Hongkong Bank Trustee Ltd v. Chang Chi Fan

LDLA000014A/1983

IN THE LANDS TRIBUNAL OF HONG KONG

(Appellate Jurisdiction)

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Coram: TRIBUNAL: M.W. Phillips, Esq., Member.

Date: 18th day of October, 1983

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JUDGMENT

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1. The respondent, Chang Chi Fan is the tenant of Flat 711, 7th floor, 22 Lai Chi Kok Road and the appellant is the landlord.

2. On the 14th December 1982 the appellant applied for a Certificate of Increase in Rent under Section 57 of the Landlord and Tenant (Consolidation) Ordinance, Cap. 7. Under Section 58 the Commissioner issued a Certificate of Increase in Rent on the 10th February 1983 certifying that the existing rent of $2,160 per month, inclusive of rates, be increased by $414. The respondent applied for a review of this certificate pursuant to Section 59 and on 23rd May 1983, having carried out a review, the Commissioner cancelled the earlier certificate and issued a new certificate reducing the increase to $314 per month. The appellant has now appealed under Section 60 to this Tribunal against the substituted figure of $314 per month and submitted that the amount of $414 per month stated in earlier certificate issued on the 10th February 1983 should be the proper increase.

3. The appellant cited the case of The Hong Kong Land Company Limited for and on behalf of Mok Hing Yue and Mok Wong Fung Yee v. Esso Standard Oil (H.K.) Limited (Landlord and Tenant Appeal No. 6 of 1974 in the District court of Hong Kong) in which Hooper D.J. held that the relevant date for the assessment of the "fair market rent", as it was then termed, was the date when application was made to the commissioner for an increase in rent.

4. As stated in this Tribunal's recent judgment of Lee Yu Fong v. Cheung Wing Ming (Landlord and Tenant Appeal No. 15 of 1983), any doubt as to the proper date of valuation has since been removed by Section 10 of the Landlord and Tenant (consolidation) (Amendment) Ordinance No. 29/83 which came into force on the 10th June 1983 and amended Section 49 of the principal Ordinance by including in the new definition of "prevailing market rent" the requirement that it is the, ''rent, exclusive of rates at which premises the subject matter of a tenancy to which this Part applies might ht reasonably be expected to be let at the date upon which the Commissioner issues his certificate under Section 58." (Underlining added). Therefore by virtue of the amending Ordinance, for any case coming to the Tribunal on or after 10th June 1983, the proper date of valuation on an appeal to the Tribunal under Section 60 is the date the commissioner issues his certificate.

5. This appeal was made on 24th June 1983 and the case heard on 16th September 1983, so the new law applies. The relevant date is therefore 10th February 1983. The review decision was issued on 23rd May 1983 before the amendment to the Ordinance. There can be no question of the date of valuation being a relevant factor in the commissioner's decision, but it is relevant to the decision of the Tribunal rays the hearing was subsequent to the amendment of the Ordinance. The submission by the applicant that the Tribunal should have regard to the date of application rather than the date of issuing the certificate must be rejected. The commissioner did. not base his review on the later date but merely reviewed 11 is earlier decision as to the prevailing market rent as at 14th December 1982 when the application for increase was made. He based this decision on. information obtained since making the earlier assessment. It must be emphasised that rental information need not be only that available prior to the relevant date, but also rants obtained after the relevant date are admissible provided or weight ht is given and suitable adjustments are made. This point was made clear by Williams J. in the High court of Australia in Daandine Pastoral Co. v. Commissioner of Land Tax of the; Commonwealth of Australia (unreported but referred to in McCathie and Others v. The Federal Commissioner of Taxation (1944) 69 C.L.R. 15. It is pleasing to find the Commissioner has followed this principle in using, rents obtained in early 1983.

6. The position is that, both on the initial application for increase in rent and on the review, the Commissioner assessed the prevailing market rent as at the 14th day of December 1982. However, on the review the availability of additional evidence of early 1983 rents led him to reduce the earlier certified increase of $414 per calendar month down to $314 per calendar month.

7. On this appeal I am obliged to determine the prevailing market rent as at the 10th day of February 1983. The additional evidence which led the Commissioner to reduce his initial determination is also available to me and is relevant. On the basis of that evidence I an satisfied that as at the 10th day of February 1983 the subject premises might reasonably have been expected to be let at 32, 700 per calendar month exclusive of rates. According to the formula this allows an increase of $314 per month which corresponds with the commissioner's reduced increase certified on the review.

8. I therefore agree with the conclusion reached by the Commissioner on the review but for different reasons. The appeal is therefore dismissed with no order as to costs.

DATED this 18th day of October, 1983.

Representation:

Mr. S.C. Hung, by leave, of Hong Kong Bank Trustee Limited, Applicant.

Respondent absent.