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Patton & Storck Ltd v Central Rentals Ltd [1995] FJHC 18; Hbc0156j.94s (19 January 1995)

IN THE HIGH COURT OF FIJI
At Suva
Civil Jurisdiction

CIVIL ACTION NO. 0156 OF 1994

Between:

PATTON & STORCK LIMITED
Plaintiff

- and -

1. CENTRAL RENTALS LIMITED
2. REGISTRAR OF TITLES
3. ATTORNEY GENERAL OF FIJI
Defendants

Mr. H. Lateef for Plaintiff
Mr. D. Sharma for 1st Defendant
Mr. V. Nathan for 2nd & 3rd Defendants

JUDGMENT

This case concerns the cancellation of a registered lease by the Registrar of Titles exercising powers vested in him under the Land Transfer Act (Cap. 131). The application purports to be made pursuant to Section 168 of the Land Transfer Act which in terms empowers the court "... in any proceedings respecting any land subject to the provisions of (the Land Transfer Act) ... by decree or order (to) direct the Registrar" to do various things enumerated in the 'Section'.

I say 'purports' because I am firmly of the view that Section 168 does not provide an aggrieved party with a 'cause of action' rather it provides the court with powers "in any proceedings ..." to grant in its discretion such ancillary relief "... as may be necessary to give effect to the judgment or order of the court ..."

In other words the 'Section' does not provide any direct access to the Court for the exercise of its powers thereunder, rather, the powers conferred on the court under the 'Section', to direct the Registrar of Titles arises only when there has been instituted 'independent' proceedings respecting 'land transfer land' (for want of a better description) in which the rights of the applicant has already been or will be determined.

Be that as it may no issue has been raised in that regard and the primary relief sought in the plaintiff's originating summons is:

"A declaration that the 2nd defendant (i.e. The Registrar of Titles) improperly and unlawfully cancelled Lease No. 20187."

It is necessary to refer briefly to the chronological background to the relevant lease and its terms and conditions. In this regard it is common ground that on the 29th March 1939 the subject Lease No. 20187 was registered over the relevant block of land. The original parties to the lease were Shahbaz Khan (the lessor) and Terrence Patton and Edward Storck trading as "Patton & Storck" (the lessees) and the term of the lease was "75 years computed from the 1st day of March 1939 at a yearly rental of 120 payable monthly in advance ..."

I interpose here to observe that although according to the above payment clause rental equal to one twelfth of the total was due and payable in advance on the first day of each and every month, the secretary of the plaintiff company deposed without contest: "... that since I can recall the lessee used to pay six months rent in advance in every January and July of each year."

This long-established 'variation' of the payment clause is significant in that there is clear authority for the proposition that a lease under seal can be varied by an agreement not under seal and the 'proviso for re-entry' only becomes applicable to a breach of the covenant as so varied: Mitas v. Hyams (1957) 2 T.L.R. 1215 and Plymouth Corporation v. Harvey (1971) 1 W.L.R. 549.

On the 24th January 1980 the property was transferred to the defendant company Central Rentals Limited 'subject to Lease No. 20187'. It is not entirely clear from the affidavits how? when? or by whom? The plaintiff company was incorporated and although a preliminary argument was raised in that regard by learned counsel for the defendant company it was over-ruled after I heard a short reply from learned counsel for the plaintiff company.

Suffice it to say that the standing of the plaintiff company as 'Lessee' had never been an issue between the parties in the action (who incidentally are both "successors" to the original parties to the lease) and, having heard counsels and considered the various affidavits, annexures and correspondence and the nature of the particular covenants allegedly breached, I was firmly of the view that the argument was not only too late but also unmeritorious.

The lease contained the usual covenants but for present purposes reference need only be made to the following namely, the 'covenant against alienation' which reads:

"(1) The Lessee will not transfer or sublet or part with the possession of the said premises or any part thereof without the previous consent in writing of the Lessor but so that such consent shall not be unreasonably, arbitrarily or vexatiously withheld."

and an express 'proviso for re-entry' and forfeiture by the lessor for non-payment of rent or breach of covenant in the following terms:

"(13) It is hereby agreed that if the said rent or any part thereof shall be in arrears for the space of seven days after any of the days whereon the same ought to be paid as aforesaid whether the same shall or shall not have been legally demanded, or if there shall be any breach or non-observance of any of the Lessee's covenants herein contained then and in any of the cases it shall be lawful for the Lessor at any time thereafter to re-enter into and upon the said premises or any part thereof in the name of the whole and the same to have again and re-possess and enjoy as in his former estate without prejudice to the right of action of the Lessor in respect of any breach of the Lessee's covenants herein contained."

Returning then to the narrative of facts. On the 20th of December 1993 the defendant company through its solicitors issued a 'notice to quit' in which it alleged that the plaintiff company as lessee had committed the following breaches of the terms of the lease, namely:

"(a) by subletting a portion of the leased premises without firstly obtaining the Lessors consent in writing; and

(b) by being in arrears of rental pursuant to Clause 13 of Lease No. 20187."

Under cover of a separate letter of the same date the plaintiff company's rental cheque dated '27.10.93' for $120 (being 6 months rental) was also returned.

Correspondence was exchanged between the respective solicitors with little success, culminating in the defendant company's notice dated 14th February 1994 to the plaintiff company, of its application to the Registrar of Titles "... for registration of its re-entry on and recovery of possession of the land comprised in the above-mentioned lease No. 20187."

In this latter regard the affidavit of the Acting Registrar of Titles confirms receipt of the defendant company's application for cancellation of the lease dated the 12th February 1994. It was supported by a statutory declaration sworn by the managing director of the defendant company wherein was deposed inter alia:

"(2) THAT the aforesaid Lessee's and their successors made default under the said Lease by subletting a part of their holding to Mishra & Co. Chartered Accountants without first obtaining the Lessor's consent in writing ...";

(6) THAT the Lessor caused a Notice to (be) delivered to the Lessee's at the premises at 52 Pratt Street, Suva dated 20th December 1993 whereby the Lessees were requested to quit and deliver the premises on or before 31 January '94 ..." and

(8) THAT the Lessee (sic) by serving the Notice on the Lessee have effectively terminated the Lease No. 20187 and thus deemed to have re-entered possession of the said premises."

It will be seen at once that the 'sole ground' under which the defendant company purported to exercise its 'option to re-enter' the lease was an alleged breach of the Lessee's 'covenant against alienation'. No direct reference was made to rental arrears nor were any relevant facts deposed in that regard.

Of particular relevance to the present proceedings however, is the statement of the Acting Registrar of Titles where he deposed:

"(13) THAT ... my decision (in cancelling the lease) was based on the interpretation of:

(a) S.57 of the Land Transfer Act,

(b) The various lease conditions embraced in Lease No. 20187 and facts declared by Jameela Sherani in her application for re-entry,

(c) The Notice to quit was regular,

(d) S.105(8) of the Property Law Act 1971."

Before dealing however with the various matters relied upon by the Acting Registrar of Titles, it is convenient at this stage to deal with the complaint of the plaintiff company that its lease was cancelled by the Acting Registrar of Titles "... without giving any opportunity to the lessee to make any submissions on the same."

In this latter regard it is common ground that the Acting Registrar of Titles in cancelling the plaintiff company's lease had not sought its views. That the exercise of the power vested in the Registrar of Titles under Section 57 of the Land Transfer Act (Cap. 131) can have far-reaching and quite drastic consequences cannot be doubted, nor, in my view, can the action of the Registrar of Titles be classed as a purely 'administrative act' as appears to have been suggested by learned counsel who appeared for the Registrar.

Section 57 of the Land Transfer Act (Cap. 131) provides:

"The Registrar, upon proof to his satisfaction of lawful re-entry and recovery of possession by a lessor either by process of law or in conformity with the provisions of re-entry contained or implied in the lease, shall cancel the original of such lease and enter a memorial to that effect in the register, and the estate of the lessee in such land shall thereupon determine ..."

On my reading of the 'Section' the Registrar in exercising his power to cancel a lease is acting 'judicially'. He must be satisfied that there has been an actual valid re-entry and a recovery of possession, either by process of law or by exercise of any power of re-entry contained or implied in the lease.

To put it another way and this time paraphrasing the words of Myers C.J. in Christoffel v. Mokau Collieries Ltd. (1934) N.Z.L.R. 170 at S171, the Registrar must be satisfied firstly, that the lessor is entitled to exercise the power of re-entry contained in the lease, and secondly, that the re-entry and recovery of possession of the premises was valid.

Further, by proviso (b) to the 'Section', unless the re-entry and recovery of possession have been obtained by judgment in an action for possession, the Registrar is required to be satisfied that notice of the application for registration of the re-entry has been served on all persons interested under the lease, or, failing that, the Registrar must himself give a month's notice of the application in the Gazette and in a local newspaper.

In the circumstances there would appear to be some merit in the plaintiff company's complaint. Learned counsel for the Registrar however, disputed the plaintiff company's right to be heard on an application under Section 57 and cited the Privy Council's decision in Laffer v. Gillen [1927] UKPCHCA 2; (1927) 40 C.L.R. 86 where it was held that a provision in a sale and purchase agreement which empowered the vendor to determine the agreement "(if) satisfied on such evidence as he deems sufficient" merely gave rise to an administrative function in which the vendor might form an opinion without giving the purchaser an opportunity of being heard or of meeting allegations to his prejudice.

Their lordships also dealt with a statutory provision in which the Registrar is directed to make an entry in the Register upon receipt of a notice and held that the provision (which is materially different from our Section 57) does not assume a lawful forfeiture or determination but merely gives effect to a forfeiture or determination which the Commissioner says has been lawfully made.

I confess that the decision of the Privy Council in Laffers case (ibid) has been of little assistance to me in resolving the plaintiff company's particular complaint. More relevant are the observations of Hyne C.J. in Ram Kali v. John Bayley and The Registrar of Titles 4 F.L.R. 139 when he rejected a somewhat similar complaint in the case where the Registrar had cancelled a lease in the exercise of his power under the predecessor to the present Section 57 of the Land Transfer Act. The learned Chief Justice who had the benefit of detailed evidence of the practice of the Titles Office, said at p.141:

"It is said, ..., on behalf of the plaintiff (lessee) that the plaintiff had a right to be heard. There is no such requirement in Section 51 or elsewhere in the Ordinance. The proviso only requires notice to be given to sub-lessees or sub-tenants when re-entry is based on non-payment of rent, to give them an opportunity of paying arrears if they wish."

With all due regard to the learned Chief Justice's observations I would respectfully differ with his view on a lessee's right to be heard on an application under Section 57. The provisions of Section 51 of the Land (Transfer and Registration) Ordinance (Cap. 136) (to be found in Vol. III of the 1955 Laws of Fiji reprint) which was under consideration in Ram Kali's case has been materially amended by the addition of an additional 'proviso (b)' in the Land Transfer Act 1971 which introduced a further more general notification requirement in respect of all applications under Section 57 of the Land Transfer Act (the successor to Section 51) which are unsupported by a court order.

Needless to say where re-entry and recovery of possession have been effected "by formal process of law", the Registrar need not concern himself with the lawfulness of the re-entry or the completeness of the recovery of possession which he would otherwise have had to consider in the absence of a court order and it is in this latter context that notice must "be served on all persons interested under the lease".

One is tempted to ask why the notification if the persons notified have no right to be heard or at least, a reasonable expectation that they would be given an opportunity to be heard? In my view 'natural justice' demands it and the statutory language although not expressly requiring it, quite clearly supports it.

Recently Scott J. had occasion in Ranjit Singh & Others v. Gordon Wilson Speakman and The Registrar of Titles C.A. No. 254 of 1992 to consider the meaning and effect of 'proviso (b)' to Section 57 and in an unreported judgment observed of the additional notification requirement:

"The purpose of this requirement to me is quite clear. It is to enable a lessee to seek relief from the Court against the cancellation, in other words to allow the lessee himself to have recourse to formal 'process of law' when faced with an application for cancellation which was not itself preceded by such a formal process."

I respectfully concur with those remarks which further emphasises the judicial nature of the Registrar's function in the exercise of his power under Section 57 and re-inforces the need to give a lessee sufficient notice of an application in order to enable him to show cause against the exercise by the Registrar of his powers under the Section and seek relief against forfeiture.

Be that as it may I do not propose to reach a final view on this inconclusive issue which was not seriously pressed by learned counsel for the plaintiff company. Instead I shall deal with the originating summons on its merits.

Before leaving Ram Kali's case however, I note that Hyne C.J. also observed at p.142:

"There is no doubt as to his (the Registrar') right to cancel a lease if he is satisfied that the lessor has re-entered and recovered possession lawfully, and possession does not mean physical possession."

This latter statement of the learned Chief Justice must be re-considered in the light of a later judgment of his in Niranjan & Sons v. A-G 5 F.L.R. 78 when he approved and applied the observations of Roper J. in Tattersalls Hotel Penrith Pty. Ltd.v. Permanent Trustee Coy. Ltd. [1942] NSWStRp 12; (1942) 42 N.S.W.S.R. 104 where the learned judge said generally on the subject of re-entry at p.110:

"In my opinion, in order to effect a re-entry the lessors or their agent must obtain possession to the physical exclusion of the lessee or anyone properly claiming under him."

It is common ground in this case that the defendant company did not obtain any court order for vacant possession nor could it be seriously suggested that re-entry was effected "by process of law". Furthermore it is undisputed that the plaintiff company has throughout the present proceedings and even after the Registrar's cancellation of the lease, continued physically to occupy the premises in question. Quite plainly the defendant company has not recovered possession "... to the physical exclusion of the lessee."

Faced with those indisputable and somewhat inconsistent facts learned counsel for the defendant company sought to rely upon the service and expiration of its 'notice to quit' as amounting to a 'lawful re-entry and recovery of possession' for the purposes of Section 57. I cannot agree.

In the first place, the provisions of Section 89 of the Property Law Act (Cap. 130) under which the 'notice to quit' was purportedly given, has no application to the present case which is a registered lease and not "a tenancy". Further the plaintiff company's lease is for a "fixed duration" namely, 75 years, and, finally, the lease itself contains an "express agreement between the parties" as to how and under what circumstances it may be determined by the lessor i.e. by re-entry into and upon the said premises or any part thereof.

In Town v. Stevens and Others (1899) 17 N.Z.L.R 828 where the lease had a 'proviso for re-entry' in similar terms to Clause 13 (op.cit at p.4) and where the lessor sought to determine the lease for breach of several covenants by the service of a 'notice to quit', Williams J. in rejecting the notice said at p.830:

"The lease provides that on a breach of any covenant it shall be lawful for the lessor ... to re-enter into and upon the demised lands, and thereby determine the lease. It could not be determined by a mere notice to quit, nor could it be determined by demand of possession."

and later at p.831:

"Now, this lease was not, and could not be, determined in that way (i.e. by legal notice to quit or by demand for possession), because in the terms of the lease it must be determined by re-entry. Of course, an action for ejectment would be equivalent to re-entry; but no action of ejectment has been brought ..."

(See also: Moore v. Ullcoats Mining Co. Ltd. [1907] UKLawRpCh 115; (1908) 1 Ch. 575 at 587, 588)

More recently in Re Register (A Bankrupt) (1958) N.Z.L.R. 1050 where the right of re-entry in the lease was in almost identical terms to Clause 13 and where the lessor sought to determine the lease by service of a month long 'notice to quit' on the lessee, Gresson J. in rejecting the validity of the notice and lessor's re-entry during the pendency of the notice said at p.1054:

"The lease contained an express proviso for re-entry or forfeiture by the lessor on specified events, including non-payment of rent. Such proviso gave the lessor an option to exercise her right of determining the lease upon the cause of forfeiture arising. It did not by itself enable the lessee to treat the term as at an end, and the lease being not void but voidable only the lessor could avoid it. Notwithstanding the cause of forfeiture, therefore, the tenancy continued until the lessor did some act which showed her unequivocal intention to determine it ... at common law, a mere indication of intention to forfeit at the expiration of a month, which might or might not be implemented at the lessor's option, cannot determine the lease; and the notice to quit in the present case cannot be regarded as equivalent to re-entry or the commencement of an action for possession. Where the condition in the lease is that the landlord may re-enter, he must 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."

and later at p.1055 he said:

"a right to re-enter under a lease is waived by the lessor if, knowing the facts on which the right arises, he does something unequivocal which recognises the continuance of the lease."

More particularly, in relation to the effect of the 'notice to quit' Gresson J. said, in words that might equally apply to this case:

"... it is not the notice to quit which of itself waives the forfeiture. It is rather evidence to show that the lessor has elected not to avoid the lease ... and, here the action of (the lessor's) solicitors, who were acting throughout within their authority, in giving notice to quit amounted, in my view, to an unequivocal act affirming the existence of the lease which they, and thus the lessor, treated as continuing after knowledge that the rent was ... in arrears. I am unable to regard the notice in this case as having been given per incuriam or as a mere matter of clerical routine."

and finally at p.1056 the learned judge said:

"I am, therefore, of opinion that the notice to quit precluded the lessor from exercising any right of re-entry for any antecedent non-payment of rent."

In somewhat similar vein Myers J. in McKinnon v. Portelli & Anor (1960) N.S.W.S.R. 343 in rejecting the 'notice to quit' in that case said at p.350:

"... to take the place of a writ of ejectment, that is, to be equivalent to entry, it (the notice to quit) must satisfy the conditions which made the action of ejectment an equivalent of entry. The action of ejectment was an equivalent because it unequivocally asserted a present right to possession on all grounds which might be available to the lessor and therefore on the ground of forfeiture. The cases to which I have, referred make it quite plain that it (the notice to quit) must not only assert the right to possession, but must also assert that right on the ground of forfeiture.

The notice to quit in the present case fails to qualify in both respects. It does not claim an immediate right to possession, for it merely requires the plaintiff (lessee) to give up possession on a future date, ... Nor does it equivocally or at all claim a right of possession on the ground of forfeiture.

Even if this notice to quit is capable of being read as indicating an intention to rely on the forfeiture clause, it is not enough. That intention must be clearly and unequivocally asserted and merely to say that a notice given in reliance of a statutory right (in this instance Section 89 of the Property Law Act) is capable of indicating an intention to rely on another right (i.e. to re-enter under clause 13 of the lease), is to say it is equivocal. To hold otherwise would mean that a notice to quit in accordance with the statute would effect a forfeiture irrespective of a lessor's intention."

In the light of the above dicta I am firmly of the view that not only did the defendant company's 'notice to quit' in this case amount to a waiver of its right to forfeit the lease but even if it did not so amount to an effective waiver, it was wholly incapable both in fact and in law of amounting to a "re-entry into and upon the said premises" in terms of Clause 13 of the lease.

In my considered view the proper course of action which the plaintiff company ought to have adopted in this case and which appears to have completely escaped the notice of learned counsel for the plaintiff company was to apply to the Court under the provisions of Section 105(2) of the Property Law Act for an injunction and for relief against re-entry or forfeiture of its lease upon receipt of the defendant company's 'Section 57 notice'. Its failure to do so however, cannot and does not preclude the exercise by this court of its ancient equitable jurisdiction to relieve against forfeiture of a lease.

As was remarked as long ago as 1806 by Lord Eskine in Davis v. West (1806) 12 Ves. 476

"Where covenants are broken, and there is no fraud, and the party is capable of giving complete compensation, it is the province of a Court of Equity to interfere, and give relief against the forfeiture for breach of other covenants, as well as that for payment of rent; and the only distinction is, that in the latter case it is considered so clear, that the object of the clause for re-entry is only to secure the payment of the rent, that the legislative interposed and made it unnecessary to come into Equity ... leaving the ancient jurisdiction of Equity in every other case untouched."

(See also: Howard v. Farnshawe [1895] UKLawRpCh 111; (1895) 2 Ch. 581, 586 to 588)

In this regard the provisions of Section 105(1) of the Property Law Act (Cap.130) is undoubtedly a statutory 'fetter' on the exercise by a lessor of his right of re-entry or forfeiture under a lease. In this particular instance it is undisputed that the defendant company as lessor at no time served on the lessee the statutory notice required by Section 105(1) and accordingly in terms of the Section the defendant company's right of re-entry "... shall not be enforceable."

Learned counsel for the defendant company and the Acting Registrar of Titles however seeks to over-come this 'statutory bar' by relying on the provisions of subsection 8(a) of Section 150 (which is very similar to Section 50(9)(a) of the Land (Transfer and Registration) Ordinance Cap. 136) and which provides:

"(8) The provisions of this Section shall not extend -

(a) to a covenant or condition against assigning, sub-letting, parting with possession, or disposing of the land leased;"

In this regard it is undisputed that the plaintiff company as lessee has parted with possession of part of the land leased to one Arun Mishra without the prior consent in writing of the lessor which prima facie constitutes a clear breach of the terms of Clause 1 and therefore it is said there is no need for the lessor to serve the statutory notice required by Section 150(1) before forfeiture could be enforced.

Leaving aside for the time being the decision in Chaplin v. Smith (1926) 1 K.B. 198 and the efficacy of the particular procedure adopted by the lessor in purporting to re-enter and forfeit the lease, I cannot agree that the provisions of Section 150(8)(a) are excluded in this instance.

In the first place, subsection 8(a) no-where refers to a sub-letting or parting with possession of 'part of' the land leased (which is the particular covenant alleged to have been breached by the lessee) nor by any stretch of the statutory language can "a portion of the leased premises" constitute the whole of "the land leased" which in my considered view is the proper ambit of Section 8(a).

In Jackson v. Simons (1923) 1 Ch. 373 Romer J. had occasion to consider the provisions of Section 14(1) and (6)(i) of the Conveyancing Act 1881 (U.K.) (which are identical to Sections 150(1) and 8(a) of the Property Law Act respectively) and echoing my above view during the course of counsel for the lessor's argument, Romer J. was heard to observe of the ambit of S.14(6)(i):

"The subsection in terms relates only to the 'land leased'; there is no reference to 'any part thereof'."

(recorded at p. 377).

More particularly, Romer J. in rejecting an argument that a restricted reading of the subsection would defeat the intention of the Legislature said at p.382:

"I think it is safer to assume that the intention of the Legislature is that which the words of the sub-section, when properly construed, would imply, rather than endeavour to ascertain that intention by any process of a priori reasoning."

and in rejecting counsel's contention that the subsection was merely describing a well-known class of covenant in language wide enough to include all members of that class said at p.382:

"I should have expected, if that had been the intention of the Legislature, to find a much more general description, such as, 'covenants against alienation', rather than the detailed description used by the sub-section."

Then after carefully analysing and illustrating the subtle distinctions and limitations of some common formulae adopted in 'covenants against alienation', Romer J. said at p.384:

"The sub-section rather appears to me to be an enumeration of some particular members of that class which it was intended should be excepted from the provisions of the Section, to the exclusion of the other members of that class."

I am further fortified in my view of the ambit and scope of Section 150(8)(a) by the judgment of Scrutton L.J. in Russell v. Beecham (1924) 1 K.B. 525 when his lordship said at p.536:

"The question is whether a covenant against parting with possession of part of the premises is included in a covenant against parting with the possession of the land leased ..."

then after referring to the judgment of Lord Eldon in Church v. Brown (1808) 10 R.R. 74 Lord Justice Scrutton concluded:

"I am content to follow Lord Eldon, and to hold that a covenant not to part with a part of the premises is a different covenant from a covenant against parting with the possession of the premises; and therefore a notice was required before a forfeiture could be enforced, and consequently that the action fails."

Earlier his lordship observed during the course of counsels submissions:

"Does parting with possession of the land leased in Section 14 subs 6 of the Conveyancing Act 1881, include parting with possession of part of the land leased? I doubt it: Church v. Brown."

(recorded at p.531)

In the light of the above there is not the slightest doubt in my mind that the defendant company as lessor has neither effected a "lawful re-entry" of the lease nor has it "recovered possession" of the land in question by the mere service and expiration of a 'notice to quit' and accordingly the Acting Registrar of Titles was not and could not have been satisfied on either score. Furthermore, Section 105(8)(a) of the Property Law Act (Cap. 130) does not avail the defendant company and in the absence of the requisite notice under Section 150(1) its right to re-entry and forfeit the lease is thereby rendered unenforceable.

I have no hesitation in holding that there has been no 're-entry' by the defendant company (lessor) sufficient to justify any notation or cancellation of the plaintiff company's lease No. 20187 by the Registrar of Titles under Section 57 of the Land Transfer Act (Cap. 131).

Accordingly I grant the plaintiff company a declaration in terms of its first prayer for relief and order the Registrar of Titles to correct the register by cancellation of the notification of re-entry of Lease No: 20187 on the relevant memorial to Certificate of Title No: 6316.

I turn next to consider the form of order or relief that this court ought to grant the plaintiff company bearing in mind that the original lease has been cancelled and the relevant memorial entry has been made in the register.

In such circumstances Section 57 expressly provides: "... the estate of the lessee in such land shall thereupon determine ..." The question that necessarily flows from that language and which is raised in the plaintiff company's second prayer for relief, is: Can the Court revive or reinstate a lease that has been cancelled and which the statute says "shall thereupon determine"?

I confess that the answer to the question has not been an easy one but the preponderance of authority appears to favour an order recognising the continuation of the existing lease.

Stirling J. in Howard v. Farnshawe (op.cit) concluded that such relief could be granted on terms even though re-entry and forfeiture had already taken place.

In Brooker's Colours Ltd. v. Sproules [1910] NSWStRp 96; (1910) 10 N.S.W.S.R. 839, A.H. Simpson C.J. rejected an argument that entry having been made in the register under S.55 of the Real Property Act 1900 (N.S.W.) of the re-entry and recovery of possession by the defendant (lessor), and no fraud having been alleged, the Court had no jurisdiction to relieve against forfeiture, when he said at p.841, 842:

"Section 55 (which is in identical terms to our Section 57) says that (the lessee's) estate comes to an end; but that is a very different thing from saying that his equity to have that estate revived has come to an end."

In Dendy v. Evans [1909] UKLawRpKQB 203; (1910) 1 K.B. 263 the Court of Appeal in upholding an order under S.14(2) of the Conveyancing Act 1881 (which is identical to our Section 105(2) of the Property Law Act) which granted relief against forfeiture on terms that the (assignee): "... do hold the demised premises according to the said lease without any new lease", held inter alia, that the effect of the order for relief was to restore the lease as if it had never become forfeited.

Finally in Daalman v. Oosterdijk (1973) 1 N.Z.L.R. 717 McMullin J. in granting equitable relief against forfeiture in the form of a declaration where the lessee had continued in occupation, said at p.723:

"In my view ... equity provides relief in that at equity the relief is not limited to cases where the landlord has brought an action for ejectment but extends to cases where the landlord had purported to forfeit and determine the lease by re-entry. Relief should be afforded to the plaintiffs as lessees in the present case."

In this case I am satisfied this Court should adopt a similar approach in relieving the plaintiff company from the forfeiture of its registered lease No: 20187 for non-payment of rent, namely by way of a declaration:

"that the lessees and their assigns are entitled to have, hold and enjoy the lands and premises demised by the said lease according to the terms of the said lease without any new lease on condition that the plaintiff company pay into court within 14 days for payment out to the defendant company the sum of $480 (Four hundred and eighty dollars) being the arrears of rental from June 1993 up to the date of this judgment."

As for the alienation of part of the leased land to Arun Mishra without the defendant company's prior written consent, no argument was addressed to the Court along the lines of Scala House & District Property Co. Ltd. v. Forbes (1974) Q.B. 575 but in any event I prefer the more recent judgment of the Court of Appeal in Expert Clothing Ltd. v. Hillgate House (1986) 1 Ch. 340 and especially the observations of O'Connor L.J. at p.364 and 365 on the Scala's case.

Be that as it may and with a view to finally resolving this issue, and balancing as best I can, the ineffectiveness of the manner in which the defendant company has sought to exercise its re-entry option with the obvious prejudice occasioned by the continuation of what is a prima facie illegal alienation of the land leased, I hereby grant the defendant company compensation in the sum of $1,500 to be paid within 30 days, together with an injunction restraining the plaintiff company from continuing to alienate to Arun Mishra any part of the land leased in Lease No: 20187 after the expiration of one (1) month from the date hereof.

For the sake of completeness the defendant company's application in Civil Action 183/94 is hereby dismissed.

The parties having each partially succeeded in their respective claims will bear their own costs.

(D.V. Fatiaki)
JUDGE

At Suva,
19th January, 1995.

HBC0156J.94S