Alhaji J. A. Odutola & Anor V. Papersack Nigeria Limited (2006)

LAWGLOBAL HUB Lead Judgment Report

TOBI, J.S.C.

The res in this litigation is 44, Eric Moore Road, Iganmu Industrial Estate in Lagos State. The 1st plaintiff, now the 1st appellant, is the original owner of the property. He is the founder and principal shareholder of the 2nd plaintiff, now the 2nd appellant. The 2nd appellant is the assignee of the unexpired term and interest in the property with effect from 13th December, 1991. The 1st appellant is the Managing Director of the 2nd appellant. The case of the appellants is that Thoresen and Co. (Nig.) Ltd. rented the property and not Papersack Nigeria Limited. Although the tenancy expired in 1980, respondent still occuppied the property. They paid rent to the 1st appellant, though not regularly. The 1st appellant issued receipts for payments made to the respondent.

Following the failure on the part of the respondent to pay the rent, the appellants filed the action. They claimed possession, outstanding rent and mesne profit. The respondent made a counter-claim. The learned trial Judge gave judgment to the appellants as follows:

“1. The defendant shall give up possession of the warehouse and office premises situate at No. 44, Eric Moore Road, Iganmu Industrial Estate, Lagos FORTHWITH and shall pay mesne profit at the rate of N808,861.64 (Eight hundred and eight thousand, eight hundred and sixty-one naira, sixty-four kobo) from the 1st day of June, 1994 until possession is given up.

2. For the sum of N2,975,143.23 (Two million, nine hundred and seventy-five thousand, one hundred and forty-three naira, twenty-three kobo) with interest at the rate of 21 % per annum from the 1st day of June 1989 to the 31st day of May, 1994 being the amount owed by the defendant for the use and occupation of the plaintiffs warehouse and office premises at No. 44 Eric Moore Road, Iganmu Industrial Estate, Lagos State.

On appeal to the Court of Appeal, the court allowed the appeal. The judgment of the High Court was set aside. The court made the following orders:

“1. The arrears of rent of N68,419.95 for the period of 1977- 1982 is set aside.

2. The appellant shall pay rent of N200,000.00 for the period of 1st June 1984 to 31st May, 1985.

The rent from 1989 to 1994 shall I be at the rate of N20,000.00 per annum as there was no proper increase of rent proved by the respondent.

The total arrears of rent due as at 31st May, 1994 is the sum of N1,000,000.00 (One million naira only).

5. The order for payment of mesne profit is set aside.”

Dissatisfied, the appellants have come to the Supreme Court. Briefs were filed and duly exchanged. The appellants formulated four issues for determination as follows:

“1. Whether the learned Justices of the lower court were not wrong when they held that a yearly tenancy agreement existed between the appellants and the respondent.

2. Whether the learned Justices of the lower court were not wrong when they held that the notices given to the respondent to give up possession of the premises were not valid.
3. Whether the learned Justices of the lower court were not wrong when they held that evidence of issuance of receipt in the name of the 2nd appellant to the respondent in lieu of the deed of assignment could not by any means amount to proof of assignment of the property to the 2nd appellant.
4. Whether the learned Justices of the lower court were not wrong in holding that the appellants were not entitled to mesne profit on the ground that no valid notice to quit was issued when there was a continuous use and occupation of the premises by the respondent without the payment of rents.”

The respondent also formulated four issues for determination. I will not reproduce them here as they are substantially the same as those of the appellants.

At the hearing of the appeal, Professor S. A. Adesanya, learned Senior Advocate of Nigeria, for the appellants, withdrew issue No. 3 and it was accordingly struck out. That, in my view, is good judgment.

Taking issue No.1, learned Senior Advocate submitted that the evidence before the trial court established that the tenancy relationship between the parties was a tenancy at will. He relied on the evidence of the 1st appellant. He submitted on the evidence of the respondent that the respondent which originally came into occupation as an intruder or trespasser became a tenant at will of the 1st appellant after expiration of the extension of the term to 31/12/82 as contained in exhibit P2.

Relying on the case of Pan Asian African Co. Ltd. v. National Insurance Corporation (Nig.) Ltd. (1982) All NLR (Reprint) 229, Learned Senior Advocate submitted that holding over with the consent of the landlord made the respondent tenant at will. He referred to Law of Real Property by Megany and Wade (4th edition) at page 638 and the cases of Howard v. Shaw (1841) 8M and M and W118, and Wheeler v. Mercer (1957) AC 416 at 425. On the strength of exhibit D9, learned Senior Advocate argued that there was no agreement that could convert the tenancy at will relationship between the parties to a yearly tenancy. He disagreed with the position taken by the Court of Appeal that “a new yearly tenancy was entered into with the anniversary year commencing from 1st June, 1982 to 31st May of the following year and each year, at an increased rent of N200,000.00 per annum in respect of the demised premises.” Citing Okechukwu v. Onuorah (2001) FWLR 208; (2000) 15 NWLR (Pt.691) 597; and Osho v. Foreign Finance Corporation (1991) 4 NWLR (Pt.184) 157, learned Senior Advocate enumerated the requirements of a valid lease.