SHELL AND BP LTD v WILBARD FULGENCE RWENYAGIRA 1984 TLR 251 (CA)

SHELL AND BP LTD v WILBARD FULGENCE RWENYAGIRA 1984 TLR 251 (CA)

Court Court of Appeal of Tanzania - Dar Es Salaam

Judge Mustafa JJA, Makame JJA and Kisanga JJA

October 18, 1985

B CIVIL APPEAL 25 OF 1984

Flynote

Rent Restriction Act - Landlord and Tenant - National Housing Corporation

exempted from the provisions of C sections 19 and 20 of the Rent Restriction Act -

Such exemption attaches to premises.

Landlord and Tenant - Tenant sublets to its employee - Tenant seeks to repossess

premises on employee resigning from employment - Landlord offers tenancy to the

subtenant - Whether such offer terminates D tenancy between the landlord and the

tenant- Rent Restriction Act, ss. 19 and 20 - G.N. 86 of 1970.

-Headnote

In 1971 the appellant leased some premises for occupation by its employees. In 1972

due to the operation of the Acquisition of Buildings Act the suit premises became

vested in the National E Housing Corporation. From then on the appellant

continued to pay rent to the National Housing Corporation. The house which was

furnished by the appellant was allocated to the respondent, employee of the

appellant, in 1974. The respondent resigned from employment of the appellant in

March, 1979. The appellant then called upon him to vacate the premises. He refused

to vacate F claiming that he was a "lawful tenant/subtenant of Messrs, National

Housing Corporation." He produced a document from the National Housing

Corporation offering him tenancy of the suit premises.

The trial magistrate found that on the strength of the letter of offer of tenancy to the

respondent by G the National Housing Corporation, the landlord, the respondent

was the lawful tenant of the premises. The first appellate court agreed with the trial

magistrate on this point. The judge held that since National Housing Corporation is

exempted from the provisions of sections 19 and 20 of the H Rent Restriction Act by

virtue of G.N. 86 of 1970 it could recover possession of the suit premises from the

appellant without the necessity of going to court. The court was of the view that the

letter of offer of tenancy to the respondent constituted the termination of the

appellant's tenancy of the suit premises.

I The appellant appealed against the finding that the respondent and not itself is the

lawful tenant of the suit premises.

1984 TLR p252

MUSTAFA JA

Held: (i) Exemption from the provisions of sections 19 and 20 of the Rent Restriction

Act by virtue of A G.N. 86 of 1979 has nothing to do with the termination of

tenancy or with the recovery of possession;

(ii) the offer by National Housing Corporation of a tenancy to the respondent

could not be construed as an act terminating the appellant's tenancy; B

(iii) the appellant was entitled to recover possession on the termination of the

respondent's employment.

Case Information

Order accordingly. C

No case referred to.

M.J. Raithatha, for the respondent

R.C. Kesaria for the appellant

[zJDz]Judgment

Mustafa, J.A. read the following judgment of the court: The background to this appeal

is briefly as D follows. A house on Plot 28, Block D along Upanga Road, Dar es

Salaam was leased by Shell and B.P. Tanzania Ltd. (hereafter called Shell) from its

owner in 1971. Shell had leased the said house E and some other premises for

occupation by its own employees. In 1972, due to the operation of the Acquisition of

Buildings Act the house became vested in the National Housing Corporation which

became its landlord. Shell continued payment of the rent of the house to the National

Housing Corporation. Shell had furnished the house and sometime in 1974, Wilbald

Fulgence Rwenyagira F (hereafter called the respondent) an employee of Shell, was

allocated the said house for his occupation. It is common ground that the respondent

occupied the said house by virtue of his employment with Shell, that Shell was paying

shs.800/= the monthly rent of the house, and that 12 G 1/2% of the respondent's

salary was deducted at source toward such rent. When the respondent occupied the

house, he signed an inventory of furniture and articles which was exhibited at the

trial court.

The respondent resigned from Shell in March, 1979. Following such resignation Shell

called upon H the respondent to vacate the house. By letter date 12.7.79 the

respondent wrote back that he expected to move out by the end December, 1979 and

he asked Shell to deduct the rentals due until December, 1979 from monies belonging

to the respondent in the hands of Shell, and agreed to Shell I checking the furniture

in the house.

1984 TLR p253

MUSTAFA JA

A However on 15.8.79 the respondent filed a suit in the Resident Magistrate's Court,

Dar es Salaam, claiming that he was the "lawful tenant/sub-tenant of Messrs. National

Housing Corporation" in respect of the house on Plot 28 Block D. He complained

that Shell was committing unlawful acts in B order to evict him and prayed for an

injunction to restrain Shell from doing so. A temporary injunction was issued in

favour of the respondent.

Shell filed its defence and denied that the respondent was the lawful tenant or subtenant

of National Housing Corporation and maintained that the respondent occupied

the suit premises as its C employee. As the respondent had left his service with

Shell, the respondent had lost his right of occupation and Shell counterclaimed for

vacant possession of the premises and the return of the furniture and articles, and for

damages for loss of use of such articles and furniture at Shs. 1,000/= D per month

until the return of the articles and furniture.

At the trial in the Magistrate's Court the respondent claimed that he had been offered

the tenancy of the suit premises by National Housing Corporation. He produced a

document from National Housing Corporation dated 16.1.80.

E The trial magistrate found that the respondent was the tenant of the suit premises

on the strength of the letter from National Housing Corporation to him dated 16.1.80

and that Shell was not entitled to vacant possession. He also held that as the furniture

was in the suit premises Shell had lost its F right to it once National Housing

Corporation became the landlord. He gave judgment for Shell in the sum of

Shs.5,600/= being rent paid by Shell on behalf of the respondent to the end of

December, 1979.

Shell appealed from that judgment to the High Court. The judge (Bahati, J.) held that

the National G Housing Corporation was exempted from the provisions of sections

19 and 20 of the Rent Restriction Act by virtue of G.N. 86 of 1970 and could recover

possession of the suit premises from Shell without the necessity of going to court,

despite the provisions of section 11(A) 91) of the Rent Restriction Act. When

National Housing Corporation forwarded the document dated 16.1.80 to the H

respondent that constituted a valid tenancy agreement and presumably that also

constituted the termination of Shell's tenancy of the suit premises. The judge upheld

the finding of the Magistrate that the respondent was the tenant of National Housing

Corporation of the suit premises and I declined to rule whether the sub-tenancy of

the respondent with

1984 TLR p254

MUSTAFA JA

Shell came to an end on the termination of his employment in the circumstances. A

The judge held that the furniture and articles listed in the inventory belonged to Shell

and ordered the return of such articles to Shell by the respondent. He also assessed

damages for loss of use at the rate of shs. 1,000/= per month from 25.5.79 to the date

the furniture and articles are returned to B Shell by the respondent. He also upheld

the Magistrate's order that the respondent shall pay Shell the sum of shs. 5,600/= for

rent due to 31.12.79.

From that judgment Shell has appealed to this Court. Shell has appealed against the

finding that the respondent, and not Shell, is the lawful tenant of the suit premises.

The respondent has cross- C

appealed against the judge's finding that the furniture was the property of Shell and

the order for its return and against both the award of damages and its quantum for

loss of use. The respondent in the alternative contended that Shell had not alleged or

established that the conditions needed for D re-possession in terms of Section 19(1)

(e) and 19(2) of the rent Restriction Act had been complied with.

We will deal with the issue of vacant possession claimed by Shell first. It is clear that

National E Housing Corporation became Shell's landlord of the suit premises by

virtue of the Acquisition of Buildings Act in 1972. However the tenancy of Shell had

not been terminated at any time and Shell remained the tenant of the suit premises.

It is true that National Housing Corporation is exempted from the provisions of

section 19 and section 20 of the Rent Restriction Act by G.N. No. 86 of 1979, F but

those provisions have got nothing to do with the termination of tenancy or with the

recovery of possession. Those provisions only create conditions which have to be

complied with before possession is granted. There was no evidence of any kind that

National Housing Corporation has G terminated Shell's tenancy, or has recovered

possession of the premises.

The offer by National Housing Corporation of a tenancy to the respondent by its

letter of 16.1.80 could not be construed as an act terminating Shell's tenancy. It is

worthless for that purpose. Shell H remains the tenant of the suit premises and the

respondent had occupied the premises from Shell by virtue of his employment. Shell

was entitled to recover possession on the termination of the respondent's

employment. Mr. Raithatha has pointed out that Shell has not established that it I

required the premises for some other employee in its employment in terms of section

19(1)(e) of the Rent

1984 TLR p255

MUSTAFA JA

Restriction Act or that it was reasonable to make the order of re-possession in terms

of section 19(2) of the said A Act. That is true. However we have carefully

considered G.N. 86 of 1970 the relevant part of which reads:

(1) ... B

(2) All premises in respect of which the National Housing Corporation

established by the National Housing Corporation Act, 1962, is the landlord, are

hereby exempted from the provisions of section 19 and section 20 of the Rent

Restriction Act, 1962, and from all other provisions of the said Act which operate so

as to confer upon a tenant a D statutory tenancy upon the determination of his

contractual tenancy.

Obviously National Housing Corporation is the landlord, albeit the head landlord, in

respect of the suit premises. As such the premises are exempted from the provisions

of sections 19 and 20 of the Rent Restriction Act. Mr. Raithatha submitted that the

exemption can only apply if National Housing Corporation is the direct landlord, and

is itself involved in re-possession. We do not agree. The exemption would seem to

attach to premises of which E National Housing Corporation is the landlord. Such

premises are exempted premises, just as certain premises are rent controlled premises.

If G.N. 86 of 1979 is construed in accordance with Mr. Raithatha's submission, a

curious result will emerge. The respondent would be a protected tenant vis-a-vis

Shell, but once National Housing F Corporation recovers possession, the

respondent's protection ceases, although he remains in occupation of the same

premises. That cannot be right. We agree with Mr. Kesaria's contention that as the

suit premises are exempted premises, the conditions of section 19 and section 20 do

not apply to Shell for its recovery of the premises from the G respondent. Shell is

entitled to an order of possession.

As regards the order for the return of the furniture and articles, the evidence clearly

establishes that those articles were supplied by Shell. There was also evidence of

demand of the return of the articles by Shell. We are satisfied H that the High

Court was right to order damages for loss of use of such articles. We have had sight of

the inventory, as had the judge. It is true, as Mr. Raithatha has contended, that the

figure of shs. 1,000/= a month for loss of use assessed by the judge is arbitrary. But in

view of the variety, range and quantity of the furniture and I articles, consisting of

both so-called soft and

1984 TLR p256

hard furnishings, we are unable to say that the sum assessed is unreasonable or needs

interference. A We do not think that we should substitute our arbitrary figure for

that of the judge. It is true that Shell should have led evidence as to the cost or value

of the articles, but in the circumstances we do not think that the omission is fatal, as

there was sufficient material for an assessment to be made. B

In the result we allow the appeal of Shell, set aside the judgments of the courts below

declaring the respondent as the tenant of the suit premises, and substitute therefor an

order that the respondent vacates the suit premises on or before 15th November,

1985. The respondent is also to pay mesne C profits to Shell for the suit premises at

the rate of Shs. 800/= per month for such sum as would be found due and owing to

Shell by the respondent.

The cross appeal of the respondent is dismissed in its entirety.

We award Shell the costs of the appeal and the cross appeal. D

Order accordingly.

1984 TLR p256

E