East Africa: Court of Appeal

BALBIR SINGH GHIR S/O SANTOKH SINGH …………………………….RESPONDENT

10^TH April, 1972

The following Judgments were read:-

MUSTAFA, JA

The appellants were tenants of the respondent of certain premises in Hathi Road, Nairobi. The respondent filed a suit for the recovery of possession of those premises and the appellants resisted the claim for possession.
The appellants claimed, inter alia, the protection of the Landlord and Tenant (Shops, Hotels & Catering Establishments) Act, Cap. 301 (hereinafter called the Act), alleging that the premises were a "shop" within the meaning of the said Act. The High Court held that the premises wore not a "shop" within the meaning of the Act and decreed possession in favour of the respondent.

The sole point for decision in this appeal is whether the said premises are a "shop" within the meaning of the Act. During the trial the following facts emerged. The appellants began a furniture making business in or about 1952. It was carried on in a workshop where furniture was made and sold. Some years later the appellants leased the suit premises from the respondent for the manufacture of furniture. The appellants had a shop and show room in Ngara Road where the furniture manufactured in the suit premises was retailed and sold.
Sometimes if a large concern or a Government Department wanted furniture in bulk the sale would take place at the suit premises, but otherwise the sale of the furniture was at the shop at Ngara Road. The learned trial judge found that the suit premises were mainly used for the manufacture of furniture, not for the sale of it, and were not therefore a shop within the moaning of the Act. It will be convenient at this stage to set out the definition of a shop in the Act. A shop is defined in Sec. 2 of the Act as follows:-

“'Shop' means premises occupied wholly or mainly for the purposes of a retail or wholesale trade or business or for the purposes of rendering services for money or money's worth."

Mr. Khanna for the appellants has submitted that the learned trial judge erred in holding that the main use of the suit premises was for the manufacture of furniture, not to sell it. He submitted that the manufacture of furniture was not an end in itself; the appellants manufactured furniture in order to sell it. The manufacture, storage and sale of furniture formed an integral part of the business of the appellants. He submitted that the learned trial judge had used a wrong yardstick in singling out and isolating the element of manufacture and contrasting it with sale in coming to the conclusion that the suit premises were mainly used for the manufacture of furniture, not to sell it.

The suit premises were used to manufacture furniture to feed the retail shop at Ngara Road and would therefore be a part of the shop, and the suit premises would be "occupied wholly or mainly for the purposes of a retail trade or business". He further submitted that the word "business" has a wide meaning and would include all activities for the purposes of gaining profit or reward. He also submitted that the word "for the purposes of a retail trade or business" cannot be restricted to only sale; the words would include storage and manufacture as well.

He argued that manufacturing was only one stage in a trading or business activity. He further submitted that what the appellants did in the suit premises could also be construed as activities designed for the "purposes of rendering services for money or money's worth". He referred to the case Hirani v. Ramji Mepa & Co. (1971) E.A. 332 where the learned trial judge had held that storehouses which were situated separately from the shop promises were occupied for the purposes of a business and wore entitled to protection under the Act. He argued that by parity of reasoning the suit premises would also be so protected. In brief he submitted that the suit premises could be a shop either because (a) sales had taken place there (b) the suit premises were used to manufacture furniture to food the retail shop at Ngara Road and thus would form a part of the said retail shop or (c) the suit premises were used for the purposes of rendering services for money or money's worth.

In my opinion the definition of a "shop" in the Act has to be construed from a common sense point of view. The authorities cited by learned counsel are hardly of any assistance. I think that the learned trial judge was justified, on the evidence before him, in concluding that the suit premises were mainly used for the purposes of manufacturing furniture, not to sell it, and that they were not occupied wholly or mainly for the purpose of a retail or wholesale trade or business.
There is something termed a lease for manufacturing purposes (sec. 106 of the Indian Transfer of Property Act which applies to Kenya) and the lease here clearly was such a lease. The long title to the Act refers only to shops, hotels and catering establishments, not to factories or premises for manufacturing goods. The sales from the suit premises did not form any substantial or material part of the business; they were merely incidental and infrequent.
I am not prepared to accept the proposition that as the suit premises were used to manufacture furniture to feed the retail shop at Ngara Road they would form a part of the said shop. Such a proposition can lead to absurd results. Indeed Mr. Khanna suggested that a factory, like say the Bata Shoe Factory at Limuru, would be protected as a shop because its products are being sold through its retail shops in Nairobi. With respect that seems to me to be a fanciful argument and I reject it without hesitation. If the Legislature had wanted to protect factories it could easily have said so In the Hirani case referred to by Mr. Khanna, storehouses separated from a shop were considered as part of a shop. Perhaps storehouses have much more affinity with a shop than a factory or premises where goods are manufactured and can therefore be distinguished. As Mr. Couldrey for the respondent has pointed out the decision in that case has reached judge the high water mark and as the learned trial judge said in reference to it "a line must be drawn somewhere". It is after all a question of degree.

Assuming without deciding that the Hirani case is correctly decided I am not prepared to say that storehouses used for storing goods for a shop would be in the same category as a factory or the suit premises where furniture is manufactured. I am also of the view that "premises occupied…for the purposes of rendering services for money or money's worth" would be applicable to offices like those of advocates I accountants, manufacturers' representatives, barbers and so forth, and cannot apply to a factory or the suit premises. In my opinion the learned trial judge was right in holding that the suit premises were not a shop within the meaning of the Act and were thus not protected.

I would dismiss the appeal with costs and order that the appellants hand back possession of the suit premises to the respondent on or before 31^st May, 1972.

SPRY, V.P.

I agree, and as Lutta, J.A. also agrees, it is so ordered.

LUTTA,J .A.

I agree.