HUANG TONGJIE v. SILVA MARC A

LDPD 2809/2014

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO. LDPD 2809 OF 2014

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DECISION
(APPLICATION FOR LEAVE TO APPEAL)

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1. This is an interlocutory application taken out by the respondent on 30 January 2015 seeking (i) leave to appeal against my Judgment made on 23 January 2015 and (ii) stay of execution of possession of premises pending appeal. 

Background

2. By a tenancy agreement dated 5 July 2014, the applicant as the landlord let to the respondent as the tenant the premises at Flat C (including the flat Roof adjacent thereto) on 10/F, Tower 5, Avignon, No.1 Kwun Chui Road, Tuen Mun, New Territories (“the Premises”) for a term of 2 years from 6 July 2014 to 5 July 2016 at a monthly rent of $23,500[1] (“the tenancy agreement”).  Both sides agreed that the rent includes all equipment, lighting and electrical appliances.

3. In the Notice of Application filed to the Tribunal on 23 December 2014, the applicant applied for recovery of possession of the Premises and rent as the respondent has failed to pay rent from 6 August 2014, and applied for order for mesne profits to the date of delivery of vacant possession of the Premises and costs. 

The Opposition

4. The respondent filed a Notice of Opposition on 7 January 2015 giving the following grounds:

“The tenant moved into the leased premises on July 6, 2014 having paid the amount of $47,000 HKD. Immediately thereafter, the tenant made numerous attempts to contact the landlord regarding serious maintenance and safety issues in the leased premises that were not disclosed to the tenant prior to signing the lease agreement and required timely repair.

The landlord failed to respond to the repeated request for repairs from both the tenant and from the Avignon management office. In mid August, after the landlord failed to respond to repeated phone calls from the Avignon management office on behalf of the tenant, the tenant found it necessary to contact Keith (property realtor) regarding the aforementioned safety and maintenance repairs. The landlord’s failure to address these issues has resulted in the landlord breaching the rental contract with the tenant. The lease agreement specifically states that the landlord must address repairs and maintenance concerns within 15 days. The tenant explained to the realtor that no rent monies would be paid for the leased premises until the safety and maintenance issues are fully addressed and remedied. The realtor came to the leased premises to take pictures for the landlord of the safety and maintenance issues. The realtor agreed to explain to the landlord that no rent monies would be paid until repairs were completed and request that repairs be made immediately.

This huge delay resulted in damage to the tenant’s personal property as well as a significant inconvenience to tenant’s lifestyle due to the safety concerns. The landlord continues to request that the realtor ask the tenant for payment of rent for the month of August and September. On September 10^th, the landlord sent a repairman to access the repairs needed and to take pictures of the safety concerns. The repairman … was only able to temporarily repair one of the safety issues. On September 13^th, the landlord requested to meet with the tenant in the presence of the realtor in order to come to an agreement regarding the maintenance issues and rent payments. As of October 31^st, scaffolding was installed on the outside of the apartment by the developer to fix the issues with the water leakage into the electrical system and air conditioning. Building management notified the tenant that it would take until November 15^th to complete the repairs. To date, the main bathroom cabinet door still has not been replaced.”

5. Then the respondent elaborated his repairs / safety concerns as follows:

(i) Water leaked onto the chandelier(s) in the living/dining area, causing damage to the wiring in one or both of the chandeliers. The leakage in the center chandelier was so great that a large water stain formed on the center of the antique Persian rug below it. The rug had been removed for cleaning but the chandelier no longer works. This caused a serious safety issue.

(ii) Excessive water leaked from the air conditioning units in three bedrooms including the master bedroom if the units were turned down or off. This had resulted in damage to the walls that had to be repainted twice. Due to the units having to be “on” and set to a temperature below 24^oC, electricity bill was excessively high and double what he would have paid if the repairs had been made in a timely manner. The water leakage in his daughters’ room was so severe and the smell of mold so strong that his two sons had to share a bed so that his daughters could take up their second single bed.

(iii)Water leaked into the chandelier in the master bedroom such that when it rained, water dripped onto the rug or anyone standing there. The chandelier no longer works.

6. The respondent alleged that the water leakage concern of the electric switches in the living room and corridor and master bedroom posed serious safety issue and put his 4 children at risk of electric shock. The respondent conceded however that this concern appears to have been resolved after mid November when the developer’s remedial works were completed.

7. As regards the main bathroom cabinet door incident as stated in the end of paragraph 4 above, the respondent submitted that in July 2014 when his 5 years old son was brushing his teeth, “the heavy metal and wood cabinet door fell off and almost crushed both of his feet. If he had not been standing on a stool, his feet would have certainly been broken. The falling cabinet door pushed his stool causing him to fall and bang his head on the metal door handle. He suffered a large contusion on the back of his head and severe periodic headaches.” The respondent then called the management office immediately to demand the removal of the broken door and requested that to be replaced or switched with a lighter wooden door. The management staff took the door away but had not yet replaced it.

8. The respondent argues that he would only make his rental payment when all the issues above are repaired and he would not be responsible for the rental during the months when the landlord breached the tenancy agreement by failing to respond to his safety concerns.

9. When the hearing took place before me on 23 January 2015, a Ms Tsang Wai Yee (“Ms Tsang”) appearing on behalf of the applicant said, apart from the rental in arrears since 6 August 2014, the respondent only paid one month’s deposit but failed to pay another month’s deposit on 15 August 2014 as required in the tenancy agreement.  Ms Tsang did not comment on the allegation of facts by the respondent save that the issues complained by the respondent are all related to the interior conditions of the Premises. The respondent had viewed the Premises when he signed the tenancy agreement. To the extent that the respondent had not raised these issues when signing the tenancy agreement, the applicant should not be responsible.

Relevant Clauses in Tenancy Agreement

10. The tenancy agreement appears in a standard format usually adopted by real estate agents. In the paragraph above, Ms Tsang was perhaps referring to Clause 6 of the tenancy agreement which states that:

“The Tenant shall during the Term keep the interior of the Premises in good and tenantable repair and condition (fair wear and tear and damage caused by inherent defects excepted) and shall deliver up vacant possession of the Premises in the same repair and condition on the expiration or sooner determination of this Agreement.” (underline added)

11. In my opinion, such requirement to “keep the interior of the Premises in good and tenantable repair and condition” is wide enough to cover the respondent’s responsibility for keeping the main bathroom cabinet door in good and tenantable repair and condition. However, I considered the other water leakage problems alleged by the respondent arose out of inherent defects which are excepted by Clause 6 otherwise, as admitted by the respondent, the developer would not have taken up the responsibility to carry out the remedial repairs.  Moreover there exists also Clause 9 in the tenancy agreement which states:

“The Landlord shall keep and maintain the structural parts of the Premises including the main drains, pipes and cables in proper state of repair provided that the Landlord’s liability shall not be incurred unless and until written notice of any defect or want of repair has been given by the Tenant to the Landlord and the Landlord shall have failed to take reasonable steps to repair and remedy the same after the lapse of a reasonable time from the date of service of such notice.”

12. The respondent did not produce any evidence of having given such written notice during the hearing. The allegation by the respondent regarding the 15 days requirement for remedial works is also not found in the tenancy agreement.

Respondent’s Liability to Pay Rent

13. Notwithstanding the above, I referred the parties to paragraphs 18-19 of Charmway Development Limited v Long China Engineering Limited, HCA 54/2001 (reported as [2001] 3 HKC 515) where Hon Chu J (as she then was) stated:

“18. Under the common law, the covenant to pay rent has been regarded as independent of the other covenants or obligations under a lease, including, for example, the covenant for quiet enjoyment: Edge v. Boileau and Others [1885] 16 QB 117, see also Taylor v. Webb [1937] 2 KB 283. A tenant’s obligation to pay rent is not independent upon the compliance by the landlord of its obligation under the lease.

19. There is therefore no room for the defence asserted by the plaintiff to the counterclaim, namely, it is not obliged to pay rent or the defendant is not entitled to rent by reason of the alleged breaches of the Tenancy Agreement on the defendant’s part.”

14. While the respondent said he understood the above, he submitted that what he alleged were serious breaches by the applicant that would give rise to safety concerns which would have rendered the tenancy agreement void under the law of contract.

15. I disagreed as there is no reported case where a lease has been ruled to have been rendered void for similar breaches but there are cases in which such argument has been raised unsuccessfully[2]. In any event, I considered the doctrine of frustration could not apply in the captioned case because the respondent and his family still resided at the Premises during the relevant period.

Judgment Made on 23 January 2015

16. Having heard the submissions by the parties therefore I made the Judgment as follows :   

(1)    Subject to paragraph (4) below, the respondent do deliver vacant possession of the Premises to the applicant;

(2)    The respondent do pay the applicant arrears of rent/mesne profits at the rate of $23,500 per month from the 6 August 2014 until delivery up of vacant possession;

(3)    The respondent do pay the applicant the costs of this Application which is summarily assessed at $434;

(4)    If the respondent should on or before 31 January 2015 (“Relief Expiration Date”) pay into the Tribunal all the arrears of rent/mesne profits as stated in paragraph (2) above (including all arrears of rent/mesne profits due on or before the date of payment) together with the costs referred to in paragraph (3) above, the respondent be relieved from the forfeiture incurred herein, and the lease of the Premises be reinstated.

(5)    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.

Respondent’s Interlocutory Application

17. Thus, the Relief Expiration Date expired on 31^st January 2015 when the respondent did not pay into the Tribunal any arrears of rent/mesne profits or costs to the applicant.

18. In the respondent’s interlocutory application filed on 30 January 2015, he attached an affirmation of 2 pages referring particularly to paragraph 17 of the Charmway Development case which states:

“… The Tenancy Agreement only provides in clause 4.10 for suspension of rent in the event of the Building being destroyed or rendered inaccessible by reason of such events as fire, defective construction or cause or calamity beyond the control of the landlord. ..”

19. The respondent said this would be directly applicable to his case where, because of defective construction, water was allowed into the electrical system of the Premises, rendering certain areas of the Premises unsafe and unoccupiable. He complaint that he could not even get hold of the applicant for 2 months to resolve the problems which persisted until November 2014 when the developer spent a month carrying out the remedial works. The respondent suggested that my judgment on 23 January 2015 failed to review all the facts.

20. The hearing of this interlocutory application took place on 9 February 2015. Then I pointed out to the respondent that there exists in the tenancy agreement no such clause as clause 4.10 in the Charmway Development case but the respondent submitted such a clause should be implied. Unfortunately under common law, there is no implied warranty on the part of a landlord that the premises let are in a reasonably fit state for habitation, or that it may be lawfully used for the purpose for which it was let. See Edler v Auerbach [1950] 1 KB 359 and Fortune Global Development Ltd v Shung Cheong Food Trading Ltd, HCA 1786 of 1999 (unreported, dated 18 March 2002). Such clause on abatement or suspension of rental, if any, must be expressly stated in the tenancy agreement before it can be applicable. The intending tenant is presumed to have made his own inquiries as to its condition on or before he signs a tenancy agreement, and, in the absence of a special stipulation, he takes the premises as its stands. This is so even when the premises demised were, to the landlord’s knowledge, required for immediate occupation. If the premises are, in fact, uninhabitable, then after accepting the tenancy, the tenant is without remedy unless he has obtained a warranty of fitness. The mere omission of the landlord to disclose defects, if any, is not a warranty or misrepresentation. See paragraph [235.300] in Halsbury’s Laws of Hong Kong,Volume 36, 2nd Edition, LexisNexis 2014.

21. In any event, I consider that the water leakage problems were reasonably resolved by the developer within a reasonable time, especially when the Respondent conceded that similar water leakage problems might have occurred at other units of the building so that the developer had to erect scaffolding to carry out the remedial works.

22. Also, while the Respondent argues that during the water leakage period the Premises were dangerous and inaccessible, he conceded once again he and his family were residing there during the whole period though suffering from grave inconvenience by just being able to use only some half of the Premises. This is a far cry from the Premises being inaccessible.

23. Therefore, I do not consider the alleged breaches by the applicant, if any, amount to rendering the tenancy agreement void so that the respondent can be excused for not paying rent during the relevant period. This would not however prevent the respondent from commencing any action for damages if he still considers appropriate after taking legal advice but this would be considered as a counterclaim.

24. Nevertheless in 黃英對譚炳新, HCMP 2049/2000 (unreported, dated 1 August 2000) and Chan Yin Kwan v Wong Kam Hoi, CACV 223/2007 (reported as [2008] 1 HKCLRT 27) and Ngai Ngok Pang & Another v Lee Syn Yuk, Michelle, LDPD 3030/2012 (unreported, dated 10 May 2013), the courts ruled that the Lands Tribunal does not have jurisdiction to entertain any counterclaim by the respondents.

25. More particularly, in  Ngai Ngok Pang& Another v Lee Syn Yuk, Michelle, supra, His Honour Judge Ko was of the following view:

“15. The Lands Tribunal may only, in an application for possession or ejectment, make an order for the payment of damages in respect of breach of a condition of the tenancy (see section 8(8) of the Lands Tribunal Ordinance, Cap 17). A counterclaim is generally treated as an independent action (see Hong Kong Civil Procedure 2013, paragraph 15/2/4). Since the respondent is not also counterclaiming for possession or ejection, the Lands Tribunal does not have jurisdiction to entertain her claim for damages.”

Leave to Appeal

26. Section 11AA (6) of the Lands Tribunal 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.”

27. After considering what the respondent presented in his affirmation supporting his interlocutory application, and after hearing what the respondent supplemented in his oral evidence and submission, I decide that the respondent’s appeal has no reasonable prospect of success, and the respondent failed to satisfy that there is some other reason “in the interests of justice” why the appeal should be heard. 

28. This is a simple application for recovery of possession and payment of outstanding rent/mesne profit and costs.  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

29. The interlocutory application by the respondent to seek leave to appeal and stay of execution of the order of possession are both dismissed.

Costs

30. The general rule is that costs should follow the event and the applicant seeks costs. Accordingly, I order that the respondent should pay the applicant the costs of this Application which is summarily assessed at $200.

[1] The tenancy agreement is subject to a break clause exercisable by either party serving not less than 1 month’s written notice after the expiry of the 11^th month of the term of tenancy.

[2] As stated in footnote 5 of paragraph [235.470] in Halsbury’s Laws of Hong Kong, Volume 36, 2^nd Edition, LexisNexis 2014, there was held to be no frustration in: Yung Kee Co v Cheung So Yin Kee [1983] 1 HKC 386, [1983-85] CPR 115 (premises destroyed by fire and subject to closure order three months before the end of a four year tenancy); Li Ching Wing v Xuan Yi Xiong [2004] 1 HKLRD 754, DC (ten day isolation order due to Severe Acute Respiratory Syndrome infection in the building, an event that caused interruption in the expected use of premises by the lessee would not frustrate the lease unless the interruption was expected to last for the period of the unexpired term of the lease, or at least, for a long period of it, in this case, the ten days were insignificant; National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675, [1981] 1 All ER 161, HL (warehouse premises which had been let for a term of ten years was deprived of the possibility of vehicular access, and thus of any use, in excess of a year by a road closure, frustration held not even to be a triable issue for the purpose of Rules of the High Court Ord 14 (see Civil Procedure (2013 Reissue) [90.0899]) when it was raised as a defence in an action brought by the landlords for rent payable during the period of the road closure…