BALANI CHANDRU AND ANOTHER v. CHUNG KA KIT AND ANOTHER

LDPD 1124/2018

[2018] HKLdT 59

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO. LDPD 1124 OF 2018

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DECISION

(LEAVE TO APPEAL)

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1.  This is an interlocutory application taken out by the 1^st and 2^nd Applicants (hereinafter referred together as “the Applicants” unless otherwise stated), filed by a Ms Chan Ching Yi ( Ms Chan) on their behalf on 17 July 2018 (“the Interlocutory Application”) seeking leave to appeal against my decision dated 13 July 2018. In that decision, I dismissed an application taken out by Ms Chan on behalf of the Applicants on 20 June 2018 which sought recovery of possession of the subject premises being known as Apartment Unit 01 on 19/F (including the Balcony thereof) of Tower 6B, Century Link, No 6 Ying Hong Street, Tung Chung, New Territories (“the Premises”). 

Background

2.  By a “Tenancy Agreement” dated 13March 2017 (“the T/A”) between the Applicants and the 1^st and 2^nd respondents (hereinafter referred together as “the Respondents” unless otherwise stated), the Applicants let the Premises to the Respondents for residential purpose for a period of 2 years from 20March 2017 to 19 March 2019 at a monthly rent of $12,000 (inclusive of management fee, Government rates and Government rent).

3.  In Schedule II to the T/A, there exists however a break clause whereby the Respondents and the Applicants shall have the right to terminate the T/A by giving to the other party 1 month’s written notice provided that both parties must complete the first 12 months of the T/A.

4.  On 20 June 2018, the Applicants applied to the Tribunal for recovery of possession of the Premises on the ground that the Applicants had issued a termination notice to the Respondents as per the break clause but the Respondents have not moved out.

5.  In its Notice of Opposition dated 26 June 2018, the Respondents replied, inter alia, the following:

(1)  Having realised the T/A was subject to a break clause, on 18 December 2017, they checked with the secretary of the landlord, ie Ms Chan, to see if the landlord was willing to rent the Premises or not;

(2)  On 21 January 2018, Ms Chan replied that the rental would be increased from $12,000 per month to $12,500 per month from 20 March 2018 to 19 March 2019;

(3)  Whereas the Respondents purported to negotiate, Ms Chan replied on 25 January 2018 that the rental would be increased from $12,000 per month to $12,300 per month from 20 March 2018 to 19 March 2019;

(4)  On 1 February 2018, Ms Chan enquired the Respondents if the latter had any problem with the increase in rental to $12,300 per month;

(5)  The Respondents confirmed “No Problem” on the same day.

(6)  On 27 February 2018, Ms Chan informed the Respondents that the Applicants were going to terminate the contract, effective from 20 March 2018;

(7)  On the same day, the Respondents wrote a letter to Ms Chan asking her to relate to the Applicants that the Respondents were not satisfied with the Applicants’ sudden change in position and backing out of the deal;

(8)  On 28 February 2018, the Respondents checked with Ms Chan again to see the final decision of the Applicants and Ms Chan said they could follow the renewal agreement they discussed before;

(9)  The Respondents asked if they had to sign the new contract or not but Ms Chan said she had to check with the Applicants;

(10)  On 19 March 2018, the Respondents chased for the answer and Ms Chan said that the Applicants were not going to sign the contract with Respondents;

(11)  On 4 April 2018, Ms Chan informed the Respondents that the rental needed to be increased to $15,500 per month;

(12)  On 11 May 2018, the Respondents received the termination notice from the Applicants.

6.  All the above conversations as recorded in WhatsApp are attached to the Notice of Opposition:

18 Dec 2017	12.27 pm	2nd respondent:	陳小姐， 八卦問下， 業主會否打算繼續租給我?
	1.30 pm	Ms Chan：	他不在港
......	......
21 Jan 2018	10.55 am	2nd respondent:	租約方面有消息嗎？ 因為都1月底了
		2nd respondent:	我需要時間決定
	10.56 am	Ms Chan：	我問問業後再覆你
	10.56 am	2nd respondent:	好的，謝謝。
	10.57 am	2nd respondent:	希望盡快得到他的回覆， 因為揾樓及搬家都需要長時間， 中間夾了農曆新年*
	10.58 am	Ms Chan：	明白
	11.31 am	Ms Chan：	已問業主， 續租金加$500（租金會是$12500 由2018年3月20日至2019年3月19日）， 請確認， 謝
	11.37 am	2nd respondent:	不可以將租金KEEP多一年嗎?
	11.39 am	Ms Chan：	要問
......	......
25 Jan 2018	12.09 pm	Ms Chan：	已轉告你的要求， 而業主現續租金只加$300（租金會是$12300 由2018年3月20日至2019年3月19日）， 請確認， 謝
	12.12 pm	2nd respondent:	還是一年生約一年死約嗎?
	12.21 pm	Ms Chan：	一年內（2018年3月20日至2019年3月19日）租金12300 到2019年3月前再談租金事宜
	12.22 pm	2nd respondent:	我老公這兩天出差， 我跟他商量一下， 下星期回覆你 謝謝
	12.23 pm	Ms Chan：	Ok
......	......
1 Feb 2018	3.34 pm	Ms Chan：	，請問租金12300有沒有問題？
		2nd respondent:	沒有問題
	3.38 pm	Ms Chan：	Ok我通知業主， 謝
	3.39 pm	2nd respondent:	謝謝
27 Feb 2018	12.58 pm	Ms Chan：	你好， 業主今天通知不續約即2018年3月20日終止租約
	1.02 pm	2nd respondent:	為甚麼? 不是已經確認好了嗎?
	1.06 pm	2nd respondent:	我有所有RECORD， 你們單方面毀我們信息承諾的
	1.07 pm	2nd respondent:	因為你們答應， 我再買了幾樣傢具
	1.08 pm	2nd respondent:	這不太負責任，對嗎?
......	......
	2.00 pm	Ms Chan：	我轉告業主再回覆你
......	......
......	......
28 Feb 2018	2.27 pm	2nd respondent:	陳小姐你好， 請問有消息了嗎?
	2.29 pm	Ms Chan：	稍後覆
	2.31pm	2nd respondent:	Okay, thank you
	5.12 pm	2nd respondent:	Any news Sorry for pushing but we really want to know how to do
	5.13 pm	Ms Chan：	應照之前續租安排
	5.14 pm	2nd respondent:	good to hear thanks so much
	5.15 pm	2nd respondent:	那我們需要再簽約嗎?
	5.16 pm	Ms Chan：	要問，明天覆
	5.18 pm	2nd respondent:	好，感謝你
19 Mar 18	5.31 pm	2nd respondent:	陳小姐，有消息嗎?
21 Mar 18	6.17 pm	2nd respondent:	?
22 Mar 18	11.10 am	Ms Chan：	業主不簽約
	11.12 am	2nd respondent:	什麼意思?
	3.01 pm	2nd respondent:	咁我今個月是否開始交$12300租?

*農曆新年, Chinese New Year, was 16 February 2018.

7.  Then, on 4 April 2018, the 2^nd Respondent received a letter via WhatsApp signed by the 1^st applicant as follows:

“Due to the landlord and tenant haven’t sign the renewal tenancy agreement.

Landlord would like to inform the tenant that the rent will be increased to HK$15,500 per month for the above premises and commencing from 20 April 2018.

With one month notice for the tenant to move out if the tenant don’t accept the increment.”

8.  The 2^nd Respondent refused via WhatsApp: Not possible.

Hearing on 13 July 2018

9.  Ms Chan attended the hearing on behalf of the Applicants. She did not dispute the WhatsApp conversation as produced by the Respondents. She explained however throughout the process she had only consulted the 2^nd Applicant who is the father of the 1^st Applicant, the latter being not in Hong Kong. In the event, the 1^st Applicant considered the agreed rental of $12,300 to be too low.

10.  It is trite that a contract of tenancy may be created by writing or orally by any words which express the intention of entering into legal relations for a fixed or periodic term.[1]

11.  Having reviewed the submission by Ms Chan and the WhatsApp conversation as produced by the Respondents, I ruled that Ms Chan had the ostensible authority[2] to bind the Applicants and the contract for renewal was made between the Applicants and the Respondents on 1 February 2018 at $12,300 per month from 20 March 2018 to 19 March 2019 when the 2^nd Respondent replied “OK” in the WhatsApp; the Applicants could not exercise the break clause under the T/A any more.

12.  Therefore, I dismissed the Applicants’ application with no order as to costs.

Leave to Appeal

13.  In the Interlocutory Application, Ms Chan submitted, inter alia:

(1)  A WhatsApp message or confirmation, being a form of electronic conversation, cannot constitute/ replace a tenancy agreement on which neither of the Applicants had signed;

(2)  A tenancy agreement has to be stamped.

14.  The 1^st Applicant attended this hearing on 31 July 2018 but had nothing to add as regards the grounds of the intended appeal.

15.  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.”

16.  However, 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.”

17.  With respect to the 1^st Applicant, a contract or a tenancy agreement needs not be in writing; a contract or a tenancy agreement can be formed by conduct of the parties or by oral agreement.

18.  Section 3(1) of the Conveyancing and Property Ordinance, Cap 219 provides that:

“Subject to section 6(2), no action shall be brought upon any contract for the sale or other disposition of land unless the agreement upon which such action is brought, or some memorandum or note thereof, is in writing and signed by the party to be charged or by some other person lawfully authorized by him for that purpose.”

19.  That section 6(2) states that even leases created by parol taking effect in possession for a term not exceeding 3 years at the best rent that can be reasonably obtained without a premium would not be affected by the formal requirements under section 3 afore-mentioned or subsection (1).

20.  More particularly, it is not the Respondents who brought the present application for recovery possession. The Applicants are estopped from denying there being a contract for renewal of the tenancy on 1 February 2018 by their agent, Ms Chan.

21.  Once a binding contract or tenancy agreement is formed, whether it is stamped under the Stamp Duty Ordinance, Cap 117 is irrelevant. Section 15(1) of the Stamp Duty Ordinance only provides that:

“... no instrument chargeable with stamp duty shall be received in evidence in any proceedings whatsoever except—

(a) criminal proceedings;

(b) civil proceedings by the Collector to recover stamp duty or any penalty payable under this Ordinance,

or be available for any other purpose whatsoever, unless such instrument is duly stamped.”

It does not state that a tenancy agreement which has not been stamped is invalid or unenforceable. This is particularly the case when section 9 of the Ordinance permits late stamping subject only to penalty.

22.  And in Poon Lone Leo v Lei Iok Chan, HCSA 49/2015 (unreported, dated 28 January 2016), notwithstanding a tenancy agreement was not stamped, the court relied on the written submission and evidence given in court as evidence of the tenancy agreement.

23.  I do not consider the appeal has a reasonable prospect of success or there is some other reason in the interests of justice why the appeal should be heard.

Conclusion

24.   Having considered all the above, the application for leave to appeal by the Applicants is refused. There be no order as to costs.

[1] See Halsbury’s Laws of Hong Kong, Volume 36 (2014), [235.002].

[2] See Bowstead and Reynolds on Agency, 21^st Edition, para 8-010:

“Where a person, by words or conduct, represents or permits it to be represented that another person has authority to act on his behalf, he is bound by the acts of that other persons with respect to anyone dealing with him as an agent on the faith of any such representation, in the same extent as if such other person had the authority that he was represented to have, even though he had no such actual authority.”