Laporte v Regina (Criminal Appeals Nos. 157 and 168 of 1952) [1952] EACJ 1 (1 January 1952)

### APPELLATE CRIMINAL

### Before SIR HECTOR HEARNE, C. J. and BOURKE, J.

# HILDA LAPORTE (Original Accused No. 1), NINO URZI (Original Accused No. 2), Appellants

ν.

# REGINA, Respondent (Original Prosecutrix)

## Criminal Appeals Nos. 157 and 168 of 1952

(Appeal from decision of the First Class Magistrate's Court at Nairobi, A. E. Errington, Esq.)

Key money—Landlord and Agent—Both convicted—Giver an accomplice.

The first appellant was convicted of requiring a pecuniary consideration as a condition of letting her premises. She had instructed the second appellant to arrange the terms of the lease and he had required a pecuniary consideration. The prosecution sought to make her responsible by showing that she had authorized him to make the requirement. They attempted to do so by adducing evidence that after the conclusion of the terms of the lease the tenants told her that key money had been paid to the second appellant and the first appellant said nothing.

Held $(24-4-52)$ .—(1) Her silence cannot be taken to amount to an admission that she had instructed or authorized the second appellant to require the payment of key money.

(2) The second appellant argued that he could not be convicted of an offence *contra* to section 18 (1) of the Increase of Rent (Restriction) Ordinance, 1949, as that section only applied to a person in a position to control the rent, i.e. the landlord and not a stranger to the agreement.

(3) Section 18 of the Increase of Rent (Restriction) Ordinance, 1949, includes not only a landlord but also a person other than a landlord, e.g. an agent, who requires the payment of a consideration as a condition of the grant by the landlord of a tenancy lease, etc.

(4) When a person to whom a demand is addressed complies with it and gives a pecuniary consideration which is taken both giver and taker have committed an offence.

First appellant, appeal allowed. Second appellant, appeal dismissed and on further appeal to E. A. C. A. appeal dismissed.

Cases referred to: Remmington v. Larchin, (1921) 3 K. B. 404, Gordon v. Homeleigh Estates, Ltd., (1950) 100 L. J. 178, Barker v. Levison, (1951) 1. K. B. 342.

Morgan and Malik for first appellant.

Sirley for second appellant.

Few, Crown Counsel, for Crown.

JUDGMENT.—The appeal of the first appellant may be dealt with very briefly. She was convicted of the offence of "requiring a pecuniary consideration (in addition to the rent) as a condition of letting her premises in Nairobi to Dr. Aldo Lecchini and Mr. William Gouder". It was not suggested that she had personally "required" a pecuniary consideration from Lecchini or Gouder. The evidence of the prosecution was that the second appellant whom she had admittedly instructed to arrange the terms of the lease of her premises had required a pecuniary consideration in addition to rent. If he had, he would not have been acting within the scope of what he had been authorized to do. In order to make her responsible

it would have been necessary to show that she was a party to the second appellant's act, that she had authorized him to make the "requirement". This the prosecution sought to do by adducing evidence to the effect that after the conclusion of the terms of the lease, the tenants (Lecchini and Gouder) had told her that "key money" had been paid to the second appellant and that she said nothing. "A statement made in the presence of an accused person, accusing him of a crime, upon an occasion which may be expected reasonably to call for some explanation or denial from him, is not evidence against him of the facts stated, save in so far as he accepts the statement so as to make it in effect his own . . He may accept the statement by word or conduct, action or demeanour, and it is the function of the jury which tries the case to determine whether his words, action, conduct or demeanour at the time when the statement was made amount to an' acceptance of it in whole or in part." Archbold, 32nd edition, page 398. But the silence of the first appellant, even if she understood the word "key money" (her native tongue is not English), and even if it could have been taken to amount to an admisssion that she knew the second appellant had required the payment of key money, cannot be taken to amount to an admission that she had instructed or authorized him to require the payment of a pecuniary consideration in addition to rent. There is no evidence that the "key money" alleged to have been paid to the second appellant ever reached her hands in whole or in part. Her appeal is allowed and the conviction and sentence are set aside.

The advocate for the second appellant who was convicted of the same offence as the first appellant argued that even if his client had required the payment of a consideration from Lecchini and Gouder, he could not be convicted of an offence contra section 18 (1) of the Increase of Rent (Restriction) Ordinance, 1949, for the reason that the only "person" to whom section 18 (1) applies is a person who is in a position to control the rent, the landlord, and not a person, like his client, who was a stranger to the agreement under which the rent was created.

In support of this argument he cited the case of *Remmington* $v$ . Larchin, (1921) 3 K. B. D. 404 C. A.

In that case "the defendant, who was a tenant for a term of three years from March, 1919, of a dwelling house within the Increase of Rent and Mortgage Interest (Restrictions) Act, 1920, was, in May, 1920, desirous of giving up his tenancy, and in that month he agreed with the plaintiff that upon payment by the latter to him of a premium he would surrender his tenancy and the landlord would grant the plaintiff a new tenancy for three years at a slightly increased rent. The landlord did not know that the plaintiff had agreed to pay the defendant a premium. The plaintiff paid the defendant the premium, and the landlord granted the plaintiff a new tenancy for three years. After the Act of 1920 came into operation the plaintiff sued to recover back the premium".

It was held "that section 8, sub-section 1, of the the Increase of Rent and Mortgage Interest (Restrictions) Act, 1920, was reasonably capable of two constructions; that, the section being a penal one, the Court should give it the more lenient construction avoiding the imposition of a penalty; that, construed in this light, the prohibition in the section was limited to the person who required the payment of the premium "in addition to the rent" and "as a condition of the grant, renewal, or continuance" by him of the tenancy, namely, the landlord; and that the plaintiff was not entitled to recover".

The sections which were considered in Remmington $v$ . Larchin were these.

#### Section $8(1)$ .

"A person shall not, as a condition of the grant, renewal, or continuance of a tenancy or sub-tenancy of any dwelling house to which this Act applies. require the payment of any fine, premium, or other like sum, or the giving of any pecuniary consideration, in addition to the rent, and where any such payment or consideration has been made or given in respect of any such dwelling house under an agreement made after the 25th day of March, 1920, the amount or value thereof shall be recoverable by the person by whom it was made or given ..."

#### Section $8$ (2).

"A person requiring any payment or the giving of any consideration in contravention of this section shall be liable on summary conviction to a fine not exceeding $100 \dots$ ."

Section 18 (1) of the Increase of Rent (Restrictions) Ordinance, 1949, reads as follows: $-$

"No person shall, as a condition of the grant, assignment, renewal or continuance of a tenancy, lease, sub-lease, sub-letting or occupation of any premises require the payment of, or take or give any fine, premium or other like sum, or any pecuniary consideration, in addition to the rent; and, where any such payment or consideration has been made or given in respect of any premises under an agreement made after the prescribed date the amount or value thereof shall be recoverable by the person by whom it was made or given."

### Section 18 (2) reads: $-$

"Any person requiring, taking or giving any payment or consideration in contravention of this section shall be liable to imprisonment for a term not exceeding twelve months without the option of a fine."

Sub-sections $(1)$ and $(2)$ of section 8 of the Rent Act, 1920, are not, it will be seen, identical with sub-sections (1) and (2) of section 18 of the Rent Ordinance, 1949. In sub-section (1) of section 8 the act that is forbidden is the act of requiring a payment or the giving of a consideration and sub-section (2) makes a person who requires a payment or the giving of a consideration punishable. In sub-section (1) of section 18 the act of requiring is forbidden and also the act of taking or giving, and sub-section (2) makes a person who requires or takes or gives punishable. The inclusion of the word "give" in section 18 is important. Section 8 can only refer to "a person", to one person, who commits the act of requiring whereas section 18 is capable of referring not only to a person, for instance a landlord, who requires or takes but also a person, for instance a tenant, who complies with the "requirement" and gives. Again while section 8 (1) enacts that "A person shall not $\ldots$ ", section 18 (1) enacts that "No person shall $\ldots$ ", and while section 8 (2) refers to "a person", section 18 (2) refers to "any person".

Deferring for the moment consideration of the significance of the textual differences between section 8 of the Rent Act, 1920, and section 18 of the Rent Ordinance, 1949, we propose to examine *Remmington v. Larchin* in order to see precisely what it does and what it does not decide. It decides that when a person acting entirely on his own account, in other words for himself, and not on behalf of a landlord, demands and receives a pecuniary consideration of which the landlord was unaware, the person who paid the consideration could not recover it. It does not decide that if a person requires and receives the payment of a sum of money, not as a "premium" for himself and as a consideration for

"surrendering his tenancy" (these were the facts in Remmington v. Larchin), but for the landlord and as a condition of a grant of a tenancy by the landlord, it could not be recovered. In a word the problem of agency did not arise for consideration. Gordon v. Homeleigh Estates, Limited, (1950) 100 L. J. 178 was a case in which an agent had demanded a premium on behalf of the landlord, but he had falsely represented that the landlord required a premium and it was held that the premium which had been paid could not be recovered from the landlord. It did not decide that the premium could not be recovered from the agent who had not been sued. His conduct, however, was described as fraudulent.

The advocate for the second appellant also addressed our attention to "The Rent Acts" by Megarry, 6th edition, at pages 306 and 307. "Landlord" according to the note on page 307, "includes perhaps an agent for the landlord", and reference is made to the case of Barker v. Levison, (1951) 1 K. B. 342.

In that case "the manager of a block of flats employed a rent collector to whom on one occasion he gave authority to grant a lease in respect of a certain flat if the collector should consider the prospective tenant satisfactory. As a condition of granting a lease the collector demanded and received a premium of £100. It was not proved that the manager knew anything of the transactions or that he received any part of the premium".

It was held that "as there was no evidence that the illegal act of the rent collector was within the general scope of his employment, the manager was not criminally responsible for that act and so not guilty of contravening section 2 of the Landlord and Tenant (Rent Control) Act, 1949".

Section 2 (1) of the Act is as follows: $-$

"A person shall not, as a condition of the grant, renewal or continuance of a tenancy to which this section applies, require the payment of any premium in addition to the rent."

In his judgment Lord Goddard, C. J. said: "He (the rent collector) had no authority to negotiate the terms (of the lease). He had no authority to take a premium: And what he did was an illegal act which bis master had no means of preventing ..."

The illegal act to which Lord Goddard referred was the act of the rent collector in demanding a premium of $£100$ in contravention of section 2 (1) of the Act and punishable by section $2(6)$ of the Act.

Byrne, J. said: "The case does not fall within the line of cases establishing that the principle is that the master is vicariously responsible if his servant commits an offence in the general scope of his employment."

The offence to which Bryne, J. referred was the offence created by section $2(1)$ of the Act.

Even if, therefore, "a person" appeared in section 18 of the Rent Ordinance, 1949, we would hold that it includes not only a landlord but also a person, other than a landlord, e.g. an agent, who requires the payment of a consideration as a condition of the grant by the landlord of a tenancy. lease, etc.

We now turn to the differences between section 8 of the Rent Act, 1920, and section 18 of the local Ordinance. In Remmington v. Larchin (supra) it was held that "a person" in section 8 may reasonably be held to refer to a landlord or to a third person other than a landlord, "the language of the section," Banks, L. J. said, "is capable of either construction" but the words "a person" do not appear

in section 18 (1) and as we have pointed out the inclusion of the word "give" implies that the section does not necessarily refer to a landlord alone. Apart from this, in our opinion by the use of the words "no person" in section 8 (1) instead of the words "a person", the legislature made it clear that any person who made a "a requirement" as a condition, etc. should be regarded as having committed an offence and underlined its intention by making "any" such "person" liable to a penalty.

In the course of his argument the advocate for the second appellant said. that "if no specific authority was given by a landlord to his agent to demand key-money and he did, he could not be convicted under section 18 (1) as he was. not the landlord. If, on the other hand, specific authority was given by a landlord to his agent to demand key money and he did, he could not be found guilty as the act of demanding key money would have been the landlord's act and not his act". It would be monstrous if landlord's agents were in this favoured position in the crowded cities of Kenya, in particular Nairobi.

The finding of the Magistrate that the second appellant did require a consideration as a condition of the grant of a lease of the first appellant's premises was not seriously impugned by the advocate for the second appellant. The argument that the second appellant was not amenable to the provisions of section 18 (1) was substantially the only argument he addressed to us, and in our opinion it has no merit in it.

But we would point out, as we have done on a previous occasion, that the mere fact that a person addresses an illegal demand to another does not make the latter an accomplice in the offence constituted by the illegal demand. It is said that it was decided in a case in India that if a person is aware of the commission of an offence by another and keeps the knowledge to himself for some time he becomes an accomplice in the offence committed. Whether that is good law or not, and we think it is not, we refuse most emphatically to admit that a person who is the victim of an illegal demand can be said to be an accomplice in it. Of course, unlike the law in England, it is the law in Kenya that when a person to whom a demand is addressed complies with it and gives a pecuniary consideration which is taken, both the giver and the taker have committed offences: And when money is said by a witness to have been given in response to an illegal demand, his evidence as to the giving should be regarded as the evidence of an accomplice.

It was hypercritical to say, as the advocate for the second appellant said, that the Magistrate concerned himself only with the alleged payment of the pecuniary consideration and not with the "requirement" of it. He examined the evidence of the alleged giving with great care and properly so. But he appeared. to have no doubt that the evidence relating to the "requirement" was true and although the evidence was not given till long after the "requirement" was made, we have no reason to think, and the advocate for the second appellant advanced. no good reason for suggesting, that the Magistrate came to a wrong conclusion.

The appeal of the second appellant, whose sentence is by no means excessive, is dismissed.