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BOSTON AND ANOTHER v. KHEMLAND BROTHERS AND OTHERS


  • New
  • 1962-02-13
  • HIGH COURT
  • 1 GLR 68-74
  • Print

CHARLES, J.


Summary

Landlord and tenant?-Breach of covenants and conditions by sub-lessee?-Equitable jurisdiction to grant relief against forfeiture.

Headnotes

T. E. Kwofie, deceased, acquired a government lease of land which in clause 10 thereof stipulated that if the lessee failed to pay all existing and future rates, taxes, etc., "it shall be lawful for the government to add such amounts ... to the amount of rent payable?... and to enforce the payment by the lessee of such amount as if the same had been rent hereby reserved and then due and in arrear".T. E. Kwofie sub-let the said plot to one Madge Evans, deceased. This sub-lease contained covenants by the sub-lessee (a) to pay rents, (b) to pay all existing rates, taxes, etc., (c) not to assign without the previous written consent of the sub-lessor, (d) to insure the premises, and (e) to perform and observe all the lessor?'s covenants and conditions, etc., contained in the headlease. There was a proviso for re-entry if the sub-lessee failed to observe the above covenants.The plaintiffs, the successor and administrator of the estate of the deceased T. E. Kwofie, and the head of his family respectively, instituted this action claming that the sub-lease had been forfeited by reason of breaches of the covenants and conditions therein contained.

Judgement

ACTION for forfeiture of sub-lease for breach of covenants contained therein and for mesne profits. The facts are set out in the judgment of Charles, J.

The first plaintiff in his capacity as successor and administrator of the estate of the late T. E. Kwofie and the second plaintiff in his capacity as head of the family of the late T. E. Kwofie instituted an action against the defendants claiming:

"1. Possession of Plot No. 101, Prince of Wales Road, African Township Area, Takoradi, together with the building situate thereon and known as house No. 36/8 Prince of Wales Road, Takoradi, on the grounds that the sub-lease granted to Madge Boehm, the defendants' landlady, has been forfeited by reason of the breaches of the covenants and conditions contained in the sub-lease granted to the said Madge Boehm by the late T. E. Kwofie, the original lessee of the said premises.

"2. Mesne profits from the date of the writ until delivery of possession, G80 being the total rents payable monthly in respect of the premises.?" [p.70]

By order of the court dated the 8th May, 1961, the executors of the estate of Madge Evans alias Madge Boehm (deceased) were made codefendants.

The late T. E. Kwofie had acquired the term created by a lease dated the 5th May, 1934, under which the government granted a lease of the piece of land situate at plot 101, Prince of Wales Road, Takoradi. The most relevant term of the said lease which has been marked exhibit A is contained in clause 10 thereof which reads as follows:

"And also will bear pay and discharge all existing and future rates taxes charges assessments impositions whatsoever imposed on the said demised premises or upon any messuage and buildings which may be erected thereon during the said term or imposed upon or payable by the owner or occupier in respect thereof Provided that in the event of the government at any future date being found liable for the payment of all or any part of any such rates taxes charges assessments impositions and outgoings whatsoever as aforesaid then and in any such case it shall be lawful for the government to add such amounts so paid to the amount of rent payable next after such payment by the government and to enforce the payment by the lessee of such amount as if the same had been rent hereby reserved and then due and in arrear."

By an under-lease dated the 29th September, 1945, and made between T. E. Kwofie and Madge Evans deceased and marked exhibit B, the said T. E. Kwofie sub-let the said plot 101, Prince of Wales Road, Takoradi, for a term of eighteen years with a right to renew the lease for a further term of ten years. The most relevant covenants contained in this under-lease by the sub-lessee are as follows:

"(a) To pay the rent reserved herein on the days and in the manner above provided.

(b) To bear, pay and discharge all existing and future rates, taxes, duties, assessments, impositions and outgoings whatsoever charged or imposed upon the premises or any part thereof.

(c) Not to assign, underlet or part with the possession of the said premises or any part thereof without the previous written consent of the sub-lessor or the Governor or his representative in accordance with the covenants in the headlease; and

(d) To insure any building erected on the said premises with an Insurance Company to be approved of by the Governor or his representative in the sum of .... And not to do or permit to be done anything whereby any policy of insurance on the premises against any risk insurance against which is stipulated for in the landlord or sub-lessor's covenants or in the headlease may become voidable or be avoided or whereby the rate of premium on any such policy may be increased, and to repay to the landlord or sub-lessor forthwith all sums from time to time paid to him, and

(e) To perform and to observe all the lessor's covenants, conditions and agreements contained in the headlease (which has been produced to the lessee and who has been supplied with a copy) excepting the covenant for the payment of rent."

There is also a proviso for re-entry if the sub-lessee fails to perform and observe the covenants in the said under-lease. I should indicate at this stage that counsel for the plaintiffs attempted to tender in evidence a draft lease between T. E. Kwofie and Madge Evans to prove that Madge Evans had covenanted to render accounts of all rents received from the tenants occupying the building to be erected on the said plot, but I ruled that the draft agreement was inadmissible in evidence because the final sub-lease as executed by the parties and registered in the Deeds Registry contained no such clause. Moreover Mr. Awoonor Williams, solicitor for the parties to the sub-lease gave evidence on behalf of the plaintiff and said that the sub-lease, of which exhibit B is a copy, was the sub-lease agreed upon between the parties. I therefore hold that there is no such covenant in the lease. [p.71]

According to the statement of claim, the plaintiffs claim that Madge Evans, who is also called Madge Boehm, committed breaches of the following covenant:

(i) To pay to the government the annual ground rent of G1 15s. payable half yearly on the 21st day of April and the 21st day of October each year.

(ii) To pay all existing and future rates, taxes, duties, or impositions whatsoever charged or imposed upon the premises.

(iii) To render to the sub-lessor or his successor accounts of all rents received from the tenants occupying the house erected on the said land whenever called for.

(iv) To insure the building erected on the premises.

I have already held that there was no covenant by the sub-lessee to account for rents received from tenants so there is no necessity to deal with any alleged breach of such covenant. As regards the covenants to pay the annual ground rent of G1 15s. half yearly, I find on the evidence that the executors of Madge Evans (the co-defendants herein) did fail to pay the ground rent for the period ending October, 1959, but this occurred because according to the letter dated the 30th September, 1959, and written by Giles Hunt & Co. (exhibit J), Giles Hunt & Co. were returning a demand note addressed to T. E. Kwofie in respect of plot 101 (rear), Prince of Wales Road, Takoradi, as they were not acting for T. E. Kwofie. However the demand note, exhibit H, which was tendered in evidence by the plaintiff is in respect of plot 101 simply and although exhibit H is dated the 1st October, 1959, it is postmarked the 29th September, 1959. I am not impressed with the explanation given by the witness J. C. Quao having regard to his demeanour, and although I am not prepared to say definitely that exhibit H is a forgery, nevertheless I entertain grave doubts about its genuineness because I find it difficult to believe that Giles Hunt & Co. would have stated that the demand note was in respect of plot 101 (rear) if the demand note simply referred to plot 101. It is rather significant that the demand note dated the 1st October, 1957 (exhibit 1), which was addressed to Madge Evans, c/o Giles Hunt & Co. was paid by Giles Hunt & Co. Furthermore plot 101 (rear) was in the name of Madge Evans in the books of the Lands Department, so I can very well understand why Giles Hunt & Co. returned the demand note. I do not believe that Giles Hunt & Co. returned exhibit H and refused to pay the rent because they knew that plot 101 was in the name of T. E. Kwofie in the books of the Lands Department and they had previously received demand notes in respect of plot 101 in the name of T. E. Kwofie and they paid the rent. The facts surrounding the demand note exhibit H, bristle with suspicion but I nevertheless hold that the codefendants should have paid the rent when due and that failure to send a demand note does not relieve the co-defendants of the breach of covenant to pay the rent even though the rent was duly paid from 1945 to April, 1959.

As regards the rates, the co-defendants were under an obligation to pay them in advance. In a letter dated the 20th February, 1958 (exhibit 5) Madge Evans wrote to the Sekondi Municipal Council requesting them to send demand notices in respect of the rates to Giles Hunt & Company, but no demand notices for the payment of rates were sent to Giles Hunt & Company. Failure to send demand notices does not relieve the co-defendants of their obligation to pay the rates as they fall due. The rates were paid from 1945 up to the 31st March, 1959 by Madge Evans and the co-defendants, but the first plaintiff paid the rates for the period the 1st April, 1960 to the 31st March, 1961. [p.72]

The co-defendants paid the rates for the period the 1st April, 1961, the 31st March, 1961, but the first plaintiff in his anxiety and desire to establish a persistent breach of covenant by the co-defendants to pay rates paid the rates for the period the 1st April, 1962 to the 31st March, 1963, although the rates are not yet due for this period. I find it rather surprising that although counsel for the plaintiffs knew this, he nevertheless tendered in evidence the receipt in respect of payment for rates not yet due.

Mr. Franklin submitted that the courts in Ghana exercise a wider discretion in equity than the courts in England. See Agyako v. Zok,1 and Danquah v. Wuta-Ofei.2 He also contended that failure to pay rent and rates were technical breaches and in view of the circumstances of the case the court should grant relief against forfeiture. He further submitted that there was no evidence to prove that Madge Evans sublet the premises without the consent of T. E. Kwofie. He also submitted that the plaintiffs failed to prove that Madge Evans did not insure the premises and as the amount for which the property was to be insured is not stated herein there can be no breach. He further argued that if the plaintiffs could be compensated by payment in cash the court should grant relief, see Howard v. Fanshawe.3 He finally stated that the co-defendants tendered G201 to settle the matter but it was refused. At this stage Mr. Baidoo denied that any money was tendered but admitted that the clerk of Giles Hunt & Company, did suggest a sum which he could not remember to settle the matter but his clients refused to accept it. However Mr. Franklin informed the court that his clients were prepared to pay into court all the out-of-pocket expenses of the plaintiff. Mr. Franklin further contended that the first plaintiff was an agent of necessity when he paid the rent and rates and therefore the co-defendants have not committed breaches of the covenants in respect of rent and rates.

In reply Mr. Baidoo submitted that the court may grant relief for breach of a covenant to pay rent and order compensation to be paid to the plaintiffs. As regards a breach of covenant to pay rates and taxes the court never granted any relief prior to the Conveyancing Act of 18814 which does not apply in Ghana. The courts of equity would not grant relief against forfeiture unless fraud, accident, surprise or mistake was established, but mistake is not synonymous with the negligence of a suppliant. The tenants of the sub-lessee cannot be protected if the court refuses to grant relief against forfeiture.

As regards the payment of the ground rent both counsel agree that this court has power to grant relief against forfeiture and this is supported by the cases cited by them.

As regards the alleged breaches of covenants to insure and not to sub-let without the consent of the sub-lessor the onus is on the plaintiff to prove the forfeiture. See Jackson & Co. v. Northampton Street Tramways Co.5 The onus is on the plaintiffs to prove the non-insurance and they have failed to do so, see Chaplin v. Reid,6 and I therefore hold that there is no proof of the breach of covenant to insure. Moreover as no amount is stated in the covenant I also hold that there could be no [p.73] breach. As regards the covenant not to sub-let without consent I also hold that the plaintiffs have failed to prove a breach as the plaintiffs would have to prove that the sub-lessor did not give his consent and this would be almost impossible as he is dead and there is no written evidence in support of this. See Toleman v. Portbury.7

The cases decided before the Conveyancing Act of 1881 in which relief against forfeiture may be granted are not quite uniform. In Sanders v. Pope8 Lord Erskine granted relief against forfeiture of a public house incurred by not laying out a particular sum in repairs within a specified time and held that the court had jurisdiction to grant relief in all cases where full compensation could be made even though the breach complained of was wilful. However in Hill v. Barclay9 Lord Eldon held a contrary view and stated that relief for breach of a covenant other than non-payment of rent will only be granted where the suppliant can prove fraud, mistake, accident or surprise.

When the courts are called upon to construe forfeiture clauses, the court has to ascertain the meaning of the covenant without regard to the forfeiture and then decide upon the ascertained meaning whether the forfeiture has been incurred. See Bristol Corporation v. Westcott.10 However, subject to this principle the court construes a forfeiture clause literally or strictly and as it destroys or defeats the estate, the court construes it most strongly against the lessor or sub-lessor. See Doe v. Stevens.11 In construing the covenant to pay rates it is necessary to read the provision in the head-lease as well as in the under-lease. In the head-lease it is provided that if the lessee therein (that is the sub-lessor) fails to pay his rates it was to be regarded as rent. Under the sub-lease the sub-lessee agreed to perform and observe this covenant to be performed on behalf of the sub-lessor and according to clause 1 (K) of the sub-lease, the headlease was produced to the lessee and she was supplied with a copy. I hold that the covenant to pay rates in the sub-lease must be construes with the corresponding covenant in the head-lease and as failure to pay rates was to be considered as rent if paid by the lessor in the headlease, I hold that failure by the executors of the sub-lessee to pay the rates on behalf of the lessee (sub-lessor) must also be considered as rent if paid by the sub-lessor or those claiming through him. I also hold that the first plaintiff was not an agent of necessity when he paid the rent, rates and taxes which had fallen due.

Moreover in Barrow v. Isaacs Sons12 Kay, L.J. stated:

"Long ago courts of equity assumed jurisdiction to relieve against forfeiture and penalties where the only object was to secure payment of a definite sum of money, even though there was fraud, accident, surprise or mistake. On this principle it relieved against payment of the whole penalty on a money bond before the Statutes 4 and 5 Anne Cap. 16 sections 12 and 13, and 8 and 9. William 3, Cap. 11, which enabled the Courts of law to give the same relief. Also against forfeiture for non-payment of rent . . . "

This case was followed by the West African Court of Appeal in Mensah v. Grant13 when the court granted relief against forfeiture in respect of a breach of covenant to pay royalty. The court held that there was an [p.74] plaintiffs inherent jurisdiction in equity to grant relief against forfeiture. I have carefully considered the conduct of the co-defendant and the plaintiffs in this case and the circumstances surrounding the breach of convenants to pay rent and rates and by virtue of the inherent jurisdiction vested in me I hereby grant relief against forfeiture.

A declaration is granted against the plaintiffs that the sub-lease is valid and subsisting and it is hereby ordered that the co-defendants do pay to the first plaintiff the amounts paid by him for rent and taxes due with interest at rate of ten per centum per annum from the date of such payments. Both claims of the plaintiff are dismissed.

The co-defendants are also ordered to pay to the plaintiff costs fixed at one hundred and thirty guineas, inclusive of fee to counsel.

Decision

<P>Claims dismissed.</P>

Plaintiff / Appellant

S. Baidoo

Defendant / Respondent

H. V. A. Franklin with him E. B. Gaisie for Messrs. Giles Hunt & Co.

Referals

(1) Agyako v. Zok (1944) 10 W.A.C.A. 277

(2) Danquah v. Wuta-Ofei (1956) 2 W.A.L.R. 185, W.A.C.A.

(3) Howard v. Fanshawe [1895] 2 Ch. 581

(4) Jackson & Co. v. Northampton Street Tramways Co. (1886) 55 L.T. 91

(5) Chaplin v. Reid (1858) 1 F. &. F. 315

(6) Toleman v. Portbury (1870) L.R. 5 Q.B. 288

(7) Sanders v. Pope (1806) 12 Ves.  Jun. 282; 33 E.R. 108

(8) Hill v. Barclay (1810) 16 Ves.  Jun. 402; 33 E.R. 1037

(9) Bristol Corporation v. Westcott (1879) 12 Ch.D. 461; 41 L.T. 117, C.A.

(10) Doe v. Stevens (1832) 3 B. & Ad. 299; 1 L.J.K.B. 101

(11) Barrow v. Isaacs & Son [1891] 1 Q.B. 417, C.A.

(12) Mensah v. Grant (1955) 14 W.A.C.A. 726

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