Lexington International Insurance Co. Ltd V. Sola Holdings Ltd. (2006)

LawGlobal-Hub Lead Judgment Report

GALINJE, J.C.A.

The respondent herein is the Landlord of the premises lying and situate at No, 10 Turton Street, Lagos. By an agreement dated the 16th day of June 1996 between the appellant and the respondent, the appellant became the respondent’s tenant in respect of the first floor of the said premises at No.10 Turton Street, Lagos for a term of two years beginning from the 1st day of June 1996 at the rent of three hundred and fifteen thousand naira (N315,000.00) per annum. One of the conditions included in the agreement aforesaid was that the tenant would pay the rent for two years clear of all deductions.

By a letter dated 28th May 1996, the appellant paid rent for two years but withheld the sum of N63,000,00 as “Withholding Tax” from the and rent. The respondent, through its agent, Fine Shelter Trust Ltd, protested against the withholding of the sum of N63,000.00 and the matter was subsequently resolved when the appellant refunded the N63,000.00.

At the expiration of the two years, the appellant made payment of rent for one year. This time the appellant deducted N3,500,00 from the rent of N315,000.00 as withholding tax for that year, and in addition the appellant deducted N63,000.00 as withholding tax for the previous payment. The total deduction stood at N94,500.00.

This time the respondent protested without success, as a result it initiated a civil action at the Lagos State High Court in order to recover the money so deducted by the appellant. In its writ of summons and the statement of claim dated 10th March 1999 respectively the respondent set out its claims as follows:-

“The sum of N94,500.00 (Ninety four thousand, five hundred naira) being the total sum deducted by the defendant purportedly as ‘withholding tax’ from the net rent of N945,000.00 payable by the defendant to the plaintiff in respect of the first floor office accommodation occupied by the defendant as the plaintiff’s tenant for the period 1st June, 1996 to 3rd, May 1998 and from 1st June, 1998 to 31st May 1999 respectively.”

On being served with the particulars of the claim, the appellant brought an application by way of motion on notice, dated 6th day of April 1999 before that court in which it prayed for:-

“An order striking out the statement of claim and dismissing this suit in its entirety for disclosing no reasonable cause of action, frivolous, vexations and a gross abuse of the processes of this court.”

The respondent filed a counter affidavit and the motion was contested. After hearing both parties, the lower court held at page 5 of its ruling which is at page 35 of the record as follows:-

“I am therefore of the opinion that the defendant/appellant are (sic) obliged to the plaintiff, as no fraud could be established before me and under clause 3 of exhibit ‘A’ which is the tenancy agreement…”

Thereafter the lower court dismissed the application and dispensed with further proceedings in the suit. The appellant, being dissatisfied with the decision has appealed to this court by a notice of appeal dated 13th day of October 1999, on three grounds of appeal, which I reproduce hereunder without their particulars as follows:-

“(A) The learned Judge of the lower court erred in law when he dismissed the defendant/appellant’s application seeking the dismissal of the suit in its entirety and summarily (without trial) ordered the defendant to pay the plaintiff’s claim in this suit.

(B) The learned Judge of the lower court erred in law when he dismissed the plaintiff’s application seeking “inter alia” the dismissal of the suit after conceding that the cited statutory authorities are binding on the parties.

(C) the learned Judge of the lower court erred In law when he failed to make a pronouncement as to whether the plaintiff’s claim discloses a reasonable cause of action.”