Anthony Grahame Stott v. T Y H Ltd.

LDNT132/2001

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Application No.: LDNT No. 132 of 2001

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JUDGMENT

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1. The Applicant is the tenant of the premises known as House No. C3 including Garden, Yard, Roof and Car Ports thereof of Hillgrove, No. 18, Cape Drive, Chung Hom Kok, Hong Kong ("the Premises"). The Respondent is the landlord of the Premises. The Premises was let to the Applicant by the Respondent for domestic purposes under a Tenancy Agreement dated 7th December 1998 ("Tenancy Agreement") for a terms of 2 years from 1st December 1998 to 30th November 2000 at a rent of $95,000 per month (exclusive of rates and management fee), payable in advance on the 1st day of each and every calendar month. The Applicant's domestic tenancy with the Respondent in respect of the Premises is covered by Part IV of the Landlord and Tenant (Consolidation) Ordinance, Cap. 7 ("the Ordinance").

2. A Notice of Termination of Tenancy dated 16th December 2000 ("CR101") was served by the Respondent on the Applicant notifying the latter that the tenancy of the Premises will be terminated on 30th November 2000 and that the Respondent would not oppose an application by the Applicant to the Lands Tribunal for the grant of a new tenancy. In the Grounds and Particulars of the Notice of Application (Form 22), the Applicant stated that "the CR101 is invalid and does not have the effect it purports to on the grounds that it was not given to the Applicant more than 6 months prior to the stated date of termination as required by Section 119(2) of the Ordinance." The Applicant added that "in order to preserve his rights, the Applicant responded to the CR101 on 12th January 2001 by a prescribed Form CR102 dated 12th January 2001 whereby the Applicant informed the Respondent that the Applicant shall not give possession of the Premises at the termination date and will apply to the Lands Tribunal for the grant of a new tenancy." Furthermore, "the Respondent subsequently served a Notice in Form CR105 dated 17th February 2001 requiring the Applicant to make application to the Lands Tribunal for the grant of new tenancy of the Premises." The details of the above pleadings were agreed by the Applicant.

3. The Applicant's application pursuant to Section 117(1) of the Ordinance and filed on 12th April 2001 are:

"(a) A Declaration that the CR101 was invalid and of no effect and that the Applicant's tenancy in respect of the Premises has not been validly terminated under Section 119 of the Ordinance or at all.

(b) Consequential upon 8(a) above, the costs of these proceedings be provided for.

(c) Alternatively, without prejudice to Paragraphs 8(a) and (b) above, a new tenancy in respect of the Premises be granted to the Applicant subject to the duration, terms and the monthly rental in respect thereof to be determined by the Lands Tribunal."

4. The Respondent applied on 12th July 2001 to list the Applicant's application for hearing. Messrs. Deacons, solicitors for the Applicant wrote a letter to the Deputy Registrar, Lands Tribunal, asking the Tribunal to "refrain from fixing any date until the Respondent properly complies with the rules." In the letter, the following reasons were stated:

"3. ... the validly of the Form CR101 in this case is disputed.

4. This point is clearly suitable for determination as a preliminary issue under Rule 18 of the Lands Tribunal Rules ("LTR") as it is a point of law which, if resolved in the Applicant's favour, would put an end to the case, and dispense with the need to incur expense in engaging a survey.

5. However, the Respondent has failed to file any notice of opposition in Form 7 as required by Rule 69 LTR, within 14 days after service of the Form 22 or at all.

6. In the circumstances we respectfully submit that the Respondent has no locus to apply for a hearing unless and until he files a Form 7, in the event that the Tribunal grants him leave to do so out of time, as there is nothing on record to indicate that he wishes to be heard.

7. Further the Applicant is precluded from applying for a hearing under Rule 18 in the absence of a notice of opposition being filed by virtue of the ruling of Presiding Officer H.H. Judge Chow dated 8 May 2001 in LDNT 81/2001."

5. The Deputy Registrar, Land Tribunal replied to Messrs. Deacons on 9th August 2001, as follows:

"Please be informed that pursuant to rule 14(b) of the Lands Tribunal Rules, a hearing date has been fixed on 4 September 2001 at 10:30 a.m. at Court No. 2 of the Tribunal after receiving the Respondent's application to list for hearing filed on 12 July 2001. In the meantime, you may take whatever action you deemed appropriate."

6. The court for the hearing was subsequently changed to Court No. 3. In the hearing, the Applicant submitted that firstly, "the issue of the validity of the CR101 should be determined at the beginning of the hearing as, if the Tribunal agrees that it is invalid, then, subject to costs, that is the end of the matter". At this juncture, the Tribunal asked if the Respondent agreed with the Applicant that the aforesaid CR101 for the Premises was invalid. The Respondent, after being shown the Notes printed on the back of the standard Form CR101 printed and supplied by the Commissioner of Rating & Valuation, acceded that the Form CR101 was invalid because the date of termination of the tenancy did not comply with the requirement stipulated by the Ordinance. The Respondent also agreed that since the existing tenancy of the Premises had not been duly terminated under the Ordinance, the application for new tenancy had to be dismissed by the Tribunal. Therefore, the parties agreed that the only issue outstanding was the matter of costs.

7. The Applicant submitted that although the Applicant wished to have this matter of the validity of the CR101 determined as a preliminary issue under Rule 18 LTR, the Applicant was precluded from doing so because no Form 7 has been filed by the Respondent (see unreported case of John Willimott v South Harbour Properties Limited, decided by HH Judge Chow, Lands Tribunal on 8th May 2001). The Applicant said that although this fact was pointed out by the Applicant's solicitor in the latter's letter dated 13th July 2001 to the Tribunal and copied to the Respondent, and also in the Applicant's solicitor in the latter's letter dated 13th August 2001 to the Respondent, the Respondent still did not see fit to file and serve a Form 7. And as the Respondent had not filed a Form 7, the Applicant was not entitled to be heard in these proceedings by virtue of Rule 69 LTR.

8. In the circumstances, as the entire hearing of all matters of the new tenancy application had to be heard on 4th September, 2001, the Applicant had to engage a Chartered Surveyor and lawyers to prepare a case in respect of the prevailing market rental. Therefore, the Applicant submitted that should the Applicant obtain the declaration he sought that the CR101 was not valid, all the wasted costs in respect of the matter concerning the prevailing market rental should be borne by the Respondent on the indemnity basis. This was due to the "Respondent's failure to do anything to enable costs to be saved despite repeated exhortations to do so constitutes frivolous and vexatious conduct within the meaning of s.119R, Cap. 7"

9. In addition, the Applicant submitted that "the Respondent's persistence in the face of a hopeless case concerning the CR101 constitutes frivolous or vexatious conduct within the meaning of s. 119R of Cap. 7 and the Applicant therefore seeks costs of the entire proceedings on the indemnity basis."

10. The Respondent was represented by Mr. Yen, Chi Nong William. He denied that the Respondent had conducted the case in a frivolous or vexatious manner. He stated that he did not read or speak English and had not engaged the services of a lawyer in respect of this new tenancy application. He now acknowledged that because of his ignorance, he was wrong in not following the requirements of the Ordinance when giving notice of termination (Form CR101) to the Applicant. Furthermore, he did not know that the Respondent should file a Form 7. From the date of the notice of application of a new tenancy by the Applicant to the date of applying to list for hearing by the Respondent, Mr. Yen said that he, for the Respondent, had been negotiated with the Applicant on the terms of the new tenancy. Since he could not speak English, he asked his daughter, Karen to telephone the Applicant's lawyer. He himself had also talked to the Applicant's secretary a number of times. By July, he realised that he might not be able to agree on the terms of the new tenancy for the Premises. He therefore applied to list for hearing. After he received a notice from the Deputy Registrar, Lands Tribunal regarding the date and time of the hearing, he thought he could well leave the matter to the Tribunal for determination. Therefore, although he received letters from the Applicant's lawyer, he did not do anything further.

11. According to the Ordinance, section 117(1) and section 119R provide:

"117. Continuation of tenancies and grant of new tenancies

(1) A tenancy shall not come to an end unless terminated in accordance with this Part; and a tenant may apply to the Lands Tribunal for a new tenancy-

(a) if the landlord has given notice under section 119 to terminate the tenancy; or

(b) if the tenant has made a request for a new tenancy under section 119A"

"119R. Costs -

In any proceedings under this Part, the Tribunal shall not make any order as to costs against a party unless that party has conducted his case in a frivolous or vexatious manner."

12 Also, according to The Concise Oxford Dictionary, Sixth Edition, the word "frivolous" means "paltry, trumpery, trifling, futile; given to trifling, not serious, silly; whilst the word "vexatious" mean "causing or tending to cause vexation; (Law) not having sufficient grounds for action and seeking only to annoy defendant."

13. With reference to the Application's application (Form 22) filed on 12th April, 2001, it is noted that the Applicant sought to claim, pursuant to section 117(1) of the Ordinance, a declaration that the CR101 is invalid and consequently, the costs (see paragraph 8(a) and 8(b) of the Grounds and Particulars of the application). However, these two claims are not something provided for under section 117(1) of the Ordinance. The said section provides that "a tenant may apply to the Lands Tribunal for a new tenancy". That is, the present application by the Applicant can only be the application for the new tenancy, as rightly stated in paragraph 8(c) of the Ground and Particulars of the application. In the course of considering the Applicant's application for a new tenancy, the Tribunal may be required to decide and declare whether the notice of termination of tenancy (Form CR101) is valid or not. But, this is not something that the Respondent can apply for independently. Therefore, these claims (as set out in paragraphs 8(a) and 8(b) of the Grounds and Particulars of the application must be dismissed by virtue of the provisions of the Ordinance.

14. On the issue of costs, the Applicant claimed that because the Respondent did not file a Form 7, the Applicant was precluded from taking action under Rule 18 of the Lands Tribunal Rules and hence, the Applicant's intention to sort out the validity of the aforesaid Form CR101 as a preliminary issue was frustrated. However, one must bear in mind that the Respondent does not owe a duty to the Applicant to facilitate the taking of an action under Rule 18 of Lands Tribunal Rules by the Applicant. The Applicant could not come to the Tribunal and claimed that because of the inaction of the Respondent (i.e. not to file a Form 7), the Applicant could not proceed under Rule 18 of the Lands Tribunal Rules and therefore, the Respondent must be held responsible for the costs of the Respondent in respect of the matter concerning the determination of the prevailing market rental. The only thing that will affect the Respondent in failing to file a Form 7 is that the Respondent will not be permitted to rely on any ground of opposing the grant of a new tenancy if that ground has not been pleaded in Form 7 in the fist place.

15. It is necessary to consider whether the conduct of the Respondent falls within the proviso and definition of "frivolous and vexatious" under section 119R of the Ordinance. The present application is an application by the Applicant for a new tenancy. The Respondent's evidence was that he did not oppose the granting of a new tenancy because all along, the Respondent was contemplating a new tenancy with the tenant (Applicant). The Respondent has for some months negotiated the terms of the new tenancy. It was only when the Respondent realised that the Respondent could not come to any agreement with the Applicant that the Respondent applied to the Tribunal to list for hearing. Whether or not the Form CR101 is valid, in the absence of any agreement by the parties, will have to be decided by the Tribunal when the case was fully heard by the Tribunal. This includes the hearing of the parties who adduce evidence and submission. In the present case, the Respondent after hearing the opening submission by the Applicant agreed with the Applicant that the Form CR101 was invalid. However, on the assumption that even if the Respondent disagreed on hearing the Applicant's submission and required a strict proof, that will be a matter to be decided by the Tribunal after the Tribunal had the full hearing. In this respect, section 119R of the Ordinance provides that there will no order as to costs unless it can be shown that a party has conducted his case in a frivolous or vexatious manner.

16. It was the Applicant's argument that the Applicant had to prepare the case fully, including the employment of a Chartered Surveyor for the estimation of the prevailing market rent and the preparation of the case by lawyers in respect of the prevailing market rent because the Applicant thought this to be a safe step since the Tribunal might rule that the CR101 was valid. So, in the case of no agreement by the parties, whether the CR101 was valid, the Applicant believed, would be a matter to be decided by the Tribunal in the course of hearing the new tenancy application. Otherwise, the Applicant did not have to prepare for the situation that the CR101 might be ruled valid. It follows from this that there was nothing wrong on the part of the Respondent to decide to leave the matter of whether the CR101 was valid to the Tribunal, hence his decision to list for hearing.

17. The Tribunal therefore cannot agree with the Applicant that "the Respondent's failure to do anything to enable costs to be saved constitutes frivolous and vexatious conduct within the meaning of section 119R of the Ordinance", based on the aforesaid quoted dictionary meaning of the words. Similarly, the Tribunal cannot agree with the Respondent's submission that "the Respondent's persistence on proceeding in the face of a hopeless case concerning the CR101 constitutes frivolous or vexatious conduct". This is because once the Applicant institutes proceedings in the Tribunal, pursuant to section 117(1) of the Ordinance, the Respondent has the right to await for the hearing and determination by the Tribunal. There is no proof that the Respondent has conducted this case in a frivolous or vexatious manner.

18. According, the Tribunal makes the following orders:

Order:

1. Application by the Applicant be dismissed.

2. There be no order as to costs.