Anthony Lee v. Caterpiliar for East Ltd

DCCJ008312/1980

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT VICTORIA

CIVIL JURISDICTION

ACTION NO. 8312 OF 1980

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Coram: Judge Bokhary in Court

Date of Judgment: 7th August 1981.

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JUDGMNET

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1. This oase has raised certain points of some general importance, and I am grateful to the advocates on both sides whose helpful arguments have enabled me to give judgment straightaway.

2. The Plaintiff, who is also known as Lee Hoi Nin, is the registered owner, in that name, of a duplex flat at 119A Repulse Bay Road, Block H, 11th and 12th floors, Hong Kong. It is common ground on the pleadings that this flat (to which I will refer as 'the suit premises') forms part of an entirely new building the Occupation Permit in respect of which was granted after August 16, 1945; that it had been let to the Defendant, a limited company, for domestic purposes only for a term of 5 years commencing on December 1, 1975 (and therefore expiring by effluxion of time on November 30, 1980) and that it is being and has always been used by members of the Defendant's staff and their families for domestic purposes only.

3. I am satisfied on the Plaintiff's evidence that no key or construction money or other premium of a similar nature has been paid.

4. The Plaintiff pleads that he reasonably requires the suit premises as a dwelling by himself and 'his family'. This is denied by the Defendant in its Defence.

5. The Defendant concedes that it is a substantial corporation and as such cannot invoke the proviso to Section 53(2)(b) of the Landlord & Tenant (Consolidation) Ordinance, Cap. 7. I am not concerned with whether or not a substantial corporation or any corporation can ever invoke this proviso. I am satisfied that it is, if I may say so, sensible of Mr. Radcliffe, who has conducted the Defendant's case with admirable skill and judgment throughout, to refrain from seeking to rely on the proviso in this case.

6. In the result, I am not required to consider what has commonly been called 'the just and equitable provision'. I have only to consider the reasonableness or otherwise of the Plaintiff's requirement. It is not suggested that it is other than genuine. I am satisfied that it is.

7. At the present time the Plaintiff lives in a flat in Kennedy Road, namely, Flat D, 10th floor, Phoenix Court, Block 3, Kennedy Road, Hong Kong (to which I will refer as 'the Kennedy Road flat').

8. The Kennedy Road flat is about 1,000 square feet in size, which is only about a third the size of the suit premises, which is about 3,000 square feet in size.

9. There are only 3 bedrooms in the Kennedy Road flat. The Plaintiff and his wife use one, their daughter (who is almost 5 years old) uses another, and the remaining one is used as a study. There are no servant's quarters. The Plaintiff's domestic servant sleeps in the kitchen. The Plaintiff's mother-in-law stays at the Kennedy Road flat on alternate nights. She sleeps in the living room during her overnight visits.

10. There are 4 bedrooms in the suit premises. The Plaintiff said that if he were to gain possession of the suit premises, he and his wife would use one, their daughter would use one, his mother-in-law (who would stay with them no more or less frequently than she does now) would use one, and one would be used as a study. There are servants' quarters in the suit premises; and, naturally the servant would use the same. It was not disputed that the suit premises would be so used if the Plaintiff succeeded. I accept that they would be.

11. The rent for the Kennedy Road flat is $3,600 per month inclusive of rates. This includes one car parking space. The Plaintiff, who has 2 cars, hires a second car parking space at $1,000 per month.

12. The rent for the suit premises is $9,375 per month exclusive of rates. It has 2 car parking spaces.

13. There are 2 broad bases upon which the Plaintiff contends that his requirement is reasonable. First, it is contended, he faces the danger that in proceedings which are likely to be heard next month, his own landlord would obtain possession of the Kennedy Road flat. Secondly, it is contended, it is reasonable having regard to his needs that he have the use of a flat such as the suit premises rather than one such as the Kennedy Road flat.

14. In his final address Mr. Radcliffe took a point on the pleadings. In response to a request which referred to the words 'reasonably requires' and asked him to '.... state precisely the reason or reasons for the .... alleged requirement and all matters relied upon to establish that the alleged requirement is reasonable ....', the Plaintiff had, through his solicitors, supplied further and better particulars stating that he '.... reasonably requires the suit premises for his own use as he is being evicted by his landlord from his present residence ....' Mr. Radcliffe conceded that he would not be able to resist an application to amend so as to enlarge the pleaded basis of reasonable requirement and that even in the absence of any amendment I have a discretion to allow reliance on what I have referred to as the second basis of reasonable requirement relied upon. He also indicated, in response to questions I asked him, that he would not seek to cross-examine further if I allowed an amendment or exercised my discretion in the way I have just mentioned.

15. In my view, Mr. Radcliffe's concessions and attitude are eminently sensible.

16. He invited me not to exercise my discretion in the Plaintiff's favour. In all the circumstances, I felt that I ought to exencise my discretion in the Plaintiff's favour and I so ruled during the hearing. Since the restrictive manner in which the particulars put the Plaintiff's case has not caused the Defendant to conduct its case in way different or irreversibly different from the way in which it would have been conducted if the particulars been less restrictive, I can see no prejudice to the Plaintiff resulting from the way in which I have exercised my discretion.

17. Mr. Radcliffe argued that even if I allow the Plaintiff to rely on the second basis, I should attach little weight to it as an afterthought. This is certainly something which I have to consider carefully.

18. I asked Mr. Radcliffe what he says as to the merits of the second basis, putting aside the question of afterthought for the moment. He said that while the Plaintiff would be better off in the suit premises, that is as far as it went in all the circumstances and the level of reasonable requirement had not been reached.

19. As to the first basis, Mr. Radcliffe said that unless and until the Plaintiff's own landlord succeeded against him in the action for possession of the Kennedy Road flat, it was premature for him to assert a reasonable requirement.

20. Mr. Fan, who presented the Plaintiff's case with brevity which involved no sacrifice of clarity, put the significance of the word 'reasonable' as it appears in Section 53(2)(b) at the forefront of his argument on both bases of requirement.

21. In my judgment, he was right to do so. It is the pivotal word in the scheme of the section.

22. If premises of which possession are sought were merely more spacious or had a better view or were in a more attractive or convenient locality than a Plaintiff's existing accommodation, his requirement may well be other than reasonable within the meaning of the section; although, even then, the objection to his claim may be more powerful in the context of the just and equitable provision. Where, however, the situation is of the sort where he has a domestic servant who sleeps in the kitchen or a mother-in-law who has to sleep in the living room during her frequent overnight visits, it is difficult to see how his requirement of premises which he owns and in which inconvenience of this sort would not arise can be other than reasonable.

23. In my judgment, on the second basis alone, the Plaintiff's requirement is reasonable.

24. This is sufficient to dispose of the case. However, I feel that as the first point may arise in other cases it would be a regrettable waste of the helpful arguments which I have had from Mr. Fan and Mr. Radcliffe not to express my view thereon.

25. In my judgment, the existence of viable proceedings for possession of the premises in which a person lives does as a general rule bring about a reasonable requirement of premises which he owns and which can be made the subject of an application under Section 53(2)(b). It is not unreasonable for someone to want to be free of the anxiety of legal proceedings concerning the very roof over his head. The just and equitable provision would, of course, still fall to be considered where applicable. The circumstances under which that provision can fall to be considered are, of course, many and varied. While one can probably safely say that unless there is something special in the case, one would not expect to see Plaintiffs in that position failing under that provision very often, it would be unwise to generalise further.

26. In all the circumstances of this case, I am of the view that the requirement generated by the first basis is also reasonable.

27. Thus far I have considered the 2 bases separately. It was more convenient to do so. But no misunderstanding should arise. If necessary, however, the 2 basis can be considered together. It is not inconceivable that there will be cases where similar bases arise and where the requirement under each basis is insufficient on its own but reasonable when taken one with the other. This combination is also possible for the purposes of the considering the just and equitable provision.

28. Accordingly, I make an order for possession of the suit premises in the favour of the plaintiff together with the mesne profits as claimed in so far as they have not been paid; and I award the plaintiff costs to be taxed on the upper scale if not agreed. I now invite argument on a stay of execution if no agreement in relation thereto can be reached.

[Argument as to stay]

29. I order a stay of 3 months from today.

[Argument as to costs]

30. Mr. Radcliffe sought to persuade me that no order should be made as to costs. He submitted that where, as in the present case, a tenant does no more than what is plainly reasonable for him to do in testing a landlord's case for an order for possession under Section 53(2)(b), he ought not to be made to pay the landlord's costs even if he loses and an order for possession is ultimately made in the landlord's favour. Mr. Radcliffe has, he tells me, made this submission on 2 previous occasions. He failed then. I am afraid that despite the force of his argument he also fails now. I decide against him with some regret. Any course which would or might have the effect of encouraging litigants to behave reasonably holds much attraction. But it is, it must be noted, not impossible for a tenant to avoid litigation. He can, for example, simply deliver up vacant possession thus terminating the tenancy under Section 53(1)(a). Even a party who has acted reasonably has often - indeed, usually - to pay the other side's costs if he loses. If someone were to fight a case on the advice of counsel and solicitors, win at first instance and in the Court of Appeal only to lose in the Privy Council, it would be difficult to say that he acted unreasonably whether in resisting the appeal before the Privy Council or at any other stage of the litigation. But this lack of unreasonableness would not of itself save him from having to pay to the other side's by then very considerable costs.

31. The Plaintiff has also acted reasonably; and he has won. I do not feel able to deprive him of his costs.

32. As this is the third time Mr. Radcliffe has made this interesting submission in this Court, I thought it appropriate to put something in writing about it.

Representation:

Peter Fan of Alfred Lau & Co. for the Plaintiff.

E.W.D. Radcliffe of Deacons for the Defendant.