WANIGARATNE AND ANOTHER v. WANIGARATNE

026-SLLR-SLLR-1997-2-WANIGARATNE-AND-ANOTHER-v.-WANIGARATNE.pdf


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Wanigaratne and Another v. Wanigaratne
267
WANIGARATNE AND ANOTHER
v.
WANIGARATNE
COURT OF APPEALSENANAYAKE, J.,
EDUSSURIYA, J.
CA. 24/94/(F).
D. C. MT. LAVINIA 702/ZL.
SEPTEMBER 16,1996.
Compensation for improvements – Bona fide and Mala fide possession – Jusretentionis-Unjust enrichment – Possessio civilis – Impensa utiles – ImpensaVoluptuorie – Necessary Expenses.
The plaintiff-respondent instituted action seeking a declaration of Title to the landand premises in question. It is the position of the plaintiff-respondent that herfather conveyed the title thereto to her on deed P11, and that the defendant-appellant is in forcible possession of the property.
The defendant-appellant claimed that he was residing on the subject matter onthe basis that it would one day be given to him and that he repaired the houseand in the alternative claimed a jus retentionis.
The defendant-appellant’s further contention was that the respondents had failedto prove P11.
Held:
Per Edussuriya, J.
Deed P11 though marked subject to proof was not objected to when therespondents case was closed reading in evidence P1-P17.
"Where no objection is taken when a document is read in evidence at the closureof the case to a document which had been marked subject to proof the earlierobjection is deemed to have been waived."
In any event, the Notary gave evidence and had stated that she knew the Donor,Donee and the two attesting witnesses.
The defendants-appellants are not bona fide possessors; trespassers cannotfoist on the owner what they consider to be necessary improvements donewithout the owners consent and claim compensation.
Per Senanayake, J.
“It is well settled law that a male fide possessor was not entitled under theRoman Dutch Law to compensation for Impensa Utiles, except in cases wherethe owner of the property stood by and allowed the building to proceed without
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notice to his own claim, in such a case the male fide possessor would be in theposition of a bona fide possessor with the rights of retention.”
The appellants cannot under any circumstances according to law claim anycompensation on the basis of unjust enrichment. It would be unreasonable toallow him to force on the true owner improvements which may be usefulaccording to his own taste, which the plaintiff-respondent never cared to effect.
APPEAL from judgment of the District Court of Mt. Lavinia.
Cases referred to:
Sri Lanka Ports Authority and Another v. Jugolinija-Boat East [1981]-Sri LR 18.
Hassanally v. M. M. M. Cassim 61 NLR 529.
Soysa v. Mohideen 17 NLR 279.
Livera v. Abeysinghe 18 NLR 57.
Bellingham v. Bloometge 1 Bucham Report 36.
Wijetunge v. Wille 63 C.L.W. 41.
Parkin v. Lipped [1895] 12 SLR 179.
Rubin v. Botha SASCR App DIV1911 at 568.
General Tea Estates Co., Ltd. v. Pulle 9 N.L.R. 98.
N. R. M. Daluwatte, PC. with Manohara de Silva for defendant-appellant.
A. K. Premadasa with C. £ de Silva for plaintiff-respondent.
Cur. adv. vult.
October 25,1996.
EDUSSURIYA, J.
This is an appeal from the judgment of the learned District Judgeof Mount Lavinia.
The plaintiff-respondent (respondent) instituted this action seekinga declaration of title to the land and premises described in theschedule to the plaint.
It is the respondent’s case that her father who was the owner ofthis land and premises conveyed the title thereto, to her on deed‘PH’ of 7th January, 1980, and that the defendants-appellants(appellants) broke open the locks of the premises bearingassessment No. 331 referred to in the schedule to the plaint and gotinto forcible possession thereof on 14th January, 1980.
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VJanigaratne and Another v. V/anigaratne (Edussuriya, J.)
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On the other hand the 1st appellant claims to have been residingon the subject matter of this action from 1969 until he went abroad in1977 and that till he returned in 1979 his wife the 2nd appellant wasresiding thereon, and that on his return in 1979 he repaired thehouse standing thereon and effected improvements incurring anexpense of Rs. 150,000/- (paragraph 6 and 7(a) of the amendedanswer dated 18th June 1988 page 58 of the Brief). Having stated allthis, claimed a jus retentionis till a sum of Rs. 200,000/- is paid bythe respondent if judgment is entered in favour of the respondent.However on a reading of paragraphs 7(b) and 7(c) of the amendedanswer one gets the impression that the 1st appellant contradictsthe position set out in paragraph 7(a) that all improvements to theoriginal house which stood on the land were effected after his returnfrom abroad in 1979, by stating that these improvements wereeffected after 1969 when he came into residence.
The first contention of the appellant’s Counsel was that therespondent had failed to prove deed *P11 ’, her title deed.
'P1T though marked subject to proof was not objected to whenthe respondent’s case was closed reading in evidence ‘P1’ to ‘P17‘.
It has been held that where no objection is taken when adocument is read in evidenee at the closure of the case, to adocument which had been marked subject to proof, the earlierobjection is deemed to have been waived. (Sri Lanka Ports Authorityand Another v. Jugolinija-Boat Eastw).
In any event the notary who attested 'P11 ’ has given evidenceand stated that she knew the donor on deed *P11’, the donee andthe two attesting witnesses as well.
However, Counsel for the appellants drew our attention to thenotary’s evidence-in-chief wherein she has stated (according to theproceedings – page 184) that all the witnesses had not come when*P11’ was signed.
This appears to have been a mistake or an error in recording theproceedings since the witness has immediately thereafter said ‘thisdeed has been correctly executed”. Further the notary hascategorically stated that the witness, the donor and the donee wereall present at the time of the execution of ’P11’ and that thewitnesses signed in her presence (page 198). Then again in re-examination (page 199) the notary has repeated this.
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Therefore we hold that the first contention of the appellants’counsel must necessarily fail.
From ‘P11 a letter written by the 1 st appellant from England to hismother, bearing the postal date stamp 14th January 1279, it appearsthat the 1st appellant had resided in the premises no. 331, but it isalso clear from ‘P11' that his wife was not residing there when hewas abroad as stated in paragraph 7(a) of the amended answer(page 64) because the 1st appellant has told his mother to give thekeys to his wife Piyaseeli to enable her to remove her belongings toPamunuwa.
In 'P1T the 1st appellant has told his mother that she can give thehouse to any one and take the money because such money doesnot belong to him. He has also stated therein that once the house isgiven to outsiders he will not come back to the house on his returnfrom abroad.
These statements show that the 1st appellant if at all had beenmerely allowed to reside there. These statements do not substantiatethe 1st appellant’s position that he was made to understand that thesubject matter of this action would one day be given to him. *P1’also show that by the date of that letter the 1st appellant had notspent any money on any improvements to the house. Had he doneso he would certainly have claimed it in 'P1T. Further if as the 1stappellant alleges his father had made him understand that he wouldbe given this land he undoubtedly would have said so in ’P11’. 'P1Tshows clearly that the 1st appellant was merely allowed to residethere.
Then the question is when were the “improvements” effected?
According to the 1st appellant’s evidence he returned to theisland bringing with him four (4) vehicles, two of the vehicles he soldin the later half of 1979 and used that money to effect improvements(page 246). According to paragraph 7(a) of his amended answer toohe effected the improvements after his return in 1979. The 1stappellant has gone on to state (page 24) that at first he got anelectricity connection to the house and "things like that” and thatlater he demolished the house and started building six annexes andthat his father did not object till then. Further, according to him allconstructions were completed by mid 1980.
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On the other hand in January 1980, the father had conveyed titleto the respondent and whilst he was in hospital he had sent his wife(the mother of the 1st appellant) to complain to the Police (P9) thatthe 1st appellant had forcibly occupied the subject matter of thisaction, (on receipt of information to that effect). Besides the mother ofthe 1st appellant has said in evidence that she saw that the 1stAppellant had got into the subject matter of this action and throughfear went away. Further the 1st appellant’s own document ‘D12’ aGrama Sevaka’s certificate of registration of residence which hasbeen issued on 23rd January 1980 states that the 1st appellant wasresiding at the subject matter of this action from 1971 to 1st May1978 and again from January 1980. Therefore he would have goteven the electricity connection after January 1980 and he admitted(page 255) that his mother objected at that stage.
For the abovementioned reasons and the reasons set out in thelearned District Judge’s judgment which I see no purpose in re-iterating here, I see no cause whatsoever to interfere with the findingsof fact that the appellants had got into forcible possession of thesubject matter of this action as alleged by the respondent and thensurreptitiously constructed buildings thereon, in spite of objections,for which they now claim compensation.
Counsel for the appellants contended that the appellants areentitled to compensation on the basis of unjust enrichment of therespondent and relied on the decision in the case of Hassanally v. M.
M.M. Cassim(8).
That decision has no relevance to the facts of this case. In thatcase it was a lessee who effected the improvements in the bona fidebelief that the lessor was the sole owner and further the other co-owners had made no protest but stood by and acquiesced in theimprovements, in this case the appellants are not bona fidepossessors as it was decided that the respondent's predecessor intitle (the father) had never led the appellants to believe that thisproperty would be given to them, and therefore the respondentcannot be ordered to pay compensation for buildings which wereconstructed by the appellants who are mala fide possessors.
Further trespassers cannot foist on the owner what they considerto be necessary improvements, done without the owner’s consentand claim compensation. It could well be that the owner had otherplans and may have to demolish the ‘‘improvements” effected by the
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trespassers because they are not necessary improvements. Besidesthere is no evidence that they are necessary improvements. If Courtsof Law were to hold that owners of land should pay compensation totrespassers who have put up buildings thereon, then we would bepaving the way for trespassers to build as they like, because at theend of the day they can walk away with compensation, after havingbeen in forcible possession for a period of years and having rentedout such buildings and earned thereby, as in this case.
For the above mentioned reasons the appeal is dismissed withcosts fixed at Rs. 4,200/-.
SENANAYAKE, J.
I had the opportunity of reading the judgment of my brotherEdussuriya, J. I am in agreement with the reasons set out in hisjudgment.
I wish to add only on one matter. The learned Counsel for theappellants contended that the appellants were entitled tocompensation on the principle of unjust enrichment of therespondent. He relied on the decision in the case of Hassanally v. M.M. M. Cassim(2). In my view the learned Counsel had failed toappreciate the reasoning in that case. In the instant case theevidence categorically establish that the appellants were trespassersand therefore were mala fide possessors, but in the case ofHassanally v. M. M. M. Cassim (supra) the facts were quite different.The facts of that case was concerned with certain lands situated inNew Moor Street, Colombo which at the date of her death was heldby Rahumath Umma subject to the fideicommissium created in 1871in favour of her descendants. She died in 1921 leaving as her heirstwo daughters Umma Shiffa and the second respondent ZaneraUmma subject to the fideicommissium Umma Shiffa died in 1938leaving as her heirs her four children on 11th December 1945. Therespondent Zanera Umma fiduciary who was entitled to half share ofproperty purported to be sole owner, granted a lease of the propertyfor 30 years. The lease agreement contained a covenant by thelessee that he would “within a reasonable time lay out and expand athis own expense in erecting and completing fit for habitation withproper materials of all sorts upon the said ground dwelling housestenements, shops, boutiques or factories” as there provided. It wasprovided that the lessee could enjoy the use and benefits and
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Wanigaratne and Another v. Wanigaratne (Senanayake, J.)
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income of the buildings constructed during the pendency of thelease and the lessee had at the end of the term to deliver up theentire buildings to the lessor free of payment of any kind.
The lessee in good faith constructed buildings upon the propertyand was in possession for a few years. When an action for sale of theproperty was filed under the Partition Act by a fideicommissary heir ofthe fiduciary. The lessee who was the 5th defendant by his amendedstatement of claim, claimed in the event of sale of the propertyordered in terms of the Partition Act, compensation for the buildings.The learned District Judge held that Zanera Umma held herself outas the sole owner of the land and that the 5th defendant constructedthe buildings in the bona fide belief that Zanera Umma was in fact thesole owner and awarded compensation in a sum of Rs. 25,127.45cts. The lessee's claim to compensation for the buildings from theproceeds of sale was dismissed by the Supreme Court vide 59 N.L.R.page 160 at 164 on the ground that the rights if any arising from acontract between the lessor and lessee cannot be enforced by thelessee as against fideicommissary owners who were not parties tothe contract. H. N. G. Fernando, J. held that the Court was bound bythe decision of the Full Court in Soysa v. MohideerPK Fernando, J.observed at page 161:
“The Full Court unanimously decided that the lessee was notentitled to compensation. The following passage occurs in thejudgment of Pereira, J. at pages 285 and 286. It is now well settledlaw in the Colony that in order to be entitled to compensation forimprovements, a person should have had not only possession ofthe property improved but bona fide possession of it. Bypossession is here meant what was known to the civil law as thepossessio civilis as distinguished from possessio naturalis. Theformer, of course meant detentio animo domini (3 Burge).
Fernando, J. at page 164 (supra) observed “Having consideredmany and subsequent cases I would hold that none of them havein any way qualified the principle laid down in Soysa v. Mohideen(3). that the rights if any arising from a contract between a lessorand lessee cannot be enforced by the lessee asagainst fideicommissary owners who were not parties to thecontract”.
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In Livera v. Abeysinghe™ the Supreme Court held that a purchaserfrom a fiduciary heir cannot claim compensation for usefulimprovements from the fideicommissary but upon appeal to the PrivyCouncil 19 N.L.R. 492 the question of law was left undecidedbecause Their Lordships preferred to act upon the finding of fact thatthe improver was not acting bona fide and had to be treated as amere trespasser. The law was only reviewed in Hassanally v. M. M. M.Cassim vide {supra) 529.
The decision of the Supreme Court was pointed out to be due tofaulty reasoning by Viscount Simonds in Hassanally v. M. M. M.Cassim {supra). Viscount Simonds points out it was the assumption ofthe Supreme Court that it was dealing with a claim by a lesseewhereas the very basis of the claim was that the lease has beenrepudiated and that he cannot claim under it. Their Lordshipsobserved that it would be difficult to imagine a clearer violation ofthe moral principle upon which the rule against unjustenrichment rests than that an owner who has for whatever reasonprematurely brought a lease to an end should at once deny to thelessee the rights which the lease or common law gives him as lesseeand, because he was a lessee, deny also his claim to compensationfor improvements. The Privy Council held that the claim of theimprover was based not on contractual rights under the lease butupon an equitable principle which is an application of the cardinalrule against unjust enrichment.
This case laid down the principle that the true owner is not entitledto take advantage without making compensation of the improvementseffected by one who makes them in good faith believing himself to beentitled to enjoy them whether for a term or in perpetuity. Accordinglya person who occupies land bona fide and improves it in themistaken belief that he has a lease of the property has the same rightto compensation as a bona fide possessor. Vide Bellingham v.Bloometge™ Vide Wijetungev. Wille™.
An improver who lawfully occupies under a lease and in thatcapacity makes improvements is entitled to compensation if his termof lease is prematurely terminated by operation of law. vide Parkin v.Lippert(7) and Rubin v. Botha™.
In the instant case the appellants were trespassers on the land,therefore they were mala fide possessors. It is well settled law and
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decided in the case of The General Tea Estates Co. Ltd. v. Pulld9) thata mala fide possessor was not entitled under the Roman Dutch Law,as administered in Ceylon to compensation for impensa utiles.Pereira Acting Puisne Justice observed in a case reported in 2Balasingham’s Report 149 “a mala fide possessor is one whopossesses well knowing that he has no right to do so in as much asthe property possessed belongs to another and it would beunreasonable to allow him to force on the true owner improvementswhich very useful though they be are effected according to his owntaste or whims and his fancy and may be such as the true ownerhimself would never have cared to effect."
It was the view that was expressed that mala fide possessor is notentitled to utiles impensa except in cases where the owner of theproperty stood by and allowed the building or planting to proceedwithout notice to his own claim. In such a case the mala fidepossessor would be in the position of a bona fide possessor with thesame rights of retention.
Walter Pereira, in his Book Laws of Ceylon at page 377 has statedthat (a) "A bona fide possessor who has effected usefulimprovements has the right to have improvements taken over by theowner of the land and compensation paid to him therefore.”
(b) “A mala fide possessor has a similar right as regards usefulimprovements when the owner of the land has stood by and allowedthe improvements to be effected without protest otherwise a malafide possessor has no right to claim to have the improvements takenover by the owner of the land and compensation paid to himtherefore.”
Improvements can be classified into three classes ImpenseaNecessarie.
Necessary expenses – may be incurred to preserve theproperty or to save it from being lost to the owner.
Impensae Utiles – Useful Improvement – As Chief JusticeMassdorp expressed relying on the proposition on Voet 6.1.36. Byuseful expense is meant the amount or value of the money andlabour expended on the property but only to the extent the value ofthe land has been permanently enhanced by the building or other
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improvements that is to say the possessor will be entitled to claim thedifference between the value of the land with and the value of theland without the improvements in so far as it does not exceed whathas actually expended Med Massdorp Inst. Volume II page 54.
(c) Impensea Voluptuorie are improvements which merelycontribute to the adornment of the property but do not permanentlyenhance its value.
Wille on Principles of South African Law (5th Edition) page 473states “It is inequitable that one' person should be enriched to thedetriment and injury of another jure naturae acquaim est neminemcum alterius detrimento et injuria fieri locupletiorem. Consequentlywhen unjustified enrichment does take place an obligation imposedon the person enriched to make reparation to the other person, eitherto restore property to him or pay him compensation vide Grotious3.30.1 Voet 6.1.36. “This obligation is implied by the law without therehaving been any previous agreement or understanding on the pointbetween the persons concerned and forms an integral part of ourlaw. The obligation arises from the mere fact of one person enjoying abenefit which results in loss or injury to another and does not dependon a contract or on delict" Vide Pothier Obligation 114.
Therefore we see that payment of compensation is founded directlyon the ground of unjust enrichment and so a bona fide possessor canin no circumstances recover more that the amount of the expense hehas incurred in effecting the improvements. He cannot claim theenhanced value due to the passage of time and inflation.
In the instant case the appellants were mala fide possessors andthey had entered the land forcibly and the so called improvementswere made when the plaintiff-respondent had protested and made acomplaint to the authorities. The appellants cannot under anycircumstances according to law claim any compensation on thebasis of unjust enrichment. It would be unreasonable to allow themon the true owner improvements which may be useful according tohim own taste, which the plaintiff-respondent would never have caredto effect. No Court of Law could impose on the true owner to paycompensation for any improvements done by a male fide possessor.In the circumstances I dismiss the appeal with costs.