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CACV000147/1990
| IN THE COURT OF APPEAL |
1990, No. 147
(Civil) |
BETWEEN
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LEUNG SUK FONG |
Applicant
(Appellant) |
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AND
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CHAN CHING WAH |
Respondent
(Respondent) |
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Coram: Yang CJ and Mortimer and Bokhary, JJ
Date of hearing: 7 December 1990
Date of delivery of judgment: 7 December 1990
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JUDGMENT
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Yang CJ :
1. I will ask Bokhary J to give the first judgment.
Bokhary J:
2. This appeal concerns possession of a flat in Causeway Bay, namely Flat C on the 4th floor of Prospect Mansion at 66-72 Paterson Street. The flat was acquired by the appellant landlord on September 29, 1988. She acquired it with a sitting tenant. The respondent is that tenant, paying $3,300.00 per month by way of rent inclusive of rates. It would seem that the tenant resides there with her husband, their 2 children and a godchild of hers.
3. On January 5 this year, the landlord took out an application under section 53(2)(b) of the Landlord and Tenant (Consolidation) Ordinance, Cap. 7, seeking possession of the flat on the ground that it is reasonably required by her as a residence for herself along with her husband and their 2 children. She did so by a notice of application in conformity with the requirements as to form of the relevant rules.
4. On May 15 this year, she obtained judgment for possession from the Deputy Registrar of the Lands Tribunal in the absence of the tenant, who had not filed any notice of opposition. The Deputy Registrar had, of course, to be satisfied of her reasonable requirement; but his satisfaction here was achieved ex parte.
5. On August 28 this year, the tenant took out a summons seeking the setting-aside of the judgment for possession.
6. Her affirmation in support, which is also dated August 28 this year, reads as follows:-
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"I would like to object the writ of possession, reasons as follows:-
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(1) |
Never receive any notice or orders that we need to attend to the court for any objections.
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(2) |
Never receive any documents of May 15, 1990 regarding the result has been out.
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(3) |
I am a good Hong Kong citizen and do submit monthly rents to applicant's solicitor.
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(4) |
I have been staying in this house for thirty years, never owe rents, I have all supporting documents between the communication with applicant's solicitor.
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(5) |
The landlord did once ask for rent increase on May 89, I at that time object for such unreasonable percentage, then afterwards they did not mention anymore.
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(6) |
During my entire stay in this house, never have any agreement with landlord.
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(7) |
This house not just occupied by me, but also my husband, my son, my daughter and my god-daughter." |
The lady was in person throughout the proceedings below; and her affirmation was not prepared by a solicitor. It would appear that she had some help in the preparation of it by a member of her family, perhaps her daughter.
7. The application to set aside was heard in chambers on September 3 this year by H.H. Judge Henry Wong sitting as a President of the Lands Tribunal. By his Order made that day, he set aside the judgment for possession and the writ of possession flowing therefrom, and gave the respondent 14 days to file a notice of opposition.
8. The appeal before us is from that Order of His Honour's. The appellant asks us to set it aside and restore the judgment and writ.
9. Looking at the note which His Honour kept of the application, his reasons ran thus:-
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"Applicant became owner of the suit premises on 29.9.1988 and obtained an order of possession of those premises from Deputy Registrar on 15.5.1990 in default of opposition from Respondent. The Respondent has resided at the suit premises for 30 years and ought, in the interests of justice, and the circumstances of the case be given an opportunity to defend the action." |
10. According to the note kept by then counsel for the landlord, His Honour said this in giving his decision:-
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"I found your story difficult to believe but I give you the benefit of the doubt. The judgment is set aside. The respondent is to file a notice of opposition within 14 days." |
That note having been placed before His Honour by the landlord's solicitors for his approval, he replied through his clerk that:-
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"This remark might have been made orally before the order was announced." |
11. The grounds of appeal are four in number; and it will be convenient to read them out. As they appear in the amended notice of appeal, they run thus:-
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"
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(1) |
The learned Judge was wrong in law in setting aside the judgment for possession and writ of Possession by holding that even though the respondent's story was difficult to believe but that he would give her the benefit of the doubt.
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(2) |
Further or in the alternative, the learned Judge was wrong in law in setting aside the judgment for possession and writ of possession by holding that the respondent has resided at the suit Premises for 30 years and ought, in the interests of justice, and the circumstances of the case be given an opportunity to defend the action.
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(3) |
The learned Judge erred in law in failing to consider the fact that the respondent has not satisfied the Court that she had a reasonable excuse for failing to take any steps to defend the application of the applicant.
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(4) |
The learned Judge erred in law in failing to consider the fact that the respondent had not satisfied the Court that she would have a reasonable prospect of successfully defending the application of the applicant if the judgment for possession were to be set aside." |
12. The approach of the Courts to the setting-aside of judgments obtained in default or in the absence of the party against whom it is given is summarised in note 13./9/14 at p.138 of the 1991 Supreme Court Practice where this appears:-
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"The discretionary power to set aside a default judgment which has been entered regularly is unconditional, and the court should not lay down rigid rules which deprive it of jurisdiction. The purpose of the discretionary power is to avoid the injustice which may be caused if judgment follows automatically on default. The primary consideration in exercising the discretion is whether the defendant has merits to which the court should pay heed, not as a. rule of law but as a matter of common sense, since there is no point in setting aside a judgment if the defendant has no defence, and because, if the defendant can show merits, the court will not prima facie desire to let a judgment pass on which there has been no proper adjudication. Also as a matter of common sense the court will take into account the explanation of the defendant as to how the default occurred." |
13. The primary consideration being whether the party seeking the setting-aside has merits, I turn now to how a claim like the present one can be defeated on the merits. First of all, a tenant could contest the genuiness or reasonableness of the landlord's professed requirement. Failing, or in the absence of, such a challenge the tenant would have to rely on proviso (i) to section 53(2)(b) of the Landlord and Tenant (Consolidation) Ordinance and seek to satisfy the tribunal that in all the circumstances of the case it would manifestly not be just and equitable to make an order for possession.
14. With all that in mind, I turn now to consider the rival arguments advanced before us.
15. First of all, it is said that the learned Judge misunderstood and msiapplied the onus on the setting-aside application. In my view he has not done anything of the sort. It is possible to imagine a more happy way in which he could have expressed his conclusions; but at the end of the day there is no foundation for the fear that he might have got the burden of proof wrong. It seems to me that the worst that the learned Judge can be said to have done is to express himself in, perhaps, an unhappy way. In substance what he seems to have said to himself - and then to the parties before him - was that the applicant's story about not receiving any notice was a rather odd one, but - when all things were considered and perhaps bearing in mind his natural reluctance to allow matters to go in default - he had finally come to the conclusion that what she said was probably true. In that he would be supported by this inherent consideration : there was really no benefit to her in allowing, judgment to go by default, unless one were to ascribe to her as something quite so Machiavellian as a scheme to add a little bit of delay to the proceedings by allowing judgment to go by default and then getting everything set aside. That sort of motive being attributed to the tenant would be without sufficient foundation.
16. Furthermore, one must remember that the learned Judge would have a discretion to set aside the ex parte judgment even if he was not satisfied with the story - so to describe it – told to him by the respondent. Reference was made to the decision of the Court of Appeal in England in the The Saudi Eagle [1986]2 Lloyd's Rep.221. In that case, the Court of Appeal did not decide the matter against the applicant simply on the basis of want of a proper explanation for allowing judgment to go by default. The decision turned on other matters. Notwithstanding that the defendant was a commercial organisation, the Court of Appeal was not prepared to dismiss its application to set aside simply on the basis that - as had happened - it had deliberately allowed judgment to go against it by default, believing that no judgment against it could be executed for the reason that it had no assets, forgetting that a bond had been given.
17. Now when it comes to a defence on the merits here, the shortest answer may be this: If the learned Judge took the view - and he did - that the tenant's failure to put in a notice of notice of opposition was to be, as it were, forgiven so that she should be allowed to participate in the proceedings, then she had to be put into the position which she would have been in at the outset. And at the outset she was quite entitled to put in a notice of opposition doing no more than putting the landlord to strict proof of her reasonable requirement of the premises. She could have simply said "It is not admitted that the premises are reasonably required". That would not have resulted in anything other than a trial at which the requirement would have had to be proved inter partes.
18. Secondly, the learned Judge - who after all would be dealing with these cases day in and day out and would have a good "feel" of such cases including the defences which can grow from apparently humble beginnings - had a litigant in person before him. It is true that counsel then appearing for the landlord made reference to the fact that it was for the tenant to show a reasonable defence. But there was no express challenge along the lines that what she had placed before the tribunal did not disclose a defence worthy of adjudication. Had that challenge been made, the learned Judge would not have been doing anything wrong - indeed he would have been doing the right thing - if he had pursued the matter with the litigant in person, probing further into it.
19. Looking at all the circumstance, high as the threshold may be on the "manifest injustice" defence, the learned Judge was entitled, in my judgment, to view that defence here - and it is not the only defence since a tenant can contest proceedings of this kind simply by challenging the professed reasonable requirement - as one worthy of inter partes adjudication.
20. Counsel for the appellant has cited the decision of this Court in Cheung Man Hing v. Chung Wai Man [1989] 2 HKLR 342 as illustrating the difficulty of making out the "manifest injustice" defence. The test is indeed a stringent one; but it is to be noted that this Court there dealt with the actual details with very great care. One cannot argue from the facts of one case to the facts of another. It is necessary to look at the circumstances of each case with care. There are real limits to the tribunal's ability simply to get ahold of the broad circumstances as they appear at an early stage and confidently predict inevitable doom for the person seeking to raise a "manifest injustice" defence in those broad circumstances. That is not to encourage frivolous defences. Rather it is to recognize that when you are dealing with the roof over people's heads - especially a roof which has been over their heads for some 30 years - you are dealing with a matter of very considerable consequence. These cases are not easy; and they require careful consideration.
21. Now the learned Judge said little in his ruling on the merits; and in that he must be right because his view was that there had to be a trial. That being so, he certainly would not wish to prejudice the trial by any preliminary observations on what the merits may or may not be. It is necessary in this Court to follow the same course. Therefore, for the reasons which I have indicated without going into any such detail as might prejudice the trial, I am of the view that the appeal must be dismissed and that the matter must be permitted to go to trial.
Yang CJ :
22. I agree with the judgment just delivered by Bokhary J. For the reasons which he has given, I too would dismiss the appeal.
Mortimer J :
23. I also agree and would also dismiss the appeal.
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[The tenant applied for costs which the landlord did not resist] |
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Yang CJ :
24. The appeal is dismissed with costs.
| (T.L. Yang) |
(J.B. Mortimer)
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(K. Bokhary)
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| Chief Justice |
Judge of the High Court |
Judge of the High Court |
Representation:
Mr K.C. Chan (instructed by Sammy S. Li & Co.) for the landlord, the Applicant (Appellant)
Mr Michael Y.M. Wong (instructed by Tsang, Chan & Wong) for the tenant, the Respondent (Respondent)
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