Daphne Chun Wai-chan v. Thomas Young
Read the full judgment text of DCCJ 3300/1981 on BabelCite. This District Court judgment was delivered on 28 March 1979.
1. In this action the plaintiff as landlord of the domestic suit premises is claiming possession from the defendant. The defendant is the tenant of the premises pursuant to a tenancy agreement between the parties dated the 28th day of March 1979 whereby the plaintiff leased the suit premises for residential purposes for a period of 4 years commencing on the 15th day of February, 1980 at a monthly rental of $5,000. This was the second tenancy agreement between the parties affecting the suit premi
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DCCJ003300/1981 Landlord and Tenant - claim by landlord for possession of domestic premises on ground of unlawful subletting during original term of tenancy agreement - no express prohibition against subletting in tenancy agreement - whether statutory prohibition against subletting gives rise to a cause of action enabling the landlord to obtain a termination of the tenancy during the original term of the tenancy agreement - if not whether statutory cause of action nevertheless arises during the original term of the tenancy agreement subject to any order for possession only becoming effective after the tenancy agreement has expired - Section 53(2)(e) and 74A(aa), Landlord & Tenant (Consolidation) Ordinance, Cap. 7. IN THE DISTRICT COURT OF HONG KONG HOLDEN AT VICTORIA CIVIL JURISDICTION ACTION NO.3300 OF 1981 -----------------
----------------- Coram: H.H. Judge Cruden in Court Date of Judgment: 14th October, 1981. ----------------- JUDGMENT ----------------- 1. In this action the plaintiff as landlord of the domestic suit premises is claiming possession from the defendant. The defendant is the tenant of the premises pursuant to a tenancy agreement between the parties dated the 28th day of March 1979 whereby the plaintiff leased the suit premises for residential purposes for a period of 4 years commencing on the 15th day of February, 1980 at a monthly rental of $5,000. This was the second tenancy agreement between the parties affecting the suit premises. 2. It is undisputed that the written terms of the tenancy agreement do not contain any prohibition against sub-letting. It is also undisputed that the defendant on or about the 29th day of December, 1978 sublet the whole of the suit premises to the Secretary of State of the United States for a period of 2 years and has now further sublet the premises to the same sub-tenant. The amended particulars of claim include as the ground for possession the allegation that the defendant has unlawfully sublet the suit premises to the Secretary of State contrary to the provisions of Section 53(2)(e) of the Landlord and Tenant (Consolidation) Ordinance, Cap. 7. That statutory provision provides:
Clause (e)(ii) applies to this action. 3. I understand that it is also undisputed that the plaintiff has not consented in writing to the sub-letting. 4. On the 11th day of August 1981 the defendant filed in person a summons to have the plaintiff's claim struck out on the grounds that it was frivolous and vexatious and disclosed no reasonable cause of action. That summons came before me on the 27th day of August 1981. The principal ground advanced in support of the summons to strike out was that the Court had no power to terminate the tenancy for Section 74A(aa) provides :- "Nothing in this Part shall -
That provision was enacted by the Landlord and Tenant (Consolidation) (Amendment) Ordinance No.52 of 1981 which came into effect on the 10th day of July 1981. I am satisfied that that provision applied to this action from the date of its enactment which was prior to the date of hearing of the summons. 5. The defendant submitted that the contractual terms of the tenancy agreement contain no prohibition against sub-letting. Therefore, it was submitted the only cause of action the plaintiff can rely on would be the statutory cause of action created by Section 53(2)(e). However, it is submitted, the effect of Section 74A(aa) prevents that provision applying to this action and limits the plaintiff's grounds to those contained in the written tenancy agreement. 6. After dismissing the summons the defendant filed a further summons for leave to appeal against that order and that summons came before me on the 30th day of September 1981 when the defendant was represented. The same submissions were advanced as on the original summons. 7. In opposing both summons the plaintiff said that Section 74A(aa) is not to be construed in isolation. It was submitted that if that new provision has the effect the defendant asserts, then it would effectively remove the whole of the protection otherwise provided by Part II. 8. In approaching the provisions of this not always easy Ordinance I will adopt a purposive rather than a literal approach. I have in earlier decisions on the Ordinance dwelt at perhaps unpardonable length as to why this is the proper approach to this legislation. I am fortified in continuing that same approach by the robust, if extrajudicial, statement by Lord Scarman in his Wilfred Fullager Lecture at Melbourne, Australia, reported in (1981) 55 A.L.J. 175 where, having pointed out that Australian judges had hesitated to apply a purposive approach, he went on to declare :
9. The point before me is a short one but not without difficulty. As to the effect of the statutory provisions of Section 53 on an existing contractual tenancy a starting point is to consider the Court of Appeal's decision in Lo Wah, Leung Wai v. Chui Fun Civil Appeal No. 152/80. The Court of Appeal was concerned with a claim for possession on the grounds of breach of a contractual term prohibiting sub-letting and also the breach of the statutory prohibition against sub-letting as provided for by Section 53(2)(e). In considering the effect of Section 53(2)(e) Cons J.A. declared:-
10. While Huggins J.A. had reservations as to the position of a sub-tenant, where the sub-letting or part only of the premises was not contractually prohibited, he did not disagree with the effect of the statutory provisions as between landlord and tenant. That decision was delivered on the 25th day of November, 1980. 11. Before that decision of the Court of Appeal the new Section 53(2)(b) enacted on the 15th day of February, 1980 but made retrospective to the 18th day of December 1979, had also empowered landlords to bring claims for possession of domestic premises if they reasonably required them for their residence or for the residence of their statutory prescribed relatives. There have been a spate of such applications. The question which soon arose was whether the new ground for possession enabled a landlord to bring proceedings during even the term of a tenancy agreement. The dictum of Cons J.A. certainly made it arguable that such a claim could be made even before the contractual term had expired. 12. This issue later came before the Court of Appeal on the 26th day of June 1981 in Lam Chuan Kuen v. Wan Suet Ying Civil Appeal No.47/81. In that case the landlord had brought proceedings under Section 53(2)(b) before the term of the tenancy agreement had expired. The Court of Appeal held that Section 53(2)(b) enabled such an action to be brought and an order made thereon even before the term of the tenancy agreement expired provided, to cite the words of Huggins J.A.:-
13. I accept that decision as authority that at least in respect of Section 53(2)(b) actions, Cons J.A. earlier dictum is not to be applied widely but subject to the restriction imposed by Huggins J.A. It was now clear that the new ground for possession under Section 53(2)(b), while giving rise to a cause of action during the original term of a contractual tenancy - as Cons J.A. had perhaps implied was the position in respect of Section 53(2)(e) - could not result in the date for possession under any order being prior to the expiration of the original contractual term of the tenancy as provided in the written agreement between the parties. 14. On the 10th day of July 1980, shortly after the decision of the Court of Appeal in Lam Chuen Kuen v. Wan Suet Ying, the Legislature amended Section 74A by adding Clause (aa) (supra). If that amendment had been expressly limited to actions under Section 53(2)(b) then it might have been arguable that the Legislature had simply adopted, by statute, the principle enunciated in Lam Chuen Kuen v. Wan Suet Ying. 15. However, there is no express provision restricting the amendment to Section 53(2)(b) cases or any other words of limitation. When I was considering this matter a very helpful note by Professor Willoughby was published in (1981) 11 Hong Kong Law Journal 402 in which he comments on the new Section 74A(aa) as follows:-
16. Earlier in that same note Professor Willoughby summarises his view of the amendment as being a provision which:-
17. If this interpretation is correct it is rather narrower than Lam Chun Kuen v. Wan Suet Ying. That decision is authority for the proposition that the statutory grounds may, at least in respect of Section 53(2)(b), be invoked during the original contractual term and before the period of statutory extension. That decision was delivered 15 days before the amendment came into force. Does the Court of Appeal decision survive the amendment? The amendment deals with the time of termination and not with when the cause of action arises. The effect of Huggins J.A. judgment seems to be that while the statutory casuse of action may arise during the original contractual term, any order terminating the tenancy can only take effect after the original contractual term has expired. So to that extent, it would seem that the amendment does not affect the Court of Appeal's decision. All the amendment does is to provide that in a claim founded on a statutory cause of action, the Court cannot order a termination of the tenancy to take effect during the contractual term. For completeness I should add that if the cause of action is founded on a covenant in the tenancy agreement the position would be otherwise. 18. Does the principle enunciated by Huggins J.A. apply to all the statutory grounds for possession Section 53(2) or only where the landlord seeks possession of the premises as a residence under Section 53(2)(b)? Logic may suggest that the same principle must apply to all grounds under Section 53(2). However, if that were the position it would seem that insuperable evidential difficulties would arise under Section 53(2)(e) which is the only provision I am directly concerned with in the instant action. For here sub-letting is lawful under the tenancy agreement for the duration of the original contractual term. If the sub-tenant departs before any statutory extension of that term commences, there is, as now made clear by the amendment, no breach of the statutory condition as provided by Section 53(2)(e). It therefore seems to me that in respect of an action founded on Section 53(2)(e) the present plaintiff on the instant facts would be unable to adduce evidence of unlawful sub-letting, until the expiration of the tenancy agreement. This will not occur until the 14th day of February 1984. There is no evidence that the defendant has sub-let for a period beyond that date of expiration. 19. A possible explanation why a different position may exist in respect to claims under Section 53(2)(b) is that under that provision factors personal solely to the landlord have to be initially established for him to succeed. Whereas under Section 53(2)(e) the sole factual basis to a claim is the alleged unlawful action of the tenant. Although I appreciate that under the proviso to Section 53(2)(b) the tenant is provided with a statutory defence where factors personal to him are highly relevant. The tenant's apparent rights under the proviso did not seem to inhibit Huggins J.A. in his conclusion that a Court could properly make an order under Section 53(2)(b) in favour of a landlord before the original contractual term had expired and therefore before the personal circumstances of the tenant, as at the date of expiration, could be evaluated. I therefore appreciate that it is arguable that the amendment as well as restricting the effect of Lo Wah and Leung Wai v. Chui Fun has also overruled Lam Chun Kuen v. Wan Suet Ying. 20. Initially I was of the view, for the reasons expressed by Huggins J.A. in Lam Chun Kuen v. Wan Suet Ying that the statutory causes of action under Section 53(2) could arise during the term of the original contractual term provided, where a landlord was successful, the date for possession could not precede the expiration of the original contractual term. On that view all that Section 74A(aa) achieved was to make it quite clear that a statutory cause of action did not empower a Court to make an order terminating the tenant's right to possession during the term of the original contractual tenancy. I therefore dismissed the defendant's summons to strike out. I have now further considered the position on the defendant's summons for leave to appeal. Whatever the present position under Section 53(2)(b) may be, clearly under, Section 53(2)(e) facts giving rise to a cause of action there under will usually only come into existence after the original contractual term has expired. The answer to the general question whether a statutory cause of action under Section 53(2) can arise during the original contractual term may simply be that it depends on the facts of each case and that there is no absolute rule. In this action the term under the head-lease has not expired nor will it expire until the 14th day of February, 1984. There is no allegation by the plaintiff that the current sub-letting is for a period beyond the 14th day of February, 1984. I accept that much earlier when the prior head-lease provided for the defendant's tenancy to expire on the 14th day of February 1980, the defendant had sublet the premises for a term expiring on the 31st day of December, 1980. If a new head-lease had not been granted the sub-tenant would of course, have had to move out when the prior head-lease expired and his only remedy presumably would have been in damages against the defendant. But all those considerations are past and do not concern the Court today. They are, however, of passing interest. For if that were the present position it may be that such circumstances might give rise to a statutory cause of action under Section 53(2)(e) before the expiration of the contractual term. In that event for the reasons of convenience set out by Huggins J.A. in Lam Chun Kuen v. Wan Suet Ying a landlord might wish to bring proceedings during the contractual term rather than wait - as Professor Willoughby suggests he must - until the expiration of the contractual term. If Huggins J.A. is right, then those exceptional facts would give rise to an immediate cause of action, perhaps analogous to an action for anticipatory breach in contract, subject to the order for possession being deferred in accordance with the formula of Huggins J.A. If those exceptional facts do not exist then it would seem that statutory cause of action under Section 53(2)(e) would not arise during the original contractual term. For if it could any order would then be based on hypothetical facts, namely that the tenant was going to allow the sub-tenant to remain in possession after the expiration of the head-lease. Any order based on that future possibility would resemble more a declaration by the Court than an ordinary judgment for possession. 21. When the summons to strike out the plaintiff's claim first came before me I reminded myself that under Order 18 Rule 19 of the Rules of the Supreme Court, so long as the particulars of claim disclosed some cause of action or raised a question fit to be decided at the trial, the mere fact that the case was weak or not likely to succeed, was no ground for striking out. At that stage I considered it was arguable for the plaintiff that the statutory prohibition against sub-letting without the written consent of the landlord was, in terms of Lo Wah, Leung Wai v. Chui Fun, written in as an additional term of the contract between the parties. 22. For that reason, while I realised that the defendant had available a powerful argument to the contrary, I considered the action should not be struck out but this point which the defendant had raised at an interlocutory stage, would better be determined at the trial. At that stage too, any crucial findings of fact could be made. However, having now heard argument on the subsequent summons for leave to appeal against the interlocutory ruling declining to strike out the claim, I have given the matter further consideration. As a result I am of the view for the reasons given in this ruling that, on the present undisputed facts, no reasonable cause of action arises. For the sub-letting was not prohibited by the written tenancy agreement between the parties and on those facts Section 74A(aa) prevents, in this particular case, the statutory cause of action arising, until the written tenancy agreement has expired. 23. I appreciate that such a cause of action may perhaps arise during the term of the tenancy agreement in the exceptional factual situation where a defendant tenant purports to sublet the premises for a longer term that he enjoys under the head-lease. That situation arose between the parties at an earlier stage, but does not arise now and is therefore irrelevant 24. The plaintiff, in her amended particulars of claim, relies on her statutory cause of action. She pleads no other. The present action I have therefore decided is, at best, premature. No cause of action is disclosed on the pleadings. It would therefore be improper for the action to go to trial. I have therefore now arrived at the final conclusion that leave to appeal against the earlier interlocutory order declining to strike out, should be granted. In these circumstances leave is granted unconditionally. Costs of and occasioned by the summons for leave to appeal shall be costs in the cause. DATED this 14th day of October, 1981.
Representation: Mr. Joseph Kwok of Liu, Chan & Lam for plaintiff. Mr. Mullins instructed by H.A. Hoosenally & Co. for defendant. |