The Appraiser V. Nigerian Railway Corporation (1964)

LawGlobal-Hub Lead Judgment Report

BAIRAMIAN JSC

This appeal from the High Court of Lagos relates to the mode of valuing the dwelling-houses in the three Railway compounds on the mainland of Lagos-Iddo. Apapa and Ebute Metta-under the Assessment Act (cap. 15 in the 1958 Laws of the Federation of Nigeria and Lagos. vol. I, p. 110). The Appraiser submits that each house should be valued separately as a tenement on its own, the Corporation that all the houses in one compound should be valued en bloc as one tenement. The latter view was accepted in the High Court with its implications. hence this appeal by the Appraiser.’Tenement’ is the unit of valuation in the Act, which defines it thus in section 2:

‘tenement’ means any land with or without buildings which is held or occupied as a distinct or separate holding or tenancy, or any wharf or pier in the waters of Nigeria.

‘Tenements used as dwelling-houses’ are excepted from the mode laid down for assessing the tenements occupied by the Railway Corporation (and some other bodies) in the Assessment and Rating (Public Utility Corporations) Ordinance (cap. 16, the 1958 Laws,

All overseas officers live in houses in the Railway compounds, each in what is a self-contained dwelling-house; it is part of their conditions of service that they should be provided with living quarters; but they have to pay rent, which is reckoned at so much per annum as a percentage on salary but not exceeding £ 150. The houses are allocated by the Corporation, but while in occupation an employee has all the privileges of any ordinary tenant. He must, however, vacate his house when he ceases to be in the Corporations employ, or goes on transfer or on leave.

The judgement under appeal has this note of argument:

‘Mr David, for the appraiser, contends that each dwelling-house is a tenement within the meaning of the Assessment Ordinance. He argues that there is a letting of each dwelling-house as a separate tenancy, because each dwelling is exclusively occupied by an employee with his family on payment of rent; because every occupier has the full use and enjoyment of the dwelling-house he occupies, and because there is no evidence of the control which it is alleged the Corporation exercises over the dwellings and their occupancy.

For the Corporation, Mr Atilade submits that the employees of the Corporation occupy the dwelling houses by virtue of their employment and in connection with their duties and not as tenants, and that the Corporation exercises such control over the houses and their occupation as to make the occupation by its employees its own. He contends that, in these circumstances, and having regard to the fact that all the buildings are within a well-defined area, each estate, and not each dwelling, is a tenement.’

The judgement goes on to say that the question is whether the employees occupy as tenants or whether in law their occupation is that of the Corporation, and that in the latter event whether there is one or several occupations. The judgement states that of the four ingredients of rateable occupation adopted in John Laing & Son Ltd., v. Kingswood Assessment Area Assessment Committee [1949] 1 K.B. 344, at 350 and 357-(1) actual occupation, which (2) must be exclusive for the particular purposes of the possessor, is (3) of some value or benefit to the possessor, and (4) is not for too transient a period-it is only the second that is in dispute; that occupation is not exclusive when it is subject to control and regulation by others, or where a servant is required to live in the house in order the better to do his work, in which case the occupation is in the employer: Reed v. Cottermole [19371 I K.B. (C.A.) 613.

After stating the facts given above before the excerpt of argument, the judgement goes on as follows:

‘The dwelling-houses are laid out and managed as a large housing estate with roads and other usual amenities maintained by the Corporation at its own expense. The object of the Corporation in so housing its employees is to ensure the efficient operation of the railway and the proper discharge of their duties by the employees. The employees, who comprise technicians of all sorts, must be readily available in case of emergency, and are, for that reason, housed together close to the railway. It is said also that control over, the ‘compound’ is exercised, and the cost of its upkeep and maintenance borne by the Corporation, but there is no detailed evidence of the extent of the control apart from what has been already stated.

The reasonable inferences to be drawn from the facts are that the employees are not tenants but merely licensees-they have a service occupation and that their occupation is that of their employer, the Corporation. Another reasonable inference is that the occupation of the Corporation is one and not divisible into as many dwelling-houses as there are, because the estate is managed as a single unit or holding.’

The estate meant is no doubt the one at Ebute Metta, which is about 550 acres in area and is very much the largest of the three. In effect all the dwelling-houses in it-probably more than one hundred-are one tenement. That result is contrary to the express language of section 3 of cap. 16, the Assessment and Rating (Public Utility Corporations) Ordinance, which provides that-

‘With effect from the 1st day of April, 1956, assessment in pursuance of the principal Ordinance [namely the Assessment Ordinance, cap. 15] in respect of tenements occupied by a public utility corporation, other than tenements used as dwelling-houses, shall be of the depreciated capital value of such tenements assessed as provided for in section 4 of this Ordinance.’

Section 2 of cap. 16 gives this definition:

‘dwelling-house’ means a hereditament used wholly or mainly for the purposes of a private dwelling or private dwellings, with or without any garage, outhouse, garden, compound, yard, court, forecourt or other appurtenances.

‘Hereditament’ is the unit of assessment in England. ‘Hereditament’ in the definition of dwelling-house is equated with ‘tenement’ in section 3~ and as under section 1 the two Ordinances or Acts, as they are called now, are to be read as one, it follows that each dwelling-house is a tenement and that there are as many tenements for assessment under cap. 15 (the Assessment Act) as there are dwelling-houses. On the view taken in the judgement under appeal dwelling-house means any number of dwelling-houses, and not only one hereditament or tenement, but any number of hereditaments or tenements, which is plainly impossible. There are also other provisions which make that view untenable.

The Assessment Act, cap. 15, has these definitions:

‘occupier’ means the person in occupation of the tenement in respect of which the word is used or of any part of such tenement, but does not include a lodger; ‘owner’ includes the person for the time being receiving the rent of the tenement in connection with which the word is used etc.

That is from section 2. Under section 9 when directions have been given for assessment, the appraiser must ascertain and assess the capital or annual or unimproved value, as the case may be. Under section 10 he may in the daytime enter any tenement and ask the occupier for his name and, if he is not the owner, for the name of the owner of the tenement, and call upon either to show him any receipt for rent and may-

‘(d) require the owner or occupier of any tenement actually rented to make a declaration in writing as to the yearly rent paid or payable for the same.’

he appraiser may therefore go into a Railway compound and enter House No. 1 and ask the person in occupation to tell him who the owner is and what rent he pays. That person will tell him, say, £100. If the appraiser thinks it is the fair annual value, he may adopt it; if he does not, he must assess the annual value himself: see sections 12 and 13 (c). He will go on to House No. 2 and to the other houses and do likewise. Finally he will make out his valuation list of the several tenements assessed: section 15; and if any owner or occupier is dissatisfied, he may give notice of objection: section 20. It is admitted that every employee pays rent for the house in his occupation and that it is a self-contained dwelling-house. The natural meaning of those provisions is that the appraiser shall enter in his list each dwelling-house separately with the name of the occupier and of the owner and the rent and the annual value of his estimation.

In Lagos the rate is an owners rate. Section 135 of the Lagos Local Government Act, cap. 93. adopts the definitions in section 2 of the Assessment Act, cap. 15; section 136 empowers the Town Council to levy a general rate on the capital, annual or unimproved value of the tenements in the town, and fix the rate after appropriate approval; section 138 provides that it shall be deemed to be an owners rate, which in the absence of agreement to the contrary shall be borne by the owner, and if it is paid by the occupier, he may recover it by action or deduct it from the rent; and section 140 empowers the Council to require the occupier to pay the not to the Council until the rate is paid off. For those provisions to work there must be a separate assessment of each dwelling house: if there is one assessment for all the houses en bloc in, say, the Ebute Metta compound, none of the employees can be asked to pay the rent to the Council: for the valuation list will not show the name of any occupier or any assessment for his house, but merely show the Ebute Metta Railway compound as one tenement with its annual value, and the rate will be levied on that as the unit of rating. It may be that the need to call upon the employees to pay the rate will not arise where the Railway Corporation is concerned; but what is decided as valid for the Corporation will have to be equally valid for others, and the legislation must be interpreted without regard to the particular owner.

In the record of appeal the note of Mr Davids argument before judgement refers to the Lagos Local Government Law of 1953, and states that he drew attention to the provision enabling the Council to claim the rate from the occupiers of the individual houses. In the note of Mr Atilades argument for the Corporation there is nothing in answer. At the hearing of the appeal in our Court, Mr Atilade argued that here the test was ownership and that the unit of assessment was ownership. That, with respect, is not accurate: in Law the unit of assessment is a tenement: the owner is rateable in respect of a tenement of his; ownership is the test for the primary liability to pay the rate, The judgement under appeal does not deal with the point made by Mr David under the Lagos Local Government Law or Act, as it now should be called.

The judgement also does not deal with the plain intention that each dwelling-house should be assessed as a tenement on its own; but in fairness be it noted that attention to cap. 16 does not seem to have been drawn.

There is also no discussion in the judgement of the impact of rent on the dispute. Mr Davids argument before the learned Chief Justice of Lagos was in part, that each house was separately occupied by an employee who was living in it on payment of rent, which meant a separate tenancy within the definition of ‘tenement’.

Mr Atilades answer was that the employees occupied their houses by virtue of their employment in connection with their duties. and there was no evidence on the length of occupation or period of payment; which does not deal with the point that rent is paid. And the significance of rent being paid is overlooked in the judgement.

There is, with respect, some confusion. When a servant occupies-the word is used in a neutral sense-a house belonging to his master, his occupation may be no more than a service occupancy, but there are cases in which it is a service tenancy. These labels are taken from Thompsons (Funeral Furnishers), Ltd. v. Phillips, [1945] 2 All E.R. 49. In the words of Tindal, C.J., ‘there is no inconsistency in the relation of master and servant with that of landlord and tenant’: Hughes v, Chatham Overseers (1843), 5 M. & G. 54 at p. 77; 134 E.R. 479 at p. 488. In a service occupancy the servant is not the rateable occupier. The test is whether the occupation is subservient and necessary to the service. If that test is not passed in the case of the particular servant, he is the rateable occupier as a tenant at will, even though he does not pay rent for his occupation: see Smith v. Seghill Overseers (1875) L.R. 10 Q.B. 422. It is an instructive case, and a portion of Mellor Js judgement will be quoted (at p. 428):

‘ Required means more than the master saying You must reside in one of my houses, if you come into my service. The residence must be ancillary and necessary to the performance of the servants duties; and unless he is required for that purpose to reside in the house, and not merely as an arbitrary regulation on the part of the master, I do not think that he is prevented from occupying as a tenant. Then it appears that the appellants and other workmen are only entitled to occupy the houses during the time of their service at the colliery; the occupation terminates at the time the service terminates. Still, the appellants are tenants, though not tenants for any fixed time. They occupy as tenants at will as long as they reside in the houses by arrangement between themselves and their masters … The colliery owners desire that the married workmen should reside near the works, but that does not change the relation between the parties.’

Thus a servant may be required to live in a certain house because that is essential for the performance of his duties, or merely as an arbitrary regulation on the part of his master; the latter may well be the case where the master undertakes to provide a house.

Here the Corporation, which has a duty to provide houses, does so in its compounds; but that does not decide the character of the occupancy which the employees may be having. Where a service occupancy is claimed, detailed evidence is given of duties to show that they make it essential for a particular employee or class of employees to live where they are required to do: see Hughes v. Chatham Overseers (cited above); Dobson v. Jones (1844) 5 Man. & Gr. 112 (134 E.R. 502); Smith v. Seghill Overseers (cited above). Mr Hayward, the witness for the Corporation, says in his evidence  that-

The operation of the Railway depends on the dwelling houses in order to make its officers easily accessible. It functions more efficiently to have its officers housed in easily identifiable places’.

The Court must form its own opinion; it cannot go merely by his. He is the Lands and Valuation Officer; he might as well live elsewhere. There are about 122 officers living in the compounds; about twenty-five are engineers. Learned counsel for the Corporation spoke about engineers having a service tenancy; he did not refer to any evidence on their duties and rotation of hours, or to any evidence on the duties of the other ninety-seven. In such circumstances the Corporation cannot claim to have made out a case of a service occupancy.

Smith v. Seghill Overseers shows that the fact that an employee has a house allocated to him and the fact that he must vacate it on ceasing to be an employee mean, when the evidence does not establish a service occupancy, that he is a tenant at will. In such a tenancy there is no fixed term, and either side may bring it to an end at any time. When an employee is asked to go on transfer or on leave, it is understood that he will vacate his house; nor would he wish to keep it and be liable for rent to no purpose. Those contingencies for vacating the house do not interfere with his sole enjoyment of his dwelling-house as such while in occupation: those contingencies and the enjoyment should not be confused: see Cory v. Bristow (1877) 2 App. C. 262 at 276, per Lord Hatherley. The Corporation admits that he has all the privileges of an ordinary tenant while in occupation. One of them is exclusive possession of his house as his dwelling-house. The reasons why it is said that the employees have not exclusive possession are (a) those contingencies, which are irrelevant, and (b) that they live where they do because it is essential for their duties, of which there is no evidence. There is also the significant fact that they pay rent, which raises a presumption that they are tenants.

As to rent, Mr Atilades submission is that, as the rent is sub economic, it is like less wages. His example is that one of us might give a servant less wages for living in ones yard and give him more for living in town. That overlooks the fact that the servant pays no rent for living in ones yard. Sub-economic the rent may be; still, it is rent. The point made for the chauffeur in Thompsons (Funeral Furnishers) Ltd. v. Phillips (above) was that although his employers provided the house, he was paying them ISs a week as rent, and his was therefore not a service occupancy but a service tenancy with the protection which the latter afforded. The agreement was that he should be paid ISs a week less in wages on account of his being provided with the house he was to live in as part of his duties, which were given in evidence, and as a matter of accounting machinery he was paid his wages in full and 15s was entered in the rent book: it was not a genuine case of rent. Here it is, and there is no suggestion to the contrary. The conditions of service on which an employee is engaged include a condition that he shall be provided with a house for which he shall pay rent. He accepts that condition-which means that he agrees to become his masters tenant for the house provided; and when he occupies it, he enjoys it like a tenant.

Mr Atilades submission is that the employees are licensees paying rent.

The implication is that, being licensees, they have no exclusive possession. It is adopting the view in the judgement, which, however, does not discuss the fact that rent is paid. In Reed v. Cattermole (above), on which the judgement relies, the minister occupied a manse provided by his church for which he paid no rent. Apparently that was overlooked by the learned Chief Justice of Lagos.

In the opinion of the Court the question in dispute admits of no doubt when all the factors are borne in mind. The definition of ‘dwelling-house’ in cap. 16 was apparently taken verbatim from section 74 (2) of the English Local Government Act, 1948. The Railways (Valuation for Rating) Act, 1930, has this definition in section 1 (3):

‘ Railway hereditament means, subject as herein after provided, any hereditament occupied for the purposes of the undertaking of a railway company:

Provided that no premises occupied as a dwelling house, hotel or place of public refreshment, or so let out as to be capable of separate assessment, shall be deemed to be, or to form part of, a railway hereditament. ‘

Likewise section 92(3) of the English Local Government Act, 1948, speaks of ‘no hereditament occupied. ‘ by the British Electricity Authority … other than any hereditament appearing from the valuation list to be used as a dwelling-house’. That indicates that a dwelling-house appears as a rateable hereditament in the valuation list. It would seem that the legislature of Nigeria, when the public utility corporations were set up and (he question of rating arose, used language designed to show that every dwelling-house should be assessed on its own and appear as an individual item in the valuation list. No doubt the legislature knew that the employees lived in dwelling-houses on payment of rent; apparently it. took the view that theirs was a service tenancy and every dwelling house was a tenement on its own. If the legislature had wished to have the dwelling-houses assessed en bloc as one tenement, specific provision to that effect would have been made.

In common parlance, a master cannot have it both ways-. If the servant must live in a particular place because it is essential for the performance of his duties, he is not asked to pay rent. If he is asked to pay rent for the dwelling-house he is given and is given it to enjoy like a tenant, the plain view is that he is the tenant of it in rateable occupation; and although it is not an occupiers but an owners rate in Lagos, the master is dealing with the particular dwelling-house as a distinct or separate holding or tenancy, and it is a tenement for assessment on its own. The case admitsof no doubt under the law.

It remains to add that to discuss the points of rateable occupation in regard to licensees under English law would serve no useful purpose, but only becloud the matters for decision in the present case.

The Court concludes and orders that-

(l) the Appraisers appeal be allowed, and the High Court of Lagos judgement of the 7th December, 1961, in Suit Nos. M 169 and 70/61 be set aside;

(2) that the Appraiser shall have his costs here and below, assessed in all at one hundred and ten guineas;

(3) that it be declared that every dwelling-house occupied by an employee on payment of rent in the Railway compounds at Iddo, Apapa, and Ebute Metta, shall be valued and assessed as a tenement on its own under the Assessment Act, cap. 15.

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Other Citation: (1964) LCN/1175(SC)