Dias v Reinforcing Steel Co. Ltd (Civil Appeal No. 382 of 1952) [1953] EACA 31 (1 January 1953)

APPELLATE CIVIL

Before WINDHAM, J.

REGINALD F. DIAS, Plaintiff

REINFORCING STEEL CO. LTD., Defendant

Civil Appeal No. 382 of 1952

Landlord and Tenant—Increase of Rent (Restriction) Ordinance 1949—Section 31 -Whether Supreme Court has concurrent jurisdiction with Coast Rent Control Board-Claim for arrears of rent-Whether damages by breach of contract, set-off or counter-claim competent—Alleged unreasonable withholding of landlord's consent to assignment of lease—Whether set-off or counterclaim for damages arising out of tort for loss of assignee competent.

The defendant company admitted the plaintiff's claim for arrears of rent and other charges but, in defence, sought to set-off or to counter-claim for damages arising out of alleged breach of contract for the loss of a subtenant to whom it had been desired to assign the lease, the said loss being alleged to be due to an unreasonable withholding by the landlord of consent. The defendant company, further, contended that the Supreme Court had no jurisdiction to hear the suit which should have been brought before the Coast Rent Control Board.

Held (13-7-53).—(1) By reason of section 31 of the Increase of Rent (Restriction) Ordinance,<br>1949, the Supreme Court had a concurrent jurisdiction with the Coast Rent Control Board to try the issue of damages.

(2) The words "which consent, however, shall not unreasonably be refused" contained at the end of the tenants' covenant of lease did not constitute any express or implied covenant on the landlord's part not to refuse to consent unreasonably; but merely qualified the tenant's covenant to the effect that, if the landlord unreasonably withheld or refused his consent, the obligation of the tenant not to assign or sublet came to an end and the tenant, at his risk of being held wrong by a court, was free to assign or sublet without such consent.

(3) The landlord, being under no obligation under the lease to give his consent to the proposed assignment, had committed no breach of contract in withholding it, even<br>if the withholding were unreasonable. For this reason the counterclaim for damages must fail.

(4) The claim for damages is tort, arising from alleged negligence on part of the landlord by unreasonable delay in giving his consent so that the prospective tenant was lost, did not amount to an actionable wrong, there being no such duty on part of the landlord a breach of which could constitute actionable negligence.

Cases cited: Treloar v. Bigge, (1874) L. R. 9 Ex. 151; Sear v. House Property and<br>Investment Society, (1880) 16 Ch. D. 387; Ideal Film Renting Company Ltd. v. Nielsen, (1921) 1 Ch. 575.

Cleasby for plaintiff.

Bryson for defendant company.

JUDGMENT.—The plaintiff/landlord sues the defendant/tenants for Sh. 5,413 being arrears of rent, rates and water charges. The defendants, subject to certain minor adjustments regarding the rates and water charges which counsel for the two parties would be ready to agree upon, do not dispute the claim for arrears, but in their statement of defence they seek to set-off, or in the alternative to counterclaim, for the whole of the amount claimed, on the ground that the plaintiff unreasonably withheld his consent to the assignment of the lease by the defendants to a desirable prospective tenant by name, M. J. Dossa. By reason of the plaintiff's

ν.

inaction in the matter, they aver, they lost M. Dossa as an assignee, nor could they find another, so that the premises have· remained unoccupied and accordingly, they have suffered damages to the extent of the rents and rates and water -charges claimed, which would have been either recovered by the defendants from, or paid to the plaintiff by, the assignee. An alternative defence is that this Court has no jurisdiction to try this suit, which should have been tried by the Coast Rent Control Board.

Jt is contended for the plaintiff that these defences are bad in law, and that on the pleadings as they stand, and even assuming all the allegations of fact in the Statement of Defence to be true, the pla.intiff's claim must succeed and the claim by way of set-of or counter-claim be dismissed. No evidence has accordingly been called (save for the production of the lease) and the question now to be decided is whether the grounds set up in defence, or any of them, are good in Jaw.

So far as the question of jurisdiction is concerned, the matter is governed by section 31 of the Increase of Rent (Restriction) Ordinance, 1949, as enacted in the amending Ordinance No. 34 of 1951. That section reads as follows:-

"31. (]) Where jurisdiction or power to deal with any matter is conferred by this Ordinance on the Board no proceedings ·shall be taken before the court.

(2) The court shall have jurisdiction to deal with any offence under this Ordinance, and subject to the provisions of sub-section (I) of this section, with any claim or other proceeding arising out of this Ordinance notwithstanding that by reason of the amount of the penalty, or the nature or amount of the claim or otherwise the case would not, but for this provision, be within the jurisdiction of the court.

(3) lf a person takes proceedings under this Ordinance in the Supreme Court-

- (a) the provisions of sections 16 and 17 of this Ordinance shall apply in relation to such proceedings as if the Supreme Court had been specifically mentioned therein; and - (b) if such proceedings could have been taken in the court or before the Board be shall, if successful, only be entitled to recover costs on the subordinate court scale."

"The court" in the above section means by definition a first class magistrate's court. Now sub-section (3) of section 31 certainly contemplates proceedings under the Ordinance being taken in the Supreme Court, and paragraph (b) of that sub-section contemplates the Supreme Court having a jurisdiction concurrent with that of the Board and of the magistrate's court. Jt is contended, however, that in paragraph (b) the expression "Board" does not mean the Central Rent Control Board or the Coast Rent Control Board, which would have jurisdiction under section 5 (I) (j) to try a case such as the present, but means only those other Boards the establishment of which is provided for under section 3. I can see no merit in this contention, nor anyi reason for not giving· the expression "Board" in section 31 (3) (b) its meaning as defined in section 2 (I) which would include the Central and Coast Boards. Subject to the reservation in paragraph (b) concerning the scale of costs, it is clear that in any matter which the Central or Coast Board is given jurisdiction to try under the Ordinance, the Supreme Court has a concurrent jurisdiction. This same point was decided by this Court in Nairobi in Civil Case No. 252/1951, though the distinction between the Central and Coast Boards on the one hand and the other Boards on the other hand was not there raised in argument.

Turning to the defence of set-off and the counter-claim, it is necessary to set out the terms of the sixth covenant of the lessee (defendant) under the written lease, exhibit 1. This is the only clause in the lease which concerns the question of assigning or sub-letting, and it reads as follows: -

"The tenant hereby convenants with the landlord . . . (SIXTII) THAT the tenant will not assign, sub-let or part with the possession of the said premises or any part thereof during the term hereby created except to an employee or employees of the tenant and his or their family or families without the previous consent in writing of the landlord, which consent, however, shall not unreasonably be refused".

It has been admitted by the learned counsel for the defendants during the course of the argument, and the point is well established on the authorities, that a covenant such as that set out above, being a covenant by the tenant only and containing no express covenant by .the landlord, imposes no obligation on the landlord not to withhold his consent to an assignment or sub-lease unreasonably, or not to delay unreasonably the giving of his consent to it. The legal position in such a case is that the words "which consent, however, shall not unreasonably be refused'" which appear at the end of the tenant's covenant in the present case, or words of similar import, do not constitute any express or implied covenant on the landlord's part not to refuse consent but merely qualify the tenant's covenant in the following manner, namely that if the landlord does unreasonably withhold or refuse his consent, then the obligation of the tenant not to assign or sub-let without that consent comes to an end, and the tenant is free to assign or sub-let without such consent. A tenant who so assigns or sub-lets without consent takes the risk, of course, of the court holding, in any resulting litigation with his landlord, that the latter's refusal of consent was not unreasonable.

That such is the legal position has been laid down in a number of cases, of which the following have been cited: -

*Treloar"· Bigge,* (1874) LR. Ex 151; *Sear v. House. Property and Investment Society,* (1880) 16 Ch. D. 387; *Ideal Film Renting Company v. Nielsen,* (1921) I Ch. 575.

]t is accordingly conceded for the defendants that their claim to a set-off or counter-claim by way of damages for breach of contract must fail even if all tho allegations of fact in the statement of defence were true since the plaintiff /landlord, being under no obligation under the lease to give his consent to the proposed assignment, has committed no breach of contract in withholding it, even granted that the withholding was unreasonable.

The only remaining line of defence raised in the statement of defence is alternative to the claim to a set-off or counter-claim for damages for breach of contract with which we have just dealt, and it is a set-off and counter-claim for damages for the same amount (that is to say the full amount of the plaintiff's claim) sounding not in breach of contract but in tort, the allegation being that the plaintiff by his unreasonable delay in giving his consent to the proposed assignment, was guilty of negligence resulting in the loss of Mr. Dossa as a prospective tenant and in the failure to find another, with the same pecuniary damages in respect of rent, rates and water charges as were claimed under the heading of breach of contract. The delay alleged was from 3rd April, when the landlord was requested to give his written consent, until 10th May, when he gave a conditiohal consent. Learned counsel for the defence has been unable to cite any authority for the proposition that such a delay could constitute actionable negligence giving rise to a claim in tort for resulting damages, or that a landlord,

upon receiving a request to give his consent, is under a legal duty of giving it within any particular time, or even within a "reasonable time". Before an action in tort lies for damages for negligence there must be some duty to take care, the breach of which constitutes the negligence. Although no exhaustive list can be given of the circumstances in which such a duty exists, since the ever-changing activities and standards of society give rise to new duties and to new conceptions of duty from time to time, I do not think the circumstances here propounded in the statement of defence are such as could properly be added to their number, or that a case has been made out for increasing, by Judge-made law, the well established categories of relationships wherein a duty of care has been held to lie upon one party towards another, the breach of which duty will support an action for damages for tortious negligence. In short I hold that the statement of defence. contains no allegations of fact such as could support a set-off or counter-claim by way of damages in tort.

There is therefore no good defence or set-off or counter-claim to the plaintiff's claim. The counter-claim is dismissed with costs on the subordinate court scale. Judgment will be entered in favour of the plaintiff, with costs on the subordinate court scale, in the sum of Sh. 6.226/17 with legal interest thereon from the date of the plaint until full payment, that being the sum agreed between counsel of both parties as the sum payable to the plaintiff in the event of this Court deciding (as it has now decided) that the set-off and counter-claim must he dismissed.