Lam Choi Chiu and Another v. Kwok Tung Sang

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT VICTORIA

CIVIL JURISDICTION

PENT INCREASES APPLICATION NO. 42 OF 1970

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Coram: M. Morley-John, D.J.

Date of Judgment: 8 JAN 1970

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JUDGMENT

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1. In this case I have been asked to decide a preliminary point of law, namely as the notice to quit in this case expired on 30th September 1970 but that after that date the landlord accepted rent, does the acceptance of this rent create a new tenancy.

2. It has been laid down that acceptance by the landlord of rent due after the expiration of a notice to quit may be evidence upon which the court will infer the creation of a new tenancy. However it was decided in the case of Clarke v. Grant⁽¹⁾, that such acceptance of rent has no effect on the notice to quit unless it be established that it was the intention of the parties, by paying and accepting the rent, to create a new tenancy. In each case the question is quo animo the rent is received, and what is the real intention of the parties.

3. In the case of Marcroft Wagons Ltd. v. Smith⁽²⁾ Denning L.J. held that it is no longer proper for the courts to infer a tenancy at will or a weekly tenancy from the mere acceptance of rent (after expiration of the notice to quit). They should only infer a new tenancy when the facts truly warrant it. If the acceptance of rent can be explained on some other footing than that a contractual tenancy existed, as for instance, by reason of an existing or possible statutory right to remain, then a new tenancy should not be inferred. As the learned author of the Rent Acts by Megarry has stated,

"Under the provisions of those Acts whether the contractual tenancy was determined by notice to quit or by an expiration of a fixed term, the landlord had no option but to permit the tenant to remain."

Again as Denning L.J. pointed out in Marcroft Wagons v. Smith

"Seeing that the house was within the Acts, the landlords had no clear right to turn the defendant out. They could not have done so except by proving to the county court that she was not protected by the Acts."

4. I fully realize that the authorities quoted above are cases in relation to the English Rent Acts, but I am satisfied that the same principles apply in this case.

5. Section 7(1) of the Rent Increases (Domestic Premises) Control Ordinance, 1970 provides, inter alia, that a tenancy or sub-tenancy shall terminate where a notice to quit under sub-section (2) or (4) or an order made under sub-section (7) takes effect. In this case a counter notice was served in accordance with the provisions of sub-section (6), disputing the right of the landlord to serve notice to quit, and therefore the tenancy in question would not terminate unless an order made under sub-section (7) takes effect, that is the order for possession of the premises in question sought by the applicant in this case. As I have not yet made such an order, from the wording of sub-section (1) the tenancy in question has not terminated although the notice to quit has expired, and until I make an order, if I do after having heard all the evidence in this case, the landlords are in the same position as the landlords in the Marcroft case, they cannot turn the tenant out.

6. Under the circumstances, in this case I am not satisfied that the mere fact of the applicants having accepted rent after the expiry of the notice to quit, creates a new tenancy per se, and before I could find that such a new tenancy had been created, I should need to hear evidence which clearly showed that the parties had agreed to create such a new tenancy.

8 JAN 1970

Representation:

Mr. Ronald W.H. Wong of Messrs. Johnson, Stokes & Master for the applicants.

Mr. Gallant Y.T. Ho of Messrs. Philip K.H. Wong & Co. for the respondent.