HO HON CHIU v. CHONG CHI KI PIERRE

CAMP 229/2020

[2021] HKCA 1652

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 229 OF 2020

(ON AN INTENDED APPEAL FROM LDPD NO. 1228 OF 2020)

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JUDGMENT

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Hon Chu JA (giving the Judgment of the Court):

1.  This is the respondent’s renewed application for leave to appeal against the order of Mr Alex Ng, Member of the Lands Tribunal (“the Judge”) given on 9 October 2020, whereby he entered judgment for the applicant for vacant possession of the suit property (see [4] below) together with arrears of rent and mesne profits, and granted relief against forfeiture to the respondent on payment of the arrears of rent and mesne profits by 19 October 2020.

2.  Despite directions given by the Registrar of Civil Appeals, the applicant has not responded to the application or put in any written statement in opposition.

3.  Having considered the respondent’s documents and written statement, we are of the view that it is appropriate to determine the respondent’s application without a hearing on the basis of written submissions only, pursuant to Order 59, rule 2A(5)(a) of the Rules of the High Court, Cap 4A.  Further, since the respondent’s application, written statement and grounds of appeal are all written in English, we will give our judgment in English.   

The relevant facts                              

4.  The applicant is the owner of a property situated in Suite B, Flat D, 5/F, On Cheung Building in Yau Ma Tei, Kowloon (“the Property”).

5.  By a tenancy agreement dated 24 May 2019 made between the applicant’s predecessor-in-title and the respondent, the Property was let to the respondent for the period from 1 June 2019 to 31 May 2021 at a monthly rent of HK$6,200. 

6.  The applicant purchased the Property together with the tenancy.  It was subsequently agreed between the applicant and the respondent that the monthly rent be reduced to HK$5,000 with effect from 1 June 2020. 

7.  On 11 September 2020, the applicant commenced proceedings in the Lands Tribunal claiming against the respondent for (1) vacant possession of the Property on the ground that the respondent has since 1 September 2020 failed to pay rent; and (2) arrears of rent and mesne profits; and (3) outstanding electricity charges and maintenance expenses.

8.  The respondent did not dispute he has not paid the rent, but disputed liability for the electricity charges and maintenance expenses.  He claimed he was entitled to deduct HK$300 from the rent for September 2020 being his loss and damages caused by the suspension of electricity supply.  He also contended that he would pay the balance of the rent in the coming weeks.  

9.  At the hearing before the Judge on 9 October 2020, the applicant withdrew his claim for electricity charges and maintenance expenses, and further agreed to the deduction of HK$300 from the rent for September 2020.  

10.  The Judge accordingly entered judgment for the applicant and ordered that:

(1)   The respondent shall deliver up vacant possession of the Property;

(2)   The respondent shall pay to the applicant the balance of the arrears of rent in the amount of HK$4,700 for the month of September 2020, and mesne profit at HK$5,000 per month from 1 October 2020 onwards until delivery of vacant possession; and

(3)   There is relief against forfeiture upon the respondent making payment of arrears of rent and mesne profits on or before 19 October 2020.

Post-Judgment events

11.  The respondent’s application for leave to appeal the Judge’s order was dismissed by the Judge at the hearing on 20 November 2020.  On the same day, a writ of possession to recover possession of the Property was issued.  On 11 December 2020, the Judge handed down his Reasons for Decision. 

12.  On 3 December 2020, the respondent issued the present summons to renew his application for leave to appeal in the Court of Appeal.  He had also filed an affidavit enclosing his grounds of appeal and some supporting documents.

13.  On 7 December 2020, the respondent applied to the Lands Tribunal for a stay of execution of the Judge’s order.  The application was dismissed by the Judge on 11 December 2020.  

Proposed grounds of appeal

14.  The respondent’s grounds of appeal, as appeared from the “Grounds of Appeal & Particular (sic)” dated 7 May 2021 and his written statement, can be summarised as follows (respectively “Ground (1)” to “Ground (6)”):

(1)  The courts are empowered by law to make rental adjustments during the COVID-19 pandemic. The Judge should have considered the actual situation in Hong Kong including the impact of the pandemic, and adjusted the rent according to the latest rateable valuation of the premise, and gave relief against forfeiture under section 21F of the High Court Ordinance, Cap. 4[1]. The Tribunal erred in failing to apply the relevant case law and act according to the government’s appeal to landlords to give rent concession[2].

(2)  The applicant could not give or enforce the Notice to Occupier to Quit until half a year after the expiration of the lease[3].

(3)  The applicant did not act in good faith during the lease negotiation, and there was “harassment” from the applicant, which is a serious criminal offence.  The Judge failed to address these issues which were raised by the respondent in [6] and [8] of his Reasons for Decision[4].

(4)  The Judge erred in the reasons he gave in [16] of the Reasons for Decision Judgment for refusing leave to appeal. The authority and materials provided by the respondent are applicable in Hong Kong[5].

(5)  The legal obligation to pay rent for the period between 1 September 2020 and 11 December 2020 was temporarily suspended until a fair judgment is given[6].

(6)  The respondent is entitled to counterclaim for (i) damages occasioned by the wrongful judgment of the Judge; (ii) the expenses incurred for his treatment and operations in hospital; and (iii) the return of his rental deposit.[7] 

Applicable legal principles

15.  Section 11(2) of the Lands Tribunal Ordinance, Cap. 17 provides that a party may appeal to the Court of Appeal against a judgment or order or decision of the Lands Tribunal on the ground that it is erroneous in point of law.

16.  Section 11AA(1) of the said Ordinance further provides that no appeal may be made unless leave to appeal has been granted.  Under section 11AA(6), leave to appeal shall not be granted unless the Court is satisfied that (a) the appeal has a reasonable prospect of success, or (b) there is some other reason in the interests of justice why the appeal should be heard.

Our reasons for decision

17.  For the reasons set out below, we are of the view that the grounds of appeal do not enjoy any reasonable prospect of success.  

18.  On Ground (1), contrary to the respondent’s belief and contention, there is no legislation in Hong Kong empowering the Lands Tribunal or other Courts to make rental adjustment or order rental concession by reason of the pandemic.  It is up to individual landlord and tenant to negotiate and, if they can, to agree on rent reduction or waiver.  The court or the Tribunal has no power to compel a landlord to do so.

19.  As to the argument that the Lands Tribunal should give relief against forfeiture under section 21F of the High Court Ordinance, the Judge did in fact grant the respondent relief against forfeiture on condition that he paid the arrears in rent and mesne profit by the specified date.  The condition imposed by the Judge is in accordance with section 21F(3).  It was due to the respondent’s failure to satisfy the condition that the relief against forfeiture did not take effect.

20.  The respondent also argued that the Judge failed to apply the relevant case law and the government’s public appeal for rent concession. Both before the Judge and in this application, he relied on a paper no. CPC 23/2020 of the Commercial Properties Committee of the Hong Kong Housing Authority (“HKHA’s Paper”) concerning extension of the rent concession period for its non-domestic tenants, and also an Australian decision of Sneakerboy Retail Pty Ltd (t/as Sneakerboy) v Georges Properties Pty Ltd [2020] NSWSC 996.

21.  The HKHA’s Paper has no relevance and cannot guide the Judge in adjudicating the applicant’s claim.  It is because it is a paper of a committee of the Housing Authority recommending the extension of rent concession to the Housing Authority’s non-domestic tenants.  It has no general application to private tenancies.  It is in any event concerning non-domestic tenancies and the respondent’s tenancy is a domestic tenancy.  

22.  As to the Australian case of Sneakerboy, it concerns whether relief against forfeiture should be granted to a tenant following the termination of a retail lease during the COVID-19 pandemic.  It is true that the Australia Supreme Court had commented on the New South Wales (NSW) COVID-19 regime which was backed by a legislation and a code.  The NSW regime was said to have imposed “a set of good faith leasing principles for between landlords and commercial tenants” (at [39]).  The Sneakerboy case, however, has no application here because there is no equivalent COVID-19 regime, or legislations or code in Hong Kong to regulate, for example, the rent of private tenancies during the pandemic. As mentioned above, neither the Lands Tribunal or the court has the power to intervene in negotiations between landlords and tenants or to compel landlords to make rental concessions, whether for commercial or domestic leases.  

23.  It is further of relevance to note the subsequent judgment in the Sneakerboy case[8], in which the Australian court pointed out that it did not have jurisdiction to make orders varying the terms of commercial leases subject to the NSW COVID-19 regime.  This shows that the court cannot, in the absence of legislative basis, re-write the contractual terms between parties to a private tenancy agreement.    

24.  On Ground (2), there is no basis for the argument that the applicant can only enforce the Notice to Occupier to Quit six months after the tenancy agreement has expired.  Clause 1 of the respondent’s tenancy agreement provided that the landlord may forfeit the tenancy if the rent is in arrears for three days and after notice of demand has been put up.  Given that the respondent never disputes that rent has not been paid since September 2020, the Judge did not err in law in holding that the applicant was entitled to forfeit the tenancy. 

25.  On Ground (3), as mentioned above, the Lands Tribunal has no jurisdiction to compel landlords to undergo negotiations with tenants. The fact that the applicant refused to discuss with the respondent or did not give prior notice before commencing proceedings in the Lands Tribunal does not afford the respondent a viable defence to the claim for possession.  The respondent has included in the application bundle 22 pages of printout of WhatsApp messages.  It seems these are messages that the respondent had with the respondent or his wife.  The relevance of the messages is, however, not apparent to us.

26.  While it is a criminal offence under section 70B of the Landlord and Tenant (Consolidation) Ordinance, Cap. 7 to harass tenants, and the respondent had complained that the applicant acted unreasonably to force him to move out, the Judge did not err in law in entering judgment for the applicant given that there is no dispute that the respondent has failed to pay rent. 

27.  As for Ground (4) which relates to [16] of the Reasons for Decision, we have explained above why the Sneakerboy case and the reliance on the government’s appeal to landlords to grant rent concessions have no relevance.  The Judge did not err in law in finding the respondent has no proper legal basis to appeal against his order.  We do not find the arguments put forward by the respondent amount to arguable grounds of appeal.

28.  Ground (5) argues that the liability to pay rent from 1 September to 11 December 2020 should be deferred until “a fair judgment” has been given.  There is no legal basis for the argument.  It is not a proper ground of appeal.  Nor does it raise any point of law.  As the Judge observed in [16] of the Reasons for Decision, it would appear from the Notice of Opposition to Application that the respondent had accepted responsibility to pay rent; he had said he would pay the balance of the rent for September 2020 ($5,000 - $300 = $4,700) in the coming weeks. 

29.  In respect of Ground (6), the respondent seeks to put forward a counterclaim for damages and the return of the rental deposit. In the first place, this is not a ground of appeal involving any question of law.  Secondly, this is the first time the respondent advances these claims.  It is not permissible for a party to raise a new claim or issue at the appeal, especially when the related facts have not been canvassed in the proceedings below.  In any event, this is not a ground of appeal on any question of law. 

30.  For the above reasons, there are no merits in the respondent’s grounds of appeal.  We are also not satisfied that the circumstances are such that the interests of justice require leave to appeal to be given.

Disposition

31.  Accordingly, we refuse the application for leave to appeal and dismiss the summons dated 3 December 2020. 

32.  The respondent asks for the costs of the application because the applicant has failed and/or refused to communicate with him[9]. We refuse his application.  Costs should have followed the event, but since the applicant has taken no step in this application, we will make no order as to the costs of the application.

33.  As the present application is totally without merit, we further make an order under O.59 r.2A(8) of the Rules of the High Court that no party may request the determination to be reconsidered at an oral hearing inter partes.