Leung Sau Han v. Chan Loy Fat
Read the full judgment text of HCA 1262/1980 on BabelCite. This High Court CFI judgment.
1. In March this year the appellant filed a writ in the High Court for possession of premises alleged to have been let for domestic purposes. The appellant claimed that the respondent, in breach of the tenancy agreement, had: (1) sublet to a person unknown to the appellant.
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HCA001262/1980
IN THE SUPREME COURT OF HONG KONG HIGH COURT -----------------
Coram: Bewley, J. in Chambers Date of Judgment: 26th June, 1980. ----------------- JUDGMENT ----------------- 1. In March this year the appellant filed a writ in the High Court for possession of premises alleged to have been let for domestic purposes. The appellant claimed that the respondent, in breach of the tenancy agreement, had: (1) sublet to a person unknown to the appellant.
2. Upon the application of the respondent, under o.18 r. 19, before delivery of the defence, the action was dismissed by Mr. Registrar Blackwell. The appellant now appeals. 3. The order was made on the grounds that the Supreme Court has no jurisdiction to adjudicate on disputes between landlord and tenant as to the tenure and rent of premises to which Part II of the Landlord & Tenant (Consolidation) Ordinance applies. 4. Mr. Chan, for the appellant, has no quarrel with that proposition, authority for which is found in Kong Ho (HK) Ltd. v. Lau Hung Kwan(1), but submits that, where the landlord succeeds in proving in the District Court that premises, the rateable value of which exceeds $15,000, are being used for non-domestic purposes, in breach of a term of the tenancy agreement, he will, by reason of the court's lack of jurisdiction, be unable to recover possession. To avoid such an impasse, he argues, the appellant is entitled to bring his action in the High Court. 5. S.35 of the District Court Ordinance limits the jurisdiction of the District Court to actions for the recovery of land where the rateable value does not exceed $15,000. 6. S.68(6) of the Landlord & Tenant (Consolidation) Ordinance provides, "The court shall have the jurisdiction conferred on it by this Part, notwithstanding anything in the District Court Ordinance". The reference to 'court' in this sub-section is to the District Court. 7. S. 50(1) of the same ordinance provides:-
8. S. 51(1) defines domestic tenancy as a tenancy of premises let as a dwelling. 9. Under s. 53(1) such a tenancy shall terminate only where -
10. S. 53(2) sets out the various circumstances in which the District Court may make an order for possession of the premises. 11. It is clear, therefore, that, where the District Court has jurisdiction to make an order under Part II, the $15,000 limit does not apply. As I have said, the appellant concedes that the High Court has no jurisdiction in these circumstances. 12. By s. 53(2) (a), the Court has jurisdiction to make an order for possession when any covenant or condition is broken where, but for Part II, such breach would have been a cause of forefeiture. This includes a covenant not to use the premises for non-domestic purposes. 13. The question is whether the District Court's jurisdiction goes, on a finding that the premises are being used for non-domestic purposes, in breach of covenant, that would otherwise entitle the plaintiff to an order for possession under s. 53(2) (a). 14. It is submitted by Mr. Chan that such a finding of fact triggers s.51(2), which provides inter alia:
15. If, then, the premises are deemed to have been let for a purpose other than as a dwelling, they cannot, by virtue of s. 51(1), be the subject of a domestic tenancy and Part II does not apply. Thus runs Mr. Chan's argument. 16. The relevant date for determining primary user is the date on which the landlord seeks to obtain possession. Alice Martha Wu Chan v. Peter Hui(2). And see Megarry's 'The Rent Acts'(3). In this case that is the date of the writ. 17. If the primary user on that date was non-domestic, then, notwithstanding that there may be evidence that the premises were originally let as a dwelling, they are deemed by virtue of s. 51(2)(b) to have been let for non-domestic purposes. 18. It makes no difference that the primary user is in breach of a term in the agreement. The proviso to s. 51(2)(b) only limits the effect of change of user, in breach of a term in the agreement, where the change is to convert the user to domestic user without the consent or acquiescence of the landlord. 19. The reason for this is obvious: a change of user to domestic user brings the tenancy under the protection of Part II and brings with it all the statutory limitations on the landlord's common law rights. It would be manifestly unjust and wrong to enable a tenant, in breach of a covenant as to user, to bring the tenancy within the protecting influence of Part II by changing the user without the landlord's consent or acquiescence. 20. The position is quite different, however, in the case where the change, albeit in breach of a term in the agreement, is to a non-domestic user, for then the tenant, by his change of user, takes the tenancy outside the protection of Part II. In this situation the landlord can enforce his common law rights to recover possession for breach of the covenant. He is not compelled to proceed under s.53(2) (a), which no longer applies. 21. If I am right, it follows that, where the rateable value of the premises exceeds $15,000, the District Court does not have jurisdiction and the action is properly commenced in the High Court. 22. Mr. Kwok, for the respondent, submits that a landlord must be entitled to lead evidence that the premises are being used for non-domestic purposes, and therefore no longer protected by Part II, without being accused of contradicting his own pleading that the premises were let as a dwelling. 23. The apparent contradiction, however, arises by operation of law, by virtue of the deeming provision in s.51(2) (b). The evidence itself is not contradictory in terms of R.S.C. 18/7/5. 24. Mr. Kwok also makes the point that, if the High Court has concurrent jurisdiction in these circumstances, the position regarding appeals is anomolous. 25. S. 68 & s. 68A of the District Court Ordinance specifically restrict appeals from the District Court under Part II to questions of law. If the case may be heard in the High Court, there is an appeal as of right on questions of law and fact. I agree with counsel that the right of appeal from the High Court may not be abrogated by implication. I conclude that the legislature must have intended that there should be a general right of appeal in cases where the rateable value is in excess of $15,000. 26. I do not think that Mr. Kwok has succeeded in showing that s. 51(2)(b) should be interpreted as an evidentiary provision. The words are plain and must be given their ordinary meaning. 27. The section is intended to protect tenants of domestic premises, except where they have converted the latter to domestic user without the landlord's agreement or acquiescence. But it is also intended to allow landlords, whose tenants have converted domestic premises to business user, to recover possession in accordance with the terms of the tenancy agreement. 28. S. 19 of the Interpretation and General Clauses Ordinance (Cap. 1) provides that, "An ordinance shall be deemed to be remedial and shall receive such fair, large or liberal construction and interpretation as will best ensure the attainment of the object of the ordinance according to its true intent, meaning and spirit." 29. In my judgment, on a proper reading of s. 51, the landlord's evidence, if it is believed, will have the effect of determining that the nature of the tenancy is non-domestic. Part II will not then apply. The landlord must, accordingly, be permitted to bring his action in the High Court. 30. For these reasons the appeal is allowed and the registrar's order set aside, with costs to the appellant here and in the Court below. Certified fit for Counsel. Representation: Mr. Warren Chan (Deacons) for appellant/plaintiff. Mr. Kenneth Kwok (Woo, Kwan, Lee & Lo) for respondent defendant. (1) (1976) HKLR 62 (2) 1974 DCLR 15. (3) 10th Ed. page 47. |
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