clr/1989/1989_1_265.pdf

(1989)The appellants objected tothe application onthe ground thatthe case was outside the ambit of the RentControlLaw. The point was heard preliminary to the hearing. The Rent Control Court decided that theappellants were statutory tenants Hencethisappeal. Held, allowing the appeal:

(1)Theprovisions of sections 2and 22 5 of Cap. 224 that the owner of a plot of land becomes the owner of any building thatmay be erected thereondo notoperate against the tenants-appellants, because of the agreement hereinabove described; they only operateagainst third parties.

(2)Inview of the definition of the word «immovable» «ακίνητο» (which includes business and residential premises, but not plots of land) in section 2 of Law 23/83, andin viewof the definition of the word «owner» m the same section and the words «completed» and «let», which denote a structure and not a plot of land, this case is outside theambit of the RentControlLaw, 1983. 10 15

(3)Thepurpose of thelegislator inenactingtheRentControlLaw was toprotectthetenantsand nottoconfer rights tothe owners. Appeal allowed with costs. Casesreferred to: Kyriakides v. Council for Registration of Architects

(1966)3 C L.R. 640; 20 Hjipavlou v.Jinaro Terra Co. Ltd.

(1982)1 C.L.R. 433; Considine v. Ryan

(1938)72 Ir.L.T.R. 80; GulamaiiJetha v.Jadavji Chhagen

(1955)22 E.A.C.A.

1. Appeal. Appeal by applicant against the ruling of the RentControlC o u i . ^ 5 ofNicosiain Appl. No.E.152/84 dated the 29th January, 1986 by which itdecided thatthesubject matterpremises are subject to the provisions of the Rent Control Law, 1983 (Law No. 23/83). A. Triantafyllides, for the appellants. St. Erotocritou (Mrs.), for the respondent. 30 Cur. adv. vult A. LOIZOUP.: The judgment of the Court will b e delivered by Mr. Justice Kourris. KOURRIS J.: This is an appeal against the Ruling of the Rent Tribunal of Nicosia by which it decided that the premises, the 3 5 266 1C.L.R. Apex Ltd. v. Argyridou KourrtsJ. subject matter of this appeal, are subject to the provisions of the Rent ControlLaw, 1983 (Law 23/83). The respondent maintained that she was the owner of the premises and that she leased to the appellant the premises in 5 question and filed an application before the Rent Tribunal of Nicosiaclaiming for anOrder for therecovery ofthepossession of the premises, now in the possession of the sub-tenant under the provisions of s.ll(l)(e) on the ground that the tenant, appellant company, by sub-letting the whole of thepremises, was making a 10 profit, which having regard to the rent paid by the appellantcompany, was unreasonable. This section reads as follows: 15 20 «(ε) εις περίπτωσιν καθ' ην ο ενοικιαστής, διό της προσλήψεως ενοίκωνήδ ι ά τ η ς υπενοικιάσεως ή άλλως αποχωρισμού της κατοχής ολοκλήρου ή οιουδήποτε μέρους της κατοικίας ή τ ο υ καταστήματος πραγματοποιεί τοσούτο κέρδος, είτε αμέσως είτε εμμέσως, το οποίον εν σχέσει προς τ ο υπό του ενοικιαστού πληρωμένον ενοίκιον είναι παραλόγως • δυσανάλογον και τ ο Δικαστήριον θεωρεί λογικήν την έκδοσιν τοιαύτης αποφάσεως ή τοιούτου διατάγματος». And inEnglish itmaybe translated asfollows:- 25 «Where the tenant,by taking in lodgers or by subletting or otherwise partingwith thepossession of thewhole oranypart of thedwelling house orbusiness premises, ismaking a profit, whether directly orindirectly,which,having regard totherent paid by thetenant,isunreasonable, andtheCourtconsidersit reasonable togivesuch Judgment ormakesuch order». The appellants, by their defence, raised certain objections 30 including,interalia,thepointthatthecase did notcomewithinthe ambit of either the Rent Control Law 1975 (Law 36/75) or the Rent Control Law 1983 (Law 23/83). They also alleged thatthe definitions of thewords ins.2 of the said Lawsdonotapply tothe case. 35 The Rent Tribunal, with the consent of the parties, heard the objections raised preliminary to the hearing and came to he conclusionthatthecase camewithintheambitoftheRentControl Law, 1983, (Law 23/83). 267 KourrisJ. ApexLtd.v. Argyridou (1989t AnappealwastakenbythetenantsagainsttherulingoftheRent Tribunal submitting that the Rent Tribunal erroneously came to the conclusion that the provisions of the Law applied to the present case. The appellant company, called Apex Limited, on 21.9.1972, entered into a written agreement with a certain Constantinos Kouloumbris of Nicosia, and by virtue of this agreement they erected onaplotof landbelonging toKouloumbris,a department storewhich wassub-lettoWoolworth Company anditisknownas «Woolworth». 5 10 It was in dispute before the Rent Tribunal and it is in dispute before uswhat the contentsoftheagreementare.The respondent maintained that she was the owner of the premises and that she leasedtotheappellantthepremisesinquestionandsoshefiledan application before the RentTribunal. 15 The appellants, on the otherhand, maintained thatthey merely leased a plot of land, upon which they erected the «Woolworth» building which would belong totheownerofthe plotofland after 30yearsand that inno waythiscase camewithin theambit ofthe RentControl Laws. 20 We have carefully examined the agreement entered into between the partiesand from itswholetenor, weare satisfied that itstermsare as follows:On 21.9.1972 the appellants entered into a written agreement with the predecessor-in-title of the respondent to lease a plot of 25 land under No. 759, situate at Nicosia, Trypiotis Quarter, sheet/ plan XXI/54.3.1 and under Registration No. 2370 on condition that they would build a building worth upwards of £100,000 and whichwould belongtotheowneroftheplotafter 30years.On the onesideoftheplotthere wasahouseofMrs.Argyridesand onthe 30 other part there were some very old buildings and the owner undertook to deliver to the appellant vacant possession and that the appellant would demolish them at their expense in order to build. The appellants proceeded and built the «Woolworth» building 35 costing at the time about £150,000 and they sub-let it to Woolworth, which was the main purpose of the contract for £3,
2. The appellants were bound to maintain the building so thatwhentheownersgetitafter30years,theywillgetabuildingin 268 IC.LR. Apex Ltd. v. Argyridou KourrisJ. good condition.The appellants would pay tothe respondents for the lease of theplotof land£50.- per monthfor thefirst two years and £125 per month from the completion of the building which was later increased to £2,000.-per year. 5 Learned counsel for the appellants in arguing the case before us, made three submissions: The first submission is that the appellants leased a plot of land and that the provisions of the Rent Control Law, 1983 do not apply to thepresent case. 10 The second submission isthatif itwere held thatthe appellants became statutory tenants under Law 36/75, again Law 23/83 does not apply to the present case because they are contractual tenants. The third submission is one of unconstitutionalityto the effect 15 that Laws36/75 and 23/83 contravene Articles 23 and 26 of the Constitution. Inaccordancewith theestablished practice,we donotpropose todeal with thequestion of constitutionality (Kyriakidesv.Council for Registration of Architects,

(1966)3 C.L.R. 640) unless the 20 appellants fail intheir first and second submissions. With regard tothefirst issue, he argued thata plotof land isnot included in the definition of the word «Akiniton» (immovable property) unders.2 of Law 23/83. Hesaid that«akiniton» givenin s.2 is a «house» or a «shop» which lies within the controlled area 25 which was completed on or before the enactmentof thelaw. The definition of «akiniton» is given in s.2 of the law which reads as follows:- 30 «Άκίνητον' σημαίνει ακίνητον υπό ή προς ενοικίασιν διά κατοικίαν ή κατάστημα τ ο οποίον κείται εντός ελεγχομένης περιοχής και συνεπληρώθη προς της ημερομηνίας ενάρξεως της ισχύος τ ο υ παρόντος Νόμου». He said thatthe only reason the appellants leased the plot was toerectabuilding which willbelong tothelandlord after 30 years. 35 Appellants were notusing theplot for tradeorbusiness and it was never leased tothe appellants for being used intradeor business. He also argued that the definition of «akiniton» states that the «akiniton» was «completed» before the date of coming into 269 KourrisJ. ApexLtd.v. Argyridou

(1989)operation of the law.Hesaidwhattheappellants leasedwasonly a plot of land and there wasno question ofthe plot «completed». Further, he said that the respondent does not come within the definition of «owner» under s.2 ofthe law,because the appellants leased land and not a house or ashop. 5 Ina nutshell, he invited the Court to find that the owner of the plotisnot now the owner of the building;that what wasletwasa plotoflandwhich isnotan«immovable»withinthemeaningofs.2 of Law23/83. Inthepresentcasethereisnosub-lettingoftheplot of land because thishas disappeared on the basis of the relevant 10 contractand what isbeing sub-let isthe buildingwhichbelongs to thetenant and not to the landlord;the definition of «immovable» speaksof«completed»and«let»whichimpliesthatplotsofland do notcome under the definition of «immovable». Learned counsel for the respondent contended that from the 15 moment thebuilding wascompleted, therespondent became the owner of the building and this, in view of ss.2 and 22 of the Immovable Property (Tenure Registration and Valuation) Law, Cap. 224, which provides that buildings and fixtures erected on landbecome theproperty ofthe landlord,shesaidthatthisviewis 20 supported by the decision of the Supreme Court in the case of Stavros Hjipavlou v. Jinaro TerraCo. Ltd.,

(1982)1C.L.R. 433. ShecitedtotheCourtseveralpassagesfrom Megarry.ontheRent Acts, 10thedn.andtotwocasescitedtherein whichare Considine v. Ryan,

(1938)72 Ir. L.T.R. 80, and Gulamali Jetha v. Jadavji 25 Chhagen,

(1955)22 E.A.C.A.312.toconvince the Court thatthe building in question, although built at the expense of the appellants, it became the property of the respondents. She concluded that, once the appellants became statutory tenants under Law 36/75, they continued to be statutory tenants under 30 the Law23/83inviewof thedefinition ofstatutorytenantins.2of Law 23/83 and that the provisions of s.ll for the recovery of possession of controlled premises are available to the respondents. The agreement between the parties in this case is commonly 35 knowninEnglandasa«buildinglease»andnoprovisionismadein the Rent Control Laws about these contracts and indeed there is no statutory provision in Cyprus regulating building leases. In England, building leases are regulated by legislation and since thereisnolegislationinCyprusaboutbuildingleasessimilartothe 40 270 • C.L.R. ApexLid. v. Argyridou KourrisJ. legislation in England, the English legislation cannot be relied upon asguidanceinCyprus.Consequently, wehavetolookatthe agreement between the parties and decide whether it comes withinthe ambit of the Rent Control Law 1983 (Law23/83). J The facts of the Jinarocase (supra) differ from the facts of the present case. Inthat casethetenant leased one room standing on a plot of land and he obtained the consent of the owner to add another building to be used as a cinema, and he undertook to demolish any additions upon the determination of the lease. The 10 tenantsub-letthebuildingforaprofitandhethen wenttoSpain to establish himself there permanently and the Court decided that the fact that the tenant added to the existing tenement does not disentitlethe owner from relyingon the relevant provisions of the Rent Control Law forrecovering the premises on the ground that 15 the tenant made a profit which, having regard to the rent paid by the tenant, was unreasonable. In the present case the tenant appellant leased aplotoflandwiththeobject oferecting premises thereon which would belong to the owner of the land after about 30years. 20 Again, the provisions of sections 2 and 22 of Cap. 224 which provide that any buildings and fixtures erected on land become the property of the landlord, do not operate against the tenant in view of the said agreement, but it operates only against third parties. 25 pWe think that, in view of the definition of «immovable», of the relevant Law, which includes only business premises and residential premises and not plots of land, and in view of the definition of theword«owner»,inthesame section and the words «completed» and «let»which denote a structure and not a plot of 30 land,thiscase doesnotcomewithin theambit ofthe Rent Control Law 1983 (Law23/83). We have no doubt in our mind that the legislator intended to afford protection to tenants of premises only. The object of the rent restriction isto protect the tenant and not to confer rights to 35 the owners, if the argument of learned counsel for the applicant would stand, then one who leased a plot of land and erected thereon abuildingworththousands oreven millionsofpounds,in circumstancessuch asthepresent, then he(landlord) could apply totheCourt undertheprovisionsoftheRentControlLawtohave 40 thetenantevicted onthegroundthatheintendstodemolishitand 271 Kourris J. Apex Ltd. v. Argyridou

(1989)build thereon another building. Certainly that was not the intention of the legislator. We conclude thatthe contract entered intobetween the parties leaves no room for doubt that the appellant leased a plot of land onwhichhe erected abuilding,andthatthebuildingforallintents 5 and purposes belongs to the tenant and not to the owner for exploitation, use or occupation purposes. The owner of the land will be entitled to possess it upon the expiry of the agreement, albeithe isthe owner of thebuildingagainst third parties For all the above reasons, we conclude that this case do^s not 10 come within the ambit of the Rent Control Law 1983,nor within theambit of the Rent Restriction Law, No.36/75. Inviewofthedecision ofthe firstsumbissionoflearned counsel for the appellants, which disposes of this appeal, we do not propose to examine the second and third submission made by 15 counsel. The appeal is,therefore, allowed and wesetaside the ruling ot the Rent Tribunal of Nicosia. Respondent to pay costs of this appeal. Appeal allowed withcosts. 20 ,272