MOOSAJEES LIMITED vs. ARTHUR AND OTHERS

011-SLLR-SLLR-2006-V-1-MOOSAJEES-LIMITED-vs.-ARTHUR-AND-OTHERS.pdf


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MOOSAJEES LIMITEDVSARTHUR AND OTHERSSUPREME COURTFERNANDO, J.WIGNESWARAN, J. ANDWEERASOORIYA, J.
SC APPEAL NO. 58/2001CA APPLICATION NO. 1354/98SEPTEMBER 16, 2002
Writ of Certiorari – Ceiling on Housing Property Law, No. 1 of 1973-Applicationunder section 13 – Decision of Commissioner – Appeal under section 39(1) •Board of Review – Finality clause, section 39(3) – Application of section 22 ofInterpretation Ordinance – Whether Court of Appeal varied a decision whichwas ex facie not within the power of the Board of Review – Wrong application ofsection 47 of the Law – Definition of house – Burden of proof – EvidenceOrdinance, sections 101 and 102 – Effect of Article 140 of Constitution onsection 22 of Interpretation Ordinance.
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The 1st respondent tenant applied to the 2nd respondent (Commissionerfor National Housing) under section 13 of the Ceiling on Housing PropertyLaw, No. 1 of 1973 (“CHP Law”) to purchase the house in dispute owned by theappellant. On 25.01.1984 the Commissioner refused the application holdingthe premises were business premises under section 47 of the CHP Law. Onappeal to the Board of Review under section 39(1) of the Law, the Board heldthat it was a house as it had been used for residence from 1943. The Court ofAppeal refused an application by the appellant to quash the decision of theBoard by certiorari. The Court held that in view of section 22 of the InterpretationOrdinance, read with section 39(3) of the CHP Law, the court’s jurisdiction"was ousted as the decision of the Board using the test of user was not ex facieoutside the Board’s jurisdiction and by its order dated 09.02.2001, refused theapplication for a writ.
Held;
In terms of section 47 (definition of ‘house’) the premises had beenoriginally constructed as an eating house and assessed as such,but not originally constructed for residential purpose, although since1943, it had been used for residence and assessed as such in1980.
The Court of Appeal wrongly placed the burden of proof on theappellant to prove that the building was originally constructed forresidential purposes when in terms of sections 101 and 102 of theEvidence Ordinance, the burden of proving the original purpose ofthe building was on the 1st respondent.
In the above circumstances, the decision of the Board of Review wasultra vires and a nullity-outside its jurisdiction and the appellant wasentitled to a writ of certiorari notwithstanding section 39(3) of theCHP Law. Further, Article 140 of the Constitution prevailed over section22 of the Interpretation Ordinance. For that reason also, section 39(3)of the CHP Law had no application.
Cases referred to :
Abeysekera v Wijetunga (1982) 2 SLR 737 at p. 739
Mohammed Ismail v Hussain (1993) 2 SLR 380
Anderson v Ahamed Husny Appellate Law Recorder Vol 2 March2001 p. 13
Withanarachi v Gunawardena (1996) (1) SLR 253 at p. 257
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Moosajees Limited vs. Arthur and Others
(Weerasooriya, J.)
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Sitamparanathan v Premaratne (1996) 2 SLR 202
Rex v Northumberland Compensation Appeal Tribunal (1952) 1 AllER 122
Anisminic Ltd v Foreisn Compensation Commission (1969) 2 AC-
147
O’ Reilly v Mackman (1983) 2 AC 237 at p. 278
Rv Hult University Visitor (1993 A.C.) 682 at p 701
Maradane Masque Trustes v Mahamud (1967) 1 AC 13
Atapattu v People’s Bank (1907) 1 SLR 208 at p 221
Sirisena Cooray v Tissa Bandaranayake (1999) 1 SLR 1 at p.14
Wljepala Mendis v PRP Perera (1999) 2 SLR 110 at p 119
APPEAL against the judgment of the Court of Appeal reported in (2001) 2 SLR101 (Overruled)
Dr. J. de Almeida Gunaratne with Parakrama Agalawatta and Kishali PintoJayawardena for appellant.
Rohana Jayawardena for 1 st respondent.
Uditha Egalahewa, State Counsel for 2nd respondent.
Cur.adv.vult
December, 5, 2002WEERASOORIYA, J.
The 1st respondent-respondent (“the 1st respondent”) made anapplication under Section 13 of the Ceiling on Housing Property Law,No. 1 of 1973 “(the C. H. P. Law”) to the Commissioner of National Housing(“the Commissioner”) to purchase the premises bearing No. 17, HunupitiyaRoad, Colombo 2, and the Commissioner by his order dated 25.01.1984,dismissed the application holding that the premises were businesspremises. The 1st respondent appealed against that order to the Ceilingon Housing Property Board of Review (“the Board’) under Section 39(1) ofthe C. H. P. Law, and the Board reversed the Commissioner’s finding andallowed the appeal on the basis that the premises in question wereresidential and therefore a house. The petitioner-appellant (“the petitioner”)thereafter invoked the jurisdiction of the Court of Appeal seeking to quash
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the said order of the Board by way of a writ of certiorari. The Court ofAppeal by its judgment dated 09.02.2001, dismissed the petitioner’sapplication. Thereafter the petitioner obtained special leave to appeal fromthis Court upon the following questions.
Whether the Board of Review and the Court of Appeal erred in law inapplying the test of user of premises instead of considering the purpose ofconstruction in determining whether the premises constituted a 'house'as defined under Section 47 of the C. H. P. Law ?
Whether the Board of Review and the Court of Appeal erred in law inplacing the burden of proof on the petitioner to establish that the premisesis not a house as so defined ?
Whether the Court of Appeal lacked jurisdiction to review the orderof the Board of Review in view of the clause contained in Section 39 (3) ?
Test of User
It is not in dispute that the 1st respondent as tenant of the petitionermade an application in terms of Section 13 of the C. H. P. Law to purchasethe premises. Upon such application being made, the Law requires theCommissioner to hold an inquiry into such application and upon beingsatisfied on the requirements laid down in Section 17 (1) (a), (b), and (c) tomake a recommendation to the Minister whether such premises shouldbe vested. The issue whether a tenant could maintain such an applicationdepends on whether the premises fall within the meaning of a ‘house’ asdefined in Section 47 of the C. H. P. Law :
“House” means an independent living unit, whether assessed or notfor the purpose of levying rates, constructed mainly or solely forresidential purposes, and having a separate access, and through whichunit access cannot be had to any living accommodation, and includesa flat or tenement, bu: shall not include-
sub divisions of, or extensions to a house which was first occupiedas a single unit of residence; and
a house used mainly or solely fora purpose other than a residentialpurpose for an uninterrupted period of ten years prior to March,1st, 1972;”
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Moosajees Limited vs. Arthur and Others
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This definition postulates the following criteria to be satisfied by theapplicant.
It must be an independent living unit whether assessed or not for thepurpose of levying rates.
It must have been constructed mainly or solely for residential
• purposes; and
It must have a separate access and through which.unit access cannot be had to any other living accommodation.
The Commissioner by his order dated 25.01.1984 (P1 a) held that thepremises were business premises. However, on appeal, the Board reversedthe finding of the Commissioner and held that the said premises had beenused mainly or solely for residential purposes.
Learned Counsel for the petitioner contended that the Board appliedthe wrong test by misconstruing Section 47 of the C. P. H. Law.
It is to be observed that the Board without asking itself the question asto whether the premises had been constructed mainly or solely forresidential purposes as laid down in the definition of a house in Section 47
asked the question “whether the said premises is a business
premises or not” and thereafter applied exception (2) to the definition of ahouse contained in the section. In fact, the said exception is meant totake even a building which was constructed mainly or solely for residentialpurposes, outside the definition of a ‘house’ if such building was usedmainly or solely for a purpose other than a residential purpose for anuninterrupted period of 10 years prior to March 1 st, 1972.
The Court of Appeal disagreed with the contention of learned Counselfor the petitioner that the Board formulated the wrong question and heldthat implicit in this question was the proposition whether the premises inquestion were residential or business.
The petitioner had presented his case on the basis that the premises atthe inception had been assessed for the purpose of levying rates as an“eating house” indicating that the original purpose of construction was for
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business. Therefore, the petitioner’s case was that though used by the1st respondent as residential premises, the premises had been originallyconstructed for business purposes.
It would be manifest that there was no dispute that from 1943, since the1 st respondent came into occupation of the premises, that the premiseswere used for residential purposes. But to enable the 1st respondent topurchase it, it must be shown that the premises were constructed mainlyor solely for residential purposes. It was open to the 1 st respondent tostate that premises had been continuously used as a residence therebyentitling him to the protection of the Rent Act. However, it would be adifferent situation when the (1 st respondent) tenant makes an applicationunder Section 13 of the C. H. P. law to purchase it, where different criteriaare spelt out under Section 47 of the C. H. P. Law.
In the circumstances, the Board misdirected itself in addressing thequestion whether the said premises were business premises or not. Thismisdirection was the outcome of failing to appreciate the provisions ofSection 47 of the C. H. P. Law. The Court of Appeal has taken the mistakenview that implicit in the question was whether the premises in questionwere residential or business.
The misconstruction of Section 47 of C. H. P. Law was reflected in theapplication of the test of user of premises to determine the question whetherthe premises was a house. The primary test postulated by that section isthe test as to whether the premises were constructed for residentialpurposes. It is to be noted that this section does not permit a choicebetween two primary tests. The effect of the reasoning of the Board andthe Court of Appeal was to impose a burden on the owner to prove that itwas constructed for business purposes which is contrary to what isenvisaged in Section 47.
It is necessary to consider the decisions of this Court, on the definitionof a house as given in Section 47 of C. H. P. Law.
The case of Abeysekera vs. ‘Wijetungaf ’> laid down the rule that thetest to be applied to determine what a house is, for the purposes of C. H.P. Law, must be an objective test and not a subjective one and that itsinitial construction and the purpose of construction is what matters.
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“In Mohamed Ismail vs. Hussairf2) Court applied the criterion of usermainly because of the lack of direct evidence relating to the initial purposeof construction. However, it was disclosed that the premises had beenoriginally assessed as a house. Therefore, it would be clear that, therewas no occasion to consider the original purpose of construction of thepremises and the question of devolution of the burden of proof in the contextof Section 47 of the C. H. P. Law did not arise for consideration.
On the foregoing material, 1 hold that the Board and the Court of Appealerred in applying the test of user of premises instead of considering thepurpose of construction in determining whether the premises constituteda house within the meaning of Section 47 of C. H. P. Law.
(2) Burden of ProofSection 101 of the Evidence Ordinance provides:
“ Whoever desires any Court to give judgment as to any legal right orliability dependent on the existence of facts which he asserts, mustprove those facts exist. When a person is bound to prove the existenceof any fact, it is said that burden of proof lies on that person”.
This section is concerned with the duty to prove one’s case as a wholeand is distinguishable from Section 103 which explains the burden of proofas to a particular fact. This section reads as follows
"The burden of proof as to any particular fact lies on that person whowishes the Court to believe in its existence, unless it is provided by anylaw that the proof of that fact shall lie on any particular person”.
The difference in scope could be seen from illustration (A) to Section101 which states as follows.
“A desires a Court to give judgment that B shall be punished for acrime which A says B has committed. A must prove that B has committedthe crime.”
But however, where B concedes that he committed the act alleged butpleads that it does not entail criminal liability since the general exceptionrelating to exercise of the right to private defence or any special exception
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contained in the Penal Code is applicable, B is bound to establish facts tobring him within that exception. (Vide Section 105).
Section 102 provides for the devolution of the burden of proof in thefollowing terms.
“The burden of proof in a suit or proceeding lies on that person who
would fail if no evidence at all were given on either side”.
The question as to which party should begin to lead evidence before theLabour Tribunal came up for consideration before the Supreme Court inthe case of David J. Anderson vs. Ahamad Husny.i3)The Court held thatalthough the Labour Tribunal is not bound by the Evidence Ordinance, theprinciple enshrined in Section 102, that the person on whom the burden ofproof lies would fail if no evidence at all were given on either side, is acommon sense principle, departure from which would not be justified if thecircumstances do not warrant such a departure.
In the present case, the primary test postulated by Section 47 of C. H.P. Law is whether the premises were constructed for residential purposes.If no evidence is given by either side, it is the 1 st respondent who wouldfail before the Commissioner. The 1st respondent had failed to lead anyevidence to establish that the premises were constructed for residentialpurposes. The petitioner had produced assessment extracts (P43-P53)which showed the premises were originally assessed as an eating housethough used as a residential house. There was no reason to deviate fromthe rule set out in Section 102 of the Evidence Ordinance at the inquirybefore the Board of Review.
Accordingly, I hold that the burden of proof that the premises wereconstructed for residential purposes lay with the 1 st respondent, and hasnot been discharged.
Ouster ClauseLearned Counsel for the 1 st respondent contended that the order of theBoard is final and conclusive and cannot be impeached on the materialsubmitted by the petitioner. This contention is based on Section 39(3) ofthe C. H. P. Law read with Section 22 of the Interpretation Ordinance asamended by Act, No. 18 of 1972.
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Section 39(3) of the C. H. P. Law provides:
‘The determination of the Board on any appeal made undersub section (!) shall be final and shall not be called in questionin any Court".
The material parts of Section 22 of the Interpretation Ordinance (asamended) read as follows.
"Where there appears in any enactment.the expression “shall
not be called in question in any Court".in relation to any order,
decision,which any person, authority or tribunal is empowered
to make or issue under such enactment, no court shall, in anyproceedings and upon any ground whatsoever, have jurisdiction topronounce upon the validity or legality of such order,
decisionmade or issued in the exercise or the apparent
exercise of the power conferred on such person, authority or tribunal.
Provided however, that the preceding provisions of this Section shallnot apply to the Supreme Court or the Court of Appeal as the case maybein respect of the following matters only, that is to say-
fa) Where such order, decisionis ex facie not within the power
conferred on such person, authority or tribunal making or issuing suchorder, decision….; and
(b)”•
Learned Counsel for the petitioner contended that the Board had thepower ex facie to make the order it did, namely to hold whether the premisesin question were either residential or business premises. He contendedthat nevertheless that power of the Board did not confer jurisdiction to theBoard:
to formulate the wrong question.
to misconstrue the provisions of Section 47 of the C. H. P. Law andapply the wrong test; and
to take into account irrelevant considerations.
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The ouster clause in Section 39(3) of the C. H. P. Law read with Section22 of Interpretation Ordinance came up for consideration in Withanaratchivs. Gunawardenaw where the Court held that on a consideration of theentirety of the facts and circumstances it could not conclude that thedecision of the Board was unreasonable and unsupported by the evidenceon record. The Court observed that at most the alleged error lay in theevaluation and the assessment of the oral and documentary evidence andtherefore the error if at all was one made within the area of jurisdiction ofthe Board of Review.
Thus, the two grounds enumerated namely ; (a) where a decision isunreasonable or (b) where it is unsupported by evidence are obviouslygrounds that would affect the jurisdiction of the Board.
The decision in the case of Sitamparanathan vs. Premaratna (5) issignificant in that it held that Section 39(3) of the C. H. P. law did notprotect a decision which patently lacked jurisdiction to decide.
At this point it is useful to examine this question in the light of theEnglish precedents.
In ft vs. Northumberland Compensation Appeal Tribunal6) the Court ofAppeal held that certiorari to quash the decision of a Statutory Tribunallay, not only where the tribunal had exceeded its jurisdiction but alsowhere an error of law appeared on the face of the record. This case turnedupon the amount of compensation payable to the clerk to a hospital boardin Northumberland who has lost his employment consequent upon theintroduction of the National Health Service. Upon a misconstruction of theregulations, the Compensation Appeal Tribunal refused to allow him hisfull period of service on the basis that there were two periods of serviceand that only the second period of service should be counted whichappeared to be a manifest error of law.
This case is significant in that it revived the power of review for mereerror of law on the face of the record and marked the beginning of theprocess towards bringing all decisions on questions of law within judicialreview.
The application of the doctrine of ultra vires was made wider for thepurpose of minimising the effect of ouster clauses by the House of Lords
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in the celebrated case of Anisminic Ltd. vs. Foreign CompensationCommissionS7)
In this case, the Foreign Compensation Commission rejected a claimfor compensation for a property already sold to a foreign buyer on theerroneous ground that the Statutory Order in Council required that thesuccessor in title should have been of British Nationality at a certain date.Upon Anisminic challenging the Commission’s decision on the groundthat the Commission had misconstrued the relevant 1962 order from whichthe Commission derived jurisdiction, in that the 1962 order did not requireboth the applicant and his successor in title to be British to qualify forcompensation, the House of Lords held that:
the ouster clause did not protect a determination which was outsidejurisdiction; and
(by a majority) the misconstruction of the Order in Council which theCommission had to apply involved an excess of jurisdiction sincethey based their decision on a ground which they had no right totake into account and sought to impose another condition notwarranted by the order.
The principle deducible from the Anisminic case is that every error oflaw by a tribunal must necessarily be jurisdictional. This case became theleading example of jurisdictional error by a tribunal in the course of itsproceedings.
The majority view of the House of Lords was that the error destroyedthe Commission’s jurisdiction and rendered the decision a nullity, sinceon a true view of the law, the Commission had no jurisdiction to take thenationality of the successor in title into account. Therefore, by asking thewrong question and by imposing a requirement which the Commissionhad no authority to impose, it had overstepped its power. (VideAdministrative Law- Wade and Forsyth 8th Edition – page 270)
Thus, a tribunal has in effect no power to decide any question of lawincorrectly; any error of law would render its decision liable to be quashedas ultra vires.
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This categorical pronouncement of the law was upheld and confirmedin two subsequent cases namely O’Reilly vs. Mackman m and ft vs. HullUniversity Visitor™
In Reilly vs. Mackman (supra) Lord Diplock stated that:
“The breakthrough that the Anisminic case made was the recognitionby the majority of this House that if a tribunal whose jurisdiction waslimited by statute or subordinate legislation mistook the law applicableto the facts as it had found them, it must have asked itself the wrongquestion, i.e., one into which it was not empowered to inquire and sohad no jurisdiction to determine. Its purported “determination ” not beinga “determination” within the meaning of the empowering legislation, wasaccordingly a nullity’’.
In ft vs. Hull University Visitor (supra;) Lord Browne Wilkinson statedthat :
the decision in Anisminic Ltd. vs. Foreign Compensation
Commission (19692AC 147) rendered obsolete the distinction betweenerrors of law on the face of the record and other errors of law by extendingthe doctrine of ultra vires. Thenceforward it was to be taken thatParliament had only conferred the decision making power on the basisthat it was to be exercised on the correct legal basis; a misdirection inlaw in making the decision therefore rendered the decision ultra vires”.
Lack of jurisdiction may arise in many ways as enumerated belowwhich would cause a tribunal to step outside its jurisdiction.
the absence of formalities or conditions precedent to the tribunal toclothe itself with jurisdiction to embark on a inquiry;
where at the end of an inquiry tribunal makes an order that it has nojurisdiction to make;
where in the course of proceedings tribunal departs from rules ofnatural justice, and asks itself the wrong question or takes intoaccount matters which it was not directed to take into account.(Vide Anisminic Ltd. vs. Foreign Compensation Commission at page195).
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Moosajees Limited us. Arthur and Others
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In Maradana Mosque Trustees vs. Mahamud<10) an appeal from thejudgment of the Supreme Court, the Privy Council held that where statutoryauthority was given to a Minister to act if he was satisfied that a school isbeing administered in a certain way, he was not given authority to act,because he was satisfied that the school had been administered in thatway. It was held that the Minister had asked himself the wrong questionand never brought himself within the area of his jurisdiction and therefore,acted without or in excess of jurisdiction.
In the light of the above decisions, the question'that arises forconsideration in the present case is whether the Board went outside itsdesignated area and outstepped the confines of the territory of its inquiry.
Undoubtedly, the Board asked itself the wrong question to wit; whetherthe premises were business premises or not. It would be obvious that theproper question to have asked was whether the premises was a ‘house’within the meaning of Section 47 of the C. H. P. Law. In failing to ask theproper question the Board went out of bounds and wandered outside itsdesignated area. Further, the Board erroneously laid the burden of proofon the petitioner to prove that the premises were business premises. Thisinitial misdirection caused the Board to apply the wrong test of user.
It is also evident that the misconstruction of the provisions of Section47 of the C. H. P. Law, led the Board to rely on irrelevant considerationsnamely;
that the tenant had continued to be in uninterrupted occupation for along period; and
that the premises had been assessed as a house in 1980.
On a careful examination of the above material, it is manifest that theBoard had digressed away from its allotted task and outstepped theconfines of the territory of its inquiry and thereby exceeded its jurisdiction.
Learned Counsel for the petitioner contended that in any event ousterclause in Section 39(3) of the C. H. P. Law read with Section 22 of theInterpretation Ordinance (as amended) is inoperative in view of theconstitutional implications flowing from Article 140 of the Constitution.
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Article 140 of the Constitution provides:
“Subject to the provisions of the Constitution, the Court of Appeal shallhave full power and authority to inspect and examine the records of anyCourt of First Instance or tribunal or other institution, and grant and issue,according to law, orders in the nature of writs of certiorari, prohibition,procedendo, mandamus and quo warranto against the Judge of any Courtof First Instance or tribunal or other institution or any other person:
Article 168(1) of the Constitution permits the continued operation oflegislation in force immediately before the commencement of theConstitution:
“Unless Parliament otherwise provides, all laws, written laws andunwritten laws, in force immediately before the commencement of theConstitution shall mutatis mutandis, and except as otherwise expresslyprovided in the Constitution, continue in force”.
The Supreme Court in Atapattu vs. People’s Bank<"> in interpretingArticle 168(1) expressed the view that ouster clause would be operativeonly “except as otherwise expressly provided” in Article 140 and held thatlanguage used in Article 140 is broad enough to give the Court of Appealauthority to review even on grounds excluded by ouster clause. This caseheld further that constitutional provisions being the higher norm will prevailover the ordinary statutory provisions.
In Sirisena Cooray vs. Tissa Bandaranayake(,2) the Supreme Courtupheld and confirmed the view expressed in Atapattu vs. People’s Bank.This view was reiterated in Wijepala Mendis vs. P R. P. Perera. ('3)Thus,the aforesaid decisions firmly establish the view that the ouster clausedoes not operate to exclude the jurisdiction conferred on the Court ofAppeal by Article 140 of the Constitution.
In the circumstances, the impress of finality set out in Section 39(3) ofthe C. H. P. Law read with Section 22 of the Interpretation Ordinance hasno application to the impugned decision of the Board. Accordingly, I holdthat the Court of Appeal had jurisdiction to review the decision of theBoard and a writ of certiorari would lie to quash it.
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Sobhani vs. Chairman, Urban Council, Chilaw and Others
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For the above reasons, I set aside the decision of the Board dated23.10.1998 and the Order of the Court of Appeal dated 09.02.2001 andallow this appeal with costs fixed at Rs. 5,000/= payable by the .1strespondent to the petitioner.
FERNANDO J.—I agree.WIGNESWARAN J.—I agree.Appeal allowed.