KONG ON TAI AND ANOTHER v. WU WEIWEI

LDPD 1171/2018

[2018] HKLdT 70

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO. LDPD 1171 OF 2018

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J U D G M E N T

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Background

1.  The 1^st and 2^nd Applicants (hereinafter referred to together as “the Applicants” where appropriate) are the registered owners of Apartment Unit 06, 9/F (including the balcony thereof) of Tower 6B of Century Link of Phase 1 of Century Link Development, No 6 Ying Hong Street, Tung Chung, New Territories (“the Premises”).

2.  By a tenancy agreement dated 11 April 2017 (“the Tenancy Agreement”), the Applicants let to the Respondent the Premises for a term of 2 years from 18 April 2017 to 17 April 2019 at a monthly rent of $10,500 (inclusive of Government rent, rates and management fees) payable in advance on the 18^th day of each and every calendar month. Notwithstanding the above, 6-month rental in the sum of $63,000 was paid in advance on 11 April 2017 and it was further specified at clause 5(c) in Schedule II to the Tenancy Agreement that another 6-month rental was payable in advance on 11 October 2017.

3.  By clause 4 in Schedule II to the Tenancy Agreement, there is a break clause (“the Break Clause”) whereby either the Applicants or the Respondent shall be entitled to terminate the Tenancy Agreement earlier by serving not less than 1 month written notice or by paying 1 month’s rent in lieu to the other party provided that the written notice shall not be served before the expiration of the first 11 months of the term of the tenancy.

4.  It was initially the Applicants’ case that they had served a written notice dated 26 March 2018 (“March 26 Notice”) in accordance with the provisions of the Break Clause so as to terminate the Tenancy Agreement on or before 26 April 2018.

5.  While the Respondent claimed that she had not received the March 26 Notice, the Applicants had further given written notice to the Respondent by a letter from their solicitors, Messrs Chan, Lau & Wai (“CLW”), dated 20 April 2018 (“April 20 Notice”) stating, inter alia, that the Applicants will not rely on the March 26 Notice, and further giving notice again to the Respondent pursuant to the provision of the Break Clause so as to terminate the Tenancy Agreement on or before 27 May 2018.

6.  Then on 26 June 2018, the Applicants applied to the Lands Tribunal (“the Tribunal”) for recovery of possession of the Premises and mesne profits (to the date of delivery of vacant possession of the Premises) and costs as the Respondent had failed to vacate and deliver vacant possession of the Premises to the Applicant despite the April 20 Notice.

7.  On 5 July 2018, the Respondent filed her Notice of Opposition (in Chinese) in which she stated, inter alia, the following:

(1)  The Tenancy Agreement should not have expired until 17 April 2019 and she had already deposited another 6-month rental in the sum of $63,000 into the 1^st Applicant’s bank account in April 2018 covering the period from April 2018 to October 2018;

(2)  The purported exercise of the Break Clause was result from the Respondent’s refusal to accept the exorbitant increase in rental sought by the 1^st Applicant on 3 March 2018.

(3)  When signing the Tenancy Agreement in April 2017, the Respondent was pregnant and was expecting a longer lease so that her family would not be required to move so often. That explained why the Respondent offered to pay 6-month rental in advance. However, she was cheated into signing the Tenancy Agreement when she was told that all tenancy agreements in Hong Kong were for a term of 1 year fixed plus another term of 1 year open (or flexible). Now she was told over the phone that the prevailing rental was cheap and should not be for a 2-year term. If the Respondent were told the latter earlier, she would have rented some alternative premises instead of the Premises.

The Applicants’ Witness Statement

8.  In his witness statement dated 9 August 2018, the 1^st Applicant explained that when signing the Tenancy Agreement, the Break Clause and its effect was explained clearly by the estate agent in the presence of all parties. He continued as follows:

“6. The agreed rent of the Premises is HK$10,500.00 per month. The rent of the Premises for the first 6 months was agreed to be paid in advance on 11 April 2017 in a sum of HK$63,000.00. The rent of the Premises for the second 6-month period from 11 October 2017 to 10 April 2018 was agreed to be paid in advance on the 11^th day of October 2017 in a sum of HK$63,000.00. Thereafter, rent was agreed to be payable monthly.

7. The payment method for the 1^st year of rent as mentioned in Paragraph 6 above is stated on Page 2 and Page 4 of the Tenancy Agreement. The rent payable on a monthly basis for the last 12 months is as mentioned on Page 1 of the Tenancy Agreement. This different payment terms between the first and second twelve months is to reflect that in the second twelve months, either party could exercise the Break Clause. There were no oral terms of the Tenancy Agreement which were agreed.

8. At that time, Shirley and I accepted a relatively low rent compared with the market rent because the building where the Premises are located is very new and there is a large supply of similar-sized flats in Tung Chung. Nevertheless, the property agent had already advised the Respondent that the rent was comparatively low and might be subject to increase in future.

Increasing the rent

9. In around late February, Shirley and I realised that the market rent of the Premises had been rising significantly. Considering the relatively large discrepancy between the existing rent and the market rent of the Premises, and taking into account the option to terminate the Tenancy Agreement after 17 March 2018 with not less than one month’s notice, we believed it was an appropriate time to negotiate with the Respondent to increase the monthly rent.

10. If the Respondent had accepted my offer to increase the monthly rent, I would have signed a new tenancy agreement with her. Otherwise, I believed I could still exercise the Break Clause to terminate the Tenancy Agreement and seek another tenant who could afford a higher rent.

11. I therefore messaged the Respondent by WeChat on 3 March 2018 to indicate my intention to increase the rent to HK$16,000.00 per month from mid-April 2018, and I asked the Respondent to reply to my offer before 11 March 2018. There is now produced and shown to me marked “KOT - 2” a copy of a series of WeChat messages exchanged between me and the Respondent.

12. On the same day, the Respondent replied to my message on WeChat that she and her family could not suddenly afford HK$16,000.00 as the monthly rent of the Premises. She responded that she and her family could afford HK$12,000.00 per month and they had to move if they had to pay HK$16,000.00 per month as rent.

13. I then asked the Respondent to consult the property agent about their situation before making any decision.

14. On 11 March 2018, the Respondent messaged me again, reiterating that they cannot afford the offer of HK$16,000.00 as monthly rent of the Premises. The Respondent said that she and her husband could afford a monthly rent of around HK$13,000.00 and offered HK$78,000.00 as a one-off payment for half year rental. The Respondent said that she and her husband had given serious thought about the offer and promised that they were stable tenants. The Respondent then asked me to give a final offer if the rent was negotiable and repeated that she and her family had to leave if HK$16,000.00 per month as rent was the final offer.

15. On the same day, I offered HK$15,000.00 per month as the final offer and proposed to fix a date for her to vacate the Premises if the final offer was not accepted by the Respondent. I received no reply from the Respondent to my final offer.

16. I messaged the Respondent again on 14 March 2018 and 15 March 2018 by WeChat to remind her of our final offer. However, I received no reply from the Respondent.

17. As WeChat message can be delivered to and received in both Hong Kong and Mainland China, there is no excuse for the Respondent to claim she has not received any of the messages due to the fact that she was in Mainland China.

18. I began to suspect that the Respondent wanted to delay matters in a bid to remain in the Premises by ignoring the final offer so that nothing could be finalised. I was surprised that I had received no reply from the Respondent since 11 March 2018 because the Respondent was previously very responsive to my WeChat messages. ……

19. ……

20. In any event, I issued a written notice on one of my doctor’s notepads (the “Written Notice”) to the Respondent, and sent it by ordinary post on 26 March 2018 to the Respondent to inform the Respondent to move out of the Premises on or before 26 April 2018. …….

21. ……

22. I also messaged the Respondent on the same day by WeChat to inform her to move out of the Premises on or before 26 April 2018 to ensure she understood the Written Notice. However, I received no reply from the Respondent either by WeChat or letter.

23. ……

Telephone conversation between the Respondent and Shirley

24. Subsequently I learned from the property agent that the Respondent had claimed that she had not received the Written Notice. Since I received no reply from the Respondent all along, I asked Shirley to call the Respondent to inform her about the Written Notice and that she had to vacate the Premises on or before 26 April 2018.

25. I thought it would be easier to communicate between them as they were both immigrants from Mainland China and they both speak fluent Mandarin. Shirley tried to explain the Break Clause to the Respondent and informed the Respondent that the rent of HK$10,500 per month was comparatively cheap.

26. Unfortunately, the Respondent seemed not to want to listen to Shirley and kept on repeating there was a fraud. The Respondent then abruptly ended the call while Shirley was still trying to explain matters.

27. Since I had received no reply from the Respondent and bearing in mind the unpleasant phone call between Shirley and the Respondent, I was more convinced that the Respondent had no intention to move out of the Premises.

28. In the light of such circumstances, I sought legal advice from CLW on reclaiming possession of the Premises.

29. I instructed CLW to issue another written notice (the ‘2^nd Written Notice”) to the Respondent on 20 April 2018 to inform the Respondent to move out of the Premises on or before 27 May 2018. …

30. ……

The bank transfer on 17 April 2018

31. The Respondent has provided documents showing, inter alia, that there was a bank transfer of HK$63,000.00 from her bank account to my bank account on 17 April 2018.

32. In relation to the bank transfer of HK$63,000.00, I wish to clarify the following:

(i) I received no reply to any of my messages or the Written Notice from the Respondent since 11 March 2018;

(ii) The only communication between ourselves and the Respondent since 11 March 2018 was the phone call between Shirley and the Respondent which was initiated by us;

(iii) Nothing had been settled in the phone call between Shirley and the Respondent;

(iv) My intention to exercise the Break Clause to terminate the Tenancy Agreement has remained unchanged since 26 March 2018, the day when I issued the Written Notice. The intention was also communicated to the Respondent by WeChat messages and by the phone call between Shirley and the Respondent.

(v) No promise was made, either orally or in writing, by me to the Respondent that I would not exercise the Break Clause and/or that I was willing to accept any amount of rent. I wish to reiterate that my intention to terminate the Tenancy Agreement has all along been the same, and was clear and unambiguous since 26 March 2018.

(vi) The Respondent never informed me of the bank transfer on 17 April 2018.

(vii) I only became aware of the bank transfer on 26 April 2018, upon receiving the monthly bank statement. This was after the 2^nd Written Notice had been issued. A copy of my relevant monthly bank statement (redacted) is now produced and shown to me marked “KOT-5”.

33. Even if the Respondent might have been under any misapprehension that there was any course of conduct that led her to believe that I promised not to exercise the Break Clause (which is not admitted and strongly denied), I verily believe that the 2^nd Written Notice issued on 20 April 2018 clarifies our position.

34. In relation to the bank transfer dated 17 April 2018 which I only became aware of on 26 April 2018, the sum of HK$63,000.00 was withheld by me solely to cover rent and/or mesne profit respectively incurred between 20 April 2018 and 27 May 2018, and any period after 27 May 2018 until delivery of vacant possession because I suspected that the Respondent would not move out of the Premises by 27 May 2018, the date that the Tenancy Agreement would be terminated pursuant to the 2^nd Written Notice.

35. I would specifically say that it was always my intention to return the balance of this amount of HK$63,000.00 to the Respondent (if any) after deducting amounts owed for rent until 27 May 2018 and thereafter for mesne profits until delivery of vacant possession.

Audio message on 18 April 2018

36. I wish to point out that this audio message sent by me to the Respondent is unclear[1]. I believe it is an audio message sent by mistake which contains no information.

37. I was advised by CLW that the Respondent alleged the audio message was an acknowledgement of the bank transfer. The allegation was without basis. At all material times, I was never informed by the Respondent that there was a bank transfer, nor was I aware of such bank transfer at that time. I can play the audio for the Tribunal to hear at trial.

38. ……

Messages on 22 May 2018 and 23 May 2018

39. In or about late May, as the deadline for the Respondent to move out by 27 May 2018 (“Deadline”) was approaching, and taking into account all the unpleasant dealings between the parties and previous conduct of the Respondent, I nevertheless thought it would be appropriate to remind the Respondent again about the Deadline as stated in the 2^nd Written Notice.

40. Therefore, I sent a message on WeChat on 22 May 2018 to remind her about the Deadline so that she could vacate the Premises accordingly. However, I sent the WeChat message with a wrong date in October due to a mistake on my part.

41. I reiterate that I had no intention to extend the move-out deadline to October. The message I intended to convey to the Respondent was all along unchanged since the 2^nd Written Notice, and more importantly, we had no communication since then. The construction of the message dated 22^nd May 2018 “Remind you that … by 26 Oct 2018” clearly show that I was referring to the 2^nd Written Notice.

42. I am a doctor and I am now 74 years old. I have to focus my mind to take care of my patients. I had not realised the mistake until I surprisingly received a reply from the Respondent by WeChat on the same day, for the first time since 11 March 2018.

43. The Respondent acknowledged my message on 22 May 2018 and asked me to ensure any further legal document be written in Chinese.

44. I then clarified my message of 22 May 2018 and corrected my mistake in a WeChat message on 23 May 2018 in Chinese solely for the convenience of the Respondent.

45. I never intended my mistakenly-sent deadline date to be of any such effect and my mistake was quickly rectified by me.

46. ……

Fraud

47 Lastly, and for completeness, I have never committed any fraud against the Respondent. At the time she signed the Tenancy Agreement, she knew full-well the terms, including the Break Clause, because the terms were explained to her.

……”

9.  The 2^nd Applicant has also prepared a witness statement dated 9 August 2018, the contents of which are more or less the same as that prepared by the 1^st Applicant.

The Respondent’s Witness Statement

10.  The Respondent also filed her witness statement (in Chinese) on 9 August 2018, basically presenting the events in chronological order as follows:

26 March	When the Respondent was in Mainland China, she received WeChat message from the 1st Applicant, saying that: “We would like to inform you we will take back the flat you now staying, for our own use with one month notice. So prepare to move out on or before 26 April. Any question please contact me…” The Respondent said she did not respond to it because it was not a written notice and she believed the Applicants were not recovering the Premises for “for his own use” when they had other premises elsewhere. Rather, the Applicants were aiming at higher rental from the Premises.
5 April	The Respondent returned to Hong Kong towards midnight.
A day in April[2]	The Respondent received phone call from the 2nd Applicant. The phone call was ended not in good terms.
17 April	The Respondent transferred money to the 1st Applicant’s bank account.
18 April	The Respondent received a 3-second voice message which was muffled or inaudible.
End April	The Respondent received a written notice in English from a solicitors’ firm requiring her to move out but she could not understand the legal terms very well[3]. She needed to seek advice.
End April to Early May	The Respondent was too busy to communicate with the Applicants.
13 May	The Respondent returned to Mainland China.
22 May	The Respondent received from the 1st Applicant a message informing her to move out on 26 October. She was very happy that the 1st Applicant had changed his mind probably because he had received her payment. The Respondent indeed replied: “message received thanks …” The Respondent also mentioned she had received a letter from the solicitors and requested future communication in Chinese.
23 May	The 1st Applicant replied in Chinese explaining that the letter from solicitors was requiring the Respondent to move out by 26 May 2018, failing which he would resort to legal action. The Respondent said she was confused by the sudden volte-face of the 1st Applicant. How about the rent?
29 May	The Respondent received a message from the 1st Applicant which was the same as the one she received on 3 March: “As the present market rent of your living flat been over 16 thousand per month I would like to inform you if you continue to live in the flat the new rent will be 16 thousand from mid April 2018. Please confirm us before 11 march 2018.” The Respondent believed this message was wrongly sent.

11.  During the hearing, the Respondent suggested that, inter alia:

(1)  clause 5(c) in Schedule II to the Tenancy Agreement that another 6-month rental was payable in advance on 11 October 2017 was only added after the Tenancy Agreement was stamped;

(2)  the Respondent did receive a phone call from the 1^st Applicant on 16 March 2018, as evidenced by the telephone record as Exhibit R2, asking her whether she would accept the monthly rental of $15,000 or not, that telephone conversation lasting 4’37”;

(3)  the Respondent did not abruptly end the call with the 2^nd Applicant on 16 April. Instead, the Respondent alleged it was the 2^nd Applicant who abruptly ended the call and the Respondent has produced evidence that it was she who tried to call back.

I consider these suggestions serve no useful purposes even if they are true because they add nothing in substance in evidence.

12.  Save from the above, the contents of the parties’ witness statements appear to be no different though regarding the message sent by the 1^st Applicant on 22 May 2018, the Respondent considered the 1^st Applicant had changed his mind while the 1^st Applicant admitted he made a mistake.

Effect of the March 26 Notice

13.  In Tayleur v Wildin (1868) LR 3 Ex 303, Kelly CB stated at 305 that:

“… it is clear that, whether the notice to quit is given by the landlord or the tenant, the party to whom it is given is entitled to insist upon it, and it cannot be withdrawn without the consent of both. If that is so, then the consent of the parties makes a new agreement, and if there is a new agreement there is a new tenancy created to take effect at the expiration of the old tenancy.”

14.  Similarly, in Lai Mai-Yu v The Attorney General [1977] HKLR 382, Trainor J explained further at 390-391 as follows:

“… A notice to quit is not a sentence of death passed on a tenancy; it is an execution and no resuscitation is possible. That being so when the notice to quit was served on the plaintiff his tenancy died though he was permitted to remain in the premises until the 15^th October without being a trespasser on the property. It follows from what I have said that a payment of rent after due service of a valid notice to quit cannot revive the tenancy.”

15.  The 1^st Applicant had on 26 March 2018 purported to terminate the Tenancy Agreement by sending the March 26 Notice (or the Written Notice referred to by the Applicants in their witness statements). Notwithstanding the Respondent said she had not received the March 26 Notice sent by ordinary post, such notice sent by ordinary post is invalid. Firstly, paragraph 22.057 of Woodfall’s Landlord and Tenant states the following:

“A s.25 notice must specify a date of termination,¹ and it must be given not more than twelve nor less than six months before that date,² unless more than six months’ notice would have been required at common law.³ In calculating the period of months, the corresponding date rule is applied.⁴ Under this rule, a period of one month beginning on a particular day ends on the day in the following month with the same number as the day on which the period begins, unless there is no such day, in which case the period ends on the last day of the month.⁵ Thus a period of one month beginning on December 29, would end on January 29, but a period of one month beginning on January 30 would end on the last day of February…”

16.  However, by reference to paragraph 2 of the Practice Direction PD19.2/1:-

“To avoid uncertainty as to the date of service, delivery in the ordinary course of post under the relevant rules of court governing proceedings in the High Court, District Court, lands Tribunal and Family Court, shall be deemed, subject to proof to the contrary, to have been effected:

(a) In the case of registered post, on the fourth working day after posting; and

(b) In the case of ordinary post, on the second working day after posting.”

17.  Thus, the March 26 posted on that day can only be assumed to reach the Respondent on 28 March 2018. Such a notice requiring the Respondent to move out on or before 26 April 2018 failed to give notice “not less than 1 month”.

18.  On the other hand, under section 61 of the Conveyancing and Property Ordinance,

“(3) Any notice required or authorized by this Ordinance to be served shall be sufficiently served if it is left at the last-known place of abode or business in Hong Kong of the mortgagee, mortgagor, or lessee or other person to be served, or, in case of a notice required or authorized to be served on a mortgagor or lessee, is affixed or left for him on the land comprised in the mortgage or lease.

(4) Any notice required or authorized by this Ordinance to be served shall also be sufficiently served if it is sent by post.

19.  This section only gives examples when the notice can be regarded as sufficiently served; it does not exclude other means of service. I accept that the notice can be served, for example, by electronic means like WeChat. See also Knight v Goulandris [2018] EWCA Civ 237; [2018] PLSCS 32.

20.  In her witness statement, the Respondent acknowledged receipt of the 1^st Applicant’s WeChat on the same day when it was sent, ie 26 March 2018. The notice was not given “less than” one month before the termination date of 26 April 2018.

21.  That the Respondent considers the WeChat notice is not “written notice” is misconceived. According to section 3 of the Interpretation and General Clauses Ordinance, however, “writing” includes writing, printing, lithography, photography, typewriting and any other mode of representing words in a visible form.

22.  The WeChat notice sent by the 1^st Applicant represented words in a visible form and reads as follows:

“We would like to inform you we will take back the flat you now staying, for our own use, with one month notice. So prepare to move out on or before 26 April. Any question please contact me. From owners of Flat 06,9/F, Century Link~Tower6B.”

23.  It is correct that the WeChat notice did not state that the Applicants were exercising the Break Clause but in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749, it was held by the majority of the House of Lords that the construction of such notices ought to be approached objectively, and the question was how a reasonable recipient would have understood them, bearing in mind their context.  The test for the validity of a notice to terminate a lease stated by Goulding J in Carradine Properties Ltd v Aslam [1976] 1 WLR 442 at 444 was approved: “Is the notice quite clear to a reasonable tenant reading it?  Is it plain that he cannot be misled by it?”

24.  In the present case, the Respondent understood it was so served pursuant to the Break Clause because she challenged it not being a “written notice”. The WeChat message also was not the only message sent by the 1^st Applicant; there was a series of preceding WeChat messages manifesting the Applicants’ intention that they wanted a higher rent after the fixed term or the Respondent had to move. Similarly, there was also a series of contemporary WeChat messages between the Respondent and the estate agent talking about the same matter[4]. Some of the estate agent’s messages read as follows:

「他要我再跟你確認， 因為是我介紹你們認識你也是我的客人」

「你現在是同意新租金$15000 再租嗎？」

「因為如果不再租住須要1 個月前通知的」

．．．．．．

「一年死約後已經可以不租」

．．．．．．

「現在1年死約已經快完了， 所以就要再談」

25.  I therefore rule that the WeChat message on 26 March 2018 constituted good service pursuant to the Break Clause to terminate the Tenancy Agreement on 26 April 2018.

Effect of the April 20 Notice

26.  On the second page of the April 20 Notice sent by CLW, ie the 2^nd Written Notice as referred to by the Applicants in their witness statements, it reads as follows:

“We are further instructed that our clients had previously given you notice dated 26^th March 2018 (“the Notice”) of our clients’ exercise of the Break Clause requiring you to move out of the Premises on or before 26^th April 2018. However, our clients have been given to understand that you have claimed that you had not received the Notice.

In the circumstances, and without prejudice to any of our clients’ rights under the Tenancy Agreement, we are instructed:-

1.  to inform you that notwithstanding the fact that the Notice is legally valid and binding, our clients will not rely on the Notice, and

2.  to give you formal notice pursuant to the provisions of the Break Clause, which we hereby formally do on our clients’ behalf, that our clients hereby exercise their option to terminate the Tenancy Agreement.

In the circumstances, you are hereby formally requested to both (a) vacate the Premises; and (b) deliver vacant possession of the Premises; to our clients on or before 27^th May 2018….”

27.  Therefore, even if I am wrong on the validity of the March 26 WeChat Notice, the Applicants can rely on this April 20 Notice to terminate the Tenancy Agreement pursuant to the Break Clause.

28.  The only defence against this April 20 Notice is perhaps the Respondent having already deposited another 6-month rental in the sum of $63,000 into the 1^st Applicant’s bank account on 17 April 2018 ie 3 days before the April 20 Notice. In that regard, I accept the evidence of the 1^st Applicant that he only became aware of the bank transfer on 26 April 2018, upon receiving the monthly bank statement, ie KOT-5.

29.  The Respondent submits that the Applicants have been keeping the $63,000 without informing her how and when to return. In Lai Mai-Yu v The Attorney General, supra, Trainor J said at 391 the following:

“What is the effect of Demand and Acceptance of Rent?

The answer to that question depends entirely on the intention of the parties. If the parties were in agreement that a new contract of tenancy should commence then a new relationship of landlord and tenant would arise. But a letting of premises does not differ from any other contract, and the parties must be ad idem. In this case it is clear they never were ad idem with regard to a new tenancy. The letters from the District Officer to the plaintiff made clear what the defendant’s view was, and the evidence before me from the witnesses for the defendant, which I accept, satisfies me that the demand for and acceptance of the rent was a mistake.”

30.  By reference to the series of WeChat messages prior to 17 April 2018, particularly the one cited above on 26 March 2018, I am of the opinion that there was no agreement between the Applicants and the Respondent; the acceptance, if any, of the 6-month rental deposited by the Respondent was a mistake.

31.  There was neither any estoppel by convention that may prevent the Applicants from enforcing the April 20 Notice. As stated by Ribeiro PJ in Unruh v Seeberger (2007) 10 HKCFAR 31 (at paragraphs 133 and 150), three elements must be satisfied for an estoppel by convention to be raised:

“133. As the statements of principle make clear, the parties must enter into some legal relationship on the basis of an assumption that is shared by or common to them both. The commonality of the assumption is what marks out estoppel by convention as a distinct form of estoppel.

…

150. Two further elements must be established for constituting an estoppel by convention. First, there must be an attempt by one party to depart from the common assumption which departure would be unjust because of ‘the part taken by him in occasioning its adoption by the other party’. Secondly, the other party would suffer detriment arising out of his having entered into the relevant transaction on the basis of the common assumption ‘if the opposite party were afterwards allowed to set up right against him inconsistent with the assumption’ when abandoning the common assumption.” (emphasis added)

32.  Obviously, there was no common or shared assumption between the Applicants and the Respondent. I accept the evidence of the 1^st Applicant that the WeChat he sent on 22 May 2018, stating that the Respondent had to move out by 26 October 2018 was a mistake. As held by the Court of Appeal in Ngai Ngok Pang & Another v Lee Syn Yuk, Michelle, CACV 96/2013 (unreported, 6 November 2014) at paragraph 41:

“本案的業主和租客，從沒有就新租賃存有一致的意見，業主在錯誤下追收租金，不能被視為有給予新租賃的意圖。”

33.  There cannot be any promissory estoppel or proprietary estoppel because, as submitted by Mr Richard A Sousa (“Mr Sousa”) of CLW who acted on behalf of the Applicants, the Respondent had not been induced to changed her position or suffered any detriment in reliance on, for instance, the WeChat message on 22 May 2018. The Respondent just remained occupying the Premises and did not bother to check out her “confusion” as alleged.

Fraud

34.  In her Notice of Opposition, the Respondent alleged she was cheated into signing the Tenancy Agreement. In this regard, Mr Sousa cited paragraphs 84-85 in Ming Shiu Chung & Others v Ming Shiu Sum & Other (2006) 9 HKCFAR 334 at 361 & 362 which stated that:

“Reliance is universally placed on signatures appended to documents by persons of full age and understanding as signifying the signatory’s assent or adherence to what that document states.”

35.  Mr Sousa submitted and I accept that the Respondent is of full age and understanding and should be bound by her act of signature of the Tenancy Agreement.

36.  Indeed, it was the Respondent’s case that she was misled by the estate agent who said that “all tenancy agreements in Hong Kong were for a term of 1 year fixed plus another term of 1 year open”[5].

37.  Not to mention that the general practice of estate agents in Hong Kong is that they are middlemen not representing either party. In Derry v Peek (1889) 14 App Cas 337 at 374, Lord Herschell pointed out that the representor will be fraudulent only if he made the statement “recklessly, careless whether it be true or false”. Nevertheless, he was at pains to emphasise that negligence is not sufficient for deceit, since recklessness involves not caring whether the statement is true. The expression “not caring” had nothing to do with not taking care, it meant not caring in one’s own heart and conscience whether the statement is true or false.  It is well established that to establish common law deceit, a degree of dishonesty or moral turpitude has to be present.  In this context, the moral obliquity consists of an indifference to the truth, a wilful disregard of the importance of the truth (Joliffe v Baker (1883) 11 QBD 255 at 275; Angus v Clifford [1891] 2 Ch 449 at 471; Le Lievre and Dennes v Gould [1893] 1 QB 491 at 501; Thomas Witter Ltd v TBP Industries Ltd [1996] 2 All ER 573 at 587g to h; Lee Yuk Shing v Dianoor International Limited, CACV 185/2015 (unreported, dated 23 May 2016)). The estate agent was not called by the Respondent for examination.

38.  With respect to the Respondent, inferences of fraud or serious misconduct were not to be reached by conjecture nor on a mere balance of probabilities. According to Re H  (Minors) [1996] AC 563 and HKSAR v Lee Ming Tee [2003] 6 HKCFAR 336, the serious allegation of fraud must be proved by evidence of a commensurate cogency and taking into account evidence of the indentations

Conclusion

39.  In conclusion, I find the March 26 Notice (via WeChat) is valid and binding on the Respondent. Even if I am wrong, the April 20 Notice is valid and binding on the Respondent whereby the Tenancy Agreement has been terminated on 27 May 2018 the latest but the Respondent has not delivered vacant possession of the Premises to the Applicants.

Costs

40.  As costs follow the event, I also order the Respondent do pay the Applicants’ costs of this application.  In this regard, Mr Sousa has produced a calculation detailing his claim in the sum of $98,172. Despite the length of the proceedings and the complexity of this case, I consider the number of hours claimed for the preparation of Statement of Costs excessive. The number of hours claimed by Mr Sousa for preparing the documents and for hearings appears to be double counting or too excessive. Therefore, I summarily assess the costs of this application to be payable to the applicant in the sum of $50,000.

Order

41.  I make the order as follows:

(1)  The Respondent do deliver vacant possession of the Premises to the Applicants;

(2)  Execution of the order for possession be stayed until 31 August 2018;

(3)  The Respondent do pay the Applicants mesne profits at the rate of $10,500 per month from 26 April 2018 until delivery up of vacant possession, subject to the credit on the money deposited into the 1^st Applicant’s bank account on 17 April 2018 in the sum of $63,000;

(4)  The Respondent do pay the Applicants' costs of this application in the sum of $50,000.