HOWARD C-J.—Abeyesekere v. The Colombo Municipality.
1941Present: Howard C.J.
ABEYESEKERE v. THE COLOMBO MUNICIPALITY.
105—C. R. Colombo, 56,502.
Assessment—Premises occupied by owner—Basis of assessment—Burden ofproof—Municipal Councils Ordinance, s. 4.
The value of property for purposes of assessment, where the ownerand occupier are one, must be ascertained by determining the rent ahypothetical tenant would give for the property.
The burden is on the owner by the application of the profits’ orcontractor’s basis of assessment or by a comparison of his property withproperties of a like nature to establish the annual value he claims to putupon the property.
PPEAL from a judgment of the Commissioner of Requests,Colombo.
N. Nadarajah (with him B. C. Ahlip and P. A. Senaratne), for the 'plaintiff, appellant.
H. V. Perera, K.C. (with him S. Nadesan), for the defendant,respondent.,
Cur. adv. vult.
February 7, 1941. Howard C.J.—
This is an appeal from a judgment of the Commissioner of Requests,Colombo, dismissing the plaintiff’s action with costs. The plaintiffclaimed that the assessment made on his premises No. 3, KensingtonGardens, Bambalapitiya, should be reduced from the assessment ofRs. 1,150 per annum for the year 1939 made by the defendant to one ofRs. 900 per annum. In finding for the defendant the Commisdloner
HOWARD C.J.—Abeyesekere v. The Colombo Municipality.
stated that he was not prepared to accept the opinions of Mr. Gomes,Mr. Gonsal, and Mr. Molligodde, who were called by the plaintiff to statewhat a tenant would be prepared to pay for the premises, in preferenceto that of Mr. Ernst, the Assistant Municipal Assessor, who had based,checked, and justified his assessment by a comparison of actual rentspaid by tenants for similar buildings in the same street. Mr. Ernst’sassessment was also based on what is known as the square foot method ofassessment which the learned Commissioner seemed to regard as havingbeen accepted as a proper basis in England and elsewhere. He had nodoubt as to its suitability as the basis of assessment in the present case.It is true that reference is made to the square foot method of measure-ment in various local cases. In Abdul Haniffa v. Municipal Council,Colombo 1 de Sampayo J. said that the annual value of property cannotbe determined, like a sum in arithmetic, by calculating the number ofsquare feet in the floor area, but many considerations both personal andcommercial > enter into the question. In Weerasekera v. MunicipalCouncil, Colombo2 this method is mentioned but no comment is madeon its applicability. In Soysa v. Municipal Council, Colombo1 Soertsz J.throws doubt on the results achieved by this method. Moreover scrutinyof the standard treatises on Rating, such as Ryde and Faraday, indicatesthat the three methods of ascertaining the rateable value are the followingbases:-—(1) competition, (2) profits-, (3) contractor’s. Nowhere is thereany mention of the square foot method. Nor has any case from theEnglish Courts- been cited as authority for the proposition that it isemployed as a basis of assessment or as an aid to ascertain the rateablevalue on one of the three methods referred to by these writers.
It must, however, be borne in mind, as laid down in Weerasekera’s andSoysa’s cases, that the burden of proof was on the plaintiff to establishthat the defendant’s assessment was wrong. In an attempt to dischargethat burden the plaintiff himself testified to the fact that in 1935 heoccupied the premises ..as a tenant at a monthly rental of Rs. 90.Also, that in December, 1935, he purchased the property for Rs. 16,500.The rateable value for 1935, 1936, and 1937 was fixed at Rs. 1,000, for1938 the assessment was reduced to Rs. 900 oh a plea put forward by theplaintiff that one room of the premises had been rendered totally unfit asa living room by the erection of the adjoining house cutting off light andair. The plaintiff estimated that this erection had depreciated thevalue of his property by Rs. 1,500. He also stated that he had made noextensions or alterations to the building and that rents had not gone upin the locality since 1935. The plaintiff’s case was supported by theevidence of Mr. Molligodde who stated that the house in which he lived,for which he paid Rs. 95 a month, was much better than the plaintiff’sfor which he would consider Rs. 80 too much. Mr. Gonsal, a CharteredAccountant, also gave evidence for the plaintiff and stated that Rs. 90was a fair rental. Mr. Gomes, an owner of several houses in Bambala-pitiya and Wellawatta, stated that Rs. 1,500 would be a reasonabledepreciation by reason of the building of the wall. He also consideredNo. 4 of which he was the owner was better than the plaintiff’s house,
j 5p. c. L. R. 7.* 40 N. L. R. 419.
* 41 N. L. R. 1.
HOWARD C.J.—Abeyesekere v. The Colombo Municipality. 239
The rental was Rs. 90. He also stated that rents had decreased in 1939aS compared with 1938 owing to the building of new houses. Heconsidered Rs. 95 the highest rent that a tenant would pay for theplaintiff's house. The question arises as to whether the plaintiff hasdischarged the burden of proof imposed upon him by law. The assess-ment is based on “ annual value ” which is defined in section 4 of theMunicipal Councils Ordinance, as follows : —
“ Annual value means the annual rent which a tenant_might reason-ably be expected, taking one year with another, to pay for any house,building, land, or tenement if the tenant undertook ’to pay all publicrates and taxes, and if the landlord undertook to bear the cost ofrepairs, maintenance and upkeep, if any, necessary to maintain thehouse, building, land, or tenement in a state to command that rent:
“Provided that in the computation and assessment of annual valueno allowance or reduction shall be made for any period of non-tenancyWhatsoever ” ‘
“Annual value” is therefore determined by the rent a tenant would payfor the property to be rated. As a broad principle it was laid down inHayward v. Brinkworth, Overseers' that the rent actually paid is primafacie evidence of value, but it is not conclusive evidence: the rent,however, recently agreed to be paid by a perfectly free occupier would bea criterion of value difficult to set aside. This principle, formulatedalso by Faraday and Ryde, has been accepted by the Ceylon Courts inSilva v. Colombo Municipal Councils, Weerasekera v. Municipal Council,Colombo (.supra), and in Soysa v. Municipal Council, Colombo (supra). InWeerasekera’s case the appellant succeeded in his appeal on the fact thatthe rental of Rs. 65 that he was receiving for the year in question and theprevious two years in respect of the premises was a fair test to apply indetermining the annual value. Similarly in Soysa’s case the Courtaccepted Rs 45, the actual rent recently fixed, as the basis. It will beobserved that in both of these cases the annual value was determinedon the basis of rent actually being paid at the time of assessment. Inthe present case rent has not been paid for the premises since 1935. Inthis connection the following passage from the judgment of Lush J. inMetropolitan Board of Works v. West Ham3 is an point: —
“ The rateable quality of property is not to be determined by whatit once was, or may hereafter become. If a piece of fertile land wereto be covered by the ashes of a volcano or by an inundation, it wouldhave no rateable value so long as it continued in that condition. Soalso, on the other hand, a barren rock, so long as it remains a barrenrock, has no rateable value ; but the moment it is worked as a quarryit becomes rateable. The rateable quality of the property must bedetermined by what it is at the time the rate is made.”
Again in Durham County Council v. Tanfield Overseers ‘ it was laid downthat the test is not what the value was in the preceding year, but what atenant would give on a yearly tenancy commencing at the date ofassessment. In this case, the owner and occupier are one and the value
1 10 L. T. N. S. 60S.* (1870) L. R. 6 Q. B. 193.• 3 Bed. 163.* (1923) K. B. 333.
240HOWARD C.J.—Abeyesekere v. The Colombo Municipality.
of the property must be ascertained by determining the rent a hypotheti-cal tenant would give for the property—London County Council v.Erith In doing so all possible occupiers including the owner must betaken into account as possible tenants. In this case the occupier doesnot pay actual rent for the premises and the question of his obtainingthem on a competitive basis does not arise. The appellant has attemptedto establish Jiis case by a comparison of his property with other propertiesof a like nature which are the subject of letting, a method recognized inLiverpool Corporation v. Llanfyllin Assessment Committee * and Pointer v.Norwich Assessment Committee Counsel for the appellant has also hadrecourse to the profits and contractor’s basis of assessment. The formerpresupposes a calculation of the rent which would commend itself to atenant upon an estimate of the profits resulting from the occupation ofthe premises. The contractor’s basis presupposes an estimate 6f therent by reference to the interest which a contractor would expect forthe money he had expended in buying the land and erecting the buildingsof which the premises consist. Can it be said that the appellant and hiswitnesses have by the application of the profits or contractor’s basis ofassessment or by comparison of the premises with others of a like natureproved that the assessed value should be fixed at a sum of Rs. 900 perannum ? Reference has been made to the purchase money paid in 1935,but no valuation is before the Court of its present value. I do not thinkthe burden of proof imposed on the appellant has been discharged.
In these circumstances the appeal is dismissed with costs.
1 (1893) A'. C. 562
* (7922) 2 K. B. 471.
(7299) 2 Q. B. 14
ABEYESEKERE v. THE COLOMBO MUNICIPALITY