A. C. ABDEEN, Appellant, and A. C. M. THAHEER and others, Respondents

087-NLR-NLR-V-59-A.-C.-ABDEEN-Appellant-and-A.-C.-M.-THAHEER-and-others-Respondents.pdf

■ Abdcen t>. il'hahccr
385
[lx the Privy Couxcil]
195SPresent : Lord Oaksey, Lord Morton of Henry ton,
Lord Keith of Avonholm, Lord Birkett andMr. L. M. D. de Silva
A. C. ABDEEN, Appellant, and A. C. M. THAHEER.and others, Respondents
Privy Co ex err. Appeat. No. 20 os 105GS. C. 3S0—D. G. Colombo, 10,175
Contract—Agreement (o sell immovable -properly—Specific performance—Scope ofpurchaser's right to claim it.
The right to claim specific performance of ail agreement to sell immovablejwoperly is regulated in Ceylon by the Roman-Dutch law. Under the Roman-Dutch law (ho prinia facie right of tho purchaser to demand specific performancemay bo excluded by tho terms of tho contract between tho parties, o.g., by termsproviding for a substituted obligation upon tho vendor in tho event of hisfailure to convey the whole property to tho purchaser.
In a contract of purchase and sale of certain house property tho price wasfixed at Rs. 92,000, of which a sum of Rs. 12,500 by way of deposit was paidby the purchaser to tho vendors, who were seven joint owners, and tho balancewas to be paid on tho date of tho completion of tho purchaso. Clauso S of thoagreement provided ns follows :—
“ S. In the event of tho Purchaser being ready and willing to completetho said sale in terms hereof and tho Vendors failing, refusing or neglectingto execute and cause t.o ho executed tho said Deed of Transfer as aforesaidthen and in such case tho Vendor’s shall repay forthwith to tho Purchasertho said deposit of Rs. 12,500 together with interest thereon at five per centumper annum from tho date hereof to date of payment and shall also par’ to thoPurchaser a sum of Rupees Pifteen thousand (Rs. 15,000) as liquidated andascertained damages and not as jjenalty. ”
Clauso 9 further provided that, should tho purchaser fail, refuse or neglectto complete the purchase, ho “ shall pay to tho Vendors a sum of Rs. 15,000 asliquidated and ascertained damages and not as penalty and tho vendors shallrefund to t he purchaser (he said deposit of Rs. 12,500
Of tho seven joint owners, five executed an appropriate deed of conveyancein the purchaser's favour. Tho other two refused to execute any conveyance,and the present action was instituted by tho purchaser against them. Thoonly question for decision was whether the purchaser was entitled to enforcespecific performance against tho recusant defendants.
Held, that the purchaser was not entitled to a decree for specific performance.
A-
-^APPEAL from a. judgment of tho Supreme Court reported in57 N. L. JR. J.-
Stephen Chapman, Q.G., with R.K. Haruloo, for the plaintiff-appellant-.
No appearance for the defendants-respondents,
.Cur, adv. vult.
17-
-hi x
. X. B 3071—1,593 (5/5S)
3S6
LORD KEITH OF AVONHOLM—Abdeen v. Thaheer
February 11, 1958.[Delivered by Lord Keith of Avoxholm]—
This is an appeal from a judgment of the Supreme Court of Ceylon(Gratiaen, J., Pulle, J. and Sansoni, J.) reversing the judgment of theDistrict Court (Sinnethamby, D.J.). The respondents were notrepresented before their Lordships’ Board.
The case arises out of a contract of purchase and sale dated 3rd October,1947, of certain house property in Colombo. The appellant is the pur-chaser. The vendors were seven joint owners of 151 shares out of 192undivided shares of this land. The joint owners of the other 41 shareswere four minors who were not parties to the contract. Their curatorswere subsequent^ authorised by the Court to soil their shares. Of theseven part joint owners, parties to the contract, five executed, on 2ndJanuary, 1948, an appropriate deed of convej-anco in tho appellant’sfavour. The other two refused to execute any conveyance and givevacant possession because they could not get another house. On 17thMarch, 1948, the appellant commenced proceedings in the District Courtof Colombo seeking a decree against these two vendors to execute in hisfavour a conveyance of their share of the premises in question. Beforethese proceedings were taken one of the recusant- vendors had transferredhis share to his minor children without valuable consideration and theywere accordingly made parties to tho proceedings. The District Judgeheld that this transfer was ineffective to interfere with the purchaser’srights. This is not now in question in the case.
The only question before the Board is whether the appellant is entitledto enforce specific performance against the recusant defendants. TheDistrict Court held lie was. The Supreme Court held he was not. Thequestion falls to be determined on the language of the contract consideredin the light of the Koman-Dutch law ruling in Ceylon in the matter ofspecific performance.
The contract, which should be quoted substantially in full, is asfollows :—
“ This Agreement is made Third day of October, One thousandNine hundred and Forty-seven between Abdul Careem MohamedThaheer [and six others] all of No. 43, Barnes Place, in Colombo,in the Island of Ceylon (hereinafter called and referred to as c the saidvendors ’ which term as herein used shall where the context so requiresor admits mean and include the said Abdul Careem Mohamed Thaheer[and the six others], their and each of their respective heirs, executorsand administrators) of the one part and Abdul Cader Abdeen ofColombo aforesaid (hereinafter called and referred to as ' the saidPurchaser ’ which term as herein used shall where the context sorequires or admits mean and include the said Abdul Cacler Abdeen, hisheirs, executors and administrators) of the other part.
Whereas the vendors are seised and possessed of or otherwise welland sufficiently entitled jointly to an undivided One-hundred andFifty-one upon One-hundred and Ninety-two (151/192) parts or shares
LORD KIDITff OF AVO-VITOLM—A Mem r. ’L'hahcer
3S7
from and out of all those premises in the Schedule hereto particularlydescribed.
And whereas Zaimil Abcleen, Uinrua Faiza, Hussain Lafir andAbdul Careem HohamccI Abdul Cadet', (minors.) all of No. 43,Barnes Place aforesaid are jointly entitled to the remaining Forty-oneupon One-hundred and Ninety-two (41/192) parts or shares fromand out of the said premises in the said schedule hereto particularlydescribed.
And whereas the vendors have agreed to sell and to cause to besold and tho Purchaser has agreed to buy the said premises in thesaid schedule hereto particularly described at the price and uponthe terms and conditions hereinafter set forth.
Now this Agreement witnesseth as follows :—
The vendors will sell and cause to he sold and the Purchaserwill subject expressly to the provisions of clauses 4 and 5 hereofbuy the said premises in tho said Schedule hereto particularlydescribed together with all and singular the rights, privileges,casements, servitudes and appurtenances whatsoever theretobelonging or appurtenant thereto or used or enjoyed therewith.
The price shall be the sum of Rupees Ninety-two Thousand(Ps. 92,000/-) of which a sum of Rupees Twelve thousand Fivehundred (Rs. 12,500/-) by way of deposit has beento the
vendors by (ho purchaser (the receipt whereof the said vendorsdo hereby admit and acknowledge) and the balance shall bo paidon the date the purchase is completed. 3
3.Tho sale shall be completed on or before the 31st day ofDecember, 1947, by the Purchaser :
(a) tendering to the Vendors for execution at the office oiHr. John Wilson, Proctor and Notary, 365, Dam Street,Colombo, a transfer in the customary form of the saidpremises hereby agreed to be sold in favour of the Purchaseror his nominee or nominees the same to be attested by thePurchaser’s or his nominee or nominee’s Notary. ThoVendors in and by the said Deed of Transfer shall warrant anddefend the title to the said One-hundred and Fifty-one uponOne-hundred and Ninety-tuo (151/192) parts or shares of the saidpremises in the said Schedule hereto particularly described andenter into other usual covenants.-
paying to tho Vendors and depositing to the credit of curator-ship proceedings in tho District Court of Colombo relating to theestates of tire said minors tire balance purchase price of RupeesSeventy-nine thousand Five-hundred (Rs 79,500/-) and there-upon the vendors shall execute and cause to be executed at thecost and expense of the Purchaser the Deed of Transfer in favourof the Purchaser or Iris nominee or nominees as aforesaid.
3SS
LORD KEITH OF AV024H0L5I—Abdeen v. Thaheer
Vacant possession of the said premises in the said schedulehereto particularly described shall be given by the Vendors tothe Purchaser at least one day prior to the execution of the said
– Deed of Transfer.
■5. The Vendors shall deduce to the satisfaction of the said
Sir. John Wilson a good and indefeasible title to the said premisesin the said schedule hereto particularly described.
G. The purchaser shall give to the Vendors at least 7 days’notice of the date on -which the Purchaser intends to complete thesale so as to enable the Vendors to give to the Purchaser vacant-possession as aforesaid of the said premises in the said schedulehereto particularly described.
In the event of the Purchaser dying prior to the said 31st-day of December, 1047, these presents shall stand cancelled anddetermined and the Vendors shall forthwith pay to the legalrepresentatives of the Purchaser the said deposit- of RupeesTwelve-thousand Five-hundred (Rs. 12,500).
In the event of the Purchaser being ready and willing tocomplete the said sale in terms hereof and the Vendors failing,refusing or neglecting to execute and cause to be executed thesaid Deed of Transfer as aforesaid then and in such case theVendors shall repay forthwith to the Purchaser the said depositof Rupees Twelve-thousand Five-hunched (Rs. 12,500) togetherwith interest thereon at five per centum per annum from thedate hereof to date of payment and shall also pay to t-lie Purchasera sum of Rupees Fifteen-thousand (Rs. 15,000) as liquidated andascertained damages and not as penalty.
In the event of the Vendors deducing a good andindefeasible title to the satisfaction of the said Mr. John Wilsonand being ready and willing to execute or cause to be executedprior to the 31st day of December, 1947, the said Transfer andto give vacant possession as aforesaid and the Purchaser failing,refusing or neglecting to completo the purchase as aforesaid thePurchaser shall pay to the Vendors a sum of Rupees Fifteen-thousand(Rs. 15,000/—) as liquidated and ascertained damages and notas penalty and the Vendors shall refund to the Purchaser the saiddeposit of Rupees Twelve-thousand Five-hundred (Rs. 12,500/-). ”
In the admirable judgment of Mr. Justice Gratiaen, there appears thispassage, which their Lordships entirely accept :
“ In this country, the right to claim specific perforinance of anagreement to sell immovable property is regulated by the Roman-Dutch law, and not by the English law. It is important to bear inmind a fundamental difference between the jurisdiction of a court tocompel performance of contractual obligations under these two legalsystems. ‘ In England, the only common law remedy available to a
LORD KEITH Ob' AVOXHOLM—Abdcen v. Thahecr
3S0
party complaining of a breach of an executory contract was to claim-damages, bub the Courts of Chancery, in developing the rules ofequity, assumed and exercised jurisdiction to decree specific perform-ance in appropriate cases. Under the Roman-Dutch law, on theother hand, the accepted view is that every party who is ready tocarry out his term of the bargain prima facie enjoys a legal rightto demand performance by the other part}' ; and this right is subjectonl}' to the over-riding discretion of the Court to refuse the remedyin the interests of justice in particular cases. ”
Proceeding from this starting £>oint the learned judge reaches the con-clusion that the prima facie right of the purchaser to demand specificperformance is excluded by the terms of the contract between the parties,particularly by clause 8, which he holds constitutes a substitutedobligation and the sole obligation upon the vendors in the event of thefailure to secure a conveyance of the whole property to the purchaserby' reason of any of the contingencies contemplated by the parties inclause S. He continues in a further passage which their Lordships wouldagain quote in full :
“ It is only in the absence of agreement to the contrary that theRoman-Dutch law confers on a purchaser under an executory con-tract the right to select one of two alternative legal remedies underthe Roman-Dutch law, namely, specific performance or damages.But we have here a categorical stipulation that if the primary obliga-tion is not fulfilled for any reason whatsoever, two specified sumsshall immediately' become due. To my mind, the stipulated returnof the deposit, being part of the purchase price, necessarily impliesthat the primary obligation to sell is then to be regarded as havingcome to an end. This negatives an intention that the purchasercould still demand, if he so chose, specific performance. It is alsosignificant that, when one considers the relevant issue of mutuality,clause 9 provides that, should the purchaser default for any reason,he would, though liable to pay an agreed sum to the vendors asliquidated damages, be entitled to a refund of his earlier deposit.Clause 9 equally denies to the ‘ vendors ’ by necessary implicationthe alternative legal remedy of specific performance. ” –
In his very full and able argument for the appellant hlr. Chapmanurged that clause S stipulated not for an alternative or substituted methodof performance of the contract but only for damages for breach of thecontract and that this was no bar to a decree for specific performance.For reasons, however, which do not materially differ from those whichfound favour with Mr. Justice Gratiaen their Lordships are unable toaccept the contention for the appellant. Their Lordships null state thesereasons shortly under four heads.
First where the right in general of a party to insist on specific perform-ance of his contract or to claim damages is so clear under the Roman-Dutch law, their Lordships have difficulty in appreciating why tiro parties
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390
LORD KEITH OF AVONHOLM—Abdeen v. Thoheer
should introduce into the contract the detailed and meticulous provisionsof clauses 8 and 9 merely to fix the amount of damages in the event ofthe Court finding itself unable or unprepared to give decree of specificperformance. –‘'-
Secondly the general framework of the contract suggests that clauses 7,8 and 9 were designed to introduce modifications of what would otherwisebe, subject to certain minor conditions, the unqualified obligation to sellor cause to be sold the property in question. Clause 7 is a clear modifica-tion of the legal consequences ordinarily following on a contract of sale,and clauses 8 and 9 are capable of a similar interpretation. Each of theclauses relates to a specific event or events which may follow the signingof the contract and provides for the consequences to follow thereon.
. Thirdly clause 8 makes no distinction between failure, refusal, orneglect to execute or cause to be executed the deed of transfer. Thesame consequences are to follow from any of these events. Eailure mighthave proceeded, though in this case it-did not, from the refusal of theCourt to sanction and authorise a sale by the curators of the minor part-owners. In such an event the purchaser’s only remed3r would be underclause 8. The view of the Supreme Court was that this was a substitutedobligation on the vendors who having undertaken to cause a transfer tobe executed would be liable to pay to the purchaser the agreed sum ofdamages. Their Lordships see no reason to dissent from this view andit is impossible in their opinion to differentiate between such a failureand a refusal of one of the parties to execute a transfer which it is to benoted again results in a failure of the other vendors to cause a transferto be executed.
Lastly clause 8 provides that on the occurrence of any of the eventscontemplated the vendors shall repaj' “ forthwith ” to the purchaser thedeposited sum with interest at the rate of five per centum per annum.This in their Lordships’ view points strongly to the construction that inthe events contemplated the bargain for a sale has come to an end andhas been replaced by the pecuniary stipulations in the clause. It isfurther significant, as Mr. Justice Gratiaen points out, that there is acorresponding11 mutuality of obligation on the purchaser in clause 9 inthe event of his failing, refusing or neglecting to complete the purchase.
It remains to notice a contention which may not have been submitted tothe Supreme Court but -which was pressed before their Lordships’ Board.It is expressed in the sixth ground of appeal as follows :'
“ Because even if Clause S be so construed as to mean that thepurchaser’s sole remedy upon default by the vendors was the recoveryof the sum named therein as liquidated damages yet the defaultcontemplated and, indeed, so expressed, was a default by all thevendors rendering them all jointly and severally liable, and not byonly some of them for which all the vendors (i.c. those in default andthose who were not) were to bo liable.
Spcldcwinde v. De Zoysa
391
In their Lordships’ view this point fails at the outset because in fact therewas a failure on the part of all the vendors, as has already been indicated,either to execute or “ to cause to be executed ” the deed of transfer. Buttheir Lordships think that in a 113' event a refusal or failure by one vendorwould be sufficient to bring tho clause into operation.'
Por these reasons their Lordships will humbly advise Her Majesty thatthe appeal should be dismissed..
Anneal dismissed.