058-NLR-NLR-V-58-O.-L.-M.-MACKEEN-Appellant-and-M.-V.-M.-SALLIEH-Respondent.pdf
1956Present:H. N. G. Fernando, J.
O.1j. 3f. 3L4CKEEX, Appellant, and 31. V. 31. S ALU EH,
Respondent
S. C. SO—C. R. Colombo, 5S./73
Jlrnt Restriction Act. A’o. 29 of J9JS—Section 13—“ Arrcar oj -rent ’’—Informalwritten agreement between landlord and tenant—Deposit of sum to cover last(wo months' rental—Should it be set. off against any unpaid rent ?—Preventionof Frauds Ordinance. ..
A tenant would bo in arrcar of rent within tho meaning of section 13 of theKent Kcstriction Act even if a small portion only of tho rent due remains unpaid.
An informal written contract of monthly tenancy contained a recital that-tho tenant had deposited a certain sum of money to bo taken as rent for tho last-two months “ on tlio determination of the tenancy by consent or by process oflaw ”.
Held, that tho landlord was not hound, even without a request of tho tenantin that behalf, to apply tho deposited sum in satisfaction of unpaid rent for unytwo months. It could not bo contended that tho provision in tho agreementregarding the deposit of two months’ rent was unlawful ns being in breach of thePrevention of Frauds Ordinance in that it purported to have tho effect of creatinga tenancy for a period longer than ono month.
-AtPPEAL from a judgment of the Court of Requests, Colombo.
O. Thiagal ingam, Q.C., with J/. I. -)/. Cas-sim and T. Parathalingam,for the defendant-appellant.
S. II. Mohamad, for the plaintiff-respondent.
Cur. adv. vull.
Xovember 19, 1956. Id. N. G. Fer.vaxdo, J.—
This appears to be a hard case, but I do not think it should be allowedto make bad law. The learned Commissioner has found that the renttaken by the plaintiff for a certain period was in excess of the authorisedrent. The amount of the excess at tho end of March 1955 was found tobo Rs. 37 ■ GO ; rent at the authorised rate of Rs. 14 • 70 had not been paidfor the months of April, 31ay and June 1955, and but for the excess thetenant would at the time of the notice (Sth July 1955) have been in arrearswithin the meaning of section 13 of tlie Pent Restriction Act Xo. 39 of1948, in respect of the months of April and 3Iay 1955 ; if the amount ofthe excess was equal to or greater than the rent due for two monthsthen the tenant would not have been in arrears withn the meaning of theAct. Unfortunately for him, the amount of the excess white fullycovering the rent for April was insufficient, by Rs. 1 – SO, to cover also therent for 3fay. The Commissioner therefore had no option but to holdthe tenant was in arrears of rent for 3Iay.
Counsel has argued that in the expression “ the rent has been in arrcarfor ono month after it has become duethe term rent,
means the full rent and not also a part of the full rent; upon this argu-ment what was in arrcar was not the rent but only a part of it. I thinktho fallacy of the argument is exposed if one were to take the case of
premises the authorised rent of •which is say Its. 500; the tenant cannotin my view plead that section 13 does not apply because he had made apayment of Rs. 50 against the rent. The rent should properly be said tobe in arrear if the landlord has notin fact received the Avhole rent, and thelandlord cannot be said to have received the whole rent if in fact he hasonly received a part of it.
Counsel lias taken a further point which is of interest and perhapsof importance. The informal written agreement between the partieswas for the tenant to take the premises on rent at the monthly rent ofJis. 1-1-70 payable on the first day of each month and was effective to create atenancy from month to month. There was in addition a recital in theagreement that the tenant had deposited the sum of Us. 29'40 " to betaken as the last two months rental on the determination of my tenancy ofconsent or by process of law. ” Counsel’s argument has been that thissum of !Rs. 29-40 was a debt owing by t be landlord to the tenant and thatit was his duty even without a request of the tenant in that behalf, toapply that sum in satisfaction of unpaid rent for any two months. Ifthis be correct then the appropriation of the sum of Rs. 29'40 in thatmanner would mean that the tenant in the present case was not in arrearsat all.
In order to sustain his argument counsel had to contend that theprovision in the agreement for the deposit of Rs. 29‘40 was unlawfulas being in breach of the Prevention of Frauds Ordinance in that it pur-ported to have the effect of creating a tenancy for a period longer thanone month. In my opinion, however, the deposit neither had that-effectnor even purported to have that effect. The agreement itself did notprovide for a deposit but merely recited that a deposit had been made andprovided for the manner for the application of that deposit- if a certainevent occurred. The contemplated event- was a possible one, namely
the determination of the tenancy by consent or by process of law. ”If, for example, the landlord and the tenant had at any stage agreed thatthe tenancy should terminate on a specified future date, then the effectof the parol agreement would be that- instendof the tenant paying any sumas rent for the two months ending on the date of termination thefandlordwould apply the deposit in satisfaction of the rent. The deposit wouldbecome returnable to the tenant only if the contemplated event became atany stage impossible—for instance if either party had given one month’snotice of termination; in the latter case the landlord would be boundby the agreement to apply half the sum in satisfaction of the rent for thelast month and would immediately on the giving of the notice become adebtor in respect of the other half.
The making of the deposit and the provision in the agreement as tothe manner of its application was not, in my opinion, an agreement re-lating to land but merely' an agreement providing for the manner in whichthe deposit would be applied if and when a particular situation arose inconsequence of the operation of the parol agreement for a tenancy frommonth to month.
For these reasons I would dismiss the appeal with costs.
Appeal dismissed.