Ismail Bros v Bogha (Civ. App. No. 18/1935.) [1936] EACA 15 (1 January 1936)

## COURT OF APPEAL FOR EASTERN AFRICA.

Before SIR JOSEPH SHERIDAN, C. J. (Kenya); ABRAHAMS, C. J. (Tanganyika), and KNIGHT-BRUCE, Ag. J. (Zanzibar).

## HUSSEIN ISMAIL BROS., Appellants (Original $Applications$ $\overline{11}$

## GORDHAN BOGHA, Respondent (Original Respondent). Civ. App. No. $18/1935$ .

Sale of land—Payment of purchase-money deferred—Purchaser put into possession on condition of paying interest on purchase-money—Condition that vendors might terminate agreement upon default in payment of interest-Purchaser a tenant at will-No necessity for demand of payment-Advocate's lien-Enforceable by the advocate and not by the client—Does not extend beyond rights of client.

The appellants agreed to sell land to the respondent, the payment of the purchase-money being deferred but the purchaser being put into possession on the terms of his paving all ground rent, rates, taxes, etc., and also paying interest at the rate of 10 per cent on the purchase price. The agreement provided that the vendors should be entitled to terminate the agreement without notice in the event of the purchaser failing to pay the said interest for a period of three consecutive months. Default in the payment of the interest having been made, the vendors cancelled the agreement. Thereupon the purchaser had a caveat lodged against the property under the Registration of Titles. Ordinance (Cap. 102 Uganda). The vendors applied to have the caveat removed and their application was dismissed on the ground that the purchaser was a tenant and that no demand for the payment of rent had been made.

After the decision of the appeal the appellants (the vendors) claimed to be entitled to set off the sum due to them by the respondent (the purchaser) against the costs of a previous appeal awarded against them: the respondent contended that his advocates had a lien on these costs.

## $Held$ (14-11-35):—

1. That the agreement created only a tenancy at will between the appellants and the respondent and that, therefore, no demand for payment was necessary (Doe v. Chamberlaine (151 E. R. 7) $followed)$ :

2. That the lien could only be set up by the advocates, and not by the client, and that the rights of the advocates in respect of the costs did not extend beyond those of the client. (Pelly $v$ . Wathen (42 E. R. 457) and Bawtree v. Watson (48 E. R. 804) followed).

Wilkinson, for the appellants.—In fact there was a demand for payment of interest, but no demand was necessary; the respondent was only tenant at will: Doe v. Chamberlaine (151 E. R. 7), Dart, Vendor and Purchaser (7th Ed.) 1001. As such he was not entitled to enter a caveat.

Morrison, for the respondent.—In Doe v. Chamberlaine the possession was unlawful; we were in lawful possession: Right $d$ . Lewis v. Beard (104 E. R. 350). A purchaser has an equity in respect of his improvements: Dart (8th Ed.) 447. The clause giving the appellants power to cancel the agreement is a penalty: time was of the essence of the contract: re Dagenham (8 Ch. App. 1022). There must be demand for payment and demand for possession.

Wilkinson, in reply, referred to Roberts v. Barry (43 E. R.) 112) and Green v. Levin (13 Ch. D. 589). The lien of an advocate extends only to the sum due as between the parties: Pelly v. Wathen (42 E. R. 457); Bawtree v. Watson (48 E. R. 804).

JUDGMENT (delivered by KNIGHT-BRUCE, Ag. J.).—This is an appeal from the decision of Mr. Justice Francis on an application made under the Registration of Titles Ordinance (Revised Laws of Uganda, Cap. 102). An appeal against the same order was dismissed by this Court in July last upon the grounds that no leave to appeal had been obtained from the Court which made the order. This permission has, however, now been granted.\* The facts of the matter are that on April 10th, 1934, the parties made an agreement (referred to as "H. E.1") by which the appellant agreed to sell to the respondent a certain plot of land situated in Kampala for the sum of Sh. 15,000. This sum was not payable until the 10th April, 1936, but until that date the respondent undertook to pay all ground rents, rates, taxes, assessments and other charges payable to the Government in respect of the plot and also to pay "interest" at the rate of 10 per cent upon the purchase price. This "interest" was payable every month, commencing on the 1st May, 1934. It is alleged by the appellants that, by virtue of clause 8 of this agreement, they were entitled to terminate the agreement without notice in the event of the respondent failing to pay the said "interest" for a period of three consecutive months. It is also alleged by the appellants that on the 9th March, 1935, the respondent had in fact failed to pay this interest for more than

<span id="page-1-0"></span><sup>\*</sup> NOTE.-Having regard to section 75 (1) (h) of the Civil Procedure Ordinance, 1926, and O. 40 r. 1 (2) and the definition of "Rules" (Civil Procedure Ordinance, section 2 (20)) and to section 209 of Cap. 102:<br>query, whether an appeal from the order made under section 147 of Cap. 102 lay even with leave.—Editor.

three consecutive months and that by a letter bearing the same date the appellants duly cancelled the agreement. This letter was produced and marked "H. E.2".

On March 20th, 1935, the respondent lodged for registration a caveat against the said property and this caveat was registered in the Registry of Titles.

On 2nd April, 1935, the appellants filed an application calling upon the respondent to show cause why his caveat should not be removed. The learned judge, in his order, first dealt with the question as to whether such proceedings lay under the Ordinance, and came to the conclusion that they did. No appeal has been preferred against this part of the order. The next point raised by Dr. Hunter, who then appeared for the respondent, was that no formal demand had been made for the payment of the "interest", and that the appellants were not entitled to rescind the contract until such demand had been made and refused. It was contended that what in the agreement was termed "interest" was actually "rent", and that therefore the ordinary relationship between a landlord and tenant came into existence, and specific demand for such rent was an essential condition of forfeiture. It was admitted on behalf of the respondent that "interest" had not in fact been paid for over three months, but in his affidavit it was pleaded that "no formal demand for same" had been received. This expression apparently refers to the terms of the letter from the appellants dated 9th March, 1935 (Ex. H. E.2). It was held that no demand for payment had been proved to have been made (the case was tried entirely upon affidavits and arguments), and that accordingly the application was premature and must be dismissed. A somewhat unfortunate feature of the trial before the lower court was that, apparently, another letter of demand (dated 3rd January) was read by Mr. Wilkinson, and, as he states, was not objected to by Dr. Hunter. The record indeed contains a reference to this having been done, but no attempt was made to include this letter in the file and it is not referred to in the judgment. In this appeal, however, Mr. Wilkinson has based his case upon wider grounds and argued that in the circumstances no demand for payment was required. Though again the file contains no record of possession ever having been demanded, Mr. Morrison has conceded that a letter dated 11th March did in fact contain such a demand. Mr. Wilkinson has cited the case of $\overline{Doe}$ v. Chamberlaine (151 E. R. 7) in support of his contention. The facts in that case were practically identical with the facts in the case now before us. It was held by Abinger, C. B., Parke, B., Anderson, B., and Gurney, B., that the estate thus created was nothing more than a tenancy at will, and that no notice to quit was required, as an estate at will may be determined by demand or entry. Mr. Morrison has argued that the case of

Doe v. Chamberlaine dealt with the question of the purchaser's rights after the expiration of the period to pay. He has quoted the case of Right v. Beard (13 East 210, 104 E. R. 350). But all that that case decided was that in such circumstances there can be no ouster by ejectment before the purchaser's lawful possession is determined by demand for possession or otherwise. And Mr. Morrison admitted later on that there has been a demand for possession. We are therefore of the opinion that the appellant, having done all that the law required him to do, is entitled to succeed in his application that the respondent's caveat should be removed. No grounds whatsoever, in our opinion, have been shown which would entitle the respondent to any form of equitable relief. The appeal is therefore allowed with costs, both in this Court and the Court below.

An application has also been made to us for a declaration that a bond, entered into by the Uganda Commercial Agency with the Registrar of this Court guaranteeing the due prosecution of the first appeal and payment of costs by the appellants. should be declared void. The facts are that in that appeal costs amounting to Sh. 318/50 were awarded against the appellants. By a letter dated the 24th September, 1935 (marked "HEB") the appellants informed the respondent that they proposed to "appropriate" this sum in part payment of a claim of Sh. 378/58 due to them by the respondent. It has been contended in this Court that the appellants have no right to set off this debt against the amount of the costs as the advocates of the respondent have an equitable lien on the sum ordered to be paid by the Court. It appears to us that if a lien is to be enforced at all, it must be enforced by the holder of the lien, i.e. in this case by the advocates concerned. But apart from this, the cases cited by Mr. Wilkinson, Pelly v. Wathen (42 E. R. 457) and Bawtree v. Watson (48 E. R. 804), are ample authority for his contention that the lien of an advocate cannot extend beyond the rights of his client. In this matter it has not been seriously disputed either that the respondent owes the sum claimed or that the appellants do not possess the right to set off the amount of costs against that sum. The application is therefore allowed with costs.

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