Chen Chi Wai and Others v. Wong Tak Woon

Case No.LDDB 15/1992
Court
LDDB
Date29 Jul 1993
Judge
Case Document
100%

Landlord and Tenant – Part IV – negotiations achieved agreement on all issues other than rent where the gap between the parties during May 1993 was narrowed to $27,000 - $30,000 – Tenant applied for new tenancy on 27th May 1993 when a Form CR101 purported to terminate the tenancy on 30th June 1993 – at trial Respondent opposed new tenancy on ground that Applicant had failed to serve Form CR102 – whether Form CR101 dated 8th December 1992 was served on Applicant before 31st December 1992 - alleged service by registered post but Applicant denied receipt of any notice until Respondent’s solicitors faxed a copy to him after 30th June 1993 – whether Tribunal had power to enlarge time for service of Form CR102- whether Applicant’s letter of 12th April 1993 satisfied the requirements of Form CR102 and if so could and should time be enlarged – whether negotiations established waiver or estoppel against Respondent in respect of Applicant’s obligation to serve Form CR102 – Held :

1. Tribunal does have power under Section 10(2)(d) Cap.17 to enlarge time to serve Form CR102 – Tribunal’s judgment exercising such power in Speakman v. Huang Investment Ltd LT No.401/86 previously only supported by dissenting judgment in Ram Isardas Mahtani v. Wong Kwok-tai (1989)2 HKLR 296 now unanimously upheld in recent Court of Appeal judgment of Law Chee-sing v. Lau Kwong-kun Civil Appeal No. 102/93.

2. On facts contents of letter of 12th April 1993 did not substantially comply with Form CR102 requirements.

3. Jurisdiction cannot be conferred by waiver or estoppel but they may otherwise arise under Part IV.

4. Unnecessary to consider waiver and estoppel further as Applicant’s evidence rebutted the prima facie presumption of service by post.

5. As the current tenancy had not been duly terminated under the Ordinance the Applicant was entitled to remain in possession at the old rent.

6. There being no agreement by both parties under which a new tenancy could be granted under Section 119C the application for a new tenancy was dismissed on these jurisdictional grounds.

IN THE LANDS TRIBUNAL OF HONG KONG

Demolished Building Case No. DB. 15 of 1992

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BETWEEN

CHEN CHI WAI AND OTHERS Applicants
  AND
WONG TAK WOON Respondent

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TRIBUNAL : M.W. PHILLIPS ESQ, MEMBER

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DECISION

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1. These are applications to the Lands Tribunal for the determination of compensation under the provisions of Section 7 of the Demolished Buildings (Re-development of Sites) Ordinance Cap.337.

2. The applicants were tenants of a three storey pre-war building at 19 Cross Street, Wanchai. The building was declared dangerous by the Building Authority on 9th July 1992 following an Emergency Closure Order by the District Court on the same day.  Apparently this action was taken due to part of the external wall having collapsed on the afternoon of 7th July 1992, and, at that time, according to officers of the Building and Lands Department, there was a danger of further collapse.  A redevelopment notice was issued on 14th September 1992.

3. Staff of the Rating Valuation Department visited the site on 8th July 1992 and recorded details concerning each of the occupants.  This information included the areas each occupied within the building and details of their respective tenancies.  This information was made available to the Lands Tribunal in accordance with what is now a long established practice.

4. The Rating and Valuation report also expressed the opinion that all the floors of the building were subject to the application of Part I of the Landlord and Tenant Ordinance, except for the first floor and the roof.  I took the contents of the report into account in accordance with the provisions of the Lands Tribunal Ordinance.

5. Pre-war buildings fall within the provisions of Part I of the Landlord and Tenant (Consolidation) Ordinance, Cap. 7, which provides for rent control and protection of security of tenure for domestic tenants.  Before 1984 business tenancies in pre-war buildings were similarly protected, but that is no longer the case.  From 1st July 1984 such protection ceased and Section 3(i) was introduced.  Under this provision Part I shall not apply to “any premises which are, or since 4th May 1979 have been business premises”.  I held the domestic premises were subject to Part I. 

6. The original applicants were :

Applicant 1. Chen Chi Wai and Cheung Man as co-subtenants of the ground floor shop front and cockloft immediately above.  The area occupied was 16 square metres.
Applicant 2. Tse Wai Kat, as subtenant of a ground floor cubicle dwelling and cockloft.  The area occupied was located immediately to the rear of the shop, and had an area of 11 square metres.
 Applicant 3. Ng Hon Ying as subtenant of a ground floor cubicle dwelling of 4.3 square metres and separate ground floor business storage area of 2.6 square metres on the opposite side of the ground floor passageway from the shop.
Applicant 4. Tsang Bui as subtenant of a ground floor double bunk cubicle of 5.5 square metres, and a bedspace on the cockloft of 1.8 square metres.  This bedspace was one of three such bedspaces on a large rear timber cockloft above the ground floor.  This cockloft was exclusively for domestic use and access was by way of a ladder from the common passageway on the ground floor.  Tsang Bui also occupied a separate business storage area of 5 square metres on the opposite side of the ground floor passageway from the shop and the cubicles of Tse Wai Kat, Ng Hon Ying and himself.
Applicant 5. Ma Chi Yiu as subtenant of a second floor cubicle dwelling including a cockloft, as well as a bedspace and cockloft across the passageway.  The total area of his tenancy was 16.3 square metres.
Applicant 6. Madam Wong Yuk Wah as a subtenant of a second floor cubicle dwelling including a cockloft.  The area of her tenancy was 8.8 square metres.
Applicant 7. Lau Kin Shing as subtenant of a bedspace of 1.8 square metres, which was one of the three on the domestic rear timber cockloft above the ground floor.  He also occupied a portion of the separate business storage area adjoining those of Ng Hon Ying and Tsang Biu on the opposite side of the ground floor passageway from the shop and the other cubicles.

7. The above applications were heard on 26th February and 25th March 1993.

Applicant 8. Madam Kong Sau Luen, as principal tenant of the ground floor and occupant of the same middle cubicle as that subject to the claim by Tse Wai Kat, (Applicant 2).  Madam Kong Sau Luen was granted leave by the Chief Justice on 6th April 1993 to make a late application after the first hearing.  Her application was heard together with the respondent’s application for review of the awards made in respect of Tse Wai Kat (Applicant 2), Ma Chi Yiu (Applicant 5), Madam Wong Yuk Wah (Applicant 6), and Lau Kin Shing (Applicant 7).

8. This late application and the review were heard on 21st, 22nd and 23rd June 1993.  The applicants and the respondent were unrepresented at both hearings.

9. On the first occasion, evidence was heard from each of the then applicants.  It was found that, Chen Chi Wai and Cheung Man (Applicant 1) who were business partners and co-tenants of part of the ground floor, and Ng Hon Ying (Applicant 3) who was also occupying part of the ground floor solely for business purposes, were occupying premises which did not come within the provisions of Part I. These parts of the ground floor were not domestic premises.  Their applications accordingly failed and no compensation was awarded to them.

10. The others were held to be protected tenants under the provisions of Part I of Cap.7.  The compensation awarded was as follows :

A1 Chen Chi Wai and Cheung Man
(Business premises)
Nil
A2 Tse Wai Kat $14,000
A3 Ng Hon Ying
(Business premises)
Nil
A4 Tsang Bui $15,500
A5 Ma Chi Yui $26,000
A6 Wong Yuk Wah $14,000
A7 Lau Kin Shign $6,500

11. At the second hearing the late application by Kong Sau Luen was dealt with.  The respondent, Miss Wong Tak Woon, also sought and was granted a review of the decisions to award compensation to, Applicant 2, Tse Wai Kat, Applicant 5, Ma Chi Yiu, Applicant 6, Madam Wong Yuk Wah and Applicant 7, Lau Kin Shing.

12. The facts established on the evidence adduced at the original hearing were that each of these applicants, whose awards were now to be reviewed, occupied subdivided sections of the building which were and had always been subject to the provisions of Part I.  They were tenants or subtenants within the provisions of the Section 7 of the Demolished Building (Re-development of Sites) Ordinance Cap. 337, to be awarded compensation for loss of their protected tenancies.

13. No applications have ever been made, in accordance with the various provisions in the Landlord and Tenant (Consolidation) Ordinance Cap. 7, either to the Commissioner of Rating and Valuation or the Lands Tribunal for any of these premises to be excluded from the application of Part I.  Also no applications had been made for the Commissioner to determine under Section 3(2) whether or not Part I applied to them.

14. I pause here to explain something of the background to compensation awards under the Ordinance.  A similar explanation was given to the parties at the beginning of the original hearing.

15. Because domestic premises within pre-war buildings are subject to rent control and security of tenure provisions, such buildings, if sold, can not realize as high a price as they might have, had there been no controls or the buildings were vacant and free of all tenancies.  The effect of the tenancies is to reduce what might otherwise have been the value of these properties.

16. This difference between vacant possession value and tenanted value, is required to be assessed by the Director of Buildings and Lands under Section 6 of the Demolished Buildings (Re-development of Sites) Ordinance Cap.337, and is known by the term of “Incremental Value”.

17. The Director informs the owner of the building, which has been declared dangerous and is subject to a redevelopment order, of the amount of this Incremental Value, which, by virtue of Section 8 of Cap.337, in a round about way, limits the total amount of compensation which the Lands Tribunal may order the owner to pay to the dispossessed protected tenants.  The owner may appeal to the Lands Tribunal against this assessment of Incremental Value if he or she considers it excessive.  No such appeal was lodged in this case.

18. The Incremental Value, which is effectively the Director’s assessment of the value of the tenants’ interest in the property (i.e. Owner’s Interest + Tenants’ Interest = Market Value) was assessed at $112,700.  The information relied on by the Director to carry out this assessment includes that supplied by the Commissioner of Rating and Valuation to the Lands Tribunal.

19. The original award of compensation to the tenants in this case totaled $76,000.

20. Tenants’ compensation is basically made up of “two heads of claim.”  One is the tenant’s interest in the property due to his occupation at a controlled rent below market value and can be measured as the value of his Profit Rent (Market Rent – Permitted Rent) for the period he could reasonably expect to continue in occupation.  The other is the estimate of the costs he would be expected to incur by having to remove to other premises.  The second head follows from the protection Part I gives for security of tenure.  If there were no statutory provision for security of tenure and the tenant were subject to a tenancy for a number of years, the closer his dispossession is to the end of the tenancy, the less is his proportionate loss for having to move.  The reason for this is that normally a tenant must expect that he will have to incur removal costs at some time, usually at the conclusion of the term of his tenancy or when his right to occupation has expired.

21. These principles of compensation were explained more fully in this Tribunal’s decision in the case of Scaiffee Ltd v. Chow Hei Chun and Others (1983) HK DCLR 11, which was a Part II case which was heard before section 53A (4)(a) was amended in 1984.  At that time the same basic principles as those for Part I applied.  That case also referred to the Canadian case of Frankel Steel Construction Ltd v. Metropolitan Toronto (1966, 58 DLR) with respect to the level of tenants’ disturbance claims.  Other Lands Tribunal cases which deal with these principles are Kingearn Company Limited v. Siu Chuan Sang and Others HE 66-68/85, and Panhard Limited v. Yeung Chun Leung and Yueng Kwok Leung trading as The Fan Shun Cheung Fashion Company and The Shanghai Fur Company HE 51/83.  The latter case dealt was a business tenancy under Part I before business premises were excluded.

22. None of the parties called valuation or other expert evidence.  Although each of the tenants gave evidence, nothing was said that was helpful in determining the amounts of compensation which should be awarded.  The respondent, Miss Wong ventured, in submission, to apportion between the tenants a total compensation figure of $50,000 which she said she was prepared to pay.  However, there was no sound basis for this amount, nor any valid reasons for her proposed apportionment.

23. The value of a tenancy cannot be based on sentimental value or, as Miss Wong proposed, on previous length of occupancy.  It, as with any commodity or property, can only be worth what, at the particular time, the buyer considers is the value of his future use or occupancy.  So too does an owner or tenant base the worth of his interest in a property on what he considers is the value of his expected future use or occupancy of that property.  If that is taken away, as are the protected Part I tenancies in this case, the value of that future use plus disturbance must be the measure of that loss, and hence the measure of compensation to be awarded.  In other words it is the loss of Part I protection in the future which has to be valued, not the historical occupancy whether it was protected or otherwise.

24. Multiples of Ratable Value which are used as the basis of tenants’ compensation for Part II and Part IV of the Landlord and Tenant Ordinance are not, as Miss Wong seemed to think, a guide as to what should be awarded in respect of Part I. Rateable Value is an assessed statutory annual rental at a relevant date.  It bears no relationship with the value of a tenant’s interest in a property. Awards under Parts II and IV of the Ordinance can be of no relevance to Part I, as Part I does not give Ratable Value as a base for compensation.

25. Compensation was awarded in this case in line with similar recent awards for other comparable Part I premises.

26. I now turn to the application of Madam Kong Sau Luen, Applicant 8, and to the respondent’s individual arguments as to why wards should not be made to the Applicants A2, A5, A6 and A7, notwithstanding the respondent’s earlier submission to apportion certain amounts of compensation within a total of $50,000 to each of them.

Tse Wai Kat (Applicant 2)

and Madam Kong Sau Luen (Applicant 8)

27. Tse Wai Kat had applied for and was granted compensation for his occupation of a middle cubicle on the ground floor.  The area he occupied was about 11 square metres and he gave evidence that he had been living at the premises for which he paid a rent of $1,000 per month.  The respondent Miss Wong did not cross-examine Mr Tse.  In submission she suggested he be given minimal compensation of $1,000.  The report from the Commissioner of Rating and Valuation described the area he occupied as a cubicle dwelling of 8.7 square metres plus a cockloft area above of 2.3 square metres which was used for business storage.  On his unchallenged evidence and the Commissioner’s report, Mr Tse was awarded $14,000 compensation.

28. On an application by the respondent this award is now reviewed together with an application by the absentee principal tenant, Madam Kong Sau Luen (Applicant 8) who, as mentioned previously, was given leave by the Chief Justice to make a claim out of time for compensation for the same space as that credited to Tse Wai Kat.

29. The provision for the Chief Justice to enlarge the time for applications dates back to the days of the Tenancy Tribunal which was not a court, but a tribunal appointed on each occasion by the Chief Justice to hear such cases and make subsequent recommendations to the Governor in Council.  When jurisdiction was transferred to the Lands Tribunal the rest of the Ordinance, which is now somewhat antiquated, was virtually unaltered. This subject was dealt with in the Lands Tribunal case of Lam Kang Hee and Lum Sai v. Wo Yick Enterprises Company Limited.  DB 17 of 1989, at page 4 and also in Cruden, “Land Compensation and Valuation Law in Hong Kong” at Chapter 6.

30. Madam Kong had given evidence at the earlier hearing when she was called by the respondent.  She explained how she took over as principal tenant of the ground floor of No.19 Cross Street when her aunt Kong Lin, who was previously the principal tenant of the ground floor, died in December 1985.  Kong Sau Luen left 19 Cross Street about two years ago.  At the time the building collapsed she was in China visiting her mother.  She said that parts of the ground floor had been sub-let to the tenants, Ng Hon Ying, Tsang Bui and Lau Shing, (Applicants 3, 4 and 7) all of whom had made applications to be granted compensation. She made no mention of Tse Wai Kat, nor was she asked anything concerning his tenancy by the respondent Miss Wong.

31. At the subsequent review hearing which also included her application for compensation, Kong Sau Luen admitted that she had let the middle cubicle about two years ago to a Thai woman who used it to store children’s clothing in connection with a hawker’s stall in Cross Street.  It transpires that Tse Wai Kat was a salesman at this stall.  The Thai woman was Tse’s wife and on his evidence he took up residence in the middle cubicle at No.19 Cross Street when he and his wife separated.  Kong Sau Luen denied any knowledge of Tse but agreed that she let the whole of the middle cubicle to the Thai woman for her to store children’s clothing.

32. On that evidence it appears that the middle cubicle was let by Kong Sau Luen as business premises.  She no longer had any claim on it as her own domestic premises.  Tse Wai Kat only came to use it for domestic purposes after it had effectively become business premises and therefore at the time of his occupation it no longer came within the provisions of Part I.

33. Non-domestic premises are excluded from Part I controls.  Once Part I premises have been excluded they cannot thereafter become subject to Part I by reverting back to domestic user.  As Part I did not apply to this middle cubicle at the time the building was declared dangerous, no compensation can be claimed or awarded for these premises.

34. On review, the award to Tse Wai Kat (Applicant 2) must be amended to nil.  The application for compensation by Kong Sau Luen (Applicant 8) must also fail as she was no longer occupying the premises for domestic purposes and the premises were business premises when they were declared dangerous.

Ma Chi Yui (Applicant 5)

35. Applicant 5, Ma Chi Yui established beyond any doubt that, at the time of the incident of 7th July 1992, he was the tenant of the Part I premises on the 2nd floor of number 19 Cross St.  The respondent, through a witness summons under Rule 20 of the Lands Tribunal Rules, called Mr. Ho Chi Chong, an officer of the Housing Department, to give evidence concerning the public housing tenancy granted to Ma’s father on October 1981.  The tenancy was subsequently granted to his widow, Ma’s mother, Lau Kam Chun from 1st July 1988.  The name of Ma Chi Yui was included on the list of family occupants on the original tenancy but had been deleted from the second tenancy on 21st September 1992.  Miss Wong also drew attention to the clause in the tenancy agreements requiring that the listed family members “taken up and retain permanent residence in the premises within one month after the commencement of the tenancy.”

36. Miss Wong believed that this evidence showed that Ma Chi Yui did not live at 19 Cross Street, but at the flat in the Wong Chuk Hang Housing Estate.  This was an issue of fact which I had to determine before I could hold that Ma Chi Yui was a tenant of domestic accommodation at 19 Cross Street immediately before the redevelopment notice was served.

37. Ma, who would have been 12 years old when the family was granted public housing, said he never left the second floor accommodation at 19 Cross Street.  He continued to live there and attend school nearby.  His mother paid the rent for him to stay on at Cross Street.  He later took up paying the rent himself, first to the grandson of the original principal tenant, and later by registered letter directly to the respondent.  He had kept all his receipts and the registered letters which, incidentally, were returned by the respondent who had refused to accept them.  These receipts and letters were tendered in evidence.  Ma said he had started to pay direct to the respondent on the advice of Yeung Hong Ming, who was the grandson of the original principal tenant, when he gave up the principal tenancy for the second floor in 1987 due to a dispute with the respondent.  Included in these registered letters was the rent for the area occupied by Applicant 6, Wong Yuk Wah.

38. When Mr. Ho was asked by the respondent if public housing tenants were allowed to rent flats in the private sector, Mr. Ho replied that the Housing Department was not concerned if they did.  In fact Mr. Ho said, in spite of the condition referred to by the respondent in the tenancy agreements, that as far as he was concerned, there was no rule preventing a tenant renting a flat outside.  He said that it would be a problem to regulate such a rule.  Mr. Ho was recalled at the review hearing to confirm the deletion of the name of Ma Chi Yui from the list of occupants on his mother’s tenancy on 21st September 1992.  He said Ma had advised that he had moved to an address in Sha Tin.  This was, of course, after the redevelopment notice was served in respect No.19 Cross Street.

39. None of the evidence including that of Mr. Ho did anything to show that, at the time of the collapse of the wall at No. 19 Cross Street, Ma and his new wife were living anywhere else but the subject premises.  In fact to some degree it only reinforced the evidence of Ma that he did and had continued to live at 2nd floor 19 Cross Street from when he was born in 1967.  He said, he continued to live at No.19 Cross Street when his family was granted public housing in 1981.  The Part I tenancy was never given up, although he had used the Wong Cheuk Hang Estate address as his postal address.

40. Even though he may have not complied with the condition in the Housing Tenancy agreement, Ma Chi Yui, at the time the redevelopment notice was issued for 19 Cross Street, was a tenant in those premises which, before the issue of the notice, came within the provisions Part I of the Landlord and Tenant (Consolidation) Ordinance Cap. 7.

41. The respondent cited Section 38 of the Landlord and Tenant Ordinance as relevant to this case to show the onus was on the tenant to prove that he lived there. Section 38 is a procedural provision of Part I which does shift the onus of proof to the tenant in cases under Part I of the Landload and Tenant (Consolidation) Ordinance.  There is no similar section in Cap. 337, nor is Section 38 of Cap.7 anywhere incorporated by reference into Cap. 337. I hold that Section 38 does not apply in the present Cap. 337 proceedings.  However even if it did apply, I would have been satisfied that, on the whole of the evidence, Ma had positively established he was a tenant.

42. Ma Chi Yui was awarded compensation of $26,000 at the first hearing.  On review there was no new evidence supporting any amendment to that award.  After reconsidering the earlier evidence, I remain satisfied that the original award should stand.

Wong Yuk Wan (Applicant 6)

43. Madam Wong Yuk Wah also occupied domestic accommodation on the 2nd floor of 19 Cross St.  She had rented this accommodation for some 50 years and had paid rent to the principal tenant and more recently to the grandson of that principal tenant until 1985.  Why payment ceased then is not clear but her rent was included in the registered letters sent to the respondent by Ma Chi Yui.  These registered letters were not accepted by the respondent and were returned to Ma Chi Yui who, as mentioned previously, has tendered them in evidence.

44. Miss Wong summoned witnesses from the Housing Department and the Immigration Dept. in an attempt to show Madam Wong Yuk Wah did not live at No.19 Cross St.  This evidence only helped to prove to the Tribunal that Madam Wong, as she claimed and the Rating and Valuation officer reported, did live at 2nd Floor, 19 Cross Street up to the time it was declared dangerous.  She now rents a bedspace nearby.

45. The area at 19 Cross Street, second floor occupied by Madam Wong Yuk Wah was held to have been domestic premises and subject to Part I of the Landlord and Tenant (Consolidation) Ordinance Cap.7.

46. The award to Madam Wong Yuk Wah of $14,000 should stand.

Lau Kin Shing (Applicant 7)

47. Lau Kin Shing rented one of the three bedspaces on the rear cockloft above the ground floor of 19 Cross Street.  Madam Kong Sau Luen confirmed that Lau was one of her subtenants.  He had previously been employed by her but, since June 1990 had started his own congee business, and is now the proprietor of a shop selling congee at Ground Floor 7C Cross Street.  He did not attend the first hearing but was represented by Chen Chi Wai (Applicant 1) by leave of the Tribunal (Lands Tribunal Rule 24).  He was present and gave evidence at the review hearing.

48. Chen Chi Wai in his evidence verified that Lau was a congee hawker who rented the bedspace at No.19, because he was obliged to prepare the congee in the early hours of the morning before delivering it to his shop in time for his customers’ breakfast.  Lau apparently used the kitchen was a common area available for the use of all the ground floor tenants.

49. The timber cockloft above the ground floor accommodated three bedspaces, one of which was let to Lau Kin Shing.  Another was let to Tsang Biu (Applicant 4) and the third to a Hung Yiu Kei who did not make an application for compensation.  From the plan prepared by the Rating and Valuation Department this cockloft had a total area of 21.25 square metres or about 230 square feet.  Each of the bedspaces took up a space of 1.8 square metres (19 square feet).

50. Lau Kin Shing also owned a flat on the fourth floor of 29 to 31 Wanchai Road.  He and his family lived at this address and he used it as his postal address. However, he rented the bedspace at No. 19 Cross St. as it was convenient for him in connection with his business.  I found as facts that the bedspace on the cockloft was domestic premises and was rented for that purpose.  It was where Lau slept before he went to cook the congee sometime after midnight.

51. Under the provisions of Part I it is the premises which are to be considered, and as these bedspaces were pre-war domestic premises they came under Part I of the Landlord and Tenant (Consolidation) Ordinance Cap.7.  Accordingly, as a tenant of these premises used for domestic purposes, Lau Kin Shing was protected by the provisions of Part I, and, under Section 7 of the Demolished Buildings (Re-development of Sites) ordinance, was entitled to claim and receive compensation for the loss of his protected premises.

52. That he and his family own and occupy other premises does not alter the fact that he was the tenant of these premises.  That ownership and occupation has no more bearing on the issue than if he were to own or rent a holiday home at some other location, or as he does, rent a shop elsewhere in Cross St.  During the same period a person may use more than one premises for domestic purposes.  I was satisfied he regularly used the bedspace to rest and sleep.  I confirm that he did not use the bedspace for business purposes and that he cooked the congee for his shop in the kitchen on the ground floor.

53. The analogies proposed by the respondent, such as Karaoke lounge managers bedding down on couches in their offices in the early hours of the morning, or taxi drivers getting forty winks at the garage of their employer, amount to very different factual situations.  Unlike the bedspace, the Karaoke lounges and garages are not domestic but business premises.  Their transitory use for rest purposes by employees do not change the nature of those premises.  Here the three bedspaces were part of domestic premises and were actually used for domestic purposes.

54. I am not persuaded that the cockloft and bedspaces were anything other than Part I protected premises.  On the evidence I find that Lau’s bedspace was domestic premises and was used by Lau Kin Shing for domestic purposes.

55. I record that he has not been granted compensation for the entirely separate business storage area, which he also rented on the ground floor of No. 19 Cross St.

56. The award of $6,500 to Lau Kin Shing for the domestic bedspace on the cockloft should stand.

Conclusion

57. It is generally accepted that the effect of rent control on pre-war domestic premises, has let to owners of these properties being deprived of a reasonable return on their properties since the end of the war.  This has resulted in the owners being reluctant or unable to adequately maintain these properties. Therefore many become dangerous and subject to redevelopment orders.

58. An added complication is the acceptance by the Ordinance of subtenancies which has led to the existence of principal tenants who continue, in many instances though their descendants, to let these premises as if they were their own.  These days it is often the case that the principal tenants do not reside in the premises. Also they do not always comply with the requirement to let at permitted rents. The result is that the principal tenants, without having had to make any capital investment or to contribute to the upkeep of the buildings, are able to receive the major share of the rental income from these pre-war properties.

59. Owners have come to regard these buildings more as liabilities than assets.  After having received minimal income for many years, they find, when their buildings are finally condemned and have to be demolished, that they are obliged to pay out compensation to tenants who, for many years, have enjoyed the benefit of controlled tenancies or have reaped profits through subletting.

60. Although she did not say anything on this subject, by vigorously opposing the payment of compensation to the tenants in this case, the respondent Miss Wong, has patently demonstrated the frustration which is commonly felt by many other owners of these properties.

61. Frankly, it must be said that sustained rent control tends to cause more problems than it solves.  It may provide cheap housing for those who cannot afford to pay more, but it undoubtedly creates undeserved hardship for the landlords and also often leaves tenants having to make do with prematurely derelict premises. This situation is not uncommon with respect to many post-war Part II premises as well as Part I.

62. Nevertheless this law remains, and Miss Wong has chosen the wrong forum to oppose it.  No matter how unfair it might appear to the respondent, premises subject to rent control laws include a tenant’s valued interest.  When the tenant loses the right to occupy such controlled premises, that tenant loses an asset for which, under the Demolished Buildings (Re-development of Sites) Ordinance Cap.337, there is a right to claim and receive compensation.

63. The fact remains, that while the controls and Cap. 337 exist, tenants’ compensation has to be paid.  The effort to avoid such payment by the respondent Miss Wong has led to a case which should normally have taken about half a day at the most, being extended over a period of three and a half days.

64. Miss Wong caused subpoenas to be issued for no less than seven Government officers representing the Building and Lands Department, Urban Services Department, Housing Department, Rating and Valuation Department and Immigration Department.  One Telephone Company employee who attended the Tribunal in response to a summons, presumably to put a name and address to a telephone number, waited a full day in court only to be told by the respondent after finally entering the witness box, that her evidence was no longer required.

65. Most of the evidence adduced by the subpoenaed witnesses was irrelevant or had already been freely admitted by the tenants themselves.  Miss Wong refused to tell the Tribunal, when asked, what relevance the intended evidence of her witnesses might have to the case.  Rather she left the Tribunal with the assurance that it was “very important” and all would be revealed in due course.  It turned out that, in many instances, she had no idea of what they might say, and was sometimes obviously surprised by their evidence.

66. With the help of property assignment documents, a marriage certificate, a business registration certificate, hawker licenses, Housing Authority tenancies and others many and varied documents, little if anything of the tenants’ private business was left to supposition.  This information, together with copies of her correspondence with the Building Authority and the Land Development Corporation, as well as the lengthy typed submissions which Miss Wong tendered to the Tribunal, did not really include anything very helpful to this case.

67. Miss Wong, who also complained when the Tribunal reinstated the applications of some of the tenants who arrived late at the first day of the hearing, though nothing of keeping everyone waiting for one hour on the morning of the second day of the review hearing, without any leave or prior notice to the Tribunal, while she “had her final submission typed.”

68. Despite the respondent’s delays and unhelpful attitude, the Tribunal acknowledged that she was unrepresented.  Solely for this reason, the Tribunal allowed her far more time than usual to put forward her case and admitted a substantial body of irrelevant or superfluous evidence, which it would not have done had she been represented.

69. In the light of all the evidence and submissions, both at the original hearing and the review hearing, I now make, the following orders :

1. In the case of the application of Kong Sau Luen (Applicant 8), I hereby order that no compensation shall be awarded.

2. Pursuant to Section 11A of the Lands Tribunal Ordinance, the prior order awarding Tse Wai Kat (Applicant 2) compensation of $14,000 is set aside and it is hereby declared that no compensation shall be awarded.

3. All other prior orders are confirmed.

4. There is no order as to cost.

70. The award for gazetting shall now read as follows :

A1 Chen Chi Wai and Cheung Man Nil
A2 Tse Wai Kat Nil
A3 Ng Hon Ying Nil
A4 Tsang Bui $15,500
A5 Ma Chi Yui $26,000
A6 Wong Yuk Wah $14,000
A7 Lau Kin Shing $6,500
A8 Kong Sai Luen Nil

Dated this 29th day of July 1993.

M.W. Philips, Esq. Member