Papersack Nigeria Limited V. Alhaji J. A. Odutola & Anor (2003)
LawGlobal-Hub Lead Judgment Report
JAMES OGENYI OGEBE, J.C.A.
By writ of summons filed on the 22nd July, 1993 in Lagos High Court Ikeja, the respondents commenced the suit against the appellant for arrears of rent, possession and mesne profit in respect of premises known as 44 Eric Moore Road, Iganmu Estate, Lagos.
Pleadings were exchanged and amended and the case proceeded to trial. At the end of the trial, the trial Judge entered judgment in favour of the respondents.
The appellant was dissatisfied with the decision of the lower court and appealed to this court. The learned counsel for the appellant filed a brief of argument on its behalf and formulated the following issues for determination:
“(a) Whether the lower court was right when it held that the defendant was a tenant-at-will.
(b) Whether the lower court was right when it held that the defendant’s tenancy was duly terminated by a valid notice to quit.
(c) Whether the lower court was right when it held that there was a valid assignment of the property the subject matter of the tenancy to the 2nd plaintiff thereby giving it status to issue the notice to quit which the court found to have been validly issued.
(d) Whether the lower court was right in its assessment of the sum if any, due to the plaintiff and interest thereon.
(e) Whether in the circumstances of this case wherein the tenancy had not been determined, the plaintiff is entitled to mesne profit over and above the agreed rent.”
The respondents also filed a brief and formulated five issues for determination as follows:
“(a) Is the lower court not right when it found that the defendant was a tenant-at-will?
(b) Is the lower court not right when it held the defendant’s tenancy was duly terminated by a valid notice to quit?
(c) Is the lower court not right when it held that there was a valid assignment of the property, the subject-matter of the tenancy to the 2nd plaintiff thereby giving it status to issue the notice to quit which the court found to have been validly issued?
(d) Is the lower court not right in its assessment of the sum if any, due to the plaintiffs and interest thereon?
(e) Where in the circumstances of this case the defendant’s tenancy has been determined, is the plaintiff not entitled to the mesne profit as found upon by the trial court?”
The two briefs have not set out the facts of the case by way of summary but have brought out the facts in the course of arguing the issues. From my reading of the pleadings and the record of appeal the facts of the case are not complicated.
The respondents’ case was that the appellant occupied the disputed property without any formal tenancy agreement in the year 1982 and started paying N200, 000.00rent annually.
The attempt to formalize the tenancy between the 1st respondent and the appellant in a lease did not work out but the appellant continued to occupy the property, as a tenant-at-will. Later the 1st respondent assigned the property to the 2nd respondent which eventually gave appellant notice to quit the property.
At the time of the suit the appellant was in arrears of rent and the respondents sued for the arrears as well as mesne profit because the appellant continued to occupy the property even after it had been given notice to quit.
The appellant’s case was that it indeed entered into the premises with the consent of the 1st respondent by an oral tenancy agreement, which commenced in June 1982. It was paying N200, 000.00 rent yearly to the 1st respondent as a yearly tenant. The 1st respondent tried to unilaterally increase the rent and the appellant resisted it.
The appellant claimed that it was not in arrears of rent but that the 1st respondent refused to claim rent from it. The appellant also claimed that its tenancy was not duly terminated by valid notice to quit.
On the first issue, the main complaint of the learned counsel for the appellant was that the evidence before the trial court could not sustain the finding that the appellant was a tenant-at-will. He referred to the admission of the 1st respondent that the appellant was a yearly tenant and the fact that the appellant was given six months notice to terminate the tenancy.
He said that the tenancy started on the 1st of June, 1982 and the annual rent was N200,000.00 which was being regularly paid by the appellant to the 1st respondent. There was therefore no justification for the court to hold that the appellant was a tenant-at-will.
He relied on the case of Pan Asian African Co. Ltd. v. National Insurance Corporation Nigeria Limited (1982) 9 SC 1, (1982) All NLR reprint 215.
The learned counsel for the respondents submitted that the court was right when it found that the appellant was a tenant-at-will from 1980 when Thorensen & Co. Ltd. ceased to be a tenant in the warehouse in the disputed property.
In paragraph 4 of the respondents’ amended statement of claim, the respondents averred that the appellant was simply an occupier of the warehouse and premises earlier let to Thorensen & Co. Nig. Ltd.
The impression created by the further amended statement of claim was that the appellant was not a tenant at all but he simply took over the property without the consent of the 1st respondent but in the appellant’s further amended statement of defence in paragraph 6 it averred as follows:
“In answer to paragraph 8 of the claim, the defendant avers that by consent of both parties, 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,”
By this averment, the appellant was contending that it was a yearly tenant of the 1st respondent. The 1st respondent under cross examination at page 155 of the record of appeal gave evidence as follows:
“As far as Blocks B & C are concerned, paper sack succeeded Thorensen as tenant. The defendants are one year tenant the N200, 000.00 per annum is not the current rent. I did not negotiate revision of rent.”
This admission supported the case of the appellant that it was a yearly tenant and it is reinforced by the fact that the respondent gave the appellant six months notice to quit. There was no doubt that the relationship between the appellant and 1st respondent as understood by both parties was a yearly tenancy. I therefore agree with the appellant that the trial court was wrong in holding that the appellant was a tenant at will.
On the second issue, the learned counsel for the appellant submitted that it was not disputed that the tenancy of the appellant runs from 1st June to 31st of May but the notice to quit exhibit E5 is dated the 23rd of July, 1992 and purported to terminate the tenancy on the 31st of January, 1993.
He submitted that notice to quit to be valid and effective to terminate a tenancy, must expire on the anniversary of the tenancy.
Notice to quit which purports to terminate the tenancy before the expiration of the term or in the middle of the current term is invalid.
He referred to the case of African Petroleum Ltd. v. Owodunni (1991) 8 NWLR (Pt.21O) 391 where the Supreme Court held that a notice to quit in order to be effective ought to determine the tenancy at the end of the current term.
In reply, the learned counsel for the respondent submitted that the bottom line in the present appeal is “what is the current term of appellant’s tenancy? He said that the evidence showed clearly that the appellant was a tenant at will and there was no fixed time of the tenancy with the result that the notices given for the appellant to quit were valid.
Exhibit P6 written to the appellant by the respondents referred to the appellant as a yearly tenant. This implies that there was a definite time within the year when the tenancy started and ended. The 1st respondent also admitted in his evidence that Chief Aboderin persuaded him to allow the appellant to be in possession of the property and that the appellant would move in 1982.
The appellant testified that it started paying rent to the 1st respondent from the 1st of June, 1982 for a yearly tenancy, which ended on the 31st of May each year. Consequently, I am of the view that the notice to quit given to the appellant which did not end on the 31st of May was invalid.
On the third issue, the learned counsel for the appellant contended that the notice to quit, which was issued on behalf of the 2nd respondent, could not be valid because no deed of assignment was proved to show that the property had been transferred from the 1st respondent to the 2nd respondent.
In reply, the learned counsel for the respondent submitted that the receipt for payment of rent issued by the 2nd respondent to the appellant was enough to show that the property had been transferred to the 2nd respondent. In the respondents’ further amended statement of claim paragraph 2 they averred as follows:
“The 2nd plaintiff is the assignee of the unexpired term and interest in the property at 44, Eric Moore Road, Iganmu Industrial Estate Lagos State. The plaintiff shall rely on Deed of assignment at the trial.”
The respondents averred that they would rely on the deed of assignment but no such evidence was tendered before the trial court.
Receipt of payment of rent issued to the appellant by the 2nd respondent could not by any means amount to proof of assignment.
In any event, since I have found that the notice was not properly issued, it does not matter whether it was issued by the 1st respondent or the 2nd respondent.
However, it is my view that the 2nd respondent could not validly issue the appellant notice to quit since there was no proof before the trial court that it owns the property in dispute.
On the fourth issue, the learned counsel for the appellant complained that the computation of the rent as made by the trial court was wrong. He said that the appellant was not a tenant to the 1st respondent between 1977 to 1982 and would not be responsible for the arrears of rent incurred by the previous tenant Thorensen Nigeria Limited.
He also said that for the period from 1983 to 1996 while appellant claimed to pay N800, 000.00 for the four years, the respondent said that only the sum of N600, 000.00 was paid and that the sum of N200,000.00 was the outstanding for the period of 1st June, 1984 to the 31st of May, 1985.
The appellant submitted that the only suggestion that it did not pay came from the respondents’ exhibit P3 which is full of discrepancies and should not be taken as accurate. The counsel said that it was inconsistent that appellant would pay rent from 1st of June, 1982 to the 31st of May, 1990 and leave out only the period of 1st of June 1984 to 31st May, 1985 and yet there was no letter of demand from the respondents.
The respondents’ counsel submitted that the award of N68, 419.95k for the period of 1977 to 1982 was justified. He said that the appellant should have produced receipt of payment of rent from the year 1984 to 1985 if indeed it had paid the rent.
On the fifth issue, the learned counsel for the appellant submitted that since the tenancy was not properly determined, the trial court was wrong to award N808, 861.64k per annum until possession is given up. This is because a claim for mesne profit cannot be sustained where the tenancy is not properly terminated.
The respondents’ counsel submitted that the trial Judge was right in awarding mesne profit because the determination of the tenancy was valid.
I shall take issues 4 and 5 together. I have already found that the tenancy of the appellant was not properly determined. It therefore follows that there can be no question of awarding mesne profit to the respondent.
Since it was clear from the evidence that the appellant took over the property from 1st June, 1982 there was no basis for the trial court to have ordered it to pay the arrears of rent incurred by a previous tenant.
However, I am of the view that the appellant by its inability to produce receipt of payment for the year 1984 to 1985 cannot claim that it had paid the rent for that year. At page 263 of the record of appeal the trial Judge made the following awards to the respondents:
“I refer to my earlier findings and held that the total amount owed by the defendant for the use and occupation of the property is made up as follows:
1. 1977-1982 – N68,419.95
2. 1983-1986 – 200,000.00
3. 1987-1989 – NIL
4. 1989 -1992 – 1,089,000.00
5. 1992-1994 – 1,617,143.23
N2,975,143.23
The plaintiffs did not state when the interest would commence. Refer to N.G.S.C. v. N.PA. (1990) 1 NWLR (Pt.129) 741 relied upon by plaintiff’s counsel and to the submission of defence counsel of the principle that interest is payable where the plaintiff had been kept out of his money. The defendant became aware of increase in the agreed rent of N200, 000.00 per annum in 1989.
The interest will therefore commence not since 1979 but since 1989.
Plaintiffs third claim is for mesne profit at the rate of N808, 861.64 per annum until possession is given up.
In view of the validity of the determination of the defendant’s tenancy at will, the plaintiffs are entitled to mesne profits.”
For all I have said in this judgment, I allow the appeal and set aside the judgment of the trial court as it relates to the termination of the tenancy. I vary the award for arrears of rent made above by the trial court as follows:
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.
3. The rent from 1989 to 1994 shall be at the rate of N200, 000.00 per annum as there was no proper increase of rent proved by the respondent.
4. 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.
This shall be the judgment of the lower court. Save for this variation the appeal against the award of arrears of rent is dismissed.
The parties are to bear their own costs of this appeal.
Other Citations: (2003)LCN/1443(CA)