H. E. WIJESURIYA ,Appellant, and ATTONEY-GENERAL , Respondent

090-NLR-NLR-V-51-H.-E.-WIJESURIYA-Appellant-and-ATTONEY-GENERAL-Respondent.pdf


H. E. Wijesuriya e. Attorney-General
S6I
[Tn the Privy Council]
1950 Present: Lord Simonds, Lord MacDermott, Lord Roidand Sir John BeaumontH. E. WIJESURIYA, Appellant, and ATTORNEY-GENERAL,RespondentPrivy Council Appeal No. 75 of 1947
S. C. 205—D. C. Colombo, 15,380
Principal and agent—Agent acting in excess of authority—Plea of ostensible authority—Clear proof necessary—Oral agreement with Crown regarding permit to tap andtake produce of rubber trees on Crown land—Is it *» respect of a “ lease " or a'* licence ” f—-Applicability of regulation 2 of Land Sales Regulations to suchagreement—Is such agreement valid though oral t—Prevention of FraudsOrdinance, sections 2 and 17.
Tbn Land Commissioner wrote a letter to the Government Agent* Dve,giving him authority to issue e permit to the plaintiff to take the produce ofthe rubber trees on certain Crown land. The letter authorized the permit tobe issued only after the Crown took possession of the land from one S. It wasalleged by t)te plaintiff that on the 4th March, 1943, an oral agreement wasentered into between the Assistant Government Agent and the plaintiff wherebyit was agreod that the plaintiff should have the right to tap and take the produoeof the rubbor trees on the Crown land for a period of four years and two and ahalf months from the 15th March, 1943. The alleged agreement contravenedthe instructions of the I^ind Commissioner to take poesemion of the laud onbehalf of the Crown and thereafter issue a permit to the plaintiff.
In an action brought to reoover damages from the Crown for failure to fulfil
the alleged agreement—
Held, (i) that, assuming tlie agreement to have been made as alleged, it wasunauthorized by the Crown and that on this ground alone the action must fail.The instructions given by the Land Commissioner in his letter were clear andwere inconsistent with either a permit being issued before the Crown resumedpossession of the land or an unconditional agreement being made to grant apermit before that event. The Assistant Government Agent therefore actedin excess of (if not in defiance of) the instructions he had received.
that if the plaintiff wrongly assumed that the instructions given by theLand Commissioner to his subordinates went further than they did, he actedat his peril.
that if the plaintiff relied on ostensible authority, evidenoe of it shouldhave been presented with the particularity which such a plea, always a difficultone to ostabHsh, required.
that the alleged agreement was in respect of a permit whioh was not alease but a licanoe and was therefore not governed by regulation 2 of the LandSales Regulations.
that the alleged agreement, being oral and not in writing notariallyattested, was not “ of force or avail in law ” by virtue of section 2 of the Pre-vention of Frauds Ordinance. Nor was it saved by section 17 of the Preventionof Frauds Ordinance. Section 17 deals with instruments, i.e., with trans-actions which have already been redueed to writing, and exempts certainclasses of instruments from the necessity of notarial attestation. There is
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VJ. N. A 97029-1.042 (5/50)
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LOUD SIMONDS—H. E. Wijeauriya i>. Atiorney-Ceneral
nothing therefore in. section 17 which saves oral agreements for the sale ofimmovable property by Government from the necessity of being reduced towriting.
OWier / The omission of a trial Judge to measure expressly the reliability ofthe plaintiffs and defendant's witnesses is not per «e a ground entitling theAppellate Court to reverse the judgment of tho trial Judge on a question of fact.
A.PPEAL from a decree of the Supreme Court. The judgment of theSupreme Court is reported in (1946) 47 N. L. R. 385.
Gerald Upjohn, K.C., with A. A. Mocatia, for plaintiff appellant.
Sir David Maxwell Fyfe, K.C., with Frank Gahan, for defendantrespondent.
Cur. adv. vult.
April 20, 1960. [Delivered by Lobd Simonds]—
This appeal, which is brought from a decree of the Supreme Court ofCeylon allowing the appeal of the Attorney-General of Ceylon from adecree of the District Judge of Colombo, raises difficult questions offact and of law.
The primary question of fact is whether the appellant, a landed pro-prietor in Ceylon, on the 4th March, 1943, made an oral agreement withthe Assistant Government Aggent, Uva Province, one N. Chandrasoma,on behalf of the Crown, whereby it was agreed that in consideration ofpayments to the Crown at the rate of Rs. 6,000 per annum the appellantshould have the right to tap mid take the produce of the rubber treeson certain defined Crown lands in the Badulla District of Uva Provincefor a period of four years and two and a half months from the 15th March,1943. The learned District Judge found as a fact that such an agreementwas made, but in the Supreme Court a different view was taken, thatCourt holding that, since the learned Judge had not based his finding onthe demeanour or reliability of the witnesses, it could properly come toa different conclusion upon a consideration of the oral evidence and therelevant documents.
In this conflict of opinion upon the facts their Lordships have givenanxious consideration to all the circumstances of the case and havecome to the conclusion that the Supreme Court was not justified inreversing the judgment of the learned Judge, who had in their viewample material for forming the opinion to which he came and, thoughhe did not expressly measure the reliability of the appellant’s and res-pondent’s witnesses, cannot fail to have been influenced in his decisionby the view that he took of them. Moreover, as their Lordships think,the relevant documents are on the whole more consistent with theappellant’s story than with that of the respondent.
Before referring to the events of the 4th March, 1943, it is necessaryto say something of the surrounding circumstances.
LOUD SIMONDS—H. K. Wijeniriya v. Attorney-General
363
Oa the 23rd January, 1942, the Land Commissioner had caused tobe published in the Government Gazette a notification that the GovernmentAgent of the Province of Uva would on the 7th March, 1942, put up toauction “ the lease of the right to tap and take the produce of the rubbertrees ” on certain Crown lands of an area of about 278 acres, of whichsome 170 acres were in rubber, for a period of five years. The conditionsof the auction provided (inter alia) that the purchaser should pay one-fifthof the rent immediately after the sale and the balance in four equalinstalments. The appellant, who was a rubber planter of experienceand the holder of leases of various other Crown lands, was the secondhighest bidder at tho auction, the highest bidder being one Sabapathipiilaiwith a bid of Rs. 44,000, who accordingly became the purchaser. He,however, for some time mado default in the proper payments and it wasnot until the 10th August, 1942, that a permit was issued to him in termswhich by reason of their importance upon another issue it is convenienthere to set out in full. In tho meantime negotiations had been enteredinto with the appellant and it appears that the Assistant GovernmentAgent, Chandrasoma, had recommended to the Land Commissionerthat the appellant should be offered the rights purchased by Sabapathi-pillai for Rs. 30,000 in the event of the latter’s default, the large reductionin purchase price being no doubt due to the fact that on the 5th April,1942, the first Japanese air raid on Ceylon had taken place.
The permit was, however, eventually issued to Sabapathipiilai andwas as follows :—
‘ ‘ Karuppannenpillai Sabapathipiilai of Lemastota Estate, Koslanda(hereinafter referred to as ‘the permit-holder’) is hereby permitted totako the produce of the plantations on the parcel of Crown land called1 Atmagahinna alias Madugahainna, Wewelketiyahona, KecnaketiyaEstate and Atmagahinna, Madugahfthinna, Wowelketiyahena ’ (herein-after referred to as ‘ the land ’) situated in the villages of Kiriwanagaand Tittawclgolla in the Chief Headman’s Division of Wellawaya oftho Badulla District depicted as lots Nos. 127 and 136 in Final VillagePlan No. 318 Tittawclgolla, prepared by the Surveyor-General andkept in his charge, and computed to contain in extent two hundredand soventy-eight acres, two roods and eleven perches, subject to thefollowing conditions :—
This permit shall expire on the 31st day of May, 1947.
The annual rental shall be eight thousand eight hundred rupees.The permit-holder shall pay the'annual rental on the 1st day of June,in every year to the Government Agent of the Uva Province (hereinaftercalled ‘ the Government Agent ’) at the Badulla Kachcheri.
This permit is personal to the permit-holder. The permit-holder shall not in any manner whatsoever deal with or otherwisedispose of his interest and rights under this permit.
The permit-holder shall not erect any permanent buildings ormake any plantation on the land.
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LORD SIMONDS—H- E. W ijesuriya i«. Attorney-General
The permit-holder shall not fell or in any why damage or allowto be felled or in any way damage any rubber trees or any othervaluable timber trees growing on the land except with the permissionof the Government Agent previously obtained in writing.
The permit-holder shall not dig or in any other way whatsoeverdisturb the soil of the land, nor shall he clean weed tho land.
Any breach of any of the conditions contained in this permitshall render the permit liable to immediate cancellation withoutcompensation, on the orders of the Government Agent.
On tho expiry or cancellation of the permit the permit-holdershall deliver quiet possession of the land to any person acting undorthe orders of the Government Agent, and such person may on suchexpiry or cancellation, enter upon the land and take possession thereofon behalf of the Government Agent.
Tho permit-holder shall not have or mako any claim for com-pensation for improvements effected or expenses incurred, or for
' damages, or for any other cause or reason whatsoever.
The permit-holder shall not have any claim to preferential saleor lease of the land by reason of his having been granted this permit.
Issued on the 10th day of August, 1942:
(Sgd.) M. Chandrasoma,Assistant Government Agent.
Accepted on tho above conditions by the above mentioned permit-holder.
(Sgd.) K. Sabapathivillai.”
It appears that Sabapatbipillai continued to meet with difficulties inworking his permit. On the 7th January, 1943, he requested the LandCommissioner for sanction to transfer it to another, and the appellant,seeing in this the opportunity to secure the permit for himself, askedMr. Wijeratne, his advocate in Colombo, to interview the Land Com-missioner on his behalf. This he did and the result of it was that intho words of Mr. Wijeratne the Land Commissioner ordered that theappellant should be granted the lease of the rights in question on thebasis of Rs. 30,000 for five years. What in fact the Land Commissionerdid—and it is a matter of vital importance in the case—was to writea letter of the 28th January, 1943, to the Government Agent, Uva, whosename was Coomaraswamy, in the following terms :—
“The conditions of the permit dated 10.8.42[i.e., to Sabapathipillai]have been flagrantly violated. You should cancel the permit herewithand take possession of the land on behalf of the Crown. You maythereafter issue a permit to Mr. H. E. Wijesuriya to take the produceof the plantations on the land for the balance period of 5 years at thorental approved by my letter No. A/41G1 of 25.4.42. ”
The approved rental referred to the basis of Rs. 30,000 for five years.
LORD SIMONDS-—H- E. Wijesuriya v. Attorney-General
365
Their Lordships observe upon this letter that its terms are unambiguousand that it contains no authority to issue a permit before taking posses*sion of the land on behalf of the Crown.
It was thought desirable in view of the fact that Sabapathipillai hadentered into some private agreement with one Karunatileke, and thelatter had entered on the land in question, to take the advice of theAttorney-General before proceeding further. Upon receipt of his advicethat the permit could be cancelled, on the 2nd March, 1943, Chandrasoma,the Assistant Government Agent, wrote to Sabapathipillai informing himthat in terms of clause 7 of the permit the lease granted to him wascancelled for breach of conditions 3 and 5 and that he was requiredto deliver peaceful possession of the land to the Divisional RevenueOfficer, Wellawaya, on the 15th March, 1943, at 9,30 a.m., and vacatethe land immediately thereafter. It is eomraon ground between theparties that it was not expected that either Sabapathipillai or Karunatilekewould mako any trouble about complying with this notice, nor is it indispute that it was contemplated that a permit should at some time beIssued to the appellant. ;The question in dispute is whether on the4th March, 1943, ail agreement was made between the appellant andChandrasoma in the terms alleged by the former. Upon this point thedivergence of evidence is remarkable.
The appellant's evidence was to the effect that on that day he firstwent and saw the chief land clerk, whose name was Attanayaka, at theGovernment Office at Badulla, that the latter said that he had beenasked by Chandrasoma to ascertain whether the appellant was willingto deposit Rs. 6,000, being the annual rent, in order that he might begiven the lease, that the appellant then went into the office of Chandra-soma, who confirmed what Attanayaka had said, and the appellant thenagreed the terms; that Chandrasoma then said that the appellant wouldbe given the lease and would be put into possession on the 15th March,that the appellant then returned to the Land Department and drew acheque for Rs. 6,000, for which on the following day he received a receiptdated tho 5th March, 1943, in these terms: “ Received from Mr. E.Wijcsuriya the sum of Rupees six thousand only and cents—being renton Kemapitiya Rubber Estate pending issue of lease ”. The next thatthe appellant heard about the matter was the receipt by him of a letterdated the 6th March, 1943, from the Chena Surveyor stating that he hadbeen instructed by tho Government Agent, TJva, to put him in possessionof tho lands in question as soon as the present lessee vacated it on the15th March. Tho Chena Surveyor had in fact been so instructed in aletter of the 4th March upon the terms of which the appellant relied.
A very different account of the events of the 4th March was givenby Chandrasoma and Attanayaka. The former denied that ho had hadany interview with tho appellant on that day; the latter agreed thathe had had an interview but differed from the appellant in assertingthat he told him that ho would be put in possession of the land in theevent of Sabapathipillai vacating it and that the Rs. 6,000 would beplaced on deposit mid would be refunded to him if he was not put inpossession of the land.
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LORD SJMONDS—H. E. Wijeauriya v. Attorney-General
It appears to their Lordships that upon this evidence supplemented notonly by the letter to the Chena Surveyor already mentioned but also by acontemporary minute clearly made before the interview between Atta-nayaka and the appellant (not, as the Supreme Court appears to havethought, after that interview) the learned District Judge could properlycome to the conclusion of fact which was the basis of his decision andthat the Supreme Court had no adequate ground for setting it aside.
But, while their Lordships are so far in favour of the appellant, thereare other considerations which arc fatal to his appeal.
The respondent in his answer to the plaint which alleged the agreementalready stated denied that agreement and raised certain other defencesbut did not specifically plead that, if the agreement was in fact madeby the Assistant Government Agent, it was made without authority.When, however, the issues came to be settled, the 7th issue was framedas follows: “ If the (Assistant) Government Agent entered into theagreement pleaded in paragraph 3 of the plaint, was he acting withoutauthority ? ” It would have been open to the appellant to demand thatupon this issue he should be at liberty to plead that there was ostensible,if not actual, authority to enter into the agreement, and it would thenhave been for him to prove the facts upon which he relied as a holdingout of authority. This course was not taken with the result that thispart of the case was not presented with the particularity which such aplea, always a difficult one to establish, requires. Upon the availablematerial their Lordships have come to these conclusions. First, theyare of opinion that the Assistant Government Agent had in fact noauthority to make the alleged agreement. The instructions given bythe Land Commissioner in his letter of the 28tb January, 1943, wereclear and were inconsistent with either a permit being issued before theCrown resumed possession of the land or an unconditional agreementbeing made to grant a permit before that event. The Assistant Govern'ment Agent therefore acted in excess of (if not in defiance of) theinstructions he bad received. Secondly, their Lordships see no sufficientevidence of ostensible authority. On the contrary it became clear fromnumerous passages in the evidence, and particularly from the stepsinitially taken by the appellant in January, 1943, that he looked to theI^and Commissioner himself for an order that, when Sabapathipillaivacated the land, he should enter in his place. He may have assumedthat the instructions given by the Land Commissioner to his subordinateswentfurtherthan they did, but, if his assumption was a wrong one, he actedat his peril: see Rit&sO’Chinese Bank v. Li Yan Sam (1910] A. C. 174 at184. Nor, apart from the incidents of this particular transaction, wasthere any sufficient evidcnco of a general holding out of the AssistantGovernment Agent as a person with authority to enter into an oralagreement to grant a lease of, or a permit- to take the produce of, Crownrubber lands at a future date. Learned counsel for the appellant reliedon the provisions of the Land Development Ordinance of Ceylon andreferred to the Ceylon Government Manual of Procedure, but neitherin theso nor in any course of conduct of the Assistant GovemmcntAgenthere concerned or of any other Assistant Government Agent could hefind a clear assertion that to that officer bad been delegated the duty
LOKD SIMONDS—H. E. Wijeturiyav. Altonieu-Qeneral
307
o! making such an agreement. Their Lordships are therefore of opinionthat, assuming the agreement to have been made as alleged, it was un-authorized by the Crown and that on this ground the action and appealmust fail.
Two other defences were raised in the action which must be mentioned.First, it was contended that the alleged agreement was contrary to theLand Sales Regulations and was void, and, secondly, that it was un-enforceable in that it did not comply with the terms of the Preventionof Frauds Ordinance. It was common ground between the parties thatthe first point turned solely on the question whether the permit givento Sabapathipillai, which was the model of that agreed to be given tothe appellant, was a “ lease ” or a “ licence If it was a lease, thenit was of no effect, since Regulation 2 of the Land Sales Regulationsof 1926 provided that every grant and every lease of land should (withcertain immaterial exceptions) be under the signature of the Governorand the Public Seal of the Colony. Upon this question the learnedDistrict Judge and the Supreme Court have come to different conclusions,the former holding the instrument to be a licence, the latter a lease.Both courts have based their conclusion upon a consideration of thewhole terms of the document. It appears to their Lordships that,while there are particular provisions which point in either direction,the decisive test is whether upon its true construction the effect of thedocument is to give exclusive possession to the holder of the so-calledpermit, and, adopting this test, they are of opinion that all that is grantedby the document is the right to tap and take the produce of the rubbertrees within a defined area together with such rights of occupation orpossession and other ancillary rights as are necessary to make the primaryright effective. They find nothing in the document which would excludethe Crown or its officers from entering upon, and making such use of,the land as might be thought fit, subject only to the limitation that indoing so they must not derogate from the rights granted to the grantee.In their Lordships’ opinion, therefore, the so-called permit was not alease but a licence. In expressing this opinion, they must observe thatneither in the judgments under review nor in the arguments presentedto the Board has it been suggested that the law of Ceylon upon the questionwhether an instrument is a “lease” within the meaning of the LandSales Regulations difFers from the English law which would be applicableupon a similar question.
The final question arose under the Prevention of Frauds Ordinance-It is convenient to set out sections 2 and 17 of that Ordinance. Theyare as follows:—
“ Section 2. No sale, purchase, transfer, assignment or mortgageof land or other immovable property, and no promise, bargain, contractor agreement for effecting any such object, or for establishing anysecurity, interest, or incumbrance affecting land or other immovableproperty (other than a lease at will, or for any period not exceeding onemonth) nor any contract or agreement for the future sale or purchaseof any land or other immovable property shall be of force or availin law unless the same shall be in writing and signed by the party-
Jan Singho v. Abeyxoardene
making the same, or by some person lawfully authorized by him orher in the presence of a licensed notary public and two or more witnessespresent at the same time, and unless the execution of such writing,deed, or instrument be duly attested by such notary and witnesses.
“ Section 17. None of the foregoing provisions in this Ordinanceshall bo taken as applying to any grants, sales or othor conveyancesof land or other immovable property from or to Government, or toany mortgage of land or other immovable property made to Govern-ment or to any deed or instrument touching land or other immovableproporty to which Government shall be a party, or to any certificatesof sales granted by fiscals of land or other immovable property soldunder writs of execution.”
It is plain that the alleged oral agreement falls within section 2, whetheras an agreement for effecting the sale of immovable property or as anagreement for establishing an interest affecting land or other immovableproperty. If so it would not be “ of force or avail in law ” unless it wassaved by section 17 ; for it was not in writing as prescribed by section 2and, necessarily, its execution was not notarially attested. Was it thensaved by section 17 ? In their Lordships’ opinion it was not. Itappoars to them that, while section 2 deals with transactions and onactathat they must be reduced to writing as therein prescribed, section 17deals with instruments, i.e., with transactions which have already beenreduced to writing, and exempts certain classes of instruments fromthe necessity of notarial attestation. Hie language of the section‘'grants, sales, or other conveyances” and “any deed or instrumenttouohing land, etc.,” points irresistibly to this conclusion. There isnothing therefore in the section which saves oral agreements for the saleof immovable property by Government from the necessity of being re-duced to writing. Nor is there any reason to suppose that this is a c<wuaomissus. The present case is sufficient to show how desirable it is thatan agreement for the sale of immovable property should be in writing,even if one of the parties to the agreement is the Crown through one ofits servants. On this ground also, therefore, the appeal must fail.
For these reasons their Lordships will humbly advise His Majestythat this appeal should bo dismissed. The appellant must pay therespondent’s costs of the appeal.
Appeal dismissed.
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