蕭楗燊 v. Devi Madhuri and Another

DCCJ 4475/2022

[2025] HKDC 843

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4475 OF 2022

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JUDGMENT

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Introduction

1.This is a trial of a tenancy dispute concerning the lease of premises located at ground floor, Shop No 5, Boss Commercial Centre, No 28, Ferry Street, Yau Ma Tei (the “Premises”).

Preliminary matter - The proper parties

2.At the trial, it emerged that the defendants were not properly identified and so I gave leave for the Writ to be amended such that the two defendants, Devi Madhuri and Vashisth. Shatlender were named as the 1^st and 2^nd defendants respectively.

3.The plaintiff further confirmed with me that he is not pursuing the claim against the 2^nd defendant. Hence, I made an order to dismiss the claim against the 2^nd defendant with no order as to costs.

Background

4.It is not disputed that the plaintiff is the owner of the Premises. By a Tenancy Agreement in Chinese signed by the parties (“Tenancy Agreement”), the plaintiff agreed to let to the 1^st defendant the Premises on the following terms:

(1) The term of the lease shall be 2 years starting from 15 August 2021 and expires on 15 August 2023 (the “Term”);

(2) The rent payable by the 1^st defendant was $25,000 per month for the first year (i.e. 15 August 2021 to 14 August 2022) and $27,000 per month for the second year (i.e. 15 August 2022 to 15 August 2023). The monthly rent was to be paid in advance on the first date of every month of the rental period;

(3) Importantly, Clause 1 provided that the 1^st defendant may not terminate the Tenancy Agreement within the Term, otherwise the 1^st defendant shall pay compensation in the sum of the rent for the remainder of the Term. If the 1^st defendant requested to terminate the Tenancy Agreement within the first year, the plaintiff was entitled to deduct 1 month of deposit and claim the rent for the remainder of the period to compensate his loss (“…規定租客在租用期内不得退租，否則按照所餘租期之時間賠償租金。如租客在租用期一年内要求退租，業主有權扣除一個月按金之數目以彌補損失。以及餘下租期租值彌補損失。”).

(4) Clause 5 provided that the 1^st defendant shall pay a deposit of 3 months’ rental to the plaintiff in the sum of $75,000 (the “Deposit”). When the 1^st defendant moves out of the Premises, the plaintiff shall repay the Deposit to the 1^st defendant without interest. If the 1^st defendant fails to pay the rent or other miscellaneous fees in full, the plaintiff has the right to deduct such sums from the Deposit. The 1^st defendant acknowledged that the Deposit shall not be used to payment of rent;

(5) Clause 7 provided that the 1^st defendant shall be responsible for payment of electricity fees and also 50% of the management fees;

(6) Clause 10 provided that the 1^st defendant shall compensate the plaintiff if any facilities of the Premises were damaged due to the 1^st defendant’s negligence;

(7) Clause 14 provided that the electricity supply account to the Premises shall be registered in the name of the plaintiff and the 1^st defendant shall pay the electricity bill according to usage. If the 1^st defendant fails to pay outstanding rent by over 15 days or fails to pay utility or management fees after repeated reminders, the plaintiff has the right to withhold supply of electricity or water to the 1^st defendant;

(8) Under Clause 17, the plaintiff retains the right to use the signage of his school uniform business. However, the 1^st defendant may use the space within the stainless steel frame thereunder.

5.It is not disputed that:

(1) The 1^st defendant paid the Deposit of $75,000 to the plaintiff shortly after signing the Tenancy Agreement;

(2) The 1^st defendant failed to pay any rent from 15 February 2022 onwards; and

(3) Until she moved out of the Premises on around 9 to 13 May 2022, the Premises was used by her to run a grocery business called “Daily Mart”.

The parties’ respective cases

6.As both parties were not represented and their pleadings were not professionally prepared, at the trial, I clarified with each party as to what were their respective cases.

7.The plaintiff’s case is that, in breach of the Tenancy Agreement, the 1^st defendant has unilaterally terminated the Tenancy Agreement without consent from the plaintiff. The plaintiff sought payment of the following sums:

(1) rent for the remainder of the Term (i.e. from 15 February 2022 to 14 August 2023) in the total sum of $324,000; and

(2) unpaid electricity fees and management fees in the sums of $6,340.

8.The plaintiff also claimed damages against the 1^st defendant for causing damage to various items in the Premises, namely: (i) the plaintiff’s signage at the exterior of the Premises; (ii) the steel box at the bottom of the shutter at the entrance of the Premises; and (iii) a steel box on the wall in the interior of the Premises.

9.The 1^st defendant’s case is as follows:

(1) Due to the impact of the ongoing COVID-19 pandemic at the time, her business at the Premises was poor and she was not able to pay rent since February 2022;

(2) Hence, she reached an agreement with the plaintiff for early termination of the Tenancy Agreement. Any unpaid rent would be deducted from the Deposit (the “Termination Agreement”);

(3) The 1^st defendant could not understand the terms of the Tenancy Agreement which was in Chinese;

(4) The 1^st defendant also counterclaims for the following:

(a) It was claimed that the plaintiff had wrongfully disconnected electricity supply to the Premises and she suffered the following losses:

(i) the frozen food in the freezers had gone bad causing her loss in the sum of $12,000 (being the value of the food); and

(ii) an electricity shutter broke down because of the disconnection of electricity and the cost of the remedial work was $15,000.

(b) She claimed that the plaintiff had harassed her by coming to the Premises to “bother” her such that she had no business in around February 2022 onwards when she failed to pay rent. Hence she claimed a sum of $25,000 per month representing the monthly rental of the Premises;

(c) She also claimed that because of the plaintiff’s wrongdoing she had to move to a new shop which was smaller, she had to put some of her items outside the shop and therefore she was fined by the Government in the sum of $1,500 for obstruction of public place.

Analysis

Plaintiff’s claim

Claim for rent

10.Based on the above, the issues to be determined at this trial in respect of the plaintiff’s claim for rent are as follows:

(1) Whether the 1^st defendant had prematurely terminated the Tenancy Agreement without the plaintiff’s consent?

(2) Whether the 1^st defendant is bound by Clause 1 of the Tenancy Agreement?

(3) If liability is established, what is the sum payable by the 1^st defendant?

Issue (1) – Whether the Tenancy Agreement was terminated without consent of the Plaintiff?

11.This issue is largely a factual dispute which depends on the credibility of the witnesses (i.e. the plaintiff and the 1^st defendant).

12.The approach to assessing the credibility of witnesses is well established. As summarised by Deputy High Court Judge Eugene Fung SC in Hui Cheung Fai and Another v Daiwa Development Ltd and Others HCA 1734/2009 (unreported, 8 April 2014) at §§77 to 83:

(1) Contemporaneous written documents and documents which came into existence before the problems in question emerged are of the greatest importance in assessing credibility;

(2) The Court should attach importance to the inherent likelihood or unlikelihood of any event having happened, or the apparent logic of such events;

(3) The Court may take into account the consistency of the witness’ evidence having regard to the undisputed or indisputable evidence, and the internal consistency of the witness' evidence;

(4) The Court should exercise care in drawing conclusions about truthfulness and reliability solely or largely from the appearance or demeanour of a witness or from the assessment of a witness’ character;

(5) The Court should also test a witness’ credibility by reference to objective facts which are proven independently of their testimony, taking into account their motives and to the overall probabilities.

13.The 1^st defendant’s evidence is that:

(1) According to her, she reached the Termination Agreement following verbal discussions with the plaintiff at around 26 March 2022. The terms of the Termination Agreement were documented in a handwritten memo dated 26 March 2022 which was signed by her, the plaintiff and the 1^st defendant’s daughter (the “Memo”);

(2) However, she claimed that she did not understand the Chinese text on the Memo;

(3) According to her, there was no discussion as to what would happen if the Deposit was not sufficient to cover the sums owed by her to the plaintiff.

14.The plaintiff’s evidence is as follows:

(1) he denied that he had reached the alleged Termination Agreement;

(2) he said that he had never given consent to the 1^st defendant to terminate the Tenancy Agreement early;

(3) He did not understand the English text of the Memo hence he only signed his name under the Chinese part (together with the signatures of the 1^st defendant and her daughter) but did not sign his name under the English part;

(4) The Chinese part of the Memo was explained to the 1^st Defendant by her daughter, who was able to read Chinese and converse in Cantonese.

15.Having considered the totality of the evidence, I prefer the evidence of the plaintiff:

(1) On a plain reading, the Memo provides the following:

(a) In gist, the English part provides that the 1^st defendant would pay rent by 16 April 2022, failing which the plaintiff could deduct the arrears from the Deposit;

(b) The Chinese part refers to the fact that 2 months’ of rent (about $50,000), 4 months of management fees (4 x $500) and unpaid electricity fees (about $2,000) were in arrears and that if the 1^st defendant failed to settle the sums owed by 16 April 2022, the plaintiff would take legal action (without mentioning any termination at all).

(2) Both the English and Chinese wording of the Memo do not support the 1^st defendant’s case on the Termination Agreement. There is no mention of any early termination or the consequences of such termination at all.

(3) There is also no suggestion from the Memo that there would be any waiver by the plaintiff of rental payment for the remainder of the term pursuant Clause 1. In the circumstances, it is also inherently unlikely that the plaintiff would be prepared to waive his entitlement given that the plaintiff unequivocally asserted his right to recover the various sums owed to him in the Memo;

(4) I am also satisfied that the Chinese part of the Memo was understood and agreed by the 1^st defendant, as reflected by the signatures of her and her daughter immediately underneath the Chinese part:

(a) I do not accept the 1^st defendant’s evidence that her daughter (who was 16 years’ old at the time) could not read Chinese. If that was the case, there was no reason for the daughter to sign the Memo;

(b) On the 1^st defendant’s own admission, she had lost her trust in the plaintiff by that time, hence there would be no reason for her to sign the Memo and agreed to its contents if she could not understand the Chinese part.

16.Hence, I reject the 1^st defendant’s case on the alleged Termination Agreement. As it is accepted by the 1^st defendant that she failed to pay rent since February 2022 and moved out of the Premises in May 2022, I find that she has unilaterally terminated the Tenancy Agreement without consent from the plaintiff. Hence, in addition to the unpaid rent from February to May 2022, she is also liable to pay to the plaintiff the rent for the remainder of the period (i.e. from May 2022 until 15 August 2023) according to Clause 1 of the Tenancy Agreement.

Issue (2) – Whether the 1^st defendant is bound by the Tenancy Agreement

17.The 1^st defendant also claimed that she could not understand the terms of the Tenancy Agreement which was written in Chinese. In my judgment, this does not amount to a defence to the plaintiff’s claim.

18.The lack of understanding of the contents of the contract is not a defence as a matter of law. As explained by Ribeiro PJ in Ming Shiu Chung & Others v Ming Shiu Sum & Others (2006) 9 HKCFAR 334 at §84:

“Reliance is universally placed on signatures appended to documents by persons of full age and understanding as signifying the signatory’s assent or adherence to what that document states. Where such a person has signed a document which purports to have legal effect, the law has never regarded it as enough to show that he signed without knowing its contents for the document to be disavowed. It is an everyday occurrence that people sign documents without reading the small (or even the large) print and therefore sign without actually knowing the terms (or all the terms) of the document signed. But they are held to the documents which they have chosen to sign unless there is shown to be a recognized legal basis for concluding that their apparent consent has been in some way vitiated or that reliance on that document by some other person falls into some category of unconscionable conduct justifying relief in equity.”

19.In the same case, Ribeiro PJ also referred to Bank of China (Hong Kong) Ltd v Fung Chin Kan & Another (2002) 5 HKCFAR 515 at 533 where Litton NPJ said:

“…the fundamental principle that, generally speaking, when a person signs a legal document, he or she is bound by the act of signature: As a matter of general law, it is no defence to say that he or she did not understand the contents of a legal document; that person takes the chance of being bound by its terms, as he or she can take the simple precaution of not signing until its contents have been fully explained and understood.”

20.Hence, I find that the 1^st defendant is bound by Clause 1 of the Tenancy Agreement.

Issue (3) – Quantum of rent payable

21.The 1^st defendant has failed to pay rent since February 2022 until she moved out in May 2022. Given my findings above, the plaintiff is also entitled to recover rent up to the end of the term pursuant to Clause 1 of the Tenancy Agreement in the sum of $474,000 as claimed.

Claim for electricity and management fees

22.It is not disputed that the 1^st defendant is liable to pay for the electricity fee and 50% of the management fee as provided under the Tenancy Agreement and she has not advanced any justification for her failure to do so.

23.The plaintiff accepts in his evidence that in fact he only charged the 1^st defendant $500 per month for the management fee.

24.Notwithstanding the plaintiff’s failure to adduce the relevant bills for the electricity and management fees, such sums owed by the 1^st defendant up to 26 March 2022 were expressly acknowledged in the Memo. Hence, I allow his claim under this category as follows:

(1) For electricity fees, I allowed the plaintiff’s claim of $1,840 in full;

(2) For management fees, I allow the plaintiff’s claim for 4 months up to late March 2022 (which were expressly acknowledged in the Memo) and a further month up to early May when the 1^st defendant moved out ($500 x 5 months = $2,500).

Claim for damage to facilities in the Property

25.In order to establish liability, the plaintiff must show that the 1^st defendant had caused the damage either directly or through her negligence. I also note that the plaintiff has failed to plead any particulars as to how the loss was caused and although some photos were produced as to the alleged damage, no explanation was given in his witness statement.

26.In my judgment, there is insufficient evidence to show that the damage (if at all) to the facilities was caused by the 1^st defendant:

(1) For the removal of the characters from the signage of the plaintiff’s school uniform business, there is no reliable evidence to show how the damage was caused. The plaintiff only mentioned for the first time at trial that the damage was caused by the 1^st defendant’s workman when they installed the signage of her “Daily Mart” business underneath the plaintiff’s sign;

(2) For the removal of the steel box at the entrance, it is common ground that the box was stolen by unknown persons. Again, I am not satisfied that there is clear evidence to show how the theft was caused by the 1^st defendant’s negligence; and

(3) For the loss/damage to the steel box on the wall in the interior of the Premises, the photos submitted by the plaintiffs were not sufficiently clear to what damage or loss was caused, let alone the cause of such loss/damage.

27.In any event, even if liability is established for this claim, I am only minded to award nominal damages as the plaintiff has failed to provide any supporting documents for the sums claimed. As canvassed during the trial, the plaintiff has actually not conducted the repair works yet and the sums claimed were based on the quotations provided by the contractors. I do not accept the plaintiff’s explanation that he could not obtain a written quotation from the contractors as the contractors required him to make a deposit first before issuing the quotations.

Conclusion on the plaintiff’s claim

28.During the trial, I inquired with the plaintiff as to the status of the Deposit. He told me that he had forfeited the Deposit in light of the 1^st defendant’s breach and expressed no strong opposition that the Deposit be taken into account in assessment of damages. In my view, the Deposit should be deducted to avoid double recovery.

29.Hence, I award to the plaintiff the following sums:

Item	Amount
Unpaid Rent	$474,000
Electricity Fees	$1,840
Management Fees	$2,500
LESS Deposit forfeited	$75,000
Total:	$403,340

Interest

30.As there is no specific plea in the Statement of Claim for interest in accordance with O18 r8(4) of the Rules of the District Court (Cap 336H), no pre-judgment interest is awarded. Interest is payable at judgment rate from the date of judgment until payment.

The 1^st Defendant’s counterclaim

Alleged harassment

31.Harassment is recognised as a common law tort under Hong Kong law, see: Sir Elly Kadoorie & Sons Ltd (for and on behalf of Itself, Its Current and Former Officers, Employees and Agents, Including Its Legal Representatives, Messrs Simmons & Simmons) v Samantha Jane Bradley [2024] 4 HKLRD 428 at §§24-32 per Chow JA. In order to make out a claim of harassment, the victim has to show that:

(1) the harasser, directly or through third parties, has, by a course of sufficiently repetitive, unreasonable and oppressive conduct, caused, and which he ought reasonably to know would cause, worry, alarm, emotional distress or annoyance to the victim;

(2) the conduct complained of must, objectively, amount to harassment (in the ordinary sense of that word);

(3) the harasser either intends to cause harm or injury to the victim by his harassing conduct, or is reckless as to whether the victim would suffer harm or injury as a result of the harassing conduct; and

(4) to complete the tort, the victim must have suffered actual damage caused by the harassment. For this purpose, physical harm, including anxiety, distress, (a fortiori) recognised psychiatric illness, and financial loss would suffice.

32.According to the 1^st defendant, since February 2022, the plaintiff would come to the Premises to harass the 1^st defendant and her daughter to demand rent. During March 2022, the harassment intensified and that the plaintiff would come to the Premises and swore at her and her daughter as often as twice a day.

33.In my judgment, the 1^st defendant has failed to prove that harassment had in fact occurred.

34.First, there is no documentary evidence or evidence from third party witnesses to support the allegation made by the 1^st defendant even though she claimed that such incident was well-known amongst the neighbours and also to the management office of the building in which the Premises are located.

35.Second, the 1^st defendant’s claim that she was repeatedly harassed by plaintiff is a serious allegation. In light of the same, I find the 1^st defendant’s evidence incredible that the police would reject her request to file a formal complaint as claimed by the 1^st defendant in her oral evidence.

36.Finally, I am not impressed with the 1^st defendant’s evidence. There were scant details as to her witness statement as to how the alleged harassment took place. I also find that the 1^st defendant had exaggerated her evidence by claiming that she was not able to conduct her business due to the alleged harassment (hence her claim for $25,000 which is equivalent to 1 month’s rent). This does not sit well with her evidence that the plaintiff only came to her shop about twice a day.

37.Accordingly, I dismiss this part of the counterclaim.

Damage caused by disconnection of electricity

38.It is not disputed that the plaintiff had disconnected electricity supply to the Premises on one occasion. However, there is significant disagreement between the parties concerning the circumstances of the incident:

(1) According to the plaintiff, he only temporarily disconnected electricity supply for a brief time of about 15 minutes after 16 April 2022 when the 1^st defendant failed to pay the outstanding rent and fees;

(2) According to the 1^st defendant, the incident took place sometime in March, before she signed the Memo on 26 March 2022 and electricity was cut off for at least a whole night.

39.Having considered the evidence, I find the 1^st defendant’s claim to be unmeritorious:

(1) Under Clause 14 of the Tenancy Agreement, the plaintiff is entitled to withhold electricity supply if the 1^st defendant has failed to pay rent for 15 days or has persistently failed to pay utility bills despite demands from the plaintiff. Even on the 1^st defendant’s case, by March 2022, the 1^st Defendant was already in arrears in respect of her rent, management fees and electricity bill payments and hence the plaintiff was entitled to withhold electricity supply pursuant to Clause 14;

(2) The 1^st defendant has failed to adduce any documentary evidence showing the alleged loss has in fact occurred:

(a) The 1^st defendant has failed to adduce any photos showing the alleged spoilation of food even though she claimed that such photos were in her daughter’s mobile phone;

(b) There is also no photographic evidence showing the alleged damage to the shutter or the removal of its motor as claimed by the 1^st defendant;

(c) No documentary evidence of the 1^st defendant having brought any complaint of the alleged damage to the police or the management office has been adduced.

(3) I also find the 1^st defendant’s account on the shutter to be somewhat improbable. As a matter of common sense, it is unlikely that a temporary disconnection of power supply to the shutter could cause any permanent damage.

(4) There is also no corroborating evidence to support the 1^st defendant’s claim of $12,000 for the spoiled food and $15,000 for the broken shutter.

Claim for $1,500 fine for obstruction

40.According to the 1^st defendant, the fine was imposed in the 1^st defendant after she moved to the new shop in May 2022 as the new shop was too small for her. I do not see any legal or factual basis to hold the plaintiff liable for the fine given that it was imposed on the 1^st defendant due to her own violation of the law.

Conclusion on the Counterclaim

41.For the reasons set out above, the 1^st defendant’s counterclaim is dismissed.

Costs

42.At the end of the trial, both parties confirmed with me that they do not seek costs against each other irrespective of the outcome. Hence, I make no order as to costs.

Disposition

43.Accordingly, I make the following order:

(1) The 1^st defendant do pay to the plaintiff a sum of HK$403,340;

(2) Interest on the above sum be payable at judgment rate from the date of judgment until payment;

(3) The 1^st defendant’s counterclaim be dismissed;

(4) There be no order as to costs.

The plaintiff appeared in person

The 1^st defendant appeared in person

The 2^nd defendant was not represented and did not appear