WINSTER DEVELOPMENT CO. LTD. v. PANG YIU CHANG, JOHN AND ANOTHER

IN THE COURT OF APPEAL

1992, No. 176
(Civil)

Headnote

Tenancy of domestic flat and carparking space - Protection under Part II Landlord and Tenant (Consolidation) Ordinance, Cap. 7 - Severance of reversion by sale of flat, landlord retaining carparking space.

Held (Court of Appeal, reversing District Judge): Severance of reversion does not have effect in law of terminating the protected tenancy - section 30 Conveyancing and Property Ordinance makes provision for apportioning rent - Jelly v. Buckman [1974]1 QB 488 (which construed similar provision in s.140(1) Law of Property Act 1925) followed.

Observations on use of Rule 27 District Court (Civil Procedure) Rules in circumstances where there are disputed facts.

Appeal allowed. Summary judgment set aside.

IN THE COURT OF APPEAL

1992, No. 176
(Civil)

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J U D G M E N T

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Litton, J.A.:

1. This is an appeal by the defendants against an Order for summary judgment given by His Honour Judge Cheung in the District Court whereby he ordered that possession of carparking space 111 at Hilltop, Cloudview Road, North Point be given to the plaintiff.

2. The plaintiff's case is that the first defendant was at all material times a trespasser unlawfully occupying the carparking space.

3. The first defendant's case is that he was at all material times a tenant protected in his right of possession by Part II of The Landlord and Tenant (Consolidation) Ordinance Cap. 7.

4. The facts which were accepted to be established for the purposes of the summary judgment proceedings can be briefly stated. (1) The first defendant was a tenant of Paul Y Land Investment Company Limited in respect of Flat H-6 and carparking space 111 between 1977 and August 1988. (2) Flat H-6 was sold by Paul Y to a company called Earnril Limited in August 1988 but Paul Y remained the owner of the reversion in relation to carparking space 111. (3) The plaintiffs have now become the owner of carparking space 111 by assignment from persons who purchased from Paul Y.

5. If, arguably, the first defendant's rights as tenant, protected under Part II Chapter 7, remain unaffected in law by the assignment of Flat H-6 to Earnril, it must follow that the plaintiff's action against the first defendant as a trespasser cannot stand.

6. The District Judge in his judgment p.5 said this:

"The tenancy of Flat H6 and the Carpark No. 111 could well be within Part II of Chapter 7 between the beginning of the letting in 1977 to August 1988. Between this period the carpark was let by Paul Y to the first defendant as part and parcel of the letting of the domestic flat."

Now if this proposition be correct those rights as tenant would continue unless lawfully terminated. The question then arises: Does the sale of the flat occupied by the first defendant as tenant, severed from the reversion of carparking space 111, have the effect in law of terminating the first defendant's tenancy in relation to the carpark? The answer seems to me to be NO. Section 30(1) of the Conveyancing and Property Ordinance makes provision for cases like this. Where there is a severance of the reversion it enables the two landlords to have the rent apportioned in consequence. Section 30(1) of the Conveyancing and Property Ordinance is in terms similar to section 140(1) of the Law Property Act 1925 which was considered by the Court of Appeal in Jelly v. Buckman (1974)QB 488, a case which I understand was also referred to the District Judge in the course of argument, but not cited in his judgment. Of course it has to be appreciated that the plaintiff in this case is not conceding factually that the first defendant acquired rights as tenant in relation to carparking space 111. They merely concede that upon the evidence on affidavit, the point has to be accepted for the purposes of the Rule 27 proceedings.

7. Nevertheless, this point having been reached, it must follow that the summary judgment entered in favour of the plaintiff cannot stand and the appeal must be allowed. I would add this observation: having regard to the volume of evidence put before the judge and the fact that there were background issues to be determined, these proceedings were inappropriate for the summary process under Rule 27 of the District Court (Civil Procedure) Rules.

8. I would accordingly allow the appeal, set aside the summary judgment ordered by the District Judge dated 16 September 1992 and dismiss the plaintiff's application under Rule 27 of the District Court (Civil Procedure) Rules for summary judgment.

Penlington, J.A.:

9. I also agree that this appeal should be granted and the application under Rule 27 be dismissed. By consent the costs of this appeal and the costs of the application for leave to appeal on the 15 October 1992 will be to the appellants in any event and there will be no order as to costs for the hearing before His Honour Judge Cheung on the 7 September 1992.

Sears, J.:

10. I also agree and would only add this. In Hong Kong the common practice is for flats and carpark spaces to be let together. If the landlord sells the reversion of carpark spaces separately and let the residential premises then the tenant's legal rights still continue and he is protected for his tenancy: that is, the flat and the carparking space. If the position were otherwise the protection given by The Landlord and Tenant (Consolidation) Ordinance would be frustrated. I also agree the procedure under Rule 27 was wholly inappropriate for this dispute.