Yin Mui-fai v. Annie Chan

CACV000045/1976

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

Date of Judgment: 24th December 1976.

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JUDGMENT

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Huggins, J.A.:

1. This is an appeal out of time, by leave of the judge, by a sub-tenant against the terms of an order whereby he was granted security of tenure under s.53(6) of the Landlord and Tenant (Consolidation) Ordinance on conditions. On 15th January 1976 judgment in default was entered in the Plaintiff's favour against the two Defendants originally named in the writ, on the ground that those Defendants were in arrears with rent payable by them. They were tenants of the mezzanine floor at No.230 Sha Tsui Road, Tsuen Wan. It was common ground that those premises formed part of an entirely new building within the meaning of s.3(1)(a) of the Landlord and Tenant (Consolidation) Ordinance in respect of which an occupation permit was issued after 16th August 1945. It was further common ground that the premises were domestic premises. On 9th June 1976 the Appellant applied to be joined as a defendant in the action and sought leave to defend. He also applied to have the judgment of 15th January 1976 set aside. The judge allowed the Appellant to be joined as a defendant but declined to set aside the judgment. Nevertheless he held that the Appellant was entitled to security of tenure but imposed the conditions that he should pay rent of 700 a month and that he should discharge all the arrears of rent owed by the original Defendants. No complaint is made as to the first condition, since the terms as to rent was one of the terms upon which he would have held from the mesne landlords if the tenancy had continued. What is contended is that the Appellant was entitled to remain in possession as the direct tenant of the head landlord without making any payment in respect of the mesne landlords' arrears of rent.

2. At first sight s.53(2) appears to lay down the circumstances in which a court shall not make an order for possession of premises, rather than circumstances in which it may make such an order, but it is clear from the terms of sub-s.(5) that the Legislature intended to confer power on the court to terminate a tenancy in the circumstances listed. Counsel for the Appellant submits that under sub-s.(5) the order made against the mesne landlords does not operate to give a right to possession as against his client and that by sub-s.(6) his client is deemed to be the direct tenant of the Plaintiff.

3. The Respondent relies upon Lord Hylton v Heal 1921 2 K.B. 438, but in my view that case is of no assistance to him. It was concerned with the meaning of the word "tenant" in a particular section of the English Rent Acts and although "tenant" may there include a sub-tenant it does not necessarily do so. It was held that the sub-tenant in the circumstances of that case was not a tenant who could have given notice to quit to the head landlord. Before us it was sought to argue that the case was authority for the proposition that where both the tenant and the sub-tenant are joined as defendants to an action it is sufficient to establish that a ground for possession exists against the tenant in order to obtain an order for possession against the sub-tenant. (In England, of course, the plaintiff would have to show also that it was reasonable to make an order against the sub-tenant, but in Hong Kong there is no requirement as to reasonableness comparable to that laid down by s. 10 of the Rent Act, 1968.) It seems to me that this interpretation is in direct conflict with the obvious intention of the Legislature as expressed in the statute. Our s. 53(6) is comparable to s. 18(2) of the English Act and it is plain that both provisions were intended to apply at least to a case where a mesne landlord had an order for possession made against him on the ground of non-payment of rent.

4. Some reference was made to s.74A of the Landlord and Tenant (Consolidation) Ordinance but the statement of claim in the action did not allege a contractual right of re-entry for non-payment of rent and that section therefore has no application.

5. The learned District Judge found authority for the imposition of conditions in Chatham Empire Theatre (1955) Ltd. v Ultrans Ltd. 1961 2 All E.R. 381. That was a case where a landlord claimed forfeiture at Common Law under the terms of a lease. Sub-lessees of part of the premises claimed relief in equity and it was held that although s. 146(4) of the Law of Property Act, 1925 gave the court a wide discretion to impose conditions it was not just in the circumstances of the case that the sub-lessees should be required to pay the arrears of rent owed in respect of the entire premises as a condition of relief: they should pay only such arrears as were referable to the part let to them. Mr. Kwok rightly points out that while s. 146 of the Law of Property Act expressly gives power to impose conditions there is no provision in the Landlord and Tenant (Consolidation) Ordinance giving power to the court to impose conditions of any kind.

6. It would seem from the terms of the judgment dated 15th January 1976 that the District Judge may have thought that s.69 of the District Court Ordinance gave him power to grant relief in a case of this sort. If he did, then with respect I think he was in error, for this was not an action to enforce "a right of re-entry or forfeiture" within the meaning of that statute and counsel for the Respondent has not sought to argue that it was.

7. I think Mr. Kwok is right when he submits that, having regard to the terms of the Ordinance, it is not necessary to set aside the judgment dated 15th January 1976: it is enough that the judge held the third named Defendant to be a lawful sub-tenant to ensure that the bailiff will not remove him from possession in execution of a judgment against the original Defendants.

8. For these reasons I would allow the appeal and strike out the condition as to the payment of arrears of rent from the order made by the District Judge.

24th December 1976.

Representation: