WONG SAU LIN v. IP THEODORE JAMES

LDPD 738/2013

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO. LDPD 738 OF 2013

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D E C I S I O N

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1.  This is an application taken out by the Respondent asking to set aside my Order dated 28 June 2013 (“the Order”). He also asks for stay of execution.

2.  When hearing an application of setting aside an Order made after trial and hearing of evidence, the court would consider the following:

1.  Reasons for absence;

2.  Whether there is real prospect of success if the matter is to be tried again; and

3.  Whether injustice would be brought about by setting aside the Decision.

Reason for absence

3. The Respondent was absent on the date of trial.  He said he was ill on that day.  He produced a medical certificate to support the same at this application.  A doctor had granted him sick leave for 2 days from 25 June to 26 June inclusive. What I could say on this point is that I could not make a finding that he was deliberately avoiding the hearing.

Real Prospect of Success

4.  My Decision comprises of order on repossession of vacant possession; damages on arrears of rent / mense profit and costs.

Repossession of vacant possession

5.  According to the Respondent, there is no dispute that since expiry of 2^nd Agreement on 9 February 2013, he had not paid any rent / mense profit; he admitted that there was no new lease concluded, that there was no agreement on temporary agreement.  In the circumstances, he is a trespasser not paying any mense profit and I do not see how he could resist the claim for repossession of vacant possession.

Damages on arrears of rent and mense profit

6.  In his Notice of Objection he said he had paid all the rent as demanded under the 2^nd Agreement.  There might have been delay but that was caused by confusion rendered by the Applicant.  At the trial I have found the record of payment clear to show the arrears and in my judgment the Respondent would not have real prospect to succeed even if the issue on amount of arrears was to be tried again.  His own evidence was fragmented and incomplete.

7.  Another ground for his opposition to the claim for mense profit is on its assessment.  This can be dealt with quickly because the Applicant is prepared to concede that the mense profit be assessed at the rate of the rent under the 2^nd Tenancy Agreement, which is $7,500 per month.  I understand from Mr Chang that this is just to save time and costs.

Costs of Repair

8.  The Respondent also said that he had spent money on the suit premises including repairing the hot water system together with the wiring and also the plumbing in the kitchen.  It is the case of the Applicant that the interior repair should be the tenant’s responsibility.

9.  In my judgment, it is trite that even if the landlord has wrongfully failed to repair the premises, it is not a reason for the tenant to say he does not have to pay rent.  Chu J as she then was stated clearly in Charmway Development Ltd v. Long China Engineering Ltd. [2001] 3 HKC 515that:

“22. As previously observed, the covenant to pay rent is independent of the other covenants and obligations under the Tenancy Agreement. The Tenancy Agreement also does not permit any set-off on the rent. Secondly, the present claim of the plaintiff is for unliquidated damages. There is therefore no right to a legal set-off.

                        23.    As to equitable set-off, the relevant principles are set out in para. 14/4/14 of Hong Kong Civil Procedure 2001.  Generally speaking, where the claim and counterclaim are sufficiently closely connected so that it would be manifestly unjust to enforce one without regard to the other, a right to an equitable set-off may arise : Esso Petroleum Co. Ltd v. Milton [1997] 1 WLR 938, at 950D and Dole Dried Fruit & Nut Company v. Trustin Kerwood Ltd [1990] 2 Lloyd’s Rep.309, 311.”

10.  What the Respondent had raised about cost of repair paid by him could amount to an independent claim which is however beyond the jurisdiction of this court.

Conclusion

11.  After the parties had made their submissions and upon hearing from the Respondent that he would be delivering the keys and thus the suit premises to the Applicant on 15 July (4 days), I asked parties whether they would like to have a discussion between themselves.  After a short break, parties asked that the hearing be adjourned to 17 July to see how the case would develop.  It was said that if things were to be smooth, the hearing might not have to proceed further.

12.  Unfortunately, the Respondent had failed to deliver keys on 15 July and also failed to attend court on 17 July.  He told Mr Chang that he could not attend court because he was going to his firm to deliver the keys.  Since I have already heard submissions from the parties, I would give my decision here instead of just dismissing the application for the absence of the Respondent.  I think that would dispose of the application of the Respondent in a fair manner.

13.  For reasons set out in the above, I exercise my discretion to set aside the award on mense profit.  Since the Applicant had conceded to adopt the rent under the 2^nd Tenancy Agreement which was agreed by the parties as the basis for assessment which is a proper way of assessing mense profit in normal circumstances, it is therefore not necessary to have this particular issue to be tried again.  I would accordingly vary the relevant part, namely paragraph 2, in the Order.

Order

14.  This is my order:

1.  Application for setting aside my order dated 28 June 2013 is dismissed except for paragraph 2 therein and it now be varied to read:

“the Respondent do pay the Applicant arrears of rent / mesne profits as follows:

(1)Balance of rent from 10 December 2012 to 9    February 2013 in the sum of $10,000;

(2)Arrears of mesne profits at the rate of $7,500 per month from 10 February 2013 to 9 May 2013 in the sum of $22,500;

(3)Arrears of mesne profits at the rate of $7,500 per month from 10 May 2013 until delivery up of vacant possession; and…”

2.  Other terms in the Order do stand; and

Costs

15.  The Respondent succeeded in 1 item on concession made by the Applicant, I order that he should bear half the costs of the present application and I assess them summarily at $3,000.  It is also because the Respondent refused to attend court on the return date and I could have dismissed his application for that reason with costs.  It is at the request of the Applicant that a decision be made for completeness and therefore this decision is made with reasons set out in the above.  I do not think it is fair if he is not asked to bear any costs in all the circumstances.  Further I decide not to disturb the costs order in the Order because there is no admission that the assessment of mense profit was wrong and that all other terms of the Order remain effective.