HIGHEAME LTD v. LEE YEE MUI

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J U D G M E N T

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Hunter, J.A. :

1. This is an appeal from the dismissal by the Presiding Officer H.W. Judge Scriven on 11th August 1988, of an application by the applicant landlord to recover possession of a flat in Moreton Terrace of which the respondent is the tenant. The grounds for possession were that this tenant had caused unnecessary inconvenience to the Landlord, within the meaning of section 53(2)(d) of the Landlord and Tenant Ordinance, by persistent failure to pay her rent as any when those rents fell due. Reliance was placed upon section 53(2A)(b) which says that.

"For the purpose of subsection (2)(b) a tenant who persistently fails to pay rent as and when it falls due, may he regarded as causing unnecessary inconvenience".

2. The main problem to my mind is that the case got off on the wrong foot. This landlord was a landlord by purchase who had acquired the premises in 1987. The company was the fifth landlord in quite a lone chain. The first (I am reading from the respondent tenant's husband's evidence) landlord was in 1969 a Mr Tob. The next landlord starting In 1977 was a Madam Mok. Then, next there was a Mr Tsang. Finally from January 1985 the Sin Hua Trust Limited was the landlord, until the applicant acquired the premises in May 1987.

3. So this applicant had itself no knowledge of the original terms of this tenancy. It was common ground that this was a monthly tenancy and that the rental period ran from the 10th of the first month until the 9th of the second month. Now it is elementary that if an agreement for such a monthly tenancy is come to between a landlord and a tenant, the rent prima facie is payable in arrear ie on or before the 9th of the second month. If the landlord wants his rent in advance ie on or before the 10th of the first month, he has to so stipulate to the tenant, and obtain the tenant's agreement to that consequence. The real question in this case bas whether such agreement was ever made between the tenant respondent and any of the landlords. The present applicant landlord never asserted that he came to any such agreement. He was assuming that some agreement had been made at an earlier date.

4. This issue was raised by the tenant in his grounds of opposition. In para 7 of his grounds, he denied the applicant's contention that the rent was payable in advance and put the applicant to proof of that assertion. This was the real issue between the parties. There was no issue on the facts which were that throughout the period of the respondent's tenure of these premises the rent had been paid towards the end of the monthly period, something like a week before the 9th. That is what the tenant had been doing. That was what she was asserting a right to do.

5. Unfortunately, at a very early stage in the hearing, the Presiding Officer seems to have come to the conclusion that because, as we are told by counsel, he said it was "usual" for rent to be paid in advance, that the tenant should start by giving evidence. This was a complete reversal it seems to me, of the proper onus of proof. The onus of proof here that this rent was payable in advance fell fairly and squarely upon the landlord. By directing the respondent to give his evidence first the trial judge was in act very nearly prejudging this issue.

6. In his written Reasons for Decision which were filed on 22nd August, the judge says this:

"I directed the Respondent to start since the issue was the effect in law of the admitted, late payment of rent by the Respondent".

With the greatest respect this was not the issue at all. There was no dispute as to the dates of payment. The real issue was whether that rent was paid late or not.

7. Therefore one has to consider whether there was in fact any sufficient evidence before the trial judge to support the apparent finding, he made later in his Reasons (notwithstanding the earlier ruling), that there was some prior agreement that the rent should be payable in advance. He made a declaration accordingly. Very early in his evidence the tenant's husband said this:

"I have lived in premises since 1969. There have been several changes of landlord. We paid rent normally 8-10 days before due".

8. By that he was clearly meaning before the 9th of the following month. In other words, he was paying his rental 8 to 10 days on average before the expiry date. There was simply no evidence to suggest that any contrary agreement was made with the first landlord. But reliance was placed upon the position of rent receipts issued by her were produced. The first of these was in respect of the month from 10th December 1977 to the 9th January 1978. These rent receipts were in part manuscript, in part printed. The manuscript part of the rent receipts showed, month by month, the receipt of the appropriate sum by way of rent on a date which entirely coincided with the tenant's evidence. In each case it was paid about a week before the expiry of the monthly period.

9. But the printed part of the rent receipts started with this (under what was alleged to be clause 1):

"It is agreed that rent shall be paid in full in advance each month without delay".

In his written reasons, the judge seems to have regarded that alone as evidence of some agreement. With the greatest respect to him, it is nothing of the sort. Basically a receipt is no more than a receipt. At its highest it could constitute evidence of some contemporary agreement, if there were some further evidence that the assertion which is advanced in the print in this rent receipt was expressly or impliedly accepted by this tenant. In the case of Madam Mok there is no such evidence at all. Quite the contrary. As I said all the receipts show that the rent was not being paid in advance but normally in arrear. So that the manuscript parts of the rent receipts, to which I attach rather greater significance than the printed parts, in fact expressly contradict the assertion in the print.

10. The next landlord as far, as we know, either issued no receipts or they have not survived. Then we come on to the fourth landlord, the Sin Hua Trust. A clutch of rent receipts were produced from that body starting in September 1985 and going up to 8th Hay 1987. They are really only significant again as corroborating the tenant's evidence that, throughout this period, he was paying in arrear and about a week before the end of the month. So that during the period of the time before this landlord came on the scene in May 1987, you had something like 18 to 19 years course of dealing, where there had been persistent payment by the tenant to his landlord of rend at a particular time without any hint of objection from the landlord. To my mind that is very far from being evidence of any agreement that this rent was payable in advance. It is quite the contrary.

11. During the first 8 month of the tenancy under the Present appellant nothing was apparently said. Towards the end of that time, on 16th October, the company was clearly looking for possession of this property and for good reason to obtain it. It served a notice to quit, which expired on 9th January 1988. That was followed by two warning letters, one dated 4th January and one 24th February, both in identical terms. They start like this:

"We write to inform you that you have persistently failed to pay the rental of the above-mentioned premises to our company punctually as and when it falls due and thereby causing unnecessary nuisance and inconvenience to our company".

They went on to give specific warning. They were plainly written with advice on the Ordinance. But unfortunately neither letter specified the date upon which it was being alleged that the rent fell due for payment.

12. In the face of those two letters, with a rental payment sent on 1st March for the period 10th February to 9th March, in other words at the ordinary time, the applicant wrote this:

"Regarding not paying the rental to your company punctually, I have a little of my own difficulties, anyway, in the future I shall try to be punctual in, the payment of my rent".

It is not suggested that that can constitute any agreement being made with this landlord. It was plainly not willing at that stage to make any agreement pith this tenant at all; it was seeking possession.

13. The only so-called evidence before the Presiding Officer to support the conclusion that there was some antecedent agreement is in fact that letter. In my judgment the letter does not hear any such inference at all. It may be written in ill-advised terms, as the tenand sought to explain in the box.  He said that he did not understand the meaning of the word punctual. One has great difficulty in accepting that. Rut also he was saying that he did not want any trouble with this landlord. He did not want any further difficulty. That answer to my mind has a much clearer ring of truth about it. But even assuming that he knew that this landlord was anxious to get the rent at some earlier date, and even assuming further that although no date had been mentioned in warning letters, he was looking to the start of the month; this is a very long way from an admission by the tenant that he had entered into a binding agreement with any of the predecessors in title. But that is what has to be said.

14. The two matters which the Presiding officer took into account in apparently concluding, that it was a term of this tenancy that the rent was payable in advance was that letter, and I think first and foremost, the rent receipt given by Madam Mok. This he described in his reasons as a "showing" that it was agreed. With respect that is not the effect of that instrument. If you take that reason away, there is really nothing left in my judgment to support that finding. Therefore for my part I would have dismissed this application in the court below on the simple basis that it was not proved that this rent was payable in advance, ie that there was no evidence of late payment by this tenant at all.

15. In those circumstances, it is unnecessary to deal with the argument which has been advanced to us on the true construction of section 53(2A)(b) and particularly the assertion that the words "may be retarded as causing" leave only a very residual discretion in the trial Judge. It seems to me that the words "may be retarded as causing unnecessary inconvenience" do vest in the Presiding, Office a discretion in considering the impact of the conduct complained of, and whether in his view it amounts to unnecessary inconvenience. I do not readily see why in arriving at a conclusion on that he should not take all the circumstances into account. I do not myself think that the words raise any sort of presumption one way or the other. But these remarks are not necessary to this decision.

16. I would dismiss this appeal upon the first ground that there was no evidence before the Presiding Officer to support his finding on the rent, and I would accordingly say that there was no evidence upon which he could grant the declaration be made.

Yang, C.J. :

17. I too would dismiss the appeal for the reasons stated by my brother Hunter.

Macdougall, J.A. :

18. For the reasons given by my brother Hunter, I too would dismiss this appeal.