Sang Fat Company Ltd v Rajlal Aodhora
| Jurisdiction | UK Non-devolved |
| Judge | Lord Walker of Gestingthorpe |
| Judgment Date | 21 January 2003 |
| Neutral Citation | [2003] UKPC 4 |
| Docket Number | Appeal No. 87 of 2001 |
| Court | Privy Council |
| Date | 21 January 2003 |
[2003] UKPC 4
Privy Council
Present at the hearing:-
Lord Bingham of Cornhill
Lord Hoffmann
Lord Hutton
Lord Walker of Gestingthorpe
Sir Martin Nourse
On 18 July 1986 the appellant Sang Fat Co Ltd ("the tenant") entered into a written agreement in the French language with the respondent Rajlall Aodhora ("the landlord"). The property let to the tenant was at Sivananda Street, Mahebourg. It was described (in clause 4) as comprising three buildings and an open space (60 feet by 90 feet) on which the landlord would be able to build if he wished. The three buildings were described as the first building made from wood with a roof of iron sheets, 50 feet by 46 feet; the second building made of stone, with a roof of iron sheets; and (close to the second building) a third small building housing toilets.
Clauses 1 to 3 And 5 to 7 of the agreement provided (in translation) as follows:
"(1) The present lease is made for a period of three years, renewable thereafter.
(2) The tenant rents the building for the purposes of a hotel business including a restaurant and a boarding house.
(3) The costs of all repairs shall be borne by the tenant.
(5) The company shall enjoy the above mentioned buildings as it so wishes.
(6) The rent has been fixed at 2,000 rupees payable at the end of each month, as from the month of September.
(7) The company shall have the rights to innovate or repair in wood the buildings for the purpose of improvement."
Clause 7 incorporates an agreed correction of the translation in the record.
There was some evidence (though no findings were made below) that the premises were in a poor state of repair at the time of the letting. The tenant ran the premises under the name of "Le Vacancier" and claimed to have spent over Rs300,000 on refurbishing them. It appears that from the first relations between the landlord and the tenant were unfriendly. In 1987 the landlord was held to be in contempt of court after an incident in which he attempted to evict the tenant without a court order. In 1989 the landlord took proceedings to increase the monthly rent, and it was increased to Rs3,000.
On 3 August 1991 there was a serious fire at the premises. There was a dispute about the exact extent of the damage but it is now common ground that the main building was either completely or almost completely destroyed (at one stage the tenant was contending that two rooms, including one used for washing up, survived); but that the other two buildings were substantially undamaged.
There was also a dispute, which is no longer a live issue, as to the use to which the buildings were put immediately before the fire. The landlord's case was that the first building was used as a boarding house and restaurant, and that the second building was a garage, used as a store. The tenant's case was that the first building was a boarding house with a residents' dining room (but no kitchen) and that the second building was a restaurant. The landlord's case was that it was only after the fire that the tenanttried, by hasty and unauthorised buildings operations, to re-establish what was left of the business in the second building.
On 10 September 1991 the landlord's attorney served notice on the tenant stating that the main building had been completely destroyed by fire and that the tenant was carrying out work on the garage. The notice required the tenant to stop work at once and to vacate the premises by 30 September 1991 at latest. The tenant did not comply with this notice. There was evidence that he continued with building work and carried on business at the second building.
In these circumstances the landlord on 21 September 1991 applied to the Supreme Court of Mauritius for the issue of a writ in the nature of an interlocutory injunction to restrain the tenant from continuing his building work on what was referred to as the garage and from opening a restaurant there. On 26 November 1991 counsel for the tenant gave an undertaking in respect of building works. It was also agreed that there should be an official inspection (aconstat) conducted by an usher of the Supreme Court. Three inspections took place in November and December 1991 and February 1992. The tenant's undertakings were continued, but the landlord contended that they were repeatedly breached. This led to another round of contempt of court proceedings, this time by the landlord against the tenant.
While these proceedings were pending in the Supreme Court the landlord on 7 January 1992 commenced proceedings with aproecipe in the District Court of Mahebourg. He pleaded that the effect of the fire was that the object of the lease had been destroyed, and that the tenant, by converting the garage into a restaurant, and by making structural alterations and additions, had abused his enjoyment (abus de jouissance) and was in breach of the tenancy agreement. He claimed a declaration that the tenancy was at an end; orders that the tenant pull down his building works, restore the garage and vacate the premises; and damages of Rs10,000.
The landlord's claim that the tenancy was at an end was based on article 1722 of the Code Civil, which is in the following terms:-
"Si, pendant la durée du bail, la chose louée est détruite en totalité par cas fortuit, le bail est résilié de plein droit; si elle n'est détruite qu'en partie, le preneur peut, suivant les circonstances demander ou une diminuition du prix, ou la résiliation même du bail. Dans l'un et l'autre cas, il n'y a lieu à aucun dédommagement."
English translation of Article 1722 Code Civil Mauricien (CCM):
"If during the currency of the lease, the thing leased is totally destroyed by accident, the lease is automatically rescinded. If it is destroyed in part, the lessee may, depending on the circumstances, claim either a reduction of the rent or the rescission of the lease itself. In either case, there shall be no claim for compensation."
At a hearing on 7 April 1992 the tenant disputed the District Court's jurisdiction and also disputed the matter on the merits. The positive case put forward on behalf of the tenant was that the first building had not been wholly destroyed, that none of the buildings was a garage, and that the tenant was still running a restaurant on the demised premises.
On 16 November 1992 the district magistrate set aside the pleain limine objecting to his jurisdiction. His decision on jurisdiction was upheld on appeal by the Court of Civil Appeal, and is the first issue before their Lordships.
At a hearing on 7 February 1994 the district magistrate heard oral evidence from the usher who had conducted theconstat inspections and from the landlord. There was then an interval before a further hearing on 10 May 1995, when the district magistrate heard oral evidence from Mr Georges Ah Yan, the managing director of the tenant. He was cross-examined at some length, and was shown photographs of building works taken since the fire (in most cases at the constat inspections).
The district magistrate gave judgment a year later, on 10 May 1996. He gave a detailed summary of the pleaded issue. He stated that he had considered the evidence of both parties with the utmost care. He referred to the usher's three reports which stated that the main building had been completely destroyed, and described works which the usher had seen in progress during his three visits. These works were also shown in photographs taken by the landlord. According to the landlord the building works included a large veranda and an extension made of concrete blocks. The tenant's case was that all the work was done "au vu et au su" of the landlord and was in any case permitted by the tenancy agreement.
Having summarised the evidence and the parties' submissions the district magistrate set out his findings very shortly:-
"The report of the constat made by the usher Eddoo indicates clearly that out of the three buildings leased to the defendant, the main building has been completely destroyed. On the other hand the photographs produced indicates clearly the extent of the repairs...
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