ODUTOLA VS PAPERSACK (NIG) LTD[i]:
WHAT IT DECIDED; WHAT IT DECIDED NOT
By
M.A.ETTI*[ii]
Abstract
There is nothing more worrisome than an ambiguous law, statutory or judicial, which lends itself to varied and contradictory interpretations resulting in conflicting positions and baffling perspectives of its enforcers. If that is different from the Hobbesian state of nature, it is liken to a theatre of jungle justice where every similar case is treated differently according to the whims and caprices of any person who wields judicial power at any given time. The case under review is riddled with inexplicable pronouncements which are not only at variance with the facts of the case itself but also with established principles of tenancy law. That disheartening situation has infected the lower courts.Many crucial issues were left unattended to and critical questions unanswered. More than a decade after, the case remains a subject of debate as it affects socio-economic-legal relations of not only citizens but also foreigners in the property sector of the economy.
Key Words: fixed tenancy, tenant at will, yearly tenant, valid notice,
- INTRODUCTION
Like any cause of action, a tenancy matter has its peculiarities. Besides a claim for possession, arrears of rent and mesne profits or damages for use and occupation, there are other issues involved in a tenancy matter which may turn a naturally simple case to a complex suit. Examples are necessity of a pre-action notice, validity of a pre-action notice such as a quit notice as regards the length of notice, the particulars of the notice, the authority to issue the notice, the expiry date of the notice, mode and date of service of the notice, cancellation of the notice, issue of two notices, creation of new tenancy during the pendency of the notice, nature of the tenancy, the tenancy period and severance of the heads of claim.
Of those issues concerning the quit notice, a dispute over the length of the notice is predominant. Such a dispute may arise from the wrong calculation of the exact length of notice such as the number of days to reckon or the first or the last day of the period. For example, a month may have 28, 29, 30 or 31 days. Thus, thirty days may not necessarily mean one month. Accordingly, a notice given in the middle of the month may pose a problem in the calculation of the exact length of required notice. In Oyekoya v G.B.Olivant (Nig) Ltd[iii] the Supreme Court held that one month’s notice given on 2 March 1962 would expire on 30 April 1962 thereby giving the tenant more than 50 days as one month. The rationale is that since the notice must expire on the last day of the month which was 31 March, the notice ought to have been given before 2 March. Thus the calculation commenced on 1 April to end on 30 April. The phrase clear days has ,therefore, been adopted to avoid such confusion.[iv]
Beyond the exactitude of the calculation of the length of quit notice, establishing the nature of the tenancy is as important as the existence of the tenancy itself in ascertaining the type or length of required notice to determine the tenancy. In the absence of tenancy agreement as to notice, the Tenancy Law prescribes the length of notice in accordance with the nature of the tenancy or mode of payment.[v]
The case under review borders on a dispute over the true nature of the tenancy with a view to ascertaining the type or length of notice required to determine the tenancy. The case also decided that nature of the tenancy may, by agreement, change from time to time. Accordingly, the case did not establish a new principle of law. It rather restated the established principles of law of tenancy (as specie of the law of contract and property law) regarding the legal relations of parties and length of notice required to determine the particular tenancy relationship.
However, the rule in that case has been misconstrued over the years owing to not only irreconcilable pronouncements but also unresolved matters in the case, so much so that more than a decade after the case, the true purport of the rule is still being debated. And that is the focus of this paper.
II FACTS OF THE CASE
The 1st plaintiff was the founder and Managing Director of the 2nd plaintiff. The 1st plaintiff originally owned the premises known as 44, Eric Moore Road, Iganmu Industrial Estate, Lagos State comprising warehouse and office premises which were let to Thoresen and Co. (Nig.) Ltd under a five-year lease or fixed tenancy which expired on 31 May 1980.The 2nd plaintiff was the assignee of the unexpired term and interest in the said property with effect from 13 December 1991.
However, Thoresen and Co. (Nig.) Ltd did not pay for the whole lease at once. Rather, at the commencement of the lease, it paid the rent for the first two years and paid for the remaining three years annually in advance. It continued to pay rent annually even after its lease expired in 1980 until 1982 when its sister company, Papersack Nigeria Limited (Defendant at the trial court but Respondent at the Supreme Court) took possession of the premises without the consent of the landlord. The latter then took over the annual payment of rent from 1982.[vi]
On 24 April 1982 Chief Aboderin, owner of the two sister companies, appealed for time in a letter described by the Supreme Court as a ‘pathetic letter of appeal for understanding and leniency’. It read in part thus: ‘… We have started moving the old machinery from the jute bag factory and as soon as this is completed, we will start renovation, hence we are appealing to you to let us stay here for the next six months and we will definitely vacate here on or about December, 1982.’
However, rather than vacate the premises as promised, the defendant (Papersack Nigeria Limited) paid rent on yearly basis and the 2nd plaintiff issued the rent receipt. It should be noted that Thoresen & Co. (Nig.) Ltd. also paid the last three years of the five-year lease annually. Meanwhile, the 1st plaintiff’s solicitors forwarded a lease agreement to the defendant to create a new tenancy between the parties. By its letter of 18 September 1985, the defendant, rather than execute the said lease agreement, raised a six-point comment on the lease agreement and requested the 1st plaintiff’s solicitors to amend the draft lease accordingly. Nevertheless, the said lease agreement was not amended and, therefore, not executed by the parties.
Eventually, the 2nd plaintiff gave the defendant a six months’ notice to quit dated 23 July 1992 to terminate the tenancy on 31 January 1993 and a Seven days’ Notice of Owner’s Intention to apply to Recover Possession was given on 1st February 1993.
Thereafter, the plaintiffs filed the suit LD/2209/93 on 22 July 1993. They claimed possession, outstanding money for use and occupation, and mesne profits. The defendant filed a counter-claim.
Although the case of the defendant was that it was a yearly tenant who paid annually and that was why it was given a six months’ notice to quit, it contended that the said notice was invalid because (a) it did not expire on the eve of the anniversary of the tenancy and (b) the 2nd plaintiff was not competent to issue it.
The case of the plaintiffs was that the defendant was a tenant at will having moved into the property without the consent of the landlord or tenancy agreement particularly after the expiration of the extended time granted to it to stay on the premises till 31 December 1982.
It is instructive to note that at the time the cause of action arose, the applicable law was the Rent Control and Recovery of Residential Premises Law, Cap. 167. Laws of Lagos State1994.
The learned trial Judge, Adeyinka J, in a judgment dated 22 May 1998 held that the defendant was a tenant at will and should vacate the premises forthwith and pay (damages) for the use and occupation of the premises from 1 June 1989 to 31 May 1994 and mesne profits from 1 June 1994 till possession was given up.
The defendant’s appeal to the Court of Appeal was allowed. The Court of Appeal held in its judgment dated 1 July 2003[vii]that the defendant was a yearly tenant by reason of the fact that it paid rent annually and was given a six months’ notice to quit and the Plaintiff’s witness testified under cross examination that the defendant was a yearly tenant indicating that the parties understood the tenancy to be a yearly tenancy. The judgment of the High Court was set aside.
It should be noted that the Plaintiff’s claims were three: (a) possession; (b) outstanding money for the use and occupation of the premises; (c) mesne profits.
The issue of the nature of the possession or occupation of the premises by the defendant was tied to (b) above. The Plaintiffs deliberately prayed for outstanding money for the use and occupation of the premises which is damages for trespass or holding over. And that was what the trial court awarded in its judgment. However, in overturning the trial court’s judgment, the Court of Appeal, having held that the defendant was a yearly tenant whose tenancy was not validly determined, changed the award to arrears of rent.
The plaintiffs, therefore, appealed to the Supreme Court which unanimously overturned the judgment of the Court of Appeal and restored the judgment of the trial court. The Supreme Court held that:(a) the defendant was a tenant at will who was entitled to seven days’ quit notice and it was given sufficient notice; (b) although the original tenant was not a tenant at will, the tenancy between the parties was a tenancy at will (c) the alleged yearly tenancy between the parties was not proved; (d) consequently, the tenancy was validly determined.
III. THE FUNDAMENTAL QUESTIONS
Although without consent of the 1st plaintiff, Papersack Nigeria Limited replaced Thoresen & Co. (Nig.) Ltd as a rent paying occupant of the premises and thus became a tenant of the 1st plaintiff. Being different entities, their tenancies were distinct. When and how did the tenancy of Thoresen & Co. (Nig.) Ltd come to an end? What was the nature of the tenancy of Papersack Nigeria Limited and when did it commence? Was the tenancy of Papersack Nigeria Limited validly determined? These were some of the fundamental questions in the case.
- When and how did the tenancy of Thoresen & Co. (Nig.) Ltd come to an end?
The tenancy of Thoresen & Co. (Nig.) Ltd was a five-year term certain or fixed term tenancy from 1 June 1975 to 31 May 1980. It came to an end by effluxion of time without any need for a quit notice:section 15 of the Rent Control and Recovery of Residential Premises Law, Cap. 167. Laws of Lagos State1994.
- What was the nature of the tenancy of Papersack Nigeria Limited and when did it commence?
This is the crux of the matter. It should be noted that from 1 June 1977 to 31 May 1980 Thoresen & Co. (Nig.) Ltd paid the remaining three years of the five-year lease annually. At the end of the lease period in 1980 Thoresen & Co. (Nig.) Ltd continued to pay annually until Papersack Nigeria Limited moved onto the premises without consent of the 1st Plaintiff and, the owners of the two sister companies being the same, the rent was later paid in the name of Papersack Nigeria Limited. Thereafter, the 1st plaintiff gave Thoresen & Co. (Nig.) Ltd a notice to vacate the premises. No doubt, the notice must have been a mere signal and not a statutory notice because the statutory notices were given in 1992 and 1993.[viii]
However, in a letter dated 24 April 1982 (exhibit P2), Chief Aboderin, owner of the two sister companies, appealed for time in the following words: ‘… We have started moving the old machinery from the jute bag factory and as soon as this is completed, we will start renovation, hence we are appealing to you to let us stay here for the next six months and we will definitely vacate here on or about December, 1982.’
The request which was written on the letter head of Paper and Allied Producing Company Limited, (probably another sister company or the original name of Papersack Nigeria Limited),was granted but the promise to vacate the premises by December 1982 was not fulfilled. Meanwhile, the draft lease of 1985 in favour of Papersack Nigeria Limited was not executed.
When did the tenancy of Papersack Nigeria Limited commence? Was it when it took possession without the consent of the landlord? Was it when the letter of appeal for time was granted? Was it when annual rent was paid on behalf of Papersack Nigeria Limited? Was it when it took possession while Thoresen & Co. (Nig.) Ltd. was holding over after its fixed term tenancy expired by effluxion of time?
- Was the tenancy of Papersack Nigeria Limited validly determined? The answer to this question depends on the perspective of the salient facts.
- TWO MAJOR PERSPECTIVES OF THE SALIENT FACTS
The fact of request for time and the grant of it may be interpreted in two major ways, namely, (a) an extension of the existing tenancy of Thoresen and Co. (Nig.) Limited; (b) a creation of a tenancy at will.
The annual rent paid after the expiration of the five-year lease (while Thoresen and Co. (Nig.) Limited was in possession and after Papersack Nigeria Limited took possession) may be interpreted in two major ways, namely, (a) a creation of a tenancy at will which requires a seven-day notice to quit;(b) a creation of a yearly tenancy which requires a six-month notice to quit. In fact the Plaintiff’s witness testified that,
“As far as Blocks B and C are concerned, Papersack succeeded Thoresen as tenant. The defendants are one year tenant. The N200,000.00 per annum is not the current rent. I did not negotiate revision of rent.”
The three courts which decided the case were divided along these two perspectives. While the trial court and the Supreme Court held the defendant (Papersack Nigeria Limited) to be a tenant at will, the Court of Appeal held it to be a yearly tenant. Consequently, the trial court and the Supreme Court held that the defendant required a seven-day notice to quit and that the notice to quit issued to the defendant was sufficient and, therefore, valid.
On the other hand, the Court of Appeal held that the defendant was a yearly tenant entitled to the six-month notice to quit issued to it but the said notice (dated 23 July 1992 to expire on 31 January 1993) did not terminate the tenancy (which ran from 1stJune to 31stMay) on the appropriate date (31stMay) being the eve of the anniversary and, therefore, invalid.[ix]
Having resolved that the tenancy was a tenancy at will, the trial court and the Supreme Court relied on the following provision to determine the appropriate length of notice:
Section 15 (1)(a) of the Rent Control and Recovery of Residential Premises Law, Cap. 167, Laws of Lagos State1994:
“Where there is no express stipulation as to the notice to be given by either party to determine the tenancy the following periods of time shall be given: (a) in the case of a tenancy at will or a weekly tenancy, a week’s notice.”[x]
- THE MISCONCEPTION AND ITS BASIS: STATEMENTS IN THE JUDGMENT OF THE SUPREME COURT WHICH APPEAR TO HAVE MISLED MANY READERS
As regards determination of tenancy, there are three categories namely, (a) a tenancy which expires by effluxion of time and requires no quit notice such as a fixed term or term certain tenancy except where the lease or tenancy agreement stipulates otherwise;[xi] (b) a tenancy which expires by operation of law. For example, a monthly tenancy in arrears of rent of a considerable length of time stipulated by law;[xii] (c) a tenancy which expires at the end of the time given in a notice to quit such as a yearly tenancy.[xiii]
Length of notice in a quit notice ranges from one week’s notice to six months’ notice. Except the tenancy agreement stipulates otherwise, the various tenancy laws of Lagos State have always provided for one week’s notice to determine a tenancy at will.[xiv]
Once a tenancy is determined by any of the three major modes mentioned above, but the tenant holds over, what remains to issue is a seven-day Notice of Owner’s Intention to Apply to Recover Possession.[xv]The Supreme Court restated this principle in Ihenacho v. Uzochukwu as follows:
A landlord desiring to recover possession of premises let to his tenant shall firstly; unless the tenancy has already expired, determine the tenancy by service on the defendant of an appropriate notice to quit. On the determination of the tenancy, he shall serve the tenant with the statutory 7 days’ notice of his intention to apply to the Court to recover possession of the premises. Thereafter the landlord shall file his action in Court and may only proceed to recover possession of the premises according to law in terms of the judgment of Court in the action.[xvi]
Thus, where a tenancy (such as a tenancy at will) requires a seven-day notice to quit, two seven-day notices are issued – one is a notice to quit and the other is a Notice of Owner’s Intention to Apply to Recover Possession: Amalgamated Press of Nig. Ltd. v Haastrup.[xvii] One notice does not take the place of the other. Regrettably, with respect, some pronouncements in the judgment under review reproduced hereunder are misleading:
- “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.” Per Onnoghen JSC. (Underline supplied).
With profound respect, a seven days’ notice of intention of the landlord to recover possession is not a quit notice and, therefore, does not determine a tenancy. The applicable law which governed the tenancy provided for two notices to be issued to a tenant at will – notice to quit and notice of intention to proceed to recover possession.[xviii]
- ‘In exhibit P6, the solicitors of the 1st appellant gave the respondent seven days’ notice to quit. The notice was given on 1st February 1993. The last paragraph of the exhibit reads: “We shall on the 10th day of February, 1993, apply to the court for a summons to eject any person therefrom.” I do not think I should take the issue further. The notice, exhibit P6, is valid.’ Per Tobi JSC
With profound respect, the defendant was issued a six-month notice to quit which partly informed the reasoning of the Court of Appeal that the tenancy was a yearly tenancy. Neither the Plaintiffs nor the defendant asserted or submitted that the defendant was given seven days’ notice to quit. On the one hand, the case of the Plaintiffs was that the defendant was a tenant at will and the six months’ notice to quit given it was sufficient. On the other hand, the case of the defendant was that the six months’ notice to quit given to it was invalid because, inter alia, it terminated the tenancy on a wrong date (31 January 1993) instead of 31 May 1993 being the eve of the anniversary of the tenancy.
Indeed, His Lordship referred to it at different places, for example, “As indicated above, the Court of Appeal saw the six months notice as an admission on the part of the appellants of the existence of a yearly tenancy.”
Besides, a portion of the said notice (exhibit P6) which His Lordship quoted above as saying “We shall on the 10th day of February, 1993, apply to the court for a summons to eject any person therefrom” buttresses the point that the notice in question was not a quit notice but a notice of intention of the landlord to recover possession (Form E). The phrase, apply to the court for a summons to eject any person therefrom, is the language of Form E in schedule 1 of the applicable law.
Furthermore, from the judgment of the Court of Appeal, the quit notice was exhibit P5 dated the 23 July 1992 to expire on 31 January 1993.[xix] It was after the purported termination of the tenancy by exhibit P5 on 31 January 1993 that exhibit P6 “was given on 1st February 1993.”[xx]It is instructive to note that 31 January 1993 was a Sunday. The seven days’ notice (in exhibit P6) beginning from Monday 1 February 1993 (and excluding Saturday February 6thand Sunday February 7th) expired on 9 February 1993. Thus, the defendant was notified (in exhibit P6) that unless possession was surrendered, the plaintiffs would approach the court on 10 February 1993.
It is, therefore, surprising that exhibit P5 (the quit notice) was not mentioned at all in the leading and concurring judgments of the Supreme Court. Rather, the court focused on exhibit P6 and erroneously cloaked it with the status of a quit notice. It was as if only one notice was issued. And if, as stated by their Lordships that exhibit P6 was a quit notice, then the Plaintiffs’ case should have failed for not issuing a notice of intention of the landlord to recover possession as held in numerous cases including Ihenacho v. Uzochukwu;[xxi]Sule v. Nigeria Cotton Board;[xxii]Pan Asian Ltd. v. N.I.C.O.N. Ltd;[xxiii] Cedar v. M.G.A. Plc.[xxiv]
Happily, His Lordship decided not to “take the issue further.”Indeed, any further discussion of the issue would have made the situation worse. Regrettably, however, such an abrupt end of the analysis of the issue, with profound respect, was not impressive.
- “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 or failed to secure a tenancy agreement in respect of the property …I am of the firm view that 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 thereupon became a tenant at will to the 1st appellant by continuing or remaining in possession of the property. Per Onu JSC
- “I hold the view that 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 …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. Per Onnoghen JSC
The first observation is that each of the last two reproduced pronouncements (c) and (d) appear to have been a plagiarism of the other. They will, therefore, be treated together.
The law governing the disputed tenancy (whether it is regarded as a yearly tenancy or a tenancy at will) prescribed two distinct notices – notice to quit and notice of intention of the landlord to recover possession.[xxv]Indeed, specimens of the two types of notices are provided in schedule 1 of the said law.[xxvi] One notice does not take the place of the other. The former notice is required when the landlord no longer want to continue the subsisting tenancy. The latter is required when the tenant holds over after the former expires or the tenancy has ceased.
Sources of the principles guiding determination of a tenancy are three: tenancy agreement, statute and common law. Tenancy agreement is a contract and, on the principle of sanctity of contract, it takes precedence over other sources. Statute comes next in the absence of tenancy agreement. Common law rules come last.
In the reproduced pronouncements in (c) and (d), the court held that the parties did not create a yearly tenancy but that even if they did, the purported yearly tenancy expired by effluxion of time when it fell into arrears and the defendant thereby became a tenant at will.
With profound respect, not in any of the three sources of the principles guiding a tenancy is any justification for the proposition that a yearly tenancy, if any, created by the parties came to an end by effluxion of time and the respondent thereby became a tenant at will. Such a proposition can only be true by agreement of the parties which in this case was inexistent.
Indeed, the English common law courts have held that, “There is no rule that where a tenant holds over after the previous tenancy has been determined, the tender and acceptance of rent raises a presumption of a periodic tenancy. In deciding whether a periodic tenancy has come into existence, in such a case, the court must look at the intention of the parties and all the surrounding circumstances.”[xxvii]
Furthermore, the statement was an obiter. The issues before the Supreme Court were:
- Whether the learned Justices of the lower court were not wrong when they held that a yearly tenancy agreement existed between the appellants and the respondent.
2. Whether the learned Justices of the lower court were not wrong when they held that the notices given to the respondent to give up possession of the premises were not valid. - Whether the learned Justices of the lower court were not wrong when they held evidence of issuance of receipt in the name of the 2nd appellant to the respondent in lieu of the deed of assignment could not by any means amount to proof of assignment of the property to the 2nd appellant
4. Whether the learned Justices of the lower court were not wrong in holding that the 2nd appellant appellants were not entitled to mesne profit on the ground that no valid notice to quit was issued when there was a continuous use and occupation of the premises by the respondent without the payment of rents.
Hence no issue was submitted to the court to decide whether the tenancy of the defendant changed from one type to another or whether the tenancy was determined by effluxion of time or operation of law. The issue before the court was whether a yearly tenancy agreement existed between the parties. That is, whether the defendant was a yearly tenant (or a tenant at will) and whether its tenancy was validly determined.
Thus the ratio of the case (vis a vis the issue) was that the defendant was not a yearly tenant but a tenant at will whose tenancy was validly determined. The ratio was not that the defendant was a yearly tenant who became a tenant at will. Even though some statements in the concurring judgments are to that effect, such statements do not constitute the ratio since they have no direct bearing on the issues. Indeed, the Supreme Court affirmed the finding of the trial court that no yearly tenancy was created by the parties.
There are other statements in the leading judgment which appear to be misleading. They relate to whether the defendant was a yearly tenant who became a tenant at will. Consider the following from the leading judgment:
Exhibit P1 is the hub of the transaction as it affects the content of yearly tenancy. It is the alpha and omega in the sense that it begins and ends the content of yearly tenancy in the transaction. It says it all. The lease was for a fixed period of five years. It was to terminate “during 1980”. Rent was paid for the first two years. Rent for the remaining three years was payable annually in advance. That is the language of exhibit P1. Nobody can quarrel with the position in exhibit P1 because it is clear, very clear indeed. Per Tobi JSC. (Underline supplied).
While I agree that a tenancy at will can be convened to a yearly tenancy and vice-versa, the position in this case is that it is the yearly tenancy that was converted to a tenancy at will. And here, I hold that when the yearly tenancy ended in 1980, the tenancy at will commenced and the “holding over” started immediately thereafter. In Pan Asian African Co. Ltd. v. National Insurance Corporation (Nig.) Ltd. (1982) All NLR 229, this court held that holding over with consent of the landlord makes the tenant, a tenant at will. (Underline supplied).
Exhibit P1 which I reproduced earlier is the mother of all the exhibits. It started the events and told a story of the termination of the yearly tenancy in 1980. This was in the letter sent by Thoresen and Co. (Nig.) Ltd. Although things changed when the respondent came into the tenancy, they did not change in favour of the respondent to the extent of a continuing yearly tenancy.
Invariably, the court mixed yearly tenancy up with fixed tenancy by holding that “the yearly tenancy ended in 1980” after holding that “Exhibit P1 is the hub of the transaction… It says it all. The lease was for a fixed period of five years. It was to terminate “during 1980”.(Underline supplied).
A periodic tenancy may be weekly, monthly, quarterly, half-yearly or yearly. It continues automatically from period to period until determined at the end of any period by any known mode such as quit notice, operation of law or breach of covenant. A fixed tenancy or term certain tenancy is one with definite duration and expires automatically at the end of the fixed term except as varied by agreement. A tenancy at will is one held at the will of the landlord. It may be created by express agreement or conduct of the parties or operation of law.
There were three major arguments in support of the proposition that the defendant was a yearly tenant: (a) oral tenancy agreement; (b) payment of annual rent and; (c) service of a six-month quit notice. The Court of Appeal based its judgment that the defendant was a yearly tenant mainly on the fact of payment of annual rent, service of a six-month quit notice and the admission of the plaintiffs’ witness under cross examination. In its leading judgment, the Supreme Court rejected the submission that the defendant was a yearly tenant and faulted the Court of Appeal on this issue.
As noted above, the court, with respect, confuses the nature of the tenancy. Another statement from the leading judgment says “the evidence show that the parties started with a yearly tenancy which finally became a tenancy at will by operation of law”. This is surprising because there was no such evidence. Indeed, it is in conflict with the finding of the trial court which the Supreme Court upheld. It runs thus:
“The plaintiffs case was that after the expiration of the fixed term of Thoresen and Co. (Nig.) Ltd. in 1980, i.e. 31/5/80, the defendant took possession of the warehouse without 1st plaintiff’s consent but upon the late Chief Aboderin’s letter of 24/4/82 asking for time to pack out, the 1st appellant agreed that the defendant remain in the premises till 31/12/82. The respondent did not move out of the warehouse on 31/12/82 and remained there until 1985 when there were moves by the 1st plaintiff and the defendant to create a new tenancy which did not materialise.”
As His Lordship, Niki Tobi JSC asked: “What is the evidence before the court?”While the Supreme Court disagreed with the Court of Appeal on some points, it agreed with the trial court in toto. The following was part of the finding of the trial court:
“The defendant then continued in occupation of the warehouse as a trespasser and as per 1st plaintiff’s Tabulation exhibits P3, the defendant paid rent to the 1st plaintiff. The acceptance of rent from the defendant was not per se evidence of a new tenancy. The court will have to determine whether in the circumstances of this case, a new tenancy was created between the parties see Udih v. Izedunmwem (1990) 2 NWLR (Pt.132) 357. The 1st plaintiff solicitors forwarded a lease agreement to the defendant which if it had been approved or executed by the defendant would have created a new tenancy between the parties, rather the defendant by its letter of 18/9/85 exhibit D9 raised a six points comments on the lease agreement and requested the 1st plaintiff solicitors to amend the draft lease accordingly. It follows that no new written yearly tenancy was created between the parties. An oral yearly tenancy agreement could not have been created by the parties in May 1982 as testified by the 1st DW in view of the late Chief Aboderin’s letter dated 24/4/82 pleading for an extension of time till 31/12/82 to move out of the warehouse. The defendant thereafter remained a Tenant at-will paying rent.” (Underline supplied).
As the trial court held that no new yearly tenancy was created between the parties, what was the old tenancy? Of course, the old tenancy was the tenancy created or existing before then. And that was the tenancy at will which was created by the Plaintiff’s consent to the plea in the letter of Chief Aboderin. This is because when the fixed tenancy expired by effluxion of time in 1980, Thoresen and Co. (Nig.) or the defendant or whoever in occupation would have become a trespasser but for the consent granted to Chief Aboderin’s letter for time. The trial court referred to it thus: “The defendant then continued in occupation of the warehouse as a trespasser… The defendant thereafter remained a Tenant at-will paying rent.”
It should be noted that the letter was written in April 1982. What then was the status of the defendant (or the occupant of the premises) between June 1980 (when the lease expired) and April 1982? Was it a trespasser or tenant at will? This question was not clearly addressed, even though the trial court mentioned it in passing. I think it depends on who was in possession. If Thoresen and Co. (Nig.) was in possession within that period, it was a statutory tenant, having taken initial possession lawfully. If the defendant was in possession within that period, it was a trespasser having taken possession without landlord’s consent.
However, with the approval of the request for time, a tenancy at will was created. Upon the expiration of the time granted as contained in the said letter, the Plaintiffs continued to collect rent from the defendant. That made the trial court hold that,“ The defendant thereafter remained a Tenant at-will paying rent.” Apparently, the trial court considered four factors which guided it: (a) defendant’s initial possession without consent; (b) approval of request for time; (c) payment of rent; (d) failure to execute a proposed lease. Thus, for the trial court (a) made it a trespasser; (b) made it a tenant at will; (c) & (d) sustained its status and it remained a tenant at-will.
Thus a tenancy at will which was created by the approval of Chief Aboderin’s letter requires a seven-day notice to quit which is covered by the six months’ notice given. That was the decision of the trial court which the Supreme Court upheld. Unfortunately, the Supreme Court treaded in the thorns of facts which made it confuse the facts and violate established principles of tenancy law.
- THE UNRESOLVED MATTERS
Although a court need not consider an issue if the issue has already been answered in the consideration of an earlier issue or if it has become academic so that considering it amounts to a waste of judicial time or if no submission was made on it, [xxviii] it is beyond doubt that some matters of considerable legal-socio-economic implications in the case were left unresolved or equivocal. Examples are:
- Whether the 2nd appellant was competent to issue the statutory notices. It was the third issue at the Court of Appeal and at the Supreme Court. Whereas the former pronounced on it the latter made no pronouncement on it either as having been resolved or having become academic.
- Whether it was damages for use and occupation or arrears of rent that the appellant was entitled to. It was integrated in the fourth issue at the Supreme Court but no pronouncement was made on it either as having been resolved or having become academic.
- Whether a notice of owner’s intention to apply to recover possession determines a tenancy or whether it is appropriate where the tenancy has not been determined.
- Whether a fixed term tenant or a tenant at will who holds over (after his tenancy is determined) becomes a trespasser liable to arrears of rent or damages for use and occupation.
- Whether a quit notice such as exhibit P5 in the case under review which, contrary to the state of the law at the time, did not terminate the tenancy on the eve of its anniversary was valid.
- Whether the counter claim was proved.
- Where a quit notice is mandatory, the law at the material time required it to determine the tenancy on the eve of the anniversary. See African Petroleum Ltd. v Owodunni.[xxix]. It was, therefore, consequential that, having held the tenancy to be a yearly tenancy, the Court of Appeal invalidated the quit notice. However, the trial court which held the tenancy to be a tenancy at will was concerned with the superfluous length of notice which was six months instead of one week and, therefore, appeared to be sympathetic towards the plaintiffs otherwise the quit notice, which despite being in excess of five and a half months terminated the tenancy on 31 January 1993 when its anniversary was 1st of June, could not have been valid in the light of the body of case law at the time. For example, in Awe v Saidi[xxx] the Supreme Court interpreted the phrase ‘at any time’ in s. 9 of the Recovery of the Premises Act (which is in pari material with section 16 Rent Control and Recovery of Residential Premises Law, Cap. 167, Laws of Lagos State 1994) in the following words, ‘the notice to quit may be given at any time earlier than the date which will fit it in for…’. The issue was whether the phrase ‘at any time’ would accommodate a quit notice which did not expire on the eve of the anniversary of the tenancy and whether it was invalid even though it gave the required length of notice. The decision which was based on the common law principle that the tenancy must be determined (or the quit notice must expire) on the eve of its anniversary(otherwise known as the end of the current term of the tenancy) has been followed in subsequent cases such as African Petroleum Ltd. v Owodunni,[xxxi] Nigerian Joint Agency Ltd v Arrow Engineering and General Transport Ltd.[xxxii]
VII. CONCLUSION
This case has shown that, although the Court of Appeal said that “the facts of the case are not complicated,”[xxxiii]different twists in the facts and circumstances of a case may produce legal mix-ups. The trial court addressed the main issue which assisted it in moving out of the legal web that the Supreme Court appears to have found itself. The trial court held thus: ‘The acceptance of rent from the defendant was not per se evidence of any new tenancy. The court will have to determine whether in the circumstances of this case, a new tenancy was created between the parties.’
The trial court found and held that the attempt to create a new tenancy was aborted when parties failed to execute the new agreement and since the original tenancy was a fixed term tenancy which had expired by effluxion of time in 1980, the defendant became a tenant at will by virtue of the approval of the request for time otherwise the defendant would have become a trespasser in the absence of consent of the landlord. Indeed, the trial court was emphatic that what was created was “a tenancy at will from 1/6/80 when Thoresen & Co. Ltd. ceased to be a tenant of the warehouse.” It should be noted that the Supreme Court did not fault the trial court in any of its findings. Rather, it affirmed them. Thus, if the tenancy changed in its nature at all, it was from fixed tenancy to tenancy at will and not from a yearly tenancy which never was. And the Supreme Court did not fault it. Surprisingly, the Supreme Court held that “the evidence show that the parties started with a yearly tenancy which finally became a tenancy at will by operation of law.”
With profound respect, that was a misapprehension of the evidence. Indeed, the Supreme Court did not indicate how the so called yearly tenancy was created after the original fixed tenancy expired. What the Supreme Court successfully showed was how the tenancy at will was created. Indeed, in one breath, the court rejected the argument that a yearly tenancy existed between the parties which changed to a tenancy at will. In another breath, the court held that a fixed tenancy did exist between the parties which changed to a tenancy at will. Little wonder, therefore, that the case has been described as being fundamentally unsound and inexcusably misleading.[xxxiv]Another learned author posited thus:
“Indeed, if the Court in that case intended to apply the existing law on the creation and/or termination of leases and tenancies, then there are good reasons to believe that the case was wrongly decided. If, on the other hand, the Court actually intended to redefine the law or introduce a change in judicial policy, then such an exercise was grossly misconceived and pathetically flawed. And since there was no clear basis for any change in law or policy in this regard, then the decision in Odutola v Papersack may best be described as an “accidental discharge”.[xxxv]
What then was decided? As shown above, some pronouncements in the case have led to misunderstanding and misstatements of what were the findings, holdings, obita and ratio of the case. Since there are contradictory statements in the case itself, it is not surprising that there are divergent views of what the case decided so much so that lower courts are not free from the same error. For example, in Bocas Nigeria Limited v. Wemabod Estates Limited[xxxvi]the Court of Appeal held thus:
“In Odutola v. Papersack Nig. Ltd. (2006) 18 NWLR (Pt 1012) 470 SC …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… 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…
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.” Per Augie, J.C.A.
With profound respect, first, the trial Court did not hold that it was a tenancy at will, which was determined by the seven-day notice served by the landlord. Second, there was no yearly tenancy between the parties and the judgment of the trial court which the Supreme Court (unlike the Court of Appeal) affirmed without any variation did not say that the defendant was ever a yearly tenant. Third, there is no basis for the statement that “a tenancy at will is determinable by seven days’ notice of intention of the landlord to recover possession.”A notice of intention of the landlord to recover possession does not determine tenancy. More importantly, the Rent Control and Recovery of Residential Premises Law, Cap. 167, Laws of Lagos State 1994 which was the applicable law relied upon by all the three courts provided for quit notice (to determine the tenancy) and a notice of owner’s intention to apply to recover possession in two separate sections.[xxxvii]
A similar pronouncement that lessee in arrears of rent automatically becomes a tenant at will can be found in Uhuangho v. Edegbe (2017) LPELR-42162(CA) thus:
We cannot lose sight of the fact that the Appellant was already in arrears of rent when the notice to quit was issued. This action or inaction of the tenant had automatically placed the Tenant/Appellant in the position of tenant at will, which situation had been expressly stated in the case of Odutola v. Papersack Nig. Ltd (2006) 18 NWLR (Pt. 1012) 470 @ 474.
The point need be made that some decisions of the lower courts did not follow the dicta in Odutola v Papaersack. See, for example, Intl. P.S. LTD. v. Glover[xxxviii]
The answer to the question asked above about what was decided will be found in the established facts and findings, namely, (a) the original tenancy was a fixed tenancy; (b) it expired by effluxion of time; (c) the tenant was granted an application to remain on the premises by paying rent at the old rate; (d) the attempt to execute a new tenancy agreement was aborted; (e) the continued occupation of the premises was by permission of the landlord rather than by a formal tenancy agreement; (f) that permission was at the will of the landlord; (g) thus at the time of the dispute, the occupant was a tenant at will.
What then is the rule in this case?
The rule in this case is that a fixed term tenant who is permitted by the landlord to continue to occupy the premises after the expiration of the tenancy for one reason or the other, with or without rent, is a tenant at will entitled to a seven days’ notice to quit to determine the tenancy at will unless the contrary is proved. In other words, upon the expiration of a fixed term tenancy, the tenant holds nothing and his continued occupation is unlawful except by consent of the landlord, in which case, he becomes a tenant at will or by a new tenancy, the terms of which determines the nature of the new tenancy created thereby.
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[i] (2006) 18 NWLR (Pt.1012) 470 SC; (2006) 11-12 S.C. 60; (2006) LPELR-2259(SC)
[ii] B.Sc (Econ) Ed, LLB, B.L, ACIArb, a magistrate in the Lagos State Judiciary <bolaetti@gmail.com>. Many thanks to Ayinde Sanni & Co for permission to use its library.
[iii](1969) 1 All NLR 80
[iv]Re Railway Sleepers Supply Co. (1885) 29 Ch. 205.
[v] See, for example, Section 14 of the Rent Control and Recovery of Residential Premises Law, Cap. 167, Laws of Lagos State 1994. See also section 14 (2) Rent Control and Recovery of Residential Premises Law, Cap. R6 Laws of Lagos State 2003; section 13 (6) of the Tenancy Law of Lagos State 2011.
[vi]Papersack (Nig) v Odutola (2004) 13 NWLR (pt. 891) 509 @ 517 (CA)
[vii] Reported as Papersack (Nig) v Odutola (2004) 13 NWLR (pt. 891) 509 (CA)
[viii] The notice was referred to in paragraph 1 exhibit P2 as a precursor to the appeal for time thus: “No doubt your solicitors would have contacted you in respect of the notice given to us to vacate your premises. We have already informed them to appeal to you…”
[ix]Papersack (Nig) v Odutola (2004) 13 NWLR (pt. 891) 509 @ 517 (CA)
[x]This provision, though repealed in 1997, has been re-enacted in subsequent statutes. See for example, section 14 (1)(a) Rent Control and Recovery of Residential Premises Law, Cap. R6 Laws of Lagos State 2003; section 13 (1)(a) of the Tenancy Law of Lagos State 2011 .
[xi]See, for example, section 13 (5) of the Tenancy Law of Lagos State 2011.
[xii]See, for example, section 13 (2) and (3) of the Tenancy Law of Lagos State 2011 which provides that a monthly tenancy in arrears of rent for six months or a half-yearly tenancy in arrears of rent for one year shall lapse.
[xiii]See, for example, section 13 Rent Control and Recovery of Residential Premises Law, Cap. R6 Laws of Lagos State 2003; section 16 of the Tenancy Law of Lagos State 2011.
[xiv]See, for example, Section 15 (1)(a) of the Rent Control and Recovery of Residential Premises Law, Cap. 167, Laws of Lagos State1994; section 14 (1)(a) Rent Control and Recovery of Residential Premises Law, Cap. R6 Laws of Lagos State 2003; section 13 (1)(a) of the Tenancy Law of Lagos State 2011 .
[xv]See Section 14 of the Rent Control and Recovery of Residential Premises Law, Cap. 167, Laws of Lagos State1994; section 13 Rent Control and Recovery of Residential Premises Law, Cap. R6 Laws of Lagos State 2003; section 16 of the Tenancy Law of Lagos State 2011.
[xvi](1997) 2 NWLR (Pt. 487) 257 @ 269-270 SC
[xvii](1966) All NLR 346; a community reading of sections 14 and 15 of the Rent Control and Recovery of Residential Premises Law, Cap. 167, Laws of Lagos State1994; a community reading of sections 13 and 14(1)(a) Rent Control and Recovery of Residential Premises Law, Cap. R6 Laws of Lagos State 2003; a community reading of sections 13 (1)(a) and 16 of the Tenancy Law of Lagos State 2011.
[xviii] See Sections 14 & 15 and Schedule 1 of the Rent Control and Recovery of Residential Premises Law, Cap. 167, Laws of Lagos State1994 which prescribed Forms to issue. And the law has not changed till date.
[xix]Erroneously written as exhibit E5
[xx]Papersack (Nig) v Odutola (2004) 13 NWLR (pt. 891) 509 @ 517 (CA). 31 January 1993 was a Sunday. The seven days’ notice beginning from Monday 1 February 1993 (and excluding Saturday and Sunday) expired on 9 February 1993. Thus, the defendant was notified that unless possession was surrendered, the plaintiffs would approach the court on 10 February 1993.
[xxi](1997) 2 NWLR (Pt. 487) 257 @ 269-270 SC
[xxii](1985) 2 NWLR (pt 5) page 17.
[xxiii](1982) 13 NSCC 293
[xxiv](2001) 18 WRN 144 at 161
[xxv]Sections 14 & 15 of the Rent Control and Recovery of Residential Premises Law, Cap. 167, Laws of Lagos State1994
[xxvi]They are Forms B,C & D for quit notices and Form E for notice of intention of the landlord to recover possession.
[xxvii]London Baggage Company Ltd. v. Railtrack Plc[2000] EWHC 459 (Ch); [2000] EG 57; [2000] 80 P & CR D38
[xxviii]Chudi Verdical Company Ltd v. Ifesinachi Industries Nigeria Ltd (2018) LPELR-44701(SC)
[xxix](1991) LPELR-213(SC); (1991) 8 NWLR (pt 210) 391 SC
[xxx](1969) 6 NSCC 426@429
[xxxi](1991) LPELR-213(SC)
[xxxii](1970) 1 All NLR 324,
[xxxiii]Papersack (Nig) v Odutola (2004) 13 NWLR (pt. 891) 509 @ 515 (CA)
[xxxiv]Credited to Prof. Emeka Chianu in V.O. Obanya. Dotting The I’s And Crossing The T’s In Landlord, Tenant Relationship: Odutola V. Papersack Nigeria Limited In Perspective.
[xxxv]Vitus Okpara. Odutola v Papersack: A Deliberate Departure or mere Sleepwalking? The Gravitas Review of Business & Property Law, Vol.7 No.1 (March 2016) Page: 16. https://gravitasreview.com.ng/shop/odutola-v-papersack/<accessed 7 Sept 2019>
[xxxvi](2016) LPELR-40193(CA)
[xxxvii]See sections 14 and 15. Note that the said law commenced on 1 July 1976.
[xxxviii](2002) 7 NWLR (Pt. 765) 136, para E.
