MR. JERRY IBEKWE v. MR. NELSON NWEKE
(2013)LCN/6435(CA)
In The Court of Appeal of Nigeria
On Monday, the 22nd day of July, 2013
CA/L/644/2009
JUSTICES
AMINA ADAMU AUGIE Justice of The Court of Appeal of Nigeria
CHIMA CENTUS NWEZE Justice of The Court of Appeal of Nigeria
RITA NOSAKHARE PEMU Justice of The Court of Appeal of Nigeria
Between
MR. JERRY IBEKWE Appellant(s)
AND
MR. NELSON NWEKE Respondent(s)
RATIO
DEFINITION OF THE TERM “MESNE PROFIT”
What is MESNE PROFIT? It means in essence, an intermediate profit, profits accruing between the date that the Defendant/Tenant ceases to hold the premises as a tenant, and the actual date that he gives up possession. Mesne profits are awarded in place of rents, where the tenant remains in possession after the tenancy agreement has run out or been duly determined. OBIJIAKU V. OFFIAH (1995) 7 NWLR (Pt. 570) 523 paragraph f; UDI V. IZEDONIMWEN (1990) 2 NWLR (Pt. 132) 357; NIGERIAN CONSTRUCTION & HOLDING CO. LTD V. OWOYELE (1988) 4 NWLR (Pt. 90) 588.
In OSAWARU V. EZEIRUKA (978) 6 – 7 S.C. 135 @ 139, Aniagelu JSC held that:
“A Landlord in claiming for mesne profits is claiming for the profits intermediate from the date the tenant ought to have given up possession and the date he actually gives up possession”.
In OBIJIAKU’s case (supra) it was held inter alia that
“If a tenant does not give up possession beyond the date of the termination of the tenancy, he will be liable to pay mesne profits for the period that he retains possession of the tenancy”
In PAN ASIAN v. NICON (1982) 9 S.C. 1, Obarchi JSC observe as follows
“After the service of a written notice or at the end of the term granted and the tenant holds over without the permission of the Landlord, the tenant is liable to pay mesne profit for the use and occupation of the premises till he delivers up possession” PER PEMU, J.C.A.
RITA NOSAKHARE PEMU, J.C.A. (Delivering the Leading Judgment): This is an appeal against the Ruling of Honourable Justice K.O. Alogba delivered on the 21st of October 2008 at the High Court of Lagos State, Ikeja Judicial Division, whereby he entered Judgment in favour of the Claimant/Respondent against the Defendant/Appellant for mesne profits for the use and occupation of the premises in use at the rate of fifty thousand naira per month, from 1st day of July 2005 until possession is ordered to be given up.
The genesis of this case is that the Respondent Nelson Nweke (as Claimant in the lower Court) had claimed against the Appellant (as Respondent) for
(i) Possession of property described as a four-bedroom semi-detached duplex together with the two rooms boy’s quarters and other appurtenances thereto situate at No 21A Nelson Nweke Street, Magodo, GRA, Lagos.
(ii) Mesne profit for the use and occupation of the premises in the sum of one million, one hundred thousand naira of the rate of N50,000.00 per month from 1st July 2005-30th April 2007 and at the rate of N50,000.00 per month from 21st April 2007 until possession is given up.
(iii) Cost of this action – pages 1 – 2 of the Record of Appeal.
FACTS OF THE CASE
The Appellant occupied as a tenant, property described on the Writ of Summons and as claimed by the Respondent, which tenancy commenced on the 1st of July 2003 and expired on the 30th of June 2005. The Appellant did not renew the tenancy, neither did he yield up possession of the premises to the Respondent.
However, by letter dated 2nd August 2006, he expressed his desire to renew his tenancy in the premises for another term of 2(two) years commencing from the 1st of July 2005 to the 30th of June 2007. By letter dated 1st September 2006, the Respondent accepted this offer of renewal.
The Appellant did not pay the renegotiated rent.
The Respondent, consequent on this, instituted an action for the recovery of the premises from the Appellant. This case was heard on its merits.
The learned trial Judge found for the Respondent by holding the following:
(1) That the Appellant original tenancy was determined on the 30th day of June 2005, by effluxion of time and thus could only be entitled to a Notice of Intention to apply to recover possession, as he no longer at the time had any tenancy in existence which needed to be determined – pages 152 and 153 of the Record of Appeal.
(2) That the Appellant made an offer to the Respondent for another term which was accepted by the Respondent, subject to the terms therein contained. However, despite the acceptance, Appellant did not comply with the terms, therefore there was no agreement or renewal of the tenancy – page 153 of the Record of Appeal.
(3) That on the issue of service of the requisite Notice of Owners intention to Apply to recover possession, that there was no proof that same was served on the Appellant, that it is doubtful whether or not it was served on the Appellant.
(4) That the rate claimed by the Respondent was uncontroverted as the Respondent did not put credible evidence before the Court that the rate alleged by him is the applicable rate of rent of the premises under the law.
The Appellant is dissatisfied with this and has appealed it.
Pursuant to the Practice Direction of this Honourable Court, the Appellant filed a Notice of Appeal on the 15th of June 2009, with four (4) Grounds of Appeal – pages 161 – 168 of the Record of Appeal.
Ex-facie, Grounds 2 and 3 in the Notice of Appeal deal with the lower Courts jurisdiction in entertaining this appeal.
The Appellant had distilled four issues for determination. They are:
(1) Whether the letter dated 1st September 2006, written to the Appellant by the Respondent’s Solicitors did not renew and extend Appellant’s tenancy from the 1st day of July 2005 to 30th day of June 2007.
(2) Whether the Respondent fulfilled all the conditions preceded to the institution of an action for the recovery of residential premises before instituting the suit to which this appeal relates.
(3) Whether the trial Court did not err in law when he, without jurisdiction awarded mesne profit to the Respondent even against the provisions of the Rent Control and Recovery of Residential Premises Law of Lagos State 2003 as per the legally permissible chargeable rent a fortiori mesne profit.
(4) Whether by virtue of Section 74 of the Evidence Act, the trial Court was not supposed to take judicial notice of all extant and relevant laws, which includes the Rent Control and Recovery of Residential Premises Law of Lagos State 2009 and also all extant laws as at the date of its ruling.
The Respondent distilled three (3) issues for determination. They are:
(1) Whether the letter dated 2nd August 2006 and the Respondent’s qualified response dated 1st September 2006 created a binding contract between the parties and thereby effectively created a new tenancy agreement or a renewal of the old term.
(2) Whether the Respondent complied with the condition precedent to the institution of the action against the Appellant.
(3) Whether the Respondent is entitled to the claim for mesne profit by the trial Court even though the claim for possession did not succeed?
A cursory look at the issues for determinations, it seems to me that the Respondent has adopted essentially issues 1, 2 and 3 formulated by the Appellant.
On the 27th of May 2013, learned counsels adopted their respective briefs of argument.
ISSUE NO 1: Whether the letter dated 1st September 2006, written to the Appellant by the Respondent’s Solicitor did not renew and extend Appellant’s tenancy from the 1st day of July 2005 to 30th day of June 2007.
The Appellant had submitted that this issue flows from Ground of Appeal No 1 which states as follows:-
“The learned trial Judge erred in law when he held that the date of the expiration of the Defendant’s tenancy is 30th of June 2005, instead of 30th day of June 2007 and consequently awarded mesne profits to the Respondent from 1st of July 2005”
The Appellant submits that by the filling of a Statement of Defence, it shows that he answered the Claimant/Respondent’s claim satisfactorily. That the gist of the Respondent’s case is that, at the expiration of his initial term in 2005, his tenancy was further extended to expire on the 30th day of June 2007.
However, he submits that by a letter dated 2nd August 2006 which the Respondent replied to via his Solicitors of 1st September 2006, it shows that there was a meeting of minds of the parties as to the renewal of the Appellant’s tenancy.
The Respondent has however denied that the tenancy was not extended to expire on 30th June 2007. This is because the Appellant only indicated his interest to renew his tenancy upon the expiration of the tenancy, but failed to pay the rent reserved for the said renewal.
The Appellant submits that from the letter of 1st September 2006, written to the Appellant by the Respondent’s Solicitors, the intent and effort of that letter to grant further tenancy of a 2 years term beginning from the 1st day of July 2005 and expiring on the 30th of June 2007. He submits that the subsequent tenancy carried all the materials of an enforceable lease agreement. In other words, there was an offer, acceptance and an intention to create a legal relationship. There was also consideration.
He submits that for a contract to be valid in law, consideration could be executory or executed, but it must not be part.
He argues that agreements between seller and buyer for sale of goods for future delivery on credit are examples of executor consideration. He further argues that the agreement between the parties was not time specific, as regards the payment of the rent and the validly of a contract is not impugned on the ground that the consideration is executory in nature.
Here the Appellant, he submits, agreed with the Respondent, to pay rent for the subsequent tenancy created to run for a term of 2 (two) years, from 1st July 2005 to 30th June 2007. That the fact that the rent was not paid immediately, does invalidate the agreement between the Appellant and the Respondent regarding the renewal of Appellant’s tenancy.
He submits that it cannot be legally tenable to hold that the Appellant was holding on, and detaining the demised premises from the 1st day of July 2005, same being the exact date the tenancy created or extended by the combined effort of Appellant’s letter to the Respondent dated 2nd August 2006, and the Respondent’s Solicitor’s letter to the Appellant dated 1st September 2006. This is because mesne profit is awarded against a party who holds on and detains a premise from the owner after the expiration of the party’s tenancy. Also it is trite that mesne profits cannot be awarded against a Tenant whose tenancy is still current and running, even when the Tenant has not paid his rent.
He contends that the offer and acceptance in the new tenancy, regularized Appellant’s occupation of the demised premises, from the 30th of June 2005 till 1st September 2006, being the date the Appellant’s tenancy was renewed; thus, he submits, the Appellant could not be said to be holding over the premises, after his tenancy expired.
He submits that the trial Judge appeared to have relied heavily on the Respondent’s argument that the Appellant refused to pay rent for the renewed tenancy.
The Appellant submits that summary Judgment should not be given, unless the Defendant’s defence is vague and lacking in substance. He submits that the learned trial Judge erred in law, when he gave summary Judgment on the issue of mesne profits, without proceeding to full trial, where the Respondent will be required to establish his exact entitlement to mesne profit. That it is settled law that summary Judgments should not be given, unless the Defendant’s defence is vague and lacking in substance.
That since the subsequent tenancy is for a period between 1st July 2005 and 30th June 2007, same could not have been determined on the 30th of June 2005.
On this issue No 1, it is the Respondent’s contention that the Respondent’s claims against the Appellant was informed by his failure to renew his tenancy by the payment of the agreed rate of rent of N600,000.00 per annum, upon the expiration by effluxion of time, of the initial term of two years on 30th June 2005.
That the basis of the Respondent’s claim is that the Appellant’s tenancy in the premises expired on 30th June 2005. That upon the Appellant’s letter of 2nd August 2006, the Respondent agreed to renew the tenancy for another term of two years commencing from the 1st of July 2005 to 30th June 2007, upon the payment of the sum of N600,000.00 per annum (the sum of N1,200,000.00, representing rent for the term of 2 years created) and the acceptance of the Appellant, to vacate the premises on 30th of June 2007.
That the Appellant however refused to either pay the rent or yield up possession of the premises until this suit was instituted.
He submits that the Appellant’s tenancy in the Respondent’s premises, was neither renewed before it expired on 30th June 2005, nor was it renewed thereafter.
It is the contention of the Respondent, that although there was a negotiation between the Appellant and the Respondent for the creation of a new term of two years, such negotiations which started over 14 months after the tenancy expired did not amount to a binding agreement as the Appellant failed to comply with the terms stated in the Respondent’s letter of 1st September, 2006.
He submits that two conditions were created in the Respondent’s letter dated 1st September 2006 to be fulfilled by the Appellant.
(a) The payment of two years rent in the sum of N1,200,000.00 for the period from 1st July 2005 to 30th June 2007 and
(b) To vacate the premises on or before the 30th of September 2007.
He submits that the Appellant failed to comply with the terms contained in the Respondent’s letter. Therefore, he could not claim that a new agreement or a renewal of the old one had taken place. That the Respondent’s letter dated 1st September 2006 was a qualified acceptance of the Appellant’s offer subject to the conditions stated therein.
The Respondent conceded to rejecting and returning the Appellant’s post dated Bank PHB Cheque dated 24th January 2008 in the sum of N1,800,000.00, but that the said rejection was informed by the dishonest and mischievous intention of the Appellant.
On Issue No 2, which is whether the Respondent fulfilled all the conditions precedent to the institution of an action for the recovery of residential premises before instituting the suit to which this appeal related?
Arguing that this issue was distilled from Ground 4 of the Grounds of Appeal, he submits that the term “Jurisdiction” has been given judicial definition in a motley of cases. He submits that the Respondent as the Claimant at the lower Court, did not fulfill the conditions precedent to the assumption of Jurisdiction by the Court. This is because
(1) The Notice of Owner’s intention to recover possession relied on by the Respondent is invalid, because it wrongly stated the date in which the Appellant’s tenancy was determined.
(2) The said Notice of Owner’s intention to Recover Possession was not even served on the Appellant.
He submits, citing UDOETE V. HEIL (2003) FWLR Part 143, 362 at 403 to 404, that it is well established that a Court is competent to hear a case only when all the conditions precedent to hearing the case is fulfilled.
He submits that the Notice of Owner’s intention to Recover Possession which was not served on the Defendant describes the date of termination of the Defendant’s tenancy to be 30th of June 2005 instead of 30th of June 2007.
He submits that the Honourable Court ought not to have proceeded with the Respondent’s suit, same being an action for Recovery of Residential Premises, without first and foremost resolving the issue of service of a valid Notice of Owner’s intention to Recover Premises on the Appellant by the Respondent.
He submits that the Respondent failed to establish that he fulfilled all the conditions precedent to the institution of an action for the recovery of residential premises before instituting the suit to which this appeal relates.
He submits that if a law requires the fulfillment of a pre-condition before a particular act or substance, or main action is to be done, non-fulfillment of the pre-condition will be prejudicial to the party in default.
On this issue, the Respondent submits that prior to the filing of the action, he issued and served on the Appellant a Notice of Owner’s Intention to apply to recover possession of premises dated 20th March 2007, the tenancy of the Appellant having expired by effluxion of time on 20th June 2005. The Notice of Intention to Apply to recover possession dated 20th March 2007 did not determine his tenancy which was purportedly still subsisting.
He submits that at the time the Notice of Owner’s intention to apply to recover possession dated 20th March 2007 was issued and served on the Respondent, the Appellant’s tenancy on the premises had expired on 30th June 2005, and same was not renewed by the Appellant.
He argues that in the light of this, no new agreement or a renewal of the old term had taken place. He submits that the evidence before the Court showed that the parties started with a yearly tenancy, which finally became a tenancy at will by operation of law, when the yearly tenancy expired on 30th June 2005, the tenancy at will commenced immediately on 1st July 2005.
Therefore, he submits the Notice given to the Appellant in Exhibit F is valid in law.
ISSUE NO 3 – “Whether the trial Court did not err in law when he, without jurisdiction award mesne profit to the Respondent even against the Provisions of the Rent Control and Recovery of Residential Premises Law of Lagos State 2003 as per the legally permissible chargeable rent of fortiori mesne profit”
The Appellant submits that the amount of money chargeable as Rent and mesne profit for various categories of residential premises is fixed by law in Lagos State. But that the mesne profit awarded by the Court is contrary to the provision of the law as per the legally permissible chargeable rent a fortiori mesne profits – referring to Schedule to the Rent Control and Recovery of Residential Premises Law of Lagos State 2003 (Section 1 thereof). That this provision makes for the calculation of rent chargeable in respect of various categories of accommodation in Lagos State.
The premises in dispute is a 4 Bedroom semi-detached house with 2 rooms boys quarters, situate at Magodo Area of Lagos State, which area falls under the area described as Zone C by the Law. That by virtue of the Rent Control standard Rent order, the standard rent for such type of accommodation at Zone C is the sum of N4,500 monthly or the sum of N54,000 per annum. That where a house either detached or semi-detached has more than 3(three) bedroom, each additional bedroom shall attract 10% of the Standard Rent prescribed for the tenement. That 10% of the annual of N54,000 is the sum of N5,400. Therefore, the total rent chargeable for a 4 Bedroom semi-detached house with 2 rooms boy’s quarters, situate at Magodo Area of Lagos State is the sum of N54,000 and N5,400 which is N59,400.00.
The Appellant submits that the Rent Control Standard Rent Order (of the Rent Control and Recovery of Residential Premises Law of Lagos State 2003) provides thus:
“where a flat has attached to it a boy’s quarter in Zone A – M, a room therein shall attract an additional rent of equivalent amount for d room in the Zone in which the flat is located”
That the premises in dispute has a 2 (two) bedroom boy’s quarter and the prescribed standard rent for a room in Zone C is the sum of N400.00 (four hundred naira) monthly or the sum of N4,800 per annum. Therefore, he further submits, the prescribed rent for the 2 (two) bedroom boy’s quarter is the sum of N9,600 per annum.
He submits that, though inadvertently wrongly calculated as N64,800 in the Appellant’s Statement of Defence, the standard rent prescribed by the Law for a 4 bedroom semi-detached house with 2 rooms boy’s quarters, situate at Magodo area of Lagos State, is the sum of N59,400, plus the sum of N9,600 totaling N69,000.
Citing Section 2(4) of the Rent Control and Recovery of Residential Premises Law of Lagos State 2003, which provides thus
“The standard rent shall supercede any rent between the Landlord and the tenant and any order made in respect of the standard rent shall bind all persons including the Landlord, tenant or mortgage of such premises”
He submits that the learned trial Judge therefore erred in law when he, without jurisdiction awarded mesne profit to the Respondent at the rate of N50,000.00 (fifty thousand naira) per month, from the 1st day of July 2005, until possession is ordered to be given up. That this holding occasioned a grave miscarriage of justice.
The Respondent on Issue No 3, submits that the contention of the Appellant is that the Respondent is not entitled to mesne profits for his use and occupation of the Respondent’s premises since his claim for possession failed, and that he had contended erroneously that mesne profits could only be awarded following an order for the recovery of possession of the premises in dispute.
The Respondent submits that because there was a proper finding made by the learned trial Judge that the tenancy of the Appellant expired by effluxion of time, on the 30th of June 2005, and same was validly determined by Exhibit F dated 20th March 2007, the Appellant profits from 1st July 2005, when he started to hold over the premises. Therefore he submits, the Appellant was liable to pay mesne profits from 1st July, 2005 until he delivered up possession of the premises.
Submitting that mesne profits are awarded in place of rents where the tenant remains in possession after the tenancy agreement has run out or been duly determined, he contends that it is not the law that mesne profits could only be awarded following an order for recovery of possession. But that if a tenant in the premises does not give up possession beyond the date of the termination of the tenancy he will be liable to pay mesne profits for the period that he retains possession of the tenancy citing OBIJIAKU V. OFFIAH (1995) 7 NWLR (Pt. 570) at 523.
He further contends that the Respondent’s claim, is based on the fact of a holding over by the Appellant, after the determination of his tenancy by effluxion of time on 30th June 2005.
He submits that in the instant case, the Appellant was a tenant of the premises, whose tenancy expired by effluxion of time on 30th June 2005. That the parties are also in agreement that, the Appellant held over the premises on the expiration of the tenancy on 30th June 2005, without the payment of any rent.
He submits that the Appellant failed to pay the agreed rent of N600,000.00 per annum, for the renewed tenancy, for another term of two years from 1st July 2005 to 30th June 2007.
He submits that the Respondent is entitled to mesne profits for the use and occupation of the premises, for the period it was held over by the Appellant.
On the contention by the Appellant that the learned trial Judge was in error in awarding mesne profits in favour of the Respondent without adducing evidence at the trial in proof of same, the Respondent submits that this is misconceived, because although mesne profits is operative when the tenant holds over the premises, the same is liquidated where what is claimed as mesne profits is the fixed and ascertainable amount of money agreed by the parties as rent for the premises.
That there was evidence before the Court that parties agreed on the payment of N600,000.00 as the annual rent for the premises. Moreso, since the amount of money fixed by both parties are liquidated and they agreed and fixed the rent at N600,000.00 per annum, no further proof is required. What is admitted requires no further proof. That it is only when evidence is at large that evidence must be adduced to ascertain what the unliquidated sum actually is.
ISSUE NO. 1
In considering this appeal, I must advert my mind to the following questions. They are:
(1) Was there a subsisting tenancy agreement?
(2) If no, when did the previous tenancy agreement expire?
(3) Did the facts necessitate the issue of Notice of Intention to recover premises, as to vest the Court with jurisdiction to entertain the case?
In other words, was there need for the condition precedent to institute this action to be met?
(4) Is the Notice one that is irregular?
The Statement of Claim is at pages 3 – 5 of the Record of Appeal. I shall reproduce paragraphs 6-20 thereof,
Paragraph 6: “The Defendant is tenant of the four-bedroom semi-detached duplex with two rooms boys’ quarters and other appurtenances thereto situate at No. 21A Nelson Nweke Street, Magodo, GRA, Lagos.”
Paragraph 7: “The Defendant became a tenant of the Claimant’s premises in 2003 for a term of two years which commenced on 1st July, 2003 and expired on 30th June 2005 at an agreed rent of Five Hundred Thousand Naira (N500,000.00) per annum.”
Paragraph 8: “The Defendant paid a total sum of One Million Naira to the Claimant as rent for the agreed term of two years.”
Paragraph 9: “The Defendant’s tenancy in the premises expired by effluxion of time on 30th June 2005.”
Paragraph 10: “Upon the expiration of the tenancy the Defendant neither renewed his tenancy in the premises nor did he yield up possession of same to the Claimant.”
Paragraph 11: “The Defendant failed to pay rent for the premises for the period 1st July, 2005 – 30th June, 2006 despite the fact that he detained the premises from the Claimant.”
Paragraph 12: “By his letter to the Claimant’s Attorneys, Ubosi Eleh & Co. dated 2nd August, 2006, the Defendant expressed his desire to renew his tenancy in the premises for another term of two years commencing on 1st July, 2005 – 30th June, 2007. The Claimant will at the trial of this action rely on the said letter.”
Paragraph 13: “By its letter dated September, 2006 the Claimant’s Attorneys Ubosi Eleh & Co. notified the Defendant of the Claimant’s acceptance for renewal of his tenancy in the premises for another term of two years commencing from 1st July, 2005 – 30th June, 2007 but at a renegotiated rent of Six Hundred Thousand Naira (N600,000.00) per annum, the sum of One Million, Two Hundred Thousand Naira (N1,200,000.00) representing rent for the term created.”
Paragraph 14: “The Claimant will at the trial of this action rely on the Claimant Attorney’s letter dated September, 2006.”
Paragraph 15: “The Defendant neither paid the re-negotiated and agreed rent nor did he yield up possession of the premises.”
Paragraph 16: “The Defendant has failed to yield up possession of the premises to the Claimant and still detains same despite several efforts made by the Claimant to recover possession of the premises from him.”
Paragraph 17: “By his letter dated 19th March 2007 the Claimant instructed his Solicitors Ejike Okpe & Associates to take all legal steps necessary to recover possession of the premises together with the mesne profit from the Defendant. The Claimant will at the trial of this action rely on the said letter.”
Paragraph 18: “By their letter “Notice To Tenant Of Owner’s Intention To Apply To Recover Possession” dated 20th March, 2007, the Claimant’s Solicitors, Ejike Okpe & Associates did serve on the Defendant a notice of his intention to apply to Court to recover possession of the premises. The Claimant will at the trial of this action rely on the said notice.”
Paragraph 19: “The said Claimant’s Notice dated 20th March, 2007 has since expired and the Defendant has failed to yield up possession of the premises and still detains same.”
Paragraph 20: “The current annual rental value of the premises is the sum of Six Hundred Thousand Naira (N600,000.00) per annum.”
Paragraph 11, where it avers that the Claimant (Respondent in this appeal) failed to pay rent for the premises for the period 1st July 2005 to 30th June 2006, despite the fact that he detained the premises from the Claimant was denied in paragraph 2 of the Defendant (Respondent in this appeal).
Paragraphs 3, 4, 5, 6, 7, 8, 9, 11, 12, 13, 14, 15, 16 and 17 of Statement of Defence is apt – pages 92-95 of Record of Appeal.
Paragraph 3: “The Defendant avers that indeed, it is true, that his tenancy in the premises in dispute was initially for a term of 2 years commencing from 1st of July 2003 to 30th June 2005.”
Paragraph 4: “Further to paragraph 3 above, the Defendant’s tenancy was renewed at the expiration of the said initial term up till 30th July 2007. The Defendant would round upon and rely on copies of letters he wrote to the Claimant through his agent, dated 2nd August 2006 as well as the reply dated 1st of September, 2006 in respect of the Tenancy Renewal during the course of trial of this suit” – Annexures “1 and 2” respectively.
Paragraph 5: “The Defendant avers that his contractual tenancy in the premises subject to this suit was initially billed to expire on the 30th tune 2005 but was extended to expire on 30th day of June 2007″.
Paragraph 6: The Defendant further avers that till date, the subsequent tenancy granted to the Defendant has not been determined by a Notice to Quit.”
Paragraph 7: “Defendant shall contend during trial that the Notice to Tenant of Owner’s Intention to Apply to Recover Possession, purportedly served on him is invalid in that, the date of determination of the Defendant’s tenancy as contained therein, is grossly irregular.”
Paragraph 8: “The Defendant avers that the Notice of Owner’s Intention to Apply to Recover Possession was not served on the Defendant by the Claimant himself or through his appointed agent.”
Paragraph 9: “The Defendant avers that he has been adversely prejudiced by virtue of the error on the face of the aforesaid Notice to Tenant of Owner’s Intention to Recover Possession dated 30th of March 2007 which said Notice wrongly stated that the date of determination of the Defendant’s Tenancy was 30th of June 2005 instead of 30th June 2007.”
Paragraph 11: “The Defendant avers that the rental value by law of the premises aforesaid is N5,400.00 (Five Thousand, Four Hundred Naira) per month and N64,800.00.00 (Sixty Four Thousand, Eight Hundred Naira) per annum. The Defendant shall rely on the Rent Control and Recovery of Residential Premises Law of Lagos in this regard.”
Paragraph 12: “Indeed, it is not correct that the Defendant neglected to pay rent as alleged by the Claimant but rather, the Claimant refused to accept rent offered by the Defendant to the Claimant”.
Paragraph 13: “On 28th of November 2007, via, a Sterling Bank Plc Cheque, the Defendant made a payment of N1,600,000.00 (One Million, Six Hundred Thousand Naira) only to the Claimant, which said payment the Claimant rejected. The Defendant will found upon and rely on a copy of the said Bank Cheque during trial.”
Paragraph 14: “On 8th January 2008, the Defendant, through its solicitors, wrote a letter to the Claimant’s Solicitors and attached a Bank PHB Cheque of N1,800,000.00 (One Million, Eight Hundred Thousand Naira) only for rent. The Defendant will found upon and rely on a copy of the letter dated 8th January 2008 as well as a copy of the said Cheque. Claimant is hereby notified to produce the original copy of the said letter dated 8th January 2008 during the course of trial of this suit” – Annexures “3 and 4”
Paragraph 15: “On 18th January 2008, the Claimant’s Solicitors, via a letter rejected the payment proposals stated in the letter of 8th January 2008 and returned the Bank Cheque of N1,800,000.00 (One Million, Eight Hundred Thousand Naira) only. The Defendant would found upon and rely on a copy of the said letter during the course of this trial suit” – Annexure “3”
Paragraph 16: “The Defendant shall contend during trial or sooner the determination thereof, that this Court is jurisdictionally incompetent to entertain the Claimant’s claim as constituted in that a requisite statutory notices that ought be served on the Defendant have not been so served.”
Paragraph 17: “The Defendant’s tenancy in the premises did not expire on 30th of June 2005 as wrongly stated in paragraph 9 of the Statement of Claim.”
The letter of 1st September, 2006 is worthy of reproduction thus:
“The Managing Director
Cache Homes Limited
56, Norman Williams
Off Awolowo Rood,
Ikoyi – Lagos.
Dear Sir,
PROPERTY AT NO. 21A NELSON NWEKE STREET, MAGODO G.R.A. LAGOS.
Your letter dated August 2, 2006 refers.
Having discussed, argued and pleaded extensively with our client your Landlord, we are pleased to inform you that he has finally given his approval for the extension of your lease for a period of ONE TERM ONLY which expires on the 30th day of June 2007 and acceptance of the sum of N1,200,000.00 (One million, two hundred thousand naira) only covering your rent for the period 1/7/2005 – 30/6/2007.
Please note that this approval is based on the main condition that you will honour your promise to vacate the premises not a day later than 30th day of June 2007 as stated on your letter dated August 2, 2006.
Kindly forward in our favour your certified cheque in the sum of N1,200,000.00 (One million, two hundred thousand naira) only representing two years rent. 1/7/2005 – 30/6/2007.
We thank you for your co-operation while this difficult negotiation last.
Yours faithfully
For: UBOSI ELEH & CO.
SIGNED
ADEOLUWA OLAORE
SIGNED
JAIYEOLA ADEBOGUN
CC: Mr. Nelson Nweke”
Now from the Claimant’s pleadings in the lower Court, paragraphs 7, 8, 9, 10 and 11 have this to say, by way of emphasis
Paragraph 7: “The Defendant became a tenant of the Claimant’s premises in 2003 for a term of two years which commenced on 1st July, 2003 and expired on 30th June 2005 at an agreed rent of Five Hundred Thousand Naira (N500,000.00) per annum.”
Paragraph 8: “The Defendant paid a total sum of One Million Naira to the Claimant as rent for the agreed term of two years.”
Paragraph 9: “The Defendant’s tenancy in the premises expired by effluxion of time on 30th June, 2005.”
Paragraph 10: “Upon the expiration of the tenancy the Defendant neither renewed his tenancy in the premises nor did he yield up possession of same to the Claimant.”
Paragraph 11: “‘The Defendant failed to pay rent for the premises for the period 1st July, 2005 – 30th June, 2006 despite the fact that he detained the premises from the Claimant.”
It is the case of the Claimant in the lower Court, that at the expiration of the tenancy on 1st July 2005, the Defendant failed to pay rent for the premises for the period 1st July 2005 – 30th June 2006. It was in 2006, a year after the expired rent that he indicated his desire to renew his tenancy for another term of two years from 1st July 2005 – 30th June 2007.
The Claimant accepted this, but at a negotiated rent of six hundred thousand naira per annum for a term of two years.
The Defendant neither paid the renegotiated, rent nor did he yield up possession of the premises.
This Issue is resolved in favour of the Respondent and against the Appellant.
ISSUES NO 2 AND 3
It must be borne in mind that it is the Ruling on the Motion on Notice for summary Judgment dated 30th April 2007, which Ruling was delivered on the 21st of October 2008 that is being appealed.
The lower Court had entered Judgment for the Respondent for MESNE profit, while it ordered that possession shall be proved by evidence, in view of the conflict in the affidavit evidence, or the issue of service of the Statutory Notice on the Appellant by the Respondent.
As soon as Judgment was entered against the Appellant for mesne profit, he yielded up possession and vacated the premises consequent upon which the Respondent, by his Notice of Discontinuance dated 4th November 2008 discontinued the claim for possession – pages 158 – 159 of the Record of Appeal.
It is my view that the issue of mesne profit cannot be considered in the instant case without establishing whether the Respondent was entitled to it in the first place.
The Appellant had in paragraph 4.44 of his brief of argument argued that the lower Court erred in law when he entered summary Judgment in favour of the Respondent, especially on the issue of mesne profit without proceeding to full trial where the Respondent will be required to establish his exact entitlement to mesne profit.
The Respondent had submitted that Issue No 1 should be resolved in favour of the Respondent because the parties had not reached any enforceable agreement as to bring the view term of the tenancy to life.
The Appellant contends that his tenancy in the premises was effectively renewed till 30th June 2007. That he did not refuse to pay rent, but that he offered the rent to the Respondent who returned his cheque. That his tenancy in the premises was wrongly stated to have expired on 30th June 2005 in the Notice of Owner’s Intention to apply to Recover Possession dated 20th March 2007. That the Notice did not determine his tenancy which was purportedly still subsisting.
The evidence before the lower Court showed that the parties started with a yearly tenancy, which finally became a tenancy at will by operation of law. When the yearly tenancy expired on 30th June 2005, the tenancy at will commenced immediately, on 1st July 2005. This is what informed the lower Court to hold that the seven days notice to quit in Exhibit F issued to him, was valid in law, and properly determined his tenancy.
The Appellant contended that since the lower Court found that the claim for possession ought to be established by evidence to be adduced at the trial, the claim for mesne profits ought to have been refused.
With respect, it seems to me that there was a finding by the lower Court that the tenancy of the Appellant expired by effluxion of time on 30th June 2005 and that same was validly determined by Exhibit “F” dated 30th March 2007. Therefore that the Appellant was liable to pay mesne profit from 1st July 2005 when he started to hold over the premises.
What is MESNE PROFIT? It means in essence, an intermediate profit, profits accruing between the date that the Defendant/Tenant ceases to hold the premises as a tenant, and the actual date that he gives up possession.
Mesne profits are awarded in place of rents, where the tenant remains in possession after the tenancy agreement has run out or been duly determined. OBIJIAKU V. OFFIAH (1995) 7 NWLR (Pt. 570) 523 paragraph f; UDI V. IZEDONIMWEN (1990) 2 NWLR (Pt. 132) 357; NIGERIAN CONSTRUCTION & HOLDING CO. LTD V. OWOYELE (1988) 4 NWLR (Pt. 90) 588.
In OSAWARU V. EZEIRUKA (978) 6 – 7 S.C. 135 @ 139, Aniagelu JSC held that:
“A Landlord in claiming for mesne profits is claiming for the profits intermediate from the date the tenant ought to have given up possession and the date he actually gives up possession”.
In OBIJIAKU’s case (supra) it was held inter alia that
“If a tenant does not give up possession beyond the date of the termination of the tenancy, he will be liable to pay mesne profits for the period that he retains possession of the tenancy”
In PAN ASIAN v. NICON (1982) 9 S.C. 1, Obarchi JSC observe as follows
“After the service of a written notice or at the end of the term granted and the tenant holds over without the permission of the Landlord, the tenant is liable to pay mesne profit for the use and occupation of the premises till he delivers up possession”
Notably is that in the instant case, ex facie it is not in dispute, that the Appellant was a tenant of the premises, and the tenancy expired by effluxion of time on the 30th of June 2005.
It is not in doubt that the Appellant held over the premises on the expiration of the tenancy on 30th June 2005, without the payment of rent.
But let me say quickly here, that there is no document which portrays the mode in which rent for the premise was to be paid.
However there was an agreement between the parties for the renewal of the Appellant’s tenancy in the premise for another term of two years from 1st July 2005 to 30th June 2007 at a rent of N600,000.00 per month, and the Appellant failed to pay the agreed rent so as to bring his tenancy in the premises to life.
The question is whether the lower Court awarded mesne profit in favour of the Respondent, without adducing evidence at the trial in proof of same.
The Respondent had argued that mesne profits is operative when the tenant holds over the premises. Mesne profit is liquidated where what is claimed as mesne profits is the fixed and ascertainable amount of money agreed by the parties as rent for the premises.
I am of the view that there is evidence that the sum of N600,000.00 was agreed by the parties as the annual rent for the premises in a liquidated sum.
Should there be any further proof in the face of this admission?
The Respondent argued that where what is being claimed as mesne profit is the same as the rent fixed by the parties, same is liquidated sum. That it is only when evidence is at large, that evidence must be adduced to ascertain what the unliquidated sum actually is.
The Respondent in claiming for mesne profits, he submits that he was not claiming the open market rental value of the property at the trial. That the tenancy came to an end, but rent of N600,000.00 per annum was agreed by the parties and which the Respondent is entitled to.
Respondent has argued that the Appellant held over the Respondent’s premises for the period 1st July 2005 without payment of rent. It follows that the Respondent is entitled to mesne profits. I agree entity with him. These Issues are resolved in favour of the Respondent and against the Appellant.
ISSUE No 4
The Appellant has argued that the lower Court had no jurisdiction to entertain the matter in the first place. That the mesne profits awarded by the Court runs against the provisions of the Rent Control and Recovery of Residential Premises Law of Lagos State 2003.
The learned trial Judge in his Ruling (page 152 of the Record of Appeal) observed inter alia
“From the submission of the Defendant himself, his original tenancy expired on 30th day of June, 2003.
That tenancy was not renewed before it expired. So it actually expired. From his own letter Exhibit 1 (to the Counter Affidavit) dated 2nd day of August, 2006. It is clear that he had continue to stay in the property after 30th day of June 2005 when his tenancy expired without an agreement with the Claimant, his Landlord.
The earliest date one could say he started negotiation for a new term is the date on this letter Exhibit 1 – that is 2nd day of August, 2006 well over one year after his tenancy had expired. It is clear therefore that in between he was a statutory tenant in the property and could only be entitled to a Notice of Intention to apply to recover possession as he no longer at the time have any tenancy in existence which needed to be determined. His term had determined by effluxion of time and he did not seek a renewal before its expiry and thereafter up until August 2006 as Exhibit 1 shows.
Exhibit 1 was therefore in the circumstances his offer to the Claimant for another term.
Exhibit 2 was Claimant’s acceptance subject to the terms therein contained. However despite Exhibit 2, the Defendant did not comply with the terms as to bring that new term into life.
He could therefore not claim that a new agreement or a renewal of the old term had taken place”
He continued at page 153 of the Record of Appeal
“He raised the issue that he did not refuse to pay for the supposed or alleged renewal of tenancy granted him, but that it was the Claimant who refused to collect the rent…..”
He had continued on the property since 1st day of July 2005 without an agreement and without paying any rent, he was issued with Exhibit F dated 20th day of March 2007. He did not pay at the time…..”
This suit was instituted on the 8th day of May 2007, Claimant alleged that Defendant sought amicable settlement thereof, terms were drawn but he refused to execute same, rather instead of sending payment for up to December 2007 granted him he sent Exhibit 5 dated 8th day of January, 2008 to which his cheque dated 24th day of January 2008 (postdated) was attached.”
…..
The Defendant has therefore failed to put credible evidence before the Court, that the rate alleged by him is the applicable rate of rent of the premises under that law. The rate claimed by the Claimant therefore stands uncontroverted and as I said earlier in this Ruling. The Defendant himself had issued his cheque – Exhibit 3 to the Counter Affidavit in the sum of N1.8 million for three years which tallies with the rate of rent claimed by the Claimant.
I therefore enter Judgment in favour of the Claimant against the Defendant for mesne profit for the use and occupation of the premises in issue at the rate of Fifty Thousand Naira per month from 1st day of July 2005 until possession is ordered to be given up”
It is my view that the Appellant’s tenancy was never renewed before its expiration on the 30th of June 2005. Neither was it renewed thereafter. As earlier observed “mesne profit” is an intermediate profit; profits accruing between the date that the tenant ceases to hold the premises as a Tenant, and the actual date that he gives up possession.
Mesne profits are awarded in place of rents, OBIJIAKU V. OFFIAH (supra).
If a tenant as was in this case, does not give up possession beyond the date of the termination of the tenancy, he will be liable to pay mesne profits for the period that he retains possession of the tenancy.
The Exhibits available in Court, was enough to indicate whether the Appellant’s tenancy had expired, whether there was a renewal in law, and whether after expiration of the tenancy, the Appellant continued to stay on the property without payment of rent.
Evidence was placed before the trial Court that the parties are agreed that the annual rent for the premises is N600,000.00 in other words N50,000.00 per month.
I am of the view that the lower Court was right, when it awarded mesne profit to the Respondent, for the use and occupation of the premises by the Appellant, for the period it was held over by him.
Appellant’s contention that he did not refuse to pay for the purported renewal of his tenancy, but that it was the Respondent who refused to collect the rent holds no water. He alleged that he sent a Sterling Bank Cheque dated 28th November 2007 for N1,600,000.00 which was rejected by the Respondent (page 57 of the Record of Appeal). The Respondent denied receiving the cheque. But this was about one and half years from when his tenancy expired, and several months after Exhibit 2, purporting to grant him a new term, but whose term, he did not even comply with.
The Respondent had conceded that he rejected and returned the Appellant’s post dated Bank PHB Cheque dated 24th January 2008 in the sum of N1,800,000.00 and that the said rejection was informed by the dishonest expressions of the Appellant.
It is curious to note that upon the institution of the suit on 8th May 2007, as claimed by the Respondent, parties agreed that the Appellant should vacate the premises on or before 31st December 2007 and that he should pay rent to cover the period 1st July 2005 – 31st December 2007. Terms of settlement was put in place but the Appellant refused to execute same. Instead of complying by paying rent to cover the period 1st July 2005 – 31st December 2007, he sent a letter dated 8th January 2008 to which his post dated cheque dated 24th January 2008 was attached – pages 58-59 of the Record of Appeal. He thereby unilaterally extended his tenancy to 1st July 2008 beyond 31st December 2007, which he requested for and was granted.
In view of this, the Appeal fails, as the mesne profits awarded the Respondent as claimed by him at the lower Court cannot be faulted.
The Ruling of the lower Court regarding the award of mesne profit to the Respondent is affirmed and this Appeal is hereby dismissed in consequence.
No order as to costs.
AMINA A. AUGIE, J.C.A.: I have read in draft the lead Judgment just delivered by my learned brother, Pemu, JCA, and I agree with him that this appeal lacks merit. He has addressed all the issues canvassed in the appeal, and I have nothing useful to add except to stress the point made about mesne profits, which has been described as –
“the rents and profits, which a tenant who holds over after lawful termination or expiration of his tenancy or a trespasser has or might have received during his occupation of the land or premises in issue, and which he is liable to pay as compensation to the person entitled to possession of such land or premises” – see Ayinke V. Lawal & Ors (1994) 7 NWLR (Pt. 365) 263, where Iguh, JSC, said –
“As was explained by Goddard, IJ, the expression is another term for damages for trespass arising from the particular relationship of landlord and tenant. See Bramwell V. Bramwell (1942) 1 KB 370. It is the name given for the intermediate profits or value for the use and occupation of land during the time it is held by one who is in wrongful possession or who has not agreed on any rents with the landlord, even though such an occupier cannot strictly speaking be described as a trespasser. They may, therefore, only be claimed as from the date when a tenant ceased to hold the demised premises as tenant and has become a trespasser. Indeed, in Ahmed Debs & Ors v. Cenico Nig. Ltd. (1986) 3 NWLR (Pt. 32) 846 at 851 – 856, Oputa, JSC, aptly described the term as follows:-
“The expression mesne profits simply means intermediate profits, that is profits accruing between two points of time – that is between the date when the Defendant ceased to hold the premises as a tenant and the date he gives up possession. Rent is different from mesne profits. Rent is liquidated, mesne profits are not. Rent is operative during the subsistence of the tenancy, while mesne profits start to run when the tenancy expires and the tenant holds over. The action for mesne profits does not lie unless either the landlord has recovered possession or the tenant’s interest in the land has come to an end or his claim is joined with a claim for possession”
In this case, there is no question as to the fact that the Respondent is entitled to mesne profits, and that the lower Court was right to award same to him.
Thus, I also dismiss the appeal, and abide by the orders in the lead judgment.
CHIMA CENTUS NWEZE, J.C.A.: I had the advantage of reading in draft, the judgment just delivered by my brother Pemu, JCA. I agree with his conclusion.
Appearances
Victor Opara Esq.For Appellant
AND
E.A. Okpe Esq. with Mrs. T. Okeke Esq. and E.M. Dugwu Esq.For Respondent
