JAYASIRIWADENA v. PIYARATNE

004-SLLR-SLLR-2004-V-1-JAYASIRIWADENA-v.-PIYARATNE.pdf



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Rajaratnam v Dayananda Dissanayake, Commissioner of
Elections and others (Tiiakawardane, J.)
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JAYASIRIWARDENAv
PIYARATNECOURT OF APPEALDISSANAYAKE, J. ANDSOMAWANSA, J.
A.NO. 529/91 (F)
C. COLOMBO NO. 5652/ZLMARCH 27, 2003
Rei vindicatio action – Rent Act, No. 7 of 1972, section 22 – Lease of bare land- Option to construct and remove same at the end of lease period -Applicability of the Rent Act – Can a contract of tenancy be entered in respectof a building belonging to the tenant 7 – Ingredients necessary to create ten-
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ancy – Non est factum – Can findings of fact be reversed ?
The plaintiff-appellant leased out a bare land, with the lessee having the optionto construct a building and to remove same at the end of the lease period. Theplaintiff-appellant instituted a rei vindicatio action. The defendant respondentclaimed tenancy and succeeded.
Held:
Where the lease of a bare land provided for monthly payment of groundrent, containing a condition enabling the lessee to put up with theapproval of the owner, buildings and structures of a temporary naturewhich the lessee would be entitled to remove at any time, the provisionsof the Rent Act do not apply, as it would not be possible to enforce cer-tain rights and duties under the Rent Act.
"Where findings of fact by a trial Judge are based on the trial judge’s eval-uation of facts, the appellate court is then in as good a position as the trialjudge to evaluate such facts and no sanctity attaches to such an appel-late court that on either of these grounds, the findings of fact by a trialjudge should be reversed, then the appellate court ought not to shrinkfrom that task."
Ingredients necessary to create a tenancy are –
that the object of the contract is to let;
ascertained property;
at a fixed rent;
A plea of non esf factum will rarely succeed if a document was signed byan adult or a literate person;
APPEAL from the judgment of the District Court of Colombo.
Cases referred to:
Fernando v Wijesekera – 73 NLR 110
Padmanaba v Jayasekera – 72 NLR 132
Madanayake v Senaratne – 75 NLR 349
Jayawardena v Bandaranayake – (1998) 3 Sri LR 72
Saunders v Anglia Building Society – 3 All ER 961 (1970).
De Silva v Seneviratne – (1981) 2 Sri LR 7Rohan Sahabandu for plaintiff-appellant.
Varuna Basnayake, P.C. with Rohana Jayawardena for defendant-respondent.
Cur.adv. vult
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Jayasiriwardena v Piyaratne
(Dissanavake. J.)
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July 21, 2003DISSANAYAKE, J.
The plaintiff-appellant instituted this action against the defen-dant-respondent seeking a declaration that the defendant-respon-dent was in unlawful occupation of the land morefully described inthe schedule to the plaint, to eject the defendant-respondent anddamages.
The defendant-respondent in his answer whilst denying theaverments in the plaint prayed for dismissal of the action.
The case proceeded to trial on thirteen issues and at the con-clusion of the trial the learned Distict Judge dismissed the action.
It is from the aforesaid judgment that this appeal is preferred.
Learned counsel who appeared for the plaintiff-appellant con-tended that the learned Distirct Judge was in error when he dis-missed the action. The above contention of the learned counselwas based on the grounds that the learned District Judge had failedto :
embark on a proper analysis and evaluation of the oral anddocumentary evidence led on behalf of the plaintiff-appel-lant.
consider the plea of the non-est factum of the defendant-respondent in the proper perspective;
consider whether the Rent Act applies to the contract oflease entered between the two parties.
The pivotal issue in this case is whether the subject matter thatwas leased out was the bare land or the land along with the build-ings.
The plaintiff-appellant iri her evidence stated that originally theland was leased to the defendant-respondent on 01.03.1970 forRs.150/- on an oral agreement. She stated that the reason for notentering into a written agreement was because there was a parti-tion action pending in respect of this land. She was emphatic thatafter the conclusion of the partition action in 1981, the land wasleased to the defendant-respondent by deed No.4227 dated
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for 2 years (Pi). According to the major terms and con-ditions of P1 the parties have agreed that:
the land was a bare land,
that the lessee had the option to construct a building,
that at the end of the lease period the lessee was toremove the structures.
In the extracts of the Municipal Council assessment registerpertaining to the years 1963 to 1969 the description of property is 40given as "land". It is to be observed that the extracts of the assess-ment register which has been produced marked P2 and P3 are notfound in the record. However oral evidence of the contents of P2and P3 have been elicited in evidence of M. Dickson Perera, clerkof the Colombo Municipal Council who had produced ‘P2’ and 'P3'while giving evidence.
It was revealed in the evidence that in 1970, the annual valueof the property had gone up to Rs.500/- and the date for which thealtered value was to accrue had been given as 01.06.1970. Therate per quarter is Rs.25/- and the description had been altered (in 50red) from 'land' to 'motor repair garage'. This change is referable tothe date 01.06.1970 in column 5. (Vide PBC) Prior to 1962 therehad been a "firewood shed". However from the year 1963 thedescription of the property has changed to "land". It was the plain-tiff-appellant's position that after the defendant-respondent enteredthe land in March 1970 on an oral agreement with him he hadthereafter constructed a temporary building.
Subsequently the defendant-respondent entered into twoindentures of lease of the land. He first entered into deed of leasebearing No.4227 dated 03.06.1982 (P1) to be valid from 60
to 31.05.1983. Thereafter he entered into deed of leasedeed bearing No.4836 dated 30.06.1985 (P4) to be valid from30.05.1985 to 30.07.1981.
The following features in the two indentures of lease throwsome light to arrive at a conclusion as to the subject matter thatwas intended to be given on lease by the plaintiff-appellant andwhat was intended to be accepted on lease by the defendant-respondent was the bare land. The land that is described in the
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Jayasiriwardena v Piyaratne
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schedule of both P1 and P4 specifically state that it is a "bare land".The rent that is specified is called the "ground rent". Both deeds oflease have the same terms and conditions. According to which thelessee has undertaken not to construct any building, permanent ortemporary on the land without prior permission of the lessor.Another unique feature that is found in both these deeds is that thelessee has undertaken to remove all structures and buildings erect-ed by him and restore to the lessor the bare land. There are furtherconditions that if the tenant did not remove the structure at the endof the lease, the landlord was empowered to rerpove the structureand appropriate the proceeds after sale of the building materials. Ithas been also provided that in the event the tenant constructs astructure without the consent of the owner, the tenant has agreedto pay the enhanced rates that were charged as a result of suchbuilding.
The defendant-respondent relied on the receipts issued by theplaintiff-appellant which were produced V1 to V23 to bolster hiscase. Document V1 is a receipt issued for a sum of Rs.500/- as adeposit when the defendant-respondent entered into an oral agree-ment to occupy the bare land. This receipt was produced "VI".Receipt V1 states that this is in respect of a house. Receipts V2 toV23 state that they are receipts for rent of premises.
It is interesting to note that these receipts have been issued byfilling up of printed receipts forms from a receipt book that is nor-mally used for issuing house rent receipts. The plaintiff-appellantexplaining the circumstances under which receipt V1 was issuedstated in her testimony that she issued receipt V1 after accepting adeposit of Rs.500/= as against ground rent and inadvertently shehad failed to strike off the word house in V1.
According to the testimony of the plaintiff-appellant after thedefendant-respondent entered into possession of the bare land on11.03.1970, he subsequently in June 1970 constructed a shed withzinc sheets and constructed a small room out of single brick wallwhich was used as an office. The plaintiff-appellant was emphaticthat she only leased the bare land to the defendant-respondent, onthe understanding that when he left the land at the end of the leasehe would remove the temporary buildings and structures and handover vacant possession of the bare land. Subsequently they
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entered into the lease deeds P1 and P4 on the same terms andconditions.
The receipts that were issued by the plaintiff-appellant were allon the same printed forms. She had scored off the word house inthe receipt and had entered the abbreviation, ‘pre’to indicate theword premises. The evidence bears out that she was a house-wifeand according to her testimony she stated her understanding of theword "premises" was "bare land" and hence she had scored off theword house and entered the abbreviation 'pre' on the receipts thatwere issued.
Learned counsel appearing for the defendant-respondentrelied on the decisions of Fernando v WijesekaraS1) andPadmanaba v JayasekaraW in support of his arguments.
In the case of Fernando v Wijesekara (supra) the tenant hadlet a block of bare land, constructed a house subsequently on theland and occupied it. Sometime later the land was amicably divid-ed between the landlord and his brother (plaintiff) and the new land-lord (plaintiff) became the owner of that part of the land which con-tained the dwelling house constructed by the tenant. Thereupon thetenant attorned to the new landlord on the basis of a new contractof tenancy. The plaintiff sued the defendant tenant for eviction.Weeramantry, J. held that the legal background existing at the timewhen the second contract of tenancy was formed was fundamen-tally different from the one existing at the time of the first contract.The subject matter of the contract, at the time the second contractwas entered into was not the bare land but the land and the build-ings standing thereon and the learned District Judge held that inthese circumstances the Rent Act is applicable.
Weeramantry, J. observed the defendant by entering into afresh contract by his conduct the defendant permitted the materialto accede to the soil. Weeramantry J. observed further that thelegal background existing at the time the second contract wasformed was fundamentally different from that which existed at thetime of the first contract and what was within the power of the plain-tiff to let, viz. a building with appertanant land was entirely differentfrom what was within his brother's power (original landlord) to let atany time (namely a bare block of land).
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Jayasiriwardena v Piyaratne
(Dissanavake, J.)
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However it appears that the above ratio is applicable to thefacts of the case presently before me. At page 116 Weeramantry, J.observed "in all the circumstance, I consider that a tenancy only inrespect of a bare land seem both unlikely in fact and indeed impos-sible in law after the accession of the building to the soil." (empha-sis is added).
Emphasis is made to the word after as observed in the judg- 150ment; the defendant has by her conduct permitted the material topass on to the soil, and on entering into a fresh contract of tenan-cy to include the buildings a contract regarding the building wasformed.
Thus Fernando v Wijesekera (supra) is distinguishable on theground of:
a fresh contract of tenancy to include the building wasentered into, whereas the first contract was only for a bareland.
by his conduct, the defendants have allowed the building 160material to accede to the soil and thereby the landlord-ten-ant relationship has come into existence
what was let by the original landlord was different to whatwas let by the plaintiff, (bare land v building).
In the present action deeds P1 and P4 referred to a bare land,the rent is referred to as ground rent. And according to P1 and P4,the lessee was liable for increased tax if the constructions havecome up without the lessor's consent. The lessor has given anundertaking to remove all structures and buildings at the end of theterm of lease. The lessee was not entitled to receive any compen- 170sation for any improvements made and if the structures/buildingsare not removed by the lessee, at the end of the term, the lessorhad the power to dismantle them and appropriate the proceeds.
In the case of Padmanaba v Jayasekara (supra) the plaintiffleased to the defendant an allotment of land. Thereafter the defen-dant constructed certain buildings (houses). In 1962, by P7 theplaintiff once again leased to the defendant for 5 years the premis-es described in the schedule, there was no mention made of the
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buildings. The question that arose was whether the Rent Actapplies to the premises. It was held that when an allotment of land 180which is leased is described by metes and bounds, everythingstanding within these boundaries (unless expressly excluded) arealso leased to the lessee and the defendant is a protected tenant.
The decision in Padmanaba v Jayasekara (supra) is distinguish-able from the present action. In that case there were no optionsgiven to the tenant, like in the case presently before me to removethe structure, and if not removed, the landlord was empowered todismantle the building and appropriate the proceeds.
Learned counsel for the plaintiff-appellant cited the followingtwo cases in support of his claim, i.e. Madanayake v Senaratneffl 190and Jayawardena v Bandaranayakd*). In the case of Madanayakev Senaratne (supra) where the facts are similar to the presentaction in that, where the lease of a bare land which provided formonthly payment of ground rent, containing a condition enablingthe lessee to put up, with the approval of the owner, buildings andstructures of a temporary nature which the lessee would be entitledto remove at any time, it was held that the provisions of the RentRestriction Act did not apply.
In the more recent case of Jayawardena v Bandaranayake(supra) of which the facts are, one B leased a piece of bare land to 200the defendant's father, the defendant's father constructed a build-ing, "B" conveyed the property to the three plaintiffs, but receivedthe rent till his death. The defendant who had become the lesseeattorned to the plaintiffs. The plaintiffs thereafter sought to evict thedefendant. The defendant claimed the protection of the Rent Act.
The learned trial Judge held with the plaintiff. Dr. Ranaraja, J.observed that a lease is formed by the consent or agreement of theparties on three essential points, namely,
object of the contract is to let and hire
ascertained property210
fixed rent.
The defendant had failed to prove that the original lease ofbare land in respect of which ground rent was due was later con-verted by agreement of parties to a tenancy in respect of the build-ings erected on the land by the defendant.
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Jayasiriwardena v Piyaratne
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Dr. Ranaraja, J. held that just because there are buildings ona land, if the aforesaid three ingredients are not satisfied there can-not be a contract of tenancy for a building, when originally the con-tract was for the letting of a bare land.
Thus it is up to the defendant to prove that there was a con- 220tract of tenancy regarding the building. In the present action thedefendant-respondent could not prove that there was a contract oftenancy regarding the building.
Learned counsel for the plaintiff-appellant argued that a con-tract of tenancy cannot be entered into in respect of a building thatbelongs to the tenant.
There is merit in this argument. If the building belonged to thetenant it would not be possible to enforce certain rights and dutiesunder the Rent Act and will result in the following consequences :
Under section 22 – a landlord would not be able to seek to 230retake possession of a building that was constructed by
the tenant on reasonable requirement.
A landlord will not be able to effect repairs to the buildingas it does not belong to him.
If the tenant damages the building the landlord cannotcomplain as the tenant is the owner of the building.
The landlord cannot be made liable for withholding ameni-ties as the building belongs to the tenant.
The landlord cannot be made liable if the building collaps-es due to faulty construction.240
If on the landlord obtaining a decree on reasonablerequirement if the tenant demolishes the house and takesaway the material, the landlord will be without a remedy.
It would not be possible for any one to take on rent one'sown house and make the owner of the land liable becauseone cannot lease to himself his own building.
If the building was constructed by the tenant and if hecauses damages or deterioration of the property, the ten-ant cannot be evicted by the landlord for causing damage
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or deterioration of the property as he is not the owner of thebuilding.
If the building that was constructed by the tenant is sublet thelandlord cannot evict him as the landlord has no control overthe building.
If the building was constructed by the tenant, the landlordcannot ask for vacant possession as the tenant is entitled toremove the structure.
It is pertinent at this stage to consider the ingredients that arenecessary to create a contract of tenancy.
In the book "Landlord and Tenant in South Africa" by Wille, fourthedition, at page 2 under the heading of "Formation of the Contract" itis stated: "A lease is formed by the consent or agreement of the par-ties on three essential points :
that the object of the contract is to let;
ascertained property
at a fixed rent.
The consent should be unequivocal on the aforementionedessential matters. Indentures of lease P1 and P4 are clearly in respectof a bare land. The terms in both P1 and P4 are unequivocal to meana bare land. The terms and conditions prohibit construction of build-ings and structures on the land. The undertaking by the tenant toremove any temporary structures erected and hand over vacant pos-session of the bare land at the end of the period of lease. Undertakingto pay the increase of rates in respect of buildings constructed with-out the landlord’s consent and the provision for the landlord toremove the temporary structures and to appropriate to himself theproceeds of sale of them at the end of the lease. The use of the wordground rent in both agreements P1 and P4, are all features that estab-lish that what the parties agreed to lease was the bare land. Furtherthere was no dispute with regard to the fixed rent. There was agree-ment by the parties that the object of the agreement was to let, at afixed rent.
Therefore I am of the view that the parties in the present actionintended to enter into a lease of a bare land and therefore the RentAct does not apply.
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Jayasiriwardena v Piyaratne
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The defendant-respondent at the commencement of the trialadmitted only the signing of indenture of lease P1 and P4. His posi-tion was although he placed his signature on P1 and P4, the con-tents of P1 and P4 were not explained to him hence he was not
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aware of the contents of P1 and P4.
It is interesting to note that despite documents P1 and P4being in English his son-in-law who was an Inspector of Police,accompanied him to the lawyer notary who attested P1 and P4. Hehad signed as an attesting witness. Therefore the evidence of thedefendant-respondent that the contents of P1 and P4 were notexplained to him and as such he did not know the contents cannotbe believed. It has been held in Saunders v Anglia BuildingSocietythat a plea of non-est factum, will rarely succeed if thedocument was signed by an adult or a literate person.300
The learned District Judge had failed to embark on a properanalysis and evaluation of the oral and documentary evidence inthis case.
It has been held by Parinda Ranasinghe, J. (as his Lordshipthen was) with Victor Perera, J. concurring in the case of De Silvav SeneviratneW inter alia that where the findings of fact by thelearned District Judge are based on the trial Judge’s evaluation offacts, the appellate court is then in as good a position as the trialJudge to evaluate such facts and no sanctity attaches to suchappellate court that on either of these grounds, the findings of fact 310by a trial judge should be reversed, then the appellate court "oughtnot to shrink from that task".
I set aside the judgment of the learned District Judge anddirect him to enter judgment as prayed for in the plaint.
The appeal of the plaintiff-appellant is allowed with costs fixedat Rs. 5000/=.
SOMAWANSA, J.Appeal allowed.
I agree.