Part V Possession Application2002

Gloryson Ltd. v. Alfred Lau & Co.

Files (2)

34855-EN-2002-09-26

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LDPE000238A/2002

LDPE238/2002
(Review)

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

New Tenancy Application No. 238 of 2002

BETWEEN
	Gloryson Limited	Applicant

	AND

	Alfred Lau & Co.	Respondent

Coram: Member W K LO

Dates of review hearing: 10 September 2002

Date of judgment: 26 September 2002

__________

JUDGMENT

__________

Background

2. On 31 July 2002, the judgment for the Applicant's application was handed down to the parties. The orders were:

1. The Application for vacant possession of the suite premises to the Applicant is dismissed;
2. The Respondent shall within 7 days from today pay the Applicant arrears of mesne profits from 12 March 2002 to 30 April 2002 as assessed by the Tribunal in the sum of $25,664.52;
3. The Respondent shall also within 7 days from today pay the Applicant (i) arrear of rates for the period from 1 April 20002 to 30 April 2002 in the sum of $244.95 and (ii) arrears of management fee for the period from 12 March 2002 to 30 April 2002 in the sum of $7,699.35;
4. The Respondent shall within 7 days from today pay the Applicant's costs of this Application, in the sum of $540;
5. Payment out to the Applicant upon payment in by the Respondent, if any.

3. On 27 August 2002, the Respondent filed an application for review of the judgment dated 31 July 2002. The Respondent also filed an affirmation setting out the following reasons for the review:

1. The mesne profit should be calculated at the rate of $10 per sq. ft., instead of $12 per sq. ft. as determined by the Tribunal;
2. There was no opportunity for him to argue for the costs of the original application before the Tribunal handed down its Judgment including a cost order after receiving written submissions by the parties;
3. The Applicant had without lawful ground and justification deducted a sum of $40,319.07 from the deposit of the Respondent, leaving only a balance of $2,830.93. The Respondent submitted that the Tribunal should have the jurisdiction as the District Court in the granting of remedies and reliefs, equitable or legal, as the District Court.

4. On 27 August 2002, the review application was fixed for hearing on 10 September 2002

Assessment of the mesne profit of the Premises from 12 March 2002 to 30 April 2002

5. The Respondent produced as an attachment to his Affirmation a copy of the tenancy agreement of the Premises between the Respondent and the new landlord. That tenancy agreement was dated 8 August 2002, eight days following the date of the Judgment for the original application. In clause (1) of that tenancy agreement, the rent was stated as $13,000 per month, exclusive of rates, management fee and Government Rent. Since the agreed gross area of the Premises is 1,300 sq. ft., the unit rate of the current rent passing is $10 per sq. ft. of gross area.

6. We find that that rental evidence adduced by the Respondent could not have been made available to the Tribunal when the matter of the mesne profit was considered in the hearing for the original application. And, although there is the time difference (of about 5 months) between the date of commencement of that new tenancy for the Premises and the subject period under consideration, it is not too far away for the purpose of valuation.

7. The Applicant did not object to the production of that new rental evidence by the Respondent. Also, the Applicant chose not to make any submission regarding the revised assessment of mesne profit by the Respondent.

8. In view of the new evidence produced by the Respondent and that no other evidence was adduced by the Applicant regarding the assessment of mesne profit, the Tribunal agrees to re-assess the mesne profit of the Premises for the period from 12 March 2002 to 30 April 2002 by using a unit rate of $10 per sq. ft., i.e., same as that fetched by the new tenancy of the Premises. Therefore, applying this rate to the gross floor area of the Premises, the mesne profit for the said period is estimated to be in the sum of $21,387 (i.e. $10 per sq. ft. x 1,300 sq. ft. x [1 +{20/31}]).

Deduction of deposit by the Applicant

9. The Respondent submitted that the Applicant had wrongfully deducted a sum of $40,319.07 from the deposit of the Respondent, leaving only a balance of $2,830.93. The Respondent stated in his Affirmation attached to the present review application that the Tribunal had the jurisdiction to grant remedies and reliefs, equitable or legal, as the District Court. Therefore, the Tribunal erred in the Judgment of 31 July 2002 in saying that the matter of the Respondent's allegation did not form the subject matter of the Applicant's original application and was also outside the jurisdiction of the Tribunal.

10. It turned out that the version of the Lands Tribunal Ordinance ("the Ordinance") quoted by the Respondent was an out-dated issue of the Ordinance (Cap. 17 of the Laws of Hong Kong). According to the current version of the Ordinance, sub-section (9) of section (8) should read, as follows:-

"(9) In the exercise of its jurisdiction, the Tribunal shall have the same jurisidiction to grant remedies and reliefs, equitable or legal, as the Court of First Instance." (Added 30 of 1983 s.2. Amended 27 of 1993 s.43; 25 of 1998 s.2)

11. However, the Applicant's original application was made pursuant to sub-section (8) of the Ordinance, which also contains many other sub-sections, in addition to sub-section (9). In particular, sub-section (8) of section 8 is relevant in processing the original application by the Applicant:

" (8) The Tribunal shall have the jurisdiction, in any application for possession or for ejectment, under the Landlord and Tenant (Consolidation) Ordinance (Cap. 7) or otherwise, and in any application for a new tenancy under Part IV of that Ordinance, whether or not it grants any such application, to make orders for the payment of rent, mesne profits, including interim payments of rent and mesne profits, and for the payment of any other money which is due under the tenancy or sub-tenancy." (underline added)

12. Therefore, it is abundantly clear that although the Tribunal did not grant an order for possession, the Tribunal did have the jurisdiction to make orders for the payment of mesne profits and any other money (i.e., rates and management fee) that is due under the tenancy.

13. Also, sub-section (8A) of section 8 has the following provision:

"(8A) The Tribunal shall have jurisdiction to determine any claim or counterclaim or set-off and counterclaim transferred to it under section 7 or 10 of the Small Claims Tribunal Ordinance (Cap. 338)."

14. Therefore, apart from the cases covered by the above sub-section (8A) of section 8 of the Ordinance, there is no provision under the Ordinance for the Tribunal to determine any counterclaim made by the Respondent, including an alleged wrongful deduction of money from the deposit kept by the Applicant, in an application for possession and payment of mesne profits and any other money due under the tenancy (i.e. the original application lodged by the Applicant).

15. Whilst sub-section (9) of section 8 of the said Ordinance provides that the Tribunal shall have "the same jurisdiction to grant remedies and reliefs, equitable or legal, as the Court of First Instance", this must be read in the context of the first few words of the said sub-section, "In the exercise of its jurisdiction." That is it say, the said sub-section did not state that the Tribunal has the same jurisdiction as the Court of First Instance, when dealing with such matter as for instance, a counter claim by the Respondent that the Applicant wrongfully deducted a certain sum of money from the Respondent's deposit kept by the Applicant. For this reason, the Tribunal decides that the Respondent's submission in the review cannot be supported by interpreting section 8 of the said Ordinance as a whole.

Existence of rent-free period from 12 March 2002

16. Although the Respondent did not state this as a ground in his Affirmation, he repeated in his submission what he had said before regarding his interpretation of the rent-free period provisions in the lease signed by the Applicant and the Respondent. He first said that "by conduct", he should be entitled a rent-free period from 12 March 2002, during the third-year of the tenancy. When asked by the Tribunal to clarify the meaning of "by conduct", the Respondent admitted that what he actually meant was that "by implication", there should be a rent-free period for the option year.

17. The Applicant opposed this application, and submitted that the reasoning of the Tribunal had been clearly set out in the Judgment dated 31 July 2002.

18. The Tribunal finds that the Respondent was repeating himself in the review hearing what he had said in the original hearing. His reasons for suggesting that there should be a rent-free period in the third year of the tenancy were the same as before. There is nothing new in his arguments given in the review. Since the Tribunal thoroughly considered the matter in the Judgment dated 31 July 2002, the Tribunal is not going to repeat all the analysis here again. In a nutshell, the main reason for rejecting the Respondent's argument was that in the original written tenancy agreement entered into by the parties, the rent-free period referred to 4 specified months during the 2-year term of the tenancy. Whilst the said tenancy agreement mentioned about "with an option to renew for another 1 year lease commencing from 12th March 2002 to 11th March 2003 subject to the market rate," there was no similar or other provision for any rent-free period during the option year. Therefore, contrary to what the Respondent suggested, there was no provision stating that the rent-free period in the option year would be automatically given. So, the agreement should not be construed in such a way that "by implication", a rent-free period in the option year would have to be given by the Applicant. Hence, the Respondent's argument for a 2-months' rent-free period from 12 March 2002 must fail.

Cost of the original application

19. The Respondent submitted that since according to the Judgment given on 31 July 2002, the Applicant's application for possession was dismissed by the Tribunal, the Respondent should be awarded the costs of the original application but not the other way round. Also, the Respondent added that the Applicant had made an error in the application in that the Applicant applied for recovery of rent, but not mesne profit. Finally, the Respondent submitted that the costs for the original application should be awarded to the Respondent, at District Court scale, to be taxed if not agreed.

20. The Respondent submitted that since Mr. Alfred Lau was a solicitor, he was acting for the Respondent, Alfred Lau & Co., in the capacity as the latter's solicitor but not as the latter's principal appearing in person. The Tribunal cannot accept this argument. The Tribunal has checked the hand written notes of the proceedings and find that Mr. Alfred Lau did represent the Respondent in these hearings held on 4 different dates, 30 April 2002, 29 May 2002, 21 June 2002 and 31 July 2002. However, there was no other person or solicitor representing the Respondent while Mr. Alfred Lau was giving evidence. For example, on 29 May 2002 and 21 June 2002, Mr. Alfred Lau himself gave much evidence regarding the negotiation with the Applicant and the new landlord, and the valuation of the mesne profits respectively.

21. In addition, the Tribunal finds that before giving evidence, Mr. Alfred Lau affirmed in each and every occasion in words that follow: "I (name in full) solemnly affirm that the evidence that I shall give shall be the truth, the whole truth and nothing but the truth."

22. In the circumstances, the Tribunal cannot agree that even if costs should be awarded to the Respondent, it should be awarded on solicitor scale as if a solicitor represented the Respondent. Therefore, partly for this reason and partly because the Applicant only sought costs in the sum of $540, the Tribunal decided to award costs summarily after receiving the written submissions by the parties and without hearing the parties' submissions on costs. The Tribunal reached such a decision since the Tribunal considered that it would be more cost effective to all the parties. However, as a matter of principle, the Tribunal agrees with the Respondent that the parties do have the rights to address the Tribunal on the matter of costs. Therefore, in the review, the parties were invited to address the Tribunal again on this matter. The Respondent's position and reasons for seeking costs have been summarized above. On the other hand, the Applicant submitted that the same cost order as appearing in the Judgment dated 31 July 2002 should remain unchanged.

23. The Tribunal has considered the submissions on costs put forwarded by the Applicant and the Respondent. Regarding the Respondent's argument that the Application for possession was dismissed, the Tribunal would like to point out that this matter had already been considered in the Judgment dated 31 July 2002. The important point here is whether the cause of action existed at the date of the original application by the Applicant (i.e., the date of the Application, Form 22). The Tribunal found and stated in the Judgment dated 31 July 2002 that from the evidence available to the Tribunal, the cause of action did exist at the date of the original application. Since the Respondent did not even rebut this finding in his review application, the Tribunal finds it hard to understand his argument that he should be awarded costs only because the Tribunal did not make an order for possession as originally sought by the Respondent. In practice, there may well be many reasons for not granting an order for possession, such as when the tenant has already left the premises, or the tenant has already returned the premises to the landlord, or as in this case, the old landlord has sold the premises to a new landlord in the interim period; however, either one of these circumstances has nothing to do with the cause of action and the reasons for awarding costs. That the Respondent cannot understand this simple logic, which has been clearly set out in the Judgment dated 31 July 2002 is quite beyond the Tribunal's understanding.

Costs of this review

24. Of all the grounds stated by the Respondent as to be the reasons for the review, the Tribunal finds that the Respondent was only correct in stating that he did not have the opportunity to argue for costs after his filing of the written submission but before the Tribunal handed down the written Judgment, which included the costs order on 31 July 2002. Although the Respondent succeeded to have the mesne profit re-assessed in his favor, this was only due to the production by the Respondent of new evidence, which was not made and could not have been made available to the Tribunal in the original hearing. So, the Respondent should not be awarded costs on that issue. For all other reasons, the Respondent was not correct. The Respondent failed to persuade the Tribunal to set aside or amend any of the Orders made on 31 July 2002, other than the Order on mesne profits. This includes the following: he failed to persuade the Tribunal to decide on the matter of his alleged unlawful deduction of deposit by the Applicant; he failed to persuade the Tribunal to reverse or amend its decision on the interpretation of rent-free period; and he failed to revere or amend the costs order of the original application. Hence, all in all, if the Applicant had asked for the costs of this review application, the Tribunal shall award costs to the Applicant. Nevertheless, probably since the Applicant was represented by a staff of the Applicant's agent, the Applicant did not ask for the costs of this review application. Hence, in the circumstances, the Tribunal decides not to give any costs order for this review.

Orders for the Review

25. Therefore, the following orders be made:

1. Upon review, the Order No. (2) made on 31 July 2002 be amended to as follows:
"The Respondent shall pay the Applicant arrears of mesne profits from 12 March 2002 to 30 April 2002 as assessed by the Tribunal in the sum of $21,387";
2. Apart from Order No. (2), all the other Orders made on 31 July 2002 remain unchanged;
3. There is no order as to costs for this review application.

	(W. K. LO)
	Member, Lands Tribunal

Representation:

Ms. Yeung, Fuk Yi Floria, the representative of Gloryson Ltd., for the Applicant

Mr. A. Lau, the representative of Alfred Lau & Co., for the Respondent

22868-EN-2002-07-31

Gloryson Ltd. v. Alfred Lau & Co.

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LDPE000238/2002

LDPE238/2002

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

New Tenancy Application No. 238 of 2002

BETWEEN
	Gloryson Limited	Applicant

	AND

	Alfred Lau & Co.	Respondent

Coram: Member W K LO

Dates of hearing: 30 April 2002, 29 May 2002 and 21 June 2002

Date of judgment: 31 July 2002

____________

JUDGMENT

____________

Background

1. The Applicant was the former landlord and the Respondent the tenant of the subject premises known as Unit 1901-2 Wing Shan Tower, 173 Des Voeux Road Central, Hong Kong ("the Premises"). According to the information given by both parties, the Applicant has disposed of the Premises on 30 April 2002. Prior to the assignment of the Premises to the new owner, the Applicant filed an application to the Tribunal on 7 March 2002 (as amended on 26 March 2002), applying for recovery of possession of the Premises on the ground that "the Respondent has failed to pay rent since 1 December 2001 and the expiry of Tenancy Agreement on 11 March 2002, as per attached". The attachments set out the outstanding sums owned by the Respondent: rental for the period from 1 December 2001 to 11 February 2002 in the sum of $40,439.29 calculated at the rate of $16,000 per month or part thereof, management fee for the period from 1 December 2001 to 11 March 2002 in the sum of $15,700.65 calculated at the rate of $4,680 per month or part thereof, and interest for the period from 1 December 2001 to 28 February 2002 in the sum of $1,986.99 calculated pursuant to Tenancy Agreement. The total amount claimed in the Application was $58,126.93.

2. The Respondent filed a notice of opposition on 19 March 2002, stating the following three grounds for opposing the application:

1. Rental for December 2001 & January 2002 had been paid.
2. The Respondent opposes that the air-conditioning has been out of service at many occasions.
3. The Respondent opposes that there are water leakage in many parts of the Premises.

3. In the hearing held on 30 April 2002, the Respondent sought and was granted leave to amend the Notice of Opposition. The Respondent added the following additional two grounds for opposing the application:

4. As per the 1st paragraph of the tenancy agreement dated 4th July 2000, it was provided that no rent shall be paid from 12th March 2000 to 11th May 2000, 1st March 2001 to 31st March 2001, 12 February 2002 to 11th March 2002 (i.e. two months free rental for the 1st year and the 2nd year of the tenancy). It was also agreed with Mr. Sit, the representative of the Landlord that two months' free rental would be applicable to the one year option to the tenant.
5. Also by the 15th line of paragraph one of the tenancy agreement, it is stipulated that rental for the option to renew would be subject to the market rate (i.e. the current present market rental rate at the time of the option). If the amount is not agreeable between the parties, the matter will be referred to arbitration. In consequence, it would be exceedingly wrong for the landlord to charge $16,900.00 for the rental for the option renewal.

4. Mr. A. Lau for the Respondent gave evidence that the Respondent had been negotiated a new tenancy with the new owner subsequent to the formal assignment of the Premises to the new owner on 30 April 2002. Therefore, the period in dispute between the Respondent and the Applicant was only for a short period of time, from 12 March 2002, the date after the expiry of the previous tenancy, to 30 April 2002.

Whether cause of action existed for the Applicant at the date of Application?

5. The Applicant conceded that since the Premises as part of Wing Shan Tower had already been assigned to the new owner on 30 April 2002, the Applicant could not recover possession of the Premises from the Respondent. Therefore, the Applicant in the final submission only sought recovery of rent, rates and management fee for the period from 12 March 2002 to 30 April 2002, with the rent to be calculated at the market rental rate to be determined by the Tribunal.

6. Nevertheless, for the purpose of deciding the merit of the case and hence the costs to be awarded, the Tribunal still has to determine whether as at the date of Application, there was the cause of action on the part of the Applicant. In this regard, the Respondent in the Notice of Opposition pointed out that the rents for December 2001 and January 2002 had been paid. There was however no evidence from the Respondent as to the actual date of payment of these two months' rents. Also, the Respondent did not challenge the evidence from the Applicant that the cheques for the payments of these rents for the period from 1 December 2001 to 11 February 2002 were only received by the Applicant on 12 March 2002, 21 March 2002 and 26 April 2002 (details shown in Exhibit A2), all of these dates being after the date of Application, 7 March 2002.

7. The Respondent also raised in the Notice of Opposition that "the air-conditioning has been out of service at many occasions" and "there are water leakage in many parts of the premises". However, clause 2 in page 2 of the Tenancy Agreement contains the following stipulation:

"The Tenant hereby agrees with the Landlord as follows: (a) to pay the rent for the premises and the Operating Charges in advance to the landlord...The Tenant shall pay to the Landlord...all such sums due hereunder...without any deduction on account of any set-off or claim which the Tenant may have against the Landlord..." (Underline added)

8. Therefore, the above ground nos. 2 & 3 of the Notice of Opposition do not give the Respondent as the tenant the right to refrain from paying the rents, etc. in advance to the Applicant.

9. The other grounds, nos. (4) and (5) of the Notice of Opposition only affect the assessment of rent and / or mesne profits for the period from 12 March 2002 to 30 April 2002, since the parties did not dispute that under the Tenancy Agreement, the rent from 1 December 2001 to 11 February 2002 should be calculated at the rate of $16,900 per month, and there was a rent-free period between 12 February 2002 and 11 March 2002.

10. Hence, the Tribunal finds that as at the date of Application, the Respondent owed the Applicant outstanding rents and management fee from 1 December 2001. Thus, notwithstanding that the Respondent had paid two months' rents after the lodging of the Application by the Applicant (i.e., ground no. 1 of the Notice of Opposition), the cause of action did exist at the date of Application. The Applicant will also be entitled to costs of this Application.

Whether a 2 months rent-free period was applicable to the 1-year option period and if yes, when was the rent-free period?

11. The Respondent in their final submission submitted that "part of the 2 months rent free period for the option year should be applied from 12th March 2002 to 30th April 2002 for which the old landlord has acted accordingly in the first and second year period and there is no principle of law or logic that such rent free period should not be applied in the 3 (sic) year (the option year)."

12. The first question the Tribunal has to ask is, whether the tenancy agreement ("Tenancy Agreement", a copy of which is produced as Exhibit A1) entered into between the parties on 4 July 2000 is a 2-year tenancy or a 3-year tenancy. Under clause 1 on page 1 of Tenancy Agreement, the term and the rent-free period of the tenancy are stated as follows:

"for the term of 2 years fixed commencing on the 12th March 2000 and expiring on 11th March 2002, with an option to renew for another 1 year lease commencing from 12th March 2002 to 11th March 2003 subject to the market rate, at the calendar monthly rent of ...HK$16,900 exclusive of rates, operating charges and Government Rent and at the calendar monthly charge of ...HK$4,680 subject to revision from time to time...Provided that no rent shall be paid from 12th March 2000 to 11May 2000, 1st March 2001 to 31st March 2001, 12th February 2002 to 11th March 2002." (Underline added)

13. It is clear from the above that the tenancy stated in the Tenancy Agreement is a 2-year term tenancy, with an option to renew for another 1 year. It is only when the said option has been exercised that the third year will come into play. There is however no other clause in the tenancy agreement governing the manner in which the option to renew should be exercised.

14. The Respondent stated in ground no. 4 of his Notice of Opposition, "it was agreed with Mr. Sit, the representative of the Landlord that two months' free rental would be applicable to the one year option to the tenant." However, the Respondent did not adduce any evidence on the said agreement with Mr. Sit of the Landlord (i.e. the Applicant). Also, the above said agreement stated in the Notice of Opposition appears to contradict with the Respondent's final written submission which stated that Mr. Sit, the Applicant's representative had the following response when Mr. Lau of the Respondent met the latter and sought to finalize the details for the option year:

"The old landlord had never performed his part or his duty to see the option had been carried out smoothly even we the tenant had firmly made their wish and intention to proceed for the one year option renewal. The old landlord representative Mr. Sit just said that he will leave the matter to the new landlord to deal with the option notwithstanding the date for the option was 12th march 2002 which date was long before the Assignment took effect on 30th April 2002. We can never think out of any reason for Mr. Sit's suggestion."

15. This written submission was in line with Mr. Lau's evidence in chief, given during the hearing on 29 May 2002 that the parties had never agreed on the rent for the option year. Moreover, Mr. Lau gave evidence that during that meeting held between him and Mr. Sit of the Applicant, the latter did not indicate to him whether his interpretation of the tenancy agreement that "there are two months' rent free period for every year of the tenancy" was acceptable to the Applicant.

16. Therefore, summing up, Mr. Lau's own evidence was that at the time nearing the end of the 2-year term, there was still no consensus of opinion between the landlord and the tenant that firstly, there would definitely be a third year term, and secondly, that there would be a 2 months rent-free period. One could also infer that there was no such consensus even at the time of signing the Tenancy Agreement; otherwise, there was no necessity for the Respondent to have tried to discuss, and negotiate, though unsuccessfully, with the Applicant over the issue of the rent-free period and the rent for the third year.

17. Besides, the Tenancy Agreement expressly stated the specific months of the original 2-year term during which no rent shall be paid and the same said Agreement did not state that for the third year (option year), there would be a 2 months rent-free period.

18. Based on the above, the Tribunal finds that although the Respondent intended to take up the option to renew with the Applicant, the Applicant's representative, a Mr. Sit, did not reach any agreement with the Respondent regarding the option year but instead asked the Respondent to negotiate the matter with the new landlord. Therefore, there was no third year tenancy between the Applicant and the Respondent. Also, it would be wrong to infer, as the Respondent did in the submission, that the Respondent as the tenant would be automatically entitled, a 2 months rent- free period from 12 March 2002 in the third year of tenancy, even assuming its existence.

Assessment of market rent, or mesne profit of the Premises from 12 March 2002 to 30 April 2002

19. From the foregoing, the Tribunal decides that there is no automatic 2 months rent-free period following the expiry of the original 2-year lease term. There was no provision in the Tenancy Agreement that "if the amount is not agreeable between the parties, the parties will be referred to arbitration." However, both parties agreed that, in the event that the Tribunal decides that there is no rent-free period following 11 March 2002, the mesne profit of the Premises from 12 March 2002 to 3 April 2002 should be based on the prevailing market rent of the Premises to be determined by the Tribunal.

20. The Applicant adduced rental evidence in the subject building to support an estimate of $12 per sq. ft. as the prevailing market rent for the period from 12 March 2002 to 30 April 2002. The Applicant produced Exhibit A6, setting out fully the rental information for units in the subject building owned by the Applicant. The rents under the recently agreed tenancies for four units were also summarized in the document marked "G-L-1" enclosed with the Applicant's written final submission. These tenancies were considered by the Applicant to be most relevant for the purpose of assessment of the mesne profit for the Premises. These tenancies commenced from January 2002 to April 2002, fetching rents with unit rates of between $11 and $14 per sq. ft., on gross area basis. As to the difference in the unit rate of the new letting vis-à-vis the renewals in the building, the Applicant conceded that they have allowed a discount (to a maximum of 20%) to new tenants in order to compensate them for the costs of refurbishment and furnishing. After making adjustments for the rent-free periods provided under the respective tenancies, the effective unit rates for three renewals were $12.00, $13.00 and $12.80 per sq. ft., whilst that for a new letting was $10.50 per sq. ft., all on gross area basis.

21. In the final analysis, the Applicant submitted that the market unit rent for the Premises was estimated by taking the average of these 4 comparables, or $12.075, which was rounded to $12.00 per sq. ft. on gross area basis

22. The Respondent submitted that "comparables within the same building is no true comparable at all and it does not reflect the current market rental in the same area." The Tribunal considers this statement to be wrong. On the contrary, in general, it is well established that for the valuation of a unit in a particular building, rents within the same building do provide the best comparables, unless there are good reasons to reject any of the comparables.

23. The Respondent produced a letter (Exhibit R1) from Mr. Liu King Tong, Chartered Surveyor stating that the market rent of the premises for the said period "was in the region of HK$8.00 p.s.f. per month exclusive of rates and management fees on gross floor area basis." The Respondent submitted that the evidence of Mr. Liu, as an independent expert, should be preferred to the evidence adduced by the Applicant. However, as rightly pointed out by the Applicant, Mr. Liu's letter contained a limiting condition, which said that "In accordance with our standard practice, we must state that the valuation is for the use only of the party whom it is addressed and no responsibility is accepted to any third party for the whole or any part of the contents." Mr. Liu's letter also did not include any evidence of facts supporting his conclusion. Moreover, since the Respondent did not call him as a witness, his opinion could not be tested or challenged by the Applicant. For the aforesaid reasons, the Tribunal cannot accept Mr. Liu's opinion as stated in his letter.

24. In the light of the above and in the absence of any other evidence, the Tribunal accepts the Applicant's evidence that the market rent for the Premises is in the order of $12 per sq. ft. of gross area. On that basis, the amount of mesne profit payable by the Respondent to the Applicant is calculated as $12 per sq. ft. x 1,300 sq. ft. x (1 + 20/31) months, or $25,664.52. This amount is the same as that set out by the Applicant in paragraph 8 of their final written submission.

25. Similarly, the Applicant set out in the final submission the estimates of the outstanding rates for the period from 1 April 2002 to 30 April 2002 in the sum of $244.95 and the outstanding management for the period for the period from 12 March 2002 to 30 April 2002 in the sum of $7,699.35. The Respondent did not dispute these figures or the liability to pay. Therefore, the Tribunal accepts these figures for the amount of outstanding rates and management fee to be correct.

Deduction of deposit by the Applicant

26. The Respondent complained in the final submission that they were informed by the new landlord that "Gloryson Limited had entirely without lawful ground and justification deducted a sum of $40,319.07 from the deposit leaving a balance4 of $2,830.93 ...This act of violence is highly intolerable by the Respondent." However, this matter does not form the subject matter of this Application and is also outside the jurisdiction of this Tribunal.

Costs

27. The Tribunal finds that the Applicant's cause of action, for recovery of possession, rent etc. and costs, did exist at the date of Application. Due to the formal change of ownership of the Premises on 30 April 2002, the Applicant conceded that the Applicant would no longer seek vacant possession of the Premises. Nevertheless, in accordance with the usual basis for the award of costs in civil proceedings, the Applicant should still be entitled to the costs of this Application.

28. The Applicant set out in Exhibit A2 the expenses incurred in filing the Application. The amount of costs claimed, in the sum of $601, includes the filing fee for the amendment of notice of application. However, that was entirely unnecessary if the Applicant was careful in not omitting a few words when completing the Form 22 in the first instance. In the circumstances, the fee for the amendment, in the sum of $61, is not allowed. Therefore, the Tribunal decides to award costs in the sum of $540 to the Applicant.

Orders

1. The Application for vacant possession of the suite premises to the Applicant is dismissed;
2. The Respondent shall within 7 days from today pay the Applicant arrears of mesne profits from 12 March 2002 to 30 April 2002 as assessed by the Tribunal in the sum of $25,664.52;
3. The Respondent shall also within 7 days from today pay the Applicant (i) arrear of rates for the period from 1 April 20002 to 30 April 2002 in the sum of $244.95 and (ii) arrears of management fee for the period from 12 March 2002 to 30 April 2002 in the sum of $7,699.35;
4. The Respondent shall within 7 days from today pay the Applicant's costs of this Application, in the sum of $540;
5. Payment out to the Applicant upon payment in by the Respondent, if any.

	(W. K. LO)
	Member, Lands Tribunal

Representation:

Ms. Yeung, Fuk Yi Floria, the representative of Gloryson Ltd., for the Applicant

Mr. A. Lau, the representative of Alfred Lau & Co., for the Respondent

1.	The Application for vacant possession of the suite premises to the Applicant is dismissed;

2.	The Respondent shall within 7 days from today pay the Applicant arrears of mesne profits from 12 March 2002 to 30 April 2002 as assessed by the Tribunal in the sum of $25,664.52;

3.	The Respondent shall also within 7 days from today pay the Applicant (i) arrear of rates for the period from 1 April 20002 to 30 April 2002 in the sum of $244.95 and (ii) arrears of management fee for the period from 12 March 2002 to 30 April 2002 in the sum of $7,699.35;

4.	The Respondent shall within 7 days from today pay the Applicant's costs of this Application, in the sum of $540;

5.	Payment out to the Applicant upon payment in by the Respondent, if any.

1.	The mesne profit should be calculated at the rate of $10 per sq. ft., instead of $12 per sq. ft. as determined by the Tribunal;

2.	There was no opportunity for him to argue for the costs of the original application before the Tribunal handed down its Judgment including a cost order after receiving written submissions by the parties;

3.	The Applicant had without lawful ground and justification deducted a sum of $40,319.07 from the deposit of the Respondent, leaving only a balance of $2,830.93. The Respondent submitted that the Tribunal should have the jurisdiction as the District Court in the granting of remedies and reliefs, equitable or legal, as the District Court.