WONG YUEN-WAH v. CHUN KING

IN THE COURT OF APPEAL

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JUDGMENT

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Sir Alan Huggins, V.-P.:

1. This is an appeal from a decision of the Lands Tribunal. Application was made in that Tribunal for possession of premises by reason of inconvenience caused by failing to pay rent on time.

2. The matter arose in this way. The parties entered into a written contract of tenancy. This was for one year, but the tenancy was to be extended if neither party gave notice to the contrary one month before the expiration of the original term. That term expired on 31st August 1970. According to the Particulars of Claim, after that date the premises were let to the Respondent by the Applicant on a monthly basis at a monthly rent payable in advance "on the first three days of each and every calendar month". The Grounds of Opposition admitted that. It has been sought to argue before us that in fact there was after 31st August 1970 not a contractual tenancy at all but a statutory tenancy - a statutory tenancy in the sense that it was what has previously been described as a continuing statutory contractual tenancy. In my view that is not open to the Tenant in these proceedings. There was on the pleadings a clear admission of a contractual tenancy. Whether or not it could have been argued that a statutory tenancy arose in 1970 is neither here nor there: the matter was in fact argued throughout on the basis that at the material time (to which we are coming shortly) there was a contractual tenancy in existence and that it was a contractual tenancy in respect of which the rent was payable in advance within the first three days of each and every calendar month.

3. The Tenant was apparently a bad payer and eventually in 1983 the Landlord served a notice of warning stating that, if the rent was not paid on time, application would be made under s.53 of the Landlord and Tenant (consolidation) Ordinance. The Tenant did not pay on time on several occasions. Nothing was done until the Landlord served Notice to Quit on 25th October 1983, the only purpose of which could be to terminate a contractual tenancy. The notice expired, and from that moment the Tenant, who was alleged to have been a bad payer for over ten years, suddenly pulled up his socks and paid promptly every month. Action was then commenced in the Lands Tribunal.

4. The Presiding Officer having found that there was a contractual tenancy, the point that has been taken is that the warning notice and the failures to pay promptly prior to the expiration of the Notice to Quit were material upon which the Tribunal could properly grant possession under s.53. The Tribunal came to the conclusion that the warning notice had to be served after the expiration of the original contractual tenancy. It is that which is contested, because there is another decision of a Lands Tribunal to the contrary.

5. With respect I am satisfied that the Presiding Officer in the present case was entirely right. The whole scheme of this Ordinance is designed not to interfere with the initial contractual rights of the parties. During the currency of a Common Law tenancy the parties are bound by the covenants to which they have agreed. It is only after notice to quit has been given - in the case of a periodic tenancy - that the new terms implicit by virtue of s.53 become implied. Therefore there has to be proved inconvenience after the expiration of the notice to quit: there then has to be a warning notice and there has to be a continuation of the inconvenience thereafter. It may be that, where warning notice has properly been served and there has been a continued failure to pay on time, the Tribunal is entitled to have regard to previous failures before the contractual tenancy was terminated: the power of the Tribunal to order possession for non-payment of the rent as a matter of inconvenience is to some extent a discretionary one and it may be that the court can take cognizance of the fact that a tenant has already been delaying payment for a long period during the contractual tenancy, provided that there is ground under the statute in respect of failure to pay after the expiry of the Notice to Quit.

6. The Presiding Officer in TANG Wing-cheung v YEUNG Shiu-tong Victoria Land Tribunal Action 1984 No.6 expressed the view that the tenancy need not be terminated by notice before the letter of warning could be delivered: if the Legislature had intended that the statutory warning could be given only after the tenancy was terminated by notice to quit, it would have said so, and to defer the statutory warning until after the expiration of the notice to quit would constitute unreasonable and undue prolongation of the annoyance. With respect I do not see the matter in the same light. In my view the Presiding Officer in the present case was entirely correct when he said of the Landlord that

"his right will not crystalize until he first serves a warning in writing to the tenant and the inconvenience continues after such warning"

and that that must be after the terms implied by s.53 have come into effect. Therefore, he said, the warning must be given after and not before the section takes effect, which is upon the expiration of the notice to quit. That in my view is entirely right and I would dismiss this appeal.

Cons, J.A. :

7. I agree entirely with what my Lord has said and I would dismiss the appeal.

Fuad, J.A.:

8. I also agree that the appeal should be dismissed because in my judgment the learned Presiding Officer's interpretation of the relevant statutory provisions was right.

19th October 1984