MARINE AND GENERAL ASSURANCE COMPANY LIMITED v ANTONIE ROSSEK AND Another (SC. 233/84) [1986] NGSC 23 (25 April 1986)

MARINE AND GENERAL ASSURANCE COMPANY LIMITED (APPELLANT)

v.

ANTONIE ROSSEK AND ANOR (RESPONDENT)

(1986) All N.L.R. 478

Division: Supreme Court of Nigeria

Date of Judgment: 25th April, 1986

Case Number: (SC. 233/84)

Before: Eso, Uwais, Karibi-Whyte, Oputa; JJ. S.C.

The plaintiffs (herein the respondents) action as revealed in the statement of claim filed in the High Court was for possession of the premises situate at 194 Broad Street Lagos and N60,000.00 per annum as mesne profit until possession is given up.

The respondents were the landlords of the said premises and by written agreement, they let the said premises to the 1st defendants, that is, Batakoko Ltd., for a period of 6 years commencing from 6th October, 1960 at the rate of N60,000.00 per annum. The tenancy however expired by effluxion of time on 6th October 1976. Before the expiration of the lease, the 1st defendants had put the 3rd defendant, one Mrs Abiola Elegbede in possession who in turn put the 2nd defendants-Marine and General Insurance Company Ltd in possession.

However, the 1st defendants had already vacated the premises before the action was commenced, notice to recover possession was served on the 2nd and 3rd defendants. The 2nd defendants who are the appellants in this case admitted that the plaintiffs are leasehold owners and are entitled to the possession of the said premises. The 3rd defendant had quit the premises by the time of the service of the writ and so the only person in possession throughout the hearing of this case was the 2nd defendants, the appellants in this case.

The trial Judge in a well considered judgment entered judgment for the plaintiffs/respondents for possession and mesne profits of N60,000.00 per annum. The appellants were dissatisfied with the decision of the trial court and therefore appealed to the court of Appeal which dismissed the appeal. On a further appeal to the Supreme Court it was contended for the appellants that since they were not direct tenant of the respondent, it was wrong to give judgment against them for mesne profit.

HELD:

1.      In this case, the relationship of the appellants to the respondent was one of statutory tenancy. That is, once they held over the tenancy qua a tenant, of the original tenant, after the expiration of the original tenancy agreement between the 1st defendant and the respondents, they became the statutory tenants of the respondents. The respondents accepted the appellants as such statutory tenants and are therefore entitled to claim mesne profits from the appellants.

2.      I agree with the court of appeal and I am of the opinion that their finding is impeachable when the court held-"it is my view therefore that if the appellants are liable at all, they are liable in a sum of N60,000.00 per annum as mesne profit.

Appeal dismissed

Chief B. Akinbisehin (M.A. Olukoya Esq and Miss R. Ofili with him) for the Appellants.

Chief G.O.K. Ajayi, S.A.N. (Ademola Folami Esq and Miss Bola Adaramaja with him) for the Respondents.

Kayode Eso, J.S.C.-The action, as revealed in the statement of claim, filed in the High Court, by the Plaintiffs in this case, was for possession of the premises situate at 194 Broad Street, Lagos, and N60,000.00 per annum from 6th October 1970 until possession of the premises, as mesne profits.

The plaintiffs were the landlords of the premises, and by a written agreement, they let the premises to the 1st defendants, that is Batakoko Ltd., for a period of six years commencing from 6th October, 1960 at the rate of N60,000.00 per annum. This tenancy, however, expired by effluxion of time on 6th October, 1976. Before the expiration of the lease, the 1st Defendants had put the third defendant, one Mrs Abiola Elegbede in possession, who, in turn put the 2nd defendants-Marine and General Insurance Company Ltd.-in possession. I have already stated the claim of the plaintiffs against the three defendants.

Because the 1st defendants had already vacated the premises before the action was commenced, notice to recover possession was served only on 2nd and 3rd defendants.

It is significant that in the statement of defence of the 2nd defendants, who are the Appellants in this case, they admitted paragraph 1 of the Statement of claim which was filed by the Plaintiffs, that is, the Respondents in this appeal. The Plaintiffs had claimed as follows-

"(1)    The plaintiffs are leasehold owners and entitled to the possession of the premises known as No. 194 Broad Street Lagos."

and the defendants averred-

"(1)    The 2nd defendant admits paragraph 1 of the statement of claim to the extent that the plaintiffs are entitled to the possession of the premises known as No. 194 Broad Street Lagos."

It is also significant that the 3rd defendant had quit the premises by the time of the service of the writ and so the only person in possession throughout the hearing of this case was the 2nd defendants the Appellants in this case.

The learned trial Judge, in a well considered judgment, entered judgment for the Plaintiffs/Respondents, for possession and mesne profits at the rate of N60,000.00 per annum. Mention may also be made here that in regard to mesne profits, only the Plaintiffs called evidence-indeed a qualified valuer-who assessed the rental value of the premises at N60,000.00 per annum. Neither the appellants nor either of the other defendant called evidence in regard thereto.

The appellants were dissatisfied with the decision of the High Court and appealed to the Court of Appeal. That Court-Ademola, Nnaemeka-Agu and Uthman Mohammed JJ. C.A. also in a well considered judgment, as per Nnaemeka-Agu, J.C.A., found-

(1)     that the appellants occupied the whole premises,

(2)     that the contractual rent of N60,000.00 between the Respondents (Plaintiffs) and the 1st defendant (the original tenant) would be irrelevant in the assessment of mesne profits and what is relevant and material is the rent or profit which the Appellants are deemed to have received, or entitled to receive, on the premises during the period under consideration. This, the Court of Appeal confirmed to be N60,000.00 per annum as found by the Trail Court upon the uncontradicted evidence of the 1st plaintiffs' witness tendered by the Respondents to the trial Court;

(3)     that under the law, a tenant as any one person who occupies premises whether on payment of rent or otherwise, be he a tenant, sub-tenant or even trespasser, unless he occupies it under a bona fide claim to be the owner of the premises, and therefore a sub-sub tenant which the appellants claim to be is a tenant within the meaning of the law and is liable for mesne profits.

The Court of appeal dismissed the appeal and the Appellants have now appealed to this Court upon the following grounds of appeal-

"(1)    The learned Judges of the Court of Appeal were wrong in Law in giving judgment against the appellants' for mesne profits when appellants were not a direct tenants of the respondents.

PARTICULARS OF ERROR:

In Law, a document forming part of such correspondence is inadmissible in evidence though not marked, "Without Prejudice".

(3)   The learned Judges of the Court of Appeal were wrong in law in granting an amendment of the Statement of Claim when the amendment was not filed in the Court and no copy of the amendment was served on the appellant.

PARTICULARS OF ERROR:

Unless the amendment was formulated in writing, filed in Court and a copy of the amendment served on the appellant or its counsel, the terms of the amendment could not be known and defined.

(4)     The learned Judges of the Court of Appeal were wrong in law in not allowing the appellants to call an additional witness when counsel for the appellant, applied to call one more witness. The Judges of the Court of Appeal were in such a hurry to conclude the hearing of the appeal that they disallowed Appellant's counsel's application to call his additional witness.

PARTICULARS OF ERROR:

In law, an appellant is entitled to a fair hearing of his appeal. Such refusal is not fair hearing and is contrary to the provision of the suspended constitution of Federal Republic of Nigeria, 1979. Further grounds of appeal will be filed on receipt of record of proceedings."

The Appellants, as per their learned Counsel filed a Brief, under the Rules, wherein, the learned Counsel stated the questions for determination by this Court as follows-

1.      Whether a sub-sub-tenant is liable to pay Mesne Profits to the Head Landlord when no orders for possession and payment of Mesne Profits were made against the sub-sub-tenant's immediate landlord i.e. the 3rd Defendant.

2.      If the answer to the question is in the negative, were the courts below correct to have ordered the Appellants to pay Mesne Profits to the Respondents?

3.      If the answer is in the affirmative, what is the quantum of Mesne Profits payable and from what time should it start. Should it be from when the action was instituted i.e. from the 6th day of June, 1978 until possession is given up or should it be from when notice of intention to recover possession was served i.e. on the 8th day of December, 1977?

4.      Were the letters written by the Appellants' Solicitors (i.e. Exhibits FCA1 and 2) in the course of an attempt to settle a dispute while action was going on admissible?

5.      If the answer is in the negative, is the Court of appeal correct in admitting the correspondence?

In law, can a person not found in an address be said not to be in lawful possession of such premises especially a shop and store?

7.      Is the Court of Appeal correct in granting an amendment of the Statement of Claim contrary to Order 3 Rule (1) of the Court of Appeal Rules?

and after this, argued-

firstly that there was no privity of contract between the Respondents (Plaintiffs) who were landlords and the Appellants who were only "sub-sub-tenants", the sub-sub-tenants that is the Appellants in this case, would not be personally liable for the rent payable on the premises to the Head landlord but only liable to his own landlord, that is, the 3rd defendant;

Secondly that there was a misconception of the provisions of section 2 of the Recovery of Premises Law (Cap 118) Laws of Lagos State 1973 by the Court of Appeal. There having been no notice to quit served by the 3rd defendant on the Appellants, and the Appellants not being trespassers, the rent the appellants are said to have received on the premises should not be relevant in calculating mesne profits;

thirdly that the Respondents could only claim mesne profits from the date of their election to determine the tenancy and not from March 1976, and the contractual rent payable by the appellants to 3rd defendant is N12,000 per annum.

learned Counsel for the Respondents, Mr G.O.K. Ajayi, S.A.N., in his brief, argued that there has been no appeal against the concurrent findings of fact by the two lower courts to the effect that-

(1)     the Respondents (Plaintiffs) granted a lease for 6 years to 1st defendant at a rent of N6,000.00 per annum and the lease expired on 5th October 1976.

(2)     the 1st defendant, before the expiration of lease, had put 3rd defendant into possession of the whole premises who in turn before the expiration of the lease, also put 2nd defendants-Appellants-in possession of the whole premises,

(3)     by the time of the commencement of this action, in the High Court, neither 1st nor 3rd defendants occupied any part of the premises and the appellants. (2nd defendants) were in occupation of the entire premises.

(4)     the open market rental value was, in 1976, N60,000.00 per annum.

learned Counsel argued in that brief that upon the correct construction of A2 of the Recovery of Premises Law (cap 118) Laws of Lagos State 1973, the only persons occupying the premises, since 6th October 1976, when the original term expired, were the appellants and the two lower courts had so found. It was not necessary to serve any notice on the 1st and 3rd defendants as both had ceased to occupy the premises before the expiration of the term and as the appellants were admittedly in possession, They would be "a tenant" of the premises under s.2 of the law aforesaid as the Respondents would be landlords of the premises under the same provision.

learned Counsel further submitted, in the Brief, that the Respondents never claimed for rent from the Appellants, but mesne profits, against under the provision of the Law aforesaid. That the issue of privity of contract was irrelevant.

There were oral arguments. The crux of the arguments of Mr Akinbisehin, learned Counsel for the appellants, was that the appellants became statutory tenants. At this stage, this Court referred him to the indisputable finding of the two lower courts that the 1st defendant ceased to be a tenant from 5the October 1976 and had in fact vacated the premises before the expiration of the tenancy, Mr Akinbisehin said he would be concerned only with the question of mesne profits. As the appellants were sub-sub-tenants, the 1st defendant was still a tenant, despite the expiration of the term by effluxion, even though they were not in physical possession. On that token, said learned Counsel, the appellants became statutory tenants and if the appellants were to pay mesne profits, it would be for period starting with the writ and not the period from when they held over.

Mr G.O.K. Ajayi reminded the Court, in his final address, that from the evidence adduced by the appellants in the Court of Appeal, the appellants had paid N12,000 for just a portion of the premises.

Replying to this point, Mr Akinbisehin conceded that N12,000 per annum was paid for a portion of the premises but, he said, mesne profits should only be paid to the date of the sale of the property itself to the appellants, the property having now been sold to the appellants.

The issues for the determination of the Court as they are, would appear to me in this case as follows-

(1)     What, if any, is the liability of the appellants under the Recovery of the Premises Law (Lagos State) Cap. 118 of 1972?

(2)     What are mesne profits? and

(3)     When, on the evidence, did the liability of the appellants, on mesne profits, if any, on (1) above cease?

By section 2 of the Recovery of Premises Law (hereafter referred to as the law),-"mesne profits" means-

"the rents and profits which a tenant who holds over, or a trespasser, has or might have received during his occupation of the premises and which he is liable to pay as compensation to the person entitled to possession"

In this case, the relationship of the appellants to the Respondent was one of statutory tenancy. That is, once they held over the tenancy, qua a tenant of the original tenant, after the expiration of the original tenancy agreement between the 1st Defendant and the Respondents, they became the statutory tenants of the Respondents. In this case, the Respondents accepted the appellants as such statutory tenants.

Section 2 of the Law defines tenant to include-

"any person occupying premises whether on payment of rent or otherwise but does not include a person occupying premises under bona fide claim to be owner of the premises."

The appellants are such tenants as they do not claim ownership of the premises. The Respondents are therefore entitled to claim mesne profits from the Appellants. Indeed, the appellants really never disputed their liability to pay mesne profits. Exhibit K, which is a letter from the Solicitors to the Respondents acknowledging the receipt of a cheque sent on behalf of the Appellants is a testimony to this. The exhibit reads as follows-

"Gentlemen

SUIT NO LD/680/78

A. ROSSEK & ANOR. V. BATAKOTO LTD. & ORS.

We acknowledge the receipt of your letter FNA/RUC/667/78 of the 13th of October, 1978 and the cheque attached thereto. Although it is not our practice to refuse documents and cheques sent to us on behalf of our clients, we are obliged to return your said cheque on the ground that we have now realised the Typographical error made in stating the mesne profits claimed as N6,000.00 instead of N60,000.00. You will probably agree with us that to accept the cheque in the circumstances would amount to our implying that the figure erroneously claimed in the writ was correct. Please acknowledge receipt.

Yours faithfully,

(Sgd.) for G.O.K. AJAYI & Co."

The exhibit shows that the Appellants acknowledged themselves as liable to mesne profits of N6,000.00 per annum a figure which the Respondents disputed to the effect that it should read N60,000.00.

And so, as such statutory tenants, admitted as such by both parties, the appellants' contention in this Court could only be limited to whether the amount of mesne profit should be N6,000.00 or N12,000.00 as later admitted by the Appellants' counsel during the course of his argument before us, or the N60,000.00 which the learned trial Judge awarded in the case.

The evidence was, no doubt, one sided, as the appellants chose to give no evidence in contradiction of the clear and scientific evidence adduced by the Respondents per one Oludemi Oluse, a chartered surveyor, whom the learned trial Judge described as having "years of experience in his field." The witness placed what he referred to as the correct value of the property at N60,479.00 per annum. It was in the quest for a round figure that the lower figure of N60,000.00 was accepted and rule upon by the trial Court.

In regard to the figure claimable, I think the amendment sought by the Appellants in the Court of Appeal and the evidence adduced in regard thereto are material. After the Respondents had been allowed to amend their statement of claim in that Court, learned Counsel for the appellants, Dr Akintoye, sought, and was granted, leave to amend paragraph 3 of the statement of defence as follows-

"3.     As regards paragraph 4 of the amended statement of claim, save that the 2nd defendant admits that the 1st defendant put the 3rd defendant in possession of the whole premises known as 194 Broad Street, Lagos the 2nd defendant denies the rest of the amended paragraph.

3        (a)     The 2nd defendant/Appellant further states with regard to paragraph 4 of the amended statement of claim that the 3rd defendant put the 2nd defendant in possesson of a portion of the said premises on payment of an agreed amount of N12,000.00 a year whilst the 3rd defendant retains the possession of the remaining portion of the said premises viz a Shop."

(Italics mine for emphasis).

It is clear that the figure of N6,000.00 could not be sustainable if the Appellants admitted paying N12,000.00 for just a portion of the premises. And this would have laid further credence to the evidence of the Respondents' expert witness, had these facts been available before the trial court.

There were two letters tendered by the Appellant in the Court of Appeal to wit. Exhibits FCA1 and FCA2 and they read as follows-

"G.O.K. Ajayi & Co.,

Unity House ([14 Floor)

37, Marina,

Lagos.

Sirs,

No. LD/680/78

A. Rossek & Another Vs. Batakoto Ltd. & 2 Others

In Re: 194, Broad Street, Lagos

We refer to the writ of summons served on our clients Marine & General Assurance Co. Ltd. who are in possession of the whole of the above premises.

We have our clients' instruction to forward their cheque for the sum of N18,000 representing the rents claimed at N6,000 per annum for 6th October, 1976 to 5th October, 1979.

Our Mr Akinbisehin will find time to see you at no distant date to try to effect settlement out of Court as our clients are not interested in giving up possession of the premises at the moment.

Please acknowledge receipt while thanking you for your continued co-operation.

Yours faithfully,

F. BAYO AKINBISEHIN & CO.

C.C. The Managing Director, Marine & General Ass. Co. Ltd., 194, Broad Street,

Lagos

Enc."

Exhibit FCA2 reads as follows:-"The Registrar,

High Court of Lagos,

Lagos.

Dear Sir,

SUIT LD/680/78

Antoinne Rossek, Diab Basr

Vs.

Batakoto Limited

Marine & General Ass. Co. Ltd., Mrs Abiola Elegbede:

Please be informed that the writ of Summons meant for Mrs Abiola Elegbede was served on our clients Marine & General Assurance Co. Ltd., we hereby return same as Mrs Abiola Elgbede is no more at the address on the writ. New address to the best of our knowledge is 1/9 Berkley Street, Lagos.

Thanks

Yours faithfully,

F. Bayo Akinbisehin & Co.

CC. Messrs G.O.K. Ajayi & Co., Solicitors,

Unity House (14 Floor) Lagos.

Above for your information and necessary action.

F. Bayo Akinbisehin & Co."

The Court of Appeal made reference to these letters and, rightly in my view, resolved the issue or mesne profits when it held as per Nnaemeka-Agu-

"It is clear from these two letters that, on the admission of the appellants' solicitors, at the time the writ was served the 3rd defendant was no longer occupying the premises and that as at the date of the letter i.e. the 3rd defendant had quit the premises and that the offer of N18,000.00 as rents which the 2nd defendant made was for the whole premises, and not just for a portion of it. Coupled with the other evidence on record particularly that of the valuer, P.W.1, that the appellants were the occupiers of the premises it is perfectly clear that the evidence of Stephen Oguniyi, the only witness called by the defence on the point, is false. I do not believe that they occupy only a portion of the premises. I find that they occupy the whole premises.

Now from the uncontradicted evidence of P.W.1 Samuel kayode Oludemi, the valuer, it is clear that the annual rental value of the premises is N60,000.00"

I agree with the Court of Appeal and I am of the opinion that their finding is un-impeachable when the court held-

"It is my view therefore that if the appellants are liable at all, they are liable in a sum of N60,000.00 per annum as mesne profits."

I have no doubt, for all these reasons, that there is no merit in this appeal, and that the Court of Appeal was right to have dismissed the appeal against the clear and well-reasoned judgment of Akibo Savage J. in the High Court.

Both learned Counsel have indicated to us that the premises have now in fact been sold to the appellants, and this would amount in law to "giving up possession" which the Appellants held of the Respondents as statutory tenants.

The appeal is hereby dismissed. The appellants shall pay N60,000.00 per annum mesne profits but only up to the date the property changed hands by sale to the Appellants.

Costs of N300.00 to Respondents.

Uwais, J.S.C.-I had a preview of the judgment read my learned brother Eso, J.S.C. I entirely agree with the judgment and the order contained therein. I have nothing to add.

Coker, J.S.C.-Having had a preview of the draft of the judgment just delivered by my learned brother ESO, J.S.C., and after careful consideration of the arguments of counsel, I agree that this appeal has no merit and should be dismissed. As there is nothing significant in any of the points raised by counsel I do not consider it necessary to add anything further to what has been ably stated by my said learned brother.

I too will dismiss the appeal and also agree to the costs of N300.00 to the Respondents.

Karibi-Whyte, J.S.C.-I have had the privilege of a preview of the judgment of my learned brother Kayode Eso, J.S.C. in this appeal. I agree entirely with his reasoning and the conclusion that the finding of the Court of Appeal is unimpeachable. I too dismiss this appeal. I award costs of N300 to the Respondent.

Oputa, J.S.C.-I have had the privilege of a preview in draft of the lead judgment just read by my learned brother and Presiding Justice Eso, J.S.C. I am in complete agreement with him that this appeal should be dismissed.

The facts and the law were fully dealt with in the lead judgment of Nnaemeka-Agu, J.C.A. to which Ademola and Uthman Mohammed, JJ. C.A. both concurred. The facts, which are not in dispute are as follows:-

The Plaintiff/Company and Respondent in this Court was the owner of the premises situate at No. 194 Broad Street, Lagos.

2.      By a written agreement, the Plaintiff let the premises aforementioned to Batakoto Ltd. (sued in the original action as 1st Defendant) for six years with effect from 6th October, 1970 at the rent of N6,000.00 per annum,

3.      This tenancy expired by effluxion of time on 6th October, 1976.

4.      Before the end of the tenancy, the 1st Defendant sublet the premises to one Mrs Abiola Elegbede who was sued as 3rd Defendant.

5.      Subsequently the 3rd Defendant sublet the premises to Marine and General Assurance Company Ltd. who was sued as 2nd Defendant.

6.      The Plaintiff sued the three Defendants and in his amended Statement of Claim, claimed possession of the premises and N60,000.00 per annum as mesne profits from 6th October 1976 until possession is given up.

7.      It was discovered that the 1st Defendant was not in possession of the premises so the necessary Notices were served on the 2nd and 3rd Defendants respectively.

8.      The 3rd Defendant vacated the premises before pleadings were filed. It was thus only the 2nd Defendant who filed a Statement of Defence. It was thus a straightforward fight between the Plaintiff and the 2nd Defendant.

9.      From the pleadings of the parties; the only issue that went to trial was whether the liability of the 2nd Defendant for mesne profits was the amount of N60,000.00 per annum agreed between the Plaintiff and the 1st Defendant as rent from 6th October 1970 to 6th October 1976 OR the N60,000.00 being the current rent of the premises as claimed by the Plaintiff.

10.    At the trial the Plaintiff called as P.W.1 one Mr S.K. Oludemi, a qualified Valuer who assessed the current rental value of the premises at No. 194 Broad Street, Lagos at N60,000.00 per annum.

11.    The learned trial Judge found for the Plaintiff, gave him judgment for possession and awarded him N690.00 per annum as mesne profits.

12.    The 2nd Defendant appealed against the judgment of the trial court to the Court of Appeal Lagos Division. That Court dismissed its appeal.

11.

13.    The Defendant/Company has now appealed to this Court.

The above in chronological order is the sequence of