Chow Wing v. Yuen Chi-hung and Another

CACV000145/1980

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Coram: Roberts, C.J., Leonard and Cons, JJ.A.

Date of Judgment: 15 October 1980

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JUDGMENT

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Roberts, C. J. :

1. This is an appeal from an order by Judge Barnes, dismissing a claim for possession of premises at Flat E on the 16th Floor of Po On Building.

2. The plaintiff and his wife are the registered owners of the premises, which they purchased in 1966. The 1st defendant has been the tenant of these premises since shortly after the plaintiff purchased the flat. The 2nd defendant has been a sub-tenant of the principal tenant since November 1973.

3. The plaintiff sought possession of the premises by a writ dated 17th March 1980, that is to say, after the enactment of the Landlord and Tenant (Consolidation) (Amendment) Ordinance, 1980, which came into force on 15th February. It is not disputed that the premises fall outside Part I and inside Part II of Cap. 7.

4. It is unnecessary to review the facts of the case in any detail. It is sufficient to say that this is yet another of those all too common cases in which, unfortunately, considerable hardship is likely to be suffered by one party or the other whatever order is made.

5. The plaintiff sought possession of the premises on two grounds. Firstly, that there had been an unlawful subletting without his consent. Secondly, that he reasonably required the premises for occupation as a residence for himself and members of his family.

6. The judge found, as a fact, that the subletting by the 1st defendant to the 2nd defendant took place in November, 1973, and that, therefore, the first ground failed. His finding on this ground of claim has not been challenged on appeal.

7. A landlord seeking to obtain possession under Section 53(2)(b) of Cap. 7 must establish that the premises are reasonably required for occupation as a residence for himself or for one of those members of his family who are listed in that paragraph. The judge found that this condition had been satisfied by the landlord. There was evidence on which he could so conclude and we see no reason to interfere with his finding.

8. When a landlord claiming possession under this subsection has established that he does reasonably require the premises, a burden then lies on the tenant, under section 53(2)(b)(i), to satisfy the court that "in all the circumstances of the case it would manifestly not be just and equitable" to make an order for possession in favour of the landlord.

9. What does the phrase "manifestly not be just and equitable" mean?

10. We were referred to several District Court cases in which this phrase is discussed at length and dissected with great care. We have received most assistance in interpreting it from the judgment of Judge de Basto in Lusher v. Hillard⁽¹⁾ where he comments as follows:

"How is the proviso, more particularly the words : 'Manifestly not be just and equitable' to be construed? In my view, the proviso means that a tenant must satisfy a Court that, having regard to all the circumstances of the case, there are clear, cogent and impelling reasons why the making of an order for possession would result in injustice. Or, to put it in another way, if an order for possession were made, one would expect a Court of Equity, apprised of all the circumstances of the case, to, so to speak, throw up its hands in dismay and exclaim: 'That cannot be right!'".

We would prefer to substitute for the phrase "a Court of Equity" the words "an ordinary person". Otherwise we commend this sensible approach.

11. We do not think that it is desirable to attempt to scrutinize each constituent part of the phrase. We consider that what District Judge, who are likely to be faced frequently with the task of interpreting this section, require is as simple a test as possible. We suggest that the question to be asked is whether it would be thoroughly unjust to make the order. Unless the tenant establishes that it would be thoroughly unjust to make an order for possession, such an order should follow, once the landlord has satisfied the burden of showing that he reasonably requires the premises for his occupation.

12. So that the matter may not be in doubt, we should say that the effect of paragraph (b)(i) is to place on the tenant the normal civil burden of showing that it would be thoroughly unjust to make the order.

13. We do not consider that it would be helpful to attempt to lay down those matters which are relevant in deciding whether or not it is just and equitable to make an order. This is a matter that is best left to the trial judge to decide, in the light of the facts of the case before him. Similarly, it is very much a matter for him to assess the weight which he should attribute to the various relevant factors which he has taken into consideration.

14. As we have interpreted section 53(2)(b)(i), it is clear that the judge misdirected himself. In two passages towards the end of the judgment he states that he regards the factors as evenly balanced:

15. If a judge comes to the conclusion that the merits are "fairly evenly balanced", in considering whether it would be unjust to make an order, the tenant has not discharged the burden which lies upon him to establish on the balance of probabilities that it would be "thoroughly unjust" to make the order.

16. Therefore the judge should have concluded that the tenant had not discharged the burden which lies upon him, and, consequently should have made the order for possession sought by the plaintiff.

17. It is necessary also to consider the position of the sub-tenant. We were invited to say that, even if the landlord succeeded in obtaining possession against the principal tenant, the sub-tenant has a right to remain.

18. The difficulty which faces the sub-tenant, however, is that section 53(1)(c) of Cap. 7 provides that a sub-tenancy shall terminate when the tenancy out of which it was created is itself terminated. The proviso, that the sub-tenancy shall remain in existence if it becomes a tenancy arising by operation of law, has no application in this appeal.

19. Section 53(2)(b)(i) governs the relationship between the landlord and the principal tenant. Section 53(2)(b)(ii) governs the relationship of the principal tenant and the sub-tenant. Neither seeks to regulate the relationship of the landlord and the sub-tenant.

20. In this case there was no evidence before the judge as to the personal circumstances of the sub-tenant or as to the hardship which he would suffer if an order were made against the principal tenant. Had such evidence been adduced, it would have been proper for the judge to take it into account when coming to his conclusion under section 53(2)(b)(i). Hardship which might be suffered by a sub-tenant, if an order for possession were made against the principal tenant, is a factor to which a judge can properly give weight since it would fall within the phrase "in all the circumstances of the case".

21. In the result, the appeal must be allowed and an order for possession of the premises made against both respondents. Costs to the plaintiff here and in the Court below. Stay of order for possession for three months from today. First respondent to pay rent/mesne profits at the rate of $821.20 per month from 12th September, 1980 until delivery of possession.

Representation:

K. KwoK (Louis Kong & Co.) for appellant

1st Respondent in person

G. Ma (Alfred Lau & Co.) for 2nd Respondent

(1) Victoria District Court Civil Action 1910/1980.