PRICE EDMUND HUGH OWAIN v. NIELSON BO FRANK

LDPD 1186/2005

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Application No.: LDPD No. 1186 of 2005

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JUDGMENT

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Background

1.  The Applicant is the landlord and the Respondent the tenant of the suit premises known as Flat A, 4^th Floor and Car Parking Space No. 20 on Upper Ground Floor, Sakura Court, 58-60 Kennedy Road, Hong Kong (“the Premises”).  There is no dispute that the Applicant bought the Premises from the former landlord, Thai Shing Overseas Limited, who had entered into a written tenancy agreement dated 22 March 2003 with the Respondent for a term of 2 years commencing from 18 April 2003 at a rent of $29,000 per month, and that the Applicant has taken over the rights and liabilities as the new landlord after the completion of the assignment of the Premises on 29 December 2004.

2.  There is also no dispute between the parties on other facts of this application.  Pursuant to section 5(2) of the Landlord and Tenant (Consolidation) (Amendment) Ordinance 2003 (“Amendment Ordinance”), the Applicant served to the Respondent, prior to this application in the Lands Tribunal, a Transitional Termination Notice dated 18 April 2005 giving the latter a 12-months’ notice which will expire on 18 April 2006.  Subsequently, pursuant to section 7(1) of the same Amendment Ordinance, the Applicant filed on 6 May 2005 this application to the Tribunal for possession on the ground that “the suit premises are reasonably required by the applicant” as a residence for the Applicant and his girlfriend.  The Respondent filed a notice of opposition on 13 May 2005, stating that the Respondent required the Premises for the occupation of himself, his wife and 3 children and that “it would not be manifestly just and equitable” to make the order for possession before the expiry of the Transitional Notice dated 18^th April 2006.

The Respondent’s case

3. According to the Respondent, it would not be manifestly just and equitable for the Tribunal to make an order for possession on the ground of self occupation since (1) before the Applicant bought the Premises, he was fully aware of the fact that the Premises was subject to a tenancy which had commenced before 19 July 2004, the relevant date of the Amendment Ordinance, thus depriving the Respondent the benefit as a sitting tenant the enjoyment of the 12-months’ notice of termination that had to be given by any landlord for the termination of any tenancy created before 19 July 2004; (2) the Applicant, the tenant of another leased property which tenancy will only expire on 12 September 2005, does not reasonably require the Premises for occupation by himself and his household; and (3) the Respondent, after being seconded in December 2004 by his employer to work in Taicang, a port city just outside Shanghai, has since been commuting between Hong Kong and Taicang more or less on a weekly basis, which arrangement will likely be reviewed in 12 to 18 months’ time, hence it does not make sense to disrupt the education of the Respondent’s children by relocating them to a city in China at this time; and (4) the Applicant only first informed, by a letter dated 14 March 2005, the Respondent the desire to recover the Premises before the expiry of the duration of the Transitional Notice, the Respondent will have to spend time to relocate himself and his family to an alternative premises in Hong Kong for which he may only require for a short term period of less than 12 months, given the special circumstances relating to the Respondent’s current employment.

The Applicant’s case

4. On the other hand, the Applicant gave evidence that in December 2004, he bought the Premises with the intention to recover its possession for self occupation and occupation of his girlfriend, “a co-habitee and companion” since he decided that the then leased residence, with two bedrooms and a study room and with a gross floor area of approximately 1,300 sq. ft., was not adequate for their needs as their residence.  By comparison, the Premises has 3 bedrooms, a study room, a maid’s quarter and a larger gross floor area of 2,100 sq. ft.

5. Counsel for the Applicant submitted that since the Amendment Ordinance took away the previous requirement that before any landlord could oppose the granting of a new tenancy to the sitting tenant on the ground of self occupation and/or occupation by certain designated members of his family, one must have owned the said property for a period of not less than 12 months, it was obvious that the Respondent who only became the landlord of the suit Premises on 29 December 2004 would not be bound by this redundant requirement.  Similarly, although different sections of the Amendment Ordinance provide for the service of a 12 months’ Transitional Notice upon expiry of any domestic tenancy which had commenced before 19 July 2004 (i.e. section 5(2)) or the filing of an application for possession on the ground of self occupation (i.e. section 7(1)), it’s up to the Applicant as the landlord to decide which provision to opt for, upon expiry of the tenancy of the suit Premises.  Since the wordings of the two sections of the Amendment Ordinance are so clear, its plain meaning should be taken.  Therefore, the Applicant should not be deprived of his right to apply for possession on the ground of self-occupation even though firstly, he was aware of the existence of the tenancy between the former landlord and the Respondent and secondly, he had been the owner for only a few months at the time of his application to this Tribunal for possession.

6. Counsel for the Applicant submitted that it’s the Applicant’s position that the Applicant as the owner of the Premises at the time of filing this application to the Tribunal should always be allowed to occupy his own flat.  The need for the Applicant to possess the Premises arose and he therefore bought the Premises in December 2004 with an intention to apply for possession after expiry of the existing tenancy.  He submitted that given that the Respondent had been seconded to Mainland China, there might be inconvenience caused to the Respondent by the re-possession of the Premises but denied that it would not be manifestly just and equitable for the Tribunal to grant the possession order as sought by the Applicant.  Also, he drew the Tribunal’s attention that in the present case, there would not be the question of homelessness caused by the granting of a possession order as it was common ground that the Respondent has the financial capability to find an alternative accommodation.  Finally, he submitted that stay could be granted to the Respondent to September 2005 and that despite of the provision of section 119(R) of the Landlord and Tenant (Consolidation) Ordinance (Cap. 7) (“the Ordinance”) on costs, he asked for costs with certificate for counsel

The Law

7. Section 7(1) of the Amendment Ordinance provides,

“	(1)	During the continuance of a tenancy as described in section 5(7), the Tribunal may, on the application of the landlord, make an order for possession of the premises to which the tenancy relates, or any part of them, notwithstanding that a transitional notice in respect of the premises has not been served, or has been served but has not expired, if the Tribunal is satisfied that the premise are, or that that part of them is, reasonably required by the landlord for occupation as a residence for himself, his father, his mother or any son or daughter of his over the age of 18.
	(2)	The Tribunal shall not make an order for possession under subsection (1) if
		-(a)	in the case of a tenancy, the tenant satisfies the Tribunal that, in all the circumstances of the case, it would manifestly not be just and equitable to make the order; or ….”

8. By contrast, under the old provisions of the Ordinance (section 119E(2) of the Ordinance, it was provided,

“

(2)

The landlord shall not be entitled to oppose an application on the ground specified in paragraph (b) of subsection (1) if the interest of the landlord, or an interest which has merged in that interest and but for the merger would be the interest of the landlord, was acquired after the beginning of the period of 12 months which ends with the termination of the current tenancy, and at all times since the acquisition thereof of the premises have been comprised in a tenancy or successive tenancies of the description specified in section 116(1).”

9. However, there is no similar requirement in the Amendment Ordinance that the landlord has to own the property for more than 12 months before one could apply for possession on ground of self-occupation.

Tribunal’s findings

10. I agree with the submission of counsel for the Applicant.  Given the wordings of the Amendment Ordinance, I agree with him that it is up to the Applicant as the current landlord to rely on which provision of the Ordinance for recovery of possession.  Also, it must be known to the legislature that with the removal of the duration of ownership requirement prior to applying for self occupation, a new landlord who bought a tenanted property would be allowed to apply for possession after the expiry of the tenancy even though the date of expiry of the tenancy was only a short time after the assignment of the property from the former landlord to the new landlord.  I do not agree that under the wordings of the Amendment Ordinance, the Respondent could apply for possession on the ground of occupation by his girlfriend, “a co-habitee and companion”, alone but that would not affect his application since he also cited occupation by himself as a ground. 

11. Based on the facts of this case, which are mainly undisputed, I do not find that it would not be manifestly just and equitable to grant the possession order sought by the Applicant.  I agree with counsel for the Applicant that we could not equate inconvenience with manifestly unjust and inequitable.

12. I therefore dismiss the opposition by the Respondent and agree to grant possession order as sought by the Applicant in the present application, which was made on 6 May 2005.  I agree that a stay of possession up to the end of September 2005 is reasonable and adequate for the Respondent to find an alternative accommodation.  I do not agree that the particular employment situation of the Respondent warrants a stay up to 18 April 2006, the expiry date of the 12 months’ Transitional Notice given earlier by the Applicant to the Respondent.  It may be to the benefit of the Respondent that given a few more months, the Respondent may not have to move to another premises but I do not think that the rights of the Applicant as a landlord should be affected and determined by the personal employment circumstances of his tenant.

Costs

13. Section 119(R ) of the Ordinance provides,

“In any proceedings under this Part, the Tribunal shall not make any order as to costs against a party unless that party has conducted his case in a frivolous or vexatious manner.”

There is no suggestion or evidence that either party has conducted his case in a frivolous or vexatious manner.  Therefore, in accordance with the above provision, the only appropriate order would be no order as to costs.

Orders

(1)	The Applicant shall recover vacant possession of the suit Premises from the Respondent for occupation as a residence for himself;
(2)	Stay of execution up to 30 September 2005 conditional upon the Respondent paying monthly in advance rent of $29,000 per month; leave to pay arrears (if any) within 14 days from today;
(3)	No order as to costs.