029-SLLR-SLLR-1978-79-V2-Fernando-v.-Jinadasa-and-others.pdf
187
CA
Fernando v. Jinadasa
Fernando v. Jinadasa and others
COURT OP APPEAL.
WIMALARATNE, P., AND TAMBIAH, J-S.C. (C.<A.) APPLICATION NO. 607/78.
MAY 9, 1979.
Writ of Certiorari—Application to quash order of Rent Board of Review—Jurisdiction of Rent Boards—Power to decided whether what was letwas ‘‘a business” or “business premises”—Natural justice—Need toobserve rules of—Opportunity to be given to parties to lead evidence insupport of their case—Order of Rent Board and Board of Review vitiatedfor non-compliance—Rent Act, No. 7 of 1972, sections 53 (2), 48.
Held
A Rent Board constituted under Rent Act. No. 7 of 1972, haspower to determine the question as to whether what had been let to atenant is a “ business ” or “ business premises ”.
In the present cese the decision of the Rent Board had been made inviolation of the principles of natural justice in that an opportunity wasdenied to the landlord to lead evidence in support of his contention thatwhat was let by him was “ a business ”, Rent Tribunals must hold ahearing if either party so wishes and it would be wrong to shut outevidence of this nature. The Board of Review, the members of whichwere respondents in the Court of Appeal did not appear to have givena ruling on this matter. Accordingly the decisions of the Rent Board andthe Rent Board of Review were quashed.
Cases referred to
Charles Appuhamy v. Abeysekera, (1959), 56 N.L.R. 243.
Sediris Slngho v. Wijesinghe (1965) 70 N-L.R. 185.
Nicholes Hamy v. James Appuhamy (1950) 52 N.L.R.137.
R. v. Kingston-upon-Hiill Rent Tribunal, (1949) 65 T.L.R. 209.
APPLICATION for a Writ of Certiorari.
J. W. Subasinghe, with V. P. A. Almeida, for the petitioner.
Cur. adv. vv.lt.
Bimal Rajapakse, for the respondent.
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Sri Lanka Law Reports (1978-79) 2 S. L.R
June 11, 1979.
WIMALARATNE, P.
The “Dolarosa Bakery” bears assessment number 1/60,Pallansena South, Kochikade, and is situated on just two perchesof land. The petitioner is its owner. He gave it on lease to the1st respondent for a period of 2 years from 1.10.71 on a considera-tion of Rs. 1,000. The notarial lease P2 describes the subjectmatter of the lease as “ the bakery known as Dolarosa bakerysituated on two perches of the land called Kongahawatfe,(within certain boundaries) together with the two tablesfor making dough, and a pair of coal tongs ”. At the end of theperiod a further indenture of lease P3 was executed for anotherperiod of one year from 1.11.73 on a consideration of Rs. 900. Thisindenture provided that the annual licence for the bakerywas to be obtained by the lesser, whilst the requisite paymentswere to be made by the lessee who undertook to conduct thebusiness in accordance with the rules laid down by the govern-ment. He also undertook to hand over possession at the end ofthe period of lease. A third lease bond P4 was executed for afurther period of one year from 1.11.74, also for a considerationof Rs. 900, but the clause relating to the license was deleted.
Nothwithstanding the termination of the lease P4 the lesseecontinued in occupation of the premises. The lessor thereuponcaused to be sent a notice requesting the lessee to hand overpossession. The lessee replied that after the expiry of the leasehe continued to be a monthly tenant protected by the Rent Act,No. 7 of 1972. The lessee went before the Rent Board of Negombo,and sought by his application dated 10.2.76 to obtain a certificateof tenancy under section 35 of the Act, and also for a determina-tion of the authorised rent of the premises.
On the first date of inquiry (17.5.76) the parties were represen-ted by counsel who stated their respective cases. Both counselwere agreed that the question for determination by the Board waswhether the subject matter of the contract of letting and hiringwas a “ business ” or “ business premises ”. The lessor relied uponthe decisions (1) and (2) for his case that what he let to the lesseewas a “ business ”. The lessee relied upon the decision (3) for hiscase that what he took on rent was “ business premises ”, and nota business. On the next date of inquiry (17.7.76) counsel for thelessor asked for an opportunity to lead oral evidence to establishthe position he had taken up. The Board put off inquiry stating
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Fernando v. Jinadasa (Wimalarafne, P.)
189
that in that event the lessee too would have an opportunity ofcalling evidence. On the next date of inquiry (13.9.76) the Boardstated that it would limit the oral evidence to that of the Notarywho attested P4. Accordingly Notary Maddumage was called as awitness. It is difficult to see how the evidence of the notary wasrelevant, considering the fact that the parties had embodied theterms of the contract in a notarial document. After recording hisevidence the Board made order, holding that what was let bythe lessor to the lessee was not a “ business ” but businesspremises. Accordingly the tenant was entitled to a certificate oftenancy under section 35 of the Act.
The lessor appealed from this decision to the Rent Board ofReview. The Board of Review took the same view as the RentBoard of Negombo that “the primary intention of the partiesas seen from the terms and conditions set out in VI (i.e. P4) hasbeen to let the premises in question to the respondent and notthe business as contended by learned Counsel for the appellant ”.The appeal was accordingly dismissed and the order of the RentBoard was affirmed.
The lessor has invoked the jurisdiction of this court to havethe orders of the Rent Board and of the Board of Review quashed.One of the contentions of learned counsel for him has beenthat the Rent Board acted without jurisdiction in determining thequestion as to whether what was let was a “ business ” or “pre-mises ”. The powers of the Board are defined in the Rent Act.Any exercise of powers other than those vested in the Boardby the enabling statute is ultra vires, and any determination1 onany matter over which it has no jurisdiction has no force or vali-dity in law.
Although the members of the Rent Board of Negombo havenot been made parties to this application, it is necessary to con-sider the validity of this argument. The powers of the Board arenot defined in any one section of the Act. They are wide andvaried and are contained in several provisions. One such provisionis section 35(2) which states that where the landlord of anypremises refuses to give the tenant a certificate of tenancy, theBoard shall, upon application made to it by the tenant, give tothe tenant a certificate of tenancy relating to such premises inthe prescribed form. Section 48 of the Act defines “premises”as meaning “ any building or part of a building together withthe land appertaining thereto “ Business premises ” means “ anypremises other than residential premises”.
190Sri Lanka Law Reports (1978-79) 2 S. L. R.
Now, there will be numerous occasions when the Board willbe called upon to decide whether premises are business premisesor residential premises. A good example is provided by section 4,which spells out the formula for determining the standard rent.Subsections 1 to 4 deal with the calculation of the standard rentof residential premises only. In the case of any premises to whichthe provisions of those subsections do not apply the standardrent per annum of the premises means, according to subsection6, such rent as may be fixed by the Board on application madeeither by the landlord or the tenant for the time being of suchpremises. If then, the statute enables the Board to determinewhether premises are residential or business premises whyshould there be a limitation by preventing the Board from deter-mining the question as to whether what has been let as a contractof letting and hiring is “ business premises ” or “ a business Iam of the view that when the question arises, on an applicationmade to the Board, as to the nature of a contract in respect ofpremises as defined in the Act, the Board has the power and thejurisdiction to decide that question.
Counsel for the 1st respondent has contended that in any eventthe petitioner cannot have a grievance because he readily sub-mitted to the Board’s jurisdiction to decide that question. Thelessor in fact invited the Board to decide that question. Counsel,in making his submissions before the Board, relied upon thedecided cases referred to earlier in support of his contention thatthe building on which the Dolarosa bakery stood was merelyaccessory to the business carried on there- There appears to bemuch substance in this contention.
Another argument of counsel for the petitioner has been thatthe Board acted in violation of the principles of natural justiceby not permitting the petitioner to lead evidence on the questionthe Board was called upon to decide. The Board permitted onlythe notary to be called as a witness. Section .39 of the Actprovides by subsection 3 that before making any order upon anyapplication under this Act, the Board shall give all interestedparties an opportunity of being heard and of producing suchevidence, oral or documentary, as may be relevant in the opinionof the Board. The lessor made an application on 17.6.76- for anopportunity to lead evidence. The Board agreed. But on thenext date the Board withdrew that permission and limited theoral evidence to that of the notary. The lessor had to establishthat what was let was a “ business ” in the sense of “ a goingconcern Had the lessor been given an opportunity of givingevidence he may have been able to satisfy the Board that abusiness had been caried on either by him or on his behalf for
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Perera v. Perera
191
a long period of time before the first letting to the lessee on
10.71. That opportunity was denied to the lessor. Rent tribunalsmust hold a hearing if either party so wishes. R. v. Kingston-upon-Hull Rent Tribunal, ex parte Black (4). If the lessor wishes togive evidence in relation to his transactions with the lessee, orin relation to the subject matter of the lease, it would be wrongfor a rent tribunal to shut out such evidence. The decision of theRent Board has therefore been made in violation of the principlesof natural justice, and is therefore subject to judicial review.
An aggrieved party is given a right of appeal to a Board ofReview, set up under section 40 of the Act, on a matter of law.Although the appellant-lessor complained to the Board of Reviewthat he had been unreasonably precluded from giving evidence toprove his case the Board of Review does not appear to have givena ruling on that matter.
For these reasons I would quash the decisions of the Rent Boardof Negombo and of the Rem Board of Review. Because theerror has been on the part of the Rent Board I would order nocosts of this application.
TAMBIAH, J.—I agree.
Application allowed.
Orders of Rent Board and Board of Review quashed.