Ng Cheong Tong Ltd v. Shaw Theatres Hong Kong Ltd
Read the full judgment text of HCA 1973/1975 on BabelCite. This High Court CFI judgment.
1. This is an application by the Plaintiff for summary judgment for possession and mesne profits.
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HCA001973/1975
IN THE SUPREME COURT OF HONG KONG ORIGINAL JURISDICTION -----------------
----------------- Coram: Mr. Registrar Barnett in Chambers. Date of Judgment: 16th September, 1975. J. Swaine, Q.C. and R. Wong instructed by Hon & Co. for Plaintiff. C. Ching, Q.C. and P. Nguyen instructed by Fairbairn Kwok & Wang for Defendant. ----------------- DECISION ----------------- 1. This is an application by the Plaintiff for summary judgment for possession and mesne profits. 2. The Plaintiff is the owner of a cinema known as the Good View Theatre at 304 Sha Tsui Road, Now Territories. By a lease (in the statement of claim referred to as a tenancy agreement) dated 20th July, 1973 the cinema was let to the Defendant for a term of two years at a monthly rent of $12,000 (exclusive of rates) for the promises and $3,500 for certain equipment. 3. The lease was ratified (or purportedly ratified) by the Secretary for Home Affairs in pursuance of the then S. 123 (1) of the Landlord & Tenant (Consolidation) Ordinance, Cap. 7 (which I shall refer to as the Ordinance), on 17th September, 1973. 4. For the Plaintiff, Mr. Swaine restricts himself to one point, namely, that notice was not necessary to terminate the term of 2 years. He argues that clause 4(8) of the lease provides a lever that operates S. 123 of the Ordinance. However, once S. 123 had been operated and the Secretary for Home Affairs had ratified the lease, then the lease ceased to be governed by the Ordinance and became a pure contractual tenancy, while clause 4(8) of the lease became a collateral premise the breach of which gives rise to damages only. 5. Clause 4(8) of the lease reads as follows:-
6. For the Defendant, Mr. Ching contends that notice was necessary. If it was not, then he says the S.H.A. had no power to ratify the lease, the ratification was ultra vires and the lease consequently is not outside of the Ordinance. 7. As to a lease for a fixed term generally, it is agreed by both that at common law it expires by offluxion of time. However, Mr. Ching says that if both parties to such a lease make provision for notice, then they are bound by that provision as in any other type of contract. Mr. Swaine disagrees, citing a dictum, albeit obiter, of the Full Court in Ng Hon-chiu v. Tang Chi-shoung 1965 HKIR at p.37: per Huggins, J.: "It is not necessary for us to consider what might be the position if a lease expressly provided for formal notice to quit at the end of a fixed term but we think such a term could only be construed as a collateral promise, breach of which might give rise to a right to damages .......... " 8. As Mr. Ching points cut, not only was that dictum obiter but there was no question of restrictive legislation being involved. Let us look at the legislation. 9. Part V of the Ordinance, which includes sections 122 and 123, provides inter alia that a landlord shall give not less than 6 months' written notice of termination unless the tenancy is one to which Part V does not apply. Part V does apply to tenancies for a fixed term of less than 3 years, and it therefore applies to the lease in this case. However, by S.123(1), a tenancy may be excluded from the further application of Part V.
10. It is to be noted that S.123(1) only excludes the tenancy from the further application of Part V that is, the necessity for the landlord to give 6 months' notice, not from the Ordinance generally and any other protection that it might afford. 11. It is clear from the wording of S.123(1) that the object of the legislation is to protect ignorant and unrepresented parties, both landlord and tenant. Let us suppose that the owner of a small shop agrees with a customer to let the shop to him for 2 years with a provision for 3 months' notice on either side. They go to the S.H.A. and are interviewed by an officer who is presumably not legally qualified. The main point he will make to both parties is, surely, that although the law prescribes that the landlord shall give 6 months' notice to terminate the tenancy, the tenant will only be entitled to receive 3 months' notice if the agreement is ratified. It is unlikely in the extreme that he will launch into an explanation of offluxion of time, even if he is aware of such a rule. It is even less likely that he will talk about collateral promises. There is no doubt that the tenant will leave the interview in the full expectation that he will receive 3 months' notice in due course. Subsequently, the tenant would be extremely irate if the landlord appeared in the shop 2 years later demanding possession, no notice having been given. Justifiably he would be annoyed and justifiably he would have a grievance against the Secretary for Home Affairs if what Mr. Swaine says is correct, namely, that the landlord was not under any obligation at law to serve notice. 12. Surely the legislature never intended such a situation. I am confident that it did not and that it has not created such a situation. The clear intention of the legislature in Part V of the Ordinance is that, in respect of tenancies to which that Part applies, the landlord shall give 6 months' notice of termination, save that where the parties have agreed for shorter notice and where the statutory authority, the Secretary for Home Affairs, is satisfied that the parties understand what they are doing, then the landlord need not give 6 months' notice in accordance with Part V but shall anyway give the notice agreed upon. 13. No argument on this legislation having been directed to the Full Court in Ng's case, I do not feel obliged to follow the persuasive dictum of the Court. In my opinion, the common law rule does not apply in the present case. 14. Mr. Swaine rightly conceded that clause 4(8) of the lease is a provision for shorter notice. That being so, I find that the lease was properly ratified and it follows from what I have already said that the notice provided for in clause 4(8) should have been given by the Plaintiff. It matters not that both parties were at all times large incorporated bodies legally advised. 15. The Plaintiff's application for judgment is accordingly dismissed. 16. Dated the 16th day of September, 1975.
Representation: J. Swaine, Q.C. and R. Wong instructed by Hon & Co. for Plaintiff. C. Ching, Q.C. and P. Nguyen instructed by Fairbairn Kwok & Wang for Defendant. |