Fook Luen Wah Development Co Ltd v. Commissioner of Rating & Valuation and Another

LDLA000004/1983

IN THE LANDS TRIBUNAL OF HONG KONG

Landlord and Tenant Appeal No. 4 of 1983

BETWEEN:

Coram: Before Sir Denys Roberts, President, and M.W. Phillips, Esq., Member, Lands Tribunal

Date: 12th April, 1983.

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J U D G M E N T

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Sir Denys Roberts, President:

1. This is an appeal under section 51 (8) of the Landlord and Tenant (Consolidation) Ordinance ("Cap.7"). The appellant, the Fook Luen Wah Development Company, is aggrieved by a decision of the Commissioner of Rating and Valuation, who issued a certificate under section 51(5) of Cap.7, certifying that the primary use of the premises concerned, namely No.16 Kwong Ming Street, ground floor, was domestic.

Application of Part II of Cap.7

2. It appears, though this only emerged towards the end of the hearing and remains a matter of some doubt, that application had been made in earlier and different proceedings by the appellant to the Commissioner of Rating and Valuation for a certificate that the premises concerned are excepted from the application of Part I of Cap.7. Such a certificate was issued by the Commissioner on the 5th November, 1982.

3. We were instructed by the solicitor for the appellant that, according to his instructions, this certificate was issued because there was some doubt as to whether or not the premises concerned were excepted from Part I of Cap.7, by virtue of section 3(1) para. (d), since they were premises which were untenanted for some period after the end of the war and had had to be extensively repaired before they were fit for occupation.

4. If this certificate was issued in accordance with section 3(1)(d) [and it would be useful if in future the Commissioner would indicate, in any such certificate, the paragraph under which he is issuing a certificate of exception] these premises would fall within Part II, by virtue of section 50(2) of Cap.7. This provides that, for the purposes of section 50, a post-war building means a building to which Part I of the Ordinance does not apply by virtue of section 3(1)(a) or (d). These premises, therefore, are subject to part II, which will govern any tenancy of them which is a "domestic tenancy", as defined in Part II.

Certificate of primary user

5. Two officers of the Rating and Valuation Department, whose affidavits have been put in evidence by the respondent, inspected the suit premises on 3rd January, 1983, and found them to be fully furnished with domestic furniture. They were informed, during their visit, that there were ten people living in the premises. No business registration certificate was displayed; nor was there any signboard outside the premises indicating that they were being used for any business purpose.

6. On the basis of this information, the Commissioner certified that the primary user of the premises was domestic.

7. The issue of a certificate of this nature by the Commissioner is not conclusive but, as has been decided in other cases, amounts to prima facie evidence of user, the effect of which is to shift the evidential burden to the party which alleges to the contrary.

Evidence of appellant

8. Mr. Lee Tse Choy, Chairman of the appellant company, gave evidence that his company purchased the premises in 1980 and that, when this purchase took place, one of his colleagues had informed him that the premises had been let to the respondent for business purposes. His colleague was not called to substantiate this claim by Mr. Lee.

9. The appellant's case was based on the following factors –

(1)    That the latest business telephone directory contained an entry in the name of Ngai Loy Kee, the name under which the respondent had registered his business, under the Business Registration Regulations, in 1960.

(2)    That a signboard bearing the words "Ngai Loy Kee Construction Co." was hanging outside the suit premises on the 14th November of last year, when a photographer employed by the appellant took two photographs of the premises. These, which were produced in evidence, show that such a notice board was hanging outside those premises on that date.

(3)    A certificate of registration, which was produced in evidence, dated 15th November, 1960, shows that Mr. Ngai Loy, the respondent, registered Ngai Loy Kee as the name under which he was carrying on a construction business at the suit premises as from 1st April, 1959.

(4)    Cheques issued for the payment of rent by the respondent bore the copy of the Ngai Loy Kee Construction Company. The latest of these cheques produced in evidence was dated 1st January, 1983.

Respondent's case

10. The respondent said that he had been occupying the premises for something like 25 years, though we must observe that the respondent's memory for dates and times, even when these would not have been in any way to his disadvantage, was unreliable. He continued to operate his construction business from those premises until after they were sold to the appellant in 1980, when he ceased business.

11. He admitted that, during the period when he did operate a business from the premises, he had converted one of the rooms in the premises for business use. But this user ceased when he wound up his business late in 1980. Since then, no business had been conducted on the premises, notwithstanding that the business sign remained outside the premises until some time between the middle of November last year and the beginning of January this year.

12. He added that he was unaware of the need to cancel the certificate of registration of his business, that he had merely continued to use his old business account because it was convenient and that he did not know why his telephone number was in the business directory as he had not asked for this to be done and assumed that the telephone company had done it without consulting him.

13. He was insistent that there was never any term in the oral tenancies, which he had entered with his previous landlord and the appellant, to the effect that the premises were let to him for business purposes. We accept the respondent's evidence as to this.

14. Furthermore, section 51 of Cap.7 provides that, whatever the purpose for which premises were let, if they are being used primarily for purposes other than those of the original letting they shall, nevertheless, be deemed to have been let for such other purpose.

15. In determining whether premises were let, or are being used, as a dwelling, a number of guidelines are set out in section 51(3) of the Ordinance, to which we have directed out attention.

16. The furnishings, fittings and contents as found by the Rating and Valuation officers were wholly domestic. There were ten people who appeared to have been using the premises for living purposes only.

17. The appellant has placed himself at a grave disadvantage by failing to adduce any evidence to contradict that of the respondent as to the way in which the premises are used. He could, at any time, have exercised his rights as a landlord to enter and inspect the premises. If he had done so and had discovered that the primary user of the premises was non-domestic, he could have given evidence to that effect. As it is, such other evidence as is available to us, namely, the affidavits of the Rating and Valuation officers, supports the respondent's testimony that these premises have been used wholly for domestic purposes since 1980.

18. Thus, there is no evidence before us, which leads us to doubt the correctness of the certificate issued by the Commissioner, to the effect that the primary user of these premises was domestic at the date on which that certificate was issued. Nor is there any evidence to suggest that the respondent had acted in such a way as to procure a fraudulent certificate, for instance, by removing all traces of business user shortly before the Rating and Valuation officers arrived though he did remove the notice board.

19. The appeal against the certificate issued by the Commissioner is dismissed.

Representation:

R. Leung (Yung, Yu & Yuen) for Appellant

Miss J. Plumptre, Crown Counsel for 1st Respondent

P. Kwan (Chung & Kwan) for 2nd Respondent.