TSUI YEE CHONG v. CHUNG KIN MING

LDPD 986/2004

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Part IV Possession Application No. LDPD 986 of 2004

_________________

_________________

_________________

J U D G M E N T

_________________

The Application

1. The Applicant applied on 19th April 2004 for taking back the possession of his property at Flat B, 8th Floor, Fa Yuen Mansion, No.213 Fa Yuen Street, Kowloon. This property (hereinafter known as the "Subject Premises") was leased to the Respondent for a term of two years from 1st August 2001and thereafter on monthly term. The application was filed pursuant to s. 117 of the Landlord and Tenant (Consolidation) Ordinance, Cap 7. The grounds of application are: -

(a) The Respondent habitually failed to pay rent on the due date stipulated under the tenancy agreement. His failure to pay the rent punctually is a breach of the tenancy condition, which is a cause of forfeiture of the tenancy.

(b) By not paying the rent on time, the Respondent has caused unnecessary annoyance, inconvenience or disturbance to the Applicant. The Respondent's such behaviour continued after a warning in writing was given on 22nd April 2002.

The Background

2. The Applicant alleged that the Respondent had habitually failed to pay rent on the due day since the commencement of the tenancy in July 2001. The rent for the months from 1st January 2002 to 30th April 2002 remained outstanding in April 2002. A letter (see Page 27 of Exhibit AR1) was sent on the 22nd April 2002 by the Applicant's solicitor, demanding the payment within 7 days and at the same time warning the Respondent of the Applicant's entitlement to take legal action against the Respondent, including inter alia the action to recover the possession of the Subject Premises.

3. Despite this warning letter, the Respondent did not make correction to such habit. The Applicant alleged that he continued to pay the rent late. The Respondent, nevertheless, denied that he had received the warning letter by post or by hand from the Applicant. He even denied that he had ever initialled on the copy (of warning letter) retained by the Applicant as the clerk of Messrs M. K. Lam & Co. said for acknowledging its (the warning letter) receipt.

To substantiate the Respondent's manner of persistently paying the rent late, the Applicant set out in details in his application the past legal action taken in the District Court. These legal actions sought to recover the arrears of rent are the District Court Civil Action Nos. DCCJ3612 of 2002, DCCJ2183 of 2003, and DCCJ5527 of 2003. In all these legal proceedings, the Court's decisions were in favour of the Applicant.

4. On 24th December 2003, the Applicant served on the Respondent the CR101 Notice (see Page 24 of Exhibit AR1) notifying the Respondent the termination of the Respondent's tenancy on 31st March 2004. In the same Notice, the Applicant also stated his objection to any application to the Lands Tribunal for the grant of a new tenancy with the above grounds of opposition given.

5. The Respondent did reply by the CR102 Notice (see Page 26 of Exhibit AR1) on 2nd January 2004 informing the Applicant his intention to apply to the Lands Tribunal for a new tenancy. He, nevertheless, has never lodged the application to date. He only requested during the session for the subject application the grant of a new tenancy at the rent of $5,000 per month.

The Arguments of Counsel/Solicitor

6. The Respondent's solicitor considered the Applicant's grounds of opposition invalid. The Respondent paid back on time the sums of money ordered by the District Court in the above three legal proceedings. As at the date of the subject application, the rent was also paid up to date. The so-called annoyance, inconvenience or disturbance envisaged by S.119E (1)(d) did not therefore continue to exist after the payments were made. To support this argument, he cited the decision in Abdoolally Ebrahim & Co., (H.K.) Ltd. v Formalex Limited, CACV378 of 2000. Moreover, he considered that the warning letter, which in his view is a mere reminder for rent payment, failed to meet the requirements laid down in the judgement of Court of Appeal for Ho Siu-kau v Wing Hong Investment Co. Ltd. [CACV000135/1980] The Court of Appeal so ruled that the warning must be more than just a demand for rent with threats of action to recover that rent. It must convey the consequence of continuing to commit the same and such inconvenience or disturbance did continue after the issue of the written warning.

7. The Applicant's counsel disagreed to the Respondent's view and requested the Tribunal to grant the order allowing the Applicant to take back the possession of the Subject Premises. His arguments were that the Respondent habitually failed to pay rent by the due date. That led to the Applicant's warning letter dated 22nd April 2002. The Respondent's such behaviour, as defined by S.119E (3), constituted a breach of S.119E (1)(d) of the Landlord and Tenant (Consolidation) Ordinance, Cap.7. By virtue of the legal proceedings at the District Court and the Court's decisions subsequent to the warning letter, it was evident that the Respondent failed to abide by the Applicant's written warning and therefore the annoyance, inconvenience or disturbance to the Applicant continued. The continuance of such behaviour coupled with the warning letter, which had specifically set out the consequence of failing to comply with the warning, in the counsel's view, met the requirements for possession laid down in the judgement of Court of Appeal in the case cited by the Respondent's solicitor.

Tribunal's Views/Conclusion

8. The Tribunal is not convinced that the Respondent did not receive the letter dated 22nd April 2002. There is no reason to doubt that the clerk of Messrs M. K. Lam & Co. purposely avoid to deliver the letter by hand to the Respondent. The Applicant's intention to recover the arrears but not possession was very obvious. He had taken no action of possession in parallel. Non-service of the letter to the Respondent is against the Applicant's interest and not in the interest of Messrs M.K. Lam & Co. and the clerk himself, too. It is noticed that the letter was also sent by post.

9. As to the issue of whether the annoyance, inconvenience or disturbance to the Applicant continued after the service of the warning letter, the Tribunal disagrees to the Respondent's view. The Respondent' solicitor opined that when the payments were made on time prescribed by the District Court, the annoyance etc. to the Applicant discontinued. He seemed to be suggesting that the annoyance etc. must sustain and be non-stopping up till the date of application in order to qualify for the proviso in S.119E (1)(d) that the annoyance etc. had continued after a warning in writing had been served. This opinion is weird and cannot be accepted. The Tribunal considers that the recurrence of the Respondent's failure to pay rent on the due day after the service of the warning letter suffices to satisfy the proviso.

10. The Tribunal, however, agrees that the Applicant's warning letter is only a reminder to the Respondent. It reminded the Respondent of the Applicant's entitlement to take legal action to recover the possession of the Subject Premises. It did not spell out the Applicant's intention to take back possession should the Respondent default. Whilst S.119E (1)(d) can be invoked to object the grant of a new tenancy when issuing the CR101 Notice, it should only apply as a ground for possession when an application for a new tenancy has been lodged with the Tribunal. In the present case, no such application from the Respondent has ever been lodged as confirmed from the two parties in open court. The CR102 Notice was filled out/sent on 2nd January 2004. Apparently, the deadline for submission of the new tenancy application has lapsed as a matter of the Landlord and Tenant (Consolidation) Ordinance, Cap.7. Upon enquiry as to why this could not be a ground for possession, the Applicant's counsel made no submission.

11. The Applicant fails in his case on two accounts. Firstly, the warning letter fails to convey to the Respondent the consequence of rent in arrears. The Applicant must convey to the Respondent his intention to take back possession of the Subject Premises should the same breach happen again. Secondly, it is pre-mature to apply for an order for possession invoking S.119E (1)(d) when the application from the Respondent for a new tenancy has not been lodged.

12. The Respondent's request in court for a new tenancy at $5,000 per month is also not entertained. Not only the request was not made on the form prescribed under the Lands Tribunal Ordinance, Cap. 17, but also the deadline for submission has lapsed. The Respondent has not given any reason for not lodging the application within the prescribed timing.

Costs

13. The Respondent's solicitor requested that a nisi order on costs for 14 days be given and the Applicant's counsel requested that the grant of counsel certificate and the costs calculated on District Scale be considered.

Orders

14. The application on 19th April 2004 is dismissed. A nisi order on cost fitted for counsel and to be made absolute in 14 days is hereby granted in favour of the Respondent. The amount of costs shall be taxed on District Court Scale if not agreed.