KWOK KOON WOR v. APPEAL PANEL AND ANOTHER

HCAL 71/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE

LAW LIST NO. 71 OF 2000

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J U D G M E N T

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1. With the consent of the parties, this application for leave to judicially review the decision of the Hong Kong Housing Authority (HA) to issue a notice of quit (NQ) to the applicant and the decision of the Housing Appeal Tribunal (the tribunal) confirming such notice is to be treated as the substantive hearing as if leave had been granted.

2. On 19 September 1985, the applicant Mr Kwok Koon Wor signed a tenancy agreement (the 1st tenancy agreement) with HA to rent a public housing unit at Flat 2618, Pok Tai House, Pok Hong Estate, Shatin (the unit).

3. On 27 February 1999, the 1st tenancy agreement was terminated by HA because the applicant failed to pay the rent for the months of January and February 1999.

4. The applicant subsequently explained to HA that at the material time, he was in China receiving medical attention and he thought his son would be paying the rent. Unfortunately, his son was having financial difficulty, as he had been unemployed for a few months.

5. HA agreed to re-grant a tenancy to the applicant on 13 April 1999 and the applicant then settled the rent for the months of January, February and March 1999.

6. The 2nd tenancy agreement which was on the same terms as the 1st tenancy agreement contains the following relevant terms: -

"Clause 1

The Landlord agrees to let and the Tenant agrees to take (the unit) for the period of thirty days from the first day of April 1999 and thereafter on a calendar monthly tenancy..............at the calendar monthly rent, including rates..........of $1420.............. payable in advance on the first day of every calendar month......

Clause 2

The Tenant agrees with the Landlord as follows:

(1) To pay the said rent at the time aforesaid without any deduction.

Clause 4

It is hereby expressly agreed as follows:

(2) If the rent payable hereunder or any part thereof shall be unpaid for fourteen days after becoming payable (whether formally demanded or not) or......................it shall be lawful of the Landlord at any time thereafter to re-enter upon the said flat or any part thereof in the name of the whole and thereupon the tenancy hereby created shall be absolutely determine."

7. It is not disputed that the applicant again failed to pay the rent of the unit for June and July 1999. HA had made various attempts to chase the applicant to pay the rent, including the issue of reminders and warning letters as well as sending officers to attend the unit. There was no response from the applicant or his family members.

8. A final warning letter was sent on 22 July 1999 to be followed by a NQ dated 31 July 1999.

9. Subsequently on 4 August 1999, the applicant paid up the arrears of rents for June, July and August 1999 and also filed a notice of appeal to the tribunal in accordance with section 20 of the Housing Ordinance.

10. After a hearing on 20 December 1999, the tribunal confirmed the NQ and hence the present application.

11. In support of the present application, Mr Pun on behalf of the applicant raised two matters: -

1. The decisions of HA and the tribunal to issue and confirm the NQ were unlawful in that they had failed to take into consideration the equitable relief against forfeiture when the applicant had paid up the arrears of rent for June and July 1999 on 4 August 1999; and

2. The decision of the tribunal was also unlawful when it had regard to a policy of HA that action would be taken against a tenant, including the issue of a NQ when the tenant failed to pay rent punctually in reaching its decision without complying with the statutory requirement under section 20(2A)(a) of the Housing Ordinance. The suggestion is that there was insufficient evidence to show that the applicant was aware of the policy or could reasonably be expected to have been so aware.

12. Mr Pun suggests that the provision for re-entry upon non-payment of rent is merely a "security" for the rent and that relief against forfeiture will be granted if the tenant pays up in full the arrears of rent and the costs of recovering the arrears.

13. He refers to the provisions in the High Court Ordinance, the District Court Ordinance as well as the Lands Tribunal Ordinance pertaining to the "automatic relief against forfeiture" upon the payment of arrears of rent on actions based on non-payment of rent.

14. Mr Pun argues that a tenant of a public housing estate should not receive lesser protection than a private tenant and hence upon the payment of the arrears of rent on 4 August 1999 by the applicant, whatever steps taken to evict the applicant from the unit should be halted and in any event, the tribunal must have regard to the equitable rule of relief against forfeiture in reaching its decision.

15. Mr Pun, however concedes that as the NQ in question had already been issued when the payment of the arrears of rent was made on 4 August 1999, he cannot advance any argument against the NQ issued by HA on 31 July 1999. That being the case, his attack can only be directed at the decision of the tribunal.

16. As can be seen from the wordings in the various provisions in the High Court Ordinance, the District Court Ordinance and the Lands Tribunal Ordinance pertaining to the relief against forfeiture, the provisions are indeed very rigid. Once the tenant pays up the arrears of rent, automatic relief against forfeiture follows and the court is obliged to refuse any application for re-entry based on non-payment of rent.

17. Lord Esher M.R. made the following observation in Newbolt v. Bingham (1895) 72 L.T. 852 at p.853,

"It seems to me that these Acts of Parliament give very large powers of relief to the court. That power is to be exercised by a judge in chambers. But the position of the judge at chambers as regards granting this relief is made by the Act as nearly as possible the same as that of a judge in a court of equity before the Act. If, at the time relief is asked for, the position has been altered, so that relief could not be given without causing injury to third parties, I think that the case that was cited to us (Stanhope v. Haworth) applies. But if, at the time of the application, the position is not altered, so that no injustice will be done, I think, if the conditions mentioned in the section are complied with, that, according to settled practice in equity, there is no longer a discretion in the judge, but that he ought to make the order. It does not matter whether it is called discretionary or not, if the discretion ought always to be exercised in one way. If the conditions are complied with, and no interests of third parties have intervened, there is no longer any real discretion in the matter. The order for relief in this case will, therefore, be made, if all repairs required by the covenants are done to the satisfaction of a surveyor within one month, and the rent in arrear and all costs, including the costs of this appeal, are paid."

18. If Mr Pun's argument is correct, the tribunal, in hearing an appeal against a NQ based on non-payment of rent, must allow the appeal and cancel the NQ if the tenant has paid up the arrears before the hearing.

19. Such approach will no doubt lead to abuse by tenants of the public housing units. They would be encouraged not to observe the punctual payment of rent. As long as they can repay the arrears before the appeals against the issue of NQ based on non-payment of rent are heard, they will have no fear that their tenancies will be cancelled.

20. Can such approach be correct ? I think the answer is clear.

21. HA is a statutory body appointed under the Housing Ordinance to take charge and manage all the public housing units in Hong Kong. It is the landlord to more than 3 million tenants.

22. If public housing tenants' refusal to observe the condition to pay rent punctually can never successful lead to a termination of the tenancy as long as the tenants pay up all arrears of rent before an appeal is heard by the tribunal, it will not be possible for HA to discharge its functions and duties properly. Indeed it will make the tasks of HA almost impossible.

23. I accept the submission of Mr Ng on behalf of HA that there is a distinction between public tenancy and private tenancy. Relief against forfeiture is only an equitable remedy available to a tenant in private tenancy to be exercised by the court.

24. The wordings of section 20 of the Housing Ordinance clearly give the tribunal a wide discretion in deciding if a NQ should be confirmed, amended, suspended or cancelled. It does not stipulate how such discretion is to be exercised by the tribunal. To insist that the Tribunal must apply the equitable rule of relief against forfeiture is doing injustice to the intention of the legislation.

25. Indeed under section 19(3) of the Housing Ordinance, "No court shall have jurisdiction to hear any application for relief by or on behalf of a person whose lease has been terminated under subsection (1) in connection with such termination."

26. I note that under sections 53(2)(d) and 53(2A)(b) of the Landlord and Tenant (Consolidation) Ordinance, persistent failure to pay rent would be regarded as causing annoyance, inconvenience or disturbance to the landlord and would be an independent ground for termination of the tenancy. The Housing Ordinance does not expressly give HA such an option.

27. This also reinforces the suggestion that the tribunal, in the exercise of its duties on an appeal against the termination of the tenancy, must be given the power to take into consideration all relevant matters and not to be bound by the equitable rule of relief against forfeiture.

28. I do not accept Mr Pun's argument that the tribunal must apply the equitable rule of relief against forfeiture in the same way as a court in accordance with the relevant sections in the High Court Ordinance, the District Court Ordinance or the Lands Tribunal Ordinance.

29. As the tribunal is presided over by lay members, it is also unrealistic to expect them to refer expressly to the equitable rule of reliefs against forfeiture in their deliberation or decision.

30. The tribunal had clearly taken into consideration the entire history of the tenancy in question, including the previous failure on the part of the applicant to pay the rent, the payment of the outstanding rent in arrear and his future ability to meet his obligation to pay rent punctually.

31. The decision of the tribunal cannot be faulted.

32. Before the hearing of the appeal, HA had issued a certificate in Chinese under section 20(2A) of the Housing Ordinance to the effect that in case of failure to pay rent punctually, HA had the policy to take actions, including the issue of a notice to quit in the following terms: -

"附件VI

房屋條例（第283章）

個案編號：376/99

上訴人：郭觀和先生

房屋委員會秘書根據第20（2A）條擬備的證明書

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本人證明 ：

(I) 按照香港房屋委員會有關公營房屋管理的政策，倘承租人違反下述租約規定，房屋署可採取行動，包括向承租人發出遷出通知書：

第11（1）條：依時繳交上述租金

(II) 房屋署於1999年7月31向郭觀和先生發出遷出通知書，於1999年8月31日終止他在博康邨博泰樓2618室的租住權時，房委會或代房委會行事及代表房委會的物業管理總經理/高級房屋事務經理，已考慮及引用上述政策。

	房屋委員會秘書
	（周炎林           代行）

一九九九年八月三十一日"

33. Section 20(2A) of the Housing Ordinance provides: -

"(a) Paragraph (b) shall apply in relation to any policy of the Authority which is stated and specified as being such in a certificate in writing issued for the purposes of this subsection by the Authority's secretary and as regards which the certificate also certifies that the policy was both considered and applied by the Authority when deciding to terminate the lease or, where appropriate, to issue the notice to quit to which the appeal relates.

(b) In considering an appeal under subsection (1)-

(i) if the tribunal concerned is satisfied that at the time of making the decision to which a certificate mentioned in paragraph (a) relates, the appellant was aware of the policy or could reasonably be expected to have been so aware, the tribunal shall have regard to such policy; and

(ii) if such tribunal is not so satisfied, it may, where it considers it appropriate so to do, have regard to such policy."

34. Mr Pun suggests that the tribunal had wrongly regard to the policy without first satisfying itself that the applicant was aware or could reasonably be expected to have been so aware.

35. After the 1st tenancy was terminated, the applicant had in his own handwriting written to HA asking for indulgence. In his letter, the applicant had expressly stated that he understood that rent must be paid punctually according to the housing regulations. He also understood that if he should fail to pay rent punctually in the future, HA would immediately repossess the unit and that he would not be granted any tenancy again.

36. In reply to his letter, HA had responded by a letter dated 13.4.1999 to the effect that should he be in breach of the tenancy agreement again and in the light of his failure to pay rent punctually in the past, HA would consider taking action in accordance with the tenancy agreement including the termination of the agreement.

37. There is also evidence to the effect that newsletters had been issued to all households of Pok Hong Estate that failure to pay rent punctually will result in HA taking actions such as the termination of the tenancy and the issue of notice to quit. Pamphlet to the same effect are also placed at the estate office and are available for all tenants of Pok Hong Estate.

38. In the circumstances of the case, it was clearly right for the tribunal to conclude as it did that the applicant was either aware of the said policy or could reasonably be expected to have been so aware. The tribunal was entitled to have regard to the said policy in dealing with the applicant's appeal.

39. I have considered the background of the case and everything that had been urged on me by Mr Pun.

40. The decision of the tribunal is not unlawful. There is no procedural irregularity and the decision cannot be said to be Wednesbury unreasonably.

41. There is nothing upon which I can properly interfere with such a decision.

42. The applicant's application must be dismissed and I so order.

43. I also order that the applicant is to pay HA the costs of this appeal to be taxed if not agreed.

44. The order on costs is an order nisi to be made absolute 14 days after the handing down of this judgment.