Introduction
In a judgment that strengthens consumer protection in Nigeria’s real estate sector, the High Court of Lagos State has ruled in favour of Zikel Solutions Investment Limited (The Claimant), holding that a developer cannot rely on a blanket no‑refund policy where it lacks valid title to the property sold. Delivered on 1st June 2026, the decision underscores the Courts’ commitment to preventing unjust enrichment and ensuring fairness in land transactions.
Background
The Claimant in 2020 filed a Writ of Summons filed with Statement of Claim and other accompanied front loaded documents, praying the Court for the sum of N27,000,000.00 (Twenty-Seven Million Naira Only) owed to the Claimant by the Defendant among other reliefs. The suit centers on a sale of land agreement entered into by the parties sometime in 2019. The land was not delivered to the Claimant after the full purchase price of N27,000,000.00 (Twenty-Seven Million Naira Only) was paid, on the ground that the Lagos State government is rumoured to have an access road across the proposed land. An alternative land was offered to the Claimant; however, the Claimant rejected the land as it did not serve the original purpose intended by the Claimant. The Defendant only possessed a Memorandum of Understanding (MOU), and yet claimed that the “no refund policy” contained in the subscription form signed by the Claimant bound the Claimant and thus subjected the Claimant to forfeit the sum paid.
This newsletter contains the legal strategy employed by the firm to obtain the judgment and the legal issues addressed by the Court in delivering its judgment in favour of Zikel Solutions Ltd.
Legal Strategy
The firm believed in the suit’s success and pursued the following strategies to prove its case. The firm relied on three main legal issues in establishing the claims of the Claimant including the following
1. Illegality of the “No-refund policy” contained in the subscription form: the Claimants placed great reliance on the illegality of a no-refund policy through Suit No E/514/2021- PATRICK CHUKWUMA vs. PEACE MASS TRANSIT LTD and PHC/1302/CS/2023 KEZI BEST
OBULOR & ANOR vs. DANA AIRLINES LTD, where the courts held that no-refund policies were unlawful, arguing that the Defendant’s policy similarly contravened established legal principle.
2. The application of the FCCPA: The Claimants placed reliance on the provisions of the Federal Competition & Consumer Protection Act 2018 including Sec 127(2)(c) FCCPA 2018 and argued that such prohibit false, deceptive, or misleading representations in respect of goods and services.
3. Proof of title of the land sold by the Defendant and the alternative land offered: the firm placed a high dependency on the proof of title claimed to be possessed by the Defendant. During trial, the Claimant established that the Defendant possessed the memorandum of understanding with the previous owners of the land and had not executed any Deed of Assignment/Conveyance in respect of the land.
The Judgment
In determining this suit, the sole issue for determination raised by the Court is “whether the Claimant had adduced sufficient & credible evidence in proof of their claims to be entitled to the reliefs sought?”
1. The legality of a no-refund Policy- In deciding this issue, the Honourable Justice Sumonu interpreted the Federal Competition and Consumer Protection Act (FCCPA) 2018, holding that the FCCPA applies only to goods and services and is not intended to apply to transactions relating to transfer or alienation of interest of title in land or landed property. The Court however, noted that a no-refund policy is not ordinarily illegal and unenforceable, as parties maintain contractual autonomy and freedom to stipulate terms and conditions of their contract and it is not the duty of any Court to rewrite the contract for parties. See DELMAS vs. SUNNY OSITEX INTERNATIONAL LTD (2019) 9 NWLR (PT 1677) 305. The contractual freedom and autonomy will however, not avail a party when the no refund policy is used as a strategy to avoid liability even when the products so delivered are defective, unsafe and unfit for the purpose. Thus, the Court relying on various authorities including SAMUEL KASUWA vs. MRS. VERONICA SIMON ILIYA (2024) LPELR62627(CA) 1 at 36, paragraphs C-E held that the clause containing the no-refund policy in the suit is unlawful and void as it is tantamount to a man retaining the proceeds of labour of another.
2. The Illegality of a contract: In determining this issue of the legality of the contract, the Court stated that though not specifically pleaded, the law is settled that once issue of illegality is raised, such overrides all rules of pleadings. The Court held that where moneys are paid under an embryonic /ineffective contract, the owner is entitled to a refund, as no man is justified to retain the product of labour of another, as a man is only to retain that which is the exertion of his labour.
3. Proof of land ownership: In Conveyancing, а Memorandum of Understanding is not one of the recognised modes of proof of title to land in Nigeria and cannot be a good root of title. See D.O. IDUNDUN & ORS vs. DANIEL OKUMAGBА (1976) LPELR-1431(SC) 1 at 23-26. The Court further relied on the popular maxim of ‘”Nemo dat Quod non habet – No one gives that which he does not have” to deliver its judgment in favour of the Claimant. The Claimant in this suit was able to establish to the satisfaction of the Court that as at the time within which the parties entered into sale of land agreement, the Defendant possessed no good root of title. The Defendant in their cross-examination, admitted that no Deed in respect of the land in dispute and the alternative land offered was executed in their favour before or after the sale of land agreement.
4. Claims of Pre-judgment interest: The Court held that the provision of the law is that, unless such is expressly agreed by parties or could be inferred by mercantile custom or trade, interest must be reckoned from the date of the judgment or such other point of time after the date of the judgment. The Court further held that the award of interest upon Judgment can not be retroactive as backdating the date of judgment for interest to take effect prior to date of judgment. MONIER CONSTRUCTION COMPANY NIGERIA LIMITED vs. E. AGBEJURE ENTERPRISES LIMITED (2013) LPELR-21167(CA) 1 at 12, paragraphs C-E. CHIOMA EGONDU NWOSU-IHEME „JCA. The Court granted the claimant a 10% post judgment interest rate per annum from the day the judgment was delivered till the day the sum is liquidated.
Conclusion
The judgment in Zikel Solutions Investment Limited & Anor v. Virgin Landmarts Limited reaffirms important principles of Nigerian law relating to contractual fairness, proof of title, and unjust enrichment. The Court made it clear that a party cannot rely on a “no-refund policy” to retain money where it is unable to deliver the subject matter of the contract, particularly where it lacks a valid root of title.
The decision also serves as a reminder of the importance of conducting proper due diligence before entering into land transactions and ensuring that contractual terms are not used to defeat the ends of justice. Ultimately, the judgment provides valuable guidance for both property developers and prospective purchasers in Nigeria’s real estate sector.
This newsletter is provided for general information purposes only and does not constitute legal, regulatory, or professional advice. While reasonable care has been taken in preparing this publication, readers are advised not to rely on its contents as a substitute for specific legal advice. Institutions and individuals are encouraged to consult their legal, compliance, or other professional advisers to obtain advice tailored to their particular circumstances.
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