118-NLR-NLR-V-56-K.-KANAGALETCHUMY-et-al-Appellant-and-A.-M.-M.-MARIKAR-Respondent.pdf
Kanagaletchumy v. Martkair
465
1954Present: Nagallngam S.P.J. and de Silva J.K. KANAGALETCHUMY el al.t Appellants, and A. M. M.MARIKAIR, Respondent<S'. C. 256—D. C. Balticaloa 7V8L
J.tusc—Xon-juiyiuent of rent and taxes—-Forfeiture.
In tho absence of a forfeiture clause or an express condition a loaso is notliable to bo cancelled for'breach of a covenant to pay-rent unless (1) tlio non-payment of rent is deliberate and persistent or-contumacious, (2) the lesseeis in arrcar of rent for two years and (3) the lessor gives tho lessee notico ofterminating the lease if the arrears are not paid.
An undertaking by a lessee to pay taxes in respect of the leased premisesis a condition for tho breach of which the lossor is entitled to a cancellationof tho lease.
406
DE SILVA J.—K'anagaletchtmty v. Matikair
xVPPEAL from a judgment of the District Court, Batticaloa.
Renganaihan, for the 1st and 2nd defendants appellants.
(S'. J. V. Chelvanayakam, Q.G., with E. Jayaweerasingham, for theplaintiff respondent.
Cur. adv. vul!.
December 21, 1954. de Silva J.—■
The two questions which come up for decision in this appeal are (1)In what circumstances is a lessor ontitled to a cancellation of a lease fornon-payment of rent which the lessee has undertaken to pay and (2) Is alease liable to be cancelled for a breach of an undertaking to pay taxes,when the indenture of lease itself is silent as to what is to happen in theevent of a breach of these covenants ?„
The plaintiff-respondent who is the owner of tho promises describedIn the amended plaint leased the name to one Kanapathipillai by bondP 1 dated 20th March, 1948, for a period of 10years at a rental of Rs. 3,000.That part of this deed which is material to this caso roads :—
“ I do horoby doclare that tho sum of Rs. 1,000 paid by tho lossooas advance on this date should always remain with me as deposit,that at the end of overy month he should pay me a sum of Rs. 25 asmonthly rent and obtain receipt, that he should pay tho taxes duoto tho U. C., effect necessary repairs and put up the buildings requiredaccording to his convenience and render proper accounts to me, thatat tho expiration of the said term of lease I shall repay this moneytogethor with the sum of Rs. 1,000 received as advance, that in de-fault thoroof he can sue for and recover the same, that I shall settle alldisputes and objections that may arise as regards lessee’s possessionand that tho lessee and his substitutes, heirs, executors, administratorsand assigns can possess tho Ion ed preporty until the expiration of thosaid term of lease. Thus declaring and binding myself and mysubstitutes, heirs, executors, administrators and assigns and givingovor lease possession of the said property I have executed this deedof lease.
I tho said Murugappar Kanapathipillai the lessee consenting to thoabove said conditions have accepted this lease.”
The lessee died on or about 31st October, 1949, having devised by hislast will all his property to his daughter, the 1st defendant, a minor,whoso guardian ad litem is the 2nd defendant, her mothor. The 3rd
DE SILVA J.— Kanayalelehun»y v. Marikatr
467
and 4th defendants are sub-tenants of the 1st defendants, but thoy havesince the institution of this action vacated the premises. No rent ortaxes whatsoever has been paid on this lease by the original lessee, or byanyono else. Taxes were paid by the plaintiff during the pendencyof the lease.
The plaintiff instituted this action on 2nd February, 1852, for acancellation of the lease and the ejectment of the defendants to recoverarrears of rent and damages. Although the 1st and 2nd defendantsin their answer denied the averment in the plaint that the lessee hadfailed to pay rent or taxes, the learned District Judge held that neitherrent nor taxos was paid by the lessee and that therefore there was abreach of covenant which entitled the plaintiff to claim a cancellationof the lease and to recover arrears of rent and taxes paid by him. Againstthis judgment the 1st and 2nd defendants have appealed.' Mr. Renga-nathan who appears for the appellants contends that the lease cannotbe cancollod for the non-payment of rent or taxes in the circumstances,of this case.
The finding of the learned District Judge that no rent or taxes waspaid by the lessee is not canvassed. The deed P 1 does not contain aforfeiture clause for non-payment of rent or taxes. The. undertakingsto pay rent and taxos are referred to in P 1 as “ conditions ”. A “ condi-tion ” is a stipulation the breach of which gives rise to a right to treatthe contract as repudiated. Morice in his treatise “ English and RomanDutch Law ” (2nd Edition page 177) states, “ If it appears from theterms of the lease that the fulfilment of certain stipulations arc conditionsof the lease the Courts will enforce forfeiture”. He bases this observationon a passage appearing in Kersteman’s Woorderboek under fluur whichroads “ A lease for a period of successive years contracted on conditionthat tho rent shall be paid without any delay on certain fixed dates,on tho lessee proving in default to do so is immediately cancelled andextinguished with all its results and consequences”. Tho words“ without any delay ” appearing in this passage indicates that time is oftho essonco of tho contract. The language of P 1 does not permit asimilar construction being placed on it. If it was understood betweentwo parties to this document that a failuro to pay rent was to result in thecancellation of the lease that intention could havo been expressed byusing such language from which this intention could have been inferred.
It is not clear whether the Tamil word in P 1 which has boon translatedas “ conditions ” l>oar the same connotation as the latter word doeswhen used in the strict legal sense. The whole document ha? to be *considered to ascertain the roal intention of the parties in regard to thopayment of rent. When forfeiture is involved the document has to boconstruod strictly. If two interpretations can be placed on it the oneraoro favourable to tho lessee must be adopted. On.proper examinationof it, I do not tliink it is possible to say that the relevant Tamil wordovon if it has been correctly translated to mean “ conditions ” was usedin respect of rent, in the sense of a stipulation the breach of which givesa right to treat the contract in P 1 as at an end. In my view thesewords with reference to rent do not signify anything more than a covenant.
468
DI3 SII.VA J.—Kanagaletchumy v. Marikair
Therefore it is necessary to consider whether according to the commonlaw (Roman Dutch Law) a breach of a covenant to pay rent entitiesthe landlord to claim a cancellation of the lease:
It is well settled law that it is not in every case of failure to pay rentthe landlord is entitled to ask for a cancellation of the lease. To claimsuch a right the non-payment must be deliberate and persistent or con-tumacious. That is not all. The lessee must be in arrear of rent for 2years. For, Voet says that a landlord is entitled to “ expel ” a tenantwhen he is “ for 2 whole years in arrear of rent ” (Commentary on ThoPandects 19.2.16). The same view is expressed by Grotius (3.9.11).Mr. Renganathan contends that the tenant should not only be in arrearof rent for a period of 2 years but that the landlord should also give himnotico of terminating the lease if the arrears are not paid. NeitherVoet nor Grotius expressly refers to the necessity of such a notico, butHuber in his work entitled “ The Jurisprudence of My Time ”, states,
“ It should, however, be understood that a landlord who wishes to availliimsolf of this 2 years right, must observe the due order of law, and Lstherefore obliged to give notice ”. It is true that here Huber is referringto tho law applicable in Friesland, a province of Holland. It is necessaryto consider whother this law prevailed in the other provinces of Holland,as well. In South Africa tho Courts have constantly followed that thisnotice on tho defaulting tenant was strictly necessary. Jones v. ColonialGovernment *. The question whether this notice was required in thoother provinces of Holland was considered by de Villiers C.J. andanswered in the affirmative in the case Estate Thomas v. Kerr and another -.In that case, while referring to the decision in James v. Colonial Govern-ment, he observed : “ Tho Court, however, went further, and finding thatno notico of cancellation had been given to the lessee expressed theopinion dn the authority of Huber (Hed Recttsc 3:9:1 and 2) that inthe absence of such a notice the Court would not have ordered cancella-tion if an action for the purpose had been instituted by the Government.Huber’s observations apply, to the law of Friesland where the departurefrom tho practice and principles of Roman Law was less marked thanin the other provinces of the Netherlands, and if, according to him, anotification putting an end to the lease was necessary, it would a fortiorihave been necessary in the other provinces1’. Although Voet docs notrefer to the necessity of this notice when he states that the landlord isentitled to cancel a lease when the tenant-is in arrear of 2 years rent ,yet later he makes this significant observation: •“ In those cases in whichexpulsion of tenants before the expiry of the lease is allowed by the loasoor by the laws or by the usages, it has to be observed, that the tenantsof rural and urban tenements must not be disturbed without the publicauthority of a judge, token they have refused tb quii after private warning ”(19:2: 18). The words “ when they have refused to quit after private-warning ”, clearly contemplate that notice had to be given to the default-ing tenant before judicial proceedings were instituted. Therefore «thorequirement of this notice should be considered to be a part of the RomanDutch Law which governs us. In the instant case the plaintiff did notgive notice to the original lessee or the 1st defendant of his intention to’ 75 .9. C. 245 at 249.‘ 20 S. C. 354.
DE SILVA J.—Kanagaletchumy v. Mari Lair
400
terminate the lease whan 2 years rent was in arrear. It is true that theplaintiff on 15.9.48 gave the notice P 3 to the original lessee informinghim that he was in arrear of rent and that he should consider the leaseas having been cancelled. But, at that time the leasee was not in arrearof rent for 2 years. That being so, the notice is ineffectual for thepurposes of this action. It would appear, however, that it is sufficientto give the notice before the expiry of the 2 years, provided it is statedin it that the lease would stand cancelled in the event of the rent beingin arrear for 2 years. Such a notice has to bo given within 12 monthsimmediately preceding the expiry of the 2 years. Accordingly theplaintiff is not entitled to a cancellation of tho lease on the ground ofnon-payment of rent.
His romody should be a claim to recover arrears of rent. In this casetho plaintiff set up a claim for rent also. In any event he is entitled tothat rolief.
In regard to taxes, Mr. Renganathan argued that the lease cannotl>e cancelled for non-payment of taxes. The lessee gave a solemnundertaking to pay the taxes to be levied by the Urban Council. Thonon-payment of these taxes would result in drastic consequences to thoplaintiff. This agreement to pay the taxes is binding on the lesseealthough tho plaintiff continued to be liable to pay them as far as thoUrban Council was concerned. The lessee however failed to fulfil theagrooment to pay the taxes. If the plaintiff had not been vigilantenough to pay these taxes himself there was a grave and imminentrisk of tho leased premises being sold up at the instance of tho UrbanCouncil. Tho taxes had to be paid quarterly. I have not been able todiscover tho views of Voet or Grotius on this matter, but according toHuber a landlord is entitled to give notice terminating the leaso for non-payment of taxes. He states, “ We also said above that similarly totho case of quit rent tenure, notice may be given terminating the leaso,if tho lessee does not pay the land-tax or floreen-schatting, as we call it ”(3:9: 14). There is no time limit fixed within which this notice has tobe guen. In the notice P 3 there is a reference to the failure to observetho conditions of tho lease. Although that notice does not oxpiosslvrefer to the failure to pay taxes it is sufficient, in my view, to notify tholessee of the fact that ho had committed a breach of tho agreement topay taxes. This lessee is not entitled to claim equitable relief for hisdefault in the payment of taxes in view of the fact that ho had repeatedlyanil deliberately refrained from paying the taxes. In these circumstancesit is not unfair to hold that the undertaking to pay taxes is a conditionfor tho breach of which the plaintiff is entitled to a cancellation of tholease.
The appeal must therefore fail. Accordingly I dismiss the appealwith costs.
NaOjU.inijam S.P.J.—I agree.
A j>jtea l dism issed.