KARAM v. ASCHKAR [1963] 1 GLR 138

DIVISION: IN THE SUPREME COURT

DATE: 20TH FEBRUARY, 1963

BEFORE: SARKODEE-ADOO, CRABBE AND BLAY JJ.S.C.

CASES REFERRED TO

(1) Arnsby v. Woodward (1827) 6 B. & C. 519; 108 E.R. 542

(2) Parker v. Jones [1910] 2 K.B. 32; 102 L.T. 685; 26 T.L.R. 453; 79 L.J.K.B. 921

(3) Doe d. Beadon v. Pyke (1816) 5 M. & S. 146; 105 E.R. 1005

(4) David v. Sabin [1893] 1 Ch. 523; 62 L.J.Ch. 347; 68 L.T. 237; 9 T.L.R. 240, C.A.

(5) Barton v. Fincham [1921] 2 K.B. 291; 90 L.J.K.B. 451; 124 L.T. 495; 37 T.L.R. 386, C.A.

(6) Commissioner of Works v. Hull [1922] 1 K.B. 205

(7) Solomon v. Orwell [1954] 1 W.L.R. 625; [1954] 1 All E.R. 874; 104 L.J. 486, C.A.

(8) Webber v. Smith (1689) 2 Vern. 103; 23 E.R. 676

(9) Whitham v. Bullock [1939] 2 K.B. 81; [1939] 2 All E.R. 310; 108 L.J.K B. 328; 150 T.L.R. 354, C.A.

(10) Chatham Empire Theatre [1955] Ltd. v. Ultrans Ltd. (1961) 1 W.L.R. 817.

(11) Moore v. Ullcoats Mining Company Co., Ltd. [1908] 1 Ch; 575; 77 L.J.Ch. 282; 97 L.T. 845; 24 T.L.R. 54

(12) Jones v. Carter (1846) 15 M. & W. 718; 153 E.R. 1040

(13) Serjeant v. Nash, Field & Co. [1903] 2 K.B. 304; 72 L.J.K.B. 630; 89 L.T. 112; 19 T.L.R. 510, C.A.

(14) Grimwood v. Moss (1872) L.R. 7 C.P. 360; 41 L.J.C.P. 239; 27 L.T. 268; 36 J.P. 663

(15) Scott v. Musial [1959] 2 Q.B. 429; [1959] 3 W.L.R. 437; [1959] 3 All E.R. 193, C.A.

NATURE OF PROCEEDINGS

CROSS-APPEAL by the plaintiff-respondent asking for variation of a judgment of Adumua-Bossman J. delivered on the 24th May, 1961, in the High Court, Accra, reported in [1961] G.L.R. 258, where the facts are fully set out.

COUNSEL

No appearance by or for the appellant.

Dr. J.W. de Graft-Johnson for the respondent-cross-appellant.

JUDGMENT OF CRABBE J.S.C.

This is an appeal against the decision of Adumua-Bossman J. (as he then was) given on the 24th May, 1961, when he decided that the plaintiff had succeeded in proving against the defendant acts which constituted a breach of his convenant for quiet enjoyment, and [p.141] of [1963] 1 GLR 138 accordingly awarded damages in favour of the plaintiff in terms as follows1:

“He is entitled to recover for the loss of his right of occupation from month to month until determination or eviction by order of this court. This, I assess at £180.

As regards the sum of 100 guineas paid to resist the action for recovery of possession, I allow 60 guineas as amply reasonable for such a case in the District Magistrate’s court. That brings up the amount awarded for special damages to £G243. There is lastly the claim for general damages, including loss of business, supported by the plaintiff’s profit and loss account sheets for the years 1957-58, 1958-59 and 1959-60, exhibits Hl, H2 and H3. I allow £G1,000 for general damages, making a total of £Gl,243 damages. I also award costs of 120 guineas, inclusive of counsel’s fee”.

The defendant did not however appear to prosecute his appeal and it was therefore dismissed. The question of costs was deferred until the delivery of judgment in the cross-appeal by the plaintiff. For the plaintiff a notice was filed under rule 16 of the Supreme Court Rules, 1962,2 in which it was contended that the judgment of the trial court should be varied as follows: “That the general damages of £G1,243 awarded by the learned trial judge be varied to £G7,000.”

The grounds on which the plaintiff relied were:

“(1) The learned judge erred in law in holding that ‘It is clear therefore that surrender can be followed by proper or regular steps to determine, and that therefore the defendant in this instant case was capable of enforcing his right of forfeiture…’

(2) There is no evidence to support the view of the learned trial judge that the defendant took steps to determine the subsidiary assignment.

(3) The assessment of general damages by the learned trial judge was erroneous and inequitable having regard to the evidence given by the plaintiff in support thereof.”

The facts of this case are as follows: By an indenture of lease dated the 7th May, 1949, made between the defendant as lessor of the one part and one James Oppong of Accra as lessee on the other part one large store situate at the junction of Boundary Road and Derby Avenue, Accra, and numbered No. D.988/3, was demised by the defendant to the said James Oppong for a term of twelve years certain from the 1st November, 1949, at a yearly rental of £G1,000 payable by equal quarterly instalments in advance of £G250 each quarter commencing from the 1st November, 1949. This lease contained the usual covenants including that for quiet enjoyment of the premises thereby demised.

Subsequently, by an indenture of assignment made on the 28th December, 1951, James Oppong assigned part of the premises to one Osei Kojo

[p.142] of [1963] 1 GLR 138 for the remainder of the term created by the original lease dated the 7th May, 1949—that is ten years certain commencing from the 1st November, 1951. This assignment was clearly in breach of the covenant which reads:

“(c) The lessee may assign sub-let or part with the possession of the demised premises but notice of such assignment or sub-letting shall be given by the lessee to the lessor and the lessee will remain liable for payment of the rent.”

The evidence that the defendant (lessor) was not given notice of this assignment was undisputed. The defendant, however, did not exercise his right of re-entry immediately he became aware of this assignment.

Again, by an indenture of assignment made on the 27th May, 1952, Osei Kojo also assigned his entire interest in the premises to one Amin Homaidan for the remainder of the term created by the indenture of assignment dated the 28th December, 1951. Further, by an indenture of assignment made on the 30th October, 1952, Amin Homaidan also assigned his entire interest in the premises to the plaintiff for the residue of the term of ten years created by the indenture of assignment dated the 27th May, 1951. After November 1951, James Oppong ceased paying the agreed rent in breach of the covenant for payment of rent contained in the original lease of the 7th May, 1949, and thereby incurred another forfeiture under the express proviso for re-entry. But the defendant again took no steps to exercise his right of re-entry immediately or soon thereafter, and on the 11th April, 1953, James Oppong executed in his favour a deed of surrender to take effect from the 30th June, 1952.

The learned trial judge found as a fact that James Oppong was in breach of his covenant for payment of rent, but he observed3:

“Nevertheless, it is not enough that the original lessee was in arrears with his rent and therefore in breach and liable to have his lease forfeited. The original lessor or landlord was by law required to take some definite step to determine, such as actual re-entry or some other step indicating his intention of terminating the original tenancy.”

He held therefore that since the original lease had not been legally forfeited on the 30th October, 1952, the indenture of assignment of that date, exhibit A, operated to make a valid transfer of the small store to the plaintiff for the residue of the term of the original lease. In support of this view the learned trial judge relied on the case of Arnsby v. Woodward4 where Littledale J. said “The lease was not void but voidable, and the landlord was bound to re-enter to take advantage of the forfeiture.”

After his usual careful and thorough examination of relevant cases—the result of an extensive research which has greatly lightened my burden and for which I really feel grateful—the learned trial judge came to the clear conclusion that surrender can be followed by proper or regular steps to determine. Prominent among the cases examined, and the one relied upon

[p.143] of [1963] 1 GLR 138 by counsel for the plaintiff, was Parker v. Jones5 which decided that a voluntary surrender did not per se operate to destroy or extinguish a prior assignment or a lease. On this case the learned trial judge made the following observations6:

“It is to be observed, however, that although Parker v. Jones decided that a voluntary surrender did not per se have the operation of destroying or extinguishing a prior assignment or underlease, nevertheless it acknowledged the legal position that the surrender might be followed by other steps such as notice to quit or re-entry which would have the effect of effectually extinguishing the residue of the period or term of the lease, from the point of view of an assignee or under-lessee.”

Then after a review of conflicting judicial views concerning the scope of the judgment in the Parker v. Jones (supra) the learned trial judge said7:

“It is clear, therefore, that surrender can be followed by proper or regular steps to determine, and that the defendant in this instant case was capable of enforcing his right of forfeiture of the original lease and the dependent subsidiary assignment of the small store, after the deed of surrender dated the 11th April, 1953, exhibit 2X.”

I am in entire agreement with these observations by the learned trial judge. That surrender does not destroy a subsidiary interest is supported by numerous authorities of high standing which have established the principle that a surrender by a lessee does not extinguish a sub-lease or prejudice the rights of a sub-tenant under the lease. In Doe d. Beadon v. Pyke8 Lord Ellenborough C.J. referred in his judgment to this principle as was stated by Lord Coke and said:

“Lord Coke, after noticing, that as between the parties to a surrender the estate is absolutely drowned, says, ‘But having regard to strangers who were not parties or privies thereunto, [i.e., to the surrender) (lest by a voluntary surrender they may receive prejudice touching any right or interest they had before the surrender,) the estate surrendered hath, in consideration of law, a continuance.”

In David v. Sabin9 the sub-lease was a mortgage which, as in this instant case, was concealed from the landlord at the time of the surrender. Bowen L.J. said:

“It is a mere conveyancing illusion to suppose that the defendant (the landlord) ever by the so-called surrender … got back the term which he had granted so as to extinguish it. He only recovered it mangled by the sub-leases and shorn of all right to possession.”

I am fully satisfied after a careful examination of the authorities that the mere surrender of the lease in this case by James Oppong could not operate to dispossess the under-lessee of his subsidiary interest. Consequently, I hold that the conclusion of the learned trial judge on this issue was sound in law. [p.144] of [1963] 1 GLR 138

The next question to determine is whether the defendant took steps to forfeit the subsidiary assignment. The landlord who is entitled to re-enter can enforce his right either, (1) by making peaceable entry on the land, or (2) by commencing an action for possession.

It is not disputed, and there was abundant evidence that prior to June 1952, the date of the surrender, James Oppong had committed a breach of the covenant not to assign without notice and also for payment of rent and had thereby become liable to have his lease forfeited. But notwithstanding the proviso for re-entry contained in the lease the defendant was not entitled to enter the premises vi et armis and take possession against the will of the sub-lessee, the plaintiff, herein. As was observed by Scrutton L.J. in Barton v. Fincham10:

“[The tenant] can leave of his own free will, surrendering his tenancy . . . But if he is unwilling to give it up, possession can only be obtained by order of the court . . . “ The legal position in the present case appears to me to be more clearly and forcefully stated by Shearman J. in Commissioner of Works v. Hull.11 He said:

“A person who surrenders is like a person who assigns; he must assign subject to any equities or tenancies created by himself. The present case is launched entirely on forfeiture . . . It is well decided since Serjeant v. Nash, Field & Co. [1903] 2 K.B. 304, that the best and most irrevocable indication of an intention to claim a forfeiture is the issue of a writ. I think it follows from the judgment in that case that the issue of a writ against the person claiming to be the lawful sub-tenant is also a sufficient indication.” It is therefore necessary to examine the whole evidence to see whether there was any lawful act by the lessor which indicated an intention to claim a forfeiture. The evidence by the defendant was comparatively short and at no stage in his testimony did he say that he took any steps towards the “proper determination of the subsidiary interest.” The only act which the defendant did which had the semblance of anything amounting to forfeiture was the court order for the demolition of the premises occupied by the plaintiff. But this the learned judge rightly in my view described as “a mere ruse and a complete sham.” Yet the learned judge made the following findings12:

“This, I think, he did when the original lessee, James Oppong, having himself voluntarily vacated the portion of the demised premises which he retained and thereby taken the whole demised premises out of the protection of the Rent Control Ordinance, the defendant re-entered.”

It would appear therefore that the only reason which led the learned trial judge to conclude that the defendant re-entered, was the moving in after the voluntary vacation of portion of the demised premises by the head-lessor after the surrender. With respect to the learned trial judge I cannot [p.145] of [1963] 1 GLR 138 agree with him. “A person who surrenders is like a person who assigns; he must assign subject to any equities or tenancies created by himself”: per Shearman J. in Commissioner of Works v. Hull.13 The defendant could not re-enter whilst there was a tenant sitting on the premises. Mere vacation of the premises would not amount to an exercise of the right of re-entry. In my judgment the case of Solomon v. Orwell14 on which the trial judge relied is inapplicable to this present one because it is a case in which a statutory tenant holding over under the Increase of Rent and Mortgage Interest (Restrictions) Act, 1920,15 sub-let to another statutory tenant, and it was held that the statutory tenant had no legal estate in the premises to surrender and therefore the sub-tenancy was automatically ended when the tenant vacated the portion of the premises which he occupied. In the present case, however, James Oppong was not a statutory tenant.

By the 30th October, 1952, when the assignment was made to the plaintiff, James Oppong was in arrears of rent to the extent of £G710 10s., and, as I have already pointed out earlier in this judgment, his surrender would be subject to any equities or tenancies created by him. In my view therefore the plaintiff would be liable for the whole sum of £G710 10s. the arrears due on the head-lease— notwithstanding that he occupied only a portion of the premises. He would then be entitled to recoupment from the said James Oppong. Thus in Webber v. Smith,16 a lessee from Lord Salisbury granted a hundred under-leases. The head-lease was avoided for non-payment of rent upon which six of the under-lessees applied to the Court of Chancery for relief. The Commissioners held that they could not:

“make any decree to apportion the head-Landlord’s rents, nor relieve the plaintiffs, but on their payment of the whole rent in arrear, and repairing all the premises…. But having done so, they might compel the rest of the under-tenants to contribute.”

It follows therefore in my opinion that since a landlord’s rent is due from each and every portion of the premises a right of re-entry can be exercised over the entire premises when there is default of payment of rent by the lessee in respect of a portion of the premises held by him.

The headnote in Whitham v. Bullock17 reads as follows:

“The owner of a plot of land leased it for nine hundred and ninety-nine years at a yearly rent of £G5 14s. 111⁄2d., the lease containing the usual covenants to pay the rent reserved with a proviso for re-entry on non-payment. The lessee subsequently assigned one portion, plot H, at an apportioned rent of £G3 14s. 111⁄2 d. This assignment, by reference to the Law of Property Act, 1925, had implied in it a covenant by the assignee to pay the apportioned rent. This part of the plot passed by assignment to the defendant. The other portion of the plot, on which the apportioned rent was £G2., passed to the plaintiffs. Plot H having been cleared under the Housing Acts, the defendant refused to pay the apportioned share of the rent on that plot. The freeholder

[p.146] of [1963] 1 GLR 138 thereupon threatened to distrain upon the plaintiffs’ house for the whole rent, and the plaintiffs paid not only their own apportioned share of the total rent but the defendant’s share as well. In an action by the plaintiffs to be reimbursed the defendants share of the rent so paid:— Held by the Court of Appeal, that inasmuch as the plaintiffs had paid the whole of the sum claimed by the landlord under the threat of the process of distress, though they were not liable to be directly sued for that amount, they were entitled to sue the defendant for reimbursement by her of the defendant’s proportion of the rent so paid by the plaintiffs.”

I have referred to the cases of Webber v. Smith (supra) and Whitham v. Bullock (supra) to show that a landlord can only forfeit the lease by entering the land as a whole peaceably; he cannot do this whilst any portion of the land is occupied by a tenant unless he can enforce his right of re-entry against that particular tenant. An exercise of the right in this way will operate as a forfeiture of the whole lease. Where an action is brought in these circumstances to determine the sub-tenant can claim relief from forfeiture. See Chatham Empire Theatre (1955) Ltd. v. Ultrans Ltd.18 where it was stated that: “But where, however, great hardship could be caused to the head-lessor the Court would not grant relief to one or two of many sub-tenants if that would make it impossible for the head-lessor to deal with the premises as a whole.”

On the 11th August, 1955, the defendant gave the plaintiff a notice to quit in the following terms: “Dear Sir,

NOTICE TO EVACUATE PREMISES

Please take notice to evacuate the store rented by yourselves on house No. D. 998/3, off Boundary Road and Derby Avenue, at Accra, not later than THREE (3) Months from the date of this letter.

I would inform you that the reason for this notice is that I wish to pull down the existing building, with a view to erecting a new building.

Yours faithfully,

(Sgd.) E. Nasser Ashkar.”

The plaintiff ignored this notice, and on the 6th December, 1955, the defendant served on him a fresh notice in which he gave the plaintiff six months from the date thereof to vacate the premises. The defendant has not appeared to argue that these were valid notices under the lease; but having examined the relevant indentures of lease in this case I have no hesitation in holding that each was an invalid notice. It would appear that the defendant was under a misapprehension that the surrender ipso facto extinguished the subsidiary interest created in favour of the plaintiff.

[p.147] of [1963] 1 GLR 138

Thus in paragraph 16 of the statement of defence it is pleaded as follows:

“With regard to paragraph 4 of the statement of claim the defendant herein gave notice to the plaintiff herein as statutory tenant to quit the premises in accordance with section 11 (1) (e) of the Rent Control Ordinance but the plaintiff herein did not quit the premises until ordered to do so by the court in Suit Number 1322/59 on the 25th day of November, 1959.”

Surely, the plaintiff would not become a statutory tenant until his underlease was forfeited in the proper manner.

I differ, with respect, from the observation of the learned trial judge that a notice to quit “would have the effect of effectually extinguishing the residue of the period or term of the lease, from the point of view of an assignee or under-lessee.”19 Even if I were to hold that the two notices were valid I would still be of the opinion that such notices would not forfeit the under-lease, since in my view a notice to quit is not tantamount to re-entry. I feel fortified in this view by the observations of Warrington J. in Moore v. Ullcoats Mining Co., Ltd.20 where he said:

“[Then the plaintiffs contend] that if the writ was not an unequivocal demand there was a previous expression of their election contained in the two notices of April 29 and May 3, to which I have already referred. I am of opinion upon the authorities—and I refer particularly to Jones v. Carter (1845) 8 Q.B. 134 and to a dictum of Bayley, J.’s in Fenn v. Smart (1810) 12 East, 448—that where the condition in the lease is that the landlord may re-enter, he must actually re-enter or he must do that which is in law equivalent to re-entry, namely, commence an action for the purpose of obtaining possession. Parke, B. in Jones v. Carter puts that quite plainly.”

It would appear, however, that on the 6th October, 1956, the defendant caused a writ of summons to be issued from the District Magistrate’s Court, Accra, against the plaintiff. This writ which was served on the plaintiff in this suit reads as follows:

“The plaintiffs claim is under section 11 (1) (e) of the Rent Control Ordinance for possession of the store rented by the defendant from the plaintiff in house No. D. 998/3, corner of Boundary Road and Derby Avenue, Accra.”

There were no particulars attached to this writ which was subsequently withdrawn in court. According to the plaintiff the defendant took this course after he had been shown a document relating to the plaintiff’s tenancy.

It seems to me that the mere service upon the plaintiff of the writ which contained a demand for possession would operate to determine his sub-lease: see Jones v. Carter21 and also Moore v. Ullcoats Mining Co., Ltd.22 In my judgment the fact that the action was withdrawn and never dealt with on the merits is immaterial to the question whether the defendant [p.148] of [1963] 1 GLR 138 had exercised his undoubted right of re-entry. Thus in Serjeant v. Nash, Field & Co.23 Collins M.R. said: “That being so, it is clear that the writ in the action to recover possession was a conclusive election to treat the act of the lessee in sub-demising the premises without consent of the lessor as creating a forfeiture. It is true that the rights of the parties were not determined by the issue of the writ, and could not be finally determined until the result of the action was known; but that consideration does not affect the fact of the election of the lessor to treat the lease as at an end, subject to proof that there had been a breach of covenant which entitled her to do so.”

It is obvious that at the time when the action was brought in 1956 the defendant had two grounds on which he could have exercised his right of entry, namely, breach of the covenant not to assign without notice to the lessor, and breach of the covenant for payment of rent. The defendant, however, relied on an entirely different ground, which in my opinion was erroneous. Nevertheless, since the defendant had not waived his right of re-entry which arose before 1956 he could justify his re-entry on any ground that existed in fact. In Grimwood v. Moss24 Willes J. made the following observations:

“Such right of re-entry, as in the cases to which the doctrine of remitter applies, is referred back to the earliest period at which a good title could be made, viz. to the first breach in respect of which the right to re-enter arose, and which has not been waived. This doctrine is laid down as the law in the case of Jones v. Carter 15 M. & W. 718 by Lord Wensleydale, without any reference to the existence of particulars of demand, in the clearest and most satisfactory manner. I am not prepared to be the first to shake or fritter away the authority of that case. I entirely agree that the true principle upon which that decision was founded was, that the bringing of the action of ejectment is equivalent to the ancient entry. It is an act unequivocal in the sense that it asserts the right of possession, upon every ground that may turn out to be available to the party claiming to re-enter. In the case of Dr. Grenville v. The College of Physicians 12 Mod. 386 Lord Holt laid it down that a person doing a lawful act was not bound by the ground he alleged for doing it, but might justify it on any ground that existed in fact. The act of entry is one of those acts in pais mentioned in the judgment in the case of Lyon v. Reed 13 M. & W. at p. 309 which bind parties by way of estoppel, as being acts of notoriety not less formal and solemn than the execution of a deed.

It is quite clear if the landlord, instead of bringing ejectment, had entered, he could have justified in an action of trespass by reference to any act of forfeiture which he could prove.”

In my judgment the issue of the writ of summons in 1956 was a positive step showing a clear and unequivocal intention to determine the sub-tenancy of the plaintiff. Consequently I think that the learned trial judge was right in holding that the plaintiff was a statutory tenant [p.149] of [1963] 1 GLR 138 within the provision of section 16 (2) (a) of the Rent Control Ordinance, 1952,25 though in my opinion he gave wrong reason for his conclusion.

It is provided by section 16 (2) that:

“(2) A statutory tenant shall, so long as he retains possession, hold the premises of the landlord upon the following terms and conditions, namely:

(a) he shall hold as a tenant from month to month, and, subject thereto, shall observe and be entitled to the benefit of all the terms and conditions of his original tenancy, as the case may be, so far as the same are consistent with the provisions of this Ordinance:

Provided that, in the case of a tenant who has become a statutory tenant by reason of the provisions of paragraph (c) of subsection (1) of this section he shall in addition hold the premises subject to any restrictive covenants contained in the terms and conditions of the lease between the landlord and the principal tenant.”

In this appeal it has been contended by counsel for the plaintiff that the assessment of the general damages by the learned trial judge was erroneous and therefore this court should itself re-assess the damages. The test which this court must apply in deciding whether to interfere with the award of damages by a trial judge appears to me to be that stated lucidly by Morris L.J. in Scott v. Musial26: “Where there is an appeal from the decision of a judge sitting alone, the appeal is by way of re-hearing. The re-hearing applies to the issue of damages as well as to other issues. But it is recognised that the fixation of damages is so largely a matter of opinion or of impression that differences of calculation or assessment are to be expected. There is, to some extent, an exercise of judicial discretion. It is for this reason that, if three judges of the Court of Appeal consider that the amount of general damages that they would have awarded would have been a figure different from that decided by the trial judge, they will not, for that reason alone, give preference to their own figure; they will only do so if satisfied that the judge has acted on a wrong principle of law or has misapprehended the facts, or has, for those or other reasons, made a wholly erroneous estimate of the damage suffered; (see the speech of Lord Wright in Davies v. Powell Duffryn Associated Collieries Ltd. [No. 2]).”

It has been contended by learned counsel for the plaintiff that on a proper assessment the special damages should be £G680 instead of £G243 and the general damages at least £G3,000. Counsel then referred to the trading and profit and loss accounts from March 1957 to March 1960 (exhibit H1, H2 and H3) and submitted that these accounts clearly show that the demolition and ejectment had a serious effect on the profits of the plaintiff. He submitted further that the damages awarded were very low because the trial judge’s computation was based on a year as a statutory tenant instead of a term of three years, the unexpired term as an assignee.

[p.150] of [1963] 1 GLR 138

With these submissions I have found myself in entire disagreement. I am not satisfied that the learned trial judge’s estimate of the damages was erroneous. In my view he acted upon a correct principle of law and there is nothing to show that he took a wrong view of the facts.

I would therefore dismiss the cross-appeal.

JUDGMENT OF SARKODEE-ADOO J.S.C.

I agree

JUDGMENT OF BLAY J.S.C.

I also agree.

DECISION

Cross-appeal dismissed.

J. D.