DELIGHT SURPLUS LTD v. LAM HUNG

DCCJ2691/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2691 OF 2013

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DECISION

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Introduction

1. By summons dated 5 September 2013, the plaintiff applied for summary judgment against the defendant as per its Statement of Claim filed herein on 23 July 2013 for the following relief:-

(a)  delivery of vacant possession of the Premises;

(b)  injunction to remove the wall stall;

(c)  mesne profits;

(d)  interest on mesne profits; and

(e)  costs.

2. The summons is opposed by the defendant, who is represented by Mr Kenneth CL Chan and Mr Edward Lun today.

Background

3. By a tenancy agreement made on 21 June 2011 (“the Tenancy Agreement”) between the plaintiff’s predecessor in title and the defendant, the former demised the Premises to the latter for the term of 2 years from 1 July 2011 to 30 June 2013 (both days inclusive) at the rent of HK$9,800 per month exclusive of rates and government rent. 

4. The Premises, facing Yu Chau Street, Kowloon, consists of columns, space in between the columns (“the Wall Space”) and space at one side of the Premises (“the Side Space”). The external wall of the columns, the Wall Space and the Side Space for the combined length of about 25.5 feet were the area let to the defendant under the Tenancy Agreement.  The width of the Wall Space was about 1.5 feet, while that of the Side Space about 7.2 feet.  There is no evidence whatsoever before the court that the Wall Space was formed illegally in contravention of the Buildings Ordinance. 

5. The defendant has at all material times used the Premises, in conjunction with a structure of about 25.5 feet by 3.8 feet situated on the pavement and erected against the external side of the wall of the Premises (“the Wall Stall”), for running the business of haberdashery.  At all material times, the defendant has operated as a hawker at the Wall Stall under a Fixed Pitch Hawker Licence (Wall Stall) he obtained from the Government.

6. The said term of the Tenancy Agreement expired on 30  June 2013 by effluxion of time.  Clause 4(g) of the Tenancy Agreement stipulated that:-

“The Tenant shall deliver up vacant possession of the said premises together with all fixtures, fittings and additions therein and thereto to the Landlord at the expiration or the sooner determination of the said term of tenancy …...”.

7. The plaintiff’s case is that since the expiry of the Tenancy Agreement on 30 June 2013, the defendant has failed and still fails to deliver up vacant possession of the Premises in that:-

   (1)  On 1 July 2013, the defendant did not deliver up to the plaintiff vacant possession of the Premises despite so demanded by the plaintiff’s representative.  The Side Space was still stuffed with materials;

   (2)  Further, the defendant demolished the wooden buttress used previously for fixing the Wall Stall against the columns and outer walls of the Premises.   At about 1 inch from the outer boundary of the Premises, however, the defendant, by himself or his agent, erected a metal framework to back up and form a stall separate from the Premises (“the New Stall”).  The New Stall is largely of the same size and location as the Wall Stall; and

   (3)  The New Stall, being so erected, blocked and will continue to block free or easy access to the external wall of the columns, the Wall Space and the Side Space of the Premises by the plaintiff. It also rendered impossible for the plaintiff to let the Premises to others.

Relevant Legal Principles

8. The correct approach in an application for summary judgment is not in dispute.  The court has to determine two questions: firstly, whether what the defendant says is believable as opposed to whether its version of events is to be believed; and secondly, if it is, whether what the defendant says amounts to an arguable defence in law. In determining the first question, the court should not embark on an mini-trial of the action on affidavit evidence.  The burden of proof is not a heavy one. It is not the function of the court at this stage to assess if a defence will succeed at trial.  The court should not rule out a defence simply because it thinks the defence would not be believed by the trial judge because of some inherent weaknesses, save where what the defendant says is practically moonshine.  Insofar as the second question is concerned, summary judgment will not be granted if there are arguable defences or serious disputes of law.

Was Vacant Possession delivered?

9. Whether in a given case the tenant has in fact delivered up vacant possession is a question of fact. The question is whether the landlord could, if it wanted to, occupy the premises without difficulty or objection.

10. In the present case, while the New Stall is an independent structure away from the Premises, the gap in between this stall and the Premises is only about 15 millimetres to 60 millimetres (ie 0.59 to 2.36 inches).  The plaintiff obviously cannot gain access to the Premises through that thin gap.  This thin gap between the Premises and the New Stall is quite meaningless in the context of giving vacant possession.

11. The same question arose before the Court of Appeal in Toho Limited v Ng Sik Yu, CACV 36/2004 (Judgment of the Court of Appeal dated 29/10/2004).  At paragraphs 11 and 13, Cheung JA (giving judgment of the court) had this to say:-

“11. We disagree with the judge that vacant possession of the wall space had been delivered by the defendant. The right to vacant possession means actual unimpeded physical enjoyment of the wall. The impediment does not mean any impediment but one which substantially prevents or interferes with the enjoyment of the right of possession of a substantial part of the property...

 13. In this case, the wall space let to the defendant is on the external wall of the property.  If the defendant is to deliver vacant possession of the wall space let to him then he has to do so in a way which will enable the plaintiff to have unimpeded use of that space.  By demolishing the original stall, the defendant would, of course, have provided the plaintiff with unimpeded access and use of the wall space.  However, by erecting the new stall in front of the wall space, the defendant in effect prevented the plaintiff from using that part of the external wall of the property.  While the new stall is an independent structure away from the exterior wall, the gap in between this stall and the exterior wall is only about 2.5 inches.  The plaintiff cannot gain access to the external wall of his property through that thin gap.  This thin gap between the wall space and the new stall is meaningless in the context of giving vacant possession.  Although the new stall is on government land, it substantially prevents and interferes with the plaintiff’s enjoyment of the right of possession of a substantial part of its property.  If the principle on the giving of vacant possession is recognised and applied, then on no account can it be said that vacant possession had been given by the defendant.”

12. In my judgment, the facts of the present case are wholly indistinguishable from those in the Toho case, which is binding on this court.  Mr Kenneth Chan argued that access to the Wall Space can be gained from the internal portion of the building,  indeed the Wall Space had been created in the first place by relocating the partition wall inwards from its former location.  I am of the view that this is no answer to the plaintiff’s claim in the absence of any evidence that such relocation of the partition wall was done illegally. 

13. Further, I find that the defendant’s reliance on the case of Champion Wealth Investment Limited v Chan Ping Chuen, HCA 1373/89 (Judgment dated 8/5/1990) is completely misplaced.  In that case, there was clearly no contractual relationship between the registered owner and the stallholder.  Unlike the present case, it did not concern the question as to whether a tenant has delivered vacant possession of the rented premises to his landlord upon expiry of a lease.  In this regard, I can do no better than to quote the words of Cheung JA at paragraph 23 of the Toho case:-

“23. In the present case, we are concerned with whether a tenant has delivered vacant possession of rented premises to his landlord. The question has to be adjudged by the context of this special relationship of the parties and the law governing delivery of vacant possession of a premises. This by itself is distinguishable from the situation in Yu Shu Tung where the defendants were not in any contractual relationship with the landlord. To extend the principle stated in Allen to the present situation is totally inappropriate.”

Statutory Authority

14. The licence granted by the Government to the defendant to carry on trading in the New Stall cannot be an answer to the defendant’s failure to deliver vacant possession of the Premises to the plaintiff.  The two matters are distinct and separate.

15. Again, I would quote the words of Cheung JA at paragraph 14 of the Toho case:-

 “14. The Food and Environmental Hygiene Department (“the Department”) which has assumed the functions of the former Urban Council had continued to grant the defendant a licence to carry on trading in the new stall.  This licence cannot be an answer to the defendant’s failure to render vacant possession to the plaintiff.  The defendant may well have a licence from the government to carry out trading in a fixed pitch wall stall on government land, but this is a separate issue from the question of his failure as a tenant in giving vacant possession of his rented premises to his landlord.  The two matters are distinct and separate.”

Conclusion

16. For the reasons stated above, I am of the view that this is a clear and obvious case where the plaintiff is entitled to judgment.  The defendant has failed to show that he has an arguable defence to the plaintiff’s claim.  I shall now hear the parties on the proper form of the order to be made.

(Discussion re order)

17. I make an order in terms of paragraphs (1), (2) and (3) of the summons dated 5 September 2013.

18. The order made under paragraphs (1) and (2) of the summons will take effect 2 months from the date hereof.

(Discussion re costs)

19. The order I make as to costs is as follows.  Costs of the action, including this application, be paid by the defendant to the plaintiff, such costs to be taxed if not agreed, with certificate for counsel.