WONG SAU LIN v. IP THEODORE JAMES

LDPD 738/2013

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO. LDPD 738 OF 2013

__________________________

BETWEEN

	WONG SAU LIN	Applicant
	and
	IP THEODORE JAMES	Respondent

__________________________

Coram: Deputy Judge Tracy Chan, Presiding Officer of the Lands Tribunal

Dates of Hearing: 11 July 2013 and 17 July 2013

Date of Decision: 19 July 2013

________________

D E C I S I O N

________________

 

1.  This is an application taken out by the Respondent asking to set aside my Order dated 28 June 2013 (“the Order”). He also asks for stay of execution.

2.  When hearing an application of setting aside an Order made after trial and hearing of evidence, the court would consider the following:

1.  Reasons for absence;

2.  Whether there is real prospect of success if the matter is to be tried again; and

3.  Whether injustice would be brought about by setting aside the Decision.

Reason for absence

3. The Respondent was absent on the date of trial.  He said he was ill on that day.  He produced a medical certificate to support the same at this application.  A doctor had granted him sick leave for 2 days from 25 June to 26 June inclusive. What I could say on this point is that I could not make a finding that he was deliberately avoiding the hearing.

Real Prospect of Success

4.  My Decision comprises of order on repossession of vacant possession; damages on arrears of rent / mense profit and costs.

Repossession of vacant possession

5.  According to the Respondent, there is no dispute that since expiry of 2^nd Agreement on 9 February 2013, he had not paid any rent / mense profit; he admitted that there was no new lease concluded, that there was no agreement on temporary agreement.  In the circumstances, he is a trespasser not paying any mense profit and I do not see how he could resist the claim for repossession of vacant possession.

Damages on arrears of rent and mense profit

6.  In his Notice of Objection he said he had paid all the rent as demanded under the 2^nd Agreement.  There might have been delay but that was caused by confusion rendered by the Applicant.  At the trial I have found the record of payment clear to show the arrears and in my judgment the Respondent would not have real prospect to succeed even if the issue on amount of arrears was to be tried again.  His own evidence was fragmented and incomplete.

7.  Another ground for his opposition to the claim for mense profit is on its assessment.  This can be dealt with quickly because the Applicant is prepared to concede that the mense profit be assessed at the rate of the rent under the 2^nd Tenancy Agreement, which is $7,500 per month.  I understand from Mr Chang that this is just to save time and costs.

Costs of Repair

8.  The Respondent also said that he had spent money on the suit premises including repairing the hot water system together with the wiring and also the plumbing in the kitchen.  It is the case of the Applicant that the interior repair should be the tenant’s responsibility.

9.  In my judgment, it is trite that even if the landlord has wrongfully failed to repair the premises, it is not a reason for the tenant to say he does not have to pay rent.  Chu J as she then was stated clearly in Charmway Development Ltd v. Long China Engineering Ltd. [2001] 3 HKC 515that:

“22. As previously observed, the covenant to pay rent is independent of the other covenants and obligations under the Tenancy Agreement. The Tenancy Agreement also does not permit any set-off on the rent. Secondly, the present claim of the plaintiff is for unliquidated damages. There is therefore no right to a legal set-off.

                        23.    As to equitable set-off, the relevant principles are set out in para. 14/4/14 of Hong Kong Civil Procedure 2001.  Generally speaking, where the claim and counterclaim are sufficiently closely connected so that it would be manifestly unjust to enforce one without regard to the other, a right to an equitable set-off may arise : Esso Petroleum Co. Ltd v. Milton [1997] 1 WLR 938, at 950D and Dole Dried Fruit & Nut Company v. Trustin Kerwood Ltd [1990] 2 Lloyd’s Rep.309, 311.”

10.  What the Respondent had raised about cost of repair paid by him could amount to an independent claim which is however beyond the jurisdiction of this court.

Conclusion

11.  After the parties had made their submissions and upon hearing from the Respondent that he would be delivering the keys and thus the suit premises to the Applicant on 15 July (4 days), I asked parties whether they would like to have a discussion between themselves.  After a short break, parties asked that the hearing be adjourned to 17 July to see how the case would develop.  It was said that if things were to be smooth, the hearing might not have to proceed further.

12.  Unfortunately, the Respondent had failed to deliver keys on 15 July and also failed to attend court on 17 July.  He told Mr Chang that he could not attend court because he was going to his firm to deliver the keys.  Since I have already heard submissions from the parties, I would give my decision here instead of just dismissing the application for the absence of the Respondent.  I think that would dispose of the application of the Respondent in a fair manner.

13.  For reasons set out in the above, I exercise my discretion to set aside the award on mense profit.  Since the Applicant had conceded to adopt the rent under the 2^nd Tenancy Agreement which was agreed by the parties as the basis for assessment which is a proper way of assessing mense profit in normal circumstances, it is therefore not necessary to have this particular issue to be tried again.  I would accordingly vary the relevant part, namely paragraph 2, in the Order.

Order

14.  This is my order:

1.  Application for setting aside my order dated 28 June 2013 is dismissed except for paragraph 2 therein and it now be varied to read:

“the Respondent do pay the Applicant arrears of rent / mesne profits as follows:

(1)Balance of rent from 10 December 2012 to 9    February 2013 in the sum of $10,000;

(2)Arrears of mesne profits at the rate of $7,500 per month from 10 February 2013 to 9 May 2013 in the sum of $22,500;

(3)Arrears of mesne profits at the rate of $7,500 per month from 10 May 2013 until delivery up of vacant possession; and…”

2.  Other terms in the Order do stand; and

Costs

15.  The Respondent succeeded in 1 item on concession made by the Applicant, I order that he should bear half the costs of the present application and I assess them summarily at $3,000.  It is also because the Respondent refused to attend court on the return date and I could have dismissed his application for that reason with costs.  It is at the request of the Applicant that a decision be made for completeness and therefore this decision is made with reasons set out in the above.  I do not think it is fair if he is not asked to bear any costs in all the circumstances.  Further I decide not to disturb the costs order in the Order because there is no admission that the assessment of mense profit was wrong and that all other terms of the Order remain effective.  

    

    

	Deputy Judge Tracy Chan
	Presiding Officer Lands Tribunal

Mr Chang Chun Pong, of Messrs. Kong & Chang, for the Applicant

The Respondent: absent, acting in person

LDPD 738/2013

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO. LDPD 738 OF 2013

__________________________

BETWEEN

	WONG SAU LIN	Applicant
	and
	IP THEODORE JAMES	Respondent

__________________________

Coram: Deputy Judge Tracy Chan, Presiding Officer of the Lands Tribunal

Dates of Hearing: 25 June 2013

Date of Judgment: 28 June 2013

________________

J U D G M E N T

________________

1.  This is an application taken out by the landlord (“Madam Wong”) of a property situated at the Rear Portion of the 2nd Floor, No. 372 Des Voeux Road West, Hong Kong (“the suit premises”).

2.  The Respondent tenant is absent today saying that he was not well when called by the court clerk at the beginning of the trial but he did not seek any adjournment nor seek to produce any medical proof.  The trial proceeded in his absence.

Background

3.  By a tenancy agreement dated 2^nd December 2009 (“the 1^st Agreement”), Madam Wong let to the Respondent for a fixed term of tenancy of two years from 10^th December 2009 to 9^th December 2011 at a monthly rent of HK$7,000.00.

4.  It is alleged that the Respondent had not been punctual in making payments during the term of tenancy under the 1^st Agreement, and in October 2011 when he had defaulted in payment for two months, Madam Wong instructed lawyers to send a letter to him demanding for HK$14,000.00 being the arrears of rents from 10^th September 2011 to 9^th November 2011.  The Respondent made some partial payment subsequently.

5.  Before this 1^st Agreement expired, parties reached another agreement to commence from 10 February 2012 for 12 months and the monthly rent was $7,500.00 per month (“the 2^nd Agreement”).

6.  When renewal of the tenancy was discussed again in January 2013, Madam Wong offered renewal only on condition that the Respondent would pay 6 months’ rent in advance, and the monthly rent would be increased to $8,500.00 per month.  He had agreed to those terms but failed to pay accordingly.  

7.  Madam Wong said the Respondent had all along been making payments to her directly to her bank account with Bank of China (Hong Kong) Limited (“the BOC Account”).  Since Madam Wong could not communicate with the Respondent who speaks only English, her son-in-law Mr Wong had been the go-between.  Whenever Mr Wong received messages from the Respondent saying that rental had been paid into the BOC Account, he would ask Madam Wong to check it out for confirmation.  For purpose of this suit her solicitor had gone through her bank records and produced a schedule showing the payment and arrears (“the Schedule”).  She confirmed the calculation was correct and the arrears up to 9 April 2013 was $27,000.00.

8.  Madam Wong denied she was responsible for the electrical and plumbing expenses allegedly spent by the Respondent.  She said according to the 2nd Agreement, there was a term saying that all interior appliances (electrical appliances and furniture, in case of damage, shall be fixed by the tenant himself”.  Further she had no knowledge of the replacement of the air-conditional undertaken by the Respondent.  She denied there was any agreement between the Respondent and herself for her to share or shoulder the expenses.

Evidence of Wong Jeffery

9.  He adopted his evidence is the witness statement.  He said he had been at Madam Wong’s request communicated and followed up with the Respondent about the tenancy matters in respect of the suit premises.  He confirmed the calculation shown in the Schedule prepared by their solicitor after checking the bank statements of Madam Wong.  He confirmed that there had once been a mistake in calculation but the figure now shown in the Schedule was true and correct and should be adopted for the purpose of this suit.  He explained that the mistake arose because Madam Wong might have forgotten to count one of the two months’ rents covering the period from 10^th December 2011 to 9^th February 2012 between the respective terms under the 1^st Agreement and the 2^nd Agreement, and had messed up the relevant rent payment periods.

10.  He referred the court to the whatsapp messages produced by the Respondent to establish that there was an agreement between the Respondent and Madam Wong through him that the tenancy was extended  at a new monthly rent of HK8,500.00 from 10^th February 2013; and that the Respondent should pay 6 months in advance.  But he had failed to pay the 6 months rental as agreed.

11.  After hearing evidence of the Madam Wong and Mr Wong, I am satisfied that they are reliable witnesses.  Their evidence is well supported by documents.  On the other hand, although the Respondent commented that Madam Wong had made the record of payment chaotic without issuing rental receipts on time, I accept that with the assistance of her lawyer, the Schedule now reflects the arrears up to 9 April 2013 is correct.  I also accept the evidence of Madam Wong, the Respondent is still occupying the property.

12.  Since the Respondent did not attend court to advocate and prove his opposition to the Application, I would not consider his saying that he had been spending money on the electrical wiring and plumbing ($4,600) and replacing the air-conditioner. The Respondent did not put in any proof that such expenses should be shouldered by Madam Wong.  Further, there was no proof that Madam Wong had ever agreed to shoulder such expenses.  To the contrary, this was raised in one of his emails sent to the solicitors acting for Madam Wong on 6 April 2013 (Page 61).  If there was no agreement given by the landlord to shoulder any part of such cost, such cost would be shouldered by a tenant because there is no implied term or warranty in a lease that a landlord would shoulder the cost.  In any event, I find that there was no agreement between the Respondent and Madam Wong that Madam Wong would shoulder such cost.

13.  I find that the Applicant had proved her claim on arrears of rent.  I find that there was agreement on new lease that it commenced on 10 February 2013 for 6 months; monthly rental would be $8,500 per month; and that the Respondent would have to pay 6 months’ rental in one go before the lease was to start.  I find that the Respondent had failed to pay the 6 months’ lease in advance.  I am given to know that the Applicant would not ask for all of the 6 months rent as it is her case that the new lease had not commenced because the Respondent had not fulfilled the condition of paying 6 months in advance.  I accept that the Schedule reflects an accurate account of rental payments and arrears.  I find that as at 9 February 2013, a day before the new tenancy was to start, the Respondent was in arrears of rent for $30,000 from the 2^nd Agreement. I find that he had never paid the 6 months rent in advance.  I find that there is no valid tenancy subsisting since 10 February 2013.  Further as he had not been paying any rent after 10 February 2013, there is no monthly tenancy under operation of law.  The $20,000 paid on 26 February 2013 was to settle part of the $30,000 arrears I have just mentioned.  I find that the value of the mesne profit starting from 10 February 2013 is at the monthly rate of $8,500 as agreed between the parties.

14.  I am satisfied that up to 9 May 2013, the Respondent is in arrears at the amount of $35,500.  Since there is no subsisting tenancy, the Respondent would not be granted relief against forfeiture of a tenancy.

Order

15.  This is my order:

1.  the Respondent do deliver vacant possession of the suit premises to the Applicant;

2.  the Respondent do pay the Applicant arrears of rent/mesne profits as follows:

(1)Balance of rent from 10 January 2013 to 9  February 2013 in the sum of $10,000;

(2)Arrears of mesne profits at the rate of $8,500 per month from 10 February 2013 to 9 May 2013 in the sum of 25,500;

(3)Arrears of mesne profits at the rate of $8,500 per month from 10 February 2013 until delivery up of vacant possession;

3.  the Respondent do pay the Applicant the costs of this Application which is summarily assessed at 20,000; and

4.  unless otherwise ordered, all sums ordered to be paid under this judgment shall be paid into the Tribunal in cash, by cashier orders issued by banks in Hong Kong or by cheques drawn by firms of solicitors in Hong Kong, and such sums received by the Tribunal shall be released to the Applicant.

                 

    

  

	Deputy Judge Tracy Chan
	Presiding Officer   Lands Tribunal

Mr Chang Chun Pong, of Messrs. Kong & Chang, for the Applicant

The Respondent: absent, acting in person