CONSTRUCTIVE TRUST- DOCRINE OF ATTENDED CIRCUSTACES

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 IN THE COURT OF APPEAL OF THE DEMOCRATIC

SOCIALIST REPUBLIC OF SRI LANKA.

 

C.A. No. 767/96 f (A) & (B)

D.C. Horana : 3853/L

1. Nihal Dayananda Rajanetti,

2. Walimune Devage Chandra Fernanndo

3. Gamini Malwenna,

All of Sri Chandrasekara Mawatha,

Panadura

 

Defendant-Appellants

 

 

Vs

Harischanndra P Jayasuriya,

Kotalawala, Bandaragama

Plaintiff- Resondent                  

           

 

Before:        A.W.A SALAM, J.

Counsel:              Rohan Sahabandu with Athula Perera for the defendant-appellants and  D D P Dasanayaka for the plaintiff-respondent.

Argued on: 08.09.2010

Written submissions tendered on:   01.12.2010.

Decided on: 27.01.2011

 

 

A.W. ABDUS SALAM, J.

These appeals arise from the judgment dated 29.8.1996, delivered by the learned district judge of Horana, consequent upon the plaintiff having sued the defendants inter alia for a declaration that the allotments of land which form the subject matter of this action are held by the 2nd and 3rd defendants in trust for the benefit of the plaintiff. The facts relevant to the dispute are that the 1st defendant who became the owner of the land described in the 2nd schedule to the plaint caused it to be divided into 12 lots and entrusted the sale of 9 lots to the plaintiff having reserved lots 10 to 12 as roadways.

The plaintiff had paid rupees 29,000/= by cash and rupees 41,000/= by a post-dated cheque. Upon this payment, the 1st defendant had agreed to transfer the various lots to the various persons nominated by the plaintiff. The 1st defendant has promised by way of informal writing as is evident from P4 that he would transfer the said lots as stated above.

According to P4, the plaintiff had been granted time only until 25.10.1982 to make the balance payment. However, according to the evidence led at the trial the plaintiff had not kept to this promise to settle the whole amount as contemplated in P4. There was no dispute that the 1st defendant had executed deeds in favour of the nominees of the plaintiff in respect of lots 1,2,3 & 9. The question that arose, in this case, was whether 1st defendant was under obligation to transfer his rights in Lot 4, 5 & 6.

The 1st defendant opposed the plaintiff being given relief on the basis that he has not established the ingredients necessary to hold that the property in question had been held by the 2nd and 3rd defendants in trust for the plaintiff.

The impugned judgment of the learned district judge is mainly based on document marked P4. This document had not been notarially attested as required by section 2 of the Prevention of Frauds Ordinance. The learned district judge could not have given any evidential weightage to this document as it was clearly obnoxious to Section 2 of the Prevention of Frauds Ordinance and therefore is admissible in evidence.

Admittedly the 1st defendant has transferred the rights in lot 4, 5 & 6 to the 2nd. 3rd and 4th defendants. The transfers have taken place long after the expiration of the time limit fixed by P4.

When the evidence led by the plaintiff is considered it is quite obvious that he has not put forward any favourable attended circumstances to infer the existence of a trust in favour of the plaintiff when the 1st defendant had transferred rights in Lots 4,5 & 6 to the 2nd and 3rd defendants. The document marked as P34 relates to payment in respect of Lots 7 & 8 which do not form part of the subject matter of this action.

A perusal of the judgment of the district judge reveals that he has not given cogent reasons for his conclusion that a trust is in existence in favour of the plaintiff nor has he analyzed the evidence of the plaintiff in the proper perspective before he arrived at his conclusion.

The learned district judge has also failed to appreciate that the 2,3, defendants are not parties to P4. He had not addressed his mind the extent to which the 2,3, defendants should be protected as bona fide purchasers before entering judgment against them. In the circumstances, I am of the view that the impugned judgment of the learned district judge is perverse and occasioned a failure of justice. As such, the judgment under appeal is set aside and case sent back for retrial.

The 1,2,3 defendants are entitled to costs of this appeal from the plaintiff.

Judge of the Court of Appeal

 

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