IN THE SUPERIOR COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ACCRA - A.D 2018
INNOVA HOLDINGS LIMITED - (Defendant/Appellant)
MRS. AGNES GERTRUDE OSEI - (Plaintiff/Respondent)
DATE: 21ST JUNE, 2018
SUIT NO: H1/137/2017
JUDGES: F. KUSI-APPIAH JA (PRESIDING), G. TORKORNOO (MRS.) JA, M. M. AGYEMANG (MRS.) JA
MR. EDEM NUHOHO FOR PLAINTIFF/RESPONDENT
MR. THADDEUS SORY FOR DEFENDANT / APPELLANTS
This is an appeal against the judgment of the High Court, Land Division, Accra, delivered on the 21st day of March 2016. The defendant/appellant herein, (referred to hereafter alternately as the defendant, or the appellant), seeks a reversal of the said judgment which was entered for the plaintiff/respondent (referred to alternately as the plaintiff, or the respondent).
The following antecedent matters have given rise to the instant appeal.
The appellant is a real estate company, and the respondent, the owner of premises described as No. 70, Volta Street, Airport Residential Area, Accra. It is common ground that at the time of the transaction the subject of the instant suit, there were two building structures on the land. The first was a five-bedroom one-storey building with inter alia, two garages, and a two-bedroom outhouse (Building No. 1). The second was a partly-constructed six-bedroom structure (Building No. 2).
On the 18th of September 2008, the parties herein executed a lease by which the respondent let, and the appellant took, the premises described as No. 70 Volta Street, Airport Residential Area, Accra, comprising the two properties aforesaid, for a period of twenty-five years, at a rent of US$2000 per month. An advance payment of the first seven years: US$168,000 payable by the appellant, was agreed upon, and thereafter, the monthly rent was to be paid every two years.
It was a term of the Tenancy Agreement – Exhibit A, that the property was being let on an “as is” basis, and that the tenant (appellant) was to renovate and remodel at its own expense for the purpose of subletting. This agreement for renovation and remodeling was made the tenant’s covenant, and together with the stated purpose: being the subletting of the premises, it was transformed from a simple tenancy agreement, to a hybrid tenancy/construction/investment contract.
In all the references to “Premises” - which was the description of the property let by the respondent to the appellant, it referred to the two buildings described as Property No. 1 and 2 by the court below. In this judgment, they are described as Building No.1 and Building No. 2, on No. 70 Volta Street, Airport Residential Area, Accra.
Building No. 2 referred to a yet to be completed structure, and Building No 1, was as aforesaid, a five-bedroom house with a two-bedroom outhouse.
In accordance with the agreement, the appellant commenced work on Building No. 2. The said structure was at some level of development. The defendant’s representative: its Board Chairman described it as forty percent (40%) complete at time of contract, although DW1 placed the completion level at a much higher level: eighty-five percent (85%) to ninety-five percent (95%) completed. The discrepancy is no moment however, as the level of completion was not made an issue. The parties agreed that work was to be done on it.
It is unclear at what point the respondent who lived on the premises: No. 70 Volta Street, Airport Residential Area, moved out of Building No. 1 which she occupied at the time of contract. This is because the evidence adduced in that regard was conflicting, for while the plaintiff maintained that she left the premises two years before work started, the defendant’s representative and its witness DW1 stated that the plaintiff in fact remained thereat while Building No. 1 was undergoing its construction and left just before work commenced on it. It was however common ground that she was not on the premises when work begun on Building No.1 in 2009.
It was the case of the respondent that when she vacated the premises, she went to live in Kumasi, and that it was there that she received information from her sister, that Building No.1 in which she had lived at the time of contract, had been razed down completely. She alleged that incensed at this turn of events, she attempted for three years to get hold of the Board Chairman of the defendant (defendant’s representative herein), but was not successful, until she got her solicitor to write to him and followed up with the instant suit.
In the suit at the court below, the appellant which pleaded inter alia, that it did not demolish the property, but undertook works within the terms of the contract to renovate and remodel the premises, also adduced evidence regarding an oral agreement outside the tenancy agreement exhibit A, for the appellant to demolish the property and in its place, build three sets of three bedroom houses on the land taken up by Building 1. In other words, the appellant in adducing evidence in support of its case, admitted the demolition, but stated that it was agreed upon by the respondent.
Evidence adduced on behalf of the appellant also included an allegation that the respondent it was who introduced the idea of the demolition, due to an alleged dilapidated state of Building No. 1.
This allegation was vehemently denied by the respondent who alleged that the agreement exhibit A was with regard to ‘renovation and remodeling’ which she understood to mean “some small changes” that the tenant would make “to suit their taste”.
At the close of hearing, the learned trial judge entered judgment for the appellant in the following terms:
Forfeiture of the lease entered into on 18th September 2008 in respect of the property No. 70 Volta
Street, Airport Residential Area; recovery of possession on or before 30th September 2016 (six months after the date of judgment); general damages of GHC 30,000 for breach of covenant; special damages in the sum of US$500,000 being the cost of putting up a five bedroom one-storey building with amenities to the specifications of the one demolished by the defendant; mesne profits from the date the arrears of rent became due and owing to the date of the delivery of possession; interest on the sum found due, and, costs in the sum of GHC50,000.
It is against the said judgment of the court below that the instant appeal has been brought. The appellant set out seven substantial grounds of appeal (the eight promised a further ground upon receipt of the judgment but was abandoned).
The said grounds are reproduced in extenso:
The judgment is against the weight of the evidence;
The trial judge erred in holding that the property was tenantable, and not dilapidated, having regard to the evidence on record;
The court below erred when it made a finding that the appellant unilaterally demolished the 2nd building [sic] without the consent or knowledge of the plaintiff/respondent;
The court below erred when it drew inferences and reached conclusions which cannot be supported form the evidence on record;
The court below, in awarding to the plaintiff/respondent special damages in the sum of USD500, 000 which was not proved flies in the face of the authorities;
Having regard to all the circumstances, general damages in the sum of GHC30, 000 awarded to plaintiff/respondent is excessive and unjustifiable;
The costs of GHC50, 000 granted in favour of plaintiff/respondent is excessive and unjustifiable.
Because the first ground of appeal is the omnibus ground which is a general complaint against the conclusions drawn by the learned trial judge in face of the evidence led, I intend to first deal with the specific matters of complaint contained in the succeeding grounds which attack the learned trial judge’s evaluation of the evidence.
Before we proceed on this course, I will first have regard to a matter pertaining to procedural irregularity: the competency of the fourth ground of appeal. The said ground which sets out a vague complaint, that the court ‘drew wrong inferences and arrived at wrong conclusions’, without providing particulars of such, will be struck out for lack of such particulars, as well as for being vague and general in terms, disclosing no reasonable ground of appeal, see: Rule 8 (4), and (6) of the Court of Appeal Rules CI 19.
The arguments with regard to this ground will therefore be discountenanced I will deal with the grounds following, seriatim.
Was the learned trial judge in error when she held, having regard to the evidence led, that the property was tenantable, and not dilapidated?
The finding of the trial court regarding the state of the building was with regard to an issue raised by the defendant on the pleadings. It was the evidence of the defendant, in support of the pleadings that it was because Building No. 1 was dilapidated that the plaintiff, subsequent to the execution of the tenancy agreement exhibit A, entered into an oral agreement for the building to be demolished. The issue was resolved by the court below when it held that the building had in fact been tenantable and not dilapidated.
The appellant contends herein, that because the evidence that was led by the plaintiff to show that the property she let was tenantable was denied by the plaintiff, she bore the burden of proving that the house she had let was not dilapidated, but tenantable but that she failed to do so.
I am unable to agree with the contention.
The relationship of the parties in this rental/construction contract, was governed by exhibit A the tenancy agreement. For the parties to be ad idem regarding what property was let, as well as the works to be undertaken, it was imperative that the state of the two buildings comprised in the premises let by the plaintiff, be properly described to enable the parties to assume their obligations.
Although in exhibit A, the property was let ‘as is”, and renovation and remodeling was made the tenant’s covenant, there was no indication therein that the premises was not tenantable, or that it was dilapidated at the point of contract. Indeed, the contrary becomes apparent when exhibit A is read as a whole, see: Boateng v Volta Aluminum Company Ltd [1984-86] 1 GLR 733.
In exhibit A, the obligation of the tenant (appellant herein) to ‘renovate and remodel’ the demised premises, was set out four separate times:
The first mention of the obligation assumed by the defendant was in the recital where it was stated:
“The two properties will be taken on an ‘as is’ basis and the tenant shall renovate and remodel at own expense”.
The second was in the tenant’s covenant: “To renovate and remodel the two premises”.
The third was in the landlady’s covenant: “That the tenant is hereby given the consent and approval to renovate and remodel the two (2) properties to a more tenantable state than what prevails presently”.
The fourth was contained in the Schedule of Works: “The tenant shall be responsible for the following works to be done on the premises: Completely renovate and remodel the entire two (2) properties and render them more tenantable than their present state”.
In my judgment, there was no suggestion as the defendant’s representative alleged in his evidence, that per the agreement, one building, was to be renovated and remodeled, and the other, to be demolished, due to its alleged state of disrepair.
Granted that there was no description of the properties and that included that there was no description of Building No. 2 that would suggest that it was not completed, yet the very wording of the said paragraphs, indicated that the parties’ intent, was for renovation and remodeling work to be done on the two buildings comprised in the premises let.
The Oxford Advanced Learner’s Dictionary defines “Renovate” thus: “to get old buildings back into good condition”; and “Remodel”: as “To change the structure or shape of something”.
I have also had recourse to the technical meaning of ‘Remodel’ contained in Black’s Law Dictionary Definitions of the Terms and Phrases of American and English Jurisprudence. Revised 4th Ed.: “To model, shape, form, fashion afresh, or to recast, to model anew, to re-construct, to reform, reshape, to make over in a somewhat different way”.
The plaintiff pleaded in her amended statement of claim, that the parties had agreed to works to be carried out on the premises let on an ‘as is’ basis, and that same was for the purpose of enabling the defendant to sublet the premises.
Within this context, while the use of the word ‘renovate’, contemplated works to improve old premises, I daresay the use of the word remodelling was to permit necessary changes included in the wide definition aforesaid, to be made to the two buildings: Building 1 occupied by the plaintiff at the point of contract, (this building, having been constructed after land acquisition in 1968, was old, and had seen considerable use per the long tenancy of twenty-five years of the Canadian High Commission. The other was Building 2 which was still in the process of construction.
The purpose, as aforesaid, was investment-driven, for it was within the contemplation of the parties that the premises, renovated and remodeled, would be for the commercial purpose of subletting by the defendant.
These expressions suggest that the subject of the works was in a tenantable state, the proposed works being for the purpose of improving same, to bring it to “…a more tenantable state…”(my emphasis). While this may not apply to Building 2 which DW1 testified was eighty-five percent finished in certain places and ninety-five in others, although the defendant’s representative put it at forty percent), it was most certainly applicable to Building No. 1 which was actually occupied by the plaintiff at the time of contract.
In the light of the aforesaid expressions contained in exhibit A in respect of a building she actually occupied, it seems to me that there was no need for the plaintiff to adduce further evidence to prove that the building let was in tenantable condition.
The plaintiff stated in her sworn testimony: that Building No.1 which she occupied at the time of contract, having moved to live there from her house at Labone because it was a smaller house, had been kept in reasonable repair by her previous tenants the Canadian High Commission. She also testified that two years prior to the transaction, she had herself carried out renovation works which she described thus: “…changing the louvers to glazing windows…I was also having two garages. I even adjoin [sic] the first one in front to the building and renovate that one as well in such a way that you can easily come out of the house and enter the building without beaten [sic] by the rain…the first floor was also renovated which can be used as conference room”.
This is the structure which she pleaded (and this was admitted by the defendant), that she put up on land she acquired from the government in 1968, and that same was a five-bedroom structure with two living rooms, kitchen, two garages, two bedrooms with boys’ quarters. Regarding the use to which she had put the premises before the instant transaction, the plaintiff pleaded and led evidence to show that she let same out to the previous tenant for a period of twenty-five years during which they occupied the place and kept it renovated.
The learned trial judge accepted the plaintiff’s version of the state of the buildings. It is my view that she was not in error for so doing. This is because the said description, which was not controverted by contrary evidence, was sufficient for a finding that the house was not dilapidated, but was in tenantable state at the time of contract.
Although the state of the demolished building was not set out as an issue for determination, it arose from the pleadings, and from the evidence of the defendant’s representative and its witness DW1. Indeed, they stated that it was the reason for an oral agreement, subsequent to the execution of exhibit A, by which the parties allegedly agreed to the demolition of Building No.1.
As the state of the building had been put in issue by the defendant: a party to exhibit A, (who alleged that the property let was in such a state of disrepair (dilapidated) that it had to be demolished), it was for the defendant to adduce evidence in support of this stance to avoid a ruling against it on that issue, see: S. 11(1) of the Evidence Act, NRCD 323.
To make this case, the defendant tendered exhibits 1a, 2 and 3. The learned trial judge, having evaluated the evidence, accepted the version of the plaintiff, holding same to be a fact. This is the subject of complaint by the appellant who contends in his submission, that the learned trial judge wrongly treated the said exhibits as being of no moment when she observed that they appeared to be recently generated from a computer.
From the record, the learned trial judge did indeed make the observation that the exhibits appeared to be recently generated from a computer. But she also observed that they were undated, when it was common ground that the building was pulled down after the plaintiff vacated it in 2009.
It is our view that the learned trial judge committed no error when she made her observation, for it was her duty to evaluate the documentary evidence that was tendered to show the alleged dilapidated state of the buildings, in order to determine the weight to attach to the said admitted documents.
In any event, it is apparent the learned trial judge, based her evaluation of the documentary evidence on more than that impugned observation, for she went on further to say that the plaintiff had denied that the property shown in the exhibits was the building that had been demolished, and lastly, that Exhibit A did not describe the property as dilapidated, but tenantable.
We have had regard to all the evidence and find the said findings supportable from the evidence.
Indeed, beyond the matters adverted to by the learned trial judge, we are reinforced in our opinion of the rightness of the trial judge’s conclusion, by the insightful answers given by DW1 during cross-examination.
DW1, giving answers in relation to the state of the premises let out to the appellant, prevaricated and wavered between two opinions regarding whether or not Building 1 was dilapidated or simply old at the point of contract. We reproduce this excerpt from the cross-examination of DW1:
“Q. The plaintiff could surely not have been living in a dilapidated structure whiles [sic] she was putting up a second structure
A. At the time the agreement was signed and we were about moving in, it has [sic] become quite old…”
Q. My question is that surely the plaintiff could not have been living in a dilapidated structure whiles [sic] she was putting up an outhouse.
A. My Lord she was living there
Q. She was living in the dilapidated structure, is that your answer?
A. I did not say she was living in a dilapidated structure, she was living in the main house but it was quite old…”
Q. An old structure is not the same as a dilapidated structure…
A. Depending on how you look at it... Because you could have an old structure that needs reengineering for the columns and the beams to be worked on and could also have a dilapidated structure that when you look at the floors, it has [sic] cracked and you could see the reinforcement.
A. So the plaintiff was living in a dilapidated house by your answer?
A. Yes my Lord
Q. The plaintiff had moved from her house in Labone that was bigger and had rented it out to UNHCR and moved into a dilapidated structure in airport, is that what you are saying”
A. The airport structure was quite old”.
For all the said reasons, we are unable to agree that the learned trial judge erred when she held that the premises was in a tenantable state of repair, and not dilapidated.
Mindful of the fact that such could be said not of Building No. 2 which was under construction at time of contract, but of Building No. 1 which was demolished, we have no reason to disturb same.
Was the court below in error when it held that the appellant unilaterally demolished Building No. 1 without the consent or knowledge of the plaintiff?
The appellant herein has severely criticized the learned trial judge for taking time to resolve the issue regarding whether or not there was a demolition. In so doing, the appellant has taken this court on a circus aimed at obfuscating the matter of whether or not the fact of demolition was in issue at trial.
But of course demolition was in issue, for the pleading of the plaintiff contained in paragraph 8 of her amended statement of claim: “In breach of the said covenant the defendant demolished completely the five-bedroom one-storey building …”, was stoutly denied by the defendant in paragraph 7 of the defendant’s amended statement of defence, the last pleading delivered by the defendant. Thus was the issue joined.
Yet having done so, the defendant then proceeded to cloud matters by saying in its paragraph 12 that “The defendant says in answer to paragraph 8 of the Plaintiff’s statement of claim that Plaintiff [sic] did not demolish Plaintiff’s dilapidated and untenantable building, but merely remodel [sic] same as agreed upon between the parties”. However, learned counsel rejected the defendant’s pleading of denial when it became obvious to the court upon a locus in quo inspection, that the building that had stood thereat had indeed been demolished.
In its evaluation of the evidence, the court below having rightly found that there was in fact a demolition, went ahead to examine the evidence adduced in support of the variant defences put up by the defendant. We find nothing improper about the course adopted by the learned trial judge, or the finding of demolition she made.
The defendant put up variant defences which I will advert to.
First, was the at once evasive, and contradictory assertion in pleading, regarding the fact of demolition.
Then there were two defences regarding whether or not the demolition was within the scope of the transaction agreed to by the parties.
Lastly, there was the defence referred to obliquely in pleading, but in respect of which considerable evidence was given by the defendant and its witness: that the parties had an oral agreement subsequent to exhibit A.
I reproduce the pleadings in this regard for a more careful appreciation:
It was contained in the plaintiff’s amended statement of claim:
“5A. the defendant covenanted to pay in advance the sum of US4168,000, being the agreed rent for the first 7 years of the lease, it however only paid an amount of US7110,000 to the plaintiff leaving a balance of US458,000 which remains unpaid to date despite repeated demands on it to do so.
8. In breach of the said covenant, the defendant demolished completely the five-bedroom one-storey building leaving only the one-storey”,
The defendant replied:
“10. Defendant says …Plaintiff remained in the property after Plaintiff had persuaded Defendant through a certain George Kofi Frimpong to invest in the property by pulling it down and constructing a new facility in it (my emphasis);
11. Defendant says…that Defendant naturally did not insist on paying the US$68,000 because Plaintiff having procured Defendant’s consent to pull the old structures down and remodel the premises, remained on it and continued to enjoy it (my emphasis);
12. Defendant says in answer to paragraph 8 of Plaintiff’s statement of claim that Plaintiff [sic] did not demolish Plaintiff’s dilapidated and untenantable building, but merely remodel [sic] same as agreed upon between Plaintiff and Defendant (my emphasis).
13. Defendant says in answer to paragraph 9,10, and 11 of Plaintiff’s statement of claim the Plaintiff’s alleged complaints are without any merit whatsoever especially that in renovating and remodelling the property, let to Defendant by Plaintiff, Defendant acted in accordance with the terms of the tenancy agreement between Plaintiff and Defendant (my emphasis).
14. Defendant says in answer to paragraphs 9, 10, and 12 of Plaintiff’s statement of claim that Defendant not being in breach of the terms of the tenancy agreement, Plaintiff’s request that Defendant remedy breaches…are illegitimate, Defendant being within his rights in terms of the tenancy agreement to renovate and remodel the premises (my emphasis)
16. Defendant says…that Plaintiff is not entitled to any money…because it was Plaintiff who requested for remodelling of the premises by the construction of a new facility thereon and which could only have been done by pulling down the existing structures (emphasis and italics mine)”
We have had regard to the evidence led, and find in there, support for the holding of the court below, that the defendant demolished the plaintiff’s building (Building No.1) without the consent of the plaintiff.
We note that in coming to this conclusion, the court below concerned itself with two matters: first, was whether or not the demolition came within the ambit of the renovation and remodeling set out in exhibit A - the tenancy agreement, and second was whether or not there had been an agreement outside of exhibit A between the parties for such demolition to be effected. Indeed, it seems to us that the entire dispute between the parties, is grounded on whether or not the demolition of Building No.1 was agreed to by the parties.
It was the case of the plaintiff that it was not, and it was her evidence that such was not intended under the terms of Exhibit A. It was her testimony, that her understanding of the ‘renovate and remodel’ clause in exhibit A was this: that the tenant would do “small changes” to bring the property to a state that would ‘suit (its) taste’.
As aforesaid, the defendant asserted the contrary in a four-forked tongue: at once a denial that it had demolished Building No.1 at all; a contrary insistence that it had done so under the ‘renovation and remodeling’ clause of the agreement exhibit A (paragraphs 12, 13, 14); a further insistence that it had done so under a verbal agreement reached after exhibit A was signed paragraph (paragraphs 10,11); lastly, that the demolition was dictated by the works requested for by the plaintiff (paragraph 16).
The defendant’s representative testified that it was always within the contemplation of the parties that Building No.1 would be pulled down. Indeed, in his words: “It has always been the intent of both parties that the dilapidated property will be pull [sic] down, it is for this reason that an indenture was provided to us to facilitate the obtaining of a permit to building [sic]. Additionally, it was the intent of both parties that the first property will be totally renovated and remodeled upon which the landlady would vacate from the second property - the dilapidated one”.
This was however, not reflected in exhibit A which did not contain any reference to demolition. Rather, Exhibit A was explicit that the obligation assumed by the appellant was renovation and remodeling to bring the Premises (at all times referable to two buildings: Building No.1 and Building No. 2), to a “more tenantable state” than at time of contract.
In view of the stout defence of the defendant, that the works were in line with the obligations it assumed under the tenancy agreement, could the ‘renovate and remodel’ clause be construed to include demolition in the absence of the express mention of demolition in exhibit A,? I think not.
As aforesaid, the defendant’s obligation under exhibit A to ‘renovate and remodel’ the two properties comprised in the premises let, was contained in four paragraphs under various sections in exhibit A. None of the four references to renovation and remodeling, defined or described same to include the demolition of one of the buildings.
Thus from exhibit A, there is no evidence that at the time of contract, the parties had within their contemplation, the demolition of any of the buildings demised by the agreement exhibit A.
On the contrary, the agreement was clear that whatever renovation and remodeling was to be undertaken, had to be upon the two buildings contained on the premises.
It is manifest from reading exhibit A as a whole that it was within the contemplation of the parties that the two buildings on the premises let, would be placed in good shape by the defendant, and delivered up in a fair state at the expiration of the lease to the plaintiff.
No contrary intention is apparent in exhibit A which contains the usual covenants for the tenant to: “to keep the interior of the premises and all windows, doors, locks, fasteners, water closets, pipes, drains and other fittings and fixtures… in good and substantial repair and condition…except for wear and tear”; “Not to do or permit to be done upon the premises any act or thing which may… cause damage to the premises…”; and, for the tenant to “yield up to the landlady the premises in substantial state of repair and condition, fair wear and tear excepted”.
These covenants no doubt belie the defendant’s case: that the parties ever intended by the use of the words ‘renovate and remodel’, a demolition of one of the buildings comprised in the premises let under exhibit A.
We are reinforced in our opinion by the following pertinent matters: In our construction of the phrase ‘renovate and remodel’ in a bid to ascertain the intention of the parties at the time of contract, we first resort to the ordinary dictionary meaning of the word components which we have set out as: “Renovate”: “to get old buildings back into good condition”; and “Remodel”: “To change the structure or shape of something” (Oxford Advanced Learner’s Dictionary). We have also had recourse to the definition of ‘Remodel’: “To model, shape, form, fashion afresh, or to recast, to model anew, to re-construct, to reform, reshape, to make over in a somewhat different way”, in the Black’s Law Dictionary Definitions of the Terms and Phrases of American and English Jurisprudence. Revised 4th Ed.
We note that the definition of ‘remodel’, as encompassing as it is, permits a wide latitude to changes to an existing structure. It however stops short of connoting “rebuilding”.
Furthermore, S. 36 of the Rent Act, Act 220, gives the statutory definition of what constitutes “remodelling” of leased premises in these words: “Remodelling”, in respect of premises, does not include the demolition of the premises and the construction on the land on which the premises were situated of new premises…” (my emphasis)
But there is also the use of the word ‘renovate’ which could not have referred to Building No.2 for it is common ground that it was a yet uncompleted structure (whatever the level).
It seems to me, that the word ‘renovate’ could only have been with regard to Building No 1 which was an existing building. Thus, in my view, ‘renovate and remodel’ would permit restoration to good condition wherever appropriate, and wherever needed, including drastic changes to bring it to an acceptable state for commercial use by the defendant who entered into the contract with the plaintiff with a commercial purpose in mind: to sublet same.
Lastly, I note the admission of DW1 the defendant’s witness (who was very much a part of the transaction), during cross-examination, that exhibit A did not give the defendant consent to demolish Building No. 1. This admission was contrary to the case of the defendant.
For all these reasons, I am in agreement with the learned trial judge that in the tenancy agreement, the parties did not intend that any of the buildings comprised in the premises let, was to be demolished for any reason.
But as aforesaid, the defendant had another defence, which in fact negated its first defence that the demolition was done under the ‘renovate and remodel’ term of the contract. It was this: that the parties had entered into a verbal agreement subsequent to exhibit A for Building No.1 to be demolished. In this regard, it was the story of DW1, that the plaintiff sent him to the defendant’s representative to communicate her desire for Building No. 1 to be demolished in order for three sets of three-bedroom houses to be put up in its stead.
Both DW1 and the defendant’s representative intimated, that following this, alleged communication of the plaintiff to the defendant through this third party, the parties had an oral agreement to carry out this alleged communication of the plaintiff.
It was the testimony of the latter gentleman, that it was in pursuance of the alleged oral agreement, that the plaintiff gave to him her title documents on the property, to enable him secure building permits for the new structures he was going to put up in the place of Building No.1.
By this second defence, the appellant moved from the insistence that the ‘renovate and remodel’ clauses contained in exhibit A included demolition of Building No.1, to a different agreement: an oral one.
It seems to us, that the two defences are mutually exclusive: Was the demolition authorised under the terms of the tenancy agreement, or under a separate verbal agreement, or as alternately pleaded, simply dictated by the works requested by the plaintiff?
In my judgment, that the defendant departed from its pleaded defence of fulfilling the terms of the ‘renovation and remodeling’ clause of exhibit A, to among others, allege a separate oral agreement after the fact, was clearly, an attempt to explain away the absence in exhibit A, of the plaintiff’s consent for the demolition.
In giving effect to the provisions of a written agreement, the ascertainment of intention of the parties at the time of the transaction is paramount. In the instant suit, in the light of the conflicting versions of the parties, and even the internal conflicts of the defendant’s own case, ought the evidence of an oral agreement, extrinsic to exhibit A that allegedly gave the defendant power to demolish the plaintiff’s property, to be permitted to contradict or even vary the tenant’s obligation under exhibit A the tenancy agreement executed by the parties?
It is trite law that recourse may be had to extrinsic evidence to vary or contradict a written instrument in very limited circumstances, see: S.117 of the Evidence Act NRCD 323.
Of the circumstances under which extrinsic evidence may be admissible, the learning is that this may be resorted to, where the written instrument was never intended to contain the full contract, where inter alia, there are conflicting or contradictory terms or, where such evidence would elucidate the intention of the parties, see: Gorman v Gorman  1 SCGLR 174.
Some of the complexities of the instant case include whether or not the agreement exhibit A was meant to be a full and final agreement of the parties. This was in the light of what came to light regarding a sum of USD50, 000 that was supposed to be reimbursed to the plaintiff by the defendant for work the plaintiff had done on Building 2, but was not reflected in exhibit A. Interestingly, it was the said circumstance that rather gave the needed answer regarding the intention of the parties in the transaction, for in rejecting the payment, the defendant’s representative, gave this as his reason: “the agreement speaks for itself”. As was observed by the learned trial judge, this was indicative of the intent of the parties: that exhibit A was intended to stand as the full and final agreement between the parties. I hold no contrary view.
Thus, parol evidence of an alleged subsequent oral agreement ought not to be permitted to contradict the clear provisions of exhibit A.
That is, if such an oral agreement even existed.
The doubts surrounding the existence of the alleged oral agreement arise from a number of matters: In the first place, the defendant failed to specifically plead such oral agreement for demolition (although it made oblique references to such), but rather maintained in pleading that demolition was within the terms of exhibit A. Indeed, the only mention of demolition in the defendant’s pleading, was reference to an alleged request by the plaintiff to the defendant for such, rather than facts from which evidence of a meeting of minds for the purpose may be introduced.
Then there was the conflicting evidence of the defendant’s representative, that the demolition of Building 1 had been the intent of the parties all along, even though it was left out of exhibit A.
Nor did the appellant lead evidence to establish what its representative asserted: that the plaintiff’s document of title was given to the defendant to secure a building permit pursuant to the alleged oral agreement to demolish and rebuild. Rather, the representative in an about-face, admitted during cross-examination that the plaintiff’s documents were given to him to investigate her ownership of the property, and that same was used for that purpose.
We reiterate, that there is no evidence that exhibit A was intended to be otherwise than an expression of the full and final intent of the parties.
I am strengthened in my view by this pertinent fact: that in exhibit A, reference to the premises let under the lease was a reference at all times, to the two buildings on No. 70, Volta Street, Airport residential Area, Accra.
Furthermore, it seems to me, in the face of the tenant’s pertinent covenants not to do damage to any part of the property and to yield up the premises (comprising the two buildings) peaceably at the expiration of the lease, any change in obligation, especially one as drastic as the demolition of one of the properties demised, could not be done casually in an oral agreement allegedly reached in the casual manner alleged by the defendant’s witnesses.
In my judgment, for any such agreement to be permitted to so fundamentally alter exhibit A, its existence had to be capable of ready proof, and we daresay that such would have been achieved in a written agreement expressed to be collateral to exhibit A, or discernible from cogent evidence regarding the circumstances in which the oral agreement was reached, my such as would make the existence of the agreement more probable than not.
The plaintiff denied sending such word to the defendant’s representative for the building to be demolished, or ever communicating her agreement for the house to be demolished.
It was the word of the plaintiff against the word of DW1 who claimed that the event occurred. DW1 on his own showing, operated as agent of the plaintiff and later, paid workman of the defendant as a foreman of the works carried out of Building No. 2. It was perhaps a question of loyalties.
The learned trial judge accepted the version of the plaintiff. I have also had regard to the pleading and the evidence led, and I do not find that the oral agreement sought to be introduced as extrinsic evidence to vary the obligation of the defendant assumed under Exhibit A, was proven on the preponderance of the probabilities by the defendant who bore the burden of adducing evidence to avoid a ruling against it on that issue, see: S. 11(1) of the Evidence Act, NRCD 323.
The Supreme Court in Effisah v Ansah [2005-2006] SCGLR 943 provided guidance regarding how an appellate court ought to deal with findings of fact by a trial court thus: “where a trial court had articulated reasons in support of its findings and conclusions, an appellate court minded to set aside those findings and conclusions, had the absolute imperative duty to provide the reasons for doing so”.
On the whole, it is my view that the learned trial judge who had the preserve of making primary findings of fact, properly evaluated the evidence led regarding whether or not exhibit A permitted the demolition, or whether or not there was in fact an oral agreement for demolition reached subsequent to exhibit A.
Having come to the same conclusion as the learned trial judge on the matter, and finding her reasons supportable from the evidence, I have no reason to disturb the said finding of the court below.
Did the court below err when it awarded the plaintiff special damages in the sum of USD500,000 which was not proved?
It is trite that special damages which deal with expenses actually incurred, or monies actually lost, must be pleaded and strictly proven on the proper standard of the preponderance of the probabilities, see: Delmas Agency Ghana Limited v Food Distributors International Ltd [2007-2008] SCGLR. In this adventure, the party must prove that the loss actually occurred, that it was the direct result of the appellant’s act, and the extent thereof, see: Klah v. Phoenix Insurance Company Ltd  SCGLR 1139, that is, both the subject matter of the special damage, as well as the value claimed for it, see: Norgbey and Anor v Asante and Anor  1 GLR 506.
In the instant matter, there is first of all, no controversy over the fact that the plaintiff had a house which was described in pleading as: a one-storey building with five bedrooms, with amenities including two big living rooms, utility room, kitchen, two garages, and two bedroom outhouse. This was the description of Building No. 1 which was demolished by the appellant. We have upheld, the finding of the learned trial judge that the said demolition was done without the consent of the respondent. The appellant was therefore in breach of its covenant to renovate and remodel, and also to do no damage to the two buildings contained on the premises.
The said breach entitled the plaintiff to damages. The court below made awards of general and special damages. In respect of special damages, the sum of USD500, 000 was awarded to the plaintiff.
Was the said award proper in law?
In spite of the arguments of the appellant in his submission, there is no gainsaying that the proof of the replacement value of the building could not be arrived at after the usual manner of assessing the value of what was lost. This is because the house was demolished at the time the suit was commenced, and the closest thing to determining the replacement value was what was actually undertaken by PW2 the Quantity Surveyor.
Going by the reasoning of the Supreme Court in Muller v Home Finance Company Ltd  2 SCGLR 1234, the plaintiff must be placed in a position to acquire property with similar specifications as the one that was lost. The plaintiff is therefore entitled to the present-day value of the demolished building. This is the replacement value that PW2 supplied in evidence, as supported by his findings and calculations in the quantities survey report exhibit G.
The said witness took the court through his methods which were comprehensive. It was his evidence that he took the actual measurements on the ground, and arrived at the cost of replacement of the demolished structure. Having regard to the quality of his evidence and the cross-examination that failed to assail it, we are satisfied that the said witness’s evidence provided the court with the fair calculable value of the cost of replacing the building that was wrongfully demolished by the appellant.
But the calculations were denominated in Ghana Cedis, the value being given as: GH¢1,487,767.73 (One million, four hundred and eighty-seven thousand, seven hundred and sixty-seven Ghana Cedis, seventy-three pesewas). This is the sum that ought to have been awarded as special damages, for that is what was actually proven to be the replacement cost of what was demolished and was therefore no more in existence at the time the exercise to determine the value of the demolished building was undertaken. Unfortunately, the learned trial judge awarded USD500,000, the sum claimed in the writ of summons and amended statement of claim, but in respect of which no evidence was led. Indeed, the plaintiff testified that such was her loss without adducing any evidence in support thereof. The evidence that was actually led, was with regard to the sum of GH¢1, 487,767.73.
The award of USD500,000 as special damages was therefore erroneous. I will accordingly set same aside, and in its place, award what was actually proven to be the cost of the replacement value: GH¢1,487,767.73, see: Clipper Leasing Corporation v AG and Ghana Airways in Liquidation  100 GMJ1 SC, where it was held that what was proven may be awarded even if that was not the amount claimed for special damages. These special damages are awarded on the basis that the plaintiff who wanted to have her house replaced, and led evidence in that regard, would be rebuilding on the land after the expiration of the lease.
Was the award of general damages in the sum of GH¢30,000 excessive and unjustifiable?
The appellant entered into a contract to renovate rented premises made up of two buildings, one of which was occupied by the plaintiff herself at time of contract, and the other, at a stage of development, and to enjoy their use for twenty-five years.
With respect to the former, (Building No.1), that covenant was not performed. More than that, the appellant also breached the covenant not to cause damage to the premises let. For these breaches of covenant, the plaintiff is entitled to the award of damages.
The award of general damages in contract, are, upon the principle of restitutio in integrum, generally aimed at restoring the person against whom a breach has been committed and has suffered damage in consequence, to the position he would have been in had the damage not occurred, see: Royal Dutch Airlines KLM and Anor v Farmex Ltd [1989-90] GLR 623. In the present instance, however, what was lost, by reason of the breach, was a building, the replacement value of which was calculated and has been awarded as special damages. General damages for the damage suffered by the appellant following the said breach, must in such a circumstance, be at large, in the discretion of the court.
The same may be said of the award of costs of GH¢50,000 which is also the subject of complaint herein.
An appeal against the exercise of discretion has been held to not be one from the discretion of the trial court to the discretion of the appellate court, see: Ballmoos v Mensah [1984-86] 1 GLR 724. This court may thus not substitute its own discretion for that of the court below.
To succeed, the appellant must demonstrate the wrongfulness of the award of GH¢30,000 damages and GH¢50,000 costs. We must be persuaded that the trial judge exercised her discretion on “wrong or inadequate materials”, or “that the court acted under a misapprehension of fact in that it gave weight to irrelevant or unproved matters or omitted to take relevant matters into account”, see: Blunt v Blunt  AC 517 at 518 HL, approved in Ballmoos v Mensah (supra).
The appellant’s sole complaint against the exercise of discretion by the court below in the matter of the award of general damages, was that the trial judge did not demonstrate that the plaintiff suffered inconvenience. But the learned trial judge was emphatic that the demolition had hurt the plaintiff’s reversion, as she would never have Building No. 1 delivered up to her in a tenantable state of repair at the expiration of the term demised under the lease. The consideration of the damage to the reversion a matter that was adverted to by the learned trial judge, was a relevant matter in the award of damages. Regarding this, it does not matter what value the defendant intended to add to the land by the structure it had intended to construct in place of the demolished building as intimated by the defendant in its pleading. Exhibit A provided that at the end of the lease, the plaintiff’s two buildings be handed over to the plaintiff. As this was no longer possible, she had suffered damage compensable by the award of damages.
Thus, the appellant’s sole complaint did nothing to demonstrate that the award was wrong in law, and this court may not disturb the award of damages.
The award of costs is also at the discretion of the court which must exercise such discretion, guided by principles set out in Order 74 Rule 2 of the High Court (Civil Procedure) Rules CI 47. These are:
“(a) The amount of expenses, including travel expenses, reasonably incurred by that party or that party's lawyer or both in relation to the proceedings;
(b) The amount of court fees paid by that party or that party's lawyer in relation to the proceedings;
(c) The length and complexity of the proceedings;
(d) The conduct of the parties and their lawyers during the proceedings; and
(e) Any previous order as to costs made in the proceedings.
The courts, in the exercise of their discretion, more often than not, do not assign reasons for costs awarded. However, where costs are on the high side, such as in the instant matter, the sum of GH¢50,000, we daresay that it is imperative for the court to give some explanation for the substantial costs awarded. In the absence of any such justification, it seems to us that the costs of the suit at first instance were arbitrary and excessive.
In our consideration of the appeal against costs, we have had regard to the subject matter of this suit, and how long it stayed in the court before judgment was delivered: a period four years. But we also note the fact that all the witnesses were from Greater Accra. Having regard to these matters, we will reduce the costs awarded to GH¢30,000.
Was the judgment of the court against the weight of the evidence? It is trite that such complaint invokes the jurisdiction of this court under Rule 8(1) of the Court of Appeal Rules CI 19 to rehear the matter.
In this adventure of rehearing, we are empowered to have regard to all the evidence, both oral and documentary, and come to our own conclusions, see: Tuakwa v Bosom [2002-2003] SCGLR 61.
Under this ground, the appellant’s sole submission is that given that two distinct buildings were involved in the rental transaction, one of which has been completed with a considerable capital outlay, it was erroneous for the court to have ordered a forfeiture of the lease.
At the outset of this judgment, I adverted my mind to the fact that the instant transaction was no simple tenancy agreement which gave rise to a simple landlord-tenant relationship, but a contract that straddled a tenancy, as well as a construction agreement. It is therefore manifest that a consideration of the instant matter purely as a tenancy relationship gone awry, could not sufficiently address the matter at hand.
The factors that transformed the agreement from an ordinary tenancy agreement to a hybrid tenancy/construction/investment contract include the following:
a. The instant transaction was a long period contract: twenty-five years;
b. A large sum of money was paid under it by way of advance payment, to enable the plaintiff to secure sizeable alternative accommodation, and,
c. A considerable amount of money - USD320,000, was spent to complete Building No. 2.
The principles governing such a contract must necessarily be different from a simple tenancy agreement.
Therein lay the error of the learned trial judge who described exhibit A as a simple tenancy agreement, which it was not.
Principles that govern forfeiture of a lease are applicable to ordinary landlord/tenant relations. Regarding the grounds for forfeiture of the lease herein, the learned trial judge relied on S. 29 of the Conveyancing Act NRCD 175 for the breach of covenant (aforesaid), entitling the landlord to forfeiture, and S. 17 of the Rent Act, Act 220 (arguing that the appellant owed rent in that it failed to complete payment of the USD168,000, and left a balance of USD58,000).
Thus, although the Tenancy Agreement exhibit A, called for a forfeiture of the lease upon breach of a covenant, regard must be had to the fact that the construction component altered the landlord/tenant relationship. The capital expenditure carried out by the defendant on Building No.2 in reliance on the lease/construction agreement, must be taken into account.
As the appellant has rightly pointed out, although the Premises let was described as a single property: No. 70 Volta Street Airport Residential Area, it comprised two properties: Building No.1 and Building No. 2.
It was the unchallenged evidence of the defendant’s representative, that an amount of USD320,000 had been spent in renovating and remodeling the Building No.2. The said amount was expended, not under the tenancy as rent, but as investment under the construction and use part.
I cannot close my eyes to it, and uphold a blanket order of forfeiture only because the transaction was governed by a lease. The unchallenged evidence is that the work on Building No. 2 was well known to the plaintiff.
I must say, that the learned trial judge’s invocation of S. 17(1) (a) and (b) of Act 220 to support forfeiture for non-payment of rent in the instant matter, was erroneous. It is to be noted that the sum of USD168,000 which was to be paid was rent in advance: seven years advance payment. The tenancy itself was a monthly tenancy, although the rent was said to be payable every two years after the initial payment of a seven-year advancement payment. In my judgment, that there was a balance outstanding regarding the seven years advance payment in a twenty-five year lease, could not be read as a failure to pay rent, for under a monthly tenancy, the obligation to pay rent was a monthly one, see: Allamedine Bros. v Paterson Zochonis and Company Ltd  2 GLR 403.
Non-payment of rent in the instant matter - the condition for forfeiture adverted to by the learned trial judge to order forfeiture, was therefore inapplicable.
The learned trial judge also harped on the fact that the appellant failed to remedy the breach although he was called upon to do so. There is no gainsaying that this was no ordinary breach capable of remedying. Building No. 1 had been completely demolished, and the call upon it to remedy such was in the present instance, impracticable.
For the damage to Building No.1, and the injury suffered by the plaintiff for the said act, she has been compensated by general damages. Special damages representing the replacement value of the demolished house have also been awarded.
Contrary to the holding of the learned trial judge, damages, not forfeiture, should suffice for the breach of this rental/construction/investment contract under which a large capital expenditure has been made by the defendant. Commercial justice will not permit otherwise.
In the discharge of its duties, the High Court has jurisdiction at both law and equity. Where a cause of action for forfeiture accrues, the court has an inherent jurisdiction to grant the equitable relief of relief from forfeiture, see: Mensah v. Grant (1955) 14 WACA 726.
Although S. 29 of the Conveyancing Act, gives a right of forfeiture for a breach of covenant in a lease, S. 30 provides for relief from forfeiture upon application by the tenant where in the circumstances, the court finds it just to do so. In the present instance, although there was no application for such by the appellant, it seems to me, that by reason of the peculiar circumstances of this case, being that this was more than a simple tenancy and under which a considerable sum of money was expended by the appellant to do construction of Building No. 2, coupled with the damages, both special and general, that have been awarded against the appellant, the appellant ought to be granted such relief from forfeiture.
Thus, the order of forfeiture made by the learned trial judge cannot be made to stand and is hereby set aside.
Nor should the order of recovery of possession of the premises, since the subsisting lease is not the subject of forfeiture. For the same reason; that the lease is subsisting, an order for the payment of mesne profits is improper. Mesne profits is defined in Blacks Law Dictionary 8th Ed. 3824 as: “The profits of an estate received by a tenant in wrongful possession between two dates”. Because it is traditionally awarded to a landlord who has been wrongfully deprived of the profits of his property, including rents in landlord/tenant suits, it is generally awarded against a tenant who holds over after the expiration of a tenancy agreement, and deprives the landlord of his lawful rents, see: per Benin J (as he then was) in Hasnem Enterprises Ltd v IBM World Trade Corporation [1993-94] 1 GLR 172. By reason of the facts of the instant case, a claim for mesne profits is inapplicable as the defendant herein is a lawful tenant of the unexpired term of the lease, and the balance of unpaid rent for a lawful subsisting tenancy, may be recovered in a claim for unpaid rent.
Because the lease is not forfeited, I will in place of the order of the court below, make an order for the appellant to pay all outstanding arrears of rent with interest to be calculated from the date such rent became due and was unpaid.
The order for forfeiture of the lease is hereby set aside.
The order for the payment of mesne profits is also set aside.
Special damages are awarded in the sum of GH¢1,487,767.73 to enable the plaintiff to rebuild on the site of the demolition after the expiration of the tenancy.
The award of general damages will not be disturbed
Costs of GH¢50,000 is hereby reduced to GH¢30,000.
An order is made for the defendant not to construct anything on the site of the demolished Building No. 1 without the further agreement of the plaintiff.
The appeal in consequence succeeds in part and is hereby allowed in part.
Costs of GH¢30,000.00 in favour of the appellant.
MABEL M. AGYEMANG (MRS)
(JUSTICE OF THE APPEAL COURT)
KUSI-APPIAH, J.A.: I agree KUSI-APPIAH
(JUSTICE OF THE APPEAL COURT)
TORKORNOO (MRS.) JA
I have a different opinion regarding some of the issues read in my sister’s head judgment and will state so in my judgment.
This dispute commenced in the High Court Accra, over a claim for forfeiture of a twenty-five year lease that Respondent had granted to the Defendant/Appellant for commercial investment. Plaintiff/Respondent (Respondent) is the head lessee of land numbered No 70 Volta Street, Airport, on which she had built houses. As at 2008 when Respondent entered into the lease in dispute, she lived in one of the houses and one of them was yet to be completed. The Respondent’s case was that she commenced construction of the uncompleted building in 2005.The Respondent leased the entire area of land with two houses to the Appellant company at a monthly rent of $2000. The Appellant was to pay for 7 years rent being 168,000$. It paid 110,000$ leaving an unpaid balance of 58,000$.
The critical understandings of the leasehold were that
a. the Appellant would renovate and remodel the buildings to bring them to a more tenantable state
b. the Appellant would sublet them on commercial basis
The Appellant started the renovation with the uncompleted building, referred to as Property 2 in the judgment (and hereinafter in this judgment referred to as Property 2). The Appellant completed the renovation of Property 2 sometime in 2009. It was the case of the Appellant that during the time it was working on that uncompleted building, the Respondent continued to occupy the one she was living in (hereinafter referred to as Property 1) and the Appellant charged her nothing for it. After Appellant had completed Property 2 for commercial use, the Respondent moved out of Property 1. The Appellant razed down Property 1 and started constructing thereon a block of flats. This is what precipitated the dispute.
The Respondent claims that she considered the demolition of the house and commencement of a block of flats in its place, a breach of the lease agreement. Her solicitors wrote a letter to Appellant in January 2011 demanding that the Appellant restore the building to the state in which it was or forfeit the lease. Alleging that the demolition of the house had diminished the value of her reversion, the Respondent sued for
i. Forfeiture of the lease made on 18th September, 2008 between the Plaintiff and the Defendant in respect of No. 70 Volta Street, Airport Residential Area, Accra.
ii. Recovery of possession of the said property.
iii. Damages for breach of covenant.
iv. Special damages in the sum of US$500,000 being cost of putting up a five bedroom one storey building with amenities to the specifications of the one demolished by the Defendant
v. Mensne profits from the date of the service of the writ of summons to the date of delivery of possession.
In its defence, the Appellant admitted non-payment of the 58,000$ alleged by Respondent and said that it had paid 100,000$ out of 168,000$. Thereafter, it went on to urge that the Respondent had refused to accept the payment of 68,000$ (not 58,000$ as claimed or admitted to) because after procuring the Appellant’s consent to pull down the leased buildings, the Respondent had continued to remain on the premises.
The Statement of Defence seemed to speak of the two buildings leased to the Appellant interchangeably, or as one property. It said that the Respondent could not have commenced construction of a one-storey building on the land in 2005 because the property on plot number 70 Volta Street was not in a tenantable state. It also said that the Appellant had acted in accordance with the terms of the lease agreement when it remodeled the property.
Though in paragraph 12 of the pleadings the Appellant flatly denied demolishing the Respondent’s building and said it had ‘merely remodeled’ the premises, it went on to state in paragraph 16 that it is the Respondent who requested ‘for remodeling of the premises by the construction of a new facility thereon and which could only have been done by pulling down the existing structures’. It took an order to visit the locus and the tail end of cross examination of the Respondent for the Appellant’s counsel to state in clear terms that one of the buildings had been pulled down.
The Statement of Defence ended by denying that the Respondent was entitled to its claims. THE TRIAL
The Respondent testified herself and called a quantity surveyor who tendered bills of quantities for the restoration of a single storey building that was supposed to have stood on the site of the demolished building. The bill of quantities set out on pages 322 and 340 of the Record of Appeal (ROA) respectively, showed that the ground floor would cost Gh¢609,944 to build, and the first floor would cost Gh¢423,346.00 to build. On page 347, it determined that it would cost Gh¢34,252.00 to rebuild an uncompleted boys quarters. The summary for all external works found on page 352 would be Gh¢88,836.50. The total estimated cost found on page 353 of the ROA would be Gh¢1,487,767.73.
Apart from the Chairman of the board of Appellant company called Mr. Daniel Asiedu who testified, the Appellant called the gentleman who introduced the parties to each other as its witness. His name is George Kofi Frimpong. The testimonies of the two gentlemen had three significant contents regarding the pleadings.
The first is that the demolition was done at the request, and with the consent and knowledge of the Respondent. While Frimpong testified that it was Respondent who had requested the Appellant, through him, to raze down one of the buildings, Asiedu testified that she had consented to the demolition of the building. Asiedu also testified that Respondent had also asked the Appellant to build three sets of apartments in the space but he Asiedu had refused to do that on the ground that the space could not appropriately contain that many units. According to Asiedu, Appellant had proposed to build a six storey building in the space of the razed down building and Respondent had agreed to that proposal. She had also agreed to take one apartment from the new building. He said that the drawings for the new structure had been shown to Respondent.
Second, Appellant’s witnesses testified that after the start of the lease, Respondent had remained in the razed down Property 1 for eight months while the Respondent completed the Property 2. The Appellant had razed down Property 1 barely weeks after Respondent moved out in 2009.
Thirdly they admitted that Appellant had not paid 58,000$ out of the agreed rent, but said that it was Respondent who had failed or refused to provide direction and occasion for the payment.
Because of Appellant counsel’s caginess in admitting to the demolition of Property 1, the trial judge set down as an issue for trial whether one of the leased buildings had been demolished as complained of by the Respondent. The court also visited the locus of the dispute, being No 70 Volta Street, Airport. After the trial, she settled in her judgment that the locus visit proved that there had been a demolition. She also determined the Appellant had failed to lead sufficient evidence to establish that the demolished Property 1 had been dilapidated.
Her next significant finding on page 10 of the judgment was that though it was ‘clear that when the parties agreed that the Defendant was to remodel and renovate the building, they did not intend for the Defendant to pull down any of the Plaintiff’s buildings.’ Her evaluation was that if the agreement entitled the Appellant to pull down the building, then there would have been no reason, as alleged by Appellant’s representative and witness, for Respondent to convince the Appellant’s chairman to pull down the building.
In her opinion, it was because the Appellant knew that it was not entitled under the lease agreement to demolish the property that it sought to rely on an alleged oral agreement to justify demolition. She quoted the testimony of DW1 under cross-examination in which he admitted that the ‘agreement did not give the Appellant right to demolish the structure.’ Her critical holding on that issue found on page 12 of the judgment was that ‘renovation and remodeling are not the same as the demolition of the buildings in terms of the agreement dated 18th September 2008’. She went on to support that finding with the direction of Section 36 of the Rent Act 1963 Act 220 which defines remodeling, in respect of premises, not to include the demolishing of premises and the construction of new premises on the land on which demolished buildings once stood.
She found as a fact and from her evaluation of the evidence, that the Respondent never convinced the Appellant to pull down Property 1. Relying on the parole evidence rule in Section 177 of the Evidence Act 1973, NRCD 323 which does not allow extrinsic evidence to vary or qualify a written contract, she also held herself unable to accept the variation of the written contract by an alleged oral agreement to demolish Property 1 and build a block of flats in its stead.
She held that the act of demolition was in breach of the covenant not to cause damage to the original building and that the demolition had hurt the reversionary rights of the Respondent. The Appellant had also breached the obligation to pay seven years rent at the beginning of the transaction. Based on these breaches, she held the Respondent entitled to forfeiture and all her claims including special damages of $500,000. She set mesne profits at all outstanding rent sums until delivery of possession.
The Appellant appealed the judgment on the following grounds:
The judgment is against the weight of the evidence led at the trial.
The trial judge erred in holding that the second property was tenantable and not dilapidated having regard to the evidence on record.
The court below erred when it made a finding that the Appellant unilaterally demolished the 2nd building without the consent or knowledge of the Plaintiff/Respondent.
The court below erred when it drew inferences and reached conclusions which cannot be supported from the evidence on records.
The court below in awarding to Plaintiff/Respondent special damages in the sum of US$500,000 which was not proved flies in the face of authorities.
Having regards to all the circumstances general damages in the sum of Gh¢30,000 awarded to Plaintiff/Respondent is excessive and unjustifiable.
The cost of Gh¢50,000 granted in favour of Plaintiff/Respondent is excessive and unjustifiable.
Before considering the grounds of appeal, I must first express my deep sadness at the destruction that has been wreaked on the investment context of this transaction through what was evidently a lack of clarity in the defence of the suit, and lack of appreciation of the need to do everything possible to protect investment agreements.
In the Foreword to the Strategic Plan of the Commercial Courts of Ghana, the Honorable Chief Justice Sophia Akuffo wrote inter alia.
‘Ghana needs a well-functioning commercial justice system to support the country’s economic growth, and to achieve our national objectives of becoming a high-income, industrialized economy. …Without easy and speedy access to justice to resolve commercial disputes, business operations are held back. If firms cannot rely on speedy and effective commercial justice, they remain risk-averse:…if assets are tied up in lengthy legal disputes, they cannot be invested in economic development; and if potential foreign investors do not have confidence in our court system, then they will take their investment elsewhere’
These words so resonated with me as I read the record of this appeal. I am saddened about the litigious stance of counsels in this suit instead of the simple careful and sober appreciation of the investment context of the agreement that the parties entered into. My evaluation is that had the parties focused on the investment context of the transaction, they could have utilized alternate dispute resolution models to save the value of the investment that the Appellant had sunk into the Respondent’s land over the years spent on this protracted litigation. This case has now been raging for almost six years, which means that the razed building continues to bring no returns despite the objective of the transaction. And a critical examination of the point of conflict shows that the only bone of contention between the parties was whether the Appellant should build a block of flats on the site of the demolished building, or should rebuild it to the original specifications.
I will first consider the second ground of appeal.
Did the trial judge err in holding that the second property was tenantable and not dilapidated having regard to the evidence on record? My first concern is that the amount of energy spent by Appellant counsel on alleging this dilapidation fails to appreciate that the alleged ‘dilapidation’ was a non-issue within the factors considered in determining that the demolition was wrongful.
The issue that the trial judge resolved was whether by the terms of the agreement, the Appellant was required to demolish the Property 1 or in the absence of a term of agreement, Appellant was requested to demolish it, or it obtained the consent of the Respondent to demolish the building, as contended by the Appellant in different faces of its defence. When she found all three inapplicable, she determined that the demolition constituted a breach of the written agreement.
What I see from the records is that because the Appellant raised the state of the buildings as reason for demolition, the court spent time determining whether or not it managed to prove that dilapidation. However, the court resolved the conflicting positions by examining the legal basis for the demolition. She clarified that it was not done pursuant to the written agreement, nor request or consent to demolish issuing from the Respondent. These three factors did not depend on whether the building was dilapidated or not.
The trial judge also pointed out that one cannot imply ‘demolishing’ into the meaning of ‘remodel-ling’ by reason of the direct edict of Section 36 of the Rents Act 1963, Act 220. I find this piece of legal evaluation absolutely critical because the dictionary meaning of ‘remodel-ling’ includes ‘reconstruction’.
Black's Law Dictionary, Definitions of the terms and phrases of American & English Jurisprudence. Ancient &, Modern, Henry Campbell Black, MA (Revised 4th Edition by the Publishers Editorial Staff) defines remodel as ‘to model, shape, form, fashion, a-fresh, or to recast; to model anew; to reconstruct, to reform, reshape, to make over in a somewhat different way.’
The online Cambridge English Dictionary defines it as ‘to give a new shape or form to something’, and with regard to Properties, it is ‘to change the design and appearance of a building in order to make it more modern and attractive’.
Renovate is also defined as ‘to repair and improve something, especially a building’. Thus to renovate is to improve a building, and to remodel may mean keeping the original building and changing its character such that it is a new model of its original state, or reconstructing it, which would first require demolition. This dictionary meaning has been definitely excluded by Section 36 of Act 220, thereby rendering irrelevant any practical reason for demolishing the building.
Ground (b) of the appeal therefore misses the point that the finding on dilapidation is of no moment outside of the legal basis for the demolition. The arguments supporting the submission of error in the court’s finding of fact that the building was not dilapidated therefore have no relevance in this appeal. Ground b of the appeal is dismissed.
Ground c complains that the court below erred when it made a finding that the Appellant unilaterally demolished the 2nd building without the consent or knowledge of the Plaintiff/Respondent.
The court gave reasons premised on law to arrive at her finding. First, she pointed out that in the face of Respondent’s denial of consent to demolish the building, including her written expression of objections to the demolition, the burden lay on the Appellant to prove the consent to demolish. But that demand for proof could not include extrinsic evidence because of the explicit words of Section 177 of the Evidence Act 1975 NRCD 323. It reads
177. Extrinsic evidence affecting the contents of a writing
(1) Except as otherwise provided by the rules of equity, terms set forth in a writing intended by the party or parties to the writing as a final expression of intention or agreement with respect to those terms may not be contradicted by evidence of a prior declaration of intention, but may be explained or supplemented,
(a) by evidence of consistent additional terms unless the Court finds the writing to have been intended also as a complete and exclusive statement of the terms of the intention or agreement, but a will and a registered writing conveying immovable property shall be deemed to be a complete and exclusive statement of the terms of the intention of agreement; and
(b) by a course of dealing or usage of trade or by course of performance.
I disagree with the learned trial judge in her dependence on the parole evidence rule to settle the question of whether the Respondent could have consented to the demolition of Property 1, when the written agreement did not explicitly allow demolition of the property. This is because the Appellant’s witnesses testified that that she expressed that consent to demolish both before and after the writing of the lease agreement. In this context, I agree with the Appellant counsel’s submissions pointing out this point.
The clear words of Section 177 (1) excluding extrinsic evidence that contradict a written agreement deals with ‘evidence of prior declaration of intention, prior agreement or of a contemporaneous oral agreement or declaration of intention’.
It does not deal with evidence of terms introduced after the parties had signed their agreement.
In Section 177 (2), the law admits evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the intention or agreement. This means that where there is evidence of later agreement meant to expand the written contract and not contradict it, the extrinsic evidence rule will not strait jacket the parties. Thirdly the statute allows a course of dealing to explain or supplement the terms of a written agreement.
I recognize that the court responded to these exceptions by examining the Appellant’s Chairman’s position regarding the Respondent’s testimony that she had demanded $50,000 for the money she spent on building Property 2. This claim did not form part of her pleading and it was in her evidence in chief that she introduced this claim. The court drew attention to the fact that when the Appellant’s representative testified, and he was asked about this claim for 50,000$, he said ‘the agreement speaks for itself and that was the end of the story’
The court’s evaluation was that this testimony was proof that the parties had evinced a clear intention not to regard any extrinsic evidence outside of exhibit A. As much as I appreciate this legal reasoning of the learned trial judge, I must also point out that the testimonies before the court showed several ways in which the parties added to the scope of the agreement in a course of dealing that was not inconsistent with their agreements on the lease hold after the writing of the agreement. Thus the court’s evaluation that the parties evinced a clear intention not to regard any extrinsic evidence outside of exhibit A was against the weight of the evidence.
Section 177 (3) ( a) defines course of dealing as
a) ‘a course of dealing’ means a sequence of previous conduct between parties to a particular transaction which can fairly be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct;
First, the Appellant had asserted convincingly, and it was admitted by the Respondent, that the Respondent had remained on the property for more than seven months after the commencement of the lease, though by the terms of the lease, the Appellant was to renovate and remodel the buildings as their obligation under the agreement.
Second, the parties agreed that the Respondent had claimed for re-imbursement of 50,000$ that she said she had spent on the uncompleted Property 2, when that money was not captured in the Agreement. The only difference in opinions of the two parties was Appellant’s refusal to admit it as part of their agreements.
She said in examination in chief found on pages 33 and 34 of the Record of Appeal (ROA)
Q. According to the terms of the agreement what was the rent to be paid monthly
A. My Lord $1,500 a month. My lord the Defendant came to see me again and said the uncompleted house I should add it so they give me $2000; that one I told them I have spent $50,000 on that building so if he can give me that money in cash I will give it to them and they agreed. The Defendant brought the agreement the $50,000 was not part of the agreement so I asked they why is it not part and they said they plan to pay that one in cash so I agreed and they said they will pay that money upfront that is why they did not add it to the agreement
These pieces of evidence proved that the parties had discussed other terms for the lease prior to and post the written lease agreement between them. These terms did not contradict the written agreement, but expanded its scope. That being the case, the court was enjoined to look more closely at the quality of evidence regarding the Appellant’s testimony on Respondent’s consent to the demolition, and not dismiss it based only on his resistance to the Respondent’s contentions around the 50,000$.
Every appeal is a rehearing as directed by Rule 8 (1) of the Court of Appeal Rules, 1997 C. I. 19. Again, by the decision in Aryeh & Akakpo v Ayaa Iddrisu 2010 SC GLR 891, an appellate court is bound to comprehensively consider the entire evidence on record before coming to a conclusion on the matter. Tuakwa v Bosom 2001 -2002 SCGLR 61 directs that particularly where an Appellant alleges that the decision of the trial court is against the weight of evidence, it is incumbent upon an appellate court, to analyze the entire record of appeal, take into account the testimonies and all documentary evidence adduced at the trial before arriving at its decision, so as to satisfy itself that, on a preponderance of the probabilities, the conclusions of the trial judge are reasonably or amply supported by the evidence.
I have therefore looked very closely at the scope of evidence on the parties’ course of dealings regarding this transaction. I am particularly struck by the fact that there was a significant contradiction in the facts that everyone seemed to gloss over, but which made the Appellant’s testimonies on Respondent’s agreement to the demolition more probable than Respondent’s denial.
Paragraph 2 of her Statement of claim said that after obtaining the lease in August 1968, the Respondent completed a ‘one story building with five bedrooms with amenities including 2 big living rooms…’ and a two-bedroom outhouse and this is what she let out to the Canadian embassy. Paragraph 4 went on to state that she commenced another one storey six bedroom house on another part of the land in 2005 and ‘upon completion’ she leased out to Plaintiff ‘the entire property no 70 Volta Street ….consisting of the two buildings’.
These pleadings reveal that the Plaintiff’s made the case that she had three buildings on the land. These are the five bedroom house she built in 1968, the two bedroom outhouse she built with the 1968 main house, and the six bedroom house she started in 2005. This cluster of three buildings is confirmed in Exhibit G, the bill or quantities prepared over the demolished building. According to the Respondent, that first outhouse was uncompleted, and according to page 347 of the Bill of Quantities, replacing it would have cost Gh¢34,252.00.
And yet, in the same breath, the pleadings averred that she let out two buildings. All the parties spoke of two buildings as if the 1968 outhouse was non-existent. What can be appreciated therefore is that though there were three buildings on the land, the original outhouse was largely ignored in the equation when describing the buildings. It would seem the parties considered it to be part of Property 1.
This being the case, there is a high likelihood of truth in Appellant’s contention that the Respondent wanted three buildings on the land, though the lease had referred to only two buildings, as if the two bedroomed old outhouse did not exist. The contention that she invited the demolition of the house she had lived in in order for three units to be built is also likely to be true – especially if notice is taken of the fact that there was an uncompleted outhouse that had been built with the 1968 building.
And such an invitation would not contradict the terms of the agreement to renovate and remodel the two buildings, since the word ‘re-model’ in its ordinary dictionary meaning includes reconstruction. It is its technical legal meaning that excludes demolition, but that technical meaning does not by any means disallow parties from expanding their contract to include demolition and reconstruction if they so wished. The court should therefore not have cut off her evaluation of the evidence with the introduction of the technical directions of Act 220’s definition of remodel.
I must also say that since the Respondent’s claim to 50,000$ was in relation to a term she claims was reached before the signing of the lease agreement, the Appellant’s position that the written agreement dealt with all financial claims could only be in conformity with the requirements of Section 177 if it was not raised again after the writing of the lease. However, Appellant’s witnesses’ testimonies about the agreement to demolish the buildings were premised on discussions had before and after the lease agreement. Any discussions after the execution of the agreement would fall into the exclusions in Section 177 (1) to the extent that they only expanded the scope of contract and supported a course of dealing that the parties fell into regarding their written agreement.
And to the extent that those discussions post the written agreement allegedly introduced terms that were not inconsistent with the expressed agreements in the lease, my evaluation is that the court erred when she failed to examine the quality of evidence supporting the testimony that Respondent gave her consent to demolish and knew about the demolishing of Property 1 in order to construct a modern apartment building in its place. It is unfortunate that she made short shrift of that testimony by subsuming it in the parole evidence rule provided for in Section 177 of the Evidence Act.
To my mind, the quality of evidence included the presence of the 1968 two bedroomed outhouse that was built with the original five bedroomed house on the land, which made the testimony about Respondent wanting three units on the land more probable than not. The quality of evidence included the Respondent’s extended presence on the property after signing the lease, and while the first renovation was taking place, which provided opportunities for discussions beyond the written agreement. The quality of evidence included the Respondent’s testimony that the parties had agreed to a cash payment of 50,000$ for the Property 2, which proved the position of both parties that their agreements on various matters important to each of them went beyond the written lease.
The quality of evidence included the length of time it took for the Appellant to commence this action and the tendering of only one letter of protest dated January 2011, even though she claimed she protested the demolition immediately she heard of it in 2009, and got her lawyers to write four letters of protest. These pieces of evidence inform me that the protestations against the demolition, culminating in the court action, were not so much about the demolition, but matters that the Respondent wanted attended to such as failure to pay the outstanding sums of 50,000$ and 58,000$, and any other ancillary issues, rather than a concern about injury to the Respondent’s reversionary interest, which reversion is not even due until 2033. I find it interesting that in exhibit D, the Respondent knew that the Appellant had ‘commenced the construction of blocks of flats’ on the demolished land, and she found this reconstruction objectionable.
The quality of evidence in my humble view, includes the fact that the demolition of the oldest of the buildings in order to reconstruct modern buildings for commercial sub-letting in their place, would be consistent with what the ordinary person on the street would understand by the agreement reached. This is because I find an insistence on a homestead rather than a commercial block of apartments improbable, especially after a party has gone to the trouble of negotiating with a property developer to redevelop their land at a site like Airport Residential Area.
It is within this frame that I agree with ground (c ) that the court below erred when it made a finding that the Appellant unilaterally demolished the 2nd building without the consent or knowledge of the Plaintiff/Respondent
Ground (d) is vague and cannot be allowed to stand as a ground of appeal. Rules 8 (4), (6) and (7) of the Court of Appeal Rules 1997 CI 19 direct that
(4) Where the grounds of an appeal allege misdirection or error in law, particulars of the misdirection or error shall be clearly stated
(6) A ground which is vague or general in terms or which does not disclose a reasonable ground of appeal is not permitted, except the general ground that the judgment is against the weight of evidence
(7) A ground of appeal or part of the appeal which is not permitted under subrule (6) may be struck out by the Court on its own motion or on application by the respondent
I will strike out ground (d) of the appeal which urges that ‘the court below erred when it drew inferences and reached conclusions which cannot be supported from the evidence on records’ without giving particulars of the inferences or conclusions complained about.
I will now deal with ground (a) because grounds (e) and (f) focus on consequential reliefs which arise from the judgment that Respondent is entitled to her claim for forfeiture of the lease. If the judgment against forfeiture is overturned, which I intend to do, these consequential reliefs will go out of the window with that forfeiture
Ground (a) complained that the judgment was against the weight of evidence. It is the settled position of the law derived from the dictum of the Supreme Court in cases such as Djin v Musah Baako 2007-2008 SCGLR 686 that an Appellant who urges that a judgment is against the weight of evidence is implying that there were certain pieces of evidence on the record which, if applied in his favour, could have changed the decision in his favour, or certain pieces of evidence have been wrongly applied against him. The onus is on such an Appellant to clearly and properly demonstrate to the appellate court the lapses in the judgment being appealed against.
Appellant counsel pointed to the fact that there were two buildings on the leased property, and the execution of Appellant’s obligations with respect to one building had raised no objections from the Respondent. The Appellant’s representative had also testified that it had spent more than 320,000$ on completing that building. Counsel submitted that as a court of law and equity, even if there had been breach of the lease by demolition of Property 1, by reason of the expenditure of Appellant on Property 2, it was unjust and inequitable for the court to order the forfeiture of the whole lease covering the two buildings. He drew attention to Appellant’s Asiedu testifying that the Appellant was willing and able to reconstruct the demolished building. He urged that by reason of these factors, the court erred in ordering forfeiture of the entire lease.
I totally agree with him. Forfeiture is not a relief to be given lightly and the Conveyancing Decree makes this clear with a deliberate outlay to be satisfied prior to forfeiture. Thus for a land lord to be entitled to forfeiture of a running lease, there must not only be clear proof of breach of a lease, but a broad spectrum of circumstances which would allow a court to exercise discretion on whether to give relief against forfeiture or not.
My view is that during the trial, the cagey pleadings about demolition of Property 1, the protestations about Property 1 being dilapidated, and the lack of focus on the legal premises that would allow relief from forfeiture contributed to send the court’s attention away from the track that the law recommends in cases where forfeiture of a lease is at stake.
But the circumstances of this case are so simple that seeking for and granting relief from forfeiture should have been paramount in the consideration of the Appellant and the court. In addition to the factors enumerated by Appellant counsel above, which are borne out by the evidence, there were other pieces of uncontested evidence before the court that should have weighed against the court’s consideration of forfeiture in the judgment.
I believe that the most important piece of evidence – apart from those already described by Appellant counsel was the fact that the Respondent had retained the rents for the properties from the time she got to know of the demolition in 2009, while seeking forfeiture under the lease agreement in 2012. Her protests about the demolition were not expressed until January 2011. As provided for by Sections 29 and 30 of the Conveyancing Decree, a notice of intention to re-enter leased premises is to be sent to the known address of the lessee alleged to be in breach, and this is what she eventually did in exhibit D. Thus, if she was sincere about giving notice of intention to terminate the lease on account of the demolition, she should have sent notice of that intention to the Appellant at this known address timeously. But she did not. She retained the rent, wrote more than a year later, and only came to court almost three years after the demolition to demand an end to the twenty five year lease that had run for only four years. She did this also knowing that Appellant had not only demolished Property 1, but had commenced building a block of flats on the land. She was also well aware that the business of the Appellant was the development of buildings for commercial use, and this is what she gave her land up for.
The settled position of the law is that a landlord who acts in any manner that indicates an election to view the lease as still running waives any right to forfeiture after an alleged breach of the covenants of a lease.
In Central Estates (Belgravia) Ltd v Woolgar (No 2), 1972 3 All ER 610, the Court of Appeal, reiterated this principle over and over again. The trial court had held that there had not been a waiver of forfeiture because the tenant who had paid rent on demand from the landlord knew full well that the landlord’s expressed intention to forfeit the lease remained unchanged despite the claim for rent.
The law lords held that ‘it is sufficient if there is an unequivocal act done by the landlord which recognizes the existence of the lease after having knowledge of the ground of forfeiture’. Buckley LJ went on to say on page 616 that ‘the landlord’s right is a right to elect whether to treat the lease as forfeit or as remaining in force. Any election one way or the other, once made, is irretractable. If the landlord by word or deed manifest to the tenant by an unequivocal act a concluded decision to elect in a particular manner, he will be bound by such an election. If he chooses to do something such as demanding or receiving rent which can only be done consistently with the existence of a certain state of affairs, namely the continuance of the lease or tenancy in operation, he cannot thereafter be heard to say that the state of affairs did not then exist. If at the time of the act he had a right to elect whether to forfeit the lease or tenancy or to affirm it, his act will unequivocally demonstrate that he has decided to affirm it. He cannot contradict this by saying that his act was without prejudice to his right of election continuing or anything to that effect. In this respect his act speaks louder than his words, because the act is unequivocal; it can only be explained on the basis that he has exercised his right to elect. The motive or intention of the landlord, on the one hand, and the understanding of the tenant, on the other, equally irrelevant to the quality of the act’
At 2000$ a month, the rents of $110,000 paid to Respondent, plus the investment made in the Property 2 covered more than five years rent for the lease.
Even if delay in discussing the re-construction of the demolished building had been caused by the Appellant, a point the Respondent makes and the Appellant denies, what is significant is that by the time the Respondent commenced this action in September 2012, the rents she had received had not been covered by the effluxion of time. Again, when she got to know about the demolition in 2009, she did not take steps to return the rent she had earned from the transaction, while purporting to protest the demolition and reconstruction. With this state of affairs, the court should, as a matter of law, and within the stiff trajectory from which she decided most of the issues in this case, have found that the Respondent had compromised her right to forfeiture by waiver, since she had elected to hold on to the rents paid for the period that she claimed there had been a breach of the contract.
The Supreme Court in West Africa Enterprises Ltd vs Western Hardwood (1998-1999) SCGLR reiterated the position that in contracts for the sale of land or interest in land, acts of forfeiture must be consistent with Sections 29 & 30 of the Conveyancing Decree 1975 NRCD 175. These two sections of the Conveyancing Decree reveal the law’s aversion to forfeiture unless as a last resort. They read:
Section 29 Restriction on re-entry and forfeiture
1) A right of re-entry or forfeiture under any provision in a lease for a breach of any covenant, condition or agreement in the lease shall not be enforceable, by action or otherwise, until the lessor serves on the lessee a notice:
i) specifying the particular breach complained of;
ii) if the breach is capable of remedy, requiring the lessee to remedy the breach;
iii) requiring the lessee to make reasonable compensation in money for the breach, except where the breach consists of a non-payment of rent;
b) the lessee has knowledge of the fact that such notice has been served; and
c) the lessee fails, within a reasonable time after the service of the notice under paragraph (a) to remedy the breach, if it is capable of remedy
2) where a notice has been sent by registered post addressed to a person at his last known postal address in Ghana, then, for the purposes of Subsection (1), that person shall be deemed, unless the contrary is proved, to have had knowledge of the fact that the notice had been served as from the time at which the letter would have been delivered in the ordinary course of post.
3) This section applies notwithstanding any provision to the contrary in the lease.
Section 30 Relief Against Re-entry and forfeiture
where a lessor is proceeding by action or otherwise to enforce a right of re-entry or forfeiture under any provision in a lease, or for non-payment of rent, the lessee of the property and also a sublessee of the property comprised in the lease or any part thereof may, either in the lessor's action (if any) or in any action brought by such person for that purpose, apply to the Court for relief subject to Subsection (1) of section 29, where a lessee applies to the Court for relief, the court may grant or refuse relief as it thinks fit having regard to the proceedings and conduct of the parties and to all the other circumstances, and relief when granted may be upon such terms, if any, as to costs, expenses, damages, compensation, penalty or otherwise, including the granting of an injunction to restrain any similar breach in the future, as the Court in the circumstances of each case thinks fit where a sublessee applies to the Court for relief, the court may make an order vesting, for the whole term of the lease or any less term, the property comprised in the lease or any part thereof in that sublessee upon such conditions as to execution of any deed or other document, payment of rent, costs, expenses, damages, compensation, giving security, or otherwise as the court in the circumstances of each case may think fit, but in no case shall any such sublessee be entitled to require a lease to be granted to him for any longer term than he had under his original lease.
The Conveyancing Act directs that the conditions upon which a party will forfeit his rights ought to be set forth in the contract. There must be a breach of any covenant, condition or agreement in the lease. Then there ought to be notice regarding the alleged breach, and opportunity to remedy the breach ought to be given as options in place of forfeiture. Finally, the court would be expected to apply its discretion in determining whether to give relief against forfeiture or not.
In the present case, the trial court identified ground (f) of the Agreement as the covenant that provides a ground for identifying breach that permitted forfeiture. It provides that
f. Not to do or permit to be done upon the Premises any act or thing which may be or become a nuisance or annoyance or cause damage to the premises or other adjoining property
But what I find inconsistent with this holding on damage to the building is that even before the Respondent started the action, her notice of re-entry, included acknowledgement of the fact that the Appellant had started construction of a block of flats on the land. In view of the unique circumstances of this transaction which required the renovation and remodeling of two buildings identified on the land, the Appellant would not have had a choice but to execute works on the buildings in issue – however minor, or however major. It is for this reason that the court ought to have considered that the reconstruction process constituted a remedying of the breach of demolition (as damage to the premises).
My view is that before the running out of the period over which cash had been received as rent, as well as a period of time over which the value of renovation on Property 2 have been set off against rents, any holding that the Respondent was entitled to be the person to reconstruct the demolished building, instead of the Appellant, would produce a result that is too harsh, unjust and unfair, and equity ought to intercede to prevent that. There would be no justice in asking the Appellant to give the Respondent money to rebuild the razed down house, when her right to reversion would not accrue until 2033. There would be no justice in handing over the completed Property 2 to Respondent, when she had raised no complaint about it.
My humble view is that what the court could have done, in order to give justice to both parties was to order the Appellant to rebuild the razed down building within the shape of the original structure, while being given the liberty to ‘remodel and renovate’ as the parties had agreed to, or better still, she should have directed the parties to negotiate the eventual form of the new structure that had already been commenced.
This is how the Respondent who had taken valuable consideration to allow renovation and remodel-ling, would have been held to her obligations, while the Appellant’s rewards for giving the consideration, were not taken away. But to take away a long lease ending in 2033 in 2016, and prevent its returns, while handing back a property for which a lessor has already collected a significant portion of the lease value, on the premise that bringing down a building constitutes ground for forfeiture is an unhappy mis-appreciation of the circumstances under which forfeiture would be allowed by the courts, and the purpose of the investment transaction.
I agree with Appellant that the judgment on forfeiture is against the weight of evidence, and so ought to be set aside. I set aside the order of forfeiture
With the order setting aside the order of forfeiture, the special damages of 500,000$ and mesne profit of outstanding rents go out of the window. To my mind, the claim for $500,000 was an unfortunately opportunistic claim, and should have been viewed as such. Even if the Respondent was entitled to forfeiture of the lease, which I hold that she was not entitled to, Exhibit G showed that the cost of reconstructing the demolished building was Gh¢1,487,767.73 and not anywhere near 500,000$ which values over 2 million Ghc.
Again, the Respondent could not be entitled to rents as mesne profit, while fighting for forfeiture. The money awards were wrong, and they are hereby set aside. The Respondent should not have won this case, because my candid thought is that the action was only an opportunistic one, aimed at compelling more out of the redevelopment of her land, than had been agreed. I would set aside the award of cost.
In closing, I wish to point to the need for courts to keep the perspectives of the social and industry contexts of the transactions that came to court when evaluating rights. When a property developer leases a building, that building does not represent just a place to stay, but the jobs of the business, the capital of an investor and profits for the lease period, and products of an economy. Because of the inefficient litigation in this suit, spurred on by failure to quickly settle the few points of contention between the parties, the essence of the investment in this transaction has been disturbed in a very cruel way. Our country deserves better from stakeholders in the justice delivery system. The appeal is allowed and all the orders of the judgment are reversed.
GERTRUDE TORKORNOO (MRS.) JA
(JUSTICE OF THE APPEAL COURT)