AMERASINGHE, J. ANDWIJETUNGA, J.
S.C. APPEAL NO. 63/94
A. NO. 140/87.
C. COLOMBO NO. 6039 RE.
Landlord and tenant – Payment of rent under section 21 of Rent Act – Payment toauthorized person.
The plaintiff’s mother after an unsuccessful attempt to evict the defendant giftedthe tenanted premises to her daughter the plaintiff. The defendant was dulyinformed of this by the plaintiff’s lawyer and the lawyers who attested the deed,but the defendant called for a copy of the deed from the plaintiff’s mother andreceiving no response continued to deposit the rent in the Municipality in favourof the plaintiff's mother. The plaintiff filed this suit in August 1984 and summonswas ordered on 13.11.84. On 14.11.84 the defendant delivered to the Municipalityrent for September and October 1984.
The defendant was not Justified in not paying rent to the plaintiff. A requestfor the documents may have been justified if conflicting claims were beingmade as for instance by persons claiming under a Last Will, intestacy, anddonation. This was not one of those instances.
The Municipal Council cannot transmit money orders (or other documentssuch as cheques) made out in favour of one person to another.
The defendant has not complied with the requirements of section 21(1) ofthe Rent Act whereunder the tenant must pay the rent to the authorized person.A payment to the authorized person means, prima facie, an actual payment tohim i.e. one which augments his funds. Section 21(3) requires him to transmitthe amount of such payment to the landlord; this means prima facie that hemust make a payment to the landlord and not merely transmit the documentdeposited by the tenant.
The purpose of section 21 is not to substitute the authorized person for thepostal services, or other means of delivery or tender of rent payments (whether
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made by cheque, money order or otherwise). The purpose is to prevent atenant who wishes to pay rent to the landlord being placed in a real difficultyor dilemma – as where the landlord refuses or evades the acceptance ofrent, or there is uncertainty as to who the real landlord is. In those situations,a payment by the tenant which augments the funds of the authorized personis equivalent to a payment to the landlord.
Per Fernando, J.
The tender to, or deposit with the authorized person of money orders, chequesor other instruments made out in favour of someone other than the autho-rized person is not, properly speaking, a payment to the authorized person.However, it is arguable that such instruments are also within the scope ofsection 21, if made out in favour of the real landlord provided that they areduly realised. But if it turns out that the real landlord is not the person inwhose favour such instrument is drawn, then clearly the tenant cannot beregarded as having paid the rent to the landlord of the premises. In case ofdoubt as to who the landlord is, the tenant will be well-advised to pay theauthorized person.
Cases referred to:
De Alwis v. Perera (1951) 52 N.L.R. 433.
Silva v. Muniamma (1955) 56 N.L.R. 357.
De Silva v. Abeyratne (1955) 56 N.L.R. 574.
Perera v. De Costa (1955) 57 N.L.R. 283.
David Silva v. Madanayake (1967) 69 N.L.R. 396.
Perera v. Padmakanthi (1987) 2 Sri L.R. 1.
Subramaniam v. Pathmanathan (1984) 2 Sri L.R. 252.
Seelawathie v. Ediriweera S.C. 65/87 – S. C. Minutes of 3.11.89.
Perera v. De Saram S. C. 27/92 – S.C. Minutes of 26.10.93.
Perera v. De Silva (1988) 1 Sri L. R. 351.
APPEAL from judgment of Court of Appeal.
Faisz Mustapha P.C. with Hemasiri Withanachchi for Plaintiff-Respondent-Appellant.
S. Mahenthiran for the Defendant-Appellant-Respondent.
Cur. adv. vult.
Violet Perera v. Asilin Nona (Fernando, J.)
This appeal involves a question of law as to how a tenant shouldpay rent under section 21 of the Rent Act, No 7 of 1972.
The original landlord of the premises in suit failed in an action toeject her tenant, the Defendant-Appellant-Respondent (“the Defen-dant"). Within a month, A. W. de Silva, Notary Public, acting on be-half of the original landlord, wrote a letter dated 16.12.82 to the De-fendant informing her that the landlord had gifted the premises to herdaughter, the Plaintiff-Respondent-Appellant ("the Plaintiff”) by DeedNo. 293, dated 8.12.82, attested by himself, and asking her to attornto, and pay rent to, the Plaintiff . A similar letter dated 17.12.82 waswritten to the Defendant, by a lawyer acting on behalf of the Plaintiff.
The original landlord, by a letter dated 12.1.83, informed the Mayorof Colombo (the “authorized person” as defined by section 21(4) ofthe Rent Act) that the premises had been transferred to the Plaintiff,and that the tenant had been duly notified; she asked that the Plaintiff'sname and address be substituted as the landlord entitled to receivethe rent of the premises. She copied this letter to the Defendant.
On 25.1.83 an Attorney-at-Law replied on behalf of the Defendantto the letter of 16.12.82. However, he wrote to the original landlord,and not to A. W. de Silva, N.P. He asked for a certified copy of thedeed for perusal, saying that his client had instructed him to makethat request; he gave no other reason for this request, and did noteven hint at any uncertainty about the transaction.This letter was notcopied to the Plaintiff, nor was the Plaintiff asked for a copy of thedeed, by that or any other letter. There was no response to this letter.
It is common ground that (a) in respect of the period January 1983to August 1984, the Defendant delivered to the Municipal Council,money orders in favour of the original landlord, (b) the Municipal Coun-cil issued receipts to the Defendant in which the Plaintiff's motherwas described as landlord, and (c) these money orders were neithersent to the Plaintiff by the Municipal Council nor claimed by her.
The Plaintiff filed action for ejectment in August 1984; on 13.11.84,
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order was made for the issue of summons; and on 14.11.84 the Defen-dant delivered to the Municipal Council money orders in respect of rentfor September and October 1984 made out in the name of the Plaintiff.
When the issues were first framed, the Plaintiff proceeded on the ba-sis that she was entitled to ejectment because the Defendant had failedto attorn. However, thereafter an issue was framed on the basis of ar-rears of rent. It is on that issue that the trial and the appeals in bothCourts proceeded.
No submission has been made on the question of attornment. It issettled law that a tenant’s continuation in occupation of the rented premises,after receiving notice of the transfer and of the transferee’s election torecognise him as the tenant, constitutes an exercise of the tenant’s optionto acknowledge the transferee as the landlord; that the tenant thereuponbecomes liable to pay the rent to the transferee; and that on default, thetransferee is entitled to sue the tenant for rent, damages and ejectment:see De Alwis v Perera,™ Silva v MuniammaP De Silva v Abeyratnd®,Perera vde Costal®, David Silva vMadanayake2 * * (S), PereravPadmakanthl6>.Subramaniam v Pathmanathan.w and Seelawathie v Ediriweera.™
The only question that was argued, in both Courts, was whether theDefendant had duly discharged her obligation to pay rent, for the periodJanuary 1983 to August 1984, by tendering to the Municipal Council moneyorders in the name of the original landlord. It is agreed that if this does notconstitute due payment of rent to the Plaintiff, under and in terms of section21 of the Rent Act, the District Court was right in giving judgment for thePlaintiff (for rent, damages and ejectment), and that the Court of Appealought not to have reversed that judgment.
Section 21 provides:
21.(1) The tenant of any premises may pay the rent of the premises tothe authorized person instead of the landlord.
(2)Where any payment of any rent of any premises is made on any day
in accordance with the provisions of sub-section (1), it shall be deemed to
be a payment received on that day by the landlord of the premises from
the tenant thereof.
Violet Perera v. Asilin Nona (Fernando, J.)
• (3) Where the rent of any premises is paid to the authorized person,the authorized person shall issue to the tenant of the premises a receiptin acknowledgement of such payment, and shall transmit the amount ofsuch payment to the landlord of the premises. It shall be the duty of suchlandlord to issue to the authorized person a receipt in acknowledgementof the amount so transmitted to him.
In this section, "authorized person", with reference to any premises,means the Mayor, or Chairman of the local authority within whoseadministrative limits the premises are situated or the person authorized inwriting by such Mayor or Chairman to receive rents paid under this section,or where the Minister so determines, the Board of the area within whichthe pemises are situated.
Learned Counsel for the Defendant submitted that;
The Defendant was entitled to continue to pay rent to the originallandlord until she was given a copy of the deed, because she was naturallyapprehensive about this transaction occurring so soon after an unsuccessfulattempt to eject her; he concedes, however, that in her evidence she neithergave such a reason for this request, nor explained why she had suddenlystarted making payments in the name of the Plaintiff in November 1984;
The original landlord’s letter of 12.1.83 constituted a direction to theMunicipal Council to transmit payments of rent to the new landlord, thePlaintiff; and that the defendant was not in default – the default, if any, wasthat of the Municipal Council, which failed to transmit the payments to thePlaintiff; and
In any event, the tenant’s obligation under section 21 was satisfied,even if the rent had not actually been transmitted to the landlord. Since ithas been held in Perera vde Saram, that the mere deposit of rent, evenwithout specifying the name of the landlord, was sufficient, it follows thatthe tender of the money orders in the name of the original landlord wasalso sufficient.
In this case the three letters which the Defendant received, between16.12.82 and 12.1.83, were perfectly clear and quite unambiguous. It isdifficult to understand why her lawyer asked for a copy of the deed. If he
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really required it, he. should have asked either the Plaintiff, who, as thedonee, would have had the original in her possession, or A. W. de Silvathe Notary who had attested it. Instead he chose to ask the donor, whohad no further interest in the matter; as far as she was concerned, shehad done her duty by informing her tenant of the transfer, and her failureto reply, or to furnish a copy of the deed, cannot be held against thePlaintiff.
Further, it should have been obvious to the Defendant's lawyer that theDefendant ran no risk whatever in paying rent to the person designated bythe original landlord. If in fact the premises had not been transferred, theoriginal landlord would have been estopped from claiming that the Defendanthad fallen into arrears simply because she had paid rent as directed by theformer. If the premises had been transferred, payment to the transfereewas in order.
I therefore cannot accept the submission that the Defendant was justifiedin not paying rent to the transferee pending clarification. A request for thedocuments may have been justified if there had been some doubt as tothe Plaintiff’s right to receive the rent: such doubts may have arisen, forinstance, upon the death of the landlord if conflicting claims were thenmade, by persons claiming under a last will,, intestacy, and donation,respectively. This is not one of those instances.
I hold that the Defendant was not entitled to continue to treat the originallandlord as her landlord, or to pay rent to her.
Learned Counsel's second submission is wholly without merit The letterof 12.1.83 cannot possibly be treated as a direction to the Municipal Councilto accept money orders in the name of the original landlord, and to transmitthem to the new landlord. It was plainly a notification that the transfereeshould be substituted, in all respects, as landlord. In any event, anyuncertainty in this respect was not created by the Plaintiff, and cannot beheld against her.
Equally, the Municipal Council cannot be blamed for not transmittingmoney orders (or other instruments) such as cheques, made out in favourof one person, to another. That would not only have been improper, butmight even have resulted in allegations of misappropriation. Further,money orders in her mother's name would have been of no use to the
Violet Perera v. Asilin Nona (Fernando, J.)
Plaintiff. Learned Counsel submits that the Plaintiff could have returnedthose money orders to the Defendant and obtained replacements. That,however, is not the object of section 21. If that was what the Defendantwanted, much time and energy could have been saved by making pay-ments to the Plaintiff directly, in the first instance.
Finally, the Defendant has not complied with the requirements of sec-tion 21(1). That section requires the tenant to “pay” the rent to the “au-thorized person”. A payment to the authorized person means, prima fa-cie, an actual payment to him, i.e. one which augments his funds. He isthen required by section 21 (3) to “transmit the amount of such paymentto the landlord; this means prima facie, that he must make a payment tothe landlord, and not merely transmit the document deposited by thetenant.
In the case of a payment to the authorized person, the tender of acheque, if issued wihout funds or if payment is stopped, will obviously notconstitute a payment in terms of section 21 (1); and the landlord will thereforenot be deemed, under section 21 (2), to have received payment of the rent.
The purpose of section 21 is not to substitute the authorized person forthe postal services, or other means of delivery or tender of rent payments(whether made by cheque, money order or otherwise). The purpose is toprevent a tenant who wishes to pay rent to the landlord being placed in areal difficulty or dilemma – as where the landlord refuses or evades theacceptance of rent, or there is uncertainty as to who the real landlord is. Inthose situations, a payment by the tenant which augments the funds ofthe authorized person is equivalent to a payment to the landlord.
While this question was not expressly discussed in Perera vde Sararrf3*,it would seem that the payment in that case was to the authorized person:Dheeraratne. J. observes that the landlord's name was not entered in thereceipts or in the Rent Register.
However, it has been held that section 21 should not be construed in anunduly narrow and technical manner: Perera vde Silva,m. The tender to,or deposit with the authorized person of money orders, cheques or otherinstruments, made out in favour of someone other than the authorizedperson, is not, properly speaking, a payment to the authorized person.
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However, it is arguable that such instruments are also within the scopeof section 21, if made out in favour of the real landlord provided that theyare duly realised. But if it turns out later that the real landlord is not theperson in whose favour such instrument is drawn, then clearly the tenantcannot be regarded as having paid the rent to the landlord of the pre-mises. In case of doubt as to who his landlord is, the tenant will be well-advised to pay the authorised person.
Here there was no doubt as to the person entitled as landlord, to therent as from January 1983: by tendering or depositing money orders infavour of the former landlord the Defendant did not discharge her obligationto pay rent in terms of section 21 or the common law. She was thereforein arrears of rent.
The Plaintiff's appeal succeeds. The Judgment of the Court of Appealis set aside, and the judgment of the District Court is restored. The Appellantwill be entitled to costs of appeal in both Courts in a sum of Rs. 5,000.
AMERASINGHE, J. -1 agree.
WIJETUNGA, J. -1 agree.
VIOLET PERRA V. ASLIN NONA