Sagaaf v Khaku and Another (Civil Appeal No. 45 of 1955) [1955] EACA 314 (1 January 1955)

## COURT OF APPEAL FOR EASTERN AFRICA

Before SIR BARCLAY NIHILL (President), SIR NEWNHAM WORLEY (Vice-President) and GOUDIE, Ag. J. (Kenya)

## SHARIFF ADARUS BIN HUSSEIN SAGAAF, Appellant/Landlord.

## ν. (1) AKBERALI KARIM KHAKU, (2) CHHANA MORAR,

Respondents/Tenants

Civil Appeal No. 45 of 1955

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

Landlord and Tenant—Rent Restriction—Reasonableness—New point of law taken for first time on appeal from Rent Control Board-Increase of Rent (Restriction) Ordinance, section .16 (1) (e) (i).

In an application for possession orders in respect of rent restricted premises, the landlord relied upon section 16 (1) $(e)$ (i) of the Increase of Rent (Restriction) Ordinance stating that he wished to occupy the premises with his family so that he could be on the spot to supervise the rebuilding and reconstruction of certain other premises. The Board made an order for possession but, on first appeal, the appellate Judge considered that the Board erred in taking into account any factor not strictly relevant to the occupation of the suit premises as a residence.

At the hearing of the first appeal, the appellate Judge allowed an application to add as a ground of appeal that the tenancy had not been determined by a valid notice to quit. This point had not been argued before the Board.

Held $(30-8-55)$ —(1) On the question of reasonableness a court has the widest discretion to consider every factor and circumstance likely to be affected by the making of the order.

(2) An appellate Judge has a discretion to allow a new point of law to be taken<br>before him on an appeal from a Rent Control Board, but to allow a new point of the nature in the instant case in the circumstances therein obtaining must open the door to fraudulent delaying tactics by tenants struggling to retain possession.

Per WORLEY (Vice-President).—Before allowing a new point of law to be taken<br>on appeal from a Rent Control Board, the appellate Judge should satisfy himself<br>that it is a point of real substance and not merely a device raise

Appeal allowed.

Appeal anowed. Cases referred to: Cresswell v. Hodgson, (1951) 1 A. E. 712; Popatlal Padamshi v. Shah Meghji Hirji, 19 E. A. C. A. 15; Wilson and another v. United Counties Bank Ltd., (1920) Benninga v. Bijstra, (1946) K. B. 58; Aitken v. Show. (1933) S. L. T. 27 (Scot.).

Khanna for appellant.

Doshi for respondent.

SIR BARCLAY NIHILL (President).—The appellant in this appeal is the landlord of certain premises which consisted of four flats situated on Plot No. 322, section XVIII, Mombasa, and to which the provisions of the Rent Restriction Ordinance applies. He petitioned to the Coast Rent Control Board for possession orders against all his four tenants who respectively occupied the four flats. On the matter coming on for hearing before the Board two of the tenants consented to vacate on the understanding that when a new building was erected on the plot they would be granted new flat tenancies. As regards the present two respondents, who occupied Flat Nos. 2 and 5, the basis of the landlord's application was that he required the flats for his own personal occupation. The Board therefore treated it as an application under section 16 (1) (e) (i) of the Ordinance. The reason put forward by the landlord in his letter to the Board was that he wished to occupy those flats with his family so that he could be on the spot to supervise a rebuilding and reconstruction plan involving the demolition of the other two flats.

When the matter came on for hearing before the Board the appellant gave evidence and explained at length why he wanted to occupy the suit premises. He offered his tenants alternative accommodation in the premises he was then occupying and also promised them two flats in the new building when reconstructed. The Board visited both sets of premises and heard counsel for the tenants. In its written decision the Board stated that the case clearly turned on reasonableness. It regarded the landlord's reasons for wanting the premises as reasonable and found that the alternative accommodation offered was reasonably equivalent, subject to implementation of the landlord's offer to lay on water and redecorate. The two tenants appealed to the Supreme Court of Kenya and their appeals were consolidated and heard together. Under section 7 of the Rent Restriction Ordinance an appeal from any question determined by a Rent<br>Control Board lies to the Supreme Court of Kenya only on a point of law or one of mixed fact and law. Whether the memoranda of appeal presented to the Supreme Court sufficiently realized the limitation set to the right of appeal I would hesitate to say, but the point is not important because the learned Judge in his judgment clearly cut away the dead wood and confined himself to the one point common to the two tenants, namely, that the Board had erred on the issue of reasonableness. Here in my opinion the learned Judge took too narrow a view. He thought that because the appellant's application must be regarded as an application under section 16 (1) (e) (i), and not one under section 16 (1) (k) (and here I agree with him), the Board erred in taking into account any factor not strictly relevant to the occupation of the suit premises as a residence. I also agree with him that it would seem that the Board in the main did decide the issue of reasonableness on the appellant's desire to be on the spot for the purpose of supervising his building operations, but I differ from the Judge in his view that this was a factor which it was improper for the Board to take into account at all. I know of no case where it has been laid down that a circumstantance affecting the interests of the landlord is not a proper circumstance to take into account because it may be somewhat remote from those<br>factors which could be classified as strictly "residential" reasons, such as size of family and the like. In fact all the authorities tend to show that a court in judging the question of reasonableness has the widest discretion to consider every factor and circumstance likely to be affected by the making of the order. In Cresswell v. Hodgson (1951) 1 A. E. L. R. 712, Somervell, L. J., in the Court of Appeal, put the matter thus: -

"I think that when the legislature gave this overriding discretion tothe County Court Judge to consider whether it is 'reasonable to make ... an order', it gave to the court a very wide discretion which it is most undesirable to seek to limit or interfere with. I think the words themselves indicate that the Country Court Judge must look at the effect which the order would have on each party to it. I do not see how one can consider whether it is reasonable to make an order unless one considers the effect on landlord and tenant, (a) if one makes it, and (b) if one does not. I do not think that we should say anything which restricts the circumstances which the County Court Judge should take into consideration."

$\ddot{\phantom{0}}$

And later on in the same judgment the learned Justice of Appeal said that he did not think that it was a matter of law at all.

It is of course possible to think of reasons being put forward of so light a character that in a general appraisement of reasonableness a court or Board would disregard them. I do not think the reason put forward by the landlord in this instance can rightly be placed in such a category, for his interests were definitely involved. He had a plan for reconstruction of the suit premises in hand and it is certainly reasonable to suppose that if he was living at the site, the work would proceed with more expedition, and perhaps more economically, than if he were elsewhere. Accordingly in my view there was no reason in law why the court below should have reversed the finding of the Board on this issue and was wrong in so doing, for the Board did address its mind to all the relevant circumstances and clearly took a great deal of trouble before coming to a decision.

I now come to the more difficult point in this appeal. At the hearing of the appeal to the Supreme Court, counsel for the present first respondent asked for leave to add a further ground of appeal in that his tenancy had not been determined by a valid notice to quit. It should be noted at this stage that this was a ground not argued before the Board, nor was it set out as a ground in the memorandum of appeal to the Supreme Court. It is clear from the judgment in the court below that the learned Judge fully and correctly addressed his mind to the relevant law: on his view of the pleadings I would hesitate to say that he was wrong in allowing the point to be taken and in concluding that it was one which went to the root of the Board's jurisdiction. By pleadings I mean the letter addressed to the Chairman of the Rent Control Board, dated 4th February, 1954, and the first respondent's reply thereto dated 31st March, 1954. Where I part company with the learned Judge is in his construction of these so called pleadings. I think he took too narrow and technical a view and failed to take sufficiently into account the nature of the first respondent's reply as a whole, and his subsequent conduct when the matter came on for hearing before the Board.

In his application to the Board the appellant stated this in paragraph $3:$ —

"3. All the four including the respondent are statutory tenants."

The first respondent's answer was as follows:-

"3. He does not admit paragraph 3 of the application so far as he is concerned and would submit that he is the protected tenant in respect of Flat No. 2 in the aforesaid premises."

I agree that the reply as framed put the appellant to proof that a valid notice to quit had been served but I am much more doubtful than the first appellate court Judge as to whether it constituted a clear denial that the respondent was not a statutory tenant. Mr. Doshi, who appeared before us for this respondent and who drew this reply, has told us that what he meant was that the respondent was a contractual tenant, but because the Rent Restriction Act applied to the premises he was in fact a protected tenant. I must confess the expression "protected tenant" is new to me. A statutory tenant may be said to be protected, at least from eviction after the termination of his contractual tenancy, because if the Rent Restriction legislation applies to the premises, he has a right to remain in possession of those premises notwithstanding the determination of his contractual interest. I cannot see how he can rightly be called a protected tenant during the term of his contractual interest. The expression also puzzled the Judge in the court below, but he left the first matter on one side because he was satisfied from the first part of the paragraph that the respondent

had denied that he was a statutory tenant. I consider, however, that one should look at more than the mere wording of the paragraph. There is the whole conduct of the respondent thereafter which I think can properly be taken into account. On the matter coming before the Board the issue of a notice was never raised by the respondent's counsel although, if a good point, it must have been conclusive. Instead the battle raged over the issue of reasonableness and the suitability of the alternative accommodation offered. Surely it is not unreasonable to draw the inference that the question of notice was not raised because it was known that if raised the appellant could easily have disposed of it? Even in the memorandum of appeal to the Supreme Court the point was not taken, and when it was taken, it was unaccompanied by any affidavit by the respondent stating that in fact he had never been served with any notice to quit. I agree with Mr. Khanna that to allow a new point of this nature to be taken so late as was done in this case, and under such circumstances as were here present, must open the door to fraudulent delaying tactics by tenants struggling to retain possession. All the same I am reluctant to meddle with the discretion of the trial Judge, because again it is evident from the judgment that he carefully considered all the relevant case law on this question. I am satisfied, however, that on the facts of this case the respondent should not have been allowed to raise this new point when he did, and in the way he did, because I consider that, taking the respondent's reply as a whole coupled with his subsequent conduct, the only reasonable inference to draw is that this respondent did admit that he was a statutory tenant who had no contractual interest left in the tenancy.

I would therefore allow this appeal with costs which will include the costs of the appeal in the court below, and confirm the order of the Board dated, 15th May, 1954. Subject to the landlord complying with the conditions therein laid down he should have possession of both flats on the 30th September, next.

SIR NEWNHAM WORLEY (Vice-President).—I have read the judgment prepared by the learned President and I agree that this appeal should be allowed and an order made as proposed.

With regard to the first point, it is quite clear to my mind that the learned Judge erred in thinking that the Board, in considering reasonableness, was not entitled to take into consideration the appellant's desire to live at the spot where his reconstruction work was to be done.

As regards the second point, whilst I agree that the learned Judge had a discretion to allow a new point of law to be taken before him, I am of opinion that he should have satisfied himself that it was a point of real substance and was not merely a device raised by the tenant at a late stage to avoid the Board's order. It is perfectly clear that if it were a point of real substance the tenant's advocate could and should have taken it at the hearing before the Board. Moreover I think, with respect, that the learned Judge has misdirected himself in failing to consider not only the ambiguity in the pleadings but also the effect of the tenant's advocate's conduct before the Board, for there can be no doubt that he induced or permitted the Board to assume that the only questions at issue were reasonableness and the suitability of the alternative accommodation offered.

GOUDIE, Ag. J.-I agree with the judgments prepared by the learned President and Vice-President and with the order proposed. I have nothing to add.