Au Yeung Tung and Another v. No Ho Chor t/a Lee Shing Hong
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IN THE DISTRICT COURT OF HONG KONG HOLDEN AT VICTORIA CIVIL JURISDICTION ACTION NO. 737 OF 1972 _________________ Between
_________________ Coram: N.B. Hooper, D.J. _________________ JUDGMENT _________________ 1. This is an action by the Plaintiffs who are husband and wife for possession of the flat known as Flat B on the 3rd floor of Southern Building No. 261 King’s Road Victoria. It is admitted by the Defendant that the building of which the premises form part is an entirely new building within the meaning of S.3(1)(a) of the Landlord and Tenant Ordinance Cap.255. Facts are also admitted which establish that the Tenancy Prolonged Duration Ordinance 1952 and the Tenancy Prolonged Duration Amendment Ordinance 1963 have no application to these premises. It is further admitted that by a notice dated 23rd July 1971 the plaintiffs required the defendant to quit and deliver up vacant possession of the said premises on 31st January, 1972 and that this notice together with a literal translation thereof in the Chinese Language was duly served on the Defendant on the 23rd day of July, 1971 and was also posted on three consecutive days viz 23rd, 24th and 25th days of July 1971 upon the main entrance of the said premises. 2. The Plaintiffs claim that these premises were let for business purposes and that therefore the Rent Increases (Domestic Premises) Control Ordinance 1970 has no application thereto. This is denied by the Defendant who claims that there was no stipulation as to user of the premises at the time when the tenancy was created, and that the Defendant has at all material times used the premises for domestic purposes. Both parties were represented in these proceedings and it was agreed that the only issue which the Court had to determine, was as to the primary user of the premises. 3. The meaning of a “domestic tenancy” and “domestic sub-tenancy is given in S.5(1) of the Ordinance (Cap.338) as “a tenancy or sub-tenancy of premises let as a dwelling”. Subsection (2)(b) and (c) however provided:
4. Subsection (3) of this section provides that in determining whether premises were let, or are being used, as a dwelling, certain matters may be taken into account, and subsection (4) provides that where a dispute arises as to whether a tenancy or sub-tenancy is domestic, the landlord, tenant, principal tenant or sub-tenant may, if primary user is relevant to the dispute apply in the specified form to the Commissioner for Rating and Valuation for his certificate as to the primary user. On receipt of such an application the Commissioner is compelled by virtue of sub-section (5) of that section to inspect the premises and is given a discretion depending upon whether he is satisfied on the evidence available as to primary user, to issue a certificate “as to primary user of the premises on the day of his inspection” or to decline to issue such a certificate. 5. Subsection (6) of the same section provides:
6. Sub-section (7) of the same section provides a procedure for the landlord, tenant, principal tenant or sub-tenant to apply to the Court for review of such certificate or for determination as to whether the tenancy or sub-tenancy is domestic and sub-section (8) gives the Court power to make certain orders on such an application. 7. It is common ground in the present case that although the Commissioner issued a certificate relating to an inspection on the 2nd July 1971 to the effect that the primary user was non-domestic no application under sub-section (7) was ever made. The defendant claims this was because he only became aware of the issue of the issue of the certificate at a late stage when he received the letter from the Commissioner for Rating and Valuation dated 23.4.72 (Ex. D3). 8. The question arises as to the material date or dates that primary user must be proved. The words referring to the user in subsection (2)(b) are phrased in the present tense. The words in subsection (2)(c) in themselves give no clue as to the time for which primary user shall be proved. 9. Both parties contended that the material time for which primary user had to be established was July 1971, Mr. Siu for the Plaintiff saying it was the time when his client became owner of the premises and Mr. Leung saying that it was “just before August the date of the issue of the Notice to Quit”, both of which transactions occurred in July 1971. 10. Personally I can’t see how the date the Plaintiff became owner can be in any way material. It seems to me that Mr. Leung’s contention has more merit, as there is a certain logic in relating the material time to the Notice to Quit since the Notice to Quit is rendered ineffective so long as the tenancy is protected by the Rent Increased (Domestic Premises) Control Ordinance. I would have thought that there would be some merit in a submission that the material time is the period during which such a Notice to Quit was running. 11. Such a view would however not be free from considerable practical difficulty. It would be possible for a person whose user of premises is primarily non-domestic after having received Notice to Quit to change the primary user to domestic to gain the protection of the Ordinance and the legislation would therefore be open to abuse. 12. The certificate of the Commissioner of Rating and Valuation is only prima facie evidence of the user on inspection. This seems to suggest that it is accepted that primary user may change from day to day otherwise the certificate could have been made prima facie evidence of user over a longer period. Indeed in one case before me no less than three such certificates were produced all relating to inspections on the same premises on different dates two of which certified the primary user as non-domestic and one as domestic. 13. If it is accepted that primary user may change from day to day, it becomes increasingly more important for there to be a particular date or dates to which the parties should direct their proof. 14. There is a passage in a judgment in the Supreme Court by Mr. Justice Mills-Owens (as he then was) where he considered this question (O.J. Action No. 1393 of 1970).(1) The facts were somewhat complicated in that Notice of Termination under the Tenancy (Notice of Termination) Ordinance (Cap. 335) had been given in November 1969 before either the Security of Tenure (Domestic Premises) Ordinance came into force on 30th January 1970 or the present Ordinance came into effect on 5th June 1970. The Notice to Quit purported to expire on 31st May 1970, i.e. before the present Ordinance commenced. 15. The learned Judge considered that there may be two relevant dates for determining primary user, namely the 30th January 1970 and the 5th June 1970 the dates when the two Ordinances became law, and brought within their protection all domestic tenancies and sub-tenancies existing on those dates. 16. The use of the present tense in Subsection 2(b) could be construed as referring to the commencement date. But what of the position where premises were used primarily for domestic purposes on this date but changed afterwards? Is the tenancy still to be regarded as protected until the expiry of the protection period? 17. There appear to be practical difficulties which ever way this problem is viewed. I am content to follow the lead of Mr. Justice Mills-Owens in the abovementioned case and to require proof of primary user on the commencement date of this Ordinance, that is 5th June, 1970. 18. The Plaintiff both husband and wife gave evidence. The evidence of the 2nd Plaintiff Madam Lee Ooi Lin was inconclusive as to whether the premises were being used as domestic or business purposes. She claimed to have attended the premises in May 1971 prior to the purchase of these premises by the Plaintiffs, but what she saw on this occasion tends if anything to confirm the Defendant’s assertion that he and his family resided in these premises. It would appear however that the Plaintiffs do not dispute the fact that the Defendant and his family reside in these premises. They base their claim on the fact that the primary user of the premises was business. The 1st Plaintiff Mr. Au Yeung Tung gave evidence of a visit to the premises in February 1971 and described the conditions he saw at that time, which led him to believe that the premises were business premises. His main reasons for this conclusion, are first that there was a signboard at the entrance of the premises bearing the defendant’s trade name Lee Shing Hong, secondly that inside the premises on one of the walls was a certificate of Business Registration in respect of the firm Lee Shing Hong, thirdly there were three desks in the premises, fourthly on one of the desks there was a telephone and on another there was also one, and fifthly there were also in the premises shelves for stationery. Mr. Au claimed that he did not enter or inspect every part of the premises, but he claimed what he saw was sufficient to lead him to believe that the premises were business premises, and it was for this reason that he purchased these premises later on in July. It is clear from his evidence that he wanted to avoid purchasing premises which were protected by the Rent Increase (Domestic Premises) Control Ordinance. In support of his case Mr. Au also produced the certificate from the Commissioner of Rating and Valuation dated the 9th of July, 1971 certifying that the primary user of these premises on the 2nd of July, 1971 was non-domestic. He also produced a certified true copy of an “application by an individual for registration of business carried on by him in the Colony” in which the Defendant certified that he carried on a business under the name of Lee Shing Hong and that the address of this business was at the premises in question and in which the Defendant also described the nature of the business as an import/export business and indicated that the commencement date was 14th Mach 1969. The certificate bears an endorsement that business ceased on 22nd August, 1971, as per letter dated the 22nd of August, 1971. 19. The evidence of the 1st Plaintiff relating to what he saw at the time when he inspected the premises in February, 1971, the certified true copy of the application under the Business Registration Regulations of 1959 showing no alteration of the particulars registered before 22nd August 1971, and the certificate of primary user issued by the Commissioner for Rating and Valuation, relating to an inspection on the 2nd of July, 1971, all support the plaintiff’s case that these premises were used primarily for business purposes. Furthermore by virtue of section (5) sub-section (6) of the Rent Increases (Domestic Premises) Control Ordinance Cap. 338, the certificate issued by Commissioner for Rating and Valuation is prima facie evidence that the primary user of these premises was business purposes on the 2nd of July, 1971. 20. According to Earl Jowitt’s Dictionary of English Law “Prima Facie Evidence” means that which, not being inconsistent with the falsity of the hypothesis, nevertheless raises such a degree of probability in its favour that it must prevail if believed by the jury unless rebutted or the contrary proved; conclusive evidence, on the other hand, is that which excludes or at least tends to exclude, the possibility of the truth of any other hypothesis than the one attempted to be established. “In my view the certificate from the Commissioner for Rating and Valuation must be regarded as raising such a degree of probability in favour of the contention that the primary user on the 2nd July 1971 was non-domestic, that if the Defendant challenges this the burden shifts to him to rebut or prove the contrary. 21. Has the defendant succeeded in discharging this burden? He has given evidence himself, and called neighbour who resides on the ground floor, of the same building, and has called his uncle who last year resided at the suit premises. The defendant claims that no business had ever been carried on in the premises in question, and his two witnesses testified to the fact that as far as they knew the defendant never carried on business in these premises. It would appear therefore that if their evidence is to be believed the certificate of the Commissioner for Rating and Valuation is complete false. This is not a dispute as to the primary user, but a complete denial that the premises were used for non-domestic purposes at all. An assertion of this kind obviously will require very cogent evidence, because as has been stated by Mr. Justice Blair-kerr in a case under the 1963 Rent Increases (Domestic Premises) Control Ordinance, the certificate of the Commissioner for Rating and Valuation is of considerable evidential of the Commissioner for Rating and Valuation is of considerable evidential value. It would seem however that the time lapse between the relevant date and the date of inspection must effect this evidential value to some extent. 22. Further where a certificate is issued on the application of the occupier of the premises, it’s weight may be viewed with regard to the possibility that the occupier had prepared the premises for inspection. A possibility of which O’Connor D.J. was fully aware in an earlier case.(2) However in the present case the inspection was carried out as a result of an application by the plaintiff (that is the owner of the premises) and it would appear therefore that the occupier (i.e. the defendant) did not have an opportunity of preparing the premises for inspection. The opinion and findings of an impartial third party in the form of the Commissioner for Rating and inspection, must be of considerable weight. I find it very difficult to believe that he should certify that the primary user on the 2nd July 1971 was non-domestic, when in fact no business was being conducted in the premises at all. 23. The Defendant attempted to reduce the weight to be attached to the certificate by admitting in effect that the premises could have looked to an official to be business premises when in fact they weren’t. He admitted that there was a signboard at the entrance to the premises bearing the firm name Lee Shing Hong. He admitted that there was on the wall inside the premises a business registration certificate issued also in the name of Lee Shing Hong. He also admitted that in fact he did apply for registration of the business Lee Shing Hong in 1969 and that this business registration was only cancelled in August, 1971. He claimed that it had been his intention with the financial help of a friend to set up this business, which was to be an import and export business, but because his friend left the Colony without advancing the money which he had promised, the scheme never got off the ground. This version of the defendant however is faced with the difficulty, pointed out by Mr. Siu for the Plaintiff, that it is dependant on the damaging admission that the particulars contained in his application for registration under the Business Registration Regulations, were false. 24. The defendant also gave evidence with regard to the various places in the premises where members of his family slept. He admitted that while he and his wife shared one room his mother-in-law and two of the children occupied bunks in the kitchen and his other two children slept in one of the two rooms used as tengs. A plan of the premises drawn by the Plaintiff while he was giving evidence was not really challenged and gave an idea of the layout of the premises. If the premises were being used entirely for domestic purposes as claimed by the defendant, I find it difficult to understand why his mother-in-law and two of the children should have been confined to sleeping in the kitchen. The explanation given by the defendant for this was lack of space, but I find this very difficult to believe having regard to the fact that there were at least two rooms which according to the defendant were being used as tengs. In respect of one of these rooms the defendant said at page 32 of the record and I quote form his evidence.
By originally he means 1969. This would appear to suggest that some other business might have been carried on there. I was not greatly impressed with his evidence. 25. The two witnesses he called to support him were both very closely associated with him. The second defence witness Mr. Zee Man Fai claimed that he visited the defendant almost every week but he never found that business was being carried on in these premises. The other witness who gave evidence was Mr. Ng Woon, the uncle of the defendant who had in fact resided with the defendant in 1971 and was residing there in July of that year. He claimed to occupy a sofa. And further that he was present when a Government officer came to the premises, but according to him the Government officer only took measurements and did nothing else. Although Mr. Ng Woon has actually resided in the premises he was unable to say how many telephones there were in the premises, claiming that it appeared there were two telephones and then later qualifying this almost immediately by saying “I can’t be sure” and gave his reason for this uncertainty by saying that he seldom answered the telephone calls. The evidence of these witnesses must be weighted according to their relationship with the defendant. 26. Looking at the evidence as a whole I am not satisfied that the premises were primarily used for domestic purposes on the 2nd July 1971 and I believe the plaintiff when he says that the premises were being used primarily for business purposes at the time of his inspection in February 1971. 27. The existence of the Business Registration Certificate with particulars unchanged from 14th March 1969 till 22nd August, 1971, the fact that the plaintiffs’ contentions have been accepted by the Court that primary user in February 1971 and July 1971 was non-domestic tends to show that the primary user on 5th June 1970 was more probably also non-domestic and therefore in my view the Rent Increases (Domestic Premises) Control Ordinance does not apply. 28. That being so the Notice to Quit given under the provisions of the Tenancy (Notice of Termination) Ordinance took effect to terminate the tenancy on 31st January 1972 and the plaintiff is entitled to an order for possession. 29. I would give judgment for the plaintiff as prayed with costs to be taxed under Scale TV.
17.7.1972 (1) Reported in 1972 H.K.L.R. p.145 Shirlien Light v. Wan Bing Wong (2) Li Yin Man v. Ng Sik 1964 D.C.L.R. 268 |