Ding Kwei Tsoh and Another v. Yue Wan Estates Ltd

CACV000036/1976

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Coram: Briggs, C.J., Huggins and Pickering, JJ.A.

Date of Judgment: 23rd December 1976.

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JUDGMENT

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Huggins, J.A.:

1. I have come to a different conclusion. The issue is within very narrow compass and is covered by authority, but it is submitted on behalf of the Appellant that the earlier decision in Winning Enterprises Ltd. v. Peking Restaurant Ltd. 1971 H.K.L.R. 240 ought to be overruled by this court.

2. At first sight the conclusion which found favour with my Lord in the Winning Enterprises' Case and with Trainor, J. in the court below has much to commend it. It may well be the conclusion which the Legislature in fact intended. But the question we have to decide is whether it is the right conclusion as a matter of construction of the Landlord and Tenant (Consolidation) Ordinance as it stands.

3. The question is whether the tenancy granted by the Respondent to the Appellants was one to which Part V of the Ordinance applied. It is common ground that that part would apply if the agreement contained a "provision for earlier determination ... other than for breach of any of the provisions of the agreement". What the agreement did contain was a proviso for re-entry "if the tenant .... shall become bankrupt or enter into composition or arrangement with creditors or suffer the tenant's goods to be levied on execution". Although the judge below says that counsel for the tenants would argue that this proviso "is not a provision", I do not so understand the argument: there is no doubt that a proviso for re-entry is a provision, but is it a provision of which there can be a breach? Although it is not uncommon to hear reference made to breaches of provisos for re-entry, I think that is an abuse of language. At best it is elliptical. What is meant is a breach of contract which gives rise to a right of re-entry. One would hope that the Legislature would not make use of such elliptical language, but if we are forced to the conclusion that it has done so then we must give effect to the intention so expressed.

4. But for s. 127, which also is in Part V of the Ordinance, I might have agreed that such an intention was sufficiently clear. However, that section draws a distinction between a "right or remedy arising out of any breach of condition or other term in any tenancy" and a "right or remedy arising out of any condition providing for a right of re-entry" in specified circumstances. It will suffice to mention just one of the specified circumstances, namely "the tenant [sic] suffering execution to be levied" - presumably against himself. The argument for the Respondent is that the granting of the right of re-entry by the agreement implies an undertaking by the tenants not to do that which would give rise to the right of re-entry. If that be correct we have in s.127 an extremely clumsy form of drafting, for the right of re-entry in the event of the tenants' suffering execution to be levied would itself be the right or remedy arising out of a breach of "the [implied] term in [the ] tenancy". But in my view it is not correct. A term conferring a a conditional right of re-entry cannot itself be the subject of "breach" and, as Mr. Tang says, one can have a right of re-entry upon the happening of a specified event without there being any undertaking not to allow that event to occur. It is wrong to assume the contrary, for one must imply no more than may be necessary to give the agreement itself business efficacy: we must not imply a term in order to give the legislation the efficacy: we think the Legislature may have intended. The happening of the event is the fulfilment of a condition subsequent and the effect in the present case would have been much the same as a letting "for five years or until the tenants suffer execution to be levied, whichever shall be the shorter". That, I think, clearly would not be the sort of tenancy which the Legislature intended to be excluded from Part V of the Ordinance. It is submitted by Mr. ...(illegible) that a proviso for forfeiture "is to protect rights of the landlord". So it is, since it is exercisable at the instance of the landlord, but that does not help the Respondent's case, for the power of re-entry in this agreement would protect the Respondent whether or not it was exercisable "for breach of a provision of the agreement".

5. The matter is not capable of elaboration. The provision contained in Clause 4(a) is not one for determination of the tenancy "for breach of any of the provisions of the agreement", but is one "for earlier determination of the same" in the sense that it may (not "must") lead to such earlier determination. It may, as I have said, be doubted whether the Legislature intended what it has said, but we are concerned to interpret the words of the statute as we find them.

6. I would allow the appeal.

23rd December 1976.

Representation: