Alhaja Sabalemotu Ayinke V. Alhaji Muniru Lawal & Ors (1994)

LawGlobal-Hub Lead Judgment Report

IGUH, J.S.C

In the Chief Magistrates court of the Lagos Magisterial District, holden at Yaba, Lagos State, the plaintiff, by a writ of summons filed on the 4th May, 1982 claimed against the defendants as follows:-

(i) Possession of one storey building consisting of 10 shops and 5 office apartments situate at No. 1, Aro Street, otherwise also known as No. 88B Docemo Street, Lagos; and

(ii) N1,000.00(One thousand Naira) per annum for the use and occupation of the said building and premises from the 15th July, 1978 until possession is given up.

The case duly proceeded to trial and evidence was led on behalf of the parties. At the conclusion of hearing, the learned trial Chief Magistrate after a review of the evidence entered judgment for the plaintiff against the defendants jointly and severally in the following terms-

It is hereby adjudged that the plaintiff do recover from the defendants possession of the premises; that is to say, that one storey building consisting of 10 shops and 5 rooms/offices at No. 1 Aro Street, also known as 88B Docemo Street, Lagos. It is further adjudged that the plaintiff do recover from the defendants jointly and severally the sum of N4,000.00 for use and occupation of the said premises from period 15/7/78 to date. It is ordered that the defendants having over stayed for four years should give up to the plaintiff immediate possession of the said premises.

The Defendants being dissatisfied with this judgment of the learned Chief Magistrate appealed to the High Court of Lagos which on the 2nd day of April, 1986 allowed the appeal and set aside the judgment and orders of the Chief Magistrates Court. Aggrieved with the said judgment of the High Court, the plaintiff with the leave of the High Court, appealed to the Court of Appeal, Lagos Division, which in a unanimous decision allowed the appeal on the 29th June, 1987 and restored the judgment of the Chief Magistrate. The Court below however reduced the amount awarded by the learned Chief Magistrate as mesne profits for the use and occupation of the said premises from N 1,000.00 to N2.00 per annum. The defendants were ordered to give up possession of the premises claimed by the plaintiff forthwith.

Dissatisfied with the said judgment of the Court of Appeal, the defendants, now appellants, on the 29th September, 1987 filed their notice and grounds of appeal to this court against this decision. The plaintiff, now cross-appellant, also filed a cross-appeal to this Court against only that part of the decision of the Court of Appeal which reduced the mesne profits awarded to him from N1,000.00 to N2.00 per annum.

The main appeal which was filed by the defendants was however not pursued and the same was on the 23rd June, 1993 struck out by this court for want of prosecution. This court is now concerned with the plaintiffs cross-appeal only.

I shall hereinafter refer to the plaintiff and the defendants in this judgment as the cross/appellant and cross-respondents respectively.

The cross-appellant, in his brief of argument, identified one single issue as calling for determination in this appeal. This issue is framed thus –

Whether or not a landlord can compute claim from a tenant holding over, and should be awarded, mesne profits at a rate higher than the annual rent reserved in the tenancy agreement between him and his tenant.

Although served with the cross-appellants brief together with the hearing notice in respect of this appeal, the cross-respondents neither filed their cross-respondents brief nor did they appear in court for the hearing of this appeal. I will now proceed to examine the issue as formulated by the cross-appellant as it seems to me clear that a determination thereof is enough to conclude this appeal.

It is desirable for a better appreciation of the issue that has arisen for consideration in this appeal to observe that the learned trial Chief Magistrate after a thorough evaluation of the evidence before him made inter alia the following findings of fact, namely –

(i) That there was a lease agreement, Exhibit A dated the 1st July, 1972 between the cross-appellant, as lessor, of the one part and the 1st cross/respondent as lessee, of the other part in respect of the property in issue.

(ii) That the lease agreement is for a period of six years certain commencing from the 15th July, 1972 and terminating on the 14th July, 1978.

(iii) That the interest of the 1st cross/respondent as lessee over the said property expired on the 14th July, 1978.

(iv) That after the expiration of the cross/respondents lease on the 14th July, 1978, the 1st cross/respondent held over the demised premises but ceased to be the cross-appellants tenant or lessee from the 15th July, 1978,

(v) That the cross-appellants claim for N1,000.00 per annum as mesne profits is entirely reasonable having regard to the rent collected by the 1st cross/respondent in respect of the property from the 15th July, 1978 up to the date of his judgment.

(vi) That the 1st cross/respondent held over the cross-appellants said property for four years.

(vii) That the cross/appellant was entitled to judgment for the immediate possession of the premises and mesne profits for the said period of four years.

The above findings are fully supported by abundant evidence before the court. It may also be mentioned that under the lease agreement between the parties, Exhibit A, the reserved annual rent payable by the 1st cross/respondent for the six years term created by the lease was fixed at N2.00. The issue that arises in this appeal is simply whether a landlord can claim mesne profits from a tenant holding over and whether such mesne profits can be awarded at a rate higher than the reserved rent stipulated in the tenancy agreement between the parties.

I dare say that the questions that arise for determination in this appeal seem to me entirely narrow. I should perhaps start with a casual examination of the term mesne profits.

Mesne profits has been described as the rents and profits which a tenant who holds over after the 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. As was explained by Goddard, L.J., the expression is another term for damages for trespass arising from the particular relationship of landlord and tenant. See Bramwell v. Bramwell (1942) 1KB. 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 and other v. Cenico Nigeria Limited., (1986) 3 NWLR (part 32) 846 at 851 – 856, Oputa, J.S.C. 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 tenants interest in the land has come to an end, or his claim is joined with a claim for possession (as in the case now on appeal).

I agree entirely with the above observations of Oputa, J.S.C. and fully endorse the same. In my view, the proposition of law is beyond dispute that a landlord is entitled to claim mesne profits from a tenant from the moment such a tenant ceases to hold the premises as tenant to the time he gives up possession thereof. The 1st appellant in the present case was the lessee of the cross-appellant in respect of the premises in issue from the 15th July, 1972 to the 14th July 1978.

His leasehold interest over the property expired by effluxion of time and was accordingly determined. Thereafter, the 1st appellant with his agents, servants and/or subtenants became trespassers on the premises, unlawfully remained thereon and held the same over for the period of four years covered by the second arm of the cross-appellants claims. It is plain to me that although the claim before the trial court was rightly described as a claim in compensation for the use and occupation of the premises in issue, it is non-the-less a claim for mesne profits on the particular facts of the case covering the period of four years, during which the 1st appellant ceased to hold the premises as a tenant or lessee of the cross-appellant but wrongfully remained thereon and held the same over. I will now examine the second aspect of the sole issue for consideration in this appeal. This is whether a landlord should be awarded mesne profits at a rate higher than the annual rent reserved in the tenancy agreement between him and his tenant before the expiration or termination thereof.

Before the court below, learned counsel for the defendants/cross-respondents argued that the award of N1,000.00 (One thousand Naira) per annum to the plaintiff/cross-appellant as mesne profits by the learned trial Chief Magistrate for the 4 years the cross-respondents held over the premises after the expiration of the lease was ill conceived and unjustifiable. He advanced as his reason for this submission that Agreement, Exhibit A, between the parties stipulated N2.00 per annum as rent and that the claim for mesne profits could not consequently exceed the agreed N2.00 per annum therein stipulated. He contended that the basis of the assessment for the amount of N1,000.00 per annum claimed was not stated or explained and that the amount was therefore arbitrary and excessive.

The Court of Appeal per the lead judgment of Kutigi, J.C.A., as he then was, treated the matter as follows-

I think the learned trial Chief Magistrate did rightly in my view find that there was a lease agreement between the parties herein for a period of six years. He also rightly found that the lease expired on 14/7/78 and that the respondent was holding over for a period of approximately four years when he finally delivered his judgment on 2316/82. After the service of the written notice to quit or at the end of the terms granted, if 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. See Pall Asian African Limited v. N.I.C.O.N. (1982) 9 S.C1. I agree with Mr. Saru for the respondent that in these circumstances the appellant would not be entitled to mesne profit higher than the N2.00 (two Naira) per annum fixed as rent under the original agreement. (See Oduye v. Nigeria Airways Limited (1987) 2 NWLR. (Pt. 55) 126. If there is need to vary the amount a proper application has to be made to the appropriate authority or tribunal.

The Chief Magistrate was clearly in error when he awarded N4,000 (i.e. N 1,000.00 per annum) to the appellant for use and occupation of the premises. The award will have to be reduced and it is hereby reduced to N18.00 (Eighteen Naira Only) i.e. from July 1978 to date at the rate of N2.00 per annum as fixed by the Agreement, Exhibit A.

With profound respect to the Court of Appeal, I am unable to accept the reasoning that since the lease, Exhibit A, between the parties stipulated N2.00 per annum as rent, that rate must necessarily be the index of the mesne profits payable in respect of the premises and that the plaintiff/cross-appellant cannot claim a higher rate than the said N2.00 per annum. The point must be stressed that the plaintiff in an action for loss of use and occupation of a premise is not bound to use the rent payable during the tenancy as a measure for the rate of mesne profits. The law as I have observed, is that while rent is liquidated and operative during the subsistence of a tenancy, mesne profits are unliquidated and only start to run when the tenancy expires and the tenant holds over. Mesne profits are generally calculated on the yearly value of the premises and a landlord is certainly not bound to use the rent payable during the tenancy as a yardstick in his determination of mesne profits. See Osarawu v. Ezeiruka (1978) 6 – 7 S.C 135, Ahmed Debs and others v. Cenico Nigeria Ltd. (1986) 3 NWLR (Part 32) 846 at 852 and Marine and General Assurance Company Ltd. v. Rossek and Another (1986) 2 NWLR (Part 25) 750 at 763. Where the rent represents the fair value of the premises, mesne profits shall be assessed at the amount thereof; but where the real or actual value of the premises exceeds the reserved rent, then of course, mesne profits are assessed at such higher rate or figure. See Clifton Securities Limited v. Huntley (1948) 2 All E.R. 283. Mesne profits may therefore be equated with fair, real or actual value of the use and occupation of a premises during the period the premises is held over by a person in wrongful possession thereof. They are not necessarily commensurate with the rent reserved in the expired lease since the value of the premises might either have increased or, indeed, fallen during the tenancy. See Bullell and Leake and Jacobs Precedents of Pleadings 12th Edition Page 69. Being unliquidated and based on the fair open market annual value of the premises, the rate of mesne profits are at large; their assessment is not necessarily based on the reserved rent and the tenant who holds over is liable to pay to the landlord the fair or actual value adjudged by the court to be due for use and occupation of the premises. See Adebanjo v. Tenesse Nigeria Inc. (1974) 2 S.C.1. The onus, of course, is on the plaintiff to establish to the satisfaction of the court what this fair open market annual value of the premises in issue is.

In the present case the plaintiff gave evidence in respect of his claim for the sum of N1,000.00 per annum as mesne profits. He stated:

I know that the 2nd to the 14th defendants are also in my premises as sub-tenants of 1st defendant. I want all the defendants to vacate the premises. I want N1,000.00 per annum for use and occupation from 15/7/78 to date – four years. We once went to court in respect of this case. We both gave evidence. The defendant in that case stated that he was collecting rent.

This evidence was neither contradicted nor discredited by the defendants by way of cross-examination and, as such that rate remained unchallenged. See Bello v. Eweka (1981) 1 S.C. 101 at 124. Where evidence given by a party to any proceedings was not challenged by the opposite party who, like in the instant case, had the opportunity to do so, it is always open to the court seised of the matter to act on such unchallenged evidence before it. See Isaac Omoregbe v. Daniel Lawani (1980) 3-4 S.C. J08 at 117, Odulaja v. Haddad (1973) 11 S.C. 357; Nigerian Maritime Services Limited v. Alhaji Bello Afolabi (1978) 2 S.C. 79 at 81 and Boshali v. Allied Commercial Exporters Limited (1961) All NLR 917; (1961) 2 SCNLR 322.

It must also be noted that the 1st defendant in his evidence testified that the value of the building on the premises was N44,000.00 that he was collecting between N3,000.00 and N4,000.00 per annum from his tenants on the premises and that even though he paid no rents in respect of the 3 rooms he occupied in the premises, the fair open market value of the apartment was N90.00 per annum. It seems to me beyond dispute that on the state of the evidence laid before the court, particularly on the admission of the 1st defendant, the learned trial Chief Magistrate was clearly right in holding that N1,000.00 claimed by the plaintiff as mesne profits in respect of the premises is reasonable having regard to the rent collected by the first defendant from 15/7/72 to date. It ought to be mentioned that the court below relied on the decision of this court in Oduye v. Nigeria Airways (1987) 2 NWLR (Part 55) 126 in holding that since Exhibit A stipulated N2.00 per annum as the reserved rent, that rate must be the measure or the mesne profits the plaintiff was entitled to. I must, with the greatest respect to the court below, emphasize that the principle of law enunciated in the Oduye case is clearly inapplicable to the present case. The Oduye Case dealt with premises to which the provisions of the Lagos State rent Control and Recovery of Residential Premises Law No.9 of 1976 applied which is not the position in the present case. It seems to me clear that the facts of the present case are distinguishable from the facts of the Oduye case. In my view, it is plain that the Court of Appeal was in grave error by relying on that case to reduce the rate at which the learned trial Chief Magistrate awarded mesne profits to the plaintiff/cross-appellant.

In view of all I have said above, the answer to the question posed in this appeal must be in the affirmative.

In the final result, this appeal accordingly succeeds and it is hereby allowed.

I set aside the judgment of the court below dated the 29th June, 1987 in respect of the sum of N4,000.00 awarded to the plaintiff/cross-appellant by the trial court as mesne profits for the use and occupation of the premises in issue. The judgment and orders of the said trial court are hereby restored.

The cross-appellant is entitled to the costs of this appeal which I assess at N 1,000.00. I also award to the said cross-appellant N800.00 costs of the proceedings in the Court of Appeal.

---

SC.127/1989