( 97 )
Present Bertram C.-J. and Schneider J.
SILVA et at. v. BANDA et al.
457—D. C. Kandy, 30,855
Lease—Claim for compensation for improvements.
A lease by a trustee of a Buddhist temple provided that '' the
lessee shall not have any claim for compensation against thelessor for or on account of any alleged expenses or on any accountwhatsoever at any time, but in the event of his having put up anyadditional buildings of a permanent nature, he shall have . theOption of a renewal for another ten years.” The lessee builttenements in place of those condemned by the Municipal Council.Plaintiff claimed compensation in respect of these buildings. TheDistrict! Judge awarded compensation Ks. 2,500, and a furthersum of Bs. 80 per month as damages till payment of compensation,on the ground that the lessee was entitled to retain possession tillpayment, but that he had lost possession by the act of thedefendant.
Held, (1) that the lessee had no jus retentionis, and was notentitled to claim damages.
That as the lessee was not given the right of exercising theright of option of renewal of the lease, he was entitled to claimcompensation.
The lessee – was entitled to claim compensation, although the■ buildings put up by him were not additional buildings.
“ The lessee is not restricted in his right to' recover compensationby the terms of his (Ovenant. His right is a general one: He isentitled to recover compensation in respect of improvements whichwere acquiesced in by his lessor.”
HIS action was founded on a deed of lease dated September 30,1912 (P 1), granted by the first ^defendant as trustee of the
Nat a Dewale in Kandy to the plaintiff’s testator, D. C. de Silva, foran allotment of land. The term of this lease was ten years, subjectto the condition that the lessee should not, at any time, make anyclaim for compensation on account of any expenditure incurredby him, or on any other account whatsoever, and coupled with acovenant that the lessee, should be entitled to a renewal of the leasefor a further term of ten years, on the same terms as to rent, in theevent of his putting up additional buildings of a permanent nature.
The case for the plaintiffs was that the lessee put up additionalbuildings of a permanent nature at a cost of Bs. 6,000, but thatthe first defendant had,, in contravention of his convenant, executeda new lease in favour of the second defendant. The plaintiffs
asked for a decree compelling the first defendant to grant a renewalof the lease for., a further term of ten years at the same rate of rentas that reserved by the former lease, which expired on July 31,J922, namely, Bs. 210 per annum, and for the ejectment of thedefendants with damages at the rate of Bs. 1,000 per annum fromAugust 1, 1922. In the alternative, the plaintiffs prayed thatiathe event of a renewal of the lease being refused, the first defendantmay be decreed to pay .to them a sum of Bs. 5,000 as the value ofthe buildings erected by the lessee* together with damages at therate of Bs. 1,000 per annum.
The first defendant took exception to the covenant for renewingthe lease as being ultra vires of his powers as trustee, on the groundthat such a covenant contravenes section 27 of the Buddhist *Temporalities Ordinance of 1905. The first defendant furtherdenied that the lessee put up additional buildings of a permanentnature on the leasehold premises. On the contrary, the firstdefendant alleged that the lessee erected only a row of foursmall additional buildings which are insanitary and in a ruinouscondition. •
The learned Judge of the Court below has rightly held that thecovenant in the deed of lease for renewal was ultra vires and cannotbe enforced. But the learned Judge found, as a fact, that thelessee had pulled down ten of the old tenements and built six newones on the site of” those which were pulled down, and that thelessee also built eight tenements on the site o( the old tenementwhich bore assessment No. 102.
On these findings the learned Judge decided that the plaintiffswere entitled to recover from the first defendant a sum of Rs. 2,500as compensation, and also damages at the rate of Bs. 80 per mensem.
The District Judge (P. E. Pieris, Esq.) held as fallows:—
1 hold’ that fourteen tenements, such as were contemplated in thelease bond, were built by tho lessee within tbe period of bis lease, andthat he thereby became entitled to the option of renewal which ismentioned in the lease.
The lease was due to expire on July 31, 1922, and on October 31„1918, tbe lessee sub-let the tenements to the second defendant for aperiod of five years on the informal document P 6. Tbe rent reservedon this was Bs. 1,500 a year, whereas tbe lessee on P X was only payingBs. 210 a year. It is obvious that the lessee contemplated a renewalof the lease, and also that it was very much to his advantage to obtainsuch a renewal, for, in addition to the rent, the sub-lessee was to payrates, taxes, conservancy, fees, and* for repairs. The lessee, therefore,approached the trustee and demanded a renewal, hut this the trustee'refused. ….. It must be. conceded that the covenant wasultra vtfe$< and that it is open to a trustee to plead that his act .wasultra vires and that he cannot be bound down by it. I must hold that,the trustee cannot be compelled to renew the lease, and the prayer ofthe plaintiffs to that effect is’ dismissed.
( 99 )
The matter, however, cannot end there. The trustee by his deli-berate mid fonnal act invited the late lessee to erect buildings on theleased land. The latter did so, and the trustee cannot take the benefitof those improvements without reimbursing the party improving theland.
I value the fourteen tenements built by the late lessee at Bs. 2,500,which sum Iorder the firstdefendant ito payto theplaintiff. Thfere
is also a claim to damages. The plaintiffs were entitledto retain
possession tillpayment ofcompensation. They were in possession
through their sub-lessee, and by the act of the first defendant in givingthesecond lease,they have been deprived ofthe benefitsofthat
possession to the advantage of the first defendant. . . .
I order the first defendant to pay damages to the plaintiffs at the rate ofBs. 80 amonth from August1, 1922,uptillday. He will further
paylegal intereston the total from this daytillpaymentinfillip
as well as the plaintiff's costs.
The lease P 1 was as follows:—
This indenture of lease made the Third day of September, Onethousand Niue hundred and Twelve, between Afadugalle Tikiri Banda,Basnayake Nilame of Udispattuin Uda Dumbara,in theKandy District
of the CentralProvince of theIsland of Ceylon,Trusteeof the Kandy
Nata Dewale, acting for and- on behalf of the said temple, and herein-after called the lessor of the one part, with the -sanction and concurrenceofthe District Committee of Kandy underthe BuddhistTemporalities
Ordinance, No. 8 of 1905, a copy of which said sanction and concurrenceisannexed to the originalhereof,midPanditaratnaGamage Don
Charles de Silva of New Home, Wel&ta, in the Gangawata korale ofYatinuwara.in theDistrict ofKandy aforesaid,and hereinafter called
the lesse? °f the other part, witnesseth:%
That forand inconsiderationof thesumofBupees Two thousand
andOne hundred, being therent forthewhole of theterm hereby
granted, and of the covenants, conditions, and agreements hereinaftercontained on: the part of the lessee, the lessor doth hereby let, demise,andlease unto the lessee, his heirs, &c.,theland and premises following,
to wit:—[Property described]
To hold the said premises' unto the lessee, his heirs, &c., for the termof ten years commencing from the First day of August, One thousandNine hundred and Twelve, and to be fully completed and ended yieldingand payingthereforethe yearlyrent orsumofBupees Two hundred
and Ten, to be paid in advance without any deduction on the First dayof Angust in every year, the first payment for two years having beenmade at the execution of these presents, the next payment to-be made onthe First day of August, 1914, and of each succeeding year
The said lessee or his foresaids shall, from time to time, during thesaid term, when and so often as needs shall require at his own cost, well'and substantially repair and maintain the boundary marks and hedges,mounds, banks, fences, drains, and ditches which indicate the boundariesof the premises hereby demised.v
The said lessee or his foresaids shall not have or make any claim for•compensation against the lessor or his successor or , successors for oron account of any alleged expenses, or on any account whatsoever atany time, but in the event of his having put * up any additional buildingsof a permanent nature, he shall have the option of a renewal for anotherten years at the same rate of rent.
( 100 )
Ty tbe (ongoing covenants, conditions, aod agreements skill bebinding on the lessor end his successor or successors in ottce end thehc$rs, do., of. the lessee hereto.
H. J. G. Pereira, AC (with him H. V. Perera), for the appellants.Drieberg, K.C. (with him D. B. Jayatilleke and Yetheoanam), for
August 1, 1924. Bertram C.J,—
* This is a ease arising out of the Buddhist Temporalities Ordinance.A lease for ten years was granted to the plaintiffs’ testator withan option for a further period of.ten years in the event of his puttingup any additional buildings of a permanent nature on the propertyleased. As a matter of fact, certain permanent works were doneupon the premises; but, at the expiration of ten years,- the trusteeof the temple leased the property to another person, alleging thatthe original lease and option were 'ultra vires. The legal positionso assumed appears to have; been accepted by the plaintiffs. I amby no means sure that they were right in accepting it. But it isnot now necessary to discuss that position. They claim compen-sation in respect of improvements executed by them in theircapacity as lessees.
The learned Judge has entertained their claim, and has giventhem Rs. 2,500 as compensation for improvements' But he hasAlso awarded them a further sum of Rs. 80 per month as damages.This appears to be based upon a supposed jug retentfonis. There is,however, in the circumstances of this case, no jus retentionis. Seepunchirala v. Mohideen.1 One does not understand why thisauthority was not brought to the attention of the learned Judge.So much of his judgment as grants the plaintiffs damages at Bs. 80a month cannot stanch
On the other hand, the appellants challenged the right to compen-sation on two grounds. First of all they draw attention to thecovenant (paragraph 7 of the lease) under which the. lessee renouncedany claim for compensation. That renunciation, ^however, mustbe reed ‘ in conjunction with the terms of the whole paragraph.That paragraph consists of mutually interdependent conditions.The lessee renounced his right to compensation in consideration ofthe condition of the option for a renewal if he puts up any permanentbuildings. The trustee cannot now refute the renewal and insiston the renunciation.
Another ground taken up by the appellants is that the buildingsin this case were not additional buildings of a permanent nature.They contend on the facts that the operations, which are referredto as the erection of buildings of a permanent nature, were merelyrepairs, and that all that the lessee did was to erect four buildings
' (1911) 13 N. L. JR. 193.
ol a worthless description. The learned Judge has found againstthem on the facts, and I see no reason to disturb the learned Judge'sfinding.'
What happened was that fourteen tenements were built in placeof the fourteen tenements whloh had been condemned by theMunicipal Council and which were demolished; the appellantscontend that these are not buildings of the nature referred to inthe covenant. But the lessee is not restricted in his right torecover compensation by the terms of his oovennnt. His right isa general one. He is entitled to reoover compensation in respectof improvements which were acquiesced in by his lessor. The termsof the covenant may be looked at as showing aii expectation thatadditions would be made to the buildings, and an invitation ineffect to the lessee to make additions to the buildings. Iu fact itappears that the trustee was eognizant of the building operationthat were going on. He asserts that they consisted merely of theworthless tenements above referred to. The learned Judge,however, accepted the fact that the trustee must have seen theoperations, but rejects his account of the facts. It appears,however,' that there were these improvements, and that the trusteewas cognizant of what was going on and acquiesced in it-. In thesecircumstances, I think that the lessee was entitled to compensationin respect of the improvements made. The contention of theappellants, therefore, fail on that point.
With regard to the amount of compensation, however, it seemsto me that the calculations of the learned Judge are open to criti-cism. He has accepted the figures of Mr. Spaar. Mr. Spaar valuesthe fourteen tenements in their present condition at Bs. 120 each.It is quite true that he says that the value of all the tenements wasfrom Bs. 4,000 to Bs. 5,000, and the learned Judge has proceededon that figure. I think he has overlooked the fact that Mr. Spaar ishere speaking of all the tenements, including tenements other thanthe fourteen, in respect of which compensation is' payable.We must therefore, adopt the other figure mentioned by Mr. Spaar,namely, Bs. 120 per tenement.
To this Mr. Drieberg objects that this low valuation is attributedby Mr. Spaar to a period of long neglect, and that Mr. Spaar onlysaw the building u year after his client hud relinquished possession.
It is quite clear, at any rate, that a considerable portion of theneglect is attributable to the lessee. No doubt he is entitled to somesmall allowance in respect of the last year. It would be reasonable, 1.think, therefore, to make hint an allowance of Bs. .120. Adding thatto the total, according to Mr.Spaar’s calculation Bs. 1,680, the amountof compensation which the lessee may claim works out at Bs. 1,800.
No doubt the appellants have succeeded in substantially reducingthe amount adjudged against them, but tliev have failed on certainother contentions. Iu the circumstances, 1 think the fairest order
( 102 )
as to costs will be that order of the Court below should be leftundisturbed, and that in this Court each party should pay its owncosts.
I am of opinion that the judgment should be varied, and thatthe amount awarded be reduced to the figure I have indicated.
Schneider J.—I agree.
SILVA et al. v. BANDA et al