Chan Lau v. Wong Sui Mai

CACV000036/1982

Landlord & tenant - claim for possession for occupation as a residence by the plaintiff - s.53 (2) (b) of Landlord & Tenant (Consolidation) Ordinance - manifestly not be just and equitable to make an order - onus on tenant to prove primary facts, not otherwise established, on balance of probabilities - then tenant must persuade judge on those facts that manifest injustice or inequity would result - lack of frankness on part of plaintiff was relevant to the finding of the primary facts but not in applying the test of manifest injustice or inequity to the facts.

BETWEEN

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Coram: Sir Alan Huggins, V.-P., Macdougall and Hunter, JJ.

Date of hearing: 28 April 1982

Date of handing down reasons for judgment 14 May 1982

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JUDGMENT

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Sir Alan Huggins, V.-P. :

1. The Landlord claimed possession of a flat under section 53(2)(b) of the landlord & Tenant (Consolidation) Ordinance. The judge was satisfied that she reasonably required the premises for occupation as a residence for herself, that the circumstances of the Tenant were not alone such as to make it manifestly unjust or inequitable to make an order for possession but that four factors relating to the Landlord tipped the scale to such an tent that

"the defendant has, on the balance of probabilities, established that in all the circumstances of this case it would manifestly not be just and equitable to grant possession to the plaintiff."

The Landlord appeals.

2. Proviso (i) to section 53 (2) (b) has caused considerable difficulties in his application. At the material time it read:

"Provided that the court shall not make an order by reason only that the circumstances of the case fall within this paragraph if -

(i) in the case of a tenancy, the tenant satisfies the court that in all the circumstances of the case it would manifestly not be just and equitable to do so;".

In the passage I have cited above from the judgment of the trial judge he correctly recognized that the onus was on the Tenant under this proviso, but he later said:

"Whether, taken together with all the other circumstances favourable to the tenant and having weighed all the circumstances favourable to the landlord, the heavy onus on the tenant has been discharged remains to be determined on the facts of each case. It is useful to remind myself too, that while the proposition now enshrined in the proviso, which the tenant has to discharge, is an exceedingly onerous one the standard of proof in respect of that now different proposition remains unaltered. It is simply for the tenant to establish that proposition on the lesser standard of the balance of probabilities."

Having regard to this it is desirable that we should analyze precisely what is involved in the discharge of the onus which is on the tenant It involves first that the tenant must, where they are not otherwise established, prove on a balance of probabilities any primary facts on which he relies for the contention that it would manifestly not be just and equitable to make an order for possession. Then he must persuade the judge that manifest injustice or inequity would result, and in Chow Wing v. Yuen Chi-hung & Another 1980, H.K.L.R. 789 the Court of Appeal adopted, with slight modification, the test laid dorm by Judge de Basto in Lusher v. Hillard 1980, H.K.D.C.L.R. 25, so that it reads:

"How is the proviso, more particularly the words: 'Manifestly not be just and equitable' to be construed? In my view, the proviso means that a tenant must satisfy a Court that, having regard to all the circumstances of the case, there are clear, cogent and impelling reasons why the making of an order for possession would result in injustice. Or, to put it in another way, if an order for possession were made, one would expect an ordinary person, apprised of all the circumstances of the case, to, so to speak, throw up his hands in dismay and exclaim: 'That cannot be right!' ".

That test excludes any balancing of the interests of the parties as a matter of probabilities at this stage. Of course there many be cases where the judge will have no doubt that great hardship would result to the tenant if an order were made but is less certain that an ordinary person would throe up his hands in dismay and exclaim 'That cannot be right!' "Luk Chor sang v. Kwok Lui Kit 1981 Civil Appeal No. 140 was such a case. There the judge said:

" the matter is evenly balanced"

and came to the conclusion that it would be manifestly unjust and inequitable to make an order. We were not persuaded that he had applied the wrong test and accepted that he was saying only that if the tenant had succeeded in discharging the onus of establishing manifest injustice and inequity he had done so only by the skin of his teeth. Unfortunately, in applying the correct test he had taken into account factors which were not relevant.

3. Here the trial judge reviewed all the circumstances and summed up as follows:

"Against this background I have come to the conclusion that in this case neither the financial position of the defendant; nor their inability to find alternative accommodation; nor the greater hardship they would suffer; would by themselves be sufficient to discharge the heavy burden under, the proviso."

Counsel are not agreed as to the proper interpretation of that unfortunately ungrammatical passage: Mr Cheung submits that the use of the word themselves shot that the judge was considering the cumulative effect of the three matters listed and points out that, if he was not, he nowhere else did consider their cumulative effect, whilst Mr. Yam contends that the judge was saying no more than that the individual effect of each of the three matters listed was not sufficient to satisfy the proviso. I think that Mr. Cheung is right and that the judge was using a shorthand form to indicate that these matters were not sufficient, individually or collectively, to satisfy the proviso.

4. The judge went on:

"However, in considering all the circumstances I must too take into account the plaintiff's circumstances. I have detailed the circumstances which support the plaintiff's claim. I also take into account the circumstances personal to her which do not typically arise in this kind of action, namely that the plaintiff is already occupying her own premises and merely wishes to move part of her household to the suit premises to improve their quality of life; that her financial position is strong enough to support her husband arid her 4 sons only one of whom is still a teenager and only one of whom is under medical disability; that on a number of issues she was less than frank to the Court. It is the cumulative effect of all these factors taken together that I must weigh."

By "all these factors" I think he must have meant the circumstances of both the Landlord and Tenant, for he had earlier said that he had to consider "all the circumstances. Nevertheless, I do not understand how the four matters listed in the passage just cites could possibly have led to manifest injustice or inequity when some of them had been mentioned as the background" against which the circumstances of the Tenant had to be considered and these circumstances of the Tenant had been held not to do so. First, the fact that the landlord was presently occupying a flat which she owned, rather than rented accommodation, could not operate unfavourably to her in relation to this issue. Secondly, it is questionable whether the fact that she ''merely wishes to move part of her household to the suit premises to improve their quality of life "- even if it mere a correct and fair statement - could by itself result in its being manifestly unjust or inequitable to make an order for possession once it was decided that the circumstances of the Tenant did not do so. In my judgment no one, viewing the evidence objectively, could say that it was a correct and fair statement. The judge appeared to accept, although he did not say so expressly, that the Plaintiff was living in a flat only 200 sq. ft. in area. It is described as being "divided into one bedroom, one living room, one kitchen and one small room". " small" is obviously a relative term. The Plaintiff is aged 65 years. In this flat there live with her her husband (aged 72 years), her husband's first wife (aged 73 years), four sons (aged 42, 26, 21 and 19 years), a daughter-in-law, a granddaughter and a nephew. In relation to the reasonable requirement issue the judge said:

"When I tool into account the large number of people living at Boat Street even after including the size and availability of the roof-top structure; ..... I was satisfied that the plaintiff's requirement was reasonable".

Having regard to the meaning of "reasonable requirement" as laid dorm in Ma Hon v. Mahtani 1981 H. K.L.R. 57 this finding is hardly compatible with the suggestion that the Plaintiff merely wished to improve their quality of life. Moreover, the eldest son is mentally unbalanced and unable to work. A medical report, which the judge does not mention either to reject it or to throw it into the balance in the Plaintiff's favour, reveals the history of the son's illness and concludes:

"The prevention of relapse in the future will be dependent on family support, compliance with medication and improved living conditions."

That must surely be a very weighty factor. The Plaintiff's flat is on the fifth floor, whilst the suit premises are only one floor up. The Plaintiff testified - and she was not challenged on the point - that one or more of the three eldest members of the Plaintiff's family - again, it is not clear which - cannot climb up the five flights of stairs. The Plaintiff herself was in court and it may be that, if and in so far as this evidence related to her, the judge thought she was exaggerating. Even so the strain of climbing many stairs on several persons of advancing years cannot be lightly dismissed. Thirdly, the financial prosperity of the landlord was not relevant to this issue: see the recent decision in Luk Chor Sang v. Kwok Lui Kit (supra). Fourthly, the lack of frankness referred to by the judge could, as it seems to me, be relevant only to the finding of the primary facts upon which he was required to decide whether the test of manifest injustice or inequity had been satisfied and was not relevant to the ultimate question whether, upon those primary facts that test had been satisfied. I will return to that in a moment. The judge said:

"I also take into account the lack of frankness by the plaintiff on a number of matters including the regularity with which her husband stayed with her; her initial refusal to recognise the photographs of the rooftop structure and her final ploy which I reject that they were photographs of her neighbour's structure; her vagueness as to where the occupants actually slept at Boat Street; the doubt that remains whether she fully disclosed her family's complete income position."

He did not indicate in what way he took account of the Plaintiff's lack of frankness on these matters. Of course the vital questions were (1) whether the husband would be living with the Plaintiff in the suit premises if an order were made (and it is clear from the fact that the judge took into account on the reasonable requirement issue the three aged of the four intended occupants that he accepted that the husband would be living there); and (2) whether the husband would be a regular occupant of the suit premises.  It was in relation to this second question that the regularity of his visits to the present family home was relevant. I take it that the judge thought his visits to the suit premises would be irregular and he was entitled to take that into account. Perhaps that is, in part, what he meant. However, the Plaintiff's lack of frankness on the other three matters mentioned could not be relevant.

5. In a passage which I have already cited the judge apparently found as a fact that the rooftop structure was part of the Plaintiff's existing home. To take her lack of frankness on this matter into account again in deciding whether, upon the primary facts, she had established that it would be manifestly unjust or inequitable to make an order was in effect to punish her for perjury and for trying to mislead the court. Her vagueness as to where the occupants of the Plaintiff's existing home "actually slept" was similarly being punished, for where they slept was of no relevance whatever once it was accepted that there was a reasonable requirement for the suit promises. Finally, any failure to disclose her family's complete financial position could likewise be of no materiality on the issue of manifest injustice and inequity: see Luk Chor Sang v. Kwok Lui Kit (supra)

6. The judge having taken into consideration in the Tenant's favour matters which ought not to have been so considered, his conclusion could not stand. We then had to decide whether to remit the case for a new trial or to apply the test of manifest injustice or inequity ourselves on the facts found by the judge.  I thought that, in the face of his opinion that the circumstances of the Tenant would not be sufficient to discharge the heavy burden under the proviso, to find that such circumstances of the Landlord as were relevant tipped the balance to the extent required for a verdict in the Tenant's favour would be perverse. Accordingly I was for allowing the appeal and entering judgment for the Plaintiff for possession.

Macdougall, J. :

7. I agree and wish to add that in my view it is plain that the Legislature has recognized that a landlord has a strong moral claim to possession of premises that belong to him. That this is so is highlighted by the distinction made by the Legislature in the proviso to section 53(2)(b) between the claim of a landlord against a tenant on the one hand and the claim of a principal tenant against a sub-tenant on the other. The onus cast on a tenant in satisfying the Tribunal that it should not makeean order for possession in favour of the landlord is much heavier than that which a sub-tenant must discharge in satisfying the Tribunal that it should not make an order for possession in favour of the principal tenant.

8. As I see it, the Legislature clearly intended that once a landlord has proved that he reasonably requires his premises for occupation as a residence for himself, his father, his mother or any son or daughter of his over the age of 18, then, unless there are wholly exceptional circumstances, he is entitled to an order for possession. A Tribunal may only take the exceptional course of refusing to make an order for possession if the tenant satisfies it that it would manifestly not be just and equitable to make such an order. This is a heavy burden that the tenant bears and it is one which is not discharged simply by establishing on the balance of probabilities the primary facts on which he relies in support of his contention that it would manifestly not be just and equitable to mace an order for possession.

9. Having proved those primary facts, the tenant must then persuade the Tribunal that manifest injustice or inequity would result if such an order were made.

10. It seems to me that all too often the distinction between proving the primary facts on the one hand and satisfying the Tribunal on the basis of those primary facts that it would manifestly not be just and equitable to make an order for possession on the other, is blurred. It is apparent from the learned Judge's reasoning in the instant case that he allowed himself to be confused over this distinction for he said:

''It is useful to remind myself too, that while the proposition now enshrined in the proviso, which the tenant has to discharge, is an exceedingly onerous one the standard of proof in respect of that now different proposition remains unaltered. (The learned Judge was here contrasting the now repealed grounds of greater hardship) ''It is simply for the tenant to establish that proposition on the lesser standard of the balance of probabilities."
(My emphasis)

11. Perhaps the learned Judge was influenced in his approach by the approval given by another division of this Court in LAM Cheung-kam v. CHEUNG Chun-tak Civ. App. No. 93 of 1981 to the test applied by another trial judge in that case. If so, it is understandable how the confusion arose in the learned trial judge's mind in the instant case The words used by the other trial judge in that case were:

"I must now consider whether the defendant, who also gave evidence, has established on the balance of probabilities that in all the circumstances it would be manifestly unjust and inequitable to make an order; or as it was put in a recent decision of the Court of Appeal whether an ordinary person would consider that in the circumstances it would be thoroughly unjust."

12. On an examination both of the balance of the judgment of the Court of Appeal in which this approach was cited with approval and of another judgment delivered in the same case it is plain that the Court made it abundantly clear that the correct test to apply is whether the tenant has satisfied the Tribunal that it would be thoroughly unjust to make an order for possession. Such a standard clearly cannot be equated with one of on the balance of probabilities Once this is realised, it should be clear that it is only in relation to proof of the primary facts on which the tenant relies for his contention that it would not be just and equitable to make an order, that the standard on the balance of probabilities applies.

13. Hunter, J. has authorised me to say that he agrees with both judgments.

14th May 1982.

Representation:

P. Cheung (Lau & Co.) for Appellant.

D. Yam (Michael Cheuk & Co.) for Respondent.