WONG CHI LEUNG v. JUBAULT BERTRAND ANTOINE

LDPE 861/2015

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO LDPE 861 OF 2015

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REASONS FOR JUDGMENT
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1.  This is the 2^nd application of the applicant for recovery of possession of the premises known as Ground Floor, Rear Portion of No 48 Peng Chau Wing On Street, Peng Chau, Hong Kong (the “Suit Premises”).

2.  In the previous case no LDPE 285 of 2015, Deputy Judge Tracy Chan ordered on 1 June 2015 the respondent to (1) deliver vacant possession of the Suit Premises to the applicant but subject to a relief until 22 June 2015; and (2) pay the applicant arrears of rent/mesne profits and costs.  The respondent had then made payment on 22 June 2015 including the rent up to 22 June 2015 and therefore the lease between the parties was reinstated.

3.  In the present proceedings, when the tribunal was discussing on the effectiveness of a Notice to Quit at the call-over hearing on 29 September 2015, the applicant asked for adjournment of the hearing.  I had then ordered the case be fixed for further call-over on 24 November 2015 and the costs of the call-over hearing reserved and had also ordered the respondent to make an interim payment to the tribunal on or before 1 November 2015.  However, the respondent had failed to make the interim payment as ordered.

4.  At the conclusion of the further call-over hearing on 24 November 2015, I made the following orders: -

(1) Subject to paragraph 4 below, the respondent do deliver vacant possession of the Suit Premises to the applicant;

(2) The respondent do pay the applicant arrears of rent/mesne profits at the rate of $4,300 per month from 23 June 2015 until delivery up of vacant possession;

(3) No order as to costs;

(4) If the respondent should on or before 4 December 2015 (“Relief Expiration Date”) pay into the tribunal all the arrears of rent/mesne profits due on or before the date of payment), the respondent be relieved from the forfeiture incurred herein and the lease of the Suit Premises be reinstated; and

(5) 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.

5.  I said I should hand down the reasons for judgment.  I now do so.

The Applicant’s Case

6.  The applicant filed an application to the tribunal on 31 August 2015 against the respondent for recovery of possession of the Suit Premises.  The applicant submitted that there was a tenancy between the applicant as landlord and the respondent as tenant for a fixed term from 23 December 2012 to 22 March 2013, and this tenancy has continued as a monthly tenancy since its lease expiry on 22 March 2013 and the monthly rent was increased to $4,300 on or about 23 August 2013.

7.  In the Notice of Application, the applicant had two grounds for recovery of possession: (1) the respondent had failed to pay rent since 23 June 2015; and (2) a Notice to Quit dated 30 June 2015 had already terminated the monthly tenancy on 1 August 2015.

8.  At the call-over hearing, Mr Yip, counsel for the applicant, submitted that the applicant would rely on lease termination by the Notice to Quit as the only ground in the application.  However, after the adjournment as requested by the applicant, Mr Yip submitted at the further call-over hearing that the applicant would change his position: the applicant would then rely on non-payment of rent only.  Since these two grounds had been pleaded in the application, I accepted the change of the applicant’s position but the costs as wasted if any because of the change would be considered in the judgment for costs.  Anyhow, the applicant finally admitted that the Notice to Quit dated 30 June 2015 was ineffective.

9.  The applicant also submitted that if the applicant succeeds in the application for recovery of possession, the applicant objects to the grant of a 2^nd relief to the respondent.

The Respondent’s Case

10.  The respondent filed a Notice of Opposition on 9 September 2015.  Although the respondent admitted that he had not paid rent since 23 June 2015, he opposed to the application for recovery of possession because of non-payment of rent.  In summary of his submissions in the Notice of Opposition and at the call-over hearing and further call-over hearing, the respondent had the following grounds of opposition: -

(1) The applicant had not disclosed that he is not the real landlord, and while the respondent had already made complaints to the Lands Department and would like to take lease directly from the Government, the applicant had no right to claim for possession of the Suit Premises;

(2) There was water leakage on the roof but the applicant refused to repair;

(3) While the applicant terminated the water and electricity accounts of the Suit Premises in the applicant’s name and said that the respondent could apply for utilities in the respondent’s name, the applicant had actually interfered with the respondent’s applications for utilities and the Suit Premises had no electricity and water supply since then; and

(4) Since the respondent had made payment in accordance with the relief of the judgment dated 1 June 2015 in the previous case no LDPE 285 of 2015, the lease between the parties was reinstated, and therefore the judgment dated 1 June 2015 that ordered the reinstatement of the lease should be enforced.

11.  Close to the end of the further call-over hearing, the respondent asked for further adjournment of the hearing because he (1) asked for mediation; (2) asked for transfer of the proceedings to the High Court; and (3) would seek legal advice.  The respondent asked for a trial too.

12.  The respondent also submitted that if the tribunal grants leave to the applicant to recover possession of the Suit Premises, he asks for grant of a 2^nd relief.

(1) Right of the applicant to claim for possession

13.  Although this issue had already been decided in the previous case no LDPE 285 of 2015, the respondent relied on this ground again in the present proceedings.  In the previous case, the respondent said that the applicant had no title to bring the application because the applicant is not the owner of the premises but a licensee of a Government grant only.  The respondent further said that by subletting the Suit Premises to him, the applicant had contravened the said licence as subletting was prohibited.

14.  On this issue, Deputy Judge Tracy Chan decided that “the Respondent could not complain that the Applicant has no title to the suit premises and was therefore not entitled to receive rent; this is the basic principle of tenancy by estoppel. For the same reason, I do not agree that the Applicant could not take out this Application.  I am of the view that since he was party to the Tenancy Agreement, he could take out this Application.  Whether he had contravened the provisions in the licence is not a relevant factor for me to consider in the present hearing because the lessor is not party in this Application.”

15.   I agree that it is because of the basic principle of tenancy by estoppel, the applicant had the right to file the application.  In any event, since this issue had already been decided by the tribunal, this issue should not be decided again in the present proceedings.

(2) Disrepair including water leakage on the roof

16.  Similar to issue (1) above, this issue had also been decided in the previous case no LDPE 285 of 2015.  It was decided that “the covenant to pay rent is independent of the other covenants or obligations under a lease” and “ The complaint that the Applicant had failed to repair and upkeep, even if proved, cannot assist the Respondent”

(3) No water and electricity supply

17.  The parties had also argued over water and electricity supply in the previous case no LDPE 285 of 2015. After the respondent failed to pay water and electricity charges, the applicant terminated the water and electricity accounts in the applicant’s name.  Nevertheless, the applicant submitted in the previous case that the respondent could always apply for supply of utilities in the respondent’s name.

18.  In the present proceedings, the respondent said when he applied for water and electricity accounts in his name, the applicant interfered with his applications and therefore the Suit Premises had no water and electricity supply since then. The respondent submitted that the applicant had objected to an application for excavation permit by CLP Power Limited to the Lands Department for reconnection of electricity supply to the Suit Premises.

19.  Mr Yip submitted that the applicant had objected to an application for excavation permit only and had not objected to the respondent’s application for electricity supply.  Mr Yip further submitted that the applicant has no obligation to assist in the application for excavation permit and its approval is entirely the decision of the Lands Department, but in any event the respondent has the duty to pay rent.

20.  The respondent said that he had already made complaints to the Lands Department and asked the Lands Department to step in the dispute.  The respondent submitted that he had not paid rent since 23 June 2015 because he would make counter claims.

21.  Although the respondent said that he would make counter claims in another court at the call-over hearing, he had not yet made such application before the further call-over hearing about two months later. While the respondent had not quantified the damages if any because of no water and electricity supply, he admitted that he and his friend have been using the Suit Premises partly and occasionally.  

22.  Since the respondent has an independent covenant to pay rent, I consider that his wish to make counter claims at a later date is not an arguable defense for non-payment of rent.

(4) Enforcement of the Judgment dated 1 June 2015

23.  The respondent was right to point out that after the respondent made payment in accordance with the judgment dated 1 June 2015, the lease between the parties was reinstated. However, the applicant could make a fresh application for recovery of possession if there was default on rent payment again after the reinstatement.

Adjournment of the Hearing

24.  At the call-over hearing, the respondent asked for transfer of the proceedings to the High Court, but he had not yet made any application to the High Court before the further call-over hearing about two months later.  Nevertheless, he asked for transfer of the proceedings to the High Court again at the further call-over hearing.

25.  Since the present proceedings are within the jurisdiction of the tribunal and the respondent could not establish any ground in the interests of justice for such transfer, I consider that the tribunal should decide the subject case.

26.  The respondent also asked for further adjournment close to the end of the further call-over hearing.  While he asked for mediation of the disputes, he said that he would seek legal advice.  The applicant objected to further adjournment of the hearing.

27.  Since the respondent (1) has failed to pay rent since 23 June 2015; (2) has failed to make interim payment as ordered by the tribunal; and (3) has not asked for mediation and has not said that he would seek legal advice until the end of the further call-over hearing, I consider that further adjournment of the hearing is not fair and equitable.  Anyhow, the parties would have chances to discuss their disputes and the respondent could seek legal advice long ago, and the subject case is relatively straight forward which does not involve complicated legal issues.

28.  Further, the respondent submitted that a trial is necessary because he would prove (1) the applicant had harassed him; (2) the applicant had failed to provide basic repair; (3) there was interruption of water and electricity supply; and (4) he had tried to pay utilities charges to the applicant but the applicant refused to receive the then payment only.  The applicant submitted that a trial is not necessary because the respondent had already admitted that he had not paid rent since 23 June 2015.

29.  Since the parties had already submitted and presented their grounds of application and opposition and what would be proved by the respondent do not affect the judgment of the tribunal, I decided to enter judgment directly.

Grant of a 2^nd Relief

30.  Since the respondent admitted that he had not paid rent since 23 June 2015 and had no arguable defense to oppose recovery of possession, I granted leave to the applicant to recover possession of the Suit Premises and rent/mesne profits from 23 June 2015.

31.  A relief was granted in the previous case no LDPE 285 of 2015.  According to section 21F of the High Court Ordinance, a relief against forfeiture by action for non-payment of rent shall not be granted again unless the Court is satisfied that there is good cause why a further relief should be granted in favour of the tenant.

32.  The respondent repeated his grounds of opposition to the application as his grounds for the grant of a 2^nd relief.  The applicant opposed to the grant of a 2^nd relief and said that the respondent did not have a good cause.

33.  It is not disputed that the applicant had objected to an application for excavation permit.  No matter why the Lands Department had not approved the excavation permit for reconnection of electricity supply, the applicant’s solicitor had made representations to the Lands Department that the respondent is not the lawful tenant under the short term tenancy in respect of the Suit Premises and therefore is not a fit and proper person to make application for excavation permit near the Suit Premises. 

34.  Although the respondent may not be the lawful tenant under the short term tenancy, the applicant relied on monthly tenancy in the present proceedings.  In the representations to the Lands Department, the applicant ignored the tenancy relationship between the parties and interfered with the application for excavation permit.  Without the excavation permit, the Suit Premises had no electricity supply, and this was one of the reasons why the respondent had not paid rent.

35.  I am of the view that, when the electricity account in the applicant’s name was terminated, the respondent as a tenant of the Suit Premises had the position to apply for reconnection of electricity supply.  Since the applicant based on incomplete representations which interfered with the application for excavation permit for reconnection of electricity supply, I consider it is fair and equitable to grant the respondent a 2^nd chance to reinstate the lease.  

Costs

36.  Although the applicant succeeded in the application for recovery of possession, the applicant had changed his ground of application in the course of the proceedings that had caused unnecessary costs and wastage, and the applicant had failed to object to the grant of a 2^nd relief too.

37.  All in all, I think it is fair to make a costs order that there be no order as to costs.