GUNAWARDENE AND WIJESOORIYA v. MINISTER OF LOCAL GOVERNMENT, HOUSING AND C

025-SLLR-SLLR-1999-V-2-GUNAWARDENE-AND-WIJESOORIYA-v.-MINISTER-OF-LOCAL-GOVERNMENT-HOUSING-AND-C.pdf


SC Gunawardene and Wijesooriya v. Minister of Local, Government,
Housing and Construction and Others263
GUNAWARDENE AND WIJESOORIYA
v.MINISTER OF LOCAL GOVERNMENT, HOUSING ANDCONSTRUCTION AND OTHERS
SUPREME COURTDHEERARATNE, J.,
WADUGODAPITIYA, J. ANDGUNAWARDANA, J.
S.C. APPEAL NO. 55/97 WITHS.C. APPEAL NO. 56/97C.A. NOS. 453/86 AND 489/86JUNE 18 AND JULY 10, 1998
Writ of Certiorari – Divesting of a house – Section 17A of the Ceiling on HousingProperty Law, No. 1 of 1973 – Appeal to the Board of Review – Section39 of the Law – Duty of the Commissioner to communicate to the parties thedecision to divest – Natural justice.
In terms of section 8 of the Ceiling on Housing Property Law, No. 1 of 1973,the 3rd respondent declared that premises Nos. 41 1/2 and 43 2/2, Gregory'sRoad, Colombo 07, were “surplus houses" of which he did not wish to retainownership. The 3rd respondent gave notice to the petitioners of that declaration.The petitioners who were tanants of the said premises which had since vestedin the Commissioner of National Housing (2nd respondent) applied to the Com-missioner with notice to the 3rd respondent in terms of the Law to purchase thepremises. The Commissioner entertained the applications. Consequently, thepetitioners signed agreements whereby the Commissioner agreed to sell thepremises to the petitioners. As directed by the Commissioner, the petitionerscommenced making monthly payments towards the purchase price to the Com-missioner. They also paid all municipal rates and taxes due on the said premises.
However, in 1976 the 3rd respondent applied to the Commissioner for a divestingof the ownership of the premises under section 17A of the Law.The Commissioner refused the application. An appeal by the 3rd respondentwas disallowed by the Board of Review. In 1979 a further application wasmade by the 3rd respondent for a divesting of the premises. This too wasrefused by the Commissioner. The 3rd respondent did not appeal therefrom tothe Board of Review. In 1981, the 3rd respondent made yet another application,for a divesting of the premises. That application was inquired into despite objections
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by the petitioners. Thereafter, the Commissioner decided to divest himself of theownership of the two premises and with the prior approval of the 1st respondent(the Minister) by order published in the Gazette No. 365 dated 30.8.85 divestedhimself of the ownership of the premises. By letters dated 18.2.86 the Commis-sioner notified the petitioners of the divesting.
Held:
The petitioner had duly applied to the Commissioner under section 9of the Law to purchase the premises. Hence, they had locus standito seek writs of certiorari (Perera v. Karunaratne (1997) 1 Sri LR 148distinguished)
The Commissioner failed to communicate his decision to divest himselfof the ownership of the premises prior to obtaining the Minister's approvalfor such divesting in terms of s. 17A of the Law. Such failure deprivedthe petitioners their right to appeal to the Board of Review under section39 of the Law against the Commissioner's decision. That failure occasioneda breach of the principles of natural'justice. It followed that the impugneddivesting order is null and void.
Per Wadugodapitiya, J.
"It appears that in terms of section 39 (3) of the Law, thedetermination of the Board of Review upon the appeal made by the3rd respondent in respect of his first application to divest was finaland that the 2nd respondent was wrong to have entertained the 3rdrespondent's second and third applications for divesting."
Cases referred to:
Perera v. Karunaratne (1997) 1 Sri LR 148.
Caderamanpulle v. Pieter Keuneman SC appeal No. 15/79 SC minutes19 September, 1980.
Julian v. Sirisena Cooray (1993) 1 Sri LR 238.
APPEAL from the judgment of the Court of Appeal.
P. A. D. Samarasekera, PC with Keerthi Sri Gunawardena for . the appellant.K. Sripavan, DSG for the 1st and 2nd respondents.
Romesh de Silva, PC with Palitha Kumarasinghe for the 3rd respondent.
Cur. adv. vult.
SC Gunawardene and Wijesooriya v. Minister of Local Government,
Housing and Construction and Others (Wadugodapitiya, J.)265
March 9, 1999.
WADUGODAPITIYA, J.
It is regretted that the delay in writing this judgment was due to mattersbeyond my control. The briefs were misplaced and thejudgment has been written no sooner they were found.
It was agreed that both these appeals be taken up for hearingtogether, since, expect for the identity of the premises, the factsare identical.
The appellants in both these appeals were the tenants of premisesNos. 41 2/2 and 43 2/2, Gregory’s Road, Colombo 7; of both ofwhich, the 3rd respondent was the owner on the date of commence-ment of the Ceiling on Housing Property Law, No. 1 of 1973 (theLaw). . . In terms of section 8 of the above Law, the 3rd respondentdeclared both premises as "surplus houses" which he (3rd respondent)did not wish to retain ownership of. The 3rd respondent gave noticeto the two petitioners of the above declaration. Thereupon, bothpetitioners made applications in terms of the Law, to the 2nd respond-ent, with notice to the 3rd respondent (which the 3rd respondent doesnot deny), for the purchase of premises Nos. 41 2/2 and 43 2/2,Gregory's Road, Colombo 7, which had now vested in the 2ndrespondent. It is important to point out that the 2nd respondent filedaffidavits in the Court of Appeal, which affidavits have been markedA9 and A7, respectively. According to these affidavits, the 2nd re-spondent admits in paragraph 5 thereof that applications were madeto him by the petitioner for the purchase of the premises in question.Thereafter, the said premises were offered by the 2nd respondent tothe petitioners for purchase, which offer was accepted by the peti-tioners; in pursuance of which, on 18.3.77, the 2nd respondent purportedto enter into Agreements of Sale with the petitioners for the sale tothem of the said premises, and, as directed by the 2nd respondentthe petitioners duly made the requisite monthly payments towards thepurchase price to the 2nd respondent (which he accepted and ac-knowledged) and also paid all Municipal rates and taxes to the
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Colombo Municipal Council. Although these directions were given, the2nd respondent whilst not denying the existence of the Agreements,says that the said Agreements of Sale were, however, not signed byhim or by any of his officers. It appears, however, that the 2ndrespondent in fact offered the premises to the appellants for purchase,whereupon they accepted the said offer and, at the office of the 2ndrespondent, signed their respective Agreements in the presence oftwo witnesses each, for the purchase of the premises. The 2ndrespondent however has not signed the Agreements, but has acceptedall payments made by the appellants towards the purchase/price andissued the necessary receipts therefor. His not signing the Agreementsis, of course, his own fault and not that of the petitioners, and thepetitioners cannot be made to suffer for this omission on the part ofthe 2nd respondent.
However, all this notwithstanding, it appears that in 1976 the 3rdrespondent made an application to the 2nd respondent to divestownership of the said premises under section 17A (1) of the Law,which application was refused by the 2nd respondent. The 3rd re-spondent thereupon appealed to the Board of Review which disallowedthe appeal and upheld the order of the 2nd respondent. Undaunted,the 3rd respondent in 1979, made a further application to the 2ndrespondent to divest ownership of the said premises under section17A (1) of the Law. This too was refused by the 2nd respondent.The 3rd respondent did not appeal therefrom to the Board of Review.It, however, appears that by letter dated 8.7.81, the petitioners wereinformed that the 3rd respondent had made yet another applicationto the 2nd respondent to divest ownership of the premises and furtherthat the 1st respondent would hold an inquiry on 25.8.81 todetermine whether the ownership of the premises should be divested.In this connection, it appears that in terms of section 39 (3) of theLaw, the determination of the Board of Review upon the appealmade by the 3rd respondent in respect of his first application todivest was final and that the 2nd respondent was wrong to have evenentertained the 3rd respondent's second and third applications fordivesting. The petitioners on their part objected to the holding of suchan inquiry. This, however, was not a matter on which leave to appealwas granted in the instant Appeals.
SC Gunawardene and Wijesooriya v. Minister of Local Government,
Housing and Construction and Others (Wadugodapitiya, J.)267
After unsuccessful litigation by the petitioners (in the Courtof Appeal Applications Nos. 958/81 & 963/81) to stop the 2ndrespondent from holding the inquiry and to give effect to the termsof the Agreements of Sale between the petitioners and the 2ndrespondent, the inquiry into the question of divesting the premisescommenced. The petitioners state that the reasons set out by the3rd respondent requesting divesting were never made known to themalthough they asked for them. Written submissions were tenderedby both parties and the petitioners continued to make their paymentsto the 2nd respondent for which official receipts were issued.Thereafter, the petitioners received letters dated 18.2.86 (A5 and A3)from the 2nd respondent informing them that the premises had beendivested. The relevant Gazette notification appeared in GazetteNo. 365 of 30.8.85 (A6 and A4), stating, inter alia, that the divestinghad been done "with the prior approval of the Minister" (1R).
It appears that although the Gazette is dated 30.8.85, the lettersof the 2nd respondent notifying the petitioners of the divesting aredated 18.2.86.
The petitioners complain that as the decision of the 2nd respondentto divest was not communicated to them by the 2nd respondent(prior to obtaining the Minister's approval, and prior to the publicationof the order in the Gazette) they were deprived of their statutoryright to appeal to the Board of Review under section 39 of the Law.
They, thereupon, made applications to the Court of Appeal forwrits of Certiorari to quash the orders of the 2nd respondent •divesting the said premises.
Before the Court of Appeal, the 2nd respondent, in paragraphs12 and 13 of his affidavits, admitted that his decision to divestwas not communicated to the petitioners before publication in theGazette and went on to state: “ I consent to have the documentsmarked P3 and P4 (now A5 and A3 and also A6 and A4) quashedby Your Lordships' Court".
It is of significance also, that the 3rd respondent (the owner)in his affidavits in the Court of Appeal himself agrees with the 2nd
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respondent and says, °l agree with the averments contained inparagraphs 12 and 13 of the affidavit of the 2nd respondent". Thus,both the 2nd and 3rd respondents consented to the quashing of thedivesting Order. This is precisely what the two petitioners had askedthe Court of Appeal to do. However, this notwithstanding the Courtof -Appeal dismissed both applications, on the grounds that:
■ (a) "the petitioners have no legal right to have been informedof the reasons/decisions of the Commissioner to divestthe said premises,"
"Nor have they any legal rights which could be enforcedby an appeal from such a decision to the Board ofReview", and
the 2nd respondent has exercised his statutory authoritylawfully,
in terms of the decision in Perera v. Karunaratne (post),the applications had to be dismissed.
Having erroneously found as a fact that, "Admittedly they (theappellants) have not made applications to purchase the premisesunder section 9 of the Law", the learned Judge of the Court of Appealproceeded to base himself on the decision in Perera v. Karunaratne(which I shall advert to later, and which in my view does not applyto the appeals before me) and hold against the appellants.
The appellants appealed to this Court against the decision of theCourt of Appeal upon the following main grounds:
the failure of the 2nd respondent to communicate his decisionor determination in respect of the 3rd respondent's applicationto divest the ownership of the premises after inquiry and, beforeseeking the approval of the 1st respondent in terms of section17A (1) of the Law; was wrong in law.
SC Gunawardene and Wijesooriya v. Minister of Local Government,
Housing and Construction and Others (Wadugodapitiya, J.)269
the consequential depriving and denial to the appellants of theirstatutory right of appeal to the. Board of Review against any"decision or determination of the Commissioner" was a violationof their statutory right of appeal;
the 2nd respondent divested the ownership of the premises onlyupon the 3rd application of the 3rd respondent, which he hadno power to do, having refused the first two applications. Theappellants complain that the learned Judge of the Court ofAppeal did not deal with this matter at all; and
the Court of Appeal had. erroneously proceeded on the basisthat although the premises were declared to be surplus, theappellants had not made any applications for the purchase ofthe said premises, .despite the express admission by the 2ndrespondent in his affidavits where he states: “I only admit thatan application was made to me by the petitioner for the purchaseof the premises in question".
The 3rd respondent on the other hand prays that the appeals bedismissed for the reason that:
the appellants have not made any application to the 2ndrespondent for the purchase of the premises within the timeprescribed in section 9 of the Law, (viz within 4 months of thecommencement of the Law) and that, therefore, the appellantshave no locus standi to make an application for Writs ofCertiorari, and
that the decision of the 2nd respondent to divest was dulycommunicated to the appellant by a writing dated 18th February,1986, by the 2nd respondent and therefore the appellants couldhave appealed to the Board of Review under section 39 ofthe Law.
Special leave to appeal was granted by this Court in respectof the following questions only:
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Was there evidence that the tenant had made an applicationin terms of section 9, and if not, had he locus standR
Was the Court of Appeal in error when it held that the petitioneradmittedly had not applied for the purchase of the premises,and thereupon proceeded to hold that the petitioner had no rightto be informed of the Commissioner's decision to divest?
Was the Commissioner under a duty to communicate the factof divesting to the petitioner?
Was the Commissioner under a duty to communicate his orderto divest under section 17(A), to the petitioner?
If so, has there been a failure to communicate such decisionto the petitioner?
What was the order which was required to be communicatedto the parties?
If I may first take up questions Nos. 1 and 2 above, itappears that the most important matter upon which the learned Judgeof the Court of Appeal proceeded, was his erroneous finding of factthat, "Admittedly they (the apellants) have not made applicationsto purchase the premises under section 9 of the Law;" theconsequence being that they had no locus standi to question thevalidity of the 2nd respondent's decision to divest.
He does not say, however, where or in what context or by whomthis alleged admission was made. Nowhere were we able to find anysuch admission; nor was learned President's Counsel able to enlightenus as regards this mystery. Certainly, it is clear that neither of theappellants has stated anywhere that they ever made any such admission.On the contrary each of the appellants stoutly maintains that, "I dulymade application to the Commissioner of National Housing (2ndrespondent) with simultaneous notice to the 3rd respondent for thepurchase of premises No. 41 2/2, (and No. 43 2/2) Gregory's Road,Colombo 7" (paragraph 5 of appellant's affidavit). By way of answer,
SC Gunawardene and Wijesooriya v. Minister of Local Government,
Housing and Construction and Others (Wadugodapitiya, J.)271
the only other person who would know about this matter (viz the 2ndrespondent) says in paragraph 5 of his affidavits: "Answering theaverments contained in paragraph 5 of the affidavit (of the appellants),I only admit that an application was made to me by the petitionerfor the purchase of the premises in question." (The numbering ofthe paragraphs in the appellant's affidavit in the Court of Appeal isthe same). The 3rd respondent, in his affidavits refrains from answer-ing the said paragraph 5. In any event he does not deny it; nor doeshe seek to question or cast doubts upon it. Further, it appears thatthe 2nd (Respondent has expressly admitted the, averments of theappellants where the latter state: "Thereafter the said house wasoffered by the 2nd respondent for purchase, which offer was acceptedby me". In any event, it is clear that nowhere has the 2nd respondentstated that the said applications were defective or invalid or, not dulymade, or that they were found wanting in any particular in terms ofsection 9 of the Law. The contrary seems to be the true state ofthings, where the said applications were in fact accepted by the 2ndrespondent, and were followed up with Agreements to Sell, which weredrawn up by him and signed by the appellants in his office beforethe necessary witnesses, but which he himself neglected to sign.Payments as directed by the 2nd respondent towards the purchaseprice were also made by the appellants and accepted by the 2ndrespondent who issued official receipts therefor. All these steps werequite unnecessary and uncalled for if the appellants had not madethe requisite applications to purchase the premises.
What appears to have happened seems to be that the learnedJudge of the Court of Appeal, having erroneously found as afact that, "Admittedly they (the appellants) have not made applicationsto purchase the premises under section 9 of the Law.", proceededto base himself on the decision in Perera v. Karunaratne (supra)and held against the appellants. It appears that the facts in theabove case (otherwise known as the Baur's case) were quite differentto those in the instant case. In the Baur's case, the tenants ofthe Flats in question had not made applications to the Commissionerof National Housing to purchase any of the Flats (except for one whoapplied, not to the Commissioner, but to the Board of Review nearly8 years after the stipulated four months). Further, the Flats had not
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been offered for sale by the Commissioner to any of the tenants andnone of them was making any payments to the Commissioner towardsthe purchase price. On the contrary, the tenants continued to paytheir monthly rent to their landlord. In the circumstances the Courtrightly held that the tenants had no locus standi to question the validityof the Commissioner’s decision. All they had were rights of tenancy.They had no legitimate expectation of becoming owners of the Flats.It is thus quite clear that Baur's case is quite different, and has noapplication to the two Appeals before us. The Court of Appeal wasin error in holding lhat the decision in Baur's case applied to theapplications before him, and erred in adopting the following dictumfrom that case, viz "In the absence of proper applications before him,the 1st respondent (Commissioner) was under no administrative dutyto notice the appellants or- give them a hearing prior to divesting",(emphasis mine). But having done so, and despite the fact that therewere in fact two applications, the Court of Appeal in the instant cases,went on to hold as follows: "Thus, the petitioners have no legal rightto have been informed of the reasons/decisions of the Commissionerto divest the said premises. Nor have they any legal rights whichcould be enforced by an appeal ffom such a decision to the Boardof Review". This conculusion is" clearly wrong.
Therefore, for the reasons set out above, I hold:
that the appellants in these two cases did in fact makeapplications to purchase the said premises and that they werein conformity with the law as set out in section 9 of the Law;
that the appellants did have locus standi to file applicationsfor Writs of Certiorari;
that the Court of Appeal erred when it held that the petitionersadmittedly had not made applications to purchase the premises,and proceeded to hold that the petitioners had no right to beinformed of the 2nd respondent's decision to divest.
SC Gunawardene and Wijesooriya v. Minister of Local. Government,
Housing and Construction and Others (Wadugodapitiya, J.)273
I now turn to the other questions on which leave to appeal wasgranted.
As referred to earlier, the learned Judge of the Court of Appealheld (inter alia) that the petitioners did not have "any legal rights whichcould be enforced by an appeal from such a decision to the Boardof Review". In other words, in the mind of the learned Judge of theCourt of Appeal, no question of a right to appeal to the Board ofReview ever accrued to the appellants, and section 39 of the Lawdid not therefore apply to them. Thus, if they had go right of appeal,then it followed that they had no right' to be told of the decision ofthe 2nd respondent, and so, the 2nd respondent was under no dutyto inform the appellants of his decision to divest. I am unable to agreewith this line of reasoning of the Court of Appeal which stems fromthe erroneous application to these appeals before us, of the decisionin Baur's case.
As set out above, V/hat Baur's case was, "In the absence ofproper applications before him, the 1st respondent (Commissioner)was under no administrative duty to notice the appellants . . .prior to divesting". In the instant Appeals there were in fact twoapplications and, it would follow that the 2nd respondent was indeedunder a duty to inform the appellants of the fact that he had takena decision to divest. In fact, the dictates of the principles of naturaljustice would demand as much. The facts clearly show that theappellants did in fact have a legitimate expectation of purchasing thepremises in question and that a decision to divest would have affectedthem adversely. It is also clear that they had locus standi to questionthe validity of the 2nd respondent's decision to divest, and thereforewere clothed with a right of appeal to the Board of Review undersec. 39 of the Law. Thus, if the 2nd respondent refrained frominforming the appellants, they would surely be deprived of theirlegitimate right of appeal.
The 2nd respondent in fact admits that he did not inform theappellants of his decision to divest, when in paragraph 12 of hisaffidavits he says: “I admit the averments contained in paragraph 25of the affidavit (of the appellants) and state that the decision to divest
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the premises in question has not been communicated to the petitionerbefore such order was Gazetted"
It is clear then, that there has in fact been a failure to communicate,and that this failure has resulted in the appellants being deprivedof their right to appeal to the Board of Review under section 39of the Law. I am of the view, therefore, that the 2nd respondentwas indeed under a duty to inform the appellants of his decision todivest, so as to enable them to appeal.
In fact, it has been held that the Commissioner is under a dutyto inform the parties of his decision to notify the Minister, so thatany party may exercise his right of appeal to the Board of Review.The failure to so inform the parties rendered the Commissioner’snotification to the Minister and the subsequent vesting null and void.Caderamanpulle v. Pieter KeunemanP1.
The case of Julian v. Sirisena Cooray43' is of much relevance inthis connection. Here, the Commissioner of National Housing, afterinquiry, made a decision not to vest the premises in question; thuspreventing the appellant (tenant) from purchasing it. He made hisrecommendation to the Minister accordingly, whereupon the latterhaving agreed, decided not to vest the premises, and made orderaccordingly, rejecting the appellant's application. It was only thereafterthat the Commissioner informed the appellant by letter, of the Min-ister’s decision to reject his (appellant's) application. What is ofimportance is the fact that after the Commissioner made his decisionnot to vest the premises, he had failed to communicate such decisionto the appellant before making his recommendation to the Ministeragainst the vesting. Agreeing with and following the decision inCaderamanpulle v. Keuneman, the Court held that such failure oniri^ part of the Commissioner to communicate his own decision tothe appellant vitiates the decision of the Minister to reject theappellant's application. Accordingly, the Court quashed the order ofthe Minister, and directed the Commissioner to communicate his own
SC Gunawardene and Wijesooriya v. Minister of Local Government,
Housing and Construction and Others (Wadugodapitiya, J.)275
decision to the appellant to enable the appellant to prefer anappeal to the Board of Review in terms of section 39 of the Lawif he so desired.
therefore, hold that the 2nd respondent was in fact under a dutyto communicate his decision to divest to the appellants beforeobtaining the 1st respondent's approval and that his failure to havedone so has occasioned a failure on his (2nd respondent's) part toobserve the principles of natural justice and was clearly wrong. Itfollows, and I so hold, that the subsequent divesting order by the2nd respondent (A6 and A4) is null and void.
I must, before concluding, make reference once more, to paragraph13 of the 2nd respondent's affidavits, in which he says : "Answeringthe averments contained in paragraph 26 of the affidavit (of theappellants), I state that I consent to have the documents marked P3and P4 (A5 and A3 and also A6 and A4) in the appeals before us)quashed by Your Lordships' Court”. (Letters A5 and A3 dated 18.2.86,inform the appellants that the two premises in question have alreadybeen divested and that the divesting order has been published inGazette No. 365 of 30.8.85; which Gazette is marked A6 and A4).The 2nd respondent continued to maintain this position at the hearingbefore us, and learned DSG appearing for him consented to thequashing of A5 and A3 and also A6 and A4.
Thus, the 2nd respondent of his own volition admits to his havingmade a mistake and consents to its being rectified, and, it is of nosmall significance that even the owner of the premises (3rdrespondent) agrees, when he says in paragraph 4 of his affidavits:"I agree with the averments contained in paragraphs 12 and 13 ofthe affidavit of the 2nd respondent". This, notwithstanding, learnedPresident's Counsel for the 3rd respondent stoutly resisted the quashingof A5 and A3, and also A6 and A4, and strenuously contestedthese two appeals before us, insisting that they be dismissed, whichsubmission, I have, of course, found to be without merit.
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For the reasons aforesaid :
I set aside the judgment of the Court of Appeal dated 30.4.96and allow both appeals;
I issue a mandate in the nature of a Writ of Certiorari quashingthe order of the Commissioner of National Housing (2ndrespondent) divesting himself of the ownership of premisesNos. 41 2/2 and 43 2/2, Gregory' 's Road, Colombo 7, whichorder is published in, Government Gazette No. 365 of 30.8.85(marked A6 and A4) respectively, and
I direct the 2nd respondent to communicate to each of theappellants forthwith, his decision to divest (in respect of premisesNos. 41 2/2 and 43 2/2, Gregory's Road, Colombo 7) to enablethe appellants to appeal to the Board of Review in terms ofsection 39 of the Law, if they so desire.
The appellants in both appeals will be entitled to their costs payable
by the 3rd respondent.
DHEERARATNE, J. – I agree.
GUNAWARDANA, J. – I agree.
Appeals allowed; certiorari issued.