J.P. Mahuvawalla v. B.R. Iranee

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

APPEAL No. 2 of 1946

(Tenancy Tribunal Appeal No.41/46)

Coram: Blackall C.J. & Gould J.

Date of Judgment: 28 January 1947

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JUDGMENT

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1. The facts in this case are in brief, that the appellant was an employee of the respondent from October, 1930, under an agreement for service dated the 23rd of that month, which agreement was replaced by a further agreement dated the 29th August, 1940. The last mentioned agreement was for a period of 5 years but apparently the employment continued until 30th April, 1946, and it has not been contended that the terms of the agreement ceased to apply. The earlier agreement made no reference to accomodation for the appellant, but the second agreement provided (inter alia) for remuneration which, "shall include all personal expenses of the employee excluding lodging which will be provided by the firm". The difference between the two agreements is relied upon by the appellant as indicating that occupation of the particular premises provided was not necessary for the purpose of the employment. The respondent, pursuant to the agreement, provided the appellant with a flat and upon the termination of the employment the appellant failed to vacate the same. Application was then made by the respondent to a Tenancy Tribunal for an order for appellant's eviction which the Tribunal granted . This decision was upheld on appeal and the present appeal to the Full Court was thereupon brought by the appellant.

2. The order for eviction is based on Para J.(a) of Article 5 of the Landlord and Tenant Proclamation, No.15 of 1945, which gives power to evict any person who, in the opinion of the Tribunal, does not bona-fide claim possession under a landlord or his predecessor in title. As this involves an enquiry into the existance of the relationship of landlord and tenant between respondent and appellant during the employment of the latter, it will be convenient first to examine the contention of the respondent that appellant was never more than a mere licensee. This is based on the use, in the agreement, of the word "lodging". It is argued that the obligations of the respondent would have been fulfilled by the provision of a mere room in a boarding house or even a bed space; that the "lodging" could have been changed from time to time at the will of the respondent. It is, I think, probable that the respondent could, within the terms of the agreement, have provided lodging which would have been no more than a licence, but what it is necessary to look at is what he actually did do. If he interpreted his obligations more favourably towards the appellant than he need have done, that does not alter the fact that he provided premises in the nature of a flat, and it has not been contended, on the part of the respondent, that exclusive possession was not given. As the existance of exclusive possession is the general and acknowledged test applied to distinguish a lease or tenancy from a licence, it follows that (so far at least as this distinction is concerned) a tenancy of some sort did exist. The fact that it might have been terminated and replaced by some thing less at any time does not affect the position.

3. The argument for the appellant was that he did bona-fide claim under a landlord; that the word "tenant" not having been defined in the proclamation, it must be given the meaning it had at common law; that the words "bona-fide" must relate back to his original possession and not to the breach of any express or implied undertaking to quit the premises upon his employment being terminated. I am in full agreement with this last contention - any other construction would render any tenant liable to eviction after due notice to quit. I agree also that upon the facts of this case, appellant was in the position of a tenant at common law. I do not think it necessary to recapitulate the authorities quoted upon this point - they are, I think, accurately summarised in Hailsham Vol.20 p.13, para.8. "The test is whether the occupation is subservient and necessary to the service ..... But where the occupation is allowed solely as remuneration for services, and is not related to the performance of those services, the possession is that of the servant, and he is in the position of tenant". On the evidence, I can see no reason to hold that the occupation of the premises by the appellant was necessary or required for the purposes of his employment.

4. It does not, however, necessarily follow that because the appellant was a tenant at common law, he was a tenant of a kind contemplated by the proclamation. That it is necessary to determine this point is clear, I think, from the wording of the particular subsection relied upon which is as follows:-

The important words are "under a Landlord" which make it clear that this is merely a negative way of saying that a person can resist eviction under the subsection provided it is shown that the relation of landlord and tenant does (or at a material time did) exist between the parties or, if the landlord is not a party, then between the landlord and the opponent. This relationship, I consider, must be one of a kind contemplated and recognised by the Proclamation, which involves a study of the Proclamation with a view to ascertaining whether the landlord and the tenant are of a kind so contemplated. As the landlord is clearly within the definition of that term, it remains only to examine the position of the tenant.

5. No definition of the word "tenant" appears in Article 1 of the Proclamation which, however, does include definitions of the expressions "Principal tenant" and "Sub-tenant". The word is nevertheless used in several placed in the Proclamation, generally in a context which shows that it was regarded as equivalent to "Principal tenant" though once, in Article 6, it obviously includes both "Principal tenant" and "Sub-tenant". I think that the only inference that can be drawn is that the draftsman considered for the purposes of the Proclamation, that every tenant must fall into one or other of those two classes, each of which is, by definition, composed of persons who pay rent.

6. While rent at common law may include services, it has been held that in the English statute which most nearly approximates the Proclamation, namely the Increase of Rent and Mortgage Interest (Restrictions Act, 1920, the term rent means rent payable in money and money alone. (Hornsby v. Maynard (1925) 1 K.B.D. 514 relied upon in Bracey v. Pales (1927) 1 K.B. 819). As to whether the true construction of the word as used in the Proclamation is quite so narrow, I am in some doubt but I am convinced at least that its use in the Proclamation is inconsistent with a construction which includes services by way of employment. The provisions of most of the Articles where "rent" is mentioned, more particularly those of Article 2 and in a lesser degree Article 4, could not be given effect to, in respect of such a rent. In addition, I think that the insistence. on the use of the words "pay" and "payable" throughout the Proclamation are an indication, though not a strong one, of the draftsman's intention - one would have expected to find the word "render" used somewhere if services were in contemplation. Furthermore, the essential object of the Proclamation is to prevent general increases in rent; the prevention of eviction is subsidiary to this and is provided for, in my view, because it would be difficult, if not impossible, to effect the main object of the Proclamation without it. But the intention of the Proclamation would not be defeated by eviction in the few cases parallel to the present, particularly as in most of them the likelihood is that the evicted tenant will be replaced by another employee on similar terms. At first sight, the use of the words "in kind" in paragraph 1(a) of Article 8 might seem to lean against the construction I have adopted, but that is not actually the case as the paragraph deals only with something received or demanded more than (or, in other words, in excess of), the lawful rent, which is not itself affected.

7. For the reasons above set forth, I take the view that the appellant was not a tenant within the meaning of the Proclamation and that therefore he could not claim bona-fide under a landlord. I agree that the appeal should be dismissed with costs to the respondent.

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