Yue Wan Estates Ltd v. Hong Kong & Kowloon Roast and Preserved Meat Employers & Workers General Association

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT VICTORIA

CIVIL JURISDICTION

ACTION NO. 2697 OF 1972

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Between

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Coram: A. Garcia, D.J.

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JUDGMENT

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1. In this action, the Plaintiff, who in the registered owner of the premises known as No. 12 Kom U Street, 2^nd floor and roof, Hong Kong, sues for the possession thereof pursuant to a notice to quit dated the 23^rd day of December, 1971, served on the Defendant under Section 3 of the Tenancy (Notice of Termination) Ordinance, Cap. 335 and which was to have determined the said tenancy on the 3^rd day of June, 1972.

2. It was agreed at a previous preliminary hearing of this action that the Defendant has 100 members, and that the said premises have been used partly as a club-house and as a dwelling place for four paid members of the Defendant’s staff. It has also been agreed at this trial that no evidence be called by either party to the action and that an agreed bundle of documents consisting of two letters, dated the 10^th January, 1964 and 22^nd June, 1964 respectively, addressed by the Plaintiff to the Defendant, 1 Review Certificate of Increase of Rent issued by the Commissioner of Rating and Valuation under Section 11(4) of the Rent Increases (Domestic Premises) Control Ordinance, 1963, to both parties, two letters dated the 21^st day of December, 1970 and 11^th March, 1971, respectively, addressed to both parties by the Commissioner of Rating and Valuation, a Certificate of Primary User issued by the Commissioner of Rating and Valuation on 10^th March, 1971, addressed to the Defendant, under Section 5(5) of the Rent Increases (Domestic Premises) Control Ordinance, Cap. 338, a notice to quit dated 23^rd December, 1971 addressed to the Defendant, and a letter dated 8^th June, 1972 from the Plaintiff to the Defendant. The Defendant is a registered trade union and by Section 13 of the Trade Unions Ordinance, Cap. 332, enjoys corporate status.

3. In its Statement of Defence, the Defendant pleads estoppel by reason of the matters set out in the abovementioned two letters which the Plaintiff wrote to the Defendant and the Review Certificate of Increase of Rent issued by the Commissioner of Rating and Valuation and that the Plaintiff cannot now allege that the said premises are being used for non-domestic purposes and that they were originally let to the Defendant for use as a club-house. The Defendant further claims the protection of the Rent Increases (Domestic Premises) Control Ordinance, Cap. 338 and disputes the validity of the notice to quit served on it.

4. The parties agreed at the hearing to limit their arguments only to 2 issues, that is, firstly, whether a corporation or company can claim protection under the Rent Increases (Domestic Premises) Control Ordinance, Cap. 338, and secondly, whether considering the matters mentioned in the two above stated letters, the Plaintiff is estopped from alleging that the said premises were first let to the Defendant for use as a club-house and are still being used as such.

5. Mr. So submits that among the exceptions in the said Ordinance which are enumerated in Section 3(5) thereof, no mention has been made that companies or corporations are exempted from the operation of the Ordinance, and whilst he agreed that it has been well-settled in England that companies and corporations cannot claim to be statutory tenants under the Rent Acts in England, the absence of any exempting clause in the Ordinance would imply that companies or corporations can claim protection under the Ordinance. He also submits that the Plaintiff as Landlord, had written the letters to the Defendant on 10^th January, 1964, and 22^nd June, 1964, and in so doing acknowledged that the tenancy was subject to the Rent Increases (Domestic Premises) Control Ordinance, No. 7 of 1963, and the issue of the Review Certificate of Increase of Rent dated 24^th September, 1964 confirms such acknowledgement. In the result, Mr. So argues that the Plaintiff is estopped from alleging any further that the said premises are not protected by the Ordinance.

6. I think that in the absence of any evidence to the contrary the Certificate of Primary User issued by the Commissioner of Rating and Valuation on the 10^th March, 1971, under Section 5(a) of the Ordinance, must be decisive as classifying the use of the said premises as being for domestic purposes and they therefore come within the scope of the Ordinance. I do not consider it necessary then to deal with the question of estoppel, although Miss Leung, for the Plaintiff, has argued, and I think successfully, that the said two letters and the Review Certificate of Increase of Rent do not constitute materials which would set up an estoppel such as is advanced on behalf of the Defendant, the statements being of law and not of fact, but the same materials in my view might indicate that the Plaintiff had acquiesced in the change of user of the said premises from that of a club-house to the primary user of dwelling house.

7. However, the principal issue is whether a company or a corporation, such as the Defendnat, is entitled to protection under the said Ordinance. My attention has been drawn to the relevant passages appearing at pages 111 and 171 of Megarry on the Rent Acts, (9^th Edition), which passage read as follows:

“A limited company cannot claim the protection of the Acts as to possession; even if a servant of the company lives on the premises there cannot be said to be personal occupation by the tenant in the way requisite for a statutory tenancy. This also applies to other impersonal bodies, such as a church in Scotland, though it is not settled whether the rule applies to all corporations. This exclusion is confined to questions of possession as against the corporation as tenant; as landlords, they are subject to the Acts, and even as tenants the Acts protect them as to rent, e.g. as to the maximum rent recoverable, provided, of course, the premises fall within the Acts as being ‘let as a separate dwelling.’ Corporations are thus perhaps better regarded not as being excepted form the Acts, but as being subject to them, though inherently unable to satisfy the conditions necessary to obtain an important part of the benefits of the Acts.”

“It is new well settled that the acts protect only an occupying tenant against eviction, so that he will not be protected if the premises are used as a residence for his servants or other licensees. Thus a limited company which by its very nature is incapable of occupying premises as a home, cannot become a statutory tenant, just as residence by a minister cannot secure a statutory tenancy for his church organization to which the contractual tenancy was granted.”

8. Miss Leung has cited the cases of Miller v. United Bairies (London) Limited (1934) 1 K.B. 57 and S.L. Bando, Limited v. Hitchcock and another (1954) 2 M.B. 317, in support of the abovementioned statements. In the former case, the Defendants were the leaseholders of a shop, with living rooms above in which their manager resided for the purposes of the business, and on the expiration of the lease the landlord claimed possession. The defendants claimed that they were protected by the Rent Restriction Acts, as being in occupation by their manager. It was held that they were not so protected. In that case, it was stated by Lord Wright in his judgment that

“If the rights under the Acts which are given to the statutory tenant are, as this Court has held in several cases, purely personal, I do not see how these rights can be vicariously enjoyed or how the principle of dwelling in the premises by an agent can be admitted. It was naturally not suggested that the manager was a sub-tenant.”

The latter case is authority for stating that the policy of the Rent Acts is to protect a tenant who is in personal occupation of his home. In that case, a clause in a tenancy agreement for a house within the Rent Acts provided that “either the tenant or his present manager” should reside in it. The manager and his family went into occupation, the tenant never residing nor intending to reside in it. Later the contractual tenancy was determined. In proceedings by the landlord for possession, it was held that the tenant was not entitled to the protection of the Rent Acts. The above extract from the judgment of Lord Wright in Hiller v. United Dairies (London) Limited, was cited with approval in the judgment of Lord Denning, L.J. and he added:

“If Hitchcock were enabled by the clause in this agreement to claim the protection of the Acts, it would mean that a limited company by a like clause could obtain protection; and that would be contrary to the principle involved in Hiller’s case.”

9. Despite these authorities which clearly lay down the principle that a company or corporation cannot claim the protection granted by the Rent Acts in the United Kingdom, Mr. So submits that unless an exemption clause is actually written in the Ordinance, the situation in Hong Kong is different. Miss Leung has in reply referred to Section 3(3) of the said Ordinance which reads:

“(3) The benefits and protection afforded by this Ordinance shall, in any tenancy or sub-tenancy to which it applies, be available to the widow, widower, mother, father or any daughter or son ever the age of eighteen years of the tenant or sub-tenant, as the case may be, where she or he was residing with him or her at the time of his or her death, ……”

I can come to no other conclusion on a reading of this sub-section that the same policy as applies under the Rent Acts in the United Kingdom is applicable to the said Ordinance and that this provision recognizes the principle that rights given under the Ordinance are purely personal to the tenant in occupation.

10. There will therefore be judgment for the Plaintiff as claimed with costs to be taxed on Scale IV.