PIB v Narayan [2007] FJMC 25; Criminal Case No 1158 of 2006 (30 August 2007)

IN THE RESIDENT MAGISTRATE’S COURT
AT SUVA

Criminal Case No. 1158 of 2006

P I B

V

SHIU NARAYAN s/o Hanuman

Before Ajmal Gulab Khan Esq
Resident Magistrate

Prosecution: Mr S Raikanikoda
Accused: Mr V Maharaj

Date of Hearing: 12/6/07
Date of Judgment: 30/08/07

JUDGMENT

The accused has been charged for failing to give 12 weeks written notice to the P.I.B. of a proposed rent increase’ under the Counter Inflation Order (1996) and S30, 32 of Counter Inflation Act Cap 73.

The facts are not in dispute. The premises at 24 Namena Road were rented for $250 in April. A new tenant was let in July 2004 for $300 monthly. No notification was given to P.I.B. for the proposed increase by the landlord.

The defence relied on legal submissions and prior authorities. Both the prosecution and defence made valuable written submissions to this court for which I am grateful.

In February 2007 the secretary of P.I.B under an order restricted rentals for the defendant’s flats to - $250 being the rental for the present flat relevant to this case.

I will deal with the defence submissions seriatim.

No restriction order in force and new letting is not restricted.

The defence has relied on judgment of Kermode J in Ambika Prasad Sharma –v- P.I.B. Cr. App. 92 of 1976. In brief the court decided on counter-inflation order 1973 which had similar wording to the existing section.

In summary on the last page of the judgment Justice Kermode says

"where no restriction order has been made by the Board either specifically restricting an increase of rent payable under a particular tenancy or generally in respect of all lettings an order made by the Board under section 15 of the Act must be complied with in respect of proposed increases of rent under existing tenancies not excluded by the Act. New lettings whether of premises previously let or not are not covered by the Act unless there is a restriction order in force covering such lettings. A new letting of premises previously let at any prior time does not involve an increase of rent within the meaning of sections 14 and 15 and no notice need be given of any apparent increase of rent. Section 14(1) of the Act gives the Board power to restrict increases of rent either specifically in respect of an existing tenancy or generally in respect of all tenancies and depending on the terms of any order made there under can apply to existing lettings or any subsequent lettings of the premises. In all cases the Board must make an order or orders restricting any increases and the Minister must approve of the order in each and every case. Section 15 and any order made there under can have no application to rented premises where there is in force a restriction order. Any purported increase of rent in respect of controlled premises is a breach of the restriction order and is not a breach of an order made under section 15.

In the instant case there were no restriction orders in force affecting the appellant’s premises when he entered into two new lettings at rentals higher than he charged under prior tenancies.

These higher rentals were not "increases of rent" within the meaning of the term in the Act and he was not obliged to comply with paragraph 2 of the Counter Inflation (Application of Section 15) Order 1973. The higher rentals would have been increases within the meaning of the terms of any restriction order if there had been in force any such order restricting any increase of rent above the rent payable under the letting in existence at the time the order was made. It follows he should not have been convicted".

This court being a court of summary jurisdiction need not go into the history of legislation or the analysis of authorities.

It is suffice to state this prosecution is under counter inflation order being Legal Notice 63 of 1996.

The offence charged is failing to give notice to P.I.B. of the proposed increase in rental – a rental from $250 to $300 is an increase. Thus a notice ought to have been given by the landlord.

The question of rent restriction order in place specifically is irrelevant to whether proposed rent increase notice was given or not. A restriction order was in force and applicable to all residential premises in Fiji in 1996.

NOT EXISTING TENANCY AND ORDER NOT RETROSPECTIVE

The landlord further says the new tenant paid more and it was not an existing tenancy or a continued letting by the tenant. Also order cannot be restrospective to increase in 2004.

The case of Surend Pal Nandan –v- P.I.B. Court of Appeal decision 1983 of P164 summarizes the purpose of the Act as "the intention of the Act and others made under it; is clear. Existing rents, payable at the date of the order are ‘frozen’. If there is no such rent then payable but a tenancy is thereafter created that rent is ‘frozen’. Such rents will be referred to as ‘base rents’

The orders do not have restrospective effect. They control as on and from the date when promulgated; only base rents and, of course any permitted increase thereof. Any subsequent increase of a base rent is an offence unless the requisite notice has been given."

The legal notice in 1996 states:

"At least twelve weeks written notice shall be given to the P.I.B. of any proposed increase in any rent in respect of the letting or continued letting by any person of any premises under any tenancy to which the Act applies."

The premises when let was under a base rent restriction as stated by the court of appeal of $250. It was let and continued to be let at $300. It was not a new premises rented for the first time is not exempted in the Act.

The order would encompass the increase as one where ‘twelve weeks notice’ order would apply. I find the prosecution has sufficiently discharged its burden of proof.

ARBITRARY FIXING OF RENTAL BY P.I.B.

A further argument was raised by the defence which relates to the P.I.B. arbitrarily fixing it’s rent restriction limit when private valuations show a higher market rental for the properties e.g. the existing flat was restricted to $250 in February 2007 when a private valuer estimates it to be $450 as marked rental.

This question relates to the powers of P.I.B. under the act and its history and purpose. It would require a detailed historical analysis to determine if they are acting ‘ultravires.’ As I have stated before, Magistrates Court being a Court of Summary Jurisdiction neither has the time nor resources to deliberate upon it. It’s also an obiter. Should an occasion arise, I suggest it should be a question for the High Court to deliberate on the question for the determination of the charge in this case. I do not have to consider the question raised. It relates to power of PIB to restrict rental. But the charge relates to failure of landlord giving notice of increase.

I find the landlord guilty as charged.

REFUND OF EXCESS PAID

The Prosecution further submits that the excess rental paid of $50 per month during the existence of tenancy be refunded.

I have considered the facts of the tenancy. The tenant entered into a tenancy agreement and happily resided in the premises without complaints

Only when he was given notice to vacate as per the agreement, he chose to report to PIB and proceeded to obtain evidence of the increase in rental.

Under C.P.C. the prosecution asks for a refund of excess rental paid without notice. It does appear that the tenants were part of the agreement for an increased rental payment. I accept the decision of Judge Dyke in the case of PIB –v- Harry Lochan 45 of 1978 High Court Lautoka on appeal that the landlord should be left to bring his action under the counter inflation Act (S28), now Section 26 of revised 1986 Act. The court will then properly deal with the question of tenants part in payment of the increased rent.

No orders is made under the CPC for refund in the circumstances.

I take this opportunity to thank both prosecution and defence in providing elaborate written submissions to help me write this decision.

The landlord is found guilty as charged.

Dated this 30th day of August 2007.

Ajmal Gulab Khan
RESIDENT MAGISTRATE