ATTORNEY GENERAL v. STEPHEN CHIU KWOK CHU

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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ASSESSMENT OF DAMAGES

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1. On 4th July 1984 interlocutory judgment was entered for the Plaintiff in this case with damages to be assessed.

2. On 20th September 1984 the hearing in respect of the assessment took place before me and since it raised matters of an unusually complicated nature I advised the parties that I should deliver judgment in due course.

3. This I now do and it will perhaps assist if I narrate briefly the history of the case.

4. The claim was originally filed in the District Court and it sought inter alia damages for trespass at a rate of 1099.13 dollars per month with effect from 8th December 1982. The claim was based on the Defendant's occupancy of a flat which he had been allocated by the Fire Services Department by virtue of his employment with that Department.

5. The defendant had had his services terminated on 8th December 1982 and was served with a notice to quit the effective date of which was claimed to be 21st January 1983.

6. For some months thereafter the defendant occupied the premises in defiance of the notice to quit, claiming that he had a right to do so until determination of an appeal against his dismissal by the Secretary of State in London.

7. When the case came up for hearing in the District Court on 20th July 1983 a transfer order was made to the Supreme Court pursuant to Section 39(2) of the District Court Ordinance.

8. By an amended statement of claim filed in the Supreme Court on 21st November 1983 the Plaintiff claimed inter alia damages for trespass and mesne profits at the rate of $17,000 per month from 8th December 1982 until vacant possession, the figure of $17,000 representing allegedly the current monthly market rental of the premises in question.

9. The next significant step in the process was the aforementioned interlocutory judgment, which was a consent judgment.

10. Against this background the parties appeared before me for assessment. The principal problem confronting me is that while I was served with much reference to case law and other authorities in the matter, very little meaningful evidence was presented on behalf of the Plaintiff; the agreed bundle of documents assisted in setting out the facts of the case but gave little help in assessing the quantum of damages. I shall make further reference to this in due course.

11. It was not in dispute that the premises in question were Departmental quarters allocated to the Defendant by the Director of Fire Services in connection with his employment. These premises had been leased to the Hong Kong Government and the lease dated 10th January 1978 was stated to run from the 26th August 1977 for a period of 5 years. No provision is made for any extension or renewal but it is clear that such extension or renewal took place since the Government was still in occupation at the point when this action was initiated.

12. The Defendant's status as occupant was that of licensee until his licence to occupy was revoked on 13th December 1982. On 14th December 1982 the Defendant at the request of the Director of Fire Services signed an authority permitting the Director to deduct from his pension rental from 8th December 1982 (the date of his compulsory retirement) to the point where he vacated the premises. For the reason already mentioned the Plaintiff continued to occupy until 24th May 1984.

13. In assessing quantum in this case the difficulties I have referred to have been occasioned by an absence of evidence on the part of the Plaintiff as to what he intended to do with the premises assuming the Defendant had vacated on the due date and also (which would have been useful) evidence as to what he did with the premises after they were vacated. The premises were "departmental" from which term one may deduce that ordinarily they would have been assigned upon their vacation to another officer of the Fire Services Department. There was, however, no evidence on this point either. Further, clause 2(i) of the tenancy agreement requires the Government "not to assign, sublet or part with possession of the said demised premises or any part thereof other than to a Government servant without the written consent of the landlord. (which consent shall not unreasonably be withheld)." The Plaintiff offered no evidence as to its intention or its actions in respect of that provision, which makes its claim for market rent in my judgment impossible to support.

14. By this I mean that in the absence of evidence that the Plaintiff arranged or intended to place the premises on the open market as soon as they were vacated the only conclusion I can arrive at is that they would, within a very short time, have been allocated to another Fire Services Officer.

15. Supplementary to that conclusion is the Fact that the Defendant paid the rent according to the usual formula for a Government employee namely at the rate of 7½% of his gross monthly income. We had evidence as to that income.

16. As a matter of law it is my opinion that the Plaintiff may recover only that amount which he was paying to the landlord for the premises and this was shown to be $6,000 per month. Further the Plaintiff had a duty to minimise his losses and in the circumstances of this case I should consider that that duty would be discharged by his allocating the premises to an officer of similar rank to the Defendant and paying a similar monthly rental.

17. On the reasonable assumption that perhaps a month would be required to have the premises ready for a new occupant the date at which the minimisation of looses would commence would be approximately a month after the date upon which the Defendant should properly have vacated.  The effective date of the Notice to quit being 31st January 1983, the commencement date is 28th February 1983.

18. The issue of estoppel arose, resulting from an exchange of correspondence between the Director of Fire Services and the Defendant wherein it was sought (as I interpreted the letters) to have the Defendant authorise the deduction from payments due to him, a rental based on the 7½% formula mentioned, for as long as he continued to occupy.  The authorisation was not in the event signed and it appeared that the deduction was not made, though that was not made clear. I am, however, satisfied that in the circumstances of this case the Defendant may not rely upon estoppel, since he well know that his licence to occupy had been revoked and whatever correspondence arose subsequent to that was, on the part of the Plaintiff, essentially for administrative and accounting purposes.

19. Making the best I can of the material before me, I order that the Defendant pay to the Plaintiff mesne profits at the rate of $6,000 per month with effect from 1st March 1983 to 24th May 1984. From that there falls to be deducted the sum of $1099.13 per month from 1st March 1983 to 1st April 1983; from that date the agreed revised rental of $1,148.15 per month upto 1st April 1984; and for the short remaining period to 24th May 1984, the further revised rental of $1253.63 per month.

20. This formula takes account of (a) the rental which, upon the evidence as I interpreted it, the Plaintiff required to pay his landlord and (b) the extent to which the Plaintiff was under an obligation to minimise his losses. The defendant must, of course, be given credit for any rental payment he may have made to the Plaintiff after 1st March 1983 by way of deduction from his emoluments.

21. The Plaintiff will have his costs, including those of the interlocutory judgment of 4th July 1984. These will be taxed in the absence of agreement.

Dated at the Supreme Court Registry, Hong Kong, this 23rd day of October, 1984, and delivered on 6th November, 1984.