SUM FUK KIN v. TAI TING NGOK

No. 145 of 1987

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H E A D N O T E

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    Order for possession against tenant of domestic premises by landlord requiring for his own use. Section 52(2)(b) of the Landlord and Tenant (Consolidation) Ordinance. Circumstances to be considered when landlord has shown a genuine requirement. Onus is then on the tenant to show that it would be manifestly unjust and inequitable to make an order tatter for Lands Tribunal to consider and its decision should not be reversed unless clearly wrong in principle. Here circumstances were such that the making of an order would have consequence of preventing the tenant caring for his aging mother who was in ill-health. Decision of Lands Tribunal was correct in refusing an order. Lusher v. Hillard and Chow Wing v. Yuen Chi-hung and others considered.

IN THE SUPREME COURT OF HONG KONG

(Appellate Jurisdiction)

CIVIL APPEAL No. 145 OF 1987

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J U D G M E N T

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Penlington,  J.:

Background

1. This is an appeal from a decision of District Judge Downey sitting as Presiding Officer of the Lands Tribunal in which he refused an application for an order for possession brought by the appellant landlord under section 52(2)(b) of the Landlord and Tenant (Consolidation) Ordinance ("the Ordinance") in respect of Flat E, 8/F, Hong Chiang Building 141-147 Johnston Road, Hong Kong ("the Premises")

2. The facts of the matter, which were not substantially in dispute, are as follows :

(1) The premises are owned by the appellant and form part of a new building for which an occupation permit was issued in November 1966. The rateable value of the Premises is $6,000. Parts I, IV and V of the Ordinance do not therefore, apply.

(2) The respondent has been a tenant of the premises for 19 years under a monthly tenancy. His rent is now $1,251.90 a month having been recently increased by $251. That tenancy was validly terminated by a notice to quit which had effect from Play 1987.

(3) The premises were purchased by the appellant on the 31st December 1986 for $150,000 with the aid of a loan from his brother who lives in Indonesia. The appellant was aware. At the time of the purchase, the appellant was aware of the respondents tenancy.

(4) The appellant is married and has a daughter aged some 7 months at the time of the hearing in the Lands Tribunal. He bought the flat when his wife was pregnant. They now occupy a flat in Hung Hom of some 210 sq. ft. with one bedroom and a sitting room for which the appellant pays $2,000 per month rent.

(5) The respondent is aged 63 and occupies the premises together with his wife who is aged 60 and his mother who is 81. His five children are all married and have their own accommodation but one pays him an allowance of $800 per month. The respondent is a watchman at Pokfulam earning $2,700 per month. His wife does not work and is not in good health. His mother is in very bad health and is confined to the premises, being almost blind and unable to walk without a support. She is unable to look after herself.

(6)The appellant earns $3,300 per month as a store supervisor in Hung Hom and his only other income is the rent from the premises. His wife does not work at the moment but is prepared to do part-time work if it becomes available.

(7)The reasons which were given by the appellant for requiring the flat, pursuant to Rule 53A of the Lands Tribunal Rules, were as follows : -

        (a) The premises is larger than his present flat.

(b) The premises are more pleasant than the present flat.

(c) It would be financially advantageous for him to have possession of the flat.

(d) The appellant's wife might be able to get parttime work if they were living in the premises.

Decision

3. There are two questions which must be answered by the Lands Tribunal in applications of this sort. The first is whether the landlord has shown that he reasonably requires the use of the flat for occupation as a residence for himself. If satisfied that such is the case, that burden being on the landlord, the Tribunal must consider the proviso to Section 52(2)(b) of the Ordinance. It reads as follows:-

"         Provided that the Tribunal shall not make an order by reason only that the circumstances of the case fall within this paragraph if -

(i) in the case of a tenancy, the tenant satisfies the Tribunal that in all the circumstances of the case it would manifestly not be just and equitable to do so;

(ii) in the case of a sub-tenancy, the Tribunal is satisfied having regard to all the circumstances of the case, including the question whether other accommodation is available for the principal tenant or the sub-tenant, greater hardship would be caused by granting the order than by refusing it;

4. This is not a case of a sub-tenancy so the question is whether the respondent satisfied the Tribunal that the making of an order would be manifestly unjust and inequitable in all the circumstances.

5. The Presiding Officer was in some doubt as to whether the evidence was sufficient to show that the appellant did reasonably require the Premises for his own use and that of his family. However, on full consideration of all the factors he came to the conclusion that he did. One of the factors which he took into account, and which Mr Andrew Li for the appellant argued before us, was that the appellant and his wife intended to have more children in future. We feel that this was not a factor the Presiding Officer should have taken into account and that he had to deal with the matter on the evidence as it was before him,not on circumstances which might change in future. Nevertheless, taking into account the size of the appellant's present flat which has only one bedroom, we have no doubt that the Presiding Officer's finding that the premises were reasonably required by the appellant for his own use could not be challenged.

6. What understandably gave the Presiding Officer cause for very anxious consideration, as it has us, is whether it would be manifestly unjust and inequitable to make the order. The Presiding Officer had in mind the relevant authorities on this difficult matter which so often requires the Lands Tribunal to make or refuse orders which either way will cause hardship. Having fully considered all the factors here he came to the conclusion that the respondent "has established that an order for possession would cause him exceptional hardship, both financially and physically and this is one of those rare and exceptional cases where it would not be just and equitable to make an order for possession". He said that an ordinary person knowing all the facts would say "it would not be right" to make an order against the respondent. This was the test used by de Basto D.J. in Lusher v Hillard⁽¹⁾ though he referred to "a Court of Equity" and approved in subsequent cases.

7. Having established that the premises were reasonably required for the appellant and his family the onus is clearly on the respondent to show, on a balance of probabilities, that it would be unjust and inequitable to make an order, Chow Wing v. Yuen Chi Sung and anothers⁽²⁾. In that decision Roberts C.J approved the test used in Lusher v. Hillard except to come to substitute "an ordinary person" for "a Court of Equity". He went on to say "we do not consider that it would be helpful to attempt to lay down those matters which are relevant in deciding whether or not it is just and equitable to make an order. This is a matter that is best left to the trial judge to decide in the light of the facts of the case before him. Similarly it is very much a matter for him to assess the weight which he should attribute to the various relevant factors which he has taken into consideration". In Lam Chuk Ying v. Chan Kwong Kwan⁽³⁾ the test in Lusher v. Hillard⁽¹⁾ was again approved and it was emphasised that the test was not one of relative hardship but that the tenant must discharge the heavy burden of showing that it would be thoroughly unjust to make an order. The amendment to the ordinance was intended to make it easier for landlords to recover possession of premises required for their own use and the Court should give effect to'that intention. However in Kong Tai Sang v. Wong Kwok Nang and others (4) a Court of Appeal, which contained two of the Judges who had sat in Lam Chuk Ying, considered that even though the landlord had a very strong claim for possession due to the circumstances of his family, the particularly tragic position of the tenant who was suffering from caneer, were such that he had discharged the burden on him and an order should not be made.

8. While in Lam Chuk Ying it was held that the Court should not, in assessing whether it would be manifestly unjust to make an order, simply balance the hardship of the landlord against that of the tenant, section 52(2)(6) does require that the Court shall have regard to "all the circumstances of the case" and we think that inevitably those circumstances are not only those relative to the tenant but also those of the landlord. Mr Li has rightly emphasized that the burden on the tenant is a heavy one As submits that the Presiding Officer has not taken into account sufficiently the fact that the appellant is living in a very small flat with only one bedroom and that he has a young child. This inevitably must be most inconvenient. He also submits that the Presiding Officer has miscalculated the appellant's financial position and also that of the respondent. His finding that the respondent was spending over 50% of his salary on rent was not correct and in fact it was only 39%. On the other hand the appellant was spending some 44% of his income on his rent. Mr Li also submitted that the Presiding Officer had placed undue importance on the state of health of the respondent's mother and that, as she was apparently confined to the premises which were on the 8th Floor, it would be of no great consequence if she had to move to some other flat.

9. Emphasis was also placed on the fact that the respondent gave evidence that he had not sought to obtain alternative accommodation and he had simply said that he was satisfied that no suitable accommodation similar to the premises could be obtained for what he could afford to pay. There was also apparently no evidence that the respondent had sought further financial assistance from his children who were all in stable employment Mr Li submitted that the circumstances of the respondent did not come within the "unusually tragic" factors in Kong Tai Sang which was the only reported case where a tenant had successfully discharged the burden on him to show that the order would be manifestly unjust and inequitable. In Lusher v. Hillard⁽¹⁾ it was held that there should be "clear, cogent and impelling reasons why an order should not be made. Mr Li submitted that.there were no such reasons here.

10. Mr Li has argued the matter for the appellant with what we considered to be conspicuous ability and has been most helpful. These are difficult matters and in circumstances such as are present in this case the Court can only feel sympathy for both the appellant and the respondent. We do feel however that the Presiding Officer was correct in coming to the conclusion that if an order for possession was made and the respondent had.to leave this flat, it was extremely unlikely that he would be able to obtain premises where he could continue to live with his wife and his mother. It would inevitably mean a splitting up of a family unit and this would indeed, under the circumstances, be tragic. This situation will inevitably not remain permanent.. It may well be that within a relatively short time the circumstances of both the appellant and the respondent will have changed and a further application may then succeed. However, we are satisfied that the Presiding Officer, and this court, must'look at the facts as they are at the moment.

11. As was said in Chow Wing v. Yuen Chi Hung⁽²⁾ the question of whether the making of an order is manifestly unjust and inequitable is a matter for the Tribunal hearing any particular application. Here the Presiding Officer has given the most careful and anxious consideration to all the relevant circumstances of this matter We accept that he seems to have made errors in the calculation of the relative amounts which the appellant and respondent spend on rent but clearly those were not major errors; what clearly,and we think rightly, was the major factor was the strong probability that if an order was made the respondent would no longer have a flat with two bedrooms and consequently would not be able to continue to care for his mother. In view of her state of health we are satisfied that the Presiding Officer was correct in holding that that would be manifestly unjust and inequitable.

12. For those reasons we were not able to say that the decision below was wrong and so the appeal was dismissed.

(1) (1980) H.K.D.C. L.R. 25

(2) (1980) H.K.L.R. 788

(3) (1981) H.K.L.R. 661

(4) C.A. 113 of 1982