Supreme Court
Action No. 96 of 1972
25th May, 1984
Moe, C. J.

Mr. P. Zuniga, for the Plaintiff.
Mr. M. Young, for the Defendant.

Landlord and Tenant - Breach of rent covenant - Application for possession - Waiver - Acceptance of rent after breach - Relief against forfeiture - Mesne profit - Damages for breach of rent covenant - Application by tenant/defendant for specific performance of an option to lease addition property under the said breached lease agreement - Damages in lieu of specific performance.

J U D G M E N T

In these proceedings the Plaintiff seeks to recover possession of the northern half of "Long Caye" which he leased to the Defendant for thirty five years from 1st July, 1968 a the yearly rent of $412.50 payable in advance on the 1st July. He alleged:-

(a) That the Defendant failed to pay the second year's rent in accordance with the terms of the lease but paid it in the month of September 1969.

(b) That the Defendant failed to pay or tender the rent for the year 1970 or the third year's rent.

He averred that in October 1970 he re-entered the land and terminated the lease. Also that by letter dated 24th November, 1971 his Solicitor returned certain cheques of the Defendant and informed him action for ejection would be taken. The Defendant remains in possession.

The Defendant denied the breaches as alleged and that the Plaintiff re-entered the land. He also averred that the Plaintiff waived the first alleged breach by accepting the second year's rent at the time and date concerned. Further that he the Defendant tendered payment for the year 1970 or third year's rent in October 1970 before commencement of this action. That in compliance with a letter of demand from the Plaintiff's solicitor, he paid the rent for the year 1970 on 1st July, 1974. That on the 10th June, 1981 he paid through his Attorney rental due up to including 1st July, 1981. He is willing to pay arrears of rent up to 30th June, 1984. He has counterclaimed for relief from forfeiture for any breach or breaches of the covenant to pay rent. He also seeks:

(a) specific performance of an agreement under which he says he was given an option of taking a lease on the southern half of the said Caye. He has exercised the option but the Plaintiff refuses to execute the lease.

(b) Specific performance of an agreement under which he says he was given an option to purchase a parcel of land known as "Little Caye" on Glover's Reef.

On the question as to when the second year's rent was paid there was evidence only from the Plaintiff which I accepted. That rent was not paid on the 1st July, 1969 as required but was paid in the month of September 1969. With regard to the third year's rent the Plaintiff said it was not paid in the year 1970. When it was not paid in September or October he put the matter in the hands of his Attorney. He saw the Defendant late in the following February when he brought money to him. He refused it telling Defendant the matter was in the hands of his lawyer, and he was going to get back the land because he didn't want any fuss with anybody. The Defendant's account was that he tendered the rent in cash to the Plaintiff personally in about June or July 1970 but the Plaintiff refused it, got very angry, picked up a hammer and threatened to hit him with it. He left. He never talked to the Plaintiff after that. He sent the rent to the Plaintiff from the U.S. by bank draft with a covering letter. I rejected the Defendant's account. The terms of the covering letter referred to and in evidence were not consistent with a relationship between the parties, as the Defendant sought to establish. The letter was more consistent with the Plaintiff's account that he was getting trouble with the Defendant. The Defendant tells the Plaintiff in the letter he will not have trouble in cashing that draft at the bank. He also asked the Plaintiff to do him a favour which I did not expect him to ask of a man who took a hammer to him. Further the bank draft and terms of covering letter showed as Plaintiff said and as the Defendant pleaded, the rent was paid in October 1970.

When therefore the Defendant did not pay the rent due on the 1st July, 1970 on that date he was in breach of the terms of the lease with the Plaintiff and was in arrears until tender of payment in October 1970. I found also as admitted by the Defendant that by a letter dated 24th November, 1971 the Plaintiff's solicitor returned the Defendant's cheques which purported to be rental payments at the time informing the Defendant that the payments had arrived too late. A rental payment ought to have been made on the 1st July, 1971.

Clause 5(c) of the lease provided as follows:- "If the rent hereby reserved or any part thereof shall remain unpaid for 30 days after becoming payable (whether formally demanded or not) or if any covenant on the lessee's part herein contained shall not be observed or performed then and in any case it shall be lawful for the lessor or any person or persons authorised by him in that behalf at any time thereafter to re-enter upon the said premises or any part thereof in the name of the whole and thereupon the term hereby created shall absolutely determine but without prejudice to any right of action or remedy of the lessor in respect of any antecedent breach of the covenants by the lessee hereinbefore contained." On the 22nd September, 1972 issued his writ of summons which was served on the Defendant on 19th January, 1973. No appearance was entered and judgment entered for the Plaintiff on 1st February, 1973. An appearance was entered on 2nd February, 1973 and an application to set aside the judgment was filed on 20th July, 1974. That application does not seem to have been heard but the Plaintiff took out a Writ of possession on 8th August, 1977 and there was another application to set aside judgment on 26th September, 1977. The judgment was set aside on 14th March, 1978. A judgment in default of defence was entered on 14th April, 1978 which was set aside on 5th December, 1978. On an application by the Defendant that the action be dismissed, an order giving directions was made on the 27th March, 1979. The Statement of Claim was delivered on 10th April, 1979 and the defence on 30th April, 1979. A reply delivered on 10th May, 1979.

When the Plaintiff filed his action the Defendant was in breach of the terms of the lease and the Plaintiff by so filing had clearly decided to take advantage of the forfeiture which arose by virtue of the breach. An Attorney for the Plaintiff on 26th June, 1974 wrote the Defendant in the following terms:

"Dear Sir,

RE: Rents due from you to Ralph Jackson in respect of Long Caye

Under a lease dated the 28th June, 1968 you leased the northern part of Long Caye situated at Glovers Reef from Ralph Jackson. You agreed in that lease to pay a yearly rental in advance on the 1st day of July each year while the lease remained in force.

You have failed to pay rents for the years 1970, 1971, 1972 and 1973. Mr Jackson also claims for 1974 a sum equal to the yearly rents agreed in the lease.

The total sum due to Mr. Jackson then is $2,062.50 being $1,650.00 for rent for the years 1970 to 1973 both years inclusive and $412.50 for the year 1974. Let me remind you that when I refer to the year 1970 this means, as agreed under the lease one year from the 1st day of July, 1970 to 30th day of June, 1971 and the year 1971 means the 1st day of July, 1971 to the 30th day of June, 1972 and so on.

The sum of $2,062.50 must be paid to me no later than the 30th day of June, 1974 on behalf of Mr. Jackson.

I remain,
Yours faithfully,
J. CUTHBERT GRAY"

The Defendant sent payment and obtained receipts. The Defendant has submitted that the right to forfeiture has been waived and referred to a decision of this court in Action Nos. 37 & 39 of 1982. The Plaintiff on the other hand relies on the following passage from Halsbury Laws of England 3rd Edition Vol. 23 paragraph 1397. "If the landlord has already shown a final determination to take advantage of the forfeiture, for instance, by commencing an action to recover possession, no subsequent act, whether receipt of rent - or otherwise will operate as a waiver."

In Action Nos. 37 & 38 of 1982 in which the Plaintiff sought to recover possession of premises from the Defendant on the ground of non-payment of rent in accordance with a clause of the lease under which the Defendant held the premises, the court held that certain documents issued by the Plaintiff one year after he had issued his Writ, showed that the Plaintiff recognized the Defendant as his tenant with full knowledge of the parties position under the relevant clause in the lease and the court declined to make an order for possession. I do not think the case referred to by the Defendant is on all fours with the instant case. The documents concerned were:

(a) A declaration "To Whom it may concern" in which the Plaintiff plainly stated

(1) that the Defendant held a tenancy which continued until a certain date;

(2) had his permission to enter into partnership agreement with respect to the said tenancy of the premises and

(3) at the end of the present tenancy arrangements would be made for continued occupancy by the Defendant.

(b) A receipt given by the Plaintiff to the Defendant for rent in respect of a period two years ahead of the time of payment. In this case what the Defendant relies on are

(a) the letter of 26th June, 1974 set out above which is in my view simply a letter of request that payment be made and

(b) the receipt given for the rent received.

There is nothing in those documents and I have found no other facts or circumstances on which I can conclude that the Plaintiff recognized the relationship of Landlord and Tenant as continuing between the parties.

There is also evidence that Attorney-at-Law, acting for the Plaintiff in negotiations for the sale of the Caye of which the premises, subject matter of this Action forms part, received money which equalled the amount of arrears of rent due up to the date of receipt. The Attorney-at-Law had agreed to such payment as part of the negotiations. The Plaintiff refused that money. Again the receipt of the amount of rent due by the Attorney-at-Law for the Plaintiff does not amount to a waiver by the Plaintiff of his right to have the lease forfeited.

On the evidence before me, the Plaintiff is entitled to possession. The question which now arises for determination is whether the Defendant should have relief from the forfeiture. I am now required to take a decision in 1984 which ought to have been made ten years ago. The principle is that relief is granted when all rent due and costs are paid. The evidence now is that rent up to 30th June, 1975 was paid to the Plaintiff's solicitor and receipts therefore issued. That an amount representing rent due up to 30th June, 1982 has been paid to an Attorney-at-Law for the Plaintiff. Rent due to date amounts to $825 i.e. $412.50 for the year 1st July, 1982 to 30th June, 1983 and similar amount for the year 1st July, 1983 to 30th June, 1984.

The Plaintiff also asked for damages for breach of covenant. This matter was not argued before the court. There was the breach of covenant committed in 1969, the breach committed in 1970, and that evidently committed in 1971 all before the Plaintiff indicated he will be taking action for ejectment. Having received rent for the relevant period the Plaintiff was put in the same position as he would have been if the rent had been paid on the due date. Damages will therefore be nominal which I set at $100.00.

I will therefore enter judgment for the Plaintiff on his claim for mesne profits being at this stage $825.00 and damages assessed at $100.00 for breach of covenant. The Defendant to have relief against forfeiture on condition that:

(1) the sum of $825.00 being mesne profits from 1st July, 1982 until 30th June, 1984 be paid over to the Plaintiff;

(2) the Defendant pays the Plaintiff's costs; and

(3) Damages of $100.00 for breach of covenant; all on or before the 15th June, 1984.

I turn now to consider whether the Defendant should have enforced an agreement by the Plaintiff to grant him a lease of the southern half of the Caye. The agreement concerned was signed by the parties on the 25th July, 1968, some 27 days after the signing of the lease breach of which caused this action now before the Court. The agreement to lease is supplemental to the original lease and forms part of it. By Clause 1 it was agreed that the lessee (the Defendant) shall have the option of taking a lease on the southern half of the Caye known as "Long Caye" -. Clause 2 provided that the said option shall be exercisable by notice in writing to the lessee at any time prior to 1st August, 1973 and if and when the same shall be exercised then the lessor shall grant and the lessee shall accept a lease of the said premises.

The Defendant gave notice by letter dated 24th June, 1969 that he was exercising his option to lease the southern portion of the Caye and requested the Plaintiff to grant the lease. The Plaintiff has not executed such a lease.

There is evidence that the Plaintiff had trouble with the Defendant over the northern half of the Caye as shown by the matter of his failure to pay rent at the due dates. There is reference to certain matters in a letter Exhibit G.L. 9 from the Defendant to the Plaintiff which indicates there was a difference between them as to whether the Defendant was using the northern parcel of land as expected. This tended to confirm the Plaintiff's evidence as to trouble between the parties. The Plaintiff said he was sorry he entered into agreement with the Defendant for he treated him like a child. It is not surprising that the Plaintiff declined to execute the lease when he realized he was dealing with a man who was not meeting his obligations. He indicated as far back as 1969 that he was not executing the lease. The Defendants claim for specific performance of this agreement was commenced in 1979 some ten years after he says he ought to have had the lease executed. Taking all these circumstances into account I think his claim for specific performance is to be refused.

The Defendant asked for damages in lieu of specific performance. It is true that the Plaintiff did not keep to his agreement to lease the southern portion of the Caye to the Defendant. As indicated this agreement was supplemental to and formed part of the lease agreement relating to the northern portion of the Caye. The original agreement between the parties was breached on more than one occasion by the Defendant himself which breaches evidently prompted the Plaintiff's failure to execute the second lease. It therefore comes to this that the Defendant seeks damages for a breach prompted by his own wrong doing. In my view it would be wrong and inequitable to let the Defendant benefit in these circumstances.

With regard to the claim for specific performance of the agreement granting an option to purchase "Little Caye", there was no evidence that the Plaintiff is owner of the Caye or is a person with any power or authority to sell that Caye. This claim of the Defendant is also refused.

Judgment accordingly.

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