Suen Kit Ching v. Chan Chow Ka Chai and Another

LDPA0000003/1982

Property law - landlord and tenant - costs - amendment - proceedings in respect of Part II premises brought by mistake under Part I - respondent on pleadings put applicant to proof on jurisdiction - whether applicant conducted his case in a frivolous or vexatious manner - Held:

- Sections 35, 36, 43A, 68B and 119R Landlord and Tenant (Consolidation) Ordinance, Cap, 7 and Seetion 10(5) Lands Tribunal Ordinance, Cap. 17.

IN THE LANDS TRIBUNAL OF HONG KONG

Application No. K3/82

IN THE MATTER  of Part I of the Landlord and Tenant (Consolidation) Ordinance, Cap. 7

TRIBUNAL:  His Honour Judge Cruden, Presiding Officer

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JUDGMENT

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1. The applicant applied for an order for the recovery of possession from the respondents of the domestic premises known as the Rear Portion, 1st Floor, No. 4 Derby Road, Kowloon Tong, Kowloon. The application was based on two alternative grounds. First, pursuant to Section 36 of the Landlord and Tenant (Consolidation) Ordinance Cap. 7, it was alleged that the 1st respondent had unlawfully and without the written consent of the applicant sublet the suit premises to the 2nd respondent. Secondly, pursuant to Section 35 it was alleged that the applicant reasonably required possession for occupation as a residence for her son James Chao, who is over the age of 18 years.

2. The lst respondent left Hong Kong in 1978 and went to the United States where she now permanently resides. On the 21st day of December 1983 an order was made dispensing with service of the application upon her. The 2nd respondent is the brother of the 1st respondent. The 1st respondent took no part in the proceedings which were contested by the applicant and the 2nd respondent both of whom were represented.

3. In his closing submissions Counsel for the applicant admitted that, quite apart from any other evidence, a letter from the applicant to the 2nd respondent dated the 31st day of July 1981 in which the applicant wrote to the 2nd respondent as her tenant, prevented her from successfully proceeding on the first ground.

4. This left the remaining ground whether the premises were reasonably required for occupation by the applicant's son. Before proceeding to consider the evidence on that ground, the issue was raised whether the suit premises were Part I premises.

5. The applicant produced the original Crown Lease which was dated the 9th day of June 1941. The applicant also produced the occupation permit issued under the Buildings Ordinance, Cap. 123, which was dated the 1st day of November 1949. I was informed by the applicant's Counsel from the Bar, that the dwellinghouse erected on the property, of which the suit premises form part, was constructed before the 2nd World War.

6. Part I applies to what are commonly, if not strictly, called prewar premises. As a matter of law Part I applies to premises for which occupation permits were issued no later than the 16th day of August 1945. Section 3 provides:-

7. Under Section 3 the classification of Part I premises is clearly determined under this provision solely by the actual date of the appropriate occupation permit. It may well be that the dwellinghouse was constructed in accordance with Counsel's understanding. If so then the long delay until 1949 for the issue of the occupation permit may have been, at least initially, due to the intervention of the 2nd World War and in particular to the occupation of Hong Kong by the Japanese.

8. Whatever the historical factual situation, the position is clear that the occupation permit was issued after the 16th day of August 1945. According1y, Part I does not apply to the suit premises. Counsel for the applicant conceded that the Tribunal therefore had no jurisdiction to make any order for possession under Part I.

9. The applicant then applied for the proceedings to be amended to fall within Part II. The 2nd respondent opposed the application for amendment. The application for amendment was made at a very late stage after the whole of the evidence had been adduced and during the applicant's final submissions.

10. This Tribunal generally adopts a liberal approach towards applications for amendment as is consistent with attaining justice in accordance with the spirit of Section 10(5) of the Lands Tribunal Ordinance Cap. 17. In this particular case the whole of the evidence had been adduced. Further the Part I statutory ground for possession under Section 35 continues to be based on greater hardship while the Part II ground under Section 53(2)(b) is based on the very different concepts of the landlord's reasonable requirement and whether it would manifestly not be just and equitable to require a tenant to vacate. Further, under Part II the Tribunal may pursuant to Section 53(4A), make an order in respect of part only of the premises while no such power is given to the Tribunal in Part I. On the evidence that question may have become very relevant in the case of this particular application had it proceeded under Part II.

11. In the light of all these factors I considered that this was not a case where I should allow the amendment to transfer the proceedings to Part II. An order dismissing the application for possession was therefore made.

12. The 2nd respondent then applied for costs. The former wide general discretion as to costs in the case of Part I applications, was in 1982 restricted after the enactment of Section 43A by the Landlord and Tenant (Consolidation) (Amendment) (No. 2) (1981) which now provides:

Under the same Amendment a similar restriction on the award of costs was enacted under Section 68B for Part II and under Section 119R for Part IV. As a result in practice costs are only exceptionally awarded under Parts I, II and IV.

13. Counsel for the applicant commendably conceded that the bringing of the proceedings under Part I was merely done by mistake and that the applicant's conduct was neither frivolous or vexatious. Further that the proceedings were commenced by other solicitors as long ago as the 20th day of April 1982. The 2nd respondent had pleaded to these proceedings and no objection had been taken to them until today.

14. Counsel for the 2nd respondent stated that the date of the occupation permit was not within the knowledge of the 2nd respondent and in his defence he had made no admission that the proceedings were within Part I. Paragraph 2 of the 2nd respondent's answer, as it was then entitutled when filed with the former Tenancy Tribunal, pleaded:-

It was further submitted that here the proceedings had been commenced without jurisdiction and the 2nd respondent had been obliged to instruct solicitors and defend the application.

15. I am satisfied that the proceedings were wrongly brought under Part I purely by mistake. I am further satisfied that the proceedings were not vexatious. Were they frivolous? Volume IV of 'The Oxford English Dictionary' 556 definds "frivolous" as:-

16. Certainly because of the lack of jurisdiction under Part I, there was no reasonable ground or purpose to the application. In that respect bringing the proceedings under Part I was futile.

17. Unfortunately, the nature of the now limited discretion of the Tribunal under Sections 43A, 68B and 119R does not appear to have been considered by our Court of Appeal or in any other reported authority. However, the phrase "frivolous or vexatious" has frequently been considered by Courts on striking out applications under Rules of the Supreme Court Order 18 Rule 19. These cases are of considerable assistance. The leading judgment of Lindley L.J. in Attorney-General of Duchy of Lancaster v. London and North Western Railway (1892) 3 Ch. 277 held that the words extend not merely to cases which are obviously frivolous or vexatious but also to those which are obviously unsustainable. On the other hand, I am conscious of the warning of the Privy Council in Rediffusion (H.K.) Ltd. v. Attorney-General & Anor. (1970) H.K.L.R. 231 that in striking out cases the jurisdiction should only be exercised in plain and obvious cases. I am satisfied the same principle applies on the question of costs under this Ordinance.

18. An important factual difference between the application of that principle on a striking out application and on an application for costs, is the nature of the material before the Court or Tribunal. On a striking out application the Court is limited to a consideration of the pleadings and may not consider any extrinsic evidence. On an application for costs under the Landlord and Tenant (Consolidation) Ordinance, however, the Tribunal is able to consider not merely the pleadings but all the evidence that has been adduced.

19. Hence matters the Tribunal in the present proceedings may properly consider on the issue whether they are vexatious or frivolous, includes the applicant's pleading that the suit premises are Part I premises and the applicant's documentary evidence, in the form of the occupation permit, which indicates that the premises are not within Part I.

20. In the instant case the proceedings were obviously unsustainable. They were unsustainable as a matter of law because of the date of the occupation permit. In practice the division of premises between Part I and Part II is notoriously known to be based on whether the occupation permit was dated on or before the 16th day of August 1945 or after that date.

21. Here the proceedings had been long issued. In addition, they had been preceded by proceedings, with the applicant as plaintiff, in the District Court for possession pursuant to Section 53(2) of Part II. The applicant not only had a copy of the occupation permit before trial but had also produced it in evidence before the Tribunal.

22. After considering all these factors I find that the applicant's conduct, in the wider sense referred to by Lindley L.J., has been frivolous. I am further satisfied that in terms of the Privy Council dictum this is a plain and obvious case. In those circumstances I hold that the Tribunal on this application does have a discretion to award costs. The final question is whether that discretion should be exercised in favour of the 2nd respondent. I accept the 2nd respondent's counsel's submission that his conduct has in no respect disentitled him to costs. On the basis of the facts already adverted to I am satisfied that I should exercise my discretion as to costs in the 2nd respondent's favour.

23. The 2nd respondent is entitled to his costs of and occasioned by this application for possession in accordance with the upper District Scale to be taxed if not agreed.

DATED this 22nd day of February, 1984.