(Court OF APPEAL)*

HABEEB KOHEIN  v. THE AFRICAN COMMERCIAL COMPANY

AC-REV-232-1964

 Principles

·  Landlord and Tenant-Waiver-Rent Restriction Ordinance , s, 9-No waiver of statutor notice by accepting increased rent

·  Landlord and Tenant-Eviction-No eviction when non-payment is due to honest dispute to standard rent-Restriction Ordinance ,s, 11(a).

Plaintiff claimed possession of his  shop from defendants on the ground that defendants failed to pay rent lawfully due under Rent Restriction Ordinance A.11 (a). Defendants  claimed that the rent was in excess of the standard rent and decided that the defendants failed to pay rent lawfully due and ordered eviction. Judge of the  High Court after fixing the standard rent refused to confirm the order of eviction and found that defendants were not in arrears because no valid notice in writing to increase the rent as required by Rent Restriction ordinance, s, 9, was complied with.
Held: (i) Acceptance to pay the increased rent does not operate as a waiver of the statutory notice in writing under Rent Restriction ordinance s.  9.
 

(i)   As there is genuine  and honest dispute to the standard rent, the unpaid rent does not become lawfully due under Rent Restriction ordinance,

Judgment

Advocate: M. Zarroug……………...……….for applicant

                 Abdel Wahab and El Tigni………for respondents

Osman El Tayeb J. June 17, 1965:-This an applicant for revision from the order of Hassib Judge , dated March 28.1964, reversing the decree of District Judge Khartoum, dated August 26.1963, passed in favour of plaintiff (applicant) for payment to him of the sum of  Łs340.000m/ms. And costs in respect of arrears of rent, and possession of the premises, a shop, known as plot No. 5 Block 3. C.W. Khartoum.

Plaintiff brought this suit claiming possession the said premises under Rent Restriction Ordinance ,s, 11 (a), that defendant  had failed to pay rent lawfully due, and the recovery of that rent for the months of December 1961 and January 1.1965, the monthly rent is Łs8.000m/ms. Per month; that is agreed between the parties to be in respect of local rates. Subsequently, plaintiff amended his claim to include the next coming three months. During the hearing defendants settled all the rent claimed at the contracted at the contractual rent.

Defendants resisted the claim on the grounds that the said rent is not, but in excess  of, the standard rent, and applied for fixing the standard rent. This is the main point that came up for decision in the courts below and in this court.

The evidence proved that the premises are old premises within the meaning of section 4of the Ordinance.

They were sub-let to this same tenant, the defendants, at the monthly rent of Łs35.340m/ms on July 1.1951. But shortly afterwards,  in August of that same year,  that same rent was increased to Łs60.000m/ms In and defendants became his tenant, when they executed the contract dated January 1.1956, agreeing on the rent which was last paid by defendants to the previous landlord. Plaintiff pleaded that the increase of the rent was due to some additions and improvements that were made in the premises: that he failed to prove.

It is proved that the local rats and taxes of the leased premises have been increased since 1958 by the sum, of Łs9.391m/ms; it seems that from that date, on the request of plaintiff, defendants, have been paying this increased amount of the rates.

The Judge decided the standard rent to be Łs9.391m/ms equal Łs44.731m/ms he further decided that defendant failed to pay rent lawfully due. I think he was having in mind the rent of the months before institution of the suit, and ordered possession. I cannot understand the sum that is ordered to be paid to plaintiff, since it was admitted that defendants paid it during the progress of the suit.

The point raised before the Honourable the Judge of the High Court was that the learned District Judge was wrong in increasing the rent by the increased amount of the local rates, since plaintiff had not given notice of increase to defendants. It was submitted that the standard rent is only Łs35.340m/ms; that being so, defendants are entitled to set off the difference during the six months immediately preceding the institution of the suit, between the rent that they were paying and the standard rent, to over the rent of the three months that then was not paid. In reply it was submitted for plaintiff, that defendants accepted to pay the increase and have been paying it for many years without notice, and so they waived their right to the notice.

The learned Judge of the High Court decided that a valid notice in writing of the intention to increase the rent by the amount of the increased rates as required by Rent Restriction Ordinance, s, 9 must be complied with and since it was not served the increase was not permissible. The standard Rent he decided, was Łs35.430m/ms; only, He decided further in his own words : “The tenant is entitled to the provisions of Rent Restriction Ordinance, s, 18, to recover the deference for the last six months immediately preceding the claim by either a set-off or by deduction the same in three monthly installments from the Rent Restriction payable to the landlord or even as a civil debt.” The honourable Judge decided again the claim for possession, it seems, on the grounds that, first, the defendants settled all the arrears of Rent Restriction after institution of the case, and secondly they have been paying a big sum, abut Łs32.000m/ms; monthly in excess of the standard Rent.

Before this court in the absence of counsel for defendants counsel for plaintiff (applicant) argued that he increase of the local rates was permitted and that the notice was unnecessary, since defendants have been paying it since 1951. it is to be observed that it is not clear in the evidence that defendants have been paying this amount since 1951, on other hand there is evidence to show that the increase in the local rates took place gradually until in 1958 it reached the sum in dispute. On the question of the notice which is virtually alleged to have been waived by the tenants, by their acceptance to pay without being served with notice in writing. we have not been informed by counsel for plaintiff of any authority in which the point was decided. There are many cases in which wavier was discussed in respect of the written consent For sub-tenancy. In these cases there were conflicting opinions, and until that same point comes up, I should not cite any of them here.

However, in my opinion the acceptance to pay the increased, and it remains illegal or not permitted by the law for so long as the notice in writing illegal or not permitted by the law for so long as the notice in writing was not given. Defendants are entitled to raise it now  and to succeed on it.

I come to the question of the claim for possession. There is no dispute that there was default in payment of Rent for three months, at the time of the institution of the suit, that was settled afterwards. This is generally a strong ground for eviction. But what is the effect of the fact that the tenant was paying much more than the standard Rent Restriction and he made a dispute about it? In Abdel Wahab Mohamed Meki Khalid v. E. Zervos (1960) S.L.J.R.43. the tenant had made a written request to the landlord to supply him with a statement as to the standard Rent , and when he was sued for Rent Restriction, lawfully due and not paid and accordingly for possession, he paid all that Rent Restriction on the standard Rent Restriction agreed upon in court, and as to possession Abu Rannat  Chief Justice,  said:

“ Possession may only be recovered if Rent Restriction is in arrears when proceedings were commenced, and the court thinks it reasonable to make the order, and in deciding whether it is reasonable to make the order the Judge must take into account in a broad common sense way all the relevant circumstances as they exist at the date of the hearing, giving such weight as they think fit to the various factors in the situation. In this case, the tenant was always ready and willing to pay if the standard Rent was ascertained and as soon as this was on a wrong standard Rent is not lawfully due and in my view it would be unreasonable to grant the relief asked for by the landlord in such circumstances”: (1960) S.L.J.R. 44.

I venture to say that this statement of law is very wide since it may mean the tenant will have to be protected, when he disputes the Rent whether before or after the institution of the suit, and that his dispute is an honest one; by proving that the Rent Restriction he is paying is in excess of the standard rent; and that he is ready and willing to pay. This meaning is strongly emphasized by saying “rent calculated on a wrong standard rent is not lawfully due”; that when it is proved that the rent in respect that default, at least to the extent of the excess, is not rent lawfully due that will warrant and justify the eviction of the tenant In the case of Costis Triziz Ltd. v Idris Ahmed EL Konzi (1960) S.L.J.R 219 the dispute about the standard rent was made after institution of the suit, and it was found that the difference between the standard rent and the contractual rent was very small; the former was Łs25.000m/ms; Eviction was ordered, it seems on the ground that the dispute was not and honest one.

In the case of Ali El Sayed El Kobani v. Heirs of Ahmed El Mahdi (1960) S.l.J.R. 255.the default  payment was with respect to the local rates, which the tenant honestly thought that they were not payable by him, Babiker Awadalla Judge, on page 257, after quoting the statement above cited from the judgment of Abu Rannat chief Justice in Abdel Wahab Mohammed Meki Khalid v. E. Zervos (1960) S.L.J.R. 34. Said:

“In that case there was a dispute as to standard rent, as there is here. Considering the fact that applicant has never failed to pay the rent as it fell due, and his failure was simply by reason of a genuine belief that he was not answerable for rates, it would no doubt be contrary to spite of the Rent Restriction Ordinance to order eviction if the tenant is prepared to pay the rent as declared buy this court.”

Returning to our present case, we find in favour of the tenant , that he has been a good tenant , and that after the institution of the suit he paid all the arrears at the contractual rent. That although he raised the dispute about the standard rent after institution of the suit, it was a genuine and honest dispute, by the fact that he was paying was Łs35.340m/ms; while the contractual rent that he was paying was Łs68.0001m/ms; the later is nearly double the former. It is clear that the difference in the immediately preceding six months, that is recoverable under Rent Restriction Ordinance, s, 18, would have covered the standard in the three months that he defaulted in paying. In these circumstances, this court is not disposed to order recovery of possession.

This application is dismissed.

Hassan Abdl Rahim p.j. June 27.1965:-I agree.