Tsiu Pik-sun and Another v. Lau Sai-wang t/a Fah Ming Co

HCA001434/1973

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

ACTION NO. 1434 OF 1973

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Coram: Li, J.

Date of Judgment: 31st January, 1974

Present: Mr. Patrick Woo (H.H. Lau and W.S. Lo) for plaintiff

Mr. Caesar Wong (Chan and Ho) for Defendant

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JUDGMENT

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1. This is an action for possession of the post-war premises, No.73B, Waterloo Road, 12th floor (hereinafter referred to as the suit premises). It is agreed that the only point in issue is whether the primary user of the suit premises at the material time was for non domestic or for domestic purposes. If it is domestic, the tenant - the defendant - will be protected despite the plaintiff's service of notice to terminate the tenancy. Section 50, sub-section 1 of the Landlord and Tenant (Consolidation) Ordinance, chapter 7 (hereinafter referred to as the Ordinance) expressly provides that section 53, sub-section 1 applies to every domestic tenancy. Section 53, sub-section 1 provides that:

"..... no tenancy or subtenancy existing on the 5th day of June, 1970 shall terminate except in certain circumstances."

Section 52, sub-section 1 of the Ordinance provides that:

"For the purposes of section 50, 'domestic tenancy' means a tenancy of premises let as a dwelling."

Sub-section 2 of section 52 of the Ordinance provides that:

"Notwithstanding the purpose for which premises were let, in determining the nature of the tenancy for the purposes of this Part, regard shall be had to the following -

Sub-section 3 of section 52 provides as follows:

"In determining whether the premises were let, or are being used, as a dwelling, the following may be taken into account -

In this case it is obvious from the exhibits the occupation permit dated 26th April, 1965 in respect of the suit premises is a domestic permit. The rental at $680 per month for an approximate floor area of 900 square feet of which the teng, or the sitting-room, takes up about 400 square feet, looks like a rental for domestic purposes.

2. There are also certain facts which are not disputed. The defendant moved in to the suit premises in 1965. At that time he lived with his parents, four brothers and one sister, a total of 8 persons in the suit premises. The defendant is the sole proprietor of the Fah Ming Company, the original business address of which was somewhere in Wongtaisin. On the 26th July, 1965, it was changed, for the purposes of business registration, to the suit premises. There was a telephone in the suit premises installed in the name of the Fah Ming Company. There was also issued by the Commissioner of Rating and Valuation a certificate dated 19th August to the effect that the primary user of the suit premises was non-domestic. However, there was another certificate issued by the Commissioner of Rating and Valuation dated the 20th September, 1972 to the effect that the primary user of the suit premises was domestic.

3. The plaintiff's evidence was that the suit premises were let to the defendant in 1965 and at that time there were about 6 or 7 persons living there. There was a bed or a bunk being put behind a curtain in the sitting-room. Indeed, it was the landlord who provided a line to hang the curtain on so as to shield the bed from the rest of the sitting-room. She used to collect rent in person up to sometime in 1971 when the defendant offered to send her the monthly rent by cheque. These cheques were sent in envelopes thereafter till 1972. She noticed that the defendant printed the address of the suit-premises on the envelope as the address of the Fah Ming Company. That put her in the inquiry. In April, 1972 she and her husband went to the suit premises to investigate. On arrival at the entrance of the building of which the suit premises occupied the 12th floor, was a sign board hanging with the name of the Fah Ming Company as shown in exhibit 9A. When they went up to the 12th floor she found that the name of Fah Ming Company was painted on the iron grille on the front door of the suit premises as in exhibit 9B. In addition, she saw drums and carton boxes near the staircase or between the staircase and the iron grille at the front door. In September, 1973 she went there again and she found that the sign board had disappeared although the company name was still printed on the iron grille. Before April, 1972 she had an occasion to go into the suit premises and she saw inside two metal desks; at least two telephones; a number of fire extinguishers being places in various parts of the sitting-room; there were brief cases on the floor and there were people coming in and out to negotiate business. In addition, she also saw goods and certain metal drums inside a room. As a result of all these and correspondence with her principal, the registered owner of the suit premises, she caused notice to be given to the defendant to terminate the tenancy in September and then in October 1972.

4. The defence evidence is this: The business was originally in Wongtaisin. It was some form of a garment business. The defendant was helping out in his cousin's factory and at the same time did some business by correspondence. The reason why he changed the business address to the suit premises the purpose of business registration was that he would like to use the suit premises as an address, business address for correspondence. He moved in with his parents and brothers and sister in 1965. But in the years that followed, his mother died in 1968 and two of his brothers left, one for America and the other for Canada. In 1969 he started an import business of fire extinguishers manufactured in Australia. Normally his goods were stored in the godown and the godown would give him free storage for 7 days as from arrival of the goods. He would effect delivery as from the godown. There was no occasion for him to use his home to store any goods. As to the sign board and the name of the company on the iron grille, the defendant said they were more advertisements. Then he said in July, 1972 he rented a room on the 4th floor of the same building for storage of the goods. The reason for him to do this was that he found the godown storage charge were going higher and that he often found that he could not effect delivery to customers quick enough after the arrival of the goods. He said that it so happened that in 1972 or thereabouts when the personnel of the Rating and Valuation Department arrived to have a look at the suit premises he had some cartons of goods inside a room as a temporary measure. The teng or the sitting-room was used by his family as a dwelling, as a genuine sitting-room and dining room and he produced exhibits 12A to C to prove that its layout and everything was that of a sitting-room. Only a few samples of these fire extinguishers were put in the sitting-room when they arrived.

5. Having heard and considered the evidence, I find as a fact that having regard to the occupation permit and the rental and the area of the suit premises obviously it was at first let for the domestic user. However, that is not the end of the case. Having regard to the evidence of the plaintiff, I accept her evidence that the goods were stored in the room or some of the goods were stored in the room and that the suit premises was used as a forwarding centre for the business of the defendant. This is so because there was a period of time between the date before April 1972 and August 1972. When the plaintiff saw goods in a room on a visit before April 1972, the Officer from the Rating and Valuation Department did not go to the suit premises - until August 1972. On both occasions, which was separated from a period of 4 months goods were found in one of the rooms - metal drums and cartons of goods. In addition, there was a sign board at the entrance advertising - as the defendant frankly admitted goods for sale. The defendant himself admitted when they moved in there was a telephone already in the suit premises of which the subscriber was the landlord. He saw fit to apply for a separate telephone in the name of the Fah Ming Company so that the telephone was entirely for commercial use. Even two telephones were not sufficient and he had to apply for an extension to that telephone of which the Fah Ming Company was a subscriber. The business registration, as I have said, had been changed to the suit premises. There was the certificate of the Department of Rating and Valuation (exhibit 4) from which there had been no appeal. For these reasons I accept the plaintiff's evidence that as from 1971, when the defendant's family has reduced in number, the defendant had changed the user from a domestic to premises business purposes. I find the defendant's explanation as to why he should pull down the sign beard at the entrance unconvincing. Obviously, he was doing all the acts after September, 1972 to try to hide the fact that he was using the suit premises for business purposes. His step to pull down the sign board was one. That was done in September, 1972. The layout was charged. The certificate from the Rating and Valuating Department - exhibit 6 - to the effect that the suit premises were used for domestic purposes was issued on the 20th September.

6. In cross-examination the defendant admitted that he rented an extra room on the 4th floor of the same building only at the beginning of 1973 and not as originally said in evidence-in-chief in July 1972. He admitted that he stored some goods in the room when the Rating and Valuation Department personnel arrived at the suit premises in August 1972. He discontinued the commercial telephone extension in September, 1972. All these can only show that the defendant was taking active steps to try to shield the fact that he was running a business as well in the suit premises since he received the notice to terminate the tenancy.

7. Having regard to these facts, as I have found them, I would have to consider whether the defendant's conduct or business in the suit premises had turned the primary user of the suit premises into that of non-domestic. My attention has been brought to the case of Shirlein Light versus WAN Bing-wong in 1971 Hong Kong Law Reports, 145. In that case, Mr. Justice Mills-Owens ruled that the premises, out of 10 persons living therein 3 or 4 persons were ladies conducted sewing activities in the day to earn some money but slept in the sitting-room in the evening, was not sufficient to turn the premises into one of non-domestic user. He also held that such user was not inconsistent with domestic tenancy. The facts in this case is certainly distinguishable from the facts of the Shirlien case. In that case, the dwellers lived in the sitting-room, they conducted business, the tenant himself did not conduct any business but his wife and the wife's sisters and sister-in-law did some form of family industry in the day time and the defendant derived no profit whatever from such industry. In other words, having regard to the whole circumstances of that case, the learned judge came to the conclusion that such activities were not inconsistent with the purpose of domestic user. In this particular case, the advertisement - namely, the sign board and the name painted on the iron grille - indicated that the firm was there in the suit premises. The commercial telephone was installed and there were goods stored in one of the rooms in the premises. The sitting-room, which covered nearly 4/9 of the suit premises, was primarily used for business. In addition, the business registration address was also that of the suit premises, I have no evidence as to the profit the defendant made from this business but he certainly must have derived some profit in that line of business for which he himself was the sole proprietor.

8. Taking all this into consideration, I have come to the conclusion that the primary user of the premises was for non-domestic at the time when the notice to terminate was issued. The subsequent acts to restore or to water-down the atmosphere of the suit premises being for non-domestic was neither here nor there. For these reasons I give judgment to the plaintiff for possession and mesne profit in the terms of paragraphs 1 and 2 of the Prayer in the plaintiff's statement of claim with costs.

Representation:

Mr. Patrick Woo (H.H. Lau and W.S. Lo) for plaintiff

Mr. Caesar Wong (Chan and Ho) for Defendant