1. Crown lease — Covenant prohibiting donation without consent — Purported gift to heirs without consent — Subsequent devise by will. (Para 1 )
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1939 Supreme(SC) 12
Privy Council At Ceylon
Porter, Romer , Justice Lords Alness, JJ.
Simon Christopher Jayawardene -Appellant
Versus
Alfred Christy Jayawardene and others -Resopndent
Privy Council Appeal No.58 of 1937
Decided On : 24-02-1939
Advocates Appeared:
Burchells, O.A.Cayley, Kenelm Preedy, L. de Silva, Stephen Chapman, H.S.P. Hallett
Burchells, O.A.Cayley, Kenelm Preedy, L. de Silva, Stephen Chapman, H.S.P. Hallett
A lease covenant declaring transfers without consent "void" makes them voidable at the lessor's option. If avoided, no property passes. Additionally, transferring a lease through an executor to a devisee does not breach a covenant against assignment if the lease definition includes executors.
Headnote:(A) Leasehold Covenants - Covenant prohibiting subletting, selling, donating, or disposing of interest without written consent of the lessor - Provision stating such acts shall be "absolutely void" - Interpretation of "void" in the context of lease conditions - Such provisions are generally construed as making the act voidable at the option of the lessor rather than void ab initio - Where the lessor expressly refuses to acknowledge the donation, the transfer is avoided and no property passes.
(B) Devise by Will - Covenant not to dispose of or deal with leasehold interest - Where the lease is granted to the lessee and the term "lessee" is defined to include heirs, executors, and administrators - The passing of property through an executor to a devisee does not constitute a breach of the covenant not to assign or dispose of the interest.
(C) Estoppel - Claim of title based on a void donation - Estoppel cannot be established where the donees had notice that consent was required and no representation was made by the donor upon which the donees acted to their detriment.
Facts of the case:
A lessee of land held the property in perpetuity subject to a covenant prohibiting any donation or disposal of the interest without the lessor's written consent, failing which the act would be void. The lessee executed deeds of gift to his sons without obtaining the required consent. The lessor subsequently informed the lessee that the gifts were invalid. The lessee later executed a will leaving the property to one of the sons. Following the lessee's death, a dispute arose between the son claiming under the will and the sons claiming under the deeds of gift.
Findings of Court:
The attempted donations were voidable at the option of the lessor, and the lessor had exercised that option by declaring them invalid. Consequently, no interest in the lease passed to the donees. The subsequent devise of the property by will to the appellant was valid as the executor's role in transferring the lease to a devisee does not breach the covenant against assignment. There was no evidence to support a claim of estoppel.
Issues: Whether deeds of gift executed in breach of a lease covenant requiring lessor's consent pass any property; whether a devise by will violates a covenant not to dispose of the leasehold interest; and whether the beneficiary of a will is estopped from challenging the validity of prior void gifts.
Ratio Decidendi: A covenant stating that a transfer without consent is "void" is interpreted as making the transfer voidable at the lessor's option. Once the lessor avoids the transfer, the donor retains the interest. Furthermore, where a lease is defined to include executors, the transfer of the lease from an executor to a devisee is not a prohibited disposal. Estoppel requires a representation and detrimental reliance, neither of which were present.
Result: Appeal allowed.
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Lord Porter:-
The appellant in this action, who was also the plaintiff, is one of the sons of the late J.V.G.A.W. Jayawardene, Gate Mudaliyar. The first three respondents are also his sons. The deceased man was apparently a considerable landowner in the Island of Ceylon, and amongst his other properties was tenant under the Crown by an indenture No. 29 executed on 29th October 1919, and on 23rd February 1920, by the respective parties, of a certain allotment of Crown land called Kajugahaudumulleduwa, Kajugahaudumullelanda and Galagodakele in Maggon Badda, Kalutara Totamune and Eladuwa Village, Iddagoda Pattu, Pasdun Korale West, Kalutara District, Western Province. The lease was entered into by the Governor of Ceylon on behalf of the Crown as lessor on the one part and by the deceased man as lessee (an expression which was stated to include his heirs, executors, administrators and permitted assigns) of the other part. The estate was to be held in perpetuity subject to the covenants and general provisions contained in the lease. The covenants contained provisions for clearing and planting, paying rent, and the non-erection of buildings on the land. The tenth covenant must be set out in full. It read:
The lessee and his aforewritten shall not sublet, sell, donate, mortgage, or otherwise dispose of or deal with his interest in this lease, or any portion thereof, without the written consent of the lessor, and every such sub-lease, sale, donation, or mortgage without such consent, shall be absolutely void.
The second general provision was also important, and is as follows :
That if any rent hereby reserved shall remain unpaid and in arrear for the space of more that one year after the time hereby appointed for payment thereof, whether the same shall have been lawfully demanded or not, or if any breach shall be committed by the lessee of any of the covenants herein on the lessee's part contained, or if the lessee shall abandon or cease to cultivate the said land in manner provided in part IV of this lease, or if the lessee shall become bankrupt or compound with his creditors or if the said land or the interests of the lessee or his aforewritten be sold in execution of a decree against him or his afore- written, then, and in any of the said cases, this demise and the privileges hereby reserved, together with these presents, shall forthwith cease and determine, and the lessor, his agent or agents, may thereupon enter into and upon the said land and premises, or any part thereof in the name of the whole, and the same have, re-possess and enjoy as in his former estate, and the said land and premises shall forthwith revert to the Crown without any claim on the part of the lessee or his aforewritten against the lessor for compensation on account of any improvements or otherwise howsoever.
The deceased man took possession under the lease and continued in possession until his death on 19th January 1930. Meanwhile, in May 1927, he was for some reason anxious to make a deed of gift of the whole or at any rate a largo portion of his properties to his four sons in equal shares, and amongst those properties he desired to include the Crown lease. Accordingly, he wrote on 16th May 1927 to the Assistant Government Agent asking that permission to assign might be granted. Without waiting for the permission to be obtained, however he executed four deeds of gift between 27th and 30th May 1927, giving one quarter of his estates to each of his four sons. Each donation was subject to his own life-estate and to each was attached a fidei commissum. These deeds included the Government lease amongst the properties given and were in identical terms save in one matter. That in favour of respondent 2 recited that his father had applied for and obtained the written consent of the Governor, whereas the other three recited only that he had applied for such consent. The Government Agent did not reply until 27th July 1927, when he asked to be furnished with a draft of the
