LEE PAK CHEUNG v. ANDRES HELEN E.

LDPD2951/2013

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO LDPD 2951 OF 2013

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JUDGMENT

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1. This is an application to the Lands Tribunal for recovery of possession of the suit premises and rent and order for mesne profits and costs.

Background

2. The applicant is the owner of the premises known as No 14 Shan Ting Tsuen, Peng Chau, Hong Kong (“the Suit Premises”) and the respondent is the tenant.

3. By a tenancy agreement dated 1 April 2010 (“the Tenancy Agreement”), the Suit Premises was leased to the respondent for the period from 1 June 2010 to 31 May 2013 at a rent of $2,800 per month (“the Fixed Term Tenancy”).

4. This is not the first time that the parties are involved in legal proceedings concerning the Suit Premises. Previously in LDPD1354/2013 and LDPD 2125/2013, the applicant applied to recover vacant possession of the Suit Premises from the respondent. Both applications were dismissed after hearingbecause it was found by the Presiding Officer DJ T Chan that the application was a premature litigation (LDPD 1354/2013) and the applicant had failed to serve valid termination notice on the respondent (LDPD 2125/2013).

5. Relying on a fresh notice to quit, the applicant commenced this application on 4 December 2013 to seek vacant possession from the respondent again.  The application is also opposed.

The Applicant’s Case

6. In the Notice of Application, the applicant stated that the tenancy had already been terminated on 30 November 2013 by a Notice to Quit, which was served by registered post on 11 October 2013 and the respondent had also failed to pay rent from 1 September 2013.

The Respondent’s Case

7. The respondent opposed to the application on the grounds that the applicant was not willing to pay the renovation costs in the sum of $98,800 back to the respondent, which was spent by her 3 years ago atcommencement of the Fixed Term Tenancy. The respondent asserted that the condition of the Suit Premises prior to commencement of the Fixed Term Tenancy was unsatisfactory and in such circumstances the applicant had broken the agreement because it should be the responsibility of the landlord to make the premises in good condition before renting it to the tenant. The respondent stated that the evidence for the renovation costs was submitted in the previous case LDPD 1354 of 2013.

8. In addition, the respondent asserted at the hearing that, by an oral agreement between the parties before commencement of the Fixed Term Tenancy, the respondent could stay longer than one contract and therefore there should be an extension upon expiry of the Fixed Term Tenancy.

Issues

9. There are four issues to be considered in this action:

 i. Whether the parties had agreed on an extension of lease prior to commencement of the Fixed Term Tenancy?

 ii. Whether the applicant had promised to pay back the renovation costs as claimed by the respondent?

 iii. Whether there is rent in arrears?

 iv. Whether the Notice to Quit served on 11 October 2013 is effective?

Whether the parties had agreed on an extension of lease prior to commencement of the Fixed Term Tenancy?

10. Although the respondent admitted that the applicant’s promise for lease extension was witnessed by a neighbour who was also the translator between the parties for the negotiation of the tenancy, the respondent also admitted that both parties had not discussed in detail terms and conditions of the lease extension and there was no agreement in writing too.

11. The applicant LEE Pak Cheung appeared atthe hearing and affirmed that there was no such promise to extend the lease after the 3-year termnor had he promised to pay the renovation costs back to the respondent otherwise they should be written down in the Tenancy Agreement. 

12. In fact, Clause 2 of the Tenancy Agreement specified that both parties should execute a new tenancy agreement for lease renewal if any.

“(二) …… (續租則另訂新租約方生效力) ……”

13. In my view, it is clear from the Tenancy Agreement that there is no automatic lease extension.  Even if there was negotiation between the parties about lease extension, terms and conditions of the lease extension had not been agreed at all.  Without a certain extended lease term and consideration be agreed, the proposed lease extension if any would be void for uncertainty and not be enforceable.

14. In Chan Yuk Mui v 葉穎麟[2007] DCCJ 2111, H H Judge Wong held that:

“11. The law on tenancy agreement is clear. The agreement must be certain with the parties to the contract clearly named, the consideration spelt out and the term of the lease clearly specified, otherwise, the tenancy agreement would be void for uncertainty ……”

15. In Prudential Assurance Company Limited v. London Residuary Body and ors [1992] 3 AER 504, the House of Lords held that a grant for an uncertain term or duration did not create a lease since it was beyond the power of a landlord and his tenant to create a term which was uncertain.

Whether the applicant had promised to pay back the renovation costs as claimed by the respondent?

16. Similar to the discussions on lease extension above, the respondent admitted that the promise of the applicant to pay back the renovation costs was witnessed by the neighbour, whilst the applicant denied any promise in this regard.

17. The promise if any to pay back the renovation costs is in my view a debt and where necessary and appropriate should be pursed in another court.

18. It is therefore not necessary for me to make any finding on the facts in this connection because the Lands Tribunal does not have jurisdiction to entertain counterclaim of this nature.  I am of the view whether there was a promise to pay back the renovation costs is irrelevant to my judgment in this application.

Whether there is rent in arrears?

19. Upon clarification at the hearing, the respondent did not dispute that she had not paid rent from 1 September 2013 and the payment on 4 September 2013 is the rent from 1 July 2013 to 31 August 2013 only.  However, the respondent argued that thedeposit of two months’ rent could offset the rental payment and the applicant still owes her the renovation costs too.

20. Despite of the respondent’s arguments, it is clear in Clause 5 of the Tenancy Agreement that the deposit could not be used for rental payment.  The deposit without interest and after deduction of outstanding rent and payments if any will be returned to the tenant upon removal only.

21. It remains undisputed that the respondent has failed to pay rent from 1 September 2013.

Whether the Notice to Quit served on 11 October 2013 is effective?

22. The Fixed Term Tenancy expired on 31 May 2013 and thereafter there was a periodic tenancy between the parties by payment of monthly rent.  Based on the evidence submitted by the applicant, the Notice to Quit served by registered post on 11 October 2013, which specified the lease expiry date of 30 November 2013, had already terminated the monthly tenancy between the parties. In any event, the respondent confirmed at the hearing that she collected the Notice to Quit in the post office on 18 October 2013, which was 43 days prior to the lease expiry date specified in the Notice to Quit.

23. I consider that the Notice of Quit served by registered post on 11 October 2013 was valid and had thereby terminated the monthly tenancy on 30 November 2013.

Conclusion

24. For the above reasons, I allow the application for recovery of possession of the Suit Premises and make the order below.

Order

25. This is my order:

 i. The respondent do deliver vacant possession of the Suit Premises to the applicant;

 ii. The respondent do pay the applicant arrears of rent / mesne profit at the rate of $2,800 per month from 1 September 2013 until delivery up of vacant possession;

 iii. The respondent do pay the applicant the costs of this application, which is summarily assessed at $400;

 iv. Unless otherwise ordered, all sums ordered to be paid under this judgment shall be paid into the Tribunal in cash, by EPS, by cashier orders issued by banks in Hong Kong or by cheques drawn by firms of solicitors in Hong Kong, and such sums received by the Tribunal shall be released to the applicant.