A18 LTD v. THE FIRST TELEPHONE MOTEL CO LTD

LDPD 79 & 80/2016 (Heard together)

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO. LDPD 79 of 2016

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APPLICATION NO. LDPD 80 of 2016

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DECISION ON
(APPLICATION FOR LEAVE TO APPEAL)
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1.  There are two interlocutory applications in this hearing. The first one was taken out by the respondent on 30 March 2016 seeking

(i) leave to appeal against my decision made on 21 March 2016 in which I dismissed the application by the respondent for review of my judgment made on 18 February 2016;

(ii) stay the execution of the writ of possession of two adjoining units, namely Flat 18 (No 8 Man Wui Street) and Flat 20 (No 6 Man Wui Street) on 1^st Floor, Man Wah Building, Nos 1-23 Man Ying Street and Nos 2-24 Man Wui Street, Kowloon (which are hereinafter referred to individually as Flat 18 and Flat 20 as the case may be or collectively as “the Premises”) until the appeal is concluded; and

(iii) leave to add the affirmation of “a key witness” or to file an affirmation . 

2.  The second interlocutory application dated 1 April 2016 was taken out by a 「陳美寶」who claimed to be a sub-tenant of the Premises. This 「陳美寶」, hereinafter referred to as “the Intended Respondent”, seeks to be added as a second respondent and also a stay of execution of the writ of possession of the premises until the appeal is concluded. The Intended Respondent does not appear in the hearing and is represented by Mr Sze Ching Lok (“Mr Sze”), who is the General Manager of the respondent.

3.  Having heard the submissions of both parties, I dismissed both interlocutory applications and said I would provide the reasons for my decisions in due course. Here are the reasons.

Background

4.  The background of my decision made on 21 March 2016 is detailed in my Reasons for Decision of even date (“the Decision”).  In gist, there are two applications by two related applicants as landlord against the same respondent as tenant of the Premises for recovery of possession of the Premises on the ground that under the respective tenancy agreements, the respondent had failed to pay rent since 1 December 2015.

5.  The opposition by the respondent was on two grounds which are as follows:

(i) The applicants did not provide correct accounting information for rent payment and further they agreed to let the respondent to pay the rent by instalments;

(ii) The respondent is going to commence a related action in the District Court for off-setting the rent and damages.

6.  These are indeed the 4^th time that the applicants made similar applications to the Tribunal in respect of the same tenancies, the previous applications being:

Flat 18	Flat 20
LDPD 1561/2014	LDPD 1558/2014
LDPD 2343/2014	LDPD 2342/2014
LDPD 164/2015	LDPD 166/2015

7.  At the beginning of the hearing on 18 February 2016 at 10.00 am, a Mr Sung Baidai (“Mr Sung”) appeared on behalf of the respondent and requested the adjournment of the hearing. He produced a medical certificate of even date stating that Mr Sze was suffering from pharyngitis and recommended a rest of one day.

8.  Mr Sung also produced a hand-written note (“the Note”) supposed to be written by Mr Sze that the latter was suffering from abdomen pain and asking for adjournment of the hearing.

9.  Obviously pharyngitis which by reference to the Oxford Advance Learner’s English-Chinese Dictionary, the 7^th Edition, means “a condition in which the throat is red and sore” and is different from abdomen pain; in any event I did not consider it is appropriate to adjourn the hearing as explained in the Decision. Based on the submission by the respondent as attached to the Note and the submission of the representative of the applicants, Mr Wong Ming (“Mr Wong”), I ordered the respondent to deliver vacant possession of the Premises to the applicants and pay arrears of rent / mesne profits plus costs.

Interlocutory Application by the Intended Respondent

10.  The Intended Respondent did not appear in the hearing on 18 February 2016 and the name 「陳美寶」never appeared in any document prior to the interlocutory application dated 1 April 2016.

11.  Mr Sze appearing on behalf of the Intended Respondent suggests that the latter has a legitimate interest in this hearing because she, being the sub-tenant of the Premises, would be affected by the outcome.  Mr Sze conceded that he had not brought along any document/tenancy agreement in support because he did not know such document/tenancy agreement is needed.

12.  Mr Sze insisted that the applicants were fully aware that the Premises were let to various sub-tenants because the respondent had been occupying the Premises for the purpose of a guesthouse and he had recorded a conversation with the representative of the applicants to prove that; indeed, more intended respondents would be forthcoming in bringing similar interlocutory applications to be added as further respondents.  Again however, Mr Sze conceded that he had not brought along the recording in attending this hearing because he did not know such recording is needed.  In addition, Mr Sze conceded that he had not obtained a license as required under the Hotel & Guesthouse Accommodation Ordinance to be issued by the Office of the Licensing Authority of the Home Affairs Department.

13.  It is regretted that Mr Sze or the Intended Respondent failed to produce any document in support of the latter’s application to be added as a second respondent[1]. In any event, I do not find the Intended Respondent had any right to be heard as the applications are between the applicants and respondent as landlords and tenant under the corresponding tenancy agreements where the Intended Respondent is not a party; her name was also not found in the tenancy agreement anyway. I also accept the submission of Mr Wong who appeared on behalf of the applicants that according to Schedule II of the tenancy agreements, “The Tenant shall not use or permit to be used the Premises or any part thereof for any purpose other than for residential purpose only.”  Running a business as guesthouse is breach of this user provision[2].

14.  In view of the above, I dismissed the interlocutory application by the Intended Respondent and there is no order as to costs regarding this interlocutory application.

Interlocutory Application by the Respondent

15.  In the respondent’s interlocutory application filed on 30 March 2016, three reasons were stated:

(i) I have convinced the bookkeeper to be the eye witness to verify that the landlord’s representative promised us to make payment later until both parties agree;

(ii) I must apply for a leave to appeal and alternatively a stay of execution of writ of possession until the appeal is finished;

(iii) Two subtenants are going to file applications to be added as further respondents.

Leave to Appeal

16.  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.”

New Evidence

17.  In support of the respondent’s application for leave to appeal, a Ms Yau Kit Man Phoebe (“Ms Yau”) filed an affirmation stating that she is the bookkeeper of the respondent and on 7 January 2016, she heard a telephone dispute over a phone-speaker between Mr Sze and a Ms Yu of the applicant in LDPD 79/2016 over the rental in arrears. Ms Yau stated that towards the end of the dispute Ms Yu agreed that if Mr Sze paid over $16,000 (ie the rental payment eventually made on 9 January 2016), the respondent could withhold further payment until the total sum in arrears was agreed.

18.  This piece of evidence from Ms Yau has never been placed before the Tribunal though in the hearing on 18 February 2016, Mr Sung said something similar and Mr Sze for the respondent stated the same in the application for review.

19.  The well-established principles for adducing fresh evidence are laid down in Ladd v. Marshall [1954] 1WLR 1489. According to Hong Kong Civil Procedure 2016 Vol.1 para 59/10/8 at page 1116, “[the] Court adopts a strict approach in applying Ladd v Marshall: “When a litigant has obtained a judgment in a court of justice … he is by law entitled not to be deprived of that judgment without very solid grounds” … If it is sought to deprive him of his judgment by further evidence, three conditions must be satisfied before it can be received …”.

20.  The three conditions are as follows:

(i) it must be shown that the evidence could not have been obtained at the trial with reasonable diligence;

(ii) the evidence must be such that it would or might, if believed, have an important effect on the mind of the Tribunal though it need not be decisive; and

(iii) the evidence must be of a sort which is not improbable though it need not be incontrovertible.

21.  Firstly, similar argument had been raised by the respondent and I had dealt with it in §§22-23 of the Decision.  Secondly, I do not consider such new evidence “is not improbable”.  Why or on what condition the applicant would have committed to such a promise as it is trite that the respondent is obliged under the tenancy agreements to pay rent on time?[3] Such a promise, if any, is not supported by fresh consideration.  Waiver of a contractual right by conduct requires proof of some clear and unequivocal act by a party which is consistent, and consistent only, with an intention by that party to waive the right in question.

22.  In addition, if the respondent strongly believed that Ms Yu of the applicant had made such a promise, why should Mr Sze have tried to show to the Tribunal that he had paid the applicants $59,000 as demanded in the last minute before the hearing on 18 February 2016?  See §20 of the Decision.  It is particularly regretful that the cheque for $59,000 “was returned due to court decision and erroneous cheque writing” as conceded by Mr Sze in its 2^nd affidavit dated 23 March 2016 in support of  the respondent’s application for review of my judgment of 18 February 2016.

23.  In any event, if Ms Yau’s evidence is so important, the respondent should have sought Ms Yau to attend the hearing on 18 February 2016  if  Mr Sze was for any reason not available[4].

24.  For the above reasons, the introduction of Ms Yau’ new evidence cannot satisfy the Ladd v Marshall requirements andI am not prepared to allow this new evidence from Ms Yau[5].

Summary of Discussions

25.  In this hearing, Mr Sze repeated what he said in the respondent’s application for review which I have dismissed in the Decision. I decided that the respondent’s appeal had no reasonable prospect of success, and the respondent failed to satisfy me that there was some other reason “in the interests of justice” why the appeal should be heard. 

26.  These are simple applications for recovery of possession and payment of outstanding rent/mesne profit and costs.  Since I did 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 was therefore refused.

Conclusion

27.  The interlocutory application by the respondent to seek leave to appeal, stay the execution of the order for possession and to add the affirmation of “a key witness” or to file an affirmation were all dismissed, there being no order as to costs.

[1] Mr Sze did produce a Provisional Agreement for Tenancy dated 28 January 2013 in respect of Flat 20 (Exhibit R3) which contains a remark that the Premises cannot be used for illegal purpose or a home brothel (一樓一鳳行業) but I do not see it adds anything to the evidence.

[2]See also §43 of the judgment in Mutual Best Limited v Ngai Wah Kit, LDPD 1548/2013 (unreported, dated 23 December 2013).

[3] According to a copy of prevailing statements produced by Mr Wong in the hearing on 18 February 2016 (Exhibit A1), the payment of $16,000 by the respondent on 9 January 2016 was supposed to be the rental for Flat 20 for the period  from 1 November 2015 to 30 November 2015.

[4] In this hearing on 7 April 2016, Mr Sze also intimated that he is also prepared to call a Mr Hung, the respondent’s accountant and former operation director, to give evidence because Mr Hung was also present at hearing the telephone dispute.

[5] In any event, Mr Sze had not called Ms Yau to give evidence in this hearing.