“In my view in a covenant such as the one under consideration the criterion of the breach is the parting with the possession. A case to the point is that of Horsey Estate Limited v. Steiger [1899] 2 Q.B.D. 79 p. 92 where Lord Russell, C.J., said that :- “Finally, as to the alleged breach by underletting, it is admitted that there has been no assignment within the meaning of the covenant against assignment. What has taken place is this. The defendants, having agreed to sell to the new company, have let them into possession pending the completion of the purchase, the new company undertaking to pay all rents, rates and outgoings in connection with the premises or the business there carried on. There is a provision for redelivery of possession to the defendants if the contract should be rescinded. It is contended that this makes the new company the defendants’ undertenants.” A little later on the Judgment continues in these words ;- “In plain sense and according to the ordinary understanding of men, this is not a case of underletting at all, but merely a case in which the new company has been let in on terms of purchase. Had the covenant been (as is of late years often the case) against parting with possession without licence of the landlord, the plaintiff Company would have proved a breach of such a covenant, but they have not established a breach of the covenant in question, which is against underletting only.” The last case to which I would like to refer on this point is that of Abrahams v. Mac Fisheries Ltd. 1925, 94 L.J.K.B. 562 at 566 where Fraser, J., says this :- “On the correspondence and on the evidence certain facts emerge which seem to me to be quite clear. I think that here there was clear parting with the possession of part of the premises by the defendants. The handing over of the key, one knows, has not always been held to be evidence of parting with possession. No doubt the key was in the possession of Mr Mauroux and his manageress and they were in possession for a considerable time. Mr Mauroux was in possession of the premises, he had the key, his name was over the door. There was a clear breach of the covenant. It is true that the cheque given by Mr Mauroux to the defendants’ agents was never cashed, but it remained with the agents. On the facts it was a case of this kind: Repairs had been done to the knowledge of the defendants. Terms of underletting had been agreed. The defendants were saying to Mr Mauroux “Go in and carry on your business. But if any hitch occurs later on then” you will have to give up possession.” There was a breach of the covenant not to part with possession.” It seems to me as I understand the facts of this case that Messrs Witt & Busch were saying very much the same thing to Mr A. S. Basmadjian in this case though they were putting him in a very much stronger position. They were saying to him: “We have got an order for possession against you, either you attorn tenants to us in which case negotiations will begin as to the terms of such tenancy or, if you fail to do so within one week (expiring in the first week in April), we shall levy execution for possession.” In reply to this as the first portion of the evidence of A. S. Basmadjian to which I have already referred shows, Basmadjian agreed, and having agreed it is important to note that he was there and then left undisturbed in possession. The next step is the settlement signed by Solicitors to Messrs Witt & Busch and the National Bank, erstwhile landlords of A. S. Basmadjian, and in the terms of settlement is included the method of apportionment of rent and future payment of rent. This was dated 31st October, 1960. The terms of settlement, be it noted, dealt also with the apportionment and future payment of rent by the Chief Federal Lands Officer. As I understand the terms of settlement with particular reference to paragraphs 1 and 2 the present appellant Company were to receive a proportionate part of the rent backdated to the 1st January, 1958. How then can it be said in those circumstances that Messrs Witt & Busch who had covenanted with the respondents not to assign, underlet or otherwise part with the possession of the premises or any part thereof, have not broken this covenant when at the very latest on the 31st October, 1960 they allowed the Chief Federal Lands Officer and A. S. Basmadjian, tenants of a third party who has been held to be a trespasser, to continue to remain in possession after the Judgment of Coker, J., of the 27th October, 1959 on the terms that rent is apportioned and backdated to 1958 between Messrs Witt & Busch and be it noted The National Bank of Nigeria Ltd., a person whom, as I have said before, Coker, J., has held to have no title and against whom possession has been ordered. I should, at this stage, draw attention to paragraph 10 of the Statement of Defence of the defendants which reads thus :- “The defendants aver that they are in possession of the said premises through the Chief Federal Lands Officer and A. S. Basmadjian who were in possession before the Judgment of Mr Justice Coker.” Learned Counsel for the appellant was at pains to explain the effect of this admission in the Statement of Defence. In mv view when this paragraph of the defence is read in the light of the facts of this case on appeal, and with particular reference to exhibits “H” and “C” and the Judgment of Coker, J., the only meaning that can be fairly ascribed to it is that on the 31st October, 1960 (the date on the terms of settlement), the Chief Federal Lands Officer and A. S. Basmadjian delivered possession of the relevant portion of the premises, and then the appellants authorised them to be in possession on the appellants’ behalf on the basis of apportionment of rent: in other words, the appellants on that day, after receiving possession, underlet and granted possession to those persons of the relevant portions of the premises. In law that is what was effected in substance on the 31st October, 1960. That is a breach in my view of clause 2 (6) of the agreement under review in this appeal.”
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