Jarvis v Brewers Solomons Agriculture Ltd [1983] SBHC 20; [1983] SILR 47 (2 March 1983)

[1983] SILR 47

IN THE HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 72 of 1982

JARVIS

v

BREWERS SOLOMONS AGRICULTURE LIMITED

High Court of Solomon Islands
(Daly C. J)
Civil Case No. 72 of 1982

2nd March 1983

Landlord and tenant - tenancy - determination of - by surrender - estoppel by conduct.

Facts:

The Plaintiff let a house to the Defendant on a fixed term due to expire in January 1983. In early 1982 an officer of the Defendant told the Plaintiff that the Defendant no longer wished to retain the house. The Plaintiff insisted upon work being done prior to surrender. Negotiations about the work were inconclusive. In April 1982 the agent for the Plaintiff acquired keys to the house from the Plaintiff to estimate for repairs. The Defendant subsequently claimed that the handing over of the keys amounted to surrender and the retention of them estopped the Plaintiff from asserting the continuation of the lease.

Held:

The handing over of the keys was not established to be a surrender of the premises. Even if it were the surrender was not accepted by the Plaintiff or her agent. Following Oastler v. Henderson [1877] UKLawRpKQB 71; (1877) 2 Q.B.D. 575, it was necessary to show that the Plaintiff performed “a palpable act” with regard to the premises inconsistent with the continuance of the. Lease to establish estoppel. The retention of the keys by itself was not such “a palpable act” and the Plaintiff was not estopped from asserting that the lease cO::1tinued until its due expiry date in January 1983.

Judgment for the Plaintiff.

For Plaintiff: For Defendant:
K. Brown A. Nori

Daly CJ: The Plaintiff in this case (Mrs Lydia Jarvis) is the owner of a house ('the house') on Kola’a Ridge. The Defendant (Brewers Solomon’s Agriculture Limited) is an employer who, at least at one time, needed houses in Honiara for its employees. From 20th November 1978, the Defendant rented the house from the Plaintiff for a period of two years by virtue of a Tenancy Agreement. Clause 3 of that Agreement provided for termination by either party on three months notice in writing.

When this Agreement came to an end the Defendant wish’s to continue to rent the house but asked that there should be in no clause providing for termination by notice in the new Apartment. This was acceptable to the Plaintiff and on the 28th of January 1981 a new Agreement was entered into which would, on its face, only expire by effluxion of time on 28th January, 1983.

The only question arising in this trial is did that Agreement continue to exist until January 1983 or was it in 1 fact termination prior to that date? The case for the Defendant is that it was determined by operation of law. It is I said that in early 1982 there was a surrender by the Defendant of the remainder of its term under the Agreement. It is not suggested that this surrender was agreed to by the Plaintiff but it is submitted that the conduct of the Plaintiff was such that she is estopped from setting up the continuance of that term as she took possession in a manner inconsistent with that continuation. The Defendant denies that her conduct amounts to sufficient taking of possession of the house to estopp her from asserting that the term continued.

Let me first consider the facts. In March 1981 the Plaintiff became dissatisfied with the condition of the house. In a letter of 12th March 1981 to the Defendant she described it as “a complete and utter shambles”. She went on to state that “the colours the house is being repainted are not acceptable”. Mr Koga, who was the officer of the Defendant responsible for housing, replied agreeing, amongst other matter to repaint the house to the colour of the Plaintiff's choice “at the vacation of the building.”

In the early part of 1982, the Defendant decided it no longer wished to retain the house. The Plaintiff had a telephone conversation with Mr Koga. The Plaintiff's version of the conversation was that on being informed of the company’s wish she said we “would release them from their agreement if they would put the house back into its original condition.” Mr Koga’s recollection was that the Plaintiff merely said there was no problem as long as the promise to repaint the house to the Plaintiff’s choice was fulfilled.

The date of this conversation is not clear. Indeed both these witnesses were vague as to dates when there were no supporting documents. It is not clear, for example, whether the conversation was before or after a visit which the Plaintiff made to the house in company with her partner Mrs Hazelman in April 1982. In order to make this visit they had obtained keys to the house from the Defendant. The keys were returned after the inspection. At that stage an employee of the Defendant was still in residence. The situation the Plaintiff and Mrs Hazelman found was not satisfactory. Mrs Hazelman subsequently asked for the keys to the house again. On neither occasion did she specify the reason why she wanted the keys. This time, again be in April 1982, Mrs Hazelman visited the house with an estimator so that he could estimate the cost of the works required. The house was unoccupied and Mrs Hazelman retained the keys. There is no dispute that in its state at that time the house was not fit for reletting.

Mrs Hazelman, as agent for the Plaintiff set out the sorry state of the house and its furniture in a full and fair letter to the Defendant dated 28th April, 1982. It was, indeed, Mrs Hazelman who thereafter dealt with the Defendant.
I found her as impressive a witness as she was a letter writer. The letter of 28th April 1982 also makes it exactly clear what was the position of the Plaintiff. In paragraph 2 Mrs Hazelman writes: -

“We have been notified verbally by yourself that Brewers intend to vacate the property, however Mrs Jarvis is not prepared to accept any form of notice until the condition of the house is brought up to a reasonable standard. You will note from the Tenancy Agreement that there is no termination clause and that in fact Brewers Agriculture is liable for rental to Mrs Jarvis until the 28th January 1983.”

What, may one ask, could be clearer than that?

The letter of 28th April 1982 was considered by the Defendant. Internal memoranda circulated culminating in a memorandum of 25th May 1982 from Hr Koga to the General Manager in which it was suggested the repair work to the house should be performed by the Defendant and cash settlement made for the missing articles. This memorandum ends: -

“I have spoken to L. Hazelman who agreed that if we complete the job at her satisfaction the lease can then be terminated.”

It was then, apparent on the 25th May 1982 to the Defendant (a) that the lease was continuing and (b) what were the conditions for its termination.

Mr Koga said he then telephoned the Plaintiff to say that they could do the repairs with their own labour. The Plaintiff said she did not refuse the offer as she did not mind who did the repairs.

Mr Koga wrote a letter to the Plaintiff on the 4th June, 1982. This is a surprising letter. It made a point about the return of the key being the end of the tenancy and then went on to offer “in full and complete settlement” the return of 4 articles of furniture and $600. There is no mention whatsoever of the proposal that the Defendant should repaint and repair the house. Mr Koga says that was omitted by mistake. In any event on the face of that letter, there was an offer of $600 and items to be returned. What is, however, clear is that the house was not repaired or repainted by the Defendant nor was any payment made. There matters stood until lawyers were consulted.

What is, then, relied upon by the Defendant in this court as showing that there was a surrender of the remainder of the term of the lease and conduct which prevents the Plaintiff from asserting the lease continued?

It is the handing over of the keys on the second occasion to Mrs Hazelman, it being accepted that on the first occasion the keys were returned.

I must, then, examine this transaction in greater detail. First, it must be seen against the fact that neither the Plaintiff nor her agent was ever officially informed that the house had been vacated. Second, I bear in mind that on the 25th May 1982 the Defendant's officers were still writing of the lease being terminated in the future. Mrs Hazelman said that she telephoned twice to the Defendant and requested the keys to the house. She gave no reason. When the keys arrived there were two; one for each of the locks on the back door which was the main entrance. The Plaintiff spoke of the same keys. However Mr Koga said there were three keys and that was all he had, According to the Plaintiff there should be many more. I find that where there is a conflict between Mr Koga and Mrs Hazelman, I have no hesitation in preferring the evidence of the latter.

Although there had been talk of the Defendant leaving the property before 28th April, 1982 it was not made apparent to anyone that the house had been made vacant or, indeed, that another employee of the Defendant was not about to take up residence. When Mrs Hazelman took the keys she did so to inspect the property. I accept that there was no question in her mind that any surrender was being made. The numbers of keys handed over would not give her a contrary impression, indeed it would confirm that the Defendant was retaining possession in view of the limited number of keys. I am quite satisfied that there was no question in Mrs Hazelman’s mind or in the Plaintiff's mind that a surrender was being attempted. Even had there been I am also satisfied that the attempt would have been rejected until the express conditions were met.

Indeed when I turn to the Defendant, I find it difficult to conclude that at the time the keys were handed over there was any real intention to surrender. Mr Koga, who was the mind of the company in this respect, knew the Plaintiff’s terms for surrender of the lease and equally knew that those terms had not been carried out. Whatever he now says he told the General Manager about determination after the keys had been given back, on 25th May 1982 he was telling him the lease had yet to be terminated.

Accepting for the moment that there was such an attempt to surrender, I have concluded that there was no agreement to it by the Plaintiff or her agent. The remaining question is, is the Plaintiff estopped from making an assertion in this case that the lease continued until 28th January, 1983? In Oastler v. Henderson [1877] UKLawRpKQB 71; (1877) 2 Q.B.D. 575 similar facts were considered by the English Court of Appeal. In that case the agent for a tenant had handed back keys to the landlord after the departure of the tenant. The landlord was unable to let the house despite efforts to do so until two years later. The period of the lease was continuing. It was argued that there was a surrender by operation of law. Cockburn C.J. said at page 577: -

“... in order to estopp the lessors so as to constitute a surrender by operation of law, there must be a taking of possession. I do not say a physical taking of possession; but, at all events, something amounting to a virtual taking of possession.”

Per Brett L.J. at page 579: -

“There can be no estoppel by mere verbal agreement; There must be in addition to such agreement some act done which is inconsistent with the continuance of the lease. If after the agreement the landlord takes possession or does what virtually amounts to it, if he not only attempts to let, but actually does let, then there is a palpable act done with regard to the premises raising an estoppel.”

In this case no “palpable act” has been established in evidence. There is no evidence the Plaintiff entered into possession or did any other act inconsistent with the continuation of the Defendant’s lease. The mere retention of two keys when the house was empty and when discussions about work to be done were taking place is, in my judgment, quite insufficient to amount to such an act. In those circumstances no question of estoppel can be said to arise and thus no question of termination of the lease by operation of law arises.

The Defendant has failed to establish that the Agreement of 28th January 1981 was determined other than by its expiry on 28th January 1983. The Defendant is liable for rent throughout the period of the lease and as it has failed to pay since

1st day of April 1982 the amount due and owing is $4000. There will be judgment for the Plaintiff for that amount with costs in relation to claims (a) and (b) in paragraph 8 of the Statement of Claim.