Held –
Although the description given in the Assessment Register is relevant to determinewhether the premises are business premises or residential premises and affords primafacie evidence as to whether th'e premises have been assessed as residential orbusiness premises, such description is not conclusive on the issue whether thepremises are business premises' or residential premises.
Residential premises are premises for the time being occupied wholly or mainly forpurposes of residence and business premises mean any premises other than residentialpremises. The test is whether in fact persons reside (in the ordinary connotation of theword) in the premises or in the majority of the rooms which it comprises and if so theyare residential premises. Despite the description in the assessment register that thepremises were business premises the premises were occupied mainly for residence, byVithanage, his wife and his son who were Directors of the defendant-company andVithanage’s children. Hence the premises were residential premises and protected bythe Rent Act and the suit fails.
Semble ■„
The defendant’s claim that the tenant was Vithanage and noi the defendant and thatthe defendant-company could not have attorned to the plaintiff was rightly accepted byDistrict Judge.
Cases referred to:
Aloysius v. Pillaipody – S.C. Appeal No. 4/82. C.A. Appeal No. 72/77. M.C. {Civil)Jaffna 1167/L, S.C. Minutes of 2.12.82.
Gunatilleke v. Fernando {1954) 56 NLR 105.
Hussain v. Ratnayake (1967) 69 NLR 421.
APPEAL from the District Court of Mount Lavinia.
H. L de Silva .P.C. with K.l. Tillakeratnefor plaintiff-appellant.
Nimal Senanayake, P C. with Mrs. A. B. Dissanayake and L. M. Samarasmghe fordefendant-respondent.
Cur. adv. vult
April 3, 1985.
This is a tenancy action instituted in April 1976 wherein the plaintiffsued the defendant for recovery of arrears of rent and for ejectmentfrom the ground floor of premises No. 17, Dickman's Road, Colombo5. The defendant is0a Company named'Commercial Investments andFinance Co. Ltd. The action was on the basis that the premises in suitwere "excepted premises" within the meaning of regulation 3 of theschedule to the Rent Act. No. 7 of 1972; The plaintiff further pleaded
that on 24.2.76 the defendant was given notice to quit and to handover vacant possession of the premises on 31.3.76 but thedefendant, notwithstanding the termination of the tenancy, continuedto*remain in unlawful occupation.
The defendant in its answer averred (i) that a Company namedGenages Ltd. became the tenant under the plaintiff in respect of theentirety of the premises No. 17, Dickman’s Road, Colombo 5. in June1969 , (ii) that on or about 1st August 1971. Genages Ltd. rentedout on a written agreement (D1) to one B. A. Vithanage and his wifethe premises in suit (ground floor) ; (iii) that Vithanage went intooccupation of the ground floor on 1.8.71 having paid a deposit of Rs.4500 to Genages Ltd. and paid a monthly rental of Rs. 750 toGenages Ltd.; (iv) that on or about 1st July 1972, Vithanage becamethe tenant under the plaintiff and continued to pay rent at the rate ofRs. 700 up to November 1972 and thereafter at the rate of Rs. 750up to November 1975 ; (v) that the defendant Company specificallydenies that the Company is the tenant of the plaintiff ; (vi) that thepremises in suit are residential premises and are subject to the RentAct No. 7 of 1972
The main questions that arose for decision were, first, whether thepremises were business premises as contended forrby the plaintiff andsecondly, whether there was a contract of-tenancy between theplaintiff and the defendant Company. After trial, the District Judgeanswered both these issues against the plaintiff and this appeal is fromthat judgment.
It is not in dispute that if the premises are 'residential premises" theprovisions of the Rent Act No. 7 of 1972 would apply and theplaintiff's action must fail. The foundation of the action was that thepremises were 'business premises" to which the Rent Act did notapply. On this issue, Mr. H. L. de Silva, Counsel for the. plaintiff-appellant relied very strongly on the assessment registers P1,P2 and P3 wherein the premises were described as 'auctioneer'sshow rooms'. This description continued from 1969 to 1977.Mr. de Silva, submitted that P1. P2 and P3 afford at least strong primafacie evidence, if not conclusive evidence, in regard to the character ofthe premises. On the strength of these documents, counselcontended that the trial judge was in error when he held that thepremises were 'residential premises" within the meaning of the RentAct. It was urged that PI, P2 and P3 clearly show that they were'business premises' at all relevant times.
In support of his submission, Mr. de Silva cited the case of Aloysiusv. Pillaipody (1). This was a case where, as stated by Wimalaratne, J.at the commencement of the judgment, "Admittedly the premiseswere, on the date of action, business premises to which the Rent Act
No. 7 of 1972 applied'. The question that arose for decision
related to the calculation of the standard rent in terms of section 4{1)of the Rent Act. Section 4(1) enacts, inter alia, that the standard rentper annum means the amount of the 'annual value" specified in theassessment made, by the local authority in respect of the premises.'Annual value' is defined in section 48 of the Rent Act as "the annualvalue of such premises assessed as residential or business premises,as the case may be, for the purpose of any rates levied by any localauthority under, any written law and as specified in the assessment
under such written law'. It is in this context that
Wimalaratne, J. stated :
"Therefore the annual value entered in the register is necessarilylinked with the description of the property. The description of theproperty as entered in the register thus affords prima facie evidenceas to whether the property has been assessed as residential
premises or as business premisesThe entries also afford
material for determiningwhether premises are or are not
excepted premises".
The judgment therefore is an authority for the proposition that thedescription of the premises in the assessment register is refevant todetermine whether the premises are business premises or residentialpremises and affords prima facie evidence as to whether thepremises have been assessed as residential or business premises. Theentry in the assessment register is certainly not conclusive on thematter in issue in the present appeal.
Now, it is important to note that section 48 of the Rent Act defines'residential premises' as "any premises for the time being occupiedwholly or mainly for purposes of residence". The same section defines"business premises' to mean "any premises other than residentialpremises". These definitions, are identical with the. definitionscontained in the repealed Rent Restriction Act (Chap. 247). One of theearly decisions which considered the meaning of the expression"residential premises" in the Rent Restriction Act was Gunatilleke v.Fernando, (2). In an illuminating passage in the judgment of Fernando,A.J. (as he then was) he has expressed himself thus :
'The legislature has not in reality differentiated betweenresidential purposes and business purposes ; the relevant definitionspose only the question whether the premises are occupied for the'purpose of residence; and if not they are to be regarded as businesspremises whether or not they are actually business premises. Nor isthe legislature concerned with the character of the tenant'soccupation. In my view, therefore, the only issue to be determined iswhether in fact persons actually 'reside' (in the ordinary connotation. of the word) in the premises or in the majority of the rooms which itcomprises. If such is the case, the premises are residential withinthe meaning of the Act“.
This test was cited with approval by Tambiah, J. in the DivisionalBench case of Hussain v. Ratnayake, (3). Sivasupramaniam, J. in aseparate judgment in Hussain's Case (supra) took the view that 'underthe Act, the character of the premises, ‘residential’ or ‘business'depends not on the purpose for which the premises are taken on rentby the tenant or let by the landlord but on the nature of the physicaloccupation. The only test for 'residential premises' is whether thepremises are occupied (by the occupier or occupiers) wholly or mainlyfor the purpose of residence'.
. Turning now to the evidence in the instant case, the plaintiff statedthat the ground floor of the premises consists of 3 bed rooms,verandah, hall, kitchen, servants' room, and two bath rooms. Hisposition was that B. A. Vithanage was residing there and carrying on abusiness. Vithanage himself gave evidence and stated that while theoffice room was used for die purpose of the business of CommercialInvestments and Finance Co, Ltd. of which his wife, his son and hewere the directors, the rest of the ground floor was occupied by themembers of his family. The householder's list D13 shows that besidesVithanage and his wife 8 of his children reside in the premises in suit.The defendant’s contention that the premises are residential premisesis further supported by the agreement D1 upon which Vithanage andhis family entered into occupation of the premises on 1.8.71. Clause5 of D1 states 'The tenants shall use the said premises for thepurpose of their residence save and except one room in the frontportion of the said premises which may be used as an office only’.Clause 6 provides, "The tenants shall not use the said premises for anyother purpose". The finding of the trial Judge was that the plaintiff wasaware of D1. The mere fact that one of the rooms was used for thepurpose of the business of the Company does not make the premises
"business premises". Having regard to principles enunciated in thedecisions referred to above and on a consideration of the evidence inthe case I am satisfied that the District Judge was right in his findingthat the premises were "residential premises" within the meaning ofthe Rent Act, for they are premises occupied mainly for the purpose ofresidence.
In this view of the matter, the plaintiff cannot succeed in his actionand the question whether the tenant was the defendant-company orB. A. Vithanage does not really arise for consideration. Since this issuewas argued before us, I wish to briefly state my views. In support ofthe plaintiff's contention that the tenant was the defendant-companyand not Vithanage, Mr. H. L. de Silva, relied very strongly on thereceipts issued by the plaintiff for the payment of rent for the periodSeptember 1972 to November 1975. Mr. de Silva emphasised thefact that all the receipts were issued by the plaintiff in the name of thedefendant-company and not in the name of Vithanage. Mr. de Silvafurther pointed out (i) that the notice to quit (P10) was addressed tothe defendant-company, (ii) that by P12, Vithanage was specificallyinformed that the premises were rented out to thedefendant-company and not to him personally. There was no replyeither to P10 or P12. Mr. de Silva is no doubt right in his submissionthat the receipts for payment of rent and the failure to reply to P10 andP12 are relevant and important items of evidence which support theplaintiff's contention that the tenant is the defendant-company. On theother hand, there are the tenancy agreement D1 and the otherdocuments D2 to D9, D13, D14, D18 and D24 which support thedefendant's case. Moreover, having regard to the terms of D1, itseems to me that the submission of Mr. Nimal Senanayake, counselfor the defendant-respondent, that the defendant-company could nothave attorned to the plaintiff is well founded. On a consideration of thetotality of the evidence in the case, I find myself unable to take theview that the trial judge was wrong in concluding that the plaintiff hasfailed to prove that the contract of tenancy was with thedefendant-company.
For these reasons the appeal fails and is dismissed with costs fixedat Rs. 210.
MOONEMALLE, J.-1 agree.
Appeal dismissed.