063-NLR-NLR-V-69-W.L.P.-DASSANAYAKE-Appellant-and-J.-B.-KUMARA-KULASINGHE-Respondent.pdf
Dassanayake v. Kumarakuiasinghe
283
Present: Sirimane, J., and Alles, J.W. L. P. DASSANAYAKE, AppeUant, and J. B. KUMARA-KULASINGHE, RespondentS. C. 533/63—D. C. Colombo, 50,356/M
Set-off—Conditions which must be satisfied before a claim for set-off can be allowed—Meaning of term “ debt ”—Landlord and tenant—Action for recovery of arrearsof rent.
Before a claim for set-off can be entertained, there must be an ascertainedsum clearly due from the plaintiff to the defendant at the time of the institutionof the action.
Accordingly, in an action for recovery of arrears of rent due in respect ofpremises A, the tenant is not entitled to set off a sum overpaid by him as rent tothe plaintiff in respect of certain other premises B, if such overpayment can beascertained only by virtue of the terms of a Supreme Court decree obtainedsubsequently by the tenant upon an appeal preferred by him earlier from ajudgment according to which there was no overpayment of rent in respect ofpremises B at the time when the action for rent due on premises A wasinstituted.
284
ALLES, J.—Daaaanayake v. Kumarakulasinghr,
A.PPEAL from a judgment of the District Court, Colombo.
N.E. Weerasooria, Q.C., with M. M. K. Subramaniam, for the plaintiff-appellant.
Ranganathan, Q.C., with J. V. G. Nathaniel, for the defendant-respondent.
Cur. adv. vvlt.
January 16, 1966. Alles, J.—
The facts of this case are not in dispute and may be briefly stated :
The plaintiff, who was the owner of premises No. 22, Nimal RoadBambalapitiya, instituted this action against his tenant, the defendant,for arrears of rent, ejectment from the premises in question and fordamages at Rs. 62/78 per mensem from 1.7.60 until he is quieted inpossession. The notice to quit was given on 31.5.60 requesting thedefendant to quit the premises on or before 30.6.60. According to theplaint no rent was paid from 1.10.59 till 30.6.60 and the arrears of rentclaimed by the plaintiff in his plaint amounted to Rs. 565/02.
The defendant filed amended answer over two years later and, wliileadmitting the tenancy, claimed that he was not in arrears of rent.According to the defendant he was also the tenant of the plaintiff inrespect of premises No. 204, Galle Road, Bambalapitiya. In respect ofthese premises plaintiff had sued the defendant for ejectment in C. R.Colombo Case No. 67881. The learned Commissioner in that case gave-judgment for the plaintiff on 4.11.59 for a sum of Rs. Ill, ejectment anddamages at the rate of Rs. 58/50 as from 1.11.57. From this judgmentand decree the defendant appealed and on 9.12.60 in appeal the judgmentand decree of the Court of Requests was varied and the damages werereduced from 58/50 to 29/25 per mensem from 1.11.57 and to Rs. 10 from
6.58 to 21.5.59. The answer in the present case was filed only afterthese variations made in favour of the defendant were made known. Itwas submitted by the defendant that in view of this variation, there wasan overpayment of Rs. 592/75 by liim, which sum was in the hands of theplaintiff and it was successfully argued on behalf of the defendant in theCourt below, that when this sum and the additional sum of Rs. 168/89claimed as repairs is set off against the damages claimed in the presentcase, the defendant is not in arrears of rent. The learned District Judgeheld that the defendant was entitled to set off the sum decreed as over paidin respect of premises No. 204, Galle Road, against the arrears of rent duefor premises No. 22, Nimal Road.
The plaintiff has appealed from this finding and the only question thatnow arises in appeal is whether the learned Judge was right in arriving atthis conclusion in dismissing the plaintiff’s action.
ALLES, j.—Daaaanayake t>. Kumaralcularinghc
289
In deciding this case in favour of the defendant, the learned Judge hasfollowed the dictum of Soertsz, S.P.J. in Wijemanne & Co., Ltd. v.Fernando1 that where a tenant is in arrears with his rent for one month,any sum in the hands of the landlord overpaid as rent extinguishes protanto the rent due. That waB a case in respect of a contract of tenancyfor premises No. 26, Bagatelle Hoad, and there was clear evidence that inrespect of the rent of those premises the learned Judge had miscalculatedthe amount due as rent and consequently there was an amount to thecredit of the tenant as rent in the hands of the landlord. This decisionwould be authority, if at all, for the proposition that where there is moneyin the hands of the landlord as rent for any particular premises, such a sumcan be set off in respect of any arrears of rent due from the tenant, for thosepremises. In the present case the contract of tenancy was in respect ofpremises No. 22, Nimal Road and the overpayment in respect of rent paidfor premises No. 204, GaJle Road on another contract of tenancy. Counselfor the defendant-respondent submitted that if there was any sum of moneyin the hands of the landlord belonging to the tenant from any source what-soever, the tenant is entitled to set off such sum against arrears of rent,without any intimation to the landlord. I am unable to agree with sucha general proposition nor do I think that the dictum in Wijemanne <fc Co.Ltd. v. Fernando supports this view.■-
Counsel for the plaintiff-appellant argued with considerable force thatthe learned Distict Judge had misdirected himself in law in coming to theconclusion that the defendant was entitled to claim a set-off on the facts ofthis case. The plaint in the present case was filed on 4.7.60. The judgmentin C.R. Colombo Case No. 67881 in favour of the present plaintiff wasdelivered on 4.11.59 and according to that decree there was no money inthe hands of the plaintiff belonging to the defendant at the time of theinstitution of these proceedings. The rights of the plaintiff must beconsidered at the time of the filing of the action (Silva v. Nona Hamine fl)an'd on 4.7.60 there was no debt due from the plaintiff to the defendant.Mr. Weerasooria relied on the decision of Basnayake, C.J.in Muktharv.Ismail3 where the learned Chief Justice quotes from Sweet's LawDictionary that
“ … .a debt exists when a certain sum of money is owing from oneperson (the debtor) to another (the creditor).”
and that.
“ A ‘debt’ denotes not only the obligation of the debtor to pay, butalso the right of the creditor to receive and enforce payment.”
In the present case on 4.7.60 the defendant had no right to receive andenforce any alleged overpayment.
» (1946) 47 N. L. B. 62 at 64.* (1906) 10 N. L. B. 44 (F. B.).
• (1962) 64 N. L. B. 293 at 299.
286
ALLES, J.—Dasaanayake v. Kumarakulatinghe
According to Weasels Law of Contract in South Africa (2nd Edn.Vol. II, p. 695) in the case of compensation of liquid debts (the only typeof debt to which compensation applies) there are two conditions, both ofwhich must be satisfied, before a claim for set-off can be entertained—
(а)The amount of the debt must be determined ; and
(б)the fact that the debt is actually due must be clear.
With regard to (a) above, Wessels says quoting De Villiers C.J. inKruger v. Van Vuuren’s Executrix 1886 5 S. C. 162, 168 that
“ Until every element of uncertainty is removed as to the amount
opposed in compensation, set-off is not allowed.”
In Arie Kgosi v. Kgosi, Aron Moshete and Others *, the Court held that ifthe actual amount has to be determined or approved by a third party,the debt cannot be compensated. Thus, although when costs areawarded it is known upon what principles they will be taxed, andalthough when taxed they are regarded as being due from the momentof the award, yet until the amount of the costs actually due is ascertainedby the taxing master, they cannot be opposed in compensation.
With regard to (6) above, Wessels citing Voet (16.2.17) says that if adebt is subject to a suspensive condition or at a future date, there is nodebt until the condition is fulfilled or the time arrives, and therefore sucha conditional debt cannot be pleaded in compensation. Finally, Wesselssays that the defendant who wishes to oppose in compensation a debtdue to him by the plaintiff must be in a position to demand payment of thedebt.
Applying these principles to the relation between the parties on thedate the present action was instituted (4.7.60) the following facteemerge:
(а)There was no ascertained sum due from the plaintiff to the defendant.
On the contrary on that date the plaintiff had a valid decree foran ascertained sum against the defendant.
(б)It was not clear whether any debt was actually due from the
plaintiff to the defendant. At most there was only a possibilitythat a debt might become due if the defendant succeeded in hisappeal.
(c) The defendant was not entitled to claim payment from the plaintiff atthe time compensation was supposed to operate.
We are therefore of the view that the learned District Judge was inerror in holding that the defendant was entitled to set-off the amounts over-paid by him in C.R. Colombo Case No. 67881 against the arrears of rentin the present case. Consequently, the plaintiff was entitled to succeedin his action. In his prayer the plaintiff claimed damages in a sum ofRs. 565/02 being rent due from 1.10.59 to 30.6.60 at the rate of Rs. 62/78
* (1921) T. P. D. 624.
Rajapalcse Estates Company Ltd. v. Lhilsin
88T
per mensem bat in hiB evidence he said that at the time of the filing of theaction the rent due was from January, 1960 to June, 1960. This wouldamount to Rs. 376/68 being damages from January, 1960 to June, 1960at Rs. 62/78 per mensem. The defendant is also entitled to credit in aBum of Rs. 168 /89 being the plaintiff’s share of the cost of repairs effectedto these premises.
The amount due to the plaintiff at the time of filing action was thereforeRs. 207/79, and the action should have been filed in the Court of Requests.We set aside the judgment and decree dismissing the plaintiff’s action,and enter judgment for the plaintiff in a sum of Rs. 207 /79, ejectment anddamages at Rs. 62/78 per month from 1.7.60 till the defendant is ejected.The evidence shows that the defendant has made certain payments afteraction was filed. He will, of course, be entitled to credit for thosepayments when damages are computed.
In regard to costs, it was the plaintiff’s exaggerated claim for arrears ofrent which necessitated the filing of the action in the District Court. Weare not disposed to grant him costs in the lower Court, but he will beentitled to costs of appeal, to be taxed as in the case of an appeal from theCourt of Requests.
SntiMAjnc, J.—I agree.
Decree set aside.