Hettigoda Industries v Wijesurendra
GAMAGE AND ANOTHERSUPREME COURTFERNANDO, J.
ISMAIL, J. ANDWEERASURIYA, J.
S.C. APPEAL 83/97
C. COLOMBO NO.4147/ZL16 JUNE , 2003
Vindicatory Action – Whether the plaintiff's claim may be defeated by a settle-ment made by the plaintiff's father with the defendant in a previous action forejectment of the defendant.
The plaintiff-appellant (the plaintiff) sued the defendant for a declaration of titleto the land and premises in suit. The defendant was the tenant of the saidpremises under the plaintiff's father as landlord from 1958. The land andpremises were owned by the plaintiff's mother N.B. from 1937 until 1981 whenN.B. gifted it to the plaintiff in 1981. Previously the premises was in the pos-session of L.B. the plaintiff's father who let it to the original defendant.
L.B. sued the original defendant in DC Colombo case No 2280/RE for eject-ment on the ground of arrears of rent.
In 1975 that action was settled before the District Judge on terms according towhich the arrears of rent would be paid by the defendant; and L.B. undertookto sell the property to the defendant for Rs.70,000/-. The defendant paid thearrears of rent and deposited Rs.70,000/- in court. However, the property wasnot sold to the defendant until the plaintiff's mother gifted it to the plaintiff, in
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1981. Consequently, the defendant remained in possession of the propertyuntil 1982 when the plaintiff sued the defendant for a declaration of title andejectment. In his answer the defendant took up the position that he was in law-ful occupation of the premises having made payments in terms of the settle-ment in case No.2280/RE.
The District Judge decided in favour of the plaintiff but the Court of Appealreversed that judgment.
The father of the plaintiff acted as the agent of the mother in giving an under-taking to the District Court in case NO.2280/RE, the tenancy case. The settle-ment was binding on the father, and the mother as principal.
In the circumstances the plaintiff was not entitled to judgment against thedefendant in the vindicatory action.
APPEAL from the judgment of the Court of Appeal.
L.C. Seneviratne, P.C. with Laxman Perera and Ranil Prematilake for plaintiff-appellant.
P.A.D. Samarasekera, P.C. with Manohara de Silva for substituted defendants-respondents.
October 21, 2003
ISMAIL, J.The land and premises in suit bearing assessment No.480,Nawala Road, Rajagiriya were owned by Mrs. N.M. Bandaratilake,the mother of the plaintiff-respondent-appellant (hereinafterreferred to as the plaintiff-appellant) under and by virtue of deedNo.2204 dated 28.7.1937. The defendant-appellant-respondent(hereinafter referred to as the defendant-respondent) was in occu-pation of the said premises since 1958 as the tenant under herhusband C.O.L.B. Bandaratilake. He instituted an action as thelandlord against the defendant-respondent in District Court,Colombo, Case No.2280/RE, seeking to eject him and claimingarrears of rent and damages.
The case was settled by the parties on 15th August 1975.According to the terms of settlement, in addition to the payment ofarrears of rent and damages, the plaintiff-appellant's father agreedto sell and the defendant-respondent agreed to purchase the
Bandaratilake v Gamage and Another
premises for a sum of Rs. 70,000/- and, if the said sum of moneywas deposited on or before 31.12.77, he was entitled to remain inpossession without making any further payment until a deed oftransfer was executed in his favour. The plaintiff-appellant's fatherrepresented to court and to the defendant-respondent that althoughhis wife was the lawful owner of the premises, he had the authorityto enter into the said terms of settlement and he signed the recordafter the terms were recorded.
It is common ground that the defendant-respondent has paid thearrears of rent and has deposited the sum of money agreed uponin court on 9.6.77 and has continued to occupy the premises with-out making any payment thereafter. The deed of transfer has notyet been executed in his favour.
The attorney-at-law for C.O.L.B. Bandaratilake informed thedefendant-respondent by a letter dated 19.7.77 (D7) that, althoughhe is the landlord of the premises, his wife Mrs. N.M. Bandaratilakewho is the owner of the premises is not willing to sell the property.
Thereafter, the landlord C.O.L.B. Bandaratilake instituted anoth-er action bearing No. 3004/RE in the same court seeking to ejectthe defendant-respondent. That action was dismissed by a judg-ment dated 20.11.1980 in which it was held that the parties werebound by the terms of settlement and decree entered in the previ-ous action No. 2280/RE referred to above.
Mrs. N.M. Bandaratilake has thereafter conveyed the property toher son, the plaintiff-appellant in this action, by a deed of giftNo.931 dated 25.6.1981. His parents have by a letter dated23.11.1981 (D2) called upon the defendant-respondent to attorn tohim and to pay him the rent of the premises from 1.12.1981.
The plaintiff-appellant gave the defendant-respondent notice toquit on 22.3.1982 and instituted the present action against him, bya plaint dated 9th May 1982, seeking a declaration of title, eject-ment and damages at Rs.3,000/- per mensem from 1.5.1982 on theground of his wrongful and unlawful occupation of the premises.The defendant-respondent filed answer on 2.2.83 maintaining thathe is in lawful occupation of the premises having complied with theterms of settlement entered into by him with the plaintiff-appellant'sfather in DC Colombo case No.2280/RE and that he has thus
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become entitled to a transfer of the said property. However, theDistrict Court held with the plaintiff-appellant and after trial grantedhim relief as prayed for by its judgment dated 27.4.89.
The defendant-respondent appealed to the Court of Appealwhich reversed the said judgment of the District Court by its judg-ment delivered on 20.12.96.
The present appeal is with leave granted by this Court on5.6.97. from the judgment of the Court of Appeal, on the principal 60question of law as to whether the father of the plaintiff-appellantacted as the agent of his wife in entering into the said terms of set-tlement in DC Colombo Case 2280/RE with the defendant-respon-dent and, if so, whether the said terms are now binding upon theplaintiff-appellant.
Meanwhile, the defendant-respondent died on 14.7.1998 whilethis appeal was pending and steps have been taken to substitutethe present defendants-respondents as parties.
It was submitted on behalf of the plaintiff-appellant that his moth-er who was the title holder was not a signatory to the settlement 70and that there was no oral or written evidence which expresslyauthorised his father to act as her agent. It was also contended thatthe letter dated 19th July '77(D7) by which the defendant-respon-dent was informed that she was not prepared to sell the propertywas an indication that she never undertook to do so, and that shehas not ratified the executory agreement embodied in the settle-ment.
Learned counsel for the defendant-respondent pointed out thatthe plaintiff-appellant's father had expressly stated in D.C. ColomboCase No.2280/RE that he had the authority of his wife to enter into sothe settlement and that the binding nature of that settlement wasreaffirmed in the second action D.C. Colombo Case No. 3004/REinstituted by the plaintiff-appellant's father. This judgment was deliv-ered on 25.11.80 more than five years after the settlement wasentered into by the parties.
The Court of Appeal has held that the District Court was in errorin holding that the father of the plaintiff-appellant acted without theknowledge of his wife, who was the title holder, in entering into a
Bandaratilake v Gamage and Another
settlement in regard to the property in the previous caseNo.2280/RE. It affirmed the right of the deceased defendant-respondent to continue to be in occupation of the premises withoutmaking any payment until the plaintiff-appellant's mother executeda deed of transfer in his favour.
The deceased defendant-respondent was admittedly the lawfultenant when the father of the plaintiff-appellant instituted actionNo.2280/RE as the landlord of the premises for ejectment andarrears of rent. He had agreed to sell and the tenant had agreed topurchase the premises for a sum of Rs.70,000/- payable before31.12.77. and, admittedly, the consideration has been deposited incourt on 09.06.77. The tenant has also paid arrears of rent and interms of the settlement, he had the right to be in occupation with-out making any further payment until a deed of sale was executedin his favour.
Although the father of the plaintiff-appellant had represented tocourt that he had the authority of his wife, the title holder, to enterinto the said terms of settlement, a distinction must be drawnbetween possession and title when considering the terms of settle-ment. While the authority of the plaintiff-appellant's father extendedto dealing with the possession of the property, it did not extend todisposing of the title thereto.
Where a settlement deals with a subject matter different to ormore extensive than the subject matter of the suit and affects therights of a third party, it is desirable that the court should obtain anunequivocal manifestation of that third party's consent if the partiesare to be bound by the settlement.
Although the plaintiff-appellant's father was not the agent of hismother in relation to the alienation of the property, he was never-theless her agent in relation to the possession of the property. Thusthe settlement was binding on the father and the mother, as theprincipal, in relation to the payment of the arrears of rent and dam-ages and the right to remain in possession. Having complied withthe terms of settlement in regard to the deposit of the money, thedefendant-respondent and his successors in title became entitledto remain in possession of the premises indefinitely and he was nolonger a tenant. His refusal to attorn to the plaintiff-appellant is
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therefore irrelevant. Further, the plaintiff-appellant's mother had thepaper title to the property subject to the right of the defendant-respondent to remain in occupation indefinitely without making anyfurther payment. The gift of the property to the plaintiff-appellantfrom his mother did not give him greater rights than that which his 130mother had.
We, therefore, affirm the judgment of the Court of Appeal andhold that the father of the plaintiff-appellant acted as the agent ofhis mother to the limited extent as explained above in relation to theposession of the property.
The appeal is dismissed. We award the substituted defendants-respondents costs in a sum of Rs.30,000/- in all three courtspayable on or before 1.3.2004. However, if the substituted defen-dants-respondents tender a deed of transfer at their expense on orbefore 31.12.2003 reciting as consideration the sum of Rs.70,000/- 140already deposited – the draft deed to be approved by court if dis-puted by the plaintiff-appellant – and if the plaintiff-appellant exe-cutes the deed of transfer on or before 28.2.2004, no costs wouldbe payable.
FERNANDO, J.I agree
WEERASURIYA, J.- I agree