RITA MOY LAI YEE v. GERARD WRIGHT AND ANOTHER

LDPD 1515/2005

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

LDPD Application No. 1515 of 2005

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JUDGMENT

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Background

1.  The Applicant is the landlord and the two Respondents named by the Applicant as the tenant of the suit premises, known as Tower 10, 9^th Floor, Flat G, South Horizons, Apleichau, Hong Kong (“the Premises”).  By a Tenancy Agreement dated 23 February 2004 made between the Applicant and the 2^nd Respondent, the premises was let by the Applicant to the 2^nd Respondent for a term of 24 months commencing from 25 February 2004 at the monthly rent of HK$16,500 per month, inclusive of management fee, government rates and rents, payable in advance on the 25^th day of each and every calendar month without deduction.

2. By a notice of application (Form 22) filed on 6 June 2005, the Applicant applied for recovery of possession on the ground that the Respondents failed to pay rent.  The Applicant claimed against the Respondents for (1) the arrears of rent/mesne profits from 25 January 2005 to the date of delivery of vacant possession of the suit premises and costs; and (2) “legal and financial liabilities caused by tenant’s refusal to let S. H. Bldg. Management of South Horizons personnel and authorized contractor enter the flat to make repairs and leakage that is causing damage to the flat below”.

3. The 2^nd Respondent filed a notice of opposition on 22 June 2005 opposing the application on the following grounds: (1) breach of contract; (2) mis-representation; (3) failure to perform repairs; (4) negligence causing endangerment; (5) invasion of privacy & the right to live in peace.  The 2^nd Respondent also sought costs and damages & repairs.

Hearing held on 15 July 2005

4. In the hearing held on 15 July 2005, the 1^st Respondent could not produce any document of authorization from the 2^nd Respondent.  He could not even produce a copy of a valid Business Registration Certificate of the 2^nd Respondent.  When the Tribunal asked the 1^st Respondent to clarify if he represented the 2^nd Respondent and to produce documents supporting the existence of the 2^nd Respondent and her authorization, the 1^st Respondent replied that he would have to seek his lawyer’s advice.  He asked for adjournment of 14 to 21 days.  The Applicant disagreed with the proposed adjournment.  She said that only after the signing of the tenancy agreement that she noted that the “B/R No.” of the 2^nd Respondent as appeared in the tenancy agreement was in fact the Hong Kong identity card no. of the 1^st Respondent.  The Applicant added that although Mr. Wright was the only person she had met and dealt with relating to this tenancy, she thought that it might be necessary to add the name of the 2^nd Respondent in the notice of application since the latter was the name of the tenant as appeared in the tenancy agreement notwithstanding that after the signing of the tenancy agreement, she could not find anyone purporting to represent the 2^nd Respondent other than Mr. Wright, the 1^st Respondent.   Therefore, since Mr. Wright represented Mercator Group before signing the tenancy agreement, she would think that according to the term of the tenancy agreement, the expression ‘the Tenant’ shall mean and include Mr. Wright.  She further added that Mr. Wright has been residing in the Premises as a tenant after he took over possession of the Premises. 

5. It was noted that the said Tenancy agreement was signed by Mr. Wright, next to a chop of Mercator Group.  The address of the tenant was stated as “Level 25, Bank of china tower, 1 Garden Road, Central, H K”.  Also, the said Tenancy Agreement contained the following provisions: -

‘	16.	Any notice under this Agreement shall be in writing and any notice to the Tenant shall be sufficiently served if left addressed to him on the said premises or sent to him by registered post to his last known place of abode or business and any notice to the Landlord shall be sufficiently served if delivered to it as its registered office or sent by registered post address thereto.
	17.	The expression “the Tenant” shall (where the context permits) mean and include the party or parties specially named and the executors and administrators of such party (save only where such party is a corporation) and where the party specifically named is a firm the said expression shall (where is context permits) mean and include the members of such firm and the executors and administrators of each member.’

6. At the end of the hearing held on 15 July 2005, the Tribunal granted the following orders: -

(1)	Leave be granted to the Applicant to amend Form 22 today;
(2)	Leave to the 2 Respondents, to file to the Court and to serve to the other parties amended Notice of Opposition within 14 days from today;
(3)	Hearing date to be fixed by the Assistant Registrar, ½ day required;
(4)	Costs in the cause of the Application.

Amended notice of application

7. The Applicant did amend her notice of application on 15 July 2005, deleting the claim for damages and adding “ G. P. O. Box 11425” as the second address of both the 1^st Respondent and 2^nd Respondent.  The Respondents did not amend his notice of opposition.

Hearing held on 15 July 2005

8. In the hearing held on 5 September 2005, Mr. Gerard Wright (as known in his Hong Kong identity card as Gerard Vincent Wright), the 1^st Respondent submitted that (i) he also represented Mercator Group, the 2^nd Respondent and (ii) the Applicant knew along that he did represent the 2^nd Respondent from the beginning of the tenancy of the Premises.  The Applicant agreed to the above statements and did not raise any opposition that the 1^st Respondent could represent the 2^nd Respondent.  The Applicant and the 1^st Respondent gave evidence in person after which they also made submissions.  The hearing was adjourned for judgment.  This Judgment sets down the reasons for the judgment including the orders that are granted.

The Applicant’s case

9. The Applicant gave evidence on 5 September 2005, producing a number of exhibits, marked Exhibits A1 to A8.  She produced Exhibit A2, a statement summarizing the dates of payments from the beginning of the tenancy (on 23 February 2004 when the first month’s rent and the two months’ deposit were paid) to the date of last payment (i.e., 8 March 2005 when the rent for the period from 25 December 2004 to 24 January 2005 was paid).  These show that the Respondents had been late in paying the monthly rent from the second monthly period onwards.  The Applicant also produced her various invoices, reminders and warning notices and the bank statements supporting her statement on the payment record of this tenancy.  She said that all these were sent by mail or faxed to the two Respondents, addressed to firstly, the address of the Premises, secondly, the address of the 2^nd Respondent as stated in the tenancy agreement and thirdly, the G.P.O. Box no. 11425 given to her by the 1^st Respondent.  She further added that many letters and invoices sent to the addresses supplied by the Respondents were all returned undelivered.  Even the G.P.O. Box 11425 given to her by the 1^st Respondent, who had insisted that all the mails be sent, were found to be closed on 3 August 2005.  She therefore submitted that according to her evidence and pursuant to the clause in the tenancy agreement that the addresses shown therein were the addresses that correspondence by the parties should be sent to, the Tribunal should decide that the Applicant had discharged her obligation that (i) she had notified and warned the Respondents the non-payment of rents, the threat of legal proceedings unless the Respondent resolved the matter, and (ii) she had served the application notice in the present proceedings.

10. Also, during the hearing, the Applicant conceded to allow the Respondent to set off a sum of $2,986 from the monthly rent payable for the month commencing from 25 July 2004 to 24 August 2004 notwithstanding that she had not approved beforehand the said expenditure made by the 1^st Respondent relating to the installation of electrical appliances and other maintenance work.  After taking into account this concession and the set off, the Applicant said that as at the date of hearing (5 September 2005), the Respondents owed her the monthly rent/mesne profits of the Premises for the period from 25 January 2005, or a total of more than 8 months’ rent. 

11. The Applicant also denied that she had abrogated her responsibilities as a landlord to carry out repairs that were landlord’s covenants under the tenancy agreement.  The Applicant said that the Respondents had used this as an excuse for not paying the rent for the period from 25 January 2005 onwards.  In particular, the Applicant said that the Respondents had never notified her of the alleged disrepair state of the interior of part of the Premises as appeared in the photograph produced as Exhibit R-5.  The only letter addressed by the Respondents to the Applicant on the issue of repairs that had been produced by the Respondents were the letters dated 10 and 11 March 2005 (i.e. Exhibits R-1 to R-3).  The Applicant said that these letters mainly referred to the allegation made by the Respondents that the Applicant had failed to deliver the apartment in a habitable condition for which the Applicant had already given a prompt reply (see Exhibit A-7) denying the allegation and proposing an inspection by her contractor.

12. On the contrary, the Applicant alleged that despite various oral and written requests since February 2005 from both the Applicant as well as South Horizons Management Limited (the property manager of the estate in which the Premises formed part) for an internal inspection of the Premises in order to conduct a water test or repairing work to rectify the water leakage problem of Flat 8G (i.e., the apartment below the Premises), the Respondents did not allow access for the management staff.  The Applicant said that this was the case even though the management staff brought along an authorization letter originally signed by the Applicant approving of the access.  In support of these allegations, the Applicant produced photocopies of a number of letters from the South Horizons Management Limited on the subject, dated from 22 March 2005 to 3 August 2005 (see Exhibits A-4 and A-8).  In particular, Exhibit A-4 also included a report of the water leakage problem of Flat 8G, which stated that as early as 22 February 2005, the management staff had been seeking the consent of the tenant of the Premises to allow access for inspection but were all unsuccessful.

13. The Applicant submitted that during the hearing on 15 July 2005, she understood from the Tribunal that under the present proceedings, the Tribunal would not have jurisdiction to award her damages and financial losses caused by the Respondents’ refusal to allow access by the management staff for internal inspection of the Premises.  She therefore amended and deleted the second part of her claims.   

The Respondents’ case

14. Likewise, the 1^st Respondent acknowledged that this Tribunal did not have jurisdiction to deal with various issues as stated in his notice of opposition, and to award damages or to made orders to that effect.  Therefore, although he had not amended his notice of opposition, he submitted that he only sought the following: -

(1)	the Applicant’s application be dismissed;
(2)	the Applicant be required to carry out the outstanding repairs to the interior of the Premises within a certain stipulated period of time;
(3)	certain Government departments be asked to inspect the interior of the Premises to the satisfaction of the Tribunal
(4)	costs of repairs be borne by the Applicant;
(5)	the Respondent would not be required to pay any rent until and unless the outstanding repairs to the interior of the Premises had been done; and finally,
(6)	judgment be given to require the Applicant to approach the management of the Residents’ Club to approve the use of the Club facilities by the 1st Respondent and members of his family immediately.

15. The 1^st Respondent did not adduce any evidence to rebut the evidence of the Applicant that the Respondents had not paid any rent for the Premises for the period from 25 January 2005.

16. The 1^st Respondent said that the Applicant, an experienced landlord, simply evaded her entire responsibility as a landlord when repairs were needed.  The 1^st Respondent stressed that the Premises were not in a habitable condition from the beginning when he took over the Premises from the Applicant.  Since he had not received any response to his complaint, he had himself arranged the installation of air-conditioner and carried out certain minor repairs and had the expenses deducted from the rent for the month from 25 July 2004 to 24 August 2004.  Also, he sent written complaints to the Applicant on 10 and 11 March 2005 (Exhibits R-1 to R-3) but there was no action from the Applicant to rectify the situation.

17. He said that although he on behalf of the 2^nd Respondent had served notice to the Applicant on 16 May 2005 (Exhibit R-4) that “we have discontinued the use of our facsimile service at +852 8201 8837 and that our address for correspondence remains as The Mercater Group, GPO Box 11425, Central, Hong Kong”, the Applicant still chose to send the mails to the previous addresses.  However, the 1^st Respondent did not elaborate as to why this GPO Box was closed on 3 August 2005, subsequent to the hearing on 15 July 2005, as the notice of hearing sent by the Tribunal was also returned as undelivered. 

18. The 1^st Respondent denied not giving access to any contractor properly authorized by the Applicant.  However, he admitted that he would not be prepared to give access to the contractor or anyone who was only to make another internal inspection of the Premises but not to carry out repairs as required. 

The Law

19.  Sub-sections (7) and (8) of sections (8) the Lands Tribunal Ordinance (Cap 17) set out the jurisdiction of this Tribunal in this proceedings: -

“	(7)	The Tribunal shall have jurisdiction to make orders for possession or for ejectment in relation to premises to which Part I, or tenancies or sub-tenancies to which Part II, Part IV or Part V of the Landlord and Tenant (Consolidation) Ordinance (Cap.7) applies where the contractual period of a tenancy or sub-tenancy has been terminated by forfeiture, by surrender (including surrender under the former section 52A, or under section 117, of the Ordinance), by notice of termination within the meaning of Part IV or Part V of that Ordinance or by notice to quit given by the landlord to the tenant, the tenant to the landlord, the principal tenant to the sub-tenant or the sub-tenant to the principal tenant.
	(8)	The Tribunal shall have jurisdiction, in any application for possession or for ejectment, under the Landlord and Tenant (Consolidation) Ordinance (Cap. 7) or otherwise, and in any application for a new tenancy under Part IV of that Ordinance, whether or not it grants any such application, to make orders for the payment of rent, mesne profits, including interim payments of rent and mesne profits, for the payment of any other money which is due under the tenancy or sub-tenancy, and for the disposal of any property left in the premises concerned by the tenant or sub-tenant.”

Tribunal’s findings

20. It is clear from the oral evidence of the parties and the documentary evidence produced by them that after taking into account the concession from the Applicant, the Respondents did not pay any rent to the Applicant for the period from 25 January 2005 as at the date of the Application as well as up to the date of last hearing.  There was no evidence from the Respondents to rebut the Applicant’s evidence.

21. The tenancy agreement of the Premises was stamped (Exhibit A-3) and that a copy of the Form CR-109 (Exhibit A-1) was served.   Although the tenancy agreement of the Premises did not include a forfeiture clause, it was implied by law, by virtue of the amendment in December 2004 of the Landlord and Tenant (Consolidation) Ordinance (Cap. 7), that the tenancy contained a forfeiture clause if the tenant did not pay rent within 15 days of the due date.

22. The ground of opposition put up by the Respondents was that the Applicant failed to make good the internal disrepairs of the Premises.  On the findings of facts, I agree with the Applicant that the Respondents had not brought to the attention of the Applicant prior to the hearing the disrepairs that the 1^st Respondent complained of in Exhibit R-5.  Whilst he had sent to the Applicant a few letters on 10 and 11 March 2005, I find that these were given more than a month after the rent for the period from 25 January 2005 was due.  Also, the contents of these letters were not as specific as that shown in Exhibit R-5, which was produced during the hearing on 5 September 2005.  Also, on balance of probabilities, I believe in what the Applicant said, that the Respondents had failed to give access to her contractor or the management staff of the property manager of the Estate for inspection of the Premises from February 2005 up to the date of hearing.  Finally, I find that even if there were disrepairs in certain portions of the Premises under demise, the Respondents as the tenant could not stop paying rent entirely to the Applicant as the landlord.  If there were any dispute on the liability of repairs or the remedies or the damages flowing from the disrepairs, that should be dealt with by way of litigation instituted by either the tenant or the landlord.  If there were serious disrepairs that could endanger the occupants, any party could also choose to complain to the Buildings Department or other government department concerned.

23. In the circumstances, I decide in favor of the Applicant.  The grounds of opposition put up by the Respondents, and as amended orally during the hearing, were all dismissed.  I also find that it is not appropriate for the Tribunal to grant, and there is indeed no jurisdiction for the Tribunal to grant, the orders or reliefs sought by the 1^st Respondent in his oral submission.  Finally, I give the following orders: -

1.	The Applicant shall after the 21st day of September 2005 (hereinafter called “the Payment Deadline”) recover vacant possession of the suit premises from the Respondents;
2.	The Respondents do pay the Applicant arrears of rent/mesne profits from the 25th day of January 2005 to the date of recovery of vacant possession at the rate of $16,500 per month;
3.	The Respondents do pay the Applicant the costs of this Application which is summarily assessed at $1,000;
4.	If the Respondents should pay to the Tribunal all the arrears of rent/mesne profits stated in paragraph 2 above (including all arrears of rent/mesne profits due on or before the date of payment) plus the sum in paragraph 3 above on or before the Payment Deadline, the Respondents shall continue to hold the suit premises according to the original lease/tenancy without any new lease/tenancy, the order for recovery of vacant possession of the suit premises in paragraph 1 above will also cease to have effect;
	(This Tribunal may extend the Payment Deadline under section 21F of the High Court Ordinance, Cap. 4.)
	(In default of the Respondents paying into the Tribunal the sums in paragraphs 2 and 3 in accordance with paragraph 4 on or before the Payment Deadline (or such date as may be extended by this Tribunal), the orders in paragraphs 1 to 3 above may be enforced, and so long as this order remains unreversed, the Respondents shall be barred by the said section 21F from all relief.)
5.	Payment out of the sum to the Applicant after payment of the same into the Tribunal by the Respondents.
	(Payments pursuant to this order should be made in cash, by cashier orders issued by banks in Hong Kong or by cheques drawn by firms of solicitors in Hong Kong.  This Tribunal does not accept any other mode of payment pursuant to this order.)