The Ceylon Turf Club V. The Colombo Municipal Council

1934   Present  : Macdonell C.J. and Drieberg J.

THE CEYLON TURF CLUB v. THE COLOMBO
MUNICIPAL COUNCIL.

144-D. C. Colombo, 36,953.

Assessment-Premises of Ceylon Turf Club-Basis of assessment-Value of premises to a hypothetical tenant as a racecourse-Revenue or profit basis-Objection to assessment-Sufficiency-Ordinance No. 6 of 1910, s. 117 (2).

Where the plaintiff, the Ceylon Turf Club, lodged a written objection to an assessment under section 117 (4) of the Municipal Councils Ordinance, viz., that the annual value was excessive and should be a specified lower amount,-

Held, the objection was sufficient to comply with the requirements of sections 117 and 124 of the Ordinance.

The annual value of the premises of the Ceylon Turf Club should be determined on the basis that the property to be rated is a racecourse as a going concern and on what a hypothetical tenant would pay as rent for the property, intending to use it as a racecourse.

Anything necessary for the repair, maintenance, and upkeep of the racecourse it would be the landlord's duty to provide as part of its equipment and would be part of the property to be rated.

The property would have to be rated on the revenue or profits basis.

The plaintiff Club would have to be considered as itself a possible tenant of its own enterprise in estimating what rent a tenant would pay.

In computing the rent, allowance must be made for rates and taxes due by the tenant, interest on capital required by him, and the profits which he may expect to realize on the undertaking.

THE plaintiffs, as trustees of the Ceylon Turf Club, instituted this action against the defendant, the Municipal Council, Colombo, praying that the annual value of the Club's premises be reduced from Rs. 364,000 to Rs. 295,000. Under the Municipal Councils Ordinance the defendant caused the premises of the Club to be assessed for the year 1929 at an annual value of Rs. 370,000 and gave notice of the assessment to plaintiffs on February 7, 1929. The plaintiffs on March 4, 1929, furnished to the defendant a statement in writing of their grounds of objection, viz., that the assessment was excessive and that the annual value should be Rs. 265,500. The Chairman of the Council held an inquiry under section 117 (6) of the Ordinance and as a result reduced the annual value to Rs. 364,000.

The learned District Judge dismissed the action on a preliminary objection that the plaintiffs had not furnished adequate grounds of objection under section 117 of the Ordinance. He also held that the valuation was not excessive and that the action should be dismissed on that ground too.

H. V. Perera (with him J. R. V. Ferdinands) .-The District Judge was wrong in dismissing the action on the preliminary point that the action was not maintainable as the plaintiff had not lodged a sufficient " written objection to the assessment " The Club did not merely object

simpliciter; the Club stated the ground of its objection, to wit, " on the ground of its being excessive and not in accordance with the actual annual value thereof"; that is a sufficient specific ground susceptible of one meaning only. The District Judge has confused " grounds for objections " and "reasons for the grounds of objection"; to say that the assessment is " excessive " is " a ground of objection"; if the objection proceeded to add that the rental of the premises was only so many rupees then he would be giving a reason, a fact to support his " ground of objection ".

Both parties are agreed that the tenement in question is to be rated on the revenue or profits basis and the problem then is to try to ascertain the rent which a hypothetical tenant would pay, having regard to the definition of the term " annual value " in the Ordinance. The respondent seeks to maintain that the tenement to be rated is the racecourse as a going concern intended to be used as a

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