Western Samoa Trust Estates Corporation v Leung Wai [1960] WSLawRp 6; [1960-1969] WSLR 6 (17 August 1960)

[1960-1969] WSLR 6

WESTERN SAMOA TRUST ESTATES CORPORATION v. CHARLIE LEUNG WAI AND ANOTHER

HIGH COURT. 1960. 3, 10, 17, August. ROTHWELL J.

Lease - determination and re-entry - whether notice of re-entry properly given - claim for injunction against lessees and possession of land - section 118 Property Law Act 1952 (New Zealand).

The provisions of section 118 of the Property Law Act 1952 (New Zealand), which is in force in Western Samoa, are designed to give a lessee adequate protection from forfeiture and consequent loss of his leasehold interest, and must be liberally construed in favour of the lessee; and a notice to be issued under the section, in order to be effective and enforceable, must specify the breach complained of with sufficient particularity.

Hammond v. Mangham 17 NZLR (CA) 24 referred to.

In validity of or absence of a notice required by section 118 could be waived by an application for relief against forfeiture, simpliciter. Where, however, the primary defence raised is that no notice under section 118 had been served; and alternatively, a defence praying for relief against forfeiture, the defendants are entitled to succeed on their primary defence and are not required to fall back on the alternative defence and there is, accordingly no waiver.

Shodroske v. Hadley and Another 27 NZLR 705 referred to.

Judgment for defendants.

CLAIM for injunction restraining defendants from going on land; alternatively, for possession.
Metcalfe, for plaintiff.
Phillips, for defendants.

Cur. adv. vult.

ROTHWELL J.: The predecessor in title to the plaintiff corporation in September 1947 leased certain lands to one Leung Wai. Before the expiry of the term of that lease an offer was made of a new lease of Lata Plantation which comprised part of the land included in the old lease and Leung Wai accepted the offer sometime during the month of May 1956. It is common ground between Counsel that the offer and acceptance constituted a lease within the definition contained in section 117 of the Property Law Act 1952 (New Zealand).

In June 1956 Leung Wai died and on 1st April 1957, the plaintiff corporation was constituted by Act of the New Zealand Parliament and took over the assets of its predecessor in title. The first defendant is the son of the lessee, Leung Wai, and the second defendant is the widow of Leung Wai and the administratrix of his estate by virtue of Letters of Administration granted only in March 1960. The first defendant has for the last four years been substantially the manager of the plantation as agent of the second defendant, and the second defendant has taken no practical part in the control of the plantation.

The plaintiff corporation gradually became dissatisfied with the way the plantation was being maintained and about the month of May 1959 resolved to re-enter and determine the lease. A notice was accordingly prepared by the solicitor to the plaintiff corporation bearing date 19th May 1959 and directed to the first defendant. There was a reference in evidence to some communication of the contents of the notice to the second defendant who was then the widow of Leung Wai but not yet the administratrix of his estate. In Argument was addressed to the Court on other aspects of matters relating

any event it is clear that she must have known of the substance of the letter, because she wrote to the plaintiff corporation asking that the re-entry should not be effected. The relevant part of the notice reads as follows:

"The reason for the intended action is your continuous neglect of the plantation in breach of the conditions of the lease despite the fact that the General Manager notified you towards the end of last year that the plantation was rapidly deteriorating through lack of maintenance."

The plaintiff by its Field Officer, Mr D.M. Heise, effected a formal re-entry on the property on 1st July 1959. The plaintiff appointed one Ernest Oldehaver to carry out certain functions as its agent after re-entry, and he embarked on his activities early in July but was recalled some time in September when the defendants gave notice that they intended to contest the validity of the purported re-entry.

This action was then launched, the plaintiff claiming in the alternative an injunction restraining the defendants from going on to the land of the plantation or possession of the land under its power of re-entry, and in either event the sum of £480 for damages or profits. The monetary claim was expressly abandoned by Mr Metcalfe during the course of the hearing.

Section 118 of the Property Law Act 1952 provides as follows:

"118(1) A right of re-entry or forfeiture under any proviso or stipulation in a lease, for a breach of any covenant, condition, or agreement in the lease, shall not be enforceable by action or otherwise unless and until the lessor serves on the lessee a notice specifying the particular breach complained of ....."

For the purpose of examination of the meaning to be given to the words which prescribe the notice, the adjective "specific" will be used instead of the participle "specifying". "Specific" and "particular" have very similar meanings, and the antonym in each case is "general". It would be difficult to imagine how the purported notice could be in more general terms referring, as it does, to "continuous neglect", "breach of the conditions" and "lack of maintenance". Garrow's Real Property in New Zealand 4th Edition at page 615. says -

"The notice must specify 'the particular breach complained of'. This means that the notice must be such as to enable the lessee to know with reasonable certainty what he is required to do. In Fletcher v. Noakes [1897] UKLawRpCh 31; (1897) 1 Ch. 652 the demised premises comprised six houses and the lessor gave the lessee notice 'that he had broken the covenant for repairing the inside of the houses' naming the six houses mentioned in the lease. The notice was held to be insufficient ...."

The degree of generality in the notice in this case is similar.

The provisions of the section 118 are designed to give a tenant adequate protection from forfeiture and consequent loss of his leasehold interest, and must be liberally construed in favour of lessees - Garrow's Real Property in New Zealand 4th Edition page 617. See also Hammond v. Mangham 17 NZLR (CA) 24 per Denniston J. at page 41.

"The provisions ...... should receive a wide and liberal construction in favour of the tenant."

Applying the foregoing principles to the letter of 19th May 1959, I hold that the notice does not specify the breach with sufficient particularity to comply with the requirements of section 118.

Argument was addressed to the Court on other aspects of matters relating to the notice but having arrived at the decision that the notice is bad for generality I do not need to consider the other arguments.

Mr Metcalfe, however, raised the proposition that invalidity of the notice or even complete absence of the notice required by section 118 could be waived by an application for relief against forfeiture, and cited Shedroske. v Hadley and Another 27 NZLR 705. That case would be authority for Mr Metcalfe's proposition if the defence had been an application for relief against forfeiture, simpliciter. This however is not the case. The statement of defence raises as a primary defence that no notice as prescribed by section 118 of the Property Law Act 1952 had been served, then as an alternative defence in case the Court should find a valid notice to have been given, an application for relief against forfeiture. That being so, the defendants are entitled to succeed on their primary defence, and are not required to fall back on the application for relief against forfeiture and there is accordingly no waiver. The physical re-entry of 1st July 1959 was therefore unlawful and the plaintiff cannot succeed in its action for possession.

The defendants, however, have proceeded beyond a bare defence and have counter-claimed for damages arising from purported activities of the plaintiff corporation by its agent Oldehaver under two headings, firstly, removal and sale of produce from the plantation during his period of occupation or activities, and secondly, for the loss of cattle alleged to have escaped or to have been driven from the plantation by the agent Oldehaver or his servants. I propose to deal in the first place with the claim for damages under the second heading.

There are several matters which require consideration in connection with this claim, firstly the letter which contained the purported notice under section 118 contained also the following passage -

"I understand that you have some cattle on the plantation. If you are unable to remove these by 30th June the Corporation is willing to let them remain for the time being or might even consider purchasing them if you wish to sell."

The paragraph quoted gave the first defendant some six weeks' notice of the re-entry which was in fact subsequently carried out during which time it might have been thought to be his duty to make some arrangements for the removal of the cattle. The offer of the plaintiff corporation goes no further than an offer to "let them remain". Then Mr Heise deposed that he called on the first defendant at Sala'ilua on 1st July 1959 and that the first defendant accompanied him on to the plantation where an inspection was made. There was again an opportunity for the first defendant to make some arrangements to have his cattle removed and thus minimise, in anticipation, the damage which might have occurred. There was no real attempt to prove any wilful misfeasance on the part of Oldehaver and the allegations of the defendants against him were only allegations of neglect in failing to keep in repair the boundary walls and fences and failing to keep the gates and gateways closed. There was no positive and convincing evidence of any such failure, and on the counter-claim the burden of proof of course rests on the defendants. In actual fact the evidence of Sing Ko the employee of the defendants prior to the re-entry that the stone walls and wire fences were in good order when Mr Oldehaver took over in early July makes it difficult to understand how such a condition of disrepair could have come about in a short space of approximately two months. The first defendant's own evidence was -

"At the end of August 1959 I found the wire fence at the North Eastern boundary down. This was a 4 wire fence. It looked as if the cattle had broken it down."

It appears to the Court that this was probably what happened. The burden of proof has not been discharged and on this heading the defendants fail in their counter-claim.

The only matter which now remains to be considered is the counter-claim for loss sustained by removal of copra from the plantation during Mr Oldehaver's occupation.

Here again there was no decisive evidence as to the amount of copra removed with the exception of Mr Oldehaver's own evidence that he cut and sold 8,399 lbs which produced £244.3.10 on sale. The defendants, however, are not entitled to recover the full purchase price but must make allowance for the cost of cutting and harvesting. Mr Oldehaver says that the proceeds were disposed of by paying the plaintiff corporation £5 per ton, and paying the rest to the labourers who harvested and cut the copra. The amount involved is almost exactly 3 3/4 tons so that the plaintiff corporation apparently got £18.15.0 and the labourers got the rest. This generous basis of payment cannot be accepted as a basis of computation of damages. The defendants however produced an analysis of records of copra production and costs for the years 1958 and 1959. The only labour cost which should be taken into account is the cost of processing and harvesting which is referable to the actual copra collected and sold. The total collected for the two years was 44,164 lbs or 19.7 tons. The total expenditure during the two years for processing and harvesting was £457.8.9 for 19.7 tons. This averages £23.4.5 per ton. The cost which should be set off therefore against the copra removed and sold by Mr Oldehaver 3 3/4 tons is £87.1.6. The net product on sale is:-

Price realised	£244.3.10
Harvesting and processing	£87.1.6
Net	£157.2.4

This is the only amount that has been proved.

This counter-claim is not dependent on trespass or illegal entry. It could be founded on a claim for money had and received as on a mistaken entry on to the property. The second defendant therefore as administratrix and lessee will have judgment on the counter-claim for £157.2.4.

Questions of costs reserved.