Wong To and Others v. Wong Chi-chung

DCCJ008163/1972

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT KOWLOON

CIVIL JURISDICTION

ACTION NO. 8163 OF 1972

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Coram: Judge O'Connor in Court.

Date of Judgment: 24 January 1973

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JUDGMENT

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1. In Rent Increases Application 341/71, the defendant in the present case was the applicant. In that case an order for possession was made by consent of the respondent therein one LUI Ping-ng. The order was made on 28th December 1971, with a stay until 31st July 1972. There was only the one respondent. The plaintiffs in the present case were tenants of LUI Ping-ng at the time of the service of the notice to quit and the making of the consent order. They say that notice to quit was not served on them by the applicant (defendant in present case) and that as a result they are not affected by the order for possession. In the present action they seek orders declaring they are now tenants of the defendant and an injunction restraining the defendant from interfering with their quiet possession.

2. They base their claim in law on the ground that by virtue of the Rent Increases (Domestic Premises) Control Ordinance sub-tenancies of a premises within the Ordinance are not determined by a notice to quit given by the head landlord, unless S.7(3) of the Ordinance has been complied with.

3. Before considering that contention I should consider the basis of facts without which the question does not arise. Accordingly I consider whether or not S.7(3) had been complied with. Counsel for the plaintiff appears to have conceded that on the evidence the sub-section was complied with; however, I consider that in view of the pleadings and the evidence I should decide this point on the evidence and not on the concession.

4. It is also to be noted that Mr. Loong during the hearing for interlocutory injunction on 27th September stated that he did not dispute that notices to quit had been posted up but grounded his allegation in respect thereof on basis that they were not posted at the main door or entrance. He appeared to think that at the relevant time the requirement was for notices to be 'posted'. At that time the requirement was as I pointed out for them to be 'displayed'. See -

5. P.H. Foo v. TAM May-ling 1971 D.C.L.R. 26

for the distinction. However that may be it was clear at that stage that the plaintiff was not alleging failure to 'put up' (to use a neutral term) the notices on three consecutive days but that they were not located in the proper place. I think it is proper to bear that in mind.

6. The P.W.1 - one of the plaintiffs says that one evening the (P.W.2) son of the principal tenant told her there was a document outside suing his (P.W.2's) father and that witness went out and saw a notice like Exhibit 2 (which is notice to quit) stuck on the wall to the left of the door (that is to left of a person outside facing the door). She says she read the Chinese version but did not understand it and did not enquire. As to when this happened she fixed it as being the day after the P.W.2 told her his father had been sued.

7. The P.W.2 says his father moved out in August 1972 and that in July last (i.e. 1972) his father received a document like Exhibit 2 and witness saw a copy posted on wall to left of door.

8. If P.W.1 and P.W.2 are referring to the same incident their evidence is not clear as to when it occurred. On the evidence of P.W.2 it would appear to have been in July 1972, but notice to quit would have been served a year earlier. The P.W.2 was employed by a solicitors firm and is hardly likely to mistake a notice to quit. It seems to me the probable explanation of their evidence is that it was the notice to quit and that it was in July 1971, and that when P.W.2 said it was 'July last' he meant 'July last year'. Any other hypothesis does not satisfactorily fit the evidence of P.W.1 and P.W.2.

9. Accordingly on the evidence of P.W.1 and P.W.2, I am satisfied that in July 1971, notice to quit was stuck upon the wall at the entrance to the premises. True they differ from the D.W.2 as to which wall but that is a matter which I do not consider of significance, in that I am quite clear even on evidence of P.W.1 and P.W.2 that at least one notice was 'posted up' in July 1971 on the wall beside the door. Other prosecution witnesses have said they never saw any notice. Having regard to the evidence of P.W.1 and P.W.2 I do not consider the evidence of not seeing the notice as strong evidence of notice not being there.

10. The D.W.1, a solicitor's clerk gave evidence of posting up the notice to quit at 8.30 p.m. on 21st July 1971, going back on 22nd and finding it still there and posting up another copy and returning on 23rd and finding them still there and posting up another copy.

11. Certainly if his evidence is true it is direct evidence that a copy had been posted from 8.30 p.m. on 21st to some hour on 23rd. There is evidence of P.W.1 and P.W.2 of seeing a notice once and evidence of other plaintiffs' witnesses of never seeing a notice. It is to be remembered P.W.1 apparently only used the door generally for entry once a day.

12. I think the words of Bramwell, L.J. might be referred to. He said,

"It certainly may be said, therefore, that what they say cannot be untrue except they have invented it, whereas the statement (of the defendant's witnesses) may have its origin - nothing worse than this - that they do not remember it. Undoubtedly over and over again when one has to leave a case of that description to the jury, it has been pointed out that, as a matter of common charity, you ought rather to suppose that one set of witnesses have forgotten what took place than that the others have wilfully and prudently invented a story."

and he added a caveat.

13. I consider that the affirmative evidence in this case is more reliable than the negative evidence and I find that the notice to quit was posted up at the wall beside the door. In the circumstances I find that to be upon the entrance. The next question is whether accepting the evidence of the D.W.2 had the notice been 'displayed for three successive days'. There is not direct evidence of notice being there throughout three days but from the evidence I infer that it so remained.

14. The foundation of fact upon which the plaintiffs build their case are unsound and therefore their case collapses. However I think it appropriate, in case the matter goes further, that I should briefly express views on the contentions in law put forward for the plaintiffs. I do so the more readily as I am aware there are conflicting views among the District Judges as to the rights if any conferred on subtenants by the Rent Ordinance. In an application under the Ordinance the proceedings in the District Court are final with no right of appeal. I therefore welcome the opportunity to express those differences in a case where there is a right of appeal. It is obviously unsatisfactory that in a class of case not subject to appeal the trial judges are at variance as to the law.

15. As I understand it the varying views existed even under the similar 1963 Ordinance which preceded the present one. However when enacting the present one the opportunity was not taken to clarify matters. Essentially the difference between the judges is that some consider that the Rent Ordinance does not give to subtenants any substantive rights where a notice to quit is served by a head landlord. Others in varying degrees say it does give them rights and this view is expressed most strongly perhaps in:

16. LI Yit-kwei v. YUEN Koon-man 1971 D.C.L.R. 29

My approach to the Ordinance is that common law rights are not to be taken away save by express terms or by clear and necessary implication. I find it difficult to accept that the law as to privity of estate and relations between landlord tenant and sub-tenant would be altered by mere ambiguous, imprecise language which does not provide for the effects of that alteration. In my view the law as to landlord and tenant and privity of estate should not be considered altered by an Ordinance except in so far as is necessary to give the Ordinance its proper effect.

17. The arguments indicating that the Rent Ordinance did not confer benefits on sub-tenant viz-a-viz head landlord were put cogently by Mr. CHENG in:

18. LI Yit-kwei v. YUEN Koon-man supra

and are set out in the judgment. They appeal to me with the reservation that I consider a sub-tenant has a right to serve a counter-notice under S.7(6). Further I consider he has right to serve such counter-notice even if S.7(3) has not been complied with. I should mention that at least one District Judge considers that a sub-tenant has no right to serve a counter-notice save when the notice to quit has been served by the principal tenant as distinct from the head landlord. This view point holds that references to sub-tenant means viz-a-viz principal tenant.

19. However my view is that a sub-tenant can serve a counter-notice whenever premises of which he is sub-tenant are affected by a notice to quit. I take the view that the sub-tenant is not however given any substantive as distinct from procedural rights where the head landlord serves a notice to quit. The Ordinance provides a quick method by which without pleadings the question of the effectiveness of a notice to quit can be resolved. It is to be noted that not only is it intended to be a simple and quick procedure but also intended to be final without right of appeal, and provides for only a three month delay in the order for possession taking effect. It would not therefore be surprising if the legislature had considered the likely effect on this quick simple final procedure if it were after judgment to be subject to applications by persons in possession such as are dealt with in the -

20. Minet v. Johnson 1890 63 L.T. 507

21. CHAN For v. Lee Shing Land Investment Co. 1963 H.K.L.R. 499 line of cases.

22. It was I think in order to avoid the complication of such applications delaying the execution of judgment that provision was made by S. 7(3) for giving notice to sub-tenants of the notice to quit. A Minet & Johnson type application could be made whether or not S. 7(3) has been complied with but obviously if S. 7(3) has been complied with any person in possession would pretty well have the ground cut from beneath their feet in relation to such type of application. True S. 7(3) is not very well worded to give effect to this meaning, but then on any view of the Ordinance I find it difficult to construe it consistently. I would not construe S. 7(3) as in its context implying that a failure to comply with it will continue the sub-tenancies. It is to be noted that S. 7(2) states that a notice to quit shall, subject to certain subsections, take effect as if the Ordinance were not enacted. However subsection 3 of section 7 is not one of the said subsections. It appears to follow that even without S. 7(3) having been complied with a notice to quit will take effect as if the Rent Ordinance did not apply to it. Of course if it did so take effect it would terminate sub-tenancies.

23. It has been suggested that a further reason for construing the Ordinance as not giving substantive rights to sub-tenants is that sub-tenants have no right to relief against forfeiture for non-payment of the rent due from the principal tenant. It is suggested that if they are not entitled to such relief it would be surprising if they were given the same rights as the principal tenant in other respects under the Ordinance. However in my view sub-tenants have a right to relief against forfeiture for non-payment of the rent due from the principal tenant. They had such right in equity:

24. Belgravia Insurance Co., Ltd. v. Meah 1963 3W.L.R.1033

In Hong Kong, the principal tenant would have to be restored. This right appears to be given statutory recognition in S. 45 of the District Court Civil Procedure Ordinance. A similar section is S.191 of County Court's Act 1959 fell to be construed in -

25. Mathews v. Dobbins 1963 1A.E.R. 417

the head-note to which is misleading. The judgments therein do not exclude the right of an underlessee to relief indeed they appear to recognise it.

26. I should perhaps make a finding on paras. 6 and 7 of particulars of claim. The allegation therein has not been strongly pursued. I have no hesitation in finding on the evidence that there was no waiver of the notice to quit and no reletting after the notice to quit.

27. The plaintiffs claim a declaration that they are tenants of the defendant. Even if I were wrong on my views as to the position of sub-tenants when the head landlord has served notice to quit, surely on no tenable view of the Ordinance would the sub-tenant be brought into privity of estate with the head landlord. Even if the sub-tenants could resist the application and save their interests they could only do so by the tenancy of the principal tenant continuing.

28. Plaintiffs' claim dismissed.

29. Delivered in the presence of parties as before.

30. Plaintiff to pay defendant's costs on Scale 5.

31. Defendant's costs to be taxed for purposes of Legal Aid.

32. Certificate for counsel.

Representation:

Mr. Anthony P.K. Loong (Yu, Tsang & Loong) for the Plaintiffs.

Mr. K.L. Wong (K.L. Wong & Co.) for the Defendant.