Collection of Rent Arrears: Effect on Quit /Forfeiture Notice Issued

In the Supreme Court of Nigeria Holden at Abuja On Friday, the 5th day of February, 2021

Before Their Lordships
Olabode Rhodes-Vivour
Musa Dattijo Muhammed
Helen Moronkeji Ogunwumiju
Abdu Aboki
Emmanuel Akomaye Agim

Justices, Supreme Court
SC.105/2010

Between

Pillars Nigeria Limited … … … … Appellant

And

1. William Kojo Desbordes
2. Mrs. Doris N. Forson (Nee Desbordes) … … … … Respondents
(Substituted for Mr. Louis Desbordes and
Mr. Albert Desbordes on 14th May, 2018)

(Lead Judgement delivered by Honourable Emmanuel Akomaye Agim, JSC)

Facts

The Respondents, as Lessors, entered into a contract of lease with the Appellant for a plot of land situated at Plot B, Sabiu Ajose, Surulere Lagos. The contract was a 26-year Development Lease for the erection of a building within two years, to be completed on/or before 1979 on payment of annual rent payable in advance. The suit was initiated by the Respondents in 1993, to recover the property, due to non-compliance with leasing terms of erecting a building on the land.

Both the trial court and the Court of Appeal found that the Appellant, as Lessee, breached the terms of the lease. Dissatisfied with the decision of the Court of Appeal, the Appellant further appealed to the Supreme Court.

Issues for Determination

The following issues were considered by the Apex Court:
1. Whether the Court of Appeal was right by affirming the decision of the trial court, that the Respondents pleaded and proved service of statutory “Notice of Breach of Covenant” (Exhibit E) as required by law.
2. Whether the Plaintiff/Respondents have waived their right to forfeiture by demanding and collecting rent up to 1995, before the purported Notice to Quit was allegedly issued in line with the averments in the Defendant/Appellant’s Statement of Defence.

Arguments

Counsel for the Appellant submitted on the first issue that the manner of pleading the Notice of Breach of Covenant offends Order 17 Rule 4 of the High Court of Lagos State (Civil Procedure) Rules, 1994, which stipulates that pleadings should contain only statement in a summary form of the material facts on which the party pleading relies for his claim/defence, but not the evidence by which they are to be proved. Counsel argued that the Respondents ought to have pleaded the legal effect of the Notice of the breach as a fact, before it was tendered. He argued further that the name of the legal practitioner who issued the said Notice should have been pleaded, and that failure to call one Mr Alade Akinsote, who effected the service of the statutory notices as a witness, was questionable. He prayed the court to invoke the provision of Section 149(d) of the Evidence Act (now Section 167(d)), to hold that counsel for the Respondents withheld evidence.

Countering the submission, counsel argued on behalf of the Respondents that the statutory notices were validly served, and that despite the denial by the Appellant, DW1 admitted in evidence, service of the said processes subsequent to the denial in the pleadings. More so, the Appellant did not object to tendering of the said document(s) at trial in the suit, and so, cannot be heard to complain at the Supreme Court.

Regarding the second issue, it was the submission of counsel for the Appellant that the rent paid was subsisting till the year 1995 and that the receipt of arrears of payment during the subsistence of the statutory notice(s), necessarily destroyed the validity of such Notice.

Court’s Judgement and Rationale

Deciding the first issue, the court restated the trite position of law that pleadings should contain facts and not evidence. Documentary evidence need not be specifically pleaded to be admissible in evidence, so long as the facts by which such document is covered are expressly pleaded – OKONKWO v COOPERATIVE AND COMMERCE BANK (NIG.) PLC & 2 OTHERS (2003) 8 NWLR (Pt. 882) 347. In this case, the Notice of breach of covenant was pleaded, and the facts of the averred breach was pleaded. The Appellant did not deny the existence of the Notice of Breach of covenant, and the general traverse in paragraph 4 of its Amended Statement of Defence is of no value. Though the name of the legal practitioner that issued the notice of breach of covenant to the Appellant should have been pleaded, but failure to do so is of no moment. Further, the document being in evidence, the Appellant did not object to the admissibility of the notice of breach in evidence as exhibit, he is thus, estopped from contending that it is not sufficiently or properly pleaded; more so, as the essence of pleadings is to ensure that parties do not spring surprises on opponents.

Regarding the submission that the Respondents should have pleaded the legal effect of the notice of the breach as a fact before it is tendered, their Lordships held that the position of the Appellant stemmed from a misconception on the modern rule of pleadings, as the old legal terminology of pleading has since changed in line with new procedures. The pleader does not need to state the legal result of a document or facts pleaded, as this will amount to argument in pleading – EZEWANI v ONWORDI (1986) 4 NWLR (Pt. 33) SC. 27. In this instance, having pleaded the document in controversy, there was no need to plead its legal effect, as that would amount to argument in a pleading. The Apex Court concluded that, the Appellant failed to show that the decision of the trial court which held that Exhibit E was served on the Appellant, was wrong.

On the issue of service of the Notice of Breach of Covenant (Exhibit E), the trial court disbelieved the testimony of DW1 that he was not served with the said notice. The Court of Appeal affirmed the decision of the trial court, on the credibility of the witnesses. The Appellant abandoned its appeal against the decision of the Court of Appeal affirming the decision of the trial court, on the credibility of PW1 and DW1. Learned counsel for the Appellant, has correctly restated the law on the requirements of proof of service of the notice of breach of covenant. But, having accepted as correct the decision of the Court of Appeal, concurring with the decision of the trial court believing PW1 that Exhibit E was served on the Appellant and disbelieving DW1’s denial of such service, the brilliant arguments of learned counsel on the legal requirements of proof of service of notice of breach of covenant become valueless. It is settled law that, a party who has not appealed against a finding or holding in the judgement appealed against, cannot validly argue contrary to that finding or holding. Having accepted as correct the judgement of the Court of Appeal affirming the decision of the trial court that Exhibit E was served on the Appellant, further to the evidence of PW1, the Appellant could not argue that the service of the notice was not proved.

Deciding issue two, especially as it relates to waiver of rights to forfeiture upon collecting rent up to 1995 before the issuance of the Notice to Quit in 1992, the Supreme Court reiterated the findings of the trial court in this respect, and the affirmation of the salient finding by the Court of Appeal. It was the position of the Appellant that the Respondents demanded for rents which it paid up to 1995. By the evidence before the court however, the Respondents had written to the Appellant demanding arrears of rent owed, and the Appellant responded by issuing a cheque for payment (Exhibit O) dated 4/5/1992. Counsel for the Respondents was unequivocal in his determination to pursue forfeiture of the lease, and communicated this to the Appellant before the payment was made. More so, the trial court found that the Respondents only collected rent till 1991, contrary to the position of the Appellant that it paid rent up to 1995. This finding was affirmed by the Court of Appeal. The Appellant however, failed to challenge this significant finding of the lower courts. There is no ground of appeal on the holding of the Court of Appeal, that the Appellant deliberately falsified the years for which it alleged to have paid rents. The Apex Court agreed with the inference of the court below in affirming the decision of the High Court, that even though the Respondents collected rent till 1991, there was a letter by counsel for the Respondents – Exhibit N – written in 1992 clearly showing an intention to terminate the lease. Thus, the collection of arrears of rent before approaching the court, cannot amount to a waiver of the Notice to Quit issued to the Appellant.

His Lordship, Ogunwumiju, JSC stated that the fact that a landlord collected rent on a property still in occupation or possession of the tenant after notice to quit, cannot by any stretch of the law, equity or imagination amount to a waiver of the notice to quit even where the notice had expired, and the tenant refused to yield possession in time. The notice to quit would subsist until it is formally rescinded by the landlord, or when a fresh tenancy agreement is entered into.

Appeal Dismissed.

Representation
Chigbo Anainugwu with V.I.P Ozumba for the Appellant.

Tochukwu Onuike with Nnemeka Otagburuagu with Adaeze Anah for the Respondents.

PLEASE NOTE: The holding that “Equity demands that wherever and whenever there is controversy on when or how notice of forfeiture or notice to quit is disputed by the parties, or even where there is irregularity in giving notice to quit, the filing of an action by the landlord to regain possession of the property has to be sufficient notice on the tenant that he is required to yield up possession”, was an obiter dictum of His Lordship, Honourable Justice Helen Moronkeji Ogunwumiju, JSC.

Reported by Optimum Publishers Limited, Publishers of the Nigerian Monthly Law Reports (NMLR)(An Affiliate of Babalakin & Co.)