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

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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 v Secretary 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.

[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.