LORD PEARSON—Mettaaratchy r. Naidoc
1969Present: Lord Morris of Borfh-y-Gest, Lord Pearce,
Lord WUberforce, Lord Pearson and Lord Diplock
P. MELLAARATCHY, Appellant, and J. A. NAIDOO,
Privy Council Appeal No. 9 of 1968S. C. 56 (F)}65—D. C. Nuxvara Bliya, 5409jM
Privy Council—Questions of fact—Concurrent findings thereon in the Courts below—Finality of such findings-.—New contentions not put forward in the Courts below—Whether Privy Council will entertain them.
Tho Judicial Committee of tho Privy Council treat quostions of fact onwhich thero have been concurrent findings in the Courts below asconclusively established, unless there are special circumstances such aswould justify setting aside those findings. Furthermore, they do not admitnew contentions not put forward in the Courts below if suchcontentions require further evidenco and further findings and cannotsucceed on the materials already available to them.
Appeal from a judgment of the Supreme Court.
F. N. Graliaen, Q.C., with Walter Jayaicardena, Q.C., and BrianSinclair, for the defendant-appellant.
M.P. Solomon, for the plaintiff-respondent.
Cur. adv. vult.
April 15, 1969. [Delivered by Lord Pearson]—
The plaintiff in the action, who is the respondent in this appeal,is the executor of the wiLl of the late Mr. Marley who died inCeylon on 26th February 1963. Mr. Marley was a retired tea-planterand a man of substantial means. He was about 86 or 87 yearsof age when he died, being considerably older than Mrs. Marley, hiswife, who played a prominent part in the events' leading up to theaction though she is not a party to it. The defendant in the action,who is the appellant in this appeal, is also a man of substantialmeans, owning a number of properties and having experience ofmanaging rubber and coconut estates.
On 6th August 1960 a contract in writing was made between aCompany called Borakande Estate Company Limited (who will becalled “the Vendor Company”) and Mrs. Marley and the appellant
J • J f. 64 0-2.255 (8/69;
LORD PEARSOX—Mellaaratchy v. Naidoo
for them to purchase as joint purchasers from the VendorCompany a rubber and coconut estate of about 400 acres called theBorakande Estate at the price of Rs. 425,000. Completion of thecontract took place on 29th November 1900. The appellant hadhardly any available ready money at that time. The sum ofRs. 425,000 required for the purchase of the estate was providedas follows :—
(o) A sum of Rs. 125,000 was borrowed by the purchasers from theVendor Company and it was agreed that it should be secured bya mortgage of the estate.
(6) A sum of Rs. 125,000 was lent to the purchasers by the MercantileBank on Mr. Marley giving a guarantee for this sum and interestthereon and agreeing that a fixed deposit of Rs. 150,000 whichhe had at the Bank should be appropriated for the purposes ofthe guarantee.
A sum of Rs. 50,000 was lent by Mr. Marley to the appellant and
used by the apjiellant in paying the deposit of Rs. 42,500 andmaking a further payment of Rs. 7,500 in respect of the purchaseprice.
A sum of Rs. 25,000 was borrowed by the appellant from a Bank. on a guarantee given by Mrs. Marley.
Further sums amounting to Rs. 100,000 were provided by
Mr. and Mrs. Marley.
In addition Mr. Marley paid legal expenses amounting to Rs. 17,004and the purchasers—Mrs. Marley and the appellant—were liable toreimburse him. The appellant’s share of this liability was onc-half,t.e., Rs. 8,502. Mrs. Marley and the appellant became owners of theestate in equal shares.
Arrangements were made for the appellant to have the managementof the estate and out of tlie nett proceeds to pay Rs. 6,000 per monthto the Mercantile Bank towards repayment of the loan of Rs. 125,000and accruing interest. It is important in relation to one of the issues inthis appeal to ascertain the nature of these arrangements. There iscontemporary documentary evidence that the arrangement for thepayment of the Rs. 6,000 per month was imposed by the MercantileBank as a condition of granting the loan of Rs. 125,000. On SthSeptember 1960 the. appellant, in a letter to which Mrs. Marley addedher written consent and signature, wrote to the Bank saying : •
“ After the interview the undersigned had with your goodsclf theproposals were discussed with Mr. and Mrs. Marley and now wc havedecided to send the details.
Wc really need a Rs. 125,000 to complete the pruchase and if youarc prepared to accommodate us Mrs. Marley and I are prepared.to give you a mortgage of the propert}' as we would be owning the
LORD PEARSON—Mellaaratchy v. Naidoo
property in equal shares. We are also prepared to send all ourproduce to Mr. Armitage of Messrs. John Keel, Thompson WhiteLimited and. from the proceeds of sales for us to draw the minimumas working expenses and the balance to bo sent into your Bank or asan alternative for them to send all proceeds of sales to the Bank andfor us to draw from the Bank an.amount fixed upon monthly fortho working expenses. As we are anxious to complete the purchasewithout delay we would very much appreciate an early reply.
(Sgd.) D. P. Mellaaratchy.
(Sgd.) Eileen Marley ”
On 30th September 1960 the Bank wrote to the appellant, sending acopy to Mrs. Marley. They said :
"… we are pleased to advise that your application for a – loanof Rs. 125,000 has been sanctioned by our Head Office. The termsof the Limit are as follows:—
‘ A limit of Rs. 125,000 for advances on a separate loan accountrepayable on demand, secured by a first legal mortgage of freeholdland beneficially owned in equal shares by Mrs. E. Marley and Mr.
P. Mellaaratchy, comprising of Maha Borakande Estate being arubber estate of 2,399 acres, with various estate buildings, situatednear Ambalangoda in Galle District, to be shortly occupied by theborrowers and valued by Mr. A. A. Jayasinha, Court Valuer &Auctioneer, at Rs. 480,000.
Repayment of Advances
By monthly, instalments of Rs. 6,000 to be paid direct to theBank by Messrs. John, Keell Thompson, White Ltd. from whom aletter will be obtained undertaking to pay to the Bank the proceedsof all produce sold by them on account of the estate. Interest at3% over Central Bank rate, minimum 7%. *
We shall be grateful if you will now write to Messrs. John, Keell,Thompson, White Limited instructing them to pay the proceeds of allproduce sold by them on your behalf to this Bank for credit of youraccount. Such payments will be credited to a general account to beopened in the name of the Estate and the sum of Rs. 6,000 will betransferred monthly from the general account to the loan account.
LORD PEARSON—Alellaaratchy v. Koidoo .
For a very short time the joint venture seemed to be proceedingSmoothly and successfully. On 8th December 1960 Mr. Marley wrotea friendly letter to the appellant and on 12th January 1961 the appellantwrote a friendly letter to Mr. Marley. Also on 12th January 1961Messrs. John Keell, Thompson, White Limited paid into the Bank a sumof Rs. 8,811/85 of which Rs. 2,SI 1/85 was credited to the joint currentaccount of the appellant and Mrs. Marley for the Borakan.de Estate andRs. 6,000 was credited to the joint loan account.
But after that there was no further payment into the joint loanaccount and the only further payment into the joint current account inthe year 1961 was of a sum of Rs. l,lSl/40 on 17th February. There wasantagonism developing between Mrs. Marley and the appellant. Early inFebruary 1961 Mr. Martensz, Mr. Marle)r’s legal adviser, and then apartner in the firm of F. J. and G. de Saram, was trying to bring abouteither a sale of the estate by the appellant and Mrs. Marley or a saleby Mrs. Marley of her half share to the appellant. Mr. Martensz alsorequested that Messrs. Mackwoods be appointed to manage the estate,but the appellant would not agree. Also in February and March 1961Air. Martensz and Mr. Marley were asking the appellant to give amortgage of his half share of the property as security for the loan ofRs. 50,000 and the half of the Rs. 17,004 paid b}' Mr. Marley in respect .of legal expenses and the half of Mr. Marley’s liability under the guarantee,but no mortgage was given. On 8th August 1961 Messrs. F. J. andG. de Saram wrote to the appellant asking for a working account ofBorakande Estate showing Mrs. Marley’s half share of the profit or lossfor the period 1st April 1960 to 31st March 1961. On 12th October1961 another lawyer, Mr. Clarence L. de Silva, wrote on behalf ofMrs. Marley to the appellant requesting him to hand over the managementof the estate and also asking for an account. On I2th November 1961the appellant replied, refusing to hand over the management of the estateon the ground that Mr. Marley had made it an express condition beforethe purchase that the appellant should devote his entire time and energyto the management of the estate, and also refusing to send an account-on the ground that as Mr. Jalcel was Mrs. Marley’s agent and attorney inrespect of her half share in the estate the appellant was not accountable .to anybod}' else. On 22nd November 1961 Mr. Clarence L. do Silvawrote a letter protesting against the appellant’s attitude and proposingthat the appellant should cither sell his interest in the estate to Mrs. Marleyor purchase her interest. In the meantime Messrs. F. J. and G. de Saramwrote to the appellant on behalf of Mr. Marley demanding repaymentof the Rs. 50,000 and the Rs. S,502 (half the sum of Rs. 17,004) andrequiring him to pa}' to the Bank the arrears of the monthly instalmentsof Rs. 6,000. Mr. Martensz (partner in F. J. and G. dc Saram) wasstill trying to bring about a sale by Mrs. Marley of her interest in theestate to the appellant.
LORD PEARSON—AIcllaaratchy c. Naidoo
The antagonism came to a climax in February'19G2. On 6th FebruaryMr. Clarence L. <1 c Silva as proctor for Mrs. Marlcy filed a plaint on herbehalf against the appellant in the District Court of Balapitiya. Theplaint alleged mismanagement of the estate by the appellant in severalways, especially bj- failing to send the produce to the brokers John Kt-oII,Thompson, White Limited so that they could pay the proceeds to theMercantile Bank for the credit of the joint estate account, and by failingto render to Mrs. Marlcy any account of the income and expenditure.She claimed an account, certain sums of money and the appointment ofa receiver. On 20th February 19G2 strange things happened. Mrs. Marlcygranted or purported to grant to Mr. Jayntillckc and Mr. Gunnsekara alease of the estate for five years at a rent of Its. 500 per month orone quarter of the nett income whichever should be the less.. On thesame day there was an invasion of the estate by Mr. and Mrs. Marlcyand Mr. Jayatillcke accompanied by a number of men some of whomwere armed, and they took possession of the estate and forced thesnpcrintendent-to-leavc the estate. _Thc comment of the District Courton this behaviour was “ It is rather shocking that people from whomone could have expected a better standard of conduct should havedescended to that low level reminding one of Chicago gangsterism ”.Complaints to the police were made by the superintendent on20th February and by the appellant two days later.
Then there were negotiations, and on 2nd March 19G2 an agreementin writing was made, which is important in its bearing on. the issuesin this appeal. The parties to it were the appellant as vendor andMrs. Marlcy as purchaser. The appellant agreed to sell and Mrs. Marleyagreed to purchase the appellant’s half share in the estate (subject toauthority being obtained from the Tea and Rubber Estate (Control ofFragmentation (Board) at the price of Rs. 100,000—and completion wasto take place within two weeks of such authority being obtained. Therewere additional terms including the following :—
“ 7. That all outstanding debts and liabilities accruing in respectof moneys advanced by Herbert Goddard Marley for the purchaseof the said premises shall be borne by the purchaser, who shall alsobe solely liable for the payment of the sura of Rs. 125,000 whichmay become due upon an Agreement to Mortgage executed by thevendor and the purchaser and the said mortgage in respect of thesaid sum of Rs. 125,000 shall be executed in favour of theBorakanda Estate Company Limited by the vendor and the purchaserbefore the execution of the transfer herein mentioned.
10. The purchaser shall withdraw all proceedings and suits filedagainst the vendor in the District Court of Balapitiya in respect ofthe said premises.
J 5G40 (3/69)
L.ORD' PEARSOX—Mcllaa'ratchy v. Kaidoo
If tlio purchaser shall fail to complete the purchase asprovided in Clause 4 hereof, then in that event this Agreement shallforthwith be deemed to be cancelled and of no effect and thereuponthe purchaser shall become liable to pay forthwith to the vendor asum of Rs. 100,000/- as liquidated damages and not by way ofpenalt}', subject however to the conditions that the Tea andRubber Estates (Control of Fragmentation) Board lias grantedits authority for a sale of the said premises in terms of paragraphJ hereof. ”
The appellant had legal advice with regard to this agreement of2nd March 1962. He said in his evidence that when Mr. Marley hadasked him to meet Mr. Marley’s proctor, Mr. Welikala, “I couldnot make up my mind because the matter was in the hands ofiny lawyers Mr. Adv. Thurairatnam and Mr. David Perera….0nMr. Thurairatnam’s advice, I was agreeable to bo rid of the botheron receipt of Rs. 125,000/- Mr. Marley agreed and asked me to-.go and see Mr. Welikala and he wanted me to discuss the detailswith him. I went and saw Mr. Welikala a day or two after.Then I met him and he gave me a draft and with ProctorDe Silva I •went and saw Mr. Adv. Neville Samarakoon andafter some corrections were made, I brought and gave it toMr. Welikala. ”
When they had entered into this agreement both the appellant andMrs. Marley went to the police and made statements informing themof the settlement that had been effected.
The Board granted its authority for the sale to be made.
But Mrs. Marley did not proceed with the purchase. In breach ofclause- 10 of the agreement of 2nd March 1902 she did not withdrawthe action which she had commended against the appellant in theDistrict Court of Balapitiya. Indeed she signed judgment against theappellant in that action but the appellant had the judgment set aside.From about April 1962 onwards Messrs. Julius and Creasy were actingfor Mrs. Marley. On 15th June 1902 Messrs. Julius and Creasy wroteon her behalf a letter to the appellant referring to the lease of 20thFebruary 1962 in favour of Mr. Jayalillcko and Mr. Gunasckcra antito the agreement of 2nd March 1962, and saying that they proposedtaking steps to secure to their client her interest in the proport}: freefrom any encumbrances effected by these documents, and calling uponthe appellant to have the agreement of 2nd March 1962 cancelled anddischarged.
On 12th July 1902 Mrs. Marley through her proctors Messrs. Julius andCreasy commenced an action against Mr. Jayatillekc and three otherdefendants, alleging that Mrs. Marley’s execution of the lease of 20th
LORD PEARSON"—3fcllaaratchy v. ffaidoo
February 19G2 had been obtained by fraudulent misrepresentationas to the nature and contents of the lease or by undue influence, andclaiming that.the lease should be declared void ab initio or rescinded orset aside and that possession of Mrs. Marley’s one half share of the estateshould be restored to her and also claiming damages. Mrs. Marlcydid not bring an action to have the agreement of 2nd March 1962 declaredvoid or rescinded or set aside.
Mr. Marley died on 26th February 1963, and his will was proved bythe plaintiff (respondent) who is a senior partner in the firm of Juliusand Creasy. The will contained a proviso: "I do hereby. .. .directmy executors out of my estate to pay to the said Mercantile Bank Limitedthe sum which at the time of such payment shall be found to be owing tothe said Bank for principal and interest upon the joint loan account inthe name of my said wife and the said Peter Mellaaratchy and on suchpayment I direct my executors at the expense of my estate to obtainfrom the Bank an assignment cession or other appropriate.document inconsequence of such payment having been made under or in respect ofmy hereinbefore recited guarantee. ” Mr. Marley by his will released hiswife from certain debts which she owed to him in connection with thepurchase of the estate in 1960 and also from any liability which wouldarise out of the repayment of the Bank loan. On the other hand hedirected his executors to demand payment of all monies owing to him bythe appellant, and to take all such steps as might be necessary for therecovery of such monies. The will had been made.on 9th October 1961,and there was a codicil made on 17th May 1962.
The directions in the will were carried out. On 12th June 1963 thefixed deposit of Rs. 150,000, which Mr. Marley had in 1960 appropriatedto his guarantee of the loan of Rs. 125,000 made by the Bank to theappellant and Mrs. Marley on joint account and interest thereon, wasapplied to this purpose by the Bank at the request of the respondent whowas the executor. The amount owing including interest wasRs. 136,343 69, and the deposit receipt was used to pay off this debt andthe balance of Rs. 16,1S3-71 was paid to the respondent. Then on21st November 1963 the respondent brought the action against theappellant, claiming repayment or reimbursement of :
Rs. 68,17184 being one half of the sum of Rs. 136,343*69.
Rs. 8,502 being one half of the sum of Rs. 17,004 which Mr. Marleyhad paid in respect of the legal expenses of the purchasers of theestate in 1960.
Rs. 52,S12*50, being the sum of Rs. 50,000 lent by Mr. Marley tothe appellant in 1960 and interest thereon.
LORD PEARSON—Mcllaaratchy v. Xaitioo
There was an Answer ' from the appellant as defendant-, and it wasdated 29th May 19G4. As there were afterwards “ issues framed " coveringmost of the material allegations in the Answer, it will be necessary to setout only the main contents of paragraph 13-:
** 13. Thereupon Eileen Florence- Marlcy with the concurrence,approval and knowledge of and together with H. J. G. Marlcy actingby their Proctor, Mr. Wclikala, and others entered into negotiationswith the Defendant as a result whereof the Defendant was dischargedfrom all obligations to pay any moneys to H. J. G. Marlcy orEileen Florence Marlcy and the Agreement No. 227 dated 2nd March1962…. was entered into between Eileen Florence Marlcy and the
Defendant …. The Defendant thereafter and in consequence
thereof abandoned all steps taken by him and referred to above andgave up all claims against Eileen Florence Marlcy and H. J. G. Marlcyand was thus and otherwise absolved and released by H. J. G. Marleyand Eileen Florence Marley from all or any liability to pay any sumof money to H. J. G. Marley or to Eileen Florence Marley. In thecircumstances aforesaid, H. J. G. Marlcy was estopped and barredfrom making any claim and the Plaintiff has no cause of action againstthe Defendant. ”
The appellant’s primary contention at the trial in theDistriet- Court.amithe version of the agreement of 1960 given by him in his evidence, werethat he did not in I960 acquire any half interest in the estate and he didnot have any liability to repay the loans out of his own pocket, but theagreement was that he should manage the estate and out of the profitspay ofT the monies which had been borrowed for effecting the purchaseof the estate, and when all these monies had been paid off then and oilythen he would acquire his half interest in the estate. This contention ofthe appellant and his version of the I960 agreement were rejected by theDistinct Court because they were – extensively contradicted by thedocuments as well as by the evidence of the respondent’s witnesses whichwas accepted by the District Court. The decision of the District Courton this aspect of the case was not challenged in this appeal (nor, so faras appears, in the Supreme Court). Therefore it is unnecessary to setout- the issues and findings relating to these matters.
The plea of estoppel raised in paragraph 13 of the Answer was reliedupon in argument- in the Courts below, but there seems to be in the- factsof this case no matters from which any estoppel, in any ordinary sense of *the word, could possibly be derived or inferred. At any rate no argumentbased on estoppel was put forward in this appeal.
Learned counsel for the appellant put. forward two contentions in thisappeal.
(A) It was contended that- before the written agreement of 2nd March1962 was entered into there was an oral agreement made between theappellant and Mr. Marlcy by which Mr. Marley would release the
LOUD PEAR SOX—Mcllaaralchy v. Naidoo
appellant from his liabilit}' to Mr. Marley if the appellant would enterinto the written agreement with Mrs. Marley. In regard to thiscontention it will be convenient to set out the relevant issues framedand the District Court’s answers to them :
“ (18) Did the deceased H. J. G. Marley thereupon agree withthe defendant whercundcr:
(or.) the defendant was discharged of all obligationsto pay any monies to H. J. G. Marley, deceased,or Eileen Florence Marley,his widow ?No
(6) Agreement No. 227 of 2.3.C2 attested by
R.M. S. Karunaratne, Notary Public, wasentered into between the defendant and EileenFlorence Marley ?Yes
(c) the defendant abandoned ail steps takenagainst Eileen Florence Marley and H. J. G.
Marley, deceased ?Yes
(19) (a) Has the defendant been released and absolvedfrom liability to pay any sum of money toH. J. G. Marley, deceased, or to EileenFlorence Marley ?No
(6) Is the Estate of H. J. G. Marley, deceased,estopped and barred from making any claimagainst the defendant ?No ” ■
The District Court’s negative answer to issue No. IS (a) was expresslyapproved by the Supreme Court. Therefore the appellant is faced withconcurrent findings of fact against him. There is a well-established rulethat, unless there are sjjecial circumstances, their Lordships’ Board treatquestions of fact on which there have been concurrent findings in theCourts below as conclusively established. Vatcher v. Pauli A.C. 372, 383 J. C. per Lord Parker of Waddington. St. Francis HydroElectric Company Limited v. The King f 1937j 2 All E. R. 541 J. C. perLord Maugham. Yachuk v. Oliver Blais Company Limited A.C. 3S6, 397 J.C. per Lord du Parcq.
Counsel for the appellant, however, has argued that there are specialcircumstances in this case, in that the judges of both the Courts belowmisdirected themselves as to the effect of the evidence relating toissue 18 (a) in that the distinction between the notarial agreement D. 5(t.e., the uritten agreement of 2nd March 1962) and the alleged oralagreement between Mr. Marley and the appellant which preceded D. 5was not sufficiently appreciated.
106LORD PEARSON—Mcllaaratchy v. Kaidoo
There is in the judgment of the District Court some foundation for thisargument, in that the judgment after reviewing the evidence at lengthand dealing very carefully and lucidly with the main question at issue(the question as to the nature of the orginal transaction) dealt rathercryptically with the question whet her Mr. Marlcy had before the conclusionof the written agreement of 2nd March 19G2 agreed to release theappellant from his liabilities to Mr. Marlcy. The learned District Judgemust have had in mind what the question was. The note of the addressof defendant’s (the appellant’s) counsel in reply ended with the words“Mr. Adv. Thiagalingm in reply says that Mr. Marlcy agreed to releasothe defendant from all obligation and that the defendant was absolvedfrom all liability. ” In the judgment the description of the defendant’sevidence includes this passage : “ He agreed with Mr. Marie}' that hewas to be discharged of all obligations in respect of the BorakandaEstate. If that was not agreed he would not have signed the agreement ”.Also issue Ho. IS (a), which has been set out above, was quite clearlyphrased and received the definite answer “No”. The passage in thejudgment giving reasons for the decision is as follows :—
“ The defendant has taken up the position that the Plaintiff isestopped from making any claims against him as by D. 5 the defendantwas discharged from all obligations to pay any monies to Mr. Marlcyor Eileen Florence Marlcy and further the defendant abandoned allsteps taken by him and gave up all claims against Eileen FlorenceMarley and H. J. G. Marlcy. Now it would appear that D. 5 is anagreement between Mrs. Marley and the defendant only. There isno doubt credible evidence that Mr. Marlcy was also present at thetime of execution of D. 5. Mr. Ivarunaratne states that Mr. Marleywas present at the time. The defendant states that he would nothave signed the agreement if Mr. Marlcy was not a party to it and hewas not absolved from all claims by Mr. Marlcy. It is difficult to-understand why it was not thought fit to make Mr. Marlcy also a-signatory to D. 5. By D. 5 Mrs. Marie}' lias undertaken to pay allmonies advanced by Mr. Marley. One cannot, however, say thatMr. Marley did not acquiesce in the transaction, but why was he notmade a party to it ? However, the agreement is a conditionalone as can be seen by paragraph 12 and also paragraphs 3 and 4.There is proof that Mrs. Marley did not abide by the agreement,because, despite paragraph 10 of D. 5 she proceeded with the casefiled against the defendant in the Balapitiya Courts. … In thecircumstances I am of opinion that the pica of estoppel must fail. ’’
. In this passage, although the explanation of the. ground of decision islacking in clarity the reasoning is sound. The fact that Mr. Marlcy wasnot made a party to D. 5 (the written agreement of 2nd March 19G2) is avital point. It is to be remembered that the appellant had ample legaladvice with regard to this agreement, as appears from a passage in hisevidence quoted above. Mrs. Marlcy if she took over the appellant’shalf share in the ownership of the estate would naturally take over all or
LORD PEARSOX—Xldlaara/cky v. Nauloo
most of the appellant’s obligations arising out-of their purchase of theestate. But her promise to perform his obligations would not extinguishthe obligations nor relieve him of his liabilities to Mr. Marley as creditor.If the intention had been to release the appellant from his liability toMr. Marley, Mr. Marley should have been joined as a party to thewritten agreement, so that there would have been a novation withMr. Marley agreeing to accept Mrs. Marley as his debtor in lieu of theappellant—in other words agreeing to release the appellant from theobligation in consideration of Mrs. Marley assuming it. As the appellantwas acting under legal advice, the fact that Mr. Marley was not joined asa party, so that the written agreement could not operate as a novation, isstrong evidence against the alleged existence of an oral agreement torelieve the appellant of his obligation to Mr. Marley. Moreover Clause 12of the written agreement, to which the District Court referred, also tendsto show that the alleged oral agreement was not made. The scheme ofClause 12 is that if Mrs. Marley docs not complete her purchase of theappellant’s half-share the agreement will-be cancelled_and of_no_effectand Sirs. Marley will be liable to pay to the appellant Rs. 100,000/- asliquidated damages. That is reasonable if the appellant keeps his halfshare of the ownership of the estate and also remains under his obligationsarising out of the purchase of the estate in 1960 : he is deprived of thepurchase price of Rs. 100,000—but he will receive the same sum asliquidated damages. On the other hand, if the appellant were relievedof his obligations to Mr. Marley the Scheme of Clause 12 would gowrong and the appellant would get too much : he would keep his halfshare of the ownership of the Estate, and be relieved of his obligationsto Mr. Marley and in addition receive Rs. 100,000/- as liquidateddamages ; that would be an excessively favourable position for theappellant and is not likely to have been intended.
The judgment of the Supreme Court on this issue, affirming the decisionof the District Court, shows beyond all doubt a full understanding oftho appellant’s allegation of an oral agreement and gives clear and cogentreasons for rejecting it.
There are in this case no special circumstances such as would justifysetting aside the concurrent findings of fact by the Courts below thatthe alleged oral agreement was not made. Accordingly the firstcontention put forward on behalf of the appellant in this appeal fails.
(B) The second contention put forward on behalf of the appellant inthis appeal has been to the effect that from the findings of the DistrictCourt on certain of the issues it follows as a matter of law that theappellant has been released from his obligations to Mr. Marley or atany rate from those arising out of Mr. Marley’s guarantee in respect ofthe sum of Rs. 125,000 lent by the Mercantile Bank to the appellantand Mrs. Marley.
.LORD’ FEARSOX—Melhiaralchy v. Kaidoo
This is a new contention, not put forward in the Courts below. InConnecticut Fire Insurance Company v. Kavanagh [1S92] A. C. 473,4S0 J.C. Lord. Watson said :
“When a question of law is raised for the first time in a Court oflast resort, upon the construction of a document, or upon facts citheradmitted or proved beyond controversy, it is not only competentbut expedient, in the interests of justice, to entertain the plea. Theexpediency of adopting that course may bo doubted, when the pleacannot be disposed of without deciding nice questions of fact, inconsidering which the Court of ultimate review is placed in a muchless advantageous position than the Courts below. But theirLordships have no hesitation in holding that the course ought not, inany case, to be followed, unless the Court is satisfied that theevidence upon which they are asked to decide establishes beyonddoubt that the facts, if fully investigated, would have supported thenew plea.”
The findings relied upon were in the answers given to issues (II),15 (a) and (1G (a) ), and the answer to issue 17 is also relevant :
“ (II) Prior to the Deed of Transfer No. 1419 of29th November 19G0 of Borakanda Estate to thedefendant and Mrs. Marl03’ was it agreed betweenH. J. G. Mar Icy, the deceased, and the defendant :
that tiic defendant was to be in solemanagement of Borakanda Estate after
the transfer ;Yes
that- the defendant was to manage thesame and pav out the nett incometherefrom :
the sum of Rs. 125,000/- and interestthereon due to Borakanda Estate Co.
Ltd., on a mortgage to lie enteredinto in favour of the saidCompany ;Yes
the sum of Ks. 275.000/- to the saidMarie}*, deceased, and Eileen FlorenceMarky by crediting the same to aseparate account with the MercantileBank Ltd.; andYes
the defendant was to maintain anaccount under the name ‘ BorakandaEstate’ fort lie purpose of runningthe Estate.Ves
LORD PE.ARSOX—Mcliaarotchy v. Xaidoo
(15) (a) Did H. J. G. Marley, deceased, and liis widowEileen Florence Marley on 20.2.62 along with some thugstake wrongful and forcible possession of BorakandaEstate from the defendant ?Yes
(1G) Was the defendant wrongfully deprived of thepossession and management of:
(a) Borakanda EstateYes
(17) Did the defendant thereupon take necessary steps
to regain possession of Borakanda Estate Yes ”
These findings are not enough to establish any contention on the linesput forward, however it" might be" formulated.- -Further-evidence andfurther findings would be required. Was it a condition of the loans madeby Mr.Marle}1, or of anj' agreement that there might have been relatingto Mr. Marley’s guarantee of the Bank loan of Rs. 125,000, thatrepayment or reimbursement would be made only out of the proceeds ofthe estate and not otherwise ? The arrangement for payment ofRs. 6,000 in reduction of the Bank loan of Rs. 125,000 was made atthe instance and for the benefit of the Bank. Was there any agreementbetween Mr. and Mrs. Marlcy and the appellant that this arrangement,was to operate for the benefit of the debtors ? When and how was anysuch agreement made ? Sccondty, did the dispossession brought aboutby the high-handed invasion of the Estate on 20th February 19G2prevent the appellant from effecting repayment or reimbursement outof the proceeds of the Estate ? Xo payment in reduction of the Bankloan had been made since 12th January 1961 and only one payment(a payment of about Rs. 1,1 IS) had been made into the joint currentaccount since that date. If the appellant had remained in possession,would ho in any case have made any repayment or reimbursement outof the proceeds of t he Estate ? If not, the dispossession did not preventhim from doing so. Also, was the dispossession permanent ? Theanswer to issue Xo. 17 shows that the appellant took steps to regainpossession of the Estate. If he had not decided to settle the dispute byentering into the written agreement of 2nd March 1962, perhaps hewould have been able to regain possession. Thirdty, what was theposition to be as between the appellant and the Bank ? The Bank was theprimary creditor for Rs. 125,000. The wrongful dispossession effectedby Mr. and Mrs. Marley would not deprive the Bank of any of its rightsagainst the appellant. These are some of the questions which wouldhave to be decided—and decided in favour of the appellant—before thissecond contention put forward on behalf of the appellant could succeed.There may well be other questions on which decisions would berequired.
H. N. G, FERXAXDO, G.J.—Odiris v. And ray as
Consequently this is not a suitable case for admitting new contentions,not put forward in the Courts below. It could not succeed on the.materials now available.
Their Lordships will humbly advise Her Majcst}' that the appeal should',be dismissed. The appellant must pay the respondent’s costs.
D. P. MELLARATCHY, Appellant, and J. A. NAIDOO, Respondent