Choi Chee Ming and Another v. Leclecq Yu Mi

DCDT73 / 2019

[2019] HKDC 414

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

DISTRAINT CASE NO 73 OF 2019

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REASONS FOR DECISION

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1.This is a Summons taken out by the defendant on 6 March 2019 (the “Summons”) for the discharge of the Warrant of Distress obtained by the plaintiffs on 24 January 2019 (the “Warrant”) for arears of rent for House 3, Villa de la Golfe, 268 Ying Pun, Sheung Shui, New Territories, Hong Kong (the “Premises”).

2.At the end of the hearing on 18 March 2019, I have already made an order to dismiss the Summons. I have told the parties that I would hand down the reasons for the decision and the order for costs at a later stage.

Background

3.It is not in dispute that a flooding took place at the Premises on 29 August 2018. The defendant and the agent acting for the plaintiffs had been in dispute and there were communications via emails and between the parties’ respective solicitors.

4.It is also not in dispute that the defendant has not paid any rent since September 2018 and that the defendant has been and is still occupying the Premises.

The disputes

5.The defendant’s case is, as stated in the letter dated 18 September 2018 from her solicitors, Oldham, Li & Nie (“OLN”), that a broken sewage pipe had caused various flood damages to the ground floor of the Premises including the front door, the refrigerator, dishwater, lower kitchen cabinets and various furniture and fixtures, and that the defendant was “unable to use the kitchen, dining room and living room” and further, the contamination posed “as an imminent threat” to the defendant’s health and therefore the affected areas were “damaged, unfit for use and inaccessible”.

6.OLN demanded the plaintiffs to “repair the abovementioned damage and to reinstate the Affected Area at your expense” and “pursuant to Clause 5 of the Tenancy Agreement”, the defendant was entitled to suspend paying rent until the affected area became “habitable”.

7.Further, the second OLN letter dated 22 October 2018 stated: “We take note of your clients’ willingness to carry out repairs to the damaged areas…In order to remove all health risks in the Affected Area, our client would also require you to replace the lower kitchen cabinets and conduct a thorough cleaning and sanitization of the Affected Area.”

8.The defendant claimed that the affected areas are still not habitable: she claimed that she (and the family) are living on the upper floors.

9.The crux of this case is therefore for the court to decide whether Clause 5 should be applicable in this case.

The legal principle

10.Clause 5.1 of the Tenancy Agreement (page 92 of the Hearing Bundle) is a “suspension of rent” clause and stated:

“If the Premises or any part thereof shall at any time…be…damaged…beyond the control of the Landlord and not due to the default of the Tenant so as to render the Premises or any part thereof unfit for use or inaccessible…then the rent…shall from the occurrence of such event be suspended until the Premises or the part thereof affected shall again be rendered accessible and for habitation…”

“…in the meantime…the Tenant may at any time after 3 months…give…notice in writing to terminate this Agreement and thereupon the same and everything herein shall cease and be void as from date of the occurrence…but without prejudice to the rights or remedies of either party against the other…”

11.The legal principle regarding such “suspension of rent” clause is trite: “if a premises are damaged rather than destroyed, they must be so severely damaged as to render unfit for use, not merely dilapidated and in need of repair.” (page 104, Hong Kong Tenancy Law 6^th Edition by Malcolm Merry 2016 and paragraph 67 of the judgment of Hon B Chu J in Time Rich 08 Limited v DBE (HK) Limited and Others [HCA 566/2017])

12.There is no evidence in form of photographs or survey reports etc. produced before the court to support the severity of damage. However, the OLN letters, by themselves, already made an admission that the damages were “merely in need of repair” because repairs (and replacements) were exactly what OLN was demanding.

13.OLN also raised a “threat to health” argument and demanded a cleaning service. However, I note that the plaintiffs have already provided the defendant (on her request) a quotation from “Yuko Service Co. Limited” (which appeared to be a professional cleaning and sanitization company) as early as 6 September 2018 (page 118 of the Hearing Bundle).

14.The defendant admitted that she did not proceed with this cleaning service nor engaged her own professional cleaning service.

15.When asked, the defendant said that she did not think that the cleaning would be thorough enough to clean the kitchen cabinet. But she admitted that she was not a professional cleaner and she had not enquire with “Yuko” as to how they proposed to clean the kitchen cabinet and whether such proposal would be satisfactory. The defendant also said that she thought that the kitchen cabinet should be replaced and therefore she would not incur the cost of cleaning them.

16.Of course, none of these explanations make any sense. If there were such contaminations that was posing “as an imminent threat to health” such as to render the area “unfit for use”, the first thing any reasonable person would do would be to engage a professional cleaning company to clean and sanitize the area. And if the service contractor engaged by the plaintiffs was not satisfactory, the defendant would have engaged her own.

17.Further, the fee for the cleaning service on the quotation was HK$4,000, a fraction of the monthly rent of HK$32,000, and the defendant has her own lawyers and must be aware that she could always claim this against the plaintiff if liability could be established.

18.It is therefore disingenuous for the defendant to run a “suspension of rent” case for “contamination” and “unfit for use” but all along failing to engage any professional cleaning service. By deduction, it is clear that the defendant must have no concern that there is any “threat to health” due to any “contamination” all along.

19.In passing, I also note that, S.H. Leung & Co., the solicitors acting for the plaintiffs did offer to “carry out repairs to such damaged areas of the Premises including the Samsung refrigerator and the kitchen cabinet together with the cleaning and sanitization of the Affected Area” in a letter dated 1 November 2018.

20.Since the plaintiff now offered to pay for the cleaning service, the only remaining dispute between the parties must therefore be whether the lower kitchen cabinet needed to be “replaced entirely” (OLN letter dated 22 October 2018) or merely be “repaired” (S.H. Leung & Co. letter 1 November 2018), and yet the defendant continued to withhold paying rent (arrears of which amounts to HK$224,000 as of now).

21.I think that this is unreasonable even from the point of view of someone without the legal knowledge of the high threshold required of a “suspension of rent” clause.

22.The lower kitchen cabinet, whether to be replaced or repaired, could not be something that could possibly render the whole ground floor of the Premises unfit for use or inhabitable (and not merely dilapidated and in need of repair) as alleged. The circumstances of this case clearly fall far short of the legal threshold so Clause 5 is not applicable.

23.In passing, I also agree with the observation of Mr. Ng, Counsel for the plaintiffs, that the defendant did not give notice to terminate the Tenancy Agreement under Clause 5 either. She is clearly entitled to do so if the Premises (or part of it) is actually unfit for habitation as alleged.

Non-disclosure

24.In the Summons (page 1 of the Hearing Bundle), the defendant alleged that “the Plaintiffs did not fully disclose to the court the whole fats of the case…”. I think this argument is wholly misconceived. I agree with Mr. Ng that the Warrant fulfils all the requirements set out in Form 1 in the 5^th Schedule so could not be set aside on the ground of non-disclosure.

25.In other words, to obtain a Warrant, the plaintiffs only need to provide all the requisite information including the fact that rent is owed, the amount of rent owed and the period of overdue (Suneasy Ltd. v Suyong Designs Ltd [DCDT 2254/2015])

Right of set-off

26.Further, I also agree with Mr. Ng that the Tenancy Agreement expressly exclude the right of set-off under clause 2.1.1 (page 80 of the Hearing Bundle) thus any damages suffered by the defendant, even if actionable, would not affect the obligation of the defendant to pay rent under the Tenancy Agreement (Holly Key Investment Limited v Jin & Chun Corporation Limited [DCDT 1303/2017])

27.In short, if the defendant wishes to claim damages against the plaintiffs concerning the flood, she will need to commence a separate action but she still needs to pay rent under this agreement.

Costs order

28.Having provided my reasons for the decision, the only remaining matter is the order on costs.

29.Having considered the submissions from both sides, I order the defendant to pay the plaintiffs the costs of and occasioned by this Summons to be taxed if not agreed on a party-and-party basis if not agreed with certificate for counsel.

Mr Michael Ng, instructed by S H Leung & Co, for the plaintiffs

The defendant appeared in person