WONG YING WAH v. YEUNG TSANG YING YING SOPHIA

LDPD 861/2015

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO. LDPD 861 OF 2015

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JUDGMENT

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Background

1. The applicant is the registered owner of the property known as Flat H on 52/F of Tower 11, Carmel Cove, No 1 Kin Tung Road, Caribbean Coast, Tung Chung, Lantau Island, New Territories (“the Premises”).  By a “Formal Tenancy Agreement” dated 7October 2014 between the applicant and the respondent (“ the T/A”), the applicant let the Premises to the respondent for residential purpose for a period of 3 years from 15October 2014 to 14 October 2017 at a monthly rent of $22,800 (inclusive of management fee, Government rates and Government rent).

2. The T/A is in standard form and contains, inter alia, the following provisions:

“1. The Tenant shall pay the Rent in advance on the 15^th day of each and every calendar month according to the Terms of the Formal Tenancy Agreement……

6. The Tenant shall during the Term of Formal Tenancy Agreement keep the interior of the Premises in good conditions (except fair wear and tear and damage caused by inherent defect) and shall deliver up vacant possession of the Premises in the same condition on the expiration or sooner termination of this Formal Tenancy Agreement.

9. The Landlord shall keep and maintain the structural parts of the Premises and the main drains and cables in proper state of repair Provided that the Landlord’s liability shall not be incurred unless and until written notice of any defect or want of repair has been given by the Tenant to the Landlord and the Landlord shall have failed to take reasonable steps to repair and remedy the same after the lapse of a reasonable time from the date of service of such notice.”

3. On 27 April 2015, the applicant filed a Notice of Application (“Form 22”) through Messrs H L Wong & Co, Solicitors at the Lands Tribunal against the respondent for a possession order on the ground of non-payment of rent since 15 March 2015.

Fire on 18 March 2015

4. The respondent said she and her family moved into the Premises only some 3 months after the T/A commenced but on 18 March 2015[1], a fire broke out and the respondent stopped paying rent onwards, alleging “the interior fixtures and decorations of the premises including electrical cables and wiring system had all been burned down and damaged, electricity and water were all disconnected, the whole flat of the premises had become totally unsuitable for living as residence of human being”.

5. According to an incident report compiled by the Fire Services Department dated 27 March 2015 and submitted by the respondent, the firemen arrived at 13:53 hrs and the fire was put out by 14:16 hrs. The fire was classified as No 1 Alarm.

6. The report said the fire was believed to be caused by the following:

“Sparks/heat from electric faults of the electric wiring of an electric switch ignited its insulating material and in turn set fire to the same and nearby combustibles.”

7. The respondent also submitted a report dated 13 April 2015 prepared by Group Access Limited[2] which holds a Certificate of Registration of Electrical Contractor. The report stated:

(1) Wall mounted air conditioner at living room was seriously damaged.

(2) Cooker switch for air conditioner was seriously damaged.

(3) Sofa under the air conditioner was seriously damaged.

8. The report concluded that: “As per on site finding and our evaluation, the fire incident was properly caused by electricity leakage occurred at power wiring of the cooker switch and enhanced by flammable material of the sofa.”

The applicant’s evidence

9. According to the witness statement filed by the applicant on 24 June 2015, on 18 March 2015, having been informed by the Fire Services Department of the fire, the applicant went to the Premises and found only the living room was seriously affected. Upon being cross-examined by the respondent, the applicant conceded that the bedrooms of the Premises were smudged and stained.

10. The applicant stated that during his inspection of the Premises on 18 March 2015 he had consulted a Ms Chow of the management office if the management fees for the Premises had incorporated fire insurance and he was confirmed affirmative but that fire insurance would cover only the structural part of the Premises.

11. In both the witness statement and his evidence on 2 July 2015, notwithstanding the above, the applicant had reminded the respondent on site that the respondent had still had to pay the rent on time as it was 3 days in arrears. According to him, the respondent assured him courteously that rent would be payable and she would reinstate the Premises as well.

12. Having not received the rental for March 2015, the applicant followed up with WhatsApp messages dated 23 March 2015 and 24 March 2015 when the applicant repeated his demand for rent for the period from 15 March 2015. Indeed the latter message was sent following the respondent’s earlier reply on that day that she was still pending the report by the Fire Services Department and the management office so that she could submit a claim for compensation. The original text as shown in the WhatsApp is as follows:

“情況要待消防人員在查檢, 通過佈告知會物業管理委員會及公司後, 物業管理委員會連同消防人員「驗查佈告」及我們的「伸佈」及物業管理公司之「述說佈告」合併成為共同的「伸佈文件」才向「保險公司」伸請保償。

現在該物業是停止電力共應及水也停而且是不適而居住 我們要等…消防做完成檢查後才可以與此物業作維修服務”

13. In response, the applicant wrote via WhatsApp that irrespective of the circumstances the respondent had to pay rent on time because he needed the rental payment to repay the mortgage instalments. The applicant concedes that the Premises were not in fact encumbered by any mortgage (and produces a current copy of the land search in support); he wrote such in the message only for the purpose of persuading the respondent to pay up the rental in arrears.

14. At about 8:45 hrs in the morning of 25 March 2015, the applicant received the following message from the respondent suggesting a telephone conversation soon after her return to Hong Kong:

“請問你們是否方便和我們通電在明天我下午回港後能致電各(原文如此)下”

15. Then on 25 March 2015 around 23:00 hrs, the applicant received a call from the respondent who said as the Premises had been mortgaged it should have been covered by an insurance policy that would compensate for the rental and her reinstatement costs. To that the applicant replied that even if there be any insurance policy it would compensate the bank rather than him. The respondent persisted and asked which bank that the applicant had taken out the mortgage. The applicant said it was Standard Chartered. The respondent then said she had a friend who worked with the Tuen Mun branch of the bank and she would check with him.

16. The applicant complains that it was very difficult to get contact with the respondent on the phone[3]. In such regard, he relied very much on the services of the estate agent, Ms Ruby Yu (“Ruby”) of Centaline Property Agency Limited, who introduced the respondent to the Premises and assisted in formulating the T/A to liaise with the respondent. For instance, according to a WhatsApp message dated 19 January 2015, the applicant requested Ruby to remind the respondent to pay the rent for January 2015 which had become overdue for 6 days. Similarly, on 16 February 2015, the applicant requested Ruby to remind the respondent to pay  the rent for February 2015 which had become overdue for 3 days[4]. And by WhatsApp messages dated 18 March 2015 and 21 March 2015 (ie 3 days after the fire incident), the applicant requested Ruby to remind the respondent to pay  the rent for March 2015.

17. Mr Wong Ho Chun (“Mr Wong”) also of Centaline Property Agency Limited (but of different branch than Ruby)[5] assisted in the following-up of the leasing of the Premises, like changing the water tap at the living room of the Premises at the request of the respondent in November 2014. On 18 March 2015, having been informed by the applicant of the fire, Mr Wong enquired the respondent via WhatsApp the particulars or situation after the fire incident. No reply was received from the respondent. Then on 20 March 2015, the applicant sent various photos of the Premises taken after the fire to Mr Wong. Regrettably these photos are very dark and hardly discernible.

18. And on 26 March 2015, Mr Wong enquired the respondent of any insurance or decoration arrangement. Then on 4 April 2015, Mr Wong enquired the respondent via WhatsApp that if he could be of any assistance. He received a reply from the respondent declining his offer of assistance because she had made her own arrangement. The original WhatsApp message in Chinese is as follows:

“謝謝你的在意, 用不着了。 以(原文如此)做了安排及也與保險聯繫上。”[6]

19. According to a WhatsApp message dated 11 April 2015, the applicant inquired Mr Wong if he would be responsible for compensation to the tenant. Mr Wong replied on 14 April 2015 that according to legal advice taken, the tenant had to pay rent on time no matter what happened, failing which the applicant could initiate proceedings under the rental ordinance.

20. The applicant denied he had purchased any home insurance nor he had made any promise to the respondent regarding compensation. More particularly, the applicant denied having granted any rent free to the respondent after the fire on 18 March 2015.

21. In any event, as the respondent has failed to pay rent since 15 March 2015, the applicant instructed Messrs H L Wong & Co, Solicitors who issued a demand on 16 April 2015 for the rentals in arrears which had been of no avail.

The defence by the respondent

22. The respondent concedes she had not paid rent since 15 March 2015.  She said the fire on 18 March 2015 was not caused by her negligence or oversight but solely by the substandard quality of the electric wiring and defaulted switch for which the applicant should be liable as landlord.  As a consequence, the interior fixtures and decorations of the premises including electrical cables and wiring system had all been burned down and damaged, electricity and water supply were all disconnected, the whole flat of the Premises had become totally unsuitable for living as residence of human being.

23. The respondent submits the Premises had lost the functions as residential premises and “the value of collecting rental for commercial income purpose”. According to her Notice of Opposition dated 5 May 2015, soon after the occurrence of the fire, the applicant arrived at the Premises and had intimated to her that he would report to the bank from which he obtained a mortgage which also included an insurance policy. After checking with the bank for details of the insurance coverage, the applicant would inform her about the updated information.

24. In her Notice of Opposition, the respondent stated that on 26 March 2015[7], she called the applicant and asked him about the result of his checking with the bank. She was told that the applicant had checked with the Standard Chartered Bank Tuen Mun Branch and he was allowed to give her the right of exemption to pay rent for more than 3 months[8] until the Premises was repaired. In addition, the costs and expenses of the hotel accommodation would be compensated at $1,300/day for a period up to one year. Repairing and repainting costs for the walls and ceiling damaged plus all burned down wirings would be compensated; the three air-conditioners[9] would be compensated for replacement though the furniture and personal belongings plus the move in/out and storage cost and cleaning cost would not be covered. In respect of this latter, the respondent said she was not satisfied and she told the applicant that she would rather check with the Standard Chartered Bank Head Office and the Insurance Division. The respondent said at trial this telephone conversation took some 15 minutes 26 seconds.

25. As the tenant and the occupier of the Premises, the respondent submits she had no other choice but to move out of the Premises. She alleges that on 28 March 2015, after receiving the confirmation from the applicant that the insurance policy for the flat would cover and compensate her for hotel accommodation at $1,300/day, she and her family had stayed in hotel and been paying much higher costs of hotel accommodation than the amount of the original rent of the Premises while pending compensation from the proposed insurance claim due to the said fire incident.

26. Also in her Notice of Opposition, the respondent said on 6 April 2015[10], she called the applicant and informed him what she had checked from the Standard Chartered Bank Head Office: repairing for damaged ceilings, wall and doors, the electrical wiring and circuits/switches would all be covered by the insurance policy; air-conditioners would be compensated; sofa and personal belongings would also be compensated up to a reasonable standard; and the costs and expenses of the hotel accommodation would be compensated at $1,300/day for a maximum period of 1 year. She strongly requested the applicant to discuss and negotiate with his bank to compensate her for the costs of moving in/out plus storage for the furniture and her personal belongings in addition to the items already agreed and accepted by the bank.

27. According to the Notice of Opposition, the applicant replied that he would allow the respondent not to pay rent for more than 3 months but he would not claim the bank insurance because he had made use of the Premises as well as some other properties to borrow some $20 million from bank for business purpose and because of the business, he had decided not to apply and claim the insurance for compensation. The respondent said she was very upset.

28. The respondent stated in the Notice of Opposition that the applicant had failed to fulfil his responsibility in submitting the application of claim for the insurance compensation for her losses and damages. She and her family had suffered not only the losses and damages of personal assets caused by the fire but also the proper home residence; her family members could not stay together as she and her husband were staying in one double bedroom of a hotel and her daughter had to stay at different places by herself. And because they are not staying at the Premises, they should not be liable to pay any rent for the Premises but if the applicant committed to compensating her for the losses and damages caused by the fire, she would consider resuming the rent payments afterwards.

29. However, in her witness statement of 24 June 2015, she said: “The 18^th March 2015 fire incident on the Premises is act of God nature for which is (sic) beyond contemplation of both the landlord and tenant. It is not self-induced and that fire incident had made the rental agreement fundamentally impossible to perform. The 18^th March 2015 had frustrated the rental agreement. By common law and s16 Law Amendment and Reform (Consolidation) Ordinance Cap 23 the tenant is no longer liable to pay any rent and cannot live in that premises since 18^th March 2015.” (underline added)

Assessment of Evidence

30. From the above, it is apparent that the evidence of the applicant and respondent about what happened after the fire incident on 18 March 2015 was at odds with one another. This is particularly the case when the respondent suggests that the applicant had reneged his promise to allow her occupation of the Premises rent free whereas the applicant denies having made such a promise.

31. In making my findings of fact in this case, I adopt the following general principles as to fact finding and assessment of credibility set out in Hui Cheung Fai v Daiwa Development Ltd, HCA 1734/2009 (unreported, 8 April 2014) at §§78-82:

“78. In deciding whether to accept a witness’s account, importance should also be attached to the inherent likelihood or unlikelihood of an event having happened, or the apparent logic of events: eg Lam Rogerio Sou Fung v Tan Soon Gin George (unreported, HCA 2576/2005, 5th May 2011) §39 (Chu J).

79. In determining a witness’s credibility, I have also attached importance to the consistency of the witness’s evidence with undisputed or indisputable evidence, and the internal consistency of the witness’ evidence. The latter type of consistency is often tested by a comparison between the witness’ oral testimony and his or her witness statement.

80. I have cautioned myself against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses: Ting Kwok Keung v Tam Dick Yuen (2002) 5 HKCFAR 336 at §§36-37 (Bokhary PJ).

81. The practical approach to assessing credibility of witnesses in a case such as the present may have best been summarised by the words of Robert Goff LJ, as he then was, in The Ocean Frost [1985] 1 Lloyd’s Rep 1 at 57:

“Speaking from my experience, I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities.  It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents, to the witnesses’ motives, and to the overall probabilities, can be of very great assistance to a Judge in ascertaining the truth.”

82. Whilst these words were spoken in the context of a fraud case, I believe they are applicable to any case where a witness’ credibility features prominently in the court’s determination…”

32. As regards the respondent’s assertion that the applicant had promised to her that some 3 months’ rent would be exempted because of the fire, I prefer the evidence of the applicant. It is undisputed that at least up to 24 March 2015, the applicant had been insisting that the respondent should pay rent irrespective of the fire. Indeed, by reading the reply from the respondent on 24 March 2015 which is restated at the end of §12 above, I believe the evidence of the applicant that the respondent agreed initially to carry out the reinstatement.

33. It is the case of the respondent that the applicant changed his stance after the telephone conversation on 25 March 2015 which lasted some 15 minutes. Firstly, I do not believe the applicant would have taken up the responsibility to check with his bank for details of the insurance coverage for the benefit of the respondent; otherwise he would have disclosed this earlier to the respondent instead of merely chasing the rental in arrears on 24 March 2015. The evidence of the applicant as outlined in §15 above appears to be the more logical sequence of events when the applicant disclosed in his message of 24 March 2015 that he needed the rental to repay the mortgage instalments though he committed to no mortgage.

34. Whereas the respondent argues that if there had not been an agreement as to rent exemption, the applicant would have kept on chasing for the rental payment after 25 March 2015, this assertion does not point unequivocally to any agreement reached. If the case of the respondent be true, her reply to Mr Wong on 4 April 2015 would not have been that she had made her arrangement; most probably, the respondent would have shifted the responsibility to the applicant or related to Mr Wong what the applicant had promised.

35. At §5 of her Notice of Opposition, the respondent stated the applicant had on 25 March 2015 promised to give her the right of exemption to pay rent for more than 3 months but at trial, the respondent said the rent free period promised by the applicant was between 1 to 3 months. The period, if really promised, is too uncertain to support any intention to create legal relation. Remember this conversation was conducted over the telephone when the respondent had already made her position clear in her message of 24 March 2015 that the Premises were not habitable. Whereas the telephone conversation lasted as much as 15 minutes plus, there would have been many back and forth discussions  where there would be ample scope for miscommunication or misunderstanding.

36. A fortiori, I find the respondent to be a woman of assertive behaviour but having convoluted thinking. For instance, when the applicant was cross-examined by her on 2 July 2015 and stated that he received a telephone call from the respondent on 25 March 2015 as outlined in §15 above, later on in the same afternoon, the respondent accused the applicant of declining to admit he had had a telephone conversation with her on 25 March 2015. She was also furious when she was referring to the fire incident, all along suggesting the Premises were not habitable. Throughout the trial, the respondent had demonstrated a character so strong that she would be eager to say her own words without listening to others to explain their position clear.

37. There was also dispute as to whether the respondent had another telephone conversation with the applicant on 10 April 2015. While the applicant denied during cross-examination on 2 July 2015, the respondent was able to produce telephone record to prove the case[11]. Despite this mistake or, according to the respondent, lie of the applicant, if the applicant had undertaken to compensate the respondent as stated in §§24-26 above, the applicant would not have sent message dated 11 April 2015 to Mr Wong, inquiring him if he would be responsible for compensation to the tenant.

38. Witnesses can make mistakes, but the mistakes do not necessarily affect other parts of their evidence.  Likewise, witnesses can regularly lie. However, lies themselves do not mean necessarily that the entirety of that witness’ evidence is to be rejected.  A witness may lie in a stupid attempt to bolster his case, but the actual case nevertheless remains good irrespective of the lie.  It is essential to have regard to the entirety of a witness’ evidence.  See Lam Rogerio Sou Fung v Tan Soon Gin George, HCA 2576/2005 (unreported, 5 May 2011), §41.

39. In addition, neither have I find the promise by the applicant, if genuinely made, is supported by consideration from the respondent. Even before 25 March 2015, the respondent had made her position clear that she was not going to pay any rent after the fire. It is further submitted by Michelle ST Wong (“Ms Wong”) of Messrs H L Wong & Co, Solicitors, for the applicant that even if there were such a promise, the respondent did not reply on such promise or was induced by the applicant not to pay rent, referring to Luo Xing Juan Angela v the Estate of Hui Shui See (2009) 12 HKCFAR 1 at §55, per Ribeiro, PJ.

40. I rule that the applicant has not made any legally binding promise to the respondent that she would be exempted from paying rent after the fire incident on 18 March 2015.

Liability for Damages

41. The fact that the tenant has covenanted to repair, fair wear and tear excepted, or even damage by fire excepted, does not imply a covenant by the landlord to make such fair wear and tear or damage good[12]. Moreover, even if the applicant has any insurance cover, the fact that he has insured and has received the insurance money does not impose an obligation on him to reinstate the Premises unless the insurance was effected at the expense of the tenant[13].

42. In her Notice of Opposition, the respondent said she and her family was qualified and entitled to get compensation for the losses and damages caused by the fire. In her witness statement dated 24 June 2015, the respondent referred to Clause 9 of the T/A which is recited in §2 of this judgment. However she fails to observe that there is a proviso “that the Landlord’s liability shall not be incurred unless and until written notice of any defect or want of repair has been given by the Tenant to the Landlord and the Landlord shall have failed to take reasonable steps to repair and remedy the same after the lapse of a reasonable time from the date of service of such notice.”

43. This latter proviso accords with the common law that where a landlord covenants to keep premises in repair and the defect occurs in the demised premises themselves, the landlord is in breach of his obligation only when he has information about the existence of the defect such as would put a reasonable landlord on inquiry as to whether works of repair are needed and he has failed to carry out the necessary works with reasonable expedition thereafter: British Telecommunications plc v Sun Life Assurance Society plc [1996] Ch 69, 78-9.

44. The House of Lords’ decision in Murphy v Hurly [1922] 1 AC 369 conveniently collects the authorities which provide the original rationale for the rule. The principal reason for it was that the courts took the view that it would be unreasonable to interpret a landlord's covenant as absolute when the landlord "had no means of ascertaining the condition" of what was demised: Makin v Watkinson (1870) LR 6 Ex 25 (Bramwell B); Tredway v Machin (1904) 91 LT 310 (Collins MR). The assumption in the older cases is that the landlord had no right of entry in order to inspect the demised property. This is clear from the judgment of Bramwell B in Makin, and succinctly expressed by Collins MR in Tredway:

"That rule rests upon the principle that the landlord is not the occupier of the premises, and has no means of knowing what is the condition of the premises unless he is told, because he has no right of access to the demised premises, whereas the occupier has the best means of knowing of any want of repair."

45. This issue was considered further in O'Brien v Robinson [1973] AC 912, a case which concerned the statutory predecessor of section 11 of the Landlord and Tenant Act 1985. Mr and Mrs O'Brien were injured when the bedroom ceiling of their flat fell on them, and they brought an action against their landlord for damages for breach of his implied covenant. Lord Diplock gave the leading speech with which Lords Reid, Simon and Cross agreed. Lord Diplock referred to the common law and concluded that:

"… by 1926 the result of half a century of judicial decision was that it was well established that, at any rate where the state of disrepair was known to the tenant, the landlord's obligation to start carrying out any works of repair did not arise until he had information about the existence of a defect in the premises such as would put a reasonable man upon inquiry as to whether works of repair were needed."

46. He then turned to the question whether this applied to cases where the defect was latent, in the sense that the tenant did not know of it, and held that it did. Two points can be made about Lord Diplock's speech. First, the case before the House was one in which the disrepair was within the demise. Second, Lord Diplock regarded the interpretation of the statutory covenant as being governed by the same considerations as the interpretation of an equivalent covenant at common law. This is how Nourse LJ explained the case in British Telecommunications plc v Sun Life Assurance Society plc, supra, when engaged in the reverse process of applying "the rule in O'Brien v Robinson" to the landlord's repairing covenant in a commercial lease. He also described "the rule in O'Brien v Robinson" as:

"… where a defect occurs in the demised premises themselves, a landlord is in breach of his obligation to keep them in repair only when he has information about the existence of the defect such as would put a reasonable landlord on inquiry as to whether works of repair to it are needed and he has failed to carry out the necessary works with reasonable expedition thereafter" (emphasis added)

47. In the present case, the respondent provides no evidence to prove that the applicant knew of any problem of electric wiring or switch before the fire. More particularly, the respondent, when she was cross-examined by Ms Wong, admitted she had turned on the switch in question a few days before the fire without realising any problem.

48. By reference to the common law principle as elucidated above, I consider the applicant not liable for the cause of the fire or under the T/A.

Frustration of Tenancy

49. There is in general no implied warranty on the part of a landlord that the demised premises are fit for the purpose for which they are taken and therefore, on the letting of an unfurnished dwelling house or flat, there is no implied warranty on the part of the landlord that it is in a reasonably fit state for habitation[14].

50. The respondent has all along referred to the doctrine of frustration and cited Krell v Henry [1900-3] All ER 20, [1903] 2 KB 740 in support. The doctrine of frustration applies when, after a contract has been entered into, some supervening event occurs that makes performance of the contract radically different from what the parties had contemplated when they entered into the contract.

51. In National Carriers Limited v Panalpina (Northern) Limited [1981] AC 675, [1981] 1 All ER 161, however, the House of Lords held that the doctrine of frustration can apply to a lease only in exceptional cases where the event would have to be of a “catastrophic character”. This case concerned a 10 year lease of a warehouse. But for reason unrelated to the warehouse itself, the local authority closed the only road leading to the warehouse for 20 months. This meant that the warehouse was useless to the tenants for that time. The tenants refused to pay rent, purporting to invoke the doctrine of frustration and argued that the closure of the road and its effect on the contemplated use of the property brought their case within the doctrine.

52. The House of Lords appreciated with this interruption the appellant's business would have been severely dislocated. It would have had to move goods from the warehouse before the closure and to acquire alternative accommodation. After reopening the reverse process had to take place but this did not approach the gravity of a frustrating event. Since at least three, and possibly eight, years of the lease would have been left to run after the street would have been reopened, there was no frustration. The lease had simply become more onerous, not impossible, for the tenant. The obligation to pay rent under the lease remained. In contrast, in Krell v Henry, supra, the sole purpose of hiring rooms was to view a coronation procession. This sole purpose was frustrated when the procession was cancelled.

53. In Hong Kong, Yung Kee Company v Cheung So Yin Kee [1983] 1 HKC 386 concerned a claim by a tenant for the return of rental deposit on the ground that the tenancy agreement had come to a premature end by frustration. The alleged frustrating event was the destruction of the premises by a fire which occurred less than three months before the expiry date of a four-year tenancy. Like the present case before me, the tenancy agreement did not contain any provision for the suspension of rental in the event of destruction of the premises by fire or any other causes. Applying National Carriers above, Denis Chang, SC, sitting then as the Deputy High Court Judge held: “justice does not demand that the tenant be relieved both of the obligation to reinstate the premises upon its destruction by fire and of payment of rental in all the circumstances of this case, in particular when the loss of beneficial use under the contract is only, at most, eleven weeks”.

54. More recently, in Li Ching Wing v Xuan Yu Xiong [2004] 1 HKC 353, the plaintiff let a flat in Block E of Amoy Garden to the defendant for domestic purpose for a fixed term of 2 years commencing from 1 August 2002. Then there was the outbreak of SARS in March 2003, and many residents of Amoy Garden, in particular those living in Block E were infected with the disease. Having heard about the news, the defendant moved out of the flat on 29 March 2003 and stayed with his family in Guangzhou until 10 April 2003. On 31 March 2003, the Department of Health issued an order to isolate Block E for 10 days. On the following day, the residents of Block E were evacuated to various places of safety. After the expiry of the Isolation Order, the residents of Block E were allowed to return to their flats. HH Judge Lok held that this period was insignificant in the context of a two year lease.

55. Returning to the present case, by reference to the fire incident reports cited in §§5-8 above, it appears that only the living room was seriously damaged. While the photographs produced by the applicant provide no clearer picture, the photographs produced by the respondent[15] assist no further. The respondent admits that the bedrooms and the dining room were just smudged and stained save that the two air conditioners inside the bedrooms “melted” because of the high temperature.

56. Based on the authorities discussed above, I hold that the T/A is not frustrated and the respondent is liable under the T/A to continue to observe her obligation to pay rent even after the fire. Even as at today, the T/A has more than 2 years unexpired.

57. I am also surprised that when on the one hand, the respondent is arguing the T/A had been frustrated which means both parties to the T/A are discharged from further obligation, on the other hand, the respondent is still keeping the Premises without delivering vacant possession to the applicant. These two stances of the respondent are inconsistent and self-contradictory. Therefore even if the T/A were frustrated as argued by the respondent, by holding over the Premises, the respondent is liable for mesne profit from the date of frustration.

Conclusion

58. Having considered all the above, I find the respondent is liable to pay rent under the T/A in spite of the fire incident, failing which the applicant is entitled to vacant possession of the Premises subject to the relief under section 21F of the High Court Ordinance.

Costs

59. As costs follow the event, I also order the respondent do pay the applicant's costs of this application.  In this regard, Ms Wong has produced a calculation detailing her claim in the sum of $81,563. In light of the length of the proceedings and the complexity of this case, I consider the claimed amount reasonable save for a number of hours claimed for the service of Henry H L Wong which appears excessive and to be duplicating that of Ms Wong. Deducting 3 hours of service of Henry H L Wong from the calculation, therefore, I order the costs of this application be to the applicant in the sum of $73,763.

Order

60. It is ordered that:   

(1) Subject to paragraph (4) below, the respondent do deliver vacant possession of the Premises known as “Flat H on 52/F of Tower 11, Carmel Cove, No 1 Kin Tung Road, Caribbean Coast, Tung Chung, Lantau Island, New Territories” to the applicant;

(2) The respondent do pay the applicant arrears of rent/mesne profits at the rate of $22,800 per month from the 15 March 2015 until delivery up of vacant possession;

(3) The respondent do pay the applicant's costs of this application in the sum of $73,763;  

(4) If the respondent should on or before 6 August 2015 (“Relief Expiration Date”) pay to the applicant all the arrears of rent/mesne profits as stated in paragraph (2) above (including all arrears of rent/mesne profits due on or before the date of payment) together with the costs referred to in paragraph (3) above, the respondent be relieved from the forfeiture incurred herein, and the lease of the Premises be reinstated.

 

 

[1]It is not disputed that the Premises are about 10 years old.

[2] Although the respondent called this company “Chartered Surveyor” which suggests this is a RICS regulated firm, there appears no evidence that can support this and the respondent conceded this is not a RICS regulated company at trial.

[3] Save for the telephone conversation with the respondent on 25 March 2015, the applicant gave evidence that he only called on the respondent’s husband on 3 May 2015 just before his plane took off to Canada chasing for the rental in arrears.

[4] As the respondent pointed out during the cross-examination of Ruby, the number of days which the rent became overdue was incorrect because rent would only be due on the 15^th of each month. She got annoyed and therefore would ignore Ruby’s calls.

[5] Both Ruby and Mr Wong were called to give evidence.

[6] This message was transmitted by Mr Wong to the applicant after one hour via WhatsApp.

[7] At trial the respondent corrected it was 25 March 2015.

[8] At trial, the respondent said persistingly the period of rent exemption proposed by the applicant was between 1to 3 months.

[9] One air-conditioner was burned off and two others in the bedrooms were damaged by heat.

[10] At trial on 2 July 2015, the respondent said the telephone call took place on 10 April 2015 instead.

[11] Exhibit R1.

[12] Weigall v Waters (1795) 6 Term Rep 488.

[13] Halsbury’s Laws of Hong Kong, Volume 36, Landlord and Tenant, 2^nd Edition, 2014, [235.298].

[14] Halsbury’s Laws of Hong Kong, Volume 36, Landlord and Tenant, 2^nd  Edition, 2014, [235.300].

[15] Exhibit R2.