FAUZ v. GYI AND OTHERS

044-SLLR-SLLR-1999-V-3-FAUZ-v.-GYI-AND-OTHERS.pdf


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Fauz v. Gyi and Others
345
FAUZ
v.GYI AND OTHERS
COURT OF APPEALWIGNESWARAN, J„JAYAWICKREMA, J.
A. NO. 126/98.
CALA NO. 27/98.
C. COLOMBO NO. 5251/ZLSEPTEMBER 10, 1998.
Civil Procedure Code – S. 763, s. 763 (1) – Judicature Act s. 23 – Writ pendingappeal – Substantial loss – Substantial questions of Law.
Held:
Lack of material before Court regarding monetary or economic loss enuresto the benefit of the plaintiff-respondent.
Questions of law arising for determination must be substantial in relationto the facts of the case at hand.
A prospective purchaser placed in possession of a premises was at besta licensee or a permissive occupier and cannot be equated to that of atenant. Once the defendant-petitioner refused to accept Thaha as hislandlord he forfeited his right to be called a tenant.
APPLICATION in Revision from the Order of the District Court of Colombo.
Perera v. Gunawardene – Bar Association Law Journal – 1991 v. IVparts 1-7.
Mack v. Shanmugam – Sri Lanka Law Report vol. Ill-part8page 89.
Saleem v. Balakumar- [1981] 2 SriLR. 74.
Kandasamy v. Gnanasekaram – CALA No. 78/81 – CAM 17.7.81.
Cassim Hadjiar v. Umamlewe – 67 NLR 22.
Imbuldeniya v. D. DeSilva – [1987]1 Sri LR, 367.
Swami Sivagnanandav. The Bishopof Kandy – 35NLR130.
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P. Nagendra, PC with S. H. M. Saheedu for defendant-petitioner.S. Mahenthiran with Ms. P. Narendran for plaintiff-respondents
Cur. adv. vuft.
April 29, 1999.
WIGNESWARAN, J.
The original plaintiff's father, one Mohamed Naina Marikar MohamedThaha was, inter alia, declared entitled to premises No. 328, Old MoorStreet, Colombo 12, the subject-matter of this action, in DC Colombocase No. 8207/L. The defendant to the said case was Abdul MajeedMohamed Zaneek. While declaring title in M. N. M. M. Thaha thepayment of a sum of Rs. 27,308 was ordered to be paid to the saidA. M. M. Zaneek which was duly paid to the latter by the former.
It appears that M. N. M. M. Thaha was thereafter given constructivepossession of the abovesaid premises. M. N. M. M. Thaha diedon 09.05.1978 and his estate was administered in TestamentaryProceedings bearing No. 27498/T.
Admittedly, (vide admission 7 recorded on 20.08.1990) thedefendant in this case, M. L. M. Fauz, came into occupation of thepremises in suit (No. 328, Old Moor Street, Colombo 12 abovesaid)as a tenant under the abovesaid A. M. M. Zaneek.
Before his death, M. N. M. M. Thaha after A. M. M. Zaneek's appealto the Supreme Court was dismissed on 21.01.1976, by letter dated01.07.1977 sent by his Attorney-at-law called upon the defendant,M. L. M. Fauz, to attorn to him and pay rents to him.
By letter dated 11.07.1977 M. L. M. Fauz replied that he hadentered into a contract of tenancy with the abovesaid A. M. M. Zaneek.
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By letter dated 19.07.1977 M. N. M. M. Thaha's Attorney-at-lawreplied notifying M. L. M. Fauz that he remained in occupation (ofthe premises in suit) at his own peril.
Thereafter, this action (DC Colombo case No. 5251/ZL) was filedby the heirs of the late M. N. M. M. Thaha on the basis that defendantM. L. M. Fauz failed to attorn and pay rents to their father and therefore,there was no privity of contract between the .defendant and theplaintiffs. The defendant was described as a trespasser. The amendedplaint dated 20.10.1988 prayed for a declaration that the originalplaintiffs in this case were the lawful owners of the premises in suit,for ejectment of the defendant and all holding under him, for damagesand costs.
The Additional District Judge, Colombo, delivered judgment on
in favour of the original plaintiffs.
Appeal No. 599/96 (F) was filed by the defendant on 20.09.1996and it is pending before this Court.
On 14.10.1996 the original plaintiffs made an application to theDistrict Court for writ pending appeal. Objections were filed by thedefendant and after inquiry the Additional District Judge, Colombo,made order dated 17.02.1998 allowing writ pending appeal. CA Revision126/98 and CA Leave to appeal No. 27/98 were filed by the defendantM. L. M. Fauz to set aside the said order dated 17.02.98.
Of consent, writ was not to be taken until both applications referredto above were determined by this Court.
Pending order by this Court after hearing the 1st plaintiff-respondentNoorul Masaina Gyi died on 16.01.1999 and llliyas Arthur Gyi wassubstituted as 1A plaintiff-respondent.
This order will deal with both applications.
The learned President's Counsel appearing for the defendant-petitioner has taken up the following matters before us :
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Substantial loss to the business of sanitaryware carried on bythe defendant had not been taken into consideration by thelearned Additional District Judge, Colombo.
"Substantial questions of law" would amount to “substantial loss"in terms of section 763 (2) of the Civil Procedure Code. Thus,attornment in fact or by operation of law was an importantquestion of law to be considered (case law cited).
Rents were in fact paid. But, even if not paid, the proper legalremedy was an action for rent and ejectment and not adeclaratory action.
The learned President's Counsel has submitted that complicatedquestions of facts and law arise in this case and therefore writ shouldbe stayed on security being furnished by the defendent-petitioner.
These submissions would presently be examined.
Substantial loss – Sanitaryware business :
According to section 763 (1) of the Civil Procedure Code ajudgment-creditor is entitled to apply, for execution of a decree in hisfavour in the normal course despite an appeal pending. Accordingto section 23 of the Judicature Act an appeal shall not have the effectof staying the execution of a decree unless the District Judge deemsfit otherwise.
The burden is on the appellant to show sufficient cause if securityis to be ordered while allowing execution of a decree for the restitutionof any property which may be taken in execution of such decree andfor the due performance of any contrary order that may be made bythe Court of Appeal.
No doubt a discretionary right has been vested in Court undersection 763 (2) of the Civil Procedure Code to stay execution pendingappeal. The circumstances contemplated for such stay are – (i) that
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the judgment-debtor must satisfy that substantial loss may result tohim unless an order for stay of execution is made and (ii) he mustgive security for due performance of the ultimate order that may bemade in appeal.
The question whether "substantial questions of law" to be adju-dicated upon at the hearing of the appeal amounts to “substantialloss" would be considered under heading No. (ii) hereinafter.
But, presently the question of the monetary or economic conno-tation of the phrase “substantial loss" in relation to the facts of thiscase would be discussed.
The learned President's Counsel submitted that the defendant wasrunning a successful business in sanitaryware. Value of his stock intrade was said to be Rs. 550,000, value of furniture Rs. 49,000 andit was observed that he had an overdraft facility of Rs. 40,000.
Justice Mark Fernando stated in the case of Perera v. Gunawardend11as follows :
". . . In any event mere assertions of the judgment-debtor'sopinion that serious loss would result, unsupported by avermentsof fact in regard to the nature of the business, its turnover andprofits (or losses), the difficulties and expenses which relocationwould occasion, and similar matters are insufficient. The materialupon which such assertions are based should have been madeavailable to the Court to assess the loss, and to determine, inrelation to the judgment-debtor, whether such loss was substantial;and also to determine the security."
The defendant-petitioner in this instance did not place any materialbefore Court to support his assertions. Further, it is difficult to believethat the defendant-petitioner who bases his tenancy on a pure questionof law (viz attornment by operation of law), fully aware of the factthat his previous landlord (A. M. M. Zaneek) had lost his rights tothe father of the original plaintiffs, with no rent receipts to prove
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tenancy, would invest substantial sums of money to run a lucrativebusiness in the premises in suit. Of course, according to the learnedcounsel for the plaintiff-respondents the premises are virtually closed.
Therefore, the lack of material before Court regarding substantialmonetary or economic loss enures to the benefit of the plaintiff-respondents.
Substantial questions of law arise :
The learned Presidents Counsel has placed much reliance on the"substantial questions of law" that arise in this case, to support hisapplication for the stay of writ.
Number of decisions have held that substantial questions of lawawaiting determination by the Appellate Courts be classified as amount-ing to substantial loss, (vide Mack v. Shanmugarrf2) Saleem v.Balakumari3'; Kandasamy v. Gnanasekaramm).
But, questions of law arising for determination must be substantialin relation to the facts of the case at hand. One of the meaningsof the word "substantial" is “actually existing".
The person who had entered into a contract of tenancy withthe defendant-petitioner had been held to have no rights to theproperty in suit in DC Colombo case No. 8207/L. As far back as on21.01.1976 A. M. M. Zaneek's appeal to the Supreme Court [SC caseNo. 67/68 (F)J had been dismissed with costs. Even constructivepossession of the premises in suit had been given to the father ofthe plaintiff-respondents. Interlocutory appeal against the issue of writ(viz SC case No. 33/77 Inty.] had been dismissed on 24.09.1987. Sotoo DC Colombo case No. 1219/L had been determined against thesaid A. M. M. Zaneek. Thus, the defendant-petitioner's claim to tenancyunder A. M. M. Zaneek terminated with Zaneek being held a trespasserhaving no manner of title to the premises in suit.
The only basis, therefore, for the defendant-petitioner to stay onin the premises in suit became proof of tenancy under M. N. M. M.
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Thaha, the father of the plaintiff-respondents. There was no evidenceof any letting by the said Thaha. In fact, it had been admitted (videadmission 7 dated 20. 08. 1990) that the defendant-petitioner cameinto the premises as a tenant of A. M. M. Zaneek. There had beenno evidence of the payment of rent to the said Thaha. The onlypayment to the said Thaha was a payment of an advance to purchasethe premises in suit.- This payment would not amount to rent.
The said Thaha was not a successor to Zaneek as landlord. Thetransactions between Zaneek and the defendant-petitioner did not bindthe said Thaha in any way nor did they fetter his proprietary rights.Furthermore, at the inquiry into the application for execution of writpending appeal on 25.09.1997 the defendant-petitioner admitted thatdamages for 135 months amounting to Rs. 345,000 was due.
Under these circumstances let us examine whether there is any"substantial question of law" that needs determination in appeal.
The argument of the defendant-petitioner is that he had not at anystage denied the title of the late M. N. M. M. Thaha or that of hischildren, (vide paragraph 13 of the original answer dated 22.07.1987).The contents of this paragraph is missing in the amended answerdated 11.01.1989. Paragraph 14 of the amended answer is a meredenial of paragraph 14 of the amended plaint which was the sameas paragraph 12 of the original plaint dated 27.06.1986. In fact, theposition of the defendant-petitioner was that there was a dispute withregard to title as between A. M. M. Zaneek and M. N. M. M. Thahaand therefore he had withheld attornment, (vide paragraph 17 of theamended answer dated 11.01.1989). By 11.01.1989 Zaneek's appealto the Supreme Court had been dismissed. The interlocutory appealagainst the issue of writ had been dismissed (SC No. 33/77 Inty).Yet, he continued to dispute the said Thaha's title.
The learned Additional District Judge pointed out in his order dated
that by denying in paragraph 3 of the amended answerthe averments in paragraph 2 of the amended plaint, the defendanthad rejected all rights of the said Thaha, father of the plaintiffs. Thelearned Judge next went on to examine P18 and P20. He aptly pointed
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out that it was difficult to accept the argument that the defendant whorejected the title of the plaintiffs father when filing his first answeron 22.07.1987, had accepted 10 years previously in around 1977 byP18 or P20 the title of the plaintiffs father.
P18 shows defendant-petitioner was not interested in paying rentsto the plaintiffs father, until money allegedly paid to Zaneek was setoff. Thus, the defendant-petitioner did not accept the said Thaha ashis landlord. Iri Cassim Hadjiar v. Umamleweit was held that sucha right of set off was not available.
Even P20 was a conditional document. If the arrears of assessmentrates in a sum of Rs. 6,894 was paid, the defendant-petitioner wasprepared to consider payment of rent to the actual owner.
Thus, it would be seen that the defendant-petitioner never acceptedeither expressly or impliedly that the said Thaha was the owner ofthe premises in suit nor did he positively inform that he would payrent in the future at least to the said Thaha.
The learned Additional District Judge quite rightly has pointed outthat by informing of his condescension to consider not of paymentof . rents to the said Thaha, but payment to the "actual owner", therewas no acceptance that the said Thaha was the actual owner. Onthe contrary on 28.01.1987 and 24.01.1989 the defendant-petitionerhad mentioned in P24 and P25 respectively, that he was the ownerof the premises in suit though the learned President's Counsel triedto make out that the recording was wrong.
There is no doubt that the defendant-petitioner never wished toattorn to the said Thaha.
Neither the plaintiff-respondents nor their father the said Thahawere bound by the tenancy agreement that existed between defendant-petitioner and Zaneek. (vide Imbuldeniya v. D. de Silvd6).) There isno evidence that even subsequently the defendant-petitioner did acceptthe said Thaha as his landlord.
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It is not necessary in this order to examine whether the law imputedattornment on the basis of the facts of this case. That would be doneelsewere. But, even if this Court were to hold so, the sum ofRs. 200,000 ordered as security should be amply adequate for therestitution of the premises in suit taken in execution of the decree.
We, therefore, find that even though a question of law may bealleged to arise, the question is not substantial and under thecircumstances of this case seems doomed to fail.
This action cannot be maintained, only a "rent and ejectment"action is the proper remedy:
In Swami Sivagnananda v. The Bishop of Kandy™ it was held thata prospective purchaser placed in possession of a premises was atbest a licensee or a permissive occupier and cannot be equated tothat of a tenant. Once the defendant-petitioner refused to accept thesaid Thaha as his landlord he forfeited his right to be called a tenant.There have been no evidence placed to prove that a valid contractof tenancy or statutory tenancy did exist between the sad Thaha andthe defendant-petitioner. Under the circumstances the argument thata "rent and ejectment" case was the appropriate remedy, is nottenable.
We, therefore, find that the arguments put forward by the learnedPresident's Counsel on behalf of the defendant-petitioner cannot beaccepted and we are not, therefore, inclined to interfere with the orderof the learned Additional District Judge dated 17.02.1998.
We dismiss both applications CA No. 126/98 Revision and CALeave to Appeal application No. 27/98 with incurred costs payablein respect of each of these cases by the defendant-petitioner to theplaintiff-respondents including the substituted 1A plaintiff-respondent.
JAYAWICKREMA, J. – I agree.
Applications dismissed.