RAMADOUR INDUSTRIES LTD v. BULLEN CHRISTIAN ANTHONY

LDPD 2025/2016

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO. LDPD 2025 OF 2016

_________________

_________________

_________________

DECISION
(APPLICATION FOR LEAVE TO APPEAL OUT OF TIME)

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1.  I handed down my judgment dated 22 November 2016 in which I ordered the respondent to deliver vacant possession of the Premises to the applicant and pay the applicant the arrears of rent/mesne profits as well as the Government rent and rates until delivery up of vacant possession plus cost (“the Judgment”).

2.  The respondent then on 29 November 2016 applied for a review of the Judgment pursuant to section 11A of the Lands Tribunal. I dismissed this application for review with reasons set out in my decision dated 7 December 2016 (“the Decision”).

3.  On 4 January 2017, the respondent made an interlocutory application seeking leave to appeal out of time against the Judgment and the Decision. The respondent also applied to stay the execution of the Judgment pending appeal in the Court of Appeal in CACV 19/2016. 

4.  The respondent’s grounds in support of his application for leave to appeal out of time and stay of execution as stated in his affidavit of even date (“the Affidavit”) can be summarised as follows:

(1) The applicant had applied for recovery of possession of the suit premises in LDPD 1912/2015 on the ground of the respondent’s failure to pay rent. The Lands Tribunal ordered delivery of vacant possession but this order was stayed by the Court of Appeal in HCMP 98/2016. The respondent is of the view that the new application for recovery of possession of the suit premises in the present case on the ground of expiry of tenancy is an abuse of legal process and the respondent submits that I erred in concluding the present case was an “appropriate” case in making the Judgment within the meaning of HCMP 1951/2012.[1]

(2) As the applicant had pleaded in LDPD 1912/2015 the tenancy in question had been forfeited, the applicant is

estopped from raising the issue of forfeiture again on the new ground of tenancy expiry and therefore I erred in not properly considering that LDPD 1912/2015 and the present case had substantially the same pleadings and sought the same relief.[2]

(3) The respondent submits that I erred in not properly considering the fact that the Court of Appeal could make the same orders (and grant the same relief that the applicant sought) in CACV 19/2016 and the Tribunal has no jurisdiction in the matter.[3]

(4) The respondent submits that I erred in regarding the stay ordered by the Court of Appeal as not binding on the Tribunal.[4]

(5) The respondent submits that I erred in not at all considering (by way of an adjournment pending conclusion of the appeal) (or dealing with) the respondent’s possible set-off claims for Legal costs in LDPD 1912/2015, HCMP 98/2015 and CACV 19/2016.[5]

(6) The respondent submits that I erred in not properly considering the difference between a legal set-off and an equitable one as raised by him and further erred in concluding or apparently concluding that set-off was not available as a defence to a claim by the applicant for mesne profits.[6]

(7) The respondent submits that I erred in not properly investigating or allowing evidence to be filed in support of the set-off claims.[7]

(8) The respondent submits that I erred in not properly considering the nature of the set-off repairs or when they were done.[8]

(9) The respondent submits that I erred in not inviting the parties to put forward arguments on whether or not the case should be transferred to another court that has jurisdiction to deal with set-off claims.[9]

(10) The respondent submits that I erred in not properly considering (or at all) the evidence from the respondent that he had spent a large amount of time in preparing in HCMP 98/2015 and CACV 19/2016 and that time was taken away from the respondent in preparing and installing utilities in his own house that he purchased nearby.[10]

(11) The respondent submits that I erred in not allowing the respondent to address the Tribunal on the applicant’s bill of costs.[11]

5.  I accept the submission of Mr CHENG Yuk Hey Ken, Counsel for the applicant, that the above intended grounds of appeal are repetitive of 19 out of the 20 grounds of review advanced by the respondent (save and except for his first ground of review) on 29 November 2016. In any event, at the hearing yesterday, the respondent had nothing to add.

Was the Tenancy Forfeited?

6.  In Dendy v Evans [1910] 1 KB 263, the lessor issued a writ against the lessee to recover possession on the ground of the lessee’s breach of the repairs covenant. The lessee thereupon assigned the lease, subject to and with benefit of the underlease, to an assignee, who obtained an order that all further proceedings in the action should be stayed, and that the assignee should have relief from the forfeiture and should hold the premises according to the old lease without any new lease. The assignee then brought an action against the defendant for rent due upon the underlease subsequent to the issue and service of the writ to recover possession. It was first held that, though the issue and service of the writ to recover possession operated as a final election by the lessor to determine the lease, the effect of the subsequent order for relief against forfeiture was to restore the lease as if it had never been forfeited, and therefore the underlease also remained in existence, and the plaintiff was entitled to recover the amount claimed. The defendant appealed and his argument before the Court of Appeal was that the issue of the writ for possession by the lessor was an irrevocable election by him to treat the lease as void. I trust this is similarly the contention of the respondent in the present case.

7.  However, the English Court of Appeal affirmed the decision of the lower court, ie the order for relief kept such lease (or sub-lease) alive. More particularly, Farwell LJ ruled at the end of the judgment that the forfeiture was stopped in limine.

8.  Then in Meadows v Clerical, Medical and General Life Assurance Society [1980] 1 All ER 454, Sir Robert Megarry VC held that “when the validity of a notice to quit is in dispute, until that issue is resolved it will not be known whether the tenancy has ended or whether it still exists.” In comparison, as stated by the respondent himself at §14 of the Affidavit, the order by the Tribunal in LDPD 1912/2015 has been stayed, ie the issue of forfeiture has not yet been resolved.

9.  More recently, in Olivesburg Limited v Volstead Travel Service Company Limited[1994] 2 HKC 507, Jerome Chan J (as he then was), after reviewing the above authorities, ruled at §12 of the judgment that:

“… Pending the determination of an application for relief, and a fortiori, pending the fulfilment of conditions imposed upon the granting of such relief, the contractual tenancy does not come to an end…… And the order granting relief against forfeiture made by Master Jennings has the effect of continuing the suspended state of the forfeiture that had arisen upon the making of the application for relief…… In the event of non-fulfilment of the conditions, the suspension is lifted and the forfeiture is to take effect as if there had not been any application for relief.”

10.  More importantly, Jerome Chan J continued at §13 of the judgment as follows:

“13.A failure by the tenant to perform any provision in the contractual tenancy during the period pending fulfilment of the conditions imposed for the granting of relief will entitle the landlord to enforce any new and independent right that the provisions of the contractual tenancy may conferred upon him for such breaches notwithstanding the order granting the relief. If such breaches also constituted a non-performance of the conditions imposed for the relief, the plaintiff will also be entitled to enforce the judgment for possession.” (underline added)

11.  And as stated in §4 of the Decision, in 永華電子實業有限公司v陳樹雄經營三雄行, HCMP 1951/2012 (unreported, dated 16 November 2012), the relief granted against forfeiture in an earlier proceeding should not affect the right of the landlord to determine the tenancy upon its expiry.

12.  In light of the above authorities, the grounds (1), (2) and (3) as summarised in §4 above in support of the respondent’s application fall away and consequentially ground (4) is neither here nor there when it was appropriate for the Tribunal to deal with the tenancy expiry issue[12].

Legal/Equitable Set-off

13.  As regards grounds (5)-(7) which are related to the arguments by the respondent on legal or equitable set-off, I have dealt with them in at §§26-32 of the Judgment. Ground (6) of respondent’s argument is in particular unfounded as I have explained in §10 of the Decision that “I have considered the respondent’s submission at the hearing on 21 November 2016 and his affidavit dated 18 November 2016 regarding particulars of the breach of the implied/express term of the Tenancy Agreement.  During the hearing, I have on not less than 2 occasions asked the respondent if he had anything to add and he said no.”

14.  Unlike section 16(3) of the Small Claims Tribunal Ordinance which imposes a statutory duty on the tribunal to inquire into any matter which it may consider relevant to a claim, whether or not it has been raised by a party, there is no similar provision in the Lands Tribunal Ordinance. Even if such a statutory duty is applicable, it is recently held by Anthony To J in Golden Best Investment Limited vSecretary for Justice, HCSA 39/2015 (unreported, dated 12 May 2016) that:

“The duty to inquire depends on the individual circumstances of each case. It is not an absolute duty. It is only limited to inquire into any matter which the tribunal may consider relevant to the claim before it. How that duty is to be carried out is a matter of discretion for the tribunal having regard to the circumstances of the case.  For the appellate court to intervene, it has to be satisfied that the lack of investigation will give rise to injustice, in that, a fair and proper determination of the claim cannot be attained.”

No Transfer of Proceeding in light of CACA 223/2007

15.  Again, in relation to ground (8), I have explained in §11 of the Decision that ‘the decision of the Tribunal to transfer proceedings to the Court of First Instance or the District Court as the case may be is only discretionary.  By reference to HCMP 1951/2012 and CACV 223/2007, supra, I do not consider it is appropriate to transfer the present application as “the Lands Tribunal should have proceeded with the trial of the landlord’s application as scheduled”.’

16.  As regards ground (9), so long as the present case is an “appropriate” case for the Tribunal to deal with, there should be no adjournment pending conclusion of the appeal in CACV 19/2016 which concerns in effect a separated proceeding on a different issue – whether a 2^nd relief against forfeiture should be granted. More importantly, CACV 19/2016 has not been concluded and even if the appeal be allowed, it does not follow necessarily that costs be awarded against the applicant.

Others

17.  In respect of ground (10) where the respondent submits he had spent a large amount of time in preparing in HCMP 98/2015 and CACV 19/2016 and that time was taken away from the respondent in preparing and installing utilities in his own house that he purchased nearby, this is wholly irrelevant to the present proceeding.

18.  As regards ground (11), I have indicated towards the end of the hearing on 21 November 2016 that, instead of referring the case to taxation, I decided to order costs summarily and the parties were invited to provide their submission, if any, on costs. And as explained in §§13-15 of the Decision, the Tribunal has a wide discretion to award costs on a summary basis.

Leave to Appeal

19.  Section 11(2) of Cap. 17, Lands Tribunal Ordinance (“the Ordinance”) provides that:

“Subject to section 11AA and the provisions of any Ordinance relating to appeals from the Tribunal, any party to proceedings before the Tribunal may appeal to the Court of Appeal against a judgment, order or decision of the Tribunal on the ground that such judgment, order or decision is erroneous in point of law.”

20.  And section 11AA (6) of the Ordinance provides that:

“Leave to appeal shall not be granted unless the Tribunal, the Court of Appeal or the registrar hearing the application for leave is satisfied that –

(a) the appeal has a reasonable prospect of success; or

(b) there is some other reason in the interests of justice why the appeal should be heard.”

21.  When hearing of this interlocutory application took place yesterday morning, the respondent basically repeated what he had submitted in the hearing on 21 November 2016 and in the Affidavit afore-mentioned.

22.  This case indeed involves a simple application for recovery of possession upon lease expiry and payment of outstanding rent/mesne profit and costs. I have canvassed all the arguments or submissions by the respondent in the above paragraphs and found the intending appeal has no reasonable prospect of success. Neither have I found any other reason in the interests of justice why the appeal should be heard. Thus, the application by the respondent for leave to appeal is dismissed.

23.  Since I do not allow the respondent the leave to appeal, the consequential application by the respondent for stay of execution of possession of the premises pending appeal is therefore refused.

Conclusion

24.  The interlocutory application by the respondent to seek leave to appeal and stay of execution of the order for possession be dismissed.

Costs

25.  Again I am prepared to award costs on the summary basis. Having reviewed the Statement of Costs submitted by the applicant on this issue, I make a costs order that the respondent do pay the applicant the costs of this interlocutory application which is summarily assessed at $8,900.

Mr CHENG Yuk Hey Ken, instructed by Messrs Lo, Wong & Tsui, for the applicant

The respondent, appeared in person

[1] See §§4-18 of the Affidavit.

[2] See §§19-23 & 27 of the Affidavit.

[3] See §§24-25 of the Affidavit.

[4] See §26 of the Affidavit.

[5] See §§28 & 33 of the Affidavit.

[6] See §29 of the Affidavit.

[7] See §30 of the Affidavit.

[8] See §31 of the Affidavit.

[9] See §32 of the Affidavit.

[10] See §34 of the Affidavit.

[11] See §35 of the Affidavit.

[12] 「審裁處成員在當天進行審訊是合理及合法的處理」 as stated in §12 of 永華電子實業有限公司v陳樹雄經營三雄行, HCMP 1951/2012.

LDPD 2025/2016

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO. LDPD 2025 OF 2016

_________________

_________________

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DECISION ON REVIEW

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1.  I handed down my judgment dated 22 November 2016 in which I ordered the respondent to deliver vacant possession of the Premises to the applicant and pay the applicant the arrears of rent/mesne profits as well as the Government rent and rates until delivery up of vacant possession plus cost (“the Judgment”).

2.  The respondent then on 29 November 2016 applied for a review of the Judgment pursuant to section 11A of the Lands Tribunal. His grounds in support of his application for review as stated in his affidavit of even date include the following:

“1) The Learned Member erred in not conducting a call over hearing and informing the parties that the following hearing would be for substantial arguments and essentially a trial of the matter.

2) The Learned Member erred in concluding that the present case was an “appropriate” case within the meaning of HCMP 1951/2012.

3) The Learned Member erred in deciding that LDPD 1912/2015 and LDPD 2025/2016 were substantially different causes of action.

4) The Learned Member erred in deciding or not properly considering that the Applicant had pleaded the Lease was over (forfeited) in LDPD 1912/2015 and that for the Applicant to now plead that the lease had expired in a subsequent pleading (the present 2025 case) did not amount to an abuse of process.

5) The Learned Member erred in concluding that the Lease expiry (paragraph 20 pg 8 of Judgment 22/11/16) was a new ground since; 1) it was pleaded in LDPD 1912/2015, 2) the applicant is stopped from raising it now as they had pleaded (not as an alternative) that the lease was already forfeited in LDPD 1912/2015 and that the Tribunal had ruled that the lease was forfeited.

6) The Learned Member erred in not properly concluding that LDPD 1912/2015 was finally decided.

7) The Learned Member erred in not properly considering that LDPD 1912/2015 and and LDPD/2025/2016 had substantially the same pleadings and sought the same relief.

8) The Learned Member erred in not properly considering the fact that the Court of Appeal could make the same orders (and grant relief that the Applicant sought) in CACV 19/2016 that the Tribunal would have been able to order in the 2025 had there not been an appeal.

9) The Learned Member erred in not properly considering (or at all) that the same matters that required adjudication were now being dealt with in the Court of Appeal and that the Tribunal would not have jurisdiction in the matter.

10) The Learned Member erred in regarding the stay ordered by the Court of Appeal as not binding on the Tribunal.

11) The Learned Member erred that the Lease expiry date was a material factor in the present case since the Tribunal had already ruled that the lease was forfeited.

12) The Learned Member erred that in not staying or adjoining the proceedings pending the outcome of the Appeal in CACV 19/2016. The Learned Member further erred in not properly considering the costs implications in not adjourning or staying the proceedings.

13) The Learned Member erred in not properly considering the difference between a legal set-off and an equitable one as raised by the Respondent and further erred in concluding or apparently concluding that set off was not available as a defence to a claim by the Applicant for mesne profit.

14) The Learned Member erred in not properly investigating or allowing evidence to be filed in support of the set-off claims.

15) The Learned Member erred in not properly considering the nature of the set off repairs or when they were done.

16) The Learned Member erred that if he was of the view that he had no jurisdiction to deal with set-off claims that he should have invited parties to put forward arguments on whether or not the case should be transferred to a Court that did.

17) The Learned Member erred in not at all considering (by way of an adjournment pending conclusion of the appeal) (or dealing with) the Respondent’s possible set off claims for legal costs in LDPD 1912/2015, HCMP 98/2016 and CACV 19/2016.

18) The Learned Member erred in not properly considering (or at all) the evidence from the Respondent that he has spent a large amount of time on preparation in LDPD 1912/2015, HCMP 98/2016 and CACV and that was time taken away from the Respondent could have used preparing and installing utilities in his own house.

19) The Learned Member erred in not allowing the Respondent to address the Tribunal on the Applicant’s bill of costs.”

3.  I shall deal with the above grounds for review in the following paragraphs.

Grounds 1) & 2)

4.  As stated in the Judgment at §34, in 永華電子實業有限公司 對 陳樹雄經營三雄行, HCMP 1951/2012 (unreported, dated 16 November 2016), the Court of Appeal held that in appropriate case, the Tribunal may enter judgment even at the first hearing. The present case is indeed very similar to HCMP 1951/2012 in that it is an application by the applicant for recovery of vacant possession on the ground of lease expiry.  This substantial issue is neither complicated nor involving any difficult arguments. I consider it is appropriate to follow this HCMP 1951/2012 which stated at §16 that:

「綜觀雙方在案件提出的爭議點及相關的證據，也不是十分複雜。審裁處成員在當天進行審訊是合理及合法的處理，本庭看不到該審訊有任何不公平的地方。」

Grounds 3), 4), 5), 6), 7), 8), 9), 10) & 11)

5.  I stated in the Judgment at §18 that I agreed with Mr Cheng Yuk Hey Kenfor the applicant that LDPD 1912/2015, HCMP 98/2016 and CACV 19/2016 are related to the applicant’s earlier claim for recovery of possession of the Premises on a different ground, namely the respondent had defaulted in paying rent and the respondent sought a 2^nd relief against forfeiture.

6.  Further at §19, I stated I failed to see any grounds raised by the respondent could prevent the Tenancy Agreement from coming to its end on 31 August 2016.  LDPD 1912/2015 or even CACV 19/2016 is unrelated to the present claim by the applicant on a different ground of lease expiry.

7.  Indeed, the Court of Appeal came to the same view in HCMP 1951/2012, supra,  at§16:

「至於申請人聲稱另一位法官判他勝訴，實在是曲解法庭判決的說法。在LDPE 728/2010一案當中，黃法官的判決是業主可以收回處所的空置權，但他同時給予租客濟助，若他在指定日期前交回欠租，則可獲寬免。這項濟助在租約期滿後收回處所的申請並不適用。本案的關鍵是:審裁處判決租約經已屆滿，而申請人聲稱的延展租約協議並不成立。因此，較早前另一案件的判決與本案無關。」 (emphasisadded)

Ground 12)

8.  In the Judgment at §§22-23, I cited陳燕群對黃金海, CACV 223/2007 (which is reported as [2008] 1 HKCLRT 27), a case which had dragged on for a few years when the respondent in that case had continued to use the property thereof without making any payment to the landlord before the Court of Appeal’s final determination.  The Court of Appeal ruled that once the tenant had failed to raise a defence recognized by the law, the Lands Tribunal should have proceeded with the trial of the landlord’s application as scheduled.

Ground 13)

9.  I have already dealt with the arguments by the respondent on legal or equitable set-off in the Judgment at §§26-32.  I consider I have nothing to add and I do not have any good ground for review.

Grounds 14) & 15)

10.  As opposed to the respondent’s allegation, I have considered the respondent’s submission at the hearing on 21 November 2016 and his affidavit dated 18 November 2016 regarding particulars of the breach of the implied/express term of the Tenancy Agreement.  During the hearing, I have on not less than 2 occasions asked the respondent if he had anything to add and he said no.

Ground 16)

11.  By reference to section 8A of the Lands Tribunal Ordinance, the decision of the Tribunal to transfer proceedings to the Court of First Instance or the District Court as the case may be is only discretionary.  By reference to HCMP 1951/2012 and CACV 223/2007, supra, I do not consider it is appropriate to transfer the present application as “the Lands Tribunal should have proceeded with the trial of the landlord’s application as scheduled”.

Grounds 17) & 18)

12.  As elucidated above as well as in the Judgment itself, LDPD 1912/2015 or even CACV 19/2016 is unrelated to the present claim by the applicant on a different ground of lease expiry.  These grounds raised by the respondent are irrelevant and not applicable.

Ground 19)

13.  Section 12(1) of the Lands Tribunal Ordinance (Cap. 17) confers on the Tribunal the jurisdiction to award costs at its discretion:

‘(1) The costs of and incidental to all proceedings in the Tribunal are in the discretion of the Tribunal, and the Tribunal has full power to determine by whom and to what extent the costs are to be paid.’

14.  Also, following In re Elgindata Ltd (No. 2) [1992] 1 WLR 1207,

“(i)Costs are in the discretion of the court.

(ii) They should follow the event, except when it appears to the court that in the circumstances of the case some other order should be made.”

15.  In the present case, there is no reason to depart on the rules above and as I stated at §35 of the Judgment, I have considered the Statement of Costs for Summary Assessment submitted by the applicant. I considered the sum of $19,862 reasonable and ordered therefore summarily and accordingly.

Conclusion

16.  Having considered all the above, I dismiss the respondent’s application for review.

Costs

17.  As this decision is made on papers without a hearing pursuant to the Practice Directions issued by the President of the Tribunal: Review No 1/2009, I shall make no order as to the costs.

LDPD 2025/2016

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO. LDPD 2025 OF 2016

_________________

_________________

_________________

JUDGMENT

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1.  This is an application by the applicant for recovery of possession of the premises situated at Lot No 337 in Demarcation District No 4, 43 Lo Tik Wan, Lamma Island, Hong Kong (“the Premises”) on the ground that the tenancy agreement with the respondent (“the Tenancy Agreement”) expired on 31 August 2016 but the respondent failed to quit and deliver up vacant possession of the Premises to the applicant.

2.  By reference to the Tenancy Agreement which was dated 28 August 2014, the Premises were let by the applicant to the respondent for residential purpose from 1 September 2014 to 31 August 2016 at a monthly rent of HK$8,000 per calendar month exclusive of Government Rates and Rent and Management Fees payable in advance on the 1^st day of each calendar month.

3.  By reference to the Notice of Application dated 3 October 2016 (as amended) [1], the applicant also claims for the arrears of rent/mesne profits, government rent and rates from the respondent as follows:

	Arrears of 11 months’ rental from 1 July 2015 to 31 August 2016 ($8,000.00 x 11)*		HK$88,000.00
Less:	Part payment received on:
	16 October 2015	(HK$8,000.00)
	16 October 2015	(HK$1,296.00)
	30 November 2015	(HK$8,000.00)
	7 December 2015	(HK$2,000.00)
			(HK$19,296.00)
			HK$68,704.00
Add:	Arrears of Government rent and rates
	From 1 April 2015 to 30 June 2015	HK$648.00
	From 1 July 2015 to 30 September 2015	HK$648.00
	From 1 October 2015 to 31 December 2015	HK$1,728.00
	From 1 January 2016 to 31 March 2016	HK$1,728.00
	From 1 April 2016 to 30 June 2016	HK$824.00
	From 1 July 2016 to 31 August 2016	HK$555.30	HK$ 6,131.30
			HK$74,835.30
Add:	Mesne Profits from 1 September 2016 to a date of delivery up of vacant possession		HK$8,000.00	per month
	Arrears of Government rent and rates from 1 September 2016 to date of delivery up of vacant possession		HK$ 274.67	per month

* The respondent paid a sum of $24,000, an equivalent of 3 months’ rent on 5 October 2015 pursuant to an Order by the Tribunal in an earlier action LDPD 1912/2015.

4.  In response, the respondent filed an Interlocutory Application dated 6 October 2016 seeking to extend the time to file the Notice of Opposition because he had to seek legal advice on the legal implication and other grounds for opposing the present application in light of his ongoing appeal against an earlier judgment of the Tribunal in LDPD 1912/2015. More particularly, the Court of Appeal, in CACV 19/2016, has ordered a stay with no conditions.

5.  Thus, following a hearing on 18 October 2016, I granted leave to the respondent to file and serve the Notice of Opposition on or before 1 November 2016.

LDPD 1912/2015

6.  Indeed, LDPD 1912/2015 concerned a 2^nd application by the applicant against the respondent for recovery of possession of the Premises because of non-payment of rent as may be discerned from the schedule at §3 above. At the conclusion of the hearing on 15 October 2015, the Tribunal ordered the respondent to (1) deliver vacant possession of the Premises to the applicant but subject to a stay of execution until 29 October 2015; and (2) pay the applicant arrears of rent / mesne profits, rates and Government rent, and costs but no 2^nd relief against forfeiture was granted. On 21 December 2015, the Tribunal confirmed its judgment upon review.

7.  The respondent has appealed against this judgment seeking in particular a 2^nd relief against forfeiture though relief against forfeiture for non-payment of rent had been granted once by the Tribunal not too long ago on 25 June 2015 in a previous action LDPD1047 of 2015.

Notice of Opposition

8.  With leave granted on 18 October 2016 as afore-mentioned, the respondent filed his Notice of Opposition on 1 November 2016.

9.  In gist, the respondent disputed his liability for payment of rental and/or government rent and rates as contained in the schedule at  at§3 above as “he may be entitled to equitable set off and further equitable intervention with respect to the alleged contract termination date.”

10.  The respondent further avers, alternatively or not, that the present application by the applicant is duplicitous, vexatious and an abuse of process since LDPD 1912/2015 and CACV 19/2016 has not been finally determined. He emphasized once again that there was an unconditional stay of execution by the Court of Appeal on 29 January 2016.

11.  On the other hand, the respondent counter-claims damages for the applicant’s breach of the implied/express term of the Tenancy Agreement namely that the applicant must maintain structural and exterior components of the building and maintain exterior plumbing.

12.  In the alternative to the above, the respondent further avers that he may be entitled to forthcoming legal costs in LDPD 1912/2015, HCMP 98/2016 and CACV 19/2016 given that he was given unconditional leave to appeal and had therefore a reasonable prospect of success within meaning of the new test threshold for leave applications and favourable cost consequences.

13.  The respondent also submitted at §4 of the Notice of Opposition that :

“Since the commencement of the Tenancy in July 2011 the Applicant has never contributed to any repairs to the premises (including exterior repairs) or surrounding grounds including the septic tank, related plumbing and slope maintenance. The respondent has had to carry out emergency repairs in addition to regular maintenance over the years.”

14.  Further, on 18 November 2016, the respondent submitted an Affidavit, purporting to give more particulars of the breach of the implied/express term of the Tenancy Agreement as follows:

“2)  When my wife and I moved in, in July 2011 the house was full of medical records, including boxes of x-rays. This is consistent with what our neighbour told us about the previous owner, namely that he was a medical doctor. It was patently obvious that the house had not been lived in for a long time. My wife and I were keen to get into the area and to look for a house to purchase. The first Tenancy Agreement included permissions (from the Applicant) for repairs and basic supplies including water mains. There were problems with the roof, balconies and windows. What was not apparent was a drainage problem, a septic tank problem and structural issue with the wall surrounding the top floor windows and doors. There were also wiring problems.

3)  Although I understand that I had contracted (agreed) to carry out certain repairs at my expense which included replacing the balcony railings and slabs, replacing broken bathroom sinks and plumbing, installing new water mains and repairing the roof, I did not expect the wall to crack around the windows and doors on the 2^nd floor or the septic tank to also crack and leak onto the beach and major re-wiring.

4)  My calls and requests for help from the Applicant were met with sympathy and some degree of understanding but it never resulted in a single visit or site inspection and offer to share expenses.

5)  I don’t think it is right that the applicant not contribute anything to repairs of a capital nature and something they will benefit from far beyond the end of the tenancy.

Repair Works / Costs (not contemplated in the Tenancy Agreement)

6)  The repairs in which I sought permission to undertake were repairs that were apparent from one site inspection. Of course in hindsight I might not have proceeded with a tenancy had I known that the septic tank was poorly constructed and prone to leak onto the beach, the ground floor front wall had a structural defect (sagging) causing the terrace doors to crack and leak. Further the upstairs walls also sagged causing all of the windows and balcony doors on the front façade to crack and leak. We also found that none of the electrical outlets had earth wires, and only one of 4 air-conditioner units worked.

7)  September – October 2011; installed earth wire to vital outlets, including bedrooms and kitchen area. Also replaced MCCB boxes and installed new earth leakage breakers. My wife, our helper and myself completed the work in a month working in the evenings and weekends. Approximately 15 full days of work. Could not get a quote as no electrician interested in coming out to the remote area.

8)  May 2012; overflow pipe (septic tank) collapsed. Required laying of new overflow pipe including excavation (2 meters), drilling and setting pipe into tank, resurfacing of terrace. Total of 3 days work carried out by me and one domestic helper. Approximate costs if done by a contractor; $20,000.

9)  Replacement of terrace windows and doors due to cracked leaking frames and substantial flooding after typhoons. Repaired replaced all sliding doors in September 2015. Five

days to repair including new sliding doors, glass and frame with helper. Approximate cost with outside contractor $30,000.

10)  November 2015: Septic tank leaking onto the beach. Repaired required pumping out both sink drain tank and toilet soak away tank, cleaning, rendering of inner walls and sealing with epoxy sealer. Total of 6 days work carried out by me and one domestic helper. Verbal estimates obtained from local contractors in main village were $30,000 to $40,000.”

Submission of Respondent on 18 November 2016

15.  Just some 15 minutes before the hearing on 21 November 2016 commenced, the respondent produced a further submission also dated 18 November 2016 seeking to strike out the present proceedings on the ground of abuse of process by the applicant or to ask the Tribunal to adjourn the present proceedings sine die for substantial argument or have the present proceedings stayed pending the result of CACV 19/2016.

16.  In gist, this further submission is based on the ground that both LDPD 1912/2015 and CACV 19/2016 concerned the expiry (forfeiture) of the Tenancy Agreement and is under appeal to the Court of Appeal which should have exclusive jurisdiction in, inter alia, ordering possession of the Premises to the applicant.

17.  It is also the submission by the respondent that the Court of Appeal has also the power to deal with the equitable set-off, mesne profits and costs etc. By filing this present application, the applicant is attempting to oppress the respondent with the same matters that the Court of Appeal will deal with.

Discussion

18.  Insofar as LDPD 1912/2015 or CACV 19/2016 is concerned, I agree with Mr Cheng Yuk Hey Ken (“Mr Cheng”) for the applicant that they are related to the applicant’s earlier claim for recovery of possession of the Premises on a different ground, namely the respondent had defaulted in paying rent and the respondent sought a 2^nd relief against forfeiture.

19.  In the present proceedings where the applicant is claiming for recovery of possession of the Premises mainly on the ground that the Tenancy Agreement had expired, I fail to see any grounds raised by the respondent could prevent the Tenancy Agreement from coming to its end on 31 August 2016.

20.  That leave and a stay of execution of the judgment in LDPD 1912/2015 was granted to the respondent unconditionally to pursue CACV 19/2016, which is heavily emphasised by the respondent, is totally unrelated to the present claim by the applicant on a different ground of lease expiry. The referral to Far East Land Holdings v Empire Asian Limited, HCA 1246/2010 (reported as [2011] 4 HKLRD 472) by the respondent regarding granting a 2^nd relief against forfeiture is wholly irrelevant in the present application.

21.  Even in Wong Yuk Ying v Chan Pui Shan May, CACV 265/2013 (unreported, dated 4 March 2016) where the tenancy agreement contained a clause suggesting a one-month notice to terminate the tenancy, the Court of Appeal stated at §28 as follows:

“In my view, there is nothing in the clause which has the effect of somehow prolonging a fixed term tenancy. As the learned authors of Megarry and Wade, The Law of Real Property, 8^th ed. put it: “Expiry is the default method of termination of a fixed term tenancy; at common law, the tenancy ends when the fixed term expires” (p.810, para.18-002).”

22.  And in陳燕群對黃金海, CACV 223/2007 (which is reported as [2008] 1 HKCLRT 27), a case which had dragged on for a few years when the respondent in that case had continued to use the property thereof without making any payment to the landlord before the Court of Appeal’s final determination, the Court of Appeal remarked that it would not be difficult for the Lands Tribunal to rule that the tenant in that case had defaulted in paying rent since 1 December 2003. The tenant’s claim for damages and compensation was brought before the District Court, not the Lands Tribunal. Therefore, the Lands Tribunal only had to deal with the landlord’s application for the recovery of rent in  arrears and repossession of the property. In considering the landlord’s application, the Tribunal was not bound to consider and should not have considered the question of deducting part of the rent in arrears.

23.  More importantly, the Court of Appeal ruled that as regards the tenant’s counterclaim, he was claiming for damages arising from the alleged breach of the tenancy agreement by the landlord there. If the counterclaim succeeded, the landlord would be liable to pay compensation, but it did not mean that the tenant could continue to reside in or occupy the property without having to pay any rent or outgoings. Therefore, in relation to the landlord’s action for recovery of rent in arrears and repossession of the property, the tenant had failed to raise a defence recognized by the law. For this reason, the Lands Tribunal should have proceeded with the trial of the landlord’s application as scheduled. See §§35-40 of the judgment.

24.  As submitted by Mr Cheng, the forfeiture in LDPD 1912/2015 is now suspended by court proceedings but when the Tenancy Agreement expired by effluxion of time, the respondent has no legal right  to remain at the Premises refusing to deliver vacant possession to the applicant. The case of Johnson v Gore Wood & Co [2002] 2 AC 1 relied on by the respondent does not assist him because he is not “vexed twice in the same manner.”

25.  I refuse to strike out the present proceedings or to adjourn the present proceedings as sought by the respondent.

Counter-claim or Equitable Set-off

26.  In relation to the purported counter-claimby the respondent in the present case, it is obvious that most of the complaints recited at §14 above were related to the previous tenancy agreement and not to the Tenancy Agreement under consideration. When the Tenancy Agreement commenced on 1 September 2014, a tenant like the respondent here must have taken the Premises as he found it.  Neither the landlord or the tenant is bound to provide the other with a better home than there was to start with[2].

27.  Furthermore, in Charmway DevelopmentLtd v Long China Engineering Ltd [2001] 3 HKC 515 at p.519D-I, Chu J (as she then was) recited the common law principle that the covenant to pay rent is independent of the other covenants or obligations under a lease. It is generally of no defence in saying that the tenant is not obliged to pay rent or the landlord is not entitled to rent by reason of alleged breach of the tenancy agreement on the landlord’s part. The principle applied to the facts of that case where the obligation of the tenant to pay rent was not expressed to be subject to or conditional upon compliance by the landlord of its obligations thereunder. The same is true for the Tenancy Agreement.

28.  It has been held in黃英對譚炳新, HCMP 2049/2000 (unreported, dated 1 August 2000), 陳燕群對黃金海, supra and Ngai Ngok Pang& Another vLee Syn Yuk, Michelle, LDPD 3030/2012 (unreported, dated 10 May 2013) that under section 8 of the Lands Tribunal Ordinance, the Lands Tribunal does not have jurisdiction to entertain such counterclaim by the respondent. I agree with these authorities that the Lands Tribunal does not have jurisdiction to entertain its claim for damages.

29.  Even when section 8 of the Lands Tribunal Ordinance was amended in 2008 to award damages solely, as well as in addition to rent and mesne profits, it was explained to the Legislative Council that the amendment did not seek to empower the Lands Tribunal to award damages that may go beyond its jurisdictional limit on the types of cases it can entertain.[3]

30.  In spite of the above, a tenant who suffers damages (albeit unliquidated damages) due to a landlord’s breach of his obligation to repair may claim an equitable set-off against the landlord’s claims for arrears of rent and mesne profits if there was an adequate connection between the claim for rent and the cross-claim for damages (British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd [1980] 1 QB 137).

31.  It is patently obvious that the respondent and his family had continued to reside at the Premises despite the so many problems he alleged and the respondent even proceeded to sign the Tenancy Agreement on 28 August 2014. There are no particulars of any relevant loss or damage apart from his own estimates or hear-say quotes. There is no evidence that the respondent has himself paid for any repairs, and more importantly that he has suffered any damage for his inability to use any part of the Premises for any period of time during the years of the Tenancy Agreement due to the structural defects alleged.

32.  In the circumstances, I take the view that there would be no defence of set-off to the claims for arrears of rent and mesne profits.

Conclusion

33.  Having considered all the above, particularly as the respondent is still occupying the Premises, I find the respondent should deliver vacant possession of the Premises and be liable to pay arrears of rent/mesne profits as well as the Government rent and rates until delivery up of vacant possession.

34.  In 永華電子實業有限公司 對 陳樹雄經營三雄行, HCMP 1951/2012 (unreported, dated 16 November 2012), the Court of Appeal held that in appropriate case, the Tribunal may enter judgment even at the first hearing.  I hereby do make my order as follows:

(1)  The respondent do deliver vacant possession of the Premises to the applicant;

(2)  The respondent do pay the applicant arrears of rent/mesne profits as well as the Government rent and rates as stated in the schedule at §3 above until delivery up of vacant possession.

Costs

35.  As costs follow the event, I also ordered the respondent to pay the applicant's costs of this application. In this regard, the applicant has provided a Statement of Costs for Summary Assessment in the sum of $19,862.  Having reviewed the figures as contained in the Statement, I consider the sum of $19,862 reasonable and order therefore accordingly.  

[1] By means of a Summons dated 15 November 2016 which I allowed in the hearing on 21 November 2016, the applicant has amended his claims for the arrears of rent/mesne profits, government rent and rates for the period.

[2] See Quick v Taff-ElyBorough Council [1986] QB 809.

[3] See for instance, the response by the Judiciary to the Bills Committee on Civil Justice (Miscellaneous Amendments) Bill 2007 in September 2007:

http://www.legco.gov.hk/yr06-07/english/panels/ajls/papers/aj1127cb2-430-2-e.pdf