IN THE HIGH COURT OF JUSTICE IN THE MATTER OF THE LAND TENANTS (SECURITY OF TENURE) ACT CHAPTER 59:54 AND

Transcription

1 REPUBLIC OF TRINIDAD AND TOBAGO CV IN THE HIGH COURT OF JUSTICE IN THE MATTER OF THE LAND TENANTS (SECURITY OF TENURE) ACT CHAPTER 59:54 AND In the Matter of All and Singular that certain parcel of land situate at St. James, in the City of Port of Spain, in the Island of Trinidad, Measuring 36 feet by 5 inches on the Northern boundary line and 37 feet 6 inches on the Southern boundary line, 85 feet on the Eastern boundary line and 79 feet 2 inches on the Western boundary line and abutting on the North upon Western Main Road, on the South and West upon other lands of the Lessor and on the East upon Mathura Street (hereinafter referred to as the subject lands ) now known as 133 Western Main Road, St. James. AND BETWEEN JEAN MACKAY HAYDEN CHARLES JOANNA CHARLES DENYSE CHARLES (as the Legal Personal Representative of the estate of SHELDON CHARLES) JOAN CHARLES (as the Legal Personal Representative of the estate of CURTIS CHARLES) AND JESSE HENDERSON COMPANY LIMITED BEFORE THE HONOURABLE MADAM JUSTICE JONES CLAIMANTS DEFENDANT Page 1 of 36

2 Appearances: Ms. S. Persaud instructed by Mr. V. Maharaj for the Claimants. Mr. I. Benjamin instructed by Mr. K. De Silva for the Defendant. JUDGMENT 1. By a deed of lease dated 6 December 1969, a parcel of land situate at number 133 Western Main Road St James was leased by the defendant to Veronica Garib ( the deceased ) for a term of 25 years at the yearly rental of $ At the time of the said lease there was already on the land a two storied building owned by the deceased. The claimants are the next of kin of the deceased who died on the 2 nd September In accordance with the terms of the will of the deceased by a deed of assent dated the 11 th June 1986 the tenancy was vested in the first claimant for life and thereafter to the second, third, fourth and fifth Claimants in equal shares. In these proceedings no issue has been raised as to the effect of the deed of assent on the tenancy. For the purpose of these proceedings I will refer to the persons in whom the tenancy vested upon the death of the deceased as the claimants. 3. By the said lease the deceased as lessee covenanted, among other things, that: (i) she would not assign, underlet or part with the possession of the demised premises or any part thereof (other than by will or as a monthly tenancy ) without first obtaining the consent in writing of the defendant; and Page 2 of 36

3 (ii) the premises shall not be used or occupied as a shop or for the purpose of any public show or as a barracks, or other separate tenements or for any other purpose or in any other way than as a dwelling house and commercial business (not involving a liquor licence) nor use the premises or allow the same to be used for any immoral or illegal purpose. The lease also contained a provision entitling the defendant to re-enter onto the premises if there was a breach or non-observance of any of the covenants contained in the lease. 4. In 1969 the defendant consented to the deceased renting out the lower storey of the building to tenants for the purpose of operating a hardware store. The lower storey remains rented out to the hardware store. The rent obtained by the deceased for the lower storey has always exceeded the rent due under the lease. During the lifetime of the deceased the upper storey was occupied as a residence. 5. After the death of the deceased in 1983, the upper storey of the building was rented for a short time to three tenants: in 1985 to a Mrs. Apparicio who used the upper storey as a residence as well as for a commercial enterprise and thereafter to two other tenants who collectively occupied the premises for less than two years. While there is no evidence of the rent paid by Apparicio it is not in dispute that the rental paid by the other two tenants were monthly and exceeded the rent payable under the lease. In the year 2007 the upper storey was rented out to Daisie Sammy ( Sammy ) who at present operates a home school from the premises. The monthly rent paid by Sammy also exceeds the yearly rent payable under the lease. Page 3 of 36

4 6. Meanwhile in the year 1997 the defendant refused to accept the rent tendered by the claimants. By way of a letter dated 27 May 1997 the defendant advised that the lease had run out and would need to be renewed. According to the defendant in accordance with terms of the lease it would have expired in the year By the said letter the defendant offered to sell the land to the claimants or enter into a new lease at an increased rental. In response, the claimants claimed to be entitled to a statutory lease pursuant to the Land Tenants (Security of Tenure) Act Chapter 59:54 ( the Act ). Thereafter the claimants continued to pay the rent to the defendant who accepted same up to and until December By a letter dated 7 April 2008 the claimants maintained their position that the land was subject to a tenancy which was protected by the Act and that they were entitled to a statutory lease of the land. The rent for 2008 which was tendered on the 10 th March 2008 and refused by the defendant was thereafter re-tendered. By a letter of October 2008 the defendant alleged that since the date of the claimants last letter, 7 April 2008, ground surveys and inspections revealed that for at least the last two years the entire property had been used for commercial purposes. According to the letter they were in material breach of the lease whether statutory or periodic. By the letter the defendant returned the last rent cheque tendered by the claimants and called upon them to enter into negotiations for a new lease to reflect the commercial realities of the premises. 8. Positions being joined, the claimants commenced these proceedings in May By and large the posture taken by the parties in their respective pleadings reflects the stance taken by each in their correspondence. The claimants allege the continuous occupation of the upper storey Page 4 of 36

5 as a residence. In particular they allege that on the 1 st of June 1981, the date appointed by the Act for its provisions to take effect, the building on the land was used as a dwelling as contemplated by the Act. The claimants claim the protection of the Act and seek declarations to the effect that they hold the premises as a statutory tenant pursuant to the Act. 9. By its defence the defendant puts the claimants to the proof of every allegation of fact which may entitle them to a statutory lease pursuant to the Act. In particular the defendant denies that: (i) the claimants have been in the continuous occupation of the premises; (ii) the upper storey has been at all material times occupied as a residence and avers that since prior to 2007 both floors of the building have been used for commercial purposes; and (iii) there exists a statutory lease with respect to the land. 10. The defendant further contends that (i) if the claimants are entitled to a statutory lease, the claimants are in breach of section 5(8) of the Act in that the rent payable by the subtenant of the ground floor was at all material times in excess of the lease rent; and (ii) that in or around the year 1984, a liquor licence was granted to the tenants of the upper storey and renewed in 1985 in breach of a covenant of the lease. Despite its contentions however no counterclaim has been filed by the defendant. 11. The issues for my determination are: 1. Do the provisions of the Act apply to the deceased s tenancy 2. If so, what is the effect of same? 3. Have the claimants (a) rented the premises to subtenants at a rent in excess of Page 5 of 36

6 that paid by them to the defendant; (b) rented out the premises to subtenants who used the premises for a commercial business involving a liquor licence and /or(c) utilised the whole of the premises for commercial business and, 4. If so, what is the effect of same on the tenancy? Do the provisions of the Act apply to the deceased's tenancy? 12. At or around the time of the introduction of the Act it formed a part of a series of other legislation enacted for the purpose of providing security of tenure for certain tenancies. These acts were: the Rent Restriction Act Chapter 59:50, enacted in 1941 but now expired. The Agricultural Smallholdings Tenure Act Chapter 59:53 enacted in 1966 and the Rent Restriction (Dwelling Houses) Act Chapter 59: 55 enacted in At the time of the passing of the Act, in so far as tenancies of land were concerned, there was already some measure of protection for tenants of land by the Rent Restriction Act Chapter 59:50 ( the Rent Restriction Act ) which provided some security of tenure for tenants of building land with respect to the rental to be charged and the obtaining of an order or judgment for possession against them. The Act sought to provide additional security of tenure for tenants of land subject to its provisions. To this end, with respect to these tenancies, it (a) established a right to a statutory lease for 30 years in the first instance and for this lease to be renewable for further period of 30 years; (b) fixed the rent payable respect to the tenancy to the rent paid at the commencement of the statutory lease and provided for a review of the rent charged by a statutory body; (c) restricted the ability of the landlord to terminate the tenancy for non-payment of rent Page 6 of 36

7 and (d) gave the tenant the option to purchase the land at half the market value; and with the agreement of the landlord, the ability to purchase the land by installments. 14. Subject to the exceptions listed in section 3(2), irrelevant for our purposes, the Act was stated to apply to tenancies in respect of land in Trinidad and Tobago on which at the time specified in section 4(1) a chattel house used as a dwelling is erected or chattel house intended to be used as a dwelling is in the actual process of being erected : section 3(1). By section 4(1) the Act applies to all those tenancies: subsisting immediately before the appointed day and converted those tenancies into statutory leases from the appointed date. The appointed date was in fact 1 st June For our purposes therefore the Act applies to tenancies of land in existence on 1 st June 1981 upon which there was erected a chattel house used as a dwelling and had the effect of creating a statutory lease of the land. 15. The Act defines a chattel house as including a building erected by a tenant upon land comprised in his tenancy with the consent or acquiescence of the landlord and affixed to the land in such a way as to be incapable of being removed from its site without destruction. : section 2. To be categorised as a chattel house therefore the Act does not require that the building on the land be used as a residence. On the evidence it is clear that the building on the land is a chattel house within the meaning of the Act. 16. For the Act to apply however on the appointed date there must have been erected on the land a chattel house used as a dwelling or a chattel house intended to be used as a dwelling which was in the process of being erected. With respect to the application of the Act therefore Page 7 of 36

8 what is relevant is the user of the chattel house on or in the process of being erected on the land on the 1 st June On the appointed date the land must have been subject to an existing tenancy upon which there was a building erected by a tenant or in the process of being erected by a tenant, which was being used or intended to be used as a dwelling. 17. The question raised by the defendant here is whether the words a chattel house used as a dwelling contained in section 3(1) excludes a chattel house used both as a dwelling and for commercial business. It is clear that the Act does not specifically include or exclude such a chattel house. The defendant submits that in these circumstances I must go to the intention of the Act which it states is to protect and provide security of tenure for tenants using land for the purpose of residence. It submits that the Act is not geared towards providing security of tenure for commercial premises and these circumstances since a chattel house used as commercial premises is excluded from the operation of the Act, similarly a chattel house used for both residential and commercial purposes must also be excluded. 18. It cannot be disputed that the purpose of the Act is to protect and provide security of tenure for tenants of land upon which a chattel house used for the purpose of residence is erected. Despite the defendant s suggestion, it could equally be said that in those circumstances Parliament s intention was to secure residential tenancies where ever they existed even if a part of the chattel house was being used for commercial purposes. It seems to me that if Parliament wished to exclude those buildings which were used for the dual purpose of commerce and residence it would not have been difficult to include in section 3 (1) the word only so as to limit the user to chattel houses used for dwelling only. Page 8 of 36

9 19. Indeed a comparison with the Rent Restriction Act shows that all building land, save land let under a building lease and agricultural land, whether used for the erection of a building used as a dwelling or commercially or any combination of the two was subject to the protection of that act. This suggests therefore that the protection of tenancies of land, even where the building on the land was used for commercial purposes was not a strange concept at the time. It seems to me that in the absence of any words of limitation it is clear that even though the intention was to provide security of tenure for land used for residential purposes Parliament was prepared to provide that protection even where the building was on the appointed date used for a dual purpose. 20. The defendant further submits that in order for the Act to apply the chattel house must have been used for dwelling on the operative date. In this regard it relies on statements made by de la Bastide C.J. in the case of HV Holdings Limited v Wilston Campbell Cv. A No. 214 of There, in seeking to clarify statements made by Hamel-Smith JA in the case of Ghany v Ward C v A. No 5 of 1989, he states: it seems to me quite clear that section 3(1) regards as material not only the subsistence of the tenancy on the appointed date, but also the use of a house as a dwelling on that date. That use, does not have to be by the tenant, it may even be by a trespasser, but there must be someone who is using the house as a dwelling at the material time, that is 1 st June The point was made in argument well, what if there was a tenant who died the day before or shortly before 1 st June 1981? The answer to that is the temporary interruption in the use of the house, caused by such an event would not prevent Page 9 of 36

10 the court from holding that on the material date it was being so used, much in the same way as the temporary absence of the occupier from the premises, for whatever reason, would not mean that the house did not continue to be used as a dwelling. For these reasons therefore, I hold that it was necessary for the respondent in order to succeed in his claim to a statutory lease to show that the chattel house on this land at Moruga was being used as a dwelling on 1 st June : page I accept the defendant s submission. It is clear however that the occupation of the building at the time must be looked at in the round. A temporary interruption as a result of illness, for example, would not in my opinion lead to the conclusion that the chattel house was not being used as a dwelling. With respect to the occupation of the house however the evidence of the claimants is that on the material date the deceased resided in the upper storey of the building. I accept that evidence. 22. In the circumstances I find as a fact that on the appointed date, 1 st June 1981, the upper storey of the building was being used as a residence. The fact that the lower storey was being used for commercial purposes is in my opinion irrelevant for the operation of the Act. It is not in dispute that at the time, that is 1 st June 1981, the deceased was the tenant of the land and the owner of the building erected on it which building accorded with the definition of chattel house in the Act. Accordingly by operation of law the existing tenancy of the deceased was on the 1 st June 1981 converted into a statutory lease in accordance section 4(1) of the Act. Page 10 of 36

11 The effect of the Act on the tenancy of the deceased 23. The statutory lease created by the Act is for a period of 30 years in the first instance and for further period of 30 years where the tenant has exercised the option to renew afforded by the Act. In the instant case therefore the tenancy between the claimants and the defendant did not expire in 1994 but rather is due to expire by effluxion of time on 31 st May 2011 unless renewed in accordance with the provisions of the Act as amended by Act No 10 of 2010 or determined under the terms and conditions of the statutory lease. 24. The Act provides that the terms and conditions of any existing tenancy converted into a statutory lease, where not inconsistent with the terms and conditions set out in section 5 or other provisions of the Act, shall be incorporated into the statutory lease as terms and conditions of the said lease: section 5(1) and (2). Under the Act therefore all statutory leases are not the same. While there exists certain similarities between statutory leases created by the Act as for example, its duration, the terms and conditions of the tenancy that existed prior to its conversion, once not inconsistent with the Act, will now apply each statutory lease. 25. If therefore prior to the conversion to a statutory lease the terms and conditions of the existing tenancy were governed by either the common law, the Rent Restriction Act, or a written lease, then those terms and conditions, where not inconsistent with the Act, are by section 5 deemed to be incorporated into the statutory lease. In the instant case the 1969 lease fixed terms and conditions of the existing tenancy before its conversion into a statutory lease. These terms Page 11 of 36

12 and conditions, therefore, where not inconsistent with the Act were by the Act incorporated into the deceased s statutory lease. 26. Insofar as it is relevant to these proceedings the Act by section 5 provides that: (i) the rent payable under a statutory lease shall be the rent which was payable in respect of the land prior to 1 st June 1981 or as varied pursuant to section 5A: section 5(3); (ii) if the rent payable or any part thereof is in arrear for six months. The landlord may apply to the land commission for redress. The type of redress available to the landlord in this regard is specified by section 5(4). For our purposes it is important to note that this redress includes the availability of an order for the termination of the statutory lease. (iii) a tenant has the right to assign or sublet with the consent of the landlord, which consent shall not be unreasonably withheld, but the rent payable by any subtenant shall not exceed the rent payable by the tenant of the landlord under this Act: section 5(8). These therefore, together with the terms and conditions of the existing tenancy, the 1969 lease, not inconsistent with the Act, form a part of the statutory lease granted pursuant to the Act. 27. As we have seen the 1969 lease contains, among other things, covenants made by the deceased as lessee. In my opinion, despite the use of the word covenant in the 1969 lease, it is clear that these lessee s covenants establish terms and conditions of the tenancy that existed prior Page 12 of 36

13 to the operation of the Act. By the Act, however, it is only those terms and conditions of the existing tenancy which are consistent with the Act that are incorporated into the statutory lease. So, for example a provision in an existing tenancy which prevented the tenant from assigning or subletting in absolute terms would not be incorporated into the statutory lease since this provision would be contrary to section 5(8) of the Act. Similarly a provision for an automatic increase in rent would not be incorporated it being contrary to sections 5(3) and 5A of the Act. 28. In the instant case, by the 1969 lease, the deceased covenanted that: (a) she will not assign, underlet or part with the possession of the demised premises or any part thereof at any time (otherwise than by will or as a monthly tenancy) without the consent in writing of the lessor for that purpose first had and obtained.( covenant(1 ) ) (b) the premises shall not, nor shall any part thereof or any buildings erected thereon be used or occupied as a shop or for the purpose of any public show or as a barracks, or other separate tenements or for any other purpose or in any other way than as a dwelling house and commercial business (not involving a Liquor Licence). ( covenant (2) ; (c) the defendant be entitled to re-enter onto the premises in the event of (i) non payment of rent for 21 days and (ii) any breach or nonobservance of the lessee s covenants ( covenant (3) ); Page 13 of 36

14 29. Insofar as covenant (2) is concerned the covenant prohibits the use of the premises (i) in any other way, other than as a dwelling house and commercial business and (ii) for any purpose involving a liquor licence. Since the Act is silent with respect to the user of the chattel house or indeed the land after 1 st June 1981 it seems to me therefore that this covenant is not inconsistent with the terms and conditions of a statutory lease under the Act. In my view therefore this covenant forms a part of the terms and conditions of the deceased s statutory lease. 30. Insofar as, covenant (3) is concerned it is clear to me that insofar as it provides for reentry for non-payment of rent that term is inconsistent with section 5(4) of the Act which provides a procedure for the determination of the statutory lease on the grounds of non-payment or arrears of rent. The question is whether that part of the covenant which allows the defendant to re-enter onto the premises, for a breach or nonobservance of any of the other covenants now forms a term and condition of the statutory lease. 31. Except as regards a termination of the statutory lease by effluxion of time and nonpayment of rent, the Act is silent with respect to the termination of the statutory lease. It is clear that while the inclusion of a provision in a statutory lease providing for determination in the event of a non-payment of rent is inconsistent with section 5 (4) of the Act it is evident that the intention of Parliament was not to convert existing tenancies or create a statutory lease for a fixed period, without the ability to determine the statutory lease within that fixed period. If that were the case then the non- payment of rent would not attract an order for possession. Neither is there anything in the Act which provides that the right of the landlord to terminate the lease during the fixed period is to be limited to situations where the tenant is in arrears of rent. Page 14 of 36

15 32. Nor, in this regard, did Parliament treat these statutory leases in the same manner as it treated tenancies under the Rent Restriction Act or the Agricultural Smallholdings Tenure Act. Section 14 of the Rent Restriction Act specifically restricts the landlord s right to an order for possession of premises subject to the Act to the grounds specified in that section. A similar position is taken in section 38 (2) of the Agricultural Smallholdings Tenure Act. To a somewhat similar effect section 15 of the Rent Restriction (Dwelling Houses) Act specifically applies section 14 of the Rent Restriction Act to tenancies under the Dwelling Houses Act. This is not the case with the Act. 33. Indeed, it would seem to me that with respect to tenancies under the Act by expressly incorporating the terms and conditions of the existing tenancy into the statutory lease, but not, save with respect to arrears of rent, limiting the landlord's right to possession, the intention of Parliament could only have been to provide for security of tenure for those tenancies subject to the Act only insofar as it relates to the length of the tenancy, remedies available to the landlord for the non-payment of rent and affording the tenant the opportunity of purchasing the land at a reduced price. Save as to these aspects it would seem to me that Parliament intended that all the terms and conditions of the contractual tenancy to continue once not inconsistent with the Act. 34. While therefore the provision in the lease, which allows for re-entry upon the nonpayment of rent is clearly inconsistent with the terms of the statutory lease it seems to me that insofar as the 1969 lease allows for re-entry upon a breach of a covenant, other than the covenant for the payment of rent, this term or condition is not inconsistent with the terms and conditions of a statutory lease established by the Act. In my view therefore, the ability of the landlord under Page 15 of 36

16 the 1969 lease to re-enter onto the premises upon a breach or non-observance of lessee s covenants other than non- payment of rent, not being inconsistent with the provisions of the Act, has been incorporated into the statutory lease. 35. With respect to covenant (1) the Act, by section 5(8), does three things, it: (i) gives the tenant the right to assign or sublet with the consent of the landlord; (ii) provides that the landlord shall not unreasonably withhold consent; and (iii) provides that the rent payable by any subtenant shall not exceed the rent payable by the tenant to the landlord under the Act. Insofar as (i) is concerned therefore, covenant(1) is slightly wider than section 5(8) in that by the 1969 lease the deceased is not required to obtain the landlord s consent with respect to devolution by will or a letting to a monthly tenant. However, in circumstances where the landlord s consent is necessary the act is less restrictive in that it provides that the landlord shall not unreasonably withhold the consent. And of course (iii) does not form part of covenant (1). It seems to me therefore that covenant (1) is inconsistent with the terms of the Act and therefore not incorporated into the statutory lease. It would seem to me that, in accordance with the provisions of the Act, the right of the deceased to assign or sublet is to be exercised in accordance section 5(8) of the Act. Have the claimants (a) rented the premises to subtenants at a rent in excess of that paid by them to the defendant; (b) allowed the premises to be used for a business involving a liquor licence and /or(c) utilised the whole of the premises for commercial purposes? 36. The defendant submits that the claimants are in breach of the terms of the tenancy in that: (i) they have at all material times rented the premises to subtenants at a rent in excess of the Page 16 of 36

17 rent payable by them to the defendant; (ii) utilised the entire premises for commercial business; and (iii) permitted the premises to be used as a commercial business involving the use of a liquor licence. 37. It is not in dispute that, at all material times, both the lower storey and the upper storey of the building were rented by the deceased and the claimants to subtenants for a rent in excess of that payable by them to the defendant. 38. With respect to the user of the building subsequent to June 1981, the defendant makes two allegations. The first is that during the period 1984 to 1985, while the upper storey was being rented to Mrs. Apparicio, it was used for the purpose of operating a bar which involved the obtaining of a liquor licence. In support of this allegation a certified copy of proceedings before the licensing committee of the Port-of-Spain Magistrate's Court showing a grant of a liquor licence to the Apparacios with respect to the premises for the 28th June 1984 and the 28th of March 1985 was put into evidence by consent. 39. In addition, there is the evidence of defendant s witness Herman Lee King that on visiting the property in 2008 he recalled having patronised a restaurant/bar on the upper storey of the building in the 1980s. This evidence was not challenged in cross-examination. Indeed according to the first claimant's husband the Apparicio s tenancy was terminated when it was discovered that Mrs. Apparicio operating more than a tea service on the premises. Page 17 of 36

18 40. The second allegation made by the defendant with respect to the user of the upper storey is that after the death of the deceased the upper storey ceased to be used as a dwelling house. The evidence of the claimants in this regard is of John Mackay and Sammy, the present tenant. According to Mackay the upper storey was used as a residence by the deceased and continues as a residence for the family of the deceased and such tenants that have occupied the upper storey of the building after her death. The fact that after the death of the deceased the premises were used by the Apparicios and the two subsequent tenants as a residence has not been challenged. I accept the evidence of the claimants that around the years 1999 to 2001 the upper storey was used as a residence by the first claimant and her family while their house in Federation Park was being repaired. 41. According to Mackay from time to time relatives who lived abroad would come to Trinidad and it was customary for them to stay in the subject property when it was not occupied by subtenants. He says that in addition after the renovations to his home in Federation Park were complete he and the first claimant continued to attend and, occasionally stayed at the subject property. No particulars are given by him of these occasions. 42. With respect to the user of the upper storey from the year 2007 in his evidence in chief Mackay states that Sammy, a friend, was allowed to rent a portion of the subject property. Despite this, he says, the property remains outfitted as a home. According to him the first claimant, himself and the other claimants still have access to the subject property and enter same from time to time. In cross-examination, however, he admits that Sammy conducts a school for physically challenged children on the upper storey. According to him, he just goes there to Page 18 of 36

19 collect the rent. He does not go inside, he just rings the bell and she comes to the landing. The rental charged is $4,000 a month. With respect their continued occupation of the upper storey he says my wife's wedding presents are supposed to be locked in a room in the house. 43. In her witness statement made on the 15 th April 2010 Sammy gives the premises as her address. According to Sammy she approached the first claimant to rent the upper storey as a dwelling. Thereafter she requested and was granted permission to use the premises for the purpose of assisting children with special needs. She says that she indicated to the first claimant that it was a non-profit activity. According to her, in chief, the upper storey remains outfitted as a dwelling, but is being used both as a dwelling and as a home school. She claims to use the premises as an alternative dwelling place. She says she prepares and has at least two meals there together with her two children, as a family. When she sleeps over she says she uses a fold away bed located in the back bedroom of the premises. She says that the last time she slept over in the premises was in or about the months of January and February of that year. According to her there is a storeroom on the premises which is used to store some personal belongings of the first claimant. 44. With respect to the home school she says that it is a non-profit activity. In this regard, she is assisted by her sister who, like her, is not in receipt of a salary but is paid a stipend. There is another assistant who also receives a stipend. She says that she may, at times, have other volunteers assisting. Some parents, she says, make regular monetary contributions that assist in defraying some of the expenses. As well she provides a service to students in mainstream secondary schools who are slow learners. These students, six in number, are assisted after regular Page 19 of 36

20 school hours and are charged a fee. She says that in 2009 a representative of the defendant, a Mr. Lee King, visited the premises. He says that she told him all that she had said in her witness statement, except for some details such as the fact that she and her sister do not receive salaries. She says she advised him that she assisted children with special needs during the day and after normal school hours and that the age of those children ranged from 6 years to 16 years. According to her she also told him that the teenagers are students who are not functioning at their chronological age and as such are deemed children with special needs. 45. At trial however slightly different picture emerges. Firstly, she gives her address as Cameron Road, Petit Valley. Under cross-examination she says that the house at Cameron Road is owned by her mother. This house she says is her primary home and where she grew up. She lives there with her mother, her husband and her two children. With respect to upper storey of the rented premises she admits the use of one room as an office. As well, after being presented with a photograph showing a number of young persons in school uniforms in the gallery of the upper storey of the building, she admits that she also tutors students from the athletic teams of two secondary schools. This, she says, is done on a voluntary basis. Under cross-examination she accepts that the upper storey is equipped with writing boards and desks for both the teachers and the children. There are also toilets for the use of the children and staff and the kitchen outfitted with cupboards and a place where the students can sit and eat. 46. She admits that the gallery is used as a sort of recreational space either when the children are eating or if they have been dismissed. According to her the photograph must have Page 20 of 36

21 been taken about a year before because she recognises the students shown in the photograph. Three of these students still attend the school. 47. The evidence of Sammy was in part contradicted, in part supplemented, by the evidence of Herman Lee King, the investigator employed by the defendant. According to Lee King he visited the upper storey of the premises on two occasions March 2008 and July He describes the upper storey as comprising five rooms and a kitchen. According to him, the kitchen was being utilised as a lunchroom with places to sit and eat. One room was set up like a classroom with a writing board and desks for two teachers at the front of the class room. He says they were spaces for approximately 20 students in that room. The gallery was being used as a recreation area. One of the other rooms, he says, was set up as a principal s office, while another of the rooms was set up as a tutoring room. The last room, he says, was used as a storeroom. He did not see any beds. This evidence was not challenged in cross-examination. 48. I accept the evidence of Lee King, with respect to the outfitting of the upper storey of the building. The evidence of Ms. Sammy under cross-examination is, in my view, somewhat consistent with that of Lee King. From the evidence it is clear that the upper storey of the building is outfitted and used for the purpose of operating a private school and not as a residence. This in my opinion accords with Ms. Sammy s evidence that when she sleeps over, she uses a fold away bed located in the back bedroom of the premises. Further when asked about her conversation with Lee King, in cross-examination, Ms. Sammy immediately sought to volunteer a reason for her presence on the premises during the school vacation. It would seem to me that if Page 21 of 36

22 the premises are being used by her as a dwelling house, as she says, there would be no need to give an explanation for her presence on the premises during the school vacation. 49. Further it is clear from the evidence and the photograph of the gallery of the upper storey admitted into evidence that despite her claim that her services are focused on the mentally and/or physically challenged she also assists a number of secondary school students after-school hours. Some of these, she admits, are charged a fee, some, in particular students on the athletic teams of two secondary schools, are tutored free of charge. 50. With respect to the occupation of the upper storey by the first claimant and I find as a fact that, except for the period when the premises were used as a residence for her and her family while repairs were being done on their home at Federation Park, the first claimant and her husband resided at Federation Park and not on the premises. A blanket statement that the premises were used from time to time to accommodate visiting relatives does not, in my view, establish use as a dwelling. No particulars are given about these visits. In any event it would seem to me that such user, if true, would be merely temporary. Neither in my opinion does the use of portions of the upper storey to store the first claimant's wedding gifts, even if true, necessarily equate with the use of the premises as a dwelling. As in the approach of the Court of Appeal in the HV Holdings case the situation must be considered as a whole and approached with a measure of common sense. To my mind it is Sammy's use of the premises which will determine its user from the year Page 22 of 36

23 51. It is not in dispute that the premises are at present used to operate a school. It would seem to me that whether called a home school or not by the provision of extra lessons and private tutoring to students it is clearly a commercial enterprise. Similarly, whether or not it is a profit-making enterprise is also irrelevant. 52. In the case of Rolls v Miller[ ] All ER Rep. 915 the Court of Appeal was required to determine whether a proposal to use a dwelling house as a home for working girls was in breach of the covenant not to use the premises for any trade or business of any description. Despite the fact that the proposed user was stated to be a non-profit activity the Court of Appeal came to the conclusion that it was a business. In that case, the Court was of the view that while payment and profits were relevant considerations in some circumstances, the fact that no payments were being received or no profits made was not conclusive of the enterprise not being a business. Similarly in the case of Portman v Home Hospital Association (1879) 27 Ch.D 81n, Master of the Rolls Jessel was of the view that the test is not the receipt of a profit but rather the purpose to which the house was put. 53. In the instant case it would seem to me that even if Sammy's protestations of a lack of profit are true, on her own admission she receives fees or contributions from a number of students. From that income, she is able to pay the $4,000 a month rent charged by the claimants as well as the stipend both she and her sister and the other assistant receive. In any event it is clear, and indeed not in dispute, that the upper storey is being used for the purpose of operating a school to provide tuition for special needs children and extra lessons and private tutoring for secondary school students. In this regard the user is clearly commercial. Page 23 of 36

24 54. According to Sammy, in addition she also uses the upper storey as an alternative dwelling. I do not accept this evidence. It is clear from her evidence that she and her family live elsewhere. The fact that she may spend the occasional night at the premises does not in my opinion convert her user of the premises from commercial to residential. In the case of Macmillan & Co. Ltd v Rees [1946] 1 All E.R. 675 the question was whether a condition in a lease, which stated that the premises were not to be used for any other purpose than as offices for the tenant s business but which also granted a licence to the tenant or her partner to sleep upon the premises should they so require, converted the letting from commercial premises to that of a dwelling house. The Court of Appeal held that the fact that the tenant s business partner slept on the premises and ate some meals there did not have the effect of making the premises a dwelling house. 55. Similarly, in the case of Greig v Francis and Campion Limited (1822) 38 TLR 519, the question for the court was, in circumstances where premises were used both as a dwelling house and as a shop, whether the Increase of Rent and Mortgage Interest ( Restrictions) Act 1920 applied. In that case the test was stated to be a question of fact as to what was the real, main and substantial purpose of the premises. 56. The fact that no alteration has been made to the upper storey since it was last used as a dwelling house is in my view of no import. Indeed, in the case of Wilkinson v Rogers (1864) 2 De GJ & Sm 62 It was held that the fact that there were no architectural or structural changes made to the building made no difference. What was relevant was the use to which the building was put. Page 24 of 36

25 57. In my opinion since the year 2007 the real main and substantial purpose of Sammy s use of the upper storey was for the operation of the school and constituted a commercial business. In my opinion therefore the building is presently used for commercial business and not as a dwelling. 58. I find as a fact therefore that (i) the rents by the subtenants are in excess of the rent payable under the statutory lease; (ii) during the period 1984 to 1985 the upper storey was used for the purpose of operating a bar for which a liquor licence was obtained and (iii) the building is at present being used solely for commercial business. What is the effect of these acts on the tenancy? 59. With respect of the existing tenancy the defendant submits that in the circumstances the claimants are in breach of the terms and conditions of the tenancy in that: (i) the rental of the premises to subtenants at a rent in excess of the rent payable by them to the defendant is contrary to section 5(8) of the Act; and (ii) the utilisation of the entire premises for commercial business rather than dual purpose for which the lease was granted; and the use of the upper storey for a business involving the use of a liquor licence is contrary to covenant (2) in the 1969 lease. 60. In this regard the claimants, while admitting that the rents payable by the hardware store and subtenants of the upper storey subsequent to 1985 were and are in excess of the rent payable to the defendant, submit that that: (i) the Act contains no provision allowing the landlord to terminate the lease for a breach of section 5(8); (ii) even if the whole building was being used Page 25 of 36

26 for commercial purposes, and this is denied, there is nothing in the Act that says that after 1981, the building must be in actual use as a dwelling; and (iii) the defendant continued to collect rent, despite the knowledge of the rents charged to the hardware store and the fact that the present subtenant of the upper floor is using the premises to operate a home school in the circumstances the defendant has waived its right to terminate the tenancy as a result of these alleged breaches. 61. In any event, the claimants submit there is no counterclaim by the defendants seeking either possession or forfeiture nor has the defendant at any time called upon the deceased or the claimants to terminate the tenancy or deliver up possession of the premises as a result of the breach of any covenant or condition of the tenancy. 62. Insofar as the user of the premises for a business involving a liquor licence is concerned the use of the premises for a commercial business involving a liquor licence was clearly in breach of the claimants covenants under the 1969 lease and by extension the terms and conditions of the statutory tenancy. In the absence of words which attach liability only in circumstances where the lessees permit such use the terms of the covenant are, in my view, absolute: Prothero v Bell (1906) 22 TLR 370. In my opinion any use of the premises for a business involving the use of a liquor licence is prohibited. Accordingly the fact that the bar was not operated by the claimants or on their behalf, or within the knowledge of the claimants is in my view, not relevant. Neither in my opinion is the fact that the claimants may have terminated the subtenancy immediately upon the knowledge of the breach relevant, except maybe with respect to relief from forfeiture which is not an issue for my determination. Once the premises Page 26 of 36

27 have been used for a commercial business involving the use of a liquor licence in my view the claimants are in breach of the covenant. 63. Similarly, in my view, the liability with respect to the use of the building in any way other than a dwelling house and commercial business is equally as strict. It is clear that the object of the covenant was to ensure that the land was not used strictly for commercial purposes, but retained some residential character. In my view the use of the building only for commercial business is in breach of the covenant. By covenant (3) any such breach or non-observance entitles the defendant to re-enter and repossess the land. 64. However the effect of renting the building or any part of it to subtenants for rent in excess of the lease rent is not so clear. The Act provides no remedy for such a breach. The question therefore is what is the effect of section 5 (8) of the Act. As we have seen section 5(8) states: A tenant has the right to assign or sublet with the consent of the landlord, which consent shall not be unreasonably withheld, but the rent payable by any subtenant shall not exceed the rent payable by the tenant of the landlord under this Act. 65. I do not think it can be disputed that some effect must be given to the words of the Act. Neither can it be disputed that the intention must have been to prevent a tenant making a profit from subletting the land or the building on the land at the expense of the landlord in circumstances where the landlord s ability to make a profit from the rental of the land has been severely curtailed by the Act. Page 27 of 36

28 66. Section 5 of the Act sets out the terms and conditions of the statutory lease established by the Act rather than by the agreement of the parties. Of course the difficulty that arises is that whereas by the 1969 lease provision is made for a remedy in the event of a breach of any of the lessee s covenants no such provision is made in the Act. 67. Since some effect must be given to the section, and in particular the stipulation contained in the section, the question here is whether this stipulation operates as a covenant or a condition. If it operates as covenant, then, in my opinion, it falls within the ambit of covenant (3) in the 1969 lease and a breach of it will result in the lease being voidable at the instance of the defendant. If, however, the provision operates as a condition then the lease will be determinable even in the absence of an express provision for re-entry if the event specified as a condition subject to which the term was created happens: Hill and Redman s Law of Landlord and Tenant 14 th edition, paragraph 392 at page In the case of Bashir v the Commissioner of Lands [1960] AC 44 a similar dilemma was presented to the Judicial Committee of the Privy Council. Under consideration was a grant which incorporated both the provisions of an Ordinance and special conditions peculiar to that grant. It was accepted however that, despite the fact that the grant was not signed by the grantee, and only by the grantor, and contained no statement that the grantee covenanted or agreed or promised to perform or observe any of the special conditions contained in it the grant represented, in law, a lease of the said land to the grantee. Page 28 of 36

29 69. The question for the Judicial Committee s determination was whether a special condition set out in the grant mandating the grantee to build a hotel within a certain time and within certain specifications constituted a covenant or a condition of defeasance. If it was a covenant then, in accordance with a provision in the Ordinance, upon a breach the grantee would be entitled to seek relief from forfeiture. If the special condition constituted a condition of defeasance however then the right to relief from forfeiture provided by the Ordinance would not apply and the Crown would be entitled to determine the lease without recourse to the court. 70. In this case the Judicial Committee accepted the appellant s submission that the use of the words special conditions in the Ordinance was not to be interpreted as words of art so as to take effect, as conditions of defeasance as opposed to covenants. 71. their Lordships are unable to hold that this enactment draws any clear-cut and consistent distinction between the word covenant as meaning an obligation laid on the lessee, which he contractually bound to observe or perform and the word condition as meaning a stipulation which the lessee may fulfil or not, as he chooses, but which if not fulfilled is to operate as a condition of defeasance In their Lordships judgment clear words would be necessary to justify the imputation to the legislature of an intention that the building conditions should not take effect as covenants, but merely as conditions of defeasance which would involve a radical departure from the commonly accepted practice. Their Lordships find no words in the Ordinance Page 29 of 36

30 clearly enjoining acceptance of this construction of the Ordinance and they decline to adopt it : per Lord Jenkins at pages 54 and In the circumstances the Judicial Committee determined that effect of the special condition contained in the grant was that it was a covenant. Further, even if it could be regarded as having the dual character of a covenant and condition, a stipulation of this combined character would have the effect of attracting the remedy by way of forfeiture subject to relief as provided by the Ordinance. 73. In the instant case, like Bashir's, the relevant clause was not contained in a formal lease signed by the deceased nor does the statutory lease contain any words to the effect that the deceased covenants or agrees or promises to perform or observe the provisions of section 5(8) or indeed any of the other terms and conditions set out by the Act. In the instant case the word covenant is not found in the Act, instead the words terms and conditions are used. These facts do not however, in my opinion and in accordance with Bashir s case, preclude me, where appropriate, from treating the obligation imposed by the Act as a covenant as opposed to a condition. Neither, in my view does the fact that the obligation is imposed by statute and not by agreement prevent such a conclusion. According to Bashir what is relevant is the intention of the legislation. 74. In the instant case, and particularly given the fact that there is no counterclaim by defendant, the distinction between the two may be more cosmetic than real. The effect of the distinction is described by Lord Jenkins in Bashir as follows: Page 30 of 36