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JUDGMENT
BY COURT:
The Plaintiff by its writ and
statement of claim filed on 25th
February 2009 claimed the
following:
a)
An order (order for specific
performance and enforcement of
covenants) for Defendant to
execute a Lease Agreement to
cover terms over a leasehold
property, to which Plaintiff and
Defendant agreed, and for which
Defendant has already received
the rent for the period
1996-2007, Plaintiff and
Defendant having been ‘ad idem’.
b)
An Order that the parties draw
up a Lease Agreement to
incorporate terms already agreed
upon.
c)
An Order that the Agreement
commences from the year 2004 to
incorporate the terms of an Old
Agreement mutually revised by
Plaintiff and Defendant
themselves.
d)
An Order that the Lease
Agreement contain a provision
for renewal for further terms to
be mutual agreed by Plaintiff
and Defendant.
The facts in this case as agreed
to by the parties are that one
Ebenezer Kwadwo Donkor
(deceased), father of the
Managing Director of the
Plaintiff Company took a fifty
years lease from the deceased
mother of the Defendant from 1st
July, 1977. The lease was
tendered as exhibit ‘D’.
A house was built on the land by
the deceased and same was
devised to the plaintiff
company. Apart from the fact
that the lessee was to pay and
discharge all existing and
future rates, charges, taxes etc
imposed on the demised land, he
was to pay to the lessor 25% of
the assessed annual economic
rent of twelve thousand cedis
(¢12,000) for the first three
(3) years and thereafter thirty
(30%) percent payable five years
in advance.
That this ¢12,000 or (GH¢1.20)
was considered to be too low so
it was reassessed. The
Plaintiff then insisted that the
redemption clause should also be
changed since the rent had been
changed and be replaced with a
proposed new lease which was
sent to the defendant to sign
but for which he refused to
sign.
The Defendant agreed to all
these facts and stated that he
never agreed to the proposed
lease, except the assessed
economic rent, which he
compelled the plaintiff to pay
after its agreement. The
defendant alleged that the
Plaintiff had not paid the
ground rent for the period
ending 2007 and 2008. The
Defendant counter-claimed for
the following:
a)
Declaration that the leasehold
Agreement entered into by the
late Sarah Amoah Dodoo and the
late Ebenezer Kwadwo Donkor is
binding on the parties hereto.
b)
An order that the parties to
this action respect the said
Agreement and allow same to run
in accordance with the terms,
conditions and stipulations of
the Agreement.
c)
An order directed at the
Plaintiff to pay to the
defendant the arrears in the
ground rent at its current value
as provided for in the Valuation
Report caused to be prepared by
the Plaintiffs Attorney.
The issues set down for trial
are as follows:
1.
Whether or not periodic reviews
in rent payments did not amount
to variation of the original
lease.
2.
Whether or not there is need to
incorporate the various reviews
into one neat document.
3.
Whether or not review or
extension of a lease term is an
implied covenant.
4.
Whether or not Plaintiff is
entitled to his claim.
5.
Whether or not Defendant is
entitled to his counter-claim
6.
Any other issues raised by the
pleadings.
Additional issues filed and set
down are as follows:
a)
Whether or not the lease is for
a term of 50 years.
b)
Whether or not the parties to
the leasehold Agreement provided
for the relationship that must
exist amongst the parties and
their heirs, successors, and
Personal Representatives, after
the expiration of the term of 50
years.
c)
Whether or not the parties to
this action are bound by the
leasehold Agreement dated 1st
day of July, 1977.
d)
Whether or not the leasehold
Agreement provide for the
periodic review of payment of
ground rent.
e)
Whether or not any perceived
extension of the term granted by
the leasehold Agreement is a
condition for the payment of
ground rent.
f)
Whether or not the Plaintiff
defaulted in the payment of
ground rent for a period of 27
years i.e. from the year 1977 to
the year 2004.
From the pleadings and the
evidence of the parties, there
is no dispute that there was a
leasehold agreement between the
plaintiff’s benefactor and the
defendant’s mother, and that the
lease is exhibit ‘D’. I
therefore hold that the parties
to this action are bound by the
50 years lease from 1st
July, 1977.
On issues ‘b’ and ‘d’ of the
further Direction, it was
provided in exhibit ‘D’ that “At
the end of the term hereby
created, if there shall not be
any breach of covenant by the
lessee the lessor shall let out
the demised premises with the
building thereon to the lessee
at an economic rent prevalent at
time subject to periodical
review.
In the said exhibit ‘D’ “Lessor”
and “Lessee” were defined to
include heirs, successors,
personal representatives, and
assigns. The parties, standing
in place of the original parties
are therefore bound by what is
contained in exhibit ‘D’.
In P.Y. Atta and Sons Ltd vrs.
Kingsman Enterprises Ltd
(2007-08) SCGLR 946, the Supreme
Court held in its second holding
that “in considering every
agreement, the paramount
consideration was what the
parties themselves intended or
desired to be contained in the
agreement. The intention should
prevail at all times. The
general rule was that a document
should be given its ordinary
meaning if the terms used
therein were clear and
unambiguous.”
In this case, exhibit ‘D’ was
clear on what should happen at
the end of the term hereby
created. I therefore hold that
the leasehold agreement provided
for the relationship that must
exist amongst the parties and
their heirs, successors, and
personal representatives after
the expiration of the term of 50
years, and that there is no need
to incorporate any reviews into
any one document, as there is no
implied covenant to be reviewed.
The parties have agreed that the
ground rent, contained in
exhibit ‘D’ had been reviewed,
as they say was contemplated by
exhibit ‘D’. The review of the
ground rent is contained in
exhibit ‘D’. Upon proper
scrutiny of exhibit ‘D’, it may
be found that no such term for
periodic review of the ground
rent was contained. What was
contained in exhibit ‘D’ is as
follows:
a)
To hold the demised premises for
a period of fifty (50) years
paying unto the lessor the sum
of three thousand cedis
(¢3,000.00) that is to say
twenty-five (25) percent of the
assessed annual economic rent of
twelve thousand Cedis
(¢12,000.00) for the first three
(3) years, and thereafter thirty
percent (30%) payable five years
in advance, the first of such
payments being made on or before
the execution of this lease
hereof”.
What the parties to exhibit ‘D’
meant was that they had assessed
the annual economic rent to be
Twelve Thousand Cedis
(¢12,000.00) and that a
percentage of this is to be
paid. 30% of Twelve Thousand
Cedis comes to three Thousand
Six Hundred Cedis (¢3,600.00).
It meant after the first 3
years, the plaintiff is to pay
Eighteen Thousand Cedis for
every five years. The fact that
the Plaintiff had paid the
assessed rent does not mean they
should continue to pay.
The defendant says because the
plaintiff agreed to it, that sum
should be paid. The plaintiff
says he agreed to pay because
they also believed that the
defendant must also agree to
change the reversionary clause.
Since both parties agree that
the defendant did not agree to
the suggested change in the
reversionary clause and there is
no signed lease that includes a
change in the reversionally
clause, the mere fact that the
Plaintiff had been paying the
revised rent, under a mistaken
believe that exhibit ‘D’ called
for a periodic review of the
ground rent, will not turn it
into a contract, since there is
no consideration to support. If
the proposed lease had been
signed, that would have been the
basis for its enforcement. In
that case the case of Central
London Property Trust Ltd vrs.
High Trees House Ltd 1947 K B
130 could have been relied on.
Since there was no agreement,
equity cannot enforce the
continual payment of the revised
ground rent, and use same as a
basis to change a clause that
has not been agreed upon by a
party.
The periodic reviews in rent
payments will not therefore
amount to variation of the
original lease since it was
reviewed under a mistaken
believe that it ought to be
reviewed. At any rate the
defendant does not agree that
the reversionary clause should
be reviewed.
The current parties to exhibit
‘D’ were of the view that the
¢12,000.00 economic rent is too
low, but that is what the
original parties agreed on. In
the case of DACOSTA & ORS. VRS.
OFORI TRANSPORT LTD (2007-08)
SCGLR 602, The Supreme Court
held in its 3rd
holding that contrary to the
contention by the
plaintiffs-appellants that the
court of Appeal was in error in
not reviewing the annual rent
reserved in the lease of the
disputed property, which was
executed in 1947, the Court of
Appeal had correctly stated that
where rent had been
contractually fixed in a lease,
the courts would not review it
during the continuance of the
lease.
In this case since the original
parties to exhibit ‘D’ agreed on
the rent payable, the current
parties are bound by that. If
the plaintiff had made payments
over and above that stipulated
in exhibit ‘D’ as assessed
above, than the excess payment
should be refunded, or be
treated as advance rent payment
for the unexpired term of the
lease at the option of the
plaintiff.
I therefore hold that there is
no need to execute a new lease,
since under the existing lease,
exhibit ‘D’ it was not
contemplated by the parties that
the ground rent payable should
be reviewed periodically, as
exhibit ‘D’ also made provision
for the relationship that must
exist amongst the parties after
the expiration of the term of 50
years. I therefore dismiss the
Plaintiff’s action.
On the Defendant’s
counter-claim, I hold that since
the lease exhibit ‘D’ had not
expired, the parties to this
suit are bound by it and must
therefore respect it. Claim ‘C’
is however dismissed as I have
held that the Plaintiff had
overpaid the payable ground rent
and the excess must be refunded.
If not refunded, it should be
treated as advance payment of
ground rent.
The Defendant is awarded cost of
GH¢2,000.00.
(SGD)MR. JUSTICE
S.H. OCRAN
Justice
of the High Court
Counsel: Mr. K. Asiamah
Sampong for plaintiff.
Mr. Paul
Opoku with Nana Tabia Amoakohene
for Defendant
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