丘國璋 v. 葉江及另一人

LDPD 3658/2003

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Part IV Possession Application No. LDPD 3658 of 2003

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J U D G M E N T

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1. On the request of the Respondents' counsel and with the agreement of the Applicant's solicitor in the pre-trial hearing, this judgement is issued in English. Were there no such agreement before hand, the judgement would be written in Chinese. It might be appropriate to issue a Chinese judgment as all the documents submitted as proofs by the two parties, save those written by solicitors and counsels, are in Chinese. The witnesses all gave evidence in Cantonese, too. Many of the terms used by the two parties and their witnesses throughout the hearing are either seldom seen (such as Block Government Lease, N. T. Exempted Houses, Manager, Tso and Tong) in other sectors of the community or no longer used (e.g. Modification of Tenancy or South District Office) in the living Hong Kong. To the two litigants, they are apparently more familiar with these old terms. A Chinese written judgement will facilitate them to apprehend the issues involved with ease.

The Property

2. The property concerned is a piece of farmland located in Tseng Lan Shu demised for agricultural purpose and subject to the provisions of the Block Government Lease. The property is a part of the lot known as Demarcation District 253 Lot No. 562 Section A Remaining Portion (hereinafter known as "the Subject Land") now with a dwelling structure and some dilapidated farm buildings, most of which have been left in dereliction since 10 years ago. The cause of dereliction is undisputed. The two parties agreed that in early 1990s, due to the policy to tighten up environmental control on pollution arisen from farm waste, the government decided to pay off the poultry and pig breeders to put a stop on all commercial poultry and pig farming activities in the N. T. including Tseng Lan Shu.

The Dispute

3. The cause of litigation is not non-payment of rent. It is simply because of the Respondents' failure to respond to the Applicant's CR101 Notice (page 113 of Exhibit AR2) served under S.117 of the Landlord and Tenant (Consolidation) Ordinance, Cap 7 (hereinafter referred to as "the Ordinance"). The Respondents gave a reply in the form of CR102 (Page 114 of Exhibit AR2) stating the intention not to apply to the Tribunal for a new tenancy. The ground stated in the CR102 Notice is that it is a life tenancy purporting that it is outside the jurisdiction of Part IV of the Ordinance. In Court, the Respondents also added that the agricultural nature of the tenancy should have caused it to be excluded from the jurisdiction of Part IV. The Respondents also took the opportunity of the lawsuit and requested the Tribunal to declare their proprietary interest in the Subject Land, i.e. a life tenancy held by the Respondents. The Tribunal had in the same pre-trial hearing for the Summons lodged rejected the request as the Tribunal had no jurisdiction to do so under the Lands Tribunal Ordinance.

Facts To Establish/Issues To Tackle

4. Obviously, there is a dispute on whether the subject tenancy is within the ambit of Part IV of the Ordinance, that is, whether it does or does not fall within the categories of tenancy defined in Section 116 (2) of the Ordinance. In this regard, the Tribunal needs firstly to establish whether the Subject Land is pure agricultural land or agricultural land with a dwelling house occupied by persons working on it, and secondly on the term of tenancy. Other issues to tackle are the validity of the CR101 Notice served and whether the Respondents are co-tenants since according to the Second Respondent, Yip Kong, the First Respondent, died two years ago. Were they not the co-tenants, the capacity of Au Hop as the Second Respondent in this application should need to be established, too.

Testimonies and Analysis

5. The Applicant had four witnesses to testify for his case, whereas the Respondents originally proposed two. When the hearing progressed to a very late stage, the Respondents decided to drop the number to one.

(a) Yau Yuk Ming [the Applicant's first witness known as AW(1)].

Same as the Applicant, AW(1) is also an indigenous villager of Tseng Lan Shue. He professed himself knowing and well known to most of the villagers around his age, and possessing excellent knowledge regarding every part of the village environs and the village customs. He has been engaging in building development, in particular, building New Territories Exempted Houses for villagers of Tseng Lan Shue and the neighbouring areas for 30 years. The main points of the testimony he gave in Court are basically in three facets. The first is his knowledge concerning the ownership of the Subject Land on which the Respondent's houses are now built. He said the Subject Land was held in the 1960s in the name of Yau Tai Ching and Yau Kang Fat but the de facto owner was Yau Tai Kay, i.e. the Applicant's father. He witnessed Yau Tai Kay and his family farming the Subject Land at that time. According to the village custom in 1960s, the member of a large family, who farmed the family owned land was normally regarded as the land owner although someone from the same family was the registered owner. Thus, Yau Tai Ching and Yau Kang Fat were only managers under a trust to hold the land for Yau Tai Kay. The second is his knowledge concerning Yau Tai Kay's intention to build New Territories Exempted Houses for his sons. Yau Tai Kay sought advice from him in 1986 or 1987 as to the suitability to build on several parcels of land including the Subject Land. Through this occasion and the subsequent discussions, he realized that Yau Tai Kay had once intended to take back the Subject Land for development. The idea was dropped when he found that the Subject Land was unsuitable. The third is his knowledge concerning the villagers' usual practice in leasing out their surplus land. He said that usually the initial fixed term was ten years and thereafter, yearly with rent collected on a yearly basis. The rent was very often revised on expiration of the initial fixed term.

No doubt, AW(1) knows a lot concerning Tseng Lan Shue. His testimony does not help the Tribunal much. The Tribunal cannot rely on his testimony to conclude that the Respondents had hold a ten years term tenancy expired in the 1970s and afterwards, on a yearly basis. Granting an initial fixed term of ten years and thereafter yearly could be a general practice and custom of the Tseng Lan Shu villagers but such general practice is not an evidence to support the Applicant's argument. His testimony concerning the ownership of the Subject Land in the 1960s is also against the ownership records (pages 118 &119 of Exhibit AR2) kept in the Land Registry and details on the Modification of Tenancy permit (known as "M.O.T.") (Pages 45 to 61 of Exhibit AR2) held by the Second Respondent. The latter document was signed by Yau Tai Ching and Yau Kang Fat jointly in the capacity of land owners to signify their agreement to the Respondents for building houses including a dwelling on the Subject Land. However, there was no substantive challenge from the Respondents to Yau Tai Kay's landlord status. In fact, whoever was the owner at that time is unimportant. Be it Yau Tai Kay or Yau Tai Ching and Yau Kang Fat, it does not make any material difference. Though Yau Tai Kay was not the registered owner of the Subject Land, he still could be the Respondents' landlord. The fact that the Applicant purchased the Subject Land from Yau Tai Kay and Yau Tai Kay obtained the title from Yau Tai Ching and Yau Kang Fat confirms the Applicant's legal right in the matter.

(b) Yau Kwok Cheung [the Applicant and second witness]
Yau Kwok Cheung, a younger fellow than AW(1) and in his mid-40s, is the Applicant's second witness. He does not appear to be dishonest but at times did avoid to give answers he considered unfavourable to his case. He was unable to give as much as AW(1) could do concerning the villagers' usual practice (particularly, in setting the term of leasing out surplus agricultural land) and his father's building proposal. His part of the testimony concerning the ownership before his acquisition of the title of the Subject Land, if not too brief, is equivocal. He said he learned most of the background in piecemeal from his father. His testimony is not of assistance to the Tribunal in establishing whether Yau Tai Kay was, as the Applicant and AW(1) both claimed, the Respondents' landlord in the 1960s. It fails too, to assist the Tribunal in concluding whether the Subject Land was leased only to Yip Kong or to Yip Kong and Au Hop jointly.

He tried to convince the Tribunal that he had no intention to take back the Subject Land. He just wants a proper written tenancy agreement to avoid the future dispute regarding the tenancy terms. There might be such a need in the Tribunal's view but the negative steps that he had taken towards the improper cheques received from the Respondents do give the Tribunal an impression that he does not want his tenancy with the Respondents to continue.

He produced a wealth of records on the rent received from other tenants (or ex-tenants) and records concerning the terms of other tenants' tenancies (Pages 120 to 135E of Exhibit AR2), trying to draw an analogy from these records to prove that the term of the tenancy with Yip Kong is ten years and thereafter yearly. When questioned as to why his claim made in his Form 22 application regarding the term of tenancy being inconsistent to his testimony made in Court, he explained that it was firstly because he was not certain about the exact tenancy commencement date and secondly he had not considered entering the exact commencement date in the Form important. When questioned as to why his CR101 Notice addressed to both Yip Kong and Mrs. Yip (i.e. Au Hop) whereas he considered only Yip Kong was the tenant in his testimony, he explained that he completed the Form in a casual manner with no implication that Yip Kong and Mrs Yip were co-tenants.

(c) Yau Hon Kong [the Applicant's third witness known as AW(3)]

He is the son of Yau Tai Ching, older than the Applicant but about the same age of AW(1). The Applicant and AW(3) are both descended from the same grand-father. He confirmed that Yau Tai Kay and his family were farming the Subject Land when he was a kid of about six. He considered Yau Tai Kay was the owner of the Subject Land in 1960s. His father, Yau Tai Ching, was only one of the two managers holding the land on trust. The land of the Yau Family were divided in family meetings conducted at the Ancestral Hall of the village some long time ago beyond his memory. The title of the land appropriated in the family meetings was subsequently transferred to the respective members of the Family or swapped between the concerned members in accordance with the decision of the family meetings. He agreed to AW(1) that it was normal practice for someone to approach the de facto owner but not the managers for tenancy of land in Tseng Lan Shu. Therefore, Yau Tai Kay was the one who leased out the Subject Land. In fact, he had never seen Yip Kong and /or Au Hop paid rent to his father, Yau Tai Ching, or the other manager.

AW(3) cannot be regarded as a totally independent witness. His testimony is nevertheless reliable to some extent, particularly that concerns the division of the Yau Family's land to respect the boundary of the actual occupation by the different members of the Family. His father was one of the Yau Family involved in the division of the Family land. The Deed of Exchange registered in the Land Registry does endorse this saying.

(d) Pang Kin Ming [the Applicant's fourth witness known as AW(4)]

His testimony mainly concerns the grant of Modification of Tenancy by the then South District Office to villagers or outsiders removed to settle in Tseng Lan Shu (for building houses on agricultural land). His mother held such a permit in respect of a piece of agricultural land leased from Yau Tai Kay. He lived with his mother there. His mother is now 95 years old and because of the age, cannot come to the Court to give evidence. He told the Tribunal that the term of his mother's tenancy granted by Yau Tai Kay was initially two years certain and thereafter yearly. His returned the land to Yau Tai Kay in 1991or probably in 1992.

As similar to the testimonies given by AW(1), the Applicant and AW(3), the Tribunal does not find it appropriate to base on the term of the tenancy between Yau Tai Kay and AW(4)'s mother to conclude the term of the tenancy between the Respondents' and Yau Tai Kay.

(e)Au Hop [the second Respondent and witness]

The second Respondent is the only witness from the Respondents' side. At the beginning of her testimony, she said that her husband (Yip Kong) and her leased the Subject Land from Yau Tai Kay. When crossed-examined, she hesitated and said that she could not be certain whether it indeed was Yau Tai Kay or somebody else whom they had approached. Yau Tai Kay told them that they could lease the Subject Land for as long as they wished so long as the rent was paid. They should return the Subject Land when it was no longer required. All that he needed would be just a notice from them prior to the return. She deemed these words of Yau Tai Kay a commitment of a life tenancy, based on which she applied for the M.O.T permit from the then South District Office and re-built the dwelling house in brick. The re-building had cost her a lot of money and some of the money was loaned from friends and relatives. Had they not been granted a life tenancy, they would never wish to spend a great sum of money to re-build the dwelling house in brick. She agreed that in early 1990s, they were paid off by the Government to give up pig rearing and now she grows some banana trees on the land for self consumption. She keeps a few number of chickens in one of the derelict pigsties also for own consumption purpose as Government do not allow large scale chickens raising (or pigs rearing) in Tseng Lan Shu any more.

The Tribunal is a bit dismayed at Au Hop's testimony. Her replies to the Applicant's counsel are on a number of occasions ambiguous and equivocal. Her replies given when crossed-examined do not help her case. These could in part be due to her bad memory as she is quite senior in age, and in part because it is a matter dating back to 40 years ago. In fact, she did not handle most of the tenancy matters personally. Instead of giving the first hand information, she was very often quoting what she learned from her husband,. She does seem to be a co-tenant of the Subject Land as she held the M.O.T. permit. If she was not one of the co-tenants, the then South District Office would not have issued the M.O.T. permit to her. The permit issued in respect of the land leased by AW(4)'s mother was issued also in the name of AW(4)'s mother. The CR101 Notice issued to both Yip Kong and Mrs. Yip (i.e. Au Hop) was not, as the Applicant explained, a careless mistake. It shows the Applicant's perception in his subconscious mind. Needless to doubt the exactness and truthfulness of the landlord's words (to Yip Kong) quoted by Au Hop, there did not appear a commitment on the grant of a life tenancy on the face of the words. The landlord's intention concerning the tenancy term was indeed dubious. He might have meant granting a very long term to the couple in his words when he talked to the couple. As distinct from U.K. where private land are mostly freehold, 99% of the Hong Kong privately owned land are leasehold. A life tenancy could very often equate to the entire length of the leasehold interest. Was the landlord aware of this? In fact, according to paragraph 5.003, Woodfall Landlord & Tenant, Release 56 Thomson Sweet & Maxwell, tenancy for more than 3 years must be by Deed. This is further supported by S.6 of the Conveyancing and Property Ordinance cited by the Applicant's counsel. In the absence of a clear-cut indication on the term, the remedy is to ascertain it by making reference to collateral matters elsewhere in the agreement. Since the rent is paid yearly, it is reasonable to deem it a yearly tenancy (see paragraph 5.075 of Woodfall Landlord & Tenant, Release 56 Thomson Sweet & Maxwell).

Further Analysis

6. Up to this point in the judgement, the outstanding issues to tackle are (a) what the primary user of the Subject Land is, (b) the effect of Yip Kong's death, and (c) the validity of the CR101 Notice. In regard to (a), the Tribunal considers that reference should be made to S.116(2) and particularly sub-section 2(ba) of the Ordinance. The Tribunal agrees that S.115A is also relevant. The original user of the Subject Land was primarily agriculture with a dwelling. Such mixed usage fits neatly with S.116(2)(ba) and therefore, will render the tenancy to be excluded from Part IV. It was not the case in the early 1990s. The Subject Land was used for pure domestic purpose after the cessation of pig farming. The keeping of a few chickens and banana trees (even if there are) on some part of the Subject Land is not a substantial agricultural user. Such usage of the Subject Land has not materially altered the domestic user of the Subject Land since the early 1990s. Therefore, the tenancy no longer comes under S.116(2)(ba). As to the relevant date to determine the primary user of the Subject Land, the Tribunal accepts that the decision made in Leung Sau-han v. Chan Loy-fat [1980] HKLR 508, Bewley J does provide the useful guidance.

7. In regard to (b), the Tribunal does not consider that the death of Yip Kong poses any problems as the Tribunal accepts that Au Hop is the co-tenant. There is no need to bother any more with Au Hop status after the death of Yip Kong and S.116(5) of the Ordinance does not come into play. Following on from this, the CR101 addressed to both Yip Kong and Mrs. Yip is in order and valid.

Other Authorities Cited and the Relevance

8. Both counsels have cited a wealth of authorities to back up their arguments. These are Sevenoaks, Maidstone and Tunbridge Railways Co. v. Chatham and Dover Railway Co. [1879]11 Ch.D 625,635 and Doe d. Warner v. Browne [1807] 8 East.165 cited by the Applicant's counsel. The Tribunal has some doubt for their strict relevance to the subject case, but since the Tribunal does not accept that there was a life tenancy between the Applicant and the Respondents, there does not appear to be a need to go into the details of these two cases. The Hong Kong Tenancy Law, by Malcolm Merry, Page 52 on the doctrine of estoppel also needs not be referred to since the Respondents have not really questioned Yau Tai Kay's title to the Subject Land in 1960s. Another case cited by the same counsel is Attorney General v. Melhado Investment Ltd. [1983] HKLR327, in which the Court of Appeal ruled that the user of land in the Schedule to the Crown Lease was descriptive. This decision is not relevant to the subject application as the permitted user of the Subject Land is not in dispute.

9. The Respondents' counsel has cited Mak Ping Tong & Anor v. Leung Wong May [1997] 4 HKC452 and Choi Lai Kam v. Tang Kam Choi (HCA 4156/1997) to support the argument that agricultural tenancy does not come within Part VI of the Ordinance. The Tribunal does not find these two cases relevant to the subject application, in which the user of the Subject Land has changed to domestic. The same counsel has also cited Dillwyn v. Liewellyn 91982), Ramsden v. Dyson (1886) LR 1 HL 129 and Plimmer v. Wellington Corporation (1883) and Inwards v. Baker (1965) to justify the claim of proprietary interest and therefore an estoppel against the the Applicant. The Tribunal is not prepared to go into the details of these two cases. As advised the counsel in the pre-trial hearing, the Tribunal does not have the judicial power under the Lands Tribunal Ordinance to make such declaration.

Conclusion

(b) The Respondents were also unable to prove their case. The Landlord's words to Yip Kong in 1962 did not amount to the grant of a life tenancy. It is true that he was not explicit regarding the term. Based on the wordings and the undisputed mode of rent payment, the Tribunal considers that it is a yearly tenancy.

(c) The Applicant considered that his late father, Yau Tai Kay, was the Respondents' landlord. The other three witnesses of the Applicant gave the same suggestion. Au Hop, the surviving Respondent, did not give an unequivocal answer but the Respondents' cheques issued to Yau Tai Kay in the past few years do serve as the good evidence to confirm Yau Tai Kay's landlord identity since some long time ago if not since 1962. In fact, whoever was the Respondents' landlord before the Applicant took up the title of the Subject Land is not of paramount importance. It does not affect the Applicant's right now to sue for taking back the possession of the Subject Land.

(d) The Tribunal is convinced that Au Hop and her husband have been the co-tenants of the Subject Land since 1962 by virtue of the M.O.T. permit and the manner the CR101 Notice was addressed. Despite Yip Kong's death, there remains a surviving tenant to hold the tenancy.

(e) The Subject Land was leased with the benefit a dwelling house not in good shape leading to the Respondents re-building the house two/three years later. This was disclosed in the second Respondent's testimony. She said that a premium was paid to the last tenant (a Mrs. Chan) of the Subject Land for taking over the use of the dwelling structure from her (Mrs. Chan). The Subject Land therefore was not leased in 1962 for pure agricultural purpose but with a dwelling house. Even if it were deemed leased for pure agricultural purpose in 1962, the user permitted under the tenancy was changed from pure agricultural purpose to the dual purposes of agriculture (pig farming and raising a small number of chickens ) and dwelling by virtue of the M.O.T. permit issued in 1965. The user of the Subject Land was further changed in the early 1990s to mainly domestic purpose when the government implemented its environmental protection policy (to ban all commercial poultry and pig farming). The small scale of agricultural activities now (or perhaps some years earlier) on the Subject Land as per photographs on Page 149A of Exhibit AR2 has not altered the domestic user since early 1990s. Therefore, S.116 (2) (ba) of the Ordinance does not apply.

11. That being the case, the Tribunal does not have any alternative but to order that the tenancy of the Respondents is determined at the date specified on the second CR101 Notice served by the Applicant on 3rd July 2003. Au Hop, the surviving Respondent has to return the Subject Land to the Applicant (although she should be given ample time to make the necessary arrangements to remove). She has to quit, too, in the twilight of her life, the nice looking and tidy bungalow built 40 years ago and rebuilt some time thereafter, and at which she has spent the major part of her life with her late husband and kids. She will face the bills of substantial legal costs not just from her own counsel and solicitor but also those of the other party. Before these anticipated miseries that will happen to Au Hop, it is indeed a hard decision for the Tribunal to make but notwithstanding these anticipated miseries, it must be made as such. As the Applicant has overtly and solemnly declared in open court, he has no intention to develop the Subject Land and he does not want to take it back. All that he wants is a written tenancy agreement to make everything crystal-clear to avert future dispute with the Respondents. He might at any time afterwards consider to favour Au Hop, the surviving Respondent, a tenancy so that the Subject Land will be put to some good use again. Of course, with the Tribunal's order to take back the possession of the subject Land, he is entirely at liberty not to do it this way. Time will then enable everyone to judge whether he can stand by his declaration that he does not want to take back the Subject Land for development.

Orders

12. The Tribunal hereby orders that:-

(a) the tenancy between the Applicant and the Respondents terminates on 31st October 2003;

(b) the Respondents shall quit and deliver up vacant possession of the Subject Land and the structures thereon within six months from the date hereof;

(c) the Respondents do pay the Applicant the rent/mesne profits from 1st September 2003 up to the date vacant possession of the Subject Land together with the existing structures thereon is delivered to the Applicant at the rate of $ 2,500 per annum; and

(d) the Respondents do pay the costs of this application to the Applicant certified fit for counsels, which, if not agreed, shall be taxed at District Court Scale.