Weerasekera v. Municipal Council, Colombo.
Present: Poyser S.P.J.
WEERASEKERA v. MUNICIPAL COUNCIL, COLOMBO.
95.—C. R. Colombo, 34,924.
Annual value—Basis for determination—Rent paid by tenant a fair test—
Municipal Councils Ordinance, No. 6 of 1910, s. 3.
The actual rent paid by a tenant is not decisive in determining theannual value of premises as defined by section 3 of the Municipal CouncilsOrdinance, No. 6 of 1910, but it is generally a fair test to apply in theabsence of bad faith on the part of the landlord or the tenant andprovided the rent has not been fixed in view of special circumstances.
Silva v. Colombo Municipal-Council (3 Balasingham 163) followed.
POYSER S-P.J.—Weerasekera v. Municipal Council, Colombo.
^ PPEAL from an order of the Commissioner of Requests, Colombo.
N. Nadarajah (with Him H. W. Thambiah), for plaintiff, appellant.
L. A. Rajapakse for defendant, respondent.
Cur. adv. vult.
December 1, 1938. Poyser S.P.J.—
In this case the appellant claimed that the annual value of his premisesNo. 88, Dean’s road, be reduced for the year 1937, from Rs. 850 to Rs. 650.The Commissioner has dismissed his claim and the appeal is against thatdecision.
The material facts are not in dispute and are as follows:—The buildingin question, together with other adjacent buildings belonging to theplaintiff, were constructed in 1929 out of money paid to him by theMunicipality in respect of the acquisition of some land. The premisesin regard to which this claim is made were assessed in 1932 at Rs. 650 ayear. There was a similar assessment for 1933 and although in 1934it was assessed at a higher figure on objection it was reduced again toRs. 650. In 1936 it was assessed at Rs. 1,000 and on objection it wasreduced to Rs. 850. The appellant states that he was not satisfiedwith the assessment but was out of time for his appeal. For the year1937, these premises were again assessed at Rs. 850 and it is againstthis assessment that the claim is made.
The appellant’s evidence in addition to establishing the above factswas also to the effect that he had never been able to obtain a larger rentthan Rs. 65 a month for these premises. He stated that he had askedhis tenant to pay an increased rent but the latter refused to do so, he alsostated that he had made no alteration to the buildings since 1934. Thetenant was called as a witness. He confirmed the appellant’s evidencethat Rs. 65 a month rent was paid for more than the last three yearsand stated that the appellant had threatened to raise his rent, but he(the tenant) stated that if that was done he would leave and even nowthought that he was paying too much. In that connexion he mentionedother -premises belonging to the plaintiff, which are assessed at a lowferfigure, which he stated were preferable to the premises he occupiedfor the purposes of an eating-house. Later he qualified this by sayingthere was nothing to choose between them. This evidence of theappellant and his tenant in regard to the rent was not contradicted orquestioned.
On behalf of the Municipality, Mr. Orr, the Municipal Assessor, gaveevidence to the effect that he had inspected premises of a similarcharacter in the locality and in consequence of such inspection he cameto the conclusion, after taking into account the area in square feet of thebasement, ground floor and first floor of each of the premises he inspected,that a fair annual value for the premises in question would be Rs. 850 ayear.
The Commissioner has held that the burden Was on the plaintiff toprove that this assessment was unreasonable and that this has not beenproved. He consequently holds that the sum of Rs. 850 is fair andreasonable annual value of the premises in question.
POYSER S-P.J.—Weerasekera v. Municipal Council, Colombo.
It is never easy to decide what is the annual value of any premisesas defined in section 3 of Ordinance No. 6 of 1910. It is necessary todecide what a hypothetical tenant would pay. What the actual tenantpays is not necessarily decisive of the annual value, although in decidingthe question it may be of the utmost importance.
The most difficult cases arise in regard to premises which are occupied.by the owner and such premises as schools. Certain principles, however,have been laid down in order to decide how the annual value is to bearrived at. Firstly, it has been decided, and such decision is binding onme, that when a person institutes an action under section 124 of theMunicipal Councils Ordinance that the onus is on him to show that theassessment is unreasonable. (Marikar Bawa v. Colombo MunicipalCouncil ’.) Now, has the plaintiff satisfied this onus ? There is theuncontradicted evidence that he can only obtain Rs. 65 a month as rentand that he has tried to obtain more. The tenant who pays this rentconsiders he is paying too much and states he would leave the premisesif the rent was raised. As I stated before, the rent actually paid is by nomeans conclusive as to what a hypothetical tenant would pay, but it isprima facie evidence which, if uncontradicted, may become conclusive.
It is, of course, open to either party to show that the rent agreed tobe paid was a misconception. See Hyde on Rating, 5th ed., p. 207.
Local decisions are to the same effect. In Silva v. Colombo MunicipalCouncil “ Pereira J. held that the actual rent received by the landlord,in the absence of evidence of bad faith on the part of the landlord ortenant is, generally speaking, a fair test to go by in estimating the annualvalue, provided it has not been fixed in view of special circumstancesapplicable ,to any particular case. Similar opinions were expressed inSidoris Appuhamy v. Municipal Council of Colombo *.
I do not think the case of Poplar Assessment Committee v. Roberts'in any way modifies the principles above enunciated. There is a'passagein the judgment of Lord Buckmaster in which it is stated that “ thetenant referred to is, by common consent, an imaginary person ; theactual rent paid is no criterion, unless, indeed, it happens to be the rentthat the imaginary tenant might be expected to pay in the circumstancesmentioned in the section. But, although the tenant is imaginary, theconditions in which the rent is to be determined cannot be imaginary.They are the actual conditions affecting the hereditament at the timewhen the value is made ”.“
Apart from the evidence to which I have already referred, theMunicipal Assessor, who, no doubt, has examined all the premises in theimmediate locality with the utmost care, has not stated that this localityin the last few years has improved either from a residential or businesspoint of view or that the value of the premises in such locality has gone'up. Nor has he given evidence of any other conditions such as goodtrade, increased population or increased prosperity which would leadto a greater demand for premises of this description and a consequentialincrease in their annual value. He has added to the assessment anamount of Rs. 100 per annum on account of the fact that these premises180 N. L. R. 11.3 6 c. W. R. 335-
a 3 Baltuingham 163.4 (1912) 2 1 C. 98.
Piyadasa v. Hewaxntame.
have electric lights. That appears to me an excessive amojunt whereelectric light is available to all persons living in this locality and has beenso for some time past. The fact that electricity has been brought tothese premises could however be taken into account in fixing the assess-ment. (See the principles enunciated in Kirby v. Hunslet AssessmentCommittee'.)
Taking all the facts into consideration, the uncontradicted nature ofthe appellant’s evidence, the absence of any suggestion as to mala fides,collusion or special circumstances such as the tenancy of a relation,I think the appellant has satisfied the onus that was on him and hasproved that Rs. 650 is a fair annual value for these premises.
The appeal will accordingly be allowed with* costs and the annualvalue of these premises reduced to its former figure of Rs. 650.
WEERASEKERA v. MUNICIPAL COUNCIL, COLOMBO