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Mid-West Holdings Ltd v iTaukei Land Trust Board [2020] FJHC 845; HBC146.2019 (16 October 2020)

IN THE HIGH COURT OF FIJI
IN THE WESTERN DIVISION
AT LAUTOKA


CIVIL JURISDICTION


Civil Action No, HBC 146 of 2019


BETWEEN


MID-WEST HOLDINGS LIMITED a private company incorporated in Fiji and having its registered office at Corner Point, Corner of Nadi Back Road, Nadi.


PLAINTIFF


A N D


ITAUKEI LAND TRUST BOARD (formerly known as Native Land Trust Board) a statutory body created under the iTaukei Land Trust Act, Cap 134 having its registered office in 431 Victoria Parade, Suva.


DEFENDANT


Appearances : Mr Roopesh Singh for the plaintiff
Mr Josefa Cati for the defendant


Hearing : Thursday, 27th August, 2020 at 9.00am


Judgment : Friday, 16th October, 2020 at 9.00am


J U D G M E N T


[A] INTRODUCTION


(01) The matter before me stems from the plaintiff’s amended originating summons filed on

20-05-2020. The plaintiff seeks following declarations and orders by originating Summons;


  1. THAT a declaration that the termination of lease and re-entry by the

Defendant on Agreement to Lease TLTB No: 4/11/40550 containing an area of 5.2609 Ha in the District of Ba is invalid and of no legal effect.


  1. THAT the Agreement to Lease TLTB No: 4/11/40550 containing an

area of 5.2609 Ha in the District of Ba is valid and in force.


  1. THAT the Defendant accept rental in the sum of $13,804.00 as rental

for the period 1 of January 2019 till June 2019 for the Agreement to Lease TLTB No: 4/11/40550 containing an area of 5.2609 Ha in the District of Ba.


  1. IN the alternative Damages as to the value of Agreement to Lease

TLTB No: 4/11/40550 containing an area of 5.2609 Ha in the District of Ba.


  1. Interest on any monetary sum.
  2. Costs on client/solicitor indemnity basis.
  3. Any further or other order as this Honourable Court may deem fit in

the circumstances.


(02) The grounds relied upon by the plaintiff are stated as;
  1. THAT the Plaintiff was at all material times is the leasee of the land

comprised in Agreement to lease TLTB No: 4/11/40550 containing an area of 5.2609 Ha in the District of Ba (the said land).


  1. THAT the lease for the said land was valid for a period of 99 years

effective from the 01 of January 2015.


  1. THAT the lease for the said land is for Tourism purposes.
  2. THAT on the 31 of May 2019 the Plaintiff attempted to pay ground

rental with the Defendant, in the sum of $13,804.00 as required under the invoice issued by the Defendant for rental for the term 1 of January 2019 till June 2019.


  1. THAT the Defendant refused to accept the rental that was proffered by

the Plaintiff and informed verbally that the lease to the said land had been terminated. (purported termination)


  1. THAT the Defendant had issued a purported notice under Section 105

of the Property Law (Section 105 Notice) seeking to terminate the lease for the said land and notifying that the Defendant will re-enter the said land, which notice was purportedly served on a representative of the Plaintiff sometime on the 22 of October 2018.


  1. THAT after service of the notice the Defendant has continued to deal

with the Plaintiff.


7.1 Through various emails intimating that the lease is

valid and requiring rent to be paid;


7.2 Providing a time limit to pay rent and negotiating

payment of rental;


7.3 Issuing invoice for rental for the period from January

2019 till June 2019.


  1. THAT by the above communications and representations being made

by the Defendant (as referred to hereinabove in paragraph 7) to the Plaintiff the Defendant effectively cancelled and waived the effect and force of the Section 105 notice.


  1. THAT at all material times due to the above communications and

representations being made by the Defendant (as referred to hereinabove in paragraph 7) to the Plaintiff, the Plaintiff took the lease for the said land to be valid and extent.


  1. THAT the purported termination of the lease for the said land is in

breach of Section 105 of the Property Law Act;


PARTICULARS


No valid notice of termination was served on the Plaintiff and re-entry notice specifying to the Plaintiff;


  1. The alleged particulars of breaches and;
  2. Requiring the Plaintiff to remedy such breach
  1. THAT any purported termination and re-entry of the lease for the said

land at all material times is in breach of Regulation 15 of the iTaukei Land Trust (Lease ad Licences) Regulation 1984 in that no notice of re-entry onto the said land.


  1. THAT as such the purported termination and re-entry is illegal and of

no legal consequence.


  1. THAT the Defendant has acted in breach of the Section 105 of the

Property Law Act and in breach of the Regulation 15 of the iTaukei Land Trust (Lease and Licences) Regulation 1984.


(03) The plaintiff’s application for relief against the forfeiture of the agreement for lease is

contested by the defendant. The defendant filed an affidavit in opposition comprises 59 paras and with 21 annexures and a supplementary affidavit in opposition. The factual story is long and complicated. Both parties filed helpful written submissions and I am grateful for the submissions.


(04) The parties have filed five (05) affidavits for consideration.

Shareholder of Mid-West Holdings Ltd, (the plaintiff) in support, sworn on 10-06-2019.


(B) The affidavit of Mr Kaveni Naiduki, the Estate Officer in the employ

of the iTaukei Land Trust Board (the defendant), in opposition, sworn on 29-06-2020.


(C) The affidavit of Mr Jiwan Ram aka Shiu Ram, in reply, sworn on

20-07-2020.


(D) The supplementary affidavit of Mr Isoa Tuwai, the Manager, Tourism

Department, in the employ of iTaukei Land Trust Board, in opposition, sworn on 13-08-2020.


(E) The affidavit of Mr Jiwan Ram aka Shiu Ram, in reply, sworn on

24-08-2020.


[B] THE BACKGROUND AND THE DETERMINATION


The subject matter


(01) The dispute concerns the iTaukei Land known as “Nacomeke” located in the province of

Nadroga/Navosa, contained in Agreement for Lease TLTB No.: 4/11/40550, containing an area of 5.2609 hectares. (Annexure marked ‘B’ referred to in the affidavit of Mr Jiwan Ram sworn on 10/06/2019].


(02) The iTaukei Land had been leased to Mid-West Holdings Ltd (MWHL), the lessee, for

tourism purpose on 02-11-2015 by the iTaukei Land Trust Board (Board), the lessor, for a term of Ninety Nine (99) years commencing on 01-01-2015 at the yearly rental of $7,000.00.


(03) The agreement contained (amongst other provisions) covenants on the part of the lessee

in the following terms;


2(a) To pay the rent herein before reserved at the times and in the manner

aforesaid without any deduction whether formally demanded or not.


2(b) The tenant shall pay a yearly Lease Administration fee of $575.00

(Five Hundred and Seventy Five Dollars) or such amount as may be assessed by the Board thereafter. Such fee shall be paid half-yearly in advance on the first days of January and July in every year.


2(c) Not to use the land for any purpose other than for Tourism purposes.


2(d) To prepare and lodge with the lessor for the lessors approval on or before the 1st July, 2016 detailed design plans, elevations and specifications (hereinafter called “the plans”) of a Resort facility to be constructed of substantial materials on the land.


2(e) To commence construction on or before the end of the 1st day of January, 2017 of the Tourist Facility in accordance with the plans as approved in writing by the lessor and to complete construction of the tourist facility on or before the 31st December 2019.


2(f) Not to take any substantial alterations to the plans approved by the Lessor or to buildings, improvements or structures on the land or erect any further buildings, improvements or structures on the land without the prior written consent of the Lessor.


2(g) At all times after the commencement of the operation, to keep the said

operation open for Business and manage and conduct it in an efficient,

orderly and lawful manner.


2(h) To obtain all statutory permissions consents approvals and licences from any relevant Government Department or local Authority for any use or development which the Lessee proposes to carry out on the land and to duly and punctually comply with each and every terms or condition of all such statutory permissions, consents, approvals and licences so obtained and to produce copies of such statutory permissions, consents, approvals and licences to the Lessor if required to do so at any time.


The first breach notice


(04) On 03-07-2017, the landlord, iTLTB, issued a notice pursuant to Section 105 of the

Property Law Act, Cap 130 asserting that the lessee had breached a number of covenants and requiring the lessee to remedy the breaches. The notice is in the following terms;

(Annexure KN-8 in the affidavit in opposition of Kaveni Naiduki).


NOTICE UNDER SECTION 105 – PROPERTY LAW ACT


Monday 3 July 2017.


The Managing Director,

Midwest Holdings Limited,

PO Box 9299,

Nadi Airport,

Fiji Islands


Dear Sir/Madam,


Re: ITaukei Land known as Nacomeke; District: Momi; Province: Nadroga/Navosa; Area: 5.2609 Ha; TLTB No: 4/11/40550; Term: 99 years with effect from 01/01/2015.


A recent inspection of the above holding reveals that you have committed breaches of the terms and conditions of your lease, specifically Clauses 2 (d), (h), (q) and Special Conditions (b).


Clause 2(d) – Failed to lodge detailed plans ....”To prepare and lodge with the lessor for the lessors approval on or before the 1st day of July, 2016 detailed design plans, elevations and specifications (hereinafter called “the plans”) of a tourist resort to be constructed of substantial materials on the land.”


Clause 2 (h) – Failed to obtain necessary statutory approvals ....”To obtain all statutory permissions consents approvals and licenses from any relevant Government Department or Local Authority for any use or development which the lessee proposes to carry out on the land and to duly and punctually comply with each and every term or condition of all such statutory permissions, consents, approvals and licenses so obtained and to produce copies of such statutory permissions, consents, approvals and licenses to the lessor if required to do at any time.”


Clause 2(q) – Failed to keep the land clean and tidy .... “To keep the land clean and tidy and free from noxious weeds, vermin and pests.


Special Conditions (b) - Failed to pay educational fund for (2016 and 2017).... “The lessee must pay $10,000 per annum as education fund for the landowning unit and subject to review in every 5 years.”


(05) I note that the notice included what the landlord required the lessee to do which is in

the following terms;


“As this constitutes a breach of a term or conditions of your tenancy you are

hereby required to remedy the breach, and pay to the board as compensation the sum of $35,204.03. (Thirty five thousand and two hundred and four dollars and three cents)


The breakdown of the penalty is as follows:


Lease rental balance outstanding for (01.07.2017 – 31.12.2017)- $ 3,531.53
Lease Administration (01.07.17 – 31.12.17) - $ 227.50
Educational fund (01.01.2016 – 01.01.2017) - $20,000.00
Breach of lease conditions - $11,445.00


(Emphasis added)


(06) The breach notice contained the following warning;

TAKE NOTICE that if you to remedy the breaches and pay as herein demanded, within one (1) month from the date of service of this notice nor be granted relief against forfeiture under section 105 of the Property Law Act, your lease of the said holding will thereupon terminate and you are to quit and give vacant possession to the Board as Landlord.


FURTHER TAKE NOTICE that such re-entry shall not prejudice any rights or remedies which may have accrued to the Board against you in respect of this breach.


(07) It was admitted that the lessee had made default in the performance of covenants 2(d),

2(h), 2(q) and special condition (b).


(08) Counsel for the lessee, Mr Singh, submitted in the written submissions filed on 27-08-

2020; (Reference is made to paragraph 11 of the written submission)


11. The defendant charged the plaintiff a sum of $35,204.03 for the

breach. This sum was paid by the plaintiff. In fact, this honourable court is referred to Exhibit B, C and D to the affidavit in reply of the plaintiff where current statements from the defendant are annexed.


[Emphasis added]


(09) This submission is erroneous. I am not prepared to accept this submission. Turning to the

words, it is clear from the Notice, as I perceive it, there are outstanding arrears of annual rent of $3,531.53. There are outstanding arrears of lease administration fees of $227.50. There are outstanding arrears of educational fund of $20,000.00. The lessor is asking only a sum of $11,445.00 as the penalty rather a fine or sum of money in the nature of a fine for the breach of lease conditions. The Board does not claim the payment of $35,204.03 to be compensation but rather; penalty for the breach, the outstanding arrears of rental, educational fund and lease administration fees.


(10) Therefore, it is not right to say that the payment of $35,204.03 demanded by the Board is

compensation for the breach of covenant 2(d), 2(h), 2 (q) and special condition (b). It is clear that the payment demanded by the Board is not “compensation” for the breach of the covenants under Section 105(1) or (2) of the Property Law Act. The Board does not claim the payment of $11,445.00 to be compensation but rather penalty for the breach. The Board claims the payment of $23,759.03 ($35,204.03 - $11,445.00) for the outstanding arrears. The lessee’s submission that “the lessor charged a sum of $35,204.03 for the breaches” is without substance. This may be a legitimate tool of advocacy but it should not mislead the court. The words in the notice dated 03-07-2017 are straightforward and lack ambiguity. It is not necessary for a construction to be sought as to the meaning that the words were intended to convey separate from their plain meaning[1].


It is a fundamental proposition of law that words must be given their natural meaning and certainly not as Humpty Dumpty would have it what he or anybody else might say they mean[2].


(11) In Danam and Company Ltd v AG (supra), Byrne J similarly found the Director of

Lands insistence on a payment being made for non-compliance with a building condition could not be classified as compensation for the breach of a covenant under section 105 (1) or (2) of the Property Law Act. His Lordship said at paragraph 34 of the judgment:


“Compensation under Section 105 (1) is not payable until notice to forfeit the lease is served on the lessee. No such notice has been served. Likewise Section 105 (2) is inapplicable because the lessor has not proceeded to enforce the right of re-entry and forfeiture.


(12) The landlord says that the penalty of $11,445.00 is still owing. On the other hand the

lessee says that it has paid the penalty of $11,445.00.


I refer to paragraph (9) of the affidavit in reply of Jiwan Ram sworn on 20-07-2020. He
states;


  1. THAT as to paragraphs 16, 17 and 18 of the said Affidavit I say that the Defendant was paid the sum of $35,204.03. The breach I am advised by my Counsel and believe was paid and the breach notice referred to the Defendant is irrelevant to these proceedings. I annex hereto and mark as Exhibit “B” are the current statement of account in relation to the Agreement to Lease with the Defendant. All monies owed were cleared and paid.

FUTHERMORE, I annex hereto and mark as Exhibit “C” is receipt evidencing payments of rental for the years 2019. Also annexed hereto and marked as Exhibit “D” are copies of statements for the year 2019.


I perused annexure ‘B’ and ‘C’ annexed to the affidavit. There is nothing in annexure

‘B’ and ‘C’ indicating the payment of $11,445.00 (the penalty). The lessee has not established the payment of $11,445.00. The lessee’s assertion that it paid penalty of $11,445.00 is not supported by any evidence before the court, and it is a mere assertion without evidence that supports it. Therefore, I accept the lessor’s argument that the penalty of $11,445.00 (for breach of lease conditions) was never paid by the lessee. Therefore, there is a penalty for breach of covenants, which is still owed and be payable by the lessee. Furthermore, nothing was done by the lessee to remedy the breach of covenant 2(d), 2(h), and 2(q).


The lessor upon the expiry of the proper period stated in the notice, did not effect re-entry

to terminate the lease and bring about its forfeiture. It is rather startling that the landlord accepted lease rentals in respect of the period later than the breach of covenants with notice of the breach and recognized the continuing existence of the lease. The lessor cannot escape the position that, by allowing the lease to go on for over two years and by receiving rentals in respect of the period (until 22/4/2019), the lessor unequivocally intimated an intention that the agreement for lease should be considered as subsisting after the reasonable time had elapsed within which the lessee was bound to fulfill covenant 2(d) and 2(h) and notwithstanding that to its knowledge the lessee had not done so.


(13) The notice dated 03-07-2017, clearly specifies the breaches complained of, viz, “failed to

lodge detailed plans”, “failed to obtain necessary statutory approvals”, “failed to keep the land clean and tidy”, “failed to pay educational funds” and specifies a time period the breaches to be remedied, viz, “.......within one month from the date of the service of this notice” and makes it clear that the lessee is required to remedy the breaches and pay to the Board a sum of $11,445.00 for the breach of covenants. This is rather a fine or sum of money in the nature of a fine and not compensation.


(14) In the current climate, it is desirable to set out Section 105(1) of the Property Law Act,

(Cap 130) which is in these terms;


Restrictions on relief against forfeiture of leases


105. – (1) A right of re-entry or forfeiture under any provision or stipulation in a lease for a breach of any covenant or condition, express or implied, in the lease shall not be enforceable, by action or otherwise, unless and until the lessor serves on the lessee a notice


(a) Specifying the particular breach complained of; and

(b) If the breach is capable of remedy, requiring the lessee to remedy the breach;

and


(c) In any case, requiring the lessee to make compensation in money for the breach, and the lessee fails, within a reasonable time thereafter, to remedy the breach, if it is capable of remedy, and to make reasonable compensation in money, to the satisfaction of the lessor, for the breach.

(2) Where a lessor is proceeding, by action or otherwise, to enforce a right of re-entry or forfeiture, the lessee may, in the lessor’s action, if any, or in any action brought by himself, apply to the court for relief; and the court may grant or refuse relief, as the court, having regard to the proceedings and conduct of the parties under the foregoing provisions of this section, and to all the other circumstances, thinks fit; and in case of relief may grant it on such terms, if any, as to costs, expenses, damages, compensation, penalty or otherwise, including the granting of an injunction to restrain any like breach in the future, as the court, in the circumstances of each case, thinks fit.


(15) Section 38(1) of Agricultural Landlord and Tenancy Act is in a form commonly found in

statutes relating to tenancies and leases. In material respects it is in the same terms as Section 105(1) of the Property Law Act (Cap 130) and Section 146 of the Property Law Act 1925(UK). The provision has its genesis in Section 14 of the Conveyancing and Law of Property Act 1881 (UK)[3].


(16) The leading case on whether compensation must be claimed in a notice to quit is Lock v

Pearce[4]. That was a decision under s.14 of the Conveyancing and Law of Property Act 1881. A notice given under the section required the lessee to remedy a breach of covenant but did not require payment of compensation in money. The notice was nevertheless held to be good. Lord Esher M.E. at 276 said:


“Therefore it seems to me that the meaning of the section is that the breach must be remedied if it can be and there must be compensation besides that, if there is anything for which to compensate. I go further, and say that the lessor need not, if he does not want any compensation. Ask for it. If he does not want any compensation, why should he ask for what he does not want? The effect of this not asking for it, to my mind, is that if he obtains an order in an action of ejectment, requiring the lessee to remedy that breach, he cannot subsequently ask for any further compensation. That seems to me the proper meaning of the section.”


Lindley L.J. at 279 said:


“Supposing the lessor does not want compensation, is the notice to be held bad because he does not ask for it? There is no sense in that. The meaning is to be found by looking a little further on. The sub-section begins by saying that the right of re-entry or forfeiture shall not be enforceable unless proper notice is given and the lessee fails within a reasonable time afterwards to remedy the breach and to make reasonable compensation in money to the satisfaction of the lessor. The sense of that is that the lessor must tell the lessee what he wants done. The lessee is entitled to know what his landlord complains of....”


(17) This decision of the Court of Appeal has been consistently applied ever since[5].

(18) The breach of covenant 2(d), 2(h), 2(q) are capable of remedy. It is common ground on

the pleadings that the lessee did not remedy the breach of covenants 2(d), 2(h), and 2(q). It is also common ground on the pleadings that before the expiration of the one month time period mentioned in the notice given and served on the lessee, the lessee did not apply to the Court under Section 105(2) of the Property Law Act seeking a relief against forfeiture.


(19) The law is clear that upon the expiry of the proper period stated in the notice, the landlord

must effect re-entry to terminate the lease and bring about its forfeiture. Re-entry may occur by the physical retaking of possession of the premises, or by doing what the law regards as equivalent to actual re-entry, namely the issue and serve of writ of possession[6].


(20) As I said in para (18) above, there is no dispute that the lessee did not remedy the breach

of covenants 2(d), 2(h), 2(q). The Board did not effect re-entry upon the expiry of the period stated in the notice dated 03-07-2017. The Board has not proceeded to enforce the right of re-entry or forfeiture upon the expiry of the period stated in the notice. Therefore, the lease has not been determined. The forfeiture has not been completed. The issue and service of the writ of possession or physical retaking of the possession operates as a final election by the landlord to determine and cancel the terms of the lease. This did not occur in this case. The landlord has not forfeited the lease because it had neither re-entered physically, nor effected a constructive re-entry by commencing an action for possession. Instead, the lease continued with the landlord’s knowledge of the breach and accordingly the landlord demonstrated a determination not to terminate the agreement for lease and bring about its forfeiture upon the expiry of the period stated in the noticed dated 03-07-2017.


(21) It was admitted that there had been breaches of covenants 2(d), 2(e), 2(h) and 2(q) on the

part of the lessee. The breach by the lessee of covenant 2(d), 2(e), 2(h) and 2(q) is undisputed.

The questions for determination are whether the breaches of covenants mentioned in the notice dated 03-07-2017 were continuing or whether there was a “once and for all” breach.


(22) Covenant 2(d) of the agreement for lease required the lessee “to prepare and lodge with

the lessor for the lessor’s approval on or before the 01st July, 2016 detailed design plans, elevations and specifications (herein after called the plans) of a Resort facility to be constructed of substantial materials on the land”.


(23) Covenant 2(e) of the agreement for lease required the lessee “to commence construction

on or before the end of the 1st day of January, 2017 of the tourist facility.....”.


Covenant 2(h) required the lessee to “obtain all statutory permissions consents approvals and licences from any relevant Government Department or local Authority for any use or development which the Lessee proposes to carry out on the land and to duly and punctually comply with each and every terms or condition of all such statutory permissions, consents, approvals and licences so obtained and to produce copies of such statutory permissions, consents, approvals and licences to the Lessor if required to do so at any time”.


(24) In Re King, deceased, Robinson v Gray[7] Lord Denning MR said that where the relevant

obligation is to perform an act by a given date or within a reasonable period of time, it will fall to be classified as an obligation that can be broken only once. Thus if the particular act has not been performed by that date or within a reasonable time (as the case may be) there is a single breach of covenant.


A covenant to build before a stated date is an example of covenants which can only be broken once Stephen v Junior Army & Navy Stores Ltd[8]; Jardine v AG for Newfoundland[9].


In Larking v Great Western (Nepean) Gravel Ltd[10], Dixon J in the High Court of Australia said:


“If a covenantor undertakes that he will do a definite act and omits to do it within the time allowed for the purpose, he has broken his covenant finally and his continued failure to do the act is nothing but a failure to remedy his past breach, and not the commission of any further breach of the covenant. His duty is not considered as persisting and so as to speak, being forever renewed until he actually does what he has promised. On the other hand, if his covenant is to maintain the state or condition of affairs, as for instance, maintaining a building in repair, keeping insurance on foot, or affording a particular kind of lateral or vertical support to a tenement, then a further breach arises every successive moment of time during which the state or condition is not as promised, during which, to pursue the examples, the building is out of repair, there is no insurance cover, or the particular support is unprovided......The distinction may be difficult of application in a given case, but it must be regarded as one depending upon the meaning of the covenant. It is well illustrated by the construction given to the ordinary covenant that premises will be insured and kept insured against fire. Such a covenant is interpreted as imposing a continuing obligation to see that the premises are insured, so that the covenant cannot be broken once and for all, but, on the contrary, failure to insure involves a continuing breach until the omission is made good ........A covenant by a lessor to put the demised premises in repair is broken once and for all if a reasonable time for putting the premises in repair elapses without his doing so......but a lessee’s covenant to keep them in repair is continuing”.


(25) In my view, therefore, Clause 2(d), clause 2(e) and clause 2(h) imposed obligations, and

were examples of covenants which could only be broken once. They were broken by the lessee. The lessee undertook that it will do a definite act and omitted to do it within the time allowed. The lessee has broken the covenant finally. The lessee’s continued failure to do the act is nothing but a failure to remedy its past breach, and not the commissions of any further breach of the covenant.


(26) The obligation of the lessee in covenant 2(d), “To prepare and lodge with the lessor for

the lessor’s approval on or before the 1st July, 2016 detailed design plan, elevations and specifications of a Resort facility to be constructed of substantial materials on the land is” not of a continuing nature and the obligation was completely and effectively broken “once and for all” when the time for preparing and lodging with the lessor in accordance with the agreement lapsed, viz, 01st July 2016. The lessor knew that the design plan, elevation and the specification of the Resort facility was not prepared and lodged with the lessor on or before 01st July, 2016, yet the lessor allowed the agreement for lease to proceed until 08-05-2019 and accepted rentals up to 22-04-2019 . The lessor stood to the agreement and received benefits under it. The lessor thereby affirmed the agreement and waived its right to determine it for the breach by the lessee of covenant 2(d) thereof. The Board has waived its right to determine the lease for such breach.


(27) The obligation of the lessee in covenant 2(e) “To commence construction on or before

the end of the 01st day of January, 2017 of the Tourist facility......” is not of a continuing nature and the obligation was completely and effectively broken “once and for all” when the time for commencement of construction in accordance with the agreement lapsed on 01-01-2017. The Board (the lessor) knew that the lessee did not commence construction on or before 01-01-2017, yet the Board allowed the agreement for lease to proceed even after 01-01-2017 and accepted rentals even after 01-01-2017 and up until 22-04-2019. The Board stood by the agreement and received benefits under it even after 01-01-2017 and up until 22-04-2019. The Board thereby affirmed the agreement and waived its right to determine it for the breach by the lessee of covenant 2(e). The Board has waived its right to determine the lease for such breach.


(28) Clause 2(h) of the agreement for lease required the lessee to;

“To obtain all statutory permissions consents approvals and licences from any relevant Government Department or local Authority for any use or development which the Lessee proposes to carry out on the land and to duly and punctually comply with each and every terms or condition of all such statutory permissions, consents, approvals and licences so obtained and to produce copies of such statutory permissions, consents, approvals and licences to the Lessor if required to do so at any time”.


This is not a continuing nature and the obligation was completely and effectively broken “once and for all” when the time for obtaining statutory permission lapsed on 01-01-2017. Yet the Board allowed the agreement to proceed after 01-01-2017 and received lease rentals up to 22-04-2019 and thereby waived its right to determine it for the breach by the lessee of covenant 2(h). The Board has waived its right to determine the lease for such breach.


(29) Clause 2(q) of the agreement for lease required the lessee to “keep the land clean and tidy

and free from noxious weeds, vermin and pests”.


This is a continuing covenant and breaches of it are continuing breaches. A further breach arises in every successive moment of time during which the state or condition is not promised. So that a right of action accrues toties quoties when and as often as damage actually arises from breach of it.


The second breach notice of the lease


(30) On 22-10-2018, the landlord served another notice to remedy the breach of covenants,

pursuant to Section 105 of the Property Law Act, Cap 130. for the lessee’s failure to;


Clause 2(e): Failure to commence construction of the Tourist Facility within the prescribed time:


“To prepare and lodge with the lessor for the lessors approval on or before the 1st day of January 2017 of the Tourist Facility in accordance with plans as approved in writing by the lessor and to complete construction of the tourist facility on or before the 31st day of December 2019


(See annexure KN-10 in the affidavit in opposition of Mr Kaveni Naiduki, sworn on 29-
06-2020).


(31) I note that the breach notice included what the lessor required the lessee to do which is in

the following terms;


As the above mentioned breach does constitute breach of the terms and conditions of your tenancy you are hereby required to remedy the breach, and pay to the Board as compensation the sum of Eleven Thousand Four Hundred & Forty Five Dollars ($11,445.00)

(32) The breach notice contained the following warning;

TAKE NOTICE that if you fail to remedy the breaches, and pay as herein demanded, within six (6) months from the date of services of this notice nor be granted relief against forfeiture under section 105 of the Property Law Act, your lease of the said holding will thereupon terminate and you are to quit and give vacant possession to the board as Landlord.


(33) What occurred after the issuance of notice requiring the lessee to remedy the breach?

Under the heading “Discussions and Correspondence with MWHL” Mr Kaveni Naiduki

deposed that; (Reference is made to paragraph 24 to 32 of the affidavit in opposition sworn on 29-06-2020).


  1. After service of the Second Breach Notice in October 2018, several meetings were arranged between the Board and MWHL to discuss issues raised by MWHL regarding the approval of MWHL’s scheme plan and the concept plan. For clarity, the concept plan (a general overview of a proposed tourism development) submitted by MWHL to the Board is not the same as the detailed building/construction plans MWHL was required under to submit for approval by the Board.
  2. Between October and December, 2018 meetings were postponed about four to five times by representatives of MWHL, namely Metuisela Navunisaravi and Shama Dean (the internal auditor of MWHL who filed the notification and resolution annexed as KN-13). Annexed hereto and marked as “KN-14” is a copy of an email chain in which I reported to the then Manager Tourism Department Peni Qalo on the status of the meetings that were to be conducted with MWHL. I do recall during our correspondences with Metuisela that MWHL’s director Shiu Ram was out of the country attending to a medical treatment of a family member.
  3. In the emails annexed as KN-14 the landowners on 16 January, 2019 followed up on the payment of the education fund of $10,000 which MWHL was required to pay for the year 2019. MWHL was required to pay to the Board an annual education fund of $10,000 for the benefit of the landowners as required under clause (b) of the Special Condition – Other Benefits of the Tourism Lease.
  4. In January, 2019, I sent MWHL an invoice for payment of rent and education fund. Annexed hereto and marked “KN-15” is a copy of my email to MWHL attaching the said invoice.
  5. Notwithstanding the Second Breach Notice which dealt with the non-development of the lease land by MWHL, the invoice was sent as a courtesy reminder to pay the outstanding education and other fees.
  6. Another reminder was sent on 19 February, 2019 for payment of rent and education fund. Annexed hereto and marked as “KN-16” is a copy a TLTB email to MWHL following up on payment of rent and education fund.
  7. The Board, by letter dated 4 March, 2019, sent a further reminder to MWHL. Annexed hereto and marked as “KN-17” is a copy a TLTB letter and email to MWHL following up on payment of the education fund. There is also a reminder for MWHL to pay the breach fees of $11,445.00 which was owing from the Second Breach Notice.
  8. A further email follow up was sent to MWHL on 15 May, 2019 for the payment of rent and education fees. Annexed hereto and marked as “KN-18” is a copy a TLTB email to MWHL.
  9. It must be noted that in all the correspondences with MWHL referred to in paragraph 27 – 31 above, there was never any waiver, either expressly or impliedly, of the Board’s rights under the Second Breach Notice. In addition, the said correspondence was in relation to payment of the outstanding education fund.
(34) Upon the expiry of the proper period stated in the breach notice, the landlord on 08-05-19

effected re-entry to terminate the lease and bring about its forfeiture. The re-entry occurred by the physical retaking of possession. I note that the lessee had not applied before the expiry of the notice to court for relief against forfeiture arose under Section 105(2) of the Property Law Act. So, has the lessee lost its right to relief against forfeiture? This has not been pleaded in the lessor’s pleadings. In the lessor’s written submissions and argument before the court this point was not addressed at all. It seems to have been rather lost sight of.


(35) Under the heading “cancellation of lease and re-entry by the Board” Mr Kaveni Naiduki

deposed that; (Reference is made to paragraphs 33 to 37 of the affidavit in opposition sworn on 29-06-2020).


  1. During the time the Board was corresponding with MWHL there was never any genuine attempt by MWHL to remedy the breaches under the Second Breach Notice. There was no submission to the Board of any construction/building plan or any attempt made at all to request an extension of time for the said plans. Moreover, there was no payment of the breach penalty fees as per the Second Breach Notice by the 22 April, 2019 deadline.
  2. On or about 8 May, 2019 an inspection of the Tourism Lease land was conducted. The inspection noted that there was no development and the land remain vacant. A re-entry notice was duly affixed on the property. Annexed hereto and marked as “KN-19” is a copy of the inspection and re-entry report as well as the re-entry notice and record of service.
  3. The Board’s application for registration of re-entry was duly stamped with the Fiji Revenue and Customs Service on 22 May, 2019. Annexed hereto and marked as “KN-20” is a copy of the duly stamped and registered application for registration of cancellation.
  4. I am informed by our Legal Officer Josefa Cati and believe that, on account of the MWHL’s breaches and non-rectification thereof under the Second Breach Notice, the Board was entitled to and did lawfully cancel the Tourism Lease.
  5. If, in the alternative, the Tourism Lease is found to be still valid and in force (which the Board denies), the Board seeks orders that MWHL pays the sum of $25,249.00 plus interest as contained in the Board’s letter of 4 March, 2020.
(36) In reply, Mr Jiwan Ram deposed; (Reference is made to paragraphs (11) to (20) of the

affidavit in reply sworn on 20-07-2020).


  1. THAT as to paragraph 24 of the said affidavit I say that consultation with the Defendant was an ongoing exercise. And there were issues with the buildable area on the Agreement to Lease. I annex hereto and marked as Exhibit “E” is a copy of concept plan was lodged and duly accepted by the Defendant under the terms of the Agreement for Lease.
  2. THAT as to paragraph 25 of the said affidavit I say I do not agree that all meetings were postponed. I am advised and believe that the emails attached are self-serving emails.
  3. THAT as to paragraph 26 and 27 of the said affidavits I say that the monies demanded were duly paid by the Plaintiff as aforesaid.
  4. THAT as to paragraph 28 to 31 of the said affidavit I say that the monies demanded and required were cleared by the Plaintiff. The Plaintiff accepted these payments unconditionally and more significantly rental was charged from July 2019 onwards. This sum was also accepted by the Defendant and paid.
  5. THAT as to paragraph 32 of the said affidavit I say that the second breach notice for the reasons I have deposed earlier in paragraph 10 I believe was defective and the Defendant accepted rental from the Plaintiff in July 2019 thus waving the effect of the said notice.
  6. THAT as to paragraphs 33 of the said affidavit I say that there were numerous discussions in this matter with the Plaintiffs and the delay was also caused by the fact that the Plaintiff’s bankers had lost the original Agreement to Lease. After the completion of the survey plan by the Plaintiff it sought the release of the Agreement to Lease from its Bankers ANZ. I annex hereto and mark as “Exhibit F” are copies of letters attaching copies of the said plans.

FURTHER we were thereafter informed by our bankers that the Lease was lost.


  1. THAT even after the 22 April 2019 the Defendant accepted rental from the Defendant.
  2. THAT as to paragraph 34 of the said affidavit I say that the notice was not served on the registered office and in any event the breach notice was concocted against the Plaintiff by the Defendant.
  3. THAT as to paragraph 35 of the said affidavit I say that the stamped notice I am advised is defective and is not registered with the Registrar of Deeds.
  4. THAT I do not agree with the contents of paragraph 36 of the said affidavit.
(37) A number of challenges were ventured. The lessee primarily challenged the validity of

the second breach notice on the following grounds;


(A) The notice did not correctly identify the breach, and the notice therefore lacked clarity.


(B) The lessee has paid and remedied the first breach. The notice was invalid as it refers to a breach which has been paid and remedied.


(38) The lessee challenged the re-entry and the termination of the lease on the

following grounds;


(A) The re-entry and the termination of the lease is contrary to Section 57

of the Land Transfer Act – no notice in writing given to the lessee prior to re-enter and take possession.


(B) The re-entry and the termination of the lease is contrary to Regulation

15 of the iTaukei Land Trust (Leases and Licenses) Regulation 1984 – No notice in writing given to the lessee prior to re-entry to terminate the lease and bring about its forfeiture.


(39) I propose to take the para 38 above (A) and (B) first.

Section 57 of the Land Transfer Act


(40) The Registrar of Titles is acting under Section 57 of the Land Transfer Act when he

registers the cancellation of a lease. Before doing so, the Registrar is required to do two things. The first is to satisfy upon proof that the re-entry and recovery of possession by the lessor is lawful. The second is to require notice of the application to register the cancellation to be served on all persons interested under the lease or arrange publication of the application in the gazette before making any entry in the register. The second requirement is contained in proviso (b) to Section 57 of the Land Transfer Act[11].


(41) It is submitted by Mr Singh, as I understand it, (Counsel for the lessee) that the re-entry

to terminate the lease and bring about its forfeiture was invalid because the lessor has not lodged an application with the Registrar of Titles to register the re-entry and taking possession of the land.


(42) In reply, Mr Cati, counsel for the lessor, submitted that there is no requirement to lodge

an application with the Registrar of Titles to register the re-entry and taking possession of the demised land because the agreement for lease is registered with the Registrar of Deeds and not with the Registrar of Titles.


(43) I acknowledge the force of the submission of counsel for the lessor.

(44) An agreement for lease is registered with the Registrar of Deeds. It is not registered with

the Registrar of Titles because there is no ordinary lease. The lessor’s contention is correct. No entry is made in the register of Registrar. It is important to remember, as I significantly believe, the purpose of Section 57 of the Land Transfer Act is to cancel the registration of Title made in the register of Registrar of Titles. In the present case, the lessor is not required to lodge an application with the Registrar of Titles to register the fact of re-entry because the agreement for lease is not registered with the Registrar of Titles. In this case the lessee does not have a registered lease. There is no instrument of Title issued by the Registrar of Titles. The lessee has no title or right to the land on a registered instrument signed by the Registrar of Titles since there is no registration of title made in the register of the Registrar of Titles. Then, what is there to be cancelled? If there is nothing to be cancelled in the register of the Registrar of Titles, why should the lessor register the fact of re-entry by lodging an application with the Registrar of Titles?


(45) The lessor in this case is under no duty to register the fact of re-entry by lodging

an application with the Registrar of Titles. The Registrar of Titles is under no duty to make an entry in the register in relation to the re-entry because the agreement for lease is not registered with Registrar of Titles. In the current climate, I find it a source of amazement that anyone would suggest that lessor should lodge an application with the Registrar of Titles to register the re-entry and taking possession of the land contained in the agreement for lease.


(46) It is not right to say that the lessor in this case is required to lodge an application with the

Registrar of Titles to register the fact of re-entry in relation to the agreement for lease. There is no requirement in Section 57 of the Land Transfer Act or elsewhere in the ordinance. There is no authority for the proposition advanced on behalf of the lessee. Therefore, section 57 should be given its proper operation.


(47) The argument advanced on behalf of the lessee is not correct. Why should the Registrar

of Titles register the re-entry when there is no entry at all in the register kept at the Titles office? The lessee cannot derive any assistance from the High Court decision in Harley Alfred Jones & Others v iTaukei Land Trust Board[12] and Fiji Court of Appeal decision in Forum Hotels Ltd v NLTB and Others (supra). I could not see how the decision in Harley Alfred and Forum Hotels Ltd could have been of assistance to the lessee. The present case is quite different in its facts from Harley Alfred and Forum Hotels Ltd. In Harley and Forum there was no agreement for lease. The preliminary issues raised in those cases were the validity or legality of the action of the Registrar of Titles acting under Section 57 of the Land Transfer Act. In those two cases, the lessee had a registered lease. In the case before me the lessee does not have a registered lease.


The lessee fails on point (A) in para 38 above.


(48) Turning to point (B) in para 38 above, the lessee argues that the re-entry is invalid

because no notice in writing is given to the lessee prior to re-entry pursuant to Regulation 15 of the iTaukei Land Trust (Lease and Licences) Regulations.


Regulation 15 of the iTaukei Land Trust (Leases and Licences) Regulations.


(49) I cannot acknowledge the force of this criticism. I find the argument completely

unconvincing.


(50) It is desirable to set out the provisions of Regulations 15. It is in these terms;

15.-(1) It shall be impelled in every lease of native land commencing on or after the commencement of these Regulations that where the land demised is required by the Board for development (whether by the Board or otherwise) involving any use of the land, in whole or in part, which is materially different from the purpose for which the land was demised and in respect of which permission has been granted under the Town Planning Act, the Board may terminate the lease and resume possession of the land on the 30th day of June or the 31st day of December in any year during the term of the lease by notice in writing served on the lessee not later than one year before the date on which the Board desires to resume possession of the land, without prejudice to the rights and remedies of either party against the other in respect of any antecedent claim or breach of covenant.”


(Emphasis added)


(51) I stress the words “where the land demised is required by the Board for development”

and “the Board may terminate the lease and resume possession of the land”.


(52) That is not the case here. In the case before me the landlord has given notice under

Section (105) (1) of the Property Law Act requiring the lessee (tenant) to remedy the breaches of covenant relied upon. The landlord’s re-entry is based solely on the service and expiry of its notice under Section 105(1) of the Property Law Act.


(53) One word more, as I understand the covenants in the agreement for lease, there is no

express provision requiring the landlord, after first giving notice under Section 105(1) of the Property Law Act, requiring the lessee to remedy the breaches of covenant relied upon, after the expiry of the proper period stated in the notice, the landlord must give notice in writing to the lessee before re-entry and take possession of the demised land. I emphasize that there is no such requirement in Section 105(1) or elsewhere in the Property Law Act.


(54) In my opinion, there is no restriction on the exercise by the landlord of what I conceive to

be its legal right to re-enter and take possession of the demised land without giving notice in writing to the lessee, upon the expiry of the proper period stated in the Section 105(1) Notice, unless express provision to the contrary in the lease. I must say that there is no express provision to the contrary in the agreement for lease.


(55) The contention of the lessee on point (B) in para 38 above, is not correct.

(56) Therefore, the lessee fails on point (A) and (B) in para 38 above. I hold that the re-entry

and taking possession of the demised land to terminate the lease is subject to the protection of Section 105 (1) of the Property Law Act .


(57) I now turn to point (A), (B) in para 37 above.

The legality and the method of service of the breach notice dated 26-09-2018 issued pursuant to Section 105(1) of the Property Law Act


(58) The lessee challenged the legality of the notice both as to its form and the method of its

service. On the other hand the lessor relied upon its legal efficacy in order to support the actions the Board had initiated under Section 105(1) of the Property Law Act and which had resulted in the Board’s re-entry to terminate the lessee’s agreement for lease, TLTB No.: 4/11/40550 and bring about its forfeiture.


(59) The form of notice issued by the lessor on 26-09-2018 is in the following terms ;

Date: 26.09.2018.


Midwest Holdings Limited,

Meigunyah Junction,

Nadi Back Rd,

Nadi


NOTICE UNDER SECTION 105 – PROPERTY LAW ACT


Dear Sir


Re: iTaukei Land known as Nacomeke
District: Momi; Province: Ba; Area: 5,2609 Ha; TLTB No: 4/11/40550
Term: 99 years with effect from 01/01/2015


A record of the above holding in our file reveal that you have committed breaches on the covenant terms and conditions of your lease by failing to fulfill your covenants, specifically under Clause 2 (e)


“To prepare and lodge with the lessor for the lessors approval on or before the 1st Day of January 2017 of the Tourist Facility in accordance with plans as approved in writing by the lessor and to complete construction of the tourist facility on or before the 31st Day of December 2019”


As the above mentioned breach does constitute breach of the terms and conditions of your tenancy you are hereby required to remedy the breach, and pay to the Board as compensation the sum of Eleven Thousand Four Hundred & forty five Dollars ($11,445.00).


TAKE NOTICE that if you fail to remedy the breaches, and pay as herein demanded, within six (6) months from the date of services of this notice nor be granted relief against forfeiture under section 105 of the Property Law Act, your lease of the said holding will thereupon terminate and you are to quit and give vacant possessions to the Board as Landlord.


TAKE FURTHER NOTICE that such re-entry shall not prejudice any rights or remedies which may have accrued to the Board against you in respect of this breach.


(60) In Ram Lochan Regan v Satya Nand Verma[13] decided that while no particular form was

required to constitute a valid notice to quit, nevertheless it was necessary that the notice be addressed to the right person, properly describe the premises to which it relates, be plain and unequivocal and expire at the proper time.


Ram Lochan concerned a “protected lease” governed by the Fair Rents Ordinance, whereas the circumstances of the present case are covered by the general law, viz, Section 105 of the Property Law Act.


But the general principles are same.


The Court of appeal in Ram Lochan adopted well recognized principles regarding notices to quit (same as breach notices pursuant to 105 of the Property Law Act) stated in Foa on “Landlord and Tenant” 7th Ed. At pa.598.


The same principles apply in this case.


Dealing firstly with the form of notice issued pursuant to Section 105 of the Property Law Act, while no particular form was required to constitute a valid notice, nevertheless it is necessary that the notice[14];


(A) Be addressed to the right person.
(B) Properly describe the premises to which it relates
(C) Be plain and unequivocal as to what the lessor required the lessee

to remedy.


(61) The lessee submitted that the notice is invalid because the notice was “equivocal and

misleading” as to what the lessor required the lessee to remedy.


(62) I refer to the first paragraph of the notice dated 26.09.2018 which is in these terms;

A record of the above holding in our file reveal that you have committed breaches on the covenant terms and conditions of your lease by failing to fulfill your covenants, specifically under Clause 2 (e)


Facility within the prescribed time:


“To prepare and lodge with the lessor for the lessors approval on or before the 1st Day of January 2017 of the Tourist Facility in accordance with plans as approved in writing by the lessor and to complete construction of the tourist facility on or before the 31st Day of December 2019”

(63) I will return to the clause 2(e) of the agreement for lease which is in these terms;

January, 2017 of the Tourist facility in accordance with the plans as approved in writing by the lessor and to complete construction of the tourist facility on or before the 31st December, 2019.


(64) There is an inaccuracy in the notice of 26-09-2018. The notice does not correctly refer to

the default in the performance of the terms and conditions of clause 2(e) in the agreement for lease. The notice does not correctly refer to the default under clause 2(e). In this notice the lessor did complain of the breach of the covenant, “To prepare and lodge with the lessor for the lessor’s approval on or before the 1st day of January, 2017 of the tourist facility”. This is not an obligation to perform under clause 2(e) of the agreement for lease. Again, in this notice the lessor did complain of the breach of the covenant “to complete construction of the tourist facility on or before the 31st day of December, 2019”. A man cannot on 26-09-2018, breach a covenant which requires him to complete construction of a tourist facility on or before 31-12-2019. Therefore, the landlord encounters a fatal problem in the form of the notice.


(65) The lessee, on receiving the notice, could have been in doubt about the lessor’s complaint

of the breach of covenant 2(e) , lessor is requiring it to remedy. The weakness in the notice is that it does not correctly specify the breach complained of in clause 2(e) of the agreement and in the circumstances the lessee has been in doubt. The inaccuracy in the notice does go to the root of the notice itself. The inaccuracy affects the terms of the notice itself, which are not definite and capable of misunderstanding. The notice is “equivocal” and “misleading”.


(66) Consequently, the notice, in my judgment is not valid. In my opinion there is merit in the

lessee’s submissions criticizing the form of the notice. I conclude that the notice dated 26-09-2018 issued pursuant to Section 105(1) of the Property Law Act is not a valid notice. As a result, the cancellation of the lease was invalid. Because there is no valid notice issued pursuant to Section 105(1) (a) of the Property Law Act, the agreement to lease could not be legally terminated. The defects in the form of the notice invalidates the re-entry and the termination of the agreement for lease. The lease is still valid, subsisting and effective.


Accordingly, I grant the first and second declarations applied for in the originating summons.


(67) Then the originating summons proceeds to ask “that the defendant accept rental in the

sum of $13,804.00 as rental for the period 1st of January 2019 till June 2019 for the agreement to lease TLTB No. 4/11/40550 containing an area of 5.2609 Ha in the District of Ba”.


Whoever heard of such a prayer in an originating summons? For such a purpose an originating summons is utterly inappropriate.

(68) In view of the approach I have adopted, it is not necessary for me to consider;

acceptance of lease rental from the lessee on 10/9/2019 constituted a waiver by the lessor of its rights under notice.


Re-entry at Common Law - Section 105 notice is not a pre-condition


(69) I have concluded that there was no notice issued on 26-09-2018 in compliance with

Section 105(1) (a) of the Property Law Act. But the landlord has a “common law right” to terminate the lease without such a notice being given if the lessee’s conduct amounted to a repudiation of the lease at common law. The landlord could terminate the lease and take possession without first serving a valid notice under Section 105(1) of the Property Law Act. The notice under Section 105(1) of the Property Law Act is not a precondition on the landlord’s power to re-enter at common law when the lessee’s conduct amounted to a repudiation of the lease[15].


(70) A lease is a species of contract, as French CJ, Hayne and Kiefel JJ said in Will Mott

Growers INC v Willmott Forests Ltd (Receivers and Managers appointed) (In Liq).[16] Therefore, as Mason J said in Progressive Mailing House Pty Ltd v Tabali Pty Ltd,[17]the ordinary principles of contract law, including that of termination for repudiation for fundamental breach, apply to leases.” In that case a lessor was held to be entitled to damages for loss of bargain where it had re-entered in consequence of the lessee’s repudiation in asserting that, in the circumstances which then existed, it was under no liability to pay rent. It was held that the right to terminate the lease for the lessee’s repudiation was not excluded by an express term which entitled the lessor to re-enter for the lessee’s breach.


(71) As the plurality[18] said in Koopahtoo Local Aboriginal Land Council v Sanpine Pty

Ltd,[19] the term repudiation is used in different senses. Their Honours said:[20]


“Firstly, it may refer to conduct which evinces an unwillingness or an inability to render substantial performance of the contract. This is sometimes described as conduct of a party which evinces an intention no longer to be bound by the contract or to fulfill it only in a manner substantially inconsistent with the party’s obligations. It may be termed renunciation. The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it. ... Secondly, it may refer to any breach of contract which justifies termination by the other party. ... There may be cases where a failure to perform, even if not a breach of contract which justifies termination by the other party. ... There may be cases where a failure to perform, even if not a breach of an essential term ... manifests unwillingness or inability to perform in such circumstances that the other party is entitled to conclude that the contract will not be performed substantially to its requirements. This overlapping between renunciation and failure of performance may appear conceptually untidy, but willingness or inability to perform a contract often is manifested most clearly by the conduct of a party when the time for performance arrives. In contractual renunciation, actions may speak louder than words.”


The question here is whether the lessee in the case before me evinced an unwillingness or an inability to render substantial performance of the contract –Agreement for Lease.


Was there a repudiation?


(72) According to clause 2(c) of the agreement, the land demised by the lease is only for

tourism purpose. The lessee is bound by covenant 2(e) to commence construction of the tourist facility on or before 01-01-2017. The lessee is obliged by the terms of the lease. There is an express covenant to commence construction on or before 01-01-2017. It is common ground on the pleadings that nothing has ever been commenced and the land is now in the same state as when the lease was granted. The lessee says that there were reasons for non-compliance. But whatever the lessee’s reasons may have been, it is common ground that the lessee committed a breach of the covenant to commence building a tourism facility in the land demised by the lease, on or before 01-01-2017. No building at all have been erected on the land. There was no continuing condition to build a tourism facility. The period for the commencement of the construction of the building expired on 01-01-2017. The express covenant to commence a building construction on or before 01-01-2017 could only be broken once. A man cannot on 31st December, 2017 breach a condition which requires him to commence construction of a tourism facility on or before 01-01-2017. The covenant to commence construction of the tourism facility could not have been broken after the crucial date. It can be breached once and for all on the crucial date. It would be impossible to say that at any time subsequently a breach thereof took place.


(73) I feel that the lessee’s conduct has amounted to a repudiation of the Contract which

entitles the innocent party (the lessor) to treat the Contract as terminated, and claim damages for the breach by repudiation of the Contract by the lessee.


(74) The right to terminate the Contract as a result of the repudiation may be lost where an

innocent party has affirmed the Contract. This occurs where the innocent party, although entitled to choose whether to treat the Contract as continuing or to accept the repudiation and treat himself as discharged, decides to treat the Contract as continuing. However, he will not be held to have elected to affirm the Contract unless (1) he has knowledge of the facts giving rise to the breach, (2) he has knowledge of his legal right to choose between the alternatives open to him and (3) if implied affirmation there must be some unequivocal act from which it may be inferred that he intends to go on with the Contract or from which it may be inferred that he will not exercise his right to treat the Contract as repudiated. It must be shown that the unequivocal act was done with knowledge of the breach and of his right to choose. Peyman v Lanjani[21].


(75) There is no question here of any unknown antecedent breach being subsequently

discovered. The landlord accepted lease rental after 01-01-2017 and up until 22-04-2019 with knowledge of the breaches of conditions already committed. The landlord has accepted lease rental until 22-04-2019 with knowledge of breach of covenant already committed. That being so the landlord recognized the continuing existence of the lease until 22-04-2019. No forfeiture can take place grounded on any such breach. That being so, no right to re-enter and forfeiture can take place grounded on any such breaches. The right to re-enter and forfeit upon those grounds has been forever waived. Therefore, the landlord’s common law right to terminate the contract for lease and take possession (without serving a valid notice) as a result of the repudiation is lost forever!


(76) In my opinion, the lease is still valid, subsisting and effectual. The lessee is liable to pay

rental under the lease and also liable to pay damages for breach of the covenant to commence construction of a tourism facility on or before 01-01-2017 and such damages (if any) the lessor has sustained by reason of the breach of the covenant 2(e), such are assessed upon the footing that the said lease is still subsisting and that the landlord has not established any right to re-enter.


[C] ORDERS:


I make the following declarations and orders on the amended originating summons;


(1) A declaration that the breach notice dated 26-09-2018 was invalid because it is not in compliance with Section 105(1) (a) of the Property Law Act, Cap 130.

(2) Accordingly, a declaration that the lessor has not established a right to re-enter to terminate the lease.

(3) Accordingly, a declaration that the lessor’s re-entry on 08-05-2019 to terminate the lease and bring about its forfeiture was invalid.

(4) A declaration that the Agreement for Lease TLTB No. 4/11/40550 is still valid, subsisting and effectual.

(5) A declaration that the lessee is liable to pay lease rentals under the lease.

(6) The order sought in prayer “c” of the originating summons is declined.

(7) This judgment does not affect the lessor’s right to bring an action against the lessee to recover damages (if any), the lessor has sustained by reason of the breach by the lessee of the covenants and upon the footing that the lease is still subsisting.

(8) Having regard to the history of the matter and to the faults which clearly lie on both sides, this seems to me a case where there ought not to be any order as to costs, but I will hear the parties if they wish to make submissions on costs.

........................
Jude Nanayakkara
[Judge]


High Court – Lautoka
Friday, 16th October, 2020

[1] Mannai Investment Company Ltd v Eagle Star Life Insurance Co. Ltd (1997) AC 749.
[2] Danam and Company Ltd v A.G. (unreported) Lautoka High Court Civil Case No. HBC
209.02L, 17-10-2003, Byrne J.


[3] Ranjit Singh and Basant Kaur v Gordon Wilson Speakman, The Registrar of Titles and A.G. The Supreme
Court of Fiji Islands, Civil Appeal No. CBV 0002 of 1998S, Judgment 17-04-2003
[4] [1893] UKLawRpCh 50; [1893] 2 Ch. 271
[5] Woods v Tomlinson & Another (1964) NZLR 399
Rugby School (Governors) v Tannahill (1935) 1 KB 87
Civil Service Co-operative Society Limited v McGriger (1923) 2 Ch 347
[6] Canas Property Co. Ltd v K L Television Services Ltd (1970) 2 ALL.E.R. 795 at 799
and Billson v Residential Apartments Ltd (1992) 1 ALL.E.R.141.
[7] [1963] 1 Ch 459 at 478
[8] [1914] UKLawRpCh 103; [1914] 2 Ch 516 at 523 per Lord Cozen-Hardy MR
[9] [1932] AC 275 at 292 (PC)
[10] [1940] HCA 37; [1940] 64 CLR 221 at 236/237
[11] Forum Hotels Limited v Native Land Trust Board, Registrar of Titles and Attorney General of Fiji,
F.C.A., Civil Appeal No. ABU 0046/10, Judgment 13-03-2013.
[12] FJHC 125; HBC 263.2012 (21-02-2020)
[13] [1965] 11 FLR 240
[14] Woodfall; “Landlord and Tenant”. Looseleaf Ed. Vol-1, 17-245
17-246


[15] Wash Investments Pty Ltd & Others v SCK Properties Pty Ltd & Ors, JA Philip McMurdo, Supreme
Court of Queensland, (2016) QCA 258.
[16] (2013) 251 CLR 592, 604; [2013] HCA 51 at [39].
[17] [1985] HCA 14; (1985) 157 CLR 17, 29.
[18] Gleeson CJ, Gummow, Heydon and Crennan JJ.
[19] [2007] HCA 61; (2007) 233 CLR 115, 135; [2007] HCA 61 at [44].
[20] Ibid.
[21] [1984] 3 All ER 703

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