Alienation of right of occupancy
The holder of a statutory or customary right of occupancy may transfer, mortgage or otherwise dispose of the right of occupancy subject to the consent requirement. This requirement permits for better control and enhances security of title. It also helps in keeping proper records of land administration.
Section 22 of the Act provides:
It shall not be lawful for the holder of a statutory right of occupancy granted by the Governor to alienate his right of occupancy or any part thereof by assignment, mortgage, transfer of possession, sublease or otherwise however without the consent of the Governor first had and obtained.
Understanding of section 22 is not without controversy. Professor Omotola is of the view that consent is only required for the right of occupancy actually granted under section 5, and not the deemed granted land under section 34.
The scope of section 22 came up for determination in the case of Savannah Bank Ltd v Ajilo [1987] 2 NWLR (PT 57) 421, where FRA Williams contended that there is a distinction between direct grant and deemed granted land.
He further argued that deemed grant being originally owned by the holders does not require consent of the Governor to alienate. The Supreme Court disagreed, and held that consent is mandatory for both. The apex court noted that the Act does not admit of “two categories of right of occupancy, one subject to the provisions of the Act and the other outside its regulatory force.”
The transfer of customary right of occupancy is found under section 21 of the Act which provides that alienation of such right by assignment, mortgage, sublease or otherwise is unlawful without the consent of the Governor where the property is to be sold under the order of the court or in other cases without the approval of the appropriate local Government.
By the operation of this section, consent of the Governor is only required where a property held under customary right of occupancy is sold by the order of the court. In all other cases, the consent of the appropriate local government is sufficient.
Effect of alienation without consent
The consequences for alienating a right of occupancy without the requisite consent is captured by section 26 of the Act, which provides that any transaction which purports to confer on in any person any interest over land other than in accordance with the provisions of this Act shall be null and void.
In Solanke v Abed (1962) 1 ANLR 230, Unsworth F. J is of the considered view that where a statute not only declares a contract void but imposes a penalty for making the contract, is not merely void but is also illegal. The penalty prescribed for this offence is either fine or imprisonment under section 28 of the Act.
The literal meaning of the phrase “consent first had and obtained” may also seem to suggest that the consent must be obtained before the parties can commence negotiations. This understanding has been faulted by the Supreme Court in Awojugbagbe Light Ind. Ltd v P. N. Chinukwe & Others (1995) 4 NWLR (PT 390) 379, where it held that the mandatory provision of section 22 (1) does not prohibit the holder of a statutory right of occupancy from entering into some form of negotiations which may end with an agreement to be presented to the Governor for consent.
In Moses Ola & Others v Bank of the North (1992) 3 NWLR (PT 229 326, the Court of Appeal took the same view that the issue of consent only arises “when the sale or auction has already taken place.”
In the same vein, in International Textile Industries (Nigeria) Ltd v Aderemi (1999) NWLR (PT 614) 268, Supreme Court divided the transaction for the sale of land into two stages viz., the contract stage and the conveyancing stage, which are continuum in practice. The former is when the parties reach a binding agreement, while the latter is the pursuit of the consent, which validates the agreement.
It follows therefore that any agreement to alienate right in land is inchoate without the necessary consent.
Note that the Governor may give consent her/himself or delegate the power to the State Commissioner. Where the power is so delegated, the certificates shall be expressed to be granted on behalf of the Governor. Meanwhile, no corresponding power to delegate is granted to local governments.
Moreover, the Commissioner to whom such power is delegated cannot sub delegate the power. In U.B.N. PLC v Ayodare & Sons (Nig.) Ltd (2007) 13 NWLR (PT 1052) 567, where the letter of approval for consent was written by an Acting Chief Lands Officer of the Ministry, the Supreme Court held that it negatively affected the validity of the mortgage because by section 22 of the Act consent must be written and signed by the Commissioner for Lands as the Governor’s delegate not otherwise.
As seen above, consent is crucial to the validity of any land transaction and by section 22 of the Act it is the duty of the holder of the certificate of occupancy to procure the necessary consent. Where he fails to do so, can he rely on his own fault and plead illegality to avoid his obligations under the contract?
Obaseki JSC, in Savannah Bank v Ajilo is of the view that held he can, and he stated as follows:
Although the first plaintiff/respondent by the tenor of the Land Use Act committed the initial wrong by alienating his statutory right of occupancy without prior consent in writing of the Governor, the express provisions of the Act make it undesirable to invoke the maxim ex turpi causa non oritur actio and the equitable principle enshrined therein.
The above view has been sternly criticized by Professor Omotola who argued that there is nothing in the Act that prevents the application of the ex turpi causa maxim. Nonetheless, Obaseki’s view has since been overtaken by later judgements and the opinion of Apata JCA in Adedeji v National Bank of Nigeria Ltd [1989] 1 NWLR 212, where his Lordship expounded that:
Apart from the principle of law involved in this case, it is morally despicable for a person who has benefited from an agreement to turn round and say that the agreement is null and void.
The above view found support from the Supreme Court in Chief Belonwu Ugochukwu v Cooperative & Commerce Bank Nigeria Ltd [1996] 6 NWLR (PT 456) 524, where Belgore JSC held thus:
The appellant being the holder of the right of occupancy over the house, i.e. No. 239 Cameroun Road, Aba, was to seek consent and it is unconscionable for him to turn roundabout and maintain that the consent of the governor he obtained was flawed having received valuable consideration i.e. the loan from the respondent.
This decision was reinforced by another Supreme Court’s decision in Awojugbagbe Light Industries Ltd v P. N. Chinukwe & Others, where the apex court held that it is inequitable and morally despicable for the appellant, after obtaining a loan and after utilizing the same to allege that it is null and void.
Finally, it is submitted that the later decisions of the Supreme Court accord more with justice and reason. Moreover, it is trite in our law that no one benefits from his own wrong, nollus commodum capere postest de juria sua propia.
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