Lee Lai Bing v. Ng Yu and Others

DCCJ009812/1981

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT KOWLOON

CIVIL JURISDICTION

ACTION NO. 9812 OF 1981

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Coram: His Honour Judge Downey

Date: 7 June 1982

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RULING

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1. On the 25th August 1981, the plaintiff ("the landlord")  issued a writ seeking possession of certain premises comprised in a domestic tenancy, to which Part II of the Landlord and Tenant (Consolida-tion) Ordinance (Cap 7) applies, on the ground that, in breach of section 53(2)(e), the 1st Defendant ("the tenant") had: -

"subletted the whole or part [thereof] on a date unknown to the 2nd, 3rd, 4th and 5th Defendants without the express or implied consent or consent in writing of the Plaintiff."

Although the tenant has not filed any defence, no application has yet been made for judgment to be entered against him in default.  The other defendants ("the sub-tenants") filed defences in September 1981,   which were later amended pursuant to an order of the Court dated the 16th November 1981. On the 28th September 1981, the plaintiff applied for a date to be fixed for the trial of this action. The action was put on the running list and eventually warned for trial on the 1st June 1982. Notice of this date of hearing was served on all parties, including the tenant, who did not appear and was not represented at the hearing.

2. Upon the case being called, Miss Eu, appearing on behalf of the landlord, and Mr. Eccleton, representing the sub-tenants, indicated their desire that I should rule on a preliminary issue, viz., whether these proceedings were governed by the "new law", i.e. the provisions of section 36 of the Landlord and Tenant (Consolidation)(Amendment)(No. 2) Ordinance 1981 (Ord. No.76/81), or the "old law", i.e. the provisions of section 53(2) (a) of Cap 7 in force at the date of the issue of the writ. According to the "new law", a sub-letting by the tenant is only a ground for the Court making an order for possession if it is "in breach of the contractual tenancy". Under the "old law" the Court was empowered to make an order for possession if the subletting was "without the consent in writing of the landlord", notwithstanding that such sub-letting would not be in breach of the contractual tenancy. Miss Eu conceded that, if the "new law" applied in this case she could not show that the subletting in question was "in breach of the contractual tenancy." I take that as a concession that if I should rule against her submissions, the present proceeding must be dismissed.

3. I am indebted to Miss Eu and Mr. Eccleton for their very able and clear arguments on this important and complicated issue, and I especially admire the skill with which they grasped the details of Director of Public Works and anor v. Ho Po Sang [1961] HKLR 308, [1961] A C. 901, which I discovered during the short mid-morning break and sprang on them at short notice. Although that authority, which does not seem to have been cited in other cases to which I have been referred, offers some guidance on what is and is not an accrued right, it does not provide an easy or immediate solution to the specific question before me.

4. Miss Eu relied heavily on the recent decision of the Court of Appeal in Ngai Sau Yin v. Henry Chue Kwok Keung  . Civ. App. No. 30 of 1982; 7th May 1982, in support of her contention that the plaintiff had acquired an accrued statutory right to possession on the date when the writ was issued, which had not been taken away or affected by section 36 of the amending Ordinance, which came into operation on the 19th December 1981. That case concerned a very different issue, viz., whether, in consequence of certain provisions of the amending legislation, the landlord of premises let under a periodic tenancy had to prove that he had served a notice to quit before issuing his writ, seeking possession of the premises under section 53(2)(b) of Cap 7. The Court of Appeal was not concerned with, and did not consider, the effect of the amendments to section 53(2) of Cap 7, either generally or in relation to pending proceedings. In particular, it was not concerned with sub-letting by tenants or the legal position of sub-tenants. Although subsections (5), (6) and (6A) are mentioned in the judgments, they are nowhere discussed, and do not appear to have formed any part in the process of reasoning which led to the final decision or any conclusions in that case. The case was concerned with what, if any, steps must be taken by a landlord, with a view to obtaining an order for possession, before issuing his writ, and not with what he must subsequently establish in order to obtain an order.

5. Despite these significant and obvious differences, it is not open to me to treat all of the various propositions of law to be found it the judgments as obiter dicta. In so far as any of them form part of the ratio decidendi of that case, they are clearly binding upon me, and must be applied by me,  if they are decisive of the issue before me, or constitute a necessary step towards a proper resolution thereof. It is an essential part of Miss Eu's argument that the plaintiff in this case had a right to obtain an order for possession prior to the date when the writ was issued, because the tenant had previously sublet the premises, or parts thereof, without the written consent of the plaintiff. By their various Defences, the sub-tenants have admitted that the sublettings took place between July 1974 and January 1978. The plaintiff's right, so the argument continues, crystallised when the writ was issued and thereupon became an accrued right, which could not, by reason of section 23(c) of the Interpretation and General Clauses Ordinance (Cap 1), be affected by the provisions of Ordinance No. 76/81, in the absence of a contrary intention. Miss Eu further submitted that there was no clear indication that the legislature intended the amendment to section 53(2)(e) to have any retrospective effect or to affect accrued rights.

6. I have given very careful consideration to the judgments in Ngai Sau Ying v. Henry Chue Kwok Keung, supra.  That case decided that the landlord's existing right to apply to the Court for an order of possession, without previously determining the contractual tenancy by notice to quit, became an accrued right when the writ was issued. It also decided that there was no clear indication in the amending legislation of an intention that its provisions should operate retrospectively to affect that accrued right. For my own part, I have some difficulty in understanding the second reason for dismissing the appeal, since the court. does not appear to have considered why the legislature thought it necessary to enact section 52(1C) at all, if it was not intended that the Ordinance should operate retrospectively. However, the fact that the Court was unable to find a contrary intention to take away the accrued right in that case, does not mean that such contrary intention cannot be found elsewhere in the Ordinance in relation to the plaintiff's rights in the case before me. Although the second reason was probably sufficient to dismiss the appeal, I think that the other proposition of law, i .e., that a landlord's existing statutory right to an order for possession becomes an accrued right once the writ is issued, was an essential step in the court's reasoning and, accordingly, forms part of the ratio decid endi of the case which I must follow.  I am bound, by our doctrine of stare decisis to apply that proposition of law to the circumstances of the case before me, with the result that I must accept Miss Eu's submission that the plaintiff's existing right to possession, because the tenant had sublet without the plaintiff's consent in writing, became an accrued right when the writ was issued.

7. I am not, however, bound by anything said in that case in relation to Miss Eu's further submission. As I have indicated, the Court of Appeal was not concerned with, and did not, therefore, consider, the provisions of the Ordinance dealing with sub-letting and subtenants. I must, therefore, turn to the words used by the legislature to see whether, expressly or by necessary intendment, it has shown an intention that these amendments are to apply to tenancies which were the subject of pending proceedings. If such an intention is clearly shown, it must follow that the plaintiff's rights, whether existing or accrued, are affected by the amendments.

8. Mr. Eccleton submitted that such an intention is clearly to be found in section 53(2)(e); which now provides that the Court shall not make an order for possession "unless it is satisfied that -

(e)   the tenant -

Mr. Eccleton submitted that the retention of the words I have underlined shows a clear intention that the amendment is to have retrospective effect. He submitted that its effect is to give a lawful status to what would have been unlawful before the amending Ordinance was passed, namely, all sub-tenancies entered into without the written consent of the landlord between the 14th December 1973 (or 18th December 1979) and the 18th December 1981, including those which were the subject of pending proceedings.

9. In my view, these submissions are well-founded. If the legislature did not intend the amendment to have retrospective effect, it would have been necessary to make more substantial amendments to section 53(2)(e) than merely substituting "in breach of the contractual tenancy" for the words in the earlier legislation. When enacting Ordinance No. 76/81, the legislature must have known that a considerable number of such former tenancies and sub-tenancies were already the subject of pending proceedings. One of the reasons for the proposal to transfer jurisdiction from the District Court to the Lands Tribunal was the ever-increasing back-log of cases awaiting trial! If it had intended to withhold the greater protection and security, which is now clearly given to past and future sub-lettings of premises governed by Part II of Cap 7, from those tenants and sub-tenants who had received notice of writs issued by their landlords prior to the enactment of Ordinance No. 76/81, the legislature would surely have said so, by adding a short and simple proviso to section 53(2)(e) of Cap 7, as now amended.

10. I have not overlooked the possible counter-argument that a "short and simple proviso" is not necessary, because section 23(c) of Cap 1 operates to preserve accrued rights and as a general indication that pending proceedings are not to be affected by subsequent amendments. But, the provisions of Cap 1 are always subject to a contrary intention being found in the particular Ordinance under consideration. In my view, the legislature has shown a contrary intention by retaining the words I have underlined, whilst altering the basis for making an order from absence of written consent to breach of the contractual tenancy. At least, the retained words are capable of being construed as a contrary intention. The addition of a "short and simple proviso", to the effect that proceedings. commenced before the 19th December 1981 should not be affected by the amendment, would have served as an indication that the legislature did not intend the retained words to be construed as an indication of an intention contrary to section 23(c) of Cap 1.

11. The question of law now before me can be approached in another way. Alt tough Part II of Cap 7 is mainly, but riot exclusively, concerned with providing security of tenure for tenants and sub-tenants, the effect of the recent amendment d section 53(2)(e) is, in my view, to validate sub-lettings, created or entered into after the relevant dates, from the moment of their creation. The legislature has not confined the greater security or protection, which it clearly intends tenants and subtenants should enjoy, to those who were occupying premises governed by Part II on or after the 19th December 1981. It has extended its protection to the entire period of the sub-tenancy. The legislature's objectives can only be achieved if the provisions in question are construed as having retrospective effect, and as divesting landlords of rights acquired or accrued under earlier legislation.

12. Although I consider that the words of section 53(2)(e), as now amended, contain a clear indication of a contrary intention sufficient to oust section 23(c) of Cap 1, I have not overlooked the principle that, when construing words used in a statute, the statute must be read as a whole. In this context, I consider that I should have regard to the new provisions contained in sub-sections (5), (6) and (6A) of section 53. These set out the circumstances in which the court can, or should, make orders for possession against sub-tenants. Essentially, they touch upon questions of procedure. As such, they should be regarded as having retrospective effect, since every court is bound to observe the pales of evidence and procedure in existence at the time of the hearing. This new procedure is to be applied, inter alia, according to whether the tenant has sublet the premises in breach of the contractual tenancy. I acknowledge that there is no obvious obstacle to applying these changes in procedure to cases where the landlord has previously sought an order against the tenant, on the old ground that he has sub-let without the written consent of the landlord, albeit without any breach of the contractual tenancy. But, when these procedural changes are introduced at the same time as the legislature makes it clear that the landlord's ground for obtaining an order for possession against his tenant must depend upon whether the subletting was in breach of the contractual tenancy, I can only assume that the legislature intended all amendments to operate retrospectively, and to require pending proceedings to be determined in accordance with the law in force at the date of the hearing.

13. Accordingly, my decision on the issue of law which the parties have invited me to frame, is that I must apply the provisions of section 53(2)(e), as now amended by section 36(c)(iv) of Ordinance No. 76/81. As the plaintiff is unable to show that any of the sublettings were in breach of the contractual tenancy, this action must be dismissed.

Representation:

Miss Audrey Eu, counsel instructed by Cheung & Chan for the plaintiff.

Mr. W.J. Eccleton, Legal Aid officers for D2, 3, 4 & 5.