International Textile Industries (Nig) Ltd Vs Dr Ademola Oykanmi Aderemi & Ors (1999)

LAWGLOBAL HUB Lead Judgment Report

O. UWAIFO, J.S.C.

The property in dispute in this case is plot No. 98 at No.2 Abudu Smith Street, Victoria Island, Lagos. It is State land covered by Title Certificate No. LO5166 of 1963 which was leased to late Oba Adesoji Aderemi by the Governor of Lagos State under a deed of lease dated 4 June, 1963. It was developed by the said lessee and at his death, it became vested in the 1st to 4th respondents who are his executors/executrix (hereinafter called the landlords).

Sometime in February, 1986, the appellant indicated its interest in taking a sublease of the said property. The landlords, acting through their solicitors, made an offer by letter dated 18 February. 1986 (exhibit A-A2) to the appellant. The letter contained details which I do not need to state in full. ‘It is enough to say that the sublease was to be for ten years with an option for a further five years; the annual rent was to be N75.000.00 with effect from June 1, 1986, the first five years rent or N375.000.00 being payable in advance by the sublessee; and the landlords were to be responsible for the payment of the ground rent.

The letter stated that the property was offered in the condition in which it was, a detached two-storey house together with stewards’ quarters and garage, but that “you are permitted, at your own expense, to add to, alter or extend it and in other respects carry out all renovations and refurbishments you consider necessary to suit your intended use and taste, subject to you (sic) obtaining necessary planning approval and also subject to your submitting your proposals to us for our clients’ prior approval. In addition, there were the following two paragraphs:

“If you are in agreement with the above terms and conditions, we shall be grateful if you would kindly endorse the attached copy of this letter accordingly and return it to us. You have already deposited with us two cheques totaling N297.500.00. In returning to us the endorsed copy of this letter, you should please let us have also your cheque for the balance of the rent.

Kindly let us know whether you will directly instruct your own solicitor or we should instruct one on your behalf to prepare a draft sublease in accordance with the above terms and conditions.” This letter was marked ‘subject to contract’

In reaction , the appellant accepted the offer in its letter of 20 February, 1986 (exhibit B-B1 ) with some requests which included the limit of 10% increase in rent after the first five years, how to determine the rent for the option period, the landlords to bear the cost of erecting a wall fence and that all necessary approvals by the Lagos State Government to be obtained by the landlords. The landlords virtually consented by their letter dated 24 February, 1986 (exhibit C-C1) adding in their last two paragraphs:

“We have tried as much as possible to acceed (sic) to your various requests in order to bring this negotiation to completion. We trust that you would now kindly confirm your acceptance of our offer by sending us your cheque for the balance of the rent in the sum of N77,500.00.

You may then wish to pass copies of our two letters to your solicitors to enable them prepare a draft sublease for the approval of the parties.”

This letter was also marked ‘subject to contract’

Yet again, the appellant replied by letter dated 28 February, 1986 (exhibit D-D1) requesting a ceiling of 15% increase in rent in respect of the option period and offering to pay N21,250.00 in final settlement of the rent due owing to the uninhabitable condition of the property of which the landlords were said to have agreed to make funds available for renovation, but now the appellant said it was going to spend about N300,000.00 “on improvements which will ultimately revert to the Landlord after the lease period.” A cheque for the said N21,250.00 was actually forwarded to the landlords. The landlords by their letter of 28 February, 1986, (exhibit E-E5) accepted the said cheque for N21,250.00 and the suggested 15%; ceiling increase in rent for the option period. The letter ended with the following two paragraphs:

“We expect that you would endeavour to ensure that the refurbishment and improvements you propose would be carried out and completed within the four months of grace so that your sublease would commence on 1st July, 1986.

You should please instruct your solicitors to put in hand the preparation of the draft sublease agreement for approval of the parties and let us have the draft in due course.”

Again, this letter was marked ‘subject to contract’