Tam Wai-ngan v. Hans Siegfried Kremmel

DCCJ004039/1980

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT VICTORIA

CIVIL JURISDICTION

ACTION NO. 4039 OF 1980

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Coram: Judge Caird

Date of Judgment: 15th May, 1981.

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JUDGMENT

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1. The plaintiff as owner claims possession of a detached house with gardens situate at No. 29 Lugard Road, The Peak, Hong Kong. It is admitted that these premises shelter under the umbrella of Part II of the Landlord & Tenant (Consolidation) Ordinance, Cap. 7. (The Ordinance)

2. The plaintiff's claim is based on Section 53(2)(b) of the Ordinance and that she alleges in her particulars of claim that she

"reasonably requires the said premises for occupation as a residence for herself and her family"

State of Pleadings

3. There was considerable discussion before me as to the pleadings. It was claimed by Mr. Mills-Owens on behalf of the defendant that the plaintiff could not claim for members of her household over the age of 18 years as such persons were nominated in Section 53(2)(b).

4. Counsel also asserted, following a letter written by his professional client to the plaintiff's advisers that as the plaintiff's children were illegitimate, they are "Filius Nullius", and not being specifically dealt with by any legislation, could not claim any benefits under Part II of the Landlord & Tenant Ordinance.

5. These arguments at the time appeared to me to contradict each other, upon reflexion I have not changed my initial view.

6. There was no doubt that the plaintiff stated clearly both in her pleadings, and in evidence that the claim was for herself together with her family. I have no hesitation in holding that the plaintiff's illegitimate children emanated from her in a normal way as discussed by Willmer L.J. in Richter v. Wilson⁽¹⁾.

7. I take the view the particulars of claim give ample information and are properly pleaded. I shall deal more fully with the status of these children later.

The plaintiff's circumstances

8. Miss Tam aged 49, at present resides at Flat F, Cheung Ling Building, Nullah Road, Mongkok which premises were previously her property and are now held by a friend. The tenant being one YIP Pui-chuen.

9. The Lugard Road property, was purchased by her in May of 1970, the register showing by memorial 738033 that the purchaser was one TAM Yee. On the 14th of April 1972 a further memorial was registered whereby the plaintiff was recorded as the holder of this property. The assignment recited, and this was never in dispute, that TAM Yee held the property in trust for the plaintiff. The reason for this being that the plaintiff did not wish to have certain persons with whom she had been associated, become cognisant of the fact that she owned such a house property.

10. The property itself, in Hong Kong terms, can be described as spacious. On the ground floor, there is a living and dining area, a study, a television room together with the usual service and servants area. This comprises about 2,000 sq. ft. in area. The first floor, again about 2,000 sq. ft. in area, has a large hall and three bedrooms each with a bathroom en suite.

11. There is a large garden, the evidence not being clear as to the area involved, particularly as Mr. Ching, (as he freely acknowledged) made an error in describing this in his opening address. Nothing hangs on whether this garden area is 3,000 sq. ft. or larger.

12. Most of the plaintiff's evidence was adduced to show that she reasonably required the premises for her own, and her family's occupation. It was for her to establish, on the balance of probabilities, that this was so. To cover the event of a finding in her favour, evidence was adduced to meet any claim subsequently postulated by the defendant, that the making of an order would be "thoroughly unjust".

13. The premises in question, are let for the sum of $10,000 per month, apportioned $8,500 for the realty and $1,500 for fittings. Although the particulars as amended, claimed possession of both the house and the personal property, I am of the view that the value of the personalty exceeds the sum of $20,000. Mr. Ching stated that he assumed this was the position. In these circumstances, I decline jurisdiction and express my gratitude to both Counsel for assuring me that whatever the outcome of my judgment, they are confident of coming to terms on this issue, thereby avoiding further separate proceedings in the High Court.

14. The plaintiff has 4 children aged between the ages of 27 and 15. All these children are illegitimate. The elder son is aged 27 and works in Hong Kong as a Salesman earning approximately $1,200 per month. The second son aged 18 resides in Costa Rica, where he is a student hoping to obtain entry to the United States to study at University in the 1981/82 Academic Year. The youngest son aged 15 resides in Hong Kong. A daughter aged 26 resides in England, she is married with two children.

15. The plaintiff frankly acknowledged that she has not yet made any arrangements for her second son to go to Univesity, but if he cannot obtain a University place, she intends that he should come back to live in Hong Kong with her. There was evidence adduced as to the daughter's future intentions, the plaintiff stating that she will come back to Hong Kong with her husband and two children.

16. In HO Siu-ying v. SING Hong-cheung⁽²⁾. I discussed a family member's alleged intention, when such a person was not available to give evidence. Adopting the reasoning therein, I find that there is insufficient evidence before me of an admissible nature to come to any finding relating to the daughter's intentions, let alone her husband's other than the fact that as her husband works for Eupo Air, the family may have access to cheap air passages, and therefore may be able to visit Hong Kong more frequently than those who are not engaged in the airline industry.

17. Miss Tam resides with a Mr. Yip and his flat comprises some 500 to 600 sq. ft. in area, she does not pay any rent and indeed Mr. Yip provides food for herself and her son; and there is a servant residing in the flat. She occupies a cubicle 120 sq. ft. in area, herself sleeping on an upper bunk and her two sons on the lower bunk. These conditions were evidenced by a series of Polaroid photographs produced by the plaintiff. P2(a) - (g). It was clear that the plaintiff could use such facilities of the flat as were available for communal use, quite freely.

18. The plaintiff alleged she lived in the Lugard Road house from 1970 to 1973 and that she left because without a servant, she could not live there. Criticism was advanced by Mr. Mills-Owens as to Miss Tam not having photographs showing her with her children around the premises. She acknowledged that she did not have family photographs, however, I am unable to place the slightest scintilla of value on this situation.

19. The plaintiff possesses what Counsel and I have accepted as being a cancelled Hong Kong Passport and another current Costa Rica Passport. It was shown that she travelled extensively during the period 1976-1980. The plaintiff informed me that she had lived in Mr. Yip's flat since August of 1980 upon her return to Hong Kong.

20. I was informed it was the plaintiff's intention to have her parents reside with her at Lugard Road. Miss Tam stated that both her parents are still alive, her father aged 81, her mother aged 72. They are retired and reside in a stone house near the Shek Lai Pui Reservoir. These premises are about 200 sq. ft. in area and comprise one bedroom, a sitting room, a kitchen and a non-flushing toilet. They do not pay rent. She asserted that her intention was to have her parents reside with her at Lugard Road, although she has never had them reside with her in the past. Also she claims that she wishes to have residing with her the two sons at present living in Hong Kong.

Plaintiff's financial situation

21. The suit premises are mortgaged in the sum of $1,000,000 of which $400,000 has been advanced and as far as I understand the position she owns jewellery worth about $1,000,000, two vehicles in Costa Rica one a Mercedes, the other a Mazada. The Mercedes is worth approximately $200,000 after she has owned it for a period of five years. In Hong Kong, she owns a Mercedes, Benz (originally purchased for $40,000). She has approximately US$100,000 cash resources available, $50,000 on fixed deposit in Nicaragua $30,000 in Costa Rica on deposit and $20,000 cash in premises in Costa Rica. The evidence is very vague as to these premises, it appears that they are rented and she uses them as a home whenever visiting that country.

22. She is a "partner" in a piling business having invested approximately $200,000, with a return from this of approximately $10,000 per month. I don't propose to discuss this business further, except to observe that to date it appears to have been reasonably successful with profits of $300,000 from 1 million worth of contracts completed.

23. She formerly owned a restaurant in Costa Rica named Omun which commenced operations about 1978.

24. The only other income disclosed is $10,000 per month rental from the suit premises. Miss Tam said she would meet any shortfall in income against expenditure by using the cash referred to above and by selling Jewellery.

25. I remind myself that in considering the plaintiff's case, as to her requiring the premises, I do not take into account, any of the defendant's personal circumstances, and use only those portions of the defendant's evidence which relate to the plaintiff's claim that she reasonably requires these premises for her own and her family's use and occupation.

Miss Ong's translation

26. During the course of hearing, objection was taken by Mr. Ching to the defendant giving evidence of what the plaintiff said when such oral statements uttered during the course of discussions were translated to him by Miss Ong. The objection was based on the hearsay principal, as Miss Ong had not given an account of the particular statement.

27. I ruled this evidence admissible and gave brief reasons at that time.

The defendant's evidence relating to the plaintiff's motivation

28. I wish to state at the outset that I believed the defendant, his employee, Miss Ong who acted as an interpreter and his wife, all to be scrupulous witnesses as to truth. This, being so although there are matters involving recollection, particularly as to conversations which have occurred sometime ago where mistakes could occur. This was very fairly conceded by Miss Ong during cross-examination by Mr. Ching.

29. I have also taken into account that the defendant assessed the market value for renting the Lugard Road premises as $25-35,000. This was suggested by Mr. Ching as being on the low side, and in so far as I may take judicial notice of such rentals in the Peak area, I consider this to be low. However, this does not reflect adversely upon the defendant in that as a tenant, (facing possible eviction and thereby forced to look for other property possibly on the Peak) he would be naturally somewhat conservative in his approach to high rentals. Possibly optimistic that he could obtain equilvalent premises in the range discussed by him. This in contrast to a landlord's optimism hoping to obtain higher rentals.

30. I accept that there were discussions with the plaintiff about selling her property. This in 1979, that the plaintiff was ultimately prepared to accept $6 million and the defendant offered $4.5 million. I also accept that the plaintiff made a suggestion that she re-build the premises, converting them into two sets of quarters and that she would occupy one and that the defendant would occupy the other. I accept that the plaintiff stated she owned restaurants in London and Costa Rica and that she gave the impression she would be residing in the Hong Kong premises when visiting Hong Kong on holiday.

Reasonably required

31. The cases made it quite clear that the landlord must prove a genuine present need and that this must be something more than a "desire" See Atkin v. Shaw⁽³⁾, Kennealy v. Dunne⁽⁴⁾, Lusher v. Hillard⁽⁵⁾.

32. In Kwok v. Leung⁽⁶⁾, I considered the concept and Mr. Mills-Owens devoted part of his submission to quoting from that decision as follows:-

33. I adopt the views expressed then, for purposes of giving judgment in the instant case.

34. The genuine present need must be extant at the time of hearing. Megarry⁽⁷⁾, Burrstead v. Wood⁽⁸⁾, Sims v. Wilson⁽⁹⁾.

35. Although the need has to be at the time of the hearing, that which motivated the action on a historial basis may be evidenced in favour of establishing the need or contradicting it, bearing in mind, of course that motivations and intentions may change.

36. It is my opinion, that if a plaintiff intends to reside in premises, but this is motivated by an intention to reconstruct by way of demolition of the building concerned, on alternatively by an intention to sell the premises at the end of twenty-four months, then in such circumstances this is neither bona fide nor genuine in the sense of "for use as occupation as a residence for ....." I am further of the view that when an attack is made upon a plaintiff's motivation as to bona fides and where, as in the instant case, there are findings adverse to the plaintiff on credibility, then there is an onus upon the plaintiff to satisfy me on the balance of probabilities that her intention is to use the premises for her own and her family's occupation without either of the underlying causes referred to above.

37. However, if premises such as the Lugard Road property are to be gutted and reconstructed inside so as to provide two units and there is an genuine intention by the landlord to reside in one such unit and lease the other, then this in my view does not vitiate a requirement which otherwise comes within the ambit of Section 53(2)(b).

38. I am also of the view that it is perfectly in order for a landlord to develop a genuine present need, fully bona fide, for use of the premises for his own use and occupation, together with his family members, when circumstances have changed e.g. family circumstances, or as is relevant here, when there has been an attempt to sell the premises and this attempt fails. This includes circumstances where the landlord is unable to obtain a fair price because of a dimunition in value, due to the presence of a sitting tenant.

Status of the plaintiff's children

39. As I said earlier the defendant through his advisors, before the hearing of the action commenced, upon being apprised that the plaintiff's children were illegitimate, had raised in correspondence, the point that children over the age of 18 could not be considered as being persons nominated by the legislature because they were "Filius nullius" and in the absence of legislation the equivalent of the Family Law Reform act 1969 conferring rights upon illegitimate children, submitted the legislation extant could not be interpreted so as to include illegitimate children. However, due to the way Mr. Ching put his case in opening Mr. Mills-Owens indicated that he did not need to pursue this argument and would not be doing so although he still subscribed to it. Although it is not necessary for me to determine this point, I am fully aware that the Section concerned was incorporated into the Landlord & Tenant (Consolidation) Ordinance by Ordinance No. 6 of 1980 Section 5. Sociological conditions apply, vastly different from those when the common law position originally evolved. Also Section 19 of The Interpretation and General Clauses Ordinance Cap. 1 applies: whereas no such statutory aid to interpretation has ever been available in the United Kingdom.

40. I cannot believe that the legislature in Hong Kong in 1980 could intend anything other than that illegitimate children would enjoy equal status to legitimate children in any actions brought pursuant to Section 53(2)(b).

41. The proposition was advanced that as the section provides for separate applications by children over the age of 18, such children could not be considered as part of a plaintiff's household when the plaintiff herself is making an application pursuant to Section 53(2)(b). And as such the plaintiff's elder son at present residing with her, the younger son over the age of 18 who may be going to University in the United States or may be coming to Hong Kong and the daughter who may come to Hong Kong could not be considered as persons emanating from the plaintiff. I pointed out the illogicality when contrasted with the argument that these children were "Filius Nullius". I am mindful that in Richter v. Wilson⁽¹⁾, it was said, apparently obiter, by Willmer L.J. "... he (the plaintiff) must be entitled to include with himself his wife and any children of his who are resident with him in the same household, at any rate up to the age of 18; sons and daughters over the age of 18 are dealt with separately." It appeared that His Lordship had some slight doubt.

42. In interpreting Part II of Cap. 7 one must take into account the obvious prevalence of communal living in this jurisdiction, frequently involving several families and adult children.

43. I have no doubt, whatsoever that the plaintiff's children infant and adult must be considered as emanating from her for the purposes of any application by the plaintiff pursuant to Section 53(2)(b), when such adult children comprise part of her household.

44. "Intend" or "Intentional"

45. As far as this head is concerned, I accept the views expressed in the head note to Cunliffe v. Goodman⁽⁷⁾.

"It must be shown the landlord had made up his mind and that his project had moved out of the zone of contemplation - the sphere of the tentative the provisional and the exploratory - and had moved into the valley of decision"

46. Although those tests were in relation to a question of structural alterations, nevertheless it is my opinion that they apply just as much in determining the intention of a landlord in cases brought pursuant to Section 53(2)(b). It should be remembered that the word "intend" itself did not appear in the subsection that the Court of Appeal dealt with in Cunliffe v. Goodman⁽⁷⁾ as has been pointed out in subsequent cases, where the word "intend" used in the legislation concerned has been specifically considered.

47. I apply this test to each of the plaintiff's expressed intentions.

Consideration of the plaintiff's claim that "the premises are reasonably required"

48. The defendant mounted an intensive attack upon the plaintiff's credibility both during cross-examination and when presenting his case particularly in the evidence of Miss Ong an employee of the defendant and acts as his interpreter.

1. The first of a number of matters which have to be considered, although the matters listed below are not exhaustive was the actual purchase through a trustee of the house in 1970.

2. Another matter raised by Mr. Mills-Owens was that although the plaintiff claimed to reside in the premises in 1970 to 1972, there were no family photographs produced, or as conceded by the plaintiff, available to show the plaintiff and her children actually in residence. However, as said before. I am unable to place the slightest scintilla of value on these submissions.

3. The defendant answered an advertisement, for rent or sale of the premises in 1976. The plaintiff denied that she had given any instructions to sell the premises. I note there is no evidence before the Court to show the extent of the scope of the agency given by the plaintiff to her friend or to Mr. Lawrence Lee.

4. The next matter for consideration is that in 1979 re-develop-ment or re-construction proposals were evidenced by a letter from the Building Ordinance Office P12. This must be considered in relation to the plaintiff's bona fides. There were discussions between the plaintiff and the defendant with Miss Ong acting as an interpreter when the plaintiff originally stated she wished to sell the premises for $7 million and came down to $6 million, because there was a sitting tenant. The defendant testified at this meeting he initially offered $4 million and raised this to $4.5 million, being the maximum consideration for which he could arrange finance.

5. The plaintiff claims that she wishes to reside at 29 Lugard Road and this was the motivation for the issue of her writ. The defendant in effect asserts that it is only when she was unable to sell the premises, at her price, that the present proceedings were commenced.

6. The plaintiff during the course of her evidence in response to a question from the bench claimed that she did not know the current market rent for the premises owned by her. This I considered to be clearly untrue and reflected most adversely on her credibility.

7. It was put to her that she shared a bedroom with Mr. Yip but this was denied.

8. Mr. Mills-Owens endeavoured to cross-examine, as to the source of the plaintiff's money. This was objected to by Mr. Charles Ching "It matters not whether she begged borrowed or stole the money", and I refused to permit cross-examination particularly into areas prior to her purchase of the Lugard Road premises in 1970. However, I was cognisant of the fact that the plaintiff stated that she will sell her jewellery, in order to make ends meet if necessary. I believe looking at the life style she has enjoyed over the past decade that not all her sources of income have been disclosed.

9. The plaintiff also claimed that she owns no other real property in Hong Kong. I assume that the defendant's solicitors have taken steps to ascertain whether the plaintiff's name appears on property registers. This assumption is verified by the obvious depth of research undertaken by the defendant's advisors on other aspects. The plaintiff is not inexperienced in owning property through a nominee, holding pursuant to an instrument creating a trust with the plaintiff as sole beneficiary.

49. 10. The plaintiff, it was submitted seemed reluctant to disclose the existence of her account in Nicaragua, also that jewellery in Taiwan was not initially disclosed and that this should be adverse to her. I take these submissions into account.

50. 11. The plaintiff, it is alleged only commenced her action, after a sale to the defendant fell through. And further that she had submitted plans for re-construction of the premises, after which she would reside in part of the premises only. It was also urged upon me that the plaintiff need only reside in the premises for twenty-four months, thereafter being able to sell the premises at a very substantial price and escape the penalties imposed by Section 53, subsections (7), (8) and (7B), (7C), (7D) added by ordinance No. 6 of 1980 section 9.

51. 12. The history of the plaintiff travelling to many parts of the world led to a submission that she would not be a resident in the true sense of the word. The plaintiff, however, in cross-examination explained that she has disposed of her business interest in Costa Rica and stated quite unequivocally that she wishes to reside in this house for the "rest of my life". However, at a meeting between the parties in, I think 1979, there was an expression of intent to the defendant through Miss Ong that the plaintiff would live in Hong Kong using the premises as a holiday residence.

52. 13. It was stated by Miss Ong that the plaintiff claimed she had a restaurant in London. The plaintiff in her evidence stated that she has never had such an interest. I view the statement to Miss Ong is being analagous to an "advertising puff" proffered to gain or keep face.

53. 14. I believe some aspects of the plaintiff's evidence and her preparation for this hearing, were in the nature of an attempt to "put legs on the snake". The picture painted of the conditions obtained by the plaintiff in living in the premises provided by Mr. Yip, rather than as a rich woman obtaining separate superior accommodation falls into this category.

54. 15. Another aspect which I have considered is the fact that the plaintiff's parents never resided with her on the Peak. They then lived in Tin Po Building, Fa Yuen Street. This was explained by the plaintiff as being due to the fact that her father's friends all lived nearby this convenient for them.

55. 16. What caused me concern, is that the plaintiff still maintains a residence in Costa Rica. The evidence was not clear as to what type of residence, this is however, at the very least, a residence of such quality, that the plaintiff can, I assume confidently, leave US$20,000 there rather than deposit this sum in one of her bank accounts. This no doubt, could mean, that the plaintiff intends to holiday in Costa Rica from time to time where a son at present reside, although the younger will leave that jurisdiction at the end of the current accademic year.

Conclusion as to "reasonably required"

56. On all matters where the plaintiff's evidence is in conflict with the defendant or his witnesses, I prefer the evidence adduced by the defence, this after making allowance for natural errors of perception and recollection. Further on some peripheral issues, for example the plaintiff's professed lack of knowledge as to current market rental for the Lugard Road house, I have rejected the plaintiff's evidence because of the lack of credence, I am unable to give to these aspects of her testimony.

57. I am left to consider the essential aspect of the plaintiff's evidence namely her expressed intention to reside in the house "until I die". This in the context of the unsatisfactory evidence given by her in relation to the letter from the Building Ordinance Office as to redevelopment. By unsatisfactory I include the plaintiff's demeanour.

58. I am also deeply conscious of the plaintiff's professed lack of earnings. Totalling at present, on her evidence $20,000 per month, and if she were to be successful $10,000 per month. This in circumstances where the plaintiff has enjoyed a "jet set" life style. I did not believe the plaintiff, when she said that any shortfall woule be met by selling jewellery or using cash resources. I consider it inherently improbable that someone who has amassed such a fortune as the plaintiff has, would at this late stage in life, live of capital and sell jewellery comprising part of that capital.

59. The effect of her evidence was that by continuing to reside with Mr. Yip, she would maintain rent free accommodation and keep on receiving $10,000 per month rent from the suit premises.

60. I am firmly of the view that the plaintiff has failed to disclose to me the whole truth as to her sources of income.

61. Another matter which I have to consider is whether the plaintiff has proved to me that she does not intend to reside in the premises for two years and then sell such premises.

62. With the view formed as to the law which I discussed earlier, the plaintiff need not prove to me that she does not intend to re-develop the premises into two separate units and reside personally in one. This situation I believe to be entirely permissible and indeed in the context to living in Hong Kong, this could be viewed as being somewhat analogous to subletting. Indeed in different social and financial environments, officers of the Social Welfare Department, an arm of Government, advise subletting.

63. In view of the conclusions, I have come to as to the plaintiff's lack of candor as to her earnings, a lack of credence which can be attached to the peripheral aspects of her evidence, it is with the utmost skepticism that I viewed her evidence as to the ultimate issues.

64. I have found myself forced to accept the plaintiff on the ultimate issue i.e. her expressed present intention to reside in Lugard Road for the rest of her life. Looking at the totality of the position in context: she owns the property, and has previously resided there. I believe that at this later stage she wishes to be a filial daughter. She has children, two of whom are living with her, one who together with her husband and two grandchildren of the plaintiff are in a position to visit her regularly, and another who may reside with her sometime in the future. With such family commitments a large residence is desirable. Also to someone with such a background as the plaintiff as disclosed to me by Mr. Mills-Owens during argument, in the absence of the plaintiff despite protestations and recriminations by Mr. Ching, there must surely be an element of face to be gained by living in a garden house on the Peak.

65. I closely observed the plaintiff during her evidence, being assisted in this by having a services of a Court Typist, and determined that there was no inherent im probability to her answers on the all important matters. I am satisfied that she was telling the truth.

66. She has established these issues to my satisfaction well beyond the balance of probabilities. I would add it was with some reluctance that I found myself forced to these conclusions because of the lack of candour shown as to her earnings and my adverse findings as to credibility on other matters.

67. The plaintiff has established to my satisfaction, upon the balance of probabilities that she bona fide reasonably requires possession of the Lugard Road house property as a residence for herself and some members of her family.

Thoroughly unjust

68. Once the plaintiff has established on the balance of probabilities that she bona fide reasonably required possession of the Lugard Road premises for occupation as a residence for herself and her family then she is, as a matter of law entitled to an order for possession of such premises, unless and until the defendant/tenant satisfies the Court under Section 53(2)(b) on the balance of probabilities that such an order for possession would in all the circumstances of the case "manifestly not be just and equitable" or as put by the Court of Appeal in Chow Wing v. Yuen Chi Hung & Wong Pak Ping⁽¹⁰⁾ would be "thoroughly unjust". I have taken into account the youngest son of the plaintiff, a person not independently nominated in the legislation. I am firmly of the view that family circumstances, including siblings together with other of defendant's relatives residing or proposed to reside there must be taken into account.

The defendant's circumstances

69. Mr. Kremmel, an Austrian national, aged 32 lives with his wife Eva, his 6 year old son and his 3 year old daughter at 29 Lugard Road. He runs import and export businesses mainly in household and sport wares holding a 1/3 interest in five companies all based in Hong Kong. Also living at the premises are a couple employed as servants and with them their daughter, and two German Shepherd dogs. I have specifically mentioned the dogs as Counsel laid some minor stress upon their being part of the defendant's household. As stated earlier he pays $10,000 per month to rent the residence and fittings.

70. The defendant commenced business in April of 1971 and has obviously prospered. He receives a salary of $22,500 per month, his wife $5,000 per month. Included in his emoluments is the rent for the Lugard Road premises his servants salaries, cost of utilities, the running of 2 cars with Chauffeur for one, medical benefits and school fees.

71. He has no income, other than his salary and allowances, as his companies have never declared dividends, all profits having been ploughed back into each respective enterprise. The family holidays once per year in Austria on a skiing holiday. Including this visit he visits Europe twice per year and leaves Hong Kong on short trips about 10 times annually. At the present time Mr. Kremmel believes he could probably finance a purchase of residential accommodation, at about $6 million. Neither the defendant or his wife own any real property in Hong Kong or Austria.

All the circumstances

72. The circumstances must include circumstances personal to the landlord to the tenant and relevant to the premises, also matters personal to members of both the landlord and the tenant's families who are affected or would be affected by the making or refusing of an order. Alternative accommodation, if any available, for the parties and if available, the suitability and cost of such premises. Hardship bearing on each party and their families must also be relevant.

73. I have not attempted an exhaustive catalogue of circumstances.

74. I now turn to consider some of the circumstances which in this case are relevant.

1. The size of the premises

75. The plaintiff at present occupies 120 sq. ft., together with her sons and has use of communal living facilities of a 500 sq. ft. flat in Mongkok. Despite this her conditions are not as uncomfortable as one might suppose. Mr. Yip, the tenant of these premises is obviously a close friend, god-father one of the plaintiff's sons and she does not have to pay rent or contribute towards cost of utilities, or the cost of a servant provided by Mr. Yip, also food, costs are in the main paid, for by Mr. Yip. I would add Mr. Yip is a "partner" of the plaintiff in her piling contracting business. The exact partnership relation ship was never made clear.

76. The Lugard Road premises are materially different from those at present occupied by the plaintiff.

77. The defendant would, if an order were made, necessarily, live in vastly different conditions if he were to pay the same or even double the amount of rent at present paid.

2. The size of the families

78. The plaintiff's family at present comprises three persons. However, if the plaintiff's evidence were to be accepted in its entirety (including these aspects I must otherwise ignore e.g. the intention of her daughter) she would have residing with her; her eldest son, her two aged parents, her youngest son, her daughter, a son-in-law, her daughter's two children and possibly her second son, if he fails to obtain entry to a University in the United States. When one takes into account all these persons if the plaintiff's expression of intent are (a) to be believed, and (b) to be put into effect then the space would be utilized extensively. In future there could be nine or possibly 10 persons not including servants. However, I ignore the daughter and her family and the son whom it is hoped will attend University. This leave five persons whom I can reasonably accept as comprising the plaintiff's household. I would also assume that the plaintiff contemplates the employment of a servant, as the reason for leaving the Lugard Road premises in 1972 was that she did not have a servant.

79. On the other hand, the defendant's family comprises 4 persons to which may be added the couple employed by him for domestic help.

3. Family income

80. The plaintiff's personal income is $20,000 per month, to this can be added $1,200 per month income received by her elder son working as a salesman. If the plaintiff were to obtain possession her income would reduce by $10,000 i.e. the amount of rent received. If she were to re-develop the premises by creating two apartments, there could be a substantial accretion to her income.

81. The defendant and his wife's salaries together with their other emoluments have been dealt with earlier. He is in a position to pay $10,000 odd per month rent with his current rental allowance and so long as his companies continue to prosper he could draw a larger allowance.

4. Other properties

82. Both the plaintiff and the defendant gave evidence as did the defendant's wife, but no member of each of the respective families own any real property other than the plaintiff who owns the premises, the subject of this action. I accepted the evidence adduced on behalf of the defendant and also accepted the plaintiff's evidence, although bearing in mind that she is no stranger to concealing ownership of real property.

5. Alternative accommodation

83. The defendant has no alternative accommodation immediately available other than what he can obtain in the open market. He does have an allowance. The plaintiff's accommodation alternative to the suit premises are the premises she occupies at present, and it would appear that the plaintiff's parents' have alternative accommodation available at the stone hut. The plaintiff's present accommodation, cannot compare with that at Lugard Road even if there were to be more nine or ten persons not including servants occupying the house. Nothing hangs on this head.

6. Schools

84. The plaintiff's youngest son attends St. Stevens School and it would appear likely although there were no direct evidence as to this, that geographically it would be more convenient if she were to occupy the Lugard Road premises rather than the premises at present occupied in Mongkok. The defendant's eldest child, Max attends the German Swiss Intermediate School, will later attend the German Swiss International School as will the younger child Maria. There was no real stress laid on this, but I think this is an underlying assumption accepted by Mr. Ching. In any event the defendant could obtain accommodation somewhere in the Peak area subject only to his ability to pay rent and in such case, there would no hardship operating on the children. Mrs. Kremmel drives a car supplied by her husband's company and there is another car together with chauffeur. It is unlikely that either child would be seriously inconvenienced.

7. Relative Financial hardship

85. If an order were to be made, the financial implications for the defendant, and his family are substantial. I must observe, not horrendous as occurs in many cases brought pursuant to Section 53(2)(b). To obtain equivalent alternative accommodation, he would have to pay at his own estimate $25-35,000 per month a figure which I believe to be substantially under stated.

86. Mr. Mills-Owens raised an interesting argument in this regard, namely that if interest were to be calculated at 12% per annum, for every $1 million borrowed by the plaintiff to purchase alternative accommodation, this would cost him $10,000 per month. It 18% this would cost $15,000 per month for every million dollars borrowed. Such and a calculation allows nothing for repayment of capital.

87. I believe this argument to be fallacious and devoid of merit. It avoids the comparison of like with like i.e. rented premises with rented premises. Even if it were germane to the consideration of "thoroughly unjust", other factors are ignored e.g. property values in Hong Kong have been known to inflate by more than double over a period of less than 2 years, this within immediate recent memory. If the accretion to value were to be assessed as it should be, on this basis the defendant could possibly be shown to obtain a net financial gain if he were to occupy other premises.

88. For purposes of considering financial hardship, I would accept that the plaintiff has to pay in the region of $25,000-$50,000 per month for premises, a house, garden flat or a high rise apartment, to put him in the position where he enjoys superior accommodation as at present enjoyed, and although the plaintiff's company would meet the cost of this in the long run, the plaintiff himself as a 1/3 shareholder and each of his companies would suffer.

89. On the other hand, if an order were not made, there is no increased financial burden operating against the plaintiff and her family. To the contrary there would be a dimunition of income of $10,000 per month from loss of rent if she were to succeed.

90. In considering relative financial hardship, it is clear that the defendant would suffer considerably more if an order were made than would the plaintiff if she fails in her action provided she continues to enjoy the license to live with Mr. Yip.

8. Quality of life

91. The defendant said in evidence that everyone in Lugard Road owns a dog. There was no evidence adduced as to the necessity or reason for the defendant owning dogs. In closing submission, Mr. Mills-Owens seemed to think that this was related to the presence of undesirable persons in a lonely secluded area but Mr. Ching expostulated "to keep away snakes". I certainly don't intend to take any judicial notice of a possible reason, but do take judicial notice that it may not be desirable, in the dogs' interests, to have them residing with the defendant in a high-rise apartment.

92. I am of the view that the welfare of the dogs cannot be a material factor bearing upon my judgment, but that the defendant and his families enjoyment of the company of animals contributes to their present superior quality of life.

93. I accept that the defendant enjoys a beautiful garden tended by a gardener, a spacious home, every bedroom with a bathroom, a study room, a T.V. room and living and dining areas of comfortable proportions. He has during cloudfree days, one of the most spectacular city views in the world, and in so far as it is possible in Hong Kong, the advantages of a "country life", within close proximity to his place of work. I hold that the defendant's quality of life would suffer considerably if an order were to be made.

94. The plaintiff on the other hand, would materially improve her quality of life if she were to obtain possession even if her parents, her daughter, son-in-law, two grandchildren and her second son were all to reside with her in addition to the two other sons.

Conclusion

95. The plaintiff does have an alternative, she may remain in her present premises as long as Mr. Yip permits her to remain as a licensee. There have been no evidence to show either that the plaintiff's sister-in-law, Mr. Yip's landlady wishes to seek possession of the premises, or that Mr. Yip wishes to terminate the present licensee relationship. However this alternative does not reasonably allow for the plaintiff to have her parents stay with her and represents vastly inferior accommodation to that possible in Lugard Road.

96. The defendant has no alternative in mind. It is his ambition to purchase the premises in question. He at one stage having offered $4.5 million and at present being a position to finance a purchase at $6 million. The defendant I believe wishes to use the legislation to his own benefit and it is obvious that he would be prepared to offer $6 million for these premises. It is also obvious that the premises are worth considerably less with a sitting tenant. I do not believe that any tenant hoping to purchase premises from his landlord should be able to claim the benefits of being a sitting tenant as one of the grounds of establishing that the making of an order would be "thoroughly unjust".

97. In considering relative hardship, I have taken the view that this does not place substantial weight on either side of the scales.

98. As far as quality of life is concerned the plaintiff would benefit and the defendant is likely to suffer substantially if an order is made.

99. I have no doubt that any ordinary person would hold that the making of an order has not been shown by the tenant on the balance of probabilities to be thoroughly unjust. I share this view.

100. There will be judgment for the Plaintiff as follows:-

Representation:

(1) 1963 2 Q.B. 426

(2) V.C.J. 8939 of 1980

(3) 1933 SLT (SH. CT.) 21 at 22

(4) 1977 1 Q.B. 837 at 844

(5) VCJ A1910 of 1980

(6) VCJ A7083 of 1980

(7) The Rent Acts Vol. 1 P.294

(8) (1946) 17 S.L.T.

(9) [1946] 2 ALL E.R. 261 C.A.

(7) 1950 2 K.B. p.237

(10) Civil Appeal 145 of 1980