LEUNG PO CHU v. CARTLEDGE, ERICA GABRIEL

LDPD 2452/2010

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Application No. LDPD 2452/2010

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JUDGMENT

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Background

1.  This is an application made by the Applicant against the Respondent for recovery of possession of the suit premises, namely G/F, No. 8B, Ham Tin San Tsuen, DD 316 LOT 3064 with DD 316 LOT 601 SH, Pui O, Lantau Island, New Territories, Hong Kong (“the Premises”).

2.  The Applicant is the landlord and the Respondent is the tenant of the Premises. They entered into a tenancy agreement on 15 July 2008 for a term of 12 months from 15 July 2008 to 14 July 2009 and there was an option year term from 15 July 2009 to 14 July 2010.  The rent was $6,800 per month.  The parties then agreed to renew the tenancy agreement according to the option year term but the rent was reduced to $6,600 per month with effect from 1 August 2009.

3.  Towards the end of the option year term, on 20 June 2010, the Applicant inspected the Premises and discovered that there was a swimming pool built in the garden of the Premises.  The dimensions of the swimming pool were about 10 feet long, 7 feet wide and 4 feet deep.  The Applicant was shocked by this illegal addition to the garden and gave notice to the Respondent to clear the illegal addition from the Premises and to reinstate the garden back to its original state.  To facilitate the removal work, the Applicant extended the option year term to 14 August 2010.    However, the Respondent did not return the Premises to the Applicant after 14 August 2010 and has failed to pay rent since 1 August 2010. Thus, on 2 October 2010, the Applicant made the present application against the Respondent to recover possession of the Premises as well as the arrears of rent and mesne profits.

4.  The parties have no dispute that the issues in this case are as follows:-

(1) Has the Respondent already returned possession of the Premises to the Applicant?

 (2) If so, when was the date of return of possession?

(3) Does the Respondent still owe rent and/or mesne profits to the Applicant?

Has the Respondent returned possession?

5.  In respect of the first issue, there is no dispute that the Respondent has returned 3 keys for the sliding door of the Premises to the Applicant’s estate agent on 4 October 2010, which would enable the Applicant to gain access to the Premises thorough the garden.  There are, however, several matters in dispute. The main dispute is concerning the partition panel installed at the lobby of the building outside the main door to the Premises, separating the Premises from the staircase leading to the First and Second Floor of the building.  The Applicant alleges that there should not be a partition panel outside the main door of the Premises, and during the inspection on 20 June 2010, there was no such partition panel installed there.  The Respondent only installed it afterward and as a result of which, the Applicant has not been able to make use of the main door to go in and out of the Premises, and to make use of the space at the lobby outside the main door.

6.  The Respondent, on the other hand, alleges that there was such a partition panel at the time when the Applicant first rented the Premises to her.  She removed it because she was also the tenant of the First and Second Floors of the building and wanted to have access to the First and Second Floors from the Premises.  After the removal, the partition panel was stored at the roof of the building.  As she was required to return possession to the Applicant, and in order to put the Premises back to the same condition they were in when she first occupied the Premises, she caused the same partition panel to be reinstalled at the same place at the end of September 2010.

7.  The Respondent also gave evidence that the partition panel was put in place 7 or 8 years ago by a Mr. Kenny of Proper Trip, the estate agent, who struck a deal between the landlords of the Premises and the then owners of the First and Second Floors, whereby the landlords would gain a further few square feet of floor space and a large under-stairs cupboard in exchange for giving up rights to use the side entrance door.  No doubt, this evidence is just hearsay as the Respondent would not have personal knowledge of the deal before she moved into the building.  However, the Respondent produced an email from the previous landlord of the First and Second Floors, a person called Tony, to the present owner of the First and Second Floors, Mr. Hugh Meikle, confirming the deal.  Mr. Meikle was also called by the Respondent as her witness and he gave evidence that the partition panel was already there when he purchased the First and Second Floors in 2007, and that the partition panel was still there when the Respondent commenced her tenancy on 15 July 2008.  Mr. Meikle also gave evidence that the partition panel is now in the same place and as it was when the Respondent first occupied the First and Second Floors in July 2008.  The Respondent also produced a photograph taken by the landlords of the First and Second Floors in 2008 when there was severe flood damage, which shows clearly that there was such a partition panel at the lobby next to the staircase in question.  The photograph was dated 29 July 2008, and it supports the Respondent’s contention that there was such a partition panel at the commencement of the tenancy agreement.

8.  I found that the evidence produced by the Respondent are all credible evidence and they support the Respondent’s contention that she was merely reinstating the partition panel to the original state.  On the other hand, the Applicant has no concrete evidence to rebut the Respondent’s contention.  She could only rely on her memory that many years ago when she visited the Premises with some friends and relatives, someone could use the side door at the lobby of the building to go out of the Premises, and hence there should be no partition separating the main door of the Premises from the lobby.  She also submits that the present partition panel could not be the same one that was installed 7 or 8 years ago, especially after the flooding in 2008 and storage for 2 years. First of all, I do not think that the Applicant’s memory is reliable.  What she saw was just someone coming out from the side door.  It could be that the person had entered the lobby through the side door and came out from the same door.  So the partition panel could still be there.  Alternatively, the time when she visited the place could be just before the partition panel was installed then.  As to the condition of the partition panel, it all depends on how it was used and stored for these years.  There is in fact not much evidence on the condition of the partition panel.  The Applicant’s submission is merely speculative.  In any event, I do not believe that the Respondent would incur her money to install a new partition panel, and even if she did so, this is just to fulfill her obligation to reinstate the Premises to its original state.

9.  Thus, I do not find that the reinstallation of the partition panel is an act that would prevent the Applicant from obtaining vacant possession of the Premises. I accept the Respondent’s evidence that the normal entrance to the Premises when, and even before, the Respondent first rented the place was through the sliding door at the garden.  Thus, by using the keys of the sliding door, the Applicant could have access to and obtained possession of the Premises shortly after 4 October 2010.

10.  The second matter in dispute is about the latch and key to the lock at the main door of the Premises.  It is not disputed that the latch was installed by the Respondent and it was removed subsequently.  The Applicant gave evidence that the latch was still there on 23 October 2010 because she could not open the main door from inside, and she produced some photographs to show that there was such a latch.  Nevertheless, the Applicant agreed that it was subsequently removed because she could open the main door on 27 November 2010.  The Applicant also alleges that the Respondent should have the key to the main door but it was not returned.  The Respondent contends that she was never given the key to the main door.

11.  As I have found that there should be a partition panel at the beginning of the tenancy, the space between the main door and the partition panel has become a kind of internal area of the Premises.  This space would only form a small portion of the Premises and should not be a reason for the Applicant to refuse accepting possession of the Premises.  In Toho Ltd v. Ng Sik Yu [2004] 4 HKC, applying Cumberland Consolidated Holdings Ltd v. Ireland [1946] 1 KB 264, the Court of Appeal held that vacant possession could not be given if there was an impediment which substantially prevented or interfered with the enjoyment of the right of possession of a substantial part of a property.  Cheung JA explained that “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”.  Thus, even assuming that the Respondent did prevent the Applicant from obtaining access to the space behind the main door by installing the latch and failing to return the key of the main door, there was no impediment affecting a substantial part of the property as far as the space behind the main door is concerned.  The part concerning the swimming pool is different and I will discuss it later.

12.  In any event, the lack of the key of the main door would not prevent the Applicant from opening the main door from the inside of the Premises, and I do not think that it would be difficult to remove the latch from inside.  As can be seen from the photograph produced, there is a big gap between the edge of the main door and the door frame and the latch is clearly visible from the inside of the Premises.  It seems to me that the latch could be removed easily with some simple tools or the help of a locksmith.  Thus, I do not consider the latch or the lack of the key would amount to substantial interference with the enjoyment of the Premises.

13.  Moreover, I accept the Respondent’s evidence that she was not given the key of the main door when she took possession of the Premises in July 2008.  The Applicant in fact produced a statement dated 14 November 2010 and made by the estate agent, Mr. Chan Chiu Man, who confirms that on 14 July 2008, the Respondent was only given 3 keys for the sliding door and 1 key for each of the rooms.  No key for the main door was mentioned.  Although Mr. Chan was not called as a witness, and his statement is hearsay evidence, this statement was produced by the Applicant herself and there is nothing to rebut the Respondent’s contention. There is a photograph showing that there was a key inserted into the keyhole of the main door.  However, there is no evidence on how this key came about or who possessed it.  The mere fact that there was a key in the keyhole cannot conclusively prove that the key was the right key for the main door or the Respondent was in possession of it.  It could also be inserted or possessed by the Applicant or the agent.  Thus, I do not accept that the Applicant has established that the Respondent has failed to return the key of the main door.

14.  The third matter is about the pots of plants and miscellaneous items placed on the piece of land adjacent to the building in question.  It is not disputed that this piece of land does not belong to the Applicant and was not mentioned as part of the Premises in the tenancy agreement.  It is in fact used by all the owners of the building in question for access to the building under a short-term tenancy granted by the government.  There is no evidence that the Respondent obtained the use of this land through the Applicant under the tenancy agreement or any collateral agreement with her.  The Respondent is also a tenant of the First and Second Floors of the building, and she could have obtained the use of this land through the owner of the First and Second Floors.  Thus, the Applicant cannot say that the Respondent has failed to deliver vacant possession of the Premises to her because of the pots of plants or miscellaneous items placed on this government land.

15.  The fourth matter is concerning the restoration of the garden.  In this regard, the Applicant alleges that the boundary wall of the garden was damaged by the Respondent and still has not been restored to its full length.  This has in fact nothing to do with vacant possession.  The damage or shortening of the boundary wall would not prevent the Applicant from using the garden as such. This may well lead to a claim for damages by the Applicant, but the Applicant cannot rely on this as a ground to say that vacant possession has not been obtained.  The Applicant also alleges that the gate at the entrance of the passageway leading to the building in question has not been reinstated.  Again, this gate was not installed at the Applicant’s land, but on a piece of land used by all the owners of the building for access purpose.  It is clear that the failure to reinstate the gate, even assuming this is the Respondent’s responsibility, cannot amount to a ground for not accepting possession from the Respondent.  In fact, I do not see how the Respondent should be held liable for the gate when the evidence shows that it was damaged by a wild buffalo.

16.  The garden had originally three barbecue stoves, but the Respondent removed them to build a swimming pool in the garden.  The Respondent has only restored two of them after the removal of the swimming pool.  However, the lack of one stove does not prevent the Applicant from using the garden and hence it would not be a ground to refuse acceptance of vacant possession.  It may well be a ground for the Applicant to claim for damages, but certainly it is not related to vacant possession.  Nevertheless, the building of a swimming pool did cause a substantial part of the garden to be unusable for its original purpose as a garden.  The swimming pool in fact occupied a substantial part of the garden. I find that such an impediment did amount to a substantial prevention or interference with the enjoyment of the right of possession of a substantial part of the Premises.  From the evidence, it is clear that the Respondent did not finish the removal of the swimming pool, but only 50% of it, when the keys were handed to the agent on 4 October 2010.   The restoration of the two stoves after the removal of the swimming pool was only completed on 8 October 2010.  Thus, there could not be return of vacant possession of the Premises before 8 October 2010.

17.  As I find that none of the matters raised, except the issue relating to the swimming pool, amounts to a ground for the Applicant to refuse acceptance of vacant possession of the Premises, I am of the view that the Respondent has returned possession of the Premises to the Applicant.

When was the date of return of possession?

18.  By reasons aforesaid, the date of giving back the key to the agent cannot be treated as the date of return of vacant possession to the Applicant, as the Premises were still occupied by the swimming pool built by the Respondent.  The date of return of vacant possession must be the date when the swimming pool was completely removed, i.e. on 8 October 2010.  In fact on that day, the Respondent also signed a Take Over Record with the agent on behalf of the Applicant, and the readings for Electricity and Fresh Water meters were copied down.  It shows that the taking over of vacant possession of the Premises was completed on that day.

19.  Thus, I find that the date of return of vacant possession of the Premises was on 8 October 2010.

Does the Respondent still owe rent/mesne profits to the Applicant?

20.  It is admitted by the Respondent that she did not pay any rent from 1 August 2010 onward.  Since I find that the date of return of vacant possession is on 8 October 2010, the Respondent is liable to pay back the rent/mesne profits from 1 August 2010 until 8 October 2010.  In fact, the parties have no dispute that the tenancy agreement was terminated on 14 August 2010.  The Respondent merely contends that she was away at that time and could not made arrangement for the delivery of possession.  I do not accept that the Respondent has any excuse not to deliver possession back to the Applicant on 14 August 2010.  Even when she was away, she could have arranged a representative or an agent to deliver possession on her behalf.  Thus, there were arrears of rent from 1 August 2010 to 14 August 2010, and mesne profits payable from 15 August 2010 to 8 October 2010. 

21.  Since the parties agree that the mesne profits can be calculated at the rate of the rent, i.e. $6,600 per month, the total amount owed by the Respondent to Applicant for arrears of rent and mesne profits is $14,903 [$6,600 x (2 + 8/31)].

22.  The Respondent contends that she has a deposit of $13,600 with the Applicant, and that she has overpaid water charges because of water leakage at the underground water pipe.  However, I do not accept that the Respondent could use the deposit to set off the amount due at this stage.  The Applicant has other claims for damages, including those mentioned above.  The deposit may well be used to set off the other damages suffered by the Applicant.  The claim for overpayment of water charges has not been established by the Respondent either, as there is no concrete evidence that the water leakage has caused the charges.  It is merely the Respondent’s speculation.  In any event, even if the Respondent can establish such a claim, she has to claim it separately against the Applicant in another court.  The Lands Tribunal has no jurisdiction to determine such a claim, and it is totally unrelated to the Applicant’s claim for arrears of rent/mesne profits.  Thus, I find that there cannot be any setoff as alleged by the Respondent.

23.  The amount owed by the Respondent to the Applicant is therefore in the sum of $14,903.

Conclusion

24.  By reasons of the matters aforesaid, I find that the Applicant succeeds in part of her claims, and the arrears of rent/mesne profits due to her is in the total sum of $14,903 only, which is not as high as what she has claimed for.  There is also no need to give any possession order, as I find that the Respondent has already given back vacant possession to the Applicant on 8 October 2010.

25.  As both parties have won and lost some of the contended issues, I think it is fair that the parties should bear their own costs, and hence there should be an order nisi for no order as to costs.

26.  Thus, I order as follows:-

(1) There be no order for recovery of possession of the Premises.

(2) The Respondent do pay the Applicant the sum of $14,903, being the arrears of rent/ mesne profits from 1 August 2010 to 8 October 2010.

(3) Costs order nisi: there be no order as to costs.

The Applicant, represented by Ms. LEUNG Po Lin

Mr. Enzo CHOW instructed by M/S Paynes for the Respondent