RAILWAY HOUSES

Ashburton Guardian, Volume 54, Issue 160, 19 April 1934, Page 2

RAILWAY HOUSES

LOWER RENTALS CLAIMED.

AN IMPORTANT CASE. (Special to the "Guardian.") WELLINGTON, April 17. Whether Part 3 of the National Expenditure Adjustment Act, 1931, reduc- ; ing rents, applies to houses owned by the Railway Bepartment and occupied J by its servants was argued before the 'Full Court yesterday. The decision.of the Court will - affect up to 3505 houses, representing a capital expenditure v of £2,000,000, since Written down \\ to £1,600,000. The case came before the Court as an originating summons. Becision was reserved. His Honor the Chief Justice (Sir Michael Myers) and their Honors Mr Justice Herdman, Mr Justice Blair, and Mr Justice Kennedy were on the Bench. Mr H. F. O'Leary appeared for the Amalgamated Society of Railway Servants, plaintiffs, and -Mr P. B. Cooke for the Attorney-General , and the Railways Board, defendants, '.--A Mr O'Leary said that originally ' when the summons l was, issued the question of the applicability of . the Act vo the houses; was not raised by the Bepartment. It was assumed ihe Act did apply and questions as to the working out of relief from rent arose, the summons being issued on questionsi relative to the relief. The Crown brought, up the question of the applicability of the Act later. It was that question which the Court was asked to •consider first. The, contention of the Railway Bepartment was that nqtwithstanding the particular' circumstances in which the men occupied the premises, the Act did not apply to them. The Chief Justice: Can you tell us at this point the reason why the Act may not apply? Mr O'Leary: The Bepartment's contention is that the relationship between itself and the men. is not one„ of landlord and tenant ; and that they do not pay rent, but occupy as ser- . vants, and a tenancy is not created. ,

Case for the Men. "I meet the contention of the Bepartment by two contentions," continued Mr O'Leary: "First, in the particular circumstances of the occu-j pancies of these dwellings by railway men, the relationship of landlord and tenant does exist. Secondly, even if such relationship does not exist, the Act still applies because there is existing between the men and the Bepart- , yment a contract whereby the; men undertake to pay rent, and that is all the Act requires." Mr O'Leary quoted regulations applying to the houses, which used the words "rental" and "sub-le.tting." Answei-ing the Chief Justice, he said the men could leave the houses only by leaving the Department, but the Bepartment could terminate the occupancy as it desired. A Even if the relationship of landlord and tenant did not exist, the Act still applied because there was a contract whereby the men paid a rent. A K wider meaning must be given to the word "rent" than the payment beJ tween tenant and landlord. "Rent"

meant payment made for occupying a building. The statute said "landlord or other person entitled to receive rent." The men felt aggrieved: that wages had been reduced by one part of the Act, but the rents had not been reduce.l under the other part. He submitted, with regard to the Bepart- /

ment's contention that the men pied the houses as servants, that they were not like a gardener who lived in part of his master's premises. In some

cases water and sanitary rates were paid by the employees. ■. •>

Department's Case.

Mr Cooke submitted that the Act did not apply to contracts under which the land-owner or a .third person had a discretion to. assess the rent and alter it from time to time. The long title of the Act stated that its purpose was to make reductions in fixed charges, and similar language was used" in two sections of the Act, which showed that it was intended to apply only to fixed rents. "Fixed" meant fixed for a definite period in such a way as to be unalterable unless both parties agreed to the alteration. If the rents were alterable without the consent of both parties they were not fixed within the meaning of the Statute. He contended the payments in these cases were not fixed, even for a week, in law./ The contract authorised the Department to alter the assessed rent at any time it liked. The provision in the Act that the rent should riot be increased after being reduced ,v showed that it was not intended to apply to. rents fixed by a third party.

Dealing with Mr O'Leary's statement that the Department had reduced wages in accordance with one part of the Act, but had not reduced rentals in "accordance with another part, Mr Cooke said that the Department had refrained from reducing rentals because it thought .the relationship between the two did not justify a reduction. » Replying to further points raised by Mr Cooke, Mr O'Leary asserted that the rents were not rfixed by a third party but by the "landlord"—the Department.