Wakilii

Tanganyika Shell Limited vKhan (Civil Appeal No. 40 of 1968)

East African Court of Appeal · [1968] EACA 9 · 1968 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from the High Court of Tanzania on an appeal from the Rent Tribunal of Mbeya concerning determination of standard rent
Decision
Rent Tribunal's determination of standard rent restored with minor modifications for ground rent, rates, and commencement date

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Court of Appeal allowed the appeal and restored the Rent Tribunal's determination of standard rent. The High Court erred in substituting its own assessment for that of the Tribunal. A current valuation made six or seven years after construction could not be relied upon to determine the market cost of construction at the date of completion. The Tribunal was not required to give reasons for its determination. The statutory maximum of 14% should not be treated as the normal rent; tribunals must first assess the proper economic rent and then ensure it does not exceed the statutory maximum.

Outcome

Rent Tribunal's determination of standard rent restored with minor modifications for ground rent, rates, and commencement date

Facts

The respondent landlord owned a dwelling house in Mbeya built in 1960. He applied to the Rent Tribunal to fix the standard rent, declaring the market cost of erection to be approximately £1,500. The house was first let at shs.850/- per month and at the date of application was let at shs.600/- per month. The respondent provided no evidence of actual construction costs but relied on valuations made in 1966 and 1967. The Tribunal inspected the house, estimated its value at £6,000, and assessed the standard rent at shs.850/- per month without giving reasons. On appeal, the High Court judge found it difficult to follow the Tribunal's reasoning and made his own assessment, fixing the standard rent at 14% of the Tribunal's valuation of £6,000. The appellant tenant company appealed to the Court of Appeal.

Issues

  1. Whether the High Court was entitled to substitute its own assessment of standard rent for that of the Rent Tribunal.
  2. Whether a valuation made in 1966 or 1967 could be relied upon as an indication of the market cost of construction in 1960.
  3. Whether the Tribunal was required to give reasons for its determination of standard rent.
  4. Whether the maximum rent of 14% of market cost of construction should be treated as the normal rent.

Orders

  • Appeal allowed with costs.
  • Judgment and decree of the High Court set aside.
  • Determination of the Rent Tribunal restored with modification.
  • Amount of shs.61/65 per month representing ground rent and rates added to the Tribunal's figure of shs.850/-.
  • Standard rent to apply from 1st June 1966.
  • No order as to costs in the High Court.

Rules and key headnotes

Administrative Law — Rent Tribunals — Duty to Give Reasons — No Legal Obligation
A rent tribunal established under the Rent Restriction Act is not under a legal obligation to record its reasons for any of its decisions, although it may be desirable to do so.
Administrative Law — Rent Tribunals — Appellate Interference — Limits on Substitution of Judgment
Where a rent tribunal has exercised its discretion to assess standard rent and there is nothing on the record to show that the tribunal misdirected itself or that its determination was contrary to law or unjust, an appellate court is not entitled to interfere and substitute its own opinion of what the proper rent should be.
Statutory Interpretation — Rent Restriction — Market Cost of Construction — Temporal Requirement
Under section 4(1)(c) of the Rent Restriction Act, the market cost of construction must be assessed at the date of completing the erection. A current valuation made six or seven years after construction cannot be relied upon in the absence of other evidence as an indication of the market cost of construction at the relevant date, particularly where the intervening years were years of great political, social and economic change.
Statutory Interpretation — Rent Restriction — Market Cost versus Actual Cost
The term 'market cost of construction' in section 4(1)(c) of the Rent Restriction Act means what the building ought to have cost at the relevant date, not the actual cost of construction. This provision was introduced to prevent a landlord claiming rent on the basis of actual cost where the cost was inflated, possibly for some collateral advantage.
Statutory Interpretation — Rent Restriction — Statutory Maximum — Proper Approach to Assessment
The correct approach for a rent tribunal assessing standard rent under section 4(1)(c) of the Rent Restriction Act is first to decide what it thinks should be the proper economic rent and then to satisfy itself that the rent does not exceed the statutory maximum of 14% of the market cost of construction. It is wrong to start with the maximum and then consider whether there is any reason to fix a lower figure.
Administrative Law — Appeals — Rent Restriction Act — Limited Right of Appeal
Under section 11(1) of the Rent Restriction Act, an appeal from a rent tribunal to the High Court lies only upon any point of law or of mixed fact and law. The decision or determination of the tribunal on questions of fact is final and conclusive.

Legislation cited (3)

  • Rent Restriction Act (Cap.479) s.4(1)(c)
  • Rent Restriction Act (Cap.479) s.4(2A)(b)
  • Rent Restriction Act (Cap.479) s.11(1)

Cases cited (1)

  • Siraj Din v Ji Mohamed Khan [1957] EA 25

Full judgment

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Tanganyika Shell Limited vKhan (Civil Appeal No. 40 of 1968) [1968] EACA 9 (1 February 1968)
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.