LAI KWONG CHING v. INTELLIGENT HOUSE LTD

LDCS 11006 /2006

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

LAND COMPULSORY SALE APPLICATION NO. 11006 OF 2006

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DECISION

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Introduction

1.  Intelligent House Ltd has by way of LDCS 11000/2006 applied for a compulsory sale order of, inter alia, Kam Kwok Building under the Lands (Compulsory Sale for Redevelopment) Ordinance (Cap 545) (“the Ordinance”).

2.  In LDCS 11006/2006, Mr Lai Kwong Ching as tenant of various units (including the present subject matter units) claims against Intelligent House for compensation under the Ordinance.

3.  Before me now are the respective applications of Madam Suraphat, Mr Rai and Mr Thapa to be joined as applicants in Mr Lai’s application under LDCS 11006/2006.  It is their respective case that they have respectively been the sub-tenants of Mr Lai of various units in Kam Kwok Building.  Those units are respectively Room 7, Unit 11, 5/F, Room 6, Unit 11, 5/F, and Unit 12A, 12/F of Kam Kwok Building.

4.  Intelligent House opposes the applications for joinder on the basis that the applicants no longer was any locus to claim, since Intelligent House has validly terminated the head tenancy with Mr Lai by way of a transitional termination notice dated 18 October 2006. The notices were issued and served in accordance with section 5(2) of the Landlord and Tenant (Consolidation)(Amendment) Ordinance 2004 (“LTAO”).  As such, it is Intelligent House’s case that the sub-tenancies relied on by these applicants shall similarly be terminated and they do not have any locus to bring any compensation claim against Intelligent House. They therefore should not be allowed to be joined.

Discussion

5.  Under section 5(2) of the LTAO, a landlord can lawfully terminate any tenancy created before 9 July 2004, the commencement date of that ordinance, by way of a transitional termination notice issued and served not less than 12 months before the termination of the tenancy.  Such notice should be served on the tenant in the ways in accordance with section 119Y(1) of the Landlord and Tenant (Consolidation) Ordinance (Cap 7).

6.  I am satisfied with the evidence before me that such transitional notice has been properly served on Mr Lai between 18 and 20 October 2006 by Intelligent House in relation to the subject matter units.  The expiry date of the notice is 31 October 2007.

7.  As such, I am satisfied that the relevant head tenancy between Mr Lai and Intelligent House was lawfully and validly terminated on 31 October 2007.  Mr Lai also accepts that his tenancy with Intelligent House was terminated on that date by reason of the notice.

8.  What about the subtenancies then?  Section 6(5) of LTAO, provides as follows

“	(5)	Where a transitional termination notice is served on a tenant, if:
		(a)	the notice is both in Chinese and English; and
		(b)	the notice is posted on 3 successive dates upon the main door or entrance of the premises affected,
		the notice shall take effect terminating also any sub-tenancies created out of the tenancy to which it relates.”

9.  I am also satisfied with the evidence before me (by way of the 2^nd and 3^rd Affirmation of Lui Wing Yan dated 14 January 2008) that the requirements under section 6(5)(a) and (b) of LTAO are satisfied in relation to Intelligent House’s transitional termination notice.  In the circumstances, the respective subtenancies between Madam Suraphat, Mr Rai and Madam Thapa on the one hand, and Mr Lai on the other hand, which were created out of Mr Lai’s head tenancy with Intelligent House, must also come to an end as a matter of law on 31 October 2007.

10.  Since under sections 4(6) and 8(1)(b) of the Ordinance, a tenant (or for the present purpose a subtenant) is only entitled to compensation if his tenancy is terminated by reason of the making of the order for sale, Mr Shum for Intelligent House submits that Madam Suraphat, Mr Rai and Mr Thapa therefore have clearly no entitlement to claim any compensation from Intelligent House under the Ordinance as their subtenancies were terminated not by reason of any order for sale.  As such, they have not shown any locus to be joined in these applications seeking compensation from Intelligent House.

11.  I accept Mr Shum’s submissions.

12.  In the premises, I refuse the joinder applications of Madam Suraphat, Mr Rai and Mr Thapa .

Other matters

13.  At the end of the hearing, Mr Lai confirms with the Court and makes an application to withdraw the present proceedings (i.e., LDCS 11006/2006).   Mr Shum for Intelligent House does not oppose the same, and seeks no costs against Mr Lai in relation to the action or his application.

14.  In the premises, I also allow Mr Lai’s application.

Orders

15.  For the reasons given above, I make the following orders:

(1)	The applications respectively made by Madam Suraphat, Mr Rai and Mr Thapa to be joined as an applicant in LDCS 11006/2006 be dismissed, with costs to Intelligent House to be taxed if not agreed.
(2)	Leave to Mr Lai to withdraw the application under LDCS 11006/2006, with no order as to costs as to the action and the leave application.