Tan Kan Ming v. Hui Chung Kak and Another

CACV000122/1982

Headnote

Landlord and Tenant (Consolidation) Ordinance, Cap. 7 - by virtue of s.50(3). when an issue arises as to whether a building is or is not a post-war building, the burden of proving that it is not lies on the person so asserting - nothing in s.3 or the rest of s.50 affects the operation of s.50(3)

BETWEEN

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Coram: Hon. Leonard, V.-P., Cons and Fuad, JJ.A.

Date: 3 December 1982

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JUDGMENT

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Fuad, J.A.:

1. This is an appeal from the decision of a District Judge on the 26th July this year dismissing a landlord's claim for possession of a flat in Nam Hung Mansion, Be1cher's Street. He refused leave to appeal, but such leave was given by this Court on the 22nd September. The claim, under s. 53(2) of the Landlord and Tenant (Consolidation) Ordinance, Cap. 7, was based on two grounds : that the premises were reasonably required by the plaintifff (now the appellant) for occupation as a residence for herself and her family and that there had been a breach of a covenant against sub-letting. The parties were represented by solicitors.

2. In his judgment the Judge dealt first with that part of the claim which was founded on the breach of covenant and found, on the facts, that there was no such breach.  No complaint is made against this finding. He then reviewed the rest of the evidence and concluded that the appellant's claim under s.53 (2) (b) of the Ordinance must fail for it had not been proved that the premises sought to be possessed were within Part II of the Ordinance. This is what he said on the matter -

"Defence counsel (sic) raised the point that, although he did not dispute Plaintiff's ownership of the suit premises, which are known as Flat A6, 18/F, Nam Hung Mansion, No. 5 Belcher's Street, erected on Marine Lot No. 264 and Section A of Marine Lot No. 265, he contended that the Occupation Permit produced by Plaintiff showed that it was in respect of the new building at No. 22-23 Praya, Kennedy Town which stood on the same marine lots. He thus submitted that that permit could be for one of the buildings erected on those lots and that Plaintiff had neither proved that Nam Hung Mansion was the only one building on those lots nor that it was the same building as that stated in that permit. It was therefore his submission that there was no evidence of an Occupation Permit having been issued after 1945 in relation to the suit premises under Section 50(3) of the Ordinance to prove that those premises came within Part II thereof and hence within the Court's jurisdiction under Section 50(1) & (2).

From the evidence I fully agree with defence counsel's (sic) argument. I thus find that there is an absence of proof that the suit premises form part of post-war building as stipulated by Section 50(1). (2) & (3). I consequently come to the conclusion that the suit premises are not within Part II of the Ordinance and hence not within the court jurisdiction under Section 49. Plaintiff's claim under Section 53(2)(b) cannot therefore be entertained."

3. I will now turn to the pleadings ,The appellant, inter alia, averred by her Particulars of Claim that she was the registered owner of Flat A6 on the 18th Floor of Nam Hung Mansion, No. 5, Belcher's Street, Hong Kong erected on Marine lot No. 264 and Section A of Marine Lot No. 265. They formed part of an entirely new building within the meaning of s.3(1)(a) of the Landlord and Tenant (Consolidation) Ordinance of which the written permit fot he Building Authority to occupy was issued after the 16th August 1945. Part I of the Ordinance therefore did not apply to the premises. She also averred that the three year tenancy created by an agreement dated the 1st January 1979 had expired on 31st December 1981 and that the respondent had held over the premises as a tenant on a month to month basis under Part II of the Ordinance. And so, the terms of the expired tenancy agreement continued to apply to the tenancy.

4. By the Defence, the averment that the premises were being held over under Part II was admitted, but in relation to the other averments I have summarised, it was pleaded "subject to the production of the relevant title deeds and occupation permit [those averments] are not denied."

5. At the trial, by consent, two documents were produced on behalf of the appellant. These were certified copies of extracts from the Registrar General's Record of Owners and of an Occupation Permit issued by the Building Authority. In relation to the Occupation Permit, the solicitor for the respondent is recorded as having said "I only agree to that production but make no admission as to its contents".

6. The Occupation Permit is dated the 5th September 1974 and given the number H170/74. It states:

"I hereby permit the occupation of the new building (Number and name of street) at 22-23, Praya, Kennedy Town on lot No. M.L. 264 & 265 S.A. for the following purposes :-

Ground floor: 11 shops with cockloft stores, 1 transformer room and 1 switch room and 1 telephone main distribution frame room for non-domestic use. 1st to 24th floors (inclusive): 16 flats for domestic use."

7. The Record of Owners showed that the appellant is the owner of "a share of and in marine lot No, 264 and Section A of marine lot No. 265". The address is given as "Namhung Mansion" and the premises described as "Flat A6 on the 18th Floor". Under the heading "Incumbrances" is recorded the following entry: "Date of Instrument - 12.9.74. Date of Registration - 12.9.74. Occupation Permit No. H170/74."

8. When these documents are read together, and in the absence of evidence to the contrary, I would myself have had no hesitation in reaching the conclusion that the appellant had produced ample evidence to show that she was the owner of Flat A6 on the 18th floor of Nam Hung Mansion, a new building in respect of which an Occupation Permit had been granted under s.21 of the Buildings Ordinance on the 5th September 1974. With the utmost respect to the trial Judge, I am sorry to have to say that it was a sad day for justice when he allowed himself to be blinded by the dust raised by the respondent's solicitor's extravagantly improbable hypothesis repeated in the extract from the judgment I have read. The parties themselves knew the reality of the position and if they had understood the reasoning, the appellant must have been filled with despair, and the respondent with disbelief in the light of the Judge's later findings.

9. But that was not all. Although the Judge mentioned subsection (3) of s.50 of the Ordinance, he did not give effect to it. That subsection is as follows -

10. If I understood the submission of Counsel for the appellant (who did not appear in the Court below) correctly, it was that a plaintiff must first prove that the premises sought to be recovered are not within Part I of the Ordinance and only when this is done does any onus pass to the defendant under s.50(3). When I read ss.3 (1) (a) ; 50(1),(2)(a); and 50(6) (a) (i) together I find no warrant for such a contention. The kernel of the issue which arose (although on the facts it was more fanciful than real) was whether or not the building in question was a post-war building as defined. The simple wording of s.50(3) placed the burden of proving that it was not a post-war building on the respondent. He did not begin to discharge that onus. I had no doubt, therefore, that the matter of law upon which the appeal is based must be decided in the appellant's favour.

11. After deciding that he had no jurisdiction to entertain the claim for possession, the Judge went on to say -

"I would add that I also concur with and accept defence counsel's concession that if the court had jurisdiction there should have been a finding that Plaintiff had established a case of reasonable requirement of the suit premises for the use of herself and her daughter only. And, assuming that' that was the situation, I would further say that from facts Dl had not discharged the statutory onus that it would manifestly not be just and equitable to order possession and that in those circumstances I would have decided in Plaintiff's favour against both Defendants. (The principle of LO Wah's case on sub-tenant would be relevant to D2's position)."

12. There is no cross-appeal on either of the findings embodied in this passage and on the evidence accepted by the Judge, they are unassailable.

13. It was for these reasons that I indicated, at the conclusion of the hearing, that I would allow the appeal.

Leonard, V-P. :

14. The sole question arising here is whether the burden of proving that the suit premises fall within Part II of the Landlord & Tenant (Consolidation) Ordinance falls on the landlord or on the tenant. It is an unreal question firstly because to my mind the landlord proved conclusively that an occupation certificate in respect of the building was issued after the 16th August, 1945 and secondly because, I should have thought that any Court could take judicial notice of the fact that any building, 24 storeys in height situated in Kennedy Town where the suit premises are, was erected after 1945 and could not have been occupied without an occupation permit.

15. Unfortunately the case was so conducted in the Court below and the Notice of Appeal is so couched that the unreal question must be considered.

16. The landlord sought possession under Section 53(2)(b) and proved that she required the premises for her own occupation. The tenant failed to show that it would be unjust or unequitable for an order of possession to be made. The suit premises are described in the writ as "Flat A6 on the 18th Floor of Nam Hung Mansion No.5 Belcher Street Hong Kong erected on Marine Lot No.264 and Section A of Marine Lot 265". The landlord produced an occupation permit Numbered H170/74 dated 5th September, 1974 permitting occupation of the new building "at 22-23 Praya, Kennedy Town on Lot No. M.L. 264 and 265 S.A.". She also produced a certified true copy of the Record of Owners from the Sub division Register. This document relates to Flat A6 on the 18th Floor of Nam Hung Mansion on Marine Lot 264 and Section A of Marine Lot No.265 and indicates that Occupation Permit No.H170 dated 5th September, 1974 was registered in respect of that building on the 12th September, 1974. With misplaced ingenuity the solicitor for the tenant suggested to the trial judge that

"it is for the plaintiff to satisfy the Court that the suit premises are post war premises. I refer also to Section 50 of Landlord & Tenant (Consolidation) Ordinance. Section 50(2) defines a post war building and Section 50(3) puts the burden of disproving the assertion of post war building on the party denying it ... Plaintiff has called no evidence to show that there was only one building erected on Marine Lots 264 and 265 S.A. Neither is there evidence that the building on 22-23 Praya, Kennedy Town is the same as that standing on No.5 Belcher's Street."

This, as I have shown, is entirely specious. The suit premises are in Nam Hung Mansion the building to which the occupation permit relates and whether it is described as standing on 22-23 Prays or on 5 Belcher's Street is quite immaterial.

17. The trial judge held :

"Defence counsel raised the point that, although he did not dispute Plaintiff's ownership of the suit premises, which are known as Flat A6, 18/F, Nam Hung Mansion No.5 Belcher's Street, erected on Marine Lot No.264 and Section A of Marine Lot No.265, he contended that the Occupation Permit produced by Plaintiff showed that it was in respect of the new building at No.22-23 Praya, Kennedy Town which stood on the same marine lots. He thus submitted that that permit could be for one of the buildings erected on those lots and that Plaintiff had neither proved that Nam Hung Mansion was the same building as that stated in that permit. It was therefore his submission that there was no evidence of an Occupation Permit having been issued after 1945 in relation to the suit premises under Section 50(3) of the Ordinance to prove that those premises came within Part II thereof and hence within the Court's jurisdiction under Section 50(1) & (2).

From the evidence I fully agree with defence counsel's argument. I thus find that there is an absence of proof that the suit premises form part of a post-war building as stipulated by Section 50(1), (2) & (3). I consequently come to the conclusion that the suit premises are not within Part II of the Ordinance and hence not within the court jurisdiction under Section 49. Plaintiff's claim under Section 53(2) (b) cannot therefore be entertained."

He apparently did not appreciate the significance of the reference to Nam Hung Mansion and the registration of the Occupation Permit No. H170/74 shown on the Register of Owners.

18. The relevant ground of appeal reads :

No application was made to us to amend this so as to suggest that the Judge erred in ignoring the Register of Owners. Hence we must consider if the Judge was correct in holding that "absence of proof that the suit premises form part of a post-war building" deprived him of jurisdiction.

19. I set out for ready reference the relevant portions of Section 50:

''50. (1) Subject to subsection (6), this Part applies to every domestic tenancy and domestic sub-tenancy in a post-war building,

(2) For the purposes of this section a post-war building means -

(a) a building to which Part I does not apply by virtue of section 3(1)(a) or (d); and

(b) any building in the New Territories other than one in respect of which the Secretary for the New Territories, certifies that it existed prior to 17 August 1945.

(3) The burden of proving that a building is not a post-war building shall lie on the person so asserting; and a copy of a written permit of the Building Authority to occupy a building shall be prima facie evidence that a building is not post-war if the permit purports to have been issued prior to 17 August 1945.

(6) This Part shall not apply to the following -

(a) a tenancy or sub-tenancy -

(i)of premises to which Part I applies; or"

and Section 3 of the Ordinance:

"3. (1)    This Part shall not apply to -

20. When the draftsman used the words opening Section 50 strongly stressed by Miss Yuen "subject to subsection (6).." he was, I consider, anxious to avoid the possibility of embracing within the clutches of Part II any premises not excluded from the operation of Part I. The anxiety was misplaced because of the definition of post-war building. To suggest that these opening words indicate an intention on the part of the legislature to deprive subsection (3) of effect is not tenable. In effect that subsection creates a rebuttable presumption that all buildings are post-war buildings. It does not oblige a landlord to produce an occupation permit. Rather does it enable a tenant to rebut the presumption that a building is a post-war building by producing a permit dated prior to l7th August, 1945.

21. As I see it where a landlord seeks possession under Part II it is not necessary for him to produce an occupation permit unless he is faced with an allegation that no occupation permit was ever granted in respect of the building in question. The permit is then relevant not to show when the building was erected but to show that its occupation was permitted; for because of Section 3(1)(a) any entirely new building in respect of which an occupation permit has not been granted falls under Part I. It is however an offence to occupy any building before an occupation permit is granted (See Sections 21 and 40 of the Buildings Ordinance) and in the absence of an allegation that no occupation permit had been issued I think it would be quite unreal to suppose that none existed. Hence I am satisfied that the words "Subject to subsection 6" in Section 50(1) do not have the effect of rendering nugatory the provisions of subsection (3). I would therefore allow this appeal.

Cons, J.A. :

22. I agree with my Lords the Vice-President and Fuad J.A. that this appeal should be allowed.

23. In my view the evidence of the documents showed clearly that the tenancy in question was within Part II of the Ordinance. I appreciate that the judge's finding in this respect was not challenged by the Notice of Appeal nor did the counsel apply for any late amendment. Had she done so however I would for my part have allowed it without hesitation so that we might "ensure the determination on the merits of the real question in controversy between the parties"⁽¹⁾.

24. The technical ground on which the respondents succeeded below depends entirely upon the opening phrase of Section 50(1) "Subject to Sub-section 6(a)" and the opening paragraph of that sub-section "This part shall not apply to ......... a tenancy or sub-tenancy of premises to which Part I applies".

25. Upon a thorough consideration of Section 50(2), Section 3(1) and the remaining paragraphs of Section 50(6)(i), I have some doubt that the opening words of that paragraph have any practical effect whatsoever, although they have formed part of the legislation ever since it was first introduced in January 1970, as the Security of Tenure (Domestic Premises) Ordinance, No. 8 of that year. I am quite satisfied, however, that they do not derogate from what seems to me the clear intention of Sections 5(2) and 5(3) - which I note in passing formed part of the same sub-section in the original - that where Part II is invoked the tenancy shall be presumed to be within that part unless and until the party who wishes to assert otherwise so proves.

(1)    Section 64(1) of the District Court Ordinance Cap. 336

Representation:

Miss Mary Ho (M/S C.P. Tsang & Co.) for Appellant/Plaintiff.

Miss Maria Yuen (M/S Michael Cheuk & Co.) for Respondent/Defendants.