151-NLR-NLR-V-47-GUNARATNE-Appellant-and-THELENIS-et-al-Respondents.pdf
Ounaratne v. Thelenis.
433
1946 Present: Keuneman SJP.J., Wljeyewardene and Jayetfleke JJ.GUNARATNE, Appellant, and THELENIS et al., Respondents.332—C. R. GaOe, 25,044.
Lessor and lessee—Expiry of term of notarial lease—Right of lessee to plead thebenefit of Rent Restriction Ordinance thereafter—Rent RestrictionOrdinance, No. 60 of 1942, s. 8.
A lessee can plead the benefit of section 8 of the Rent RestrictionOrdinance, No. 60 of 1942, where the premises in question were occupiedby him under a notarial lease which has terminated by effluxion of time.The terms of the Rent Restriction Ordinance are wide enough to applyto premises leased as well as to premises held on a tenancy from monthto month.
T
TTTS was a case referred by Howard C.J., under section 38 of theCourts Ordinance, to a Bench of three Judges.
The reference was as follows :—
“ The appellant in this case appeals from a judgment of the Com-missioner of Requests, Galle, dismissing his action with costs. Theappellant brought his action on an Indenture of Lease dated December2, 1939, whereby he let to the defendants the premises described inthe schedule for a period of four years terminating on November30, 1943, at a monthly rental of Rs. 30. The appellant furtheralleged that notwithstanding the termination of the lease on November30, 1943, the defendants have failed to deliver possession of thepremises and were in unlawful occupation thereof to the appellant’sdamage of Rs. 50 per month. The appellant claimed Rs. 250 as damages.The defendants in their answer pleaded that the premises in questionwere, in the Municipal limits of Galle and that the appellant cannotmaintain this action as he has failed to comply with section 8 of theRent Restriction Ordinance, No. 60 of 1942. The Commissioner foundthat the defendants were bound by the terms of the agreement embodiedin the lease of December 2, 1939, but the defendants can plead thebenefits of section 8 of the Rent Restriction Ordinance. He also foundthat the defendants are the tenants of the appellant after December 1,1943, and that the appellant cannot maintain this action in view ofsection 8 of the Rent Restriction Ordinance, No. 60 of 1942.
“ Section 8 of the Rent Restriction Ordinance is worded as follows :—-* Notwithstanding anything in any other law, no action or pro-ceedings for the ejectment of the tenant of any premises to whichthis Ordinance applies shall be instituted in or entertained by anyCourt, unless the Assessment Board, on the application of the landlord,has in writing authorised the institution of such action or proceedings :Provided, however, that the authorisation of the Board shall notbe necessary in any case where—
{a) rent has been in arrear for one month after it has become due or(6) the tenant has given notice to quit; or19—XLvn.
1J. W. A 64214-571 {8/46)
434
Qunaralna v. Thelenie.
the premises are, in the opinion of the Court, reasonably required
for occupation as a residence for the landlord or any memberof the family of the landlord or for the purpose of his trade,business, profession, vocation or employment; or
the tenant or any person residing or lodging with him or being
his sub-tenant has, in the opinion of the Court, been guiltyof conduct which is a nuisance to adjoining occupiers, orhas been convicted of using the premises for an immoral orillegal purpose, or the condition of the premises has, in theopinion of the Court, deteriorated owing to acts committedby or to the neglect or default of the tenant or any suchperson;
For the purposes of paragraph (c) of the foregoing proviso, “ memberof the family ” of any person means the wife of that person, or anyson or daughter of his over eighteen years of age, or any parent,brother or sister dependent on him
“ The only point that requires consideration is whether the Commissionerwas right in holding that these are premises to which the Ordinanceapplies. The exact point was considered by de Silva J. in Asia Umma v.Coder Lebbe 1. In that case the learned Judge held that the Ordinanceseemed to contemplate the case of a tenancy which is terminable bynotice and though there is a reference to the rent provided in a lease insection 5 of the Ordinance that reference is to the rent payable duringthe term of the lease. At the termination of the lease there is no longera tenancy as between the parties. Neither the attention of de Silva J.in the case I have mentioned nor of myself in this case was invited to thecase of Cruise v. Terrell 2 which indicates that in England a different viewhas been taken of the matter now under consideration. In these circum-stances as the question is one of considerable importance I refer theappeal under section 38 of the Courts Ordinance for decision by threeJudges
N.Nadarajah, K.C. (with him E. B. Wikramanayake), for the plaintiff,appellant.—
The question referred for determination is whether section 8 of theRent Restriction Ordinance, No. 60 of 1942, applies to a lessee where theterm of the lease has expired. In Asia Umma v. Coder Lebbe 3 de Silva J.held that section 8 did not apply to an overholding lessee, but a differentview has been taken in Cruise v. Terrell (supra).
In the Ordinance No. 60 of 1942, section 2 deals with the premiseswhich were to come under the operation of the Ordinance. Section 3restricts the increase of authorised rent. Sections 4, 5 and 6 deal .withauthorised rent, standard rent and permitted increases. Section 7prohibits premiums and other additional payments. Thus sections2 to 7 deal with the premises as such. On the other hand sections 8, 9and 10 deal with the personal rights and duties of landlord and tenantas such.
1 (1946) 47 N. L. R. 230.* (1922) 1 K. B. 664.
• (1946) 47 N. L. R. 230.
Gimaratne v. Thelenis.
435
The term “ tenant ” used in various contexts has an extended meaningbut when used in relation to landlord has one meaning only in our law,namely, a person holding a month-to-month tenancy of premises from aperson authorised to give them on rent, i.e., landlord.
Under our law a lessee on the expiry of the lease becomes a trespasserso that on the expiration of the lease such a person cannot be called atenant. See Abdul. Rahim v. Hasamal1 ; Nathan : Common Law ofSouth Africa, para 916 ; Wille : Landlord and Tenant, p. 247. TheEnglish Rent Restriction Acts are materially different from our RentRestriction Ordinance. Under section 15 (1) of Rent Restriction Act10 and 11 Geo. v., ch. 17 provision is made for overholding lesseesby creating a statutory tenancy. A statutory tenant cannot thereforebecome a trespasser. See Felse v. HUl2. There is no provisioncorresponding to section 15 (1) of the English Act in our Ordinance.
The termination of a lease is a bilateral act agreed upon beforehandboth by the lessor and lessee but a monthly tenancy under common lawcan be terminated by the landlord giving a month’s notice. The reason-able interpretation of section 8 is that it only curtails the common lawright of the landlord to terminate the tenancy by his unilateral act.Thus section 8 would not apply to.leases because the termination of thelease has already been agreed upon by lessor and lessee beforehand.
N. E. Weerasooria, K.C. (with him A. M. CharavanamuMu and B.Senaratne), for the defendants, respondents.—
It is clear that the Rent Restriction Ordinance, No. 60 of 1942, appliesto leases. The terms “ landlord ” and “ tenant ” are not Roman-DutchLaw terms. They have been borrowed from English Law and are usedto mean lessor and lessee. The term tenant includes a lessee. SeeWille : Landlord and Tenant, p. 1.
Further there are clear indications in the Ordinance itself that it ismeant to apply to leases as well. Section 2 applies to all premises andsections 3, 4 and 5 lay down authorised rents and standard rents to allpremises. No distinction is made where the premises are held on amonthly tenancy or under a lease for a stated period. Furthermoreleases are definitely referred to as coming under the purview of theOrdinance, e.g., proviso to section 5 (1), proviso to section 5 (2) andproviso to section 6 (2). Thus the Ordinance takes in all personsoccupying premises on payment of rent.
“ Tenant ” under Rent Restriction Law includes a person occupyingpremises under the statute even against the will of the landlord.See Keeves v. Dean 3 ■ Remon v. City of London Rent Property Co., Ltd 4.Cruise v. Terrell (supra) is exactly in point. English courts have decidedthat Rent Restriction Act 10 and 11, Geo. v., ch. 17 applied to alltenants irrespective of section 15 of that Act. Section 15 of that Actwas only one of the indications that the Act applied to all tenants.
N. Nadarajah, K.C., in reply.—
English cases have no application because statutory tenancy is notcreated by our law.
(1911) 1 C. A. C. 5.
(1924) 130 Law Times Reports 76.
(1924) L. J. 93, K. B. 203 at 207.(1920) L. J. 89, K. B. 1105 at 1107.
436
KEUjnEMAN S.P.J.—Ounaratna o. TKelenis.
The plaintiff in this case can ask for ejectment of the defendants(tenants) under proviso (6) to section 8. Agreement to quit on a certaindate in the lease can be regarded as notice by the tenant to quit.
Cur. adv. wit.
October 16, 1946. Kettnkman S.P.J.—
This matter has been referred to us by the learned Chief Justice undersection 38 of the Courts Ordinance to determine the question whetherthe defendants can plead the benefit of section 8 of the Gent RestrictionOrdinance, No. 60 of 1942, where the premises in question were occupiedunder a notarial lease which has terminated by effluxion of time.
In the reference the Chief Justice drew attention to the decision ofde Silva J. in Asia Umma v. Coder Lebbe 1 and to the fact that in Englanda different view was taken in the same connection—see Cruise v. Terrell2.
The argument of tne appellant in short was that section 8 applied onlyto the case of a monthly tenancy and not to the case of a lease for a fixedterm. In the present case the plaintiff by PI dated December 2, 1939,leased the premises in question to the defendants at Gs. 30 a monthfor a term of 4 years expiring on November 30, 1943. The lessees agreedthat at the expiration of the lease they would peaceably and quietlysurrender and give up the premises to the lessor, and that in the event oftheir failure to do so they would pay damages at Gs. 50 per month forevery month or part of a month for which possession was withheld fromthe lessor.
In Asia Umma v. Coder Lebbe (supra) de Silva J. said.—“ The pro-visions of the Gent Gestriction Ordinance seem to contemplate thecase of a tenancy terminable by notice, and though there is referenceto the rent provided in a lease in section 5 of the Ordinance, thatreference is to the rent payable during the term of the lease. Where aperson enters into a lease for a definite term it seems to me that therelationship of landlord and tenant expires at the end of the term, andit cannot therefore be said that there is a tenancy between the parties.I am therefore of opinion that the Rent Restriction Ordinance has noapplication in this case ”.
I think it is necessary to examine the terms of our Rent GestrictionOrdinance to determine the question referred to us. The first sectionthat requires our attention is section 8, which runs as follows :—
“ Notwithstanding anything in any other law, no action or proceedingsfor the ejectment of a tenant of any premises to which this Ordinanceapplies shall be instituted in or entertained by any court unless theAssessment Board, on the application of the landlord, has in writingauthorised the institution of such action or proceedings ”.
This is followed by a proviso which declares that the authorisationof the Board is not necessary in certain cases, of which the followingmay have application to this case :—(a) that rent has been in arrearfor one month after it became due, or (6) the tenant has given notice toquit, or (c) that the premises are in the opinion of the court required as aresidence for the landlord or any member of his family, or for the purposesof his trade, business, profession, vocation or employment.
1 (1946) 47 N.L.R. 230.
» (1922) 1 K.B. 664.
FCEUNEMAN 3.P.J.—Qunaratne v. Thelenia.
437
One of the first points argued for the appellant was that the term“tenant” in section 8 has no application to a lessee whose term has expired.It was first contended that the terms “landlord” and “tenant” had no realapplication to the case of a lease. I do not agree with this. No authorityhas been cited in support of it. The essence of a contract whether forlease or for monthly tenancy is the contract of letting and hiring, and inmy opinion the phrases “landlord” and “ tenant ” are applicable bothin the case of a lease and of a monthly tenancy. Further, under section10, “landlord” in relation to any premises means the person for the timebeing entitled to receive the rent of such premises. This language iswide enough to cover a lessor of the premises. I do not think the word“ tenant ” is inappropriate to describe a lessee, or that a restrictedmeaning should be given to the word “ tenant ”.
The further point was urged that the word “ tenant ” cannot beproperly applied to a lessee after the expiration of the lease. It was saidthat by effluxion of time tenancy expired and the overholding lesseemust be treated as a trespasser, and no longer a tenant. I do not agreewith this argument either. Section 8 itself contains in proviso (8) areference to the case where a tenant has given notice to quit. Thisproviso will certainly cover the case of a monthly tenancy, and in thatcase the tenant can certainly determine the tenancy by giving due noticeto quit. Yet in the proviso he is still referred to as a tenant althoughthe contract of tenancy may have been determined. In my opinionthe word “ tenant ” includes a person who has at one time occupied theposition of a tenant, even though at the time of action the tenancy wasno longer in existence.
In England, under the Rent Restriction Acts, a similar meaning hasbeen assigned to the word “ tenant ”. In Remon v. City of London RealProperty Co., Ltd.1 Bankes L.J. said—“ It is, however, clear that in allthe Rent Restriction Acts the expression tenant has been used in a special,a peculiar sense, and as including a person who might be described as anex-tenant and who had continued in occupation without any legal rightto do so, except possibly such as the Acts themselves conferred upon himThis finding was directly approved by Warrington L.J. and indirectlyby Lord Stemdale M.R. in Cruise v. Terrell (supra). In my opinionthe finding in these cases is equally applicable to the Ceylon Ordinance.
The further point has been urged by counsel for the appellant that theRent Restriction Ordinance applies only to monthly tenancies and notto a lease for a fixed term. A similar argument was advanced inEngland in the case of Cruise v. Terrell (supra) and rejected by all theJudges on the ground that the section (12 of the Act of 1920, 10 and 11Geo. v., ch. 17) which applied to all lettings must also apply to a lettingfor a term certain, and further that expressions in various other sectionsof the Act supported that contention.
The Ceylon Ordinance is not in exactly the same terms as the EnglishAct, but section 2 (2) applies to all premises which are used or occupied orintended to be used or occupied for the purposes of residence, or for thepurposes of any trade, business, undertaking, profession, vocation or
* (1921) 1 K. B. 49.
1*J.N.A 64214 (8/46)
438
KEUMEMAN S.P.J.—Ounaratne v. Thelenis.
employment, or for any other purpose whatsoever. This is very widelanguage, and no attempt has been made in the Ordinance to draw anydistinction between monthly tenancies and leases for a fixed term. AsI have already pointed out, the words “ landlord ” and “ tenant ” areequally appropriate to monthly tenancies and to leases.
Further, under section 5 (1) the “ standard rent ” broadly speakingis the annual value of the premises assessed by the local authority as atNovember, 1941, but the proviso states that where premises are let at aprogressive rent under a lease the standard rent is the rent payable inrespect of that period under the terms of the lease. I think this is a clearindication that premises leased are also affected by the Ordinance.
Reference may also be made to a similar proviso in section 5 (2). Thespecial reference to leases at a progressive rent is necessary because inthose cases there was a variation in the rent from time to time. Butif such leases are affected by the Ordinance I think it follows that leaseswhere there was no variation in the rent must equally be affected.
Further, in section 6 (2) there is a reference to rents payable under theterms of the tenancy by the month or the quarter or the half year. Thisappears to contemplate continuing tenancies for periods of more than onemonth, and under our law the continuing tenancy from month to month isthe only valid tenancy recognised in the common law, and we do nothave the continuing tenancy from year to year or for other fractions ofthe year, though perhaps they may be created by a lease.
On the matter referred to us, I am of opinion that the terms of ourRent Restriction Ordinance are wide enough to apply to premises leasedas well as to premises held on a tenancy from month to month. AlsoI do not see any reason why the legislature should have drawn adistinction between the two tenancies.
In his reply and at the very end of his argument, counsel for theappellant endeavoured to raise a new point which has not been referredto us. He contended that the agreement by the lessees in the lease PIto surrender and give up possession of the premises at the expirationof the lease amounted to a notice to quit given by the tenant underproviso {b) of section 8.
It is a matter of doubt whether this agreement in the deed can be re-garded as a notice to quit, more especially in this case where there wasthe further agreement that in the event of the failure of the lessees todeliver over possession they would pay damages at an enhanced rate.I do not think it is necessary to consider this point for several reasons.
First, it has not been raised in the plaint as a ground on which theauthorisation of the Assessment Board is unnecessary. In Maroof v.Leajf1, I have expressed the opinion that in view of section 8 “ it is nownecessary for a plaintiff to allege that he comes in under one of thesecases ”, i.e., under provisos (a) to (d). Farther there is no issue in the casewhich specifically raises this matter. Also this was not at any stage ofthe trial raised as a ground for dispensing with the necessity of authorisa-tion by the Assessment Board. Obviously the point was not raisedbefore the Chief Justice in appeal, nor has it been referred- by him to the
1 {1944) 46 N. L. R. 25.
KEUNEMAN S.P. J.—da Zoysa V. Qunasekera.
439
Divisional Court. In my opinion this matter cannot now be consideredby this Court. The arguments of the counsel for the appellants cannothe sustained.
The appeal is accordingly dismissed with costs.
Wueyewabdenb J.—I agree.
Jatbuleke J.—I agree.
Appeal dismissed.