Unilife Development Co. Ltd. V. Mr. Kolu Adeshigbin & Ors (2001)
LAWGLOBAL HUB Lead Judgment Report
ACHIKE, J.S.C.
In the arbitration proceedings which started before Bola Ajibola, Esq. sometime in April 1983, the respondents, inter alia, sought a determination in a controversy between the parties on the amount of rent payable by the appellant under a rent revision clause pursuant to the provisions of a deed of lease. At the arbitration proceedings, the exact question put to the arbitrator for the decision of the High Court, as a question of law, was:
“On what basis should the revised rent be computed Is it on the basis of the fair and reasonable rent which can be obtained for the premises in the open market Or is it on the basis of the fair and reasonable rent which can be obtained for the bare site, without taking into consideration the buildings or developments on the site”
The High Court of Lagos Judicial Division presided over by Moni Fafiade, J. on 3rd February, 1989 held that only the bare land (i.e. second basis) should be taken into account in determining the revised rent payable. Accordingly, her Ladyship decided that the revised rent payable on the demised premises would be N30,000.00 per annum with effect from 1st April, 1981, being the rent payable for the bare land.
Dissatisfied, the claimant appealed to the Court of Appeal. That court allowed the appeal, reversed the decision of the trial High Court and held in favour of the first basis, to wit, that the revised rent should take into consideration the improvement made on the demised premises and computed by the Arbitrator at N450,000 per annum.
The Appellant, dissatisfied, has lodged this appeal against the judgment of the lower court. Both parties filed and exchanged briefs of argument.
Kehinde Sofola, S.A.N. Esq. learned counsel for the appellant, submitted that the lone issue for determination should be:
“Was the Court of Appeal right in its determination of the question of law raised by the Arbitrator in his award, to wit: On what basis should the revised rent be computed Is it on the basis of the fair and reasonable rent which can be obtained for the premises in the open market Or is it on the basis of the fair and reasonable rent which can be obtained for the bare site, without taking into consideration the buildings or developments on the site”
It may be noted that respondents’ learned counsel, T.E. Williams, Esq. did not in the respondents’ brief expressly identify any issue for determination but indirectly adopted appellant’s issue for determination by reference to the precise issue before the Arbitrator which, of course, was the same as appellant’s issue for determination.
Opening the argument for the appellant, their learned counsel Kehinde Sofola, S.A.N., Esq. identified clause 7(b)(i)-(iii) of the Lease of Agreement as the relevant clause in this connection but also said that clause 7(b)(iii) was fundamentally the most crucial provision in determining the issue in controversy. Counsel submits that the main object of construction of a document is to decipher the intention of the parties as may be gathered from the express words contained in the Lease Agreement, and for this proposition, counsel relies on Alhaji Tukur v. Government of Gongola State (1989) 4 NWLR (Pt.117) 5 17 and Chief Ogbonna v. A.G. lmo State & Ors. (1989) 5 NWLR (Pt.121) 312. Counsel further submits that the key to the issue of law in controversy is the ascertainment of the meaning to be ascribed to the words “premises” and “lands” as used in clause 7(b)(iii), which, in counsel’s view, must be discovered by construing the Lease Agreement as a whole and not in bits and pieces. In other words, the clauses of the Lease Agreement must be read together because to do otherwise would occasion grave injustice, In his oral submission, he calls in aid a new authority, Chime v. Ude (1996) 7 NWLR (Pt.461) 379 at 432. Counsel submits that at the time of the Lease Agreement the property was a bare land and if the parties had intended to include the subsequent developments thereon in working out the revised rent they should have expressly spelt it out. It is his submission that no one can re-write the Lease Agreement but should only interpret it according to the intention of the parties, as may be deduced from the Lease Agreement.
In the brief, counsel made references to the Lease Agreement showing that the words “premises”, “demised premises” and “lands” were used interchangeably and in many respects have given rise to contradictory meanings. Counsel submits that from the intention of the parties the term “lands” as used in clause b(iii) means bare land so also that the term “premises” is also used to refer to bare land.
In his consideration of the law on the point, counsel points out that the term “premises” has no fixed or static connotation. But when used in document or written instrument, its exact meaning is as may be determined from the words of the written instrument. Counsel treats us to several definitions from several authoritative works. First, reliance is placed on reference to the word “premises” in Corpus Juris Secundum, Vol. 72, p484 where it is stated:
“The word “premises” has various meanings depending on the subject matter in connection with which it is used. It has no fixed legal significance, and no definition applicable to every situation,”
Second, Strouds Judicial Dictionary (4th ed) vol. 4, inter alia, states that “premises implies some definite place with mets and bounds e.g. land or land with buildings upon it, or a ship or anything of that kind.” Thirdly, counsel refers to the interpretation section of Recovery of Premises Law, Cap 118, Laws of Lagos State to include:
“(a) house or building or any part thereof together with its grounds or other appurtenances; and
(b) land without any building thereon.”
Fourthly, “lands” as used in the Lease Agreement being construed relates to “premises” as used therein and as such the Court will have to be guided by the imperative work of the learned authors of Halsbury’s Laws of England (4th ed.) Vol.27 para. 129 which states as follows:
“When used in a lease or other assurance, “land” includes, if there is nothing to restrict its technical meaning, all kinds of land, whether arable, meadow or otherwise, and also everything on or under the soil; all buildings erected on it.”
The learned authors in yet Vol.I2, (4th ed.) of the same series, para 1463 state:
“The words of a written instrument must in general be taken in their ordinary sense notwithstanding the fact that such a construction may appear not to carry out the purpose which it might otherwise be supposed the parties intended to carry out, but if the provisions and expressions are contradictory and there are grounds appearing on the face of the instrument, affording proof of the real intention of the parties, that intention will prevail against the obvious and ordinary meaning of the words, and where the literal (in the sense of ordinary or primary) construction would lead to an absurd result, and the words used are capable of being interpreted to avoid this result, the literal construction will be abandoned.”
And finally, counsel refers to para 1469 of the same vol. 12 wherein it states:
“It is a rule of construction applicable to all written instruments that the instrument must be construed as a whole in order to ascertain the true meaning of its several clauses and the words of each clause must be so interpreted as to bring them in harmony with the other provisions of the instrument if that interpretation does no violence to the meaning of which they are naturally susceptible. The best construction of deeds is to make one part of the deed expound the other, and so make all the parts agree. Effect must, as far as possible be given to every word and every clause.”
Relying on the foregoing, counsel submits that on point of law, the lower court was wrong and misdirected itself in the consideration of whether the land, the subject matter of dispute was bare land by relying only on clauses 3 and 6in the entire lease agreement, as Adenekan Ademola, JCA did in his leading judgment and so did Niki Tobi, JCA in his concurring judgment.
Kehinde Sofola Esq. submits that the lease agreement by providing that the demised premises was let at the value of 800 pounds yearly as vacant land and on which buildings to the value of 60,000 pounds were to be erected immediately thereafter, in accordance with Clause 3, lucidly shows that the “demised premises” was bare land upon which building were to be built later. To counsel, “this error of appreciation of the distinction influenced the conclusion that what was demised was not bare land, without taking into consideration other clauses in the Lease. ‘ He submits that it is this misapprehension that led the lower court when it reached the conclusion:
“As a matter of fact, the lease enjoins the arbitrator while revising the rent to look at similar lands in the neighbourhood and of the same facilities and used (sic) whatever result that inquiry could yield in determining the rent. In other words, the Arbitrator must have regard in the revision of the rent to rent accruing on similar buildings to that of the one on the land demised in arriving at the revised rent.”
It is also counsel’s submission that reference to “rent accruing on similar buildings” in the assessment of rent revision was a misdirection and has occasioned substantial injustice, and not in accord with clause 7(b)(iii) of the Lease Agreement which suggested that revised rent should be “for similar lands as against “similar buildings”.
Finally, appellant’s counsel says that the three cases, to wit,
(i) Ponsford v. H.M.S. Aerosols Ltd. (1977) 1 WLR 1029,
(ii) Cuff v. J & F Store Property Company Limited (1978) W.L.R. 256 and
(iii) Turner v. York Motor Property Ltd (1951) 85 C.L.R. 55
which are relied upon by the respondents were the very same cases they relied on at the Arbitration Tribunal and the lower courts and submits that they are distinguishable and irrelevant to the circumstances of this case.
In conclusion, the learned Senior Advocate urges us to decide the case on its particular facts as contained in the Lease Agreement, reject the decision of the lower court and uphold the decision of the trial judge that the term “premises” as used in the Lease Agreement means bare land.
T.E. Williams, Esq., learned respondents’ counsel, concedes that the appeal turns on the interpretation of the rent revision clause contained in the Lease Agreement and that it is true that at the time of the making of the said Lease Agreement the property demised was bare land – referring to clauses 3 and 6, so also clause 7(b) (iii) of the Lease Agreement. Counsel however submits that once a building is erected thereon the building will attract rent which is to be payable by the tenant. Relying on the entire respondents’ brief, counsel urged us to dismiss the appeal.
From the respondents’ brief of argument, learned counsel submits that the appellant’s brief failed to show any serious flaw in the reasoning of the lower court and much of the arguments in their brief were really a repetition of the arguments presented to the Court of Appeal and submits that “the attack on the grounds of that decision are (sic) clearly misconceived and untenable.”
Counsel proceeds to explain the reasons why the lower court favoured the conclusion that in determining the revised rent, the arbitration tribunal should do so on the basis of the fair and reasonable rent, which can be obtained for the premises in the open market. To this end, counsel urges us to apply the dictum of Megarry, J in Cuff v. Store Property Company Limited, (supra) or (1979) A.C. 87 at 91. He calls attention to clauses 3 and 6 of the Lease which enjoin the tenant to put a building on the land immediately and allow the landlord to use a prescribed portion thereof rent free and submits that it is open to the parties to have expressly directed the Arbitrator not to take account of the buildings erected on the land in fixing the revised rent. Rather, the Lease enjoins the Arbitrator to look at similar lands in the neighbourhood with the same amenities.
The dictum of Megarry, J in Cuff case which found favour in the leading judgment of the lower court runs thus:
” …But here there is the bare phrase “reasonable rent”, used in relation to the demised premises: the question is not that of the rent “which it would be reasonable for the tenant to pay”, but that of “a reasonable rent for the demised premises”, and that, as it seems to me, is a matter not affected by who paid for the premises or any part of them. In my view the surveyor must take the premises as he finds them, and then determine what he considers to be a reasonable rent for those premises, regardless of who provided them or paid for them … I think I am in agreement with that approach. The Arbitrator here should have looked into the question with a view of determining a revised rent for the demised premises by taking into account the improvement which has been made on the demised land since 1961.”
Counsel calls attention that appellant’s counsel rather than giving due consideration to this portion of Megarry, J’s dictum proceeded to cite all other portion in Cuff case which was not relied on by the lower court.
However, counsel submits that the Arbitrator’s guideline in establishing the renewed rent runs as follows:
“The amount at which the revised rent shall be fixed by an Arbitrator appointed under this clause shall be such as in the opinion of the Arbitrator is a fair and reasonable rent for the premises having regard to rents obtainable at the commencement of revision period for similar lands of similar area and amenities similarly situated.”
It is his further submission that the Arbitrator is to fix what in his opinion is “a fair and reasonable rent for the premises” and says that the term premises has been commonly used as comprising land and houses or structures thereon following the opinion of Wilde, C.J. in Doe d. Hemming v. Willeres 137 E.R. 280 at 283.
“The word ‘premises’ is commonly used as comprising land and houses and other matters.”
Reference is also made to the dictum of Dixon, J. in Turner v. York Motors Property Ltd (1951) 85 CLR 55 at p.75:
“Having regard to the history of the provision and dictionary meaning of the word “premises”, I think that we should adhere to the rule laid down that bare land without buildings, if let for the purpose of occupation as bare land, does not constitute premises. If land is let upon terms that the tenant shall or may erect buildings which are not removable by him but will pass with the freehold, then I should say that the land and building when erected would form premises.”
Reliance and reference is made to Ponsford v. H.M.S. Aerosols (supra) where the revised rent for the property had to be referred to a surveyor under an arbitration clause where the surveyor under the clause for rent revision provided that he was to fix “a reasonable rent for the premises”. There Cairns, L.J. quoted extensively from the dictum of Megarry, J (as he then was) and also noted:
“But, nevertheless, I find the basis on which MEGARRY J reached his decision to be directly applicable to the present case and, while it is not binding on us, I treat with great respect a decision of a judge so eminent in the field of landlord and tenant: and, moreover, I find his reasoning compelling.”
Turning to the Lease Agreement, counsel identifies the fact that the Arbitrator is directed to fix a fair and reasonable rent.
“having regard to rents obtainable at the commencement of the revision period for similar lands of similar area and amenities situated.”
For the meaning of the expression “lands” counsel falls back on the definition of the learned authors in Hill and Redman’s Law of Landlord and Tenant, (16th ed.) at p. 135:
“The word “land’. when used in a lease or other assurance includes, if there is nothing to restrict its technical meaning, all kinds of land … and also everything on or under the soil; all buildings erected on it.”
Further reliance is placed by counsel on the Australian case of In re Lehrer and Real Property Act (1960) NSWR 570 at 574, per Jacobs, J:
“The word “land” comprehends in law any ground, soil or earth whatsoever: Coke on Littleton, 4A: even though it originally meant only arable land: Sheppard’s Touchstone, 92. Coke further says that land “legally includes also all castles, houses and other buildings for castles, houses, etc. consist upon two things, viz. land or ground, as the foundation or structure thereupon; so as passing the land or ground, primarily, the ownership of land carries with it, everything both above and below the surface, the maxim being” cujus est solum, ejus est usque and coelum et ad inferos. ”
Counsel recalled the Arbitrator’ s guideline to have regard to “rents obtainable for similar lands of similar area and amenities.” And since it has already been shown that the Arbitrator was to fix the fair and reasonable rent for the house and buildings on No.9 Nnamdi Azikiwe Street, then counsel submits that the word “lands” must be construed ejusdem generis with “premises” since like can only be compared with like. In conclusion, counsel submits that the dictum of Megarry, J. is sound, relevant and applicable to the factual situation herein, and was rightly applied by the lower court.
Referring to Clauses 3 and 6 of the Lease Agreement in relation to the leading judgment of Ademola, JCA, counsel submits that His Lordship from these two clauses inferred that the contemplation of the parties at the time of making the Lease Agreement was that the land demised was to be built upon immediately and the lessor shall use part thereof when built rent free. Counsel further submits that the parties must have contemplated that when rent comes to be revised in 20 years time, there must be buildings on the land. He urges us to hold that clauses 3 and 6 tilt the scale in favour of the construction urged upon by the respondents.
Relying on the view expressed in the House of Lord in Ponsford (supra) which was favourably approved in the leading judgment of the lower court, learned respondents’ counsel urged us to decide the appeal on the first basis i.e. on the basis of the fair and reasonable rent which can be obtained for the premises in the open market, there being no express provision in the Lease Agreement directing the Arbitrator to ignore improvements on the land in computing revised rent.
In conclusion, learned counsel urges that the appeal be dismissed as there are overwhelming judicial authorities in support of the decision of the court below.
It must be stated at the outset that the issue for determination in this appeal has been stated with the utmost pellucidity. For purposes of emphasis, however, I wish to reproduce it again:
“On what basis should the revised rent be computed Is it on the basis of the fair and reasonable rent which can be obtained for the premises in the open market Or is it on the basis of the fair and reasonable rent which can be obtained for the bare site, without taking into consideration the buildings or developments on the site”
Put very tersely, the question is, should the computation of the revised rent be restricted to the bare land or should it include the developments on the bare land
For the specific issue being contested in this appeal, the relevant clause on the Lease Agreement is set out in clause 7(b)(i)-(iii) which reads thus:
“(i) the rent hereby reserved shall be subject to revision every 20(twenty) years of the term hereby created and such revised rent shall be fixed by agreement between the Lessors and the Lessees;
(ii) if the Lessors and the Lessees are unable to agree to the revised rent to be paid the matter shall be referred to an Arbitrator to be appointed by agreement between them or in the absence of such agreement to an arbitrator appointed by a Judge of the High Court Lagos;
(iii) the amount at which the revised rent shall be fixed by an Arbitrator appointed under this clause shall be such as in the opinion of the Arbitrator is a fair and reasonable rent for the premises having regard to rents obtainable at the commencement of the revision period for similar lands of similar areas and amenities similarly situated.” (emphasis supplied)
It seems to me that it is to the underlined or italicised words in clause 7(b)(iii) that one is obliged to turn in order to embark on the task of determining what should be the parties intention to the revised rent which must be fair and reasonable for the premises, at the commencement of the revision period for similar lands, and situated in an area with similar amenities. Ascertainment of the parties’ intention clearly entails interpreting or construing the terms of the written agreement, i.e. the lease agreement in such a way that their view will be discovered. It seems to me that the terms ‘premises’ and ‘lands’ as used in the con of clause 7(b)(iii) call for closer scrutiny.
Let us first examine the meaning of the term “premises”. From the many learned legal works cited to us by appellant’s counsel- Corpus Juris Secondum (supra), Jowitts Dictionary of English Law( supra) and Strouds Judicial Dictionary of English Law (supra), it appears that the term ‘premises’ has a fluid or flexible meaning without a static connotation. It sometimes means bare land and sometimes land with buildings thereon, its meaning at any given. time would be determined according to what the parties so decide, as may be ascertained from the document executed by the parties. On the other hand, from the authorities cited by the respondents Ponsford v. H.M.S. Aerosols, Doe d. Hemming v. Willetes (supra), Cuff v. J & F Store Property Co. Ltd (supra) and Turner v. York Motors Property Ltd – the term ‘premises’ under the Recovery of Premises Law, Cap 118, Law of Lagos States, is used in the two senses of buildings with its grounds or appurtenances or simply as land without any building thereon.
It may be noted that what can be distilled from the authorities of decided cases cited to us, including a welter of definitions in lexicons is that the term ‘premises’ may connote bare land or the land with the buildings thereon, depending on what the parties intend it to connote, having regard to the circumstances of the case. In the final analysis, there is no doubt whatsoever that the meaning or the definition of the term “premises” is fraught with difficulties and whether it is intended to convey a precise or specific meaning will continue to exercise the courts because the situation in each case will unquestionably depend on the facts of the case thereof.
Now the word “land” as used in the Lease Agreement, according to appellant’s learned counsel, relates to “premises” and therefore, he further contends that as such the court will have to be guided by the authoritative way it is expressed by learned authors of Halsbury’s Laws of England (4th ed.) (supra) and permit me to reproduce it again, if only for emphasis:
“when land is used in a lease or other assurance, “land” includes if there is nothing to restrict its technical meaning, all kinds of land whether arable, meadow or otherwise, and also everything on or under the soil; all buildings erected on it …”
Section 3 of Interpretation Act, Cap. 192, Laws of the Federation states thus:
“Immovable property or ‘lands’ include land and everything attached to the earth or permanently fastened to anything which is attached to the earth and all chattels real.” This statutory definition is all-embracing. Another wide statutory definition of land is contained in the Property and Conveyancing Law of Western Nigeria and runs thus:
“Land includes land of any tenure, buildings or parts of buildings (whether the division is horizontal, vertical or made in any other way), and other corporeal hereditaments, and an easement; right, privilege or benefit in, over, or derived from land.”
This shows that the term ‘land’ has both a natural and artificial content but it is generally in the natural content in terms of the ground and its subsoil and things growing naturally thereon that comprise its basic element. See B.O. Nwabueze, Nigerian Land Law (1972 ed.) p.1.
Let me add to the vexed definitions of land the Roman maxim which found its way into the English common Law quic quid plantatur solo, solo cedit (whatever is affixed to the soil, belongs to the soil) while the judicial and academic conflict of opinion rages whether that maxim of English Common law is also a rule of Nigerian customary law. While that debate subsists, the better view on the authorities of Santeng v. Darkwa 6 WACA 52 and Moore v. Jones 7 NLR 84 appears that it is not. Be that as it may, it must be borne in mind that this maxim is not an immutable rule of law because a lot depends on the fixture attached to the ground or building. See Adeniji v. Ogunbiyi 1965 NMLR 395.
The above definitions of land, including the maxim in respect thereto, show the increasing difficulty in determining the legal conception of land, and the final word in this regard. No doubt, even to the laymen today, land no longer means the ordinary ground with its subsoil, but surely includes buildings and trees growing thereon. for the court in any circumstance, therefore, to exclude the structures and objects, like buildings and trees standing on the ground in the connotation of the term “land” it must be shown – to be clearly discernible from the content of the executed or written document.
Learned counsel for the appellant has strongly submitted that the lower court in its leading judgment misdirected itself when in its consideration of whether the land, the subject matter of controversy in this regard, was bare land limited itself to clauses 3 and 6 in the Lease Agreement rather than examine the entire Leave Agreement. Support for this limitation was given by Niki Tobi, J.C.A. in his concurring judgment where he expressly stated: “I shall take only two clauses in the lease …” His Lordship then proceeded to reproduce clauses 3 and 6 verbatim. Counsel also submitted that it is a fundamental rule of the interpretation of statutes or documents that once the language of the statute or document is clear the court is obliged to give it a literal interpretation. See Orubu v. N.E.C. (1988)5 NWLR (Pt.94) 323. He further submitted that it is a fundamental principle of interpretation for the court to discover the intention of the parties as may be deducible from the entire document or instrument executed by the parties, the terms of which they had agreed should bind them. Having done so, the court must give to effect that intention and nothing more pretentious can be the duty of the court in the interpretation or construction of a document; after all, it has no jurisdiction to rewrite an agreement for the parties. See Alhaji Tukur v. Government of Gongola State (1989) 4 NWLR (Pt. 117) 517; (1989) 9 SCNLR; Chief Ogbonna v. Attorney General Imo State & Ors. (1989) 5 NWLR (Pt.21) 312 and N.E. W. Ltd v. Denap Ltd (1997) 10 NWLR (Pt.525) 481.
I am in full support of the submission of appellant’s counsel that it was a misdirection for the lower court in consideration of whether the land, the subject matter in controversy, was bare land or included the structures thereon to have relied on only clauses 3 and 6 in the entire lease agreement to arrive at its conclusion. The learned Justices of the lower court were clearly in error because it is a fundamental rule of construction of instruments that its several clauses, must be interpreted harmoniously so that the various parts of the instrument are not brought in conflict to their natural meaning. Emphasising the same point, the learned authors of Halsbury’s Laws of England. Vo1.12, (4th ed.) para. 1469) stated tersely but pointedly:
“The best construction of deeds is to make one part of the deed expound the other, and so make all the parts agree. Effect must, so far as possible, be given to every word and every clause.”
The same principle was approved by this Court in Lamikoro Ojokolobo & Ors. v. Lapade Alamu & Anor. (1987) 7 SCNJ 98, (1987) 3 NWLR (pt.61) 339. Surely, a fragmentary interpretation of the various clause of the lease agreement without recourse to the entire Lease Agreement would do violence to the content in which the controversial terms “premises” and “land” were employed and therefore the ascertainment of the parties’ intention in relation to these two terms was bound to be distorted and erroneous and consequently unacceptable. Perhaps, it is appropriate at this juncture to consider the leading cases cited and relied upon by the parties in this contest, as it appears’ considerable light would be shed therefrom on the question whether the revised rent should be restricted to the bare land or should include the buildings erected thereon. First let us turn to Ponsford v. H.M.S. Aerosols (supra). Here there was lease dated August 19, 1968 of factory premises in Barking for 21 years and the revision of rent was to be referred to a surveyor under an arbitration clause where the parties disagree on the revised rent. In 1969, the premises were burnt down and rebuilt out of the proceeds of insurance. The licence for the improvements which were in fact made was contained in a document dated November 14, 1969, where in clause 1 it provided:
“The landlords hereby grant unto the tenants licence to execute in and upon the demised premises the several alterations and works indicated in the plan annexed …. It is hereby agreed and declared that all the lessee’s covenants and conditions contained in the lease which are now applicable to the premises demised thereby shall continue to be applicable to the same when and as altered and shall extend to all additions which may be made thereto in the course of such alterations.”
The lease of August 19, 1968 indicated, inter alia, that the rent would be assessed “as reasonable rent for the demised premises”. The trial judge. held that a reasonable rent for the premises should be assessed without taking account of the improvements made by the defendants. The plaintiffs appealed on the ground that the judge was wrong in his construction of the rent review clause. On appeal, the Court of Appeal, by a majority of 2:1, reversed the judgment of the trial court and held that the revised rent would include the improvements made on the demised premises.
Respondents strongly submit that Ponsford case is supportive of their contention that the assessment of revised rent in this appeal for the demised premises should include the improvements made on the demised premises. As would be expected, the appellant submitted to the contrary. He further urged that Ponsford case was distinguishable in that the relevant clause, reproduced above, clearly stipulated and directed that the improvements to the demised premises were to be included in the revised assessment of rent. Secondly, unlike the case in hand what was demised was not bare land but developed property. Furthermore, the case in hand, simply involved erection of a building whereas in the Ponsford case the licence expressly involved improvements to a building that was leased.
In an exercise such as this I must observe that I find the head notes in Ponsford case to be of considerable assistance although I am aware it should not ordinarily be evoked to decide the issue in controversy except to state the obvious or to resolve doubt and ambiguity as in that case. The head notes clearly stated that “it was common ground that the improvements, once made, became part of the demised premises”. It is very clear that the facts and circumstances of the present case are easily distinguishable from those of Ponsford case. It will be manifestly perilous to rely on it in the determination of the narrow issue raised in this appeal having regard to the peculiar circumstances of the Lease Agreement sought to be interpreted by the court.
Now to Cuff v. J & F Stone Property Limited (supra). The issue decided in that case was put by Megarry J., as he then was, at p.258:
“What from the summons and evidence initially appeared to be the question for decision was whether or not the survey was to have regard to the improvement. The summons sought a declaration that the rent was to be assessed ‘without disregarding any improvement’ to the demised premises effected by the property company. However, as the argument proceeded it became apparent that this was not the real question between the parties, for Mr. Priday advanced no conclusion, whether based on section 34 or otherwise that the improvements should be wholly disregarded. His case was that while he accepted that the improvements should not be wholly disregarded, he asserted that, to put it shortly, the surveyor should temper the effect to be given to the improvements by what he considered to be reasonable”. (emphasis is mine)
Cuff case provides that the improvements should not be wholly disregarded whereas in this appeal, the pith of appellant’s case is that they should not be taken into account in the assessment of the revised rent for the demised premises. Furthermore, the improvements in Cuff case had been made prior to the execution of the lease and therefore the improvements could not by any disingenuous interpretation be excluded in computing the revised rent unless such exclusion was expressly stated. In other words, the improvements in that case unquestionably formed part of the demised premises.
The Australian case of Turner v. York Motors Property Co. Limited (supra) is a different kettle of fish; it involved a statutory interpretation of the term “prescribed premised” as defined and adopted in Part III of the Landlord and Tenant (Amendment) Act 1948-1949 NSW). In considering the term “premises” Dixon, J at p.75 said:
“The word ‘premises’ is no doubt a vague one but in legislation of this sort there are great advantages in a test of its application which is objective and consists in a readily ascertainable physical fact. Having regard to the history of the provision and the dictionary meaning of the work ‘premises’ I think that one should adhere to the rule laid down that bare land without buildings if let for the purpose of occupation as bare land, does not constitute premises.” Continuing, His Lordship said:
“If land is let upon terms that the tenant shall or may erect buildings which are not removable by him but will pass with the freehold, then I should say that the land and building when erected would form premises.”
Certainly, this dictum of Dixon, J was expressed as used in the legislation under reference whereas the term under contest is sought to be ascertained as may be gathered from the parties’ intention as stated by them in the Lease Agreement. Bearing in mind that Dixon, J in the statement credited to him above emphasized the vagueness of the term “premises”, it is then tolerably understandable to appreciate the coincidence in the view of the learned authors of Corpus Juris Secolldum (supra) regarding the elastic use of the term “premises”. I wish to reproduce again, if only for emphasis, the emphatic words of the learned authors:
“The word ‘premises’ has various meanings depending on the subject matter in connection with which it is used. It has no fixed legal significance, and no definition applicable to every situation.” (emphasis is mine)
It is manifest that the decision in Turner case cannot be the last word in the vexed quest for an enduring definitive connotation of the term “premises”. From the authorities, I am bound to re-echo that the term does not readily lend itself to any precise meaning; whatever it may mean, in my judgment, will depend on the intention of the parties as may be gleaned from the agreement subscribed to by them. Therefore, although I find the dictum of Dixon, J sound as expressed in Turner case, however, I would wish to stress that His Lordship’s approach in that case was borne out by the peculiar circumstances of that case. I regret that I am not persuaded that that approach can be extended to the peculiar circumstances of this case.
As earlier stated and emphasised in this judgment, clause 7(b) (iii) is fundamentally the key for the ascertainment of the real import of the words “premises” and “‘ands” as employed by the parties in the Lease Agreement. The term “premises” being elusive as clearly adumbrated above, clause 7(b)(iii) pointedly stipulated that the revised rent for the premises should be rent, having regard to rents obtainable at the commencement of the revision period for similar lands of similar area and amenities similarly situated. It is unquestionably clear that what was demised was bare land. It is equally beyond doubt that having regard to clauses 3,4,5 and 6 that buildings of prefixed descriptions were to be erected and kept in good and substantial repair, yet in clause 7(b)(iii) which is crucially fundamental to computing the assessment of revision of rent, it is significantly worthy of note that that clause did not state that the revised rent should be “rent for the premises having regard to the rents obtainable at the commencement of the revision period for similar premises of similar area and amenities similarly situated.”
Rather, the Arbitrator was directed, as expressly stated in the Lease Agreement, that the revised rent should be ‘rent for the premises having regard to the rents obtainable for similar lands of similar area and amenities similarly situated.’ The use of similar lands in clause 7(b)(iii) rather than similar premises is telling. In my judgment, it produces the marked difference and effect that the revision in rent should relate to bare land in contradistinction to premises with its inherent elusiveness in meaning.
I cannot conclude this judgment without saying a word about the attractive submission earlier made by learned respondents’ counsel when he contended agreeing with the view expressed in the leading judgment of the court below – that there being no stipulation directing the arbitrator to ignore improvements on the land while computing the revised rent, the arbitrator should take the improvements thereon into account. I said the submission is attractive rather advisedly. In fact, the submission is neither here nor there. After all, an equally misplaced argument on the converse by the appellant would no doubt be tenable. The submission in either way loses sight that the real issue in this appeal calls for the ascertainment of the parties’ intention in the Lease Agreement. In doing so, the court should bear in mind that it has a responsibility not to re-write the Lease Agreement for the parties but simply to give effect to their intention as may be deduced from the language employed by them.
From all I have said I would answer the question in this appeal to the effect that the revised rent should be computed on the basis of the fair and reasonable rent which can be obtained for the bare site, without taking into consideration the buildings or developments on the site. The appeal is therefore allowed while the judgment of the Court of Appeal is hereby set aside with N10,000.00 costs in favour of the appellant.
SC.147/1995
