Facts:

The appellant entered into an agreement with the respondent wherein it was agreed that the appellant would act as agent to secure a lease of property for the respondent in Lagos. It was agreed that the appellant would earn 7.5% of the lease as agency fee. It was also stated that the lease would be for three (3) years. Consequent upon the agreement, the appellant found a property situate at Plot 1230, Ahmadu Bello Way, Victoria Island, Lagos, for lease and negotiated with the owners. The appellant thereafter, sent a letter to the respondent stating that it has secured a 5,000 square metre property for lease at the rate of N32,000,000.00 (Thirty Two Million Naira) per annum. The respondent replied the letter and stated that it would accept the offer and lease 1,600 square meters of the premises comprising the ground and first floors. In addition, the respondent sent a cheque of N96,000,000.00 (Ninety Six Million Naira) for three years lease and two other cheques of N7,200,000.00 (Seven Million, Two Hundred Thousand Naira) each being 7.5% agency and legal fees for the appellant’s services.

The respondent could not take immediate possession of the property because the owners were still in occupation of the premises. When eventually the property was vacated, the appellant and the respondent went for inspection and discovered that the dimensions of the property were not up to 1,600 square meters. The respondent directed the appellant to renegotiate with the owners for expansion of the premises and an additional two years lease bringing the term to five years. The appellant carried out the instruction and consequently the premises was expanded and an additional two years granted in favour of the respondent at an additional fee of N51,000,000.00 (Fifty One Million Naira). The appellant made a request of its agency and legal fees of 7.5% each of the sum but the respondent refused to pay.

Feeling aggrieved, the appellant filed a suit against the respondent at the High Court of Lagos State claiming the sum of N7,670.475 (Seven Million, Six Hundred and Seventy Thousand, Four Hundred and Seventy Five Naira) being the agency and legal fees due to it from the transaction relating to the additional two years lease and the expansion of the premises. The appellant also claimed pre-judgment interest and costs. The respondent filed its defence and incorporated a counterclaim accusing the appellant of fraudulent misrepresentation as to the actual dimensions of the property. The matter went to trial and at the end of proceedings, the trial court dismissed the claim of the appellant and granted the counterclaim of the respondent. Dissatisfied, the appellant filed a notice of appeal at the Court of Appeal, Lagos Division urging the court to reverse the trial court.

The sole issue upon which the court resolved the appeal is whether in the absence of an enforceable contract between the parties, the appeal ought to be dismissed and the counterclaim upheld in favour of the respondent.