Lau Kwan v. Keung Sit-kai

DCCJ000030/1981

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT KOWLOON

CIVIL JURISDICTION

ACTION NO. 30 OF 1981

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Coram: P.G. Clough, D.J.

Date of Judgment: 30th September, 1981.

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JUDGMENT AND REASONS

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1. The plaintiff's claim is for possession and ancillary relief in respect of domestic premises known as Flat N, 2nd floor, Hing Fat Mansion or as 2nd floor, No.347A, Ngau Tau Kok Road, Kowloon.

2. The defendant is the plaintiff's tenant of the premises under a monthly tenancy at a rent of $381.00 per month payable in advance on the first day of every calendar month.

3. It is common ground on the pleadings that Part II of the Landlord and Tenant (Consolidation) Ordinance (Cap.7) applies to the premises and that Parts I and IV do not apply.

4. The plaintiff's claim is founded on section 53(2)(b) of the Ordinance on the ground that he reasonably requires the disputed premises as a residence for himself and his family comprising himself, his wife, his two children aged 9 and 10 and of different sexes, and his aged mother of 82. No objection was raised on behalf of the defendant to the reference to the reasonable requirement of the plaintiff "and his family" in paragraph 6 of the Particulars of Claim. As the plaintiff's case was that he proposed to live in the suit premises with his wife, children and mother as one common household I deal with the claim on the footing that he claimed the suit premises as a residence for himself within the meaning of section 53(2)(b).

5. The defendant contests this claim but does not seek to rely on proviso(i) to section 53(2)(b). Reliance on the proviso was pleaded but it was abandoned at the hearing and the defendant did not give evidence or call any witnesses. However on behalf of the defendant reliance was placed on section 74A(aa) and it was contended in a carefully assembled argument by the defendant's counsel that the plaintiff had served no effective notice to quit on the defendant and that the plaintiff was therefore not entitled to an order for possession even if he had established the ground under section 53(2)(b).

The claim under section 53(2)(b)

6. As regards the plaintiff's claim under section 53(2)(b), I have to be satisfied by the plaintiff on the balance of probabilities that he has a present reasonable requirement, assessed on an objective basis, for the suit premises as a residence for himself on the basis that he proposes to occupy them with his immediate family and his aged mother as one common household.

7. I am satisfied that the plaintiff has such a requirement. The substance of his evidence, which I accept, is as follows. His present living conditions are too congested. He and his family occupy what is left of premises comprising about 300 square feet after the sub-letting of about 70 square feet by the plaintiff to a Mr. Ma in 1973, at a time when the plaintiff's children were very small and he was hard up for money.

8. There are only two cubicles in the premises occupied by the plaintiff and his family. Mr. Ma occupies one with his family comprising himself and his wife and daughter aged 6 ½. The kitchen and toilet have to be shared. There is no bathroom. The plaintiff and his wife share the top bunk in a double-tiered bed in their cubicle and their daughter and son share the lower bunk. The plaintiff's aged mother sleeps in the living room where meals are also taken by the family.

9. As sometimes happens in such overcrowded conditions, friction has developed between the plaintiff's family, culminating about a year ago in quarrels between the children and an incident between Mr. Ma and the plaintiff's wife resulting in the police being involved.

10. Under the circumstances outlined above I consider that it is reasonable for the plaintiff to require to move to other premises where he can live in peace and in less cramped conditions than at present.

11. He owned another flat, in the same building as the suit premises, which he sold in November, 1980 for $200,000 before he began these proceedings. At that time he could elect which flat he would offer for sale. They both had sitting tenants who were protected and it was not, in my judgment, unreasonable for him to retain the suit premises.

12. On his own admission the plaintiff is an incorrigible gambler and frittered away much of the $200,000 he received for the flat he sold. He had acquired the suit premises by gambling. His improvidence due to his weakness for gambling is relevant to the question of reasonable requirement but I do not consider that the court should adopt a censorious attitude and treat his present requirement of the suit premises as being unreasonable simply because he is relatively impecunious due to his gambling.

13. On behalf of the defendant it was contended that the plaintiff's predicament was self induced because it resulted from his original error in sub-letting to Mr. Ma. In my judgment it was not unreasonable for the plaintiff to effect the sub-letting about 8 years ago when he was hard up and his children were still very small. The sub-letting has subsequently proved to be the cause of intolerable friction but I accept the plaintiff's evidence that the trouble only broke out about 2 years ago when the plaintiff asked Mr. Ma to leave.

14. It was also contended on behalf of the defendant, but never put to the plaintiff when he was cross-examined, that it would have been more reasonable for him to bring proceedings for possession against Mr. Ma the sub-tenant under section 53(2)(d) of the Ordinance. Bearing in mind the nature of the quarrels between the plaintiff and his sub-tenant I do not consider that his failure to embark upon such proceedings results in his present requirement of the suit premises being other than reasonable.

15. I am accordingly satisfied that the plaintiff has established a genuine present reasonable requirement of the suit premises for the purposes of a residence for himself and other members of his household. Unless he is defeated by the defendant on the issue arising under section 74A(aa) of the Ordinance he is, in my judgment, entitled to an order for possession.

The issue under section 74A(aa)

16. By paragraphs 7 and 8 of the Amended Particulars of Claim the plaintiff pleaded non-compliance by the defendant with notice to quit dated the 6th November, 1980 served in the form of a solicitor's letter and requiring the defendant to give possession of the suit premises on the 15th December, 1980. Paragraph 4 of the Amended Defence denies the above allegations and alleges that the defendant did not receive any notice to quit.

17. At the hearing the plaintiff called no evidence regarding the notice to quit and his counsel argued that no notice was required in this case because the Court of Appeal had so hold in Lo Wah's case⁽¹⁾. He further contended that the writ was issued (on the 2nd January, 1981) before section 74A(aa) became law (on the 10th July, 1981) and the provisions of that paragraph were not retrospective and could not there-fore apply to the present case.

18. Counsel for the defendant argued that, whilst LO Wah's case decided that notice to quit terminating the contractual tenancy was not required in a Part II case, there is no judicial authority for sweeping aside the whole contractual basis of the landlord and tenant relation-ship in such a case. The observations of Cons, J.A. in LO Wah's case should be treated as obiter dicta and read subject to the subsequent decision of the Court of Appeal in LAM Chun-kuen v. WAN Suet-ying⁽²⁾ which counsel contended decided that, despite Part II, the contractual tenancy continues. I should comment that I understand this case to have been decided on the assumption by the Court of Appeal (resulting from a concession by the landlord's counsel)that the court must respect the contractual bargain made by the parties.

19. Counsel for the defendant argued further that LAM Chun-kuen's case decided that during the contractual tenancy no order for possession can be made. The actual decision in that case, on a striking out issue, was based on the narrow ground that, on the facts of the case, the contractual term would have expired at the date of the hearing.

20. Counsel went on to argue that the effect of section 74A(aa) was to make it plain that whenever the contractual tenancy subsists that tenancy has to be terminated before any order for possession may be made, otherwise the court would be terminating a tenancy earlier than if Part II had not been enacted. Lo Wah's case was therefore overruled by section 74A(aa) and notice to quit was required before an order for possession could be made. On the pleadings and in the absence of evidence no notice to quit had been served, and in any event the notice to quit alleged by the plaintiff was bad in law.

21. It was not contended that the effect of section 74A(aa) was to activate Part V in relation to the tenancy.

22. Finally counsel for the defendant argued that the provisions of section 74A(aa) governed these proceedings although they became law after the issue of the plaintiff's writ. He cited Hutchinson v. Jauncey⁽³⁾ which he contended was authority to support this proposition, although it is to be observed that the actual decision turned on the interpretation of express retrospective words in an English statute. Counsel did not cite or attempt to distinguish National Real Estate & Finance Co.Ltd. v. Hassan⁽⁴⁾, a decision going the other way and cited in Maxwell, 12th Edition, at pages 220-1 where the principles applicable to the effect of legislation on pending proceedings are set out.

23. Assuming, but not deciding, that section 74A(aa) applies at the hearing of this case I do not consider that the effect of that provision is that a notice to quit is required in this or any other case within Part II of the Ordinance.

24. Section 74A(aa) is a saving provision expressed to prevent any tenancy from being terminated under Part II "....... earlier than would have been the case if this Part had not been enacted". The provision is a miscellaneous amendment effected by section 9 of the Landlord and Tenant (Consolidation) (Amendment) Ordinance 1981 (No.52 of 1981) and, in my judgment, it relates only to the time of termination and not to the manner of termination.

25. The Court of Appeal has held in unequivocal terms in LO Wah's case that the effect of section 52(1) of the Ordinance is that there is no means by which a contractual tenancy to which Part II applies can be determined otherwise than by an order under section 53(2), in a case where the landlord is seeking possession in reliance on grounds under section 53(2). If it had been the intention of the legislature to reverse the effect of this important decision and to require the service of a notice to quit plain words could have been inserted into the amending Ordinance to that effect. I accordingly hold that, even if it is assumed that section 74A(aa) applies to these proceedings, notice to quit was not required to be served on the defendant.

26. In my judgment the effect of section 74A(aa) in the present case is to require the court, when making an order for possession under section 53(2)(b), to ensure that the order does not take effect earlier than the date when the monthly tenancy of the defendant would have been liable to be determined by the plaintiff by service of appropriate notice to quit on the defendant at the time the order for possession is made. Such a notice would have had to be a month's notice expiring with a month of the tenancy: Woodfall on Landlord and Tenant, 28th edition, Vol.1, p.892, para. 1-1979; Precious v. Reedie⁽⁵⁾ and Lemon v. Lardeur⁽⁶⁾.

27. The six month discretionary power of deferment contained in section 54(3) of the Ordinance is adequate to ensure that an order for possession in this case does not have effect before such a hypothetical notice to quit would have expired. I intend to exercise that power to bring about that effect even if section 74A(aa) does not apply to these proceedings.

28. Accordingly, in the circumstances of this case it is not necessary to decide the question whether section 74A(aa) applies to these proceedings because full effect can be given to and will be given to that provision in any event.

29. I therefore make no decision on that question. However, in deference to the argument advanced by counsel for the defendant on this question I observe that if it had been necessary to decide the question I would have held that the miscellaneous amendment effected to Part II by section 74A(aa) is nothing more than an express saving provision declaring the law in terms which were necessarily to be inferred from the other provisions of Part II before section 74A(aa) was enacted. On that basis section 74A(aa) is not a retrospective provision at all in accordance with the test suggested in Craies on Statute Law, 7th edition, at p. 387 (and adopted in Maxwell, 12th edition at p.216) for a retrospective provision as being a provision which "takes away or impairs any vested right acquired under existing law or creates a new obligation, or imposes a new duty, or attaches a new disability in respect to transactions or considerations already past."

30. For the reasons given above I propose to make an order for possession in favour of the plaintiff but I will defer the effect of the order to the 1st November, 1981 or such later date within the powers conferred by section 53(4) as the plaintiff may agree or the defendant may persuade me is appropriate at the time this judgment is delivered.

Representation:

Mr. A.R. Suffiad, counsel instructed by Lau, Chan & Ko for the plaintiff.

Mr. Benjamin Chain, counsel instructed by P.C. Woo & Co. for the defendant.

(1) (1980) No. 152 (Civil)

(2) (1981) No.47 (Civil)

(3) (1950) 1 All E.R. 165 (C.A.)

(4) (1939) 2 K.B. 61 (C.A.)

(5) (1924) 2 K.B. 149

(6) (1946) K.B. 613 (C.A.)