Chuk Yau-cheong v. Lee Miu-ying

CACV000014A/1979

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Coram: Roberts, C. J., Leonard and Li, JJ.

Date of Judgment 31 October 1979

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JUDGMENT

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Roberts, C. J.:

1. This is an appeal for an order for possession made by Judge Jones in the Kowloon District Court. The plaintiff Lee Miu-ying sought possession of a flat under section 53(2)(b) of the Landlord and Tenant (Consolidation) Ordinance, on the ground that the premises are required by the landlord as a residence for herself.

2. In order to succeed on the claim, it is necessary for the plaintiff to establish that in all the circumstances of the case a greater hardship would be caused by refusing to grant her the order than it would have been by granting it. The action before the judge was conducted entirely on the basis of greater hardship until half-way through the evidence of Poon Kam-lien, the wife of Chuk Yau-cheong, the defendant in the action. During her evidence, she disclosed that part of the premises had been let to a sub-tenant for slightly over a year and admitted that she did not have the written permission to let.

3. When this evidence was given by the defendant's wife, counsel for the plaintiff sought leave to amend the particulars of claim so as to add a new claim for possession on the ground that the defendant had sublet part of the premises without the prior consent in writing of the landlord. By section 53(2)(e) of the Landlord and Tenant (Consolidation) Ordinance a court may make an order for possession if the tenant has at any time after the 14th December, 1973 without the consent in writing of the landlord, sublet the whole or any part of the premises of which he is the tenant.

4. The solicitor for the defendant immediately objected to the application, saying that this raised totally different issues and legal questions (including waiver and estoppel) and applied for an adjournment.

5. The judge gave permission to the plaintiff to amend in the manner applied for. After this amendment had been made, the defendant's wife continued to give evidence, in the course of which she said the plaintiff was aware of the subletting since she (the plaintiff) had come each month to collect the rent.

6. There was no cross-examination of the defendant's wife. The judge made an order for possession, on the ground that the defendant's wife had admitted that the defendant had sublet part of the premises without the written consent of the plaintiff. He ordered that arrears of rent should be paid by the defendant from the 5th May, 1978 until the date of service of the writ and thereafter mesne profits.

7. In our view it was not unreasonable for the judge to allow an amendment to the claim, in view of the evidence which was given by the wife of the defendant. It was clearly a matter that should have been decided in the course of those proceedings for the recovery of possession of the premises. However, he does not appear to have asked the solicitor for the defendant whether she would like to have an opportunity to amend her defence.

8. Furthermore, it seems to us that, in the circumstances, the amendment did give rise to issues which would not necessarily have been straightforward and that therefore the judge should have granted a reasonable adjournment to the defence to decide how to meet the new case which would be presented.

9. It may well be that the evidence which was available to the trial judge was insufficient to decide as he did in any event, since there was no more than an admission by the defendant's wife that she had sublet without permission.

10. There is no evidence from the defendant himself and it seems desirable that the defendant should have been given an opportunity to give evidence on the matter. Furthermore, there was no opportunity afforded to the defendant to cross-examine the plaintiff about the supposed waiver of the subletting by virtue of the knowledge imputed by the defendant's wife to the plaintiff of the subletting by reason of her visits to the premises to collect rent.

11. In the event, it is a pity that the judge did not decide upon the facts of the case as pleaded. Had he gone on to reach a decision on the question of hardship it might not have been necessary for us to refer the case back to him, as we propose to do. Although at one stage it was suggested, without, I think, the matter being pressed, that we should decide that issue here, we do not think it appropriate for us to do so.

12. We have had to consider whether, the defences of waiver or estoppel could succeed under section 53 of the Ordinance. We have been referred to the following passage of the judgment of Gibson, C.J. in Tam Man and Cheung Shau-shan v. Tin Kwan-yin⁽¹⁾:

"We turn now to the second issue as to waiver ... Suffice it to say that if, on a proper interpretation of legislation, it appears that it is concerned with private rights only and not with matters of public policy, then the benefit can ordinarily be waived. It is impossible to imagine that any matter of public policy is involved in section 20. The land lord is given power to apply for eviction in certain circumstances. The power is there for his private benefit, just as his power to refuse consent to an assignment, etc,. is there for his private benefit. There seems to us to be no reason why a landlord should not be capable of waiving the cause of forfeiture provided for in the section."

The Chief Justice was referring to section 20 of the Landlord and Tenant Ordinance which was then in force; this was in the same terms as section 36 of the present Landlord and Tenant (Consolidation) Ordinance, Cap. 7.

13. In Tsang Shiu-tim v. Hang Fong⁽²⁾, at p.323 Hogan, C.J. referred to Tam Man before deciding that estoppel could arise under the same section -

"This court has already decided in the case of Tam Man and Cheung Shau-shan v. Tin Kwai-yin 33 H.K.L.R. 296 that the right conferred by section 20 may be waived, on the grounds that it is a section concerned with private rights only and not with matters of public policy. It would seem therefore that estoppel or quasi-estoppel could equally be established for it as for a contractual right."

14. We have also been referred to the District Court case of Chow Sau-po v. Madam Chan Sau-min⁽³⁾ which deals with the question of whether waiver or estoppel are open where an application is made for possession under section 53(2)(e), in which the judge decided that although the strict common law rule was that acceptance of rent after full knowledge of a breach by subletting amounted to a waiver, irrespective of any qualification by the landlord at the time of receipt of the rent, the rule in the case of a statutory tenancy was that the landlord should be entitled to receive rent after the breach and should not, by reason of such receipt, be held to have waived the breach, if he made it clear to the tenant at the time, of, or prior to the receipt, that his receipt was without prejudice to his right of action, and if he issued his summons for possession within a reasonable time. The District Judge referred to Oak Property Co. Ltd. v. Chapman⁽⁴⁾ which was heavily relied upon in Tam Man and came to the conclusion that the defence of waiver was open where an order for possession was sought under section 53(2)(e). We agree with his conclusion.

15. Similarly, it is our view that the defence of estoppel would be open, where there is a claim under section 53 of the Landlord and Tenant Ordinance. We are not expressing any view as to whether either of these defences would succeed in the particular case before us. All we say is that they are defences, which, if the evidence so justifies, ought to be considered by a trial judge.

16. We have therefore came to the conclusion that we should refer this matter back to the District Judge and order as follows -

Representation:

D. Chang (Stevenson, Low & Co.) for appellant

P. Cheung (Liu, Chan & Lam) for respondent

(1) 1949 H.K.L.R. 296

(2) 1959 H.K.L.R. 308

(3) 1976 D.C.L.R. 88

(4) 1947 2 All E.R. 1