BOCAS NIGERIA LIMITED v. WEMABOD ESTATES LIMITED
(2016)LCN/8351(CA)
In The Court of Appeal of Nigeria
On Tuesday, the 22nd day of March, 2016
CA/L/108/09
RATIO
TENANCY LAW: FIXED TENANT AND PERIODIC TENANT; WHEN DOES A TENANT FOR A FIXED TERM BECOMES A PERIODIC TENANT
Cases of tenancy at will are common where a tenant for a fixed term holds over the property with consent of the landlord while negotiations for further lease are going on. The general rule is that if a tenant pays rent during this period, he becomes a periodic tenant, e.g. if he pays a year’s rent, then he is a yearly tenant.
In Odutola V. Papersack Nig. Ltd. (2006) 18 NWLR (Pt 1012) 470 SC, the landlord had permitted the tenant to stay on until 1982 on payment of money as compensation for use and occupation of a warehouse. The tenant stayed on until 1994 when the landlord commenced the action, Meanwhile, the tenant paid annually until 1994 when it fell into arrears in its payment. The landlord served a seven-day notice on the tenant on the ground that it was a tenant at will, and thereafter sued to recover possession and arrears for the sum payable for the tenant’s use and occupation of the premises. The tenant argued that the tenancy was converted from a tenancy at will to a yearly tenancy by virtue of the annual payments it made. The trial Court held that it was a tenant at will, and that its tenancy was determined by the seven-day notice served by the landlord. This Court held that the tenancy was not properly determined, and allowed the Appeal. In unanimously allowing the appeal to it, the Supreme Court per Onnoghen, JSC, held thus –
”- – -From the expiration of the extended tenancy of THORESEN & CO. (NIG) LTD, the original tenant of the 1st Appellant the Respondent was a trespasser on the property, However from the time the Respondent started to pay rent which was on yearly basis, and in advance a yearly tenancy by conduct of the Parties may have been created and continued in existence until when the Respondent stopped paying the rent as and when due and or failed to secure a tenancy agreement for the property – – -From the moment a year?’s rent became due and payable by the Respondent but remained unpaid, the yearly tenancy, if any, created by the conduct of the parties thereto came to an end by effluxion of time and the Respondent thereby became a tenant at will of the 1st Appellant by continuing in possession of the property. In law we describe the Respondent at that stage as holding over the property and in that capacity it became a tenant at will. The situation of failure to pay rent continued from 1991 to 1997 yet learned counsel and the Court of Appeal contend that there was a yearly tenancy, – – – – It is not disputed that a tenancy at will is determinable by seven days’ notice of intention of the landlord to recover possession which was duly complied with in this case. Even if six months’ notice was given it does not, per se, change the nature and legal character of the tenancy in issue”.
As we can see, in Odutola v. Papersack Nig. Ltd. (supra), the yearly tenancy was converted to a tenancy at will when the tenant stopped paying its rent. In this case, Parties are not saying that the tenancy is not a yearly tenancy; however, the Appellant contends that having spent more than the agreed rent on repairs and renovations, it cannot be held to be in arrears of rent. PER. AMINA ADAMU AUGIE, J.C.A.
TENANCY LAW: RENT; WHETHER MONEY EXPENDED ON ANY REPAIRS CAN BE CONVERTED INTO RENT AND THE MEANING OF ‘RENT’
The issue under consideration, which touches on the Respondent’s claim, is simply whether money expended on any repairs can be converted into rent which is payment that a tenant is bound by contract to make to his landlord for the use of the property let – see Oduye v. Nigeria Airways Ltd. (1987) 2 NWLR (Pt 55) 126 & Olaniyan v. Shokunbi (1997) 6 NWLR (Pt.509) 447, wherein Uwaifo, JSC (as he then was) very aptly described rent as follows –
“Rent is a compensation paid to a landlord by a tenant for the use of his land demised. It is a profit earned by the landlord, which must be certain, or capable of being reduced to a certainty by either party, and must issue out of the property granted – – In Property Holding Co. Ltd. v. Clarke (1945) 1 All ER 165 at 173, Evershed, L. J, approved a passage in Holdsworth History of England – ‘In modern law rent is not conceived of as a thing, but rather as a payment, which the tenant is bound by his contract to make to his landlord?. From all indications, rent is in a class of its own, and it also stands very tall because the agreement to pay the rent outshines any other considerations. In other words, a tenant is not at liberty to engage in a rent strike because its covenant to pay rent is independent of the landlord’s obligation to effect repairs – see Oke V. Salako (1972) 11 CCHCJ 88, wherein Kassim, J., held –
“- – A tenant’s covenant to pay rent is independent of the landlord’s covenant to repair the premises; the tenant is not discharged from his obligation to pay rent merely because his landlord is unwilling to fulfill his obligation?.
See also Lee-Parker v. Izzet [1991] 3 All ER 1097, where Goff J., declared – “- – So far as the repairs are within the express or implied covenants of the lessor the Defendants are entitled to recoup themselves out of future rents and defend any action for payment thereof. It does not follow: However that the full amount expended by the [Defendants] on such repairs can properly be treated as payment of rent. It is a question of fact in every case whether and to what extent the expenditure was proper. For the sake of avoiding misunderstanding I must add that [the above] right can only be exercised when and so far as the landlord is in breach and any necessary notice must have been given to him. Insofar as the repairs fall outside the landlord’s covenants in the lease there can in my judgment be no set-off against the Plaintiffs.’ [See Law of landlord and Tenants, Cases and Comments] Prof. Emeka Chianu explained in Law of Landlord and Tenant, 2nd Ed., that. “Experience teaches that many landlords are not enthusiastic to effect repairs, especially where they do not reside in the demised premises. Where a tenant is compelled to effect repairs, which are the landlord’s to effect, the ideal remedy from the tenant’s point of view is a self-help remedy which allows him to cease paying rent and remain on the premises until the landlord comes to terms or one which allows him to abandon the premises without fear that the landlord can sue him for rent once he has left, of boxer still an election between the two. Sadly, in the absence of express provisions to the contrary; a tenant cannot do any of these as most lease covenants are independent. A tenants covenant to pay rent is not dependent on his landlord fulfillment of his repairing obligation. A system of law in which the obligation to pay rent is independent of any obligation of the landlord to provide and maintain habitable premises can be defended on the ground that the more expensive it is for landlords to evict tenants, who do not pay their rent, the higher the cost of housing will be for those who do”. So, rent is rent, and in the absence of express provisions to the contrary, any amount expended on repairs cannot be converted to rent. PER. AMINA ADAMU AUGIE, J.C.A.
TENANCY LAW: CONDITIONS FOR A TENANT TO FULFIL IN A CLAIM FOR MONEY EXPENDED TO EFFECT ANY REPAIRS THE LANDLORD WAS UNDER AN OBLIGATION TO EFFECT
The tenant is obliged to pay his rent as and when due. But all is not lost, he can set-off, in his landlord’s action, a claim for money expended to effect any repairs the landlord was under an obligation to effect, on the following conditions –
– He must prove that he informed his landlord of the disrepair;
– He gave him reasonable time to effect the repair;
– The repair he effected is of good quality; and
-The sum he expended to effect the repair is reasonable.
British Anzani (Felixstowe) Ltd. v. Int Marine Management (UK) Ltd. (1979) 2 All E.R. 1063 (at P.186 of Chianu’s Book) where Forbes, J., held – “There are at least two sets of circumstances in which at common law there can be a set-off against rent one where the tenant expends money on repairs to the demised premises, which the landlord has covenanted to carry out, but in breach has failed to do so (at any rate where the breach significantly affects the use of the premises), and the other where the tenant has paid money at the request of the landlord in respect of some obligation of the landlord connected with the land demised. To this proposition there must be added two riders. First that as the landlords obligation to repair premises demised does not arise until the tenant has notified him of want of repair, such notification must have been given before the set-off can arise; and secondly that the set-off must be for a sum, which is not to be regarded as unliquidated damages, that is it is a sum certain, which has actually been paid and in addition, its quantum has either been acknowledged by the landlord or in some other way can no longer be disputed by him, as for instance, if it is the subject of an award on a submission to arbitration”. PER. AMINA ADAMU AUGIE, J.C.A.
JUSTICES
AMINA ADAMU AUGIE Justice of The Court of Appeal of Nigeria
CHINWE EUGENIA IYIZOBA Justice of The Court of Appeal of Nigeria
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO Justice of The Court of Appeal of Nigeria
Between
BOCAS NIGERIA LIMITED Appellant(s)
AND
WEMABOD ESTATES LIMITED Respondent(s)
AMINA ADAMU AUGIE, J.C.A.(Delivering the Leading Judgment):
This Appeal stems from a tenancy dispute between the Parties involving a property at 27 Adele Street, Apapa, Lagos. The Appellant took possession of the property in 1996, and paid its rent regularly until 2001 when it stopped paying on the ground that it had expended on the repairs of the property, and was entitled to stay on for at least 5 years before paying any rent at all.
Fed up with its excuses for not paying rent, the Respondent briefed its Solicitor to recover the arrears of rent and possession of the premises. The Solicitor issued and served it with a Notice to Quit dated 20/4/2005, and when the Appellant refused to vacate, the Solicitor issued and served it with a second Notice to Quit dated 1/11/2005. Thereafter, the Respondent instituted an action at the Lagos State High Court, wherein it claimed –
a) An immediate possession of the premises known as 27, Adele Street Apapa, Lagos forthwith.
b) Arrears of rent of N800,000.00 from 1/11/2001 to 31/10/2005 at the rate of N200,000.00 per annum.
c) Mesne profit at the rate of N16,666.66 per month from
November 2005 until possession is yielded and also cost of the Suit.
Upon being served, the Appellant entered appearance and also counter-claimed as follows in paragraphs 16-20 of its Amended Statement of Defence/Counter-Claim-
16. A Declaration that the Defendant [Appellant herein] is entitled to deduct a total of N1,083,100 being the total money expended on the repairs of property No.27 Adele Road, Apapa Lagos.
17. An order that the Defendant [Appellant herein] is entitled to stay for at least 5 years, that is from 2001 to 2006 at the subsisting annual rent of N200,000.00 per annum before paying any rent at all.
18. An Order that Claimant [Respondent herein] is not entitled to –
(a) Possession of the premises known as 27, Adele Road Apapa Lagos having allowed the Defendant [Appellant herein] to alter his position through its approval of the repairs and conduct only to renege.
(b) To any arrears of rent
(c) To any Mesne Profit
19. A Declaration that the Claimant [Respondent herein] has clearly breached its responsibilities under the terms of the offer of lease to the Defendant where the landlord was supposed to have
kept the external structure in good repairs, including the roof, boundary fence, and roadways and to be responsible for external decorations as well as to clear and light the stairways and common path of the building.
20. A Declaration that the agreement reached at the September 24, 1996 meeting at which the Defendant [Appellant herein] was expected to carry out both immediate and subsequent repairs on the property constitutes an approval.
After Pre-trial Conference, the Respondent opened its case on 27/11/2007, and called two Witnesses, Olufunmilola Akerele, an Estate Surveyor with it, who testified as CW1, and tendered five Exhibits in evidence, including –
– Exhibit C and C1 – Notice to Quit dated 20/4/2005 and Notice to Tenant of Owner’s Intention to Apply to Court to Recover Possession dated 1/11/2005 respectively
– Exhibit D – A Document titled “MINUTES OF THE MEETING HELD IN RESPECT OF REGULARISATION OF TENANCY AT 27 ADELE ROAD. APAPA FOR BOCAS GROUP OF COMPANIES ON SEPTEMBER 24, 1996
CW2 is Mr. Gabriel Akindele, and he also an Estate Surveyor, who works with the Respondent. He tendered three
Exhibits, including –
– Exhibit G and G1 – Letters from the Respondent’s Solicitor – Akin Olawore & Co. to the Appellant dated 12/5/2003 and 17/3/2003 respectively
– Exhibit H – A letter titled ‘REGULARISATION/OFFER OF LEASE ON PROPERTY AT 27 ADELE ROAD APAPA?, and dated 4/10/1996.
Appellant opened its case on 3/4/2008. It called only its Managing Director [MD], Mr. Benjamin Okechukwu Osanmor, who testified as DW1, and tendered Exhibits, including Exhibits J and J1, a letter dated 8/11/2000 with vouchers attached thereto, from the Appellant to the Respondent, concerning repairs done.
In his judgment delivered on 26/9/2008, the learned trial Judge, Taiwo, J., held –
“The tendered Exhibit J and J1 includes two cash vouchers for the sums of N800,000 and N283,100 allegedly paid to Weaver Bird Construction for the renovation at the premises, which included construction of boys quarters, toilet and bath, raising of backward, digging of soak away pit and plastering digging and expansion of outside gutter and major construction in the main building. From the two Exhibits and the testimony of DW2 (sic), it is clear
that he allegedly carried out major renovation of the property without consent of the landlord. The items listed above are external renovations, which ordinarily ought to be done by the landlord. Therefore, the Defendant has to prove that these renovations were actually done. This in my view, he has failed to do. There are no photographs of the state of the premises before and after renovation, no receipts by the Contactor neither did he call the contractor to testify. In the light of the above, I am of the view that the Defendant has failed to prove his counterclaim and is, therefore, not entitled to the sum claimed. I am, however, satisfied that the Claimant has proved its case for possession arrears of rent and mesne profit?.
Dissatisfied with the Lower Court’s decision, the Appellant appealed to this Court with a Notice of Appeal containing 7 Grounds of Appeal, and it distilled five Issues for Determination in its Brief prepared by Oluwasanya Odunayo Ayeni, Esq. i.e. –
(1) Has the learned Trial Judge jurisdiction to hear the case at all in view of the defect of Exhibit C (the notice to quit), which is the basis on which the claim for
possession is anchored ?
(2) Can the Appellant be legally held to be in areas of rent when he had spent over 1 Million Naira on repairs and renovation which repairs and renovations were authorized by the Respondent?
(3) When is the actual commencement date of the tenancy of the Appellant in view of the provisions of Exhibits D and H?
(4) Can it be rightly said that the Appellant tuned a tenant at will by holding over the premises?
(5) Did the judgment of the lower Court address the claims of the Appellant in its counterclaim?
The Respondent, however, submitted in its Brief of argument prepared by S. A. Adeyemo, Esq., that the three Issues that call for determination are –
1. Whether the learned trial judge has the jurisdiction to hear the case and whether the trial judge was right to have held that the Appellant?s tenancy commences on 7th day of November 1996.
2. Whether the repairs said to have been carried out by the Appellant on the building without the approval of the Respondent can automatically turn or stand as rent or arrear of rent.
3. Whether the learned trial judge was right to have held that the Appellant
failed to prove his Counter-Claim and therefore not entitled to the sum claimed and whether the trial judge was right to have held that the yearly tenancy between the Appellant and the Respondent was converted to a tenancy at will when the Appellant failed to pay its rent.
Clearly, the Respondent’s Issues 1 & 3 raise 2 questions each. In my view, the questions in Issue 3 are incongruous together because the first relates to its Counter-Claim, and the second to the main claim. A counter-claim stands on its own and is a distinct and separate action from a main claim.
?Even so, the importance of jurisdiction can never be downplayed since it is the nerve center and foundation of adjudication, which the Court must first decide before delving into merits of the case or appeal as the case may be. Thus, I will deal with the issue of jurisdiction first in resolving this Appeal, and this would entail a close look at the relevant Exhibits before the Court.
Exhibit D is Minutes of a Meeting held on 24/9/1996, and part of it reads – –
“- – The sub-tenant – – went further that the property is in a state of total despair, which calls for huge capital for repairs
and renovation of leaking roof, painting replacement of facia boards and eaves etc. CEST [Controller of Estates] stated categorically that the property would be let on FRI and as it is. On arrears, Chief Osamor promised that he would convince Mr. Willie Emeogo to settle them and that he would pay 50% of it if Mr. Emeogo failed. – – — Finally he made an offer of N100,000.00 per annum for the building arguing that a lot of money would be spent in repairs and renovation of the property. Controller of Estates picked him up quickly that the offer fell below the expectation of the Management and was unacceptable. Having argued for a while the sitting resolved as follows:
Agreed Rent – N200,000.00 per annum
Term – 2 (Two) Years certain with effect from 1st July 1996,
While the immediate and subsequent repair should be carried out by the Tenant?.
Exhibit H dated 4/10/1996, and titled REGULARISATION/OFFER OF LEASE ON PROPERTY AT 27 ADELE ROAD, APAPA, is more specific; it reads –
‘With reference to the meeting held on 24/9/1996 in respect of the above issue, we are pleased to make an offer to you under the following terms
and conditions:
PREMISES : 27 Adele Road Apapa
TERM : 2(Two) years certain with effect from 1st July, 1996.
RENT ” N200,000 per annum payable yearly in advance.
TENANTS RESPONSIBILITIES
c) To maintain the interior of the demised premises including all fixtures and fittings whether Landlord?s or tenant?s in good repair and tenantable conditions (fair, wear and tear exempted) and to redecorate the interior of the demised premises with such coats as the land lord may approve every two years of lease and at the expiration yield up the premises in a tenantable condition.
d) To provide all internal partition required and light fitting and any other tenant?s fixture (subject to the Landlord?s approval first obtained in writing).
g) Not to alter the demised premises without the landlord?s consent formally obtained in writing.
LANDLORD?S RESPONSIBILITIES
a) To keep the external structure in good repairs including boundary fence and roadway and to be responsible for external decorations.
b) To clear and light the stairways and common parts of the building
c) To
pay the rent reserved under the Headlease.
d) To insure the property against fire.
e) To observe the covenants contained in the Headlease.
f) The Landlord shall reserve the right of re-entry and re-possession of the rent reserved remains unpaid for six (6) months after the due date.
If the above terms and conditions are acceptable to you, please endorse the attached copy of this letter and send same to us with a bank certified cheque for the sum of N212,500.00 only covering rent and other charges itemized above. This offer lapses 14 days from the date of issue if the payment is not made”.
In arriving at its decision in favour of the Respondent, the lower Court held-
?It is my humble view that the terms of the tenancy agreement are clearly stated in Exhibit H and the conduct of the Parties. The Claimant’s Witnesses have stated in that the Defendant was paying rent until 2001 when it refused to pay rent. Therefore, the Defendant was in possession of the property subject matter of this Suit from 1996 paying its yearly rent of N200,000 until 2001 when the Defendant stopped paying rent. The Defendant in paragraph 2 of the
Amended Statement of Defence and Counter-Claim stated that the Defendant started deducting the amount expended on the repairs of the property from 2001. This averment confirms the Claimant?s assertion that the Defendant stopped payment of rent in 2001. The issue to be determined now is whether the tenancy of the Defendant has been legally determined. I have resolved from the oral and documentary, evident before the Court that the Defendant?s tenancy commenced from 1/11/1996 at a yearly rent of N200,000. I am also of the view that Exhibit H. the offer of lease on the property contain the relevant terms and conditions of the lease agreement between the parties. Exhibit H contains all the ingredients of a lease except that it is silent on the mode of determination of the lease. Parties, however by their conduct adopted the terms in Exhibit H and the Defendant became the Claimant’s tenant on 1/11/1996. – – The Parties entered into a yearly tenancy from 1996. The Defendant stopped paying rent in 2001 and from the moment a yearly rent (sic) because the tenant was in breach of the agreement and by virtue of Clause (f) under the landlord’s Responsibility in
Exhibit H, the landlord had the right of re-entry and re-possession. Clause (f) states – – – Therefore, the Defendant’s yearly rent remained unpaid for six months, the lease will come to an end once the landlord gives notice of the breach of the agreement and at will indicates his intention to re-enter and take possession. – – The Parties by their conduct created a yearly tenancy, which was converted when the Defendant failed to pay rent. – — The tenant has been holding over since 2001 when he stopped paying rent regardless of his reasons for not paying the said rent. — Thus, all the Claimant needed to serve on the Defendant to determine the tenancy was a 7-days’ Notice – – CW1 testified that she served the Defendant with a 7-days’ Notice on 1/11/2005 at the premises at 3pm. Therefore, it is my view that the Defendant?s tenancy was effectively determined on that day”.
The lower Court found from oral and documentary evidence before it that –
– The Parties created a yearly tenancy:
– The tenancy commenced on 1/11/1996 and NOT 1/7/1996;
– The Respondent paid rent from 1996 to 2001:
– The tenancy converted to a tenancy at
will when the Respondent stopped paying rent in 2001:
– 7-days’ Notice is sufficient to determine the tenancy; and
– The tenancy was effectively determined on 1/11/2005.
In urging us to set aside the lower Court’s decision, the Appellant submitted that the regularity or validity of the requisite notices and/or service of the notices on the other party is a condition precedent to an order for possession being made, so the issue of validity of Notice to Quit served on it goes to the Court’s jurisdiction – Hassan V. Okesiji (1977) 11 CCHCJ 2573 cited; that the issue is so fundamental that the Court must address its mind to it whether or not it is raised – Oyebanji v. Reg. Trustees of the Nigerian Branch of SADR Ajuman Ahmadiya Qadian (No1) (1974) 5 CCHCJ 787; that what is required is that notice to quit shall be given to tally with the anniversary of a tenancy, so Exhibit C dated 25/4/2005 cannot be a valid notice to quit for a tenancy with anniversary date of 1st July, and 6 months’ notice required by law that must tally with the anniversary had not been given; and that the Court can even raise this issue suo motu, and if it is satisfied that
there is non-compliance with the statutory notice, the Court is bound to decline jurisdiction – Oyebanyi v. Registered Trustees of SADR (supra).
It argued under its Issue (4) that having spent more than the agreed rent on repairs/renovation, it cannot be held to be in arrears of rent; that issue of holding over will only arise when a tenant fails to pay his rent and retains the premises; that as at the time of the commencement of this suit, it remained a yearly tenant, and the Court cannot on its own deem it a tenant at will without evidence of such, and if a tenant at will, it would be entitled to a week’s notice to quit not 5 months – Keseruani V. Technical Products Nigeria Ltd (1972) 11 CCHCJ 80; and that by the notice to quit given to it and the evidence, it cannot be regarded as a tenant at will.
The Respondent, on its part, submitted that in determining this issue, recourse can only be had to the Writ of Summons and Statement of Claim; that the Respondent’s claim before the lower Court was a valid Landlord and Tenant claim, having regard to the Lagos State Tenancy Law 2011; that the lower Court correctly determined and resolved the issue during
trial, and it has jurisdiction to entertain and determine Respondent’s Suit – A.W. (Nig.) Ltd. V. Superman Time (Nig) (2006) 6 NWLR (Pt 922) 563, and that it was right to hold that the tenancy commenced on 1/11/1996 because the Respondent did not deny, controvert or contradict same in its pleadings.
It also referred us to DW1’s admission in Exhibit I that he took the property on lease on behalf of the Respondent ?in November 1996?, and his identification of Exhibit G, as the letter of its former solicitor, which reads-
“We act as Solicitors to BOCAS GROUP OF COMPANIES hereinafter referred to as ?Our Client” and write in reference the above property. For your information, our client came into possession of the above property in October 1996 as a yearly tenant of Wemabod Estate Ltd. with the first year tenancy coming into effect on 1/11/1996, and ever since then has remained in undisturbed, possession of the said property till date – – -”
And submitted that it is trite law that whatever is admitted needs no proof – Obimiami Bricks & Sons (Nig.) Ltd. V. ACB (1992) 3 NWLR (Pt.229) 260; and that it is also
settled that Parties are bound by their pleadings ? Honika Saw Mill Nig. Ltd. V. Hoff (1994) 2 NWLR (Pt.326) 252 SC therefore, the lower Court was right to hold that the tenancy commenced on 1/11/1996.
As to the second question under its Issue 3, it argued that from the moment the Appellant stopped paying rent it was in breach of their Agreement, and by virtue of said Clause (f), it had the right of re-entry and re-possession; that the Appellant’s yearly rent remained unpaid for 6 months; and that the lower Court was right to hold that by its conduct, its yearly tenancy was converted to a tenancy at will, and the 7 days’ notice was properly served.
The Appellant filed a Reply Brief wherein it reacted to two points of law arising from the Respondent’s Brief of Argument, which are as follows-
1. Whether there is a difference between the date of possession and the date of commencement of the tenancy?
2. Whether the Appellant who presented a different position in the said Exhibit D can be said not to have controverted the position that the commencement date of the tenancy was 1/11/1996?
In answer to Question 1, it submitted that in
law, the commencement date of an agreement need not be the date possession was taken of the property -Bosah V. Oii (2002) 23 WRN 124, and it had shown via Exhibit D that the commencement date was different from the date possession was taken.
As to Question 2. it submitted that the Appellant made heavy weather of the fact that it did not controvert or contradict the evidence before the lower Court that the tenancy commenced on 1/11/1996, and argued that this is an obvious misapplication of the law in Obimiami Bricks & Sons Ltd. v. ACB (supra) as it had shown via Exhibit D that the commencement date was not 1/11/1996, and, thus, effectively controverted the said position.
Apparently, there is a dearth of case law on this subject, particularly appellate decisions, as most of the tenancy disputes in this Country do not get to come on appeal to this Court not to mention to the Supreme Court. However, there are a number of books to tap from but that is not to say that I will accept their avid contributions to the law, hook, line and sinker, because such books that explain and review general principles of law, which buttress a Party’s
position in a law suit, do not have any legal effect.
Be that as it may, there are 3 main types of tenancy, tenancy at will, periodic tenancy and fixed term (or term certain).
Cases of tenancy at will are common where a tenant for a fixed term holds over the property with consent of the landlord while negotiations for further lease are going on. The general rule is that if a tenant pays rent during this period, he becomes a periodic tenant, e.g. if he pays a year’s rent, then he is a yearly tenant.
In Odutola V. Papersack Nig. Ltd. (2006) 18 NWLR (Pt 1012) 470 SC, the landlord had permitted the tenant to stay on until 1982 on payment of money as compensation for use and occupation of a warehouse. The tenant stayed on until 1994 when the landlord commenced the action, Meanwhile, the tenant paid annually until 1994 when it fell into arrears in its payment. The landlord served a seven-day notice on the tenant on the ground that it was a tenant at will, and thereafter sued to recover possession and arrears for the sum payable for the tenant’s use and occupation of the premises. The tenant argued that the tenancy was converted from a tenancy at will to a
yearly tenancy by virtue of the annual payments it made. The trial Court held that it was a tenant at will, and that its tenancy was determined by the seven-day notice served by the landlord. This Court held that the tenancy was not properly determined, and allowed the Appeal. In unanimously allowing the appeal to it, the Supreme Court per Onnoghen, JSC, held thus –
”- – -From the expiration of the extended tenancy of THORESEN & CO. (NIG) LTD, the original tenant of the 1st Appellant the Respondent was a trespasser on the property, However from the time the Respondent started to pay rent which was on yearly basis, and in advance a yearly tenancy by conduct of the Parties may have been created and continued in existence until when the Respondent stopped paying the rent as and when due and or failed to secure a tenancy agreement for the property – – -From the moment a year?’s rent became due and payable by the Respondent but remained unpaid, the yearly tenancy, if any, created by the conduct of the parties thereto came to an end by effluxion of time and the Respondent thereby became a tenant at will of the 1st Appellant by continuing in
possession of the property. In law we describe the Respondent at that stage as holding over the property and in that capacity it became a tenant at will. The situation of failure to pay rent continued from 1991 to 1997 yet learned counsel and the Court of Appeal contend that there was a yearly tenancy, – – – – It is not disputed that a tenancy at will is determinable by seven days’ notice of intention of the landlord to recover possession which was duly complied with in this case. Even if six months’ notice was given it does not, per se, change the nature and legal character of the tenancy in issue”.
As we can see, in Odutola v. Papersack Nig. Ltd. (supra), the yearly tenancy was converted to a tenancy at will when the tenant stopped paying its rent. In this case, Parties are not saying that the tenancy is not a yearly tenancy; however, the Appellant contends that having spent more than the agreed rent on repairs and renovations, it cannot be held to be in arrears of rent.
It submitted under Issue (2) that it tendered evidence of repairs and renovations totaling N1,083,100.00, so the Respondent has N283,100 to balance it, and Respondent’s argument
that it did not get written approval from it to do so does not hold water in view of the provisions in Exhibit D. It adopted these arguments in Issue (4) and further submitted that with Exhibit D, it did not need any further authorization from the Respondent to carry out the said repairs and renovations of the property and that the said Exhibit D gives it, as the tenant, the obligation to effect both present and future repairs and renovations of the property. We were urged to so hold.
The Respondent said that it could not see, find or draw a conclusion, where or how it was stated, written or so agreed by the Parties that such repairs could be converted to rent or arrears of rent” in that said Exhibit H, which contains terms and conditions of the tenancy. Referring to paragraph (c), (d) & (g) of the Tenant’s Responsibilities and paragraph (a) & (b) of Landlord’s Responsibilities it added that Appellant is obligated not to alter the premises without its consent formally obtained in writing; and that –
“No such written approval was given to reconstruct the premises by building a toilet and bathroom in the boy’s quarters and changing the
tiles and ceiling. The repairs by the Appellant are not repairs but alteration and reconstruction of the premises to meet its taste and not to put the premises in tenantable condition. – – – The Appellant did all the above mentioned repairs without the written approval of the landlord and the said repairs and/or constructions were said to have been carried out to its taste to fit its business, and such repairs/constructions should not stand or use in replacement of rent and arrears of rent.
The lower Court was right when it held that the Appellant is liable to the Respondents claim and it?s (the Appellant is counter-claim failed”.
?
Obviously, the issue of whether the Appellant got approval to effect repairs and whether it proved that it did effect repairs, relates to its counter-claim. The issue under consideration, which touches on the Respondent’s claim, is simply whether money expended on any repairs can be converted into rent which is payment that a tenant is bound by contract to make to his landlord for the use of the property let – see Oduye v. Nigeria Airways Ltd. (1987) 2 NWLR (Pt 55) 126 & Olaniyan v. Shokunbi (1997) 6 NWLR
(Pt.509) 447, wherein Uwaifo, JSC (as he then was) very aptly described rent as follows –
“Rent is a compensation paid to a landlord by a tenant for the use of his land demised. It is a profit earned by the landlord, which must be certain, or capable of being reduced to a certainty by either party, and must issue out of the property granted – – In Property Holding Co. Ltd. v. Clarke (1945) 1 All ER 165 at 173, Evershed, L. J, approved a passage in Holdsworth History of England –
‘In modern law rent is not conceived of as a thing, but rather as a payment, which the tenant is bound by his contract to make to his landlord?.
From all indications, rent is in a class of its own, and it also stands very tall because the agreement to pay the rent outshines any other considerations. In other words, a tenant is not at liberty to engage in a rent strike because its covenant to pay rent is independent of the landlord’s obligation to effect repairs – see Oke V. Salako (1972) 11 CCHCJ 88, wherein Kassim, J., held –
“- – A tenant’s covenant to pay rent is independent of the landlord’s covenant to repair the premises; the tenant is not
discharged from his obligation to pay rent merely because his landlord is unwilling to fulfill his obligation?.
See also Lee-Parker v. Izzet [1991] 3 All ER 1097, where Goff J., declared –
“- – So far as the repairs are within the express or implied covenants of the lessor the Defendants are entitled to recoup themselves out of future rents and defend any action for payment thereof. It does not follow: However that the full amount expended by the [Defendants] on such repairs can properly be treated as payment of rent. It is a question of fact in every case whether and to what extent the expenditure was proper. For the sake of avoiding misunderstanding I must add that [the above] right can only be exercised when and so far as the landlord is in breach and any necessary notice must have been given to him. Insofar as the repairs fall outside the landlord’s covenants in the lease there can in my judgment be no set-off against the Plaintiffs.’ [See Law of landlord and Tenants, Cases and Comments]
Prof. Emeka Chianu explained in Law of Landlord and Tenant, 2nd Ed., that.
“Experience teaches that many landlords are not enthusiastic to effect
repairs, especially where they do not reside in the demised premises. Where a tenant is compelled to effect repairs, which are the landlord’s to effect, the ideal remedy from the tenant’s point of view is a self-help remedy which allows him to cease paying rent and remain on the premises until the landlord comes to terms or one which allows him to abandon the premises without fear that the landlord can sue him for rent once he has left, of boxer still an election between the two. Sadly, in the absence of express provisions to the contrary; a tenant cannot do any of these as most lease covenants are independent. A tenants covenant to pay rent is not dependent on his landlord fulfillment of his repairing obligation. A system of law in which the obligation to pay rent is independent of any obligation of the landlord to provide and maintain habitable premises can be defended on the ground that the more expensive it is for landlords to evict tenants, who do not pay their rent, the higher the cost of housing will be for those who do”?.
So, rent is rent, and in the absence of express provisions to the contrary, any amount expended on repairs cannot
be converted to rent.
?The tenant is obliged to pay his rent as and when due. But all is not lost, he can set-off, in his landlord’s action, a claim for money expended to effect any repairs the landlord was under an obligation to effect, on the following conditions –
– He must prove that he informed his landlord of the disrepair;
– He gave him reasonable time to effect the repair;
– The repair he effected is of good quality; and
-The sum he expended to effect the repair is reasonable.
British Anzani (Felixstowe) Ltd. v. Int Marine Management (UK) Ltd. (1979) 2 All E.R. 1063 (at P.186 of Chianu’s Book) where Forbes, J., held –
“There are at least two sets of circumstances in which at common law there can be a set-off against rent one where the tenant expends money on repairs to the demised premises, which the landlord has covenanted to carry out, but in breach has failed to do so (at any rate where the breach significantly affects the use of the premises), and the other where the tenant has paid money at the request of the landlord in respect of some obligation of the landlord connected with the land demised. To this proposition there
must be added two riders. First that as the landlords obligation to repair premises demised does not arise until the tenant has notified him of want of repair, such notification must have been given before the set-off can arise; and secondly that the set-off must be for a sum, which is not to be regarded as unliquidated damages, that is it is a sum certain, which has actually been paid and in addition, its quantum has either been acknowledged by the landlord or in some other way can no longer be disputed by him, as for instance, if it is the subject of an award on a submission to arbitration”.
I cannot see how the Appellant can escape from the snares of the decision of the Supreme Court in the case of Odutola V. Papersack Nig. Ltd. (supra).
Prof. Emeka Chianu lamented that the Supreme Court lost an opportunity in that case – Odutola V. Papersack Nig. Ltd. (supra) to state the law with clarity but I am not concerned with the clarity or otherwise of the decision, which speaks directly and profoundly to this Appeal under consideration, and which is binding on this Court anyway. As I said, legal writings are not binding on the Court, only cases
and statutes have binding effect on a Court.
The Appellant admitted it stopped paying Respondent rent in 2001; its justification for not paying rent is not covered by law, and is baseless. The only conclusion we can reach is that the yearly tenancy created by the Parties came to an end by the effluxion of time, and the Appellant thereby became a tenant at will of the Respondent by continuing in possession of the property; and that is that – see Odutola v. Papersack Nig. Ltd. (supra). The hullaballoo about the tenancy anniversary date vis-a-vis Notice to Quit, is nothing but smoke with no substance because, as the lower Court stated –
“The tenant [Appellant] has been holding over since 2001 when he stopped paying rent regardless of his reasons for not paying the said rent – – – Thus, all the Claimant [Respondent] needed to serve on the Defendant [Appellant] to determine the tenancy was a 7-days’ Notice – ‘ CW1 testified that she served the Defendant [Appellant]?s with a 7-days’ Notice on 1/11/2005 at the premises at 3pm. Therefore — the [Appellant]?s tenancy was effectively determined on that day”.
That is the law – a tenancy at
will is determinable by seven days’ notice of intention of the landlord to recover possession, which was complied with, and as the Supreme Court did say in Odutola V. Papersack Nig. Ltd. (supra), “even if six months’ notice was given, it does not, per se, change the nature and the legal character of the tenancy in issue”. The long and short of it is that the decision of the lower Court regarding the Respondent’s main claim cannot be faulted, and Issues thereon are resolved against the Appellant.
The Appellant’s Issue (5) and the first leg of the Respondent’s Issue 3, relates to the Appellant’s Counter-Claim, and it contends that the judgment of the lower Court only focused on Respondent’s Claim without addressing the issues raised in its Counter-Claim. It argued that the issue of repairs and renovation carried out, was not properly addressed in its Judgment and if the lower Court had addressed it, it’s decision would be different.
The Respondent argued that Appellant leased the property bearing in mind that it would effect repairs, and which repairs, is subject to its consent and approval, which was not obtained; that Appellant tendered
vouchers to show that all the repairs are quoted for and bidded for in the year 2000 and paid for between 27/10/2000 and 18/10/2000 that the approval for payment was authorized on 27/10/2000 under the hand of its MD and an advance payment of N800,000.00 was made on 18/10/2000 before the approval and then same date of the approval, the balance was paid; that the ” quotations and payment in year 2000′ are at variance, and was made in anticipation of litigation by the Appellant; that the Appellant carried out the repairs that ordinarily would have been it because it wants the building to fit its taste and cannot put the cost on it, who did not approve such repairs; and so, the lower Court was right to conclude as it did on its Counter Claim.
A counter-claim is a procedure that allows the Defendant to maintain an action against the Plaintiff, provided the counter-claim is directly related to the principal claim – see Nsefik v. Muna (2007) 10 NWLR (Pt 1043) 502.
?It is settled that where common questions determinative of a claim and counter-claim arise in a case, the Court is not expected to consider the same questions separately in relation to the
counter-claim – see A.G. Kwara State V. Ojulari (2007) 1 NWLR (Pt.1016) 551.
Moreover, a counter-claim does not fail merely because the main claim has succeeded – see Jeric Nig. Ltd. v. Union Bank (2000) 12 SCNJ 184, Balgoun v. Yusuf (2010) LPELR – 3847 CA.
The Appellant’s Counter-claim is basically a set-off – see Tullis Russel Papermakers Ltd. (Scotland V. Inveresk Plc. (2010) LPELR-17898 (UKSC), where the Supreme Court of England held that a cross-claim may give rise to an equitable set-off, if it flows out of and is inseparably connected with the pleadings and transaction, which give rise to the claim. As I said earlier, for set-off to succeed, the tenant must prove he informed his landlord and gave him reasonable time to effect the repair; that the repair effected is of good quality; and that the sum expended to effect the repair is reasonable.
Did the Appellant prove any of these things? Certainly not; it is not denying that it effected the repairs without approval from the Respondent; it merely tendered Exhibits I and J1, which includes two cash vouchers for the sum of N800,000 and N283, 000 it expended on repairs, without more. The
Appellant as Counter-Claimant is in the same position as the Claimant, and must vigorously prove that it is entitled to Judgment like the Claimant, particularly, as the only remedy to the claim for rent is a successful set-off.
From the evidence before the Court and all that has been said so far, the Appellant failed to establish its Counter-Claim, and I am satisfied that the lower Court considered it on its merit, and determined it lacked merit. In the final analysis, this Appeal lacks merit; it fails and is hereby dismissed.
The Respondent is awarded costs assessed at N30,000.00.
?
CHINWE EUGENIA IYIZOBA, J.C.A.:
I read before now the judgment just delivered by my learned brother, A. A. AUGIE JCA. His lordship has considered and dealt exhaustively with all?the issues that arose in the appeal. I agree with the reasoning and conclusions contained therein. I have no doubt that the appellant was wrong to unilaterally seek to convert rent due to the respondent to defray the cost of repairs it carried out in the demised premises to suit its taste and without the written approval of the
respondent.
In view of the decision of the SC in Odutola v. Papersack Nig. Ltd (2006) 18 NWLR (Pt.1012) 470 having converted the yearly tenancy to a tenancy at will by failure to pay rent for over three years, the appellant is entitled to only 7 days notice. The notice given was consequently adequate. I also hold that the appeal lacks merit and dismiss same. I abide by the consequential orders in the leading judgment of my learned brother Augie JCA.
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.:
I have read before now the leading judgment delivered by my learned brother Hon. Justice AMINA ADAMU-AUGIE, JCA and I agree with the reasoning’s and conclusion therein except to affirm; that a counter claim is a separate, independent and distinct action. ?A counter claimant must prove his claim before he can obtain judgment see Jewc Nig. Ltd vs. Umabit Plc (2000) 12 SCNJ I84 @ 2201. Thus, the counter claimant; the appellant failed to prove consent and approval before he effected repairs and incurred expense via Exhibit 1 & 2 to be entitled to judgment as per paragraph C, D & G of
tenants responsibility in Exhibit H. A mere show of repairs/renovation costs incurred is not sufficient to ground a set off an action of this nature. Parties are bound by the tenancy agreement and condition therein.
“Hilary Farms Ltd. vs. M. V. Mahtra (2007) 14 NWLR (Pt.1054) 210. JFS Invest Ltd vs. Brawl line Ltd & Ors (2010) 18 NWLR (Pt.1225) 4998 SC”.
For this reason and fuller one in the judgment, the appeal lacks merit and it dismissed. I abide by the consequential orders in the leading judgment including order as to costs.
Appearances
Asanya Ayeni, Esq., with him, Mrs. Mobolaji AkinkugbeFor Appellant
AND
S. A. Adeyemo, Esq., with him, Mrs. Kate Okonkwo, and
Miss Patricia EffiomFor Respondent
