Winslow J:

By motion dated 12 January 1968 the plaintiffs applied for an interlocutory injunction restraining the defendants until further order from letting or parting with the possession of that portion of the ground floor of premises known as Satnam House at the junction of North Bridge Road and High Street marked red on a plan attached to an agreement for a lease dated 13 December 1966.

It is an undisputed fact that on the date of the hearing of the motion, i.e. 5 March 1968, a departmental store forming part of the business of Eastern Emporium Ltd. was already in possession of the said portion of the ground floor as well as other portions of the same premises. No details have however been given to me as to the terms on which they have been let into possession. All that I can gather from the affidavits filed in these proceedings is that, although this store officially opened for business on 15 January 1968, Eastern Emporium Ltd. went into occupation of the premises in question on or about 20 December 1967. It also appears that on 5 December 1967, the solicitors for the defendants informed the solicitors for the plaintiffs that their clients were no longer disposed to proceed with the lease agreement and that they were making alternative arrangements in respect of the ground floor and that later, on 12 December 1967, the defendants informed the plaintiffs that they had given the said ground floor as well as the first and second floors to a departmental store.

Attention should be drawn to three indentures of mortgage dated 6 April 1963, 15 July 1963 and 3 December 1966. Certain overdraft facilities were agreed to be accorded by the plaintiffs to the defendants in consideration whereof certain lands and premises belonging to the defendants on which Satnam House stands were charged with the payment of all monies outstanding thereunder.

Certain correspondence also took place between the parties in 1965 and 1966 from which it appears that the parties contemplated the grant of a lease of at least part of the ground floor in question but the agreement for a lease of 13 December 1966 does not itself contain any reference to the indentures or any of them.

A dispute has accordingly now arisen as to whether the grant of a lease was dependent on the grant of overdraft facilities in accordance with the third indenture of mortgage or not. Whereas the plaintiffs claim that the grant of a lease was quite independent of that indenture of mortgage, the defendants contend that the plaintiffs were in breach of their obligations under that indenture and that consequently, the said indenture as well as the agreement for a lease dated 13 December 1966 which was dependent on the fulfilment of these obligations, fell to the ground.

The attitude taken by the plaintiffs on this point as expressed in their solicitors' letter dated 29 December 1967 that the agreement had no connection with the mortgage is somewhat surprising in view of previous correspondence between the parties. For example, in their letter of 2 July 1965, they clearly stated that the overdraft facility was subject to various conditions of which the grant of a lease of approximately 962 sq ft of the ground floor at the corner of High Street and North Bridge Road and the rentals therefore were the principal ones.

Whether the plaintiffs were in breach of their obligations under the third indenture of mortgage dated 3 December 1966 is a matter which will have to be finally determined at the trial. Whereas the defendants contend that, by failing to advance moneys in November 1967 on production of the architect's certificate relating thereto, the plaintiffs were in breach of contract, the plaintiffs, however, reply that they did not repudiate their contract but merely asked for clarification in their letter of 29 November 1967. They did admit however that, until clarification, overdraft facilities would, notwithstanding the architect's certificate, not be granted.

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