LO SUN KIU v. YU KUK

Landlord and tenant - Part I - recovery of possession - limited to statutory causes of action - whether notice under Section 58 Conveyancing and Property Ordinance necessary - comparison of statutory provisions of Parts I, II and IV - Held: 1.   Possession of Part I premises may only be recovered pursuant to an order of the Tribunal founded on a statutory cause of action; 2.    Part I does not require notice to quit or any other notice to be given by landlord to tenant before an application for recovery of possession is commenced; 3.    Section 58 inapplicable. - Sections 17(1)(2), 33(1)(b)(d), Part I, Landlord and Tenant (Consolidation) Ordinance, Cap. 7; Section 58 Conveyancing and Property Ordinance, Cap. 219.

IN THE LANDS TRIBUNAL OF HONG KONG

Application No. L. T. K4/86

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JUDGMENT

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1. The applicant is the landlady of domestic premises situate at Ground Floor, No. 9 Hang Fook Street, Shek Wu Hui, Sheung Shui, New Territories. The respondent occupies the suit premises under an oral monthly tenancy. The applicant applies for possession of the suit premises, arrears of rent and mesne profits at the rate of $600 per Chinese lunar month.

2. The applicant pleads that the suit premises are subject to Part I of the Landlord and Tenant (Consolidation) Ordinance, Cap. 7 but that allegation was in the respondent's notice of opposition denied. In Yu Kuk v. Commissioner of Rating and Valuation and Lo Sun Kiu L. & T. Appeal No. 7/85 the Tribunal held on 3rd July 1985 that the then primary user of the premises was not business premises. In terms of the Ordinance, the negative effect of that finding, is that the primary user of the suit premises, as at the date appropriate to those prior proceedings, was domestic. The applicant relies on that judgment. The respondent called no contrary evidence on user. I find that the primary user of the suit premises is domestic and that they are pre-war premises which are subject to Part I.

3. The applicant claims possession on two statutory grounds. First pursuant to Section 33(1)(b) that the respondent had been convicted of an offence of using or suffering or permitting to be used the premises or a part thereof for an illegal purpose. Secondly, pursuant to Section 33(1)(d), that the tenant had failed to observe a condition of her tenancy namely that she was not permitted to hold gambling parties or to do anything against the laws of Hong Kong. The first ground was based on a conviction of the respondent at the Fanling Magistrate's Court on 29th January 1986 in Fanling Case No. 126186 for operating a gambling establishment, contrary to Section 5(a) of the Gambling Ordinance, Cap. 148. I find that the respondent was so convicted. The second ground was based on an oral term of the monthly tenancy agreement, which the applicant claimed, was confirmed in writing by Clause 6 of the Rent Receipt, signed by the applicant and handed to the respondent on each monthly payment of rent.

4. The respondent did not call evidence and I find both allegations of fact established. The major issue which the parties contested was whether, as a matter of law, the applicant was obliged to serve notice on the respondent in compliance with Section 58 of the Conveyancing and Property Ordinance, Cap. 219. It was common ground between the parties that before the proceedings were commenced no written notice was given by the applicant to the respondent under Section 58 or otherwise.

5. The applicant submitted that Section 58 did not apply to the proceedings. It was pointed out that the application was not a forfeiture proceeding but brought pursuant to two statutory causes of action created by Section 33. Part I, it was submitted, did not require any notice to be given. Further, Section 58 itself was expressly subject, under Sub-section 14 thereof, to the effect of the Landlord and Tenant (Consolidation) Ordinance. In any event, it was submitted, Section 58 only applied to leases and not to tenancy agreements.

6. The respondent submitted that Section 58 was of wide general application and applied to both leases and tenancy agreements. I was referred to the judgment of Cons, D.J., as he then was, in Cheng Chun Pan v. Cheng Ting Fat VCJ No. 2574/70 where the effect of the provisions of a rent receipt, in very similar terms to the present rent receipt, were considered. It was held that a similar clause printed thereon was a covenant between the parties and in the absence of an express right of re-entry without notice, then notice at common law had first to be given, before forfeiture proceedings for possession could be commenced. In view of the applicant's concession that no such notice had been given, it was submitted that the application should be dismissed.

7. I have considered the provisions of Part I in the light of both parties submission. Section 17(1) provides that orders for possession in relation to premises subject to Part I can only be made under Part I. Those provisions are far stricter than Part IV, which preserves common law rights of forfeiture and are also stricter than Part II where, until a contractual tenancy is statutorily continued, common law forfeiture rights remain.

8. I hold that under Part I an order for possession may only be made in terms of Part I. I further hold that the grounds for recovering possession are limited to the statutory grounds set out in Part I including those in Section 33. I recognise that some of the statutory grounds are similar to grounds that might exist contractually or at common law. However, when applications are brought for recovery of possession of Part I premises, they are exclusively and can only be brought pursuant to a statutory cause of action. I hold that Section 33 creates several statutory causes of action and contains no statutory requirement for any prior notice to be given by a landlord to a tenant.

9. Turning to the remainder of Part I, I hold that no where is there any notice requirement. I recognise that there is reference to notices to quit in Section 17(2) but that provision reinforces the view that no notice is required. Section 17(2) refers to a limited group of tenancies, where the tenant was in possession before 23rd May 1947. The contractual terms of such old tenancies are preserved with the important exception, declared in the proviso, that a landlord does not have to serve any notice to quit on a tenant. So this provision supports a general interpretation of Part I that notice to quit is hot required.

10. I have also reminded myself of the contrary position which arises under Part II in the case of monthly and other periodic tenancies where, unlike Part 11 fixed tenancies, notice to quit is required to determine the periodic tenancy before the determined contractual tenancy can be statutorily continued - Ngai Sau Ying v. Henry Chue Kwok Keung (No. 2) (1982) HKLR 256. I have recently considered the different notice requirements applicable to Part II and IV and the effect thereon of Section 58 of the Conveyancing and Property Ordinance, in Mok Yee Wan v. Taipan Agencies Ltd. L. T. No. 1626/85.

11. I accept Counsel for the applicant's submission that the exceptional Part II requirement for notice in relation to periodic tenancies, only stems from the peculiar provisions of Section 52. That Section expressly requires, before any period of statutory continuance can commence, that the contractual tenancy has terminated by effluxion of time or been determined by the landlord. The latter alternative arises in the case of periodic tenancies and the landlord can only determine such tenancies by notice whereupon they are statutorily continued. The provisions of Part I are quite different. There is no Part I statutory concept of continuance. Instead, the scheme of Part I to provide protection for tenants, is both simpler and more direct. If a tenancy is subject to Part I, it matters not whether it is a periodic or fixed term tenancy or whether a tenant is merely holding over. Possession may only be recovered in every case by an order under an express statutory ground.

12. The simple and unequivocal provisions of Part I make it abundantly clear, that in terms of Section 58(14), the substantive provisions of Section 58 requiring notice, do not apply. In view of this conclusion, it is not necessary to go on and consider the remaining submissions of Counsel including whether Section 58 extends to tenancies or, if it does, whether written notice is necessary or if oral notice would suffice.

13. There shall be judgment for the applicant in whose favour the following orders are made:

14. DATED this 2nd day of May 1986.