012-SLLR-SLLR-1998-V-3-JAYAWARDENE-v.-BANDARANAYAKE-AND-OTHERS.pdf
72
Sri Lanka Law Reports
[1998] 3 Sri L ft
JAYAWARDENE
v.
BANDARANAYAKE AND OTHERS
COURT OF APPEALRANARAJA, J„
A APPEAL NO. 482/92(F)
C COLOMBO NO. 7184/REAPRIL 03. 1997.
Lease – Lease of bare land – Tenant erecting building on the land – Applicabilityof Rent Act.
Where the lease was only of a bare land, and the lessee erected a timber shed,the Rent Act does not apply. The tenant must quit the premises at the end ofthe lease. A lease is formed by the consent or agreement of the parties on threeessential points:
The object of the contract is to let and hire.
Ascertained property.
Fired rent.
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Jayawardene v. Bandaranayake and Others (Dr. Ranaraja, J.)73
Cases referred to:
Soyza v. Mohideen 17 NLR 279, 286.
Punchirala v. Mohideen 13 NLR 193.
Madanayake v. Senaratne 75 NLR 349.
Padmanatha v. Jayasekera 72 NLR 132.
Paul v. Gaverappa Reddiar 59 NLR 402.
Nallatamby v. Leitan 58 NLR 56.
APPEAL from judgment of the District Court of Colombo.
A. K. Premadasa. PC with C. E. Silva for appellant.
Romesh de Silva . PC with Harsha Amerasekera for respondent.
Cur. adv. vutt.
April 03, 1997.
DR. RANARAJA, J.
One S.W.C.D.W. Bandaranayake was the owner of premises bearingassessment Nos. 70 and 76 (part) Jethawana Road, Colombo 14,described in the schedule to the plaint. The said Bandaranayakeleased the premises, which was a bare land in 1950 to the defendant'sfather at monthly rental of Rs. 400. The defendant's father filled theland which was subject to flooding, constructed a building and com-menced a Timber business thereon. By Deed 1334 dated 13.10.72the said Bandaranayake conveyed the property to the three plaintiffs.However, he continued to receive the rentals till his death. Thedefendant who by then had become lessee attorned to the plaintiffs.The monthly rental was then Rs. 750. In the year 1984, there werenegotiations between the plaintiffs and the defendant for the latter topurchase the said land. The negotiations failed over the sale price.By letter dated 25.9.86, the plaintiffs through their attorney-at-Law gavenotice to the defendant to quit and deliver vacant possession of theland at the expiry of 31st October, 1986. On the defendant's failureto comply, the plaintiffs instituted action against the defendant for adeclaration of title to the said land, ejectment of the defendant anddamages. The defendant whilst admitting the title of the plaintiffsdenied the right of the plaintiffs to eject him from the said land claimingprotection of the Rent Act. The trial Judge entered judgment in favourof the plaintiffs, but restricted the damages to Rs. 750 per month.This appeal is from that judgment.
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Learned counsel for the defendant-appellant submitted that therewere two matters for decision in appeal, viz: (a) was a tenancy betweenthe plaintiffs and the defendant created in respect of the buildingsconstructed by the defendant's father, (b) In any event, even if thetenancy was in respect of a bare land, is the defendant entitled tothe protection of the Rent Act inasmuch as the plaintiffs are seekingto eject the defendant from the buildings.
There was no evidence of the terms of the original lease betweenthe said Bandaranayake and the defendant's father. It is concededthat the subject of the lease was a bare land at a monthly rentalof Rs. 400. It could be implied that the defendant's father was entitledto construct buildings thereon at his expense. Thus the burden wason the defendant to establish that at a point of time subsequent atenancy was created between the plaintiffs and himself in respect ofthe buildings. Learned counsel relied heavily on the receipts V1 toV19 issued by the plaintiffs over the period 3.1.80 and 3.3.84 whichrefer to a "timber shed" situated at No. 70, Jethawana Road,Colombo 14. He submitted that the receipts imply that a new tenancywas created in respect of the buildings, and that the increase of rentfrom Rs. 400 to Rs. 750 per month was a clear indication of thatfact. It was his contention that the receipts V1 to V19 constituted primafacie evidence of a new tenancy.
Learned counsel for the plaintiffs-respondents on the other handsubmitted the receipts produced by the defendant did not constituteprima facie evidence of the creation of a tenancy in respect of thebuildings constructed on the land. The burden lay on the defendantto prove that it was agreed between the parties to do so. The receiptsmerely described the premises let.as a limber shed' since it wasconvenient to so describe the premises. There was no substantialincrease of rent over the period 1950 to 1971 to draw the presumptionthat a tenancy had been created in respect of the buildings. Thedocuments P7, P8, D22 to D29 clearly showed that the defendanthimself considered the Rent paid as “ground rent", due on the originallease of the bare land. The defendant, it was submitted, had failedto establish that a new contract of tenancy was created between theparties.
"A lease is formed by the consent or agreement of the parties onthree essential points: (1) that the object of the contract is to let and
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Jayawardene v. Bandaranayake and Others (Dr. Ranaraja, J.)75
hire, (2) ascertained property, (3) at a fixed rent – Wille – Landlordand Tenant in South Africa – 193. The consent should be unequivocalon the essential matters. The interest of a tenant under a short termlease is merely personal enforceable only against the lessor. Wherethe defendant himself has continued to treat the rent payable as'ground rent' long after receipts V1 to V18 were issued, there canbe no doubt that the consent of the parties on the nature of theproperty let was not identical or ad idem. In other words, the defendanthad failed to prove that the original lease of bare land in respect ofwhich ground rent was due, was later converted by agreement ofparties to a tenancy in respect of the buildings erected on the landby the defendant's father, for which a monthly rental was due.The first argument of learned counsel for the defendant-appellanthas to fail.
Learned counsel then submitted under the common law a buildingaccrues to the soil. If the plaintiffs sought to eject the defendant fromthe premises described in the schedule to the plaint, which includesthe buildings, the plaintiffs must aver explicitly the ground on whichthey claim such relief. Elaborating on the theme he submitted thebuildings are located within the limits of the Colombo municipality andtherefore brought under the operation of the provisions of the RentAct. The defendant can be ejected only on a ground set out in thatAct. In the alternative he submitted the defendant is entitled tocompensation for improvements and jus retentionis.
The Courts of this country have not regarded the lessee as a bonafide possessor – See: Soysa v. Mohideen,m and a lessee cannot inthe absence of agreement make a claim for improvements which aremere repairs. However useful improvements rendering the propertymore valuable or serve a useful purpose may be recovered. If hedid it with the consent and acquiescence of the lessor Punchirala v.Mohideen,(2K It is to.be noted however that this is a matter whichwas not pleaded by the defendant nor any issues framed on to enablethe trial Judge to come to a decision. The defendant cannot thereforetake up in appeal for the first time, a matter which involves a questionof mixed fact and law.
The proposition put forward by counsel for the defendant-appellantthat despite the lack of any agreement between parties, the erectionof buildings on a bare land leased to the lessee automatically attracts
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[1998] 3 Sri LR.
the provisions of the Rent Act since the building accrues to the soilis a matter which has been dealt with by our courts. In Madanayakev. Senaratnethe plaintiff leased to the defendant for a period ofthree years a bare land at a monthly rental of Rs. 205. The leaseprovided inter alia, for the lessee to erect buildings and structuresof a temporary nature with the approval of the plaintiff which at thetermination of the lease, the lessee would be entitled to remove athis expense. Kretser, J. there stated: "It appears to me that the morecorrect issue to have been formulated in the instant case would bewhether the defendant could claim the protection of the Rent Restric-tion Act. It appears to me that once the factual position was clarified,viz that plaintiff could only let and did in fact only let the bare land,the provisions of the Rent Restriction Act had no application to theletting, for it has repeatedly held that the Act has no application tothe letting of bare land. The fact that the defendant had put uptemporary buildings which he could remove at any time pleasing tohim, on the land he had taken on rent and made use of them, inany view makes no difference on the question whether the Act appliesor not".
The rationale of the principle laid down in that case is that a lessorcan let what is in existence at the commencement of the lease. Inthe absence of any agreement that the lessee is entitled to put upbuildings thereon at his expense in respect of which a fresh tenancywould be created, no question regarding the applicability of the RentAct arises. The submission of counsel that the Rent Act applies tobuildings and not to a contract of tenancy cannot be accepted. TheRent Act is an Act which seeks to consolidate the law relating to Rentrestriction. The question of payment of rent arises on the agreementof the landlord to let on rent to the tenant premises for the latter'soccupation. "The premises" is only one of the three ingredients referredto earlier, which constitute a contract of tenancy. In the absence ofsuch a contract the lessee continues to enjoy the improvementseffected on the bare land until the lease is terminated at which timethe land with the improvements will revert back to the lessor. Till thenthe lessor cannot lay claim to the improvements, let alone letting theimprovements to the lessee. The plaintiffs came to court on the basisof letting of a bare land. The buildings that were subsequentlyconstructed thereon did not belong to them. The argument of counselthat the definition of "premises" in the Rent Act includes any buildingor part of a building together with the land appertainig thereto" does
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Ranjanie de Soysa v. Edward Cooray and Others
77
not apply in the instant case as what was originally let was admittedlya bare land. See: Padmanaba v. Jayasekera,w Paul v. GaverappaReddiai<S), Nallathamby v. Leitari6>. The trial Judge found that theincrease in the rent from Rs. 400 to Rs. 750 was not due to theconstruction of the buildings to be occupied by the defendant for theperiod of the lease but due to the normal increase over the yearsin rental value of bare land in the area it was located. In any event,there was no evidence that the increased rent was for the bare landand buildings thereon. As observed earlier, the defendant failed toestablish the creation of a fresh contract of tenancy with the plaintiffs.It was the duty of the defendant to return to the landlord the bareland leased to him at the expiry of the lease. He had not done soand is therefore liable to be ejected. I see no error in the judgmentof the District
Judge which is affirmed. The appeal is dismissed with costsfixed at Rs. 1,500.
Appeal dismissed.