Damji (Civil Appeal No, 34 of 1951) [1952] EACA 22 (1 January 1952)

## COURT OF APPEAL FOR EASTERN AFRICA

# Before SIR BARCLAY NIHILL (President), SIR NEWNHAM WORLEY (Vice-President) and SIR HECTOR HEARNE, C. J. (Kenya)

### EX PARTE

# ALIMOHAMED DAMJI, Appellant

### Civil Appeal No. 34 of 1951

(Appeal from the decision of H. M. Supreme Court of Kenya, Bourke, J.)

Increase of Rent (Restriction) Ordinance, 1949—Alterations to premises after 1st January, 1949—Change to business premises—Whether Ordinance ceases to apply.

Certain alterations to the front portions of premises subject to the Increase of Rent (Restriction) Ordinance, 1949, were carried out after 1st January, 1949. As a result the user of the premises was changed from a dwelling-house to business premises. The appellant contended that the alterations to the premises constituted the erection of business premises commenced after 1st January, 1949, and that by reason of section 1 (2) (b) of the Ordinance, the provisions of that Ordinance did not apply to the premises and the landlord was free to obtain what rent he could in respect of them.

Held (21-1-52).—The wording used in section 1 (2) (b) of the Ordinance is not wide enough to cover premises which in fact have not been erected but have been reconstructed or altered.

Appeal dismissed and decision of Rent Control Board and Supreme Court upheld. Cases considered: Hemns v. Wheeler (1948) 2 K. B. 61, Barry v. McTighe, Irish<br>Cases, 34 of Blundell's Rent Restriction Cases, Keeler v. Brangan, Irish Cases, 356 of<br>Blundell's Rent Restriction Cases, Sweeney v. O'Seaghdha, Hall (1929) 2 K. B. 110, 141 L. T. 243.

#### Khanna for appellant.

JUDGMENT (delivered by SIR BARCLAY NIHILL (President)).—This is an appeal against a judgment given by the Supreme Court of Kenya dismissing an appeal from a decision of the Central Rent Control Board. This decision held that the front portion of certain premises which had been subject to control under the provisions of rent restriction legislation had not become decontrolled on account of certain alterations which had brought about a change of user from a dwelling house to business premises. The short point which we have to consider is whether the admitted alterations to the premises constituted the erection of business premises commenced after 1st January, 1949. If it did then, by reason of section 1 (2) (b) of the Increase of Rent (Restriction) Ordinance, 1949, the provisions of that Ordinance do not apply to the premises, and the landlord is free to obtain what rent he can in respect of them.

There is no dispute as to the extent and cost of the alterations. They consisted in replacing the front door and window of the former dwelling house with a larger folding door; a canopy was put over the road outside, a door at the back and some shelves and cupboards in the rooms. The alterations are said to have cost £75. In order to carry out these alterations at all it was necessary to obtain the approval of the municipal authorities and this was obtained in 1950. So far then as these authorities are concerned the character of the two rooms which form the frontage of the premises has been changed and they are now not a dwelling house or a part of a dwelling house but are business premises and certified for occupation as such. Furthermore, in this sense, the two former living rooms became business premises for the first time after the first day of January, 1949. If then these new business premises can be said to have been erected after that date this appeal must succeed because of section 1 (2) $(b)$ of the Ordinance which reads as follows: -

$(b)$ business premises whereof the erection was commenced after the first day of January, 1949, and where premises the erection whereof was commenced after the first day of January, 1949. consist partly of a dwelling house and partly of business premises, the provisions of this Ordinance shall not apply to the portion which consists of business premises;"

Much English case law seems to have been examined both by the Board and the Court below on the issue as to whether the alterations had been sufficiently extensive to cause a change in the identity of the premises. None of these cases in my opinion are strictly relevant to the real issue in this case. If the two front rooms of these premises after the alterations had been effected had continued to be let for the purpose of residential occupation the argument that a new dwelling house had been erected would have been quite untenable. The Board found that the two rooms had not been substantially altered in structure and this finding cannot be canvassed. The problem is therefore reduced to a very small compass and can be stated thus. Did the reconstruction or conversion of these two rooms for the purpose of a change of user constitute an erection of business premises commenced after the first day of January, 1949? Mr. Khanna has argued stoutly that it does. As I understood him his argument runs thus. Even a minor alteration postulates that something has been erected, and if this erection in fact brings about a change of user, then what has been erected are business premises. This is an ingenious argument but I do not think it should prevail. It seems to me to leave out of account the distinction which in all common sense must obtain between premises which are erected and premises which are converted to a new use by alteration. I am confirmed in my view that this distinction is a real one by the wording of by-law 50 of the Nairobi Municipality (Building) By-laws, 1948, which read as follows: -

"50. A person shall not erect any shop, warehouse or business premises nor use by conversion or otherwise any existing premises as a shop, wafehouse or place of business in any part of the Municipality except within any of the following areas:"

Again there is the proviso to this by-law:-

"Provided that the Council may in its absolute discretion-

(a) permit the erection of any shop, warehouse or business premises or the conversion of any existing premises into a shop, ..."

Clearly in the present case what the Council permitted was not the erection of a shop but the conversion of existing premises into a shop. This being so I am of the opinion that the wording used in section 1 (2) (b) of the Ordinance is not wide enough to cover premises which in fact have not been erected but have been reconstructed or altered, for the words used are "business premises whereof the erection was commenced after the first day of January, 1949".

These two rooms were "erected" before 1st January, 1949. They have not even been demolished and re-erected. All that has happened to them is some structural alteration. It is permissible when an ambiguity is alleged in rent restriction legislation to bear in mind the policy which dictated the statute. (See note $(e)$ to paragraph 623 of 31 Hailsham.) Had the legislature intended to

provide landlords with an incentive to reduce the amount of residential accommodation available in Nairobi, the shortage of which is one of the reasons for rent control, it should have said so plainly. No doubt the object of section 1 (2) $(b)$ is to encourage the building of new business premises, which are also in short supply, but the omission in the sub-section of any words with reference to conversion or reconstruction of existing premises leads me to infer that it was not the object of the legislature to free from control premises already subject to control. For the above reasons I think that the conclusion reached by the Board and the Court below was the right one and I would dismiss this appeal.

SIR HECTOR HEARNE (Chief Justice of Kenya).—This appeal turns on the proper construction of sub-section 2 $(b)$ of section 1 of the Increase of Rent (Restriction) Ordinance, 1949. The appellant is the landlord of premises described as a dwelling house consisting of eight living rooms and eight outhouses. The property last changed hands in December, 1948, when the purchase price was Sh. 49,500. It is situated in an area in which a Rent Control Board has been established. The appellant made an application for assessment of rent to the Central Control Board on 26th May, 1949. At this time certain alterations had been made to two of the living rooms at the front of the premises. The front door and window had been replaced with a folding door, a canopy had been placed over the road outside, a door had been made at the back and some shelves and cupboards had been installed. The alterations which are said to have cost Sh. 1,500 were made after 1st January, 1949: and, it was claimed on behalf of the appellant, that by reason of these alterations and the date when they had been commenced, viz. after 1st January, 1949, the two living rooms had ceased to be subject to the provisions of the Increase of Rent (Restriction) Ordinance. The Board decided the question against the landlord. His appeal to the Supreme Court of Kenya failed and he has now appealed to this Court. The Board which was represented before the Supreme Court was not represented before us.

Section 1 (2) (b) of Increase of Rent (Restriction) Ordinance enacts that "it shall apply to all premises, whether dwelling houses or business premises, situate in any area in the Colony in which a Rent Control Board had been established, other than . . . business premises whereof the erection was commenced after the first day of January, 1949, and where premises the erection whereof was commenced after the first day of January, 1949, consist partly of a dwelling house and partly of business premises, the provisions of this Ordinance shall not apply to the portion which consists of business premises".

In coming to the conclusion that the whole of the premises, including the two front rooms to which the alterations referred to had been made, were still subject to control, it was held by the Board that the premises had not "lost their identity" and, by the Supreme Court, that "this was a possible inference resulting in a finding with which it could not interfere". In Hemns v. Wheeler (1948) 2 K. B. 61, which was cited in the judgment of the Supreme Court, the question was whether a dwelling house which had been altered or added to had lost its identity and become a different dwelling house. The trial Judge had held that "there had been no substantial change sufficient to make the house a new dwelling house", and that was a finding with which the Court of Appeal said it could not interfere.

But the problem in Hemns v. Wheeler as it was in several cases decided in England is not the problem in this appeal. The problem in this appeal is not whether a dwelling house had become a different dwelling house, but

(a) whether the two rooms at the front of the premises (they are dwelling houses, section 2 (1)) have been converted into business premises; and (b) whether the business premises into which they had been converted, if they had been so converted, were business premises "whereof the erection was commenced after 1st January, 1949."

The Board found that the "two rooms had been converted into shops". Shops are business premises and the only question that remains to be decided is. therefore, whether the two rooms which had been converted into business premises can be said to be business premises "whereof the erection was commenced after 1st January, 1949". Clearly the word "erection" requires to be interpreted. Does it include conversion by way of reconstruction?

In an Irish case Barry v. McTighe (No. 34 of Blundell's Rent Restriction Cases) cited by the advocate for the appellant, a dwelling house when first let prior to 1914 consisted of four rooms, and the landlord on acquiring the premises in 1937 carried out a considerable amount of improvements, adding five more rooms, including a kitchen and bathroom, consisting partly of existing walls and partly of new concrete walls together with a corrugated iron roof. It was held that this house had been "erected" since 1919 within the meaning of section 3 (5) of the Irish 1923 Act.

Two other Irish cases are mentioned in Blundell's cases. In Keeler v. Brangan (No. 356) two condemned cottages were pulled down with the exception of both gable walls and half the rear walls which were built into when the premises were reconstructed. It was held that the reconstructed premises were new buildings which were "erected" after 2nd April, 1919, and were therefore outside the Act. In Sweeney v. O'Seaghdha (No. 663) the landlord became the lessee of a large house with stabling and land in 1922. In 1932 he converted the stable and outhouse into three dwelling houses at a cost of $£1,100$ . The tenant of one of these dwelling houses claimed to have the standard rent fixed.. It was held that the dwelling house was one erected after 2nd April, 1919, and therefore not controlled. It is to be noted that in each of these cases very substantial alterations were effected in the process of reconstruction.

In England it would appear that section 12 (6) of the Act of 1920 did not operate to retain within the protection of the Act premises which had ceased to be used as a dwelling house and had come to be used solely as business premises, although no substantial alteration of the premises had been made when the user was changed. (Williams v. Perry (1924) 1 K. B. 936.) Section 12 (6) $reads: -$

"where this Act has become applicable to any dwelling house or any mortgage thereon, it shall continue to apply thereto whether or not the dwelling house continues to be one to which the Act applies."

Swift, J. decided the case by saying that the sub-section did not say that—

"where the Act has become applicable to any dwelling house... it shall continue to apply to a factory or other business premises into which the house has been converted."

His decision did not involve an interpretation of the words "erected" or "erection".

These words do, however, occur in section 12 (9) of the Act of 1920 which reads: —

"This Act shall not apply to a dwelling house erected after or in course of erection on 2nd April, 1919, or to any dwelling house which has since that date or was at that date being bona fide reconstructed by way of conversion into two or more separate and self-contained flats or tenements ..."

In Middlesex County Council v. Hall (1929) 2 K. B. 110: 141 L. T. 243, thepoint was taken that "the change effected by throwing two cottages into one" amounted to the erection of a house within section 12 (9) of the Act of 1920. Talbot, J. reading the judgment of the Court said:—

"We do not think that it would be so called in ordinary speech, and we think also that the distinction between reconstruction and erection which appears in the sub-section is very much against the appellant's argument... Moreover, it would be impossible to say that he (the Judge) was bound, as a matter of law on the facts proved, to hold that what was done amounted to the erection of a dwelling house."

The word "reconstruction" which has reference to flats in section 12 (9) of the Act of 1920 does not occur in section 1 (2) (b) of the Ordinance, but the word "erection" is certainly not a word which in ordinary speech one would apply to minor alterations made to a room and to the fixing of shelves and cupboards. It would indeed, to use Talbot, J.'s language, be impossible to say that the Rent Board was bound as a matter of law to hold that what was done amounted to the erection of business premises.

I would dismiss the appeal.

SIR NEWNHAM WORLEY (Vice-President).—I have had the advantage of reading beforehand the judgments which have just been delivered and agree that for the reasons stated therein, this appeal fails.