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Souza Figueiredo & Co Ltd v Moorings Hotel Co Ltd [1960] E.A. 926


In the case of Souza Figueiredo & Co Ltd v Moorings Hotel Co Ltd [1960] E.A. 926, the respondent, who held a sub-lease of certain club premises with a liquor license, sub-leased the premises to the appellant for the remaining term of the sub-lease minus the last three days. This sub-sub-lease term exceeded three years. The Registrar of Titles refused to register the agreement, claiming it was not in a registrable form. Despite this, the appellant took possession of the premises and operated the club while the liquor license and business registration remained in the respondent's name.

The appellant occupied the premises from April 1, 1956, to September 16, 1958, accumulating Shs. 50,199/96 in unpaid rent. When legal proceedings were initiated for the arrears, the appellant argued that since the agreement was not registered, it could not create a legal estate or interest in the land, making the rent covenant unenforceable. The appellant also claimed the agreement was illegal as it allowed liquor sales for their gain under the respondent's license, contravening the Liquor Ordinance, 1955, and Liquor Rules, 1955.

The court dismissed these defenses, ruling in favor of the respondent. It held that although an unregistered instrument cannot create or transfer an estate or interest in land, it can still serve as a contract between the parties. This principle ensures that such documents are construed to have effect rather than be void. The court also determined that an unregistered lease agreement could still be specifically enforced, and the rent covenant remained enforceable as either a contractual stipulation or a common law tenancy at will. Furthermore, the court found no evidence of intent to act illegally by the parties when the agreement was made. 

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