TONIMAS NIGERIA LIMITED V. BERNARD CHIGBU (2020)

Background

This appeal concerned the relationship between a landlord and tenant under a sublease and, in particular, the manner in which rent could validly be paid where the landlord deliberately made himself unavailable to receive it. Bernard Chigbu, the respondent, granted Tonimas Nigeria Limited, the appellant, a sublease over land at No. 6 Ebino Mbano Street, Imo State. The appellant developed the property by constructing a petrol filling station and the respondent was appointed as a dealer in the business. The sublease agreement, tendered as Exhibit A, required the appellant to pay annual rent of N25.00 in January of each year, commencing from 23 April 1985.

After some years of operating the filling station, the appellant discovered an alleged shortfall of N27,831 in the business accounts and demanded that the respondent refund the amount. The respondent declined. He thereafter relied on a forfeiture clause in the sublease, which permitted re-entry where rent remained unpaid for three consecutive years without reasonable cause or excuse. The respondent commenced proceedings seeking forfeiture and re-entry. The appellant counterclaimed for equitable relief against forfeiture and maintained that it was willing to pay the rent, but that the respondent had repeatedly refused to accept payment.

The trial court dismissed the respondent’s forfeiture claim and granted the appellant relief against forfeiture. It nevertheless directed the appellant to pay arrears of rent. The appellant complained that the court had failed to address the respondent’s persistent refusal to receive rent. On appeal, the High Court and the Court of Appeal declined to authorise payment through alternative means, reasoning that the appellant had to seek out the landlord and pay him in accordance with the parties’ agreement. The appellant then appealed to the Supreme Court.

Issues

1. Whether the lower court was correct to treat the appellant’s request to pay rent by certified cheque, through the court registry, by registered post or other alternative means as an application for rectification of the sublease.
2. Whether, in view of the respondent’s deliberate refusal to receive rent, the appellant was entitled to an order permitting payment through a reasonable alternative method.
3. Whether the respondent could rely on the strict terms of the forfeiture clause after frustrating the appellant’s attempts to perform its obligation to pay rent.
4. Whether the respondent’s preliminary objection challenging the competence of the grounds of appeal was sustainable.

Ratio Decidendi

The Supreme Court allowed the appeal. The Court explained that rectification is the judicial alteration of a written instrument so that it conforms to the parties’ true intention. It is an equitable remedy used to correct a mistake in the recording of a contract, such as an incorrectly stated rent or an inaccurate description of land. The appellant was not asking the Court to rewrite Exhibit A or alter the agreed obligation to pay rent. It accepted that obligation and merely sought a practical and equitable means of discharging it because the respondent had made personal payment impossible.

The Court reaffirmed that equity follows the law, but also assists the law by mitigating the harshness or rigidity of strict legal rules. Equity acts in personam and will not permit a person to benefit from his own wrong. A landlord who deliberately evades payment cannot subsequently rely on the resulting arrears as a foundation for forfeiture. The equitable jurisdiction of the court is concerned with good conscience, fairness and justice, and empowers the court to grant relief where the justice of the case requires it.

The Court also stressed that the maxim that a person coming to equity must come with clean hands applies to every party, not merely to a claimant seeking equitable relief. The respondent’s conduct, as established by the evidence, was inconsistent with the conscience and fairness which equity demands. The principles of equity are available to all litigants where necessary to prevent injustice.

Court Findings

The Supreme Court accepted the lower court’s factual finding that the sublease did not require the appellant to travel to the respondent’s residence or palace and make payment face-to-face. The respondent’s insistence on that method was not a term of Exhibit A and was therefore unenforceable. The appellant had made repeated efforts to pay, including personal visits, tendering payment at the High Court premises, sending a cheque to the respondent’s counsel and attempting to pay into the court registry. Evidence showed that the respondent sometimes hid in his bedroom or sent messages through members of his household that he was unavailable. On another occasion, even when encountered at the court premises, he refused to accept the rent and insisted that payment must be made at his residence.

The Court regarded this conduct as a deliberate attempt to allow three years of alleged arrears to accumulate, thereby creating a basis for another application for forfeiture and re-entry. Such conduct was particularly objectionable because the respondent had previously failed in an attempt to obtain forfeiture and had earlier re-entered the property unlawfully. The Court held that the respondent should not be allowed to use his own obstruction to defeat the appellant’s contractual performance or prejudice the appellant’s substantial investment in the filling station.

The preliminary objection was overruled. The grounds of appeal raised questions of law concerning the lower court’s treatment of the appellant’s case as one for rectification. They were not incompetent grounds involving mixed law and facts.

Conclusion

The appeal was allowed. The Supreme Court ordered that the appellant pay the agreed rent, including rent that became due during the litigation, by certified cheque drawn in the respondent’s name and sent to the respondent’s known address as endorsed on the deed of sublease. Each party was ordered to bear its own costs.

Significance

The decision is important for the law of landlord and tenant and for the broader application of equitable principles in Nigeria. It confirms that a court may fashion a practical order to facilitate contractual performance without rectifying or rewriting the contract. A tenant who is ready and willing to pay rent should not be exposed to forfeiture merely because a landlord refuses to accept payment through an effective and reasonable method. The case also illustrates the constitutional and inherent jurisdiction of courts to prevent abuse of legal rights and to ensure that contractual provisions are not manipulated to produce an unconscionable result. While equity does not make a new contract for the parties, it may intervene to ensure that the existing contract is performed fairly and that litigation is brought to a just end.