CANCELLATION OF AN AGREEMENT TO SELL - BURDEN OF PROOF-

CANCELLATION OF AN AGREEMENT TO SELL - BURDEN OF PROOF-

A W A SALAM J

This appeal arises from the judgment dated 28 June 1994 of the district court of Matale by which relief was granted to the plaintiff-respondent as prayed for in the plaint, against the defendant-appellant based on a cause of action linked to an alleged breach of agreement to transfer an immovable property to the plaintiff-respondent, as undertaken by the defendant-appellant. (For purpose of convenience the "plaintiff-respondent" is referred to in the rest of this judgment as the "plaintiff" and the defendant-appellant as the "defendant").

The version of the plaintiff as presented to the learned district judge was that the plaintiff entered into a notarially executed  agreement on 21 July 1983 (P1) with the defendant by which the latter agreed to sell the land and premises set out in the schedule to the plaint to the plaintiff for a sum of Rs 135,000/-. At the execution of P1 the plaintiff had paid the defendant an advance of Rs 50,000/- and undertook to pay the balance sum of Rs 85,000/-on or before the end of a period of six months. By P1 the defendant further agreed to execute a deed of transfer in favour of plaintiff upon the payment of the said balance sum.

In April 1988, the plaintiff filed action against the defendant for the recovery of a sum of Rs 50,000/- advaved by him towards the purchase of the property, based on the ground that he was ready and willing to pay the  balance sum of Rs 85,000/- but the defendant failed and neglected to accept it and execute the deed of transfer in his favour.

In a three paragraphed answer in which paragraphs 1 and 3 were set apart for a bare admission and denial of the plaint, the defendant pleaded his substantive defence in paragraph 2 where he stated that P1 was cancelled by consent of the parties and therefore the defendant had not acted in breach of the agreement and consequently is not liable for the alleged breach. Quite significantly the answer did not set out any detail as to the circumstances which led to the cancellation of the agreement P1 or the date on which it was so cancelled.

The answer of the defendant was subsequently amended but nevertheless failed to disclose the date and the terms upon the said agreement was cancelled. Subsequently the defendant attempted to file another answer so as to include a claim in reconvention. However, the amended answer of the defendant containing the claim in reconvention was rightly rejected by the learned district judge.

At the commencement of the trial it was admitted that the defendant was the owner of the premises bearing assessment No 153/3 and the parties had entered into the agreement bearing No 2909 dated 21 July 1983 and the defendant had accepted a sum of rupees 50,000/- from the plaintiff in terms of the said agreement.

The matter of the dispute proceeded to trial on six issues of which the first four were suggested by the plaintiff and the rest by the defendant. The issues of the plaintiff raised the question as to whether there was a sum of Rs 85,000/- to be paid by the plaintiff to the defendant on the agreement to sell (P1) and whether the defendant had failed and neglected to execute the deed of transfer in favour of the plaintiff notwithstanding the request made by to the defendant to execute the deed of transfer. The only issue raised by the defendant was whether the agreement No. 2909 was cancelled and if so whether the plaintiff can maintain the action.

At the trial the plaintiff Mohamed Ganie Mohamed Aliyar gave evidence and thereafter led the evidence of Abdul Mohamed Abdeen Nasurudeen who was admittedly a witness to P1. The position taken up by the plaintiff in his evidence was that within a period of six months contemplated by P1, he attempted to tender the money to the defendant but could not do so as the defendant was either evading or giving falls promises. The plaintiff had further categorically denied the cancellation of P1.

In presenting the defence, the defendant called punchi Banda Ekanayaka, a lawyer’s clerk and Upali Indra Kumar Wijethilaka, the Notary Public who attested P1. Thereafter the defendant gave evidence. The position taken up by the defendant was that the agreement P1 was cancelled by mutual agreement as borne out by P1A.

The learned district judge in her judgment has come to the conclusion that the burden of proving the cancellation of the agreement P1 was on the defendant and that he had not discharged that burden. It is appropriate at this stage to consider the nature of proof offered by the defendant to establish the alleged defence to wit: that P1 was cancelled by mutual consent of the parties. The defendant claimed that an endorsement was made on the face of the deed to show that it had been cancelled. This endorsement was marked as P1A. The plaintiff has denied his signature on P1A. Even the witness of the plaintiff Nasurudeen denied having ever signed the endorsement P1A. The learned district judge having analyzed the evidence adduced by both parties came to the conclusion that the defendant was obliged in law to establish the cancellation of the agreement and that he had failed to establish the same. In order to come to this conclusion she had considered the fact that the cancellation had not been notarially executed and that Mr.Wijetillake had not certified or attested the cancellation although he claimed that he was present when the cancellation was done.

In the impugned judgment the learned district judge has also taken into consideration the failure on the part of the defendant to produce a letter alleged to have been given by the plaintiff when he signed P1. The non-production of the said letter was considered by the learned district judge as a fatal omission in the defence case. The nonproduction of this letter was rightly considered by the learned district judge as being adverse  to  the defendant, as the document, if produced would have constituted sufficient proof of the voluntary nature of the cancellation of the agreement, for the simple reason by this letter the plaintiff is alleged to have  restricted his claim for damages to Rs 40,000/-. As regards the nonproduction of this letter the learned district judge quite conscious of the failure of the defendant to list this letter as a document relied upon by the defendant to prove the defence.

As has been submitted before the learned district judge by the learned counsel of the plaintiff in the instant case the plaintiff has only to prove that the agreement was executed and that the defendant failed to honour the same. The defendant on the other and who claimed that the agreement was cancelled had to prove to the satisfaction of court that it was so cancelled. In order to achieve this he must prove the signature at the foot of the cancellation to be that of the plaintiff and the witnesses whom he claimed as having signed the same. As the defendants had failed to discharge this burden the learned district judge has rightly concluded that on a preponderance of evidence the plaintiff has proved his version and the defendant has failed to establish the defence.

Even though the leaned district judge has not dealt in the judgment, it is interesting to note that having entered into P1 the defendant has obtained an advance of 60,000/- from one Haniffa on an agreement to sell the same property. The said Haniffa has instituted action No 3999/MR in the District Court of Matale and judgment has been entered against the defendant. A strange coincidence here is that case in the first answer filed by the defendant the defence taken up is the cancellation of the agreement to sell by mutual consent. This answer was filed at the trial as P2.

In rejecting the defence the learned district judge has also taken into account of the fact that the agreement has been allegedly cancelled on the last day before which the deed of transfer had to be signed and that the plaintiff had not in any way benefitted by the cancellation.

It is to be observed that the witnesses of the defendant had not received summons from court but attended court upon being requested by the defendant. Mr.Wijetillake who testified on behalf of the defendant was the registered attorney-at-law of the defendant at one time. He had revoked the proxy to attend court as a witness. Agreement 2909 has been attested by him. In terms of the gazette extraordinary No.537/7 of 7.12.1988 under Rule 12 " An Attorney-at-law shall not accept any professional matter in respect of which he knows or has reason to believe that he would be required as a witness. The same principle would apply where an attorney-at-law after accepting any professional matter finds that he would be required as a witness in the same matter. Provided, however, an attorney-at-law may accept any professional matter in which he may be required only as a witness in respect of any formal or non- contentious matter".

In the light of day above matters it is quite apparent that both Mr Wijethilaka and his clerk had a prejudice against the plaintiff and therefore they cannot be regarded as independent witnesses in so far as their evidence relating to the cancellation of the agreement is concerned. The learned district judge had been quite conscious of the fact that the endorsement relating to the cancellation of the agreement had not been certified.

Taking into consideration the circumstances that had influenced the learned district judge to reject defence, I am not inclined to subscribe to the view that the learned district judge had erred in granting relief to the plaintiff. As such he regret my inability to hold that the learned district judge has its directed herself in the application of the law. For the reasons set out, the appeal of the defendant should necessarily fail.

The plaintiff is entitled to costs.

                               Sgd.                             

                           Judge of the Court of Appeal

                                    A.W.Abdus Salậm, J.

I agree

W L R Silva J

END OF THE JUDGMENT