087-NLR-NLR-V-56-D.-H.-S.-AMARASEKARA-Appellant-and-D.-S.-ABEYGUNAWARDENE-Respondent.pdf
GRATIAEN J.—Amaraeekara v. A beygunawardene
361
1955Present : Gratiaen J. and Sansoni J.D. H. S. AMARASEKARA, Appellant, and D. S. ABEYGUNA-WARDENE, RespondentS. C. 198—D, C% Colombo, 23.654JM
Prescription—Action instituted in Court ~of Requests—Claim in reconvention beyondjurisdiction—Transfer to District Court—Date of action in respect of the claim inreconvention—Courts OnRnanoe {flap, f), s. 79—Prescription Ordinance, s. 10,
llent Restriction Ordinance, No, 60 of 1942—Sections 7 and 14— Premium illegally re.ceived by landlord—Bis right to retain it—Illegal contract.
When the Supreme Coortrauthorises under section 79 of the Courts Ordinancea transfer of proceedings from the Court of Requests to the District Court byreason of the claim in reconyention being beyond the jurisdiction of the Court ofRequ ests, the action for the recovery of the claim in reoonvention in excess of thesum which the Court of Requests has jurisdiction to award does not “ com-mence " within the meaning of the Prescription Ordinance until the transfer ofthe proceedings to the District Court has been authorised by the Supreme Court ;in regard to the issue of prescription, the action must be regarded as havingcommenced in the Court of Requests and continued in the District Court inrespect only of those claaps over which the former Court had jurisiliution togrant relief.
Quaere, whether a premium paid by a tenant to his landlord in contraventionof the Rent Restriction Ordinance of 1942 and of the later Act of 1948 isrecoverable in every case J – Scope of the applicability of the maxiin in paridelicto potior est conditio dtfendentis considered.
j^iPI’KAL from a judgment of the District Court, Colombo.
//, V. Perera, Q.C., with E. R. S. R. Coomaraswamy, for the plaintiffappellant..
II. ir. Jayeivardene, Q.C., with P. Ranasinghe, for the defendantrespondent.
Cur. adv. wit.
March 18, 11)55. GraTIABN J.—
Tho appellant was the landlord, and tlio respondent tho tenant, of abungalow in Colombo to which the Rent Restriction Ordinance, No. 60 of1042, applied. The landlord sued the tenant in the Court of Requests on15th May, 1950, for the ejectment of the tenant who claimed in recon-vention tho return of certain sums paid by him (a) as rent in excess ofthe authorised amount, and (6) by way of “ premium ” as a condition of thegrant of the tenancy.
The total amount counter-claimed by the tenant far exceeded themonetary jurisdiction of the Court of Requests. Accordingly, he applied16LVI
2J. N. B 44786-1,592 (5/55)
862
GRAT1AEN J.—A maraeekara, t>. Abeygunawardene
for and obtained from this Court on 6th October, 1950, an order undersection 79 of the Courts Ordinance transferring the entire proceedings tothe District Court of Colombo.
Before the trial commenced in the District Court, the tenant had vacatedthe premises, so that only his claims in reconvention called for adjudication.The landlord admitted liability to refund a sum of Rs. 551-88 received byhim in excess of the authorised rent. With regard to the outstandingclaim for the return of the premium, the learned Judge held that the land-lord had exacted a premium of Rs. 1,800 in breach of section 7 of the RentRestriction Ordinance, No. 60 of 1942, and entered judgment in favour ofthe tenant for this amount in addition to the sum of Rs. 551 • 88 admitted tobe due.
The landlord has appealed against that part of the decree which ordersthe repayment of the premium on two grounds :—
that the claim was prescribed;
that in any event, the principle in pari delicto potior est conditio
defendentis precluded the tenant from asking the Court’s aid torecover an illegal payment.
As to the former plea, it is common ground that section 10 of the Pre-scription Ordinance applies, and the learned Judge accepted the evidencethat the premium sought to be recovered had been paid on 3rd September,1947. If, therefore, the action on the claim in reconvention can properlybe regarded as having “ commenced ” when the tenant filed his answer inthe Court of Requests—i.e., on 10th July, 1950, the plea of prescriptionadmittedly fails. On the other hand, Mr. Jayawardene concedes that theclaim was prescribed if 6th October, 1950, is taken as the operative date—that is.to say, if the action for the recovery of the premium did not “ com-mence,” within the meaning of section 10 until the transfer of the pro-ceedings to the District Court was authorised by the Supreme Court.
There are no earlier decisions precisely in point, but we do receive someguidance from Mndiyanse, v. Siriya 1 and more particularly from Kvluthv. Mohamadu 2. Each of these cases was concerned with a “ 247 action ”in which the plaint (originally filed in a Court lacking jurisdiction in thematter) was subsequently filed in the proper Court (the transfer in oneinstance having been authorised by the Supreme Court). It was held inboth cases that, for purposes of prescription, the action “ commenced ”only on the date when the proceedings were initiated in the Court which didhave jurisdiction to entertain the plaint. The ratio decidendi of Abrahams
J.’s judgment in Kuluth’s case (supra) is that an action cannot l>oregarded as having effectively commenced in the fust Court (and continuedin the other) unless the former Court had jurisdiction to give relief uponthe cause of action relied on ; and that an order of this Court authorisinga transfer of the proceedings does not affect the issue in the absence ofspecial statutory provision to that effect.
The learned Judge rejected the plea of prescription in view of the inter-pretation which he placed on the concluding words of the proviso to section79 of the Courts Ordinance—namely, that when the Supremo Court has1 (1921) 23 N. L. R. 285.* (1936) 38 N. L. R. 48.
GRATIAEN J. —Amarattkara v. Abeygunatoardene
303
authorised a transfer of proceedings from a Court of Requests (whichlacks jurisdiction to enter judgment upon a claim "in reconvention)to a District Court (which has such jurisdiction) the proceedings “ shallthereafter be continued and proceeded in (the District Court) as if it had ori-ginally commenced there ”. I find myself unable to accept this view. Inmy opinion, these words are not equivalent to a statutory provision that,upon a transfer, an action shall/or all purposes (including an issue of prescrip-tion) be deemed to have coptmenoed in the District Court on the date onwhich it had in fact commenced in the Court of Requests. On the con-trary, the words relied on by the learned Judge seem to me to be onlyprocedural in their nature : no fresh pleadings need be filed as a prelimi-nary to tho trial in the new Court but the proceedings “ continue ”(in that sense) from the stage at which'they had been interrupted in theCourt of Requests.
In his original answer filed in the Court of Requests, the tenant pleadedcertain facts relating to payments made by him to the landlord—in so farns those facts had a bearing on his defence to the landlord’s claim, the Courtof Requests certainly had jurisdiction to adjudicate upon them ; but in sofar as he further asked for a deoree in his favour for a sum exceedingRs.300 upon his claim in reoonvention based on these fact •, the Court had nojurisdiction to grant liim that additional relief. It is for this reason thatthe tenant obtained the sanction of this Court to have the whole proceeding(comprising tho claims on which the Court of Requests had power to grantrelief as well as those on which it had no such power) transferred to a Court“ having jurisdiction over the whole matter in controversy ”. Thisanalysis seems to me to lead to the following conclusions as far us thoissue of prescription is concerned :—
(1) The action must be regarded as having commenced in the Court ofRequests and continued in the District Court in respect onlyof those claims over which the former Court had jurisdictionto grant relief; these “matters in controversy” were confinedonly to the landlord’s claim for ejectment and damages untilejectment, and the tenant’s claim to recover excess rent (on hisfirst cause of action) limited however to a judgment in his favourfor a maximum sum of Rs. 300 ;
(-) With regard to the outstanding matters in controversy, whichincluded the entirety of the defendant’s cause of action for f-herecovery of the premium, the action cannot be regarded as having“commenced” (within themeaniug of the Prescription Ordinance)in the Court of Requests which had no jurisdiction to grunt himsubstantive relief in the form of a money decree. Therefore,the action for the recovery of the premium effectually “ com-menced ” only in the District Court which alone had jurisdictionto grant him the relief asked for ; it was in u'different sense thatthe action “ continued ” for procedural purposes from an earlierprocedural stage.
The word “ commenced ” appearing in “ unless the same shall becommenced within three years from the time when such cause of action
364
GRATfAEN J:—Amardsekara M. Abtygimaionrdeiie
accrued ” mean “ initiated in a Court possessing jurisdiction to grantrelief in the form of a decree upon the cause of action I would accor-dingly hold that the tenant’s claim in recovention for the recovery ofRs. 1,800 paid as premium was prescribed. The decree in his favourmust therefore be confined to a sum of Rs. 651 • 88 in respect of which noplea of prescription has been raised, together with costs in that class.The appellant is however entitled to the costs of this appeal.
It is no longer necessary to give a definite finding on the landlord'salternative ploa that the Court should not in any event lend its aid to aparty seeking to recover money paid by him in pursuance of an illegaltransaction. In deference to the interesting arguments addressed tous, however, I propose to make some observations on this issue.
Section 7 of tho Ordinance of 1942 prohibited a landlord from demandingor receiving a premium “ as a condition of the grant, renewal or conti-nuance ” of a tenancy of controlled premises, and section 14 prescribesthe penalty for this offence. The Ordinance did not directly penalisepayments of premium by tenants (such as is now done in the later Actof 1948), but no doubt a tenant making a payment which his landlordwas prohibited from receiving under the earlier enactment would generallybo found to have committed the offence of abetment within the meaningof the Penal Code. I therefore agree with Mr. Perera that the judgmentof Pullo J. (Swan J. concurring) in Vitharane v. de Zylva1, which dealtwith a case under the Act of 1948, cannot be distinguished on this narrowground. Whichever enactment applies, the question whether the maximin pari delicto potior eat conditio defendentia should operate or not mustbe decided with duo regard to the facts of the particular case.
Mr. Jayawardene relied strongly on a recent judgment of Devlin J.in Gray and others v. Southouse and another8 in which, under the Englishlaw, a premium paid to a tenant by his sub-tenant was held to be recover-able. It is safer, however, to examine the question solely by referenceto the provisions of our local enactments in the light of the principlesof the Roman-Dutch law.
I am not convinced that a landlord can automatically claim that thein pari delicto principle affords a complete answer to any claim for therecovery of a premium illegally received by him in contravention of theOrdinance of 1942 or of the Act of 1948. The law is not so rigid, and itis quite wrong to assume that, under existing conditions, a tenant makingan illegal payment is necessarily in pari delicto with his landlord whoillegally receives it.
The true principle to be applied in a case of this kind has been explainedby the Appellate Division of the Supreme Court of South Africa in Jajbhayv. Cassim3. The maxim ex turpi causa non oritur actio will, of course,always preclude a litigant from seeking the assistance'of a Court of lawto enforce an illegal contract; but the ancillary maxim in pari delictopotior eat conditio defendentia “ has not, in modern systems of law, beenrigidly and universally invoked to defeat every claim by one of two
» (1954) 56 N. L. R. 57.* (1949) 2 A. E. R. 1019.
(1939) S. A. A. D. 537.
GRATIA KN J.'-—Amarasekara v. Abeygunatvardene
305
delinquents to recover what he has delivered under such a contractThe proper test is whether public policy would best be served by grantingor refusing the plaintiff’s case, and, in applying that test, “ a Courtshould not disregard the various degrees of turpitude in delictual contracts ”.Watermeyer J. said :
“ The principle underlying the general rule is that the Courts willdisregard illegal transactions but, the exceptions show that where itia necessary to prevent injustice'or to promote public policy, it willnot rigidly enforce the general rule.”
The underlying policy of th&Rent Restriction Ordinance of1942 and of tliolater Act of 1948 is to prevent certain abuses in a “ seller’s market ” in-duced by the serious shortageof housing accommodation in certain localities.Both enactments make express provision for the recovery of paymentsillegally received {or illegally paid) by way of excess rent, but they are silentas to the right of a landlord to retain a premium i'legally received by him.This omission docs not convey to my mind that Parliament necessarilyintended a landlord to retain the illegal premium in every case if he waswilling to run the risk of paying a fine or serving a term of imprisonmentprescribed for his offence. On the contrary, Parliament was content toleave issues arising on a tenant’s claim to recover the money to bedecided in accordance with the principles of the general law.
1 can well conceive of cases where, in the context of rent restriction legis-lation, public policy would require a landlord to refund the illegal premium..Similar^', I can conceive of cases where the tenant ought not to bo allowedto claim the money back. An illustration of the former case is when arapacious landlord exacts an illegal payment from a person who is des-perately in need of a house, and who cannot find shelter for himself and hisfamily unless he submits to the illegal terms exacted by the landlord. Anillustration of the converse case is where a wealthy person in search of ahouse puts temptation in the way of a landlord by offering him a “ bribe ”in order to obtain preference over other prospective tenants. The properway to promote public policy and to administer justice between man andman is to give careful consideration to the circumstances of the particularcase instead of applying an inflexible rule of law.
/
In the present case, the learned Judge took the view that the ra<^ieyought to be refunded because “ the landlord had taken undue advantageof the tenant’s need for a house and exacted from him a sum of Rs. 1,800notwithstanding the statutory prohibition ”. If the evidence on recordjustifies that inference, I would be disposed to say that public policy wouldbe better served by compelling the landlord to return his ill-gottengains. However, as the Claim is prescribed, this question need not bepursued further for the purposes of the present appeal. But landlordswould bo unwise to assume that Vitharanev. de Zilva (supra) has finallysettled the law' in their favour on the other issue.
Sansoni J.—T agree.
Appeal allowed.