038-NLR-NLR-V-16-AGAR-et-al-v.-RANEWAKE-et-al.pdf
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Present: Lascelles C.J. and Wood Benton J.
1918.
A GAB et al. v. BANS WAKE et al.284—D. C. Colombo, 32,349.
Forfeiture of lease—Failure to keep property in good order.
Where there has been a breach of covenants to keep the propertydemised in good order, the lessee is not entitled to equitablerelief against forfeiture of lease except on the ground that thepenalty of forfeiture would be outrageous or “ immanis”
facts are set out in the judgment.
W. Jayewardene (with him Mendis), for the appellants.—Alessee is granted relief against a provision for forfeiture of the leaseunless there has been a notably grave and damnifying misuse of• the property (Perera v. Tkaliff l).
A clause of forfeiture is only intended as security for the duepayment of the rent (Perera v. Perera 2).
The lessee has an option of purchasing the leased property. Heis prepared to exercise that option. There has been no injury tothe reversion. The lessee will restore the property in any eventin good order. It is the lessor who is attempting to resile fromhis agreement.
He cited Ewart v. Fryer,* Mekkison v. Thomson* 10 Halsbury541, Story on Equity, sec. 1316, 3 Bal. 213, 3 Tam. 103, 1 S.d. R. 35, 3 N. L. R. 248.
A. St. V. Jayewardene (with him Bartliolomeusz), for the res-pondents.—This case is different from those cited where forfeiture of
lease was refused for non-payment of rent. Here there has beens breach of the conditions as regards keeping the leased property
order. The lease for non-fulfilment of the conditions has becomevoid. The Court has exercised its discretion in cancelling the'lease. It is not open to the lessee to exercise his option now.
E. W. Jayewardene, in reply.—The principle as regards thecovenants for non-payment of rent and other covenants is identical.As long as the property itself is not injured, or as long as thedamage is easily ascertainable or is slight, the Court should notdeclare a forfeiture, which is in the nature of a penalty.
– Cur. adv. vult.
1 {1904) 8 N. L.XR. 118.
* {1907) 10 N. L. B. 280.
» {1901) 1 Ck. 499.
* {1883) Cab. 4 El. 72.
VOL. XVI.5
. 14-*. N. 86177(1/04)
Agar t>.Raneioahe
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December 12, 1912. Lascelles C.J.—
The argument of this case has occupied a good deal of time, butthe case in itself seems to ine to be a fairly clear one. The claimis by the trustees of the will of the late Mr. J. S. Agar for thecancellation of a lease granted by them in favour of the first defendantand the second defendant. The ground of the claim is a breach ofthe covenants in the lease by the lessees. There is also a furtherclaim of damages to the amount of Its. 4,250. The conditions inthe lease which the lessees are alleged to have infringed are clearlydefined in the issues fixed in the case. They are as follows:—
Whether the lessees during the lease failed to maintain
under cultivation with tea in a husbandlike manner not
less than 200 acres of the estate ?
Have the lessees neglected the weeding of the said estate?
Have the lessees neglected to clear the drains on the said,
estate?
Have the lessees failed to maintain the estate roads?
Have the lessees failed to pay the Government road assess-
ment for the-years 1909 and 1910?
Have the lessees failed to keep in good order and repair the:
bungalow and set of lines and factory and fittings?
To all these issues, excepting (5), the learned District Judge hasfound in the affirmative. The correctness of these findings has notbeen seriously challenged. They are based on the evidence ofMr. Smalej whose experience and impartiality in the matter havenot been questioned. The defence that has now been pressed onus is that, in the circumstances of the case, the first defendant,is entitled to some form of equitable relief. Now,’ a number ofauthorities have been cited to us to prove that the English principle*of giving relief against a forfeiture on the ground of non-payment ofrent have been introduced into Ceylon, and are now a part of ou:law. This, 1 think, is beyond question. But no authority hasbeen adduced to us, and 1 do not believe that any can be found,that in a case where there has been a breach of covenants tokeep the property demised in good order, the lessee is entitled toequitable relief. The only ground, as far as I can see, on whicahe could claim such relief, is that the penalty of forfeiture would fceoutrageous or 1 * immanis 9' in the language of the Bdman-Dutch lawin the circumstances of the particular case/ This is a ground whichis not and could not be raised in the present case. It has been putto us that the case is one of considerable hardship. It is said that thelessees had under the lease an option of buying the property at- asum of Bs. 15,000; that the first defendant is now prepared fopay this sum, and that, therefore, the plaintiffs will not in aiyway be injured by their lessee's failure to observe the covenants inthe lease. This reasoning is, I think, not sound. The option ,of
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the lessees to buy the estate at the agreed sum was dependent ontheir observing the covenants in the lease. When they had failedto do so, the plaintiffs, although the lease had not actually beencancelled, might fairly and reasonably have contracted to sell theproperty to another, as it is said that they have done. It is quiteclear that the lessees, by failing to carry out the covenants in thelease, have forfeited their option to buy the property, and have nowno right to insist on it. We have heard a good deal of the positionof the seventh defendant as regards his case. But it seems to methat any agreement that he or his wife may have made to buy theestate, or any option that they may be entitled to under thesub-lease to the seventh defendant, are quite irrelevant to thequestion which we have here to decide, which is simply whether theplaintiffs are entitled to a cancellation of the lease. The only otherquestion raised oh the appeal is that of damages. The DistrictJudge has awarded the full amount claimed, and on the evidenceI do not see that he could have done otherwise. The evidence ofMr. Smale was that, so far from the amount claimed being excessive,it was really considerably less than the actual amount of damageswhich had been sustained owing to the failure of the lessees tocomply with the terms of the lease. The appeal in my opinion fails,and must be dismissed with costs.
Wood Benton J.—
I entirely agree, and have nothing to add.
Appeal dismissed.
IMS.
IiASOBLLBS
C.J.
Agar v.Ranewake
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