SUPREME COURTDHEERARATNE, J.WADUGODAP1TIYA, J. ANDGUNASEKERA, J.
SC APPEAL 55/96CA 926/82 (F)
DC KANDY 1416/RE6,h OCTOBER. 1999
Landlord and tenant – Subletting of premises ■ Right of purchaser ofpremises to sue tenant – Defendant's plea of using premisesforabusiness.
The plaintiff-respondent (the respondent) who purchased the premisesin dispute in 1979 from the Ceylon Insurance Corporation filed action on17.07.1980 for ejectment of the 1sl defendant – appellant (the appellant)and the 2"d defendant (one Ranasinghe) from the premises. The firstground of ejectment was arrears of rent and the second was that theappellant had sublet the premises to the 2nd defendant without thewritten permission of the landlord. The original landlord was the CeylonInsurance Corporation. The evidence led at the trial showed that therewas an ongoing business of a hotel being run on the premises at thetime it was handed over to the 2n<1 defendant. The respondent admittedthat at the time he purchased the premises the 2nd defendant wasrunning a business there. There was also a notarially executeddocument IV10 by which the appelant gave the management of runningan "eating house" in the premises to the 2”rt defendant. At the trial it wasproved that the appellant was not in arrears of rent. As regards the 2ndground of ejectment, the District Judge held that no subletting had beenproved.
Per Dheeraratne, J.
(1) "The proposition that where a tenant of any premises sublets themin contravention of the Rent Act and the premises are thereafter sold bythe landlord to a 3rd party, the purchaser is entitled to maintain an actionfor the ejectment of the tenant and the subtenant, is amply covered byauthority and there is no dispute about that"
Sri Lanka Law Reports
120001 I Sri LR.
(2) There is no evidence to show that the document IV10 is a sham andnot the document that it purported to be.
Cases referred to :
Rathnasingham v. Calheraswamy (1956) 58 NLR 476
Tliaha u. Sadeen (1968) 72 NLR 142
Sumanasena v. Herfi (1991) 2 Sri LR 342
APPEAL from the judgement of the Court of Appeal
P. A. D. Samarasekera P. C. with G. L. Ceeihananda and Keerlhi SriGunawardena for substituted Is’ defendant – appellant.
A. K. Premadasa P. C. with C. E. de Silva for plaintiff – respondent.
Cur. adu. unit.
October 26, 1999DHEERARATNE, J.
The plaintiff – respondent (respondent) as landlord, filedaction against the original 1st defendant – appellant (appellant)and the 2nd defendant one Ranasinghe, to have them ejectedfrom premises bearing assessment no. 23/16 Dalada Veediya,Kandy. The Is' ground of ejectment was arrears of rent and the2ntl was that the appellant had sublet the premises to the 2nddefendant without the written permission of the landlord. Theoriginal landlord of the appellant in respect of the demisedpremises was the Ceylon Insurance Corporation. Therespondent purchased the premises in 1979 and filed thepresent action against the defendants on 17.07.1980. Therespondent thus based his 2nd cause of action on the allegedsubletting of the premises by the appellant during the time hewas a tenant of the former landlord. The proposition thatwhere a tenant of any premises sublets them in contraventionof the Rent Act and the premises are thereafter sold by thelandlord to a 3rd party, the purchaser is entitled to maintain
Premaratne u. Kodituwakku Arachchl (Dheeraratne. J.)
an action in ejectment of the tenant and the subtenant, isamply covered by authority and there is no dispute aboutthat. SeeRathnasinghamVs. Catheraswamy,u and ThahaVs.Sadeen121
At the trial it was proved that the appellant had duly paidall rent in respect of the premises to the local authority andthat he was not in arrears of rent. The learned trial judge heldthat no subletting had been proved. However, the Court ofAppeal reversed that finding reached by the learned trial judge.The only reasoning given by the Court of Appeal in its some-what brief judgment to reverse the finding, was as follows -"There is evidence to show that the lsl defendant-respondentsublet the premises to the 2nd defendant-respondent, forotherwise there is no reason for the 2nd defendant-respondentto pay the 1st defendant-respondent. If as said by the defend-ants (the) 2nd respondent was the manager of the 1SI respond-ent – defendant’s business he should have monthly paid the 2nddefendant – respondent".
At the trial evidence was led to the effect that in Janaury1974 by a notarially executed document IV10 the appellantgave the management of running an "eating house" carried onin the premises in question to the 2nd defendant on a commis-sion basis at the rate of Rs. 15/= a day. The learned trial judgeconsidered the evidence led that there was an ongoingbusiness of a hotel being run in the premises at the time it washandedover to the 2nd defendant. The respondent admittedthat at the time he purchased the premises in 1979 the 2nddefendant was running a hotel there. The learned trial judgeconsidered the evidence given by the appellant that at somepoint of time a carpentary shop was carried on at the premises.However, on the evidence led he was satisfied that what washanded over by the appellant to the 2nd defendant was anongoing business of a hotel. The evidence given by theappellant that as he fell ill about 1974, he was compelled to goto his sister who lived at Kantale, leaving the management ofthe business in the hands of the 2nd defendant, was accepted
Sri Lanka Law Reports
(20001 1 Sri LR.
by the learned trial judge. It is clear, although not said soexpressly by the trial judge, on the evidence led, he consideredthe occupation of the premises by the 2nd defendant wassubordinate to the rights conveyed by document IV10. (seeSumanasenav. Herft131
Learned counsel for the respondent relied strongly on theBusiness Names Registration Certificate for the year 1979 inrespect of the business run in the premises. This documentin my view is also consistent with the position of the manage-ment of the business having being handed over to the 2nddefendant. There is no evidence led or elicited in crossexamination to show circumstances pointing to the fact thatthe document IV10 is a sham and not the document that itpurported to be.
For the above reasons 1 set aside the judgement of theCourt of Appeal and affirm the judgement of the District Court.The appellant is entitled to a sum of Rs. 10.000/= as costs ofthis appeal.
WADUGODAPITIYA, J. I agree.GUNASEKERA, J. – I agree.
PREMARATNE v. KODITUWAKKU ARACHCHI