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Colonial Cases

Provand and Daly v. Oxford and Co., 1866

[specific performance - reception of English law]

Provand and Daly v. Oxford and Company

Supreme Court for China and Japan
27 March 1866
Source: The North-China Herald, 7 April 1866

 

H.B.M. SUPREME COURT.

Shanghai, March 27th 1866.

Before Sir EDMUND HORNBY.

PROVAND & DALY v. OXFORD &  Co.

Judgment.

This is a suit to enforce specific performance of an agreement which is in the following terms.

Sketch of the agreement between Messrs. Provand and Daly and Messrs. Oxford & Co.

The latter take from the former the unexpired term of the lease they hold for the whole ground and four houses therein erected and to be erected, part of which was occupied by the late Miller's hotel.  They paid for the same an annual rent of £4,000 (four thousand Pounds) but as it will take some time to build all the houses, they take possession of the house now building in the centre and the one now used as Billiard Room as soon as the former is finished, paying an annual rent of L, 1,000 from that day.  The rent is increased to £2,800 as soon as the large house now building is finished, and to th4 above stated £4,000 when the fourth house which has been destroyed by fire has been rebuilt and is delivered.  The building of all houses to be proceeded with at once.

Messrs. Provand & Daly will consult Messrs. Oxford & Co.'s wishes in finishing the houses now building and in building the house not yet commenced (burnt down).  This house is to be rebuilt on thr vacant piece of ground now in front of the same so as to be contiguous to the street.  If Messrs. Oxford & Co. should wish to have a larger house or one differently built, Mr. A. Provand promises to do his best to make the original holders of the land agree to such alteration, for the extra cost of which Messrs. Oxford & Co. would have to pay.  A proper contract to be made by Mr. Cooper Solicitor of Shanghai, and the contracting parties to bear one half each of the expense thereof.

(Signed) OXFORD & Co.

(Signed) PROVAND &  DALY.

Shanghai, 27th April, 1863.

Under this agreement "a proper contract" is to be made out, and the first question that arises is, what is meant by a "proper contract."  I think the acts of the parties show what they meant by it, and that their intention was that a Lease, in the nature of a sub-lease, should be granted by the Plaintiffs to the Defendants, of the Land and Premises held by them from Mr. George Smith. It is also admitted on both sides that no other contract than one in the form of a Lease was ever mentioned between them.  A Draft Lease was at the request of both parties prepared by Mr. Cooper, who for some time appears to have acted for both Plaintiffs and Defendants; this Draft Lease remained in the possession of th4 Defendants several months, was alluded to in more than one letter, and it is a Lease which they refused to sign.

The objections made by the Defendants to the Plaintiffs obtaining a decree of specific performance of this agreement, - are first, that the contract or agreement with reference to which the Lease was drawn, is too loose or uncertain to enable a Court to decree specific performance.

Secondly, that the Premises which were to form the subject of the Lease, were not built or finished in such a way by the Plaintiffs as obliged the Defendants at law or in equity to perform their part of the agreement and sign a Lease for 15 years, and thirdly, that even assuming the original contract to be sufficiently certain, and the Plaintiffs to have performed their part of the agreement, yet that it having been discovered that the Lease, under which the Lessor of the Plaintiff holds, was not under seal, the latter could not make out a good title.

This case was originally tried before the Assistant Judge, and the evidence taken before him, as well as that adduced at the trial before myself, is by the consent of both parties to form part of the case before  me, and be considered by me in the decree which I am now called upon to give.

There was also a preliminary objection taken by the learned Counsel for the Plaintiffs when the rehearing came on, to the effect that the Plaintiffs had since the judgment of the Assistant Judger entered into a new contract with the Defendants.  I was disposed to think at the trial, and am still of the same opinion that this objection to the rehearing came too late.  The Plaintiffs, within the time allowed for a rehearing by the mistake of their legal adviser, applied for leave to appeal instead of simply for a rehearing as provided by the rules of procedure.  The Defendants applied to set this application aside on the ground that the Plaintiffs had mistaken that remedy, which it was clear they had done.  The mistake however was one so clearly of procedure and could have in no wise prejudiced the defendants that, while setting aside the appeal, I allowed what I had power to refuse - a rehearing under the 14 Section of the Order in Council.  The facts upon which the defendants now rely were fully within their knowledge then, and I think they shoulder then have brought them forward.

They are simply these.  The day after the judgment was given, the Defendants applied to be allowed to continue to occupy a portion of the Premises which under their Notice to quit they would have been obliged to leave immediately.  The plaintiffs replied by the following note:-

Messrs. Oxford &* Co.

DEAR SIRS, - You can remain as long as it suits you, in that portion of the premises you occupy on the terms you name, Tls. 400 per month, payable in advance each month.

Yours truly, PROVAND & DALY.

On this application and answer, the Defendants rely, as disclosing a new contract, and showing a waiver of all rights under the one in  dispute; but looking at the fact that the Plaintiff did make his application within the time allowed him by the Rules of Procedure, and that although several letters passed, they were all with the single exception of this one, "without prejudice" to the Plaintiffs rights as might be hereafter determined, and to the fact also that thr Plaintiff himself states that he never had the least intention of sacrificing these rights, although he was willing not unnecessarily to inconvenience the Defendants, should the ultimate decision be against him, I do not think I should be acting fairly or equitably by the parties if, at this, the eleventh hour, I were to allow such an objection to prevail.

I pass now to the substantial objections adduced by the Defendants to the decree which the Plaintiffs seek from the equitable jurisdiction of this Court; and I will take the last one first - i.e. that which relates to the fact of the Original Lease under which the Lessor of the Plaintiffs holds the Premises, not being under Seal.  I have enquired of the Consular Department, and I find that it has been the constant, although not invariable practice of the Vice-Consul, to witness the signature of parties to instruments in the nature of Leases, Transfers and conveyances, and of many other documents which by the English Statute Law are required to be under Seal, and that such instruments were always looked upon in this Consular Court, and as far as the knowledge of the Consul goes, in all other British Consular Courts, in the light of deeds.  I find also that to decide now that all such documents are void because not under Seal would be to open up and immense amount of litigation, and to occasion all the evils which would spring from throwing  doubts on the validity of documents which have hitherto been held and considered binding and valid.  I am not disposed to incur this risk, the more especially as I have no evidence before me that the English Stature Law was binding on British subjects resident in or resorting to China, before the passing of the Order in Council under which this Court is constituted.

I am bound to take judicial notice that at the time the Lease in question was executed, Shanghai was, as it is now, not an English colony, but a city in a foreign country; but I am not bound to take judicial notice or to assume that English law is binding on every one, Native or Foreigner, on a foreign soil.

No Order in Council has been brought under my notice declaratory that the Statute Law of England was binding on British subjects on Chinese soil at the time of the execution of this Lease, but on the contrary, I do find that special English Statutes were by certain Orders in Council declared binding, as also such ordinances as the Superintendent of Trade, being Governor of Hongkong, should with the advice of the Legislature of that Island, declare to be binding on British subjects resident in or resorting to China; and I do not find the Statute requiring Leases to be under Seal, is one of those declared especially to be binding on British subjects in China, nor has any ordinance of the Colony of Hongkong of a similar character been brought under my notice.  The exclusion of certain particular English Statutes by name to China, rebuts, rather than otherwise, the presumption that the whole Statute Law was ever declared to extend here - and the absence of all proof that any special Hongkong Ordinances applicable to China declaring that Leases must be under Seal, enables me, without any sacrifice of principle, to over-rule this objection.

With reference to the objection first on the List, I have already intimated my opinion that if the nature of the Agreement is to be collected with sufficient certainty to enable the Court to act upon it - thus, in the way of determining what Covenants are proper Covenants to be inserted in a Lease drawn under the contract, it is competent for a Court of Equity to decree a specific performance.

2nd. - The Plaintiff in his argument relied on nothing being  said as to payment of taxes or to liability for repairs in the Agreement, as showing its looseness and uncertainty, but when nothing is  said the Law will look to custom in such cases as deciding which of the parties, ie. Landlord or Tenant, is to pay the taxes or make the repairs; and it can do so, as it appears to me, in the present case with quite sufficient certainty.

Published by Centre for Comparative Law, History and Governance at Macquarie Law School