View
228
Download
1
Category
Preview:
Citation preview
Page 1 of 13
REPUBLIC OF TRINIDAD AND TOBAGO
IN THE HIGH COURT OF JUSTICE
Claim No: CV 2011-003545
BETWEEN
KAMEEL KHAN
Claimant
AND
C.G.A.S. DEVELOPMENT COMPANY LIMITED
Defendant
Before the Honourable Madam Justice C. Pemberton
Appearances
For the Claimant: Mr R. Dass instructed by Ms J. Troja
For the Defendant: Ms S. Maharaj holding for Mr R. Montano
Ms D. A. Prowell and Ms C.A Prowell instructed by Mr R. Montano.
JUDGMENT
[1] This matter was born out of a physical re-entry onto premises by a Landlord and
demolition of a building on the property.
[2] FACTS
The Claimant Kameel Khan (KK) acquired a Leasehold interest in certain lands situate in
the town of Sangre Grande, East Trinidad. These lands were acquired in 1973 from his
relatives. Marlay and Company Limited were the Reversioners. On June 1st 1981, the
Page 2 of 13
LAND TENANTS (SECURITY OF TENURE) ACT1 (“the Act”) was passed. Lands which were
held by tenants under a residential chattel tenancy fell under its ambit and were
captured by certain statutory terms and conditions. It is therefore undisputed that as at
1st June 1981 KK was the statutory tenant of Marlay and Company.
[3] In 2002, Marlay and Company went into liquidation. The Receivers sold the entirety of
the property including KK’s parcel which was subject to the terms and conditions of the
Act to CGAS Development Company Limited. Since that transaction has not been called
into question, I shall express no view on that subject.
[4] As we move along we see the appearance of the following as uncontroverted facts:
(1) That during the period 1978 – 1985 the land was used in its entirety as
residential property.
(2) That there was an express covenant in the head lease speaking to user
and debarring expressly user for any other purpose “than as a single
private dwelling house”.
(3) There was another express covenant in the head lease speaking against
subletting without the prior written permission of the Landlord and
rental of the demised premises in excess of that paid to the Landlord. (The
latter was not part of the Defendant’s pleaded counterclaim and shall not
be treated with).
(4) The lease permits the Landlord to forfeit and re-enter for breach of any of
the covenants on the Tenant’s part.
(5) That KK had breached the covenant against single residential use.
(6) KK purportedly issued the Notice of Renewal which bore the date 19th
March 2010. Rent was tendered up to April 2010.
(7) As at the date that KK issued the Notice of Renewal to CGAS the premises
were in mixed use as partly residential and partly commercial.
1 Now Chap. 59:54 of the LAWS OF THE REPUBLIC OF TRINIDAD AND TOBAGO
Page 3 of 13
(8) The premises had been sublet. There is no evidence that they had been
sublet with CGAS’s consent.
(9) On 13th July 2011, CGAS served a notice of breach of the covenant against
single user and another breach expressed in the following terms that
“contrary to law, (KK) leased out the buildings standing on our client’s land
to three commercial enterprises…”. The letter called upon KK to “remove
and carry away from the said lands all the buildings and improvements
thereon which you have erected during your occupation”.
(10) KK purported to remedy the breach against use for residential purposes
only. Copies of the Notices to Quit to the pursuers of the commercial user
were attached for the Court’s perusal. He did not address the breach of the
other covenant with respect to subletting.
(11) On 12th September 2011, CGAS forfeited the lease and re-entered since KK
was in breach of the covenant against subletting without the landlord’s
consent first had and obtained.
(12) KK contends that the forfeiture and re-entry and demolition of the
structures on the land were unlawful and illegal and wishes damages for
his loss. In addition, KK wishes the court to declare that the statutory lease
was validly renewed and is subsisting; that the option to purchase had
been validly exercised and is enforceable against CGAS.
(13) CGAS resisted these claims in their entirety and counter claimed that it
was entitled to forfeit and re enter for breach of the term of statutory
lease dealing with subletting; that the tenants were being charged less
than the rental charged in the head lease and for the expenses incurred
consequent upon the demolition of KK’s buildings.2
2 See para 2 of the Defence and Counter claim filed 21 October 2011.
Page 4 of 13
[5] GENERAL OBSERVATIONS
For the removal of all doubt, I shall reproduce the terms of the Consent Order of 18th
March 2014 by which this trial on issue is to be determined.
ISSUE TO BE DETERMINED BY THE COURT
1.1 Whether the renewal notice was served by the Claimant to the
Defendant and whether the evidence as presented that is by way of
the hearsay notice is admissible;
1.2 At the date of renewal, could there have been one granted under the
Act having regard to the admitted breaches?
I shall not consider therefore any other issue in particular whether KK had validly
exercised his option to purchase. That did not form part of the bases for the matter
being dealt with in this way. In any event, KK’s indication of his option to renew as the
operative option at the time of the formulation of the issue of law to be tried will
supersede any other issues raised. Further it is clear and not disputed that at the time of
discussion for the exercise of the option to purchase, KK was in clear violation of the
covenant referring to user.
[6] WHETHER THE RENEWAL NOTICE WAS SERVED BY THE CLAIMANT ON THE DEFENDANT
AND WHETHER THE EVIDENCE AS PRESENTED THAT IS BY WAY OF THE HEARSAY
NOTICE IS ADMISSIBLE
Both parties submitted extensively on this issue. My only addition is that the provisions
of Part 30 of the CPR are clear and unambiguous. If a statement is admissible under
Section 37 of the EVIDENCE ACT3 as a statement made out of court by someone not
intended to be called as a witness, then if the statement is made in a document, the CPR
provides that certain conditions must exist before the statements made are admissible.
The other party has the option of filing a counter notice to require the production of the
author of the statement. My own view is that there is sufficient admissible evidence in
Mrs Radha Carrie Maharaj’s witness statement to convince the court that the notice was
3 Chap. 7:02 of the LAWS OF THE REPUBLIC OF TRINIDAD AND TOBAGO
Page 5 of 13
served by registered post. I do not think that this issue turns the case either towards or
against KK or CGAS.
[7] AT THE DATE OF RENEWAL, COULD THERE HAVE BEEN ONE GRANTED UNDER THE ACT
HAVING REGARD TO THE ADMITTED BREACHES?
To my mind, this is the more salient issue. As stated above, it is uncontroverted that as
at the date of the service of the notice of renewal, KK was in breach of the covenant
against user. Mr Dass spent a considerable amount of time in seeking to convince me
that CGAS was in violation of the provisions of Section 70 of the CONVEYANCING AND
LAW OF PROPERTY ACT4 (“the CLPA”). Ms Prowell declined to be drawn into any
discussion as she claimed that these issues were not contemplated at the time of the
Consent Order.
[8] LAW, ANAYSIS AND CONCLUSION
THE CLPA
RIGHTS OF LANDLORD OF FORFEITURE AND RE-ENTRY FOR BREACHES OF COVENANTS
AND TERMS OF THE LEASE.
I premise this discussion by observing that the terms of the CLPA and the Act must be
read jointly. Where they differ, if at all, the Act as the later in time will prevail. I must
make the point as well that the letter sent by CGAS on July 13th 2011 made mention of
two infractions, breach of the user covenant and breach of the covenant against
subletting without consent. However it was expressed, I am satisfied of this from the
letter. There has been no contradiction of this from KK.
[9] The CLPA at Section 70 clearly outlines when a Landlord can forfeit and re-enter. These
conditions for enforceability of the right by action or otherwise must be followed
strictly. Those conditions are:
4 Chap. 56:01 of the LAWS OF THE REPUBLIC OF TRINIDAD AND TOBAGO
Page 6 of 13
The existence in the lease of the right of re-entry or
forfeiture
That it must be stated to be exercisable for the breach of
any covenant or condition.
That before the right is enforced by action or otherwise,
that is before the right is actualized either by way of self
help or by court action, the Landlord MUST serve a
NOTICE on the tenant. The Act implies that the Notice
must be in writing.
The contents of the NOTICE must be:
(a) The nature of the breach;
(b) Whether the breach is capable of being remedied;
(c) That the tenant remedy the breach;
(d) In any case that the tenant pay to the Landlord any
compensation in money for the breach;
The tenant upon receipt of the notice must act within a
reasonable time frame; each time frame will be referenced
by the circumstances of the case;
If there is a failure to remedy the breach within that
reasonable time frame, (and to make the compensation
in money to the satisfaction of the lessor).
The right to re-enter or forfeit the lease materializes.
[10] Section 70 further provides then the Lessee may apply to the Court for relief from the
re-entry or forfeiture and the court, in its discretion may provide relief. I refer to this is
as the codification of the court’s equitable jurisdiction. This ability to apply by the
lessee can arise once the notice is served and is not dependent upon whether the lessor
has filed an action or not. The CLPA expressly provides that these provisions, that is,
Page 7 of 13
those of Section 70 do not apply to covenants against assigning, under-letting or parting
with possession or disposing of the land leased.
[11] ANALYSIS
The admitted breach is change of user. So far so good! There will therefore be obvious
need for the Section 70 Notice. That is KK’s case. However CGAS is saying you have
admitted that the change of user constituted a breach and you remedied it. To my
mind, to raise the issue of non compliance with the Section 70 requirements as a basis
for this case does not assist KK. What is more telling is how do we treat with the rising
specter that the breach of the covenant against subletting, not captured by the
strictures of Section 70, (which clearly states that a Notice is NOT required for breach of
the covenant against assigning and under-letting) is clearly established as a fact in this
matter.
[12] It is clear that the change of user is NOT the issue that is determinative of whether KK
succeeds or fails. The salient point is the covenant against assigning and under-letting
and whether as at the date of the alleged notice to purchase all was well between the
landlord and the tenant. I can say without hesitation that KK knew that he was in
breach. There was no need for any such notice to him either in fact or in law.
[13] THE ACT
As I stated earlier, the tenancy, the subject matter of this action falls within the
provisions of the Act.5 Section 4 of the Act speaks to the tenant’s right to seek renewal
of the lease provided that the tenant serves a written notice of renewal on the landlord
at least six months before the expiration of the original term of the statutory lease. The
Act is silent as to whether there must be a valid and subsisting lease at the time of
renewal, but there is nothing in the Act to suggest that there is to be any departure
5 See Section 4 of the Act which speaks to the conversion of existing tenancies to statutory leases.
Page 8 of 13
from the established common law that this condition precedent must exist in order for
the tenant’s right to exercise the option to renew to arise.
[14] The issue therefore is one as framed for deliberation and which will be determinative of
the matters at dispute between the parties. To answer that question, one must look at
the breaches complained of by the landlord. One of them is a breach of the covenant
with respect to user. The other is a breach of the covenant against subletting. In the
original lease, breaches of both of these covenants vest in the landlord a right to forfeit
and re-enter the demised premises.
[15] The question is, does this right survive in the face of the provisions of Section 5 of the
Act? Section 5(1) mandates that “The terms and conditions of an existing tenancy
converted into a statutory lease by section 4 shall, subject to this section be
incorporated in the statutory lease as terms and conditions in such lease”. Subsection
(2) provides that upon such conversion, “any term or condition of such tenancy
inconsistent with the terms and conditions of a statutory lease set out in this section …
shall be void to the extent of the inconsistency”.
[16] With respect to the alleged breach under consideration, assigning and or subletting,
Subsection (8) provides that “A tenant has the right to assign or sublet with the
consent of the landlord whose consent shall not be unreasonably withheld, but the
rent payable by any subtenant shall not exceed the rent payable by the tenant to the
landlord under this Act.” Let me state quite clearly that the proviso to this subsection,
concerning whether the rents received by the tenant exceed those levied under the
head lease arose on the pleaded case put forward as part of CGAS’s Defence and
Counter Claim6.
6 Para. 2.16. The Defendant puts the Claimant to strict proof that the commercial tenants…were being charged less
than $120.00 per month charged by the Statutory Lease.
Page 9 of 13
[17] In the Reply and Defence to Counter Claim the Claimant makes a positive admission as
to the contents of paragraph 2.16 but gave no further details.7 All I can say is that this
part of Subsection 8 has been violated.
[18] My interpretation of Section 5(8) is that it creates a positive right exercisable by the
tenant, to inter alia sublet, which is different from the prohibition contained in the head
lease. In the head lease, the tenant covenants not to assign or sublet without first
obtaining the landlord’s consent. The landlord’s consent contains no strictures as to its
grant. By the operation of section 5(2), it is therefore clear that the provisions which are
applicable are those contained by incorporation of section 5(8).
[19] Two issues emerge from this, one these facts and one on the law. The factual issue is did
KK seek CGAS’s or its predecessor in title’s permission for subletting the premises?
There is no evidence that there was such. That was to his detriment. The right to sublet
is predicated upon obtaining the landlord’s consent in the first instance, which must be
sought before it can be given. In fact, Section 108 of the Act outlines the procedure for
the exercise of the tenant’s right to assign or in this case sublet. KK has provided not
factual basis or evidence that this procedure was followed. A subletting otherwise than
in accordance with the Section 5(8) Act disallows the enforcement of the statutory right
and constitutes a breach of the statutory provisions surrounding the exercise of the
right.
[20] My learned sister Jones J had almost similar circumstances arising for her consideration
in the MACKAY CASE9. Should I be allowed, I categorically state that I agree with the
analysis and conclusions arrived at in that case and wish to associate myself
unreservedly with them. According to the learned judge, in converting an existing
tenancy into a statutory lease for a fixed period, Parliament could not have intended to
7 Paragraph 7 of the Reply admits paragraphs 2.1 to 2.9 of the Defence. 8 Section 10 (1) A tenant who wishes to exercise his right pursuant to section 5(8) shall serve on the landlord an
application in writing for the landlord’s consent. 9 CV 2009-01602 MACKAY & ORS v JESSE HENDERSON COMPANY LIMITED.
Page 10 of 13
disable the landlord from determining the lease within the fixed period or that the right
of the landlord to terminate the lease was exercisable only in situations where there
was a non-payment of rent.10 Similarly there is no legislative bar or conditions to be
satisfied under the Act to curtail the exercise the landlord’s right to forfeit and re enter
the premises. In fact according to Jones J at paragraphs 33 and 34 state:
… it would seem to me that with respect to tenancies under the Act by
expressly incorporating the terms and conditions of the existing
tenancy into the statutory lease, but not, save with respect to arrears
of rent, limiting the landlord’s right to possession, the intention of
Parliament could only have been to provide for security of tenure for
those tenancies subject to the Act only insofar as it relates to the
length of the tenancy, remedies available to the landlord for the non-
payment of rent and affording the tenant the opportunity of
purchasing the land at a reduced price. Save as to these aspects it
would seem that Parliament intended that all the terms and
conditions of the contractual tenancy to continue once not
inconsistent with the Act.
…in so far as the …(original) lease allows for re-entry upon a breach of
a covenant … this term or condition is not inconsistent with the terms
and conditions of a statutory lease established by the Act…. the
ability of the landlord to re-enter the premises upon a breach or non
observance of lessee’s covenants … not being inconsistent with the
provisions of the Act, has been incorporated into the statutory lease.
[21] WHAT ARE THE REMEDIES AVAILABLE TO THE LANDLORD FOR BREACH OF THE
STATUTORY PROVISONS WITH RESPECT TO THE RIGHT TO SUBLET?
1010
See para. 31 op. cit.
Page 11 of 13
Interestingly enough, the only redress given under the Act to the landlord lies in the
area of non-payment of rent. Does this mean that in the face of the non observance of
any other terms, statutorily incorporated or otherwise valid by the tenant, that the
landlord is powerless to rely on the right to forfeit the lease and re-enter the premises?
[22] This issue confronted Jones J in the MACKAY CASE as well. Again, I share the learned
Judge’s view that “… by virtue of section 5 of the Act “ the right of forfeiture and re
entry for breaches or non observance of tenant’s covenants or in this case non
observance of the provisions of the Act has been incorporated into the statutory lease
and is available to the landlord. The effect of this therefore is that KK’s subletting
without CGAS’s or its predecessor in title’s consent to entitle CGAS to re-enter and take
possession of the demised premises.
[23] WAIVER OF THE BREACH
Mr Dass in his submissions raised the issue that Marlay and Company and by extension
CGAS waived the breach concerning subletting since they continued to accept rents.
Again, this was dealt with by Jones J. Relying on a passage from the noted text Hill and
Redman, I can safely say that this point is a non starter. The authors state as follows “…
where a breach of covenant (or in this case a non observance of the provisions of the
Act) which gives rise to the right of re-entry is a continuing breach there is a continually
recurring cause of forfeiture, and the receipt of rent … is only a waiver of the forfeiture
incurred up to the date when the rent was due… and the lessor is not precluded from
taking advantage of the continuing breach since that date…”. I do not think that I need
say more.
[24] THE OPTION TO RENEW AND WHEN EXERCISABLE
An option to renew can only be exercisable by a tenant in good standing. In other
words, there must be a valid lease in existence. This was clearly not the case here. The
Page 12 of 13
lease would have been voidable at the instance of the landlord who could choose to
terminate the relationship as CGAS did in this case.
[25] CONCLUSION
Whether CGAS received the notice of renewal from KK is therefore immaterial since at
that date, KK was in violation of section 5(8) of the Act giving rise to CGAS’s right to
forfeit the lease and re-enter the premises. Mr Dass made mention of section 5(4) of the
Act to limit the landlord’s right to demolish any structures on the land. This is not
applicable to the case at bar. The section specifically deals with non-payment or arrears
of rent and the role of the Land Commission.
[26] On the claim I find that KK’s lease could not have been validly renewed since he was in
violation of Section 5(8) of the Act. The lease was voidable at that time and the landlord
exercised his right to avoid it outright. The issue of the option to purchase is a non issue
in this matter. CGAS as landlord was within its right to forfeit and re-enter the demised
premises.
[27] THE COUNTER CLAIM
There was a specific plea in the Defence and Counter claim speaking to the fact that KK’s
subletting was in breach of the statutory lease as KK did so without CGAS’s or its
predecessor’s consent. This entitled CGAS to forfeit and re enter the demised premises.
In so doing, CGAS incurred and therefore claimed the expenses associated with securing
the premises after re-entry and the demolition of the buildings on the premises. I can
see no bar to recovering these expenses from KK once properly vouched and accounted
for. In addition on the basis of the admitted breach I find that KK charged the tenants
sums for rent in excess of that paid under the Statutory Lease. This would attract
liability in damages for breach of this part of Subsection 8.
Page 13 of 13
[28] In the premises, I can come to no other conclusion but to dismiss the claim as filed and
to find for the defendant on the counter claim with damages to be assessed by a Master
together with costs to be prescribed.
IT IS NOW ORDERED AS FOLLOWS:
A. THE CLAIM FILED 16TH SEPTEMBER 2011
1. That the claim filed by the Claimant on 16th September 2011 be and is hereby
dismissed.
2. That the Claimant do pay the Defendant’s costs prescribed in the sum of
$14,000.00.
B. THE COUNTER CLAIM FILED ON 21st OCTOBER 2011
3. That there be judgment for the Defendant on the Counterclaim.
4. That the damages be assessed by a Master in Chambers.
5. That the costs of the counterclaim be paid by the Claimant to the Defendant on
the prescribed basis upon the outcome of the assessment of damages.
Dated this 30th day of June 2014.
/s/ CHARMAINE PEMBERTON
HIGH COURT JUDGE
Recommended