Court dismissed rent increase application, holding it cannot take judicial notice of market rents.

[*342] 1976 December.23

(PIKIS,AG.P.D.C.)

IN THE DISTRICT COURT OF LARNACA

Angelis Nicolaou,

Applicant,

and

Stelios N. Kassou,

Respondent.

(Rent Application No. 10/76).

Landlord and tenant - Determination of rent - Section 7 of the Rent Control Law, 1975 (Law 36 of 1 975) - Discretion of the Court thereunder - Factors to which Court may have regard in the exercise of - Amount of rental payable - State of the premises - Rents payable in the market - Court cannot take judicial notice of - Application for increase of rent dismissed.

Waiver - Landlord accepting without protest payment of rental other than the agreed one - Has waived his right to collect rent at the agreed rate.

A. Kramvis, for the Applicant.

A. Poetis, for the Respondent.

JUDGMENT

The following judgment was delivered by:-

PIKIS. AG.P.D.C.: The applicant is the owner [*343] of a house at 6 Thessaloniki street, Larnaca. This house was first let to the defendant in September 1971, at a monthly rental of £25. In September 1972, the rental was reduced to £22 per month. The respondent has been continuously in occupation of the premises till today.

As from October 1974, the respondent has been paying rent at the monthly rate of £18 per month. According to the tenant the rental had been reduced in after September 1974 to £18 per month/agreement with the applicant whereas in the contention of the applicant the respondent unilaterally reduced the rental to £18 and that he has been accepting under protest this rental since then.

By virtue of this application the Court is asked to increase the monthly rental payable by the respondent to £28 per month. The application is made under the provisions of Law 36/75, section 7, in particular, a provision that confers jurisdiction on the Court to increase the rental payable by a tenant under certain circumstances.

The Scope and Implications under section 7 of Law 36/75

The calamitous events of 1974, resulting in the displacement of nearly half the population of the island, created a pressing need for the accommodation of thousands in the remaining parts of the island under socially acceptable conditions. To cope with the situation sweeping legislation was introduced extending the application of [*344] the Rent Control Laws to all premises completed and rented prior to 31st December 1974, conferring at the same time additional powers on the Courts to regulate, in case of disagreement, the rentals that should be paid in a just manner. Therefore power was conferred on the Court to adjust in a proper case the rental after reflecting on the totality of the circumstances of the case.

The expression "in all the circumstances of the case" appearing in section 7(3) , Law 36/75, is intended to confer jurisdiction on the Court to adjust the rent by reference, inter alia, to the personal circumstances of the parties particularly their financial strength. Support for this interpretation is forthcoming on a consideration of the decisions of the Supreme Court, on the interpretation of a similar expression in the context of the Rent Control Laws. (See the cases of Iacovidou v. Constantinou (1976) 2 J.S.C. 246 - Level Tachexcavs Ltd. v. Kyriakos Kargotis (1970) 1 C.L.R. 163). Whenever the Court is required to interpret legislation designed to serve a social need the object of the enactment and the spirit in which the law was introduced are vital tools as an aid in the interpretation of the law. Any other course would tend to frustrate the objects of the law and leave a pressing social need uncatered for to the detriment of the general public.

In my judgment the principal object

of Law 36/75 is to confer security of tenure on a wide class of tenants under socially acceptable conditions. This is [*345] achieved by conferring wide powers on the Court to

do justice in a particular case and generally to stop land owners from taking undue advantage over the great shortage in accommodation manifested after the tragedy of 1974.

In exercising its discretionary powers to adjust the rent under section 7 of Law 36/75 the Court may justifiably heve regard to the following factors:-

(a) The state of the rent market. Evidence may be adduced with a view to enlightening the Court about the rentals that are being paid in a particular locality or in a wider area such as a quarter of a town;

(b) the age and state of the premises and the nature of the accommodation facilities available;

(c) last but not least the Court must have regard to the personal circumstances of the parties with particular reference to their financial posit ion.

A Court of Law would ordinarily be unjustified to interfere with the rental that is being paid unless it is established that since the last fixing of the rent there has come about a discernible change in any one of the above factors. On the other hand the Court may be justified to interfere if the rental was fixed in the first place at an unduly high or unduly low level. But [*346] even where there is a discernible change in any of the above enumerated factors in one direction the Court may be justified to refuse to interfere if such change is counterbalanced by a discernible change in another direction. For example, the rentals in an area may go up but the financial position of the tenant may deteriorate in the meantime.

The Facts of the Case

(a) The amount of the rental payable. The parties adduced conflicting evidence as to the circumstances under which the respondent came to pay a rental of £18 per month in comparison to £22 per month that he had been paying upto September 1974 According to the applicant the respondent unilaterally decided to pay £18 per month in view of the introduction of legislation providing under certain circumstances for the reduction of the rental by 20 per cent. On the other hand, the respondent maintained that in September 1974 he had found alternative accommodation and planned to vacate the premises and only agreed to remain as a tenant in view of the reduction of £4 offered by the applicant, agreeing thereby that the rental to be paid thereafter should be £18 per month and not more. It is a fact that the respondent continued paying rental at the rate of £18 per month without any written protest on the part of the applicant

up to the date of the institution of the present application on 8th June 1976. The applicant testified that he accepted

the sum of £18 under protest and subject to consulting his lawyer. And in his testimony [*347] a lull of six months followed during which he received no rent because, as one may gather from applicant’s evidence, the respondent was rather embarrassed to come forward and pay rental at the reduced rate. His wife supports his testimony and gave further explanation as to why there was a delay on their part to visit a lawyer. She mentioned that she was sick for a month on two occasions and it did not become feasible to visit a lawyer until 1976. Mr. Aristos Kaissides, the manager of the Popular Bank at Larnaca, produced some cheques issued by the respondent or his wife and cashed by the applicant indicating that

(a) a cheque for £36 was cashed by the applicant on 1st February 1976; and

(b) five other cheques, apparently representing rents for the months of February to June 1975, were cashed by the applicant on 16th June 1975.

In the testimony of the respondent the reason for the non-timely delivery of these cheques was his inability on account of temporary absence from his house, to meet the applicant and hand over the rental. It is the evidence of the respondent that the rental for the months of October and November 1974 was paid in cash to the applicant. In proceedings under Law 36/75 the Court can resolve any differences between the parties as to the rental actually payable by virtue of the agreement of the parties and should do so as a matter of course because[*348] the agreement of the parties is a relevant factor shedding light on what is a fair rental in all the circumstances of the case. In my judgment, in September or early October 1974 the respondent, rather tempted to take advantage of the anomalous situation, began paying rent at a reduced rate, a situation that was accepted by the applicant who, despite an initial protest, came to accept a rental of £18 per month thereby agreeing, in effect, to the modifications of the rental payable and continued accepting rental at that rate without any further protest until the present action was instituted and this is my finding. Therefore the rental payable at the time of the institution of the present application was £18 end not £22 per month.

In all the circumstances of the case

I find that the applicant waived his right to collect rent at the rate of £22 per month by accepting without protest

the payment of rental at £18 and

moreover the applicant agreed in the result to a reduction of the rental to £18 per month. (As to waiver see Woodfall

on Landlord and Tenant, Volume I, 26th edition, paragraph 2053, et seq. and Halsbury's Laws of England, 3rd edition, volume 23, paragraph 527

- see also Halsbury’s Laws of England, same volume at paragraph 1039.) [*349]

The State of the Premises

The house occupied by the respondent and his family made up of himself, his wife and two children aged 5 and 8, is an old house built about the year 1950, made of stone and plinth. Here again I received conflicting evidence as to the state of the premises with the applicant testifying that he never received any complaint from the respondent as to the state of the premises and the respondent saying that the house is hardly fit for human habitation. On the whole, I am of the view that the house is rather in a poor state though the state of the premises does not appear to have troubled the respondent much in the past; he became more vociferous about its condition after the institution of the present application.

The Circumstances of the Parties

The applicant resides with his wife in a house owned by his wife; they have no children. He is an employee of the British military authorities, earning about £20 net a week. He is due to retire in two years’ time and he appears to be anxious to save up for old age.

The respondent is an employee of CYTA, earning £150 gross, netting £120 per month. Out of the

sum of £120 a sum of £40 is deducted from his earnings for the repayment of a loan due to the Co-Operative Society of CYTA. This loan had been contracted to enable the applicant

purchase/furniture and cover other needs of the family. Neither husband nor wife own any immovable property. The wife is

nowadays in business for the first year, in [*350] partnership with others and takes part in the management of a shop

selling electrical appliances. The results of the venture are not yet known.

The Rents Payable in the Market

There is faint evidence coining from the applicant who testified about the state of the rent in the market in the area but this does not carry his case very far He was allowed to divulge to the Court some hearsay information about the rent at which some premises in the area are let but his evidence is inconclusive. I cannot discern from his testimony any pattern tending to indicate that the rental payable by the applicant, £18 per month, is either lower or higher than the rental that should be paid.

I have been asked by counsel for the applicant to take judicial notice of the fact that rentals payable nowadays at Larnaca could not be lower than those payable in September 1971 and therefore arrive at the conclusion that a fair rental in the circumstances would be at least £25 per month. This I could do only if I took judicial notice of the state of the market rent at any particular period. To accede to the application of the applicant and take judicial notice of matters such as the state of the rent market would, in many respects, make the outcome of the case depend more on the impresione of a Judge rather than the evidence adduced. This is a

proposition that I totally reject. The class of things that may be judicially [*351] noticed is well known and well defined and as

authority has it this class should not be extended.

In the result, the application is dismissed with no order as to costs.

Application dismissed.

No order as to costs.