, even without reasonable foundation, in a state of facts which, if true would give him a right to act as he does, or if he acts in pursuance of his office and has an honest intention of putting the law into force."

 

"He must, however, have acted colore oficii and not for his own benefit; and the act complained of must be in execution of the duty and not merely contemporaneous with such execution."

 

Again in paragraph 696 of the same work, the learned Author says this:-"In every case the defendant must have acted in good faith."

 

In the case of Sharpington v. Fulham Guardians [1904] 2 Ch. 449 Farwell J. says that:-

 

"Public authorities now perform many functions which compel them to enter into all sorts of contracts; but this is the first time it has been suggested that on any construction the Act could apply to contracts of this nature. The defendants' Counsel had not the courage to follow their argument to its logical conclusion, and say that every contract entered into by a public body is within the Act. But every contract entered into by a public body is necessarily in a sense entered into in discharge of a public duty or under statutory authority, for otherwise it would be ultra vires. And I think it would necessarily follow, if I decided in the defendants' favour, that every contract entered into by a public authority is an act done in pursuance of a public duty or authority, and therefore is one to which the Act applies. I do not see where to draw the line."

 

The point was, however, found against the defendant. In my view that must be so, for a contract is not protected merely because it is one entered into by a public authority. As Lord Buckmaster L.C., said in the case of Bradford Corporation v. Myers [1916] 1 A.C. 242 at 247:-

 

"In other words, it is not because the act out of which an action arises is within their power that a public authority enjoy the benefit of the statute. It is because the act is one u which is either an act in the direct execution of a statute, or in the discharge of a public duty, or the exercise of a public authority. I regard these latter words as meaning a duty owed to all the public alike or an authority exercised impartially with regard to all the public."

 

As I have said earlier, the Oni of Ife in particular and the respondents in general did not choose to give evidence at the court of Trial. On the other hand, the appellants have shown that the Oni of Ife is benefited, as the substantial shareholder in the 2nd respondent company, by the contract entered into between the respondents. Equity looks upon such a contract with disfavour and in the words of Clauson J., to which I have already referred equity does not allow questions to be raised as to the fairness of the Agreement for the inability to contract depends not on the subject matter of the Contract, but the relationships of the parties. In my view, the Native Authority Ordinance does not protect an act such as this, done not in execution of an Ordinance, but in pretended execution of an Ordinance. The Ordinance was never meant to allow a member or members of a public Authority through whom such Public Authority acts to put on the cloak provided by such Ordinance in order to enter into private contracts to the benefit of such member or members. I therefore hold that the defence does not avail the 1st respondent body, and it is not necessary for me to consider the other two points raised by learned Counsel for the appellants.

 

In my view this appeal must succeed, the decision of the court below is hereby set aside, and the following order is proposed:-

 

(1)     The deed of "Concession" dated the 6th January, 1954, and registered as No. 16 at 16 in Volume 54 of the Register of Deeds, Lands Registry, Ibadan, is hereby set aside.

(2)     An account of all profits derived by the 2nd respondent pursuant to and by virtue of the said deed as from the said 6th January, 1954, to the date of this Judgment be rendered by the 2nd respondents within 90 days of this Judgment.

(3)     All profits found to have been made by the said 2nd respondents are to be paid into the Ife Divisional Council Treasury.

(4)     An injunction is granted restraining the 2nd respondents from further acting under the said Deed of Concession.

 

The appellants are entitled to their costs in this Court which I make payable by the 2nd respondents only in the sum of 60 guineas and in the court below at £290-0s-0d, i.e., 250 guineas plus out of pocket expenses of £27-10s-0d. I also order that the expenses of the taking of the account be borne wholly by the 2nd respondents.

Ademola, C.J.F.:- I concur.

Bairamian F.J.:- I concur.