Chan Lau Pao v. Fung Shui Lam

CACV000007/1973

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

CIVIL APPEAL NO.7 OF 1973

(On appeal from Original Jurisdiction Action No.1100 of 1972)

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Coram: Blair-Kerr, Huggins and McMullin, JJ.

Date of Judgment: 30th April 1973.

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JUDGMENT

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Huggins, J.:

1. This is an appeal against a judgment of Trainor, J. giving possession of premises known as 27 Tung Choi Street, ground floor and cockloft, Kowloon, to the Plaintiff and ordering the Defendant to pay to the Plaintiff $13,050 mesne profits for the period from 1st May 1972 to 31st January 1973 and thereafter mesne profits at the rate of $1,450 a calendar month on the terms set out in the order.

2. The Statement of Claim originally alleged that there was an oral agreement of tenancy but it was agreed at the hearing in the lower court that there was a written Agreement which was for a term of five years, from 1st May 1967 to 30th April 1972. It was agreed that the only issue to be decided by the learned judge was what precisely one of the terms in the Agreement meant. It was alleged by the Defendant that he was given an option to renew the tenancy at the end of the five-year term at a rent and on terms to be agreed between the Plaintiff and the Defendant. It was contended on behalf of the Plaintiff that the term in the Agreement was too uncertain to be enforceable.

3. The view of the learned judge was that this term of the Agreement was too vague, but, as we understand his judgment, he added at the end that even if the term were not too vague it created not an option but a right of pre-emption. Counsel for the Respondent has stated that he does not argue that the term would create a right of pre-emption. The words of the Agreement which are in question are as follows:

"Upon expiration of the tenancy the landlord shall be required to return the entire deposit money to the tenant. If at such time the tenant shall wish to continue renting the said ground floor and the said cockloft he must come to an agreement with the landlord in respect of the rent and of other terms and conditions before a new Tenancy Agreement is executed for the continuance of tenancy. If at the expiration of this tenancy the tenant does not agree to the terms and conditions then he may discontinue renting the said premises. In such event the tenant may deliver possession of the said premises to the landlord. However, in the event of the terms being equally acceptable to both parties, the tenant shall have the priority of renting",

and then there is a rider inserted into the Agreement adding the words:

"but consent of the landlord must be secured",

and it is that rider which, counsel for the Respondent suggests, prevents this Agreement from creating a right of pre-emption.

4. In the event it is not necessary for us - any more than it was for the learned judge - to decide whether these words could create a right of pre-emption, because, even if it did, the learned judge has found that the Plaintiff requires the premises for her own use and there would be no interference with the right of pre-emption unless there were a letting to somebody else. I would only say that if hereafter the Plaintiff should let to somebody else it may be open to the Appellant to question her right so to let.

5. The whole case before the learned judge was fought on the question whether the Agreement created an option to renew. The learned judge was referred to cases which have been cited to us, and counsel has also referred us to Brown v. Gould 1971 3 W.L.R. 334, 338. The learned judge was of opinion that the Agreement was for a "continuation" of the old tenancy and not for a new tenancy and, for my part, I have some difficulty in accepting that distinction for it seems to me that the original tenancy necessarily came to an end at the termination of the five years and that a "renewal" would in any event create a new tenancy - it was the relationship of landlord and tenant, and not the tenancy, which was to be continued - but I entirely agree with him that the terms of this Agreement were not sufficient to create an option to renew. This case came within the first of the three classes of option which were referred to by Megarry, J. in Brown v. Gould, and for that reason I would dismiss this appeal.

30th April 1973.

Representation: