1971

LAM PAK v. HOP HING (A FIRM)

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14938-EN-1971-12-24

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CACV000007/1971

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

CIVIL APPEAL NO. 7 OF 1971

(On Appeal from V.C.J. Action No. 4372 of 1970)

-----------------

BETWEEN
	LAM PAK	Plaintiff
		(Respondent)
	and
	HOP HING (a firm)	Defendants
		(Appellants)

-----------------

Coram: Full Court (Huggins and Pickering, JJ.)

Date of Judgment: 24th December, 1971.

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JUDGMENT

-----------------

Pickering J.: The appellant firm was the tenant of ground floor premises at 574 Canton Road, Kowloon, and was sued by the respondent landlord for possession, $2,000, being arrears of rent for five lunar months and for certain mesne profits. The District Court Judge made an order for possession and for payment of the rent and mesne profits claimed, finding that the premises were exempted from the provisions of the Landlord & Tenant Ordinance under section 3(1) (d) thereof as being premises which, after the 16th day of August, 1945, had remained continuously untenanted and which, after the commencement of that Ordinance, had been rendered habitable by extensive repairs effected at the expense of the landlord.

2. The primary ground of appeal is that this finding in regard to section 3(1)(d) of the Landlord & Tenant Ordinance was unfounded; that the premises in fact constitute "an entirely new building" and, no occupation permit having been issued in respect of the premises, section 3(1)(a) of the Ordinance does not apply to exclude them from the provisions of the Ordinance with the result that in fact the District Court Judge had no jurisdiction to try the case.

3. The suggestion that the premises constitute "an entirely new building" is a completely new allegation and runs contrary to the argument directed to the District Judge on behalf of the appellant firm, which was to the effect that the ground floor of the building, which is that part of the building with which we are concerned, never in fact suffered substantial damage so that it could not have been said to have been extensively repaired at the expense of the landlord.

4. The argument that the premises constituted an entirely new building, being an approach never made in the District Court, Mr. Chang, for the respondent, argued that the point could not be taken before us in the Full Court and relied upon the line of cases of which Smith v. Baker⁽¹⁾, though not the earliest in that line, is perhaps the most frequently quoted, as authority for the proposition that the raising of the point of law at the trial is a condition precedent to any appeal on that point from the decision of (in England) the County Court. That principle has frequently been recognised in Hong Kong in regard to appeals from the District Court and it is sufficient to refer to the case of Lee Bing Keung v. Wong Hiu Kwan⁽²⁾, where a number of the English authorities are reviewed.

5. Mr. Bernacchi, for the appellant firm, however argued that this line of authorities has no application where the new point sought to be taken goes to jurisdiction and quoted a number of authorities to that effect. Whilst I do not consider it necessary to consider all these authorities, it might be observed that in the case of Sharpe v. Nicholls⁽³⁾, relied upon by Mr. Bernacchi, Lawrence L.J. was merely prepared to concur in the decision of Mackinnon L.J. to order a new trial whilst, in view of the fact that in the court below the inference was that the defendant admitted that the plaintiff was in fact the landlord, he expressed "great doubt whether the defendant ought to be allowed to raise that point again". It is difficult to appreciate why, having regard to this clearly expressed doubt the learned Lord Justice concurred in the decision of Mackinnon L.J. and it is notable that Morton L.J. dissented from the decision to order a new trial.

6. In the present case, unlike Sharpe v. Nicholls⁽³⁾, the circumstances go far beyond a tacit admission in the court below that the facts were such that the court had jurisdiction. In the District Court the appellant put forward a positive case the effect of which was to exclude all possibility of the existence of the case now sought to be propounded. Thus in the District Court, it was argued that these ground floor premises were never substantially damaged. In this Court it is sought to argue that the building had ceased to exist as a building. Before us, Mr. Bernacchi frequently advanced the proposition that the respondent could not eat her cake and still have it - a reference to her isolated description of the premises as consisting of a balcony and a wall. That particular piece of gastronomic logic however, as it seems to me, lies ill in the mouth of the appellant who now seeks to deal with his own cake in precisely that manner.

7. Another distinction between the present case and that of Sharpe v. Nicholls⁽³⁾ is that in the latter case it was apparent on the face of the plaintiff's own pleadings that the Court had no jurisdiction to make the order which it had made. She had sued as personal representative and not as beneficial owner of the premises in dispute and it should have been apparent to the Court from the very beginning that in that former capacity she could not claim possession for her own occupation under the Rent and Mortgage Interest Restrictions (Amendment) Act 1933. There was nonetheless the strongest likelihood that the plaintiff in that case was in fact the beneficial owner, and that had the matter been properly pleaded, the Court would have had jurisdiction. The case was accordingly sent back to ascertain the plaintiff's true status in regard to the premises. No such lack of jurisdiction was ever apparent in the present case.

8. Again in Davies v. Warwick⁽⁴⁾, despite some observations of Goddard L.J. (as he then was), it is apparent from the judgment of Scott L.J. that the appellant was allowed to put forward an argument based upon the 1939 Rent and Mortgage Interest (Restrictions) Act, precisely because, in the court below there had been reference to that Act, so that the point taken in the Court of Appeal was not in fact a new point. In that case, as in Sharpe v. Nicholls⁽³⁾, the point upon which the case was decided necessarily arose in the court below because, as Goddard L.J. said, it was apparent on the pleadings. In our case, a mere assertion in the Statement of Defence that the premises are subject to the provisions of the Landlord & Tenant Ordinance, does not make it apparent that the contention is that this is so because they constitute "an entirely new building" within the meaning of s.3(1)(a), in respect of which no occupation permit has been granted after the 16th August 1945-nor indeed was that allegation ever raised until the case reached this Court.

9. My reason for saying that it is unnecessary to consider all the cases put forward by Mr. Bernacchi is that the fresh approach which he endeavours to put before this Court cannot in fact go to jurisdiction unless and until a different set of facts from either those found by the District Judge or those contended for by the appellant firm in the District Court, is substituted.

10. Basically, what the appellants are urging, is that if the learned judge had not arrived at the conclusion at which he did arrive, namely that the premises had been rendered habitable by extensive repairs effected at the expense of the landlord, but had reached a quite different conclusion, that is, that they constituted "an entirely new building", he would have had no jurisdiction. However, the judge reached the conclusion which he did reach and there is no basis for asking this court to send the case back to him with an invitation to reach a diametrically opposed conclusion. On the basis of the decision in Lau Lin v. Cheung Fong⁽⁵⁾ Mr. Bernacchi urged that sections 3(1)(a) and 3(1)(d) are mutually exclusive so that premises which are part of a new building not exempted under s.3(1)(a) cannot be exempted under s.3(1)(d) as being extensively repaired premises. Whilst that view is not binding upon us, it is one which we accept. I find it difficult, however, to appreciate just how this argument helps the appellant firm for if the two circumstances are mutually exclusive and the judge has found the one, then logically the other cannot arise. As I see it the argument now advanced that the premises are "entirely new premises" is not merely a new argument but it is a new point, not only never relied upon in the court below, but there shut out from all possibility of presentation by virtue of the excluding argument advanced, i.e., that the ground floor portion of the building had never been very substantially damaged.

11. As to what constitutes a new point as opposed to a new argument upon an old point, Evershed, M.R. said in United Dominions Trust v. Bycroft⁽⁶⁾

"I agree, of course, that the general issue of the validity of the agreement and whether any invalidity affected the right of the holder of the promissory note to sue on it has been raised by the amended pleading, but I have myself come to the conclusion that, although within the scope of the general issue, this was such a new way of putting the plaintiffs' case as to amount to a new point within the meaning of that formula, as it has been used and applied in these courts ever since Smith v. Baker & Sons(4) in 1891. I make no attempt to define "a new point" for this purpose or to declare what are its characteristics. I think it is, perhaps, a matter in the end of common sense in the light of all the circumstances of a particular case, but in the present case I am satisfied that this way of putting the case is a new point of law. I rest my conclusion perhaps most strongly on this consideration, that the judgment, extracts from which I have read, seems to me to be in no way whatever related to it. Indeed, it seems to me to have proceeded on a basis which was absolutely inconsistent with the way in which counsel for the plaintiff now puts his case. As a matter of principle the Court of Appeal has always been strict in applying the rule that an appellant from a county court, unless the other party consents, cannot be allowed in this court to raise a new point of law not raised below. After all, the county court is intended to serve litigants of elatively small means. It is not in accordance with the public interest that a party who has fought a case in a county court and been defeated should then raise in this court a new point and put his case in an entirely different way as a matter of law and so make the other party, hitherto successful, litigate the matter again at the risk of having to pay the costs not only below, but in this court."

12. In my view the argument sought to be raised is a new point and not only a new point but one which cannot go to jurisdiction unless and until wholly new facts are found. What then would be our justification for sending the case back to the learned judge to find new facts?

13. Before it can be said that the court had no jurisdiction by virtue of s.3(1)(a) of the Landlord & Tenant Ordinance, it must be demonstrated that this was "an entirely new building" in respect of which no occupation permit had been issued. Accepting that latter fact (for the respondent has not produced any occupation permit), it has to be demonstrated by evidence that the building was in fact "an entirely new building" and not a repaired building. The appellants, defendants in the court below, made no effort in that court to show this: indeed their whole contention was that these ground floor premises were not very substantially damaged. On the other hand, on the part of the plaintiff, there was evidence upon which the learned judge could reach the conclusion that extensive repairs had been effected so as to bring the building within s.3(1)(d). Various sources of evidence were available to the learned judge to permit him to reach such a conclusion - notably the evidence of the contractor in the Tenancy Tribunal proceedings, where ...(illegible) spoke of the building as having consisted of "four walls and a roof", and that of the plaintiff in those same proceedings. The evidence of both was supported by the estimate and receipt, Exh. P2A and the estimate speaks of "repairs" to the building and contains references to both external and internal walls.

14. It is true that the judge appears to have placed his reliance primarily upon the evidence of the plaintiff in the District Court; true also that that evidence was ambiguous in that at one juncture she described the building as consisting upon her return from China after the war, of "a balcony and a wall and nothing else" and, at another point, said "the upper part of the premises was in a shabby condition" - a description which suggests that the upper part existed but was dilapidated. It is not clear why the learned judge apparently relied, in the first instance, upon this evidence and referred to the contractor's evidence as providing strong corroboration of the plaintiff's case". One would have thought that his approach would have been from the other direction and that his primary reliance would have been upon the evidence of the contractor to which he was perfectly entitled to give full weight. However that may be, there was ample evidence upon which the learned judge could find that the premises fell within s.3(1)(d) and there could be no justification for our returning the case to him to consider making a finding which is automatically excluded by the finding which he did make. It is perfectly apparent that the judge was of the opinion that on the site there had stood a building, totally uninhabitable.

15. The evidence of Mr. Berger of the Rating Department also suggests that the building was not beyond repair but I am unable to accept the contention of the appellants that his evidence is sufficient to establish that the premises must have been tenanted because the rating assessment, having been cancelled after the cessation of hostilities, was "continued shortly afterwards" in respect of the ground floor whereas it was only at a much later date that an assessment was returned in respect of the whole house. The shortcoming of this evidence was that it was not pursued and explained; the court was not made aware of how long after the cessation of hostilities the assessment was cancelled nor what was meant by its resumption "shortly afterwards" in respect of the ground floor. Had Mr. Berger been asked to particularise dates, a definite picture might have emerged, but the evidence as it was left, falls far short of refuting the plaintiffs' evidence that the premises remained continuously untenanted after the cessation of hostilities until the completion of the repairs in 1948.

16. A further contention of the appellants was that no apportionment was made by the learned judge as between the total cost of repairs to the building as a whole and the proportion thereof which related to the ground floor premises which are the premises with which we are concerned. Accepting that the ground floor is the subject of a separate letting and constitutes "separate premises" for our present purpose, it is apparent that had the learned judge made the apportionment, the absence of which is now criticised, he must have come to the conclusion that an amount in excess of seven years standard rent had been expended upon the ground floor premises. A perusal of the estimate; Exh. P2A, reveals that some $5,156.50 was spent upon the ground floor; it is legitimate to deduct from this the sum of $1,060.00, the cost of the staircase from the ground floor to the upper floors which cannot be said to be exclusively referable, or perhaps even referable at all, to the ground floor. The deduction results in some $4,096.50 having been spent upon the ground floor and from this resultant sum it is appropriate to deduct one-sixteenth thereof; this, because although the amount of the estimate was fractionally in excess of $16,000.00, the amount actually proved to have been paid, amounted to only $15,000.00; one sixteenth of $4,096.00 is $256.00 which leaves a net balance of $3,840.00 expended upon the ground floor and this is in excess of the sum of $3,528.00 which represents seven years standard rent of that floor. The appellants seek to whittle down further this sum of $3,840 with the suggestion that some $532.00, spent upon the erection of a wooden cockloft, might well have been an added amenity rather than expenditure reasonably necessary to render the premises habitable. However, the existence of wooden cocklofts in ground floor pre-war premises is so very much a feature of such premises that in my view, on the balance of probabilities, this was not an added amenity but a construction necessary to render the premises reasonably habitable for the type of tenant likely to occupy such premises.

17. As for the suggestion that some of the expenditure upon the ground floor might well have been directed towards added attractions rather than to what was reasonably necessary to render the premises habitable, a perusal of the individual items in the estimate does not suggest that the expenditure was for anything other than necessities.

18. For my part, I am satisfied that a sum in excess of the equivalent of seven years standard rent was expended upon the premises for purposes wholly necessary to render them reasonably habitable. In so concluding, I have acted upon the basis of the translated receipt, produced in the court below, showing payments totalling only $15,000. Since making the calculations set out above, it has come to my notice that the original Chinese receipt reveals payments totalling $16,000. On the basis of the original receipt, the expenditure on the ground floor was even greater than shown in my calculations.

19. In the appellant's Notice of Motion, it was alleged that Exh.P2A, the estimate for repairs (on which was endorsed the receipt for monies paid to the contractor in connection therewith) and Exh. P1, the record of Tenancy Tribunal Application No. K2057 of 1954, should not have been admitted in evidence, or alternatively, should not have had any weight placed upon them. In the argument before us, it became apparent that the real contention was not as to admissibility but to the weight which could legitimately be placed upon the contents of these documents. I propose to say no more upon this subject than that I agree with the observations made by the President in his judgment, which I have had the advantage of reading.

20. Finally, in his reply to Mr. Chang's submission for the respondent, Mr. Asome argued that it was for the respondent to satisfy the court that the Rent Increases (Domestic Premises) Control Ordinance, Cap. 338, did not apply to the premises. I am unable to agree with that argument. The common law rule is that the onus of proof is always upon a party seeking to rely on an exemption or exception and there is nothing in the Ordinance to show that the legislature intended, when it introduced exemptions to the generality of the application of the Ordinance, to depart from that principle. Moreover the appellants were five months in arrear in payment of rent and in the light of that fact could not rely upon the protection of the Ordinance. On the contrary, s.6(3) thereof, whether specifically pleaded or not, operated to imply a condition for forfeiture of the tenancy once the rent was in arrear for fifteen days.

21. For all these reasons, I would dismiss the appeal with costs against the appellant firm here and in the court below.

24th December, 1971.

Representation:

Bernacchi, Q.C. and Asome (T.S. Tong & Co.) for appellants

D. Chang (P. Poon & Co.) for respondent.

(1) 1891 A.C., 325

(2) 1961 H.K.L.R., 242

(3) 1945 2 A.E., 209

(3) 1945 2 A.E., 55

(4) 1943 1 A.E., 209

(5) (1960) D.C.L.R. 274

(6) (1954) 3 All E.R. 455 @ 459.

14937-EN-1971-12-24

HOP HING (A FIRM) v. LAM PAK

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CACV000007A/1971

IN THE SUPREME COURT OF HONG KONG

(APPELLATE JURISDICTION)

CIVIL APPEAL NO. 7 OF 1971

(On Appeal from V.C. J. Action No. 4372 of 1970)

-----------------

BETWEEN
	HOP HING (a firm)	Appellants
	and
	LAM PAK	Respondent

-----------------

Coram: Huggins and Pickering, JJ.

Date of Judgment: 24th December 1971

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JUDGMENT

-----------------

Huggins, J.:

1. This is an appeal by a defendant tenant against a judgment of a District Judge whereby the tenant was ordered to give up possession of premises situate at and known as 574 Canton Road, ground floor, Kowloon. The action was brought for forfeiture on the ground of breach of the covenant for payment of rent implied by s.6 of the Tenancy (Notice of Termination) Ordinance. That section reads:

" In the absence of any express covenant for the payment of rent and condition for forfeiture, there shall be implied in every tenancy a covenant to pay the rent on the due date and a condition for forfeiture for non-payment within fifteen days of the due date."

It was not in dispute that the tenant had not paid the rent for upwards of five months but it was contended (a) that the premises were controlled by virtue of the Landlord and Tenant Ordinance so that the District Court had no jurisdiction to order the eviction of the tenant and (b) that the landlord had waived her right to forfeiture. There was a third defence alleged, namely that the rent demanded was in excess of the lawfully recoverable rent, but that was superfluous in relation to the claim for possession because it depended upon the provisions of the Landlord and Tenant Ordinance and if that Ordinance applied the District Court had no jurisdiction in any event. The third defence was, however, material to the claim for arrears of rent.

2. The ground of exception from the Landlord and Tenant Ordinance which was relied upon by the landlord was that the premises had remained continuously untenanted after 16th August, 1945 and had after 23rd May, 1947 (the date of the commencement of the Ordinance) been rendered habitable by extensive repairs. The relevant provision of the Ordinance is s.3(1), which reads in part:

This Ordinance shall not apply to - ................................................ (d) any premises which after the 16th day of August have remained continuously untenanted and which after the commencement of this Ordinance have been rendered habitable by extensive repairs effected at the expense of the landlord. For the purpose of this paragraph, the expression 'extensive repairs' means repairs wholly necessary for rendering the premises reasonably habitable and in respect of which expense incurred amounts to not less than the equivalent to the standard rent of the premises for seven years."

It is clear that before premises can be found to come within this paragraph there must have been premises in existence on 16th August, 1945 which were capable of being "repaired": see Kai Nam v. Ma Kam Chan⁽¹⁾. Although in the present case there was evidence upon which it would have been possible for the learned judge to conclude that the premises formed part of an entirely new building and therefore to say he was not satisfied that they were repaired premises, this matter never seems to have been drawn to his attention. If the premises did form part of an entirely new building then by virtue of s.3(1)(a) they would have been excepted from the provisions of the Ordinance only if there were an occupation permit issued under the provisions of the Buildings Ordinance after 16th August, 1945, as to which no evidence was given. It is a little surprising, in view of the nature of the evidence given, that this aspect of the case was not ventilated in the court below, but the question which now arises is whether it is open to the Appellant to take in this Court for the first time the point that a building which had ceased to exist as a building could not be "repaired" so as to bring it within s.3(1)(d).

3. So far as is humanly possible this Court will endeavour to see that justice is done between parties who come before it and will, at least in civil matters, not allow technical points to prevent its deciding the real issues on the merits, unless to ignore the technical point would itself create injustice. To this end the Court will, as a general rule, always allow a new point to be taken on an appeal where

	(a)	the point necessarily arose in the court below, as where it was apparent on the pleadings;
	(b)	there was no deliberate decision in the court below not to argue the point; and
	(c)	the Court is satisfied the evidence upon which it is asked to decide the new point established beyond doubt that the facts, if fully investigated, would have supported the new plea;

see HO Kwok-chu v. Chung Ying Boarding House⁽²⁾ and the cases there cited. Those conditions are not satisfied in the present case but counsel for the Appellant has argued that the Court will nevertheless always take or allow to be taken even on the hearing of an appeal any point which goes to the jurisdiction of the Court. The basis of this argument is the principle that the parties cannot by agreement give the Court a jurisdiction which it does not have. What is said here is that the parties have, by not raising expressly the issue whether a repairable building existed, allowed the Court to assume a jurisdiction which, if a repairable building did not exist, it did not have. The argument really comes to this, that if (as is well established) the parties cannot by consent give the Court a jurisdiction which it does not have nor can they agree the existence of facts which do not in truth exist but which if they did exist would give the Court jurisdiction: if they cannot thus agree the existence of facts which do not in truth exist nor can they give the Court jurisdiction by default, i.e. by not putting the true facts before the Court: consequently it must be open to a party at any time to adduce evidence to show the true facts.

4. At first sight this argument has a certain plausibility but the cases cited in support of it do not go so far. The case which comes nearest to supporting it is Sharpe v. Nicholls⁽³⁾. The landlord of premises protected under the Rent Acts died and his personal representatives brought an action for possession on the ground that the widow, who was one of the personal representatives, required the premises as a residence for herself. An order was made giving "the plaintiff" possession "subject to plaintiff allowing defendant a Rent Act protected tenancy" of part of the premises. The tenant appealed. No point had been taken before the County Court judge that unless, for a number of possible reasons, the premises had vested in the widow she as one of the two landlords could not recover possession on the ground that she alone required the premises as a residence: the whole case had been fought upon the question of greater hardship. Morton, L.J. said at p.387:

"It seems to me that, unless the plaintiffs alleged and proved the necessary facts to bring them within para. (h) of sch. I to the Act of 1933, it was not within the power of the county court judge to make an order for possession, and that this is a point of law which is open to the defendant in this Court."

He went on to say that as the plaintiffs had expressly pleaded that they were "the owners as personal representatives" they were precluded from now alleging that the widow was beneficially interested. Lawrence, L.J. regarded it as "a matter of very great doubt whether the defendant ought to be allowed to raise [this] point again", it having been implicitly admitted that the widow was the landlord and far from thinking that it was not open to the tenant to take the new point on appeal it was only with hesitation that he agreed to a new trial rather than dismissing the appeal, his reason for agreeing being that the case was tried "in the County Court where matters of proof and of form are not gone into with the same particularity as they are in the High Court". Although MacKinnon, L.J. referred to the facts' having been "totally unascertained" as a result of the failure to take the point below, he came to the conclusion that a new trial ought to be ordered "in the circumstances of this case". The circumstances included the fact that in any event the judge had made an order which he ought not to have made and it is not clear that the learned Lord Justice would have ordered a new trial if this other ground of appeal had not also existed: it is possible to construe his judgment as indicating that he was only allowing the new point to be taken on the rehearing because the case had to go back in any event. There is certainly nothing in any of the judgments to suggest that a party has almost a right to a new trial where the possibility exists that on such a new trial it might be proved that the true facts were different from the facts which were assumed or found at the first trial and that on the true facts the Court did not have jursidiction.

5. The other cases cited to us appear to me to decide no more than what was said by Goddard, L.J. in Davies v. Warwick⁽⁴⁾:

If the court of trial or the Court of Appeal finds that the case is one in which it is debarred from granting an order for possession, it is the duty of the Court to refuse it, even though the statute is not raised by the defendant, because there is no jurisdiction to grant it".

I fully accept that as a correct statement of the law but it does not necessarily follow that, where an appellate court finds that the case is one in which the trial judge would have been debarred from granting an order for possession if the facts had been other than those expressly or impliedly found by him, a new trial will be ordered for the purpose of confirming the correctness of the previous findings. It seems to me that three cases have to be considered. The first case is where on the facts found there was no jurisdiction. In such a case the appellate court will not close its eyes to the absence of jurisdiction simply because no point was taken in the court below: Francis Jackson Developments Ltd. v. Stemp⁽⁵⁾. The second case is where on the facts found it is doubtful whether the court had jurisdiction. Thus in Selwyn v. Hamill⁽⁶⁾, no point having been taken before him, the judge did not consider whether the alternative accommodation which he found had been offered to the tenant was as a matter of law "suitable alternative accommodation", in view of the fact that it consisted of two parts of a building which were separated by another part. Tucker, L.J. said at p.71:

As it appears clear from the judge's note that this point, which is a pure point of law, was never taken in the court below, if there were any possibility that, on a further investigation of the facts, the judge might come to the conclusion that No. 4A was reasonably suitable accommodation, I should certainly have been disposed to send the case back for a new trial because it is most unsatisfactory that cases should be dealt with without the tribunal to which jurisdiction is given under these Acts having had an opportunity of investigating the facts fully and properly. On the facts of this case, however, I am driven to the conclusion that it would be impossible as a matter of law for the judge to find that No. 4A by itself was reasonably suitable accommodation for this family which consists of an elderly invalid lady and two grown-up daughters who are working. The living-room which would have to be used as a bed-sittingroom and kitchen could not possibly be said to be accommodation which was reasonably suitable for these ladies. I, therefore, think that it would not be right to order a new trial and we are bound to allow this appeal."

The third case, which is the one before us, is where on the facts found (and, it may be, found not expressly but only by implication) it is clear that the court had jurisdiction but where, although there was evidence to support the findings, it is suggested that the judge did not appreciate the relevance of the facts because their relevance was not drawn to his attention and that he made his findings per incuriam. The contention that in such a case there ought to be a new trial seems to me to go far beyond any of the cases cited to us and to lead on to most dangerous ground. We are not to assume that the learned judge did not appreciate the significance of his findings. The fact that he did not expressly make a finding that there was a building capable of being repaired may be due not to the fact that he failed to see the importance of such a finding but rather to the fact that, counsel having taken no point as to this, he thought the matter did not call for express mention. I confess that I would have felt happier had he adverted to what was an important issue whether any point was taken or not, but just as where the language used by a judge in a civil action is capable of two equally possible constructions one of which would be a misdirection the benefit of the doubt will be given to the judge (per Lord Greene M.R. in Norman v. King⁽⁷⁾) so I think the benefit of any doubt must be given to the judge in a case such as this: the onus is on the Appellants to show that the failure of the judge to make an express finding was due to his overlooking the fact that a finding was necessary. Even if the reason counsel did not address the judge on this aspect of the case was that they overlooked the necessity for such a finding that does not justify an inference that the judge overlooked it nor does the absence of an express finding tilt the balance in the Appellant's favour.

6. Counsel for the Respondent further contended that the point ought not to be allowed to be taken on appeal in view of the manner in which the case was presented in the court below. The Respondent having pleaded that the premises had been extensively repaired the Appellants put that matter in issue. They went on to allege that in previous proceedings the Respondent had alleged that the premises were "a new building within the meaning of the Landlord and Tenant Ordinance" and they "repeated the same dispute in this action". That was an odd way of pleading in a case where the Respondent was not alleging that the building was new. However, the Appellants were themselves denying that the premises were part of an entirely new building and it is said that they should not now be allowed to allege what they have expressly denied. I accept that para. (a) and (d) of s.3(1) are mutually exclusive in the sense that a structure which is not "a building" at all cannot be a building which has been "extensively repaired" and that a structure which incorporates what is itself "a building" cannot be "entirely new". But in the event every structure must be either a building (which can be repaired) or not a building. I think there is no reason why a party should not plead these exceptions in the alternative if an occupation permit has been issued: it may well be doubtful whether what remained before any work was done on it constituted in law a building or not. Here the Respondent did not plead in the alternative: she elected to rely on para.(d), thus committing herself to one line of attack. In their Defence the Appellants chose to admit the existence of a building which could be repaired and to contend merely that the repairs were not extensive. They emphasised their admission by expressly denying what had been alleged by the Respondent in the previous proceedings but not in these, namely that the building was entirely new. This puts beyond doubt that it is not open to the Appellants to suggest that the building is entirely new without amending their pleading.

7. It can still be asked whether there was any evidence which would support the implicit finding that the premises were repaired in the manner contemplated by the Ordinance and whether, if there was such evidence, the finding was nevertheless against the weight of the evidence. If the only evidence showed that what remained after the war was something less than "a building", as that word is commonly understood, then the Respondent would have failed to discharge the onus of proof which was upon her: MA Kam-chan v. Kai Nam⁽¹⁾. The matter was certainly not investigated as fully as one could have wished and it will be necessary to refer in some detail to the evidence which was given. Before doing that, however, I must deal with an issue raised concerning the admissibility of some of the evidence.

8. Before the District Judge the Respondent adduced the record of some proceedings which took place in the Tenancy Tribunal in 1954. In those proceedings the then tenants of the premises sued the Respondent's husband for what has always (though usually erroneously) been called "a variation of the rent payable". The proceedings followed upon a similar suit brought against the tenants by the sub-tenant, as a result of which the tenants were in danger of finding themselves receiving a controlled rent from their tenant but having to pay an uncontrolled rent to their landlord. Counsel for the Appellants stigmatizes the suit of which the record was adduced as "a friendly action", by which he appears to mean a collusive action designed to defeat the claim of the sub-tenant. He points out that the record discloses no cross-examination of the two witnesses who gave evidence; that the first witness called was indeed the wife of the landlord (the present Respondent), who was, by permission of the learned President, actually representing the landlord in the proceedings; that the second witness was a building contractor who had been employed by the landlord; and that no attempt appears to have been made by the applicants to show that the Tribunal had jurisdiction. Counsel's first contention, however, is that the evidence given by the Respondent in those proceedings is shown by her evidence before the District Judge to have been hearsay: although she said in 1954 "I had the premises repaired", "we approached a contractor ...... to have the premises repaired" and so forth, she admitted in cross-examination in 1971 that "the whole thing was handled by [her] husband": "I myself do not know what repairs were carried out. It was all in the hands of my husband": "I agree that I don't know if the prices quoted in the estimate are correct prices. All that was handled by my husband". It is to be observed that in his submission before the learned District Judge counsel for the Respondent is recorded as having said "record of Tenancy Tribunal produced primarily for evidence of CHEUNG Fat who is now dead". The submission is that if it was produced even incidentally with the intention that the evidence given by the Respondent in 1954 could be used to corroborate or to add to the evidence she gave in 1971 that was not proper unless that part of the record was a statement which was admissible under the provisions of s.38D of the Evidence Ordinance and, even if the evidence would normally have been admissible under s.38D, it was not admissible once it was shown that the statement was in any event a record of hearsay. No point was taken on an absence of the notice required under r.3 of the Evidence (Hearsay) Rules and on a breach of s.38D(2). In my view the record was admissible under s.38D and if any part of the Respondent's evidence as recorded was hearsay that goes only to the weight which should be attached to the record. In so far as the record contained the evidence of the contractor and, as an exhibit, the contractor's estimate and receipt, no possible objection can be taken to its admission under s.38D.

9. Turning to the weight which could properly be attached to the Respondent's evidence in 1954 I agree that to the extent that it was shown to be hearsay no weight ought to have been given to it but the mere fact that it was the husband who handled the business does not mean that the Respondent knew nothing at all about what was going on: she might not be able to give details of what was done to the premises but she must have seen for herself the general condition they were in. Indeed for my part I would think that her evidence in 1954 as to the state of the building was more likely to be accurate than her recollection in 1971 when (now aged 85 years) she said "There was a balcony and a wall and nothing else ....... It was like a piece of deserted land" (not, as the learned judge said in his judgment, "a mere shell-one or two walls and a seriously damaged roof"). Her evidence in examination-in-chief was also difficult to reconcile with her statement in cross-examination that "the upper part of the premises was in a shabby condition". Her evidence in 1954 was much more consistent with the evidence then given by the contractor, a person whose qualifications would render him the more likely to be able to give an accurate picture of the premises as he found them.

10. The evidence of the contractor was that "there was nothing left except the four walls and part of the roof". The estimate contains no reference to anything which could be "repairs" to the roof, although the roof is expressly mentioned, and no reference to any re-building of either internal or external walls. On the contrary in that it refers to "plastering internal and external walls" at all levels it corroborates the contractor's oral evidence. Incomplete as the investigation no doubt was I am quite unable to say that the conclusion of the learned judge that a repairable building existed was against the weight of the evidence, let alone unsupported by any evidence at all.

11. Next it is said that it was not sufficiently proved that the premises remained continuously untenanted after 16th August, 1945 and that they were rendered habitable after the commencement of the Ordinance. Clearly the onus of proof was upon the Respondent: Tang Sai On v. Tang Kwok Yim⁽⁸⁾. Although the learned judge said that the Respondent and her husband "abandoned" the house during the Japanese invasion it is not suggested that the abandonment was other than merely physical: they returned to Hong Kong in 1945 and the husband exercised his right of ownership. In fact the only evidence was that they left Hong Kong "during World War II" and it may not have been during the invasion at all. The judge continued:

They found the house on their return to be a mere shell-one or two walls and a seriously damaged roof. In this condition it was totally uninhabitable".

He did not deal expressly with the possible existence of a tenancy. If he assumed that a house which was uninhabitable could not be tenanted then with the utmost respect I oould not agree: there is no principle of law which prevents the letting of a tumble-down house. I think we must again give the judge the benefit of the doubt and conclude that he inferred the absence of a tenancy not merely from the condition of the premises but also from the absence of any evidence of a tenancy before the Respondent and her husband left Hong Kong during the war, the unlikelihood that they would have let premises while they were absent from Hong Kong and the fact that no tenancy can have existed when they let the premises to SIN Pui-ying in about 1947. There was then the evidence of the Principal Rating Valuation Surveyor, who was able to say from the records in his custody.

...... the rating assessment was cancelled after cessation of hostilities but continued shortly afterwards in respect of the ground floor. At a much later date an assessment was returned from the whole house".

He was not asked what he meant by "shortly afterwards" and "at a much later date", although no doubt he would have been able to give exact dates if asked. He inferred, as would anyone conversant with the law of rating, that the ground floor must have been both habitable and occupied when the new assessment was made. In the absence of any precise date, however, this evidence does not show that the premises were habitable before 23rd May, 1947, far less that they were tenanted. The contractor said in 1954 that in 1947 "the property was quite uninhabitable". In the result I think there was enough evidence to warrant a finding that the premises remained untenanted during the material period.

12. What repairs were done to the premises? It is submitted that there was altogether insufficient evidence of the repairs done to this ground floor even if, as did the learned District Judge, one accepts the evidence of the repairs done to the building as a whole, which evidence counsel says is itself unreliable. The only evidence is that contained in the record of the Tenancy Tribunal proceedings and it cannot be gainsaid that it is far from strong. The contractor said:

"I remember that the total cost [in respect of the whole house] was about $16,000. About $5,000 was spent on the ground floor including workmanship and materials ...... I am quite sure that not less than $5,000 was spent on the ground floor. ...... All the repairs I did were necessary for making the property habitable. No money was spent on what was unnecessary".

That evidence may well have been true, but when one looks at the estimate one sees at once that there was in it much material for cross-examination of the contractor. One item of $1,060 was for "Ground floor, staircase walls, staircase risers and treads, one flight, amount for labour and materials". Although this work was at ground floor level it clearly was not in the ground floor premises which are the subject matter of this case. Another item related to a wooden cockleft and it is quite possible that this was an addition rather than reinstatement of what had been there before. If his evidence that before he started work "there was nothing left except the four walls and part of the roof" was true how did it come about that the estimate contained no item for reinstating a floor at first floor level (which would supply a ceiling to the ground floor premises) or for reinstating the rest of the roof? How much of the $16,000 was in fact referable to the roof? The learned President appears to have accepted the estimate at its face value and without careful scrutiny. The learned District Judge also appears to have made no attempt to apportion the total spent on the whole house between the ground floor premises and the other parts of the building but we are in as good a position as he was at the time he came to give judgment to make such an apportionment. If one takes the figure of $5,157.50 which is given for the ground floor, corrects the addition to $5,156.50 and deducts the items of $1,060 already mentioned as not being referable to the premises, one still gets a figure which is more than $3,528, the amount of seven years' standard rent, and the repairs to the premises are therefore "extensive repairs", subject to what I shall say in a moment about their being "necessary". Even if one deducts $532 for the wooden cockloft the remainder is $3,564.50. Another doubtful item is the sum of $185, which includes "drains". Whether these were solely attributable to the ground floor premises we do not know but as the item contains also "cooking range, sink, latrine, any deduction for drains not attributable to the ground floor premises might reasonably not exceed $36.50. It also seems not unreasonable to suppose that some figure, however small, ought to be added in respect of such work done to the roof (and some clearly was done) as would have benefited the ground floor. This was perhaps the weakest link in the evidence on behalf of the Respondent and it is unfortunate that the learned District Judge despite the discrepancy between her evidence at the trial and all the evidence in the Tenancy Tribunal proceedings, including her own, relating to the structure which remained before repairs started described the Plaintiff's evidence as "unshaken". Nevertheless, I conclude that the evidence as to the extent of the repairs to the ground floor premises is just enough to support the conclusion which he reached.

13. I have already referred to some of the evidence on the question whether the repairs done were necessary to render the premises habitable. If they were in fact habited before 23rd May, 1947 that would effectively defeat the Respondent's claim. There was evidence, which the learned judge obviously accepted, that the premises were both unhabited and unhabitable before the repairs were carried out. It would, indeed, have been interesting to know where the Respondent and her husband lived on their return to the Colony after the war, but she was not asked that either in the Tenancy Tribunal proceedings or in the present action. However, on this point the Plaintiff was, as the learned judge said, unshaken and it is impossible to say he was wrong to accept her evidence, supported as it was by the contractor's evidence. As to the necessity for the repairs actually done I have already pointed out those items upon which any doubt could exist and I think there is no reason to disagree with the conclusion of the learned judge that "extensive" repairs were necessary to render the premises habitable.

14. One final difficulty arises in that the repairs must be shown to have been "at the expense of the landlord". Even accepting that the estimated cost of the repairs to the whole building were $16,010.50 (the correct total) and that they were carried out in full, the receipt endorsed on the estimate appears from the translation to have been for only $15,000. The Respondent said in evidence "the sum of over $16,000 was paid" and "...... the contractor got his pay ...... and the contractor was paid according to the agreed price". However, the price was agreed between her husband and the contractor and she "would not know if the work had been done differently to what is stated in the estimate". The contractor was not asked in the Tenancy Tribunal proceedings what sum he received. While I would not attach much weight to most of the evidence given by the Respondent in those proceedings there is one piece of evidence she gave which I think is different from the rest: she said "it is included in [the receipt] that a deposit $5,000 was paid on 26.9.47 that $3,000 was paid in 28 Nov. 1947 another $2,000 on 5 Dec. 1947 ......". When one looks at the original Chinese document one finds that it does show a payment of $2,000 on 5th December, 1947 although the translation, as I have said, gives the figure of $1,000 which was referred to throughout the argument. We did not, of course, have any evidence on this but justice demands that we should not act upon a translation which according to our information is incorrect and if counsel had not been able to agree that the error existed we would have had to call an official translator and, if desired, to hear any other evidence which might have been tendered as to the meaning of the document. However it has now been argued that the receipt does in truth confirm that the $16,000 was paid. Even assuming that the $10.50 not covered by the receipt was never paid the proportion of this attributable to the ground floor premises is in the circumstances negligible.

15. The last complaint made on behalf of the Appellants is that the learned District Judge did not consider what was the "user" of the premises, the contention being that unless the premises were proved to be premises for the purposes of the Rent Increases (Domestic Premises) Control Ordinance the Appellants were entitled to protection under that Ordinance, even if the premises were not protected under the Landlord and Tenant Ordinance. As I understand this contention it is that protection would arise by virtue of Part II of that Ordinance. However, if the Appellants desire to claim the protection of that Ordinance it is for them to prove that the premises are domestic premises and not for the Respondent to prove that they are not. The Appellants did not plead that the premises were domestic premises and the matter was never investigated. There is nothing in the evidence which would support a finding that the Appellants' tenancy was a "domestic tenancy" within the meaning of s.5. Had this point been raised the Respondent could in any event have applied to amend so as to allege in the alternative that if the tenancy were a domestic tenancy an identical right of forfeiture arose by virtue of s.6(3) and s.7(1)(b). This is another new point which it is now too late for the Appellants to raise. It was submitted that there was no need to plead s.6 of the Tenancy (Notice of Termination) Ordinance or s.6(3) of the Rent Increases (Domestic Premises) Control Ordinance since the condition for forfeiture is implied as a matter of law. But how is a defendant to know whether the condition for forfeiture relied upon by a plaintiff is alleged to arise from contract or to arise from the statute? This is information which he is entitled to have so that he may know what case he has to meet.

16. In the course of his judgment the learned judge said that the previous "judgment of the Tribunal must be binding upon itself to the extent of and in the event of other parties applying in respect of the same premises". He went on to refer to "the very floor of the same premises" and it seems, therefore, that he sometimes used the word "premises" to indicate the building and not merely the premises as defined in the Landlord and Tenant Ordinance. When thereafter he referred to "the very same premises" it is not entirely clear what he meant and I merely wish to say that if his conclusion was that a tenancy of one part of a building could not be protected when a tenancy of another part of the building was unprotected I could not agree. The meaning of "a judgment in rem" in proceeding under the Landlord and Tenant Ordinance was considered by Judge Charles in Feng v. Julyan⁽⁹⁾.

17. I think I have dealt with all the matters which were raised in the course of the argument and in my view this appeal should be dismissed.

Representation:

B. Bernacchi, Q.C. and M. Asome (T.S. Tong & Co.) for Appellants

D. Chang (P. Poon & Co.) for Respondent.

(1) 1956 A.C. 358

(2) 1965 H.K.L.R. 894

(3) 1945 K.B. 382

(4) 1943 1 All E.R. 309, 313.

(5) 1943 2 All E.R. 601

(6)1948 1 All E.R. 70.

(7) 1946 1 All E.R. 339, 441.

(8) 1957 H.K.L.R. 150, 153.

(9) 1953-55 H.K.D.C. L.R. 111, 117.