Pang Kwok Leung and Another v. Hung Pui Kan

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

LDPE 406/2001

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Reasons For Decisions

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1. The applicants' application for possession of the suit premises on ground of non-payment of rent and for payment of rent was dismissed by Mr. Lo. The first ground for dismissal was that the applicants failed to establish their title as an owner or as the owner's principal tenant (paras. 17, 18 &19, of the judgment of Mr. Lo). The second ground for dismissal was that, on the admission of the applicants, the agreement between the parties is in that nature of a license and therefore this Tribunal has no jurisdiction to entertain the claim. The applicants are now seeking a review raising for the first time the argument that tenant is estopped from denying the landlord's title.

2. Before parties proceeded to argue on the merits of the review, the respondent raised the jurisdiction point. It was argued that the applicants could not now raise in this review a point which had not been raised at the trial. Mr. Chu, Counsel for the respondent, argued that as the tribunal had not made any decision on this point there was no decision to review and cited in support the Court of Appeal case of China Light & Power V Commissioner for Rating & Valuation. (Civil Appeal Nos. 83,101&167 of 1994). That case merely stated the principle that this Tribunal is not entitled in the review to vary his reasons for decision given at the trial as if those reasons had not been given. As a consequence, the Court of Appeal will look at the reasons for decision given both at the trial and the review. That case did not decide that this Tribunal cannot permit a new point to be taken on review under appropriate circumstances. It was made clear in that case that this Tribunal can vary, reverse, etc. of the order made at the trial. It was the ultimate decision given at the review that matters and the Court of Appeal in determining its correctness or otherwise is entitled to look at the reasons both at the trial and at the review. The decision by Mr. Lo is to dismiss the claim and it is of this decision that the applicants are applying for review. They are entitled so to do and this Tribunal has the jurisdiction to review the order for dismissal in the light of the new point..

3. Mr. Chu also argued that even if the Tribunal has the jurisdiction to review its decision on the new ground, it should not do so as the Respondent would suffer prejudice especially the applicants allegedly admitted that they were claiming licensee fees. This alleged admission was one of law and was made towards the end of trial. If this review necessitated the withdrawal of this admission, we would certainly have allowed it. We could not see, nor were we told, any prejudice which cannot be compensated by appropriate costs order and directions. Furthermore the procedures and practices in this Tribunal are informal and have always been so. The strict rules of pleadings do not apply. As long as the factual issues are clear from the pleadings or from the statements or from what parties had said, and parties are aware what case they have to prove or meet, this Tribunal will not in every case require parties to formulate the legal issues clearly in the pleadings, especially when they are not legally represented. Very often a respondent has no idea that his version of facts entitles him to a defence in law. Likewise an applicant might not be able to raise a true cause of action. In appropriate cases, if not in all cases, the Tribunal will raise and formulate the legal issue on its own motion to enable the parties an opportunity to deal with it. In the instant case, the applicants were not legally represented but the respondent was. In the interests of justice we allowed the Applicants to raise the new point at the review. We also allowed the applicants to re-open their case by calling further evidence.

4. At the adjourned hearing, Mr. Lo was in the middle of his sick leave and parties agreed that the review hearing could be carried on by me sitting alone. The further evidence related to the state of mind of the first applicant when he acquired the premises. The document is not a formal one which is not unusual for similar transactions at those times in the New Territories. However it was clear that he was aware that there was such practice of registering title documents. In short he chose not to because he trusted the vendor which he had known for quite some time. From evidence I have heard, I draw the conclusion that the first applicant and the second applicant for that matter, believed that they had some sort of title to the property. They must have so believed or they would not have paid such substantial amount for it and parted possession of it when letting it to the respondent. This point is not relevant to question of tenancy by estoppel. (see: Li Wing-sun V Wu Man (1978( HKLR 575 at 576) nor to the point of illegality.

5. In the notice of opposition, the respondent in fact clearly admitted in the first paragraph that he was the tenant of the applicants but contended the tenancy agreement was unlawful and therefore void ab initio. In the second paragraph he gave his reasons for stopping to pay the rent. In that he contended that the applicants cannot prove that they are owner or the principal tenant of the owner. This contention must have confused Mr. Lo who dealt at length these points referring to the definitive sections of the Landlord and Tenant (Consolidation) Ordinance. Mr. Chu, in his closing submission at the trial, did not make his stance clearly although he did not submit in so many words as that the applicants were not a landlord within the meaning of the Landlord and Tenant(Consolidated) Ordinance (Cap7). Apparently the state of pleading and the ambiguous stance of Mr. Chu misled Mr. Lo into the approach he adopted in arriving at his decision. In fact the landlord and tenant relationship should not be in issue at the trial. Mr. Lo in fact did not need to refer to the definition of landlord in the Landlord and Tenant Ordinance (Cap 7). Even without the documentary evidence, the admission of which the respondent was able to resist at the trial, the undisputed facts permit only one conclusion that there has been a tenancy by estoppel. The sole defence the respondent is able to raise at the trial and at this review is illegality.

6. Mr. Chan for the applicants submitted an analysis on tenancy by estoppel and Mr. Chu has no quarry with it. Mr. Chu merely maintained his earlier submission on the point of illegality. The relief sought by the applicants can be looked at in two parts. Firstly they are asking for payment of rent and secondly for recovery of possession.

7. Sections 4 and 6 of the Land (Miscellaneous Provisions) Ordinance (Cap 28) respectively prohibit the occupation of unleased government land and the erection of structures on it. Similar provisions in former ordinances concerning occupation of government land which were repealed were held to be for the benefit of public at large in Fung Siu Kam V Lo Shun Cheung (1984( HKC 107. I cannot see any reasons why that case should not be followed and accordingly I hold that sections 4 and 6 of the Land (Miscellaneous Povisions)Ordinance are for the benefit of the public at large. As a consequence the tenancy agreement which offends against these sections is not enforceable. In that case the Court of Appeal held that the licensee of Crown Land was unable to sue his tenant for rent. In my judgment of the instant case cannot be distinguished and the applicants' claim for arrears of rent must fail.

8. As to the claim for possession, in order to confer jurisdiction on this Tribunal the applicants must frame their cause of action upon an alleged forfeiture and therefore must rely on the illegal tenancy agreement. For the same reasons as their claim for arrears of rent, they must fail (see the view expressed in Fung Siu Kam V Lo Shun Cheung at p112 ). In the same case the Court of Appeal held that the plaintiff could maintain his claim for possession by virtue of being a Crown licensee. To put the record straight I express no view whether the applicants can maintain their claim for possession on this or other similar grounds.

9. For all these reasons I order that the order of dismissal of the claim by the applicants to stand. Mr. Chu asked for costs on an indemnity basis. In view of all circumstances so far made known to me, I do not think it proper to make such order. At the present stage, I am of the view that costs on party to party basis with certificate for counsel and on High Court Scale is appropriate. Therefore I make an order nisi for costs in these terms in favour of the respondent. The respondent made known to me voluntarily when giving evidence that he had made payment in and I now make an order nisi for payment out to him. Both nisi orders are to be made absolute in six weeks.