Validity of a Former Landlord’s Consent to Ongoing Construction by a Tenant Following Property Sale

CASE TITLE: J. I. T. LOGISTICS LTD V. MUHAMMED LPELR-80955 (CA)
JUDGMENT DATE: 22ND JANUARY, 2025
JUSTICES: JOSEPH OLUBUNMI KAYODE OYEWOLE, J.C.A.
DONATUS UWAEZUOKE OKOROWO, J.C.A.
EBERECHI SUZZETTE NYESOM-WIKE, J.C.A.
DIVISION: ABUJA

PRACTICE AREA: PROPERTY LAW

FACTS:

This appeal borders on a landlord and tenant relationship.

The Appellant in this appeal took a lease of a two-bedroom bungalow, including associated improvements and appurtenances in the property known as Pope John II Street, Maitama, Abuja, from the 1st day of January, 2008 to 31st December, 2017, for the first term from Late Sir Etim Inyang of blessed memory (hereinafter referred to as “the property”).

The sum of ₦40,000,000.00 (Forty Million Naira) only was paid, which represented the first five years’ rent, and the second tranche of five years was agreed to be paid at the beginning of the sixth year. The Appellant stated that the new landlord, the Respondent, through his solicitors Messrs BAGE Muhammed & Partners, in a letter dated 23/11/2021, informed them that the property had been transferred to the Respondent and that the Respondent requested to inspect the property, and before they could grant the request, the Respondent trespassed into the premises; they cited the letters dated 27th June, 2022, and 29th June, 2022.

They later received a letter on 30th August, 2022, from T.P. Tochukwu & Co, written on behalf of the Respondent, terminating the lease, and they had not paid the second payment/rent. The Appellant alleged that the Respondent caused massive hardcore stones to be dumped in front of the demised premises and prevented the customers of the Appellant from patronising the restaurant.

On their part, the Respondent filed his Statement of Defence to the Appellant’s amended statement of Claim and counterclaimed against the Appellant. He alleged and led evidence to prove that the Appellant breached fundamental covenants/clauses in the tenancy agreement, following which the Respondent gave the Appellant notice to remedy the breach vide a letter dated 27th June, 2022. But the Appellant failed to remedy the breach and instead challenged the ownership of the Respondent as well as refused the Respondent’s right to inspect the demised premises, following which the Respondent terminated the tenancy vide a letter dated 30th August, 2022.

At the end of the trial, the parties exchanged and adopted their respective Final Written Addresses; the Court delivered its judgment and dismissed the case of the Appellant and upheld the counterclaim of the Respondent.

Dissatisfied with the judgment, the Appellant appealed against the same to the Court of Appeal. The respondent also cross-appealed.

ISSUES FOR DETERMINATION:

The Court determined the appeal on these issues, thus:

1. Whether the Respondent proved by a preponderance of evidence that the Appellant breached Clause 2(E) of the Tenancy Agreement entitling the Respondent to exercise the Right of Termination of the Tenancy Agreement as found by the Trial Court?

2. Whether having regard to the facts, circumstances and evidence led on pleaded facts by both parties, the learnt trial Judge did not properly evaluate the evidence and came to a correct and sound decision by granting Defendant/Respondent’ counterclaim and dismissing the Plaintiff/Appellant’s claim?

(ii) Whether a trial Judge in the course of the consideration and evaluation of evidence possesses the judicial power to jettison and or abandon any of the evidence adduced before the Court?

The Cross-Appeal was determined on the following issues:

1. The finding of the lower Court that the Appellant did not breach Clause 2(f) of the Tenancy Agreement (Exhibit “J’) on the allegation that the construction of concrete or structural demarcation was done under the new tenancy without prior consent of the new landlord.

2. Whether the trial Court properly evaluated the case of N300,000.00the Cross-Appellant before arriving at the award of the sum of N300, 000.00 (Three Hundred Thousand Naira) only per month as a holding, fee which is less than the amount claimed in the counterclaim?

COUNSEL SUBMISSIONS:

The Appellant said that there wasn’t any breach of Clause 2(e) of the covenants in the tenancy agreement not to let the demised premises without prior written consent of the landlord. The Respondent submitted that the facts and evidence adduced by the Respondent at the trial Court in support of his claim that the Appellant breached Clause 2(e) of the tenancy agreement were proved based on the preponderance of evidence as the required standard of proof in a civil case, and the same was upheld by the trial Court. The letters of offer written to the interested offerors are proof of the breach. The Appellant copiously argued that the Respondent did not at any material time tender in evidence the acceptance of these letters of offer. Neither did the Respondent tender in evidence any Tenancy Agreement or Sublet Agreement of the demised premises by the Appellant in the course of the extant Tenancy Agreement, Exhibit “J”, to have amounted to a breach of the covenants in Exhibit “J”.

The Respondent in proof of the counterclaim of the breach of Clause 2 (e) of the Tenancy Agreement, Exhibit “J”, by the Appellant tendered in evidence Exhibit “P” (letter of Ben Ignakuleh & Co. dated the 19th day of October, 2022) and Exhibit “DW3” (letter of Novera Property Consultants dated the 19th day of October, 2022). Both Exhibits “P” and “DW3”, though they are letters of offer, are clearly attempts by the Appellant to lease the property. Both exhibits were issued without the prior consent of the Respondent /Cross Appellant.

The Appellant argued that Exhibit “P” and “DW3” cannot be proof of the offer of sublease because the conditions that make it a valid contract did not exist. The Appellant stated that Exhibits “P” and “DW3” were tendered by the Respondent, who failed to tender in evidence the acceptance of Exhibits “P” and “DW3″ and the consideration agreed upon by the Appellant and the purported sublease. The Respondent further failed to tender in evidence any sublet agreement executed between the Appellant and the sublease”.

The Respondent through Exhibit D from his lawyer, notified the Appellant among other breaches, the breach of Clause (e) of the tenancy agreement, which deals with the issue of subletting part of the premises, thus necessitating the exercise of his right of termination of the agreement in line with the terms of the agreement.

On page 641 of volume 2 of the records of appeal, lines 14-19 (4th paragraph) of exhibit D, it is reproduced thus:

“Clause 2 (e) expressly prohibits the subletting, underletting or otherwise parting with possession of the demised premises, all solemn covenant that your client willingly undertook to be found but would fundamentally deviate from them by erecting structures as admitted without written consent or approval, subletting and underletting the said premises breaches that go to the root of the contract and injure our client’s proprietary interest in the property.” Also, Exhibit I was tendered during the cross-examination of PW1 (see page 758, volume 2 of the records). In paragraph 3 of the said Exhibit I, dated 27th June, 2022, a demand was made on the Appellant thus: “You are requested to remedy the said breach, i.e., to return the demised premises to the state before now and furnish us with evidence of compliance within (7) seven days of receipt of this letter.”

DECISION/HELD:

The Court dismissed the appeal for lack of merit. Consequently, the judgment of the trial Court was upheld. The Cross-Appeal was found meritorious by the Court; it was therefore allowed.

RATIO:

LANDLORD AND TENANT- TENANT: Whether the consent of a previous landlord can validly authorize continued construction/development by a tenant after the property is sold to a new owner

“It remains to see the duration of the permission granted by the FCDA for renovation and development in the premises. The approval of the document authorising the same was for a period of 6 months. Can it be said that approval given by the FCDA in 2008 for a 6-month period is valid for the purpose of development carried out on the premises by the Claimant at the time of events that precipitated this action? The answer is not farfetched; it is a resounding ”NO. Also, can it be said that the consent given by the previous landlord is for developments and construction to continue after the purchase of the property? The answer is obviously negative. Whereas standard tenancy preserves the covenants that require consent when the original landlord sells to a new owner, the new landlord is still legally required to provide the consent before the tenant can construct or restructure under the tenancy, except a new lease specifically states otherwise. See REGISTERED TRUSTEES OF THE LIVING CHRIST MISSIONS & ORS v ADUBA & ORS (2016) LPELR – 415191 (CA).” PER OKOROWO, J.C.A.

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