Sri Lanka Law Reports
11983] 2 Sri L. R.
PUNCHI MENIKA AND ANOTHER
MUDIYANSE AND OTHERS
SHARVANANDA. J.. VICTOR PERERA. J. AND COLIN-THOME, J.
S. C. No. 8/1982. C.A. NO. 1 77/73(F).
D. C. KURUNEGALA 3831 /L,
SEPTEMBER 30. 1982
Actio Rei Vindicatio — Effect of final decree of partition on prior transfer ofundivided share — Rectification of mutual mistake of parties.
Mistake — Mutual mistake — Power of court to correct mutual mistake
One Kiribanda. who was entitled to an undivided share of land which was thesubject matter of a partition action, gifted the entirety of his interest to thedefendants. Thereafter by final decree in the partition action, his undividedinterest was wiped out and he was vested with new title in respect of a dividedallotment. He sold this divided allotment of land to the Plaintiffs and after hisdeath the defendants entered into possession. The Plaintiffs pleaded that theDefendants’ deed of gift, even though executed earlier did not convey anyinterest as the undivided interest which it sought to transfer was wiped out bythe final decree of partition.
It is competent for a court administering equity to correct mutual mistakes ofparties, and the deed of gift on which the Defendants based their title could berectified so as to regard what was conveyed by the said deed as the defined lotwhich was allotted to Kiribanda in the partition action.
Cases referred to:
Perera v. Perera — (1952) 53 N.L.R. 536
Dona Elisahamy v. Don Julis —52N.L.R.332
Jayaratne v. Ranepura — 52 N.L.R. 499
Don Andiris v. Sadinahamy — 6 C.W.R. 64
Fernando v. Fernando — 23 N.L.R. 483.
Appeal from a judgment of the Court of Appeal.
Walter Jayawardena Q.C. with Nimal Senanayake. S.A. and Miss S. M. Senaratnefor the Plaintiffs – Appellants
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J. W. Subasinghe S.A with U.C.B. Ratnayake and D.J.C. Nilanduwa for theDefendants – Respondents.
January 13. 1983SHARVANANDA, J.
The Plaintiffs—Appellants instituted this action against theDefendants-Respondents for a declaration of title to the entiretyof a divided allotment of land depicted as Lot 3 in Final Plan No.6227 (P3) of 8.7.54 in Partition action No. 5180 of the DistrictCourt of Kurunegala.
The position taken up by the Plaintiffs-Appellants in the Plaintis briefly : that the six contiguous allotments of land referred to inthe schedule to the Plaint was the subject matter of Partition incase No. 5180, D. C. Kurunegala; that, by Final Decree dated26.11.54, Herath Mudiyanselage Kiribanda was allotted in lieu ofhis undivided interest in the said corpus, the divided Lot depictedas Lot 3 in Final Plan P3. that thereafter the said Kiribanda bydeed P1 of 19.11.1965 sold and transferred the said Lot 3 tothe Plaintiffs and the Plaintiff entered into possession thereof ;that a week after the death of the said Kiribanda, in May 1971the defendants entered into wrongful occupation of the said Lot
The Defendants-Respondents, on the other hand, maintain thatthe said Kiribanda was married to the sister of the 2ndDefendant, that both Kiribanda's wife and their only child died, inthe year 1964, that thereafter by deed D4 of 16.10.1964 thesaid Kiribanda gifted to the 1-4th Defendants the entirety of theinterest that he (Kiribanda) was entitled to in the six contiguousallotments of land, morefully described in the schedule to thePlaint (together with certain other interest which Kiribanda hasinherited from a deceased sister and which are not in dispute inthis case), subject to his life interest; that the entirety of theinterest which the said Kiribanda was entitled to from and out ofthe said contiguous allotments of land referred to in the Plaintand which the said Kiribanda intended to gift to the Defendants by
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the said deed D4 is represented by and depicted as Lot 3 in thesaid Plan P3; that the Defendants upon the death of the saidKiribanda entered into possession of Lot 3 and are in lawfulpossession of the said land, by virtue of the said deed of gift D4dated 16.10.64; that they alone are entitled to the entirety of thesaid Lot 3 in Plan P3.
The District Judge, after trial, held that in executing D3 "whatKiribanda intended to convey was his interest in the six landswhich has since been converted into a single entity viz ; Lot 3 inP3;" that by the execution of D4, the entirety of Lot 3 had beentransferred to the Defendants and that the Deed P1 did notoperate to convey any interest to the Plaintiffs. He thereforedismissed the Plaintiffs' action.
The Plaintiffs thereafter preferred an appeal from the saidjudgment of dismissal of their action. After considering all therelevant authorities on the question in issue. Ranasinghe. J., withwhom (B. E. de Silva. J.. agreed) in a well-analysed andexhaustive judgment upheld the findings of the District Judgethat the Defendants are entitled in Law to the entirety of Lot 3 inPlan P3 and dismissed the Plaintiffs' appeal. The Plaintiffs' havethereupon preferred this appeal to this Court.
The contention of counsel for the Plaintiffs-Appellants is thatthe Defendants' deed of gift D4. even though earlier in point oftime, does not operate to convey to them any interest whatsoeverin the said Lot 3, for the reason that D4 dealt with undividedinterest in the original corpus as it stood before the Final Decreein partition case No. 5180 in the District Court. Kurunegala. P2and that the said Decree P2 operated to wipe out the earlierundivided interest that Kiribanda was entitled to and to vest inKiribanda a new title in respect of the distinct Lot 3 in the saidFinal Plan P3.
Counsel for the Defendants-Respondents rested his case onthe ground that the intention of Kiribanda. when he executed thedeed of gift D4, was unmistakably to gift to the Defendants, thedonees, the entirety of his interest in the six contiguous
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allotments of land, which was the subject matter of the partitionaction No.5180 and which said interest had. as a result of thepartition decree P2. come to be represented by the divided Lot 3in Plan P3; that a mistake had been made in the deed of gift D4in describing what he intended to gift. He urged that, in thecircumstances this court could and should, in the exercise of itsequitable jurisdiction "rectify or treat as rectified" the said deedof gift D4 in order to make it accord with the true intention of theparties to the said deed of gift, which said intention had. due tomutual mistake not been correctly expressed in the said deed.Counsel submitted that our Courts, as courts administeringequity, would in such a case have the deed rectified so that thereal intention of the parties may be carried into effect. The sheet-anchor of counsel's submission was the majority judgment of theDivisional Court in the case of Perera v. Perera.1
As observed by Ranasinghe, J. it has been found to be notuncommon for persons who have acquired title to distinct anddivided lots from and out of large lands in substitution of theirundivided interests, in the large corpus, to convey, even after theacquisition of title to such divided Lots, their undivided shares inthe larger land to which they were originally entitled. Thisirregular practice has given rise to the problem of determiningwhat in law, do such deeds, convey — is it the entirety of thedistinct and divided lot, or, is it the transferee's undivided sharein that defined lot; or has the deed failed to convey anything?There was a conflict of views as to how such deeds should beconstrued.
In the case of Dona Elisahamy v. Don Julis Appuhamy.2Nagalingam. J., and Pulle J., took a legalistic view and held thatwhatever the intention of parties be. the parties are bound by theterms of their deed and could get no larger fraction of thedivided lot than that set out in the deed, in respect of the largercorpus of which the divided Lot forms a part.
As against this view Gratiaen, J., and Gunasekera, J.. inJayaratne v. Ranepura,3 followed the case of Don AndirisSadinahamy,4 and Fernando v. Fernando5 and held that it wasnot justifiable to take a too narrow view of the effect of the deedsand that a broad construction should be given to the
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deeds so as to give effect to the true intention of the parties.Gratiaen. J.. after a review of the earlier case law. concluded :"that the correct solution lay in the jurisdiction of a Court torectify, or treat as rectified, documents in which by a mutualmistake, the true intention of the parties is not expressed."
In view of this conflict the question came up for considerationby a Divisional Bench in 1952. The Divisional Court in GirigorisPerera v. Rosalin Perera,1 by a majority preferred the viewexpressed in Jayaratne v. Ranepura3 and held that where deedsdealing with shares in an allotment of land purported to conveyundivided share of a larger land of which the allotment had atone time formed part, a Court administering equity has thepower, in a partition action relating to the allotment, to rectify themutual mistakes of the parties in the description of the property,even though no plea of mistake and claim for rectification is setup in the suit.
The Divisional Bench judgment thus preferred the "broadconstruction" favoured by Sampayo. J.. in Don Andiris v.Sadinahamy,A so as to give effect to the true intention of parties,by rectifying the mistake of the parties that resulted in themisdescription of the property intended to be conveyed or dealtwith. It affirmed the decision of Bertram, C.J., in Fernando v.Fernando5.
Counsel for the Plaintiffs-Appellants contended that thedefendants are barred by the provisions of Section 92 of theEvidence Ordinance from leading evidence to vary the terms of adocument. This argument overlooks the proviso (1) of Section 92of the Evidence Ordinance which provides that any fact may beproved which would entitle any person to a decree or orderrelating thereto such as mistake in fact or law. However, counselcontended that the plea of mistake is not available to thedefendants. It cannot be disputed that where it is proved that,owing to a mistake the written contract does not substantiallyrepresent the real intention of the parties, the Court hasjurisdiction to rectify the written agreement. In this case there isno doubt as to what Kirtbanda. the donor intended to convey
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by the deed D4. For. in case No. 2364, D.C. Kurunegala, filed bythe donor, Kiribanda on 27.3.66, against the defendants prayingfor a declaration that the deed of gift D4, dated 16.10.64 is "voidand of no effect in law as the plaintiff was induced to execute thesame by fraud and the exercise of undue influence by thedefendants" and for the revocation of the said deed. He stated inevidence "I executed a deed of gift No. 2373 of 19th October1964. by which I purported to give all my properties in favour ofthe defendants." Though the deed of gift D4 purports to conveythe undivided interest of Kiribanda in the six lands, the interestthat Kiribanda did in fact have in the six lands in 1964 was theinterest which he had in Lot 3. which was a divided portion ofcorpus consisting of the six lands. Kiribanda had no interestother than what was allotted to him in the partition decree.Therefore it is clear what Kiribanda, the donor, intended toconvey and what the defendants, the donees, intended to acceptwas Lot 3, as the donor's property, which was substituted as aresult of the partition decree for the undivided interest whichKiribanda had in the larger corpus, which was the subject of thepartition action.
On Mr. Jayawardena's argument, that one has to look only tothe terms of the deed to ascertain what it conveys.it wouldappear that the deed of gift D4 was a futile exercise; for, after thepartition decree in 1956 the undivided interest that Kiribandahad in the contiguous six lands and which was sought to beconveyed by deed of gift D4 has ceased to exist. However it isclear that Kiribanda intended to donate and the defendantsintended to accept all the undivided interest of Kiribanda in theoriginal corpus and since the partition decree had substitutedLot 3 for this undivided interest in the larger land. Lot 3 takes theplace of Kiribanda's share in the larger land. The parties wereagreed as to the subject matter of the donation, but they hadmade a mistake 'in not correctly describing the subject of thedonation. Equity affords relief in cases of such mutual mistake.Proviso 1 of Section 92 sanctions the admission of evidence tocorrect such error. By this process the Court is not in factrectifying the contract; what it seeks to do is to rectify theinstrument purporting to have been made in pursuance of the
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terms of contract, in order to give correct expression to their realintention.
It has long been an established rule of equity that where acontract has. by reason of a mistake common to the contractingparties, been drawn up so as to militate against the intention ofboth, the Court will rectify the contract so as to carry out suchintention, otherwise the party who receives the benefit of themistake will be enabled to resist the claims of justice to commit afraud. Such mischief will be done if relief is refused in such casesof mutual mistake.
With all respect to the dissenting judgment of Nagalingam J..in the case of Perera v. Perera.1 I prefer the view expressed byGunasekera. J. and Choksy. A.J.. in that case. I hold that it iscompetent for a Court administering equity to rectify mutualmistakes of parties in describing the property that is the subjectof conveyance. I find that the majority decision has restricted theexercise of the equitable jurisdiction of .the Court to treat mutualmistakes in conveyances as rectified to cases arising in partitionactions. I do not agree that the equitable jurisdiction of a Courtto rectify should be confined to partition actions. I agree withNagalingam J., that the construction of a deed does not dependon the nature of the action in which the question arises whetherit is a partition action or whether it is a rei vendicatio action —53N.L.R. 536 at 542. The principles of construction in both casesare the same. The jurisdiction of a Court to rectify or to treat asrectified, documents in which, by a mutual mistake, the trueintention of the parties is not expressed can be invoked in thecourse of any action, when such a question arises irrespective ofwhether the action is a partition action or a rei vendicatio action,provided that all the parties who would be affected by theexercise of that jurisdiction are before Court. The present is a reivendicatio action and it is competent for the
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Court to treat the deed of gift D4 on which the defendants basedtheir title, as rectified so as to regard what was conveyed by thesaid deed was the defined Lot 3 which was allotted to Kiribandain the partition action on account of his undivided interests in thelarger corpus and not what it purports to convey viz: undividedinterests of the donor in the larger land. I
I affirm the judgment of the Court of Appeal and dismiss theappeal with costs.
Victor Perera, J., — I agreeColin-Thome, J. — I agreeAppeal dismissed.