COURT OF APPEAL

New Zealand Mail, Issue 1832, 17 April 1907, Page 61

COURT OF APPEAL

A CHINESE PUZZLE. DONALD v. AH LOP. Their .Honors Justices Williams, Denniston, Chapman, and Button, sitting as the Court of. Appeal on the sth listened to argument in the case of Donald Donald v. Ah Lop, in which Mr C. P. Skerrett. appeared for the appellant and Mr A. R. Atkinson for the respondent. Mr Skerretti, in opening the case to the Court, said it was an appeal from the decision of his Honor the Chief Justice. The action was tried before his -Honor, sitting wthout a Jury. It was founded upon a covenant for "quiet enjoyment’* implied in a lease under the Property Law Consolidation Act of 1885. The facts, which were somewhat complicated, were that Donald, who was a general agent, carrying on business at Masterton, was the owner in fee of a piece of land in that district, which he leased to Ah Lop, a gardener and fruiterer, for the term of twenty-one years from July lsti, 1887. But prior to this lease Donald had mortgaged this piece of land, which had ah area of 32 acres- 2 roods, to the Bank of New South Wales. The date of that mortgage was February 14th, 1885. . Nothing turned, so far as the appeal was concerned, upon the precise form of the mortgage, because, as the land was under the old system. of conveyancing, the effect was to vest the legal estate,, in the land in. the Bank ,of , New South Wales. The lease to Ah Lop was dated' June 4th, 1880, and the rental was to be £65 for the firsti five years and £162 10s for the balance of the term, payable half-yearly. It was, therefore, to be seen that this was a 1 lease by a mortgagor. Therej were two facts that had tjo be observed. The first was that the owner of ' the legal estate did not concur or join in the lease; and secondly, that that owner retained the right of re-entry exercisable if there was any default in the payment of the rent for the period i of thirty days without any demand or notice being required. The lessee remained in undisturbed possession until May 15th, 1894, and on that day Donald had a right to determine the lease and. to enter personally, because it was admitted dearly? that the rent, in arrears for? -more than thirty power ot was; Wcsaahte.. Thatrwas one. of.fih© questions

statement of claim in the District Court case of Donald v. Ah Lop, in which there was a claim for £1336 13s 9d arrears of rent, of which £22 was owing in respect of another tenancy, showed this, and so it was perfectly clear that upon the yearly tenancy Ah Lop was in arrears. This action was not commenced until 1906, or twelve years after the breach, of covenant occurred. Tile respondent had commenced an action in the District Cburt, but he discontinued it, and he paid the costs about a year afterwards, after his dispossession and just prior to the commencement of the present 'case, in whidi he: claimed £SOO for breach of the covenants for title and quiet' enjoyment implied in the deed of lease. The evidence was somewhat vague with regard to one part of the case and as to exactly what took place, but it appeared from what subsequently transpired that possession of the property was demanded. The crucial facts were that on the 15th May, 1894, Donald sold his property at Masterton by auction (including the land leased to Ah Lop), and this lease was sold by the auctioneers to Ah Lin and Wing Sing. The facts in this regard seemed to be wrapped up in mystery,and all attempts to elucidate them had failed. Ah Lin, it appeared, was the actual brother of Ah Lop, and the other Chinaman, Wing Sing, worked for Ah Lop and was paid wages. Where Ah Lin and Wing Sdng got the money to buy the property no one seemed to know or to be willing to tell, and no information on the point was available; but the fact had been proved that Ah Lop negotiated and was concerned in the sale of the property by Donald to Ah Lin and Wing Sing. What happened then—and.. this was where it was that the Chief Justice had made an omission of fact—.was that Ah Lop, immediately after the sale, seemed to have recognised that his lease was determined, and he made a fresh bargain with his brother, Ah Lin, and Wing Sing, who by virtue of their purchase entered upon the land, and claimed that they had purchased from Donald and from ths bank without reference to any lease, and they ejected the re. spondent. Ah Lin stated in evidence that he had a row with his brother; Wing Sing took his part, and they “chucked” Ah Lop out. Ah Lop contended that Donald had wrongly sold the land to Ah Lin and Wing Sing. The legal conveyance was not executed by the bank until May 20th, 1895, and the appellant, it was submitted, was up to that date still the holder o§ the leyersion under the. lease which Itod

not become merged in the legal estate, and the appellant was entitled to reenter because the power of re-entry was reserved to him. He had not the legal estate, but the reversion which would have supported the re-entry, and he retained that reversion until May 20th, 1895. His Honor the Chief Justice had at the trial found plaintiff Ah Lop in the sum of £25 as damages, £lO 10s costs, and £ll 19s 4d for • witnesses’ expenses, disbursements, etc., making a total of £47 9s 4d. The contention of the appellant was that his Honor’s judgment was erroneous in law and in fact. Mr Atkinson, for the respondent, contended that the technical breach of tbe covenant had taken place at the granting of the lease to Ah Lop, who had not been made aware that the property was under mortgage to the bank, and the tenant was entitled to take his proceedings when he pleased, and naturally he would not take those proceedings until he had suffered somevthing from the breach of the covenant. Ah Lin and Wing Sing had told Ah Lop that it was ail right, and he could stop on under his lease; but apparently tbe infirmity of his title was discovered, and they “cleared him out.” The conclusion which the Chief Justice seemed to have arrived at was that there was no agreement between the parties, and that the lease was treated by the parties in May, 1894, as existing. Assuming that the purchasers did agree with the respondent to become bound by tbe lease, they only agreed to do what the appellant was already bound to do, and their so doing did not release the appellant from his obligations ; those obligations stood in any case. AS to the contention that there was no legal ejectment referable to the title the purchasers had got from the appellant, it was submitted there was in the first place .what was tantamount to a legal ejectment, and, secondly, that it was not necessary for the respondent to prove anything so strong as a legal ejectment in an action for a breach of “covenant for quiet enjoyment.” There was no evidence of any act subsequent to tbe sale by the appellant or of any breach of the covenant by the respondent, and it was shown that his “quiet enjoyment” had been interfered with. Mr Atkinson said his ultimate contention was ...that whatever was the relation between Ah Lop and his mates, Donald’s relation to them was such that he was responsible for their actions in violation 'of the lease which he had granted to the respondent. Having heard Mr Skerrett in reply, tlieir Honors reserved their decision.