LEUNG KAM LIN by her next friend LEUNG WAI MAN v. CHENG MEI WA

DCCJ 877/2022

[2024] HKDC 1849

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 877 OF 2022

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ASSESSMENT OF DAMAGES

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Introduction

1.  This is the hearing for assessment of damages of the claim of the Plaintiff arising from the tenancy agreement entered between the parties on 28 October 2021 (“the Agreement”).

2.  Madam Leung Kam lin (“Madam Leung”) is the registered title owner of 1/F, 150 Ma Kwu Lam Village (Lot No.1590 in DD 165), Sai Sha Road, Sai Kung, New Territories (“the Property”).

3.  Madam Leung, an illiterate, was procured by the Defendant to sign the Agreement, where she leased the Property out to the Defendant for a monthly rent of HK$3,500 only, which is far below market rent. At the material times, Madam Leung was diagnosed with Major Vascular Neurocognitive Disorder, whose mental incapacity had already lasted for about 4 years as of March 2022.

4.  To set aside the Agreement, the Plaintiff relied on (i) Madam Leung’s mental incapacity which was apparent and known to the Defendant and (ii) common mistake of fact which was fundamental.

5.  On 3 August 2022, the Plaintiff obtained judgment against the Defendant. The Court declared the Agreement null and void, ordered the Defendant to give possession of the Property, and ordered the Defendant to pay the Plaintiff damages to be assessed.

6.  The Plaintiff damages can be boiled down to 3 categories: (i) the use and occupation of the Property by the Defendant, (ii) the expenses incurred by the Defendant at the Property (such as electricity and water bill payments), and (iii) other expenditure which would not have arisen, had Madam Leung not been wrongfully procured to enter into the Agreement.

7.  The Defendant was absent at the hearing on 28 October 2024. Having read the two affirmations of service filed in October 2024, I was satisfied that notice of assessment hearing had been duly given to the Defendant prior to the hearing. It was the Defendant’s election not to attend the assessment hearing. I proceeded with the assessment of damages in the absence of her.

The Plaintiff’s case

8.  The Plaintiff’s case is that Madam Leung was 86 years old at the material time when she was procured by the Defendant to sign the Agreement. She did not receive any formal education who could only write her name.

9.  Mr Leung Wai Man (“Mr Leung”) is the youngest son of Madam Leung who sues on behalf of his mother in this action. He discovered that on or about 28 October 2021, Madam Leung was procured by the Defendant to sign the Agreement leasing out the Property to the Defendant at a monthly rent as low as HK$3,500 in the absence of any third party (such as a real estate agent).

10.  It is the Plaintiff’s pleaded case that Madam Leung would not have entered into the Agreement, had she known HK$3,500 was far below market rent. The Defendant wrongfully took advantage of the mistake of the Plaintiff. Further or alternatively, she also knew or ought to have known the Plaintiff could not understand the terms and nature of the Agreement, given her mental incapacity, which is supported by psychiatrists’ reports.

11.  The Defendant had been occupying the Property since 28 October 2021. It was only until 2 March 2023, with the assistance of bailiffs, the possession of the Property was eventually delivered to the Plaintiff’s solicitors.

The Evidence

12.  In the present hearing, the Plaintiff called 1 witness, namely Mr Leung. His testimony was not subject to any challenge from the Defendant who had adduced no documentary evidence and witness evidence for the purpose of assessment of damages and was absent during the hearing. I find the evidence of Mr Leung straightforward, credible, and reliable. I accept his evidence.

Use and occupation of the Property by the Defendant

13.  This Court finds it fair and reasonable to restore the Plaintiff to the position that she would have been in, had the Agreement not been made. The Plaintiff adduced a valuation report of Ms Pamela Lam dated 15 August 2023. The relevant parts of the findings in the said report are: the monthly market rent of the Property from 1 November 2021 to 30 September 2022 is HK$11,500; and that monthly market rent from 1 October 2022 to 1 March 2023 is HK$11,100. I see no reason to doubt these figures.

14.  For the period from 28 October 2021 to 30 September 2022 (both dates inclusive), there are 11 months and 3 days (338 days in total). The Plaintiff claims:

HK$11,500 x 11 + (HK$11,500 / 31) x 3 days = HK$127,612.90

15.  For the period from 1 October 2022 to 1 March 2023 (both dates inclusive), there are 5 months and 1 day (152 days in total). The Plaintiff claims:

HK$11,100 x 5 + (HK$11,100 / 31) x 1 day = HK$55,858.06

16.  Following from the above, had the market rent been paid by the Defendant, Madam Leung would have received HK$183,470.96. This Court noted copy of Madam Leung’s bank books exhibited to Mr Leung’s witness statement. Mr Leung testified that Madam Leung did receive some past payments from the Defendant purportedly as rent under the Agreement, totaling HK$28,000. Credits must be given to such payments for the purpose of assessment.

17.  I will allow the Plaintiff to recover HK$155,470.96 (ie HK$183,470.96 – HK$28,000), which is the amount lost by Madam Leung as the landlord, from the Defendant for the use and occupation of the Property at the material times under the Agreement.

Expenses incurred by the Defendant at the Property

18.  During the use and occupation by the Defendant, some electricity and water bills at the Property remained unsettled, which consist of HK$1,253 + HK$156.20 + HK$54.90 = HK$1,464.10.

19.  The Plaintiff has paid these bills and now seeks indemnification in full. Mr Leung added that the Property was being solely used by the Defendant who should be responsible for those utilities bills.

20.  Having considered copy of those bills of various dates and screen-captured payment records exhibited to Mr Leung’s witness statement as well as his oral testimony, I see no reason why the Defendant should not be ordered to pay for the same. I allow the Plaintiff’s claim under this head in full.

Other expenditure

21.  In relation to the physical conditions of the Property, the Plaintiff further spent HK$13,000 for cleaning and removing. Mr Leung produced an invoice dated 6 March 2023 issued by Home Repair Station for moving wardrobe, mattress, and other miscellaneous items as well as some cleaning services. In addition, the Plaintiff also spent HK$2,100 on engaging a locksmith on 2 March 2023 to open a wooden door.

22.  The above is well supported by documentary proof. In view of work performed listed out on the invoice and receipt, I find the quantum of the sums claimed reasonable. I am satisfied that such consequential expenditure should be recoverable from the Defendant, so as to restore the Plaintiff to a position as if she had not entered into the Agreement.

23.  In addition to the above, the Plaintiff by her Opening Submissions also claimed HK$8,000 for “medical expenses” under this head. This Court raised such claim to Counsel who replied that it refers to the fees paid to psychiatrists for the purpose of assessing Madam Leung’s mental condition. Upon further clarification, the Plaintiff confirmed such fees should be sought under disbursement instead. An updated statement of costs was then handed up during the hearing.

24.  I allow the Plaintiff to recover HK$15,100 from the Defendant.

Conclusion

25.  The Plaintiff is entitled to recover from the Defendant the following:

(1)	Use and occupation of the Property:	HK$155,470.96
(2)	Expenses incurred by the Defendant:	HK$1,464.10
(3)	Other expenditure	HK$15,100.00
	TOTAL:	HK$172,035.06

26.  I order that the Defendant do pay the sum of HK$172,035.06 to the Plaintiff with interest on the said sum at the best lending rate of HSBC plus 1% from the date of Writ, ie 14 April 2022 to the date of the judgment and thereafter at judgment rate to the date of full payment.

27.  Costs should follow the event in the present case. Having considered the updated statement of costs, I order the Defendant to pay the Plaintiff’s costs, with Certificate for one Counsel, summarily assessed at HK$82,795.

28.  A Chinese translation of this Assessment of Damages will be supplied to the Defendant at her request.