COLONIAL TREASURER INCORPORATED v. FOOK HONG ENTERPRISES COMPANY LIMITED

IN THE COURT OF APPEAL

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REASONS FOR JUDGMENT

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Sir Alan Huggins, V.-P.:

1. The only issue argued before us was this. In relation to the suit premises what were the rateable values on 10th June 1983 "contained in the valuation list declared in March 1977 under s.13 of the Rating Ordinance as amended or altered from time to time up to and including 10th June 1983"? The answer to that question might appear to be open to no argument, and so it appeared to the trial judge. Anyone who had on 10th June 1983 inquired what were the relevant rateable values contained in that list would probably have been told "$49,800 in respect of each of two penthouses and $48,600 in respect of each of 58 flats". (I say "probably" because, although those were the values which ought to have been listed, they may not in fact yet have been entered, because they were not assessed by the Commissioner until 7th June 1983 and the physical amendment of the list may or may not have been carried out. Nothing turns upon that.) What is important is that, if one were today to inquire of the Rating and Valuation Department what rateable values were listed on 10th June 1983, one would be told $67,200 in respect of each of two penthouses and $66,000 in respect of each of 58 flats". Although different, both answers would in a sense be true.

2. This apparent contradiction comes about by reason of Part IX of the Rating Ordinance, which provides that a person aggrieved on the ground that a tenement included in a valuation list has been valued below its proper rateable value may, within the month of March in any year, serve a proposal for the alteration of the valuation list. There are then various steps which may be taken and which may end with an order of the Lands Tribunal directing the amendment of the valuation list concerned in any manner - which order, it is conceded, may include a direction that a rateable value be amended with effect from 1st April in the year in which the proposal was served. It is obvious that, where an aggrieved person fails to obtain satisfaction from the Commissioner and ultimately appeals to the Lands Tribunal, a decision will not be made until after 1st April in the year in which the proposal was served. Nevertheless, the whole purpose of the prescribed procedure is to fix an appropriate rateable value for the financial year which begins on 1st April and it follows that, when the appropriate rateable value is fixed upon an appeal to the Lands Tribunal, the Tribunal's order must have the effect of fixing the rateable value at and from 1st April, whatever the date on which the order is in fact made.

3. So far all is plain sailing. Mr. Fleming accepts that for rating purposes the effective rateable value on 10th June 1983 were $67,200 and $66,000. However, the dispute in this case arises because the Legislature has chosen to relate the factors laid down in the Landlord and Tenant (Consolidation) Ordinance as governing the control of tenancies to rateable value. Thus the date 10th June 1983 to which I have been referring is material because tenancies of premises of which, on that date, the rateable value contained in the valuation list was not less than $60,000 were exempted from control. Mr. Fleming argues that the objects of the Landlord and Tenant (Consolidation) Ordinance can be served, and better served, by a literal construction of the provisions of that Ordinance than by reading them in the light of the provisions of the Rating Ordinance. So, he says, we should ignore the fact that for rating purposes the rateable values were amended with effect from 1st April and concentrate on the fact that the actual amendment was not directed until after 1st June 1983: therefore the rateable values "contained in" the valuation list on that date were those fixed by the Commissioner (which were under $60,000) and not those fixed by the Lands Tribunal (which were over $60,000).

4. I did not find the matter quite as simple as did the trial judge and, with all respect to him, I came to a different conclusion. It seemed to me that it would be wrong to assume that, when it enacted the relevant provisions of the landlord and Tenant (Consolidation) Ordinance, the Legislature did not have in mind Part IX of the Rating Ordinance and appreciate that the figure shown in the valuation list on 10th June 1983 might not be an effective "rateable value" at all. It is true that someone consulting the valuation list on 10th June might assume that it was, and thus be misled; but, if he were properly advised, he would be aware of Part IX of the Rating Ordinance and would therefore inquire whether a proposal for re-assessment had been served within the month of March. That inquiry would prevent his being misled. The possible results of adopting the Respondent's contention seemed to me far more serious. The Rating Ordinance recognizes that the valuation list may contain clerical or arithimetical errors and makes provision for their correction: see s.16. Suppose a figure of "$6,000" had been inserted in error for "$60,000 and that the error had not been discovered until after 10th June. Mr. Fleming very properly conceded that the tenant could not take advantage of that error to claim the protection of Part II of the Landlord and Tenant (Consolidation) Ordinance. If in such a case the erroneous figure appearing in the list on 10th June was not to be treated as the "rateable value contained in that list" for the purposes of either ordinance, I see no reason why a figure entered as a result of what might be regarded as an error of valuation should be treated as such a "rateable value" for the purposes of one of them. Again, one might have a case where, although the Commissioner or the lands Tribunal had made a determination before 10th June, the direction to amend the valuation list had not been physically obeyed by that date. It seemed to me that it could not have been the intention of the Legislature that the administrative delay should affect the rights of the landlord and tenant under the Landlord and Tenant (Consolidation) Ordinance. By s.14A of the Rating Ordinance the valuation list was only prima facie evidence of the rateable values contained therein.

5. It was for these reasons that I proposed that the appeal be allowed.

Cons, J.A.:

6. I agree entirely with what my Lord has said. I add a few words only because we disagreed with the Judge below, a Judge whose opinion I would, for my part, treat always with great respect, upon a matter which to him had appeared as plain as the proverbial pikestaff.

7. The argument of Counsel for the Colonial Treasurer Incorporated was that although the decision of the Lands Tribunal could have retrospective effect so far as the Rating Ordinance is concerned, it cannot have retrospective effect with regard to the Landlord and Tenant Ordinance. Counsel was driven to accept that the submission was not strictly accurate, for he felt obliged to concede that the correction of a clerical error discovered subsequent to the 10th June would have retrospective effect. But he maintained that judicial correction of an assessment error could not. The reason for this, as I understood him, was basically the need for certainty.

8. It was his contention that subsection 10 contained an ambiguity. With respect to him I did not agree. It contains a latent ambiguity, which has been brought to light by the circumstances in this instance.

9. To resolve that ambiguity it is necessary to look at the intention behind the amendment which was introduced on the 10th June 1983 i.e., the inclusion of a "cut-off date". Counsel for the Treasurer suggested that the purpose was to avoid possible chaos with respect to rentals on the open market. However he seemed to me to have difficulty in providing concrete examples to make good that submission.

10. Counsel for the landlord offered an alternative suggestion, that it was to ensure that the standards which fixed the general level of decontrol should not become eroded by the natural effect of inflation. That seemed to me much more likely to have been the intention of the Legislature and was not inconsistent with the construction he put forward. The correction of an assessment error would not affect the general level of decontrol.

11. I came therefore to the conclusion that the strict literal interpretation adopted by the Judge was not correct and agreed the appeal should be allowed.

Fuad, J.A.:

12. I agree and have nothing to add.

10th October 1984