[1950] EACA 382

## H. M. COURT OF APPEAL FOR EASTERN AFRICA

Before SIR NEWNHAM WORLEY (President), BRIGGS and BACON, Justices of Appeal

## SALEH SHAHER ABSI, Appellant (Original Plaintiff)

(1) HAIDER SAEED KASSIM and (2) TAKWA BINT MOHAMED, Respondents (Original Defendants)

## Civil Appeal No. 56 of 1956

(Appeal from the decision of H. M. Supreme Court of Aden, Campbell, C. J.)

Landlord and Tenant—Agreement for tenant to have new tenancy in rebuilt premises—Specific performance—Aden Evidence Ordinance, section 100 (f) -Aden Transfer of Property Ordinance, section 52—Aden Contract Ordinance, section 70—Aden Specific Relief Ordinance, section 18—Aden Rent Restriction Ordinance.

The appellant was the tenant of the ground floor of one of four old houses where he carried on his business. The respondents who were the owners desired to demolish the four houses and erect one new building and entered into an agreement with the appellant binding themselves to grant him re-entry on to the ground floor of the new building.

Eventually the appellant was offered the tenancy of a shop in the new building on the ground floor but not on his old site and only approximately half the floor area of his original premises. He refused this and sued for specific performance or damages in lieu and when the case was heard the whole of the premises on the ground floor had been let to other tenants. The Supreme Court holding that he was only entitled to premises somewhere on the ground floor and as these were already all let declined to order specific performance but awarded $£300$ by way of damages.

Held (14-12-56).—(1) In the case of an old-established business restoration to the original identical site being of importance, the appellant was entitled to a tenancy of premises on his original site and of substantially the same floor area.

(2) These premises were now occupied but it was impossible to ascertain from the evidence whether the tenant had gone into occupation before or after the commencement of the proceedings, and on this depended whether the existing tenancy was lawful or not.

Proceedings remitted to the Supreme Court to rehear the matter on the date of the commencement of the new tenancy. If found to be lawful, the appeal to stand dismissed but if unlawful, the appeal to be allowed, a decree for specific performance made and the amount of damages accordingly reduced.

Case referred to: Panchan v. Kandhai, A. I. R. (1934) All. 713.

Sanghani for appellant.

Handa for respondents.

BRIGGS, J. A.—This is an appeal from a decree of the Supreme Court of Aden in a matter concerning landlord and tenant. The respondents were the owners of four old houses which required rebuilding, and the appellant was the tenant of the ground floor of one of them. He had an old-established and profitable business as a laundryman, and also hired out beds which are used by watchmen and others who sleep out of doors. When the rebuilding scheme was approved it was necessary for the landlords to make arrangements for their tenants to vacate. In the case of the appellant they did this by entering into an

agreement in writing with him which was prepared by Mr. Taraporewalla. It is exhibit 1. It was at one time contended that improper pressure amounting to duress was put upon the landlords to execute this document, but there was no foundation whatever for this allegation and before us it was abandoned. The contract is undoubtedly valid and enforceable. Clause 3 of the agreement provides "The owners agree to grant re-entry to the said tenant on the ground floor of the reconstructed premises with a floor area of length 24 ft. and breadth 13 ft., and clause 5 provides "Should the owners fail to reconstruct the premises and grant re-entry thereof to the tenant within the period aforesaid, the owners shall pay Sh. 20 per day to the tenant as compensation till such time as the tenant shall be granted re-entry". This appeal turns primarily on the meaning of clause 3.

The learned Judge said:

$\mathbf{1}$

"In the innumerable suits which come before this Court where the plaintiff claims possession in order to demolish and reconstruct, in the great majority of such cases an offer of 're-entry' after reconstruction is made. In cases where such an offer is made it is frequently a condition made by the Court before a decree for possession is granted to the plaintiff and it is usually conceded that the word 're-entry' in this connexion denotes re-entry into the exactly equivalent though reconstructed premises. I think the word has, in cases such as these, almost come to have this special meaning. In the present case there is a difficulty which arises, as all the difficulties in this case have arisen, from the wording of clause 3 of the agreement. This is owing to the fact that the words 'on the ground floor' are inserted. The existence of these words satisfies me that it can never have been in the contemplation of the parties that re-entry on to the same site was requisite. If the intention had been otherwise these words would not have been used. In my view the words 'on the ground floor' must, and can only mean 'anywhere on the ground floor'."

After hearing the appeal argued at some length I find myself in disagreement with this view. I accept that in this context the meaning of the word "re-entry", if it stands alone, is re-entry on the identical area which was occupied before the rebuilding. But in this case there was good reason why the word could not be left to stand alone. The plan of the old building, which is exhibit 3, shows that the appellant's old premises were divided into two rooms, not exactly rectangular, having dimensions of about 18 ft. 4 in. by 12 ft. and 16 ft. 8 in. by 13 ft. 3 in. respectively. This may be taken roughly as an effective area of 25 ft. by 18 ft. I regard it as clearly proved that the intention of the parties was that the appellant should go back into this general area, but the effective area of his tenancy was going to be reduced owing to the construction of a staircase leading to the first floor, which was to go up from street level on one side of his premises. An allowance of 5 ft. was made for the overall width of this staircase and consequently the new approximate dimensions would be 24 ft. by 13 ft., as stated in the agreement. It is clear that this reduction in the dimensions, if it had not been specifically provided for in the agreement, might have led to the appellant's claiming that he was receiving a smaller area than he was really entitled to.

The words "on the ground floor" in clause 3 may perhaps be unnecessary, but it was of course of the greatest importance to the appellant that he should be on the ground floor, since the nature of his business, both as *dhobi* and hirer of cots, made this essential, and for this reason the words were probably inserted out of abundant caution.

It is true that the part of the new building corresponding to the appellant's old premises, did not exactly answer the description of an area of 24 ft. by 13 ft.,

but it is in evidence that the plan of the new building, although it was in existence at the time when the agreement was made, was not before Mr. Taraporewalla, and he may well have been uncertain of the form which the new building would take. In fact the new premises gave an area of 31 ft. 10 in. by 18 ft. overall which is reduced in various ways. The staircase running up the side reduces the width at the front by about 4 ft. instead of the 5 ft. which was expected. The general width, therefore, corresponds fairly exactly with the figure of 13 ft. in the agreement. The rear part of the premises, where the staircase has risen high enough for the space under it to be useful, has a full width of about 18 ft., but at the back of the premises the length is substantially reduced by two structures, one in each corner, one of which contains a latrine and the other an airshaft. If allowance is made for these, the general depth of the premises from the street corresponds sufficiently with the expected figure of 24 ft.

These facts seem to me to explain the wording of clause 3 of the agreement, and to make it clear that the word "re-entry", although qualified, still has its usual meaning of re-entry on the same site as was previously occupied.

As regards the admissibility of the evidence which establishes that this was the true intention of the parties, it is probably enough to point out that the learned trial Judge has taken one view of the meaning of the words and we have taken an opposite view. This seems to establish that they are at least ambiguous, and that evidence may be admissible to explain them.

I think also that this case is within proviso $(f)$ to section 100 of the Evidence Ordinance. As I have said, when that evidence is considered it is clear beyond all doubt that the intention was to let the room in the new building which $1$ have described. The position has, however, been somewhat obscured by certain passages in the pleadings and the evidence. The plaint, for example, alleges that the premises which the appellant previously occupied were a corner shop having a door on Street No. 10 in Crater, and another door on Street No. 11. Since Streets Nos. 10 and 11 are parallel to one another, this would be manifestly impossible. In fact, the appellant's shop was not a corner shop in the ordinary significance of the words, but was a shop between others, with two doors both opening on to Street No. 10. It was a corner shop only in the special sense that it was sited at one corner of the area which first comprised the four old houses and was later to comprise the new building.

The matter was further obscured by a number of references to the appellant having demanded readmission to two shops in the new building; but this also is readily explainable. When the new premises were complete, or nearing completion, the respondents decided to divide the shop to which, as I think, the appellant is entitled, into two by making a longitudinal partition running at right-angles to the street from between the two doors to the back of the shop, thus making two long, narrow shops, each with one door. This partition was unlawful, since it did not appear in the approved plan, and after a considerable interval of time, it was removed under pressure from the municipal authorities. But at the time that the appellant should have gone into occupation of the new premises they did in this sense comprise two shops and not one. In so far as the evidence indicates that he demanded admission to both of these shops it is probably perfectly accurate, but in the circumstances he was asking for nothing more than he was entitled to.

The evidence for the respondents was that they did offer the appellant possession of an area which they described as being 37 ft. by 9 ft. and which they also described as one shop. I think that there is little doubt that this refers to one-half of the premises in question as divided by the partition. The

figure of 37 ft. would be an exaggeration, and the figure of 9 ft. may have been an exaggeration, but they would both be fairly accurate. Since this area represented only half of what the appellant was entitled to, it is not surprising that he refused it.

This can also explain the conflicting evidence with regard to doors. The appellant insisted that he must have two doors, and that they must abut on the main road. He would not have been satisfied by any of the three shops on the side road, or by the shop on Street No. 11, which one may regard from his point of view as the back of the building. When he says that he was offered premises with only one door he is referring again to the frontage as divided by the unlawful partition.

$\sqrt{ }$

It is easy, to understand that in the case of an old established business restoration to the identical site was of real importance. In these circumstances it seems to me clear beyond argument that the respondents were in breach of their agreement and that the appellant would normally be entitled to the decree for the specific performance of the agreement, which was his primary claim in the suit. There was, however, a substantial obstacle to this claim in that all the five shops on the ground floor of the new building have at various times, been let, and at the time of the learned Judge's judgment he found that they were all so let. The learned Judge said, with regard to this:-

"It is urged that eviction of any of these persons would now be impossible since they are tenants protected by the Rent Restriction Ordinance. Whether this contention succeeds or not must depend upon whether or not it is found that the defendants were obliged to restore the plaintiff on a designated site, that is to say, the site previously occupied by him, or to a site on the ground floor. If the former is their obligation then their letting of this site would be unlawful for they had bound themselves not to do so. I would grant specific performance and they would have to compensate their tenant for having let premises to him which they had no right to let as best they might. If the latter obligation is the true one I would agree that the defendants could not turn out their tenant."

I agree that if the obligation of the respondents were merely to grant a tenancy of one of the five shops in question, it would have been impossible to evict one of the five tenants under the provisions of section 52 of the Transfer of Property Ordinance in order to enable the respondents to grant a tenancy to the appellant, and this was common ground when the appeal was argued before us.

I agree also that section 52 can be applied where the claim arises only under an executory agreement. *Panchan v. Kandhai*, A. I. R. (1934) All. 713. If. therefore, it was shown that the premises to which the appellant is entitled had been let after the date of the plaint, I think that the tenancy would have been unlawful, since the terms of section 52 would have removed temporarily the capacity of the landlords to create a lawful tenancy in respect of the premises in issue in the suit until after the final disposal thereof. Since the tenancy would, in this sense, have been unlawful, the tenant would not have been entitled to the protection of the Rent Restriction Ordinance, and the Court would have evicted him in order to give effect to its decree of specific performance in favour of the appellant. This is what we are asked to do in this appeal.

The learned trial Judge, on the view which he took of the agreement, held that no decree of specific performance could be granted, but that the appellant was entitled to damages in lieu. He assessed the damages up to the date of the judgment at £100, and the future damages at £200. It was argued at considerable length that these estimates were unjustified and that the damages were inadequate. In particular we were pressed with the submission that the Court should have given full effect to the terms of clause 5 of the agreement, which provided for liquidated damages of Sh. 20 per day. These would have amounted to something over £250 up to the date of judgment. We think, however, that the learned trial Judge was right in taking into account the provisions of section 70 of the Contract Ordinance, under which, in Aden, a provision in a contract for liquidated damages has a different effect from its effect under English law. Under the Contract Ordinance the specific provision in the contract operates only as a maximum limit of the damages which can be recovered, but does not excuse a plaintiff from proving his actual damage, and does not enable him to recover more than he actually proves.

In this case the evidence of damage was somewhat scanty. I have no doubt that the appellant did suffer damage through the breach of contract of the respondents, and will suffer further damage if he is not able to obtain a tenancy of the rebuilt premises. It would have been possible for the appellant, on discovering that the Court was not prepared to make a decree for specific performance, to ask that the decision on damages should be deferred in order to enable him to produce further evidence. Since the whole emphasis was laid on specific performance at the trial, such a course would have been perfectly reasonable, and I have no doubt that the learned Judge would have acceded to it. But no such request was made, and it was never suggested that the question of damages should not be decided there and then at the trial. I have no reason to think that the learned Judge's estimate of damages was erroneous, and if, in the event, it appears that the appellant is entitled to damages and to nothing else. I think the amount of $£300$ should stand.

Before leaving the question of damages I would say that the appellant sought to distinguish between compensation as provided for by section 18 of the Specific Relief Ordinance and what were described as "estimated damages for<br>breach of contract". I think this distinction is unreal. The provision in subsection (4) of section 18 that "compensation awarded under this section may be assessed in such manner as the Court may direct" only means that the Court has a discretion whether to treat the compensation as an ordinary issue in the trial or to decide it by subsequent inquiry, or in other ways, as may be convenient. The word "compensation" clearly has no special significance since it is the word used in the Contract Ordinance itself to describe damages for breach of contract.

I pass then to the question whether the tenancy of the premises to which the appellant should have been readmitted is unlawful by reason of the provisions of section 52 of the Transfer of Property Ordinance.

Although it would have been a very simple matter to produce full and complete evidence as to who has been in occupation of these premises from the time of the rebuilding up to the time of $\frac{1}{4}$ the judgment, the evidence is in fact both scanty and confusing. It seems that one Mohamed Ismail went into occupation of one of the two shops divided by the unlawful partition. He seems to have gone in about August, 1955, soon after the premises were completed. He was warned by the appellant that the premises were in issue in the suit and decided that, in order to avoid trouble, it might be better to leave. He accordingly did leave, but it does not appear when. Another tenant named Sofian Sinan was at one time in occupation of either one or both of the two shops and it is the respondents' case that he was in occupation of the premises, or at least of one-half of them, before the institution of the suit, and has remained in possession ever since. This may be so, but the evidence given is

by no means clear. There is reference also to a man referred to as "one Hamoodi" being occupation of part at least of the premises. This may refer to Sofian Sinan, or possibly even to Mohamed Ismail, or it may refer to a third tenant not otherwise mentioned. The plaint was filed on 24th August, 1955, and it is said that Sofian Sinan went into possession in August, 1955. This is of course equivocal. He may have gone in before the suit was filed, in which case his tenancy would be lawful and unaffected by section 52, or he may have gone<br>in afterwards and be subject to be evicted. The matter is made more difficult by the fact that the learned trial Judge has made no findings on these questions. On the view which he took of the construction of the agreement the question did not arise, and I think, with respect, that, on the evidence as it stood, he could not have made any findings which would have been satisfactory.

The appellant being dissatisfied with the award of damages to him, and desiring still to obtain a decree for specific performance of the agreement, it seems to me that since, prima facie, he is entitled to such a decree, it is essential that there should be a rehearing, limited to determining the question whether the tenancy of the person currently occupying the suit premises, whoever he may be, is a lawful tenancy, or is unlawful by reason of the provisions of section 52. If the latter is the case, the appellant is entitled to his decree and the appeal would have to be allowed accordingly. But if the tenancy is lawful he can have no decree of specific performance, and in view of what I have said about the amount of damages, the appeal would, in that case, be wholly unsuccessful.

I would, therefore, order that the matter be remitted to the Supreme Court with a direction to try the issue of the legality of the tenancy of the person in occupation at the time of the retrial, and with a direction that, if such occupation is unaffected by the provisions of section 52, this appeal should stand dismissed, with costs to the respondents, both of the appeal and of the further proceedings before the Supreme Court. If, however, it is found that, by reason of the provisions of section 52, it was not lawfully possible for the respondents to create a tenancy in the occupier, a decree of specific performance of the agreement should be made in favour of the appellant, and, in lieu of the award to him of the sum of £200 in respect of future damage, the learned Judge should award to him such lesser sum as shall represent the damage suffered in respect of the period between the first and second judgments. The sum of £100, awarded in respect of damage incurred up to the date of the first judgment, should stand. The appellant should, in that case, have his costs of the appeal and also of the further proceedings before the High Court. Whether the appellant succeeds or fails on the retrial the order that he should have the costs of the original trial will stand.

WORLEY, President.-I have had the advantage of reading beforehand the judgment which has just been delivered. I entirely agree with it and do not wish to add any reasons of my own.

An order will be made in the terms proposed in that judgment.

BACON, J. A.—I also agree.