Plenty Rich Ltd. v. Deckwell Zone Ltd.

LDPE No. 261 OF 2002

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO. LDPE 261 OF 2002

_______________

_______________

________________

J U D G M E N T

_________________

1. The Applicant is the landlord of the premises known as Ground Floor of No. 3 Lan Fong Road, Hong Kong, whereas the Respondent is the tenant of the premises. The duration of the tenancy is 3 years, commencing from 29.6.2000 and expiring on 28.6.2003; the monthly rental payable on the first day of each calendar month is $95,000. The Applicant's application is for recovery of possession of the premises on the ground of non-payment of rent.

2. It is the evidence of the Applicant that since December 2001 the Respondent only paid an amount of $50,000 for the rental of December 2001, leaving a balance of $45,000 rental unpaid, and that it has not paid any rental since January 2002.

3. In its Notice of Opposition, the Respondent stated that it had no option but to withhold the rent from 2001 for the following reasons: -

"1. The premises was not handed over to Deckwell Zone Ltd. in a tenantable conditions as such the company was forced to spend thousands of dollars to bring it to an acceptable condition. This caused many delays to get the required restaurant licences, resulting in accumulated losses of over seven hundred thousand dollars ($700,000). The landlord refused to reimburse these expenses.

2. The building sewage pipes which run through the tenants premises is defective and disrupts the smooth running of the business. This also has caused the tenant many days of work stopage and more losses.

3. Illegal structure in the premises which was not revealed at the time of signing the tenancy, also had to be demolished at the tenants expenses, causing further delays in obtaining the required licences and adding to the losses already suffered.

4. The rental charged of HK$95,000 per month was agreed upon the basis that this property was located in a high traffic area. However, the traffic has been disappointing low. This misrepresentation by the landlord and their property agent has also caused the tenant estimated losses of over HK$3000 per day.

5. The electric supply to the premises was inadequate and making the premises unsuitable for restaurant business. The cost of rectifying of this problem was over $30,000. Moreover the delay also caused more losses.

6. Repeated requests to the landlord to resolve all the above issues were ignored and denied. As such the tenant Deckwell Zone Limited had no option but to withheld the rent until the above issues could be resolved in a fair and equitable manner"

4. Mr. Ranjan, a director of the Respondent, said that the Respondent's restaurant business suffered badly. When the Respondent took over the premises, the place was not in a tenantable condition. The Respondent had to rectify the defects of the premises at considerable costs. There were also illegal structures in front of the premises. The Respondent had to remove them.

5. Clause 1 of the tenancy agreement of the premises expressly provides that the Respondent is to pay the rent and other charges or outgoings in advance on the first day of each and every calendar month without any deduction or right to set off or right to withhold the rent and other charges or outgoings. Therefore there is simply no legal basis for the Respondent to withhold the payment of rent, and its defence must fail. Accordingly I enter judgment for the Applicant.

6. I impose the following orders: -

1. The Respondent shall deliver vacant possession of the suit premises to the Applicant.

2. The Respondent shall pay the Applicant arrears of rent from 29th November 2001 to 28th December 2001 in the sum of $45,000 and arrears of rent from 29th December 2001 to 28th March 2002 at the rate of $95,000 per month, totalling $330,000.-.

3. The Respondent shall pay the Applicant mesne profits from 29th March 2002 to the date of delivery of possession at the rate of $95,000 per month.

4. Upon the Respondent paying to the Applicant the sums in paragraph 2 hereinbefore mentioned within 4 weeks from the date hereof, the Respondent shall be relieved from forfeiture under Section 21F of High Court Ordinance, Cap 4 and it shall hold the premises according to the lease in question without any new lease and that all further proceedings in this Application be stayed.

5. In default of the Respondent paying to the Applicant the sums in paragraph 2 hereinbefore mentioned within 4 weeks from the date hereof, the orders in paragraphs 1 to 3 herein may be enforced forthwith and the Respondent shall be barred from all relief.

6. Payment out to the Applicant upon payment in by the Respondent, if any.

6. Costs

I make an order nisi for costs (to be taxed if not agreed) in favour of the Applicant, to be made absolute in 14 days' time.