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. The appellant appealed against the finding that the respondent and not itself is the lawful tenant of the suit premises. 

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. 

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

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  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. 

Order accordingly. 

1984 TLR p256 

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