DIANA GEMING FU v. KEENDIC INDUSTRIAL LTD

LDNT138/2003

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Application No.: LDNT No. 138 of 2003

______________

JUDGMENT

______________

Background

1. The Applicant is the tenant and the Respondent the landlord of the subject premises known as 38C Kennedy Road, Ground Floor, Hong Kong ("the Premises"). By a tenancy agreement dated 12 September 1996 made between the Respondent's predecessor in title and the Applicant, the Premises was let by the Respondent's predecessor in title to the Applicant for domestic purposes for a term of 2 years from 1 November 1996 to 31 October 1998 at the rent of $20,000 per month, exclusive of rates and all other outgoings. By an Assignment dated 10 December 1997, the Premises was assigned to the Respondent subject to and with the benefit of the tenancy thereof. Since Part IV of the Landlord and Tenant (Consolidation) Ordinance, Cap. 7 ("the Ordinance") applied to the tenancy of the Premises, the tenancy continued by virtue of the Ordinance upon the expiry of the said Tenancy Agreement on 31 October 1998. Then, following a previous application made by the Respondent for a new tenancy, the Lands Tribunal ordered on 25 March 2002 the following: "(1) New Tenancy in respect of the premises known as 38C Kennedy Road, Ground Floor, Hong Kong be granted for 2 years commencing from 01/06/2001 at $20,000 per month exclusive of management fees and rates, and other terms remain the same as in the current tenancy; and (2) There be no order as to costs."

2. By a Form CR101 dated 22 November 2002; the Respondent notified the Applicant that the tenancy of the Premises would be terminated on 31 May 2003. In response to the said Form CR101, the Applicant notified the Respondent by the service of a Form CR102 dated 19 January 2003 that she would not give up possession of the Premises and intended to apply to the Lands Tribunal for the grant of a new tenancy. There was no dispute between the Applicant and the Respondent regarding the service of the said Form CR101 and the Form CR102.

3. However, despite of the said Form CR102, the Applicant did not apply to the Lands Tribunal for the grant of a new tenancy relating to the said Premises before 31 May 2003, the date of termination of tenancy as stated in the said Form CR101. The Applicant in fact applied by Form 22 dated 18 September 2003 to the Lands Tribunal for the granting of a new tenancy and for the determination of the prevailing market rent. The Respondent filed a Notice of Opposition (Form 7) on 30 September 2003 opposing the Applicant's new tenancy application on the ground that the tenancy of the Premises had been duly terminated on 31 May 2003. Since the Applicant did not apply to the Lands Tribunal before 31 May 2003, submitted the Respondent, the Lands Tribunal simply did not have any jurisdiction to grant a new tenancy to the Applicant. Therefore, the Applicant's application for new tenancy should not be entertained but should be dismissed with costs.

4. During the hearing, I informed the parties that I would deal with the Respondent's opposition first. If the Respondent's opposition to the Applicant's application for new tenancy were successful, there would not be any need to consider the terms of the new tenancy.

The Respondent's submission

5. In the hearing held on 17 October 2003, Mr. Luk of Messrs. Leung, Chan & Pang, the solicitors for the Respondent submitted that the Ordinance had been amended in December 2002, shortly after the date of the Form CR101 in the present case. The amendments were effected by the Landlord And Tenant (Consolidation) (Amendment) Ordinance 2002 ("Amendment Ordinance"), which was approved by the legislature and came into operation on 27 December 2002. He further submitted that although the new sub-section (4) of the amended Section 119D of the Ordinance (as added by Section 16 of the Amendment Ordinance) provided discretionary power to the Lands Tribunal which might for good cause entertain a new tenancy application made by a tenant under Section 117(1) of the Ordinance notwithstanding that the application was made after the current tenancy had been terminated in accordance with Part IV of the Ordinance, this amended Section 119D had no application in this case. This was because the amendments to Section 119D did not affect the laws and procedures relating to a Form CR101 given before the commencement of the Amendment Ordinance. Also, this new discretionary power of the amended Section 119D was absent in the Ordinance, before its latest amendment in December 2002.

6. Mr. Luk submitted that before the commencement of the Amendment Ordinance, the old mechanism as stated in the previous Sections 119 and 119D of the old Ordinance applied. And, only after the commencement of the Amendment Ordinance, the new mechanism as stated in the amended Sections 119 and 119D began to apply.

7. Section 144 of the amended Ordinance (newly added by Section 39 of the Amendment Ordinance) expressly provided that the old Section 119 would continue to apply to a notice given before the commencement of Section 12 of the Amendment Ordinance (which has amended Section 119 of the old Ordinance) as if that Section 12 had never been commenced.

8. On the other hand, the Amendment Ordinance was silent as to whether Section 16 of the Amendment Ordinance (which amended Section 119D of the old Ordinance and included the introduction of the new sub-section (4) that gave discretionary power to the Lands Tribunal for extension of time) took effect in relation to a notice given before the commencement of the Ordinance. However, Mr. Luk submitted that it would be unfair and illogical that Section 16 of the Amendment Ordinance should take effect in relation to a notice given before the commencement of the Amendment Ordinance. In the normal circumstances, unless expressly provided, an amendment to an Ordinance should not have any retrospective effect.

9. Mr. Luk therefore concluded that it was "not the Legislature's intention to change the procedures and laws relating to a Form CR101 which was given before the commencement of the Ordinance. The Amendment Ordinance does expressly provide that the amendment does not affect such Form CR101 but its true intention is that the amendment does not affect the old mechanism started by such Form CR101."

10. Mr. Luk went further and submitted that if the old mechanism under the original Section 119D of the Ordinance applied in this case, it was well settled law that the Lands Tribunal did not have any discretionary power to entertain an application made after the current tenancy has terminated. Even if the Lands Tribunal did not agree with the above submission, the Respondent also submitted that the Applicant failed to satisfy the test that she had good cause to apply for leave to extend the time concerned in order to comply with the requirements of subsections (3) of Section 119D of the Ordinance.

The Applicant's submission

11. The Applicant submitted that she did not understand law and the arguments behind Mr. Luk's submissions. As a tenant of over 18 years, she submitted that she should be entitled to a renewal of her tenancy of the Premises. She sought leave from the Tribunal, if this was needed, to allow her to proceed with her application for a "new" tenancy of the Premises although she did not understand why the renewal was called a new tenancy under the Ordinance.

12. She concentrated her evidence and submission on why the Tribunal should grant leave to her for the extension of time on the ground that she had overwhelming good cause. She said that she was away from Hong Kong and stayed in the United States for most of the time in 2003 because of family problems, caused by two tragic and untimely deaths of his brother and uncle respectively, and the illness of her mother of 96 years old. She admitted that she was late in the filing of the new tenancy application. However, she said that she had been misled by the response given by the Respondent's representative, Mr. Kung over the telephone conversation. All along, she did not know that the Respondent was objecting to her renewal of tenancy. All Mr. Kung had asked her for was the payment of rental deposit, for which she refused as she had already paid the deposit sum to the predecessor landlord in title. The Tribunal's order made in 2002 also did not stipulate any requirement by the Applicant to pay any rental deposit.

The issues of this case

13. The Applicant submitted that the Tribunal had the jurisdiction to grant leave for her to apply for a new tenancy under the Ordinance. She admitted that she was late but she did not apply by way of an originating summons to extend the time to allow her to file her application. The Applicant's procedure by itself was wrong. The Tribunal could not entertain such an application as part of the proceedings of the new tenancy application when the Tribunal heard the case on 22 October 2003. However, since both parties concentrated on the analysis of the provisions of the Ordinance before and after the latest amendments in December 2002, whether the amended provisions applied to the present case and whether the Applicant had good cause, I will also cover these matters below.

14. Mr. Luk has identified the basic issue of this case in his submission. That is, whether the new sub-section (4) of the amended Section 119D of the Ordinance (as added by Section 16 of the Amendment Ordinance), which provides discretionary power to the Lands Tribunal, which may for good cause entertain a new tenancy application made by the Applicant under Section 117(1) of the Ordinance notwithstanding that the application was made after the current tenancy has terminated in accordance with Part IV of the Ordinance, applies to this case.

15. Following the above, the Tribunal next has to ask whether, in case the old Section 119 and 119D of the Ordinance still apply to the present case, the Tribunal has any jurisdiction to consider the Applicant's application for leave to extend the time for her to comply with the requirements of subsection (3) of Section 119 D of the old Ordinance.

The old and the amended provisions of the Ordinance relating to the application for a new tenancy

16. On 27 December 2002, the Amendment Ordinance came into operation. The provisions of the amended Section 119D (Order by Tribunal for grant of a new tenancy) of the Ordinance after incorporating the amendments are as follows:

"	(1)	Subject to section 119G, on an application under section 117(1) the Tribunal shall make an order for the grant of a new tenancy.
	(2)	...
	(3)	(a) Subject to subsection (4), no application under section 117(1) shall be entertained if it is made- (Amended 32 of 2002 s.16)
			(i) ...
			(ii) (Repealed 32 of 2002 s.16)
			(iii) after the current tenancy has terminated in accordance with this Part
		(b)	(Repealed 32 of 2002 s.16)
	(4)	The Tribunal may for good cause entertain an application under section 117(1) notwithstanding that subsection (2) or (3) has not been complied with in respect of the application. (Added 32 of 2002 s.16)"

17. Therefore, before the amendment of the Ordinance in December 2002, there was no sub-section (4) in Section 119D of the Ordinance. The old sub-section (3) of the old Section 119D of the Ordinance reads as follows:

"	(3)	(a)	No application under section 117(1) shall be entertained if it is made-
			(i) ...
			(ii) ...
			(iii) after the current tenancy has terminated in accordance with this Part
		(b)	..."

18. I have considered and agreed with Mr. Luk regarding his analysis and conclusion of the Legislature's intention that the new sub-section (4) of Section 119D of the Ordinance did not affect the old mechanism of any new tenancy application that started off before the coming into force of the Amendment Ordinance on 27 December 2002. Therefore, the old mechanism of the original Ordinance applies to the present case, as it was initiated by the service of Form CR101 on 22 November 2002 by the Respondent under Section 119 of the Ordinance.

Previous decision of the Court of Appeal applicable to this case

19. I have decided above that since the action of the parties in this case, initiated with the service of Form CR101 by the Respondent on 22 November 2002, commenced before the coming into force of the Amendment Ordinance, the old provisions of Section 119D should apply.

20. If the old provisions of the Ordinance applies, it is settled law that an application for new tenancy by the tenant must be made before the vital date, i.e. the date of termination of the current tenancy. In Ram Isardas Mahtani v Wong Kwok-tai [1989] 2 HKLR 296, the Court of Appeal with Power, J.A. dissenting, allowed an appeal from the decision of the Lands Tribunal ordering the landlord to grant a new tenancy. In that case, the tenant's application for a new tenancy was out of time, and the only issue in the appeal was whether there was jurisdiction to extend the time for making such an application. It was held by the majority of the Court that

"1. Following Sin Hua Trust, Savings & Commercial Bank Ltd. v. Ng yee-may (unreported, Civil Appeal No. 137 of 1985). Section 10(2)(d) (of the Lands Tribunal Ordinance) provide no assistance to a tenant who had allowed the date of termination to pass before he made his application to the Tribunal, because by that time he had ceased to be a tenant and had no locus standi to ask for a renewal.

2. A step in proceedings meant a step in proceedings already in existence and did not include the act which initiated the proceedings themselves."

Conclusion

21. Therefore, it follows from the above that there is no power for this Tribunal to extend the time in order to allow the Applicant to make her new tenancy application under Section 117(1) of the Ordinance. Because of this, it is not even necessary for the Tribunal to consider whether there is good cause, on the part of the Applicant. In the circumstances, the Applicant's application for the new tenancy of the suit premises has to be dismissed.

Orders

1.	Application for new tenancy by the Applicant dismissed;
2.	Cost order nisi that there be no order as to costs; if there is no further application in relation to costs within 14 days the costs order nisi shall become absolute.