Yu Kuk v. Commissioner of Rating & Valuation and Another

LDLA000007/1985

IN THE LANDS TRIBUNAL OF HONG KONG

(Appellate Jurisdiction)

Landlord & Tenant Appeal No. 7 of 1985

BETWEEN

Coram: His Honour Judge Scriven, Presiding Officer and M.W. Phillips, Esq., Member.

Date of Judgment: 3rd July 1985

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JUDGMENT

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1. This was an appeal by Yu Kuk (The Appellant) a lady of mature years living by herself and in a property where she has lived since 1939, against the determination dated 27th March 1985 by the Commissioner of Rating & Valuation that the premises are excepted from the application of Part I of the Landlord and Tenant (Consolidation) Ordinance.

2. The Commissioner's decision was made as a result of an application by the Appellant's landlord made to him on the 11th November 1984.

3. The Landlord was joined in the Appeal as 2nd Respondent, and took part in the hearing before us through her solicitors but offered no evidence.

4. The Appellant was not legally represented but we allowed her daughter, Ho Mei Ling to give evidence herself and then to address us on the evidence.

5. The Commissioner called three witnesses, all of whom demonstrated the care and attention they had given to evaluating the situation at the appeal premises, as they found it, and we have to say that on the reports made by the officers it is perhaps hardly surprising that the Commissioner accepted the view of his valuer Mr. Yuen Ping Kwong, A.R.I.C.S., that the appeal property was primarily used for business purposes.

6. When the appeal was called on the Appellant somewhat reluctantly decided to give evidence herself.

7. The appeal premises are in essence a shop on the ground floor with a staircase at the rear leading, via a trap door into a cockloft. The appellant's evidence showed that she lived alone at the premises and had run a business there since 1965.

8. Photographs exhibited to us showed that superficially the ground floor was entirely devoted to the sale of beer, soft drinks and tobacco. with tables provided for customers to sit at while they consumed their refreshment or as the evidence showed, played dominoes or mahjong. A certain amount of stocks were stored upstairs, and so to some extent the entire premise were used in and towards the business the appellant carried on under a Business Registration Certificate as "FA HO LEUNG".

9. In these short reasons an are not attempting seriously to criticize the percentage figures prepared by the Commissioner's officers to try and evaluate mathematically the proportions of business and domestic use, as they assessed them, so far as they take the matter and before adding the oral evidence, but we do feel bound to say that we cannot accept the officer's findings that the cockloft area should be reduced by a factor of 3 in calculating the extent of business use on the grounds that it is a third as valuable as the ground floor. This appears to us to be the same as discounting a rear bedroom because the rear of the shop is less valuable than the front. Value has little bearing on the degree of use.

10. The evidence of the appellant before us showed that whilst she slept upstairs in the cockloft she performed other domestic and personal functions in the shop. Whilst we do not accept as accurate her evidence as to her approximate takings and profits, which could have been supported by production of accounts and books, we feel bound to say that, listening to her evidence and following it with the photographs exhibited, it is clear that she eats her meals in the shop, washes in the rear part of the shop premises, and even when the shop closes she still sits and watches television inside the shop on the seats provided for customers. This may probably mean that she keeps the shop open for longer than she testified to but if her evidence as to rather short hours of opening is wrong then it follows that the longer she keeps the shop open the more she uses it also for her private residence. Indeed at the time the Commissioner's staff visited the premises in mid morning she was cooking in the shop, but for herself.

11. This in our view is not a case of a person living over a shop but a case where a person uses her home to run a business - a mere cottage industry to support herself. Had she had a spacious flat above the shop with all the amenities of life contained in it, that might be different but the evidence showed that there is not even a television up there nor any soft furniture, just the meanest of beds under the caves of the cockloft. There is not even a water tap in the cockloft.

12. While figures can be very misleading in such matters and we have accepted the totality of the evidence, we should observe that when the shop is open for business we find on the evidence that it is put to domestic use to the extent of at least 20% and not 10% as calculated by the Commissioner's Rent Officer, Mr Chu. We accept that it is likely to be frequently closed, with a sole proprietor, and as the time that a premises is put to a particular use is in our judgment just as important as the area involved, then the use of the ground floor should therefore be regarded as involving, in total, 40% domestic use. The evidence showed that very little storage for the business is associated with the cockloft and that it might for all practical purposes be regarded as a totally domestic part of the premises. On a very rough mathematical basis, after hearing the evidence our finding is that the use of the premises would therefore appear to be about 65% domestic, and 35% business use.

13. We have concluded therefor that on the totality of the evidence put before us and bearing in mind the definition section of Part I of Cap.7 namely ' "business premises" means premises which are not domestic premises, that we cannot agree that the appeal premises are business premises as so defined. They are a home where a business is carried on and cannot therefore be said to be "not domestic premises".

14. For these reasons, adding the oral evidence to that considered by the Commissioner in coming to his conclusion we must hold that his finding must be reversed and set aside, and we hold that on a true interpretation of the evidence Part I of the Landlord and Tenant Ordinance applies to the appeal premises, and therefore the appeal will be allowed. Delivered in open court this 3rd day of July, 1985.

Representation: