WU WAH MING AND ANOTHER v. VILLANUEVA, KRISTINE TORRES

LDPD 1792/2015

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO. LDPD 1792 OF 2015

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DECISION
(APPLICATION FOR LEAVE TO APPEAL OUT OF TIME)
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1.  This is an interlocutory application taken out by the respondent on 9 October 2015 seeking (i) leave to appeal out of time against my Judgment made on 9 September 2015 and (ii) stay the execution of possession of premises pending appeal. 

Background

2.  By a tenancy agreement dated 3 November 2013, the 1^st and 2^nd applicants collectively referred to as the landlord let to the respondent as the tenant the premises at Flat A on 16/F, Wing lee Building, Nos 18-24 Kwai Heung Street, Hong Kong (“the Premises”) for a term of 2 years from 12 November 2013 to 11 November 2015 at a monthly rent of $9,000[1] (“the tenancy agreement”). 

3.  By clause 1 of the tenancy agreement, if the tenant fails to pay the rent within 7 days from the due date, the landlord shall have right to institute appropriate action to recover the rent and all costs, expenses and other outgoings so incurred by the landlord in relation to such action shall be a debt owed by the tenant to the landlord and shall be recoverable in full by the landlord. At the “Remarks” of the tenancy agreement, the respondent agreed to pay the monthly rent to the landlord’s HSBC bank account as specified in the tenancy agreement.

4.  In the Notice of Application (Form 22) filed to the Tribunal on 18 August 2015, the applicants applied for recovery of possession of the Premises and rent as the respondent has failed to pay rent from 12 June 2015, and applied for order for mesne profits to the date of delivery of vacant possession of the Premises and costs. 

5.  In this Notice of Application, the applicants also referred to an earlier application LDPD 836 of 2015 made by the applicants against the same respondent also chasing for rental in arrears since 12 February 2015. On 28 May 2015, after hearing the submissions by the parties in that application, I ordered the respondent to pay the applicants the arrears of rent at the rate of $9,000 per month from February 2015 until delivery up of vacant possession of the Premises subject to a relief pursuant to section 21F of the High Court Ordinance which expired on 10 June 2015 (“the relief expiration date”). That decision or order was not appealed by the respondent.

The Opposition

6.  Going back to the present application, the respondent filed a Notice of Opposition on 24 August 2015 basically on the ground that he had on 19 June 2015 (ie after the relief expiration date) already paid $45,000 into the applicant’s bank account pursuant to my order of 28 May 2015 in LDPD 836 of 2015, covering rental from 12 February 2015 to 11 July 2015, ie including the rental from 12 June 2015 to 11 July 2015[2].

7.  However, in this Notice of Opposition, the respondent added that he had reviewed his payment record and found a mistake in LDPD 836 of 2015 when he had already paid the rental for the month 12 February 2015 to 11 March 2015 but the applicants had wrongly claimed it was in arrears. Therefore, taking that into consideration, as at the date of the present application on 18 August 2015, he should have been regarded as having paid the rental up to and including 11 August 2015.

Judgment Made on 9 September 2015

8.  When the hearing of the present application took place before me on 9 September 2015, the applicants conceded the rental in arrears should be from 12 July 2015 instead of 12 June 2015 and subject to this correction, their application was still valid.

9.  Although the issue on whether the rental for the month 12 February 2015 to 11 March 2015 had been decided by me on 28 May 2015 and the respondent should have been estopped from disputing it again, I allowed a short adjournment (of 15 minutes) to enable the parties to work out the actual situation and difference, if any, on the rental in arrears. Unfortunately, that did not work out.

10.  When the hearing resumed after 21 minutes, I then requested the applicants to produce their HSBC account passbook (again[3]) as evidence in support of their claim. On the other hand, the respondent could not produce any evidence in support of his alleged mistake as regards the payment of the rental for the month 12 February 2015 to 11 March 2015 save for certain pervious money deposit/transfer receipts in late 2014 or January 2015. These latter payments were challenged by Madam Hong Ion Ha both for the 1^st applicant and herself as 2^nd applicant that they had already been taken into account in determining the respondent’s rental in arrears.  

11.  Based on the bank passbook and the receipts, therefore, I worked out the following:

Payment Due		Rental	Payment date	Payment	Outstanding
from	to
12-Nov-13	11-Dec-13	$9,000	Payment on Agreement	$9,000	$0
12-Dec-13	11-Jan-14	$9,000	17-Dec-13	$9,000	$0
12-Jan-14	11-Feb-14	$9,000	14-Jan-14	$9,000	$0
12-Feb-14	11-Mar-14	$9,000	04-Mar-14	$9,000	$0
12-Mar-14	11-Apr-14	$9,000	01-Apr-14	$9,000	$0
12-Apr-14	11-May-14	$9,000	02-May-14	$9,000	$0
12-May-14	11-Jun-14	$9,000	07-Jun-14	$9,000	$0
12-Jun-14	11-Jul-14	$9,000	10-Jul-14	$9,000	$0
12-Jul-14	11-Aug-14	$9,000	04-Aug-14	$9,000	$0
12-Aug-14	11-Sep-14	$9,000	01-Sep-14	$9,000	$0
12-Sep-14	11-Oct-14	$9,000	08-Oct-14	$9,000	$0
12-Oct-14	11-Nov-14	$9,000	09-Nov-14	$9,000	$0
12-Nov-14	11-Dec-14	$9,000	12-Jan-15	$27,000	-$18,000
12-Dec-14	11-Jan-15	$9,000		0	-$9,000
12-Jan-15	11-Feb-15	$9,000		0	$0
12-Feb-15	11-Mar-15	$9,000		0	$9,000
12-Mar-15	11-Apr-15	$9,000		0	$18,000
12-Apr-15	11-May-15	$9,000		0	$27,000
12-May-15	11-Jun-15	$9,000		0	$36,000
12-Jun-15	11-Jul-15	$9,000	19-Jun-15	$45,000	$0
12-Jul-15	11-Aug-15	$9,000	Outstanding		$9,000
12-Aug-15	11-Sep-15	$9,000	Outstanding		$18,000
12-Sep-15	11-Oct-15	$9,000	Outstanding		$27,000

And again the respondent could proffer no evidence to prove otherwise.

12.  Having heard the submissions by the parties therefore I made the Judgment as follows :   

(1) The respondent do deliver vacant possession of the Premises to the applicant;

(2) The respondent do pay the applicants arrears of rent/mesne profits at the rate of $9,000 per month from the 12 July 2015 until delivery up of vacant possession;

(3) The respondent do pay the applicants the costs of this Application which is summarily assessed at $365.

Respondent’s Interlocutory Application

13.  In the respondent’s interlocutory application filed on 9 October 2015, he attached an affidavit stating:

“The law was not well applied, as the basic rule and legal concept were totally neglected as the application was issued while the rent was not overdue which was proved by the declaration of the Landlord in the last court hearing and for strange the case was not rejected although the application form is the cornerstone of any case as basic legal concept. Once the application of the filed case is not in the legal form the case must be rejected.

The decision to terminate the tenancy agreement was not legal as it was based on insufficient evidenced (sic) depending only on reviewing the passbook of the Landlord while all official authority never consider such evidence and only consider a bank confirmation letter signed and sealed by the two bank officers.

The right of defense of the respondent was totally neglected and breached, as the respondent was not allowed to have a chance to review with her auditor and bank officer of the exact transferred payment since the beginning of the tenancy agreement specially after the respondent has discovered that there was false claimed declared by the Landlord which give (sic) the respondent the full rights to do such revision.

The case was managed under illegal and unofficial circumstances by holding the court for 15 minute (sic) according to the Judge instruction to allow both parties discuss the due payment after the declaration of the Landlord about the “False Claimed” in the application during which the Landlord kept “insulting and threatening the respondent by word and physical action recorded by the court camera which is considered an offense and severe discrimination .….

The most illegal decision after all the above mentioned circumstances the Landlord was authorised to make decision about the termination of the contract which adds more discrepancies, unfairness to give such legal position to the Landlord based on illegal false claimed application.

There was mis-evaluation of the fact that the respondent was confused about the due payment by the false claimed (sic) of the landlord and for that reason the respondent hold (sic) the rent payment till reviewing and clearance of the due payment with the landlord which is a usual response and never considered as a breaching of the tenancy agreement.”

14.  The hearing of this interlocutory application took place on 20 October 2015 and the respondent provided no additional grounds in support of his application.

Leave to Appeal

15.  Section 11AA (6) of the Lands Tribunal Ordinance provides that:

“Leave to appeal shall not be granted unless the Tribunal, the Court of Appeal or the registrar hearing the application for leave is satisfied that –

(a) the appeal has a reasonable prospect of success; or

(b) there is some other reason in the interests of justice why the appeal should be heard.”

Mistake in the Application Form

16.  There are no prescribed rules or forms for proceedings for an order for possession under the common law for the non-payment of rent. Section 10(5)(a) of the Lands Tribunal Ordinance empowers the President of the Lands Tribunal to give Directions as to the manner and form in which proceedings shall be conducted. For instance, the President of the Lands Tribunal has issued a Direction to apply the rules 68, rule 69 and rule 70 of the Lands Tribunal Rules together with Form 22 to such cases. Further,  Direction No. 4 issued on 1 July 1986 stipulates that:

“presiding officers should not regard Notices as in the nature of pleadings by which parties are bound, but as an indication of the issues which are likely to be raised. The remedy, if the documents filed by the party are so incomplete or misleading as to prejudice the other party, is to adjourn, not to dismiss the claim”.

17.  The effect of this President’s Direction is that for proceedings at the Lands Tribunal, parties are not bound by their pleadings and the claim should not be dismissed just on a pleading point.

18.  It is noted that the applicants stated clearly in their Form 22 that they are:

(i) asking for recovery of possession of the Premises; and

(ii) payment of outstanding rental and/or mesne profits.

19.  While it is true that the applicants conceded at the beginning of the hearing on 9 September 2015 that the rental in arrears should be from 12 July 2015 instead of 12 June 2015 as stated in the Form 22, this does not render their application invalid. On a fair reading of the application form filled up by the applicants, one will not have any difficulty to understand the alleged cause of action and the material facts, namely non-payment of rent giving rise to a right to forfeiture. The respondent had the opportunity to address this issue and he would not be prejudiced.

20.  This Form 22 was particularly valid when it was found by me in the hearing on 9 September 2015 that the respondent had not paid rent since 12 July 2015.

21.  The alleged ground that “the application of the filed case is not in the legal form” is totally without merit and misconceived

Evidence based on Passbook

22.  The respondent can proffer no authorities to support his allegation that I could not review the passbook of the applicants to see if the rental were in arrears. In the hearing on 20 October 2015, the respondent alleged it was market practice by reason of his business experience. I am not persuaded. Neither had I any reason or evidence to doubt the authenticity of the bank passbook produced by the applicants on 9 September 2015. When I made my Judgment then, I had particularly regarded to the “Remarks” of the tenancy agreement which stated the respondent agreed to pay the monthly rent to the landlord’s HSBC bank account.

23.  In addition, section 10(6) of the Lands Tribunal Ordinance empowers the Tribunal to admit in evidence any statement, document, information or matter, whether or not it would otherwise be admissible in evidence and attach such weight to it as may be appropriate in the circumstances.

Chance to review with auditor and bank officer of the exact transferred payment

24.  As ruled by the Court of Appeal in永華電子實業有限公司 v陳樹雄經營三雄行, HCMP 1951 of 2012 (unreported, dated 16 November 2012), the parties to the proceedings should brought along all related documents in support of their corresponding cases in attending the hearing.

25.  It is also noted that up to the hearing of this interlocutory application, the respondent has not been able to produce any evidence that may rebut the correctness of the landlord’s bank passbook or my finding on 9 September 2015.

Adjournment for 15 minutes

26.  There are no hard and fast rules regarding how proceedings in the tribunal should be conducted. On the other hand, after the Civil Justice Reform, one of the underlying objectives of the High Court Rules which are also applicable to Lands Tribunal proceedings is to facilitate settlement of disputes[4]. In fact the court is under a duty to further these underlying objectives by, inter alia, helping the parties to settle the whole or part of the case[5]. In order to achieve the underlying objectives the court is given a bundle of powers including adjournment of a hearing.

27.  It was in light of the respondent’s argument of having no rental in arrears as at the date of the Notice of Application and the concession of the applicants of a mistake in the Notice of Application as regards the actual rental in arrears that I adjourned the hearing for 15 minutes (which turned out to some 20 minutes) with a view that the parties could resolve their discrepancy and if possible their dispute totally.

28.  The appellate court has made it plain and clear that when a judge orders the adoption of a particular course of conduct for the trial or future conduct of a case in the interests of justice, his decision is not to be interfered with by an appellate court unless it is plainly wrong: see Korea Building Materials Trading Corp. v Hong Kong Dongil Trading Co. Ltd, CACV 198 of 1993 (unreported, dated 24 February 1994). This approach is very likely to survive the Civil Justice Reform: see §25/1A/14 of Hong Kong Civil Procedure, 2015.

29.  The same principles, in the tribunal’s judgment, are equally applicable when considering whether to allow adjournments. This tribunal cannot see how the aforesaid case management direction can be regarded as plainly wrong.

Landlord’s decision on Termination of the Contract

30.  The applicants’ intention to recover possession of the Premises on the ground of the respondent’s failure to pay rent was manifestly clear from the Notice of Application.  Their last attempt or threat to terminate the tenancy agreement in LDPD 836 of 2015 was only frustrated by the statutory relief under section 21F(3) of the High Court Ordinance. However, under section 21F(1A) of the Ordinance, “(w)here during the term of a lease the application of this section has prevented a lessor from enforcing against a lessee a right mentioned in subsection (1), then during that term this section shall not be applicable again to prevent the lessor from exercising that right against the lessee unless the Court is satisfied that there is good cause why this section should apply in favour of the lessee.”

31.  On the other hand, I noted that the payment of $45,000 by the respondent pursuant to my order on 28 May 2015 in LDPD 836 of 2015 was made only on 19 June 2015 ie after the relief expiration date and the costs ordered against the respondent in the sum of $365 remained unpaid. Nevertheless, the applicants had not applied for the writ of possession as a result thereof.

32.  While I did not find any “good cause” why this section 21F(3) of the High Court Ordinance should apply in favour of the lessee for a second time, it was perfectly correct for me to ask the applicants to reconsider their intention or application.

Respondent’s confusion about Due Payment by the False Claim of the Landlord

33.  As stated by the respondent in his Notice of Opposition dated 24 August 2015, upon receiving the Notice of Application, he had reviewed his payment record and found a mistake in LDPD 836 of 2015 when he had already paid the rental for the month 12 February 2015 to 11 March 2015 but the applicants had wrongly said it was in arrears. He should have ample opportunity to review his stance well before the hearing took place on 9 September 2015 but rental was still in arrears on that day.

34.  Needless to say, the tribunal does not consider the appeal on this ground has a reasonable prospect of success, not to mention the issue estoppel that may also apply as regards the historical payments considered in LDPD 836 of 2015.

Summary of Discussions

35.  After considering what the respondent presented in his affirmation supporting his interlocutory application, and after hearing what the respondent supplemented in his oral evidence/submission, I decide that the respondent’s appeal has no reasonable prospect of success, and the respondent fails to satisfy me that there is some other reason “in the interests of justice” why the appeal should be heard. 

36.  This is a simple application for recovery of possession and payment of outstanding rent/mesne profit and costs. Since I do not allow the respondent the leave to appeal out of time, the consequential application by the respondent for stay of execution of possession of the premises pending appeal is therefore refused.

Conclusion

37.  The interlocutory application by the respondent to seek leave to appeal out of time and stay the execution of the order for possession are both dismissed.

Costs

38.  The general rule is that costs should follow the event and the applicant seeks costs. Accordingly, I order that the respondent should pay the applicant the costs of this Application which is summarily assessed at $200.

[1]  The tenancy agreement was subject to a break clause exercisable by either party serving not less than 1 month’s written notice after the expiry of the 12^th month of the term of tenancy.

[2] The costs of LDPD 836 of 2015 ordered against the respondent in the sum of $365 remain unpaid.

[3] The applicants did produce their HSBC account passbook as evidence in LDPD 836 of 2015.

[4] RHC O.1A, rule 1(e).

[5] RHC O.1A, rule 4(f).