109-NLR-NLR-V-59-T.-M.-T.-B.-AMUNUGAMA-Appellant-and-H.-M.-T.-B.-HERATH-Respondent.pdf
A ntunttgama 0. Ilerath
505
£Ix The Privv Council]
1958 Present: Lord Oaksey, Lord. Morton of Henry ton, Lord Denning,Lord Birkeft and Mr. L. M. D. de Silva
T. M. T. 15. AMUSUGA3LA, Appellant, an-1 H. Af. T. B.'
H EJKATH, Respondent t
Bnivy Coi.xou. Ai*i*e.l Xc>. 2 or 19_o7
S. C. /—JJ. C. K urunegatti, GO of)
Fiduciary relationa—Gaining of “ pecuniary adcanlagc " by fiduciary—'Frusta
Ordinance (Cap. 72), s. 00—Kandyan Tjfiw—Adoption.
In (esfamcntaiy action Xo. 37J4 instituted in 1029 by Bamlara, n Kandyanwidow-, ns tlio administratrix of licr deceased liusband’s estate, Somawathie,who was ono of tlic part ics-respondcnt, was the adopted daughter of tl.odeceased. Tnasimicli, liowsvcr, as tiio law- relating to tlio quantum of evidencenecessary to prove adoption was highly controversial at that time, tlio guardinn-ad-litcm who i-eprcscntcd the adopted (laughter, who was a minor, agreed, withthe approval of the Court and on independent advice, to certain terms of settle-ment according to which tlio widow anil tlio three respondents in tlio uctionwere each allotted a quarter share of the estate. There was no reason to doubttho bona tides of the settlement. JIad there been no settlement, Somawathiowould havo been entitled, if she had duly proved a valid adoption, to inheritall tho property of tho deceased and not merely got a part ; at tho samo timeI3ondara would have got a life interest in tho whole estate.
In a subsequent case Xo. 4402 it was held by tho District Judge in August,1942, and affirmed ou appeal, that Somawathie had been validly adopted.
In tho present action, the solo heir of Somawathio claimed whatever Bandamwas allotted, or purchased from tho other allottees, under tho settlement incase Xro. 3714 and subsequently donated to tho defendant. It was contendedon his behalf that Bandara. who had adopted Somawathie was ill a fiduciaryposition towards her and that by reason of tho operation of section 90 of theTrusts Ordinance she held the property in trust for Somawathie.
Held, that inasmuch as it was not established that the administratrix,Bnndara, gained “ any pecuniary advantage ”, or anything else, section 90of the Trusts Ordinance was inapplicable. There was nothing to show thatBandara’s conduct in tlio settlement proceedings in case Ko. 3714 was in anywav improper.•
A ,.
TAPPEAL from a judgment of the Supreme Court reported in■50 N. L. R. .529.••
Phineas Q it ass, Q.C., with Sirimevan Ante rets ingha, for the plaintiffappellant. ;.– >
Stephen Chapman, Q.C., with John Stephenson, for the defondantrespondent.*…
-…. Cur, adv. vult.
3—J. X. B 5541—1,503 (S/5S)
006
MR. L. M. ID. IDE SI ID V A—Amunuyamct v. Hcrath ■
March 5, 195S. [Delivered by Mu. L. M. D. du Silva]—•
The appellant, who was the. plaintiff in the case, sued the respondent,in tho District Court of Ku ruse-gala to have it declared that the respon-dent held certain land in trust for him, For an order directing therespondent to execute a conveyance of the said land to him, and fordamages. After trial the District Judge entered judgment for theappellant. On appeal to the Supreme Court the judgment of the DistrictJudge was set aside and the action dismissed. This is an appeal fromthe judgment of the Supreme Court.
The land in question belonged to one Del ward haiula, a Kandyan(hereafter called Edward), who was married to one Bandara Monika(hereafter called Bandara). Edward died intestate in March, 1!>29.
On the 'Jth July, 1929, Bandara filed a petition su|>portcd by anaffidavit in testamentary case 3714 of the District Court of Kuruncgalain which she, as widow, prayed that letters of administration be issuedto her. In the petition she named as first respondent one iSomawathiowho, she said, was the adopted child of the deceased, but as to whoseadoption she was “ unaware whether it is in accordance with the require-ments of the Kandyan Daw for the purpose of inheritance ”. .She alsonamed as 3rd and 4th respondents two nieces (children of a sister) <>!'Edward “ as they claimed an interest in the estate ”.
Earlier, on the 11th June, 1921), Bandara had filed an affidavit, fur thepurpose of having a guardian appointed over Somawathie, who at thattime was a minor of the age of 17 years, in which she had stated thatEdward had died leaving as heirs herself as widow and one Somawathie“ who is the adopted child of the said deceased ”. .She had made noreference to the children of Edward’s sister and she had not expressedany doubt about the validity under Kandyan Law of the adoption. Onthat occasion one Appuhainy, the natural father of Somawathie- wasappointed guardian. iJe was the 2nd respondent to the petition.
On the 1st October, 1929, the 3rd and 4th respondents to the petition,the nieces of Edward, filed a statement in which they admitted the claimof Bandara to letters of administration but denied that Somawathie, thefirst respondent, was entitled to any share of the estate.
The denial was in effect a denial of the validity of the adoption ufSomawathie. It is common ground that had the dispute proceeded to ajudicial investigation Bandara would have got a life-interest in the wholeestate, and, as to what remained, the successful side would have com-pletely excluded the losing side from a share of the property.
On the 9th September, 1930, certain proceedings took place in CaseNo. 3714 which are recorded thus :—
“ 9th September, 1930.
“ Wijesundara Mudiyanselage Appuhamy, affirmed. I au^ thefather of the minor, Somawathie Kumarihamy, 1st respondent. Shewas adopted by the deceased for purposes of inheritance. She was
507
MR. L. >L L>. DE SILVA—Amunugama v. He rath
IS months old when site was adopted by t-lio deceased. Uierc "as nodeed or writing. Kver since that time the 1st respondent was livingwith the deceased. I know that if I succeed in proving that thechild was adopted she will be entitled to the whole of the immovablesubject to the life interest of the widow and to half of the movables.I cannot say if I can prove the adoption.
*•' J can prove that the child was adopted. But I am not sure ofproving the adoption. I think it will be to the advantage of theminor if f settle the matter.
(Sgd.) C. CO O 3 rA R A SWA M Y,
D.J.”
“Bandara Monika, affirmed. I am the widow of the deceased.The 1st respondent was brought up by my husband and by myself.My husband wanted to give the child also some property. ire neverwanted to give (he entire property to the 1st respondent.
(S’gd.) C. Coomarasu'amy,D.,T.”
" The father of the minor consents to the settlement as he thinksit is to the advantage of the minor. He is not sure of proving theadoption by the deceased.
“ Under the circumstances I think the proposed settlement may beallowed..
“ T,ct tire papers of settlement be filed in the case.
(Sgd.) C. Coomakaswamv,D.J.:’
On the 9th October, 1930, a consent motion embodying the settlementwas filed under which the parties, namely Bandara, Somawathie and thetwo nieces, were each to get an “undivided one fourth of the estate.This motion is signed by Somawathic’s guardian Appuhamy, by theproctors who represented them, by the other parties and their proctorsand finally by the District Judge. Under section 500 of the CivilProcedure Code a settlement in which a minor is involved must be enteredinto with leave of Court and there was a compliance with the section. ■
Bandara Mcnika died intestate in July, 19X0. Somawathie, now 28years of age, applied for letters of administration to her estate in CaseXo. 4402 of the District Court of Kurunegala on the basis that she wasBandara’s adopted daughter. A son of a sister and a son of a brotherof Bandara contested Somawathie’s claim on the ground that there had
50S
MR. L. AI. D. L)E SILVA—Amunugama v. He rath
been no valid adoption. It was held by (lie District Judge on the 24lh• August-, 19-13, and affirmed on appeal, that- Somawathie had been validlvadopted.
Earlier, in 1933, Somawathie, at t-lie age of 20, had married ilieappellant. In 1914 after the decision mentioned in the precedingparagraph and after certain proceedings, which it is not necessary to gointo, a consent motion was tiled in Case No. 3711 to which all originalparties except Bandara (whose estate was being administered), wereparties, stating that Somawathie was the.adopted daughter of Edwardand moving that the settlement of the 9th October, 1930. be set aside andSomawathie be declared entitled to the whole of Edward's estate. Adecree was obtained on this motion on the 21st August, 1911.
Bandara had in her lifetime donated to her nephew, the presentrespondent, a third share of the property (the quarter she had receivedunder the settlement and a twelfth purchased from another of the partiesthereto). The respondent was not a party to the consent motion anddecree of the 21st August, 1941, in Case 3714, and it was conceded at thehearing of this case before the Supreme Court- flint he was not hound bvits terms.-
Somawathie died in September, 19-15, and il is common ground that the.appellant was her sole heir. .
In this action the case for the appellant is that the settlement of 1930in Case No. 3714 was obtained by fraud and collusion between Bandara,Appuhamy, Somnwathio’s natural father, and the two nieces of Edward,parties to that ease, acting together to defraud Somawathie. Theappellant, who is entitled to whatever property she diet! possessedof, sajrs that Somawathie was entitled to the whole of the property inquestion, that reason of the fraud she was allotted only a quarterin the settlement, and that, whatever Bandara was allotted or purchasedfrom other allottees she held by reason of the fraud a.s trustee, under aconstructive trust-, for Somawathie; that the respondent as a doneefrom Bandara is in no better position than Bandara, and that since thedeath of Somawathie the respondent held the property in trust for him,the appellant.
The appellant further says that even if fraud is not established, never-theless, by reason of the operation of Section 90 of the Trusts Ordinance(Chapter 72 Ceylon Legislative Enactments Vol. 2 p. 220), the respondentmust be held to be a trustee of the property for him, the appellant.
The respondent denied the allegations of the appellant appearing in thetwo preceding paragraphs and raised a further defence mentioned later.
The learned District Judge held in favour of the appellant and enteredjudgment in his favour. On appeal the Supreme Couit held that nofraud and no trust had been established, reversed the judgment of theDistrict Court and dismissed the action. Their Lordships arc of theopinion that, upon the questions of fraud and trust the judgment of theSupreme Court is clear and unassailable. They agree that the actionshould be dismissed.
509
3UI. L, 31. D. DE SILVA—Amunugama v. Beralh
On the question of fraud their Lordships agree entirely with the viewof the Supremo Court stated thus :—
“ When tliis action commenced, twenty years had elapsed since thesettlement of 1930 was reached in the testamentary proceedings.During this long interval of time, Bandara Menika had died andcould not give her version of the motives that induced her to agreeto its terms; IMr. Wanduragala (who acted as her proctor in thelitigation) and ]Ir. V. I. V. Gomis (who acted for the rival claimants)are also admittedly dead ; so are Somawathie and her guardianad litem who consented to the settlement on independent legal advice.In the absence, therefore, of most of the principal parties to the. com|>romise, it is incumbent upon us to scrutinise the verj' belatedallegations of fraud with considerable caution.”
It was argued before their Lordships that the unqualified statement ofBandara in the affidavit of the 11th June, 1929, to the effect that Soma-wathie was the “ adopted child of the deceased ” (Edward) when com-pared with the qualified statement made a month later on the 9th July,1929, that she was the adopted child but that as to her adoption Bandaradid not know whether it was “in accordance with Kandyan law ” .afforded evidence of dishonesty. The Supreme Court did not think anydishonesty was established by the statements mentioned or by any othermaterial in the case. Their Lordships arc of the same view. Whatthe evidence appears to establish is that Edward and Bandara hadregarded Somawathie as their adopted child but there was a challengeby the nieces, and when Bandara and her lawyers considered the matter,a doubt appears to have arisen and, as stated by the Supreme Court,
“ in her honest opinion, which was shared by honest lawyers, a settlementof the dispute was in the best interests of the minor ”.
The Supreme Court, giving reasons in some detail, state that the law'on the subject of adoption was highly controversial in 1930. TheirLordships agree with that statement. The Supreme Court quotes withapproval the following from a text book published in 1923 ;—
“ . . . the numerous cases in which the Courts have refused torecognise adoption, although the intention to adopt seems to havobeen established, have apparently settled the Jaw that there mustbo a public declaration, but what constitutes such a declaration hasnot been defined.”
It then refers to the ease of Tikirikumarihamy v. Niyarapola,1in which what constituted a public declaration was discussed- indetail in 1937 and goes on to point out:—
"… the conflict of authority as to the requirements of ‘ a publicdeclaration ’ was again emphasised six years later, when a Benchof three Judges was constituted to decide the question authoritativelyin Ukkubanda v. Somawathie
2*
1 (1937) 44 N. L. It. 476.J. > B 5511 (S/5S)
{1943) 44 £7. L. It. 457.
PI 0
JIR. L. 3VL D. X)E SILVA—Amunugama v. Herath
■ This last case is Case No. 4402 mentioned earlier in this judgment inwhich Somawathie successfully asserted that her adoption was valid ina contest between herself and the nephews of Bandara in administrationproceedings relating to Bandara’s estate. In that case a bench of tlireojudges confirmed the view expressed in 1937 in the case of Tikiriku-marihamy v. Kiyarapola, Ly two judges. Till those cases were decidedthere was great uncertainty and the Supreme Court was entirely rightwhen it said :—
“The uncertainty was not removed at the time of the settlementand could not but have been prominently before the minds of theexperienced lawyers who represented the parties at the relevant time.”
Two items of evidence in the latter case No. 4402 were brought to thenotice of their Lordships and it was said that this material should havebeen placed before the judge in Case No. 3714 before he sanctionedthe settlement of 1930. The first was the evidence of a Buddhist HighPriest that Edward had told him that he had adopted Somawathie. Itis not at all clear that Bandara knew this fact. The second is a state-ment by Bandara on affirmation on the 5th June, 1929, to the effect“ once he (Edward) took me to the Ratemahathmaya’s Walawwa andtold the Ratemahathmaya that this girl was his adopted daughter ”. Itwas argued that the statements made to persons of the standing of theHigh Priest and the Ratemahathmaya by a person in the position ofEdward constituted “public declarations” and that the judge in CaseNo. 3714 should have had this material placed before him before hesanctioned the settlement. It is sufficient to say that for the reasonsalready mentioned, in 1930 no one could have said on this material thatthe question of Somawatlne’s adoption admitted of no doubt. The factthat this material does not appear to have been placed before the judgedoes not in their Eordships’ opinion give rise to any indication of fraud.
It was said by the respondent during the argument and accepted bythe appellant that for a valid adoption the person adopting must do sowith the intention that the child adopted should inherit all his propertyand not merely get a part. In 1930 Bandara stated in the settlementproceedings “ My husband wanted to give the child also some property.He never wanted to give the entire property ” to Somawathie. Thereis no reason for thinking that Bandara was giving false evidence onthis occasion, she made a similar statement to a revenue officer in1929. Her belief regarding the property would have furnished a furtherreason for doubting the validity of the adoption.
The case put forward by counsel for the appellant in order to establishfraud and thus to establish a trust was that Bandara, Appuhamy andEdward’s nieces well knowing that Somawathie’s adoption was free fromall legal infirmity on the facts and on the law, deliberately set out toperpetrate a fraud on Somawathie and succeeded in so doing. The onlyreason suggested why Bandara should behave in this way is that Bandarastood to gain by the settlement. Their Lordships agree with the SupremeCourt that gain is far from established and, further, it is difficult to
MR. L. M. D. DE SILVA—Am unugamn v. ncratn
on
imagine that Baiulara would, for gain, behave so bad ly towards heradopted daughter. As regards Appuharny, the natural father, acting onindependent advice no reason has been suggested as to why he shouldhave behaved as he is alleged to have done. I heir Lordships can seono reason to doubt the bona tides of the set tlcmcnt of 1930.
It was also argued for the appellant that even if fraud had not beenestablished, nevertheless, Bandara, who had adopted Somawathie, wasin a fiduciary position towards her and that by reason of the operationof section 90 of the Trusts Ordinance she held the property in trust forSomawathie. Section 90 says :—
,“ Where a trustee, executor, partner, agent, director of a com-
pany, legal ad'iscr, or other person bound in a fiduciary characterto protect the interests of another person, by availing himself ofhis character, gains for himself any pecuniary advantage, or whereany person so bound enters into any dealings under circumstancesin which his own interests are, of may be, adverse to those of sncliother person and thereby gains for himself a pecuniary advantage,he must hold for the benefit of such other person the advantage sogained.”
As stated earlier it has not been established that Bandara gained “ anypecuniary- advantage ”, or anything else. This alone makes section 90inapplicable. There is nothing to show that Bandara’s conduct in thesettlement proceedings was in any way improper and there is nothing onwhich it can be said that section 90 came into operation.
It was argued that the decree obtained on a consent motion on the22nd August, 1941, in Case Xo. 3714 setting aside the settlement of1930 aflcctcd the transfer made by Bandara to the respondent at a timewhen the decree had not been entered. This argument is unsustainable.It is sufficient to say that, as stated earlier, it was conceded, at thehearing before the Supreme Court, that the respondent was not boundby the decree. This concession was correctly made as the propertyhad vested in the respondent before the date of the decree. lie wasnot a party to it or to the proceedings which led up to it.
The conclusions which their Lordships have arrived at in the precedingparagraphs make it unnecessary for them to discuss the further pleaset up br the respondent to the effect that even if a trust had beenestablished it had ceased to exist by reason of certain proceedings inPartition Case 1052 of the District Court of Kuruncgala.
For the reasons which they have given their Lordships will humblyadvise Her Majesty that the appeal be dismissed. The appellant mustpay the costs of the appeal.•
4ppeal dismissed.