Bowry v Hirst [2012] FJHC 1131; HBV348.2011 (24 May 2012)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC 348 of 2011

IN THE MATTER of an Application Pursuant to Section 105 of Part IX of the Property Law Act [Cap 130] for an Order for relief against forfeiture and Application under Section 169 of Part XXIV of the Land Transfer Act Cap 131 for an Order for Vacant Possession.

BETWEEN:

VINCENT W. BOWRY and ROSEMARY BOWRY both of 20
Bhimji Street, Tamavua, Suva business persons and owners of Sails Restaurant
PLAINTIFF/APPLICANT/RESPONDENT

AND:

MARK HIRST of Lot 4 Uduya Heights Road, Uduya Point, Suva,
Commodore of the Royal Suva Yacht Club
1st DEFENDANT/RESPONDENT/APPLICANT

AND:

ROYAL SUVA YACHT CLUB a Club founded in 1932 and duly
Registered at Royal Suva Yacht Club, Club House, Korovou,
GPO Box 335 Suva, Fiji
2nd DEFENDANT/RESPONDENT/APPLICANT

Before: Susantha N Balapatabendi J
Counsel: Mr A V Rayawa for Plaintiff/Applicant/Respondent
Mr C N Cameron for the 1st and 2nd Defendants/Respondents/Applicants

Date of Hearing: 13 April 2012
Date of Decision: 24 May 2012

DECISION

This matter is in relation to a termination of the Restaurant operating Lease Agreement entered into between Royal Suva Yacht Club (hereinafter mentioned as lessor) and Vincent W. Bowry & Rosemary Bowry (hereinafter mentioned as lessee) regarding the "Sails Restaurant" at the Royal Suva Yacht Club.

Lessor filed Summons in terms of Section 169 of the Land Transfer Act for vacant possession whereas the lessee filed Summons in terms of Section 105 of the Property Law Act for relief against the forfeiture after the decision of Justice Calanchini on the Interlocutory Injunctions. Both Summons, for vacant possession and reliefs against forfeiture are addressed in my Decision.

The Background Facts

Ex-parte Notice of Motion dated 10.11.2011 was filed by the Plaintiff for interim injunction against the lessor. The Application was made in terms of Order 29 of the High Court Rules which was supported by the Affidavit of Rosemary Bowry sworn on 10.11.2011 and the Supplementary Affidavit too was filed by Rosemary Bowry sworn on 18.11.2011.
The interim injunction sought by the Plaintiff was granted by Court on 16.11.2011.

The Orders made by the Court are as follows:-

1. THAT until the decision in respect of the application for an interlocutory injunction is handed down, - Orders 1 and 2 of 16th November 2011, remain in force on condition that, the rental payment of $400.00 is paid as when it falls due.
   
2. THAT nothing in this order is to be taken as preventing the respondents from exercising any of their rights under the assigned Lease Agreement.
   
3. THAT costs reserved.
   

Both parties thereafter appeared in court inter-partes on 24.11.2011 and got the direction from the court to file further Affidavits and inter-partes hearing was listed for 4.09.2011 subject to the extension of the interim injunction issued by court on ex- parte motion, until 19.12.2011.

Statement of Defense supported by the Affidavit of Mark Hirst was tendered to Court and the reply to the Statement of Defense and the defense to counter claim was also filed, supported by an Affidavit of Rosemary Bowry in reply to Affidavit of Mark Hirst sworn on 25.11.2011.
Thereafter both parties filed detailed Written Submissions and made Oral Submissions on the issue of injunction.

In the meantime, the lessor has sent a Notice of Termination of the Lease Agreement by giving two months notice which expired on 20 February 2012, in terms of the termination clause in the Lease Agreement.

Lessor after the receipt of the two months notice, filed Summons for interim injunction against the said notice, supported by an Affidavit sworn by Rosemary Bowry on 16 February 2012.

Lessor has filed Summons after the expiry of two months period for vacant possession supported by an Affidavit sworn by Mark Hirst on 20 February 2012.

However, when the case was mentioned on 20.02.2012 before me, I informed both parties that the decision of the interim injunction already inexistence will be delivered on 24.02.2011 and to pursue the respective Summons after the decision of Justice Calanchini.

On 24.02.2012 Justice Calanchini delivered the decision and made following orders inter alia:

"In my judgment the appropriate course of action in the present case is to make an order that the interim injunctions granted on 16 November 2011 are to be discharged seven days from the date of this decision. This will give the Plaintiffs time to apply for relief against forfeiture. The costs of this application are to be costs in the cause. Orders are made accordingly."

The inter partes motion on two months notice to quit and for vacant possession by the lessor was taken up in Court and directed both parties to file Affidavits on this issue.

Having considered the decision of Justice Calanchini, Counsel for the lessee informed Court that he does not wish to pursue the Summons for interim injunction filed against two months notice and wish to file Summons for relief against the forfeiture within seven days from the decision.

Thereafter, lessee filed Summons for relief against the forfeiture, dated 14 March 2012 supported by an Affidavit of Rosemary Bowry sworn on 1 March 2012.

The lessor filed an Application for the Summons for possession, supported by Affidavit on Mark Hirst.

Thereafter Affidavit in Reply to the Affidavit of Rosemary Bowry was tendered to Court.

Further Affidavit in reply to Affidavit of Romina Anjali foreman sworn on 20 March 2012 was tendered to Court by Rosemary Bowry sworn on 5.4.2012.

Hearing of these two Summons was listed for 13.4.2012 and on that date, both parties filed the detailed Submissions on both Applications and made Oral Submissions as well.

Submissions of the Lessee on Summons for Relief against Forfeiture and Summons for Possession Filed by the lessor.

The submissions of the lessee in relation to the relief against forfeiture was mainly on the notice to quit issued by the lessor with immediate vacant possession and not in consideration of the compliance of two months notice to quit issued by the lessor in terms of termination clause in the Lease Agreement.

Counsel for the lessee argues that relief against the forfeiture was based on the decision of Justice Calanchini on Section 105 of the Property Law Act.

It is noted that Justice Calanchini, as per the decision dated 24 February 2012 never directed lessee to take steps for relief against the forfeiture but mentioned as a remedy available to the lessee and granted seven days leave to take steps if he wishes to do so.

It is important to emphasis that Justice Calanchini, has not taken into consideration of the two month notice for vacant position dispatched by the lessor in his decision as Summons was filed on 20.02.2012.

The fact that the issuance of two months notice was not within the knowledge of Justice Calanchini, at the time of delivering of the decision, was evident in the following paragraphs

The position of the Second Defendant on this point was clearly stated paragraph 16 of the Affidavit sworn by the First Defendant.

"16 The General Committee terminated any tenancy that the Plaintiff thought that had for non-payment of rent and in reliance on section 91 (c) of the Property Law Act, without reliance on the lease with Diane or its terms and conditions, as alleged by the Plaintiffs and regardless of Rosemary Bowry's unlawful behavior or the general poor performance of the Plaintiffs restaurant."

Although the language of the paragraph may be described as extreme, it does indicate that the Second Defendant has relied on the provisions of the Property Law Act Cap 130 to terminate the agreement without giving two months notice.

It should be noted that the only clause in the agreement that deals with the termination of the lease is the clause headed termination. That clause contains an option to determine the lease that is available to both the Landlord and the Tenant and is subject only to the condition that two months notice be given in writing."

The relief against the forfeiture is remedy available to the lessee in limited circumstances. Having considered the facts and circumstances of this case and especially after the compliance of two months notice requirement by the lessor with effect from 30.12.2011, which expired on 20.02.2012 I am not inclined to accept that the lessee is now entitled for relief against the forfeiture.

It is abundantly clear from the Lease Agreement that the agreement could only be terminated prior to its fixed term by two months notice to other party. It is important to emphasis that the party terminating the agreement after the due compliance of two months requirement does not have to give reason for the purpose of termination.

The initial termination by the lessor was on a different basis. Subsequent compliance of the two months notice requirement does not give rise to lessee to remain in position and further to seek relief against the forfeiture.

In the Affidavits of Rosemary Bowry (lessee) sworn on 10.11.2011 as paragraph 16 deposed as follows:-

Para 11 – "THAT in page two of the contract, the parties to the contract may terminate the contract at any time by giving two months' notice in writing.

Para 16 – "THAT my husband and I have not received a two months' notice in writing prior to termination of the agreement provided for the contract".

Further, the lessees in their Written Submissions relied upon the Doctrine of estoppel against the lessor in relation to the notice of two months requirement to terminate the Restaurant operating Lease Agreement.

The crux of the argument advanced by the lessee on the operation of the estoppel on the following premises:-

• The first termination was based on letter of 07.11.2011 was in terms of Property Law Act whereas the subsequent two months notice was in terms of Restaurant operating Lease Agreement.
  
• Failure on the part of the lessor to take steps in terms of the lease agreement and subsequent reliance of the same agreement and then issue the two months notice comes within the ambit of the Doctrine of estoppel against the lessor.
  
• Second termination letter was bad in Law as the judgment on the first termination by the lessor was pending before the Court.
  
• The relief sought by the lessor initially was under one process whereas the second notice was under a different process and therefore lessor is estopped in taking up the subsequent legal position.
  

In order to support the above position the lessee in the Written Submission relied on the case of Reserve Bank of Fiji v Gallagher [226] FKCA 37.

The lessee in their Written Submissions quoted on a paragraph of the Reserve Bank Fiji case where the Fiji Court of Appeal relying on the Australian case "Port of Melbourne Authority v. Anshun Pty Ltd. [1981] HCA 45; (1981), 147 CLR 589, 602-3. The joint judgment of Gibbs, CH, Mason and Aickin JJ expressed the principle thus:"

"In this situation we would prefer to say that there will be no estoppels unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiffs' claim, and its subject matter it would be expected that the defendant would raised the defence and thereby enabale to relevant issues to be determined in the one proceeding. In this respect, we need to recall that there are a variety of circumstances, some referred to in the earlier cases why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings e.g. expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few. See the illustrations, given in Cromwell v County of Sac. (1876), 94 US (24 LW Ed at p 199).

"It has generally been accepted that a party will be stopped from bringing an action which, if it succeeds will result in a judgment which conflicts with an earlier judgment."

In consideration of the above para in the Written Submissions of the lessee and especially the case of the Reserve Bank of Fiji v Gallagher, I am of the view that the estoppel does not operate against the lessor after compliance with two months requirement as stipulated in the Restaurant Operating Lease Agreement.

Furthermore, in the initial interim injunction Order made by Court did not prevent lessor exercising his right to terminate in terms of the assigned Lease Agreement.In fact the court made the following Order inter alia.

"That nothing in this Order is to be taken as preventing the Respondents from exercising any of their rights under the assigned Lease Agreement."

Hence, no party is estopped in taking any steps in consequent to an Order made by the Court and Law of estoppel does not operate against him.

I have also perused the Affidavits filed by the lessee to ascertain the grounds which lessee has deposed to remain in possession after show cause was issued in terms of Section 169 of Land Transfer Act.

Reasons in summary are as follows:-

A value of money paid to previous lessee for assigned Lease Agreement and the investment made for operational purposes are life savings of retirement, opportunity be given to sell off the value of equipments to a new lessee, unfair rules of the club, initial re-entry by the lessor was stopped by the Court and initial denial of the validity of the Lease Agreement and subsequent acceptance.

It is my considered view that the grounds stated above are not legally acceptable grounds to remain in the premises in terms of the Land Transfer Act.

Having considered all the circumstances stated above, I am satisfied that lessor is entitled to the vacant possession of the premises and lessee is bound by covenants implied in leases as stated Section 90 of the Property Law Act.

90. In every lease of land there shall be implied the following covenants by the lessee, for himself, his personal representative, transferees and assigns with the lessor and his personal representatives and transferees:-

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

(b) that he or they will, at all times during the continuance of the said lease, keep, and at the termination thereof yield up, the demised premises in good and tenantable repair, having regard to their condition at the commencement of the said lease, accidents and damage from fire, flood, lightning, storm, tempest, earthquake and fair wear and tear (all without neglect or default of the lessee) excepted.

Therefore I conclude that lessee is bound to handover the vacant possession as stipulated in the aforementioned Provisions of Law.

ORDERS

1. Plaintiff/Applicant/Respondent is ordered to vacate the premises on or before 1 June 2012 and the premises should be handed over to Royal Suva Yacht Club in terms of Section 90 of the Property Law Act.
   
2. Notice and Summons for relief against forfeiture of Plaintiff/Applicant/Respondent is dismissed with costs summarily assessed in a sum of $2000.
   
3. Leave is granted to Defendants/Respondents/Applicants for amended Counter Claim to be filed and served within 14 days.
   

Susantha N Balapatabendi
JUDGE

24 May 2012
At Suva