Lee Kwok Kuen v Pongi [1997] SBHC 4; HC-CC 341 of 1995 (24 February 1997)

HIGH COURT OF THE SOLOMON ISLANDS

Civil Case No 341 of 1995

LEE KWOK KUEN

GYPSEY PONGI

Before: Lungole-Awich, J

Hearing: 13th & 14th February, 1997 - Judgment: 24th February, 1997<

Counsel: A Radclyffe for the Plaintiff - P Lavery for the Defendant

JUDGMENT

AWICH, J.:

This is a claim by a landlord, Mr. Lee Kwok Kuen, for rent arrears, mesne profit and for "re-entry" of premises registered as parcel No 191-035-11 at Kukum in Honiara. The plaintiff was represented by learned counsel Mr. Andrew Radclyffe. The claim was against the sitting tenant Mrs.Gypsey Pongi, the defendant. represented by learned Public Solicitor Mr. Patrick Lavery.

Facts Not Contested

When testimonies for both sides closed most of the facts were common ground. On 5.8.1985 the defendant and one Maisie Abana, agent or employee agent of the plaintiff agreed on leasing premises 191-035-11 to the defendant. There was a dwelling house on the premises. The lease was oral, it was effected by the defendant taking exclusive occupation on 5.8.1985 and paying the agreed rent of $150 per month at the time. Payment was to be monthly. The defendant has paid her rentals up until January 1995. She has not paid rentals for the months of February to October 1995 as stated in the statement of claim, but, made payment of $180, being one half costs of repairing toilet, and on 4.9.1995 made payment of $200 acknowledged by receipt issued by the defendant and now exhibit No. PWK2 in court. The defendant has also not paid rentals from November 1995, the month following the last month included in the plaintiff's claim, up to the day in court, 13.2.1996. Rentals for that period were claimed as mense profit. The plaintiff gave notice to the defendant, requiring her to vacate the premises. The notice has expired on 31.10.1995. During hearing parties have referred to a court case in magistrate's court concerning this transaction. They did not inform this court about the conclusion of the case. I assumed that parties took notice of Section 232 of the Land and Titles Act which gives jurisdiction to the High Court.

The Case for Plaintiff and Defendant's Contention

The defendant admitted not having paid rent to the extent stated in the claim and for the period beyond October 1995. Her defence was that she was entitled to withhold payment of rent because the defendant was and is still in default of keeping the house on the premises in repair. She contended that it was the duty of the plaintiff under the lease to do so.

The plaintiff on his part replied that it was not a term of the lease that the plaintiff, the landlord, would keep the house in repair. His position was that the premises were let to the defendant on terms of take it at the rent, if you like it or leave it if you do not. The premises were let as they were and continue to be let as they are.

THE LAW

Oral Lease:

An oral lease is recognised by our law provided it does not exceed 2 years. That is the interpretation that I give to section 134, read with section 135 of the Land and Titles Act, Cap 39 of the Laws of Solomon Islands. In this case, Abana granted exclusive occupation of the premises to the defendant on 5.8.1985, and the defendant paid rent on a monthly basis. The lease was therefore a periodic tenancy for one month and would last from month to month. Indeed it has lasted for over 10 years. It may, however, be terminated by the giving of the appropriate notice of one month.

The plaintiff in his claim, stated that the claim arose from implied term that rent would be, "agreed from time to time … with priviso for re-entry for non payment of rent". The defendant did not deny that rent was agreed and that it would be agreed from time to time. She stated in court that raising rent was, "up to Lee, if the house was repaired". So the positions of the plaintiff, which the defendant did not contest were all expressed terms as far as the defendant was concerned. The plaintiff was of course not present at the time of agreeing on the lease, may be that is why he preferred to state those terms as implied terms. It is not necessary to seek out clinical symptoms when laboratory test is conclusive. The term that rent would be agreed upon from time to time was not an implied term; it was an express term in the lease. As to whether re-entry by the plaintiff was an implied term or not, my observation is that there is nothing in the evidence to suggest that the question of forfeiture of the lease by the plaintiff entitling the defendant to re-entry of the premises was implied in the lease. It, of course, would arise as a matter of law, as a consequence of breach. Usually non payment of rent gives the landlord the right to forfeiture and re-entry.

The Duty at Commencement of Lease

As failure to pay rent has been admitted, the court must examine whether facts exist from which it can be said that the defendant has incurred forfeiture and therefore the plaintiff is now entitled to re-entry. In view of the contention of the defendant that she with-held rent because the defendant did not maintain the house, the first question to consider is whether it was a duty of the defendant or plaintiff to keep the house in repair. The starting point is whether it was a term in the lease that the plaintiff was to hand over the house at commencement of the lease, in a state fit for human habitation or whether the defendant accepted to take the premises whatever the condition. The plaintiff said in cross-examination that he provided some furniture in the house at commencement of the lease; it was his usual practice. He has 5 other similar houses. The defendant cast some doubt on that but, that is what the plaintiff understood to be one of the terms agreed. As a matter of law, letting out a dwelling house with furniture obliges the landlord to ensure that the house is in a state fit for human habitation at commencement of the lease. That is the law stated in subsection (e) of section 136 of Land and Titles Act. I set out the provision:

"136. On the lease of the whole or part of an estate, there shall be implied, on the part of the lessor, a warranty that he has a good right to grant the lease, and, in the absence of express provision to the contrary, the following undertaking with the leasee

(a) ....
(b) ....
(c) ....
(d) ....

(e) where any dwelling house, flat or room is leased furnished, that such house, flat or room is fit for habitation at the commencement of the tenancy; "

So in the facts of this case the plaintiff was obliged, as a matter of law, to ensure that the house on the premises 191-0350-11 was fit for human habitation at the commencement of the tenancy. In fact Abana, the agent of the plaintiff understood that to be an agreed term in the lease; he got workmen to do repair at commencement of the lease. The defendant believed, may be wrongly, that the workmen were employees of the plaintiff; that is not material. When the lease was being arranged the house needed repair. The defendant said that the state of the house was, "bad", water taps had been removed, doors and mosquito netting were in bad state, the house was, "rusty". In court the plaintiff was not sure of that state of the house. Of course he could not be sure because he was not present when the house was being let. He said that he did not even know the tenant, he just received rentals. We now know that later when rentals were not being received regularly, he came to know the defendant all too well. Abana, the agent, of course, knew that the house needed repair, that is why he got workmen to repair it.

The Duty to Keep the House in Repair

The next important question is; was it the duty of the defendant or the plaintiff to keep the house on the premises in repair while the tenancy lasted? The defendant said that it was a term of the lease that the plaintiff would repair the house from time to time, and that as repair has not been done, and the Town Council health inspector has confirmed that the house is not fit for human habitation, the defendant is entitled to withhold rentals. The plaintiff was equivocal about his responsibility to keep the house in repair. He said in cross-examination that if there was damage, the result of normal wear and tear, he would repair. He was quick to add, "the toilet was broken; it was not out of wear and tear". I agree with the observation that broken toilet bowl and cistern cannot be described as a state arising from wear and tear. Later the plaintiff said that he did some repair to the house over the ten years of letting to the defendant. He stopped repairing because every time he went to collect rental, every week, the defendant never gave him rental. He agreed with suggestion that he did not continue with repairing because he was fed up with the defendant; she was setting bad example to the other tenants. Those answers showed that the plaintiff understood it to be his obligation under the lease, to repair damage that was the result of wear and tear. Damage that was not the result of wear and tear would have to be put right by the defendant. From that the court concludes that it was in fact what the defendant understood of the lease and so it was a term in the lease that the plaintiff would keep the house in repair.

Breach by the Plaintiff

Has the plaintiff kept the house in repair? He may have but, not always, certainly not sufficiently. The letter of the Town Council health inspector, now exhibit No. DWGP4 in court, stated that the house was unfit for human habitation by the date of his letter, 22.5.1995. The plaintiff has not responded to the evidence which in fact was to confirm the testimony of the defendant on the point. He has not adduced evidence to show that the house was and is still fit for human habitation or that the repairs required were not to correct the result of normal wear and tear. The defendant was emphatic about what she said was, "rubbish house". The position taken by the plaintiff was simply that if the house was and is still unfit for human habitation, the defendant was free to leave. From that outline of the evidence on the point, it is my decision that the obligation to keep the house in repair rested with the plaintiff, and that the plaintiff has failed in that duty. He has been in breach of that term in the lease. The defendant would be entitled to relief arising from the breach by the plaintiff.

Reliefs Available to Defendant

The remedy of the defendant was to demand of the plaintiff to do maintenance work so as to make the property fit for human habitation and to keep it in repair, taking into account the age of the building and the location as at commencement of the lease. If the plaintiff failed as the defendant says he has, the defendant could carry out the maintenance work herself and withhold rent only to the extent of the costs of repair. Of course the costs of the repair work would have to be as prevailing in the business of doing maintenance jobs on houses in Honiara, not exorbitant one. Alternatively the defendant could cancel the lease and sue for damages. It is not open to her to simply remain in the house, do nothing and refuse to pay rent.

Claim for Rent

Following my decision that the evidence has established that a term in the lease required the plaintiff to keep the house in repair, and that the defendant has failed to do so, the court decides further that the plaintiff was not entitled to receive rent from the defendant during the period the plaintiff remained in breach. His claim for total rental of $2,500 fails. Further, he is not entitled to mesne profit as from October 1995, the last date of his claim for rent. Apart from that reason, it would indeed be a mockery of the law to allow a landlord who has failed in his obligation to maintain his house as a result the house has been condemned by health authority under another law, to receive rent for the period when the house has remained condemned. The notice to vacate given by plaintiff to the defendant in October while the plaintiff was in breach of a term in the lease is ineffectual.

Forfeiture/Re-entry

The claim for forfeiture of the leased property and re-entry by the plaintiff raises difficult question, given the facts of this case. The plaintiff has been a tenant in a periodic tenancy from month to month but, since 1985, well over 11 years. Apart from a period in 1992 when she went off to attend to the death of her father, she has paid rent. That default of course is no longer available to the plaintiff because he has received the rent; he has waived his right. The plaintiff has not breached a term in the lease so as to incur forfeiture and entitle defendant to re entry. Yet the court has found that the defendant has remained in occupation of the premises without paying rent and without doing anything about the breach of the term to keep the building in repair. That state of affairs must come to an end. The defendant must do one of the two things following and she must do so immediately:

1. She may cancel the lease on account of the breach of the term to keep the premises in repair, and may sue for damages resulting.

2. She may elect to continue with the lease. If she does, she must immediately repair the house to bring it up to a state of good repair and thereafter resume paying rentals at the last agreed rate. She must however, take note that once she has completed repairs, parties will be restored to their original position with no default in the air. The plaintiff will have the right to terminate the lease without assigning reason, by giving one month notice to the defendant. For now it is not open to the plaintiff to give that notice while he remains in breach of the condition to keep the house in repair.

Court Order

Having considered all the circumstances peculiar to this case, especially the facts that the defendant has been a tenant for over eleven years though only from month to month, and that the plaintiff, although in breach of a term in the lease, is now stuck with the defendant who is not taking up reliefs available to her, and being aware that it is the duty of the court to make parties certain about the way their case has been decided, I make the following orders:

1. Mr Lee Kwok Kuen's claim for rent in the sun of $2,500 is dismissed

2. Mr Lee Kwok Kuen's claim for mesne profit for the period from November 1995 is dismissed

3. Mrs. Gypsey Pongi must elect either to:

3.1. repudiate the lease; in that event, she must repudiate within 2 months of today's date. and of course she may sue for damages in due course;

3.2. treat the lease as continuing; in that event, she must effect repairs to the house within 2 months, bearing in mind that the costs of repair is to be reasonable not excessive, and if the costs is less than the total rentals since February 1995, she is to pay the difference to Mr. Lee. In exercising this election, the defendant must note that once repair has been effected, and she has recovered the costs from rent, parties will be restored to their original rights in terms of the lease, it will open to the plaintiff anytime, to terminate the lease by giving one month notice as it will be opened to the defendant, without assigning any reason for the termination.

4. Costs are awarded against the plaintiff to the defendant.

Delivered and Dated the 24th day of February 1997

At the High Court, Honiara

Sam Lungole-Awich,
Judge