(COURT OF APPEAL)

EL TAYEB MOHAMED AWADALLA v. ABDEL SEED MOHAMED AL!

AC-REV-361-1967.”

Principles

Landlord and Tenant—Doctrine of estoppel—Must be confined to matter of form as regards Rent Restriction Ordinance

Landlord and Tenant—Doctxj.ne of estoppel—Does not apply to vitiate the legislator’s intent—Rent Restriction Ordinance, s. 11

“The application of the doctrine of estoppel to the Rent Restriction Ordinance should be confined to matters which belong to the form only.”

“The doctrine of estoppel does not apply to vitiate the legislator’s intent under the Rent Restriction Ordinance, s. 11

Advocates: Taha Ibrahim……………… for applicant

                    Salih Awad Salih………….. for respondent

Judgment

B. M. A. Baldo J. September 23, 1969:—A contractual tenancy between the parties was concluded on December 5, 1961, by virtue of which applicant let his house No. 309/4/2 Omdurman town to respondent at a monhtly rent of £S.12.000m/ms Applicant instituted CS/2045/65 at Omdurman District Court against respondent for possession of the said house on the ground of personal use. The claim was denied, the issues settled, and on January 9, 1966, applicant was heard and the case adjourned until March 6, 1966, to hear applicant’s witnesses. On the very day January 9, 1966 applicant concluded a written agreement with respondent out of court whereby the monthly rent of the said house was increased from £S.12.000 rn/ms. to £S.14.000m/ms The other provision of the agreement provides that the landlord would not ask the tenant to vacate the house as long as the latter continued to pay the monthly rent. Respondent applied to the District Judge to dismiss the action on the strength of the latter agree ment which was adduced in court. The learned District Judge rejected the application. A revision was made to His Honour the Province Judge who set aside the order of the District Judge and dismissed the suit. Hence this application for revision against His Honour’s decision.

The learned advocate for applicant contends that the latter agreement is a contractual tenancy but it does not deprive applicant of his right to

                                    claim the premises for personal use which is a statutory right, that if such an agreement constitutes a waiver or estoppel it is then a defence which ought to have been raised in the amended statement of defence, that an issue over it ought to have been framed and decided, that applicant proved that it is absolutely necessary for him to have the premises but disregarded by the High Court, that a request by the landlord for an increase of the rent is legal and not contradicting a claim for personal use of property.

The learned advocate for respondent argued that it is not in all the circumstances essential for applicant to use the premises, that applicant is after the increase of the rent, that applicant had for valuable consideration agreed to allow respondent to remain in occupation, that applicant waived his right to claim the premises, that applicant is estopped from claiming the premises after he had represented to respondent that he will not claim possession, that applicant is bound by the terms of the contract even if the tenancy become a statutory one.

The controversy is over the effects of the latter agreement concluded by the parties during the pendency of the proceedings, whether such an agremeent is an admission on part of applicant of lack of essential need of the premises, or whether it is a waiver of the right to claim possession under the contractual tenancy or under the Rent Restriction Ordinance. The original agreement dated December 5, 1961, lays down the terms of the tenancy and one of which is that the tenant to continue in possession of the premises so long as he pays the rent. The latter agreement dated January 9, 1966 reiterated the very term in the former agreement in addition to the increase of the rent. The Rent Restriction Ordinance, s. 11 (d), gives the landlord the right of suing the tenant when the former requires the premises as a residence for himself. But where a contract between the landlord and the tenant is in existence the position is governed by Rent Restriction Ordinance s. 19 (1), which provides that:

“A tenant is entitled to the benefit of all the terms and conditions of the original contract of tenancy so far as the same are consistent with the provisions of the Ordinance.”

It is clear from these provisions that the tenancy is a contractual tenancy, and applicant is bound by the terms of the contract which permits respondent to remain in occupation so long as he pays the rent. There is nothing to show that the second contract as the learned advocate for applicant suggested, is voidable for inability of applicant to realise its import, or partial insanity. Applicant voluntarily entered into the latter contract for valuable consideration (the increased rent), and during the pendency of the proceedings. This act itself raises suspicion about the genuineness of applicant’s claim for personal use. Applicant demands the increase of rent at a time which made one take him to have initiated

                   the suit to continue to hold it over the head of respondent as the “Sword of Damocles.” This attitude reflects the conduct of applicant who proved to be not in genuine need of the premises, but he would like to achieve an increase of the rent by crooked means.

The latter agreement is no doubt a clear waiver on the part of applicant. Even if the tenancy is supposed to be a statutory tenancy the effect of the said agreement constitutes a Waiver and shows lack of genuine need for the premises on the part of applicant. At common law the doctrine of equitable waiver is that where a promise is made which is intended to create legal obligations which to the knowledge of the promisor will be acted on by the promisee and which is so acted on, the law will require it to be honoured to the extent of refusing to allow the promisor to act inconsistently with it. This doctrine is applicable even in the absence of consideration—The High Trees case (1947) K.B. 130. The Metal Manufacturing Co. Ltd. v. Tungsten Electric Co. Ltd. (1955) 2 All E.R. 657 suggests that the court will in suitable cases apply the doctrine of equitable waiver and while not permitting a gratuitous promise to found a cause of action will allow it to be used as a defence.

This application is hopeless and should be dismissed.

Dafalla El Raddi Siddig J. September 23, 1969:—The facts reduced down into writing by my learned colleague being simple and aptly set in his judgment hardly need to be reiterated. Although I concur in the conclusion reached by Baldo J., I failed to bring my mind to agree with the use of the word waiver which occurred in his judgment; which seems to be the nucleus around which both parties’ counsel’s arguments rotate. I am in full agreement that the Rent Restriction Ordinance, s. 19 is undoubtedly relevant to the controversy before us. If I may add to my learned brother’s argument, the effect of section 19 is to afford protection to the tenant even after notice is served on him to evict according to the contractual tenancy terms. Then he becomes a statutory tenant.

In my judgment it would be wrong to speak of a contractual tenancy in terms of waiver. Estoppel by deed is relevant here only in so far as the terms of the agreement are concerned. Applicant is estopped from denying the terms therein. The issue is whether the parties can contract outside the Ordinance at all, to render section ii inoperative. My reason for so holding is simply based on this: that while the former can be a cause of action the latter is only a rule of evidence. To put it in words which lawyers are better acquainted with, the doctrine of estoppel is a shield and not a sword.

Indeed, I am bewildered by the application of the doctrine of estoppel in some aspects of our Rent Restriction Act. There are pertinent questions which demand answers in this branch of our law. The broad issue which the facts of this case give rise to is: what sections ot the Rent Restriction Ordinance lend themselves to the successful invoking of the doctrine of estoppel and why? Broadly speaking, it would be dangerous to open a wide door for invoking this doctrine, simply because the result would be to negate the enactment; to render it obsolete and hence to defeat the intent of the legislator. Needless to say, qua courts of law we cannot build a common law around a statutory enactment in disregard of the legislator’s intent, for to do so we would be acting outside our province.

In the light of the decided cases, the trend of the decisions warrants the conclusion that there is a dichotomy as to the application of the doctrine of estoppel. I venture, in the following lines, to try distinguishing the cases in which the doctrine applies and those in which it does not in an endeavour to postulate a criterion pertaining to the issue. I would rather start by citing only two cases which are illustrative of the dichotomy, heretofore mentioned. It had been held in Hassab Alla Salem v. Abu Tila El Amin (1960) S.L.J.R. 137, that an unconditional agreement by the tenant to surrender the lease is not binding if he wishes to be a statutory tenant. Thus, it is clear that there are cases in which the parties cannot oust the Rent Restriction Ordinance and hence they cannot contract outside it.

An instance in which the express wording of the Ordinance is departed froth is the application of the doctrine of estoppel in connection with the requirement of the Ordinance for the written consent of the landlord in case of a sublease. It has been repeatedly held by this court that tbe requirement as to writing is disposed with on proof of an estoppel, based on sheer scienta and acquiescence with respect to the sublease, on the part of the landlord.

To my mind the dichotomy in the two above-mentioned situations can be only reconciled on the footing that while the former situation is pertaining to the core and pith of the legislator’s intent, the latter is only pertaining to the form. It is the consent of the landlord which the legislator in the latter case is asking for and hence the effect of the common law which the courts built around that enactment is that since consent can be spelled out from the landlord’s conduct the intent of the legislator is satisfied and therefore the requirement as to writing becomes a mere formality.

In my view, the application of the doctrine of estoppel to the Rent Restriction Ordinance should be confined to matters which belong to the form only. It seems from the decided cases that the application of the doctrine has so far afforded more protection to the tenant than the landlord. It is earnestly hoped that this should not lead some courts into the notion that the Ordinance itself came into being to safeguard the interests of the tenant alone. To hold such a notion would be to disregard the very policy behind enacting the Ordinance itself. Indeed, the doctrine of estoppel is nothing but a legal device which we, qua courts of law, resort to whenever it lends itself in aid, in our quest for a formula that keeps an equitable and reasonable balance between the competing interests of both the landlord and tenant in view of the objectives and policy which the Act came to serve.

In the light of the facts adumbrated above it is my holding that the doctrine of estoppel does not apply to vitiate the legislator’s intent under the Rent Restriction Ordinance, s. 11. The parties cannot contract outside the Act either in that respect.

It remains to discuss the effect of the contract inter se while the suit was sub judice. It logically follows from the argument heretofore mentioned that this Contract is a nudum pactum, it has no effect in law, qua an agreement as such. The only value of such an agreement is that it is a piece of evidence which tends to defeat the landlord’s claim on the ground that he does not have a genuine need for personal use.

Applicant rallied adequate evidence which establishes that he has to leave the premises where he is residing now. Despite this fact the learned counsel for applicant ought to have said to his client “physician heal thyself.” That evidence is of no avail to applicant. The fact that he should leave the abode where he is residing now should not necessarily mean that he should leave it for the premises demised to the respondent. His latter agreement, I reckon, justifies and warrants the conclusion that he might have an alternative place, otherwise he would not have entered into the agreement. Thus in effect, though on different grounds, the latter agreement inter se led me to the same conclusion reached by my learned colleague.

Ergo, the application is doomed to fail. I concur in the verdict of Baldo J.