034-NLR-NLR-V-59-P.-CORNELIS-Appellant-and-THE-URBAN-COUNCIL-DEHIWELAMT.-LAVINIA-Respondent.pdf
H. 2XT. G. F.ER>7A}fDO, J.—Cornelia v. The U. C., Dehiwela-Mt. Lpvinia 1151957Present:H. N. G. Fernando, f.
P.CORiNELIS, Appellant, and THE URBAJST COUNCIE, DEHIWELA-MT. LAVINIA, Respondent.
■ S. C. 149—C. B. Colombo, 57,219
Landlord and tenant—Test as to whether a person is a licensee or a tenant—RentRestriction A.ct.
Upon a non-notarial permit issued by the plaintiff, the defendant occupied abaro land and erected buildings thereon though ho was expressly prohibitedfrom erecting buildings. Thereafter the plaintitf issued similar permits to thedefendant to occupy tho land and the buildings at a j-carly renfal, payable in• monthly instalments, upon tho ngreejnent that tho buildings should become thoproperty of tho plaintiff without payment of any compensation. Tho amountof the assessment rates levied upon the buildings was also paid by the defendant.
Held, that tho defendant was not a mere licensee, but becamo a month tomonth tenant of tho plaintiff and was entitled to the protection of the RentRestriction Act.
A
-tPPEAL from a judgment of the Court of Requests, Colombo.
SirLalita Baja-pakse, Q. C., with O. 31. da Silva and D. C. TF. Wickrema-sekera, for the defendant-appellant.
T. Sameraioickreme, for the plaintiff-respondent.
•. Cur. adv. viiU.
May 29, 19o7. H. 1ST. G. Fkrxaxdo, J.—
' The only question which arises in tin's appeal is whether the defendantis a “ tenant ” within the meaning of the Rent Restriction Act ; if so theplaintiff’s action for ejectment must necessarily fail.
In 1937 the plaintiff (the Urban Council, Uehiwela) according to itswitness" wanted to let out on rent ” a piece of bare land and the defend-ant entered into occupation of the land on the document P. 15 describedon its face as a “ permit for occupation of small lots ”. ; The permit w asdated April 2nd 1937 and provided for rent of Re. 1 per month reservingto the Council the right to terminate the permit by one Calendar month’snotice. The permit prohibited the defendant from erecting any perma-neut buildings on the land and also denied to the defendant any right to.compensation for improvements.'
It is common ground that the defendant did in fact erect buildings onthe land sometime after the issue of the original permit. Subsequentlyanother permit P2 was issued to the defendant in 1939 for a period ofthree years at a rental of Ils. 30 per year payable in monthly instalmentsof Rs. 2.50. This permit provided that at the end of the three years thebuilding erected by the defendant should automatically pass to the owater-ship of the Council without the payment of compensation. ’ At the end
116 H. N. G". FERNANDO, 3.—Cornelia v." The. U. O-i Dehiwela-Ait.'Cavinid
of each three-year period similar permits were again issued to the defend^. ant, the. only .variation being increases in,the rate of the rental. .. The' permits issued after 1939 did notreserveto the Council a general right ofrevocation within the three-year period, hut did. provide for the'right to'revoke in the event of rent being in arrears.j j.Toall appearances.thereforethe permits purported to give the defendant a.rightjto'occupyTthe landand the buildings erected thereon for each of the three-year periods subject,to his obligation to pay the monthly instalments of rent. -A furtherfeature which to my mind indicates the intention of the parties is revealed ■in the fact referred to by the learned Commissioner in his Judgment thatthe defendant paid to the Council from time to time the amount of the.assessment rates levied upon the buildings erected by the defendant. ‘ .
I should refer now to one further reservation, namely that the defend-ant did not have the right to the produce of the trees on the land butthat this right was separately sold by the Council from time to time by.auction and was usually purchased by the defendant as the highest bidder.■'
The permits not having been notarially executed were clearly notadmissible to establish the tenancy, but it would seem upon the authority.of Wambeck v. Le Mesurier 1 that the defendant can claim that he didbecome the tenant from month to month. If the documents have to beignored, then the facts establish that the defendant was in occupationpaying rent from month to month and that the Council accepted the pay-ments of rent. . These facts are in my opinion quite sufficient to negativethe correctness of the Commissioner’s finding that the defendant was alessee at will. Even, however, if that finding were correct, then thedefendant was a tenant and therefore protected by the Rent RestrictionAct. The only possible answer therefore to the defendant’s claim couldbe that he was only a licensee and not a tenant.
If the documents are to be ignored, it follows that the Council had,despite the terms of the permits, the light to recover possession of thepremises from the defendant upon giving him one month’s notice, butthe existence of that right does not by itself mean that the defendant was amere licensee since the right is one which exists in the case of all monthlytenancies. It seems to me therefore that a different test has to be appliedin order to determine whether or not the defendant was a licensee and thatthe proper test is to pose the question whether the grantee of a right is oris not bound to carry out his part of an agreement irrespective of whetherhe actually exercises the right. If he is so bound, then, in my view,he is not a licensee. The clearest example of a licence would be a casewhere an owner of land permits another to occupy the land or to take pro-duce therefrom without any payment whatsoever. A case where aperson is permitted to exercise some right on another’s land if he wishesto do so may also be an example of licence despite the fact that theperson is bound to make payment if and when he does exercise the right.But if the grantee of a right has no mere option to exercise the right- butbinds himself to make a payment in consideration of an agreement by'.the other party" to confer the right on him, then it would seem that the
-1 (1S9S) 3N. L.II. 105."
S1NNETAMBY, J.—Kailayar v. Kandiah
117
grantee is not merely a licensee but a person who is obliged to performhis part of the agreement so long as neither party does not renounce theagreement. .
Applying this test to the present case the defendant, so long as the agree-ment between him and the Council was not terminated by notice oneither side, was bound to pay rent in monthly instalments to the Councilwhether or not he actually enjoyed the occupation of the premises and hewas therefore not a licensee. That being so, it does not matter whetherhe was a lessee at will or can rightly claim to be regarded as a tenant frommonth to month.■
For these reasons I would hold that the defendant was from 1939 on-wards the tenant both of land belonging to the Council and of buildingsbelonging to the Council and that therefore the right of the Council toinstitute proceedings for ejectment was qualified by the Rent RestrictionAct.
The appeal must therefore be allowed and the plaintiff’s action dismissedwith costs in both Courts.
Appeal allowed.