THE HONG KONG HOUSING SOCIETY v. NG LUNG NAM

IN THE DISTRICT COURT OF HONG KONG

CIVIL JURISDICTION

ACTION NO. 8966 OF 1991

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RULING

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1. The Plaintiff is applying to strike out the Defence on the ground that it discloses no reasonable ground of defence or is frivolous and vexatious.

2. The Plaintiff is the Hong Kong Housing Society. The Defendant is the monthly tenant of the Plaintiff. The Plaintiff purchased the premises now occupied by the Defendant from the former owner on 13th February 1990. The purchase was subject to the existing tenancy of the Defendant.

3. The Plaintiff by a notice to quit dated 16th May 1991, required the Defendant to quit and deliver up vacant. possession of the premises on 30th June 1991 or at the expiration of the month of the Defendant's tenancy which shall expire next after the end of one month from the service upon him of the said notice to quit.. The notice was served on 17th May 1991 and the tenancy expired on 30th June 1991. The Defendant, however, refused to quit on 30th June 1991 and is still in occupation of the premises.

4. In his Defence, the Defendant said that he had rented the premises from the former owner since 1st January 1990. He denied that he was a monthly tenant and he said there was "no term of tenancy" between the parties. He elaborated on this in his submission. He first moved into the premises in 1988 as a subtenant. After the former principal tenant successfully acquired a public housing the Defendant became the principal tenant of the premises. The premises were then in a state of disrepair. He carried out decoration work and partitioned the premises into three units. He let out two of the units to subtenants and he said he was in occupation. of one of the units. He said he had spent about $100,000 in the decoration and paid one year rent of the premises when they were not being occupied. He said at the end of December 1989, the former owner of the premises together. with her husband came to see him at the premises. The owner used to live in the United States of America. When the owner came to the premises, the decoration work was almost finished. The owner told him that someone else was interested in occupying the premises but as she and her family were quite well off, she would let, the. Defendant stay in the premises as a matter of charity. The owner initially asked for a rent of $5,000.00 per month but finally agreed to the Defendant's suggestion that the rent was to be set at $2,800.00 per month. The Defendant also asked the owner to let the premises to him for a term of three years. The owner said that there was no need to fix the period of three years. She said that she would let the Defendant live there for ever but that the Defendant had to pay the rent punctually. The owner further said that she would increase the rent in the future. Pursuant to this discussion, the Defendant paid the rent as agreed between him and the owner.

5. Although the Plaintiff only acquired the premises from the former owner subject to the tenancy of the Defendant, on the authority of Financial Secretary Incorporated v. Chan Po Kee Civil Appeal No. 21 of 1988, the Defendant's tenancy is a tenancy held from the Plaintiff. The tenancy is not subject to the provisions of the Landlord and Tenant (Consolidation) Ordinance (The Ordinance.) The premises are situated in a post war building so that Part I of the Ordinance does not apply. By virtue of the provisions of Section 50 (6)(e) and Section 116 (2)(b) of the ordinance, the tenancy is excluded from the provisions of Part II and IV of the Ordinance. Further by virtue of the Tenancy (Notice of Termination)(Exclusion)(Consolidation) Order (Cap. 7) which was made pursuant to S.123(2) of the Ordinance, the tenancy is also excluded from the provisions of Part V of the Ordinance.

6. As the tenancy of the Defendant is not subject to the provisions of the Ordinance, one must rely on the common law in order to terminate the tenancy. In the case of a periodical tenancy, it is determinable by a notice to quit. The length of the notice will depend on the nature of the periodic tenancy. In respect of a monthly tenancy,it is determinable by a one month notice of termination.

7. In the present case, the tenancy of the Defendant is not for a fixed term. It is also not a tenancy in perpetuity because there is no such thing in law as a lease in perpetuity (Sevenoaks etc Railway Co. v. London etc Railways Co.(1879)11 Ch. D.625). It is not a tenancy for life because at common law a tenancy for life was an estate of freehold and it could only be created by deed and not by parole (Doe d. Warner v. Browne (1807) 8 East. 165).

8. The Defendant and his former landlord agreed to the letting of the premises at a monthly rent. This, together with the subsequent payment of rent with reference to a month, is evidence of the creation of a monthly tenancy (see Wilkinson v. Hill (1837)3 Bing 508). However, assuming what the Defendant said can be established at the trial, his tenancy is not merely a monthly tenancy, it may be (I emphases the words "may be" as I have not heard the evidence or the arguments from the Plaintiff on this issue) a monthly tenancy with a restriction imposed on its termination. In Kingswood Estates Co. v. Anderson [1963] 2Q. B. 169, a grant of a weekly tenancy to a mother and son, coupled with a promise that they could stay there for the rest of their lives, acted on by moving in reliance thereon, was held to give a specifically enforceable right to stay for their joint lives and the survivor thereafter for his or her life. In Binions v. Evans [1972] Ch. 359, it was held by the Court of Appeal that a purchaser of a property was bound by the terms of the agreement made between the predecessor-in-title.. and the tenant which allowed the tenant to live rent free for the remainder of her life at the property. This is to be contrasted with Roberts v. Tregakis (1878) 38 L. T. 176 where an agreement not to increase rent nor give notice to quit was held to be a covenant personal to the original parties and was not binding on the purchaser of the property whether he had notice of such an agreement. or not.

9. At this stage of the proceeding I am only concerned with whether the Defence has disclosed a reasonable cause of defence. So long as it discloses some cause of defence, or raises some question fit to be decided by a judge or jury, the defence ought not be struck out (Para. 18/19/7 of the Supreme Court Practise 1991).

10. I am satisfied that the Defendant has raised a defence. which ought to be tried and I shall dismiss the summons to strike out. However, as the Defendant only revealed the nature of his case at the hearing of the application, I shall made no order as to costs on the application heard on 18th September 1991.