(COURT OF APPEAL)

AHMED ABDALLA HASSAN V. HAG ABDALLA MOHAMED HAG

AHMED AND ANOTHER

AC-REV-536-1966  

Principles

Land Law-Lease-It is an interest in the land . Pre of “property “—Pre-emption Ordinance, s. 4 (b)—Lease comes within the definition the word “property”- Pre-emption-Right of pre-emption—Pre-emption Ordinance, s. 5 (a)—Exists in registered leasehold lands. Reception- Interpretation of Mohammadan Law—Applicable where the main principles and concepts of the Ordinance were derived or borrowed from such law

Lease is an interest in the land and as such it comes within the orbit of the word “property” defined under Pre-emption Ordinance, s. 4 (b). Accordingly the right of pre-emption exists in registered leasehold lands to a co-leaseholder on the assignment of an undivided part in that land under Pre-emption Ordinance. S. 5 (a).
In aid of interpretation of an Ordinance Mohammadan Law can be received where the main principles and’ concepts of the said Ordinance were derived or borrowed from the Mohammadan Law.

Advocates-: Abdel Rahman and- Abdel Rahim

Mohamed Beshir for the respondent

Judgment

Osman El Tayeb J. December 53, 1967 :—This is a case of pre-emption 3f leasehold plot known as plot No. 88/A Bk.5 El Damer Town:, Comprising 662 s.m.

Plaintiff-Applicant-instituted his case claiming to exercise right of pre-emption in  respect of an undivided- part of that plot assigned by first defendant to second defendant for a certain price, on the ground that he is the leaseholder as to the other part of the, plot. The case was allowed; but in  date fixed for defendant to reply to the claim, and in their presence the learned District Judge out of his own motion and before hearing the parties held that no right of pre-emption exists in a leasehold plot and dismiss the case. An application for revision to the learned Province Judge was summarily dismissed by him.

Hence came this application. It lies to this court to decide whether or not right of pre- emption exists in leasehold property. The plaintiff in his  submission to this court made no argument except that his right of pre-emption exists being a co-owner to an undivided share especially that the plot contains- buildings and that the sale was for the plot and the buildings and that the sale was for the plot and the buildings, and further that the plot sold is undersized and cannot be registered as separate plot.

It is argued on behalf of second defendant, the purchaser, that the right of pre-emption only exists on sale of land, freehold land, and not an assignment of leasehold interest in land, according to the Pre-emption Ordinance, s. . The learned Advocates for the purchaser appeared to have relied on Tammani Huds v. Ahmed Mohamed Abdalla and Another (1962) S.L.J.R. 61 decided by Bitar D.J., the judgment in which raised the following points:

(a) “The natural meaning of ‘owner of land’ is the person who has ownership of the land but not the ownership of leasehold interest therein. Furthermore the Pre-emption Ordinance provided for the sale of property. Property is defined therein to mean immovable property. The general and natural meaning of immovable property can never include the leasehold interest in the immovable property.”

(b) In the Mohammadan law no right of pre-emption exists in lease hold land, which law may be considered here in aid of interpretation.

(c) The existence of right of pre-emption in sale of leasehold interest is against public policy, because the owner of the land is the Government and it granted the lease with certain conditions, inter elia, no assignment should be made without its consent.

It is important, first, to point out that that case, according to its reported judgment, was about two adjoining leasehold plots without showing whether the owner has the benefit of a servitude over the other, in order to ensure that a right of pre-emption existed under the Pre emption Ordinance, s. 5 (b).

Considering the points raised and relied upon in that case, and also in this case, it must be stated that the invocation of the doctrine of public policy was unfortunate. This doctrine of English Common Law is part of the law of contract, it is used to render a contract illegal where it involves an act of immorality or an act prohibited by law. We have no contract here, and the right of pre-emption is a right created by law independent of any contract. The legal fact that it exists on the sale of land, the pre-existence of a contract of sale of land, in no way renders it dependent or arising out of that contract, since the right of pre-emption is not to be affected by the illegality or otherwise of the sale contract in so far as the sale is completed.

The point in the mind of the learned District Judge is that of the condition in the lease about the consent of the Government for the assignment; that it had already given its consent for the assignment to the second defendant; and if the plaintiff is allowed to pre-empt the purposes of that condition of the lease would be defeated. I do not think so

because, as I said before, the right of pre-emption is a right created by law; and as such it overrides any conditions in the lease that would have been necessary for completion of the assignment. It is a right pertaining to property that, by virtue of the position of the property of a pre-emptor, he is entitled to the property disposed of, irrespective of any personal conditions or covenants, except those rights or obligations of the purchaser on which the vendor is subrogated by the pre-emptor under the Pre-emption Ordinance, s. 9.

I come to the second point of receiving the Mohammadan law in aid of interpretation of the Ordinance. This may be done and it is welcome and advisable where the main principles and concepts of the Ordinance were derived or borrowed from that law; provided that those principles or concepts, as introduced in the Ordinance have not been modified by other legal principles or developed into other lines of legal thought. I wish to point out in that respect that the system of registration of title and the rights and interests in land that are capable of registration—as we have—has been a necessary modification and development in the Mohammadan law principles relating to land law relevant to this case:

we found that the principles of leasehold interests and their implications as regulated by law in the Sudan were not known to the Mohammadan law. It is to be noted, however, that the prevalent opinion in this law is that pre only exists to owner of land (in the strict sense) or servitude to the benefit of which land is entitled. But the Egyptian law of pre-emption, which is also derived from the Mohammadan law recognized the right of pre between joint owners of a right to benefit from land and also between the joint owners of a right of Hikr over land. See the work entitled Pre-emption by Mohamed Kamil Mursi Pasha (3rd ed.), pp. 64—86.

As to the first and most important point in the case, it involves the meaning of “property” and “land” in the Pre-emption Ordinance, and as to whether they include a leasehold interest; the Ordinance speaks about property and land, registered or unregistered. It defines property to mean “immovable property and includes land and buildings and things permanently affixed to land and also an undivided share in such property.” Registered land is defined to mean “Land registered under the Land Settlement and Registration Ordinance. . . .“ These two definitions necessitate reading them in conjunction with the definition of “land” in the Settlement and Registration Ordinance, which runs as follows:

"Land’ includes benefits to arise out of land and buildings and things permanently fixed to land, also an undivided share in land and also any interest in land which requires or is capable of registration under this Ordinance other than a charge but including the right to cultivate a

determinate or determinable area of land although its situation may vary from year to year.

It is commonplace that a lease is an interest in land within the meaning of this definition, and the leasehold land when held for a term of three years or more is capable of registration under Land Settlement and Registration Ordinance, s. 48. And when registered the lessee shall be known as “the proprietor of leasehold land” (section 49), and the said proprietor may transfer the same to another proprietor “Proprietor” is defined in the last mentioned Ordinance to mean the person registered as “owner of land.” I come to this conclusion that leasehold interest or estate is considered for all intents and purposes as property, land or property in land, and it can be owned, registered and transferred or assigned. This meaning is the meaning which has to be ascribed to the Pre-emption Ordinance, since there is no cogent argument to the contrary. It is to be noted that the word “immovable,” describing property, as far as I can see is not used as a legal term in any enactment in the Sudan and I have not seen it used in English law. In the circumstances immovable property cannot be given any meaning other than land, and we have seen that land includes leasehold interest in land, in other words leasehold land.

It is not, therefore, difficult to hold that a person holding a leasehold interest in leasehold land jointly with another in undivided shares is a co-owner of property in undivided shares within the meaning of the Pre emption Ordinance, s. 5 (a), so as to give him the right to pre-empt on the sale of the property of the other co-owner.

The word used in the Ordinance is “sale” of property, while the word used for transfer of leases is “assignment” of lease, so it is argued that the Ordinance does not apply to leaseholds. Though the use of assignment is appropriate because there is a third person, i.e. the free holder of the land, as between the assignor and assignee the transaction is no more than the transfer of the property, and that transfer may be by sale for valuable consideration. It is actually the sale of the interest in the land. This leads to saying that assignment of a lease is sale of leasehold estate or interest or sale of leasehold land, or in other words sale of property. The right of pre-emption, therefore, exists to the co-owner on the assignment of the undivided share in the property.

As I pointed out before, the original lessor (the Government in this case) had entered in the transaction of assignment and given its consent to it, but as the right of pre is created and imposed by law no further right is reserved for the original lessor to interfere with that consent.

In my opinion the right of pre exists in registered leasehold lands, to a co-leaseholder on the assignment of an undivided part in that land, subject to the applicability of all the provisions of the Pre-emption Ordinance.

The orders of the courts below dismissing plaintiff’s claim are hereby set aside and the case is sent back for hearing and determination.

El Rayah El Amin C.J. December13, 1967:-I concur.

Hassan Abdel Rahim 1. December 13, 1967:—I concur.