clr/1988/1988_1_687.pdf

(1988)Rent control—The Rent Control Law, 1983 (Law 23/83), section ll(l)(h)(

1. ii)—Premises reasonably required for demolition and reconstruction —Notion of «reasonably required» linked only to whether or not it is reasonable for the landlord to obtain possession —Itisunrelatedtoany other factor. 5 Constitutional Law — Fairtrial—Constitution, Art. 30.3. The appellants are owners in equalundivided sharesofablock.of buildings on Anexartisias Street, Limassol, The block consists of a small basement, ground floor shops, first-storey and a small apartment on the second floor. They are in the occupation of five 10 different tenants. Theappellantsfiled fiveapplicationsforrecovery ofpossession on the ground that the premises were reasonably required for demolition and reconstruction. On 16.6.88the RentControlCourt issuedan ejectment order, but 15 suspended itsexecution until 1.5.89. Moreover, the Court ordered theappellants to paytothe present respondents£10,000.-compensation forgoodwillundersection13. Finallythe Court imposed the following conditions: (a)Made a recommendation (sic)forthe grant tothe respondents 2 0 of a new tenancy of a shop analogous to the one they have in their occupation. (
2. b)Ordered that the appellants do deposit until 31st December, 1988,inCourtandserveontherespondentsortheiradvocateacopy of a renewed building permitwhich willbe valid until the expiration 2 5 ofthe period of suspension. (
3. c)Ordered the appellants until 31st December, 1988, to file in Court and serve on the respondents or their advocate an affidavit sworn by one of the appellants in which to state their financial capacityin cash and inloansfor an amount over£150,000.30 (
4. d)Prohibited the appellants to transfer, or in any way alienate, mortgage, or in any way charge the said property until 31st December, 1988, with the exception of any mortgage of the immovable forsecurity ofa loan to cover the costof reconstruction. The appellants, as a result, filed this appeal. The respondents 3 5 cross-appealed, challenging the ejectment order and the compensation of £10,000, as manifestly low. The cross-appeal against the ejectment orderwaswithdrawn. Held,allowing the appeal anddismissing the cross-appeal: 688 1C.L.R. 5 10 15 Nlcolaldes v. Chrysochou (l)Section 13 is not a new provision in the Rent Control Legislation of this country. It is found in the Rent {Control) Law, 1954 (Law 13 of 1954) Cap.86 of the 1959 Edition of the Laws of Cyprus. Itwas verbatim reproduced insection 11 of Law 17/61 and section 17 of Law 36/75. Thisprovision was taken from section 4

(1)of the English «Landlord andTenant Act. 1927».This provision has . received authoritative Judicial interpretationboth inEngland andin Cyprus.

(2)Itis a cardinal principle of interpretation-thatthe legislator is presumed to know the Law and its authoritative interpretation by theCourts. Thereisnoreason todepart from theinterpretationgiven by the Courts tothe provision of section 13.The statutory adherent goodwill (αέρας) has nothing in common with what is called (αέρας)orgoodwill which isnowadays paid by incomingtenantsto outgoing tenants. Theissue of «compensation» undersection 13 should be raised in the pleadings by the tenant.The burden of proof lies on thetenant. Inthis case thetenantsfailed todischarge it. 20 25 30 Though there is evidence that the tenants will suffer loss by recovery of possession by thelandlord,there is no evidence atall as totheadherentgoodwill, noevidence as tothemeasure of damages. no evidence as totheactual increase inthe rental value arising from the exercise by the carrying on of the respondents of their trade or business in the said shops. There is no evidence as to what the landlord will gain by any addition to the rental value due to the carrying onof thebusiness by thetenants.

(4)It was suggested by counsel for the respondents that the statutory «goodwill»isa mattera intelligent guess. Inthelight of Law 23/83 and Art. 30 of the Constitutionthe RentControl Courthas to determinecases inaccordancewiththeevidence adducedbefore it. The «intelligent guess» (Whiteman Smith Motor Company Ltd v. Chaplin [1934] 2 K.B. 35) must be made by an expert witness considered by the Courttobe honest and competent and accepted as accurate. 35 40

(5)The imposition of conditionsundersection 16 of Law 23/83 is a matter of discretion. The principles governing interference by this Court with the exercise of a trial Court' s discretion were stated recently inSfylianou v. Stylianoul

(1988)1C.L.R. 520.

(6)The grant of anew tenancy is governed by section 14.There is no power to make an order for a new tenancy in an application for recovery of possession. 689 Nlcolalde*v. Chrysochou

(7)Thecondition astothedepositofarenewedpermitwasagreed to be varied bythe parties.

(8)Theappellantsadducedevidenceastotheirfinancial condition in order to show that they genuinely required possession for the purpose of demolition and reconstruction, though thismight not be necessary, in view of judicial pronouncements that the notion of «reasonable requirement» is linked only to whether or not it is reasonable for the landlord to obtain possession for the purpose of the reconstruction and itisunrelated to anyother factor. 5 Ifa judgment for recovery of possession or ejectment isobtained J Q by false pretences or the concealment of material-facts, the remedy ofthe tenant isdamages under section 15ofLaw 23/83. Inany event, the trialCourtfailed togiveany weight, inimposing thethirdcondition, to the factsasfound byit.

(9)The fourth condition was a drastic restriction of a right of 15 ownership,which could notbeimposed withoutgivingtoapartythe opportunity to present hisargument. Furthermore,though an order restraining a landlord from dealing with his property might be necessary in order to give effect to the provisionsofsection 14, itisnot necessary ina case of ejectment. 20 Onthisissuethepartiesdidnothave«afairtrial»underArticle30.3 ofthe Constitution. Appeal allowed. Cross-appeal dismissed.Costs against respondents. Cases referred to: Sulay v.Kazandjian,24 C.L.R.37; Whiteman Smith Motor Company Ltd. v. Chaplin and Another [1934J2K.B.35; Charringtonand Co. v.Simpson [1935]A.C.325; Gift v. Taylor[1948]2AllE.R.450; 30 Mullinsv. Wessex MotorsLtd. [1947]2AllE.R. 727; Rialto Cinemas Ltd. v. Wolfe [1955] 1 W.L.R.693; Teler.iachou v.Papares

(1988)1 C.L.R.12; Irelandv. Taylor[1948]2 AllE.R.450; Stylianou v.Stylianou

(1988)1C.L.H.520; 690 35 1 C.L.R. Nlcolaldesv. Chrysochou Altrans ExpressLtd. v. CVA Holdings Ltd. [1984] 1All E.R. 685; Yerasimouv. Rousoudhiou

(1974)1 C.L.R.107; Kontou v.Solomou

(1978)1C.L.R. 425; DemetriouandOthersv. loannides

(1982)1 C.L.R.16; 5 Poyiatzisv. PilavakisandOthers

(1988)1C.L.R.411. Appeal and cross-appeal. Appeal and cross-appeal against the judgment of the Rent Control Court of Limassol dated the 16th June, 1988 (Appl.No. E.28/86) whereby an order for the recovery of possession of five 10 shops in Limassol against the respondents was given and the applicants were ordered to pay to them the sum of £10,000.- for goodwill. P.Pavlou withS. Papakyriacou, for the appellants.. A. Konnaris,for the respondents. 15 Cur. adv. vult. STYLIANIDESJ.readthefollowingjudgment oftheCourt.The appellants are owners in equal undivided shares by virtue of registrations35745and35746ofplots30,31/2,31/3 and31/4of sheet plan LIV/58.5.I!of Limassol town.Thisimmovable consists 20 of a small basement, ground floor shops, first-storey and a small apartment on the second floor. The frontage of the shops is on Anexartisias Street and the comer of Pavlos Melas side-street. They are inthe occupation of five different tenants. The appellants, as the aforesaid property is ripe for 25 development and the economic life of the existing building according to their expert, a chartered surveyor and developer Antonis Loizou, P.W.6, has come to an end and the yield thereof is minimal not exceeding 4.3%, they decided to demolish and reconstruct it. Drawings were prepared by P.W.2 Georghios 30 Stamatiou, an architect, and P.W.3Achilleosa civilengineer.The drawingsare for the erection of one multi-storey shop, consisting of basement, first floor, mezani and two floors over it. The statutory notice inwriting not lessthan four months to vacate the premiseswasgiven tothetenants. 35 Asnone of the tenantscomplied, five applications for recovery of possession on the ground that the premises were reasonably 691 Stylianldes J. Nlcolaides v. Chrysochou

(1988)required for i c .olitionandreconstruction werefiled Afteralong and protracted tnal the Court on 16th June, 1988, issued an ejectment order ordenng the tenants - respondents in each application to vacate the premises and deliver vacant possession to the appellants The Court, also, in exercising itspower stayed 5 execution and/or suspended the dateofpossession upto 1stMay, 1989 The Court, further, in the case of the present respondents ordered the appellants to pay £10,000 - compensation to the respondents for goodwill under section 13 and imposed the 10 following conditions (

1. a)Made a recommendation (sic) for the grant to the respondents ofa new*tenancyofashopanalogoustotheone they have in their occupation and ifitisnot feasible tograntto them a tenancy of a smaller shop tobe used forsaleand receipt of films 15 (b)Ordered thattheappellants do deposit until31st December, 1988, in Court and serve on the respondents ortheir advocate a copy of a renewed building permit which will be valid until the jxpiration of the penod of suspension (c)Ordered the appellantsuntil31s' Decern»-2r,1988,tofilein 20 Court and serve on the respondents ortheiradvocate an affidavit swom by one of the appellants in which to state their financial capacity incash and in loansforan amount over£150,000 -, and finally, (
2. d)Prohibited the appellants to transfer, in any way alienate, 25 mortgage, or in any way charge the said property until 31st December, 1988, with the exception of any mortgage of the immovable for secunty of a loan to cover the cost of reconstruction The appellants being aggneved filed this appeal which is 30 directed against the aforesaid order for compensation and conditions imposed bythe Court The respondents by cross-appeal challenged the order for recovery of possession and further, inthe alternative, the quatum of the compensation of £10,000 - which they contended is 35 manifestly low. Atthe commencent of the heanng thecross-appeal against the ejectment order was withdrawn 692 1 C.L.R. Nlcolaides v. Chrysochou StyUanldes J. A. COMPENSATION UNDER SECTION 13 5 10 15 20 25 30 35 Counsel for the appellants submitted that the respondents tenants failed to prove that any goodwill has become attached to the premises by reason of the carrying on by the tenants of a business in the subject premises as envisaged in section 13 and, further, that they failed to adduce any evidence to establish the measure of compensation or to prove any compensation. And, further, that this part of the judgment is not warranted and/or is contrary to the evidence adduced. Counsel for the respondents, on the other hand, invited the Court, notwithstanding the Judgment in Mehmet AH Sulay v. Ananiya Kazandjian,24 C.L.R. 37, to interpret section 13 of the Rent (Control) Law, 1983 (Law No. 23/83) so as to bring" it in' harmony with the presently prevailing trading conditions in the market (συναλλαγματικά ήθη της αγοράς) and award as compensation what a person is required topay in order to secure a shop and he, also, submitted that the amount of £10,000.- is manifestly low. No evidence is required to be adduced as the award is simply an intelligent guess by the Court. Section 13 of Law 23/83 reads:«13. Οσάκις λόγω της υ π ό του ενοικιαστού ασκήσεως εις τ ο κατάστημα επιτηδεύματος ή εργασίας συνυπάρχη εμπορική εύνοια (αέρας) ήτις αυξάνει την ενοικιαοτικήν αξίαν τούτου και λόγω απώλειας της κατοχής του καταστήματοςο ιδιοκτήτης καρπούται το όφελος της τοιαύτης αυξήσεως, ενώ ο ενοικιαστής υφίσταται ζημίαν, το Δικαοτήριον, κατά την έκδοσιν α π ο φ ά σ ε ω ς ή διατάγματος δυνάμει οιασδήποτε των π α ρ α γ ρ ά φ ω ν (ζ)και (η)του εδαφίου

(1)του ά ρ θ ρ ο υ11, δι' ανάκτησιν κατοχής ήέξωσιν, δύναταιναδιάταξητον ιδιοκτήτην να πλήρωση εις τον ενοικιαστήν τοιούτο ποσόν οίον το Δικαοτήριον ήθελε θεωρήσει επαρκέςδια να αποζημιωθή ο ενοικιαστής διά την απώλειαν της κατοχής του καταστήματος, λαμβανομένου δεόντως υΤΓ ' όψιν του υ π ό του ιδιοκτήτου καρπουμένου οφέλους και ουδεμία νομική ισχύς δίδεται εις την τοιαύτην α π ό φ α σ ι νήτο τοιούτο διάταγμαμέχρις ότου πληρωθή το τοιούτο ποσόν.» 693 S t y l l a n l d e · J. Nicolaldes v. Chrysochou

(1988)And :nEnglish itreads «13 Where by reason ofthecarrying onby thetenantinthe premises of atradeorbusiness agoodwill (αέρας)isattached thereto increasing the rental value thereof and by reason of theloss of thepossession ofthepremisesthelandlordshall get 5 thebenefit ofsuchincreasewhilst thetenantshallsuffer a loss, the Court,ingivingajudgment ormakinganorderunderany of paragraphs (g) and (h)of sub-section

(1)of section 11 for recovery ofpossession orejectment, mayrequirethelandlord to pay tothetenantsuch sumas would appeartotheCourtto *0 be sufficient to compensate the tenant for the loss of the occupation of the premises, due regard being had to the benefit denved by*the landlord, and effect shall notbe given tosuch judgment or orderuntilsuch sum ispaid » Thisisnotanew provision intheRentControlLegislation inthis 15 country. This identical provision is found insection 19 of the Rent (Control) Law of 1954 (Law No 13/54), Cap 86 of the 1959 Edition of the Laws of Cyprus It was verbatim reproduced in section 11 of Law 17/61 and section 17 of Law 36/75 This provision was takenfrom section4

(1)oftheEnglish«Landlordand 20 TenantAct, 1927» The issue of compensation for goodwill was judicially considered in England in Whiteman Smith Motor Company Limited ν Chaplin and Another [1934] 2 K B 35, Chamngton & Co ν Simpson [1935] A C 325 Η L ,Cliftv. Taylor [1948] 2 All 25 E R 113,Ireland ν Tay/or[1948]2AllE R 450,Mu//insv Wessex Motors Ltd [1947] 2All ΕR.727,C A andRialto Cinemas Ltd ν Wolfe [1955] 1W L R 693 Ithas tobe noted thatthis provision was abolished inEnglandin 1954 by theLandlordandTenantAct 1954 TheSupremeCourtof Cyprushadoccasiontodealwithsection 19 of theRent(Control)Law 1954 inMehmetAh Sulayv Ananiya Kazandjian (supra) We must say from the outset that compensation for goodwill should be raised in the pleadings by the tenant.Theexpression «goodwill»or«compensaton for goodwill» 35 (αέρας)» is not defined in the Law but it was considered in Chamngton & Co v. Simpson (supra) to be inappropnate to descnbe a paymentwhich isapaymentinrespect of an improved rental value attachedto the premises In Whiteman Smith Motor Company Limited v. Chaplin and 40 Another (supra) itwas said by Scrutton LJ ,atρ 4 2 694 30 1CUR. 5 10 15 Nlcolaldes v.Chrysochou Stylianldes J. «But the statute has provided as the principal test the difference at the end of the term between the rent with the goodwill and without it. I understand this to mean: find the rental value which atthe date of the expiration of the lease a newtenantwould pay ifthere had been noprevious business carried on there; compare this with the rent which a new tenant would pay forpremiseswhich have been the homeof a previous and similar business for so many years. This increaseofrent,ifany,isthefigurewithwhichonehastostart. If the landlord can get a higher rent by letting for an entirely different purpose he has not gained anything by the tradeof the previous tenant. If the increase of rent at the end of the tenancy isdue to more favourable circumstances with which the tenant has nothing to do, such as increase of population, change of character of neighbourhood, increased use of motoring,thatincreaseofrentisnotdirectlyduetothetrading of the tenant.» Maugham L.J. had thistosayatp.48-49:- 20 25 30 «Theonlykind ofgoodwillwhich can be an addition to the value of the premises in the hands of the landlord isthat kind which has become attached to the premises, irrespective of their position, and which would naturally be reflected in a higherrentpayablebyaperson carryingonasimilarbusiness ... If the term 'adherent goodwill', is used, it is essential to define it. I shall use the phrase 'net adherent goodwill' as meaning the goodwill, if any, which will remain attached to the premises, not including the 'site goodwill', that is, irrespective of customers who would come to a new tenant, starting a new business, simply because of their convenient situation. In a sentence it is important not to confuse site goodwill, which isinherent, with net adherent goodwill.» Andat p.52:«...,Ithinkitisclearthatunders.4ofthatActchangesinthe neighbourhood or in the nature of the trade, not being the 35 direct result of the carrying on of the trade, must be disregarded in determining the increment in value of the premisesattheend ofthe term.» Andatp.54: 40 «And as Ihave already pointed out, the addition to whatI callthe normal rentdue asa direct resultofthecarryingonof 695 Stylianides J. Nlcolaldes v. Chrysochou

(1988)the tradeisnotrhenetadherentprofit buttheincreasedrent which iiisthoughta tenantwillpaywhoistogetthe benefit of the true adherent qoodwill. It seems to me essential to ascertain this addition, if any, to the value of the holding determined to bethe direct result ofthe tradeexcept inone 5 case where a short cut ispossible -namely, ifthetribunalis satisfied that the goodwill rent and the normal rent are substantiallythesame,thereisnoneedtogoany further.» IntheHouseofLordsinCharrington&Co.v.Simpson(supra) LordTomlinsaidatpp.335-336:«It is unfortunate that the section has not been framed withaclearerexpositionofitsgeneralpurposeandwithmore precision intheuseofterms.Thesection,however,seemsto contemplate that in certain cases something in the form of increased valuewill,afterthetermination ofthetenancyand 15 as the result of the tenant' s business activities during his tenancy, adhere tothepremisesinthelandlord' shands,but thatthemeasureofanycompensationtothetenantinrespect ofitisnotwhathelosesbutwhatthelandlordgains. Ananalysisofthesectionsuggeststhattwostepshavetobe 20 takenbythetenant.Thefirststepistoprovethat,byreasonof thecarryingonbythetenantorhispredecessorsintitleatthe premisesofabusinessforaperiod ofnotlessthanfiveyears, goodwill' has become attached to the premises by reason whereof the premises could be let at higher rent than they i wouldhaverealizedhadnosuch'goodwill'beenattached.In order toestablish this,twoquestions have to be answerednamely, (1.) has goodwill become attached to the premises so as to increase its rental.value? and if so, (2.) is that, attachment due to the carrying on of the business by the 30 tenantorhispredecessorsintitle? The second step is, under proviso (

1. a)to establish the measureofthecompensation.Themeasureisnotthevalueof thegoodwillwhichthetenantlosesbygivingupthebusiness, but what the landlord gainsby such addition, ifany, to the 35 valueoftheholdingasisthedirectresultofthecarryingonof thebusinessbythetenantorhispredecessorsintitle. ...Theposition ofanoutgoingtenantsellinghisbusinessand hisleasetoanincomingtenantbuyingthemdiffersmaterially 40 from thepositionofatenantwhoseleaseisterminating.» 696 10 1 C.I..R. Mcolaides v. Chrysochou Styllanldes J. InMehmet AHSulay v. Ananiya Kazandjian (supra),Zekia,J., as he then was, formulated the main requirements for an order of compensation as follows at p.38:5 «(a)thatgoodwillbecame attachedtothebusiness premises inquestion by reason of thecarrying thereon by thetenantof some trade or business; (b)that the rental value has been increased owing to such business having been carried on by thetenant; 10 (
2. c)that the landlord shall get the benefit of such increase; and (
3. d)the tenant shall suffer a loss by giving up possession of such business premises.» , 15 The issues raised by the appellants are whether there was any evidence on which the trial Court could find that there was adherent goodwill, and if there was any evidence to support the award of £10,000.-. ' Before proceeding any further, we say that it is a cardinal principle of interpretation thatthe legislator is presumed to know the Law and its authoritative interpretation by the Courts A 20 statutory provision which was interpreted as early as 1959 was reproduced in successive rent control legislation. We have not been persuaded by counsel for the respondents that we should • depart from theinterpretationgivenby theEnglish Courtsand our Supreme Court to,this provision for statutory compensation for 25 goodwill.The statutory adherent goodwill (αέρας) has nothingin common with what is called «αέρας»- or goodwill which is nowadays paid by incoming tenants to outgoing tenants. The latterisan amountboth for thegoodwill of thebusiness and/or for securing ashop inusually very commercial locations,where shops 30 are either scare or theiravailability is difficult. ' The trial Court had this to say on the matter at p.221:- 35 «Δεχόμαστετ η μαρτυρία τ ο υ Καθ' ου ηΑίτησιςότιτ ο 1954π ο υ ενοικίασαν μέροςτ ο υεπιδίκου καταστήματος η περιοχή δεν είχε την εμπορικότητα που έχει σήμερα. Η αύξησητης εμπορικότητας οφείλεται σε διάφορους παράγοντες μεταξύ των οποίων η σημαντικήαύξηση τ ο υ πληθυσμού της Λεμεσού μετά την εισβολή και η αύξηση τ ο υ τουρισμού. Στην αύξηση τ η ς εμπορικότητας συνέβαλε σε κάποιο βαθμό και η 697 S t y l l a n i d e · Λ.- Nlcolaldesv. Chrysochou

(1988)δραστηριότητα των Καθ' ων η Αίτησις και των υπολοίπων καταστηματαρχών της περιοχής. Η σημερινή μεγάλη εμπορικότητα της περιοχής δημιούργησε την απαίτηση για πληρωμή 'αέρα'για νέες ενοικιάσεις καταστημάτων, ανεξάρτητα από την 5 εργασία π ο υ διεξήγαγε σ' αυτό ο προηγούμενος ενοικιαστής. Κατάτην μαρτυρίατου Καθ'ουηΑίτησις 2 του ζήτησαν 'αέρα' £35,000 και £45,000 για δύο καταστήματα τηςπεριοχής. Αυτός είναι ο 'αέρας' της περιοχής και δεν συνδέεται με τη διεξαγόμενη στο 10 κάθε κατάστημαεπιχείρηση. Από τηνάλλη πλευρά για την'εμπορική εύνοια' της επιχείρησης των Καθ' ων η Αίτησις μας δόθηκε μαρτυρία, την οποία δεχόμαστε, ότι αξίζει £100,000 τουλάχιστον. 'Εμπορικήεύνοια' είναι ηπροτίμηση των 15 πελατών καικατ' επέκταση ηαξίατηςεπιχείρησης σε λειτουργία, μεπελάτες και κύκλο εργασιών, με γνωστό εμπορικό όνομα,χωρίςτα κεφάλαια,εμπορεύματα και άλλα ενεργητικά στοιχεία.» And atpp.223-224:- 20 «Αναφορικά με την ενοικιαστική αξία του καταστήματος έδωσε μαρτυρία ο Καθ'ου ηΑίτησις2 και ανέφερε ότι σε περίπτωση μετακίνησης τους αυξάνεται η ενοικιαστική αξία του καταστήματος, προς όφελος των ιδιοκτητών,γιατίτο κατάστημαέγινε 25 γνωστό στον κόσμο από τηδουλειά τωνενοικιαστών. Τηναύξησητης ενοικιαστικής αξίαςτην συνέδεσε μετη δυνατότητα ναστεγαστεί στονέοκτίριοφωτογράφος ή πολυκατάστημα που να ασχολείται και με φωτογραφικά είδη καιμετο γεγονός ότιτοκτίριοέγινε 30 γνωστό α π ό την επιχείρηση των ενοικιαστών σαν 'Αυτόματη Γωνιά'.Μαςέκανεεντύπωση το γεγονός ότι γνωστός δικηγόρος γράφει σιην κάρτα του 'Άνωθεν Αυτόματης Γωνιάς' (Τεκμήριο 17) ενώ θα μπορούσε να αρκεστεί στογνωστό όνομα τηςοδού Ανεξαρτησίας ή 35 θα μπορούσε να αναφερθεί στο Διοικητήριο που βρίσκεται απέναντι. Δεχόμαστε ότι η επιχείρηση των ενοικιαστών είναι απότιςπιο καλάγνωστές στην πόλη μας. Νομίζουμε ότι η μαρτυρία καλύπτει και τις προϋποθέσεις (β) και(γ)για αποζημίωση εμπορικής 40 εύνοιας, όπως τίθενται στην απόφαση του κ. Ζεκιά.» 698 1 C.L.R. Nlcolaldesv. Chrysochou StyHanlHes J. And at pp.226-227:- 5 10 15 20 25 30 35 40 «Θα ήτανε χρήσιμο για τ ο Δικαστήριο αν εδίδετο σαφής μαρτυρία και ή δυνατόν εμπειρογνώμονος για τ ο ύψος τ ο υ ενοικίου χωρίς εμπορική εύνοια και για τ ο ύψος τ ο υ ενοικίου με την εμπορική εύνοια, οπότε θα φαινόταν η δ ι α φ ο ρ ά . Η μαρτυρία για την αύξηση της ενοικιαστικής αξίας δεν μπορεί εκ της φύσεως της να είναι πραγματοπαγής π α ρ ά υποθετική. Η μόνη μαρτυρία, που δόθηκε στο Δικαστήριο, την οποία δεχόμαστε σαν αληθή, είναι ότι ζ η τ ά τ α ι για ενοικίαση διπλανών καταστημάτων 'αέρας' 35,000 και 45,000 ενώ ο 'αέρας' της επιχειρήσεως των ενοικιαστών ξεπερνά τις 100,000. Έχουμε ήδη αναλύσει ότι στον 'αέρα' των διπλανών καταστημάτων περιλαμβάνεται η εμπορικότητα της περιοχής και ότι ο αέρας της επιχεί­ ρησης των ενοικιαστών περιλαμβάνει την αξία της εμπορικής εύνοιας από την πλευρά τ ο υ ενοικιαστή και τ ο υ υποτιθέυενου αγοραστή της επιχείρησης και όχι την αύξηση της ενοικιαοτικής αξίας του καταστήματος, """ου θα οφεληθεί ο ιδιοκτήτης. Ο ένας 'αέρας'δεν είναι ομοειδής μετον άλλο και παρά τ ο γεγονός ότι η ενοικια­ στική αξία δεν αποτελείται μόνο από τ ο μηνιαίο ενοίκιο αλλά και από τον πληρωνόμενο εφάπαξ 'αέρα' η δια­ φ ο ρ ά των δύο ποσών δεν μας δίνει την αύξηση της ενοικιαστικής αξίας τ ο υ καταστήματος, η οποία είναι οπωσδήποτε μικρότερη αυτής της διαφοράς (που ξεπερνά τις 50,000) επειδή επιπρόσθετα ποέπει να εκτι­ μηθεί η ενοικιαστική αξία για οποιονδήποτε νέο ενοι­ κιαστή και όχι μόνο για ομοειδή επιχείρηση με αυτή τ ο υ σημερινού ενοικιαστή. Το Δικαστήριο α φ ο ύ στάθμισε τη μαρτυρία, τ ο Νόμο και τη νομολογία πιστεύει ότι η περίπτωση που εξετάζουμε είναι τ έ τ ο ι α που πρέπει να δοθεί αποζημίωση σύμφωνα με τ ο άρθρο 13 τ ο υ Νόμου. Αν δεν δίναμε αποζημίωση για εμπορική εύνοια σε μια τέτοια υπόθεση τ ό τ ε θα θέταμε σε πραγματική αχρηστία τ ο άρθρο 13, πράγμα που δεν θα συμφωνούσε μετην επιθυμία του νομοθέτη. Νομίζουμε ότι η αποζημίωση που πρέπει να δοθεί βάσει, τ ο υ άρθρου α υ τ ο ύ είναι μικρότερη των £50,000αλλά πρέπει 699 Styllantdes J. Nlcolaidea v. Chrysochou

(1988)να είναι ένα στρογγυλό π ο σ ό π ο υ να συμβαδίζει κατά κάποιο τ ρ ό π ο με τα διάφορα π ο σ ά π ο υ ακούστηκαν στις μαρτυρίεςτης δίκης. Σαντέτοιο κρίνουμε το π ο σ ό των £10,000.» «We accept the evidence of the respondents that in 1954, 5 when they rented partof thesub judice premises thearea did not have the commercial value ithas to day. The increase in such value is due tovarious factors, including the substantial increase of the population of Limassol after the invasion and the increase of tourism. In the increase of such value the 10 activities of the respondents and other shopkeepers of the area contributed to a certain degree. The present great commercial value of the area created the demand for a premium in respect of new leases of shops, independently of the work carried out therein by the previous occupants. In 15 accordance with the evidence of respondent 2 he was asked topay premiumsof £35,000 and£45,000 for twoshops inthe area. Such premiums are not connected with the business carried out inthe relevant shop. On the other hand there was evidence, which we accept, 20 that the-commercial value of the business of the respondents is worth at least £100,000. 'Commercial value' is the preference of clients and in consequence the value of the business asagoing concern,with itsclienteleandturnover,its known trade name, without the capital, its stock and other 25 assets». And atpp.223 -224: «In respect of the rental value of the shop respondent 2 gave evidence andsaid thatincase of theirremoval therental value willbe increased for thelandlord's benefit, because the 3^ shop was made known tothe people due to the work of the tenants. Heconnectedtheincrease of therentalvalue with the fact that, in the new building, a photographer or a departmental store, dealing and with photographic substances, may be installed. He,also, connected it with the 35 fact that the building was, by reason of the tenants' activities, known as the «Automatic comer». The fact that a known advocate writes in his card the phrase 'above the automatic comer' impressed us, because he could have been satisfied with the known name of Anexartisias Street or he could have 40 700 1 C.L.R. 5 Nlcolaides v. Chrysochou Styllanides J. referred to the Office of the District Officer, just opposite his office. Weacceptthat thebusinessofthetenantsisamong the wellknownbusinessesofourtown.Weareoftheopinionthat the evidence satisfies prerequisites (

1. b)and (
2. c)for compensation for commercial value, as expounded in the judgment ofZekia, J.». Andatpp.226 -227: 10 15 20 25 30 35 «Itwould have been useful forthe Court, ifthere had been adducedpositiveevidence,ifpossiblebyanexpert, regarding therentwithoutcommercialvalueandrentwithsuchvalue.In such a case the difference would have been made apparent. The evidence inrespect of therental valuecannot, due to its nature, be otherthan hypothetical. Theonlyevidenceadduced, whichweacceptastrue,isthat for renting of neighbouring shop premiums of £35,000 and £45,000 are demanded whereas thecommercial value ofthe business of the tenants exceeds £100,000. We have already analysed that the commercial value of neighbouring shops includes the commercial value of the area and that the commercial value of the business ofthe tenants, includes the value of the commercial value from the point of view of the tenant and the supposed purchaser of the business and not the increase of the rental value, which shall benefit the landlord. The one value is not the same with the other and, despite the fact that the rental value does not consist only of themonthlyrent,but,also,ofthelumpsumpaidaspremium, the difference between the two sums does not give us the increase oftherentalvalueoftheshop,whichis,inany event, lessthansuchadifference (whichexceeds£50,000),because, in addition, one has to estimate the rental value for any new tenant, and not only in respect of a tenant with the.same businessasthatofthe present tenant. Having considered theevidence,theLawand the case-law the Court is of the opinion that this case issuch as to justify compensation under section 13 of the Law. If we had not awarded compensation ina casesuch asthis,wewould have thrownintothedustbinsection 13,whichiscontrarytothewill of the legislator.Weart oftheopinion that the compensation 701 Styllanldee J. Nlcolaldes v. Chrysochou

(1988)thereunder should be lessthan £50,000, but itshould be such a round figure, as to be compatible with the various sums referred to in the evidence. We award £10,000, as representing such a sum». The only evidence before the Court was that of D.W.I 5 Georghios Evangelou. Anexartisias Streetwas duringthecolonial rule King George VIStreet. Itwas adwellingarea. Therewas only a bar in that whole street and no shops at all. In 1954 he let one shop and started the business of a photographer. His business gradually expanded andrespondent2joined as apartner.Theylet 10 another shop. Both these shops are of an area of 100 sq. m on the ground floor; later they let an area of 90 sq. m. over the said shops. They expanded further in Pavlos Mela Street in adjoining premises of close relatives of the present appellants. They doeverything concerningthebusiness ofphotography; they 15 import and sell items of that line of business. Through the years Limassol town, the small town of 16,000 people, had become a big city. Trade and industry have increased to a considerable degree and Anexartisias Street has become the first commercial street in town. All premises inAnexartisias Street, especially after 20 the influx of refugees and the development that ensued, are business premises. There is a heavy demand of shops. There are no available ones, but if any, tens of thousand of pounds as «αέρας» is demanded from an incomingtenant. D.W. 1 Evangelou said thefollowing inexamination inchief: 25 «Q. Have you taken any steps to find othersuitable space to house your business A. ... Opposite are the shops of Mouzouri Brothers, they belong to Chattalas. Iasked MouzouriBrothers if they could dispose a shop as they can trade their items elsewhere and 30 they asked £45,000 'αέρα'. They further said thata certain Stelios Varnava further down paid £40.000... Q. Have you applied anywhere else? A. 1 asked othersbutnoonedisposes hisshopwithout 'αέρα'. There is an empty onefor which they ask £35,000 'αέρα' 35 Q. Didthey ask £35,000 'αέρα'? A. Yes, and rentnotlessthan £700 Q. Mr. Evangelou you said that Mouzouris asked £45,000, 702 1 C.L.R. Nicolaldes v. Chrysochou Styllanldes J. you mentionedanotherwho paid £35,

1. Ifsomeone came to purchase yours how much 'αέρα* would you ask? A. If we take into consideration our reputation (όνομα)and the years of thebusiness, over £100,000.» 5 Inanswering questions putby the Courthe said:«Q. Ifanother person was to purchase your shop and do the samebusiness howmuchhehastopay, how muchisitworth? A. £100,000 if we take into consideration what Mouzouris asked, I demand £100,
2. 10 Q-Ifsomebody comes and wants tosell shoes there? A. Ifhe can pay for the 'αέρα' hewillget it. 15 Q. Ifwe issue an ejectment orderand you leave, and you go, and anothershopisbuiltoftheextentofyourshopanditisnot basement, first-storey, etc. andonewanted toopena business notof a photographer, would he get morebecause you were photographer inthatshop for so many years? A. I think yes because it would be 'διαφημιστικό'. (advertizing Q. Would he sell theshoes at ahigher price? 20 Α. Θ α γίνει μια διευκρίνηση σε ένα γνωστό χ ώ ρ ο . Ιικεί π ο υ ήταν η Αυτόματη Γωνιά' υπάρχει το τάδε κατάστημα.» «There will be a clanfication in a known space. At the place where the 'Automatic comer' was there is a _<;itainshop». 25 This was the whole evidence'before the Court on the issue of the adherentgoodwill and the measure of compensation. The £100,000.- mentioned by the respondent - tenant in his evidence is unconnectedwith thestatutory goodwill. This applies with equal force tothe£35,000.- and£45,000.- demandedfor the 30 vacant shop and by Mouzouris respectively. The evidence adduced by the tenants,on whom theburden of proof lies, fallsshortof satisfying therequirementsfor theaward of compensation undersection 13.Thereisevidence thatthetenants willsuffer lossby recovery of possession by the landlord.There is 35 no evidence at all as to the adherent goodwill, no evidence as to 703 Styllanldes J . Nlcolaldes v. Chrysochou

(1988)the measure of damages, no evidence astothe actualincrease in the rental value arisingfrom the exercisebythecarryingon of the respondents oftheirtradeorbusinessinthesaidshops.Thereisno evidence as to what the landlord will gain by any addition to the rentalvalue due tothe carryingon of the businessbythe tenants. 5 Itwassubmitted bylearned counselfortherespondents.thatthe statutory goodwill isonly an intelligent guess. The Rent Control Court is a Court of Law established under Law 23/83. Having regard tothe material provisions of the Rent (Control) Law, 1983 in conjunction with the provisions of Article 10 30 of the Constitution, we are of the view that the Rent Control Court, inthe exercise of itsjurisdiction hastohear and determine a case on the evidence before it. It can only give judgment affecting the civilrights-therightsofproperty of alitigant-on the evidence before it. It may, only, take judicial notice of various 15 matters, which are so notorious, or clearly established that evidence of their existence is unnecessary - {Panayiotis Telemachou v. Chrysa Th. Papares, C.A. 7212, Judgment delivered on 26th October, 1987*,notyet reported). The intelligent guess, however, to which refercence was made 20 in Whiteman Smith Motor Company Limited v. Chaplin and Another (supra),mustbemadebyanexpertwitnessconsideredby the Court tobe honest and competent and accepted asaccurate (Irelandv. Taylor[1948] 2AllE.R. 450, atp.453). The appeal, therefore, with regard to the statutory 25 compensation willbe allowed and thecross-appeal dismissed. B.CONDITIONS: The conditions to which reference was made earlier on in this Judgment were challenged onthe following grounds:(a)The Court had no power to impose such conditions. 30 (b)TheCourtwronglyexercised itsdiscretionary power, ifithas any. (c) The conditions imposed are unreasonable unnecessary. and Section 16of Law23/83 reads as follows:«In any application made under this Part the Court may in 'Reportedin

(1988)1 C.L.R. 12. 704 35 1 C.L.R. 5 Nlcolaldes v. Chrysochou Styllanldes J. itsdiscretion orderthatinadditiontoorinsubstitution for any other order which the Court may make either party shall comply with any conditions, including the payment by one party totheotherof any amountagreed uponby them,which the Court may think fit to impose for giving effect to the purposes of thisLaw.» Itrefers toPartIVof theLaw comprising: Section 11 -recovery of possession - which provides for the cases an ejectment order may be made and matters relevant thereto; section 12 10 compensation to a tenant on the issue of an ejectment order, under paragraph 1 (στ), (ζ) and (η) of section 11; section 13 compensation for goodwill; section 14 - grant of new lease tothe tenant incertaincases and section 15 - compensationfor damage or loss sustained by a tenant,where the landlord has obtained a 15 judgment or order for possession or ejectment by misrepresentation or the concealmentof material facts. We do not agree with counsel for the appellants that, under section 16, the Court has no power to impose any conditionson making an order for recovery of possession. This power is 20 discretionary. It must be exercised according to the Law and for 1 thepurpose laid by the legislator. The principles governing theinterference by thisCourtwith the exercise by a trial Court of its relevant discretionary power were stated recently in Eleni Chr. Stylianou, v. ChristakisN. Stylianou, 25 C.A. 7635 (Judgment delivered on 9thSeptember, 1988, not yet reported*), in which the following passage from the English case AltransExpress Ltd. v. CVA Holdings Ltd.', [1984] 1All E.R. 685, at p.690, was adopted:30 35 «We must be very careful not to interfere with the judge's exercise of the discretion which has been entrusted to him. We can only do so if he has erred in law or in principle, orif he has taken into account some matter which he should not have taken intoaccountorhasleft outofaccountsomematter which he should have taken into account, or, and this is an extension of the law which is now Ithink well recognised, if the Court of Appeal is of opinion that his decision is plainly wrong and therefore must have been reached by a faulty assessment of theweights of thedifferent factors which he has hacfto take intoaccount.» 'Reportedin

(1988)1C.L.R. 520. 705 Styllanldes Λ. Nlcolaldes v.Chrysochou

(1988)With these principles inmind,we proceed toconsider each one of the conditionsimposed by theCourt. (a)Recommendation for the grantof new tenancy There isstatutory provision insection 14 for grant of new lease to the tenantin certain cases. * The trialCourthad no power to make an order for the grant of new tenancyinthisapplication,theissueof which was whetherto order recovery of possession by the landlord. If the recommendation is an operative part of the Judgment, this was beyond thejurisdiction of the trial Court.Ifthis isan advice and it 10 is not clear what theCourtintended,itis an example tobe avoided. (b)Deposit of renewed building permit Counsel for theappellants,thoughheattackedthisconditionas well, he stated that the relevant building permit is valid until February

1. In December 1988 it would not be possible to 15 have apermitvalid untiltheexpiration of theperiod of suspension of theJudgment,i.e. 1stMay,
2. Therefore, ifthedateis shifted to March, the appellants would comply with such a condition. Counsel for the respondentsstatedthathehadnoreason to object to such modification. Therefore, without saying anything more, 20 we shall vary this conditionto read as follows:«The appellants to file with the Registrar of the Court,on/ or before 15th March, 1989, a copy of a renewed building permit,which willbe valid and operative on 1st May, 1989.» (c)Affidavit withregard to financial capacity 25 By thisconditiontheappellantsare required tofileandserveon the respondents or theiradvocate an affidavit inwhich tostate by 31st December, 1988, that they have financial capacity in cash and in loans over £150,000.In the course of the trial evidence was adduced by the 30 appellants of their financial condition and their capacity to erect the proposed new building. This evidence came from the appellants and bank employees. In theirjudgment the Courtsaid (pp. 219-220):«The financial condition of the applicants appears very, 35 good. They have no debts. They have money reserves and considerable immovable property. They have started selling 706 1 C.L.R. 5 Nlcolaldes v.Chrysochou Styllanldes J. buildingsitesfrom anumbertheycandisposeandthepriceof one of each is about £50,000.-. A loan of £70,000.- was approved by the Bank of Cyprus.The cost of reconstruction of the new building isvery small in relation to the total value of the properties ofthe applicants andweare oftheviewthat they have no difficulty tocoverit.», Notwithstandingthisfinding, whichwasnotdisputed,the Court imposed the above condition. The evidence of their financial ability was adduced in order to satisfy the Court that they 10 genuinely required possession for the purpose of demolition and reconstruction, though thismight not be necessary, inviewof the pronouncement ofthisCourt inanumber ofcasesthatthe notion of «reasonable requirement» islinked only to whether or not itis reasonableforthelandlordtoobtain possession forthepurposeof 15 thereconstruction and itisunrelated toanyotherfactor-(Andreas Yerasimou v. Andreas Rousoudhiou

(1974)1 C.L.R. 107; Anastassia S. Kontou v. Antonis Solomou

(1978)1 C.L.R. 425; ChrystallaDemetriou and Others v. Sawas Ioannides

(1982)1 C.L.R. 16andAthanasios Poyiatzis,v.Constantinos Pilavakisand 20 Others,CAs. 7230 and 7231,Judgment delivered on30th June, 1988, not yet reported*). If a judgment for recovery of possession or ejectment is obtained by.false pretences or concealment of material facts, the remedy ofthe tenant isdamages under section 15of Law23/ 25 83. If the recovery of possession' is secured because of a misrepresentation by the owner as to the need he has of the premises,innocentthough itmaybe, theclaimfordamagesbythe tenant isestablished. The, trial Court failed to give any weight in imposing this 30 condition to the facts as found by it, which it had to take into account. There was no shred of evidence pointing that the financial position of the appellants would, inany way, deteriorate in six months time. This condition is an exercise of discretion, whichhastobeinterfered withonthebasisoftheprinciples herein 35 above referred to. (d)Prohibition oftransfer,charge, etc. The relevant title-deed covers, not only the subject shops, but part of other premises -immovable of the appellants. *Reportedin

(1988)1C.L.R. 411. 707 Styllanldes J. Nlcolaldes v. Chrysochou

(1988)Counselfortherespondents statedbefore usthathe didnotask for such a condition; the advocates were not given by the trial Court the opportunity to argue on it. Such drastic restriction of a right of ownership cannot be imposed without giving to a party the opportunity to present his 5 argument. There was nothing before the trialCourt on which any Courtwouldimposethiscondition,which,infact,isnotpractically feasible withoutaffecting propertyoftheappellantsotherthan the subject shops. Furthermore, though an order restraining a landlord from 10 dealing withhisproperty mightbenecessary inordertogive effect to the provisions of section 14, it is not necessary in a case of ejectment. This condition was a result of wrong exercise of discretion, wrong in principle and faulty. Furthermore, on this issue the 15 parties did not have «a fair trial» under Article 30.3 of the Constitution. In view of the foregoing, the appeal succeeds as above. The cross-appeal is dismissed. With regard to costs, bearing in mind the issues raised and the 20 result,weseenoreason whyinthiscasetheyshouldnotfollowthe event. Respondents topay thecosts ofthe appellants. Appeal succeeds as above. Cross-appeal dismissed. Costs by respondents. 708