H. HASSANALLY and another, Appellants, and M. M. M ,CASSIM and others , Responde

131-NLR-NLR-V-61-H.-HASSANALLY-and-another-Appellants-and-M.-M.-M-CASSIM-and-others-Responde.pdf


529
[In The Pbjvy Counoh.]
I960Present; Viscount Simonds, Lord Tucker, Lord Jenkins, LordMorris of Borth-y-Gest, Mr. L. M. D. de SilvaHASSANALtLY and another, Appellants, <mdM. M. M. CAS SIM and others, Respondents
Privy Council Appeal No. 3 op 1959S. C. 619—D. C. Colombo, 6759
Compensation for improvements—Bona fide occupation on a purported lease—Rightof occupier to compensation for improvements made by him—Premature termi-nation of lease by operation of law—Rights of lessee—Rule against unfust en-richment—Fideicommissum—Lease of property by co-heir—Action brought byanother co-heir for sale of the property tender Partition Act—Lessee's right tocompensation.
The right of an improver to compensation rests on the broad principle thatthe true owner is not entitled to take advantage, without making compensation,of the improvements effected by one who makes them in good faith believinghimself to be entitled to enjoy them whether for a term or in perpetuity.
Accordingly, a person who occupies land bona fide and improves it in themistaken belief that he has a lease of the property has the same right to compen-sation as a bona fide possessor.
An improver who lawfully occupies under a lease and irr that capacity makesimprovements is entitled to compensation if his term of lease is prematurelyterminated by operation of law.
R. TJ. held certain land subject to a fideicommissum created in 1871 in favourof her descendants. She died in 1921 leaving as her heirs two daughters TJ. S.and Z. TJ., each of whom became entitled to a half share of the property subjectto the fideicommissum. U. S. died in Mareh, 1938, leaving as heirs her fourchildren, one of whom was the plaintiff in the present action.
On the 11th December, 1945, Z. TJ., who was entitled to 4/8th shares of theproperty, granted to the fifth defendant a lease of the property for thirty years.One of the conditions of the lease was that, apart from paying the yearly rent,the 5th defendant should erect on the land at his own expense, within areasonable time, certain buildings which at the expiration of the lease were tobecome the property of the lessor without payment of any kind whatever.Z. TJ. held herself out as the sole owner of the land and the 5th defendant cons-tructed the buildings in the bona fide belief that Z. TJ. was in fact the sole owner.
The plaintiff brought the present action under the provisions of the PartitionAct No. 16 of 1951 claiming a declaration of title to the property and a saleunder the Act. He made defendants not only the persons (including Z. TJ.)who were interested with him under the fideicommissum but also the fifthdefendant. It was not disputed that the fifth defendant’s interest was suchthat he was a proper and necessary party to the suit. .
Held, that npon the sale of the property in terms of the Partition Act the fifthdefendant was entitled to be paid, out of the proceeds of sale and in priorityto the beneficial interests of other parties, compensation for the buildings erectedand other improvements effected by him.
Soysa v. Mohideen (1914) 17 N. L. R. 279, partly overruled.
23—LXI
2—I. 2T. B 23495—1,995 (4/60)
530
VISCOUNT SIMONDS—Hassanalty v. Oaasim
i^kpPEAli from a judgment of the Supreme Court reported in(1957) 59 N. L. R. 160.
E. F. N. Qratiaen, Q.O., with Walter Jayawardene, for the 6th and7th defendants-appellants (executors and trustees of the estate of the5th defendant).
No appearance for the respondents.
Gur. adv. wit.
March 7, 1960. [Delivered by Viscount Simonds]—
This appeal from a judgment of the Supreme Court of the Island ofCeylon raises a question of considerable importance. It has involved anexamination of a body of case law in which their Lordships have hadthe advantage of the assistance of learned counsel for the appellants,who, appearing without an opponent, has impartially directed attentionto all material authority. The facts which are not in dispute can beshortly stated.
The appellants are the executors and trustees of the estate of oneAkbarally Abdulhussan Davoodbhoy, who was originally the fifthdefendant in the action out of which this appeal arises. Upon his deaththey were substituted for him as defendants. He will for conveniencesometimes be referred to as the fifth defendant.
The action was concerned with certain land situated in New MoorStreet, Colombo, which at the date of her death was held by oneHahumath Uznma subject to a fideicommissum created in 1871 infavour <?f her descendants. She died in 1921 leaving as her heirs twodaughters Umma Shiffa and the second respondent Zaneera Umma,each- of whom became entitled to a half share of the property subjectto the fideicommissum. Umma Shiffa died in March, 1938, leaving asheirs her four children, the youngest of whom, Mohamed Cassim, becamethe plaintiff in the action and is a respondent to this appeal and theothers were defendants in the action and are also respondents to thisappeal. The position then was that the second respondent was entitledto 4/8th shares of the -property and the other four respondents whohave been mentioned to 1 /8th share each, all such shares being subjectto the fideicommissum. For this reason there were added as defendantscertain children of one of the children of Umma Shiffa who are alsorespondents to this appeal. It was. in these circumstances that theplaintiff (the first respondent) brought his action under the provisionsof the Partition Act No. 16 of 1951 claiming a declaration of title to
VISCOUNT SHIOJSTDS—Hasaancdly v. Cassirn
531
the property and a sale under the Act. But for the reason which willnow be stated he made defendants not only the persons who wereinterested with him under the fideicommissum but also the fifthdefendant whose interest arose in a different way. It is nob disputedthat the latter’s interest was such that he was a proper and necessaryparty to the suit.
On the 11th December, 1945, the respondent Zaneera Umma, whowas entitled to 4/8th shares of the property by a deed of that dategranted to the fifth defendant in consideration of the sum of Rs. 2700and of the covenants and conditions therein, contained a lease of theproperty for thirty years from the 1st January, 1945, at the yearlyrent of Rs. 180 for the first fifteen years and thereafter at the yearlyrent of Rs. 240. The deed contained a covenant by the lessee that hewould “ within a reasonable time lay out and expend at his own expensein erecting and completing fit for habitation with proper materials ofall sorts upon the said ground dwelling houses, tenements, shops,boutiques or factories ” as therein provided. It was further providedthat the lessee having completed the erection of the buildings as thereinmentioned should continue to exercise use and enjoy the rights, benefits,interest and income of the premises and the buildings erected thereonduring the pendency of the term of thirty years demised by the leaseand, further, that the lessee should keep the said buildings in properorder and condition and at the end of the term deliver up the wholeof the premises to the lessor free of payment of any kind whatever.
The fifth defendant as lessee entered upon the demised land and dulyconstructed upon it the buildings for which the lease stipulated. Thelearned District Judge held that Zaneera Umma held herself out as thesole owner of the land and that the fifth defendant constructed thebuildings in the bona fide belief that she was in fact the sole owner.He further held that the plaintiff in the action and the other heirs ofUmma Shiffa made no protest but stood by and acquiesced in theimprovement of the land by the fifth defendant. The Supreme Courtdid not concur in this last finding, but their Lordships do not thinkthat this is material.
In these circumstances the fifth defendant by his amended Statementof Claim in the action (inter alia) claimed that in the event of a sale ofthe property being ordered in terms of the Partition Act the sum ofRs. 35,000 as compensation for the buildings erected and otherimprovements effected by him should be paid to him out of the proceedsof sale.
The learned District Judge in the first place directed that the propertyshould be sold subject to the right of the sixth and seventh defendants(the present appellants), who had by then been substituted for the fifthdefendant, to remain in possession of a half share of the premises andthe entirety of the buildings thereon for the full term of thirty yearsdemised by the lease. This part of the order has not been supportedby the appellants and need not further be considered. The learned
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VISCOUNT S3MONDS—Has&analty v. Gasavm
Judge however further held that in the event of his order not beingupheld the appellants were entitled to compensation out of the proceedsof sale for improvements effected by the fifth defendant. He fixed thequantum of compensation at Rs. 25,122.45 and this figure is not indispute^ Itia this part-ofthe-deeisiemr which wasrejeeted by the SupremeCourt on appeal and the appellants now seek to maintain.
The Supreme Court in deciding that the respondents are entitled toenjoy the fruits of the fifth defendant’s labour and expense withoutpaying any compensation therefor were largely influenced by a decisionof the Supreme Court in Soysa v. JMohideen x. But before examining thisoase their Lordships think it right to refer to certain authorities which,had they there been referred to, might well have led to a differentconclusion. Their immediate purpose in doing so is to show that hithertono distinction had been drawn between the case of an improver whosebona fide occupation had rested on a purported lease and that of anyother improver who had assumed to be in lawful possession, but that,-on the contrary, the right of the improver to compensation rests onthe broad principle that the true owner is not entitled to take advantage,without making compensation, of the improvements effected by onewho makes them in good faith believing himself to be entitled to enjoythem whether for a term er in perpetuity.
Reference may first be made to textbooks of high authority. La Wifle’s“ Principles of South African Law ” 4th Ed. at page 479 it is said“A very common application of the doctrine of unjust enrichmentoccurs in oases where improvements or additions to landed propertyhave been made, without the express or implied consent of the ownerof the property, by a person in possession of the property. A personwho expends money or labour in improving property with the intentionof doing so for his own benefit whereas in fact he had no right or titleto the property, in consequence of which the improvements are acquiredby the owner of the property by virtue of accession is entitled to claimfrom the latter the amount by which the property has been enhancedin value.
Improvements of this nature are effected as a rule to the land of oneperson by a bona fide possessor of the land, such as a fiduciary., or bya person who believes that he is a fideicommissaiy. A bona fide.occupierof land such as a person occupying land under the mistaken belief thathe has a lease of the property has the same right to compensation as abona fide possessor. ”
Earlier editions of this work had substantially the same statement.
In “ The South African Law of Obligations ” by Lee and Honore(1950), paragraph 713 at p. 189 runs as follows :
“ Preservation and improvement of property. A person who preservesthe property of another from loss, deterioration or destruction, or who,acting -on his own behalf, improves the property of another in the belief
1 (191-4) IT N. L. B. 273.
VISCOUNT SXMOXDS—HassanaUy u. Cassim
533
that it is or will be his own (or in some cases that it belongs to a thirdperson) may claim compensation from the owner for necessary anduseful expenses thereby incurred not exceeding the value of the benefitaccruing to the owner. ” For this proposition numerous cases werecited to some of which their Lordships will now refer. Before doingso they observe that in the present case the often troublesome questionswhether the improver has acted bona fide or mala fide and whether heis entitled to remain in occupation of the land until compensation hasbeen paid do not arise. The bona fides of the fifth defendant is admittedand the appellants do not in a partition action claim to remain inpossession.
In 1874 the case of jBellingham v. JBloomeije1 was decided by Villiers C.J.in the Supreme Court of the Cape of Good Hope. It must be examinedat length because it goes to the root of the matter and it has not beenfully appreciated in the Supreme Court of Ceylon. The headnote sofar as material is as follows ** Where a person has bona fide built uponland not his own he is entitled to compensation for useful expensesincurred by Tnm to the extent to which the value of the land has beenenhanced by the building. ” The defendant acting in good faith andthe belief that he had a lease of certain land, which in fact did not formpart of land leased to him, built on it a house and a dam. Thetrue owners sought to evict him. It was held that he was entitled tocompensation for the amount by which the value of the land wasenhanced by the house and dam. At page 38 of the Report the ChiefJustice says “I am of opinion that the appellant had not sufficientreasons to believe he was building on another man’s ground but thathe was the bona fide occupier of the land …. All the RomanHutch authorities are agreed that where a bona fide occupier has builtupon land belonging to another he is entitled to compensation for theuseful expenses incurred by him, that is to say, for the expenses to theextent to which the value of the land has been enhanced by the building. ”For this proposition the learned Judge cites a wealth of authority,including Voet & Grotius, and then goes on to discuss the rights of amala fide possessor, which are not now relevant. But the salient factis that in this case the improver, who was held to be entitled to compensa-tion, thought that he was, but in fact was not, the lessee of the land whichhe had improved. It was because he bona fide thought that ho wasentitled to occupy the land and in that belief improved it, that his claimto compensation arose. Nothing turned on the fact that he was trulythe lessee of the adjoining land or that his bona fide mistake was aboutthe boundaries of the land demised. He was a bona fide occupier.
In Parkin v. Lijyp&rt2 the facts were somewhat complicated but thecase illustrates the importance of bearing in mind the distinction betweenimprovements effected by a lessee whose lease endures for the stipulatedterm and those effected by a lessee whose term is prematurely determinedby operation of law. The material part of the headnote is as follows 1 2
1 Buchanan's Reports page 36.
2s-
-J. X. B 23495 (4/60)
2 {1395) 12 S.O.R. 119.
534
VISCOUNT SIMONDS—HassanaMy v. Cassim
** Where a lessor takes advantage of the law ■which, puts premature endto a lease upon the insolvency of the lessee, he is liable, in the absenceof any stipulation to the contrary, to the trustee of the lessee’s estatefor the value of improvements made by such lessee in contemplationof the lease being allowed to run its full term and to a sub-lessee to whomthe lessee had legally sublet the land before his insolvency and who incontemplation of the lease continuing to its end had made snchimprovements. ” The same learned Judge having invoked the principlethat “ the presumption against forfeiture of property in any shapeor form lies at the root of the well-known maxim of our law that noone shall be enriched at the expense of another ” observed that therewas no difference in principle, although there might be in degree betweenthe case of a lease being abruptly terminated by the operation of aspecial law and that of a bona fide possessor making improvements inthe belief that he will have the permanent enjoyment of them. Herethen was the case of an improver who, lawfully occupying under a leaseand in that capacity making improvements, was entitled to compensationbecause his occupation was prematurely determined.
In Mubin v. Botha1 the essential facts closely resembled those of thepresent case and the decision derives special importance from the factthat it was that of Lord de Villiers C.J., Times J. and Maasdorp J.P.There the plaintiff and defendant entered into an agreement of leaseunder which the plaintiff was to have the use and occupation of aportion of the defendant’s farm for ten years without payment of rentand was to erect a building thereon which at the expiration of thatperiod was to become the property of the defendant. After the plaintiffhad erected the building and been in occupation of the building forthree years the defendant gave him notice to quit on the ground thatthe agreement was null and void as not having been executed as requiredby the Transvaal law. It was held that the plaintiff was entitled tobe paid for the improvements to the extent to which the value of thedefendant’s farm had been improved thereby less the value of theplaintiff’s use and occupation for three years. There was a differenceof opinion as to the quantum of compensation which does not arise inthe present case, but there was unanimity upon the right to somecompensation. Some passages may he quoted from the judgment ofthe Chief Justice with whom Massdorp J. agreed. “ The present ease ”he said “ differs from the many cases in the Cape Supreme Court relatingto the compensation payable to the owner of land by the person effectingimprovements thereon in this respect that the improvements were madeby a person who knew that he was not the owner and intended that thebuildings should become the property of the owner hut believed thathe would as lessee enjoy the use and occupation for the full periodcontemplated by tbe lease executed between him and the owner. Thatlease proved to be null and void by reason of its not being notarial andthe question to be determined is what should be the basis of thecompensation admittedly payable by the defendant to the plaintiff. ”The learned Chief Justice then referred to his decision in Bellingham v.Bloometje, which has already been cited, and to the authority of
1 S.A.jS.C.S. App. Div. 1911 page 568.
VISCOUNT SIMONDS—Hasaanally v. Cassim
535
•Crrcenewegen upon which it had been decided, and said “ Lessees ashas often been pointed out in the Cape cases, especially in De Beers Minesv. London <& South African Exploration Company (10 Juta 359) stand on adifferent footing from other occupiers as their rights have been definedby special legislation. Where however as in the present case, the relationof lessor and lessee does not exist between the owner and the occupierby reason of the agreement of lease proving null and void, there is novalid reason why the basis of compensation applicable to lessees shouldbe applied to improvements made by the occupier. ” Then after referringto the already cited case of Parkin v Lip-pert the Chief Justice said“ The plaintiff was not a “ possessor ” in the strictly juristic sense ofthe term but he was a bona fide occupier who believed he had the rightnot only of occupation but of erecting the buildings on the land sooccupied. True it is that he intended that the building should becomethe property of the defendant but only upon the expiration of the tenyears during which the occupation was to last. The defendant tookadvantage of the law which, by declaring the lease to be void, frustratedthe true intentions of both parties, and there appears to me to be noreason in the world why he should not be subject to the equitable rule-of the X)utch law that no one should be enriched to the detriment andinjury of another. ” Then a little later “ The defendant in the presentcase took advantage of the law which declared bis agreement to be void■and he cannot insist upon compensation being payable as if the leasehad been a valid one. ”
Their Lordships have referred at length to this case both becauseit appears to them to apply in an unimpeachable way the cardinalprinciple of Roman Dutch Law in regard to unjust enrichment andbecause it was ignored in the leading case of Soysa v. Mohideen to whichthey will presently recur. But before doing so they will mention thecase of Fletcher v. Bulawayo Waterworks Company Ltd1. In that caseagain the defendants had leased a piece of land but had by mistakesunk a well beyond its boundary within the plaintiff's land. The plaintiffbringing an action for ejectment, the defendants claimed compensationfor the improvement effected by the sinking of the well. The Court(consisting of Lanes C.J., Solomon J.A. and Maasdorp J.A.) consideredand applied Rubin v. Botha and held that they were entitled to it. Thereis much in the judgments of all three judgments which illuminates theprinciple but their Lordships think it sufficient to cite a single passagefrom the judgment of the Chief Justice : “ But it ” he said (the caseof Robin v. Botha) “ certainly did decide that a person who had madeimprovements upon the land of another, not as possessor but under themistaken idea that he was a lessee, was entitled to compensation on■the same basis as a possessor, subject to an. equitable deductionnecessitated by the special circumstances. ”
Why then, it must be asked, did the Court in the present case denyto the 5th defendant the right to compensation, thereby depriving him-of the fruit of his labours and expense and permitting the unjust
1 (1915) S.A.LJt. App. Div. 636.
536
VISCOUNT SIM ONUS—Ha^sanaUy v, Cas&im
enrichment of the co-heirs ? The answer is found in Soysa v. MoMdeen-•which, rightly perhaps, appeared to them to be a binding authority.
It must therefore be closely examined. Two important points wereraised in the case, only one of which is relevant to the present question,and the facts can be shortly stated. A parcel- of land which was subjectto a iideioommissum had been occupied by the defendant in the actionas lessee of one of the fiduciarii who was entitled to one half of theproperty and had agreed to pay him half the value of the buildings-upon the termination of the lease. The plaintiffs, the fidei commissarii,(the fiduciarii having died) successfully challenged the validity of thelease, whereupon the defendant claimed to retain possession of theland until the plaintiffs paid him half the cost of his improvements.This claim was rejected by the Court, and once again their Lordshipsmust cite considerable passages of the judgment, pointing out with,respect how error has found its way into their conclusions. At a firsthearing before Lascelies C.J. that learned Judge said “I think therecan be no doubt that under the Roman-Dutch law a lessor had not thejus retentionis which would entitle him to remain in possession againsta successful claimant until he has been compensated for improvements.The occupation of a lessee is not possessio civilis, for he does not occupythe property in the belief that it is his own. On the contrary his interestin the property is defined and limited by the terms of the lease ”. Thelearned Chief Justice thought that the uncertainty which existed uponthat branch of the law should be set at rest and adjourned the case forre-argument before the Collective Court. The observation that hasbeen cited proved to be the basis of the judgment of that Court. The-Chief Justice himself added little to his previous judgment. De-Sampayo A. J. opens the relevant part of his judgment with the words“ A lessee is not a bona fide possessor and is therefore not entitled tocompensation for improvements on that footing ”. Their Lordships-observe that he, like the Chief Justice, assumes that he is dealing witha claim by a lessee whereas the very basis of the claim is that the lease?has been repudiated and that he cannot claim under it. In the words-of .Lord de Villiers he was not a possessor in the strict juristic sense bat-he was a bona fide occupier who had effected improvements in themistaken belief that he would enjoy them for the term of the lease.The learned Judge proceeded to distinguish other cases upon which,their Lordships do not think it necessary to pronounce. His judgmentwas in their Lordships’ view vitiated by the original erroneous assumption.None of the cases in the South African Courts, to which reference has-been made, were noticed by the Court. Pereira J. fell into the same-errors. After stating that it was well settled law in the colony that,in order to be entitled to compensation for improvements, a personshould have not only possession of the property but bona fide possessionof it and that by “ possession ” is here meant what is known to the civillaw as the possessio civilis as distinguished from the possessio naturalisehe held that a lessee has not possessio civilis of the land that he enjoys
VISCOUNT SUIOXT3S—Hassavally a. Cas&fm
537
under the lease, for he knows that the land he enjoys does not belongto him : therefore he is not entitled to compensation for improvements.The question whether or not the possession of a lessee is possessio civilismay be open to argument. But in this context it is beside the point.For, as already stated, the claim made by the defendant in the caseunder review (like the claim made by the appellants in the present case)was not made qua lessee but in respect of the bona fide occupation ofland under a lease which had been repudiated. It would, as theirHardships think, be difficult to imagine a clearer violationof the moral principle upon which the rule against unjustenrichment rests, than that an owner, who has, for whatever reason,prematurely brought a lease to an end, should at once deny to the lesseethe rights which the lease or the common law gives him as lessee and,because he was a lessee, deny also his claim to compensation forimprovements. Their Lordships must accordingly pronounce that thiscase was wrongly decided and have the less reluctance in doing sobecause, long though the decision has stood, no questions of title can beaffected by a contrary view of the law.
But though this decision has stood for so many years, there have beenin the Courts of the Island of Ceylon cases which in principle are noteasy to reconcile with it. Thus in Hevavritarane v. JDangan RubberCompany Ltd.1 (a ease decided shortly before Soysa v. Mohideen) itwas held that a “ bona fide possessor ” need not necessarily be the ownerof the property possessed, nor need he have a legal right to possess ithut that it is sufficient if his possession is the result of an honest convictionin his mind of a right to possess. These words were quoted with approvalhy Wood Renton A.C.J. from Pereira Right to Compensation and werenot dissented from by the same Pereira J. who was a party to the decisionin the later ease. It would seem that a discrimination between thesetwo cases can only rest upon a confusion as to the capacity in which a-person, who thought he occupied under a valid lease but did not,claims.
A case which usefully illustrates the spirit in which the principle has"been developed is the Government Agent, Central Province v. LetchimanChetty 2. There the relevant facts (taken from the head note) were thatthe Government Agent took steps to acquire a swamp under the LandAcquisition Ordinance but suspended it. On the outbreak of plaguehe entered into possession under the Plague Regulations and in antici-pation of the conclusion of the acquisition proceedings improved the landby filling it and draining it with drains which extended out of the land.hTo formal order of possession was obtained under the Land AcquisitionOrdinance. At this stage the scheme was modified, and the old pro-ceedings under that Ordinance were abandoned and new proceedingsstarted. The question then was whether the land should he valued as atthe date of the award in those proceedings, or whether the Government
1 [IS 13} 17 N.hJt. 49.
3 {1922) 2d N.L.B. 37.
538
VIS COUNT SIMONDS—Hassanatty v. Gassim
Agent was entitled to compensation for improvements effected bv himwhile he was in possession. He was held to be so entitled npon the-ground that he was a bona fide possessor, fear a person who takespossession of land and executes improvements upon it in expectation ofa formal title which in good faith he believes himself certain to obtainmay be such a possessor. Bertram 0. J. in a weighty and learned judgmenttreats of the development of the law, observing “ In my opinion it wouldbe a most unfortunate position, if the law had not developed principles-which would enable it to deal justly with such a case. ” In that casethe question was mainly whether the possession was maJa. fide or bona-fide. No doubt appears to have been entertained that if there was.bona tides a valid claim to compensation was established. Again it*appears to their Lordships that upon any equitable principles it isunjustifiable to deny to an evicted lessee compensation which is awarded!to one who has no title at all however firm may be his belief that he-will get one.
Reference must now he made to Appuhamy v. The Doloswala Tea andRubber Company Ltd.1. In that case there was much discussion of therights of a lessee in respect of improvements and Garvin A. J. said“ It is well settled law that in Ceylon a lessee who has improvedhis leasehold cannot maintain a claim for compensation in respect ofthese improvements against a third party who establishes a title superiorto that of his lessor from a source other than the lessor. The law was-declared in this sense in the case of Soysa v. Mohideen. Since the decisionof that case nothing new has been discovered in the writings of thejurists,The learned Judge then referred to the two South African,oases whieh have already been examined Bellingham v. Bloometjerand Rubin v. Botha and said “ In neither of these cases was compensation:granted to the improver in his character of lessee of the property im-proved. Indeed it was the circumstance that he was not inlaw thelessee of the premises which enabled him to contend that he was a-possessor who entered upon the premises bona fide and with the intention:of holding and enjoying the premises, if not as owner, at least for a-specified period of time and entitled in equity to a measure of compensa-tion assessed on that footing. ” It is difficult to understand why the-aeknowledged principle of those cases did not apply to the case before the-leamed Judge. But at least he did not dissent from it and the highauthority of Garvin J. may be Baid to reinforce that of the distinguished.South African Judges who affirmed the right to compensation in such a-case.
In Jasohamy v. Podihamy a the right of compensation for improvements^was extended to a usufructuary who made improvements with theconsent and acquiescence of the owner. The interest of the case lies inthe fact that Keuneman J. cites from Wille’s Principles of South African.Law (1937 Edition) p. 353 the passage which has already been quoted^It will he observed that the generality of the statement of the relevant.
1 {1923) 25267.
{1913) 44 NJJt. 385.
YISCOU1NT SIMONDS—Hassanally v. Cassim
539
law in this citation, does not exclude the case of a person who occupiesland and improves it in the mistaken belief that he is a lawful lessee.This view is enforced by the fact that the learned Judge then referswithout disapproval to the cases of Rubin v. Botha and Fletcher v.Bulawayo Waterworks Company Ltd.
Learned counsel referred their Lordships to many other cases in which,as he contended, the Courts of Ceylon had sought to mitigate the rigourof the law as laid down in Soysa v. Mohideen by means of the doctrine ofacquiescence or otherwise. But they think it unnecessary to examinethem and will return to the case under appeal. As already observed theJudges of the Supreme Court founded their judgment on Soysa v.Mohideen and in particular on the passages that have already beencited from the judgment of Pereira, J. Mr. Justice Fernando concludesthe relevant part of his judgment by saying that, having consideredmany of the cases subsequent to Soysa, he would hold that none of themhad in any way qualified the principle therein laid down that the rights, ifany, arising from a contract between a lessor and lessee cannot be enforc-ed by the lessee as against the fideicommissary owners who were notparties to the contract. This passage serves to emphasise in the clearestway the error which permeates Soysa’s case and the case under appeal.In that case, as in this, the claim of the improver was based not oncontractual rights under the lease but upon an equitable principle whichis an application of the cardinal rule against unjust enrichment. It isbeside the mark to discuss whether the possession of a lessee is civilis ornatur&lis for it is not as lessee that the claim is made. It is, on thecontrary, because he is denied his contractual rights by the prematuretermination of the lease, that he asserts his claim to compensation. TheirLordships entertain no donbt that in allowing it they follow the line ofdevelopment of an important equitable principle, and derive some satis-faction from the fact that the law of Ceylon will thus be brought intoharmony with that established in South Africa nearly a century ago.
As they take this view upon the main question that was argued, theirLordships do not think it necessary to discuss an alternative claim, whichwas founded on the view that the lessor, Zaneera TJmma, was entitled tocompensation as between herself and her co-heirs and that by subrogationthe fifth defendant and therefore the appellant's are entitled to thebenefit of her claim. This is a matter which may in some other case callfor determination. It is unnecessary and would be inexpedient to dealwith it now.
Their Lordships are satisfied that the final adjustment of the rightsof the parties including the party claiming compensation as an improvercan and should he made in the partition suit. The amount of compensa-tion, if payable, has not been disputed, nor has any equitable plea beenadvanced for its reduction.
540
The Qtieen v. Mahatun
Their Lordships will therefore humbly advise Her Majesty that theOrder of the Supreme Court should be set aside, that the Order of theDistrict Court should be restored so far as it directed the sale of theproperty in accordance with the provisions of the Partition Act 1951and the bringing of the proceeds of sale into Court to abide furtherorder and the payment of costs but that provision should be made bysuch farther order for paying the sum of Rs. 25,125*45 thereout to theappellants in priority to the beneficial interests of other parties.
The respondents must pay the costs of the appellants in the SupremeCourt and of this appeal.
Appeal allowed.