SFARIJLANI vs. BASIL [1973] 2 GLR 260

CASES REFERRED TO

(1) Epsom Grand Stand Association Ltd. v. Clarke [1919] W.N. 170; 35 T.L.R. 525; 63 S.J. 642, C.A.

(2) Shrimpton v. Rabbits (1924) 131 L.T.478; 40 T.L.R. 541; 68 S.J. 685.

NATURE OF PROCEEDINGS

APPEAL from a judgment of the High Court, Accra, in which the court upheld a district court’s decision granting an order for delivery of

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possession of premises to the respondent. The facts are fully stated in the judgment of Archer J.A.

COUNSEL

Alhaji B. Kwaw Swanzy for the appellant.

Narh for the respondent.

JUDGMENT OF ARCHER J.A.

In 1954, the respondent as landlord granted a lease of a shop in a house known as No. D974/3 Knutsford Avenue, Accra, for a period of ten years. After various assignments, the appellant became the assignee of the residue of the term in September 1962. When the residue expired, the appellant continued to occupy the premises as a statutory tenant by virtue of the provisions of the Rent Act, 1963 (Act 220), until March 1967, when the respondent through his solicitor gave the appellant one month’s notice to determine the statutory tenancy on the ground that the respondent required the shop for his own business purposes. The respondent at the same time gave the appellant the six months’ statutory notice laid down by the Rent Act, 1963 (Act 220), of his intention to apply to the court for an order for the recovery of possession if the appellant did not deliver up possession.

The appellant refused to quit and accordingly the respondent applied to the district court at Accra for an order for delivery of possession. The learned district magistrate after taking evidence and hearing legal submissions made on behalf of the parties, gave judgment for the respondent. The appellant then appealed to the High Court at Accra which also upheld the judgment of the trial court. Still not satisfied, the appellant appealed to this court. Various grounds of appeal were filed and argued but the main legal point was whether the respondent fulfilled all the statutory conditions required of a landlord who reasonably requires premises for his own business purposes.

Section 17 (1) (h) of the Rent Act, 1963 (Act 220), relied on by the respondent provides as follows:

“17. (1) Subject to the provisions of subsection (2) of section 25 and of section 28, no order against a tenant for the recovery of the possession of, or for the ejectment from, any premises shall be made or given by the appropriate Rent Magistrate, or any other Judge of a court of competent jurisdiction in accordance with the provisions of any other enactment for the time being in force, except in any of the following circumstances:-…

(h) where the lease has expired and the premises are reasonably required by the landlord to be used by him for his own business purposes, such premises being constructed to be used as such, if the landlord has given not less than six months’ written notice to the tenant of his intention to apply for an order for the recovery of the possession of, or the ejectment from, the premises.”

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The evidence on record clearly shows that the residue of the lease held by the appellant had expired but he had continued to remain in possession as a statutory tenant. Accordingly, the respondent gave notice terminating the statutory tenancy and at the same time gave six months’ notice of his intention to sue for recovery of possession. Furthermore, there was evidence that the respondent was the proprietor of a perfume factory and had indicated his intention to use the shop in question for the wholesale, display and retail of his perfumes. Nevertheless, learned counsel for the appellant vigorously stressed before this court that there was no evidence that the shop in question had been constructed to be used as a suitable place for the respondent’s business. The argument, therefore, continued that this statutory requirement was not fulfilled by the respondent. There is no doubt that this requirement is an essential statutory condition but it seems that the evidence on record affords a complete answer to the argument by learned counsel for the appellant. The premises in question have always been used as a shop since the appellant took over the residue of the lease in 1962. It follows, therefore, that the premises in question have been constructed to be used as a shop and the appellant has been storing and retailing his goods in that shop. The respondent, on the other hand, is a manufacturer of perfumes and pomades at a factory situated elsewhere in Accra but he wants this particular shop for the wholesale, display and retail of his perfumes and pomades. In other words, he also wishes to use the premises as a shop. In the face of the evidence it is difficult to see how one can successfully argue that the premises have not been constructed to be used for the purpose for which the respondent had in mind. Different situations may arise where this statutory requirement may become so pertinent that a landlord may be defeated in his intentions. For instance, if the present respondent wanted the premises for an “abattoir” or a piggery, his request would certainly be rejected by the court because the premises have not been constructed to be used as such.

The real issue in this appeal is whether the “premises are reasonably required” by the respondent for his own business purposes. In this respect, the burden of proof must rest with the landlord: see Epsom Grand Stand Association Ltd. v. Clarke (1919) 35 T.L.R. 525, C.A. When the landlord has discharged the burden, it seems to me that the court’s discretion must be exercised in favour of the landlord and it is immaterial whether the tenant will suffer greater hardship or not. It must be pointed out that the guidelines for the court when considering an application by a landlord for the recovery of premises which he requires for his personal occupation as a dwelling house by himself, a member of his family or any person in his whole time employment under section 17 (1) (g) are different from those under section 17 (1) (h). Under the former, the court is enjoined not to make an order if it is not satisfied that the landlord usually provides accommodation for the employee. Moreover, the court is empowered to refuse to make an order if greater

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hardship would be caused to the tenant if the order for possession were granted. These two considerations do not apply where a landlord requires the premises for his own business purposes. If the legislature had intended that these two considerations should be borne in mind by the court, the legislature would have added them as a proviso to section 17(1) (h).

Under section 17 (1) (g), there are two questions for the court, the first being whether the landlord’s desire for possession is reasonable, the second being whether it is reasonable to gratify that desire, and an affirmative answer to the first question does not preclude a negative answer to the second. See Shrimpton v. Rabbits (1924) 131 L.T. 478, where these two questions posed for consideration by the court by similar provisions in the English Rent Acts were pointed out. Acton J. put it thus at p. 479:

“There are two processes which have to be gone through. The first process is to ascertain whether the wish which the landlord has for the possession of the premises is a reasonable wish, and of course unless that is demonstrated there is an end of his claim. But after it has been ascertained that the desire or requirement of the landlord is a reasonable desire or requirement, there follows a further question too often hitherto either ignored altogether or confounded with the question I have already mentioned, namely, is it in all the circumstances of the case reasonable that the court should grant or gratify that reasonable requirement.”

The words in the proviso to section 17 (1) (g) are more specific but they demand the same two processes of reasoning. Whereas under section 17(1) (h) the burden is on the landlord alone to show that he reasonably requires the premises for his own business purposes. Whether or not greater hardships will be caused to the tenant by making a possession order is not a factor which the court must consider. The issue of whether there is reasonable requirement or not is a question of fact and the decision of the court below should not easily be upset on appeal.

In the present case, both the trial court and the appellate High Court ruled that the respondent was entitled to recovery of possession of the premises as all the statutory conditions imposed by section 17 (1) (h) had been fulfilled by the respondent and it would be unusual for this court to upset the findings of fact made by the court below. However, during the hearing of this appeal, the attention of learned counsel for the respondent was drawn to the fact that, before the judgment of the High Court was delivered on 3 March 1971, the Ghanaian Business (Promotion) Act, 1970 (Act 334), was already in force, and the question for this court to decide was whether the respondent was permitted by the laws of this country to carry on a wholesale or retail business for which he requires the premises in question. Section 11 (1) of Act 334 provides:

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“Subject to the provisions of this Act no person other than a Ghanaian shall own or be part owner of any enterprise concerned with retail or wholesale trade on or after the 1st day of August, 1970 where the annual sales of such enterprise as reflected in the income tax returns of that enterprise for the tax year 1967-68 do not exceed five hundred thousand new cedis.”

The respondent is not a Ghanaian and his business concerns in Ghana are caught by the provisions of Act 334. Every opportunity has been given to the respondent to show that he has a permit to carry on wholesale or retail trade in Ghana. At the last hearing when judgment was reserved, learned counsel for the respondent announced in court that his client had no permit to retail or to sell by wholesale. There is no indication that at the time of writing this judgment, the respondent has made any attempt to procure a permit. In the absence of any evidence that the respondent has a permit or confidently hopes to obtain one, the matter for consideration by this court is whether in the circumstances, the respondent reasonably requires the premises for his own business purposes. The answer must be in the negative. His requirement cannot now be genuine or sincere. If a possession order is made, the respondent cannot legally sell his perfumes by retail or by wholesale in the premises in question and as a businessman he may not allow the shop to remain vacant and lose his rent. No doubt he will be tempted to apply to a rent magistrate for permission to let it to a new tenant under section 17 (7) of the Rent Act, 1963 (Act 220), or he may choose to let it two years after obtaining the possession order without applying to the rent magistrate for permission to do so. These possible moves will clearly defeat the objectives of the provisions of section 17 (1) (h) of the Rent Act, 1963 (Act 220). Briefly, he does not need the premises for his own business purposes.

In conclusion, I think that if the provisions of section 11 (1) of the Ghanaian Business (Promotion) Act, 1970 (Act 334), had been brought to the notice of the learned High Court judge as existing legislation that has affected or altered the rights of the respondents, he would have allowed the appeal and reversed the order of the rent magistrate.

For the above reasons, I would allow the appeal.

JUDGMENT AZU CRABBE C.J.

I agree.

JUDGMENT OF LASSEY J.A.

I also agree.

DECISION Appeal allowed. S. O.