024-SLLR-SLLR-2002-V-1-JOSEPH-v.-ARUMUGAM.pdf
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JOSEPH
v.ARUMUGAM
COURT OF APPEALWEERASURIYA, J. ANDDISSANAYAKE, J.
CA NO. 299/92 (F)
DC COLOMBO NO. 7010/REMARCH 08, 2000APRIL 27, 2000MAY 26, 2000 ANDAUGUST 30, 2000
Rent Act, No. 7 of 1972 – Section 2 (4) excepted premises – Doctrine of Crownexemption – Applicability of doctrine in respect of subletting with a third partyby a tenant of the Crown – Interpretation Ordinance, Section 3.
The plaintiff-respondent instituted action against the defendant-appellant seekinghis ejectment from the premises in question. It was the position of the plaintiff-respondent that the premises were excepted premises as the Commissioner ofNational Housing (CNH) was the landlord and also the owner for and on behalfof the State.
The District Court held that the Commissioner of National Housing was not thelandlord but as the Commissioner was the owner of the premises for and on behalfof the State the premises are excepted premises.
On appeal -Held:
The Commissioner of National Housing had let the premises to theplaintiff-respondent who in turn had sublet to the defendant-appellant.“Crown exemption" in respect of subletting with a third party by a tenantof the crown is not permissible.
Exemption available under section 3 of the Interpretation Ordinance fromthe operation of the Rent Act applies only to a contract of tenancy betweenthe State and a tenant when rights of the State are directly affected. Thisexemption cannot be extended to a sub-tenant to benefit a tenant of thestate vis-a-vis his own tenant on a contract of subletting.
CA
Joseph v. Arumugam (Weerasuriya, J.)
205
Per Weerasuriya, J.
“Upon an overall consideration of the provisions of the Rent Act it is notpossible to give undue prominence to sections dealing with premises andconclude that the Rent Act operates in respect of premises (in rem)."
APPEAL from the judgment of the District Court of Colombo.
Cases referred to :
Davith Appu v. Attorney-General – 49 NLR 350.
Fonseka v. Wanigasekara – 65 NLKR 552.
Nandias Silva v. Unambuwa – 72 NLR 382.
Clark v. Downes – 1931 145 LT 20.
Wirral v. Shaw – 1932 – 2 KB 274.
Clark v. Mawtsy – 1931 – 145 LJ.
Imbuldeniya v. De Silva – 1987 – 1 – 367.
Gamini Jayasinghe with P. P. de Silva for defendant-appellant.
A. K. Premadasa, PC with C. E. de Silva for plaintiff-respondent.
Cur. adv. vult.
December 08, 2000
WEERASURIYA, J.
The plaintiff-respondent by his plaint dated 20. 12. 1987, instituted 1action against the defendant-appellant seeking his ejectment from thepremises bearing No. 19, Left Circular Road, Battaramulla, morefullydescribed in the schedule to the plaint and damages. The defendant-appellant in his answer, whilst denying averments in the plaint,prayed for dismissal of the action. This case proceeded to trial on9 issues and at the conclusion of the case, learned District Judgeby his judgment dated 02. 11. 1992, entered judgment for theplaintiff-respondent. It is from the aforesaid judgment that this appealhas been preferred.10
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At the hearing of this appeal, learned counsel appearing for thedefendant-appellant contended that learned District Judge hadmisdirected himself in holding that the defendant-appellant was notentitled to the protection of the Rent Act since the premises wereowned by the State.
At the commencement of the trial before the District Court on10. 02. 1992, the tenancy of the defendant-appellant under theplaintiff-respondent and the receipt of the notice terminating thetenancy were admitted.
The claim of the plaintiff-respondent that the premises were 20excepted premises was based on two legal positions, namely –
That the Commissioner of National Housing was the landlordof the said premises within the meaning of Regulation 2 ofthe schedule to the Rent Act, No. 7 of 1972, and
That the Commissioner of National Housing was the ownerof the premises for and on behalf of the Democratic SocialistRepublic of Sri Lanka.
The agreement between the Commissioner of National Housingand the plaintiff-respondent was produced at the trial, marked P1.
The learned District Judge came to a finding that the Commissioner 30of National Housing was not the landlord of the premises in suit.Nevertheless, he came to a finding that the Commissioner of NationalHousing was the owner of the premises for and on behalf of thegovernment and therefore, premises are excepted premises. Thelearned trial Judge's finding that premises were excepted premiseswas on the basis of the reasoning in the following judgments. DavithAppu v. Attorney-General,(1) Fonseka v. Wanigasekera,<2) and Nandias
(3)
Silva v. Unambuwa.
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In Davith Appu v. Attorney-General (supra) it was held that theright of the Crown to eject an overholding tenant of the Crown property 40is not affected by the limitations placed on a landlord by section 8of the Rent Restriction Ordinance.
In Fonseka v. Wanigasekera (supra) it was held that the RentRestriction Act does not apply to premises belonging to the Crown.
In Nandias Silva v. Unambuwa (supra) it was held that the plaintiffwas entitled to sue the defendant for ejectment on the basis of amonthly tenancy and the Rent Restriction Act is not applicable.
In the instant case, the Commissioner of National Housing hadlet the premises in suit to the plaintiff-respondent, who in turn hadsublet premises to the defendant-appellant. Therefore, it is necessary soto examine the position whether exemption of the Crown from theoperation of the Rent Act would extend to a sub-tenancy with a thirdparty.
In examining this question it is vital to bear in mind that, in DavithAppu v. Attorney-General (supra) the issue that came up for consid-eration was a direct tenancy between the Crown and Davith Appu.
It was held that the Crown's right to eject its tenant was not affectedby the provisions of the Rent Restriction Ordinance, applying section3 of the Interpretation Ordinance which embodied the English doctrinethat no enactment shall, in anyway, affect the right of the Crown unless 60it is therein expressly stated or appears by necessary implication.
At page 157 Gratien, J. observed that : "It has been held that theRent Restriction Act of England does not bind the Crown" and referredto "Clark v. Downed4> and Wirral v. ShaW'f*
Upon a close examination of the judgment of Davith Appu v.Attorney-General (supra) it would be apparent that the two Englishcases had been quoted in support of the proposition of law containedin our Interpretation Ordinance to deal with a case of direct tenancyunder the Crown.
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Therefore, the question would be, whether the above proposition 70of the law of Crown exemption from the operation of the Rent Actcould be extended as applying to a tenant of the Crown in respectof his separate contract of subletting with a third party.
In the case of Fonseka v. Wanigasekera {supra) it was observedthat, facts of that case were stronger than House of Lords case inthat Crown had even parted with the title when the plaintiff filed actionagainst the tenants and still it was held the Rent Restriction did notapply. Thus, there was a brief reference to Clark v. Downes (supra)and Clark v. Mawby.® It is significant to note that, the case of DavithAppu v. Attorney-General (supra) had not been cited in that case, so
In the case of Nandias Silva v. Unambuwa (supra) the judgmentin Fonseka v. Wanigasekera (supra) was followed, on the basis thatfacts were analogous to the facts of that case. Therefore, the judg-ments in Fonseka v. Wanigasekera (supra) and Nandias v. SilvaUnambuwa (supra) cannot be relied upon as authorities to extendthe Crown exemption as set out in section 3 of the InterpretationOrdinance to a contract of subletting with a third party by a tenantof the Crown.
In the circumstances, it is necessary to briefly refer to the factsof Clark v. Downes (supra) and Clark v. Mawby (supra).90
His Majesty's Office of Works built huts for munition workers duringthe war in 1915. They became vacant after 1923 but were re-let totenants in 1924-25. In 1926 the Crown sold the property to theWhitmore Park Estate Limited who in turn leased the property tothe plaintiff who thereafter sought possession of the premisesoccupied by Downes and Mawby. The County Court Judge dismissedthe claim, holding that the premises were controlled and the plaintiffappealed. This appeal was decided in favour of the appellant Clark,on the basis that Rent Acts of England operated in rem. It may benoted the case of Wirral v. Shaw (supra) referred to in Davith Appu100
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v. Attorney-General {supra) whittled down to some extent theapplication of the doctrine of Crown privilege in that it was held thatupon a sale or assignment by the Crown this prerogative comes toan end save only that where premises are once sold subject toan existing tenancy that exemption continues until that tenancy isdetermined.
It is to be noted that in England in 1952 Crown exemption wasabolished except where the Crown was directly affected.
Meggary in The Rent Acts (11th edition, volume 1, 1980 – at page145) under subhead "Abolition of Crown Exemption for Third Parties";110The Act of 1952 states that : "the broad effect of the Act of 1952was to abolish Crown exemption except where the Crown wasdirectly affected. Thus, the Crown was free from the Acts in relationto Crown tenants, but those tenants were subjected to the Acts inrelation to their sub-tenants".
Therefore, the application of the doctrine of Crown exemption asstated in Clark v. Downes {supra) and Clark v. Mawby {supra) inrespect of subletting with a third party by a tenant of the Crown isnot permissible.
Learned President's Counsel Appearing for the plaintiff-respondent120contended that in terms of section 2 (4) of the Rent Act, that so longas the Act is in operation in any area, the Rent Act applies to allpremises in that area other than premises mentioned in (a), {b), (c),
(cO and (e). Therefore, he contended that protection in terms of theRent Act applies to premises {in rem) and not to contracts.
There is no doubt that the rights and duties of a landlord andtenant and the determination of the statutory rent have to beconsidered with reference to the premises but the Rent Act as a wholerefers to the rights and duties of a landlord, tenant and other incidentalmatters. Thus, upon an overall consideration of the provisions of the 130
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Rent Act, it is not possible to give undue prominence to sectionsdealing with premises and conclude that Rent Act operate in respectof premises (in rem).
In Imbuldeniya v. D. de Silva,m it was held that the entity ofprotection granted by the provisions of the Rent Act is the contractof tenancy and not the premises.
In the light of the foregoing, it would be clear that the exemptionavailable to the State under section 3 of the Interpretation Ordinancefrom the operation of Rent Act applies only to a contract of tenancybetween the State and a tenant where rights of the State are directly 140affected.
This exemption cannot be extended to a sub-tenancy to benefita tenant of the State vis-a-vis his own tenant on a contract ofsubletting.
For the above reasons, it seems to me that learned District Judgehad erred in holding that the sub-tenancy sued upon by the plaintiff-respondent in this action was exempted from the operation of the RentAct on the basis that State owned the said premises.
Therefore, I set aside the judgment of the District Judge dated
11. 1992 and allow this appeal with costs.iso
DISSANAYAKE, J. – I agree.
Appeal allowed.