C.A.

1901. NASH

2'.

PREECE.

from the benefit of the statute. If the Court has jurisdiction it ought not to be exercised. The breaches were not through accident or mistake, without fraud or gross negligence. Except the first payment, no single one was made punctually. One payment was made after the twenty-one days, and there is no explanation whatever of the delay. As to the other payments, it is said that it was supposed that there were twentyone days of grace; but that is insufficient. It is said there was verbal assent to the subletting. But as to the renewal of Cottle's tenancy there is uncontradicted evidence that it was never mentioned to Nash. He never knew anything about it. No explanation has been furnished.

M. Chapman, for the respondent

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This section has not hitherto been given a strict technical construction, but the words have been read in their large and popular sense: Hammond v. Mangham(1); The Public Trustee v. Paterson(2); Lawson v. Douglas(3). In the strictest sense a "purchaser" is one who has actually completed his purchase, but in a popular sense a man is a purchaser who is about to purchase. "Right to purchase "must mean right to become a purchaser." But a person who has entered into a binding agreement for sale and purchase has also a "right to pur"chase." He has a right to complete on compliance with certain conditions. Here the right was an option. On breach of the covenants it was lost. That is a forfeiture within the meaning of the section.

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[WILLIAMS, J.-Do you say you can come and ask to be put back in the same position although you are not prepared at the time to exercise the option ?]

Yes; but it is not necessary to go that length.

[DENNISTON, J.-Do you say that if you allowed the time for exercising the option to pass you could come for relief?] It might be impossible to contend that. But there is a radical distinction between forfeiture and lapse. Here, the right is lost by breaches of the covenants of the instrument which gives the right. That is a forfeiture. The object of

the clause was to introduce a new jurisdiction. It is said that there is an incongruity in speaking of a person with a mere option to purchase as a purchaser in possession; but there is an equal incongruity in speaking of a person who has purchased as having only a right to purchase. The section was intended to apply to both cases. In the English cases the option is always one of renewal, and the Courts have always required that the tenant should have performed his covenants. It would be absurd to force on a landlord for another term a tenant who has committed breaches of his covenants. There is a great difference in the case of a purchaser. He is not to have continued relations with his vendor : he is to complete his purchase and become owner. The observations in Bastin v. Bidwell(1) have therefore no application. The three cases referred to in the judgment appealed from-Hayward v. Angell(2), Cary v. Bertie(3), and Popham v. Bampfeild(4)-show that a Court of equity can give relief although a condition precedent has not been performed. The breaches relied on have either been sufficiently explained or are trivial. The Court will not notice trivial breaches: Walker v. Jeffreys(5); Fry on Specific Performance(6). The appellant herself has treated all the breaches as trivial. Although waiver of a right of entry may not amount to waiver of performance of a condition precedent to a renewal, it may be relied upon as evidence of consent to what was done. There was no renewal to Cottle: there was merely a letter, which is entirely executory. At most there was an equitable subletting. A legal assignment alone is a breach: Woodfall on Landlord and Tenant(7). There must be an effectual sublease operating at law: Gentle v. Faulkner(8); Foa on Landlord and Tenant (9). Nor was there here a parting with the possession, as Cottle was already in possession: Corporation of Bristol v. Westcott (10). Covenants restraining alienation are construed with jealousy Church v. Brown(11).

Skerrett, in reply:

The Court is not concerned, on this application, with the question whether the breaches were trivial or not. The sole question is whether they were by accident or mistake. Finch v. Underwood(1) the breaches were referred to as trivial.

[DENNISTON, J.-That was not under the statute.]

In

Assign or sublet" is expanded by the Land Transfer Act. [EDWARDS, J.-But you have not got the statutory covenant: you have made a covenant of your own.]

Here there was a legal subletting, because Cottle was tenant, at law, on the terms of the old arrangement.

WILLIAMS, J.:

་་

Cur. adv. vult.

The question turns on the interpretation of section 25 of The Supreme Court Act, 1882." That section is as follows: "The Court may on motion relieve against a forfeiture of any lease or of any right to purchase (where the purchaser is in 'possession) for the breach of any covenant, condition, or agreement, if the Court is of opinion that such breach has been committed through accident or mistake, without fraud or gross negligence, and that no injury has happened to the landlord or vendor other than can be compensated in damages, and may in granting such relief order the person **relieved to pay such damages and costs as to the Court may

seem meet." It would be, in my opinion, wrong to attempt to interpret the section in the abstract, and apart from the conveyancing practice which at the time the Act was passed, and for many years previously, prevailed in New Zealand. The section must be taken to have been passed with reference to an existing state of things, and if the words of the section will possibly bear it they should be construed so as to protect parties to classes of transactions that were commonly entered into in the colony. My experience extends back all but forty years. What struck me on my first arrival in the colony was that when land was let on lease the lease nearly always contained a clause somewhat similar to the clause in

66

the present case, giving the lessee the right to purchase the
freehold. Such a lease would be called indifferently "a
"lease with a purchasing clause,'
purchasing clause," "a lease with a right of
"purchase," or "a lease with a right to purchase." In
the early sixties in Canterbury a lease without the right to
purchase the freehold was not often met with. Although
leases without a right of purchase have since become much
more common, yet the lease with a purchasing clause has
always remained a favourite mode of alienation, and was in
common use when the Act of 1882 was passed. I think the
words right to purchase" in the section refer primarily to
"a right to purchase" given in the way in which a right
to purchase was ordinarily given - viz., by a clause in a
lease. No doubt it was also a common practice, especially
where an owner of land laid out a township and subdivided
it into sections for the purposes of sale, for the vendor to sell
under an agreement with the purchaser providing for pay-
ment of the purchase-money by instalments extending over
a series of years, with the condition that non-payment of the
instalments should involve a forfeiture. The purchaser in that
case also has a right to purchase, although he is under an
obligation to purchase. I see no reason whatever why relief
should not be granted under the section to such a purchaser.
If a man has a right to purchase, the fact that he is also under
an obligation to purchase does not take away his right. The
section refers only to the existence of a right to purchase, and
does not make the existence of an obligation to purchase a
condition of obtaining relief. It does not preclude a person
under an obligation to purchase from obtaining relief. The
question here is, whether the respondent has brought herself
within the conditions of the section. In order to do so she
must show, first, that she has a right to purchase; secondly,
that she is in possession of the property to be purchased;
thirdly, that she has forfeited her right by breach of a con-
dition; and, lastly, that such breach has been committed
through accident or mistake, without fraud or gross negligence,
and that no injury has happened to the vendor other than can
be compensated in damages. In the ordinary and colloquial

CA.

1901.

NASH

v.

PREECE.

C.A.

1901.

NASH

V.

PREECE.

sense she has a right to purchase; but it is contended that in a legal sense she has no such right, and that the right does not come into existence until the conditions precedent have been performed. It is argued, further, that, as the conditions precedent to the right had not been performed, no right to purchase ever existed, and, as it never existed, it could not be forfeited, and therefore that the provisions of the section could not apply; but I think that a right which is only to become absolute on the performance of a condition precedent is nevertheless a right in legal language also, and that such a right can properly be said to be forfeited if the condition precedent is not performed. That, at any rate, was the view of Lord Thurlow in Taylor v. Popham(1). In that case a testator bequeathed an annuity to his son on condition that the son should within three months execute a release of all demands on the testator's estates, there having been accounts between them during the testator's lifetime. The son did not execute a release within the time, but filed a bill for an account. Lord Thurlow treats the condition as a condition precedent to the right of the son to the annuity. He says, "The next question is, whether the "bill so filed has forfeited the £600 per annum; and that leads "to a common rule of the Court as to conditions precedent. 'If the Court can put the parties in the same situation as if "the condition had been performed, it will never suffer a forfeiture to attach." The section allows relief for the breach of a condition generally. It does not say, for breach of a condition subsequent only, and there is no reason on principle why it should not apply to a condition precedent, if only compensation can be made to the vendor. In my opinion the word "purchaser" in the section means the person who has the right to purchase, and that if, in fact, he is in possession the section applies. Here the respondent was in possession under the instrument of lease which gave her the right to purchase. That the respondent here committed the breach through accident or mistake I think we are all agreed. The Supreme Court has uniformly held that this section was intended for the relief of the tenant, and should be construed liberally in his favour.

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(1) 1 Bro. C.C. 168.