(1987)1987 June 29 (MALACHTOS, PIKIS,KOURRIS, JJ ) LAMARCO LTD., Appellant-Respondent, ν HERACLIS G. KRANOS, Respondent-Applicant. (CivilAppeal No. 7232). Rent Control — Recovery of possession — The Rent Control Law 23/83 — Section 1l(l)(h)(iii) — "Substantial» and 'Radical' alterations entailing consequentially 'radical*and *total* alteration and transforniahonof the building — Implicationof term'development* (αξιοποίησις) leftopen — Building consisting of a large shop with a house on top of it — Plansfor 5 sub-division of shop into fourshops with mezzanines and construction of railed staircases facilitatingaccess to mezzanines — Reinforcement of building by erection of new columns — Such changes do not qualify as 'radical* — Furthermore, they do not entail 'total* alteration and transformationof the building. 10 On the application of the owner (respondent) the Rent Control Court of Limassol madeanorderfortherecovery of possession of theshop,whichthe appellant occupied as a statutory tenant. The order was made undersection ll(lKh)(lii)* of Law 23/83. The premises of the respondent consist of alarge shop with four windows 15 used by thetenantsfor thedisplay andsaleof theirfurniture. Onthefirst floor there Isa house. The plans of the respondent envisaged sub-division of the shop intofour smaller ones,coupled with thecreationofamezzanineineach shop enhancing theshop space by about 40% andtheconstruction of railed staircases tofacilitate access tothemezzanines.Tomakethechangespossible, 2 0 the building must be reinforced by the erection of new columns. The respondent anticipated thatupon completion of thealterations the premises willyieldan income of £700 instead of thepresent incomeof £330.The trial Courtfound thattheaforesaid plans entail substantial and radical changes and, consequently, issued the aforementioned order. Hence the present appeal by thetenant. •Quotedatpp. 342-343post. 336 25 1 C.L.R· Lamarco Ltd.v. Kranoa 5 Held, allowing theappeal (A)Per Pikis, J.Malachtos, J.concurring-
(1)There are important differences between the 1983legislation and the corresponding provisions oftheLawitreplaced (36/75) designed tostiffen the prerequisites forrecovery of possession for purposes of changes and alterations «, 10 {2)Thefirsthurdle that the owner must overcome is that hemust establish that thechanges are consequential to thecharacter of the building and sufficiently fundamental toqualify as radical. Theantonym of•substantial·in the context ofsection ll(l)(h){iii) is«superficial». Inthis case theproposed changesare«substantial»butnot«radical»,becausetheydo notgototheroot of the structureand will leave thecharacter ofthe building much the same, that isatwo-storey building with shops onthegroundfloor and ahouse on top. More consequentially the changes donot entail the radical andtotal alteration and transformation ofthebuilding. 15 20 2θ
(3)Inthelight of the above itisnotnecessary inthis case toexamine the implication of the term «development» (αξιοποίηοις) in the context of section ll(l){h)(iii). (B)Per Koums, J..
(1)Tojustify anorder under s. ll(l)(h)(iii) the owneris burdened toprove not only that the premises are reasonably required for substantial and radical alterations,but also thatthe changes entail the radical and thetotal alteration ofthe building andaimatthe development of the property.
(2)Itisimpossible togive an accurateandcomprehensive definitionofthe alterations required tojustify an order under s. ll(l)(h)(iii). The questionis one ofdegreedependingonthe facisofa particular case
(3)In this case theproposed alterations didnotjustify the making of the order. Appeal allowed withcosts. Casesreferredto: 30 A C.T. Textilesv. Zodhiatis
(1986)1C.L.R. 89; Shammon v.McMahon
(1945)l.R. 327; Papageorghiouv.HjiPieras
(1981)1C.L.R.560. Appeal. AppealbyrespondentagainstthejudgmentoftheRentControl 35 CourtofUmassol dated the30th April, 1986(Appl. No. E. 217/ 85)wherebyanorderfortherecovery ofpossessionofashopwas madeagainstthe respondent. ft StavrakiswithM. Christodoulou, forthe appellant. 337 Lamarco Ltd. v. Krano·
(1987)ft. Michaelides, for therespondent. Cur. adv. vult. MALACHTOS J.: The first judgment of the Court will be delivered by Pikis,J., with which I am infull agreement. PIKISJ.: The respondent in thisappeal is the owner of a large 5 groundfloorshopinwhathasbeendescribed asthetouristareaof Limassol and the appellant its occupant, holding as statutory tenant. Ontheapplicationof theowner theRentControl Court of Limassol madeanorderfortherecovery of possession oftheshop pursuant to the provisions of s. ll(l)(h)(iii) of the Rent Control 10 Law, 1983 (23/83). Two other grounds upon which the application for recovery of possession was also pegged were dismissed; the first because itwas abandonedand thesecond for lack of satisfactory proof. The abandoned ground was tied to a relief for recovery of possession for purposes of demolition and 15 reconstruction (s. ll(l)(h)(ii)), whereas by the ground that was dismissed, recovery was sought for destructive acts or acts of wanton negligence causing deterioration of the premises (s. ll(l)(c)). The trialCourtfound thattheevidence before itestablished that 20 the premises were reasonably required for substantia]and radical changes (τροποποιήσεις) andonthataccountordered recovery of possession. The appellant mountedinessence a two-pronged challenge to thejudgmentof thetrialCourt.Thefirstaffected thefindings ofthe 25 Court allegedly inadequate to support an order under s. ll(l)(h)(iii). The second was a wider one relating to the facts pertinent to the contemplated changes. These facts, it was submitted, could not under any circumstancesjustify the making ofan orderundertheaforementionedprovision of thelaw andfor 30 that reason we -were invited to allow the appeal and not merely order aretrialthatmightbe theoutcomeiftheappealwas allowed on that*rr\rt> alone. the leasea premises consist of a large shop with four windows used by the tenantsfor the display and sale of theirfurniture. On 35 thefirstfloor there is a house.The plans of the owner envisaged the sub-division of theshop intofour smaller ones, coupled with certain structuralalterationsdesigned toincreasetheusable space oftheshopstobe builtby thecreationofamezzanineineachshop 338 1 C.L.R. Lamarco Ltd.«.Kranos Pikl» J- enhancingtheshopspacebyabout40% Railedstaircaseswillbe constructed to facilitate access to the mezzanines. To make the changespossible,thebuilding mustbe reinforced bythe erection ofnewcolumns.TT^eowneranticipatesthatwhen theshopisduly 5 sub-divided as planned, the premises will yield an income of £700.-, that is,more than twice the present income of £330.- per month. Mr.Stavrakisfortheappellant challenged notonlythe findings of the Court but more so gaps inpertinent findings. Viewed from 10 whateverangle the facts intheirentirety could not,he submitted, support an order under s. ll(l)(h)(iii). Introducing the law he reminded usthat we cannot treat any part of the provisions of s. ll(l)(h)(iii)assurplusage and drewourattention tothedecisionof the Supreme Court in A.C.T. Textiles v.Zodhiatis* in which the 15 differences betweentheRentControlLawof 1983andthoseofits predecessor Law 36/75 in the area under consideration were highlighted with a view to emphasizing the more exacting requirements of the new legislation. These changes in the law, purposive astheymustbedeemed tobe,werenoticedbythetrial 20 Court but not articulated in their application to the facts of the case. Towarrantanorderunders.11(l)(h)(iii),itisnotenough forthe ownertomerelyprove thatthepremisesarereasonably required for substantive and radical changes, the finding upon which the 25 trial Court based its order; the law stipulates three other prerequisitesequallyessentialforthemakingofan order.The first and second of these requirements relate to the effect of the substantiveandradicalchangesonthebuildingasawholeandthe third to the purpose for which the changes are sought to be 30 undertaken. Thechanges inaddition tobeingofasubstantial and radical character they must entail (a)the radical, and (b)the total alteration of the building, and mustaimat(c)thedevelopmentof the property. The provisions of s.ll(l)(h)(iii) do not correspond to any 35 specific provision of English legislation; nonetheless some assistance can be derived from English caselaw dealing with statutory provisions giving a right to recovery of possession for purposesofsubstantialalterationsorreconstruction.Ifwecansum up the effect ofthe caselaw asaccurately depicted intheworkof •
(1986)1C.L.R.S9. 339 PUd·J* Lamarco Ltd.v. Kranoa
(1987)Meggary on the Rent ControlActs* for the changes to qualify as sufficiently substantial to justify an order, they must be fundamental in character and entail the transformation of the general structural characterof thebuilding**. Thealterations must be such as tobring about achange intheidentity of thepremises, 5 a term used time and again tosignify the drastic nature of the changes contemplated by the law as anecessary prerequisite for the making of an order. In the end counsel for the appellants submitted thatthe proposed changes in thiscase do notqualify as eithersubstantial 10 orradical and inany eventtheydonotentail,however beneficially we interpret the law for the owner, either the radical and far less thetotalalterationof thebuilding. Furthermore,hesubmittedthat the changes do notaim atthedevelopment of the property as the property isalready developed inthecontextof thecharacterofthe 15 area. Development, he argued, inthe relevant contextof this law, does not connote changes designed to enhance or maximize the income from the property; else the law would be defeated by a side wind For his part Mr.Michaelides laid stress on the uneven financial 20 circumstances ofthe parties pointing out that the tenantshavea large cycle of business andthatthesaleof furniture isbutabranch of their business. The owner, on the other hand,isan advocate who derives his income from his profession and land holdings. The turnover from the financial activites ofthe tenants leaves no 25 doubt about their superiority as compared tothe owner. The plight of the tenants, therefore, isnot such aswould merit the immediateprotectionof theCourt.Theanswer tothis submission, a fairly obvious one, is thatthe RentControl Law aims toprotect tenants as a class andnottheimpoverished or theweaker 30 members of that class. TheRentControllegislation constitutesan important aspect of thesocial legislation of thecountry, especially after the tragic events of1974 and as such should be given effect accordingtothetenorof thelaw andshouldbe applied inthespirit of theavowed purposes of the legislature***. 35 Moreover, Mr. Michaelides submitted that the contemplated changes are,as thetrialCourtfound, substantial andradicalandas suchsatisfy theremainingrequisites ofs. ll(l)(h)(iii).Alsotheyaim at the redevelopment of the property in conformity withthe •lOthEd., Vol. 1, pages 112-118. "Shannon v.McMahon
(1945)l.R. 327, at332. * · * See, interalia, Papageorrfiiouv. HjiPieras
(1981)1C.L.R ρ 560 340 1 C.L.R. Lamarco Ltd.v. Kianos PUdsJ· prevalent character ofthe area thatmostlycomprisessmall shops fortheservice oftourists. We have carefully considered the rival submissions not least because this is the first case in which the Supreme Court is 5 required to address itself specifically to the implications of s. ll(l)(h)(iii). Firstly we note that there are important differences between the 1983legislation andthecorrespondingprovisionsof the law it replaced (36/75); no doubt designed to stiffen the . prerequisites for recovery of possession for purposes of changes 10 and alterationstothe building. To qualify as substantial and radical, the first hurdle that the ownermustovercome,itmustbeestablished thatthechangesare consequential to the character of the building and sufficiently fundamental toqualify asradical.Theantonym of «substantial»in 15 the context of this provision of the law is «superficial». The proposed changes in this case do rank assubstantial but they do not qualify as radical.They do not go to the root of the structure and will leave the character of the building in much the same conditionasitwasbefore, atwo-storeybuildingwithshopsonthe 20 groundfloorandahouseontop.Inessencewhatiscontemplated isthe sub-division of a large shop into four smaller ones, leaving the structure and character of the buildingbasically unaffected. Moreconsequentially the'changes do notentailthe radicaland totalalterationandtransformation ofthebuilding.Asnoted above 25 the changes will leave the structure and character of the building . essentially unaffected. Our conclusions, noted above, make thesuccess ofthe appeal inevitable. This being the case it is unnecessary to probe the implicationsof «development» inthe context ofs. 1l(l)(h)(iii)and 30 express a concluded opinion in the matter; or indeed decide whether the planned changes inthiscase would qualify asan act of development. We leave the question open for decision on a future opportune occasion. Inthe resultthe appeal isallowed with costs. 35 KOURRISJ.:Thisisan appeal from the judgment of the Rent Tribunal of Limassol granting an order for the recovery of possession of business premises situate at Limassol under the provisions of s. ll(l)(h)(iii) of the Rent Control Law, 1983 (Law 23/83). 341 KoarrlsJ. Lamarco Ltd. v-Kranos
(1987)On 4/10/1985,therespondent filed an application intheRent Tribunal of Limassol, claiming possession of a shop pursuant to the provisions of s. ll(l)(h)(iii). The respondent, also, claimed possession under the provisions of s. ll(l)(h)(ii) and Section 1l(l)(c). But, these two grounds weredismissed; thefirst because c it was abandoned and the second because of insufficient evidence. The facts shortly are these: The respondent is the owner of a large ground floor shop situate along No. 43 Promachon Eleftherias Street which is in the tourist area of Limassol and the appellant is thestatutory tenantusing theshop for thedisplay and 1 0 saleof furniture. On topof theshop isthehouse of the owner. The architectural plans of the owner provided for the sub division of theshop intofour smaller ones with mezzanine ineach shop in order to enhance the space. To achieve this, certain 15 structural alterations were necessary such as the construction of mezzanines and the erection of columns and railed staircases. In the event, the rent would be increased by more than twice, i.e. from£330.- per monthto£700;- permonth. The Rent Tribunal found that on the evidence before it the 20 premises were reasonably required for substantial and radical alterations, and consequently granted an order for recovery of possession. Theappellants' main grounds are thatthefindingsof theCourt are inadequate to support an order under s. ll(l)(h)(iii) and that, 25 in any event, the facts, as found by the RentTribunal with regard tothealterationsof thepremises, could notjustify themaking ofan orderfor possession underthesaid section. ft is pertinent, at this stage, to set out the provisions of s. ll'(I)(h)(ia)' of the Rent Control Law, 1983 (Law 23/83) which 30 reads as follows:«1T(T) Ουδεμία α π ό φ α σ ι ς και ουδέν διάταγμα εκδίδεται δια την ανάκτησιν της κατοχής οιασδήποτε κατοικίας ή καταστήματος, δια το οποίον ισχύει ο π α ρ ώ ν Νόμος, ή δια την εκ τούτου έξωσιν θεσμίου 35 ενοικιαστού, ττλήντων ακολούθωνπεριπτώσεων:(η) Εις ην περίπτωσιν και εάν το ακίνητον απαιτείται λογικώς υ π ότ ο υ ιδιοκτήτου. 342 1 C.L.R. Lamarco Ltd. v.Kranos KourrU J. (iii) Δια ουσιαοτικάς και ριζικάς αλλαγάς συνεπαγό μενος την ριζικήν και ολικήν μετατροπήντ ο ύ τ ο υ δια σκοπούς αξιοποιήσεως του». To justify an order under section ll(l)(h)(iii), the owner is 5 burdened to prove not only that the premises are reasonably required for substantial and radical alterations but also, that the . changes must entail the radical and the total alteration of the building and mustaim atthedevelopment of the property. There is no corresponding provision inthe English Legislation 10 to the provisions of our s. ll(l)(h)(iii) and Ihave looked in the Greek Dictionaries for the meaning of the words used in this section. In the Μεγάλο Λεξικό όλης της Ελληνικής Γλώσσης Δ. Δημητράκου, Volume10,it is stated, «Ολικός:-ο ανήκων ή 15 αναφερόμενος ειςτ ο όλο, ο καθολικός, ο πλήρης», and at Volume 12, «Ριζικός:- Ο ανήκων ή αναφερόμενος ειςτην ρίζαν, θεμελιώδης, βασικός, κύριος:» and in the Μεγάλο Λεξικό of the Modem Greek Language, A. Georgopapadakou, the meaning of the word «Ολικός:- αυτός που ανήκει ή 20 αναφέρεται στοόλον,ογενικός, καθολικός,πλήρης andthe meaning of the word «ριζικός:-αυτός ανήκει ή αναφέρεται στην ρίζαν, ολικός, ολοκληρωτικός,πλήρης.» The RentTribunal concluded thatthepremises are reasonably required for substantial andradicalchanges which, inmyopinion, 25 are inadequate to support a possession order in view of the prerequisites ofs. ll(l)(h)(iii), asstatedhereinabove; furthermore, Iagree with the submission of counsel for the appellants thatthe contemplated alterations do not entail the radical and the total alteration of thebuilding as provided for by s. 11(l)(h)(iii). 30 I think it is impossible to give an accurate and comprehensive definition of the alterations required to bring about the desired order under s ll(l)(h)(iii). The question is one of degree depending on the facts of a particular case. Bearing in mind the meaning of the words used in the section 35 and the facts of this case, as found by the RentTribunal, I have come to the conclusion thatthe alterations could not,underany circumstances,justify themakingoftheorderforpossessionunder the aforementioned section of the Law and for the reason, I wouldallow theappeal with costs. 40 Appeal allowedwith costs. 343