Burnham v Carroll Musgrove Theatres Limited [1928] HCA 31

Burnham v Carroll Musgrove Theatres Limited [1928] HCA 31 | Case summary | Zoe

[28]

so far as the counterclaim was concerned, and remitted the matter of the counterclaim back to the Supreme Court to be reheard, with liberty to all parties to apply for leave to amend the pleadings relating to the counterclaim. The appellant amended his defence to the counterclaim by pleading that the premises were a shop within the provisions of the Fair Rents Acts; the respondent Victoria Arcade Ltd. replied that the shop was reasonably required for the purpose of reconstruction to a substantial extent, and that greater hardship would be caused by refusing possession than by granting it. The matter came on for rehearing before Davidson J. on 12th September 1927. At the hearing the appellant obtained leave to make a further amendment, setting up that the respondents were estopped from alleging that he was a weekly tenant, because of the judgment in an ejectment action between the appellant and the respondent Carroll Musgrove Theatres Ltd. in 1923, and the respondent obtained leave to add a further claim to possession based upon the non-payment of rent by the appellant. Davidson J. found upon the evidence that the appellant went into possession of the premises originally as a weekly tenant, that this tenancy was determined in 1922 by one of several notices to quit that were in evidence, that the appellant afterwards continued in possession, paying the same rent as before, but that, as the parties were not in agreement as to the nature of the tenancy, they agreed that the rent should be paid and accepted without prejudice to the actual legal position. His Honor drew the conclusion that as the parties were not ad idem no terms could be inferred by way of agreement for the duration of the tenancy, and that therefore it must be taken to be a tenancy at will, without any period fixed for its duration. He held that sec. 127 of the Conveyancing Act 1919 (N.S.W.) applied to the case, and that the tenancy was accordingly determin- able by one month's notice. As this notice had not been given, Davidson J. held that the tenancy was still undetermined, and the counterclaim failed. In the course of the hearing of the remitted counterclaim the issue, the postea, the judgment for the defendant (appellant) in ejectment and the summing-up to the jury by the

[47]

[Hicers J. referred to Beddall v. Maitland (1).] The position at common law is that when the Court finds that parties stay on after the termination of a weekly tenancy in cases where there has always been a dispute as to the nature of the tenancy, and the dispute continues during the holding over, the Court will imply an agreement between the parties to hold over on the terms that were obtaining before the determination of the tenancy (In re Perrett & Bennett-Stanford's Arbitration (2)). There cannot be a tenancy from year to year, as to establish such there must be a reference to a rental for some aliquot part of a year. Even if the weekly tenancy had been determined by the earlier notices to quit, the correspondence between the parties shows that the appellant remained in occupation as a weekly tenant. The proceedings in ejectment before the magistrate are not evidence to anything relevant to the matter before this Court: the decision amounts to a nonsuit (Clisdell v. Gibney (3); Landlord and Tenant Act of 1899 (N.S.W.), sec. 23 (2), (4) ). Davidson J. was correct in refusing to admit evidence as to proceedings in the Supreme Court. His Honor permitted amendments to be made for the purpose of allowing the question to be argued (Cohen v. Lapin (4); Lennon v. Meegan (5)). There was some rent lawfully due from the appellant at the time of the filing of the counterclaim and it is still unpaid (Brewer v. Jacobs (6) ). The scheme of reconstruction was a reasonable one, and for the carrying out of the scheme the premises were reasonably required by the respondent. Any order which would have the effect of putting the appellant back into possession would necessitate the undoing of the reconstruction work. The only form of hardship that could be suffered by the appellant if put out of possession would be loss of goodwill. Where the status of a house originally within the provisions of the Fair Rents Act 1915 to 1926 is changed and becomes a different sort of dwelling to which the Act does not apply, then no order can be made (Prout v. Hunter (7); Phillips v. Barnett (8) ). This Court

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Weekly Tenancy. - It is a basic truth that, setting aside the so-called fictional tenancy by sufferance, the relation of landlord and tenant is created only by agreement. The agreement is subject to the ordinary law of contract, part of which is that no implication of intention can be made contrary to an expressed intention. Simple and elementary as this is, there is apparently danger of being drawn aside and overlooking it amid the complicated circumstances of the case. The allegation in the counterclaim is that "on and prior to 15th September 1925" the appellant was a weekly tenant. The tenancy alleged there is that which existed in fact and in law on 15th September 1925, when the present respondent Victoria Arcade Ltd. became proprietor. The concrete question raised by the pleadings and fought is : Was there on 2nd October 1925 an existing agreement, express or implied, between the parties that the appellant should oceupy the premises as the respondent's tenant from week to week ? The mere payment of a weekly rent without more appearing would lead to the necessary inference that the parties intended to create a weekly tenancy (Adams v. Cairns (1) ). But, as that case shows, the intention may be shown by evidence to be different as by fixing aterm. It matters not how the intention not to create a weekly tenancy is shown, so long as it is shown. Davidson J. found - and. I think his conclusion cannot in the circumstances be disturbed - that originally there was a weekly tenancy. But how long did that tenancy continue? First of all, did it continue after the moment. when the present respondent became registered proprietor on 15th September 1925? To establish that it did, some agreement between. the new proprietor and the appellant must be shown (Real Property Act 1900 (N.S.W.), secs. 42, 43 ; Waimiha Sawmilling Co. v. Waione Timber Co. (2)). The effect of the sections quoted is (even apart from res judicata) to dispose at a stroke of the alleged agreement for a lease relied on by the appellant, and also, since no weekly tenancy was. registrable or registered, of so much of the respondent's argument as: rests on anything in the nature of tenancy prior to its becoming

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however, that the notices of 1922 were invalid as notices to put an end to a weekly tenancy. The landlord's authority to its agent to give the notices to quit was abundantly proved in the evidence of the respondent's solicitor and of its chairman, and as to one of the notices, by the record of the Police Court proceedings which were for this purpose undoubtedly relevant, and relevancy was the only ground on which their admission was challenged. The actual delivery of the notices was proved and they were produced and are in evidence. It is sufficient to take the last of the three, namely, the notice dated 18th September 1922, and requiring delivery up of the premises on Monday 25th September 1922, which was also the one upon which the Police Court proceedings were taken on 5th October 1922. The information was laid by Louis Murcombe, who served the notice. The reason of the inefficacy of the notice to quit was said to be that a notice given on 18th September to quit on 25th September was not correct, inasmuch as it was not a week's notice. I must confess I do not understand the objection, unless it is founded on the notion that there must be seven clear days' notice to terminate a weekly tenancy. But that is an error (Newman v. Slade (1) - the case there cited). There was, at any rate, no agreement here that the landlord should give seven clear days' notice. But even if seven clear days, exclusive of both the 18th and the 25th, were required, the notice would be sufficient, and for this reason. The tenant would on that hypothesis be entitled to remain until the end of the 25th, and be bound to go out the first moment of the 26th. And on accepted principles the notice should be so construed. As Lindley L.J., for Lord Halsbury and himself, said in Sidebotham v. Holland (2) : - ' The validity of a notice to quit ought not to turn on the splitting of a straw. Moreover, if hyper- criticisms are to be indulged in, a notice to quit at the first moment of the anniversary ought to be just as good as a notice to quit on the last moment of the day before. But such subtleties ought to be and are disregarded as out of place." Conversely, a notice to quit at the last moment of the 25th and one at the first moment of the 26th are identical in effect. The law as to the construction of notices to quit is reasonable, and where possible a notice to quit is construed

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letter, however, went on to say that to save the Christmas business the Company would allow the appellant to remain for six weeks, but that rent would be accepted only as on a weekly tenancy " under the above concession." This was not accepted. The appellant on 27th December 1923 tendered to the landlord's agent £5 rent on the footing of the alleged agreement of 1920. This was repeated several times in the early months of 1924, Consequently, no agreement for a weekly tenancy subsequent to the termination of the first can possibly be inferred. Apparently, however, the land- lord thought that, by his remaining in after the stipulation of the letter of 22nd December 1923, the appellant had willynilly become a weekly tenant. No rent was being received, and yet occupation continued. In these circumstances, and after an interview, a letter was written on 24th July 1924 which most unexpectedly has received an unsought-for and unmerited prominence. During the discussion in the Court it was suggested that, whatever the real truth might be in fact and in law, this letter bound the appellant, once his agreement. for years was negatived, to submit to the landlord's claim of a weekly tenancy. That would be a delightfully easy solution of the matter. All that would be necessary for the determination of this case - except the Fair Rents Acts - would be the judgment on the claim, plus the letter of 24th July 1924. But I am not able to take the primrose path. Some very serious obstacles stand in my way; and I shall mention some of them. Seeing that it is in effect suggested as an agreement to disregard all law and facts, except the elimination of one contention or the other, it is notable that it is never mentioned in the pleadings. On the contrary, the pleadings raise the true issue of weekly tenancy or no weekly tenancy. That letter was. only one step in the arrangement by which rent was accepted, and it was not accepted simpliciter. It has to be read, for instance, with the letter of 28th January 1924. Davidson J. said " the real effect of this agreement, having regard to all the cireumstances, was that the rent was accepted on the footing that the legal position of the parties, whatever it was, was not to be prejudiced." On this footing his Honor held that there was not at the date of the letter a weekly tenancy. The Full Court, in the judgment of Ferguson J., necessarily accepted the same view as to the letter of 24th July

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to obtain payment without making any admission. It was refused in terms that made any further effort futile, unless the appellant surrendered his claim entirely. What is the legal result ? It is, of course, quite clear that a refusal in terms that make a further tender futile dispenses with any further tender until the refusal is with- drawn. (See, e.g., Hunter v. Daniel (1) and The Norway (2).) The tender in the present case was first made by the appellant personally and orally, and was refused absolutely. Then by letter it was made through his solicitors substantially as a tender with a protest and so as to protect the tenant, who at that time had filed a bill in equity to assert his claim. All he sought was that he himself should not be charged with an admission ; and he expressly, by his solicitors' letter of 23rd September, made it plain that the tender was on the footing of the former arrangement. In those circumstances the situation is covered, in my opinion, by the case of Greenwood v. Sutcliffe (3) ). There it was held that a tender under protest reserving the right of the debtor to dispute the amount due is a good tender if it does not impose any conditions on the creditor. There the tender was made reserving the right to tax the mortgagees' costs and also to review their account. The Court of Appeal (Lindley, Bowen and Kay L.JJ.) reversed Stirling J., who held the tender conditional and therefore invalid. As Lindley L.J. said (4) : - "" What is the object of a tender? It is not necessarily to put an end to all controversy. It may have that effect, and very often has, but its main object is to throw the risk of further controversy upon the other party." There were controversies there, as here, and the tender there, as here, was made without, as Lindley LJ. said, "throwing any burden " on the payee, and here, as there, it was a good tender. Bowen L.J. said (5): "A man has a right to tender money reserving all his rights, and such a tender is good, provided

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on 2nd or 3rd October notice to quit possession, the notice expiring on 12th October. This notice was ample, if Burnham was a weekly tenant at that time - unless sec. 127 of the Conveyancing Act 1919 requires a full month's notice for a weekly tenant (a contention which I examine hereinafter). The learned primary Judge found that Burnham was a weekly tenant; and I see no reason for thinking that that finding was wrong. It is enough for my purpose to say, without going into any long-winded history, that something had happened in 1924 which settled by agreement the nature of the tenancy. Burnham had claimed a right to a lease for three years at least; the Carroll Musgrove company had asserted that he was merely a weekly tenant, and there had been legal proceedings on the subject. But, by letter to Burnham's solicitor dated 24th July 1924, the solicitors for the company stated that they were prepared to accept the rent due in respect of the premises (£5 per week), " provided that such an acceptance is not to be taken as an admission that your client is ertitled to the premises in question by virtue of any lease or agreement. Similarly the payment of rent by your client on this understanding is not to be taken as an admission by him that he is a weekly tenant." The solicitor for Burnham accepted this proposal, and rent was paid accordingly. Neither side in this correspondence, suggested any tenancy of any other nature than (a) under or in consequence of the alleged agreement for a lease, or (b) weekly tenancy. In other words, it was left to the future to find whether effect was to be given to the alleged agreement; and, if not, the tenancy was to be treated as from week to week. Now, after that proposal was accepted, it has been decided, and conclusively decided, that effect cannot be given to the alleged agreement for a lease - that the alleged agreement was not proved; and for this reason, even if there were no other reasons, I am of opinion that the finding of a weekly tenancy was perfectly justified. As Ferguson J. says : - " Only two alternatives were presented to the Court, one a

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decision is strongly supported by the reasoning of Bankes L.J. in Gill v. Luck (1) and in Barton v. Fincham (2). But what ought the Full Court to have done when it found, in January 1928, that in October 1925, when the counterclaim was started, the tenant was in possession unlawfully, that the landlord then required to reconstruct the Arcade, but that since the counterclaim the tenant had in September 1926 been put out of possession, and the reconstruction had therefore been fully effected ? As matters stood when the counterclaim came before the Ful] Court, Davidson J. had refused the order for possession on what the Full Court regarded as insufficient grounds. Under the Common Law Procedure Act 1899 of New South Wales, if the claimant had title at the writ, but the title had expired before the time of trial, the claimant was, notwithstanding, entitled to a verdict according to the fact that he was so entitled at the time of bringing his action. In my opinion, the problem is solved by the due application of the Equity Act 1901, secs. 82 and 84 (4) - the Full Court had to rehear the matter on the appeal from Davidson J., and had power on the rehearing "to make any decree or order which ought to have been made, and such further or other order as the case may require." What the Full Court has in fact done here is not to order delivery of possession (for possession had been delivered), but to "declare that at the date of the filing of the counterclaim the appellant defendant was entitled to an order for possession against the respondent plaintiff." Such an order seems to be quite within the competence of the Full Court under sec. 84 of the Hywity Act, and would, in my opinion, accurately fit the position if after the words " at the date of the filing of the counterclaim " were inserted some such words as "and thenceforward until the plaintiff left possession." Davidson J. on the first trial actually ordered delivery of possession, 15th June 1926, but it was set aside by the order of the High Court granting a retrial.

At a glance

Court

Decision date

Before

Source

Judgment (133 paragraphs)