construction of a power of attorney- LAW APPLICABLE
S.C.
Appeal No. 44/2012
SC.(HC) CALA Application No. 68/11
WP/HCCA/Mt./36/04(F)
DC. Moratuwa No. 335/L
Padmal
Ariyasiri Mendis
Vs.
Vijith Abraham de Silva,
|
BEFORE
|
|
:
|
Eva Wanasundera, PC. J
|
|
|
|
|
Buwaneka Aluwihare, PC.J.
&
|
|
|
|
|
Upaly Abeyrathne, J.
|
|
COUNSEL
|
|
:
|
Faisz Musthapha, PC. with
Hemasiri Withanachchi and
Ashiq Hassim for the
Defendant-Appellant-PetitionerAppellant.
Ranjan Goonaratne
with Sampath Perera and Rasika Dissanayake for the
Plaintiff-Respondent-RespondentRespondent.
|
|
ARGUED ON
|
:
|
21.09.2015
|
|
|
DECIDED ON
|
:
|
14.12.2015
|
|
* * * * * * *
S.C. Appeal
No. 44/2012
Eva Wanasundera, PC.J.
This Court granted Leave to Appeal in this matter on
22.02.2012 on 10 questions of law. They
are as follows: -
1.
Did the Provincial High Court Civil Appeal err
holding that the Deed of Gift bearing No. 1551 dated 09.05.1990 marked P2, was
void?
2.
Have the Honourable High Court Judges failed to
properly consider whether the said Power of Attorney bearing No. 376 authorized,
permitted and empowered the said Lindamulage Srimathie Miriam Silva to gift the
premises which was the subject matter of the action?
3.
Did the Honourable High Court Judges misdirect
themselves in failing to consider that in action bearing No. 704/L of the
District Court of Panadura, the said Merlyn Sylvia Fernando, (the Petitioner‟s
vendor) fraudulently, wrongfully and unlawfully failed and neglect to warrant
and defend the title acquired by her and conveyed to the Petitioner?
4.
Did the Honourable High Court Judges err in
holding that the judgment and decree entered in the said case bearing No. 704/L
operated as res judicata against the Petitioner in as much as the said judgment
and decree are vitiated by fraud?
5.
Did the Learned District Judge and the Learned
Judges of the High Court misdirect themselves in failing to consider that the Respondent’s
claim to have the said deed bearing No. 976 dated 24.09.1991 and produced
marked P4 was not maintainable in as much as the action has been instituted
nine years after the execution of the said deed and as such was prescribed?
6.
Did the Learned Judges of the High Court err in
failing to consider that the Respondent had acquiesced in, and/or ratified, the
execution of the said deed
of gift and the transfer to the Petitioner and as such was
estopped from seeking the reliefs prayed for in the plaint?
7.
In any event, did the Learned Judges of the High
Court err in not granting the Petitioner adequate compensation for the
improvements effected by him?
8.
Did the Honourable High Court Judges failed to
consider in the circumstances of this case that the Respondent had held out
that the said Srimathie Mirium Silva had authority to gift the premises in
suit?
9.
Has the Court dealt with the fact that the Defendant
is a bona fide purchaser?
10. Has
the issue of prescription been pleaded?
The subject matter is a land within the Municipal Council
limits of Moratuwa of an extent of two roods and 33 perches (A0 R2 P33) with a
house thereon and a cultivation of 137 teak trees. The Plaintiff-Respondent-Respondent
(hereinafter referred to as the „Plaintiff‟‟) who is now deceased was the owner
of this land and premises. He went
abroad on employment giving a general Power of Attorney to his wife Miriam
Srimathie Silva in 1984. Incidentally he
had two children by this marriage. He
visited home from time to time and returned to the island on 16.08.1990 to
stay. While he was away,
Mirium Silva used the Power of Attorney and gifted the land
to Miriam Silva‟s mother Sylvia Fernando.
When the Plaintiff came to know about this gift of his land to the
mother-in-law, he questioned his wife
as to why she did so when they had two children to receive their
properties. The Plaintiff then filed
action No. 704/L in the District Court of Panadura on 27.09.1991 against his
wife and mother-in-law seeking a declaration of the said deed of gift No. 1551
to be null and void. By this time the
husband and wife were estranged due to the wife’s action of gifting this
property to the mother-in-law. In the meantime,
the mother-in-law Sylvia Fernando sold the said property to the
Defendant-Appellant-Petitioner-Appellant (hereinafter referred to as the
Defendant) Vijith Abraham de Silva, who was known to the Plaintiff also as a
timber merchant. The said sale was by
deed No. 976 dated 24.09.1991 which was only 3 days before the District Court Action
No. 704/L was filed by the husband, Plaintiff.
In deed No. 976, the vendor was Merlyn Sylvia Fernando and as one
witness, the wife of the Plaintiff, Miriam Srimathie Silva had signed. The Plaintiff claimed that the teak trees
that he had planted, worth over 10 ½ lakhs of rupees was about to be felled by
the Defendant and the house thereon had been already demolished by the
Defendant. The Defendant claimed that he
planted teak seedlings/or saplings which had cost him Rs. 40,000/- and claimed
the cost of improvements done to the property.
The first question to be decided in this case is whether
the Plaintiff’s wife Mirium Srimathie Silva acted within her powers in having
gifted the property to her mother, under the Power of Attorney given to her by
her husband, the Plaintiff. The
Plaintiff argued that she had acted beyond the powers given in terms of the
Power of Attorney. The Defendant argued
that she had acted within the terms of the Power of Attorney and the general
words appearing in the Power of Attorney conferred unlimited authority to manage
all the affairs of the Plaintiff husband while he was away.
The Plaintiff had given evidence in the case. He had prayed for deed No. 1551 to be
declared null and void, for ejectment of the Defendant and those under him and
to recover possession of the same.
The Plaintiff gave a general Power of Attorney to his wife
Miriam Srimathie Silva. It reads that
she is empowered “to sell and dispose of
or to mortgage or hypothecate or to demise and lease ……… convey by way of
exchange ……”. There is no empowerment
given “to gift the property”. However,
she gifted the property to her mother by way of a deed of gift dated 09.05.1990
and numbered as 1551. The Defendant
argued that the Power of Attorney No. 376 dated 12.07.1984 states that the
principal is “desirous of appointing a fit and proper person as my Attorney to
manage and transact all my business and affairs in the said Sri Lanka” and therefore
gifting the property comes under “all my business and affairs”. It was argued that then the
Power of Attorney holder is entitled to
act under the general clause which reads-
”Generally to do execute
and perform all such further and other acts, deeds, matters and thing
whatsoever which my attorney shall think necessary or proper to be done in and
about or concerning the business, estates, lands, houses, debts or affairs as
fully and effectually to all intents and purposes as I might or could do if I
am personally present and did the same in my proper person it being my intend
and desire that all matters and things respecting the same shall be under the
full management, control and direction of my said attorney ”.
The Defendant’s position was that the specific powers
conferred in the clause “to sell and dispose of ………” does not detract from the
general powers conferred by this clause.
In short the Defendant argued that the general clause over powers the
specific clause.
Court observes that it is
settled law in the country that the Power of Attorney should be construed
strictly. In Adaichappa Vs. Cook 31 NLR 385, it was held that “The Power of Attorney should be construed per se
and not regarding the other powers of Attorney contained in the instrument,
namely the Power of Attorney.”
In Marshal Vs. Seneviratne 36 NLR 369,
also it was held that “the authority given by the Power of Attorney is an
express authority to be found not by implication but of the terms of power
appointing the Attorney. Once a person
is aware that the man is dealing with acts under a power of attorney, it is at
his peril not to know the extent and limits of that power.”
In Bastianpillai Vs. Anna Fernando 54 NLR 113 it
was held that “a Power of Attorney must be construed strictly and that the
special terms in the recitals controlled the general words in the operative
part”.
Bowstead on Agency 1st Edition Article 36 at page 59 states
that “general words do not confer general powers, but are limited to the
purpose for which the authority is given, and are construed as enlarging
special powers when necessary, and only when necessary, for that purpose.”
In the case of Harper Vs. Godsell (1870) LR 5QB 422 at 427,
Blackburn, J. said “the special terms of the 1st part of the power prevents
the general words from having an unrestricted general effect. The meaning of the general words is cut down
by the context in accordance with the ordinary rule of ejusdem generis”
In all these cases it was held that the specific powers
conferred should be construed in the light of the intention of the principal
who grants the power of attorney.
I am firmly of the view that the general words couched into
clauses in this particular general power of attorney cannot in anyway be
construed to disturb the specific clauses relevant to „property‟ contained
therein. The intention of the principal
has to be gathered from the clauses in any Power of Attorney whether it is a
special Power of Attorney or whether it is a general Power of Attorney. The intention of the husband could never
have been to grant authority for the wife to donate or gift his properties to
anyone else leave alone his mother-in-law.
Having gifted the property to the mother of the
Power of Attorney holder, when the husband came to know the same and
questioned her as to why she gifted,
what was the next step taken by
the Power of Attorney holder? She and
her mother got together and sold the land to the Defendant soon
afterwards. The mother signed as vendor
and the daughter signed as witness to the deed of transfer in favour
of the Defendant. The bad intention of
the Power of Attorney holder can be seen by her
actions after she acted under the Power of Attorney. I am of the opinion that one has to view the
intention of not only the grantor of the Power of Attorney but also the
intention of the grantee the holder of the Power of Attorney. Any person
gives a Power of Attorney to another having full faith and trust on that person. The Plaintiff trusted his wife. He could never have dreamt of the wife gifting
his hard –earned properties to anybody of his wife‟s
choice. Supposing the wife sold the land to her mother, it
would have been different because the Power of Attorney specifically mentions
that she can sell, because the money
she receives from the sale should go to the husband the grantor of the
Power of Attorney. It cannot be surmised that the intention of
any Power of
Attorney grantor is
to give authority to “Gift” the properties to any person. That
is the very reason that such a word is not included in a general Power
of Attorney. No sensible person would ever grant a Power of Attorney to anybody if
the general clauses are interpreted to give authority to gift the properties.
The intention of the grantor can be gathered from the specific words used
in the Power of Attorney. The intention of the grantee can be gathered by
the actions of the grantee before acting
on the Power of Attorney and after acting
on the Power of Attorney. In this
case it can be seen that Miriam Srimathie Silva‟s intention was to
get the benefits of the husband „s
property for herself and her mother.
The Power of Attorney holder
has willfully acted wrongly in
this matter, taking undue advantage of the fact that her husband had given her
the power of attorney in trust.
Furthermore, I would like to consider other aspects of this
matter since it would serve to answer the questions of law which were allowed
at the inception of this case before this court.
The Plaintiff had filed action in the District Court of
Panadura under case No. 704/L, long before he filed this case, i.e as soon
as he came to know of this deed of gift giving his own property to his mother
in law by his wife , using the power of
attorney given by him to his wife. He had prayed that the deed of gift bearing
No. 1551 dated 09.05.1990
be declared null and void. He made his
wife Miriam and her mother
Sylvia parties to that action. They
filed proxy as the first and second defendants in that case and filed
answer as well on 23.11.1992. Issues were also raised but on the first date of
the trial, the Attorney at Law for them submitted to court that she had no
instructions. The District Judge however put off the case for trial for a
second date and even on that date, the
lawyer submitted that she had no
instructions from the defendants. Then
it was fixed for exparte trial. Exparte
trial was taken up on another date and court granted relief as prayed for by
the Plaintiff and decreed that deed 1551 was null and void on 26.03.1997.
Counsel for the Defendant Appellant Petitioner in this case
argued that case number 704/L was a collusive action and the Vendor of the
Petitioner Sylvia Fernando neglected to defend the title acquired by her and
that it amounted to collusive action with the Plaintiff and it was fraud.
Proceedings in 704/L as aforesaid confirm that it was not fraud or collusive
action but that the mother and daughter gave up contesting only at the trial
stage. The mother and daughter
had rushed to sell the said land to the Defendant at about the same time
the case was filed, thereby passed title
to another and got some money.
At the commencement of this case before the District Court
on 23.05.2002, it was admitted by the Defendant that the writ of execution to
eject the persons on the land was rejected by court on 15.12.2001 on the ground
that the proper parties were not named in that application for writ. Therefore,
the fact that there was a decree entered in 704/L to the effect that deed 1551
was null and void remains in tact. As
such, it stands in the way of any claims by the Defendant in any court action
he contests with regard to the land he has bought. I am of the view that it
operates as res judicata against the Defendant Petitioner with regard to paper
title to the land in question, even
though he was not a party to that action since title does not pass to anyone
beyond the owner who owned the land prior to the deed which was declared null
and void. It is apparent that the
Defendant Petitioner was in possession from 24.09.1991 but the moment that deed
number 1551 was declared null and void on 26.03.1997 in case 704/L, the
Defendant Petitioner looses his source of title. Hence, from 26.03.1997 the
Defendant Petitioner had only occupied the land without any title.
The District Court action pertinent to this Appeal was
filed on 13.06.2001 under number 335/L and by that time the Defendant knew that
he had no paper title to stay on the land even though the Plaintiff had failed
in taking out writ of execution to evict him. Nevertheless, the Defendant had
failed to specifically plead prescription and/or to raise a specific issue on
prescription in the District Court. The District Judge had analysed the
situation well and had rejected the argument on prescription.
The present District Court case number 335/L is a re
vindication action praying for a declaration that the Plaintiff is the owner of
the property and for ejectment of the Defendant from the land and premises. The
Plaintiff proved his title with good evidence and got relief as prayed for,
against the Defendant. The Defendant had failed to bring good evidence to show
that he was a bona fide purchaser and that he had improved the land as he
claimed in his answer. The Civil Appellate High Court affirmed the judgment of
the District Court.
In the said circumstances, I hold that the deed No. 1551 is
void ab-initio and therefore the
title does not pass from the Plaintiff
to any other person. Therefore
deed which was executed thereafter, i.e. deed No. 976 is also void
ab-initio. The Defendant does not get any title to the
land. I fail to see that there was evidence to prove that the Defendant was a
bona fide purchaser either. The Defendant was granted Rs.40,000/-
by the District Judge, on evidence proven as the cost of baby teak
plants planted by him on
the said land, and it was affirmed by the Civil Appellate High Court, as nothing more was proved by him with any evidence
before the District Court.
Accordingly, I answer all the questions of law enumerated
at the beginning in favour of the Plaintiff-Respondent-Respondent. I affirm the
judgment of the Civil Appellate High Court and the District Court and hold
further that the Substituted
Plaintiff-RespondentRespondent-Respondent
is now entitled to receive the
benefits of the said judgments delivered
in favour of the Plaintiff- Respondent-
Respondent.
This appeal is dismissed with costs.
Judge of the Supreme
Court Buwaneka Aluwihare, PC.J.
I agree.
Judge
of the Supreme Court
Upaly
Abeyrathne, J.
I agree.
Judge of the Supreme Court
Page
Comments
Post a Comment