GNANASAMBANDAM v. BIN ADAHAM AND ANOTHER

036-SLLR-SLLR-1998-V-2-GNANASAMBANDAM-v.-BIN-ADAHAM-AND-ANOTHER.pdf


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Gnanasambandam v. Bin Adaham and Another
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GNANASAMBANDAM
v.BIN ADAHAM AND ANOTHER
COURT OF APPEALWEERASEKERA, J. &
WIGNESWARAN, J.
A. NO. 791/88 (F)
C. AVISSAWELLA .no. 17610/LJANUARY 20 AND FEBRUARY 10, 1997
Conditional transfer – Deed not signed by vendee – Rights to obtain retransfer.Held:
A deed of transfer of a land embodying a condition to retransfer on payment ofthe purchase price plus interest within five years binds the vendee to retransferthe land on being paid the purchase price and interest within the stipulated timealthough the vendee had not signed the deed.
The property was transferred with a condition attached to it. The condition cannotbe disengaged from the property. The. failure of the defendant-appellant'to signthe deed does not entitle him to wriggle out of his obligation to retransfer. Theobligation was intrinsic in the transfer itself.
Cases referred to:
Ratnam v. Ratnam 79 (2) NLR 433, 438, 439.
Sasson & Sons Ltd. v. International Banking Corporation (1927) AC 7.
Rochefoucauld v. Boustead (1897) 1 Ch 196.
Booth v. Turfe (1873) 16 Eq. 182.
APPEAL from judgment of the District Court of Avissawella
Mahenthiran for defendant-appellant.
Ikram Mohamed with Ian Fernando for the plaintiff-respondent.
Cur. adv. vult.
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Sri Lanka Law Reports
(1998) 2 Sri LR.
June 02, 1997WIGNESWARAN, J.
The plaintiff-respondents by P1 (deed No. 520 dated 9.10.1982 at-tested by H. R. P. Abeywickrema, Notary Public of Avissawella)transferring the land and premises described in the schedule to thesaid deed to the defendant-appellant for a sum of Rupees FiftyThousand only (Rs. 50,000/-) signed and executed the said deed.
The habendum clause of the deed stated as follows:
"To have and to hold the said premises hereby sold andconveyed wifh the rights and appurtenances thereto belonging untothe said vendee and his aforewritten absolutely for ever subjecthowever to the condition that if within a period of five (5) yearsfrom date hereof the aforesaid vendors or their heirs, executors,administrators and assigns pay unto the said vendee or hisaforewritten the said sum of rupees fifty thousand (Rs. 50,000)together with interests calculated at twenty per centum (20%) perannum from date herebf the vendee shall retransfer all the interestsin the land and premises described in the Schedule hereto to thesaid vendors or their aforewritten.
The attestation clause to the said deed referring to the paymentof consideration stated as follows:
“And I further certify and attest that of the consideration hereinexpressed a sum of rupees ten thousand (Rs. 10,000) was paidin cash in my presence, rupees'twenty thousand (Rs. 20,000) vyaspaid by cheque No. C/28-165459 drawn on the Bank of Ceylon,Avissawella and the vendors acknowledged prior receipt of rupeestwenty thousand Rs. 20,000) . . .“
The five year period for retransfer mentioned earlier was to be overon 8.10.1987.
The plaintiff-respondents instituted this action No. 17610/L in theDistrict Court of Avissawella on 12.9.1984 well before 8.10.1987 toobtain a retransfer of the premises in suit on the basis that thedefendant-appellant had in breach of the condition in transfer deed
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Gnanasambandam v. Bin Adaham (Wigneswaran, J.)
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No. 520 (P1) refused to accept the sum of Rs. 50,000 plus interestdue thereon and to retransfer the said premises to the plaintiff-respondents.
The defendant-appellant denied any liability to retransfer since
he was not a signatory to P1 :and (ii) the condition thereon didnot bind him. He also took up the position that P1 was an outrighttransfer.
At the trial two admissions were recorded, viz (i) the executionof P1 (ii) that Rs. 69,167 consisting of Rs. 50,000 mentioned asconsideration in P1 plus interest at 20% per annum from the dateof deed upto. end of August, 1984, calculated in terms of the saidcondition on P1 had been deposited to the credit of the case.
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The onlyjssue in view of the above admissions was whether thedefendant-appellant was bound to retransfer the property in suit asper the terms of P1 to the plaintiff-respondents.
The learned District Judge without recording any evidence but afterhearing submissions only, delivered judgment on 30.9.1988 holdingwith the plaintiff-respondents as per their prayers set out in the plaint.
This appeal is against that judgment.
The learned counsel for the defendant-appellant has taken up thefollowing matters in appeal 1
1.P1 is not a conditional transfer. It is an outright transfer.
The defendant-appellant was not a signatory to the deed. Astipulation by the vendors in their deed did not bind him.
The insertion of a stipulation on the deed was a unilateralact of the plaintiff-respondents. There was no assent givenby the defendant-appellant.
According to section 2 of the Prevention of Frauds Ordinancean agreement in writing notarially attested was necessary tobind the defendant-appellant to retransfer the premises.
There exists no valid and legally enforceable right that bindsand compels the defendant-appellant to transfer the premises.
308
Sri Lanka Law Reports
(1996) 2 Sri LR.
Estoppel is not a cause of action by itself and it does notcreate one.
The decision in Ratnam v. Ratnam™ referred to, implying thatthe plaint in this case disclosed no enforceable cause ofaction since section 2 of the Prevention of Frauds Ordinancewas not conformed with.
These submissions would now be examined.
A deed generally consists of the following parts: (1) the premisesor recitals (ii) the habendum clause (iii) the tenendum clause (iv) thereddendum clause (v) the conditions and (vi) the covenants.
The habendum clause in a conveyance indicates the property orestate that is to be taken over by the grantee. As a general rule,when the quantum of the interest conveyed is mentioned the habendummay qualify, enlarge, lessen or explain the property or estate granted.
The tenendum clause in English law indicated the tenure by whichthe grantee was to hold the land of the grant or but which now simplysays that the land is to be held by the grantee without mentioningof whom.
Most deeds now have both clauses coupled and as such therelevant part of the deed says: "To have (habendum) and to hold(tenendum)".
The reddendum clause refers to that which is to be paid orrendered.
Conditions are stipulated before the covenants.
In P1 the habendum and tenendum clauses have been amalga-mated and the property or estate which was handed over to and takenover by the defendant-appellant was the premises sold and conveyedabsolutely for ever but subject to a condition. The property wastransferred with a condition attached to it. The condition cannot bedisengaged from the property. If the condition was not stipulated inthe deed it would be safe to presume that the vendors (the plaintiff-respondents) would not have gone ahead with the transfer. It mustbe taken for granted that the contract which gave rise to the transfer
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deed had the condition of reserving the right of retransfer central toit. Thus the title to the property or premises transferred on P1 wasof a restricted nature. It had a condition subsequent attached to itwhereby on the happening of an event within 5 years from the dateof deed P1, the purchaser's right got divested or destroyed. It behovedthe defendant-appellant to enjoy all the rights of an owner until anytimewithin 5 years from the date of execution of P1 the plaintiff-respond-ents made available to the defendant-appellant the purchase priceon P1 with the stipulated interest, in which event it was incumbenton the defendant-appellant to retransfer the property or premises backto the vendors. The form of the deed was a deed poll as most transferdeeds are.
It certainly would have been better in this instance for the deedof transfer to have been formulated as an indenture. If the deed wasan indenture this case would not have arisen. But the failure of thedefendant-appellant to have signed the deed of transfer does notentitle him to wriggle out of his obligation to retransfer which wasan obligation intrinsic in the transfer itself. In other words what wassold or granted to the defendant-appellant on P1 was a property orpremises encumbered with a condition subsequent. The defendant-appellant cannot be heard to say that he was unaware of the conditionstipulated in P1 since the attestation clause refers to his activeparticipation in the transaction. No contrary evidence was led in court.
It is regrettable that at least some limited evidence was not ledin this case to find out as to who paid the stamp duties, Notary'sfees and other charges and as to who were present at the time ofsigning of the deed. Generally, evidence relating to payment of stampsand other charges would give a clue as to the intention of partieswith regard to the deed signed. For example where the transactionis a mortgage couched in the form of an absolute transfer the vendoris generally called upon to pay all these charges. In a real transferdeed it is the purchaser who bears the burden. Sometimes the vendoris called upon to pay half charges since at the end of the periodstipulated (5 years in this instance) if the vendors do not pay theprincipal and the interest, the vendee would take over the premisesabsolutely.
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(1998) 2 Sri LR.
In the absence of this piece of evidence we must interpret thedeed (P1) in accordance with the canons of construction laid downin the law.
Basically a document must be considered as a whole. It is fromthe whole of the document coupled with the surrounding circumstancesthat the general intention of the party or parties is to be ascertained.
When the defendant-appellant accepted the signatures of the plaintiff-respondents on P1 and was prepared to part with the considerationstipulated on the deed, it is to be presumed that the defendant-appellant acknowledged and accepted every term and condition laidout in P1 and agreed to abide by it. If he was not prepared to acceptthe deed of transfer with the condition subsequent stipulated thereinhe should have called off the transaction without fulfilling his part ofthe obligation by paying the consideration referred to in the deed.There is no evidence that the defendant-appellant at least subse-quently but before the plaintiff-respondents offered to pay the transferprice and interest disputed the legality or the necessity for the conditioninserted in the deed. This leads to the inevitable inference that thedefendant-appellant was prepared to abide by the conditionsubsequent stipulated in P1.
Under such circumstances a court must lean towards that inter-pretation which will put an equitable construction and should notconstrue P1 in such a manner as to give either of the parties anunfair or unreasonable advantage over the other unless the intentionof the parties to the contrary is manifest. This is known as the equitableinterpretation rule, (vide page 428 E. R. S. R. Coomaraswamy's "TheConveyancer and Property Lawyer" volume 1 part II (first edition)1949).
P1 was a printed transfer deed form used for the sake ofconvenience in which there were blank spaces to be filled accordingto circumstances — a common practice in Sri Lanka. In these casesmore attention must be given to the words filled in rather than tothe printed word since the written or typed words were chosen forthe particular occasion while the printed words were general wordsfor all occasions. (Sasson & Sons Ltd. v. International Banking
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Corporation [1927] AC 7(a). The written or typed portions are presumedto have commanded the strictest attention of the parties and ttje writtenor typed words must prevail in case of irreconcilable conflict.
Having examined the rules of interpretation generally with referenceto a case of this nature let us now discuss the submissions madeby the learned counsel for the defendant-appellant.
P1 is an outright transfer
P1 when viewed from the standpoint of the habendum and ten-endum clause and the circumstances of the transaction must beinterpreted as a conditional transfer and not as an outright transfer.
The vendee on P1 did not sign it
The question of the defendant-appellant signing P1 is not relevantsince what was transferred to him was an encumbered title to theproperty in question and not absolute ownership for all times. On thehappening of the condition subsequent the proprietary right of thedefendant-appellant was bound to be destroyed or divested.
No assent by vendee to the unilateral act by the vendors
The stipulation on P1 cannot be considered as an arbitrary uni-lateral act of the plaintiff-respondent. It is safer to presume under thecircumstances of this case that the stipulation carried the consent andconcurrence of the defendant-appellant and therefore the latter wasduty bound to comply with it. Not- to do so would amount to a fraud.
Non conformity with section 2 of the Prevention of FraudsOrdinance
It is wrong to entwine section 2 of the Prevention of FraudsOrdinance to cases of this nature. The promise or agreement in thisinstance is implicit in the notarial document P1. When the defendant-appellant paid the consideration on P1 and accepted what was trans-ferred to him by the plaintiff-respondents he impliedly undertook toretransfer the property on payment of dues as per stipulation set out
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in P1. He had no alternative because his very ownership was de-pendant on accepting P1 with the condition subsequent incorporateddeliberately and specifically therein. Not to accept P1 with suchcondition incorporated therein means the negation of his very docu-ment of title. If the deed is declared void for uncertainty, the title wouldvest back in the original vendors. The defendant-appellant thereforecannot be heard to approbate and reprobate at the same time takingcover under section 2 of the Prevention of Frauds Ordinance. Theprovisions of the Prevention of Frauds Ordinance cannot be used bya person to effectuate a fraud himself, (cf. section 5 (3) of the TrustsOrdinance). The principle underlying this pronouncement is that courtswill not allow persons to take advantage of their own fraud, (videRochefoucauld v. BousteacPh, Booth v. Turld*K In the present caseby depending on P1 for his title when it carried an obligation on hispart expressly provided for in the deed, the defendant-appellant perforceacknowledged the right of the plaintiff-respondents to obtain a retransferwithin five years of the date of execution of P1. In denying the plaintiff-respondents' right and denying his liability to retransfer the defendant-appellant was attempting to withhold the property lawfully due to theplaintiff-respondents, despite the fulfilment of their part of the obligationby taking cover under the provisions of section 2 of the Preventionof Frauds Ordinance. This cannot be allowed and should not beallowed.
Plaintiff-respondents have no legally enforceable right
A legally enforceable right of the plaintiff-respondents must berecognised under the circumstances in view of the specific conditionsubsequent in P'1 which the defendant-appellant has refused to giveeffect to though having accepted title under P1 with the conditionforming part of it. There has thus been a denial of a right. Such rightis enforceable despite the provisions of section 2 of the Preventionof Frauds Ordinance since this section has no applicability in thisinstance due to the reasons earlier enumerated.
Estoppel does not create a cause of action
Estoppel is not used here to create a cause of action. Theobligation is real in this instance. Liability to retransfer is intrinsic in
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P1. P1 is the only document the defendant-appellant has for’his title.He cannot disown parts of his title document and get benefits fromother parts. He is estopped from doing so. If the document is takenas a whole the obligation is patent on the deed. But the legal baradumbrated is that the defendant-appellant did not declare his obli-gation in writing as required by section 2 of the Prevention of FraudsOrdinance.
Since it leads to the effectuating of a fraud the provisions of section2 of the Prevention of Frauds Ordinance would hot apply to the factsof this case. Therefore the cause of action arises from the wrongcommitted by the defendant-appellant in refusing to retransfer, for theprevention or redress of which an action can be instituted.
The decision in Ratnam v. Ratnam 1979m NLR 433f1)
The abovesaid decision has no relevance to the present case.Transfer deed P1 was a notarially executed document. What wastransferred to the defendant-appellant was a property subject to acondition subsequent which was binding upon him. His acceptanceof the deed carried with it an implied assent to conform to the conditionsubsequent. Hence the need to draw up a new notarially executeddocument or to even sign the document of title with a conditionattached to it does not necessarily arise. He is bound by the conditionwhether he signed P1 or not.
Under the circumstances, this court finds no vaild reason tointerfere with the judgment of the learned District Judge of Avissawellaand accordingly dismisses the appeal with taxed costs payable by thedefendant-appellant to the plaintiff-respondents.
WEERASEKERA, J. – I agree.
Appeal dismissed.