Robin Adams v. Lucky Game Ltd.

Lands Tribunal Case No. LDNT 430 of 1998

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HEADNOTE

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Property law - Landlord and Tenant - Domestic Premises - Application for New Tenancy - Termination of Tenancy for Breach of Tenancy Agreement - Statutory Notice to Quit - Landlord and Tenant (Consolidation) Ordinance, Cap. 7 Part IV, ss. 119 and 119E -.

The Respondent landlord served CR101 on the Applicant tenant stating that the Respondent opposes application by the tenant for grant of new tenancy on the ground that "Where any rent has not been paid or where any covenant or condition of the tenancy has been broken or not performed which would normally have been a cause of forfeiture." When the tenant applied to the Tribunal for grant of a new tenancy, the landlord averred in the notice of opposition that the tenant had repeatedly failed to pay rent punctually. The Tribunal ruled that since the CR101 did not specify the ground for opposing application for grant of new tenancy with sufficient clarity, the tenancy had not been validly terminated and the application for grant of a new tenancy was misconceived. The landlord applied for review on the validity of the CR101.

Held: (1) As a matter of English, the statement put in the CR101 as the ground for opposition is an ungrammatical conditional clause of no legal meaning. (2) Even taking the statement as an allegation of breach, it did not give sufficient information to the tenant as to the opposition case to be met. Biles v. Caesar [1957] 1 W.L.R. 156, Bolton's (House Furnishers) Limited v. Oppenheim [1959] 1 W.L.R. 913 and Sevenarts Ltd. V. Busvine [1968] 1 W.L.R. 1929 explained. Lee Chui Foon v. Pack-Mate (HK) Co. Ltd. [1996] 4 HKC 772 distinguished. (3) A landlord may not remedy a defective CR101 by subsequent clarification in the form of pleadings or otherwise. Sevenarts Ltd. V. Busvine [1968] 1 W.L.R. 1929 and Marrow v. Nadeem [1986] 1 W.L.R. 1381 not followed. (4) Affirming the original decision, the CR101 was invalid.

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

LDNT NO.430 OF 1998

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JUDGMENT

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The Applicant herein is the tenant of the premises situate and known as Flat 402 on the 2nd floor, Grosvenor House, No. 114-120 MacDonnell Road, Hong Kong ("the premises"). The Respondent is the landlord of the premises. The Applicant applied on 1st June, 1998 for grant of a new tenancy under Part IV of the Landlord and Tenant (Consolidation) Ordinance, Cap. 7. By its notice of opposition filed with the Tribunal, the Respondent opposed on the ground that the tenancy had been validly terminated by a statutory notice to quit and the Applicant failed to apply before the termination date for grant of a new tenancy.

2. There is no doubt that the Applicant did not apply to the Tribunal before the termination date specified in the statutory notice to quit ("CR101") for grant of a new tenancy. However, this is not necessarily fatal. In order to effectively terminate the tenancy, the CR101 had to be valid in all respects. At the trial, the CR101 was produced as Exhibit R1.

3. It is trite law that failure to state in a CR101 the ground of opposition to application for new tenancy renders the notice invalid. Here, the CR101 states that the Respondent opposes on the following ground "Where any rent has not been paid or where any covenant or condition of the tenancy has been broken or not performed which would normally have been a cause of forfeiture." It is immediately apparent that the stated ground, as quoted in full and verbatim, does not even make up a complete sentence. As a matter of English, the statement is an ungrammatical conditional clause.

4. Moreover, even taking the statement as an allegation of breach, the allegation is bad for duplicity for it refers to three kinds of default - non-payment of rent, breach of covenant or breach of condition. It is trite law that an accusation which is bad for duplicity is awkwardly unfair and is liable to be quashed. I would have thought that, in addition to narrowing the ground to one of the three kinds of default, if for instance breach of covenant is relied upon as a ground, the actual breach, say unauthorized user, should be spelt out. Otherwise, the tenant would be unable to even prepare an answer to the charge.

5. It must also be remembered that not every breach of covenant or condition of a tenancy is a cause for forfeiture of the tenancy. Except for failure to pay rent, there is no right to forfeiture unless the lease or tenancy agreement expressly so provides. There is no such thing as a breach which is normally a cause for forfeiture. Even where there is provision for forfeiture in the tenancy agreement, according to section 58 of the Conveyancing and Property Ordinance, Cap. 219, the right to forfeit is not enforceable unless requisite notice and opportunity to remedy has been given to the tenant. It is meaningless to state in the CR101 that a breach is normally a cause for forfeiture. It does not even allege a breach.

6. In the premises, on the day of the trial, I ruled that the CR101 issued by the Respondent was invalid. It followed that the application by the tenant for grant of new tenancy was misconceived. The result, therefore, was that the tenancy continued.

7. On 31st July, 1998, the parties came before me on the application by the Respondent for review of my decision at the trial. I directed the parties to argue by written submissions to be filed later. I now have the written submissions. Those representing the Respondent rely on a number of authorities - Biles v. Caesar [1957] 1 W.L.R. 156, Bolton's (House Furnishers) Limited v. Oppenheim [1959] 1 W.L.R. 913, Sevenarts Ltd. V. Busvine [1968] 1 W.L.R. 1929 and Lee Chui Foon v. Pack-Mate (HK) Co. Ltd. [1996] 4 HKC 772. All these authorities seem to say that it would suffice if the landlord recites in the notice to quit the wording in the provision containing the statutory ground for opposition. However, these authorities require closer examination.

8. In Biles v. Caesar, the landlords gave notice of objection to a new tenancy on the ground that they intend to demolish and reconstruct the whole of the premises. This was based on section 30(1)(f) of the English Landlord and Tenant Act 1954 which reads, "that on the termination of the current tenancy the landlord intends to demolish or reconstruct the premises comprised in the holding or a substantial part of those premises or to carry out substantial work of construction on the holding or part thereof." At the trial, the landlords could prove substantial reconstruction only. On appeal, it was contended that since the landlord had proved intention to substantially reconstruct instead of the whole as per the notice of opposition, the opposition should fail. See p. 156 per judgment of Denning L.J. So the real issue in that case, I believe, was not whether the notice stated the ground of opposition in clear terms, but rather whether the landlords were able to substantiate the stated ground. It is true that Lord Denning said that "It is not necessary for [the landlords] to specify any of the subsidiary portions of a paragraph, so long as they make clear which is the paragraph on which they rely." This should be understood in the context that where the difference is between the whole and a greater part of the whole the difference does not matter. To elevate this dictum into an abstract principle that a landlord's notice would suffice whenever it recites the wording of a paragraph containing a statutory ground is taking the observation beyond its logical extension. None of their lordships in the English Court of Appeal held that a landlord can vaguely allege a breach without specifying the substance of the breach.

9. Bolton's (House Furnishers) Limited v. Oppenheim also concerned section 30(1)(f) of the English Landlord and Tenant Act 1954. I think the most important instruction from that case is in the concluding paragraph of Hodson L.J.'s judgment at p. 918 -

"The landlord's statement, in my judgment, gives the right information to the tenants in order that they may be able to deal with the ground stated in opposition to their application for a new tenancy, and I would, therefore, dismiss the appeal." (Emphasis added*

I derive further assistance from Harman L.J. who said in Sevenarts Ltd. v. Busvine, at pp. 1934-5 that -

"It is really in the nature of a statutory notice to quit, and provided that it indicates (so the cases say) with sufficient clarity to the tenant or the applicant what case he has to meet, then it is good,"

Harman L.J. not only re-inforced the principle that the statutory notice to quit must let the tenant have sufficient information so that he or she knows what case to meet, his lordship leaves us in no doubt how the earlier decisions should be understood.

10. Lee Chui Foon v. Pack-Mate (HK) Co. Ltd. is of no assistance at all to the Respondent landlord here. In that case, the only challenge of substance to the validity of the statutory notice to quit was that the wrong address for the purpose of service was given. There was a contention that the notice did not contain sufficient particulars but what was wanting was not even spelt out.

11. In fairness to the Respondent, I should note that the English Court of Appeal in Sevenarts Ltd. v. Busvine mentioned that a statutory notice to quit without sufficient particulars may be remedied by pleadings setting out the landlord's case when the parties go to court on an application for grant of new tenancy. It may be argued that although the CR101 herein is vague as to the Respondent landlord's charge against the Applicant, the landlord's case has been put clearly in its notice of opposition filed with the Tribunal more than six months after the CR101 was served. I feel relieved from the onerous task of evading the force of such mighty authority upon finding a subsequent decision of the English Court of Appeal in Marrow v. Nadeem [1986] 1 W.L.R. 1381. There at p. 1386 Nicholls LJ observed,

"When the notice is so read, it is apparent that what is contemplated is that by the form the tenant will be given the information sufficient to enable him, if he so wishes, to avail himself of his statutory rights by serving the requisite counter-notice on the landlord within two months and thereafter apply to the court ...."

Thus the English Court of Appeal has shifted the time-table for giving supplemental clarification. It would be too late for the landlord to show his or her hand by the time court proceedings have been issued. Nicholls LJ demands that the landlord must give relevant particulars within two months after service of the statutory notice to quit so as to enable the tenant to consider serving counter-notice. By this standard, the Respondent landlord herein has not given sufficient particulars within time.

12. In fact, I would like to add that a landlord delays giving sufficient particulars at his or her own peril. The judgment of Nicholls LJ should not be taken as giving comfort to a landlord who delays by two months to the last day when a tenant must serve counter-notice. A tenant is entitled to time to investigate the landlord's stated ground. I mentioned at the trial of this case that in a recent case I had ruled that a CR101 which stated that the suit premises were required for occupation by the landlord's family (meaning persons other than the landlord) was defective because for one thing the law does not allow re-possession by a landlord for occupation by any member of the landlord's family. Only certain members of the family may benefit under the law. For another thing, the person who would be occupying the premises when recovered should be specified in the statutory notice to quit. If, for instance, the premises are required for the second son of the landlord, that should be clear in the notice so that the tenant may take steps to investigate about the needs of that second son. If the premises are required for the father of the landlord, that should be clear in the notice so that the tenant may endeavour to ascertain if the father has properties of his own. It is no good for a landlord to state in a notice to quit that the premises will be required for occupation by "the landlord's son" and then eight weeks later the landlord follows up with clarification that the "landlord's son" is the "landlord's sixth son".

13. I can also envisage a situation where a landlord states in a notice to quit that the premises will be required for occupation by "the landlord's family", the tenant upon receipt of such notice obtains professional advice to the effect that it is defective and so happily goes off on holiday and then the landlord follows up with clarification that "the landlord's family" means "the landlord's mother" which clarification is not seen by the tenant until return from holiday when the time for serving counter notice has expired. Bearing in mind that numerous complications can arise, I would rather hold that no subsequent clarification is acceptable. There is no reason why a landlord should not be required to complete the notice to quit fully and correctly. Allowing a careless landlord a subsequent remedy creates uncertainties for even practitioners, not to mention ordinary tenants. After all, if the first notice to quit is defective, there is nothing to prevent a landlord from serving a fresh notice to quit.

14. In the premises, on review, I affirm my original decision. Since the Applicant is unrepresented, I make no order as to costs in relation to the review.