037-SLLR-1984-V1-WIMALARATNE-v.-LINGANATHAN-AND-ANOTHER.pdf
CA
Wimalaratne v. Unganathan
247
WIMALARATNE■ V:
UNGANATHAN AND ANOTHERCOURT OF APPEAL.
E. DE SILVA. J. ANDT. D. G. DE ALWIS, J.'
A. No.772/75 (F| -D C. MT. LAVINIA 2491/REMARCH 1 AND 2, 1984.
Landlord and tenant-Guest house run for profit-Whether business premises orresidential premises ?~Test to be applied.
Where the question was whether premises where a guest house was being run forprofit were business premises or residential premises within the meaning given to theseterms in the Rent Act.-
Held-
Though the definitions given in the Rent Act of' residential premises * and' businesspremises * exclude each other the expressions ' purposes of .residence ’ and' purposes of business“ do not, and in a given case one may include the other. Thepurpose that is material is the tenant's purpose. The occupation contemplated in thedefinition of residential premises is not limited to actual physical occupation. The testfor deciding whether premises are residential premises or business premises within themeaning of the Rent Act is the user to which the premises are wholly or mainly put bythe occupiers for the time being. The user to which a tourist puts the room he occupiesin the guest house is that of residence for how short a period it may be. It is histemporary residence. Hence the premises in suit ar^ residential premises.
Cases referred to
Hepponstalt v. Corea, (1952) 54 NLR 214. 215.
'Standard Vacuum 09 Co. v. Jayasuriya. (1951153 NLR 22. 23.24
Gunatilleke v. Fernando. (1954156 NLR 105. 110.
,Hussain v. Ratnayake. (1967) 69 NLR (121.
APPEAL, from the District Court of Mt. Lavinia.
H. W. Jayewardene. Q.C. with J. V. C. Nathaniels. Miss Seneviratne and LaksftmanPerera for.plaintiff-appellant.
Defendants-respondents absent and unrepresented.'
Cur. adv. vuft.
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[1984} 1 SriLR.
April 6. 1984.
T. D. G. DE ALWIS, J.
The plaintiff sued the defendants for ejectment from premises bearingassessment No. 45 1/1, Galle Road, Wellawatte. The 1st defendantis the tenant of these premises and the 2nd defendant is thesub-tenant of the 1 st defendant. The main question in dispute waswhether these premises were residential premises or businesspremises as contemplated by the Rent Act, No. 7 of 1972. It wascommon ground that if the premises were business premises theywere excepted premises, and the plaintiff was entitled to judgment,and if they were residential premises the provisions of the Rent Actapplied and no cause of action accrued to the plaintiff.
The plaintiff let these premises to the 1 st defendant in about theyear 1968 at a rental of Rs. 1,000 per month. In about 1971 the 1stdefendant sub-let the premises to the 2nd defendant. The formertenant of the premises was one M. S. A. Gaffoor who ran a guesthouse in the premises and this business was bought by the 1stdefendant, who in turn sold that business to the 2nd defendant. Theguest house contains ten furnished rooms, and the charges are Rs.
per double room and Rs. 45.00 per single room per day. Nomeals are provided for the guests. The guests occupied the roomsusually for a day or two, and some guests stayed on for as long as twomonths. On these facts the learned District Judge held that thepremises were occupied wholly or mainly for the purposes ofresidence and were hence residential premises as contemplated bythe Rent Act. and dismissed the plaintiff's action. The plaintiff hasappealed.-
The Rent Act refers to two categories of premises, namely,resdential premises and business premises. Residential premises iaredefined as 'any premises for the time being occupied wholly or mainlyfor the purposes of residence* Business premises are not specificallydefined. But 'business premises means any premises that are notresidential premises'. So that all premises that are not residentialpremises are business premises. It is not disputed that the defendantruns a business in these premises. He runs the business of a guesthouse for profit.
In the case of Hepponstall v. Corea (1) the premises were taken onrent for the purpose of keeping a boarding house, and used in fact forthat purpose and also to serve as a residence for the tenant. In
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considering whether these premises were residential premises orbusiness premises. L. M. D. de Silva. J. adopted the test that thecharacter of the physical occupation of the premises by the tenantshould be examined. Having so enunciated the test to be applied hestated.The premises in question were used by the tenant to run ahostel and also to serve as a residence for herself. There can be nodoubt that the main use to which they were put was the running of ahostel. It was clear therefore that the premises were not occupiedwholly or mainly for residential purposes and therefore they are not
'residential premises'*’
In an earlier case that of Standard Vacuum Oil Co. v. Jayasuriya (2)Gunasekera, J. had taken a different view. There the defendantCompany used the premises as a residence for its manager and hiswife. The premises were furnished and provided with a staff ofdomestic servants at the expense of the Company arid it aiso paid theelectricity and telephone bills. Two motor cars belonging to theCompany were garaged there and both were used by the manager onthe company's business. The manager entertained the company'sguests in this house, and also accommodated visiting executives fromabroad in these premises. The house was also used for businessconferences after office hours and confidential papers of the companywere kept in the premises. The learned District Judge held "it appearsto be quite evident that although certain business transactions areeffected in the premises it is used mainly for the residence of themanager and his wife and on some occasions for the residence ofguests of the company." Gunasekera, J. said : ' I do not thinkthere can be any doubt that this is the correct view of the use to whichthe premises were put." Gunasekera, J. went on to stateI shallassume that the occupation that is contemplated in the definition of'residential premises' in section 27 (which is the same as. in thepresent section 48) is not limited to actual personal occupation andalso that the purpose that is material is the tenant's purpose. I
agreethat in this view of the matter the premises were
occupied wholly or mainly for the purposes of the Company’sbusiness. That circumstance, however cannot conclude the question.Although by definition 'business premises' and 'residential premises'exclude each other, 'purposes of business' and 'purposes ofresidence’ do not, and in a given case the one may well include theother, as for example in the case of a tenant who takes in payingguestsIn the present case 'the premises in question were
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occupied wholly or mainly for the purposes of the Company'sbusiness, but at the same time mainly for the purposes of residence.Being occupied mainly for the purposes of residence they wereresidential premises. The Act does not provide that premises Occupiedwholly or mainly for the purposes of business are 'businesspremises'."
In the case of Gunatilleke v. Fernando (3) the same question againcame up for decision. There Gunasekera, J. held that premises takenon rent by the proprietor of a school and used by him as a hostel forthe students and as a place of residence for the warden of the hosteland some of the teachers were residential premises within themeaning of the Rent Act. In that case H. N. G. Fernando A. J. (as hethen was) whilst agreeing with Gunasekera, J. stated at page 110:‘The Legislature has not in reality differentiated between residentialpurposes and business purposes; the relevant definitions pose onlythe question whether the premises are occupied for the purposes ofresidence, and,if not they are to be regarded as business premiseswhether or not they are actually business premises. Nor is theLegislature concerned with the character of the tenant's occupation.In my view therefore, the only issue to be determined is whether in factpersons actually 'reside' (in the ordinary connotation of the word) inthe premises or in the majority of the rooms which it comprises. Ifsuch is the case, the premises are residential within the meaning of theAct, and the circumstances in which the residents came to reside inthe premises and their contractual relationships, if any, with thetenant, do not alter the character which the premises acquire byreason that persons reside there'.
The question whether premises taken to be run mainly as a boardinghouse are ‘residential premises' or 'business premises' within themeaning of the Rent Act was referred to a bench of three judges inview of the conflict of authorities on this point. That is the case ofHussain v. Ratnayake (4). In this case it was held that premises takento be run as a boarding house are 'residential premises' and not‘business premises'. Tambiah, J. cited with approval the passage ofthe jcdgment of Fernando. A. J. in the case of Gunatillake v. Fernando{supra) referred to above, and held that the case of Hepponstall v.Corea {supra) was wrongly decided. Sivasubramaniam, J. rejected theargument that the occupation referred to in the definition of residentialpremises is occupation only by the tenant and he also ruled thatHepponstaU’s case was wrongly decided. With the judgments of
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Wimatarame v. Linganathan (T. D. G. deAlwis, J.)
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Tambiah, J. and Sivasubramaniam, J., H. N. G. Fernando C. J.agreed. Thus now the view is well established that the test fordeciding whether premises are residential premises or businesspremises within the meaning of the Rent Act is the user to which thepremises are wholly or mainly put by the occupiers of those premisesfor the time being.
In the instant case on the evidence that has been accepted by thelearned District Judge the rooms in these premises are wholly ormainly used for the occupation of tourists or foreign guests, usually fora few days at a time. Learned counsel for the plaintiff-appellant soughtto distinguish the facts of the present case from those of the divisionalbench case of Hussain v. Ratnayake. He referred to the dicta ofFernando, A. J, in Gunatillake v. Fernando (supra) at page 110 whichwas cited with approval by Tambiah, J. in the case of Hussain v.Ratnayake (supra) where Fernando, A. J. has stated : ' In my viewtherefore, the only issue to be determined is whether in fact personsactually reside’ (in the ordinary connotation of the word) in thepremises or in the majority of the rooms which it comprises Hesubmitted that tourists occupied rooms in these premises for veryshort periods and they cannot be said to reside there in the ordinaryconnotation of the word. He submitted that residence necessarilyinvolves some degree of permanency. Accordjngly in the case of aboarder he generally pays his boarding fees monthly, and lives orintends to live in the boarding house for some considerable period oftime, whereas in the case of a tourist it was submitted there was noelement of any permanency in his occupation. The meaning of theword 'reside' as contained in the Shorter Oxford Dictionary, 3rdedition, is as follows * to settle ; to take up one's abode or station :to dwell permanently or for a considerable time; to make one's settledor usual abode; to live in or at a particular place.' It was submittedthat these dictionary meanings would show that residence requiressome degree of permanency.
But however the test to be applied in the present case would be theuser to which the persons occupying rooms in this guest h6use,namely the tourists, put them to. We are accustomed to the termtemporary residence. That would mean a place where one lives for ashort period of time. Could it not be said that when a tourist occupiesa room in a guest house for a short period when he is in this country itis his temporary residence ? It would thus appear that the use to.which
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a tourist puts the room he occupies in this guest house is that ofresidence for how short a period it may be. It would appear thatGunasekera, J. had this view in mind when in the case of StandardVacuum Oil Co. v. Jayasuriya {supra) at page 23 he said : “ Althoughby definition ‘business premises' and 'residential premises' excludeeach other, 'purposes of business' and 'purposes of residence' donot: and in a given case the one may well include the other, as forexample in the case of a tenant who takes in paying guests."
I would accordingly affirm the judgment of the learned DistrictJudge that the premises in question in this case are residentialpremises, and dismiss the appeal without costs.
B. E. DE SILVA, J. -1 agree.
Appeal dismissed.