TINPOLY REALTY LIMITED AND ANOTHER v. THE ASSOCIATED BUSINESS COMPLEX(a firm)

1985 No. A275

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. This is a very unfortunate case. I am going to give a very quick judgment now because quite enough money has been, I have to say, wasted in this litigation already I want to save tomorrow's costs. The defendants were tenants of the plaintiffs under a Tenancy' Agreement of 20th June 1983. The defendants were involved in the construction business and got into financial trouble. They stopped paying rent in December 1983. They did not start paying the management charges save for the initial deposit. They tried to negotiate to a surrender in mid summer of 1984. That did not work. They were offered not unreasonable terms by the landlord, but they have not got anything with which to pay. I think it might have been wiser at that stage if they have said so in terms:- "had you better have the premises back and you had better get your money by instalment". That would have saved a lot of time and trouble for every body. They appeared to make 2 oral agreements, and then simply could not come up  with the money to settle. So the thing then proceed through to distress with nothing being paid by way of rent at all.

2. The Distress Warrant was obtained from the Tsuen Wan District Court on 24th September following which the bailiff goes along to the premises with, I take it, a representative of the plaintiffs' solicitors, first on 30th October and the second on 5th November. Of course there was no one there because as every body knew the premises were being used by the defendants as a warehouse. Their business address started off in Sincere Building, then later moved to another address in Lockhart Road, But for reasons which I do not really start to understand, nothing was said go them at this stage at all. The belief was that if everything was said, then they would come along and take everything away. That seems to be slightly unreal when the warrant for distresses had already been issued. The matter could have been presented to them in this way: you can either come and help us in or we will go to the Court and get an order to break in. I do not believe that they would have been stupid in these circumstances. But as it was, the pantomine was gone through of going to the Court and saying : "There is no one there: Please allow us to break in." Presented with that information, of course, the Court says "you can break in." No one; the bailiff or the Court was even told: "of course, they are not there. We know where we can get hold of them. We know where we can get the key. "

3. That set things off, perhaps on the wrong foot as far as the defendants were concerned. Again, they tried to buy time on terms, and again not unreasonable terms. They were going to pay $15,000 and were given 1 day, 2 days and 3 days to find it. They all passed and some really not very honest excuses seem to have been given. By this time the landlord had lost all patience, understandably that they were being fobbed off and they said go ahead with the sale. At last minute, the defendants go to solicitors in the hope of buying more time. But a solicitor in those circumstances cannot work miracles.

4. He tried to work miracles by writing a rather offensive letter a few days later, where he took a whole series of bad points, as far as I can see, about the legality on this distress. I can see nothing illegal in this distress at all. The whole basis and burden of the complaint was that no notice was given. That is not a legal requirement of distress and never has he been. There was no substance in any of the other points at all. The only possible substance might have been in the criticisms of the way in which the auction was conducted. But when you look at the time factors and everything else, there is no way in which you can criticize that either. So there never has been any sort of defence to this claim. I think it is very unfortunate that a lot of money has been spent arguing this case before me for 2 days. That is why I am doing my best to make sure that the second is the last day.

5. The only real defence seems to me to be that the defendants are entitled to credit for the deposits that they paid. The first deposit they got a receipt for from a different landlord. But that does not matter because this is something which provided for under the Tenancy Agreement. The Tenancy Agreement also requires them by covenant to pay the sums payable under the deed of mutual covenant. The deposits were in fact paid by way of deposit under the deed of mutual covenant. It is quite unreal to suggest that the landlord cannot obtain the benefit of that, in respect of this indebtedness. That is another piece of stupidity, as far as I can see, which has simply led to on enormous bill of costs being developed out of what is in reality an indebtedness of $76,174.02. This is the sum for which I must give judgment in the plaintiffs' favour against the defendant firm.