Fatehali Ali Peera v. Onorato Della Santa. Misc. Civ. App. 10-D-68, 29/8/68, Georges C. J.

Fatehali Ali Peera v. Onorato Della Santa. Misc. Civ. App. 10-D-68, 29/8/68, Georges C. J.

On 1^st April, 1966, the lessor and lessee signed a three year lease covering the suit premises, at a monthly rental of Shs. 5,500/- per month. At the time of signing the premises, being business premises, were not controlled; the passing of the Rent Restriction (Amendment) (No. 2 ) Act, 1966 brought business premises under rent control as of 1^st January, 1967. The date prescribed for ascertaining the standard rent of existing premises was 1^st January, 1965. At that time the premises here involved were leased to another tenant for Shs. 5,450/- per month. The lessee initiated this action before the Rent Tribunal of Dar es Salaam, alleging that the before the Rent Tribunal of Dar es Salaam, alleging that the rent he was paying was “ extortionate” and requesting that it be “scaled down to conform with that of adjacent properties so as to reflect a just return on the purchase price thereof.” The Tribunal found that the rent on the suit premises was far higher than that for comparable buildings (though it did not inform the parties on what basis it came to that conclusion, which fact constituted a special circumstance entitling the Tribunal to disregard the rental  price on 1^st January, 1965 in setting the standard rent for these premises. It then set the standard rent at Shs. 2,500/- per month, effective as of the date the lease was entered into. The lessor challenged the authority of the Rent Tribunal to set the standard rent in the manner which it did.

            Held: (1) The standard rent for building constructed before the Act went into effect shall be that rent at which they were let as of 1^st January, 1965. Section 4(2)(a) provides an exception to this rule “in the case of any premise in regard to which a Tribunal is satisfied that in the special circumstances of the case it would be fair and reasonable to alter … the standard rent …(to) such figure as the Tribunal shall in all the circumstances of the case consider reasonable.” The crucial question in this case is whether a rent higher than others in an area constitutes a special circumstance, so as to allow the Tribunal to ignore it in setting the standard rent. In two places in the Act the yardstick of rents for comparable buildings is used – where a building can only be used part of the year, and where a building in existence was not rented on the effective date. It will be noted that in both of these situations the yardstick of the rental price as of 1^st January, 1965 could not fairly be used in one case, and not used at all in the other. Had the Legislature intended to use the rental price of comparable buildings as a basis for setting the standard rent it surely would have said so. Otherwise the Tribunal would have to consider and set the standard rent for every covered building; if the Legislature had wanted such a gargantuan task to be under Instead, the standard rent is defined as “….. the rent at which the premises were let at the prescribed date.” [Sec. 4(1)(a)]. (2) “(T)he purposes underlying the Rent Restriction Act and its amendments is the stabilizing of rents at the level existing on a certain prescribed date … (T)herefore … the alleged disparity in the rent between the suit premises and neighboring premises cannot be held to be a special circumstance within the meaning of section 4(2).” Accordingly, the appeal was allowed with costs, and the standard rent set at Shs. 5,450/- per month, Shs. 50/- per month below the contract price, and the rental which was in effect on 1^st January, 1965. (3) The Tribunal may not base its decision on information gained through its regular work

Or expertise, unless it is put before the parties for rebuttal or modification should they desire (and be able) to do so. “It is against natural justice to decided a case on a point noted by the Board as a result of its own efforts and not specifically communicated to the parties so as to allow them an opportunity, if they wish, for contradicting it. [Citing Sharif Marfudh v. Joseph Austin Merulo, Misc. Civ. App. No. 3 of 1967; R. v. Paddington and St. Marylebone Rent Tribunal, Ex Parte Bell London and Provincial Properties Ltd., (1949) 1 All E. R.720]. (4)”It is noticed that the Board made its finding retroactive to the 1^st April, 1966. This cannot be right. The Board does have power to fix a standard rent retroactively, but the fact of the matter is that the premises were not controlled on the 1^st April, 1966. It was not possible to make the rent retroactive beyond the date on which the Rent Restriction Act came into force, which was the 1^st January, 1967.