GOMEZ vs. BERNARD

041-SLLR-SLLR-1993-1-GOMEZ-vs.-BERNARD.pdf


396
Sri Lanka Law Reports
{1993} ISriLR.
GOMEZ
vs.
BERNARD
SUPREME COURT.
BANDARANAYAKE, J., FERNANDO, J. ANDAMERASINGHE, J.
S.C. APPEAL NO. 24/87.
A. APPEAL NO. 148/81 (F).
C. NEGOMBO 2352/RE.
MAY 30th, 1991.
Landlord and tenant – Defendant coming into premises let to a doctor – Sub-tenant/employee/licensee of doctor? – Doctor's death in 1976 at which timedeceased plaintiff was landlord, doctor tenant and defendant sub-tenant- Doctor'swidow granted limited letters to sell cars – No evidence of grant without limitationor payment of rent – Abandonment – Rei vindicatio suit – Rent Act, Section36(2)(c)(iii) – Burden of proof.
The deceased plaintiff let the premises in suit to the original tenant who howeverin September 1970 sub-let them to the defendant. The defendant then offeredrent to the plaintiff who refused to accept it. She sued the defendant for declarationof title, ejectment and damages. It was contended for the defendant that whenhe proved he was a sub-tenant under the original tenant he thereby proved aright to possesion until the tenant's right was terminated.
Held :
Per Fernando J. " while I am inclined to agree that a sub-letting createdin violation of a statutory prohibition is not effective to confer on the sub-tenant
rights as against the landlordyet so long as the tenancy subsists, it is the
tenant who is entitled to possess the premises and the landlord cannot obtaina decree for possession as against the sub – tenant in derogation of the tenant'sright.
The burden was on the defendant to establish that his occupation waslawful after 1976 and he had therefore to prove his allegation that the widowsucceeded the deceased tenant. A person who obtained a limited grant to sellthe cars of the deceased cannot properly be described as an administrator ofthe estate of the deceased. Section 36 (2)(iii) refers to a person who has obtaineda grant of administration without any limitation expressed therein, and perhaps
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Gomez vs. Bernard
397
even a limited grant which refers to the rented premises and confers the powerof dealing therewith. The widow did not fall within section 36(2) (c) (iii).
Further she did not assert or exercise any rights in relation to the premises, orin relation to the plaintiff as landlord or to the defendant as sub-tenant. Hence,even if she had been eligible to claim a right to succeed to the tenancy, shewas in no better position than a tenant who repudiates or disclaims, or abandons,the tenancy; consequently her right to possession of the premises came to anend ; she lost the protection of the Rent Act, and was liable to ejectment withoutnotice in an action brought by the owner. The defendant's position ceases tobe protected.
The language of sub-sections (3) and (4) of section 36 contemplatesan application being made by the landlord to the Rent Board to determinewhom he should accept as tenant when the original tenant has died wherethere are two or more persons who appear to satisfy the requirements ofsection 36(2)(c). The only exception might be where there is only one personwho appears to be qualified, but some doubt exists as to his right. Where,however, there is no person prima fade eligible to succeed, there is noobligation on the landlord to make an application under section 36(3).Section 36(2)(c) provides for a number of possible successors when thetenant dies but they succeed only upon the fulfilment of specifiedconditions – thus the surviving spouse or child can succeed only if hecarries on in the premises the business carried on by the deceased tenant ;a partner or heir to the business only if he is a partner in the business or anheir to the business carried on by the deceased tenant ; an administrator ifhe is the administrator of the estate of the deceased tenant.
Section 10 (2) of the Rent Act debars the plaintiff from obtaining reliefbased on unlawful sub-letting but does not affect his common law right to maintainan action for declaration of title, ejectment and damages against the defendantwho has failed to establish a right of possession (based on sub-tenancy orotherwise).
Cases referred to :
Ibrahim Saibo v. Mansoor (1953) 54 NLR 217.
Zubair Kannu (1984) 2 Sri Kantha Rep. 87.
Thelvandran v. Ramanathan Chettiar [1986] 2 Sri LR 219.
Hameed v. Weerasinghe S.C. 13/86 S.C. Minutes of 16th March 1986.
Kalyoom v. Mansoor [1988] 1 Sri L.R. 361.
Dharmawardena v. Walwattage [1987] 1 Sri LR. 57.
Allis Appu v. Endris Hamy (1984) 3 S.C.R. 87, 90.
APPEAL from judgment of the Court of Appeal.
J. W. Subasinghe, P.C. with Harsha Soza for the appellant.
Sri Lanka Law Reports
398
[1993] 1 Sri L.R.
A. K. Premadasa, P.C. with R. K. Suresh Chandra and J. Ratnayake forrespondent.
Cur. adv. vult.
September 05, 1991.
FERNANDO, J.
A substantial building abutting Main Street, Negombo, had been letto a doctor* The premises were partitioned in 1966 into two allotments,and the doctor continued in occupation as the tenant of the twoallottees. The larger portion of the building was allotted to the Plaintiff’ssister, and was used by the doctor for his nursing home. The smallerportion (admittedly " business premises '') was allotted to the Plaintiff,and was used by the doctor for other business purposes. In September1970, the Defendant came into those premises, and the disputeis whether he was a sub-tenant, or an employee or licensee of thedoctor. The Plaintiff had not given her prior written consent for anysub-letting. The Plaintiffs evidence was that she believed the doctorto be carrying on a business (connected with photography) on thepremises, and that the doctor had brought the Defendant onto thepremises. The doctor paid the rent to the Plaintiff. It was only afterthe doctor's death on 21.10.76 that she became aware that theDefendant was claiming rights of occupation ; the Defendant tenderedrent to her, but this she declined to accept.
It was contended on behalf of the Substituted-Plaintiff-Appellant(the Plaintiff having died while this appeal was pending) that theDefendant was no more than a licensee. However, there was evidencethat the Defendant paid rent to the doctor, and that the doctor hadtreated him as a sub-tenant ; after fee doctor's death the Plaintiffhad instituted an action against him describing him as a sub-tenant,but this was withdrawn wife liberty to bring a fresh action. On thisquestion the District Court and the Court of Appeal have come toconcurrent findings of feet, feat fee Defendant was a sub-tenant, whichI see no reason to disturb. Accordingly, at the time of the doctor'sdeath in 1976, the Plaintiff was the landlord, fee doctor was the tenant,and fee Defendant was his sub-tenant, but without the knowledgeor consent of fee Plaintiff.
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Gomez vs. Bernard (Fernando, J.)
399
The doctor's widow applied for letters of administration ; accordingto the document produced, what was granted to her was " LimitedLetters of Administration ", whereby she was " fully empowered and
authorisedto sell motor car bearing No 3 Sri 761 and to bring
the proceeds of the sale to the credit of this caseNo other documentwas produced, and there is no evidence or admission that sheobtained a grant without limitation. There was no evidence that shepaid or tendered rent to the Plaintiff, or that she made any claimto be the tenant of the premises or acted as such ; or that theDefendant paid or tendered rent to her, or that she accepted oracknowledged the Defendant as her tenant. The Defendant testifiedthat he deposited rent with the Municipal Council, but there was noevidence as to whether this was in the name and to the credit ofthe deceased, his widow or the Plaintiff.
The Plaintiff instituted action against the Defendant for declarationof title, ejectment and damages, without joining the widow (or anyother legal representative or successor of the deceased tenant). TheDistrict Court dismissed the action, and that order was affirmed bythe Court of Appeal. The reasoning in the judgments of the DistrictCourt and the Court of Appeal may be summarized as follows: The- Defendant had been a sub-tenant; upon the death of the tenant thewidow had been appointed Administratrix, and therefore became thetenant, by operation of law, namely section 36 (2)(c)(iii) of the RentAct ; the Defendant by continuing in occupation of the premisesbecame the sub-tenant of the widow ; even though the sub-lettingwas contrary to the provisions of the then prevailing law (section 9of the Rent Restriction Act) section 10 (7) of the Rent Act" legalisedthe prior unlawful sub-letting, thereby creating a state of lawful sub-tenancy no action could be instituted, either against the tenant orthe sub-tenant, on the ground of an unlawful sub-letting whichcommenced prior to the Rent Act ; such sub-tenant could not betreated as a trespasser, and in any event no action could be institutedfor the ejectment of the sub-tenant, without first obtaining a decreefor ejectment against the tenant.
A preliminary question in regard to the burden of proof arises.Learned President's Counsel for the Defendant contended that it wasnot enough for the Plaintiff to establish title to the premises ; whenthe Defendant established that he was a sub-tenant under the original
400 Sri Lanka Law Reports[1993] 1 Sri L.R.
tenant, he thereby proved a right to possession – a right derivedfrom the tenant's right to possession; the burden then lay on thePlaintiff, he submitted, to prove that the tenancy had been terminated,thereby rendering the sub-tenanfs possession unlawful (citing IbrahimSaibo v. Mansoor <’>, Zubair v. Kannu (2), and Theivandran v.Ramanathan Chettiar In Ibrahim Saibo it was laid down thatthe sub-tenanfs right of occupation is fragile, being " essentiallydependent on the lawful continuation of the main tenancy
"a landlord has one distinct- cause of action against the
tenant (based on contract) for the recovery of the property, andanother (based on delict) for the ejectment of the sub-tenant whoremains in occupation after the main tenancy has expired. "
While it was recognised that a sub-tenant can shelter behind theprotection afforded to the tenant if that protection had not ceasedto exist, the burden of proof was not discussed.
Theivandran dealt with a vindietary action ; the defendant was inoccupation under a partnership agreement with the tenant; the plaintiffadmitted the tenancy; it was held that the burden shifted to the plaintiffto establish that the tenancy had been terminated by surrender ofpossession or that the defendant was claiming adversely to thetenant :
"in the case of premises which have been letif the
landlord qua owner chooses to sue for ejectment of a third
party in occupation, the burden will be on him to show that the
right of the tenant to be in possession has revested in him
Had the tenant abandoned or surrendered possession of the
premises..the plaintiff might then have treated the tenancy
as determined and thus having become entitled to possession,sued for the ejectment of the defendant."
Zubair v. Kannu was similar; the defendant's claim to be a partnerof the tenant was rejected, and it was held that the tenant continuedto be entitled to possession; the landlord was therefore refused adecree for possession.
sc
Gomez vs. Bernard (Fernando, J.)
401
The position here is entirely different. What has been proved isthat the tenancy and sub-tenancy subsisted until the doctor’s deathin 1976. There was no automatic devolution or transmission of tenancyrights to a particular successor. Section 36 (2) (c) provides for anumber of possible successors, but they succeed only upon thefulfilment of specified conditions ; thus the surviving spouse or childcan succeed only if he carries on in the premises the business carriedon by the deceased tenant; a partner or heir, only if he was a partnerin the business, or an heir to the business, carried on by the deceasedtenant ; an administrator, if he is the administrator “ of the estateof the deceased tenant". Thus there may be no qualified successor,and sometimes even no potential successor. It was therefore incum-bent on the defendant to establish who became the new tenant, andto show by what right he continued to occupy the premises, afterthe death of the old tenant (cf. Hameed v. Weerasinghe (4>). Theburden was thus on the defendant to establish that the widow didbecome the tenant, and not on the plaintiff to prove the negative.
Where the landlord is aware that there are two or more personswho satisfy, or appear to satisfy, the requirements of section 36(2)(c),he would be uncertain whom to accept as the tenant ; section 36
would oblige him to apply to the Rent Board for an order todetermine that question, as held in Kalyoom v. Mansoor (5>. I findit difficult to agree with the observations of S. N. Silva, J., suggestingthat even if there is only one qualified person, the landlord must makean application under section 36 (3) : if, for instance, there is anexecutor who has obtained probate, and there are no persons qualifiedunder clauses (i) and (ii) of section 36 (2) (c), there seems to beno good reason why the landlord should apply under section 36 (3).The language of sub-sections (3) and (4) contemplates an applicationbeing made, and notice being issued, where there are “ persons “who may be deemed to be tenants. The only exception might bewhere there is only one person who appears to be qualified, but somedoubt exists as to his right. Where, however, there is no person primafacie eligible to succeed, there is no obligation on the landlord tomake an application under section 36 (3). it was not contended inthe present case that the Plaintiff was obliged to make an applicationunder section 36 (3) ; probably because it was clear that she wasunaware that there was any person prima facie eligible to succeedunder section 36 (2) (c).
Sri Lanka Law Reports
402
(1993] ISriLR.
The Substituted-Plaintiffs contentions in appeal may be summarisedas follows :
The transaction whereby the premises had been sub-let by thedoctor to the defendant was tainted with illegality, as it wasentered into in violation of section 9 (1) of the Rent RestrictionAct (corresponding to section 10 (2) of the Rent Act) whichimperatively requires the prior consent in writing of thelandlord ; whatever rights the defendant might have had there-under as against the original tenant, his occupation was unlawfulas against the plaintiff, from September 1970.
(a) Upon the death of the doctor, no one qualified to be deemed
the tenant under section 36 (2) (c). There was no spouse orchild carrying on the business in the rented premises, therewas no partner in or heir to the deceased's business, andthere was no " executor or administrator of the estate of thedeceased The limited grant obtained by the widow did notsatisfy section 36 (2) (c) (iii).
Even if the widow did qualify under that section, she neverasserted or exercised rights as tenant, and abandoned what-ever rights she may have had in respect of a tenancy.
There being no tenancy after the death of the original tenant,the occupation of the defendant became unlawful as againstthe plaintiff at least in 1976. 1
1. While I am inclined to agree that a sub-letting created inviolation of a statutory prohibition is not effective to confer on thesub-tenant rights as against the landlord (cf. Dharmawardena v.Walwattage (6), yet so long as the tenancy subsists, it is the tenantwho is entitled to possess the premises, and the landlord cannotobtain a decree for possession as against the sub-tenant in derogationof the tenant's right (Zubair v. Kannu). In Theivandran, Sharvananda,C.J., held the landlord to be entitled to a declaration of title as againsta person in occupation with the tenant's consent If a tenant unlawfullysublets part of the rented premises to a person who, for instance,later uses the premises for purposes connected with terrorism, narcoticsor kasippu, is fee landlord entitled to seek ejectment of the sub-tenant
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Gomez vs. Bernard (Fernando, J.)
403
only, perhaps expressly acknowledging and reserving the tenant'sright of possession (as in Allis Appu v. Endris Hamy m. However,in view of my decision on the other matters, it is unnecessary todecide this question.
2. In regard to the second submission, the burden was on thedefendant to establish that his occupation was lawful after 1976, andhe had therefore to prove his allegation that the widow succeededthe deceased tenant. It was not suggested that the widow waseligible under clauses (i) or (ii) ; she was not an executor (whether" executor " includes a person named as executor in a last will,or means only a person who has obtained probate). “ Administrator"clearly means a person who has obtained such status by virtue ofthe order of a competent court. Here the widow only obtained a limitedgrant to enable her to sell a specific asset. Can she be consideredto be the " administrator of the estate of the deceased *? At thetime section 36 was enacted, the relevant provisions of the CivilProcedure Code dealing with the grant of letters of administration weresections 539 and 540 (corresponding to sections 296 and 290 of theAdministration of Justice Law, No 44 of 1973). Section 539 providedfor a grant of administration limited in respect of the property to beadministered or the power of dealing with that property ; i.e. limitedto a particular property, and for a particular purpose, such as sellinga specific asset for payment of estate duty. A person who obtaineda limited grant of that nature cannot properly be described as anadministrator of the estate of the deceased. I am of the view thatsection 36 (2) (c) (iii) refers to a person who has obtained a grantof administration without any limitation expressed therein, and perhapseven a limited grant which refers to the rented premises and confersthe power of dealing therewith. The widow did not fall within section36 (2) (c) (iii).
Further, she did not assert or exercise any rights in relation tothe premises, or in relation to the plainitiff as landlord or to thedefendant as sub-tenant. Hence, even if she had been eligible toclaim a right to succeed to the tenancy, she was in no better positionthan a tenant who repudiates or disclaims, or abandons, the tenancy:
404
Sri Lanka Law Reports
[1993] 1 Sri L.R.
consequently her right to possession of the premises came to anend ; she lost the protection of the Rent Act ; and was liable toejectment without notice in an action brought by the owner. Thedefendant's occupation ceased to be protected.
Learned President’s Counsel for the defendant contended thatthe plaintiffs right of action was barred by the provisions of section10 (7) :
" Nothing in subsection 2, subsection 5 or subsection 6 shallapply to the subletting of any premises or part thereof without theprior consent in writing of the landlord where such premises orpart have been sublet prior to the date of commencement of thisAct to any person, so long as that person continues to be thesubtenant of the premises or part thereof."
Learned President's Counsel for the Plaintiff submitted that this provisionapplies only to a lawful sub-letting ; that the sub-letting to thedefendant was without the Plaintiffs consent, and section 10 (7) hadno application. It is clear, however, that" sub-letting " in section 10
, and indeed in the whole of section 10, refers to the physicalact of sub-letting, namely parting with possession, or relinquishingcontrol of the premises, and not to the conditions which make sub-letting lawful. However, section 10 (7) does not operate to bar allactions for recovery of possession ; it is no more than an exceptionto some of the provisions of section 10. Looked at from the pointof view of the owner of the premises, this provision merely precludesresort to the remedies provided by section 10 (2), (5) and (6), butdoes not affect his other proprietory remedies. In this instancesection 10 (7) debars the Plaintiff from obtaining relief based onunlawful sub-letting, but does not affect his common law right tomaintain an action for declaration of title, ejectment and damagesagainst the defendant who has failed to establish a right ofpossession (based on sub-tenancy or otherwise). I
I therefore allow the appeal, and set aside the judgmentsand decrees of the District Court and the Court of Appeal. Thesubstituted-plaintiff will be entitled to a declaration of title, to a decreefor the ejectment of the defendant, and to damages, as prayed forin paragraphs (a), (b) and (c) of the prayer to the plaint, together
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Rev. Dharmatilleka Thero v. Rev. Buddharakkita Them
40S
with costs in a sum of Rs. 3,000 in this Court, as well as costs inboth Courts below.
BANDARANAYAKE, J. – I agree.
AMERASINGHE, J. – I agree.
Appeal allowed.