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Published online by Cambridge University Press: 04 March 2010
Do the terms of the Nigerian Land Use Act permit the application of equitable principles to transactions under it? More particularly, could equity be used to enforce null and void transactions under the Act? Although the Supreme Court answered these questions in the negative in Ajilo, other decisions of the Supreme Court, as well as some sections of the Act itself, suggest that the Act is not incompatible with equitable principles. Nor is it contrary to public policy to enforce null and void transactions under the Act through the intervention of equity. Two relevant equitable concepts are resulting and constructive trusts. While constructive trusts have found some fertile soil in Nigerian equity jurisprudence (despite the discordant tune in Ajilo), Nigerian courts seem to struggle with the principles of resulting trust. This article suggests that resulting and constructive trusts are proper instruments for the interpretation and application of the Act and that Ajilo should be overruled.
1 Land Use Act 1978, cL5 (Laws of the Federation 2000). The Land Use Act was originally enacted in 1978 and came into force on 29 March 1978.
2 Nwabueze, RN “Alienations under the Land Use Act and express declarations of trust in Nigeria” (2009) 53 Journal of African Law 59CrossRefGoogle Scholar.
3 Regarding resulting trusts: In Re Vandervell's Trusts (No 2) [1974] Ch 269 (Megarry J); for constructive trusts: Paragon Finance v Thakerar [1999] 1 All ER 400 (CA). Although this article includes all resulting trusts in the category of trusts that arise by operation of law, it should be noted that, while that is certainly true for resulting trusts that arise from failed express trusts, it is less true for the so-called presumed intention resulting trusts. Presumed intention resulting trusts are more analogous to express trusts. See generally: Chambers, RResulting Trusts (1997, Oxford University Press)Google Scholar; and Swadling, W “Explaining resulting trusts” (2008) 124 Law Quarterly Review 72Google Scholar.
4 This is more true for constructive than resulting trusts. While it is generally accepted that intention has no role to play in the creation of constructive trusts, its role for resulting trusts has continued to be a matter of debate. See Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 (HL); and Air Jamaica Ltd v Charlton [1999] 1 WLR 1399 (PC).
5 See generally Swadling “Explaining resulting trusts”, above at note 3.
6 Swadling opposes the “suspicion of gift” rationalization of resulting trusts: ibid.
7 Lord Reid in Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1975] AC 591 at 614.
8 Amachree v Kallio [1914] 2 NLR 108; Braide v Adoki [1930] 10 NLR 15; Adeshina v Lemonu [1965] 1 All NLR 233 (SCN).
9 Re Ames Settlement [1946] 1 Ch 217.
10 Secs 21, 22 and 26.
11 For instance, Vandervell v IRC [1967] AC 291 (HL).
12 Bucknor-Maclean v Inlaks Ltd [1980] 8–11 SC 1 (SCN).
13 Jaffar v Ladipo [1969] 1 All NLR 165 at 172 (SCN).
14 Bucknor-Maclean, above at note 12 at 22. Also, Walsh v Lonsdale [1882] 21 Ch D 9.
15 Kotoye v Saraki [1994] 7 NWLR 414 (SCN).
16 Although Kutigi JSC thought that it was a case of constructive trust, a reading of the statement of claim (at 475–76 and 488–90) shows that it is more a resulting trust. The circumstances of the transaction and voluntary transfer raise the inference that the parties (or at least the transferor) intended a trust. Whether it is a resulting or constructive trust, however, does not seem to make any difference to the important suggestion that BOFI does not prohibit equitable interests that arise by operation of law.
17 Kotoye, above at note 15 at 443–44.
18 Beatty v Cupperhein Exploration Co 225 NY 330 (1919) at 336.
19 JE Martin Hanbury & Martin Modern Equity (17th ed, 2005, Sweet & Maxwell) at 301–43.
20 Paragon Finance v Thakerar [1999] 1 All ER 400 at 409.
21 In re Montagu's Settlement Trusts [1987] 2 WLR 1192 at 1200.
22 Id at 1200 and 1211.
23 Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 at 705.
24 Nwabueze “Alienations under the Land Use Act”, above at note 2.
25 Savannah Bank Ltd v Ajilo [1989] 1 NWLR (pt 97) 305.
26 Id at 324.
27 Milsom, SFCHistorical Foundations of the Common Law (2nd ed, 1981, Oxford University Press)Google Scholar.
28 Bucknor-Maclean, above at note 12.
29 They are: Jaffar, above at note 13; Shell BP v Jammal Engineering Ltd [1974] 1 All NLR 542; and Owumi v Paterson Zochonis & Co Ltd [1974] 1 All NLR (pt 2) 107.
30 Bucknor-Maclean, above at note 12 at 26–28.
31 Walsh v Lonsdale, above at note 14.
32 Nwabueze “Alienations under the Land Use Act”, above at note 2 at 74–81.
33 Bucknor-Maclean, above at note 12 at 39–40.
34 Sec 26.
35 Goff, R and Jones, GThe Law of Restitution (5th ed, 1999, Sweet and Maxwell) at 579–80Google Scholar.
36 Sinclair v Brougham [1914] AC 398 (HL).
37 See generally, Birks, PUnjust Enrichment (2nd ed, 2005, Oxford University Press)CrossRefGoogle Scholar.
38 As Lord Sumner famously observed: “To hold otherwise would be indirectly to sanction an ultra vires borrowing. All these causes of action are common species of the genus assumpsit. All now rest, and long have rested, upon a notional or imputed promise to repay. The law cannot de jure impute promises to repay, whether for money had and received or otherwise, which, if made de facto, it would inexorably avoid”: Sinclair, above at note 36 at 452.
39 Westdeutsche, above at note 4.
40 Yaxley v Gotts [2000] Ch 162 (CA). But, as Lord Walker in the House of Lords case of Stack v Dowden [2007] 2 WLR 831 at 843, His Lordship recanted his view on the unity of proprietary estoppel and constructive trusts: “but I have to say that I am now rather less enthusiastic about the notion that proprietary estoppel and ‘common interests’ constructive trusts can or should be completely assimilated”.
41 Yaxley, id at 174.
42 Id at 175.
43 Id at 179.
44 Cobbe v Yeoman's Row Management Ltd [2008] 1 WLR 1752 at 1769 (HL).
45 Maitland, FWEquity and the Forms of Action at Common Law (1929, Cambridge University Press)Google Scholar.
46 Beldam LJ made similar observations in relation to sec 2 of the Law of Property (Miscellaneous Provisions) Act 1989: “The general principle that a party cannot rely on an estoppel in the face of a statute depends upon the nature of the enactment, the purpose of the provision and the social policy behind it. This was not a provision aimed at prohibiting or outlawing agreements of a specific kind, though it had the effect of making agreements which did not comply with the required formalities void. This by itself is insufficient to raise such a significant public interest that an estoppel would be excluded”: Yaxley, above at note 40 at 191.
47 Waters, DWM et al. Waters' Law of Trusts in Canada (3rd ed, 2005, Carswell) at 257–65Google Scholar; Martin Hanbury & Martin Modern Equity, above at note 19 at 79–82.
48 Rochefoucauld v Boustead [1897] 1 Ch 196 (CA).
49 Id at 206. Although Rochefoucauld is problematic in that it enforced the terms of the void express trust, the modern and preferable approach is to impose a constructive trust in the circumstances. See Bannister v Bannister [1948] 2 All ER 133; Binions v Evans [1972] Ch 359; and Ashburn Anstalt v Arnold [1989] Ch 1.
50 Akwei v Akwei [1943] 9 WACA 111.
51 Applicable in most British colonies as a statute of general application; see Nwabueze, BOThe Machinery of Justice in Nigeria (1963, Butterworths)Google Scholar.
52 Akwei, above at note 50 at 115–16.
53 Solanke v Abed [1962] NSCC 160 (SCN).
54 The Land and Native Rights Act was the precursor of the Land Use Act and its sec 11 is similar to sec 22 of the Land Use Act.
55 Solanke, above at note 53 at 162.
56 Id at 162.
57 The transferor has the duty to obtain consent to alienation under the Act.
58 Int Textile Ind (Nig) Ltd v Aderemi [1999] 8 NWLR (pt 614) 268 (SCN).
59 Id at 297.
60 Id at 298.
61 The leading English case is Lysaght v Edwards [1876] 2 Ch D 499 at 506.
62 Nwabueze “Alienations under the Land Use Act”, above at note 2 at 74–81.
63 Swadling “Explaining resulting trusts”, above at note 3 at 72–73.
64 For a more detailed analysis, see Chambers Resulting Trusts, above at note 3.
65 Vandervell v Inland Revenue Commissioners [1967] 2 AC 291 at 329 (HL).
66 Vandervell No 2, above at note 3 at 294.
67 According to the majority of the House of Lords in Stack v Dowden, above at note 40, the presumption of resulting trust does not apply in disputes over matrimonial or quasi-matrimonial homes.
68 Swadling, W “A new role for resulting trusts?” (1996) 16 Legal Studies 110CrossRefGoogle Scholar.
69 Vandervell No 2, above at note 3 at 303 (Megarry J).
70 Rider v Kidder 10 ves 360; Soar v Foster [1858] 4 K&J 152.
71 Westdeutsche, above at note 4 at 708.
72 Such as the four year old child in Re Vinogradoff [1936] WN 68.
73 Air Jamaica Ltd v Charlton [1999] 1 WLR 1399 at 1412: “Like a constructive trust, a resulting trust arises by operation of law, though unlike a constructive trust it gives effect to intention. But it arises whether or not the transferor intended to retain a beneficial interest - he almost always does not - since it responds to the absence of any intention on his part to pass a beneficial interest to the recipient.” Also, see the dissenting judgment (on another issue) of Lord Millett in Twinsectra v Yardley [2002] 2 AC 164 (HL).
74 Westdeutsche, above at note 4 at 708.
75 Onamade v ACB [1997] 1 NWLR (pt 480) 123 (SCN).
76 Id at 145.
77 Awojugbagbe Light Industries v Chinukwe [1995] 4 NWLR (pt 390) 379 (SCN).
78 For trusts of the benefits of contracts, see: Fletcher v Fletcher [1844] 4 Hare 67; and Don King Productions Inc v Warren [2000] Ch 291 (CA).
79 Compare with Cotterell v Price [1960] 1 WLR 1097 and Pyke v Peters [1943] 1 KB 242. Sec 115 of the UK Law of Property Act 1925 more clearly codifies the common law position by providing that the receipt of payment of a mortgage debt made by a third party shall operate as a transfer of the benefits of that mortgage to the third party.
80 Since the mortgage debt has been discharged, the mortgage is analogically voluntary.
81 See note 79 above.
82 A transfer by the nominal owner to the beneficial owner does not constitute alienation.
83 Ezeanah v Atta [2000] 11 NWLR (pt 678) 363 (CA); [2004] 7 NWLR (pt 873) 468 (SCN).
84 Id (CA) at 374.
85 Id at 374.
86 Id at 379–80.
87 Id per Musdapher JCA (as he then was) at 383–85. The reader must however ignore his incorrect definition (at 383) of a resulting trust: “An implied trust or resulting trust is a trust founded upon the expressed intention of the settlor”. If there was an expressed intention to establish a trust it becomes an express, and not implied or resulting, trust. The correct definition was given by the Supreme Court in Adekeye v Akin-Olugbade [1987] 3 NWLR (pt 60) 214.
88 For that characterization, see: Martin Hanbury & Martin Modern Equity, above at note 19 at 242; and Abrahams v Trustee in Bankruptcy of Abrahams (26 July 1999) Times Law Reports.
89 Quistclose Investments v Rolls Razor Ltd (in liquidation) [1970] AC 567 (HL); also Twinsectra v Yardley, above at note 73. For an extensive discussion of the Quistclose trust, see Swadling, W (ed) The Quistclose Trust: Critical Essays (2004, Hart Publishing)Google Scholar.
90 See the dissenting judgment of Ayoola JCA (as he then was) for an interesting application of the Quistclose trust in Nigeria in the context of a dispute relating to share ownership: FATB v Ezegbu [1994] 9 NWLR 149 (CA).
91 Compare with Re Ame's Settlement, above at note 9, where a marriage settlement was made in contemplation of marriage between the settlor's son and a woman. The marriage took place but was subsequently declared a nullity. It was held that there was a resulting trust for the settlor.
92 Atta (SCN), above at note 83 at 496.
93 Id at 505.
94 Id at 496.
95 Id at 499.
96 Id at 503.
97 “The appellant did not sue for breach of promise of marriage. All what he said [is that] he applied for, paid and commenced building on the land for a consideration which undoubtedly failed”: per Musdapher JCA in Atta (CA), above at note 83 at 379.
98 Soar v Foster, above at note 70; Rider v Kidell, above at note 70.
99 Madu v Madu [2008] 6 NWLR 296 (SCN).
100 For a discussion of the ownership of land in the Federal Capital Territory, Abuja, see: Ona v Atenda [2000] 5 NWLR (pt 656) 244 (SCN).
101 Idundun v Okumagba [1976] 9–10 SC 227 (SCN); also Atanda v Ajani [1989] 3 NWLR (pt 111) 511 (SCN).
102 Madu, above at note 99 at 319.
103 Recognized in a line of decisions: Ogubambi v Abowab [1951] 13 WACA 222; Orasanmi v Idowu [1959] FSC 40 (SCN); and Okoye v Dumez Nigerian Ltd [1985] 1 NWLR (pt 4) 783 (SCN).
104 Madu, above at note 99 at 319–20.
105 Id at 320–22.
106 Id at 321.
107 Id at 325.
108 Id at 325.
109 Id at 326.
110 Id at 327.
111 Ibid.
112 Id at 329.