Danstarcher Turnkey Contractors LTD V. Union Bank Of Nigeria PLC (2015)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

SIDI DAUDA BAGE, J.C.A. (Delivering the Leading Judgment)

This appeal is against the judgment of the High Court of Lagos State, sitting at Lagos delivered by Honourable Justice A. A. Philips on the 20th of May, 2011 wherein the lower court entered judgment in favour of the Claimant (now Respondent) for the sum of N117,101,122.11k (One Hundred and Seventeen Million, One Hundred and One Thousand, One Hundred and Twenty-Two Naira, Eleven Kobo) at the interest rate of 21% per annum against Defendant (now Appellant).

According to a writ of summons dated and filed on 21st December, 2009, the Respondent (Plaintiff) sought the following reliefs against the Appellant (then Defendant) as follows:

“a. A refund of the unutilized rent paid to the Defendant in the sum of N117,101,122.11k (One Hundred and Seventeen Million, One Hundred and One Thousand, One Hundred and Twenty-Two Naira, Eleven Kobo) for the sublease of their Falomo Branch.

b. Interest on the said sum of N117,101,122.11k (One Hundred and Seventeen Million, One Hundred and One Thousand, One Hundred and Twenty-Two Naira, Eleven Kobo) at the rate of 22% per annum until the judgment sum is finally liquidated.

c. Solicitors fees of N11,710,122.00 (Eleven Million, Seven Hundred and Ten Thousand, One Hundred and Twelve Naira) being 10% of the unutilized rent of N117,101,122,11k (One Hundred and Seventeen Million, One Hundred and One Thousand, One Hundred and Twenty-Two Naira, Eleven Kobo).”

The Respondent also filed alongside the writ of summons and all other originating processes, an application dated 21st December, 2009 brought pursuant Order 11 Rule 1, Order 35 Rule 4 and Order 49 Rule 1 of the High Court of Lagos State Civil Procedure Rules wherein it prayed the court for the following orders:

“a. An Order of this Honourable Court entering final judgment in this suit in favour of the Claimant/Applicant herein as per his statement of claim filed in this suit.

b. And for such further order as this Honourable Court may deem fit to make in the circumstances.”

The Respondent had on or about the 26th day of February, 2008 paid the Appellant the sum of N135,116,667.67k (One Hundred and Thirty Five Million, One Hundred and Sixteen Thousand, Six Hundred and Sixty-Seven Naira, Sixty-Seven Kobo) being rent for a (10) ten year period pursuant to a lease agreement that subsisted between both parties, only for the Respondent’s branch to be evicted from the property on the 21st day of March, 2009 by an arm of the Lagos State Government which caused the Respondent and its customers untold hardship.

By virtue of a development agreement dated the 1st day of September, 1987 and a sublease agreement dated the 9th day of November, 1988, the Lagos State Development and Property Corporation (LSDPC) created a sublease of a landed property situate between Awolowo Road, Ikoyi and Raymond Njoku Street, Ikoyi, Lagos in favour of the Appellant for a term of 40 years, which ought to have expired on 30th day of August, 2028.

The said sublease agreement conferred on the Appellant a right to underlet, sublet or assign its interests under the sublease to any responsible, respectable person, firm or company on the condition and stipulated term within the stipulated period of the Appellant’s lease, which was exercised in favour of the Respondent.

Vide a sublease agreement which commenced on the 1st day of April, 1993, part of the premises was sublet to the Respondent for a period of 25 years with the Respondent paying the sum of N10,705,500.00 (Ten Million, Seven Hundred and Five Thousand, Five Hundred Naira only) representing the rent for an initial period of 15 years, with an agreement that the remaining 10th years would be subject to a rent review every five years. However upon negotiations, the Appellant requested that the full residue for ten (10) years be paid in full.

Sometime in 2007, the Appellant commenced moves towards the rent review and after a series of meetings, it was agreed that the rent be fixed at the sum of N13,511,666.67 (Thirteen Million, Five Hundred and Eleven Thousand, Six Hundred and Sixty-Six Naira, Sixty Seven Kobo) per annum gross and on or about the 26th day of February, 2008, the Respondent paid the sum of N135,116,667.67 (One Hundred and Thirty-Five Million, One Hundred and Sixteen Thousand, Six Hundred and Sixty-Seven Naira, Sixty-Seven Kobo) being rent for a ten year period.