(COURT OF APPEAL*( 

ZAREEF SALEEB v. HEIRS OF MOHAMEI) EL SAYED EL BARBARY

AC-REV.34-1965

 Principles

·  Landlord and Tenant—Permitted increase of rent—Rent Restriction Ordinance, s. &— Improvement or structural repairs must provide something new for benefit of occupier—Mere replacement of worn out parts is insufficient

·  Landlord and Tenant—Suspension or order of possession—Court may suspend order of possession on condition of payment of arrears within reasonable time

(i) Landlord is permitted to increase the standard rent under Rent Restriction Ordinance, S. 6, when he incurred expenditure in improving and carrying out structural repairs which must provide something new in the premises for the benefit of the occupier. Mere replacement of worn-out parts of the premises does not permit landlord to increase the rent under this section.

(ii) Court may suspend the execution of order of possession on condition of payment of the arrears within a reasonable time, taking into consideration
relevant circumstances, e.g., amount of arrears.

Judgment

Advocate: Mahdi Sharif for applicant

Osman El Tayeb 1. December 6, 1965 :—Plaintiffs are the owners and landlords of the plot known as No. 1 Block 6 C. West Port Sudan Town, which is a big building comprising many shops, one of which is occupied by defendant as tenant, at a monthly rent of £S.4.500m/ms The building is an old one, about fifty years old. In 1958 plaintiff requested all the tenants, including defendant, to vacate their shops temporarily for making repairs. The tenants vacated, and the repairs, that will be discussed later, were made, and as from August 1, 1958, the tenants, including defendant, reoccupied their shops. Plaintiffs, on the cost of construction of the repairs, as assessed by them, claimed an increase of rent, in the case of defendant the increase claimed was £S.3.500m/ms. making the total rent £S.8.oom/ms. Defendant did not pay that rent.

On January 26, 1960, plaintiff instituted .a suit against defendant, alleging that defendant had failed to pay the rent as from August 1, 1958, and up to the end of December 1959 at the rate of £S.8.ooom/ms. and prayed for an order of payment of these arrears and recovery of possession. Defendant resisted the claim, contending that the increase of the rent was not justified, and that standard rent, as it was £S.4.500m/ms was tendered by him to the plaintiff’s agents, who refused to receive it.

As to the question of the repairs the court found on the evidence that

all the cost of repairs carried out on the building was £S.8668

approximately, and that the proportional amount for the shop occupied by the defendant was £S.321 . The increase to the rent, calculated on the ratio of 12 per cent. per annum of the cost of the repairs, came to the sum of £S.3.2I0 m/ms. per month.

The learned District Judge decided that the standard rent was £S.7.710 m/ms. monthly. On the other point, he found on the evidence that there was tender for six or seven months, and that it was tender of the old rent, and decided that it was either insufficient or bad tender. He accordingly made an order of possession.

This decision came to this court on revision (AC-REV-19-1961) and the main point that was considered on the submission of Advocate Mahdi Sharif on behalf of defendant was that the repairs carried out on the building were not of the class that permit increase of the standard rent within the meaning of Rent Restriction Ordinance, s. 6, the relevant part thereof reads:

“The maximum amount by which the standard rent of any premises

may be increased shall be

(a ( An amount not exceeding 12 per centum per annum of any expenditure which the landlord has reasonably incurred since July 1, 1951 on improvements, reconstruction, structural alteration or structural repairs of the premises;”

The Court of Appeal found that the District Judge did not make up his mind on the distinction between ordinary repairs and the special repairs that may come within the meaning of the section, or those that have to be taken in consideration for increase in the standard rent. The court sent back the case for rehearing and decision on this point.

On rehearing, there appeared that extensive works were carried out on the premises. The District Judge decided that the following items came within the meaning of either improvements or structural repairs:

1. Removal of the old roof that was made of timber, and reroofing with reinforced concrete slab.

2.Removal of doors and replacing them by new and better ones.

3.Changing the water disposal system from bucket system to sewage system, and

4.Laying concrete slab in the surrounding floors.

He calculated the expenditure on these items, considered it as expenditure reasonably incurred in improvement or structural alteration, in the building, and divided it on the number of shops (29 in number) to find the proportionate expenditure on defendant’s shop on which the rent should be increased. He found the amount of permitted increase to be £S.2.315 m/ms and decided that the standard rent should be £S.6.815m/ms.

The learned District Judge decided further that he had no reason to change his former decision, that defendant failed to pay rent lawfully due

at the time of institution of the suit, and ordered delivery of possession.

On application to the learned Province Judge against this decision, he

agreed with the decision of the learned District Judge and dismissed the

application.

In the hearing of the present application for revision, defendant was represented by Advocate Mahdi Sharif, but plaintiff failed to appear, and so no argument was advanced on their part. Advocate Mahdi submitted that the learned District Judge was wrong in deciding that those items of repair were improvements Or structural repairs within the meaning of the law, so as to permit increasing  of the rent. He referred to the relevant section of the English Act of 1920 which defines improvement or structural alteration by excluding from it “decoration or repairs.” And the word repairs” is defined as any repairs,” required for the purpose of keeping

premises “ in good and tenantable repair.” The latter definition is identical

with the one we have in the Rent Restriction Ordinance.

As I see it, there is a big difference between our law and the English law on the subject, which is clear from reading of the two corresponding sections. The English law section mentions improvements or structural alteration only and explains their meaning by exclusion of “repairs,” while in Rent Restriction Ordinance, s. 6, “repairs,” are not excluded but are only qualified by being “structural repairs.” From that it can be seen that our law is wider than the English law, so the works that may be considered, in England, as repairs in respect of which no increase in the standard rent may be permitted, may not be given the same consideration in the Sudan. In the present case, all went on, without a contrary suggestion, that the works that were carried out in the premises were either improvements or structural repairs.” So our search shall be for the meaning of these words, that as submitted is by no means clear.

It must be stated from the outset that it is unnecessary that the works done, whether they be classified as improvements or structural alterations or repairs, should bring about a change of identity of the premises, in order to permit increase of the rent. Another test must be found for the distinction between the two kinds of works or repairs; those that would entitle the landlord to ask for enhancement of the rent, and those that would not so entitle him. It might be desirable to consult some of the English cases on the subject.

In Wates v. Rowktnd (1952) 2 Q.B. 12, the ground floor of the house consisted of concrete On which wooden joists and wooden floor laid on those joists. Water seeped between the concrete and the wooden floor, and as a consequence, the latter rotted and became a nuisance. Repairs were necessary. The landlord laid a further layer of concrete over the existing one, and on the surface so raised built a tiled floor In replacement for the wooden floor. On an action for increase of the rent, It was held that the expenditure on the concrete layer was expenditure on an improvement since the house was better than it was ever before, but the expenditure on the tiled floor was one for repairs since it was a necessary replace though it was a better one.

In Morcom v. Campbell-Johnson (1956) 1 Q.B. 106,115 where the above cited case was applied. it was held that in an old building the replacing of an old and worn water-borne drainage and cold water systems by more efficient modern equivalent, and the lowering of the area adjacent to the building which had been defective from its origin, were not within the meaning of improvements that would qualify the landlord to increase the rent, but they were repairs. Denning L.J., in his judgment in this case, said:-

“It seems to me that the test, so far as one can give any test in these matters, is this if the work which is done is the provision of some thing new for the benefit of the occupier. that is, properly speaking, an improvement but if it is only the replacement of something already there, albeit that it is a replacement by its modern equivalent. it comes within the category of repairs and not improvements.”

The test suggest is the provision of something new for the benefit of the occupier, something that was not there originally, as distinct from the replacement of something that was already there but has become dilapidated or worn out. The replacement of a dilapidated part of the premises appears to be, invariably, doing something that ,is necessary for keeping the premises in tenantable repair, here it is not improvement. But where the replacement includes something more, by doing something which is not so necessary; something that is intended to improve the condition of the premises as in Wate’s case, then it is improvement that qualifies the landlord to increase the rent. In every case of repairs there is improvement and sp, I think, the repairs must be substantial structural repairs or alteration, and not only a necessary replacement of a dilapidated or worn-out part, for the purpose of increase of the rent. “Structural,” given its ordinary meaning, means affecting the structure: the walls, the roof or the floor, with regard to their stability, excluding mere decoration work, e.g., painting. And “substantial” means of appreciable quality or on which large expenditure is incurred, in relation to the state of the premises excluding small structural repairs, e.g., tying a crack in a wall and replacing some broken tiles.

In the present case, I am of opinion that there were substantial structural repairs and alterations. The building though old was not dilapidated. It was not necessary to make those repairs in order to keep the premise  in tenantable repair, it appears to me that the landlord intended to improve the general condition of the building, probably as it was said in order to build a floor on top of them. As to the expenditure incurred I should not disturb the finding of the learned District Judge.

The other point raised by the learned counsel is that in any circum stances that right to increase the rent is discretionary and by no means imperative, he submitted that this is understood from section 6. He urged us not to allow increase of the rent. As I see it, the section vests a right in the landlord to have the rent increased by the percentage of the expenditure, prescribed by- it. And where such a right is established on the facts of the case, the court has no discretion other than granting it.

The last point is that of recovery of possession. The learned District Judge decided that, according to the standard rent determined by him, the tenant failed to pay rent law-fully due at the time of the institution, of the suit. Advocate Mahdi submitted that this is not a case where the court has to order possession. He argued that there was a genuine and honest dispute about the standard rent, further defendant has been occupying the shop for about thirty years, except for the period of temporary possession for the repairs, and that he has always been a very good tenant. Advocate Mahdi further submits, as an alternative, that the order of possession be suspended. He refers to Woodfa Landlord and Tenant (26th ed., 1960), p. 1204, where it is said: “Whenever an art order for recovery of possession has been asked for, or has been given but not yet executed, the court has wide powers of adjourning the application, staying or suspending the execution of orders or postponing the date of for any periods it thinks fit, and subject to such Conditions:

(if any) in regard to payment of arrears of rent, current rent. . .“ This English law is statutory law; those wide powers of the court are given by the Act of 1920. In our law, no such powers were given, but, of course, we can apply those rules, when we find them conform with justice, equity or good conscience.

It has been decided in many cases in this court that when there was genuine and honest dispute about the standard rent, and the tenant ceased payment of the rent he had been paying until the standard rent is determined and showed readiness to pay when the rent is determined, the court would not order possession. I do not think that it would be fair to the landlord to refuse an order of possession, without securing ‘ the payment of the arrears, since in any such case there are arrears of rent. The tenant is not to be encouraged not to pay and the landlord is not, to be compelled to enter into another litigation. I think the more appropriate order would be one for possession with a condition for payment of the arrears within a reasonable time, taking into consideration the amount - of the arrears, and any other relevant circumstances.

In this case the amount of the arrears is £S.IO9 for the period of about sixteen months before the institution of the suit at the rate of £S.6.815 m/ms as determined to be the standard rent. I think this amount is not too much for the defendant to pay all at once, especially if he was really honest in his dispute.

The order of the court below to be amended to read: That defendant has to deliver possession of the shop, unless he pays the sum of £S.109 within two months from this day.

Babiker Awadalla C.J. December 6, 1965:-I  concur, and I have nothing useful to add to this lucid and clear judgment.

• Court: Babiker Awadalla Cf. and Osman El Tayeb J.