HUNG YING ESTATES LTD v. MICHAELS MARIANNE NANNETTE

LDPD 1452/2025

[2026] HKLdT 9

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO. LDPD 1452 OF 2025

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REASONS FOR DECISION

(Application for Leave to Appeal)

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1.  This is an interlocutory application taken out by the Respondent on 5 February 2026 seeking leave to appeal against my Decisions made on 26 January 2026 (“the Decision”) which, inter alia dismissed the Respondent’s application for review of my judgment dated 6 January 2026. The judgment was, in gist, that I ordered the Respondent to deliver vacant possession of the suit premises to the Applicant subject to a relief for payment of rental in arrears on or before 14 January 2026.

2.  Attached to the present interlocutory application was an Affidavit by the Respondent, stating the following grounds for appeal:

(1)   Serious failures in legal process – denial of the right of the Respondent to be heard and breach of the rules of natural justices;

(2)  In the application for review and during the hearing on 6 January 2026, the Respondent had provided the relevant laws of the landlord and tenant ordinance as well as the specific clauses in the formal tenancy agreement and provided evidence;

(3)  Procedural impropriety where in her interlocutory application dated 13 January 2026, the Respondent requested additional time only for one week/ stay of execution but was denied, etc.

3.  With respect, the Respondent appeared to be repeating her grounds in her application for review which had already been answered by the Decision.

4.  During the course of hearing on 24 February 2026, I had reminded the Respondent that, under section 11(2) of the Lands Tribunal Ordinance, she may only appeal against the Decision on the ground that the Decision was erroneous in point of law. Then the Respondent submitted a so-called list of authorities in support of her application for leave to appeal.

5.  Having scrutinised these so-called authorities, I considered them not relevant or not applicable. I dismissed therefore the Respondent’s interlocutory application.

6.  Here are my reasons for the dismissal.

Jurisdiction of Lands Tribunal

7.  Firstly, the Respondent submitted that, contrary to my explanation in §§25-36 of the Decision, the Tribunal had jurisdiction under section 8 of the Lands Tribunal Ordinance, Cap 17 to deal with her alleged breach of covenant by the Applicant. Here, the Respondent cited Ridge Ltd v Golden Castle Ltd [2005] 3 HKC 592. In this case, the plaintiff applied for vacant possession of the premises in question on the ground that the defendant failed to pay rent, service fees, rates and other outgoings for the premises. The defendant argued it had a legal or equitable right of set-off of its claim for losses arising from the plaintiff’s breach of covenants.

8.  However, the defendant’s claim for damages was unliquidated, even though a figure has been given. The High Court Judge remarked at §16 of the judgment that: “In general, interference with quiet enjoyment requires some substantial physical interference with the enjoyment of the premises.” Then he found in the following paragraph that “it could not be said that the defendant could not do business, or that its business was so substantially interfered with by the landlord that it should not have to pay rent, as might be said if the flooring was defective or if the customers could not get into the premises.” Then he ruled at §18 as follows:

“I do not see that, in all the circumstances of this case, the counterclaim is sufficiently closely connected to the claim, or that it would be manifestly unjust to allow the covenant for rent to be enforced without regard to the covenant for quiet enjoyment. So set-off does not come into the picture. If the defendant has a claim it must be pursued separately.” (underline added)

9.  This Ridge Ltd case can be distinguished from the present case in the following:

(1)  This Ridge Ltd case was a case commenced by the landlord in the Court of First Instance instead of in the Lands Tribunal whose jurisdiction is limited by section 8 of the Lands Tribunal Ordinance.

(2)  I have cited authorities such as 黃英對譚炳新, HCMP 2049/2000 (unreported, dated 1 August 2000), Charmway Development Ltd v Long China Engineering Ltd [2001] 3 HKC 515 and Chan Yin Kwan v Wong Kam Hoi, CACV 223/2007 (unreported, dated 21 December 2007) in §§27-30 of the Decision to explain the jurisdiction of the Tribunal in excluding counter-claims.

(3)  The plumbing problem as well as those alleged by the Respondent and stated in §§13 & 15 of the Decision could in no way amount to “substantial physical interference with the enjoyment of the premises.”

(4)  In Glorigate v Poon Siu Wo, HCA 1176/2014 (unreported and dated 15 April 2015), Deputy High Court Judge B Chu (as she then was) dismissed an argument of equitable set-off [1]:

“70. … it is also not possible for Ds to rely on the doctrine of equitable set-off. For equitable set-off to operate, the claim and counterclaim must be sufficiently closely connected so that it would be manifestly unjust to enforce one without regard to the other… the first issue to be resolved in that case was whether the plaintiff’s obligation to pay rent was conditional upon the defendant’s compliance with certain clauses of the tenancy agreement.

71. Here, in the Offer Letter, there were no provisions that Ds’ obligation to pay rent was conditional upon there being no illegal structures or no unauthorized additions in the Premises.

72. Having considered the above, I have come to the view that on the present evidence it is not possible for Ds to rely on the doctrine of equitable set-off.” (underline added)

Equitable Set-off

10.  In the present case, there was no pleading of a set-off in the Notice of Opposition filed by the Respondent on 18 November 2025. A defence of set-off has to be specifically pleaded (see Hong Kong Civil Procedure 2025, Vol 1 at paragraph 18/8/34). Therefore, the defence of set-off is not available to the Respondent.

11.  In spite of the above, the Respondent cited British Anzani (Felixstowe) v International Marine Management [1980] QB 137 where Forbes J concluded at 151F-G that:

“A consideration of all these cases leads me to the conclusion that except in cases of distress or replevin equity has never refused to interfere to protect a tenant whose landlord was bringing proceedings based on non-payment of rent, if the tenant had a bona fide cross-claim for unliquidated damages against the landlord, provided that he was not covered by an existing common law remedy and that the ordinary rules pertaining to equitable set off were obeyed.” (underline added)

12.  In the present case, I was not persuaded that the plumbing problem as well as those alleged by the Respondent and stated in §§13 & 15 of the Decision were not covered by an existing common law remedy. These “serious defects” are repeated by the Respondent:

•  No hot running water in bathroom or kitchen for over six months,

•  Non-functioning ventilation hood,

•  Damaged front door and locks,

•  Rainwater seeping from the window in living room and both bathrooms,

•  Water leakage under the sink in bathroom, etc

13.  Indeed, Forbes J emphasised the qualification at 152E-F:

While I am satisfied that it is proper in principle to allow that a cross-claim could be effective as an equitable set off against a claim for rent, it by no means follows that such a defence is available in all circumstances. The important qualification is that the equity must impeach the title to the legal demand, or in other words go to the very foundation of the landlord’s claim. This seems to me to involve consideration of the proposition that the tenant’s cross-claim must at least arise under the lease itself, or directly from the relationship of landlord and tenant created by the lease......” (underline added)

14.  Back to Charmway Development Ltd, Chu J (as she then was) recited the common law principle at 519D-I that the covenant to pay rent is independent of the other covenants or obligations under a lease. It is generally no defence in saying that the tenant is not obliged to pay rent or the landlord is not entitled to rent by reason of alleged breach of the tenancy agreement on the landlord’s part. The principle applied to the facts of that case where the obligation of the tenant to pay rent was not expressed to be subject to or conditional upon compliance by the landlord of its obligations thereunder.

15.  Chu J also observed at 520F:

“It is also to be noted that the statement of claim contains no particulars for arriving at the amount of damages claimed by the plaintiff, being $2.5 million. The affirmation filed in opposition to the summary judgment application also contains no details of how the sum is reckoned or estimated. Mr Mok, in the course of his submissions, explains that the plaintiff has difficulties in quantifying its loss. The point therefore is this: even if the plaintiff establishes a right to the claim for damages, its claim may or may not exceed the counterclaim.” (underline added)

16.  The similar principle was applied in Cheung Yu Chun Katherine v Splendid Yield Limited, DCCJ 3646/2014 (unreported, dated 23 June 2016) where HH Judge Leung (as he then was) found at §80 no basis put forward in discharge of tenant’s burden to show that landlord’s entire claim and thus its entitlement to demand for rent would be extinguished.

17.  Also in Ramadour Industries Limited v Bullen Christian Anthony, LDPD 2025/2016 (unreported, 22 November 2016) which I cited at §33 of the Decision, I refused to entertain the counter-claim or equitable set-off argued by the tenant. I stated at §31 of the judgment that:

“It is patently obvious that the respondent and his family had continued to reside at the Premises despite the so many problems he alleged and the respondent even proceeded to sign the Tenancy Agreement on 28 August 2014. There are no particulars of any relevant loss or damage apart from his own estimates or hear-say quotes. There is no evidence that the respondent has himself paid for any repairs, and more importantly that he has suffered any damage for his inability to use any part of the Premises for any period of time during the years of the Tenancy Agreement due to the structural defects alleged.”

18.  The same is particularly true in the present case when the Respondent and her mother are still residing at the suit premises.

19.  And more recently in Lui King Chun, the Executrix of the Estate of Law Dei Hee aka Lo Tai Hi aka Lo Tai Hi, deceased v Kinzie, DCCJ 95/2023 (unreported, dated 18 April 2024), Deputy District Judge Joseph Vaughan ruled at §27 that:

“… even if assuming that the alleged acts complained of could be attributable to the plaintiff, the alleged claim for damages for pain and suffering and emotional distress is in fact an unliquidated claim that should be assessed. It is in the nature of an equitable set-off. As such, it is not a defence to the Plaintiff’s claim for possession on account of non-payment of rent. At the most, it could only be relied upon as a defence to the plaintiff’s claim for arrears of rent and mesne profits (see Golden Sunrise Limited above).”

Unfit Premises

20.  At §40 of the Decision, I had cited Halsbury’s Laws of Hong Kong, Volume 36, 2^nd Edition, 2025, [235.224] in explaining that “rent continues to be payable notwithstanding that, in the case of a dwelling house or flat, it is at the time of letting, or subsequently becomes, unfit for habitation”.

21.  In her application for review dated 13 January 2026, the Respondent referred to section 117(3) of the Landlord and Tenant (Consolidation) Ordinance, Cap 7 which I had dealt with at §16 of the Decision. Now the Respondent referred to section 117(1) of the Landlord and Tenant (Consolidation) Ordinance instead. However, this section 117(1) was concerned with continuation of tenancies under part IV of the Ordinance which would have no application in the present case. More importantly, this section 117(1) was repealed in the Landlord and Tenant (Consolidation) (Amendment) Ordinance 2004.

22.  And more surprisingly, the Respondent cited Time Rich 08 Limited v DBE (HK) Limited & Others, HCA 566/2017 (unreported, dated 23 November 2017) in support of her argument that there is an implied covenant of the landlord for fitness for habitation of the suit premises.

23.  With respect, this case appears to contradict her arguments. At §§40 & 41, B Chu J stated as follows:

“40. ... What was clear was that notwithstanding the water leakage, D1 stayed on occupying the Premises until March 2017.

41.    Having considered the evidence, what Ds alleged about the serious effect of the water leakage, whether on the Premises or on D1’s business is in my view not supported and not believable.”

24.  More importantly, B Chu J agreed at §50 that there is no implied covenant that unfurnished premises are fit for the purpose for which it has been let, whether for habitation or for the tenant’s intended purposes. Furthermore, B Chu J affirmed at §62 that there were no implied terms nor was it necessary to imply terms in that case.

25.  In addition to Time Rich 08 Limited, the Respondent cited a case called Quickfit Ltd v Tycho Properties Ltd (1978) 13 HKLR 194 which is however nowhere to be found. A copy of the table of cases reported in Hong Kong Law Reports 1978 is attached at the Appendix.

26.  I suppose the Respondent has fallen into the trap of AI hallucinations.

Rent Abatement

27.  Once again, the Respondent referred to Time Rich 08 Limited and The One Property Limited v The Swatch Group (Hong Kong) Limited & Another, HCA 268 & 269/2021 (unreported, 8 February 2022) arguing there should be an abatement of rent in due course.

28.  However, in both of the two cases, there were corresponding rent abatement clauses in the respective tenancies. In contrast, there is none in the captioned Tenancy.

Director’s Authority

29.  When the hearing of the Application was conducted on 6 January 2026, the Respondent had challenged Mr Cheung, being a director of the Applicant, having no authority to initiate the Application on behalf of the Applicant. I had explained at §21 of the Decision that under section 117(1) of the Companies Ordinance, Cap 622, “… in favour of a person dealing with a company in good faith, the power of the company’s directors to bind the company, or authorize others to do so, is to be regarded as free of any limitation under any relevant document of the company.”

30.  Now the Respondent referred to section 127 of the Companies Ordinance, alleging that “execution of documents and binding acts by a multi-director company require proper corporate authorization, typically a board resolution.”

31.  With respect, section 127 of the Companies Ordinance applies only when the company “executes” a document where a degree of formality is required. Its provisions are set out as follows:

“(1) A company may execute a document under its common seal.

(2) If a company executes a document under its common seal, the seal must be affixed in accordance with the provisions of its articles.

(3) A company may also execute a document—

(a) in the case of a company with only one director, by having it signed by the director on the company’s behalf; or

(b) in the case of a company with 2 or more directors, by having it signed on the company’s behalf by—

(i) the 2 directors or any 2 of the directors; or

(ii) any of the directors and the company secretary of the company.

(4) For the purposes of subsection (3), if a person is to sign a document on behalf of 2 or more companies, the person must sign the document separately in each capacity.

(5) A document signed in accordance with subsection (3) and expressed (in whatever words) to be executed by the company has effect as if the document had been executed under the company’s common seal.

(6) In favour of a person specified in subsection (7), a document is to be regarded as having been executed by a company if the document purports to have been signed in accordance with subsection (3).

(7) The person is a purchaser in good faith for valuable consideration and includes—

(a) a lessee;

(b) a mortgagee; or

(c) any other person who for valuable consideration acquires the property.

(8) This section also applies to a document that is executed, or purports to be executed, by a company in the name of or on behalf of another person whether or not that other person is also a company.”

32.  Obviously, section 127 of the Companies Ordinance does not apply in the present case when the Tenancy was not “executed”. The Respondent must have overlooked section 121 of the Companies Ordinance which provides as follows:

“(1) This section applies to—

(a) a contract that would be required by law to be in writing and under seal if made between natural persons;

(b) a contract that would be required by law to be in writing, and to be signed by the parties to the contract, if made between natural persons; and

(c) a contract that, though made orally and not in writing, would by law be valid if made between natural persons.

(2) A contract specified in subsection (1)(a) may be made by a company—

(a) in writing under the company’s common seal (if any); or

(b) in writing executed in accordance with section 127(3) and expressed (in whatever words) to be executed by the company.

(3) A contract specified in subsection (1)(b) may be made on behalf of a company in writing signed by any person acting with the company’s authority (whether express or implied).

(4) A contract specified in subsection (1)(c) may be made on behalf of a company orally by any person acting with the company’s authority (whether express or implied).

(5) A contract made in accordance with this section—

(a) is effective in law; and

(b) binds the company and its successors and all other parties to the contract.

(6) A contract made in accordance with this section may be varied or discharged in the same manner in which it is authorized by this section to be made.”

33.  Thus, a company incorporated in Hong Kong can execute a document (whether it is a simple contract or a deed) with or without its common seal affixed. Where the company does execute a document with its common seal, it must be affixed in accordance with the provisions of its articles of association in accordance with Section 127(2) of the Companies Ordinance.

34.  Where a company incorporated in Hong Kong executes a document without a common seal, the document will have the same effect as if the document had been executed under common seal where:

•  it is expressed (in whatever words) to be executed by the company, and

•  it is signed by the sole director (in case of a company with only 1 director) on the company’s behalf or by 2 directors, or any of the directors and the company secretary (in case of a company with 2 or more directors) on the company’s behalf in accordance with Section 127(2) of the Companies Ordinance.

35.  However, where a contract is required by law to be in writing and to be signed, the contract may be made on behalf of the company in writing signed by any person acting with the company’s authority (whether express or implied) in accordance with section 121(3) of the Companies Ordinance, instead of under section 127.

CR109

36.  In the present application for leave to appeal, the Respondent raised a new issue on the absence of CR109.

37.  Under section 119L of the Landlord and Tenant (Consolidation) Ordinance, where the parties enter into or renew a tenancy to which this Part applies, the landlord shall lodge with the Commissioner of Rating and Valuation a notice in the specified form, ie CR 109, failing which a landlord shall not be entitled to maintain an action to recover rent under the tenancy agreement.

38.  In Fuk Lai Ling v. Poon Shu Wan [1983] 1 HKC 126, Sir Huggins V-P of the Court of Appeal analysed the right of a landlord who had failed to lodge a Form CR 109:

“It seems to me that there is no scope here for any "order" 'for the payment of the rent in arrear: the tenant has a free choice whether he will comply with the condition that the arrears be paid or suffer the enforcement of the forfeiture. If he chooses to pay, he will not ipso facto be paying an illegal rent or recovering the rent by action. It is well established that a contract may be unenforceable by action without being void. Thus in Leroux v Brown (1852) 2 CB 801, 824 Jervis, C.J. having set out the terms of s.4 of the Statute of Frauds, continued:

‘The statute, in this part of it, does not say, that, unless those requisites are complied with, the contract shall be void, but merely that no action shall be brought upon it: and, as was put with great force by Mr. Honyman, the alternative, 'unless the agreement, or some memorandum or note thereof, shall be in writing,' - words which are satisfied if there be any written evidence of a previous agreement, - shews that the statute contemplated that the agreement may be good, though-not capable of b[e]ing enforced if not evidenced by writing. This therefore may be a very good agreement, though, for want of a compliance with the requisites of the statute, not enforceable in an English court of justice’.

…

What I have just said is relevant also to the argument that it would be absurd if the Landlord could forfeit the tenancy for non-payment of a rent which she was "not entitled under the law to recover". I have placed the last six words in inverted commas to emphasise that payment of the rent is not illegal: the Landlord is not "entitled to maintain an action to recover" it. In so stating, I appreciate, I am already giving a broad interpretation to x.54(3), because what that subsection says is irrecoverable by action is the "rent stated in the notice mentioned in ss.(2)" and if there is no such notice (as here) ss (3) cannot on a strict interpretation be applicable at all. …..

 

However, there must be some limit on the liberality of the approach to the interpretation of the section, especially as it deprives a landlord of rights which he would have under the general law. Subsection (3) refers to maintaining an action to recover rent and it must be assumed that the Legislature meant what it said. By recovering the rent otherwise than "by action'' the landlord does not contravene the subsection. An action for possession on the ground of forfeiture for non-payment of rent is not an action to recover rent and, if successful, brings to an end the tenant's liability to continue to pay rent.” (underline added)

39.  In Fong Chi Ching v. George Harper Adams, LDPD 475/2005 (unreported, dated 8 June 2005), HH Judge Yung has said the same in paragraph 11 that: -

“The second complication is that no notice of entering to the tenancy agreement or to renew a tenancy agreement has been given to the Commissioner of Rating and Valuation. Therefore action to recover rent is not maintainable: section 119L(2). However failure to give such notice does not prejudice the right of the Applicant to forfeit the tenancy on ground of non-payment of rent. The date of forfeiture dates back to the date of Application. From that date, the Respondent is liable for mesne profits. Though I cannot order the Respondent to pay the arrears of rent, I can order him to pay mesne profits from the date of service of the Application to the date of delivery of possession. The Respondent filed his notice of opposition on 28 February 2005. The date of service must therefore be on or before that date. The fair assessment of mesne profit should be the same as rent. I order the Respondent to pay Applicant mesne profit at the rate of $6000 per month from 28 February 2005 to 24 May 2005 and costs of $1600.”

40.  The Court of Appeal in黃鳳鳴訴劉永強, CACV 245/2005 (unreported, dated 23 September 2005) upheld that the landlord is entitled to forfeit the tenancy and claim for mesne profits even in default of filing a Form CR 109.

41.  A fortiori, under section 6 of the Conveyancing and Property Ordinance, a tenancy taking effect in possession for a term not exceeding 3 years (whether or not the lessee is given power to extend the term) at the best rent can be created by parol and not put in writing and signed by the persons creating the same. In her Notice of Opposition and throughout the trial, the Respondent had affirmed or not in any way denied the essential terms as contained in the Tenancy Agreement which was for a term of 2 years from 1 August 2025 to 31 July 2027, ie not exceeding 3 years.

42.  More recently, in Poon Lone Leo v Lei Iok Chan, HCSA 49/2015 (unreported, dated 28 January 2016), it was also held that the existence of a tenancy can be determined based on the evidence of the parties.

Harassment/ Quiet Enjoyment

43.  The Respondent also repeated and alleged that the applicant and its agent had interfered substantially with her peaceful possession. I have dealt with the relevant authorities on this issue in §§42-49.

Respondent’s Right to Speak

44.  The Respondent, once again, complained that Ms Chan, the Applicant’s estate agent, was allowed to speak in the hearing on 6 January 2026.

45.  I had described the background in §§55-57 of the Decision. Ms Chan was in effect allowed to respond to the accusation or allegation by the Respondent that Ms Chan had failed to provide her with an original copy of the Tenancy Agreement which was signed in duplicate. The Respondent wanted the Tribunal to grant an order compelling Ms Chan to do so.

46.  Ms Chan said all along she had been telling the Respondent till January 2026 to get an original copy of the Tenancy Agreement at her office after it was stamped. But the Respondent asked her to send it to her by courier instead. Contrary to the allegation by the Respondent that she was not allowed to cross-examine Ms Chan, she admitted that Ms Chan did provide her with a copy via WhatsApp but she was not satisfied as she was advised by the Estate Agents Authority to have the original copy. The Respondent added that she did not want to meet Ms Chan again because she had a confrontation with Ms Chan on an occasion when she found Ms Chan was following her on the Light Rail.

47.  I did not allow Ms Chan to give evidence on other matters which were beyond the jurisdiction of the Tribunal. And, as a result, there was no point to allow the Respondent to cross-examine Ms Chan further.

48.  In this connection, I would like to refer to the recent judgment by H. Au-Yeung J in The Incorporated Owners of Kai Tak Garden (Choi Hung Road) v Woo Tak Yan & Another, HCSA 38/2025 (unreported, dated 23 February 2026) at §38 as follows:

“本席必須強調 ，儘管小額錢債審裁處案件的訴訟人大多沒有接受過法律訓練，因而可能不甚理解法庭程序，亦較難掌握例如盤問證人等的方法和技巧，但這絕不可以成為訴訟人濫用司法程序和謾罵、諷刺對方證人(甚至司法人員)的藉口。倘若主審司法人員認為訴訟人根本無意為案件的爭議點作有意義的盤問，並經提醒後屢勸不改，他便應該及早為盤問定下合理的時間限制，以免審裁處、其他訴訟方及證人的時間被白白浪費。審裁處每年須處理大量案件，時間寶貴，故此，審訊時間應該被分配予真正有需要的訴訟人，而並非別有用心的訴訟人。”

49.  In gist, it means although parties that attend the Small Claims Tribunal (or in the present case in the Tribunal) are mostly laymen with no legal training, it is no excuse for them to abuse the court proceedings, deriding or shouting at the witnesses. In case the judicial officer considers either party likely to take issue on irrelevant cross-examination, he should control or impose reasonable restriction to avoid the court proceedings to go astray, wasting court resources.

50.  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.”

51.  After considering what the Respondent presented in her Affidavit in support of her interlocutory application, and after hearing what the Respondent supplemented in her oral evidence and submission, I decided that the Respondent’s intended appeal has no reasonable prospect of success, and the Respondent failed to satisfy that there is some other reason “in the interests of justice” why the appeal should be heard.

Conclusion

52.  As a result, the interlocutory application by the Respondent to seek leave to appeal the Decision made on 26 January 2026 was dismissed.

Costs

53.  Although the general rule is that costs should follow the event, Mr Cheung Kwok Leung who represented the Applicant did not ask for costs. Accordingly, I ordered that there be no order as to costs.

Appendix