(COURT OF APPEAL)

BATA SUDAN v. YOUSIF YACOUB GEORGE

AC-REV-319-1968

AC-REV-337-1968

Principles

  Landlord and Tenant—Registration of leasehold land—Land Settlement and Registration Ordinance, s. 48—Non-registered tenancy agreement is valid and binds the immediate parties to it

  Landlord and Tenant—Contractual tenancy—When terminated by a valid notice is converted into a statutory tenancy—Rent Restriction Ordinance, s. 19 (1)

(i)According to Land Settlement and Registration Ordinance, s. 48, a non- registered tenancy agreement for three years or more is valid and binds the immediate parties to it.

(ii) Where a contractual tenancy is determined by a valid notice, it is automatically converted into a statutory tenancy within the Rent Restriction Ordinance, s. 19 (1). Holding over of the premises by the tenant after the termination of the contractual agreement, does not per se revive the old agreement.

Advocates: Abdel Wahab & El Tigani for the applicant

Abdalla El Hassan &

Abdel Wahab Abu Shakiema for the respondent

Judgment

Ramadan Au Mohamed 1. April 7, 1970 : —The facts of this case are as follows. The parties plaintiff and defendant entered into a tenancy agreement dated April i, 1962, whereby the plaintiff let his house, plot 15, block 2/1 situated at Mugran, to the defendant company under the following terms:

1. The duration of the tenancy is three years commencing from April 1, 1962.

2. The rent is £S.I,320.000m/ms. per year, payable first year in advance and then quarterly in advance

3. If neither party notifies two months before expiration of the first or any subsequent year of this contract of his intention to the contrary the lease is to be considered as renewed for a futher year.

By his letter dated January 3. 1965 the defendant notified the plaintiff of his intention to vacate the house by the end of March and to terminate the tenancy agreement. But despite this notification the defendant continued to occupy the premises up to June 1965, according to the defendant, or up to July according to the plaintiff. However, the trial court has found as a fact that the defendant had been in occupation of the house up to July 10, 1965 and I can see no reason to disturb this finding.

By his covering letter dated April 1, 1965 the defendant sent a cheque for £S.330.000m/ms. to the plaintiff to cover the rent for the period April 15, 1965—July 15, 1965.

On June 2, 1965 the defendant sent a fresh notification of his intention to terminate the tenancy agreement as from June 30, 1965. This letter was dated July 2, 1965 through oversight and this is clear from the plain tiff’s reply of June 10, 1965 (p. Doc. No. 4). In his reply the plaintiff refused to accept the plaintiff’s letter as contrary to the terms of the lease which he alleged to be automatically renewed for one year as from April 15, 1965.

The plaintiff then instituted CS-699-1966 against the defendant company claiming recovery of £S.990.000m/ms. allegedly due to him as damages for breach of the tenancy agreement.

The learned District Judge after hearing evidence of both sides held that the defendant is entitled to the full rent on the contract rate for the first three months only and £S.40.000m/ms. per month for the next six months on the ground that the plaintiff had offered the premises for £S.150.000m/ms. a month which he could not get. The plaintiff in fact rented the house for £S.70.000m/ms. a month after it fell vacant for one year since it was vacated by the defendant.

On application by the defendant to revise the above decree His Honour the Province Judge held that since the tenancy agreement was registrable under the Land Settlement and Registration Ordinance 1925, s. 48, it is null and void for non-registration. He further held that on expiry of the said lease on April 15, 1965 there arose a statutory tenancy under which the plaintiff was entitled to three months notice in accordance with the Rent Restriction Ordinance, s. 19, and consequently gave judgment for the plaintiff for the sum of £S.300.000m/ms. and costs.

Both parties applied to this court to have the above order revised and I am now going to deal with both applications together. Reference will be made to the defendant as applicant; and the plaintiff as counter-applicant or respondent.

The learned counsel for applicant-defendant submits as follows:

1. that the notification of January 3, 1965 had terminated the tenancy agreement as from March 31, 1965;

2. that the Land Settlement and Registration Ordinance, s. 48, does not make the agreement not binding on the immediate parties though it may do so in respect of third parties;

3. that the applicant-defendant by his continued occupation of the premises after March 31, 1965 is deemed to have done so not in reliance on any definite agreement but as a statutory tenant under the Restriction Ordinance.

On the other hand the learned counsel for respondent-plaintiff relies on the following grounds.

1. The contract the subject of the suit is not the one for three years but the subsequent agreement for one year arising out of the previous one.

2. Even if the contract under consideration is the one for three years no party to it can plead its non-registration under the Land Settlement and Registration Ordinance, s. 48, in order to avoid his obligations under it.

With due respect to the view expressed by His Honour the Province Judge that the tenancy agreement of April 1, 1962 is invalid for non- registration under the Land Settlement and Registration Ordinance, 5. 48, I am unable to agree with him. It has been held in Fouad Maseiha Gideis v. Abdel Aziz El Gindi, HC-REV-62-195o, that a non-registered tenancy agreement for three years or more is valid and binds the immediate parties to it. Any contrary interpretation of section 48 will be to allow fraud which it was meant to prevent. This interpretation is, in my view, in accordance with the principles of justice.

There is no doubt that the original tenancy agreement was duly terminated by notice of January 3. 1965. It has been stated in Woodfall, Law of Landlord and Tenant (25th ed., 1954), p. 321, that

“where the tenant of a controlled dwelling-house holds over after the expiry of a notice to quit and pays rent, the landlord is not to be taken by accepting it to assent to renewal of the tenancy on the old term, for he has no choice but to accept the rent: the tenant is to be regarded as holding over against the will of the landlord by virtue of the Rent Restriction Acts and become a statutory tenant."

In Ibrahim Yousif Abboudi v. Hassan Abdel Hafiz, AC-REV-270-1959 (1960) S.L.J.R. 112, it was held by this court that the above rule expounded by Woodfall applies to termination of a lease by effluxion of time. There fore, the holding over of the premises after the contractual tenancy was

duly terminated does not per se revive the old agreement. It lay on the landlord who sought to rely on the original agreement of tenancy to prove with unequivocal evidence that both parties intended to be bound by the terms of that agreement. The fact that the tenant continued to pay the rent on the same terms is not enough to prove such an intention.

In my view the decision of His Honour the Province Judge should be upheld and both applications be dismissed with costs.

Mahdi Mohamed Ahmed J. June 6, 1970:-I agree.