IN THE SUPREME COURT OF NIGERIA
On Tuesday, the 5th day of March 1963
WILL & BUSCH LIMITED ...................................................................... APPELLANTS
HADJI SULU ALLI-BALOGUN ........................................................................ RESPONDENT
Appeal by defendant company: Lagos Suit No. LD/1246161)
The plaintiff (and his late brother) gave a lease to the defendant of certain premises which included a store area, with a covenant not to assign, underlet or part with possession without the landlords' consent in writing. Later, the National Bank, which put up a building, took in the store area, but the High Court ordered the Bank in October, 1959, to deliver possession to the plaintiff and the defendants of the area trespassed on. That area was in the possession of two tenants of the Bank. The defendants wrote to them asking them to attorn tenants to the defendants; one agreed, the other asked for time to consider the position. On 31st October, 1960, the defendants made a settlement with the Bank, under which the Bank would pay the defendants proportionate rent for the past and those two tenants would each pay the defendants a proportionate share of the rent. In April, 1961, the plaintiff gave notice that the defendants had been guilty of breach of the covenant in that they had sublet or parted with possession of the store area to those two persons, and in May, 1961, sued the defendants for forfeiture of the lease and delivery of possession.
Paragraph 10 of the defence was as follows:
"The defendants aver that they are in possession of the said premises through the Chief Federal Land Officer and A.S. Basmadjian who were in possession before the judgment of Mr Justice Coker."
The High Court gave judgment for the plaintiff. On appeal the defendants argued that as it was not until October, 1961 that the defendants began to receive rent, there had been no breach of covenant before the action was begun.
The criterion was not the actual payment of rent but the parting with possession; on the defendants' pleading and the facts, the said persons delivered possession on the 31st October, 1960, the date of the settlement between the defendants and the Bank, and then the defendants authorised them to be in possession on the defendants' behalf on the basis of apportionment of rent: in other words, the defendants on that day, after receiving possession, underlet and granted possession to those persons of the relevant portions of the premises; and that was a breach of the covenant.
Horsey Estate Limited v. Steiger  2 Q.B. 79, 92; Abrahams v. Mac Fisheries Limited (1925) 94 L.J.K.B. 562, 566.
APPEAL from the High Court of Lagos:
J.E.David for the Appellant.
H.M. Alli-Balogun for the Respondent.
Taylor, F.J.:-The plaintiff, who is the respondent in this appeal, sued the defendant company claiming a declaration that the said company had incurred a forfeiture of their lease dated the 15th August, 1951 in respect of the premises known as 63-69 Broad Street, Lagos. The plaintiff also sought to recover possession of the premises by virtue of the forfeiture incurred.
The learned trial Judge came to the conclusion that there was a breach as a result of which a forfeiture was incurred, and ordered the defendant company to deliver up possession of the said premises to the plaintiff on or before the 17th May, 1962.
The defendant company, who will now be referred to as the appellants, have appealed against that Judgment and have sought and obtained leave to file and argue the six additional grounds of appeal attached to their application in this connection.
The respondent and his brother, now deceased, demised the premises in dispute to the appellants by a lease dated the 15th August, 1951 for a term of 25 years at a rent of £450 per annum. By virtue of Clause 2(vi) the appellants covenanted:-
"Not to assign, underlet or otherwise part with the possession of the demised premises or any part thereof without first obtaining the consent of the lessors in writing."
Some time after this demise, the National Bank of Nigeria Limited disputed the title of the respondent and his brother to a portion of the demised premises and entered into possession of same. The respondent and his brother together with the appellants as plaintiffs took action against the National Bank and others to wit Suit L.D./361/55. This action was consolidated with another suit by the respondent and his late brother against the National Bank of Nigeria Limited and others, Suit L.D./1159!57. Judgment was given by Coker, J., on the 27th October, 1959 and insofar as it relates to the parties to this appeal and the property in dispute the effect of this Judgment was that possession of the portion of the premises above referred to was ordered to be delivered up to the present appellants and respondent as plaintiffs in those consolidated Suits by all the defendants in the action. The title of the present respondent and his late brother was confirmed.
Before Judgment was delivered, and on the 16th day of November, 1956, the National Bank of Nigeria Limited as the lessors granted a lease of portion of the premises to the Governor-General of the Federation of Nigeria for a term of five years from the 1st June, 1956 at the rental of £5,250 per year (see exhibit "K"). Also in possession of a portion of the said premises as a result of a lease granted by the National Bank was one A.S. Basmadjian. There is no document in evidence representing the terms of the lease between Basmadjian and the National Bank, but the former in his evidence says that he first moved into the premises about September or October, 1959.
It would appear from these proceedings, that after the Judgment delivered by Coker, J., no steps were taken to enforce the order for possession on the National Bank of Nigeria Limited The next step taken was the writing of the letter dated the 30th May, 1960 to Mr A.S. Basmadjian by Solicitors to the present appellants. I shall not quote the whole of this letter as it is quoted in full in the Judgment of the trial Judge. I shall here only say that in para graph 2 of same the letter refers to the Judgment of Coker, J., and gives the impression that possession was granted to the appellants without any reference to the respondent.
Paragraph 3 I quote as follows:-
"Our clients are prepared and willing that you should attorn tenants to them and they are ready to negotiate terms with you on a reasonable basis. Failure to arrive at settled terms within a week of the date of this letter will compel us to levy execution for possession in terms of the Judgment and the blame for that will attach to nobody else but yourselves. We therefore trust that you will co-operate with us in your own interests."
The copy of the letter sent to the Nigerian Government as the other lessees of the National Bank, who will from now be referred to as the Chief Federal Lands Officer, was not put in evidence, but it is clear from the contents of exhibit "H", the reply, that a letter of the same date and of similar contents was sent to the Chief Federal Lands Officer by the said Solicitors to the appellants. There is no letter tendered in evidence written by Mr A.S. Basmadjian in reply thereto. Exhibit "H" however is the reply of the Chief Federal Lands Officer and his reply was not unfavourable. The fourth paragraph reads as follows:-
"As soon as I have a firm reply from the bank (i.e., the National Bank), which as explained above is not expected for two or three weeks, I shall communicate again with you. Meanwhile, in view of the strong possibility that amicable settlement will he found in this rather difficult matter, I have to enquire whether your clients are prepared to wait rather longer than the period of one week contained in your letter before any undertaking on behalf of Government that the rent for the last year of the term will not he paid over to the National Bank without prior notice being given to you."
That A.S. Basmadjian agreed to the suggestion contained in exhibit "J" shortly after it was sent to him can be gathered from his own evidence where he says that:-
"I agreed to the suggestion on exhibit 'J' to be treated as tenant of defendant/company. I agreed about one month after receiving the letter (exhibit 'J'). The defendant/company also agreed to have me as a tenant.
In fact they took my money."
In the same year and on the 31st October, 1960 exhibit "C" was entered into purporting to be terms of settlement in Suit L.D./361/55 but was in fact a settlement entered into by Messrs Witt & Busch Limited and the National Bank of Nigeria Limited It was signed by their solicitors. Its terms are in my view important and I intend to set them out fully as follows:-
"1. Payment of proportionate rent for the area occupied by the Chief Federal Lands Officer from 1st January, 1958 until he vacated the premises amounting to approximately £1,436-14s-0d per annum, payment to be effected immediately for past years.
2. Payment of proportionate rent in respect of Ground floor occupied at present by A. S. Basmadjian from 1st January t958 amounting to approximately £425 per annum.
3. Tenants under headings 1 and 2 and future tenants be authorised to pay their proportionate share of rents to Messrs Witt and Busch Limited, Lagos.
4. Consent of Messrs Witt and Busch Limited must be obtained to all letting and this will not be unreasonably withheld.
5. If the National Bank of Nigeria should find it impossible to let the part of the building allotted to Messrs Witt and Busch Limited they agree to the partitioning of the building within three months from expiry of the last letting in accordance with the Judgment of Court dated 27th day of October, 1959, costs to be equally shared.
6. Access to be granted from Broad Street to the premises allotted to Messrs Witt and Busch Limited to them as well as to their tenants.
7. If the National Bank leases the premises on behalf of themselves and Messrs Witt & Busch Limited they must include a Clause that tenants should be responsible for maintaining the building in good repair and in that condition to deliver it up at the expiry of the lease"
That, in my view, is a short history of the material dealings with the land in dispute up to the time the Writ of Summons was filed on the 23rd May, 1961. There are other letters such as exhibits "B", "D" and "E" which were also written before this date but only "B" is relevant in the consideration of the main point in issue in this case whether there was a breach of Clause 2(vi) of the agreement date the 15th August, 1951.
During the hearing of this appeal Mr J.E.C. David for the appellants sought and obtained leave to argue this additional Ground of Appeal that:-
"The learned trial Judge erred in Law in giving Judgment for forfeiture and possession when on the plaintiff's own case the notice was bad and invalid as what was proved and accepted by the trial Judge took place subsequently to the Notice."
The Notice there referred to is that contained in exhibit "B" dated the 24th April, 1961 and was written by the respondent to the appellants. The relevant portion is paragraph 2 which reads thus:-
"The breach complained of is that you sublet and/or part with the possession of portion of the above premises (i.e., the store area thereof) to the Chief Federal Land Officer and A.S. Basmadjian by letting part of the demised premises to them after the court had made an order for the National Bank of Nigeria Limited to vacate possession in a Judgment delivered in the High Court of Lagos on 27th October, 1959, in a consolidated action Suit Nos. L.D.361/55 and L.D.159/57. This is contrary to your covenant not to assign, underlet or otherwise part with the possession of the demised premises or part thereof without first obtaining your Lessors' consent in writing (see Clause 2(6) of the Deed)."
If there was an assignment, underletting or parting with the possession, that consent was not obtained is not contested nor has there been any argument before us as to whether relief should have been granted against forfeiture. The sole issue argued was whether there was in fact a breach before the issue of the writ and one which was covered by the respondent's notice to remedy the breach served on the appellants.
It is clear and not disputed that by the Judgment of the 27th October, 1959 possession of the premises in dispute was given to the appellants and respondent. After this the next step should of course have been for both parties to this appeal to take the necessary legal steps to put the appellants in physical possession. As I have said before, this was not done. It is also important to bear in mind that by the Judgment of Coker, J., the National Bank were found to have trespassed on the area now in dispute and referred to as the store site by erecting a substantial building thereon without any title to same. Now the evidence shows that on the 30th May, 1960 the appellants offered A.S. Basmadjian the alternative to being evicted of attorning tenant to them and that a month after that letter A.S. Basmadjian agreed to attorn tenant. Mr J.E.C. David drew our attention to certain portions of the record and particularly in the evidence of Mr A.S. Basmadjian in which he says that in fact he did not pay rent to Messrs Witt & Busch till October 1961 and that was the 1961-62 rent. If I understand Mr David's contention rightly, he says in effect that because there was no payment of rent to Messrs Witt & Busch before the date of the Writ of Summons there was no breach of the covenant proved before the Notice exhibit "B" was sent out and certainly not before the date of issue of the writ. Mr J.E.C. David has taken the payment of rent as being the criterion for a breach of this covenant. Surely an agreement whereby a third party goes into possession of property to-day though rent may on the terms of the agreement be payable at the end of each year in arrears is as much a breach to-day as it will be a year hence when the rent is due and payable. That in short is Mr Balogun's contention. In my view in a covenant such as the one under consideration the criterion of the breach is the parting with the possession. A case to the point is that of Horsey Estate State Limited v Steiger  2 Q.B.D. 79 at 92 where Lord Russell, C.J., said that:-
"Finally, as to the alleged breach by underletting, it is admitted that there has been no assignment within the meaning of the covenant against assignment. What has taken place is this. The defendants, having agreed to sell to the new company, have let them into possession pending the completion of the purchase, the new company undertaking to pay all rents, rates and outgoings in connection with the premises or the business there carried on. There is a provision for redelivery of possession to the defendants if the contract should be rescinded. It is contended that this makes the new company the defendants' undertenants."
A little on the Judgment continues in these words:-
"In plain sense and according to the ordinary under standing of men, this is not a case of underletting at all, but merely a case in which the new company has been let in on terms of purchase. Had the covenant been (as is of late years often the case) against parting with possession without licence of the landlord, the plaintiff company would have proved a breach of such a covenant, but they have not established a breach of the covenant in question, which is against underletting only."
The last case to which I would like to refer on this point is that of Abrahams v. Mac Fisheries Limited 1925, 94 L.J.K.B. 562 at 566 where Fraser, J. says this:-
"On the correspondence and on the evidence certain facts emerge which seem to me to be quite clear. I think that here there was clear parting with the possession of part of the premises by the defendants. The handing over of the key, one knows, has not always been held to be evidence of parting with possession. No doubt the key was in the possession of Mr Mauroux and his manageress and they were in possession for a considerable time. Mr Mauroux was in possession of the premises, he had the key, his name was over the door. There was a clear breach of the covenant. It is true that the cheque given by Mr Mauroux to the defendants' agents was never cashed, but it remained with the agents. On the facts it was a case of this kind: Repairs had been done to the knowledge of the defendants. Terms of under letting had been agreed. The defendants were saying to Mr Mauroux "Go in and carry on your business. But if any hitch occurs later on then you will have to give up possession." There was a breach of the covenant not to part with possession."
It seems to me as I understand the facts of this case that Messrs Witt & Busch were saying very much the same thing to Mr A.S. Basmadjian in this case though they were putting him in a very much stronger position. They were saying to him: "We have got an order for possession against you, either you attorn tenants to us in which case negotiations will begin as to the terms of such tenancy or, if you fail to do so within one week (expiring in the first week in April), we shall levy execution for possession." In reply to this as the first portion of the evidence of A.S. Basmadjian to which I have already referred shows, Basmadjian agreed, and having agreed it is important to note that he was there and then left undisturbed in possession. The next step is the settlement signed by Solicitors to Messrs Witt & Busch and the National Bank, erstwhile landlords of A.S. Basmadjian, and in the terms of settlement is included the method of apportionment of rent and future payment of rent. This was dated 31st October, 1960. The terms of settlement, be it noted, dealt also with the apportionment and future payment of rent by the Chief Federal Lands Officer. As I understand the terms of settlement with particular reference to paragraphs 1 and 2 the present appellant company were to receive a proportionate part of the rent backdated to the 1st January, 1958. How then can it be said in those circumstances that Messrs Witt & Busch who had covenanted with the respondents not to assign, underlet or otherwise part with the possession of the premises or any part thereof, have not broken this covenant when at the very latest on the 31st October, 1960 they allowed the Chief Federal Lands Officer and A.S. Basmadjian, tenants of a third party who has been held to be a trespasser, to continue to remain in possession after the Judgment of Coker, J., of the 27the October, 1959 on the terms that rent is apportioned and backdated to 1958 between Messrs Witt & Busch and be it noted The National Bank of Nigeria Limited, a person whom, as I have said before, Coker, J., has held to have not title and against whom possession has been ordered.
I should, at this stage, draw attention to paragraph 10 of the Statement of Defence of the defendants which reads thus:-
"The defendants aver that they are in possession of the said premises through the Chief Federal Lands Officer and A.S. Basmadjian who were in possession before the Judgment of Mr Justice Coker."
Learned Counsel for the appellant was at pains to explain the effect of this admission in the Statement of Defence. In my view when this paragraph of the defence is read in light of the facts of this case on appeal, and with particular reference to exhibits "H" and "C" and the Judgment of Coker, J., the only meaning that can be fairly ascribed to it is that on the 31st October, 1960 (the date on the terms of settlement), the Chief Federal Lands Officer and A.S. Basmadjian delivered possession of the relevant portion of the premises, and then the appellants authorised them to be in possession on the appellants' behalf on the basis of apportionment of rent: in other words, the appellants on that day, after receiving possession, underlet and granted possession to those persons of the relevant portions of the premises. In law that is what was effected in substance on the 31st October, 1960.
That is a breach in my view of Clause 2(6) of the agreement under review in this appeal.
As I have said earlier that was the sole point argued by Mr J.E.C. David and it disposes of the appeal. I would dismiss the appeal for the reasons stated with costs assessed at 28 guineas in favour of the respondent.
BRETT F.J.:- I concur.
BAIRAMIAN, F.J.:- I concur.