Extrawell Holding Ltd. v. The World Jewellery (China) Ltd.

HCA 6832/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 6832 OF 2000

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Assessment of Damages

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1. This is an assessment of damages for breach of tenancy agreement.

2. The Plaintiff was the registered owner and landlord of workshop no. 9 at 22nd floor of Kodak House II at 39 Healthy Street East, North Point, Hong Kong.

3. By a tenancy agreement signed on 19 July 1999 between the Plaintiff and the Defendant, the Defendant agreed to rent the said workshop at the monthly rental of HK$36,000 for a term of 3 years commencing from 9 July 1999 to 8 July 2002. Rental was payable in advance on the 1st day of each calendar month. Rent free accommodation was granted for a total of 84 days from 9 July 1999 to 30 September 1999 pursuant to clause 1 of the tenancy agreement.

4. The Defendant entered into occupation pursuant to the agreement and paid the Plaintiff a deposit of HK$72,000 and 1 month rental for the period of 1- 31 October 1999. Since 1 November 1999 the Defendant made no further payment. On 29 December 1999 the Defendant delivered the keys of the premises to the Plaintiff and surrendered possession of the premises to the Plaintiff.

5. By a letter of 30 December 1999 the Plaintiff accepted the surrender but reserved its right to claim against the Defendant for loss and damages suffered as a result of the Defendant's breach.

6. The Plaintiff took possession of the premises on 3 January 2000 and found the false ceiling, door lock and window handles broken. Rubbish, hanging cabinets and partitions were left behind in the premises.

7. To mitigate its loss, Plaintiff entered into a new tenancy agreement with a second tenant at a monthly rental of HK$36,500 from 15 May 2000 to 14 May 2003. Rent free accommodation was granted to the new tenant for the months of 15/5/2000-14/6/2000, 15/5/2001 - 14/6/2001 and 15/5/2002 - 14/6/2002 pursuant to clause 1 of the tenancy agreement.

8. The Plaintiff took out the present writ to sue for damages on 8 July 2000. In default of notice of intention to defend, judgment was entered on 6 September 2000 in favour of the Plaintiff for damages to be assessed.

9. Pursuant to the tenancy agreement the Defendant was liable to pay, inter alia, the following:-

(a) rent and management fees, by virtue of clause 2 (1);

(b) charges for electricity, water, gas and other utility services charges, by virtue of clauses 2 (2) and 2 (3).

(c) Damages for alteration, addition, damage done to the premises and a duty to reinstate, by virtue of clause 2 (6).

(d) interest at 2% per month for outstanding payment, by virtue of clause 6 (5).

10. I accept Madam CHAN's evidence on behalf of the Plaintiff on the consequential expenditures occasioned by the Plaintiff upon the breach of the Defendant. The damages suffered by the Plaintiff were quantified as follows:-

(a)	Loss of rental at HK$36,000 per month from 1/11/99 to 14/5/00, giving credit to the HK$72,000 paid by the Defendant ( $36,000 x 6.5 months - $72,000)	HK$162,000.00
(b)	arrears of management fees payable by the Defendant from 1/1/00 to 14/5/00	26,843.23
(c)	government rates for the period of 9/7/99 to 14/5/99	10,950.34
(d)	electricity charges for 8/2/00 to 5/5/00	247.00
(e)	costs for re-instating the premises	7,150.00
(f)	estate agency fees for letting the premises	36,500.00
(g)	legal fees for the execution of the new tenancy agreement	3,604.00
(h)	loss of rental for the balance of the term of tenancy from 15/5/00 to 8 July 2002, $36,000 x 25 3/4 months - ( $36,500 x 25 3/4 months - 3 months of rent free accommodation at $36,500 )	96,625.00
	Total	HK$343,919.57
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11. I award judgment in favour of the Plaintiff in the sum of HK$343,919.57 and interest at the contractually agreed rate of 2% per month for items (a) to (e) from the date of the writ until judgment. Pre-judgment interest is not awarded on items (f) to (h) to account for an accelerated receipt in item (h).

12. Judgment interest at judgment rate accrues from the date of judgment until payment.

13. I also order costs nisi in favour of the Plaintiff against the Defendant.