FORDTIME INDUSTRIAL LTD v. YIP SHING LAM t/a TRADITIOAL CHINESE NOODLE

LDPE 757/2012

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO. LDPE 757 OF 2012

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D E C I S I O N

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1.  This is the application by the respondent for a review of the order made in the judgment handed down by this court on 9 October 2013 (“the Judgment”) pursuant to Section 11A of the Lands Tribunal Ordinance.

2.  The background of this case and the reasons of the judgment have already been set out in the Judgment and I do not want to repeat the same here.  For convenience, I shall adopt the same abbreviations in the Judgment.

3.  In a gist, this case involved a tenancy dispute with the applicant claiming against the respondent for a possession order upon termination of the T/A dated 20 April 2005 between them as well as ancillary order concerning mesne profits and specific performance for the respondent to reinstate the floor slab of the suit premises.  By the Judgment, I made the following orders :

(a) the respondent should deliver vacant possession of Cockloft C to the applicant;

(b) the respondent should pay the applicant mesne profits from 1 May 2012 till delivery up of vacant possession;

(c) application for specific performance be dismissed;

(d) costs of this application be to the applicant, to be taxed at District Court scale if not agreed, with certificate for counsel.

4.  The grounds for this application for review are :

(a)   there is no specific findings by this court as to whether the floor slab and Cockloft C did exist at the time of entering into the T/A;

(b)   findings of other circumstantial evidence to point to the existence of Cockloft C at the time of the T/A or at any other time  are erroneous;

(c)   since Cockloft C did not exist in 2005, there was no physical “premises” within the meaning of the LTCO for the Lands Tribunal to adjudicate the dispute; and

(d)   the doctrine of tenancy by estoppel could have no operation in this circumstances.

Finding on Existence of Floor Slab at time of T/A

5.  It is the contention by the respondent that according to Woodfall’s Law of landlord and Tenant Vol. 1 at paragraph 4.016, the subject matter of a tenancy agreement must be certain.  The subject matter of the T/A is Cockloft C so one should look at the time when the T/A was being entered into to see if Cockloft C did exist.  A cockloft pre-supposed a floor slab with the area enclosed to form a cockloft.  Without the floor slab, there is no cockloft but only a void space.  There is a difference between renting out a cockloft and a void space. In the Judgment, it is the finding by this court that Cockloft C once had a floor slab, and the court had erred in failing to make a finding as to whether there was a floor slab at Cockloft C at the time of the T/A.  Without a floor slab, Cockloft C did not exist at the time of the T/A and the T/A lacked the stated subject matter.

6.  There is no specific finding in the Judgment that the floor slab did not exist at the time of the T/A since this is never an issue in dispute at trial.  In the Judgment, it is found that the floor slab of Cockloft C did once exist but had been removed (paragraph 17-32 of the Judgment).  As can be seen from paragraph 9-10 of the Judgment, no floor slab was being found missing by Venture King, the predecessor of the applicant back in April 2005 and the applicant had never denied such a fact.  The subject matter of the T/A was a cockloft with the floor slab being removed.  This also explains why the Remarks stated in paragraph 10 of the Judgment was being inserted in the T/A requiring the respondent to reinstate the floor slab upon termination of the T/A. 

7.  And the insertion and acceptance by the respondent of the Remarks on the T/A clearly showed that the parties were well aware of the fact that the Cockloft C rented out was without a floor slab and the respondent was responsible for the reinstatement of the same upon termination.  The subject matter of the T/A was never a void space but Cockloft C without the floor slab.  There is no uncertainty in the subject matter itself.

8.  It is also the argument by the respondent that since the floor slab was not being shown on the Building Plan and no floor slab existed ever, there is no way for the respondent to know what is to be delivered up to the applicant in compliance with the Judgment.  I agree with the applicant that the expert had testified about the measurement of the Upper Part of Ground Floor in his evidence, i.e. according to the Building Plan, the part above the male lavatory on the Ground Floor is where the Upper Part of Ground Floor should be and measured 8.75 feet from the floor of the shops. 

Other Circumstantial Evidence

9.  It is the contention of the respondent that this Tribunal had wrongly relied upon a number of so called circumstantial evidence to conclude that Cockloft C did exist at the time of the T/A.  These are :

(a) the Upper Part of Ground Floor shown on the Building Plan was where the 4 cocklofts were located (paragraph 18 of the Judgment) when the joint expert opined that the Upper Part of Ground Floor was just a void space;

(b) PHH had assigned 1 undivided share to each of the cocklofts (paragraph 19 of the Judgment) but in fact 1 share was being assigned to Cockloft B and C respectively whilst 2 shares were being assigned to Shop C together with Cockloft C;

(c) wrongly took into account the previous transactions of the cocklofts, which are irrelevant in evaluating the question of whether Cockloft C existed at the time of the T/A or any other time (paragraph 20 of the Judgment);

(d) reliance on the unauthorised staircase leading to Cockloft B and D to conclude that Cockloft C existed (paragraph 21 of the Judgment);

(e) erred in finding a partition wall built for Cockloft C (paragraph 21 of the Judgment); and

(f) erred in finding that Cockloft was not a void.

10.  I shall deal with this argument in seriatim :

(a) The expert opined that the Upper Part of Ground Floor was just a void space.  This is his opinion from reading the Building Plan.  But in his testimony, the expert said that there is a staircase built solely for the purpose of reaching the 4 units, namely A to D on the Upper Part of the Ground Floor.  It is also described in the assignments that the respective cockloft are portion of the Upper Part of the Ground Floor of the Building and identified on the Upper Part of Ground Floor Plan;

(b) Whilst this court may have mistaken about the number of undivided share assigned to Cockloft C, not 1 share to Cockloft C but 2 shares to Shop C and Cockloft C instead, it remains the fact that Cockloft C was being assigned part of the undivided shares.  If Cockloft C is just a void space, why would undivided shares be assigned to it?

(c)   As stated in the Judgment, previous transactions of the Cockloft B, C and D are relevant to show that it is more likely than not that all these cocklofts did exist to form a sale transaction with the purchaser prepared to spend a fortune in the acquisition;

(d) The staircase is not only leading to Cockloft B and D but to Cockloft C as well. Evidence from the expert as well as from Mr. Chung of the applicant confirmed the same;

(e) The partition wall built for Cockloft C can clearly be seen from the photographs taken by the expert in his Supplemental Report.  The assignment plan also showed the same;

(f) Judging from my rulings above, there are ample evidence for the inference to be drawn that Cockloft C can never be a void.   

Jurisdiction

11.  It is the argument by the respondent that since the so-called Cockloft C was only a void space without physical structure, this is not a “premises” within the definition of the LTCO which is the basis of this claim and from which the Tribunal acquired jurisdiction. 

12.  The contention by the respondent is that a premises required a physical structure. I have dealt with the same argument at paragraph 38-44 of the Judgment.  Given the widely worded definition of “premises” which means “the subject matter of any tenancy” and “domestic premises” include “a bed space”, I cannot see how the respondent’s contention that “premises” must involve physical premises with an enclosed area can stand.  Even if “premises” involved an enclosed area, given my finding that Cockloft C did have a floor slab which had been removed, this will not change the nature of Cockloft C being a premises. 

13.  The case of Gonwah Properties Ltd v Nam Ah Restaurant & Ors [1987] 3 HKC 371 relied upon by the respondent can be distinguished.   In Gonwah, the whole building was being demolished so the premises, subject matter of the order for possession, no longer in existence, hence it is found that the court has no jurisdiction over the newly built premises which is not the subject matter of the order for possession.  Cockloft C in this case is still there except with the floor slab removed.  I cannot see how one can say that without the floor slab, Cockloft C can be considered “ceased to exist in fact and in law” in the words of Downey DJ in Gonwah.

14.  It is also the contention of the respondent that it is not open to this court to found jurisdiction on the “or otherwise” basis under Section 8(6) of the LTO (paragraph 45 of the Judgment) since the applicant’s case has always been premised on Section 127A of the LTCO as particularised on the Notice of Application (Form 22) (“the NOA”) which stated “NOTICE OF APPLICATION UNDER LANDLORD AND TENANT (CONSOLIDATION) ORDINANCE Pursuant to section 127A” (page 1 of the Trial Bundle).

15.  Such a contention by the respondent had overlooked the statutory requirement under Rule 68 of the Lands Tribunal Rules (“LTR”) as well as the directions issued by the President of the Lands Tribunal for possession cases under the common law (LTPD: Tenancy No. 1/2007).

16.  Rule 68(1) of LTR reads :

“ (1) Proceedings under Parts I, II, IV and V of the Ordinance shall subject to Sections B and C of this part be commenced by the applicant filing with the registrar a notice of application substantially in accordance with Form 22.”

17.  LTPD : Tenancy No. 1/2007 reads :

“The practice and procedure set out in Rules 68, 69 and 70 together with Form 22 of the Lands Tribunal Rules (Cap. 17A), including any subsequent amendments thereto, shall apply to an application for possession or for ejectment under the Common Law, notwithstanding that the proceedings were not made under the Landlord and Tenant (Consolidation) Ordinance (Cap. 7).”

18.  So, whether the application for possession is one made under the LTCO or Common Law, Form 22 should be used to commence the application at the Lands Tribunal. This is what the applicant had done in this case.  The NOA lodged by the applicant is in line with the standard Form 22 with the same headings particularised in paragraph 14 above.  Given the provisions of the statutory requirement and the practice directions, the headings on the NOA should not be construed as confining the basis of the application.

Estoppel

19.  It is the contention by the respondent that the essence of the doctrine of estoppel is that it will not avail a tenant to deny his landlord’s title.  In this case, the respondent is not seeking to challenge the applicant’s title in these proceedings so the doctrine of tenancy by estoppel has no operation in such circumstances.

20.  I stand by my finding in paragraph 33-37 of the Judgment concerning this argument.  By alleging that the floor slab had never been in existence and the applicant had no title to it, the respondent is in effect denying the right of the applicant to grant the lease.  The respondent was well aware of the allegation that there was a floor slab for Cockloft C and Mr. Cheng of Venture King, the predecessor of the applicant had in fact alleged that the respondent was the one to remove it.  Being aware of this fact, the respondent still elected to enter into the T/A and also for the Remarks on the T/A to be inserted.  The respondent should be estopped from denying the existence of the floor slab and the validity of the T/A.

Conclusion

21.  Having considered all the argument and submissions, I found all the grounds raised by the respondent in this application for review cannot stand and the application must be dismissed.

22.  Costs should follow the event.   Costs order nisi that costs of this review application be to the applicant, with Certificate for Counsel, to be taxed if not agreed on party and party basis at District Court scale.  Unless any of the parties applies by summons to vary it, the costs order nisi shall be made absolute upon expiry of 14 days.