Lee Lung on v. Chan Wai Choy t/a Bun Wah Store and Others

Case No.HCA 5319/1980

Court

High Court CFI

Date20 Jul 1981

Judge—

Case Document

100%Judiciary

HCA005319/1980

Premises let for business purposes - use as dwelling by sub-tenants - protected on proof of domestic primary user and acquiescence by landlord.

	IN THE SUPREME COURT OF HONG KONG	1980 No. 5319
	HIGH COURT

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BETWEEN
	LEE LUNG ON	Plaintiff
	and
	CHAN WAI CHOY trading as BUN WAH STORE	1st Defendant
	CHENG TAK MAN	2nd Defendant
	CHOW CHUN LAN	3rd Defendant
	CHENG HO LUNG	4th Defendant
	CHEUNG ON LUN	5th Defendant

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Coram: Bewley, J.

Date of Judgment: 20 July 1981.

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JUDGMENT

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1. By a tenancy agreement dated 11th September, 1978, the plaintiff let to the 1st defendant, for business purposes, the ground floor of No. 2 Yuen Ngai Street, Kowloon, for 2 years from 1st September, 1978, at the rent of $3,200 per month.

2. The agreement was ratified by the Commissioner of Rating & Valuation on 22nd November, 1978 and Part V of the Landlord and Tenant Ordinance accordingly no longer applied to the tenancy.

3. By clause 2(e) of the agreement, the 1st defendant agreed not to assign, or sublet, or part with possession of the premises or any part thereof.

4. The plaintiff, on 12th February, 1980, through his solicitors, served on the 1st defendant a notice of termination, which expired on 31st August, 1980. He was unable to obtain vacant possession and, on 19th September last year, he issued this writ. It originally named only the 1st defendant, but was amended on 20th November to include 2nd to 5th defendants. Judgment was given against the 1st defendant, in default of appearance, on 28th February this year. He had by then vacated the premises, but his subtenants remained in possession.

5. There are now residing in the premises the 2nd to 5th defendants, who claim protection under Part II of the Ordinance, on the grounds that they are lawful subtenants of the 1st defendant and that, with the acquiescence of the plaintiff, they are using the premises for domestic purposes.

6. The history of the matter is slightly more complicated. In 1971, the tenant was one Lau On. He owned a shop, at the front of the premises, abutting on Yuen Ngai Street. Behind the shop the premises extend on a narrow rectangular plane. Into this area came, between 1971-74, as subtenants of Lau On, and for purely residential purposes, in turn the 2nd, 3rd and 4th defendants, all of whom are closely related. They had nothing to do with the shop, or with Lau On, except in his role as principal tenant.

7. Additional sleeping accommodation was found by way of a cockloft. A kitchen and bathroom were created in and near a light well in the centre of the premises.

8. Some time prior to September, 1978 - there is no evidence on the point - Lau On moved out and the 1st defendant, by assignment, became principal tenant in his stead, paying rent to the plaintiff as before. He also operated the shop at the front of the premises.

9. The tenancy agreement was made between the plaintiff and the 1st defendant in 1978 as stated. Things went on as before until, in February, 1980, the 5th defendant appeared on the scene. He was a cousin of the 2nd defendant and he also used the premises only as a dwelling.

10. The shop is now shut down; no one is living there. The 2nd to 5th defendants are in possession of the rear of the premises and they seek relief under Part II of the Ordinance. In the light of the admissions in their defence and the allegations made therein, they bear the burden of proof.

11. The main thrust of the defence is that, as the sublettings were for domestic purposes, the subtenants became protected tenants in 1971 and, by virtue of Part II, have remained so ever since, the 1978 agreement notwithstanding.

12. The tenancy created by the 1978 agreement was in respect of the whole of the ground floor. According to that agreement, so far as the landlord was concerned, there was a covenant 'not to use the said premises except for the purpose of carrying on the lawful business of the tenant only' etc.

13. In 1980, the two year tenancy between the plaintiff and the 1st defendant determined by effluxion of time. The effect of the judgment that has now been given against the 1st defendant is to terminate all subtenancies, including subtenancies created before the 1978 agreement, which, as I have said, extended to the whole of the premises.

14. The defendants claim relief under section 53(1) of the Ordinance, which provides -

"A tenancy or subtenancy shall terminate where -

	(a)	vacant possession is delivered up;
	(b)	an order of the court under subsection (2) takes effect;
	(c)	the tenancy out of which the subtenancy was created is itself terminated:
		Provided that upon such termination this Part shall apply to any tenancy thereupon arising by operation of law."

The relevant subsection is (c). The head tenancy has gone. The sub-tenancies, to which Part II applied as between the principal tenant and the subtenants, are also terminated by this subsection.

15. The proviso, therefore, does not avail the defendants, since no tenancy arises by operation of law. Section 53(5) and (6) do not apply, in the absence of an order by the court under section 53(2).

16. But so far as the 1st defendant and his subtenants were concerned, the monthly domestic tenancies that were created from 1971 onwards continued to run until the determination of the head lease in 1980. They were, vis a vis principal tenant and subtenants, protected tenancies; the 1st defendant could have evicted the other defendants only in accordance with Part II.

17. Notwithstanding section 53(1), the subtenants may, at any time - even at this late stage - acquire protection against the plaintiff, as head landlord, if they can bring themselves within section 51(2). This subsection provides -

"Notwithstanding the purpose for which premises were let, in determining the nature of a tenancy for the purposes of this Part, the following provisions shall apply -

	(a)	in any agreement in writing between a landlord and tenant, or between a principal tenant and sub-tenant, a term that the premises shall be used for a specified purpose shall be prima facie evidence that the premises are being used for such purpose;
	(b)	notwithstanding any evidence as to whether premises were originally let as a dwelling or not let as a dwelling, premises which are being used primarily for another purpose shall be deemed to have been let for such other purpose:
		Provided that where such primary user is user as a dwelling and in breach of any term in the agreement with the landlord or principal tenant, as the case may be, then the tenant or subtenant shall be required to establish that such user has been agreed to by the landlord or principal tenant, expressly or by implication, or acquiesced in by him;"

18. The subtenants must prove both that the primary user of the whole premises was domestic and that the plaintiff agreed to or acquiesced in such domestic user. Whatever the position as to primary user - I note in this connection that the defendants' certificate of primary user relates only to the cockloft - there is, unfortunately for the defendants no evidence at all that the plaintiff so agreed or acquiesced, either before or after 1978. There is, therefore, no relief available to the subtenants.

19. I give judgment for the plaintiff against the 2nd to 5th defendants for possession, with mesne profits at the rate of $3,200 per month, from 1st September, 1980 and costs.

	(E. de B. Bewley)
	Judge of the High Court

Representation:

Mr. Warren Chan (C.Y. Kwan & Co.) for plaintiff.

Mr. Sammy Lee (Kwan & Kwan) for the 2nd to 5th defendants.