Patel v Native Land Trust Board [1976] FJCA 6; Civil Appeal No 40 of 1976 (23 November 1976)

IN THE COURT OF APPEAL, FIJI
CIVIL JURISDICTION

CIVIL APPEAL NO. 40 OF 1976

BETWEEN:

MAGANLAL RAMABHAI PATEL
s/o Ramabhai Somabhai Patel
Appellant

AND:

THE NATIVE LAND TRUST BOARD
Respondent

R.D. Patel for the Appellant
Aminiasi Kato for the Respondent

Date of Hearing: 3rd November, 1976
Date of Judgment: 23rd November, 1976

JUDGMENT

SPRING JA.

This is an appeal from the judgment of the Supreme Court of Fiji given at Lautoka on the 16th day of June, 1976. The appellant was the successful plaintiff in the Court below and he is appealing to this Court for additional relief.

The Notice of Appeal contained five grounds of appeal but at the hearing before this Court the appellant limited his appeal to two matters. Firstly, that the learned trial judge erred in failing to make a declaration that the appellant was the lawful lessee of the respondent in respect of certain lands and secondly, that the award of damages for trespass was too low.

The facts briefly are as follows. On 25th of September,1940 the respondent granted to the appellant's father Native Lease No. 6713 in respect of certain lands at Rakiraki known as "Nadovi" containing 4 acres 1 rood 26 perches for a term of 30 years. The lease subsequently became vested in the appellant as administrator of his deceased father's estate; the lease expired by effluxion of time on the 24th September 1970, and during the term of the said lease certain sub-tenancies had been created without the consent of the respondent Board; on expiry of the lease there were seven subtenants in and upon the land. On 18th January, 1972 the appellant was informed through his solicitor that the respondent had granted to the appellant a lease of the lands "Nadovi" for a term of 10 years from 1st July, 1971 at a rental of $219.80 per annum. The Letter of Approval dated 20th April, 1972 stated that the lease was an agricultural lease; that it was subject to the provisions of the Native Land (Leases and Licences) Regulations; the Agricultural Landlord and Tenant Ordinance and certain conditions printed on the back thereof two of which read as follows:

"4. The lessee may not transfer, sublet, mortgage or assign the lease without the written consent of the lessor.

17. In the event of a breach or of non-fulfilment of any condition the lessor may re-enter upon the land or may, at the discretion of the Board, impose a penal rent in respect of any such breach."

The learned trial judge found that the appellant accepted the lease on these terms; and it was acknowledged that when the respondent issued the Letter of Approval it had full knowledge of the existence of, and occupation by the said seven subtenants. Certain correspondence passed between the parties in 1972 over the breach of the lease by the appellant in subletting portions of his land without the consent of the respondent Board. On the 9th May, 1973 the respondent sent to the appellant a Notice to Quit based on a breach of Section 36(1)(b) of the Agricultural Landlord and Tenant Ordinance in subletting without the consent of the respondent and called upon him to deliver up vacant possession of the lands. It is convenient to set out the actual Notice.

"WHEREAS you are the tenant of Native Lease 6713 known as NADOVI in the tikina of Rakiraki and comprising 4 acres 1 rood 26 perches.

AND WHEREAS Section 36(1)(b) of the Agricultural Landlord and Tenant Ordinance forbids you to alienate or deal with the land comprised in your lease whether by sale, transfer, sublease or in any other manner whatsoever without the consent of the Board as landlord is first had and obtained.

AND WHEREAS you have not complied with the regulation referred to above in that you have subletted the land comprised in your lease without the prior consent of the Board.

YOU ARE THEREFORE HEREBY NOTIFIED that your tenancy will be terminated within 30 days of receipt of this notice as specified under the above quoted Ordinance.

You may subject to the payment of $470.45 as arrears of rental calculated to 30th June, 1973 remove all improvements on the land.

YOU ARE FURTHER NOTIFIED that you are to vacate and hand over vacant possession of the said land on expiry of that date."

The Notice was served on the 29th May, 1973 and purported to terminate the respondent's tenancy within 30 days thereof namely 28th June, 1973. On 30th October, 1973 the respondent issued a further notice to the appellant purporting to terminate his lease. On 23rd October, 1975 the respondent by its servants and/or contractors entered upon the lands with a bulldozer and a party of 15 workmen and commenced excavation and other works until they stopped on the 1st November, 1975.

The learned trial judge found that the appellant was in breach of his lease since the issue of the Letter of Approval on the 20th April 1972, in that he had failed to obtain the consent of the respondent Board to the sub-tenancies with the exception of one Dhanilal for reasons which appear in the judgment, but which for our purposes are unimportant. Accordingly the learned judge stated that he was not prepared to make a declaration that the appellant was the lawful lessee of the land.

We turn now to a consideration of the first ground of appeal, that a declaration should issue declaring the appellant the lawful lessee of the land. Mr. Patel for the appellant argued that even if the appellant was in breach of the terms of the new lease granted in 1972 he was still entitled to the declaration sought, upon the grounds that the respondent knew of the breach and that it had either acquiesced in the breach, or waived it. The appellant claimed that the sub-letting occurred during the currency of lease No.6713 and that the respondent Board was fully aware of the position and had acquiesced therein; further that the breach of covenant against subletting is a "once and for all" breach and is not a continuing one; that when lease No. 6713 expired in 1970 the breaches of the lease by the appellant expired with it; that after the issue of the new lease in 1972 there was no evidence, either that any of the persons on the land had paid rent to the appellant, or that the appellant had sublet any new areas, and accordingly it had not been proved that persons on the land were subtenants of the appellant.

Mr. Patel, further, submitted that if the appellant had sublet portion of his land in breach of the terms of his new lease, the respondent, with full knowledge thereof, accepted rent from the appellant and had thereby waived the breach of sub-letting without the written consent of the respondent Board. Accordingly the appellant submitted he was entitled to the declaration claimed.

Mr. Kato submitted that the lease granted in 1972 was a new lease; that the appellant was in breach of its terms in subletting portions of his land without the written consent of the respondent Board and that the learned trial judge was correct in refusing the declaration. Further, that the payment of rent by the appellant did not amount to a waiver of the breach of condition against subletting without consent, in that the respondent believed that its notice sent on 9th May, 1973 validly terminated the lease and that the respondent had accepted rent up to the date of termination only: that upon the payment of rent being made and on the expiry of the lease the appellant was entitled to remove his improvements from the land. Mr. Kato further submitted that the respondent Board intended to terminate the appellant's tenancy; that the rent accepted by the Board in September, 1973 was accepted by mistake, and acceptance thereof should not be treated as recognising the continuance of the tenancy.

We turn now to consider the submissions. The lease granted in 1972 was a new lease and not a renewal of lease No. 6713 - the agreed facts placed before the lower Court clearly say so - although the land demised in the new lease was the same land as comprised in the old lease No. 6713. The new lease was granted subject to the express condition that the lessee would not sublet without the prior written consent of the Board. Further, Section 45 of the Agricultural Landlord and Tenant Ordinance as amended in 1967 prohibited subletting and we set out the provision of this Ordinance:

"45. (1) Subject to the provisions of the next succeeding sub-section, the sub-letting of the whole or part of an agricultural holding after the commencement of this Ordinance is prohibited.

(2) Notwithstanding the provisions of the last preceding sub-section, the tribunal may, upon application being made to it by a tenant, permit the subletting of the whole or any part of an agricultural holding in a case where the tenant is, by reason of the state of his health or any other special circumstance, unable to carry out his obligations under the provisions of his contract of tenancy. Any such permission shall be subject to the prior written consent of the landlord, which shall not be unreasonably withheld, and shall remain in force until such time as the tenant is able to carry out his obligations under the provisions of his contract of tenancy."

Section 56(1)(g) of the same Ordinance provides:

"56. (1) Any landlord who -

.....................................

(g) sub-lets the whole or part of an agricultural holding made after the commencement of this Ordinance, otherwise than in accordance with the provisions of subsection (2) of section 45 of this Ordinance;"

(and Section 56 continues):

"... shall be guilty of an offence and shall be liable on conviction to a fine not exceeding Three Hundred Pounds or to imprisonment for a term not exceeding six months or to both such fine and imprisonment ....."

The definition section of the Ordinance makes it clear that the word "landlord" used in Section 56(1) refers to a person, for the time being, entitled to the rents and profits of the agricultural land, in this case the appellant. The Native Land (Leases and Licences) Regulations Cap. 115 contains a provision against subletting without the prior written consent of the respondent and reads as follows:

"34. All leases shall be subject to the following conditions in so far as they are applicable to the circumstances of any case:-

(f) that the lessee shall not alienate or deal with the demised land or any part thereof, whether by sale, transfer or sublease or in any other manner whatsoever without the consent in writing of the lessor first had and obtained."

and Regulation 34(i) contains a right to re-enter:

"34. (i) that in the event of any breach by the lessee of any covenant or condition in the lease the lessor may enter upon and take possession of the demised land or may at the discretion of the Board impose a penal rent in respect of such breach;"

In addition the provisions of Section 12 of the Native Land Trust Ordinance Cap. 115 which apply to this lease, render any sub-tenancy granted in breach thereof null and void. It is to be noted that Section 58(2) of the Agricultural Landlord and Tenant Ordinance states that the provisions of Section 12 of the Native Land Trust Ordinance and of all Regulations made thereunder shall be subject to the provisions of the Agricultural Landlord and Tenant Ordinance.

In our view it is futile for the appellant to suggest that the persons on his land were not subtenants on the ground that no proof had been led in the lower Court that they had paid rent to the appellant (although it would appear from the record that this argument was not put precisely in this manner before the learned judge in the lower Court). From a perusal of the correspondence which passed between the parties in 1972, and contained in the record, it is obvious that the appellant was fully aware of the allegations of subletting made against him by the respondent in respect of his lease and, despite his avowed intentions of regularising the position or taking steps to evict them, the appellant took, no steps whatever either, to apply for, or to obtain, the consent of the respondent to the subletting, or take eviction proceedings against his subtenants. In passing, we note that the statement of the agreed facts, signed by counsel, clearly states that:

"the plaintiff and his subtenants continued in possession of the land and are still in possession thereof."

We are satisfied, therefore, on a perusal of the whole of the evidence taken before the Court below that the lease granted to the appellant in the Letter of Approval dated 20.4.72 was a new lease. Paragraph 4 of the conditions thereof precluded subletting without the prior written consent of the respondent; further, the various statutory provisions already mentioned were applicable to the lease and rendered any subletting without the prior written consent of the landlord unlawful.

We believe the learned judge was correct when he concluded that the events prior to the issue of the new lease were irrelevant to the issues he had to determine.

It cannot be said that the respondent, in our view, acquiesced in the subletting as the whole of the correspondence placed before the learned judge in the Court below dealing with the new lease clearly shows the concern of the respondent at the appellant's subletting and called upon him to regularise the position in accordance with the law. In Halsbury's Laws of England 3^rd Edition p.671 para. 1396 the learned authors say:

"A landlord does not waive the forfeiture by merely standing by and seeing it incurred ... there must be some positive act of waiver."

In our view the respondent had not by its conduct waived the breach of subletting as there was no positive act on the part of the respondent which clearly showed a waiver by the respondent of the condition precluding subletting without consent.

The learned judge in the Court below found that the appellant was not merely in breach of the conditions of his lease, but was also acting in contravention of the law in subletting part of his land without the consent of the respondent. In coming to this determination the learned judge found that the notice dated 9th May, 1973 was, for the reasons set out in his judgment, not a valid and effective notice to terminate the lease and accordingly it was unnecessary for him to consider the question whether the respondent waived the notice in accepting rent up to 30th June, 1973.

We turn now to the question whether the acceptance of rent by the respondent constituted a waiver of the covenant against subletting contained in the Letter of Approval. It is acknowledged that arrears of rental amounting to $470.45 were paid to the respondent in September, 1973. It is necessary, however, to examine the circumstances surrounding this payment of rent to ascertain, if in law, it amounted to a waiver of the appellant's breaches of his lease as submitted by the appellant. The Notice given on the 9th May, 1973 was given pursuant to Section 36(1) (b) of the Agricultural Landlord and Tenant Ordinance which states:

"36. (1) A landlord may terminate his contract of tenancy and may recover possession of an agricultural holding –

(a) ................................

(b) by one month's written notice to quit -

(i) where the tenant sublets, assigns, or subdivides such holding ....."

It is apparent from the Notice that the appellant's tenancy was to be terminated within 30 days of receiving the Notice (not one month as specified in 36(1)(b)). The Notice was received on 29th May, 1973 and the 30 days would have expired on the 28th June, 1973. The Notice goes on and says that if rent is paid to the 30th June, 1973 the appellant can remove his improvements. The final paragraph to the Notice requires the appellant to vacate the land on the expiry of the 30th June, 1973.

As stated earlier the learned judge in the Court below found that the notice was not a valid and effective notice to terminate the appellant's tenancy. The rental arrears mentioned in the Notice were paid to the respondent by the appellant's solicitor, (subject to certain conditions) in September, 1973. The question that is posed - does the acceptance of rent by the respondent with the knowledge of the appellant's breach of subletting waive that breach. This question was not decided by the learned Judge in the Court below and we are now asked to express an opinion hereon.

Counsel for the appellant cited several authorities in respect of his argument that the acceptance of rent by the respondent who at the time had knowledge of the appellant's subletting is deemed in law to have waived the breach.

In Central Estates (Belgravia) Ltd. v.Woolgar (No.2) [1972] EWCA Civ 4; [1972] 3 All ER 610 arrangements made not to demand or accept rent had miscarried; a demand was sent and the rent accepted by the landlord's agents. The question that arose for decision was whether the test was actual intention in fact, or the effect produced in law. It was held that if there was an act done by the landlord which recognised the existence of the lease after having knowledge of the ground of forfeiture the intentions of the parties were irrelevant. Further, it was no defence that the managing agents' clerk who accepted the rent did not know of the tenant's breach of covenant and the decision to forfeit, because the managing agents and the clerk had in the circumstances to be regarded as one Buckley LJ. at p.616 said:

"If the landlord by word or deed manifests to the tenant by an unequivocal act a concluded decision to elect in a particular manner, he will be bound by such an election. If he chooses to do something such as demanding or receiving rent which, can only be done consistently with the existence of a certain state of affairs, namely, the continuance of the lease or tenancy in operation, he cannot thereafter be heard to say that that state of affairs did not then exist. If at the time of the act he had a right to elect whether to forfeit the lease or tenancy or to affirm it, his act will unequivocally demonstrate that he has decided to affirm it. He cannot contradict this by saying that his act was without prejudice to his right of election continuing or anything to that effect. In this respect his act speaks louder than his words, because the act is unequivocal; it can only be explained on the basis that he has exercised his right to elect. The motive or intention of the landlord, on the one hand, and the understanding of the tenant, on the other, are equally irrelevant to the quality of the act."

We conclude, therefore, that on the facts of this case the acceptance of the rent by the respondent Board, with knowledge of the subletting by the appellant in breach of his lease, would constitute a waiver of the breach of the condition endorsed on the back of lease and shown as condition (No.4) thereon.

However, in our view that is not the end of the matter. The land "Nadovi" which was leased to the appellant was an agricultural holding and subject to the provisions of the agricultural Landlord and Tenant Ordinance. In Section 45(1) of this Ordinance there is the express provision against subletting; and Section 56(1)(g) makes it an offence to sublet the whole or part of an agricultural holding otherwise than in accordance with the provisions of Section 45(2). The appellant has not, on the agreed facts, obtained the respondent Board's consent to sublet, nor has it complied with Section 45(2) of the said Ordinance. Therefore, the appellant is in breach of the law in subletting part of his land without complying with section 45(2) of the Ordinance and the acceptance of rent as outlined above does not avail him in his failure to comply with the provisions of section 45(1) and (2) of the Agricultural Landlord Tenant Ordinance a breach of which renders him liable to legal sanctions.

The learned judge, therefore, in our view was correct when he stated in his judgment that he was not prepared to mare a declaration that the respondent was the lawful lessee of the land "Nadovi" and we uphold his decision to that effect.

The second ground of appeal claims that the award of damages was too low. In the Court below the validity of the notices dated 9th May, 1973 and 30th October, 1973 was attacked by the appellant. The learned judge found that both notices were defective in law and failed to terminate the appellant's lease; accordingly the appellant was not in illegal possession of his land when re-entry by the respondent occurred on 23rd October, 1975. Further, it was found by the Court below that the re-entry insofar as it was based upon either or both of the notices referred to was unlawful and amounted to trespass.

Counsel for the appellant urged upon the Court that the learned judge should have awarded a sum for exemplary damages to show the Court's displeasure, and to punish the respondent for its action in entering upon the land of the appellant and carrying out the works referred to in the evidence.

It is clear from an examination of the authorities that exemplary damages represent solely, punishment of a defendant and are not connected with the separate question of what compensation will indemnify a plaintiff for the harm done.

Exemplary damages consist of a fine imposed on a defendant; they are measured by assessing not what a plaintiff ought to receive, but what a defendant ought to pay. On the other hand aggravated damages represent in addition to the proved pecuniary loss additional compensation for the injury to the feelings or dignity of a plaintiff where his sense of injury is increased or exacerbated by the manner in which or motive for which a defendant did the acts complained of.

In this case the learned judge correctly weighed the evidence carefully to ascertain whether an award of exemplary damages was called for; he found that the respondent Board had taken the law into its own hands in entering upon the appellant's land and carrying out the works and damage complained of.

On the other hand the appellant in sub-letting his land had acted in contravention of Section 45(1) of the Agricultural Landlord and Tenant Ordinance and apparently intended to remain contumacious on the matter of applying for and obtaining the respondent Board's consent to the subletting; further, he found that the respondent believed that when it re-entered the land it did so in the mistaken, but, nevertheless honest belief, that it had the right to do so.

The learned judge dealt fully with the question whether exemplary damages should be awarded and decided correctly in our view that on the facts of this case such an award was not merited. The learned judge considered whether aggravated damages should be awarded and in considering this matter took into account not only the motives and conduct of the respondent Board, but also the distress and anxiety suffered by appellant. The statement of Lord Devlin in Rookes v. Barnard [1964] UKHL 1; [1964] 1 All E.R. 367 at p.4 and quoted in his Judgment is as follows:

"Moreover, it is very well established that in cases where the damages are at large the jury (or the judge if the award is left to him) can take into account the motives and conduct of the defendant where they aggravate the injury done to the plaintiff. There may be malevolence or spite or the manner of committing the wrong may be such as to injure the plaintiff’s proper feelings of dignity and pride."

We regard the above statement as opposite to the question of damages which the learned judge had to decide. The award of $3,000 to the appellant included an element of aggravated damages.

The question for our determination is whether this award, including an element of aggravated damages, is too low. We are mindful of the principle that this Court will interfere on a matter of quantum of damages if it is satisfied that the learned judge in the Court below has acted upon 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.

In our view the learned judge has fully considered the evidence placed before him on the question of damages, and in this regard he found the appellant had given the Court little assistance in quantifying his loss.

Accordingly we have come to the conclusion that the amount awarded was a reasonable assessment by a judge who has had considerable experience in Fiji in such matters, both at the Bar and on the Bench, and we would not on the evidence placed before him, be justified in interfering with the award. Accordingly the appeal is dismissed with costs to be taxed if not agreed.

Trevor Gould
Vice President

C. C. Marsack
Judge of. Appeal

B.C. Spring
Judge of Appeal