Nanedirige Sarath Thilakasiri v. Bharatha Wijesundera – SC APPEAL NO. 160/2013-2016

In the case between Bharatha Wijesundera (Plaintiff Respondent) and Nanedirige Sarath Thilakasiri, Nanedirige Ananda Tilakaratne, and associated parties (Defendant Appellants), the court addressed whether the transfer of Lot 2A2-1 by deed constituted an absolute transfer of title or was executed as security on trust for a loan. It was held that the transfer deed, while facially an absolute conveyance, was executed as security for a loan, and thus a constructive trust was established. The principle reaffirmed is that parole evidence may be introduced to show that a deed, though absolute on its face, was actually intended to create a trust, especially where documentary and testimonial evidence substantiates such an intention. This reasoning relied on authorities such as Dayawathie Vs. Gunase