Lin Tsai Chan v. Lau Kam Ming and Others

DCCJ006925/1982

LANDLORD AND TENANT - Landlord and Tenant (Consolidation) Ordinance (Cap. 7) - sections 52(1), 52(1B), 53(1)(b), 53(2) - tenancy for a fixed term - subletting in breach of tenancy agreement - tenancy not "continuing" or deemed to be "continuing" under section 52(1) at date of writ - whether grounds for possession under section 53(2) can be invoked during the contractual term or "contractual period" of the tenancy - forfeiture - rateable value in excess of $15,000 but less than $60,000 - whether Lands Tribunal has jurisdiction to hear claims based on forfeiture - extent of Lands Tribunal's power to order payment of rent or mesne profits.

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT KOWLOON

CIVIL JURISDICTION

ACTION NO.6925 OF 1982

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Coram: His Honour Judge Downey

Date: 2 November 1982

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RULING

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1. On the 29th October 1982, I made an order transferring this action to the High Court under section 39(2) of the District Court Ordinance, cap 336. I gave brief oral reasons for doing so, and undertook to give fuller reasons in writing. This I now do.

2. By a writ, issued on the 24th May 1982, the plaintiff seeks to recover possession of the 2nd floor of 65, Granville Road, Kowloon ("the premises") on the ground that the first defendant ("the tenant") had, in breach of a tenancy agreement dated the 23rd April 1979 and contrary to section 53(2)(e) of the Landlord and Tenant (Consolidation) Ordinance (cap 7), assigned, sublet or underlet the premises' or part thereof to the other defendants ("the subtenants").  The particulars of claim alleged that the premises were let to the tenant for a term of 39 months from the 1st April 1979 at a monthly rent of $3,200, and that the tenancy agreement contained a provision against assigning, subletting, etc., the premises or any part thereof. The nature of the tenancy is not expressly stated, but it is common ground that it is and was, at all material times, a "domestic tenancy" within section 50(1) of cap 7. No date was given for the alleged "illegal" subletting etc., other than the vague averment that it occurred "at dates unknown to the plaintiff." There is no reference to any proviso for re-entry, but paragraph 10 of the particulars of claim alleges service, on the 29th April 1982, of a notice to quit informing the tenant that his tenancy "is forfeited" and requiring him to deliver vacant possession of the premises on or before the 13th May 1982.

3. By their defence, the defendants admitted the agreement and the prohibition contained therein, but alleged an earlier agreement, made in 1976 for a term of 3 years, and contended that the plaintiff had, since June 1976, consented to subletting by the tenant and/or waived any breach of the agreement.

4. On the basis of the pleadings, it was quite clear that the tenancy was a domestic tenancy to which Part II of cap 7 applies. It was equally clear that, at the date of the issue and service of the writ, the contractual period of that tenancy had not terminated by effluxion of time, or at all, unless the alleged breach operated to bring about a forfeiture, as the plaintiff appeared to allege. Accordingly, at the date of the writ, the tenancy (whether created in 1976 or 1979) was not one which was in the words of section 53(1) of cap 7, "continuing under section 52(1)." Nor was it one which was deemed to be "continuing" under section 52(1) by virtue of section 52(1C), because the contractual period of the tenancy had not come to an end before the 19th December 1981. Nevertheless, Mr. Lee contended that the plaintiff was entitled to invoke the jurisdiction conferred by section 53(2) of cap 7, transferred from the District Court to the Lands Tribunal. on the 1st October 1982, because the tenancy was one to which Part II of Cap 7 applied. From the Bar, I was informed that the rateable value of the premises was $19,200. Therefore, if the action was to be regarded as one to enforce a right of forfeiture, it was clearly beyond the jurisdiction. of the District Court.

5. In the course of his very able submissions, Mr Lee referred to various practical inconveniences which would flow from rejection of his essential contention. I am very conscious of these, and other, practical difficulties, which appear to stem from the enactment of the Landlord and Tenant (Consolidation) (Amendment)(No.2) Ordinance 1981 (i.e. Ord No 76/81), and the later implementation of the decision to transfer certain functions under cap 7 from the District Court to the Lands Tribunal. But, unless these and other factors tend or combine to produce an utterly absurd result, I consider that my principal duty is to give effect to the intention of the legislature, after properly construing the words it has adopted to give effect to its intention in the relevant statutes it has passed.

6. Furthermore, when voicing my resistance to Mr. Lee's superficially attractive submissions, I had in mind that the point in question had been considered by my brother, Cruden D.J., in WU Ka-lim, Frank v. CHAN Tin-sui, John (VCA No .4 of 1982); 7th June 1982. In that case, it was held that a tenancy agreement of domestic premises could not, during its term, be terminated under section 53(2) of cap 7, and the only tenancies which are not afforded the statutory protection of continuance under section 52 of cap 7 axe those which are terminated by forfeiture. I also had in mind dicta of my brother Wong DJ in Lam Cheuk Ki v. Lau Pui Cheung (VCA No 9373 of 1981); 20th April 1982, where it was said that the landlord's statutory rights to terminate the tenancy under section 53(2) only arise during the period of statutory extension or continuance of the tenancy after the contractual term has ended. These decisions were brought to the attention of counsel before I made my ruling. Although I have taken account of their submissions thereon, I consider that I should regard myself as bound to follow these decisions unless I think that they are clearly wrong in law. I am not persuaded that they are erroneous in law, but in deference to :Mr. Lee's submissions, I will state my reasons for coming to the same conclusion in this case.

7. Mr. Lee quite properly reminded me that in WU Ka-lim v Chan Tin-sui, supra, the point of law was conceded by the landlord's counsel. It is also clear that in the course of a fairly wide survey of the relevant statutory provisions, the learned judge did not expressly refer to the words of section 53(2) of cap 7. These constitute the foundation of Mr. Lee's submission that the plaintiff is entitled to invoke the jurisdiction conferred by section 53(2) of cap 7 during the contractual period of the tenancy. If the words used in section 53(2) are read. literally, and isolated from the words of other provisions, there is considerable attraction in Mr. Lee's submission. Section 53(2) provides:

"The Tribunal shall not make an order for possession of premises in respect of which there is a tenancy or sub-tenancy to which this Part applies unless it is satisfied that ...."

(emphasis supplied.)

8. Since the tenancy in this case is one to which Part II of Cap 7 applies (as a result of the enactment of Ord. No.6 /80), as it is a domestic tenancy within section 50(1) of Cap 7, Mr. Lee contended that section 53(2) could be invoked during the period of the contractual tenancy, and the legislature, by using the general or all-embracing words, which I have underlined, did not intend to exclude. certain categories of "domestic" tenancies, to which Part II applies, from the jurisdiction of the Lands Tribunal to make orders for possession.

9. Mr. Lee's strong plea that a court or tribunal should be slow to decline jurisdiction is one which, in general, I would eagerly accept if .I were sitting in a court or tribunal enjoying an inherent or unlimited jurisdiction, instead of one created by statute, or statutes, with ill-defined or undefined powers, express limits thereon, and leaving much to be divined from what Lord Radcliffe once described as "the deplorable habit" of legislation by reference (of Thornton: Legislative Drafting (1970) at p.112). That plea derives much of its strength from the fact that the legislature did not restrict section 53(2) to "a tenancy or sub-tenancy continuing under section 52(1)", which is the formula .found in section 53(1) of cap 7. Had this formula been repeated in section 53(2), there could be no room for ambiguity as to the extent of the jurisdiction of the Lands Tribunal.

10. These are formidable points, but, with respect to Mr. Lee's able arguments, I do not think that they can stand when the words are properly construed. Words used in a statute are not to be read or construed in isolation. They must be construed with regard to their "bed-fellows" and the statute as a whole, and with the aim of giving effect to the apparent intention of the legislature. In the process of construction, some gaps or hiccups may emerge, but I conceive that, unless it is unavoidable, I should not allow them to deter me from my essential duty of ascertaining the intention of the legislature, and giving effect thereto. In particular, I do not consider that perception of such defects entitles me to ignore entirely otherwise clear indications of the legislature's intention. Legislation is not yet an exact or precise science; it is an exercise in communication. It may fail in this respect for want of appropriate or effective expressions, but I do not think that a court can condemn it to such fate simply by ignoring words which have been deliberately employed. It is a recognised canon of construction that effect should, if possible be given to every word found in a statute.

11. The ambiguity, which, undoubtedly exists in the opening words of section 53(2), disappears, in my view, if that provision is read together with the provisions found in section 52(1) and section 53(1)(b) of cap 7. Section 53(2) imposes restrictions on the Lands Tribunal's jurisdiction to make orders for possession. Its jurisdiction to make such orders is derived solely from Cap 7 (see section 8(6) of the Lands Tribunal Ordinance, cap 17). In my view, this inevitably involves a reference back to section 53(1)(b) of cap 7, which only applies to tenancies or sub-tenancies "continuing under section 52(1)" of cap 7. When one looks at section 52(1) of cap 7, it is immediately apparent that tenancies brought to an end by forfeiture were not intended to continue under that subsection.

12. Mr. Lee's submission would, in effect, require me to ignore completely the words "otherwise than by forfeiture" in section 52(1). I do not think that I can properly do so. It is, in my view, clear, from the enactment of those words and sub-section (1B), that the legislature intended that landlords should enjoy to the full their contractual rights and remedies to forfeit tenancies during the contractual period, subject only to the courts' power to grant relief against forfeiture. Mr. Lee contended that these words merely indicate that the protection given to a tenant by section 52(1) is not to apply where there is a forfeiture, and should not be construed as depriving the Lands Tribunal of its general jurisdiction under section 53(2) to make an order for possession in respect of "a tenancy to which this Part applies." I think that the answer to this part of his argument is that the jurisdiction of the Lands Tribunal is confined by section 8(6) of to cap 17, to making orders for possession under cap 7. The only jurisdiction to make orders under Part II is, in my view, derived from a combination of section 53(1)(b) and section 53(2). I do not consider that the latter provision can be construed as conferring a jurisdiction separate and distinct from that envisaged by section 53(1)(b). Furthermore, I consider that it is clear from section 52(1B) that the jurisdiction under sect on 53 is only to be exercised after the contractual period of the tenancy has come to an end otherwise than by forfeiture.

13. Although the words of section 53(2) are capable of the construction which Mr. Lee urged upon me, I am not persuaded that it is the correct or reasonable construction. If it were adopted, the new scheme deliberately introduced by the legislature, with clear distinctions between "contractual" and "continuing" tenancies, and the apparent change from status (as under the former section 52 of cap 7) to recognition of the parties' contractual obligations, would be destroyed and stultified.

14. Although I have raversed slightly different paths than those of my brethren in the District Court, I have come to the same conclusion. I would merely add that I also derive some support from. dicta of the Court of Appeal in Ngai Sau-ying v. Henry Chue Kwok-keung (No 2) [1982] 7 HKLR 256, where Leonard V-P (at 265) and Kempster J (at 270)uttened dicta to the effect that the Lands Tribunal has jurisdiction only after the contractual period of the tenancy has ended.

15. I realise that the conclusion I have reached in this case, as well as those in the cases referred to , may result in real inconvenience to landlords and tenants in the conduct of legal proceedings to enforce their rights. It may be necessary to litigate aspects of their differences in different courts or tribunals. For example, claims to recover arrears of rent may have to be brought in the High Court, the District Court, or the Small Claims Tribunal, depending upon the amount involved, since the Lands Tribunal can only order payment of rent or mesne profits if it makes an order for possession (see section 8(6) of cap 17 and section 53(4)(c) of cap 7). If it declines to make an order for possession, it would seem that a landlord must pursue his claim for arrears of rent elsewhere, by separate proceedings. There are obviously difficulties in joining alternative claims in one proceeding, as the parties may wish to do, where they are uncertain about the precise factual situation or what they can establish by evidence.  A landlord, who seeks to enforce a proviso for re-entry for breach of covenant by issuing a writ shortly before the end of the contractual term, may find that his resort to the High Court or District Court is frustrated. by a "continuing" tenancy coming into existence before he has served his writ. I have not overlooked these and other difficulties, but I do not think that they are such as to encourage me to look for a different construction of the statute, so as to avoid an absurd result. These inconvenient consequences may be irritating, but they are not without advantage. The successful party to proceedings in the High Court or District Court can expect to recover his legal costs, and the unsuccessful party will have access to the Court of Appeal on questions of fact as well as points of law.

Representation:

Mr. Sammy Lee, counsel instructed by H.C. Yeung & Co. for plaintiff.

Mr. Paul Wei, counsel instructed by H.M. So & Co. for All 7 Defendants.