Wakilii

Kundi v Swedish Products Co. (Civil Appeal No. 1202 of 1951)

East African Court of Appeal · [1952] EACA 295 · 1952 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from the decision of the Central Rent Control Board, Nairobi
Decision
Standard rent assessment revised upward to reflect correct market cost of construction

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Court held that the Rent Control Board erred in assessing the market cost of construction at Sh. 30 per square foot when evidence supported at least Sh. 40 per square foot. A Board may use general knowledge from its activities but should not rely on one particular instance. The Board has power to assess standard rent at less than 10 per cent of combined market cost and land value if reasons are given. The reduction to 8.5 per cent was justified given the unnecessarily strong construction for future expansion and modest internal finish. Appeal allowed with revised standard rent assessment.

Outcome

Standard rent assessment revised upward to reflect correct market cost of construction

Facts

The appellant landlord owned land on which he built a two-storey building in 1948, with the ground floor used as his workshop and the upper floor divided into offices let to a company. The building was constructed with foundations and structure designed to support up to four storeys, though only two were built. Tenants occupied the upper floor in February 1949. The landlord applied to the Rent Control Board for assessment of standard rent. The Board assessed the market cost of construction at Sh. 30 per square foot based partly on another recent case before them, and assessed standard rent at 8.5 per cent of the combined market cost and land value. The landlord appealed, contending the market cost of construction was substantially higher.

Issues

  1. Whether the upper floor of the building was commenced after 1st January 1949 and thus not controlled by the Ordinance.
  2. What was the correct market cost of construction for the building in 1948.
  3. Whether the Board properly assessed the standard rent at less than 10 per cent of the combined market cost of construction and value of land.
  4. Whether the Board acted irregularly by inspecting the premises.

Orders

  • Appeal allowed.
  • Market cost of construction assessed at £10,800 not £9,100.
  • Combined market cost of construction and value of land assessed at £11,800 not £10,100.
  • Standard rent of ground floor assessed at Sh. 930 per month.
  • Standard rent of upper floor assessed at Sh. 740 per month.

Rules and key headnotes

Administrative Law — Rent Control Boards — Use of General Knowledge — Reliance on Particular Instances
A Rent Control Board may use its general knowledge derived from its day to day activities in assessing market cost of construction, but there is danger in relying on one particular instance as the criterion is the market cost, not the minimum cost of construction.
Land & Property — Rent Control — Assessment of Standard Rent — Market Cost of Construction
In assessing standard rent under rent control legislation, the relevant criterion is the market cost of construction, not the minimum cost at which an individual might build by making savings such as acting as his own contractor, architect or clerk of works.
Administrative Law — Rent Control Boards — Assessment Below Statutory Percentage — Requirement to Give Reasons
A Rent Control Board has power to assess standard rent at less than 10 per cent of the combined market cost of construction and value of land, provided reasons are given for the reduction.
Land & Property — Rent Control — Reduction of Standard Rent — Justifiable Reasons
A reduction in standard rent below the statutory percentage may be justified where the construction was unnecessarily strong to permit future expansion and the internal structure and finish was not particularly high in relation to the cost of construction.

Legislation cited (1)

  • Increase of Rent (Restriction) Ordinance

Full judgment

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Kundi v Swedish Products Co. (Civil Appeal No. 1202 of 1951) [1952] EACA 295 (1 January 1952)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.