Bank of East Asia Ltd v. Sn Choy
Read the full judgment text of DCMP 29/1946 on BabelCite. This District Court judgment was delivered on 31 August 1946.
1. This is an appeal from a decision of a Tenancy Tribunal given on 10th July, 1946, on the ground that the decision was wrong in law.
|
DCMP000029/1946 IN THE SUPREME COURT OF HONGKONG ----------------- TENANCY TRIBUNAL APPEAL NO.29 of 1946 -----------------
Coram: Mr. Justice E.H. Williams, Puisne Judge Date of Judgment: 31 August 1946 ----------------- JUDGMENT ----------------- 1. This is an appeal from a decision of a Tenancy Tribunal given on 10th July, 1946, on the ground that the decision was wrong in law. 2. Application had been made to the Tribunal under Article 4 of the Landlord & Tenant Proclamation No.15 of 1946 to vary the rent of certain premises known as No.38/39 Praya, Kennedy Town, which are godowns. 3. The relevant section of the Article reads:-
No regulations have, in fact, been passed making any limitations. 4. The reasons and facts in support of the application were, in brief, that the premises were shortly being de-requisitioned by Government and opponent desired to rent them. Both parties were agreed on a rental of $3,200 per month. This rent was an increase over the 1941, rental but in view of the fact that (a) the running expenses of applicants' business had risen considerably since 1941, (b) there was great demand for storage space, (c) storage charges in godowns including those under Government control, had been increased by four times since the re-occupation, the rent was considered fair by both parties. 5. At the hearing before the Tribunal it was admitted that the pre-war rent was $1,582; also that Government storage charges had not increased by as much as four times, the correct figure being from two to 2½ times. Solicitors for the applicant maintained that the proposed increase in rent would only increase the cost of commodities by a negligible amount; that as Government storage charges had increased it was only reasonable for a landlord to receive a corresponding increase, and that as the opponent was perfectly willing to pay the increase, and the power of the Tribunal to increase rent was unlimited, the Tribunal should grant the increase. The opponent confirmed that he was quite prepared and even anxious to pay the increase, considering it a justifiable one. 6. The Tribunal gave a considered judgment refusing the application, setting out at length its reasons for so doing. It is obvious that the members devoted great thought and care to the difficult question they were called on to decide. In brief they refused the application because they considered that the reasons given for the proposed increase were applicable to practically all business premises; if granted here, then a Tribunal might feel compelled to grant a similar increase in a number of other similar cases thus leading to a general increase in rents for commercial premises; that no difference was made in the Proclamation between premises occupied for business purposes and those occupied for dwelling or other purposes. The Tribunal felt that the object of the Proclamation was to maintain rents at the 1941 level, without regard to whether such was fair and reasonable under present conditions. It would have considered granting a variation here if the reasons given for such variation would have warranted a variation in 1941. 7. In fairness I should add that the brief summary here given hardly does justice to the clear statement given by the Tribunal for their reasons for refusal. 8. Solicitor for the applicant informed the Tribunal that he did not desire to bring any such evidence. It was agreed also before me, that the premises remained substantially unaltered from their 1941 condition. 9. At the hearing before this Court, it was perhaps unfortunate that no argument was addressed to me in support of the Tribunal's decision - the respondent (opponent) in fact gave his full support to the arguments advanced by Solicitor for the appellants. 10. Solicitor for the appellants submitted that even assuming - which he was not prepared to admit -as the Tribunal had stated, one object of the Proclamation was to prevent excessive increase in the cost of living, the increase here asked for had only an infinitesimal effect on commodity prices and could not increase the cost of living. 11. If one was entitled to speculate as to the object of the Proclamation, he submitted that the real object was that all bona fide tenants should have security of tenure; that, as during the occupation, the Yen had been used and as it was now illegal, some standard of payment had to be fixed and accordingly the 1941 standard of rent was that laid down. 12. He finally submitted that the general rule of interpretation should be followed which was to look at the wording and not speculate on the intention of the Legislature (Solomon v. Solomon & Co. 1897 A.C. p.22 at top of p.38); here the Tribunal had complete power to vary rents, no limitation having been imposed by Regulation, the Tribunal should have given consideration to the fact that Government had made large increases in storage charges for goods in godowns under its control (storage rates in godowns, under the control of the Custodian of Property, are chargeable since April 1946 at 1941 tariff rates plus 200%). These are business premises and conditions were quite different now from 1941 conditions; where both parties had agreed that the rent was a reasonable one then it was not within the power of the Tribunal to refuse such an application. 13. The respondent, in supporting the arguments made by Solicitor for the appellants, stated that if the appellant was not permitted to charge the increased rent he might decide not to let the godowns, in which case respondent might be driven to store his goods in godowns under the control of the Custodian where the cost to him would be over double what it would cost him in the present case. 14. The point to be decided is not free from difficulty. Had regulations been made under Article 4 setting out the limitation within which rent might be varied then the difficulty would probably disappear. If I decide in favour of appellants then, as the Tribunal points out in its reasons for refusal, a large number of landlords would be able to appear before a Tribunal advancing similar reasons for an increase and the Tribunal would feel compelled to grant the application - even though the agreed rent was many times higher than the Standard Rent. 15. It is to be observed that throughout the Proclamation no difference is made between premises for commercial purposes and those for residential purposes. Under Article 2, the Standard Rent for all is that payable in 1941. On what grounds then is a Tribunal entitled under Article 4 to depart from this Standard Rent? Even though no limitation is laid down I have come to the conclusion that the whole object of the Proclamation would be defeated unless the Tribunal exercised its powers to vary within certain very definite limits. 16. For example, should other godowns be de-requisitioned there might possibly be numerous persons desirous, for business reasons, to rent them: if competition was keen then agreements might be reached at rents many times higher than the 1941 rent. This would put the landlord of business premises in a much better financial position than the landlord of residential premises. 17. Moreover, whilst an increase of rent in one case would not materially alter the cost of living, a general increase of godown rents is bound to have some effect on the cost of living. I admit that nowhere in the Proclamation is there reference to the cost of living but it is patent that a very important item in such cost of living is the amount paid for rent, whether for dwelling or business purposes. It is not an unreasonable deduction to conclude that the Legislature by this Proclamation had, as one of the objects, in view, that of preventing the cost of living soaring above 1941 levels. 18. Under Article 4(b) the Tribunal has power to fix any rent not otherwise subject to the Proclamation. A case might, therefore, come before it to fix the rent of a dwelling house not let in 1941. Should the Tribunal consider the reasons analogous to two reasons here advanced for the increase viz. (1) the landlords' business expenses had increased considerably since 1941 and (2) there was now great demand for such premises. In my view the Tribunal should not consider these factors but should base the figure on what such premises would let in 1941. 19. During the hearing before me a case was mentioned where a Tribunal had varied the rent of a dance-hall, both parties having agreed on the rent. It was increased considerably above the 1941 rent. Without giving an opinion as to whether the Tribunal there gave a correct decision, I consider that the present case is altogether different. The high cost of dancing is hardly a matter which should be taken into account when considering the cost of living but the high rent of godown premises, particularly if there was a general increase, might have a considerable effect on such cost of living. 20. In what circumstances then should a Tribunal vary rents above or below 1941 standard. If premises had been damaged by enemy action during the occupation period then a variation downward is justified. Again should there have been considerable improvements made since 1941, a higher rent is similarly justified. 21. Apart, however, from these exceptional cases I have come to the conclusion that the decision of the Tribunal is not wrong in law. 22. I, therefore, dismiss the appeal.
|