Colombo Hotels Co. Ltd. V. Mootoomull

[PRIVY COUNCIL]

Present: Earl Loreburn, Lord Atkinson, Lord Scott Dickson,
and Sir Arthur Channell.

COLOMBO HOTELS CO., LTD. v. MOOTOOMULL et al.

Agreement to enter into a lease when new buildings are completed- Outside evidence led to show what was meant by nets buildings- Evidence Ordinance, s. 92.

The plaintiffs entered into an agreement with the defendants by which the defendants agreed to accept a lease of a shop. The period of lease was to commence " from the date when the new buildings are completed and the shop is occupied." The plaintiffs resolved to rebuild the hotel in three sections, and the shop in question was in section No. 2. The defendants entered into occupation of the shop some time after it was completed, but thereafter the plaintiffs intimated that they had definitely abandoned the erection of section No. 3. The defendants when called upon to enter into the lease refused to do so as the new buildings had not been completed.

The plaintiffs sued for damages. The Court allowed evidence to be led to explain what was meant by " new buildings, " and on the evidence it was held that the words " new buildings " meant the entire buildings, and not only section No. 2.

THE facts appear from the judgment.

June 10, 1918. Delivered by LORD SCOTT DICKSON: -

The plaintiffs (respondents) in this case are the owners of the Grand Oriental Hotel, Colombo. The defendants (appellants) are shopkeepers in Colombo, who for many years before the present dispute arose occupied as tenants business premises in the said hotel.

In 1910 the respondents resolved to rebuild their whole hotel, and they approached the appellants with the view of their taking a lease of premises in the new hotel buildings about to be erected.

After somewhat protracted negotiations the parties signed an agreement dated March 3, 1913, by which the appellants agreed to accept a lease of the shop therein described on the terms and for the period therein set forth.

By that agreement the period of the lease (121/2 years) was to commence " from the date when the new buildings are completed and the shop is occupied " by the appellants, two events being thus stipulated for as conditions of the commencement of the lease.

The solution of the controversy between the parties depends on the interpretation which is to be put on the words " the new buildings."

The respondents resolved to proceed with the re-erection of then-hotel in three sections, the shop in question being in section No. 2. When that section was completed, the respondents called upon the appellants to enter into occupation of the said shop, and ultimately the appellants did so in December, 1913.

The parties are at issue as to the terms upon which such possession was taken. The respondents maintain that it was because "the new buildings " in the sense of the agreement had been completed, and when the appellants, therefore, were bound to take possession, and did take possession, in terms of that agreement. The appellants, on the other hand, maintain that they took possession before they were bound to do so in terms of a special arrangement between them and the respondents.

Thereafter the respondents intimated that they were not going to proceed with the erection of section No. 3 of the proposed new buildings and the rebuilding of that section has been definitely abandoned. In the plaint the respondents sued the appellants for damages in respect of their refusal to enter into a lease in terms of the said agreement. In their answer the appellants maintained that they were not bound to enter into such a lease, as the new buildings had never been completed.

The District Court Judge dismissed the action, with costs. On appeal the Supreme Court reversed the decision of the District Court Judge, and gave decree against the appellants for damages and expenses. The present appeal has been taken to set aside the j

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