Case No.:

(HC-Revision-414-1959)

Court:

The High Court

Issue No.:

1960

Principles

·  Landlord and Tenant—Rent Restriction Ordinance, 1953, s. 4—Whether premises old” or “new ‘—Effect of demolition and rebuilding

Where buildings, which are rent, restricted are completely demolished and entirely new premises constructed, albeit on the same site and to the same ground plan, the new buildings are “new premises” within the meaning of Rent Restriction Ordinance, s. 4.
Judgment of the District Judge to the contrary overruled.

Judgment

(HIGH COURT)

EL AMIN ABDEL RAHMAN V. KHALIFA MAHGOUB

(HC-Revision-414-1959)

Revision

Advocate: Yahia (for Mahgoub) ..... For respondent

     The applicant appeared in person

July 23, 1960. Osman El Tayeb J.: —Plaintiff is the owner of two shops known as Plots No. 25 and 26, Block 17, Omdurman Main Market. Defen dant has been the tenant of these premises as one shop at the contractual rent of £S.2o since 1957.

In December 1958 defendant decided to reduce the said rent by 20 per cent, taking advantage of the amendment of the Rent Restriction Ordinance that was passed at that time. Defendant offered the reduced rent of £S.16, monthly to plaintiff, which the latter refused to receive.

Plaintiff brought this action alleging that defendant had failed to pay rent lawfully due and applied for recovery of possession. The question that emerged was about ascertainment of the standard rent, and in par ticular whether the premises were old or new within the meaning of the Ordinance.

The learned District Judge found that the premises were in existence before 1947 as they were built of Galoos, and in 1956 the plaintiff demolished those old buildings and built them of stone foundation, red brick walls, concrete lintels and roofed with timber. But the plan of the two shops was the same as before.

The learned District Judge decided on these facts against the contention of the plaintiff. The plaintiff contends that these are new premises, the standard rent of which is an annual sum equal to 12 per cent, of the cost price of the construction of such premises plus 6 per cent, of the value of the land at the date on which the construction was begun. And as the old

`buildings were demolished and rebuilt in 1956, then the standard rent is the cost price of the construction—given at £S.500, plus the value of the land at the date of construction, i.e., in 1956, given as £S.75 per square metre. The aggregate brings the standard rent to be more than the contractual rent.

The decision of the learned District Judge is that section 6 (a) of the Ordinance has to be applied, and he went on to say that the rent payable before the premises were rebuilt has to be increased by 12 per cent, of the cost price of the construction of the new building. The rent before rebuilding was £S.11 monthly, and the cost of the rebuilding of the premises was £S.500 This cost• allows an increase of £S.5 monthly so that standard rent is £S.16 per month.

The learned District Judge did not expressly say whether he considers these premises new premises or old premises within the meaning of the law, but he tried to make a distinction between premises demolished and rebuilt, and premises built for the first time. I find it difficult to under stand this distinction. Perhaps he is keeping in mind the same landlord, the owner of the land and the buildings, who demolishes the buildings and rebuilds them. Is he to be deprived of the assessment of the buildings as“new premises” when the value of the land at the time of the start of the new buildings should not be taken into consideration? Can he be distinguished from a purchaser of those two shops in 1956, which demolished and rebuilt them?

The learned District Judge brings in his argument that the plan of the two shops remained the same as before. What difference this makes I am unable to understand.

Section 6 of the Ordinance is in respect of permitted increase to the standard rent, whether the premises were old or new premises. In this case we have to find out first whether the premises were old or new premises. They were constructed in 1956, so they are new. The standard rent thereof is to be ascertained with reference to clause (b) under the heading of “Standard Rent” in section 4 of the Ordinance. If they were found to be old premises then the standard rent has to be ascertained with reference to clause (a) or clause (c) of the above section. Clearly none of them is applicable. Under clause (a) there is no argument. Clause (c) is not applicable because there were no “additions or extensions,” but totally new buildings were made.

For these reasons, I am of the opinion that £S.2o, the contractual rent, is not in excess of the standard rent; it must be the rent payable and defendant is not entitled to reduce by 20 per cent.

The reduction of rent in pursuance of the amendment of 5958, and the offer of that reduced rent is not failure to pay rent lawfully due, so no order of recovery of possession can be made in favour of plaintiff.

Decree has to be issued in favour of plaintiff for the payment of the arrears claimed with costs, and the rest of the claim is dismissed, with costs.

                                                         (Revision allowed)*

* A further application for revision (AC/Rev/290/1960) was summarily dismissed.