YEUNG WAH, JAMES v. ALFA SEA LIMITED

1992, No. A426

H E A D N O T E

Landlord and Tenant - Breach of Covenant of Quiet Enjoyment - Trespass - Exemplary damages

1992, No. A426

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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1. The plaintiff, Mr. Yeung Wah, James was at all material times the tenant of the premises at No. 8 Cameron Road, 3rd floor, Kowloon (hereinafter called the said premises) having rented it in 1980 from the defendant's predecessor in title and is therefore a protected tenant under part II of the Landlord and Tenant (Consolidation) Ordinance.

2. The defendant was the owner of the entire block of building at No. 8 Cameron Road, Kowloon consisting of a ground floor shop premises and 4 upper floors which were classified as domestic premises although the 1st and 2nd floors had been used for commercial purpose. The defendant had recovered possession of the ground floor and all the upper floors at various stages with the exception of the 3rd floor.

3. There had been negotiation between the plaintiff and the defendant for the plaintiff to surrender the tenancy of the said premises to the defendant which negotiation had not been successful and the plaintiff was at the material time the only tenant of the defendant at No. 8, Cameron Road, Kowloon occupying the 3rd floor whereas the other floors were either being occupied by the defendant or left vacant. According to the plaintiff, he had been approached 8-10 times by the defendant's agents, a Mr. Chan Choi and someone from a solicitor firm Messrs. Edward Wong and Ng to surrender his tenancy. Such approaches began from the end of 1990 or early 1991 until May 1991.

4. In June 1991, the plaintiff had a one year contract to work in a hotel in Beijing commencing on 20th June 1991 and he was given home leave every 3 months for 7-10 days. In his absence, the plaintiff had asked a friend of his Mr. Benny Cheung (P.W.2) to collect mails, to pay for the bills and to generally look after the said premises for him and he had given a set of keys to Mr. Cheung.

5. Before the plaintiff left for Beijing in June 1991, he was aware that the Building Authority had ordered certain repair works to be carried out at No. 8 Cameron Road, Kowloon and he had told Mr. Cheung that if such repair works were required to be carried out in the said premises, Mr. Cheung should co-operate with the landlord and let the workers enter the said premises to carry out such repair works.

6. The plaintiff came back to Hong Kong in or about October 1991 for his first home leave, he realized that the repair works required by the Building Authority for No. 8 Cameron Road, Kowloon had been completed.

7. It was not in dispute that the Building Authority did require the defendant to carry out certain repair works to the building including the demolition of certain illegally built balconies at the rear of the building under certain orders dated 28th March 1991, 20th May 1991 and 10th June 1991 (pages 4, 12 and 15 of the agreed bundle of documents), and the defendant had engaged the service of Mr. Daniel Ho Tak Wah, an authorized person of the Archicorp (H.K.) Ltd. to carry out such works as required by the Building Authority.

8. It was also not in dispute that a joint inspection of the building in question had been carried out in early November 1991 and by a letter dated 25th November 1991 (page 26 of the agreed bundle) addressed to the defendant by the Building Ordinance Office, it was certified that the works required by the Building Authority under the aforesaid orders had been complied with.

9. The plaintiff having spent another 3 months in Beijing, returned to Hong Kong on 10th January 1992. He returned to No. 8 Cameron Road, 3/F, at about 9 p.m. He was unable to gain entrance into the said premises as the locks for the iron grill and the main door had been replaced by new ones. He found a scaffolding outside the building and the tenants of the 2nd and 4th floors were no longer there.

10. As it was getting late and the plaintiff could not enter the said premises, he went to Mei Foo Sun Chuen to spend the night at a friend's place.

11. The plaintiff returned to his home shortly after 8 a.m. the next morning, he found some workers working inside. He asked the workers to open the door to let him in. He found his home in a complete mess. The entire external wall of the said premises facing Cameron Road with the windows and the air-conditioner in it had been removed leaving a big hole and workers could be seen climbing up and down the scaffoldings, working.

12. The workers were unable to answer the plaintiff's queries. The plaintiff contacted the general manager of the defendant, a Mr. Ma, and asked him why his home was broken into. Mr. Ma said he knew nothing about the matter and asked the plaintiff to contact a Mr. Chan Choi who had previously discussed with the plaintiff for the surrender of the tenancy of the said premises. The plaintiff was able to speak to Mr. Chan Choi over the telephone but Mr. Chan said he no longer bothered about such matters. The plaintiff then reported the matter to the police.

13. The plaintiff returned to the building and was able to speak to the sub-contractor, a Mr. Ho, who told the plaintiff that the landlord had authorized him to carry out the work therein and he had no idea about other matters. Mr. Ho nevertheless gave the plaintiff keys to enable the plaintiff to enter the said premises.

14. Inside the said premises, the plaintiff found his furnitures were stagged up in the sitting room and the bed had been turned to rest on one side against the wall. The entire external wall facing Cameron Road had been demolished with the windows as well as the air-conditioner which was subsequently put on the floor. All the curtains had been removed and placed on the floor. The wall paper was damaged and the electric wirings were exposed and hanging from the wall. There were also concrete, dust, bamboos, bricks, cements bags and other debris in the master bedroom. The toilet was full of rubbish and excrement. Photographs of the inside of the said premises, in particular that of the master bedroom had been taken (p. 33- 41 of the agreed bundle of documents).

15. The plaintiff then locked up the master bedroom which was the part facing Cameron Road and accounted for about 1/3 of the said premises in order to minimize the effect of the works being carried out therein and he just used the rest of the said premises while he stayed in Hong Kong.

16. An attempt to restrain the defendant from continuing with the works by injunction was subsequently compromised and the defendant was allowed to complete the works.

17. As a result of the renovation works, the appearance of No. 8 Cameron Road is completely different from what it was before. For the facade of each of the floors facing Cameron Road, a floor to ceiling tempered glass had been installed and affixed to a metal frame. There is no window that can be opened on the side facing Cameron Road.

18. The building now looks like a commercial building with a huge signboard made up of 6 large Chinese characters reading "No. 8 General Merchandise Plaza".

19. A comparison of the 2 photographs D1 and D2 clearly demonstrates the effect of the renovation works in the building in question.

20. The plaintiff's major complaint at the moment is that the master bedroom that he used to sleep in cannot be used as a bedroom any more as there is no ventilation and the floor to ceiling glass wall also reveals the whole bedroom to the outside.

21. The issues involved in the dispute appears simple and straightforward. But Mr. Bell on behalf of the defendant had raised a number of points.

22. Firstly, it was suggested that the plaintiff's cause of action against the defendant was one of breach of the implied covenant of quiet enjoyment only and whatever remedies available to the plaintiff would be confined to remedies peculiar to breach of implied covenant of quiet enjoyment.

23. Secondly, it was suggested all the alleged wrongful acts, with the exception of the demolition of the wall, were committed by an independent contractor without the consent of the defendant and the defendant could not therefore be liable for such wrongful acts.

24. Thirdly, the defendant argued that a property owner had the right and duty to prevent premises to become dangerous and what the defendant did to the building in question was just a discharge of such duty.

25. Fourthly, it was suggested that Mr. Benny Cheung, the plaintiff's representative had at least given implied permission to the defendant to carry out the works in question.

26. Fifthly, the defendant argued that the wrongful acts complained of by the plaintiff were just temporary inconvenience and could not constitute a breach of the covenant of quiet enjoyment.

27. Lastly, there was a vague suggestion that the plaintiff had at the material time sub-let the said premises and he was not in occupation and therefore not entitled to bring the present proceedings against the defendant.

28. The alleged sub-letting was raised in the defence, but simply there was no evidence to support the allegation. On the evidence, the plaintiff clearly remained the tenant at all material times and the suggestion that he had sub-let the said premises simply could not be sustained.

29. I reject the argument that the plaintiff's cause of action is confined to that of a contractual one, namely a breach of the covenant of quiet enjoyment. The matters complained of by the plaintiff as set out in the Statement of Claim clearly gave rise to a tortious action of trespass as well as an action for breach of quiet enjoyment. Lord Denning in Drane v. Evangelou [1978] 1 W.L.R. 455 had the following to say at p. 458 :

"Counsel for the defendant submitted that that claim was for breach of a covenant for quiet enjoyment. He cited a passage from Woodfall on Landlord and Tenant 27th Ed (1968) para. 1338. "Since the claim is in contract, punitive or exemplary damages cannot be awarded." The judge at once said : "What about trespass? Does the claim not lie in trespass?" Counsel for the defendant urged that trespass was not pleaded. The judge then said: "The facts are alleged sufficiently so it does not matter what label you put upon it." The judge was right. The plaintiff in the particulars of claim gave details saying that three men broke the door, removed the plaintiff's belongings, bolted the door from the inside: and so forth. Those facts were clearly sufficient to warrant a claim for trespass. As we said in In re Vandervell's Trusts (No. 2) [1974] Ch. 269, 321-322.

It is sufficient for the pleader to state material facts. He need not state the legal result. If, for convenience, he does so, he is not bound by, or limited to, what he has stated. He can present, in argument, any legal consequence of which the facts permit."

30. The facts as pleaded by the plaintiff clearly also support a claim for trespass. The argument that the plaintiff's remedy is limited to that for a breach of covenant for quiet enjoyment must fail.

31. This conclusion would dispose of the argument that the inconvenience being temporary would not give rise to a cause of action of breach of the covenant of quiet enjoyment. In any event, I do not agree with that the inconvenience can be described as temporary.

32. Quite apart from the removal of the window and wall and the fitting of a floor to ceiling tempered glass, thus depriving the plaintiff of ventilation to the master bedroom and rendering it no longer suitable to be used as a bedroom, the actual construction work lasted a few weeks. After the construction work had been completed, there was no attempt to clean up the said premises and according to the plaintiff, the said premises in particular the master bedroom was left in more or less the same state as depicted in the photographs with debris and waste material lying around. It was not until a few months later that the plaintiff cleaned up the places by himself when he returned to Hong Kong.

33. The suggestion that the matters complained of were just temporary inconvenience was not supported by the facts and must be rejected.

34. I shall now deal with the allegation that Mr. Benny Cheung (P.W.2) had consented to the renovation works in question as the representative of the plaintiff. The consent was alleged to have been given to a sub-contractor, a Mr. Ho. Mr. Ho had not given evidence and the only evidence on that aspect of the case came from Mr. Benny Cheung.

35. According to Mr. Cheung, in response to a letter by the defendant's solicitor dated 21st August 1991 (pages 20 & 21 of the agreed bundle), he telephoned a Mr. Joseph Chan and left his pager number with him. He was then contacted by a contractor and an arrangement was made for him to allow the contractor access to the said premises in order to carry out the repair works required by the Building Authority. Whilst such works were in progress, he opened the door for the workers every day and in fact spent some time in the premises when the works were going on.

36. Mr. Cheung had not been told to allow anyone further access to the said premises for any further renovation works, and he had no idea at all about the subsequent renovation works carried out in December 1991/ January 1992. He remembered at around that time, he went to the said premises in the evening and found the wooden door and iron grill locked up. He could not open them with the keys he had. He saw a note on the wall with the pager number of a person surnamed Ho. He subsequently contacted Mr. Ho and was told that the landlord had asked him to carry out works and an appointment was made for Mr. Ho to open the door of the said premises. Once Mr. Cheung gained entry, he found the living-room and the bedroom in a messy state. New locks were installed. Mr. Ho told him that it was the landlord who told him to lock up the said premises and to carry out the works. Mr. Cheung said at that time, the works had already commenced and he just let the plaintiff to handle the matter with the landlord. He said he did not know Mr. Ho and he would not let him do the work. Mr. Cheung's attitude was one of helplessness and frustration. It could not be construed as either express or implied consent to the carrying out of the renovation works in question. There was no evidence nor suggestion that Mr. Cheung was aware of the nature of the renovation works in question. It was also doubtful that Mr. Cheung was authorized to give the alleged consent. The argument that the renovation works in question were carried out with the consent of the plaintiff could not be sustained.

37. According to the architect in charge of the renovation works in question, Mr. Daniel Ho Tat Wah of Archicorp Ltd. (D.W.5), it was discovered, in the course of the repair works to the building in August/September 1991 as required by the Building Authority, that the external wall plastering of the building was made of decomposed granite. Such decomposed granite plastering, unlike cement and sand plastering, was not durable and would break easily and lose its adhesiveness after prolonged attack by rain and wind. Mr. Ho felt that there would be future danger as further deterioration of the building could not be ruled out. Because of the potential danger of the plastering coming down, on Mr. Ho's suggestion, the defendant made a decision to appoint a contractor Bestskill Engineering Limited to carry out a better and more substantial renovation. The nature of such renovation works was set out in a quotation submitted by Bestskill Engineering Ltd. to the defendant (pages 27-29 of the agreed bundle).

38. On such evidence, it was submitted that what the defendant did was a lawful discharge of the defendant's duty to take reasonable care to prevent the building from becoming dangerous.

39. The defendant relied on an Irish case of Gerard Bowes v. The Lord Mayor, Aldermen and Burgesses of Dublin [1965] I.R. 476.

40. On the evidence, I found such submission very bold. If the defendant's argument is correct, every landlord of any old building in Hong Kong can just demolish any part of the building without consulting the tenants or obtaining their consent.

41. The court cannot ignore that earlier remedial works to the building as required by the Building Authority had been completed in or about October 1991 and certificates under regulations 25 and 26 of the Building (Administration) Regulations had been issued.

42. It therefore meant that the building was considered to be safe and not liable to become dangerous in or around October/November 1991. Yet within a month or two, the defendant chose to completely demolish the front external wall and windows and replaced them with floor to ceiling tempered glass.

43. There was evidence that the building at No. 8A Cameron Road which was right next to the building in question and in fact shares a common staircase with it was built at the same time. There was also evidence that No. 8A had also been subject to certain orders by the Building Authority and repair works to it had been carried out and completed at or around the same time as those to the building in question as required by the Building Authority. The appearance of No. 8 before and after the repair works could be seen from the photographs produced. Such matters were totally inconsistent with the suggestion that the building in question required the substantial renovation works in December 1991/January 1992 to prevent it from becoming dangerous. The nature of the renovation works and the manner in which such works were carried out without notifying the plaintiff or obtaining his consent were also inconsistent with the suggested motive of the defendant of trying to prevent the building from becoming dangerous and such suggestion must be rejected.

44. The only remaining matters put forward by the defendant related to the question of whether the defendant could be liable for the acts of the sub-contractor.

45. The defendant's case, if I understand it properly, was that while the defendant admits responsibility for demolition of the external wall, the acts of trespassing into the plaintiff's premises and the messing up of it were done by the independent contractor without authority nor consent from the defendant and the defendant could not be liable for such wrongful acts.

46. Mr. Lui Shing Moon, a director of the defendant, D.W.2 and Mr. Daniel Ho, the Architect, D.W.5 both said they believed that the said renovation works in question could be carried out entirely from the outside of the building and entry into the said premises was not necessary nor contemplated. They also said they did not consent to nor expect that the contractor would enter the plaintiff's premises at all.

47. I have considered the evidence carefully. The renovation works in question were not just patching up of cracks on the external wall nor whitewashing. It involved the removal of an air-conditioner and the curtains, the completed demolition of the wall and the windows of the bedroom of a premises rented out to a tenant.

48. I found the suggestion that entry into the plaintiff's premises in connection with the renovation works not necessary most surprising.

49. Would it not be necessary to remove the curtain and the air- conditioner and to arrange the furniture so as to avoid damaging them? Would it not be necessary to ensure that the electric wiring and socket were removed before the demolition work started so as to ensure safety for the workers? Would it not be a lot more convenient to carry out the work as anticipated under quotation by Bestskill from within the premises?

50. Indeed, Mr. Yeung Kai Tat, a shareholder and director of Bestskill conceded that to carry out the renovation works in question properly, entry into the plaintiff's premises was necessary.

51. On the evidence I reject the suggestion that the defendant did not expect the workers to enter into the plaintiff's premises. It was not in dispute that the defendant was under a duty to make available the site to the contractor to carry out the works and on the evidence, I also find that the defendant had not made any attempt to contact the plaintiff or his representative in order to make available the said premises to the workers in connection with the renovation works in question.

52. On the facts as found by the court, the wrongful act of trespassing into the plaintiff's premises and messing of it must be within the reasonable contemplation of the defendant when it ordered the contractors/workers to carry out the works and such wrongful acts must have been expressly or impliedly authorized by the defendant and the defendant must be liable for the same.

53. None of the matters put forward by the defendant thought ably argued by Mr. Bell, constitute any defence to the plaintiff's claim and the court have no hesitation in finding for the plaintiff on the question of liability.

54. I shall now deal with the question of damages.

55. The plaintiff had not pleaded any special damages and was only claiming for general damages. In addition, it was argued by Mr. Chan on behalf of the plaintiff that this is a proper case for the court to award exemplary damages because of the behaviour of the defendant.

56. Mr. Chan had referred the court to the case of Wong Choi Kiu v. Poon Pan Wo Nelson trading as Thorough Construction Co., H.C. Case No. A2482 of 1988 in which Master Chan awarded general damages for discomfort, inconvenience and distress.

57. The facts as found by the court indicated that the defendant had, while the plaintiff was away, broken into his premises and rendered it extremely messy and dirty. When the plaintiff returned to Hong Kong on 10.1.1992, he found himself being locked out of his own premises. He had to spent the night at a friend's place and then reported the matter to the police before taking legal proceedings against the defendant. For a considerable period, he had lost the use of the master bedroom which accounts for 1/3 of the said premises. Even though the plaintiff had to work in Beijing in the first six months of 1992, and would not be living in the said premises except when he was on home leave, he was entitled to feel assured that he would have a nice flat to go to on his return to Hong Kong and should the necessity arise, he could allow friends or relatives to live there.

58. The defendant's wrongful acts had completely destroyed such assurance, comfort and convenience.

59. The plaintiff was still unable to use the master bedroom for its intended purpose due to the complete lack of ventilation.

60. I am satisfied that the discomfort, inconvenience and distress to the plaintiff arising from the defendant's wrongful acts are not insignificant and call for substantial damages. I am also satisfied that the plaintiff is entitled to recover a sum sufficient to enable him to render the master bedroom fit for its intended purpose. That would involve the installation of a split type air- conditioner and a new curtain.

61. There was evidence from Mr. Daniel Ho that a split type air- conditioner fitted for the master bedroom in question would cost $6000.00 and that the difference in the costs of running such a split type air-conditioner and an ordinary window type would be about $300.00 a month on the assumption that the master bedroom in question would be air-conditioned round the clock. Of course, had there been windows that could be opened, it might not be necessary to turn on the air-conditioner as often.

62. Assessing the damages is by no means an easy task in the present case. Doing the best I could and taking into consideration all the aforesaid matters, I am of the view that a sum of $50,000.00 would be a reasonable award for general damages.

63. In dealing with the question of exemplary damages, it is important to determine the reasons for the defendant committing the wrongful acts in question. The facts as found by the court indicated that the defendant had decided to carry out the renovation works in question without obtaining or trying to obtain the consent of the plaintiff. The defendant carried out the works with no regard for the view of the plaintiff and without even letting him know about them beforehand.

64. The only reasonable and logical conclusion is that the defendant intended to create a situation whereby everything would be completed by the time the plaintiff became aware of the situation. If the defendant had wanted to notify the plaintiff, it could write to him directly or through the solicitors just like what was done in connection with the repair works required by the Building Authority in August/September 1991. After all, such earlier attempt resulted in positive response when Mr. Benny Cheung who took the trouble to open the door for the workers and supervise them when they were carrying out the earlier repair works. There was also evidence that the defendant or its agent was in possession of the pager number of Mr. Benny Cheung yet no attempt was made to contact him before carrying out the renovation works. Instead the defendant through its agent chose to break open the lock of the said premises to carry out the works.

65. If the defendant had not been acting mala fides, was it not reasonable that they should work out an acceptable arrangement with the plaintiff before carrying out the renovation works in December 1991 or January 1992. After all, there was no suggestion of any urgency in the matter.

66. The court cannot ignore that the appearance of the building after the renovation works and its effect had created a situation whereby the said premises can no longer be described as suitable as a domestic premises.

67. There had been previous unsuccessful attempts to persuade the plaintiff to give up the premises and clearly the value of the building would be significantly increased should the defendant be able to recover possession of the said premises from the plaintiff despite the denial by Mr. Liu Shing Moon on such matters.

68. The defendant might want to improve the appearance of the building and hence enhance its value. I am of the view that it was probable that the defendant also intended to harass the plaintiff with a view to evict him and in so doing had adopted a blatant and willful disregard for the right and interest of the plaintiff.

69. I am satisfied that the outrageous conduct of the defendant calls for punitive damages.

70. In Laventer v. Betts [1942] 2 A.E.R. 72, Atkinson J. stated at p. 73 :

"Normally, plaintiffs are only entitled to such damages as they prove; but there are torts in respect of which the law permits a jury or a court to give what are called punitive damages, where the court is not limited to giving merely damages in respect of what we call special damages. In Cruise v. Terrill [1922] 1 K.B. 684 Lord Sterndale M.R. said at p. 670, that punitive damages can be given if a high handed outrage has been perpetrated. In that particular case he held there were no aggravating circumstances; but he recognized and affirmed the right of the court to give aggravated damages, and quoted with approval what Bowen L.J. said in Whitham v. Kershaw (1886) 16 Q.B.D. 613 at p. 618 :

'... nothing we have said must be understood as in any way derogating from the principle that, when a wrongful act is done by a trespasser, or by a tenant to the property of his reversioner, under circumstances which call for vindictive damages, the jury may give vindictive damages ...' "

71. In Drane v. Evangelou supra, Lord Denning said at p. 459 :

"But since Broome v. Cassell & Co. Ltd. [1972] A.C. 1027 it must be accepted in England. Lord Devlin in Rookes v. Barnard [1964] A.C. 1129 acknowledged that there are some categories of tort in which exemplary damages may still be awarded. The case seems to me to come within the second category. Lord Devlin said at p. 1227 :

'This category is not confined to moneymaking in the strict sense. It extends to cases in which the defendant is seeking to gain at the expense of the plaintiff some object - perhaps some property which he covets - which either he could not obtain at all or not obtain except at a price greater than he wants to put down. Exemplary damages can properly be awarded whenever it is necessary to teach a wrongdoer that tort does not pay.'

To my mind this category includes cases of unlawful eviction of a tenant. The landlord seeks to gain possession at the expense of the tenant - so as to keep or get a rent higher than that awarded by the rent tribunal - or to get possession from a tenant who is protected by the Rents Acts. So he resorts to harassing tactics. Such conduct can be punished now by the criminal law. But it can also be punished by the civil law by an award of exemplary damages."

72. I am firmly of the view that the conduct of the defendant calls for exemplary damages to be awarded to the plaintiff.

73. Again there had been no precedent in Hong Kong on the appropriate award. But I am satisfied that it has to be a significant award to demonstrate the disapproval by the court of the defendant's conduct, and I am of the view that a sum of $50,000.00 will be appropriate. In awarding the sum of $50,000.00 for exemplary damages, I have not been influenced by the suggestion that the defendant had made substantial profit because of the unlawful acts in question. That had not been the plaintiff's pleaded case and there was insufficient evidence to support such conclusion. Had the court been awarding damages on the basis that the defendant had, by reason of the unlawful acts, made huge profit, the award would have been more substantial.

74. In the result, I give judgment for the plaintiff against the defendant in the sum of $100,000.00 with interest on $50,000.00 at the rate of 5% from the date of the writ namely 18.1.1992.

75. I shall hear counsel on the question of costs.