➥ CASE SUMMARY OF:
Joseph C. Okoye V. Dumez Nigeria Limited & Ors. (1985) – SC
by “PipAr” Branham-Paul C. Chima.
Supreme Court – SC.89/1984
➥ JUDGEMENT DELIVERED ON:
Friday, the 7th day of June, 1985
➥ AREA(S) OF LAW
Doctrine of notice.
➥ PRINCIPLES OF LAW
⦿ OPTION CLAUSE IN A TENANCY AGREEMENT BINDS SUCCESSIVE LESSORS
An option clause in a tenancy agreement is a covenant which runs with the land and binds the successors of both the lessor and the lessee in possession. It is immaterial that the lease is not registered provided the lessee has entered into possession and paid the rent pursuant to the agreement, he acquired a legal tenancy. Both parties in such a case are bound by the terms of the agreement and the parties are treated as having the same rights and as being subject to the same liabilities as if a valid lease had been granted. See Manchester Brewery Co. v. Coombs (1901) 2 Ch. 608, p.613. — Coker, JSC.
⦿ SUPREME COURT CANNOT CONSIDER ISSUE WHICH LOWER COURT DID NOT CONSIDER
There is no averment to that effect in appellants’ statement of claim in the Court of trial, and the issue was not even raised on appeal. None of the Justices of the Court of Appeal referred the issue in their judgments. Since we have not the benefit of the opinion of the Court below on the issue, it is inappropriate for this Court to consider it. – See United Marketing Co. v. Kara (1963) 1 WLR. 523; Ahamath v Umma (1931) A.C. 799. — Karibe-Whyte JSC.
⦿ REGISTRABLE INSTRUMENT NOT REGISTERED CANNOT BE RELIED UPON TO PROVE TITLE
The crucial question to be answered in this appeal is what is the effect of the non-registration of Exhibits – E’ and ‘F which are registrable instruments within the provisions of section 2 of the Land Instruments Registration Law. There is a long and impressive judicial authority for the proposition that the non-registration of a registrable instrument renders such instrument inadmissible as evidence in a litigation where such instrument is relied upon as evidence of title. – See Abdallah Jammal v. Said; & Fetuga 11 NLR. 86. Elkali & anor. v. Fawaz 6 WACA. 212 at p. 214. Coker v. Ogunye (1939) 15 NLR. 57; Ogunbambi v. Abowab (1951) 13 WACA. 222. Amankra v. Zankley (1963) 1 All NLR. 364. Section 15 of the Lands Instrument Registration Law provides simply as follows – “No instrument shall be pleaded or given in evidence in any Court as affecting any land unless the same shall have been registered. Provided that a memorandum given in respect of an equitable mortgage affecting land in Eastern Nigeria executed before the 1st day of July, 1944, and not registered under this Law may be pleaded and shall not be inadmissible in evidence by reason only of not being so registered.” — Karibe-Whyte JSC.
⦿ UNREGISTERED INSTRUMENT IS ADMISSIBLE TO SHOW POSSESSION
It would therefore seem to me apposite and admissible in this action where the documents, Exhibits ‘E’ & ‘F’ were tendered in an action against the respondents for a declaration and trespass, not for the purposes of claiming title but as evidence that respondents were lawfully on the land in dispute. It is admissible to show that respondents were not trespassers to the land in dispute. In my opinion where a registrable unregistered Instrument is regarded as inadmissible in evidence, it may be necessary on a proper consideration of the document itself, and the purposes for which it was tendered to determine whether it is not admissible for that purposes. If the purpose for which it is tendered did not affect any legal interest in land, it is in my opinion admissible for the purpose for which it was produced – namely in this case an equitable right to remain all the land. — Karibe-Whyte JSC.
⦿ THE PURPOSE OF REGISTERING INSTRUMENT
The purpose of registration is to protect third parties from fraud and the element of surprise likely to arise from non-registration. Hence where a purchaser with notice of the possession by a third party enters into contract, with respect to the land, with respect to the land he will not be entitled to rely on the want of registration by the third party. See Ogunbambi v. Abowab (1951) 13 WACA. 222. The equity of the non-registered instrument binds subsequent purchasers with the exception of bona fide purchasers for value without notice of the existence of the equity. – See Fakoya v. St. Paul’s Church, Shagamu (supra). — Karibe-Whyte JSC.
➥ LEAD JUDGEMENT DELIVERED BY:
⦿ FOR THE APPELLANT
Chief G.C.M. Onyuike, S.A.N.
⦿ FOR THE RESPONDENT
O. Balonwu, S.A.N.
➥ CASE FACT/HISTORY
The facts were that 1st respondent a Principal Contractor constructing the East-West Road, through Rivers State, entered into a Lease Agreement on the 17th May, 1974 with the families of Wegwu, Ohakwu and odunwo for 5.5 acres of their land for a term of 12 months at a monthly rent of N10 per acre totalling N660 for the term. The second respondent is a sub-contractor of the 1st respondent. The Respondents required the land for the storage of construction materials, plants and equipment, and for the excavation of laterite used for road construction. Respondents after paying rent for the term went into possession of the land and used it for the purposes for which it was acquired. The Lease Agreement had in it an option clause enabling respondents to renew. Between March to May, 1974 1st Respondent paid a total sum of N528 to the Landlords as compensation for land excavation in respect of the burrow pit dug by them on the land. Exhibit ‘D’ is the receipt for payments made in respect of the land leased to respondents. Respondents also fenced part of the land on which they stored their equipment and plants. This Agreement is Exhibit E in these proceedings. At the expiry of Exhibit E, the Lease was renewed for a further period of six months on the same terms and conditions with effect from the 18th May to 17th November, 1975. This is Exhibit F in these proceedings. The 1st respondent paid N330 as rents for this period and continued in possession. At the expiry of this term 1st respondent intimated the landlords of his desire to exercise his option to renew in accordance with the option clause in the agreement. The Landlords refused for the reason that they had committed themselves to leasing the area to the appellant. Respondents continued in possession with their equipment and plants as before.
In February, 1976, whilst respondents were in possession, their Lordships granted to appellant a lease for a term of 99 years over a piece of land measuring 18.662 acres including the area leased to respondents. This conveyance to this lease was registered as No. 95 at page 95 in Volume 1 of the Lands Registry in Port Harcourt. This is Exhibit ‘A’ in these proceedings. It is important to note that appellant in his evidence admitted that while negotiating for the lease he went round the respondents’ land and saw some vehicles. He also noticed a burrow pit and the area fenced with barbed wires. He was also shown the Agreement between 1st respondent and their Landlord that respondents would soon be leaving. He said that he was told that at the time he signed the Deed of Conveyance, respondents had moved out of the area. However, he was told in April, 1976 and he went and himself saw that there were many vehicles of the respondents on the land and that respondents were still excavating hundreds of tons of laterite and were completely destroying the topography of the area.
This appeal is against the judgment of the Court of Appeal, allowing by a majority of 2 to 1 the appeal of the present Respondents from the judgment of the High Court of the Rivers State holden at Port Harcourt. In the said High Court, the present Appellant as plaintiff had claimed against the present Respondents as defendants jointly and severally as follows: “(a) A declaration of leasehold title to that certain piece of parcel of land known as and called ANINKPOKWUODU situate being and lying at Choba Ikwerre in the Rivers State of the Federal Republic of Nigeria property of the Plaintiff under the Deed of Lease dated the 6th day of February 1976 and registered as No. 95 at page 95 in Volume 1 of Lands Registry in the Office at Port Harcourt. (b) N500,000.00 (five hundred thousand Naira) general damages for the acts of trespass committed by the Defendants on the said land without the leave or licence of the Plaintiff; and (c) Perpetual injunction restraining the Defendants by themselves, by their servants and agents or otherwise from committing further acts of trespass on the said land.” After having heard the evidence, the trial Judge, Allagoa C. J., granted the declaration and injunction sought and awarded N100,000 as general damages for trespass against the Respondents.
Being dissatisfied with the decision of the trial Judge, the Respondents appealed to the Court of Appeal which (Belgore and Olatawura JJ.C.A. while Aseme J.C.A. dissenting) allowed the appeal, set aside the decision of the High Court and ordered a verdict of dismissal of the plaintiff’s claim in respect of the order for injunction and the award of general damages. The Appellant has now appealed to this Court against the judgment of the Court of Appeal.
➥ ISSUE(S) & RESOLUTION(S)
I. What are the legal consequences of the failure to register Exhibits E and F as registrable instruments within the meaning of section 2 of the Land Instruments Registration Law, Cap. 72 Vol. 4 Laws of Eastern Nigeria 1963 applicable to Rivers State?
RULING: IN RESPONDENT’S FAVOUR.
A. THAT AN UNREGISTERED INSTRUMENT CREATES EQUITABLE INTEREST
“I accept the submission of Chief Onyiuke that Exhibits E and F are instruments within the meaning of section 2 of the Law and are registrable. I do not however agree with his contention of the legal effect and consequences of their non-registration having regard to the facts and circumstances of this case. It is trite law that where a purchaser of land or a lessee is in possession of the land by virtue of a registrable instrument which has not been registered and has paid the purchase money or the rent to the vendor or the lessor, then in either case the purchaser or the lessee has-acquired an equitable interest in the land which is as good as a legal estate and this equitable interest can only be defeated by a purchaser of the land for value without notice of the prior equity. A registrable instrument which has not been registered is admissible to prove such equitable interest and to prove payment of purchase of money or rent: Savage v. Sarrough (1937) 13N.L. R. 141. Ogunbambi v. Abowab (1951) 13 W.A.C.A. 22, Fakoya’ v. St. Paul’s Church, Shagamu (1966) 1 All N.L.R. 74, Oni v. Arimoro (1973) 3 S.C. 163, Bucknor-Maclean v. Inlaks (1980) 8-11 S.C. 1 and Obijuru v. Ozims S.C. 48/1984 delivered on 4th April 1985, unreported yet.”
B. THAT THE APPELLANT’S LEASE TAKES SUBJECT TO RESPONDENT’S SINCE THE APPELLANT HAD NOTICE
“It follows from the foregoing that the 1st Respondent’s lease under Exhibit E and F was as good as if the instruments had been registered. The renewed lease under Exhibit F for the term of 6 months expired on 17th November, 1975. The option for renewal under the agreement conferred on the 1st Respondent the right to renew the lease for another term of 6 months which entitled it to remain on the land as a tenant of Wegwu family up to 16th May, 1976. The fact that the Wegwu family was not willing to exercise the option was irrelevant as the family was compellable by specific performance to exercise it: Moukarzel v. Hannah 12 W.A.C.A. 125. Being on the land by virtue of the option for renewal when the Appellant acquired his lease, the Respondents were lawfully on the land. The evidence shows that the Appellant was aware of the tenancy of the Respondents and their presence on the land when he received his conveyance. So he had notice of the 1st Respondent’s equity. Consequently, his legal estate did not affect the Respondent’s equity. The Appellant took his lease subject to the right and equitable interest of the Respondents.”
“The evidence in this case is clear that the Appellant was aware of the presence of the 1st Respondent on the land and saw the heaps of laterites deposited thereon before he entered into the lease agreement with the landowners. He failed as he ought to make necessary enquiries. He was bound with notice of the interests of the 1st Respondent over the land.”
“Accordingly, the appeal fails and it is dismissed. The decision of the Court of Appeal is affirmed with N300 costs to the Respondents.”
➥ MISCELLANEOUS POINTS
➥ REFERENCED (STATUTE)
➥ REFERENCED (CASE)
⦿ LICENCEE VERSUS A TENANT; EXCLUSIVE POSSESSION GIVES TENANCY PRIMA FACIE
Errington v. Errington and Anor. (1952) 1 All E.R. 149. At page 154 line D. Denning, L.J. stated that:- “The difference between a tenancy and a licence is, therefore, that in a tenancy an interest passes in the land, whereas in a licence it does not. In distinguishing between them, a crucial test has sometimes been supposed to be whether the occupier has exclusive possession or not. If he was let into exclusive possession, he was said be a tenant, albeit only a tenant at will: See Doe D. Tomes v. Chamberlain (4), Lynes v. Snaith (2); whereas if he had not exclusive possession he was only a licensee; Peakin v. Peakin (5) This test has, however, often given rise to misgivings because it may not correspond to realities.” And at p. 155 Denning went further to state:- “The result of all these cases is that, although a person who is let into exclusive possession is, prima facie, to be considered to be a tenant, nevertheless he will not be held to be so if the circumstances negative any intention to create a tenancy. Words alone may not suffice. Parties cannot turn a tenancy into a licence merely by calling it one. But if the circumstances and the conduct of the parties show that all that was intended was that the occupier should be granted a personal privilege with no interest in the land, he will be held only to be a licensee.”
➥ REFERENCED (OTHERS)
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