Recent Judgments RENT OF APARTMENT HOUSE

Press, Volume XCIX, Issue 29250, 7 July 1960, Page 18

Recent Judgments RENT OF APARTMENT HOUSE

Elliott v« Rangi Before Mr Justice McGregor, at Wellington. The fair rent of certain premises was fixed when they were occupied by a family as their home. Later, the premises were let to another tenant at a higher rent for the purposes of an apartment house. The tenant claimed that the fair rent, as fixed, was the only rent legally enforceable. The Court held that, as, he was not occupying a “dwellinghouse,” the fair-rent order had ceased to apply.

The plaintiff landlord claimed possession of certain premises let by him to the defendant, together with the furniture and chattels in it, and he asked for judgment for arrears of rent and mesne profits. The premises consisted of five bedrooms, living room, kitchenette. bathroom and conveniences, situated on the ground and first floors of the premises behind two shops occupied by the plaintiff. The tenancy began shortly after the end of July, 1959. The landlord gave evidence that the tenant had said that he wanted the premises for an apartment house. A rent of £l6 per week was agreed to. The landlord also said that the tenant and his write and two children lived in the premises, which were also occupied by many other persons as subtenants or boarders. Over the previous six months, the premises had always been full or more than full, and sometimes two or three taxi-loads of persons arrived to stay there. The tenant did not give evidence. He had paid no rent since he went into possession of the premises. Fair Rent Order The tenant’s defence was that the - tenancy was subject to the Tenancy Act, 1955. He said that a fair rent order "made under that Act, during an earlier tenancy, was in force, and that it fixed the rent of the premises at £4 5s per week. He submitted that tho order continued to apply to the premises, and no higher rent could be claimed. He was willing to pay that rent but no more. Mr Justice McGregor said that in view of the defendant’s suggestion that he was ready and willing to pay the lesser rent, ■which he claimed was the only rent which could be legally enforced it was necessary to consider whether the fair rent order still applied to the premises. The order was made by the rents officer of the Department of Labour on March 12, 1956, under 5.24 of the Tenancy Act 1955, and it had the effect of an order of the Court. Section 24 was, however, applicable only in respect of premises within the definition of “dwellinghouse” in the Act.

As the plaintiff’s evidence was uncontradicted, his Honour said that the premises were let to the defendant for the purpose of carrying on the busness of a boarding house or an apartment house, though it seemed clear that it was recognised that the tenant, his wife and two children were themselves to live in the premises. It seemed inconceivable that a tenant in the circumstances of the defendant would agree to pay £l6 a week as rent for premises of this nature unless he intended to use them, or at least a considerable part of them, for business premises.

Apartment House Mr Justice McGregor still had to consider whether this occupation for business purposes took the premises out of the definition of ‘‘dwellinghouse” in the Tenancy Act 5 The term “dwellinghouse,” his Honour said, was defined in s2 of the Tenancy Act 1955 as meaning ‘‘any building or part of a building let as a separate dwelling, and includes any furniture or other chattels that may be let therewith, and also includes any land outbuildings or parts of buildings included in the tenancy.” Subsection (3) of the same section provided that the application of this Act to any dwellinghouse should not be excluded by reason only of the fact that part of the premises was used as a shop or office or for business, trade or professional purposes. It seemed to his Honour primarily to be a question of fact whether premises used partly for the residence of a tenant and his family and partly for business Surposes were within the definion of a “dwellinghouse.” The learned judge held that the important words of the definition

of ‘'dwellinghouse” were the words “let as a separate dwelling." The whole purpose of the agreement between the parties was that the tenant should take the premises for the business of a boarding house or apartment house, and that the part occupation of himself and his family was incidental only to the business use of the premises. Mr Justice McGregor therefore held, on the’ uncontradicted evidence of the plaintiff, that the purpose of the letting was to use the premises as an apartment house, a purpose that was common to both the landlord and the tenant; and that, accordingly, the premises the subject of the tenancy were not a "dwellinghouse” within the meaning of the Act Section 22 of the. Tenancy Act 1955 provides: "Every order made under this'part of this Act fixing the fair rent of any dwellinghouse or property shall continue in force till a subsequent order fixing the fair rent of the premises takes effect.” . The order made in' 1956 was however, made in respect of the premises then occupied as a dwellinghouse. But, his Honour pointed out, the method of fixing the fair rent of a “property” (which is a property other than a dwellinghouse) was substantially different under the Act. Rent Payable In these circumstances, the learned judge held that the fair rent order made in 1956, when the premises were let to a tenant who had taken a tenancy as a dwellinghouse and- was using the premises purely as a dwellinghouse, was no longer effective. The defendant had not paid the rent agreed upon: and his belated suggestion that he was willing to pay the accrued rent at the lesser amount of the original fair rent order was not available to him in the circumstances. Mr Justice McGregor therefore made an order for possession of the premises and the furniture and chattels the property of the landlord to be given at the expiration of one week from the date of the order. Judgment was given for the plaintiff for rent and mesne profits at the rate of £l6 per week from the commencement of the tenancy to the date of the judgement, with costs according to scale, and witnesses’ expenses and disbursements. Counsel: Joseph, for the plaintiff: O’Flynn for the defendant. Solicitors: For the plaintiff, Sladden, Stuart and Joseph (Wellington); for the defendant, F. D. O’Flynn (Wellington).