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ΠΑΓΚΥΠΡΙΟΣ ΔΙΚΗΓΟΡΙΚΟΣ ΣΥΛΛΟΓΟΣ
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(V22) 1 CLR 217
1957 October 31
[JOSEPHIDES P.D.C.]
THE MIDDLE EAST ENTERTAINMENT CO. LTD.,
Plaintiffs,
AND
CHRISTOS SAVVIDES,
Defendant.
(Action No. 20/1957).
Rent Restriction-Notice to quit by statutory tenant-Rent (Control) Law, 1954, Section 23 (1).
Section 23 (1) of the Rent (Control) Law, 1954 provided: "A tenant who, under the provisions of this Law, retains possession of any premises shall, so long as he retains possession, observe and be entitled to the benefit of all the terms and conditions of the original contract of tenancy, so far as the same are consistent with the provisions of this Law, and shall be entitled to give up possession of the premises only on giving such notice as would have been required under the original contract of tenancy:"
A tenancy for a term of years of premises, to which the Rent (Control) Law, 1954, applied, expired by effluxion of time, and the tenant (defendant) continued in possession of the premises. There was no provision in the original contract of tenancy for the giving of notice to give up possession, but the tenant gave a notice of two months and a subsequent one of three months before giving up possession of the premises.
It was argued on behalf of the landlord (plaintiff) that the common law implied a tenancy at will which was equivalent to a tenancy from year to year, and that six months' notice was required under the provisions of the common law.
Held: (1) that a tenant who, at the expiration or determination of his tenancy, retained possession of premises to which the Rent (Control) Law, 1954, applied, did so as a statutory tenant under the provisions of section 23 (1) of that Law, and the common law principles did not apply;
(2) that, as there was no provision under the original contract of tenancy for the giving of notice, the tenant (defendant) was entitled, under the provisions of section 23 (1) of the Law, to give up possession of the premises without giving any notice.
Cases referred to:
(1) Morrison v. Jacobs (1945) K.B. 577.
(2) Murray, Bull and Co. v. Murray (1952) 2 All E.R. 1081.
(3) Oxley v. Regional Properties Ltd. (1944) 2 All E.R. 510.
(4) Marcroft Wagons v. Smith (1951) 2 All E.R. 276.
(5) Remon v. City of London Real Property Co. (1921) 1 K.B.54.
ACTION for the recovery of arrears of rent or damages instituted in the District Court of Nicosia (Action No.20/57)
Chr. Mitsides for the plaintiffs.
John Clerides, Q.C. and S. Hajiminas for the defendant.
The facts are fully set out in the judgment of the Court which was delivered by:
JOSEPHIDES P.D.C.: Originally the plaintiff's claim was for arrears of rent in respect of the business premises known as the "American Bar", in Nicosia, and for arrears of rent and possession of a flat situated on top of the aforesaid premises, but the claim in respect of the flat was settled and withdrawn, so that the plaintiff's claim (as reduced in the course of the hearing) which now falls for determination is for-(a) £240 rent due for the aforesaid premises for the period 1st January, 1956, to 31st August, 1956, or the same amount as damages; and (b) £5 as damages, being the difference in rent for the said premises for the month of September 1956.
The defendant denied liability.
No evidence was called by either side and an agreed bundle of documents was put in evidence consisting of the original agreement of lease and the correspondence exchanged between the parties.
By an agreement made on the 19th September, 1950 (exhibit 1) N. M. Kyprianou Ltd., the landlord, agreed to let the business situated at Evagoras Avenue, Nicosia, and known as the "American Bar'', to the defendant (tenant) "for the term of four years from the 1st October, 1950, at a net annual Rent of £360 for the first three years ending on the 30th September, 1953, and at a net annual rent of £480 for the remaining period of the tenancy ending on the 30th September, 1954."
The other material provisions of the aforesaid agreement were clauses 2 and 3 which read as follows:
"2. The tenant shall have the right at the end of the first three years ending on the30th September, 1953, to terminate the tenancy on giving not less than two months' notice in writing to the company (the landlord) by registered letter, unless he shall conclude a new agreement with the company (the landlord)."
"3. The agreed tent shall be paid in equal quarterly instalments payable in advance every quarter the first instalment to be paid on the 1st October, 1950 and so on on the first day of each succeeding quarter until the end of the tenancy."
In March, 1952, the plaintiff company succeeded to the rights of N. M. Kyprianou Ltd. which company was liquidated, and, inter alia the said agreement of lease was assigned to the plaintiff company. It was admitted that, since that date, the defendant acknowledged the plaintiffs as his landlords and paid to them the agreed rent.
On the 21st June, 1953, the defendant addressed a letter to the plaintiffs stating that he wished to renew the lease for the aforesaid shop for a further period of three years commencing on the 1st October, 1953, at the same rent, that is, at £360 yearly payable in four equal instalments of £90. This proposal was not accepted by the plaintiffs but the matter was reconsidered by them and a letter sent to the defendant on the 22nd September, 1953, whereby it was stated: "You can, therefore, continue to be tenant of the shop for another year as provided in the agreement of lease at the rent of £360 per annum the Company agreeing to forego the difference provided in the said agreement, the other terms and covenants of lease remaining the same."
The defendant remained in occupation of the premises on the agreed terms and the tenancy expired on the 30th September, 1954; but the defendant remained in occupation of the premises until the 2nd January, 1956, when he delivered possession to the plaintiffs.
On the 31st July, 1955, the defendant wrote to the plaintiffs as, follows:-
"We were given to understand that the premises are going to be demolished early in 1956 and consequently have looked for another site for our shop.
Therefore we hereby notify you that we wish to terminate our Agreement of Lease for the shop 'Ledra Provision Stores' on the 30th September, 1955."
The plaintiffs replied to that letter on the 10th August, 1955, stating that:
"We do not agree with you that your lease regarding the shop 'Ledra Provision Stores' is terminated on the 30th September, 1955. We therefore hold you responsible for any rent which will fall due after that date."
There is no evidence whether the defendant replied to that letter but on the 29th September, 1955, he sent another letter to the plaintiffs in the following terms:
"I hereby give you notice that it is my intention to quit and deliver up possession of the premises, known as 'American Bar' and used by me as grocery, 'Ledra Provision stores', now held by me as a statutory tenant, on the 31st December, 1955."
Apparently the plaintiffs did not reply to this letter and eventually the defendant delivered possession of the premises to the plaintiffs on the 2nd January, 1956.
Eight days later, that is, on the 10th January, 1956, the plaintiffs wrote the following letter to the defendant raising for the first time the question that the lease was a yearly lease, as they described it:-
"We are sorry we cannot accept the arbitrary termination of this lease and purporting vacation of the premises at your own choice.
The contract together with our letter of the 22nd September, 1953, provide termination of the lease on the 30th September, 1955. After that date you chose to remain as a statutory tenant and of course you will have to abide as the Law provides, to all the terms and conditions of the original contract of lease dated 19.9.50. In order to make matters very simple to you we refer you again to the terms of that contract which expressly says that the lease is a 'yearly lease'. You cannot, therefore, in the absence of any other express provision, abandon the premises in the middle of the year because you so desire, once you have continued to remain as tenant after the 1st October, 1955, and therefore, in our opinion, you are responsible for the payment of the rent agreed up to the 30th September, 1956. We, therefore, call you now to fulfil your obligations and remit us £90, the sum payable in advance for the running three months. Failing that we shall consider you as defaulter and we reserve our rights to take any steps necessary for the protection of our lawful interests."
Defendant did not reply to this letter and the plaintiffs sent another letter to him on the 30th January, 1956, informing him that as the matter had been outstanding for a long time they proposed advertising for the lease of the shop, and if there was any difference in the rent they intended claiming it from the defendant. In case they did not manage to effect any lease they informed him that he would be responsible to them for the whole rent.
The defendant apparently did not reply to this letter, and it is common ground that the shop remained vacant until the 1st September, 1956, when it was leased to a new tenant at a monthly rent of £25, viz. £5 per month less than the rent paid by the defendant.
On the 14th December, 1956, the plaintiffs wrote to the defendant claiming:-
(a) the sum of £270 as rent due from the 1st January, 1956, to the 31st August, 1956, "for the period covered by your lease or statutory tenancy and during which the said shop remained unoccupied". (The correct figure is £240, that is 8 months at £30 per month. The figure "£270" was amended in the course of the hearing);
(b) £5 difference in rent for the month of September, 1956, when the shop was leased to a new tenant.
The defendant did not reply to that letter and eventually this action was instituted on the 3rd January, 1957.
In the statement of defence the defendant alleged that the shop was exempted from the provisions of the Rent (Control) Law, 1954 ; that after the 30th September, 1954, he held the shop in question upon a yearly tenancy which expired on the 30th September, 1955 ; that the plaintiffs tacitly accepted to allow the defendant to hold over the said shop until the 31st December, 1955, and that, in the alternative, if it were established that the defendant had been holding the said shop as a statutory tenant, his notice dated 29th September, 1955, was a legal notice to quit the premises by a statutory tenant in accordance with the provisions of the Rent (Control) Law, 1954. But at the hearing of the action it was common ground that after the termination of the contractual tenancy on the 30th September, 1954, the defendant remained in possession of the premises as a statutory tenant under the provisions of section 23 (1) of the Rent (Control) Law, 1954.
In Morrison v. Jacobs (1945) K.B. 577, it was held that where a tenancy for a term of years of premises, to which the Rent Restriction Acts applied, had expired by effluxion of time, and the tenant continued in possession of the premises, the mere fact that the landlord accepted rent from the tenant at any time after the expiration of the contractual tenancy afforded no evidence that the landlord had consented to a new contractual tenancy. The legal position is a matter of inference from the surrounding facts. The Court has to make up its mind what is the correct inference in the circumstances. When the relationship of the parties is merely that of a landlord and tenant, the inference is easy to draw (and in most cases it would be inevitable) that on a holding over after the expiration of a lease by effluxion of time a statutory tenancy is created (Per McNair, J. in Murray, Bull & Co. v. Murray (1952) 2 All E.R., 1079 at page 1081).
On the evidence before me I have no hesitation whatsoever in drawing the inference that the defendant held over as a statutory tenant as from the 1st October, 1954, and, consequently, the provisions of section 23 (1) of the Rent (Control) Law, 1954, are applicable to this case. That section reads as follows:-
"23.-(1) A tenant who, under the provisions of this Law, retains possession of any premises shall, so long as he retains possession, observe and be entitled to the benefit of all the terms and conditions of the original contract of tenancy, so far as the same are consistent with the provisions of this Law, and shall be entitled to give up possession of the premises only on giving such notice as would have been required under the original contract of tenancy: ................."
Our section 23 (1) is based on section 15 (1) of the English Increase of Rent and Mortgage Interest (Restrictions) Act, 1920, which reads as follows:
"15.-(1) A tenant who by virtue of the provisions of this Act retains possession of any dwelling-house to which this Act applies shall, so long as he retains possession, observe and be entitled to the benefit or all the terms and conditions of the original contract of tenancy, so far as the same are consistent with the provisions of this Act, and shall be entitled to give up possession of the dwelling-house only on giving such notice as would have been required under the original contract of tenancy or, if no notice would have been so required, on giving not less than three months' notice: ....................."
It will be noted that our section reproduces verbatim the material provisions of the English section except the last seventeen words, that is to say, "or, if no notice would have been so required, on giving not less than three months' notice."
"In Oxley v. Regional Properties Ltd. (1944) All E.R., 510 it was held that the words in section 15 (1) of the English Act of 1920 "the original contract of tenancy" refer to the tenancy under which a tenant was holding before he became a statutory tenant.
Now, looking at the facts of this case, the defendant and the predecessor in title of the plaintiffs signed the original agreement of lease dated 19th September, 1950, and, subsequently, the plaintiffs agreed that the defendant should continue to be tenant of the shop for another year as provided in the agreement of lease at the rent of £360 per annum, the Plaintiffs agreeing "to forego the difference provided in the said agreement, the other terms and covenants of lease remaining the same." As, under the provisions of section 23 (1) of our Law, a tenant "shall be entitled to give up possession of the premises only on giving such notice as would have been required under the original contract of tenancy", we have to look at exhibit 1 to see what was the provision with regard to notice, if any, for giving up possession of the premises. Looking at exhibit 1 there is no provision at all with regard to the giving of notice to quit. The agreement of lease, exhibit 1, is an agreement for a fixed period of three or four years, depending on the option of the tenant. Consequently, there was no need for any provision to be made in that contract for the giving of notice. If the Rent (Control) Law, 1954, was not in force at the time of the termination of the tenancy by effluxion of time the tenant would have been bound to deliver up possession of the premises, namely, on the 30th September, 1954; or on the 30th September, 1953, on giving two months' notice under the provisions of clause 2 of the agreement. On the other hand, if section 15 (1) of the English Act of 1920 was applicable to Cyprus then the defendant, after he became a statutory tenant, viz. after the 30th September, 1954, would be bound to give three months' notice under the express statutory provision in section 15 (1); but in our case the legislative authority has thought fit, for some unknown reason, to omit this provision from our statute.
The plaintiff's counsel argued that the tenancy under which the tenant (defendant) held the premises was a statutory tenancy and that its terms were guided by the terms of the original contract and the common law conditions of a tenancy at will; that a statutory tenancy cannot be considered other than a tenancy at will because it is a tenancy created not by agreement between the parties but by the operation of a statute; that if the Court found that the original contract had no provision for its termination then the Common law implied a tenancy at will which was equivalent in substance to a tenancy from year to year and that, therefore, six months' notice to quit expiring at the end of the year of tenancy was required under the provisions of the common law.
With all respect to counsel's argument I think that he has confused the legal position in this case. According to the common law as it stood before the Rent Acts in England, when a tenant held over after the expiration of the term with the consent of the landlords he would have become a tenant at will. In the case, however, of a letting for a year, the implication from holding over by consent has been said to be a "tacit renovation of the contract", which has been interpreted to imply a tenancy from year to year (See FOA on Landlord and Tenant, 7th Edition, p, 388; and Marcroft Wagons v. Smith (1951) 2 All E.R. 271 at p. 276, per Denning L.J.). But with the enactment of the Rent Restriction legislation the position has changed. In Cyprus a tenant who, at the expiration or determination of his tenancy, retains possession of the premises does so as a statutory tenant under the provisions of Section 23 (1) of the Rent (Control) Law, 1954, and the common law principles are no longer applicable.
With regard to the contention that a statutory tenancy is a tenancy at will, it has long been held that a statutory tenant is not a tenant in the ordinary sense of the word. He is not even a tenant at sufferance (Remon v. City of London Real Property Co. (1921) 1 K.B. 49 at p. 54). The tenancy has been called nothing more than a "statutory right of irremovability": per Evershed M.R., in Marcroft Wagons v. Smith (supra).
In the present case as already stated, there was no provision with regard to notice to quit, as the contract of tenancy was for a fixed period of time, and I cannot accept the proposition that the common law principles with regard to giving of notice are to be implied in the original contract of tenancy in the absence of any provision in that contract. According to Morrison v. Jacobs (supra), which is applicable in construing our Rent (Control) Law, where a tenancy for a term of years has expired by effluxion of time, as in the present case, and the tenant continues in possession of the premises, where the landlord desires to claim possession thereof on the ground that he reasonably requires the premises for his own occupation (under section 18 (1) (g) of our Rent (Control) Law), he need not before suing serve any notice to quit on the tenant.
In short, the position is this: under section 23 (1) of the Rent (Control) Law, the tenant was bound to give up possession of the premises on giving such notice as would have been required under the original contract of tenancy; as the original contract of tenancy was for a term of years which has expired by effluxion of time, and as there was no provision in the original contract of tenancy for the giving of notice to quit, and as the legislative authority in Cyprus has thought fit not to provide for cases where no notice would have been required under the original contract of tenancy (as is the case in England where it is provided that in such a case not less than 3 months' notice must be given under section 15 (1) of the 1920 Act), the tenant was not bound to give any notice to quit. Nevertheless, two notices to quit were given by the defendant in this case: one dated the 31st July, 1955, expiring on the 30th September, 1955 (two months); and a second one dated the 29th September, 1955, expiring on the 31st December, 1955 (three months). Considering, however, the view I take in this case, the fact that these notices were given is immaterial.
For the reasons I have endeavoured to state in this judgment I hold that on the true construction of Section 23 (1) of the Rent (Control) Law, 1954, and the original contract of tenancy, no notice to quit was required to be given by the defendant. It, therefore, follows that he is not liable to pay any rent after the 31st December, 1955, or any other damages, and the plaintiffs' claim accordingly fails.
Action dismissed with costs.