Langley v Foster [1906] HCA 28

Langley v Foster [1906] HCA 28 - HCA 1906 case summary — Zoe

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original lessor to intervene; but as between the sub-lessee and his immediate lessor it is binding. [They referred to 48 Vict. No. 18, secs. 25, 26, 28, 51, 96.] Cutting timber on Crown lands with- out proper authority is prohibited by sec. 133. Sec. 115 provides for the making of regulations for the issue of licences to cut and remove timber, and further provision is made by the Act No. 22 of 1902. Secs. 90 and 92 of 48 Vict. No. 18 provides for licences to construct tramways. [They referred also to Regulation 213 of June 3rd 1895, under the Crown Lands Acts of 1884, 1889 and 1895.] From these it appears that without a licence the conditional lessee could neither have re- moved timber nor constructed a tramway, and could not have given another the right to do either of these things without reference to the Crown. This agreement was executed to give the appellant, as far as the respondent could do so, the power to exercise whatever rights he could get from the Crown. If the conditional lessee withheld his consent, the appellant could not obtain from the Crown a special lease to construct a tramway : Regulation 213, supra. It is no answer to a suit for specific performance to say that the sub-lessee has not yet obtained this authority from the Crown. It certainly is no ground for a defence of illegality. Even if there were illegality as regards the conditional lease, affecting some of the powers granted by the intending lessor, that would not render the agreement wholly incapable of enforcement. It could be enforced with the neces- sary modifications. 'The terms of the lease are separable. But the agreement is not necessarily illegal, and there is no evidence of any intention by the parties that the permits and heences necessary to méke possible the legal carrying out of the agreement should not be duly obtained. The respondent gives the grazing rights, and in addition undertakes not to oppose the granting of the necessary authorities and licences to the respondent for the other purposes mentioned in the agreement. [They referred also to Ah Wye v. Lock (1), and Jaques v. Stajrord (2).]

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of a condition of the conditional lease, for a breach of which the H. C. or A. lease becomes forfeitable, and that the Court will not compel a oo lessee to execute a sub-lease which will destroy his own title. Layeuey That is no doubt true. It is necessary, then, to consider whether Fodudi the proposed lease would or would not authorize the doing of something, or make it a term of the lease that the sub-lessee should be at liberty to do something, which would be a breach of acondition by which the conditional lease would become forfeit- able. The provision as to forfeiture for breach of condition is contained in sec. 96. In construing that section it must be borne in mind that there is no presumption in favour of forfeiture. The Courts always lean against it. That section states the cireum- stances under which a lease shall become forfeitable. It provides that : "Every lease shall be liable to forfeiture if any rent be not paid within the prescribed period or upon breach of any condition annexed to such lease," &¢. Is this prohibition then a condition annexed to the lease? It is no doubt in one sense an incident of the lease. So it is an incident of most leases that the lessee shall not have power to commit waste. But that is not properly treated as a condition of the lease unless it is expressly made one. If the construction suggested is adopted, this remarkable result would follow, that if a pastoral lessee lets a small piece of land, half an acre, for instance, to a market gardener for market gardening purposes or for growing vegetables for his home, his whole lease becomes forfeitable. I cannot believe that that was the intention of the legislature. It is a historical fact that in the old days it was prescribed in the Order in Council that lessees should not cultivate their land under penalty of forfeiture. Certainly there is no trace of any such policy in later legislation. On the contrary it has become the policy of the legislature to encourage cultivation. 'The denial of the power to grant sub-leases for other than grazing purposes is certainly stated in plain words, but, in my opinion, in the provision for forfeiture on breach of a condition the term "condition" is used in its technical sense, that is, a condition to be performed by the lessee with regard to the land, and does not refer to a breach of a mere negative provision restricting the powers of the lessee. When we find in the Act a distinct enact- ment, directing that a lessee shall not do certain things, such a

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Jand without first consulting the holder of the conditional lease. That may be taken to have been in the contemplation of the parties, and, applying the rule laid down in Sheppard's Touchstone, that may well be considered as a stipulation that not only will the conditional lessee offer no objection to the holder of the licence going on the land, but that he will do all in his power to facilitate it. Such an agreement as that is not idle, and there is ample consideration. Then with regard to the tramway. It appears that the real object of the parties was to enable the plaintiff to cut timber that was growing on the conditional purchases, and take it away across the other land to his saw mill. He cannot take the timber to that mill without crossing the conditional lease. Is then a stipulation that he may construct a tramway over the lease for that purpose an idle stipulation? No doubt, a person who has a licence to cut timber on a conditional lease is also authorized to remove it, because the Act expressly says so. But he certainly has no authority to construct a tramway on the land, and he has no authority to take any other timber across the land. If the holder of a timber licence attempts to carry any other timber across the land than that which he has eut upon it, he is clearly liable to an action for trespa The stipulation, therefore, as to the tramway is by no means an idle stipulation. It isa - stipulation that not only entitles him to construct a tramway, so far as the conditional lessee can authorize him to do so, but also entitles him to convey upon it any timber that he may cut outside the land. That is not idle; it is a very valuable consideration. The question whether this should be held a valid stipulation oran idle one ought to be determined in accordance with the recognized rule of law that a document should, if possible, be so construed as to give effect to the intention of the parties, and not in such a way as to defeat that intention. Applying this rule, I think that this agreement should be construed as an agreement that, so far as the lessor, the defendant, lawfully may, he agrees that the lessee, the plaintiff, shall have permission to cut timber on and lay a tramway across the conditional lease, and that the lessor will not offer any objection to the plaintiff obtaining a licence to cut timber on the conditional lease or obtaining such permission as may be necessary to lay a tramway, and that he will do or concur

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principle involved was clearly the same, and it is, I think, worth while to make the full citation. In the case of Waugh v. Morvis (1), another case of a charter party, in which it was stipulated that the ship should load a cargo of pressed hay in France and proceed direct to London. On arriving at that port the master was unable to land the hay at the wharf by reason of an Order in Council under the Confagious Diseases (Animals) Act 1869, forbidding hay from a French port to be landed in the United Kingdom. 'The Order was made some time before the charter party was entered into, but neither party knew of it. It was contended that the contract was for an illegal purpose and void. Tt was held that as the contract was not made knowingly with the intention to violate the law, and as it could be carried out, as it ultimately was, without violating the law, it was not void. In his judgment, Blackburn J. said (2): - * We quite agree, that, where a contract is to do a thing which cannot be performed without a violation of the law it is void, whether the parties knew the law or not. But we think, that in order to avoid a contract which can be legally performed, on the ground that there was an intention to perform it in an illegal manner, it is necessary to show that there was the wicked intention to break the law; and, if this be so, the knowledge of what the law is becomes of great impor- tance." I think those remarks are entirely applicable here. I see nothing in this contract which is incapable of being performed within the law by obtaining the necessary authority from the Crown, which covers these branches of the defendant's promise. That being so, I think both the cases which I have cited are entirely applicable, the one last cited more particularly, because it deals with the question of the absence of any wicked intention to violate the law, such as would be necessary, according to the Court, to avoid the contract, and because of the absence of any such evidence of intention in this case.

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residence " on his conditionally leased land. The only stipulations or provisions of the statutory lease under which the conditional leaseholder holds his land that are described as conditions in any of the Crown Lands Acts are the conditions there referred to, which may be generally described as conditions of residence, fencing, and improvement. It appears from many sections in the Act that these conditional leases, which are attached or appended to conditional purchases, are subject to the same conditions as conditional purchases, But the only conditions attached to con- ditional purchases are those relating to payment of instalments, residence, and improvements. And it would appear obvious that if the legislature had intended to punish by forfeiture the breach of a condition in a statutory lease it would have definitely pre- scribed and marked out the condition, the breach of which would entail such serious consequences, as it has done with reference to conditions of residence, payment, and improvement. M y learned brother Barton has cited and commented with such detail on all the sections which bear on this question, that it is not necessary for me to go through them again. I merely wish to mention this, that in the Land Acts which followed that of 1884, wherever conditions are mentioned the three conditions as to residence, payments and improvements, to which I have referred are always mentioned together as the only conditions. Upon con- sideration of the words of sec. 98, I have no difficulty in coming to the conclusion that, if the provisions of that section were embodied in an agreement between parties, the restriction on subletting would not be in the form of a condition the breach of which would involve forfeiture. 'The Act might very well have provided directly that no conditional lessee shall sublet his land for other than grazing purposes, and it might then have been argued that that was a condition, the breach of which would result in forfeiture. But the Act, it appears to me, carefully avoids using any such expression. It says "no lease or licence other than special leases shall confer any right to remove material from the leased land or to sublet such land for other than grazing purposes or to prevent the entry and removal of material by authorized persons."

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It is this: if a contract can be carried out in one way only, and that way necessitates the doing of something prohibited by law, the Courts will not enforce it; but if the contract may be carried out in a legal manner, and also in an illegal manner, before a party can object to the enforcement of the contract by the Court, he must satisfy the Court that it was the intention of the parties to carry it out in an illegal manner. That was laid down in Sewell v. Royal Exchange Assurance Co. (1) and Haines v. Busk (2). 'Those were cases in which the voyages undertaken would be illegal if certain licences, were not obtained, and the Court would not allow it to be assumed that the licences were not intended to be obtained, and, therefore, as the contracts could be carried out in a legal manner, the Court would not assume that it was the intention of the parties to carry it out in an illegal manner. There is no difficulty in applying those principles to this contract. 'The contract purports to deal with the land and the timber on the land. The conditional lessee has the power to give the right to deal with the land, so far as it may be neces- sary to occupy it for grazing purposes. For any rights beyond that the Crown must be applied to, and the Crown may give a licence to any person to have all those uses of the land which the conditional lessee has purported to give under the contract but which he himself cannot lawfully give. If the Crown licence is obtained, the contract is perfectly lawful, and there is no necessity to do anything unlawful in carrying it out. If the licence is not obtained, then the contract cannot be lawfully carried out to its full extent. The Court will not assume that the parties intended that the contract should be carried out without obtaining the licence. On the contrary, not only will the Courts not assume that, but they will assume that the parties intended to do all things necessary to enable them to carry out the contract legally. It appears to me that there is evidence of that intention in the contract itself, because when we refer to the provisions of the lease as to rent they read in this way: " Rent to be £24 per annum to be paid in advance ; any further increase of rent rendered necessary by the Government Regulations to be borne by the said

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Judgment (121 paragraphs)

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