House turned out be an ‘eating house’

A tenant wishing to purchase a house from a landlord met with resistance from the latter who characterized the premises as business premises, used primarily for commercial purposes. The tenant, though given an adverse ruling initially by the Commissioner of National Housing appealed subsequently to the Ceiling on House and Property Board of Review, which ruled in his favour. The ruling was that the building was a house, and that it could therefore be purchased for housing purposes.

The landlord appealed the ruling in the Court of Appeal which however affirmed the ruling of the Board. Aggrieved by this Court of Appeal ruling the landlord appealed to the Supreme Court. (Moosajees Limited v. Arthur and Others - SLR - 65, Vol 1 of 2006 [2002] LKSC 47; (2006) 1 Sri LR 65 (December 5, 2002).)

The Supreme Court judgement notes the circumstances of the case as follows:

“The 1st respondent-respondent (‘the 1st respondent’) made an application under Section 13 of the Ceiling on Housing Property Law, NO.1 of 1973 (‘the C. H. P. Law’) to the Commissioner of National Housing (‘the Commissioner’) to purchase the premises bearing No. 17, Hunupitiya Road, Colombo 2, and the Commissioner by his order dated 25.01.1984, dismissed the application holding that the premises were business premises. The 1st respondent appealed against that order to the Ceiling on Housing Property Board of Review (‘the Board’) under Section 39(1) of the C. H. P. Law, and the Board reversed the Commissioner’s finding and allowed the appeal on the basis that the premises in question were residential and therefore a house. The petitioner-appellant (‘the petitioner’) thereafter invoked the jurisdiction of the Court of Appeal seeking to quash the said order of the Board by way of a writ of certiorari. The Court of Appeal by its judgement dated 09.02.2001, dismissed the petitioner’s application”.

As per Section 47 of the C. H. P. (Ceiling on Housing Property) Law there were clear guidelines that determine which is a house and which is a business premises, Court held.

A house is an independent living unit, Court underscored in judgement. Furthermore, a house must be an independent living unit constructed originally for residential purposes, it was clarified.

The petitioner in the case under review contended that the premises were originally used as an eating house and had been a business premises and had been used as such at the very outset.

The judgement states:

“It would be manifest that there was no dispute that from 1943, since the 1st respondent came into occupation of the premises, that the premises were used for residential purposes. But to enable the 1st respondent to purchase it, it must be shown that the premises were constructed mainly or solely for residential purposes. It was open to the 1st respondent to state that premises had been continuously used as a residence thereby entitling him to the protection of the Rent Act. However, it would be a different situation when the (1st respondent) tenant makes an application under Section 13 of the C. H. P. law to purchase it, where different criteria are spelt out under Section 47 of the C. H. P. Law.”

In the circumstances, the Board misdirected itself in addressing the question whether the said premises were business premises or not, Supreme Court held. This misdirection was the outcome of failing to appreciate the provisions of Section 47 of the C. H. P. Law, about which this article would go into further detail in the next few paragraphs.

Supreme Court clearly held that the Court of Appeal misdirected itself in applying the Test of User because Section 47 of the C.H.P Act envisaged that the decision should be dependent on what the house had initially been built for i.e the purpose, whether it’s residential or otherwise. The Test of User entailed that the building has continuously and for a long time been used for residential purposes, a fact that was beyond dispute in this case.

Supreme Court cited the following judgements:

“It is necessary to consider the decisions of this Court, on the definition of a house as given in Section 47 of C. H. P. Law.

The case of Abeysekera vs. Wijetunga (2 SLR 737 at p. 739) laid down the rule that the test to be applied to determine what a house is, for the purposes of C. H. P. Law, must be an objective test and not a subjective one and that its initial construction and the purpose of construction is what matters.

“In Mohamed Ismail vs. Hussain ((1993) 2 SLR 380) Court applied the criterion of user mainly because of the lack of direct evidence relating to the initial purpose of construction.”

However, it was disclosed in the instant case that the premises had been originally assessed as a house.

When a person alleges that a certain position obtains, in Court, he needs to establish the facts of the matter through presentation of evidence. In other words the burden of proof lies on such an individual.

The Supreme Court judgement states:

“Section 101 of the Evidence Ordinance provides:

“Whoever desires any Court to give judgement as to any legal right or liability dependent on the existence of facts which he asserts, must prove those facts exist. When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person”.

Court was also of the opinion that this section (101) of the Evidence Ordinance establishes that the burden of proof needs to be established as a whole pertaining to the entire case by the person asserting the facts. This was different from Section 103.

Section 103 of the Evidence Ordinance states:

“The burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person”.

The difference in scope for 103 which pertains to a particular fact, could be seen from illustration (A) to Section 101 which states as follows:

“A desires a Court to give judgement that B shall be punished for a crime which A says B has committed. A must prove that B has committed the crime.”

But however, where B concedes that he committed the act alleged but pleads that it does not entail criminal liability since the general exception ‘relating to exercise of the right to private defence or any special exception contained in the Penal Code is applicable, B is bound to establish facts to bring him within that exception. (Vide Section 105).”

Supreme Court judgement then went into great lengths to explain what section 102 of the Evidence Ordinance entails. Primarily if both parties to a suit give evidence it is the party that would fail if no evidence was given on the other side, that has the burden of the proof. This is the essence of Section 102 of the evidence ordinance.

The leading of evidence before a Labour Tribunal was cited:

“The question as to which party should begin to lead evidence before the Labour Tribunal came up for consideration before the Supreme Court in the case of David J. Anderson vs. Ahamad Husny ((Appellate Law Recorder Vol 2 March 2001 p. 13.)

The Court held that although the Labour Tribunal is not bound by the Evidence Ordinance, the principle enshrined in Section 102, that the person on whom the burden of proof lies would fail if no evidence at all were given on either side, is a common sense principle, departure from which would not be justified if the circumstances do not warrant such a departure.”

In the case under review in applying section 47 of the C.H.P Law the burden of proof is on the first respondent to prove that the premises were originally intended to be used for residential purposes but this burden was not discharged, Judgement clearly stated.

To quote verbatim from the judgement:

“Accordingly, I hold that the burden of proof that the premises were constructed for residential purposes lay with the 1st respondent, and has not been discharged”.

The Appeal was allowed and the Board of Review order and Court of Appeal judgement were both set aside. Costs of Rs. 5,000 were ordered against the 1st respondent payable to petitioner.