Henry G. Leong Estates Ltd v. Kam Yan Mee

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

ACTION No. 307 of 1947

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Coram: Mr Justice T.J. Gould

Date of Judgment: 21 January 1948

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Decision on Inter Partes. Summons for Summary Judgment

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1. This is a summons under section 23 of the Code of Civil Procedure for leave to proceed to judgment and execution upon a specially endorsed writ. Before dealing with the merits of the application, I desire to refer to a submission by counsel for the defendant in the course of argument as to the practice in England on similar applications made under Order 14 of the Rules of the Supreme Court from which section 23 of the Code of Civil Procedure is drawn. Counsel stated that the Court, in giving leave to defend, can act merely upon counsel's assurance that he has an arguable defence. If this is so (and I must say that the submission surprises me) the practice is contrary to the provisions of Order XIV and must render any application under the latter a waste of time and money. Rule 3 of Order XIV makes provision for the defendant to show cause by affidavit or oral testimony and permits the judge to order production of documents. There is authority for saying that the defendant's affidavit (or presumably any other evidence that he may bring) must "condescend upon particulars" - a base denial would not usually be sufficient. The proper practice, I consider, is that where facts are in dispute, the conflict must be brought to the notice of the Court by evidence properly put in - whether it be by affidavit or (by leave) oral; if documents are relied upon, they should be verified unless admitted by the other party. Where a defence in law is relied upon, that defence could properly be based upon facts alleged and put in evidence by the defendant as aforesaid or upon any facts pleaded or otherwise admitted by the plaintiff. This, I believe, has been the practice in Hong Kong.

2. In this action, the plaintiff claims possession of certain business premises in respect of which on the 2nd September, 1947 the Governor in Council made an order of exemption from the provisions of the Landlord and Tenant Proclamation (No.15) (hereinafter called "the Proclamation") under powers conferred by the proviso to Article 6. The terms of the proviso are as follows:-

It is not challenged that on the 2nd December, 1946, the plaintiff applied to the Tenancy Committee for a recommendation under this proviso. According to the affidavit of the Chairman, the Committee considered the certificate of the Building Authority approving plans for a bank building on the premises in question and a statutory declaration by the managing director of the plaintiff company. The solicitors for the defendant (and other tenants) were permitted to make copies of the application and statutory declaration and on the 2nd April, 1947, the said solicitor made written representations accompanied by statutory declarations in respect of the said application. The recommendation of the committee was made only after full consideration of the representations and statutory declarations of the plaintiff and of the tenants. On the 23rd May, 1947, the Landlord and Tenant Ordinance, 1947, (hereinafter referred to as "the Ordinance") came into force and the Proclamation was repealed. It does not appear from the affidavits whether the recommendation of the Tenancy Committee went forward before or after that date but as abovementioned, the Governor in Council granted exemption from the provisions of the Proclamation on the 2nd September, 1947. The order was made subject to a condition which has been fulfilled. Under the provisions of the Ordinance, the power of the Governor in Council to make exemption orders is not (in the case of applications in respect of particular premises) to be exercised save upon the recommendation of a Tenancy Tribunal specially appointed by the Chief Justice; various provisions are made as to notice to interested parties and for the purpose of determining who shall be entitled to be heard by or make representations to the Tribunal.

3. The question for my decision is whether on the foregoing facts there is a bona fide triable issue between the parties - a reasonably arguable defence in point of law. Counsel for the defendant quoted a case (No.241 of 1947) in which leave to defend was given in this Court in similar circumstances but the record shows that the order in that case was made by consent and I am not therefore assisted by it. As I gather the grounds of defence which counsel desires to argue, they are three in number:-

Subsidiary defences raised in the defendant's affidavit that the statutory tenancy had been replaced by a new tenancy by the acceptance of rent subsequent to 31st January, 1947, and by the delivery of a notice that the rental would be increased in certain circumstances were not argued by counsel for the defendant and I will not therefore deal with them in full. It is sufficient to say that they appear clearly to have been determined against the defendant in the circumstances of this case by settled authority. The issue then becomes one of the effect, and the validity or invalidity, of the exemption order.

4. Counsel for the plaintiff submitted that all matters of defence raised on behalf of the defendant were already decided against the latter by judgments of the Full Court in Hong Kong and by Courts of Appeal in England. The position of applications to Tenancy Tribunals in Hong Kong which were pending at the date of the repeal of the Proclamation was considered by the Full Court in the recent case of Leung Sin Chi v. Francis Britto (T.T.A. 15/47), in which the facts were that an application for eviction was lodged during the currency of the Proclamation on the ground that the opponent was a statutory tenant and that the landlord required the premises for her own occupation and that of her family. In deciding such an application under the Proclamation, it was not open to a Tenancy Tribunal to take into consideration relative hardship. Before the application came to be heard, the Proclamation was repealed by the Ordinance under the corresponding provisions of which relative hardship was a factor to be considered. The Tribunal hearing the application did consider hardship and on appeal the Full Court reversed the Tribunal's decision, holding that rights which had accrued under the Proclamation were preserved (notwithstanding its repeal) by virtue of section 12 of the Interpretation Ordinance, 1911. It was held further (to quote from the judgment of the learned President) that "..... a mere right existing in members of a community or any class of them to take advantage of an enactment, without any act done by an individual towards availing himself of that right cannot properly be deemed an accrued right (Abbott v. Minister of Lands 1895 A.C. 425 at 431). But if a party sets the law in motion during the existance of the repealed enactment then, even though the law is altered during the pending of the action, the rights of the parties will be decided by the law as it existed when the action was begun, unless the new legislation shows a clear intention to the contrary, for a statute is prima facie prospective." In Leung Siu Chi's case the issuing of the application was a step setting the law in motion and giving the applicant a vested right to obtain an eviction order against the opponent provided he proved his case to be within the provisions of the law as it then stood.

5. The present case is parallel in that an application was made under the Proclamation, not for an eviction order, but for exemption of the premises in question from the terms of the Proclamation. What, then is the right which accrues upon the lodging of the application? It would appear to be a right to have that application determined under the terms of the Proclamation (I do not deal now with the argument that the new machinery provided under the Ordinance represented a change in procedure only, and so, perhaps, to be treated as retrospective). This right has been exercised and on the assumption that the exemption order was properly made, it is necessary to look at its effect. Assuming that it had been made during the currency of the Proclamation, but that the Ordinance had been passed before the occupier had been evicted, the position would have been clear; for although there is no exception in section 3 of the Ordinance, of premises exempted from the Proclamation by order of the Governor, the occupier as from the date of exemption would no longer be a statutory tenant but a trespasser and not within the definition of the word "tenant" in the Ordinance. But in the present case, the exemption was granted after the repeal of the Ordinance and at the date of passing of the Ordinance the defendant was still a statutory tenant and so within the definition of "tenant", in section 2(n) (reading that defective definition in the only way that appears possible). The defence which I assume counsel had in mind, for he did not formulate it except in general and rather vague terms, would be that the accrued right preserved to the plaintiff by the Interpretation Ordinance, 1911 goes only as far as the obtaining of the exemption order and not to subsequent eviction (the latter being in the circumstances a common law right and not one conferred by the Proclamation); on this basis, the defendant falling within the definition of "tenant", and the premises being within those described by the Ordinance, the provisions of the latter apply. In Leung Siu Chi's case, the proceeding which had been commenced was one which was held to preserve the right to obtain an eviction order from a Tribunal exercising powers conferred by the Proclamation. In the present case, the application which was made was for an order which would have the effect of remitting the plaintiff to his common law position; his right to commence further proceedings for eviction was not one conferred by the repealed Proclamation, and therefore did not receive the protection of section 12 of the Interpretation Ordinance, 1911, and was taken away again by the Ordinance.

6. Whatever view I may take of this defence, I am not prepared to say that it cannot be the subject of reasonable argument and therefore in pursuance of the principles which govern applications under this Order, I give leave to defend. It therefore becomes unnecessary for me to consider the remaining submissions.

7. Costs of the application will be in the cause and I have already certified for counsel. By consent, this decision applies also to similar applications in O.J. Actions Nos. 305 & 306 of 1947.