Foster Sutton, P. The undisputed facts in this case are that the plaintiff acquired all the rights and liabilities in the “Yakau Manganese Concession " which was validated by Certificate of Validity No. 647, granted by the Supreme Court, Western Province (Concessions Division), on the 25th November, 1941.
Five underleases were granted by the plaintiff to a Mr. Robert Hector Munro who covenanted to pay to the plaintiff, inter alia, the sum of £12,000 plus a tonnage royalty at the rate of two shillings and sixpence for every ton of 2,240 pounds of manganese ore (other than ore utilised for road making or like purposes) extracted after the 23rd June, 1950, at the rate of not less than £1,500 in each half year which was to be paid irrespective of whether or not a profit was in fact made.
By an instrument dated 23rd July, 1952, Mr. Munro assigned his interest in the underleases to the co-plaintiff, Mr. Michael Golodetz.
The validated concession required the concessionaire in addition to a working rent to pay” by way of royalty a sum equivalent to two and one-half per cent (2.5%) of the annual amount of the nett profits (if any) made from or in respect of the exercise of the rights conferred by the concession “.
The plaintiff received the sum of £12,000 and the tonnage royalty, but failed to pay to the first defendant, the grantor, 2.5 per cent of such amounts, maintaining that these sums were not subject to the royalty referred to in the concession. The first defendant, who took the contrary view, thereupon served notice of termination of the rights granted under the concession as required by section 34 (3) of the Concessions Ordinance, 1939 (now section 33 of Cap. 136).
The plaintiff then instituted these proceedings, seeking relief from forfeiture if he was found liable to pay the 21 per cent royalty in respect of the £12,000 and tonnage royalty received by him.
The action came for trial before Dennison, J., who found that the plaintiff was not liable to pay the 21 per cent royalty in respect of the sum of £12,000, which he held not to be an “annual profit “to use his own words, “In my view the use of the word 'annual' means something which is received annually and not, as in this case, a capital profit made out of the sale of underleases. To my mind the £12,000 is consideration money, and not an annual profit. “He also granted relief against forfeiture under the Common Law Procedure Act, 1852; and it is against these decisions in the judgment that the defendants have appealed.
The concession expressly empowers the concessionaires to “assign, sublet or , otherwise dispose of the-whole or part “ of the area covered by the concession, and this is what the plaintiff did, part of the consideration for the assignment being the £12,000 received by him.
For my part I have no difficulty in reaching the conclusion that the £12,000 must be regarded as being part “of the annual amount of the nett profits “ within the meaning of the validated concession, and I do not think that can be seriously disputed. The amount in question was certainly received by the plaintiff as a result of the exercise by him of a right conferred by the concession, and it was just as certainly a profit. I think it is plain that annual profit means something which is of the nature of revenue or income, and I also think it is plain that it need not be repeated every year so as to be a continuous source of income, in order to constitute it an annual profit within the meaning of the concession.
When considering the question of whether or not relief against forfeiture should be granted the learned trial Judge observed: “A Court of Equity, when asked by a lessee to grant him relief, will consider the conduct of the lessee in dealing
with the property. In this case a bona fide dispute over the construction of the said paragraph (F) of the concession had arisen, in these circumstances I do not consider it unreasonable for the plaintiff to have withheld the royalties in dispute, the rent has been paid and both the plaintiff and the co-plaintiff have always expressed their willingness and ability to pay any amount found to be owing under the lease “ and I am satisfied that the conclusion he reached was a proper exercise of his judicial discretion to grant relief.
The history of the subject relating to the relief granted in equity against forfeitures and penalties is given by Kay, L.J., in Barrow v. Isaacs and . Son (1) as follows: “Long ago Courts of equity assumed jurisdiction to relieve against forfeiture and penalties where the only object was to secure payment of a definite sum of money, even though there was no fraud, accident, surprise or mistake. On this principle it relieved against payment of the whole penalty on a money bond before the statutes 4 and 5 Anne, Cap. 16, sections 12 and 13, and 8 and 9 Will. 3, Cap. 11, which enabled Courts of law to give the same relief. Also against forfeiture for non-payment of rent.”
The circumstances required by sections 211 and 212 of the Common Law Procedure Act did not exist to enable the Court to grant relief under its provisions, and I am of the opinion that the learned trial Judge was in error in treating the case as if they did, but it was open to him to grant relief against forfeiture under the inherent jurisdiction of the Court to which I have already referred, and I am satisfied that he was right in so doing.
I would accordingly allow this appeal to the extent of amending the judgment of the Court below by directing that the plaintiff do also pay to the first defendant the royalties found due on the sum of £12,000 received by the plaintiff, and since the appellants have succeeded on a substantial issue on this appeal r would allow them their costs of appeal fixed at £44 10s. 0d.
Coussey, I.A. I concur. Hearne, I.A. I concur.
Appeal partly allowed; judgment varied.