MAIDSTONE INVESTMENT LTD v. CHU MEI KAM

HEAD     N0TE

Recovery of possession - Part V of the Landlord and Tenant (Consolidation) Ordinance deems a hotel and boarding house to be non-domestic - whether guest house is a boarding house - construction to avoid conflict between two parts of an ordinance. Where possession is claimed through failure of tenant to vacate on expiry of Notice of Termination, the material date for determinating whether premises are business or domestic is the date of service of Notice of Termination. Although there may be no evidence of the status of the premises at the date of the service of the Notice of Termination, proof of user at a time reasonably proximate to the date of service can be relied upon as evidence of user at the material date.

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT KOWLOON

CIVIL JURISDICTION

ACTION NO. 3874 OF 1985

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BETWEEN

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JUDGMENT

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1. The defendant is the plaintiff's monthly tenant of Flat B1, the 6th floor, Chung King Mansion, Kowloon. On the 4th September 1984, the plaintiff served on the defendant a six month's Notice of Termination under Part V of the Landlord and Tenant (Consolidation) Ordinance. As the defendant did not vacate the premises on the expiry of the Notice, the claim by the plaintiff is for possession founded on the contention that part II of the Ordinance does not apply.

2. The issue I have to decide is whether the premises are business or domestic premises.

3. Paragraph 3 of the Amended particulars of Claim sets out the gist of the plaintiff's case. It alleges that :

                "The premises were originally let to the defendant for domestic purpose ...... On a day unknown to the plaintiff, the defendant started to use the said premises for business purposes as a guest house. The defendant had been using the said premises for business purposes on the 12th September 1984 (the date of the Notice of Termination) and had continued to do so on the 2nd April 1985 (the date this action was commenced )."

4. Miss Chan Mee Ha, an officer of the Rating and Valuation Department, gave evidence that she visited the premises on the 31st July and the 2nd August 1984. Her inspection revealed the following salient features ;

                (a) On her first visit, she saw posted on the wall inside the premises, near the entrance, a notice with the heading : "Regulations for  Boarders."

                (b) The premises were partitioned into 6 rooms. Four of the rooms were looked. Each of these rooms had a number displayed on the door of the room commencing from No.5 to No.9 inclusive.

                (c) The kitchen door was locked when she first visited the premises.

                (d) On her second visit, she found that the "Regulations for Boarders" Notice had been removed. The numbers on the doors were also removed.

                (e) She inspected every room. In each room (from rooms No.5 to 9 inclusive), there was a bed, a wardrobe, a TV set, an air-conditioner, a bed-side table and a waste-paper basket. In room No. 9 there were miscellaneous articles inside. All rooms were tidy and she saw no clothings. She looked into the wardrobe at room No.5 and saw there was nothing inside.

                (f) On this second visit, she managed to obtain access to the kitchen, the door of which was locked on her first visit. It did not look like a kitchen. There were no cooking utensils. There was no town gas outlet nor was there any LP gas supply to the gas stove.

5. On both occasions, Miss Chan met a Mr. Lee Siu Tong who is the son of the defendant and who, she says, claimed to be the tenant of the premises. After Miss Chan's first visit, she left with Mr. Lee Siu Tong a form in the event of his wishing to make any comments. On her second inspection, Miss Chan also visited the adjoining premises (Flat B8) which is a guest house named "Travellers' Friendship House" operated by Mr. Lee Siu Tong. The rooms there were numbered 1 to 4 inclusive.

6. Miss Chan subsequently made an inspection report to which she attached a sketch of the premises. The remarks contained in her report are as follows :

                "Judging from the arrangement and numbering of the rooms; the furniture inside; the manner of occupation; the lack of a normal kitchen for a large family ...... and the changes found during the 1st and the 2nd inspections, it is reasonable to infer ...... that the premises are used other than as a dwelling but as a guest house or at least as an ancillary part of the guest house at flat B8 on the same floor operated by the same tenant. The primary use is non-domestic. Under Section 52 (2) (e) the use of the premises as a boarding house is not considered as domestic user."

7. On the 6th of September 1985, the Commissionerof Rating and Valuation issued a certificate stating that on the date of inspection (2nd August 1985) the primary user of the premises was non-domestic. It is obvious that the certificate was based on Miss Chan's report.

8. Various points arise for consideration in the case before me. I will deal with them separately.

9. It is submitted on behalf of the defendant that as the plaintiff is relying on part V of the Landlord and Tenant (Consolidation) Ordinance, he is bound by the provisions contained in that part. For that reason, it is argued that as a guest house is used for human habitation, the premises are domestic premises. The legislature has however, thought fit to enact (by the proviso to section 120A) that only hotels and boarding houses are to be regarded as non-domestic. Since a guest house is neither a hotel nor a boarding house, it is, therefore, domestic premises.

10. I accept that a guest house is distinguishable from a hotel or boarding house. It is a place where a room or rooms (not in a hotel) are let out as sleeping quarters. In a guest house food is not provided which distinguishes it from a bearding house where lodging and food are provided usually at a fixed rate : see World Apartments v. Lai Bun (1962) DCLR 97. If one looks no further that what is stated in part V, it would appear that as a guest house is used for human habitation and not being a hotel or boarding house, it is domestic premises within the meaning of that expression contained in Part V. If the use to which the premises are put is domestic, then to treat the proviso as not having exempted a guest house would result in the premises being caught by part II of the Ordinance. But this would have the effect of producing an impossible situation. Section 51(2)(e) of part II of the Ordinance specifically states that "the use if a premises as a boarding house or lodging house is a use other than as a dwelling." A guest house is a lodging house. An absurdity arises if one part of the Ordinance is to be construed as bringing a guest house within the meaning of domestic premises whilst another part excludes it. There must of necessity be a presumption that the legislature did not intend the two parts of the Ordinance to be at variance with each other. As Part II specifically deems a lodging house to be non-domestic, any process of analysis leading to a contrary view must, in my view, be subordinated to that which has been expressly enacted. Statutes, like documents, must be read as a whole and all parts made consistent with one another if possible : Leader v. Duffey (1888) 13 App. Cas. 294. However, a repugnancy does not arise if the draftsman of part V did not have in mind the ordinary and natural meaning of the word "boarding house" but ascribed to it the meaning given to that word in the now repealed Boarding House Ordinance (No. 23 of 1917) which 'includes every place where any person is harboured or lodged for any kind of hire or award and where any domestic service whatsoever is arranged by the owner, lessee ..... to the person so harboured or lodged.' This extended meaning of a boarding house would include a lodging or guest house. I must, therefore, regard the word boarding house in Part V as an expression which is intended to include a lodging house.

11. As the premises were originally let for domestic purposes, the burden is on the plaintiff to establish that the premises were, at the material date, business premises. Where possession is claimed, as in the case before me, in reliance of a Notice of Termination served under Part V of the Ordinance, the material date would be the date of the service of the notice. If at that date the premises were domestic the notice would be ineffectual as the tenant would enjoy protection under Part II. But if the premises were non-domestic at the date of the service of the notice, I entirely agree with the reasoning of Judge Hooper (as he then was) in the case of Alice Martha Wu Chan v. Peter Hui (1974) DCLR 15 that the tenant cannot abort the landlord's right by his unilateral act of changing the status of the premises after the receipt of the notice so that it becomes domestic thereafter or at the time of the commencement of the action.

12. A further point taken on behalf of the defendant is that if the material date is the date of the service of the Notice of Termination, there is no evidence of the use of the premises on that date; that the certificate of primary user is only evidence of user on the date of inspection; that the same applies to the evidence of Miss Chan; that as the onus is on the plaintiff to prove that the premises were non-domestic at the material date, the failure to do so is fatal to plaintiff's claim since the Notice of Termination can have no effect unless it can be shown that the premises were business premises at the date of the service of the notice.

13. Although the legal, as distinct from the evidential, burden never shifts, the person on whom it lies will often prove relevant facts or rely on presumptions from which he asks the Court to infer the fact in issue which he has to establish in order to succeed. In many cases, the existence of a fact in issue may be shown by proving its previous existence at a reasonably proximate date in situations where the facts shown to have existed have a natural and logical tendency to establish the fact in issue.  Presumptions of this kind are presumptions of fact of fact rather than of law. They have no defined boundaries and are not circumscribed by any fixed rule. For instance, where adultery has been proved, its continuance will be presumed where the parties live under the same roof; an inference of fact may be legitimately drawn that a person alive and in health at a certain time was alive at a short time and even several years later. Similar inferences have been drawn in cases of sanity, insanity, religious opinions, or partnership. Such presumptions may even operate retrospectively. A ship that has become unseaworthy, without visible cause, shortly after sailing is evidence that it was unseaworthy at the time of sailing. The validity of such presumptions depend on ordinary good sense rather than on law. I see no reason why, on principle, the certificate of primary user or the evidence of Miss Chan cannot be regarded as amounting to a provisional presumption of fact that the non-domestic use of the premises continued and was not altered at the time of the service of the Notice of Termination. In cases of this type it is not reasonable to expect a landlord to be able to show the date when the notice to quit was received or the use to which the premises were put on the date when the notice was received. Presumptions of this kind when warranted by the circumstances shift the evidential burden of proof no less than rebuttable presumptions of law.

14. I am satisfied that on the days when the premises were inspected by Miss Chan the user was non-domestic. I have found her to be an honest and reliable witness. Although I am not bound by her expressions of opinion, I tak e the view that the conclusion she has drawn from her observations are consistent with the premises being used as a guest house.

15. The defendant's case is that at all material times the entire premises were used wholly and exclusively for domestic purposes as a dwelling; that rooms No.5 and No. 6 were sub-let to a Mr. Chu and to a Mr. and Mrs. Woo respectively who vacated those rooms in 1985 (long after the material date). The defendant and other members of her family occupied the rest of the premises. Her son, Lee Siu Tong, and his wife occupied the kitchen; the defendant occupied one room with her husband. The other members of the family who resided at the premises included her elder son Lee Pak Sung with his wife and two children, her youngest son (who died towards the end of 1984) and a younger brother. The defendant was not present when the premises were inspected by Miss Chan as she and her husband were in China.

16. I find the evidence of the defendant and her witnesses incompatible with the known state of affairs that existed as disclosed by the evidence of Miss Chan which I accept. I do not believe the evidence of the defendant that rooms No.5 and No. 6 were sub-let as alleged. Miss Chan stated that she opened the wardrobe in room No.5 and found it empty. Lee Siu Tong told Miss Chan that rooms No.5 and No. 6 were sometimes used as guest rooms. It is significant that the comments made by Lee Siu Tong in his memorandum to the Commissioner of Rating and Valuation made no mention of any sub-tenants occupying the premises. I find it sur-prising that although the defendant says she issued rent receipts to her sub-tenants, as did Lee Siu Tong in her absence, both the defendant and her son saw fit to discard all the counterfoils of those rents receipts well knowing the purpose of Miss Chan's visits thereby destroy-ing such evidence which they alleged they had in their possession to support the allegation of sub-letting. It is not disputed that the main door of the premises were always kept open - at least for 18 hours a day according to the evidence of Lee Siu-Tong - a feature which one can expect in a case of a guest house but unlikely if the premises were the home of the occupants. The defendant's son, Lee Siu Tong, had keys that gave him access to all the rooms including those rooms allegedly occupied by sub-tenants which would not be surprising if those rooms were guest rooms but otherwise if they were occupied by sub-tenants who have exclusive possession and who would normally ensure that outsiders do not have access to their rooms in their absence. The plaintiff's rent collector gave evidence that when he visited the premises at an earlier date, he saw a foreigner come out of the toilet and hand over a key to Mr. Lee Siu Tong. There are numerous other aspects of this case that militate against the defendant's contention and which lend support to the plaintiff's case. It would be idle for me to set them all out.

17. I am satisfied on the evidence before me that the premises were, at the material date, non-domestic and that the defendant's tenancy had been validly terminated entitling the plaintiff to an order for possession. It is not necessary for me to go so far to say that every room in the flat was necessarily a guest room. It could be that the defendant or her son or some members of her family may have occupied a room. Indeed, it is not unusual for a keeper of a guest house to occupy some portion of the house for his own dwelling or purpose. Suffice it to say that on the evidence I find that the premises were used primarily as a guest house wherefore Part V of the Ordinance applies.

18. There will be an order for possession and for payment of mesne profits at the rate of $1,620 per month from 1/4/85 until delivery of possession and costs for the plaintiff (Upper Scale).

Certified True Copy

(Ms. C.Y. Chan)

Stenographer