039-NLR-NLR-V-56-A.-C.-SUPPIAH-CHETTIYAR-et-al-Appellants-and-S.-M.-D.-B.-SAMARAKOON-Respond.pdf
SANSONT J.—Suppiah Ghettiyar v. Samarakoon
I 01
1054Present : Sansoni J.C. SUPPIAH CHETTIYAR et al., Appellants, andS. M. D. B. SAMARAKOON, Respondent
S. O. 117-118— G. R. Kandy, 9,066
Rent Restriction Act—Business premises—“ Reasonable requirement ” of landlord—
Factors for consideration.
Plaintiff was the landlord of the defendants in respect of certain premises.He sought to have them ejected on the ground that he required the promisesfor his trade und business. The evidence showed that the premises were already-being used by the tenants since the year 1038 us the principal place of theirchief business of selling sundry goods.
Held, tliut, when assessing whether the landlord reasonably required thepiemtses, the Court should give due weight to the advantage to the tenant ofcontinuing to occupy the same premises and to the proportionate disadvantagesuffered by him by being forced to leave them. The value of a business suchas selling sundry goods would depend to a large extent on the length of timethat it hud been carried on in the same premises.
" Held further, that the fact that the plaintiff invested a large sum of moneyin the purchase of the premises in the expectation of getting vacant possessionwas not a mcusure of the reasonableness of his claim.
Quaere, whether it is hardship to the landlord or the tenant alone that mustbe taken into account, or whether there is a “ claim of third persons whosoreflected hurtlship, so to speak, may be taken into account ”.
Appeal from a judgment of the Court of Requests, Kandy.
//. J'. Perera, Q.(with H. W.Tambiah, for the defendants appellants.
(!. Thiagalinyam, Q.C., with P. Scrmatilakam, for the plaintiffrespondent.
Cur. adv. vult.
October 6, 11151. Sansoni J.—
The plaintiff-respondent in this appeal is the landlord of the twodofendants-appellants in. respect of promises No. 150, Colombo Street,Kandy. The defendants-appellants have been carrying on in partner-ship tho business of selling sundry goods in those premises since 1998.In 1946 they started an additional business of money lending along withone Alagu, and this business too has been carried on upstairs in thesepremises since then. There is a third business in tobacco being carriedon solely by one Murugesu in those same promises. Mur.ugesu had boona tenant under tho respective owners of these .promises for as long asthe defendants themselves, and he became the tenant of the defendantswhen they purchased the premises in 1949.
The defendants took a five-year lease of these premises in 1946, fromthe owner Saul Hamid. In 1949, they purchased the premises fromSaul Hamid subject to an agreement to retransfer to him within 4 years.In 1951 the plaintiff bought Saul Hamid’s right to get a retransfer, but
i H2SANSON! J.—Svpp&ih Ohettiyar v. Samarakoon
agreed contemporaneously to retransfer the premises to Saul Hamid atany time after 8 years, and within 10 years of the execution of that deedof purchase. The defendants necessarily had to convey the premisesto the plaintiff after he had bought Saul Hamid’s right to get a retransferfrom the defendants, and this they did in 1952. The plaintiff is there-fore the owner subject to Saul Hamid’s right to get a retransfer from him,and he has paid Rs. 36,000 in all to acquire his present right in the pro-perty. After he became the owner on 22nd January, 1952, the plaintiffaccepted rent from the defendants ; on 27th February, 1952, he gave thedefendants notice to quit the premise?, but the defendants have not yetvacated the premises. The plaintiff brought this action on 6th May,1952, to have the defendants ejected on .the ground that he requiresthe premises for his trade and business, and $he only issue for determina-tion, is whether they are reasonably required for that purpose.
The plaintiff runs a fairly large wholesale business in sundry goodsin Maturata where he lives. He. owns a house and other property thereand he says he is worth about half a lakh of rupees. The purpose forwhich he requires the premises in dispute is an import and export businesswhich he expects to set up. He carried on such a business under alicence in Colombo from 1949 till about the end of 1950, when he says heclosed it down because he incurred losses through residing in Maturatawhich is far away from Colombo. He now wants to restart the businessin these premises, apparently hoping that Maturata is not too far fromKandy though the two places are 28 miles apart. But I would emphasisethat the plaintiff is not in the position of a person who requires thepremises in order to earn his livelihood. He wants them mere'y tostart an additional business and thereby add to what is probably alreadya fairly large income. The defendants’ central place of business is,inthese premises but they also have a branch at Katugastota. While theformer yields a net annual profit of over Rs. 30,000, the latter yieldsonly Rs. 3,000 or 4,000. They had another branch at Ampitiya (anothersuburb of Kandy) which the 1st defendant says they closed down afterreceiving the notice to quit, because it was being run at a loss. AtKatukelle (yet another suburb of Kandy) they have a room on rent forthe purpose of stocking their goods, and it is also used by their employeesas sleeping quarters. It is very doubtful whether any trading is donethere. The money lending business to which I have referred yields anet annual profit of about Rs. 8,000. The 1st defendant stated inevidence that he had been searching for other suitable premises afterhe received the notice to quit but he had failed to find any.
The learned Commissioner of Requests gave judgment for the plain-tiff and the defendants have appealed. On the very day he deliveredjudgment the plaintiff applied for execution of his decree (which waspresumably entered with the maximum degree of despatch) and thedefendants filed their petition of appeal together with an application toBtay execution of writ. The Commissioner after inquiry refused to stayexecution because he was not satisfied that irremediable or irreparabledamage would be caused to the defendants or their business by suchexecution since they had other places of business. I think the Commis-sioner failed to give due weight to the fact that it was a business and also
SANSONI J.—Suppiah Chettiyar v. Samara koou163
the principal place of that business that were under consideration :in such a case the advantage of continuing to occupy the same premisesand the proportionate disadvantage suffered by being forced to leave them,are not matters that should be regarded lightly. The defendants hadto seek relief from this order in this Court to obtain a stay of execution.I refer to this matter because I think the Commissioner has in his judgmentunder appeal also failed to appreciate the importance of the defendants’occupation of these premises since 1938. The value of a business such asthis would depend to a large extent on the length of lime that it has beencarried on in the same premises, for it is to those premises that theircustomers would naturally have acquired the habit of going. It is littleconsolation to them to be told that there are othei* premises available tothem “ round about Kandy ”, which is one reason given by the Commis-sioner in his judgment. In Katukelle they have a one-room store andin Katugastota they have a branch business. I do not think they wouldprove adequate substitutes for the premises in dispute. Another reasongiven by the Commissioner is that the defendants have “ sub-let aportion of the premises to a money lending business ”, and in veiw ofthis and the other reason I have already referred to the Commissionersays : “ I am unable to resist the conclusion that the need of the defend-ants is not so great as the need of the plaintiff who has invested a bigsum of money in the purchase of these premises to recommence a businessfor which he holds a licence and which he had to close down at Colombofor the reason that he had sustained losses. I also hold that the sub-letting by the defendants of a portion of the premises to a separate moneylending business is contrary to the provisions of the 'Rent RestrictionAct ”. Earlier in his judgment also the Commissioner refers to thesegrounds as the reasons which led him to hold in favour of the plaintiff.With regard to the alleged sub-letting to a money lending business,what happened was that the defendants took in a third partner andadded money lending to their other activities ; by doing this they werenot sub-letting any portion of the premises. Nor does it follow thatbecause the defendants chose to add money lending to their other pur-suits their need of these premises to carry on their business of dealingin sundries became any the lees. Apart from this the money lendingbusiness was started in 1946; even if one assumes wrongly that it amountedto sub-letting, there was no legal bar to such a sub-letting until 1949,when Section 9 of the Rent Restriction Act, No. 29 of 1948, first prohibitedit. With regard to the other reason given by the Commissioner, whileone symxjatliises with a man who invests a large sum of money in proj)erlyin the expectation of getting vacant possession, that factor only indicateshis anxiety to obtain the premises but is not a measure of the reasonable-ness of his claim. Mr. H. V. Perera asked me also to consider the needsof Murugesu who has been running a tobacco business in-these premisesfor many years as a tenant. He submitted that it was relevant to takeinto account the hardship that would be caused to Murugesu who isnow in the position of a sub-tenant. In England under the Rent andMortgage Interest Restrictions (Amendment) Act, 1933, the First Scheduleenacts :—(omitting unnecessary words) “ A Court shall have power tomake or give an order or judgment for the recovery of premises ….
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SANSON! J.—Suppiah Cheltiyar v. Samarakoon
or for the ejectment of a tenant … .if (h) the dwelling-house is
reasonably required by the landlord …. provided that an orderor judgment shall not be made or given … .if the Court is satisfied
that having regard to all the circumstances of the case, including thequestion whether other accommodation is available for the landlordor the tenant, greater hardship would be caused by granting the orderor judgment than by refusing to grant it ”. This Court has in manycases decided that it is after weighing in the balance the relative hardshipto the landlord and to the tenant that an order granting or refusingejectment should be made. The further question then is whether it ishardship to the landlord or the tenant alone that must be taken intoaccount, or whether there is a “ claim of third persons whose reflectedhardship, so to speak, may be taken into account ’’-—see Harte v. Framp-ton l- In that case Asquith L.J., in giving the judgment of the Courtof Appeal said, “ To attempt to define classes, hardship to whom andto whom alone (apart from the parties) can be taken into account (whetheras an element entering into the party’s hardship, or on its own account)appears to us an unhelpful line of approach to the construction of theproviso. The true view, we think, is that the county court judge shouldtake into account hardship to all who may be affected by the grant orrefusal of an order for possession—relatives, dependants, lodgers, guests,and the stranger within the gates—but should weigh such hardship withdue regard to the status of the persons affected and their ‘ proximity ’to the tenant or landlord and the extent to which, consequently, hardshipto them would be hardship to him. The inability to take in a guest forthe week-end would no doubt be assessed by the judge at nil. Theexclusion of a loved and trusted relation, whether dependant or" not,would weigh heavily in the scales ”. The learned Lord Justice refersto two earlier cases—Baker v. Lewis 2 and Cumming v. Daivson 3—whereit had been decided that the Court could consider the claims of thirdparties such as close relations even though they were not dependants.
It is not necessary for me to consider now whether the principle laiddown in those cases should be followed by this Court, though I inclineto the view that it should be followed. The more difficult question, ifI had to decide the matter, would have been whether Murugesu fellwithin the class of third persons referred to or whether such a class wouldbe confined to relatives and dependants. It seems to me that regardlessof Murugesu’s claims the defendants have shown that their right toremain in occupation is stronger than the plaintiff’s right to obtainpossession. I am satisfied that the defendants’ principal business aswell as their money lending business will be so adversely affected if theyare forced to leave these premises as to result in their being left with amere fragment of what they now own ; the plaintiff on the other handwould only be deprived of the extra profits he may earn if the newbusiness venture should achieve greater success than its predecessor.
For these reasons I hllow this appeal and dismiss the plaintiff’s actionwith costs in both Courts.
Appeal allowed.
1 (1947) 2 A. E. R. G04.
s
* (1047) K. B. 187.
(1942) 2 A. E. R. 6S3.