031-SLLR-SLLR-2009-V-1-FRANCIS-SAMARAWICKREMA-vs.-HILDA-JAYASINGHE-AND-ANOTHER.pdf

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time this case was taken for trial de novo at the DistrictCourt, Kahatapitiya the notary who attested the deed wasdead. An application bythe Plaintiff-Respondent [presentAppellant] to adopt his evidence given at the earlier trialmade under Section 33 of the Evidence Ordinance hadbeen refused by the learned District Judge.”
Strangely, the question whether the testimony ofMr. Kahatapitiya recorded in the course of the first trial,should be considered under Section 33 of the EvidenceOrdinance has not been considered by the Court of Appeal,which concluded that the due execution of the impugneddeeds has not been established by the Appellant withouttaking the evidence of Mr. Kahatapitiya into consideration. Itis in this context that the question as to whether the evidenceof Mr. Kahatapitiya has been properly and lawfully shut outfrom the second trial has to be considered.
It has been strenuously argued by learned President’sCounsel for the Respondents that as the Appellant did notchallenge by way of interlocutory appeal the orders madeby the District Courts on 20th September 1988 and 13,hAugust 1990 to exclude the evidence of Mr. Kahatapitiya,he is precluded from raising this question in a finalappeal. This submission, in my view, goes against soundand established principle enunciated by our courts,which as pointed out by Bertram C. J. in Fernandov. Femando{6) at 265 “discourages appeals againstincidental decisions when an appeal may effectively betaken against the order disposing of the matter under con-sideration at its final stage.” It is trite law that leave to ap-peal will not be granted from every incidental order relat-ing to the admission or rejection of evidence, for to do sowould be to open the floodgates to interminable litigation(Balasubramanium v. Valliappar Chettiat<7) at 560). But if the
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incidental order goes to the root of the matter and it is bothconvenient and in the interests of both parties that thecorrectness of the order be tested at the earliest possible stage,then leave to appeal will be granted (Arumugam v. Thampu,181235 at 255; Goramtja v. Mariat9) at 521). As observed byVythialingam, J. in K. A. Mudiyanse v. Punchi BandaRanaweera Cirantham at 509 –
“A party so aggrieved, however, still has two courses ofaction: (1) to file an interlocutory appeal or, (2) to stay hishand and file his appeal at the end of the case even onthe very same ground on which he could have filed hisinterlocutory appeal. If he adopts the latter course hecannot be shut out on the ground that his appeal beingagainst the incidental order against him he might havestill succeeded in the action. . .”
This appears to me to be exactly what happened atthe second trial in this case, where the Appellant, who wasaggrieved by the decision of the District Court to disregardthe evidence of Mr.Kahatapitiya recorded at the first trial,went on regardless to succeed in the final judgment, only tobe reversed by the Court of Appeal, which without consider-ing the evidence of this vital witness, came to the conclusionthat the due execution of the impugned deeds 4779 (P3) andNo. 4880 (P4) had not been established by the Appellant.
Section 33 of the Evidence Ordinance, under which theAppellant moved to adopt into the record in the second trial,the evidence of Mr. Kahatapitiya led at the first trial, providesas followsl
“Evidence given by a witness in a judicial proceeding,or before any person authorized by law to take it, is rel-evant, for the purpose of proving, in a subsequent judicial
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proceeding, or in a later stage of the same judicial proceed-ing, the truth of the facts which it states, when the wit-ness is dead or cannot be found, or is incapable of givingevidence, or is kept out of the way by the adverse party,or if his presence cannot be obtained without an amountof delay or expense which, under the circumstances of thecase, the court considers unreasonable;
Provided –
that the proceeding was between the same parties ortheir representatives in interest;
that the adverse party in the first proceeding had theright and opportunity to cross-examine;
that the question in issue were substantially the samein the first as in the second proceeding.
Explanation – A criminal trial or inquiry shall be deemedto be a proceeding between the prosecutor and the accusedwithin the meaning of this section.” (emphasis added).
In determining the questions on which leave has beengranted by this Court, it is important to decide whether theapplication made in this case to adopt and consider the evi-dence of Mr. Kahatapitiya falls within the parameters of Sec-tion 33 of the Evidence Ordinance.
This is not a case in which it was sought to adoptevidence previously given in some other judicial proceedings,The application relates to evidence given by Mr. Kahatapitiyain an earlier stage (first trial in the same judicial proceedings,but it is plain that Section 33 could apply in either situa-tion. The basis of the application was that Mr. Kahatapitiyawas dead, and that therefore evidence given by him in the
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course of the first trial in the same action “is relevant, forthe purpose of proving, . . . the truth of the facts which itstates. . Section 33 one of the many exceptions found in theEvidence Ordinance to ^ the hearsay rule, and has beenconsidered by this Court in decisions such as Herath v.Jabbar (11>, Cassim v. Suppiah Pulldn), Kobbekaduwa v.Seneviratne<13> and Sheela Sinharage v. The Attorney-General14) .
It is manifest that the conditions set out in the provi-so to section 33 are fulfilled in this case, as the parties andthe issues are the same and the Respondents had the rightand the opportunity to cross-examine Mr, Kahatapitiya inthe course of the first trial. I have compared the 13 issuesformulated at the first trial with the 23 issues raised at thesecond, and though the issues settled in the second trialare more elaborate, they are substantially similar andMr. Kahatapitiya, as the notary who prepared the impugneddeeds and before whom it was executed, is definitely animportant witness to answer the said issues. The only questionthat arises for determination in this appeal is, thereforewhether the trial court had any discretion not to apply Section33 in the peculiar circumstance that although all conditionsfor its application were fulfilled, the untimely death ofMr. Kahatapitiya has defeated the judicially conceivedobjective of providing him with the opportunity of explaininghis conduct as a notary in the context of the above mentionedissues.
In this connection, it is relevant to note that E. R. S. R.Coomaraswamy, The Law of Evidence, Vol. I, at pages 492-493 states as follows:
“The court has to exercise the power given in Section
33 with great caution and must insist on strict proof
before holding that the witness is dead or cannot be found
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or has become incapable of giving evidence or had beenkept out of the way by the adverse party or his presencecannot be secured without an unreasonable amount ofdelay and expense. But once any of the first four conditionsof death, not being found, incapacity to give evidence orbeing kept out of the way by the adverse party has beenproved, the court has no discretion and must admit thedeposition, since Section 33 declares such deposition to berelevant and, therefore admissible. ” (emphasis added).
Coomaraswamy concedes that a court of law does havethe discretion with respect to the last condition in Section33 relating to a witness whose presence in court cannot beobtained without an amount of delay or expense which “thecourt considers unreasonable” The present case does notarise from such a situation, and there is no way in whichthe dead witness can be made to give evidence. Accordingly,
I am firmly of the opinion that Section 33 of the Evidence Or-dinance is applicable in the circumstances of this case, andthat the Court had no discretion in the matter.
The only reason adduced by the District Court forrejecting the application to adopt the testimony previous-ly given by Mr. Kahatapitiya was that the expectation ofthe Court of Appeal that the Respondents could confrontMr. Kahatapitiya with his convictions, in the light of which hetoo could clarify his conduct as notary, had been frustratedby his death..In my view, too much cannot be made out ofthis expectation, as it is difficult to predict how Mr. Kahat-apitiya would have fared or what he would have had to say inregard to his conduct as notary, if he had been able to testifyat the second trial. It is trite law that subject to any statu-tory exception, evidence that a person has been convicted ona charge arising out of the same incident as that on whichthe civil claim is based is not admissible to establish his li-
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ability in the civil suit, because as pointed out by Goddard,L. J. in Hollington v. F. Hewthom and Co. Ltd.{l5), at 40, in thecontext of an appeal on a damages action arising from a roadaccident, –
“The court which has to try the claim for damages knowsnothing of the evidence that was before the criminal court:it cannot know what arguments were addressed to it, orwhat influenced the court in arriving at its decision. ”
Hence, as Goddard, L. J. observed in the said judgmentat 40, “on the trial of the issue in the civil court, the opinionof the criminal court is equally irrelevant”. Of course, theapplication of the Hollington principle has been curtailed inSri Lanka by Sections 41A, 41B and 41C of the Evidence Ordi-nance introduced by Section 3 of the Evidence (Amendment)Act No. 33 of 1988, but since the conviction of Mr. Kahatapitiyawas not a fact in issue in the instant case and none of theother new provisions are applicable thereto, the conviction willnot have any relevance to the case. When Mr. Kahatapitiyatestified at the first trial he was asked in cross-examinationabout the prosecutions that were then pending against himin the Magistrates Court, and it was open to the Respondentsto have led evidence regarding any facts that may have beenrelevant relating to his conduct as a notary in general, andthe fact that he had subsequently been convicted in thosecases cannot add any value to his cross-examination so as tomake any difference.
Furthermore, it is clear from the judgment of theCourt of Appeal in Hilda Jayasinghe v. Francis Samara-wickrema (supra), that the appellate court set aside thedecision of the District Court and directed a fresh trialprimarily on the basis that the learned District Judge hadmisdirected himself on certain factual matters and had erredin considering deeds 4779 (P3) and 4880 (P4) as having beenduly executed despite the failure of either of the two arresting
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witnesses to give evidence, and the possibility of clarifyingmatters giving rise to the said convictions were only incidentaland were not sought to be imposed by the Court of Appealas a condition precedent for the adoption of the testimony ofMr. Kahatapitiya. I therefore hold that the District Courtclearly erred in refusing to adopt his evidence recorded in thefirst trial upon proof of his death, and the Court of Appealaggravated the situation by failing to take into considerationthis vital deposition which was already part of the record.
The Quantum of proof in Civil Cases Involving Fraud
I shall now come to the first of the two questions on whichspecial leave to appeal has been granted by this Court, namely,did the Court of Appeal err in holding that P4 was fraudu-lently executed when the same has not been proved with thehigh degree of proof required to prove fraud? In dealing withthis question it is necessaiy to consider whether the decisionof the Court of Appeal turned on mere due execution of theimpugned deeds or whether it also involved the question offraud. It is important to observe at the outset that the Courtof Appeal has concluded that the Appellant “had failed to es-tablish due execution of his title deeds 4879 (P3) and 4880(P4)” and that therefore he cannot maintain his action “whichis one of declaration of title based upon deeds 4879 (P3) and4880 (P4)”, and that in arriving at this conclusion the Courthas not expressly considered the question of the quantum ofproof required to prove a civil case involving fraud.
Learned President’s Counsel for the Appellant submitsthat the decision of the Court of Appeal involved a finding offraud, and that the Court had erred in applying the ordinarystandard of preponderance of probability to the facts and cir-cumstances of this case. On the other hand, learned Presi-dent’s Counsel for the Respondents submits that the Court of
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Appeal, in arriving at its decision, has not made any findingthat there was fraud, and the basis of its decision was thatthe Appellant has failed to discharge the burden placed on-him by law to show that the impugned deeds P3 and P4 hadbeen duly executed, and that this decision did not encom-pass a finding of fraud. He has further submitted that evenin a civil case involving fraud the applicable standard of proofis a balance of probabilities.
In order to determine whether the decision of the Court ofAppeal involved a findirig of fraud, it is necessary to considerthe issues that arose for determination in the case. The 23issues on which the case went to trial for the second timewere settled on 9th May 1988 and are found in pages 450to 456 of the Appeal Brief. It will be seen that issues 13to 18, which are reproduced below, seek to establish thatMr. Kahatapitiya perpetrated a fraud on the Respondentsand the 3rd Defendant by converting blank papers on whichhe obtained their signatures and thumb impression intothe impugned deeds 4779 (P3) and 4880 (P4) on which theAppellant claims title to the property in suit:

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These issues demonstrate that the question of fraudloomed large at the trial, and in particular issue 17, whichwas identical with issue 10 framed at the first trial, specificallyraised the question “Was Deed No. 4880 (P4) a fraudulenttransfer?” Furthermore, issue 18 sought to assert that thesaid deed was the product of fraudulent collusion betweenMr. Kahatapitiya and the Appellant. It is relevant to notethat both these issues were answered in the negative by thelearned District Judge in his judgment dated 16th June 1993,by which he granted relief to the Appellant as prayed for inthe plaint on the basis that the impugned deeds P3 and P4were duly executed. It was this decision that was overturnedby the Court of Appeal.
In my considered view, it is not possible to decide thequestion of due execution of the impugned deeds with-out dealing with the allegation of fraud leveled against thenotary, as these issues are so closely interwoven and can-not be extricated from one another. This becomes clear fromthe following crucial passage in the judgment of the Court ofAppeal appealed from:
“Let us now examine the emdence to see whether theplaintiff-respondent had established due execution. AsNotary public Kahatapitiya was dead his evidence wasnot available at the second trial, only the evidence ofDharmasena one of the attesting witnesses wasavailable with regard to due execution of deeds No. 4879and 4880 (P3) and (P4). Therefore it appears that theplaintiff-respondent (present Appellantj has not estab-lished due execution of deeds No. 4879 (P3) and 4880 (P4),

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in terms of the decision ofTambiah, J. in Hilda Jayasinghev. Francis Samarawickrame (supra). ”
The Court of Appeal has itself referred to the decisionof the Court of Appeal in Hilda Jayasinghe v. FrancisSamarawickrame (supra), which arose from the first trial,in regard to the question of due execution of the impugneddeeds. That decision is helpful in understanding the back-ground to the questions that arose for determination in thesecond trial, and shed some light on the question.of proofof due execution of the impugned deeds. At 359 of the saidjudgment, Tambiah, J., after citing a passage from Sarkar’sLaw of Evidence, went on to observe that –
“The two cases (Baronchy Appu,sl and Seneviratnef41,supra) illustrate the distinction drawn by Sarkar in thepassage cited, between the mode of proof of a documentrequired to be attested and the quantum of evidencerequired to prove such a document. The principles laiddown in both cases are not in conflict with each otherand can be reconciled. Seneviratne’s case was concernedwith the mode of proof, it decided – that the notary is anattesting witness and is competent to prove the executionof the document if he knew the maker of the document.Baronchy Appu’s case was concerned more with thequantum of evidence required. The principle to bediscerned from the judgment of Lawrie, A. C. J. is thatwhere the execution of a deed is challenged on the groundthat it had been signed before it was written, then, whereat least one of the two attesting witnesses is alive, theemdence of the notary alone, even where he knew theexecutants is not sufficient; at least one of the twoattesting witnesses should also be called.
The case of the defendants-appeallants is that Mr.Kahatapitiya fraudulently obtained their signatures and
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thumb impression on blank papers which were subse-quently filled up in the form of a deed of sale (P4); thatno consideration passed and that the two attestingwitnesses were not present at the time of the execution.The circumstances of this case require that one of the twoattesting witnesses be called, in addition to the notary. Touse the words of Lawrie, C. J., “the case is incomplete”without him. ” (emphasis added).
What Tambiah, J. was saying in the above passage isthat where fraud is alleged against the notary, his evidencestanding alone does not satisfy the “ quantum of evidence”required by law to prove due execution, and that one orboth attesting witnesses, provided they are living and able totestify, must be called to the witness box. Although HisLordship did not expressly say so in that judgment, it followsas a natural corollary to what he did say, that where oneor both attesting witnesses have testified, the evidence soelicited has to be assessed adopting the standard of proofapplicable to a civil case involving allegations of fraud.
Section 101 of the Evidence Ordinance deals with theburden of proof in cases, and lays down that who everdesires any court to give judgment as to any legkl rightor liability dependant on the existence of facts which heasserts, must prove that those facts exist. This provisionis based on the rule ei incumbit probation quit dicit, non quinegat, and as Lord Maugham observed in Joseph ConstantineSteamship Line Ltd. v. Imperial Smelting Corp. Ltd*16'“it is an ancient rule founded on consideration of goodsense and should not be departed from without strongreasons”. Accordingly, the legal burden of proving all factsessential to his claim ordinarily rests upon the plaintiff ina civil suit or the prosecutor in criminal proceedings, and
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it was therefore the burden of the Appellant in this case toprove due execution of the impugned deeds on which he basedhis claim to title. As it is apparent from Section 102 of theOrdinance, the Appellant’s action would be liable to be dis-missed if he fails to discharge this legal burden.
While the legal burden to prove his claim in a civilaction generally rests on the plaintiff, it is expressly providedin Section 103 of the Evidence Ordinance that the burden ofproof of any particular facts lies on that person who wishesthe courts to believe in its existence, unless it is provided byany law that the proof of the fact shall lie on any particularperson. As the two illustrations provided in Section 103 arefrom criminal prosecutions, it might be useful to quote fromE.R.S.R. Coomarawamy’s The Law of Evidence Vol II, Book 1page 259 in which it is stated that-
“Numerous illustrations may be given from civil cas-es to illustrate the application of Section 103. Where adeaf and dumb person had executed a deed, conveyingimmovable property to another, and the notary (sincedead) has stated in his attestation that he read over andexplained the instructions to such person, the burden onsuch person, when he challenges the validity of the deedfor want of proper understanding as to its purport at thetime of execution, is a heavy one.”
This illustration is derived from the decision of thisCourt in Subramaniam v. Thanarase tl7), in which theSupreme Court considered the declaration made in theattestation clause by the notary, who was dead when thecase went into trial, that he read over and explained theinstructions to the executant would be prima faceevidence of the truth of that declaration. This was not a casewhere fraud was alleged, and the only issue was whether
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the executant of the deed, being deaf and dumb, understoodthe purport of the deed, but nevertheless it is a useful decisionthat illustrates the principle that a defendant who relieson a particular fact has the burden of proving such fact…Accordingly, in the context of the present appeal, it may besaid that while the burden is on the Appellant to prove dueexecution of the impugned deeds, it is the burden of theRespondents to show that its execution was tainted withfraud.
So much for the burden of proof, but it is now necessaryto deal with the standard of proof. In this context, it isimportant to remember that unlike a criminal case, whichhas to be proved beyond reasonable doubt, a civil claim maybe seceded on a preponderance of evidence or on a balanceof probabilities. Adverting to this fundamental distinction,Denning, J., in Miller v. Minister of Pensions,m observedat 373-374 that the standard of proof in a criminalcase was proof beyond a reasonable doubt, whichcarries a high degree of probability, but “does not mean proofbeyond the shadow of a doubt” to the exclusion of even“fanciful possibilities.” He went on to observe that bycontrast, proof in a civil case –
“. . . must carry a reasonable degree of probability,but not so high as is required in a criminal case. If theevidence is such that the tribunal can say, *we think itmore probable that not’ the burden is discharged, but ifthe probabilities are equal it is not.”
The English courts have taken the view that thestandard of proof required for a criminal offence incivil proceedings is not higher than the standard of proofordinarily required in civil proceedings, (vide Homal v.
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Neuberger Products LtdP9) Re Dellow’s Will Trusts Postoffice v. Estuary Radid2l); Nishina Trading v. ChayodaFire Co.*221but within that standard, as Denning, L. J., put it in Homalv. Neuberger Products Ltd. (supra) at 258, “the more seriousthe allegation the higher the degree of probability that isrequired.” The degree of proof depends on the subject matter,and as Denning L. J. observed in Bater v. Bater{23) at 37 –
“A civil court when considering a charge of fraud willnaturally require for itself a higher degree of probabilitythan that which it would require when asking itself ifnegligence is established. It does not expect so high adegree as a criminal court even when it is consideringa charge of a criminal nature; but it still does requirea degree of probability which is commensurate with theoccasion.”
Our Evidence Ordinance does not anywhere draw thedistinction between the two standards of proof in crimi-nal and in civil cases, but our courts have recognized andconsistently applies the English distinction. The key to thequestion lies in the definitions of “proved” and “disapproved” inSection 3 of the Evidence Ordinance, which postulate eitherbelief or a consideration of its existence being so probablethat a prudent man ought under the circumstances of theparticular case, to act on the supposition that it exists or doesnot exist. It is legitimate to presume that in a criminal casethe prudent man would require a very high degree of proof- proof beyond reasonable doubt, whereas in a civil case,he would not require the same high standard, and would besatisfied if the fact is more probable than not.
The first question that arises in this appeal is simplywhat is the standard applicable to the proof of fraud in civil
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proceedings in Sri Lanka? In Lakshmanan Chettiar v. MuttiahChettiar*241, which was a civil action filed by a professionalmoney lender against his agent claiming that he had fraud-ulently and in breach of trust assigned a decree madein his favour to a third party without any consideration,the court had to decide whether the assignment wasfraudulent, and Howard, C. J. (with Canakaratne, J. concurring)held that the standard applicable to the proof of fraud wasthe criminal standard. His Lordship observed at 344, that“fraud, like any other charge of a criminal offence whethermade in civil or criminal proceedings, must be establishedbeyond reasonable doubt” as such a finding “cannot be basedon suspicion and conjecture”. This decision was followedin Yoosooda v. RajaratnarvF5) in which in the context ofan inquiry under Section 325 of the Civil Procedure Code,G. P. A. Silva A. C. J., observed at page 13 that –
“Both principle and precedent would support the viewthat when a transfer is effected for valuable considerationthe burden of proving that it was fraudulent rests on theplaintiff in these circumstances. It is an accepted rulethat such a burden even in a civil proceeding must bedischarged to the satisfaction of a Court. For that degreeof satisfaction to be reached, the standard of proof thatis required is the equivalent of proof beyond reasonabledoubt.”
However, in Associated Battery Manufacturers (Ceylon)Ltd. v. United Engineering Workers UnionP61 at 544, andCaledonian Estate Ltd., v. HilamanP7) at .426, it has beenobserved by this Court that allegations of misconduct inlabour tribunal proceedings may be proved on a balance ofprobabilities. It is clear from these decisions that while thecivil standard is generally applicable, the more serious the
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imputation, the stricter is the proof which is required. As ex-plained by Lord Nicholls in re H (Minorsp81 at 586 –
“The balance of probability standard means that a courtis satisfied an event occurred if the court considers thaton the evidence, the occurrence of the event was morelikely than not When assessing the probabilities, thecourt will have in mind the factor, to whatever extentis appropriate in the particular case that the moreserious the allegation the less likely it is that theevent occurred and hence, the stronger shouldbe the evidence before the court concludes that theallegation is established on the balance of probability.Fraud is usually less likely than negligence. Deliberatephysical injuiyisusually less likely than accidental physicalinjury.” (emphasis added).
Explaining the principles enunciated by the courts inthis regard, Phipson on Evidence (16th Edition – 2005) at page156, emphasizes that “attention should be paid to the natureof the allegation, the alternative version of facts suggestedby the defence (which may not be that the event did notoccur, but rather that it occurred in a different way, or atsomeone else’s hand), and the inherent probabilities of suchalternatives having occurred.”
It is necessary to bear these principles in mind inexamining the relevant evidence to answer the main questionthat arises on this appeal: has the Appellant discharged theburden placed on him by law to prove the due execution ofthe impugned deeds P3 and P4? As already noted, thisquestion is intrinsically linked to another question: havethe Respondents discharged their burden to show that theexecution of Deed No. 4880 (P4) was tainted with fraud? Itis common ground that on 24th March 1976, the 1st and 2nd
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Defendant – Appellant-Respondents placed their signaturesand the 3rd Defendant-Appellant-Respondent placed herthumb impression on certain sheets of paper which werepresented to them by Mr. Kahatapitiya at his residence, andthe parties are at variance only in regard to the nature of thetransaction and the manner in which the deeds in questionwere executed.
The Appellant in his testimony claimed that what theparties signed were duly perfected deeds bearing Nos. 4779(P3) and 4880 (P4) intended to transfer title in the landconstituting the subject matter of this appeal to the Appellant.According to him, the Respondents, who were related to himand who were his neighbors, approached him with a viewto selling the land in question which he agreed to buy forRs. 8000/-. The Appellant has also testified that on 24thMarch 1976, when by prior arrangement, he went to theresidence of Mr. Kahatapitiya, the said Respondents andDefendant were already there and the deeds were preparedonly thereafter. According to the Appellant, in view of theconveyance in favour of Yasantha Ajith Kahatapitiya effectedby Deed No. 4753 (P2) two deeds had to be prepared, oneto retransfer the title from Yasantha, the minor son ofMr. Kahatapitiya to the 1st and 2nd Defendant – Appellant-Respondents and the 3rd Defendant, and the other, for thelatter to convey the title to the Appellant. At pages 498-499 ofthe Appeal Brief, his testimony regarding the financial aspectof the transaction was as follows:-

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His position was that he took with him Rs. 8000/-, whichhe paid to the 2nd Defendant – Appellant-Respondent, StephenJayasinghe out of which Jayasinghe paid Rs. 3,752/- toMr. L. G. Kahatapitiya as money payable to secure theretransfer of title in terms of P2, which included interest andnotarial charges. He further testified that while YasanthaAjith Kahatapitiya placed his signature on P3 the saidRespondents signed and the Defendant placed her thumbimpression on Deed No. 4880 (P4) by which they conveyedtheir title to him by way of sale.
The version of the respondents is that they were under theimpression that their title to the property in question hadbeen transferred by Deed No. 4753 dated 12th August 1975(P2) to Mr. L. G. Kahatapitiya and riot to his minor sonYasantha Ajith Kahatapitiya; that on 24th March 1976, theysigned printed deed forms commonly used for the makingof deeds with several blank spaces, in the expectation thatthe signed papers will be perfected by Mr. Kahatapitiya toconstitute an assignment of what they thought were hisrights under the said deed No. 4753 (P2) to the Appellant;that there was no intention to sell the property outright to theAppellant; that in the circumstances no money changedhands at the time of signing these papers; and that the 2ndDefendant-Appellant-Respondent was not present at the timewhen the 1st Defendant-Appellant-Respondent signed thepapers and the 3rd Defendant placed her thumb impressionthereon. Both Respondents were consistent in their testimonythat what they signed were printed deed papers withunfilled blanks. Elaborating on this position, the 2nd Defendant-Appellant-Respondent stated in evidence (at page 625 of the

there unfilled blanks which he described saying;
Appeal Brief) that he signed on
in which

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(page 631 of the Appeal Brief)
The learned District Judge has accepted the Appellant’sstory and rejected the version presented by the Respondents.An important fact that the learned District Judge took intoconsideration was that, apart from the signatures of the twoattesting witnesses and Mr. Kahatapitiya, nothing was writtenon Deed No. 4880 (P4) in the English language. Not only wasthe entire deed P4 in the Sinhalese language, it commenced
The 1st Defendant-Appellant-Respondent testified tothe same effect, but went on to assert an additional fact,which if true, might have contributed to her belief that thetransaction was an assignment to the Appellant of the rightsofYasantha Ajith Kahatapitiya under Deed No. 4753 (P2) andnot an outright sale, namely that the deed formats were inthe English language. She described the papers she signed inthe following words:

Respondents that they genuinely believed that the transactionwas an assignment by Mr. Kahatapitiya of his rights
which clearly militate against the version of the
large letters, with the space meant for indicating the amountfilled using a typewriter with the figure “8000/=”. Even if oneassumes that the amount had not been filled in at the timethe deed was signed by the Respondents, the deed format inthe Sinhalese language, which they well understood, clearlyshowed that it is an outright sale. The printed deed format
and also include
words such as
refer to the executants as
printed in
with the Sinhalese words
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under Deed No. 4753 (P2), and not an absolute sale of theproperty.
It is also relevant to note that the learned District Judgehas concluded in the light of all the evidence, documentaryand oral, placed before the District Court in the second trial,that the executants as well as the attesting witnesses of theimpugned deeds had placed their signatures on the deeds inthe presence of the notary, and that the said deeds were dulyexecuted. When reversing this decision of the learned DistrictJudge, The Court of Appeal (at page 6 and 7 of the judge-ment) has highlighted the following three factors as lendingcredence to the story of the Respondents that deed No. 4753(P2) was a conditional transfer and signatures on deeds 4879(P3) and 4880 (P4) were obtained in blank sheets before theywere written into deeds on the pretext of assigning the condi-tional transfer P2 to the Appellant:-
The execution of deed No. 4753 of 12th August 1976(P2) as a conditional transfer in the name of son ofKahatapitiya who was a minor, when the respon-dents needed money from Kahatapitiya and expectedKahatapitiya to be the transferee.
Before the defluxion of three years specified in the deed,Kahatapitiya calling for repayment of the loan from therespondents.
Kahatapitiya was found guilty of not forwardingduplicates of deeds and not sending weekly and monthlyreturns to the Registrar General.
The circumstance in which Mr. Kahatapitiya advanceda loan of Rs. 3,500/ – to the Respondents and the 3rd Defendant,utilizing money deposited in a pass book opened in the
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name of his minor son, Yasantha Ajith Kahatapitiya, and theexecution of the deed P2 in his favor was explained byMr. Kahatapitiya when he testified in the first trial (vide page242 of the Appeal. Brief).It is unfortunate that the Districtcourt refused an application to adopt this evidence underSection 33 of the Evidence Ordinance upon the death ofMr. Kahatapitiya being brought to the notice of Court, andI have to add with great respect, that .it is even moreunfortunate that the Court of Appeal concluded thatthese circumstances support the position taken up by theRespondents, without taking into consideration thetestimony of Mr. Kahatapitiya. In fact, he has expresslystated in evidence that he informed the Respondents and the2nd Defendant-Appellant-Respondent that the deed will beexecuted in his son Ajith’s name, which position was deniedin the first trial by the Respondents, but was accepted bythe learned District Judge as credible. It is significant thatAjith who was bom on 13th April 1964, filed his answer dated22nd September 1986 in the District Court after he attainedmajority, and specifically admitted in paragraph 4 of the saidanswer that upon the sum of money advanced by him andinterest been repaid, he had on 24th March 1976 by deedNo. 4879 (P3) re-conveyed title in the property in question tothe Respondents.
In regard to the view expressed by the Court of Appeal,that calling for the repayment of the loan before the expiryof the 3 year period stipulated in P2, supports the positionthat P3 and P4 were fraudulently executed, I say with greatrespect that I cannot agree for several reasons. In the firstplace, Mr. Kahatapitiya has vehemently denied that hedemanded the money within a few months of the executionof P2, and it is his position that the Respondent wanted tosell the property outright as they needed the money. In any
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event, it is unreasonable to attribute to Mr. Kahatapitiya anintention to defraud the Respondents even if he had wantedthe money back before the defluxion of the 3 year period,as any failure on the part of the Respondents to repay thesum advanced with interest within the said period would onlyhave benefited Mr. Kahatapitiya’s minor son, who would havebecome the absolute owner of the property. Furthermore,the fact that Mr. Kahatapitiya was found guilty of failing tocomply with the provision of Section 31 of the NotariesOrdinance is altogether irrelevant to this case for the reasonsalready noted, and in any event, would not affect the validityof deeds P3 and P4 as section 33 of the Notaries Ordinanceexpressly provides that “no instrument shall be deemed to beinvalid by reason only of the failure of any notary to observeany provision of any rule set out in Section 31 in respect of anymatter of form”.
In this connection, it is also relevant to note that theCourt of Appeal has considered the discrepancy in the dateof attestation of deed No. 4880 (P4) as an additional factorthat supports the Respondent’s story that Mr. Kahatapitiyafraudulently fabricated the impugned deed P4. LearnedPresident’s Counsel for the Respondents has highlighted thefact that on the first page of P4 the date of attestation is givenas 24th March 1976, but the attestation clause on the lastpage gives the date as 24th April 1976, the existence of whichdiscrepancy was admitted by witness Upamalika Wijesooriya,a clerk of the Land Registry, Kalutara, who was called to giveevidence by the Appellant himself. However, the said witnesshas produced marked P9 (at page 556 of the Appeal Brief) thedeed attested by Mr. Kahatapitiya bearing No. 4881 which isdated 25th March 1976, which corroborates the evidence ofMr. Kahatapitiya recorded in the first trial (at page 239-240of the Appeal Brief) that the said discrepancy was caused bya “’’typing error” Wijesooriya also produced marked “S2” theRegister maintained at the Land Registry which shows that
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Learned Counsel who appeared for the Respondents inthe original court as well as in the appellate proceedings haveargued that all executants of the impugned deed P4 did notsign the deed at the same time and no consideration passedand that the deed was therefore not duly executed. TheRespondents have testified that when summoned byMr. Kahatapitiya to sign the deed, the 2nd Defendant-Appellant-Respondent stayed at home to look after thesister’s baby and sent his sister, the 1st Defendant-Appellant-Respondent, and his mother, who is the original3rd Defendant, to sign the deed, and that he went toMr. Kahatapitiya’s residence and signed the deed onlyafter they retured home. Although the learned DistrictJudge has dealt with this aspect of the matter, theCourt of the Appeal, surprisingly, has not. During theargument of this appeal, learned President’s Counsel for
deed No. 4880 (P4) was registered on 30th June 1976 aheadof deed No. 4879 (P3) which has been registered only on 8thJuly 1976.
It is significant that in the plaint filed by the Appellantas well as in his testimony, he has stated that the deed P4was executed on 24th March 1976, and even the Respon-dents have admitted the fact that they signed the so called“blank papers” on this date. The only attesting witness whotestified at the second trial, Dharmasena, has also stated inhis evidence that the deed was executed, signed and attestedon 24th March 1976. It is also relevant to note that 2ndDefendant-Appellant-Respondent, Stephen Jayasinghe, hassigned an endorsement across the protocol of P4 to the effect
ecuted on 24th March 1976. None of this material has beenconsidered by the Court of Appeal.
which tends to show that the deed was ex-
that

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It was stressed by Counsel that the omission, on thepart of Dharmasena, to name the 2nd Defendant-Appellant-Respondent, Stephen Jayasinghe, is significant in view ofthe requirement of Section 2 of the Prevention of FraudsOrdinance No. 7 of 1840 that any party making a saleand transfer of immovable property shall place his or hersignature "in the presence of a licensed notary publicand two or more witnesses present at the same time, andunless the execution of such writing deed, or instrumentbe duly attested by such notary and witnesses.” As againstthis, learned President’s Counsel for the Appellant hassubmitted that witness Dharmasena was not questionedspecifically regarding the 2nd Defendant-Appellant-Respon-dent’s presence on that occasion, nor was it put to him incross-examination that he was not present at the time theother two executants placed their signatures on the deed P4.He has invited the attention of Court to the examination inchief of Dharmasena where he had categorically stated thatthe three executants of P4 were present when the contents ofthe deeds were explained to the parties and they placed theirsignatures thereon. The evidence reads as follows :-

the Respondents relied heavily on the following answergiven by Dharmasena, the only surviving attesting witnessto the impugned deed, to a question put to him undercross-examination (at page 570 of the Appeal Brief) withrespect to the persons present at the time of execution of theimpugned deeds-
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I must confess that I cannot fault the learned DistrictJudge for disbelieving the story of the Respondents that the2nd Defendant-Appellant-Respondent did not go with theother executants to sign the deed and remained at home tolook after the sister’s baby, as the 2nd Defendant-Appellant-Respondent who is the bread winner to his family, has beenan active and vigilant individual, who had after discoveringthe alleged fraud committed on them by Mr. Kahatapitiya,had gone by himself to the Land Registry in Kalutara to verifythe situation about the registration of the impugned deed and

Learned President’s Counsel has also emphasized thata few minutes prior to putting the particular question whichelicited the answer on which so much reliance is placed bythe Respondents, he had been asked in cross-examination(at page 569 of the Appeal Brief) about the signing of theimpugned deeds and who were present at that time, andhe had stated that all those whose signatures and thumbimpressions appear in the deeds were present. It is alsosignificant that the learned Counsel for the Respondentsfailed to suggest to the Appellant in cross-examination thatthe 2nd Defendant-Appellant-Respondent was not present atthe time the deeds were signed, in the face of the Appellant’stestimony at page 499 of the Appeal Brief, which was asfollows:-

(at page 565 of the Appeal Brief)
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had also complained to the police about the alleged fraud. Bynature, he is not the type of person who would baby-sit whilehis sister and mother were signing an important deed.
In this context, it is noteworthy that the most importantreason advanced by the Court of Appeal to set aside thedecision of the District Court in the second trial was theinsufficiency of evidence that the monetary considerationfor the execution of the impugned deeds had been paid.It was the position of the Respondents and the original3rd Defendant that no payment was made to them or toMr. Kahatapitiya or his son during the time when they werepresent at the residence of Mr. Kahatapitiya and signed theblank papers. As against this, the Appellants has testifiedthat he took Rs. 8,000/- with him and he paid that sumto the 2nd Defendant-Appellant-Respondent, StephenJayasinghe who paid Rs. 3752/- to Mr. Kahatapitiya andkept the balance sum, which according to my calculationamounts to Rs. 4,248/- . This conflict of testimony presentedthe District Court with two versions, that of the Respondentsthat no money changed hands, and that of the Appellant thatRs. 8,000/- was paid, and the District Court has acceptedthe Appellant’s version as the more plausible, only to bereversed by the Court of Appeal.
The Court of Appeal has highlighted the admission madeby witness Dharmasena that while he was at the residence ofMr. Kahatapitiya, he did not observe any monetary transac-tion. At page 577 of the Appeal Brief, Dharmasena answeredthe question put to him as follows:-

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The Court of Appeal has in its judgment stressed thatthis evidence is contradictory to the attestation clausesin deeds No. 4879(P3) and 4880 (P4), which state thatconsideration passed in the presence of the notary. LearnedPresident’s Counsel for the Respondents has referred us tothe decision in E.A. Diyes Singho v. E.A. Herath.,,29), whereT.S. Fernando J observed at 494-495 that he is "unable toagree that proof of the existence of a statement in the deed orinstrument by the notary that consideration was paid is suf-ficient to establish the truth of the payment of such consid-eration”, in the context of a case involving the issue of priorregistration in which proof of valuable consideration was in-dispensable for a subsequent deed to receive priority. Consid-eration may not be an ingredient to prove “due attestation”,but in a case such as this, where the question is whetherthe execution of the impugned deeds was tainted with fraud,proof of payment of the amounts stated as consideration forthe execution of the deeds may be equally relevant.
However, it is necessary to bear in mind that according toDharmasena, he was present at Mr. Kahatapitiya’s residenceonly for about 15 minutes, and that he left the place soonafter the deeds were signed. The evidence of the Appellant (atpage 523) of the Appeal Brief) which is quoted below is thatDharmasena came while the deeds were being prepared.

According to the operative part of Deed No. 4880 theRespondents and the 3rd Defendant have acknowledged
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receipt of Rs. 8,000/-. Since it is in evidence that Dh'armasenacame to Mr. Kahatapitiya’s residence while the deed wasbeing prepared, it is possible that the consideration waspaid before his arrival at a time when the deeds were beingprepared or even prior to that. It is therefore unfortunate thatthe Court of Appeal did not consider that possibility as well asthe evidence of Mr. Kahatapitiya led at the first trial that theconsideration was paid in his presence, and the testimony ofthe Appellant to the same effect. It is also significant to notethat the Appellant has categorically stated in evidence that hepaid the money to the 2nd Defendant-Appellant-Respondenton the date of execution of the deed, and that the Respon-dents have failed to put to him in cross-examination that thisposition is false, if that be the case.
I find it difficult to believe the story of the Respondentsthat they signed the deed papers intending to transfer rightsand obligations of Mr. Kahatapitiya under P2 to the Appellantand that no money was paid to them, when the word”Sste>ffite>dc3" was prominent in the papers they signed andthey were aware that the land was surveyed by surveyorPremaratne a short time before, which should have madethem realize that what was taking place was an outrightsale. It is, in my view most likely that it is the prospect ofgetting approximately Rs. 4,248/- from the Appellantthat motivated the Respondents and the 3rd Defendant torespond so readily to Mr. Kahatapitiya’s request to come tohis residence and sign the deed P4. It is also probable, thatas claimed by the Appellant, the money was paid to the 2ndDefendant-Appellant-Respondent, which also explains thenecessity for the Respondents to make up a story that the 2ndDefendant-Appellant-Respondent was prevented from beingpresent when they signed the deed as he had to look after hissister’s baby.
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It is my considered opinion that the Court of Appealshould have taken into consideration the evidence ofMr. Kahatapitiya led at the first trial (at page 240 of the Ap-peal Brief) that the 2nd Defendant-Appellant-Respondent waspresent at the time of exchanging the deeds, and that he ac-cepted the consideration. The Respondents had not suggestedto Mr. Kahatapitiya when he testified at the first trial that the2nd Defendant-Appellant-Respondent was not present alongwith the other executants at the time of the execution of theimpugned deeds. The Respondents have clung onto a verysmall part of the evidence of Dharmasena to assert that 2ndDefendant-Appellant-Respondent was not present at the timeof the execution of the deeds, whereas on a consideration ofthe totality of the evidence it appears to be more likely thannot that all three executants of P4 along with Yasantha AjithKahatapitiya who was the executant of P3 were present, andthere was due attestation and execution of both deeds P3and P4 as required by section 2 of the Prevention of FraudsOrdinance. The Court of Appeal, when applying the standardof balance of probability to the facts in issue in this case, hasalso failed, in my view, to bear in mind the principle that themore serious the allegation the stronger the evidence thatis required to establish the allegation, a matter which is ofgreat importance in a case where the parties who have placedtheir signatures on deed formats, albeit with some blanks,are claiming that they have been defrauded by the notary.
An important submission that was made by learnedPresident’s Counsel for the Appellant is that the decision ofthe Court of Appeal that the Appellant has failed to prove dueexecution of the deeds P3 and P4 would have the effect ofreviving the title of Yasantha Ajith Kahatapitiya to the prop-erty in question. This, no doubt would be altogether absurdas the latter has filed answer and got himself discharged from
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the action on the basis that he has no claim as he conveyedhis title to the Respondents through P3. None of the Respon-dents nor any other party has prayed for the setting aside ofthe deed P2 by which the Respondents and the original 3rdDefendant have conveyed title to Yasantha Ajith Kahatapitiya,and in view of the defluxion of the 3 year period precedent forthe re-conveyance, the latter will become the absolute ownerof the property, unless the decision of the Court of Appeal isset aside.
While I am compelled by the foregoing to disagree withthe assessment of the evidence made by the Court of Ap-peal and its ultimate decision, in doing so, I take comfort inthe following oft-quoted words of Viscount Simon from thedecision of the House of Lords in Watt v. Thomas<301 at 583which were cited with approval by the Privy Council inMunasinghe v. Vidanage:1311 –
“an appellate Court has, of course, jurisdiction
to review the record of the evidence in order to determinewhether the conclusion originally reached upon thatevidence should stand; but this jurisdiction has to beexercised with caution. If there is no evidence to supporta particular conclusion (and this is really a question oflaw) the appellate court will not hesitate so to decide. Butif the evidence as a whole can reasonably be regardedas justifying the conclusion arrived at the trial, and es-pecially if that conclusion has been arrived at on con-flicting testimony by a tribunal which saw and heard thewitnesses, the appellate Court will bear in mind that ithas not enjoyed this opportunity and that the view of thetrial judge as to where credibility lies is entitled to greatweight. This is not to say that the judge of first instancecan be treated as infallible in determining which side is
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telling the truth or is refraining from exaggeration. Likeother tribunals, he may go wrong on a question of fact,but it is a cogent circumstance that a judge of first in-stance, when estimating the value of verbal testimony,has the advantage (which is denied to Courts of Appeal) ofhaving the witnesses before him and observing the man-ner in which their evidence is given”.
In this case, which was commenced in the District Courtof Kalutara more than 3 decades ago, there have been twotrials, and both trial judges have come to the same conclu-sion in what I would regard as essentially the same factualscenario, even though the stories of the two sides wereunraveled through different witnesses. The Court of Appealhas in this case failed to observe the time tested principleenunciated by James L. J. in The Sir Robert Peel,{32) at 322 whichwas quoted with approval by Viscount Sankey L. C in Powelland Wife V. Streatham Manor Nursing HomeP3) at 248, thatan appellate court –
“will not depart from the rule it has laid down that it willnot over-rule the decision of the Court below on a ques-tion of fact in which the Judge has had the advantageof seeing the witnesses and observing their demeanourunless they find some governing fact which in relation toothers has created a wrong impression.”
I am of the opinion that in this case too the District Courthad to choose between two conflicting versions of facts on thebasis of credibility or demeanor of the witnesses who testifiedat the trial, and the circumstances outlined by the Court ofAppeal to differ from the decision of the District Court were,with great respect, neither substantiated by the totality of theevidence presented in the case nor sufficiently convincing.In the factual context of this case, I therefore hold that the
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Appellant has discharged the burden placed on him by lawto prove the due execution of the impugned deeds, and theRespondents have failed to discharge the burden placed onthem by law to establish that P4 was executed fraudulently.
For the foregoing reasons, I am of the opinion that thetwo questions on which special leave to appeal has beengranted should be answered in the affirmative. Accordingly, Iallow the appeal, vacate the judgment of the Court of Appealappealed from and affirm the judgment of the District Courtdated 16th June 1993. I make no order for costs of appeal inall the circumstances of this case.
S. N. SILVA, C. J. – I agree
TILAKAWARDANE, J. – I agree
Appeal Allowed.
The Judgment of the Court of Appeal set aside. The Judgmentof the District Court dated June 16th, 1993 affirmed.