MAK YEE HANG AND ANOTHER v. FUNG YIP SANG AND OTHERS

IN THE COURT OF APPEAL

1987, No. 43
(Civil)

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J U D G M E N T

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Silke V.-P.:

1. This is the judgment of the Court.

2. This is an appeal from the Kowloon Lands Tribunal which decided that the Appellants/landlords' application for possession of premises be refused.

3. The suit premises is at no. 3, 6/F., Block B, Tung Lo Court and it was purchased by the landlords, husband and wife, Mak Yee Hang and Lo Mei Fung, on the 7th January 1986. The consideration was $120,000. At the time of purchase, there were living in the premises the principal tenant and 1st Respondent, Fung Yip Sang, and a number of sub-tenants. There were in all thirteen named Respondents - the twelfth and thirteenth being added at the trial. It would seem that even before process was issued, one of the named Respondents, Au Kui, had died and three had moved out. These were Ma Kwong, Siu Wing Soon and Mrs. Lui.

4. At the hearing, there were present Mr. Fung, Mr. Au Kam - the 2nd Respondent, Mr. Au Hung - the 4th Respondent - and Mr. Chan Chik - the 6th Respondent. The application was made by the landlords under the provisions of Section 53(2)(b) of the Landlord and Tenant Ordinance that is that the premises were reasonably required by them for occupation as a residence for themselves and for their 12 year old son.

5. In evidence the landlords described themselves as living in a 42 sq.ft. cubicle which contained a double bunk - the upper part used by the son, the bottom part by themselves. It was necessary to share with the other inhabitants of the premises in which they lived the toilet and kitchen facilities. They paid $500 a month for rent. They owned no other property. They earned jointly $6,000 per month.

6. The suit premises has been variously described as between 700 abd 900 sq.ft. in area. Neither of the landlords inspected the premises prior to purchase. Mr. Mak did go there once after purchase in order to repair a burst pipe and he said the suit premises was divided into three cubicles with a living room and kitchen and toilet facilities. It would seem clear from the evidence of the Respondent that there were, in fact, seven cubicles, two of which are presently empty.

7. Each of the Respondents present give evidence. The principal tenant said he was a taxi relief driver earning about $2,000 a month, that he collected rent from the sub-tenants and, if all the cubicles were let, he would have pocketed some $800 a month and lived rent free. The rent had been raised in July of 1986 to $2,049.50 per month. It was his evidence that if he had to move out, he would have to pay $600 for a cubicle and that his health was not particular good.

8. The 2nd Respondent, Mr. Au Kam, shares his cubicle with the 3rd Respondent. They jointly pay, though we are not aware of the distribution of this, $600 a month as rent. He is a restaurant waiter earning $2,400.

9. The 4th Respondent, Mr. Au Hung. had shared his cubicle with the deceased, 5th named Respondent, Au Kui. He is a caretaker earning $2,600 a month.

10. The 6th Respondent was a restaurant waiter earning $3,500. He shares his cubicle with his brother Chan Hung, the 7th Respondent and Chan Sum, his son, the 8^th Respondent. The son earned $2,000 a month and the brother $3,000 a month.

11. The 12th Respondent, a brother of the 1st Respondent, is a van driver earning $3,300 and has a cubicle to himself.

12. The 13th Respondent is the sister of the 1st and the 12th Respondents has also a cubicle to herself. She earns as a garment worker about $1,600 a month.

13. In his judgment refusing the order for possession, the Presiding Officer began by noting, in particular, that the landlords had purchased as recently as 15 months prior to the hearing and this without inspection. He felt that they had purchased on a speculative hope of gaining possession without considering the overall position of the people living there. But as was said by Cons J.A. in delivering the judgment of the Court in Leung Kin Hung v. Cheng Mui(1), and after considering Legislative changes in the Ordinance omitting the prior restriction as to the time of purchase:

"I do not think the omission can have been accidental and it indicates to my mind the intention of the legislature that purchase over the heads of the sitting tenants should thereafter be given little of any weight in consideration of whether an order would manifestly not be just and equitable"

14. It can carry no weight at all in the consideration of reasonable requirement.

15. The judge below went on to consider generally the landlords position which he thought not to have changed in the prior 6 to 9 years. He accepted that they had a genuine desire to get the premises but felt that he could not raise that desire to "the level of necessity" nor did he think it to be reasonable. He found it "unreasonable" in the light of the recent purchase and the absence of any change in circumstances. He went on to say that, had he concluded the desire could be "elevated to the level of a near necessity" so as to be reasonable then he would have had to consider the evidence called for all Respondents. In these circumstances, he concluded that it would manifestly not be just and equitable to make the order for possession.

16. Among the matters which brought him to that conclusion was that the Respondents were all of long standing, they were all lawful tenants and sub-tenants and that none had caused trouble to the landlord. He thought that they had "life styles centered round their accommodation and the low rent needed" to secure those life styles.

17. The test for "reasonably required" was first adumbrated in Ma Hon v. Hahtani(2). Another Division of this Court made reference to Kennealy v. Dunne(3) in which Stephenson L.J. quoted a passage in Woodfall(4) based upon the Scottish case of Aitken v. Shaw(5) to the effect that the words, "reasonably required" connoted something "more than desire, although at the same time something much less than absolute necessity will do". This test was repeated, although the Ma Hon(2) decision does not appear to have been cited to the Court, in Chiu Kan Sui v. Hong Kong Polytechnic(6) where Sir Alan Huggins, V.P. in delivering the lead judgment said:

“The reasonableness of a landlord's requirement was a different matter from the question whether it was reasonable to make an order: it was a matter not of necessity but something less than that: it was something more than desire.”

18. With respect to the learned Editor of the Law Reports in that year, the headnote in Chiu Kan Sui⁽⁶⁾ could be considered somewhat misleading in that it paraphrases the words of Sir Alan Huggins in a somewhat elliptical manner.

19. It is clear to us that the Presiding Officer here applied the wrong test when he referred to "raising the desire to the level of necessity" or "elevating it to a level of near necessity". The test is to see whether or not the premises is reasonably required by the landlords for their own living in all the circumstances of their position bearing in mind Ma Hon⁽²⁾. The evidence here was such that a tribunal, properly directing itself, could only find a reasonable requirement in the landlords.

20. Once that has been found, it is then necessary to go on to consider whether it would be manifestly unjust, again in all the circumstances, to make an order for possession. "All the circumstances" include that of an owner desiring to live in his own premises, the general circumstances of the principal tanant against whom the claim is directly made and matters of hardship relating to sub-tenants.

21. Mr. Mok, who appears for the landlords here, has submitted that the evidence of the principal tenant and the co-tenants goes no further than the normal hardship that would be occasioned to a person being evicted from the premises in which he has lived for some time with the common difficulty in finding and paying for new accommodation. The test to be applied, we must remind ourselves, is whether to make the order "would manifestly not be just and equitable", that is to say would it cause an ordinary person "apprised of all the circumstances of the case to, so to speak, throw up his hands in dismay and exclaim: “that cannot be right” or in other words "would be thoroughly unjust". - Chow Wing v. Yuen Chi Hung(7).

22. Having considered the evidence given in the Court below and that which each of the Respondents present today has said to us - basically a repetition of that evidence - we do not feel that it would manifestly unjust to make an order for possession.

23. In those circumstances, the appeal is allowed. An order for possession is made.

(Having heard counsel)

24. The possession order now made will take effect three months from today.