Moncure v. Cahusac (as Executor of the Estate of Doris Cahusac-Delisser) (Jamaica ) [2006] UKPC 54

Judicial Committee of the Privy Council

Case No Privy Council Appeal No 54 of 2005

Venue FROM THE COURT OF APPEAL OF JAMAICA - - - - - - - - - - - - - - - - -

Between

MoncureAppellant

Cahusac (as Executor of the Estate of Doris Cahusac-Delisser) (Jamaica )Respondent

Before

Lord Hope of Craighead

Lord Scott of Foscote

Lord Carswell

Lord Brown of Eaton-under-Heywood

Lord Mance

Date 22 November 2006

[1]:- Lord Hope of Craighead Lord Scott of Foscote Lord Carswell Lord Brown of Eaton-under-Heywood Lord Mance - - - - - - - - - - - - - - - - [Delivered by Lord Scott of Foscote ] Introduction This litigation is about Mullion Cove in Bluefields on the south west coast of Jamaica. The property consists of a substantial house and just under two acres of land. Mullion Cove was purchased in the 1950s by Mrs Doris DeLisser's first husband, Harold Cahusac, and was their family home until he died in 1976. She inherited Mullion Cove from him and, for a while, lived in part of the house and rented out the rest as a guest house. However that came to an end when she married Mr Horace DeLisser and went to live with him in Washington DC.

[2]In June 1982, after her marriage to Mr DeLisser, Mrs DeLisser leased Mullion Cove to Mr Moncure, the appellant before the Board. The lease was for a 5 year term, from 1 June 1982 to 31 May 1987, at a yearly rent of $4,800 in Jamaican currency payable monthly and contained, in clause 4(b), a provision enabling the lessee to obtain nine successive five year renewals of the lease. It is common ground that Mr Moncure duly exercised his option to renew on the first occasion when it became exercisable and thereby obtained a further five year term from 1 June 1987 to 31 May 1992. There is an issue, however, as to whether he duly exercised his option to renew for the next five year term from 1 June 1992 to 31 May 1997. What is not in issue is that Mr Moncure remained in possession of Mullion Cove tendering to Mrs DeLisser the increased amount of rent that would have been payable if he had duly exercised the option and had obtained the further five year term. Nor is it in issue that Mrs DeLisser retained the tendered rent. It is not in issue that in 1997 and again in 2002 Mr Moncure purported to exercise his option to obtain further five year terms and has continued, and continues, to tender rent at the rate that would have been payable had the renewals been effective. He has incorporated Mullion Cove into a holiday resort complex with four other neighbouring properties that he owns.

[3]On 4 April 1996 Mrs DeLisser served a Notice to Quit on Mr Moncure. The Notice called on him to deliver up possession of Mullion Cove on 1 May 1996 "or at the end of the next complete month of your tenancy which will expire after the end of one (1) calendar month from the service on you of this Notice to Quit". The premise of this Notice to Quit was that Mr Moncure had failed to exercise his right under Clause 4(b) of the lease to take a further five year term from 1 June 1992 to 31 May 1997. On that premise the lease had come to an end on 31 May 1992. But Mr Moncure had remained in possession and continued to pay rent over the period from 1 June 1992 to the date when the Notice to Quit was served and the payments had been retained by Mrs DeLisser. The reference in the Notice to Quit to "the next complete month of your tenancy" must have been a reference to the monthly tenancy that, from Mrs DeLisser's point of view, had been evidenced by his payment and her acceptance of monthly rent after 31 May 1992. Proceedings

[4]On 26 June 1996 Mrs DeLisser commenced possession proceedings in the Supreme Court of Jamaica. However she died on 16 August 1997 and one of her sons, Mr Basil Cahusac, her co-executor with his sister Mrs Thompson, became the claimant in her place. The pleadings on both sides appear to have been drafted on the assumption that Mullion Cove was subject to Jamaica's Rent Restriction Act (cap 341) which, among other things, places restrictions on the right of a lessor to recover possession from the lessee of leased property subject to the Act. Section 25 of the Act requires the landlord to establish at least one of a number of alternative grounds on which a possession order can be made and also requires the court to be satisfied that "less hardship would be caused by granting the order [of possession] than by refusing to grant it". So the Statement of Claim, as amended, pleaded Mrs DeLisser's title, pleaded some alleged breaches by Mr Moncure of his lessee's covenant not to make or permit any additions to the buildings on Mullion Cove without the lessor's consent, pleaded Mr Moncure's failure to renew the term after 31 May 1992 and pleaded section 25 grounds for the recovery of possession.

[5]The defence, as amended, denied the alleged breaches of covenant but pleaded, alternatively, that the breaches had been waived, asserted that notice to renew the term from 1 June 1992 to 31 May 1997 had been given and specified four documents by which that had been done but pleaded, in the alternative, that Mrs DeLisser was estopped from denying that the term had been renewed. The four documents specified in the Defence as constituting notices of renewal of the term were(i) a letter from Mr Moncure to Mrs DeLisser dated 21 November 1987

(ii) a letter from Mr Moncure to Mr Basil Cahusac dated 5 May 1988

(iii) a letter from Mr Moncure to Mrs DeLisser dated 29 May 1991 and

(iv) a memorandum dated 1 December 1991 delivered by Mr Moncure to Mrs DeLisser's bankers in Washington.

[6]The alleged breaches of covenant are no longer in issue. Giving judgment on 13 June 2001, the trial judge, McCalla J, concluded that the work and alterations relied on were not in breach of the relevant covenant and held that if there had been any such breaches they had been waived. The Court of Appeal agreed on both points and these conclusions have not been challenged before their Lordships.

[7]On the renewal issue, McCalla J found, in favour of Mr Moncure, that he had effectively served a renewal notice, namely, the 1 December 1991 document, on Mrs DeLisser and had thereby obtained the further term from 1 June 1991 to 31 May 1997. McCalla J did not, therefore, need to address the estoppel issue and did not do so. She did, however, address the Rent Restriction Act points although these too, on the footing that Mr Moncure had remained a contractual tenant for an unexpired term of years, did not arise. She held that the statutory requirements for recovery of possession were not satisfied. So the possession action failed.

[8]On appeal Mr Basil Cahusac challenged McCalla J's conclusion that the 1 December 1991 document had been received by Mrs DeLisser and constituted a valid renewal notice. Giving judgment on 1 February 2005, the Court of Appeal (Downer, Panton JJA and Clarke JA (Ag)) disagreed with the judge's conclusion on two grounds. First, they held that clause 4(g) of the lease prescribed an exclusive means of service of notices by lessee on lessor, or vice versa. Second, they held there had been insufficient evidence to justify the conclusion that the 1 December 1991 document had reached Mrs DeLisser.

[9]The Court of Appeal's conclusion on the renewal point made both Mr Moncure's estoppel point and, if that point were not accepted, the Rent Restriction Act points relevant. Unfortunately the Court of Appeal did not go on to consider the estoppel point. Miss Carol Davis, counsel for Mr Cahusac before the Board, told your Lordships that the estoppel point had not been argued before the Court of Appeal and submitted that, in consequence, Mr Moncure should not be permitted to resurrect the point before the Board. Their Lordships will return to this issue in due course. As to the Rent Restriction Act points, Downer JA, indicated his disagreement with McCalla J's conclusion that the statutory requirements for a possession order had not been satisfied but thought further information about the property needed to be sought and that the case should be remitted to the Supreme Court for that purpose. Panton JA expressed his agreement but Clarke JA gave a judgment dissenting on the Rent Restriction Act points, agreeing with McCalla J that the statutory requirements for the making of an order for possession had not been met. He, Clarke JA, would therefore have dismissed the appeal on that ground. Issues

[10]In order for Mrs DeLisser, and now Mr Cahusac as her executor, to be entitled to an order for possession of Mullion Cove, there were, and are, three hurdles to be overcome.(1) First, the claimant for the order must succeed on the issue as to whether Mr Moncure effectively exercised his right under the lease to have a new five year term from 1 June 1992 to 31 May 1997. If he did, he was, at the time the Notice to Quit was served, a lessee holding a term not due to expire until 31 May 1997 and with a right to renew the lease thereafter. On that footing the Notice to Quit would have been devoid of any legal effect and this action must fail.

(2) Second, assuming Mr Moncure is entitled to argue the point, the claimant must succeed on the issue whether, post 1 June 1992, the payment of rent by Mr Moncure and acceptance (or retention) of the payments by Mrs DeLisser had the result that, whether or not Mr Moncure effectively exercised his right to have a new term from 1 June 1992 to 31 May 1997, Mrs DeLisser became estopped from denying that he had done so.

(3) And, thirdly, the claimant must deal satisfactorily with the difficulties in the obtaining of a possession order presented by the Rent Restriction Act. The Renewal Issue

[11]It is convenient to set out in full the renewal clause, clause 4(b) of the lease. "If the Lessee shall be desirous of leasing the Leased Premises for a further term of five years from the expiration of the term hereby granted and shall not less than three months prior to the expiration of the term give to the Lessor notice in writing of such desire and if the Lessee shall have paid the rent hereby reserved and shall have performed and observed the several covenants and stipulations herein contained and on the Lessee's part to be performed and observed up to the expiration of the term then the Lessor will let and the Lessee will take the Leased Premises for a further term of Five years commencing from the day immediately following the expiration of the term hereby granted at the clear yearly rental calculated in accordance with the provisions of the Second Schedule hereto payable by equal monthly payments but otherwise on the same terms and conditions in all respects as are contained in this Lease including this Clause for renewal PROVIDED that this Option to renew cannot be exercised on more than nine occasions and, if so renewed, on the ninth such renewal the terms and conditions of the Lease shall not include this Clause for renewal …" The provisions of the Second Schedule to the Lease said that "The rent for each said further term shall be a yearly rent equal to the sum of(a) a rent of J$4,800, and

(b) an additional rent bearing the same proportion to the said rent of J$4,800 per annum as shall be borne by any increase in the Index of Retail Prices for Washington DC in the United States of America for the month of December immediately preceding the commencement of each such further term to the figure shown therein for the month of December 1981."

[12]The 1 December 1991 document that was held by McCalla J to have constituted the effective renewal notice, was in the following form. " 1 December 1991 To: Mrs Doris Cahusac DeLisser c/o The Manager – Please forward From: C. Braxton Moncure Re: Renewal of the Lease of 'Mullion Cove' As we were unable to meet with your son Basil this past summer, this serves as notice that we are hereby renewing the lease on the property known as 'Mullion Cove' from 1 June 1992 until 1 June 1997. Enclosed is check #1117, which finalizes arrangements pertaining to this existing lease before our new five-year period begins." The contents, as above, were followed by Mr Moncure's signature and the date, 1 December 1991, added by him in manuscript.

[13]The words "c/o The Manager – Please forward" need explanation. Mrs DeLisser's Washington Bank was the National Capital Bank of Washington. The Manager at the time the 1 December 1991 document was prepared was a Ms. Catherine Graham. Mr Moncure was accustomed to sending payments of rent due under the lease direct to this bank for payment into Mrs DeLisser's account. It is common ground that the 1 December 1991 document was delivered by Mr Moncure, together with the cheque referred to, to the bank (see para.7 of the Agreed Statement of Facts and Issues). But there is no evidence as to what happened to the renewal notice thereafter. Neither Mrs Graham nor any official of the bank was called to give evidence. Mrs DeLisser had died before the trial so could not give evidence. Mrs Thompson, Mrs DeLisser's daughter, gave evidence that the renewal notice was nowhere to be found among her mother's papers. And no acknowledgement of its receipt was ever sent to Mr Moncure. So there was an issue of fact as to whether this renewal notice had been received by Mrs DeLisser.

[14]On 4 June 1992 Mr Edward Ashenheim, attorney in Jamaica for Mr Moncure, wrote to Mrs DeLisser referring to "the renewals of the lease of Mullion Cove … effected by letters dated May 29, 1991, and December 1, 1991" and purporting to "confirm that for the renewed period from 1st day of June 1992 to 31st day of May 1997 the yearly rental will be such amount calculated in accordance with the provisions of the Second Schedule to the lease …". The letter of 29 May 1991 did not constitute a renewal notice. It was a letter from Mr Moncure to Mrs DeLisser and, in relation to the renewal, simply said that :

"If Edward Ashenheim thinks it best, when Basil comes to Bluefields I will then serve legal notice of my intention to renew the lease for the next five year period. As you know this is my right under the remaining forty years of the lease agreement."

[15]A letter in response dated 17 September 1992 to Mr Moncure from Ms Sonia Jones, Mrs DeLisser's then attorney in Jamaica, referred to the letter of 4 June 1992 as constituting Mr Moncure's purported renewal notice and, not surprisingly, rejected its efficacy. No mention was made of the 1 December 1991 document but the clear assertion in the letter that the lease had expired on 30 May 1992 and had not been renewed infers a denial of receipt by Mrs DeLisser of that document.

[16]The main point, therefore, on the renewal issue is whether the 1 December 1991 document was received by Mrs DeLisser. There are, however, two subsidiary points that it is convenient to clear out of the way before addressing the main point. The first of these is whether Ms Graham, the manager of the National Capital Bank of Washington to whom Mr Moncure had delivered the 1 December 1991 document, can be treated as Mrs DeLisser's agent with authority to receive the document on her behalf. It appears to have been argued, somewhat faintly perhaps, in the courts below that she could. Their Lordships are clear that there is nothing in this point. The bank's (or bank manager's) authority to receive the rental payments on behalf of Mrs DeLisser and to credit them to her account cannot, without more, justify treating the bank manager as authorised to receive on her behalf other communications from the lessee about the lease. To endow the bank manager with authority to do so would have required evidence either of instructions from Mrs DeLisser or of a course of dealing between her and the bank from which an appropriate inference of that authority could be drawn. There was no such evidence.

[17]The second subsidiary point is based upon clause 4(g) of the lease. Clause 4(g) says that "Any notice of other communication hereunder shall be sufficiently made given and served upon the Lessor and the Lessee if delivered or sent by registered post addressed to the Lessor at or at such other address of which she may from time to time notify the Lessee in writing for this purpose or addressed to the Lessee at or at such other address of which he may from time to time notify the Lessor in writing for this purpose and every such notice or communication if posted prepaid as aforesaid shall be deemed to have been given and served on the third day following the posting thereof in any Post Office in the United States of America and if delivered shall be deemed to have been given and served immediately on such delivery." Unfortunately the sub-clause was never completed by the inclusion, either for the lessor or for the lessee, of the requisite address. Nonetheless it is argued on behalf of the respondent that clause 4(g) constituted the only method by which notices and other communications could be effectively given by one party to the lease to the other. That view of the sub-clause cannot be accepted. The purpose of the sub-clause, once the requisite addresses had been included, or notified in writing to the other party, was to provide a means by which notices etc. could be deemed to have been duly given and served by one party on the other even if they had never in fact come to the hand or attention of the other party. If some other means of service were adopted, eg. one party handing the document over to the other party during a meeting between them elsewhere than at the address of the latter, the party contending there had been due service would have to prove it. The advantage of the "deeming" provision would not apply. In the present case it was for Mr Moncure to satisfy the court that the 1 December 1991 renewal notice had reached Mrs DeLisser. Clause 4(g) was and is, in their Lordships' opinion, irrelevant.

[18]McCalla J, said this about the issue regarding service of the 1 December 1991 document "… Mr Morrison [counsel for Mr Moncure] pointed out that Mr Moncure was not challenged when he said he delivered this memorandum with a cheque to the bank where by that time he had for nearly ten (10) years, been accustomed to deliver Mrs DeLisser's rent cheques. He contended that there is no dispute that the cheque which the memorandum states to have been enclosed was received by Mrs DeLisser and credited to her account and that two subsequent letters which had been addressed to Mrs DeLisser and dispatched through the same route had come to her attention. …………………………… I accept that Mr Moncure did deliver the document dated 1s December 1991 to the Bank and that on a balance of probabilities it was received by Mrs DeLisser. I accept his evidence that he had previously communicated with her by that route." Their Lordships have some doubt about the accuracy of the judges' belief that Mr Moncure, previously to 1 December 1991, had communicated with Mrs DeLisser via the Washington bank manager (see Record p.140). Be that as it may, the line of reasoning that led the judge to her conclusion that, on a balance of probabilities, Mrs DeLisser had received the 1 December 1991 document is not disclosed.

[19]The Court of Appeal disagreed. Downer JA, with whose judgment Panton JA expressed agreement, evidently regarded Cause 4(g) of the lease as providing the only method by which valid notices could be served by one party to the lease on the other (at pages 12 and 34 in their respective judgments), and on this point Clarke JA(Ag) expressly concurred (see pages 39 and 40 of his judgment). As already indicated their Lordships do not agree. Clause 4(g) provides a means by which the parties can serve valid notices on one another without having to prove receipt of the notice but does not bar proof that a notice sent by other means was in fact received. But Clarke JA(Ag) noted also that there was no evidence as to what had happened to the 1 December 1991 notice after it had been delivered to the bank and declined to infer that it had been received by Mrs DeLisser (see pages 40–41).

[20]Before the Board Miss Caroline Hutton, counsel for Mr Moncure, submitted that the Court of Appeal ought not to have overturned McCalla J's conclusion on an issue of fact. She referred, in her printed Case, to Watt v Thomas

[1947] AC 484

, 486 where Viscount Simonds said that although an appellate court had jurisdiction to review the record of evidence in order to determine whether the trial judge's conclusion should stand, the jurisdiction should be exercised with caution. He went on, at p 486:

"If there is no evidence to support a particular conclusion (and this is really a question of law), the appellate court will not hesitate so to decide. But if the evidence as a whole can reasonably be regarded as justifying the conclusion arrived at at the trial and especially if that conclusion has been arrived at on conflicting testimony by a tribunal which saw and heard the witnesses, the appellate court will bear in mind that it has not enjoyed this opportunity and the view of the trial judge as to where credibility lies is entitled to great weight."

The guidance given by Viscount Simonds in this passage is, in their Lordships' opinion, of little assistance on the renewal notice issue. Only two witnesses gave evidence relevant to the question whether the 1 December 1991 document had reached Mrs DeLisser. Mr Moncure gave evidence that he had delivered the document to the Washington bank. This evidence was accepted by McCalla J and the Court of Appeal expressed no doubt about it. Mrs Thompson gave evidence that the document was nowhere to be found among Mrs DeLisser's papers. No one expressed any disbelief about that evidence. McCalla J's conclusion that on the balance of probabilities the document had been delivered to Mrs DeLisser could have been based on nothing more than an inference drawn from the fact that it had been delivered to the bank manager with a request for it to be forwarded to Mrs DeLisser. It is, of course, to be expected that the bank manager would have forwarded the document as requested. The inference drawn by the judge was a possible one that could have been drawn. But it had nothing at all to do with the credibility of any witness.

[21]In these circumstances the learned Justices in the Court of Appeal were, in their Lordships' opinion, entitled and bound to review the facts and consider whether the judge's inference that the document had been delivered to Mrs DeLisser was justified. They were entitled to take the view that the natural expectation that the bank manager would have done what she had been requested to do was too slender a plant to bear the weight of a conclusion that she had actually done so. Moreoever, the onus of proof on this issue lay on Mr Moncure. He had not taken the precaution of sending the document to Mrs DeLisser by registered post. He had chosen to rely on the bank manager doing what he had asked her to do. But neither the bank manager nor any junior official of the bank was called to give evidence of what had happened to this document after it had been received at the bank, nor even of the bank's general practice when faced with a request of this sort. In these circumstances the Court of Appeal justices were entitled to take a different view from that of the trial judge and Mr Moncure's appeal against the Court of Appeal's conclusion that there was insufficient evidence to justify the judge's finding that the 1 December 1991 document had been delivered to Mrs DeLisser must fail.

[22]Before leaving the renewal issue their Lordships wish to make clear that it must not be assumed that they are necessarily in agreement with McCalla J's conclusion, concurred in by the Court of Appeal, that the earlier letters relied on by Mr Moncure had been written too early in time to constitute valid renewal notices. This conclusion appears to have been based on two cases, Biondi v Kirklington & Piccadilly Estates Ltd [1947] 2 AER 59 and Multon v Cordell

[1986] 1 EGLR 44

. In both these cases the right to renew the lease was subject to the condition that at the time of the request for renewal there were no existing breach of covenant on the part of the lessee. In the present case the right to renew is expressed to be subject to a rather different condition, namely, that the lessee's covenants had been performed and observed up to the expiration of the current five year term. That being so it is not obvious why a valid notice of intention to have a further five year term commencing from the expiration of the current term could not be given at any time during the current term. But, since this point has not figured in the grounds of appeal and their Lordships have heard no argument on it, no more need be said about it. The Estoppel Issue

[23]Miss Davis submitted that because no argument on the estoppel issue was addressed to the Court of Appeal, Mr Moncure should not be permitted to raise the point before the Board. It is convenient to start by referring to the pleadings. The amended Defence included the following relevant passages "4. The Defendant further states that the Plaintiff acknowledged, accepted and consented to the renewal of the lease PARTICULARS(i) ……………..

(ii) from and after 1 June 1992 the Defendant said and the Plaintiff accepted an amount for monthly rental of the premises in accordance with the provisions of Clause (b) of the Second Schedule of the lease agreement and calculated on the assumption that the lease had been renewed for a further period of five years as from June 1, 1992. 5. By reason of the matters set forth in paragraph 4 above the Defendant to the knowledge of the Plaintiff accepted bookings for guests at Mullion Cove, incurred expenses for advertising the said premises in travel trade magazines and elsewhere and incurred expenses on the improvement and maintenance of the said premises and the Defendant says that by reason of the matters above mentioned the Plaintiff is estopped from denying receipt of the notices of renewal above mentioned and/or asserting any right to treat the said tenancy as terminated on 31st day of May 1992 or at all." These paragraphs were met by a denial in the Plaintiff's Reply.

[24]McCalla J having found in Mr Moncure's favour on the renewal notice issue without making any finding on the estoppel alternative and Mr Basil Cahusac having appealed, a respondent's notice dated 30 May 2002 was served on behalf of Mr Moncure. The notice said that McCalla J's decision should be affirmed on the additional ground that "The Learned Judge was entitled to conclude from the course of dealing between the parties during the four year period 1992-1996 when rent was paid and accepted and other outgoings such as taxes and insurance paid by [Mr Moncure] in accordance with the terms of the renewed lease, that Mrs DeLisser's conduct was explicable only on the footing that she had received the notice of 1st December 1991 and accepted that the lease had thereby been validly renewed." The word "estoppel" was not used but the terms of this respondent's notice make plain Mr Moncure's contention that by accepting the rent that would have been payable under the lease for the new term, 1 June 1992 to 31 May 1992, Mrs DeLisser was estopped from denying that Mr Moncure was holding Mullion Cove under the lease for that new five year term.

[25]The estoppel point was, therefore, fairly raised before McCalla J and was kept open by Mr Moncure for argument before the Court of Appeal. Their Lordships have been told that, nonetheless, no argument on the point was addressed to the Court of Appeal. That omission was unfortunate and has deprived the Board of knowing what the Court of Appeal would have made of the point. But as the point is one of law and depends on facts which are not in issue, there can, in their Lordships' opinion, be no injustice to Mr Basil Cahusac, or the other beneficiaries in Mrs DeLisser's estate, in allowing Mr Moncure to rely on the point before the Board.

[26]The facts relied on in support of the estoppel can be shortly summarised. Over the period from 1 June 1992, when the new five year term, if it had been obtained by an effective renewal notice would have commenced, until 4 April 1996, when Mrs DeLisser's Notice to Quit was served, Mr Moncure tendered to Mrs DeLisser monthly payments of rent calculated by reference to the formula contained in the Second Schedule to the lease. These monthly payments were of a greater amount than the monthly payments payable during the five year term which had terminated on 31 May 1992. These payments were accepted (or at least retained) by Mrs DeLisser. By doing so, Miss Hutton submits, Mrs DeLisser must be taken to be recognising Mr Moncure's status as tenant and, since the amount of the payments was plainly referable to a new five year term pursuant to Clause 4(b) of the lease, to be recognising, or representing that she recognised, Mr Moncure as holding under the lease for that new five year term.

[27]Miss Davis, for Mr Basil Cahusac, submitted that there was inadequate evidence that Mr Moncure had been paying rent at the increased rate required by the Second Schedule. Their Lordships disagree. The correspondence between the parties after 31 May 1992 is important. A letter dated 4 June 1992 to Mrs DeLisser from Mr Ashenheim, Mr Moncure's attorney in Jamaica, said this :

"… for the renewed period from 1st day of June 1992 to 31st day of May 1997 the yearly rental will be such amount calculated in accordance with the provisions of the Second Schedule to the lease dated 3rd day of March 1983. Such rent will be payable by equal monthly payments and save for such rental the renewed lease shall be on the same terms and conditions in all respects as are contained in the Lease including the clause for renewal."

The intention to pay the increased rent and the basis on which it was to be paid could not be more clear.

[28]A confirmatiory memorandum of the following day, 5 June 1992, from Mr Moncure to Mrs DeLisser is worth noting. It said this " This is to detail our new arrangements for the 11th through the 15th year of the lease of your property known as 'Mullion Cove.' The ratio of the new annual rent is to the original annual rent as 421.0 is to 275.5 (by utilizing as agreed the Washington cost-of-living consumer price index). This yields a new annual rent to you of $7335.02. This Jamaican dollar sum was deposited into your Jamaican account earlier this week. This has been done notwithstanding our previous practice of paying it monthly. Secondly, we have deposited the full US $611.25 that is the new monthly U.S. payment ($7335.02 per year divided by twelve months) into your D.C. bank, unadjusted by the value of this Jamaican dollar deposit. We have done this anticipating that an adjustment will need to be made: 1) When we do our books for January to May of this year, we will make up the difference to you due to any decrease in value of the Jamaican dollar from 1 December 1991 when these figures were calculated. You will remember that on 1 December 1991 we remitted to you an additional $317.46 with our check #1117, which brought the total value of the remittance by us to the correct level as measured in U.S. dollars. Now that we have embarked on this new lease period, please consider this as legal notice that we intend to renew this lease when this present five year term ends in 1997".

[29]The letter dated 17 September 1992 from Ms Sonia Jones, to which reference has already been made, referred to the letter of 4 June but asserted that the lease had not been renewed and had terminated at the end of May 1992. And a follow-up letter of 28 September 1992 from Ms Jones to Mr Moncure said this:

"My clients' records show that for January, June and July 1992 sums totalling $1222-50 were deposited in a US account for rental. I enclose cheque in your favour for that sum. In addition sums totalling $7336-02 were transferred to a Jamaican account. A cheque for that sum is also enclosed. Kindly acknowledge receipt by signing and returning a copy of this letter."

The reference in this letter to January 1992, a month which belonged to the five year term which had expired on 31 May 1992, is odd.

[30]Ms Jones' two letters appear not to have been posted until 14 October 1992 and were responded to by Mr Ashenheim in a letter to her dated 2 November 1992. Mr Ashenheim's letter repeated the assertion that the lease had been validly renewed for five years from 1 June 1992 and continued as follows :

"Certainly the parties seem to have considered the lease effectively renewed. Your client accepted the rent paid and has delayed for a considerable period in making her recent assertion knowing that our client was acting in reliance on the fact that the lease was continuing in force and that he was operating and accepting future bookings on the basis of your client's acquiescence therein. At the very least your client is clearly estopped from denying at this late stage that the lease remains in force for the current five year period. We accordingly return herewith the two cheques dated 8th October 1992 for US$1222.50 and J$7,336-02 and our client has paid the November rental as usual to your client's bank and agent the National Capital Bank of Washington DC …… We would finally point out for the record that in addition to the June and July rentals referred to [in] your letter dated 28 September 1992 our client had also paid the rental as it fell due for August, September and October."

The returned cheques were retained by Mrs DeLisser and Mr Moncure continued to make monthly payments at the rate applicable under the lease to the five year term from 1 June 1992 to 31 May 1997. These payments indeed continued after the service of the Notice to Quit on 4 April 1996.

[31]By a letter of 23 December 1996 but expressed to be "as at 1 January 1997" Mr Moncure gave notice of renewal of the lease from 1 June 1997 to 31 May 2002 and enclosed with the letter a cheque "which finalizes arrangements pertaining to this existing lease through 31 January 1997." This prompted a response dated 17 February 1997 from Miss Davis who had taken up cudgels on Mrs DeLisser's behalf. She asserted that the lease had terminated at the end of May 1992, referred to the Notice to Quit and said that "… there is no lease which you can be seeking to renew for 1st June 1997 to 1st June 2002. She continued: "While you have remained in possession of the said premises, and would of course be required to pay for your use and occupation of same, monies paid by you with regard to said use and occupation do not relate to any 'existing lease through January 1997'".

[32]This pattern of correspondence was repeated a few months later. By a letter of 5 June 1997 Mr Moncure gave details of the rent to be paid, according to the formula in the Second Schedule to the lease, for the new five year term from 1 June 1997 to 31 May 2002. He calculated the annual rent to be $8,291-54, or $690 a month and said that the $690 for June had been deposited in Mrs DeLisser's account. He also gave notice of his intention to renew for a further five year term from 1 June 2002. This letter drew a response dated 11 July 1997 from Miss Davis in which she repeated the effect of what she had said in her letter of 17 February 1997. She said "We do not dispute the rental sums being paid by you, since same can be seen as reasonable measure for your continued use and occupation of the premises until you finally depart."

[33]It is well established law that a tenant for a term of years who holds over after the expiry of the term and continues to pay to the landlord the monthly rent that had been payable during the term becomes, if the landlord accepts the payments, a tenant from month to month on the terms of the lease in so far as they are applicable to a periodic tenancy. Whether this result is attributable to an estoppel by respresentation, whereby the landlord's acceptance of the rent tendered by the tenant is taken to be a representation by the landlord that he has accepted the tenant as a monthly tenant and the landlord is estoppel from denying that that is so, or is attributable to a contract by conduct, with the landlord's acceptance of the rent, objectively viewed, being taken to be an acceptance of the offer impliedly made by tenant in tendering the rent, is immaterial. Both depend upon an objective assessment of the conduct of the landlord.

[34]How then should Mrs DeLisser's acceptance of the rent tendered by Mr Moncure over the period 1 June 1992 to 4 April 1996 be viewed? The Notice to Quit served on 4 April 1996 referred to "the next complete month of [Mr Moncure's] tenancy". This suggests acceptance by Mrs DeLisser that Mr Moncure, post 31 May 1992, had become a monthly tenant by reason of his payments of monthly rent. But it was clear that Mr Moncure was making the payments on the footing that the payments were required by the lease to be paid as rent for the new five year term from 1 June 1992. Mrs DeLisser at first denied that the lease had been renewed, asserted that it had terminated on 31 May 1992 (see the letter of 17 September 1992) and tried to repay the payments (see the letter of 28 September 1992). But after those repayments had been rejected and the cheques had been returned to her (see the letter of 2 November 1992) she accepted the monthly rental payments up to and after the service of the Notice to Quit. It was not until Miss Davis' letters of 17 February and 11 July 1997 that it was said that Mr Moncure's rental payments were being retained as payment for "use and occupation".

[35]In their Lordships' opinion it was not open to Mrs DeLisser, who must have known that Mr Moncure's payments were being made as rent calculated in accordance with the 2nd Schedule and due under the lease for the new term of five years from 1 June 1992, to retain the payments and subsequently, nearly five years after the payments had commenced to contend they had been retained on a different footing from that on which they had been paid. The retention by Mrs DeLisser of the payments made prior to the service of the Notice to Quit constituted a representation that Mr Moncure's status as lessee under the lease for that five year term was accepted. Her conduct in retaining the payments constituted, objectively viewed, an acceptance that Mr Moncure had renewed the lease for that term.

[36]Miss Davis submitted that, since the Rent Restriction Act applied to the lease of Mullion Cove, Mr Moncure did not, on the expiry of the previous five year term on 31 May 1992, become a trespasser, his tenancy had continued by virtue of the Act and in accepting his monthly payments Mrs DeLisser was doing no more than was required by the Act. Miss Davis'premise that, if the lease had not been renewed from 1 June 1992 for a further five year term, Mr Moncure would nonetheless have been entitled under the Act to remain in possession can be accepted (see section 3 of the Act which appears to apply the Act to the Mullion Cove lease). But in that case section 28(1) of the Act would have applied.

[37]Section 28(1) requires a tenant, who retains possession of premises subject to the Act after his tenancy has expired, to observe the terms and conditions of the tenancy so far as the same are consistent with the provisions of the Act. If no effective renewal notice had been served the expired tenancy, for section 28 purposes, would have been the tenancy for the five year term ending on 31 May 1992. The rent that section 28(1) would have required Mr Moncure to pay and Mrs DeLisser to accept would have been the rent payable during that five year term. But that was not the rent that Mr Moncure was tendering and that Mrs DeLisser was accepting. He was tendering and she was accepting a higher level of rent, calculated in accordance with the 2nd Schedule to the lease and payable for a five year term from 1 June 1992 to 31 May 1997. His payment and her acceptance of that rent was not attributable to section 28. His payment was clearly attributable to his belief that he was paying the due consensual rent for the new five year term. Her acceptance, objectively viewed, appeared to be a confirmation of his belief.

[38]Accordingly, their Lordships conclude that Mr Moncure's entitlement to the five year term from 1 June 1992 to 31 May 1997 is made good. No one has suggested, if that is so, that any objection can be taken to Mr Moncure's renewal of the lease for a further five year term from 1 June 1997 to 31 May 2002. It follows that the Notice to Quit served on 4 April 1996 was ineffective, the action for possession cannot succeed and this appeal must be allowed. The Rent Restriction Act issue

[39]The question whether, if the Notice to Quit had been effective, grounds for possession under the Act had been established does not now arise and their Lordships express no view as to whether the opinion of McCalla J in favour of Mr Moncure or the opinion of Clarke JA in favour of Mr Basil Cahusac is to be preferred. The need for the case to be remitted to the Supreme Court, too, falls away. Disposal

[40]Their Lordships accordingly will allow the appeal and set aside the order of 14 February 2005 of the Court of Appeal. The order for costs in favour of Mr Moncure made by McCalla J will stand. The parties may make written submissions within 14 days regarding the costs in the Court of Appeal and of the appeal to this Board.

[41]Their Lordships do not wish to leave this appeal without recording their great appreciation for the quality of the assistance they have had from both Miss Davis and Miss Hutton who, in their written and oral submissions, have made a complex appeal a pleasure to hear.