Tang Kwai Yuk v. Law Pong Shing

DCCJ003845/1971

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT KOWLOON

CIVIL JURISDICTION

ACTION No. 3845 of 1971

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Coram: Judge Davies.

Date of Judgment: 31st December, 1971.

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JUDGMENT

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1. The issues to be determined in this case are very clear-cut.

2. The parties are both agreed that the plaintiff served on the defendant, and caused to be duly posted at the premises, a notice to quit.

3. This notice, which complied in all respects with the requirements of section 3(1), (2) and (3) of the Tenancy (Notice of Termination) Ordinance, purported to determine the defendant's tenancy of the plaintiff's premises with effect from 9th June 1971.

4. The plaintiff has throughout relied on the provisions of that Ordinance.

5. The defendant on the other hand contends that his tenancy falls within the purview of the Rent Increases (Domestic Premises) Control Ordinance, that the notice to which I have just referred does not comply with the provisions of that Ordinance, and is therefore not a valid notice.

6. This conflict raises a point of law, and it is appropriate that I should deal with it first.

7. The issue clearly depends upon whether, at the inception of the tenancy (which was in August 1965), the defendant did or did not, pay any key or construction money or premium to the plaintiff.

8. It is ground common to both sides that the premises were and are excluded from the provisions of the Landlord and Tenant Ordinance.

9. The question arises next however, whether they fell within the provisions of the Tenancy (Prolonged Duration) Ordinance.

10. This is determinable by reference to section 5 of that Ordinance, subsection 2(b) of which enacts that the said Ordinance shall not apply to any case in which the Court is satisfied by evidence that no key or construction money or other similar premium has been paid.

11. It is the case for the plaintiff that such money was paid, and that the tenancy, having commenced after 1st July 1963, was accordingly by virtue of section 3(1) of that Ordinance, protected thereunder for a period of 5 years from the date of its inception.

12. The case for the defendant is that no key or construction money or premium was paid, and that the tenancy has neverfallen within the protection of that Ordinance.

13. The importance of this question becomes manifest when reference is made to the Rent Increases (Domestic Premises) Control Ordinance 1970 section 3(5)(1), which provides that the said Ordinance shall not apply to a tenancy which is continuing, after having ceased to enjoy protection under section 3 of the Tenancy (Prolonged Duration) Ordinance, the continuance being on the same terms and conditions as those which applied when it was enjoying protection. There being no dispute that the present terms and conditions are the same as have applied at all times hitherto, the question whether this tenancy falls within the Tenancy (Notice of Termination) Ordinance, or falls within the Rent Increases (Domestic Premises) Control Ordinance, is entirely dependent upon whether or not it has ever been protected by the Tenancy (Prolonged Duration) Ordinance, which in turn depends upon whether or not key or construction money or premium was paid.

14. We thus reach a straightforward issue of fact, and the only further reference to the law required is to point out that the words used in section 5(2)(b) of the Tenancy (Prolonged Duration) Ordinance must be construed as meaning that in order to rule that the Ordinance does not apply, the Court must be satisfied by evidence that no key or construction money or premium was paid. In other words, there is something akin to a presumption of application, and the burden is upon the party alleging the nonpayment of key or construction money or premium, to prove it by satisfying the Court with evidence.

15. I will next deal with the issue of fact, namely whether or not construction money was paid by the defendant.

16. There is a direct conflict of evidence concerning this matter as between plaintiff and defendant.

17. The plaintiff has stated that she was paid $830.00 construction money at the commencement of the tenancy. She says that the payment was in cash, and made at the office of Messrs. P.H. Sin & Co. her solicitors, where she has a desk reserved for her private use.

18. The plaintiff has added that she did not issue any receipt for this payment, since it was not the prevailing practice for landlords at this time to give receipts for construction money.

19. It has been confirmed by two witnesses from the Rating & Valuation Department that this is so. The plaintiff has however produced her own account book (Ex.P1), and this reveals an entry dated 26.7.65 of having received $830.00 construction fee from LAW Pong Shing.

20. A witness from Rating & Valuation Department has produced a return submitted from the plaintiff (Ex.P4) dated 14.9.65, and this also records $830.00 construction fee paid in respect of the premises. Actually the entry relates to 67A 12th floor, but I am satisfied that this was a genuine error and the flat intended to be referred to is 67B 12th floor, the premises in dispute. The written figure $830.00 appears to be superimposed on something which was rubbed out, but although plaintiff cannot explain this, I do not think that it has any sinister significance.

21. There is much substance in the argument advanced on behalf of the plaintiff that 6 1/2 years ago, the plaintiff could not possibly have foreseen either the existing state of the law today, nor have foreseen either the existing state of the law today, not have anticipated the present action; and it is highly unlikely that she would have informed the Rating & Valuation Department that she had received construction money if in fact she had not. If anything, she would have been more tempted to conceal the receipt of construction money than to falsely declare it.

22. P.W.3 Mr. YEUNG was the Rating & Valuation officer who visited the premises in order to verify the information contained in the plaintiff's return submitted to his Department. He has produced a copy of his report (Ex.P5).

23. His evidence is to the effect that at Flat 67B 12th floor, he met someone who gave him all the information required. Unfortunately he cannot remember who the person was, and so the information (if supplied by someone other than defendant himself) may be in the nature of hearsay evidence.

24. Be that as it may, for what the information was worth, it confirmed the particulars contained in the plaintiff's return, including the statement that $830.00 construction money had been paid by the tenant.

25. That is a summary of the evidence adduced by the plaintiff. She alleges that her employee Miss WONG Oi Yung was present with her when the construction money was paid, and witnessed the transaction. For reasons unexplained to me, Miss WONG has not been called as a witness.

26. Defendant in his evidence has stated that the preliminary negotiations for the lease of this flat were between his wife and himself on the one hand and the landlady's representative Ah Po, who lives in the same block, on the other. He says that Ah Po told him that she did not know whether or not construction money was required. Later, he says, his wife went to the offices of Messrs. P.H. Sin & Co. and paid the first month's rent in advance. No construction money was ever demanded or paid.

27. Defendant's wife has not given evidence, nor has Ah Po, though it seemed to me that each might have contributed usefully to the case for the defendant.

28. It thus follows from these remarks that in my view neither the case for the plaintiff nor the case for the defendant was as strong as it conceivably might have been.

29. Nevertheless, I am unable to visualize any reason why the plaintiff, in her return to the Rating & Valuation Department should have stated that construction money had been paid if in fact it had not.

30. Furthermore the entry in her account book Ex.P1 has all the appearances of being perfectly genuine.

31. For these reasons, I have reached the conclusion that the plaintiff has discharged the onus of establishing a balance of probability that construction money was paid by defendant as she alleges, and has thus proved her case on this issue.

32. Having therefore fourd as a fact that construction money was paid, I rule as a matter of law (for reasons expounded earlier in this judgment) that the premises are not governed by the provisions of the Rent Increases (Domestic Premises) Control Ordinance.

33. The notice to quit issued by the plaintiff was a valid one, the period of notice has now expired, and the defendant has no legal answer to the plaintiff's claim for possession.

34. I accordingly give judgment for the plaintiff for possession of the premises, and for mesne profits at the rate of $244.00 per month until delivery of possession, and for cost (to be taxed on Scale IV, unless earlier agreed).

35. In open Court this 31st day of December, 1971.

Representation:

CERTIFIED TRUE COPY.

P.S.II (A.Costa) 5.1.72.