Hung Ya Bing v. Hung Fung Co (A Firm)

DCCJ007594/1975

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT KOWLOON

CIVIL JURISDICTION

ACTION NO. 7594 OF 1975

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Coram: Judge Mayo, D.J. in Court.

Date of Judgment:

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JUDGMENT

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1. The Plaintiff is claiming possession of the suit premises on the basis that the premises are business premises while the Defendant contests the olaim on the grounds that the user of the premises is primarily residential and hence the tenancy is a protected tenancy by virtue of the provisions contained in the Landlord and Tenant Ordinance Cap. 7. Both parties were legally represented and agreed that the issue should be confined to this point.

2. The Plaintiff is presently in the United States of America and his wife Ng Ka Chu, on the authority of a Power of Attorney was the sole witness for the Plaintiff. She gave evidence that her husband let the suit premises to the Defendant firm for business purposes in 1968. In support of this she produced a rent receipt which purported to set out the principal terms of the tenancy. She also produced a certificate issued by the Commissioner for Rating and Valuation which certified the user of the premises as being primarily business user. Mr. Fan for the Defendant drew attention to the fact that there are 8 units on the 3rd floor of 35 Gillies Avenue and that the certificate only refers to premises on the 3rd floor. While this contention is superficially attractive I do not consider it has much merit as it is obvious from the correspondence that the certificate relates to the suit premises and indeed it is addressed to the landlord of the premises through his solicitor Maurice Lee. It is clear that the certificate relates to the suit premises.

3. Madam Ng went on to give evidence that she visited the premises in 1973 and on this occasion it was evident to her that the Defendant was conducting his business in the premises and that she was not aware of anything to indicate any domestic user. She also gave evidence that to the best of her knowledge information and belief the Defendant and his family did not reside at the premises. In support of this she said that she had received an invitation to attend the Defendant's wedding and that the Defendant's address was given on the invitation card as an address at To Kwa Wan. Generally I found Madam Ng to be a truthful and conscientious person and so far as she was able to give evidence first hand I had no reason to believe that her evidence was not accurate.

4. The Defendant gave evidence himself and called 2 other men to give evidence who he claimed were sub tenants. He gave evidence that he originally entered into the tenancy with the Plaintiff in 1967 and that it was clearly stipulated that the premises would be used as domestic premises. He said that his income was at that time $300 per month although he later claimed that this was "a slip of the tongue". He went on to say that the rent of the premises was $300 per month and that his reason for obtaining such a large flat, relative to his circumstances, was that he anticipated matrimony and he thought the flat would be suitable for his wife and children and indeed he even referred to his grandchildren. He said that in 1968 he decided to start a business at the premises of processing toys and manufacturing Christmas decorations. He gave evidence that he discussed his plans with the Plaintiff who raised no objection thereto. He went on to give evidence that he had throughout the period and up to the present time conducted a business which had continued to prosper generating a sufficient income to support his and his family's entire financial means. He claimed however that the said business activities were of a minor nature and that the primary function of the premises was to be a home for him and his family. He also claimed to have sublet bed spaces in the premises to Mr. Ng and Mr. Kong for a rental of $40 each per month. I regret that the Defendant did not strike me as being a particularly truthful or honest person and I accept his evidence with considerable reservations. I do not believe his evidence that his original intention was to obtain a tenancy for residential purposes. I think that it is far more likely that he obtained the tenancy for the specific intention of conducting a business there which he then proceeded to do. I am also satisfied that the main function of the premises is business user and that the Defendant and his family's occupation is ancilliary to this.

5. I have borne a number of factors in mind in coming to this conclusion. I note that by his evidence the Defendant admits that there is a nameboard outside the premises bearing the name Hung Fung Co. Also the Defendant admits that the telephone is listed as a business telephone and the telephone rental is based on this. There is also the business registration certificate. The address recorded therein for the business is the suit premises. Again it is clear from the Defendant's evidence that he derives his sole livelihood from the business activities conducted in the premises. All of this is far removed from the cottage industry type of situation which seems to have prevailed in the cases which were cited to me by Mr. Fan as authority for the proposition that where there is mixed user the court should in the circumstances referred to hold that the primary user is domestic. A further factor I have considered is the question of the allocation of space for the different types of user. The Defendant produced as evidence a plan which he had himself prepared which indicated the manner in which the user was divided. This plan showed approximately 1/3 of the area to be used for domestic purposes and 2/3 for the business. The Defendant endeavoured to contend in the witness box that as he was not a qualified surveyor I should not attach too much weight to the plan. I am however inclined to the view that the area used for domestic purposes is as indicated on the plan. In support of this opinion I would observe that a bed space is marked on the left of the said area and this is depicted as occupying almost exactly the whole of the left hand side of the cubicle. It would seem to be reasonable to assume that the bed would be approximately 6 feet in length and such a measurement gives me a fairly accurate idea of the extent of the area. It is perhaps also worth mentioning that I find it to be significant that throughout his evidence the Defendant did not attempt to suggest that other than the bed spaces used by the sub tenants any of the area used for business purposes was ever used for any other purpose.

6. I do not think that the evidence of the 2 sub tenants takes matters much further. I did not find either man to be a particularly convincing witness and I have strong suspicions that both men are in fact employees of the Defendant.

7. For the reasons I have given I have decided that the primary user of the premises is for business purposes. This being so the Defendant can not avail himself of the protection afforded by the Landlord and Tenant Ordinance to domestic premises and accordingly the landlord's notice to quit, referred to in the Particulars of Claim is valid and effectual. The Plaintiff is therefore entitled to judgment which I enter for him. He is also entitled to the arrears of rent and mesne profits as claimed in the Particulars of Claim. I do however find myself in considerable sympathy for the predicament the Defendant will find himself in. I have therefore decided to order that there shall be a stay of execution for three months which stay shall be conditional upon his paying all arrears of rent and mesne profits within 14 days and mesne profits on the first of each month during the said stay. The Plaintiff shall have costs on the upper scale and there shall be a certificate for counsel.

Representation: