[1956] EACA 27

# APPELLATE CIVIL

## Before SIR KENNETH O'CONNOR. C. J.

# SHAH BEGUM HASSANALI AND OTHERS (Appellants)

#### $\mathbf{v}$

# DAN SAUVAGE LIMITED (Respondent)

## Civil Appeal No. 88 of 1955

Landlord and tenant-Landlord and Tenant (Shops and Hotels) (Temporary Provisions) Ordinance, 1954—Retail trade or business—Auctioneer and estate agent—Premises used wholly or mainly for business—Assistance afforded by similar English statutes.

The tenant applied for and was granted a further tenancy in premises recently purchased by the landlords for their own use. The tenant was an auctioneer and estate agent, and to assist him in these occupations he had partitioned off two small offices in the suit premises. The landlords appealed.

Held $(17-4-56)$ .—(1) That a retail trade or business includes an auctioneer but not an estate agent.

(2) That whether or not premises are used wholly or mainly for one of several businesses carried on in the same premises is a question of fact to be decided on common sense lines

(3) That where the provisions of a local ordinance are different from those of an United Kingdom statute the utmost caution must be exercised when applying the latter as an aid to construction. The Court should only be guided by United Kingdom decisions<br>on the construction of an United Kingdom Act to the extent that it is in *pari materia*, or that the reasoning of the United Kingdom authorities is applicable to the words and expressions used in the Ordinance.

Cases cited: Berthelemy v. Neale, (1952) 1 A. E. R. 437; U. N. Patel & Sons Ltd. v. Eric Shirley, Civ. App. No. 13/1955; Commissioner of Stamps, Strait Settlements, v. Oei Tjong, Swan and Others, (1933) A. C. 378 (P. Ltd., Civ. App. No. 87/1955.

Cited: Leasehold Property (Temporary Provisions) Act, 1951; Shops Act, 1950.

Lean for the Appellant.

Hunter for the Respondent.

Reported by: R. H. Lownie, Esq., Resident Magistrate, Nairobi.

JUDGMENT.—This is an appeal by Shah Begum Hassanali and two others, the owners of premises in Sadler Street, Nairobi, against the order of a Nairobi Resident Magistrate directing the grant of a tenancy to the respondent, the tenant of the premises. The order was made under the provisions of Part II of the Landlord and Tenant (Shops and Hotels) (Temporary Provisions) Ordinance, 1954 (hereinafter called "the Ordinance").

The respondent company is a monthly tenant and occupies about threequarters of the ground floor of a building in Sadler Street. The respondent has been there since September, 1948. The appellant recently purchased the building. The suit premises consist of a large room, in area about 1.278 square feet. out of which the respondent has caused to be partitioned off two small offices. one approximately 90 square feet in area and the other of approximately 40 square feet. The directors of the respondent company are Mr. Dan Sauvage and his wife. Mr. Sauvage manages the business and is assisted by his wife. The business of the respondent company is that of auctioneers and estate agents. The auction business is carried on in the large room and partly in the offices. The estate agency business is carried on partly in the offices and partly in another office across the road. The estate agency business is more profitable than the auction business, but the two are interdependent. There are usually two auction sales a week, and goods for auction are received and stored in the large room. Mr. Sauvage has an auctioneer's licence. He has a trader's licence also, but does not ordinarily sell his own goods.

Subsection (1) of section 9 of the Ordinance enables an occupier under a tenancy to which section 9 applies to apply for and obtain the grant of a new tenancy. Subsection (2) of section 9, so far as relevant, is as follows:-

"(2) This section applies to a tenancy the subject of which—

(a) consists of a shop $\ldots$ ; or

(b) consists of a shop and of office accommodation occupied wholly or mainly by the tenant for the purposes of the retail trade or business carried on in the shop."

I do not think that paragraph $(c)$ of section 9 has any application to this case.

The definition of "shop" in section 2 of the Ordinance is as follows:—

"shop' means premises occupied wholly or mainly for the purpose of a retail trade or business."

I take the word "retail" to govern both "trade" and "business".

Do the suit premises consist of a "shop" as defined?

The learned Magistrate has held that the business of an estate agent is not a retail trade or business. I agree. I think the expression "retail trade or business" must be taken to refer to a trade or business in which goods are sold to members of the public (as distinct from members of the trade), or in which services are sold to members of the public as distinct from members of the trade, in conditions approximating to a sale of goods. For instance, I think the business of a hairdresser or of a restaurant would be a retail trade or business. The business of an estate agent is concerned with the sale, letting and mortgaging of land and houses. Estate agency is, I think, a business, but I do not think it could properly be described as a retail business.

The learned Magistrate held (basing himself to some extent on English authorities decided under the Leasehold Property (Temporary Provisions) Act, 1951, and the Shops Act, 1950) that the business of an auctioneer of goods who sells individual lots direct to the public is a retail business. He then went on to consider whether the premises were occupied mainly for the auction business and, applying Berthelemy v. Neale, (1952) 1 A. E. R. 437, he found, as "a tribunal of fact approaching the matter on common-sense lines", that they were. He, accordingly, held that the premises were a "shop" within the definition contained in the Ordinance.

The first three grounds of appeal are as follows:

(1) The learned Magistrate erred in law in holding that the suit premises were used by the appellant wholly or mainly for retail trade or business or

consisted of a shop within the definition contained in section 2 of the Landlord and Tenant (Shops and Hotels) (Temporary Provisions) Ordinance, 1954.

(2) The learned Magistrate erred in law in holding that the business of an auctioneer is a retail trade or business within the scope, meaning and contemplation of the Landlord and Tenant (Shops and Hotels) (Temporary Provisions) Ordinance, 1954.

(3) The learned Magistrate erred in law in adopting or applying statutory definitions of retail trade or business contained in English Acts of Parliament and in particular the Shops Acts of 1950 and 1912, to the said Landlord and Tenant (Shops and Hotels) (Temporary Provisions) Ordinance, 1954.

It will be convenient to deal with ground 3 first. I endeavoured in $U$ . $N$ . Patel and Sons Ltd. v. Eric Shirley (Civ. App. No. 13 of 1955) to set out to what extent this Court in construing the provisions of Part II of the Ordinance should be guided by the construction placed upon corresponding provisions of the Leasehold Property (Temporary Provisions) Act, 1951, by the Court of Appeal in England. The passage is: $-$

"Part II of the Ordinance is clearly derived from Part II of the English Leasehold Property (Temporary Provisions) Act, 1951, and the above-quoted provisions of sections 9 (1) and 11 (1) and (3) of the Ordinance are almost identical with sections 10 and 12 respectively of that Act. Primarily, this Court must construe the Ordinance accordingly to the language of the Ordinance itself 'for the best and safest guide to all legislation is afforded by what the legislature has itself said' (Commissioner of Stamps, Straits Settlements v. Oei Tjong Swan and others, (1933) A. C. 378 (P. C.); see also Wallace Johnson v. The King, (1940) A. C. 231, 240 (P. C.)). On the other hand, it is well settled that in colonies by whose legislature there has been passed a like enactment to an English statute, which statute has been construed by the Court of Appeal in England, the Colonial Courts should govern themselves by the construction placed upon that statute by the English Court of Appeal (Trimble v. Hill 5 A. C. 342, 345 (P. C.); M. R. M. M. N. Nadarajan Chettiar v. C. H. M. R. M. W. T. Walauwa Mahatmee and another. (1950) A. C. 481, 492).

Accordingly, while the best and safest guide to the construction of the Ordinance is to be found in an examination of the Ordinance itself, this Court may, and should, to the extent that the Leasehold Property (Temporary Provisions) Act, 1951, is in pari materia with the Ordinance, be guided by decisions upon the construction of that Act of the Court of Appeal in England."

That would apply equally to the Court below. It is to be noted that the Court should only be guided by the decisions upon the construction of the English Act to the extent that they are in pari materia with the Ordinance. Where the provisions of the English Act are different, the greatest caution must be used in applying the English decisions. A fortiori a decision in an English Act cannot be used to supplement a different definition in the Ordinance. With respect, I think that the learned Magistrate went rather beyond what is permissible when he said that it was essential to look to the English legislation from which the Ordinance was drawn in order to find out what was meant by "retail trade or business" in the Ordinance.

The definition of "shop" in the Ordinance has already been quoted. The definition of "shop" in section 20 of the Leasehold Property (Temporary Provisions) Act, 1951, is: $-$

"Shop' means premises occupied wholly for business purposes, and so occupied wholly or mainly for the purposes of a retail trade or business."

One difference between this and the Ordinance definition is that in order to be a "shop" within the Ordinance the premises need not be wholly occupied for business purposes. That difference is immaterial in the instant case. The other substantial difference (which is very material) is that whereas under the Ordinance the expression "retail trade or business" is left undefined, under the Act it has a defined meaning. The definition of "retail trade or business" under the Act is:-

"retail trade or business' has the same meaning as in the Shops Act, 1950, except that it does not include the sale of intoxicating liquor for consumption on the premises or the sale of meals or refreshments in premises which are licensed for the sale of intoxicating liquor for consumption on the premises. ... "

The definition of "retail trade or business" in the Shops Act, 1950, which is applied to the Leasehold Property (Temporary Provisions) Act, 1951, by the above definition, so far as material, is: $-$

"retail trade or business' includes the business of a barber or hairdresser, the sale of refreshments or intoxicating liquors, the business of lending books or periodicals when carried out for purposes of gain, and retail sales by auction. $\ldots$ "

It will be observed that "retail sales by auction" are expressly included in this definition and, therefore, by reference in the definition of retail trade or business in the Leasehold Property (Temporary Provisions) Act, 1951. Accordingly, premises occupied wholly for business purposes and so occupied mainly for retail sales by auction are expressly and by definition included in the definition of a "shop" in the Leasehold Property (Temporary Provisions) Act, 1951. There is, however, no such express inclusion of them in the definition of "shop" in the Ordinance.

The learned Magistrate said: "I consider that it is essential to look to the legislation from which the Ordinance was drawn in order to find out what was meant by retail trade or business." But this is only permissible to the extent that<br>the Ordinance and the Act are *in pari materia*. Here the two definitions are far from being *in pari materia* and it would be unsafe to assume because premises occupied wholly for business purposes and so occupied wholly or mainly for the purposes of retail sales by auction are expressly included in the English legislation that they are, therefore, intended to be included in the Ordinance which contains no such express words.

Neither, per contra, can it safely be assumed (as Mr. Lean argued) that because the local draftsman, having before him the definitions in the English Acts (and similar definitions in the Shop Hours Ordinance (Cap. 114)), has omitted from the Ordinance any express or referential mention of retail sales by auction, such sales are, therefore, to be taken to be excluded from what is meant by a retail business. This would be to fall into the error pointed out by their Lordships of the Judicial Committee in Commissioner of Stamps $v$ . Oei Tjong Swan (supra) at page 389:-

"The difficulty in which the learned Judges find themselves... is entirely occasioned by their approach to the problem of construction which the case presents. Instead of first considering the terms of the Ordinance itself, they have at once entered upon an elaborate comparison of its provisions with those of the Imperial... Act... and proceeded to draw<br>inferences from the variations between the Ordinance and the Imperial statute. This is a perilous course to adopt and one which certainly does not commend itself to their Lordships."

I conceive that what I have to do is to consider first what is in the Ordinance itself, without attempting to draw inferences from variations between it and the Leasehold Property (Temporary Provisions) Act, 1951, but construing the provisions of the Ordinance according to ordinary canons of construction. I should be guided by decisions of the House of Lords and Court of Appeal in England upon the construction of the Leasehold Property (Temporary Provisions) Act, 1951, to the extent that Act and the Ordinance are in pari materia, and I may consider other English authorities on the meanings and construction of words and expressions to the extent that the reasoning is applicable to the words and expressions used in the Ordinance.

Mr. Lean also contends, and I agree, that plain words are necessary to establish an intention to interfere with common law or contractual rights and that unless the suit premises are plainly covered by the relevant sections of the Ordinance, they should not be held to be within it (*Deeble v. Robinson*, (1953) 2 All. E. R. 1348, 1350).

Ground 2 of the Memorandum of Appeal alleges that the learned Magistrate erred in law in holding that the business of an auctioneer was a retail trade or business within the meaning of the Ordinance. This is the primary question in the case: if the Magistrate was wrong on this, the appeal must succeed.

In Frawley Ltd. (M. & F.) v. Ve-ri-Best Mfg. Co. Ltd., (1953) 1 A. E. R. 50 the question for decision was whether premises occupied for the purposes of the business of builders and decorators were occupied "mainly for the purposes of a retail trade or business" within the meaning of section 20 (1) of the Leasehold (Temporary Provisions) Act, 1951. It was held that as the applicants' work involved their doing the greater part of their work on their customers' property and not on their own premises they could not be considered to occupy their premises "mainly for the purposes of a retail trade or business" within the<br>meaning of section 20 (1) of the Act and, therefore, the premises were not a "shop" within that subsection.

The following passage occurs in the judgment of *Jenkins*, L. J., at page 53:—

"The expression 'retail trade' clearly connotes in its primary sense a business consisting of selling goods to members of the public (as distinct from members of the trade) who resort to the shop or premises where the business is carried on to make purchases. The expression 'business' may, I think, have a wider connotation than the expression 'trade', the latter expression being more closely linked with transactions of purchase and sale than the expression 'business'.

In the instant case what we are concerned with, as regards the large room, is premises in which is carried on a business of selling goods to members of the public (as distinct from members of the trade) who resort to the premises where the business is carried on to make purchases. Mr. Lean points out that the goods are sold by auction and not over the counter and that they are not the goods of the occupant of the premises but of his principals. He relies on Wheatley v. Smithers, (1906) 2 K. B. 321 for the proposition that an auctioneer is not a trader. Assuming that that authority is applicable to the expression "retail trade" in the Ordinance, it is certainly not applicable to the expression retail "business". Ridley, J., in his judgment in Wheatley's case says that "business" has a more extensive signification than "trade" and there are numerous other authorities to the same effect (Harris v. Amery, L. R. 1 C. P. 148, 154; Rolls v. Miller, 53 L. J. R. 101, re a Debtor, (1936) Ch. 237, 239; re a Bankruptcy Notice, 44 T. L. R. 533; and see Frawley v. Ve-ri-Best (supra)).

In my view, what is carried on in the large room in the suit premises is "a retail business" and I think that the learned Magistrate was right in so holding.

"The true test of a retail trade or business is whether or not the goods are sold direct to members of the public without the intervention of a middleman and not to the trade." (Dhanji and Govind Bros. v. Kanjee Naranji, Civil Appeal 36 of 1955, where various authorities are reviewed). It is not necessary in order to constitute a shop that there should be fittings such as counters (Turpin v. Middlesbrough Assessment Committee, (1931) A. C. 470, 475). The essential element of a shop is that people can shop in it (*Ritz Cleaners Ltd. v.* W. Middlesex Assessment Committee, (1937) 2 A. E. R. 377, that they can and do resort to it and purchase goods or services.

It is true that one would not ordinarily refer to an auction room as a shop. and if the word "shop" was left undefined an auction room might not come within it. It is unnecessary to decide this for the legislature has not left "shop" undefined. It has stated that "shop" means premises occupied wholly or mainly for the purposes of a retail trade or business. Somervell, L. J., said in the Frawley v. Ve-ri-best case (supra) that the general character of the world defined must colour the definition; but making full allowance for that principle, I must give to a statutory definition the plain, ordinary and reasonable meaning of the words used. I am of opinion that a business consisting of retail sales by auction is a retail business within the plain, ordinary and reasonable meaning of that expression I find nothing in the decision in the Frawley case or in any of the other cases cited to me which suggests the contrary. Accordingly, premises occupied wholly or mainly for the purposes of retail sales by auction are a "shop" within the meaning of the Ordinance.

The next question is whether the suit premises were used by the appellant wholly or mainly for the auction business. Ground 1 of the Memorandum of Appeal alleges that the learned Magistrate was wrong in holding that they were.

In Berthelemy v. Neale (supra), at 437 and 438, Sir Raymond Evershed, M. R., in speaking of the words occurring in the definition of "shop" in the Leasehold Property (Temporary Provisions) Ordinance, 1951, "occupied wholly or mainly for the purposes of a retail trade or business" said that the question posed was for what purposes are these premises being occupied; are they being occupied wholly or mainly for the purposes of a retail trade? The answer to that question, the learned Master of the Rolls said, was to be supplied by the tribunal of fact on common sense lines. The same question is posed by the Ordinance and it is a question of fact for the Court below to decide on common sense lines. No appeal lies to this Court under the Ordinance, on a question of fact. It is alleged, however, in grounds 4 and 5 of the Memorandum of Appeal that the Magistrate erred in law in holding that the main and proper test in deciding whether the suit premises were mainly used for retail trade or business was the area occupied by the auction side as opposed to the estate agent's side, and that he should have applied, as the main and proper test, the relative incomes derived from the two businesses. That is a question of law. It is necessary to see how the learned magistrate approached the matter. He quoted from Berthelemy v. Neale (supra) a passage (on page 438) in which the learned Master of the Rolls indicated that the fact that there might be a telephone in a tobacconist's retail shop from which the tenant carried on the business of a commission agent, deriving more profit from this than from his retail trade in tobacco, would not necessarily mean that the premises were not mainly used for a retail trade. The Master of the Rolls went on to say that no doubt the relative incomes gained by the different activities conducted on the premises was a most important (and, possibly, in some cases the most important) element for consideration, but that it was not necessarily exhaustive. Having guided himself by that quotation, the learned magistrate said:—

"I think the question should now be put this way. Are these premises used wholly or mainly for an estate agent's and valuer's business? This is much the same question as that put with regard to the commission agency in the tobacconist's.

The answer is to be supplied by the tribunal of fact on common sense lines.

I see here a large premises 90 per cent of which are quite obviously an auction room, and offices which have the appearance of being connected with the auction business. What is the common sense answer? I think that the common sense answer is that this looks like an auction room and it is an auction room. Then as I have held that an auctioneer's business is a retail business the premises are mainly used for a retail business.

As the learned Sir Raymond Evershed has said the relative incomes derived from different activities on the premises may in some cases be the most important element in deciding the case, they are not exhaustive. I do not think I should decide that these premises are mainly used for the business of estate agent and valuer because a chair, desk and telephone with A.1 as the executive force bring in more income than the remainder of the business."

That seems to me to be a decision by the tribunal of fact on common sense lines. I cannot say that it is wrong in law and I cannot interfere with it.

Accordingly, the first two grounds of appeal and grounds 4 and 5 fail.

Ground 6 of the Memorandum of Appeal is as follows: -

"The learned Magistrate erred in law in failing to hold that as the office forming portion of the suit premises which comprised a shop and office was not wholly or mainly occupied by the respondent for the purposes of retail trade or business carried on in the shop, the respondent had no right to relief in respect of the suit premises under the said Landlord and Tenant (Shops and Hotels) (Temporary Provisions) Ordinance, 1954, by virtue of the provisions of section 9, subsection 2 $(b)$ , of such Ordinance."

The words of section 9 (2) (a) and (b) have already been quoted. The magistrate dealt with the suit premises under subparagraph (a) and held that they were a "shop". The contention is that he should have applied subparagraph (b) because the premises, it is said, consisted of an auction room and office accommodation, and that, even if the auction room is a "shop", the office accommodation was not mainly used by the tenant for the purposes of the retail trade or business carried on in the auction room, but was used mainly (or most **profitably**) for the estate agency business.

I do not think that this argument is sound. In the first place, I doubt whether subsection 2 $(b)$ applies at all to the circumstances of the instant case. The section is expressed to apply to "a tenancy subject of which ... consists of a shop and of office accommodation, etc.". When these premises were let, they consisted of, as Mr. Sauvage put it, "one duka with a wooden door". He partitioned off a small floor area for use as offices in connexion with the auctioneer and the estate agency business. I am not convinced that a shop ceases to be a shop and to be occupied mainly for a retail trade or business merely because a small portion of the floor space is partitioned off as offices, in which offices the business of the shop and also another and more profitable business are carried on. It seems to me that the example of the profitable commission agency carried on in the tobacconist's shop mentioned in Berthelemy v. Neale (supra) is very much in point (see also Sher Mohamed Quereshi v. Cycle Mart and Exchange Ltd. (Civil Appeal 87 of 1955)). I incline to the view that section 9 (2) (b) applies where the subject of the tenancy is a shop and office accommodation let as such. Whether that is correct or not, paragraphs $(a)$ and $(b)$ are alternatives. If either of them applies, section 9 is applied. I agree with the learned magistrate that the premises considered as a whole consist of premises occupied wholly or mainly for the purposes of the retail business of retail sales by auction, and I think, therefore, that he was entitled to hold that they consisted of a "shop" within paragraph $(a)$ of section 9 (2). Accordingly the premises were protected. In the result, ground 6 fails.

Grounds of appeal Nos. 7 and 8 were abandoned at the hearing.

The appeal must be dismissed with costs.