MACAN MARKAR LIMITED
v.NICHOLAS AND OTHERS
RANASINGHE. J.. L. H. DE ALWIS. J. AND H. A. G. DE SILVA. J.
S.C. No. 36/85 – CA/LA 61/84.
MAY 30. JULY 2.3. AUGUST 26. 27 AND 28. 1986.
Landlord and Tenant – Certificate of tenancy – Section 35(2) of Rent Act No. 7 of1972 – Question of Law.
The 1st respondent filed an application to the Rent Board of Colombo seeking acertificate of tenancy under s. 35(2) of the Rent Act No. 7 of 1972 in respect of certainpremises belonging to the appellant. There was overwhelming evidence that theappellant always regarded the 1st respondent's employer as its tenant and was notprepared to accept the 1st respondent as its tenant. The Rent Board held that 1strespondent was the appellants' tenant but the Board of Review reversed this findingtreating the question of sufficiency of evidence as a question of law. The Court ofAppeal quashed the decision of the Board of Review on the footing that the Board ofReview was not entitled to review findings of fact made by the Rent Board. Theappellant appealed from the decision to the Supreme Court.
Whether the evidence placed before the Rent Board was sufficient to establish acontract of tenancy between the 1 st respondent and the appellant company is clearly a 1question of law. So is the proper interpretation of the documents produced. The Boardof Review was entitled to review the Rent Board's decision. There was no contract oftenancy between the appellant and 1 st respondent.
Cases referred to:
Edward v. Bairstow -(1955) 3 AH E. R. 48.
Commissioner of Inland Revenue v. Fraser – (1942) 24 Tax Cases 498.
Ceylon Transport Board v. Gunasinghe – (1968) 72 NLR 76.
APPEAL from decision of the Court of Appeal reported at  1 SLR 130.
Dr. H. W. Jayewardene. Q.C. with S. J. Kadirgamar. Q.C.. D. S. Wijesinghe and Miss T.Keenawinna for petitioner-appellant.
H. L. de Silva, P.C. with Bimat Rajapakse and P. A. Abeyakoon for respondents.
Cur. adv. vult.
November 7, 1986.
H. A. G. DE SILVA, J.
The 1 st respondent filed an application to the Rent Board of Colomboseeking a certificate of tenancy under section 35(2) of the Rent ActNo. 7 of 1972 in respect of Flat No. 47, Galle Face Court II. Colombo3, alleging that he was the tenant of the appellant in respect of thesepremises The appellant denied that there was such a contract oftenancy and further pleaded that the Rent Board had no jurisdiction toinquire into the question as to whether there was a contract oftenancy. The Rent Board after inquiry held that there was a legalrelationship of landlord and tenant between the 1 st respondent andthe appellant. Thereupon the appellant appealed to the Board ofReview and the appeal was heard without any objection being taken bythe 1 st respondent. The Board of Review after hearing submissions byits ordei set aside the decision of the Rent Board and dismissed the1st respondent's application for a certificate of tenancy. The 1strespondent then filed an application in the Court of Appeal praying fora mandate in the nature of a Writ of Certiorari to quash the order of theBoard of Review. The Court of Appeal allowed the application of the1 st respondent and issued the Writ quashing the decision of the Boardof Review. It is from this judgment of the Court of Appeal that theappellant has appealed to this court.
The facts are briefly as follows: The 1 st respondent was employedat M/s. George Steuart & Co. as its Mills Manager and was inoccupation of a flat within the company's premises. After the death ofhis wife, he expressed a desire to vacate that flat and findaccommodation elsewhere. The company was agreeable to this andby A1 confirmed that the 1st respondent would be paid a rentallowance of Rs. 350 per month with effect from January 1973 with aview to assisting him to meet the rent he would have to pay for thenew flat. One Mrs. Muthucumaraswamy who knew that the 1strespondent was searching for a flat introduced him prior to November1973 to Mecci Macan Markar a member of the appellant-company,but the latter informed him that no flats at Galle Face Court, owned bythe appellants were available at that time.
It appears at some point of time thereafter a two bed-roomed flat atGalle Face Court tell vacant and by A2 the 1st respondent'semployers, the company, intimated to the appellants that a flat shouldbe reserved for the 1 st respondent. By A3 the appellants offered thevacant flat to the company on the conditions stated therein. Thecompany by A4 confirmed that the 1 st respondent was prepared totake the flat on the terms listed in the appellant's letter with effectfrom 15th January 1974 and forwarded a cheque A4A forRs. 2,054.75 issued by the 1 st respondent being three months rent inadvance. The company also confirmed that the monthly rental ofRs. 656.25 would be paid direct to the appellant by them. Theappellants issued a receipt A5 for the three months rent, in the nameof the company. The company thereupon by A6 returned the receiptto the appellant requesting a fresh receipt to be issued in the name ofthe 1st respondent who it said was the tenant of the flat. It furtherstated that the rental payments were being made by the company onaccount of the 1 st respondent. The appellants however refused toissue a fresh receipt in the name of the 1st respondent; and in A10stated that in their books the flat is registered in the name of thecompany. This reply was sent by the appellants after inquiries weremade by them from the company as to whether the flat was occupiedby the 1 st respondent and his family or whether there were others toooccupying it (A7), and the company had by A9 confirmed that the soleoccupants of the flat were the 1 st respondent and his family.
A further attempt was made by the 1 st respondent by A8 to have areceipt issued in his name but this attempt too did not succeedwhereupon the company wrote to the appellants A13 inquiringwhether it would be possible to register the flat in the name ot itsoccupant the 1 st respondent and olso i;tformed the appellants that the"company was only involved as far as pavmeits of rent which wembeing attended to, by way of rerovc :ie? fro n the 1st respondent'semoluments". This is confirmee by A16, the particulars ofemoluments for April 1978 of the I st respondent which shov. that asum of Rs. 350 has been credited to r 'S •-iroluments as rentallowance and a sum vf Rs. 686 has been dnaucteo therefrom as rentpaid. The compary rather informed the Deputy 'oori Controller inA11 that the 1st lespondent, their Mils Ma lagc ves the tenant ofthe flat concerned and that rants were being paid bv the company onaccount of him. A18 confirms this latter position where the companyacknowledges the receipt from the 1 st respondent, a sum of Rs. 686being the rent of flat at Galle Face Court occupied by him.
The appellants by A19 made a complaint tc the company as regardsa nuisance caused by the servants of the 1 st respondent and the factthat this letter was passed on to the 1 st respondent the occupier of
the flat who would reply direct to the appellants was intimated by A20and in fact the 1 st respondent by A21 informed the appellants that hehad taken action to inform this servant about the complaint. He furtherrequested the appellants to address all communications regarding theactual running of the flat, its proper maintenance or any other problemto him who is the appellant's tenant and not to the company who areonly his employers and have merely consented to deduct the rent fromhis remuneration and forward it to the appellants. To this theappellants wrote A22 to the 1 st respondent stating that the tenant offlat in question, according to their books was the company and assuch all communications regarding the flat would continue to beaddressed to them. A further communication from the appellantinquired from the company as to the position of the flat occupied bythe company as the appellant's tenant in view of the fact that theGovernment had decided to take over all the Agency Houses in SriLanka. The company replied that only a part of their Agency businesshad been taken.
The Court of Appeal in its judgment gave the grounds for issuing theWrit of Certiorari to quash the decision of the Board of Review asfollows:
The Rent Board had come to a conclusion on the plain readingof the documents and the Board of Review had done the same;
the Rent Board had taken into account that the sheet anchor ofthe appellant's case was that their books or registers had thecompany as tenant, but these books were not produced whilethe Board of Review had not taken into account that the 1 strespondent had given evidence and it had also glossed over thenon-production of the books and registers by the appellants;
the Board of Review had not shown that there was no evidencefor the finding of the Rent Board and that the finding wasinconsistent with the evidence and contradictory of it ;
what the Board of Review had done was that it had on the samematerial substituted for the findings of facts and opinion of theRent Board its own findings on facts and its opinion, i.e. theBoard of Review had come to a different conclusion on the factsfrom that of the Rent Board and given its finding "a legaldecoration or embellishment” by reference to the three casescited in its order;
the main question before the Rent Board was to determine whowas the tenant of the flat i.e. whether it was the 1 st respondentor the company and the order of the Rent Board showed that itcorrectly directed itself as to who is a tenant. Its finding fromthe facts that Nicholas was the tenant was an inference of factas set out in the judgment of Viscount Simonds in the Edward v.Bairstow (1) ;
the decision of the Board of Review was not in accordance withthe principles set out in the cases cited by it in the course of itsorder;
the Board of Review had acted without jurisdiction or in excessof jurisdiction in holding that the 1 st respondent was not thetenant of the appellant in respect of that flat.
Appellant's counsel submitted that since the Court of Appeal doesnot act as an appellate tribunal in granting a Writ of Certiorari, therewas no ground in this case which would justify interference by theCourt of Appeal. He submitted there was no case put forward on thebasis that as far as the Board of Review was concerned there was (a) alack of jurisdiction (b) a denial of natural justice or (c) an error on theface of the record. He further submitted that the decision of the Boardof Review was final and conclusive under section 40(4) of the RentAct and even if one assumes the Court of Appeal had the power, it stillcould not interfere with the final and conclusive determination of theBoard of Review and deliver a judgment of its own. It was hiscontention that the interpretation of documents and their applicationwas a question of law and at the least it is a question of mixed law andfact. He cited the case of Edward v Bairstow (supra) (1) where it washeld per Viscount Simonds at pages 53 and 54 that-
"though it is a pure finding of fact, it may be set aside on groundswhich have been stated in various ways but are I think, fairlysummarised by saying that the Court should take that course if itappears that the Commissioners have ac fed without any evidenceor on a view of the facts which could not reasonably be entertained
To say that a transaction is or is not an adventure in the nature
of a trade is to say that it has or has not, the characteristics whichdistinguish such an adventure. But it is a question of law, not of fact,what are those characteristics, or, in other words what the statutorylanguage means. It follows that the inference can only be regardedas an inference of facts if it is assumed that the tribunal which madeit is rightly directed in law what the characteristics are".
Lord Radcliffe in his speech at page 57 states-
"When the case comes before the Court, it is its duty to examinethe determination having regard to its knowledge of the relevantlaw. If the case contains anything ex facie which is bad in law andwhich bears on the determination, it is obviously erroneous in pointof law. But without any such misconception appearing ex facie, itmay be that, the facts found are such that no person acting judiciallyand properly instructed as to the relevant law could have come tothe determination under appeal. In these circumstances too theCourt must intervene. It has no option but to assume that there hasbeen some misconception of the law, and this has been responsiblefor the determination. So there, too, there has been an error in pointof law. I do not think that it much matters whether this state ofaffairs is described as one in which there is no evidence to supportthe determination or as one in which the true and only reasonableconclusion contradicts the determination".
In Commissioner of Inland Revenue v. Fraser (2) it was held that-
"in cases where it is competent for a tribunal to make findings offact which are excluded from review, the Appeal Court has alwaysjurisdiction to intervene if it appears either that the tribunal hasmisunderstood the statutory language – because a properconstruction of the statutory language is a matter of law – or thatthe tribunal had made a finding for which there is no evidence orwhich is inconsistent with the evidence and contradictory of it. It isnot as a rule possible to say whether the tribunal in any particularcase where the Court finds that it has erred, has failed to appreciatethe meaning of the statute or whether it has made a finding withouthaving evidence to support it".
It has been contended that as an appeal to the Board of Reviewfrom a decision of a Rent Board was, by the proviso to section 40( 1)of the Rent Act No. 7 of 1972, only upon a matter of law, the Board ofReview could not substitute its views on the facts for those found bythe Rent Board.
The Board of Review in its order had correctly stated the positionwhen it cited the case of Ceylon Transport Board v. Gunasinghe (3) inwhich Weeramantry, J. sets out and approves the principles that anappellate body should adopt where an appeal on a finding of fact is notavailable. He states that-
“where the statute makes an appeal only in respect of questionsof law, the appropriate Court is not without jurisdiction to interferewhere the conclusion reached on the evidence is so clearlyerroneous that no person properly instructed on the law and actingjudicially could have reached that decision".
This judgment also goes on to follow the dictum referred to earlier ofLord Normand in Inland Revenue v. Fraser (supra) (2).
The Board of Review has enumerated the grounds on which it hasset aside the order of the Rent Board as follows
The finding of the Rent Board that there was a lawful contract oftenancy was based on an incorrect construction of thedocuments filed and the evidence led.
The 1st respondent gave evidence and relied on thedocuments produced. His only witness was Mrs.Muthucumaraswamy whose evidence did not in any way helpthe Board to come to the conclusion it did. Learned counsel forthe 1 st respondent contended that the Rent Board considereda multiplicity of facts and circumstances before it came to theconclusion that the 1st respondent was the tenant of theappellants and not the Company. In fact the Rent Board in itssubsequent findings has clearly shown a misconception of theevidence and a perusal of the order belies its assertion that allthe documents produced have been analysed in their trueperspective. It appears that the Rent Board has failed toconsider the contents of the documents.
(a) The letter A3 constitutes the offer and was made to theCompany and not to the 1 st respondent.
In fact the only occasion that the 1st respondent had anycontact with the appellants was at the time Mrs.Muthucumaraswamy introduced the 1st respondent to Mr.Mecci Macan Markar but on that occasion there was no vacantflat and as such no offer could have been made to the 1strespondent.
Similarly A4 indicates that though the offer was to theCompany it was being accepted on behalf of the 1strespondent, i.e. a person to whom no offer was made. The rentwas to be paid by the Company.
The receipt A5 for the three months advance of rent wasissued by the appellants to the Company.
The letter A6 asked for the receipt to be issued in the name ofthe 1st respondent but this was refused by A10 as theCompany had been registered as tenants in the appellant'sbooks. From this it was clear that the appellant was notprepared to accept the 1 st respondent as its tenant.
The continued payment of the monthly rent by the Companyafter letter A14 indicates that they had accepted theappellant's position as set out in A 14.
The documents clearly indicated that the appellants were at notime willing to accept the 1 st respondent as their tenant andhence there was no agreement as was necessary to create alawful contract of tenancy. In short there was no consensus adidem between the 1st respondent and the appellants. Learnedcounsel for the appellants submitted that the reason why the1st respondent was so anxious to be considered the tenantwas because he wanted to purchase the flat under the Ceilingon Housing and Property Law and to this end he had made anapplication which had been rejected.
The documents subsequent to A14 and the contract of theparties appear to indicate that though the Company had notwanted to take the premises on rent, they acquiesced in theposition adopted by the appellants, subsequent to the receipt ofA14. They probably adopted this attitude in order to ensurethat their employee had 'convenient and suitable'accommodation to enable him to attend to his duties as MillsManager. Whatever their motive may have been it would notcreate a contract of tenancy between the appellant and 1strespondent.
The non-production of their books by the appellants does notdetract from the overwhelming evidence afforded by thedocuments produced, that the appellants had the Company inmind as their tenants and not the 1 st respondent.
Apart from the material provided by the documents, there wasno oral evidence given of an agreement between the 1strespondent and the appellants.
Whether the evidence placed before the Rent Board was sufficient toestablish a contract of tenancy as between the 1 st respondent and theappellant-company, is clearly a question of law. So is the properinterpretation of the documents produced. In my view the Board ofReview has rightly held that-
"The finding of the Rent Board is inconsistent with the evidence
and contradictory of it".
Hence the Board of Review was entitled to review the Rent Board'sdecision and make the order the Board of Review has made.
Submissions were also made on the question whether the Court ofAppeal had jurisdiction to review the decision of the Board of Reviewin view of section 40(11) of the Rent Act which states that thedecision of the Board of Review on an appeal from the order of a RentBoard shall be final and conclusive. In view of my conclusion that theBoard of Review had the jurisdiction to review the Rent Board's orderin the circumstances of this case, it is not necessary for me to dealwith the question regarding the jurisdiction of the Court of Appeal toentertain this application.
I therefore allow the appeal and set aside the judgment of the Courtof Appeal. The 1st respondent will pay to the appellants Rs. 4,200, ascosts in the Court of Appeal and as costs of the appeal to this Court.
RANASINGHE, J. – I agree.
ALWIS, J. – I agree.
. Appeal allowed.
MACAN MARKAR LIMITED v. NICHOLAS AND OTHERS