Wilson v Seisay, 1972-73 ALR S.L. 208

SECTION 30

WILSON v. SEISA Y and KOROMA High Court (Tejan, J.): November 3rd, 1972 (Civil Case No. 331/70) (1] Estoppel-representation-landlord and tenant-landlord who encourages tenant or licensee to expend money on land in expectation of enlarged interest estopped in equity from terminating tenancy or revoking licence -may be compelled to grant enlarged interest or compensation: A land lord who requests or allows a tenant or licensee to spend money on improving his property under an expectation created or encouraged by the landlord that he shall thereby receive an enlarged interest, is estopped in equity from enforcing a right to terminate the lease or revoke the licence and may be compelled to grant the enlarged interest or compen sation in lieu; but a tenant in possession of land who, knowing the nature and extent of his interest, spends money on it in the expectation of an extended term or an allowance for the expenditure when that expec tation has not been created or encouraged by the landlord. has no claim either in law or equity (page 212, line 21- page 213, line 9; page 215, lines 35-41; page 216, lines 11-16). [ 2] Land Law-licences-revocation-landlord who encourages licensee to expend money on land in expectation of enlarged interest estopped in equity from revoking licence-may be compelled to grant enlarged interest or compensation: See [1] above.

[3] Land Law-title-claim of title-tenant or licensee who expends money on land under expectation, created or encouraged by landlord, of en· larged interest, has equitable right to enforcement of such interest: See [1] above. [ 4] Landlord and Tenant-title-tenant's title-expenditure on land by tenant in expectation of enlarged interest gives no such interest in law or equity unless expectation created or encouraged by landlord: See [1] above. The plaintiff brought an action against the defendants claiming a declaration of title to certain land, possession of it and mesne profits in respect of the defendants' occupation. The disputed land was conveyed to a Mr. Genet in 1939. In the 1950s he agreed to let it to two of his employees, the defendants, at a monthly rent. Both defendants built houses upon the land without the knowledge or consent of Mr. Genet who discovered the existence of the buildings in 1961. It was in that year that he sold the land to the plaintiff; she visited the land before she bought it and was told only that the defendants were tenants and that it

WILSON u. SEISA Y, 1972-73 ALR S.L. 208 H.C. was they who had erected the buildings. The defendants were informed of the sale by Mr. Genet in the plaintiff's presence and they arranged to pay their rents through Mr. Genet for the sake of convenience. They paid rent up to 1965 when the plaintiff gave them notice to quit, but they did not pay subsequently. 5 The defendants remained in possession of the land and the plaintiff brought the present proceedings claiming a declaration of title, possession of the land and mesne profits from November 1965. The defendants contended that they had equitable interests in the land. They alleged that Mr. Genet had encouraged them to 10 build on the land and had promised to convey it to them if they paid rent for 10 years. They denied that they were informed of the conveyance to the plaintiff but contended that in any case she had notice of their purported interests in the land. The court rejected these allegations but considered nonetheless whether 15 considerable expenditure by the defendants in the capacity of monthly tenants gave rise to any interest or right to compensation. The court gave judgment for the plaintiff. Cases referred to: 20

(1) Bendall v. McWhirter, [1952] 2 Q.B. 466; [1952] 1 All E.R. 1307, distinguished.

(2) Dillwyn v. Llewelyn (1862), 4 De G.F. & J. 517; 45 E.R. 1285, dis- 25 tinguished.

(3) Errington v. Errington, [1952] 1 K.B. 290; [1952] 1 All E.R. 149, distinguished.

(4) Inwards v. Baker, [1965] 2 Q.B. 29; [1965] 1 All E.R. 446, dicta of Lord Denning, M.R. applied. 30

(5) Plimmer v. Mayor of Wellington (1884), 9 App. Cas. 699; 51 L.T. 475.

(6) Ramsden v. Dyson (1866), L.R. 1 H.L. 129; 14 W.R. 926, dicta of Lord Kingsdown applied.

(7) Vaughan v. Vaughan, [1953] 1 Q.B. 762; [1953] 1 All E.R.

209. S.H. Harding for the plaintiff; Gelaga-King for the defendants.

TEJAN, J.: In this action, the plaintiff claims to be the fee simple owner absolute in possession of all that piece or parcel of land situate lying and being off Henessy Street, Kingtom. The plaintiff is now 5 claiming against the defendants- (a) a declaration of title; (b) possession of the said land and (c) mesne profits from November 1965. On the other hand, the defendants say that the piece of land now in dispute was given to them by Mr. Lucien Victor Genet and his wife and that if in fact the said piece of land was 10 conveyed to the plaintiff, the plaintiff had notice of the defend· ants' interest in the land. By a deed of conveyance dated March 23rd, 1939, the piece of land now in dispute between the plaintiff and the defendants was conveyed to Lucien Genet. According to the plaintiff, she bought 15 this piece of land from Lucien Genet who executed a deed of conveyance in respect of the land in her favour. This deed of conveyance was dated August 17th, 1961 and registered in Vol. 201, at p. 16 of the Book of Conveyances. [The learned judge reviewed the evidence and continued:] 20 Now, one of the first important matters to be considered in this case, is the relationship between Lucien Genet and the defend· ants with regard to the land in dispute. Lucien Genet has given evidence that the defendants were tenants on the land paying their respective monthly rents. He has denied that he came to any 25 agreement with either of the defendants that after the payment of rent for a number of years, the land would become their property. He also gave evidence that when he sold the land to the plaintiff he made it known to the defendants, and that the plaintiff herself increased the rents. On the other hand, the defendants say that 30 Lucien Genet promised to convey the land to them after they had paid rent for the land for a period of 10 years. I am satisfied with the evidence of Lucien Genet and I accept it. I do not believe that Lucien Genet ever came to any agreement with the defendants that the land would belong to them after the payment of rent for 35 any specified number of years. There is no doubt that up to the time that Lucien Genet conveyed the land to the plaintiff, the relationship of landlord and tenant existed between himself and the defendants. There is also evidence from Lucien Genet that he first knew 40 that the defendants built houses on the land in 1961, the year he sold the land to the plaintiff. I accept the evidence of Lucien Genet

WILSON v. SEISAY, 1972-73 ALR S.L. 208 H.C. that he never gave permission to either of the defendants to put up buildings on the land. I do not believe the defendants when they say that they had permission to do so. As I have already said, I find from the evidence that the relationship of landlord and tenant existed between Lucien Genet and the 5 defendants. I have also found as a fact that Lucien GE1net did not know of the existence of the buildings until 1961, and that his permission was not sought, or perhaps more correctly, was not given for the erection of the building. There is no evidence that Lucien knew when the buildings were being put up on the land, or 10 that he visited the site when they were being put up or after the completion of the buildings. The plaintiff bought the land from Lucien Genet in 1961. It has been suggested that the plaintiff must have had notice of the defendants' interest in the land. In fact, the plaintiff herself said 15 that she visited the land before she bought it and that she found buildings already on the land. She said that she found out that the buildings were put up on the land by the defendants when Lucien Genet told her. According to the plaintiff, the defendants were tenants on the land. She was present when Lucien Genet told the 20 defendants that she was the owner of the land and she then and there increased the rents which the defendants subsequently paid through Mr. Genet for the purposes of convenience. The defendants themselves said that they paid rent up to 1965. It seems from the evidence that it was not very long after the sale of the land in 25 1961 that Mr. Genet went to prison. While he was incarcerated, both defendants said that they paid their respective rents to Mr. Mammah, a cashier at A. Genet & Co., who is now dead. In 1965, the plaintiff gave the defendants notice to quit and even instituted proceedings against them in the magistrate's court. I believe from 30 the evidence that the defendants knew that the plaintiff had bought the land, and also knew that when they paid their rents either to Mr. Genet or the late Mr. Mammah, they were collecting the rents as agents for the plaintiff. It has been submitted that the defendants have equitable 35 interests in the land, and that when the plaintiff bought, she bought with notice of those equitable interests. It is true that the plaintiff knew of the existence of the buildings before she pur chased the property because she visited the land before the pur chase was effected. In her evidence, the plaintiff said that when 40 she saw the buildings on the land, she made enquiries and Mr. Genet told her that the defendants put up the buildings on the

land. I believe this piece of evidence. There is also the evidence that Mr. Genet invited the defendants to his house and in the presence of the plaintiff, told the defendants that the plaintiff had purchased the land, and that the defendants agreed to pay the 5 increased rents demanded by the plaintiff. This piece of evidence I also accept. It follows from the evidence that the notice which the plaintiff could have had, was notice that the defendants were holding a monthly tenancy. The question now is: Have the defendants any interest in the 10 land considering that they have spent considerable sums of money in improving the land by the erection of buildings? To answer this question, I think, it will be best to make references to cases of this nature which have already been determined. In the case of Plimmer v. Mayor of Wellington (5) the principle 15 was laid down that the equity to arise from expenditure on land need not fail merely on the ground that the interest to be secured has not been expressly indicated. This was a case in the Privy Council, and in delivering their judgment, their lordships referred to the following passage in the judgment of Lord Kingsdown in 20 the case of Ramsden v. Dyson (6) (9 App. Cas. at 710): "'If a man, under a verbal agreement with a landlord for a certain interest in land, or, what amounts to the same thing, under an expectation created or encouraged by the landlord that he shall have a certain interest, takes possession of such 25 land with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the landlord and without objection by him, lays out money upon the land, a Court of Equity will compel the landlord to give effect to such promise or expectation .... I do not under- 30 stand any doubt to have been entertained by any of them that, either in the form of a specific interest in the land, or in the shape of compensation for the expenditure, a Court of Equity would give relief, and protect in the meantime the possession of the tenant. If, on the other hand, a tenant 35 being in possession of land, and knowing the nature and extent of his interest, lays out money upon it in the hope or expectation of an extended term or an allowance for expen diture, then, if such hope or expectation has not been created or encouraged by the landlord, the tenant has no claim which 40 any Court of Law or Equity can enforce.'" [These words do not appear in the report of the case at 51 L.T. 475].

r WILSON v. SEISA Y, 1972-73 ALR S.L. 208 H.C. In the case before me there is evidence by the defendants that Mr. Genet gave the land to them and told them that they could build on the land and that after the payment of rent for a speci fied number of years, the property would then become theirs. I have said that I do not believe this piece of evidence. There is no 5 other evidence to show that Mr. Genet created any expectation or encouraged either of the defendants to lay out money on the land or that he ever visited the land since he gave the use of it to the defendants on the basis of monthly tenancies. In the case of Dillwyn v. Llewelyn (2) a father placed one of his 10 sons in possession of land belonging to the father, and at the same time signed a memorandum that he had presented the land to the son for the purpose of furnishing him with a dwelling house. The son, with the assent and approbation of the father, built, at his own expense, a house upon the land and resided there. It was held, 15 that this was not a mere incomplete gift, but that the son was entitled to call for a legal conveyance, and not merely of a life estate, but of the whole fee simple. In delivering his judgment in the case, the Lord Chancellor said (4 De G.F. & J. at 521; 45 E.R. at 1286): 20 "A voluntary agreement will not be completed or assisted by a Court of Equity, in cases of mere gift. If anything be wanting to complete the title of the donee, a Court of Equity will not assist him in obtaining it; for a mere donee can have no right to claim mo.re than he has received. But the sub- 25 sequent acts of the donor may give the donee that right or ground of claim which he did not acquire from the original gift." Again, considering the present case, the subsequent act of Mr. Genet after the tenancy was created, was to dispose of the land 30 and to inform the defendants that he had done so. There is no evidence that his conduct in any way indicated that he encouraged or created the hopes of the defendants or that he expressly or impliedly acquiesced in the putting up of buildings on the land. In the case of Vaughan v. Vaughan (7) (according to the head- 35 note at [1953] 1 Q.B. 762): "A husband was the owner of a house in which he lived with his wife as their matrimonial home until he left her on February 10, 1948. The wife continued to reside there, and in 1950 she obtained a decree of divorce against the husband 40 on the ground of his adultery. After a time he brought pro-

ceedings for possession of the house, but she resisted this on the ground that he, when leaving the house, had told her that she could always live there. She claimed, therefore, that she had an irrevocable licenc~ to live there during her life:- 5 Held, that after they had ceased to be husband and wife she could not justify her claim unless she could set up a contract. As it was, the statement originally made to her could, after the divorce, amount to no more than that she, as ex·wife, was entitled to remain in occupation as a bare 10 licensee, and the licence was therefore revocable." Delivering his judgment lin the case Evershed, M.R. said ([1953] 1 Q.B. at 765; [1953] 1 All E.R. at 210): "I do not need to pursue the question whether there should be a good consideration, but there must be something con· 15 tractual- that is, a promise made, intended to have, and having, contractual effect." In the present case, the promise made, has been denied and I have accepted the denial. There is no evidence of any other con· tractual agreement between the defendants and Mr. Genet. 20 In the case of Errington v. Errington (3) a father in 1936 bought a house for his son and daughter·in·law. He paid £250 in cash and borrowed £500 from a building society on the security of the house, the loan being repayable with interest by instalments of 15/- a week. The house was in the father's name, and he was 25 responsible to the building society for the payment of the instal ments. He told the daughter-in-law that the £250 was a present to her and her husband, handed the building society book to her, and said that if and when she and her husband had paid all the instal ments the house would be their property. From that date onwards 30 the daughter·in-law paid the instalments as they fell due out of the money given to her by her husband. In 1945, the father died and by his will left the house to his widow. Shortly afterwards the son left his wife. In an action by the widow against the daughter-in-law for possession it was held that the occupation of the house by the 35 son and the daughter-in-law was not determinable by the widow on demand, since they were entitled to remain in possession so long as they paid the instalments to the building society, and therefore they were not tenants at will of the premises. The facts of the above case are quite different from those of the 40 present case. It should be noted that the evidence in most of the cases cited was accepted by the court. But in the present case, the