IMBULDENIYA v. D, DE SILVA

037-SLLR-SLLR-1987-1-IMBULDENIYA-v.-D-DE-SILVA.pdf


IMBULDENIYA
v.D. DE SILVA
SUPREME COURT.
SHARVANANDA, C.J., WANASUNDERA, J.. ATUKORALE. J.. L. H. DE ALWIS. J. ANDSENEVIRATNE. J.
S.C. No. 62/85.
A. No. 351/76 (F).
C. KANDY 10767.
NOVEMBER 24, 25 AND 26, 1986.
Landlord and Tenant-Contract of letting-Landlord letting premises without owner'sauthority and not as his agent- Vindicatory suit-ls the entity of protection of the RentAct the premises or the contract of tenancy?-Rent Act No. 7 of 1972. s. 22 (2) ands. 46.
A contract of letting is a contract whereby one party agrees to give another the use of athing and the other party agrees to pay him a price (rent) in return. In order to grant avalid and effective tenancy a landlord must have sufficient legal title in the property togive to the tenant the right agreed upon. A person without any title to a particular pieceof property may grant a tenancy thereof to another person. Such a tenancy is validbetween the landlord and tenant but is not binding on the true owner.
Where the father of the plaintiff let out the premises to the defendant for his own benefitat a time when the plaintiff was not aware she was the owner and without her authorityand not as her agent and the plaintiff neither acquiesced in nor adopted the letting, thedefendant cannot claim the protection of s. 22 (2) of the Rent Act against the plaintiff.
It would be quite wrong to include within the definition of 'landlord" any person otherthan the original lessor or someone who derives the title from the original lessor. Theterm ‘landlord" is defined as the person for the time being entitled to receive the rentunder the contract of tenancy (s 48 of the Rent Act). Such person need not necessarilybe the true owner.
Per Sharvananda, C.J.
"The Rent Act does not give any protection to a tenant against a person who is not hislandlord."
Per Seneviratne, J.
"The entity of protection' granted by the provisions of the Rent Act is the ‘contract oftenancy'and not the premises.":
Cases referred to:
Glatthaarv. Hussan-1912 T.P.D. 127.
De Alwis v. Perera-(1951) 52 NLR 433, 444.
Britto v. Heenatigala-(1956) 57 NLR 327.
Jayatunga v. Rosalinahamy-(1975) 78 NLR 213, 214, 215.
Ranasinghe v. Marikkar-{1970) 73 NLR 361.
Sathirv. Najeare-(1978) 79 (2) NLR 126. 134.
Annamalai Chettiar v. Greasy-(1955) 56 NLR 477.
David Silva v. Madanayake-11967) 69 NLR 396.
Wahabdeen v. Abdul Cadar-(1975) 79 (2) NLR 462.
Alles v. Krishnan-(1952) 54 NLR 154.
Visvalingam v. Gajaweera~(1954) 56 NLR 111.
Lloyd v. Cook-(1928) 139 LT. 452, 457; [1929] 1 KB 140.
Fernando v. De Silva-(1966) 69 NLR 164.
Rudler v. Franks-[ 1947] KB 530.
Clark v. Lownes- 145 L. T. 20.
DeSilvav. Siriwardene-(1946) 47 NLR 487.
Hull, Blyth & Co. v. Valiappa Chettiar-(1937) 39 NLR 97.
Chow v. De Alwis-(1946) 47 NLR 43.
APPEAL from judgment of the Court of Appeal.
K. Kanag-lswaran with S. Mahenthiran for appellant.
H. L. de Silva, P. C. with Nimal Senanayake, P. C., Miss S. M. Senaratne, Saliya Mathew,Miss S. N. Adithiya de Silva, Miss Shanika Rodrigo and Chanaka de Silva forrespondent.
Cur. adv. vult.
January 29. 1987.
SHARVANANDA, C. J.
The plaintiff-respondent instituted this rei vindicatio action on14.3.1975, against the defendant, praying for:
a declaration that she is the lawful owner of and entitled topossession of the premises in suit, and
for ejectment of the defendant from the said premises and fordamages.
The plaintiff averred that she became the owner of the premises onDeed of Gift No. 457 dated 17.1 1.1962 and that the defendant hadentered into wrongful possession of the premises from or aboutFebruary 1968. The defendant in her answer pleaded that she hadbecome a tenant of the premises in suit from 1.2.68 under one A. J.W. Gunawardena and that she had paid all rents up to the end ofFebruary 1975 to her landlord and that she continued to be inoccupation of the premises as a tenant. The defendant further statedthat since her landlord the said A. J. W. Gunawardena had died on8.9.75, she was willing to continue to be in occupation of thepremises as a tenant thereof. The defendant further stated as a matterof law that as the premises in suit are rent-controlled premises,subject to the provisions of the Rent Act No. 7 of 1972, the plaintiffcannot have and maintain this action.
After trial the trial judge dismissed the plaintiff's action with costs,on the ground that:
"As the defendant is the tenant of the premises, the plaintiff is not
entitled to the reliefs prayed for in the prayer of the plaint."
The plaintiff preferred an appeal to the Court of Appeal and thatCourt by its judgment dated 2.8.1985 set aside the judgment of theDistrict Court and entered judgment for the plaintiff as prayed for withcosts. The defendant has now preferred this appeal to this Court.
This appeal was heard by a Bench of five judges on a direction givenunder Article 132(3) of the Constitution.
At the trial it was admitted by the plaintiff that the defendant enteredinto occupation of the premises on 1.2.1968 as a tenant, and that thepremises in suit are premises governed by the provisions of the RentAct.
It is not disputed that the plaintiff is the owner of the premises insuit, having become so entitled to same by virtue of Deed of Gift No.457 of 1.9.1962 from her father, A. J. W. Gunawardena, that thesaid A. J. W. Gunawardena (plaintiff's father) after having so giftedthe property to the plaintiff, let out the premises to the defendant inFebruary 1968 and collected and appropriated the rent to himself. Hehad so let without any authority from the plaintiff and for his ownbenefit. The premises are residential premises.
From the evidence led in the case it would appear that the plaintiffand her husband were under the impression and belief that the donor,A. J. W. Gunawardena, had reserved to himself life interest in thepremises in suit. The plaintiff had not seen the Deed of Gift and hadaccepted her father's assertion that the gift was subject to his lifeinterest and that he could lawfully let out the premises for his ownbenefit. Labouring under this belief the plaintiff and her husband did
not dispute the right of Gunawardena to let the premises to thedefendant. The plaintiff's father had reported to the Tax Department,that he had gifted the house to the plaintiff subject to his life interestfor himself and his wife, The Income Tax Department had so informedthe plaintiff. The reasonableness and genuineness of the belief of theplaintiff consequent to her father's representations to her that he wasentitled to life interest of the premises is not questioned. It was only inJuly 1974, that the plaintiff became aware that her ownership of thepremises was absolute and not subject to any life interest in favour ofher parents, after she had got a copy of letter dated 20th July 1974(P8) sent by Gunawardena to the defendant. By this letterGunawardena requested the defendant to remit the house rent infuture to the plaintiff, as she was the owner of the premises. This wasthe first intimation that both plaintiff and defendant had that theplaintiff was the absolute owner of the premises.
From the above facts, the following conclusions emerge: that theplaintiff's father Gunawardena was the landlord of the defendant andthat he rented out the premises to the defendant in 1968 when hehad no authority from the plaintiff to do so, as he had by Deed of GiftP1 in 1962 made an absolute Gift of the premises to the plaintiff andthe plaintiff had become the absolute owner thereof, whenGunawardena rented the premises to the defendant he was not actingas the agent of the plaintiff, he had no right or authority to rent out thepremises to the defendant; the plaintiff never acquiesced in oradopted the letting by her father to the defendant.
The question that comes up for decision in this case is whether thedefendant, the tenant of the premises under Gunawardena, couldclaim the protection of the Rent Act, as against the plaintiff, whothough, at all relevant times was truly the owner of the premises insuit, had not authorised the letting.
The principal argument of counsel for the defendant was thatsection 22(2) of the Rent Act 1972 applied to the relationship oflandlord and tenant and that the statutory protection enjoyed by thetenant against his landlord would be available against the true owneralso. He submitted that the defendant had acquired the status of"tenant” and that "the entity of protection" granted by the provisions ofthe Rent Act is the "premises" and not the contract of tenancy. Hecontended that even though the plaintiff was the owner of thepremises, the defendant could not be ejected from the premises in suitexcept by her landlord and that in any event a decree for ejectmentcould be founded only on the grounds specified in section 22(2) of theRent Act; that as the action for ejectment had not been based on anyone of those grounds, the plaintiff cannot have and maintain thisaction. He stressed that section 22(2) commenced with the nonobstante clause "notwithstanding anything in any other law" and thatlandlord has been defined to mean "the person for the time beingentitled to receive the rent of such premises." He argued vehementlythat the Rent Act applies to the house and not to persons and that thisprovision of the Act operates in rent and not in personam. Hecontended that the Rent Act operates on property.
The main object of the Rent Act was to give a tenant security oftenure by preventing his landlord from evicting him without a decree ofcourt. The Act enjoins the court not to make order for possessionexcept on the grounds specified in section 22 and other relevantsections. The Rent Act confers upon the tenant protection from beingevicted by his landlord except on certain specified grounds. It therebyimposes restriction, upon the landlord’s right to possession of thepremises after the contractual tenancy had come to an end. Theburden rests on the landlord to establish the existence of one of thespecified grounds for obtaining possession.
A contract of letting is a contract whereby one party agrees to giveanother the use of a thing and the other party agrees to pay him aprice in return. The price to be paid is known as rent. The parties to atenancy acquire contractual rights against and become subject tocorresponding duties in favour of each other. In order to grant a validand effective tenancy, a landlord must have sufficient legal title in theproperty to give to the tenant the right agreed upon. A person withoutany title to a particular piece of property may grant a tenancy thereofto another person. Such a tenancy is valid between the landlord andtenant but is not binding on the true owner. It is not a valid letting andis ineffectual against him. The absolute owner of property always hassufficient title to grant a lease or tenancy of such property. So is aperson who has real rights in property less than ownership, that is ajus in re aliena but which comprises the use and occupation of theproperty. Such a person has sufficient title to grant a lease or tenancyof the property which will be effective for the period of his own rightand not beyond it. Thus a usufructuary may validly lease or let a
property in which he has the usufruct but only for the period of his ownright, and any portion of lease beyond such period is not binding onthe owner of the property.
It is well settled law that a person may let to another, propertywithout having any right or title in it, and without any authority from thetrue owner. Such a letting is valid as between the landlord and thetenant. However the owner of the property is not bound by the lettingof such property which is made without his authority or consent orsubsequent ratification.
Wessels, J., in Glatthaarv. Hussan{ 1) said-
"It is true that I may lease to you another's land and if I do so youcannot question my title nor can I deny to you the right to holdingthe land against me, but this in no way prejudices the right of thetrue owner.”
The true owner is entitled to have the letting declared null and voidand to an order evicting the person in occupation who claims to be thetenant. But between the parties to the letting, the lease is binding, andthey acquire the rights and become subject to obligations of landlordand tenant respectively.
According to the common law as enunciated above, the tenancywhich Gunawardena granted to the defendant will not bind the plaintiffwho at all relevant times was the true owner of the premises; theplaintiff would be entitled to an order evicting the defendant who is atrespasser as against her.
But counsel for the defendant submitted that the Rent Act hasfundamentally altered the situation and that it is not open to theplaintiff, who is the owner of the premises and in breach of whoserights of ownership, Gunawardena had granted the tenancy to thedefendant, to repudiate the invalid letting. He submits that the plaintiffis, as a result of the operation of the Rent Act, not entitled to an orderof ejectment even though she is not the "landlord" of the defendant inrespect of the premises in suit. His argument predicates the positionthat once a person becomes a tenant of rent controlled premises,whether under the true owner or under a person who has no right tothe property and who could not validly let, he could not be ejectedexcept in terms of the provisions of the Rent Act. I cannot agree withthis submission.
If counsel's proposition is accepted a sub-tenant cannot be ejectedby the head-landlord as a sub-tenant of the premises is “tenant” of thepremises under his landlord, viz., the tenant. Counsel had to admitthat a sub-tenant can be ejected on a decree of ejectment against thetenant. The construction contended for, impinges on an establishedprinciple of the law of property. There is no indication in the Act thatthe legislature intended to overthrow fundamental principles of thecommon law. Clear language is necessary to alter the common law. Aright of the owner of property to sue for ejectment of a trespasser canonly be taken away by a definite and positive enactment. Thedefendant might have entered the premises in suit underGunawardena, but she entered and is remaining in the premises as atrespasser vis-a-vis, the plaintiff.
In my opinion the provisions of the Rent Act apply only to those whoare parties to the contract of tenancy and to those who derive titlefrom them respectively.
The Rent Act controls the right of a landlord and not of the owner ofrent-controlled premises to sue the tenant. The landlord would interms of the contract, be the person who let the tenant in and thusbecame entitled to receive the rent of such premises (Vide section 48of the Rent Act). I agree with Gratiaen, J., that it is not legitimate that alandlord must be defined as not only one who is entitled to receive hisrent but as one who has jus in re in regard to the premises. Vide DeAlwis v. Perera. (2) If the owner of the premises was not a party to thecontract of tenancy by himself or on derivative title, he does not comewithin the definition of "landlord” in section 48 and hence is notentitled to receive the rent of the premises. Unless he was thus a partyto the contract of tenancy the owner cannot be identified with thelandlord. Section 22 of the Rent Act applies only when a landlordwhether he is the owner of the premises or not, seeks to eject thetenant of the premises, and not when a owner qua owner seeks toeject a person who is a trespasser towards him but who claims to bethe tenant under a third party who had no right to let the premises tohim.
I gratefully adopt in this context the statement of the law byGratiaen, J., that-
"It would be quite wrong to include within the definition of'landlord' any person other than the original lessor or someone whoderives the title from the original lessor. If, therefore, the true owner
of the leased premises vindicates his title against the tenant'scontractual lessor, the statutory protection which the tenant enjoysagainst the lessor would not be available against the true owner.Britto v. Heenatigala. (3)
In Jayatunga v. Rosalinahamy (4) Tennakoon, C.J., stated-
“It seems to me patent that section 13 (of the Rent RestrictionAct, Cap. 274) is a limitation of the right of a landlord to institute ormaintain an action against his tenant and is not a limitation of theright of other persons who do not fall within the meaning of the term"landlord", as used in the Act, to maintain an action against theperson in occupation of the premises and claiming to be a tenant ofsome other person."
I agree with Tennakoon, C.J., that when the Rent Restriction Actdefines the term "landlord" as the person for the time being entitled toreceive rent of such premises, it is referring in the first place to theperson entitled under the contract of tenancy to receive the rent andnot necessarily to the true owner, who may not, in relation to theparticular tenancy of the premises in question, have been the personwho let the premises.
In Ranasinghe v. Marikkar (5) a Divisional Bench of five judges heldthat where there is a valid letting of the entirety of the premises towhich the Rent Restriction Act applies, a sale of the premises underthe Partition Act does not extinguish the rights of the tenant as againstthe purchaser, but if rent controlled premises are owned by co-ownersand one of them leased the entirety of the premises without theconsent or acquiescence of the other co-owners, the protection of theRent Restriction Act is not available to the tenant as against thepurchaser who buys the premises subsequently in terms of aninterlocutory decree for sale entered under the Partition Act. In such acase a tenant cannot resist an application by the purchaser to beplaced in possession of the premises. The ratio decidendi of this casemilitates against the submission of counsel that once a personbecomes a tenant of rent controlled premises, he is protected againsteviction not only by his landlord but by owners who become entitled to. the premises not on a derivative title from his landlord, but on a titleindependent of that of the landlord.
In my view the availability of the protection of the Rent Act to thetenant in occupation against the 3rd party depends on the answer tothe question whether the original letting was a valid one and whetherthe title of the plaintiff in the rei vindicatio action is derivative title fromthe tenant's landlord. If the plaintiff claims the premises against suchlandlord and that landlord had no right or title to let out the premisesas against the owner, the tenant, cannot claim the benefit of theprotection of the Rent Act. The Rent Act does not give any protectionto a tenant against a person who is not his landlord. Sathir v. Najeare(6).
Counsel for the defendant-appellant relied heavily on the dissentingjudgment of Gunasekera, J., in Jayatunga v. Rosalinahamy (supra) (4)as supporting him. In that case the facts were as follows: AF was theoriginal owner of the premises in suit. By his Last Will he bequeathedthe premises to his daughter MF subject to a fidei commissum infavour of the children of KF. MF died on 23.4.1968 and her children,the 1-6 plaintiffs became owners of the premises as fideicommissary successors. The defendant originally came into theoccupation of the premises as a monthly tenant under MF. On30.6.1968, the plaintiffs filed action for a declaration of title and forejectment of the defendant, on the basis that the contract of tenancywith MF, the fiduciary, came to an end with the extinction of thefiduciary's right, and that the defendant had therefore become atrespasser. The premises were admittedly governed by the RentRestriction Act, No. 29 of 1948. The defendant claimed theprotection of the said Act and prayed for a dismissal of the*action. Itwas held by Tennakoon, C.J., and Vythialingam, J., (majority) that the' plaintiffs were not barred from maintaining the action inasmuch asthey did fall within the meaning of the term "Landlord", as defined inthe Rent Restriction Act. They held that the said Act can have noapplication to one who was neither the original common law landlordnor the successor in title. Gunasekera, J., dissenting from the majorityheld:
"In this case the respondent (defendant) admittedly entered thepremises under a valid contract of tenancy from the then lawfulowner of the premises and so became the 'tenant of the premises'protected thereafter for all times from ejectment except in terms ofsection 13 of the Rent Restriction Act."
But it is to be noted that Gunasekera, J., premised his enunciation ofthe law by stating:
"We are not here concerned with the rights of "true owner"vindicating title against the tenant and his landlord, because in thiscase the defendant admittedly entered the premises under a validcontract of tenancy from the then lawful owner of the premises."
Nothing said by Gunasekera, J., militates against the position that ifthe defendant-tenant did not enter the premises under a valid contract’ of tenancy from the then lawful owner of the premises he would not beentitled to the protection of the Rent Act from being evicted by theowner.
Counsel for the defendant-appellant referred to the conflictingjudgments of the Supreme Court, where the issue involved was-
"Where the original letting was by a fiduciary or usufructuary andhence was valid letting, could the plaintiff claim to be a tenantentitled to the benefit of the Rent Restriction Act in respect of rentcontrolled premises as against the new owner on the extinction ofthe fiduciary or usufructuary rights?"
It is not necessary to go into this disputed question as the presentcase can be distinguished from all those cases on the basic premisethat the original letting here was not a valid letting. Gunawardena hadno right or title to let the premises in suit to the defendant and hencehis letting was an invalid letting; there was no valid contract of tenancybinding the plaintiff who was the lawful owner of the premises at therelevant times. In 1968 when the tenancy commenced bothGunawardena and the defendant were trespassers as against theplaintiff. Since the plaintiff had not become owner after a lawful letting,Gunasekera, J's dissenting judgment does not help the defendant.
Counsel referred us to Annamalai Chettiar v. Greasy (7) where itwas held that when a person purchases from a landlordrented-premises to which the Rent Restriction Act applies, hebecomes the tenant's landlord by virtue of the definition of the term insection 27 of the Act. It is to be noted here that the purchaser deriveshis title from the "landlord", who was entitled in law to let out thepremises. This does not touch the question where the original landlordcould not have validly let the premises. Counsel referred to David Silvav. Madanayake (8) and to Wahabdeen v. Abdul Cader (9) in support of
his proposition that when the landlord donates or sells the premiseswhich have been rented out by him the tenant has the election tocontinue to be the tenant of the premises and the status of statutorylandlord is transferred to the purchaser or the donee or vendor. Hereagain there was no question of the validity of the original letting by thevendor or donor. Since the plaintiff in both these cases had onlyderivative title, derived from the original landlord, who was the lawfulperson to let out the premises, the purchaser or the donee was boundby the tenancy entered into by his predecessor in title.
In view of the above holding I cannot agree with the contention ofcounsel for the defendant-appellant that the "entity of the protectiongranted by the Rent Act, No. 7 of 1972 is premises in suit and not thecontract of tenancy." The Rent Act affords statutory protection inrespect of rent controlled premises to a tenant who has entered thepremises on a valid contract of tenancy. The Rent Restriction Act doesnot apply where the true owner sues the defendant as trespasser andnot as a tenant.
I dismiss the defendant's appeal and affirm the judgment of theCourt of Appeal. I enter judgment for the plaintiff with costs in all thecourts. (Damages to be calculated at Rs. 236/59 per month as from30.12.74, as agreed.)
WANASUNDERA, J.-l agree.
ATUKORALE, J.-l agree.
L. H. DE ALWIS, J.-l agree.
SENEVIRATNE, J.
I agree with the judgment of My Lord the Chief Justice, who hasdismissed the appeal of the defendant-petitioner, and ordered theejectment of the defendant-petitioner, who is a trespasser in thepremises in relation to the plaintiff-respondent. I am adding myjudgment to express my views regarding the two points referred tothis Divisional Bench by My Lord the Chief Justice. The earlier Benchafter hearing the learned counsel for the defendant-petitioner for fourdays has referred the two matters to His Lordship the Chief Justice asmatters fit to be considered by a fuller Bench of this Court. It is on thisreference that My Lord the Chief Justice has constituted this DivisionalBench to hear this appeal. I will later set out the two matters referredto for consideration.
The two matters referred to this court have arisen from the followinggrounds of appeal urged in the Petition of Appeal filed—
Paragraphs 14 (a) – (d), under the heading "true owner" as
follows
that the rights of the true owner under the common law hadbeen pro tanto abrogated or overridden by the provisions ofthe Rent Act and by reason of the protection afforded to atenant of the premises affected by the Rent Act operating inrem upon it and the status created by such operations asset out in paragraph 13 above.
that though under the common law when the true ownervindicated title against the contractual Lesser (landlord) thecontractual Lessee (tenant) had no protection,nevertheless by reason of the effect of the provisions of theRent Act, as aforesaid, the tenant, was protected fromejectment, but without impediment however to the trueowner seeking a declaration of title only (and notejectment).
that because the Rent Act, limited the right to eject ordispossess such tenant only to the class of persons referredto in the Act and on grounds set out therein, a true ownerwas, since the coming into operation of the Rent Act not ina position to eject such a tenant unless he brought himselfunder the class of persons who were given that right,whether by contract, attornment or operation of law.
that it was settled law that a person who is not the ownerof property may let it and such letting would be a validletting. Reliance was placed on De Alwis v. Perera(supra) (2).
Paragraphs 13 (a)-(e) under the heading "operation of the
Rent Act" as follows
that it applied to "premises" by its express provisions.Reference was made to Section 2(1) and (4) amongseveral others.
that the fundamental object of the Act was to protect atenant from being turned out of his home.
that this was achieved by applying the protection under theAct to the premises, whether residential or business.
and by conferring a status upon such protection whichstatus affected the premises and operated in rem upon it.By status was meant the legal position afforded to thepremises by the protection granted under the Rent Act.Reliance was placed on Lloyd v. Cook( 10). Rudler v. Franks(11) and Clark v. Downes (12) cases decided undercomparable English Rent Control legislation,
that the Rent Act made such protection inviolate by allexcept by those persons referred to in Section 22 and thattoo only upon the satisfaction of the conditions containedtherein. The opening words of their Section being"notwithstanding anything in any other law, no action orproceedings for the ejectment of the tenant of anypremises". As to the meaning and legal import of thisnon-obstante clause, Birendra, Interpretation of Statutes(7th Ed.) was cited at pages 1092 and 1093.
The earlier Bench has referred the following matters to My Lord theChief Justice as fit for consideration by a fuller Bench:
"While this matter was being argued, it became clear that,amongst the several questions arising for consideration are:-
The question as to the scope and the content of the words'person for the time being entitled to receive the rent',contained in the definition of the word 'landlord' in section 48of the Rent Act, No. 7 of 1972; and
Whether 'the entity of protection' granted by the provisions ofthe Rent Act is 'the premises' or 'the contract of tenancy'.
Both counsel have now moved that this is a fit matter forconsideration by a Full Bench of this Court. It seems to us too that,having regard to the judgments referred to above, these questionsmay be considered by a Full Bench of this Court."
This reference also sets out the decisions of this Court cited in thecourse of the argument. In this judgment I will briefly express myopinion regarding the two matters referred for the determination ofthis Court.
As regards the reference (No. 1) I must at the outset state that thematter is not strictly relevant to this case because the court has nowheld that there was no contract of letting and hiring between thedefendant-petitioner and the plaintiff-respondent. After the death ofthe previous landlord of the defendant-petitioner A. J. W.Gunawardane (father of the plaintiff), there was no creation of astatutory status of landlord and tenant between theplaintiff-respondent and the defendant-petitioner respectively.
Reference (No. 1) is based on the Rent Act, No. 7 of 1972 on thedefinition of the term "landlord", in section 48 of the Rent Act, whichis as follows
Section 48-In this Act unless the context otherwise requires-
"Landlord, in relation to any premises, means the person for thetime being entitled to receive the rent of such premises andincludes any tenant who lets the premises or any part thereof toany subtenant.'
In this definition the word "means" is of significance as it determinesthe scope of the term "landlord". The word "means" is used incontradistinction to the word "includes" used in definitions. There aretwo forms of interpretation. In one, where the word defined isdeclared "means" so and so, the definition is explanatory and primafacie restrictive. In the other, where the word defined is declared to"include" so and so, the definition is extensive. Craies on Statute Law,(7th Ed.) 213. Generally in a contract of letting and hiring the partywho lets the premises, the landlord is the owner and the tenant is thehirer. But under the Roman-Dutch Law-
"a person may let to another immovable property without havingany right or title in it or any authority from the true owner. Such alease is valid as between the landlord and the tenant, but it does notfollow that it is binding on the owner of the property." Wille:Landlord and Tenant (4th Ed.) page 20.
The Roman-Dutch Law which is our law in relation to letting andhiring-landlord and tenant-is still our basic law. Due to the shortagesof housing in urban areas which developed after the last World War(1939-45) the need arose for legislation pertaining to Housing toprotect both the landlord and the tenant. The first Law pertaining tothe subject was the Rent Restriction Ordinance No. 60 of 1942. The
Rent Law promulgated by various Rent Acts up to the Rent Act, No. 7of 1972 with its subsequent amendments has not abrogatedentirely the Roman-Dutch Law applicable to a contract of letting andhiring. The Rent Law is an edifice built on the foundation of thecommon law for the good of the public and social justice. Thecommon law still prevails in areas not covered by the Rent Acts.
It will be seen that the term "landlord" as set out above has beendefined – without any reference to ownership as such. The governingwords are "means the person for the time being entitled to receive therent of such premises". Section 16 of the Rent Restriction OrdinanceNo. 60 of 1942 has defined the term "landlord" as follows:
"The person for the time being entitled to receive the rent of suchpremises".
The next Act, Rent Restriction Act, No. 29 of 1948 – Section 27 hasdefined the term "Landlord" in the same terms with a certain addition:
"Means the personand
includes any tenant who lets the premises or any part thereof to anysubtenant."
It will be noted as cited above that the present Act, Rent Act, No. 7 of1972 defines the term "Landlord" in the same manner. The effect ofthis additional provision in the Rent Act of 1929, and that of 1972 isto constitute the tenant of any premises as the landlord in relation tohis subtenant.
The Supreme Court has held in the majority judgment in the leadingcase of De Alwis v. Perera {supra) (2) – that the landlord of thepremises can be a person who is not the owner of the premises. Thisprinciple has been followed in the cases-Alles v. Krishnan (13) andVisvalingam v. Gajaweera (14). The father of the plaintiff-respondent,A. J. W. Gunawardane, who was the landlord of thedefendant-petitioner till his death admittedly had no title to thepremises in question. As such the learned counsel for thedefendant-petitioner stressed the above principle that the landlordneed not be the owner of the premises, and further developed his thesisthat even after the death of the landlord the said Gunawardane, astatutory tenancy was vested in the defendant-petitioner, and she wasentitled to continue to be the tenant and pay rent to whoever wasentitled to receive the rent. As such any action for ejectment against
the defendant-petitioner must be founded on the provisions of section22 of the Rent Act, No. 7 of 1972. In making this submission thelearned counsel for the petitioner obviously overlooked the importantfact that Gunawardane had gifted this premises to thedefendant-petitioner in 1962, that the premises were let byGunawardane to the defendant-petitioner only in 1968, after theplaintiff became the owner. As such, there was no person to whomthe rights of Gunawardane as landlord could pass after his death, whocould found an action under section 22 of the Rent Act. The learnedcounsel for the defendant-petitioner overlooked the fact that thedefendant-petitioner the tenant had always been a trespasser in thepremises in relation to the plaintiff-appellant. The Rent Act, No. 7 of1972 has purposely provided for the continuance of tenancy upon thedeath of the tenant. This has been done because the common lawdoes not provide for such a situation. The common law provides forthe continuation of the rights of the landlord after his death, and legalheirs succeed to the landlord- W. L. S. Fernando v. H. N. De. Silva(15). The death of the landlord does not terminate the tenancy.
In addition to this the plaintiff-respondent has not called upon thedefendant-petitioner to attorn to her as the tenant but has gone furtherand even refused to accept her as the tenant. All these common lawprinciples pertaining to the status and rights of a landlord militateagainst the defendant-petitioner. I hold that to be a landlord in terms ofsection 48 of the Rent Act in respect of the premises there must be aprivity of contract between the landlord and the tenant which wouldentitle the former to receive the rent. Such right as a landlord candevolve and pass, on the death of the landlord, by transfer of propertyby the landlord, sale of the property on Decree of Sale under thePartition Ordinance. (Britto v. Heenatigala (supra) (3)). There was nosuch privity of contract between the plaintiff-respondent and thedefendant-petitioner, for the reason that:
the plaintiff-respondent has become the owner of the propertyby deed of gift from the said Gunawardane long before thepremises were rented to the defendant-petitioner in 1968,
the contract of landlord and tenant between the deceasedGunawardane and the defendant-petitioner ceased after thelatter's death,
in any event there was no person to whom the landlordship rightof Gunawardane could have passed on his death.
I will now deal with the second reference to this Court, i.e. whether"the entity of protection" granted by the provisions of the Rent Act isthe "premises" or "the contract of tenancy". As shown earlier thisreference is covered by paragraphs 13 (a) — (e) of the Petition ofAppeal which have been set out above. In the Petition of Appeal thelearned counsel for the defendant-petitioner has stated that theproposition set out in the cited paragraphs "has never beenconsidered by our courts", and ought to receive a fuller and fairexamination. I suppose this proposition has never been consideredbecause it is a startling proposition and does not seem to have beenmade earlier, i.e. that the Rent Act operates in rem in respect of thepremises. The authorities cited in paragraph 13(c/) of the Petition ofAppeal are as such decided English cases. Before I deal with thesecases in order to understand the background to these Englishdecisions, it is necessary to discuss the history and the developmentof the law in England pertaining to Housing. Passing of Acts in Englandpertaining to Housing originated for the first time after the First WorldWar of 1914-1918 in order to mitigate the hardship to tenantsresulting from scarcity of housing and to prevent landlords increasingthe rent of premises above a permitted maximum, and secondly toconfer on the tenant a status of irremovability by the landlord excepton court orders passed on certain grounds. Unlike in our country therehave been swings in England in respect of the Rent Law in thismanner, when the housing situation eased, there have been Acts todecontrol houses and again when that phase passed off Acts tocontrol the houses. One of the earliest Rent Acts passed was the Rentand Mortgage Interest Restrictions Act 1920 and 1923. Such Actscontinued to be passed till 1939. The above Acts were really intendedto decontrol the houses that came under the Rent Acts. Again afterthe Second World War (1938-1945) Acts were passed to controlthe houses, and the decontrol of houses was stopped in 1939. Thecontrol of houses began with the Rent and Mortgage InterestRestrictions Act of 1939. Such acts were passed to control thehouses from 1939-1957, and the Rent Act of 1957 was primarily anexercise of decontrolling houses of a certain rateable value.
The real Rent Act passed in U.K. in the manner of our Rent Act of1948 and the present Act, was the Rent Act of 1968, which wasmeant to control tenancies and not to decontrol the dwelling housesas had the Rent and Mortgage Interest Acts, 1920-1931, whichapplied to dwelling houses and operated in rem. In 1977 in Englandthe Rent Act of 1968 and all connected legislation were repealed andconsolidated by the Rent Act of 1977. This Act contains specialprovisions to give security to tenants.
The learned counsel relied on three English cases to support hissubmission that the Rent Act operated in rem in respect of premises.The cases relied on were-
Lloyd v. Cook (supra) (10).
Rudler v. Franks (supra) (11) and
Clark v. Downes (supra) (12).
• As I will show now, cases (1 and 3) above were cases that consideredthe Acts of 1920 and 1923 referred to above, which were operatedto decontrol the houses brought under control during the World Warof 1914-1918. The case of Lloyd v. Cook (supra) (10) (No. 1)above, was a case which dealt with the provisions of Rent andMortgage Interest Restrictions Act of 1923. In this appeal five likeappeals were consolidated, and the court considered the scope ofthe 1923 Act. Scrutton, J. -page 457, who delivered the judgment inrespect of the five cases held as follows:
"I look at the object and words of section 2(1) of the Rent andMortgage Interest and Restrictions Act of 1923, to ascertain itstrue construction. I take its object to be at a time when restrictionwas supposed to be drawing to an end, owing to increase provisionof houses gradually to decontrol houses in certain cases."
The term that the Act operated in rem has been used in the casecited Clark v. Downes (supra) (12) (No. 3) above. This was also anaction under the Rent and Mortgage Interest and Restrictions Act of1920 and 1923, i.e. this case dealt with the same two Actsconsidered in the case of Lloyd v. Cook (supra) (10) and the facts ofLloyd's case (supra) (10) are referred to in this case. In the course ofthe judgment Lord Hanworth, M.R. referred to the case of Cook v.Lloyd (supra) (10) and held as follows:
"Turning now to the Restrictions Act cases have been cited to uswhich clearly indicate that their effect is in rem and not in personam.Greer, L.J. explicitly stans this in the case of Lloyd v. Cook (supra)(10). The case of Lloyd v. Cook (supra) (10) did not use the twolegal terms in rem or in personam, but made the same conclusion
that the 1923 Act applied to the premises. The ratio decidendi inboth cases is that the 1920 and 1923 Acts referred to aboveoperated in respect of the premises-in rem as it was meant todecontrol the premises, and did not apply in personam in respect oflandlord or tenant, or in respect of the contract of tenancy. The caseof Rudler v. Franks (supra) (11) (No. 2) above, is a judgment ofGoddard, C.J. which deals with the lease of a farm, which wasCrown property under the Small Tenements Recovery Act, 1838.The decision in this case cannot be construed without reference tothe 1838 Act, which I have not been able to peruse, and further it isnot that relevant as it dealt with Crown property. This case held thatthe Crown was not affected by the Rent Restriction Acts as theyapplied in rem and not in personam. This case approved thedecision in Clark v. Downes (supra) (12) cited above."
The learned author and the authority Megarry in his book-The RentActs (10th Ed.) Vol. 1, page 22 deals with the proposition, i.e. nowbeing considered by me-at page 22, section 7-The Acts Operate InRem. Megarry states as follows:
1. "The Rule: – It has often been said of the Acts that they applyto houses, not persons, and that they operate in rem and not inpersonam …. the Rent Acts speaking generally operate in rem, i.e.they operate on property. (Rudler v. Franks above is cited). Theseexpressions must not however be taken too widely and one view isthat they are 'more confusing than helpful'. In any case the doctrinecould operate only with qualified effect during periods whilepremises were liable to be taken outside the Acts by the tenantgiving up possession, i.e. from 1923-1938 and from 1957 to1965".
The dicta in the judgments cited, and this quotation from Megarryclearly shows that the thesis or the proposition that the Rent Actsoperating in rem, i.e. operating on property has been one propoundedin respect of the Enactments which dealt with mainly, the decontrol ofhouses. The propositon that the Rent Act of 1972 must beconsidered to operate in rem in respect of houses cannot be acceptedas the English authorities cited in support of it do not support theproposition.
In my view to understand the meaning, the scope and operation ofour Rent Law, i.e. the Rent Acts the safest course is to resort to thepreamble of the first Rent Law passed in our country, i.e. the Rent
Restriction Ordinance No. 60 of 1942. In the principles pertaining tothe Interpretation of Statutes, it has been accepted that the preambleof a statute can be considered to determine the meaning, the natureand scope of a statute. Determining the scope of the statute is
determining the operation of the statute. "Preambles
have been regarded as of great importance as guides to construction.They were used to set out the facts or state of the law for which it wasproposed to legislate by the statute". Lord Alverstone, C.J. said:
"I quite recognise that the title of an Act is part of the Act and thatit is of importance as showing the purview of the Act: and I mayexpress in this connection my regret that the practice of insertingpreambles in Acts of Parliament has been discontinued as they wereoften of great assistance to the courts in construing the Acts."Craies on Statute Law (7th Ed.) Page 199.
The first Rent Law in our country – the Rent Restriction OrdinanceNo. 60 of 1942 had this preamble-
"An ordinance to restrict the increase of rent and to provide formatters incidental to such restriction".
The next Rent Law – The Rent Restriction Act No. 29 of 1948 hadthe preamble – an act to amend and consolidate the law relating torent restriction. The present Act No. 7 of 1972 had the samepreamble as the 1948 Act. Craies states:
"That the object of the preamble is to set out the facts or state ofthe law for which it was proposed to legislate by statute" Page199.
The main object of the 1942 Act as clearly stated was to restrictincrease of rent. The preamble of the 1948 Act also deals with RentRestriction, and the preamble of 1972 Act also emphasises – 'Lawrelating to rent restriction". In the case of De Silva v. Siriwardene {16)Dias, J. has considered the preamble to the Rent RestrictionOrdinance of 1942 in order to determine its scope and operation.Dias, J. held as follows:
"The preamble to the Rent Restriction Ordinance says that it is anOrdinance to restrict the increase of rent and to provide for matters
incidental to such restrictionThe object of the Legislature,
therefore, was to restrict the landlords who, by taking advantage of
the existing shortage of living accommodation, made inequitabledemands for rents from tenants, who by force of necessity had toaccede to such exorbitant demands". (Page 490).
Ih respect of other Enactments also the Supreme Court hasconsidered the preamble to determine the scope of operation of such, enactments -Hull, Blyth & Co. v. Valiappa Chettlar (19) and Chewv.De Alwis (18). The learned counsel for the defendant-petitioner tosupport his submissions referred to sections 2(1), 2(4) and other likesections of the Rent Act which refer to premises, but the Rent Acttaken as a whole refers to the rights and duties of a landlord of atenant and other incidental matters. There is no doubt that the rightsand duties of a landlord, those of a tenant and the determination of thestatutory rent have to be considered with reference to the premises,as the crux of the Rent Law is based on the premises. The entireconsideration of the Rent Act shows that one cannot give undueprominence to the sections dealing with the premises, and say thatthe Rent Act operated in respect of the premises. The Rent Act asshown by the name itself deals with the Rent, and the main purpose ofthe Rent Act is to give relief to the non-house owners in respect ofunconscionable increases of rent by rapacious landlords. All othermatters are incidental to this main object of the Rent Act. I do notagree with the learned counsel for the defendant-petitioner that theRent Act operates in rem, i.e. in respect of the premises. One can onlysay that among the other fields of operation the Rent Act alsooperates in respect of the premises within the provisions of the RentAct. The learned counsel for the petitioner as I see it has vehementlypropounded the proposition that the Rent Act operates in respect ofpremises as he is more than fully aware and realises that thedefendant-petitioner has no status whatsoever as a tenant in respectof the premises. In relation to the plaintiff-respondent thedefendant-petitioner is an interloper trespasser. I hold that "the entityof protection" granted by the provisions of the Rent Act is the"contract of tenancy" and not the premises.
I agree with my Lord the Chief Justice and dismiss the appeal.
Appeal dismissed.