Joseph Ishola-williams V. T. A. Hammond Projects Ltd. (1988)
LawGlobal-Hub Lead Judgment Report
G. O. AGBAJE, J.S.C.
The primary facts in the case now before us on appeal are not in dispute. One Mr. J. Ishola- Williams by a Deed of Lease dated 28th March, 1977 granted a lease of his landed property at No. 15 Okesuna Street to the defendant company T.A. Hammond Projects Ltd. for a term of 60 years commencing from the date of the said lease at an annual rental of N2,500.00. In the lease the defendant covenanted as follows:
(i) “To pay the rent reserved;
(ii) To develop the Demised Premises with an amount of not less than N750,000.00 and that the new Building should be called “Eso-Ola House”;
(iii) To pay and discharge all water and Township rates; and
(iv) Not to assign, sublet or part with the possession of the Demised Premises or any part thereof without the written consent of the Lessor but that the Lessor’s consent would not be necessary after the Demised Premises had been developed.
By 1982 the property has not been developed by the defendant. So the plaintiff felt the defendant was already in breach of its covenant to develop the land. The plaintiff also felt he had reasons to believe that there were other breaches by the defendant particularly the covenant by it not to assign, sublet or part with the possession of the demised premises or any part thereof without the written consent of the plaintiff. So the plaintiff instructed his solicitors Messrs. E. A. Omo Odulana & Co. to give the defendant notice of the breaches complained of in compliance with the provisions of Section 14(1) of the Conveyancing Act 1881, a statute of general application in force in England on 1st January, 1900 and which is admittedly applicable in Lagos State.
The notice of breach relied upon in this case is that dated 5th July, 1982 tendered as Exhibit B at the trial court. As much turns on the adequacy or inadequacy of this notice I have to reproduce it in full in this judgment. It is as follows:-
“EAO/IWTAH/3/82
5th July, 1982
Messrs T. A. Hammond Projects Ltd.,
30, Macarthy Street,
Lagos.
Dear Sir,
Re: Breach of Covenants or Agreement in respect of the Deed of Lease on No.15 Okesuna Property, Lagos.
We wish to invite reference to our letters EAO/TWTAH/1/82 and EAO/TWTAH/2/82 dated 15th March, 1982 and 4th May, 1982 respectively in connection with above-quoted subject matter.
- In consequence of a fuller and better instructions recently placed at our disposal it has now been decided to replace our two letters referred to above in paragraph 1 with this and further state that this is the NOTICE OF BREACH and what are complained of are as follows as per paragraph 2(i)-(iv) of the Deed of Lease:-
(i) To pay the rent hereby reserved on the day and in the manner aforesaid without any deduction whatsoever.
(ii) To develop the demised premises either with or without the use of the adjoining land by constructing a building the value of which will not be less than N750,000 (Seven hundred and Fifty thousand Naira) and the building of which is to be renown and called “ESO-OLA HOUSE.”
(iii) To pay and discharge all water and township rates, impositions, duties charges and all outgoings whatsoever whether Municipal or Federal which are now or may hereafter become imposed or charged upon the demised premises or upon the owner or occupier in respect of thereof.
(iv) Not to assign, sublet or part with the possession of the demised premises or any part thereof without the written consent of the Lessor such consent however not to be unreasonably withheld in the case of a respectable and responsible person or company and provided the requirements for Lessor’s consent does not apply after the said land has been duly developed but although the particulars of any assignment shall be forwarded to the lessor within (28) twenty-eight days of such assignment together with a copy of the Deed of Assignment.
- You are required to remedy the breach as early as possible.
Yours faithfully,
(Sgd.)”
The notice of breach was duly served on the defendant Company. On 28th July, 1982, that is some 23 days after the date of the notice of breach, the plaintiff being of the opinion that he had received no satisfaction from the defendant in respect of the breaches complained of, took out a writ of summons in the High Court of Lagos State, in the Lagos Judicial Division against the defendant company claiming against it as follows:
- An Order of Forfeiture of the lease dated the 28th day of March, 1977 and executed between the plaintiff and the defendants in respect of dwelling house, situate lying and being at 15 Okesuru Street, Lagos Nigeria for breach of covenant or agreement.
- Declaration that the said lease is void for not satisfying the requirements of the Registration of Titles Act which governs dealing with registered land.
- Possession of the said dwelling house.
- N12,500.00 general damages for the said breach of covenant or agreement.
- Annual Rental Value N2,500.00.
Pleadings were ordered filed and delivered. In his statement of claim the plaintiff pleaded the covenants by the defendant company in the deed of lease to which I have referred earlier on in this judgment. He then alleged breach by the defendant company of each and every one of them. The defendant company in its defence denied breach of any of the covenants complained of.
It is common ground that the demised property at the time the plaintiff took out his writ of summons in 1982 has not been developed at all by the defendant. It was the contention of the defendant in its statement of defence that it was not in breach of the covenant to develop then because there was no time stipulated in the deed of lease as to the deadline for the development of the demised property by the defendant.
The case proceeded to trial before Johnson J. (as he then was). Only the plaintiff gave evidence in his own behalf. In view of the issues arising for determination in this appeal I need only refer to the following portions of his evidence:-
“I signed a lease of the property to the defendant for 60 years, at N2,500 per annum. I signed a lease for the property as LO 8142. The land has not been developed up till today, the defendants are in arrears of rent for two years. They have assigned the property against the covenant of the lease. I instructed my lawyer Odulana to sue the defendants. He wrote a letter of complaint to them.
This is a copy of the said letter. Original produced by Ajumogbobi Tendered by Oriade. Admitted, marked Exhibit ‘B’. I received about five letters from defendant dated 23-1-78, 11-10-78, 24- 7-79,6-3-80,29-8-81 in respect of breaches complained of.
Tendered, No objection, Admitted, Marked Exhibits’C – C4′.
Because Exhibit C is relied upon in proof of the breach by the defendant of the covenant against assignment, I should reproduce it in full too. It reads thus:-
“T.A. HAMMOND FIOS FIArB
10b Ademola Street
South-West Ikoyi,
Lagos.
For Mail: P.O. Box 2898,
Lagos, Nigeria.
Tel: Lagos 23188
23rd January, 78.
My Dear Isola,
Thank you for your letter which I received on Friday last and more particularly for your greetings and good wishes, which Carol and myself reciprocate most sincerely.
I believe I may have overlooked the courtesy of informing you that in November, or December we” Assigned” the lease on your land to “The Ibeshe Development Company Ltd.” – if it has not been done I will ensure that formal notification is sent to you at an early date. This is purely an internal matter, as the above company is in exactly the same hands as “T. A. Hammond Projects Ltd.” – namely it is a partnership between Col. A.A. Ochefu and myself. It is merely that “development projects” will now be dealt with by the “development company”, and T.A. Hammond Projects Ltd. will be confined to “building contracting”.
To revert to your own letter.
I am happy to say that I have concluded the problem with the FHA, and this matter kept me very busy of late, particularly since my return on 4th January. For the next week I shall be equally busy translating the settlement into actual payment.
I fully agree with your suggestion that there should be a proper “Handing-Over” ceremony on your property, but could I suggest that I will contact you on that subject sometime next week – at which I should be more free, and also able to settle up with you as regards the balance payable to you in return for vacant possession.
May I say also that I am not so insensitive as not to have realized that it is in fact you who have done me the favour in the latter aspect, as you have not pressed me to “complete” at a time when you knew I had other problems.
For this, and your continuing friendship, I thank you very much indeed.
Sincerely, (Sgd.) Tom.”
On the point of breach of covenant against assignment, subletting or parting with possession of the demised premises by the defendant, I should refer to paragraph 7 of the Statement of Defence. It is as follows:-
“The defendants deny paragraph (iv) of the Statement of Claim and shall establish that the premises have not been sublet and that only the defendants’ employees now live on the present building to avoid squatters occupying the building pending development.”
Then I will refer to the following evidence of the only witness for the defence.
“The property is occupied by the Company’s driver and junior officers”
The Learned Trial Judge Johnson J., (as he then was), found for the plaintiff in his judgment dated 5th May, 1983 as follows:-
“It is my judgment that the plaintiff is entitled to an order of forfeiture of the Lease Agreement dated the 28th March, 1977 executed between the plaintiff and the defendants and admitted in evidence as Exhibit A for breach of the covenants of the lease as averred in paragraph 4(ii) and (iv) of the statement of claim.
These are the covenants (a) to develop and (b) not to sublet or assign etc. without prior written consent of the lessor. The lease granted in the Exhibit A is accordingly ordered to be forfeited. The defendant is ordered to give up possession of the land and building thereon not later than the 31st of May, 1983. I award N12,500 as general damages. In making the award I have taken account of the ground rent of N2,500 per annum due and unpaid for 5 years.”
His reasons for saying that there has been a breach of the covenant against assignment, subletting and parting with possession are as follows as contained in his judgment:-
“The defendants denied that the premises had been sublet to anyone, but this contention is belied by the admission of T.A. Hammond himself in this letter dated 23rd January, 1978 and in evidence as Exhibit C. There “I believe I may have overlooked the courtesy of informing you that in November, or December we “assigned” the lease on your land to “the Ibeshe Development Company Limited” – if it has not been done I will ensure that formal notification is sent to you at an early date.”
It went further to explain the assignment thus:
“This is purely an internal matter, as the above company is in exactly the same hands as T.A. Hammond Projects Limited” namely it is a partnership between Col. A.A. Ochefu and myself. It is merely that “development projects” will now be dealt with by the “development company”, and T.A. Hammond Projects Ltd. will be confined to “building contracting”.
There is no evidence that a formal notification was sent to the plaintiff. Even if that were done it would not be an answer or cure to breach.”
As regards the breach of the covenant to develop the Learned Trial Judge held as follows:-
“The Deed of Lease was executed in 1977 and no time was stipulated for the commencement and/or completion of the proposed development; to perform as covenanted within a reasonable time. It appears apparent from the writings of Mr. Hammond that it was a matter of understanding between them that the development should take place within a reasonable time of the agreement.”
The Learned Trial Judge found there has been a breach of the covenant in question because in his own words:
“The content of this letter (Exhibit C) put it beyond doubt that the defendant is unable to honour the covenant to develop either in the foreseeable future or at all; and is really anxious to shed that burden and see who it could be pressed to. It is in this regard that I consider the authority Re: Longlands Farm, Long Common Botley, Hants Alford v. Superior Developments Ltd. (1968) 3 All E.R. 552 at 556 to which Chief Oriade Learned Counsel for the plaintiff referred the court, very opposite (sic)”
(word in brackets mine.)
In other words the Learned Trial Judge found on the strength of Exhibit C that the defendant was not in a financial position to develop the property during the whole of the term created by the Deed of Lease.
To my mind the relevant part of the decision in Longlands Farm Long Common Botley, Hants Alford v. Superior Developments Ltd. (supra) to the case in hand is as follows:-
held (ii) of the headnote since the document of Apr.2, 1964 was silent as to the time in which the condition relating to planning permission was to be satisfied, it must be taken that the defendants were given a reasonable time in which to obtain planning permission to their satisfaction and the reasonableness of the time must be determined as at the date of the contract and must be judged by an objective test applicable to both parties (p.556, letters A and B, post);
Principle stated in Aberfoyle Plantations Ltd. v. Cheng (1959) 3 All E.R. 910 applied.”
Having expressed his view on the financial inability of the defendant to develop the premises as I have shown above, the Learned Trial Judge then held as follows:
“In this case I consider on an objective test, a lapse of time between 1977 and 1983 a more than reasonable one to allow for the development of the property to commence if there is any genuine desire or ability so to do. Besides the contents of the letters written by Mr. Hammond show that the defendant is now incapable of performing the covenant and wishes to sell. That situation in my view put the agreement to an end.”
The defendant was not satisfied with the judgment. So it appealed against it to the Court of Appeal, Lagos Division. The majority decision by Nnaemeka-Agu, J.C.A., (as he then was) and Uthman Mohammed J.C.A., Kutigi, J.C.A. dissenting, allowed the defendant’s appeal, holding, one, that the evidence for the plaintiff including the documentary evidence Exhibit C – C4, even if properly admitted in evidence, which it is not according to the majority decision, did not prove assignment or subletting or parting with the possession of the demised premises by the defendant and consequently breach of the covenant in this regard by the latter has not been proved and two that the notice of breach Exh. B was invalid. The latter point has to do with the alleged breach of the covenant to develop. For as the trial court and the lower court the Court of Appeal observed Section 14(b)(1) of the Conveyancing Act 1881 exempts a covenant or condition against assignment, subletting or parting with possession from the ambit of Section 14(1) of the same Act which provides for the statutory condition precedent for the exercise of right of re-entry or forfeiture as follows:
“A right of re-entry or forfeiture under any proviso or stipulation in a lease, for a breach of any covenant or condition in the lease, shall not be enforceable by action or otherwise unless and until the lessor serves on the lessee a notice specifying the particular breach complained of and, if the breach is capable of remedy, requiring the lessee to remedy the breach, and in any case requiring the lessee to make compensation in money for the breach, and the lessee fails, within a reasonable time thereafter, to remedy the breach, if it is capable of remedy, and to make reasonable compensation in money, to the satisfaction of the lessor, for the breach.”
The lower court, the Court of Appeal, held Exh. B was invalid because it failed to give particulars of the breaches complained of and because the period it allowed for the appellant to remedy the breaches was unreasonably short to remedy the breach of covenant to develop the demised premises.
In the end the lower court set aside the whole of the judgment in favour of the plaintiff and in its place entered an order dismissing his claims in their entirety. In his dissenting judgment dismissing the appeal Kutigi, J.C.A. held as follows:
“I am satisfied that Exhibit B containing the broken covenants as it did, constituted a valid and proper notice to the appellants. I say it complied with Section 14(1) of the Conveyancing Act 1881. The length of the Notice as I have observed is not an issue between the parties.
- I just cannot resist the submission of Mr. Oriade Learned Counsel for the respondent that Mr. Hammond is the alter ego of the appellant/company. I am reinforced in my view because one of the attachments to Exh. E tendered by the appellants themselves at the trial is a letter dated 9/3/82. It is in fact a letter written on the letterhead of T.A. Hammond Projects Ltd. the appellant herein. It shows Mr. T.A. Hammond as a director and Chief Executive. It also shows one Col. A. A. Ochefu as the chairman and director of the appellant/company. I therefore think that Exhs. C – C4 were rightly admitted against the appellant by the Trial Judge.”
The plaintiff being dissatisfied with the majority decision of the Court of Appeal, the lower court, has now lodged an appeal against it on 6 grounds of appeal to this court. In this court briefs of argument were filed, and exchanged by both sides. Issues arising for determination have been identified in the respective briefs of argument before us. These issues are said to have arisen from the grounds of appeal filed by the plaintiff. So I do not think it is necessary for me again to reproduce in this judgment the grounds of appeal filed by the plaintiff. It will be sufficient for me to refer to the issues arising for determination here as identified by each side. According to the Plaintiff/Appellant, the questions arising for determination are as follows:
“The first question for determination, the Plaintiff/ Appellant hereby submits, with all due respect, is whether Exhibit “B”, the Notice of Breach of Covenant dated 5th July, 1982 is valid. The second question for determination is whether an objective test or a subjective test is applicable to determine the period within which an act should be done if a lease or covenant in the lease demanded that an act must be done but did not specify the period within which the act should be done. The third question is whether the Defendant/Respondent has committed a breach of covenant to develop the Demised Premises with not less than N750,000.00 and the building to be called “Eso-Ola House.”
The fourth question for determination is whether service of Notice of Breach of Covenants can be dispensed with where the covenant is against assignment, subletting or parting with possession of the Demised Premises or any part thereof.
The fifth question is whether the Defendant/Respondent had committed a breach of any other covenants including a covenant to develop the Demised Premises with not less than N750,000.00 and the building to be called “Eso-Ola House.”
The sixth question for determination is whether the Plaintiff/Appellant had established, at least a breach of covenant to justify the judgment of the Court of First Instance as affirmed by the dissenting judgment of the Court below (Court of Appeal) which granted an order for forfeiture of the lease.”
According to the Defendant/Respondent, the issues arising for determination in this appeal are three namely:-
“1. Whether the Notice Exhibit B is in conformity with S.14(1) of the Conveyancing Act 1881.
- Whether there is admissible evidence in support of the allegation that the Respondent had assigned or sublet the demised premises.
- Whether the time between the Notice Exhibit B and the commencement of the action was enough time within which the Respondent could have developed the demised premises up to the value of N750,000.00”
I will stick to the issues identified by the Plaintiff/Appellant in his brief of argument as arising for determination in this appeal for they cover all the three issues, the Defendant/Respondent referred to in its brief of argument. I shall deal with the issues seriatim, and I shall take issues 1 and 2 together.
Issue 1 relates to the question of validity of Exhibit B, notice of breach of covenant dated 5th July, 1982 given by the plaintiff to the defendant. I have said earlier on in this judgment that Exhibit B, notice of breach has no relevance when breach of a covenant against assignment subletting or parting with possession is involved. So, the points raised in issues 1 and 2 which I am now considering, have to be looked at in the con of the covenant to develop the demised premises.
Hill and Redman’s Law of Landlord and Tenant 16th Edition, page 473 paragraph 392 provides as follows as to the form of notice of breach:”
Form and service of notice.- The notice must be so unequivocal as to direct the attention of the tenant to the particular things of which the landlord complains in order that the tenant may have an opportunity of remedying them before an action to enforce the forfeiture is commenced (a); it must be sufficient to inform the tenant what is complained of, but it is unnecessary that it should identify every defect or amount to a detailed specification of the work to be done (b). It will not be vitiated because, in attempting to enumerate the specific breaches, it includes some breaches which have not been committed (c). It is not necessary that it should require payment of compensation in money (d); nor, where the breach is incapable of remedy, is it necessary that the notice should require it be remedied (e). The notice may state a time within which the breach is to be remedied; but the lessor will not be able to enter at the end of the stated period unless the time is in fact reasonable (f)”
There is no doubt that Exhibit B only sets out the covenants about whose breach the plaintiff was complaining.
As regards the covenant to develop all what the plaintiff has done is that he has said that the defendant was in breach of that covenant, and he has said so unequivocally. It also appears to me that the plaintiff has drawn the attention of the defendant to the covenant in question. So there is no gainsaying it that the defendant knew the covenant of whose breach it was accused.
What remains for me to decide is whether having regard to the covenant in question, it was also necessary to direct the attention of the defendant to the particular things of which the plaintiff was complaining in order that the defendant would have the opportunity of remedying the breach before an action to enforce forfeiture is commenced.
The majority decision came to the conclusion that Exhibit “B” was not valid because it has not complied with the requirements of the law in that regard in that it fails to give the proper particulars of the breach complained of. Reliance was placed for this view on the following cases. Noke (1897) 1 Ch.271 at pages 273 and 274 and Gregory v. Searle (1898) 1 Ch.652. Both cases dealt with covenants to repair and in each case it was held that a notice that the lessee had broken the covenant to repair without giving any details of the want of repairs was not sufficient as it did not direct the attention of the lessee to the particular breaches complained of, so as to give him an opportunity of remedying them before an action was brought against him.
As regards a covenant to repair particulars of want of repair can with exactitude be given. For it is a matter of itemising the repairs that needed to be done and which the tenant had failed to carry out. The same thing goes for a covenant to pay rent or a covenant to pay rate where the amount involved and the period to which it relates can be stated with exactness. It may be argued on the other hand that in the case of a covenant to develop, the breach of the covenant consists in the failure to develop and nothing more and that consequently particulars of the breach will be inconceivable.
Counsel for the appellant has submitted to us that the mere allegation, in a notice of breach of the covenant complained of without giving further particulars of the breach will suffice to satisfy the requirements of S.14(1) of the Conveyancing Act 1881. I have no doubt that on the authorities he is wrong in ibis submission of his. In so far as the covenants to repair or covenants to pay rent or rate are concerned particulars of breach must be given. As regards the covenant at issue in this appeal, that is, the covenant to develop the argument, because of what I have just said about the covenant to develop, counsel’s argument is attractive but I am still of the view that it is not correct. Particulars of breach of a covenant to develop must, and in fact can be given in a notice of breach under Section 14(1) of the Conveyancing Act 1881 before that notice can be held to be valid.
Where for instance the deed of lease provides for the deadline by which the development must have been carried out, the notice of breach should draw the attention of the tenant to the deadline and to the fact that that time has passed and to the further fact that the development has not taken place as particulars of the breach.
Where, as it is the case in this appeal, no time limit was fixed for the development to be executed, the particulars of the alleged breach of the covenant will consist of (a) the lessor’s opinion as to the time within which the covenant to develop should take place and his reasons for so holding (b) the fact that such a period of time has passed, and (c) that the development has not taken place. I am strengthened in this regard because of the view I will express presently in this judgment on the purpose or object of the notice of breach itself when I shall deal with the other reason why the majority decision held that Exhibit “B” was invalid namely that the period allowed the defendant by the plaintiff for remedying the breach complained of was unreasonably short to remedy the breach in question.
Before I do so, I will deal with a procedural point raised in the appellant’s brief of argument that the defendant did not plead that the period to remedy the breach complained of given in the notice of breach was unreasonable and consequently no issue as to the unreasonableness of the period arose in this case. The answer to this procedural point is in the following passage from the lead judgment of Nnaemeka-Agu, J.C.A. as he then was, to which I agree:
“That notice was given is implied does not preclude the court from inquiring whether the notice, Exh. B, allowed a reasonable period for compliance. As the learned authors of Supreme Court Practice, 1958, have pointed out in para. 18/7/11, a defendant may rely upon a defence that reasonable time has not elapsed between the issuance of the notice and the time the landlord went to court, even though he has not pleaded that fact: See also on this Hopley v. Tarvin Parish Council (1910) 74 J.P. 209.”
So, the decision of this court in Overseas Construction (Nig) Ltd v. Creek Enterprises (Nig) Ltd. 1985 12 S.C. 158 upon which counsel for the plaintiff/appellant placed reliance, to the effect that a court is not to depart from all known rules of pleadings by considering an issue not raised by the pleadings is not in point here. For, it is not as a matter of law necessary for a defendant to plead as a matter of fact or at all that reasonable time has not elapsed between the issuance of the notice of breach and the time the plaintiff took an action against him before the defendant can rely on that defence.
I will now deal with the other ground why the lower court held that notice was invalid, namely that the period given to remedy breach was unreasonably short.
The learned authors of Hill and Redmans Law of Landlords and Tenants said, “as I have shown earlier on in this judgment, that where the notice of breach states a time within which the breach is to be remedied, the lessor will not be able to enter at the end of the stated period unless the time is in fact reasonable. Reliance was placed for this proposition on the case of Horsey Estate Ltd. v. Steiger (1899) 2 Q.B. 79, 92, C.A. among others. On the point of reasonableness of the period given to remedy the breach alleged the following passage in the judgment of Lord Russell of Killowen C.J. in that case at 91 is instructive:-
“To determine the character of the required notice, what it shall contain and when it ought to be given. It is necessary to consider the scope of S.14 of the Act of 1881 as a whole. The object seems to be to require in the defined cases (1) that a notice shall precede any proceeding to enforce a forfeiture, that the notice shall be such as to give the tenant precise information of what is alleged against him and what is demanded from him, and that a reasonable time shall after notice be allowed the tenant to act before an action is brought. The reason is clear: he ought to have the opportunity of considering whether he can admit the breach alleged; whether it is capable of remedy; whether he ought to offer any, and, if so, what, compensation; and, finally, if the case is one for relief, whether he ought or ought not promptly to apply for such relief. In short, the notice is intended to give to the person whose interest it is sought to forfeit the opportunity of considering his position before au action is brought against him.”
It appears therefore to me on this authority that the object of notice of breach is to give the person whose interest it is sought to forfeit the opportunity of considering his position before an action is brought against him. The relevant considerations to which the person involved may direct his mind are stated in the said judgment.
In coming to the conclusion that the period to remedy breach given in Exhibit ‘B’ was unreasonable, the majority decision held as follows:
“In my view, Mr. Odofin’s submissions on this point are well-founded. Having regard to the points which he spotlighted in arguments including the collosal (sic) cost of the building, the fact that no time was fixed in the lease for the erection of the building, the fact that the term of the lease was 30 years (sic) and the rent was not subject to be revised when the property was developed, and the respondent was not shown to have suffered any loss by the delay, if any, in the erection of the building a period of 21 days to get necessary permissions and complete the erection of the building appears to me clearly unreasonable. In my opinion, the reasonable time contemplated by Section 14(1) of the Conveyancing Act of 1881 is time sufficient for remedying all the breaches specified in the notice.”
Having regard to the case of Horsey Estate Ltd. v. Steiger supra, I am in agreement with the Learned Counsel for the plaintiff appellant that the Court of Appeal, the lower court in its majority judgment was wrong in holding that the reasonable time contemplated by Section 14(1) of the Conveyancing Act of 1881 is time sufficient for the remedying of the breaches specified in the notice. The reasonable time in this regard in my judgment is one which will allow the tenant to act before an action is brought, that is to say one that will give him the opportunity of considering whether he can admit the breach alleged, whether it is capable of remedying, whether he ought to offer any, and if so, what compensation and finally, if the case is one for relief, whether he ought or ought not promptly to apply for such relief. This is all the more reason why I am satisfied that particulars of the breach of the covenant to develop should be given in the manner I have earlier on stated in this judgment.
I have no doubt, however, that the majority decision was right in giving consideration to the fact that no time was fixed in the lease for the development of the demised premises and to the residue of the term granted by the deed of lease in coming to their decision that the period given in Exhibit ‘B’ to remedy the breach complained of was unreasonable.
In Civil Service Co-operative Society Ltd. v. Trustee of Sir J. R. D. Mcgrigor, Bart (1923) 2 Ch.347 a period of 14 days’ notice to enforce right of re-entry was held to be sufficient in an action for forfeiture for breach of covenants not to assign. As regards the reasonableness of the 14days’ notice to enforce right of re-entry Russell J. said as follows at page 356:-
“It is said that the notice of November 13, 1922 is invalid on two grounds, first because the fourteen days therein named was an unreasonably short time in the circumstances of the case, and secondly, because the lessee was not thereby required to make compensation for the breach. As to the first ground, no evidence was given of any special circumstances rendering this case one which required exceptional treatment. As was stated by the Court in Horsey Estate Ltd. v. Steiger (1899) 2 Q.B. 79 the notice is intended to give the person whose interest it is sought to forfeit an opportunity of considering his position, and acting before an action is brought against him. It appears to me that fourteen days was a sufficient time for this purpose.”
A notice of three months in a notice of breach to remedy breach pursuant to Section 14(1) of the Conveyancing Act (1881) was held to be adequate in a complaint about breach of covenant to repair primarily because there was another covenant in the lease to repair within three months after notice.
I am satisfied that there are special circumstances existing in this case which render it as one which requires exceptional treatment. The special circumstances are
(1) there was no time stipulated in the deed of lease for the defendant to develop the property.
and
(2) The lease is for a term of 60 years and at the time the notice was given there was an unexpired term of about 55 years.
Because of the fore-going I am in agreement with the Court of Appeal, the lower court, that a period of about 23 days named in Exhibit ‘B’ within which the defendant was to remedy the breach of the covenant to develop was unreasonably short, in the circumstances of this case, to give the defendant an opportunity of considering its position and acting before an action is brought against it.
So, I agree with the lower court, the Court of Appeal that Exhibit ‘B’ is invalid on the two grounds that that court held that it was invalid.
Compliance with the Provisions of Section 14(1) of the Conveyancing Act (1881) is a condition precedent for the success of the action for forfeiture. This provision as I have said is only relevant in this case to the breach of the covenant to develop. And since I have held, as the lower court had done, that Exh. B the notice of breach is invalid, the appeal in respect of the claim relating to covenant to develop must fail.
I now turn to the consideration of the claim for forfeiture on the ground that the defendant was in breach of the covenant not to assign, sublet or part with any part of the demised premises.
In proof of the breach of this covenant the plaintiff relied exclusively on Exh. C-C4. It is my view that once these documents have been tendered and admitted in evidence without any objection they can be used for all legitimate purposes. The defendant for its part in resistance to the case against it put in evidence some documents. These documents too once they have been admitted in evidence could be used for all legitimate purposes. See Sodimu v. Nigerian Ports Authority (1975) 1 All N.L.R. Part 1 p. 153 at 160-161.
With particular reference to Exhibit ‘C – C4’ Nnaemeka-Agu, J.C.A., as he then was, said in his lead judgment:
“The only evidence offered in proof of the fact that the appellants assigned, sublet, or parted with possession without the landlord’s consent was the series of letters, Exhibit C – C4. These are private correspondences between Mr. T.A. Hammond and the respondent, but the lease Exhibit A is between the respondent and T.A. Hammond Projects Ltd.
It is of course elementary that T.A. Hammond is a different person in law from T.A. Hammond Projects Ltd. It is not clear from the evidence what precisely is the relationship between the two whether Mr. T.A. Hammond is a shareholder, a Director or a Manager of T.A. Hammond Projects Ltd.”
However, Kutigi, J.C.A. in his dissenting judgment said as follows on the same point with reference to the documentary evidence before the trial court:-
“In as much as I agree that Exhibits C – C4 would on the face appear to be private correspondence between Mr. T.A. Hammond and the respondent; a closer look at the contents of these exhibits reveal that they are in substance correspondence between the appellant/company and the respondent. I just cannot resist the submission of Mr. Oriade learned counsel for the respondent that Mr. Hammond is the alter ego of the appellant/company. I am reinforced in my view because one of the attachments to Exhibit E tendered by the appellants themselves at the trial is a letter dated 9/3/82. It is in fact a letter written on the letter head of T.A. Hammond Projects Ltd. – the appellants herein. It shows Mr. T.A. Hammond as a director and Chief Executive.”
I think that the point made in the dissenting judgment of Kutigi, J.C.A. is valid and that one can look at Exhibit ‘E’ in proof of the fact that T.A. Hammond is the director and Chief Executive of T.A. Hammond Projects Ltd. For as I have just said all the documents put in evidence can be used for all legitimate purposes. Exh. E can legitimately be used for the purpose Kutigi J.C.A. has used it. So on the authority of H. L. Bolton (Engineering) Co. Ltd. v. T.J. Greham & Sons Ltd. (1956) 3 All E.R. 624 at page 630 one can say that T.A. Hammond a director of T.A. Hammond Projects Ltd. is the alter ego of the defendant company in this case and that consequently Exhibits ‘C – C4’ were acts of the defendant company as contended for by the Counsel for the plaintiff/appellant before us.
What remains now for me to decide is whether the plaintiff by relying on Exhibit ‘C – C4’ in proof of the breach of the covenant not to assign by the defendant has proved the breach complained of. Exhibit ‘C’ the main document relied upon in this respect talks of the assignment of the demised premises by the defendant. In the absence of any evidence as to any special sense in which that word was used, I cannot see how one can get away from giving the word its natural and obvious meaning. See Northern Assurances Co. Ltd. v. Wuraola 19691 N.M.L.R. 1 at page 5 and also Aderemi v. Adedire 1966 N.M.L.R. 398 at page 402 where Idigbe J.S.C. delivering the judgment of the Supreme Court said
“Appellants have argued that there is in the above passage an implied admission that the land in dispute is communal land and learned counsel for the appellants has argued before us that the “subtle attempt” in the earlier passage quoted from the judgment of the Learned Trial Judge, to disregard the true effect and meaning of the evidence of Mafoworade is erroneous. We must emphasize that counsel appearing in a case is entitled to the obvious and natural meaning which a Court can give to the testimony of a witness unless a contrary meaning can be legitimately inferred from the surrounding circumstances under which the evidence was given. With regard to the evidence of Mafoworade quoted above, we observe that he was not re-examined by counsel for the respondents nor was any question asked of the witness by the Court by way of clarification of any portion of that evidence”
So, I do not think that the majority decision of Court of Appeal was right in trying to construe the word “assigned” in Exhibit ‘C’ in any special sense when there was no evidence at the trial court to support such a construction. I therefore hold that counsel for the plaintiff/appellant was right too in his submission to us in this regard.
The position now is whether the plaintiff has proved breach of the covenant against assignment by Exhibit ‘C’, the word “assigned” in Exhibit ‘C’ being given its natural and obvious meaning.
It is to be observed that pleadings were ordered and filed in this case. The defendant denied the breach of the covenant in question in its statement of defence. In the witness box, the only witness for the defendant also denied the breach.
The law is that the burden of proof of the breach of the covenant alleged remains on the plaintiff in an action for forfeiture based on the breach of that covenant. In an action for forfeiture in Duke’s Court Estates Ltd. v. Associated British Engineering Ltd. (1948) 2 All E.L.R. 137 at page 139, Harman J. said on the issue of burden of proof of forfeiture as follows:-
“It seems to me that prima facie – although I am only deciding this so far as it is necessary for the purpose of my decision – the burden in a forfeiture action (as is shown by the two cases cited to me by counsel for the defendants, Doe d. Bridger v. Whitehead (1) and Toleman v. Portbury (2), is particularly laid on the plaintiff, and here the plaintiffs, in order to deprive the defendants of the estate which the plaintiffs have granted to them, must show that the defendants have permitted user by persons who are not associated with them in the various aspects of their business. It does not seem to me enough for them to come to the court and say: “The defendants admit that they have permitted these people to occupy part of the premises and, therefore, it is for them to prove that they are within the privileged class.” The boot is on the other foot. If the action depended on the covenant not to assign or underlet, the matter might be quite different. If the defendants then wished to confess and avoid by alleging that they had assigned or underlet, but had been permitted to do so, the burden would clearly be on them.
I come to the conclusion that the burden remains on the plaintiffs in spite of the admissions made in the defence.”
It is to be noted that in the instant case the defendant’s plea was not one of confession and avoidance by alleging that it had assigned or underlet but it had been permitted to do so. Its defence was one of complete denial of assignment or under letting or parting with possession of the demised premises. So the onus was clearly on the plaintiff to prove the assignment alleged by it.
Hill & Redman’s Law of Landlord and Tenant 16th Edition page 557 paragraph 446 has this to say on the proof of breach of covenant against assignment, underletting or parting with possession:-
“405. Covenant against assignment or parting with possession – covenant “not to assign” (a) or “not to assign or otherwise part with” (b), the premises is only broken by a legal assignment for the entire residue of the term. Consequently the covenant is not broken by a declaration of trust of the premises in favour of a third person (c), or by the deposit of the lease as security for an advance (d), or by the grant of an under lease of part of the premises (e) or for part of the term (f). A covenant “not to assign or part with the possession of premises” is often inserted in order to prevent a tenant from evading the restriction against alienation, by putting another in possession without either an assignment or an under-lease. “Parting with possession” means to any person other than the person to whom possession was given by the original lease. Such a covenant is broken if the lessee makes an equitable assignment of the lease and places the assignee in possession, but a lessee who retains the legal possession of the whole of the premises at all material times does not commit a breach of the covenant by allowing other people to use the premises (g). The retention of possession by one partner alone on a dissolution of the partnership is not a breach of a covenant against assignment contained in a lease to both (h); but if one executes a formal assignment to the other this is a breach (i). A covenant not to part with the possession of the premises is not broken by the lessee parting with part of the premises (k).
(Italics mine).
In the instant case no legal assignment of the demised premises by the defendant has been proved by the plaintiff. It is trite law that a legal assignment can only be created by deed. And no deed of assignment of the demised premises by the defendant to anyone was put in evidence.
The only evidence as to who were in occupation of the demised premises at all material times was from the defendant and it was to the effect that the property was occupied by its driver and junior officers. It is the law that a lessee who retains legal possession of the whole premises at all material times does not break a covenant against parting with possession by allowing other people to use the premises. See Jackson v. Simons 1923 1 Ch.373.
The arrangement whereby the defendant allowed its driver and junior officers to occupy the demised premises cannot be said to confer any estate or interest in the demised premises on the persons involved, it being a mere privilege or licence to use the premises granted by the defendant to the officers in question. The defendant retained legal possession of the whole premises all the time. So that arrangement cannot constitute a breach by the defendant of the covenant not to assign, underlet or part with the possession of the demised premises or any part thereof.
It is submitted in the appellant’s brief of argument that the defendant by Exhibit C had made an equitable assignment of the demised premises to Ibeshe Development Co. Ltd. and that the majority decision of the lower court was wrong in holding that there was no such assignment. I have held in regard to Exh. C that the word “assigned” used in that document must be given its ordinary and obvious meaning and that the majority decision of the Court of Appeal was wrong in deciding otherwise. So, as I have earlier said I have upheld the contention in the appellant’s brief of argument that the word “assigned” in Exhibit C must bear its ordinary meaning. Be that as it may, I do not see how Exhibit C can be construed as an equitable assignment of the demised premises by the defendant to Ibeshe Development Co. Ltd.
I have held earlier on in this judgment that a legal assignment can only be created by deed. However, an assignment under hand, if made for value, will operate as an agreement to assign and will vest an equitable interest in the assignee. So the assignment under hand will vest an equitable interest in the assignee. In such a situation there must be at least a letting instrument in which the conditions of a contract of letting are ascertainable. Exhibit C is definitely no such instrument. In fact it is not an agreement between the defendant and Ibeshe Development Co. Ltd. It is as I have observed earlier on in this judgment a letter from the alter ego of the defendant to the plaintiff.
Even if Exhibit C is an equitable assignment, which I held it is not, there is no evidence that Ibeshe Development Co. Ltd. was let into possession of the demised premises as a result of which one can come to the conclusion that the covenant against assignment or subletting or parting with possession was broken by the defendant as submitted by counsel for the plaintiff/appellant in the latter’s brief of argument relying on the proposition of law in that regard in Halsbury’s Laws of England 3rd Edition Vol. 23 page 630 Article 1334.
The conclusion I reach therefore is that I am in agreement with the lower court for the reasons I have just given that the plaintiff has failed to prove breach of the covenant against assignment, subletting or parting with the possession of the demised premises by the defendant.
I have said earlier on in this judgment apropos of the case of Longlands Farms vs. Superior Development Ltd (1968) 3 All E.R. 552 that the only part of that decision relevant to the case in hand is held (ii) in the headnote which for ease of reference I reproduce here again:-
“Since the document of Apr.2, 1964, was silent as to the time in which the condition relating to planning permission was to be satisfied, it must be taken that the defendants were given a reasonable time in which to obtain planning permission to their satisfaction and the reasonableness of the time must be determined as at the date of the contract and must be judged by an objective test applicable to both parties (see p.556 letters A and B, post);
Principle stated in Aberfoyle Plantations, Ltd. v. Cheng (1959) 3 All E.R. 910) applied.”
Having so held it follows that in my judgment where as it is in this case, no time limit was specified as to when a covenant to develop is to take place, an objective test should be applied to determine the period within which the act should be done. I have earlier on in this judgment made the point that the provisions of Section 14(1) of the Conveyancing Act 1881 have no application to the Covenant against assignment or subletting or parting with possession of demised premises or any part thereof.
I have disposed of all the issues raised in the appellant’s brief of arguments. On the whole, having regard to the conclusions I have reached in this judgment that the lower court was right in holding (i) that Exhibit B, the Notice of Breach was invalid; and (ii) that the plaintiff has failed to prove breach of the Covenant against assignment, subletting or parting with possession of the demised premises or any part thereof by the defendant this appeal must fail.
In the result the appellant’s appeal is dismissed by me with costs assessed at N500.00 to the respondent.
SC.164/1986
